I 

109TH CONGRESS 

1ST SESSION H. R. 1708 

To amend the Internal Revenue Code of 1986 to provide that the volume 

cap for private activity bonds shall not apply to bonds for facilities 

for the furnishing of water and sewage facilities. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 19, 2005 

Mr. SHAW (for himself, Mr. DAVIS of Florida, Mr. ENGLISH of Pennsylvania, 

Mr. THOMPSON of California, and Mr. TURNER) introduced the following 

bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

that the volume cap for private activity bonds shall not 

apply to bonds for facilities for the furnishing of water 

and sewage facilities. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Clean Water Invest5 ment and Infrastructure Security Act of 2005’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—Congress finds the following: 
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1 (1) Our Nation’s water and wastewater systems 

2 are among the best in the world, providing safe 

3 drinking water and sanitation to our citizens. 

4 (2) In addition to protecting the health of our 

5 citizens, community water systems are essential to 

6 our local economies, enabling industries to achieve 

7 growth and productivity that makes America strong 

8 and prosperous. 

9 (3) Regulated under title XIV of the Public 

10 Health Service Act (42 U.S.C. 300f et seq.; com11 monly known as the ‘‘Safe Drinking Water Act’’) 

12 and the Federal Water Pollution Control Act (33 

13 U.S.C. 1251 et seq.), community drinking water sys14 tems and wastewater collection and treatment facili15 ties are critical elements in the Nation’s infrastruc16 ture. 

17 (4) Water and wastewater infrastructure is 

18 comprised of a mixture of old and new technology. 

19 The old infrastructure is deteriorating and is costly 

20 to replace. Recent government studies have esti21 mated costs of $500–$800 billion over the next 20 

22 years for maintaining and improving the existing in23 ventory, building new infrastructure, and meeting 

24 new water quality standards. 
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1 (5) Many local communities have neither the re2 sources for water infrastructure rehabilitation, nor 

3 post-9/11 security upgrades, and need to find cre4 ative solutions to this funding crisis. 

5 (6) The historical approach of funding infra6 structure is insufficient to meet the investment 

7 needs of the future. Federal financial assistance pro8 grams have been dramatically reduced since the 

9 1970s, and currently are not sufficient to address 

10 the infrastructure funding crisis. 

11 (7) The Federal partnership with State and 

12 local communities has played a pivotal role in im13 proving the Nation’s water quality and drinking 

14 water supplies. Federal assistance under this part15 nership has been the linchpin of these improvements. 

16 (8) In light of constrained Federal budgets, the 

17 availability of tax-exempt financing represents an 

18 important financing tool to help close the gap be19 tween available Federal assistance and water infra20 structure needs while preserving the Federal part21 nership. 

22 (9) Providing alternative financing solutions, 

23 such as tax-exempt securities, encourages investment 

24 in water and wastewater infrastructure that in turn 
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1 creates local jobs and protects the health of our citi2 zens. 

3 (10) Federally mandated State volume cap re4 strictions in conjunction with other priorities have 

5 limited the use of tax-exempt securities on water and 

6 wastewater infrastructure investment. 

7 (11) Removal of State volume caps for water 

8 and wastewater infrastructure will make lower inter9 est capital available and enable municipalities, water 

10 districts, investor owned utilities, public-private part11 nerships, rural water corporations, and river authori12 ties to upgrade the Nation’s critical water and 

13 wastewater infrastructure at the lowest possible cost 

14 and comply with Federal mandates. 

15 (b) PURPOSE.—The purpose of this Act is to provide 

16 alternative financing for long-term infrastructure capital 

17 investment that is currently not being met by existing in18 vestment programs, and to restore the Nation’s safe 

19 drinking water and wastewater infrastructure capability 

20 and protect the health of our citizens. 

21 SEC. 3. TAX-EXEMPT BONDS FOR SEWAGE AND WATER SUP22 PLY FACILITIES. 

23 (a) BONDS FOR WATER AND SEWAGE FACILITIES

24 EXEMPT FROM VOLUME CAP ON PRIVATE ACTIVITY

25 BONDS.—Paragraph (3) of section 146(g) of the Internal 
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1 Revenue Code of 1986 (relating to exception for certain 

2 bonds) is amended— 

3 (1) by inserting ‘‘(4), (5), ’’ after ‘‘(2),’’, and 

4 (2) by inserting ‘‘facilities for the furnishing of 

5 water, sewage facilities,’’ after ‘‘docks and 

6 wharves,’’. 

7 (b) CONFORMING CHANGE.—Paragraph (2) and 

8 paragraph (3)(B) of section 146(k) of such Code are both 

9 amended by striking ‘‘(4), (5), (6),’’ and inserting ‘‘(6)’’. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to obligations issued after the date 

12 of the enactment of this Act. 

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