I 
112TH CONGRESS 
1ST SESSION H. R. 1802 
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 
MAY 10, 2011 
Mr. PASCRELL (for himself and Mr. DAVIS of Kentucky) 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Sustainable Water In-
frastructure Investment Act of 2011’’. 
SEC. 2. FINDINGS AND PURPOSE. 
(a) FINDINGS.—Congress finds the following: 
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(1) Our Nation’s water and wastewater systems 
are among the best in the world, providing safe 
drinking water and sanitation to our citizens. 
(2) In addition to protecting the health of our 
citizens, community water systems are essential to 
our local economies, enabling industries to achieve 
growth and productivity that make America strong 
and prosperous. 
(3) Regulated under title XIV of the Public 
Health Service Act (42 U.S.C. 300f et seq.; com-
monly known as the ‘‘Safe Drinking Water Act’’) 
and the Federal Water Pollution Control Act (33 
U.S.C. 1251 et seq.), community drinking water sys-
tems and wastewater collection and treatment facili-
ties are critical elements in the Nation’s infrastruc-
ture. 
(4) Water and wastewater infrastructure is 
comprised of a mixture of old and new technology. 
In many local communities across the Nation, the 
old infrastructure has deteriorated to critical condi-
tions and is very costly to replace. Recent govern-
ment 
studies 
have 
estimated 
costs 
of 
$500,000,000,000 to $800,000,000,000 over the 
next 20 years for maintaining and improving the ex-
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isting inventory, building new infrastructure, and 
meeting new water quality standards. 
(5) The historical approach of funding infra-
structure is insufficient to meet the investment 
needs of the future. 
(6) The Federal partnership with State and 
local communities has played a pivotal role in im-
proving the Nation’s water quality and drinking 
water supplies. Federal assistance under this part-
nership has been the linchpin of these improvements. 
(7) In light of constrained Federal budgets, the 
availability of exempt-facility financing represents an 
important financing tool to help close the gap be-
tween funds currently being invested and water in-
frastructure needs, preserving the Federal partner-
ship. 
(8) Providing alternative financing solutions, 
such as tax-exempt securities, encourages investment 
in water and wastewater infrastructure that in turn 
creates local jobs and protects the health of our citi-
zens. 
(9) Federally mandated State volume cap re-
strictions in conjunction with other priorities have 
limited the use of tax-exempt securities on water and 
wastewater infrastructure investment. 
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(10) Removal of State volume caps for water 
and wastewater infrastructure will accelerate and in-
crease overall investment in the Nation’s critical 
water infrastructure; facilitate increased use of inno-
vative infrastructure delivery methods supporting 
sustainable water systems through public-private 
partnerships that optimize design, financing, con-
struction, and long-term management, maintenance 
and viability; and provide for more effective risk 
management 
of 
complex 
water 
infrastructure 
projects by municipal utility and private sector part-
ners. 
(b) PURPOSE.—The purpose of this Act is to provide 
alternative financing for long-term infrastructure capital 
investment programs, and to restore the Nation’s safe 
drinking water and wastewater infrastructure capability 
and protect the health of our citizens. 
SEC. 3. EXEMPT-FACILITY BONDS FOR SEWAGE AND WATER 
SUPPLY FACILITIES. 
(a) BONDS FOR WATER AND SEWAGE FACILITIES 
EXEMPT FROM VOLUME CAP
ON PRIVATE ACTIVITY 
BONDS.—Paragraph (3) of section 146(g) of the Internal 
Revenue Code of 1986 is amended by inserting ‘‘(4), (5),’’ 
after ‘‘(2),’’. 
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(b) CONFORMING CHANGE.—Paragraphs (2) and 
(3)(B) of section 146(k) of the Internal Revenue Code of 
1986 are both amended by striking ‘‘(4), (5), (6),’’ and 
inserting ‘‘(6)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after the date 
of the enactment of this Act. 
Æ 
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