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. 
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 ‘‘Clean Water Invest-
ment and Infrastructure Security Act of 2005’’. 
SEC. 2. FINDINGS AND PURPOSE. 
(a) FINDINGS.—Congress finds the following:
(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 makes 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. 
The old infrastructure is deteriorating and is costly 
to replace. Recent government studies have esti-
mated costs of $500–$800 billion over the next 20 
years for maintaining and improving the existing in-
ventory, building new infrastructure, and meeting 
new water quality standards.
(5) Many local communities have neither the re-
sources for water infrastructure rehabilitation, nor 
post-9/11 security upgrades, and need to find cre-
ative solutions to this funding crisis. 
(6) The historical approach of funding infra-
structure is insufficient to meet the investment 
needs of the future. Federal financial assistance pro-
grams have been dramatically reduced since the 
1970s, and currently are not sufficient to address 
the infrastructure funding crisis. 
(7) 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. 
(8) In light of constrained Federal budgets, the 
availability of tax-exempt financing represents an 
important financing tool to help close the gap be-
tween available Federal assistance and water infra-
structure needs while preserving the Federal part-
nership. 
(9) 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. 
(10) 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. 
(11) Removal of State volume caps for water 
and wastewater infrastructure will make lower inter-
est capital available and enable municipalities, water 
districts, investor owned utilities, public-private part-
nerships, rural water corporations, and river authori-
ties to upgrade the Nation’s critical water and 
wastewater infrastructure at the lowest possible cost 
and comply with Federal mandates. 
(b) PURPOSE.—The purpose of this Act is to provide 
alternative financing for long-term infrastructure capital 
investment that is currently not being met by existing in-
vestment programs, and to restore the Nation’s safe 
drinking water and wastewater infrastructure capability 
and protect the health of our citizens. 
SEC. 3. TAX-EXEMPT BONDS FOR SEWAGE AND WATER SUP-
PLY 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 (relating to exception for certain 
bonds) is amended— 
(1) by inserting ‘‘(4), (5), ’’ after ‘‘(2),’’, and 
(2) by inserting ‘‘facilities for the furnishing of 
water, 
sewage 
facilities,’’ 
after 
‘‘docks 
and 
wharves,’’. 
(b) CONFORMING
CHANGE.—Paragraph (2) and 
paragraph (3)(B) of section 146(k) of such Code 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. 
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