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Water is Your Business

Policy Solutions

Download our 2011 Policy Recommendations.

FACT: There is $190 billion in capital available to invest in America's infrastructure now. Our members are prepared to partner with the public sector to access this capital, but there are several existing impediments that should be eased so that our members can do what they do best. We have identified some innovative policy changes that Congress can enact and local leaders can use to make more private sector solutions viable in cities across the country, and make private capital more available for water infrastructure.

Remove Restrictions on Private Activity Bonds:

Tax Exempt Facility Bonds for Water and Wastewater

        Policy Recommendations:

  • Federal restrictions on tax-exempt bonds for public-private water and wastewater projects must be removed. View our policy paper here.
  • Legislation in the 112th Congress, H.R. 1802 and S. 939, has been introduced in a bipartisan. bicameral effort to make this important change. 
  • $5-6 billion in private capital would be made available for water projects.
    • $400-500 million in increased state and local tax revenue
    • 57,000 - 142,500 jobs supported
    • Alleviated municipal debt obligations
    • Costing only $354 million over 10 years

Short-Term Dividend Reinvestment

        Policy Recommendations:

  • Create a short-term dividend reinvestment incentive: To raise and sustain capital to invest in public water infrastructure, a public utility short-term dividend proposal would allow a utility serving the public to establish a plan under which individuals holding stock could elect to receive their dividends in the form of shares instead of cash and exclude a certain amount from income. When this proposal was previously implemented, stock issued under this provision had a zero basis and was taxed as capital gains if held longer than a year.
    • Water utilities issue dividends as an incentive to attract much-needed capital for infrastructure investment.
    • Water infrastructure is very capital-intensive. In fact, for a water utility to earn a dollar, nearly $3.40 must be invested in infrastructure.
    • Dividend rates should be permanently extended at 15 percent. 

    State Revolving Loan Funds

    Although 98 percent of investments in water are made at the local level, federal policy plays an important role in establishing incentives for water investment. The water industry supports continued funding for the Drinking Water and Clean Water State Revolving Loan Funds or SRFs.

    Policy Recommendations:

    • Private water service providers are ready and able to leverage federal investment in wastewater with private capital and expertise as they have done with the Drinking Water State Revolving Loan Fund since 1994.
    • Private water service providers must be eligible for the Clean Water State Revolving Loan Fund (CWSRF). The CWSRF does not provide loans to private community wastewater systems—preventing much-needed wastewater solutions and service to under-served communities and non-compliant systems.
    • State Revolving Loan Funds (SRFs) should provide incentives for the consolidation of operations and systems.
    • SRFs should only provide funding to systems that have demonstrated an ability to maintain compliance and become sustainable.
    • SRFs should incentivize the adoption of asset management practices.
    • SRFs should incentivize sustainable pricing: Loans but not grants should be made to utilities.

    Infrastructure Banks

    An Infrastructure Bank could provide an excellent supplement to the State Revolving Loan Funds and help increase private capital investment.

    Policy Recommendations:

    • Any federal Infrastructure Bank should include water infrastructure as part of its portfolio of projects.
    • An Infrastructure Bank should give priority to projects with existing financing tools to facilitate project finance and expand the financial capacity of infrastructure projects.
    • An Infrastructure Bank should provide merit-based financing and give priority to applications from public-private partnerships.

    Small and Rural Water System Solutions

    Throughout the country, our members have been successful in consolidating small, non-viable and often non-compliant water systems into a larger and more environmentally and economically sustainable framework.

    Policy Recommendations:

    • Private water service providers must be eligible for the Clean Water State Revolving Loan Fund (CWSRF). Private providers are currently precluded from obtaining wastewater funding—preventing much-needed wastewater solutions and service to underserved communities and non-compliant systems.
    • State legislation should be enacted to clarify regulatory treatment and the appraisal process of the voluntary sale of small water and wastewater systems.
    • Funding programs should be amended to provide incentives for the consolidation of operations and systems.
    • Funding programs should only provide funding to systems that have demonstrated an ability to maintain compliance and become sustainable or have developed a plan to do so.

    Public-Private Partnerships

    Our members currently operate well over 2,000 public-private partnerships. These are contractual agreements in which the skills, assets, and resources of the public and private sectors are shared to deliver water service or maintain a water facility for the use of the general public. Public-private partnerships can reduce costs and municipal debt burdens, and create opportunities for innovative solutions. Most importantly, public-private partnerships encourage local control and are best managed by a strong local leader. To read a report issued by the Water Partnership Council entitled, "Establishing PPPs for Water and Wastewater Systems: A Blueprint for Success," click here

    Policy Recommendations:

    • Federal limitations on public-private partnerships must be removed by eliminating the state volume cap on exempt facility water and wastewater private activity bonds so that tax-exempt debt can be used to finance this important public purpose.
    • Federal funding programs should give priority to projects with existing financing tools to facilitate project finance, leverage available funds and expand the financial capacity of infrastructure projects.
    • Federal funding programs should provide merit-based financing and give priority to applications from public-private partnerships.
    • A not-for-profit, third-party entity should be established to provide trusted and non-biased infrastructure project counsel to public officials/entities and their private partners. Local leaders need the resources and expertise to provide strong oversight of their public-private partnerships.
    • Participate in Water Is Your Business, a series of events held in cities across the country. The series was created to raise awareness about the need for investment in water infrastructure and its effect on business, and provides business and community leaders with the resources they need to get more involved.

    Partnerships USA

    Working with a private water service provider can help states, municipalities and local governments alleviate mounting debt obligations. Local water utilities have the ability to recover the full cost of service through existing revenue streams.

    Policy Recommendations:

    A not-for-profit, third-party entity should be established to provide trusted and non-biased infrastructure project counsel to public officials/entities and their private partners. Despite mounting infrastructure needs, many public officials/entities don't have the resources to consider the following:

    • When and where a private service arrangement might be appropriate
    • How to value resources and services
    • How to solicit, implement and oversee a private service arrangement

    View a helpful report from Stanford University here.

    Water Security

    In determining the disinfectant process to be used, utilities must consider a number of important factors specific to the site location. The choice of disinfectants must be made by the utility, after disclosure and discussion of pertinent facts in the community, as required by law.

    Learn more about security and safety here.

    Global Access to Water

    Policy Recommendations:

    • Congress should fully implement and fund the Senator Paul Simon Water for the Poor Act sponsored by Senator Durbin (D-IL) S.641

    Water and Energy Efficiency

    Policy Recommendations:

    • The U.S. Environmental Protection Agency's WaterSense® program should be encouraged and supported to provide water efficiency incentives. As of 2010, WaterSense has helped customers save a cumulative 46 billion gallons of water and $343 million in water bills.
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