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June 22, 2010

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Government Relations

Water Financing Provision Remains Under Consideration in the Senate

The Sustainable Water Infrastructure Investment Act of 2010, S. 3262 and H.R. 537, remains under consideration in the U.S. Senate as leaders work tirelessly to identify 60 votes needed for passage of an amended version of the broader tax extenders package, H.R. 4213. The water proposal that would allow for increased infrastructure investment has already passed the U.S. House of Representatives twice this year.

The broader tax extenders package, H.R. 4213, has faced controversy over provisions unrelated to water or infrastructure funding. The controversial provisions have been primarily related to the treatment of carried interest and the taxing of profits that investment fund managers receive. Chairman of the Senate Finance Committee Max Baucus (D-Mont.) has revised his proposal several times to meet the concerns of his colleagues in both parties. The latest Finance Committee proposal would tax 75 percent of carried interest income at ordinary tax rates — the same level as passed by the House — but fund managers holding investments for more than five years would see 50 percent of their carried interest compensation taxed at ordinary rates. The provision was aimed largely at easing the proposal's impact on the venture capital industry.

Despite concerns about the broader bill, the water proposal continues to receive broad bipartisan support from both chambers and both parties. Its low-cost and creative approach to tapping private capital for water infrastructure investment projects continues to be an appealing measure to encourage investment in water projects that would sustain jobs and create small-business opportunities. “The bill really is a win-win: each and every water project undertaken as a result of its ultimate passage will be vital to maintaining and protecting public health and the environment,” said Michael Deane, executive director of NAWC.

According to the Environmental Protection Agency (EPA) and the U.S. Government Accountability Office (GAO), a $500 billion gap exists in funding and needs to maintain critical water infrastructure. In practice, this “gap” and infrastructure neglect can have devastating consequences. Last year, American communities suffered more than 240,000 water main breaks and billions of gallons of overflowing combined sewer systems, causing contamination, illness, property damage and disruptions in the water supply. The water pipe break in Massachusetts last month left nearly 2 million people without water and placed an enormous strain on local residents and small businesses. One original co-sponsor of S. 3262, Senator John Kerry (D-Mass.), faced the need for water infrastructure repair and maintenance firsthand and updated his constituency on the water main break via Twitter.

Congressman Pascrell (D-N.J.), along with 54 bipartisan and geographically diverse colleagues, led this bill to passage in the U.S. House of Representatives. Congressman Pascrell spoke on the importance of this policy change: “Our nation’s job deficit and deteriorating water systems have gotten to the point that if you randomly pick up a newspaper in any American city, there’s a good chance you find a story about a company’s job cuts or a community’s water main break — maybe both. Taxpayers cannot be expected to foot the entire bill for all of the repairs and updates that our water infrastructure needs. Our legislation will encourage public-private sector partnerships to secure needed resources.”

Senators Menendez (D-N.J.) and Mike Crapo (R-ID) and 7 bipartisan colleagues continue to lead the charge in the U.S. Senate to bring the bill to final passage. “Part of rebuilding our economy for the 21st century is renovating the infrastructure that helps our communities prosper,” said Menendez. “Many of our communities in New Jersey have been challenged by aging and deteriorating water and sewer systems, which not only jeopardizes the health of our families but also puts significant strain on local budgets. With this legislation, we can help local governments afford water and sewer renovations without burdening taxpayers, and we can create thousands of jobs.”

“Many small communities need, and deserve, federal support to comply with federal water and wastewater guidelines,” Crapo said. “This bill would allow local communities to leverage private capital markets in combination with other financial mechanisms to finance water and wastewater infrastructure projects. It makes financial sense for communities and will improve public health and water quality.”


EPA Approves Alternative Test Procedures

EPA is approving 12 alternative test procedures for contaminants listed in the drinking water regulations. These procedures have been determined by EPA to be as effective as the methods already established in the regulations for the same contaminants. EPA has used its streamlined approval authority to make these 12 alternative methods available for determining contaminant concentrations in samples collected under the Safe Drinking Water Act (SDWA).

Click here to view or download the complete text of the Federal Register final action as well as a listing of the methods approved using the expedited approval process.