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    The Administration opposes H.R. 569, which would authorize $1.8 billion over 5 years for federal grants to states and municipalities to repair or replace sewer systems. The document argues that this level of funding is unrealistic given the current fiscal environment. It also claims that the bill may discourage utilities from moving toward full-cost pricing for their services and could encourage municipalities to delay projects in order to receive federal subsidies, increasing long-term costs. Instead, the Administration supports its own Water Enterprise Bond proposal to attract private capital for water infrastructure through tax-exempt bonds.

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    The Administration opposes H.R. 569, which would authorize $1.8 billion over 5 years for federal grants to states and municipalities to repair or replace sewer systems. The document argues that this level of funding is unrealistic given the current fiscal environment. It also claims that the bill may discourage utilities from moving toward full-cost pricing for their services and could encourage municipalities to delay projects in order to receive federal subsidies, increasing long-term costs. Instead, the Administration supports its own Water Enterprise Bond proposal to attract private capital for water infrastructure through tax-exempt bonds.

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    14 views1 page

    Hr569sap R

    Uploaded by

    losangeles
    The Administration opposes H.R. 569, which would authorize $1.8 billion over 5 years for federal grants to states and municipalities to repair or replace sewer systems. The document argues that this level of funding is unrealistic given the current fiscal environment. It also claims that the bill may discourage utilities from moving toward full-cost pricing for their services and could encourage municipalities to delay projects in order to receive federal subsidies, increasing long-term costs. Instead, the Administration supports its own Water Enterprise Bond proposal to attract private capital for water infrastructure through tax-exempt bonds.

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    EXECUTIVE OFFICE OF THE PRESIDENT

    O F F I C E O F M AN AG E M E N T AN D B U D G E T

    W AS H I N G T O N , D . C . 2 0 5 0 3

    March 6, 2007
    (House Rules)

    STATEMENT OF ADMINISTRATION POLICY

    H.R. 569 – Water Quality Investment Act of 2007


    (Rep. Pascrell (D) NJ and 19 others)

    The Administration strongly opposes H.R. 569, which would authorize a total of $1.8 billion
    over fiscal years 2008-2012 for Federal grants to States and municipalities to replace or repair
    sewer systems.

    This bill’s total authorization of $1.8 billion for the sewer grants during fiscal years 2008-2012 is
    unrealistic in the current fiscal environment. These activities already are eligible for Clean
    Water State Revolving Fund financing, with project prioritization determined by the States.
    Further, this excessive authorization will distort market signals by discouraging utilities and their
    consumers from moving toward full-cost pricing, as they have elsewhere. Instead, this bill may
    encourage municipalities to delay undertaking needed sewer infrastructure projects to wait for
    Federal subsidies, thus potentially diminishing reliability and increasing the eventual costs to the
    public.

    To provide additional opportunities to communities for financing needed wastewater


    infrastructure, the Congress should enact the Administration’s Water Enterprise Bond proposal,
    which would provide an exception to the unified annual State volume cap on tax-exempt
    qualified private activity bonds for wastewater and drinking water projects. To ensure the long-
    term financial health and solvency of these drinking water and wastewater systems, communities
    using these bonds must have demonstrated a process that will move toward full-cost pricing for
    services within five years of issuing the Private Activity Bonds. Consequently, this proposal will
    attract more private capital to meet the infrastructure needs of these sectors, help water and
    wastewater systems become self-financing, and minimize the need for future subsidies.

    *****

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