Underground Construction - August 2017 - 12

Construction Industry
Applauds PAB Legislation

L

Legislation that would open the door to private investment in water and
wastewater infrastructure investment was introduced recently by U.S.
Reps. John "Jimmy" Duncan (R-TN) and Bill Pascrell (D-NJ). The Sustainable Water Infrastructure Investment Act, which would remove water and
wastewater infrastructure from under the state volume cap subject to private activity bonds (PABs), was quickly endorsed by a broad-based group
of construction contractors, equipment manufacturers, distributors and
labor unions.
PABs are effective in financing long-term, capital-intensive infrastructure projects through public-private partnerships (P3s), usually between
state and municipal governments, and private entities. The P3 approach
makes repair and construction of infrastructure more affordable for municipalities and ultimately for American taxpayers, in large part because

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the projects utilize private capital in lieu of
public debt, shifting the
risk and long-term debt
from the municipality to
the private partner.
The federal government limits the number
of PABs that can be issued by each state. This
state volume cap usually
results in PABs being
used for more politically
attractive, short-term projects such as housing and education loans. On
average, less than 2 percent of all PABs are issued to water and wastewater projects, underscoring the need for increased investment.

Industry support
"With federal water infrastructure investment dwindling over the years,
it is vital that state and local governments have access to all the tools they
need to fix our aging water infrastructure," said Stephen E. Sandherr, CEO
of the Associated General Contractors of America. "This legislation could
unlock billions in private money that benefits our economy, public health
and the environment."
"Our nation's water infrastructure is in a state of crisis and we need a
combination of robust public investment and private financing to address
it," added Terry O'Sullivan, general president of the Laborers International Union of North America (LiUNA). "The Sustainable Water and Wastewater Infrastructure Investment Act is legislation that will help unlock
desperately needed private funds for communities with urgent water
infrastructure needs, as well as creating tens of thousands of good jobs
building our nation."
"Water and sewer projects are increasingly done through horizontal directional drilling and other trenchless excavation," said Daryl Bouwkamp,
senior director of Vermeer Corporation. "This infrastructure has been neglected for too long, and we thank Reps. Duncan and Pascrell for stepping
up again and introducing this important legislation."
Rob Darden, executive vice president of the Distribution Contractors
Association underscored the potential offered by increased PAB financing
in today's water infrastructure market. "The tax-exempt status of PABs
provides lower-cost financing for the water project and ultimately for end
users, creating a win-win for both sides," Darden said. "Of course, the
biggest win goes to our water and wastewater infrastructure, which is in
serious need of repair."
Underground Construction August 2017
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Underground Construction - August 2017

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