Private Activity Bond Bills Introduced

Released June 9, 2011

The Sustainable Water Infrastructure Investment Act of 2011 was introduced in the House and Senate in May. The bills would remove water and wastewater from under the private activity bond volume cap, making it easier for up to $5 billion to be invested in water infrastructure annually, at a cost of $35.4 million a year. Such cap exemptions currently exist for other infrastructure improvements but not for water projects.

Private activity bonds or exempt facility bonds are a form of tax-exempt financing that encourages state and municipal governments to collaborate with sources of private capital to meet a public need. Congress provides states an annual allocation of the federal tax-exempt bonds based on population.