WASHINGTON, D.C. – This past weekend, Representatives Xavier Becerra (CA-31), the assistant to the speaker of the House and the only congressional member from Southern California on the Committee on Ways and Means, and Jon Porter (NV-3) introduced H.R. 3452, the Clean Renewable Water Supply Bond Act, bipartisan legislation that would create clean renewable water supply bonds that local municipalities can use, interest-free, to finance innovative water supply facilities.
“Los Angeles is certainly no stranger to water access issues,” Rep. Becerra said. “Study after study has shown in convincing fashion that a severe water crisis is looming in California and all across the country. Unless we do more to improve our infrastructure, we will be left high and dry.”
Population growth and heightened water use continue to strain our nation’s available water supplies. The total water usage per person has tripled over the last 30 years while the population has increased by 52 percent over that same period. The U.S. Government Accountability Office has reported that 36 states anticipate major water shortages in the next 10 years.
“Innovative technologies exist that can help provide new sources of clean water while also improving the environment,” Rep. Becerra said. “Start-up costs to bring these technologies online, however, are still too high to use conventional financing mechanisms. More comprehensive funding is needed and can be achieved through the use of tax credit bonds.”
The Clean Renewable Water Supply Bond Act would authorize the use of clean renewable water supply bonds, or CREWS, to finance innovative water supply facilities. These facilities include water-recycling facilities, projects to clean up and use impaired groundwater, and both seawater and brackish groundwater desalination projects. Public agencies could issue CREWS bonds in exactly the same way that they presently issue conventional tax-exempt municipal bonds.
“Southern Nevada consistently faces unique challenges to our water supply infrastructure because of rapid population growth and limited resources,” Rep. Porter said. “As a former mayor I understand the hurdles municipal governments face when financing critical projects to be able to deliver clean water Nevada families.”
The proceeds from the sale of the bonds would result in an interest free loan to a local public water agency. Instead of the agency having to make interest payments to the holders of the bond, the Federal government would provide the bondholders with a tax credit equal to their previously projected interest payments. Under the proposal, the agency would save over $62 million in interest payments on a $100 million water supply project.
“This legislation encourages the marriage of entrepreneurial thinking and public investment,” Rep. Becerra said. “Long term, the bill will save money while also helping stave off potential water access problems that will become our reality if we do nothing. I want to thank Congressman Jon Porter from Nevada for joining me in this bipartisan effort."
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