Tuesday, January 03, 2017
Congress Unites for Water
In early December 2016 members of the U.S. Congress managed to find common ground on one topic - water. With widespread support the Senate and House passed the Water Infrastructure Improvements for the Nation Act, which bureaucrats anxious for simplicity have nicknamed the WIIN Act. It was signed into law by President Obama before the Christmas holiday.
This is not the first attempt by Congress to deal with water infrastructure issues. In 2014, lawmakers passed the Water Infrastructure Finance and Innovation Act. Unfortunately, our esteemed leaders did not see fit to provide for financial support other than coverage of start-up expenses. The new WIIN Act comes with a $20 million budget, of which at least $17 million must be used as credit assistance for as much as $2 billion in water infrastructure projects.
Drought conditions in California and the toxic water system in Flint, Michigan are two high profile water-related disasters that might have been averted are at least reduced in scope with timely infrastructure investments. Projects to mitigate the effects of drought are eligible for funding through the WIIN Act. Additionally, certain provisions of the legislation expedite review of proposed projects to reduce drought such as water desalination and recycling. This could potentially benefit agriculture as well as communities.
The legislation also streamlines the loan making process for municipalities and even private entities that deliver water to communities like Flint. Additionally, the WIIN Act authorizes $100 million in capitalization grants to state funds set up to finance improvements to drinking water systems with lead exposure.
The U.S. Army Corps of Engineers has widespread responsibility for the country’s water infrastructure. The agency is not left out. The WIIN Act authorizes nearly $16 billion for the Corps projects, including thirty projects that have been the target of engineering work conducted since the 2014 legislation was enacted. Much of this work is related to navigation and transportation matters rather than water for drinking and agricultural use. The objective is to keep the U.S. economy competitive with the rest of the world with efficient shipping ports, harbors and channels.
A side benefit of the act is the economic impact of over $18 billion in spending on water-related systems design, engineering and construction. Like the earlier 2014 legislation the WIIN Act calls for purchasing from U.S. suppliers, guaranteeing the full force of the incremental fiscal spending hits the U.S. economy.
Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.