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.
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