This month AMWA expressed its support for an updated version of the “Water Infrastructure Finance and Innovation Act” (WIFIA) that was approved by the Senate Environment and Public Works (EPW) Committee on March 20. The bill would establish a new low-interest loan program to help communities finance major water infrastructure improvements.
The committee approved the pilot WIFIA proposal as Title X of S. 601, a Water Resources Development Act (WRDA) to reauthorize Army Corps project funding. Title X would create two separate WIFIA pilots, one operated by EPA, the other by the Army Corps of Engineers, while authorizing up to $250 million in funding for each over five years.
The new WIFIA title is similar to legislation (S. 335) offered in February by Sen. Jeff Merkley (D-Ore.). Sen. Merkley has pledged his support to the new measure, so his stand-alone legislation is now unlikely to advance.
Under the WIFIA pilot program proposed in S. 601, the Army Corps could offer WIFIA loans to support levee, dam, tunnel, aqueduct, reservoir, and related water infrastructure projects, as well as those to reduce flood risk. EPA could offer WIFIA loans for any project otherwise eligible for funding through the Clean Water or Drinking Water State Revolving Funds (SRFs); community water system or treatment works repair, rehabilitation, or replacement; brackish or sea water desalination or water recycling projects; or projects to enhance water system energy efficiency. In order to qualify for a WIFIA loan, a project’s expected total cost would have to exceed $20 million, though multiple smaller projects could be compiled into a single application that exceeds this threshold.
EPA and the Army Corps would each collect WIFIA loan applications from across the country, and select recipients after evaluating criteria such as creditworthiness, national or regional significance, and potential to improve water quality or quantity. The funds would not be routed through existing SRF programs.
Title X reflects many of the broad goals AMWA has supported in WIFIA proposals over the past several years, so AMWA wrote to the EPW Committee on March 19 in support of the legislation. In particular, the latest bill would not encourage communities to use private financing to supplement WIFIA loans; would not require the use of “green infrastructure” in WIFIA-funded projects; and would not cap the total number of WIFIA projects that EPA and the Army Corps could fund.
Despite the many positives in the bill, AMWA does have some outstanding concerns with some parts of the proposal. These include a provision that requires all WIFIA-funded projects to comply with Davis-Bacon prevailing wage rules, and a limit that prevents WIFIA loans from financing more than 49 percent of a project’s total cost. The association will attempt to address these issues in future discussions with congressional staff.
Looking ahead, EPW Committee Chairman Barbara Boxer has said that S. 601 could go to the Senate floor for a vote as early as mid-April.