Legislation introduced in the House of Representatives last month would deliver more water infrastructure funding to drought-parched California by making it easier for communities in the state to take advantage of the new Water Infrastructure Finance and Innovation Act (WIFIA) loan program.
Sponsored by Rep. Jerry McNerney (D-Calif.), the “Drought Resilience Investment Act” (H.R. 1710) would temporarily suspend WIFIA’s ban on the use of tax-exempt bonds on projects in a state where the governor has issued a drought declaration of emergency.
According to a statement from Rep. McNerney’s office, the bill “would allow local governments and water agencies to more easily raise funds for large drinking water, wastewater and water reuse projects.”
Congress enacted WIFIA last year, but not before adding a provision that bars the use of tax-exempt debt on WIFIA-funded projects. Because WIFIA is limited to financing only up to 49 percent of a project’s total cost, this leaves communities with few attractive options for securing the remaining funds. The restriction was originally added to the WIFIA bill to make the proposal budget-neutral in the eyes of the Congressional Budget Office, but AMWA and others have warned that the muni bond ban will make it difficult for many municipalities to take advantage of WIFIA loans.
The prospects of Rep. McNerney’s bill are uncertain on Capitol Hill, but the measure could indicate growing support among lawmakers for removing the municipal bond restriction from WIFIA.