A pair of bills introduced in the House and Senate on January 30 would create a new component of EPA’s Water Infrastructure Finance and Innovation Act (WIFIA) program devoted to leveraging funding to increase dollars available to states through the Drinking Water and Clean Water State Revolving Funds (SRFs). But AMWA and several other water sector associations have expressed concerns that the proposal could undercut WIFIA’s focus on providing low-cost financing for large-scale water and wastewater projects.
Introduced in the Senate by Sen. John Boozman (R-Ark.) and in the House by Rep. John Katko (R-N.Y.), the Securing Required Funding for Water Infrastructure Now (SRF WIN) Act (H.R. 4902/S. 2364) would authorize EPA to spend up to $1 billion over five years on a new class of WIFIA loans that would be available exclusively to states to pay for projects listed on their SRF intended use plans. But the bill also guarantees states applying for these SRF WIN dollars more favorable loan terms than are available to communities seeking funding through the original WIFIA program. For example, the interest rates on WIFIA loans may not fall below the Treasury rate, the loans may cover a maximum of 49 percent of the project’s total cost, and applicants are responsible for application and credit processing fees of several hundred thousand dollars. In contrast, interest rates on SRF WIN loans could be as low as half of the Treasury rate, may cover 100 percent of a project’s cost, and application and credit processing fees would not apply. EPA would also be required to complete “expedited reviews” of SRF WIN applications within 180 days, and would select funding recipients solely based on “need,” rather than the detailed statutory selection criteria that apply to traditional WIFIA applications.
AMWA and other water sector groups became aware of a draft version of the SRF WIN Act last year, and in December wrote to Sen. Boozman to express several concerns about how the bill, if enacted, could jeopardize the future of the WIFIA program. The groups subsequently met with Sen. Boozman and his staff to discuss the bill, and as a result the final version of the legislation does not include a provision from an earlier draft that would have sunset the WIFIA program at the end of the 2022 fiscal year. With the sunset in place, Congress would have had to affirmatively act to continue WIFIA beyond that date, introducing what AMWA called “an unnecessary threat” to the future of the program.
In a statement on the bill, Boozman said the measure “is an innovative approach to helping communities of all sizes, in every state secure loans so they can improve their crumbling infrastructure.”
However, AMWA still has concerns about the SRF WIN legislation. In addition to the more favorable loan terms and possible diversion of EPA staff resources away from WIFIA, the bill could conceivably set the stage for the new SRF WIN program to replace WIFIA when the original program’s authorization expires after the 2019 fiscal year. Especially if WIFIA’s authorization is not extended beyond that date, future lawmakers could choose to send limited available funding in EPA’s budget toward states via the SRF WIN program rather than to individual large-scale projects via WIFIA. This outcome would once again leave major water and wastewater infrastructure projects without a source of low-cost, federally backed financing.
AMWA has endorsed another piece of legislation that would extend WIFIA through 2024, but at this point it is uncertain whether this bill, or the new SRF WIN legislation, may gain momentum on Capitol Hill.