Water infrastructure projects costing at least $100 million and having “national or regional significance” would be eligible to apply for loan funding from a new American Infrastructure Financing Authority (AIFA), under legislation announced this month by Sen. John Kerry (D-Mass.).
According to a summary provided by Sen. Kerry’s office, the “Building and Upgrading Infrastructure for Long-Term Development (BUILD) Act” will establish a government-owned AIFA led by an independent board of directors and charged with accepting and reviewing loan requests to fund large water, transportation, or energy infrastructure projects. Public water systems, communities, states, corporations, and public-private partnerships would all be eligible to apply for funds, which supporters say would draw private capital to infrastructure projects.
In order to win funding through the bank, projects would have to be at least $100 million in size and have “national or regional significance” as determined by AIFA, though projects in rural areas would only need to cost at least $25 million. Recipients would have up to thirty-five years to pay back the loans at low interest rates. The federal government would provide $10 billion in start-up funds to the bank, but it is designed to become self-sufficient after several years. The bill has not been formally introduced, and its complete text has not yet been made available.
President Obama also proposed the creation of an infrastructure bank in his FY12 budget request, but his would only offer funding for transportation projects. Similarly, Rep. Rosa DeLauro (D-Conn.) reintroduced her own infrastructure bank bill earlier this year (H.R. 402), which would allow a broader range of environmental and telecommunications projects to also compete for funding. A summary of Sen. Kerry’s proposal is available on hiswebsite. The bill is also backed by Sens. Kay Bailey Hutchinson (R-Tex.) and Mark Warner (D-Va.).
AMWA has generally been supportive of measures to increase funding opportunities for large infrastructure projects, and will study the bill when it is released to determine its utility for urban water systems. One possible obstacle could be the $100 million minimum project size, as it would leave out many water projects costing below that threshold but which are too large to receive meaningful funding through the Drinking Water State Revolving Fund. AMWA is also continuing to assist AWWA and other organizations in an effort to formulate legislation that would establish a stand-alone water infrastructure bank.