The Senate Environment and Public Works (EPW) Committee on May 22 approved new water resources legislation after incorporating a controversial “SRF WIN Act” into the bill. The SRF WIN proposal would create a new version of EPA’s Water Infrastructure Finance and Innovation Act (WIFIA) program exclusively for use by state infrastructure financing authorities to leverage their State Revolving Fund (SRF) programs.
The version of the SRF WIN Act added to the committee-approved version of America’s Water Infrastructure Act of 2018 (S. 2800) is based on legislation of the same name introduced earlier this year by Sen. John Boozman (R-Ark.). Supporters of the bill say it would enable more small and rural communities to access WIFIA loans, but AMWA, along with the American Water Works Association and the Water Environment Federation, have opposed the bill and noted that the existing WIFIA program already offers ample opportunities for rural communities and states to compete for low-interest loans.
As approved by the EPW Committee, the SRF WIN Act would be built onto the existing WIFIA program at an authorized level of $200 million over two years. The new program would allow only state infrastructure financing authorities to apply for SRF WIN loans, which could be leveraged to pay for projects on states’ Drinking Water SRF priority lists or Clean Water SRF intended use plans. But the program would offer state applicants a number of benefits not available to individual communities that seek funding under WIFIA, such loans covering as much as the project’s full cost (compared to only 49 percent of the cost under WIFIA), a waiver of all application fees, and interest rates that could not exceed the Treasury rate at the closing of the loan (though in some cases the interest rate could be as low as half the Treasury rate).
In a May 10 letter to the EPW Committee, AMWA, AWWA and WEF called the SRF WIN Act “a fundamentally flawed proposal that … would pose a severe threat to the future viability of the WIFIA program” by reducing its overall leveraging ability. The groups also questioned why state applicants to the SRF WIN program should be entitled to preferable loan terms while continuing to have the ability to apply for funding through the original WIFIA program as well, especially given that individual utilities would not be able to apply for SRF WIN funding.
However, other water sector groups and infrastructure organizations, including the National Association of Clean Water Agencies, the National Rural Water Association, and the American Society of Civil Engineers, among others, expressed support for the SRF WIN provisions.
Despite AMWA’s concerns, the manager’s amendment added by the EPW Committee to S. 2800 on May 22 included the SRF WIN Act. The amendment also made several modifications to the measure, such as specifying that EPA may not reject outright any state’s application for SRF WIN assistance and providing that a state may not receive funding from both SRF WIN and the original WIFIA program in the same fiscal year. The bill would sunset the SRF WIN program at the end of the 2020 fiscal year, one year before WIFIA’s extended authorization would expire.
S. 2800 will now move on to the Senate floor. A House-Senate conference committee may ultimately decide whether to include the SRF WIN program in the final WRDA legislation that congressional leaders hope to complete by the end of the year. A slimmer WRDA proposal approved by the House Transportation and Infrastructure Committee on May 23 does not include any WIFIA or SRF WIN provisions, so those provisions will likely be the subject of conference negotiations after each WRDA bill passes its respective chamber.