The U.S. Senate voted on July 30 to allow communities to finance water infrastructure projects through a combination of Water Infrastructure Finance and Innovation Act (WIFIA) loans and tax-exempt debt, responding to a major priority of AMWA and other WIFIA supporters. This change to the WIFIA law was approved as part of the DRIVE Act (H.R. 22), a comprehensive transportation policy bill that has been a priority of Senate leaders.
As passed by Congress in 2014, WIFIA generally limits loans to paying for a maximum of 49 percent of a project’s total cost, while prohibiting tax-exempt financing (such as municipal bonds) from covering the remaining 51 percent. Congress added this restriction during consideration of WIFIA to comply with congressional budget-neutrality rules, but AMWA and other organizations warned the prohibition could make the program unappealing to many water systems. The revised WIFIA language in H.R. 22 (Section 15003 of the bill) simply strikes the tax-exempt financing ban from the WIFIA statute. The $17 million cost of this fix (as estimated by the Congressional Budget Office) is offset through other portions of H.R. 22.
The WIFIA language comprised only a few lines of the 1,000-plus-page H.R. 22, and was not subject to a separate vote on the Senate floor. Senator Barbara Boxer (D-Calif.) – WIFIA’s main advocate in the Senate – secured the inclusion of the WIFIA language in the larger legislation.
While the Senate approval represents a major step forward for WIFIA, more work remains before the fix can become law. Members of the House of Representatives may attempt to pass their own version of a long-term transportation bill in the fall, and congressional negotiators would subsequently work out a final compromise bill and make the final decision on the inclusion of the WIFIA provision.
Federal transportation programs are now scheduled to expire on October 29, giving Congress less than two months to reach a deal after lawmakers return to Washington following Labor Day.