The “Water Infrastructure Finance and Innovation Act” (WIFIA) became law on June 10 when President Obama put his signature on H.R. 3080, the “Water Resources Reform and Development Act” (WRRDA). But the timing of the enactment – as congressional appropriators were already well underway in drafting their FY15 spending bills – could pose an obstacle to obtaining funding for the program next year.
The WIFIA pilot program attached to H.R. 3080 will allow EPA and the Army Corps of Engineers to each offer new low-interest loans for major water infrastructure projects expected to cost at least $20 million (or $5 million if the project serves a community of 25,000 people or fewer). The legislation authorizes EPA and the Corps to each spend up to $175 million over five years on qualifying loans – with each agency authorized $20 million in FY15. If fully funded, projections indicate each agency could leverage these funds into roughly $200 million worth of loans in the first year alone.
While FY15 appropriations legislation for EPA has yet to be released, the House Appropriations Committee approved a spending bill on June 18 that funds the Army Corps next year without including any money for its WIFIA pilot. According to the committee report accompanying the bill, House appropriators have “not had sufficient time” to evaluate WIFIA since it became law barely a week earlier. Lawmakers did, however, instruct the Corps to submit monthly updates on the development of its WIFIA guidance, “a detailed plan for how the WIFIA provisions, if funded, would be implemented,” information on project prioritization and selection criteria, anticipated administrative costs, and “measures necessary to ensure appropriate protections of federal tax dollars.” Presumably, the committee could direct funding to WIFIA in future fiscal years after the Army Corps has satisfactorily established program guidelines.
While these documentation requirements apply only to the Army Corps, it is plausible that the eventual FY15 EPA spending bill will instruct the agency to issue similar reports before receiving its share of funding for WIFIA. If this proves to be the case, it would prevent the new pilot program from receiving any appropriations before the 2016 fiscal year, at the earliest.
Nevertheless, AMWA and other WIFIA supporters have asked appropriators to fully fund EPA’s WIFIA pilot next year. The organizations are also reaching out to lawmakers to seek fixes for several problematic provisions in the authorizing legislation that limit WIFIA funding to no more than 49 percent of a project’s total cost while prohibiting the use of tax-exempt financing on any project that receives a WIFIA loan. The tax-exempt financing prohibition was added to the bill for budgetary – not policy – reasons, so AMWA is asking Congress to remove it to allow WIFIA to work as intended once the program receives funding.