The “Water Resources Development Act (WRDA) of 2016” (S. 2848) approved by the Senate on September 15 would amend the Water Infrastructure Finance and Innovation Act (WIFIA) pilot program to allow WIFIA applicants to finance any application fee charged by EPA.
The amendment to WIFIA is part of Section 7302 of the final version of S. 2848 approved by senators. The initial version of the bill approved by the Environment and Public Works Committee in April would have allowed communities with populations of 10,000 people or fewer to roll their WIFIA application fee into the balance of their loan, to be paid off over time along with the loan principal. Over the summer AMWA reached out to several Senate offices to request that WIFIA applicants of any size be granted the same opportunity to finance program fees if desired.
This issue became more pressing in May when EPA released an Information Collection Request (ICR) on draft application materials for the WIFIA program. The ICR indicated EPA plans to charge most WIFIA applicants an up-front, nonrefundable application fee of $100,000, in addition to a separate credit-processing fee that could cost roughly $200,000 per applicant. In comments submitted to EPA in July, AMWA argued that the collection of substantial, nonrefundable fees would deter some communities from considering WIFIA as an infrastructure financing option.
The provision in the WRDA legislation appears to only apply to the $100,000 application fee; EPA would still be able to collect the separate credit-processing fee in full before a loan is disbursed. But the amendment would nevertheless provide more financial flexibility to utilities interested in pursuing a WIFIA loan. The House-approved WRDA bill (H.R. 5303) does not include the WIFIA fee provision, though it has attracted support in that chamber (see related story).
Other changes to the WIFIA program that are proposed as part of S. 2848 include making drought prevention and mitigation projects explicitly eligible for funding, and dropping WIFIA’s designation as a temporary pilot program.