New Funding Authority For Water Infrastructure Moves Forward In Senate

May 2013, Vol. 68 No. 5

A Senate committee gave a big boost to a new source of water infrastructure spending by including an amendment in the Water Resources Development Act (S. 601). That WRDA bill passed the Senate Environment and Public Works Committee on March 20 by a unanimous vote.

It included an amendment which would create a five-year pilot program to test a Water Infrastructure Finance and Innovation Authority (WIFIA), a development the American Water Works Association hailed as pivotal in confronting America’s trillion-dollar water infrastructure challenge.

The bill now goes to the Senate floor. Although no one on either side of the aisle objected to the WIFIA provision in the bill when it passed committee, it is always possible that a Senator could put a "hold" on the bill for any reason -- including an attempt to eject the WIFIA amendment. A "hold" on a bill prevents it from coming up for a vote.

The House Transportation and Infrastructure Committee is slowly gearing up for its own vote on an omnibus WRDA. Rep. Bob Gibbs (R-OH), chair of the House Subcommittee on Water Resources and Environment, floated a draft bill to create a WIFIA last year. It never even mutated into an actual bill, much less advanced through the House.

Any potential opposition to establishing a WIFIA would be generated by the need to create a new federal spending program. The Senate authorized $100 million a year ago. Many Republicans and some Democrats oppose creating new federal spending programs because of concerns about the federal deficit. In this case, WIFIA, once established via an authorization, could not be funded without a separate vote by the Appropriations Committees in both houses. Supporters of WIFIA argue that any appropriation would be repaid to the federal Treasury, making WIFIA "revenue neutral."

The fund would be authorized to get $50 million a year from both the EPA and Army Corps of Engineers. The total of $100 million would be used to offer loans or loan guarantees at Treasury rates, with 35 years to repay after substantial project completion. The minimum project size is $20 million. Water and wastewater utilities and authorities would be eligible, as would be state infrastructure finance authorities (SRFs).

Currently, this legislation would provide a loan for a maximum of 49 percent of a project's costs. Eligible projects include: pipe replacement or rehabilitation, CSO and wastewater projects and new water supply projects.