House and Senate Conference Committee’s WRRDA Bill Includes WIFIA

After six months of conference committee discussions, the U.S. House and Senate conferees have reached an agreement on the Water Resources Reform and Development Act (WRRDA). The $8.2 billion WRRDA bill could be voted on by the full Senate and House as early as the week of May 19, 2014. If approved by both chambers and signed into law by President Obama, it will be the first water resources bill passed since 2007.

WRRDA includes the creation of a Water Infrastructure Finance Innovations Authority (WIFIA). WIFIA would make low-interest federal loans available for drinking water, wastewater, and stormwater projects. It would help public utilities of all sizes by providing a supplemental funding mechanism to the State Revolving Fund (SRF) programs for the completion of projects with costs greater than $20 million. This would reduce the financial demand by large projects and allow the existing SRF programs to fund an increased number of the smaller projects throughout the country. In order to provide increased flexibility to predominantly rural states, SRF programs experiencing a greater demand for loan funds would also have the ability to access WIFIA financing by aggregating the costs of multiple smaller projects to reach a combined loan amount of $20 million or more. WIFIA would in turn borrow U.S. Treasury funds to provide low-interest loans, loan guarantees, or other credit support to local communities.

The Senate approved WIFIA as part of the Water Resources Development Act in May 2013, but the House passed its own version of WRRDA in the fall without including WIFIA. Some of the credit for WIFIA’s reappearance in the amended WRRDA bill may be due to the effort of more than 130 water utility leaders who traveled to Capitol Hill in April to advocate for the creation of a WIFIA. The effort was part of the American Water Works Association’s (AWWA) annual “Water Matters! Fly In” event. Fly In attendees also lobbied for robust funding for existing drinking water and wastewater state revolving loan fund programs, protecting the tax-exempt status of municipal bonds, and removing water infrastructure projects from state volume caps on private activity bonds.

The AWWA’s recently released 2014 State of the Water Industry Report, shows that water and wastewater infrastructure is the top concern for water professionals throughout North America. A 2012 study conducted by AWWA showed the costs of repairing and expanding drinking water infrastructure will add up to more than $1 trillion over the next 25 years.