President Obama Signs Legislation that Removes WIFIA Ban on Tax-Exempt Bonds

Water and wastewater utilities, and their advocates are celebrating a huge step forward for the Water Infrastructure Finance and Innovation Act (WIFIA) after President Barack Obama signed legislation that lifts a ban on the use of tax-exempt bonds with WIFIA loans. Now the American Water Works Association (AWWA) is urging Congress to appropriate funds to allow WIFIA to begin addressing America’s large water infrastructure challenge. “By removing the ban on using tax-exempt bonds with WIFIA loans, Congress has freed WIFIA to do its important work in addressing America’s enormous water infrastructure challenge,” said AWWA CEO David LaFrance. “We now urge Congress to move swiftly to appropriate the necessary funds for WIFIA to do its important work.”

Enacted in 2014 as part of the Water Resources and Reform Development Act (WRRDA), WIFIA will provide low-interest federal loans for up to 49 percent of the costs for large drinking water, wastewater, stormwater and water reuse projects. However, as written, the law prohibited tax-exempt bonds from funding the remaining 51 percent of a project, taking away the most cost-effective tool for communities that seek WIFIA loans.

Members of AWWA, the National Association of Clean Water Agencies, the Association of Metropolitan Water Agencies, Water Environment Federation (WEF), and other water industry advocates are now urging Congress to provide funding for both WIFIA loans and State Revolving Fund programs in fiscal year 2016, which began Oct. 1. “The sooner WIFIA is making loans for large water projects, the better,” LaFrance said. “AWWA’s recent Buried No Longer report shows America needs to invest more than $1 trillion over the next 25 years to repair and expand drinking water infrastructure alone. Deferring this work only makes it more expensive. We urge Congress to put WIFIA to work now to protect public health and fix our most critical national infrastructure.”