Wait, Congress Passed a Bi-Partisan Water Infrastructure Bill?

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Congress actually passed a piece of bi-partisan legislation! The Water Resources Reform and Development Act of 2014 (Act) overwhelmingly pushed through Congress recently and authorized more than $12.3 Billion for ports, waterways and water infrastructure projects. Check out this short whiteboard video explaining the Act (pre-passage), which is narrated by the Act’s author, Rep. Bill Shuster (R-PA). The House passed the conference committee report on May 20, 2014, and the Senate passed the conference committee report on May 22, 2014. The Act will become law upon the President’s signature, which is expected. A summary of each section of the Act can be found here.

Buried deep within the Act is the Water Infrastructure Finance and Innovation Act of 2014 (WIFIA). WIFIA establishes a 5-year pilot program to fund infrastructure development in the United States. The program will be administered through the Secretary of the Army (Army) and the Administrator of the United States Environmental Protection Agency (EPA), depending on the type of water infrastructure project seeking funding.

While WIFIA stops short of what many in the water industry had hoped for, it still represents a pot of money that can be leveraged and plowed into sorely needed water infrastructure projects. The American Water Works Association and other entities lobbied for the creation of a new agency to fund infrastructure projects similarly to how the Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA), which was re-authorized in 2005, successfully funds transportation projects.

For eligible projects undertaken by eligible entities, WIFIA authorizes $20 Million in the 2015 fiscal year and ramps the authorization up each year until the 2019 fiscal year in which $50 Million is authorized. Of course, a separate appropriation is required for the authorized spending amounts.

Entities eligible for funding include private and public interests, including tribal entities. However, if private interests apply, public sponsorship is required. This inclusion of private interests as eligible entities is expected to encourage the use of P3 (public-private partnership) agreements for water infrastructure projects, similar to the fashion in which TIFIA stimulated P3 agreements for transportation infrastructure.

Eligible projects cover a wide variety of infrastructure needs. Flood control or hurricane and storm damage reduction projects lie in the purview of the Army. The EPA oversees projects encompassing improvements that: (1) are covered by the Federal Water Pollution Control Act or Safe Drinking Water Act; (2) enhance energy efficiency for public water systems or publicly owned treatment works; (3) repair, replace or rehabilitate certain water infrastructure facilities; and (4) involve desalination, aquifer recharge or water recycling. Either the Army or the EPA can oversee projects that involve real estate acquisition for projects that are otherwise eligible and for mixed projects submitted under one umbrella application.

WIFIA identifies several criteria for project eligibility. Applicants must establish creditworthiness, which includes preliminary and final ratings opinion letters, among other requirements. Also, project costs must be reasonably anticipated to be $20 Million or greater. An exception exists for rural water infrastructure projects, which must meet a $5 Million cost threshold. Other eligibility criteria, such as dedicated revenue sources for repayment and an operation and maintenance plan, also must be satisfied.

Eligible costs include development-phase activities, construction, reconstruction, rehabilitation, and replacement activities, acquisition of property or property rights, certain capitalized interest, reasonably required reserve funds, issuance expenses, and other construction carrying costs.

Given the state of the country’s infrastructure, here’s to hoping that the WIFIA pilot program replicates the success of TIFIA and creates a source of funding that eligible entities use to repair or replace our dilapidated water infrastructure. Are you aware of any projects that could benefit from WIFIA? Do you have any opinions on how WIFIA might play out? Please join the discussion by leaving a comment and letting the water community know your views.

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