The Senate voted 83-14 Wednesday to approve the Water Resources Development Act of 2013, which authorizes federal water program spending and includes a pilot program that would offer low-interest loans and loan guarantees for water infrastructure projects.
The Senate-passed bill includes the Water Infrastructure Finance and Innovation Act, or WIFIA, authorized at $250 million over five years. The WIFIA program is modeled on the Transportation, Infrastructure Finance and Innovation Act (TIFIA) program, which provides loans and loan guarantees for highway programs.
Sen. Barbara Boxer, D-Calif., the Senate Environment and Public Works Committee chairman, said the bill could help stimulate water infrastructure investment. The loans would be available to supplement bond financing and public private partnerships for a variety of water-oriented construction problems, such as flood control systems and water treatment plants.
The program would be administered through the Environmental Protection Agency and loans could be secured by private corporations, public-private partnerships, local or state governments, tribal governments, and state financing authorities.
American Water Works Association deputy executive director Tom Curtis agreed WIFIA could be an important finance tool.
“It’s modest in scope, but it’s an important concept,” Curtis said. “It’s a new tool to add to the toolbox.”
About 70% of local water infrastructure is bond-financed and that will likely continue to be the mainstay, Curtis said, but the ability to secure-long term loans at low U.S. Treasury rates could also be a big help and entice private investors to jump in.
To be eligible for WIFIA assistance under the terms of the legislation, the borrower applicant would need to supply a letter from at least one credit rating agency showing that the loan could receive an investment-grade rating. Repayment would have to come from a dedicated revenue source, and the cost of the project would have to be anticipated to be at least $20 million.
The House has not yet taken up a water bill, but House Transportation and Infrastructure Committee chairman Rep. Bill Shuster, R-Pa., has said it is a priority. Boxer told Senate colleagues on Wednesday she hopes the House takes it up soon.
“I am gratified by the overwhelming vote on final passage of our WRDA bill,” Boxer said. “Getting 83 votes in favor when bipartisanship is missing in the Senate is very important. Now is the time for the House to act so we can ensure that the benefits of the bill are realized.”