After seven years of effort, Congress passed H.R. 3080, the Water Resources Reform and Development Act. President Obama is poised to add his signature. This is a vitally important piece of legislation for BB&K clients and creates the largest financing program for water projects in decades. This information is just the beginning of BB&K’s efforts to ensure that our clients take full advantage of this new program.
H.R. 3080 authorizes the U.S. Army Corps of Engineers navigation and flood control projects, and creates a five-year, $350 million Water Infrastructure Finance and Innovation Authority. While WIFIA is but a part of the larger WRRDA, and since it is new and provides new sources of water infrastructure funding, BB&K is sharing this report to give our clients a head start on funding WIFIA projects and to alert you to BB&K’s planned education program.
Background
WIFIA will be jointly administered by the Army Corps and the Environmental Protection Agency. It will provide long-term, low-interest loans and loan guarantees for large water and wastewater infrastructure projects and activities costing $20 million or more ($5 million for utilities serving 25,000 people or less). If there is a disappointment, it is that WIFIA loans can only be used to fund 49 percent of total project cost. In addition, the Conference Report would prohibit a loan recipient from using tax-exempt municipal bonds to cover the non-federal share of the project. These two limitations could prove to be substantial obstacles to municipal entities with their reliance on tax-exempt bonds to finance major capital projects.
Eligible Projects
WIFIA loans would be available for planning, design, environmental review, permitting, engineering, property acquisition, environmental mitigation and construction of numerous projects including:
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Drinking water
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Flood control
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Wastewater
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Water and wastewater utility energy efficiency
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Water desalination
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Aquatic ecosystem restoration
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Inland and intracoastal navigation
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Coastal navigation and harbor
Criteria
WIFIA recipients would be required to secure a dedicated source of revenue for the repayment of a WIFIA loan. Selection criteria outlined in the Bill include:
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National or regional significance
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Additional public or private financing
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Role WIFIA plays to expedite a project
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Project innovation
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Flood control and environmental protection
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Energy exploration, development or production
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Challenges faced by the region a project serves
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Extent to which a project addresses municipal or regional priorities
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Project readiness
Public-Private Pilot Projects
In addition, six public-private pilot projects were authorized to encourage use of private sector funding. BB&K believes that this practice will be continued beyond the original six projects, and provides a good opportunity for our clients to get in front of the curve.
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