CRS Report: 'Legislative Options in the 114th Congress for Financing Water Infrastructure' (Updated: 30 December 2016)

Another exceptional water-related report from the Congressional Research Service folks: Legislative Options in the 114th Congress for Financing Water Infrastructure, by Claudia Copeland, Steven Maguire, and William J. Mallett. [Updated: 30 December 2016.]

Download CRS_Water_Infrastructure_30Dec2016

Summary

This report addresses several options considered by Congress to address the financing needs of local communities for wastewater and drinking water infrastructure projects and to decrease or close the gap between available funds and projected needs. Some of the options exist and are well established, but they are under discussion for expansion or modification. Other innovative policy options for water infrastructure have been proposed, especially to supplement or complement existing financing tools. Some are intended to provide robust, long-term revenue to support existing financing programs and mechanisms. Some are intended to encourage private participation in financing of drinking water and wastewater projects.

Six options that are reflected in recent legislative proposals, including their budgetary implications, are discussed.

•   Increase funding for the State Revolving Fund (SRF) programs in the Clean Water Act and the Safe Drinking Water Act (S. 2532/S. 2583, H.R. 4653, and H.R. 4954),

•   Create a “Water Infrastructure Finance and Innovation Act” Program, or WIFIA (P.L. 113-121 in the 113th Congress; several bills in the 114th Congress that would establish a similar program for water reclamation and reuse projects in western states are H.R. 291/S. 176, S. 1837, S. 1894, and S. 2533),

•   Create a federal water infrastructure trust fund (H.R. 4468 and S. 2848),

•   Create a national infrastructure bank (included in the Administration’s FY2017 budget request and H.R. 413, H.R. 625, H.R. 3337, H.R. 3555, S. 268, and S. 1589),

•   Lift restrictions on private activity bonds for water infrastructure projects (included in the Administration’s FY2017 budget request and H.R. 499 and S. 2606), and

•   Reinstate authority for the issuance of Build America Bonds (included in the Administration’s FY2017 budget request and H.R. 2676).

  A number of these options have been examined by congressional committees since the 112th Congress. A pilot program for one of them—WIFIA—was enacted in 2014. Nevertheless, interest in other financing options continues, in part due to long-standing concerns with the costs to repair aging and deteriorated U.S. infrastructure generally, and also in response to events in individual regions and cities, such as Flint, MI, where problems of elevated lead levels in its water distribution system have recently drawn public attention.

  Consensus exists among many stakeholders—state and local governments, equipment manufacturers and construction companies, and environmental advocates—on the need for more investment in water infrastructure. There is no consensus supporting a preferred option or policy, and many advocate a combination that will expand the financing “toolbox” for projects. Some of the options discussed in this report may be helpful, but there is no single method that will address needs fully or close the financing gap completely. For example, some may be helpful to projects in large urban or multi-jurisdictional areas, while others may be more beneficial in smaller communities. At least for the near term, communities will continue to rely on the existing SRF programs, tax-exempt governmental bonds, and tax-exempt private activity bonds to finance their water infrastructure needs.

 Very good suggestions!

Enjoy!

"The Principle of Parsimony: 'As simple as possible, but not too simple.' " - Ty Ferré

Comments

[Account Deleted]

Did I miss the part where "user pays" (or repays debt) ?

There are only three ways to fund infra: taxes, transfers or tariffs. The debt structure hardly matters compared to repayment method!