Underground Construction - February 2018 - 20

Infrastructure Funding
The bill establishes a carve-out
within WIFIA for SRF projects to
have more favorable loan terms
than they would through the
SRF program. The WIFIA uses
federal Treasury credit subsidies
to leverage state and local spending, currently, according to the
EPA based on the 12 WIFIA loan
applications it is considering, at a
ratio of 92:1.
The Association of Metropolitan Water Agencies joined the
American Water Works Association and WEF in sending a
letter to Congress in December,
stating, "We are aware of draft
legislation circulating on Capitol
Hill that would create preferential borrowing terms and exclusive, dedicated budget authority
within the Water Infrastructure
Finance and Innovation Act (WI-

FIA) program for state revolving
loan funds (SRFs). We urge you
to oppose this idea. It does not
make sense particularly from an
economic standpoint."
The three water associations
argued that creating an SRF
"preference" within WIFIA, as
the Boozman bill would do,
"would consume an enormous
amount of budget authority with
the interest rate subsidy, resulting in a dramatically lower leveraging ratio of just 6:1."
While the Boozman draft has
not germinated into a bill at this
writing, a bi-partisan House bill
extending WIFIA's authorization was introduced in 2017 and
probably has a better chance of
moving forward and passing, in
some shape, in 2018. Rep. Brian
Mast (R-Fla.) is the lead sponsor

DIVISION OF REEF INDUSTRIES, INC.

pipeline Protection

Highly Effective
underground warning tapes

800.231.6074 * terratape.com
20

FEBRUARY 2018 | UConOnline.com

of the Water Infrastructure Finance and Innovation Reauthorization Act of 2017, which
extends WIFIA until 2024 and
doubles the authorization to $90
million. The WIFIA authorization
level for fiscal 2018, which began
last Oct. 1, is $45 million. President Trump only asked for $20
million. Congress has not passed
a 2018 appropriation bill yet,
so the budget for WIFIA and all
other federal programs for 2018
are not set.
The Trump Administration is
asking for $863 million for the
Drinking Water SRF and $1.39
billion for the Clean Water SRF
in fiscal 2018. The SRFs would
get $1.6 million and $2.65 million increases, respectively, over
their 2017 budgets if the appropriations committees in Congress ratify those numbers.
Both the WIFIA and SRFs
are important underground
water programs, but sewer and
drinking water projects are also
funded by private activity bonds
used by municipalities. They will
continue to be used in 2018, despite a threat to eliminate their
tax advantaged status by the
House via a provision in its version of the tax reform legislation.
The final bill passed by Congress
maintains tax deductibility for
the interest costs of PABs, but
it repeals the ability to advance
refund municipal bonds. Under
current law, governmental bonds
and 501(c)(3) bonds are permitted after.
Emily Brock, director of Federal Liaison Center, Government Finance Officers Association, says groups like hers who
support advance refunding will
try to reinstate it as part of the
discussion on the contents of
any infrastructure package. She
notes, however, that Rep. Kevin Brady (R-Texas), influential
chairman of the House Ways
& Means Committee, stated
during debate on the tax package

that he does not believe private
activity bonds fund infrastructure projects. Brady may make
another attempt to eliminate the
interest deduction for PABs in
order to raise some of the $200
billion to fund the infrastructure
package.
Lead, copper
On the regulatory front, the EPA
plans to publish a proposed rule
forcing local public water agencies to upgrade efforts to combat
levels of lead and copper in water
lines. At hearings in the House
Energy & Commerce Committee
on Dec. 7, 2017, Scott Pruitt, the
EPA administrator, talked about
the importance of getting lead
out of water service lines and
linked President Trump's comments on the need to address
infrastructure to his own feeling
that any infrastructure package
would "address some of these
things," meaning lead service
lines. He said the costs of replacing service lines across the country has been estimated at "as
much as $30 billion, or maybe
upwards of $50 billion." He said
that he would approach Congress
next year to "announce a very
strong initiative on a war on
lead." The most ambitious goal
would be to require replacement
of the roughly 6 to 10 million
lead service lines in the country.
Changes to the Obama Administration-issued "Waters of
the U.S." rule are already underway at the EPA. Both the EPA
and the Army Corps of Engineers
manage applications for permits to dig in wetlands, with the
Obama rule expanding the types
of bodies of water requiring permits for certain operations, such
as digging for pipelines, which
has its own Nationwide Permit,
number 12. At the Energy and
Commerce hearings, Pruitt said
his agency would have a proposed rule by April. ■

http://www.terratape.com http://www.UConOnline.com

Underground Construction - February 2018

Table of Contents for the Digital Edition of Underground Construction - February 2018