WWEMA Window: Where Is An Infrastructure Package Heading?

As Congress faces another Continuing Resolution (CR) deadline of February 8, members are scrambling to resolve several potentially contentious issues that have eluded resolution through the last three CRs.  Those issues include addressing the status of persons affected by the Deferred Action for Childhood Arrivals (DACA) immigration policy that expires March 5 and funding of the U.S.-Mexican border wall, among others. The current CR did manage to include a six-year authorization for the Children’s Health Insurance Program (CHIP), which had not been funded since October, and delayed several health care taxes stemming from the Affordable Care Act. While Congress wrestles with and tries to resolve these issues over the next two weeks, the next question will be if they can come to agreement on the debt ceiling and military vs domestic spending levels that will allow the 12 Fiscal Year (FY) 2018 funding bills to be passed to fund the Government through September 30 or whether yet another CR will be put in place.

While this drama is being played out, those who have been awaiting more formal direction from the Administration regarding its Infrastructure Funding package were rewarded earlier this week with a “leaked” copy of a “Funding Principles” document purportedly consolidated from a longer 70-page document being prepared by the Administration. While it is generally accepted that this is a White House document, one must step back and review it in a broader context as clearly it was not yet meant for prime time. So what can we glean from this latest document? First, there is a decidedly business-oriented theme that pervades the six-page document. It leads with narrative under the heading of Infrastructure Incentives Initiative that encourages state, local, and private investment in core infrastructure by providing incentives in the form of grants to be conditioned on achieving milestones within an identified timeframe. These funds, which would be made available to states, local governments, public utilities, and non-profits, among others, might represent up to 50 percent of federal funds and be applied for on a six-month basis based on specific criteria.

Transformation Project Program is another category that would make federal funding and technical assistance available for innovative and transformative projects that might otherwise be unable to secure private sector funding due to the uniqueness of the project. The Department of Commerce is proposed to chair the administration of this program with funding again being available through the eligible entities listed above.  Another area of focus is a Rural Infrastructure Program designed to encourage investment to enable rural economies, facilitate freight movement, and improve access to reliable and affordable transportation, etc. Eighty percent of funding would be provided to states based on a ratio of total rural lane miles compared to all states and 20 percent would be reserved for rural performance grants. It is proposed that funds be distributed through block grants for projects in rural areas with a population of less than 50,000.  The document also supports removal of state volume caps on private activity bonds (PABs) and allows for broader categories of public-purpose infrastructure to take advantage of PABs.

The document lays out some Principles for Infrastructure Improvements covering transportation, water infrastructure, veterans’ affairs, and land revitalization (brownfields and Superfund). Under water infrastructure, it proposes to extend the Clean Water State Revolving Loan Fund to cover privately-owned public purpose treatment works; expand EPA’s Water Infrastructure Finance and Innovation Act (WIFIA) program to include flood mitigation, navigation, and water supply; eliminate the requirement that WIFIA borrowers be community water systems; reduce rating agency opinions from two to one for all borrowers; increase base funding for EPA to implement the WIFIA program; and allow WIFIA funding to be used for water system acquisitions and restructurings.   

So what’s next? There is general agreement that the White House will likely not be developing specific legislative language but will provide its general concepts to Congress as they move forward on an infrastructure package. With timing tight right now to resolve federal funding issues, it is likely that infrastructure discussions will not take center stage until early spring. Two key upcoming events may shed some additional light on the timing. The first is the State of the Union address on January 30 and the other is the proposed release of the FY19 budget from the White House on February 12. Both will provide an opportunity for the president to weigh in on infrastructure issues and further expand on direction and priorities.

We certainly did not have any “dull moments” in 2017, and 2018 is shaping up to be more of the same!

Vanessa M. Leiby is the Executive Director of the Water and Wastewater Equipment Manufacturers Association (WWEMA), which is the “Voice of Water and Technology Providers” in the water sector. Formed in 1908, WWEMA’s mission is to promote the advancement of technology solutions for clean water that ensures a future sustainable environment and to improve its members’ economic viability. More information about WWEMA can be found at www.wwema.org