"Water Infrastructure Financing: WIFIA and the Clean Water State Revolving Fund"

House Public Works and Transportation Subcommittee on Water Resources

2025-03-11

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Source: Congress.gov

Summary

This hearing focused on the critical role of the Clean Water State Revolving Fund (CWSRF) and the Water Infrastructure Finance and Innovation Act (WIFIA) programs in financing water infrastructure projects across the United States [ 00:20:58-00:21:15 ] . Witnesses provided insights into the successes, challenges, and necessary improvements for these programs to ensure safe, healthy, and secure communities [ 00:21:28 ] [ 00:26:12-00:26:12 ]

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. Discussions highlighted the immense financial needs for water infrastructure and the impact on various communities, from large urban centers to small, rural, and tribal areas [ 00:24:07-00:24:14 ] .

Themes

Importance and Scope of Water Infrastructure

Reliable water infrastructure is essential for public health, economic vitality, and environmental protection across the nation [ 00:21:28 ] . This infrastructure encompasses wastewater treatment plants, navigational channels, levees, and dams, all of which are crucial for daily life and commerce [ 00:23:37-00:23:41 ] . The utility construction industry underscores that without this infrastructure, civilization as we know it would not exist . Investments in water infrastructure also create jobs, with estimates suggesting over 28,000 jobs for every billion dollars invested .

Effectiveness and Challenges of Financing Programs

The Clean Water SRF program has successfully provided $172 billion through nearly 50,000 low-interest loans over 40 years, effectively functioning as a state-federal partnership [ 00:24:54-00:25:06 ] . These loans create a perpetually revolving fund, with states customizing programs to meet unique local needs and saving communities over 50% in financing costs . The WIFIA program has also demonstrated success through innovations like combining projects, master agreements for long-term capital programs, and the flexibility to renegotiate interest rates, saving loan holders an estimated $1.5 billion .

However, significant challenges persist, including severe funding shortfalls . Annual SRF funding is only $2-$5 billion, far from the estimated $1 trillion needed over the next 25 years . There is concern over proposals to cut water infrastructure investments by as much as 65%, which would jeopardize projects and increase costs for families . Bureaucratic "red tape" and congressional mandates are also identified as major obstacles, increasing project costs and complexity, particularly for small and rural communities [ 00:55:52 ]

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. Tribal communities, in particular, face unnecessary barriers and overly complex, fragmented federal funding systems .

Recommendations for Improvement

Several recommendations were put forth to enhance the effectiveness and efficiency of these programs. These include providing stable and increased federal investment, reducing burdensome mandates and regulatory requirements, and increasing flexibility for states to tailor programs to local needs . Expanding technical assistance, especially at the state level, was highlighted as crucial for helping small and disadvantaged communities navigate complex application processes [ 01:58:19-01:58:34 ]

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. For tribal communities, direct funding, grants, or expanded forgivable loan programs were emphasized as vital to addressing infrastructure needs . Other suggestions included reforming earmarks to ensure funds are directed to core mission priorities, implementing bonding requirements for all projects, allowing investor-owned wastewater utilities access to SRF loans, and promoting regionalization to improve service efficiency . Additionally, lifting caps on private activity bonds was proposed to attract more private capital to water infrastructure projects [ 01:14:21-01:14:24 ]

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.

Tone of the Meeting

The meeting maintained a formal and informative tone for much of the discussion, with witnesses presenting detailed insights into the nuances of water infrastructure financing [ 00:20:58-00:21:11 ] [ 00:52:39-00:52:42 ]

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. However, the tone became markedly concerned and, at times, frustrated and confrontational when discussing proposed budget cuts, bureaucratic hurdles, and the national debt [ 01:51:31-01:51:31 ]

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. Members expressed strong opinions regarding the urgency of addressing water infrastructure needs versus fiscal responsibility and the impact of federal policy on local communities .

Participants

Transcript

M
Mr. Mike Matichich
The Subcommittee on Water Resources and Environment will come to order.  I ask unanimous consent that the Chairman be authorized to declare a recess at any time during today's hearing.  Without objection, so ordered.  I also ask unanimous consent that members not on the Subcommittee be permitted to sit with the Subcommittee at today's hearing and ask questions.  Without objection, so ordered.   As a reminder, if members wish to insert a document into the record, please also email it to documentsti at mail.house.gov.  I'll now recognize myself for the purpose of an opening statement for five minutes.  I want to first thank the witnesses for joining us today for our hearing on water infrastructure financing through the Clean Water State Revolving Fund and the Water Infrastructure Finance and Innovation Act.  Or thank God, WIFA.   Programs at the EPA and the Army Corps of Engineers.  Reliable water infrastructure is critical to safe, healthy, and secure communities.
Under the jurisdiction of this subcommittee and through these programs, water infrastructure can mean many different things.   such as wastewater treatment plants, which protect the public health and water quality, ports and navigational channels that enable the movement of goods nationwide, and levees and dams that safeguard communities from flooding, among others.  This infrastructure may not be flashy, but the communities across Georgia and throughout the United States rely on it every single day.  And building and maintaining it is neither a small or cheap undertaking.   For example, some estimates have shown that hundreds of billions of dollars will be required to repair and replace clean water and wastewater infrastructure over the next 20 years.  Those costs only swell when we account for other water infrastructure needs.  The Clean Water SFR,   and the WIFIA programs provide financing, primarily in the form of low-interest loans for a wide range of wastewater and wastewater projects.  It is our responsibility to ensure that these programs are providing communities assistance to address their water infrastructure needs, while also ensuring that the programs are managed in a financially responsible way   so they can keep providing this assistance in the future.  The Clean Water SRF has provided $172 billion through almost 50,000 low-interest loans to communities mainly for wastewater infrastructure facilities and upgrades.  For nearly 40 years, this program has functioned as a successful partnership between the federal government and states where the states select projects to receive Clean Water SRF financing.   On the other hand, the EPA and the WIFIA program and the Core Water Infrastructure Financing Program, also referred to as CWIFP, were authorized in 2014 and are administered on the federal level.
While the EPA SWFE program has closed 140 loans, CWIFP has not yet issued its first loan.   CWIFP has struggled to get off the ground due to the variety of limitations placed on the program by our appropriations colleagues as well as the Office of Management and Budget.  As with all federal programs, there's always room for improvement to increase effectiveness and efficiency and to ultimately spend our taxpayer dollars more responsibly.  Also want to note that for the Clean Water SRF and the WIFA   programs to reach their full potential in assisting communities, we must also cut burdensome red tape and provide regulatory flexibility to the projects so that they get done faster.  These are initiatives that I want to continue to work on this Congress and in partnership with the Trump administration because a reasonably less restrictive regulatory environment will benefit all projects and programs as well as our economy.   I'm looking forward to our hearing from our witnesses today, which will provide real life perspectives on these water infrastructure financing programs, both the challenges and the successes.  I now recognize the ranking member, Wilson, for five minutes for her opening statement.
Thank you so much, Chair Collins, for holding today's hearing on the critical issue   of affordable investments in water infrastructure.  This is my first time here as ranking member, and I'd like to take this opportunity to add my congratulations to your selection to lead this very important subcommittee.  And I look forward to working with you as ranking member and working towards meeting the water needs of our nation, our communities, and the hardworking families   that we represent.  I'm privileged to represent Florida's 24th congressional district in South Florida.   a district known for its stunning beaches, crystal clear water, and vibrant outdoor lifestyle.  Like much of Florida, our local economy is intertwined with the quality of our environment.  Florida is a peninsula surrounded almost by water from head to toe.  Clean water is the foundation of our region's environment.   quality of life, and the approximately 1.2 million Florida jobs that depend on Florida's tourism.  Our very existence depends on clean water for everyday consumption, commerce, recreation, and the economic vitality of the region.  Not to mention that my community is ground zero for the climate crisis.   that our world faces.  That is why I'm deeply concerned about the chaos that Republicans are creating with our clean water future.  At the last committee hearing, witnesses from across the United States highlighted how the uncertainty caused by Republican funding freezes in water
infrastructure financing is jeopardizing water projects across the nation.  This situation is leading to project delays, escalating costs, and even the potential abandonment of crucial local water infrastructure projects.

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