The Water Infrastructure Finance and Innovation Act was signed into law as part of the Water Resources and Reform Development Act. Designed after the popular Transportation Infrastructure Financing Innovation Act (TIFIA), WIFIA will provide low-interest loans for water infrastructure projects. The program is aimed at larger projects that cost at least $20 million. A variety of different projects are eligible to receive loans, including construction of water treatment and waste-water reuse and control infrastructure.
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Private Activity Bonds are a financing mechanism utilized by communities and municipalities to finance the building of all sorts of public facilities, from schools to bridges, airports to waste management facilities. The Internal Revenue Service allows states to utilize PABs for projects, but caps the total dollars the state is permitted to bond based on population. The more politically advantageous projects, like police stations and roads, receive the lion's share of PABs, whereas water and wastewater systems receive less than three-percent of PAB dollars.
To reverse the under-utilization of PABs for water and wastewater projects, the Clean Water Council has supported proposals to remove the IRS volume cap for water and wastewater projects. This will allow states and municipalities to finance water and wastewater projects through PAB without counting the projects' cost against the IRS cap. Airports and solid waste facilities are already exempt from the PAB volume cap, and their infrastructure has improved as a result. PABs provide a low-cost, low-risk financing option for states and communities.