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What's New: Government Affairs

U.S. House Passes Water Infrastructure Act and Issue Heads to Conference Committee

Thursday, October 31, 2013  

The U.S. House recently passed H.R. 3080, which is its version of the Water Development and Resources Act. The House bill contains a public-private partnership (P3) pilot program that is similar to what the Senate previously passed in S. 601. Under the bill, the Secretary of the Army will identify at least 15 projects that are authorized for construction for coastal harbor improvement, channel improvement, inland navigation, flood damage reduction, or hurricane and storm damage reduction for the program. The program is designed to reduce the backlog of projects for the Army Corps of Engineers. The bill authorizes the Secretary to enter into agreements with either a private partner or non-federal government entity, with the partner providing full management control for the design, financing, and/or construction of the project. These provisions are intended to help the Army Corps of Engineers handle its backlog.

H.R. 3080 contains a provision identical to S. 601 under which all federal laws and regulations that would apply to the Secretary of the Army if the Secretary were carrying out the project would apply to a non-federal interest carrying out any of the 15 pilot projects. H.R. 3080 also prohibits the Secretary of the Army from waiving the provisions of the Davis Bacon (prevailing wage) Act or any other federal law in connection with these P3 pilot projects. SFAA believes that these two provisions will assure that bonding is required for any construction in the P3 pilot project.

The Water Act now goes to conference to resolve the differences between the House and Senate versions. Both the House and Senate versions of the Water Act avoid the earmarks that Congress used in the past to designate specific projects that the Army Corps must undertake. The Senate bill contains the criteria that the Army Corps must use in selecting projects, while the House bill contains a new process under which the Army Corps would submit its recommendations, along with those from state and local governments, for Congressional approval. The conferees will debate how much discretion should be given to the federal agencies in the absence of earmarks.

S. 601 also contains a $500 million pilot program for a new infrastructure bank for water projects, the Water Investment and Finance Innovation Authority (WIFIA), based on the existing Transportation Investment and Finance Innovation Authority (TIFIA). WIFIA is intended to use federal funding to leverage state and local funding and private investment in providing loans and loan guarantees to get projects completed. The federal government can provide better interest rates and longer repayment times than would otherwise be available to state and local construction projects being funded on a pay as you go basis from revenue streams that are uncertain. WIFIA may draw opposition in the House as a new federal government program that needs to be funded.

The differences in the spending between the two bills also needs to be resolved in conference, While the conferees have some difficult issues to resolve, at this point they have two bills with much common ground. If the conference committee can agree on a final bill, it will be the first time since 2007 that Congress passed a Water Act.

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