The Bond Buyer
Copyright (c) 2002 Thomson Financial, Inc. All Rights Reserved.
Monday, January 7, 2002
Vol. 339, No. 31298
GOP Senators Readying Water SRF Legislation
By Humberto Sanchez
WASHINGTON -- Top Republicans on the Senate Environment
and Public Works Committee are expected to introduce legislation,
perhaps as early as this month, to reauthorize the drinking water and
wastewater state revolving loan fund programs, sources said Friday.
Their plans became clear after a survey conducted by the
Office was released late Thursday showing that federal and state sources
provided about $69 billion to build and maintain drinking water and
infrastructure between fiscal 1991 and 2000.
The survey, which was designed to identify what funds are available for
water infrastructure and where they come from, was requested about a
by Sen. Robert C. Smith, R-N.H., the ranking minority member on the full
committee, and Sen. Michael D. Crapo, R-Idaho, the ranking member of the
committee's fisheries, wildlife and water subcommittee.
The survey is expected to provide Smith and other legislators with
background information that will assist them in developing the SRF
legislation. The bill, sources said, would address just the drinking
wastewater SRFs and not any regulatory matters in the Safe Drinking
and the Clean Water Act, which are controversial and could threaten
of the SRF measure.
The legislation is expected to reauthorize the SRFs for five years and
increase their funding levels, but the exact amounts are still being
discussed, the sources said.
Despite Smith and Crapo's interest in reauthorizing the SRFs, committee
chairman James M. Jeffords, I-Vt., has not indicated if he will support
plan or introduce a bill of his own.
The SRF programs, which are initially funded each fiscal year with
from the Environmental Protection Agency, provide low-interest loans to
governments and operators of sewer and water facilities. The programs
become a major source of water infrastructure financing and are often
leveraged with bonds. States also issue bonds, in some cases, to provide
required matching funds -- equal to 20% of the federal contribution. The
authorization for the wastewater SRF program expired at the end of
1994, although Congress has continued to appropriate funds every year
The drinking water SRF is authorized through fiscal 2003, which ends
In fiscal 2002, which started Oct. 1, the federal government provided
billion for the wastewater SRF and $800 million for the drinking water
About half of the 50 states that have SRFs have leveraged their federal
capital grant and matching funds to borrow in the public bond market for
purposes of increasing the pool of available funds for project lending.
$9 billion has been added to the loan pool through leveraging, according
the Council of Infrastructure Financing Authorities, which represents
and local officials that operate SRFs.
The survey, to which 46 states responded, stated that from the fiscal
1991 through 2000, nine federal agencies provided about $44 billion in a
variety of forms for drinking water and wastewater capital improvements.
agencies -- the EPA and the Departments of Agriculture, Housing and
Development, and Commerce -- accounted for approximately 98% of the
Over the 10-year period, the EPA provided more than $20 billion in
states to capitalize their revolving loan funds and $4.5 billion in
water and wastewater projects specifically designated in the
State governments also provided a total of about $25 billion in state
available for water infrastructure programs over the past 10 years.
Specifically, the states reported that they collectively contributed
$10.1 billion to match the EPA's capitalization grants for the drinking
and wastewater SRFs. This amount consisted of about $3.3 billion from
appropriations or other state sources, and about $6.8 billion that the
leveraged -- that is, raised through the sale of state-issued bonds
While estimates vary, the amount needed for future capital investments
drinking water and wastewater infrastructure appears daunting.
"According to the EPA's most recent survey of drinking water systems,
conducted in 1999, the needs are $150.9 billion over 20 years," the GAO
said. The Water Infrastructure Network, a consortium of industry,
and nonprofit associations, recently estimated needs of up to $1
the next 20 years for drinking water and wastewater systems combined,
both the capital investment needs and the cost of financing are
"The actual future needs will likely be met by some combination of
state, and federal funding sources," the GAO concluded.