New Act Clarifies Water Infrastructure Loan Accounting: What It Means for Local Project Budgets

The Restoring WIFIA Eligibility Act of 2025 is a highly technical piece of legislation focused squarely on how the federal government keeps its books, specifically concerning water infrastructure projects. Don’t let the dry title fool you; while this change won’t instantly lower your water bill, it’s an important tweak that could make it easier for local water authorities to secure financing for crucial upgrades.

The Budgetary Scorecard: Shifting the Ledger

This bill deals with the Water Infrastructure Finance and Innovation Act (WIFIA) program, which offers low-cost, long-term loans for big water projects—think new pipelines, treatment plants, or flood control systems. The core of this Act, in Section 2, is a change in how the Office of Management and Budget (OMB) “scores” these loans.

Currently, when the government gives out money, it has to decide if it’s a grant (spending) or a loan (which is expected to be repaid). This bill clarifies that if a non-Federal entity—like your city’s water department—gets a WIFIA loan, and the money used to pay it back comes entirely from non-Federal sources (like local water fees, taxes, or municipal bonds), then that assistance must be treated as a direct loan or loan guarantee under the Federal Credit Reform Act of 1990.

Why Accounting Rules Matter on Main Street

This is a bureaucratic fix, but it has real-world implications. When federal loans are scored as standard spending, they eat up budget authority, making it harder to fund other projects. By ensuring WIFIA loans repaid solely by local revenue are correctly scored as loans/guarantees—which are treated differently under federal budget rules—it accurately reflects the fact that local users, not federal taxpayers, are ultimately covering the cost.

For the average person, this makes the WIFIA program more sustainable and potentially increases its capacity. When the federal government’s accounting accurately reflects the local nature of the repayment, it helps keep the program running smoothly and potentially allows more cities and towns to access the financing they need to fix aging infrastructure. If your town is trying to replace 50-year-old lead pipes, clarifying the budget rules for their WIFIA application is a good thing, even if it’s not flashy. It’s the policy equivalent of making sure the financial software is running the correct algorithm so the local utility can focus on the actual work.