Clean Water Current

NACWA Opposes Proposed EPA Sunset to BABA SRF Waiver

Jul 13, 2023

As federal agencies including U.S. EPA continue working to implement the Build America, Buy America (BABA) Act provisions that were enacted as part of the Infrastructure Investment and Jobs Act (IIJA) in 2021, waiver proposals and guidance have continued to roll out.  

Most notably for clean water utilities, public interest waivers have been issued for the State Revolving Funds (SRFs) and Water Infrastructure Finance and Innovation Act (WIFIA) program over the past year. NACWA commented on initial drafts of those waivers and was largely pleased with the final WIFIA and SRF waivers, which waived projects from the expanded BABA requirements if utilities can demonstrate that the project’s design planning was initiated prior to May 14, 2022. That flexibility prevents utilities from being faced with redesigning projects or seeking individual waivers for projects that initiated planning before BABA took effect.  

However, this summer EPA issued a proposed decision memorandum that would reduce this BABA flexibility for projects funded through the SRFs. The change would impact projects funded through the regular SRF process as well as those awarded directly by Congress (a.k.a. earmarks). Specifically, the proposed memorandum creates an end date of September 30, 2024, for waiving projects that initiated design prior to May 14, 2022.  

Given the long planning horizons for major water infrastructure projects, many utilities may have projects that were in the design phase prior to May 2022 and for which they would like to secure SRF financing after September 2024. The proposed sunset could require these projects to go back through the design and spec processes to ensure BABA compliance, driving up overall project costs and creating delays. NACWA submitted comments urging EPA to reconsider the need for a sunset date and instead preserve the current waiver for the SRFs.  

Individual utilities that have projects which could be impacted by this change are encouraged to reach out to EPA. Contact Kristina Surfus, NACWA Managing Director of Government Affairs, with questions or to discuss further.  

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