U.S. Army Corps of Engineers Civil Works Infrastructure Financing Program (CWIFP): Status and Issues




INSIGHTi

U.S. Army Corps of Engineers Civil Works
Infrastructure Financing Program (CWIFP):
Status and Issues

January 14, 2021
In the Water Resources Reform and Development Act of 2014 (WRRDA 2014, P.L. 113-121), Congress
authorized the U.S. Army Corps of Engineers (USACE) to provide credit assistance, in the form of
secured or direct loans, for a range of water resource projects. This authority was provided in the Water
Infrastructure Finance and Innovation Act of 2014 (WIFIA 2014, Title V, Subtitle C of P.L. 113-121; 33
U.S.C. §§3901-3914, as
amended). WIFIA 2014 authorized an analogous program for the U.S.
Environmental Protection Agency (EPA) for water projects outside of USACE mission areas (see CRS In
Focus IF11193, WIFIA Program: Background and Recent Developments).
While Congress has appropriated funding since FY2017 for EPA’s WIFIA program to provide assistance
to projects, it first funded USACE’s program in the Consolidated Appropriations Act, FY2021 (P.L. 116-
260).
In Division D of that act, Congress created a WIFIA account for USACE and provided
appropriations to support credit assistance for nonfederal dam safety projects. Recently, USACE has
referred to its program as the Civil Works Infrastructure Financing Program (CWIFP).
CWIFP
WIFIA 2014 authorized USACE to provide financial assistance to a suite of water resource projects that
encompass several USACE mission areas. It authorized the USACE program (i.e., CWIFP) to support the
following project purposes:
 reduction of riverine or coastal storm flood damage;
 restoration of aquatic ecosystems;
 improvement of the inland and intracoastal waterways navigation system;
 improvement of navigation at a U.S. harbor; or
 a combination of purposes that are supported by the USACE and the EPA WIFIA
authorities (e.g., drinking water, wastewater, and/or stormwater system improvements).
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Several types of projects eligible for CWIFP have historically been authorized by Congress as federal
water resources projects. Financial responsibilities for these projects might take multiple forms. For
example, Congress has authorized USACE to construct and operate and maintain some projects, often
with a corresponding nonfederal cost-share, while others (e.g., flood control projects) might be authorized
by Congress and constructed by USACE, but turned over to local entities to operate. When insufficient
federal funding has been available for federally authorized projects, nonfederal entities have sometimes
funded the federal portion of project costs themselves. CWIFP appears to provide another financing
option for these and other types of water resources projects.
Entities eligible for CWIFP assistance include (1) a corporation; (2) a partnership; (3) a joint venture; (4)
a trust; or (5) a federal, state, local, or tribal government or instrumentality. To receive credit assistance,
projects carried out by private entities must be publicly sponsored (33 U.S.C. §3907(a)(4)).
Under the Federal Credit Reform Act of 1990 (P.L. 101-508), appropriations for federal credit programs,
such as CWIFP, primarily cover long-term credit subsidy costs (2 U.S.C. §661a). The subsidy costs of
such programs reflect potential losses to the government as a result of loan defaults. The subsidy cost is
typically presented as a percentage (i.e., a subsidy rate) and largely determines the amount of loans that
can be made available. According to the CWIFP website’s Frequently Asked Questions, USACE will
calculate the subsidy costs on a project-by-project basis (i.e., a project with lower credit risk would
consume less of the credit subsidy than a higher credit risk project).
FY2021 CWIFP Funding and Criteria
Congress appropriated $14.2 million for CWIFP for FY2021; of that, $12.2 million is specifically to
support dam safety projects for nonfederally owned dams (according to ownership information in the
National Inventory of Dams), with the remaining $2 million for USACE administrative expenses to carry
out the program. When the FY2021 appropriation was enacted, USACE had not yet published details on
how it would implement CWIFP. In providing FY2021 appropriations for CWIFP, Congress directed
USACE to assess project eligibility using a June 30, 2020, Federal Register notice by EPA―“Water
Infrastructure Finance and Innovation Act Program (WIFIA) Criteria Pursuant to the Further Consolidated
Appropriations Act, 2020” (85 Federal Register 39289-39191). EPA’s notice set out a “Federal Asset
Screening Criteria and Process”; it stated that projects authorized for construction by USACE as of June
30, 2020, are not considered WIFIA-eligible.
CWIFP Limitations
As discussed above, the volume of loans and other types of credit assistance that CWIFP can provide is
determined primarily by the appropriations amount and subsidy rate assumed for each loan, as well as any
credit assistance cap established by Congress. In P.L. 116-260, Congress capped the total amount of loans
supported by the CWIFP appropriation at $950 million. The actual amount of CWIFP loans may be lower
than $950 million, as it would be determined by various factors, including the subsidy rate for each
project receiving assistance.
Since WIFIA 2014, Congress has, through congressional reports accompanying appropriations legislation
(e.g., Joint Explanatory Statement accompanying P.L. 115-244) and in hearings (e.g., Senate
appropriations hearing on the FY2021 USACE budget request), indicated interest in USACE activities to
develop CWIFP and in being informed about its development. In P.L. 116-260, Congress directed the
Secretary of the Army to report to the appropriations committees within 30 days of enactment with an
analysis of how the program’s subsidy rates will be determined, along with a comparison to WIFIA
subsidy rates, and an “analysis of the process” for developing the program’s regulations and timetable for
their development.


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CWIFP Eligibility of Congressionally Authorized Projects
Some recent WIFIA and CWIFP developments, including Congressional Budget Office cost estimates for
WIFIA proposals involving federal projects, have been of interest. Regarding CWIFP eligibility for
congressionally authorized USACE projects, Congress directed, in explanatory text accompanying P.L.
116-260,
that the Secretary use part of the CWIFP appropriation to issue “guidance to clarify, as Congress
intended…that the financial assistance program authorized in WIFIA applies to all non-Federal projects
and any authorized project that is non-federally owned, operated and maintained.” Part of what USACE
may clarify in its reporting (and other relevant actions) for CWIFP is the eligibility of USACE
constructed works that have had their ownership transferred to nonfederal entities for operation and
maintenance, such as local flood control levees. These determinations may be an important factor for
future CWIFP appropriations and project awards.

Author Information

Anna E. Normand
Elena H. Humphreys
Analyst in Natural Resources Policy
Analyst in Environmental Policy





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