Infrastructure Investment and Jobs Act (IIJA) Summary

The recently approved $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) includes $550 billion for new programs and $650 billion for the continuation of core programs, which have been previously authorized under the Fixing America’s Surface Transportation (FAST) Act and other authorizations. This approval represents a significant amount of new funding and programs and largely protects the priorities of the Biden administration through and beyond his initial term of office (the transportation funding incorporated in this bill extends through federal FY 2026). While the bill covers a 10-year period, much of the funding is spread over five years.

The following is a non-exhaustive list of key takeaways identified as potential interests to our clients and partners. Much of this information has been produced in detail by public agency stakeholders such as the National Association of Regional Councils (NARC) and others – this document is meant to serve as a summary companion piece to some of these more intensive resources.

“As a broad summarization: ~30%+ additional funding, more programs for both rural and urban projects, and a strong emphasis on safety, equity, and resiliency.”

Formula Funding Financial Summary

This new transportation bill, succeeding the FAST Act, increases federal-aid formula for core apportioned programs (the funds that are allocated annually to States and MPOs) by about 30% across the board, depending on the individual program. Fund allocations are inclusive of Surface Transportation Block Grant Program (STBGP) funds, most Federal Transit Administration (FTA) formula funds (5307, 5311, 5339, etc.), and Highway Safety Improvement Program (HSIP) funds. Other increases of interest include a 10% increase for Congestion Mitigation Air Quality (CMAQ), and a 71% increase for Transportation Alternatives (TA) type funding (sidewalks, shared use paths, bicycle facilities, etc.)

In addition to funding increases over FY 2021, program funding grows nearly 2-3% per year through FY 2026. This continuous growth essentially means more direct resources for states, transit providers, and MPOs as well as suballocations to local governments through these listed agencies.

New Programs

New programs (both formula and competitive) for transportation investment include:

A $6.4 billion formularized Carbon Reduction Program, which appears to be somewhat similar in purpose and use as CMAQ funding
A dedicated transportation resiliency program called PROTECT, which has both a formula ($7.3 billion) and a competitive ($1.4 billion) component
A $10 billion freight-related program called National Infrastructure Project Assistance Grants, which appears to be somewhat of a supplement to the continued INFRA grant program
A $3.265 billion competitive bridge repair program
A $2 billion Rural Surface Transportation Grant program (think ‘rural-specific RAISE program’)
$2.5 billion for electric vehicle charging infrastructure
$1 billion for an Active Transportation Infrastructure Investments Program, which appears to be a nationally competitive TA-type program
$1 billion for safety projects and planning through the Safe Streets and Roads for All Grant Program
Other smaller programs, for things such as the elimination of railroad crossings and development of environmentally sustainable infrastructure (the Healthy Streets Program)
Though not a ‘new’ program, the IIJA Bill codifies the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) program and clarifies program goals, which is to fund projects with significant local or regional impact. This is a policy shift.

Areas of Interest

General areas to be aware of and monitor as rulemaking is provided below, along with additional analyses:

Buy America: The bill includes large sections on Build America and Buy America, which strengthens existing Buy America requirements and will consequently be applied to nonferrous construction materials (plastic, polymer, glass, lumber, drywall, etc.) Additional guidance will be provided from the Office of Management and Budget and other federal agencies.

MPO Composition: Requires MPOs to consider the “equitable and proportional representation of the population of the metropolitan planning area” when designating officials. This language will almost certainly be subject to numerous discussions and interpretations.

Housing: Adds housing to the scope of the MPO planning process in a variety of ways. Housing has not been a component of the MPO process to date.

Transportation Development Credits: Creates a pilot program for TDCs to allow the creation of a TDC marketplace where states can sell, transfer, or purchase toll credits. This allowance could, theoretically, benefit states with significant amounts of unused credits (like Texas) and those with none (like Louisiana.)

Funding Policy Changes

The passage of this legislation also coincides with the United States Department of Transportation’s awards for the FY 21 RAISE grants. In previous years, it was somewhat rare for a multimodal (or non-highway/freight project) to receive an award. The FY 21 awards, which have flipped this paradigm on its head, allocates most funding to multimodal transportation facilities, trails, complete streets, and resiliency projects. This trend is expected to continue through the remainder of the Biden administration. As the United States Transportation Secretary functionally awards these projects, policy will be determined by who appoints this individual going forward.

For additional information or questions, contact TGC to learn more about our services, our team, and our mission to connect capital to communities across Texas and beyond.

Joanne MaNovember 17, 2021Intergovernmental Relations, Funding Pursuit