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Deep Dive: The Infrastructure Investment and Jobs Act (IIJA)

The Infrastructure Investment and Jobs Act (IIJA) would reauthorize for five years through fiscal 2026 surface transportation programs while additional funding would be authorized for energy, water, and broadband infrastructure. The legislation would extend highway, safety, transit, rail, pipeline, and research programs that are typically included in five-year surface transportation reauthorizations. It also includes provisions to address climate change, codify parts of a Trump-era policy on environmental reviews, impose domestic content requirements, authorize programs to enhance the electric grid and replace lead pipes, and appropriate $445.9 billion in emergency funds.

The measure includes provisions to offset some of the spending, such as extending the annual sequestration of mandatory funding, blocking a drug rebate rule, selling oil from the Strategic Petroleum Reserve, and requiring transactions of digital assets such as cryptocurrency to be reported to the IRS. The cryptocurrency provisions were estimated to generate $28 billion in revenue over 10 years.

HIGHWAYS

  • Highway Trust Fund: The Highway Trust Fund (HTF), which funds most major highway programs, is estimated to become insolvent starting in fiscal 2022, per the Congressional Budget Office’s February 2021 baseline estimate.  The main source of federal money for the trust fund is the gasoline tax, which has not increased since 1993, and the measure would not change its rate. Instead, it would transfer $90 billion to the trust fund for highways and $28 billion for mass transit.
  • Highway Programs: The bill’s authorization for the main federal-aid highway programs would be $52.5 billion in fiscal 2022, increasing 2% every year and reaching $56.8 billion in fiscal 2026.  The five-year total would be $273.2 billion. The authorization covers state apportionments for federal highway construction, as well as Surface Transportation Block Grants and other programs.
  • Bridge Investment: The measure would authorize $3.27 billion over five years from the HTF and $3.27 billion over the same period from the Treasury general fund for new grants to repair and replace bridges.

Climate Change & Alternative Vehicles

  • Resilience: The bill would set aside $7.3 billion from the main federal-aid highway allocation and authorize an additional $1.4 billion from the HTF from fiscal 2022 through 2026 as part of a new Promoting Resilient Operations for Transformative, Efficient, and Cost-saving Transportation (PROTECT) program.  The program would fund improvements to make infrastructure more resilient to storms and natural disasters. It also would authorize $500 million over five years to establish Transportation Resilience and Adaptation Centers of Excellence to study how to make transportation more resilient to extreme weather and climate change.
  • Carbon Reduction: The measure would allocate $6.42 billion over five years from federal-aid highway funds for a new program to reduce transportation-related carbon emissions. Eligible projects would include truck stop electrification systems, trail facilities for pedestrians and bicyclists, congestion management technologies, intelligent transportation system capital improvements, energy-efficient alternatives to street lights, electric vehicle charging infrastructure, and port electrification.
  • Charging & Refueling: The measure would authorize $2.5 billion over five years for grants for electric vehicle charging stations and alternative fuel infrastructure. Half of the funds would be set aside to install alternative fuel stations and infrastructure in publicly accessible locations, with priority for rural areas, low- and moderate-income neighborhoods, and communities with a low ratio of private parking to households or a high ratio of multiunit dwellings to single-family homes.

User Fees

  • The measure would set aside $50 million over five years from highway research and development funds for a new pilot program to explore the use of a national motor vehicle per-mile user fee to bolster the HTF. The Transportation Department would solicit voluntary participants from across the country and set user fees for passenger motor vehicles, light trucks, and medium- and heavy-duty trucks.

PUBLIC TRANSIT

The Federal Transit Administration (FTA) programs that the bill would reauthorize feature a mix of formula programs that receive money from the Mass Transit Account of the Highway Trust Fund and programs covered by the general fund of the Treasury.  The measure includes $69.9 billion in contract authority from the mass transit account from fiscal 2022 through 2026 for the main formula-based transit grant programs. The fiscal 2022 allocation would be $13.4 billion, compared with $10.2 billion for fiscal 2021.  Allocations of grant funds over the five-year period would include:

  • $33.5 billion for Urbanized Area Formula Grants.
  • $18.4 billion for the State of Good Repair Grants Program for upgrading older rail and bus systems in urbanized areas.
  • $4.58 billion for public transportation in rural areas.
  • $3.16 billion for bus and facility formula grants.
  • $2.34 billion for low- or zero-emission bus grants. At least 5% would be used for training workers to use the buses.
  • $1.94 billion for improving transit services for seniors and individuals with disabilities in urbanized and rural areas.

Capital Investment Grants

The measure would authorize a total of $15 billion from the general fund over five years for Capital Investment Grants for fixed guideway projects such as rapid and commuter rail, streetcars, bus rapid transit, and ferries.

RAIL

  • Amtrak Grants: The measure would authorize the following amounts for Amtrak grants from fiscal 2022 through 2026:
    • $12.7 billion for National Network grants.
    • $6.57 billion for Northeast Corridor grants.
  • Other Rail Grants: The bill also would authorize the following amounts from fiscal 2022 through 2026 for Rail Improvement Grants:
    • $7.5 billion for renamed Federal-State Partnership for Intercity Passenger Rail Grants.
    • $5 billion for Consolidated Rail Infrastructure and Safety Improvements (CRISI) grants. The department could withhold 10% for project management oversight costs.
    • $2.5 billion to eliminate railroad crossings. At least 20% would be allocated to projects in rural areas or on tribal lands. At least 5% of funds would be reserved for projects in counties with 20 or fewer residents per square mile based on the most recent census.
  • Intercity Passenger Rail: The measure would rename the current Federal-State Partnership for State of Good Repair program and allow funds to be used for projects to expand or establish a new intercity passenger rail service. The Transportation Department would use at least 45% of program funds for projects that are not located along the Northeast Corridor and 45% for projects that are listed on the Northeast Corridor project inventory.  The department would also have to establish a program to develop intercity passenger rail corridors and could withhold as much as 5% of grant funding for it.
  • State-Supported Routes: Amtrak would have to enter into an agreement with a state before starting construction on any new state-supported route that outlines how they will share capital and operating costs for the route.
  • Rural Service: The measure would bar Amtrak from suspending, significantly altering, or reducing the frequency of rail service on any long-distance route in rural communities in any fiscal year it receives federal funds for the route. The prohibition wouldn’t apply in emergencies or cases where construction or maintenance outages affect routes.  It would also require Amtrak to notify Congress 210 days in advance if it plans to discontinue service.

SAFETY

  • Highway Traffic Safety: The measure would authorize about $6.9 billion over five years for the National Highway Traffic Safety Administration (NHTSA) and related driver safety programs.  Total authorized funding from fiscal 2022 through 2026 would include the following amounts from the Highway Trust Fund:
    • $1.89 billion for highway safety programs.
    • $1.76 billion for national priority safety programs.
    • $970 million for highway safety research and development.
    • $205.8 million for NHTSA administrative expenses.

The bill would require the Transportation Department to issue rules that:

  • Require manufacturers to install automatic shutoff systems in vehicles with keyless ignitions.
    • Establish a performance standard for crash avoidance technology.
    • Require new passenger motor vehicles to have forward collision warning, automatic braking, lane departure warning, and lane keeping assist systems.
    • Provide performance standards for vehicle headlamp systems and allow for adaptive driving beam headlamps.
    • Require new passenger motor vehicles to have advanced drunk and impaired driving prevention technology.
    • Require new passenger vehicles have alerts to remind drivers to check the rear-passenger seats for passengers—especially children—after the vehicle is turned off.

WATER INFRASTRUCTURE

Drinking Water

  • State Revolving Funds: The bill would authorize $14.7 billion from fiscal 2022 through 2026 for the Environmental Protection Agency’s Drinking Water State Revolving Fund program, which provides capitalization grants to states for loans supporting water infrastructure projects. The measure would require at least 12% of such funding to be used to subsidize loans to disadvantaged communities, increased from 6% under current law, if there are enough applications for loans to those communities.  The measure also would provide $55.4 billion in supplemental emergency appropriations for EPA state and tribal assistance grants, including for capitalization grants through the Clean Water State Revolving Funds and Drinking Water State Revolving Funds. Amounts set aside for specified activities for fiscal 2022 through 2026 would include:
    • $15 billion to replace lead service lines.
    • $5 billion to support disadvantaged communities affected by emerging contaminants.
    • $5 billion for clean and zero-emission school buses.
    • $4 billion to address emerging contaminants with a focus on per- and polyfluoroalkyl substances (PFAS).

ENERGY INFRASTRUCTURE

Electric Grid Security

  • Resilience Grants: The bill would authorize $5 billion over five years for grants to stakeholders in the electricity generation and distribution sector to supplement their own efforts to improve resiliency to disruptive events including natural disasters.  Half of the grant funding would be awarded by the Energy Department, and the other half would be distributed through states and American Indian tribes that submit distribution plans. A portion of grant funding would have to go to eligible recipients that sell 4 million megawatt hours or less of electricity per year.
  • Grid Programs: The measure would authorize the following amounts for fiscal 2022 through 2026:
    • $5 billion for competitively awarded financial assistance to utilities to demonstrate new approaches to improve grid resilience.
    • $3 billion for a program to award grants to match investments in smart grid technologies.
    • $1 billion to improve resilience and environmental protection in rural areas.

BROADBAND

  • Connectivity Grants: The bill would authorize $42.5 billion for a Broadband Equity, Access, and Deployment Program within the Commerce Department that would provide grants to increase connectivity to underserved and high-cost areas. The measure would provide a minimum of $100 million to each state, Washington, D.C., and certain territories. Remaining funds would be allocated using a formula based on the number of underserved or high-cost areas within a potential grantee’s jurisdiction relative to the number across the U.S.  Grantees could provide subgrants for service projects, connecting “anchor institutions” such as a library or school, providing internet-capable devices, or other projects that further the goal of increasing connectivity. Recipients would generally be required to provide a 25% match, which could be reduced or waived and could come from Covid-19 relief funds, among other sources.
  • Digital Equity Grants: The measure includes several programs to increase “digital equity” to ensure that communities and populations “have the information technology capacity that is needed for full participation in the society and economy of the United States.” It also would call for “digital inclusion” that ensures access to and use of affordable and reliable fixed and wireless broadband and internet-connected devices with awareness of privacy and cybersecurity, as well as digital literacy that includes knowledge of how to find, evaluate, and create content.  It would create a State Digital Equity Capacity Grant Program and authorize:
    • $60 million for grants to states to develop digital equity plans.
    • $1.44 billion from 2022 through 2026 for capacity grants to states to implement their plans.
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