Today President Biden signed H.R. 3684, the “Infrastructure Investment and Jobs Act” (IIJA), into law after months of negotiations on both the bill itself and the still pending “Build Back Better Act”. These two measures encapsulate the Biden Administration’s legislative priorities, many of which were rolled out during the campaign. The U.S. Senate passed the IIJA on August 10 by a vote of 69-30. Last week, on November 5, the House of Representatives passed the measure by a vote of 228-206. The months long negotiations resulted in bipartisan support for the IIJA in both the House and Senate.
Broadly, the IIJA:
- Provides Funding: The funds provided are appropriated dollars, allowing Executive Branch agencies to distribute funds without further legislative action. The funds provided are for both new and existing federal programs for surface transportation, energy infrastructure, transportation safety, transit, broadband, ports and waterways, airports, drinking water and wastewater.
- Expedites Permitting: There are several new programs created to support transmission development and streamline the permitting of new energy infrastructure, such as electric transmission
- Provides New Authorities and Creates New Programs: Various federal agencies are required to develop new programs and processes, all aimed at deploying clean energy or improving cybersecurity.
The IIJA represents a monumental investment in all types of infrastructure. However, most significantly, it will provide the largest federal investment since the New Deal in the Nation’s infrastructure and in developing the tools to curb carbon emissions and harden infrastructure to increase resiliency against the current global challenge of climate change. The Department of Energy and other federal agencies will receive $65 billion for power and grid related programs, including grid infrastructure, resiliency investments, clean energy demonstration projects and cybersecurity. An additional $7.5 billion will be available for alternative fueling infrastructure for grants to build public fueling systems, including electric and hydrogen fuels, establish alternative fuel corridors, and find ways to recycle used electric vehicle batteries to be reused as energy storage devices.
In July, our team shared the details of the bill passed by the Senate Energy and Natural Resources Committee. As signed into law, this earlier summary still accurately reflects the details of the funding that will be provided.
Implementation and Timing of Funding: Agencies will now be tasked with standing-up new or expanding existing programs to award federal funds to eligible infrastructure projects. Agency offices will work over the coming weeks to establish grant program parameters, develop, and publish solicitations for applications, set timelines for awards and oversee implementation of awarded funds.
The IIJA included deadlines for some agency actions, requiring that programs be established in 60, 90, or 180 days. Note that many of the agency offices, particularly within the Department of Energy, remain functioning without political appointees. For instance, the Office of Electricity, which will be responsible for issuing $3 billion in grants through the Smart Grid Investment Matching Grant Program, is operating under an Acting Assistant Secretary until the Senate confirms the Biden Administration’s nominee for that post. There are no legal or political impediments to getting funding programs up and running without a political appointee heading any federal office, but political influence on the pace and timing for the process may be limited.
Certain programs will automatically send funds to states through existing formula funding programs. Formula grant programs are non-competitive awards based on a predetermined formula. These programs are sometimes referred to as state-administered programs and are found throughout the federal government. Examples include the Environmental Protection Agency’s Clean and Drinking Water State Revolving Loan program, and the Department of Transportation’s Formula Funds for Rural Areas, and Buses and Bus Facilities formula grants programs. Once the states have received their federal allocations they will then make those funds available through their existing award structure, which may be competitive or formula-based.
How Your Organization Can Apply for Federal Funding Opportunities: As agencies establish parameters for new programs or develop solicitations for existing programs, it is important to engage with the agencies in this process to ensure your project will meet agency program criteria for a funding award, and to ensure solicitations are designed to support your infrastructure projects. Our professionals have had significant success in assisting clients through these processes, and successfully assisted clients in the development of grant applications for awards under both Democratic and Republican Administrations. Contact any of our professionals to learn more about what grant programs your organization may be eligible for, how to engage with the agencies, as well as apply and partner with the federal government to ensure funding is awarded for your project.
What’s Next, Human Infrastructure: The IIJA represents only the provisions in the Biden agenda that were able to earn bipartisan support. The remainder of the President’s priorities are encapsulated in a Budget Reconciliation bill, H.R. 5376, the “Build Back Better Act”, (BBBA) developed by House and Senate Democrats and requiring only a 50-vote threshold in the Senate.
For months, the Build Back Better Act and IIJA and were linked in the legislative process by President Biden and House Speaker Nancy Pelosi (D-CA) who demanded that one not pass without the other. This approach resulted in a rift between the Democratic Party’s moderate and progressive members. While the final outcome for the IIJA resulted in bipartisan votes in both the House and Senate, passage only came after a deal was struck between moderates and progressives within the Democratic Caucus to decouple the IIJA and the “Build Back Better Act”.
House Speaker Nancy Pelosi has publicly said that the “Build Back Better Act” will be brought to the House Floor during the week of November 15. Senate Leadership has made no such promise for timely action. In addition, some House Democrats and some Senators have announced they want to see the details of budget scoring – what individual provisions will cost – from the Congressional Budget Office (CBO) and the Joint Tax Committee – before proceeding. Some limited data has begun to be released by the CBO but not any numbers covering many of the most complex and controversial programs. The schedule may be accelerated if Democrats and Republicans cannot come to an agreement to increase the debt ceiling, a must-pass measure that may need to be included in the Budget Reconciliation process. As negotiations continue, the content of the legislation passed by the House is expected to be altered significantly during Senate consideration. Should that be the case, the House will vote a second time on the measure as amended by the Senate.