The Infrastructure Investment and Jobs Act (IIJA) was signed into law by President Biden on November 15, 2021, providing funding for certain infrastructure and related projects.
More than $550 billion of the funding is ‘new money’ to be allocated through FY 2026. According to an analysis by the National Association of Counties, eight federal agencies have been awarded funding:
- Department of Agriculture
- Department of Commerce
- Department of Energy
- Department of Homeland Security
- Department of the Interior
- Environmental Protection Agency
- Department of Health and Human Services
- Department of Transportation
In addition, a variable number of supplemental appropriations to existing federal programs raises the potential spending to $1.2 trillion between now and FY 2026. Most analysts agree that the IIJA is the largest infusion of infrastructure funds since the creation of the interstate highway system in 1956.
How is the Infrastructure Bill Funded?
According to the Committee for a Responsible Federal Budget, IIJA offsets may range from $200 billion to $547 billion, with most funding from five areas:
- Repurposing unused COVID-19 relief funds
- Delaying of implementing a Medicare Part D rebate rule
- Expanded information reporting of cryptocurrency transactions
- Extension of fees on government-sponsored enterprises
- Sales of the broadcast spectrum to communications companies and application of proceeds from previous sales
According to an analysis by the National League of Cities, there is also flexibility allowing local governments to issue tax-exempt bonds to finance rural broadband and certain other projects.
What Areas Are Funded in the Infrastructure Bill?
A summary of the ‘new money’ in the bill by the National Association of Counties has the following analysis by sector:
| Sector |
Baseline Investment (Billions) |
Elements Over Five Years |
| Transportation |
$284 |
- $110 billion for roads and bridges
- $39 billion for transit
- $66 billion for rail
- $11 billion for transit safety (eliminating at-grade rail crossings especially)
- $25 billion for airports
- $17 billion for ports and waterways
- $7.5 billion for an electric vehicle charger network
- $7.5 billion for electric busses
- $1 billion to reconnect communities separated by freeways
|
| Water |
55 |
- $29.3 billion for expansion of state revolving loan funds for water
- $16 billion in capitalization grants addressing water contaminants
- $4 billion addressing so-called ‘forever chemicals’ including 100% forgivable loans to eligible recipient governments
- Additional funds for other water infrastructure projects
|
| Broadband |
65 |
- More than $42 billion for grants to states for broadband development, just in FY2022, (but local governments may apply if a state fails to apply for funding)
- $1 billion toward a ‘middle mile’ competitive grant program to facilitate broadband deployment
- Expansion of monthly connectivity benefits to eligible consumers from $30 to $50 per month
- More than $1 billion toward a newly established state digital equity capacity grant program
- $250 million for a new competitive grant addressing cybersecurity for rural electric cooperatives and county-owned utilities from the Department of Energy
- $1.3 billion toward a separate state and local cybersecurity program from Homeland Security
- Additional funds from the Department of Transportation for cybersecurity tool development
|
| Energy and Power |
73 |
- $5 billion competitive grant toward the resilience of the electric grid
- $3.5 billion in new funding for weatherization assistance, for low-income households
- $310 million toward creation of a carbon utilization grant program
- $3 billion for a competitive grant modernizing energy infrastructure
- $2 billion for a carbon dioxide transportation infrastructure finance and innovation program
- $2.5 billion for a new revolving loan fund for transmission line replacement, and for public-private partnerships
- $50 million toward a new transmission line facilitation program
- $3 billion in grants to state and local governments for projects including advanced battery component manufacturing, commercial scale manufacturing and retooling of existing facilities
- $500 million enhancing energy efficiency in public schools
- $550 million expansion of the energy efficiency and conservation block grant program
|
| Environmental Remediation |
21 |
- Nearly $15 billion for the Clean Water State Revolving Fund
- Nearly $629 million for county-owned or operated hydroelectric facilities
- $1.2 billion funding brownfields restoration
|
| Western water infrastructure |
8.3 |
- Extension of the Secure Rural Schools Program for three years
- $5.5 billion for wildfire risk mitigation
- $250 million for improvements to U.S. Forest Service Legacy Roads and Trails
- An additional $100 million in competitive grant funds for small water storage and groundwater storage projects
|
| Resiliency (Climate change) |
46 |
- $1 billion toward the Federal Emergency Management Agency Building Resilient Infrastructure and Communities program
- $500 million for the Safeguarding Tomorrow through Ongoing Risk Mitigation (STORM) Act, (low interest loans for states and local governments for pre-disaster mitigation activities)
- $3.5 billion for flood mitigation assistance grants
- Establishment of a Transportation department requirement to quantify annual risk and resilience
- Expansion of the Stafford Disaster Relief and Emergency Assistance Act, and
- Establishment of an Intergovernmental Commission on Wildfire Mitigation and Prevention
|
| Total |
$552.3 |
|
| Sector / Baseline Investment (Billions) |
Elements Over Five Years |
Transportation
$284 |
- $110 billion for roads and bridges
- $39 billion for transit
- $66 billion for rail
- $11 billion for transit safety (eliminating at-grade rail crossings especially)
- $25 billion for airports
- $17 billion for ports and waterways
- $7.5 billion for an electric vehicle charger network
- $7.5 billion for electric busses
- $1 billion to reconnect communities separated by freeways
|
Water
55 |
- $29.3 billion for expansion of state revolving loan funds for water
- $16 billion in capitalization grants addressing water contaminants
- $4 billion addressing so-called ‘forever chemicals’ including 100% forgivable loans to eligible recipient governments
- Additional funds for other water infrastructure projects
|
Broadband
65 |
- More than $42 billion for grants to states for broadband development, just in FY2022, (but local governments may apply if a state fails to apply for funding)
- $1 billion toward a ‘middle mile’ competitive grant program to facilitate broadband deployment
- Expansion of monthly connectivity benefits to eligible consumers from $30 to $50 per month
- More than $1 billion toward a newly established state digital equity capacity grant program
- $250 million for a new competitive grant addressing cybersecurity for rural electric cooperatives and county-owned utilities from the Department of Energy
- $1.3 billion toward a separate state and local cybersecurity program from Homeland Security
- Additional funds from the Department of Transportation for cybersecurity tool development
|
Energy and Power
73 |
- $5 billion competitive grant toward the resilience of the electric grid
- $3.5 billion in new funding for weatherization assistance, for low-income households
- $310 million toward creation of a carbon utilization grant program
- $3 billion for a competitive grant modernizing energy infrastructure
- $2 billion for a carbon dioxide transportation infrastructure finance and innovation program
- $2.5 billion for a new revolving loan fund for transmission line replacement, and for public-private partnerships
- $50 million toward a new transmission line facilitation program
- $3 billion in grants to state and local governments for projects including advanced battery component manufacturing, commercial scale manufacturing and retooling of existing facilities
- $500 million enhancing energy efficiency in public schools
- $550 million expansion of the energy efficiency and conservation block grant program
|
Environmental Remediation
21 |
- Nearly $15 billion for the Clean Water State Revolving Fund
- Nearly $629 million for county-owned or operated hydroelectric facilities
- $1.2 billion funding brownfields restoration
|
Western water infrastructure
8.3 |
- Extension of the Secure Rural Schools Program for three years
- $5.5 billion for wildfire risk mitigation
- $250 million for improvements to U.S. Forest Service Legacy Roads and Trails
- An additional $100 million in competitive grant funds for small water storage and groundwater storage projects
|
Resiliency (Climate change)
46 |
- $1 billion toward the Federal Emergency Management Agency Building Resilient Infrastructure and Communities program
- $500 million for the Safeguarding Tomorrow through Ongoing Risk Mitigation (STORM) Act, (low interest loans for states and local governments for pre-disaster mitigation activities)
- $3.5 billion for flood mitigation assistance grants
- Establishment of a Transportation department requirement to quantify annual risk and resilience
- Expansion of the Stafford Disaster Relief and Emergency Assistance Act, and
- Establishment of an Intergovernmental Commission on Wildfire Mitigation and Prevention
|
Total
$552.3 |
|
IIJA has a ‘Buy America’ preference. Waivers may be available if there are inadequate supplies, or if the costs would rise by more than 25%.
What Does the Infrastructure Bill Mean for Governments?
Due to the nature of competitive grants, no state-by-state or county-by-county analysis of funding is available in a manner similar to what was made available for the American Rescue Plan Act. However, it is certain that various state agencies impacted by IIJA will be meeting with municipal officials over the next few months to plan for IIJA funding.
We also do not know the audit impact of the new IIJA programs; however, existing federal programs expanded by the IIJA are subject to single audit.
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