November 10, 2021

House Approves Historic Infrastructure Investment Bill

On November 5, the House of Representatives gave final approval to the bipartisan Infrastructure Investment and Jobs Act (IIJA; H.R. 3684). Passage of the sweeping infrastructure package represents a major victory for California’s Counties and is the culmination of months of grassroots advocacy and intense negotiations on Capitol Hill. The 228-206 vote occurred shortly after Democrats reached an agreement on how to move forward with a separate $1.75 trillion climate and social spending bill known as the Build Back Better Act (BBBA; H.R. 5376).

In the end, 13 Republicans crossed party lines to support the infrastructure legislation, with six Democrats opposing advancement of the bill absent a concurrent vote on the BBBA. It should be noted that the infrastructure legislation passed the Senate in August, with 19 Republicans joining all 50 Democrats in support. The House vote now clears the way for President Biden to sign the IIJA into law. The White House has not yet announced a date for the bill signing ceremony, though it will likely be held during the week of November 15.

To follow is a summary of key provisions of H.R. 3684.

Surface Transportation

The IIJA provides significant new investment for local transportation priorities, including a five-year, $383.4 billion reauthorization of highway, transit, and safety programs. Key transportation highlights include:

• Core Highway Program Investment – $273.15 billion in Highway Trust Fund (HTF) contract authority for highways, roads, and bridges, a roughly 21.3 percent increase over the FAST Act. Funds will be apportioned to states over five years through nine core highway formula programs.

• Bridge Investment

  • The bill authorizes a total of $43.3 billion for a new Bridge Investment Program (BIP), of which $27.5 billion is formula funding to states and $15.8 billion is for competitive grants ($9.235 billion in guaranteed appropriations, $3.265 billion from the HTF, and $3.265 available in future years from the General Fund). Fifteen percent of BIP formula funds are reserved for local off-system bridge projects.

• The IIJA increases the amount of Surface Transportation Block Grant Program funds that are set aside for local off-system bridges (set at 20 percent of a state’s FY 2009 share of Highway Bridge Program funding). This translates into a $1.035 billion annual investment for off-system bridges, or $5.18 billion over five years.

• Significant Discretionary Grant Program Funding – The legislation provides billions of dollars for key discretionary grant programs funded through the Federal Highway Administration (FHWA), including the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grants and the Infrastructure for Rebuilding America (INFRA) Grant Program. H.R. 3684 also creates several new grant initiatives, including the Rural Surface Transportation Grant Program, the National Infrastructure Project Assistance Grant Program, a Wildlife Crossings Pilot Program, and the Reconnecting Communities Pilot Program.

• Public Transit – The bill includes $69.9 billion in five-year contract authority from the mass transit account of the HTF. The FY 2022 allocation is set at $13.4 billion, compared with $10.2 billion for FY 2021. Funding allocations over the five-year period include significant funding for Urbanized Area Formula Grants, State of Good Repair Grants Program, public transportation in rural areas, and bus/bus facility formula grants, among other key transit investments.

Broadband

H.R. 3684 includes a total of $65 billion in funding for broadband infrastructure, including $42.45 billion for the Broadband Equity, Access and Deployment Program for states to make competitive grants to entities to carry out broadband infrastructure, data collection, mapping, and adoption projects. The IIJA also includes the following broadband investments: $1 billion for Enabling Middle Mile Broadband Infrastructure ($1 billion); $1.25 billion for the Digital Equity Competitive Grant Program; $1.5 billion for the State Digital Equity Capacity Grant Program Affordable Connectivity Program; and, $14.2 billion to make the FCC’s Emergency Broadband Benefit program permanent, which provides $30 per-month vouchers for low-income families to use toward any broadband service plan.

Aviation

The IIJA includes $15 billion over five years for the Airport Improvement Program (AIP), including formula funding to primary airports and funding for general aviation and commercial service airports. Additionally, the bill creates a new $5 billion “groundside” competitive grant program for airport improvements, including projects to improve aging infrastructure of airport terminals, including on-airport rail access projects and relocating, reconstructing, repairing, or improving airport-owned traffic control towers.

Resiliency

Among other investments, the IIJA includes $1 billion for FEMA’s Building Resilient Infrastructure and Communities (BRIC) grant program. The bill also provides $500 million for a new program within FEMA that will help states establish revolving loan funds that could be used by local governments to carry out mitigation projects that reduce natural disaster risk. Additionally, the legislation modifies the Stafford Act to expand eligibilities within the Hazard Mitigation Grant Program (HMGP) to include the replacement or installation of wildfire resilient electrical transmissions or utility poles.

Wildfire Risk Reduction

H.R. 3684 authorizes nearly $3.4 billion for the Department of the Interior and the U.S. Forest Service to conduct various forest management activities, including hazardous fuels reduction, controlled burns, community wildfire defense grants, landscape forest restoration projects, and additional firefighting resources. In addition, the bill includes $5 billion for utilities to bury power lines and install fire-resistant technologies to reduce wildfires.

Western Water Infrastructure

The IIJA dedicates $8.3 billion for various programs and projects under the purview of the Interior Department, including: $3.2 billion to address aging infrastructure; $1.15 billion for water storage and conveyance projects; $1 billion for water recycling; $1 billion for rural water investments; $500 million for dam safety; and, $250 million for desalination. The bill also includes $300 million for the Drought Contingency Plan.

Grid Infrastructure

H.R. 3684 authorizes a total of $73 billion to upgrade the nation’s power infrastructure, including funds to build thousands of miles of new transmission lines to facilitate the expansion of renewable energy.

Clean Water and Drinking Water Infrastructure

The IIJA includes $55 billion for clean water and drinking water investment, including significant new funding for the Drinking Water and Clean Water State Revolving Funds. The bill also provides a total of $15 billion over five years for loans and grants to replace lead service lines. Pursuant to the legislation, 49 percent of funds provided to states in the form of capitalization grants will be made available to counties and other local governments. Additional funding is included to further address emerging contaminants in drinking water, with a focus on perfluoroalkyl and polyfluoroalkyl substances (PFAS).

Secure Rural Schools

The legislation reauthorizes the Secure Rural Schools (SRS) program for three years. The program, which is currently expired, provides assistance to rural counties and school districts affected by the decline in revenue from timber harvests on federal lands. The measure also terminates the annual five-percent reduction in payments and increases funding for the next three years to fiscal year 2017 levels.

House Vote on Reconciliation Bill Expected Next Week

House leadership is aiming to hold votes on the BBBA next week, though a number of moderate Democrats have threatened to withhold their support until they receive additional financial information on the legislation from the Congressional Budget Office (CBO). While CBO is expected to release preliminary information on the bill as early as this week, a full analysis will take much longer.

It should be noted that the current version of the BBBA includes a number of compromises on issues that have bogged down negotiations for months. For starters, the measure would increase the cap on the state and local tax (SALT) deduction to $80,000 – up from $10,000 – through 2030. Thereafter, the cap would return to $10,000 in 2031 and then expire. The current cap, which was established under the 2017 tax law (P.L. 115-97), is scheduled to end in 2025. For his part, Senator Bernie Sanders (I-VT) is pushing his own compromise provision that would restrict SALT deductions to only those who earn up to a certain level – roughly $400,000 to $550,000.

Immigration policy also has been a major sticking point in the budget reconciliation negotiations. The current compromise would direct the Department of Homeland Security to grant applications for “parole” to undocumented immigrants who arrived in the U.S. prior to January 1, 2011. Individuals paroled under the bill would receive employment and travel authorization and would be eligible for driver’s licenses or other state-issued identification cards. The legislation also includes provisions that would recapture unused visas, expedite status adjustment applications for legal immigrants, and help address visa processing backlogs.

In addition to the aforementioned compromises on SALT and immigration policy, the legislation would establish a new federal program to provide as many as four weeks of paid family and medical leave for the birth or adoption of a child, to care for a family member with a serious health condition, or for an employee’s own serious health condition. The benefit, which would start in 2024, would be tied to an individual’s average weekly earnings and hours. It should be noted that states with preexisting paid leave programs would receive federal funding to cover the equivalent costs of the benefits, and employers would receive grants to cover 90 percent of their paid leave benefits.

Should the House succeed in advancing the BBBA, the legislation could still undergo potentially major changes in the Senate to appease moderate Senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ). At this point, it’s still unclear where they stand on the proposed House package. If the Senate does make changes to the legislation, it would have to go back before the House for a final vote.