Next Steps For Infrastructure Legislation

States Take Charge Of Resource Allocations

By Zachary Perconti

Last November, Congress passed and President Biden signed into law the historic Infrastructure Investment and Jobs Act (IIJA), H.R. 3684. This law makes the largest-ever federal investment in key business markets for NUCA members. $550 billion of new spending helps round out the bill’s $1.2 trillion in authorized spending.

$55 billion of those funds are allocated for water infrastructure. $23 billion will be split between the Clean Water SRF and Drinking Water SRF. To put that in perspective, that is a three-fold increase to the Drinking Water SRF funding over previous years.

An additional $15 billion was allocated to remove and replace lead drinking water pipes, which is a fantastic start to the nation’s overall need to replace or update aging clean water systems.

The bill also contained $10 billion in grants to address PFAS contamination, over $40 billion for broadband construction, $110 billion for surface transportation projects, $173 billion to upgrade the electric grid, $7 billion to create a network of electric vehicle (EV) charging stations, $66 billion for passenger and freight rail infrastructure upgrades, $42 billion for airports, ports, and waterways, and $1 billion to replace municipal gas distribution lines. And for a bill this size, there are even more funding opportunities for infrastructure construction businesses in other areas, especially in technology.

Our industry’s focus now shifts to the rollout and implementation of IIJA, which represents a colossal degree of investment. The bill covers Fiscal Years 2022 through 2026, with first funding likely to reach the market by summer. IIJA is not intended to be a quick stimulus, but rather a “generational investment” and gives priority to programs with maximum long-term impact.

Most of the funding being sent to states will be distributed through existing program formulas being used by the U.S. Depts. of Transportation, Commerce, and Environmental Protection Agency (EPA). To access non-guaranteed funding, state/local governments must submit competitive grant applications to federal agencies administering each program, as they have done in the past.

Agencies and states have significant flexibility in dispensing funds. Some funding will come from federal grants to specific projects, but most resources will first flow through states, which requires action by state legislators. It is important to note that Federal agencies may prioritize Biden Administration goals in deciding which projects to issue grants, such as climate change mitigation.

Federal agencies have already begun drawing up and publishing preliminary guidance for funding and program implementation. Many state and local agencies have also started working on identifying funding priorities, so we urge you to contact your state and local planning authorities and use the contacts you’ve developed for past projects to let them know of possible areas of need. And if you haven’t made these contacts, this is a perfect opportunity for you to open this especially important business conversation.

Water Infrastructure

As for our industry’s specialty, the $55 billion in water infrastructure funds will be mainly distributed to projects via the EPA’s existing Clean Water and Drinking Water SRFs. IIJA funding levels are more than three times the current appropriations. EPA Administrator Michael Regan said it was the “single largest investment in water infrastructure” in the history of the federal government.

More than $50 million in additional competitive grants are made available for small and disadvantaged communities annually during FY2022 to FY2026, with states applying for them through EPA.

States will have access to around $76.6 billion of additional dollars for other infrastructure projects by way of competitive grants. These programs include but are not limited to flood mitigation, waterway and coastal infrastructure, environmental remediation, infrastructure resiliency, and western U.S. water infrastructure projects. State and local governments must submit competitive grant applications to federal agencies administering each of these programs.

$7.4 billion will be distributed by EPA for FY2022, with $2.9 billion specifically earmarked for lead pipe replacement, and $866 million for PFAS and other contaminants. Appropriations will increase in the next four years through FY2026.

Broadband

Broadband infrastructure needs started with an allocation of $100 million for every U.S. state and the District. Every state is set to receive same minimum regardless of need. An example is Hawaii, which has at least 33,000 residents currently lacking modern broadband systems (defined as 25/3 Mbps).

Most funding will be doled out by the Commerce Department’s National Telecommunications and Information Administration (NTIA) by way of direct grants to states. The Broadband Equity, Access, and Deployment (BEAD) Program will receive $42.45 billion for direct grants to states, territories, D.C., and Puerto Rico. Funding allotments are to be determined by Federal Communication Commission broadband maps, to be released later this year.

Smaller broadband programs will also receive funding, such as $1 billion appropriated to the Enabling Middle Mile Broadband Infrastructure Program, $2 billion for the RUS ReConnect Program, and $2 billion to the existing NTIA Tribal Broadband Connectivity Program. This is all money that could be used to build underground infrastructure.

The bill directs states to prioritize funding unserved areas first (25/3 Mbps), then underserved areas (100/20 Mbps), followed by community anchor institutions (schools, hospitals, public safety entities). States may also prioritize high-poverty areas and projects that provide higher-speed fiber-optic broadband services. Broadband service of at least 100/20 Mbps is required of any projects receiving grants.

NTIA has 180 days to establish rules and timeframes for the state broadband deployment grant program. Once the FCC issues broadband deployment maps, NTIA will announce how much funding is available for each state and allow states to apply for funding across several rounds.

The full implantation of IIJA will take years, but our industry will see the benefits from this long-time NUCA priority for decades to come. NUCA’s government affairs department will continue to monitor the process and work to oversee its successful implementation.

For more information, check out our advocacy resources online at NUCA.com, and at NUCA.com/fixwater, where you can find state-by-state water needs assessments, White House/USDOT infrastructure fact sheets, and more information about this transformational legislation.

Zachary Perconti is a registered lobbyist for NUCA and can be reached at zack@wymanassociates.net.

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