Following the passage of the Infrastructure Investment and Jobs Act (“IIJA”) in November, 2021, there was a flurry of optimism related to the new funding and how it might help to support various types of projects. What was missing was any definitive guidance on how the availability of those funds would be prioritized among different types of projects. With the release of a Federal Highway Administration (“FHWA”) policy memo on December 16, 2021 (“FHWA Policy Memo”) some of that guidance began to emerge, and it is clear that new and expanded capacity projects will not be viewed very favorably in light of other identified priorities.
Recall that the IIJA (also referred to as the “Bipartisan Infrastructure Law”) provided funding for a myriad of project categories (see the list at the conclusion of this article). While the headlines referred to the IIJA as providing $1.2 trillion in available funding, it is important to note that only $550 billion constitutes “new” funding. The remaining funds are a re-authorization of $650 billion for the continuation of programs previously authorized under the Fixing America’s Surface Transportation (“FAST”) Act and other previous surface transportation bills. Nevertheless there was reason to be optimistic about $550 billion (over five years) in additional funding for projects of various types.
The FHWA Policy Memo identifies policy objectives that will guide how funds will be prioritized. The guidance notes that projects that “align” with the IIJA include those that improve the condition and safety of roadways, make streets and other transportation facilities accessible to all users and compliant with the Americans with Disabilities Act, address environmental impacts including storm-water runoff and greenhouse gas emissions, prioritize infrastructure that is less vulnerable and more resilient to climate change, advance emerging technologies like electric vehicle charging stations and renewable energy generation, promote broadband deployment in transportation rights-of-way, and which reconnect communities and reflect the inclusion of disadvantaged and under-represented groups in the project planning, design, and selection process.
New Capacity Projects
With respect to new capacity projects, the FHWA Policy Memo provides that projects that move people and freight by “modernizing and increasing the operational efficiency of existing roads and highways” will be prioritized over projects “that expand the general purpose capacity of roads and highways.” Further expanding on this concept, the FHWA Policy Memo states (emphasis added):
Consistent with this Policy, FHWA will implement policies and undertake actions to encourage—and where permitted by law, require—recipients of Federal highway funding to select projects that improve the condition and safety of existing transportation infrastructure within the right-of-way before advancing projects that add new general purpose travel lanes serving single occupancy vehicles.
Application of this Policy does not prohibit the construction of new general purpose capacity on highways or bridges, but in most cases Federal-aid highway and Federal Lands funding resources made available through the [IIJA] should be used to repair and maintain existing transportation infrastructure before making new investments in highway expansions for additional general purpose capacity.
Additionally, within the context of setting forth the policy objectives regarding new capacity, the FHWA Policy Memo offers the suggestion that State departments of transportation (“State DOTs”) should “be mindful of their ability to transfer resources to support transit projects that may be more consistent with these priorities.” It will be worth examining the receptiveness of such a suggestion because while the transfer of resources to support transit projects may be consistent with current FHWA priorities, it has historically not been the priority of many State DOTs.
Environmental Review Process
The policy and preference for other than new and expanded capacity projects is further reflected in the observations made about the environmental review process for roads and highways. The FHWA Policy Memo notes that many of the types of projects to be prioritized will typically meet the FHWA and Council on Environmental Quality criteria for categorical exclusions (“CEs”), while those requiring “more than a minor amount of right-of-way or that would result in any residential or non-residential displacements” may not be categorized as CEs. Recognizing this difference and that a more involved NEPA process will take longer than a CE, the memo states that metropolitan planning organizations, State DOTs, and other decision-makers will be “encouraged” to consider the timeline for delivering projects as they are programming funds made available under the IIJA. In other words, new and expanded capacity projects, which by their very nature require more extensive (and time-consuming) environmental reviews, are not among those that the federal policy will encourage be considered by state and local decision-makers.
Future FHWA Implementation of Policy Objectives
The extent to which FHWA intends to carry-forward the policy objectives articulated in the FHWA Policy Memo is reflected in the description of future actions anticipated to be taken. The memo refers to adopting and implementing laws and regulations, including the issuance of guidance for “legacy” programs impacted by the IIJA. Presumably this could change the criteria for existing programs like the Transportation Infrastructure Innovation and Finance Act (“TIFIA”) which has helped to support a number of major new and expanded capacity projects. Additionally, FHWA is soliciting stakeholder input on implementation of the IIJA through a request for information, published in the Federal Register on December 1, 2021.
Impacts on Texas
While there are clearly funds to be made available for transit and other beneficial projects, the general policy articulated in the FHWA Policy Memo will not be welcome news to many Texas communities. To be clear, the overall transportation funding gap in Texas includes the need for both new capacity and the need to maintain existing infrastructure, and prioritizing the use of IIJA funding for the repair, rehabilitation, reconstruction, replacement, and maintenance of existing transportation infrastructure will help in addressing those needs in Texas. However, Texas continues to be the fastest growing state in the country, and notwithstanding increases in state funding during the past decade, it continues to fall several billion dollars short each year in meeting the aggregate need for new and expanded roadways. Many communities are struggling with the need for congestion relief, including on corridors that are vital to that state and national economies. Those that were hoping the IIJA might solve the funding gap for new capacity may need to continue to look for other funding sources rather than rely on any hoped for support from the IIJA.
Infrastructure Investment and Jobs Act Funding Categories
Sign up for our newsletter and get the latest to your inbox.