Number of New Public Works Construction Projects to Rise as Infrastructure Investment and Jobs Act Signed into Law

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On November 15, 2021, President Biden signed into law the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA)which reauthorizes surface transportation funds and allocates $550 billion for new federal spending over the next five years. The $550 billion in new spending encompasses:

  • $73 billion for upgrades to the country’s electricity grid, including the ability to carry renewable energy; 
  • $66 billion for new rail lines and upgrades to existing ones, including a significant investment in Amtrak to address major maintenance backlogs; 
  • $65 billion to improve the nation’s broadband infrastructure and provide high-speed internet access to hard-to-reach populations, including Native American communities;
  • $47 billion for climate resiliency, which involves new funding aimed at combating wildfires and preparing coastal regions for more frequent hurricanes and flooding;
  • $21 billion for environmental projects, which includes investments in cleaning up abandoned mines, contaminated waterways, and other polluted sites overseen by the Environmental Protection Agency;
  • $15 billion to modernize water systems to address contaminated drinking water that has affected multiple large population centers;
  • $7.5 billion for electric vehicles, including the availability of charging stations across the country, which is part of President Biden’s pledge to build 500,000 stations nationwide; and 
  • $2 billion for a grant program aimed at expanding transportation projects in rural areas.

Use of the public funds to clear backlogs at the country’s ports, which are contributing to shipping delays and price increases in imported consumer goods, have already been announced. The remaining initial set of spending authorized by the IIJA will be issued towards two concerns prioritized by the current administration: improvement to access of broadband internet and replacement of hazardous lead drinking pipes.

The passage of the IIJA provides exciting opportunities for construction industry professionals, not just in the traditional sectors of road, bridge, and rail repair and construction, but also emerging sectors such as climate resiliency and electric vehicle infrastructure. The full distribution of IIJA funds and its impact on the construction industry will only gradually be felt by the industry over the next five years, as the administration plans to focus on determining and funding “shovel-worthy” projects in addition to funding “shovel-ready” projects. Continue to tune in to the Construction Law Zone for updates on this important new law.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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