Senate Passes $1 Trillion Infrastructure Bill and $3.5 Trillion Budget Resolution

Last Tuesday, the Senate voted 69-30 to pass a $1 trillion infrastructure bill and a $3.5 trillion budget resolution. This marks great forward progress on the Biden administration’s policy agenda, though the fate of the two measures is still to be determined by the House of Representatives. The House is expected to vote on its own budget resolution next week, though the Chamber may not vote on final passage of either measure until the fall.
 
The Senate’s bipartisan infrastructure agreement (the Senate Amendment to H.R. 3684) reauthorizes surface transportation programs for highway, safety, transit, rail, pipeline, and research activities, with an additional $550 billion in funding above the current spending baseline over the next 5 years. The legislation also includes provisions to address climate change, codify parts of a Trump-era policy to expedite environmental reviews, impose new domestic content requirements, authorize programs to enhance the electric grid and replace lead pipes, and appropriate $445.9 billion in emergency funds. Emergency funding would be appropriated immediately and be spent over the next several years, including: 
 
The bill includes provisions to address climate change, codify parts of a Trump-era policy on environmental reviews, impose domestic content requirements, authorize programs to enhance the electric grid and replace lead pipes, and appropriate $445.9 billion in emergency funds. Emergency funding would be appropriated immediately and includes:
 

• $27.5 billion to repair and replace bridges, with a separate $9.24 billion for the Bridge Investment Program
• $10.3 billion for Transit Infrastructure Grants
• $5 billion for states to deploy electric vehicle charging infrastructure and a data-sharing network. The measure would establish a joint office for the Energy and Transportation departments to coordinate their work on EV infrastructure, which would include new installation and interoperability standards.  

Some key details of the bill are provided below:
 
Transportation Infrastructure Highlights:

• ARPA-I: An “Advanced Research Projects Agency-Infrastructure” would be established within the Transportation Department. It would support research projects that develop innovative solutions to reduce long-term costs of infrastructure development, mitigate transportation’s lifecycle effects on the environment—such  as greenhouse gas emissions—and  promote resilience from physical and cyber threats. The measure would authorize “such sums as are necessary” for ARPA-I.
• Smart Transportation: The measure would authorize a total of $500 million over five years for the Strengthening Mobility and Revolutionizing Transportation (SMART) Grant Program. This program would support demonstration projects on smart technologies that improve transportation efficiency and safety, such as autonomous vehicles and smart grids to support electric vehicles.
• Pipeline Safety: $345 million allocated over five years for the Pipeline and Hazardous Materials Safety Administration’s hazardous material safety programs. An additional $1 billion in emergency appropriations is included for PHMSA grants to upgrade natural gas distribution pipelines.
• Infrastructure Regulatory Reform: The bill would codify elements of the Trump administration’s “one federal decision” policy that required agencies to coordinate reviews and authorization decisions for major infrastructure projects. It also set a goal for completing environmental reviews within two years.  

Energy Infrastructure Highlights:

• Grid Resilience: The bill would authorize $5 billion over five years for grants to stakeholders in the electricity generation and distribution sector to supplement their own efforts to improve resiliency to disruptive events including natural disasters.
• Carbon Reduction: The measure would allocate $6.42 billion over five years from federal-aid highway funds for a new program to reduce transportation-related carbon emissions. Eligible projects would include truck stop electrification systems, trail facilities for pedestrians and bicyclists, congestion management technologies, intelligent transportation system capital improvements, energy-efficient alternatives to streetlights, electric vehicle charging infrastructure, and port electrification.
• Carbon Capture: $3.5 billion is authorized over five years for Energy Department financial support for projects that help develop four regional hubs to capture carbon dioxide from the atmosphere and transport, store, and use it. The measure would create a “carbon dioxide transportation infrastructure finance and innovation” (CIFIA) program to leverage federal funding to make loan guarantees and secured loans supporting large projects for infrastructure to transport carbon dioxide. It would authorize $600 million per year in fiscal years 2022 and 2023 and $300 million annually afterward through fiscal year 2026.
• Batteries: The bill would authorize $3 billion over five years for grants through the Energy Department’s Office of Fossil Energy for demonstration projects to process battery materials and for constructing or retrofitting processing facilities. The bill would also mandate that the Energy Department conduct a “Study of Codes and Standards for use of Energy Storage Systems Across Sectors” to identify barriers, foster collaboration, and increase conformity across sectors, as well as create a catalog of energy storage standards and receive input from stakeholders regard existing/new/revised energy storage codes and standards. 
• Hydrogen: $8 billion allocated over five years to support hydrogen fuel production from different sources, use of hydrogen for electricity and industrial processes, and hydrogen fuel transportation. The Energy Department would establish at least four regional clean hydrogen hubs that locate clean hydrogen producers, users, and transport infrastructure near one another. The measure would also authorize $1 billion over five years for a research, demonstration, and commercialization program aimed at reducing the cost of hydrogen produced from electrolysis to less than $2 per kilogram of hydrogen by 2026.
• Nuclear Industry Support Program: The bill would authorize $6 billion from fiscal year 2022 through 2026 for an Energy Department civil nuclear credit program to support reactors projected to cease operations because of economic factors. Credits would be provided for a commitment to generate a specific amount of power over a four-year period. No credits could be issued after Sept. 30, 2031. 

Miscellaneous Highlights:

• Broadband: The bill would authorize $42.5 billion for a Broadband Equity, Access, and Deployment Program within the Commerce Department that would provide grants to increase connectivity to underserved and high-cost areas.
• Cybersecurity Grants: The measure would authorize $1 billion from fiscal year 2022 through 2025 to create a grant program to help states and tribal governments address cybersecurity threats. DHS could also award grants to multistate or tribal government groups.
• Buy America Preference: The bill would require the iron, steel, manufactured products, and construction materials used in infrastructure projects to be produced in the U.S. Cement and aggregates such as stone, sand, and gravel would not be covered. Permit waivers to the “Buy America” preference would be allowed, including if there were insufficient supplies or if meeting the requirement would increase costs by more than 25%; the bill would require publication of any waivers on a publicly available website and require review of waivers every five years for waivers granted 180 days before the legislation’s enactment. OMB would be directed to establish the “Made in America Office” to enforce compliance with domestic content statutes, review waiver requests, review reciprocal defense agreements with foreign governments, and report the percentage of federal procurements made in the U.S.