] IIJA Funding Structure For Transportation

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Infrastructure Investment and Jobs Act Guidance; Key Takeaways for Transportation

On November 15, 2021 - President Biden signed the Infrastructure Investment and Jobs Act into law.

While some are apprehensive about how this $1.2 trillion bill will unfold, PEC offers guidance on the IIJA funding structure for cities and municipalities. In addition, we will cover many aspects of infrastructure bill from transportation to water to broadband to electricity. With over $567 billion going to discretionary and formula programs under USDOT’s jurisdiction between FY 2022 and FY 2026, the majority of funding in the bill will flow directly to state transportation departments with a significant portion reserved for new, USDOT-administered discretionary grant programs.



Under this bill, USDOT must consider recommendations from the National Committee on Uniform Traffic Control Devices (NCUTCD), a non-governmental body, when updating the manual. The language also directs USDOT to consider the protection of vulnerable road users and autonomous vehicles in its update. (Section 11135)


Complete Streets

MPOs must use 2.5 percent of their overall funding to develop and adopt complete streets policies, active transportation plans, transit access plans, transit-oriented development plans, or regional intercity rail plans. Similarly, states must reserve 2.5 percent of state planning and research funds for the same purposes. However, these policies do not have to be included in state or MPO spending plans. (Section 11206)


Vehicle Safety

This bill requires the secretary to update NCAP, hood, and bumper safety standards to consider the safety of people outside a vehicle, with an emphasis on crash avoidance technologies. (Section 24214). NACTO called for this change and further action.


NEPA Reform

The IIJA streamlines 4(f) reviews by limiting the allowable number of pages for a decision and requiring a single federal agency to be responsible for issuing a decision resulting from a NEPA review. (Section 11316)


Crash Data

The IIJA requires new crash data systems to distinguish between bicycles, electric scooters, and wheelchairs. (Section 24108)


Local Hiring

The IIJA ends prohibitions on local hiring and allows recipients of federal transportation grants to implement a local hiring preference for construction work. (Section 25019)

Safety, Equality, and Climate Goals

The IIJA creates over $150 billion worth of discretionary grant programs, giving USDOT an extraordinary opportunity to direct these new funds to projects that will advance safety, equity, and climate goals. The chart below outlines the grant programs open to cities.


Overall funding levels for core highway formula programs are:

  • $52,238,065,375 for fiscal year 2022
  • $53,237,826,683 for fiscal year 2023
  • $54,308,583,217 for fiscal year 2024
  • $55,400,754,881 for fiscal year 2025
  • $56,514,769,844 for fiscal year 2026
FTA Formula Programs


The infrastructure package contains $39 billion in new funding for transit.

This is a $10 billion decrease from the amount in the original bipartisan framework but ultimately increases funding by $19 billion (43 percent) from levels authorized under the FAST Act.

The IIJA largely continues policies enacted by the FAST Act, as the Senate Banking Committee did not put forward a new transit title this year.

Overall funding levels for core transit formula programs are as follows:


We recognize that the IIJA Funding Structure may be intimidating to many cities and municipalities, that is why we want to help guide you through this process.  There are things you can do now to get prepared and position your community to benefit from this bill.  Leverage PECs expertise, connections, and passion to energize communities to your advantage.


Infrastructure Investment and Jobs Act Guidance; Key Takeaways for Cities