Federal Infrastructure Policy and Funding Update: May 5, 2022

Welcome to our inaugural Insight for our series Federal Infrastructure Policy and Funding Update. These updates serve to keep subscribers informed on the latest happenings in infrastructure policy and funding that affect the markets that we serve. And what a week to kick things off! If you are not a current subscriber, subscribe now.

Key Recent Policy and Funding Happenings

Buy America Guidance

The Office of Management and Budget issued a Memorandum directing agencies on the application of Buy America preference in federal financial assistance programs for infrastructure. The Memorandum provides guidance to federal agencies on complying with the requirements of the Infrastructure Investment and Jobs Act which stipulates that each federal agency ensure that federal funds for infrastructure support projects that only use iron, steel, manufactured products, and construction materials produced in the United States. Following this memorandum, each federal agency will develop its own implementing guidance, consistent with the infrastructure programs and processes they administer. In the coming weeks, HDR’s Advisory Services will publish a policy brief that details the changes to Buy America resulting from the IIJA and summarize OMB’s implementation guidance.

Update to National Environmental Policy Act Implementing Procedures

The White House Council on Environmental Quality issued a Final Rule, completing Phase 1 of its efforts to revamp its procedures implementing the National Environmental Policy Act. These Phase 1 changes restored requirements of NEPA analysis that the Trump administration had either eliminated or changes substantially. Specifically, the rule:

• Clarifies the requirements for developing a purpose and need statement for a proposed project, eliminating the requirement that the purpose and need be based on the goals of an applicant.
• Amends provisions in the procedures that could be construed as limiting an agency’s flexibility to develop or revise procedures to implement NEPA specific to their programs and functions.
• Revises the definition of “effect” to include direct, indirect, and cumulative effects. This revision restores the terms as they were used prior to the changes initiated by the Trump administration. Notably, the requirement to consider cumulative and indirect effects provide the basis for considering how a project may contribute to climate change.

A policy brief summarizing these changes and discussing the potential changes we might expect in CEQ’s phase 2 of updating the implementing procedures is forthcoming.

Federal Agencies Release Equity Action Plans to Advance Equity and Racial Justice Across the Federal Government

The White House announced the release of Equity Action Plans from more than 90 federal agencies, laying out more than “300 concrete strategies and commitments to address the systemic barriers in our nation’s policies and programs that hold too many underserved communities back from prosperity, dignity, and equality.” The release details key steps taken by cabinet-level agencies as part of the Equity Action Plans. Each agency’s plan is available on its departmental website. For more information about equity and environmental justice investments from the IIJA and early steps by the Biden Administration, you can read our policy brief on the topic.

Department of Transportation Issues Guidance on Implementing $6.4 Billion for Carbon Reduction Program

The IIJA created a new formula program as part of the federal-aid highway program, that allocates $6.4 billion over five years to states for funding projects that reduce carbon emissions. Funding allocations are defined by formula (see our map with totals for FY 2022). The Federal Highway Administration recently released guidance to states on the use of the Carbon Reduction Program funding. Notably, the program requires that states coordinate with metropolitan planning organizations to develop a carbon reduction strategy that supports efforts and identify projects and strategies to reduce transportation emissions. However, compared to the statewide electric vehicle plans which must be approved before states can access the EV formula funds, there is no such requirement for CRP funds and the Carbon Reduction Strategies. Additional information on the program is available in the FHWA Fact Sheet as well as in our Climate Change and Sustainability Policy Brief.

HDR Transportation Discretionary Grant Policy Brief Updated

We recently updated our Transportation Discretionary Grant Policy Brief to reflect the latest information from USDOT on the grant programs, including preliminary dates for future notices of funding opportunities.

Please bookmark our policy and funding page to access our series of Advisory Services Policy Briefs which we regularly update with deeper dives into important policy and funding topics of interest to our clients.