On November 15, 2021, President Joe Biden signed into law the infrastructure Investment and Jobs Act. The Act will provide approximately $1.2 trillion of funding for infrastructure projects across the country with the goal of modernizing the country’s outdated transportation, utilities, and broadband systems. The funding is expected to be disbursed over a five-year period, with the majority after 2022.

The Act allocates the following amounts for infrastructure projects, with infrastructure defined loosely to capture more than the typical road and bridge projects.

• • Roads, bridges, major projects: $110 billion
  • Passenger and freight rail: $66 billion
  • Public transit: $39 billion
  • Port infrastructure: $17 billion
  • Transportation safety programs: $11 billion
  • Electric vehicle charging network: $7.5 billion
  • Zero and low-emission buses and ferries: $7.5 billion
  • Revitalization of communities: $1 billion
  • Broadband internet coverage: $65 billion
  • Airports: $25 billion
  • Power infrastructure: $73 billion
  • Clean drinking water: $55 billion
  • Resilience and Western water storage: $50 billion
  • Removal of pollution from water and soil: $21 billion

As part of the new law and based on formula funding alone, Texas is expected to receive upwards of $35 billion, allocated as follows.

• • Federal highway programs: $26.9 billion
  • Bridge replacement and repairs: $537 million
  • Public transportation: $3.3 billion
  • Electric vehicle charging network: $408 million
  • Broadband internet coverage: $100 million
  • Wildfire protection: $53 million
  • Cyberattacks protection: $42 million
  • Drinking water infrastructure (and removing lead pipes): $2.9 billion
  • Airports: $1.2 billion

One of the more intriguing debates about the Act is whether it will further stoke inflation, driving material and construction prices even higher. As written, the Act envisions most of the money will be disbursed after 2002, when some economists believe the pandemic-induced supply chain disruptions and associated price escalations will be over.  Other economists see the bill adding to near-term inflationary pressures, but through the Build Back Better and other programs funded by the bill, reducing long-term inflation.  Given the highly inflationary environment that most members of the construction industry have experienced since 2020, additional inflation, even if only in the near term, is not welcome news.

The attorneys in our Austin and Dallas offices are available to answer any of questions you may have about the Infrastructure Act or contractual provisions to protect you against material and labor price escalation.Please contact us at info@gstexlaw.com if you have any questions.

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