Some of Cherry Bekaert’s top leaders were recently invited to speak to members of the Latin Builders Association (LBA) in South Florida, presenting key details about the Infrastructure Investment & Jobs Act (“IIJA” or the “Infrastructure Bill”) and available funding for businesses. Marisol Torres-Gomez, Partner with Cherry Bekaert and an Executive Director with LBA, moderated the panel discussion with Ron Wainwright, Partner of Strategic Tax Advisory with our Tax Credits and Incentives Advisory Practice, and Nita Sanger, Director of Digital Advisory. The panelists provided action steps businesses should take as they request funding from states.
Overview of IIJA
On November 15, 2021, President Biden signed the IIJA into law, the largest federal investment infrastructure bill in United States history. The $1.2 trillion package includes a five-year allocation of $550 billion in federal investments in America’s infrastructure that will have major impacts on construction and real estate deals across the country. Below are a few of the highlights from our conversation at the LBA Breakfast & Panel Discussion that took place on June 1, 2022.
Programs to Watch
The Infrastructure Bill is classified into 12 programs. The programs with the most impact on LBA member businesses and others within the construction space may include:
- Repairs of roads, bridges & major projects,
- Repairs to public transportation infrastructure,
- Maintenance and upgrades of passenger & freight rails,
- Repairs to airports, ports & waterways,
- Investment of water quality infrastructure and eliminate lead service pipes, and
- Expanding a larger network of electric vehicle (EV) chargers.
Allocation of Funds
Funding from the programs will be distributed to the states, which will then allocate it to the various counties. Each county will need to provide a proposal on how they anticipate utilizing the IIJA funds. As companies gather proposals to present to the counties, they should consider forming strategic alliances with other specialized businesses, that provide adjacent services to create a competitive advantage.
Estimates of the state allocations have been developed for $425.8 billion of the IIJA’s funds. This includes the Federal-Aid Highway Program (both old and new money) and some of the other new funding.
The following is a summary of Florida’s $19.1 billion (of the $425 billion) share of these funds.
Florida Specific Allocation of Funds under IIJA
Transportation
Florida will receive an estimated $16.1 billion in transportation funding from the IIJA, including $13.1 billion in traditional formula-driven federal aid, an approximate $3 billion increase
over the FAST Act. This includes ongoing funding for roads, bridges, and transit. Florida will also receive an additional $2.6 billion for transit, $245 million for bridges, and $198 million for electric vehicle (EV) charging stations.
Florida can compete for an additional $31 billion in grants for bridges ($12.5 billion), transportation projects which will provide substantial economic benefits to communities ($16.0 billion), and EV charging stations ($2.5 billion).
Broadband
The bill provides $42.5 billion to expand broadband deployment to rural and other underserved areas. Florida will receive the base allocation of $100 million (same as all states). How the other $37.5 billion will be distributed is yet to be determined. The White House estimates this can provide access to at least 707,000 Floridians who currently lack it. There is another $3.7 billion in competitive grants available.
In addition, an estimated 6.5 million Floridians (30 percent) will be eligible for the Affordability Connectivity Benefit (ACB), which will help low-income families afford internet access by providing a $30 per month subsidy for families at or below 200 percent of the federal poverty line.
Water Infrastructure
In an effort to provide clean drinking water to every American and eliminate the nation’s lead service lines and pipes, the IIJA provides $40.6 billion to the states. Florida is expected to receive $1.6 million.
Resiliency
Florida is allocated $29 million to protect against cyber-attacks and $26 million to protect against wildfires. Florida could also receive some of the $3.5 billion the IIJA provides for weatherization.
Airports
Florida is allocated $1.2 billion for airport improvements, with most of it distributed by formula to primary airports. General aviation and commercial service airports will also receive funds.
An additional $5 billion is available to states through competitive grants, focusing on on-airport rail access and control towers.
Considerations for Construction Companies
Companies should consider investing in technologies and how to automate proposals with IIJA competency to give an extra edge and show how they will help position the state/county to be future-ready, (i.e., smart cities, roads, etc.). Companies will need to evaluate their business by conducting a strategic analysis for a potential increase in awarded work prior to funding allocation. Business areas to examine include ways to bolster recruiting efforts to combat workforce shortage impacts, mitigating supply chain issues, and financing to be able to pay for materials and additional personnel. These considerations may cause businesses to think about different ways of operating.
Prepare Your Business Today
Whether you are new to working on federally funded projects or have questions about how some changes could impact your business, the time to prepare and be proactive is now. Our professionals at Cherry Bekaert are here to guide you forward.
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