How businesses can cash in on infrastructure dollars coming to Arizona
Arizona will receive $12.8 million flowing from the $1.2 trillion Infrastructure Investment and Jobs Act (Act) to help the state recover from three major wildfires. Arizona’s water authority also recently received $18.5 million The new funding will support the creation of wastewater treatment plants, water pipelines, flood detention and filtration treatments for rural and Native American communities. The funding allocation, among the first coming to Arizona, is a clear signal for businesses to begin researching how they can provide infrastructure products and services as more federal infrastructure funding comes to Arizona.
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There are currently 132 bridges and over 3,100 miles of highway in Arizona that are in poor condition. As a result of poor infrastructure, commute times have increased by an average of 11.1 percent since 2011, and each Arizona driver pays an average of $614 per year for car maintenance associated with driving on poor roads.
Arizona will be eligible to compete with other states for $12.5 billion allocated for the Bridge Investment Program under the Act and $16 billion apportioned for economically significant infrastructure improvement projects.
Our state will be granted $200 million per year over the next five fiscal years (2022-2026) to support improvements to highways. Overall, Arizona can expect $5.3 billion over five years for highway and bridge improvements, replacements and repairs. A detailed summary of how the Act will deliver for Arizona can be found here. Transportation Secretary Pete Buttigieg announced in late March that Arizona can compete for an additional $2.9 billion in federal funds for transportation projects. The money is coming as part of the Act signed by the president last year aimed at improving the nation’s failing infrastructure, public transportation, broadband access in rural areas, electric grid, and access to clean water.
Arizona will receive roughly $1 billion to increase public transportation and electric vehicle charging options. Eight percent will be granted over the next five years to support the expansion of an electric vehicle charging network in the state, and Arizona also can apply for an additional $2.5 billion in grant funding dedicated to electric vehicle charging. While only 2.5 percent of Arizona residents own an electric vehicle, this number is expected to increase dramatically with increased Electric vehicle access and charging options. Another $903 million will be allocated to Arizona to create equitable and sustainable public transportation options.
Arizona’s airports will also benefit from the Act with the state expected to receive $348 million for infrastructure development at its airports over five years. The funding will go to improve runways, taxiways, airport-owned towers, terminal development projects and noise reduction projects. In addition, Arizona can compete for $5 billion in discretionary funding over five years to address aging infrastructure at its airports.
According to ADOT, the Act creates three new federal formula programs and several new discretionary grant programs. The inner workings of these programs are not yet known, though it’s expected that more information will be available later this year.
Competitive funding for transportation programs will require transportation agencies to submit bids for discretionary funds available from the federal government. ADOT is expected to seek guidance from federal agencies to determine which opportunities to pursue. Projects funded by new money coming from the Act will be approved by the Arizona State Transportation Board. This Board awards construction contracts and has the exclusive authority to issue revenue bonds for transportation financing. Its meetings are open to the public.
Individual states are responsible for the management of funds received from the federal government, which means that Arizona businesses that operate in sectors such as infrastructure and energy can expect an increase in projects. There is typically a lag of one to three years for projects to be planned before contract bidding begins, which allows businesses the opportunity to prepare operations and anticipate projects before they occur. The lag is critical for contractors to recruit employees to complete the projects given the nationwide labor shortage. Businesses will directly apply to state government divisions charged with managing their related federal funds.
While the specifics behind applying for grants is still unknown as of now, the three agencies that businesses and contractors should closely monitor are the Department of Transportation, Department of Energy, and the Environmental Protection Agency.
Alexis Glascock is an attorney in Fennemore’s Government Relations and Regulatory practice group and oversees Government Relations in Arizona. Reach Alexis at email@example.com.