MA

Infrastructure Bill: $42 Billion Proposed for Air and Sea Ports

Published: September 10, 2021

SLED Market AnalysisAdministration TransitionArchitecture Engineering and ConstructionUSACEFAAInfrastructureTransportationTransportation

If signed into law, H.R. 3684 would make significant investments in rebuilding and modernizing America’s air and sea ports.

The $1.2 trillion infrastructure bill, known as the Infrastructure Investment and Jobs Act, narrowly passed the Senate in August and is currently under review in the House. A high-level breakdown of the bill’s spending can be found here. Out of the $1.2 trillion, only $566 billion represents new spending. Included in that new spending is $42 billion for air and sea ports, which can be further broken down into:

  • $25B for airports. This allocation provides funding for major upgrades and expansions at U.S. airports.
  • $17B for seaports. Half of the funds in this category would go to the Army Corps of Engineers for port infrastructure. Additional funds would go to the Coast Guard, ferry terminals, and reduction of truck emissions at ports.

Airports

Out of the $25 billion set aside for airports, the most notable provisions include:

  • $15B for airport infrastructure grants, including:
    • $5B for airport terminal projects
    • $2.48B for primary airports
    • $500M for non-primary and general aviation airports
    • $20M to construct, rehabilitate, or relocate contract towers
  • $5B for upgrades to air traffic control towers and systems
  • $5B for FAA facilities and equipment expenses

Infrastructure grants will support the government’s Airport Improvement Program, which helps airports pay for projects intended to improve safety, boost airport capacity, and address environmental concerns. The $15 billion will be distributed over five years, at a rate of $3 billion annually. Funding can be used for any Passenger Facility Charge eligible projects except debt service payments, and local matching will apply. Money for contract towers will be disbursed through competitive grants, but no local matching will apply. For this program, the Federal Aviation Administration (FAA) will prioritize projects that enhance aviation safety and improve air traffic efficiency.

The $5 billion for airport terminals will be distributed through competitive grants at a rate of $1 billion per year over five years. 55 percent of the grants are required to be distributed to large hub airports, 20 percent to small hubs, 15 percent to medium hubs, and 10 percent to non-primary airports. Eligible projects include terminal development projects and projects for relocating, reconstructing, repairing, or improving air traffic control towers and on-airport rail projects. There will be an 80 percent federal share for medium and large hubs and a 95 percent federal share for small airports. These grants are designed to finance innovative changes to America’s airports that will help bring them in line with their competitors. One example is by enhancing multi-modal connections for affordable, convenient, car-free access to air travel.

In terms of FAA facilities and equipment expenses, the $5 billion will be disbursed over five years at a rate of $1 billion per year. Out of this money, $200 million is reserved for airports that participate in the Contract Tower Program to upgrade aging FAA-owned air traffic control facilities.

While the bill is not yet set in stone, airports across the country are already preparing to receive their cut of the funds after nearly two years of COVID-19 decimating the airline industry. According to initial numbers from the White House, airports in Arizona would get an estimated $348 million over five years, including $31.7 million for Tucson International Airport and $217 million for Phoenix Sky Harbor International Airport. Similarly, airports in South Carolina would receive about $161 million to make improvements over the next five years.

Seaports

Of the $17B allocated to seaports, major spending includes:

  • $5.15B for port and inland waterway navigational projects
  • $4B for operations and maintenance
  • $2.25B for the Port Infrastructure Development Program
  • $400M in new grants for ports to reduce truck emissions
  • $25M for marine highways plied by container-on-barge service

The White House is focused on reducing congestion in America’s ports and hopes this money will help to achieve its goal. Recently, it established the Biden-Harris Administration Supply Chain Disruptions Task Force, as well as appointing a “port envoy.” These actions are intended to bolster the $17 billion included in the bill. Over time, the funding will help chip away at delays by clearing maintenance backlogs and helping ports improve their basic infrastructure.

Typically, the Army Corps of Engineers receives about $6 to $7 billion annually, so the $17 billion investment in the current legislation represents more than double what it usually gets to complete much-needed projects. Specifically, the Port Infrastructure Development Program is a competitive grant program that supports projects to improve port capacity and operations.

The Ports Association of Louisiana is already planning to put its funds towards several ports throughout the state, including the Port of Lake Charles. The state would like to address dredging and construction needs there as a result of damage from last year’s devastating hurricanes.

There is also the opportunity for ports and inland waterways to tap funding through other projects that are not just open to port applicants. There’s some $16.7 billion in funding through programs giving awards toward rail improvements and flood mitigation projects that could be tapped in addition to the port-specific programs.

For more information about the infrastructure bill, please continue to monitor GovWin’s Administration Transition Resource Center.