The U.S. House of Representatives on July 1, 2020, passed a long-awaited infrastructure package – H.R. 2, the Investing in a New Vision for the Environment and Surface Transportation in America Act (INVEST in America Act) – by a party line vote of 233-188. Democrats released details of the package just a week prior on June 23, 2020.
The 2,300-page bill, comprising a $1.5 trillion total investment, includes climate-oriented infrastructure proposals developed by the Transportation and Infrastructure Committee, as well as the powerful Energy and Commerce and Ways and Means committees. Outlined earlier this year in the release of the Moving Forward Framework, the package lays forth a vision for important Democratic infrastructure priorities, including transportation infrastructure, clean energy initiatives, grid modernization, broadband deployment, clean water standards, among others.
Driving progress on the legislation is the impending Sept. 30, 2020, expiration of the current federal five-year surface transportation program authorized by the 2015 Fixing America's Surface
Transportation Act (FAST Act). The surface transportation section of outlines Democrats' vision for a climate-oriented reauthorization for highway, transit, aviation and rail transportation for the next halfdecade. Both the House and Senate have expressed a desire to pass a reauthorization for these U.S. Department of Transportation (DOT) programs in particular by the Sept. 30 deadline, though the truncated 2020 congressional session resulting from the COVID-19 pandemic has significantly cut down on the time to negotiate a bipartisan agreement prior to the 2020 elections.
The package's provisions particularly notable for the energy sector are outlined below:
- Invests in energy storage research and development, including establishing a funding program for demonstration projects
- Directs DOT to develop an annual report ranking states by their carbon emissions reductions
- Requires all federal facilities to improve energy efficiency by 2.5 percent annually
- Directs the Federal Energy Regulatory Commission (FERC) to begin a rulemaking to increase construction of interstate transmission lines
- Invests more than $1 billion in solar for low-income communities
- Expands the range of eligible technologies under the U.S. Department of Energy's (DOE) Section 1703 Loan Guarantee Program, and prevents DOE from charging closing fees if a decision takes longer than 270 days
ELECTRIC VEHICLES (EV)
- Lifts the manufacturer cap on electric vehicles from 200,000 to 600,000 cars per manufacturer, and extends the life of the credit prior to phasedown
- Establishes a $100 million rebate program for installation of publicly accessible electric vehicle infrastructure
- Requires states to consider measures to support EV charging infrastructure deployment, authorizing utilities to recover capital investments in equipment, and to allow entities other than utilities to sell electricity to the public through charging stations
- Extends the 30 percent investment tax credit (ITC) for solar projects through 2025 and gradually phases the incentive down to 10 percent by 2028; expands the provision to include energy storage, biogas and waste energy recovery
- Extends the production tax credit (PTC) though 2025 for a range of incentives, including biomass, hydropower, geothermal and wind
- Extends the Section 45Q tax credit for carbon capture and sequestration projects, which has bipartisan support, through 2025
While the House moved swiftly to pass the legislation on the House floor prior to its July 4 recess, its ultimate fate is all but certainly more fraught. Developed without consultation from Republicans and pushed through quickly and without committee consideration, Republicans have denounced the proposal as a Democratic wish list developed in a vacuum. Furthermore, conspicuously absent from the legislation as introduced is a pay-for mechanism.
Among the provisions considered nonstarters by Republicans are the significant restrictions placed on
DOT's loan- and grant-making authority. Federal funding for surface transportation projects across DOT's programs would be limited to projects that reduce greenhouse gas emissions, and the legislation would prohibit funding for highway expansion projects unless they reduce single occupant vehicle trips and improve mobility. DOT would also be charged with developing an annual report ranking states by their carbon emissions reductions, tying permission to utilize federal funds for transportation projects to these rankings.
The Senate Environment and Public Works Committee considered and passed out of committee a package authorizing the highway portion of surface transportation reauthorization in July, 2019 . S. 2302 – America's Transportation Infrastructure Act of 2019 – passed out of committee with unanimous support from the 21 sitting members. While broadly supported, the measure did not address climate priorities favored by Democrats, noticeably omitting any provisions to support electric vehicle deployment – a top priority for climate progressives and one of the anticipated sticking points in final conference negotiations.
The Senate's legislative package is expected in the coming months outlining markedly different priorities. However, Congress is not currently in a position to pass a complete bill by the Sept. 30, 2020, deadline, and will likely turn to a temporary continuation of its existing surface transportation authorities to tide over the agencies until further negotiations and forward action of this legislation can take place. Expectations are that a comprehensive infrastructure bill is not in the cards prior to the 2020 elections
or during the upcoming lame-duck session, but could be sometime in the 117th Congress, especially depending on the outcomes of the 2020 election.
HOLLAND & KNIGHT INSIGHTS
Overall, the movement on this bill is noteworthy to the broader clean energy community, as this is the first infrastructure package passed by the full House with a significant focus on climate and clean energy deployment. Although the legislation is not likely to move prior to the end of the 116th Congress, it is positioned to be the foundation for "stimulus" discussions moving forward.
After the start of the 117th Congress in January, the legislative slate will wipe clean and the House will need to reintroduce and repass the bill, opening the door for changes to the initial package. Indeed, this legislation essentially serves as an opening gambit for negotiations with the Senate, which is expected to favor a more bipartisan proposal that can garner the 60 votes necessary for passage.
Accordingly, this legislation serves as an entrée for the energy and clean technology community to work with both chambers of Congress to advance clean technology policy solutions.
Originally published 22 July, 2020
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