Letter to OMB Outlining IIJA Regulatory Priorities

NGA is advocating for broad flexibilities for states and territories to help maximize the impact of the projects chosen for funding.

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Acting Director Shalanda D. Young
Office of Management and Budget
New Executive Office Building
Washington, DC 20503

Dear Acting Director Young:

With the passage and signing into law of the Infrastructure Investment and Jobs Act (IIJA), states and territories have begun planning how to best leverage and deploy forthcoming federal support to maximize their infrastructure investments. As guidance and regulations are being developed that will outline how these funds will be allocated and spent, Governors urge the Office of Management and Budget, along with the respective federal agencies, to consider the following state and territorial priorities:

• Flexibility for states and territories to use IIJA funds. States and territories are best situated to identify their infrastructure needs and should be allowed maximum flexibility to use IIJA funds as required. Further, states and territories should be named as the receiving entity for federal funds and assistance whenever possible to enable consistent, comprehensive, whole- of-government infrastructure investment plans.
  
  In order to deliver on the full promise of IIJA funds and programs, states and territories should also receive flexibility to use funds to meet required state and territorial match portions.

• Immediate clarity in allowable uses and clear criteria when evaluating state and territorial infrastructure proposals. Understanding precisely how IIJA funding can be utilized is critical for states and territories when identifying which projects and initiatives should be prioritized. Additionally, the Administration should clearly communicate what criteria will be used when evaluating specific projects that require federal approval and should elevate projects supported by state and territorial governments.
  
  When appropriate, employ results-focused evaluation criteria to expand eligibility for certain programs. This approach will recognize the diversity of needs and structures of state and territorial governments, while ensuring the ultimate goals of the IIJA are met.

• Reasonable and achievable timelines for dispersing and utilizing funds along with clear reporting requirements. Additionally, reporting requirements should be streamlined across federal programs for efficiency and should not be overly cumbersome. Recipient obligations should also be consistent by creating uniform or substantially similar funding applications, processes, and reporting requirements.

• Utilizing existing programs to distribute funding. When states, territories or other units of government are not identified as the prime recipient of IIJA funds, agencies should utilize existing programs, criteria, and formulas to distribute funding to avoid additional administrative burdens. While states require flexibility to use IIJA funds, it is imperative that federal conditions for use of this money be clearly communicated. For new formula-based and discretionary programs, governors ask that the creation of these program be accompanied by guidance that includes clear criteria, a formula allocation process, and eligibility information.

• Advance notice of any changes to guidance and regulation. Governors understand that changes to guidance and regulations may be necessary as stakeholders navigate new programs. When changes are required, we ask that they be accompanied with advance notice, clarity on why changes are needed, and explanations for how recipients will be impacted.

Thank you for your consideration of these priorities. We look forward to working with our federal partners to implement these programs.