Federal Infrastructure Policy and Funding Update: Week of July 11, 2022

We hope everyone reading this had a safe and fun holiday weekend. Due to several factors (including the holiday) we took last week off but apparently the federal government did not! 

We had groundbreaking rulings from the Supreme Court on the Environmental Protection Agency’s authority to regulate greenhouse gases, the Department of Transportation announced multiple funding programs, including one of the most highly anticipated programs to prioritize restorative justice projects, NOAA announced nearly $3 billion in funding and DOE asked for public comment on how it should spend its billions. An exciting couple of weeks! As you’ll see, DOT has been very busy, and it can be hard to keep track of all of the various programs — but you’re in luck! The USDOT has created a useful page that lists the significant funding programs authorized and appropriated by the IIJA that you may find helpful.

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Key Recent Policy and Funding Happenings 

• Reconnecting Communities NOFO
  • Thriving Communities
• Railroad Crossing Elimination Program NOFO
• Ferry Program NOFO
• Supreme Court Decision on EPA’s Enforcement of GHG Emissions
• FHWA Publishes Notice of Proposed Rulemaking to Establish GHG Emissions Performance Standards
• Department of Energy Seeks Input on $500 Million Program to Transform Former Mines into Clean Energy Hubs
• USDOT Announces $1 Billion in Airport Terminal Improvements
• Department of Commerce Announces Nearly $3 Billion in Climate and Coastal Resilient Projects

USDOT Invites Applications for Reconnecting Communities Pilot Program and Launches Thriving Communities Initiative 

The Reconnecting Communities Pilot Program (RCP), with $1 billion over five years and $195 million for fiscal year 2022, provides funding to “help reconnect communities that were previously cut off from economic opportunities by transportation infrastructure.” USDOT’s press release describes reconnecting a community as potentially “adapting existing infrastructure — such as building a pedestrian walkway over or under and existing highway — to better connect neighborhoods to opportunities or better means of access such as crosswalks and redesigned intersections.” This is slightly softer messaging than we’ve seen previously where reconnecting meant tearing down or capping freeways that bisect communities. This softening speaks to the diversity of projects that USDOT is likely to fund under this program.

The Notice of Funding Opportunity states that the primary goal of the program is to “reconnect communities harmed by transportation infrastructure, through community supported planning activities and capital construction projects that are championed by those communities.” Note the emphasis on “community supported” and being “championed by those communities” as primary goals — meaning that coalitions of support will be critical when applying for these funds. There is additional language describing the RCP’s goals and objectives worth noting:  

The RCP Program seeks to redress the legacy of harm caused by transportation infrastructure, including barriers to opportunity, displacement, damage to the environment and public health, limited access, and other hardships. In pursuit of this goal, the program will support and engage economically disadvantaged communities to increase affordable, accessible, and multimodal access to daily destinations like jobs, healthcare, grocery stores, schools, places of worship, recreation, and park space. 

The RCP provides two different types of grants: 

Planning grants that fund the study of removing, retrofitting, or mitigating an existing facility to restore community connectivity; to conduct public engagement; and other transportation planning activities. $50 million is available for planning grants with grant awards likely ranging from $100,000 to $2 million. Planning grants require a local match of at least 20% of total project cost but importantly, that 20% may come from in-kind or cash contributions, provided they meet federal requirements. 

Eligible applicants are: 

1. State 
2. Unit of Local Government 
3. Federally recognized Tribal government 
4. Metropolitan Planning Organization 
5. Non-Profit Organization 

Capital Construction Grants are to carry out a project to remove, retrofit, mitigate, or replace an existing eligible facility with a new facility that reconnects communities. $145 million is available for capital construction grants with grant awards likely ranging from $5 million to $100 million. Recipients of construction grants must provide at least a 20% local match and the RCP funding cannot exceed 50% of the total project cost. The remaining 30% can be provided by leveraging other federal funding sources (i.e., federal formula dollars, other grants, etc.) or from cash or other in-kind contributions. 

Eligible applicants for construction grants must be the owner of the eligible facility and may submit a joint application with any of the eligible entities listed for planning grants. 

Both planning and construction grants will be evaluated against the following merit criteria: 

• Equity, Environmental Justice, and Community Engagement 
• Mobility and Community Connectivity 
• Community-based Stewardship, Management and Partnerships 
• Equitable Development and Shared Prosperity 

Applications are due by 11:59 p.m. Eastern Time on Thursday, October 13, 2022. 

HDR is preparing a grant summary that provides more information that will be available on our Recent Federal Infrastructure Policy & Funding Updates page.

Thriving Communities

With the announcement of the RCP, USDOT also unveiled a new program “to provide technical assistance and capacity building resources to improve and foster thriving communities through transportation improvements.”  The aptly named Thriving Communities Program will support communities with “planning and project development of transformative infrastructure projects that increase affordable transportation options; enhance economic opportunity, reduce environmental burdens, improve access and quality of life, and provide other benefits to disadvantaged communities.” 

As part of the Thriving Communities Program, USDOT will issue a notice of funding opportunity this fall with $25 million available for technical assistance. The Department of Housing and Urban Development also will issue a NOFO for $5 million for technical assistance complimentary of DOT’s technical assistance, linking housing and transportation investments — reminiscent of the Partnership for Sustainable Communities established during the Obama administration. More to come on this program and we’ll update as appropriate as it matures. 

FRA Publishes NOFO for Railroad Crossing Elimination Program 

The FRA published a NOFO, opening up the application window for $573 million in funding to support highway-rail or pathway-rail grade crossing improvement projects that focus on improving the safety and mobility of people and goods. The Railroad Crossing Elimination Program seeks to improve “American rail infrastructure, enhance rail safety, improve the health and safety of communities, eliminate highway-rail and pathway-rail grade crossings that are frequently blocked by trains, and reduce the impacts of freight movement and railroad operations may have on underserved communities.” 

Notably, in addition to improving safety, the NOFO states that “FRA seeks to fund projects … that reduce greenhouse gas emissions and are designed with specific elements to address climate change impacts — particularly those projects that align with the President’s greenhouse gas reduction goals (i.e., net zero by 2050). 

The program provides funding for certain set-asides and other funding requirements: 

• Planning projects — at least $18 million is set aside for planning projects and of that amount, $4.5 million is dedicated to rural areas and tribal lands. 
• Rural or Tribal set aside — at least $114 million is set-aside to support projects located in rural areas or on Tribal Lands. Of that amount, nearly $6 million is set-aside for projects in counties with 20 or fewer residents per square mile. 
• No more than $114 million may be awarded for projects in a single state.
• Minimum grant awards for capital projects is $1 million, the NOFO does not stipulate a minimum award for planning grants.
• Minimum 20% local match comprised of public sector (state or local) or private sector funding. 

Eligible applicants include: 

• State and territories, including the District of Columbia 
• Political subdivision of a state 
• Federally recognized Indian Tribe 
• Unit of local government or a group of local governments 
• A public port authority 
• Metropolitan Planning Organization 
• A group of entities comprised of any of the organizations listed above

Eligible projects include: 

• Grade separation or closure, including through the use of a bridge, embankment, tunnel, or combination thereof 
• Track relocation 
• Improvement or installation of protective devices, signals, signs, or other measures to improve safety 
• Other means to improve the safety and mobility of people and goods at highway-rail grade crossings 
• A group of projects from the types listed above 
• Planning, environmental review, and design of eligible projects listed above 

Applications for the program are due not later than 5 p.m. Eastern Time, October 4, 2022. 

HDR is preparing a grant summary that provides more information that will be available on our Recent Federal Infrastructure Policy & Funding Updates page.

FTA Announces Ferry Funding  

Yet another USDOT NOFO, this time by FTA, combining three separate ferry funding programs authorized by the IIJA: 

FTA's Ferry Service for Rural Communities Program, a new program that provides competitive funding to states to ensure basic essential ferry service is provided to rural areas. For Fiscal Year 2022, $209 million is available. 

FTA's Electric or Low-Emitting Ferry Pilot Program, a new program that provides competitive funding for electric or low-emitting ferries and associated infrastructure that reduce greenhouse gas emissions by using alternative fuels or on-board energy storage systems. For Fiscal Year 2022, $49 million is available. 

FTA's Passenger Ferry Grant Program, which funds capital projects that support existing passenger ferry service, establish new ferry service, and repair and modernize ferry boats, terminals, and related facilities and equipment in urbanized areas. For Fiscal Year 2022, $36.5 million is available and of that, $3.25 million is set aside to support low or zero-emission ferries. 

Proposals for the FTA Ferry programs are due by 11:59 p.m. Eastern Time on September 6, 2022. 

Supreme Court Curbs EPA’s Ability to Enforce Emissions Under Clean Air Act 

On June 30, the United States Supreme Court issued its opinion in West Virginia v. EPA. At a macro scale this Court’s decision requires agencies to “point to clear congressional authorization” to make broad policy-based rules. For the purposes of greenhouse gas regulation, EPA’s authority to make the sweeping changes proposed in the Clean Power Plan were significantly constrained. 

The primary holding in the case was that Congress did not grant EPA the authority to devise emission caps based on the generational approach in the Clean Power Plan and that separation of powers principles in the Constitution require that an agency must point to “clear congressional authorization to make “decisions of vast economic and political significance.” As such, the primary question was whether Congress intended to confer the power EPA claimed in imposing the CPP rules on the Power industry. The majority on the Court determined that the EPA’s actions were broader than Congress intended, in that the CPP rule was not about pollution control but shifting the power industry to renewables and clean energy. 

As a practical matter, the power sector had in many cases outpaced the CPP because of the initial push that it caused, shifting to natural gas and renewables. In many cases, power companies had already either shuttered coal plants, or made plans to shift to natural gas in anticipation of the CPP. 

The case will push the EPA to find existing authority to regulate greenhouse gas emissions. Types of measures opened by the court include on-site measures. This might mean that they EPA could evaluate requirements additional requirements for carbon capture and sequestration or tie greenhouse gas reductions to other rules where the reductions are part of control or incentive requirements. 

FHWA Publishes Notice of Proposed Rulemaking to Measure GHG Reductions on National Highway System

Without a hint of irony considering the previous entry, the Federal Highway Administration issued a Notice of Proposed Rulemaking to require state departments of transportation and metropolitan planning organizations to establish “declining CO2 emissions targets to reduce CO2 emissions generated by on-road mobile sources.”  In other words, the FHWA is proposing a greenhouse gas (GHG) emissions reduction measure as a National Highway Performance Program performance measure (23 CFR Part 490). The proposed rule would require state DOTs to establish 2- and 4-year emissions reduction targets, and MPOs would establish 4-year emissions reduction targets, all working towards the goal of net-zero emissions economy-wide by 2050 (see EO 13990 and EO 14008). The proposed rule would require state DOTs and MPOs to set declining targets for reducing tailpipe emissions on the National Highway System. The proposed rule would allow for flexibility to set targets consistent with a state DOT or MPOs respective climate change policies, provided that those policies are consistent with the goal of net-zero by 2050. 

In announcing the rule, FHWA refers the “more than $27 billion in federal funding to help State Departments of Transportation and Metropolitan Planning Organizations meet their declining GHG targets.” It is an interesting two-step approach by making available funding through the various programs authorized by the IIJA, each with their own unique eligibilities for project expenses and then following up with performance measures to confirm that states are using the funds as Congress intended — to reduce GHG emissions. 

The proposed rule links GHG reductions to the national goal of “environmental sustainability” established by Congress at 23 U.S.C. 150(b). Considering the Supreme Court’s decision in West Virginia v. EPA discussed in the previous entry, it will be interesting to see the comments provided on this rule and how FHWA and USDOT decide to respond before finalizing the rule. It seems like a logical connection to link environmental sustainability as a goal with a performance target associated with reducing GHG emissions, but we shall see!  Look for a more comprehensive breakdown of this proposed rulemaking in future updates. 

DOE Seeks Input on $500 Million Program to Transform Mines Into New Clean Energy Hubs 

The Department of Energy announced a Request For information (RFI) seeking public comment on a $500 million program to place clean energy demonstration projects on current or former mine lands. The Clean Energy Demonstrations on Current and Former Mine Land Program (editorial comment – this needs a better name!) “will fund clean energy projects — such as geothermal energy — on mine land to benefit communities and their economies, create good paying jobs and reduce carbon pollution.”  Note – the link on DOE’s site for the full RFI appears corrupted at the moment. Will update if it gets fixed. 

DOE Seeks Public Comment on Hydroelectric Incentive Program 

DOE published another RFI seeking public comment on the Hydroelectric Incentive Programs created by the Energy Policy Act of 2005 and amended by the Infrastructure Investment and Jobs Act. Comments are due no later than September 6, 2022, but interestingly, DOE is offering respondents the opportunity to request a 30-minute unrecorded discussion with staff regarding the content of their responses to the RFI questions. Request for Information (RFI) #DE-FOA-0002762  

$1 Billion Announced for Airport Terminal Improvements 

The White House announced nearly $1 billion in funding for 85 airports across the country to improve terminals of all sizes. The grants expand terminal capacity, increase energy efficiency, promote competition and provide greater accessibility for individuals with disabilities. The FAA has a data visualization site that summarizes the projects awarded under the program. 

Department of Commerce Announces $2.96 Billion in Coastal and Climate Resiliency Funding 

The National Oceanic and Atmospheric Administration (NOAA) as part of the Department of Commerce, announced funding opportunities under three different programs “to address the climate crisis and strengthen coastal resilience and infrastructure.” From the announcement: 

• Climate Ready Coasts will help coastal communities build the future they want to see, investing in natural infrastructure projects that build coastal resilience, create jobs, store carbon, remove marine debris, and restore habitat. ($1.467 billion over five years)
• Climate Data and Services will support a whole-of-government effort to address the climate crisis by getting critical information and tools in the hands of decision-makers, particularly to address floods, wildfire, drought, and ocean health. ($904 million over five years)
• Fisheries and Protected Resources will advance efforts to restore important fisheries habitat and promote community economic development. ($592 million over five years)

A useful tool to review federal programs that support nature-based resiliency projects is the “Compendium of Federal Nature-Based Resources for Coastal Communities, State, Tribes and Territories” issued in April 2022 by the White House Coastal Resilience Interagency Working Group.