New Federal Program Provides Grants for Eligible P3 Transportation Projects

The Build America Bureau (Bureau) of the U.S. Department of Transportation (DOT) released on March 11, 2024, a Notice of Funding Opportunity for the new Innovative Finance and Asset Concession Grant Program (IFACGP).

The IFACGP is authorized by the Bipartisan Infrastructure Law that was passed by Congress and signed into law on Nov. 15, 2021. The Bipartisan Infrastructure Law establishes the funding for Federal Transit Administration (FTA) programs through authorizing legislation that amends Chapter 53 of Title 49 of the U.S. Code. The legislation reauthorizes surface transportation programs for fiscal years (FY) 2022 to 2026 and provides advance appropriations for certain programs. The Bipartisan Infrastructure Law also authorizes up to $108 billion to support federal public transportation programs, including $91 billion in guaranteed funding.

What Is the IFACGP?

The IFACGP is a unique opportunity for eligible public entities to receive financial support to facilitate and evaluate public-private partnerships (P3s) and explore opportunities for innovative financing and delivery of eligible transportation infrastructure projects.

The IFACGP totals $100 million over five years. The first round of funding is $57.7 million. A maximum of $2 million can be awarded to each winning grant proposal. No more than $4 million can be given to grantees in a single state. There is no local match requirement for the first $1 million of funding awarded to a grantee; however, there is a matching requirement of 50 percent for grants in excess of $1 million.

Applications are due by 11:59 p.m. EST on May 10, 2024. Funds are awarded on a competitive basis.

Who Is Eligible to Apply?

Eligible entities include state and local governments and agencies, special purpose public authorities and Native American tribal governments and agencies that own, control or maintain eligible assets or undertake activities that would reasonably be deemed eligible to receive a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan through the Bureau.

Eligible assets and activities include those related to highways, transit, passenger rail, certain freight facilities, certain port projects, rural infrastructure projects, airports and transit-oriented developments.

What Grants Are Available?

Applicants must select one of two grant types to apply for in the first round of funding:

• Technical Assistance Grants. These grants are available to build organizational capacity and advance a portfolio of assets for preconstruction tasks that consider innovative finance and delivery such as:
  • asset scans, including assessments of multiple assets
  • soliciting and negotiating asset concessions, including hiring staff in public agencies, and evaluating options for the structure and use of asset concession payments
  • conducting a value-for-money or comparable analysis to evaluate the comparative benefits of asset concessions and public debt or other procurement methods
  • identifying best practices to protect the public interest and priorities and for managing transportation demand and mobility along a corridor
  • integrating and coordinating pricing, data and fare collection with other regional operators that exist or may be developed
• Expert Services Grants. These grants are available to enable recipients to hire experts and professionals to develop and deliver P3s in connection with the development of a specific asset such as:
  • project planning, feasibility studies, revenue forecasting, economic assessments and cost-benefit analysis, public benefit studies and value-for-money analyses
  • financial and legal planning, including exploring opportunities for leverage
  • assessment of permitting, environmental review and regulatory processes and costs
  • impact analysis of existing asset development on issues in the public interest
  • assistance with entering into an asset concession arrangement

Conclusion

The IFACGP can provide an alternative or additional funding source that public entities and the private sector can use in evaluating and developing innovative transportation projects.

More information about the IFACGP can be found on the Bureau's website.

Holland & Knight attorneys are available to assist public and private entities in understanding and applying for IFACGP grants and TIFIA loans. For more information, contact Michael Wiener, Denise Ganz or Lisa Barkovic.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.