The U.S. Dept. of Transportation has released a funding-availability notice for the largest new construction-related program under the Fixing America’s Surface Transportation Act; a competition for 2016's share of $4.5 billion over five years in grants for important freight-related surface-transportation projects.
The FAST Act, signed into law on Dec. 4, established the Nationally Significant Freight and Highway Projects program, and authorized $800 million in fiscal year 2016 for the first year of the grants. The amount available for actual awards this year is $759.2 million. Funding would rise in each succeeding year to a peak of $1 billion in 2020.
The funding notice, released on Feb. 26, notes that applications for the grants are due by Apr. 14. States—or groups of states—as well as cities and other local governments, public authorities and other entities are eligible to apply.
U.S. DOT Secretary Anthony Foxx said in a statement, "We now have an opportunity to fund high-impact projects that address key challenges affecting the movement of people and freight."
Each applicant can send in no more than three applications for the new program, which DOT has dubbed FASTLANE—for Fostering Advancements in Shipping and Transportation for the Long-term Achievement of National Efficiencies.
If DOT’s hotly competitive TIGER grants are any guide, the department could be swamped by FASTLANE requests.
In an interview before DOT released its notice, Kirk Steudle, Michigan DOT director, said that his state “absolutely” would pursue the new grants. He noted that Michigan is a an industrial state and its highways have “a pretty heavy mix of trucks.” But Steudle also says Michigan will be far from alone in applying. He says, “I’m sure we, along with 49 other states, are going to say, ‘Well, we’ve got freight issues.’ “
Brian Deery, senior director of the Associated General Contractors of America’s highway and transportation division, sees a particular use for the FASTLANE money. He says, “It relieves pressure on states where they have some of these big megaprojects that they have to build, that really need to be done.”
Deery adds, “When you start talking about those huge projects there just isn’t one funding source that’s able to do all those.”
FASTLANE grants can account for up to 60% of a project’s cost. Total federal assistance will be capped at 80% of a project’s costs.
The FAST Act specifies that at least 25% of the annual totals —or about $190 million in 2016—will be set aside for rural projects and 10%—about $76 million in 2016— for smaller projects.
Rural projects are defined as an area outside of a Census Bureau “urbanized area” whose population exceeds 200,000.
The minimum size for large projects is the smallest of: $100 million; or 30% of a state’s fiscal 2015 federal-aid highway apportionment—if the project is in one state; or, for a multi-state project, 50% of the largest of the relevant states’ apportionment
According to the DOT notice, the large-project minimum for 39 states is $100 million.
According to the notice, the grants “may be used for the construction, reconstruction, rehabilitation, acquisition of property (including land related to the project and improvements to the land), environmental mitigation, construction contingencies, equipment acquisition and operational improvements directly related to system performance.”
DOT also says the new money can pay for projects’
early-stage activities, including planning, environmental review, preliminary engineering and design, among other activities.
Jim Tymon, American Association of State Highway and Transportation Officials chief operating officer, also foresees strong demand for the new grants. He says, “There’s always going to be interest in these competitive programs.”
But Tymon notes the importance of continuing to have some 93% of total annual federal-aid highway funds distributed according to formulas.
He says, “While competitive grants are great, there isn’t that predictability [about] whether or not you’re going to get one. So you still need the core of the program that’s formula-based, where there’s that predictability associated with it.”