What are some factors that tend to establish a project as qualified for MEGA funding? Can projects receive funding from multiple grant sources, such as MEGA and RAISE?

The Infrastructure Investment and Jobs Act (“IIJA”) will provide numerous opportunities for applicants seeking to fund infrastructure projects, including via the National Infrastructure Project Assistance program (“Megaprojects” or “MEGA”). MEGA funds “support large, complex projects that are difficult to fund by other means and likely to generate national or regional economic, mobility, or safety benefits.”[1] To date, the U.S. Department of Transportation (“USDOT”) has identified at least seven different MEGA-eligible project types:

1. A highway or bridge project on the National Multimodal Freight Network [under 49 U.S.C. § 701013];
2. A highway or bridge project on the National Highway Freight Network [under 23 U.S.C. § 167];
3. A highway or bridge project on the National Highway System [under 23 U.S.C. § 103];
4. A freight intermodal (including public ports) or freight rail project that provides public benefit;
5. A railway highway grade separation or elimination project;
6. An intercity passenger rail project; or
7. A public transportation project that is eligible [for] assistance under Chapter 53 of title 49 or is a part of any of the project types described above.[2]

Additionally, USDOT has established five specific requirements for MEGA projects to date:

1. The project is likely to generate national or regional economic, mobility, or safety benefits;
2. The project is in significant need of federal funding;
3. The project will be cost effective;
4. With respect to related non-Federal financial commitments, one or more stable and dependable funding or financing sources are available to construct, maintain, and operate the project, and to cover cost increases; and
5. The applicant has, or will have, sufficient legal, financial, and technical capacity to carry out the project.[3]

For competitive grant programs under the IIJA, whether projects can utilize multiple funding sources depends on the eligibility requirements of a respective grant program.

Under the Multimodal Project Discretionary Grant Opportunity notice, which includes MEGA,[4] Infrastructure for Rebuilding America (“INFRA”),[5] and Rural Surface Transportation Program (“Rural”)[6] grant programs, applicants should submit one application to be considered for all three programs.[7] The federal cost share for MEGA and INFRA grant programs is 60%, with total allowable federal assistance up to 80% of the project cost:[8]

Federal Cost Share:

• MEGA: 60%
• INFRA: 60%
• RURAL: 80% (100% for certain projects)

Total Federal Assistance Allowed:

• MEGA: 80%
• INFRA: 80%
• RURAL: 80% (100% for certain projects)

Further, although the IIJA has not provided its own definition of duplication of benefits, the Federal Register notes:At the time of this writing, the government has not promulgated a specific policy expressly prohibiting the receipt of funding from multiple grant sources for IIJA programs.[9] Recipients should refer to the policy and guidance issued with the respective notice of funding opportunity to confirm if a grant program allows other federal assistance to cover project costs.

Federal agencies providing disaster assistance under the Act or under their own authorities triggered by the Act, shall cooperate to prevent and rectify duplication of benefits, according to the general policy guidance of the Federal Emergency Management Agency.[10]

The Federal Emergency Management Agency’s policy guidance provides that:

Section 312 of the Stafford Act prohibits all federal agencies from duplicating benefits for disaster relief. Multiple agencies having authority to expend funds for the same purpose is not, by itself, a duplication of benefits under Section 312. However, all federal agencies are prohibited by Section 312 from paying [state, local, Tribal, and territorial government entities, “SLTTs”)] SLTTs for the same work twice.[11]

As a good practice, and consistent with similar projects utilizing federal assistance, recipients of IIJA program grants should perform thorough due diligence to prevent duplication of benefits between funding sources for the same project costs. Applicants should also be aware of caps on total federal participation for a given project (e.g., no greater than 80% for certain highway projects).[12] Municipalities should also track the details of their costs. Finally, recipients of IIJA grants should document within their project plans any instance where they intend to apply funding from multiple grants or funding sources to cover all project costs.

Last Updated: April 20, 2022