What mechanisms are used to allocate the various grant funds available under the Infrastructure Investment and Jobs Act (e.g., Are funds allocated on a competitive basis, through a formula, etc.)?

The Infrastructure Investment and Jobs Act (“IIJA”) contains hundreds of existing, revised, and new programs, each with their own funding mechanisms. Some IIJA programs combine multiple funding mechanisms. A brief survey of some of those mechanisms is set forth below

Funding Mechanisms under the IIJA

1. Formula Grants  

The IIJA provides over US $350 billion in formula funding to states for transportation projects focused on:

• improving roads, bridges, and railways;
• public transportation infrastructure and aviation facilities;
• ports and waterways;
• traffic safety; and
• electric vehicles, buses, and ferries.[1]

In many cases, formula grants will follow existing mechanisms for distribution of transportation funds. This funding often flows from federal agencies to states’ departments of transportation, and, in certain instances, through Metropolitan Planning Organizations (“MPOs”) which represent the interests of municipalities. For example, of the $40 billion in dedicated federal funding for bridges, the Bridge Formula Program provides formula funding to states to replace, rehabilitate, preserve, protect, and construct bridges on public roads.[2] Project sponsors are encouraged to contact their states’ department of transportation for additional information about accessing formula funding for this and other transportation projects.[3]

MPOs can also be direct recipients of several formula funding opportunities.[4] As an example, the Metropolitan Planning Program (“MPP”) makes over $2.2 billion in formula grants available to MPOs for multimodal transportation planning and programming. Formula funds are distributed after appropriations are received. Notably, portions of each IIJA program may have different funding streams available for planning, designing, engineering, or construction activities.[5]  

2. Competitive Grants

The IIJA authorized over $100 billion in competitive grants for transportation-related projects.[6] Eligible recipients vary, but generally include states, counties, municipalities, special districts, federally recognized tribal governments, and MPOs.

A single competitive grant program may offer multiple funding streams. For example, the Safe Streets and Roads for All (“SS4A”) grant program provides $5 billion in competitive grants to support local initiatives in preventing death and severe injury on roads.[7] Under SS4A, eligible recipients, including Metropolitan Planning Organizations, counties, cities, towns, transit agencies, federally recognized tribal governments, and multijurisdictional groups comprised of these entities can either apply for an “Action Plan Grant” or an “Implementation Grant”, depending on whether the recipient has already developed a safety action plan.[8]

Similarly, the $1 billion allocated as part of the Reconnecting Communities Pilot Program supports planning grants and capital construction grants, and it also provides technical assistance. This program’s objective is to reconnect communities that were previously cut off from economic opportunities by transportation infrastructure[9] by removing, retrofitting, mitigating, or replacing eligible transportation infrastructure facilities.[10]

There are other IIJA programs which also offer multiple funding mechanisms. For example, the Promoting Resilient Operations for Transformative, Efficient, and Cost-saving Transportation (“PROTECT”) Program includes $7.3 billion in formula funding that will be distributed to each state’s department of transportation. Municipalities will have the opportunity to apply for the remaining $1.4 billion in competitive PROTECT grants to plan or improve the resilience of transportation infrastructure.[11] Specific PROTECT grants will include resilience improvement grants, community resilience and evacuation route grants, and at-risk coastal infrastructure grants. Program details are forthcoming, pending resolution of federal appropriations legislation.[12]

To prepare for application openings, potential recipients should begin to work with stakeholders to develop a list of priority projects suitable for applications for competitive grant funding programs.

3. Combination Grants

Other funding mechanisms within the IIJA present a combination of opportunities for competitive and non-competitive grants, cooperative agreements, contracts, and loans. For example, the  DOT offers loans through programs such as the Transportation Infrastructure Finance and Innovation Act to support surface transportation projects undertaken by states, localities, public authorities, and eligible private entities.[13]

The IIJA also provides $50 million in competitive grants and a direct allocation to states for the On-the-Job Training Supportive Services Program.[14] This program aims to increase the capacity of the United States’ current and future highway construction workforce by providing the development and diversification of skilled laborers. This program also strives to move minorities, women, and disadvantaged individuals into “journey-level positions”, or positions in which such persons have been gainfully employed by virtue of on-the-job training, to ensure that a skilled workforce is available to meet highway construction needs.

4. Federal Funding to Agencies

Federal agencies have also received direct allocations from the IIJA, especially related to transportation infrastructure. The National Park Services, U.S. Fish and Wildlife Service, and the U.S Forest Service received a combined $2.04 billion to promote access to national parks, forests, wildlife refuges, recreation areas, and other federal public lands.[15] Although eligible uses of these direct allocations are largely tied to improving public lands managed by the federal government, this funding is more broadly designed to enable these agencies to engage with state, local, territorial and federally recognized tribal governments and complete planning and construction activities in furtherance of joint goals.

Last Updated: March 1, 2023