Federal Investigation Finds Transportation Department Unable to Prevent Release of Electric Vehicle Infrastructure Program Funds

In a series of events unfolding since January 2021, the Transportation Department has found itself embroiled in a controversy over the handling of funds allocated for electric vehicle (EV) charging infrastructure.

On January 20, 2021, the Trump administration, under President Joe Biden, issued an executive order directing agencies to pause appropriations tied to the Infrastructure Investment and Jobs Act (IIJA). This move affected the NEVI Formula Program, a key initiative aimed at funding EV charging infrastructure across the nation.

However, the Transportation Department's actions have been called into question. On February 6, 2022, a Federal Highway Administration (FHWA) memo rescinded NEVI Formula Program guidance and suspended both program funding and approval for state EV infrastructure deployment plans. This decision was met with criticism, as all states had already submitted their plans for fiscal years 2022 through 2025 in satisfaction of their statutory requirement.

The department's delay in obligating the NEVI Formula Program funds was not due to an attempt to comply with the statutory requirements for the program, but rather from imposing requirements not contemplated by the IIJA. This has resulted in much of the NEVI Formula Program funds becoming unavailable for expenditure.

The Transportation Department's actions have also been found to violate the Impoundment Control Act (ICA), a law that restricts the president from withholding funds required by law to be spent. The department violated the ICA by not having the president transmit a special message to Congress regarding the intent to temporarily withhold or terminate the NEVI Formula Program funds, and by requiring distribution of funds according to a statutory formula not laid out in the IIJA.

Furthermore, the department violated the recording statute by not correctly recording the funds as an obligation when they came available. The watchdog determined that the February 6 memo violated the Impoundment Control Act.

The DOT's imposition of requirements on the program that are not contemplated by the IIJA has led to the need for either a notification of a proposed recession to Congress or new legislation to change the IIJA. The DOT's actions have caused significant delays in the rollout of EV charging infrastructure, potentially hindering the country's transition to a more sustainable transportation system.

It is important to note that 10% of the funds in the NEVI Formula Program will be distributed as grants to states and localities for EV charging infrastructure. Under the ICA's fourth disclaimer, the president may not withhold funding required by law to be spent, and the DOT is not authorized to withhold the NEVI Formula Program funds.

The Transportation Department and its component agency were ruled against by the Government Accountability Office over the February memorandum, further highlighting the need for rectification of the situation. The DOT must either notify Congress of a proposed recession or offer new legislation to change the IIJA to legally justify the withholding of funds.

The NEVI Formula Program was set aside with $5 billion in appropriations between fiscal 2022 and 2026, and its delay in implementation could have significant implications for the country's EV infrastructure development. The situation serves as a reminder of the importance of adhering to legal requirements and the potential consequences of deviating from them.

Federal Investigation Finds Transportation Department Unable to Prevent Release of Electric Vehicle Infrastructure Program Funds