Penalty Transfer Provisions Interim Guidance - Open Container and Repeat Offender Laws (23 U.S.C. §§ 154 and 164)
January 31, 2013
Federal Highway Administration (FHWA), Office of Safety
On July 6, 2012, the President signed into law the Moving Ahead for Progress in the 21st Century Act ("MAP-21"), Public Law 112-141. MAP-21 includes specific provisions related to 23 U.S.C. §§ 154 and 164. These provisions were first established as part of the Transportation Equity Act for the 21st Century (TEA-21) in 1998 to encourage States to enact Open Container laws (23 U.S.C. § 154) and Repeat Intoxicated Driver laws (23 U.S.C. § 164), also referred to as Repeat Offender laws, meeting minimum Federal standards. All references to 23 U.S.C. in this Guidance are as amended by MAP-21.
States that fail to meet the requirements of these provisions are penalized by the reservation of apportioned Federal-aid funds. If a State elects to use the reserved funds for alcohol-impaired driving programs, the funds will be transferred to the State's Section 402 apportionment. If the State elects to use the reserved funds to conduct Highways Safety Improvement Program (HSIP) eligible activities, the funds will be released to the State Department of Transportation (DOT).
This Guidance provides clarification regarding the administration of 23 U.S.C. §§ 154 and 164. Effective October 1, 2012, this Guidance supersedes previous Guidance, such as the memorandum Guidance on TEA-21 Transfer Funding dated March 31, 2000, the addendum issued in July 2000, and Joint FHWA-NHTSA Administration of Section 154, 163 and 164 Programs dated October 22, 2007.
Some significant changes to the penalty transfer provisions under MAP-21, and covered in this guidance, are summarized below:
- FHWA will reserve the penalty funds on October 1 of each fiscal year until the States certify how they intend to use those funds (by notifying the NHTSA Regional Administrator and FHWA Division Administrator how the funds will be "split" between the permitted uses).
- An amount equal to 2.5 percent of Federal-aid funds apportioned under the National Highway Performance Program (NHPP) and the Surface Transportation Program (STP) will be reserved.
- If a State elects to use penalty funds for alcohol-impaired driving programs, the funds will be transferred to NHTSA's Section 402 apportionment. If the State elects to use penalty funds to conduct HSIP eligible activities, the funds will be released to the State DOT. Under previous legislation, all penalty funds were transferred to the apportionment of the State under Section 402.
- The mandatory license suspension criterion to the Repeat Offender law (23 U.S.C. § 164) was amended by MAP-21. States must now require the use of an interlock for not less than one year or require a one-year hard license suspension to be compliant. Also, MAP-21 eliminated the location restrictions on operation of a motor vehicle equipped with an ignition interlock during the one-year license suspension period. The other compliance criteria for 23 U.S.C. § 164 are unchanged and remain applicable.
This Guidance applies to States that are subject to penalties on Federal-aid Highway Program apportionments for noncompliance with the minimum requirements for the Open Container Law (23 U.S.C. § 154) or Repeat Offender Law (23 U.S.C. § 164). A flowchart summarizing the annual penalty transfer provision process, as detailed in this Guidance, is provided in Appendix A.
State Compliance Requirements for 23 U.S.C. § 154 and 23 U.S.C. § 164
23 U.S.C. § 154
MAP-21 did not change the criteria to comply with 23 U.S.C. § 154. To avoid the penalty, each State, the District of Columbia, and Puerto Rico must enact and enforce an Open Container law that prohibits the possession of any open alcoholic beverage container, and the consumption of any alcoholic beverage, in the passenger area of any motor vehicle (including possession or consumption by the driver of the vehicle) located on a public highway, or the right-of-way of a public highway, in the State.
The law must provide for primary enforcement and apply to:
- The possession of any open alcoholic beverage container and the consumption of any alcoholic beverage;
- The passenger area of any motor vehicle;
- All alcoholic beverages;
- All occupants of a motor vehicle; and
- All motor vehicles located on a public highway or the right-of-way of a public highway.
U.S.C. § 164
MAP-21 amended the mandatory license suspension criterion to the Repeat Offender law. To avoid the penalty, States must require the use of an interlock for not less than one year or require a one-year hard license suspension to be compliant (see bolded text below). Also, MAP-21 no longer requires location restrictions on operation of a motor vehicle equipped with an ignition interlock during the one-year license suspension period. The other compliance criteria for 23 U.S.C. § 164 are unchanged and remain applicable.
To avoid the penalty, each State, the District of Columbia, and Puerto Rico must enact and enforce a Repeat Offender law that provides, as a minimum penalty, that an individual convicted of a second or subsequent offense for driving while intoxicated or driving under the influence within five years after a previous conviction shall:
- a suspension of all driving privileges for not less than 1 year; or
- a suspension of unlimited driving privileges for 1 year, allowing for the reinstatement of limited driving privileges subject to restrictions and limited exemptions as established by State law, if an ignition interlock device is installed for not less than 1 year on each of the motor vehicles owned or operated, or both, by the individual;
- Be subject to the impoundment or immobilization of, or the installation of an ignition interlock system on, each motor vehicle owned or operated, or both, by the individual;
- Receive an assessment of the individual's degree of alcohol abuse and treatment as appropriate; and
- Receive a mandatory sentence of:
- Not less than five days of imprisonment or 30 days of community service for a second offense; and
- Not less than ten days of imprisonment or 60 days of community service for a third or subsequent offense.
Enacting or Amending Open Container or Repeat Offender Laws
If a State enacts a newly compliant law, the State must submit to the NHTSA Regional Office a copy of the law along with a certification meeting the requirements of the applicable Federal regulation (23 CFR § 1270.5 or 23 CFR § 1275.5). If a State amends an existing compliant law and the modified law remains compliant with 23 U.S.C. § 154 or 23 U.S.C. § 164, the State must submit to the NHTSA Regional Office a copy of the law along with a supplement or amendment to its certification. NHTSA will review the legislation to confirm its compliance with the requirements of 23 U.S.C. § 154 or 23 U.S.C. § 164. If a State amends its existing compliant law in such a fashion that the State is no longer enforcing a law that complies with 23 U.S.C. § 154 or 23 U.S.C. § 164, the State must submit to the NHTSA Regional Office a supplement or amendment to its certification indicating that its modified law is no longer compliant.
Both 23 U.S.C. § 154 and 23 U.S.C. § 164 require the State's law to be in compliance on October 1 of that fiscal year to avoid a penalty transfer. Enacting or amending a law after October 1 of a fiscal year will not affect the penalty provision for that fiscal year. For example, if a State is found noncompliant on October 1, 2012 (which is the beginning of FY 2013) and enacts and enforces a compliant law later in that fiscal year, it will not affect the penalty provision applied in FY 2013. If the amended law is determined to be compliant, the penalty transfer provision will not be applied in subsequent fiscal years, as long as the law remains in compliance.
State Noncompliance Notification Process
NHTSA reviews State open container and repeat offender laws to determine if they are compliant with 23 U.S.C. § 154 or 23 U.S.C. § 164. Information regarding which States are determined to be noncompliant is used to prepare the notice of apportionments for that fiscal year.
Each State determined to be noncompliant with 23 U.S.C. 154 or 23 U.S.C. 164 will receive notice of the funds being reserved from apportionment, as part of the certification of apportionments required under 23 U.S.C. 104(e), which normally occurs on October 1 of each fiscal year. At this time, the penalty funds will be reserved proportionally from the NHPP and STP accounts for the noncompliant States.
If a State's law is noncompliant for the first time that fiscal year, a letter will also be issued informing the State that its law is noncompliant, outlining the reasons for the noncompliance determination, and informing the State about the appeal process.
State Appeal Process
The State may, within 30 days of the receipt of the notification letter, appeal the determination of noncompliance and submit documentation to the Department that explains why the State believes it is in compliance with the requirements of 23 U.S.C. § 154 or 23 U.S.C. § 164. The State's affected Federal-aid funds will remain reserved until the State's documentation is reviewed and the appeal process is completed.
The appeal decision made by the Department is final. After final determination is made regarding the appeal, one of two actions will be taken:
- If the appeal is granted, the State will be notified through a letter and funds will be released from reservation and restored to the NHPP and STP accounts.
- If the appeal is denied, the State will again be notified through letter of the final determination and the penalty funds will remain reserved.
Calculation of Penalty Amounts
States that fail to enact or enforce compliant Open Container or Repeat Offender laws by October 1 of each fiscal year will have an amount equal to 2.5 percent of Federal-aid funds apportioned under 23 U.S.C. § 104(b)(1) and 23 U.S.C. § 104(b)(2) for the National Highway Performance Program (NHPP) and the Surface Transportation Program (STP) reserved until the State certifies how it will use the reserved funds. The penalties are separate and distinct; a 2.5 percent penalty applies separately for each program (i.e., Section 154 or 164) where non-compliance occurs.
On October 1 of each fiscal year, FHWA calculates State apportionments according to the relevant provisions of law, including calculation of penalty amounts for those States subject to penalty transfer provisions for the fiscal year. The final notice of apportionments details the apportionments by State and program, the States subject to penalty transfer provisions, and the amount of funds affected by those penalty transfer provisions. The Section 154 and 164 penalty amounts are reserved from the apportionments. Initially the penalty funds are reserved proportionally from NHPP and STP, but this may later be adjusted by the State, per the State's "shift" determination discussed in the following section.
State Procedures for Penalty Funds
States must make two determinations that affect the reserved funds. The first determination is the proportions in which the penalty transfer amounts are to be derived from its NHPP and STP apportionments, referred to as the penalty "shift." The second determination is how the penalty transfer funds will be used, or the penalty "split".
State "Shift" Determination
As noted earlier, on October 1 of each fiscal year, FHWA reserves Federal-aid funds for noncompliant States on a proportional basis from each of the apportionments under Sections 104(b)(1) and (b)(2). While legislation specifies the total amounts of Federal-aid apportionments reserved, States can specify the proportions in which the total penalty amounts are derived between the NHPP and STP. Each fiscal year, the State's DOT must indicate if it would like to change the derivation of the total penalty amounts from the NHPP and STP apportionments from the default proportional amounts. This notification is referred to as the State's "shift" letter. If a State elects to change the derivation it must notify FHWA, through the appropriate Division Administrator, by October 30 of each fiscal year. The States "shift" letter should indicate the percentages in which the penalty amounts are to be reserved from its NHPP and STP apportionments instead of dollar amounts (e.g., 25 percent from NHPP and 75 percent from STP, 100 percent from NHPP and 0 percent from STP, etc.). If a state does not provide a "shift" letter, penalty funds will remain reserved proportionally by default.
State "Split" Determination
No later than 60 days after the penalty funds are reserved, the State's Governor's Representative for Highway Safety (GR) and the State's DOT Chief Executive Officer (CEO) must jointly identify, in writing, to the appropriate NHTSA Regional Administrator and FHWA Division Administrator how the penalty funds will be "split"(distributed) for use among alcohol-impaired driving programs and HSIP eligible activities (23 C.F.R. 1270.7(c). This notification is referred to as the State's "split" letter. The State's "split" letter should indicate the percentages, instead of dollar amounts, in which the penalty funds are to be used for alcohol-impaired driving programs or HSIP eligible activities (e.g., 50 percent for alcohol-impaired programs and 50 percent for use on HSIP eligible activities).
The penalty funds will continue to be reserved until the State provides the "split" letter. As soon as practicable after the date of receipt of the "split" letter, the funds will be transferred to the State's Section 402 apportionment for alcohol-impaired driving programs or released to the State DOT for HSIP eligible activities. Once penalty funds have been transferred or released for the fiscal year, States are not able to revise their "split" letters. Thus, States must adhere to the percentages identified in their "split" letter.
Procedures for FIRST-TIME Noncompliant States
States that are determined to be noncompliant for the first time in a given fiscal year receive a letter, as explained earlier in this guidance. The letter explains the determination of noncompliance (which may have been prompted by a change in federal legislation, an amendment to the State law, etc.) and the actions the State must take.
Newly identified States have 60 days from the receipt of this letter to submit their "shift" and "split" determinations. The GR and the State's DOT CEO should identify in writing to the NHTSA Regional Administrator and the FHWA Division Administrator whether the State requests a change in how the funds will be proportioned (the "shift") and how the funds will be programmed (the "split") among alcohol-impaired driving programs under 23 U.S.C. § 402 and highway safety improvement program activities under 23 U.S.C. § 148.
Use of Penalty Funds
A State may elect to use all or a portion of the funds for Alcohol Impaired Driving Programs or HSIP eligible activities as described in 23 U.S.C. 154 (c)(2) & (3) & 23 U.S.C. 164(b)(2) & (3).
Alcohol-Impaired Driving Programs
The State Highway Safety Office (SHSO) is responsible for the administration of penalty funds used for alcohol-impaired driving programs. Sections 154 and 164 funds that are transferred to NHTSA's Section 402 Program may be used for alcohol-impaired driving countermeasures or for the enforcement by State and local law enforcement agencies of laws prohibiting driving while intoxicated, driving under the influence, or other related laws or regulations. Penalty transfer funds that are used for alcohol-impaired driving programs take on the characteristics of NHTSA's Section 402 Program (23 U.S.C. § 402). For example:
- At least 40 percent of annual 154 and 164 funds must be used by or for the benefit of political subdivisions of the State.
- A designated amount can be used for planning and administration (P&A). NHTSA's 402 Implementation Regulations establishes the maximum amount of annual Section 154 and 164 penalty funds that may be used for P&A.
- After the funding has been transferred, the State must update its annual Highway Safety Plan (HSP), prepared under Section 402, to indicate how it intends to use the transfer funds. Alternatively, a state may choose to plan ahead. Knowing that there will be a transfer of funds in October, the state may include a program plan for these funds in its HSP submission prior to that date.
HSIP Eligible Activities
The State DOT will be responsible for the administration of penalty funds released for use for HSIP eligible activities.
- Penalty funds that are used for HSIP eligible activities are subject to the requirements of 23 U.S.C. § 148. For more information, States can refer to HSIP Eligibility Guidance.
- The State should include a description of how it uses its penalty funds for HSIP eligible activities in its HSIP Annual Report. For the HSIP projects obligated using penalty funds, the State's annual HSIP report description should include: the amount programmed and the amount obligated for the reporting period, and; a general listing of projects indicating the improvement category; project output (e.g. miles of rumbles strips, etc.); project cost; relationship to the State's SHSP (i.e. emphasis area, strategy), and; roadway characteristics (i.e. functional classification, AADT, speed, ownership).
- No matching funds are required for penalty funds transferred for alcohol impaired driving programs or released for HSIP eligible activities; the Federal share of the project cost shall be 100 percent [23 U.S.C. § 154(c)(4); 23 U.S.C. § 164(b)(4)].
Obligation Limitation Associated with Penalty Funds
Section 154 and 164 penalty funds are transferred or released from the State's apportionment of contract authority under 23 U.S.C. § 104(b)(1) and 23 U.S.C. § 104(b)(2). The contract authority will be transferred or released with obligation limitation, which is the maximum amount the State can obligate to eligible projects. The obligation limitation is provided based on a ratio specified by 23 U.S.C. § 154(c)(6) and 23 U.S.C. § 164(b)(6). That ratio typically is less than 100 percent.
For penalty funds released for HSIP eligible activities, States have until the end of the fiscal year to use obligation limitation that is provided to obligate associated penalty funds since the obligation limitation expires at the end of the fiscal year. Penalty funds released for HSIP eligible activities are "obligated" when there is a signed project agreement. If a State will not be able to use all of the associated obligation limitation by the end of the fiscal year in which it is provided, the State will have to return the unused obligation limitation to be redistributed as part of the August redistribution process (MAP-21 § 1102(d)). In the following fiscal years, no new obligation limitation will be distributed for any penalty funds that are carried over from prior fiscal years. Penalty funds are available for a period of 4 fiscal years; the State's formula obligation limitation, if available, will need to be used if a State wants to obligate unobligated balances of penalty funds carried over from prior fiscal years.
Penalty funds transferred to NHTSA are "obligated" after transfer when they are entered into NHTSA's financial tracking system; therefore penalty funds and associated obligation limitation transferred to NHTSA's Section 402 program are not subject to FHWA's redistribution process. States should use the obligation limitation that is provided to obligate associated penalty funds during the fiscal year.
Penalty Transfer Provisions Oversight Responsibility
The State GR and the designated NHTSA Regional Office are responsible for the oversight of the funds transferred to alcohol-impaired driving programs. The State DOT and FHWA Division Office are responsible for the oversight of the funds used for HSIP eligible activities. For more specific information on NHTSA and FHWA programs, refer to Title 23, U.S.C.
PENALTY TRANSFER PROVISIONS ANNUAL PROCESS
 Under previous legislation, an amount equal to 3 percent of the State's Federal-aid funds apportioned for the National Highway System (NHS), Interstate Maintenance (IM) and Surface Transportation Program (STP) were transferred to the apportionment of the State under Section 402.