Posted: 4/22/2016

Question 1: What provision governs transfers between programs of funds apportioned under section 104 of title 23, United States Code, as amended by the FAST Act?

Answer 1: Section 126 of title 23, United States Code, governs transfers of apportioned funds between programs.

Transfers between the following programs are covered under this provision:

1. National Highway Performance Program (NHPP);
2. Surface Transportation Block Grant Program (STBG);
3. Highway Safety Improvement Program (HSIP);
4. Congestion Mitigation & Air Quality Improvement Program (CMAQ);
5. National Highway Freight Program (NHFP); and
6. Transportation Alternatives (TA).

Funds under other programs may not be transferred between programs unless specifically provided by law. Funds from the programs listed above may also not be transferred to programs not listed. Transfers between States or to other Federal agencies are not restricted by this provision for any Federal-aid program.

Question 2: Which apportioned funding sub-categories are excluded from transfer eligibility (both transfer in and transfer out)?

Answer 2: Exclusions of some apportioned funding sub-categories are explicitly listed in section 126, while others exclusions are intended to harmonize the set-aside provisions and section 126 based upon Congressional direction to set-aside or use funding for certain purposes. Program codes for apportioned programs under the FAST Act and funding category eligibility for transfer under section 126 are located on the 23 U.S.C. 126 transfer eligibility table.

It should be noted that while a State may not transfer funds into certain categories, STBG is eligible for most activities and a transfer to STBG provides the most flexibility.

Question 3: What is the maximum amount eligible for transfer under section 126?

Answer 3: The maximum amount authorized to be transferred from a program under section 126 is not to exceed 50 percent of the amount apportioned (net of set-asides to fund other programs) for such program. The not to exceed 50 percent calculation is based on the apportioned amount after any set-aside for State Planning & Research (SPR), after the STBG set-aside for TA, and after the Recreational Trails Program set-aside from TA. The not to exceed 50 percent calculation is also after assessing any penalties under sections 154 and 164 (incorporating any penalty shift election by the State) since that assessment reduces the amounts made available for the programs by operation of law. The determination of the maximum amount eligible for transfer for each program is as follows:

• NHPP: 50 percent of NHPP apportionment net of SPR set-aside and section 154/164 penalties.
• STBG: 50 percent of STBG apportionment net of TA set-aside, SPR set-aside, and section 154/164 penalties. STBG suballocated funds distributed by population are not transferable to other apportioned programs.
• HSIP: 50 percent of HSIP apportionment net of SPR set-aside.
• CMAQ: 50 percent of CMAQ apportionment net of SPR set-aside.
• NHFP: 50 percent of NHFP apportionment net of SPR set-aside.
• TA: 50 percent of TA amount net of Recreational Trails Program set-aside. TA suballocated funds distributed by population are not transferable to other apportioned programs.

Each fiscal year, a table showing the amount of the transfer limit for each program is provided as part of the Supplementary Tables. Once available, the Supplementary Tables are posted here.

Question 4: What are some illustrative examples of how the maximum amount eligible for transfer is determined and applied?

Answer 4: The following are two illustrative examples of the maximum transfer eligibility determination.

Example 1:

Assume that the total HSIP apportionment for a State is $150,000,000. Also assume that the amount set aside for SPR is $3,000,000. Finally, assume a set-aside of $10,000,000 in HSIP funds for high risk rural roads under the provision in section 148(g)(1) of title 23, United States Code.

Therefore, the HSIP apportionment net of the SPR and high risk rural roads set-aside is $137,000,000 ($150,000,000 less $3,000,000 SPR less $10,000,000 high risk rural roads) and this is the amount contained in program code ZS30. The $10,000,000 for high risk rural roads is contained in program code ZS60.

Under this illustrative example, the total amount of HSIP funding that may be transferred to another transfer-eligible apportioned program code is $73,500,000 (50 percent of $147,000,000 in HSIP funding net of the SPR set-aside). The HSIP funds that may be transferred up to the 50 percent transfer limit are the HSIP funds in program code ZS30 (i.e., up to $73,500,000 of the $137,000,000 in HSIP funding made available under program code ZS30 may be transferred). The high risk rural roads funds in program code ZS60 may not be transferred.

Example 2:

Assume that the total CMAQ apportionment for a State is $100,000,000. Of that total CMAQ apportionment, assume that the amount required to be obligated on PM 2.5 projects is $19,000,000 (contained in program code Z003). Also assume that the amount set aside for SPR is $2,000,000.

Therefore, the CMAQ apportionment net of the SPR set-aside is $98,000,000 ($100,000,000 less $2,000,000 SPR). The CMAQ funding contained in program code Z400 is $79,000,000 ($100,000,000 less $2,000,000 SPR less $19,000,000 PM 2.5).

Under this illustrative example, the total amount of CMAQ funding that may be transferred to another transfer-eligible apportioned program code is $49,000,000 (50 percent of $98,000,000 in CMAQ funding net of the SPR set-aside). The CMAQ funds that may be transferred up to the 50 percent transfer limit are the CMAQ funds in program code Z400 (i.e., up to $49,000,000 of the $79,000,000 in CMAQ funding made available under program code Z400 may be transferred). The PM 2.5 set-aside funds in program code Z003 may not be transferred.

Question 5: How does a State request a transfer between apportioned programs under 23 U.S.C. 126?

Answer 5: To request a transfer between apportioned programs, the State should submit a completed FHWA transfer request form to the FHWA Division Office indicating the type and amount of funds to be transferred. The Division Office must determine if the requested transfer is within the allowable limits as described in this guidance, indicate concurrence with the State's request, and submit the request to the FHWA Transfers mailbox (Transfers@dot.gov) for action by the Office of Budget.

Question 6: May a State transfer old program funds to new programs, such as Surface Transportation Program (STP) or NHPP funds from MAP-21 to the STBG fund category?

Answer 6: No. The original legislative period of the funds must be maintained in order to track the period of availability so the funding can be lapsed, if necessary. Also, transferring STP or MAP-21 NHPP funding to the STBG fund category would not result in any programmatic benefit (i.e., change in eligibility) because STP is eligible for the same activities as STBG under the continued program policy.