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Federal Share, Payments on Federal Projects, and Donations and Credits

See FHWA Guidance on Non-Federal Matching Requirements

We posted statutory legislation for three sections of law that may affect the RTP and TE Activities, but the legislation conflicts with other sections of Title 23, in particular with RTP and TE. Here's the explanation.

We hope that providing these statutory references will help you understand some flexibilities (and inconsistencies) in the Federal-aid highway program. We have received several calls and emails over the past several months in which the people calling were not aware of the flexibilities under these three sections of Title 23.

23 U.S.C. 120(k) and (l). Federal Share Payable: (HTML / PDF)
In general, 23 U.S.C. 120 applies to the entire Federal-aid highway program except where there is specific statutory language for a specific program. Alas, the RTP, TE, and Scenic Byways have their own Federal-aid requirements, creating conflicts with the broader Section 120(k) and (l). We intend to offer amendments to correct [most of] these inconsistencies in the next reauthorization, to make sure flexibilities available under section 120 also are available to the RTP and TE.


Explanation. The original purpose of the Innovative Financing section in Section 1108(b) of TEA-21 in 1998 was to help all Federal agencies [not only Federal Land Management Agencies] to use their funds to match TE funds, which had not been allowed prior to TEA-21. It requires States to have a programmatic match, which means the overall Federal share cannot exceed the State's normal Federal-aid share. If a State accepts funds from another Federal agency to match TE funds, then the State must find additional non-Federal share for other TE projects. Meanwhile, TEA-21 §1115(a) authorized allowing Federal land management agency funds and Federal Lands Highway Program funds to match Federal-aid funds, a more permissive authority than what had existed previously. The two TEA-21 amendments were not coordinated. We intend to propose an amendment in the next reauthorization to allow full flexibility to use §120(k) and (l) without penalizing TE projects.

23 U.S.C. 132. Payments on Federal-aid projects undertaken by a Federal agency: (HTML / PDF)

This provision allows a State to transfer Federal-aid highway program funds to a Federal agency as an advance, which often is required for other Federal agencies (especially for the US Army Corps of Engineers). This provision applies to the entire Federal-aid highway program, including High Priority Projects, RTP, Byways, and TE. Yes, a State may allow an advance of funds to a Federal agency. No, the State is not required to authorize the advance if it doesn't want to do so for some reason.

23 U.S.C. 323. Donations and Credits: (HTML / PDF)

This provision allows (with restrictions) donations of property and also donations of funds, materials, or services. It applies to the entire Federal-aid highway program, except where there is specific statutory language for a specific program. Section 323 was amended in TEA-21 and again in SAFETEA-LU to facilitate "soft match" of materials and services.

Updated: 4/2/2014
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