Federal Aid Fund Management Tools
Federal-aid Matching Strategies
Flexible Match | Tapered Match | Toll Credits
23 U.S.C. 323 Donations and Credits codifies third party donations.
Title 23 - Chapter 3
§ 323. Donations and Credits
- Donations of Property Being Acquired.-Nothing in this title, or in any other provision
of law, shall be construed to prevent a person whose real property is being acquired
in connection with a project under this title, after he has been fully informed
of his right to receive just compensation for the acquisition of his property, from
making a gift or donation of such property, or any part thereof, or of any of the
compensation paid therefor, to a Federal agency, a State or a State agency, or a
political subdivision of a State, as said person shall determine.
- Credit for Acquired Lands.-
- In general.-Notwithstanding any other provision of this title, the State share of
the cost of a project with respect to which Federal assistance is provided from
the Highway Trust Fund (other than the Mass Transit Account) may be credited in
an amount equal to the fair market value of any land that-
- is lawfully obtained by the State or a unit of local government in the State;
- is incorporated into the project;
- is not land described in section 138; and
- the Secretary determines will not influence the environmental assessment of the
- the decision as to the need to construct the project;
- the consideration of alternatives; and
- the selection of a specific location.
- Establishment of fair market value.- The fair market value of land incorporated
into a project and credited under paragraph (1) shall be established in the manner
determined by the Secretary, except that-
- the fair market value shall not include any increase or decrease in the value of
donated property caused by the project; and
- the fair market value of donated land shall be established as of the earlier of-
- the date on which the donation becomes effective; or
- the date on which equitable title to the land vests in the State.
- Limitation on applicability.-This subsection shall not apply to donations made by
an agency of the Federal Government.
- Limitation on amount of credit.-The credit received by a State pursuant to this
subsection may not exceed the State's matching share for the project.
- Credit for Donations of Funds, Materials, or Services.-Nothing in this title or
any other law shall prevent a person from offering to donate funds, materials, or
services, or a local government from offering to donate funds, materials, or services
performed by local government employees, in connection with a project eligible for
assistance under this title. In the case of such a project with respect to which
the Federal Government and the State share in paying the cost, any donated funds,
or the fair market value of any donated materials or services, that are accepted
and incorporated into the project by the State transportation department shall be
credited against the State share.
- Procedures.-A gift or donation in accordance with subsection (a) may be made at
any time during the development of a project. Any document executed as part of such
donation prior to the approval of an environmental document prepared pursuant to
the National Environmental Policy Act of 1969 shall clearly indicate that-
- all alternatives to a proposed alignment will be studied and considered pursuant
to such Act;
- acquisition of property under this section shall not influence the environmental
assessment of a project including the decision relative to the need to construct
the project or the selection of a specific location; and
- any property acquired by gift or donation shall be revested in the grantor or successors
in interest if such property is not required for the alignment chosen after public
hearings, if required, and completion of the environmental document.
23 U.S.C. 121, Payment to States for Construction codifies the concept of tapered
match. Specific to the Surface Transportation Program, 23 U.S.C. 133(e)(3)(A) also grants the same flexibility.
Title 23 - Chapter 1
§ 121. Payments to States for Construction
- In General.-The Secretary, from time to time as the work progresses, may make payments
to a State for costs of construction incurred by the State on a project. Such payments
may also be made for the value of the materials-
- that have been stockpiled in the vicinity of the construction in conformity to plans
and specifications for the projects; and
- that are not in the vicinity of the construction if the Secretary determines that
because of required fabrication at an off-site location the material cannot be stockpiled
in such vicinity.
- Project Agreement.-No payment shall be made under this chapter except for a project
covered by a project agreement. After completion of the project in accordance with
the project agreement, a State shall be entitled to payment out of the appropriate
sums apportioned or allocated to the State of the unpaid balance of the Federal
share payable for such project.
- Such payments shall be made to such official or officials or depository as may be
designated by the State transportation department and authorized under the laws
of the State to receive public funds of the State.
Toll credits are codified in 23 U.S.C. 120(j).
Title 23 - Chapter 1
§ 120. Federal share payable
- Interstate System Projects.-
- In general.-Except as otherwise provided in this chapter, the Federal share payable
on account of any project on the Interstate System (including a project to add high
occupancy vehicle lanes and a project to add auxiliary lanes but excluding a project
to add any other lanes) shall be 90 percent of the total cost thereof, plus a percentage
of the remaining 10 percent of such cost in any State containing unappropriated
and unreserved public lands and nontaxable Indian lands, individual and tribal,
exceeding 5 percent of the total area of all lands therein, equal to the percentage
that the area of such lands in such State is of its total area; except that such
Federal share payable on any project in any State shall not exceed 95 percent of
the total cost of such project.
- State-determined lower federal share.-In the case of any project subject to paragraph
(1), a State may determine a lower Federal share than the Federal share determined
under such paragraph.
- Other Projects.-Except as otherwise provided in this title, the Federal share payable
on account of any project or activity carried out under this title (other than a
project subject to subsection (a)) shall be-
- 80 percent of the cost thereof, except that in the case of any State containing
nontaxable Indian lands, individual and tribal, and public domain lands (both reserved
and unreserved) exclusive of national forests and national parks and monuments,
exceeding 5 percent of the total area of all lands therein, the Federal share, for
purposes of this chapter, shall be increased by a percentage of the remaining cost
equal to the percentage that the area of all such lands in such State, is of its
total area; or
- 80 percent of the cost thereof, except that in the case of any State containing
nontaxable Indian lands, individual and tribal, public domain lands (both reserved
and unreserved), national forests, and national parks and monuments, the Federal
share, for purposes of this chapter, shall be increased by a percentage of the remaining
cost equal to the percentage that the area of all such lands in such State is of
its total area;
except that the Federal share payable on any project in a State shall not exceed
95 percent of the total cost of any such project. In any case where a State elects
to have the Federal share provided in paragraph (2) of this subsection, the State
must enter into an agreement with the Secretary covering a period of not less than
1 year, requiring such State to use solely for purposes eligible for assistance
under this title (other than paying its share of projects approved under this title)
during the period covered by such agreement the difference between the State's share
as provided in paragraph (2) and what its share would be if it elected to pay the
share provided in paragraph (1) for all projects subject to such agreement. In the
case of any project subject to this subsection, a State may determine a lower Federal
share than the Federal share determined under the preceding sentences of this subsection.
- Increased Federal Share.-
- Certain safety projects.-The Federal share payable on account of any project for
traffic control signalization, traffic circles (also known as "roundabouts"),
safety rest areas, pavement marking, commuter carpooling and vanpooling, rail-highway
crossing closure, or installation of traffic signs, traffic lights, guardrails,
impact attenuators, concrete barrier endtreatments, breakaway utility poles, or
priority control systems for emergency vehicles or transit vehicles at signalized
intersections may amount to 100 percent of the cost of construction of such projects;
except that not more than 10 percent of all sums apportioned for all the Federal-aid
systems for any fiscal year in accordance with section 104 of this title shall be
used under this subsection. In this subsection, the term "safety rest area"
means an area where motor vehicle operators can park their vehicles and rest, where
food, fuel, and lodging services are not available, and that is located on a segment
of highway with respect to which the Secretary determines there is a shortage of
public and private areas at which motor vehicle operators can park their vehicles
- CMAQ projects.-The Federal share payable on account of a project or program carried
out under section 149 with funds obligated in fiscal year 2008 or 2009, or both,
shall be not less than 80 percent and, at the discretion of the State, may be up
to 100 percent of the cost thereof.
- The Secretary may rely on a statement from the Secretary of the Interior as to the
area of the lands referred to in subsections (a) and (b) of this section. The Secretary
of the Interior is authorized and directed to provide such statement annually.
- Emergency Relief.-The Federal share payable on account of any repair or reconstruction
provided for by funds made available under section 125 of this title on account
of any project on a Federal-aid highway, including the Interstate System, shall
not exceed the Federal share payable on a project on such highway as provided in
subsections (a) and (b) of this section; except that
- the Federal share payable for eligible emergency repairs to minimize damage, protect
facilities, or restore essential traffic accomplished within 180 days after the
actual occurrence of the natural disaster or catastrophic failure may amount to
100 percent of the costs thereof; and
- the Federal share payable on account of any repair or reconstruction of forest highways,
forest development roads and trails, park roads and trails, parkways, public lands
highways, public lands development roads and trails, and Indian reservation roads
may amount to 100 percent of the cost thereof. The total cost of a project may not
exceed the cost of repair or reconstruction of a comparable facility. As used in
this section with respect to bridges and in section 144 of this title, "a comparable
facility" shall mean a facility which meets the current geometric and construction
standards required for the types and volume of traffic which such facility will
carry over its design life.
- The Secretary is authorized to cooperate with the State transportation departments
and with the Department of the Interior in the construction of Federal-aid highways
within Indian reservations and national parks and monuments under the jurisdiction
of the Department of the Interior and to pay the amount assumed therefor from the
funds apportioned in accordance with section 104 of this title to the State wherein
the reservations and national parks and monuments are located.
- At the request of any State, the Secretary may from time to time enter into agreements
with such State to reimburse the State for the Federal share of the costs of preliminary
and construction engineering at an agreed percentage of actual construction costs
for each project, in lieu of the actual engineering costs for such project. The
Secretary shall annually review each such agreement to insure that such percentage
reasonably represents the engineering costs actually incurred by such State.
- Notwithstanding any other provision of this section or of this title, the Federal
share payable on account of any project under this title in the Virgin Islands,
Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands shall
be 100 per centum of the total cost of the project.
- Increased Non-Federal Share.-Notwithstanding any other provision of this title and
subject to such criteria as the Secretary may establish, a State may contribute
an amount in excess of the non-Federal share of a project under this title so as
to decrease the Federal share payable on such project.
- Credit for Non-Federal Share.-
- In general.- A State may use as a credit toward the non-Federal share requirement
for any funds made available to carry out this title (other than the emergency relief
program authorized by section 125 and the Appalachian development highway system
program under section 14501 of title 40) or chapter 53 of title 49 toll revenues
that are generated and used by public, quasi-public, and private agencies to build,
improve, or maintain highways, bridges, or tunnels that serve the public purpose
of interstate commerce.
- Special rule for use of federal funds.-If the public, quasi-public, or private agency
has built, improved, or maintained the facility using Federal funds, the credit
under this paragraph shall be reduced by a percentage equal to the percentage of
the total cost of building, improving, or maintaining the facility that was derived
from Federal funds.
- Federal funds defined.-In this paragraph, the term "Federal funds" does
not include loans of Federal funds or other financial assistance that must be repaid
to the Government.
- Maintenance of effort.-
- In general.-The credit for any non-Federal share provided under this subsection
shall not reduce nor replace State funds required to match Federal funds for any
program under this title.
- Condition on receipt of credit.-To receive a credit under paragraph (1) for a fiscal
year, a State shall enter into such agreement as the Secretary may require to ensure
that the State will maintain its non-Federal transportation capital expenditures
in such fiscal year at or above the average level of such expenditures for the preceding
3 fiscal years; except that if, for any 1 of the preceding 3 fiscal years, the non-Federal
transportation capital expenditures of the State were at a level that was greater
than 130 percent of the average level of such expenditures for the other 2 of the
preceding 3 fiscal years, the agreement shall ensure that the State will maintain
its non-Federal transportation capital expenditures in the fiscal year of the credit
at or above the average level of such expenditures for the other 2 fiscal years.
- Transportation capital expenditures defined.-In subparagraph (B), the term "non-Federal
transportation capital expenditures" includes any payments made by the State
for issuance of transportation-related bonds.
- Limitation on liability.-Use of a credit for a non-Federal share under this subsection
that is received from a public, quasi-public, or private agency-
- shall not expose the agency to additional liability, additional regulation, or additional
administrative oversight; and
- shall not subject the agency to any additional Federal design standards or laws
(including regulations) as a result of providing the non-Federal share other than
those to which the agency is already subject.
- Chartered multistate agencies.-When a credit that is received from a chartered multistate
agency is applied to a non-Federal share under this subsection, such credit shall
be applied equally to all charter States
- Use of Federal Land Management Agency Funds.-Notwithstanding any other provision
of law, the funds appropriated to any Federal land management agency may be used
to pay the non-Federal share of the cost of any project the Federal share of which
is funded under this title or chapter 53 of title 49.
- Use of Federal Lands Highways Program Funds.-Notwithstanding any other provision
of law, the funds authorized to be appropriated to carry out the Federal lands highways
program under section 204 may be used to pay the non-Federal share of the cost of
any project that is funded under this title or chapter 53 of title 49 and that provides
access to or within Federal or Indian lands.