FEDERAL-AID POLICY GUIDE
December 9, 1991, Transmittal 1

23 CFR 633B

OPI: HEP-12

1. AUTHORITY. The Appalachian Region Development Act of 1965, and subsequent amendments thereto, hereinafter referred to as the Act (40 United States Code (U.S.C.) App.). Selected sections of the Act are attached as Attachment 1 (Selected Sections of the Appalachian Regional Development Act of 1965, as amended) for reference purposes.

2. FISCAL ALLOCATIONS AND OBLIGATIONS (23 CFR 633.204)

   1. The Act provides contract authority for financing the program in a manner similar to the regular Federal-aid highway program. The provisions of 23 U.S.C. 106(a) and 118 relating to the obligation, period of availability, and expenditure of Federal-aid highway funds, apply to the Development Highway System and the local access roads. Contract authority and funds appropriated by Congress are transferred to the Secretary by the Federal Co-chairman of the Appalachian Regional Commission (ARC). Obligational ceilings, within State allocations established by the ARC are transmitted, from time to time, from the ARC to the FHWA.

   2. The administration of Appalachian funds within obligational ceilings established by the ARC rests with the FHWA. Requests for increases over such ceilings should be referred by the State highway department through the appropriate ARC State representative to the ARC for approval. Except as provided in paragraph 4 of this directive, the division Administrator should not authorize the State to proceed with the work on any project unless there is sufficient unobligated balance of funds in theState's ceiling to cover the cost to be financed with Appalachian highway funds.

   3. Overruns on Appalachian development highway projects may be approved at the same percentage of Appalachian funds as the initial work authorized, within established obligational ceilings, by the Division Administrator. Overruns on local access road projects can be approved by the Division Administrator only after such overrun has been approved by the ARC. The State highway department should refer the overrun request through its ARC State representative to the ARC for approval.

   4. Development Highway System and local access road projects may be administered under the provisions of 23 U.S.C. 117. If a State wishes to adopt certification procedures, the procedures should be modified to explicitly include those projects using Appalachian funds.

3. APPROVAL PROCEDURES (No CFR paragraph reference)

   1. Authorization

      (1) Division Administrators may authorize work to proceed relating to the Development Highway System that are in accordance with the established order of priorities approved by the ARC. The establishment of priorities and changes thereof are governed by Section 201A-3 of the ARC Code. Work relating to local access roads should not be authorized unless the project has the approval of the ARC and at a cost not to exceed the cost estimate approved by the ARC. Projects financed with Appalachian funds need not appear in an annual program of projects. In the case of development highways, the programming of projects is accomplished by the ARC priority system and, in the case of local access roads, by the ARC approval of individual projects.

      (2) The Division Administrator may authorize work to proceed for route planning, location studies to develop detailed locations, and cost estimates on all sections of the Appalachian Development Highway Systems.

      (3) The Division Administrator may authorize work to proceed for design engineering and preparation of construction plans when:

      (a) such preliminary engineering work has been included in Classification A of the priority system developed under Section 201-3 of the ARC code,

      (b) the ARC has concurred in the detailed location (centerline), and

      (c) the State agrees to obligate State funds or any Federal funds for right-of-way acquisition or physical construction for the section within 5 years from the end of the fiscal year in which the project agreement for such engineering work is executed.

      (4) The Division Administrator may authorize the acquisition of rights-of-way to proceed when:

      (a) such right-of-way acquisition has been included in Classification A of the priority system developed under Section 201-3 of the ARC code,

      (b) the ARC has concurred in the detailed location (centerline), and

      (c) the State agrees to obligate State funds or any Federal funds for physical construction within 10 years from the end of the fiscal year in which the project agreement for suchacquisition is executed.

      (5) The Division Administrator may authorize physical construction to proceed when:

      (a) such construction has been included in Classification A or the priority system developed under Section 201-3 of the ARC code,

      (b) the ARC has concurred in the detailed location (centerline), and

      (c) the State has requested and received specific approval from the ARC Executive Committee to obligate orprefinance the construction activity. The State need not request such specific approval if the particular activity is in accordance with Section 201-3.5 of the ARC code as approved for construction as of June 30, 1973.

      (6) Insufficient Funds

      (a) Whenever insufficient funds are available for obligation within the State's allocation to finance the Federal share of estimated project costs, the following procedures apply:

      1 Allow one Appalachian development highway project in each Appalachian State to be funded as part Federal partici pating (APD) and part Advanced Construction (ACAPD) in any fiscal year. The maximum Federal share for such a combination project shall be limited to the lesser of the maximum Federal participation percentage for either APD or ACAPD projects. At the present time, this wouldlimit the final Federal share to 70 percent of the total eligible costs.

      2 Allow one project which has been authorized under Advance Con struction procedures or as a com bination APD-ACAPD project to have a portion of the Advanced Construction converted to Federal funding. Any combination project must be converted to full Federal funding before permitting the partial conversion of any other advanced construction project to Federal funding.

      (b) The procedure outlined above will allow the Appalachian States the flexi bility to fully implement ARC's allo cation policy. It would also retain the necessary administrative control by FHWA of this program.

   2. Project Identification

      (1) All projects located on the Appalachian Development Highway System to be financed with funds authorized under the Act should be identified by the prefix letters "APD" followed by the Federal-aid primary project number for that section of highway route, or if not on the primary system, that project number which will be assigned to that section of highway upon its inclusion in the primary system. The agreement num ber in parentheses should be the next available consecutive number in the series for that project number. Subsequent proces sing of documents should be the same as for a regular Federal-aid project on the primary system.

      (2) All projects financed with funds authorized under the Act for theconstruction of local access roads should be identified by the prefix letters "APL" followed by a four digit number. If the project is located on a Federal-aid system, the number should be the project number assigned to that section of highway route. If the project is not located on a Federal-aid system, the number should be a four digit number which has not been and will not be assigned to any project on the Federal-aid secondary system in that State, whether or not it is presently contemplated that the section of route including the project will ever be added to the Federal-aid secondary system. The project agreement number should be a three digit number consecutive in the current series. Subsequent processing of documents should be the same as for a regular Federal-aid project on the secondary system.

      • (3) Projects located on the Appalachian Development Highway System to be prefinanced by a State and with the intent of later financing in accordance with paragraph 4 below should be identified by the prefix letters "ACAPD" followed by the Federal aid primary project number for that section of highway route, or, if not on the primary system, that project number which would be assigned to that section of highway upon its inclusion in the primary system. The agreement number in parentheses should be the next available consecutive number in the series for that project number. Subsequent processing of documents for ACAPD projects should be in accordance with paragraph 4 below. Upon conversion of the project to financing with funds authorized under the Act, the prefix should be changed to "APD" and the remainder of the project number should remain unchanged.

   3. There should be no transfer of financing for work, on which Federal funds have beenobligated, between regular Federal-aid programs and the Appalachian program.

   4. If, in the construction or improvement of the development highways or local access roads, a State elects to eliminate the hazards of a railway-highway grade crossing under 23 U.S.C. 130, the Federal share of the cost of right-of-way and property damage cost necessary thereto cannot exceed 75 per centum, pursuant to 23 U.S.C. 120(c), regardless of whether the project is financed and such right-of-way is acquired under Federal-aid highway programs or the Appalachian program or combination thereof.

   5. The State highway department should be encouraged to propose immediate Federal-aid primary designation for any segment of an approved Appalachian development highway not already on the Federal-aid primary system at the time of the ARC's approval of the corridor.

4. PREFINANCING (23 CFR 633.205). Prefinancing of Appalachian Development Highway projects shall be in accordance with the procedures set forth in paragraph 3b(3) and as provided below:

   1. Advance construction Appalachian development projects may be programmed and advanced when all of the following four conditions are met:

      (1) The Project meets all requirements for the authorization of Appalachian development projects as set forth in paragraphs 3a(3), (4), and (5).

      (2) There are insufficient funds available for obligation within the State's allocation to finance the Federal share of estimated pro ject costs after considering the need for adjustments in the financing of previously programmed projects.

      (3) The Federal share of the project costs when considered together with all previous obligations of funds made available for development highways under the Act and the Federal share of other projects programmed under this section will not exceed the State's allocation of funds authorized for development highways under the Act as set forth in the ARC code, Section 201-8.1, or amendments thereto.

   2. The Federal share of project costs should be shown on the Form FHWA-37 and all succeeding project papers. In addition to the prefix "ACAPD" the project should be identified by Appropriation Code 640.

   3. The State may elect to convert an advance construction project to the Appalachian Development Highway Program at any time sufficient funds are available within the State's obligation ceiling. However, it may be advantageous to utilize such available funds for additional construction projects and defer the conversion of advance construction projects to the later years of the program. Approval of a State's written request for conversion of an advance construction project should be subject only to theavailability of funds for the Federal share of project costs.

   4. At such time as an advance construction project is converted to the Appalachian Development Highway Program, the Form FHWA-37 should be revised to document the conversion action. The project prefix "AC" should be dropped from each converted project and the appropriation code should be changed. The Federal funds amounts should then be posted to the appropriate fiscal records. The forms should contain added language as follows: "Conversion to Appalachian Development Highway Program." Duplicate copies of action papers are to be submitted by the Division Administrator.

   5. Progress vouchers should not be accepted for advance construction projects. Final vouchers may be submitted upon completion of construction and reviewed, but no payment should be made until the project is converted.

5. DESIGN AND LOCATION (No CFR paragraph reference)

   1. Unless otherwise directed, the design of highways on the Appalachian Development Highway System should be in accordance with standards, specifications, policies, and guides applicable to the design of comparable traffic volume highways, bridges, and appurtenances as enumerated in 23 CFR Part 625, Design Standards for Highway. The design of highways on the Appalachian Development Highway System should also meet the criteria approved by the ARC. (See Attachment 2.) (Approved criteria for Appa lachian Development Highway System).

   2. Design of local access roads should be in accordance with the State's procedures for projects on the secondary system. In order to expedite Commission action on State requests for approval of local access road projects, Division Administrators are authorized to review the design criteria and, where applicable, to concurwith the State certification that the criteria meet the design criteria applicable to secondary projects or that exceptions thereto are acceptable. Such certification and concurrence are expected to be attached to the submission by the State representative to the ARC. There may be instances in which a local access road approved by the ARC is included as a segment of the Federal-aid primary system. If this occurs, regular Federal-aid procedures will govern and the design criteria should be in accordance with AASHTO design standards.

   3. Location of all development highway projects should be coordinated with the ARC as set forth in Attachment 3. (Coordination with Appalachian Regional Commission).

   4. Public hearings on the economic and social effects of the location of proposed projects to be financed under the Act are subject to the provisions of 23 U.S.C. 128 as related to highway projects other than Interstate.

6. CONSTRUCTION, LABOR, AND MATERIALS (23 CFR 633.207)

   1. Form PR-1316 (Attachment 4)(Federal-Aid proposal Notices and required contracts. Provision Appalachian Development Highway System and Local Access Road Construction Contracts)and FHWA Notice N 5080.105 (Attachment 4A)(Interim Revisions to Federal Highway Administration (FHWA)Form PR-1316, Required Contract Provisions, Appalachian Development Highway System and Local Access Roads Construction Contracts)Interim Revisions to Form PR-1316, shall be included in all Appalachian Development Highway System, Development Access Road, and Local Access Road Construction Contracts for projects awarded on or after January 1, 1986. Procedures established in the FHWA Labor Compliance Manual for the enforcement of the contract labor standards requirements on Federal-aid projects should be followed on such construction projects except as noted inparagraphs 6b and 6f below.

   2. Enforcement and reporting procedures established by the Office of Civil Rights should be followed to assure compliance with the provision set forth in Form PR-1317 (Attachment 5) (Additional Required Contract Provisions Appalachian Development Highway System and Local Access Roads Contracts other than Construction Contracts) and Section III and IV of Form PR-1316.

   3. Copies of Forms PR-1316 and PR-1317 will be furnished to the States upon request to the FHWA division offices.

   4. Executive Order No. 11246 of September 27, 1965, is applicable to contractors and subcontractors engaged in the construction of projects under the Appalachian program.

   5. The maximum feasible employment of local labor should be made in the construction of projects under the Act. Accordingly, within one week following the contract award for a project under the Appalachian Development Highway System (including local access roads), the State highway department should advise the State Employment Service of the name and address of the contractor or to whom the award is made and, in addition, should forward to the State Employment Service a copy of the applicable wage determination. The State Employment Service should advise the contractor of the location of the appropriate local employment service office with which the contractor shall place the job order required by the contract.

   6. All questions and disputes involving the employment of local labor and the applicability of the Title VI employment practices provisions to State highway departments, contractors, subcontractors, materialmen, and lessors of equipment should be referred to the Washington Headquarters for resolution.

7. PROGRESS REPORTS (No CFR paragraph reference). The Federal Highway Administration will provide periodic reports required by the Appalachian Regional Commis sion concerning the process of the development high way and local access road programs, and the status of projects. The frequency and specific contents of reports will be determined in discussions between the Commission and the Federal Highway Administration (Attachment 6).

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