The provisions contained in sections 1108, 1119(b), 1935 and 1936 of Public Law 109-59, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) expanded the transferability of funds to other agencies and among programs. This memorandum consolidates processes and procedures for the following types of transfers:
To minimize the risk of Federal funds being designated as inactive, transfers should only be made when the funds are ready to be obligated by the receiving agency. As a general rule, obligation authority shall be transferred in the same manner and amount as the funds for projects that are transferred, in accordance with title 23 United States Code (U.S.C.) 104 (k)(4), as amended by section 1108 of SAFETEA-LU. An exception to this treatment occurs when a State chooses to pay the Federal share directly to another Federal agency and claim reimbursement from FHWA. (See "Transfers From a State to a Federal Agency Other Than FHWA or FTA" below.) An approved transfer of funds does not relieve the State's requirement to provide the non-Federal share for the costs of a project.
To facilitate the timely processing of all transfers, the State should use the attached FHWA transfer request form (Attachment 1) to identify appropriate information about fund type and amount, the entity receiving funds, necessary project detail, and other applicable certifications and requirements. Each section below outlines the specific requirements for different types of transfer requests. The Division Office should review, concur, and submit the scanned transfer request by e-mail to the Office of Budget to ensure timely processing, appropriate coordination among Headquarters program offices, and subsequent Division Office notification when all actions have been completed.
(1) TRANSFERS BETWEEN FHWA AND FTA.
As amended by section 1108 of SAFETEA-LU, 23 U.S.C. 104(k)(1) provides that title 23 funds made available for transit projects or for transportation planning may be transferred to FTA and administered under the provisions of chapter 53 of title 49, United States Code. Similarly, 23 U.S.C. 104(k)(2) provides that chapter 53, title 49 funds made available for highway projects or transportation planning may be transferred to and administered by FHWA. Comparable, but not identical, transfer provisions enacted with the Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991 are included in 49 U.S.C. 5334(h):
"(h) Transfer of Amounts and Non-Government Share.--(1) Amounts made available for a mass transportation project under title 23 shall be transferred to and administered by the Secretary of Transportation under this chapter. Amounts made available for a highway project under this chapter shall be transferred to and administered by the Secretary under title 23."
The transfer between FHWA and FTA is optional under the provisions of 23 U.S.C. 104 but is required under 49 U.S.C. 5334(h). The later enacted legislative provisions in 23 U.S.C. 104 govern transfers of title 23 funds.
Attachment 2 identifies (a) title 23 funds with transit eligibility that may be transferred to FTA, (b) FHWA funds with no transit eligibility that may be transferred to other title 23 programs with such eligibility, and (c) title 49 funds that have highway eligibility. Any unobligated title 23 funds transferred to FTA that are later transferred back to the FHWA will be reviewed on a case-by-case basis to determine the remaining period of funding availability.
(2) FROM A STATE TO FHWA OR FROM A STATE TO ANOTHER STATE.
As amended by section 1108 of SAFETEA-LU, 23 U.S.C. 104(k)(3) provides that a State may transfer funds apportioned or allocated under title 23, to another State or to the FHWA, with their concurrence, to finance a project eligible for assistance with those funds. In addition to facilitating transfers of funds for pool-funded planning or research studies, this provision permits transfers between States and to FHWA for other purposes. Pool-funded transfers will continue to be coordinated with the Office of Financial Services.
Funds apportioned or allocated to a State for the Surface Transportation Program (STP) and attributed to an urbanized area of a State with a population of over 200,000 individuals under 23 U.S.C. 133(d)(3), may be transferred to FHWA only if the metropolitan planning organization designated for the area concurs, in writing, with the transfer request form.
For a transfer under 23 U.S.C. 104(k)(3), the State should submit a completed FHWA transfer request form to the FHWA Division Office for review and concurrence. If the project being undertaken meets the requirements of title 23, the request will be forwarded to the Office of Budget for coordination of action.
For transfers to either FHWA, or to another State, the Office of Budget will coordinate with the FMIS Team to reduce the unobligated balance(s) of the applicable program funds of the State requesting the transfer. The FMIS Team will withdraw an equivalent amount of obligation authority from that State in FMIS.
If the transfer is from a State to FHWA, the Division Office will follow the "lock box" process for transmittal of any State funds submitted to the FHWA for the payment of the non-Federal share. If the transfer is to another State, the Office of Budget will coordinate with the FMIS Team to withdraw the obligation authority from FMIS and allocate the funds and obligation authority to the other State. The affected Division Office(s) will be notified when the transaction is completed.
After completion of the project, the receiving FHWA Division or Headquarters program office will coordinate with the Office of Budget to facilitate the return of any remaining contract authority and obligation authority to the State that transferred the funds following final payment. Any funds that are released shall be credited back to the same category of funds from which the funds were transferred. The Office of Budget will coordinate the return of any obligation authority with the affected Division Office to mitigate the risk of lapsing of the obligation authority.
For non-traditional projects for which the State DOT does not have the expertise to administer, and is either unable or unwilling to remain accountable by making a sub-grant to a sub-recipient; and an appropriate Federal agency does not have the necessary contracting authority with which to directly undertake the project, the State DOT may request a transfer to FHWA under the authority of 23 U.S.C. 104(k)(3). If the Division Office chooses not to administer the project, it will work with an appropriate Federal agency to provide oversight of the grant funding and project and provide the grant assistance to an entity eligible for assistance under the law. The FHWA Division Office will negotiate with the grantor Federal agency to ensure that applicable Federal requirements are carried out, and memorialize the framework under which the project or activity will be carried out. Generally, a transfer allocation will be established with the Federal agency receiving the funds and overseeing the grant activity (please contact the Office of Budget for details to effect such an allocation). For those Federal agencies unable to accept transfer allocations, but willing to administer grant funds on behalf of FHWA, the FHWA will enter into an inter/intra-agency agreement under the provisions of the Economy Act (please contact the Office of Acquisition Management for details).
(3) TRANSFERS BETWEEN TITLE 23 PROGRAMS.
As amended by section 1401(a)(3)(B) of SAFETEA-LU, 23 U.S.C. 126, Uniform Transferability of Federal-aid Highway Funds, provides for the transfers between the following programs:
Additionally, 23 U.S.C. 104(g), outlines a State's options for transferring apportioned Highway Bridge Program or Rail-Highway Crossing funds. There are several provisions that permit transfers above 50 percent or that limit transfers to less than 50 percent. Attachment 2 includes transfer provisions for specific programs.
To request a transfer under either 23 U.S.C. 104(g) or 23 U.S.C. 126, 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 attached provisions, indicate concurrence with the State's request, and submit the request to the Office of Budget for coordination of action. The FMIS Team will process transfers in FMIS.
(4) TRANSFERS FROM A STATE TO A FEDERAL AGENCY OTHER THAN FHWA OR FTA.
Section 132 of title 23, "Payments on Federal-aid projects undertaken by a Federal agency," as amended by section 1119 of SAFETEA-LU, provides that when a proposed Federal-aid project is undertaken by a Federal agency in accordance with an agreement between a State and the Federal agency, the State may direct the Secretary to transfer the funds for the Federal share of the project directly to the Federal agency.
Instead of a direct transfer, the State has the option to pay the Federal share directly to the Federal agency and then claim reimbursement from FHWA. For projects where the State has exercised the option to pay the Federal share directly to the Federal agency and then claim reimbursement from FHWA, any available funds remaining in excess of the Federal share as provided in the final voucher submitted by the State shall be recovered from the Federal agency, reimbursed to the State and credited to the same category of funds from which the Federal payment was made. Implementing Guidance was issued by the Office of Program Administration for High Priority Projects and Transportation Improvements (http://www.fhwa.dot.gov/specialfunding/congdesign.cfm) for the transfer of funds made available under SAFETEA-LU.
To request a transfer under 23 U.S.C. 132, the State should prepare and submit a completed FHWA transfer request form to the FHWA Division Office. The request should indicate: the project(s) to be financed with the transferred funds, the type and amount of funds to be transferred, the name of the Federal agency (including a point of contact) receiving the funds, and that the Federal agency has agreed to undertake the project(s). Upon receipt of the FHWA transfer request form, the Division Office must: determine that the project(s) being undertaken meets the requirements of title 23; concur in the State's request; and submit the request to the Office of Budget for coordination of action.
The State should also certify that an agreement is in place between the State and the Federal agency, accepting the transfer, ensuring that title 23 and other applicable Federal requirements will be met. The agreement must indicate that funds transferred to another Federal agency shall be administered in accordance with title 23 U.S.C. and all other applicable Federal requirements. These requirements include, but are not limited to, transportation planning, National Environmental Policy Act, title VI of the Civil Rights Act of 1964, participation of disadvantaged business enterprises, prevailing wage rates, and the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970. Other Federal agencies may utilize their own construction contracting requirements in lieu of those imposed on a State under title 23.
The State is responsible for any non-Federal share required on the project. Funds appropriated to a Federal Land Management Agency may be used to pay the non-Federal share as authorized under 23 U.S.C. 120(k). In addition, funds appropriated under 23 U.S.C. 204 to carry out Federal Lands Highway Program projects may be used to pay the non-Federal share of the cost of any project that is funded under title 23 or chapter 53 of title 49 and that provides access to or within Federal or Indian lands.
For non-traditional projects for which the State DOT does not have the expertise to administer, and is either unable or unwilling to remain accountable by making a sub-grant to a sub-recipient, the appropriate Federal agency does not have the necessary contracting authority with which to undertake the project, the State DOT may request a transfer to FHWA under the provisions of 23 U.S.C. 104(k)(3) for appropriate action. Please refer to section 2 of this memorandum for more information.
(5) TRANSFERS BETWEEN PROJECTS.
The flexibility permitted in SAFETEA-LU sections 1935 (Project Flexibility) and 1936 (Advances) will be in accordance with the High Priority Projects and Transportation Improvements Implementing Guidance (http://www.fhwa.dot.gov/specialfunding/congdesign.cfm) issued by the Office of Program Administration.
If there are questions concerning these provisions, please contact Dale Gray at (202) 366-0978 or Dave Bruce at (202) 366-0368, or via e-mail at email@example.com or firstname.lastname@example.org. For questions concerning specific transfer requests, please contact the Office of Budget.