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This Policy Memorandum was Canceled June 23, 1999.

FHWA Policy Memorandums - Office of Engineering

INFORMATION: Intermodal Surface Transportation
Efficiency Act (ISTEA) Implementation
Interstate Construction Program

Associate Administrator
for Program Development
Regional Federal Highway Administrators
Federal Lands Highway Program Administrator

The purpose of this memorandum is to provide written guidance regarding the provisions in the 1991 ISTEA, which change or impact the Interstate construction program.

Authorizations - Section 1001

Section 1001(a) declares that the Interstate construction (IC) funds authorized by the act are the final authorizations of funding to complete construction of the Interstate System. The authorizations of $1.8 billion per year for fiscal years 1993 through 1996 are specified in Section 1000(f). In some States, it may be necessary to supplement IC funds with other funds such as National Highway System (NHS) funds, or low priority work may be dropped from the Interstate program. An extension of the program or additional authorizations are not contemplated.

Apportionments - Section 1001

Section 1001(b) approved the 1991 Interstate Cost Estimate (ICE), and directed use of factors contained in the revised Table 5 of Committee Print 102-24, which were used in making apportionments for the FY 1993 funds. Section 1001(d) extends the administrative adjustment for FY 1994 through 1996. All previous credits, apportionments, lapses, withdrawals, discretionary allocations, and transfers of funds will be reflected as detailed in Section 1001(d).

Prior to making apportionments from the $1.8 billion authorized each year, a separate allocation is made to Massachusetts in accordance with Section 1001(e). Further, $20 million will be set aside each year to carry out the provisions of Section 1006(h) of the act. Apportionments to Wisconsin will be made as specified in Section 1045.

Section 1001(h) amends Section 102(c) of the 1987 Surface Transportation and Uniform Relocation Assistance Act, and eliminates the provision that no State receive less than one-half percent minimum apportionment. The flexibility provided at the end of Section 104(b)(5)(A) of Title 23 was not altered by the ISTEA. Thus, if the Secretary and a State highway department agree that a part of the apportionment of IC funds is not needed for that fiscalyear, the unneeded portion is not apportioned, but will be distributed under the Interstate discretionary program in accordance with Section 118 of Title 23. This agreement must be reached prior to the IC apportionment and so if any State is interested in this provision, inquiry should be made to the Program Analysis Division (HFS-30) well in advance of the scheduled IC apportionment.

Period of Availability - Section 1020

Section 1020(a) amends Section 118 of Title 23 and provides that IC funds, which are made available 1 year in advance, will be available until the last day of the fiscal year in which the funds are apportioned or allocated. This applies to all apportionments except the final apportionment, the FY 1996 funds, which will be apportioned on October 1, 1994, and will remain available until expended.

Federal Highway Administration Notice N4510.263, dated December 18, 1991, transmitted the certificate of apportionment of IC funds authorized for FY 1993. In a change to that notice issued February 27, 1992, paragraph 2b of the notice was revised to indicate that FY 1991 and 1992 IC apportionments are available until expended.

Federal Share - Section 1021

Section 1021 provides for a 90 percent Federal share for all IC funded projects, except for those that provide additional capacity, which will be funded at an 80-percent Federal share. The section provides for funding HOV and auxiliary lanes (truck climbing lanes, for example) at the 90 percent Federal share. It is believed that the Congress intended that all IC funded projects would retain the traditional 90 percent Federal share (with sliding scales up to 95 percent, where applicable). Technical correction language has been submitted to the Congressional committees to restore the 90 percent share. In the meantime, those portions of new IC funded projects that provide additional capacity (exclusive of HOV and auxiliary lanes) on existing Interstate routes shall be funded at an 80-percent Federal share.


The 1991 ISTEA did not change eligibility criteria for IC funds. Only work eligible under the provisions of the 1981 Federal-Aid Highway Act, and included in the 1981 ICE is eligible for IC funding.

Toll Roads, Bridges, and Tunnels - Section 1012

Section 1012(d) provides that existing toll agreements entered into under Section 129 of Title 23 prior to and in effect on the date of enactment of the 1991 ISTEA, shall continue in effect in accordance with the provisions of the agreement. Federal participation in the initial construction of toll roads, bridges, tunnels or approaches thereto on the Interstate System is not allowed under Section 129(a)(1)(A) where such facility was not covered by a Section 129 agreement in effect on the date of enactment of the 1991 ISTEA.

Discretionary Funds - Section 1020

Section 1020 amends Section 118(c) of Title 23 by reducing the amount of funds set aside for the Interstate Discretionary (ID) Program from $300 million annually to $100 million annually. A separate memorandum will be issued by Headquarters near the end of each fiscal year to seek applications for ID allocations.

Section 1020 has eliminated the priorities (i.e. #1 for gaps, etc.) of Section 118(b)(2)(B) of Title 23 previously used in allocating ID funds. Any specific criteria to be used in considering future candidates for discretionary allocations will be included in the memorandum seeking applications each year.

All ID funds set aside for the current fiscal year have been allocated. Refer to Mr. Willett's memorandum dated December 23, 1991, for details.


Section 119(d) of Title 23, providing for the transfer of IC apportionments, is essentially unchanged, except that the transfers will be from IC funds to NHS or Interstate Maintenance funds. Requests to transfer IC funds are limited to the Federal share of the cost to complete open-to-traffic work included in the 1991 ICE, and must be made in writing to the Office of Fiscal Services (HFS-30). Upon approval of the transfer, the work on which the transfer is based will be removed from the 1991 ICE and will lose its IC fund eligibility.

Disposition of Unobligated Funds - Section 1100

Section 1100(b) and (c) deal with the disposal of unobligated balances of funds apportioned prior to the act. The provision has been interpreted to apply to unobligated balances of FY 1991 and 1992 IC funds which were apportioned prior to September 30, 1991. The period of availability for these FY 1991 and 1992 apportionments will continue as prior to the act; available until expended. As a result, IC funds will lapse on September 30, 1992, (or 1993 or 1994) if the amount of unobligated IC funds is in excess of the total of FY 1991 and 1992 IC apportionments.

This guidance will be supplemented in the future if further clarifications are found necessary. Questions about any of these Interstate issues should be directed to the Interstate and Program Support Branch (HNG-13).

Original signed by:
/s/Kevin E. Heanue
for Anthony R. Kane

This Policy Memorandum was Canceled June 23, 1999.

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