Federal-aid Highways (Ob. Lim. and Exempt Contract Authority)

FY 2008 Request:                          $40,324,075
FY 2007 President’s Budget:        $39,821,962
FY 2007 Continuing Resolution:  $36,289,788

Overview: 

The Federal Highway Administration (FHWA) is charged with the broad responsibility of ensuring that America’s roads and highways continue to be the safest and most technologically up-to-date.  Although State, local, and tribal governments own most of the Nation’s highways, the Federal-aid Highway Program (FAHP) provides Federal financial resources and technical assistance to State and local governments for constructing, preserving, and improving the National Highway System, a 163,000-mile network that carries 40 percent of the Nation’s highway traffic.  The program also provides resources for one million additional miles of urban and rural roads that are not on the System, but that are eligible for Federal-aid.

Title 23 of the United States Code and other supporting legislation provide authority for the various activities of the FHWA.  Surface transportation authorizing legislation provides upper limits of funding of contract authority, with program levels established by annual limitations on obligations set in appropriations acts.  The Safe, Accountable, Flexible, Efficient Transportation Equity Act:  A Legacy for Users (SAFETEA-LU) authorized $193.1 billion for the FAHP for fiscal years 2005-2009.  The annual budget of approximately $40 billion is funded by fuel and motor vehicle excise taxes.

Funding proposed for the FAHP in 2008 is consistent with the base levels authorized in SAFETEA-LU and will be used to deliver the programs and projects envisioned in the authorizing legislation.

FY 2007 Base:

The budget reflects a full year Continuing Resolution (CR) level for the Federal-aid highway program in FY 2007, totaling $36.3 billion in budgetary resources, equal to the level enacted in FY 2006.  The CR level includes an obligation limitation of $35.6 billion for FAH programs and $739 million in exempt contract authority ($639 million for Equity Bonus and $100 million for Emergency Relief).  In addition, under the CR, $4.3 million in cancellations of new and unobligated balances of contract authority enacted in FY 2006 would continue in FY 2007. 

For the purpose of this budget presentation, the FY 2007 base reflects the CR level.  The CR level is $3.5 billion less than the FY 2007 President’s Budget request, which reflects total budgetary resources of $39.8 billion.  The FY 2007 President’s Budget reflected an obligation limitation of $39.1 billion (including $842 million for revenue aligned budget authority (RABA)) for FAH programs and $739 million in exempt contract authority, consistent with the levels authorized in SAFETEA-LU.

In FY 2007, FHWA will continue to implement the provisions of SAFETEA-LU and enhance efforts to increase oversight and accountability to ensure the protection of the large Federal investment, while maintaining the prerogatives of the States in the delivery of highway transportation projects to the public.

Anticipated FY 2007 Accomplishments:

FY 2007 funding will enable the FHWA to implement the programs authorized in SAFETEA-LU while working toward accomplishing the strategic goals and objectives of the Department and the Agency.  The following summarizes anticipated accomplishments to achieve the Agency’s performance goals (please refer to Section 4 of the budget for additional performance information and anticipated accomplishments).  Specific program funding levels for FY 2007 are detailed in the FY 2008 request section.

Safety

The FHWA will continue to deliver technical assistance, training, and public awareness programs to advance priorities in the delivery of national safety programs.  FY 2007 funding, including approximately $1 billion for the Highway Safety Improvement Program, will be used for a full range of highway safety related program efforts including: the implementation of new SAFETEA-LU provisions; redesign and construction of roadways and intersections to eliminate hazards; installation of safety improvement countermeasures, such as guardrails and rumble strips; and collecting crash and other safety-related data.  Funds will also be used to assist state and metropolitan areas in developing plans and policies to improve safety and to educate decision makers within the transportation planning process on the importance of safety. 

Reduced Congestion

In 2007, the FHWA plans to fund transportation-related improvements that address traffic congestion in critical areas.  Over $20 billion in funding apportioned to the States through the Surface Transportation, National Highway System, Interstate Maintenance, and Bridge Programs will contribute to improving mobility and infrastructure.  States will increase the capacity of the highway system, remove bottlenecks, accelerate the deployment of Intelligent Transportation System (ITS) technologies, develop the next generation of system operational capabilities, support the creations of needed institutional arrangements, and increase the use of effective operational strategies and techniques.  Funding will also support long-term research in operations and ITS and will be used to fund public education, technical assistance, and training to partner agencies and transportation system users.
FHWA will continue to fund transportation-related improvements in States to maintain and improve the National Highway System (NHS), including the Interstate system and non-NHS, and replace, rehabilitate, and preserve bridges and other infrastructure.  Funds will also be used to build needed transportation facilities, support long-term research, and provide public education, technical assistance, and training to partner agencies and transportation system users. In addition, FHWA will be able to fund the clean up, repair, restoration and/or reconstruction of highway facilities damaged during natural and man made disasters.

Also in FY 2007, Transportation Infrastructure Finance and Innovation (TIFIA) credit assistance will continue to support projects that otherwise might have difficulty in obtaining financing in existing capital markets.

Global Connectivity

FHWA will fund the development and dissemination of the analytic capability and professional capacity needed by Federal, State, international and private sector partners to understand freight movement, support U.S. foreign policy priorities and initiatives including expanded opportunities and access for U.S. transportation industry, and support the FHWA’s efforts to coordinate highway transportation infrastructure and operations with planned changes at U.S. land borders.   This includes data analysis tools, network performance metrics, improved freight modeling capability, professional capacity building, continuation of grants for both multi-state corridor and border efforts, linkages between investment decisions and impacts on land ports of entry, linkages between freight transportation and our national and regional economies, and improved bi-national planning.  States and Metropolitan Planning Organizations (MPOs) will also use these resources to improve freight movement into and through major trade transport gateways and hubs, improve the transportation infrastructure that connects these gateways to the Nation’s mainline transportation networks, and relieve congestion related to high levels of truck traffic. 

Environmental Stewardship

In 2007, the FHWA will fund transportation improvement projects in States to help reduce mobile source emissions and adverse environmental effects.  Funding, including $1.7 million for the Congestion Mitigation and Air Quality (CMAQ) Improvement program, will also be used for research, technical assistance, and public education initiatives to improve air quality.
 
The FHWA and States will protect and enhance the Nation’s wetlands and aquatic resources, helping the FHWA to achieve its goal of conservation of natural habitats and ecosystems, protect wildlife populations while enhancing safety and reduce impacts on land and water resources.  The number of Exemplary Ecosystem Initiatives undertaken will be the primary measure demonstrating accomplishment in environmental stewardship.

Funds will also be used for research, technical assistance, and public education initiatives to support further implementation of exemplary ecosystem and habitat conservation initiatives.   These activities are consistent with congressional directives to develop rapid methods of ecosystem impact assessment and enhance the scenic beauty of highways.

The FHWA will implement environmental streamlining activities that encourage States and resource agencies to establish and meet timelines for all projects with an Environmental Impact Statement or Environmental Assessment, use the Executive Order 13274 to resolve obstacles to environmental review early and develop new streamlined procedures, promote widespread implementation of environmental stewardship during project development through Context Sensitive Solutions (CSS), and promote processes that integrate environment and transportation decision making in more States.  In addition, funding will serve as a surrogate for measuring implementation of the SAFETEA-LU environmental process provisions.

Security, Response, and Preparedness

The FHWA will work with the State departments of transportation to implement critical security enhancement activities in the areas of critical infrastructure vulnerability assessments and countermeasure deployment; emergency operations, preparedness and response; freight and border security operations; and national defense mobility using the Strategic Highway Network.
 
The FHWA will to continue to address state and local needs in recovering from natural and man-made disasters, to provide technical assistance and guidance to Federal-aid Highway Program fund recipients on strategies designed to protect critical transportation infrastructure from attack as well as in responding to emergencies of all types.

Organizational Excellence

The FHWA will contribute to the DOT Organizational Excellence strategic objective to implement the reform initiatives in the President’s Management Agenda (PMA), including activities contributing to the goal to achieve strategic management of human capital, competitive sourcing goals, financial performance goals, budget and performance integration goals, and e-government goals.  The FY 2007 CR level would fund a Limitation on Administrative Expenses of $361.0 million to accomplish FHWA’s Organizational Excellence performance goals.

FY 2008 Budget Request: 

The FY 2008 budget request totals $40.3 billion for the Federal-aid Highway Program (FAHP).  This funding reflects the base level authorized in SAFETEA-LU and includes an obligation limitation of $39.6 billion for FAH programs and $739 million in exempt contract authority ($639 million for Equity Bonus and $100 million for Emergency Relief).  The budget does not propose an increase to the obligation limitation for the revenue aligned budget authority (RABA) adjustment.

The FY 2008 request includes an obligation limitation of $429.8 million for research programs and a Limitation on Administrative Expenses of $384.6 million.  In addition, the budget proposes $175 million for Congestion Initiative activities in support of the Department-wide National Strategy to Reduce Congestion on America’s Transportation Network, to be funded by reprogramming unobligated balances of Federal-aid highway program inactive demonstration and other projects.  The budget request also proposes $2.0 billion in cancellations of new and unobligated balances of FAH contract authority.

The budget supports the Department’s goals and policy initiatives, and the Agency’s priorities of improving highway safety, minimizing project delays, reducing traffic congestion, and promoting environmental stewardship.  In FY 2008, the FHWA will continue to implement highway programs authorized in SAFETEA-LU, undertake efforts to improve financial stewardship and oversight, and carry out the President’s Management Agenda. 

Authorized contract authority and estimated obligation limitation amounts for FAH programs in FY 2007 and 2008 are detailed below.  FY 2007 reflects estimated amounts under a full year CR.  [Note:  Amounts are net of authorized set-asides and takedowns.  FY 2007 obligation limitation amounts do not include RABA adjustment].

(in thousands of dollars)
Surface Transportation Program                                                     FY 2007                FY 2008
Contract Authority                                                                          $6,339,564            $6,371,818
Obligation Limitation (Est.)                                                              $4,887,757            $6,047,753

The Surface Transportation Program (STP) provides flexible funding that may be used by States and localities for projects on any Federal-aid highway, including the NHS, bridge projects on any public road, transit capital projects, and intracity and intercity bus terminals and facilities.  Program eligibilities include advanced truck stop electrification systems, high accident/high congestion intersections, and environmental restoration and pollution abatement, control of noxious weeds and aquatic noxious weeds, and establishment of native species.  Funds will be distributed among the States based on lane-miles of Federal-aid highways, total vehicle-miles traveled on those Federal-aid highways, and estimated contributions to the Highway Account of the Highway Trust Fund (HTF).  Each State must set aside a portion of their STP funds (10 percent or the amount set aside in 2005, whichever is greater) for transportation enhancements activities. 

National Highway System                                                               FY 2007                FY 2008
Contract Authority                                                                          $6,019,475            $6,050,338
Obligation Limitation (Est.)                                                              $4,640,971            $5,742,624

The National Highway System is a 163,000-mile system of significant rural and urban roads serving major population centers, international border crossings, intermodal transportation facilities, and major travel destinations.  It includes the Interstate System, other urban and rural principal arterials, highways that provide motor vehicle access between the NHS and major intermodal transportation facilities, the defense strategic highway network, and strategic highway network connectors.  The NHS program provides funding for improvements to rural and urban roads that are part of the NHS, including the Interstate System and designated connections to major intermodal terminals. Under certain circumstances, NHS funds may also be used to fund transit improvements in NHS corridors.  The formula to distribute funding is based on lane-miles of principal arterials (excluding Interstate), vehicle-miles traveled on those arterials, diesel fuel used on the State’s highways, and per capita principal arterial lane-miles.

Interstate Maintenance                                                                   FY 2007                FY 2008
Contract Authority                                                                          $4,929,198            $4,954,606
Obligation Limitation (Est.)                                                              $3,800,376            $4,702,620

Under SAFETEA-LU, the 46,000 mile Dwight D. Eisenhower National System of Interstate and Defense Highways retains a separate identity within the NHS.  The Interstate Maintenance (IM) program was established under the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) to provide for the on-going work necessary to preserve and improve Interstate highways.  The IM program provides funding for resurfacing, restoring, rehabilitating and reconstructing (4R) most routes on the Interstate System.  Funding will be distributed by formula based on each State’s lane-miles of Interstate routes open to traffic, vehicle-miles traveled on those routes, and contributions to the Highway Account of the Highway Trust Fund attributable to commercial vehicles.

Bridge Program                                                                                FY 2007                FY 2008
Contract Authority                                                                          $4,211,748            $4,233,515
Obligation Limitation (Est.)                                                              $3,247,227            $4,018,202

The Highway Bridge Program provides funding to enable States to improve the condition of their highway bridges through replacement, rehabilitation, and systematic preventive maintenance.  Funding is provided to States to improve the condition of their eligible highway bridges over waterways, other topographical barriers, other highways and railroads.  Each State must spend at least 15% of its bridge apportionment for bridges on public roads that are not Federal-aid highways (off-system bridges).

Congestion Mitigation and Air Quality Improvement                   FY 2007                FY 2008
Contract Authority                                                                          $1,718,513            $1,727,235
Obligation Limitation (Est.)                                                              $1,324,961            $1,639,390

The Congestion Mitigation and Air Quality Improvement (CMAQ) Program provides funding for projects and programs in air quality nonattainment and maintenance areas for ozone, carbon monoxide (CO), and particulate matter (PM-10, PM-2.5) which reduce transportation related emissions.  CMAQ provides a flexible funding source to State and local governments for transportation projects and programs to help meet the requirements of the Clean Air Act.  Funding is available for areas that do not meet the National Ambient Air Quality Standards (nonattainment areas) as well as former nonattainment areas that are now in compliance (maintenance areas).  The formula for distribution of funds considers an area’s population by county and the severity of its ozone and carbon monoxide problems within the nonattainment or maintenance area, with greater weight given to areas that are both carbon monoxide and ozone nonattainment/maintenance areas. 

Highway Safety Improvement Program                                          FY 2007                FY 2008
Contract Authority                                                                          $1,050,888            $1,055,929
Obligation Limitation (Est.)                                                                 $810,227            $1,002,226

SAFETEA-LU authorized a new core Federal-aid funding program beginning in FY 2006 to achieve a significant reduction in traffic fatalities and serious injuries on all public roads.  The Highway Safety Improvement Program (HSIP) provides flexibility to allow States to target funds to their most critical safety needs.  Of the funding authorized for HSIP, a portion is set aside for the Railway-Highway Crossing program, with the remainder to be distributed by formula based on each State’s lane miles, vehicle miles traveled, and number of fatalities, a portion of which is to be set aside annually for construction and operational improvements on high-risk rural roads.  The HSIP requires States to develop and implement a strategic highway safety plan and submit annual reports to the Secretary that describe at least 5% of their most hazardous locations, progress in implementing highway safety improvement projects, and their effectiveness in reducing fatalities and injuries.

Equity Bonus                                                                                    FY 2007                FY 2008
Contract Authority                                                                          $8,136,500            $8,536,197
Obligation Limitation (Est.)                                                              $6,849,024            $8,203,773

The Equity Bonus provides funding to States based on equity considerations. These include a minimum rate of return on contributions to the Highway Account of the Highway Trust Fund, and a minimum increase relative to the average dollar amount of apportionments under SAFETEA-LU.  Selected States are guaranteed a share of apportionments and High Priority Projects not less than the State’s average annual share under SAFETEA-LU.  This program replaces the Transportation Equity Act for the 21st Century’s (TEA-21’s) Minimum Guarantee program.

Federal Lands Highways                                                                 FY 2007                FY 2008
Contract Authority                                                                             $892,107               $954,000
Obligation Limitation (Est.)                                                                 $722,584               $908,208

The Federal Lands Highways program (FLHP) provides funding for Indian Reservation Roads (IRR), Park Roads and Parkways, Public Lands Highways (discretionary and Forest Highways), and Refuge Roads programs.  Funding can be used for transportation planning, research, engineering, and construction of highways, roads, and parkways and transit facilities that proved access to or within public lands, national parks, and Indian reservations.  In addition, FLHP funds can be used as the State or local match for most types of Federal-aid highway funded projects. Eligible uses of Public Lands Highways funds include up to $20 million per year for maintenance of Forest Highways, $1 million per year for signage identifying public hunting and fishing access, and $10 million by the Secretary of Agriculture to facilitate the passage of aquatic species beneath roads in the National Forest System. 

High Priority Projects                                                                      FY 2007                FY 2008
Contract Authority                                                                          $2,987,405            $2,966,400
Obligation Limitation (Est.)                                                              $2,419,870            $2,824,013

The High Priority Projects Program provides designated funding for specific projects identified in SAFETEA-LU. A total of 5,091 projects are identified, each with a specified amount of funding over the 5 years of SAFETEA-LU.

Projects of Regional or National Significance                                FY 2007                FY 2008
Contract Authority                                                                             $447,899               $444,750
Obligation Limitation (Est.)                                                                 $362,809               $423,402

The Projects of National and Regional Significance program provides funding for designated high cost projects of national or regional importance.  Benefits could include improving economic productivity, facilitating international trade, relieving congestion, and improving safety.

National Corridor Infrastructure
 Improvement Program                                                                    FY 2007                FY 2008
Contract Authority                                                                             $490,448               $487,000
Obligation Limitation (Est.)                                                                 $397,275               $463,624

The National Corridor Infrastructure Program is a discretionary program that provides funding for construction of highway projects in corridors of national significance to promote economic growth and international or interregional trade. This program replaces TEA-21 section 1118, the National Corridor Planning and Development program.

Transportation Improvements                                                         FY 2007                FY 2008
Contract Authority                                                                             $643,332               $638,809
Obligation Limitation (Est.)                                                                 $521,115               $608,146

The Transportation Improvements program provides designated funding for specific projects identified in SAFETEA-LU. A total of 466 projects are identified, each with a specified amount of funding over the 5 years of SAFETEA-LU.

Appalachian Development Highway System                                  FY 2007                FY 2008
Contract Authority                                                                             $463,631               $470,000
Obligation Limitation (Est.)                                                                 $382,032               $447,440

The Appalachian Development Highway System (ADHS) Program continues funding for the construction of the Appalachian corridor highways in 13 States to promote economic development and to establish a State-Federal framework to meet the needs of the region.

Transportation, Community,
and System Preservation Program                                                  FY 2007                FY 2008
Contract Authority                                                                               $51,012                 $61,250
Obligation Limitation (Est.)                                                                   $49,965                 $58,310

The TCSP Program is intended to address the relationships among transportation, community, and system preservation plans and practices and identify private sector-based initiatives to improve those relationships.  State and local governments, MPOs, and tribal governments are eligible for discretionary grants to carry out eligible projects to integrate transportation, community, and system preservation plans and practices.  Funds must be equitably distributed to a diversity of populations and geographic regions.

Transportation Infrastructure Finance
 and Innovation (TIFIA)                                                                   FY 2007                FY 2008
Contract Authority                                                                             $101,607               $122,000
Obligation Limitation (Est.)                                                                   $99,523               $116,144

The TIFIA program provides Federal credit assistance to nationally or regionally significant surface transportation projects, including highway, transit and rail. The program is designed to fill market gaps and leverage substantial private co-investment by providing projects with supplemental or subordinate debt.  TIFIA provides secured loans, loan guarantees, and lines of credit for surface transportation infrastructure projects of national or regional significance.  An explicit goal of the TIFIA program is to induce private and non-Federal investment in transportation infrastructure.  Eligibility extends to highway, transit, or railroad projects at least $50 million in project costs or any ITS projects at least $15 million in project costs.  Projects can also include intermodal freight transfer facilities, international bridges or tunnels, and multi-state trade corridors.

Transportation and ITS Research                                                  FY 2007                FY 2008

Contract Authority                                                                             $373,662               $429,800
Obligation Limitation (Est.)                                                                 $373,662               $410,466

The purpose of the research and technology program is to develop new transportation technology that can be applied nationwide.  The elements of the program include surface transportation research, development and deployment; University Transportation Research; training and education to develop and apply new technology; and other research-related programs.  It will also support the continuation of the Bureau of Transportation Statistics’ major programs to provide convenient access to transportation data and information and to conduct transportation surveys and analysis.

$3.6 million for the Global Positioning System Program. As part of FHWA’s research program, the Department of Transportation proposes to provide resources to the Department of Defense for assessment, development, acquisition, implementation, operation, and sustaining of additional designated Global Positioning System civil capabilities beyond the second and third civil signals already contained in the current Global Positioning System Program.  FHWA requests the reprogramming of $3.6 million of unobligated balances of highway funds to be used to develop the new GPS L1C civil signal (modernized signal compatible with the EU Galileo Open Service signal on the new GPS III satellites), and for GPS Civil Signal Monitoring that entails software and hardware upgrades for global monitoring of all civil signals to include L1C/A, L2C, L5, and L1C.

Surface Transportation Research, Development
and Deployment                                                                           FY 2007                FY 2008
Contract Authority                                                                       $169,159               $196,400
Obligation Limitation (Est.)                                                           $169,159               $186,973

Training and Education                                                                 FY 2007                FY 2008
Contract Authority                                                                        $22,997                 $26,700
Obligation Limitation (Est.)                                                            $22,997                 $25,418

University Transportation Research                                               FY 2007                FY 2008
Contract Authority                                                                         $60,033                 $69,700
Obligation Limitation (Est.)                                                             $60,033                 $66,355

ITS Standards, Research and Development                                   FY 2007                FY 2008
Contract Authority                                                                         $94,743               $110,000
Obligation Limitation (Est.)                                                             $94,743               $104,720

Bureau of Transportation Statistics                                                FY 2007                FY 2008
Contract Authority                                                                         $26,730                 $27,000
Obligation Limitation (Est.)                                                             $26,730                 $27,000

Other Programs                                                                                FY 2007                FY 2008
Contract Authority                                                                          $2,980,381            $2,071,786
Obligation Limitation (Est.)                                                              $2,348,615            $1,968,734

This category includes the following programs:  Recreational Trails, National Scenic Byways, Coordinated Border Infrastructure, Ferry Boats, Highway For Life Pilot, Highway Use Tax Evasion, Truck Parking Facilities, Delta Regional Transportation Development, Work Zone Safety, National Historic Covered Bridge Preservation, the Puerto Rico Highway Program, the Denali Access System, and other programs.  An additional amount of obligation limitation for FY 2007 is set aside for allocated carryover.

Equity Bonus (exempt)                                                                    FY 2007                FY 2008
Contract Authority                                                                             $639,000               $639,000

A portion, $639 million, of the Equity Bonus program described above is exempt from the obligation limitation.

Emergency Relief (exempt)                                                             FY 2007                FY 2008
Contract Authority                                                                             $100,000               $100,000

The Emergency Relief (ER) program provides funds for the repair or reconstruction of Federal-aid highways and roads on Federal lands that have suffered serious damage as a result of natural disasters or catastrophic failure from an external cause.  The regular ER program is funded by a permanent authorization of contract authority from the Highway Trust Fund with obligations not to exceed $100 million per year, available until expended, and exempt from the Federal-aid highway obligation limitation under 23 USC 125.

In addition to the permanent authorization, SAFETEA-LU authorizes from the General Fund of the Treasury such sums as may be necessary to supplement the permanent authorization in years when ER allocations exceed $100 million.  No additional funding is requested in the FY 2008 budget.

Congestion Initiative                                                                        FY 2007                FY 2008
Contract Authority (non-add)                                                                     N/A             [$175,000]

In support of the Department’s National Strategy to Reduce Congestion on America’s Transportation Network, the budget proposes to reprogram $175 million in unobligated balances associated with Federal-aid highway program inactive demonstration and other projects.  The $175 million will be distributed in support of the Congestion Initiative as follows:

• $100 million for the Value Pricing Pilot Program.  The $100 million would be in addition to the $12 million authorized in SAFETEA-LU for the Value Pricing Pilot Program in FY 2008, bringing the total program to $112 million.  This infusion of funds would allow FHWA to accelerate progress in advancing the Urban Partnership Agreement track of the Congestion Initiative, which aims to implement pricing programs in selected metropolitan areas.  The funding would be used to assist selected States in constituency building, outreach, program development, implementation and/or evaluation related to charging for the use of portions of their highway systems to better manage demand and enhance system performance.

• $25 million to support a new Corridors of the Future program.  These funds would be utilized on a discretionary basis by the Secretary to facilitate development of selected Corridors of the Future projects.  These funds would be eligible for expenditure across the spectrum of project development including preliminary engineering, and purchasing of financial or environmental expertise.  In addition, other preconstruction activities such as planning, feasibility analysis, revenue forecasting (for tolled facilities), and preliminary design work would be eligible expenses.

• $25 million for the Real-time System Management Information Program.  Funding to support the Real-time System Management Information Program (authorized in section 1201 of SAFETEA-LU) will be provided to State and local transportation agencies to plan or implement monitoring services collecting information relative to the program.  Activities will include: analyzing and revising regional ITS architectures to accommodate program requirements; planning and developing projects for acquiring monitoring services or integrating information from various services; conducting studies to identify and address issues related to using privately provided information services to satisfy program requirements; and developing communications portals to provide access to program information.

• $25 million for the ITS R&D program to expand congestion-related research activities.  These funds would support one or more new major ITS initiatives focused on reducing congestion.  These major initiatives would include the research, development, and operational testing necessary to bring innovative, multi-modal solutions to the transportation marketplace.  Areas to be explored would include: major advances in the acquisition and delivery of real-time traffic information; improved technology for identifying and responding to incidents; effective operational improvements to address traffic flow bottlenecks; and/or enhanced management techniques for controlling and balancing traffic flows along freeways and major arterials.

Operating Expenses (Ob. Lim.)

FY 2008 Request:                           $384,556
FY 2007 President’s Budget:         $372,504

FY 2007 Continuing Resolution:   $360,992

Overview:  

This account provides for the necessary resources to support Limitation on Administrative Expenses activities and maintain the agency’s administrative operations.  Funding will support activities related to the goals of the President’s Management Agenda, implementing the requirements of the SAFETEA-LU authorization, and meeting other Federal mandates.

FY 2007 Base:

The Limitation on Administrative Expenses funds salaries and benefits, travel, rent, communications, utilities, printing, contractual services, supplies and equipment.  As shown in Exhibit II-6, the FY 2007 estimate totals $361.0 million.  This level reflects a full year Continuing Resolution (CR) and includes $248.6 million for the salaries and benefits for 2,215 full time equivalents (FTE), which is below the authorized staffing level.  The FY 2007 CR level also includes $26.4 million for rent, $15.2 million for the Working Capital Fund, $9.7 million for travel, and $61.0 million for other activities critical to maintaining the agency’s administrative operations. 

For the purpose of this budget presentation, the FY 2007 base reflects the CR level.  The CR level is $11.5 million less than the FY 2007 President’s Budget request, which reflects an obligation limitation for LAE of $372.5 million.

Anticipated FY  2007 Accomplishments:

The FHWA will implement improvements and corrective actions identified in the accountability reviews of the performance management system and the employee recognition system.  The Agency will also finalize an accountability review plan for FY 2007 and conduct an accountability review of selected staffing and recruitment programs in the talent area.  Further accountability review activity will be coordinated with the DOT Accountability Review Program Plan.

The FHWA will shift to a multidisciplinary workforce, while continuing to assess the needed skill change of employees through workforce planning and closing the gaps in mission critical occupations in anticipation of the significant number of employees retiring.  The Agency expects that the cultural shift to an organization committed to project oversight and effective financial management will be fully operational.  The Professional Development Program will be used to hire individuals in critical disciplines, including financial management.  Recruitment incentives will be critical to attracting individuals with the needed multidisciplinary skills.  The FHWA will implement actions necessary to change the skills mix of the financial management workforce.  The Agency’s learning and development program will train increasing numbers of employees in project oversight and financial management and incorporate the multidisciplinary files and accountability and at all levels of training.  Plans to fund rotational assignments for mid-career hires to ensure that they have the skills needed to perform on the job.  Numerous training programs will be offered via videoconferencing and web conferencing.  These include Support Staff Training, parts of the New Supervisor Training and the New Employee Orientation. The FHWA will continue to implement the Diversity Action Plan and create an organizational climate that enables a multidisciplinary workforce to achieve the strategic goals of the Agency.  Recruitment incentives will be used to attract individuals with diverse skills and backgrounds.  The Agency will work to reduce the under-representation of Hispanic employees and individuals with disabilities.

The FHWA plans to ensure that awards are being used to recognize achievements that advance the Agency’s goals and objectives.  The Agency will carefully monitor that these Agency goals and objectives, as stated in the Agency Performance Plan and the Administrator’s Performance Agreement with the Secretary, are cascaded down to Senior Executives’ performance objectives and to the performance plans of individual employees, and are used as the basis for recognizing and rewarding employee accomplishments.  The Agency will use approximately 1% of the salaries paid in FY 2007 for its employee recognition and awards budget to support this strengthening of the performance culture in the FHWA in FY 2007.

In its role as the “Executive Agent” for the DOT automated staffing unit, FHWA will continue to enhance the automated staffing system and work with the modal administrations within DOT to improve timeliness of selections.  In FY 2006, the performance measurement of the 45-Day model for the Department was changed to track the percentage of cases that met the 45 workday goal as opposed to the average number of days.  The Executive Agent will work with each mode to promote awareness of the goal and improve timeliness of the actions such that 80 percent of certificates are signed by the Selecting Officials within 45 workdays from the date the announcement closes.  The Executive Agent will continue to reduce the average number of days to 7 days or less and to issue 90 percent of certificates within 15 days, with over 80 percent being issued within 7 days.

The FHWA plans continued accomplishments in the IT e-Gov area in FY 2007.  The accomplishments include continuing to lead a Departmental e-Government committee to work on crosscutting IT initiatives, completing the consolidation of IT infrastructure in the Field as a matter of best practice and conform the Field infrastructure with IT in Headquarters, continuing to improve and refine the FHWA enterprise architecture, and continuing to improve and refine management of the FHWA IT portfolio.  The FHWA will continue to enhance IT security and support the 24 E-Gov initiatives through contributions and partnering.

In FY 2007, new versions of the Department of Interior’s Federal Personnel and Payroll System (FPPS) will be implemented as they become available.

FHWA anticipates implementing the advanced functionality, Individual Development Plan (IDP), within the DOT Electronic Learning Management System (eLMS) in FY 2007. 

The Enterprise Human Resource Integration (EHRI) is an e-Gov initiative under the President’s Management Agenda, which includes implementation of the Electronic Official Personnel File (e-OPF).  In FY 2007, the FHWA will begin to convert paper OPFs to electronic format.

FY 2008 Budget Request: 

FHWA requests $384.6 million for the Limitation on Administrative Expenses (LAE).  In addition, SAFETEA-LU authorizes $3 million for administrative expenses of the Appalachian Regional Commission (ARC) and $3.5 million for audits conducted by the DOT Office of Inspector General. 

The FY 2008 estimate reflects increases to the FY 2007 estimate for cost of living adjustments (COLA), filling mission-critical vacancies, rent costs, and Working Capital Fund costs.  The adjusted base totals $369.3 million, an increase of $8.3 million above the FY 2007 CR level.

As detailed in Exhibit II-6, the requested increase in FY 2008 is needed to cover the expenses of COLA and of filling 215 mission-critical vacancies, increased rent costs, and increased Working Capital Fund assessments.  As a result of hiring up to the authorized FTE level in FY 2008, FHWA estimates additional salaries and benefits costs of $15.2 million in FY 2008.

LAE funding will also be utilized to support the Department-wide Congestion Initiative.  This funding will address the following potential needs:

• Increased staff support and expertise in key emerging program areas such as public private partnerships, congestion pricing, and system operations.

• Travel to congested metropolitan areas to promote key elements of the Congestion Initiative and to evaluate the benefits of major tests or demonstrations.

• Increased technical assistance to State and local partners advancing leading-edge congestion-reducing projects or programs.

• Extensive outreach and communications on the Congestion Initiative, including publication services, exhibits, and websites.

FHWA expects to accomplish the operational activities described below in FY 2008.

By FY 2008, the FHWA will have fully developed and implemented an ongoing multi-year schedule of accountability reviews addressing other specific program areas in accordance with the DOT Accountability Review Program Plan and the FHWA Accountability Review Program.  In addition, follow-up assessments will be initiated to measure the effectiveness of program improvements implemented as a result of previous Accountability Reviews.
The FHWA will continue to improve IT e-Gov initiative through e-Government committees, refinement of the FHWA enterprise infrastructure and management of the IT portfolio and enhance IT security.
The FHWA will continue to implement new versions of FPPS as they are offered. 
The FHWA will implement new functionalities within eLMS, including competencies and building course curriculum. 
The FHWA will continue to improve the automated staffing system and work with DOT Administrators to improve the timeliness of the selection process.
In FY 2007, as part of the Enterprise Human Resource Integration (EHRI) as an e-Government initiative under the President’s Management Agenda, the FHWA initiated the conversion of paper Official Personnel Files (OPFs) to electronic Official Personnel File (e-OPF).  In FY 2008, the FHWA will convert the remaining paper OPFs to electronic format and will implement full usage of e-OPF.
The FHWA will have fully developed and implemented an ongoing multi-year schedule of accountability reviews addressing the alignment of the organization’s performance plan with executive, supervisor and employee performance and their recognition/awards to achieve more a effective pay-for-performance program.
 
To implement OPM’s accountability initiative, FHWA will continue to integrate into our business processes additional components of an accountability system that provides consistent means to monitor and analyze agency performance on all aspects of human capital management policies, programs, and activities, which must themselves support mission accomplishment and be effective, efficient, and in compliance with merit system principles.

The Agency’s focus on pay-for-performance will be results-driven, producing a distribution of pay adjustments and awards based on individual contribution, organizational performance, and/or team performance.  Follow-up assessments will be conducted to measure the effectiveness of program improvements implemented as a result of previous Accountability Reviews.

The FHWA is in a transition period and facing the possible retirement of a substantial portion of its workforce over the next 5 years.  The Agency will recruit extensively to attract top quality candidates with diverse competencies so FHWA can achieve its mission through a multi-disciplinary workforce.  The Succession Plan will be implemented to ensure its workforce has depth in leadership skills to replace retiring employees. 

The FHWA learning community will implement a more coordinated, more comprehensive view of employee development.  Learning will be part of a career development plan tied to the FHWA strategic and performance goals, competencies and career paths.  Together, the FHWA learning organizations will continue to engage in delivering learning activities that affect every segment of the FHWA.  The FHWA will persist in transitioning to an organization that:

• Embraces a multidisciplinary workforce of technical specialists and generalists
• Provides technical assistance and high level program oversight
• Develops its leaders through multiple learning opportunities
• Is “nimble to change” according to new program requirements

The FHWA will support the Human Capital Initiative by providing a variety of competitive management and executive training programs geared to the development of our leaders.  With many supervisors and managers becoming retirement-eligible, we are developing the next generation of leaders to lead the FHWA into the future.  FHWA will also fund rotational assignments and mid-career hires to ensure they have the skills needed to perform their job.

FHWA will support delivery of training and learning activities to improve financial accountability at every level of the organization.  Through degree and certificate programs, FHWA will support education and training in the areas of project management, business and financial and engineering management, as well as other areas that enhance the financial performance and abilities of employees.

Overview: 

This account provides for the necessary resources to support Limitation on Administrative Expenses (LAE) activities and maintain the agency’s administrative infrastructure.  Funding will support activities related to the goals of the President’s Management Agenda, implementing the requirements of the SAFETEA-LU legislation, and meeting other Federal mandates.

LAE, FY 2007 Continuing Resolution

$360,992

Adjustments to Base:

Salaries and Benefits

The requested increase is needed for Personnel Compensation and Benefits (PC&B) related annualizations.  Assumes 2.2% pay raise and two additional compensable days as compared with FY 2007.

GSA Rent and Utilities

The requested increase for GSA rent is due to inflation.

Other Contractual Services
The requested increase for the Working Capital Fund is assigned by the Department due to an increase in the services provided.

+$6,301

+$498

+$1,539

Total Adjustments to Base:

$8,338

Program Changes:

Salaries and Benefits

The requested increase is needed to fill filling 215 mission-critical vacancies.  FHWA’s staffing level is well below the authorized level of 2,430 FTE due to the reauthorization delays prior to the enactment of SAFETEA-LU and the FY 2007 CR.  FHWA is committed to filling these important vacancies in FY 2008.

$15,226

LAE, FY 2008 President’s Budget

$384,556

Fatalities per 100 million vehicle miles traveled. *Shared measure with NHTSA.

2002

2003

2004

2005

2006

2007

2008

Target

1.40

1.40

1.38

1.38

1.38

1.38

1.37

Actual

1.51

1.48

1.44 (r)

1.45 *

1.44 #

Passenger vehicle occupant highway fatalities per 100 million VMT. Shared measure with NHTSA.

2003

2004

2005

2006

2007

2008

Target

N/A

N/A

N/A

1.12

1.10

1.06

Actual

1.21

1.17

1.14

Non-occupant highway fatalities per 100 million VMT. Shared measure with NHTSA.

2003

2004

2005

2006

2007

2008

Target

N/A

N/A

N/A

0.16

0.15

0.19

Actual

0.19

0.19

0.20

Motorcycle rider highway fatalities per 100 million VMT. Shared measure with NHTSA.

2005

2006

2007

2008

Target

N/A

0.75

0.76

0.76

Actual

0.75

Large truck and bus fatalities per 100 million VMT. Shared measure with FMCSA.

2005

2006

2007

2008

Target

N/A

0.179

0.175

0.171

Actual

0.184

Percent of total annual urban-area travel time occurring in congested conditions

2002

2003

2004

2005

2006

2007

2008

Target

30.9

31.6

32.3

33.0

33.7

32.5

32.3

Actual

30.7 (r)

31.0 (r)

31.6(r)

31.8 #

32.6 #

Percent of U.S. population with access to 511 travel telephone service.

2002

2003

2004

2005

2006

2007

2008

Target

N/A

30

35

40

50

65

75

Actual

14

17

25

28

35

Percent of travel on the National Highway System (NHS) meeting pavement performance standards for good ride.

2002

2003

2004

2005

2006

2007

2008

Target

N/A

N/A

N/A

53.0

54.0

55.5

57.0

Actual

49.3 (r)

50.0 (r)

52.0 (r)

51.8

54.2

Number of freight corridors with an annual decrease in the average buffer index rating.

2006

2007

2008

Target

5

25

25

Actual

3

Number of exemplary ecosystem initiatives. 

2002

2003

2004

2005

2006

2007

2008

Target

N/A

8

10

17

24

50

55

Actual

5

8

15

23

43

12-month moving average number of areas in transportation conformity lapse.

2002

2003

2004

2005

2006

2007

2008

Target

6.0

6.0

6.0

6.0

6.0

6.0

6.0

Actual

6.0

6.0

6.3 (r)

5.8(r)

1.3

Median time in months required for all Federal-aid Highway projects to have a completed Environmental Impact Statement (EIS).  – Supplemental to DOT-wide Measure.

2002

2003

2004

2005

2006

2007

2008

Target

N/A

51

48

45

40

36

36

Actual

80

68

54

56 (r)

57

Median time in months required for all Federal-aid Highway projects to have a completed Environmental Assessment (EA).
Supplemental to DOT-wide Measure.

2002

2003

2004

2005

2006

2007

2008

Target

N/A

17

16

15

14

12

12

Actual

N/A

26

25

25 (r)

43

Percent of major Federally funded transportation infrastructure projects with less than 2% annual growth in the project completion milestone as reported in the finance plan. Shared measure with FTA.  Actual results do not reflect results for FTA projects.

2002

2003

2004

2005

2006

2007

2008

Target

N/A

N/A

N/A

N/A

N/A

N/A

90

Actual

N/A

N/A

50

83

86

Percent of finance plan cost estimates for major Federally funded transportation infrastructure projects with less than 2% annual growth Shared measure with FTA.  Actual results do not reflect results for FTA projects.

2002

2003

2004

2005

2006

2007

2008

Target

N/A

N/A

N/A

N/A

N/A

N/A

90

Actual

N/A

N/A

75

83

86