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Home / CFO / Suballocation of Apportioned Funds Questions & Answers

Suballocation of Apportioned Funds Questions & Answers

Posted: 4/4/2016

Question 1: What is suballocation?

Answer 1: The Fixing America’s Surface Transportation Act (FAST Act) and previous transportation authorizations use the term suballocation to refer to reservations of funds apportioned to a State by formula for use in specific areas within the State. Under the FAST Act, suballocation is required for a portion of each State's apportionment under the Surface Transportation Block Grant (STBG) Program and the set-aside from the STBG for Transportation Alternatives (TA).

Question 2: How are funds suballocated?

Answer 2:

Surface Transportation Block Grant Program [23 U.S.C. 133(d); FAST Act § 1109(b)].—A specified percentage of a State's STBG apportionment (after deducting the set-asides for State Planning and Research and TA) is suballocated to areas based on their relative share of the total State 2010 Census population. The percentage to be suballocated is 51 percent for FY 2016 and then rises by one percentage point each year, ending with 55 percent in FY 2020. The remaining percentage of the State’s STBG apportionment is available for use in any area of the State (with the off-system bridge set-aside, border State infrastructure set-aside (if designated), and penalties applied to this portion of STBG funding). The suballocated funds are divided into three categories and must be used in the areas described below [see figure 1]

  1. Areas with a population of 5,000 or fewer.
  2. Urban areas with a population of 5,001 to 200,000.
  3. Urbanized areas with a population over 200,000.

The funds for the third category (urbanized areas with a population over 200,000) are further divided into amounts for each individual area over 200,000 based on its relative share of the 2010 Census population of all such areas within a State. The State and relevant metropolitan planning organizations may jointly apply to the Secretary for permission to base the distribution on other factors. Although the suballocation is based on the population within the urbanized area boundaries, the suballocated funds may be obligated beyond the urbanized boundaries in the larger metropolitan planning organization (MPO) metropolitan planning area established under 23 U.S.C. 134 that encompasses the contiguous area anticipated to become urbanized in the next 20 years.

Over the period of FYs 2016-2020, each State must provide obligation limitation to each of its urbanized areas with a population over 200,000 for use with that area’s suballocated STBG funds. Over that period, the amount of obligation limitation provided to each of these urbanized areas must be equal to the amount obtained by multiplying—

Each State, each affected MPO, and the FHWA Division Administrator must jointly ensure compliance with this requirement. (23 U.S.C. 133(e))

Transportation Alternatives [23 U.S.C. 133(h)(2), MAP-21 § 1109(b)].—Fifty percent of the amount set aside for TA in the State (after deducting the set-aside for the Recreational Trails Program) is suballocated to areas based on their relative share of the total State 2010 Census population. The remaining 50 percent is available for use in any area of the State. The suballocation is made in the same manner as for STBG funds, with two exceptions:

Question 3: Are the funds actually passed through to the MPOs for urbanized areas over 200,000?

Answer 3: No. The grant recipient for suballocated funds is the State highway agency to which the funds are apportioned. A State may make subgrants in accordance with State law. The key to suballocation is where the funds must be used (described above) and what entity makes decisions on the use of suballocated funds (described below).

Question 4: What entity makes project selection decisions when suballocated funds are used?

Answer 4:

Generally.—The metropolitan planning and statewide and nonmetropolitan planning requirements of 23 U.S.C. 134-135 lay out the basic provisions related to project selection for all programs under 23 U.S.C. as follows:

STBG. —In addition, there is a specific requirement [23 U.S.C. 133(d)(3), FAST Act § 1109] that when making obligations of STBG funds in an area with a population greater than 5,000 and less than 200,000, the State must consult with the regional transportation planning organizations that represent the area (if such organizations exist).

TA.—Also, under the TA Set-Aside, a State or an MPO must develop a competitive process to allow eligible entities to submit projects for funding. [see 23 U.S.C. 133(h)(4), FAST Act § 1109(b)] FHWA will provide additional information on the competitive process requirement in the TA guidance.

Question 5: In developing a Transportation Improvement Program (TIP), can an MPO suballocate its STBG to individual jurisdictions or a specific transportation mode?

Answer 5: As a general matter, no. Procedures or agreements that distribute suballocated STBG funds to individual jurisdictions or modes within the Metropolitan Planning Area by pre-determined percentages or formulas are inconsistent with the legislative provisions that require the MPO, in cooperation with the State and the public transportation operator, to develop a prioritized and financially constrained TIP. MPO suballocation procedures shall not be used unless they can be clearly shown to be based on considerations required to be addressed as part of the metropolitan transportation planning process. [see 23 CFR 450.324(j)]

Question 6: May suballocated STBG and TA funds be transferred to other Federal-aid highway programs?

Answer 6: A State may not transfer suballocated STBG or TA funds to other Federal-aid highway programs. [see 23 U.S.C. 126(b), FAST Act §§ 1109(c) & 1446 ].

Question 7: May suballocated STBG and TA funds be transferred to FTA for administration of a transit project under chapter 53 of title 49?

Answer 7: Suballocated STBG funds for an eligible transit project may be transferred to FTA to administer the project in accordance with chapter 53 of title 49, United States Code. [see 23 U.S.C. 104(f)]. If a transit project eligible under the TA Set-Aside is selected, funds for the project may be transferred to FTA to administer the project in accordance with chapter 53 of title 49. Funds may be transferred in the same manner as other Federal-aid highway program procedures. [see 23 U.S.C. 104(f)].

Figure 1

Surface Transportation Block Grant Program Suballocation

State's STBG Apportionment leads to Set Aside: 2% for State Planning & Research and Transportation Alternatives which lead to either Suballocate Specified Percentage* to Sub-State Areas Based on Population or Remaining Percentage for Use in Any Area of State. Suballocate Specified Percentage* to Sub-State Areas Based on Population for the following fiscal years, *FY 16: 51%, FY 17: 52%, FY 18: 53%, FY 19: 54%, FY 20: 55%, leads to Urbanized Areas with Populations over 200,000, Urban Areas with Populations of 5,001 to 200,000, and Areas with Population of 5,000 or fewer. Remaining Percentage for Use in Any Area of State leads to Set-aside for Off-System Bridges, Optional Set-aside for Border State Infrastructure, and Remainder (Less any Penalties Applicable to STBG) for Any STBG Purpose.

 

Figure 2

Transportation Alternatives Suballocation

State's Transportation Alternatives Set-aside leads to Set-aside for Recreational Trails Program (unless Governor Opts Out) which leads to either 50% Suballocated to Sub-State Areas Based on Population or 50% for Use in Any Area of State. 50% Suballocated to Sub-State Areas Based on Population leads to Urbanized Areas with Populations over 200,000, Urban Areas with Populations of 5,001 to 200,000, and Areas with Population of 5,000 or fewer.

Page last modified on April 4, 2016
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