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Date: April 11, 2013

Subject: 23 USC 504(e) Funds

From: Warren Whitlock
Associate Administrator, Office of Civil Rights

To: Division Administrators
Division Civil Rights Specialists

In Reply Refer to: HCR-30

Under 23 U.S.C. § 504(e) (Section 504(e)) States are permitted to apply funds from the National Highway Performance Program, Surface Transportation Program, Highway Safety Improvement Program, or Congestion Mitigation and Air Quality Improvement Program to support surface transportation workforce development.  That section defines “surface transportation workforce development” to include “training and professional development for surface transportation workers, including activities for women and minorities.”  Section 504(e)(1)(A) permits funds to be used for “tuition and direct educational expenses, excluding salaries, in connection with the education and training of employees of State and local transportation agencies.”

FHWA has traditionally advised State Departments of Transportation (STAs) that 504(e) funds could be used to supplement projects pertaining to the On-the-Job Training Supportive Services program (OJT/SS), as those programs typically involve workforce training. Our office previously advised STAs that these funds could not supplement programs funded through DBE Supportive Services (DBE/SS) dollars, as those programs involve training for businesses as opposed to individuals.

However, after further research, our office, in coordination with HCC, has concluded that, under the broad authority of Section 504(e), DBE/SS projects providing services to small businesses owned by socially and economically disadvantaged individuals, also constitute training and professional development for surface transportation workers; therefore, FHWA would like to notify Divisions that Section 504(e) funds may be used to supplement approved DBE/SS projects as well as OJT/SS projects.

Of course, the use of 504(e) funds to supplement traditional OJT and DBE/SS funding is strictly optional and based upon each STA’s discretion; however, we believe this policy will allow greater flexibility in providing quality training programs for transportation workers and small and disadvantaged business owners.

If you need further assistance please feel free to contact Martha Kenley, National DBE Program Manager, Office of Civil Rights. Ms. Kenley can be contacted via email at: martha.kenley@dot.gov.

Cc: James Esselman, HCC

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