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Federal Highway
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Notice
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Subject
Federal-Aid Highway Program Obligations - Fiscal Year (FY) 2006 Redistribution After August 1, 2006
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Classification Code Date
Office of Primary Interest
N4520.189 July 28, 2006 HCF-10

  1. What is the purpose of this Notice? This Notice provides procedures governing the determination and redistribution of unneeded balances of Fiscal Year (FY) 2006 obligation authority subject to lapse on September 30, 2006, under section 1102(d) of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), Public Law Number (Pub. L. No.) 109-59 and Section 110(c) of the Department of Transportation (DOT) Appropriations Act, 2006, Pub. L. No. 109-115.

  2. What is the background information?

    1. Section 110(c) of the DOT Appropriations Act provides for the redistribution to States after August 1, 2006, of any obligation authority distributed for FY 2006 that is subject to lapse on September 30, 2006, if the State will not obligate the authority by September 27, 2006 (the last day for obligations for the Federal-aid Highway Program through FMIS).

    2. Section 110(d) of the DOT Appropriations Act, 2006, provides that the obligation authority made available for transportation research programs carried out under Chapter 5 of Title 23, United States Code (U.S.C.), and Title V of the SAFETEA-LU shall remain available for 3 fiscal years, and it shall be in addition to the amount of any limitation imposed on obligations for Federal-aid highway and highway safety construction programs for future fiscal years. As a result, these amounts are not subject to redistribution. However, FY 2004 obligation authority is subject to lapse if the obligation authority for transportation research programs is not obligated by September 27, 2006.

    3. Amounts of unneeded obligation authority initially distributed by formula will be identified separately from unneeded balances of authority reserved from formula distribution for obligation of FY 2006 allocations of nonformula, Federal Lands Highway Program and administrative funds. States should not report on special limitation provided for the Equity Bonus Program, the Appalachian Development Highway System Program, High Priority Projects Program, Projects of National and Regional Significance, National Corridor Infrastructure Improvement Program, Transportation Improvements, Discretionary Bridge Program, Delta Regional Authority, Surface Transportation Projects, Highway Priority Projects, the National Highway Traffic Safety Administration's Operations and Research Program, and for the Catastrophic Hurricane Evacuation Plan, as such amounts of obligation authority are not subject to lapse.

  3. How was the FY 2006 obligation authority distributed?

    1. A total of $24.0 billion in obligation authority was distributed by formula to the States for FY 2006. This obligation authority is available for FY 2006 only and subject to lapse on September 30, 2006.

    2. An additional $6.1 billion was reserved for distribution as special (multi-year) limitation for the Equity Bonus Program, the Appalachian Development Highway System Program, High Priority Projects Program, Projects of National and Regional Significance, National Corridor Infrastructure Improvement Program, Transportation Improvements, and the Discretionary Bridge Program. These amounts remain available until used and are not subject to redistribution.

    3. Also, $5.3 billion was reserved from the distribution and used to support the allocation of nonformula (allocated), Federal Lands Highway Program, Transportation Research, and administrative funds.

    4. The remaining $197 million was reserved for transfer to meet the provisions of Section 154 of Title 23, U.S.C., the Open Container Requirements, and Section 164 of Title 23, U.S.C., the Minimum Penalties for Repeat Offenders for Driving While Intoxicated or Driving Under the Influence.

    5. A grand total of $35.6 billion in annual obligation authority was distributed for FY 2006.

  4. How is the unobligated FY 2006 obligation authority initially distributed by formula redistributed?

    1. Each Division Administrator must receive a plan from each State department of transportation by August 14, 2006, to provide a basis for determining: (1) the amount of FY 2006 obligation authority initially distributed by formula that will be available for redistribution among the other States after August 1, 2006, and (2) those States that are able to obligate amounts in addition to those previously distributed. The plan from the State must include the following information:

      1. (1) the July 31, 2006, unobligated balance of formula obligation authority;

      2. (2) the projects and/or Federal funds that will be obligated by the State no later than September 27, 2006;

      3. (3) the formula obligation authority that is in excess of amounts that can be obligated this fiscal year and is released by the State; and

      4. (4) additional authority that could be obligated if additional limitation could be provided.

    2. The Division Administrator must review the plan submitted by the State and reach an agreement with the State on those projects that could be approved and authorized by the Division Office on or before September 27, 2006.

    3. By August 16, 2006, the Division Administrator must submit a report, via e-mail, to the Federal Highway Administration (FHWA) Office of Budget (HCF-10) official mailbox (FHWA, BudgetDivision) showing:

      1. (1) the amount of FY 2006 formula authority that is in excess and is released by the State, or

      2. (2) that the State and Division Administrator have reached an agreement that the State's remaining unobligated FY 2006 formula authority can be obligated by September 27, 2006.

  5. How is the unobligated FY 2006 obligation authority distributed to support obligation of nonformula (allocated) funds released?

    1. The Division Administrator, in consultation with the State, shall determine the amount of FY 2006 obligation authority distributed to support obligation of nonformula (allocated) funds that will not be obligated by September 27, 2006.

    2. No later than August 15, 2006, nonformula (allocated) funds and associated obligation limitation that will not be obligated by September 27, 2006, must be returned to the appropriate FHWA Headquarters Program Office. Nonformula (allocated) funds and associated obligation limitation is officially released when the appropriate FHWA Headquarters Program Office notifies HCF-10. The report on return of obligation limitation should be provided to both FHWA Headquarters Program Offices and to HCF-10.

    3. By August 16, 2006, the Division Administrator must submit a report via e-mail to the HCF-10 official mailbox (FHWA, BudgetDivision) and to the FHWA Headquarters Program Offices showing:

      1. (1) the amount of nonformula allocated authority, by program, released by the State and returned to the appropriate FHWA Headquarters Program Office on August 15, 2006 (NOTE: HCF-10 will not redistribute the nonformula authority unless the FHWA Headquarters Program Office has officially released the nonformula funds and associated obligation limitation); or

      2. (2) that the State and Division Administrator have reached an agreement that the State will obligate available nonformula (allocated) funds by September 27, 2006. The Federal funds that the States and the Division Administrators agree to release will result in a release of obligation limitation, not merely contract authority.

  6. How is the FY 2006 authority reserved for the Federal Lands Highway Program and FHWA Headquarters controlled programs redistributed?

    1. Any nonformula (allocated) funds and associated obligation limitation not obligated by July 31, 2006, must be withdrawn and made available for redistribution, unless Federal Lands Highway and FHWA Headquarters Program Offices have firm commitments that the unobligated amounts will be obligated by September 27, 2006.

    2. No later than August 16, 2006, each Director and Program Manager shall report via e-mail the total obligations for each program and the amount that will not be obligated by September 27, 2006, to the HCF-10 official mailbox (FHWA, BudgetDivision).

  7. How is the FY 2006 authority reserved for other Federal agencies redistributed? Any other Federal agencies, such as, the Federal Transit Administration, the Federal Railroad Administration, the National Highway Traffic Safety Administration, Internal Revenue Service, Denali Commission, etc., that receive nonformula (allocated) funds and associated obligation limitation shall report via e-mail the total obligations for each program and the amount that will not be obligated by September 27, 2006, to the FHWA HCF-10 official mailbox (FHWA, BudgetDivision) or DeborahR.Johnson@dot.gov by August 16, 2006.

  8. How will the released obligation authority be redistributed? The formula for redistributing the released obligation authority is based on the requirements of Section 110(c) of the DOT Appropriations Act, 2006. Priority will be given to those States having large unobligated balances of funds apportioned under Sections 104 and 144 of Title 23, U.S.C.

  9. When will the excess FY 2006 obligation authority be redistributed? The redistribution of released obligation authority will be accomplished by September 1, 2006.

  10. Is there program monitoring? Yes. FHWA Headquarters will monitor the program on a national basis to ensure that all available authority subject to lapse on September 30, 2006, is fully used.

  11. What action is required? Division Administrators must ensure that (1) the redistributed funds are obligated by September 27, 2006, and (2) that copies of this Notice are provided to State departments of transportation. The timeline for responses is as follows:

    1. (1) August 14, States must provide a plan to Division Administrators.

    2. (2) August 15, Division Offices must provide nonformula (allocated) funds to the appropriate FHWA Headquarters Program Office.

    3. (3) August 16, Division Offices, FHWA Headquarters Program Offices and other Federal Agencies must provide reports via e-mail to FHWA, BudgetDivision or DeborahR.Johnson@dot.gov.

    4. (4) September 1, Released obligation authority will be redistributed.

Signature: J. Richard Capka

J. Richard Capka
Administrator

Attachment

*** SAMPLE REPORT FORMAT ***

STATE NAME
FISCAL YEAR 2006

July 31
UNOBLIGATED
BALANCE OF
FUNDS

July 31
UNOBLIGATED
BALANCE
LIMITATION

AMOUNT WHICH
COULD BE
OBLIGATED BY
SEPTEMBER 27

OBLIGATION
LIMITATION
RELEASED

ADDITIONAL
LIMITATION
REQUIRED

FORMULA LIMITATION
NONFORMULA FUNDS
(BY APPROPRIATION CODE)
EXAMPLES:
INTERSTATE MAINTENANCE DISC.
NATIONAL SCENIC BYWAYS
FERRY BOATS/FERRY TERMINALS
VALUE PRICING PILOT PROGRAM
PUBLIC LANDS DISC.
NONFORMULA SUBTOTAL
TOTAL

NOTES:

Nonformula (allocated) funds and associated obligation limitation that will not be obligated by September 27, 2006, must be returned to the appropriate FHWA Headquarters Program Office by August 15, 2006.

Nonformula (allocated) funds and associated obligation limitation is officially released when the appropriate FHWA Headquarters Program Office notifies the FHWA Office of Budget of the release by August 16, 2006.

The FHWA Office of Budget will not redistribute the nonformula authority unless the FHWA Headquarters Program Office has officially released the nonformula funds and associated obligation limitation by August 16, 2006.

The funds that the States and the Division Administrators agree to release will result in a release of obligation limitation, not merely contract authority.


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