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Notice
Subject
DISTRIBUTION OF FEDERAL-AID HIGHWAY PROGRAM OBLIGATION LIMITATION FOR THE PERIOD BEGINNING ON OCTOBER 1, 2020, AND ENDING ON DECEMBER 11, 2020
Classification Code
N 4520.267
Date
October 9, 2020
Office of Primary Interest
HCFB-10

  1. What is the purpose of this Notice? This Notice is to advise the States of the distribution of the limitation on Federal-aid highway program obligations pursuant to the Continuing Appropriations Act, 2021 and Other Extensions Act, Public Law (Pub. L.) 116-159.

  2. What is the overall limitation on obligations, and what provision determines its distribution?

    1. Section 101 of the Continuing Appropriations Act, 2021 and Other Extensions Act sets an overall limitation on obligations at an annual rate for operations of $46,365,092,000 for Fiscal Year (FY) 2021.  This annual rate for operations is equal to the obligation limitation made available in FY 2020 under the Department of Transportation Appropriations Act, 2020, title I of division H, Pub. L. 116-94.  

    2. The Continuing Appropriations Act, 2021 and Other Extensions Act covers the period beginning on October 1, 2020, and ending on December 11, 2020 (72 days).  The pro-rata for that period is 19.73 percent (72 days divided by 365 days).  The pro-rata is applied to the distribution of obligation limitation calculated based on the annual rate for operations.  Therefore, the total obligation limitation provided by this Notice is $9,147,832,652 ($46,365,092,000 times 19.73 percent).

    3. Section 103 of the Continuing Appropriations Act, 2021 and Other Extensions Act continues section 120 of the Department of Transportation Appropriations Act, 2020, providing the distribution methodology for the overall limitation on Federal-aid highway program obligations. 

    4. Upon the enactment of a full-year appropriations act or a further continuing appropriations act, the distribution of obligation limitation will be revised and additional obligation limitation will be provided as determined under the provisions of such law.

    5. Unless otherwise specified, all obligation limitation is available for 1 fiscal year and will expire at the end of FY 2021.

  3. What funds are exempt from the limitation on obligations? The obligation limitation does not apply to obligations for projects covered under:

    1. section 125 of title 23, United States Code (U.S.C.);

    2. section 147 of the Surface Transportation Assistance Act of 1978;

    3. section 9 of the Federal-Aid Highway Act of 1981;

    4. sections 131(b) and 131(j) of the Surface Transportation Assistance Act of 1982;

    5. sections 149(b) and 149(c) of the Surface Transportation and Uniform Relocation Assistance Act of 1987;

    6. sections 1103 through 1108 of the Intermodal Surface Transportation Efficiency Act of 1991;

    7. section 157 of title 23, U.S.C., as in effect on the day before the date of enactment of the Transportation Equity Act for the 21st Century;

    8. section 105 of title 23, U.S.C, as in effect for fiscal years 1998 through 2004, but only in an amount equal to $639,000,000 for each of those fiscal years;

    9. the Federal-aid highway programs for which obligation authority was made available under the Transportation Equity Act for the 21st Century or subsequent public laws for multiple years or to remain available until used, but only to the extent that the obligation authority has not lapsed or been used;

    10. section 105 of title 23, U.S.C. (as in effect for fiscal years 2005 through 2012, but only in an amount equal to $639,000,000 for each of those fiscal years);

    11. section 1603 of SAFETEA-LU, to the extent that funds obligated in accordance with that section were not subject to a limitation on obligations at the time at which the funds were initially made available for obligation; and

    12. section 119 of title 23, U.S.C., but only in an amount equal to $639,000,000 prior to sequestration for each of fiscal years 2013 through 2021.

  4. How are the obligation limitation amounts associated with allocated programs determined?

    1. Obligation limitation is provided for administrative expenses and programs authorized under section 104(a) of title 23, U.S.C., and amounts authorized for the Bureau of Transportation Statistics, as continued by the Continuing Appropriations Act, 2021 and Other Extensions Act.  Pursuant to section 101 of the Continuing Appropriations Act, 2021 and Other Extensions Act, the annual rate for operations for limitation on Federal Highway Administration administrative expenses is $453,549,689 ($89,485,354 at the pro-rata of 19.73 percent).  The annual rate for operations for limitation to be transferred to the Appalachian Regional Commission for administrative activities is $3,248,000 ($640,830 at the pro-rata of 19.73 percent).  For the other programs for which funding is authorized under section 104(a) of title 23, U.S.C., and the Bureau of Transportation Statistics, the annualized amount of obligation limitation is equal to the contract authority for each such program.

    2. Obligation limitation is provided for the unobligated balances of contract authority for allocated programs (or for the apportioned Tribal Transportation Program and the Federal Lands Access Program) that are carried over from previous fiscal years and for which obligation limitation had been provided in a previous fiscal year.  The annualized amount of obligation limitation is equal to such unobligated balances of contract authority.

    3. The ratio between the remaining annualized amount of obligation limitation and the remaining FY 2021 contract authority subject to obligation limitation is determined.  The ratio calculated for FY 2021 under the Continuing Appropriations Act, 2021 and Other Extensions Act is 89.4 percent.

    4. Obligation limitation is distributed for each of the allocated programs (other than those allocated programs for which obligation limitation has already been provided) and for the Tribal Transportation Program and the Federal Lands Access Program.  The annualized amount of obligation limitation for each such program is determined by multiplying the amount of contract authority authorized for FY 2021 by the above ratio.  The annualized amount of contract authority authorized that is not provided associated obligation limitation is “lopped off,” resulting in annualized amounts of contract authority equal to the annualized amounts of obligation limitation available for such programs (except for the Tribal Transportation Program, which is not subject to the “lop off” of contract authority).

    5. The obligation limitation for each of the allocated programs for the period beginning on October 1, 2020, and ending on December 11, 2020, is then determined by multiplying the annualized amount of obligation limitation for each allocated program by the pro-rata of 19.73 percent.

  5. How is the distribution of formula obligation limitation to the States determined?

    1. After obligation limitation is provided for the allocated programs (and for the Tribal Transportation Program and the Federal Lands Access Program) as described above, the remaining annualized amount of obligation limitation is distributed among the States as formula obligation limitation.  The formula obligation limitation is distributed among the States in the proportions that the FY 2021 apportionments subject to the obligation limitation for each State bear to the total FY 2021 apportionments subject to the obligation limitation for all States.

    2. The formula obligation limitation available for the period beginning on          October 1, 2020, and ending on December 11, 2020, is then determined by multiplying the annualized amount of formula obligation limitation for each State by the pro-rata of 19.73 percent.

    3. The attached Table 1 shows the amount of formula obligation limitation distributed to each State for the period beginning on October 1, 2020, and ending on December 11, 2020 (72 days) net of any obligation limitation associated with transfer or withholding penalty funding, or set aside under the high risk rural roads special rule, or set aside for the minimum condition of National Highway System bridges penalty, or set aside for the minimum condition of Interstate System penalty (see paragraphs 6, 7, 8, 9, and 10 of this Notice below).

  6. Is there any obligation limitation associated with transfer penalty funds?

    1. Yes, obligation limitation is associated with transfer penalty funds for those States that failed to meet the provisions of section 154 of title 23, U.S.C. (Open Container Requirements) or section 164 of title 23, U.S.C. (Minimum Penalties for Repeat Offenders for Driving While Intoxicated or Driving Under the Influence) for FY 2021 as determined by the National Highway Traffic Safety Administration (NHTSA).

    2. Along with the transfer penalty funds under section 154 and section 164 of title 23, U.S.C., the associated obligation limitation will be reserved and then released for use on eligible Highway Safety Improvement Program activities under section 148 of title 23, U.S.C., or transferred to the State's highway safety program under section 402 of title 23, U.S.C.  If the documentation review process or a section 164 “general practice” certification review by NHTSA determines that a State is in compliance with section 154 or section 164 as of October 1, 2020, the reserved obligation limitation will be restored to the State’s formula obligation limitation.   

    3. The annualized amount of obligation limitation associated with the transfer penalty funds is determined by multiplying the amount of the transfer penalty funds by the ratio of a State’s annualized formula obligation limitation to that State’s apportionments subject to the obligation limitation. 

    4. The obligation limitation associated with transfer penalty funds for the period beginning on October 1, 2020, and ending on December 11, 2020, is then determined by multiplying the annualized amount of obligation limitation associated with transfer penalty funds for each State by the pro-rata of 19.73 percent.

    5. The amounts of transfer penalty funds for FY 2021 and associated obligation limitation for the period beginning on October 1, 2020, and ending on December 11, 2020 (72 days) are shown in Table 2.

  7. How is the distribution of the obligation limitation affected by a penalty that requires that funds be withheld from apportionment to a State and lapsed immediately, such as required by 49 U.S.C. 31314? The formula obligation limitation associated with any funds withheld from apportionment and lapsed immediately due to such a penalty is distributed to the States pursuant to the Continuing Appropriations Act, 2021 and Other Extensions Act. See paragraph 5 for how obligation limitation is distributed to the States

  8. Is there any obligation limitation set aside under the special rule for high risk rural roads?

    1. Section 148(g)(1) of title 23, U.S.C., contains a special rule for high risk rural road safety.  The special rule requires that, if the fatality rate on rural roads in a State increases over the most recent 2-year period for which data are available, the State must obligate during the next fiscal year for projects on high risk rural roads an amount at least equal to 200 percent of its FY 2009 high risk rural roads set-aside.

    2. The requirement to obligate such amounts during the next fiscal year is implemented by a set-aside of both Highway Safety Improvement Program funds and, on an annualized basis, an equal amount of associated obligation limitation. 

    3. The obligation limitation associated with the high risk rural road safety special rule for the period beginning on October 1, 2020, and ending on December 11, 2020, is then determined by multiplying the annualized amount of obligation limitation associated with the high risk rural road safety special rule for each State by the pro-rata of 19.73 percent.

    4. The amounts of high risk rural roads special rule funds for FY 2021 and associated obligation limitation for the period beginning on October 1, 2020, and ending on December 11, 2020 (72 days) are shown in Table 3.

  9. Is there any obligation limitation set aside for the minimum condition of National Highway System bridges penalty?

    1. Section 119(f)(2)(A) of title 23, U.S.C., provides for a penalty if a State for 3 consecutive years fails to maintain its National Highway System structurally deficient deck area at or below 10 percent.  For the fiscal year after such a failure is determined, such a State must have an amount equal to 50 percent of its FY 2009 Highway Bridge Program apportionment set aside for use only on National Highway System bridge projects. 

    2. Section 490.413(a)(1) of title 23, Code of Federal Regulations (CFR), requires such penalty funds to be obligated in the year in which they are set aside. 

    3. The requirement to obligate such amounts during the fiscal year is implemented by a set-aside of both National Highway Performance Program funds and, on an annualized basis, an equal amount of formula obligation limitation.

    4. The obligation limitation associated with the minimum condition of National Highway System bridges penalty for the period beginning on October 1, 2020, and ending on December 11, 2020, is then determined by multiplying the annualized amount of obligation limitation associated with the minimum condition of National Highway System bridges penalty for each State by the pro-rata of 19.73 percent.

    5. The amounts of the minimum condition of National Highway System bridges penalty funds for FY 2021 and associated obligation limitation for the period beginning on October 1, 2020, and ending on December 11, 2020 (72 days) are shown in Table 4.

  10. Is there any obligation limitation set aside for the minimum condition of Interstate System penalty?

    1. Section 119(f)(1)(A) of title 23, U.S.C., provides for a penalty if a State reports that the condition of its Interstate System, excluding bridges on the Interstate System, has fallen below the minimum condition level established by the Secretary in section 150(c)(3) of title 23, U.S.C. 

    2. For the fiscal year after noncompliance is determined, such a State must obligate from the amounts apportioned to the State under section 104(b)(1) of title 23, U.S.C., an amount equal to its FY 2009 Interstate Maintenance apportionment increased by 2 percent per year after FY 2013 for eligible purposes described under section 119 of title 23, U.S.C., as in effect on the day before the enactment of the Moving Ahead for Progress in the 21st Century Act (MAP-21).  

      1. Section 119(f)(1)(A)(i) of title 23, U.S.C., and Section 490.317(e)(1) of title 23, CFR, requires such penalty funds to be obligated in the year in which they are set aside. 

      2. The requirement to obligate such amounts during the fiscal year is implemented by a set-aside of both National Highway Performance Program (NHPP) funds and, on an annualized basis, an equal amount of formula obligation limitation.

    3. Additionally, for the fiscal year after noncompliance is determined, such a State must transfer from the amounts apportioned to the State under section 104(b)(2) of title 23, U.S.C., (other than amounts suballocated to metropolitan areas and other areas of the State under section 133(d)), to the apportionment of the State under section 104(b)(1), an amount equal to 10 percent of the amount of funds apportioned to the State in FY 2009 under the Interstate Maintenance program.  Such penalty funds must be used for purposes described under section 119 of title 23, U.S.C., as in effect on the day before the enactment of MAP-21.

      1. The transfer of such funds is implemented by a transfer of Surface Transportation Block Grant Program funds to the NHPP set-aside and will be processed automatically by the Federal Highway Administration.    

      2. The annualized amount of obligation limitation associated with the transfer penalty funds is determined by multiplying the amount of the transfer penalty funds by the ratio of a State’s annualized formula obligation limitation to that State’s apportionments subject to the obligation limitation. 

    4. The total amount of annualized obligation limitation associated with the minimum condition of Interstate System penalty funds is the aggregate of the obligation limitation amounts determined under subparagraphs (b)(2) and (c)(2).

    5. The total obligation limitation associated with the minimum condition of Interstate System penalty for the period beginning on October 1, 2020, and ending on December 11, 2020, is then determined by multiplying the total annualized amount of obligation limitation associated with the minimum condition of Interstate System penalty for each State by the pro-rata of 19.73 percent.

    6. The amounts of the minimum condition of Interstate System penalty funds for FY 2021 and associated obligation limitation for the period beginning on October 1, 2020, and ending on December 11, 2020 (72 days) are shown in Table 5.

  11. What requirements related to safety performance management apply to the obligation limitation for States?

    1. Section 148(i) of title 23, U.S.C., requires that if a State has not met or made significant progress toward meeting the safety performance targets the State established under section 150(d) of title 23, U.S.C., such State shall use obligation limitation equal to the State’s Highway Safety Improvement Program (HSIP) apportionment for the fiscal year prior to the year in which the performance targets were set only for highway safety improvement projects in the fiscal year after the provision is assessed.
    2. States that are subject to the provision in FY 2021 under 23 U.S.C. 148(i) include:  Alaska, California, Connecticut, District of Columbia, Florida, Georgia, Idaho, Illinois, Kansas, Kentucky, Louisiana, Maryland, Michigan, Missouri, Nebraska, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Utah, Virginia, Washington, and Wisconsin.  Such States were previously notified under separate cover from the Federal Highway Administration.
    3. A State identified under subparagraph (b) is required to use FY 2021 formula obligation limitation on HSIP projects in an amount equal to such State’s FY 2017 HSIP apportionment.  The FY 2017 HSIP apportionment amounts are reflected in Table 1 of FHWA Notice N4510.810 (https://www.fhwa.dot.gov/legsregs/directives/notices/n4510810/n4510810_t1.cfm).
  12. What other provisions apply that are related to the distribution of obligation limitation?

    1. Contract authority for transportation research programs under chapter 5 of title 23, U.S.C., or title VI of the Fixing America’s Surface Transportation Act, as continued by the Continuing Appropriations Act, 2021 and Other Extensions Act, is subject to obligation limitation that remains available for a period of 4 fiscal years.  Obligation limitation made available for transportation research in future fiscal years will be in addition to amounts made available for FY 2021.

    2. The amounts of contract authority “lopped off” from the allocated programs and the Federal Lands Access Program due to the imposition of the obligation limitation will be redistributed to the States.  The redistribution will be provided via a separate notice to be issued no later than 30 days after the distribution of the obligation limitation.

    3. After August 1, 2021, the Secretary will revise the distribution of obligation authority made available if a State does not plan to obligate the amount distributed during FY 2021 and redistribute such amount to those States able to obligate amounts in addition to those previously distributed during FY 2021.  Procedures for this process (known as August Redistribution) will be provided via a separate notice to be issued in July.

  13. What action is required? Division Administrators should ensure that copies of this Notice are provided to the State departments of transportation.

 

Signature

Nicole R. Nason
Administrator

Attachments

Table 1
Table 2
Table 3
Table 4
Table 5


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Page posted on October 9, 2020
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