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Notice
Subject
DISTRIBUTION OF FEDERAL-AID HIGHWAY PROGRAM OBLIGATION LIMITATION FOR THE PERIOD BEGINNING ON OCTOBER 1, 2021, AND ENDING ON OCTOBER 31, 2021
Classification Code
N 4520.272
Date
October 20, 2021
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 Surface Transportation Extension Act of 2021 (hereafter, “Extension Act”), Public Law (Pub. L.) 117-44.

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

    1. The Extension Act covers the period beginning on October 1, 2021, and ending on October 31, 2021 (31 days, hereafter referred to as the “extension period”).

    2. Section 101(d)(1) of the Extension Act specifies a limitation on obligations for Fiscal Year (FY) 2022 equal to the extension fraction (31/365) of the annual limitation on obligations for FY 2021.

    3. The annualized limitation on obligations is equal to the obligation limitation made available in FY 2021 under the Department of Transportation Appropriations Act, 2021, title I of division L, Pub. L. 116-260. Therefore, the FY 2022 annualized limitation on obligations is $46,365,092,000.

    4. The limitation on obligations for the extension period is $3,937,857,129, which equals the extension fraction (31/365) of that annualized amount. Therefore, this Notice provides $3,937,857,129 in obligation limitation for the extension period.

    5. The distribution of obligation limitation is calculated first on an annualized basis pursuant to section 101(d) of the Extension Act using the annualized limitation on obligations of $46,365,092,000 for FY 2022. The contract authority for Federal-aid highway programs extended by the Extension Act for the extension period is annualized for purposes of calculating the distribution of obligation limitation.

    6. The result of this calculation is then multiplied by 31/365 to reflect the length of the extension period under the Extension Act.

    7. Upon the enactment of subsequent legislation authorizing the Federal-aid highway program, the distribution of obligation limitation will be revised and additional obligation limitation will be provided as determined under the provisions of such law.

    8. Unless otherwise specified, all obligation limitation is available for 1 fiscal year and will expire at the end of FY 2022.

  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 (23 U.S.C. 144 note; 92 Stat. 2714);

    3. section 9 of the Federal-Aid Highway Act of 1981 (95 Stat. 1701);

    4. sections 131(b) and 131(j) of the Surface Transportation Assistance Act of 1982 (96 Stat. 2119);

    5. sections 149(b) and 149(c) of the Surface Transportation and Uniform Relocation Assistance Act of 1987 (101 Stat. 198);

    6. sections 1103 through 1108 of the Intermodal Surface Transportation Efficiency Act of 1991 (105 Stat. 2027);

    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 FYs 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 (112 Stat. 107) 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., but only in an amount equal to $639,000,000 for each of FYs 2005 through 2012;

    11. section 1603 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (23 U.S.C. 118 note; 119 Stat. 1248), 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 FYs 2013 through 2021, and in an amount equal to $54,271,233 prior to sequestration ($51,177,773 after sequestration) for the extension period.

  4. How are the obligation limitation amounts associated with allocated1 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 Extension Act. Pursuant to section 101(d) of the Extension Act, the annualized limitation on Federal Highway Administration (FHWA) administrative expenses is $475,649,049 ($40,397,590 for the extension period). The annualized limitation to be transferred to the Appalachian Regional Commission for administrative activities is $3,248,000 ($275,858 for the extension period). 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 annualized contract authority for each such program, and then pro-rated for the extension period.

    2. Obligation limitation is provided for the unobligated balances of contract authority for allocated programs 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 annualized FY 2022 contract authority subject to obligation limitation is determined. The ratio calculated for FY 2022 under the Extension Act is 88.9 percent.

    4. The annualized amount of obligation limitation for each of the allocated programs (other than those allocated programs for which obligation limitation has already been provided) is determined by multiplying the annualized amount of contract authority authorized for FY 2022 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 TTP, which is not subject to the “lop off” of contract authority).

    5. The obligation limitation for each of the allocated programs for the extension period is then determined by multiplying the annualized amount of obligation limitation for each allocated program by 31/365.

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

    1. After obligation limitation is determined for the allocated programs 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 annualized FY 2022 apportionments subject to the obligation limitation for each State bear to the total annualized FY 2022 apportionments subject to the obligation limitation for all States.

    2. The formula obligation limitation available for the extension period is then determined by multiplying the annualized amount of formula obligation limitation for each State by 31/365.

    3. The attached Table 1 shows the amount of formula obligation limitation distributed to each State for the extension period, net of any obligation limitation associated with transfer 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, and 9 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 2022 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 (HSIP) 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 was in compliance with section 154 or section 164 as of October 1, 2021, 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 annualized apportionments subject to the obligation limitation.

    4. The obligation limitation associated with transfer penalty funds for the extension period is then determined by multiplying the annualized amount of obligation limitation associated with transfer penalty funds for each State by 31/365.

    5. The amounts of transfer penalty funds and associated obligation limitation for the extension period are shown in Table 2.

  7. 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 HSIP 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 extension period 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 31/365.

    4. The amounts of high risk rural roads special rule funds and associated obligation limitation for the extension period are shown in Table 3.

  8. 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 (NHPP) 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 extension period 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 31/365.

    5. The amounts of the minimum condition of National Highway System bridges penalty funds and associated obligation limitation for the extension period are shown in Table 4.

  9. 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, require 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 NHPP funds and, on an annualized basis, an equal amount of formula obligation limitation.

    3. In addition, 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) of such title), to the apportionment of the State under section 104(b)(1) of such title, 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 FHWA.

      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 annualized 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 extension period 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 31/365.

    6. The amounts of the minimum condition of Interstate System penalty funds and associated obligation limitation for the extension period are shown in Table 5.

  10. 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 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. The following States are subject to the provision in FY 2022 under 23 U.S.C. 148(i): Alabama, Alaska, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Kansas, Kentucky, Louisiana, Maryland, Michigan, Mississippi, Missouri, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Puerto Rico, South Carolina, Vermont, Washington, and Wisconsin. Such States were previously notified under separate cover from FHWA.

    3. A State, except for Puerto Rico, identified under subparagraph (b) is required to use FY 2022 formula obligation limitation on HSIP projects in an amount equal to such State’s FY 2018 HSIP apportionment. The FY 2018 HSIP apportionment amounts are reflected in Table 1 of FHWA Notice N4510.819 (https://www.fhwa.dot.gov/legsregs/directives/notices/n4510819/n4510819_t1.cfm). Puerto Rico is required to obligate in full their total annual allocation of Puerto Rico Highway Program funds received under 23 U.S.C. 165(b)(2)(C)(ii) for HSIP eligibilities.

    4. The requirement to use FY 2022 formula obligation limitation on HSIP projects in an amount equal to such State’s FY 2018 HSIP apportionment applies to the total formula obligation limitation received for FY 2022, and, therefore, a pro-rated amount is not being provided under this Notice. Section 148(i)(1) of title 23, U.S.C., requires such a State to use obligation authority equal to the State’s FY 2018 HSIP apportionment “until the Secretary determines that the State has met or made significant progress toward meeting the safety performance targets of the State.”

  11. 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 Extension 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 2022.

    2. The amounts of contract authority “lopped off” from the allocated programs (other than the TTP) 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, 2022, the Secretary will revise the distribution of obligation authority made available if a State does not plan to obligate the amount distributed during FY 2022 and redistribute such amount to those States able to obligate amounts in addition to those previously distributed during FY 2022. Procedures for this process (known as August Redistribution) will be provided via a separate notice to be issued in July.

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

1 In this Notice, the term “allocated” also encompasses the apportioned Tribal Transportation Program (TTP) and the Federal Lands Access Program (FLAP). Section 101(d)(2)(C) of the Extension Act uses a single defined term—“qualifying program”—to capture this universe of programs (allocated, plus apportioned TTP and FLAP).
 

Signature of Stephanie Pollack

Stephanie Pollack
Acting Administrator

Attachments

Table 1
Table 2
Table 3
Table 4
Table 5

Best for printing: n4520272.pdf (5.16 MB)

Page posted on October 20, 2021
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