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, 2022, division A, Public Law (Pub. L.) 117-43, as amended by the Further Continuing Appropriations Act, 2022, division A, Pub. L. 117-70.

2. Does this Notice cancel FHWA Notice 4520.272? Yes, this Notice cancels FHWA Notice 4520.272, Distribution of Federal-aid Highway Program Obligation Limitation for the period beginning on October 1, 2021, and ending on October 31, 2021, dated October 20, 2021.  This Notice reflects the obligation limitation for the period beginning on October 1, 2021, and ending on February 18, 2022, under the Continuing Appropriations Act, 2022, as amended, and is calculated based on the fiscal year (FY) 2022 contract authority.

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

   1. Section 101 of the Continuing Appropriations Act, 2022, as amended, sets an overall limitation on obligations at an annual rate for operations of $46,365,092,000 for FY 2022.  This annual rate for operations 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.

   2. The Continuing Appropriations Act, 2022, as amended, covers the period beginning on October 1, 2021, and ending on February 18, 2022 (141 days).  The pro-rata for that period is 38.63 percent (141 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 $17,910,835,040 ($46,365,092,000 multiplied by 38.63 percent).

   3. Section 103 of the Continuing Appropriations Act, 2022, as amended, continues section 120 of the Department of Transportation Appropriations Act, 2021, 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 2022.

4. 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 fiscal years 2013 through 2022.

5. 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.  Pursuant to section 101 of the Continuing Appropriations Act, 2022, as amended, the annual rate for operations for limitation on Federal Highway Administration (FHWA) administrative expenses is $475,649,049 ($183,743,227 at the pro-rata of 38.63 percent).  The annual rate for operations for limitation to be transferred to the Appalachian Regional Commission for administrative activities is $3,248,000 ($1,254,702 at the pro-rata of 38.63 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 2022 contract authority subject to obligation limitation is determined.  The ratio calculated for FY 2022 under the Continuing Appropriations Act, 2022, as amended, is 71.8 percent.

   4. Except as described in subparagraph (e), obligation limitation is determined 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 2022 by the above ratio.  The authorized amount of contract authority that is not provided associated obligation limitation is "lopped off," resulting in amounts of contract authority equal to the annualized amounts of obligation limitation available for such programs (except for the Tribal Transportation Program and the programs specified in subparagraph (e), none of which are subject to the "lop off" of contract authority).

   5. Section 120(a)(4) of the Department of Transportation Appropriations Act, 2021, as continued by the Continuing Appropriations Act, 2022, as amended, restricts the distribution of obligation limitation to allocated programs that are allocated by the Secretary under the Fixing America's Surface Transportation (FAST) Act and title 23, U.S.C., or apportioned by the Secretary under sections 202 or 204 of such title.  As such, any allocated program authorized under the Infrastructure Investment and Jobs Act, Pub. L. 117-58 (Bipartisan Infrastructure Law), that is subject to obligation limitation and that is not codified in title 23, U.S.C., or continued from the FAST Act, will not receive a distribution of obligation limitation under this Notice.  The affected allocated programs are as follows:

      1. Prioritization Process Pilot Program under section 11204 of Pub. L. 117-58;

      2. Reduction of Truck Emissions at Port Facilities under section 11402 of Pub. L. 117-58; and

      3. Reconnecting Communities Pilot Program under section 11509 of Pub. L. 117-58.

   6. The obligation limitation for each of the allocated programs for the period beginning on October 1, 2021, and ending on February 18, 2022 (other than the three programs described in subparagraph (e)), is then determined by multiplying the annualized amount of obligation limitation for each allocated program by the pro-rata of 38.63 percent.

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

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

   2. The formula obligation limitation available for the period beginning on October 1, 2021, and ending on February 18, 2022, is then determined by multiplying the annualized amount of formula obligation limitation for each State by the pro-rata of 38.63 percent. 

   3. The attached Table 1 shows the amount of formula obligation limitation distributed to each State for the period beginning on October 1, 2021, and ending on February 18, 2022 (141 days) 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 7, 8, 9, and 10 of this Notice below).

7. 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 riving 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 ctober 1, 2021, the reserved obligation limitation will be restored to the State's ormula 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, 2021, and ending on February 18, 2022, is then determined by multiplying the annualized amount of obligation limitation associated with transfer penalty funds for each State by the pro-rata of 38.63 percent. 

   5. The amounts of transfer penalty funds for FY 2022 and associated obligation limitation for the period beginning on October 1, 2021, and ending on February 18, 2022 (141 days) are shown in Table 2. 

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 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 period beginning on October 1, 2021, and ending on February 18, 2022, 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 38.63 percent.

   4. The amounts of high risk rural roads special rule funds for FY 2022 and associated obligation limitation for the period beginning on October 1, 2021, and ending on February 18, 2022 (141 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 poor condition 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 period beginning on October 1, 2021, and ending on February 18, 2022, 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 38.63 percent. 

   5. The amounts of the minimum condition of National Highway System bridges penalty funds for FY 2022 and associated obligation limitation for the period beginning on October 1, 2021, and ending on February 18, 2022 (141 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 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)), 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 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 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, 2021, and ending on February 18, 2022, 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 38.63 percent. 

    6. The amounts of the minimum condition of Interstate System penalty funds for FY 2022 and associated obligation limitation for the period beginning on October 1, 2021, and ending on February 18, 2022 (141 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 the Secretary determines that 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." 

12. What other provisions apply that are related to the distribution of obligation limitation?

    1. Pursuant to section 104 of the Continuing Appropriations Act, 2022, as amended, no appropriation or funds made available or authority granted pursuant to section 101 of such Act shall be used to initiate or resume any project or activity for which appropriations, funds, or other authority were not available during FY 2021. 

       1. Section 101 of the Continuing Appropriations Act, 2022, as amended, provides the continuation of liquidating cash for Federal-aid highway program expenditures.  Section 104 of the Continuing Appropriations Act, 2022, as amended, prohibits the use of that liquidating cash for expenditures from Federal-aid highway programs that were not authorized and funded in FY 2021.  This includes new programs authorized under the Bipartisan Infrastructure Law. 

       2. The expenditure of Federal-aid highway program funds is controlled at the point of obligation.  Therefore, pursuant to section 104 of the Continuing Appropriations Act, 2022, as amended, new allocated programs authorized under the Bipartisan Infrastructure Law will not have funds and associated obligation limitation under this Notice made available until the limits in section 104 of the Continuing Appropriations Act, 2022, as amended, are no longer in effect.  For new apportioned programs authorized under the Bipartisan Infrastructure Law, please refer to paragraph 3(g) of FHWA Notice 4510.858 for details on the application of section 104 of the Continuing Appropriations Act, 2022, as amended.  

    2. Contract authority for transportation research programs under chapter 5 of title 23, U.S.C., or title VI of the FAST 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. 

    3. 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. 

    4. 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. 

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

Attachments

Table 1
Table 2
Table 3
Table 4
Table 5