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Notice
Subject

DISTRIBUTION OF FEDERAL-AID HIGHWAY PROGRAM OBLIGATION LIMITATION FOR THE PERIOD BEGINNING ON OCTOBER 1, 2022, AND ENDING ON DECEMBER 16, 2022

Classification Code
N 4520.277
Date
October 20, 2022
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, 2023, division A, Public Law (Pub. L.) 117-180. This Notice reflects the distribution of obligation limitation for Fiscal Year (FY) 2023 for the period beginning on October 1, 2022, and ending on December 16, 2022.

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

    1. Section 101 of the Continuing Appropriations Act, 2023, sets an overall limitation on obligations at an annual rate for operations of $57,473,430,072 for FY 2023. This annual rate for operations is equal to the obligation limitation made available in FY 2022 under the Department of Transportation Appropriations Act, 2022, Title I of division L, Pub. L. 117-103

    2. The Continuing Appropriations Act, 2023, covers the period beginning on October 1, 2022, and ending on December 16, 2022 (77 days). The pro-rata for that period is 21.10 percent (77 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 $12,126,893,745 ($57,473,430,072 multiplied by 21.10 percent).

    3. Section 103 of the Continuing Appropriations Act, 2023, continues section 120 of the Department of Transportation Appropriations Act, 2022, 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 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 one fiscal year and will expire at the end of FY 2023.

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

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

    • section 147 of the Surface Transportation Assistance Act of 1978 (23 U.S.C. 144 note; 92 Stat. 2714);

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

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

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

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

    • 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;

    • 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;

    • 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;

    • 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;

    • 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

    • 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 2022.

  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. Pursuant to the Department of Transportation Appropriations Act, 2022, the limitation on FHWA administrative expenses is $463,716,697 and the limitation for transfer to the Appalachian Regional Commission for administrative activities is $3,248,000. 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, obligation limitation is provided 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 (TTP) and the Federal Lands Access Program (Access Program)) that are carried over from previous fiscal years and for which obligation limitation had been provided in a previous fiscal year. The obligation limitation provided is equal to such unobligated balances of contract authority.

    3. The ratio between the remaining annualized amount of obligation limitation and the remaining FY 2023 contract authority subject to obligation limitation is determined. The ratio calculated for FY 2023 under the Continuing Appropriations Act, 2023, is 87.2 percent.

    4. 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 TTP and the Access Program. The annualized amount of obligation limitation for each such program is determined by multiplying the amount of contract authority authorized for FY 2023 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 TTP, 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, 2022, and ending on December 16, 2022, is then determined by multiplying the annualized amount of obligation limitation for each allocated program by the pro-rata of 21.10 percent.

  5. 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 TTP and the 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 2023 apportionments subject to the obligation limitation for each State bear to the total FY 2023 apportionments subject to the obligation limitation for all States.

    2. The formula obligation limitation available for the period beginning on October 1, 2022, and ending on December 16, 2022, is then determined by multiplying the annualized amount of formula obligation limitation for each State by the pro-rata of 21.10 percent.

    3. The attached Table 1 shows the amount of formula obligation limitation distributed to each State for the period beginning on October 1, 2022, and ending on December 16, 2022 (77 days) net of any obligation limitation associated with transfer penalty funding or associated with set asides under the high risk rural roads special rule, the vulnerable road user safety special rule, the minimum condition of National Highway System (NHS) bridges penalty, or 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 2023 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, 2022, 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, 2022, and ending on December 16, 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 21.10 percent.

    5. The amounts of transfer penalty funds for FY 2023 and associated obligation limitation for the period beginning on October 1, 2022, and ending on December 16, 2022 (77 days) 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 period beginning on October 1, 2022, and ending on December 16, 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 21.10 percent.

    4. The amounts of high risk rural roads special rule funds for FY 2023 and associated obligation limitation for the period beginning on October 1, 2022, and ending on December 16, 2022 (77 days) are shown in Table 3.

  8. Is there any obligation limitation set aside under the special rule for vulnerable road user safety?

    1. Section 148(g)(3) of Title 23, U.S.C., contains a special rule for vulnerable road user safety. The special rule requires that, if the total annual fatalities of vulnerable road users in a State represents not less than 15 percent of the total annual crash fatalities in the State, the State shall be required to obligate during the next fiscal year not less than 15 percent of the amounts apportioned to the State under section 104(b)(3) of Title 23, U.S.C., for highway safety improvement projects to address the safety of vulnerable road users.

    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 vulnerable road user safety special rule for the period beginning on October 1, 2022, and ending on December 16, 2022, is then determined by multiplying the annualized amount of obligation limitation associated with the vulnerable road user safety special rule for each State by the pro-rata of 21.10 percent.

    4. The amounts of vulnerable road user safety special rule funds for FY 2023 and associated obligation limitation for the period beginning on October 1, 2022, and ending on December 16, 2022 (77 days) are shown in Table 4.

  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., contains a penalty provision for States that for 3 consecutive years fail to maintain their NHS 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 NHS 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 NHS bridges penalty for the period beginning on October 1, 2022, and ending on December 16, 2022, is then determined by multiplying the annualized amount of obligation limitation associated with the minimum condition of NHS bridges penalty for each State by the pro-rata of 21.10 percent.

    5. The amounts of the minimum condition of NHS bridges penalty funds for FY 2023 and associated obligation limitation for the period beginning on October 1, 2022, and ending on December 16, 2022 (77 days) are shown in Table 5

  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., contains a penalty provision for States that report that the condition of their 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, a non-complying 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).

      • 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.

      • 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, a non-complying 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.

      • 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.

      • 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, 2022, and ending on December 16, 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 21.10 percent.

    6. The amounts of the minimum condition of Interstate System penalty funds for FY 2023 and associated obligation limitation for the period beginning on October 1, 2022, and ending on December 16, 2022 (77 days) are shown in Table 6.

  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 2023 under 23 U.S.C. 148(i): Alabama, Alaska, California, Colorado, Connecticut, Florida, Hawaii, Illinois, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Tennessee, 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 2023 formula obligation limitation on HSIP projects in an amount equal to such State's FY 2019 HSIP apportionment. The FY 2019 HSIP apportionment amounts are reflected in Table 1 of FHWA Notice N4510.831 (https://www.fhwa.dot.gov/legsregs/directives/notices/n4510831/n4510831_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 2023 formula obligation limitation on HSIP projects in an amount equal to such State's FY 2019 HSIP apportionment applies to the total formula obligation limitation received for FY 2023, 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 2019 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. Contract authority for transportation research programs under chapter 5 of Title 23, U.S.C., Title VI of the Fixing America's Surface Transportation Act, or Title III of division A of the Infrastructure Investment and Jobs Act (Pub. L. 117-58), 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 2023.

    2. The amounts of contract authority "lopped off" from the allocated programs and the 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, 2023, the Secretary will revise the distribution of obligation authority made available if a State does not plan to obligate the amount distributed during FY 2023 and redistribute such amount to those States able to obligate amounts in addition to those previously distributed during FY 2023. Procedures for this process (known as August Redistribution) will be provided via a separate Notice to be issued in July 2023.

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

 

Signature of Stephanie Pollack

Stephanie Pollack
Acting Administrator

Attachments

Table 1
Table 2
Table 3
Table 4
Table 5
Table 6

Best for printing: n4520277.pdf (5.72 MB)

Page posted on October 20, 2022
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