U.S. Department of Transportation
Federal Highway Administration
1200 New Jersey Avenue, SE
Washington, DC 20590
Publication No. FHWA-PL-17-011
Allocation. An administrative distribution of funds for programs that are not distributed to States by a statutory formula.
Apportionment. The distribution of funds to States as prescribed by a statutory formula.
Appropriated Budget Authority (ABA). A form of Budget Authority that requires both an authorization act and an appropriations act before any funds can be obligated.
Appropriations Act. Action of a legislative body that makes funds available for expenditure with specific limitations as to amount, purpose, and duration. In most cases, it permits money previously authorized to be obligated and payments made, but for the highway program operating under contract authority, the appropriations act specifies amounts of funds that Congress will make available for the fiscal year to liquidate obligations.
Authorization Act. Basic substantive legislation that establishes or continues Federal programs or agencies and establishes an upper limit on the amount of funds for the program(s). The current authorization act for surface transportation programs is the Fixing America’s Surface Transportation (FAST) Act.
Budget Authority. Empowerment by Congress that allows Federal agencies to incur obligations that will result in the outlay of funds. Congress generally provides this empowerment to an agency in the form of an appropriation. However, for most of the highway programs, it is in the form of contract authority.
Budget Resolution. A concurrent resolution passed by Congress presenting the Congressional Budget for each of the succeeding 5 years. A concurrent resolution does not require the signature of the President.
Contract Authority (CA). A form of Budget Authority that permits obligations to be made in advance of appropriations. Most of the programs under the Federal-Aid Highway Program operate under Contract Authority.
Expenditures. See Outlays.
Federal-aid Highway Program (FAHP). An umbrella term, not defined in law, which in general refers to most of the Federal programs providing highway funds to the States. When used in a budgetary context, FAHP specifically refers to highway programs financed by contract authority out of the Highway Account of the Highway Trust Fund (HTF), plus any HTF supplemental appropriations for the Emergency Relief Program. Such authorizations are contained in Titles I (Federal-aid Highways) and VI (Innovation) of Division A of the FAST Act, as well as in acts providing supplemental appropriations.
Federal Highway Administration (FHWA). The Federal agency within the U.S. Department of Transportation that administers the Federal-aid Highway Program.
Fiscal Year (FY). The accounting period for the budget. The Federal fiscal year is from October 1 until September 30. The fiscal year is designated by the calendar year in which it ends. For example, FY 2016 runs from October 1, 2015, through September 30, 2016.
Highway Trust Fund (HTF). An account established by law to hold Federal highway- user taxes that are dedicated for highway and transit related purposes. The HTF has two accounts: the Highway Account and the Mass Transit Account.
Obligation Authority (OA). The total amount of funds that the Federal government may obligate in a year. For the Federal-aid Highway Program this is comprised of the obligation limitation amount plus amounts for programs exempt from the limitation.
Obligation Ceiling. Identical to obligation limitation.
Obligation Limitation. A restriction, or “ceiling” on the amount of Federal assistance that may be promised (obligated) during a specified time period. This is a statutory budgetary control that does not affect the apportionment or allocation of funds. Rather, it controls the rate at which the funds may be used.
Obligation. The Federal government’s legal commitment (promise) to pay or reimburse the States or other entities for the Federal share of a project’s eligible costs.
Outlays. Actual cash (or electronic transfer) payments made to the States or other entities. Outlays are provided as work progresses for the Federal share for approved highway program activities.
Penalty. An action taken by Federal agencies when the grant recipient does not comply with provisions of the law. For the highway program the imposition of penalties, which are defined in law, may prevent a State from using or receiving its full apportionment or may force a transfer from one program to another.
President’s Budget. A document submitted annually (due by the first Monday in February) by the President to Congress. It sets forth the Administration’s recommendations for the Federal budget for the upcoming fiscal year.
Rescission. Legislation enacted by Congress that cancels the availability of previously-enacted budget authority before that authority would otherwise expire.
Sequestration. The cancellation of budgetary resources provided by discretionary appropriations or direct spending law. The concept is similar to a rescission, but this term is commonly used when discussing broad budget controls.
Sliding Scale. The normal Federal share of 80% for non-Interstate projects and 90% for Interstate projects is adjusted upward to no more than 95%, based on a sliding scale, for each State with a large amount of Federal lands (over 5% of the total area of the State).
State. As defined in chapter 1 of Title 23, U.S.C., any of the 50 States, plus the District of Columbia and the Commonwealth of Puerto Rico. However, the definition of “State” varies in some specific circumstances. For example, highway safety programs under 23 U.S.C. define “State” to also include the Territories (the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands) and the Secretary of the Interior (for Indian Reservations). Also, Puerto Rico is not treated as a State for purpose of apportioning Federal-aid highway funds.
Suballocation. For purposes of the FAST Act and prior transportation authorizations, the statutory reservation of a portion of a State’s apportioned highway funding for use in one or more specific areas within the State.
For additional definitions, see A Glossary of Terms Used in the Federal Budget Process, Government Accountability Office, September 2005. Also see Section 101 of Title 23, United States Code.