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Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs (2022)

Chapter: Appendix F - Industry Group Workshops

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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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Suggested Citation:"Appendix F - Industry Group Workshops." National Academies of Sciences, Engineering, and Medicine. 2022. Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs. Washington, DC: The National Academies Press. doi: 10.17226/26696.
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F-1   Industry Group Workshops A P P E N D I X F F.1 American Association of State Highway and Transportation Officials Workshop September 10, 2021 The research team worked with AASHTO to conduct a virtual workshop to discuss the Federal- Aid Highway Program (FAHP) fund transfers with participants from the departments of transportation (DOTs) of the following states: • Delaware. • Idaho. • Minnesota. • Nebraska. • North Dakota. • Tennessee. • Vermont. These states were selected because they had not previously responded to the initial questionnaire that was distributed nationally. This was an opportunity to engage with them and to explore their practices and policies regarding FAHP transfers. To set the foundation for the discussion, the team made a presentation on the key research findings developed through this phase of the investigation. That was followed by a facilitated workshop that addressed the following questions: • Why are transfers used or not used? • Are there policy objectives driving the transfers? • How significant is the role of project cost increases related to transfers? • How significant are FHWA performance criteria in the transfer experience? • What role do rescissions play? • How does the availability of state/local funding play in the transfer experience? • How are suballocated funds treated? • What is the motivation behind transfers within FHWA or to other agencies?

F-2 Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs • What are specific project examples of the uses of FAHP funds that are transferred to FTA? The questions provided the participants with opportunities to describe their practices, policies, and experience with FAHP fund transfers. The key takeaways from the workshop are discussed below: • All the participating states use transfers, principally driven by strategic fund management, to ensure full obligation of authorized funds. There is a solid bench of fund management practitioners who are acquainted with the transfer provisions and opportunities. • The most recent prospect of federal funding rescissions was an incentive for several states to develop a funding transfer strategy to avoid unnecessary rescissions. • The annual August redistribution of funds is also an incentive for employing FAHP fund transfers, positioning states to take advantage of additional funding opportunities. • Several states also indicated that local/state policies are related to transfer practices. For example, investments in bike/pedestrian infrastructure, safety, and transit may drive federal fund transfers, or state funds may be used instead of federal funds to achieve desired performance outcomes or to support local transit investments. • The ability to transfer funds from one project to another is often a function of having an alternate eligible project investment to receive the specific category of federal funds. Several of the states in the workshop maintain a pipeline of projects that are “funding- ready” to assist in effective fund and project management practices. Others do not maintain an inventory of projects but carefully develop projects to ensure full obligation of the distinct classifications of federal funding. • Congestion Mitigation and Air Quality Improvement Program (CMAQ) funds are often transferred in responding to two separate goals. One is to address air quality performance targets with specific projects. The other relates to ensuring timely obligation of the funds to avoid funding lapsing. This practice often is supported by providing state funds in lieu of federal funds for local municipalities or MPOs. • There are limited transfers of Highway Safety Improvement Program (HSIP) funds due to the focus on achieving safety goals. • Transfers from FHWA to FTA usually support purchase of transit vehicles, and funds can be transferred to transit agency recipients or through MPOs. In addition to the practices described by the participants, several interesting observations came from the workshop: • Do funding needs for off-system bridges impact transfers? • Are transfers used to address local system needs?

Industry Group Workshops F-3 • Overall, FAHP fund transfers represent a small fraction of the overall funding strategies and fund management practices of the DOTs. • Fund transfers are significantly influenced by the category of funds, restrictions on those funds, and the overall performance targets within the fund categories (e.g., safety, bridge). • Transfers may raise concerns from stakeholders and the general public that certain policy goals are inadequately addressed. This can lead to long lead times for preparing and then implementing a transfer. Transfer from CMAQ can be perceived as pulling back on air quality attainment projects. Conversely, there are often difficulties delivering CMAQ- funded projects locally due to the federal funding requirements. As a result, states transfer the funds to avoid lapsing. Transfers out of Transportation Alternatives (TA) can be perceived as reducing funds for bicycle and pedestrian programs. However, these programs are often delivered locally and have similar challenges for local municipalities. There are many examples where the programs have dedicated state funding that facilitates local program management and delivery. Transfers out of HSIP also come with difficult stakeholder reactions. The appearance of reducing funding for any safety project or program brings negative reactions from residents and elected officials. • HSIP program transfer practices and restrictions vary across states. The difference is in whether FHWA allows HSIP funding to be used as part of an overall strategy to deliver projects that contain safety initiatives. In a few cases, FHWA has restricted HSIP funds for use only on stand-alone safety projects. The practice is not uniform across the states. • The existence of a project pipeline that can use funding transfers supports positive transfer outcomes. While some states have designed up to 18 months of projects that are “funding- ready,” others avoid developing an extensive project pipeline. One reason is to avoid having a project age to the point that a design and the environmental documentation need to be updated, with significant unnecessary cost. In some states, the project pipeline is developed using state-funded advanced construction practices to avoid the constraints of the federal funding timelines. • Another issue is that developing projects sets public expectations for project delivery. If the project is not implemented in a timely fashion, this can result in lack of trust or support for the DOT. • Of interest are the categories of projects that may use alternative project delivery methods, such as design/build or public-private-partnerships. These particular classes of projects may have special challenges related to funding transfers, due to their unique processes and business models.

F-4 Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs • FHWA performance targets for types of funding are considered during fund management strategies. The performance targets have not matured to the extent that there are lessons learned. It is expected that the targets will continue to be important and ultimately drive more of the transfer practices. • State policy goals often drive program expenditures. Since federal funds are most often insufficient to meet expectations (bicycle/pedestrian, safety), state funds often replace federal funds to achieve local priorities. F.2 American Public Transportation Association Workshop December 16, 2021 The research team worked with American Public Transportation Association (APTA) to conduct a virtual workshop to discuss the FAHP fund transfers with members of the APTA metropolitan and municipal planning subcommittee, including: • Connecticut. • District of Columbia. • Florida. • Illinois. • Minnesota. • New Jersey. • New York. • North Carolina. • Pennsylvania. • Virginia. • Washington. This was an opportunity to engage with them and to explore the practices and policies regarding FAHP transfers. To set the foundation for the discussion, the team made a presentation on the key research findings developed through this phase of the investigation. That was followed by a facilitated workshop that addressed the following questions: General Questions • Why are transfers used or not used? • Are there policy objectives driving the transfers? — Full federal funding. — Obligations. — Program goals, e.g., alternative transportation, safety, transit.

Industry Group Workshops F-5 • How significant is the role of project cost increases related to transfers? • How significant are the FHWA performance criteria in the transfer experience? • What role do rescissions play? • How does the availability of state/local funding play in the transfer experience? Questions Specific to Transfers to FTA • What is the motivation behind transfers to FTA? • What are specific project examples of the uses of FAHP funds that are transferred to FTA? • What role does the MPO play in transfers to FTA? • What funding categories are typically transferred from FAHP to FTA? • Are suballocated MPO funds transferred to FTA? • What agencies or organizations are responsible for the FTA funds? • Have there been any issues with meeting FTA grant requirements? The questions provided the participants with opportunities to describe their practices, policies, and experience with FAHP fund transfers. Unlike the discussion with AASHTO, the discussion focused mostly on the experience of the recipients of FAHP funds for transit projects rather than the roles and experiences of the fund managers and practitioners. The key takeaways from the workshop are discussed below. • Transfers to FTA are used for many reasons. There are no standard practices, as the goals and practices vary to meet the specific needs of each organization. The reasons for transfers were expressed as: — Eligibility of FAHP funds to advance transit projects and programs. — Flexibility to use a variety of funding sources on transit projects. — Cash management. — Avoidance of lapsing funds due to project delivery difficulties and project attrition. — Support for meeting sustainability and clean air goals with transit projects. — National Environmental Policy Act (NEPA) compliance. • FHWA does not track the use of funds once they are transferred to FTA. The most common use of the funds transferred to FTA is for rolling stock, with many locations transitioning to

F-6 Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs the funds were used to support a bus rapid transit New Start project and a project to upgrade a train station as part of a new rail service project. • Transit projects are eligible for FHWA and FTA funds. One example is the direct flexing of FHWA funds for transit vehicle purchases. In several instances, funding practices treat all projects as being eligible for both sources, enabling the maximum flexibility in funding projects and programs in multimodal organizations. • The role of MPOs varies widely in relation to FAHP funds being transferred to FTA. Some states have mandated suballocation of funds to the MPO for transit purposes. Some MPOs administer a competitive grant application among subrecipients. Two states have mandates to allocate a specific amount or percentage of CMAQ funding every year to transit through the MPO. Some MPOs do specific project selection for the use of funds allocated to FTA. • FAHP funding categories that are transferred to FTA include CMAQ, STBG, and TA. • There are several instances where FTA Section 5309 funds are transferred to FHWA, most commonly to support planning. In two cases, planning funds are administered jointly by FHWA and FTA. In addition to the practices described by the participants, several interesting observations came from the workshop: • There was uniform appreciation for the transfer provisions available in the FAHP program since all agencies use them and benefit from them. Several agencies raised concerns about the Infrastructure Investment and Jobs Act (IIJA) and potential restrictions or limitations on funding transfers. There was a clear desire to understand any changes and the need to be prepared to adapt to new provisions. • The funding requirements for FHWA and FTA differ. The transfer of funds does not necessarily avoid the need to meet those requirements, including schedule for obligation and spending, reporting, and NEPA. • Agencies have different perspectives on preferences for which agency administers transferred funding. These are unique to the agency, the projects, and the alignment of the project to FHWA or FTA experience. • One issue is the transfer of funding for Amtrak projects. Amtrak is not required to meet several federal funding requirements. When FAHP funds are transferred to fund Amtrak projects, those projects may need to comply with federal funding requirements. As such, federal compliance requirements can complicate the ability to use funding transfers for those Amtrak projects. an electric bus fleet. Some also use the funds for preventive maintenance. In one instance,

Industry Group Workshops F-7 F.3 Association of Metropolitan Planning Organizations Workshop As part of this research, the research team conducted outreach to MPOs to understand if and how they may be involved in fund transfers. The team started with a sample survey of three MPOs and then held two virtual meetings with 16 MPOs from 14 states. The team selected MPOs for participation based on the preliminary analysis of fund transfers from FFY2013 to FFY2020 and input received from MPOs on the sample survey. This section discusses the information and input received from MPOs relating to state DOT flexibilities in transferring FHWA funds. While the state DOTs have the authority and responsibility for managing FHWA funds, the team thought it important to understand if MPOs are aware of, or involved in, decisions that impact fund transfers. This section discusses how MPOs were chosen for participation in this effort, topics discussed and key findings, and suggestions for case studies or further investigation with MPOs. Participants of the Association of Metropolitan Planning Organizations (AMPO) workshops include staff members of MPOs or state MPO associations in the following states: • Arizona. • California. • Connecticut. • Georgia. • Illinois. • Michigan. • New Jersey. • New York. • North Carolina. • Oregon. • Tennessee. • Texas. • Utah. • Vermont. Below is a list of issues and questions discussed with the participants. • Role of the MPO in Fund Transfers: Does your MPO have a role in the decision-making process at the state DOT on fund transfers in your region? If so, what is that role? If not, what is the reason? Would you like to have a different (greater, smaller) role? • Fund Lapses and Transfers: One reason state DOTs transfer funds is to make sure they obligate all their funding and avoid fund lapses. If your MPO directly receives FHWA or FTA funds, are you able to obligate those funds in a timely manner? If local governments, transit agencies, or other public agencies in your region directly receive FHWA or FTA

F-8 Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs funds, are they able to obligate funds in a timely manner? Has this ever been an issue in your state? • Policy Priorities Affected by Fund Transfers: Do MPO policy priorities influence fund transfers within your state? Some states transfer a certain amount (or percentage) of funds each year to support policy objectives. If yes, what are those priorities? Are they constant, or do they change? • Specific Programs and/or Specific Projects Funded Through Transfers: Are specific programs funded through funds transferred each year? Are there specific types of projects in your region that have benefited from fund transfers? • Performance-Based Planning and Relationship to Fund Transfers: Are fund transfers used in your state to fund projects that support performance targets and goals? Please differentiate between FHWA performance targets and goals and local MPO targets and goals. If so, please describe how this process works. • Rescissions and Relationship to Transfers: Are you aware of whether the state DOT transfers funds to avoid the rescission of those funds? The questions provided the participants with opportunities to describe their practices, policies, and experience with FAHP fund transfers. The key takeaways from the workshop are discussed below. Role of the MPO in Fund Transfers The team asked the MPOs whether they have a role in the decision-making process on fund transfers in their regions. The responses from the MPOs suggested at least four models among the MPO community. • First, there are MPOs that have no role on FHWA fund transfers and may not be aware of this flexibility. • Second, there are MPOs that are aware of transfer flexibilities, especially to transit, but their only role is to program funds appropriately in their Transportation Improvement Program (TIP) and Long-Range Transportation Plan (LRTP) if the FTA funds are to be used in their region. • There is a third group of MPOs that have some discretion as to how STBG, CMAQ, and TA funds are allocated within their region and which projects will be funded. • Finally, some MPOs have a significant influence on fund transfers for all program categories (NHPP, STBG, CMAQ, TA, HSIP, etc.) in their regions. Following is a brief description of the MPO role in each case with examples from MPOs.

Industry Group Workshops F-9 MPO Not Aware of or Involved in State DOT Fund Transfers This situation tends to apply to the smaller and more rural MPO areas where the MPOs have no role or influence in fund transfers. The Southern Georgia Regional Commission (SGRC) and the MPO in Waco, Texas, indicated this applies in their respective regions. In both cases the MPOs noted other restrictions that affect this arrangement. For example, in Georgia, the federal requirements for fund use are extensive, and this discourages local governments from seeking federal funds. In Texas, a statewide prohibition on using state funds for other than road expansion has resulted in all federal funds being used for maintenance needs. Thus, no opportunity exists for other projects to be federally funded in the Waco region. In Santa Barbara County, California, the only MPO role is to program FTA funds in their TIP for the local transit agency. MPO Aware of FHWA to FTA Transfers Forty-seven states transferred FHWA funds to FTA for transit programs from FFY2013 to FFY2020, and most MPOs seem aware of that possibility and reality in their states. Ninety-two percent of funds transferred ($14.6 billion) between modes from FFY2013 to FFY2020 were transferred from FHWA to FTA ($13.3 billion) for transit projects in those states. One example of an MPO that is involved in annual FHWA fund transfers to FTA is in Burlington, Vermont, where an annual transfer is made to support regional transit priorities identified by the MPO (Chittenden County Regional Planning Commission). As noted above, all MPOs that have transit agencies spending FTA funds are required to program these projects in their TIP and LRTP, so it is no surprise that most MPOs are aware of these FHWA to FTA transfers (Figure F-1). Figure F-1. Annual transfers to FTA as percentage of FHWA funding. 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% $- $500 $1,000 $1,500 $2,000 $2,500 2013 2014 2015 2016 2017 2018 2019 2020 M ill io ns Annual Flexible-Funding Transfers to FTA for Transit Projects as a Percentage of Total FHWA Funding, FFY2013 - FFY2020 Amount Transferred Percentage

F-10 Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs MPO Influence on Transfers from STBG, CMAQ, and TA Many MPOs receive suballocated- STBG funds, CMAQ funds (in some states), and/or TA funds. There are many differences in how state DOTs suballocate these funds, how much of the funds they suballocate, and which of the three program categories they suballocate. For example, in California all STBG and CMAQ funds are suballocated to MPOs, but there is a statewide program to allocate TA funds. This Active Transportation Program is administered through the California Transportation Commission. In all cases, MPOs and their governing boards (made up of local elected officials, transit representatives, and others) make programming decisions on suballocated STBG, CMAQ, and/or TA funds. The following MPOs provided examples. • Bay Area METRO, San Francisco, California. • Chicago Metropolitan Agency for Planning (CMAP), Illinois. • Memphis Urban Area Metropolitan Planning Organization, Tennessee. • MetroPlan Flagstaff, Arizona. • METRO, Portland, Oregon. • SANDAG, San Diego, California. In the Chicago region, for each suballocated program category (CMAQ, TA), CMAP established a rigorous and transparent project selection process with open competition from local and regional governments, transit agencies, and others. The process is directed at achieving regional objectives (e.g., air quality attainment with CMAQ funds) as reflected in the LRTP for the region. This process is used in the plan and TIP development process where those funds are programmed. The CMAP process is intended to ensure that investments support regional priorities. Another example is in Salt Lake City, Utah, where the Wasatch Front Regional Council (WFRC) requests transfers of about $2 million to $3 million annually of STBG, CMAQ, and/or TA funds to FTA for projects that the Utah Transit Authority implements. In the San Francisco Bay Area, the MPO manages the STBG and CMAQ project selection process through the One Bay Area Grant Program, which focuses on aligning transportation investments with focused growth in the region. The San Diego region flexes about 90 percent of its STBG and CMAQ funding to transit projects, including low-emission train sets. In Tennessee, the Memphis Metropolitan Planning Organization developed a detailed flow chart (Figure E-28) showing the steps needed to transfer FHWA funds to FTA programs. For each step there is an estimated time frame for approvals so that the state DOT, MPO, and the transit agency have some level of certainty in knowing that funds will be available when needed.

Industry Group Workshops F-11 Fund Lapses and Transfers The research team asked the MPOs whether they are aware of transfers of federal funds to avoid fund lapses. The MPOs indicated that this is done by their states and that there have been instances where the states could not avoid funds lapsing (i.e., CMAQ). The MPOs mentioned that federal requirements make it difficult to deliver projects in a timely way and that these requirements also discourage small MPOs and the local governments they represent from applying for federal funds. The MPOs also discussed that state DOTs can often switch state funds for federal funds for local governments and MPOs, thus precluding them of the need to meet all federal requirements. MPOs Make Programming Decisions on All Categories of FAHP Funds in Their Region There are MPOs that are responsible for programming (in consultation with state DOT) all federal funds from all major categories (NHPP, HSIP, CMAQ, TA, STBG, NHFP) in their regions based on allocations from the state DOT to each MPO based on population and other factors. Capital District Transportation Committee (CDTC) in Albany, New York, and Northern New Jersey Transportation Planning Authority discussed their processes for programming federal funds using this model. In the CDTC region, there are transfers from highway programs to transit, especially in support of bus rapid transit projects. This reflects the region’s priorities for transit investment. Connecticut DOT (CTDOT) developed the Local Transportation Capital Improvement Program whereby the DOT allocates state funds for local projects through a fund swap (e.g., state funds swapped for federal funds), and thus local governments are better able to deliver projects in a timely way and CTDOT can avoid fund lapses. In Santa Barbara, California, all local projects are funded with state funds while the state DOT spends the federal funds. This has provided smaller MPOs with great flexibility to use funds without the federal process. Where possible, the swapping of federal funds for state funds is helpful to MPOs and local governments. The San Diego Association of Governments noted that the state DOT (Caltrans) manages all federal funds with a first-in, first-out approach and that this has worked well statewide to ensure that fund lapses are avoided. The other MPOs noted the importance in their states of not letting funds lapse and that the state DOTs are focused on preventing such lapses. Priorities Affected by Fund Transfers The research team asked the MPOs if local priorities affect fund transfers in their state. Some states transfer a certain amount (or percentage) of funds each year to support policy objectives. For example, in New York State, a large share of CMAQ funds is transferred every year to FTA for use on transit projects by the Metropolitan Transit Authority in the New York City region. Most MPOs indicated that local priorities, such as transit in the Albany, New York, and Burlington, Vermont, regions, do influence transfer decisions by the state DOT. This is, in part, a

F-12 Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs result of the MPO responsibilities and requirements to develop TIPs and LRTPs that reflect their region’s priorities. Another example is in Chicago, where CMAP conducts a focused project selection process on CMAQ and TAP funds whereby regional local priorities must be reflected in projects and heavily influences project selection. Specific Programs/Projects Funded Through Transfers The research team asked the MPOs whether specific programs affect fund transfers. Below are two examples of how fund transfers affect program priorities in an MPO region. • Oregon. In Oregon, the majority of CMAQ funds are suballocated to MPOs for project selection. Portland METRO (the Portland MPO) requests about 50 percent of the funding allocated each year to Portland METRO priorities be transferred to two specific programs under FTA oversight. These are the Transit Oriented Development Program and the Regional Travel Options program (the region’s transportation demand management program). These programs are best managed by experienced FTA staff, which is why the transfers occur. The METRO TIP staff works closely with Oregon DOT STIP staff to coordinate this process. • Utah. In Utah, the WFRC requests that about $2 million to $3 million per year of CMAQ, STBG, and/or TAP funds be transferred to FTA for projects that the Utah Transit Authority (UTA) implements. The research team also asked if specific types of projects have benefited from fund transfers. As noted above, between FFY2013 and FFY2020, 47 states transferred FHWA CMAQ funds to FTA for transit projects. This is about $1.4 billion to $2.3 billion annually. This amount has steadily increased over the past two fiscal years, and in FFY2020, the highest amount ever ($2.3 billion) of FHWA funding was transferred to FTA. There was a consensus among the MPOs that transit projects benefit from fund transfers. Performance-Based Planning and Relationship to Fund Transfers The research team asked the MPOs whether there is a link between fund transfers and efforts to meet their performance targets through targeted investments. Many MPOs have CMAQ performance targets and a requirement for a CMAQ performance plan, and transit agencies within the MPO regions also have performance targets and requirements. SANDAG in San Diego noted that it is programming CMAQ funds for investments such as low-emission train sets that will help meet CMAQ emission reduction targets. The MPOs were unanimous in saying that it is too soon in the performance-based planning process to say whether fund transfers will be used to help regions meet their targets or whether they will meet their targets.

Industry Group Workshops F-13 Rescissions and Relationship to Transfers The research team asked the MPOs if they are aware of fund transfers being made to avoid rescissions. The MPOs indicated that the state DOTs do everything possible to avoid rescission and that fund transfers have been used for this purpose. For example, in Utah, FFY2019 funds for many projects were transferred from FHWA to FTA to avoid a potential rescission of those funds. Another MPO indicated that CMAQ funds had been rescinded after having been programmed out 4 years and that it was working with the state DOT to backfill the rescinded funds. Another example might be in the Chicago region where CMAP has a key role in project selection for CMAQ and TAP but also has a role in decisions on all FHWA funding spent in the MPO region. The process CMAP has established for TA and CMAQ project selection is directly related to achieving regional objectives. CMAP has also instituted a process for ensuring the CMAQ and TA funds are expended in a timely manner to avoid fund lapsing. This might be of interest to others for which timely project implementation is an issue. A targeted case study may provide insights for other states and MPO regions to consider. Finally, the statewide Active Transportation Program in California may be of interest. This program allocates 100 percent of TA funds in California and is focused on encouraging increased use of active modes of transportation, such as biking and walking. This is a competitive program, and MPOs make recommendations for projects in their regions.

Abbreviations and acronyms used without de nitions in TRB publications: A4A Airlines for America AAAE American Association of Airport Executives AASHO American Association of State Highway Officials AASHTO American Association of State Highway and Transportation Officials ACI–NA Airports Council International–North America ACRP Airport Cooperative Research Program ADA Americans with Disabilities Act APTA American Public Transportation Association ASCE American Society of Civil Engineers ASME American Society of Mechanical Engineers ASTM American Society for Testing and Materials ATA American Trucking Associations CTAA Community Transportation Association of America CTBSSP Commercial Truck and Bus Safety Synthesis Program DHS Department of Homeland Security DOE Department of Energy EPA Environmental Protection Agency FAA Federal Aviation Administration FAST Fixing America’s Surface Transportation Act (2015) FHWA Federal Highway Administration FMCSA Federal Motor Carrier Safety Administration FRA Federal Railroad Administration FTA Federal Transit Administration GHSA Governors Highway Safety Association HMCRP Hazardous Materials Cooperative Research Program IEEE Institute of Electrical and Electronics Engineers ISTEA Intermodal Surface Transportation Efficiency Act of 1991 ITE Institute of Transportation Engineers MAP-21 Moving Ahead for Progress in the 21st Century Act (2012) NASA National Aeronautics and Space Administration NASAO National Association of State Aviation Officials NCFRP National Cooperative Freight Research Program NCHRP National Cooperative Highway Research Program NHTSA National Highway Traffic Safety Administration NTSB National Transportation Safety Board PHMSA Pipeline and Hazardous Materials Safety Administration RITA Research and Innovative Technology Administration SAE Society of Automotive Engineers SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (2005) TCRP Transit Cooperative Research Program TEA-21 Transportation Equity Act for the 21st Century (1998) TRB Transportation Research Board TSA Transportation Security Administration U.S. DOT United States Department of Transportation

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The Federal-Aid Highway Program (FAHP) represents one of the largest grant programs in the federal domestic budget and is a combination of individual categorical and discretionary grant programs.

The TRB National Cooperative Highway Research Program's NCHRP Research Report 1023: Federal Funding Flexibility: Use of Federal-Aid Highway Fund Transfers by State DOTs investigates recent experience with statutory features that allow recipients of formula grants to shift the authority to use federal funds from one FAHP category to another, and even into other modes.

Supplemental to the report are a related webinar video, slides from the webinar, and notes from the webinar.

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