153 Transfer Program Guidance

    DOT Logo Memorandum
    U.S. Department of

    National Highway
    Traffic Safety
    Federal Highway

    NHTSA/FHWA Guidance: Section 153
    Transfer Funds
      Date: July 19, 1994
    Associate Administrator for
    Regional Operations
    Associate Administrator for
    Safety and System Applications
    Reply to
    Attn. of:
    NHTSA Regional Administrators
    FHWA Regional Administrators
    FHWA Division Administrators

    As NHTSA and FHWA continue to work together in the administration of various safety programs, it is important that our staffs understand and communicate policies accurately and uniformly to the States. In order to provide accurate and consistent guidance concerning the Section 153 transfer funds, we have jointly prepared the attached paper which addresses significant questions concerning the use and administration of these funds.

    Please review the guidance carefully and share the information with the affected States.

    Adele Derby and Dennis C. Judycki signatures


    Safety Belts Save Lives

    UNDER 23 U.S.C. 153

    1.   What are the eligible uses for Transferred Funds (T-funds)?

    The T-funds may be used for any eligible Section 402 activity to address identified highway safety problems. Eligible activities are to be carried out in accordance with joint regulations issued by NHTSA and FHWA: Uniform Procedures for State Highway Safety Programs (23 CFR Part 1200), Uniform Guidelines for State Highway Safety Programs (23 CFR Part 1204), and Highway Safety Programs: Determination of Effectiveness (23 CFR Part 1205).

    2.   Do Section 402 regulations apply to T-funds?

    Yes. Section 402 regulations apply to the transferred funds. In brief, these include:

      a.   Submission of a Highway Safety Plan-including problem identification and countermeasure justification plans-for approval by the NHTSA Regional Administrator and the FHWA Division Administrator, as required by 23 CFR Part 1205;

      b.   At least 40 percent of the T-funds must be used by or for the benefit of local governments;

      c.   The policy against supplanting (i.e. substituting Federal grant funds for existing State or locally-funded items) applies to T-funds, just as it does to 402 funds. In addition, T-funds are not available to cover costs of activities that constitute general expenses required to carry out the overall responsibilities of State or local governments (Reference: OMB Circular A-87);

      d.   Use of no more than 1.0 percent of the T-funds for planning and administration (P&A). However, before the State may use any T-funds for P&A, amounts chargeable to P&A must first be drawn from the regular Section 402 apportionment. (Reference: Joint FHWA/NHTSA memorandum, dated 9/28/93: Use of Funds Transferred under Section 153 for Section 402 Planning and Administration);

      e.   The 10 percent threshold for prior approval of financial change (23 CFR 1200.13(a)(4)] will be calculated separately for the T-funds, without regard to the existence of other 402 funds (i.e. it will not be based on the aggregate of T-funds and Section 402 funds):

      f.   For all significant activities and major equipment to be funded which have components both related and unrelated to a highway safety problem, the NHTSA/FHWA T-fund share shall be based proportionately on the projected utilization for the Federal grant purposes;

      g.   States are expected to prepare and submit an Annual Evaluation Report on their accomplishments using the T-funds, in accordance with 23 CFR 1200.33.

    3.   How are the T-funds different than regular Section 402 funds?

      a.   None of the T-funds are earmarked exclusively for NHTSA or FHWA eligible activities;

      b.   None of the T-funds are subject to a matching requirement, including funds to finance planning and administration (P&A) activities (Reference: Joint FHWA/NHTSA Memorandum,Use of Funds Transferred under Section 153 for Section 402 Planning and Administration (9/28193)1.

      c.   There is no requirement for a match )f T-funds are used to extend a NHTSA project beyond the customary three year limit: 23 CFR 1200.10(c)(2) does not apply to T-funds;

    4.   How and when will the transferred funds (T-funds) be distributed to the penalty States?

    The T-funds will be transferred to the States in a manner similar to the regular distribution of Federal-aid funds: via a Certificate of Apportionment which is issued October 1 of each year.

    Therefore, in relation to the Section 402 program (402), penalty States will receive three separate Certificates: NHTSA 402 funds, FHWA 402 funds, and T-funds without agency designation.

    The amount of T-funds will be a percentage of the State's Surface Transportation Program (STP), National Highway System (NHS), and Congestion Mitigation and Air Quality (CMAQ) apportionments, as specified by 23 U.S.C. 153 (h)(1).

    5.   Will an obligation limitation be applied to the T-funds? If so. what will be the amount of obligation limitation?

    Yes. The same obligation limitation that is applied to the Federal-aid categories from which these funds are transferred (i.e. STP, NHS, and CMAQ) will also apply to the T-funds. [Reference: 23 U.S.C. 153 (h)(4)].

    6.   Will there be a separate obligation limitation notice for T-funds?

    Yes. Since T-funds will be transferred with their own obligation limitation, a separate account will have to be maintained. Therefore, penalty States will receive three separate obligation limitation notices: NHTSA 402 funds, FHWA 402 funds, and T-funds.

    7.   What procedures do penalty States employ to obligate T-funds?

    States must submit an acceptable Highway Safety Plan (HSP), describing planned programs, projects, and activities, in order to secure Federal authority to obligate T-funds.

    8.   Do penalty States have to prepare and submit a separate NSP for. the T-funds? What submission deadlines apply? W11 there be a need for special coding requirements?

    No, a separate HSP is not required. States can expand their regular HSPs to include T-funds, as long as the HSP conforms to the provisions of 23 CFR Part 1205.

    An expanded HSP, or separate HSPs (Le. Regular 402 and T-funds),should be submitted on August 1 [as provided by 23 CFR f 1200.10(d)].

    To facilitate tracking of T -funded activities, States should prefix the existing NHTSA/FHWA program area codes with the letter "T" in the HSP and on related forms. If using one Highway Safety Program Summary Form (HS Form 217) to report both regular 402 and T-funds, the amounts must be shown in separate columns.

    9.   What will happen if a State's HSP does not program the entire amount of T-funds available?

    Only the amount of T-funds which have been approved as part of an acceptable HSP may be expended. The obligation limitation for any remaining T-funds will be withdrawn from that State and redistributed to other penalty States which indicate that they can obligate their T-funds for 402 activities before the end of the fiscal year.

    The total amount of funds penalty States will receive will not increase: redistributed obligation limitation plus existing T-fund obligation limitation will not exceed a State's total T-fund apportionment.

    10.   When will the redistribution of T-fund obligation limitation take place?

    Those States that fail to program or are unable to program all or part of their T-funds in an acceptable HSP must notify NHTSA of the amount of T-funds the State will be unable to obligate. This notification can occur on the date the HSP is submitted or, at the latest, by July 1 of the year for which the T-funds are available.

    The obligation limitation attached to these T-funds will be managed by NHTSA so that other penalty States have additional T-fund obligation limitation if they can obligate it for 402 activities by the end of the existing fiscal yew. NHTSA will offer this obligation limitation to penalty States on a prorated basis on July 15.

    11.   What will become of the obligation limitation attached to T-funds which cannot be obligated by the penalty States?

    Obligation limitation will first be made available to penalty States, not to exceed their total T-fund apportionment. T-fund obligation limitation which remains after July 15 will be returned to FHWA and distributed as part of FHWA's August Federal-aid redistribution process.

    12.   Wig States which fail to secure obligation for their T-funds (by not submitting an acceptable HSP for the T-funds) stand to recoup these funds in the Federal-aid redistribution process?

    No. Failing to secure obligation for the T-funds will not position a State to recoup those amounts under the FHWA August Federal-aid redistribution process. The State's T -fund apportionment will not be included when computing the State's unobligated balances for purposes of redistributing obligation limitation under the Federal-aid process.