1. PURPOSE. To advise of the limitation on Federal-aid highway program obligations for fiscal year (FY) 1997 and the distribution of this limitation among the States.
2. LIMITATION - LEGISLATIVE PROVISIONS. The Department of Transportation and Related Agencies Appropriations Act of 1997, (Public Law 104-205) provides for the limitation of obligations as follows:
   1. Obligations for Federal-aid highways are limited to $18,000,000,000 for FY 1997.
   2. This limitation shall not apply to obligations for projects covered under:

      (1) Sections 125, and 157, of Title 23, United States Code (23 U.S.C.);

      (2) Section 147 of the Surface Transportation Assistance Act of 1978;

      (3) Section 9 of the Federal-Aid Highway Act of 1981;

      (4) Sections 1103 through 1108 of the Intermodal Surface Transportation Efficiency Act of 1991;

   3. Each State is guaranteed sufficient authority to prevent lapse of sums authorized to be appropriated for Federal-aid highways which have been apportioned to a State.
   4. Amounts authorized for administrative expenses and funded from the administrative takedown authorized by section 104(a) of title 23, U.S.C., the Federal Lands Highway Program, the Intelligent Transportation Systems Program, and amounts made available under sections 1040, 1047, 1064, 6001, 6005, 6006, 6023, and 6024 of Public Law 102-240 are charged to the limitation but are excluded from the State-by-State distribution.
   5. After August 1, 1997, the Secretary will revise a distribution of funds made available if a State does not plan to obligate the amount distributed during FY 1997 and redistribute such amounts to those States able to obligate amounts in addition to those previously distributed during FY 1997. The redistribution will give priority to those States having large unobligated balances of funds apportioned under 23 U.S.C. 103(e)(4), 104, 144 and 1013(c) and 1015 of Public Law 102-240.
   6. Redistribution of FY 1997 authority reserved for Federal lands and Headquarters controlled programs. Any funds not obligated by July 31, 1997, are subject to withdrawal to be made available for August redistribution. If Federal Lands and Headquarters offices need any amounts that are withdrawn to be restored, they should include the amount in their request as part of the August Redistribution process.
   7. After August 1 and on or before September 30, 1997, a State which obligates the amount distributed in FY 1997 under the distribution based on apportioned and allocated funds, as well as any redistribution amounts made available after August 1, 1997, may obligate for Federal-aid highways and highway safety construction on or before September 30, 1997, an additional amount. The aggregate amount which may be obligated by all States under this additional obligation authority cannot exceed 2.5 percent of the aggregate amount of funds apportioned or allocated under sections 104 and 144 of 23 U.S.C.; and 1013(c) and 1015 of Public Law 102-240 which would not be obligated in FY 1997, if the total amount of obligational authority were utilized. No State may utilize this additional obligational authority that does not utilize all obligation authority distributed to it for FY 1997 or does not utilize all additional obligation authority redistributed to it after August 1. In addition, this provision will not apply to any State releasing formula obligation authority for the August redistribution.
   8. Funds apportioned for FY 1997 to the States during FY 1997 have been used to determine the factors for making a State-by-State distribution of the obligation limitation. The State-by-State distribution of the FY 1997 obligation limitation is shown on Attachment 1.
3. DISCRETIONARY AND/OR OTHER NON-FORMULA FUNDS. Obligational authority is reserved for discretionary and/or other non-formula funds estimated to be allocated during the fiscal year. Obligational authority will be distributed with each allocation of funds during FY 1997 at 87 percent.
4. FEDERAL LANDS PROGRAM. The obligational authority for the Federal Lands Highway program has been reserved from distribution. Distribution of the reserved authority will be made by the Federal Lands Highway Program Office.
5. TERRITORIAL HIGHWAY PROGRAM. Obligational authority for the Territorial Highway Program has been reserved from distribution. Distribution of the reserved authority will be made by the Associate Administrator for Program Development.
6. TOTAL LIMITATION. Obligation authority available for distribution in FY 1997 is less than the total apportionments and allocations for the year on which the distribution is based. The pro rata share of 87 percent is available for distribution with apportioned (formula) funds. Allocated (non-formula) funds will be distributed with obligation limitation of 87 percent. Attachment 1 shows each State's share of the limitation distributed by formula and the amount reserved for non-formula programs.
7. FUNDS SUBJECT TO FY 1997 LIMITATION. Obligation of the funds shown on Attachment 2 are chargeable to the FY 1997 limitation. Also shown are funds exempt from the limitation.
8. ACTION. Division Administrators should ensure that copies of this Notice are furnished to State Highway Agencies.

Original signed by,

Rodney E. Slater
Federal Highway Administrator