1. PURPOSE. To advise of the revised limitation on Federal-aid highway program obligations for FY 1998 and the distribution among the States.
2. CANCELLATION. FHWA Notice N4520.149, "Federal-Aid Highway Program Obligations Fiscal Year (FY) 1998 - Surface Transportation Extension Act of 1997," dated December 5, 1997; and FHWA Notice N4520.150, "Federal-Aid Highway Program Obligations - Fiscal Year (FY) 1998 - Transportation Equity Act for the 21st Century," dated June 10, 1998, are hereby canceled.
3. BACKGROUND. The distribution of FY 1998 obligation limitation has been revised based on the technical amendments to the Transportation Equity Act for the 21st Century pursuant to the TEA 21 Restoration Act.
4. LIMITATION - LEGISLATIVE PROVISIONS. The Transportation Equity Act for the 21st Century, as amended, provides for the limitation on obligations as follows:
   1. The total obligations for Federal-aid highway and highway safety construction programs shall not exceed $21,500,000,000 for FY 1998.
   2. The limitation under subsection (a) shall not apply to obligations under:

      (1) section 125 of title 23, United States Code;

      (2) section 147 of the Surface Transportation Assistance Act of 1981;

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

      (4) sections 131(b) and 131(j) of the Surface Transportation Assistance Act of 1982;

      (5) sections 149(b) and 149(c) of the Surface Transportation Relocation Assistance Act of 1987;

      (6) sections 1103 through 1108 of the Intermodal Surface Transportation Efficiency Act of 1991;

      (7) section 157 of title 23, United States Code, as in effect on the day before the date of enactment of the Transportation Equity Act for the 21st Century;

      (8) section 105 of title 23, United States Code (but, for each of the fiscal years 1998 through 2007) , only in an amount equal to $639,000,000 per fiscal year; and

      (9) section 218, title 23, United States Code.
5. ALLOCATED ACCOUNTS
   1. Amounts authorized for administrative expenses and funded from the administrative takedown authorized by section 104(a) of title 23, United States Code, the amount authorized for highway use tax evasion program and for the Bureau of Transportation Statistics are subject to the limitation on obligations but are excluded from the State-by-State distribution.
   2. Unobligated balances of funds from previous fiscal years which are allocated by the Secretary are subject to the limitation on obligations but are excluded from the State-by-State distribution.
   3. Obligation of funds authorized for Transportation Research under section 5001(a) of the Transportation Equity Act for the 21st Century, as amended, shall not exceed $397,650,000 for FY 1998 and shall remain available for a period of three fiscal years. This limitation is within the overall limitation of $21,500,000,000 for FY 1998.
   4. Amounts which are allocated to the States will be covered by an equal amount of obligation limitation which will be distributed with the allocation of the funds.
6. REDISTRIBUTION OF CERTAIN AUTHORIZED FUNDS
   1. Pursuant to section 1102(f) of the Transportation Equity Act for the 21st Century, the Secretary shall distribute to the States any funds authorized to be appropriated for such fiscal year for Federal-aid highway programs which are allocated by the Secretary, that the Secretary determines will not be allocated to the States and will not be available for obligation due to the imposition of any obligation limitation for FY 1998.
   2. Such distribution to the States shall be accomplished within 30 days of the date of this Notice. The funds so distributed shall be available for any purposes described in section 133(b) of title 23, United States Code.
   3. Headquarters program offices will be notified by the Office of Budget and Finance of the reduction in contract authority due to the imposition of the obligation limitation for FY 1998.
7. OBLIGATION LIMITATION DISTRIBUTED TO THE STATES
   1. Attachment 1 shows the amount of formula obligation limitation distributed to each State for FY 1998. Each State receives a proportional amount of obligation limitation available to be distributed to the States based on the ratio that each State's total apportionments subject to the limitation on obligations bears to the total of such apportionments to all States.
   2. Pursuant to Section 1103(m) (5) of the Transportation Equity Act for the 21st Century the amount of obligation authority made available under section 2(e) of the Surface Transportation Extension Act of 1997 shall be considered to be an amount of obligation authority made available for fiscal year 1998 under section 1102(a) of this Act.
   3. After August 1, 1998, the Secretary will revise the distribution of limitation made available if a State does not plan to obligate the amount distributed during FY 1998 and redistribute such amount to those States able to obligate amounts in addition to those previously distributed during FY 1998. The redistribution will give priority to those States having large unobligated balances of funds apportioned under title 23, United States Code, Sections 104 and 144; section 160 of title 23 (as in effect on the day before enactment of the Transportation Equity act for the 21st Century); and section 1015 of the Intermodal Surface Transportation Act of 1991.
8. SPECIAL LIMITATION
   1. Section 1102(a) (4) of the Transportation Equity Act for the 21st Century provides for obligation limitation within the overall obligation ceiling of $21,500,000,000 for the funds authorized under the following:

      (1) section 117 of title 23, United States Code (relating to high priority projects program);

      (2) section 201 of the Appalachian Regional Development Act of 1965;

      (3) the Woodrow Wilson Memorial Bridge Act of 1995; and

      (4) $2,000,000,000 for section 105 of title 23, United States Code (relating to minimum guarantee).

   2. This special limitation associated with the programs listed above shall remain available until used for the obligation of funds for which distributed and shall be in addition to any amount of any limitation imposed for future fiscal years.
   3. The State-by-State distribution of the special limitation associated with minimum guarantee for FY 1998 is also shown in Attachment 1. The special limitation associated with High Priority Projects, the Appalachia Regional Development Act and the Woodrow Wilson Memorial Bridge Act will be distributed when the funds are allocated to the States.
9. ACTION. Division Administrators should ensure that copies of this Notice are furnished to State transportation agencies.

Original signed by,

Kenneth R. Wykle
Administrator