1. PURPOSE. To provide procedures governing determination and redistribution of unneeded balances of FY 1998 obligation authority under section 1102(d) of the Transportation Equity Act for the 21st Century (TEA-21), Public Law 105-178.
2. BACKGROUND
   1. Section 1102(d) of TEA-21 provides for the redistribution after August 1, 1998, of any authority distributed to a State for FY 1998 if the State will not obligate the authority by September 30, 1998.
   2. A total of $16.7 billion in obligation authority was distributed by formula to the States for FY 1998. An additional amount of $2.9 billion was reserved for distribution as special limitation for the Minimum Guarantee, High Priority Projects Program, and the Woodrow Wilson Bridge. These amounts remain available until expended and are not subject to redistribution. The remaining $1.9 billion was reserved from the distribution and used to support the allocation of non-formula (allocated), Federal Lands Highway Program, Transportation Research and administrative funds.
   3. Amounts of unneeded obligation authority initially distributed by formula will be identified separately from unneeded balances of authority reserved from formula distribution and used to support obligation of FY 1998 allocations of non-formula, Federal Lands and administrative funds. States need not report on special limitation provided for the Minimum Guarantee, High Priority Projects Program, and the Woodrow Wilson Bridge. 
3. REDISTRIBUTION OF UNOBLIGATED FY 1998 AUTHORITY INITIALLY DISTRIBUTED BY FORMULA
   1. To provide a basis for determining (1) the amount of FY 1998 obligation authority initially distributed by formula that will be available for redistribution among the other States after August 1, 1998, and (2) those States that are able to obligate amounts in addition to that previously distributed, each State shall submit a plan by August 19, 1998, to the Division Administrator showing:

      (1) the July 31, 1998, unobligated balance of obligation authority (formula), and

      (2)the projects and/or Federal funds that will be obligated, or could be obligated in the State by September 30, 1998, if additional authority is provided; or

      (3)the obligation authority that is in excess and is released by the State.

   2. The Division Administrator shall review the plan submitted by the State and reach an agreement with the State on those projects which could be approved and authorized by the Division office on or before September 30, 1998.
   3. By August 24, 1998, the Division Administrators shall submit a report to Washington Headquarters, Office of Budget and Finance, (HFS-10) showing, (1) the amount of FY 1998 formula authority that is in excess and is released by the State, or (2) that the State and Division Administrator have reached an agreement that the State's remaining unobligated FY 1998 formula authority can be obligated by September 30, 1998.
4. RELEASE OF UNOBLIGATED FY 1998 AUTHORITY DISTRIBUTED TO SUPPORT OBLIGATION OF NON-FORMULA (ALLOCATED) FUNDS
   1. The amount of FY 1998 obligation authority distributed to support obligation of non-formula (allocated) funds that will not be obligated by September 30, 1998, should be determined by the Division Administrator in consultation with the State.
   2. By August 24, 1998, the Division Administrator shall submit a report to Washington Headquarters, Office of Budget and Finance (HFS-10) showing (1) the amount of non-formula authority (allocated), by program, released by the State, or (2) that the State and Division Administrator have reached an agreement that the State will obligate available non-formula (allocated) funds by September 30, 1998.
   3. Non-formula (allocated) funds and associated obligation limitation which will not be obligated by September 30, 1998, should be returned to the appropriate Washington Headquarters program office no later than August 19, 1998.
5. REDISTRIBUTION OF FY 1998 AUTHORITY RESERVED FOR FEDERAL LANDS AND HEADQUARTERS CONTROLLED PROGRAMS
   1. Any non-formula (allocated) funds and associated obligation limitation not obligated by July 31, 1998, must be withdrawn and made available for August redistribution unless Federal Lands and Headquarters offices have firm commitments that the unobligated amounts will be obligated by September 30, 1998.
   2. Each Associate Administrator should report the total obligations for each program and the amount, if any, which will not be obligated by September 30, 1998, to the Budget Division (HFS-10) no later than August 24, 1998.
   3. Obligation Authority made available for Transportation Research Programs is available for three years and need not be released for this fiscal year=s redistribution process.
6. REDISTRIBUTION OF RELEASED OBLIGATION AUTHORITY
   1. A formula for redistribution of released obligation authority will be developed to implement the requirements of section 1102(d) of TEA-21. Priority will be given to those States having large unobligated balances of funds apportioned under Sections 104, 144 and 160 of Title 23, United States Code and under section 1015 of the Intermodal Surface Transportation Act of 1991.
   2. The August redistribution shall be accomplished by September 8, 1998.
7. PROGRAM MONITORING. The Washington Headquarters will monitor the program on a national basis to ensure that all available authority subject to lapse on September 30, 1998, is fully utilized.

Original signed by,

Anthony R. Kane
Executive Director