Federal Share Flexibility Pilot Program Publication: Federal Register Agency: Federal Highway Administration Byline: Shailen P. Bhatt Date: 29 January 2024 Subjects: American Government , Roads & Highways

[Federal Register Volume 89, Number 19 (Monday, January 29, 2024)]
[Notices]
[Pages 5601-5603]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-01696]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration


Federal Share Flexibility Pilot Program

AGENCY: Federal Highway Administration (FHWA), Department of 
Transportation (DOT).

ACTION: Notice.

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SUMMARY: The FHWA is announcing a pilot program to enable, on an 
experimental basis, a State department of transportation (State DOT) to 
determine the Federal share on a project, multi-project, or program 
basis for projects under certain specified programs. The Federal Share 
Flexibility Pilot (Pilot) Program will be carried out until September 
30, 2026.

DATES: Applications must be received by March 29, 2024.

ADDRESSES: All application materials should be emailed to 
FSPPP@Sharepointmail.dot.gov or mailed attention to Rhonda Shaffer, 
Federal Highway Administration, Room E62-332, 1200 New Jersey Avenue 
SE, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Mr. Dan Parker, Senior Program 
Analyst, Office of Financial Management, (801) 955-3518, 
Danial.Parker@dot.gov.

SUPPLEMENTARY INFORMATION:

Electronic Access

    An electronic copy of this notice may be downloaded from the Office 
of the Federal Register's home page at: www.federalregister.gov/ and 
the Government Publishing Office's web page at: www.gpo.gov/fdsys/.

Background

    The Federal-aid highway program is a federally funded, State-
administered program, under which State DOTs are responsible for 
determining which projects are federally funded. Projects are 
authorized and federally funded up to the maximum Federal share as 
authorized in statute. Section 11107 of the Bipartisan Infrastructure 
Law (BIL), enacted as the Infrastructure Investment and Jobs Act (IIJA) 
(Pub. L. 117-58), amended section 120(l) of title 23, United States 
Code (U.S.C.) to require the establishment of a Pilot Program not later 
than 180 days after the date of enactment of the BIL. In accordance 
with 23 U.S.C. 120(l), selected States in the Pilot Program are allowed 
to determine the Federal share on an individual project that is more 
than 0 percent and up to 100 percent as long as the average annual 
Federal share of all participating projects does not exceed the average 
of the maximum Federal share of those projects if those projects were 
not carried out under the Pilot Program. The following guidelines have 
been established for the Pilot Program:
    (a) Up to 10 State DOTs may participate in the Pilot Program.
    (b) The Pilot Program will expire on September 30, 2026.
    (c) The Federal share will be determined based on the following 
criteria:
    (1) Determined based on project, multiple projects, or program 
basis.
    (2) Maximum Federal share for an individual project under the Pilot 
Program is 100 percent.
    (3) Minimum Federal share for an individual project under the Pilot 
Program is greater than 0 percent (i.e., any project authorized under 
the Pilot Program cannot be 0 percent).
    (4) The average annual Federal share of the total cost of all 
projects authorized under this Pilot Program shall not exceed the 
average of the maximum Federal share of those projects if those 
projects were not carried out under the Pilot Program.
    (d) State DOTs participating in the Pilot Program may determine the 
Federal share on a project, multiple-project, or program basis for 
projects under any of the following programs:
    (1) National Highway Performance Program (23 U.S.C. 119).

[[Page 5602]]

    (2) Surface Transportation Block Grant (23 U.S.C. 133).
    (3) Highway Safety Improvement (23 U.S.C. 148).
    (4) Congestion Mitigation and Air Quality Program (23 U.S.C. 149).
    (5) National Highway Freight Program (23 U.S.C. 167).
    (6) Carbon Reduction Program (23 U.S.C. 175).
    (7) Subsection (c) eligible activities of the Promoting Resilient 
Operations for Transformative, Efficient, and Cost saving 
Transportation Program (23 U.S.C. 176).
    (e) Participating State DOT Requirements:
    (1) Submit an application in accordance with the instructions 
below.
    (2) Have in place adequate financial controls to allow the State to 
determine the average annual Federal share requirements under the Pilot 
Program.

Objectives of the Pilot Program

    The objectives of the Pilot Program are to:
    (1) Determine if State DOTs experience efficiencies in connection 
with oversight of projects and determining the Federal share amounts on 
a project, multi-project, or program basis.
    (2) Determine whether this innovative approach helps State DOTs 
deliver Federal-aid highway projects with more efficiency and 
effectiveness.
    (3) Assess whether this approach helps FHWA realize process 
efficiencies through flexible Federal share amounts.

Pilot Program Description

    The Federal-aid highway program supports States by providing 
financial assistance for the design, construction, preventive 
maintenance, and other federally eligible costs associated with about 
25 percent of the 3.9 million mile highway network of the United 
States, which includes the Interstate Highway System and the National 
Highway System, as well as primary highways and other major collector 
roads. Federal funds and obligation authority are distributed to the 
State DOTs, which act on behalf of the States in accordance with 23 
U.S.C. 145, 302, and 23 Code of Federal Regulations (CFR) 1.3. The 
Pilot Program will test the impact of flexible Federal share funding on 
project delivery efficiency and effectiveness.

Application and Submission

    In accordance with 23 U.S.C. 120(l)(2)(C)(i), applications must 
include the information below. Incomplete applications will not be 
considered. The FHWA may ask any applicant to supplement data in its 
application but expects the applications to be complete upon 
submission. The FHWA will expect State DOTs to provide additional 
information described in the participant selection section, if 
requested. Applications must include the following information for it 
to be considered for the Pilot Program:
    Title page: The title page must include the State DOT's name, 
address, Federal program funding size, total program funding size 
(Federal plus other), and primary point of contact for the Pilot 
Program.
    Structure: The State DOT must show its organizational structure and 
clearly articulate how its organizational structure is adequately 
staffed and suitably equipped to administer this Pilot Program.
    Narrative: The narrative must include and address the following:
    (1) Describe and quantify how participation in the Pilot Program 
will accelerate project delivery and improve efficiency and 
accessibility to the benefits derived from the Federal-aid highway 
program, generally and specifically regarding program administration in 
the applicant's State. The benefits discussion must address the 
anticipated overall program and project delivery cost and scheduled 
savings. The State DOT should identify administrative impediments or 
delays associated with the current project delivery and oversight 
process that would be modified or eliminated under the Pilot Program.
    (2) Describe and quantify how participation in the Pilot Program 
will provide added value to the State DOT, FHWA, project delivery and 
the communities served by the transportation projects.
    (3) Describe how the State DOT will evaluate the effects of 
applicable Federal-aid project delivery requirements on the State DOT's 
project delivery capacity under the Pilot Program. In doing so, the 
State DOT should consider comparing the costs and efficiency of project 
delivery using historical information under the authorized Federal 
share requirements and using the Pilot Program flexibilities.
    Certification: A certification statement that the State DOT has the 
capacity and internal control to administer the Pilot Program in 
accordance with the applicable requirements including adequate 
financial controls to allow the State to determine the average annual 
Federal share requirements under the Pilot Program.
    This information collection has been approved by Office of 
Management and Budget (OMB) under #2125-0670. Notwithstanding any other 
provision of law, no person is required to respond to, nor shall any 
person be subject to a penalty for failure to comply with, a collection 
of information subject to the Paperwork Reduction Act, unless that 
collection displays a currently valid OMB control number.

Application Review and Selection

    This section outlines the process and factors that FHWA will use to 
evaluate and select applicants to participate in the Pilot Program. The 
FHWA will use the following rating factors, each of which is of equal 
importance, for the selection of Pilot Program participants.

Rating Factors

    (1) Anticipated project delivery cost savings.
    (2) Anticipated project delivery time savings.
    (3) Added value of the proposed approaches to the State DOT, FHWA, 
project delivery and the communities served by the transportation 
projects (e.g., fosters effective and efficient stewardship and 
oversight as well as integrity of the Federal-aid Highway Program 
funds; promotes sustainability; or captures higher impact 
opportunities).
    (4) Evaluation of the State DOT's financial management (i.e., 
accounting) and project delivery systems in accordance with 23 U.S.C. 
106(g)(2)(A) and (g)(3).
    (5) Compliance assessment of the State DOT's financial controls and 
project delivery program in accordance with government-wide 
requirements in 2 CFR 200.302-303.
    After determining eligibility, FHWA will evaluate proposals and 
make selections using the rating factors described above to determine 
the applications that are in the best interest of FHWA. The FHWA will 
then select the State DOTs eligible as Pilot Program participants. The 
FHWA will accept proposals throughout the duration of the Pilot 
Program.

Performance of Pilot Program Participants

    A State DOT selected to participate in the Pilot Program will 
assume responsibility for compliance with all procedural and 
substantive Federal requirements as would apply to the Pilot Program. 
These requirements include Pilot Program specific reporting, regular 
Federal-aid reporting, construction administration, financial 
administration, performance management, and all other applicable 
Federal requirements, unless FHWA determines that such assumption of 
responsibility for one or more of the

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procedural or substantive requirements is not appropriate. Each State 
DOT selected for the Pilot Program must work with FHWA to develop and 
implement a plan to collect information and report on the State DOT's 
performance with respect to the relevant objectives outlined in the 
Pilot Program.
    Each participating State DOT will enter into a memorandum of 
agreement (MOA) with FHWA. The MOA will require the State DOT to 
provide to FHWA any information that FHWA considers necessary to ensure 
that the State DOT carries out the requirements of the Pilot Program. 
The MOA shall not extend beyond September 30, 2026.
    To ensure compliance with the Pilot Program by participating State 
DOTs, FHWA may conduct audits, reviews, and assessments during the 
Pilot Program. Such audits will be in addition to any of FHWA's other 
stewardship and oversight responsibilities relating to the Pilot 
Program, as well as any other projects or other activities carried out 
under the Pilot Program.
    The FHWA will assess the partnership developed under this Pilot 
Program in accordance with existing requirements. The FHWA may 
terminate a MOA with State or a Pilot Program within a State at any 
time for failure to comply with requirements of 23 U.S.C. 120(l) or for 
any reason consistent with 2 CFR 200.339, including, but not limited 
to, inadequate performance or resources to administer the Pilot 
Program. The participating State DOT may also terminate the Pilot 
Program upon FHWA's receipt of a 90-day notice from a State DOT.
    Authority: 23 U.S.C. 120(l); Sec. 11107, Pub. L. 117-58, Stat. 459.

Shailen P. Bhatt,
Administrator, Federal Highway Administration.
[FR Doc. 2024-01696 Filed 1-26-24; 8:45 am]
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