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Funding Considerations
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Introduction

Funding for transportation improvements can come from a range of different sources, including federal, state, and local. In Massachusetts, the majority of large transportation construction projects are funded with a combination of federal transportation and required non-federal match, generally provided by the Commonwealth of Massachusetts. The following is a summary of the principal funding sources that support the construction of transportation projects in Massachusetts.

Federal Funding

Federal transportation funding is principally allocated through multi-year transportation funding laws. On July 6, 2012, President Obama signed into law P.L. 112-141, the Moving Ahead for Progress in the 21st Century Act (MAP-21), the current federal transportation funding law. Funding surface transportation programs at over $105 billion for federal fiscal years (FFY) 2013 and 2014, MAP-21 is the first long-term highway authorization enacted since 2005.

MAP-21 is expected to provide Massachusetts with a level of federal funding comparable to that provided in recent years under the previous transportation funding authorization, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). Estimated national FFY2014 highway funding apportionment levels increased slightly to $37.8 billion; similarly, Massachusetts highway funding apportionment increased slightly to $593 million in FFY2014. On the transit side, the national apportionment levels will increase slightly to $10.7 billion in FFY2014; specific amounts of transit apportionment for Massachusetts is determined annually based on program criteria.

Under Title 23 of the Code of Federal Regulations (CFR), federal transportation funding must be programmed in each state’s State Transportation Improvement Program (STIP); federal transportation funding to be spent in a metropolitan area must also be programmed on the Transportation Improvement Program (TIP) of that area’s metropolitan planning organization. Both the STIP and individual TIPs are required to cover a period of four years and be updated every 4 years or more frequently if the Governor elects to update more frequently. In Massachusetts, the STIP and TIPs are updated every year.

MAP-21 consolidates existing transportation funding programs as established in SAFETEA-LU. Most highway funding will be distributed through four core programs, while MAP-21 eliminates or consolidates a number of transit programs, and converts a significant amount of program funding that is currently discretionary to formula funding. The FY2014-FY2017 STIP and its underlying TIPs represent the first implementation of the MAP-21 funding categories for the full TIP/STIP development process (the FY2013-2016 TIPs and STIP were revised after their completion to reflect new MAP-21 funding categories).

The following is a summary of the various federal funding categories under MAP-21, including descriptions of the funding programs, eligible expenditures, eligible project proponents, and required non-federal match.

Federal Highway Administration

MassDOT divides the federal highway funding that it receives between “regional target funding,” which is allocated at the discretion of the MPOs for regional priority projects on the federal aid transportation system, and funding that is allocated at MassDOT’s discretion for use principally on the state-owned transportation system.

Each MPO’s regional target funding is composed of shares of Surface Transportation Program, Congestion Mitigation and Air Quality Improvement Program, Highway Safety Improvement Program, and Transportation Alternatives Program funding. "Statewide" funding that is allocated at MassDOT's discretion includes funding from all of the federal highway sources listed below.

National Highway Performance Program (NHPP)

Program Description

The new NHPP provides support for the condition and performance of the National Highway System (NHS), for the construction of new facilities on the NHS, and for investments of Federal-aid funds in highway construction that support progress toward the achievement of performance targets established in a State's asset management plan for the NHS.
The NHPP replaces programs with dedicated funding for repair by consolidating the Interstate Maintenance, National Highway System, and Highway Bridge Repair programs. Under MAP-21, the NHS has been expanded to comprise approximately 220,000 miles of rural and urban roads serving major population centers, international border crossings, intermodal transportation facilities, and major travel destinations. It includes:

  • The Interstate System.
  • All principal arterials (including those not previously designated as part of the NHS) and border crossings on those routes.
  • Intermodal connectors -- highways that provide motor vehicle access between the NHS and major intermodal transportation facilities.
  • STRAHNET -- the network of highways important to U.S. strategic defense.
  • STRAHNET connectors to major military installations.
Funding

The federal share is determined in accordance with 23 USC 120, including a special rate for certain safety projects and a new provision for increased Federal share for projects incorporating Innovative Project Delivery. The Federal share for NHPP projects for a State that has not implemented an asset management plan within the established timeframe is limited to 65 percent. Other exceptions to 23 USC 120 are provided for certain freight projects, workforce development, training, and education activities, Appalachian development highway system projects.

Eligible activities

NHPP projects must be on an eligible facility and support progress toward achievement of national performance goals for improving infrastructure condition, safety, mobility, or freight movement on the NHS, and be consistent with Metropolitan and Statewide planning requirements.

Eligible activities include:

  • Construction, reconstruction, resurfacing, restoration, rehabilitation, and preservation of highways and bridges
  • Construction, rehabilitation, or replacement of existing ferry boats and facilities, including approaches, that connect road segments
  • Bridge and tunnel inspection and evaluation as well as the training of bridge and tunnel inspectors
  • Highway safety projects
  • Transit capital projects (only under certain conditions)
  • Federal aid highway improvements (only under certain conditions)
  • Environmental restoration and mitigation
  • Intelligent Transportation Systems (ITS)
  • Bicycle and pedestrian infrastructure

Workforce development, training, and education activities are also an eligible use of NHPP funds.

Location of projects

NHPP funds may only be used for projects on or associated with the NHS as described above under "Eligible activities." An exception is provided under certain circumstances for non-NHS highway or transit projects in an NHS corridor. Federal-aid and off system bridges are not eligible under the NHPP program

Bridge (BR)

Federal-aid bridge funding (80 percent federal / 20 percent non-federal) is used to rehabilitate or replace bridges based upon the structure’s adequacy, safety, serviceability, age and public usage. Bridge funding is sub-allocated for projects that are on the federal-aid system (a road classified as a collector or higher) (BR-On) and those that are not (BR-Off). Funding for bridges on the federal-aid system is provided through the National Highway Performance Program, while funding for off system bridges is through a suballocation of the Surface Transportation Program.

Highway Safety Improvement Program (HSIP)

Program Description

The Highway Safety Improvement Program (HSIP) funds safety improvement projects to reduce the number and severity of crashes at hazardous locations (90 percent federal / 10 percent non-federal). The HSIP is guided by a data-driven state Strategic Highway Safety Plan that defines state safety goals, ranks dangerous locations, and includes a list of projects. Under MAP-21, the safety plan is required to improve data collection on crashes and updates to more accurately identify dangerous locations.

Eligible activities

Any project on a public road, trail or path that is included in a state’s Strategic Highway Safety Plan and corrects a safety problem (such as an unsafe roadway element or a hazardous location) is eligible for HSIP funding. Eligible projects include, but are not limited to the following: intersection improvements, construction of shoulders, high risk rural roads improvements, traffic calming, data collection, and improvements for bicyclists, pedestrians, and individuals with disabilities.

MAP-21 does not eliminate any eligible project categories that were previously eligible under SAFETEA-LU. In addition, the bill clarifies that retroreflectivity upgrades, truck parking facilities, safety audits, older driver improvements and systemic safety improvements are eligible expenses. Other non-infrastructure safety projects are eligible for HSIP funding, including safety education, training, and workforce development.

Surface Transportation Program (STP)

Program Description

The Surface Transportation Program (STP) provides flexible funding that may be used by States and localities for projects to preserve and improve the conditions and performance on any Federal-aid highway, bridge and tunnel, as well as for projects on any public road (except local roads and rural minor collectors), pedestrian and bicycle infrastructure, and transit capital projects, including intercity bus terminals.

Funding

The Federal share is governed by 23 U.S.C. 120. It is generally 80 percent, subject to the upward sliding scale adjustment for States containing public lands. The Federal share for projects on the Interstate System is 90 percent, subject to the upward sliding scale adjustment, unless the project adds lanes that are not high-occupancy-vehicle or auxiliary lanes. For projects that add single occupancy vehicle capacity, that portion of the project that increases single occupancy vehicle capacity will revert to the 80 percent level.

Fifty percent of a State’s STP funds are to be distributed to areas based on population (suballocated), with the remainder to be used in any area of the State. Consultation with rural planning organizations, if any, is required. A special rule is provided to allow a portion of funds reserved for rural areas to be spent on rural minor collectors, unless the Secretary determines this authority is being used excessively.

Eligible activities
  • Highway and bridge construction and rehabilitation
  • De-icing of bridges and tunnels
  • Congestion pricing and travel demand management
  • Off-system bridge repair
  • Development of state asset management plan
  • Transit capital projects
  • Carpool projects and fringe and corridor parking
  • Surface transportation planning
  • Bicycle, pedestrian, and recreational trails
  • Electric and natural gas vehicle infrastructure
  • Construction of ferry boats and terminals
  • Intelligent transportation systems
  • Environmental mitigation
  • Border infrastructure projects

Workforce development, training, and education activities are also an eligible use of STP funds.

Location of Projects

In general, STP projects may not be on local or rural minor collectors. However, there are a number of exceptions to this requirement. A State may use up to 15 percent of its rural suballocation on minor collectors. Other exceptions include: ADHS local access roads, bridge and tunnel replacement and rehabilitation (not new construction), bridge and tunnel inspection, carpool projects, fringe/corridor parking facilities, bike/pedestrian walkways, safety infrastructure, Transportation Alternatives, recreational trails, port terminal modifications, and minor collectors in NHS corridors.

Congestion Mitigation and Air Quality Improvement Program (CMAQ)

Program Description

The Congestion Mitigation and Air Quality Improvement Program (CMAQ) provides federal funding for states to support projects and programs intended to improve air quality and reduce traffic congestion. CMAQ funds (80 percent federal / 20 percent non-federal) are used for transportation programs and projects that will contribute to the attainment of a National Ambient Air Quality Standard in ozone, small particulates matter and carbon monoxide non-attainment areas. As defined by federal regulations and guidance, examples of projects eligible for CMAQ funding include:

  • Traffic flow improvements
  • Public transit services and facilities
  • Alternative fuel vehicles and fueling stations
  • Bicycle and pedestrian facilities and programs
  • Rideshare activities and outreach to commuters and employers
  • Vehicle inspection and maintenance programs
  • Truck stop electrification
  • Diesel retrofits

CMAQ funds generally can only be used to support projects in areas not in conformity with the National Ambient Air Quality Standards (NAAQS). The entirety of Massachusetts is out of compliance with the NAAQS ozone standard, thereby allowing CMAQ-funded projects to be implemented in every Commonwealth community and on a statewide basis. CMAQ funding is apportioned to the states based on a calculation of relative air quality and the number of residents affected by air pollution. Under MAP-21, Massachusetts’ CMAQ apportionment was about $76 million for federal fiscal year 2013.

CMAQ Planning Process

In Massachusetts, a portion of CMAQ funding is prioritized and programmed by the ten Metropolitan Planning Organizations and three non-metropolitan regional commissions or councils (referred to collectively as MPOs). Each MPO is required to include CMAQ-funded projects in the regional target portion of its Transportation Improvement Program (TIP) in order to fully utilize the regional target funding.

In addition to the MPO-selected CMAQ projects funded through the regional targets, MassDOT has a statewide CMAQ program. Most of the projects funded through this statewide program are developed by state agencies, including MassDOT. The Commonwealth has used the statewide CMAQ program as a way to support a number of projects and initiatives, including the increased use of alternative fuels; construction of shared-use paths, including elements of the BSG 100; the MassRIDES Travel Options program; and the Diesel Bus Retrofit Program in conjunction with the Department of Environmental Protection.

Prior to programming on the TIPs and STIP for use of CMAQ funds, projects must be reviewed by the CMAQ Consultation Committee, which is responsible for determining whether a project shows an air quality benefit and is eligible for CMAQ funding. The members of the Committee represent MassDOT, DEP, U.S. DOT, U.S. EPA, and the MPOs.

Federal Highway Administration's program guidance

Transportation Alternatives Program (TAP)

Program Description

The Transportation Alternatives Program (TAP) is a competitive grant program created by the federal Moving Ahead for Progress in the 21st Century Act (MAP-21). TAP provides funding for a variety of transportation projects types, including projects that would previously have been eligible for funding under separate programs: the Transportation Enhancements, Recreational Trails, and Safe Routes to School programs.

Funding Allocation

In accordance with MAP-21 requirements, MassDOT has suballocated 50 percent of TAP funding to urbanized areas with a population over 200,000, and has given control of these funds to the MPOs that cover such urbanized areas. The remaining 50 percent of the TAP funding is allocated for use in any area of Massachusetts, to be determined by MassDOT based on a competitive, merit-based process. MassDOT has established a strong Safe Routes to School program that leads the nation by many measures. In order to maintain the viability of its Safe Routes to School program, MassDOT has elected to dedicate the 50 percent share of TAP funding at its discretion to Safe Routes to School infrastructure projects. These projects make small-scale but critical investments in improving pedestrian and bicycle access and safety to elementary and middle schools across Massachusetts.

Program Competitiveness and Eligibility Details

MAP-21 requires that all TAP funds be distributed to projects based on merit, through a competitive process. All of the MPOs in Massachusetts have objective evaluation criteria against which all projects are scored. Because the selection of regional target projects by Massachusetts MPOs is already on a competitive, merit-based scoring process, MPOs may continue to use this system for the distribution of the suballocated TAP funds. As noted above, MassDOT plans to allocate all of its statewide TAP funding to SRTS infrastructure projects. MassDOT already runs a competitive application process for SRTS infrastructure projects, in which municipal proponents must submit an assessment request form, undergo a site visit, cooperate with MassDOT and its consultants on a planning study, have a project identified, and then have that project selected from among many potential school projects as being highly likely to improve walking and bicycling safety and access.

Eligible Project Proponents/Applicants

The following entities are eligible project proponents and applicants for TAP funding.

  • Local governments
  • Regional transportation authorities
  • Transit agencies
  • Natural resource or public land agencies
  • School Districts, local education agencies or schools
  • Tribal governments
  • Other local or regional governmental entities with responsibility for the oversight of transportation or recreational trails (other than a metropolitan planning organization or State agency) that the State determines to be eligible
Eligible activities

In accordance with MAP-21, Massachusetts TAP funds may be used for the following types of projects:

  • Construction, planning, and design of on-road and off-road trail facilities for pedestrians, bicyclists and other non-motorized forms of transportation (including sidewalks, bicycle infrastructure, pedestrian and bicycle signals, traffic calming techniques, lighting and other safety-related infrastructure, and transportation related projects to achieve compliance with the Americans with Disabilities Act of 1990)
  • Construction, planning and design of infrastructure-related projects and systems that provide safe routes for non-drivers (including children, older adults, and individuals with disabilities) to access daily needs
  • Conversion and use of abandoned railroad corridors for trails for pedestrians, bicyclists, or other non-motorized transportation users
  • Construction of turnouts, overlooks, and viewing areas
  • Community improvement activities, including
    • inventory, control, or removal of outdoor advertising
    • historic preservation and rehabilitation of historic transportation facilities;
    • vegetation management practices in transportation rights-of-way to improve roadway safety, prevent against invasive species, and provide erosion control
    • archaeological activities relating to impacts from implementation of a transportation project eligible under title 23
    • Any environmental mitigation activity, including pollution prevention and pollution abatement activities and mitigation to
    • address storm water management, control, and water pollution prevention or abatement related to highway construction or due to highway runoff, including activities described in sections 133(b)(11), 328(a), and 329 of title 23
    • reduce vehicle-caused wildlife mortality or to restore and maintain connectivity among terrestrial or aquatic habitats
  • The recreational trails program under section 206 of title 23
  • The safe routes to school program under section 1404 of the SAFETEA-LU
    • Infrastructure-related projects-planning, design, and construction of infrastructure-related projects on any public road or any bicycle or pedestrian pathway or trail in the vicinity of schools that will substantially improve the ability of students to walk and bicycle to school, including sidewalk improvements, traffic calming and speed reduction improvements, pedestrian and bicycle crossing improvements, on-street bicycle facilities, off-street bicycle and pedestrian facilities, secure bicycle parking facilities, and traffic diversion improvements in the vicinity of schools
    • Noninfrastructure-related activities to encourage walking and bicycling to school, including public awareness campaigns and outreach to press and community leaders, traffic education and enforcement in the vicinity of schools, student sessions on bicycle and pedestrian safety, health, and environment, and funding for training, volunteers, and managers of safe routes to school programs
    • Safe Routes to School coordinator
  • Planning, designing, or constructing boulevards and other roadways largely in the right-of-way of former Interstate System routes or other divided highways

As with other projects, the proponent for the TAP project would be responsible for project design and for completing the right-of-way acquisition and clearance process.

Ineligible activities

In accordance with MAP-21, the Transportation Alternatives Program does not include eligibility for certain activities that were previously eligible as transportation enhancements:

  • Safety and educational activities for pedestrians and bicycles. Exception: Activities targeting children in Kindergarten through 8th grade are eligible under SRTS (an eligible activity under the TAP funding). Note: Some of these activities may be eligible under HSIP. Non-construction projects for bicycle safety remain broadly eligible for STP funds.
  • Acquisition of scenic easements and scenic or historic sites.
  • Scenic or historic highway programs (including visitor and welcome centers). Note: A few specific activities under this category (construction of turnouts, overlooks, and viewing areas) remain eligible.
  • Historic preservation as an independent activity unrelated to historic transportation facilities. Note: Historic preservation and rehabilitation of historic transportation facilities are permitted as one type of community improvement activity.
  • Operation of historic transportation facilities.
  • Archaeological planning and research undertaken for proactive planning. This category now must be used only as mitigation for highway projects.
  • Transportation museums.

There is no requirement for TAP projects to be located along Federal-aid highways. Safe Routes to Schools (SRTS) projects must be within two miles of a school for kindergarten through eighth grade as specified in SAFETEA-LU Section 1404.

Earmarks

Certain funding categories are project-specific, i.e. funds are ‘earmarked’ only for use in the development of that project. These earmarks are included in federal transportation bills by a state’s congressional delegation, often at 100 percent federal reimbursement. These include, among others, Sections 115, 117, 129 and 125 categories. MAP-21 included no project-specific funding earmarks.

Federal Transit Administration

The federal government, through the Federal Transit Administration (FTA), provides financial assistance to develop new transit systems and improve, maintain, and operate existing systems. FTA oversees thousands of grants to hundreds of state and local transit providers through the FTA regional offices. The grantees are responsible for managing their programs in accordance with federal requirements and FTA is responsible for ensuring that these grantees follow the mandates along with statutory and administrative requirements. The various federally-funded transit categories are:

Section 5307 – Urbanized Area Formula Grant Program

This program funds routine capital investments, including bus purchases, but for some smaller systems, a portion can be used to defray transit system operating expenses. Transit funds are allocated annually by the FTA to individual urbanized areas, as defined by the 2010 census, according to a formula based on population size. A portion of the program is for areas under 200,000 in population and a portion goes directly to areas over 200,000.

Section 5310 – Elderly Persons and Persons with Disabilities Formula Program

This program is intended to enhance mobility for seniors and persons with disabilities by providing funds for programs to serve the special needs of transit-dependent populations beyond traditional public transportation services and Americans with Disabilities Act (ADA) complementary paratransit services. All funds are provided to the Commonwealth and are allocated by MassDOT through an annual competitive application process.

Section 5311 – Rural Area Formula Program

This program funds public transportation in rural areas (areas with populations less than 50,000) for operating and capital grants for intercity facilities, services and equipment. The Rural Technical Assistance Program (RTAP) provides funding for administration, operations, planning, training, technical assistance, research and support services. These funds are provided to the Commonwealth and distributed by MassDOT to Regional Transit Authorities and to private, for-profit intercity bus operators.

Section 5337 – State of Good Repair

The new formula-based State of Good Repair program is FTA’s first stand-alone initiative written into law that is dedicated to repairing and upgrading the nation’s rail transit systems along with high-intensity motor bus systems that use high-occupancy vehicle lanes, including bus rapid transit (BRT). These funds reflect a commitment to ensuring that public transit operates safely, efficiently, reliably, and sustainably so that communities can offer balanced transportation choices that help to improve mobility, reduce congestion, and encourage economic development. These funds are allocated directly to transit authorities on a formula basis.

Section 5339 – Bus and Bus Facilities

This program seeks to provide capital funding to replace, rehabilitate, and purchase buses and related equipment and to construct bus-related facilities. These funds allocated both directly to transit agencies and MassDOT, which distributes the funds through an annual competitive application process.

Available State Funding Considerations

Transportation Bond Bill Funding

On approximately a biannual basis, the Massachusetts Legislature passes a transportation bond bill. This legislation provides the Administration with authorization for the issuance of bonds to support transportation capital expenditures. These expenditures include non-federal matching funds for federally-funded TIP and STIP projects; Chapter 90 reimbursement funds for local transportation projects; and bond authorizations for specific projects identified through the legislative process. The Administration issues bonds at its discretion, subject to legislative authorization in the transportation bond bill and subject to overall “bond cap” limits on the Commonwealth’s debt obligations.



Accelerated Bridge Program

The Accelerated Bridge Program was established by the Massachusetts Legislature in 2008 for the purpose of greatly reducing the number of structurally deficient bridges in the state system. This $3 billion, eight year program, is a concerted effort to replace or repair well over 200 structurally deficient bridges.

To fix these bridges, the following work will take place as part of the accelerated bridge program:

  • Bridge Rehabilitation Projects
  • Bridge Replacement Projects
  • Bridge Preservation and Maintenance projects designed to prevent bridge from becoming structurally deficient and requiring no engineering.
  • Bridge painting and cleaning project

MassDOT and the Department of Conservation and Recreation (DCR) had identified the Structurally Deficient bridges in Massachusetts and prioritized the bridges using the inspection database and considering various bridge issues such as high traffic count, scour critical (damage caused by moving water), non redundancy and District input and priorities. This listing identified over 500 bridge projects for the Program. After the passage of the Accelerated Bridge Program, the 2008 Transportation Reform Law that established MassDOT also transferred all of the bridges that had been owned by DCR to MassDOT jurisdiction.

Chapter 90

The Chapter 90 program entitles municipalities to reimbursement for capital improvement projects for highway construction, preservation, and improvement that create or extend the life of capital facilities. The funds can be used for maintaining, repairing, improving, or constructing town and county ways and bridges that qualify under the State Aid Highway Guidelines issued by the Public Works Commission. Items eligible for Chapter 90 funding include roadways, sidewalks, right-of-way acquisition, shoulders, landscaping and tree planting, roadside drainage, street lighting, and traffic control devices. A municipality seeking Chapter 90 reimbursement for a project must complete a Chapter 90 Project Request Form and an Environmental Punch List for each proposed project and submit it to the appropriate MassDOT District Office. Each municipality in Massachusetts is granted an annual allocation of Chapter 90 reimbursement funding that it is eligible for, and the municipality can choose among any eligible infrastructure investments. Therefore, the Chapter 90 program provides municipalities with a high level of local control over infrastructure spending.

MassWorks Infrastructure Program

The MassWorks Infrastructure Program provides a one-stop shop for municipalities and other eligible public entities seeking public infrastructure funding to support economic development and job creation and retention, housing development at density of at least 4 units to the acre (both market and affordable units) and transportation improvements to enhancing safety in small, rural communities. The MassWorks Infrastructure Program is administered by the Executive Office of Housing and Economic Development, in cooperation with the Department of Transportation and Executive Office for Administration & Finance.

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