Federal-Aid Highway Program (FAHP): In Brief

January 14, 2016 – March 1, 2021 R44332

Federal-Aid Highway Program (FAHP):
In Brief
Updated March 1, 2021
Congressional Research Service
https://crsreports.congress.gov
R44332

Federal-Aid Highway Program (FAHP): In Brief

Congressional Research Service

Federal-Aid Highway Program (FAHP): In Brief

Federal-Aid Highway Program (FAHP)
The federal government has provided some form of highway funding to the states for more than
100 years. The major characteristics of the federal highway program have been constant since the
early 1920s. First, most funds are apportioned to the states by formula and implementation is left
primarily to state departments of transportation (state DOTs). Second, the states are required to
provide matching funds. Until the 1950s, each federal dollar had to be matched by an identical
amount of state and local money. The federal share is now 80% for non-Interstate System road
projects and 90% for Interstate System projects. Third, generally, federal money can be spent only
on designated federal-aid highways, which make up roughly a quarter of U.S. public roads.
How the Program Works
The Federal-Aid Highway Program (FAHP) is an umbrella term for the separate highway
programs administered by the Federal Highway Administration (FHWA). These programs are
almost entirely focused on highway construction, and generally do not support operations (such
as state DOT salaries or fuel costs) or routine maintenance (such as mowing roadway fringes or
filling potholes). Each state is required to have a State Transportation Improvement Plan, which
sets priorities for the state’s use of FAHP funds. State DOTs largely determine which projects are
funded, let the contracts, and oversee project development and construction. More recently,
metropolitan planning organizations (MPOs) have played a growing role in project
decisionmaking in urban areas, but federal project funding continues to flow through state DOTs.
The 2015 surface transportation reauthorization act, the Fixing America’s Surface Transportation
Act (FAST Act; P.L. 114-94), authorized funding for FY2016-FY2020. A one-year FAST Act
extension, through September 30, 2021, was enacted as part of the Continuing Appropriations
Act, 2021, and other Extensions Act (P.L. 116-159). Under the FAST Act as extended, about
92.5% of FAHP funding is distributed through five core programs.1 All five are formula
programs, meaning that each state’s annual share is divided up into the programs based on
mathematical calculations set out in the law. The remaining programs, generally referred to as
discretionary programs, are administered more directly by FHWA, but the funding distribution of
some of these programs is formulaic as well. The FAHP does not provide money in advance.
Rather, a state receives bills from private contractors for work completed and pays those bills
according to its own procedures. The state submits vouchers for reimbursement to FHWA. FHWA
certifies the claims for payment and notifies the Department of the Treasury, which disburses
money electronically to the state’s bank, often on the same day the state submits the voucher.2
The FAHP, unlike most other federal programs, does not rely on appropriated budget authority.
Instead, FHWA exercises contract authority over monies in the Highway Trust Fund (HTF) and
may obligate (promise to pay) funds for projects funded with contract authority prior to an
appropriation. Once funds have been obligated, the federal government has a legal commitment
to provide the funds. This approach shelters highway construction projects from annual decisions
about appropriations.

1 Federal Highway Administration, Fixing America’s Surface Transportation Act or “FAST Act,” December 2015, at,
http://www.fhwa.dot.gov/fastact/.
2 Federal Highway Administration, Funding Federal-Aid Highways, FHWA-PL-17-011, January 2017, pp. 37-39, at,
https://www.fhwa.dot.gov/policy/olsp/fundingfederalaid/FFAH_2017.pdf.
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Federal-Aid Highway Program (FAHP): In Brief

Highway Program Terminology
A distinctive terminology is used to describe highway program financing:3
Distribution of funds is FHWA notification to the states of the availability of federal funds. Once a distribution is
announced, the funds usually remain available to the states to obligate for four years. The states do not receive
the funds prior to undertaking work.
Apportionment is the distribution of funds among the states as prescribed by a statutory formula.
Allocation is an administrative distribution of funds (often for specific projects) under programs that do not have
statutory distribution formulas.
Reimbursement occurs once a project is approved, the work is started, costs are incurred, and the state
submits a voucher to FHWA. The reimbursable structure is designed to curb waste, fraud, and abuse.
Contract authority is a type of budget authority that is available for obligation even without an appropriation
(although appropriators must eventually provide liquidating authority to pay the obligations).
Obligation of contract authority for a project by FHWA legally commits the federal government to reimburse
the state for the federal share of a project. This can be done prior to an appropriation.
Limitation on obligations, known as ObLim or Oblimit, is used to control annual FHWA spending in place of
an appropriation. The ObLim sets a limit on the total amount of contract authority that can be obligated in a single
fiscal year. For practical purposes, the ObLim is analogous to an appropriation.4
The Highway Trust Fund
The Highway Trust Fund is financed from a number of sources, including taxes on fuels, heavy
truck tires, truck and trailer sales, and a weight-based heavy-vehicle use tax.5 However,
approximately 85%-90% of trust fund revenue comes from excise taxes on motor fuels, 18.3
cents per gallon on gasoline and 24.3 cents per gallon on diesel. The HTF consists of two separate
accounts—highway and mass transit. The highway account receives an allocation equivalent to
15.44 cents of the gasoline tax and the mass transit account receives the revenue generated by
2.86 cents of the tax.6 Because the fuel taxes are set in terms of cents per gallon rather than as a
percentage of the sale price, their revenues do not increase with inflation. The fuel tax rates were
last raised in 1993.
Sluggish growth in vehicle travel and improved vehicle efficiency have depressed the growth of
fuel consumption and therefore the growth of fuel tax revenue.7 Since FY2008, the revenues
flowing into the highway account of the HTF have been insufficient to fund the expenditures
authorized under the Federal-Aid Highway Program.8 Congress has resolved this discrepancy by
transferring money from the general fund to the HTF.

3 For a more detailed discussion see ibid. pp. 1-2, 5-14, and 23-29.
4 Ibid. pp. 31-34. To be highway contract authority the authorization must refer to Title 23, Chapter 1 of the U.S. Code,
and it must be funded out of the Highway Trust Fund.
5 Federal Highway Administration, Highway Statistics, 2018: Federal Highway-User Fees, Table FE-21B,
Washington, DC, February 2020, at https://www.fhwa.dot.gov/policyinformation/statistics/2018/fe21b.cfm.
6 Nonfuels taxes accrue only to the highway account. A separate 0.1-cents-per-gallon tax on all fuels goes into the
leaking underground storage tank (LUST) trust fund, which is administered by the Environmental Protection Agency
and the states.
7 Federal Highway Administration, FHWA Forecasts of Vehicle Miles Traveled (VMT): Spring 2019, Washington, DC,
May 2019, at https://www.fhwa.dot.gov/policyinformation/tables/vmt/vmt_forecast_sum.pdf. See also Traffic Volume
Trends, at https://www.fhwa.dot.gov/policyinformation/travel_monitoring/tvt.cfm.
8 The imbalance between revenues and outlays first emerged in FY2002, but the unexpended balances in the HTF were
sufficient to cover the imbalance until FY2008.
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Federal-Aid Highway Program (FAHP): In Brief

The COVID-19 pandemic also has had an impact on road-based travel. FHWA’s December 2020
Traffic Volume Trends found that the 12-month cumulative travel for 2020 had changed -13.2%.9
This has led to a dip in revenues flowing to the HTF in FY2020 and FY2021 (see Figure 1).
The FAST Act provided for $70 billion in general fund transfers and a $300 million transfer from
the Leaking Underground Storage Tank Trust Fund (LUST) fund.10 The FAST Act extension
transferred an additional $13.6 billion from the general fund.
Figure 1. Projected HTF Revenues and Outlays

Source: Congressional Budget Office, Projections of Highway Trust Fund Accounts: February 2021
Baseline.
A gap between dedicated HTF revenues and outlays is expected to persist after the FAST Act, as
extended, expires at the end of FY2021 based on current tax rates and levels of spending adjusted
for inflation (Figure 1). The Congressional Budget Office (CBO) projects that beginning in
summer FY2022, revenues credited to the highway and transit accounts of the HTF will be
insufficient to meet the fund’s obligations, and that HTF receipts will fall $69.8 billion short of
the amount needed to fund surface transportation programs as presently configured from FY2022
through FY2026.11 Congress will face the need to approve some combination of new taxes, an
increase in existing fuel taxes, continued expenditures from the general fund, increased federally
supported debt financing, or reductions in the scope of the federal surface transportation program
if the FAST Act is replaced or again extended beyond late FY2022.12

9 Federal Highway Administration, Traffic Volume Trends, Washington, DC, December 2020, at
https://www.fhwa.dot.gov/policyinformation/travel_monitoring/20dectvt/20dectvt.pdf.
10 Since September 15, 2008, a total of $157.213 billion has been transferred to the HTF from Treasury general funds
and the LUST trust fund, including $125.072 billion to the highway account.
11 Congressional Budget Office, Projections of Highway Trust Fund Accounts Under CBO’s February 2021 Baseline,
at https://www.cbo.gov/system/files/2021-02/51300-2021-02-highwaytrustfund.pdf. The Highway Account shortfall
projection is $48.1 billion, and the Mass Transit Account $21.7 billion. Because requests for reimbursement from the
HTF may occur at any time and because Treasury transfers to the HTF occur only twice each month, DOT deems it
prudent to maintain a $4 billion minimum in the Highway Account and $1 billion in the Mass Transit Account to
prevent having to delay payments to states and transit agencies due to insufficient funds. This raises the total new
revenues or transfers needed for a five-year bill to roughly $75 billion. The amount of new revenues or transfers needed
for a six-year bill will be roughly $97 billion.
12 CRS Report R45350, Funding and Financing Highways and Public Transportation, by Robert S. Kirk and William
J. Mallett.
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Federal-Aid Highway Program (FAHP): In Brief

Funding Federal-Aid Highways
The FAST Act, as extended, provides an annual average of $45 billion annually for FY2016-
FY2021for highways, about 10% more (unadjusted for inflation) than the annual average under
the previous authorization bill, the two-year Moving Ahead for Progress in the 21st Century Act
(MAP-21; P.L. 112-141). (See Table 1 and Figure 2.) The FAST Act made limited programmatic
changes, but did increase emphasis on the movement of freight. This was reflected in a new
formula freight program, the National Highway Freight Program, and a new competitive
discretionary grant program, the Nationally Significant Freight and Highway Projects Program.
Under the FAST Act, 92.5% of the Federal-Aid Highway Program funding is apportioned by
formula (see Table 3). The act included no new congressional earmarks.
Figure 2. Federal-Aid Highway Funding: FY2013-FY2021

Source: Federal Highway Administration.
Notes: Totals are unadjusted for inflation. FY2020 authorization column reflects the restoration of the
$7.569 bil ion rescission that had been scheduled for July 1, 2020, under Section 1438 of the FAST Act.
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Table 1. Highway Authorizations: FAST Act, as Extended
(contract authority from the highway account of the HTF, except as noted, in millions of dollars)
Program
FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
Total
Title I: Federal-Aid Highways
39,728
40,548
41,424
42,359
43,373
43,373
250,805
(FAHP formula)
Nationally Significant Freight and 800
850
900
950
1,000
1,000
5,500
Highway Projects (NSFH)
Transportation Infrastructure
275
275
285
300
300
300
1,735
Finance and Innovation Program
(TIFIA)
Tribal Transportation Program
465
475
485
495
505
505
2,930
Federal Lands Transportation
335
345
355
365
375
375
2,150
Program
Federal Lands Access Program
250
255
260
265
270
270
1,570
Territorial and Puerto Rico
200
200
200
200
200
200
1,200
Highway Program
FHWA Administrative Expenses
453
460
467
474
481
481
2,815
Emergency Relief
100
100
100
100
100
100
600
Construction of Ferry Boats
80
80
80
80
80
80
480
Appalachian Regional
110
110
110
110
110
110
660
Development Program [Gen.
Fund]
Regional Infrastructure
12
0
0
0
0
0
12
Accelerator Demonstration
Program [Gen. Fund]
Nationally Significant Federal
100
100
100
100
100
100
600
Lands and Tribal Projects [Gen.
Fund]
Total Authorizations: Title I
42,908
43,798
44,766
45,798
46,894
46,894
271,057
Title IV: Transportation
415
418
418
420
420
420
2,510
Research
Total Contract Authority
43,100
44,005
44,973
46,008
47,104
47,104
272,294
(HTF)
Total Obligations
43,100
44,005
44,973
46,008
47,104
47,104 272,294
Total General Fund
222
210
210
210
210
210
1,272
Authorizations
Total Authorizations
43,322
44,215
45,183
46,218
47,314
47,314
273,566
Source: Federal Highway Administration, FAST Act: Funding Tables, Washington, DC, 2015,
http://www.fhwa.dot.gov/fastact/estfy20162020auth.pdf. For FY2021, the Continuing Appropriations Act, 2021,
and other Extensions Act (P.L. 116-159). For breakout of formula programs, see Table 3.
Notes: Total Obligations are the annual obligation limitations plus exempt obligations. Totals do not include
funding for the safety operations of the National Highway Traffic Safety Administration or the Federal Motor
Carrier Safety Administration. The obligation limitation plus exempt obligation amounts are equal to the total
contract authority under the FAST Act as extended.
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Inflation Impacts
Table 2 displays the current-dollar obligations from FY2013 through FY2019, with adjustments
for inflation based on a price index for the costs of highway and street projects.
Table 2. Trends in FAHP Obligations, FY2012-FY2019
(current and inflation-adjusted dollars in millions)

FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019
Total (Current $)
$39,883
$40,438
$40,995
$40,995
$43,100
$44,005
$44,973
$46,008
% Change from
—
+1.4%
+1.4%
0.0%
+5.1%
+2.1%
+2.2%
+2.3
Previous Year
Total (Inflation-
$39,883
$39,659
$39,590
$39,467
$41,397
$41,256
$40,368
$40,176
Adjusted, 2012 $)
% Change from
—
-0.6%
-0.2%
-0.3%
+4.9%
-0.3
-2.0
-0.04
Previous Year
Sources: FHWA. Cost adjustments calculated by CRS using Bureau of Economic Analysis, Price Indexes for Gross
Government Fixed Investment by Type, National Income and Product Accounts Table 5.9.4B, Line 40: State and
local highways and streets. Weighted average used to approximate FY2013 through FY2019.
Note: 2020 index not available.
Formulas and Apportionments
The apportioned programs include five “core” programs plus the Metropolitan Planning Program.
The core programs are the National Highway Performance Program (NHPP), the Surface
Transportation Block Grant Program (STBG), the Highway Safety Improvement Program
(HSIP), the Congestion Mitigation and Air Quality Improvement Program (CMAQ), and the
National Highway Freight Program (NHFP). The FAST Act does not use separate formulas to
determine each state’s apportionments under each core program. Instead, the act provides for a
single gross apportionment to each of the states, which is then divided up among the programs. A
summary of the process follows.13
Calculation of State Amounts
Each year, the process begins by calculating the apportionment total for each state. For the
amounts available for apportionment in each year, see Table 3.
Prior to making the calculation of state apportionments, FHWA is in FY2021 to reserve for NHPP
$67 million and for STBG $1.020 billion. Each state’s share of the reserve funds is determined by
multiplying the reserved totals for the year by the ratio that each state’s FY2015 apportionments
bear to the nationwide total for FY2015. This increases the support for these programs relative to
total funds available without changing the percentages mentioned below.14 The total amount
available for apportionment after reserving these funds is the “base apportionment amount.”

13 CRS Report R45727, The Highway Funding Formula: History and Current Status, by Robert S. Kirk.
14 Pursuant to 23 U.S.C. §133(h), $850 million annually of the STBG reserve funds for FY2018-FY2021 is set aside for
transportation alternatives.
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The base apportionment amount for each state is then determined by multiplying the nationwide
base apportionment amount by the ratio that each state’s FY2015 apportionments bear to the
nationwide total for FY2015.15
Next, the initial amounts are adjusted, if necessary, to assure that if any state’s total base
apportionment plus reserve funds is less than 95 cents for every dollar the state contributed to the
highway account of the HTF (based on the most recent year for which data are available), the
state’s share is raised to that level. The money to raise these states’ shares comes from a pro rata
reduction of funds of states whose apportionments are in excess of a 95% return on contributions.
After the state amounts are determined, each state’s amount is divided up among the core
programs according to statute. Table 3 shows the dollar amounts of the programmatic split.16
Table 3. Apportioned Programs (Contract Authority)
(millions of dollars, FAST Act as extended through FY2021)
Program
FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
Total
National Highway Performance
22,332
22,828
23,262
23,741
24,236
24,239
140,638
Program (NHPP)
Surface Transportation Block
11,163
11,424
11,668
11,876
12,137
12,139
70,407
Grant Program (STBG)
Highway Safety Improvement
2,226
2,275
2,318
2,360
2,407
2,408
13,993
Program (HSIP)
Safety-related programs
3.5
3.5
3.5
3.5
3.5
3.5
21.0
(HSIP set-aside)
Railway-highway crossings
225
230
235
240
245
245
1,420
(HSIP set-aside)
National Highway Freight
1,140
1,091
1,190
1,339
1,487
1,487
7,734
Program (NHFP)
Congestion Mitigation & Air
2,309
2,360
2,405
2,449
2,499
2,494
14,517
Quality Improvement Program
(CMAQ)
Metropolitan Transportation
329
336
343
350
359
358
2,076
Planning
Total
39,728
40,548
41,424
42,359
43,373
43,374 250,806
Source: Federal Highway Administration. STBG amounts include the Transportation Alternatives annual set-
aside. Totals may not add due to rounding. NHFP figures represent net amounts after a portion is applied to the
Metropolitan Planning Program under §1104(b)(6). Totals represent gross authorizations. For FY2021 state-by-
state apportionments are at, https://www.fhwa.dot.gov/legsregs/directives/notices/n4510847/n4510847_t1.cfm.

15 FAST Act §1104(c). Wording in Section 1401(c) breaks the authorization calculation into three parts: the “base
apportionments” and the NHPP and STBG reserved funds. These components are equal to the total apportionment
authorizations under Section 1104(a)(1). The apportionment calculation for FY2021 is available at
https://www.fhwa.dot.gov/legsregs/directives/notices/n4510847/.
16 Federal Highway Administration, Fixing America’s Surface Transportation Act or FAST Act, funding tables,
http://www.fhwa.dot.gov/fastact/funding.cfm. This site includes tables that set forth the authorizations as well as the
estimated apportionments on a state-by-state basis over the life of the FAST Act.
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Federal-Aid Highway Program (FAHP): In Brief

Additional Appropriated Amounts for Highways
Appropriations legislation for FY2019-FY2021 has provided additional funding for highways.
The Consolidated Appropriations Act, 2018 (P.L. 115-141), provided additional funding from the
general fund, including $2.525 billion for FHWA programs. The Consolidated Appropriations
Act, 2019 (P.L. 116-6), provided an additional $3.250 billion for highways. The Further
Consolidated Appropriations Act, 2020 (P.L. 116-94), provided an additional $2.166 billion for
highways. The Further Continuing Appropriations, 2021, and Other Extensions Act (P.L. 116-
215) provided an additional $2 billion. 17
COVID-19 Relief for Highways
The Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA; P.L. 116-260,
Division M) provided $10 billion for “Highway Infrastructure Programs.” These funds may be
used for any purpose under the Surface Transportation Block Grant Program (23 U.S.C. §133(b))
or for costs related to preventive maintenance, routine maintenance, operations, and personnel,
including salaries of employees or contractors, debt service payments, availability payments and
coverage for other revenue losses. Transfers are also allowed to tolling agencies.18
Core Highway Formula Programs
National Highway Performance Program (NHPP; FAST Act §1106)
NHPP is the largest of the federal-aid highway programs, with annual authorizations averaging
over $23 billion. The program supports improvement of the condition and performance of the
National Highway System (NHS), which includes Interstate System highways and bridges as well
as virtually all other major highways. NHPP funds projects to achieve national performance goals
for improving infrastructure condition, safety, mobility, and freight movement, consistent with
state and metropolitan planning; construction, reconstruction, or operational improvement of
highway segments; construction, replacement, rehabilitation, and preservation of bridges, tunnels,
and ferryboats and ferry facilities; inspection costs and the training of inspection personnel for
bridges and tunnels; bicycle and pedestrian infrastructure; intelligent transportation systems; and
environmental restoration, as well as natural habitat and wetlands mitigation within NHS
corridors. If Interstate System and NHS bridge conditions in a state fall below the minimum
conditions established by the Secretary of Transportation, certain amounts would be transferred
from other specified programs in the state. NHPP funds may be used for Appalachian
Development Highway System projects with no state match. States also may use NHPP funds on
bridges not on the NHS as long as the bridge is on the federal-aid highway system.

17 For the FY2021 state-by-state apportionments, see Federal Highway Administration, Apportionment of Highway
Infrastructure Program Funds Pursuant to the Department of Transportation Appropriations Act, 2021, Notice: N
4510.852, Washington, DC, January 15, 2021, at https://www.fhwa.dot.gov/legsregs/directives/notices/n4510852/.
18 Federal Highway Administration, Apportionment of Highway Infrastructure Program Funds Pursuant to the
Coronavirus Response and Relief Supplemental Appropriations Act, 2021, Notice: N4510.851, Washington, DC,
January 15, 2021, at https://www.fhwa.dot.gov/legsregs/directives/notices/n4510851/.
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Surface Transportation Block Grant Program (STBG; FAST Act
§1109)
STBG is the federal-aid highway program with the broadest eligibility criteria. Funds can be used
on any federal-aid highway, on bridge projects on any public road, on transit capital projects, on
routes for nonmotorized transportation, and on bridge and tunnel inspection and inspector
training. The FAST Act, as extended, authorizes an annual average of almost $11.7 billion for
STBG. The Transportation Alternatives Program, which funded such projects as bicycle paths and
walkways, is effectively absorbed into the STBG program. The FAST Act provides that $850
million per year from the STBG apportionment be set aside for transportation alternative-like
uses. States and MPOs obligating these funds are to develop a competitive process for local
public entities to submit projects for funding. A portion of the set-aside is directed toward the
recreational trails program, from which states may apply to opt out.
STBG funds may be used for Appalachian Development Highway System projects with no state
match. Virtually any federally eligible mass transit use may receive STBG funds. Carpool
projects and electronic toll collection and congestion management projects are eligible. Repairs to
off-system bridges and bridge replacement at the same location are also generally eligible.
Congress required that a portion of a state’s STBG funding be allocated by the state’s DOT based
on a population formula. The percentage allocated to areas in the state by population is 55%. The
remainder may be spent anywhere in the state. STP funds equal to 15% of the state’s highway
bridge apportionment for FY2009 are to be set aside for off-system bridges. Some STBG funds
reserved for rural areas may be used on off-system rural minor collector roads.
Highway Safety Improvement Program (HSIP; FAST Act §1113)
HSIP supports projects that improve the safety of road infrastructure by correcting hazardous road
locations, such as dangerous intersections, or making road improvements, such as adding striping.
HSIP funds may also be used for road safety projects not on federal-aid highways. Under the
FAST Act as extended, HSIP averages $2.6 billion annually. The Rail-Highway Grade Crossing
Program continues as an HSIP set-aside averaging $237 million per year. The FAST Act
broadened the eligibility to make vehicle-to-vehicle technology and other infrastructure projects
eligible. A smaller set-aside of $3.5 million annually is provided for discretionary safety grants.19
Congestion Mitigation and Air Quality Improvement Program
(CMAQ; FAST Act §1114)
CMAQ was established to fund projects and programs that may reduce emissions of
transportation-related pollutants. Since FY2011, well over $1 billion of the annual CMAQ
funding has been transferred to the Federal Transit Administration.20 Under the FAST Act as
extended, CMAQ’s average annual authorization is $2.4 billion. The act expands eligibility to
include port-related freight operations, or projects to reduce emissions from port-related road or
nonroad equipment within a nonattainment or maintenance area. The installation of vehicle-to-
infrastructure communication equipment has also been made CMAQ-eligible.

19 CRS Report R43026, Federal Traffic Safety Programs: In Brief, by David Randall Peterman.
20 American Public Transportation Association, APTA Primer on Transit Funding, FY2016-FY2020, Final Edition,
Washington, DC, April 2016, p. 85, https://www.apta.com/resources/reportsandpublications/Documents/APTA-Primer-
FAST-Act.pdf.
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Federal-Aid Highway Program (FAHP): In Brief

National Highway Freight Program (NHFP; FAST Act §1116)
Annual apportionments for NHFP average $1.3 billion through FY2021. This new program is to
help states and MPOs remove impediments to the movement of goods. Section 1116 requires
FHWA to establish the National Highway Freight Network (HFN), made up of the primary
highway freight system, critical rural freight corridors, critical urban freight corridors, and any
Interstate System highways not so designated. Large states (with over 2% of the total mileage on
the NHFN) are required to spend their apportionment on the primary, rural, or urban freight
system roads. States with less than 2% of total NHFN miles can spend their funds on any of their
NHFN miles. Up to 10% of NHFP funds can be spent on intermodal or freight rail projects.
Transferability Among the Core Programs
States may transfer up to 50% of any apportionment to any other apportioned program. However,
no transfers are permitted of funds suballocated to areas by population (such as STBG) or of
Metropolitan Planning funds. The broad areas of eligibility overlap among the core programs
under the FAST Act make it easier for states to operate within the 50% restriction.
Other Highway Programs
Nationally Significant Freight and Highway Projects (NSFHP;
FAST Act §1105)
The NSFHP, also referred to as Infrastructure for Rebuilding America (INFRA), provides an
average of $917 million per year in discretionary grants for projects of regional or national
importance. States, groups of states, municipal governments, special purpose districts or
transportation authorities, Indian tribes, federal land agencies, and other public entities may apply.
Applicants apply directly to the Secretary of Transportation, circumventing the state DOTs.21
Applications must meet eligibility requirements that emphasize improving freight movement and
must involve work on the National Highway Freight Network, highway or bridge projects on the
National Highway System, intermodal projects, or railway-highway grade crossing or separation
projects. Grants for projects of $100 million or more are to be the primary focus (with a $500
million upper limitation over the life of the program for freight intermodal or freight rail
projects). However, 10% of funds are to be reserved for small projects. Also, 25% of available
funds are to be reserved for projects in rural areas. The federal project share is not to exceed 60%.
Emergency Relief Program (ER; FAST Act §1107)
ER funds are made available following natural disasters or catastrophic failures (from an external
cause) for emergency repairs, restoration of federal-aid highway facilities to predisaster
conditions, and debris removal from roads on tribal and federal lands. The program is funded by
an annual HTF authorization of $100 million and general fund appropriations authorized on a
“such sums as necessary” basis. ER funds can only be used on federal-aid highways.22

21 The NSFHP is administered by the National Surface Transportation and Innovation Finance Bureau, not by FHWA.
22 CRS Report R45298, Emergency Relief for Disaster-Damaged Roads and Public Transportation Systems, by Robert
S. Kirk and William J. Mallett.
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Federal-Aid Highway Program (FAHP): In Brief

Territorial and Puerto Rico Highway Program (FAST Act §1115)
The Puerto Rico and Territorial Highway programs are funded at $158 million and $42 million
annually, respectively, through FY2021.
Appalachian Development Highway System Program (ADHS;
FAST Act §1435)
The ADHS is made up of designated corridors in 13 participating Appalachian states. The ADHS
program is a road-building program intended to break Appalachia’s isolation and encourage
development. Construction has been ongoing since the mid-1960s. The ADHS is not a free-
standing federal-aid program, but ADHS projects are incorporated into the eligibilities of NHPP
and STBG. The federal share for ADHS projects is up to 100%, as determined by the states.23
Construction of Ferry Boats and Ferry Facilities (FAST Act §1112)
The Ferry Boats and Ferry Terminal Facilities Program is a formula program that includes no set-
asides for specific states. The FAST Act provides $80 million annually, available until expended,
for the construction of ferryboats and terminal facilities. The funding is to be apportioned
according to a formula weighted by passengers (40%), vehicles (35%), and total route miles
(30%). Ferryboats and facilities are also eligible for formula funds under the NHPP.
Federal Lands and Tribal Transportation Programs (FAST Act
§§1117-1121)
The program has three main components:
 The Tribal Transportation Program distributes funds among tribes mainly under a
statutory formula based on road mileage, tribal population, and relative need. The
FAST Act, as extended, provides an average annual authorization of $488
million. The FAST Act established a Tribal Transportation Self-Governance
Program to allow the Secretary to delegate the administration of the program to
tribes that meet certain financial and managerial criteria.
 The Federal Lands Transportation Program is funded at an average annual
authorization of $358 million through FY2021. Of this amount, an average of
$287 million is provided for the National Park Service, $30 million annually for
the Fish and Wildlife Service, and $17 million on average annually for the Forest
Service for transportation activities. The remaining funding is allocated among
other federal land management agencies, the Forest Service, the Corps of
Engineers, the Bureau of Land Management, the Bureau of Reclamation, and
agencies with natural resource and land management responsibilities.
 The Federal Lands Access Program (FLAP) supports projects that are on,
adjacent to, or provide access to federal lands. Funding is allocated among the
states by a formula based on the amount of federal land, the number of
recreational visitors, federal road mileage, and the number of federally owned
bridges. FLAP is funded at an average annual authorization of $262 million.

23 Federal Highway Administration, Guide to Federal-Aid Programs: Appalachian Development Highway Program,
Washington, DC, updated April 14, 2016, https://www.fhwa.dot.gov/federalaid/projects.pdf#page=14.
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Federal-Aid Highway Program (FAHP): In Brief

In addition, the FAST Act established the Nationally Significant Federal Lands and Tribal
Projects Program (NSFLTP) under Section 1123 to support large projects on federal and tribal
lands. Projects must have an estimated cost of at least $25 million, with priority given to projects
costing over $50 million. NSFLTP is authorized at $100 million annually, but requires an
appropriation to make funds available. The NSFLTP has received appropriations of $300 million
for FY2018, $25 million for FY2019, $70 million for FY2020, and $100 million for FY2021.
Transportation Infrastructure Finance and Innovation Act Program
(TIFIA; FAST Act §2001)
The TIFIA program provides secured loans, loan guarantees, and lines of credit for major surface
transportation projects.24 Loans must be repaid with a dedicated revenue stream, typically a
project-related user fee, such as a toll. TIFIA is funded at $300 million for FY2021. Assuming an
average subsidy cost of 7%, this funding may allow lending of roughly $4.3 billion in the year.25
States may use their NHPP and STBG funds to pay the administrative and subsidy costs of the
program. Discretionary INFRA grants can also be used to pay these costs.
The minimum amount of TIFIA assistance for a single project is $50 million, except for
intelligent transportation system projects ($15 million), rural projects ($10 million), transit-
oriented development ($10 million), and local government projects ($10 million).26 Up to 10% of
program funds are set aside to assist rural projects. Whereas loans for urban projects must be
charged interest not less than the Treasury rate, rural projects are offered loans at half the
Treasury rate. Rural projects are defined to include any project in an area outside of an urbanized
area with a population greater than 150,000 individuals. TIFIA funds may be used to capitalize
state infrastructure banks and to build infrastructure in support of transit-oriented development.
Tolling
Tolling of non-Interstate federal-aid highways has been allowed since 1992.27 Totally new
Interstate Highway routes or extensions of existing routes may be built as toll roads. Toll lanes
may be added to an existing Interstate route as long as the number of “free” lanes is maintained.
Public authorities may impose tolls on single occupant vehicles for access to high occupancy
vehicle (HOV) lanes. States may use congestion pricing on tolled road segments. Tolls are
important revenue streams for many public-private partnerships and alternative financing
mechanisms. FHWA does not regulate toll rates.

24 TIFIA is administered by the Build America Bureau within the U.S. Department of Transportation.
25 These subsidy estimates do not reflect reductions for administrative costs and the application of the obligation
limitation. The subsidy cost is “the estimated long-term cost to the government of a direct loan or a loan guarantee,
calculated on a net present value basis, excluding administrative costs,” Federal Credit Reform Act of 1990 (FCRA),
§502 (5A).
26 The law generally provides eligibility for projects whose total expected costs are $50 million or more or exceed
33.3% of the amount of federal highway assistance apportioned to a state in the most recent fiscal year to the state in
which the project is located.
27 CRS Report R44910, Tolling U.S. Highways and Bridges, by Robert S. Kirk.
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Federal-Aid Highway Program (FAHP): In Brief

Author Information

Robert S. Kirk

Specialist in Transportation Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
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Congressional Research Service
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