TITLE 43. TRANSPORTATION

PART 1. TEXAS DEPARTMENT OF TRANSPORTATION

CHAPTER 9. CONTRACT AND GRANT MANAGEMENT

The Texas Department of Transportation (department) adopts amendments to §§9.11, 9.13, 9.15, 9.17, and 9.18, concerning Highway Improvement Contracts and §9.227, Information from Bidders, concerning the Disadvantaged Business Enterprise (DBE) Program. The amendments to §§9.11, 9.13, 9.15, 9.17, 9.18, and 9.227 are adopted without changes to the proposed text as published in the October 14, 2016, issue of the Texas Register (41 TexReg 8172) and will not be republished.

EXPLANATION OF ADOPTED AMENDMENTS

These rules amend the department's rules relating to highway improvement contracts to improve compliance with federal regulations concerning the participation of disadvantaged business enterprises (DBE) in those types of contracts. Additionally, the amendments correct citations within the rules to other rule provisions.

Amendments to §9.11, Definitions, update section references in the definitions of disadvantaged business enterprise, historically underutilized business, and small business enterprise to the appropriate rules.

Amendments to §9.13, Notice of Letting and Issuance of Bid Forms, add subsection (e)(1)(B)(vii), which prohibits the department from issuing a bid form for a highway construction or maintenance contract to an individual or entity that is prohibited from submitting a bid on the project under §9.18(b).

Amendments to §9.15, Acceptance, Rejection, and Reading of Bids, update a rule citation and conform wording within the section to the terminology used in the cited section.

Amendments to §9.17, Award of Contract, add subsections (i) and (j), which set out the periods during which an apparent successful bidder is required to submit the DBE information required by §9.227 to be awarded the contract. This change is necessary to comply with the DBE bidding requirements of federal regulation, 49 C.F.R. §26.53.

Amendments to §9.18, After Contract Award, clarify that for a construction contract containing a DBE goal, failure to submit the DBE information required by §9.227 within the period described by §9.17(i), as added in this rulemaking, will result in forfeiture of the bid guaranty. This change is necessary to comply with the DBE bidding requirements of federal regulation, 49 C.F.R. §26.53. The amendments also change the heading of the section to "Contract Execution, Forfeiture of Bid Guaranty, and Bond Requirement" to more clearly describe the contents of the section.

Amendments to §9.227, Information from Bidders, reorganize, without substantive change, the section for additional clarity and conform the section to the changes made by this rulemaking to §§9.17 and 9.18.

COMMENTS

The department received one comment concerning §§9.11, 9.13, 9.15, 9.17, and 9.18, and §9.227. The comment was from the Associated General Contractors of Texas (AGC).

Comment: The AGC points out several issues that a next lowest bidder would face if that bidder were awarded a contract under the rules and requests a clarification that the next lowest bidder is not subject to forfeiture of that bidder's bid guaranty for failing to meet the one day deadline and that the next lowest bidder will be allowed to rebid the project when it is re-let.

Response: The department clarifies that the next lowest bidder is not subject to forfeiture of that bidder's bid guaranty for failing to meet the one day deadline and that failure to meet that deadline will not prohibit the next lowest bidder from rebidding the project if it is re-let. Modification of the rule, as proposed, is not required for such a result.

Under 43 TAC §9.16, which is not being amended in this rulemaking, the bid guaranty of each bidder other than the lowest bidder, is released before the end of the 72-hour period beginning when the bids are opened; checks and money orders are returned to the bidders. In those situations in which the commission chooses to award a contract to the next lowest bidder under the rules, the next lowest bidder's guaranty will have been released before the expiration of the 5-day period for the lowest bidder to submit the required DBE information. The rules do not authorize requiring the next lowest bidder to post a new guaranty as a condition of being awarded the contract after the lowest bidder is rejected for failure to submit the DBE information. Failure of the next lowest bidder to submit the required DBE information within one day of notification will not result in the forfeiture of a bid guaranty because the next lowest bidder will not have an outstanding bid guaranty at that time. In addition to the cost of forfeiting a guaranty, such a forfeiture results in the bidder being prohibited under 43 TAC §9.18(b) from bidding on the same project if it is rebid. Because that prohibition is conditioned on a forfeiture, there will be no prohibition because there will have been no forfeiture.

SUBCHAPTER B. HIGHWAY IMPROVEMENT CONTRACTS

43 TAC §§9.11, 9.13, 9.15, 9.17, 9.18

STATUTORY AUTHORITY

The amendments are adopted under Transportation Code, §201.101, which provides the Texas Transportation Commission (commission) with the authority to establish rules for the conduct of the work of the department, and more specifically, Transportation Code, §223.004, which authorizes the commission to adopt rules to prescribe conditions under which a bid may be rejected by the department.

CROSS REFERENCE TO STATUTE

Transportation Code, Chapter 223, Subchapter A.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 15, 2016.

TRD-201606617

Leonard Reese

Associate General Counsel

Texas Department of Transportation

Effective date: January 4, 2017

Proposal publication date: October 14, 2016

For further information, please call: (512) 463-8630


SUBCHAPTER J. DISADVANTAGED BUSINESS ENTERPRISE (DBE) PROGRAM

43 TAC §9.227

STATUTORY AUTHORITY

The amendments are adopted under Transportation Code, §201.101, which provides the Texas Transportation Commission (commission) with the authority to establish rules for the conduct of the work of the department, and more specifically, Transportation Code, §223.004, which authorizes the commission to adopt rules to prescribe conditions under which a bid may be rejected by the department.

CROSS REFERENCE TO STATUTE

Transportation Code, Chapter 223, Subchapter A.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 15, 2016.

TRD-201606618

Leonard Reese

Associate General Counsel

Texas Department of Transportation

Effective date: January 4, 2017

Proposal publication date: October 14, 2016

For further information, please call: (512) 463-8630


CHAPTER 11. DESIGN

SUBCHAPTER G. TRANSPORTATION ALTERNATIVES SET-ASIDE PROGRAM

43 TAC §§11.400 - 11.418

The Texas Department of Transportation (department) adopts new §§11.400 - 11.418, concerning the Transportation Alternatives Set-Aside Program. The new sections are adopted with changes to the proposed text as published in the October 14, 2016, issue of the Texas Register (41 TexReg 8177).

EXPLANATION OF ADOPTED NEW SECTIONS

The new sections implement the Transportation Alternatives Set-Aside Program (TA Set-Aside Program) as authorized by the federal Fixing America's Surface Transportation Act (FAST Act). The FAST Act establishes the TA Set-Aside Program as part of the Surface Transportation Block Grant, and replaces the Transportation Alternatives Program (TAP) which was established as an independent funding category under the Moving Ahead for Progress in the 21st Century Act (MAP-21). Like the TAP, the TA Set-Aside Program provides funding for a variety of alternative transportation projects. The TA Set-Aside Program is contained in 23 U. S. C. §133(h).

A majority of the concepts contained in the new sections are carried forward from the department's administrative rules concerning the TAP, and will be familiar to interested parties.

New Subchapter G is titled "Transportation Alternatives Set-Aside Program" to accurately reflect and conform to federal law.

New §11.400, Purpose, describes the purpose of the subchapter, which is to set out the policies and procedures for the implementation and administration of the TA Set-Aside Program.

New §11.401, Definitions, defines various terms used in the new subchapter, which are standard and recognizable within the transportation planning community.

New §11.402, Program Administration, briefly describes the suballocation of TA Set-Aside funds as required by federal law, and provides that each Metropolitan Planning Organization (MPO) serving an urbanized area with a population over 200,000 shall implement the TA Set-Aside Program for the award of funds in that area. The remaining TA Set-Aside funds will be distributed through a competitive process administered by the department.

New §11.403, Project Selection by MPOs, provides general guidance for MPOs that are responsible for the review and selection of TA Set-Aside projects. The department is not mandating how the MPOs will conduct the selection process; however, project selection shall be conducted in accordance with applicable state and federal laws and regulations. Eligibility determinations shall be made by the MPO, subject to audit by the Federal Highway Administration (FHWA). MPOs are required to provide the department a list of all projects submitted during a program call, specifically identifying the selected projects, and shall include selected projects within their respective Transportation Improvement Programs (TIPs). The project sponsor shall conduct project implementation in accordance with all applicable federal and state laws and regulations. A project sponsor requesting an adjustment to the minimum local funding match requirement based on the county's status as an economically disadvantaged county is required to obtain written authorization from the department and must include that authorization with the application submitted to the MPO. If an adjustment is granted, the adjustment percentage in effect at the time the application is submitted will be used and the county must remain eligible for the adjustment until the date the project sponsor enters into the local agreement. Projects, or substantially similar projects, submitted during a program call administered by the MPO are not eligible for consideration under a program call administered by the department. In addition, MPOs shall report annually to the department on TA Set-Aside project applications and projects awarded TA Set-Aside funding.

New §11.404, Eligible Activities, describes those activities for which TA Set-Aside funds may be awarded under a program call administered by the department. As under the TAP, these activities include construction of on-road and off-road trail facilities for pedestrians, bicyclists, and other non-motorized forms of transportation; construction of infrastructure-related projects and systems to improve safe routes for non-drivers; conversion and use of abandoned railroad corridors for trails for pedestrians, bicyclists, or other non-motorized transportation users; and construction of infrastructure-related projects to improve the ability of students to bike and walk to school. Several types of activities that are defined as "transportation alternatives" under federal law will not be considered for funding under a program call administered by the department. The agency continues to place an emphasis on facilities for pedestrians, bicyclists and other non-motorized forms of transportation, as well as certain types of infrastructure projects formerly eligible under the Safe Routes to School Program, in an effort to encourage the development of a safe and multimodal transportation system. Projects requiring the acquisition of real property through eminent domain or condemnation are not eligible. Whether proposed as an independent project or an element of a larger project, the project must be limited to a logical unit of work and be constructible as an independent project.

New §11.405, Allowable Costs, provides that the use of federal funds is limited to construction-related project expenditures and eligible project costs incurred by the department. The costs of preliminary engineering are not allowable, and expenditures for routine operation and maintenance are not reimbursable unless specifically allowed under the applicable federal program category. These limitations were previously established under the TAP.

New §11.406, Local Funding Match, specifies that the local funding match will be a cash match or combination of cash and in-kind contribution provided by or through the project sponsor. This particular language was modified to correct an inconsistency in the rule as proposed. There will always be some cash required, even if the local government provides an in-kind match for construction, because the match associated with the department's administrative costs must be provided in cash. In-kind contributions for development of project plans, specifications, and estimates (PS&E) may be considered part of the local funding match; however, these costs must be incurred after project selection, execution of the project agreement and issuance of the authorization to proceed. Unless specifically authorized under federal law or regulation, funds from other federal programs may not be used as a local funding match. Donated services will not be accepted as a part of the local match, but may be used to reduce the overall cost of the project. If a selected project is to be administered by the department, the project sponsor must provide the local funding match prior to the commencement of project activities for each phase of work. As previously stated, the local match associated with the department's administrative cost must be provided in cash.

New §11.407, Call for Nominations, describes the method by which the department will announce a call for projects and the type of information that will be included in the notice. The department may limit a program call to a particular type of eligible activity, in order to focus its efforts towards making an overall impact in a specific area.

New §11.408, Nomination Package, specifies the manner in which a project sponsor must submit its nomination and the type of information and justification that must be included in the nomination package. Project sponsors must provide persuasive evidence of support from the local community and a commitment to provide a minimum local match of 20% of the allowable project costs. If the project is located in a county that has been certified by the Texas Transportation Commission (commission) as an economically disadvantaged county, the nomination package may include a request for adjustment to the minimum local match requirement. For those projects in which the commission is authorized by law to provide state cost participation, the department may adjust the match amount. If an adjustment is granted, the adjustment percentage in effect at the time the nomination package is submitted will be used and the county must remain eligible for the adjustment until the date the project sponsor enters into the local agreement. Project submissions must be received by the published deadline and any nomination package that fails to include the required items will be considered incomplete and will not be considered for funding. The department may request supplemental information as needed to conduct project screening and evaluation.

New §11.409, Project Screening and Evaluation, describes the method by which the department will conduct the project review process. As with the TAP, the executive director will appoint a project evaluation committee consisting of department staff to review and evaluate all aspects of the project. The committee will provide selection recommendations to the director of the division responsible for administering the TA Set-Aside Program, who will review the recommendations and provide a final list of recommended projects to the commission for consideration.

New §11.410, Finding of Ineligibility; Request for Reconsideration, provides that the department will notify project sponsors of ineligible activities proposed and the reason for the determination, and describes how a project sponsor may request a reconsideration of the determination.

New §11.411, Selection of Projects by the Commission, describes the process by which the commission will select projects for funding under the TA Set-Aside Program. In making the selection, the commission will consider: (1) recommendations from the director of the division responsible for administering the program; (2) the potential benefit to the state of the project; and (3) whether the project enhances the surface transportation system. The commission will not be bound by the department's recommendations. Funds awarded by the commission are a fixed amount and any additional funds needed for the project must be provided by the project sponsor or sought during subsequent program calls.

New §11.412, Inclusion of Selected Projects in Planning Documents, provides that the department will request that MPOs include projects selected by the commission within their respective TIPs. The department will also include all selected projects in the Statewide Transportation Improvement Program (STIP).

New §11.413, Project Implementation, describes the operational responsibilities of project sponsors, as well as the department's role, during implementation of the project. These guidelines will help ensure effective and efficient implementation of each project selected by the commission. Project sponsors are expected to implement or arrange for implementation of a selected project; however, the department, in its sole discretion, may agree to implement a project on behalf of a project sponsor. All selected projects shall be developed according to current standards and specifications and in accordance with new Subchapter G. Project sponsors must enter into a local agreement with the department and comply with all applicable state and federal requirements related to the development of federal-aid highway projects. The department will ensure that all required opportunities for public involvement have been followed and that all environmental documentation has been completed prior to funding construction activities. Funding from other federal programs may only be used when specifically authorized by federal law or regulation. Changes to the scope of work must be approved in advance by the executive director. The department is responsible for final project inspection and acceptance. If the project sponsor does not complete the project as approved, the department may seek reimbursement of the expended federal funds.

New §11.414, Payment of Costs, provides that the department will submit all requests for reimbursement to FHWA and describes the manner in which costs for locally-administered projects may be submitted for reimbursement. All project costs are borne by the project sponsor until reimbursement can be obtained. Costs incurred prior to inclusion of the project in the STIP, execution of the local agreement, and prior to state and federal authorization are not eligible for reimbursement.

New §11.415, Elimination of Project from the TA Set-Aside Program, specifies that a project will be eliminated from the program if the department is notified of opposition from the local jurisdiction in which the project is located. In addition, the executive director may eliminate a project from the program if: (1) the project sponsor fails to meet the requirements of new Subchapter G; (2) implementation of the project would require a significant deviation from the activities proposed in the nomination package; (3) the project sponsor withdraws from the project; (4) a construction contract has not been awarded within three years of project selection; (5) a local agreement has not been executed within one year of project selection; or (6) the executive director determines that federal funding may be jeopardized because the project has not been implemented or completed.

New §11.416, Project Transfer; Approval of Change, outlines the basic steps required to transfer a project to another entity in the event of a legislative action and specifies that the disposition must be approved by FHWA.

New §11.417, Maintenance and Operation; Dedication for Public Use, provides that a selected project shall be maintained and operated for the purpose for which it was approved and funded, and offers guidance regarding the expected project lifespan as it relates to the federal investment.

New §11.418, Annual Reporting to FHWA, provides that the department will report annually to FHWA on the total number of TA Set Aside project applications and the total number of projects that are awarded TA Set-Aside funding.

COMMENTS

The department received comments on the proposed rules from the Regional Transportation Council (RTC) and the North Central Texas Council of Governments (NCTCOG), the MPO for the Dallas-Fort Worth area, and Public Management, Inc., a private administrative consulting firm.

The following comments were received from the RTC and NCTCOG:

Comment: New §11.403 states that projects, or substantially similar projects, submitted to a program call administered by the MPO are not eligible to be submitted under a program call administered by the department. The RTC and NCTCOG propose for a project sponsor to be allowed the same, or substantially similar project, to be submitted to both the MPO and department program call, with the understanding only one program call, either the MPO or department, could ultimately provide funding for the project.

Response: The department disagrees with the approach suggested by the RTC and NCTCOG. The department feels that project sponsors should have a singular opportunity to submit a project nomination for funding consideration. Not all eligible project sponsors have the benefit of an MPO with TA Set Aside funding for their area and there is a limited amount of TA Set-Aside funding for population areas less than 200,000. The department's position promotes a fair and equitable selection process for all who submit eligible candidate TA Set-Aside projects to the department.

Comment: The RTC and NCTCOG request clarification on §11.403(f), which states that the MPO shall conduct project implementation in accordance with all applicable federal and state laws and regulations. The RTC and NCTCOG request clarification on which project implementation obligations are the responsibility of the MPO and which are the responsibility of the department.

Response: Subsection (f) has been revised to provide that the project sponsor shall conduct project implementation in accordance with all applicable federal and state laws and regulations. All project sponsors enter into a local agreement with the department which outlines the responsibilities and duties of the participants related to project implementation. The title of §11.403 has also been revised for clarity.

The following comments were received from Public Management, Inc.:

Comment: With respect to §11.405(c) - What is an example of the costs associated to the department that would be deemed reimbursable?

Response: The department may seek federal reimbursement for costs incurred for oversight and administration of preliminary engineering and construction activities. This includes procurement of federal funding, development and execution of the local agreement (between the project sponsor and the department), reviewing consultant selection procedures and the local government's contract for plan development (when preliminary engineering activities are identified in the project nomination and authorized as an eligible in-kind contribution), plan review (at various stages of plan development), monitoring documentation of eligible in-kind costs, and conducting general administrative and oversight activities throughout project development and construction.

Comment: With respect to §11.406(a) - Please confirm that this section allows for costs associated to application preparation, planning and design, and project estimation as being eligible for in-kind match so long as they are documented. Can local services for project implementation be used for in-kind contribution?

Response: Costs associated with the preparation of the TA Set-Aside nomination package are not eligible as an in-kind contribution towards project construction. As part of the TA Set Aside nomination package, the local government/project sponsor must provide a cost estimate for project construction, a map identifying the limits of the project, evidence of public support for the project, and project details and exhibits in support of the nomination. In-kind contributions are limited to the development of project plans, specifications, and estimates that would otherwise be eligible for reimbursement under applicable statutes and regulations. In-kind costs must be identified in the nomination package to be considered. Costs incurred prior to execution of the local agreement or prior to federal and state approval and authorization to proceed are not eligible for consideration as in-kind contributions.

Comment: With respect to §11.406(f) - Are the only eligible administrative costs associated to this program for department oversight? Will the project sponsor be able to incur administrative costs at the local level for project oversight and implementation? If so, what is needed to approve this? Is there a cap associated to administrative oversight?

Response: Administrative costs are not limited to department oversight. The local government/project sponsor may include local government administrative costs in the nomination package. There is not a cap on administrative costs. The department may include a fixed percentage for its administrative costs in the nomination package, which would be based on the local government's estimated construction cost. Proposed local government administrative costs must be proportionate to the activities and costs to be incurred. Project costs will be reviewed and evaluated after project submission.

Comment: With respect to §11.413(a) - What if the sponsor does not want the department to implement this project? What is the criteria for the department to decide whether they will implement this project? What criteria will be required if a project sponsor wished to use local resources for project implementation?

Response: The local government/project sponsor is responsible for the cost and delivery of all necessary construction documents. The department's district office, upon receipt of a request from the local government/project sponsor for a local letting, will determine who will let and construct the project. The decision regarding who will be responsible for construction letting and inspection must be made prior to execution of the local agreement. Local governments are encouraged to review the department's risk assessment guidance documents and forms, available at the following webpage: http://www.txdot.gov/government/programs/local-government-projects.html.

The following three items listed on the webpage relate to the evaluation process that will be utilized by the district office: Local Government Risk Assessment and Participation/Responsibilities in Advance Funding Agreements; Local Government Agency Risk Assessment; and Special Approval per TAC §15.52, Part A and Part B. In conformance with federal requirements, this process is utilized by district staff to evaluate and determine if the local government/project sponsor is adequately staffed and suitably equipped to successfully perform project letting, construction administration, and inspection with their own forces. If the local government does not support the department's letting decision, they may withdraw from participation in the program.

STATUTORY AUTHORITY

The new sections are adopted under Transportation Code, §201.101, which provides the commission with the authority to establish rules for the conduct of the work of the department.

CROSS REFERENCE TO STATUTE

Title 23, United States Code, §133(h).

§11.400.Purpose.

The sections under this subchapter prescribe the policies and procedures for the implementation and administration of the Transportation Alternatives Set-Aside Program (TA Set-Aside Program), as authorized by 23 U.S.C. §133(h).

§11.401.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Commission--Texas Transportation Commission.

(2) Department--Texas Department of Transportation.

(3) Executive director--The executive director of the Texas Department of Transportation or the executive director's designee.

(4) FHWA--Federal Highway Administration.

(5) Local agreement--An agreement between the project sponsor and the department which includes a commitment for the required local funding, describes the total scope and course of project activities, and outlines the responsibilities and duties of the participants.

(6) Metropolitan planning organization (MPO)--The organization or policy board of an organization created and designated under 23 U.S.C. §134, and 49 U.S.C. §5303, to make transportation planning decisions for the metropolitan planning area and carry out the metropolitan planning process.

(7) Project--An undertaking to implement or construct an eligible activity at a specific location or locations, or, if the context so implies, the particular activity so implemented or constructed.

(8) Project sponsor--An eligible entity as described by 23 U.S.C. §133(h), that nominates a particular project for consideration, exercises jurisdiction over the geographic area in which that project is located, and commits to the project's development, implementation, construction, maintenance, management, and financing.

(9) State--The State of Texas or any of its political subdivisions.

(10) Statewide Transportation Improvement Program (STIP)--A four year short-range program developed by the department as a compilation of all metropolitan transportation improvement programs, together with rural transportation improvement programs, that include recommendations from rural planning organizations and department districts for the areas of the state that are outside of the boundaries of a metropolitan planning organization, including transportation between cities.

(11) Surface transportation system--An interconnected surface transportation network for moving people and goods using various combinations of transportation modes.

(12) Transportation Improvement Program (TIP)--A short-range program developed by each metropolitan planning organization in cooperation with the department and public transportation operators that covers a four-year period and contains a prioritized listing of all projects proposed for federal funding and regionally significant projects proposed for state, federal, and local funding in a metropolitan area.

§11.402.Program Administration.

(a) The state is required to suballocate, in accordance with 23 U.S.C. §133(h), a part of its TA Set-Aside apportionment to urbanized areas with populations over 200,000.

(b) Each MPO serving an urbanized area with a population over 200,000 shall implement the TA Set-Aside Program for the award of funds suballocated within that area. Section 11.403 of this subchapter (relating to Project Selection by MPOs) applies only to the use of those TA Set-Aside funds.

(c) For TA Set-Aside funds not covered by subsection (b) of this section, the commission will select projects through a competitive process administered by the department. Sections 11.404 - 11.417 of this subchapter apply only to the use of those TA Set-Aside funds.

§11.403.Project Selection by MPOs.

(a) This section applies only to an MPO serving an urbanized area with a population over 200,000 and the award of TA Set-Aside funds suballocated for such an urbanized area.

(b) The MPO, in consultation with the department, shall develop a competitive process to allow project sponsors to submit project applications for funding that achieve the objectives of the TA Set-Aside Program.

(c) The MPO shall coordinate determinations regarding project eligibility, subject to audit by the FHWA.

(d) The MPO, in consultation with the department, shall conduct project selection in accordance with all applicable federal and state laws and regulations.

(e) Following the conclusion of the competitive process, the MPO shall provide to the department a list of all projects submitted during the program call on which the selected projects are identified, and immediately shall begin the process required to include the selected projects in its TIP.

(f) The project sponsor shall conduct project implementation in accordance with all applicable federal and state laws and regulations.

(g) If a project is located on state right-of-way, the project sponsor is responsible for securing a land-use permit from the department prior to construction.

(h) A project sponsor requesting an adjustment to the minimum local funding match requirements based on the county's status as an economically disadvantaged county is required to obtain written authorization from the department, in the form prescribed by the department, and must include the form with the application submitted to the MPO. If an adjustment is granted, the adjustment percentage in effect for the county at the time the application is submitted to the MPO will be used. The county must remain eligible for the adjustment until the date the project sponsor enters into the local agreement.

(i) Projects, or substantially similar projects, submitted during a program call administered by the MPO are not eligible for consideration under a program call administered by the department.

(j) Not later than November 15 of each year, the MPO shall submit to the department a report that describes:

(1) the number of project applications received by the MPO for the preceding federal fiscal year (the period of October 1 through September 30), including the aggregate cost of the projects for which applications are received and the types of projects to be carried out, expressed as percentages of the MPO's total apportionment for TA Set-Asides; and

(2) the number of projects selected for funding by the MPO for the preceding federal fiscal year, including the aggregate cost and location of projects selected.

§11.404.Eligible Activities.

(a) During a program call administered by the department, TA Set-Aside funds may be awarded for any of the following activities:

(1) construction 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 projects to achieve compliance with the Americans with Disabilities Act of 1990;

(2) construction of infrastructure-related projects and systems that will provide safe routes for non-drivers, including children, older adults, and individuals with disabilities to access daily needs;

(3) conversion and use of abandoned railroad corridors for trails for pedestrians, bicyclists, or other non-motorized transportation users; and

(4) construction of infrastructure-related projects to 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.

(b) A project that will require the acquisition of real property through the exercise of eminent domain or condemnation is not eligible for participation in the TA Set-Aside Program.

(c) Whether proposed as an independent project or as an element of a larger transportation project, the project must be limited to a logical unit of work and be constructible as an independent project.

§11.405.Allowable Costs.

(a) Costs are allowable only if they are necessary construction-related project expenditures that are eligible for reimbursement under applicable statutes and regulations.

(b) The costs of preliminary engineering, including planning, design, and plans, specifications, and estimates, are not allowable costs.

(c) Eligible pre-construction costs incurred by the department are reimbursable. All other pre-construction costs are the responsibility of the project sponsor.

(d) Expenditures for routine operation and maintenance are not allowable costs unless specifically allowed under the individual federal category for which the project qualifies.

§11.406.Local Funding Match.

(a) The local funding match is a cash match or a combination of cash and in-kind contribution provided by or through the project sponsor. An in-kind contribution may include only actual and documented costs incurred by the project sponsor for the development of project plans, specifications, and estimates that would otherwise be eligible for reimbursement under applicable statutes and regulations.

(b) Costs incurred prior to execution of the local agreement or prior to federal and state approval and authorization to proceed are not eligible for consideration as in-kind contributions.

(c) Funds from other federal programs may be used as a local funding match only when specifically authorized by federal law or regulation.

(d) Donated services may not be accepted as a local funding match, but may be used to reduce the overall cost of the project.

(e) If a project selected by the commission is implemented by the department, the project sponsor must provide the local funding match prior to the commencement of project activities for each phase of work.

(f) Projects selected by the commission will include an administrative cost for the department's oversight. The local funding match associated with this administrative cost must be provided in cash.

§11.407.Call for Nominations.

(a) The department will issue a notice of a call for project nominations by publication in the Texas Register.

(b) The notice will include information regarding the content of the nomination package, the procedures applicable to the program call, and the specific evaluation criteria to be used during the project selection process.

(c) All or a portion of a call for nominations may be designated for a particular eligible activity.

§11.408.Nomination Package.

(a) To nominate a project during a program call administered by the department, the project sponsor must submit its nomination in the form prescribed by the department.

(b) The nomination package must present persuasive evidence of support for the proposed project from the communities in which it would be implemented and include a commitment to provide a local funding match of at least 20% of the allowable costs of the project.

(c) If the project is located in a county that has been certified by the commission as an economically disadvantaged county, the nomination package may include a request for adjustment to the minimum local funding match requirement. For those projects in which the commission is authorized by law to provide state cost participation, the department may adjust the amount required by subsection (b) of this section. If an adjustment is granted, the adjustment percentage in effect for the county at the time the program call is initiated will be used. The county must remain eligible for the adjustment until the date the project sponsor enters into the local agreement.

(d) A complete nomination package must be received by the department not later than the specified deadline published in the Texas Register. A nomination package that fails to include any of the items specified in this section or the respective program call is considered to be incomplete and will not be considered for funding. The department may request supplemental information as needed to conduct project screening and evaluation.

§11.409.Project Screening and Evaluation.

(a) The executive director will appoint a project evaluation committee consisting of department staff to review, evaluate, and make recommendations on projects submitted during a program call administered by the department.

(b) The committee will screen each project to determine whether it is eligible for funding under applicable federal and state law and whether it meets technical standards established by applicable law and accepted professional practice.

(c) The committee will evaluate the benefits of each project that is determined to be eligible under subsection (b) of this section or §11.410 of this subchapter based on the specific selection criteria set forth in the program call.

(d) The committee will provide project selection recommendations and supporting documentation to the director of the division responsible for administering the TA Set-Aside Program.

(e) The director of the division responsible for administering the TA Set-Aside Program will review the recommendations and supporting documentation submitted by the committee and provide a final list of recommended projects to the commission for consideration.

§11.410.Finding of Ineligibility; Request for Reconsideration.

(a) The department will by certified mail, return receipt requested, notify the project sponsor of ineligible activities proposed and the reason for the determination.

(b) A request for reconsideration of a finding of ineligibility may be initiated only by a letter from the nominating entity to the executive director setting forth reasons in support of a finding of eligibility. The letter requesting reconsideration must be received by the department not later than 15 days after the day that nominating entity received the department's notification, as established by the return receipt.

(c) The determination of the executive director in response to the request for reconsideration is final.

§11.411.Selection of Projects by the Commission.

(a) The commission, by written order, will select projects for funding under the TA Set-Aside Program based on:

(1) recommendations from the director of the division responsible for administering the TA Set-Aside Program;

(2) the potential benefit to the state of the project; and

(3) whether the project enhances the surface transportation system.

(b) The commission is not bound by project selection recommendations provided by the department.

(c) The department will notify the project sponsor of the selection.

(d) The commission will specify a fixed amount of TA Set-Aside funds for each project. Project costs in excess of this amount are the responsibility of the project sponsor. The project sponsor may seek additional funds through the TA Set- Aside Program in subsequent program calls.

(e) A project that is not selected must be resubmitted to receive consideration during subsequent program calls.

§11.412.Inclusion of Selected Projects in Planning Documents.

(a) If a project selected by the commission is to be implemented in a metropolitan area, the department will request that the MPO for that area immediately begin the process required to include the selected project in its TIP.

(b) The department will also immediately begin the process required to include all selected projects in the STIP.

§11.413.Project Implementation.

(a) The project sponsor shall implement or arrange for implementation of each project selected by the commission in accordance with statutory requisites and contracting procedures applicable to the type and character of the project. The department, in its sole discretion, may agree to implement a project on behalf of a project sponsor.

(b) All projects shall be developed:

(1) to current standards and specifications established or recognized by the federal government and the department; and

(2) in accordance with this subchapter.

(c) All project sponsors must enter into a local agreement and shall comply with all federal and state procedures and requirements applicable to development of federal-aid transportation projects.

(d) Before funding any construction activities, the department will ensure that required opportunities for public involvement have been provided and proper environmental documentation has been completed.

(e) Funds from other federal programs may be used only if specifically authorized by federal law or regulation. Private cash donations may be accepted if authorized by law.

(f) Any change in the scope of work that was specified in the nomination package and approved by the commission must have the advance written approval of the executive director.

(g) The department is responsible for the inspection and final acceptance of all projects selected by the commission and for certification of project completion.

(h) If the project sponsor does not complete the project as originally approved by the commission, the department may seek reimbursement of the expended federal funds from the sponsor.

§11.414.Payment of Costs.

(a) The department will submit all requests for reimbursement of allowable costs to FHWA.

(b) A project sponsor must use the forms and procedures specified by the department to request reimbursement of allowable costs incurred.

(c) For locally administered projects, the entire project cost is borne by the project sponsor until reimbursement can be obtained from FHWA for eligible activities.

(d) Costs incurred prior to the inclusion of the project in the STIP, execution of the local agreement, or federal and state approval and authorization to proceed are not eligible for reimbursement.

§11.415.Elimination of Project from the TA Set-Aside Program.

(a) A project will be eliminated from participation in the TA Set-Aside Program if prior to the execution of the local agreement, the governing body of a municipality or county in which project activities are proposed, by resolution, order, or other official action, notifies the department of its opposition to the project.

(b) The executive director may eliminate a project or a portion of a project from participation in the TA Set-Aside Program if:

(1) the project sponsor fails to satisfy any requirement of this subchapter;

(2) implementation of the project would involve significant deviation from the activities proposed in the nomination package and approved by the commission;

(3) the project sponsor withdraws from participation in the project;

(4) a construction contract has not been awarded or construction has not been initiated within three years after the date that the commission selected the project;

(5) a local agreement is not executed within one year after the date that the commission selected the project; or

(6) the executive director determines that federal funding may be lost because the project has not been implemented or completed.

§11.416.Project Transfer; Approval of Change.

(a) If legislative action requires transfer of the project to another entity, the department may terminate the existing project agreement and execute an agreement with the responsible entity.

(b) A transfer under subsection (a) of this section must receive approval from FHWA.

§11.417.Maintenance and Operation; Dedication for Public Use.

(a) A project selected by the commission shall be maintained and operated for the purpose for which it was approved and funded and for a period of time that is commensurate with the amount of federal investment in the project.

(b) A project selected by the commission shall be dedicated for public use for the greater of:

(1) a period that is commensurate with the amount of federal investment in the project; or

(2) 10 years, if the amount of federal investment in the project is $1 million or less, or 20 years, if the amount of federal investment is more than $1 million.

(c) If at any time the project sponsor can no longer maintain and operate the project for its intended purpose, the sponsor shall return the federal share used for the project in accordance with current deferral recapture procedures.

§11.418.Annual Reporting to FHWA.

The department will annually submit a report to FHWA that describes:

(1) the total number of project applications received for the federal fiscal year (the period of October 1 through September 30), including the aggregate cost of the projects for which applications are received and the types of projects to be carried out, expressed as percentages of the total apportionment for TA Set-Asides; and

(2) the total number of projects selected for funding for each federal fiscal year, including the aggregate cost and location of projects selected.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 15, 2016.

TRD-201606620

Leonard Reese

Associate General Counsel

Texas Department of Transportation

Effective date: January 4, 2017

Proposal publication date: October 14, 2016

For further information, please call: (512) 463-8630


CHAPTER 16. PLANNING AND DEVELOPMENT OF TRANSPORTATION PROJECTS

The Texas Department of Transportation (department) adopts amendments to §16.105, concerning Transportation Programs, and §§16.152 - 16.154, and 16.160, concerning Transportation Funding. The amendments to §16.105 are adopted with changes to the proposed text as published in the October 14, 2016, issue of the Texas Register (41 TexReg 8183). The amendments to §§16.152 - 16.154, and §16.160 are adopted without changes to the proposed text and will not be republished.

EXPLANATION OF ADOPTED AMENDMENTS

House Bill (HB) 20, 84th Legislature, Regular Session, 2015, requires changes be made to several of the planning and programming processes that the Texas Transportation Commission (commission) and the department use to prioritize and finance transportation projects. HB 20 also requires the commission to adopt a performance-based planning and programming process with performance metrics, measures and scoring for project selection.

In response to HB 20, and as a part of the implementation effort, the department created the Planning Organization Stakeholder Committee (POSC) in July of 2015. The POSC is comprised of representatives from seven metropolitan planning organizations as well as representatives from seven department districts. The objectives of the committee are to: (1) support the development of an implementation strategy focused on the programming, performance measure, and planning components of HB 20, along with coordination with legislative and stakeholder committees; (2) provide input for, and comments on, the department's HB 20 Initial Report and Preliminary Report; (3) assist in the development and implementation of updates to transportation funding categories and formulas; and (4) provide review and input to the development of the department's cash flow projections.

In addition to the POSC, the department formed a Core Strategy Team (CST) charged with reviewing and updating the agency's mission, vision, values and goals in order to set the foundation for the performance measures and metrics to be used in a performance-based planning process. The new values, vision, mission and goals developed by the CST were adopted by the commission on February 25, 2016. The new goals and objectives are as follows: (1) deliver the right projects -- implement effective planning and forecasting processes that deliver the right projects on-time and on-budget; (2) focus on the customer -- people are at the center of everything we do; (3) foster stewardship -- ensure efficient use of state resources; (4) optimize system performance - develop and operate an integrated transportation system that provides reliable and accessible mobility, and enables economic growth; (5) preserve our assets -- deliver preventive maintenance for the department's system and capital assets to protect our investments; (6) promote safety -- champion a culture of safety; and (7) value our employees -- respect and care for the well-being and development of our employees.

The amendments are necessary to implement the performance-based planning requirements of HB 20, integrate the department's new strategic goals and objectives, and respond to considerations of the POSC regarding improvements to the planning and forecasting processes related to the Unified Transportation Program (UTP). As the department continues to collaborate with planning partners, legislative committees and the POSC in the development of the specific performance measures, metrics and processes that will guide project selection criteria and funding distributions, additional rule changes are expected.

Amendments to §16.105(b)(1) clarify that the financial constraint associated with the development of the UTP is based on the planning cash flow forecast prepared and published in accordance with §16.152(a). This clarification is necessary in light of amendments to §16.152, which provide for the use of separate financial forecasts for purposes of planning and letting.

Amendments to §16.105(b)(3) remove specific requirements related to the organization of the UTP document. This change will provide the department with increased flexibility to organize and publish the UTP in the most user-friendly and readily-accessible format.

Amendments to §16.105(d)(1)(A) revise the project selection criteria to incorporate language contained in the department's new strategic goals and objectives, as adopted by the commission in February 2016.

Amendments to §16.105(d)(2) address the requirements of Transportation Code §201.9991, as added by HB 20, with respect to the department's use of performance metrics and measures to evaluate and rank projects listed in the UTP. The amendments specify that the department will consider performance metrics and measures to evaluate and rank the priority of each project listed in the UTP. Furthermore, projects will be ranked using a performance-based scoring system and the scoring system will be used for prioritizing projects for which financial assistance is sought from the commission. The amendments also provide that the scoring system must account for the diverse needs of the state so as to fairly allocate funding to all regions of the state.

Amendments to §16.105(e) provide guidance with regard to what constitutes a "major change" for purposes of updating the UTP, which requires a formal update to the program and an opportunity for public involvement. The amendments also require the department to present information regarding the development of the UTP and any updates to the commission the month prior to final adoption of the UTP and any updates. These changes are intended to focus public engagement on significant modifications to UTP.

Amendments to §16.105(f) modify the process for administratively revising the UTP and describe the types of changes that qualify as administrative revisions to the program. The existing process for handling administrative revisions is overly cumbersome and difficult to administer.

Amendments to §16.152 distinguish between the two types of financial forecasts to be used by the department for purposes of planning and letting. Amendments to §16.152(a) provide that the long-range financial forecast currently known as the cash flow forecast will be identified as the planning cash flow forecast. Amendments to §16.152(b) require the chief financial officer to issue a base cash flow forecast to be used for the development of the letting schedule, which will cover a period of not less than two years following the date the forecast is issued. The distinction between these two financial forecasts is critical since the planning cash flow forecast will include additional funding projections beyond those contained in the base cash flow forecast. In addition, the base cash flow forecast will provide constraints to the letting of projects funded under allocation programs, as further described in amendments to §16.154(d). Amendments to §16.152(f) reflect recent changes in nomenclature within the department; specifically, the Finance Division is now referred to as the Financial Management Division. Amendments to §16.152(g) specify that the planning cash flow forecast is to be used for development of the UTP.

Amendments to §16.153(a)(9) are necessary due to the transition from the Transportation Alternatives Program to the Transportation Alternatives Set-Aside Program, as required by federal law.

Amendments to §16.153(c) address the requirements of Transportation Code §201.9991, as added by HB 20, and provide that the commission will use a performance-based process, subject to the mandates of state and federal law, to determine the amount to be allocated to each program funding category for the appropriate period of time in order to achieve established performance outcomes. The amendments also clarify the distinction between highway program funding categories and program funding categories for other modes of transportation and transportation infrastructure, for purposes of determining funding allocations.

Amendments to §16.154(a)(3) specify that funds under Category 4 (Statewide Connectivity Corridor Projects) will be allocated to districts as an allocation program for specific corridors as opposed to specific projects. As in the past, the allocation will be based on an engineering analysis of three corridor types. However, if applicable to the particular corridor type, the commission will also consider the formula used for allocating funds under Category 2 (Metropolitan and Urban Corridor Projects). The amendments further provide that, with regard to mobility corridors, the analysis will include congestion considerations throughout the state. These changes emphasize the need for a corridor-level plan for connectivity while also providing flexibility to allocate funds to districts for use on projects along the commission-approved corridors.

Amendments to §16.154(d) provide that the letting of projects funded within allocation programs is subject to the constraints established by the base cash flow forecast described in §16.152(b). The current language implies that all projects within UTP allocation programs could be let without constraint. In light of the amendments to §16.152, which distinguish between the two different forecasts governing the planning and letting processes, this change was needed to clarify that the base cash flow forecast is the constraint for letting projects within allocation programs.

Amendments to §16.154(e) revise the definition of "project," for purposes of listing projects in the UTP, to mean a connectivity or new capacity roadway project. This change is consistent with the definitions contained in Transportation Code §201.9901, as added by HB 20.

Amendments to §16.154(f) clarify that the department may not exceed the planning cash flow forecast in distributing funds in the twelve categories of the UTP and may not exceed the base cash flow forecast in distributing funds for purposes of letting. These changes are necessary in light of the amendments to §16.152, as previously described.

Amendments to §16.160(a) specify that changes in UTP category funding levels may also result from consideration of performance results. These revisions are necessary to comply with Transportation Code §201.9991, as added by HB 20, which requires the commission to establish a performance-based process for setting funding levels for the categories of projects in the UTP.

Amendments to §16.160(b) update references to the planning cash flow forecast in light of the amendments to §16.152, as previously described. Amendments to this section also ensure that performance results are considered in a determination to increase or decrease the allocation of funds to one or more categories. These changes are necessary to comply with Transportation Code §201.9991, as added by HB 20, which requires the commission to establish a performance-based process for setting funding levels for the categories of projects in the UTP.

Amendments to §16.160(d) provide that significant changes to the base cash flow forecast may result in changes to the letting schedule in order to maintain fiscal constraint. The amendments also specify that projects eligible for letting include all authorized projects or allocation programs covered in the UTP and STIP and that specific projects will be advanced or delayed relative to the order of listed priorities in the applicable programs, fund source eligibility and the completion of project benchmarks sufficient to proceed to construction. These changes are needed to clarify the relationship between the letting schedule and the base cash flow forecast, as explained in the amendments to §16.152, and how changes to the letting schedule will be handled in relation to the changing base cash flow forecast. In addition, this language supports the provisions of Transportation Code §201.809, as amended by HB 20, which require the department to include performance metrics and measures in the evaluation of project delivery for projects in the letting schedule. The preference for allocation of funding increases has been eliminated, as this process is to be governed by the use of performance results in accordance with the provisions of Transportation Code §201.9991, as added by HB 20.

Amendments to §16.160(f) reflect recent changes in nomenclature within the department, as previously described.

COMMENTS

The department received comments on the proposed rules from the Regional Transportation Council (RTC), the policy body for the Metropolitan Planning Organization (MPO) for the Dallas-Fort Worth area. Overall, the RTC and the North Central Texas Council of Governments (NCTCOG) support the proposed changes required by HB 20 made to the department's planning and programming processes that will be used to prioritize and finance transportation projects.

Comment:

Section 16.105 states the department will develop a Unified Transportation Program (UTP) to guide the development and authorize construction and maintenance of transportation projects. Among other requirements, the UTP must include a list of all projects and programs that the department intends to develop or initiate construction or maintenance during the UTP period. The RTC recommends the UTP instead focus on performance measures and revenues, rather than a list of projects. Where law permits, the UTP should aggregate some projects (e.g., maintenance) to a program total and take advantage of project lists that already exist in Transportation Improvement Programs.

Response:

The proposed rules support this recommendation and will allow the department to transition the development of the UTP to a more performance-driven process. Furthermore, the definition of "project" in §16.154(e) has been revised to specify that the UTP need only include a listing of connectivity or new capacity roadway projects. Such projects are typically funded through Categories 2 (Metropolitan and Urban Corridor Projects), 4 (Statewide Connectivity Corridor Projects) and 12 (Strategic Priority). No changes to the proposed rules will be made in response to this comment.

Comment:

Section 16.105(b) specifies that the UTP will be financially constrained for planning and development purposes based on the planning cash flow forecast. The RTC supports the use of the planning cash flow forecast for this purpose as it allows regions more flexibility in developing large, more significant projects.

Response:

No response is necessary and no changes to the proposed rules will be in response to this comment.

Comment:

Section 16.105(b) removes reference that the UTP will be organized by funding category. It is important to MPOs and department districts across the state to know funding levels expected in each category to assist with planning efforts. While this is being removed directly from the UTP, a funding allocation should be made through the new planning cash flow forecast in §16.152.

Response:

The UTP will continue to include funding allocations and summaries of anticipated planning levels by category. The revisions are intended to provide flexibility in how the department organizes project listings, to ensure that the UTP is accessible and understandable to the general public. No changes to the proposed rules will be made in response to this comment.

Comment:

Section 16.105(d) related to "Project Selection" requires that the department "consider performance metrics and measures" and use a "performance-based scoring system" to evaluate and rank the priority of projects within a particular funding category. The RTC supports the use of performance measures and scoring criteria and recommends that the commission identify the specific performance metrics and scoring criteria to be used not only to prioritize projects in each funding category, but also for the initial project selection as well.

Response:

The effort to implement a performance-based planning process is on-going and the department will continue to collaborate with planning partners in the development of specific performance measures, metrics and processes that will guide project selection criteria and funding distributions. As this process becomes more defined, additional rule changes are expected. No changes to the proposed rules will be made in response to this comment.

Comment:

Section 16.105(e) further defines "major changes" to the UTP, which will require public involvement. The language related to Category 4 and Category 12 is unclear whether projects in those categories will require public involvement, as the proposed wording states that "all revisions to projects funded in those categories must be first included in an update to the UTP approved by the commission." In addition, as written it appears that no changes, even administrative amendments, could be made to projects in Category 4 and 12. The RTC recommends that the department consider whether such a rule could have unintended consequences for project implementation.

Response:

The intent of the proposed rule is to require public involvement for all revisions that meet the definition of a "major change." For clarity, the department has revised §16.105(e) to remove the specific reference to Category 4, which is more appropriately addressed under §16.105(f). However, any revisions to project funding allocations in Category 12 will require a formal UTP update, including public involvement. The department has revised §16.105(f) to specify that the UTP may be administratively revised at any time and for any reason that does not affect the total amount of funding allocated to a district for specific corridors in Category 4. This change will allow department districts to make administrative revisions in Category 4 at the project level, provided that the revision does not affect the total amount allocated for specific corridors.

Comment:

Section 16.153(c) states that "the commission will use a performance-based process to determine...the amount of funds to be allocated to each program funding category," but the process and criteria are not outlined in the proposed regulations. It will be important to outline these items moving forward so MPOs and department districts are able to participate in determining allocation criteria that could impact categories in which they have project selection authority. This becomes increasingly important in combination with §16.160 changes where funding allocation changes can be made based on consideration of performance results without the performance targets/measurement criteria being defined in advance.

Response:

The department is committed to developing and institutionalizing a performance-based planning process. As previously stated, the effort is on-going and the department will continue to collaborate with planning partners in the development of specific performance measures, metrics and processes that will guide project selection criteria and funding distributions. As this process becomes more defined, additional rule changes are expected. No changes to the proposed rules will be made in response to this comment.

SUBCHAPTER C. TRANSPORTATION PROGRAMS

43 TAC §16.105

STATUTORY AUTHORITY

The amendments are adopted under Transportation Code, §201.101, which provides the Texas Transportation Commission (commission) with the authority to establish rules for the conduct of the work of the department, and more specifically, Transportation Code, §201.809, which requires the commission to adopt rules to develop and implement a performance-based planning and programming process and performance metrics and performance measures; §201.991, which requires the commission to adopt rules related to the unified transportation program; and §201.9991, which requires the commission to adopt rules to prioritize and approve projects included in the statewide transportation plan.

CROSS REFERENCE TO STATUTE

Transportation Code, §§201.809, 201.991, and 201.9991.

§16.105.Unified Transportation Program (UTP).

(a) General. The department will develop a unified transportation program (UTP) that covers a period of ten years to guide the development and authorize construction and maintenance of transportation projects and projects involving aviation, public transportation, and the state's waterways and coastal waters. In developing the UTP, the department will collaborate with local transportation entities and public transportation operators as defined by 23 C.F.R. Part 450.

(b) Requirements. The UTP will:

(1) be financially constrained for planning and development purposes based on the planning cash flow forecast prepared and published in accordance with §16.152(a) of this subchapter (relating to Cash Flow Forecasts) and estimate funding levels and the allocation of funds to each district, metropolitan planning organization (MPO), and other authorized entity for each year in accordance with Subchapter D of this chapter (relating to Transportation Funding);

(2) list all projects and programs that the department intends to develop, or on which the department intends to initiate construction or maintenance, during the UTP period, and the applicable funding category to which a project or program is assigned, after consideration of the:

(A) statewide long-range transportation plan (SLRTP);

(B) metropolitan transportation plans (MTP);

(C) transportation improvement programs (TIP);

(D) MPO annual reevaluations of project selection in MTPs and TIPs, if any, in accordance with subsection (c) of this section;

(E) statewide transportation improvement programs (STIP);

(F) recommendations of rural planning organizations (RPO) as provided in this subchapter; and

(G) list of major transportation projects in accordance with §16.106 of this subchapter (relating to Major Transportation Projects); and

(3) designate the priority ranking within a program funding category of each listed project in accordance with subsection (d)(2) of this section.

(c) MPO annual reevaluation of project selection. An MPO may annually reevaluate the status of project priorities and selection in its approved metropolitan transportation plan (MTP) and transportation improvement program (TIP) and provide a report of any changes to the department at the times and in the manner and format established by the department. The reevaluation must be consistent with criteria applicable to development of the MTP and TIP in accordance with federal requirements.

(d) Project selection.

(1) The commission will consider the following criteria for project selection in the UTP as applicable to the program funding categories described in §16.153 of this chapter (relating to Funding Categories):

(A) the potential of the project to meet transportation goals for the state, including efforts to:

(i) maintain a safe transportation system for all transportation users;

(ii) optimize system performance by mitigating congestion, enhancing connectivity and mobility, improving the reliability of the system, facilitating the movement of freight and international trade, and fostering economic competitiveness through infrastructure investments;

(iii) maintain and preserve system infrastructure; and

(iv) accomplish any additional transportation goals for the state identified in the statewide long-range transportation plans as provided in §16.54 of this chapter (relating to Statewide Long-Range Transportation Plan (SLRTP));

(B) the potential of the project to assist the department in attainment of the measurable targets for the transportation goals identified in subparagraph (A) of this paragraph; and

(C) adherence to all accepted department design standards as well as applicable state and federal law and regulations.

(2) The department will consider performance metrics and measures to evaluate and rank the priority of each project listed in the UTP based on the transportation needs for the state and the goals identified in paragraph (1)(A) of this subsection. A project will be ranked within its applicable program funding category, using a performance-based scoring system, and classified as tier one, tier two, or tier three for ranking purposes. The scoring system will be used for prioritizing projects for which financial assistance is sought from the commission and must account for the diverse needs of the state so as to fairly allocate funding to all regions of the state. Major transportation projects will have a tier one classification and be designated as the highest priority projects within an applicable funding category. A project that is designated for development or construction in accordance with the mandates of state or federal law or specific requirements contained in other chapters of this title may be prioritized in a funding category as a designated project in lieu of a tier one, tier two, or tier three ranking.

(3) The commission will determine and approve the final selection of projects and programs to be included in the UTP, except for the selection of federally funded projects by an MPO serving in an area designated as a transportation management area (TMA) as provided in §16.101(n) of this subchapter (relating to Transportation Improvement Program (TIP)). A federally funded project selected by an MPO designated as a TMA will be approved by the commission, subject to:

(A) satisfaction of the project selection criteria in paragraph (1) of this subsection;

(B) compliance with federal law; and

(C) the district's and MPO's allocation of funds for the applicable years.

(e) Approval of unified transportation program (UTP). Not later than August 31 of each year, the commission will adopt the unified transportation program for the next fiscal year. The UTP may be updated more frequently if necessary to authorize a major change to one or more funding allocations or project listings in the most recent UTP. For the purpose of updating the UTP, the term "major change" refers to the authorization of new projects or the revision of project funding allocations which exceed 10 percent of the project cost or $500,000, whichever is greater, occurring in non-allocation program categories, excluding revisions to local funding contributions and projects designated under miscellaneous state and federal programs. The foregoing does not apply to project funding allocations in Category 12 Strategic Priority as described in §16.153(a) of this subchapter (relating to Funding Categories) and all revisions to projects funded in that category must be first included in an update to the UTP approved by the commission. The department will present information regarding the development of the UTP and any updates to the commission the month prior to final adoption of the UTP and any updates. The department will hold a hearing prior to:

(1) final adoption of the UTP and any updates; and

(2) approval of any adjustments to the program resulting from changes to the allocation of funds under §16.160 of this chapter (relating to Funding Allocation Adjustments).

(f) Administrative revisions. The UTP may be administratively revised at any time and for any reason that does not constitute a major change as described in subsection (e) of this section, with the exception of project funding allocations in Category 12 Strategic Priority as described in subsection (e), or does not affect the total amount of funding allocated to a district for specific corridors in Category 4 Statewide Connectivity Corridor Projects as described in §16.153(a) of this subchapter (relating to Funding Categories).

(g) Public involvement during development of the unified transportation program.

(1) The department will seek to effectively engage the general public and stakeholders in development of the UTP.

(2) The department will hold public meetings throughout the state that will cover each district during development of the UTP as early as the department determines is feasible to assure public input into the process. The department will also hold public meetings throughout applicable areas of the state during development of each update to the program that will cover each district affected by the update. The department will publish notice of each public meeting as appropriate to maximize attendance at the meeting.

(3) The department will report its progress on the program and provide an opportunity for a free exchange of ideas, views, and concerns relating to project selection, funding categories, level of funding in each category, the allocation of funds for each year of the program, and the relative importance of the various selection criteria. A representative from each district will attend each public meeting applicable to the district and be available for the discussion.

(4) The department may conduct a public meeting by video-teleconference or other electronic means that provide for direct communication among the participants.

(h) Public involvement prior to final adoption. The department, prior to adoption of the unified transportation program and approval of any updates to the program, will hold at least one statewide hearing on its project selection process including the UTP's funding categories, the level of funding in each category, the allocation of funds for each year of the program, and the relative importance of the various selection criteria.

(1) The department will publish a notice of the applicable hearing in the Texas Register a minimum of 15 days prior to it being held and will inform the public where to send any written comments.

(2) The department will accept written public comments for a period of at least 30 days after the date the notice appears in the Texas Register.

(3) A copy of the proposed project selection process, the UTP, and any adjustments to the plan, as applicable, will be available for review at the time the notice of hearing is published at each of the district offices and at the department's Transportation Planning and Programming Division offices in Austin. A copy will also be available on the department website.

(i) Publication. The department will publish the entire approved unified transportation program, updates, adjustments, and administrative revisions together with any summary documents highlighting project benchmarks, priorities, and forecasts on the department's website. The documents will also be available for review at each of the district offices and at the department's Transportation Planning and Programming Division offices in Austin.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 15, 2016.

TRD-201606621

Leonard Reese

Associate General Counsel

Texas Department of Transportation

Effective date: January 4, 2017

Proposal publication date: October 14, 2016

For further information, please call: (512) 463-8630


SUBCHAPTER D. TRANSPORTATION FUNDING

43 TAC §§16.152 - 16.154, 16.160

STATUTORY AUTHORITY

The amendments are adopted under Transportation Code, §201.101, which provides the Texas Transportation Commission (commission) with the authority to establish rules for the conduct of the work of the department, and more specifically, Transportation Code, §201.809, which requires the commission to adopt rules to develop and implement a performance-based planning and programming process and performance metrics and performance measures; §201.991, which requires the commission to adopt rules related to the unified transportation program; and §201.9991, which requires the commission to adopt rules to prioritize and approve projects included in the statewide transportation plan.

CROSS REFERENCE TO STATUTE

Transportation Code, §§201.809, 201.991, and 201.9991.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 15, 2016.

TRD-201606622

Leonard Reese

Associate General Counsel

Texas Department of Transportation

Effective date: January 4, 2017

Proposal publication date: October 14, 2016

For further information, please call: (512) 463-8630