SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Highway Aid Performance-
Based Improvement Act of 2017''.

SEC. 2. PILOT PROGRAM.

    (a) In General.--Chapter 1 of title 23, United States Code, is 
amended by adding at the end the following:
``Sec. 171. Consolidated funding pilot program
    ``(a) In General.--The Secretary shall carry out a consolidated 
funding pilot program (referred to in this section as the `program') in 
3 States, as selected by the Secretary, that are eligible under 
subsection (c)--
            ``(1) to transform the Federal-aid highway program to a 
        performance- and outcome-based program that refocuses 
        investment of resources on transportation projects that make 
        progress toward the achievement of the national goals described 
        in paragraphs (1) through (7) of section 150(b); and
            ``(2) to continue advancements made under the Moving Ahead 
        for Progress in the 21st Century Act (Public Law 112-141; 126 
        Stat. 405) and the Fixing America's Surface Transportation Act 
        (Public Law 114-94; 129 Stat. 1312) to streamline program 
        categories by demonstrating how additional flexibility would 
        enable States to make investment decisions that better achieve 
        State and national goals while advancing accountability and 
        transparency of the Federal-aid highway program.
    ``(b) Implementation.--
            ``(1) In general.--In carrying out the program, of those 
        funds apportioned to a participating eligible State and after 
        suballocations, set-asides, and pass-throughs made within each 
        State to entities other than the transportation department of 
        the State (including a metropolitan planning organization and a 
        regional transportation planning organization), the Secretary 
        shall treat the apportionments remaining with the State 
        transportation department under the individual apportionment 
        programs described in section 104 as a single, consolidated 
        apportionment.
            ``(2) Eligible activities.--Activities eligible under the 
        program shall include all activities eligible for the 
        individual apportionment programs described in section 104.
    ``(c) Eligibility.--To be eligible to participate in the program--
            ``(1) a State selected by the Secretary under subsection 
        (a) shall--
                    ``(A) demonstrate that well-established performance 
                management systems are in place in the State for the 
                national goals for--
                            ``(i) safety described in section 
                        150(b)(1); and
                            ``(ii) infrastructure condition described 
                        in section 150(b)(2);
                    ``(B) demonstrate that the performance management 
                systems in place in the State include a system of 
                metrics and performance measures that guide the State 
                in using program funds and prioritizing projects--
                            ``(i) to ensure an effective use of 
                        resources; and
                            ``(ii) to further the objectives of the 
                        program; and
                    ``(C) demonstrate progress made toward achieving 
                measurable performance of national goals for--
                            ``(i) congestion reduction described in 
                        section 150(b)(3);
                            ``(ii) system reliability described in 
                        section 150(b)(4);
                            ``(iii) freight movement and economic 
                        vitality described in section 150(b)(5);
                            ``(iv) environmental sustainability 
                        described in section 150(b)(6); and
                            ``(v) reduced project delivery delays 
                        described in section 150(b)(7); and
            ``(2) the head of the State agency with primary 
        jurisdiction over highways shall enter into a written agreement 
        with the division administrator of the field office of the 
        Federal Highway Administration located in the State and any 
        metropolitan planning organization located in the State, which 
        shall specify which individual apportionment programs or 
        portions of programs referred to in subsection (b) shall be 
        included in the program in that State.
    ``(d) Term.--The Secretary shall carry out the program for a term 
of not fewer than 6 years.
    ``(e) Termination.--Participation of a State in the program may be 
terminated--
            ``(1) by the Secretary if--
                    ``(A) the Secretary determines that the State is 
                not adequately carrying out the responsibilities 
                assigned to the State under the program;
                    ``(B) the Secretary provides to the State--
                            ``(i) notification of the determination of 
                        noncompliance under subparagraph (A); and
                            ``(ii) a period of not less than 30 days 
                        during which the State may take such corrective 
                        action as the Secretary determines necessary to 
                        comply with the program; and
                    ``(C) after the notification of noncompliance and 
                the expiration of the period under subparagraph (B), 
                the State has not taken satisfactory corrective action, 
                as determined by the Secretary; or
            ``(2) by the State at any time if--
                    ``(A) not later than 90 days before the date of 
                termination, the State provides to the Secretary notice 
                of the termination; and
                    ``(B) the State complies with such other terms or 
                conditions as the Secretary determines to be necessary.
    ``(f) Reports.--
            ``(1) State reporting requirements.--Participating eligible 
        States shall submit to the Secretary an annual report--
                    ``(A) demonstrating how performance management 
                systems were used to guide the decisionmaking process 
                of the State in the development of the statewide 
                transportation improvement program of the State under 
                section 135; and
                    ``(B) describing the results of the program based 
                on performance measures that demonstrate progress 
                toward the achievement of performance goals.
            ``(2) Report to congress.--The Secretary shall submit to 
        Congress an annual report that describes the administration of 
        the program.''.
    (b) Conforming Amendment.--The analysis for chapter 1 of title 23, 
United States Code, is amended by inserting after the item relating to 
section 170 the following:

``171. Consolidated funding pilot program.''.
Federal Highway Aid Performance-Based Improvement Act of 2017 This bill directs the Department of Transportation (DOT) to carry out a six-year consolidated funding pilot program in three states, selected by DOT, to: (1) transform the federal-aid highway program to a performance- and outcome-based program, and (2) continue advancements made in prior enactments to streamline program categories. The bill sets forth eligibility criteria for participation by states in the pilot program.
Federal Highway Aid Performance-Based Improvement Act of 2017