### §121. Payment to States for construction

(a) In General.—The Secretary, from time to time as the work progresses, may make payments to a State for costs of construction incurred by the State on a project (including payments made pursuant to a long-term concession agreement, such as availability payments). Such payments may also be made for the value of the materials—

(1) that have been stockpiled in the vicinity of the construction in conformity to plans and specifications for the projects; and

(2) that are not in the vicinity of the construction if the Secretary determines that because of required fabrication at an off-site location the material cannot be stockpiled in such vicinity.

(b) Project Agreement.—No payment shall be made under this chapter except for a project covered by a project agreement. After completion of the project in accordance with the project agreement, a State shall be entitled to payment out of the appropriate sums apportioned or allocated to the State of the unpaid balance of the Federal share payable for such project.

(c) Such payments shall be made to such official or officials or depository as may be designated by the State transportation department and authorized under the laws of the State to receive public funds of the State.

(Pub. L. 85–767, Aug. 27, 1958, 72 Stat. 899; Pub. L. 88–157, §7(b), Oct. 24, 1963, 77 Stat. 278; Pub. L. 93–87, title I, §117, Aug. 13, 1973, 87 Stat. 259; Pub. L. 94–280, title I, §118(a), May 5, 1976, 90 Stat. 437; Pub. L. 100–17, title I, §133(b)(6), Apr. 2, 1987, 101 Stat. 171; Pub. L. 102–240, title I, §1018(b), Dec. 18, 1991, 105 Stat. 1948; Pub. L. 105–178, title I, §§1212(a)(2)(A)(i), 1302, June 9, 1998, 112 Stat. 193, 226; Pub. L. 114–94, div. A, title II, §2002(a), Dec. 4, 2015, 129 Stat. 1446.)

#### **Editorial Notes**

#### Amendments

2015—Subsec. (a). Pub. L. 114–94 inserted "(including payments made pursuant to a long-term concession agreement, such as availability payments)" after "a project" in introductory provisions.

1998—Subsec. (a). Pub. L. 105–178, §1302(1), added subsec. (a) and struck out former subsec. (a) which read as follows: "The Secretary may, in his discretion, from time to time as the work progresses, make payments to a State for costs of construction incurred by it on a project. These payments shall at no time exceed the Federal share of the costs of construction incurred to the date of the voucher covering such payment plus the Federal share of the value of the materials which have been stockpiled in the vicinity of such construction in conformity to plans and specifications for the project. Such payments may also be made in the case of any such materials not in the vicinity of such construction if the Secretary determines that because of required fabrication at an off-site location the materials cannot be stockpiled in such vicinity."

Subsec. (b). Pub. L. 105–178, §1302(1), added subsec. (b) and struck out former subsec. (b) which read as follows: "After completion of a project in accordance with the plans and specifications, and approval of the final voucher by the Secretary, a State shall be entitled to payment out of the appropriate sums apportioned to it of the unpaid balance of the Federal share payable on account of such project."

Subsec. (c). Pub. L. 105–178, §1302(2), (3), redesignated subsec. (e) as (c) and struck out former subsec. (c) which read as follows: "No payment shall be made under this chapter, except for a project located on a Federal-aid system and covered by a project agreement. No final payment shall be made to a State for its costs of construction of a project until the completion of the construction has been approved by the Secretary following inspections pursuant to section 114(a) of this title."

Subsec. (d). Pub. L. 105–178, §1302(2), struck out subsec. (d) which read as follows: "In making payments pursuant to this section, the Secretary shall be bound by the limitations with respect to the permissible amounts of such payments continued in sections 106(c), 120, and 130 of this title."

Subsec. (e). Pub. L. 105–178, §1302(3), redesignated subsec. (e) as (c).

Pub. L. 105–178, §1212(a)(2)(A)(i), substituted "State transportation department" for "State highway department".

1991—Subsec. (d). Pub. L. 102–240 substituted "106(c), 120," for "120" and struck out at end "Payments for construction engineering on any project financed with Federal-aid highway funds shall not exceed 15 percent of the Federal share of the cost of construction of such project after excluding from the cost of construction the costs of rights-of-way, preliminary engineering, and construction engineering."

1987—Subsec. (d). Pub. L. 100–17 substituted "15 percent" for "10 per centum" and struck out at end "However, this limitation shall be 15 per centum in any State with respect to which the Secretary finds such higher limitation to be necessary."

1976—Subsec. (d). Pub. L. 94–280 substituted "Federal-aid highway funds" for "Federal-aid primary, secondary, or urban funds" and struck out 10 per centum limitation provision for any project financed with interstate funds.

1973—Subsec. (a). Pub. L. 93–87 authorized payments to be made for materials not in the construction vicinity where the Secretary determines that because of required fabrication at an off-site location the materials cannot be stockpiled in such vicinity.

1963—Subsec. (d). Pub. L. 88–157 substituted "any project financed with Federal-aid primary, secondary, or urban funds" for "any one project" and provided for limitation, on payments for construction engineering on projects financed with Federal-aid primary, secondary, or urban funds, of 15 percent of Federal share of cost of construction of the project where found by the Secretary to be necessary and for 10–percent limitation on projects financed with interstate funds.

#### **Statutory Notes and Related Subsidiaries**

#### Effective Date of 2015 Amendment

Amendment by Pub. L. 114–94 effective Oct. 1, 2015, see section 1003 of Pub. L. 114–94, set out as a note under section 5313 of Title 5, Government Organization and Employees.

#### Effective Date of 1991 Amendment

Amendment by Pub. L. 102–240 effective Dec. 18, 1991, and applicable to funds authorized to be appropriated or made available after Sept. 30, 1991, and, with certain exceptions, not applicable to funds appropriated or made available on or before Sept. 30, 1991, see section 1100 of Pub. L. 102–240, set out as a note under section 104 of this title.

#### At-Risk Project Preagreement Authority

Pub. L. 114–94, div. A, title I, §1440, Dec. 4, 2015, 129 Stat. 1434, provided that:

"(a) Definition of Preliminary Engineering.—In this section, the term 'preliminary engineering' means allowable preconstruction project development and engineering costs.

"(b) At-risk Project Preagreement Authority.—A recipient or subrecipient of Federal-aid funds under title 23, United States Code, may—

"(1) incur preliminary engineering costs for an eligible project under title 23, United States Code, before receiving project authorization from the State, in the case of a subrecipient, and the Secretary [of Transportation] to proceed with the project; and

"(2) request reimbursement of applicable Federal funds after the project authorization is received.

"(c) Eligibility.—The Secretary may reimburse preliminary engineering costs incurred by a recipient or subrecipient under subsection (b)—

"(1) if the costs meet all applicable requirements under title 23, United States Code, at the time the costs are incurred and the Secretary concurs that the requirements have been met;

"(2) in the case of a project located within a designated nonattainment or maintenance area for air quality, if the conformity requirements of the Clean Air Act (42 U.S.C. 7401 et seq.) have been met; and

"(3) if the costs would have been allowable if incurred after the date of the project authorization by the Department.

"(d) At-risk.—A recipient or subrecipient that elects to use the authority provided under this section shall—

"(1) assume all risk for preliminary engineering costs incurred prior to project authorization; and

"(2) be responsible for ensuring and demonstrating to the Secretary that all applicable cost eligibility conditions are met after the authorization is received.

"(e) Restrictions.—Nothing in this section—

"(1) allows a recipient or subrecipient to use the authority under this section to advance a project beyond preliminary engineering prior to the completion of the environmental review process;

"(2) waives the applicability of Federal requirements to a project other than the reimbursement of preliminary engineering costs incurred prior to an authorization to proceed in accordance with this section; or

"(3) guarantees Federal funding of the project or the eligibility of the project for future Federal-aid highway funding."

#### Submission of Recommendations to Congress for Reimbursement of States for Certain Highways

Pub. L. 85–845, Aug. 28, 1958, 72 Stat. 1083, required Secretary of Commerce, within ten days after first day of first session of Eighty-sixth Congress, to submit to Congress recommendations for legislation for purpose of assisting Congress to determine whether or not to reimburse each State of any portion of a toll or free highway (1) which was on National System of Interstate and Defense Highways [now Dwight D. Eisenhower System of Interstate and Defense Highways], (2) which met standards required by Federal-Aid Highway Act of 1956 for such System of Interstate and Defense Highways, and (3) construction of which had been completed since Aug. 2, 1947, or which had been in actual use or under construction by contract, for completion, awarded not later than June 30, 1957.