[Federal Register Volume 80, Number 34 (Friday, February 20, 2015)]
[Proposed Rules]
[Pages 9231-9253]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-03167]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 80, No. 34 / Friday, February 20, 2015 / 
Proposed Rules

[[Page 9231]]



DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Part 515

[Docket No. FHWA-2013-0052]
RIN 2125-AF57


Asset Management Plan

AGENCY: Federal Highway Administration (FHWA), Department of 
Transportation (DOT).

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FHWA proposes to establish a process for the development 
of a State asset management plan in accordance with section 1106 of the 
Moving Ahead for Progress in the 21st Century Act (MAP-21), to improve 
or preserve the condition of the assets and the performance of the 
National Highway System (NHS) as they relate to physical assets. In 
this document ``asset management plan'' and ``risk-based asset 
management plan'' are used interchangeably. An asset management plan is 
a key management tool for highway infrastructure owners. State 
departments of transportation (State DOT) increasingly use asset 
management plans to make decisions about where and when to invest State 
and Federal funds in highway infrastructure improvements to achieve and 
sustain a desired state of good repair over the life cycle of the 
assets at minimum practicable cost. The development and implementation 
of an asset management plan also is an important part of the overall 
MAP-21 framework for enhancing the management and performance of 
transportation highway infrastructure funded through the Federal-aid 
highway program (FAHP). The asset management plan required by section 
1106 of MAP-21 will provide States with critical data and identify 
investment and management strategies to improve or preserve the 
condition of the assets and the performance of the NHS. Under section 
1106, the plan must include strategies leading to a program of projects 
that would make progress toward achievement of the State targets for 
asset condition and performance of the NHS in accordance with section 
1203(a) of MAP-21, and supporting progress toward the achievement of 
the national goals identified in section 1203(a).
    While the primary purpose of this proposed rule is to address asset 
management plan requirements in section 1106, this proposed rule also 
would address other MAP-21 requirements that relate to asset 
management. The proposed rule defines the minimum standards that States 
would use in developing and operating highway bridge and pavement 
management systems as required by section 1203(a) of MAP-21. Also, this 
proposed rule would address the requirements in section 1315(b) of MAP-
21 by requiring States to conduct statewide evaluations to determine if 
reasonable alternatives exist to roads, highways, or bridges that 
repeatedly require repair and reconstruction activities from emergency 
events. The proposed rule would require State DOTs to take these 
evaluations into account in their asset management plans for facilities 
that are included in the plans.

DATES: Comments must be received on or before April 21, 2015. Late-
filed comments will be considered to the extent practicable.

ADDRESSES: To ensure that you do not duplicate your docket submissions, 
please submit them by only one of the following means:
    <bullet> Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for submitting 
comments.
    <bullet> Mail: Docket Management Facility, U.S. Department of 
Transportation, 1200 New Jersey Avenue SE., W12-140, Washington, DC 
20590-0001.
    <bullet> Hand Delivery: West Building Ground Floor, Room W12-140, 
1200 New Jersey Avenue SE., between 8:30 a.m. and 4:00 p.m., e.t., 
Monday through Friday, except Federal holidays. The telephone number is 
202-366-9329.
    <bullet> Instructions: You must include the agency name and docket 
number or the Regulatory Identification Number (RIN) for the rulemaking 
at the beginning of your comments. All comments received will be posted 
without change to http://www.regulations.gov, including any personal 
information provided.

FOR FURTHER INFORMATION CONTACT: Ms. Nastaran Saadatmand, Office of 
Asset Management, 202-366-1336, <a href="/cdn-cgi/l/email-protection#6a040b191e0b180b0444190b0b0e0b1e070b040e2a0e051e440d051c"><span class="__cf_email__" data-cfemail="d8b6b9abacb9aab9b6f6abb9b9bcb9acb5b9b6bc98bcb7acf6bfb7ae">[email protected]</span></a> or Ms. 
Janet Myers, Office of the Chief Counsel, 202-366-2019, 
<a href="/cdn-cgi/l/email-protection#d8b2b9b6bdacf6b5a1bdaaab98bcb7acf6bfb7ae"><span class="__cf_email__" data-cfemail="b0dad1ded5c49eddc9d5c2c3f0d4dfc49ed7dfc6">[email protected]</span></a>, Federal Highway Administration, 1200 New Jersey 
Avenue SE., Washington, DC 20590. Office hours are from 8:00 a.m. to 
4:30 p.m., e.t., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION: 

Electronic Access and Filing

    This document and all comments received may be viewed online 
through the Federal eRulemaking portal at http://www.regulations.gov. 
Electronic submission and retrieval help and guidelines are available 
on the Web site. It is available 24 hours each day, 365 days this year. 
Please follow the instructions. An electronic copy of this document may 
also be downloaded from the Office of the Federal Register's home page 
at https://www.federalregister.gov.

Executive Summary

I. Purpose of the Regulatory Action

    This regulatory action would establish a process that States DOTs 
would use to develop a State asset management plan, in accordance with 
section 1106(a) of MAP-21, codified as 23 U.S.C. 119. Asset management, 
as defined in 23 U.S.C. 101(a)(2), is ``a strategic and systematic 
process of operating, maintaining, and improving physical assets, with 
a focus on both engineering and economic analysis based on quality 
information, to identify a structured sequence of maintenance, 
preservation, repair, rehabilitation, and replacement actions that will 
achieve and sustain a desired state of good repair over the life cycle 
of the assets at minimum practicable cost.'' Asset management plans are 
an important highway infrastructure management tool to improve and 
preserve the condition of assets and system performance. Asset 
management plans help agencies answer five core questions:
    (1) What is the current status of our assets?
    (2) What is the required condition and performance of those assets?
    (3) Are there critical risks that must be managed?

[[Page 9232]]

    (4) What are the best investment options available for managing the 
assets?
    (5) What is the best long-term funding strategy?
    The need for effective asset management practices nationwide stems 
from a combination of challenges facing the State DOTs and FHWA. First, 
the nature of the FAHP has changed over the last several decades. 
Whereas the FAHP once primarily funded major new-location 
infrastructure projects, today the FAHP primarily focuses on preserving 
existing infrastructure through preventative maintenance and 
reconstruction. This work is complicated by the variable effects of 
increased usage, infrastructure age, and deterioration and damage from 
environmental conditions, including extreme weather. Second, funding 
needs for the FAHP far exceed available Federal funding. Making sound 
investment decisions is more important in an environment of financial 
scarcity. Third, the expectations of Congress and the general public 
have changed since the early days of the FAHP. Today, both expect 
highly transparent, accountable, data-driven decisionmaking about the 
investment of FAHP funds. The asset management requirements of 23 
U.S.C. 119, together with the performance measures and targets 
established under 23 U.S.C. 150(c) and (d), will create national 
minimum requirements for practices that will help State DOTs and FHWA 
address these challenges.
    State DOTs are required to develop and implement asset management 
plans for the NHS to improve or preserve the condition of the assets 
and the performance of the NHS relating to physical assets. 23 U.S.C. 
119(e)(1). State asset management plans must include strategies leading 
to a program of projects that would: (1) Make progress toward 
achievement of the State targets for asset condition and performance of 
the NHS in accordance with 23 U.S.C. 150(d), and (2) support progress 
toward the achievement of the national goals identified in 23 U.S.C. 
150(b). 23 U.S.C. 119(e)(2).
    State DOTs' asset management plans must include a minimum scope 
(i.e., the NHS) and certain minimum contents (e.g., a financial plan) 
(see 23 U.S.C. 119(e)(4)). However, FHWA encourages State DOTs to 
exceed the minimum plan scope and contents because asset management 
plans can help State DOTs make better data-driven investment decisions 
on a statewide basis. For example, all State DOTs, at a minimum, would 
develop an asset management plan for the NHS regardless of ownership; 
but, State DOTs may choose to go beyond that minimum and include other 
public roads within their asset management plans at their option. Also, 
State DOTs must include, at a minimum, a summary listing of the 
pavement and bridge assets on the NHS; however, State DOTs would be 
encouraged, but not required, to include all highway infrastructure 
assets within the right-of-way (ROW).
    Under the proposed rule, the State DOT would be required to include 
measures and targets for all assets included in the asset management 
plan. Performance measures can be used for a number of purposes in 
asset management. For example, an agency may use performance measures 
to evaluate a range of potential solutions to a transportation need, to 
track the impacts of investments, and to provide accountability to the 
public. Performance measures are an integral part of a data-driven, 
performance-based approach to asset management. Agencies develop 
targets related to their performance measures to guide their resource 
allocation and program delivery. Targets may represent the desired 
future in a relatively long-term context, taking into account existing 
baseline conditions, budget constraints, and longer-term goals. 
Alternatively, agencies may use targets to measure the interim progress 
on a measure, in a relatively short-term context, as agencies implement 
their transportation program. For NHS pavement and bridge assets, which 
the State is required to include in its asset management plan, the 
State DOT's plan would include the national measures for bridge and 
pavement condition established by FHWA (see FHWA's related NPRM on 
Performance Management Measures for Bridges and Pavement, RIN 2125-
AF53), and the targets the State DOT develops for those measures. Those 
measures and targets will be established pursuant to requirements under 
23 U.S.C. 150(c) and (d). If a State DOT has pre-existing measures and 
targets for pavements and bridges on the NHS and wishes to continue to 
include those in its plan as part of its asset management effort, it 
may do so. However, those pre-existing measures and targets cannot and 
will not substitute for the national measures under 23 U.S.C. 150(c) or 
the required section 150(d) State targets for those national measures 
either in the required asset management plan or other provisions under 
title 23. For any additional assets the State DOT decides to include in 
its asset management plan, the State DOT would develop its own measures 
and targets.
    These proposed regulations would ensure that State DOTs establish 
and follow a set of processes to identify the investment strategies 
included in the asset management plans. These processes relate to 
performing analyses at the program level, including performance gap 
analysis, life-cycle cost analysis, and risk analysis. The intention is 
all State DOTs will use asset management to undertake a strategic and 
systematic process of effectively operating, maintaining, upgrading, 
and expanding physical assets throughout their life cycles in order to 
achieve and sustain a desired state of good repair. The goal is better 
decisionmaking that is based upon quality information and well-defined 
objectives, and considers risks to the assets and system performance as 
part of the decisionmaking process.
    In addition to the asset management plan process required under 23 
U.S.C. 119(e)(8), this proposed rule addresses other requirements 
established in 23 U.S.C. 150 and in section 1315(b) of MAP-21. This 
proposed rule would define the minimum standards that States would use 
in developing and operating highway bridge and pavement management 
systems required under 23 U.S.C. 150(c)(3)(A)(i). This proposed rule 
would require States to address the requirements in MAP-21 section 
1315(b) by conducting evaluations to determine if reasonable 
alternatives exist to roads, highways, or bridges that repeatedly 
require repair and reconstruction activities from emergency events. The 
proposed rule would require States to take these evaluations into 
account in their asset management plans to the extent those assets are 
included in the asset management plan.

II. Summary of the Major Provisions of the Regulatory Action in 
Question

    Section 515.001 would clarify that the purposes of the proposed 
rule are to: (1) Establish the processes that a State DOT would be 
required to use to develop its asset management plan, as required under 
23 U.S.C. 119(e); (2) establish the minimum content requirements that 
apply to the development of an asset management plan; (3) set forth the 
minimum standards for a State DOT to use in developing and operating 
bridge and pavement management systems as required under 23 U.S.C. 
150(c)(3)(A)(i); (4) describe the statutory penalties for a State DOT's 
failure to develop and implement an asset management plan in accordance 
with 23 U.S.C. 119 and the requirements established through this 
rulemaking; and (5) establish the requirements for State DOTs to 
conduct periodic evaluations to determine if reasonable alternatives 
exist to roads,

[[Page 9233]]

highways, or bridges that repeatedly require repair and reconstruction 
activities due to emergency events.
    Section 515.003 specifies that the proposed rule would be 
applicable to all State DOTs.
    Section 515.005 includes definitions for certain terms that would 
be applicable to the proposed regulations. With respect to the 
definition of asset management, the proposed rule uses the definition 
of this term found at 23 U.S.C. 101(a)(2).
    Section 515.007 proposes the processes that State DOTs would be 
required to use in developing their asset management plans. These 
processes align with the minimum content elements that the statute (23 
U.S.C. 119) requires to be included in the asset management plan, and 
also align with the contents the proposed rule would require in asset 
management plans under section 515.009. These processes take a broad 
look at the NHS as a network.
    Under the proposed section 515.007, State DOTs would use the 
following processes to develop their asset management plans:
    First, each State DOT would be required to establish a process for 
conducting a performance gap analysis and to identify strategies to 
close gaps. A performance gap analysis identifies deficiencies that may 
be hindering achievement of the State DOT's targets for asset condition 
and the State's desired system performance as it relates to physical 
assets on the NHS. As previously indicated, if the State DOT chooses to 
include other public roads or assets in the asset management plan, then 
the State DOT would be required to conduct a performance gap analysis 
for those other roads and assets as well.
    Second, each State DOT would be required to establish a process for 
conducting life-cycle cost analysis for an asset class or asset sub-
groups at the network level. Life cycle cost analysis is used to 
develop a strategic treatment plan for the whole life of assets. The 
strategic treatment plan considers application of all possible 
treatments during the asset's life (i.e. preservation, rehabilitation, 
and reconstruction along with routine and corrective maintenance). This 
strategic treatment plan is used not only to make the assets 
serviceable, but to extend the service life of assets beyond their 
design life. This approach produces cost savings, a benefit of asset 
management. For purposes of this rule, ``life-cycle cost analysis'' 
would be defined as the cost of managing an asset class or asset sub-
group for its whole life, from initial construction to the end of its 
service life.\1\ A ``life-cycle cost analysis'' would mean a process to 
estimate the cost of managing an asset class, or asset sub-group over 
its whole life with consideration for minimizing cost while preserving 
or improving the condition.
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    \1\ The FHWA interprets ``life-cycle cost analysis,'' as used in 
23 U.S.C. 119(e)(4)(D), as intended to be consistent with life-cycle 
planning and life-cycle cost analysis as used in asset management. 
The definition proposed in this rulemaking is not intended to be the 
same as the definition in 23 U.S.C. 106(f), which focuses on life-
cycle cost analysis in design.
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    Third, to ensure the asset management plan is risk-based, as 
required by 23 U.S.C. 119(e)(1), each State DOT would be required to 
establish a process for undertaking a risk management analysis for 
assets in the plan. As part of this process, State DOTs would identify 
and assess risks (e.g., extreme weather) that can affect asset 
condition or the effectiveness of the NHS as it relates to physical 
assets. The process for risk management analysis would have to include 
addressing the risks to assets and to the highway system associated 
with current and future environmental conditions, including extreme 
weather events, climate change, and seismic activity, in order to 
provide information for decisions about how to minimize their impacts 
and increase asset and system resiliency. The process for risk 
management analysis also would be required to take into account, for 
assets in the plan, the results of the State DOT's evaluation of roads, 
highways, and bridges that have repeatedly required repair or 
reconstruction due to emergency events, as proposed in section 515.019 
of this rule. For assets in the asset management plan, State DOTs would 
be required to develop an approach to address and monitor high-priority 
risks to assets and the performance of the system.
    Fourth, each State DOT would be required to establish a process for 
developing a financial plan covering a 10-year period. The process 
would include a method to determine estimated costs of expected future 
work and estimated available funding.
    Fifth, each State DOT would be required to establish a process for 
developing investment strategies to improve or preserve the condition 
of the assets and the performance of the NHS, and leading to a program 
of projects that would make progress toward achievement of the State 
targets for asset condition and performance of the NHS established 
pursuant to 23 U.S.C. 150(d) and supporting the progress toward 
achievement of the national goals identified in 23 U.S.C. 150(b). 23 
U.S.C. 119(e)(1)-(2).
    Finally, each State DOT would be required to use pavement and 
bridge management systems to analyze the condition of Interstate 
highway pavements, non-Interstate NHS pavements and NHS bridges, and to 
determine optimal management and investment strategies. Pavement and 
bridge management systems can support an agency's asset management 
practices by supporting the development of strategic performance 
objectives for the pavement and bridge assets and related highway 
systems. There are three major components to pavement and bridge 
management systems. Those are a system to regularly collect condition 
data; a computer database to sort and store the data; and an analysis 
program to evaluate repair, preservation, maintenance, and other 
management strategies and identify cost effective project options. 
State DOTs typically use commercially available software for the 
database and analysis components. State DOTs will be required to 
operate these systems under 23 U.S.C. 150(c)(3)(A)(i). The FHWA also 
proposes the minimum standards each State DOT would need to meet in 
developing these management systems. These minimum standards would 
govern collecting, processing, storing, and updating data; forecasting 
deterioration; comparing cost benefit for alternative work types; 
identifying short and long range budget needs; determining optimal 
strategies on identified potential projects to manage pavements and 
bridges; and recommending programs and schedules for implementation.
    Section 515.009 proposes the minimum content requirements that 
would be applicable to State DOT asset management plans. The proposed 
content of the plans, described below, would be derived largely from 
the application of the processes FHWA proposes under section 515.007.
    First, this section of the proposed rule would describe the 
requirement for the State DOT to develop and implement an asset 
management plan to achieve and sustain a state of good repair over the 
life cycle of the assets, and to improve or preserve the condition of 
the NHS in accordance with 23 U.S.C. 119(e)(1)-(2). Pursuant to 23 
U.S.C. 119(e)(4)(A), the State DOT would be required to include NHS 
highway pavements and bridges regardless of the ownership of the 
relevant NHS facility. The State DOT would be encouraged, but not 
required, to include in its asset management plan all other highway 
infrastructure assets within the NHS ROW, as well as

[[Page 9234]]

highway infrastructure assets from other public roads.
    Second, each State DOT would be required, at a minimum, to include 
the following information in its asset management plan:
    <bullet> Asset management objectives, which should align with the 
agency's mission. The objectives must be consistent with the purpose of 
asset management, which is to achieve and sustain a desired state of 
good repair over the life cycle of the assets at a minimum practicable 
cost.
    <bullet> Measures and targets designed to achieve and sustain a 
desired state of good repair over the life cycle of the assets at 
minimum practicable cost. This would include, at a minimum, the 
national measures that address the condition of pavements on the 
Interstate System, the condition of pavements on the NHS (excluding the 
Interstate), and the condition of bridges on the NHS. The FHWA will 
establish the national measures, pursuant to 23 U.S.C. 
150(c)(3)(A)(ii)(I)-(III), in new regulations at 23 CFR part 490.\2\ 
The State DOT also must include the targets the State DOT establishes 
pursuant to 23 U.S.C. 150(d) for the required national measures (State 
DOTs would report on the required targets as provided in 23 CFR part 
490, once promulgated). Under the proposed rule, the State DOT would 
have the option of including other NHS assets and non-NHS assets in its 
plan. If the State does so, it would have to establish measures and 
targets for those assets. In addition, the State DOT may use other 
measures and targets for NHS pavements and bridges that the State DOT 
has established through pre-existing or new asset management efforts. 
However, such other measures and targets for pavements and bridges on 
the NHS cannot and will not substitute for the required national 
measures and related State targets either in the required asset 
management plan or under other provisions of title 23. All requirements 
of this part would apply to all assets, measures, and targets in a 
State DOT's asset management plan.
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    \2\ The proposed rule, ``National Performance Management 
Measures; Assessing Pavement Condition for the National Highway 
Performance Program and Bridge Condition for the National Highway 
Performance Program'' (RIN 2125-AF53), is available on the docket 
for review.
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    <bullet> A summary listing of the pavement and bridge assets on the 
NHS, including at a minimum a description of the condition of those 
assets for: Interstate pavement, non-Interstate NHS pavement, and NHS 
bridge assets. The FHWA proposes that each State DOT use these three 
categories in order to be consistent with the categories of performance 
measures that would be established under 23 U.S.C. 150(c)(3)(A)(ii). 
These requirements would apply regardless of what entity owns the NHS 
asset.
    <bullet> Performance gap identification developed using the process 
the State DOT adopts pursuant to section 515.007.
    <bullet> Life-cycle cost analysis developed using the process the 
State DOT adopts pursuant to section 515.007.
    <bullet> Risk management analysis for assets and the highway 
network included in the plan, and including for those assets a summary 
of the results of the MAP-21 section 1315(b) statewide periodic 
evaluations; financial plan; and investment strategies. This analysis 
is developed using the process the State DOT adopts pursuant to section 
515.007.
    Third, asset management plans would be required to cover a minimum 
10-year period. The FHWA proposes this time period because MAP-21 calls 
for asset management plans to evaluate investment options on a life-
cycle basis. If the time period covered by the plan is too short, it 
likely will result in the adoption of short-term solutions that may not 
be truly cost-effective. If the time period is too long, the State DOT 
may have little certainty about financial resources available in the 
later years of the plan. This would hinder the usefulness of the plan 
as a realistic guide for investment decisions. The proposed 10-year 
period is consistent with feedback received during the outreach 
activities carried out in anticipation of this rulemaking.
    Fourth, each State DOT would be required to discuss in its asset 
management plan a set of investment strategies leading to an immediate 
program of projects, as described in 23 U.S.C. 119(e)(2). The State DOT 
should include projects consistent with its investment strategies in 
its Statewide Transportation Improvement Program (STIP), and select 
projects from the STIP to support its efforts to achieve the State's 
targets for asset condition and performance of the NHS.
    Finally, FHWA proposes to require each State DOT to make its asset 
management plan available to the public, and encourages the State DOTs 
to do so in a format that is easily accessible.
    Section 515.011 proposes a process that would enable a State DOT to 
phase in the development of its asset management plan. The FHWA 
recognizes that a phase-in approach would help give State DOTs adequate 
time to develop and apply the analytical processes required under 
proposed section 515.007. The phase-in approach also takes into 
consideration the likely timing of the performance management 
rulemaking proceedings for pavement and bridge conditions under 23 
U.S.C. 150 (RIN 2125-AF53). The proposed phase-in would permit a State 
DOT to submit its initial asset management plan using best available 
information in each required analysis area, omit certain analyses, and 
exclude the 23 U.S.C. 150(c) measures and the related State DOT section 
150(d) targets. However, the State DOT would be required to include in 
its initial plan a description of the asset management plan development 
processes the State DOT proposes to use pursuant to section 515.007. 
Inclusion of the proposed processes in the initial plan will permit 
FHWA to use the initial plan to review and certify the State DOT's 
processes as required by 23 U.S.C. 119(e)(6). The proposed rule also 
would require the State DOT to include in its initial plan its own 
measures and targets for assets covered by the plan. Under the proposed 
rule, not later than 18 months after the effective date of the final 
rulemaking for pavement and bridge condition measures pursuant to 23 
U.S.C. 150, State DOTs would have to amend their asset management plans 
to incorporate complete analyses carried out using certified processes 
and the section 150 measures and targets. Under the proposed rule, FHWA 
could extend the 18-month deadline for submitting an amended plan as 
needed to provide 12 months between the time FHWA certifies the State 
DOT's processes under 23 U.S.C. 119(e)(6)(A) and the date the amended 
plan is due. The FHWA could grant the extension only if it determines 
the State DOT's initial plan meets the requirements of proposed section 
515.011.
    Section 515.013 proposes the process by which a State DOT would 
submit its asset management plan development processes to FHWA for 
certification pursuant to 23 U.S.C. 119(e)(6), and its asset management 
plan for an FHWA consistency determination under section 119(e)(5).
    Section 515.015 discusses the penalties for a State DOT that does 
not develop and implement an asset management plan consistent with 23 
U.S.C. 119 and the requirements of this proposed rule.
    Section 515.017 describes how a State DOT may integrate asset 
management into its organizational mission, culture, and capabilities 
at all levels.
    Section 515.019 proposes that the State DOT conduct a periodic 
statewide evaluation not less than every 4 years of the State's 
existing roads, highways, and

[[Page 9235]]

bridges that required repair and reconstruction activities due to 
emergency events. The purpose is to determine if there are reasonable 
alternatives to any of these roads, highways, and bridges as required 
under section 1315(b) of MAP-21. The proposed rule would require State 
DOTs to complete the evaluation for assets included in the asset 
management plan not later than 2 years after the issuance of a final 
rule. The State DOT would be required to complete the evaluation of the 
rest of the affected roads, highways, and bridges in the State within 4 
years of the final rule. For facilities that are included in the asset 
management plan, State DOTs would need to include a summary of the 
results and consider the results of these evaluations in their risk 
management analyses included in the plan.

III. Costs and Benefits

    The costs and benefits were estimated for implementing the 
requirement for States to develop a risk-based asset management plan 
and to use pavement and bridge management systems that comply with the 
minimum standards proposed by this NPRM.
    Based on information obtained from nine State DOTs, the total 
nationwide costs for all States to develop their asset management plans 
and for four States \3\ to acquire and install pavement and bridge 
management systems would be $43.2 million discounted at 3 percent and 
$36.7 million discounted at 7 percent.
---------------------------------------------------------------------------

    \3\ There are currently four States that don't currently have 
pavement and bridge management systems that meet the standards of 
the proposed rule.
---------------------------------------------------------------------------

    The FHWA lacks data on the economic benefits of the practice of 
asset management as a whole. The field of asset management has only 
become common in the past decade and case studies of economic benefits 
from overall asset management have not been published. We specifically 
request that commenters submit data on the quantitative benefits of 
asset management and reference any studies focusing on the economic 
benefits of overall asset management.
    While FHWA lacks data on the overall benefits of asset management, 
there are examples of the economic savings that result from the most 
typical component sub-sets of asset management, pavement and bridge 
management systems. Using an Iowa DOT study \4\ as an example of the 
potential benefits of applying a long-term asset management approach 
using a pavement management system, the costs of developing the asset 
management plans and acquiring pavement management systems were 
compared to determine if the benefits of the proposed rule would exceed 
the costs. The FHWA estimates the total benefits for the 50 States, the 
District of Columbia, and Puerto Rico of utilizing pavement management 
systems and developing asset management plans to be $453.5 million 
discounted at 3 percent and $340.6 million discounted at 7 percent.
---------------------------------------------------------------------------

    \4\ Smadi, Omar, Quantifying the Benefits of Pavement 
Management, a paper from the 6th International Conference on 
Managing Pavements, 2004.
---------------------------------------------------------------------------

    Based on the benefits derived from the Iowa DOT study and the 
estimated costs of asset management plans and acquiring pavement 
management systems, the ratio of benefits to costs would be 10.5 at a 3 
percent discount rate and 9.3 at a 7 percent discount rate. The 
estimated benefits do not include the potential benefits resulting from 
savings in bridge programs. The benefits for States already practicing 
good asset management decisionmaking using their pavement management 
systems will be lower, as will the costs. If the requirement to develop 
asset management plans only marginally influences decisions on how to 
manage the assets, benefits are expected to exceed costs. The FHWA 
requests comments on these estimates.

------------------------------------------------------------------------
                                     Discounted at  3   Discounted at  7
                                         percent            percent
------------------------------------------------------------------------
Total Benefits for 52 States......       $453,517,289       $340,580,916
Total Cost for 52 States..........        $43,159,635        $36,701,377
Benefit Cost Ratio................               10.5                9.3
------------------------------------------------------------------------

Background

Asset Management in General
    Historically, construction and expansion of roads, bridges, and 
other transportation infrastructure in the United States have been a 
central focus of transportation agencies. Highway infrastructure 
development peaked with the construction of the Interstate Highway 
System. Today, significant portions of our highway assets are 
deteriorating because of increased usage, environmental impacts, and 
aging. As a result, it is becoming increasingly necessary to focus on 
meeting the demands of maintenance, preservation, and reconstruction of 
existing infrastructure. As State DOTs and other public sector owners 
of highway infrastructure are faced with increased system and budgetary 
needs at a time when resources are limited, asset management is 
critical now more than ever.
    In recent years, most transportation agencies have experienced 
reduced funding coupled with a loss of purchasing power. In addition, 
the fact that the transportation system is aging and becoming more 
costly to maintain has become a great concern. Federal, State, and 
local governments are under increasing pressure to balance their 
budgets and, at the same time, respond to public demands for quality 
services. Along with the need to invest in America's future, this 
leaves transportation agencies with the task of managing the current 
transportation systems as cost-effectively as possible, while managing 
potential risks to system performance.
    The Asset Management Plan requirement included in MAP-21 is in line 
with international best practices that were initiated abroad as the 
public sector in many countries experienced a reduction in resources 
available to maintain their assets in a state-of-good-repair. States in 
the U.S. have incorporated some elements of the asset management 
framework. However, despite the obvious benefits stemming from the use 
of an asset management framework, it has not yet been adopted by all 
States. The FHWA believes the disconnect results from States' current 
practices. As an example, in many State DOTs the pavement management 
analysis is done at the State DOT's central office. The output is then 
forwarded to the district/regional offices that make the final 
decisions and have a lot of flexibility in what projects to take on. As 
a result, the projects are selected by field personnel whose expertise 
is in addressing immediate needs. The concept of project selection

[[Page 9236]]

based on an asset life cycle is unknown to many of them. Another major 
factor that results in some district/regional offices deviating from 
the recommendations made by the pavement management system is the lack 
of confidence in the quality of pavement data used in the analysis. An 
additional issue is the general resistance to changing from a worst-
first approach to a life-cycle cost approach. Asset management is a 
business process and a decisionmaking framework for achieving and 
sustaining a desired state of good repair over the life cycle of the 
assets at minimum practicable cost. Asset management uses an extended 
time horizon, draws from economics, as well as engineering analyses, 
and considers a broad range of assets. An asset management approach 
also incorporates the economic assessment of trade-offs between 
alternative investment options, both at the project level and at the 
network or system level, and helps transportation agencies make cost-
effective investment decisions. In addition, asset management helps 
ensure that the transportation system is financially sustainable. Asset 
management increases infrastructure resiliency against natural hazards 
(such as extreme weather events or seismic activities) and reduces or 
eliminates the impacts of potential threats to asset and system 
performance. A key feature of asset management is that it requires a 
statement of explicit, clearly defined goals that reflect customer 
expectations and considerations unique to each State DOT. These goals 
often address system performance and condition targets designed to 
achieve a state of good repair.
    All State DOTs currently manage their transportation network along 
with its assets; however, few apply risk-based asset management 
principles in their investment decisionmaking processes. For example, 
although most States conduct risk analyses at the project level, risk 
assessment and management at the program level is often a missing 
component of current management practices. Congress has recognized the 
importance of risk analysis in asset management by expressly requiring 
the State asset management plan to be risk-based. 23 U.S.C. 119(e)(1). 
State DOTs must carefully analyze the impact on the long-term 
performance of the highway network when making decisions regarding 
funding distribution, especially when funding is reduced for one 
program and diverted to meet the pressing needs of another program. The 
impact of these tradeoffs could become very costly if appropriate 
analyses are not conducted prior to decisionmaking.
    Although risk-based asset management is a relatively new concept to 
transportation agencies, most State DOTs have many of the elements 
necessary to initiate asset management, including pavement and bridge 
management systems that monitor conditions, measure performance, 
predict trends, and recommend candidate projects and preservation 
treatments. Asset management brings a particular perspective to how an 
agency conducts its existing planning and programming procedures and 
reaches decisions. It suggests principles and techniques to apply in 
policymaking, planning, project selection, program tradeoffs, program 
delivery, data gathering, and management system application. Most 
importantly, it uses an effective communication tool--the asset 
management plan--to document how decisions regarding investment 
strategies are made, what actions are taken to improve or preserve the 
condition of the assets and system performance, how risks to system 
performance are managed, and how the costs of maintaining assets 
throughout their lives are considered. For State DOTs, development of a 
risk-based asset management plan will facilitate the communication 
between decisionmakers and stakeholders and assure the public that 
appropriate steps are taken when making transportation investment 
decisions.
DOT Outreach Efforts
    In developing these proposed regulations, FHWA conducted Web 
conferences, face-to-face meetings, made presentations at national 
conferences, and held teleconferences with stakeholders, including 
State DOTs. These sessions were intended to provide opportunities for 
stakeholders to discuss experiences, potential strategies for 
developing and implementing risk-based asset management within the 
context of MAP-21, and concerns with the MAP-21 asset management 
requirements. In general, these consultations included:

--Web conference on September 28, 2012, with the American Association 
of State Highway and Transportation Officials (AASHTO) Subcommittee on 
Asset Management;
--Web conference on October 17, 2012, with representatives from the 
AASHTO Standing Committee on Planning and representatives from the 
Standing Committee on Highways;
--Face-to-face meeting in Pittsburgh, PA on November 17, 2012, with the 
AASHTO Subcommittee on Asset Management;
--Web conference on October 25, 2012, with the Asset Management Expert 
Task Group; and
--Presentations that included information on the MAP-21 Asset 
Management requirements were held at the following events:
[cir] National Pavement Preservation Conference, Nashville, TN, August 
2012;
[cir] International Forum on Traffic Records, Biloxi, MS, October 2012; 
and
[cir] Transportation Research Board Meeting, Bridge Management 
Committee, January 2013.

    At each of these outreach sessions, some participants expressed 
that States be provided with flexibility in the development of their 
asset management plans so that they can properly address any issues 
that are unique to their State. The burden associated with developing a 
risk-based asset management plan (e.g., potential organizational 
restructuring, modification of decisionmaking processes, documentation 
of processes, and increases in staffing) was another concern. In 
addition, there were questions about the inclusion or exclusion of 
highways that are on the NHS, but maintained by municipalities or 
turnpike authorities.
General Discussion of the Proposal
    This proposal is intended to implement 23 U.S.C. 119(e)(8), which 
requires the Secretary to establish, by regulation, the process States 
must use to develop their asset management plans. The proposed 
regulations would ensure that State DOTs follow a set of processes to 
identify the investment strategies included in the asset management 
plan. These processes relate to performing analyses at the program 
level including performance gap analysis, life-cycle cost analysis, and 
risk analysis. The intention is that investment strategies included in 
the asset management plans are developed based on a thorough assessment 
of the NHS infrastructure operation, preservation, and improvement 
needs, while minimizing the whole life costs of assets and 
understanding the potential risks to system performance. While the best 
practice is to perform inclusive gap and risk analyses encompassing all 
the national performance goal areas for the NHS (see 23 U.S.C. 150(b)), 
for the purpose of asset management plan development pursuant to 23 
U.S.C. 119, the focus of these analyses should be on determining 
deficiencies and risks to physical asset conditions and system

[[Page 9237]]

performance as it relates to physical assets.
Link to Performance Management
    The overarching purpose of asset management is to achieve a desired 
state of good repair over the life cycle of assets at a minimum 
practicable cost. Development and implementation of a State asset 
management plan for NHS pavements and bridges is an important part of 
NHS performance management as envisioned in MAP-21. In 23 U.S.C. 
119(e)(2), Congress provides that a State asset management plan shall 
include strategies leading to a program of projects that would make 
progress toward achievement of the State targets for asset condition 
and performance of the NHS in accordance with 23 U.S.C. 150(d), and 
supporting the progress toward the achievement of the national goals 
identified in 23 U.S.C. 150(b). Section 119(b)(3) specifies that the 
purpose of the National Highway Performance Program (NHPP) ``. . . 
shall be . . . to ensure that investments of Federal-aid funds in 
highway construction are directed to support progress toward the 
achievement of performance targets established in an asset management 
plan of a State for the National Highway System.'' Accordingly, the 
asset management plan developed pursuant to 23 U.S.C. 119(e) will serve 
as both a resource and a ``road map'' for the State's efforts to 
achieve and sustain a state of good repair over the life cycle of the 
assets, and to make progress toward those national goals and the 
State's targets for pavement and bridge condition established pursuant 
to 23 U.S.C. 150.\5\
---------------------------------------------------------------------------

    \5\ In addition to these national measures for pavement and 
bridge conditions under section 150(c)(3)(ii)(I)-(III), FHWA will 
establish performance measures for the performance of the Interstate 
System and the performance of the NHS (excluding the Interstate 
System) as required by 23 U.S.C. 150(c)(3)(ii)(IV)-(V). The FHWA 
will propose the national measures as part of separate rulemakings 
pursuant to section 150 (RIN 2125-AF54 and RIN 2125-AF53).
---------------------------------------------------------------------------

    The FHWA recognizes that many State DOTs already use management 
systems as a critical element in their investment decisionmaking 
process. Those systems have been developed and refined, in many cases 
over a long period of time, through the State DOT's continuing 
evaluation of the effectiveness of investment strategies in improving 
infrastructure conditions. The FHWA also recognizes that the measures 
used in these legacy systems for pavement and bridge conditions may not 
be identical to the national measures FHWA establishes under 23 U.S.C. 
150(c). Considering this possibility, FHWA expects State DOTs will 
choose, and in some cases may be required by State law, to continue to 
use their legacy systems to assess infrastructure conditions and to 
develop strategies that will drive their investment decisionmaking. 
Accordingly, FHWA is proposing to permit State DOTs to include their 
pre-existing measures and targets for NHS pavement and bridge condition 
and performance in their plans even after the section 150 measures and 
targets are established, so long as those non-section 150 measures and 
targets are treated as supplemental to the section 150 measures and 
targets. Non-section 150 measures and targets cannot substitute for 
section 150 national measures and associated State DOT targets under 23 
U.S.C. 150(d). The State DOTs will be held accountable for including 
section 150 measures and targets in their plans and meeting title 23 
requirements relating to those section 150 measures and targets. 
However, a State DOT asset management plan's investment strategies may 
be influenced by both the section 150 measures and targets and any 
other measures and targets the State DOT includes in its asset 
management plan.
    The FHWA expects State DOTs with legacy systems will make the 
changes needed to fully use and support the new national measures and 
targets once established pursuant to 23 U.S.C. 150. The FHWA 
understands and appreciates the amount of work required to make these 
changes. The FHWA is committed to providing technical assistance to 
State DOTs as they work to improve their ability to reliably predict 
how their investments can lead to pavement and bridge condition 
improvements as defined using the new national measures.
Implementation
    The FHWA is proposing special phase-in provisions as a part of this 
rulemaking. The proposed rule would provide a phase-in for both the 
asset management plans and the MAP-21 section 1315(b) evaluations of 
roads, highways, and bridges that repeatedly required repair and 
reconstruction activities. As the expected timelines for completing 
this rulemaking and the 23 U.S.C. 150 rulemaking become more certain, 
FHWA will be able to better predict how the timing of each rulemaking 
affects the other. The FHWA may revise the proposed phase-in approaches 
to address any timing or other issues resulting from the ultimate 
timelines and requirements in final rules implementing sections 119 and 
150.
    The proposed phase-in for section 119 asset management plans would 
permit a State DOT to submit its initial asset management plan using 
best available information for each required plan element, and to omit 
certain analyses. In addition, the State DOT would be permitted to 
submit its initial plan without the 23 U.S.C. 150 measures and targets 
unless the State DOT had established its section 150(d) targets for 
pavement and bridge conditions at least 6 months before the section 
515.013(a) deadline in this proposed rule for submitting the initial 
asset management plan. The State DOT's initial asset management plan 
would have to include its proposed processes for each required area of 
analysis in proposed section 515.007, and otherwise meet the 
requirements in proposed section 515.009, including the identification 
of investment strategies that support progress toward the national 
goals in 23 U.S.C. 150(b).
    Not later than 18 months after the effective date of the final 
rulemaking for pavement and bridge condition measures pursuant to 23 
U.S.C. 150, a State DOT that used the phase-in option for its initial 
plan submission would be required to submit an amended plan that 
includes all section 515.007 analyses performed using FHWA-certified 
processes. That amended plan also would have to include the State DOT's 
section 150 measures and targets for NHS pavements and bridges. Under 
the proposed rule, FHWA could extend the 18-month time period as needed 
to provide 12 months between the time FHWA certifies the State DOT's 
processes under 23 U.S.C. 119(e)(6)(A) and the date the amended plan is 
due. The FHWA could grant the extension only if it determines the State 
DOT's initial plan meets the requirements of section 515.011 of this 
proposed rule.
    The FHWA considered a number of factors in developing the phase-in 
proposal for asset management plans. First, the proposal responds to 
the challenges some State DOTs will face in developing and applying the 
processes described in proposed section 515.007. Both State DOTs with 
legacy asset management planning systems and State DOTs new to asset 
management may face time and resource challenges due to the need to 
develop and apply new or modified processes.
    Second, the phase-in approach is needed to address timing and 
coordination issues inherent in the process certification and 
consistency determination provisions of 23 U.S.C. 119. With respect to 
process certification, FHWA proposes to use the State DOT's initial 
asset management plan as the basis for the certification of the State 
DOT's asset management plan

[[Page 9238]]

development processes under section 119(e)(6)(A). Permitting State DOTs 
to submit their initial asset management plans using best available 
information for each required plan element would allow State DOTs to 
obtain FHWA-certification of their plan development processes before 
they undertake analyses using the processes.
    There also is a potential implementation issue with regard to FHWA 
consistency determinations under 23 U.S.C. 119(e)(5). The issue relates 
to the availability of the 23 U.S.C. 150 national performance measures 
and the related targets that State DOTs must include in their asset 
management plans. Investment strategies in an asset management plan, 
and the underlying analytical work such as performance gap analysis, 
are highly affected by the selected performance targets. There is a 
substantial probability that the FHWA performance management rulemaking 
under 23 U.S.C. 150, and the subsequent State DOT target-setting under 
section 150(d)(1), will not be completed in time for the State DOTs to 
include their section 150(d) targets in a fully developed asset 
management plan prior to the first required FHWA consistency 
determination. The first determination is required for the second 
fiscal year after this rule is final. Absent this consistency 
determination, the Federal share on the State DOT's NHPP projects would 
be reduced to 65 percent. The consistency determination also 
demonstrates the State DOT has an ``approved plan'' under the NHPP 
obligation transition provision in MAP-21 section 1106(b).
    The phase-in proposal would permit FHWA to determine the State 
DOT's initial plan is consistent with 23 U.S.C. 119 and the final rule 
if it satisfies the plan requirements in proposed section 515.011. The 
State DOTs would have up to 18 months after the effective date of the 
final rulemaking for pavement and bridge condition measures pursuant to 
23 U.S.C. 150 to amend their asset management plans to include the 
section 150 measures and the targets the State DOTs establish for those 
measures, and to include analyses prepared using FHWA-certified 
processes. The FHWA could extend the amendment deadline for up to 12 
months to ensure the State DOT has a reasonable amount of time after 
FHWA certifies the State DOT's processes to complete the required 
analyses and incorporate the section 150 measures and targets into its 
plan. This 18-month period is consistent with the 18-month deadline in 
the MAP-21 section 1106(b)(1) transition provision governing 
obligations of NHPP funds in the absence of an approved asset 
management plan and 23 U.S.C. 150(d) targets. The extension proposal is 
consistent with the transition provision's extension authority in MAP-
21 section 1106(b)(2).
    It may be helpful to give an example to illustrate how the timing 
of the proposed asset management plan phase-in would work. If the final 
rule on asset management were issued on January 15, 2015, then--
    (1) State DOTs would have to submit their initial asset management 
plans not later than January 15, 2016.
    (2) Not later than April 14, 2016, the FHWA would notify a State 
DOT whether FHWA certifies the State DOT's processes.
    (3) The reduced Federal share provision would be effective on 
October 1, 2016 (beginning of the second fiscal year after the rule is 
final), so the first consistency review required under 23 U.S.C. 
119(e)(2) would occur on August 31, 2016. Unless the State DOT 
submitted an amended plan prior to that date, FHWA would base the first 
consistency determination on the State DOT's initial asset management 
plan.
    (4) If the State DOT used the phase-in provision proposed in 
section 515.011 to submit an initial plan, the State DOT would be 
required to submit a plan with all required analyses and other 
elements, including 23 U.S.C. 150 measures and targets for pavement and 
bridges not later than 18 months after the effective date of the final 
rulemaking for pavement and bridge condition measures pursuant to 23 
U.S.C. 150. The FHWA could extend the 18-month time period as needed to 
provide 12 months between the time FHWA certifies the State DOT's 
processes under 23 U.S.C. 119(e)(6)(A) and the date the amended plan is 
due. The FHWA could grant the extension only if it determines the State 
DOT's initial plan meets the requirements of proposed section 515.011. 
Thus, if the effective date of the section 150 rule on pavement and 
bridge measures is April 15, 2015, the 18-month period would end on 
October 15, 2016. However, under this timing example, if the 
certification of the State DOT's processes occurred on April 14, 2016, 
and the State DOT's initial plan met section 515.011 requirements, FHWA 
could extend the due date for an amended plan to April 14, 2017, to 
permit the State DOT to incorporate section 150 measures and targets 
and complete the required analyses using FHWA-certified processes.
    For the section 1315(b) evaluation, FHWA proposes a phase in that 
would require State DOTs to complete the evaluation of assets included 
in the State DOT's asset management plan within 2 years after the 
effective date of a final rule. The State DOT would have to complete 
the evaluation for the rest of the affects roads, highways, and bridges 
not later than 4 years after the effective date of the final rule. This 
phase-in approach would permit State DOTs to focus their resources 
first on completing the section 1315(b) evaluation for assets they 
include in their asset management plans. The FHWA believes this 
approach is consistent with the emphasis Congress placed on the 
condition and performance of the NHS in MAP-21.
    The FHWA specifically requests comments on whether these proposed 
phase-in approaches are desirable and workable.
Section-by-Section Discussion of the Proposal
Section 515.001 Purpose
    This section is included to clarify that the purpose of the 
proposed regulations is to: (1) Establish the processes that a State 
DOT would use to develop its asset management plan, as required under 
23 U.S.C. 119(e)(8); (2) establish the minimum content requirements 
that would apply to the development of an asset management plan; (3) 
set forth the minimum standards a State DOT would use in developing and 
operating bridge and pavement management systems as required under 23 
U.S.C. 150(c)(3)(A)(i); (4) describe the statutory penalties for a 
State DOT's failure to develop and implement an asset management plan 
in accordance with 23 U.S.C. 119 and the requirements established by 
this rulemaking; and (5) establish that State DOTs would be required to 
conduct periodic statewide evaluations to determine if reasonable 
alternatives exist to roads, highways, or bridges that repeatedly 
require repair and reconstruction activities due to emergency events.
Section 515.003 Applicability
    This section establishes that the proposed regulations would be 
applicable to all State DOTs.
Section 515.005 Definitions
    This section includes proposed definitions for certain terms that 
are applicable to the proposed regulations. The terms the FHWA defines 
in this section are terms that FHWA believes need a common 
understanding for the effective implementation of the regulations. The 
FHWA invites comments on these proposed definitions and suggestions for 
any additional terms that should be defined.

[[Page 9239]]

    First, the FHWA proposes to define the term asset to make clear 
what items are subject to an asset management plan. The FHWA proposes 
that it mean all physical highway infrastructure (e.g., pavements, 
highway bridges, tunnels) located within the ROW corridor of a highway.
    Second, the FHWA proposes to define the terms asset condition and 
performance of the NHS in order to help distinguish the concept of 
performance as used in this rulemaking from the concept used in 23 
U.S.C. 150(c)(3)(ii)(IV)-(V). Note that 23 U.S.C. 119(e)(2) provides 
that State asset management plans shall include strategies leading to a 
program of projects that would make progress toward achievement of the 
State targets for asset condition and performance of the NHS in 
accordance with 23 U.S.C. 150(d). It is the FHWA's intent that, for 
purposes of this proposed rule, the term condition refers to the 
physical condition of assets; whereas, the term performance refers to 
the effectiveness of the NHS in providing for the safe and efficient 
movement of people and goods where it can be affected by physical 
assets. Within this context, examples of improving the NHS performance 
may include, but are not limited to, widening along a portion of the 
NHS to alleviate congestion, improving drainage on another portion of 
the NHS to address safety concerns during rain storms, or seismic 
retrofitting bridges in areas prone to earthquakes to increase system 
resilience. The term performance for purposes of this rule is not 
intended to define performance for purposes of 23 U.S.C. 150, which 
will be defined in the related rule implementing that provision.\6\
---------------------------------------------------------------------------

    \6\ The related rule, ``National Performance Management 
Measures; Assessing Pavement Condition for the National Highway 
Performance Program and Bridge Condition for the National Highway 
Performance Program'' (RIN 2125-AF53), is available on the docket 
for review.
---------------------------------------------------------------------------

    Third, the FHWA proposes to define the term asset management as it 
is in 23 U.S.C. 101(a)(2). Under 23 U.S.C. 101(a)(2), asset management 
means a strategic and systematic process of operating, maintaining, and 
improving physical assets, with a focus on both engineering and 
economic analysis based upon quality information, to identify a 
structured sequence of maintenance, preservation, repair, 
rehabilitation, and replacement actions that will achieve and sustain a 
desired state of good repair over the life cycle of the assets at 
minimum practicable cost. For purposes of asset management, the FHWA 
interprets replacement activities to include initial construction, 
reconstruction, resurfacing, and upgrade activities.
    Fourth, the FHWA proposes to define the term asset management plan, 
which State DOTs would be required to develop under this proposed 
rulemaking. An asset management plan that is developed in accordance 
with the various contents, processes, and other requirements in these 
proposed regulations should serve the functions prescribed in this 
proposed definition. The term as used in this proposed rule refers to 
the risk-based asset management plan that is required under 23 U.S.C. 
119(e).
    Fifth, the FHWA proposes to define the term bridge to make clear 
that bridges required to be included in a State DOT's asset management 
plan under this part are those subject to the National Bridge 
Inspection Standards in 23 CFR part 650. The definition proposed here 
is the same definition as at 23 CFR 650.305.
    Sixth, the FHWA proposes to define the term investment strategy. 
This proposed definition is intended to clarify that the investment 
strategies result from evaluations of funding options and anticipated 
effects of the options on condition and performance of the physical 
assets.
    Seventh, the FHWA proposes to define the terms life-cycle cost and 
life-cycle cost analysis. The terms are intended to clarify that life 
cycle costs in the asset management context includes the costs of 
managing an asset over its whole life. The inclusion of these 
definitions in this proposed rule would make it clear that the 
definition of ``life-cycle cost analysis'' in 23 U.S.C. 106(f) would 
not apply in the asset management context.
    Eighth, the FHWA proposes to define the term performance gap as 
simply meaning the gap between actual condition and performance of the 
NHS and the desired condition and performance of the NHS.
    Ninth, the FHWA proposes to define the terms risk and risk 
management as merely referring to potential positive or negative 
effects of uncertainty or variability of events on agency objectives 
and the means by which the agency manages this uncertainty. It is the 
FHWA's belief that effective risk management helps State DOTs increase 
system resiliency against threats and capitalizes on opportunities.
    Tenth, the FHWA proposes to define the term STIP in order to ensure 
consistency with 23 CFR part 450.
    Finally, the FHWA proposes to define the term work type in order to 
refer to the range of actions a State DOT may take in managing an 
asset. The proposed definition includes actions to improve the state of 
good repair of highways and bridges, as well as to improve other 
aspects of their performance.
Section 515.007 Asset Management Plan Development Process
    This section proposes minimum processes State DOTs would be 
required to use in developing their asset management plans. This 
section also proposes standards and outcomes the State DOT plan 
development processes would have to satisfy. The State DOTs would 
include descriptions of their processes in their asset management 
plans, and those processes would be subject to FHWA certification. The 
State DOT would use the processes to produce information it needs to 
develop the full plan contents required under 23 U.S.C. 119(e)(4) and 
in this proposed rule.
    First, as required by 23 U.S.C. 119(e)(4), the FHWA proposes that 
State DOTs must establish a process for conducting performance gap 
analysis to identify deficiencies that may be hindering achievement of 
State DOTs' targets for condition and system performance as related to 
the physical assets. This process would include performance targets, 
gaps in the existing condition and desired condition of assets, gaps in 
the NHS effectiveness as it relates to the physical assets in providing 
for the safe and efficient movement of people and goods, and strategies 
to close these gaps. A State DOT would conduct a performance gap 
analysis for its NHS to meet requirements in 23 U.S.C. 119. As with the 
other required analyses under this proposed rule, if a State DOT 
chooses to include other public roads in the asset management plan, 
then the State DOT would conduct a performance gap analysis for those 
roads as well. States would develop the plan's recommended investment 
strategies based on the result of this gap analysis and other analyses 
required for the asset management plan.
    Second, as required by 23 U.S.C. 119(e)(4), the FHWA proposes that 
each State DOT establish a process for conducting life-cycle cost 
analysis for asset classes or asset sub-groups at the network level. 
The State DOT would define the network level. The FHWA proposes that 
State DOTs have the flexibility to conduct life-cycle cost analyses on 
asset classes (i.e., a group of assets with the same characteristics 
and function) or asset sub-groups (i.e., a group of assets within an 
asset class with the same characteristics and function) in recognition 
of the inherent differences in various types of assets. For example, a 
concrete pavement will

[[Page 9240]]

have a different life-cycle cost than an asphalt pavement. The proposed 
rule would allow a State DOT to propose excluding one or more asset 
sub-groups from its life-cycle cost analysis if the State DOT can 
demonstrate to FHWA the exclusion of the sub-group would have no 
material adverse effect on the development of sound investment 
strategies due to the limited number of assets in the sub-group, the 
level of cost impacts associated with managing the assets in the sub-
group, or other supportable grounds. The FHWA would consider this 
proposal as part of its certification review under 23 U.S.C. 119(e)(6). 
Life-cycle cost analysis is critical because it enables State DOTs to 
make informed decisions in developing investment strategies.
    Third, FHWA proposes that each State DOT establish a process for 
developing a risk management analysis for assets in the plan. This 
process would include identification, assessment, evaluation, and 
prioritization of risks that can affect the assets in the plan, 
including NHS condition, effectiveness, and system performance as it 
relates to operation of its physical assets. This includes addressing 
risks to those assets in the plan that are evaluated pursuant to 
section 1315(b) of MAP-21 because they have required repair and 
reconstruction activities on two or more occasions due to emergency 
events. In addition, the risk management analysis would have to include 
an approach for addressing the risks that the State DOT determines to 
be high-priority risks. Relevant risks may include risks to assets and 
the system associated with current and future environmental conditions, 
including extreme weather events, climate change, and seismic activity.
    Fourth, as required by 23 U.S.C. 119(e)(4), the FHWA proposes that 
each State DOT establish a process for developing a financial plan. The 
FHWA proposes that the financial plan would be required to identify 
annual costs over a minimum period of 10 years. In addition, the FHWA 
proposes the State DOT's process would have to produce a financial plan 
that addresses certain minimum components, including: The estimated 
cost of expected future work to implement investment strategies 
contained in the asset management plan; the estimated funding levels 
that are expected to be reasonably available to address the costs of 
future work types; identification of anticipated funding sources; and 
an estimate of the value of the agency's pavement and bridge assets and 
the needed investment to maintain the value of these assets. The 
purpose is to ensure that the adopted strategies are not only 
affordable, but that assets will be preserved and maintained with no 
risks of financial shortfall. In addition, having an estimate of asset 
value will enable agencies to predict the level of investment needed to 
ensure their systems will be financially sustainable. Also, the FHWA 
proposes that asset management plans cover a minimum period of 10 years 
to ensure that the decisionmaking process identifies investment 
strategies that advance toward a long-term physically and financially 
sustainable system.
    Fifth, as required by 23 U.S.C. 119(e)(4), the FHWA proposes that 
each State DOT establish a process for developing investment strategies 
to: (1) Achieve and sustain a state of good repair, (2) improve or 
preserve the condition of the assets and the performance of the NHS, 
and (3) lead to a program of projects that would make progress toward 
achievement of the State targets for asset condition and performance of 
the NHS in accordance with 23 U.S.C. 150(d), and support progress 
toward the achievement of the national goals identified in 23 U.S.C. 
150(b). The FHWA proposes that the State DOT's process for identifying 
investment strategies must address the following minimum components: 
Performance gap analysis required under section 515.007(a)(4); life-
cycle cost analysis for asset classes or asset sub-groups resulting 
from the process required under 515.007(a)(5); risk management analysis 
resulting from the process required under 515.007(a)(6); and 
anticipated available funding and estimated cost of expected future 
work types associated with various candidate strategies based on the 
financial plan required under 515.007(b)(7). Investment strategies are 
necessary for State DOTs to know how they will best use their available 
resources for optimal system performance.
    The FHWA proposes minimum standards each State DOT would use in 
developing and operating bridge and pavement management systems to 
analyze bridge and pavements data for the condition of Interstate 
highway pavements, non-Interstate NHS pavements, and NHS bridges. The 
use of these systems is required under 23 U.S.C. 150(c)(3)(A)(i). Also, 
Congress declared the use of bridge management systems to be in the 
vital interest of the United States in 23 U.S.C. 144(a)(2)(C). These 
standards would govern collecting, processing, storing, and updating 
data; forecasting deterioration; developing and comparing benefit-cost 
analyses for alternative work types; identifying short and long range 
budget needs; determining optimal strategies on identified potential 
projects to manage pavements and bridges; and recommending programs and 
schedules for implementation. The standards proposed by the FHWA are 
consistent with minimum standards included in the management systems 
most widely used by State DOTs. The FHWA specifically requests comments 
on whether the specified standards for bridge and pavement management 
systems are appropriate or whether any additional standards should be 
included.
    The interaction of these proposed processes and related 
requirements is illustrated by a chart which is available on the 
rulemaking docket.
    The final step in the asset management plan development process is 
the development of the plan itself. Accordingly, the FHWA proposes to 
require specifically that each State DOT develop an asset management 
plan pursuant to the prescribed processes, which includes conducting 
the necessary analyses pursuant to those processes. An asset management 
plan brings the results of these analyses together in a single plan and 
demonstrates how selection of investment strategies is influenced by 
analyses of cost effectiveness, system resiliency, financial stability, 
and desired system condition and performance. The rule proposes to 
require the head of the State DOT to approve the asset management plan.
Section 515.009 Asset Management Plan Content Requirements
    This proposed section sets forth minimum content requirements that 
would apply to a State DOT asset management plan. Under this section of 
the proposed rule, the results of the development processes proposed in 
section 515.007 would inform the strategic decisions described in the 
plan. Consistent with the definition of asset management in 23 U.S.C. 
101(a), asset management plans would describe how the State DOT will 
carry out ``a strategic and systematic process of operating, 
maintaining, and improving physical assets, with a focus on both 
engineering and economic analysis based on quality information, to 
identify a structured sequence of maintenance, preservation, repair, 
rehabilitation, and replacement actions that will achieve and sustain a 
desired state of good repair over the life cycle of the assets at 
minimum practicable cost.'' As required by 23 U.S.C. 119(e)(2), asset 
management plans would describe the State DOT's selected strategies to 
improve or preserve the condition of the

[[Page 9241]]

assets and the performance of the NHS and leading to a program of 
projects that would make progress toward achievement of the State 
targets for asset condition and performance of the NHS in accordance 
with 23 U.S.C. 150(d), and support progress toward the achievement of 
the national goals identified in 23 U.S.C. 150(b).
    Each asset management plan would address management of pavements on 
the Interstate System, pavements on the NHS (excluding the Interstate 
System), and bridges on the NHS in accordance with 23 U.S.C. 
119(e)(4)(A). As provided in 23 U.S.C. 119(e)(3), State DOTs are 
encouraged, but not required, to include all highway infrastructure 
assets within the NHS ROW in the plan. State DOTs also are encouraged 
to include the highway infrastructure assets from other public roads in 
their asset management plans and to manage such other assets consistent 
with the asset management plan. As previously noted, if a State DOT 
elects to include such other assets, all of the analysis and plan 
content requirements proposed in this rulemaking would apply. The FHWA 
seeks comment on whether States should be required to include tunnels 
in the asset management plans.
    In section 515.009, FHWA proposes the minimum contents required in 
a State DOT's asset management plan would include those required under 
23 U.S.C. 119. First, the plans would have to include the State DOT's 
asset management objectives. The objectives are to be consistent with 
the purpose of asset management, which is to achieve and sustain a 
desired state of good repair over the life cycle of the assets at a 
minimum practicable cost. An agency's objectives would set the context 
and direction for developing its asset management plan. These 
directions would be different from one agency to another, depending on 
past experience and its level of maturity in developing an asset 
management plan.
    Second, State DOT's would be required to include measures and 
targets for the assets in their plans. The measures and targets would 
be used to show progress toward improving or preserving the condition 
of the various types of assets in the plan. At a minimum, State DOTs 
would need to include the 23 U.S.C. 150(c) national measures for 
pavement and bridge condition and performance, and the associated State 
targets developed pursuant to section 150(d), in their asset management 
plans once those measures and targets are established. However, FHWA 
recognizes that many States already have asset management plans, or 
elements of it in place that use measures and targets other than those 
that will be established pursuant to section 150. Given the level of 
effort required to substantially revise such plans, FHWA believes it is 
important to provide State DOTs with some flexibility to use and adapt 
those ``legacy'' plans. Accordingly, FHWA proposes to allow State DOTs 
to include non-section 150 measures and targets for NHS bridges and 
pavements in their plans so long as such measures do not substitute for 
the section 150 measures and targets. Non-section 150 measures and 
targets may be used to supplement the section 150 measures and targets, 
but such use would not relieve the State DOT from its responsibilities 
to meet title 23 requirements relating to section 150 measures and 
targets.
    Third, the State DOTs would have to include in the plan a summary 
listing of the pavement and bridge assets, including those on the NHS, 
and a description of their condition: This includes the State DOT's 
Interstate pavement, non-Interstate NHS pavement, and NHS bridge 
assets. The FHWA proposes that State DOTs use these three categories in 
order to be consistent with the categories of condition and performance 
measures that will be established under 23 U.S.C. 150(c)(3)(A)(ii). The 
summary list would have to include a description of the condition of 
the assets in the plan. Where applicable, the description of condition 
would be informed by the results of the evaluation required under 
proposed section 515.019 of this rule. It is the State DOTs' 
responsibility to include all NHS pavements and bridge data regardless 
of NHS ownership.
    In the Transportation Planning NPRM (RIN 2125-AF52), FHWA addresses 
cooperation among multiple owners and operators for collection of NHS 
condition and performance data as part of the metropolitan planning 
agreements. However, these agreements apply to the metropolitan 
transportation planning process. The FHWA proposes that State DOTs 
develop a process for a collaborative and coordinated effort among NHS 
multiple owners within the rural areas in order to obtain the necessary 
data for development of the asset management plans. The FHWA also 
considered whether States should coordinate with Metropolitan Planning 
Organizations (MPO) on the development of the asset management plan. 
Section 134(h)(2)(D) of title 23, U.S.C., requires MPOs to integrate in 
the metropolitan transportation planning process the ``goals, 
objectives, performance measures, and targets described in other State 
transportation plans and transportation processes, as well as any plans 
developed under chapter 53 of title 49 by providers of public 
transportation, required as part of a performance-based program.'' As 
proposed in section 450.306(d)(4)(i) of the Transportation Planning 
NPRM (RIN 2125-AF52), MPOs would be required to include in the 
metropolitan planning process the asset management plan developed in 
accordance with this rulemaking. As a result, FHWA believes that State 
DOTs should coordinate with MPOs during the development of the asset 
management plan.
    Fourth, the plans would have to include the results of the analyses 
required under section 515.007. This includes performance gap 
identification, life-cycle cost analysis, risk management analysis, a 
financial plan, and investment strategies.
    The FHWA also proposes that a State DOT's asset management plan, 
for the assets in the plan, summarize the results of the evaluations 
under proposed section 515.019 to determine whether reasonable 
alternatives exist for roads, highways, or bridges that repeatedly have 
required repair and reconstruction activities following emergency 
events. As previously discussed, section 515.019 of this proposed rule 
would require States to perform those statewide evaluations to fulfill 
the mandate in section 1315(b) of MAP-21. Proposed section 515.007 also 
would require the State DOT's risk analysis discussion in the plan to 
reflect consideration of the section 1315(b) evaluations for assets 
covered by the plan.
    The FHWA proposes that asset management plans cover a minimum 
period of 10 years to ensure that the plan can support a decisionmaking 
process that identifies investment strategies that advance toward a 
long-term physically and financially sustainable system. The FHWA also 
proposes that asset management plans lead to an immediate program of 
projects in the STIP. It is the FHWA's view that a State DOT should 
select such projects from the STIP as part of its efforts to achieve 
and sustain a state of good repair, to improve or preserve the 
condition of the assets and the performance of the NHS, to make 
progress toward achievement of the State's targets for asset condition 
and performance of the NHS in accordance with 23 U.S.C. 150(d), and to 
support progress toward the achievement of the national goals 
identified in section 150(b).
    In the proposed rule, the FHWA would require State DOTs to make 
their asset management plans available to the public, and encourages 
them to do so in

[[Page 9242]]

a format that is easily accessible. The FHWA is proposing this 
provision because the asset management plan is an effective 
communication tool. It documents how decisions regarding investment 
strategies are made, what actions are taken to improve or preserve the 
condition of the assets and system performance, how risks to system 
performance are managed, and how the work of maintaining assets 
throughout their lives is considered. All of these documents provide 
the public with a wealth of information that can help assess whether 
transportation investments are being made wisely.
    Finally, the proposed regulation would clarify that other title 23 
regulations govern the establishment of the performance measures and 
State targets required by 23 U.S.C. 150, as well as the required 
reports on progress toward those targets. Inclusion of section 150 
measures and targets in the State DOT's asset management plans is 
required under 23 U.S.C. 119, for purposes of carrying out the asset 
management planning process. However, use of the measures and targets 
in the plan would not fulfill the reporting or other requirements under 
section 150.
Section 515.011 Phase-In of Asset Management Plan Development
    In this section, the FHWA proposes to establish a process that will 
enable State DOTs to phase-in the development of their asset management 
plans. The FHWA recognizes that State DOTs are at different levels of 
sophistication and readiness to develop and implement an effective 
asset management plan. While some States may already have all of the 
required processes in place and analyses performed, other States may be 
only beginning to explore asset management. Those States need to have 
sufficient time to develop and implement the required processes and 
plans. In addition, there is a timing issue relating to 23 U.S.C. 150 
measures and targets that FHWA believes require a phased-in approach. 
The timing problems affect the ability of State DOTs to include the 
section 150 measures and targets for NHS pavement and bridges in their 
initial asset management plans, and also affects the annual FHWA 
consistency determination required under 23 U.S.C. 119(e)(5). The FHWA 
believes proposed section 515.011 would resolve these issues.
    Section 119(e)(5) sets a deadline for compliance with the asset 
management plan provisions in 23 U.S.C. 119 by the beginning of the 
second fiscal year following the FHWA's establishment of the process 
for developing asset management plans. That process will be established 
through this rulemaking. Failure to develop and implement an asset 
management plan consistent with section 119 results in a reduced 
Federal share for NHPP projects. However, section 119(e)(2) requires 
asset management plans to include strategies leading to a program of 
projects that would make progress toward achievement of the States' 
targets for asset condition and performance of the NHS in accordance 
with 23 U.S.C. 150(d), and supporting progress toward the national 
goals identified in section 23 U.S.C. 150(b). The FHWA is establishing 
the section 150 measures through a separate rulemaking,\7\ following 
which the statute gives State DOTs 1 year to establish their section 
150(d) targets. The FHWA rulemaking process under section 150, and the 
subsequent State DOT establishment of targets under section 150(d), 
might not be completed in a sufficient amount of time before the asset 
management plan consistency deadline in 23 U.S.C. 119(e)(5) in order to 
permit the State DOT to incorporate the section 150 measures and 
targets in its initial plan. If that is the case, a State DOT would not 
be able to demonstrate in the first consistency review that its asset 
management plan includes ``strategies leading to a program of projects 
that would make progress toward achievement of the State targets for 
asset condition and performance of the National Highway System in 
accordance with section 150(d).''
---------------------------------------------------------------------------

    \7\ The related rule for pavement and bridge conditions, 
``National Performance Management Measures; Assessing Pavement 
Condition for the National Highway Performance Program and Bridge 
Condition for the National Highway Performance Program'' (RIN 2125-
AF53), is available on the docket for review.
---------------------------------------------------------------------------

    To address the risk that it may not be possible for the State DOTs 
to fully meet the section 119(e)(2) requirements with the first cycle 
of plan submissions, the FHWA proposes to permit State DOTs to submit 
their initial asset management plans based on criteria specified in 
proposed section 515.011. Under all circumstances, the State DOT's 
first plan submission would have to include its proposed processes for 
each required area in proposed section 515.007, State DOT measures and 
target for assets in the plan, and the State DOT's investment 
strategies. However, the proposed rule would give State DOTs the option 
of developing their initial asset management plans, including their 
investment strategies, using best available information in each 
required area. Investment strategies in the initial plan would have to 
satisfy the portion of section 119(e)(2) relating to the national goals 
in 23 U.S.C. 150(b). However, the plan's strategies would not have to 
address the section 150(d) targets unless the State DOT has established 
those targets at least 6 months before the plan submission deadline in 
section 515.013(a). The proposed rule also would permit a State DOT to 
omit the analyses for life-cycle costs, risk management, and the 
financial plan from its initial asset management plan.
    The proposed exceptions from the requirements of sections 515.007 
and 515.009 would apply only to the initial plan submission. The FHWA 
proposes to require State DOTs to amend their plans to include all the 
required analyses using FHWA-certified processes, the 23 U.S.C. 150 
measures and targets, and investment strategies consistent with all of 
the requirements of 23 U.S.C. 119(e)(2), not later than 18 months after 
the effective date of the final rulemaking for pavement and bridge 
condition measures pursuant to 23 U.S.C. 150. However, under the 
proposed rule, FHWA could extend the 18-month time period as needed to 
provide 12 months between the time FHWA certifies the State DOT's 
processes under 23 U.S.C. 119(e)(6)(A) and the date the amended plan is 
due. The purpose of the proposed extension is to permit the State DOT a 
reasonable amount of time to incorporate section 150 measures and 
targets and complete the required analyses using FHWA-certified 
processes. Under the proposed rule, FHWA could grant the extension only 
if it determines the State DOT's initial plan meets the requirements of 
section 515.011. The proposed 18-month deadline for submission of an 
amended plan and the related extension provision mirror the deadline 
and extension provisions in MAP-21 section 1106(a)-(b), relating to 
limitations on FHWA's ability to obligate NHPP funds.
    Under this proposed phase-in approach, FHWA may determine an 
initial plan that conforms with proposed section 515.011 meets the 
consistency requirements under 23 U.S.C. 119(e)(5). The consistency 
determination would fulfill the ``approved plan'' requirement in the 
NHPP obligation transition provision in MAP-21 section 1106(b). The 
amended asset management plan, and any subsequent asset management plan 
submitted to the FHWA for a consistency determination under section 
119(e)(5) or recertification of processes under 23 U.S.C. 119(e)(6)(B), 
would have to meet all requirements in section 119(e)(2) and proposed 
sections 515.007 and 515.009 of this rule.

[[Page 9243]]

    The FHWA specifically requests comment whether this proposed phase-
in approach is desirable and workable.
Section 515.013 Process Certification and Plan Consistency Review
    In this section, the FHWA proposes the processes by which the State 
DOTs will submit to FHWA their asset management plan development 
processes for certification pursuant to 23 U.S.C. 119(e)(6), and their 
asset management plans for a consistency determination under 23 U.S.C. 
119(e)(5). The procedures for process certification and plan 
consistency determination in proposed section 515.013 are important to 
the implementation of several provisions relating to Federal-aid 
funding. First, section 119(e)(5) requires the Secretary to determine 
for the second fiscal year after the establishment of the Federal 
requirements that are the subject of this rulemaking, and for each 
fiscal year thereafter, whether the State has developed and implemented 
an asset management plan consistent with section 119. The lack of a 
consistency determination will result in a reduced Federal share for 
NHPP projects under 23 U.S.C. 119(e)(5).
    A second provision affected by process certification and 
consistency determination is the transition provision in section 
1106(b) of MAP-21. The transition provision allows FHWA to obligate 
NHPP funds for a period of time even though a State DOT does not have 
an approved asset management plan or has not established performance 
targets as described in 23 U.S.C. 119 and 23 U.S.C. 150. The transition 
period expires when the State DOT has met those two requirements, but 
not later than 18 months after the effective date of the final 
performance management rulemaking under 23 U.S.C. 150. The FHWA may 
extend the 18-month transition period if FHWA determines the State DOT 
has made a good faith effort to establish an asset management plan and 
the performance targets described in sections 119 and 150. Once the 
transition period ends, FHWA cannot obligate NHPP funds for projects 
otherwise eligible under 23 U.S.C. 119(d) unless the State DOT has an 
approved asset management plan and the required performance targets.
Certification of State DOT Processes
    As noted above, 23 U.S.C. 119(e)(6) requires that the FHWA review 
and certify that the processes used by the State DOTs to develop their 
asset management plans meet the requirements established through this 
rulemaking. The FHWA also is required to recertify the State DOT's 
processes at least every 4 years pursuant to 23 U.S.C. 119(e)(6)(B). In 
this rule, the FHWA proposes that State DOTs include the necessary 
asset management plan development processes as part of the initial 
asset management plan submitted to the FHWA not later than 1 year after 
the effective date of the final rule on asset management. This time 
frame is intended to give the State DOTs sufficient time to prepare 
their processes and other parts of their initial plans, and receive the 
required FHWA process certification and consistency determination, 
before the implementation deadline contained in 23 U.S.C. 119(e)(5). 
That deadline is the beginning of the second fiscal year after the 
effective date of the final rule establishing the asset management plan 
development process.
    The FHWA would review and respond (i.e., approve or disapprove with 
comments) to the State DOT's request for certification of the State 
DOT's processes for plan development within 90 days after the FHWA 
receives the State DOT's request. Following the year of initial 
certification, State DOTs would then update their plans and resubmit 
their processes to the FHWA on October 1 every 4 years for 
recertification in compliance with section 119(e)(6)(B).
    In addition, under proposed section 515.013(d), whenever a State 
DOT amends its asset management plan, it would be required to submit 
the amended plan to the FHWA for a new process certification at least 
30 days prior to the deadline for the next FHWA's consistency 
determination (August 31 of each year). Minor technical corrections and 
revisions with no foreseeable material impact on the accuracy and 
validity of the analyses and investment strategies in the plan would 
not require submission to FHWA. If FHWA determines that a State DOT's 
processes do not meet the requirements of these proposed regulations, 
the State DOT will have an opportunity to cure the deficiencies, as 
required under 23 U.S.C. 119(e)(6)(C). The FHWA will send the State DOT 
a written notice of denial of certification or recertification that 
specifically identifies and lists the deficiencies. The State DOT will 
then have 90 days (which FHWA may extend upon request) to correct the 
deficiencies and resubmit its process to FHWA. If a State DOT's 
processes have minor deficiencies, then FHWA may proceed to certify the 
State DOT's processes on the condition that the minor deficiencies are 
corrected within 90 days of the receipt of the notification of 
certification. The State DOT must notify FHWA, in writing, once it has 
corrected the deficiencies.
Consistency Determination
    The FHWA proposes to rely on the State DOT's most recently 
submitted asset management plan in making the annual consistency 
determination required by 23 U.S.C. 119(e)(5). The first consistency 
determination would be made by August 31 of the first fiscal year 
following the effective date of the final rule in this rulemaking. The 
subsequent consistency determinations would be made by August 31 of 
each fiscal year thereafter. The FHWA proposes the August 31 date to 
give a State DOT time to adjust its program in the event the State DOT 
receives a negative determination and the Federal share is reduced for 
the next fiscal year. The FHWA requests comments on whether this time 
period is needed, and whether the proposed 30-day period between the 
determination and the start of the next fiscal year is sufficient.
    Except for the proposed phase-in for initial plans under section 
515.011, in order for FHWA to find a plan consistent with the asset 
management requirements in 23 U.S.C. 119, the plan would need to 
include the minimum required contents, would have been developed using 
the State DOT's FHWA-certified processes for the necessary analyses, 
would include the 23 U.S.C. 150 measures and targets, and would contain 
strategies meeting the requirements in 23 U.S.C. 119(e)(2).
    The purpose of FHWA's receipt of the State-approved asset 
management plan is to make the process certification and consistency 
determinations required under 23 U.S.C. 119(e)(5)-(6). The FHWA would 
not take any action to approve or disapprove a plan beyond the required 
process certification and consistency determinations. The investment 
decisions and judgments made by State DOTs in their asset management 
plans are within the scope of the FHWA asset management plan reviews.
    The FHWA specifically requests comments on the proposed process 
certification and consistency determination processes proposed in 
section 515.013.
Section 515.015 Penalties
    This section discusses the statutory penalties for State DOTs that 
do not develop and implement an asset management plan consistent with 
the requirements of 23 U.S.C. 119 and this proposed rule. The penalties 
that the FHWA is proposing in this section are penalties required by 
law. First, as mentioned above, 23 U.S.C. 119(e)(5)

[[Page 9244]]

reduces the Federal share for NHPP projects to 65 percent if a State 
DOT does not develop and implement an asset management plan consistent 
with the requirements of 23 U.S.C. 119 and this proposed rule by the 
beginning of the second fiscal year after the effective date of the 
final rule. Second, after the transition period in MAP-21 section 
1106(b), the FHWA cannot approve any further projects using NHPP funds 
if the State DOT has not developed and implemented an asset management 
plan that is consistent with the requirements of 23 U.S.C. 119 and this 
proposed rule, and established the performance targets required under 
23 U.S.C. 150(d) regarding the condition and performance of the NHS. 
The transition period ends when the State DOT has a conforming asset 
management plan and section 150(d) targets, but not later than the date 
that is 18 months after the effective date of the final rulemaking for 
pavement and bridge condition measures pursuant to 23 U.S.C. 150(c). 
Section 1106(b)(2) of MAP-21 provides FHWA with the authority to extend 
this time period if the State DOT has made a good faith effort to 
establish an asset management plan and the required performance 
targets.
    The FHWA consistency determination under 23 U.S.C. 119(e)(5), and 
FHWA obligation decisions for NHPP funds, look at two major elements: 
Plan development and plan implementation. The FHWA proposes to make the 
determination whether a plan meets the development requirements based 
on whether the State DOT has complied with sections 515.007 and 515.009 
of the proposed rule. The FHWA believes the plan implementation 
determination should be focused on whether the plan's investment 
strategies satisfy the 23 U.S.C. 119(e)(2) requirements (i.e., lead to 
a program of projects that would make progress toward achievement of 
the States' targets for asset condition and performance of the NHS in 
accordance with 23 U.S.C. 150(d), and supporting progress toward the 
national goals identified in 23 U.S.C. 150(b)). This suggests FHWA will 
need a method to easily identify projects the State DOT believes meets 
the section 119(e)(2) requirements. The FHWA requests comments on 
whether the rule should specify one or more methods State DOTs could 
use to identify such projects. For example, the rule could leave the 
method of identification entirely to the State DOT's discretion, or the 
rule could allow the State DOTs to use one of several options, such as:
    (1) A State DOT could identify the projects in its asset management 
plan.
    (2) A State DOT could identify the projects by using an identifying 
symbol, such as an asterisk or number, in its STIP.
    (3) A State DOT could include a summary discussion in its STIP 
identifying the projects, or program of projects.
    (4) The State DOT could submit a list to FHWA by August 31 of each 
fiscal year identifying the projects authorized during the fiscal year 
that the State DOT believes demonstrate the State DOT has met the 
section 119(e)(2) requirements.
    (5) The State DOT could include a summary in its STIP of 
anticipated funding broken down into categories based on the 
recommended investment strategies in the asset management plan, with 
enough detail to guide project selection.
    The FHWA requests comments on other possible approaches to 
determining whether a State DOT has implemented its asset management 
plan. The FHWA also seeks comments on any problems State DOTs might 
anticipate in identifying projects that meet the requirements of 23 
U.S.C. 119(e)(2), and ideas for resolving any anticipated problems.
Section 515.017 Organizational Integration of Asset Management
    This section describes practices that State DOTs are encouraged to 
consider to support the development and implementation of asset 
management plans. These practices include the establishment of 
strategic goals, conducting periodic self-assessments, and conducting a 
gap analysis to determine which areas of the asset management 
development and implementation process require improvement.
Section 515.019 Periodic Evaluations of Facilities Requiring Repair or 
Reconstruction Due to Emergency Events
    This proposed regulation fulfills the rulemaking requirement in 
section 1315(b) of MAP-21 and is consistent with the purpose of that 
section. Section 1315(b) of MAP-21 requires periodic evaluations to 
determine if reasonable alternatives exist for roads, highways, or 
bridges that repeatedly require repair and reconstruction activities 
due to emergency events. The purposes of section 1315(b) are to 
conserve Federal resources, protect public safety and health, and 
reduce the need for Federal funds to be expended on repeated repair and 
reconstruction activities, better protect the environment, and meet 
transportation needs. Emergency events include extreme weather events, 
natural disasters, and other catastrophic events that damage roads, 
highways, or bridges. Examples include floods, hurricanes, earthquakes, 
tornadoes, tidal waves, severe storms, or landslides.
    The threshold for requiring evaluation under the proposed rule 
would be whether a road, highway, or bridge has required repair or 
reconstruction on at least two occasions due to emergency events. The 
proposed rule would define ``emergency event'' to mean a natural 
disaster or catastrophic failure due to external causes resulting in an 
emergency declared by the Governor of the State or an emergency or 
disaster declared by the President of the United States.
    The proposed rule would apply only to roads, highways, and bridges 
that are owned by a State or local governmental entity (e.g., State 
DOT, State toll authority, city, or county) and are eligible for 
funding under title 23. These limitations are in recognition of several 
factors. First, MAP-21 section 1315 contains no clear language 
requiring inclusion of facilities that received funding from other 
Federal agencies. It is reasonable to conclude its language was meant 
to conserve title 23 resources. Second, FHWA believes it would be 
unreasonably difficult for State DOTs to determine which roads, 
highways and bridges may have received non-title 23 Federal funding in 
the past, or might be eligible to receive non-title 23 Federal funding 
in the future. Finally, as a result of an earlier rulemaking, 
Environmental Impact and Related Procedures NPRM (77 FR 59875, Oct. 1, 
2012), the FHWA decided to address the section 1315(b) requirements for 
States through this rulemaking. The FHWA does not believe it would be 
appropriate to expand this State-focused rulemaking to address any 
section 1315(b) requirements for federally owned roads, highways, and 
bridges.
    Under the proposed rule, the State DOT must complete its evaluation 
for affected highways and bridges on the NHS, and any other assets 
included in the State DOT's asset management plan, not later than 2 
years after the effective date of the final rule established through 
this rulemaking. The State DOT would have to complete the evaluation 
for all other roads, highways, and bridges in the State not later than 
4 years after the effective date of the final rule in this rulemaking. 
The State DOT would be required to update the statewide evaluation 
after every emergency event to the extent the event caused additional 
facilities to meet the threshold for an alternatives evaluation. The 
proposed rule would require the State DOT to

[[Page 9245]]

review and update the statewide evaluation at least every 4 years after 
the initial evaluation. State DOTs would be encouraged to establish an 
evaluation cycle that facilitates consideration of the results of the 
evaluation in the State DOT's asset management plan and STIP. The 
proposed rule would require the State DOT to make the evaluation 
available to FHWA upon request.
    The State DOT would be required by proposed sections 515.019, 
515.007, and 515.009 to use the results of the evaluation in its asset 
management plan to the extent the evaluation covers assets in the plan. 
The State DOT would include a summary of its section 1315(b) evaluation 
for pavements and bridges on the NHS, and those for any other assets 
included in the asset management plan at the option of the State DOT, 
as part of the risk analysis in its asset management plan.
    The FHWA received comments from 12 commenters in response to the 
Environmental Impact and Related Procedures NPRM (77 FR 59875, Oct. 1, 
2012), implementing section 1315 of MAP-21, who mostly supported 
including this analysis as part of the asset management plans described 
in this NPRM. In particular, the FHWA received eight comments on 
whether this analysis should be included as part of the asset 
management plans. These commenters were AASHTO, the American Public 
Transportation Association (APTA), and six State DOTs (Alaska 
Department of Transportation and Public Facilities (ADOT&PF), Texas 
DOT, California DOT, North Dakota DOT, Washington State DOT, and Ohio 
DOT). Of these commenters, only one comment (North Dakota DOT) was 
opposed to including this analysis as part of the asset management 
plan, stating that too few States have the ability to immediately 
implement asset management plans. However, in accordance with 23 U.S.C. 
119(e), all States must develop and implement an asset management plan. 
The asset management plan phase-in provisions proposed under section 
515.011, as well as the phase-in proposed in section 515.019, should 
facilitate the transition for those State DOTs not already using some 
form of asset management.
    Three commenters, ADOT&PF, Texas DOT, and Transportation 
Transformation Group suggested the FHWA grant the State flexibility 
with respect to the frequency of the reviews or how the reviews are 
conducted. The FHWA is proposing the State DOTs perform the evaluations 
of NHS highways and bridges, and any other assets included in the State 
DOT asset management plan, within 2 years after the final rule 
established through this rulemaking. This is to facilitate 
consideration of the evaluation in the asset management plan. This 
schedule also recognizes the priority Congress placed on improving and 
preserving the NHS in MAP-21. For other roads, highways, and bridges, 
the State DOT would have to complete the evaluation no later than 4 
years after the final rule established through this rulemaking. The 
FHWA does not specify in this NPRM the manner in which the States must 
conduct these reviews, only that these reviews must be consistent with 
the mandate in section 1315(b) of MAP-21. The FHWA expects that each 
State DOT will keep current data regarding facilities that repeatedly 
require repair and reconstruction following emergency events. If damage 
due to emergency events occurs to a road, highway, or bridge on two or 
more occasions, the State DOT would determine if reasonable 
alternatives exist to reduce the potential for future damage and repair 
costs and better protect public safety and health and the environment. 
These evaluations would consider the risk of recurring damage and the 
cost of future repair under current and future environmental 
conditions. For purposes of section 1315(b), a reasonable alternative 
would meet transportation needs as described in relevant and applicable 
Federal, State, local and tribal plans, including those required under 
23 CFR part 450. The FHWA is proposing this approach to conserve 
Federal resources and to increase the resilience of the transportation 
system. The proposed approach would help ensure that future project 
development and funding decisions for these facilities are informed by 
these evaluations, and therefore meet the intent of section 1315(b) of 
MAP-21.
    The FHWA received four comments (Texas DOT, New York State 
Metropolitan Transportation Authority, Transportation Transformation 
Group, and Southeast Pennsylvania Transportation Authority) stating 
that these evaluations would best be conducted at the State or local 
level. The FHWA agrees that these evaluations are best conducted at the 
State or local level. However, with respect to facilities under the 
jurisdiction of a local public agency, State DOTs are responsible for 
ensuring that appropriate evaluations are carried-out for those 
facilities in their State.
    Finally, the FHWA received four comments on the factors to be 
considered as part of this reasonable alternatives analysis. Two of 
these comments (Texas DOT and APTA) requested that FHWA allow States to 
determine the factors. Another comment (Advisory Council on Historic 
Preservation) requested that the FHWA require States to consider the 
effects on historic properties. The fourth comment (ADOT&PF) proposed 
some factors that should be considered when assessing the risk of 
recurring damage, including the severity of damage, cost of a permanent 
solution, and the maintenance and operations of the current facility 
and permanent solution. In this NPRM, the FHWA proposes that States 
take into account the factors specified in 1315(b) of MAP-21 when 
evaluating whether reasonable alternatives exist for roads, highways, 
or bridges that repeatedly require repair and reconstruction activities 
following emergency events. States would be required to evaluate 
whether reasonable alternatives exist that: Reduce the need for Federal 
funds to be expended on such repair and reconstruction activities; 
better protect public safety and health and the environment; and meet 
transportation needs as described in relevant and applicable Federal, 
State, local, and tribal plans. States are free to use other factors at 
their discretion; however, the statutorily required factors must be 
taken into account. The FHWA declines to include a specific reference 
in the regulation to historic properties. The proposed regulation calls 
for consideration of the human and natural environment in the 
evaluation. That phrase includes a wide range of potential 
environmental impacts, including those on historic and cultural 
resources. Including references to some types of human or natural 
environmental resources, while omitting references to others, could be 
misinterpreted as intended to give greater weight to the listed 
resource(s).
    The FHWA recognizes MAP-21 section 1315(b) requirements may pose 
challenges for some State DOTs. The FHWA requests comments on potential 
alternative methods for meeting the section 1315(b) requirements, and 
asks for comments on the following specific questions:
    (1) Is the amount of time allotted in proposed section 515.019 for 
the initial evaluation of NHS assets and other assets included in the 
State DOT asset management plan (2 years), and for all other roads, 
highways, and bridges (4 years), appropriate? If not, how much time 
should be allotted?
    (2) Is the 4-year general update cycle for the statewide evaluation 
appropriate? If not, what would be a reasonable cycle for the ongoing 
periodic evaluation required under section 1315(b)?

[[Page 9246]]

    (3) Should the FHWA establish a limit to the length of the ``look 
back'' State DOTs will do in order to determine whether a road, 
highway, or bridge has been repaired or reconstructed on two or more 
occasions? If so, what would be an appropriate and feasible length of 
time?
    (4) Should the regulation address the types of data sources that 
should be considered to determine whether a road, highway, or bridge 
has been repaired or reconstructed on two or more occasions? If so, 
what types of data sources would be most appropriate?
    (5) Should the rule specify required content for the evaluations in 
greater detail? If so, what elements ought to be required?
    (6) Should the regulation require the State to consider the section 
1315(b) alternatives evaluation prior to requesting title 23 funding 
for a project?
    (7) Should the regulation address when and how FHWA would consider 
the section 1315(b) alternatives evaluation in connection with an FHWA 
project approval?

Rulemaking Analyses and Notices

Executive Order 12866 (Regulatory Planning and Review), Executive Order 
13563 (Improving Regulation and Regulatory Review), and DOT Regulatory 
Policies and Procedures
    The FHWA has determined that this action would be a significant 
regulatory action within the meaning of Executive Order 12866 and 
within the meaning of DOT's regulatory policies and procedures. This 
rulemaking implements a congressional mandate that States develop and 
implement risk-based asset management plans for Interstate highway 
pavements, non-Interstate NHS highway pavements, and NHS bridges. In 
addition, State DOTs must meet minimum standards established by the 
Secretary of Transportation in developing pavement and bridge 
management systems. This action is considered significant because of 
the substantial State DOT interest in the requirements for developing 
risk-based asset management plans, and the proposed minimum standards 
for the pavement and bridge management systems. In addition, this 
rulemaking implements section 1315(b) of MAP-21 by requiring States to 
conduct evaluations to determine if reasonable alternatives exist to 
roads, highways, or bridges that repeatedly require repair and 
reconstruction activities from emergency events, and to take these 
evaluations into account in the asset management plans for facilities 
that are included in these plans. However, this action is not 
economically significant within the meaning of Executive Order (EO) 
12866.
    The FHWA is presenting a Regulatory Impact Analysis (RIA) in 
support of this NPRM. The RIA estimates the economic impact, in terms 
of costs and benefits, on State DOTs as required by EO 12866 and EO 
13563. This section of the NPRM identifies and estimates costs and 
benefits resulting from the proposed rule in order to inform policy 
makers and the public of the relative value of the current proposal. 
The complete RIA may be accessed in the rulemaking's docket (FHWA-2013-
0052).
    The costs and benefits were estimated for implementing the 
requirement for States to develop a risk-based asset management plan 
and to use pavement and bridge management systems that comply with the 
minimum standards proposed by this NPRM. For this analysis, the base 
case is assumed to be the current state of the practice, where most 
State DOTs already own pavement and bridge management systems, but have 
not developed risk-based asset management plans.
Estimated Costs of the Proposed Rule
    The costs of preparing an asset management plan was estimated based 
on information obtained from nine State DOTs. Based on that 
information, FHWA estimates that the total cost of developing the 
initial plan and three updates for all 50 States, the District of 
Columbia, and Puerto Rico States, covering a 12 year time period, would 
be $37.3 million discounted at 3 percent and $31.1 million discounted 
at 7 percent, an annual cost of $3.1 million and $2.6 million 
respectively. These estimates may be conservative, since many agencies 
may already be developing planning documents that could feed into the 
asset management plans or be replaced by them, therefore saving some 
costs to the agencies.
    An additional cost of $4 million to $6 million in total is 
estimated for acquiring pavement management systems for all non-
complying agencies. There are currently four States that don't 
currently have pavement and bridge management systems that meet the 
standards of the proposed rule.
    Therefore, the total nationwide costs for all States to develop 
their initial asset management plans with three updates over the course 
of 12 years and for the four States to acquire and install pavement 
management systems would be $43.2 million discounted at 3 percent and 
$36.7 million discounted at 7 percent.
Estimated Benefits of the Proposed Rule
    The FHWA lacks data on the economic benefits of the practice of 
asset management as a whole. The field of asset management has only 
become common in the past decade and case studies of economic benefits 
from overall asset management have not been published. We specifically 
request that commenters submit data on the quantitative benefits of 
asset management and reference any studies focusing on the economic 
benefits of overall asset management.
    While FHWA lacks data on the overall benefits of asset management, 
there are examples of the economic savings that result from the most 
typical component sub-sets of asset management, pavement and bridge 
management systems. Pavement and bridge management systems are software 
and analysis tools whereas asset management is a decisionmaking 
framework and approach leading to cost effective investment strategies. 
Pavement and bridge management systems are used to analyze massive 
amounts of pavement and bridge data. The information from the pavement 
and bridge management systems is then used to develop the asset 
management plan.
    Taking a study conducted using Iowa DOT data \8\ as an example of 
the potential benefits of applying a long-term asset management 
approach using a pavement management system, the costs of developing 
the asset management plans and acquiring pavement management systems 
are compared to determine if the benefits of the proposed rule would 
exceed the costs. We estimate the total benefits for the 50 States, 
District of Columbia, and Puerto Rico of applying pavement management 
systems and developing asset management plans to be $453.5 million 
discounted at 3 percent and $340.6 million discounted at 7 percent. The 
FHWA requests comments on this estimate.
---------------------------------------------------------------------------

    \8\ Smadi, Omar, Quantifying the Benefits of Pavement 
Management, a paper from the 6th International Conference on 
Managing Pavements, 2004
---------------------------------------------------------------------------

    Based on the benefits derived from the Iowa DOT study and the 
estimated costs of asset management plans and acquiring pavement 
management systems, the ratio of benefits to costs would be 10.5 at a 3 
percent discount rate and 9.3 at a 7 percent discount rate. The 
estimated benefits do not include the potential benefits resulting from 
savings in bridge programs. The benefits for States already practicing 
good asset management decisionmaking using their pavement management 
systems will be

[[Page 9247]]

lower, as will the costs. If the requirement to develop asset 
management plans only marginally influences decisions on how to manage 
the assets, benefits are expected to exceed costs.
Summary of Benefits and Costs of Asset Management Plan Rule

------------------------------------------------------------------------
                                     Discounted at  3   Discounted at  7
                                         percent            percent
------------------------------------------------------------------------
Total Benefits for 50 States,            $453,517,289       $340,580,916
 District of Columbia, and Puerto
 Rico.............................
Total Cost for 50 States, District        $43,159,635        $36,701,377
 of Columbia, and Puerto Rico.....
Benefit Cost Ratio................               10.5                9.3
------------------------------------------------------------------------

Threshold Analysis
    To estimate the threshold benefits necessary from pavement or 
bridge preservation for the rule to be worthwhile, we use the 
incremental benefits that can be realized by road users in vehicle 
operating cost reductions due to improvements in pavement or bridge 
condition. The estimates used for the user costs in the break-even 
analysis are based on the numbers derived for the ``Establishment of 
National Bridge and Pavement Condition Performance Management Measures 
Regulatory Impact Analysis.'' (See Docket Number FHWA-2013-0053). The 
FHWA estimated the cost saving per mile of travel on pavement with fair 
condition versus pavement in poor condition to be $0.01 per vehicle, 
averaged for the share of trucks and cars on the NHS. Dividing the cost 
of the rule by this cost, the number of vehicle miles of travel (VMT) 
to be improved to cover the cost of the rule was estimated. Then taking 
the ratio of the VMT to be improved to the number of VMT in poor 
condition and multiplying by number of NHS miles in poor condition, the 
number of lane miles to be improved to cover the cost of the rule are 
estimated. To cover the $49.9 million undiscounted cost of the rule, 
approximately 127 lane miles would have to be improved from poor 
condition to fair condition to generate user benefits to make the rule 
worthwhile.
    For bridges, FHWA estimated the additional user cost (travel time 
and vehicle operating costs) of a detour due to a weight restricted 
bridge. According to NBI, the average detour is equal to 20 miles. The 
estimated average user cost per truck is $1.69 per mile. Each posted 
bridge is estimated to impose a detour cost of $33.82 per truck. ($1.69 
per VMT x 20 miles). Based on the number of trucks affected by the 
weight restrictions, it is estimated that two weight restricted bridge 
postings would have to be avoided to meet the cost of the rule.
    The above description of the benefits of asset management is based 
on the limited data available on the benefits of pavement and bridge 
management systems, the most typical component sub-sets of asset 
management. The FHWA does not have sufficient information to estimate 
total costs and benefits of asset management as a whole. We 
specifically request that commenters submit information on the 
quantitative benefits of asset management.
    A copy of the FHWA's RIA has been placed in the docket. The FHWA 
requests comments on the RIA that has been conducted for this rule.
Regulatory Flexibility Act
    In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 
5 U.S.C. 601-612), the FHWA has evaluated the effects of this action on 
small entities and has determined that the action would not have a 
significant economic impact on a substantial number of small entities. 
The proposed amendment addresses the obligation of Federal funds to 
States for Federal-aid highway projects. As such, it affects only 
States, and States are not included in the definition of small entity 
set forth in 5 U.S.C. 601. Therefore, the Regulatory Flexibility Act 
does not apply, and the FHWA certifies that the proposed action would 
not have a significant economic impact on a substantial number of small 
entities.
Unfunded Mandates Reform Act of 1995
    This proposed rule would not impose unfunded mandates as defined by 
the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48, 
March 22, 1995) as it would not result in the expenditure by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of $151 million or more in any one year (2 U.S.C. 1532).
Executive Order 13132 (Federalism Assessment)
    The FHWA has analyzed this NPRM in accordance with the principles 
and criteria contained in EO 13132. The FHWA has determined that this 
action would not have sufficient federalism implications to warrant the 
preparation of a federalism assessment. The FHWA has also determined 
that this action would not preempt any State law or State regulation or 
affect the States' ability to discharge traditional State governmental 
functions.
Executive Order 12372 (Intergovernmental Review)
    The regulations implementing EO 12372 regarding intergovernmental 
consultation on Federal programs and activities apply to this program. 
Local entities should refer to the Catalog of Federal Domestic 
Assistance Program Number 20.205, Highway Planning and Construction, 
for further information.
Paperwork Reduction Act
    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et 
seq.), Federal agencies must obtain approval from Office of Management 
and Budget (OMB) for each collection of information they conduct, 
sponsor, or require through regulations. This action contains a 
collection-of-information requirement under the PRA. The MAP-21 
requires State DOTs to develop risk-based asset management plans for 
NHS bridges and pavements to improve or preserve the condition of the 
assets and the performance of the system. It also requires the 
Secretary of Transportation to review the processes State DOTs have 
used to develop their asset management plans, and to determine if 
States have developed and implemented their asset management plans 
consistent with the MAP-21 requirements.
    In order to be responsive to the requirements of MAP-21, FHWA 
proposes that State DOTs submit their asset management plans, including 
the processes used to develop these plans, to FHWA for: (1) 
Certification of the processes, and (2) a determination that the asset 
management plans have been developed consistent with the certified 
processes; however, these plans are not subject to the FHWA approval.
    A description of the collection requirements, the respondents, and 
an estimate of the burden hours per data collection cycle are set forth 
below:
    Collection Title: State DOTs' Risk-Based Asset Management Plan 
including its processes for the NHS bridges and pavements.

[[Page 9248]]

    Type of Request: New information collection requirement.
    Respondents: 50 States, the District of Columbia, and Puerto Rico.
    Frequency: One collection every 4 years.
    Estimated Average Burden per Response per Data Collection Cycle: 
Some early examples of asset management plan burden hours are 
available. The transportation agencies for Minnesota, Louisiana, and 
New York are cooperating with the FHWA to produce three early 
transportation asset management plans. These three States represent 
three different approaches that illustrate the possible range of costs 
and level of effort for conducting asset management plans. In addition, 
the information relative to the burden hours from Colorado DOT is 
included in the benefit-cost analysis for this proposed rule as 
required by EO 12866. The result of that analysis indicates that the 
average burden hours per State for developing the initial asset 
management plan would be approximately 2,600 hours. However, on 
average, development of subsequent plans would require less effort 
because the processes have already been developed. The estimate for 
updating plans for future submission indicates that approximately 1,300 
burden hours per State per data-collection cycle would be required.
    The FHWA invites interested persons to submit comments on any 
aspect of the proposed information collection, including the FHWA's 
estimate of the burden hours of the proposed information collection. 
Comments submitted in response to this notice will be summarized or 
included, or both, in the request for OMB approval of this information 
collection.
National Environmental Policy Act
    Agencies are required to adopt implementing procedures under the 
National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 
4321 et seq.), that establish specific criteria for, and identification 
of, three classes of actions: Those that normally require preparation 
of an environmental impact statement; those that normally require 
preparation of an environmental assessment; and those that are 
categorically excluded from further NEPA review (40 CFR 1507.3(b)). The 
FHWA's procedures are found in 23 CFR part 771. This proposed action 
qualifies for categorical exclusions under 23 CFR 771.117(c)(20) 
(promulgation of rules, regulations, and directives) and 771.117(c)(1) 
(activities that do not lead directly to construction). The FHWA has 
evaluated whether the proposed action would involve unusual 
circumstances and has determined that this proposed action would not 
involve such circumstances.
Executive Order 12630 (Taking of Private Property)
    The FHWA has analyzed this proposed rule under EO 12630, 
Governmental Actions and Interference with Constitutionally Protected 
Property Rights. The FHWA does not anticipate that this proposed action 
would affect a taking of private property or otherwise have taking 
implications under EO 12630.
Executive Order 12988 (Civil Justice Reform)
    This action meets applicable standards in sections 3(a) and 3(b)(2) 
of EO 12988, Civil Justice Reform, to minimize litigation, eliminate 
ambiguity, and reduce burden.
Executive Order 12898 (Environmental Justice)
    The EO 12898, Federal Actions to Address Environmental Justice in 
Minority Populations and Low-Income Populations, and DOT Order 
5610.2(a), 91 FR 27534 (May 10, 2012) (available online at 
www.fhwa.dot.gov/environment/environmental_justice/ej_at_dot/order_56102a/index.cfm), requires DOT agencies to achieve environmental 
justice (EJ) as part of their mission by identifying and addressing, as 
appropriate, disproportionately high and adverse human health or 
environmental effects, including interrelated social and economic 
effects, of their programs, policies, and activities on minority 
populations and low-income populations in the United States. The DOT 
Order requires DOT agencies to address compliance with the EO and the 
DOT Order in all rulemaking activities. In addition, FHWA has issued 
additional documents relating to administration of the EO and the DOT 
Order. On June 14, 2012, FHWA issued an update to its EJ order, FHWA 
Order 6640.23A, FHWA Actions to Address Environmental Justice in 
Minority Populations and Low-Income Populations (available online at 
www.fhwa.dot.gov/legsregs/directives/orders/664023a.htm).
    The FHWA has evaluated this proposed rule under the EO, the DOT 
Order, and the FHWA Order. This rule proposes the process under which 
States would develop and implement asset management plans, which is a 
document describing how the highway network system will be managed, in 
a financially responsible manner, to achieve a desired level of 
performance and condition while managing risks over the life cycle of 
the assets. The asset management plan does not lead directly to 
construction. Therefore, the FHWA has determined that the proposed 
asset management regulations, if finalized, would not cause 
disproportionately high and adverse human health and environmental 
effects on minority or low-income populations.
Executive Order 13045 (Protection of Children)
    We have analyzed this rule under EO 13045, Protection of Children 
from Environmental Health Risks and Safety Risks. The FHWA certifies 
that this action would not cause an environmental risk to health or 
safety that might disproportionately affect children.
Executive Order 13175 (Tribal Consultation)
    The FHWA has analyzed this action under EO 13175, Consultation and 
Coordination with Indian Tribal Governments, and believes that the 
proposed action would not have substantial direct effects on one or 
more Indian tribes; would not impose substantial direct compliance 
costs on Indian tribal governments; and would not preempt tribal laws. 
The proposed rulemaking addresses obligations of Federal funds to 
States for Federal-aid highway projects and would not impose any direct 
compliance requirements on Indian tribal governments. Therefore, a 
tribal summary impact statement is not required.
Executive Order 13211 (Energy Effects)
    The FHWA has analyzed this action under EO 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. The FHWA has determined that this is not a 
significant energy action under that order since it is not a 
significant regulatory action under EO 12866 and is not likely to have 
a significant adverse effect on the supply, distribution, or use of 
energy. Therefore, a Statement of Energy Effects is not required.
Regulation Identification Number
    An RIN is assigned to each regulatory action listed in the Unified 
Agenda of Federal Regulations. The Regulatory Information Service 
Center publishes the Unified Agenda in April and October of each year. 
The RIN number contained in the heading of this document can be used to 
cross-reference this action with the Unified Agenda.

[[Page 9249]]

List of Subjects in 23 CFR Part 515

    Asset management, Transportation, Highways and roads.

    Issued on February 10, 2015, under authority delegated in 49 CFR 
1.85(a)(1).
Gregory G. Nadeau,
Acting Administrator, Federal Highway Administration.

    In consideration of the foregoing, the FHWA proposes to revise 
title 23, Code of Federal Regulations, by adding a new part 515 to read 
as follows:

PART 515--ASSET MANAGEMENT PLAN

Sec.
515.001 Purpose.
515.003 Applicability.
515.005 Definitions.
515.007 Process for establishing the asset management plan.
515.009 Asset management plan requirements.
515.011 Phase-in of asset management plan development.
515.013 Process certification and plan consistency review.
515.015 Penalties.
515.017 Organizational integration of asset management.
515.019 Periodic evaluations of facilities requiring repair or 
reconstruction due to emergency events.

    Authority:  Sec. 1106, 1203, and 1315(b) of Pub. L. 112-141, 126 
Stat. 405; 23 U.S.C. 109, 119(e), 144, 150(c), and 315; 49 CFR 
1.85(a).


Sec.  515.001  Purpose.

    The purpose of this part is to:
    (a) Establish the processes that a State transportation department 
(State DOT) must use to develop its asset management plan, as required 
under 23 U.S.C. 119(e)(8);
    (b) Establish the minimum requirements that apply to the 
development of an asset management plan;
    (c) set forth the minimum standards for a State DOT to use in 
developing and operating highway bridge and pavement management systems 
under 23 U.S.C. 150(c)(3)(A)(i);
    (d) Describe the penalties for a State DOT's failure to develop and 
implement an asset management plan in accordance with 23 U.S.C. 119 and 
this part; and
    (e) Establish the requirement for State DOTs to conduct periodic 
evaluations to determine if reasonable alternatives exist to roads, 
highways, or bridges that repeatedly require repair and reconstruction 
activities from emergency events.


Sec.  515.003  Applicability.

    This part applies to all State DOTs.


Sec.  515.005  Definitions.

    As used in this part:
    Asset means all physical highway infrastructure located within the 
right-of-way corridor of a highway. The term asset includes all 
components necessary for the operation of a highway including 
pavements, highway bridges, tunnels, signs, ancillary structures, and 
other physical components of a highway.
    Asset condition means the actual physical condition of an asset in 
relation to the expected or desired physical condition of the asset.
    Asset management means a strategic and systematic process of 
operating, maintaining, and improving physical assets, with a focus on 
both engineering and economic analysis based upon quality information, 
to identify a structured sequence of maintenance, preservation, repair, 
rehabilitation, and replacement actions that will achieve and sustain a 
desired state of good repair over the life cycle of the assets at 
minimum practicable cost. Replacement actions may include, but are not 
limited to, initial construction, reconstruction, resurfacing, and 
upgrade activities.
    Asset management plan means a document that describes how a State 
DOT will carry out asset management as defined in this section. This 
includes how the State DOT will make risk-based decisions from a long-
term assessment of the National Highway System (NHS), and other public 
roads included in the plan at the option of the State DOT, as it 
relates to managing its physical assets and laying out a set of 
investment strategies to address the condition and system performance 
gaps. This document describes how the highway network system will be 
managed to achieve a desired level of condition and performance while 
managing the risks, in a financially responsible manner, at a minimum 
practicable cost over the life cycle of its assets. The term asset 
management plan under this part is the risk-based asset management plan 
that is required under 23 U.S.C. 119(e) and is intended to carry out 
asset management as defined in 23 U.S.C. 101(a)(2).
    Bridge as used in this part, is defined in 23 CFR 650.305, the 
National Bridge Inspection Standards.
    Investment strategy means a set of strategies that result from 
evaluating various levels of funding to achieve a desired level of 
condition to achieve and sustain a state of good repair and system 
performance at a minimum practicable cost while managing risks.
    Life-cycle cost means the cost of managing an asset class or asset 
sub-group for its whole life, from initial construction to the end of 
its service life.
    Life-cycle cost analysis means a process to estimate the cost of 
managing an asset class, or asset sub-group over its whole life with 
consideration for minimizing cost while preserving or improving the 
condition.
    Performance of the NHS refers to the effectiveness of the NHS in 
providing for the safe and efficient movement of people and goods where 
that performance can be affected by physical assets. This term does not 
include the performance measures established for performance of the 
Interstate System and performance of the NHS (excluding the Interstate 
System) under 23 U.S.C. 150(c)(3)(ii)(A)(IV)-(V).
    Performance gap means the gap between the current condition of an 
asset, asset class, or asset sub-group, and the targets the State DOT 
establishes for condition of the asset, asset class, or asset sub-
group. It also means the gap between the current performance and 
desired performance of the NHS that can only be achieved through 
improving the physical assets.
    Risk means the positive or negative effects of uncertainty or 
variability upon agency objectives.
    Risk management means the processes and framework for managing 
potential risks, including identifying, analyzing, evaluating, and 
addressing the risks to assets and system performance.
    Statewide Transportation Improvement Program (STIP) has the same 
meaning as defined in Sec.  450.104 of this title.
    Work type means maintenance, preservation, repair, rehabilitation, 
and replacement, as well as initial construction, reconstruction, 
resurfacing, and upgrade.


Sec.  515.007  Process for establishing the asset management plan.

    (a) A State shall develop a risk-based asset management plan that 
describes how the highway network system, including the NHS, will be 
managed to achieve a desired level of condition and performance while 
managing the risks, in a financially responsible manner, at a minimum 
practicable cost over the life cycle of its assets. The State DOT shall 
develop and use, at a minimum the following processes to prepare its 
asset management plan:
    (1) A State DOT shall establish a process for conducting 
performance gap analysis to identify deficiencies hindering progress 
toward improving and preserving the NHS and achieving and sustaining 
the desired state of good repair. At a minimum, the State DOT

[[Page 9250]]

shall address the following in the gap analysis:
    (i) The performance targets for the condition of Interstate highway 
pavements, non-Interstate NHS highway pavements, and NHS bridges as 
established by the State DOT under 23 U.S.C. 150(d) once promulgated. 
If a State DOT decides to include other public roads in the asset 
management plan, then the desired performance targets for those public 
roads shall be included as well;
    (ii) The gaps, if any, in the effectiveness of the NHS in providing 
for the safe and efficient movement of people and goods where it can be 
affected by physical assets;
    (iii) The gaps, if any, between the existing condition of the 
assets, asset classes, or asset sub-groups and the State DOT's 
performance targets; and
    (iv) Alternative strategies to close or address the identified 
gaps.
    (2) A State DOT shall establish a process for conducting life-cycle 
cost analysis for an asset class (i.e., a group of assets with the same 
characteristics and function) or asset sub-group (i.e., a group of 
assets within an asset class with the same characteristics and 
function) at the network level (network to be defined by the State 
DOT). As a State DOT develops the life-cycle cost analysis, the State 
DOT should include future changes in demand; information on current and 
future environmental conditions including extreme weather events, 
climate change, and seismic activity; and other factors that could 
impact whole of life costs of assets. The State DOT may propose 
excluding one or more asset sub-groups from its life-cycle cost 
analysis if the State DOT can demonstrate to FHWA the exclusion of the 
sub-group would have no material adverse effect on the development of 
sound investment strategies due to the limited number of assets in the 
sub-group, the level of cost impacts associated with managing the 
assets in the sub-group, or other supportable grounds. A life-cycle 
cost analysis process shall, at a minimum, include the following:
    (i) Desired condition for each asset class or asset sub-group;
    (ii) Identification of deterioration models for each asset class or 
asset sub-group;
    (iii) Potential work types, including the treatment options for the 
work types, across the whole life of each asset class or asset sub-
group with their relative unit cost; and
    (iv) A strategy for managing each asset class or asset sub-group by 
minimizing its life-cycle costs, while achieving the performance 
targets set by the State DOT for the condition of Interstate highway 
pavements, non-Interstate NHS highway pavements, and NHS bridges under 
23 U.S.C. 150(d).
    (3) A State DOT shall establish a process for developing a risk 
management plan.
    This process shall, at a minimum, produce the following 
information:
    (i) Identification of risks that can affect the NHS condition and 
effectiveness as they relate to the safe and efficient movement of 
people and goods, including risks associated with current and future 
environmental conditions, such as extreme weather events, climate 
change, seismic activity, and risks related to recurring damage and 
costs as identified through the evaluation carried out under Sec.  
515.019;
    (ii) An assessment of the identified risks to assets and the 
highway system included in the plan in terms of the likelihood of their 
occurrence and their impact and consequence if they do occur;
    (iii) An evaluation and prioritization of the identified risks;
    (iv) A mitigation plan for addressing the top priority risks;
    (v) An approach for monitoring the top priority risks; and
    (vi) A summary of the evaluations carried out under Sec.  515.019 
that discusses, as a minimum, the results relating to the State's 
existing pavements and bridges on the NHS, and any other pavement or 
bridge included in the asset management plan at the option of the State 
DOT.
    (4) A State DOT shall establish a process for the development of a 
financial plan that identifies annual costs over a minimum period of 10 
years. The financial plan shall, at a minimum, include:
    (i) The estimated cost of expected future work to implement 
investment strategies contained in the asset management plan, by State 
fiscal year and work type;
    (ii) The estimated funding levels that are expected to be 
reasonably available, by fiscal year, to address the costs of future 
work types. State DOTs may estimate the amount of available funding 
using historical values where the future funding amount is uncertain;
    (iii) Identification of anticipated funding sources; and
    (iv) An estimate of the value of the agency's pavements and bridge 
assets and the needed investment on an annual basis to maintain the 
value of these assets.
    (5) A State DOT shall establish a process for developing investment 
strategies meeting the requirements in Sec.  515.009(f). This process 
must describe how the investment strategies are influenced, at a 
minimum, by the following:
    (i) Performance gap analysis required under paragraph (a)(1) of 
this section;
    (ii) Life-cycle cost analysis for asset classes or asset sub-groups 
resulting from the process required under paragraph (a)(2) of this 
section;
    (iii) Risk management analysis resulting from the process required 
under paragraph (a)(3) of this section; and
    (iv) Anticipated available funding and estimated cost of expected 
future work types associated with various candidate strategies based on 
the financial plan required by paragraph (a)(4) of this section.
    (b) Each State DOT shall use bridge and pavement management systems 
to analyze the condition of Interstate highway pavements, non-
Interstate NHS pavements, and NHS bridges in accordance with 23 U.S.C. 
150(c)(3)(A)(i), for the purpose of developing and implementing the 
asset management plan required under this part. These bridge and 
pavement management systems shall include, at a minimum, formal 
procedures for:
    (1) Collecting, processing, storing, and updating inventory and 
condition data for all NHS bridge and pavement assets;
    (2) Forecasting deterioration for all NHS bridge and pavement 
assets;
    (3) Determining the life-cycle benefit-cost analysis of alternative 
strategies (including a no action decision) for managing the condition 
of all NHS bridge and pavement assets;
    (4) Identifying short- and long-term budget needs for managing the 
condition of all NHS bridge and pavement assets;
    (5) Determining the optimal strategies for identifying potential 
projects for managing pavements and bridges; and
    (6) Recommending programs and implementation schedules to manage 
the condition of all Interstate highway pavements, non-Interstate NHS 
highway pavements, and NHS bridge assets within policy and budget 
constraints.
    (c) The head of the State DOT shall approve the asset management 
plan.


Sec.  515.009  Asset management plan requirements.

    (a) A State DOT shall develop and implement an asset management 
plan to improve or preserve the condition of the assets and improve the 
performance of the NHS in accordance with the requirements of this 
part. If the State DOT elects to include other public roads in its 
plan, all asset management process and plan requirements in this part 
shall apply. Asset management

[[Page 9251]]

plans must describe how the State DOT will carry out asset management 
as defined in Sec.  515.005.
    (b) An asset management plan shall include, at a minimum, a summary 
listing of each of the following assets, regardless of ownership:
    (1) Pavements on the Interstate System;
    (2) Pavements on the NHS (excluding the Interstate System); and
    (3) Bridges on the NHS.
    (c) In addition to the assets specified in paragraph (b) of this 
section, State DOTs are encouraged, but not required, to include all 
other NHS infrastructure assets within the right-of-way corridor. 
Examples of other assets include tunnels, ancillary structures, and 
signs. If a State DOT decides to include other such assets on the NHS 
in its asset management plan, or to include assets on other public 
roads, the State DOT shall evaluate and manage those assets consistent 
with the provisions of this part.
    (d) The minimum content for an asset management plan under this 
part includes a discussion of each element in this paragraph (d).
    (1) Asset management objectives. The objectives should align with 
the agency's mission. The objectives must be consistent with the 
purpose of asset management, which is to achieve and sustain the 
desired state of good repair over the life cycle of the assets at a 
minimum practicable cost.
    (2) Asset management measures and targets, including those 
established pursuant to 23 U.S.C. 150 for pavements and bridges on the 
NHS. The plan must include measures and associated targets the State 
DOT can use in assessing the condition of the assets and performance of 
the highway system as it relates to those assets. The measures and 
targets must be consistent with the objective of achieving and 
sustaining the desired state of good repair. The State DOT must include 
the measures established under 23 U.S.C. 150(c)(3)(A)(ii)(I)-(III), 
once promulgated in 23 CFR part 490, for the condition of pavements on 
the Interstate System, the condition of pavements on the NHS (excluding 
the Interstate), and the condition of bridges on the NHS. The State DOT 
also must include the targets the State DOT has established for the 
measures required by 23 U.S.C. 150(c)(3)(A)(ii)(I)-(III), once 
promulgated, and report on such targets in accordance with 23 CFR part 
490. The State DOT's process may permit the inclusion of measures and 
targets for the NHS that the State DOT established through pre-existing 
management efforts or develops through new efforts if the State DOT 
wishes to use such additional measures and targets to supplement 
information derived from the measures and targets required under 23 
U.S.C. 150.
    (3) A summary listing of the Interstate pavement assets, non-
Interstate NHS pavement assets, and NHS bridge assets, including a 
description of the condition of those assets, regardless of ownership 
of the pavement and bridge assets. The summary listing must include a 
description of the condition of those assets based on the performance 
measures established under 23 U.S.C. 150(c)(3)(A)(ii) for condition, 
once promulgated. If a State DOT decides to include other public roads 
in the asset management plan, the State DOT should include a summary 
listing of these assets as well, including a description of the 
condition of those assets. Where applicable, the description of 
condition should be informed by the evaluation required under Sec.  
515.019. The processes established by State DOTs shall include a 
provision for the State DOT to obtain necessary data from other NHS 
owners in a collaborative and coordinated effort
    (4) Performance gap identification.
    (5) Life-cycle cost analysis.
    (6) Risk management analysis, including the results of the periodic 
evaluations under Sec.  515.019 for assets included in the plan.
    (7) Financial plan.
    (8) Investment strategies.
    (e) An asset management plan shall cover, at a minimum, a 10-year 
period.
    (f) An asset management plan shall establish and discuss a set of 
investment strategies leading to a program of projects that would
    (1) Achieve and sustain a desired state of good repair over the 
life cycle of the assets,
    (2) Improve or preserve the condition of the assets and the 
performance of the NHS relating to physical assets,
    (3) Make progress toward achievement of the State targets for asset 
condition and performance of the NHS in accordance with 23 U.S.C. 
150(d), and
    (4) Support progress toward the achievement of the national goals 
identified in 23 U.S.C. 150(b).
    (g) A State DOT must include in its plan a description of how the 
analyses required under Sec.  515.007 support the State DOT's 
strategies. The plan also must describe how the strategies satisfy the 
requirements in paragraph (f)(1) through (4) of this section.
    (h) A State DOT should select such projects for inclusion in the 
STIP to support its efforts to achieve the goals in paragraphs (f)(1) 
through (4) of this section.
    (i) A State DOT is required to make its asset management plan 
available to the public, and is encouraged to do so in a format that is 
easily accessible.
    (j) Inclusion of performance measures and State DOT targets 
established pursuant to 23 U.S.C. 150 in the asset management plan does 
not relieve the State DOT of any performance management requirements, 
including 23 U.S.C. 150(e) reporting, established in other parts of 
this title.


Sec.  515.011  Phase-in of asset management plan development.

    (a) A State DOT may choose a phase-in option for the development of 
its initial asset management plan, which must be submitted to FHWA by 
[date 1 year after effective date of final rule] as provided in Sec.  
515.013(a). A State DOT may elect to submit its initial plan by 
following the requirements in this section.
    (b) The initial plan shall describe the State DOT's processes for 
developing its risk-based asset management plan, including the 
policies, procedures, documentation, and implementation approach that 
satisfy the requirements of this part. The plan also must contain 
measures and targets for assets covered by the plan. For other parts of 
the initial plan, the State DOT shall use the best available 
information to meet the requirements of Sec. Sec.  515.007 and 515.009. 
The investment strategies required by Sec.  515.007(a)(8) must support 
progress toward the achievement of the national goals identified in 23 
U.S.C. 150(b), but are not required to address the State's 23 U.S.C. 
150(d) targets for asset condition and performance of the NHS unless 
the State DOT has established those targets at least 6 months before 
the plan submission deadline in Sec.  515.013(a). The initial asset 
management plan may exclude one or more of the necessary analyses with 
respect to the following required asset management processes:
    (1) Life-cycle cost analysis required under Sec.  515.007(a)(5);
    (2) The risk management analysis required under Sec.  
515.007(a)(6); and
    (3) Financial plan under Sec.  515.007(a)(7).
    (c) Not later than 18 months after the effective date of the final 
rulemaking for pavement and bridge condition measures pursuant to 23 
U.S.C. 150, a State DOT that used the phase-in option under this 
section for its initial plan submission shall amend its asset 
management plan to include analyses performed using FHWA-certified 
processes and the section 150 measures and State DOT targets for 
pavements and bridges on the NHS. The FHWA may extend the 18-month time 
period as

[[Page 9252]]

needed to provide 12 months between the time FHWA certifies the State 
DOT's processes under 23 U.S.C. 119(e)(6)(A) and the date the amended 
plan is due to give the State DOT adequate time to incorporate section 
150 measures and targets and complete the required Sec.  515.007 
analyses using FHWA-certified processes. To qualify for an extension, 
the State DOT's initial plan must meet the initial plan requirements in 
Sec.  515.011. The State DOT shall submit its amended plan in 
accordance with the provisions in Sec.  515.013(d). The amended plan 
must meet all requirements in Sec. Sec.  515.007 and 515.009. This 
includes investment strategies that are developed based on the analyses 
from all processes required under Sec.  515.007, and meet the 
requirements in 23 U.S.C. 119(e)(2).


Sec.  515.013  Process certification and plan consistency review.

    (a) Plan deadline. Not later than [date 1 year after effective date 
of final rule], the State DOT shall submit a State-approved asset 
management plan to the FHWA.
    (b) Certification of Processes under 23 U.S.C. 119(e)(6). The FHWA 
will treat the State DOT's submission of a State-approved asset 
management plan as a request for certification of the State's DOT's 
plan development processes under 23 U.S.C. 119(e)(6). No later than 90 
days after the date on which the FHWA receives the State DOT's 
documentation, the FHWA shall decide whether the State DOT's processes 
for developing its asset management plan meet the requirements of this 
part.
    (1) If FHWA determines that the processes used by a State DOT to 
develop and maintain the asset management plan do not meet the 
requirements established under this part, FHWA will send the State DOT 
a written notice of the denial of certification or recertification, 
including a listing of the specific requirement deficiencies.
    (2) Upon receiving a notice of denial of certification or 
recertification, the State DOT shall have 90 days from receipt of the 
notice to address the requirement deficiencies identified in the notice 
and resubmit the State DOT's processes to FHWA for review and 
certification.
    (3) The FHWA may extend the State DOT's 90-day period to cure 
deficiencies upon request.
    (4) If FHWA finds that a State DOT's asset management processes 
substantially meet the requirements of this part except for minor 
deficiencies, FHWA may certify or recertify the State DOT's processes 
as being in compliance, but the State DOT must take actions to correct 
the minor deficiencies within 90 days of receipt of the notification of 
certification. The FHWA may extend this 90-day period upon request of 
the State DOT. The State shall notify FHWA, in writing, when corrective 
actions are completed.
    (c) Determination of consistency under 23 U.S.C. 119(e)(5). 
Beginning with the first fiscal year following [effective date of final 
rule] and in each year thereafter, FHWA will determine not later than 
August 31 whether the State DOT has developed and implemented an asset 
management plan consistent with 23 U.S.C. 119. In making the annual 
consistency determination, the FHWA will consider the most recent asset 
management plan submitted by the State DOT, as well as any 
documentation submitted by the State DOT to demonstrate implementation 
of the plan. The FHWA will review a State DOT's asset management plan 
to ensure that it was developed with the processes certified under this 
section and is consistent with other applicable requirements in this 
part. The State DOT's plan is not otherwise subject to FHWA approval. 
The FHWA may determine an initial plan is consistent with 23 U.S.C. 119 
and the requirements of this part if it is submitted by the deadline in 
paragraph (a) of this section and complies with Sec.  515.011.
    (d) Plan updates, amendments, and recertification of State DOT 
processes. A State DOT shall update and resubmit its asset management 
plan to the FHWA for a new process certification on October 1 every 4 
years following the year of initial certification of the State DOT's 
processes. Whenever the State DOT amends its asset management plan, it 
must submit the amended plan to the FHWA for a new process 
certification and consistency determination at least 30 days prior to 
the deadline for the next FHWA consistency determination under 
paragraph (c) of this section. Minor technical corrections and 
revisions with no foreseeable material impact on the accuracy and 
validity of the analyses and investment strategies in the plan do not 
require submission to FHWA.


Sec.  515.015  Penalties.

    (a) Beginning with the second fiscal year after [effective date of 
final rule] and in each fiscal year thereafter, if a State DOT has not 
developed and implemented an asset management plan consistent with the 
requirements of 23 U.S.C. 119 and this part, the maximum Federal share 
for National Highway Performance Program projects shall be reduced to 
65 percent for that fiscal year.
    (b)(1) Except as provided in paragraph (b)(2) of this section, if 
the State DOT has not developed and implemented an asset management 
plan that is consistent with the requirements of 23 U.S.C. 119 and this 
part and established the performance targets required under 23 U.S.C. 
150(d) regarding the condition and performance of the NHS by the date 
that is 18 months after the effective date of the final rule required 
under 23 U.S.C. 150(c), the FHWA will not approve any further projects 
using National Highway Performance Program funds.
    (2) The FHWA may extend the 18-month period if FHWA determines that 
the State DOT has made a good faith effort to develop and implement an 
asset management plan and establish the required performance targets.


Sec.  515.017  Organizational integration of asset management.

    (a) The purpose of this section is to describe how a State DOT may 
integrate asset management into its organizational mission, culture and 
capabilities at all levels.
    (b) A State DOT should establish organizational strategic goals and 
include the goals in its organizational strategic implementation plans 
with an explanation as to how asset management will help it to achieve 
those goals.
    (c) A State DOT should conduct a periodic self-assessment of the 
agency's capabilities to conduct asset management, as well as its 
current efforts in implementing an asset management plan. The self-
assessment should consider, at a minimum, the adequacy of the State 
DOT's strategic goals and policies with respect to asset management, 
whether asset management is considered in the agency's planning and 
programming of resources, including development of the STIP; whether 
the agency is implementing appropriate program delivery processes, such 
as consideration of alternative project delivery mechanisms, effective 
program management, and cost tracking and estimating; and whether the 
agency is implementing adequate data collection and analysis policies 
to support an effective asset management program.
    (d) Based on the results of the self-assessment, the State DOT 
should conduct a gap analysis to determine which areas of its asset 
management process require improvement. In conducting a gap analysis, 
the State DOT should:

[[Page 9253]]

    (1) Determine the level of organizational performance effort needed 
to achieve the objectives of asset management;
    (2) Determine the performance gaps between the existing level of 
performance effort and the needed level of performance effort; and
    (3) Develop strategies to close the identified organizational 
performance gaps and define the period of time over which the gap is to 
be closed.


Sec.  515.019  Periodic evaluations of facilities requiring repair or 
reconstruction due to emergency events.

    (a) A State DOT shall conduct a statewide evaluation of the State's 
existing roads, highways, and bridges eligible for funding under title 
23, United States Code, that have required repair and reconstruction 
activities on two or more occasions due to emergency events, to 
determine if there are reasonable alternatives to any of these roads, 
highways, and bridges. The evaluation shall consider the risk of 
recurring damage and cost of future repair under current and future 
environmental conditions. For purposes of this section, ``emergency 
event'' means a natural disaster or catastrophic failure due to 
external causes resulting in an emergency declared by the Governor of 
the State or an emergency or disaster declared by the President of the 
United States.
    (b) For purposes of this section, reasonable alternatives include 
work types that could achieve the following:
    (1) Reduce the need for Federal funds to be expended on emergency 
repair and reconstruction activities;
    (2) Better protect public safety and health and the human and 
natural environment; and
    (3) Meet transportation needs as described in the relevant and 
applicable Federal, State, local, and tribal plans and programs. 
Relevant and applicable plans and programs include the Long-Range 
Statewide Transportation Plan, STIP, Metropolitan Transportation Plan, 
and Transportation Improvement Program that are developed under part 
450 of this title.
    (c) Not later than [date 2 years after effective date of final 
rule], the State DOT must complete the evaluation for NHS highways and 
bridges and any other assets included in the State DOT's asset 
management plan. The State DOT must complete the evaluation for all 
other roads, highways, and bridges meeting the criteria for evaluation 
not later than [date 4 years after effective date of final rule], 
excluding federally-owned facilities. The State DOT shall update the 
evaluation after every emergency event to the extent needed to include 
facilities affected by the event. The State will review and update the 
evaluation at least every four years after the initial evaluation. In 
establishing its evaluation cycle, the State DOT should consider how 
the evaluation can best inform the State DOT's preparation of its asset 
management plan and STIP.
    (d) The State DOT shall include in its asset management plan 
developed pursuant to Sec. Sec.  515.007 and 515.009, a summary of the 
evaluation for any roads, highways, and bridges included in the asset 
management plan. The results of the evaluation of those assets, 
including any update following an emergency event, shall be addressed 
in the asset management plan's risk analysis as provided in Sec.  
515.007(a)(6).
    (e) The State DOT must make the evaluation available to the FHWA 
upon request.

[FR Doc. 2015-03167 Filed 2-19-15; 8:45 am]
BILLING CODE 4910-22-P


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