SECTION 1. SHORT TITLE.

    This Act may be cited as the ``State Transportation Flexibility 
Act''.

SEC. 2. DIRECT FEDERAL-AID HIGHWAY PROGRAM.

    (a) In General.--Chapter 1 of title 23, United States Code, is 
amended by adding at the end the following:
``Sec. 171. Direct Federal-aid highway program
    ``(a) Election by State Not To Participate.--Notwithstanding any 
other provision of law and in accordance with this section, a State may 
elect not to participate in any Federal program relating to highways, 
including a Federal highway program under the Safe, Accountable, 
Flexible, Efficient Transportation Equity Act: A Legacy for Users 
(Public Law 109-59; 119 Stat. 1144), the Moving Ahead for Progress in 
the 21st Century Act (Public Law 112-141; 126 Stat. 405), the Fixing 
America's Surface Transportation Act (Public Law 114-94; 129 Stat. 
1312), this title, or title 49.
    ``(b) Direct Federal-Aid Highway Program.--
            ``(1) In general.--The Secretary shall carry out a direct 
        Federal-aid highway program (referred to in this section as the 
        `program') in accordance with the requirements of this section 
        under which the legislature of a State may elect, not fewer 
        than 90 days before the beginning of a fiscal year--
                    ``(A) to waive the right of the State to receive 
                amounts apportioned or allocated to the State under 
                this chapter for the fiscal year to which the election 
                relates; and
                    ``(B) to receive an amount for that fiscal year 
                that is determined in accordance with subsection (e) 
                for that fiscal year.
            ``(2) Effect.--On making an election under paragraph (1), a 
        State--
                    ``(A) assumes all Federal obligations relating to 
                each program that is the subject of the election; and
                    ``(B) shall fulfill those obligations using the 
                amounts transferred to the State under subsection (e).
            ``(3) Eligible years.--A State may make an election with 
        respect to fiscal year 2019 and any fiscal year thereafter.
    ``(c) State Responsibility.--
            ``(1) In general.--The Governor of a State making an 
        election under subsection (b) shall--
                    ``(A) agree to maintain the Interstate System in 
                accordance with the current Interstate System program;
                    ``(B) submit a plan to the Secretary describing--
                            ``(i) the purposes, projects, and uses to 
                        which amounts received under the program will 
                        be put; and
                            ``(ii) which programmatic requirements of 
                        this title the State elects to continue;
                    ``(C) agree to obligate or expend amounts received 
                under the program exclusively for projects that would 
                be eligible for funding under section 133(b) if the 
                State was not participating in the program; and
                    ``(D) agree--
                            ``(i) to report annually to the Secretary 
                        on the use of amounts received under the 
                        program; and
                            ``(ii) to make the report available to the 
                        public in an easily accessible format.
            ``(2) No federal limitation on use of funds.--Except as 
        provided in paragraph (1), the expenditure or obligation of 
        funds received by a State under the program shall not be 
        subject to any Federal requirement under this title (except for 
        this section), title 49, or any other Federal law (including 
        regulations).
            ``(3) Election irrevocable.--An election under subsection 
        (b) shall be irrevocable during the applicable fiscal year.
    ``(d) Effect on Preexisting Commitments.--An election under 
subsection (b) shall not affect any responsibility or commitment of the 
State under this title for any fiscal year with respect to--
            ``(1) a project or program funded under this title (other 
        than under this section); or
            ``(2) any project or program funded under this title in any 
        fiscal year for which an election under subsection (b) is not 
        in effect.
    ``(e) Transfers.--
            ``(1) In general.--The amount to be transferred to a State 
        under the program for a fiscal year shall be the portion of the 
        taxes appropriated to the Highway Trust Fund (other than for 
        the Mass Transit Account) for that fiscal year that is 
        attributable to highway users in that State during that fiscal 
        year, reduced by a pro rata share withheld by the Secretary to 
        fund contract authority for programs of the National Highway 
        Traffic Safety Administration and the Federal Motor Carrier 
        Safety Administration.
            ``(2) Transfers under program.--
                    ``(A) In general.--Transfers under the program--
                            ``(i) shall be made at the same time as 
                        deposits to the Highway Trust Fund are made by 
                        the Secretary of the Treasury; and
                            ``(ii) shall--
                                    ``(I) be made on the basis of 
                                estimates by the Secretary, in 
                                consultation with the Secretary of the 
                                Treasury, based on the most recent data 
                                available; and
                                    ``(II) include proper adjustments 
                                in amounts subsequently transferred to 
                                the extent prior estimates were in 
                                excess of, or less than, the amounts 
                                required to be transferred.
                    ``(B) Limitation.--
                            ``(i) In general.--An adjustment under 
                        subparagraph (A)(ii)(II) to any transfer may 
                        not exceed 5 percent of the transferred amount 
                        to which the adjustment relates.
                            ``(ii) Adjustment greater than 5 percent.--
                        If the adjustment required under subparagraph 
                        (A)(ii)(II) exceeds the percentage described in 
                        clause (i), the excess shall be taken into 
                        account in making subsequent adjustments under 
                        subparagraph (A)(ii)(II).
    ``(f) Application With Other Authority.--Any contract authority 
under this chapter (and any obligation limitation) authorized for a 
State for a fiscal year for which an election by that State is in 
effect under subsection (b)--
            ``(1) shall be rescinded or canceled; and
            ``(2) shall not be reallocated or distributed to any other 
        State under this chapter.
    ``(g) Maintenance of Effort.--
            ``(1) In general.--Not later than 30 days after the date on 
        which an amount is distributed to a State or State agency under 
        the program, the Governor of the State shall certify to the 
        Secretary that the State will maintain the effort of the State 
        with regard to State funding for the types of projects that are 
        funded by the amounts distributed.
            ``(2) Amounts.--As part of the certification under 
        paragraph (1), the Governor shall submit to the Secretary a 
        statement that identifies the amount of funds the State plans 
        to expend from State sources during the covered period for the 
        types of projects that are funded by the amounts.
    ``(h) Treatment of General Revenues.--For purposes of this section, 
any general revenue funds appropriated to the Highway Trust Fund shall 
be transferred to a State under the program in the manner described in 
subsection (e)(1).''.
    (b) Conforming Amendment.--The analysis for chapter 1 of title 23, 
United States Code, is amended by inserting after the item relating to 
section 170 the following:

``171. Direct Federal-aid highway program.''.

SEC. 3. ALTERNATIVE FUNDING OF PUBLIC TRANSPORTATION PROGRAMS.

    (a) In General.--Chapter 53 of title 49, United States Code, is 
amended by adding at the end the following:
``Sec. 5341. Alternative funding of public transportation programs
    ``(a) Definitions.--In this section--
            ``(1) the term `alternative funding program' means the 
        program established under subsection (c);
            ``(2) the term `covered program' means a Federal public 
        transportation program that is funded using amounts made 
        available from the Mass Transit Account of the Highway Trust 
        Fund; and
            ``(3) the term `Federal public transportation program' 
        means a Federal program that provides funding for public 
        transportation, including under--
                    ``(A) the Safe, Accountable, Flexible, Efficient 
                Transportation Equity Act: A Legacy for Users (Public 
                Law 109-59; 119 Stat. 1144);
                    ``(B) the Moving Ahead for Progress in the 21st 
                Century Act (Public Law 112-141; 126 Stat. 405);
                    ``(C) the Fixing America's Surface Transportation 
                Act (Public Law 114-94; 129 Stat. 1312);
                    ``(D) title 23; or
                    ``(E) this chapter.
    ``(b) Election by State Not To Participate.--Notwithstanding any 
other provision of law and in accordance with this section, a State may 
elect not to participate in any covered program.
    ``(c) Direct Public Transportation Funding Program.--
            ``(1) In general.--The Secretary shall carry out a direct 
        public transportation funding program in accordance with the 
        requirements of this section under which the legislature of a 
        State may elect, not fewer than 90 days before the beginning of 
        a fiscal year--
                    ``(A) to waive the right of the State to receive 
                amounts apportioned or allocated to the State under the 
                covered programs for the fiscal year to which the 
                election relates; and
                    ``(B) to receive an amount for that fiscal year 
                that is determined in accordance with subsection (f).
            ``(2) Effect.--On making an election under paragraph (1), a 
        State--
                    ``(A) assumes all Federal obligations relating to 
                each program that is the subject of the election; and
                    ``(B) shall fulfill those obligations using the 
                amounts transferred to the State under subsection (f).
            ``(3) Eligible years.--A State may make an election with 
        respect to fiscal year 2019 and any fiscal year thereafter.
    ``(d) State Responsibility.--
            ``(1) In general.--The Governor of a State that 
        participates in the alternative funding program shall--
                    ``(A) submit a plan to the Secretary that 
                describes--
                            ``(i) the purposes, projects, and uses to 
                        which amounts received under the alternative 
                        funding program will be put; and
                            ``(ii) which programmatic requirements of 
                        the covered programs the State elects to 
                        continue;
                    ``(B) agree to obligate or expend amounts received 
                under the alternative funding program exclusively for 
                projects that would be eligible for funding under the 
                covered programs if the State was not participating in 
                the alternative funding program;
                    ``(C) submit to the Secretary an annual report on 
                the use of amounts received under the alternative 
                funding program; and
                    ``(D) make the annual report available to the 
                public in an easily accessible format.
            ``(2) No federal limitation on use of funds.--Except as 
        provided in paragraph (1), the expenditure or obligation of 
        funds received by a State under the alternative funding program 
        shall not be subject to the requirements of--
                    ``(A) this chapter (except for this section);
                    ``(B) any covered program not under this chapter;
                    ``(C) title 23; or
                    ``(D) any other Federal law (including 
                regulations).
            ``(3) Election irrevocable.--An election under subsection 
        (c) shall be irrevocable during the applicable fiscal year.
    ``(e) Effect on Preexisting Commitments.--An election by a State 
under subsection (c) shall not affect any responsibility or commitment 
of the State with respect to a project or program funded under a 
covered program in a fiscal year for which an election under subsection 
(c) is not in effect.
    ``(f) Transfers.--
            ``(1) In general.--The amount to be transferred to a State 
        under the alternative funding program for a fiscal year shall 
        be the portion of the taxes transferred to the Mass Transit 
        Account of the Highway Trust Fund under section 9503(e) of the 
        Internal Revenue Code of 1986 for that fiscal year that is 
        attributable to highway users in that State during that fiscal 
        year.
            ``(2) Transfers under program.--
                    ``(A) In general.--Transfers under the alternative 
                funding program--
                            ``(i) shall be made at the same time as 
                        transfers to the Mass Transit Account of the 
                        Highway Trust Fund are made by the Secretary of 
                        the Treasury; and
                            ``(ii) shall--
                                    ``(I) be made on the basis of 
                                estimates by the Secretary, in 
                                consultation with the Secretary of the 
                                Treasury, based on the most recent data 
                                available; and
                                    ``(II) include proper adjustments 
                                in amounts subsequently transferred 
                                under the alternative funding program, 
                                to the extent prior estimates were in 
                                excess of, or less than, the amounts 
                                required to be transferred under the 
                                alternative funding program.
                    ``(B) Limitation.--
                            ``(i) In general.--An adjustment under 
                        subparagraph (A)(ii)(II) to any transfer may 
                        not exceed 5 percent of the transferred amount 
                        to which the adjustment relates.
                            ``(ii) Adjustment greater than 5 percent.--
                        If the adjustment required under subparagraph 
                        (A)(ii)(II) exceeds the percentage described in 
                        clause (i) of this subparagraph, the excess 
                        shall be taken into account in making 
                        subsequent adjustments under subparagraph 
                        (A)(ii)(II).
    ``(g) Application With Other Authority.--Any contract authority 
under a covered program (and any obligation limitation) authorized for 
a State for a fiscal year for which the State elects to participate in 
the alternative funding program shall be rescinded or canceled.
    ``(h) Maintenance of Effort.--
            ``(1) In general.--Not later than 30 days after the date on 
        which amounts are distributed to a State or State agency under 
        the alternative funding program, the Governor of the State 
        shall certify to the Secretary that the State will maintain the 
        effort of the State with regard to State funding for the types 
        of projects that are funded by the amounts distributed.
            ``(2) Amounts.--As part of the certification under 
        paragraph (1), the Governor shall submit to the Secretary a 
        statement that identifies the amount of funds the State plans 
        to expend from State sources for projects funded under the 
        alternative funding program during the fiscal year for which 
        the State elects to participate in the alternative funding 
        program.
    ``(i) Treatment of General Revenues.--For purposes of this section, 
any general revenue funds appropriated to the Mass Transit Account of 
the Highway Trust Fund shall be transferred to a State under the 
alternative funding program in the manner described in subsection 
(f)(1).''.
    (b) Conforming Amendment.--The analysis for chapter 53 of title 49, 
United States Code, is amended by inserting after the item relating to 
section 5340 the following:

``5341. Alternative funding of public transportation programs.''.
Output: State Transportation Flexibility Act  This bill allows a state to elect not to participate in the federal-aid highway program, including any federal highway program under the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, the Moving Ahead for Progress in the 21st Century Act, or the Fixing America's Surface Transportation (FAST) Act. The Department of Transportation (DOT) shall carry out a direct federal-aid highway program to permit a state legislature, at least 90 days before the beginning of a fiscal year, to elect to:   waive the state's right to receive apportioned or allocated funds under the federal-aid highway program, and  receive a prorated amount of taxes appropriated to the Highway Trust Fund (other than for the Mass Transit Account) which are attributable to highway users in the state.    The state making an election shall:   agree to maintain the Interstate System in accordance with the current Interstate System program;  submit a plan describing the purposes, projects, and uses to which such amounts will be put and the federal-aid highway programmatic requirements the state elects to continue;  agree to obligate or expend program amounts exclusively for projects that would be eligible for surface transportation program funding; and. agree to report annually to DOT on the use of amounts received under the program and to make the report publicly available.   DOT shall carry out a similar alternative funding program for public transportation programs.