Since the beginning of the 112 th Congress, convened in January 2011, the House and Senate have observed a ban on earmarks, formally known as congressionally directed spending. The ban has led to changes in the way transportation funding decisions are made. This report explains what earmarks are and discusses their use in surface transportation finance. It then discusses how federal transportation funding is distributed with a ban in place and how Members of Congress might influence the distribution. The structure of federal transportation funding is largely determined in periodic transportation authorization legislation, which typically continues some existing programs (often with modifications), allows some programs to expire, and creates new programs. The most recent authorization act in surface transportation, for example, is the Fixing America's Surface Transportation (FAST) Act ( P.L. 114-94 ), enacted in December 2015. The vast majority of federal transportation funding is distributed directly to states, local governments, and transportation authorities by formulas that are set in these laws. For example, under the FAST Act about 92% of highway program spending through FY2020 will be distributed by formula. This is up from the 84% distributed by formula in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA; P.L. 109-59 ), the 2005 law that was the last long-term surface transportation authorization enacted prior to the earmark ban. Under the formula programs, the decisions about which projects get funded are made by state and local governments, subject to federal guidelines. Authorization legislation also creates a number of discretionary (non-formula) transportation grant programs. These programs collectively distribute a relatively small portion of federal transportation funding. Under these programs, the U.S. Department of Transportation (DOT) awards grants at its discretion through a competitive application process. For several years prior to 2011, funding for discretionary transportation grant programs was heavily earmarked by Congress in authorization legislation and in the annual DOT appropriations acts. In addition, Congress on occasion earmarked portions of highway formula funding. Earmarks were not prevalent in all parts of the transportation funding process. For example, the Federal Aviation Administration (FAA) budget historically was largely free of earmarks, with the Airport Improvement Program's discretionary funding being the major exception. The magnitude of transportation earmarking is difficult to estimate. Earmarks were found in both authorization and appropriations legislation. While Congress specifically identified "earmarks and congressionally directed spending items" in appropriations legislation from FY2008 through FY2011, those lists did not include earmarks in authorization legislation, such as those found in SAFETEA, that might be funded in that fiscal year. DOT's Inspector General (IG) examined transportation earmarking in both the authorization and appropriations bills for FY2006 and estimated that 13.5% of total budget authority provided to DOT in that year was congressionally directed. The IG also estimated that 80% of the earmarks originated in authorizations and 20% in the appropriations bill ( Table 1 ). A major attraction of transportation earmarks to Members is that they provide specific, identifiable benefits for constituents. A downside is that earmarks often go unused because the amount of the earmark is too small for the project, because state and local authorities will not or cannot provide the necessary matching funds, or because the project is misidentified in law and the funding cannot be used unless Congress modifies the law. Funding for earmarks is typically available until expended, so unused earmarks may exist "on the books" for many years, sometimes decades, after enactment. Even if it is clear that a project will not be undertaken, earmarked funding usually cannot be spent for other purposes or rescinded absent congressional action. In the past, Congress has dealt with the issue of long-term unobligated earmarks in at least three ways. First, Congress has redesignated unused earmarks for other specific projects. This was done, for example, in the FY2003 DOT Appropriations Act ( P.L. 108-7 ). The current earmark ban does not allow earmarks to be redesignated for other specified projects. Second, Congress has rescinded budget authority for old earmarks as it did, for example, in the Department of Defense and Full-Year Continuing Appropriations Act, 2011 ( P.L. 112-10 , §§2210 and 2211). Third, Congress has also allowed old unused earmark funding ("orphaned earmarks") to be used for other transportation projects. Beginning with the Consolidated Appropriations Act, 2016 ( P.L. 114-113 , §125), for example, Congress has allowed states to redirect long-term unobligated earmarks to a surface transportation project within 50 miles of the original project. The legislation defines a long-term unobligated earmark as one that is over 10 years old and for which 90% or more of the funding remains unobligated. Similar language has been included in annual appropriations legislation enacted each year since then. The rules in both houses of Congress include identical definitions of "congressionally directed spending." The rules define an earmark as a provision or report language included primarily at the request of a [Member, Delegate, Resident Commissioner, or] Senator providing, authorizing, or recommending a specific amount of discretionary budget authority, credit authority, or other spending authority for a contract, loan, loan guarantee, grant, loan authority, or other expenditure with or to an entity, or targeted to a specific State, locality or Congressional district, other than through a statutory or administrative formula-driven or competitive award process. This definition covers earmarks in authorization and appropriations bills as well as in committee reports. Provisions in committee reports may not have the force of law but are often used to give guidance to executive branch departments. One example of such an earmark appeared in the conference committee's explanatory statement on the Omnibus Appropriations Act, 2009 ( P.L. 111-8 ): The definition of "congressionally directed spending item" under House and Senate rules appears to permit some "soft" transportation earmarks. Whereas "hard" earmarks specify the project place, purpose, and funding amount in bill or bill report language, "soft" earmarks do not specify the amount of funding. Two types of soft earmarks are found in federal transportation legislation: place naming and road naming. Under place naming, the project location is named in the bill or report language, but no funding amount is designated. The appropriators direct the agency to give priority to grant applications from the named places. This form of congressional designation has been most commonly used to influence Airport Improvement Program (AIP) spending. For example, in the FY1990 Department of Transportation Appropriations bill, the House conference report (H.Rept. 101-183) urged the Federal Aviation Administration (FAA) to give priority to grant applications involving the construction or further development of the following airports: Akron-Canton Regional Airport, Ohio. Alexander Hamilton Airport, Virgin Islands ... By not designating the amount, place naming appears not to be covered by the definition of earmarks under current House and Senate rules. Road naming is similar to place naming, but has been used less often. The Surface Transportation Assistance Act of 1982 ( P.L. 97-424 ; H.Rept. 97-987) directed the states to give priority in use of federal highway funds to the primary routes designated in a particular committee print. Whether soft earmarks are included in legislation or in conference reports under an earmark ban depends on how strictly the ban is enforced by congressional leaders. The definition of an earmark in congressional rules also appears to exclude most of the Capital Investment Grants (CIG) Program funding distributed by the Federal Transit Administration (FTA) (also known as New Starts). Prior to the earmark ban, Congress had appropriated amounts for specific projects each year, but these projects were chosen through a competitive, multi-step approval process that is administered by FTA according to law. However, appropriators had sometimes added projects to the list of projects chosen through this process, and these additional projects may have fallen within the definition of earmark in House and Senate rules. Since the earmark ban, Congress has not named projects in the appropriations bill, but it has sometimes prioritized the available funding. For example, in the FY2015 appropriations bill ( P.L. 113-235 ) Congress directed that when distributing funds among Recommended New Starts [CIG] Projects, the Administrator shall first fully fund those projects covered by a full funding grant agreement, then fully fund those projects whose section 5309 share is less than 40 percent, and then distribute the remaining funds so as to protect as much as possible the projects' budgets and schedules. In the 112 th Congress, which convened in January 2011, the House and Senate began observing an earmark ban. The ban is not a formal rule in either the House or the Senate, and thus is not enforced by points of order. Instead, the ban has been established through party and committee rules and protocols, and is enforced by chamber and committee leadership. The rules of the House Republican Conference for the 112 th Congress included a standing order labeled Earmark Moratorium that stated, "It is the policy of the House Republican Conference that no Member shall request a congressional earmark, limited tax benefit, or limited tariff benefit, as such terms have been described in the Rules of the House." This was extended for the 113 th , 114 th , and 115 th Congresses. The Senate Republican Conference adopted a similar resolution on November 14, 2012.