Authority: Title 2.2, Chapter 2, Article 10, § 2.2-201, Code of Virginia.

A.1. The Commonwealth Transportation Board is hereby authorized to enter into project agreements with the United States Government to secure the maximum level of federal funding for transportation programs in the Commonwealth, including agreements that provide for the allocation of funds necessary to comply with federal law but which may differ from formulae provided in the Code of Virginia in the following areas:

a. Funds apportioned under federal law for the Interstate System and the National Highway System shall be treated, for state formulae matching purposes, as interstate funds, pursuant to § 33.1-23.1, Code of Virginia; except that the Commonwealth Transportation Board is authorized to transfer amounts that may be necessary to maintain allocations to the primary, secondary and urban systems as set out in § 33.1-23.1 on a consistent basis.

b. Funds apportioned under federal law for congestion mitigation and air quality improvement shall be allocated to designated projects in clean air nonattainment and maintenance areas of the Commonwealth in addition to funds allocated to these areas pursuant to § 33.1-23.1, Code of Virginia.

c. Funds apportioned under federal law for the Surface Transportation Program shall be distributed and administered in accordance with federal requirements, as follows:

d.1) Ten percent shall be set aside for a statewide enhancement program less the amounts allowed for transfer to the state primary, secondary and urban systems as set out in § 33.1-23.1, with grants made to projects across the state. The amount set aside each year may be adjusted to correspond to revised federal apportionment estimates.

2) Ten percent shall be set aside for a statewide safety program with grants made to projects across the state. The amount set aside each year may be adjusted to correspond to revised federal apportionment estimates.

3) Fifty percent shall be allocated on the basis of population, as prescribed by federal law; and

4) Twenty-four percent shall be allocated pursuant to § 33.1-23.1 of the Code of Virginia.

5) Six percent shall be allocated for public transit purposes.

e. Funds apportioned under federal law for the Minimum Guarantee Equity program and the Bridge Replacement and Rehabilitation program shall be allocated as required by federal law and through the state allocation formula set out in § 33.1-23.1, except for those Minimum Guarantee funds allocated to eligible projects at the discretion of the Commonwealth Transportation Board. In the first and second years, funds for contract fees paid by the Virginia Railway Express for access to the rights-of-way of CSX Transportation, Norfolk Southern Corporation, and the National Railroad Passenger Corporation shall be allocated from the Department of Rail and Public Transportation's portion of federal Minimum Guarantee Equity program funds. Ten percent of Minimum Guarantee funding shall be allocated to transit projects. After each action to allocate funds under this provision, the Commonwealth Transportation Board shall submit to the House Appropriations and Senate Finance Committees a list of such approved discretionary projects and the rationale for such approval.

f. Funds allocated pursuant to § 33.1-23.1 B 2 and B 3, Code of Virginia, may be utilized on any project eligible under Title 23, United States Code, Section 133, upon request of the local governing body and approval of the Commonwealth Transportation Board.

g. The required matching funds for the Congressionally-designated High Priority projects are to be provided by the mode, system or recipient of the federal-aid funding.

h.1) Federal funds provided to the National Highway System, Surface Transportation Program, Minimum Guarantee Program and Congestion Mitigation and Air Quality categories as well as the required State matching funds may be allocated by the Commonwealth Transportation Board for transit purposes under the same rules and conditions authorized by federal law. The Commonwealth Transportation Board, in consultation with the appropriate local and regional entities, may allocate to local and regional public transit operators, for operating and/or capital purposes, state revenues designated by formula for primary, urban, and secondary highways.

2) If a regional area (or areas) of the Commonwealth is determined to be not in compliance with Clean Air Act rules regarding conformity and as a result federal and/or state allocations, apportionments or obligations cannot be used to fund or support transportation programs in that area, such funds may be used to finance demand management, conformity, and congestion mitigation projects to the extent allowed by federal law. Any remaining amount of such allocations, apportionments, or obligations shall be set aside to the extent possible under law for use in that regional area.

2. The Commonwealth Transportation Board is hereby directed to continue its efforts to secure additional federal transportation funding from the TEA-21 discretionary and transit programs and through the annual federal appropriations processes to further the Commonwealth's transportation objectives.

B. Notwithstanding the provisions of § 58.1-638 of the Code of Virginia, the sales and use tax revenue for the fiscal year 2003, beginning July 1, 2002 and ending June 30 2003, generated by the one-half percent sales and use tax increase enacted by the 1986 Special Session of the General Assembly, excluding the payments required to be made to the Commonwealth Port Fund, the Commonwealth Airport Fund, and the Commonwealth Mass Transit Fund, shall be paid transferred into the general fund of the state treasury, excluding the payments required to be made to the Commonwealth Port Fund, the Commonwealth Airport Fund and the Commonwealth Mass Transit Fund. The State Comptroller shall make this transfer on a monthly basis in accordance with § 3-1.01 W and Item 491H2 of this act.

C.1. The Secretary of Transportation shall provide to the Governor, the Secretary of Finance, and the Chairmen of the House Appropriations, House Finance and Senate Finance Committees, on or before June 1 of each year, a report on the most recent transportation revenue estimates and present the draft/tentative Virginia Transportation Development Plan that addresses adjustments to the Department of Transportation’s highway system acquisition and construction program and highway system maintenance program, as well as any possible changes that may affect any of the Department of Transportation's funding levels, or any other agency's appropriation under the Secretary of Transportation. If submitted to the Secretary of Transportation within 15 days of receipt of the plan, written comment and review of these plans developed by the legislative committees must be considered prior to the adoption of the final Plan by the Commonwealth Transportation Board.

2. The Secretary of Transportation shall report on or before August 31 of each year on the transportation revenue estimates and collections for the fiscal year just ended. In addition, the Secretary shall provide a six-year report that includes the following: 1) spending by mode of transportation; 2) spending on highway maintenance by District; 3) spending by fund by district by system on construction projects, including expenditures for preliminary engineering and right-of-way acquisition; and 4) a comparison of actual spending to the allocations by mode, fund, district and system in accordance with Title 33.1, Code of Virginia.

3. The Secretary shall also report each year by November 1, April 1 and August 31 on the implementation of Chapters 1019 and 1044 of the Acts of Assembly of 2000. Such reports shall include information on 1) deposits, expenditures, and transfers; 2) the schedule of any proposed debt issues, including projects and funding levels included; and 3) the total and fiscal year-to-date expenditures on each project, and the remaining cost to complete all phases of each project.

C. The Secretary of Transportation, as chairman of the Commonwealth Transportation Board, shall provide to the Governor, the General Assembly, and the public, information on each project included in the Six-Year Improvement Program at least four times each fiscal year. The information shall include cost, expenditure and schedule information. The report shall also include information on the implementation of Chapters 1019 and 1044 of the Acts of Assembly of 2000. The Secretary shall notify the Governor, General Assembly, and the public how such information is being provided and can be obtained.

D. The General Assembly supports the development and deployment of magnetic levitation technology. The Secretary of Transportation is encouraged to facilitate its continued development through the continuation of the magnetic levitation transportation program authorized by Item 506 of Chapter 1073 of the Acts of Assembly of 2000.

E. The Secretary of Transportation, the staff of such agencies as designated by the Secretary, and the Department of the Treasury, shall work with the Debt Capacity Advisory Committee to develop a debt capacity model for transportation. The Debt Capacity Advisory Committee shall report the recommended model to the Governor and the General Assembly by January 1, 2004.

F. In accordance with § 2.2-1503 and § 33.1-23.1 of the Code of Virginia, the adjustments to the revenue plan for the Highway Maintenance and Operating Fund, Highway Construction Fund, and Mass Transit Fund shall be allocated by the Commonwealth Transportation Board as part of its annual update of the Six-Year Program.