Authority: Title 2.2, Chapter 2, Article 10, § 2.2-201, and Titles 33, 46, and 58, Code of Virginia.

A. The transportation policy goals enumerated in this Act shall be implemented by the Secretary of Transportation, including the Secretary acting as Chairman of the Commonwealth Transportation Board.

1. The maintenance of existing transportation assets to ensure the safety of the public shall be the first priority in budgeting, allocation, and spending. The highway share of the Transportation Trust Fund shall be used for highway maintenance and operation purposes prior to its availability for new development, acquisition, and construction.

2. The efficient and cost-effective movement of people and goods will consider the needs in, and connectivity of, all modes of transportation, including bicycling, walking, public transportation, highways, freight and passenger rail, ports, and airports. The planning, development, construction, and operations of Virginia's transportation facilities will reflect this goal.

3. Stewardship of the environment will be a priority in the allocation of resources and the planning and evaluation of projects and activities by transportation agencies.

4. To the greatest extent possible, the appropriation of transportation revenues shall reflect planned spending of such revenues by agency and by program. The maximization of all federal transportation funds available to the Commonwealth shall be paramount in the budgetary, spending, and allocation processes. The Secretary is hereby authorized to take all actions necessary to ensure that federal transportation funds are allocated and utilized for the maximum benefit of the Commonwealth, whether such funds are authorized under P.L. 105-178 of the 105th Congress, or any successor or related federal transportation legislation.

5. The Secretary may ensure that appropriate action is taken to maintain a minimum cash balance and/or cash reserve in the Highway Maintenance and Operating fund.

6.a. The Commonwealth Transportation Board is hereby authorized to apply for, execute and/or endorse applications submitted by private entities to obtain federal credit assistance for one or more qualifying transportation infrastructure projects or facilities to be developed pursuant to the Public-Private Transportation Act of 1995, as amended. Any such application, agreement and/or endorsement shall not financially obligate the Commonwealth or be construed to implicate the credit of the Commonwealth as security for any such federal credit assistance.

b. The Commonwealth Transportation Board is hereby authorized to pursue or otherwise apply for, and execute, an agreement to obtain financing using a federal credit instrument for project financings otherwise authorized by this Act or other Acts of Assembly.

A1.  Notwithstanding any other provision of law and prior to the allocation of any other funding to highway construction projects, the Commonwealth Transportation Board shall allocate sufficient funding to interstate, primary, and urban projects that were identified as complete and requiring a deficit payoff in the FY 2005-2010 Six-Year Improvement Program so that they are fully funded in the second year.

B.1. The Secretary shall ensure that the allocation of transportation funds apportioned and for which obligation authority is expected to be available under federal law shall be in accordance with such laws and in support of the transportation policy goals enumerated in this Act. By June 1 of each year, the Secretary, as Chairman of the Board, shall report to the Governor and General Assembly on the allocation of such federal transportation funds.

2. 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.

3. Projects funded, in whole or part, from federal funds apportioned under 23 USC 149 as congestion mitigation and air quality improvement, shall be selected as directed by the Board and in such a manner that the funds are obligated within 24 months of their allocation and expended within 48 months of their authorization. If the requirements included in this paragraph are not met by such agency or recipient, then the Board shall use such federal funds for any other project eligible under 23 USC 149.

4. Funds apportioned under federal law for the Surface Transportation Program shall be distributed and administered in accordance with federal requirements, outlined in the following:

a. 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.

b. 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.

c. Fifty percent shall be allocated on the basis of population, as prescribed by federal law.

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

e. Six percent shall be allocated for public transportation purposes.

5. Funds apportioned under federal law for the Minimum Guarantee Equity 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. Ten percent of the Minimum Guarantee funding shall be allocated to public transportation projects. 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 public transportation's portion of federal Minimum Guarantee Equity program funds.

6. 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.

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

8.a. 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.

b. Federal funds apportioned as the Highway Bridge Program shall be allocated and obligated as required by federal law to eligible projects across the Commonwealth. The Commonwealth Transportation Board shall consider the sufficiency and deficiency ratings of such eligible projects in making their allocations.

c. 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 projects or 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.

9.  Appropriations in this act related to federal revenues outlined in this section may be adjusted by the Director, Department of Planning and Budget, upon request from the Secretary of Transportation, based upon the outcome of any reauthorization of the federal transportation authorizing legislation.