Authority: Title 33.2, Chapter 3; Code of Virginia; Chapters 8, 9, and 12, Acts of Assembly of 1989, Special Session II.

A. From the appropriation for specialized state and federal programs funds shall be distributed as follows:

1. $99,958,646 the first year and $105,299,506 the second year in federal state and matching funds shall be allocated for regional Surface Transportation Funds and distributed to applicable metropolitan planning organizations pursuant to 23 USC 133;

2. $53,871,340 the first year and $55,272,403 the second year in federal and state matching funds shall be allocated for the Highway Safety Improvement Program pursuant to 23 USC 148;

3. $70,981,544 the first year and $69,805,236 the second year in federal and state matching funds shall be allocated for the Congestion Mitigation Air Quality program pursuant to 23 USC 149;

4. $150,000,000 the first year and $100,000,000 the second year shall be allocated for the Revenue Sharing Program pursuant to § 33.2-357, Code of Virginia;

5. $20,481,315 the first year and $20,104,007 the second year in federal funds shall be allocated for the Surface Transportation Block Grant Program Set-Aside to 23 USC 133(h).

6. $2,736,051 the first year and $4,183,261 the second year in state funds shall be allocated to the Virginia Transportation Infrastructure Bank pursuant to § 33.2-1500 et seq, Code of Virginia.

7. $1,368,025 the first year and $2,091,630 the second year in state funds shall be allocated to the Transportation Partnership Opportunity Fund pursuant to § 33.2-1529.1, Code of Virginia.

B. Notwithstanding § 33.2-358, Code of Virginia, the proceeds from the lease or sale of surplus and residue property purchased under this program in excess of related costs shall be applied to the State of Good Repair Program pursuant to § 33.2-369, Code of Virginia. Proceeds must be used on Federal Title 23 eligible projects.

C. The Director of the Department of Planning and Budget is authorized to increase the appropriation as needed to utilize amounts available from prior year balances in the dedicated funds and adjust items to the most recent Commonwealth Transportation Board budget.

D. Funds appropriated for legacy formula construction programs shall be used for the purposes enumerated in subsection C of § 33.2-358, Code of Virginia, or as previously appropriated.

E. Included in the amounts for specialized state and federal programs is the reappropriation of $145,700,000 the first year and $131,300,000 the second year from bond proceeds or dedicated special revenues for anticipated expenditure of amounts collected in prior years. The amounts will be provided from balances in the Capital Projects Revenue Bond Fund, Federal Transportation Grant Anticipation Revenue Bond Fund, Northern Virginia Transportation District Fund, State Route 28 Highway Improvement District Fund, U.S. Route 58 Corridor Development Fund and the Priority Transportation Fund. These amounts were originally appropriated when received or forecasted and are not related to FY 2017 and FY 2018 estimated revenues.

F. Revenue collected through innovative revenue efforts authorized by § 33.2-213, Code of Virginia, shall be dedicated to State of Good Repair efforts as outlined in § 33.2-369, Code of Virginia, after all related program and collection costs incurred by the Department are considered.

G. 1. Of the amounts provided in Item 449.10, Chapter 847 of the 2007 Acts of Assembly, $31,070,647 was dedicated to enumerated projects funded from the Transportation Partnership Opportunity Fund. This amount represents available authorization remaining after the completed advancement of acquisition and construction of the projects in the Item. Of this amount, $23,110,000 is now directed to Road Improvements at military installations in the Commonwealth. As part of the ongoing negotiations of a memorandum of agreement between the Department of the U.S. Army and the U.S. Department of Transportation and the Virginia Department of Transportation for the delivery of transportation projects as in-kind payments for parcel A-2 and A-3 at the former Ft. Monroe under the economic development conveyance in the Commonwealth of Virginia, the Virginia Department of Transportation shall request that the Department of the U.S. Army consider the reservation of funding included in this paragraph for improvements to the Ft. Eustis Boulevard interchange with I-64 at mile marker 250 which directly benefits Joint Base Langley-Eustis and the United States Army Training and Doctrine Command. Of this amount, $7,960,647 is now directed to Improvements at interstate rest areas throughout the Commonwealth.

2. Pursuant to the provisions of Item 449.10, 1., Chapter 847 of the 2007 Acts of Assembly, $20,000,000 was deposited to the Transportation Partnership Opportunity Fund (TPOF) for the purpose of purchasing right of way owned by Norfolk Southern Corporation and located between Newtown Road and the Oceanfront. The subsequent contract for the TPOF award signed between the Department of Transportation and the City of Virginia Beach, specified that if such funds were not utilized to extend light rail along the corridor to Virginia Beach, the funds were to be repaid to the Department of Transportation and redeposited into the TPOF for allocations for other eligible transportation projects. Based on the failure of the project to move forward, as evidenced by the failure of the voter referendum on the Virginia Beach ballot in the November 2016 election, the City of Virginia Beach is required to repay to the Department of Transportation the full amount in four annual payments of $5,000,000 by September 1 of each year for the next four years beginning in fiscal year 2018. To the extent the annual payment is not made as required by September 1 in each year for the next four years, the Department of Transportation is directed to withhold the payment amount due from funds provided to the City of Virginia Beach pursuant to § 33.2-319, Code of Virginia. It is the intent of the General Assembly that these sums are hereby made available to the department to reallocate to eligible TPOF projects as they become available.

H. For funds allocated in § 58.1-1741, Code of Virginia, to state of good repair purposes for fiscal year 2017 and fiscal year 2018, the distribution of funding in subsections (B) and (C) of § 33.2-369, Code of Virginia, will not apply. The Commonwealth Transportation Board may allocate funds to state of good repair purposes for reconstruction and replacement of structurally deficient state and locally owned bridges and reconstruction and rehabilitation of pavement on the interstate system and primary state highway system determined to be deteriorated by the board, including municipality-maintained primary extensions, as well as to work related to the condition assessment and pavement rehabilitation of secondary highways and other related work to improve secondary highways. Prior to this allocation, the Commonwealth Transportation Board will provide $11,929,353 for Improvements at Interstate Rest Areas throughout the Commonwealth.

I. The Secretary may establish a pilot program for unpaved roads sections that (i) are more than 2 miles in length, (ii) is not a dead-end, (iii) intersects with existing paved roads at both ends and (iv) have a traffic volume of 100 or more vehicles in a context sensitive manner. Up to $1,000,000 in the first year and $1,000,000 in the second year from funds available under subdivision (C)(v) of § 33.2-358, Code of Virginia, may be used for this pilot program.

J. Notwithstanding the provisions of § 33.2-358, Code of Virginia, the unanticipated amounts available for construction from the December 2015 revenue forecast and from the increased federal funding from the passage of the Fixing America's Surface Transportation (FAST) Act shall be distributed following the new construction formula defined by § 33.2-358, Code of Virginia, advancing the distribution of funds under this formula and provide 45 percent of the additional funding to the State of Good Repair Program, 27.5 percent to the High Priority Projects Program, and 27.5 percent to the District Grant Program.

K.1. Notwithstanding any other provision of the Code of Virginia, as a condition on the expenditure of all amounts included in this item, the Commonwealth Transportation Board shall include all amounts needed, not to exceed $140,000,000, in the fiscal year 2017 through fiscal year 2022 Six-Year Improvement Program adopted pursuant to § 33.2-214, for improvements to the Interstate 66 corridor inside the Capitol Beltway, including but not limited to the addition of a third eastbound travel lane on Interstate 66 from the Dulles Connector Road to State Route 237, North Fairfax Drive/N. Glebe Road exit of Interstate 66.

2. Environmental work pursuant to the National Environmental Policy Act for the project outlined in paragraph J.1. shall commence no later than July 15, 2016, and the Department shall complete a minimum of 30 percent of the design work for such capacity expansion by November 1, 2017. Amounts dedicated to such project shall not reduce amounts made available to the High Priority Projects Program or the District Grant Program.

3. It is the intent of the General Assembly that tolling on Interstate 66 inside the Capitol Beltway shall not extend beyond four hours during the morning rush hour and four hours during the evening rush hour on Mondays, Tuesdays, Wednesdays, Thursdays and Fridays, exclusive of national holidays, and tolling shall not apply on weekends.

L. It is the intent of the General Assembly that the Commissioner, Department of Transportation, with the cooperation of the Secretary of Finance, shall set-aside any federal funding specifically authorized by Congress for projects on the Coalfields Expressway in a special sub-account of the Transportation Trust Fund to ensure such funds are used exclusively to advance the Coalfields Expressway project.