The Federal Highway Administration issued a notice to states Tuesday regarding the upcoming rescission of unobligated balances of Highway Trust Fund contract authority required by the 2005 transportation authorization law known as "SAFETEA-LU" and the 2007 energy law. States are required to identify their proposed program reductions no later than Sept. 4.

SAFETEA-LU included a funding provision that kicks in Sept. 30 -- the last day the law is in effect -- mandating states return $8.708 billion of unused contract authority to the Highway Trust Fund. The rescission of federal funds is expected to have large financial consequences on many state transportation departments. The rescission is strongly opposed by AASHTO, which has been urging key members of Congress to repeal the provision before Sept. 30.

"While states are ramping up their spending of federal economic recovery grants, creating thousands of jobs and producing thousands of transportation improvements across the nation, it makes absolutely no sense for Congress to continue to require this $8.708 billion reduction," said John Horsley, AASHTO executive director. "Key senators have pledged to repeal this rescission provision after Congress returns to work following the summer recess and we look forward to working with them, and their counterparts in the House of Representatives, to make that happen prior to Sept. 30."

Senate Environment and Public Works Committee Chairwoman Barbara Boxer, D-CA, said on the Senate floor last month that she supports repealing the rescission. She vowed to work with Sen. Kit Bond, R-MO, who has been vocal in pushing for the repeal, as well as with other senators.

"If we fail to act, Missouri and states across the nation will lose out on critical transportation projects and thousands of jobs," Bond said in late July after his attempt to attach an amendment to repeal the Sept. 30 rescission to a Highway Trust Fund bill was rejected on the Senate floor. "I will continue to fight to reverse this risky cut to much-needed transportation infrastructure projects and American jobs before the Sept. 30 deadline."

The notice sent by FHWA to state transportation departments explains how the rescission amounts for each state have been calculated. It also informs states about flexibility provisions they have in determining which programs they will forfeit contract authority from.

Deadlines are established by the notice. States must identify by Sept. 4 the program categories from which any additional amounts are to be rescinded based on the flexibility provision. FHWA must issue a notice to states by Sept. 28 informing them of the amounts to be rescinded by program and provide further instructions on the flexibility provisions. A state wishing to further exercise flexibility provisions must respond immediately, by the close of business Sept. 28, to that final notice. Finally, according to Tuesday's notice, funds will be withdrawn from states' accounts Sept. 29 and 30.

FHWA's notice is available at tinyurl.com/FHWArescissionnotice.