Asset Management Plans and Periodic Evaluations of Facilities Repeatedly Requiring Repair and Reconstruction Due to Emergency Events, 73196-73268 [2016-25117]

Agencies

• Federal Highway Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 81, Number 205 (Monday, October 24, 2016)]
[Rules and Regulations]
[Pages 73196-73268]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25117]



[[Page 73195]]

Vol. 81

Monday,

No. 205

October 24, 2016

Part II





Department of Transportation





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Federal Highway Administration





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23 CFR Parts 515 and 667





Asset Management Plans and Periodic Evaluations of Facilities 
Repeatedly Requiring Repair and Reconstruction Due to Emergency Events; 
Final Rule

Federal Register / Vol. 81 , No. 205 / Monday, October 24, 2016 / 
Rules and Regulations

[[Page 73196]]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Parts 515 and 667

[Docket No. FHWA-2013-0052]
RIN 2125-AF57


Asset Management Plans and Periodic Evaluations of Facilities 
Repeatedly Requiring Repair and Reconstruction Due to Emergency Events

AGENCY: Federal Highway Administration (FHWA); Department of 
Transportation (DOT).

ACTION: Final rule.

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SUMMARY: The FHWA is issuing this final rule to address three new 
requirements established by the Moving Ahead for Progress in the 21st 
Century Act (MAP-21). First, as part of the National Highway 
Performance Program (NHPP), MAP-21 adopted a requirement for States to 
develop and implement risk-based asset management plans for the 
National Highway System (NHS) to improve or preserve the condition of 
the assets and the performance of the system. Second, for the purpose 
of carrying out the NHPP, MAP-21 requires FHWA to establish minimum 
standards for States to use in developing and operating bridge and 
pavement management systems. Third, to conserve Federal resources and 
protect public safety, MAP-21 mandates periodic evaluations to 
determine if reasonable alternatives exist to roads, highways, or 
bridges that repeatedly require repair and reconstruction activities. 
This rule establishes requirements applicable to States in each of 
these areas. The rule also reflects the passage of the Fixing America's 
Surface Transportation (FAST) Act, which added provisions on critical 
infrastructure to the asset management portion of the NHPP statute.

DATES: This rule is effective October 2, 2017, except for Part 667 
which is effective November 23, 2016.

FOR FURTHER INFORMATION CONTACT: Ms. Nastaran Saadatmand, Office of 
Asset Management, 202-366-1336, nastaran.saadatmand@dot.gov or Ms. 
Janet Myers, Office of the Chief Counsel, 202-366-2019, 
janet.myers@dot.gov, Federal Highway Administration, 1200 New Jersey 
Avenue SE., Washington, DC 20590. Office hours are from 8:00 a.m. to 
4:30 p.m., e.t., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access and Filing

    The notice of proposed rulemaking (NPRM) was published at 80 FR 
9231 on February 20, 2015, and all comments received may be viewed 
online through: https://www.regulations.gov. Electronic retrieval help 
and guidelines are available on the Web site. It is available 24 hours 
each day, 365 days each year. An electronic copy of this document may 
also be downloaded from the Office of the Federal Register's home page 
at: https://www.orf.gov and the Government Publishing Office's Web site 
at: https://www.gpo.gov.

Table of Contents for Supplementary Information

I. Executive Summary
    A. Purpose of the Regulatory Action
    B. Summary of Major Provisions of the Regulatory Action in 
Question
    C. Costs and Benefits
II. Acronyms and Abbreviations
III. Background
IV. Summary of Comments
V. Discussion of Major Issues Raised by Comments
VI. Section-by-Section Discussion of Comments
    A. Asset Management Plans, Part 515
    B. Periodic Evaluation of Facilities Repeatedly Requiring Repair 
and Reconstruction Due to Emergency Events, Part 667
    C. Other Comments
VII. Rulemaking Analyses and Notices

I. Executive Summary

A. Purpose of the Regulatory Action

    The MAP-21 (Pub. L. 112-141) brought transformative changes to the 
Federal-aid highway program with its performance management and asset 
management requirements.\1\ Asset management is defined as ``a 
strategic and systematic process of operating, maintaining, and 
improving physical assets, with a focus on both engineering and 
economic analysis based on quality information, to identify a 
structured sequence of maintenance, preservation, repair, 
rehabilitation, and replacement actions that will achieve and sustain a 
desired state of good repair over the life cycle of the assets at 
minimum practicable cost.'' \2\ Asset management plans are an important 
highway infrastructure management tool to improve and preserve the 
condition of assets and system performance. This regulatory action 
establishes the implementing regulations for the asset management 
requirements contained in MAP-21 and the FAST Act (Pub. L. 114-94). 
This rule also establishes standards for bridge and pavement management 
systems as required by MAP-21 section 1203, and the requirements 
pursuant to MAP-21 section 1315(b) for the periodic evaluation of 
roads, highways, and bridges that have repeatedly required repair and 
reconstruction activities.\3\
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    \1\ The core performance management requirements are codified in 
23 U.S.C. 150 and 23 U.S.C. 119. Asset management requirements are 
codified in 23 U.S.C. 119. The MAP-21 section 1106(b) contains 
uncodified transition provisions for performance management and 
asset management.
    \2\ The MAP-21 added this definition in 23 U.S.C. 101(a)(2).
    \3\ The MAP-21 section 1302 provision, codified in 23 U.S.C. 
150(c)(3)(A)(i), requires FHWA to establish bridge and pavement 
management systems standards the States will use to carry out the 
requirements in 23 U.S.C.119. The MAP-21 section 1315(b), an 
uncodified provision, requires the Secretary to provide for periodic 
evaluations of roads, highways, and bridges to determine if 
reasonable alternatives exist to roads, highways, or bridges that 
repeatedly require repair and reconstruction activities.
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    Under the asset management provisions in MAP-21, State departments 
of transportation (State DOT) must develop and implement an asset 
management plan. This rule establishes the processes the State DOTs 
must use to develop their plans, requirements for the form and content 
of the resulting plans, implementation procedures, and procedures for 
FHWA oversight. This rule requires the State DOTs to use the best 
available data, and to use bridge and pavement management systems 
meeting the minimum standards adopted in this rule to analyze the 
condition of NHS pavements and bridges. State DOTs are required to 
include in their plans summaries of the information relating to NHS 
pavements and bridges that is produced by the periodic evaluations 
performed pursuant to MAP-21 section 1315(b).
    This rule adopts a phased implementation approach to the asset 
management plan requirements. State DOTs will submit initial plans that 
contain their proposed asset management plan development processes, but 
State DOTs may exclude from their initial plans certain types of 
analyses as specified in the rule. The FHWA sets deadlines for both the 
initial plan and a subsequent plan that meets all requirements of this 
rule.
    The rule describes how FHWA will carry out certain oversight 
actions required by the statute. There are the procedures for 
certifying and recertifying State DOT asset management plan development 
processes, and for the annual FHWA determination as to whether the 
State DOTs have developed and implemented asset management plans that 
comply with Federal requirements.

[[Page 73197]]

    This rule implements MAP-21 section 1315(b) by defining the scope 
and applicability of the requirement, and setting parameters for data 
collection for the evaluations required under that statute. This rule 
establishes a two-tier implementation approach, to ensure the 
evaluation of affected NHS facilities is given priority.

B. Summary of Major Provisions of the Regulatory Action in Question

    This final rule retains the majority of the major provisions of the 
NPRM, but makes the following significant changes in response to 
comments received: (a) Reorganizing the content; (b) separating asset 
management plan regulations (23 CFR part 515) from the regulations 
implementing the periodic evaluation requirements under MAP-21 section 
1315(b); (c) changing the timing and required elements for phased 
implementation; (d) reducing asset management plan requirements for 
assets other than NHS pavements and bridges if State DOTs elect to 
include such other assets in their plans; and (e) defining criteria for 
determining whether a State DOT has developed and implemented its asset 
management plan in accordance with applicable requirements. The FHWA 
updated these and other elements of the NPRM based on its review and 
analysis of comments received.
    This rule removes the bridge and pavement management systems 
standards from the section on asset management plan processes, and 
places the standards in a separate section of the asset management 
rule. Table 1 shows the changes in designation in the final rule as 
compare to those in the NPRM.

                Table 1--Redesignation of NPRM Provisions
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                                                            Final rule
                      NPRM section                            section
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515.007(a)..............................................           515.7
515.007(a)(1)...........................................        515.7(a)
515.007(a)(1)(i)........................................     515.7(a)(1)
515.007(a)(1)(ii).......................................     515.7(a)(2)
515.007(a)(1)(iii)......................................     515.7(a)(3)
515.007(a)(2)...........................................        515.7(b)
515.007(a)(2)(i)........................................     515.7(b)(1)
515.007(a)(2)(ii).......................................     515.7(b)(2)
515.007(a)(2)(iii)......................................     515.7(b)(3)
515.007(a)(2)(iv).......................................     515.7(b)(4)
515.007(a)(3)(i)........................................     515.7(c)(1)
515.007(a)(3)(vi).......................................     515.7(c)(6)
515.007(a)(4)...........................................        515.7(d)
515.007(a)(4)(ii).......................................     515.7(d)(2)
515.007(a)(4)(iv).......................................     515.7(d)(4)
515.007(a)(5)...........................................        515.7(e)
515.007(a)(5)(i)........................................     515.7(e)(1)
515.007(a)(5)(ii).......................................     515.7(e)(2)
515.007(a)(5)(iii)......................................     515.7(e)(3)
515.007(a)(5)(iv).......................................     515.7(e)(4)
N/A.....................................................        515.7(f)
515.007(b)..............................................    515.7(g) and
                                                                  515.17
515.007(b)(1)...........................................       515.17(a)
515.007(b)(3)...........................................       515.17(c)
515.007(b)(5)...........................................       515.17(e)
515.007(b)(1)...........................................       515.17(a)
515.007(b)(3)...........................................       515.17(c)
515.007(b)(5)...........................................       515.17(e)
515.011.................................................          515.11
515.011(a)..............................................       515.11(a)
515.0011(b).............................................       515.11(b)
515.011(b)(1)...........................................    515.11(b)(1)
515.011(c)..............................................       515.11(c)
515.011.................................................          515.11
515.011(a)..............................................       515.11(a)
515.0011(b).............................................       515.11(b)
515.013.................................................          515.13
515.013(a)..............................................       515.11(a)
515.013(b)..............................................       515.13(a)
515.013((b)((2).........................................    515.13(a)(2)
515.013(c)..............................................       515.13(b)
515.013(d)..............................................       515.13(c)
515.013.................................................          515.13
515.013(a)..............................................       515.11(a)
515.013(b)..............................................       515.13(a)
515.019(a)..............................................    667.1, 667.3
515.019(b)..............................................           667.3
515.019(c)..............................................           667.7
515.019(d)..............................................        667.9(a)
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Asset Management, 23 CFR Part 515
    This rule has a deferred effective date of October 2, 2017, for 
part 515. The final asset management rule adds definitions for ``asset 
class,'' ``asset sub-group,'' ``critical infrastructure,'' \4\ 
``financial plan,'' ``minimum practicable cost,'' and ``NHS pavements 
and bridges and NHS pavement and bridge assets.'' The FHWA revised a 
number of the definitions proposed in the NPRM. The rule calls for 
State DOTs to develop and implement a risk-based asset management plan 
that covers at least a 10-year period. The State DOTs must include NHS 
pavements and bridges, and are encouraged to include other assets. 
Voluntarily included assets are subject to reduced requirements under 
the rule. The rule establishes the minimum process elements State DOT's 
must use to develop their asset management plans (such as a performance 
gap analysis, network-level life-cycle planning (LCP) analysis, and 
risk management plan), but gives State DOTs the flexibility to tailor 
the required processes to meet their needs and to add additional 
elements. The State DOTs must use the best available data to develop 
their asset management plans. For NHS pavements and bridges not owned 
by the State DOT, the rule requires the State DOT to work 
collaboratively and cooperatively with the other owner(s) to obtain the 
data needed for the plan. For NHS pavements and bridges, State DOTs 
must use pavement and bridge management systems meeting the standards 
established in the rule to analyze the condition of NHS pavements and 
bridges.
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    \4\ The FAST Act added the term ``critical infrastructure'' to 
23 U.S.C. 119(j).
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    The rule includes requirements for the form and content of asset 
management plans. The requirements for NHS pavement and bridge assets 
include a summary listing of those assets and a description of their 
condition; discussions covering the State DOT's asset management 
objectives, and asset management measures and State DOT targets for 
asset condition; identification of performance gaps; a discussion of 
the LCP analysis; a discussion of the risk management analysis, 
including the results of the periodic evaluations done pursuant to MAP-
21 section 1315(b) to the extent the results affect any of the required 
NHS assets in the plan; a discussion of the results of the financial 
planning process; and a description of investment strategies that 
collectively would make or support progress toward the following:
    (a) Achieving and sustaining a desired state of good repair over 
the life cycle of the assets;
    (b) improving or preserving the condition of the assets and the 
performance of the NHS relating to physical assets;
    (c) achieving the State DOT targets for asset condition and 
performance of the NHS in accordance with 23 United States Code 
(U.S.C.) 150(d); and
    (d) achieving the national goals identified in 23 U.S.C. 150(b).

The rule requires State DOTs to integrate their asset management plans 
into their transportation planning processes that lead to their 
Statewide Transportation Improvement Program (STIP). The reduced asset 
management plan requirements for assets other than NHS pavements and 
bridges permit State DOTs to address plan elements for those other 
assets at whatever level of effort is consistent with the State DOT's 
needs and resources. The rule requires State DOTs to make their asset 
management plans available to the public.
    The asset management rule provides for phased implementation. The 
State DOTs must submit an initial plan by April 30, 2018. The FHWA will 
use the initial plan's descriptions of the State DOT's asset management 
plan

[[Page 73198]]

development processes, such as the description of how the State 
performs its performance gap analysis, to make the statutorily required 
determination whether FHWA can certify the processes as meeting the 
process requirements in this rule. The rule allows State DOTs to 
exclude some analyses from the initial plan. The rule establishes 
process certification procedures that include an opportunity for the 
State DOT to cure any identified deficiencies, and to receive a 
certification even if there are minor deficiencies so long as the State 
DOT takes corrective action. The FHWA certification decision is due 90 
days after the State DOT submission.
    The rule calls for State DOT submission of an asset management plan 
meeting all requirements by June 30, 2019. The FHWA will use that plan 
for the first of the statutorily required annual determinations whether 
the State DOT has developed and implemented an asset management plan 
consistent with this rule. The rule provides the consistency 
determination will be based on FHWA's assessment whether: (a) The State 
DOT developed its asset management plan using certified processes; (b) 
the plan includes the required content; (c) the plan is consistent with 
the statute and this rule; and (d) the State DOT has implemented the 
plan. State DOTs may demonstrate implementation in a variety of ways, 
but the State DOT's submission must show the State DOT is using the 
investment strategies in its asset management plan to make progress 
toward achievement of its targets for asset condition and performance 
of the NHS, and to support progress toward the national goals 
identified in 23 U.S.C. 150(b). The rule states FHWA considers the best 
evidence of plan implementation to be State DOT funding allocations 
that are reasonably consistent with the investment strategies in the 
State DOT's asset management plan; and this approach takes into account 
the alignment between the actual and planned levels of investment for 
various work types (i.e., initial construction, maintenance, 
preservation, rehabilitation and reconstruction). The rule provides 
FHWA may find a State DOT has implemented its asset management plan 
even if the State has deviated from the investment strategies included 
in the asset management plan, if the State DOT shows the deviation was 
necessary due to extenuating circumstances beyond the State DOT's 
reasonable control. The consistency determination procedures in the 
rule include an opportunity for the State DOT to cure any identified 
deficiencies.
    The rule requires State DOTs to update their asset management plan 
development processes, and the asset management plans themselves, at 
least every 4 years. Updated procedures and plans must be submitted to 
FHWA for recertification of the procedures and a new consistency 
determination at least 30 days before the deadline for the next FHWA 
consistency determination. The first FHWA consistency determination is 
due by August 31, 2019, but thereafter the FHWA determination is due by 
July 31 of each year.
    The rule sets forth the two penalty provisions that may apply if a 
State DOT does not develop and implement an asset management plan 
consistent with the requirements of this rule. Beginning with the 
second fiscal year beginning after the final asset management rule is 
effective, FHWA must determine whether each State DOT has developed and 
implemented an asset management plan consistent with 23 U.S.C. 119 and 
this rule. (23 U.S.C. 119(e)(5)). Eighteen months after the effective 
date of the second performance measure rulemaking,\5\ which addresses 
NHS bridges and pavements, MAP-21 section 1106(b) requires FHWA to 
decide whether each State DOT has established the required 23 U.S.C. 
150(d) performance targets and has a fully compliant asset management 
plan in effect. (MAP-21 section 1106(b)(1)). Both provisions impose a 
penalty if the State DOT has not met those requirements. The MAP-21 
section 1106(b) permits FHWA to extend the 18-month compliance deadline 
if the State DOT has made a good faith effort to establish the asset 
management plan and set the required targets. (MAP-21 section 
1106(b)(2)). The penalty and other legal consequences are stayed during 
the period of any extension. There is no extension or waiver provision 
for the penalty under 23 U.S.C. 119(e)(5).
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    \5\ The FHWA has undertaken three separate rulemakings to 
implement performance management requirements. The first is 
``National Performance Management Measures; Highway Safety 
Improvement Program'' (RIN 2125-AF49); the second is ``National 
Performance Management Measures; Assessing Pavement Condition for 
the National Highway Performance Program and Bridge Condition for 
the National Highway Performance Program'' (RIN 2125-AF53); the 
third is ``National Performance Management Measures; Assessing 
Performance of the National Highway System, Freight Movement on the 
Interstate System, and Congestion Mitigation and Air Quality 
Improvement Program'' (RIN 2125-AF54).
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    The rule establishes the minimum standards each State DOT must use 
in developing and operating bridge and pavement management systems. 
Under the minimum standards, States must have documented procedures for 
the following: (a) Collecting, processing, storing, and updating 
inventory and condition data for NHS pavement and bridge assets; (b) 
forecasting deterioration for all NHS bridges and pavements; (c) 
determining the benefit-cost over the life cycle of assets to evaluate 
alternative strategies (including no action decisions), for managing 
the condition of NHS pavement and bridge assets; (d) identifying short-
term and long-term budget needs for managing the condition of all NHS 
pavement and bridge assets; (e) determining strategies for identifying 
potential NHS pavement and bridge projects that maximize overall 
program benefits within financial constraints; and (f) recommending 
programs and implementation schedules to manage the condition of NHS 
pavements and bridges within policy and budgetary constraints.
    The rule describes ``best practices'' for integrating asset 
management into a State DOT's organizational mission, culture, and 
capabilities at all levels.
Periodic Evaluation of Facilities Repeatedly Requiring Repair and 
Reconstruction Due to Emergency Events, Part 667
    This final rule relocates the regulation implementing MAP-21 
section 1315(b) to part 667 of 23 CFR. The rule establishes 
requirements for State DOTs to perform statewide evaluations to 
determine if there are reasonable alternatives to roads, highways, and 
bridges that have required repair and reconstruction activities on two 
or more occasions due to emergency events. The rule defines an 
emergency event as a ``natural disaster or catastrophic failure 
resulting in an emergency declared by the Governor of the State or an 
emergency or disaster declared by the President of the United States.'' 
The rule revises the NPRM's references to ``repair or reconstruction'' 
to read ``repair and reconstruction,'' to better align with the 
statutory language. The rule defines ``repair and reconstruction'' as 
work on a road, highway, or bridge that has one or more reconstruction 
elements; the term excludes emergency repairs as defined in 23 CFR 
668.103. The rule defines the term ``roads, highways, and bridges'' to 
mean a highway, as defined in 23 U.S.C. 101(a)(11), that is open to the 
public and eligible for financial assistance under title 23, U.S.C.; 
the definition excludes tribally owned and federally owned roads, 
highways, and bridges.
    Under the rule, State DOTs must prepare the first evaluation for 
NHS

[[Page 73199]]

roads, highways, and bridges within 2 years of the effective date for 
part 667. State DOTs must update the evaluations for NHS roads, 
highways, and bridges at least every 4 years, and after each emergency 
event to the extent necessary to account for the effects of the event. 
For the rest of the roads, highways, and bridges in the State, 
beginning 4 years after the effective date for part 667, the State DOT 
must prepare an evaluation for the affected part of the facility prior 
to including any project relating to that part in its STIP. The 
evaluations must have a starting date no later than January 1, 1997. 
State DOTs must use reasonable efforts to obtain the data needed for 
the evaluations, and document those efforts in the evaluations if 
unable to obtain sufficient data for a facility.
    The rule requires State DOTs to consider the results of the 
evaluations when developing projects, and State DOTs and metropolitan 
planning organizations (MPO) are encouraged to consider the information 
during the transportation planning process. The FHWA will periodically 
review State DOT compliance with part 667, including the State DOT's 
performance under the rule and its outcomes. The FHWA may consider the 
results of the evaluations when making a planning finding under 23 
U.S.C. 134(g)(8), making decisions during the environmental review 
process under 23 CFR part 771, or when approving funding.

C. Costs and Benefits

    The costs and benefits were estimated for implementing the 
requirement for States to develop a risk-based asset management plan 
and to use pavement and bridge management systems that comply with the 
minimum standards in this rulemaking.
    Based on information obtained from nine State DOTs, the total 
nationwide costs for all States to develop their asset management 
plans, for four States \6\ to acquire and install pavement and bridge 
management systems, and for one third of States to upgrade their 
current systems would be $54.3 million discounted at 3 percent and 
$46.3 million discounted at 7 percent.
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    \6\ There are currently four States that do not currently have 
pavement and bridge management systems that meet the standards of 
the proposed rule.
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    The FHWA lacks data on the economic benefits of the practice of 
asset management as a whole. The field of asset management has only 
become common in the past decade and case studies of economic benefits 
from overall asset management have not been published.
    While FHWA lacks data on the overall benefits of asset management, 
there are examples of the economic savings that result from the most 
typical component sub-sets of asset management, pavement and bridge 
management systems. Using an Iowa DOT study \7\ as an example of the 
potential benefits of applying a long-term asset management approach 
using a pavement management system, the costs of developing the asset 
management plans and acquiring pavement management systems were 
compared to determine if the benefits of the proposed rule would exceed 
the costs. The FHWA estimates the total benefits for the 50 States, the 
District of Columbia, and Puerto Rico of utilizing pavement management 
systems and developing asset management plans to be $453.5 million 
discounted at 3 percent and $340.6 million discounted at 7 percent.
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    \7\ Smadi, Omar, Quantifying the Benefits of Pavement 
Management, a paper from the 6th International Conference on 
Managing Pavements, 2004.
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    Based on the benefits derived from the Iowa DOT study and the 
estimated costs of asset management plans and acquiring pavement 
management systems, the ratio of benefits to costs would be 8.3 at a 3 
percent discount rate and 7.4 at a 7 percent discount rate. The 
estimated benefits do not include the potential benefits resulting from 
savings in bridge programs. The benefits for States already practicing 
good asset management decisionmaking using their pavement management 
systems will be lower, as will the costs. If the requirement to develop 
asset management plans only marginally influences decisions on how to 
manage the assets, benefits are expected to exceed costs.

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                                           Discounted at   Discounted at
                                                3%              7%
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Total Benefits for 52 States............    $453,517,253    $340,580,894
Total Cost for 52 States................     $54,337,661     $46,313,354
Benefit Cost Ratio......................             8.3             7.4
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    The FHWA believes that most of the information required to comply 
with part 667 of this final rule is already contained in files 
maintained by the State DOTs and their sub-recipients. As a result, 
FHWA expects the costs associated with complying with part 667 to be 
minimal. The FHWA expects the initial benefits associated with 
implementation of part 667 to be small, but expects that they will 
increase over time by lessening the extent and severity of the damage 
resulting from future disasters. In addition, the FHWA expects that the 
evaluations required as part of part 667 will result in improvements to 
the highway network, making it more adaptable to the impacts of climate 
change and extreme weather events that present significant and growing 
risks to the safety, reliability, effectiveness, and sustainability of 
the Nation's transportation infrastructure and operations.

II. Acronyms and Abbreviations

------------------------------------------------------------------------
      Acronym or abbreviation                       Term
------------------------------------------------------------------------
AASHTO............................  American Association of State
                                     Highway and Transportation
                                     Officials.
ACPA..............................  American Concrete Pavement
                                     Association.
CFR...............................  Code of Federal Regulations.
DOT...............................  U.S. Department of Transportation.
EO................................  Executive Order.
FAHP..............................  Federal-aid highway program.
FEMA..............................  Federal Emergency Management Agency.
FHWA..............................  Federal Highway Administration.

[[Page 73200]]

 
GTMA..............................  Geospatial Transportation Mapping
                                     Association.
HSIP..............................  Highway Safety Improvement Program.
ID................................  Idaho.
LCCA..............................  Life-cycle cost analysis.
LCP...............................  Life-cycle planning.
MAP-21............................  Moving Ahead for Progress in the
                                     21st Century Act.
MPO...............................  Metropolitan Planning Organization.
MT................................  Montana.
ND................................  North Dakota.
NHPP..............................  National Highway Performance
                                     Program.
NHS...............................  National Highway System.
NPRM..............................  Notice of Proposed Rulemaking.
NYMTC.............................  New York Metropolitan Transportation
                                     Council.
NYSAMPO...........................  New York State Association of
                                     Metropolitan Planning
                                     Organizations.
PCA...............................  Portland Cement Association.
PRA...............................  Paperwork Reduction Act.
RDBMS.............................  Relational Database Management
                                     System.
RIA...............................  Regulatory Impact Analysis.
RIN...............................  Regulatory Identification Number.
RSI...............................  Remaining Service Interval.
Secretary.........................  Secretary of the U.S. Department of
                                     Transportation.
SD................................  South Dakota.
SHSP..............................  Strategic Highway Safety Plan.
State DOT.........................  State department of transportation.
STIP..............................  State Transportation Improvement
                                     Program.
STP...............................  Surface Transportation Program.
TIP...............................  Transportation Improvement Program.
U.S.C.............................  United States Code.
WY................................  Wyoming.
------------------------------------------------------------------------

III. Background

    On February 20, 2015, at 80 FR 9231, FHWA published an NPRM 
proposing the following: Definitions of key terms in the regulations; 
processes State DOTs would have to use to prepare asset management 
plans; standards for developing and operating bridge and pavement 
management systems; the required form and content for asset management 
plans; phase-in provisions for asset management plan requirements; 
procedures for FHWA certification, and periodic recertification, of 
State DOT asset management processes; procedures for annual FHWA 
determinations whether State DOTs have developed and implemented an 
asset management plan consistent with applicable requirements; 
procedures for administering statutory penalties relating to 
development and implementation of asset management plans; optional 
practices for integrating asset management into a State DOT's 
organizational mission, culture, and capabilities; the scope and timing 
of the evaluations State DOTs must perform to determine whether there 
are reasonable alternatives to roads, highways, and bridges that have 
required repair and reconstruction activities on two or more occasions 
due to emergency events; and inclusion of a summary of the results of 
the evaluations in the State DOT's asset management plan for the assets 
in the plan. On April 1, 2015, at 80 FR 17371, FHWA extended the 
comment period from April 21, 2015, to May 29, 2015.

IV. Summary of Comments

    The FHWA received 59 public comment submissions to the docket. Of 
these, 57 were unique submissions and 2 were duplicates. The 
submissions included 38 unique submissions from 35 State DOTs, 
including one joint letter from 5 States. Seven submissions were 
received from trade, professional, and government associations, 
including the American Association of State Highway and Transportation 
Officials (AASHTO), the New York State Association of MPOs, and the 
American Society of Civil Engineers. Letters were also received from 
two MPOs, one local government, one planning district commission 
composed of local governments, and several submissions from individuals 
and private industry members.
    The comment submissions covered a number of topics in the proposed 
rule, with the most numerous and substantive comments relating to the 
process for conducting life-cycle cost analysis/planning, the process 
for developing the financial plan and its duration, the process for 
developing the risk management plan, requirements for bridge and 
pavement management systems, asset management measures and targets, and 
the selection of projects for inclusion in the STIP. Commenters 
expressed concerns over the inclusion of non-State-owned assets in the 
asset management plan, indicating that States should not be held 
responsible for sections of the NHS that are not under their direct 
control. The commenters also expressed concerns about the availability 
of data for such assets. Commenters asked FHWA to recognize the 
acceptability of strategies calling for a decline in the condition and 
performance of assets. They expressed concerns about the 10-year 
duration of the asset management plan, with several commenters 
requesting a shorter or longer minimum duration, and expressed concerns 
in regard to the phase-in option for the initial plan. Commenters also 
expressed concerns about use of terminology such as ``desired state of 
good repair,'' ``financially responsible manner,'' and ``long- and 
short-term.'' Commenters conveyed their concerns about the proposal to 
apply the same requirements to both the mandatory NHS pavement and 
bridge assets and other assets a State DOT might elect to include in 
its plan. Commenters had a number of questions about the interaction 
between the asset management plan requirements and performance 
management requirements. Commenters raised a number of issues with 
respect to the proposed periodic evaluation requirements implementing 
MAP-21 section 1315(b). These included concerns about the burden on

[[Page 73201]]

State DOTs, the scope of facilities that would be subject to the 
evaluations, the timing of evaluation requirements, the inclusion of 
the information in asset management plans, and how the evaluations 
would be considered by FWHA and the State DOTs. In addition, commenters 
expressed concern that the Regulatory Impact Analysis (RIA) 
underestimated the costs of the rule.
    The FHWA thanks commenters for their responses to questions posed 
in the NPRM and other comments. The FHWA carefully considered the 
comments received from the stakeholders. Comments that raised 
significant topics affecting multiple parts of the rule, and having an 
impact on the final regulatory language, are summarized in the 
following section. A detailed discussion of comments, and FHWA's 
responses, is included in Section VI.

V. Discussion of Major Issues Raised by Comments

System Performance, Performance Measures and Targets, and Asset 
Management Plans

    As provided in 23 U.S.C. 119(e)(1), States must develop a risk-
based asset management plan to address both the condition of NHS assets 
and the performance of the NHS. Some commenters raised questions about 
what this means for the scope of an asset management plan, particularly 
the gap analysis under proposed section 515.007(a)(1) of the rule, and 
how the plan relates to 23 U.S.C. 150 performance measures and targets 
for areas other than pavement and bridge conditions. Also, comments 
suggested FHWA limit the minimum required gap analysis to the gap, if 
any, between current asset conditions and the State's targets, thereby 
eliminating the concepts of ``improving or preserving the NHS'' and 
``desired state of good repair'' from the gap analysis. These comments 
appeared to suggest the rule ought to require gap analysis only for 
targets for pavements and bridges, thus excluding consideration of 
targets for other section 150 performance measures. Commenters also 
noted that the relationship between system performance measures and 
program improvements is not well established.
    These comments illustrate the need to further highlight the 
relationships among system performance, asset management plans, and 
section 150 performance measures and targets. Section 119(e)(2) 
requires asset management plans to contain strategies that not only 
make progress toward achievement of section 150 targets, but also 
support progress toward achievement of the broader national goals in 
section 150(b): Safety, infrastructure condition, congestion reduction, 
system reliability, freight movement and economic vitality, 
environmental sustainability, and reduced project delays. The FHWA 
interprets section 119(e) as calling for asset management plans that 
address both short term and long term needs relating to the goal of 
improving or preserving the condition and performance of the NHS. An 
asset management plan should serve as the analytical foundation and 
decisionmaking tool for investment choices that meet those needs. By 
contrast, section 150 performance measures, and the related 2-year and 
4-year targets, are indicators of interim conditions and performance 
levels. They show how a State is progressing toward its longer term 
goals for the condition and performance of the NHS within its borders.
    The final rule retains, with modification, the NPRM proposal on the 
required process for gap analysis. The asset management plan 
performance gap analysis requires a comparison of current conditions to 
State DOT section 150(d) targets for the condition of NHS pavements and 
bridges (see final rule section 515.7(a)(1)). The rule does not require 
any comparison between the current performance and targeted performance 
for other section 150 performance measures or targets. However, the 
final rule also requires State DOTs to have a process for analyzing 
gaps in the performance of the NHS that affect NHS pavements and 
bridges regardless of their physical condition (see final rule section 
515.7(a)(2)). Under that provision, State DOTs must addresses instances 
where the results of comparisons done as part of other transportation 
plans and programs, such as the Highway Safety Improvement Programs 
(HSIP), State Highway Safety Plan (SHSP), or State Freight Plan (if the 
State has one), that may have an effect on the NHS pavement and bridge 
assets. This could occur when those other plans or programs indicate 
that certain system performance deficiencies are best addressed through 
strategies that involve an alteration or addition to the existing NHS 
pavement or bridge assets. For example, if a State DOT determines the 
needed solution to congestion in a corridor is the addition of new 
capacity on an NHS highway that is in good physical condition, the 
State DOT has to consider that need for additional capacity in its 
asset management plan. This is true even though the need for additional 
capacity is unrelated to the physical condition of the NHS pavements 
and bridges. In such cases, those strategies must be considered along 
with strategies that address system/asset resiliency or asset condition 
when developing a long-term asset management plan.
    The FHWA emphasizes that all gap analysis under the rule ties to 
physical assets. That is consistent with the 23 U.S.C. 101(a)(2) 
definition of asset management, which is keyed to physical assets. 
Section 119(e) focuses primarily on NHS pavement and bridge assets, and 
includes them among the minimum plan requirements. However, there are 
other physical assets that affect NHS performance and progress toward 
achieving the national goals identified in 23 U.S.C. 150(b), and FHWA 
encourages States to include such other assets in their asset 
management plans. Examples include guard rail and pavement markings; 
traffic signals and incident response equipment; call boxes and 
variable message signs. These types of assets may be viewed as 
primarily relating to achievement of targets or objectives other than 
condition of NHS pavements and bridges (e.g., safety, reliability, 
capacity, and environmental compliance), but the condition of these 
assets and how they are managed during their entire life affects the 
performance of the NHS and the achievement of the national goals. The 
need to invest in, and manage, such physical assets inevitably affects 
the analyses and decisions in the asset management plans. Additional 
illustrations of this relationship to NHS performance include 
increasing safety by providing adequate pavement friction, reducing 
delay due to construction by undertaking more preservation activities, 
and improving water quality through improving drainage.

Asset Management Plan Treatment of NHS Pavements and Bridges Not Owned 
by State DOTs

    Section 119(e)(1) requires States to develop risk-based asset 
management plans for the NHS to improve the condition and performance 
of the system. Based on provisions in section 119(e)(4), the plan must 
include all NHS pavement and bridge assets. A number of commenters 
objected to the proposed rule's requirement that asset management plans 
include NHS pavement and bridge assets not owned by the State. Reasons 
for the objections included concerns a State cannot require other NHS 
owners to provide data on pavement and bridge conditions, the resources 
required to

[[Page 73202]]

gather the data, and an inability to require other NHS owners to 
participate in the development and implementation of an asset 
management plan for their NHS assets.
    The FHWA acknowledges States may face challenges in developing and 
implementing an asset management plan that includes NHS pavements and 
bridges owned by others. However, there is no provision in section 
119(e) that would permit exclusion of NHS pavements or bridges not 
owned by the State. Like the performance management requirements under 
23 U.S.C. 150, the asset management statute requires the State to 
include all NHS pavement and bridge assets, regardless of ownership.
    The final rule calls for State DOTs to use the best available 
information to prepare their asset management plans. It is important to 
understand the NHS pavement and bridge condition information required 
for asset management can be drawn from many sources, including existing 
National Bridge Inspection and Highway Performance Monitoring System 
data and the data collected to fulfill the section 150 performance 
management requirements for NHS pavements and bridges. The FHWA 
discusses the data types required for performance management in detail 
in the second performance measure rulemaking. The FHWA recognizes the 
asset management rule will make it necessary for States to coordinate 
with other entities that own and maintain portions of the NHS, and 
expects States to work with those other entities to develop effective 
processes for doing so. This is consistent with the requirement for 
State and MPO data coordination recently adopted in amendments to 23 
CFR 450.314(h). (see Statewide and Nonmetropolitan Transportation 
Planning; Metropolitan Transportation Planning final rule (79 FR 31784, 
published June 2, 2016). If a State DOT is not able to perform a 
thorough analysis or fully develop other aspects of its asset 
management plan due to lack of required data, it is best to discuss 
this matter in the gap analysis section of the plan.
    The FHWA recognizes that some State DOTs may require a substantial 
amount of time to develop the full data-gathering capability needed to 
develop complete asset management plans. This was a factor in FHWA's 
decision to use phasing for asset management plan implementation. Under 
this rule, which has an effective date for Part 515 of October 2, 2017, 
State DOTs will prepare and submit an initial plan on April 30, 2018. 
The initial plan must contain descriptions of the State DOT's asset 
management plan development processes meeting the requirements of 
section 515.7 of this rule. However, final rule section 515.11(b) 
provides the initial plans may exclude certain analyses. This will give 
State DOTs a long lead time, from the publication of the final rule to 
the June 30, 2019 deadline, for submission of a fully compliant asset 
management plan, during which State DOTs can develop the needed 
capability and data. After the transition period provided by the 
initial plan, FHWA expects States and other NHS owners to have resolved 
any data collection and coordination issues, including any resource 
issues.
    The FHWA also appreciates the concerns of commenters who pointed 
out the regulation will make States responsible for developing and 
implementing an asset management plan that addresses the management of, 
and investment in, NHS assets owned by others. However, this State 
responsibility is part of the statutory scheme for asset management 
contained in MAP-21. The FHWA expects States to undertake the necessary 
coordination with other owners of NHS pavements and bridges, as well as 
with MPOs. When evaluating whether to certify a State DOT's asset 
management development processes, FHWA will consider whether the State 
DOT included a process for obtaining the necessary data from other NHS 
owners in a collaborative and coordinated effort, as required by final 
rule section 515.7(f). If a State DOT, despite reasonable efforts, is 
unable to obtain agreement from another NHS owner on implementation of 
an investment strategy in the plan, the State DOT can explain that 
problem in the documentation on asset management plan implementation 
provided under section 515.13(b) of the final rule.

Asset Management Requirements Applicable to Assets Other Than NHS 
Pavements and Bridges

    In the final rule, consistent with section 119(e)(3), FHWA 
encourages States to include in their asset management plans all the 
infrastructure assets within the right-of-way corridor of the NHS. The 
FHWA similarly encourages inclusion of non-NHS assets in the plan. As 
pointed out in the NPRM, it is entirely up to each State to decide 
whether to include any assets other than the required NHS pavements and 
bridges.
    The NPRM proposed making all the requirements of the asset 
management rule applicable to all assets included in the asset 
management plan. Many commenters expressed concern that applying all 
asset management plan requirements to the ``discretionary'' assets a 
State opted to include in its plan was overly burdensome, and would 
serve to discourage States from including anything other than the 
required NHS pavement and bridge assets. In the final rule, FHWA 
revised the requirements that will apply to ``discretionary'' assets in 
an asset management plan. Such assets will be subject to more limited 
requirements as set out in a new provision in the final rule, section 
515.9(l). For assets a State voluntarily includes in its asset 
management plan, the State will not have to adhere to the asset 
management plan processes the State adopts pursuant to section 515.7. 
Instead, the State's plan will have to provide the following: (a) A 
summary listing of the discretionary assets, including a description of 
asset condition; (b) the State's performance measures and targets for 
the discretionary assets; (c) a performance gap analysis; (d) an LCP 
analysis; (e) a risk analysis; (f) a financial plan; and (g) investment 
strategies for managing the discretionary assets. States may use less 
rigorous analyses for discretionary assets than the analyses performed 
for NHS pavements and bridges pursuant to this rule, consistent with 
the State DOT's needs and resources.

Implementation Timeline for Asset Management Requirements

    In the NPRM, FHWA proposed State DOTs initially submit a partial 
asset management plan, which would include the State DOT's proposed 
asset management plan development processes, by no later than 1 year 
after the effective date of the final asset management rule. The NPRM 
proposed a deadline for a fully compliant plan of not later than 18 
months after the effective date of the final 23 U.S.C. 150 performance 
management rule covering NHS pavement and bridge asset conditions. The 
FHWA requested comments on whether the proposed phase-in was desirable 
and workable (see 80 FR 9231, at 9243 (published February 20, 2015)).
    Commenters questioned whether the proposed rule provided sufficient 
time for State DOTs to implement the rule's requirements. Some 
questioned the investment of State resources to prepare the initial 
plan within 12 months, and the usefulness of the results. Concerns 
arose, in part, due to the statutory requirement that State DOTs must 
include their 23 U.S.C. 150(d) targets for NHS pavement and bridge 
conditions in their asset management plans. Because the FHWA rulemaking 
for target-setting

[[Page 73203]]

is a separate proceeding from this rulemaking, and that rule will 
impose its own requirements, commenters stated the timing of the 
various rulemakings needed to be coordinated and all rulemakings should 
be complete before the first deadline for submitting an asset 
management plan. Commenters indicated State DOTs need to know all the 
criteria affecting their development of asset management plans before 
starting the process. Commenters warned the potential burdens of the 
performance management and asset management rules would be too great 
for State DOTs to manage in a short time frame. The comments reflected 
concerns that State DOTs would need more time to put in place bridge 
and pavement management systems meeting the standards established by 
this rule. Commenters also were worried about the amount of time that 
would be needed to coordinate with other entities, including other 
owners of NHS pavements and bridges. Overall, commenters indicated 
State DOTs would need more than the proposed 1 year to develop an asset 
management plan. Commenters suggested time frames ranging from 18 
months to 4 years. Some commenters supported the proposed phase-in of 
asset management requirements. Others suggested that instead of a 
phase-in, FHWA require a complete asset management plan by a deadline 1 
year after the publication of the last of the FHWA performance 
management rules under 23 U.S.C. 150.
    In response, FHWA believes there are three conditions that have 
substantial impacts on the ability of State DOTs to develop asset 
management plans that fully comply with 23 U.S.C. 119. First, the 
rulemaking establishing performance measures for NHS pavements and 
bridges needs to be completed well in advance of the deadline for 
submission of a complete asset management plan.\8\ Otherwise, State 
DOTs will not have their 23 U.S.C. 150(d) targets in place and 
available for inclusion in their asset management plans. The FHWA 
considers the section 150(d) targets a critical part of the plans and 
23 U.S.C. 119(e)(2) calls for inclusion of the targets. Second, State 
DOTs need to have FHWA-certified asset management plan development 
processes in place before a complete asset management plan is required. 
Without certainty about the acceptability of the selected processes for 
developing the asset management plan, it will be difficult for a State 
DOT to develop a fully compliant asset management plan. Third, the 
State DOTs need time to ensure they are gathering appropriate data for 
use in their asset management plans.
---------------------------------------------------------------------------

    \8\ State DOTs have 1 year from the effective date of the 
rulemaking to establish their section 150(d) targets (23 U.S.C. 
150(d)(1)).
---------------------------------------------------------------------------

    In the final rule, FHWA addresses these three principles, and the 
commenters' concerns. First, FHWA chose to defer the effective date of 
this rule until October 2, 2017, based on FHWA's determination that 
State DOTs would not be able to comply with this rule without the extra 
time. This provides State DOTs with more time to build the 
organizational, technical, and data foundations necessary for the 
development of an asset management plan. Among the foundational 
components are the bridge and pavement management systems that State 
DOTs will use to develop their plans, the State DOT's proposed asset 
management plan processes, and establishment of State DOT targets for 
NHS pavement and bridge conditions under 23 U.S.C. 150(d).
    Second, in the final rule, FHWA retains and clarifies provisions on 
submission of an initial asset management plan that is subject to 
reduced requirements. The initial plan plays a crucial role in ensuring 
the State DOTs develop workable plan development processes and receive 
FHWA certifications of those processes before the State DOT develops a 
complete asset management plan. The FHWA will use the processes 
described in the initial plan for the first process certification 
review and approval. The FHWA decision on certification of the State 
DOT's processes is due 90 days after the submission of the initial 
plan. Based on the October 2, 2017 effective date for this rule, and an 
anticipated 2016 effective date for the second performance measure 
rulemaking addressing NHS pavement and bridge conditions on the NHS, 
the final rule sets a deadline of April 30, 2018, for the submission of 
an initial asset management plan. Thus, the State DOTs should have 
their processes approved sufficiently in advance of the deadline for a 
complete asset management plan to allow the use of those certified 
processes for the preparation of the fully compliant plan. The April 
30, 2018, deadline for the initial plan permits State DOTs to develop 
their fully compliant asset management plans well after 23 CFR part 490 
performance measures and data requirements for NHS pavements and 
bridges are known. The final rule also provides that State DOTs will 
have at least 6 months after the deadline for establishment of their 23 
U.S.C. 150(d) targets for NHS pavements and bridges to incorporate the 
targets into their asset management plans.
    Third, the final rule sets a deadline of June 30, 2019, for 
submission of a fully compliant asset management plan, together with 
State DOT documentation demonstrating the State DOT has implemented the 
plan. The FHWA will use the submitted complete asset management plan 
and implementation documentation to make the first required consistency 
determination under 23 U.S.C. 119(e)(5).
    The FHWA believes the timelines in the final rule allow State DOTs 
a reasonable amount of time to accomplish the tasks necessary to 
develop their asset management plans. The FHWA believes the selected 
implementation approach overcomes the risk that implementation 
timelines would be too short and would make it impossible for State 
DOTs to comply, thus leaving them no choice but to incur penalties 
under 23 U.S.C. 119(e)(5) or MAP-21 section 1106(b).\9\
---------------------------------------------------------------------------

    \9\ Section 119(e)(5) requires, beginning with the second fiscal 
year after the final asset management rule is effective, FHWA to 
determine whether each State DOT has developed and implemented an 
asset management plan consistent with section 119. Eighteen months 
after the performance management rule for pavement and bridge 
conditions, ``National Performance Management Measures; Assessing 
Pavement Condition for the National Highway Performance Program and 
Bridge Condition for the National Highway Performance Program'' (RIN 
2125-AF53), is effective, MAP-21 section 1106(b) requires FHWA to 
decide whether each State DOT has established the required 23 U.S.C. 
150(d) performance targets and has a fully compliant asset 
management plan in effect (MAP-21 section 1106(b)(1)). Both statutes 
impose a penalty if the State DOT has not met those requirements. 
The MAP-21 section 1106(b) permits FHWA to extend the 18-month 
compliance deadline if the State DOT has made a good faith effort to 
establish the asset management plan and set the required targets 
(MAP-21 section 1106(b)(2)). There is no extension or waiver 
provision for 23 U.S.C. 119(e)(5).
---------------------------------------------------------------------------

Determining Whether a State Has Implemented a Section 119(e) Asset 
Management Plan

    The second fiscal year beginning after the effective date of the 
asset management rule, section 119(e)(5) requires FHWA to determine 
whether State DOTs have developed and implemented asset management 
plans consistent with section 119(e). If a State has not done so, by 
law the Federal share payable on account of any project or activity 
carried out in the State in that fiscal year under section 119, the 
NHPP, is reduced to 65 percent. The NPRM specifically requested 
comments on methods FHWA could use to determine whether a State has 
implemented its asset management plan. (See 80 FR 9231, at 9244, 
published February 20, 2015). The

[[Page 73204]]

NPRM explained that FHWA believes an implementation determination 
should focus on whether the plan's investment strategies lead to ``a 
program of projects that would make progress toward achievement of the 
States' targets for asset condition and performance of the NHS in 
accordance with 23 U.S.C. 150(d), and supporting progress toward the 
national goals identified in 23 U.S.C. 150(b).'' This language is drawn 
from 23 U.S.C. 119(e)(2).
    Many comments in response to the NPRM touched on issues related to 
implementation. Those comments related to NPRM section 515.013(c) on 
consistency determinations, as well as to proposed regulatory language 
on the purpose of part 515 (NPRM section 515.001), on defining and 
developing financial plans (NPRM sections 515.005, 515.007(a)(4), and 
515.009), and defining and developing investment strategies (NPRM 
sections 515.005, 515.007(a)(5) and 515.009). Some commenters suggested 
FHWA measure implementation based on whether the State has followed the 
process and plan content requirements in proposed sections 515.007 and 
515.009 of the regulation. Others proposed FHWA consider only whether a 
State has met its NHS pavement and bridge performance management 
targets established pursuant to 23 U.S.C. 150. Most comments on this 
topic raised concerns about any FHWA evaluation of implementation based 
on the projects a State includes in its STIP. Commenters generally 
expressed strong views about the importance of preserving a State's 
right to select the projects that will receive title 23 funding. Some 
commenters also indicated that investment decisions and judgments made 
by a State DOT in its asset management plan should not be subject to 
FHWA review.
    The FHWA interprets section 119(e), and especially section 
119(e)(5), as requiring FHWA to ensure States implement asset 
management plans for NHS assets. At the same time, FHWA recognizes the 
States' prerogative to select projects that will receive Federal 
financial assistance under title 23, and the importance of providing 
States the flexibility to respond to the needs within their 
jurisdictions. The FHWA believes the final rule adopts an approach that 
appropriately balances these imperatives.
    When making a consistency determination under section 515.13(b) of 
the final rule, FHWA will evaluate whether the State developed an asset 
management plan that conforms to part 515 and has implemented the 
investment strategies in that plan. For the implementation part of the 
consistency determination, FHWA will look at whether the State DOT's 
funding allocations for the preceding 12 months are reasonably 
consistent with the investment strategies in the State DOT's asset 
management plan. The review also will consider any reasons offered by 
the State for why the State has not been able, or decided not, to 
allocate funds in a manner consistent with one or more of the 
investment strategies in its asset management plan. In sum, a State 
will have to document what actions the State took to implement its 
investment strategies through funding allocations. If a State is unable 
to allocate funds in accordance with investment strategies in its asset 
management plan, the State also must document its good faith efforts 
and the reasons the State was not able to implement the strategy 
despite its good faith efforts. States have discretion to choose how to 
document this information.
    These requirements are contained in Sec.  515.13(b) of the final 
rule. The FHWA has revised proposed Sec.  515.009(h), to eliminate the 
reference to the selection of projects for inclusion in the STIP. The 
language of the final rule requires State DOTs to integrate asset 
management plans into the transportation planning processes that lead 
to their STIPs, to support efforts to achieve the goals in Sec.  
515.9(f)(1) through (4). This means a State DOT must consider its asset 
management plan, including the investment strategies in the plan, as a 
part of the decisionmaking process during planning.
    The approach adopted in the final rule does not look at project-
specific investments, and imposes no STIP requirements. The final rule 
does not require any FHWA approval of the State's investment 
strategies, or of projects included in a STIP. The final rule uses the 
State's allocation of funds at the strategic program, network, or asset 
class level as the measure of asset management plan implementation, not 
project selection. The FHWA believes allocation of funding at those 
levels inherently results in ``a program of projects'' within the 
meaning of 23 U.S.C. 119(e)(2).
    While section 150 target achievement is important, and serves as 
one part of an overall scheme for achieving and sustaining a healthy 
NHS, the final rule does not use achievement of section 150 targets as 
the determinative measure of asset management plan implementation. 
There are several reasons for this decision.
    First, section 150 targets are short term in nature because they 
are established on 2-year and 4-year cycles. This is a narrower scope 
than is required for asset management plans, which are intended to 
identify and establish paths toward longer term objectives, as well as 
account for section 150 performance targets. The targets will serve as 
incremental indicators of the State's progress toward its long term 
goals when those targets are well-aligned with the long term goals and 
investment strategies in the State's asset management plan. However, 
while FHWA anticipates States will elect to align their section 150 
targets with the investment strategies in their asset management plans, 
States are not required to do so. Thus, there is no guaranteed 
relationship between section 150 targets and the investment strategies 
in a State's asset management plan.
    Second, target achievement alone proves nothing about whether a 
State is using a risk-based asset management plan as required under 
section 119(e) and this rule. Asset management, by definition, employs 
economic and engineering analyses to identify a structured sequence of 
actions that will achieve and sustain a desired state of good repair 
over the life-cycle of the assets at minimum practicable cost. A 
State's means of achieving its section 150 targets may be entirely 
divorced from the investment strategies in its asset management plan.
    Moreover, on occasion, a State's desire to achieve its section 150 
targets could override asset management considerations, such as 
managing assets over their life-cycle at minimum practicable costs, or 
fulfilling long term NHS needs. The FHWA believes asset management plan 
implementation occurs when a State is pursuing whatever investment 
strategies the State chooses to adopt in its plan. For these reasons, 
FHWA decided achievement of section 150 targets will not be used to 
decide whether a State has implemented its asset management plan.

Relationship Between MAP-21 Section 1315(b) Evaluations and Asset 
Management Plans

    The NPRM proposed implementing regulations for MAP-21 section 
1315(b), which requires periodic evaluations to determine if there are 
reasonable alternatives to roads, highways, and bridges that have 
repeatedly require repair and reconstruction activities. The NPRM 
proposed a number of requirements relating to the use of the results of 
the evaluations. The proposal reflected FHWA's view that it is crucial 
for asset management plans to include relevant MAP-21 section 1315(b) 
evaluation information and address the

[[Page 73205]]

information in the asset management plan's risk analysis. The State 
DOT's asset management plan is a key mechanism for determining 
transportation needs and investment priorities. One of the primary 
intended outcomes of the MAP-21 section 1315(b) requirements is for the 
evaluations to help State DOTs make informed decisions on those issues. 
The FHWA believes requiring integration of the two processes is 
important to achieving the statutory purposes of both MAP-21 section 
1315(b) and 23 U.S.C. 119(e).
    However, comments received in response to the NPRM made it evident 
to FHWA that the proposed rule was not clear enough about the 
relationship, and the differences, between asset management and MAP-21 
section 1315(b) evaluations. Similarly, the comments made it apparent 
there is confusion about the relationship and differences between MAP-
21 section 1315(b) and the title 23 Emergency Relief Program funding 
eligibility provisions in 23 U.S.C. 125 and implementing regulations in 
23 CFR part 668. Given these comments, FHWA decided the asset 
management regulations and the section 1315(b) regulations should be 
separated. Accordingly, in the final rule FHWA assigns the MAP-21 
section 1315(b) regulations their own part in the Code of Federal 
Regulations (CFR). In the final rule, the 1315(b) regulations are in 23 
CFR part 667. This will make it clearer that the evaluation 
requirements are independent. While there are interrelationships among 
the activities and requirements of the Emergency Relief (ER) Program, 
asset management, and 1315(b) evaluations, the evaluation requirements 
are not part of either the Asset Management Program or the Emergency 
Relief Program.
    Second, FHWA removed from 1315(b) regulation the language proposed 
in NPRM Section 515.019(d) on the inclusion of evaluation summaries in 
the State DOT's asset management plan. With this change, only the asset 
management regulations have provisions regarding treatment of the 
evaluation information in asset management plans (see sections 515.7(c) 
and 515.9(d) of the final rule). This change reduces duplication and 
places all the provisions relating to asset management plans in the 
asset management regulation.

Facilities Subject to Evaluation Under MAP-21 Section 1315(b)

    The FHWA received a number of comments relating to the scope and 
applicability of the proposed implementing regulations for MAP-21 
section 1315(b). Some asked FHWA to limit the evaluation requirements 
to NHS assets. Others suggested FHWA require evaluations only for 
assets in the State DOT asset management plan. Commenters raised 
concerns about the availability of data needed to perform the required 
evaluations. Some commenters indicated the time period covered by the 
evaluations should be determined with data availability in mind. They 
believed that the evaluation period should be short enough to ensure 
good records existed for repairs and reconstruction performed as a 
result of emergency events. Others stated it would likely prove 
difficult to obtain necessary data from local entities, and to require 
evaluations of facilities not owned by the State would impose an unfair 
burden on the State DOTs.
    The comments clearly indicated a need for greater clarity in the 
rule about which roads, highways, and bridges are covered by the rule. 
The MAP-21 section 1315(b)(1) requires the evaluation of reasonable 
alternatives for ``roads, highways, or bridges that repeatedly require 
repair and reconstruction activities.'' The statute makes no 
distinction based on NHS status, ownership, or inclusion in a State's 
asset management plan. The FHWA does not believe there is a basis for 
limiting the statute's coverage to NHS or State-owned routes. The final 
rule defines ``roads, highways, and bridges'' for purposes of part 667 
as meaning a highway, as defined in 23 U.S.C. 101(a)(11), that is open 
to the public and eligible for financial assistance under title 23, 
U.S.C.; but excluding tribally owned and federally owned roads, 
highways, and bridges. The definition draws from the NPRM language 
(NPRM section 515.019(a)) on title 23 eligibility, as well as from the 
definitions of ``Federal-aid highway'' in 23 U.S.C. 101(a). However, 
unlike the term ``Federal-aid highway'' under 23 U.S.C. 101(a)(6), the 
final rule's definition does not exclude highways or roads functionally 
classified as local roads or rural minor collectors, because MAP-21 
section 1315(b) does not do so. The FHWA views all facilities meeting 
the definition of ``roads, highways, and bridges'' in this final rule 
as subject to the evaluation requirement.
    With respect to data issues, FHWA has set the starting date for the 
evaluations as January 1, 1997. This date is far enough back in time to 
capture damage trends, but recent enough to make it likely data is 
available for many, if not most, of the facilities subject to the rule. 
The FHWA also added a provision, in section 667.5(b) of the final rule, 
limiting the State DOT's data responsibility to using reasonable 
efforts to obtain the data needed for the evaluations. If the State DOT 
determines the needed data is not reasonably available for a road, 
highway, or bridge, the State DOT must document that fact in the 
evaluation. Together, these measures substantially reduce the potential 
burden on the State DOTs, while maintaining the rule's consistency with 
the objectives of MAP-21 section 1315(b).

Consideration of MAP-21 Section 1315(b) Evaluation Results by States 
and FHWA

    In the NPRM, FHWA requested comments on two specific issues related 
to 1315(b): whether the rule should require States to consider the 
evaluations prior to requesting title 23 funding; and whether the rule 
should address when and how FHWA would consider the evaluations of 
reasonable alternatives in connection with a project approval.
    As to whether the rule should require States to consider the 
evaluations prior to requesting title 23 funding, commenters stated 
FHWA should not require States to consider the section 1315(b) 
alternatives evaluation prior to requesting title 23 funding for a 
project.\10\ Among the concerns expressed by commenters was that 
developing alternatives might take months or even years to complete, 
which would preclude rapid response to an emergency and restoring the 
functionality of the transportation system as quickly as possible. Some 
argued that when a facility is damaged due to an extreme event, the 
requirement to conduct and submit an evaluation for review prior to 
approval of funding could create an undue hardship to the public.
---------------------------------------------------------------------------

    \10\ AASHTO, Connecticut DOT, Delaware DOT, Maryland DOT, 
Mississippi DOT, New Jersey DOT, Oregon DOT, Tennessee DOT, Virginia 
DOT, Washington State DOT.
---------------------------------------------------------------------------

    The FHWA believes the statutory intent cannot be achieved if State 
DOTs and FHWA do not take evaluation results into consideration. The 
FHWA notes that as articulated in the statute, the evaluations are 
intended to support long-term investment decisionmaking in a manner 
that results in the conservation of Federal resources and protection of 
public safety and health. These objectives can most easily be 
accomplished if the evaluations are considered early in the project 
development process. In light of the statutory purpose and potential 
burdens on State DOTs, FHWA concluded the

[[Page 73206]]

final rule should require State DOTs to consider the information, but 
provide flexibility in terms of when that consideration occurs. Under 
the final rule, State DOTs must consider the results of an evaluation 
when developing projects involving facilities subject to part 667 
(other than emergency repair projects under 23 CFR part 668), and 
encourages the State DOTs to include consideration of the evaluations 
in the transportation planning process and the environmental review 
process. However, State DOTs are free to decide when in the overall 
project development process they wish to consider the information. The 
final rule expressly states that it does not prohibit a State DOT from 
responding immediately to an emergency, and restoring the functionality 
of the transportation system as quickly as possible, or from receiving 
funding under the ER Program.
    The FHWA received several comments on the question whether the rule 
should address when and how FHWA would consider the evaluations of 
reasonable alternatives in connection with a project approval. Some 
commenters stated FHWA should not address when and how it would 
consider the section 1315(b) alternatives evaluation in connection with 
FHWA project approval. Others supported inclusion of the information in 
the rule. One concern was States should be given maximum flexibility to 
address damage due to extreme events because upgrading a facility to 
address a given probability of future repairs could be financially 
impractical.
    The FHWA considered the comments and the purposes of the underlying 
statute. The FHWA also considered the issue in the context of FHWA's 
risk-based stewardship and oversight approach to program 
administration. The FHWA determined the final rule should not specify a 
particular milestone at which FHWA will consider evaluation results, 
but should make it clear FHWA reserves the right to consider the 
results whenever FHWA believes it is appropriate to do so. Accordingly, 
the final rule provides FHWA will periodically review the State DOT's 
compliance with part 667, to determine whether the State DOT is 
performing the evaluations and considering the results in a manner 
consistent with part 667. The FHWA will also consider whether the 
evaluations are having the beneficial effects on investment decisions 
that the statute promotes. This is for the purpose of assessing 
nationally whether the regulation is effective. In addition, the final 
rule makes it clear that FHWA may consider the results of the 
evaluations when it makes a planning finding under 23 U.S.C. 134(g)(8), 
when it makes decisions during the environmental review process for 
projects involving roads, highways, or bridges subject to part 667, or 
when approving funding.

Implementation Timeline for MAP-21 Section 1315(b) Evaluations

    The proposed rule included a phased approach to implementing the 
evaluation requirements under MAP-21 section 1315(b). As proposed, the 
rule would have given States 2 years after effective date of the final 
rule to complete evaluations for NHS highways and bridges and any other 
assets included in the State DOT's asset management plan. The State 
DOTs would have had 4 years after the effective date of the final rule 
to complete the evaluation for all other roads, highways, and bridges 
meeting the criteria for evaluation. In the NPRM, FHWA requested 
comments on whether the time frames for the initial evaluations in the 
proposed rule were appropriate and, if not, how much time ought to be 
allotted.
    Several commenters indicated the 2 years allotted for the initial 
evaluations of assets in the State DOT asset management plan was 
appropriate. Others called for flexibility in the timeframes or stated 
they could not answer the question without knowing more specific 
information about the evaluation process, such as the length of the 
look-back, the scale of repair to be considered, and the availability 
of data. With regard to the evaluation deadline for all other 
facilities not in the State DOT's asset management plan, several 
commenters stated that the 4 years allotted for the first evaluation of 
such other facilities was appropriate. Others indicated the time needed 
depended on the scope of the phrase ``roads, highways, and bridges,'' 
and that an appropriate timeframe depends on the complexity and 
sophistication of the expected evaluations, data availability, and 
other factors.
    In developing the final rule, FHWA considered all of the comments 
on evaluation deadlines, along with related comments submitted with 
regard to the definition of ``roads, highways, and bridges'' (discussed 
in this section under Facilities Subject to Evaluation under MAP-21 
Section 1315(b)). The FHWA acknowledges the potential burdens on State 
DOTs caused by the breadth of the MAP-21 section 1315(b) mandate, and 
believes these burdens ought to be considered when determining the 
timing for the first evaluation and the frequency of evaluations 
required for the varying types of roads, highways, and bridges covered 
by the rule.
    Given the various factors, FHWA concluded the purposes of the 
statute (conservation of Federal resources and protection of public 
safety and health) can best be accomplished by focusing State DOT 
efforts primarily on NHS roads, highways, and bridges. The FHWA also 
concluded it would be reasonable to require evaluation of a non-NHS 
facility only when there is some plan to do work on the facility. 
Accordingly, under the final rule States must complete the first 
evaluations for NHS roads, highways, and bridges within 2 years after 
the effective date for part 667. States may defer the evaluations of 
other roads, highways, and bridges for 4 years after the effective date 
for part 667, and those evaluations will be required based on a 
timeline tied to the proposal of a project on the road, highway, or 
bridge. Prior to including any project relating to a non-NHS road, 
highway, or bridge in its STIP, the State DOT must prepare an 
evaluation that conforms to part 667 for the affected portion of the 
facility.
    The FHWA believes the final rule provisions are consistent with the 
objectives of MAP-21 section 1315(b) and within FHWA's discretion to 
interpret the meaning of ``periodic evaluation'' in the statute. The 
final rule reduces the potential burden on State DOTs by focusing the 
highest and most immediate level of effort on evaluations of assets 
that are of high Federal interest and must be in State asset management 
plans. Evaluations for other roads, highways, and bridges are required 
only when there is some reasonable likelihood work will be performed on 
those facilities.

VI. Section-by-Section Discussion of Comments

    This section describes individual comments received in response to 
the NPRM and FHWA's responses. Because the final rule assigns different 
numbering to some parts of the rule, and reorganizes portions of the 
rule, this section provides a reference to the provision as it appeared 
in the NPRM, and a reference to the location of the material in the 
final rule. This section also serves as a summary of changes the final 
rule makes to the regulatory text in the NPRM as a result of the 
comments. For topics on which similar comments were submitted on 
multiple parts of the proposed rule, FHWA has consolidated the comments 
and responses into a single discussion.

[[Page 73207]]

A. Asset Management Plans, Part 515

NPRM Section 515.001 (Final Rule Section 515.1)
    The FHWA received four comments on the purpose provision in the 
NPRM. The Alabama DOT and AASHTO recommended that FHWA revise section 
515.001 to make clear that States retain the prerogative to select 
individual projects. The AASHTO also requested that FHWA revise section 
515.001 to clarify that the investment decisions and judgments made by 
a State DOT in its asset management plan are not within the scope of 
FHWA's review.
    After considering the comments and the nature of section 515.001, 
FHWA does not see the need to revise section 515.001. However, FHWA has 
modified section 515.9(h) and section 515.13(b) of the final rule to 
address these comments. The revisions to section 515.9(h) clarify the 
relationship between a State's asset management plan and its STIP, 
which identifies specific projects for implementation. The FHWA did not 
intend to state or imply in the proposed rule that it is FHWA's role to 
validate a State's selection of individual projects or investment 
decisions. However, a State asset management plan must include 
strategies leading to a program of projects, and States are required to 
follow the statutory asset management framework to develop a 
performance-driven plan and to arrive at their investment strategies 
(see 23 U.S.C. 119(e)(2) and (4)). The processes used to develop this 
plan are subject to FHWA certification, as required by 23 U.S.C. 
119(e)(6). The State asset management plan and the State's 
implementation of the plan are subject to FHWA review to determine if 
the State has complied with the requirements in 23 U.S.C. 119 and part 
515. The revisions to section 515.13(b) clarify that this FHWA 
consistency determination does not involve any approval of the 
investment strategies or other decisions embodied in State asset 
management plans.
    Alaska DOT suggested that FHWA remove proposed section 515.001(c), 
which relates to minimum standards for bridge and pavement management 
systems, and proposed section 515.001(e), which relates to the periodic 
evaluation of facilities requiring repair and reconstruction due to 
emergency events. In response, FHWA notes both of the cited provisions 
relate to statutory responsibilities for which this final rule 
establishes implementing regulations. Section 150(c)(3)(A)(i) of title 
23 U.S.C., requires the Secretary to establish minimum standards for 
States to use to develop and operate bridge and pavement management 
systems for the purpose of carrying out 23 U.S.C. 119. Section 1315(b) 
of MAP-21 mandates that the Secretary, through rulemaking, provide for 
periodic evaluations to determine if reasonable alternatives exist to 
roads, highways, or bridges that repeatedly require repair and 
reconstruction activities. This final rule contains implementing 
regulations for both statutory provisions. However, because the final 
rule revises the proposed organization of part 515, this final rule 
moves NPRM section 515.001(c) to section 515.1(d). The final rule also 
relocates all provisions relating to MAP-21 section 1315(b) to a 
separate part of title 23 of the CFR, and for that reason removes NPRM 
section 515.001(e) from part 515.
    Colorado DOT requested clarification as to why the proposed rule 
addresses both asset management plans and periodic evaluations of 
facilities requiring repair or reconstruction due to emergency events. 
This commenter said that the requirement to develop risk-based asset 
management plans should help States identify risks associated with 
emergency events. However, according to Colorado DOT, the proposed rule 
would require implementation of processes and procedures after an 
emergency event occurs that could conflict with asset management 
approaches.
    The FHWA chose to address both subjects in the proposed asset 
management rule because comments received through an earlier 
rulemaking, Environmental Impact and Related Procedures NPRM (77 FR 
59875, Oct. 1, 2012) supported that approach. Additionally, the NPRM 
proposed, in sections 515.007 and 515.009, requiring asset management 
plans to include in their risk analysis the results of the periodic 
evaluations of facilities requiring repair and reconstruction due to 
emergency events. However, based on comments on the NPRM, FHWA decided 
to separate the asset management regulations from the MAP-21 section 
1315(b) regulations, to reduce confusion and clarify that asset 
management, MAP-21 section 1315(b) requirements, and FHWA's ER Program 
are separate programs. The final rule also makes it clear that the 
periodic evaluation requirements do not prevent a State DOT from 
responding to an emergency event (see final rule section 667.9(a)).
NPRM Section 515.003 (Final Rule Section 515.3)
    The FHWA received a number of comments on the applicability 
provision in section 515.003 of the proposed rule. Several commenters 
addressed the roles of agencies beyond State DOTs. Maryland DOT 
suggested that the responsibility for preparing an asset management 
plan should apply to all agencies that own and operate at least 0.1-
mile segments of NHS, regardless of whether the responsible party is a 
Federal, State, or local agency. Two commenters specifically addressed 
whether or how the proposed rule would apply to MPOs. New York State 
Association of MPOs said that MPOs have a significant stake in the 
rulemaking, because they are responsible for planning and managing 
investments for entire regional transportation systems. Colorado DOT 
asked whether MPOs should be required to develop asset management plans 
if performance reporting is required to be split by full-State and MPO 
boundaries.
    In response, FHWA notes that 23 U.S.C. 119(e)(1) requires States to 
develop risk-based asset management plans for the NHS. No other 
entities are required by statute to share the responsibility of 
developing and implementing asset management plans for the NHS. 
Therefore, no change has been made to section 515.3 in response to 
these comments. The FHWA recognizes that State DOTs are not the sole 
owners of the NHS, and acknowledges the role of other NHS asset owners 
in coordinating with State DOTs. The FHWA agrees that MPOs have a 
significant role in planning and managing investments. Their roles and 
responsibilities with regard to asset management plans are addressed in 
23 U.S.C. 134(h)(2)(D) and 23 CFR 450.306(d)(4). These provisions 
require MPOs to integrate into the metropolitan transportation planning 
process the goals, objectives, performance measures, and targets 
described in other State transportation plans and transportation 
processes, including State asset management plans for the NHS. For 
further discussion of the role of MPOs and non-State owners of the NHS, 
see Section V, Asset Management Plan Treatment of NHS Pavements and 
Bridges Not Owned by State DOTs.
NPRM Section 515.005 (Final Rule Section 515.5)
    Numerous commenters responded to FHWA's request for comments on the 
proposed definitions and suggestions for any additional terms that 
should be defined in the rule. The FHWA acknowledges these comments and 
appreciates the level of response.
    The Geospatial Transportation Mapping Association (GTMA) supported 
the NPRM's proposed definitions for ``bridge,'' ``risk,'' and 
``Statewide Transportation Improvement

[[Page 73208]]

Program.'' The FHWA acknowledges the comments and appreciates the 
support for those NPRM definitions. The remaining comments are 
discussed below. The comments are addressed under the terms to which 
the comments relate, in alphabetical order.
Asset
    Six commenters provided input on the proposed definition of 
``asset.'' The AASHTO and Connecticut and New Jersey DOTs stated that 
FHWA should include definitions of ``asset class,'' ``asset group,'' 
and ``asset sub-group'' in section 515.005 and use them consistently 
throughout the final rule. These commenters recommended the following 
definitions:
     Asset--Property that is owned, operated, and maintained by 
a transportation agency. This includes all physical highway 
infrastructure located within the right-of-way corridor of a highway. 
The term asset includes all components necessary for the operation of a 
highway including pavements, highway bridges, tunnels, signs, ancillary 
structures, and other physical components of a highway. Inclusion of 
property within the scope of this definition does not mean that it is a 
property subject to the asset management plan requirements of this 
part.
     Asset Group--A collection of assets that serve a common 
function (e.g., roadway system, safety, IT, signs, lighting).
     Asset Class--A group of assets with the same 
characteristics and function (e.g., bridges, culverts, tunnels, 
pavement, guardrail).
     Asset Sub-Group--A specialized group of assets within an 
Asset Class with the same characteristics and function (e.g., concrete 
pavement or asphalt pavement).
    Similarly, Colorado DOT requested that FHWA revise the definition 
of ``asset'' to reflect the definition provided in AASHTO's 
Transportation Asset Management Guide: A Focus on Implementation, 1st 
Edition.
    The FHWA believes that the definition provided in AASHTO's 
Transportation Asset Management Guide, although correct and inclusive 
for AASHTO's purposes, goes beyond the physical assets that are the 
subject of asset management plans required by title 23 U.S.C. 119(e) 
and the definition of asset management in 23 U.S.C. 101(a). The AASHTO 
Transportation Asset Management Guide, a Focus on Implementation (2nd 
Edition) (AASHTO Guide) expands the definition of asset from ``physical 
highway infrastructure'' to a broader term, ``property.''
    In addition, transportation agencies are not the sole owners of 
highway assets. Assets are owned, operated, and maintained by entities 
other than transportation agencies, such as cities. Therefore, FHWA has 
not changed the definition of ``asset'' in the final rule. The FHWA 
agrees it could be helpful to add definitions to section 515.5 in final 
rule for ``asset class,'' ``asset group,'' and ``asset sub-group'' 
because those terms are used in the final rule. Accordingly, FHWA added 
a definition for the term ``asset class'' to the final rule. The new 
definition incorporates the concepts in AASHTO's suggested definitions 
of ``asset class'' and ``asset group.'' The FHWA also added a 
definition of the term ``asset sub-group'' that adopts AASHTO's 
suggested definition for that term.
    Oregon DOT asked about the intended meaning of the term ``right of 
way corridor'' in the NPRM's proposed definition of ``asset,'' and 
requested information on the relationship of the ``right-of-way 
corridor'' to the eligibility for funding of a highway or transit 
project in the same ``corridor'' of an NHS route. The commenter stated 
that if a State elects to undertake improvements to a parallel non-NHS 
route or a transit project within an NHS corridor that can be shown to 
provide benefits over and above improvements to the NHS itself, then 
FHWA should include language encouraging such undertakings. In 
response, FHWA notes that the issue of funding eligibility is beyond 
the scope of this rulemaking. Also, being parallel to an NHS route does 
not classify a route as an NHS route. However, if a State elects to 
undertake improvements to a parallel non-NHS route or a transit project 
within a NHS corridor that can be shown to provide benefits to the NHS 
itself, such as improved performance of the NHS, then the State DOT is 
encouraged to include such undertaking in its asset management plan.
    The GTMA supported the proposed definition of ``asset,'' but 
requested clarification on whether ``ancillary structures'' refers to 
guardrail and light structures. The GTMA also stated that it would be 
helpful to know if ``other physical components of a highway'' includes 
pavement markings. The FHWA notes that AASHTO has defined ``ancillary 
structures'' as ``lower-cost, higher-quantity assets that also play an 
important role in the overall success of transportation systems: Assets 
such as traffic signs, traffic signals, roadway lighting, guardrails, 
culverts [20ft or less], pavement markings, sidewalks and curbs, 
utilities and manholes, earth retaining structures and environmental 
mitigation features.'' According to this definition, which FHWA 
accepts, guardrail, light structures, and pavement markings are 
considered to be ancillary structures.
    New Jersey DOT stated that all roadways that do not specifically 
prohibit pedestrians should accommodate them, and the listing of 
components in the definition of ``asset'' should include ``sidewalks, 
if within the right of way.''
    In response, FHWA notes it considers sidewalks to be among ``other 
physical components of a highway,'' but does not believe a revision to 
the definition in the rule is required because the rule is not intended 
to contain an exhaustive list of assets.
Asset Condition
    Four commenters provided input on the proposed definition of 
``asset condition'' as ``the actual physical condition of an asset in 
relation to the expected or desired physical condition of the asset.'' 
The AASHTO and Connecticut DOT said the definition of ``asset 
condition'' should be changed to remove the linkage to expected or 
desired physical condition. Similarly, New Jersey DOT suggested the 
removal of the word ``desired'' from the proposed definition because it 
implies a value judgment. It suggested the definition use the term 
``target'' or ``minimum target condition'' instead. The GTMA suggested 
that expected condition of an asset requires the development of a life-
cycle approach to asset management and recommended that the definition 
of ``asset condition'' be amended to mean ``the actual physical 
condition of an asset in relation to the expected or desired physical 
condition of the asset's useful life.''
    After considering the comments, FHWA modified the definition of 
``asset condition'' in section 515.5 to eliminate the phrase ``in 
relation to the expected or desired physical condition of the asset.'' 
The proposed definition included the phrase as a way to convey that 
actual asset condition has a role on setting future targets for asset 
condition. However, FHWA recognizes the actual physical condition of 
assets should be determined independent of what the expected or desired 
condition might be. As the comments illustrated, referring to the 
future condition in the definition could be interpreted differently 
than what FHWA intended.

[[Page 73209]]

Asset Management
    Seven commenters provided input on the proposed definition of 
``asset management.'' The GTMA supported the definition as proposed. 
Oregon and Minnesota DOTs said the rule should clarify that declining 
condition and performance of NHS and other transportation assets is an 
acceptable and realistic expectation in asset management plans. 
Maryland DOT suggested a definition that clarifies that the process for 
creating asset management plans is a decision-support tool, as opposed 
to the sole process upon which decisionmaking would rely. A few 
commenters provided input on the use of the term ``resurfacing'' within 
the definition. Washington State and South Dakota DOTs stated that 
``resurfacing'' is a form of ``rehabilitation,'' not a type of 
``replacement action.'' The AASHTO and Washington State DOT stated that 
FHWA should include operational methods, such as crack sealing, that 
can extend the life and performance of the pavement at a much lower 
cost than resurfacing. Similarly, Oregon DOT stated that the final rule 
should include language encouraging States to include operational 
activities (e.g., traveler information systems, synchronized and 
adaptive traffic signal systems, advanced traffic, freight and incident 
management systems) as recognized activities to be considered in a 
State's asset management plan.
    In response to the comments, FHWA notes it received similar 
comments on the need to allow for declining conditions in response to 
the proposed language in section 515.007(a)(1). The comments are 
addressed in the discussion of that section. The comments pertaining to 
the role of an asset management plan in project selection and other 
planning and programming decisions are similar to comments received in 
connection with proposed section 515.009(h). Those comments are 
addressed in the discussion of section 515.009(h).
    Comments about ``resurfacing'' and other types of activities that 
commenters suggested FHWA include in the definition of ``asset 
management'' prompted FHWA to reconsider whether it would be useful to 
expand on the 23 U.S.C. 101(a)(2) definition of asset management, as 
was proposed in the NPRM. While the proposed sentence was intended to 
be illustrative, not exhaustive, the comments show the language 
generated concerns about the completeness and intended scope of the 
definition. As a result, FHWA decided to use the statutory definition 
of ``asset management'' verbatim in the final rule. This decision is 
based on the large number of activities that may fall within the 
statutory categories of ``maintenance, preservation, repair, 
rehabilitation, and replacement actions,'' and on the fact that there 
is variation in how individual States define their construction 
activities. With regard to inclusion of operational activities in a 
State's asset management plan, FHWA recognizes the importance of these 
activities to the performance of the NHS. However, these activities are 
beyond the scope of the States' asset management plans because the 
plans address the management of physical assets. The FHWA notes that 
the final rule allows States to include other assets, including those 
physical assets that support operational activities, in their plans.
Asset Management Plan
    Seven commenters provided input on the proposed definition of 
``asset management plan.'' The GTMA supported the definition as 
proposed. Maryland DOT suggested a revision to the definition to make 
explicit the flexibility required to deliver an asset management plan 
based on decisionmaking processes unique to each State DOT. The 
commenter noted that the final rule also should underscore the fact 
that an asset management plan is a living document, subject to ongoing 
updates and revisions. Oregon DOT stated that States do not manage 
their transportation systems solely to preserve or improve the physical 
condition of NHS highways and bridges, and States should be encouraged 
to extend consideration of condition and performance beyond that 
related exclusively to ``physical condition.''
    In response to these comments, FHWA notes that State DOTs have 
flexibility to develop their own unique processes as long as they meet 
the minimum process requirements defined by section 515.7 of the rule. 
Section 515.13 acknowledges that the asset management plan is a living 
document by requiring State DOTs to update their asset management 
plans, at a minimum, every 4 years, and otherwise amending the plans as 
needed. The updated and amended plans must include the enhancements 
made to the asset management processes and the results of analyses 
based on updated data. The FHWA acknowledges that States do not manage 
their transportation systems solely to preserve or improve their 
physical condition. However, the definition of ``asset management'' in 
23 U.S.C. 101(a) focuses on physical assets. Also, 23 U.S.C. 119(e) 
expressly addresses physical condition and performance of the NHS. 
Consequently, FHWA has not made a change to the definition in response 
to these comments.
    The AASHTO and several State DOTs stated that the final rule should 
clarify that States would be free to develop asset management 
initiatives of their own design for non-NHS assets and would be free to 
address them any way that they want for their own purposes.\11\ These 
commenters suggested revising the definition of ``asset management 
plan'' to make clear that it refers to the plan (or part of a broader 
asset management plan) that the State ``submits to FHWA for review 
under this part.'' Alaska DOT suggested that the proposed definition be 
revised by deleting most of the second sentence and part of the third, 
from ``and other public roads included in the plan at the option of the 
State DOT. . .'' up to ``achieve a desired level of condition and 
performance while managing the risks, in a financially responsible 
manner, at a minimum practical cost over the life cycle of its 
assets.''
---------------------------------------------------------------------------

    \11\ DOTs of ID, MT, ND, SD, and WY (joint submission); Wyoming 
DOT; Connecticut DOT.
---------------------------------------------------------------------------

    In response to these comments, FHWA notes that nothing in the 
proposed or final rule prevents State DOTs from employing other 
management strategies for managing assets not included in the asset 
management plan required under 23 U.S.C. 119(e) and part 515. The FHWA 
notes that other public roads are an important part of any State 
highway network and may be included in the part 515 asset management 
plan if the State wishes. For these reasons, FHWA does not believe the 
comments warrant a revision to the definition of ``asset management 
plan'' proposed in the NPRM. This definition includes flexibility for 
States to elect to include other public road assets in their federally 
required plan, beyond the NHS pavements and bridges mandated by 23 
U.S.C. 119(e) and this rule.
    With respect to the comments relating to the term ``desired level 
of condition,'' those comments are similar to comments objecting to the 
word ``desired'' in other parts of the proposed rule. Several 
commenters requested the removal of the word ``desired'' from the rule, 
stating that it is ambiguous and implies a value judgment. The AASHTO 
and Connecticut DOT stated that FHWA should remove any reference to a 
``desired'' condition, but if the terms remain in the final rule, FHWA 
should define the term ``desired condition'' as

[[Page 73210]]

the State-established targets for the asset group. New Jersey DOT 
suggested replacing the word ``desired'' with ``target,'' ``minimum 
target condition,'' ``optimal condition,'' or ``optimal target 
condition.''
    In response, FHWA notes it used the word ``desired'' in the 
proposed rule to mean what the State DOT wants as an outcome. To avoid 
confusion over the intended meaning of the word, FHWA has replaced it 
in a number of places throughout the rule. In the definition of ``asset 
management plan,'' FHWA replaced the phrase ``desired level of 
condition'' with the more specific and focused phrase ``State DOT 
targets for asset condition.''
Budget Needs
    Connecticut DOT requested a definition for ``budget needs.'' The 
FHWA considered this request and determined that no definition is 
needed for these commonly used terms. The concept of addressing budget 
needs is discussed in further detail in FHWA's responses to comments 
received on NPRM Sec.  515.007(b) (bridge and pavement management 
systems).
Capital Improvement
    A private citizen requested a definition for ``capital 
improvement.'' In response, FHWA notes the term is not used in the 
final rule. For that reason, no definition is needed in part 515.
Critical Infrastructure
    Section 1106 of the FAST ACT amended 23 U.S.C. 119 by adding 
subsection 119(j) on critical infrastructure. The new subsection of the 
statute provides that State asset management plans may include 
consideration of critical infrastructure from among the facilities 
eligible under subsection 119(c), and authorizes the use of funds 
apportioned under section 119 for projects intended to reduce the risk 
of failure of critical infrastructure eligible under subsection 119(c). 
The statute defines ``critical infrastructure in 23 U.S.C. 119(j)(1). 
The FHWA is including these FAST Act amendments in this final rule. 
Accordingly, the statutory definition of ``critical infrastructure'' 
was added to section 515.5. Although State asset management plans may 
include consideration of critical infrastructure, how that is done 
should reflect sensitivity to potential security and related issues. 
Accordingly, FHWA is not asking that these critical assets be 
specifically identified as such in the asset management plan.
Desired State of Good Repair
    The AASHTO and several State DOTs requested clarification of the 
term ``desired state of good repair'' and ``state of good repair.'' 
\12\ The AASHTO, several State DOTs, and The city of Wahpeton, ND, said 
the final rule should change any and all proposed references to a 
``state of good repair'' or a ``desired state of good repair'' to 
``target'' or ``State target.'' \13\ Similarly, a joint submission from 
five State DOTs, and an identical submission from Wyoming DOT, said 
vague terms and related requirements are unnecessary and, if they 
cannot be dropped entirely, they need to be reduced and defined in a 
way that will respect State judgments in managing their programs.\14\ 
The AASHTO and Connecticut DOT said ``state of good repair'' is overly 
optimistic and does not consider the State's ability to determine 
investment strategies within available funding. Oregon DOT said 
focusing on the narrower goal of achieving and sustaining a state of 
good repair for an asset can lead to asset management decisions that 
are counter to or undermine the broader goals that an asset management 
plan was established to make progress toward.
---------------------------------------------------------------------------

    \12\ AASHTO; DOTs of ID, MT, ND, SD, and WY (joint submission); 
Mississippi DOT; New Jersey DOT; Oklahoma DOT; Oregon DOT; Oregon 
DOT Bridge Section; Tennessee DOT; Vermont Agency of Transportation; 
Washington State DOT; Wyoming DOT.
    \13\ AASHTO; Alaska DOT; Connecticut DOT; New Jersey DOT; North 
Dakota DOT; South Dakota DOTs; City of Wahpeton, ND.
    \14\ DOTs of ID, MT, ND, SD, and WY (joint submission); Wyoming 
DOT.
---------------------------------------------------------------------------

    In response to these comments, FHWA notes that the statutory 
definition of asset management in 23 U.S.C. 101(a)(2) includes the 
phrase ``. . . achieve and sustain a desired state of good repair. . . 
.'' In addition, the national goal for infrastructure condition is ``. 
. . to maintain the highway infrastructure asset system in a state of 
good repair.'' (23 U.S.C. 150(b)(2)). Therefore, in the final rule, 
FHWA has retained the proposed language in the definition of asset 
management (section 515.5), in the requirements established for the 
performance gap analysis (section 515.7(a), in plan content 
requirements for asset management objectives (section 515.9(d)(1), and 
in the plan content requirement for the discussion of investment 
strategies (section 515.9(f)(1)). However, FHWA has removed the phrases 
``desired state of good repair'' and ``state of good repair'' from two 
places in the rule. Specifically, FHWA eliminated the term ``state of 
good repair'' from the definition of investment strategy in section 
515.5, to better distinguish between the actual investment strategies 
and the outcomes of those strategies. Also, FHWA replaced the phrase 
``measures and targets must be consistent with the objective of 
achieving and sustaining the desired state of good repair'' in section 
515.9(d)(2) with ``measures and targets must be consistent with the 
State DOT's asset management objectives.'' This replacement was made 
based on the retained requirement in section 515.9(d)(1) that the asset 
management objectives discussed in the plan must be consistent with the 
definition and purpose of asset management, which includes achieving 
and sustaining the desired state of good repair. The FHWA decided not 
to define ``desired state of good repair'' because FHWA believes 
``desired state of good repair'' is a concept tied closely to a State' 
goals for its transportation system, and that each State should define 
its ``desired state of good repair'' based on its own circumstances.
Financial Plan
    California DOT and New Jersey DOT requested a definition for 
``financial plan.'' New Jersey stated that their understanding of the 
language in the NPRM is that a financial plan includes the projected 
annual funding needed for identified asset classes or subgroup. Also, 
the agency stated that the financial plan would be supported by 
historical performance and funding data, as well as life cycle cost and 
risk analysis included in the plan. The FHWA agrees with this 
understanding. In response, the FHWA has added a definition for 
``financial plan.'' In Sec.  515.5 of the final rule, the term 
``financial plan'' is defined as ``a long-term plan spanning 10 years 
or longer, presenting a State DOT's estimates of projected available 
financial resources and predicted expenditures in major asset 
categories that can be used to achieve State DOT targets for asset 
condition during the plan period, and highlighting how resources are 
expected to be allocated based on asset strategies, needs, shortfalls, 
and agency policies.''
Financially Responsible Manner
    Seven submissions commented on use of the phrase ``financially 
responsible manner'' in the proposed rule. The term appears in proposed 
sections 515.005 (definitions of asset management and asset management 
plan) and 515.007 (introductory description for required processes). A 
joint submission from five State DOTs, and an identical submission from 
Wyoming DOT, said it is unclear

[[Page 73211]]

what will be required to act in a ``fiscally responsible manner'' and 
asserted that the term and related requirement should be deleted.\15\ 
South Dakota DOT called the term ``vague'' and said that if is not 
deleted from the rule, it should be defined in a way that will respect 
State judgment and allow States flexibility in managing their networks, 
systems, and programs. Other commenters (identified below) recommended 
the following definitions for the phrase ``financially responsible 
manner'':
---------------------------------------------------------------------------

    \15\ DOTs of ID, MT, ND, SD, and WY (joint submission); Wyoming 
DOT.
---------------------------------------------------------------------------

     AASHTO and Connecticut DOT said financially responsible 
manner means that a State is deemed to be implementing an asset 
management plan in a financially responsible manner unless it is 
subject to denial of certification of processes under section 515.013 
for specific requirement deficiencies pertaining to financial elements 
of the asset management plan and beyond the applicable cure period 
under 515.013(a).
     New Jersey DOT said financially responsible manner means 
that a State has demonstrated sufficient financial prudence in the 
development of its asset management plan, unless it is subject to 
denial of certification of processes under section 515.013 for specific 
requirement deficiencies pertaining to financial elements of the asset 
management plan and beyond the applicable cure period under 515.013(a).
     Maryland DOT said financially responsible manner means a 
State DOT's ability to manage its finances so it can meet its spending 
commitments, both now and in the future.
    In response to these comments, FHWA notes that ``financially 
responsible manner'' refers to planning for the future and recognizes 
that there is a high correlation between how the funds are distributed 
on an annual basis and long-term performance. To be financially 
responsible, an agency should know what its goals and targets are, what 
levels of funding and income are expected to be available annually, 
what levels of expenditures are expected, and how to distribute the 
expected funding/income (budget) amongst various activities and 
discretionary items in the short- and long-term to meet the goals, 
targets, and needs of the traveling public. The FHWA disagrees with the 
view, expressed in the comments, that whether a State DOT will manage 
its system in a ``financially responsible manner'' can be determined 
based solely on whether FHWA has certified the State DOT's processes 
for developing an asset management plan. The FHWA does not believe a 
section 515.13(a) certification, which demonstrates that a State DOT's 
processes conform to the section 515.7 process requirements, serves as 
conclusive evidence of the State's behavior with respect to financial 
management.
    After considering the comments received, FHWA has not added a 
definition for this term to the final rule because we believe that the 
plain meaning of the term is evident and sufficient for purposes of 
this rule. In addition, by not defining the term, the final rule 
provides flexibility for the States to address their individual 
circumstance when describing in their asset management plans how they 
will meet the ``financially responsible manner'' requirement.
Investment Strategy
    Nine commenters provided input on the proposed definition of 
``investment strategy'' as ``a set of strategies that result from 
evaluating various levels of funding to achieve a desired level of 
condition to achieve and sustain a state of good repair and system 
performance at a minimum practicable cost while managing risks.'' The 
GTMA supported the definition as proposed. The AASHTO, Connecticut DOT, 
and New Jersey DOT recommended that FHWA simplify the definition to 
reference a singular strategy rather than a ``set of strategies.'' 
Also, these commenters recommended that the investment strategy relate 
specifically to the targets established by the State DOT, rather than 
to ``state of good repair'' or some other condition level or system 
performance that is not defined. Finally, they said the definition 
needs to indicate that an investment strategy is constrained by the 
financial plan. Accordingly, the commenters suggested the following 
definition:

    ``Investment strategy means a strategy resulting from an analysis 
of funding availability to achieve the performance targets established 
by the State DOTs and constrained by the financial plan.''

    Similarly, Alaska DOT said FHWA should remove all language after 
``various levels of funding'' and replace it with ``to achieve the 
targets of the performance measures set in rulemaking.''
    In response to these comments, FHWA notes that 23 U.S.C. 119(e)(2) 
states that ``a State asset management plan shall include strategies 
leading to a program of projects that would make progress toward 
achievement of the State targets for asset condition and performance of 
the National Highway System [NHS] in accordance with section 150(d) and 
supporting the progress toward the achievement of the national goals 
identified in section 150(b).'' Therefore, FHWA has retained the term 
``set of strategies'' in the definition. In addition, the investment 
strategies must address more than just condition targets established by 
the State DOT. The strategies must also support the performance of the 
system as it relates to national goals. Risk analysis points to those 
strategies that can be selected to improve system performance and 
system resiliency through investment in physical assets. For example, 
if there is a need to replace bridges with inadequate height in a 
specific region due to frequent flooding, then the bridges are replaced 
not because of their deteriorated condition, but due to their adverse 
impact on mobility during the flood season. The system performance and 
how it relates to asset management plan is discussed in more detail in 
Section V, System Performance, Performance Measures and Targets, and 
Asset management Plans.
    As discussed in connection with the definition of ``asset 
management plan'' above, a number of commenters opposed the use of the 
word ``desired'' in the proposed definition of investment strategies. 
In response to these comments, FHWA revised the definition of 
``investment strategy'' in the final rule by replacing the phrase ``a 
desired level of asset condition to achieve and sustain a state of good 
repair'' with the phrase ``State DOT targets for asset condition.'' To 
clarify the intent of the rule, FHWA also revised the phrase ``system 
performance'' to read ``system performance effectiveness.'' These 
changes better align the regulatory language with the statutory 
language in 23 U.S.C. 119(e)(2) without repeating the statutory 
language in full. The final rule's definition of ``investment 
strategies'' uses the asset condition and system performance language 
as shorthand for the full requirements in 23 U.S.C. 119(e)(2), 
described above.
    Finally, FHWA acknowledges strategies in an asset management plan 
are constrained by funding; it will not be possible to achieve the 
objectives of asset management unless the amount of funding an asset 
management plan recommends be distributed amongst various investment 
strategies reflects what is available to a State. However, FHWA does 
not believe that adding ``and constrained by the financial plan'' would 
add additional value to the definition, and such addition risks

[[Page 73212]]

confusion with the concept of fiscal constraint in transportation 
planning carried out pursuant to 23 U.S.C. 134 and 135. Therefore, FHWA 
declines to add the phrase ``and constrained by the financial plan'' to 
the definition.
    Commenters provided other suggestions for revising this definition. 
Connecticut and Hawaii DOTs recommended adding ``along with various 
maintenance or improvement actions'' after ``various levels of 
funding.'' CEMEX USA, Portland Cement Association (PCA), and the 
American Concrete Pavement Association (ACPA) recommended that the 
definition be amended to include different allocation of funding across 
activities, as well as various levels of funding.
    In response to these comments, FHWA notes that the term 
``investment strategies'' includes all actions, including various 
maintenance or improvement actions and activities, that lead ``to 
progress toward achievement of the State targets for asset condition 
and performance of the National Highway System . . . and supporting the 
progress toward the achievement of the national goals.'' The term also 
encompasses consideration of various allocations of funding. As a 
result, the FHWA has not made the changes suggested by these comments.
Life-Cycle Benefit Cost Analysis
    Delaware DOT requested a definition for ``life-cycle benefit cost 
analysis'' (as opposed to life-cycle cost analysis (LCCA)). In 
response, FHWA notes that because the term is not used in the final 
rule, there is no need to define it in part 515.
Life-Cycle Cost
    Several commenters provided input on the proposed definition of 
``life-cycle cost'' as ``the cost of managing an asset class or asset 
sub-group for its whole life, from initial construction to the end of 
its service life.'' The GTMA supported the definition as proposed. The 
Northeast Pavement Preservation Partnership (NEPPP) and Tennessee DOT 
requested an explanation, definition, or example of ``end of service 
life.'' Maryland DOT also noted the undefined terms ``whole life'' and 
``service life,'' and suggested that ``design life'' is more 
appropriate for the definition of ``life-cycle cost'' because variables 
are based on the desired level of asset performance.
    In response, FHWA notes that ``whole life'' is a common term in 
asset management practice, and it means the entire life of an asset 
from inception (when it is placed into service) until its disposal. The 
FHWA realizes that definition of ``service life'' may differ from one 
State to another. Therefore, FHWA has replaced the term ``service 
life'' with ``replacement,'' so that ``life-cycle cost'' in section 
515.5 ``means the cost of managing an asset class or asset sub-group 
for its whole life, from initial construction to replacement.''
    With regard to the term ``design life,'' Maryland DOT described it 
as the time it will take for the structure to reach a minimum 
acceptable condition value. This generally applies to designing assets. 
However, there is no guarantee that assets live a normal life. There 
are environmental factors to consider that could terminate or shorten 
the life of assets prematurely or human interventions at appropriate 
stage of assets life that extend the asset life. The FHWA acknowledges 
that consideration of design life is important; however, FHWA continues 
to believe that the term ``whole life'' is more appropriate. As a 
result, no changes have been made to the definition as a result of this 
comment.
Life-Cycle Cost Analysis (LCCA)
    Four commenters provided input on the proposed definition of LCCA. 
The GTMA supported the proposed definition. CEMEX USA, PCA, and ACPA 
stated that the proposed definition of LCCA is a major departure from 
FHWA's previous definitions of LCCA, which they said have always 
focused on a ``project level analysis'' and the determination of the 
most cost-effective option among different competing alternatives at 
the project level. These commenters made the following statements and 
recommendations:
     The rule attempts to use the proposed LCCA exclusively for 
a network-level analysis, which is unprecedented. Defining LCCA to be 
exclusively a network-level analysis is contrary to the law, 
established standard and practices, and will create confusion for State 
DOTs that properly use traditional LCCA.
     Having a programmatic tool to allocate funds is a good 
idea, but there are already proven tools, such as Remaining Service 
Interval (RSI), that fill this role.
     The proposed network LCCA is not a substitute for 
traditional LCCA because it cannot provide the ``dollars and cents'' 
information that allows agencies to quantify the differential costs of 
alternative investment options for a given project.
     Both a network-level programmatic tool and a project-level 
LCCA are needed, but they are not interchangeable and they are not a 
substitute for each other.
     The FHWA should define LCCA to be consistent with previous 
definitions and prescribe the historic use of LCCA as a project level 
analysis and should use RSI to conduct the network level analysis.
    In response to comments relative to the use of RSI, FHWA notes that 
23 U.S.C. 119(e) does not require or suggest that States use RSI (which 
promotes the application of a specific process) for conducting the 
network-level analysis; however, 23 U.S.C. 119(e)(4)(D) requires a 
State asset management plan to include the process they use for life 
cycle planning. In responses to other comments, it appears that there 
may be some misunderstanding among those who are most familiar with 
LCCA at the project-level, but may not yet have applied LCCA at the 
network-level. Part 515 does not specifically exclude project-level 
LCCA, or prohibit States from applying LCCA to specific projects. Part 
515 simply extends the application of the LCCA beyond the project-level 
to the network-level in order to address the asset management 
requirements in 23 U.S.C. 119(e) by focusing on network-level analysis. 
FHWA agrees that both a network-level programmatic tool and a project-
level LCCA are needed, and that they are not interchangeable and one 
does not substitute for the other.
    The asset management plan's final product is a set of network-wide 
investment strategies to improve or preserve the condition of the 
assets and the performance of the NHS. These investment strategies 
should be integrated in the planning process to select projects. After 
projects are selected for implementation, designers conduct a project-
level LCAA to select the most appropriate design alternative. To ensure 
that there is no confusion between project-level and network-level 
LCCA, FHWA has replaced the term ``life-cycle cost analysis'' in this 
rule with the term ``life-cycle planning'' (LCP). The term ``life-cycle 
planning'' was chosen because this term is in alignment with section 
119(e)(4) and is intended to convey the same meaning as ``life-cycle 
cost analysis'' but at the network level. The LCP includes the three 
key elements (``planning,'' ``cost,'' and ``life-cycle'') that must be 
considered to manage assets through their whole life to achieve minimum 
practical cost.\16\
---------------------------------------------------------------------------

    \16\ For a discussion of network-level LCP, please see ``Highway 
Infrastructure Asset Management Guidance,'' UK Roads Liaison Group 
(May 2013), available online at: https://www.highwaysefficiency.org.uk/efficiency-resources/asset-management/highway-infrastructure-asset-management-guidance.html (as of March 
2016).

---------------------------------------------------------------------------

[[Page 73213]]

Long-Term and Short-Term
    Eleven commenters provided input on the use of the terms ``long-
term'' and/or ``short-term'' in the proposed rule. The terms appeared 
in NPRM section 515.007(b)(4), in connection with standards for bridge 
and pavement management systems. The AASHTO, NEPPP, several State DOTs, 
and the city of Wahpeton, ND, requested that FHWA define or clarify the 
terms ``long-term'' and/or ``short-term.'' \17\ Several State DOTs said 
these terms are unnecessary and might escalate the compliance burden on 
State DOTs. They recommended that if the terms are not removed, they 
need to be defined in a way that will respect State judgment and allow 
States flexibility in managing their networks, systems, and 
programs.\18\ Commenting jointly, five State DOTs urged FHWA to delete 
all references to ``long term'' from the rule, or at least allow a 
State to limit the time frame to as short as the time horizon for the 
State's STIP.\19\ The AASHTO recommended that the rule allow each State 
to determine the length of the term ``long-term.'' The AASHTO added 
that if FHWA clarifies the meaning other than by deferring to States, 
then the term should not be longer than what AASHTO recommended for the 
required duration of the asset management and financial plans. In 
contrast, New Jersey DOT recommended that a range be defined. For 
example, a long-range program could be one that is for a period greater 
than 14 years. In this context, a medium-range goal could be defined as 
6-14 years, and short-range goals could be for 5 years or less.
---------------------------------------------------------------------------

    \17\ AASHTO, NEPPP, The City of Wahpeton, ND; Connecticut DOT; 
Oklahoma DOT; New Jersey DOT; Hawaii DOT; Maryland DOT.
    \18\ DOTs of ID, MT, ND, SD, and WY (joint submission); South 
Dakota DOT; Wyoming DOT.
    \19\ DOTs of ID, MT, ND, SD, and WY (joint submission).
---------------------------------------------------------------------------

    After considering the comments, FHWA decided not to define the 
terms ``long-term'' or ``short-term'' in part 515. The FHWA believes 
that ``short-term'' and ``long-term'' are relative terms and should not 
be defined by referencing arbitrary numbers. However, the terms can be 
understood through their impact on the health of assets as they age. A 
significant portion of any highway infrastructure investment is 
comprised of assets with a long life span, such as bridges and 
pavements. The lives of pavements and bridges vary depending on type, 
location, and other factors; nonetheless, their life span is long 
enough to require taking a strategic approach for their management. 
Planning, forecasting conditions, and making assumptions, are necessary 
to develop strategies for long-lasting assets. Short-term approaches 
are normally based on approaches that may sound reasonable at the 
present time, but may not consider future needs or may not be the most 
cost effective treatment in the long term. Consequences associated with 
these future needs, including lack of a management plan as assets age 
or retire, have proven to be costly and reduce agencies' resources 
rapidly. The asset management plan is long-term, meaning that it 
includes strategic approaches that take aging assets and future needs 
into consideration. Part 515 requires that State DOTs develop a plan 
that, at a minimum, includes 10 years of information. This means that 
if bridge assets normally last for 70-100 years, only information 
covering the next immediate 10 year period is required to be included 
in the plan.
Maintenance Activities
    A private citizen requested a definition for ``maintenance 
activities.''
    In response, FHWA has not added a definition of this term in part 
515 because the term is included in the definition of ``work type'' in 
this rule. The FHWA position with regards to the definition of various 
work type actions is discussed under ``Work Type'' in this section.
Minimum Practicable Cost
    Six submissions commented on the use of the phrase ``minimum 
practicable cost'' in the proposed rule. The phrase appeared in NPRM 
section 515.005 (definitions of asset management, asset management 
plan, and investment strategy), section 515.007 (introductory language 
for process requirements), and section 515.009(d)(1) (content 
requirements pertaining to asset management objectives). The AASHTO and 
Connecticut DOT said a definition should be added to establish that any 
purported requirement that an asset management plan achieve its 
objectives at a ``minimum practicable cost'' over the life of an asset 
is not referring to a hypothetical absolute minimum cost. Instead, as 
referenced in the proposed definition of life-cycle cost analysis, 
these commenters felt that it should be clearly understood as referring 
to the State's having undertaken asset management ``with consideration 
for minimizing cost.''
    A joint submission from five State DOTs, and an identical 
submission from Wyoming DOT, said there would always be an argument 
that a cost could be reduced, making the ``minimum practicable cost'' 
requirement a subjective judgment by FHWA and a potentially significant 
burden for States. South Dakota DOT said this ``vague'' term is 
unnecessary and, if not dropped entirely, it should be defined in a way 
that will respect State judgment and allow State flexibility in 
managing a State's networks, systems, and programs. The city of 
Wahpeton stated that use of the term ``minimum practicable cost'' seems 
to encourage a ``worst-first'' method of programming projects. The 
commenter stated that the benefit of the project also needs to be 
considered.
    In response to these comments, FHWA notes that the definition of 
``asset management'' in 23 U.S.C. 101 includes the term ``minimum 
practicable cost.'' For this reason, FHWA has retained the use of the 
term in the final rule. The FHWA notes that this term does not 
encourage the ``worst-first'' strategy. The FHWA added a definition of 
``minimum practicable cost'' in section 515.5, defining it as ``lowest 
feasible cost to achieve the objective.'' The new definition makes it 
clear that the lowest cost action may not be a feasible action if it 
does not help States to achieve their objectives.
NHS Pavements and Bridges and NHS Pavement and Bridge Assets
    The FHWA received comments asking for clarification of the scope of 
the terms ``NHS pavements and bridges'' and ``NHS pavement and bridge 
assets.'' These terms appear in a number of places in the proposed and 
final rule, and serve to define the assets to which the mandatory 
provisions of the asset management rule apply. The AASHTO and several 
State DOTs recommended the asset management rule adopt the same meaning 
as is given in FHWA's second performance measure rulemaking. Washington 
State DOT asked for clarification whether the term includes ramps that 
enter or exit the NHS.
    In response to these comments, and to provide greater clarity in 
the final rule, FHWA added a definition in section 515.5 of the final 
rule. The definition is consistent with the definition used in the 
second performance measure rulemaking. The two terms are now defined as 
the ``Interstate System pavements (inclusion of ramps that are not part 
of the roadway normally travelled by through traffic is optional); NHS 
pavements (excluding the Interstate System) (inclusion of ramps that 
are not part of the roadway normally travelled by through traffic is 
optional); and NHS bridges carrying the NHS (including bridges that are 
part of the ramps connecting to the NHS).''

[[Page 73214]]

Other Public Roads
    Washington State DOT requested a definition for ``other public 
roads.''
    The FHWA notes that the term ``public road'' is defined in 23 
U.S.C. 101 as ``any road or street under the jurisdiction of and 
maintained by a public authority and open to public travel.'' The FHWA 
does not believe it is necessary to add a definition for ``other public 
roads'' to part 515. Based on the statutory definition above, the term 
``other public roads'' as used in part 515 refers to any road or 
street, other than those on the NHS, under the jurisdiction of and 
maintained by a public authority and open to public travel.
Pavement Preservation
    A private citizen requested a definition for ``pavement 
preservation''. The Federation for Pavement Preservation (FP2) also 
requested a definition for ``pavement preservation.''
    In response, the term ``preservation'' is included in the final 
rule as a work type action. The FHWA position with regards to the 
definition of various work type actions is discussed under ``Work 
Type'' in this section. The FHWA has not added a definition of this 
term in part 515.
Performance
    Oregon DOT requested a definition for ``performance.''
    The FHWA does not believe there is a benefit to adding a definition 
of ``performance'' to part 515. A detailed discussion about the 
connections among system performance, performance measures and targets, 
and asset management appears in Section V of this preamble.
Performance Gap
    Seven commenters provided input on the proposed definition of 
``performance gap.'' The GTMA supported the proposed definition. New 
Jersey DOT requested that ``desired performance'' be changed to 
``target performance.'' The AASHTO and the DOTs of Connecticut, 
Washington State, and Oregon recommended that FHWA include language in 
the definition to indicate that reducing the performance gap can also 
be achieved through other means, such as operations. Oklahoma DOT said 
the multiple meanings for the term ``performance gap'' are confusing, 
and it provided a suggested definition for ``condition gap'' as ``the 
gap between the current condition of an asset, asset class, or asset 
sub-group, and the targets the State DOT establishes for condition of 
the asset, asset class, or asset sub-group.'' This commenter suggested 
defining ``performance gap'' as ``the gap between the current 
performance and desired performance of the NHS that can only be 
achieved through improving the physical assets.''
    In response, FHWA notes that the ``performance targets'' are 
addressed in the three FHWA performance measure rulemakings and are not 
directly addressed through asset management performance gap 
analysis.\20\ The FHWA agrees that there may be several alternative 
ways to reduce performance gaps. After considering the comments, and 
particularly the suggestion for simplification, FHWA revised the 
definition of performance gap in the final rule to read as ``the gaps 
between the current asset condition and State DOT targets for asset 
condition, and the gaps in system performance effectiveness that are 
best addressed by improving the physical assets.''
---------------------------------------------------------------------------

    \20\ See ``National Performance Management Measures; Highway 
Safety Improvement Program'' (RIN 2125-AF49); ``National Performance 
Management Measures; Assessing Pavement Condition for the National 
Highway Performance Program and Bridge Condition for the National 
Highway Performance Program'' (RIN 2125-AF53); and ``National 
Performance Management Measures; Assessing Performance of the 
National Highway System, Freight Movement on the Interstate System, 
and Congestion Mitigation and Air Quality Improvement Program'' (RIN 
2125-AF54).
---------------------------------------------------------------------------

Performance of the NHS
    Six commenters provided input on the proposed definition of 
``performance of the NHS.'' The GTMA supported the definition as 
proposed. New York State Association of Metropolitan Planning 
Organizations (NYSAMPO), Delaware DOT, Oregon DOT, and Tennessee DOT 
requested clarification on the intended meaning of ``effectiveness of 
the NHS,'' which is used in the proposed definition. Alaska DOT said 
the definition is too confusing and that NHS performance should be tied 
to the performance measures.
    In response, FHWA notes that 23 U.S.C. 119 (e)(1) requires States 
to develop asset management plans to improve or preserve the condition 
of assets and the performance of the system. The FHWA clarifies that 
the term ``effectiveness of the NHS'' ties to the system performance, 
which is discussed in more detail in Section V, System Performance, 
Performance Measures and Targets, and Asset Management Plans. 
Effectiveness of the NHS refers to the cases in which the NHS is not 
performing as it was intended to. For example, if an Interstate highway 
in a metropolitan area is consistently congested, then it loses its 
effectiveness in facilitating timely delivery of people and goods. 
Therefore, adding an additional lane and bridge widening may become 
necessary to increase mobility. After considering the comments, FHWA 
decided to retain the proposed definition in the final rule.
Risk Management
    Two commenters provided feedback on the proposed definition of 
``risk management.'' The GTMA supported the definition as proposed. New 
York State DOT said that the rule does not adequately explain or define 
``risk management,'' leaving the States to decide what this is and how 
it relates to asset management. The commenter said risk should be a 
part of an asset management program, but this concept needs to be 
explicitly defined and described by the final rule.
    After considering these comments, FHWA decided the definition of 
``risk management'' should remain as proposed. In the discussion of 
NPRM Sec.  515.007(a)(3), this final rule provides a detailed 
discussion on the use of risk management in the development of an asset 
management plan.
Target
    Minnesota DOT requested a definition for ``target.''
    The FHWA does not believe it is necessary to define the word in 
part 515. ``Target'' is defined in 23 CFR 490.101 as ``a quantifiable 
level of performance or condition, expressed as a value for the 
measure, to be achieved within a specified time period required by the 
Federal Highway Administration.'' The FHWA believes that this 
definition is appropriate in the context of part 515. For NHS pavement 
and bridge targets required by 23 U.S.C. 150(d), the definition in 
Sec.  490.101 is directly applicable. With respect to other targets 
State DOTs may include in their asset management plans, the same 
definition would apply except for the phrase ``required by the Federal 
Highway Administration.''
Work Type
    Three commenters provided input on the proposed definition of 
``work type,'' which is relevant to LCP and the development of a 
financial plan. The GTMA supported the definition as proposed. 
Tennessee DOT said FHWA should define each classification under the 
proposed definition of ``work type'' (maintenance, preservation, 
repair, rehabilitation, reconstruction, and upgrades). Oregon DOT said 
there are no universally agreed-upon meanings for several words used to 
define the activities undertaken to maintain or improve the condition 
and performance

[[Page 73215]]

of transportation assets. Oregon DOT suggested that FHWA should request 
that each State DOT provide a definition for terms used to describe 
asset management activities and budgetary expenditures.
    In response, FHWA decided not to provide definitions for the 
individual activities that fall under ``work type,'' recognizing that 
there are differences among State DOTs in how they categorize, define, 
or differentiate one work type activity from another. The FHWA believes 
that State DOTs should define and explain in their asset management 
plans how they categorize and define their work type activities. To 
reduce the burden on the State DOTs, and to emphasize the network-level 
character of the asset management plan, FHWA has simplified the 
definition of ``work type'' in section 515.5 by limiting the types to 
five major categories: Initial construction, maintenance, preservation, 
rehabilitation, and reconstruction.
NPRM Section 515.007 (Final Rule Section 515.7)
    Section 515.007 of the NPRM described the processes that State DOTs 
would be required to use in developing their asset management plans. 
These processes are intended to align with the minimum content elements 
23 U.S.C. 119 requires in the asset management plan. The FHWA made a 
number of changes to section 515.7 in the final rule, including 
rewording, reorganizing, and renumbering its provisions. Table 1, shows 
the changes to the section numbering that occurred in the final rule.
    The FHWA received several general comments on NPRM section 515.007. 
Oregon DOT said the proposed rule should establish general requirements 
limited to developing a program that meets State needs and allows 
States to demonstrate the success of their own systems to meet general 
performance criteria, instead of mandating specific requirements, such 
as performance gap analysis, life-cycle cost analysis, investment 
strategies, and developing STIP programs to support performance goals. 
Similarly, New Jersey DOT said that FHWA should focus on whether the 
State has an adequate plan with the proper elements, rather than 
requiring States to define processes for each element of the plan.
    In response, FHWA notes that 23 U.S.C. 119(e)(4) requires a State 
asset management plan, at a minimum, to be in a form that the Secretary 
determines to be appropriate and include the following: A summary 
listing of the pavement and bridge assets on the NHS in the State, 
including a description of the condition of those assets; asset 
management objectives and measures; performance gap identification; 
life-cycle cost and risk management analysis; a financial plan; and 
investment strategies. The Secretary is required to establish in 
regulation the process to develop the State asset management plan 
described in 23 U.S.C. 119(e)(1). Moreover, 23 U.S.C. 119(e)(6)(A)(i) 
and (ii) require the Secretary review and certify the process used by 
the State to develop its Asset Management Plan. Because of the 
statutory basis of these requirements, FHWA has not revised this 
section in response to these comments.
    New Jersey DOT supported FHWA's goal to promote asset management as 
a practice across State DOTs, but said FHWA should provide flexibility 
that encourages States to adopt asset management practices. The 
commenter said FHWA should reduce the focus on process development and 
process documentation and put more focus more on whether the State has 
an adequate plan. Similarly, Florida DOT said the rule should allow for 
sufficient flexibility in how State DOTs use decisionmaking 
``processes'' and tools.
    In response to these comments, FHWA notes that the process 
development and process documentation provisions in the rule are 
designed to implement the requirements in 23 U.S.C. 119(e)(8). The 
final rule provides flexibility to the State DOTs by recognizing the 
differences among State DOTs and allowing them to develop their own 
individual processes. However, State DOTs are required to address the 
minimum requirements included in Sec.  515.7 to ensure the integrity of 
their asset management plans.
    A comment received from AASHTO suggested that the NPRM proposal was 
insufficiently clear about what, if any, difference there is between 
Sec.  515.007 and Sec.  515.009. This comment suggested that AASHTO, 
and perhaps others, viewed the provisions as establishing duplicative 
asset management process requirements. In response, FHWA revised the 
final rule language in Sec.  515.7 to emphasize that Sec.  515.7 
defines the analytical processes State DOTs must develop and use to 
prepare their asset management plans. Section 515.9 defines the minimum 
required form and content for the plans that State DOTs will produce 
using the processes described in Sec.  515.7. The FHWA revised the 
second sentence of Sec.  515.7(a) of the final rule to explicitly refer 
to ``the State DOT's process.'' The FHWA made similar clarifications in 
final rule Sec. Sec.  515.7(b), 515.7(d), and 515.7(e). These changes 
underscore the purpose of Sec.  515.7, which is to prescribe processes 
necessary to asset management plan development, as mandated by 23 
U.S.C. 119(e)(8).
    Hawaii DOT said some requirements for content to be included in the 
asset management plan are found in other NPRMs and thus seem to be 
missing. For example, the agency said that there is no discussion of 
data that supports the asset management plan and no discussion of when 
targets will be established.
    In response, FHWA notes the State DOTs must use bridge and pavement 
management systems and their most current data for their asset 
management plans, as provided in Sec.  515.7(g) of the final rule. 
Target-setting requirements for NHS pavements and bridges will be 
established as part of the second performance measure rulemaking. Part 
515 does not include any provisions governing target-setting. With 
respect to other assets State DOTs may elect to include in their plans, 
FHWA expects State DOTs to use their best available condition data and 
set targets as they deem appropriate.
    Oklahoma DOT said the term ``highway network system'' in NPRM Sec.  
515.007(a) should be clarified to address the NHS only, as specified in 
title 23.
    In the final rule, FHWA has replaced the term ``highway network 
system'' in the first sentence in Sec.  515.7 with ``NHS.''
NPRM Section 515.007(a)(1) (Final Rule Section 515.7(a))
    Eighteen commenters addressed NPRM Sec.  515.007(a)(1), which 
proposed requirements for the State DOT process for conducting 
performance gap analyses, and for identifying strategies to close gaps.
    The GTMA supported the provision as proposed, but added that it is 
difficult to understand why a State would voluntarily include roads 
beyond the NHS in its plan if the State would be required to submit a 
gap analysis for those roads as proposed in Sec.  515.007(a)(1)(i). 
Tennessee DOT asked how the process for conducting a gap analysis 
proposed in Sec.  515.007(a)(1)(i) would be affected if a State chooses 
to include other public roads or assets in the asset management plan 
beyond the minimum required NHS pavements and bridges. Similarly, 
Alaska DOT requested FHWA amend proposed Sec.  515.007(a)(1)(i) to 
delete the requirement that a State DOT include desired performance 
targets in the gap analysis for any other public roads that

[[Page 73216]]

it opts to include in its asset management plan.
    In response, FHWA believes that performing gap analysis is a key 
step in developing an asset management plan, regardless of network type 
(i.e., NHS or non-NHS). However, after considering the comments, FHWA 
agrees that it may be more effective overall to reduce the requirements 
applicable to voluntarily included assets. The FHWA has added Sec.  
515.9(l) to the final rule, which revises the requirements applicable 
if a State DOT elects to include other public roads or other assets in 
an asset management plan (i.e., other than NHS pavements and bridges). 
The FHWA made the following conforming changes to other parts of the 
final rule.
     FHWA removed the language that was in NPRM Sec.  
515.007(a)(1)(i). Thus, final rule Sec.  515.7(a)(1) no longer includes 
the sentence describing requirements for such voluntarily included non-
NHS assets.
     The FHWA removed language in NPRM Sec.  
515.007(a)(1)(iii), which discussed gap identification between existing 
conditions and voluntarily included State DOT targets.
     The FHWA also eliminated the proposed language in NPRM 
Sec.  515.007(a)(3)(vi) relating to other assets included in the asset 
management plan at the State DOT's option. This topic also is addressed 
in this final rule's discussion of comments on NPRM Sec.  515.009(a), 
concerning asset management plan requirements for non-NHS assets 
voluntarily included in a State asset management plan.
    Numerous commenters referenced the phrase in NPRM section 
515.007(a)(1) that stated the purpose of the gap analysis is ``to 
identify deficiencies hindering progress toward improving and 
preserving the NHS and achieving and sustaining the desired state of 
good repair.'' The AASHTO and Minnesota and Oregon DOTs requested FHWA 
revise this phrase to specifically recognize the acceptability of 
strategies calling for a decline in the condition and performance of 
NHS and other transportation assets. Mississippi DOT recommended the 
asset management rule acknowledge and be consistent with terminology 
used in the performance management rule; Mississippi also noted that, 
based on funding restraints, the target asset condition may improve, 
stay constant, or decline. New York State DOT said the final rule 
should include specific language stating that, even with the 
implementation of asset management plans and programs, the condition of 
the physical assets may be declining. The commenter described this 
suggestion as consistent with the second performance measure 
rulemaking. Maryland DOT suggested the following definition for ``state 
of good repair: ``The benchmark used by a State to set the minimum 
threshold for the desired condition of existing transportation 
facilities and systems.''
    In considering these comments, FHWA looked to 23 U.S.C. 119(e)(1), 
which requires States to develop risk-based asset management plans for 
the NHS to improve or preserve the condition of the assets. The FHWA 
recognizes that, due to the fiscal constraints and the need for trade-
offs across assets, conditions of an asset may improve, stay constant, 
or decline. If, after undertaking asset management strategies, an asset 
condition continues to decline, but at a slower rate than prior to the 
implementation of those strategies, FHWA would consider this as an 
improvement even though the condition of the asset is still declining. 
However, the State DOT should explain in its asset management plan how 
these improvements or declines affect or impact their long-term goals 
of achieving and sustaining a state of good repair.
    After considering these comments, FHWA revised the NPRM's phrase 
``improve and preserve'' to read ``improve or preserve'' in the final 
rule. This aligns with the statutory language and better reflects the 
variability in possible actions by a State DOT. The FHWA has not 
otherwise revised the language in question. As discussed in the 
section-by-section discussion of NPRM Sec.  515.005 (Desired State of 
Good Repair), FHWA has not defined ``state of good repair'' in the 
final rule.
    New Jersey DOT said FHWA should prescribe what a gap analysis 
should entail and address, but State agencies should not have to 
develop a gap analysis process for FHWA approval.
    In response, FHWA notes that 23 U.S.C. 119(e)(4)(C) requires a 
State asset management plan to include performance gap identification, 
and 23 U.S.C. 119(e)(6)(A)(i) and (ii) require the Secretary review and 
certify the process. The FHWA must do the process certification, but 
does not approve the results of an analysis performed with the process. 
Because of the statutory basis of these requirements, FHWA has not 
revised the final rule in response to the New Jersey DOT comments.
    The AASHTO, Connecticut DOT, and New York State DOT said FHWA 
should clarify that nothing in the rule would prohibit a State from 
undertaking gap analyses beyond those required by the rule, such as a 
gap analysis between current condition and a concept other than the 
State's target.
    In response, FHWA notes that State DOTs must meet the minimum 
requirements for performance gap analysis as outlined in section 
515.7(a) of the final rule. However, States may go beyond the minimum 
requirements established in this rule in order to address their own 
unique needs.
    North Carolina DOT said the requirements for gap analysis are not 
clearly defined in the NPRM and that State DOTs need more specific 
guidance to determine whether they can conduct this type of analysis.
    In response, FHWA clarifies that gap analysis covers two areas: (1) 
A comparison of current condition with State DOT targets for NHS 
pavement and bridge asset condition; and (2) identification of changes 
in NHS pavement and bridge physical assets needed to support system 
performance. This information mainly can be gathered by reviewing other 
State plans. Examples of such plans include the HSIP, SHSP, and the 
State Freight Plan (if the State has one). For example, if one of these 
plans requires upgrading part of the NHS by adding truck lanes, then 
this must be incorporated into the gap analysis, and eventually the 
financial plan, because the new truck lanes would be added to the 
pavement inventory and should be maintained and preserved accordingly.
    The FHWA revised the rule in response to these comments to clarify 
that the required gap analysis under Sec.  515.7(a) relates to NHS 
pavements and bridges, and that the gap analysis for performance of the 
NHS under paragraph (2) of that section must include gaps that affect 
NHS pavements and bridges even though the gaps are not based on the 
physical condition of those assets. These requirements, and the reasons 
for them, are discussed in detail in Section V, System Performance, 
Performance Measures and Targets, and Asset Management Plans. The FHWA 
does not believe additional guidance for gap analysis is required at 
this time.
    Hawaii DOT recommended that FHWA use the term ``factors'' instead 
of ``deficiencies'' in proposed Sec.  515.007(a)(1).
    In response, FHWA does not believe that the term ``factors'' 
conveys the same meaning as ``deficiencies'' and has therefore retained 
``deficiencies'' in Sec.  515.7(a) of the final rule.
    Section 515.007(a)(1)(ii) of the NPRM stated that a State's process 
for preparing a gap analysis must address the ``gaps, if any, in the 
effectiveness of the NHS in providing for the safe and

[[Page 73217]]

efficient movement of people and goods where it can be affected by 
physical assets.'' The AASHTO and several State DOTs recommended 
deleting this requirement because it might require an analysis of gaps 
that are not fiscally constrained. These commenters stated that a 
State's performance targets should be the only benchmarks for gap or 
other analysis.\21\ South Dakota DOT recommended that gap analysis 
address the difference between State targets and the existing or future 
asset condition determined by reasonable management strategies and 
available funding and reasonable funding forecasts.
---------------------------------------------------------------------------

    \21\ AASHTO; Alaska DOT; Connecticut DOT; DOTs of ID, MT, ND, 
SD, and WY (joint submission); Florida DOT; South Dakota DOT.
---------------------------------------------------------------------------

    In response to these comments, FHWA notes funding availability is 
relevant to investment strategies, but should not restrict State DOTs 
from identifying performance gaps. For example, if a State DOT is 
concerned about poor drainage on the Interstate and wishes to upgrade 
the drainage throughout the system, then the State DOT must identify it 
as a gap and include it in its performance gap analysis, regardless of 
funding availability. This information will provide decisionmakers with 
a better understanding of transportation needs. The FHWA also notes 
that when other State transportation plans identify strategies that may 
require an addition to physical assets or altering the existing 
physical assets to address gaps in the NHS effectiveness, then those 
strategies must be included in the asset management performance gap 
analyses. Section V, System Performance, Performance Measures and 
Targets, and Asset Management Plans, provides a detailed discussion of 
the connections among system performance, performance measures and 
targets, and asset management.
    Delaware DOT and NYSAMPO asked FHWA to define or clarify the 
intended meaning of the term ``effectiveness of the NHS,'' which was 
used in proposed Sec.  517.007(a)(1)(ii).
    In response, FHWA clarifies that effectiveness refers to the 
capability of producing a desired result. For example, if a portion of 
the NHS is subject to excessive flooding during the spring with an 
adverse impact on the movements of people and goods, then the 
effectiveness of this portion of NHS comes into question and must be 
addressed. In Sec.  515.7(a)(2) of the final rule, FHWA changed the 
phrase ``effectiveness of the NHS in providing for the safe and 
efficient movement of people and goods where it can be effected by 
physical assets'' to ``performance of the NHS.'' The definition of 
``performance of the NHS'' appears in Sec.  515.5, and remains as 
proposed in the NPRM. The use of ``performance of the NHS'' in this 
rule will provide greater clarity to State DOTs.
    With regard to NPRM Sec.  515.007(a)(1)(ii), Mississippi DOT stated 
that, except for the State's established performance targets for 
pavements and bridges, all of the other targets that would be required 
under Sec.  515.007 are not yet defined. The agency asked how a State 
could conduct an objective gap analysis without clear definitions of 
the targets. The AASHTO and Connecticut DOT said proposed Sec.  
515.007(a)(1)(ii) is ``expansive'' in that it would require asset 
management plans to address freight and system performance targets that 
are currently undefined, which might require investments to assets 
other than highways and bridges to meet their target levels (e.g., 
travel demand management and transit investments could be used to 
address highway reliability issues). These commenters asserted that the 
relationships between the system performance measures and program 
improvements are not well-established. They further argued that the 
provision would put greater pressure on State DOTs to include other 
assets (e.g., signage and safety assets) for which robust inventory and 
condition assessment methods may not currently exist.
    In response, FHWA notes that the term ``performance targets'' was 
not used in proposed Sec.  515.007(a)(1)(ii), but was used in proposed 
Sec.  515.007(a)(1)(i) and (iii), as well as in proposed Sec.  
515.007(a)(2)(iv). The term was intended as a general reference to 
performance targets for asset condition. To avoid confusion, this term 
is replaced with ``State DOT targets for asset condition for NHS 
pavements and bridges'' in the final rule in Sec. Sec.  515.7(a)(1) and 
515.7(b)(4). State DOTs are not required to address 23 U.S.C. 150(d) 
freight and system performance targets, which are part of FHWA's third 
performance measure rulemaking, in their asset management plans.
    However, delivering on any transportation system performance goal 
will require effective management of the physical assets needed to 
deliver that performance. There are times when the reason for 
undertaking bridge or pavement work is to address system performance 
and not to improve condition. For example, a State DOT could decide to 
retrofit its bridges to reduce the potential impacts of seismic 
activity. This action directly ties to performance in the general areas 
of mobility and safety. Because the action affects NHS pavements and 
bridges, it must be included in the State DOT's gap analysis under 
Sec.  515.7(a)(2) of the final rule. For a further discussion of this 
issue, see Section V, System Performance, Performance Measures and 
Targets, and Asset Management Plans.
NPRM Sec.  515.007(a)(2) (Final Rule 515.7(b))
    Section 515.007(a)(2) of the NPRM proposed requirements for each 
State DOT to establish a process for conducting LCCA for asset classes 
or asset sub-groups at the network level. Oregon DOT said that LCCA is 
a useful tool for comparing alternative solutions at the project level, 
but it has not been effectively demonstrated how the analysis could be 
applied to treatment options for asset classes at a program level. The 
agency said that the rule should be changed to include processes that 
have been shown to be effective for the purpose intended. Based on the 
assertion that network-level LCCA is not well understood by States, 
Applied Pavement Technology, Inc., suggested this analysis be referred 
to instead as a ``whole-life cost analysis.''
    The PCA, ACPA, and CEMEX USA asserted that the network-level 
analysis called for in the proposed rule is not LCCA, but is actually a 
programmatic process similar to what is called Remaining Service 
Interval (RSI). The commenters added that although network-level LCCA 
(or RSI) has many virtues as a network or system-level analysis, it is 
not a substitute for traditional LCCA, because it cannot provide the 
``dollars and cents'' information that allows agencies to quantify the 
differential costs of alternative investment options for a given 
project. The commenters recommended that FHWA define LCCA to be 
consistent with previous definitions and prescribe the historic use of 
LCCA as a project-level analysis. They also recommended that the 
proposed rule use RSI to conduct the network-level analysis.
    The topics raised in these comments are addressed in the section-
by-section discussion of NPRM Sec.  515.005 (Life-cycle Cost Analysis). 
As discussed there, the comments led FHWA to change the term ``life-
cycle cost analysis'' to ``life-cycle planning'' throughout the final 
rule. The FHWA plans to provide guidance to State DOTs on life-cycle 
planning.

[[Page 73218]]

    New Jersey DOT said States should not have to obtain FHWA's 
approval of its process for conducting LCCA. Rather, the commenter said 
that a State should perform an LCCA and provide that to FHWA.
    In response, FHWA notes that 23 U.S.C. 119 (e)(6)(A)(i)(I) requires 
FHWA to certify whether a State DOT's processes comply with applicable 
requirements.
    Mississippi and Oregon DOTs said the rule's network-level approach 
to asset life-cycle analysis contradicts the second performance measure 
rulemaking, and recommended that the proposed rule for the asset 
management plan and the performance measure rule should be consistent.
    The FHWA does not believe that there is inconsistency between the 
two rules. In fact, a network-level approach to asset LCP is the key to 
setting reasonable and achievable targets.
    Pennsylvania DOT asked if the intention is to ``compare one project 
vs. another, one type treatment vs. another or a bridge project vs. a 
pavement project.'' Oregon DOT said that FHWA should provide one 
example of a process for conducting LCCA for groups of assets as a 
starting point for States. California DOT asked FHWA to clarify in the 
final rule if the intent is for State DOTs to conduct a programmatic 
benefit-cost analysis of feasible actions over the life of the asset.
    The FHWA clarifies that network-level LCCA, referred to as life-
cycle planning in the final rule, consists of an approach to 
maintaining an asset during its whole life (i.e., from construction to 
disposal). Section 515.7 requires State DOTs to consider, at a minimum, 
strategies that are included in part 515 under ``work type'' when 
conducting LCP. The intention is not to ``compare one project vs. 
another, one type treatment vs. another or a bridge project vs. a 
pavement project.'' For example, if a network consists of 1,500 miles 
of pavements, the agency should perform an analysis to decide how to 
manage its pavements most effectively over the long term. Most agencies 
use a combination of preservation, rehabilitation, and reconstruction 
activities. However, the percentage of funding allocated to each 
activity varies from State to State and depends on several factors, 
including available funding. This information is used for financial 
planning and programming and for developing investment strategies. The 
FHWA retains the proposed language in the final rule. The topic of LCP 
is discussed further under the section-by-section discussion of NPRM 
section 515.005 (Life-cycle Cost Analysis).
    North Carolina DOT said that the requirements for LCCA are not 
clearly defined in the NPRM and that State DOTs need additional 
guidance (e.g., checklists) to determine whether they can provide this 
type of analysis. Tennessee DOT asserted that the procedure for 
project-level LCCA is widely accepted, but there has been little or no 
guidance on how to conduct network-level LCCA. Specifically, the agency 
asked how States would establish an expected life of each asset.
    The FHWA responds that not all State DOTs manage their assets the 
same way throughout the lifespans of those assets. Therefore, 
checklists should only be developed by States based on the processes 
they employ to manage their respective assets. States should establish 
their own methodology to establish the expected life for each asset. 
Historical data may be used to achieve that.
    Washington State DOT supported the concepts in proposed section 
515.007(a)(2). It encouraged FHWA to view a ``network'' as including 
multiple types of categorization (e.g., expressing the average life-
cycle cost of a network, sub-network, corridor, route, county, urban 
area, region, etc.). The agency said this type of economic performance 
measure provides important information regarding how effectively 
different parts of the network are being managed.
    The FHWA acknowledges such practice could be useful. However, FHWA 
does not believe the rule should require the type of multilevel LCP 
analysis described in the comment. For this reason, the final rule 
retains the proposed language requiring an LCP process for network-
level analysis, and FHWA leaves the definition of ``network'' to the 
State DOTs, as proposed in the NPRM.
    Mississippi DOT referenced the discussion of proposed Sec.  
515.007(a)(2) in the preamble of the NPRM (80 FR 9231, 9233). This 
commenter said that the discussion regarding a ``strategic treatment 
plan'' appears to drill down to the project level, but elsewhere in the 
proposed rule, it is stated that the asset management plan would to be 
used for network-level analysis. It further commented that if the 
strategic treatment plan must consider specific treatment types, it 
leads the States toward a project-level approach, which is beyond the 
intended scope of the proposed rule.
    The FHWA acknowledges these comments and emphasizes that the asset 
management plan is used for network-level analysis. The intent is not 
to drill down to the project level. A ``strategic treatment plan'' 
would address how assets are managed during their whole-life at the 
network level. The FHWA has revised the definition of ``work types'' to 
better align it with this network-level approach and reduce the burden 
on States. In addition, FHWA has removed the phrase ``including the 
treatment options for the work types'' from Sec.  515.7(b)(3) of the 
final rule to clarify that the focus is not on project-level 
activities.
    Section 515.007(a)(2) of the NPRM would allow a State DOT to 
propose excluding one or more asset sub-groups from its LCP under 
certain conditions. The PCA, ACPA, and CEMEX USA expressed concern that 
some States that have a small amount of concrete assets will exclude 
concrete pavement solutions. The commenters also asserted that this 
provision contradicts the requirements of 23 U.S.C. 119(e)(3), which 
directs the Secretary to encourage States to include all infrastructure 
assets within the right-of-way corridor in their asset management 
plans. Alaska DOT requested that FHWA eliminate the option to exclude 
asset sub-groups from the LCCA, but it did not provide a rationale for 
doing so. Hawaii DOT recommended using the term ``justifiable reasons'' 
instead of ``supportable grounds'' in the proposed rule language 
regarding this option to exclude asset sub-groups.
    The FHWA clarifies that this provision is intended to reduce the 
compliance burden on States by giving them the flexibility to exclude 
asset sub-groups from network-level analysis if certain condition are 
met. The FHWA does not believe that there is a contradiction between 
proposed Sec.  515.007(a)(2) and 23 U.S.C. 119(e)(3). The language of 
Sec.  515.007(a)(2) does not encourage State DOTs to exclude any asset 
sub-groups or discourage them from including particular asset sub-
groups in their asset management plans. In response to the comments, 
FHWA clarified the language describing the conditions under which a 
State DOT might exclude one or more asset sub-groups. In Sec.  515.7(b) 
of the final rule, FHWA changed ``the cost impacts associated with 
managing the assets in the sub-group'' to read ``the low level of cost 
associated with managing the assets in that asset sub-group.'' The FHWA 
also changed ``supportable grounds'' to ``justifiable reasons.'' As 
discussed in the section-by-section discussion of NPRM Sec.  515.005 
(``Asset''), FHWA made revisions in the final rule with respect to 
definitions and terminology relating to assets, asset class, asset 
group, and asset sub-group. In conjunction with those changes, FHWA 
deleted from

[[Page 73219]]

Sec.  515.7(b) of the final rule the parentheticals concerning groups 
of assets, and changed the remaining references from ``sub-group'' to 
``asset sub-group.''
    Section 515.007(a)(2) of the NPRM included a requirement that a 
State DOT's life-cycle cost analysis process must include information 
on current and future environmental conditions. The GTMA said that it 
seems premature to require States to address the potential impacts of 
environmental conditions such as extreme weather, climate change, and 
seismic activity while FHWA is working to develop a better 
understanding of these potential impacts. Similarly, Applied Pavement 
Technology, Inc., said that it would be difficult enough for States to 
conduct a network-level life-cycle analysis, so it recommended that 
FHWA remove requirements for States to consider changes in demand and 
extreme weather events. Alaska DOT also requested removal of the rule 
language regarding consideration of changes in demand and environmental 
conditions. Colorado DOT requested that FHWA clarify the intent of this 
provision, and also asked if other DOTs are structured and staffed to 
meet this proposed requirement.
    In response, FHWA believes it is important for the LCP process to 
have the capability to include changes in demand and environmental 
condition. The provision is essential to addressing system performance 
as required by MAP-21. As included in the AASHTO ``Asset Management 
Guide--A Focus on Implementation,'' an understanding of growth and 
future demand trends, and their impact on level-of-service, are 
important to making informed decisions on how to address future 
deficiencies and shortfalls of service. Similarly, an evaluation of 
future environmental conditions is important in order to address 
possible deficiencies or failures. This may require capital investment 
in new works involving newly created or expanded assets, or 
consideration of a range of ``non-asset'' solutions. As a result of the 
above considerations, FHWA has retained in the final rule the 
requirement that State DOT's must include information on current and 
future environmental conditions in their life-cycle planning process.
    The FHWA notes that DOTs should take advantage of information and 
materials currently available; other research is currently ongoing and 
results will become available over time. In addition, FHWA, the 
Transportation Research Board, and some State DOTs have developed 
information on extreme weather, climate change effects and impacts, as 
well as options for improving resiliency that can serve as models for 
State DOTs. Agencies can refer to FHWA's Web site (https://www.fhwa.dot.gov/asset) for information and examples focused on 
assessing climate risks, as well as conducting vulnerability 
assessments and project-level assessments. Information on coastal 
concerns and temperature effects is sufficiently clear to warrant 
consideration and application. Information tied to precipitation and 
runoff in riverine environments is still evolving. For coastal areas, 
State DOTs may refer to FHWA's ``Hydraulic Engineering Circular No. 
25--Volume 2, Highways in the Coastal Environment: Assessing Extreme 
Events (2014)'' for technical guidance on assessing future sea-level 
rise and storm surge impacts. The FHWA recognizes that for some 
parameters, such as precipitation and flow/runoff, sound scientific 
methods for assessing future conditions are still under development and 
will evolve over time. The FHWA plans to issue additional information 
and guidance to support States in addressing climate change and extreme 
weather in their asset management plans.
    South Dakota DOT said that it uses historical weather data to 
update performance curves, which are used to project future condition 
and plan the timing of considered improvements. The agency said that as 
historical weather data includes more severe weather events or other 
possible effects of climate change, the performance curves will reflect 
that change. This commenter encouraged FHWA to add language to the rule 
stating that this practice would satisfy the rule's requirements. South 
Dakota DOT said that it lacks sufficient data to add a more formal 
consideration of climate change in its network-level LCCA.
    In response, FHWA notes that the study of future environmental 
conditions is an evolving field. Updating weather-related databases on 
a regular basis to reflect the most recent observations is an important 
step. This practice may be sufficient for investments with short 
remaining service lives (e.g., 10 to 15 years). However, this approach 
assumes that the future climate will match the past, which is 
unsupported by recent observations, particularly for temperature and 
sea-level variables, where some level of discontinuity or 
nonstationarity has already been observed. Because climate change is 
expected to cause future observations to differ from the past for some 
variables used in project design and maintenance, it is important to 
account for climate change in assessing the performance and investment 
needs/life cycles of transportation assets, and manage assets to meet 
performance goals under a range of future environmental conditions. As 
a result, no changes were made to the rule as a result of this comment.
    Oregon DOT said that the proposed 10-year timeframe for asset 
management plans is much too short to account for things like climate 
change or seismic events.
    In response, FHWA notes that the 10-year time frame referred to 
includes the investment strategies that a State plans to implement 
during the course of the State's 10-year asset management plan, and 
does not refer to the time period that States should consider for LCP 
to inform development of the investment strategies. While this rule 
does not establish a specific time frame for conducting LCP, FHWA notes 
that LCP in most, if not all cases, would look much further out than 10 
years to cover the whole life of assets. The FHWA has not made a change 
to the language of the rule in response to these comments.
    Texas DOT requested more details about the proposed LCCA 
requirements, and asked FHWA to disclose what would be the expected 
accuracy level for LCCA at the network level. This agency also asked if 
road user costs, benefits, and estimates of environmental effects 
should be considered in the analysis.
    In response, FHWA notes that Sec.  515.7(a)(2) of the final rule 
identifies minimum requirements to be included in the LCP process. Road 
user costs and benefits, and estimates of environmental effects are not 
included in minimum requirements. States, in their discretion, may 
include these additional factors. However, as a State DOT conducts its 
LCP, the State DOT should include future changes in demand; information 
on current and future environmental conditions including extreme 
weather events, climate change, and seismic activity; and other factors 
that could impact whole life costs of assets. The FHWA does not set a 
threshold for the accuracy of LCP at this point because States' 
maturity levels with regard to asset management practice and processes 
vary. The FHWA expects that as the maturity level increases, so will 
the level of accuracy.
    Mississippi DOT said LCCA should include the salvage value, or the 
cost to re-construct the asset at the end of its service life. The 
agency said this value is often reduced or eliminated due to the period 
of time used for the analysis.
    In response, FHWA notes that final rule Sec.  515.7(a)(2) states 
the minimum

[[Page 73220]]

requirements for an LCP process that satisfies the requirements of 
section 119(e). State DOTs may choose to include additional information 
such as salvage value, but it is not required.
    With respect to proposed Sec.  515.007(a)(2)(i), New Jersey DOT 
suggested replacing the word ``desired'' with ``target,'' ``minimum 
target condition,'' ``optimal condition,'' or ``optimal target 
condition.'' As discussed in the section-by-section discussion of NPRM 
Sec.  515.005 (Asset Management Plan), AASHTO and Connecticut DOT 
stated that FHWA should remove any reference to a ``desired'' 
condition, but if the terms remain in the final rule, FHWA should 
define the term ``desired condition'' as the State-established targets 
for the asset group.
    In response, FHWA replaced the term ``desired condition'' with 
``State DOT targets for asset condition'' in Sec.  515.7(b)(1) of the 
final rule.
    Proposed Sec.  515.007(a)(2)(ii) would have required a State's 
process for LCP to include identification of deterioration models for 
each asset class or asset sub-group. The GTMA supported the provision 
as proposed. AASHTO and Connecticut DOT recommended that FHWA make this 
requirement optional for assets beyond those required by MAP-21. They 
expressed concern that requiring deterioration models for each asset 
class or asset sub-group would discourage State DOTs from voluntarily 
including other assets in the plans beyond the required pavements and 
bridges.
    In response to these comments, FHWA notes that deterioration models 
are necessary to determine what strategies must be adopted to preserve 
or improve assets. However, in the final rule FHWA is not requiring 
deterioration models for assets beyond those required by 23 U.S.C. 
119(e). The FHWA has modified the provision by adding a sentence to 
Sec.  515.7(b)(2) of the final rule stating that the identification of 
deterioration models for assets other than NHS pavements and bridges is 
optional.
    Oregon DOT said that the proposed rule should be revised to 
acknowledge that deterioration models for bridges are still in a state 
of development and that it will be many years before an accurate suite 
of deterioration models can be developed. This commenter asserted that 
the most likely way forward to develop effective deterioration models 
for bridges is the FHWA Long Term Bridge Program, but the commenter 
stated that those results will not be ready until far into the future. 
Likewise, North Carolina DOT said that simply developing accurate 
deterioration models for bridge assets has proven to be difficult and 
that it will take years to refine the models. According to this 
commenter, regional deterioration models for different climatic regions 
vary significantly.
    In response to these comments, FHWA acknowledges that there is 
complexity involved in developing deterioration models. Methods for 
modeling bridge deterioration exist, but it is important for asset 
owners to refine, implement, and apply these methods using their bridge 
data and observed deterioration rates. The State models should be 
developed using a combination of historical data and engineering 
judgment, and should reflect the deterioration rates observed within 
localities or regions considering climate, bridge and element type, 
environment, and other factors. This is standard practice when 
implementing deterioration models. To account for the potential 
limitations of modeling, the information and recommendations that are 
supported by deterioration modeling (e.g., preservation policies and 
bridge-level work programming) should be reviewed by State DOTs and 
revised as appropriate.
    New Jersey DOT said proposed section 515.007(a)(2)(ii) would be 
``onerous and burdensome'' if it is intended to require a State to 
document and provide its deterioration models as part of its asset 
management plan, rather than just acknowledging that the models will be 
the basis of the State's life-cycle cost estimation.
    In response, FHWA clarifies that States do not need to include 
their deterioration models in detail in their asset management plans. 
However, the deterioration models are required to perform the required 
analysis, and a State DOT must identify the model(s) that are part of 
the State DOT's process for developing its asset management plan. State 
DOTs should include, as part of their process description, an 
explanation of how the selected model(s) provide insight into LCP, and 
why a certain type of management strategy is the most appropriate 
strategy at the time of asset management plan development.
    As proposed in the NPRM, Sec.  515.007(a)(2)(iii) would require a 
State's process for LCP to include potential work types and their 
relative unit costs across the whole life of each asset class or asset 
sub-group. The GTMA supported the provision as proposed. The AASHTO and 
numerous State DOTs said it would be unreasonable to require data at 
the granularity of ``relative unit cost'' for a specific work type, 
especially for system-level analysis. These commenters asserted that 
many State DOTs would have difficulty obtaining this type of 
information, because their current financial management systems for 
maintenance projects may not effectively capture the costs associated 
with specific work types.\22\ Some of these commenters added that the 
proposed requirement would extend data compilation burdens on States to 
maintenance work, even though maintenance work is not generally 
eligible for Federal-aid funding.\23\ Oregon DOT said that such 
information would likely be highly variable and valid only for 
particular circumstances and for a short period of time.
---------------------------------------------------------------------------

    \22\ AASHTO; Connecticut DOT; DOTs of ID, MT, ND, SD, and WY 
(joint submission); South Dakota DOT; Texas DOT; Wyoming DOT.
    \23\ DOTs of ID, MT, ND, SD, and WY; South Dakota DOT; Wyoming 
DOT.
---------------------------------------------------------------------------

    The FHWA believes that management of assets is achievable only if 
there is a reliable cost estimate for various investment strategies, 
including maintenance. With no reliable cost estimate for maintenance 
activities or other investment strategies, making tradeoffs among these 
strategies becomes impossible. Maintenance work may not be generally 
eligible for Federal-aid funding, but failure to address maintenance in 
a timely manner could result in premature failure of projects built 
with Federal-aid funding.\24\ However, to reduce the burden on States, 
the FHWA has deleted ``treatment options for the work types'' from 
Sec.  515.7(b)(3) of the final rule. Hence, the requirement for 
providing ``relative unit cost data'' applies only to the unit cost for 
the five specific strategies listed in the final rule's definition of 
work type: Initial construction, maintenance, preservation, 
rehabilitation, and reconstruction. The FHWA believes that all States 
can obtain this information, but acknowledges that some States may not 
be able to capture the cost information as effectively as others.
---------------------------------------------------------------------------

    \24\ Note State DOTs have a maintenance obligation as provided 
in 23 U.S.C. 116.
---------------------------------------------------------------------------

    Oregon DOT asked if FHWA's expectation is that a State DOT will 
differentiate NHS pavements among pavement types and NHS bridges among 
sub-groups (e.g., draw bridges, coastal bridges, and historic bridges) 
and then satisfy all the requirements discussed in proposed Sec. Sec.  
515.007(a)(2) through 515.007(a)(5).
    In response, if States collect data in a way that can distinguish 
one asset sub-group from another, then they must satisfy all the 
requirements discussed in

[[Page 73221]]

Sec.  515.7(b) of the final rule for all asset sub-groups. However, the 
processes addressed by final rule Sec. Sec.  515.7(c) through 515.7(e) 
(i.e., processes for developing risk management plan, financial plan, 
and investment strategies) should be done by asset class.
NPRM Section 515.007(a)(3) (Final Rule Section 515.7(c))
    Seventeen commenters addressed proposed Section 515.007(a)(3), 
which requires each State DOT to establish a process for developing a 
risk management plan. New York State DOT agreed that risk management 
should be part of an asset management program, but the agency said that 
the concept of risk management needs to be explicitly defined and 
described in the final rule. North Carolina DOT said that the 
requirements for risk analysis are not clearly defined in the NPRM and 
that State DOTs need specifics to determine whether they can provide 
this type of analysis. Similarly, Texas DOT stated that FHWA should 
provide guidance regarding how to conduct the risk-based analysis and 
management based on the available resources for State DOTs. Virginia 
DOT said that FHWA should provide an example of how to conduct the risk 
management process, as well as an example of an acceptable risk 
management plan. The GTMA said that unless FHWA provides more details 
on what is expected from State DOTs, this provision would likely result 
in significant variety in the assessments reported. Fugro Roadware said 
that few States are actively applying risk-based asset management at 
the network level, and that the lack of risk-based solutions is also 
apparent internationally. Based on these assertions, the commenter 
suggested that FHWA provide additional guidance and/or training to more 
clearly explain what is expected of agencies.
    In response, the FHWA realizes that the concept of network-level 
risk management is rather new to transportation agencies, and that the 
first risk management plan developed by some States may not be fully 
mature. However, 23 U.S.C. 119(e) requires a risk-based asset 
management plan that includes a risk-management analysis, and State 
DOTs must satisfy the minimum requirements established in this rule. 
The FHWA believes the final rule achieves a balance between the 
requirements of the law and the need to give State DOTs flexibility in 
addressing requirements pertaining to risk. The FHWA acknowledges the 
complexity of finding solutions to some risks, such as extreme weather 
events. Although these types of risks cannot be eliminated, measures 
should be taken to reduce their impacts.
    The FHWA does not believe there is a present need for additional 
FHWA guidance on how to perform a risk management analysis. Information 
on that topic is available through several existing resources. The 
National Highway Institute offers a risk management training course 
(course number FHWA-NHI-136065), as well as several other courses that 
include risk management elements. In addition, the Web site of the FHWA 
Office of Asset Management includes a series of five risk management 
reports discussing the concept and specifics of risk management. Those 
reports are available at: https://www.fhwa.dot.gov/asset/pubs.cfm?thisarea=risk. Other reports are available through the 
National Cooperative Highway Research Program, such as NCHRP 25-25 
``Integrating Extreme Weather Into Transportation Asset Management.'' 
Publication of an additional report, NCHRP 08-93, ``Managing Risk 
Across the Enterprise: A Guidebook for State Departments of 
Transportation,'' is planned for 2016.
    For these reasons, FHWA retained the substance of the proposed 
language in Sec.  515.7(c) of the final rule. However, to clarify and 
simplify the rule, FHWA eliminated the phrase ``the NHS condition and 
effectiveness as they relate to the safe and efficient movement of 
people and goods'' and replaced that language with ``condition of NHS 
pavements and bridges and the performance of the NHS'' in Sec.  
515.7(c)(1) of the final rule.
    The city of Wahpeton, ND, said that States do not have adequate 
knowledge of local risks and opportunities. This commenter added that 
compiling multiple local risk management practices into a cohesive 
``one size fits all'' document would risk oversimplifying local 
complexities in managing non-State-owned NHS roadways.
    In response, FHWA acknowledges that local governments may be 
vulnerable to risks specific to their area of jurisdiction and 
encourages State DOTs to coordinate with other NHS owners when 
developing their asset management plans.
    Ten commenters addressed the proposed risk management process 
requirements pertaining to the inclusion of information from the MAP-21 
section 1315(b) evaluations of facilities repeatedly damaged by 
emergency events. The AASHTO and several State DOTs urged FHWA to 
require inclusion of only a summary of the evaluation, and not the full 
evaluation. Illinois DOT remarked that FHWA should encourage State DOTs 
to include the evaluation, but not require it. Texas DOT stated that it 
is not clear what State DOTs would need to do in order to meet this 
requirement. Maryland DOT suggested that the evaluation be a part of 
the risk analysis process required for an asset management plan.
    The FHWA believes it is crucial for asset management plans to 
include relevant MAP-21 section 1315(b) evaluation information and 
address the information in the asset management plan's risk analysis. 
The State DOT's asset management plan is a key mechanism for 
determining transportation needs and investment priorities. One of the 
primary intended outcomes of the MAP-21 section 1315(b) requirements is 
to help State DOTs make informed decisions on those issues. The FHWA 
believes requiring integration of the two processes is important to 
achieving the statutory purposes of both MAP-21 section 1315(b) and 23 
U.S.C. 119(e). The FHWA agrees with commenters that the rule should 
require the inclusion in the State DOT asset management plans of only a 
summary of evaluation results. Because the proposed rule language 
already specified the use of a summary of the evaluations, FHWA makes 
no change to that portion of the rule.
    The FHWA also agrees that the results of the evaluations are 
relevant to, and should be included in, the risk analysis required in 
asset management plans. In Sec.  515.7(c)(1) and in Sec.  515.7(c)(6) 
of the final rule, FHWA updated the regulatory reference to reflect the 
placement of MAP-21 section 1315(b) requirements in 23 CFR part 667. 
The FHWA also clarified the applicability language in Sec.  515.7(c)(6) 
of the final rule. Under the final rule, State DOTs must include, at a 
minimum, summaries of the evaluation results relating to the State's 
NHS pavements and bridges. Because asset management plan requirements 
for non-NHS road, highway, and bridge assets appear in Sec.  515.9(l) 
of the final rule, FHWA added language in final rule Sec.  515.9(l)(6) 
clarifying the risk analysis for those assets includes summaries and 
consideration of the part 667 evaluations if available. The FHWA 
believes State DOTs should have some flexibility in how they implement 
this provision, and declines to provide detailed requirements in the 
rule for the content of the summaries. It will be sufficient if State 
DOTs ensure their summaries describe relevant evaluation information in 
sufficient detail to support the required consideration in the asset 
management plan risk assessment.

[[Page 73222]]

    The city of Wahpeton, ND said FHWA should clarify that locally 
owned, non-NHS facilities are not subject to the asset management 
requirements of this rule simply because they may be included in a MAP-
21 section 1315(b) evaluation summary.
    In response, FHWA states the inclusion in an asset management plan 
of a general discussion of other infrastructure needs in the State, 
including needs identified through MAP-21 section 1315(b) evaluation 
work, does not make those other assets subject to asset management 
requirements in 23 CFR part 515. The FHWA points out MAP-21 section 
1315(b) evaluation summaries are required in an asset management plan 
only for NHS pavements and bridges. A State DOT certainly may elect to 
include evaluation information on other roads, highways, or bridges in 
the State for the purpose of enhancing the usefulness of its asset 
management. Indeed, FHWA encourages State DOTs to include a summary of 
the overall results of the MAP-21 section 1315(b) evaluations in the 
asset management plan risk analysis if the State anticipates the 
evaluation results may affect either the selection of investment 
strategies in the asset management plan, or the State's ability to 
implement its investment strategies.
    Several commenters asked FHWA to be more specific about the types 
of risks that States should consider when conducting the risk analysis. 
The NYSAMPO said it would be helpful if the rule provided a non-
prescriptive list of risk elements that could be included. Fugro 
Roadware said that the rule should clearly outline which risks should 
be evaluated. The commenter recommended that agencies specifically 
evaluate the risk and variability associated with performance measures, 
deterioration models, rehabilitation costs, and specific project 
selections during the management process. The AASHTO and Connecticut 
DOT requested that FHWA clarify that the identification of which risks 
to address should be determined by each State DOT.
    Hawaii DOT recommended that the risk identification include 
financial risk. Similarly, PCA, ACPA, and CEMEX USA proposed that 
financial risks, inflation risks, and other macro- and micro-economic 
risks be considered. These commenters also proposed that such risks be 
included in developing the financial plan, investment strategies, and 
the estimated cost of expected future work. They asserted that not 
accounting for inflation risks, as well as other financing risks and 
economic risks, would have a direct bearing on the decisions on how to 
minimize risk impacts and improve asset conditions.
    Regarding environmental risks, Washington State DOT said that it is 
currently working to include resilience to extreme weather events as an 
integral part of its risk reduction efforts. In contrast, GTMA said 
that it seems premature to require States to address the potential 
impacts of environmental conditions such as extreme weather, climate 
change, and seismic activity while FHWA is working to develop a better 
understanding of these potential impacts. Similarly, South Dakota DOT 
recommended that FHWA reference proven procedures for forecasting the 
future environmental conditions mentioned in the NPRM. The agency said 
that if established procedures are not available, it would be premature 
to include this element in the asset management plan beyond a general 
discussion of how a State has considered environmental standards during 
design, life-cycle analysis, and risk analysis. Alaska DOT requested 
that FHWA delete any reference to environmental conditions in proposed 
Sec.  515.007(a)(3)(i).
    In response to these comments, FHWA notes proposed Sec.  
515.007(a)(3)(i) contains a non-prescriptive list of risks. Risks 
associated with current and future environmental conditions are 
included, in part, because these risks have the potential to create a 
large drain on resources if not considered in the context of the long-
term life of bridges and pavements. Assessment of risks associated with 
current and future environmental conditions, similar to other risks, is 
essential to estimating long-term investment needs, and thus is 
essential to asset management plan development. In FHWA's experience, 
the types of risks to which States are susceptible varies from one 
State to another. The purpose of risk management is to identify events 
and situations that pose a threat to NHS condition and performance and 
address them to reduce or eliminate their impact. In addition, risk 
management can identify opportunities that could expedite an agency's 
progress toward improving or preserving the NHS and take advantage of 
them.
    The National Highway Institute's asset management course 
categorizes risks as financial risks, hazard risks, operational risks, 
and strategic risks. Examples for each category are as follows:
     Financial risks: Economic downturn, budget uncertainty, 
sudden price increase, and change in inflation rate;
     Hazard risks: Seismic events, floods, and other extreme 
weather events;
     Operational risks: Lack of adequate maintenance, excess 
loading, scour, adequacy of roadside safety hardware (crash tested 
bridge railing), data quality, inaccurate asset inventory, asset 
failure, and lack of expertise; and
     Strategic risks: Environmental standards, changes in the 
make-up of the State legislature, and frequent changes in the agency 
leadership.

The FHWA recognizes not all States may be vulnerable to risks in all 
four categories. There also may be circumstances where States identify 
a particular type of risk outside of these categories. In the final 
rule, FHWA leaves it to the discretion of the State DOTs to determine 
how best to identify risks to their system. In response to the 
comments, FHWA modified the final rule to include examples of other 
risk categories in Sec.  515.7(c)(1). The added examples are financial 
risks such as budget uncertainty, operational risks such as asset 
failure, and strategic risks such as environmental compliance.
    Proposed Sec.  515.007(a)(3)(iv) would require the process for 
developing the risk management plan to produce a mitigation plan for 
addressing the top priority risks. Alaska DOT requested FHWA delete 
this provision entirely, but it did not provide a rationale for doing 
so.
    The FHWA believes that identifying risks without including options 
for addressing them would not provide sufficient information to State 
DOTs to permit them to develop the investment strategies required by 23 
U.S.C. 119(e)(2). The FHWA retains the proposed language, now in Sec.  
515.7(c)(4) of the final rule.
NPRM Section 515.007(a)(4) (Final Rule Section 515.7(d))
    Twenty-six commenters addressed proposed Sec.  515.007(a)(4), which 
would require State DOTs to establish a process for developing a 
financial plan. The American Society of Civil Engineers (ASCE) 
supported the proposed requirement for a financial plan that would 
identify the annual costs to implement the asset management plan over a 
minimum 10-year period. This commenter endorsed the requirement that 
States estimate the value of their pavement and bridge assets and the 
needed investment levels necessary to maintain the value of those 
assets. According to this commenter, capitalizing road and bridge 
assets would underscore the fact that transportation infrastructure is 
not only a benefit for mobility, but also it

[[Page 73223]]

represents an increase in the wealth of localities, States, and the 
Nation.
    The FHWA acknowledges this comment; no further response is 
required.
    North Carolina DOT requested that FHWA make a clearer distinction 
between the purposes and contents of the financial plan and the 
investment strategies.
    In response, the FHWA notes State DOTs are required under Sec.  
515.7 to develop processes for developing both a financial plan and for 
developing investment strategies. The process for developing a 
financial plan includes, but is not limited to, identifying resources 
and expenditures over a minimum of 10 years and demonstrating how 
resources should be distributed among various strategies to meet the 
performance goals and targets. By contrast, the investment strategies 
process is developed to ensure that the investment strategies, 
identified through financial planning, meet the requirements of Sec.  
515.9(f), and were influenced by the results of the required 
performance gap analysis, LCP for asset classes or asset sub-groups, 
risk management analysis, and anticipated available funding and 
expected costs of future work (see Sec.  515.7(e)(1)-(4) of the final 
rule). For example, if pavement preservation is an investment strategy 
that the State must to pursue to reach a target of 72 percent of 
pavement in good condition, then the State must demonstrate that: (1) 
The pavement preservation strategy addresses Sec.  515.009(f) 
requirements; and (2) selection of this strategy was driven by the 
State DOT's asset management processes. This can be accomplished by 
developing a simple table. Of course, State DOTs have the discretion to 
demonstrate this in other ways.
    As proposed, Sec.  515.007(a)(4) would require the financial plan 
process to identify annual costs over a minimum of 10 years. Many of 
the commenters addressing the minimum duration of the financial plan 
extended their comments to address the proposed minimum duration of the 
overall asset management plan. The duration for the asset management 
plan proposed in NPRM Sec.  515.009(e) also is 10 years.
    New York State DOT supported the proposed 10-year time horizon for 
asset management plans, stating that LCCA is not required for either 
Transportation Improvement Programs (TIP) or STIPs and having an asset 
management plan with a 10-year horizon would help to inform the project 
selection process with respect to the longer-term impacts of project 
choices. This DOT added that a 10-year time horizon would allow the 
asset management plan to be a cross-check between the STIP and States' 
and MPOs' long-range plans, which by law must have at least a 20-year 
horizon. Oregon DOT stated that it intends to prepare a plan that will 
cover at least 10 years, but it is not opposed to FHWA allowing plans 
to cover less than 10 years.
    The FHWA acknowledges these comments, but does not believe any 
further response is required.
    CEMEX USA, PCA, ACPA, and Colorado DOT recommended that FHWA 
increase the minimum duration to 20 to 30 years in order to coincide 
with the minimum time frame for the statewide long-range transportation 
plans in 23 U.S.C. 135(f)(1). These commenters added that if States are 
only required to provide asset management plans with a minimum 10-year 
period, they may not evaluate the long-term differences between 
alternate investment strategies and might overlook alternate strategies 
that yield longer-term benefits. The PCA and ACPA stated that whether 
States have little certainty about financial resources available in 
later years is a different, independent issue.
    In contrast, AASHTO and several State DOTs recommended FHWA shorten 
the minimum time horizon for the financial plan and the overall asset 
management plan to 4 years, but asked FHWA to allow States the option 
to use any time period longer than 4 years.\25\ These commenters stated 
that a 4-year duration would align better with the time horizons for 
STIPs, targets established under the second performance measure 
rulemaking, and State DOT performance plans. Some of these commenters 
added that a 10-year time frame would greatly exceed the length of a 
typical multiyear authorization bill and would require detailed 
financial projections beyond anything required by Congress.\26\ 
Kentucky Transportation Cabinet said that 10-year projections for 
pavement conditions are not reliable assessments of needs, and a time 
span that goes beyond administration changes and the STIP is also 
unreliable for funding. It further commented that a shorter time span 
for long-term planning would provide more accountability. Similarly, 
the city of Wahpeton, ND, said that States should only be required to 
produce a financial forecast that aligns with its STIP. North Carolina 
DOT and Delaware DOT suggested a 5-year plan, and NEPPP stated that it 
could be argued that any plan beyond 6 years in duration would require 
too much guesswork to be relevant.
---------------------------------------------------------------------------

    \25\ AASHTO, Arkansas DOT, Connecticut DOT, Illinois DOT; North 
Dakota DOT; South Dakota DOT; DOTs of ID, MT, ND, SD, and WY (joint 
submission); Wyoming DOT.
    \26\ DOTs of ID, MT, ND, SD, and WY (joint submission); Wyoming 
DOT.
---------------------------------------------------------------------------

    In summary, reasons offered by commenters for establishing a 
shorter duration for the financial plan and the overall asset 
management plan included:
     A 10-year time horizon is not consistent with existing and 
proposed Federal requirements for planning and performance management 
(e.g., 4- or 5-year STIPs, 4-year targets for the national performance 
measures) (AASHTO and Arkansas and Connecticut DOTs);
     Any aspect of the asset management plan that goes beyond 
the length of the STIP becomes quite speculative, making the detail 
called for by the asset management plan proposed rule (with regard to 
funding) of limited if any value for decision support (AASHTO and DOTs 
of Arkansas, Connecticut, and Illinois);
     It is highly burdensome for a State to have to compile the 
information for a period of 10 or more years, and particularly 
troublesome as applied to years beyond the time period addressed in the 
STIP (AASHTO and Connecticut DOT);
     The uncertain funding environment at the Federal and State 
levels makes 10-year financial analyses of limited value (AASHTO and 
six State DOTs); \27\
---------------------------------------------------------------------------

    \27\ AASHTO, Arkansas DOT, Connecticut DOT, Illinois DOT, North 
Carolina DOT; North Dakota DOT, Tennessee DOT.
---------------------------------------------------------------------------

     A 10-year time frame greatly exceeds the length of an 
anticipated multiyear authorization bill and would require detailed 
financial projections beyond anything required by Congress, adding 
substantial risk to financial forecasting (South Dakota DOT); and
     The intended annual costing/budget figures for a 10-year 
period will be filled with numerous variables, especially when it comes 
to maintenance activities (Tennessee DOT).
    In response to the requests for a longer minimum duration for the 
financial plan, FHWA notes that the 10-year period referenced in 
proposed section 515.007(a)(4), like the 10-year period for the overall 
asset management plan proposed in section 515.009(e), is a minimum. The 
role of durations in asset management is discussed in the section-by-
section discussion of NPRM section 515.005 (Long-term and Short-term). 
The 10-year minimums do not restrict State DOTs to a specific time 
frame for conducting LCP or other analyses. States may choose much

[[Page 73224]]

longer time frames for their analyses. Furthermore, State DOTs are only 
required to include strategies in their asset management plans that 
they plan to implement during the 10-year timeframe for those plans.
    Regarding requests for a shorter timeframe for the financial plan, 
FHWA believes that a financial plan covering 4- or 5-year periods would 
not allow for the strategic planning that is needed for the management 
of long-lived assets. The life-cycle of a bridge or pavement spans 
decades and that requires strategic understanding of the asset's life-
cycle. A long-term financial plan provides ``advance warning'' to 
decisionmakers and allows them to plan years in advance for investments 
needed to sustain assets. The long-term perspective of the financial 
plan allows legislators and other decisionmakers long lead times to 
anticipate how to close financial gaps. Alternatively, the agency can 
decide whether to adjust condition targets. It also can lead to 
strategic decisions on how to manage revenue sources, such as bonds, to 
be timed strategically over a decade to provide revenues when most 
critically needed to sustain asset targets. Therefore, the longer 
timeframes for the asset management plan and financial plan are 
essential for incentivizing and documenting good asset management 
practices, and for keeping decisionmakers focused on sustaining assets. 
However, too long a period for the plans, such as 20 or 30 years, is 
likely to lose credibility because long-term revenue forecasting 
involves making many assumptions and uncertainty. Additionally, this 
may be a challenge in some cases because agencies cannot confidently 
predict asset conditions much beyond 10 years.
    The FHWA believes that the 10-year period is long enough to 
illustrate the benefits of an LCP approach, but short enough to be 
credible. In addition, only a long-term financial plan can demonstrate 
how adequate preservation investment today pays future financial 
dividends and how underfunding of preservation in the early years of a 
plan stimulates compounding growth in backlogs of deferred maintenance 
that create serious future financial liabilities. The effects of sound 
preservation do not show up in the short-term, but only over the longer 
horizon. With a short-term horizon, an agency could ``save'' money by 
cutting preservation. Only over the long-term do the costs of deferred 
maintenance become apparent. The FHWA recognizes the risks involved 
with financial forecasting. However, periodic updates to the plan, as 
required under Sec.  515.13(c) of the final rule, will reduce the 
financial risks to a great degree. As a result of the above analysis, 
FHWA retained in the final rule the 10-year timeframe for the financial 
plan and the overall asset management plan.
    Proposed Sec.  515.007(a)(4)(i) would require the financial plan 
process to include the estimated cost of expected future work to 
implement investment strategies contained in the asset management plan, 
by State fiscal year and work type. The AASHTO and Connecticut DOT said 
that the references to ``work type'' should be deleted, because 
analysis at that level would be inconsistent with a system-level 
analysis. Applied Pavement Technology, Inc. said that it is not clear 
what level of detail would be required to provide work types. The 
commenter asked if it would be sufficient to classify work types as 
preservation and rehabilitation, or if more detail (e.g., chip seal, 
overlays) would be required. Oregon DOT said that without presentation 
of State targets that differ or go beyond Federal targets and 
consideration of other system components of interest to the State, the 
information required by this provision would do little to enhance the 
condition and performance of a State's transportation system. Oregon 
DOT added that the level of detail associated with satisfying this 
requirement would likely be challenging for all but a very few State 
DOTs.
    The FHWA believes that inclusion of work types in the financial 
plan is necessary to demonstrate the impact that underfunding or 
overfunding of one particular work type would have on short-term and 
long-term asset condition. However, after considering the comments, 
FHWA agrees that the objective can be achieved using five basic work 
types (initial construction, maintenance, preservation, rehabilitation, 
and reconstruction), and that it is not necessary to require the more 
detailed level of information as proposed in the NPRM (i.e., inclusion 
of treatment options). The FHWA agrees this revised approach is more 
consistent with a network-level approach to asset management. Thus, 
FHWA has simplified the definition of work type in Sec.  515.5 of the 
final rule.
    Regarding the requirement to use the State fiscal year, Oregon DOT 
said that it would be ``a bit unusual'' to require the use of State 
fiscal years in a Federal document prepared for Federal purposes. 
Hawaii DOT recommended that FHWA allow investment strategies to be 
listed by either State or Federal fiscal year.
    In response, FHWA does not view financial planning in the context 
of asset management to be focused on Federal-aid funding versus State-
funding of projects or programs. Instead, financial planning is 
intended to demonstrate how various funding scenarios, regardless of 
funding source, impact the long-term performance of various asset 
classes. It provides not only State DOTs, but also legislatures, with 
the information they need to make decisions about investment strategies 
that should be undertaken to meet a State's performance goals and 
objectives. The FHWA believes this is most achievable if the State 
fiscal year is used for the financial plan because the State fiscal 
year is generally used by State legislatures and State agencies. Thus, 
FHWA retains the proposed language in the final rule.
    The AASHTO and Connecticut DOT asked FHWA to clarify the 
differences (if any) between the requirements in proposed Sec.  
515.007(a)(4)(i) and (ii). They asserted that, as proposed, the 
``estimated cost of expected future work'' referenced in proposed 
paragraph (a)(4)(i) should be the same as the ``estimated funding 
levels that are expected to be reasonably available'' referenced in 
paragraph (a)(4)(ii). In other words, the work to be performed should 
align with the available funding.
    To clarify the difference between the two paragraphs, FHWA offers 
the following example. Assume that an agency developed its first asset 
management plan in the year 2017. The plan indicates that the agency 
has set its target for pavements in good condition at 72 percent for 
the year 2023. To meet this target, the costs of pavement preservation 
and pavement rehabilitation were estimated at $25 and $70 million 
respectively. This was exactly the same as the ``estimated funding 
levels that were expected to be reasonably available.'' Four years 
later, the agency updates its plan, noting that its purchasing power 
has been reduced substantially because of the sudden rise in prices. In 
this case, the ``estimated funding levels that are expected to be 
reasonably available'' for pavement preservation and pavement 
rehabilitation (fiscal year 2023) remains the same while the cost of 
maintaining the 72 percent of pavements in good condition is escalating 
substantially. Therefore, either the agency has to lower its target or 
move funding from other assets to maintain the 72 percent target. In 
either case, the difference between the ``estimated cost of expected 
future work'' and the ``estimated funding levels that are expected to 
be reasonably available'' explains why targets were adjusted, or why it 
was necessary to move funding from one

[[Page 73225]]

asset category to another. After considering the comments, FHWA decided 
not to change the language in question.
    Regarding proposed Sec.  515.007(a)(4)(ii), Hawaii DOT recommended 
adding the word ``future'' to the reference to available funding.
    In response, FHWA has modified Sec.  515.7(d)(2) of the final rule 
to include the word ``future.''
    Proposed Sec.  515.007(a)(4)(iv) would require the financial plan 
process to include an estimate of the value of the agency's pavements 
and bridge assets and the needed annual investment to maintain the 
value of the assets. The State DOTs of Delaware, Maryland, and Missouri 
recommended that FHWA eliminate this requirement altogether. Delaware 
DOT said that the valuation methods currently in use (i.e., initial 
cost, depreciated value, and replacement cost) all have serious 
drawbacks to their use in asset management. Maryland DOT and Missouri 
DOT added that, without consistent guidance, States would use vastly 
different valuation approaches, so the results would not be comparable 
from State to State. The AASHTO and Connecticut DOT asserted that 
estimating a value of the agency's assets would not be useful or 
desirable and recommended that FHWA simply require each State DOT to 
include a discussion of the needed annual investment to maintain its 
assets to meet the targets established in 23 CFR part 490 Subparts C 
and D. Similarly, Applied Pavement Technology, Inc. recommended that 
FHWA require State DOTs to estimate the annual investment needed to 
maintain the condition (rather than the value) of the network.
    Kentucky Transportation Cabinet also questioned the benefit of 
valuing pavement and bridge assets, but it said that FHWA should 
provide the methodology for doing this calculation. Washington State 
DOT proposed allowing States to determine how to calculate the value 
and said that it would prefer to use the replacement value method for 
pavement assets. Hawaii DOT said the measure of success or 
effectiveness could be based on either the value or the condition of 
the asset. The agency recommended that State DOTs be offered a choice 
of which to use. Texas DOT asked FHWA if the phrase ``maintain the 
value of these assets'' in this paragraph means to maintain in current 
condition.
    In response, FHWA states that the reason for inclusion of asset 
valuation in the asset management financial plan process is not to 
compare States to each other. Asset valuation serves several purposes, 
among which are accountability, transparency, and communication. Asset 
valuation is an essential tool in long-term financial planning which 
helps to realistically capture the monetary gain or loss incurred as a 
result of investment decisions. In the case of infrastructure assets, 
applying timely maintenance and preservation treatments slows the rate 
of deterioration and extends the remaining useful life, while delayed 
preservation and maintenance accelerate the deterioration and reduce 
the value of the asset.
    Asset valuation also serves as an important tool for effectively 
communicating to the public, legislators, and other stakeholders the 
value of assets and the consequences of inadequate funding levels to 
maintain and preserve infrastructure assets. Without an understanding 
of the value of infrastructure assets, the public may be unable to 
appreciate their importance and the need for their long-term 
management. Meeting State targets established in 23 CFR part 490 
Subparts C and D will not indicate whether the value of assets has been 
maintained or decreased, and will not necessarily convey the same 
message to the State DOTs' managers, public, and other stakeholders. 
For example, the percent of NHS pavements in good condition in a State 
could decrease over time while still exceeding the State's target. In 
this example, the State is still meeting its target, but the value of 
NHS pavement assets has decreased.
    In addition, maintaining the asset condition above a certain 
threshold, although it may seem to be an indication of no loss in an 
asset value, fails to deliver the message when the condition changes 
slightly. For example, a drop in percentage of pavement in good 
condition from 92 to 91 may not seem a significant change, especially 
if the condition target is still met. However, when this 1 percent drop 
is expressed in terms of the asset value, its significance will be 
recognized instantly. There are many ways to estimate asset value. The 
FHWA leaves it to the State DOT to select the asset valuation 
methodology that suits it the best. Therefore, FHWA retains the 
proposed rule language in Sec.  515.7(d)(4) of the final rule, except 
for a clarification that the requirements of this provision apply only 
to NHS pavements and bridges.
    Two State DOTs commented on the NPRM preamble, recommending changes 
to the sentence that describes the purpose of the financial plan as 
being ``to ensure that the adopted strategies are not only affordable, 
but that assets will be preserved and maintained with no risks of 
financial shortfall.'' (80 FR 9231, 9240) Missouri DOT proposed the 
substitution of the word ``minimal'' for ``no,'' arguing that there is 
no way to ensure ``no risks.'' Maryland DOT suggested rewriting the 
sentence to read as follows: ``The purpose is to link a program of 
projects to the State DOT's constrained long-range planning process to 
ensure that the adopted strategies are appropriate and that assets will 
be preserved and maintained within identified financial constraints.'' 
Maryland DOT said that STIPs are already required to be fiscally 
constrained; therefore, any program noted within the asset management 
plan would be by definition ``affordable.'' The agency added that it 
would be neither practical nor possible to guarantee ``no risk of 
financial shortfall'' over a 10-year period, because too many variables 
remain outside of a State DOT's control.
    In response, FHWA agrees that the word ``minimal'' is more 
appropriate than ``no'' in the above statement. However, because the 
statement in question appeared only in the preamble of the NPRM and not 
in the final rule, FHWA has made no changes as a result of these 
comments. Additionally, FHWA notes that long-range planning by States 
is not always fiscally constrained (23 CFR 450.216(m)), and that the 
purpose of the asset management financial plan is to determine the 
appropriate level of funding for various investment strategies to reach 
a certain level of asset performance over time. The FHWA agrees that 
the ultimate goal of asset management in general is to develop 
investment strategies that are used in the transportation planning 
process, to develop a transportation program that achieves the desired 
outcomes. Finally, FHWA notes this rule requires updates to the State 
DOT's asset management plan at least once every 4 years (final rule 
Sec.  515.13(c)). This requirement should adequately capture the impact 
of financial shortfalls.
    The NYSAMPO proposed FHWA add a reference to consistency with the 
revenue forecasting methodology used to develop the financial plans for 
MPOs' metropolitan long-range transportation plans.
    In response, FHWA notes that State DOTs have discretion over their 
choice of revenue forecasting methodology, but FHWA encourages States 
to coordinate with MPOs when developing their asset management plan 
processes. The FHWA made no change in response to this comment. For 
more information on coordination with MPOs, toll

[[Page 73226]]

authorities, and other owners of NHS assets, see the section-by-section 
discussion of NPRM Sec.  515.009(b).
NPRM Section 515.007(a)(5) (Final Rule Section 515.7(e))
    Eight commenters addressed Sec.  515.007(a)(5), which would require 
a State DOT to establish a process for developing investment 
strategies. The GTMA and Washington State DOT supported the provision 
as proposed. New Jersey DOT said that State DOTs should not have to 
outline every process; instead, FHWA should focus more on the outcomes 
from the processes. This same commenter also stated that the proposed 
rule expects States to offer investment strategies in multiple 
locations in the plan (i.e., gap analysis, LCCA, and investment 
strategies). The agency suggested that the section of the asset 
management plan governed by proposed Sec.  515.007(a)(5) should be 
where strategies are articulated.
    In response, FHWA believes each asset management process in the 
rule is necessary to ensure that the outcome of asset management is 
sound and effective. The FHWA notes there is a difference between 
``strategies'' and ``investment strategies.'' Strategies to address 
needs are identified through various analyses done using the processes 
developed for performance gap analyses, LCP, and risk analyses. Using 
the financial planning process, investment strategies and their 
corresponding level of investments are determined. For example, a State 
DOT might identify through its performance gap analysis that it needs 
to address poor drainage along the NHS. During development of the 
financial plan and investment strategies, this strategy must compete 
for funding with other strategies resulting from the three processes 
noted above. It may turn out that the State DOT decides to allocate 
funding to address the drainage issue along the NHS by reducing funding 
for several other areas.
    After considering the comments, FHWA reworded the second sentence 
in final rule Sec.  515.7(e) to clarify that the process for investment 
strategies must result in a description articulating how the investment 
strategies in the State DOT's asset management plan were influenced by 
the performance gap analysis, LCP, risk management analysis, 
anticipated available funding, and estimated costs of expected future 
work types associated with strategies based on the financial plan.
    Maryland DOT suggested FHWA clarify that investment strategies are 
also influenced by non-data driven factors required to meet an agency's 
overall goals within a State's resource-related constraints.
    In response, FHWA clarifies that all investments strategies must be 
outcomes of the processes identified in Sec.  515.7. The situation 
raised by the Maryland DOT may be addressed in the risk analysis. 
``Risk,'' as defined in this rule can include a wide range of issues 
and conditions that may influence decisionmaking. This is made clear in 
Sec.  515.7(c)(1) of the final rule. As an example, a State DOT may 
choose to upgrade roads in an area that is slated for economic growth 
or to address environmental justice issues. However, these risks need 
to be addressed in the risk analysis and compete with other strategies 
during the development of the financial planning and investment 
strategies.
    With respect to the first sentence in proposed Sec.  515.007(a)(5), 
Hawaii DOT recommended adding the phrase ``leading to a program of 
projects that'' so that the provision would read as follows: ``A State 
DOT shall establish a process for developing investment strategies 
leading to a program of projects that meets the requirements in Sec.  
515.009(f).'' In response, FHWA is removing ``program of projects'' 
language from Sec.  515.9(f) in the final rule to reduce the risk that 
the language would be misinterpreted. For consistency, FHWA declines to 
make the suggested change to the language of proposed Sec.  
515.007(a)(5). The change to NPRM Sec.  514.009(f) is covered in the 
section-by-section discussion of that section.
    Washington State DOT said that risk of investment type in the 
short- and long-term should be considered in determining investment 
choice and how rehabilitation should occur over time. The agency stated 
that available funding might impact the State's ability to select the 
most cost-effective strategy in lieu of one that is achievable. The DOT 
said that it intends to include in its risk management plan a 
discussion of the additional risks that were considered as part of 
these trade-off decisions.
    In response, FHWA encourages State DOTs to go beyond the minimum 
requirements of Sec. Sec.  515.7 and 515.9 when developing their 
processes and plans. However, the final rule gives State DOTs the 
discretion to decide whether to include such other considerations when 
developing their processes.
    The FHWA received several comments on proposed Sec.  
515.007(a)(5)(iii), which would require State DOT asset management plan 
development processes to provide for inclusion of a description of how 
the investment strategies are influenced by network-level LCCA for 
asset classes or asset sub-groups. The PCA, ACPA, and CEMEX USA said 
that they do not believe that using LCCA would be the appropriate 
process to determine if an investment strategy is effective. The 
commenters asserted that LCCA involves a project-level comparison of 
the economic worth of competing treatment options for a given project. 
According to these commenters, what is needed for a network analysis is 
a forward-looking parameter such as RSI. They asserted that RSI 
provides predictive insight into the future condition at the network 
level based on projected performance of all projects in the investment 
strategy. The commenters also noted FHWA's significant emphasis on RSI 
and the depth of resources surrounding RSI and Pavement Health Track on 
FHWA's Pavements Web site (https://www.fhwa.dot.gov/asset/software/index.cfm). These commenters recommended that FHWA adopt RSI and use it 
at the network level to provide guidance on investment strategies.
    In response, FHWA notes that 23 U.S.C. 119(e)(4) requires inclusion 
of life-cycle cost analysis in the asset management plan, which the 
final rule addresses in its LCP provisions. The FHWA believes network-
level LCP is an appropriate method for identifying the needs of assets 
as they age in terms of identifying appropriate and cost-effective 
treatment strategies, and provides the input needed to determine 
investment strategies. This topic is addressed in the section-by-
section discussion of NPRM Sec.  515.005 (Life-cycle Cost Analysis). 
Further information on the topics raised by these comments also appears 
in the section-by-section discussion of NPRM Sec.  515.007(a)(2).
NPRM Section 515.007(b) (Final Rule Sections 515.7(g) and 515.17)
    Proposed section 515.007(b) described minimum standards for bridge 
and pavement management systems that State DOTs would use to analyze 
bridge and pavement data for the condition of Interstate highway 
pavements, non-Interstate NHS pavements, and NHS bridges. The FHWA is 
required by statute to establish the standards (23 U.S.C. 
150(c)(3)(A)(i)). In the final rule, for reasons described below, FHWA 
removed the standards from Sec.  515.7 and placed them in Sec.  515.17. 
Table 1 shows the changes in section numbers in the final rule. Twenty-
six submissions addressed proposed section 515.007(b).

[[Page 73227]]

In the NPRM, FHWA specifically requested comments on whether the 
proposed standards for bridge and pavement management systems are 
appropriate, and whether the rule should include any additional 
standards. The FHWA made a number of revisions to the standards in 
response to comments, as discussed below.
    The AASHTO and the DOTs of Connecticut and Maryland said that the 
assets that are subject to the minimum system requirements should be 
consistent with the assets that are covered by the second performance 
measure rulemaking, which addresses NHS bridge and pavement conditions. 
The AASHTO and Connecticut DOT recommended that FHWA include language 
in this section of the rule stating that if a State DOT voluntarily 
includes other asset classes in its asset management plan, a similar 
management system is not required for those other assets. Kentucky 
Transportation Cabinet stated that FHWA proposed an unreasonable level 
of oversight by establishing standards and governance for ``every'' 
aspect of a management system. Alaska DOT asked FHWA to remove from the 
rule any requirements for management systems.
    In response to these comments, FHWA notes that MAP-21 directed the 
Secretary, for the purpose of carrying out section 119, to establish 
minimum standards for States to use in developing and operating bridge 
and pavement management systems (23 U.S.C. 150(c)(3)(A)(i)). The 
standards identified in proposed Sec.  515.007(b) are key to developing 
bridge and pavement management systems that can produce analyses 
important to the development of condition targets and asset management 
plans.
    After considering the comments, FHWA recognizes that including the 
bridge and pavement management systems standards in the same section of 
the rule as the asset management plan process requirements could 
unnecessarily subject the State DOTs' systems to the certification 
process required under 23 U.S.C. 119(e)(6). The FHWA does not believe 
Congress intended the 23 U.S.C. 119(e)(6) process certification 
requirement to apply to State DOT implementation of the bridge and 
pavement management systems standards established pursuant to 23 U.S.C. 
150(c)(3)(A)(i). For this reason, in the final rule FHWA relocated the 
bridge and pavement management systems standards to a separate section 
(515.17). The FHWA will apply its normal oversight procedures to State 
DOT implementation of Sec.  515.17.
    The FHWA did retain, in Sec.  515.7(g) of the final rule, the 
requirement proposed in NPRM Sec.  515.007(b) that States use bridge 
and pavement management systems meeting the adopted standards to 
analyze the condition of NHS pavement and bridge assets required to be 
in asset management plans. Section 515.7(g) of the final rule makes it 
clear the use of these, or other, management systems is optional with 
respect to any other assets a State DOT elects to include in its asset 
management plan. The FHWA also added language to Sec.  515.7(g) to 
clarify that a ``best available data'' standard applies to the 
preparation of all asset management plans.
    Mississippi DOT commented on the discussion of proposed Sec.  
517.007(b) in the NPRM's preamble (80 FR 9231, 9233). This commenter 
asked FHWA what is meant by the term ``related highway systems.''
    The FHWA acknowledges this typographical error that should have 
read ``on related highway systems,'' meaning NHS and any other roads 
the State wants to include as part of its highway network (i.e., the 
State highway network). Because this term is not used in the final 
rule, no changes were required as a result of this comment.
    The AASHTO and the DOTs of Connecticut, Delaware, and Missouri said 
that FHWA should clarify that the minimum system requirements are at a 
system or asset class level, not at a project or asset sub-group level. 
The AASHTO and Connecticut DOT suggested the following wording: ``These 
bridge and pavement management systems are required at the system or 
asset class level, though they may include project level information at 
State option, and shall include, at a minimum, procedures and formats 
determined by the State for: . . .''
    In response, although an asset management plan involves a network-
level analysis, the management systems are used to provide information 
and decision support at both the network level and the project level. 
Network-level considers all assets within an asset class, while 
project-level considers singular bridges or pavement sections. The 
analyses performed by management systems can often be performed at both 
the network- and project- level, including multiyear needs 
determinations, and benefit-cost ratio over the life-cycle of assets. 
To be effective for the purposes of 23 U.S.C. 119, the management 
systems must include the ability to analyze the outcome of different 
network-level investment strategies and also make project-level 
recommendations in accordance with the selected strategy. Since 
management systems are often programmed with generalized information, 
rules, and procedures that can be applied to an asset class or asset 
sub-group as a whole, they may provide only preliminary project-level 
recommendations that need to be reviewed and refined as appropriate. 
Project-level preliminary engineering investigations and analyses often 
occur outside of a management system, providing additional information 
to support project-level decisionmaking. The FHWA made no change in the 
final rule as a result of these comments.
    Two State DOTs asked about the use of Federal funds to acquire or 
develop bridge and pavement management systems that would comply with 
the proposed rule. Tennessee DOT simply asked what Federal funding will 
be available to the State to purchase or develop these systems. 
California DOT requested that the rule indicate that Federal funding 
sources may be used to fund such systems and the collection of required 
data for them.
    In response, costs associated with development of a risk-based 
asset management plans and management systems are eligible for Federal-
aid funding. Specifically, these costs are eligible for both NHPP and 
Surface Transportation Program (STP) funds pursuant to 23 U.S.C. 
119(d)(2)(K) and 133(b)(8). These activities include data collection, 
maintenance, and integration and the cost associated with obtaining, 
updating, and licensing software and equipment required for risk-based 
asset management and performance-based management. (23 U.S.C. 
119(d)(2)(K), and 133(b)(8). State Planning and Research funds may also 
be used as appropriate. (23 U.S.C. 505(a)(3)).
    Georgia DOT asked for clarification regarding how the proposed 
minimum standards would affect States that already have a pavement/
bridge management system. Connecticut DOT said that the standards for 
bridge and pavement management systems need to contain items that are 
readily accessible in systems that States are already using or are 
available for purchase. The commenter added that, if the systems 
currently available are incapable of meeting the standards, then the 
standards need to be adjusted to meet the available system capability. 
In addition, the commenter said the timeline for compliance with the 
rule should account for the time needed to get bridge and pavement 
management systems functioning at the appropriate level. Illinois DOT 
said FHWA assumed that if a State has licensed the AASHTO

[[Page 73228]]

Ware Bridge Management software, the State has fully incorporated the 
operation of the bridge management system into its programming process. 
However, according to the commenter, many States have lagged far behind 
full implementation, because they have been waiting for the actual 
mandate requiring the use of a bridge management system. Therefore, the 
commenter said that States need time to fully test the functionality of 
this new software before they can begin to integrate it into their 
planning and programming processes.
    In response, FHWA acknowledges the comments and recognizes that 
some States may need to make changes to their management systems. The 
FHWA notes that pavement and bridge management systems focus on 
processes and analysis and include more than software (analysis tool). 
Purchasing and implementing software does not constitute compliance 
with the need for a management system. States need to implement bridge 
and pavement management systems that meet all of the requirements in 
Sec.  515.17 of the final rule, and integrate them into their pavement 
and bridge programs. It is important that States are able to undertake 
analysis to determine the costs to manage their pavements and bridges; 
the costs are dependent on various factors, including the assets 
condition and deterioration. Finally, nothing in the final rule limits 
the State DOT's ability to change, upgrade, or revise the software tool 
at any point as long as the programs remain data-driven and achieve the 
overall goals set by the legislation.
    The GTMA said that additional guidance needs to be developed to 
assist States in understanding which processes and technologies are 
acceptable for measuring the quality of bridge and pavement assets.
    In response, FHWA acknowledges this comment, but notes that 
addressing processes and technologies for measuring the condition of 
bridge and pavement assets is outside the scope of this rule. This is 
issue is addressed in the second performance measure rulemaking.
    The AASHTO and four State DOTs recommended the deletion of the word 
``formal'' from the second sentence in proposed Sec.  515.007(b), which 
would require formal procedures for meeting the systems management 
standards adopted in the rule.\28\ They said the term ``formal'' is not 
defined and could be open to varying interpretations, including by FHWA 
Division Offices. They stated that if FHWA defines ``formal'' as being 
a single software program that meets all the proposed requirements, 
then no ``formal'' bridge management system currently exists. The 
commenters recommended FHWA remove the word ``formal'' and instead 
include language referencing a process, procedure, or framework that is 
used to address the six requirements in proposed Sec.  515.007(b)(1)-
(6). According to these commenters, this change would provide State 
DOTs with flexibility in developing their own approaches to address the 
six requirements.
---------------------------------------------------------------------------

    \28\ AASHTO, Connecticut DOT, Delaware DOT, Missouri DOT, Oregon 
DOT.
---------------------------------------------------------------------------

    The FHWA clarifies that the term ``formal'' means to have a 
documented procedure. The intent is for States to have a documented 
procedure to follow standards established in the rule. This documented 
procedure must describe how the elements that are basic to all 
management systems (i.e., data collection, analysis, and reporting 
elements) lead to the outcome. It is important to realize that 
``management systems'' does not refer only to software; it is any 
system that includes the three elements mentioned above. A State DOT 
may use in-house analytical tools to analyze data and produce reports, 
as long as those tools meet the standards adopted in this rule. As a 
result of the comment, FWHA changed ``formal procedures'' to 
``documented procedures'' in Sec.  515.17 of the final rule.
    North Carolina and Texas DOTs commented generally that the outputs 
of bridge and pavement management systems need to be balanced with 
field knowledge, local conditions, and other considerations.
    The FHWA agrees that that pavement and bridge management systems 
need to include field knowledge, local conditions, and other policy 
conditions as part of the process. However, it is essential that these 
be handled in a systematic and transparent manner.
    Regarding forecasting of deterioration as specified in proposed 
Sec.  515.007(b)(2), Washington State DOT recommended that 
deterioration models for the asset class and sub-group would be a 
sufficient level of modeling to determine if a bridge meets the 
performance targets.
    In response, FHWA notes that deterioration models for the asset 
class and sub-group would be a sufficient level to determine if a 
bridge meets performance targets; however, the modeling needs to be 
able to compare deterioration as various investment strategies are 
implemented and evaluate their impacts on performance. In other words, 
the models could help determine how and where to expend bridge and 
pavement dollars to reach acceptable targets in a certain period of 
time. However, deterioration modeling also supports benefit-cost 
analysis over the life cycle of the assets, the identification of the 
most cost-effective work actions and work schedules for each bridge, 
and the outcome of performing different actions. Ultimately, this 
information is used in both network-level analysis and asset-level 
analysis and the identification of work actions and schedules. 
Deterioration models often can accommodate adjustments that account for 
an agency's historical data, observations, and expert judgment. The 
FHWA retains the proposed language in Sec.  515.17(b) of the final 
rule.
    In connection with the deterioration model provision in proposed 
Sec.  515.007(b)(2), Tennessee DOT said that the current Pontis \29\ 
software does not have deterioration forecasting capability. The agency 
added that although the next version will include that feature, the 
agency lacks experience and confidence in it.
---------------------------------------------------------------------------

    \29\ Pontis was an AASHTOWareTM Bridge Management 
software, which has been replaced by a new AASHTO product called 
(BrM).
---------------------------------------------------------------------------

    The FHWA recognizes that some software systems may not have the 
capability for deterioration modeling today; however, States have 
procedures to address this issue. In some cases, these processes may 
not be formalized, but formalizing the process is important as States 
develop their bridge strategies.
    Four commenters addressed the use of the term ``life-cycle benefit-
cost analysis,'' which appeared in proposed Sec.  515.007(b)(3). The 
AASHTO and the DOTs of Connecticut, Delaware, and Oregon said that FHWA 
should clarify if it meant to refer instead to LCCA. Maryland DOT and 
NEPPP asked FHWA to provide an example of what is meant by the term. 
Applied Pavement Technology, Inc., said that a pavement management 
system does not conduct a true life-cycle analysis and that conducting 
a benefit-cost analysis is sufficient for ensuring that optimal or 
near-optimal strategies are identified. This commenter suggested that 
``life-cycle'' be dropped from the term. Montana DOT asked FHWA to 
revise the rule to clarify whether States would need only to have a 
process to verify and consider LCCA, or whether LCCA would need to be 
specifically housed within the pavement management program.
    In response, the FHWA has modified the language in the final rule 
Sec.  515.17(c) to eliminate the phrase ``determining the life-cycle 
benefit-cost analysis'' and replace it with ``determining the benefit-
cost over the life cycle of assets.'' This

[[Page 73229]]

change is made to clarify that the requirement in this part of the rule 
is different than LCCA/LCP analysis. The component parts of the 
required bridge and pavement management systems, including the 
determination of a benefit-cost ratio over the life cycle of assets for 
the purpose of evaluating alternative actions, are tools State DOTs 
will use to produce information to feed into asset management plan 
analyses such as the LCP. Thus, the management systems must have the 
ability to determine the benefit-cost ratio of alternative actions over 
an appropriate life-cycle period.
    The AASHTO and Connecticut DOT asked FHWA to define the term 
``budget needs,'' which appears in proposed Sec.  515.007(b)(4). They 
said that the term should refer to the budget needed to achieve the 
targets established by the State DOT for NHS bridge and pavement 
condition (unless the State has voluntarily included additional assets 
in the plan).
    In response, FHWA does not believe there is a benefit to defining 
``budget needs'' in the rule. However, FHWA clarifies that the intent 
of the standards is that bridge and pavement management systems include 
the ability to identify short- and long-term budget needs for different 
network-level scenarios, ranging from the necessary annual budget to 
perform all actions that are beneficial (representative of an 
unconstrained budget) to the annual budget necessary to achieve minimum 
acceptable performance.\30\ Within this range is the budget necessary 
to achieve the performance measure targets established by a State DOT 
in accordance with the second performance measure rulemaking. 
Consistent with Sec.  515.17(e) of the final rule, management systems 
must include the ability to identify strategies that maximize overall 
program benefits by allocating funds and selecting work actions and 
projects within the limitations of available funding and performance 
objectives. Management systems must include the ability to demonstrate 
the benefits that can be gained from additional funding in terms of 
improved performance and reduced life-cycle costs. For these reasons, 
FHWA concludes the use of the term ``budget needs'' is appropriate, and 
that a range of budgets need to be considered in the analyses. The FHWA 
retained the language in Sec.  515.17(d) of the final rule.
---------------------------------------------------------------------------

    \30\ As noted above, network-level considers all assets within 
an asset class.
---------------------------------------------------------------------------

    The AASHTO and the DOTs of Connecticut and Oregon asked FHWA to 
replace the phrase ``the optimal strategies'' in proposed Sec.  
515.007(b)(5) with ``a strategy.'' They said the use of ``optimal 
strategies'' could result in FHWA second-guessing State DOTs in terms 
of what is ``optimal.'' These commenters also said ``strategy'' should 
be used instead of ``strategies,'' because a strategy can have more 
than one element and the rule should not require multiple strategies. 
California DOT said that the proposed rule would ask States to minimize 
cost, minimize risk, and maximize condition, objectives that often 
compete for available funding. This agency asked FHWA to provide a more 
precise definition of what an ``optimal strategy'' is with respect to 
these three objectives. Fugro Roadware also asked FHWA to provide more 
definition on what is meant by ``optimal strategies.'' It recommended 
that FHWA require a multiyear optimization, including costs and 
benefits of feasible treatments. The commenter added that it is 
important to ensure that the program to maintain pavements and bridges 
is designed with a process that is capable of reviewing all available 
scenarios and determining the potential costs and benefits. Hawaii DOT 
recommended revising proposed Sec.  515.007(b)(5) to include not just 
identifying, but also selecting projects; and to expressly state the 
process must result in outputs consistent with the objectives of the 
asset management plan.
    After considering these comments, FHWA made several changes to 
clarify the objectives of the provision. The FHWA believes that it is 
the role of the State to determine to what extent various factors such 
as risk, condition targets, etc., contribute to optimization of its 
program. Also, the management systems should include the computational 
ability to identify optimum work actions and programs of projects 
subject to multiple constraints, performance objectives, and the goal 
of minimizing long-term cost and maximizing overall program benefits. 
This requires a multiyear, network-level analysis (network-level 
considers all assets within an asset class). However, FHWA recognizes 
that there are many challenges in defining ``optimal strategies'' where 
minimizing cost, reducing risks, and meeting State DOT targets for 
asset condition each contribute toward an optimum strategy. Realizing 
the complexity involved in reaching an appropriate balance among 
various factors influencing optimal strategies, FHWA has replaced the 
proposed sentence, and eliminated the word ``optimum.'' Section 
515.7(e) of the final rule requires the systems to have the capability 
to determine strategies for ``identifying potential NHS pavement and 
bridge projects that maximize overall program benefits within financial 
constraints.'' The term ``financial constraints'' as used in this 
sentence means available funding.
    Connecticut DOT said that management systems should be able to do 
cross-asset and trade-off analysis, because such analyses are an 
important piece of enterprise-wide asset management. The FHWA agrees 
that cross-asset tradeoff-analysis can be beneficial for coordinating 
total highway programs, determining performance measure targets, and 
allocating funding among different asset classes. However, at this 
point in time, FHWA is not specifying that these procedures need to be 
included in bridge and pavement managements systems, although it will 
be necessary for agencies to consider trade-offs when allocating 
funding.
    The CEMEX USA, PCA, and ACPA said the pavement management systems 
should include all viable pavement solutions, both concrete and 
asphalt. They said that doing so would enhance uniformity among asset 
management plans, as well as increase the options that States will have 
in maintaining their pavement systems. The CEMEX USA said that 
evaluating all viable solutions can lead to competition between 
industries, which will lower a pavement's initial cost and life-cycle 
cost for the State.
    In response, FHWA emphasizes that a State DOT's management systems 
must address the requirements outlined in Sec.  515.17 of the final 
rule, but that State DOTs have full authority to determine the viable 
solutions for their pavements and bridges.
    The city of Wahpeton, ND said that the proposed Sec.  515.007(b) 
would require asset class models to meet all of the proposed 
requirements for management systems. The commenter said that this would 
not allow a local entity to take incremental steps in tracking and 
reporting asset management practices. According to the commenter, the 
proposed rule would discourage local entities from undertaking 
improvements to their asset management models.
    The FHWA notes part 515 requirements apply only to States. However, 
other asset owners are encouraged to follow these requirements to the 
extent possible so that they can manage their assets systematically.
NPRM Section 515.007(c) (Final Rule Section 515.9(k))
    Three commenters provided input on proposed Sec.  515.007(c), which 
would require the head of the State DOT to approve the asset management 
plan.

[[Page 73230]]

The AASHTO, Connecticut DOT, and Hawaii DOT recommended that FHWA move 
this requirement to Sec.  515.9.
    In response to these comments, FHWA has moved proposed Sec.  
515.007(c) to Sec.  515.9(k) of the final rule.
NPRM Section 515.009 (Final Rule Section 515.9)
    Section 515.009 of the NPRM contained the proposed provisions for 
the form and content requirements for State DOT asset management plans. 
Based on comments received in response to the NPRM, FHWA made a number 
of changes in the final rule, as discussed below. In addition, in 
response to changes to 23 U.S.C. 119(e) in the FAST Act, FHWA added new 
Sec.  515.9(m). The language of the new section is taken directly from 
the statutory provision. Section 515.9(m) provides States may include 
in their asset management plans consideration of critical 
infrastructure from among those facilities in the State that are 
eligible under 23 U.S.C. 119(c). The term ``critical infrastructure'' 
is defined in Sec.  515.5 of the final rule, using the definition 
provided in the FAST Act.
NPRM Section 515.009(a) (Final Rule Section 515.9(a))
    Proposed Sec.  515.009(a) would require State DOTs to treat assets 
voluntarily included in their asset management plans (i.e., assets 
other than NHS pavements and bridges) in the same manner as the 
required NHS pavement and bridge assets. The FHWA received 18 
submissions on this proposed requirement. Commenters included AASHTO, 
GTMA, NYSAMPO, and multiple State DOTs. All of these submissions said 
this provision would significantly discourage State DOTs from including 
other assets and asset classes in their required plans, and most of 
these commenters recommended that FHWA remove this requirement from the 
final rule.\31\ Among these commenters, AASHTO and several State DOTs 
recommended that FHWA change Sec.  515.009(a) by striking the second 
sentence and inserting the following: ``The State DOTs are encouraged 
to include other assets associated with public roads in its plan and if 
they do, are encouraged but not required with respect to such other 
roads to follow all asset management process and plan requirements in 
this part.''
---------------------------------------------------------------------------

    \31\ AASHTO; Alaska DOT; Atlanta Regional Commission; 
Connecticut DOT; DOTs of ID, MT, ND, SD, and WY (joint submission); 
GTMA; Massachusetts DOT; Minnesota DOT; Montana DOT; New Jersey DOT; 
New York Association of MPOs; New York State DOT; North Carolina 
DOT; North Dakota DOT; Oklahoma DOT; South Dakota DOT; Washington 
State DOT; Wyoming DOT.
---------------------------------------------------------------------------

    In response, FHWA has removed the second sentence. As a result, 
State DOTs are no longer required to apply all asset management process 
and requirements to other public roads included in the plan. Reduced 
requirements for other public roads are now included in Sec.  515.9(l). 
This is consistent with changes made in the final rule in response to 
similar comments on NPRM Sec. Sec.  515.007(a)(1)(i), 
515.007(a)(3)(vi), and 515.009(c).
    Several commenters expressed concern over the phrase ``improve or 
preserve the condition of the assets'' in Sec. Sec.  515.009(a) and 
515.009(f)(2). The AASHTO and several State DOTs said current and 
proposed levels of Federal and State funding are insufficient to permit 
States to achieve progress in achieving all national transportation 
policy goals or to ``improve or preserve the condition of the assets 
and improve the performance of the NHS,'' and may only enable State 
DOTs to manage the decline of assets.\32\ The NEPPP and several 
commenters asserted that declining asset condition and performance is 
an acceptable and realistic expectation, and a State effort to reduce 
or minimize the rate of decline is appropriate.\33\ Delaware DOT 
suggested rewording Sec.  515.009(a) to state that ``A State DOT shall 
develop and implement an asset management plan to achieve the State 
targets for asset condition and performance.'' Minnesota DOT said an 
asset management plan can be effective in providing the decision 
support tools necessary to ensure that both improving and declining 
asset conditions can be managed in a way that minimizes impacts on the 
traveling public. Oregon DOT said an asset management plan can help in 
making better decisions on the use of limited financial resources, but 
it cannot ensure that the level of available resources will be 
sufficient to avoid a decline in asset conditions or performance.
---------------------------------------------------------------------------

    \32\ Delaware DOT; Minnesota DOT; Texas, DOT; Oregon DOTs.
    \33\ Connecticut DOT, Maryland DOT, Minnesota DOT, Northeast 
Pavement Preservation Partnership, Oregon DOT, Texas DOT.
---------------------------------------------------------------------------

    The FHWA received similar comments in connection with NPRM 
Sec. Sec.  515.005 (Asset Management) and 515.007(a)(1). As in those 
cases, because of the statutory derivation of the phrase, FHWA retained 
``improve or preserve the condition of the assets'' in Sec. Sec.  
515.9(a) and 515.9(f) of the final rule.
NPRM Section 515.009(b) (Final Rule Section 515.9(b))
    Proposed Sec.  519.009(b) described the types of assets for which 
State DOTs would have to create a summary listing in their asset 
management plans. In addition to comments asking about the proposed 
treatment of certain elements of highways and bridges, many commenters 
expressed concerns about the proposed requirements for State DOTs to 
address all NHS pavements and bridges, regardless of ownership. The 
issues relating to this latter set of concerns are discussed in Section 
V, Asset Management Plan Treatment of NHS Pavements and Bridges Not 
Owned by State DOTs. The detailed comments on proposed Sec.  
515.009(b), and FHWA's responses, appear below.
    Several commenters, including AASHTO and several State DOTs, argued 
that States should not be held responsible for sections of the NHS that 
are not under their direct control. The State DOTs of Alaska, Maryland, 
Mississippi, and Tennessee opposed the requirement that States be held 
responsible for sections of the NHS that are not part of the State 
system, because the State DOT does not have jurisdiction to affect the 
planning or programming of projects on non-State DOT maintained NHS 
routes. Tennessee DOT said all accountability for these routes should 
fall on the jurisdiction responsible for them. Mississippi DOT said 
FHWA should either: (1) Not require the State DOT to include assets in 
the asset management plan for non-State DOT owned assets, or (2) 
provide provisions that local governmental jurisdictions develop and 
provide an asset management plan directly to FHWA for NHS routes under 
their jurisdiction. The NYSAMPO expressed concern about making State 
DOTs responsible for the entire NHS within State boundaries, regardless 
of ownership. Maryland DOT addressed this same issue more generally, 
asking that FHWA include language in the final rule that recognizes the 
reality that a State DOT may not have the authority to dictate the 
spending priorities or participation of non-State agencies. Oklahoma 
DOT recommended that FHWA require States only to make a good faith 
effort to obtain necessary data from other NHS owners.
    In response, FHWA acknowledges States may face challenges in 
developing and implementing an asset management plan that includes NHS 
pavements and bridges owned by others. The FHWA anticipates State DOTs 
will need to consult the relevant entities (e.g., MPOs, State DOTs, 
local transportation agencies, Federal Land

[[Page 73231]]

Management Agencies, tribal governments) as they consider factors 
outside of their direct control that could influence investment 
decisions. The statutory language requires States to develop asset 
management plans for the NHS pavements and bridge assets. No other 
entities are identified in the legislation to share the responsibility 
of developing a risk-based asset management plan for the NHS. In 
addition, FHWA has analyzed ownership for each State and found that the 
majority of the States own high percentages of assets on the NHS. While 
FHWA appreciates the comments, there is no provision in 23 U.S.C. 
119(e) that would permit exclusion of NHS pavements or bridges not 
owned by the State.
    The State DOTs of Maryland, Oregon, and Washington State said that 
FHWA should clarify the expected role and responsibilities of the 
owners of those NHS facilities that are not directly under State DOT 
control, such as MPOs, local jurisdictions, transportation 
stakeholders, and other interested parties in the development and 
implementation of an asset management plan. California DOT said 
communications with external transportation partners should be 
encouraged in the final rule. The NYSAMPO and Washington State DOT 
stated that MPOs should be involved, because they are responsible for 
planning and managing investment in the entire transportation system in 
their region, and they should understand how the data will be used to 
make investment funding decisions, prioritize projects, and preserve 
NHS assets. The city of Wahpeton, ND, said the State does not oversee 
the city's financial ``workings'' and added that compiling multiple 
local financing methods into a cohesive ``one size fits all'' document 
would risk oversimplifying local complexities in managing non-State-
owned NHS roadways.
    In response, FHWA points out 23 U.S.C. 119(e) does not distinguish 
between State-owned NHS facilities and NHS facilities owned by others. 
The FHWA agrees that MPOs should be involved and encourages their 
involvement. However, because the asset management statute specifies 
the State as the responsible entity, FHWA believes it is up to the 
State to develop the necessary relationships with other owners to 
permit the State to successfully develop its required asset management 
plan (see discussion under NPRM Sec.  515.007(f)). In the event that 
other NHS owners decide to develop their own asset management plans, 
the details of how these plans should be integrated into the State 
DOT's NHS asset management plan should be developed by the involved 
entities.
    The NYSAMPO said that making the State DOT responsible for the 
entire NHS regardless of ownership may skew the entire asset management 
process, and the commenter proposed that the rule specify a cooperative 
approach to target-setting among all the NHS owners in a State. North 
Carolina DOT agreed that new processes for coordination would be 
required, and recommended that the State DOT set targets and then seek 
concurrence from the MPOs. Mississippi DOT asked how States would 
determine reasonable performance targets for routes that are not 
maintained by the State DOT. North Carolina DOT stated that, for its 
system, it makes the most sense for the State DOT to set targets and 
seek concurrence from the MPOs.
    In response, FHWA clarifies that requirements relating to setting 
State and MPO performance targets under 23 U.S.C. 134 and 23 U.S.C. 
150(d) are outside the scope of this rulemaking. The FHWA is 
establishing those requirements in separate rulemakings for performance 
measures and planning.\34\
---------------------------------------------------------------------------

    \34\ The FHWA has undertaken three separate rulemakings to 
implement performance management requirements. The first is 
``National Performance Management Measures; Highway Safety 
Improvement Program'' (RIN 2125-AF49); the second is ``National 
Performance Management Measures; Assessing Pavement Condition for 
the National Highway Performance Program and Bridge Condition for 
the National Highway Performance Program'' (RIN 2125-AF53); the 
third is ``National Performance Management Measures; Assessing 
Performance of the National Highway System, Freight Movement on the 
Interstate System, and Congestion Mitigation and Air Quality 
Improvement Program '' (RIN 2125-AF54). The FHWA, together with the 
Federal Transit Administration, recently completed rulemaking on 
transportation planning, ``Statewide and Nonmetropolitan 
Transportation Planning; Metropolitan Transportation Planning (FHWA 
RIN 2125-AF52).
---------------------------------------------------------------------------

    Several commenters expressed concern about the amount of State 
resources that would be required for data collection (which would be 
the foundation for the summaries required by Sec.  515.009(b)). 
Mississippi DOT said the cost of collecting data on NHS routes not 
owned by a State will result in fewer dollars available to maintain 
critical infrastructure, specifically in the form of substantial 
coordination with local government and MPOs and investment of man-
hours. This commenter said that, in most cases, the historical 
performance data on routes that are not maintained by the State DOT are 
not available for a true gap analysis. The agency also said that common 
practice for non-State maintained NHS routes is to evaluate condition 
through sampling procedures, not through full coverage evaluation.
    The FHWA acknowledges the extent of effort involved with network-
wide data collection for developing a risk-based asset management plan. 
As previously stated, the asset management statute, 23 U.S.C. 119(e), 
requires the States to develop and implement asset management plans for 
the NHS pavements and bridges. Nothing in the statute authorizes FHWA 
to exempt those parts of the NHS not owned by States from the 
requirements of part 515. State DOTs have an obligation under the asset 
management rule to gather the data needed for the required analyses, 
and to use the best available data. While it may take some time for 
State DOTs to develop mature data-gathering capabilities for asset 
management, there are existing and developing resources State DOTS may 
use for this purpose. These include existing State and local data for 
NHS pavements and bridges, the existing National Bridge Inspection and 
Highway Performance Monitoring System, and the data State DOTs will 
collect to fulfill the section 150 performance management requirements 
for NHS pavements and bridges.
    New Jersey DOT suggested that FHWA allow States more time to 
compile the data that would be required by the rule (e.g., financial 
data, funding plans, and performance data).
    In response, FHWA notes that the final rule contains revised 
compliance timelines and FHWA believes that the final rule provides for 
sufficient time to compile data. The time frame for asset management 
development and submission is discussed in the section-by-section 
discussion of NPRM Sec.  515.011(a).
    With regard to proposed Sec.  515.009(b)'s requirement for a 
summary listing of pavements on the Interstate System, pavements on the 
NHS (excluding the Interstate), and bridges on the NHS, AASHTO and 
several State DOTs recommended that FHWA clarify in the final rule that 
the assets required to be included in the asset management plans are 
only those for which State DOTs must establish targets under 23 CFR 
490.\35\ Washington State DOT asked if the terms ``Interstate highway 
pavements'' and ``non-Interstate NHS pavement'' would include ramps 
that enter or exit the NHS. This commenter also asked if bridges at the 
State's ferry terminals

[[Page 73232]]

should be included in its asset management plan.
---------------------------------------------------------------------------

    \35\ AASHTO, Connecticut DOT, Maryland DOT, Minnesota DOT, 
Missouri DOT, Oregon DOT, Northeast Pavement Preservation 
Partnership.
---------------------------------------------------------------------------

    In response, FHWA agrees with the commenters that more clarity is 
needed on these issues. The FHWA modified the final rule by defining 
the term ``NHS pavements and bridges'' in Sec.  515.5. The term ``NHS 
pavements and bridges'' is defined for purposes of this rule to mean 
Interstate System pavements (inclusion of ramps that are not part of 
the roadway normally traveled by through traffic is optional); NHS 
pavements (excluding the Interstate System) (inclusion of ramps that 
are not part of the roadway normally travelled by through traffic is 
optional); and NHS bridges carrying the NHS (including bridges that are 
part of the ramps connecting to the NHS). The FHWA used the added 
definition in final rule Sec.  515.9(b), which requires a summary 
listing of NHS pavements and bridges. As a result of these changes, the 
assets States must include in the summary listing align well with the 
assets for which States must collect pavement and bridge data under 23 
CFR part 490. The FHWA made similar changes in Sec.  515.9(d)(2)-(3). 
With respect to ferry systems, all bridges carrying the NHS must be 
included in the asset management plan, including bridges that are at 
the terminus of the NHS connecting to the ferry system. Many types of 
ramps are excluded under the adopted definition of NHS pavements and 
bridges, but FHWA notes all ramps are assets, and FHWA encourages 
States to include them in their asset management plans even when not 
required to do so.
    In the NPRM, FHWA asked if States should be required to include 
tunnels in their asset management plans. The West Piedmont Planning 
District Commission supported the inclusion of tunnels in State asset 
management plans (e.g., include tunnel assets and condition data in the 
summary listings) because the structural vulnerability or failure of 
tunnels can have catastrophic consequences to the safety of the 
traveling public and commerce. However, AASHTO and multiple State DOTs 
said FHWA should not yet require tunnels to be included.\36\ The AASHTO 
and the DOTs of Connecticut and Tennessee stated that the rule should 
provide that tunnels need not be included in asset management plans 
until sometime after the effective date of anticipated new tunnel 
inspection rules. The AASHTO said that until those rules are finalized, 
financial plans and investment strategies with respect to tunnels would 
be ``quite speculative.'' Michigan DOT said inspection results, 
inventories, forecasting models, and other analytical tools for tunnels 
are not nearly as mature as those for bridges. Delaware DOT stated that 
the inclusion of tunnels should be optional, as MAP-21 only requires 
bridges and pavements to be included.
---------------------------------------------------------------------------

    \36\ AASHTO, Connecticut DOT, Delaware DOT, Maryland DOT; 
Michigan DOT, Oregon DOT; South Dakota DOT; Tennessee DOT, 
Washington State DOT.
---------------------------------------------------------------------------

    After considering the comments above and 23 U.S.C. 119(e)(4), FHWA 
has determined that inclusion of tunnels in a State's asset management 
plan is optional at this point.
NPRM Section 515.009(c) (Final Rule Section 515.9(c))
    Twenty-one submissions addressed proposed Sec.  515.009(c), which 
encourages State DOTs to include all other NHS assets within the NHS 
right-of-way in their plans, and provides that if a State DOT decides 
to include other NHS infrastructure assets (e.g., tunnels, ancillary 
structures, signs) in its asset management plan, the State DOT would 
have to evaluate and manage those assets consistent with the provisions 
of part 515. As proposed, Sec.  515.009(c) also stated the same 
requirements would apply to assets on non-NHS public roads. This 
language was similar to proposed language for Sec.  515.009(a), which 
would have required the State DOT to apply all requirements in part 515 
to any other public roads the State DOT elected to include in its asset 
management plan. Most comments on Sec.  515.009(c) \37\, like the 
comments on proposed Sec.  515.009(a) \38\, said this provision would 
discourage State DOTs from voluntarily including additional assets in 
their asset management plans. Many commenters encouraged FHWA to 
eliminate these requirements from the rule.
---------------------------------------------------------------------------

    \37\ AASHTO; Alaska DOT; Connecticut DOT; Delaware DOT; DOTs of 
ID, MT, ND, SD, and WY (joint submission); Kentucky Transportation 
Cabinet; Massachusetts DOT; Minnesota DOT; Mississippi DOT; Montana 
DOT; New Jersey DOT; Oklahoma DOT; Oregon DOT; South Carolina DOT; 
South Dakota DOT; Washington State DOT; Wyoming DOT.
    \38\ AASHTO; Alaska DOT; Atlanta Regional Commission; 
Connecticut DOT; DOTs of ID, MT, ND, SD, and WY (joint submission); 
GTMA; Massachusetts DOT; Minnesota DOT; Montana DOT; New Jersey DOT; 
New York Association of MPOs; New York State DOT; North Carolina 
DOT; North Dakota DOT; Oklahoma DOT; South Dakota DOT; Washington 
State DOT; Wyoming DOT.
---------------------------------------------------------------------------

    Delaware DOT said the proposed requirements would result in States 
developing one asset management plan to meet the requirements of the 
regulations (including only pavements and bridges) and a second asset 
management plan to manage other infrastructure assets. Several of these 
commenters urged FHWA to encourage, but not require, States to comply 
with the rule's asset management process and plan requirements if they 
elect to include other NHS assets in their plans.\39\ The NYSAMPO said 
imposing the same requirements for all assets included in the asset 
management plan would present State DOTs with a disincentive to go 
beyond the minimum and proposed that FHWA develop a less prescriptive 
approach to managing assets off the NHS. The AASHTO and multiple State 
DOTs asked FHWA to clarify in the final rule that States are free to 
develop asset management initiatives for assets not covered by the FHWA 
rule and are free to address them any way that they desire for their 
own purposes.\40\
---------------------------------------------------------------------------

    \39\ AASHTO, Connecticut DOT, Mississippi DOT, Missouri DOT.
    \40\ AASHTO; Connecticut DOT; Alaska DOT; Atlanta Regional 
Commission; DOTs of ID, MT, ND, SD, and WY (joint submission); GTMA; 
Massachusetts DOT; Minnesota DOT; Montana DOT; New Jersey DOT; New 
York Association of MPOs; New York State DOT; North Carolina DOT; 
North Dakota DOT; Oklahoma DOT; South Dakota DOT; Washington State 
DOT; Wyoming DOT.
---------------------------------------------------------------------------

    Tennessee DOT stated that the body of the proposed rule only refers 
to pavements and bridges and asked if FHWA intends the management 
strategies and analysis to also apply to the other items listed in the 
proposed definition of ``asset.'' The GTMA stated that it is difficult 
to understand how an effective asset management plan could exclude 
significant assets utilized on the NHS, such as tunnels, signs, other 
roadside hardware, and pavement markings. This commenter raised the 
possibility of providing additional financial incentives for States 
that develop more comprehensive asset management plans. Similarly, ASCE 
urged all States to include in their plans other NHS assets, such as 
tunnels and other safety-related assets, in order to make the plans 
more comprehensive NHS management plans.
    As discussed in the section-by-section discussion of NPRM Sec.  
515.009(a), after considering the comments on this topic, FHWA revised 
the final rule. Section 515.9(c) of the final rule encourages States 
DOTs to include in their asset management plans all other NHS assets 
located within the NHS right-of-way. The FHWA also encourages State 
DOTs to voluntarily include other public roads assets. However, FHWA 
removed the requirement for asset management plans to subject 
discretionary assets to the same requirements applicable to NHS 
pavement and bridge assets. Instead, in Sec.  515.9(l) of the final 
rule,

[[Page 73233]]

FHWA adopted reduced requirements applicable to such discretionary 
assets.
    Under the reduced requirements, if a State DOT includes 
discretionary assets (i.e., assets other than NHS pavements and 
bridges), the State DOT does not have to apply the plan development 
processes in Sec.  515.7 to those discretionary assets. The State DOT 
has discretion to determine the appropriate performance targets and 
measures, as well as the level of comprehensiveness of the asset 
management analyses, for those assets. The State DOT must describe the 
asset management decisionmaking framework used for those discretionary 
assets. At a minimum, the State DOT must address the items listed in 
Sec.  515.9(l)(1) through (7), at a level of effort consistent with the 
State DOT's needs and resources. The required items are: (1) A summary 
listing of the discretionary assets, including a description of asset 
condition; (2) the State's performance measures and condition targets 
for the discretionary assets; (3) performance gap analysis; (4) life-
cycle planning; (5) risk analysis; (6) financial plan; and (7) 
investment strategies for managing the discretionary assets.
    The FHWA believes it may be useful to provide an example of a less 
rigorous analysis that a State DOT could perform, following the asset 
management framework for discretionary assets in Sec.  515.9(l) of the 
final rule. Assume a State DOT decides to include all signs on State 
roads in its asset management plan. The sign inventory indicates that 
there are 10,000 signs that range in age from new to 15 years old, but 
resources are not available to undertake a condition assessment 
annually. However, with input from maintenance and other staff, it has 
been determined that the State should replace the signs every 12 years 
because, beyond 12 years, there are risks as signs begin losing 
reflectivity and cannot be seen satisfactorily in all weather 
conditions. Therefore, the State DOT determines that the whole life of 
its signs is 12 years. The only maintenance activity pertaining to 
signs is to wash the signs once a year after winter time. The risks 
associated with signs are identified as crashes, public confusion due 
to missing signs or lack of visibility of worn signs, and public 
complaints. Based on input from the maintenance office, the cost to 
replace 1/12 of the signs annually is known, and this information 
should be added to the asset management financial plan. This type of 
analysis could be broken down further by the type of sheeting, 
manufacturer, or which direction the sign was facing, if the State DOT 
wished to do so.
    New Jersey DOT asked FHWA to clarify that a State can include in 
its asset management plan bridges over NHS roadways without having to 
include the associated roadway at either end of the bridge. A private 
citizen asserted that asset management plans need to identify the 
maintenance needed to provide for pedestrian and bicycling circulation 
and safety.
    In response, FHWA notes that if States decide to include non-NHS 
bridges they are not required to include the roadways at either end of 
these bridges because the said roadways are not considered to be a part 
of the bridge structure. With regard to the maintenance needed to 
provide for pedestrian and bicycling circulation and safety, FHWA 
acknowledges this comment and believes that infrastructure assets must 
be maintained appropriately to ensure safe circulations.
NPRM Section 515.009(d)(1) (Final Rule Section 515.9(d)(1))
    Six submissions addressed Sec.  515.009(d)(1), which requires State 
asset management plans to include a discussion of asset management 
objectives. The GTMA supported the provision as proposed. The AASHTO 
and the DOTs of New Jersey and North Dakota asked FHWA to remove the 
phrase ``desired state of good repair'' from Sec.  515.009(d)(1) and 
everywhere else it appears in the proposed rule. Tennessee DOT asked 
who would define the desired state of good repair, and added that if it 
is FHWA, then FHWA should define the term. Alaska DOT asked FHWA to 
remove the last sentence from Sec.  515.009(d)(1). The sentence 
requires asset management plans to be ``consistent with the purpose of 
asset management, which is to achieve and sustain the desired state of 
good repair over the life cycle of the assets at a minimum practical 
cost.''
    In response, FHWA notes that the regulatory language is consistent 
with the definition of asset management in 23 U.S.C. 101(a)(2). The 
FHWA believes State DOT asset management plan objectives must be 
consistent with this purpose, as stated in the rule. Nonetheless, 
consistent with the discussion under NPRM Sec.  515.005 (Desired State 
of Good Repair), FHWA also believes ``desired state of good repair'' is 
tied to States' goals and should be defined by the State DOTs. As a 
result, FHWA retained the proposed rule language in Sec.  515.9(d)(1) 
of the final rule, but looks to State DOTs to establish the meaning of 
``desired state of good repair'' in their jurisdictions.
NPRM Section 515.009(d)(2) (Final Rule Section 515.9(d)(2))
    Twenty-four submissions addressed Sec.  515.009(d)(2), which would 
require State asset management plans to include a discussion of asset 
management measures and targets, including those established pursuant 
to 23 U.S.C. 150 for pavements and bridges on the NHS. Many of these 
commenters, including AASHTO, NEPPP, and multiple State DOTs, said the 
rule should be revised to clarify that targets may call for improving, 
constant, or declining conditions and performance.\41\ They said 
current and proposed funding levels may be insufficient to stop the 
decline of the conditions of key assets. Montana DOT said all of the 
rules related to national performance management should clearly 
describe that individual States are responsible for setting their 
performance targets, and that these targets may reflect declining 
conditions.
---------------------------------------------------------------------------

    \41\ AASHTO; Alaska DOT; Connecticut DOT; DOTs of ID, MT, ND, 
SD, and WY (joint submission); Maryland DOT; Mississippi DOT; 
Missouri DOT; Montana DOT; New Jersey DOT; New York State DOT; 
Northeast Pavement Preservation Partnership; South Dakota DOT; 
Vermont Agency of Transportation; Washington State DOT; Wyoming DOT.
---------------------------------------------------------------------------

    The FHWA acknowledges these comments, but notes the issue of target 
setting is not within the scope of this rule. The FHWA is addressing 
target setting in the second performance measure rulemaking. The topic 
of declining asset condition is further addressed under the section by 
section discussion of Sec.  515.7(a)(1).
    The FP2, NEPPP, and several State DOTs said the proposed rule, in 
conjunction with the second performance measure rulemaking for bridge 
and pavement condition, would promote a ``worst-first'' approach to 
asset management.\42\ Oregon DOT said the rule should be revised to 
clarify the intent of managing using a preservation approach, in which 
extension of service life is measured, or to confirm a ``worst-first'' 
approach is intended, which it said is not consistent with a 
``financially responsible manner.''
---------------------------------------------------------------------------

    \42\ FP2; Maryland DOT; Michigan DOT, Mississippi DOT; New York 
State DOT; Oregon DOT; Oregon DOT Bridge Section; Northeast Pavement 
Preservation Partnership.
---------------------------------------------------------------------------

    In response, FHWA notes that the second performance measure 
rulemaking establishes requirements for State and MPO target setting. 
While FHWA understands State's fears of a ``worst-first'' management 
approach, FHWA believes that States will have the

[[Page 73234]]

ability to apply sound asset management principles, including 
preservation activities, to planning and programming even with minimum 
condition requirements under part 490. The FHWA agrees that meeting all 
targets is not an easy task. However, a financial plan can help the 
State DOT find the right balance amongst various investment strategies, 
so the targets are met. States should use their financial plan as a 
tool to decide if they need to make adjustments to their targets so 
that the funding distribution does not have an adverse impact on other 
assets. The FHWA did not make any changes to the final rule in response 
to these comments.
    Proposed Sec.  515.009(d)(2) allows State DOTs to include measures 
and targets the State has established for the NHS beyond those 
established pursuant to 23 U.S.C. 150. Mississippi and North Carolina 
DOTs said there would be little or no incentive for States to exceed 
the minimum requirements of the proposed rule and include their own 
measures and targets. Texas DOT asserted that assets cannot be managed 
for two different targets because that could lead to different fund 
allocations.
    In response, FHWA clarifies that State DOTs are not required to 
exceed the minimum requirement, which is to include asset management 
measures and State DOT targets for NHS pavement and bridges, including 
those established pursuant to 23 U.S.C. 150. Inclusion of other State 
specific measures and targets provides States with an opportunity to 
address their unique needs within one single plan. To clarify the 
intent of Sec.  515.9(d)(2), FHWA revised the first sentence of 
paragraph (d)(2) to refer to ``State DOT targets for asset condition.'' 
The FHWA also revised the sentence to clarify the requirement is 
limited to State DOT measures and targets for NHS pavements and 
bridges.
    Oregon DOT said the final rule should provide additional 
flexibility to States in the use of the performance measures and 
targets they have developed and proven. The agency stated that it has 
developed its own internal bridge and pavement measures and processes, 
and it believes that its approach to measuring and evaluating bridges 
is superior to the proposed national performance measure. The agency 
added that the inclusion of State-developed performance measures could 
provide useful comparisons or provide ``best practices'' examples for 
other State DOTs. South Dakota DOT agreed, recommending that the rule 
should allow States to continue to use existing, established management 
systems that have a proven track record and to supplement those systems 
with the national performance measures. This agency asserted that 
revamping its asset management systems to prioritize the national 
performance measures would create a significant amount of work and 
would cause its existing asset management system to be less effective. 
Similarly, South Carolina DOT asserted that most State DOTs would 
continue to use their existing performance measures for the condition 
of pavements and bridges, and the cost of complying with the proposed 
rule could be ``disproportionate.'' The NEPPP and Maryland DOT asked 
what a State DOT would do if its own measures conflict with the 
measures established pursuant to 23 U.S.C. 150.
    In response to these comments, FHWA notes that, even though some 
State DOTs feel that their own approach is superior to national 
performance measures, they are still required by 23 U.S.C. 150 to set 
targets for national performance measures established in 23 CFR part 
490. However, in this asset management rule, State DOTs have been given 
flexibility to include their own measures and targets as well. States 
are free to maintain and use their own measures in whatever way they 
wish as long as they comply with the part 515 and part 490 
requirements.
    Oregon DOT criticized the proposed rule for excluding from 
consideration in State asset management plans the national performance 
measures to be established for the Interstate and the NHS. This agency 
said that excluding these measures would reduce the value and benefit 
of developing and using the proposed asset management plan. Tennessee 
DOT said this proposed requirement seems contradictory to the proposed 
rule's definition of ``performance of the NHS,'' which specifies that 
the term does not include the performance measures under 23 U.S.C. 
150(c)(3)(A)(ii)(IV)-(V).\43\
---------------------------------------------------------------------------

    \43\ Those provisions require national performance measures for 
performance of the Interstate System and performance of the NHS 
(excluding the Interstate System. The FHWA is establishing those 
measures through the third performance measure rulemaking, 
``National Performance Management Measures; Assessing Performance of 
the National Highway System, Freight Movement on the Interstate 
System, and Congestion Mitigation and Air Quality Improvement 
Program'' (RIN 2125-AF54).
---------------------------------------------------------------------------

    In response to these comments, FHWA notes Sec.  515.9(d)(2) 
requires the State DOTs to include measures and targets related to 23 
U.S.C. 150(c)(3)(A)(ii)(I)-(III). Those are the measures and targets 
relating to the condition of NHS pavements and bridges. The measures 
and targets FHWA has not required State DOTs to include in their asset 
management plans are those in 23 U.S.C. 150(c) relating to performance 
of the Interstate System or performance of the NHS (excluding the 
Interstate System). The FHWA does not believe there is a contradiction 
in this approach. The asset management rule does not exclude the NHS 
performance as it relates to physical assets. As discussed in Section 
V, System Performance, Performance Measures and Targets, and Asset 
Management Plans, and in the section-by-section discussion of NPRM 
Sec.  515.007(a)(2), NHS performance is addressed through the asset 
management analyses, particularly the risk and gap analyses, as well as 
through other performance-related activities. For example, to improve 
safety, the SHSP might have identified what physical changes may be 
necessary to improve the NHS performance. These changes, when 
substantial, are incorporated into asset management plans to account 
for their impact on future condition targets and maintenance cost.
    Hawaii DOT commented that FHWA did not discuss in the NPRM when 
targets would be established or when the State DOT would be 
establishing a desired level of performance and state of good repair.
    The FHWA notes the timing for 23 U.S.C. 150 targets is addressed in 
the second performance measure rulemaking. The FHWA has eliminated the 
term ``desired level of performance'' from the final rule, and the term 
``state of good repair'' is discussed in the section-by-section 
discussions of NPRM Sec.  515.005 (Desired State of Good Repair) and 
NPRM Sec.  515.007(a)(1).
    Texas DOT asked whether States would need to include long-term 
targets in addition to the proposed 2-year and 4-year targets developed 
for the national performance measures.
    The FHWA notes that asset management is a long-term plan to achieve 
long-term objectives; therefore, setting long-term targets is inherent 
in developing asset management plan. As FHWA stated in the preamble of 
the NPRM for the second performance measure rulemaking, ``[i]t is 
important to emphasize that established targets (2- year target and 4-
year target) would need to be considered as interim conditions/
performance levels that lead toward the accomplishment of longer term 
performance expectations in the State DOT's long-range statewide 
transportation plan and NHS asset management plans.'' (80 FR 326, 342). 
The 2-year target and 4-year targets developed pursuant to 23 U.S.C. 
150 are not substitutes for long-term targets.

[[Page 73235]]

NPRM Section 515.009(d)(3) (Final Rule Section 515.9(d)(3))
    Section 515.009(d)(3) proposed a requirement that State asset 
management plans must include a discussion of the summary listing of 
the State's Interstate pavement assets, non-Interstate NHS pavement 
assets, and NHS bridge assets. This provision also requires the plan to 
include a description of the condition of those assets. The provision 
applies to the above-mentioned assets regardless of ownership. The GTMA 
supported the provision as proposed. The AASHTO and several State DOTs 
said it should not be the responsibility of a State DOT to include 
information about assets that they do not own and asked FHWA to limit 
this requirement only to the assets owned by State DOTs.\44\
---------------------------------------------------------------------------

    \44\ AASHTO, Alaska DOT, Arkansas DOT, Connecticut DOT, New 
Jersey DOT, Mississippi DOT.
---------------------------------------------------------------------------

    In response, FHWA revised the first sentence of the section to read 
``A summary description of the condition of NHS pavements and bridges, 
regardless of ownership.'' The changes simplify and clarify the 
provision, and align with 23 U.S.C. 119(e).
    Texas DOT asked FHWA to provide more details on what State DOTs 
would need to include in the summary listings. South Dakota DOT 
recommended that FHWA provide an example of a summary listing.
    In response, FHWA explains that the summary listing must include 
the best available quantity and condition data for NHS pavements and 
bridges. At a minimum, State DOTs can look to the data required by 23 
CFR part 490. The FHWA will not provide a specific format for the 
summaries, or specify content other than that addressed in Sec.  
515.9(b)(1) through (3) of the final rule. State DOTs may include other 
condition data they feel is applicable to their asset management plans. 
Summary condition descriptions can be developed in various ways, and 
there are already examples of draft asset management plans available 
that show how States are addressing the summaries (see FHWA Asset 
Management Web site at https://www.fhwa.dot.gov/asset/plans.cfm). The 
FHWA made no changes to the rule in response to these comments.
    South Dakota DOT recommended deleting ``where applicable, the 
description of condition should be informed by the evaluation required 
under Sec.  515.019.''
    In response, FHWA looks to the purpose of 23 U.S.C. 119(e), the 
asset management statute, and the purpose of MAP-21 section 1315(b), 
which mandates the evaluations. After considering the comment, FHWA 
decided to retain the requirement for State DOTs to take information 
from the evaluations into account when preparing the condition 
descriptions required under Sec.  515.9(d)(3). Information from the 
evaluations would be important components of an overall condition 
description. The FHWA has revised the sentence in question to update 
the reference to the final location of the 1315(b) regulations, in 23 
CFR part 667.
    In connection with the provision in proposed Sec.  515.009(d)(3) 
(fifth sentence) regarding the collection of data from other NHS 
owners, Hawaii DOT recommended changing the sentence to include data 
collection for non-NHS assets and to qualify the sentence with the 
phrase ``as applicable.''
    In response, FHWA supports the concept of promoting collaborate and 
cooperative data collection efforts for all asset. However, the 
inclusion of non-NHS assets in the State DOT asset management plan is 
optional under part 515. Therefore, State DOTs have discretion about 
whether to include non-NHS assets in their plan, and how to coordinate 
with non-NHS asset owners. For NHS bridge and pavement assets, the 
collection of data is not optional, so FHWA has not adopted the 
suggestion to qualify the obligation by adding ``as applicable'' to the 
sentence. The FHWA retained the proposed rule language on coordinated 
and collaborative data collection, but has relocated the language to 
Sec.  515.7(f) in the final rule because of its connection to plan 
development processes. The relocated language requires State DOT asset 
management plan development processes to address how the State DOT will 
obtain the necessary data from other NHS owners in a collaborative and 
coordinated effort. This provision recognizes State DOTs will need to 
determine what process for data collection works best in their 
individual situations.
    Consistent with the decision to address requirements for 
voluntarily included assets in Sec.  515.9(l), FHWA removed the third 
sentence in NPRM Sec.  515.009(d)(3), on the treatment of voluntarily 
included assets.
NPRM Section 515.009(d)(5) (Final Rule Section 515.9(d)(5))
    Two submissions addressed proposed Sec.  515.009(d)(5), which 
requires State asset management plans to include a discussion of LCCA. 
Washington State DOT said it would probably not be able to ascertain 
deterioration rates or conduct LCCA for non-State owned assets within 
the 18-month phase-in timeframe outlined in proposed Sec.  515.011. The 
agency said that it believes the intent of MAP-21 is for State DOTs to 
meet minimum requirements and begin making progress over the first 4 
years after rulemaking to fully satisfy the requirements of proposed 
Sec.  515.009.
    In response, FHWA recognizes a lack of previous years' condition 
data would be a major challenge in determining deterioration rates. In 
cases where the State DOT does not have enough data, the State DOT 
should use engineering judgment to determine deterioration rates. 
However, FHWA expects that after three data reporting cycles under 23 
CFR part 490, State DOTs will be able to develop preliminary 
deterioration models to conduct LCP. In addition, FHWA adopted an 
implementation schedule for this rule intended in part to provide State 
DOTs with time to gather data, and develop the needed processes and 
analytical capabilities (see discussion in Section V, Implementation 
Timeline for Asset Management Requirements).
    The ASCE endorsed the use of LCCA at the project level and said the 
proposed rule is ``vital'' to making LCCA a standard practice in every 
State DOT. The commenter added that asset management plans provide a 
new tool to States for LCCA implementation and hopes that it will 
become ``the standard'' in any capital programming process.
    The FHWA acknowledges this comment, and encourages States to use 
project-level LCCA in their project-development activities. However, 
the requirement in this rule is for network-level analysis. The FHWA 
changed the reference from LCCA to LCP in the final rule to make this 
clearer. The section-by-section discussions of NPRM Sec.  515.005(Life-
cycle Cost Analysis) and NPRM Sec.  515.007(b) contain further 
information on this topic.
NPRM Section 515.009(d)(6) (Final Rule Section 515.9(d)(6))
    Five submissions addressed proposed Sec.  515.009(d)(6), which 
requires State asset management plans to include a discussion of a risk 
management analysis, including the results of the periodic evaluations 
under proposed Sec.  515.019 (evaluation of alternatives to roads, 
highways, and bridges that are repeatedly damaged by emergency events). 
Alaska and South Dakota DOTs said that FHWA should delete any reference 
to proposed Sec.  515.019.
    In response, FHWA believes that, to increase system resiliency and 
protect investments made in the facilities

[[Page 73236]]

subject to MAP-21 Section 1315(b), it is important to consider the 
results of the periodic evaluations when conducting risk analysis. 
After considering the comments, FHWA decided to retain the requirement 
for State DOTs to include a discussion of the results of the 
evaluations relating to NHS pavements and bridges. The FHWA has revised 
Sec.  515.9(d)(6) to update the reference to the 1315(b) evaluation 
regulations, which are now located in 23 CFR part 667.
    The ASCE approved of the proposed rule's emphasis on resiliency and 
said States should identify the risks associated with current and 
expected future environmental conditions and should propose a 
mitigation plan for addressing their top priority risks. Similarly, 
Vermont Agency of Transportation said flood damage is a ``huge'' risk 
and liability that needs to be managed. A private citizen stated that, 
in addition to environmental conditions, the risk management analysis 
should take into consideration risks associated with possible economic 
scenarios and the impacts of asset preservation and capital improvement 
strategies.
    The FHWA agrees that it is important for the risk management 
evaluation, including the mitigation plan, to consider the full range 
of risks that could threaten assets over their life cycle. This 
consideration should include future environmental conditions and may 
also address risks associated with future budgets, economic growth, tax 
revenue, and the impacts of asset preservation and capital improvement 
strategies, among other factors. These comments did not require any 
change in the final rule.
NPRM Section 515.009(d)(7) (Final Rule Section 515.9(d)(7))
    Several submissions addressed proposed Sec.  515.009(d)(7), which 
would require State asset management plans to include a discussion of 
the financial plan. For the reasons discussed in the section-by-section 
discussion of NPRM Sec.  515.007(a)(4), FHWA made no change to Sec.  
515.9(d)(7) in the final rule.
NPRM Section 515.009(d)(8) (Final Rule Section 515.9(d)(8))
    Section 515.9(d)(8) requires State asset management plans to 
include a discussion of investment strategies. Georgia DOT said the 
investment strategies would need to be coordinated with the financial 
plan and coordinated through the State's planning process. The agency 
added that the strategies would also need to be consistent with newly 
implemented State requirements.
    In response, FHWA notes that one of the national goal areas is 
infrastructure condition--to maintain the highway infrastructure asset 
system in a state of good repair. The FHWA believes that investment 
strategies to improve or preserve NHS pavements and bridges must be 
developed through asset management plans, and be integrated into long-
range transportation plans. For these reasons, FHWA agrees with the 
commenter that the development of the 10-year asset management plan for 
the NHS should be coordinated with both the metropolitan and statewide 
transportation planning processes. The FHWA agrees that the asset 
management plan for the NHS would need to be implemented consistent 
with State requirements, but with the understanding that Federal 
requirements as described in this final rule must also be met. The FHWA 
concluded no revision is needed in Sec.  515.9(d)(8). The integration 
of asset management plans into transportation planning is discussed 
further in the section-by-section discussion of NPRM Sec.  515.009(h).
    Michigan DOT expressed concern about the impact the proposed rules 
would have on the level of investment in assets not covered by the 
asset management plan (i.e., non-NHS assets) by driving funding away 
from these assets.
    In response, FHWA believes the appropriate level of investment for 
assets is tied to the targets that a State sets. States should use 
their financial plan as a tool to decide if they need to make 
adjustments to their targets so that the funding distribution does not 
have an adverse impact on other assets.
NPRM Section 515.009(e) (Final Rule Section 515.9(e))
    Eighteen submissions addressed proposed Sec.  515.009(e), which 
requires a State's asset management plan to cover at least 10 years. 
Several commenters requested a shorter or longer minimum duration for 
the plan. These comments are detailed and discussed in the section-by-
section discussion of Sec.  515.7(a)(4). As stated there, FHWA believes 
the 10-year minimum reflects an appropriate balance of considerations, 
and FHWA made no change in response to these comments.
    South Dakota DOT expressed concern that Sec.  515.009(e) and (f) 
could be interpreted as requiring a 10-year STIP, and recommended that 
FHWA modify the verbiage or add clarification stating this is not the 
intent.
    The FHWA responds that an asset management plan is not a program of 
projects and should not be confused with the STIP. The FHWA notes that 
Sec.  515.9(e) and (f) neither state, nor imply, that a 10-year STIP is 
needed. The FHWA did revise the first sentence in Sec.  515.9(f) by 
deleting the phrase ``leading to a program of projects'' and rewording 
the remainder of the sentence, which avoids any potential for an 
interpretation that the sentence refers to the STIP in any manner.
NPRM Section 515.009(f) (Final Rule Section 515.9(f))
    Eleven commenters provided input on the requirements for investment 
strategies in Sec.  515.009(f). The AASHTO and the DOTs of Connecticut 
and South Dakota said the asset management plan should be a system-
level plan based on expected funding the State can allocate to the NHS. 
These commenters recommended that the final rule replace ``set of 
investment strategies'' in proposed Sec.  515.009(f) with ``State-
determined strategies.''
    In response, FHWA clarifies that the State DOTs are charged with 
developing asset management plans, and therefore it is the State DOTs 
that will determine the investment strategies to include in the plans. 
The FHWA retains the language in this final rule.
    Oregon DOT commented on problems it foresaw with the proposed 
requirement that a State DOT's investment strategies would have to meet 
all the requirements in Sec.  515.009(f)(1)-(4). Oregon's specific 
concern focused on how this would affect proposed Sec.  515.009(g), 
which requires the asset management plan to include a discussion of how 
the analyses required under Sec.  515.007 support the plan's investment 
strategies. Oregon DOT said a State should have no difficulty in 
showing how its investment strategies help make progress toward the 
achievement of the national goals and State DOT goals, but it would be 
difficult or nearly impossible to describe how State strategies satisfy 
all of the requirements in paragraphs (f)(1) through (4) of Sec.  
515.009. The DOT asserted that, for example, if a State DOT were to 
limit its consideration only to alternatives that improve the physical 
condition of transportation assets, it would limit its ability to 
achieve maximum progress in achieving State targets for the condition 
and performance of its transportation system. The commenter said State 
DOTs need the flexibility to use measures and processes that they have 
found to work best for them.
    In response, FHWA believes clarification is needed. Paragraphs 
(f)(1) through (4) of Sec.  515.9 embody requirements based on the 
definition of

[[Page 73237]]

asset management in 23 U.S.C. 101(a)(2) and requirements in 23 U.S.C. 
119(e)(1) through (2). The State DOT asset management plans, including 
the investment strategies, must meet those statutory requirements. 
However, after considering the comments, FHWA modified the first 
sentence in Sec.  515.9(f) to read ``[a]n asset management plan shall 
discuss how the plan's investment strategies collectively would make or 
support progress toward'' the items specified in paragraphs (f)(1) 
through (4). The FHWA modified paragraphs (f)(1) through (4) to align 
with this new wording. The FHWA also removed the second sentence in 
Sec.  515.9(g), pertaining to required descriptions of how the plans 
satisfy requirements in Sec.  515.9(f)(1) through (4). The FHWA 
concluded the language was not necessary because it was duplicative of 
the language in Sec.  515.9(f).
    The AASHTO and the DOTs of Connecticut, New Jersey, Oregon, and 
North Dakota took issue with use of the term ``desired state of good 
repair'' in proposed Sec.  515.009(f)(1). The AASHTO and Connecticut 
DOT said the final rule should change all references to a ``state of 
good repair'' or a ``desired state of good repair'' to references to 
``State target.'' Oregon DOT said focusing on the narrower goal of 
achieving and sustaining a state of good repair can lead to asset 
management decisions that undermine the plan's broader goals.
    As discussed in the section-by-section discussion of NPRM Sec.  
515.005 (Desired State of Good Repair), FHWA retained the term in Sec.  
515.9(f)(1) of the final rule.
    Several State DOTs said Sec.  515.009(f)(1) and (2) imply there are 
sufficient resources to maintain current assets in a ``state of good 
repair,'' while also improving the conditions of the NHS, which may not 
be possible.\45\ California DOT said if the intent is to define 
fiscally constrained strategies, then FHWA would need to add provisions 
to recognize all potential condition outcomes including levels below 
the established baseline. The commenter noted that Caltrans requested 
that clarification be made between the strategies of ``improve'' and 
``make progress toward goals.''
---------------------------------------------------------------------------

    \45\ DOTs of California, Connecticut, Minnesota, Texas, and 
North Dakota.
---------------------------------------------------------------------------

    The FHWA agrees with the comments relative to Sec.  515.9(f)(1). As 
discussed above, FHWA modified Sec.  515.9(f)(1) to make it clear that 
the requirement is to make or support progress toward achieving and 
sustaining the desired state of good repair. This revision acknowledges 
that the ``desired state of good repair'' may or may not happen with 
the implementation of the State's first asset management plan, but 
certainly progress toward a ``desired state of good repair'' is 
achievable. With regard to Sec.  515.009(f)(2), FHWA believes that 
Federal funds, even though insufficient to address all needs, must be 
spent in a way that, at a minimum, reduces the asset deterioration 
rate; hence, to improve the condition. The FHWA's interpretation of the 
word ``improve'' is discussed in the section-by-section discussion of 
NPRM Sec.  515.007(a)(1).
    Maryland DOT and NEPPP said proposed Sec.  515.009(f)(2) and (f)(3) 
could conflict with the measures that may be required by FHWA's second 
performance measure rulemaking if a State DOT's targets are for 
declining performance. As discussed in the section-by-sections 
discussions of NPRM Sec. Sec.  515.005 (Asset Management), 
515.007(a)(1), and 515.009(d)(2), FHWA disagrees with the comments 
because a performance decline could be considered improvement if a 
State succeeds in slowing the rate of deterioration.
    Regarding proposed Sec.  515.009(f)(3), Oregon DOT said the targets 
for asset condition and performance in accordance with 23 U.S.C. 150(d) 
extend beyond those established for pavement and bridges and include a 
directed consideration not only of Interstate and NHS performance 
measures that previously were to be excluded, but also of measures to 
be established for highway safety, congestion mitigation, air quality, 
and national freight movement. Oregon DOT asked if the required set of 
established and discussed strategies needs to address these additional 
considerations. Similarly, regarding proposed Sec.  515.009(f)(4), 
Oregon DOT said the national goals identified in 23 U.S.C. 150(b) 
extend beyond infrastructure condition and will require the discussion 
of asset impacts that were not to be included during the completion of 
earlier requirements.
    In response, FHWA notes the requirement is only to discuss how 
investment strategies collectively would make or support progress 
toward the outcomes listed in paragraphs (f)(1) through (4) of Sec.  
515.009. As discussed in Section V, System Performance, Performance 
Measures and Targets, and Asset Management Plans, and in the section-
by-section discussion of NPRM Sec.  515.009(d)(2), an asset management 
plan may address highway safety, congestion mitigation, air quality, 
and national freight movement in several ways without including any 
discussion of the 23 U.S.C. 150(d) performance targets for these areas. 
After considering the comments, FHWA determined the comments did not 
require any change in the final rule.
    The NEPPP stated that the requirements in Sec.  515.009(f)(4) 
(progress toward national goals in 23 U.S.C. 150(b)) cannot be met, 
because the measures that may be required by FHWA's second performance 
management rulemaking might promote ``worst-first'' repair strategies 
and thus conflict with asset management strategies.
    The FHWA disagrees for several reasons. First, FHWA does not 
believe minimum condition requirements in 23 CFR part 490 will conflict 
with the use of sound asset management principles. Second, Sec.  
515.9(f)(4) of the final rule requires asset management plans to make 
or support progress toward the achievement of the national goals 
identified in 23 U.S.C. 150(b). Requiring progress toward the national 
goals is not the same as requiring achievement of the goals. As 
previously noted, even investment strategies that result in declining 
conditions may produce overall improvements in the system. The national 
performance goals include safety, infrastructure condition, congestion 
reduction, system reliability, freight movement and economic vitality, 
environmental sustainability, and reduced project delivery delays. The 
FHWA believes individual investment strategies relating to the physical 
condition of NHS pavements and bridges often will support progress 
toward more than one of the national goals. The national goal for 
infrastructure condition is to maintain the highway infrastructure 
asset system in a state of good repair. The FHWA does not believe that 
requiring the recipients of Federal-aid highway funds to make highway 
infrastructure investments that contribute to achieving or maintaining 
a state of good repair is encouraging a ``worst first'' approach.
NPRM Section 515.009(g) (Final Rule Section 515.9(g))
    Five submissions addressed proposed Sec.  515.009(g), which would 
require State DOTs to include in their asset management plans a 
description of how the analyses required under Sec.  515.007 support 
the State DOT's investment strategies. Under the proposed language, the 
plans would also require a description of how the strategies satisfy 
the requirements in Sec.  515.009(f)(1) through (4).
    New Jersey DOT requested that FHWA define what ``strategies'' are 
being referred to in this context.

[[Page 73238]]

    In response, FHWA modified Sec.  515.9(g) to read as follows: ``A 
State DOT must include in its plan a description of how the analyses 
required under Sec.  515.7 (such as analyses pertaining to life cycle 
planning, risk management, and performance gaps) support the State 
DOT's asset management plan investment strategies.''
    North Carolina DOT said State law requires the agency to use its 
current project prioritization process for its STIP, and it is unclear 
whether the current STIP process would disagree with the asset 
management analysis, particularly on a short-term basis. This commenter 
asked if FHWA would grant waivers for States that have STIP processes 
defined in State law and, if so, for how long. Additionally, the DOT 
asked what would be the next steps if FHWA identifies potential 
conflicts between the DOT's 3-year maintenance plan and its asset 
management plan analyses.
    In response, FHWA notes that asset management plan requirements 
under 23 U.S.C. 119(e) and this final rule do not impose any project 
selection requirements on State DOTs. In addition, the implementation 
timeline for asset management requirements under this final rule 
provides ample time for States to take action to adjust their STIPs and 
maintenance plans if they decide such action is needed. There is 
nothing in 23 U.S.C. 119 that gives FHWA legal authority to waive asset 
management requirements. The FHWA made no change in the final rule as a 
result of these comments.
    As noted in the section-by-section discussion of NPRM Sec.  
515.009(f), in connection with that section and proposed Sec.  
515.009(g), Oregon DOT said it would be difficult or nearly impossible 
to describe how State strategies satisfy all of the requirements in 
Sec.  515.009(f)(1) through (4), as would be required by proposed Sec.  
515.009(g). The DOT asserted that, for example, if a State DOT were to 
limit its consideration only to alternatives that improve the physical 
condition of transportation assets, it would limit its ability to 
achieve maximum progress in achieving State targets for the condition 
and performance of its transportation system. The commenter said State 
DOTs need the flexibility to use measures and processes that they have 
found to work best for them.
    In response, as stated in the section-by-section discussion of NPRM 
Sec.  515.009(f), FHWA revised the language in Sec.  515.9(f) to 
clarify the requirements, and to remove the duplication in proposed 
Sec.  515.009(g) pertaining to satisfying Sec.  515.009(f) 
requirements.
NPRM Section 515.009(h) (Final Rule Section 515.9(h))
    Twenty commenters provided input on proposed Sec.  515.009(h), 
which would have encouraged each State DOT to select projects for 
inclusion in the STIP to support its efforts to achieve the goals 
listed in Sec.  515.009(f). The AASHTO and numerous State DOTs stated 
that the final rule should clarify that project selection and target-
setting are not within FHWA authority and would violate the State's 
sovereign right to select projects for the STIP.\46\ The AASHTO 
recommended that FHWA replace ``A State DOT should select'' with ``A 
State DOT may select'' in this section to emphasize State discretion 
for project selection and clarify that this section does not require 
that the STIP consist entirely of ``such projects'' or that all such 
projects be included in the STIP.
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    \46\ AASHTO, Alabama DOT; Connecticut DOT; Florida DOT; Delaware 
DOT, North Dakota DOT; South Dakota DOT; Vermont DOT, Washington 
State DOT, Wyoming DOT; DOTs of ID, MT, ND, SD, and WY (joint 
submission).
---------------------------------------------------------------------------

    Several commenters provided input on the relationship between the 
STIP and the asset management plan. The AASHTO and several State DOTs 
said the final rule should clarify that the STIP is where individual 
projects are identified, not in the asset management plan.\47\ The 
State DOTs of Illinois, Maryland, North Dakota, and South Dakota stated 
that asset management plans are decisionmaking tools that provide 
information to consider while developing a STIP, but they should not be 
the final and primary mechanism in generating a STIP and project 
selection. Maryland and Oregon DOTs said asset management plans should 
not create a separate process for developing an independent list of 
federally funded projects to be undertaken by a State. Mississippi DOT 
stated that review of the STIP at a project level should not be the 
measure by which State agencies are held accountable; the State's 
ability to achieve agreed-upon performance targets should be used to 
measure the effectiveness of the State's asset management plan. 
Referencing the NPRM discussion of the requirements in proposed Sec.  
515.009(h) (80 FR 9231, 9234), Mississippi DOT said this requirement 
may be interpreted to mean that the State DOT may be required by FHWA 
to exclude projects that are not identified by the asset management 
plan. The agency stated that would appear to overstep the requirements 
for development of a network-level asset management plan. Washington 
State DOT asked what would be the State DOT's role in the selection of 
projects on NHS assets not owned by the State. North Carolina DOT 
expressed concern that the asset management plan would be required to 
include ``strategies leading to a program of projects.'' The commenter 
asked if waivers would be available for States that have STIP processes 
defined in State law.
---------------------------------------------------------------------------

    \47\ AASHTO, Arkansas DOT, Connecticut DOT, Florida DOT, 
Missouri DOT.
---------------------------------------------------------------------------

    As discussed in the section-by-section discussion of NPRM Sec.  
515.009(g), nothing in 23 U.S.C. 119(e) or this regulation alters the 
role of the State in selecting projects for Federal-aid funding. The 
asset management plan required by 23 U.S.C. 119(e) does not create a 
separate process for developing federally funded projects. In reality, 
it adds to the comprehensiveness of the current transportation planning 
processes. The asset management plan is developed to improve or 
preserve the condition of the assets and the performance of the system.
    After considering the comments, FHWA modified Sec.  515.9(h) by 
eliminating the project selection language in question, and instead 
including a requirement that a State DOT must integrate its asset 
management plan into the State DOT's planning processes that lead to 
the STIP, to support the State DOT's efforts to achieve the goals in 
Sec.  515.9(f). This integration language parallels the language in 
Sec. Sec.  450.206 and 450.306 of FHWA's recently amended planning rule 
in 23 CFR part 450. Those planning provisions require States to 
integrate into the statewide transportation planning process other 
State plans and processes, including the NHS asset management plan. The 
requirement for integration under this final rule and the planning rule 
is the same. ``Integration'' in this context means a State DOT must 
consider its asset management plan, including the investment strategies 
in the plan, as a part of the decisionmaking process during planning. 
Because this requirement is for consideration of the State's asset 
management plan, which is not project-specific, there is no reason a 
State DOT would need a waiver based on STIP project selection 
procedures contained in State law.
    Oklahoma DOT recommended FHWA delete Sec.  515.009(h) from the rule 
because the goal of developing an asset management plan should be to 
set risk-mitigation strategies that go beyond a list of specific 
projects.
    The FHWA agrees that the risk-mitigation strategies are important, 
but believes the goal of developing an asset

[[Page 73239]]

management plan goes beyond setting risk-mitigation strategies. 
According to 23 U.S.C. 119(e)(1), asset management plans are to improve 
and preserve the condition of the assets and the performance of the 
system. The FHWA does not believe the purposes of the asset management 
statute can be fulfilled unless State DOTs consider their asset 
management plans during planning, including the programming of projects 
in the STIP.
NPRM Section 515.009(i) (Final Rule Section 515.9(i))
    Eight submissions addressed proposed Sec.  515.009(i), which 
requires a State DOT to make its asset management plan available to the 
public. Maryland DOT, PCA, and ACPA supported the provision. The AASHTO 
supported providing the asset management plan to the public, provided 
that nothing else in the rule would create any new or additional public 
involvement requirements. The GTMA commented more generally that the 
proposed rule would create greater transparency and would make it more 
difficult for States to ``water down or hide'' their data from the 
public. Minnesota DOT said that it would satisfy the public 
availability provision with its existing planning processes because its 
transportation asset management plan is designed for, and intended as, 
an input to those processes. Oregon DOT suggested that there should be 
a more developed process to ensure full and regular participation of 
interested stakeholders and the public, as well as coordination of the 
asset management plan with other State and metropolitan planning 
processes and plans. New Jersey DOT asserted that this provision would 
cause States to limit the scope of assets included in their plans, 
arguing that that the public availability of an asset management plan 
should be left to the States ``to the extent practicable.'' Oregon DOT 
asked for an example of an asset management plan that is in a format 
that is easily accessible to the public.
    The FHWA notes that State DOTs have discretion to communicate with 
their stakeholders and the public in ways other than what is required 
by Sec.  515.9(i). Public availability of an asset management plan is 
necessary to both educate the public as to why a particular type of 
investment is needed and to gain public support for long-term 
investment strategies. After considering the comments, FHWA has 
retained the proposed rule language. In response to the comment asking 
for an example of a format readily accessible to the public, FHWA 
points to examples of several drafts and uncertified plans, prepared 
prior to the date of this final rule, that are available at: https://www.fhwa.dot.gov/asset/plans.cfm.
NPRM Section 515.009(j) (Final Rule Section 515.9(j))
    Six submissions provided input on the statement in proposed Sec.  
515.009(j) that inclusion of performance measures and State DOT targets 
in the plan does not relieve the State DOT's of any responsibilities 
under for fulfilling performance management requirements, including 23 
U.S.C. 150(e) reporting. Alaska DOT requested clarification regarding 
what the Section 150 measures are, since this section is not part of 
this rulemaking. Colorado DOT said that more guidance is needed on how 
DOTs are expected to report on performance. The agency stated that 23 
U.S.C. 150(c)(3)(A)(ii)(IV) and (V) (regarding performance measures for 
the NHPP) make a clear distinction between performance and condition, 
as do the definitions. Minnesota DOT recommended that FHWA consider 
aligning the timing of the asset condition performance reporting 
requirements prescribed in the pavement and bridge conditions rule (2- 
and 4- years) with the planning horizon of the asset management plan (a 
minimum of 10 years) and other planning documents. New York State DOT 
said FHWA should clarify how the NPRM performance measures will be 
reported, including which ones, if any, will need to be included in the 
asset management plan. Oregon DOT stated that the establishment of an 
extensive and detailed listing of requirements demonstrates the 
difficulties involved and discourages the inclusion of additional 
assets, further reducing the benefit and value of an asset management 
plan. It argued that, rather than discouraging States from presenting 
their performance measures and targets, FHWA should encourage States to 
present the measures they have developed and implemented and discuss 
the benefits they have realized using such measures and targets.
    In response, FHWA notes that the statement is simply intended to 
make it clear that discussion of NHS pavement and bridge condition 
targets in an asset management plan does not fulfill performance 
management requirements. The performance management reporting 
requirements for NHS pavements and bridges are established through the 
second performance measure rulemaking, which also addresses the 
national performance measures and targets relating to the condition of 
NHS bridges and pavements. That rulemaking incorporates the reporting 
requirements in 23 U.S.C. 119(e)(7) and (f) relating to required 
performance measures and targets, and reporting requirements in 23 
U.S.C. 150(e) relating to the effectiveness of the asset management 
plan's investment strategy document for the NHS. With regards to the 
timelines, FHWA has developed the implementation timeline in 
coordination with the performance measure rulemakings in order to 
ensure consistency and to develop the most feasible timelines while 
satisfying the time requirements of 23U.S.C. 119 and 150.
    State DOTs are not required to submit reports on either condition 
or performance under part 515. The requirement in part 515 is that 
State DOTs include summaries of the condition of their NHS pavements 
and bridges in their asset management plans and take that information 
into account in their asset management plan.
    In response to comments concerning the inclusion in the asset 
management plan of measures and targets other than those for NHS 
pavements and bridges developed pursuant to 23 U.S.C. 150, FHWA notes 
Sec.  515.9(d)(2) provides the State DOT's may include other measures 
and targets for the NHS that the State DOT established through pre-
existing management efforts or develops through new efforts. If a State 
DOT chooses to include assets other than NHS pavements and bridges in 
its plan, Sec.  515.9(l) of the final rule requires the State DOT to 
include measures and targets the State DOT develops for those assets. 
In the final rule, FHWA has clarified in Sec.  515.9(j) that the phrase 
``State DOT targets'' means the required targets for NHS pavements and 
bridges established pursuant to 23 U.S.C. 150.
    Michigan DOT said the rule should not limit the ability of State 
DOTs to manage pavements and bridges in a way that recognizes the 
integrated nature of their function and service. The agency noted that 
while an asset management plan is an important tool for organizing the 
systematic management of assets, it should not restrict the ability of 
transportation agencies to make investment decisions, even when those 
decisions are not in perfect alignment with the plan.
    Because FHWA interprets this comment to pertain more directly to 
the implementation requirements in Sec.  515.13 of this rule, these 
comments and FHWA's responses are included in the section-by-section 
discussion of NPRM Sec.  515.013(c).

[[Page 73240]]

NPRM Section 515.011 (Final Rule Section 515.11)
    Section 515.011 of the NPRM contained provisions for a proposed 
phased implementation of asset management plans, as well as proposed 
procedures for the statutorily required FHWA certification and 
recertification of State DOT asset management plan development 
processes and the annual FHWA determination whether State DOTs have 
developed and implemented asset management plans consistent with 23 
U.S.C. 119. The FHWA made a number of changes to Sec.  515.11 in the 
final rule in response to comments, as discussed below.
NPRM Section 515.011(a) (Final Rule Section 515.11(a))
    In the NPRM, FHWA proposed a deadline for submission of the first 
asset management plan of 1 year after the effective date of the final 
asset management rule (NPRM Sec. Sec.  515.011(a) and 515.013(a)). 
Because FHWA was aware of the potential difficulties State DOTs might 
have if a complete plan were required at the 1-year milestone, FHWA 
included proposed phase-in provisions in NPRM Sec.  515.011. The FHWA 
specifically requested comments on whether the proposed phase-in was 
desirable and workable (80 FR 9231, 9243 (February 20, 2015)). Because 
comments on both Sec.  515.011(a) and Sec.  515.013(a) addressed 
implementation timing for asset management plans, FHWA consolidated the 
comments on the two sections and addresses them below. This topic also 
is discussed in Section V, Implementation Timeline for Asset Management 
Requirements.
    Nineteen commenters provided their views on the language in 
proposed Sec.  515.013(a) that would have set the general plan 
submission deadline and would have required State DOTs to submit a 
State-approved asset management plan no later than 1 year after the 
effective date of the final rule. Fourteen of those commenters, 
including 11 State DOTs, GTMA, Atlanta Regional Commission, and Fugro 
Roadware opposed the proposed 1-year deadline. Many of these commenters 
cited concerns that 1 year would not be sufficient to develop the asset 
management plan.\48\ Fugro Roadware and the DOTs of California and New 
Jersey suggested a deadline of 2 years. The GTMA suggested 18 months. 
Alaska DOT suggested a deadline of October 1, 2018. Illinois DOT said 
that States need time to fully test the functionality of new software 
before they can begin to integrate it into their planning and 
programming, which could delay the development of the asset management 
plan and reinforces the need for flexibility in the rule regarding 
deadlines for process certification and plan consistency reviews.
---------------------------------------------------------------------------

    \48\ Alaska DOT, Atlanta Regional Commission, California DOT, 
Connecticut DOT, Fugro Roadware, GTMA, Illinois DOT, Kentucky 
Transportation Cabinet, Mississippi DOT, New Jersey DOT, North 
Carolina DOT, Oklahoma DOT, Oregon DOT, South Carolina DOT.
---------------------------------------------------------------------------

    Atlanta Regional Commission and the State DOTs of Connecticut, 
North Carolina, and Oklahoma argued that FHWA should establish a single 
deadline for the implementation of the rule, but that FHWA should wait 
until all MAP-21 performance measurement requirements are in place. 
North Carolina DOT supported a single implementation date, with the 
initial plan due 2 years following the date of final rulemaking. 
Maryland DOT suggested that the single deadline be set for 1 month 
after the STIP submission date. Several State DOTs expressed concern 
that this rule along with the various NPRMs on performance measures 
begin to create an onerous program. Georgia, Montana, and New York 
State DOTs said FHWA should coordinate the reporting deadlines for all 
of the rules to reduce the burden on States. The NYSAMPO, several State 
DOTs, and several planning organizations recommended a single final 
effective date for FHWA's three performance measure rulemakings, and 
the planning rulemaking.\49\ Oregon DOT said FHWA should implement the 
new rules with common effective dates and allow a State to request an 
extension, so long as the State is able to show that it is working 
toward compliance. Oklahoma DOT contended that a comprehensive asset 
management plan cannot be developed without all criteria required for 
consideration within the asset management plan, noting that several 
NPRMs that could affect the development and submission of asset 
management plans are currently pending (e.g., freight movement, 
congestion, and the Congestion Mitigation and Air Quality Improvement 
Program). The commenter recommended that the asset management plan be 
required for submission 1 year after the effective rule date 
establishing all performance measures and standards.
---------------------------------------------------------------------------

    \49\ Alaska DOT, Atlanta Regional Commission, Connecticut DOT, 
New York State Association of MPOs, North Carolina DOT, Oregon DOT.
---------------------------------------------------------------------------

    Sixteen commenters provided input on the phase-in option for the 
initial asset management plan, as described in proposed Sec.  
515.011(a). Several State DOTs supported the proposed phase-in 
approach.\50\ The AASHTO, GTMA, and other State DOTs supported the 
phase-in approach, but suggested that the proposed timeframe would be 
too short or would lack flexibility.\51\ The GTMA requested that State 
DOTs be granted an additional 6 months for each of the required 
submittal deadlines.
---------------------------------------------------------------------------

    \50\ Arkansas DOT, Connecticut DOT, Delaware DOT, Georgia DOT, 
Missouri DOT, Oregon DOT.
    \51\ AASHTO, GTMA, New Jersey DOT, Michigan DOT, Oklahoma DOT, 
Tennessee DOT.
---------------------------------------------------------------------------

    New Jersey DOT stated that the phase-in period should be extended 
due to the significant work load and learning curve for State DOTs in 
establishing processes and developing asset management plans. 
Similarly, Washington State DOT and Tennessee DOT said the deadlines 
outlined in Sec.  515.011 would be insufficient to bridge gaps, 
collaborate with State MPOs, develop and implement the business 
process, hire and train employees, and collect all required data that 
would be required to comply with the rule. Tennessee DOT said a time 
frame of 30 months would be more feasible. Michigan DOT said a phase-in 
approach is necessary but expressed confusion about the process 
proposed in the rule, especially by the interaction of this rule and 
the second performance measure rulemaking. Michigan DOT indicated that 
the phase-in requirements force States to invest heavily in an initial 
asset management plan that is of little value and said a more 
appropriate time frame for a revised plan should be determined after 
careful review of the time required for States to build their 
investment programs around the national performance measures for 
pavements and bridges (no less than 2 years, but likely closer to 4 
years). The ASCE said State use of the short phase-in option for asset 
management plan development should be rare and only utilized in extreme 
circumstances. Alaska DOT and Atlanta Regional Commission said the 
proposed phase-in approach would unnecessarily complicate the process.
    In response to these two groups of comments, FHWA believes there 
are three conditions that have substantial impacts on the ability of 
State DOTs to develop asset management plans that comply with 23 U.S.C. 
119. First, the rulemaking establishing performance measures for NHS 
pavements and bridges needs to be completed well in advance of the 
deadline for submission of the first complete asset management 
plan.\52\ Otherwise, State DOTs will not

[[Page 73241]]

have their 23 U.S.C. 150(d) targets for NHS pavements and bridges in 
place and available for inclusion in their asset management plans. The 
FHWA considers the section 150(d) targets for NHS pavements and bridges 
a critical part of the plans. Second, State DOTs need to have FHWA-
certified plan development processes in place. Without certainty about 
the acceptability of the selected processes for developing the asset 
management plan, it will be difficult for a State DOT to develop a 
fully compliant asset management plan. Third, the State DOTs need time 
to ensure they are gathering appropriate data for use in their asset 
management plans.
---------------------------------------------------------------------------

    \52\ State DOTs have 1 year from the effective date of the 
rulemaking to establish their section 150(d) targets (23 U.S.C. 
150(d)(1)).
---------------------------------------------------------------------------

    While FHWA attempted to address these issues in the NPRM, the 
comments convinced FHWA that adjustments are needed in the final rule. 
However, FHWA does not believe a single final effective date for the 
performance measure rulemakings and the asset management plan 
rulemaking is either achievable or helpful to the overall schedule for 
implementation of asset management requirements. In light of the 
comments and what FHWA now knows about the schedules for the two final 
rules, FHWA decided to defer the effective date of this rule to October 
2, 2017. All deadlines under the final asset management rule, part 515, 
measure from that effective date. The FHWA chose to defer the effective 
date based on FHWA's determination that State DOTs would not be able to 
comply without the extra time. The FHWA decided it cannot set timelines 
for implementation of asset management requirements that are so short 
as to force State DOTs to incur penalties for non-compliance under 23 
U.S.C. 119(e)(5) or MAP-21 section 1106(b).\53\
---------------------------------------------------------------------------

    \53\ Section 119(e)(5) requires, beginning with the second 
fiscal year after the final asset management rule is effective, FHWA 
to determine whether each State DOT has developed and implemented an 
asset management plan consistent with section 119. Eighteen months 
after the performance management rule for pavement and bridge 
conditions, ``National Performance Management Measures; Assessing 
Pavement Condition for the National Highway Performance Program and 
Bridge Condition for the National Highway Performance Program'' (RIN 
2125-AF53), is effective, MAP-21 section 1106(b) requires FHWA to 
decide whether each State DOT has established the required 23 U.S.C. 
150(d) performance targets and has a fully compliant asset 
management plan in effect (MAP-21 section 1106(b)(1)). Both statutes 
impose a penalty if the State DOT has not met those requirements. 
The MAP-21 section 1106(b) permits FHWA to extend the 18-month 
compliance deadline if the State DOT has made a good faith effort to 
establish the asset management plan and set the required targets 
(MAP-21 section 1106(b)(2)). There is no extension or waiver 
provision for 23 U.S.C. 119(e)(5).
---------------------------------------------------------------------------

    The FHWA believes it is important to adopt a regulation that 
promotes successful implementation of asset management and performance 
management requirements in the Federal-aid highway program. The FHWA 
retained the phase-in approach in the final rule, but modified the 
provisions in both Sec.  515.11 and Sec.  515.13 to clarify the 
deadlines, the requirements for the initial State DOT asset management 
plans, the certification and recertification procedures for State DOT 
processes, and the submission requirements for consistency 
determinations. Under the final rule, all submission deadlines for the 
initial and the first fully compliant asset management plans are in 
Sec.  515.11(a), and the rule's effective date appears in Sec.  515.3.
    Based on the October 2, 2017, effective date for this rule, and an 
anticipated 2016 effective date for the second performance measure 
rulemaking addressing pavement and bridge conditions on the NHS, Sec.  
515.11(a)(1) of the final rule sets a deadline of April 30, 2018, for 
the submission of an initial asset management plan. That same section 
provides FHWA will use the processes described in the initial plan for 
the plan development process certification review required by 23 U.S.C. 
119(e)(6) and Sec.  515.13(a) of the final rule. Section 515.11(a)(2) 
of the final rule sets a deadline of June 30, 2019, for submission of a 
fully compliant asset management plan, together with State DOT 
documentation demonstrating the State DOT has implemented the plan. 
That same section also provides FHWA will use that submitted plan and 
documentation to make the first required consistency determination 
under 23 U.S.C. 119(e)(5) and Sec.  515.13(b) of the final rule. 
Section 515.11(c) summarizes the elements that must be included in the 
State DOT-approved asset management plan submitted by June 30, 2019. 
These timelines provide State DOTs substantial lead time, before the 
first submission deadline, to develop asset management processes and to 
improve data-gathering capability if necessary.
    Texas DOT said it is unclear how the phase-in approach will be 
accomplished since projects have already been committed under the old 
Highway Bridge Program, some of which could be as much as 10 years out.
    The FHWA notes that an asset management plan is focused on 
strategies that lead to projects, and planning processes must be 
followed to develop such projects. Once the asset management plan is in 
place, it would be appropriate for States to consider whether the 
projects that were recommended in older program documents are 
consistent with the asset management plan's investment strategies.
    Georgia DOT said States with existing initial asset management 
plans should be allowed additional time as needed to modify the 
existing document if it does not immediately meet guidance.
    In response, FHWA believes that the timeline for developing asset 
management plans provides adequate time for States to develop their 
first plan or modify their existing asset management plan.
NPRM Section 515.011(b) (Final Rule Section 515.11(b))
    NPRM Sec.  515.011(b) described the proposed requirements for 
initial asset management plans submitted under the phase-in provision. 
Regarding the proposed language requiring the initial plan to contain 
measures and targets for assets covered by the plan, NEPPP asked what 
should be done if the State's targets conflict with the national goals.
    In response, FHWA notes that the topic of target setting is 
addressed in the second performance measure rulemaking. However, it is 
evident from a review of 23 U.S.C. 150 that performance management 
requirements, including national measures and State DOT performance 
targets for those measures, are intended to result in State DOT 
investments that make progress toward the national goals in section 
150(b). The FHWA acknowledges that, due to financial constraints and 
the need for trade-offs across assets, the condition of an asset may 
improve, stay constant, or decline (see the section-by-section 
discussion of NPRM Sec.  515.009(a) in this preamble). However, that is 
not the same as a State DOT adopting section 150(d) targets that 
conflict with the national goals. It is not clear to FHWA how a State 
DOT target that is consistent with a national measure established under 
23 U.S.C. 150 could be inconsistent with a national goal.
    Two commenters referred to the proposal in Sec.  515.011(b) to 
permit State DOT to use the best available information to meet the 
requirements of Sec. Sec.  515.007 and 515.009 in the initial plan. 
Washington State DOT said this could give FHWA broad leeway to certify 
the process and determine consistency in accordance with Sec.  515.013, 
but also allow implementation of the gap analysis mentioned in Sec.  
515.007. Hawaii DOT asked what specific requirements in Sec. Sec.  
515.007 and 515.009 are being referred to.
    In response, FHWA states the intent of the provision was to require 
State

[[Page 73242]]

DOTs to submit complete proposed processes for asset management plan 
development, but to allow State DOTs to in all other respects use best 
available information to prepare the initial plan. Because FHWA added a 
provision in Sec.  515.7(g) of the final rule on use of best available 
data for all asset management plans, FHWA removed the sentence in 
question from the initial plan provision in Sec.  515.11(b). With 
respect to consistency determinations, the first consistency 
determination pursuant to Sec.  515.13(b) of the final rule will occur 
after the June 30, 2019, deadline for a fully compliant asset 
management plan.
    Washington State DOT also commented on the data provision in NPRM 
Sec.  515.011(b). It noted that obtaining the necessary data from other 
NHS owners is a significant amount of work, which includes collecting 
data that, in many cases, does not currently exist.
    In response, FHWA notes this topic is discussed in detail in 
Section V, Asset Management Plan Treatment of NHS Pavements and Bridges 
Not Owned by State DOTs. In the event that State DOTs are not able to 
perform a thorough analysis in an asset management plan due to lack of 
required data, it is best to discuss this matter in the gap analysis 
section of the plan. For example, newly identified NHS routes or the 
use of deterioration models for the entire NHS system may not be 
possible because the minimum three data points to develop a preliminary 
deterioration curve are not available. However, State DOTs should do 
their best to perform a complete analysis of the entire NHS and include 
the findings in their plans.
    One commenter, NEPPP, raised questions about the fourth sentence in 
proposed section 515.011(b), which called for the initial plan's 
investment strategies to support progress toward the achievement of 
national goals and made the requirement for inclusion of the State 
DOT's 23 U.S.C. 150(d) targets in the initial plan subject to a timing 
condition. The NEPPP asked why a State would establish targets at least 
6 months before the deadline, stating that States would be dis-
incentivized to submit early, because they would then have to address 
those targets.
    In response, FHWA notes the intent of the provision is to allow 
State DOTs to omit their 23 U.S.C. 150(d) performance targets for NHS 
pavements and bridges if the 23 U.S.C. 150(d)(1) deadline for State DOT 
establishment of those targets does not allow at least 6 months for the 
State DOTs to incorporate the targets into their asset management 
plans. To clarify this, the FHWA restructured and revised the sentence 
in question. The final rule separates the topic of initial plan 
requirements for investment strategies from the topic of initial plan 
requirements for inclusion of section 150(d) performance targets for 
NHS pavements and bridges. The final rule language on targets more 
clearly articulates that State DOTs must include section 150(d) targets 
for NHS pavements and bridges in their initial asset management plans 
only if the first target-setting deadline established in 23 CFR part 
490 for NHS pavements and bridges occurs at least 6 months before the 
initial plan submission deadline of April 30, 2018.
    Two submissions addressed the provision in proposed Sec.  
515.011(b) that would give State DOTs the option to exclude from their 
initial asset management plans the LCCA, risk management analysis, and 
financial plan. The AASHTO agreed with this provision as proposed. 
Washington State DOT asked if the initial plan requires all of the 
elements under Sec.  515.009 to be complete, stating that it proposes 
to identify gaps in the initial plan using the NCHRP Asset Management 
Gap Analysis Tool and will evaluate gaps to improve its performance 
management processes.
    In response, as stated in Sec.  515.11(b), the initial asset 
management plan must include descriptions of all the State DOT's Sec.  
515.7 asset management development processes, because FHWA will use 
that information for the required process certification review. 
However, State DOTs do not need to include any information or 
discussion in the initial plan for one or more of the following 
analyses: LCP, risk management analysis, and the financial plan. Using 
the NCHRP Asset Management Gap Analysis Tool to identify gaps in 
State's processes supports Sec.  515.7, and it certainly helps State 
DOTs to improve the maturity of their asset management plan for the 
next submission. The FHWA decided these comments did not require any 
revision to Sec.  515.11(b).
    Several commenters noted incorrect cross-references in Sec.  
515.011(b). The AASHTO and Connecticut DOT asserted that the cross-
reference in Sec.  515.011(b)(3) to Sec.  515.007(a)(7) appears to be 
incorrect and should instead reference Sec.  515.007(a)(4). Oregon DOT 
said that the discussion of this section in the NPRM's preamble (80 FR 
9231, 9251) contains three incorrect references to non-existent 
subsections of the proposed rule: Sec. Sec.  515.007(a)(6), 
515.007(a)(7) and 515.007(a)(8). Oklahoma DOT pointed out other 
incorrect references to other sections containing LCCA, risk management 
analysis, and financial plan.
    In response, the FHWA appreciates the comments and has addressed 
the incorrect cross-references.
NPRM Section 515.011(c) (Final Rule Section 515.11(c))
    Proposed Sec.  515.011(c) would have established requirements for 
State DOT submission of updated, fully compliant asset management plans 
by a date not later than 18 months after the final rule for the second 
performance measure rulemaking. As proposed, Sec.  515.011(c) would 
have allowed FHWA to extend the submission deadline if the FHWA had not 
certified the State DOT's asset management processes at least 12 months 
before the deadline. Regarding the proposed Sec.  515.011(c) 
requirement to amend the initial plan to meet all plan requirements, 
AASHTO and Connecticut DOT recommended flexibility to account for 
unintended consequences or other unknowns associated with developing 
the asset management plans and integrating the bridge and pavement 
targets. Fugro Roadware said that most States will likely require the 
optional extension of the amendment deadline of up to 12 months and 
recommended to set the base time period for 24 months and also to 
maintain the optional 12-month extension.
    The FHWA included the proposed extension because of the degree of 
uncertainty at the time of the NPRM about the timing of certain 
milestones critical to the development and implementation of asset 
management plans. This included the effective dates for this final rule 
and for the final rule in the second performance measure rulemaking for 
NHS pavements and bridges. Because FHWA now has greater certainty about 
those matters, FHWA establishes a specific date (June 30, 2019) by 
which States must submit fully compliant plans (see final rule Sec.  
515.11(a)(2)). The final rule also uses the deadline for submission of 
the initial asset management plan (April 30, 2018) as the date from 
which FHWA and State DOTs will measure the statutory time periods for 
the various steps for asset management process certification (see final 
rule Sec. Sec.  515.11(a)(1) and 515.13(a)). For that reason, much of 
proposed Sec.  515.011(c) is no longer needed, leading FHWA to modify 
the provision in the final rule. The FHWA removed language in first 
sentence concerning the submission date for a complete plan, and 
revised the first sentence for flow and consistency with new Sec.  
515.11 (a)(2). The final rule does not include an

[[Page 73243]]

extension provision for submission of fully compliant asset management 
plans because the submission deadline of June 30, 2019, is designed to 
give State DOTs more than adequate time to develop their complete plans 
using approved processes and their initial 23 U.S.C. 150(d) targets for 
the condition of NHS pavements and bridges.
NPRM Section 515.013 (Final Rule Section 515.13)
    Section 515.013 of the NPRM contained proposed provisions 
addressing the statutorily required certification and recertification 
of State DOT asset management plan development processes, and the 
annual FHWA consistency determination required under 23 U.S.C. 
119(e)(5). In response to comments, FHWA made a number of changes to 
Sec.  515.13 in the final rule, including reorganizing and renumbering 
its provisions. Table 1 shows the changes in numbering. The FHWA 
discusses the comments, and the changes made in response to those 
comments, below.
    The FHWA received several general comments on proposed Sec.  
515.013. Montana DOT stated that FHWA should clarify that investment 
decisions and judgments made by State DOT's in the asset management 
plans would not be within the scope of FHWA's review of State asset 
management plans. Georgia and Virginia DOTs urged FHWA to provide 
further clarification on what constitutes a certified asset management 
plan, the difference between certification and the consistency 
determination, and the criteria the FHWA will use in reviewing and 
approving the discretionary components of a State's plan.
    In response, FHWA clarifies that certification is to verify that 
the asset management plan processes were developed according to the 
process requirements of 23 U.S.C. 119(e) and Sec.  515.7 of this rule. 
This is discussed in more detail under the discussion of NPRM Sec.  
515.013(b) below. The consistency determination, as required under 23 
U.S.C. 119(e)(5), is to verify that the State has developed and 
implemented an asset management plan consistent with section 119(e) and 
part 515. This includes consideration of whether: (1) The asset 
management plan was indeed developed based on the certified processes; 
and (2) the investment strategies were, in fact, implemented. The FHWA 
will review, but not approve or base a consistency determination on, 
the discretionary components of a State's plan. The FHWA added language 
to this effect to Sec.  515.13(b) of the final rule. This topic is 
discussed in more detail in the section-by-section discussion of NPRM 
Sec.  515.013(c). If State DOTs choose to include discretionary assets 
in their asset management plan, they are required to comply with Sec.  
515.9(l) of the final rule. Non-compliance with Sec.  515.9(l) will 
result in FHWA asking States to remove non-compliant discretionary 
components before FHWA makes a consistency determination.
    The AASHTO suggested that FHWA indicate that State DOTs should use 
current data available to the State DOT when developing the plan.
    The FHWA clarifies that State DOTs are to use the best available 
data when developing asset management plans. This topic is discussed in 
more detail in the section-by-section discussion of NPRM Sec.  
515.009(b).
    Washington DOT stated that FHWA should not take a stringent 
approach for certification or the consistency determination during the 
initial phase-in period, and instead should recognize that the asset 
management development processes may evolve as data is collected and 
analyzed.
    As discussed under NPRM Sec.  515.011(a) and (b), FHWA realizes 
that during development of the initial plan all the required data may 
not be available. The initial plan is the simply the first step, 
although a very important step, toward developing a complete plan. 
Therefore, the final rule retains a phase-in-approach that allows State 
DOTs to exclude from the initial plan one or more of the necessary 
analyses with respect to LCP, risk management, and financial planning. 
However, the initial plan must include all asset management processes 
required under Sec.  515.7, and that initial plan will be the basis for 
the first FHWA process certification decision under Sec.  515.13(a) of 
the final rule.
NPRM Section 515.013(a) (Final Rule Section 515.11(a))
    As described in the section-by-section discussion of NPRM Sec.  
515.011, FHWA placed all provisions on the deadlines for submitting an 
initial asset management plan and a fully compliant asset management 
plan in Sec.  515.11(a) of the final rule. As a result, FHWA removed 
the language in NPRM Sec.  515.013(a) from the final rule and 
renumbered the remaining paragraphs. In addition, FHWA modified the 
title for the section to clarify the section covers asset management 
plan process certification and recertification, and annual consistency 
reviews. All comments on the NPRM language pertaining to the deadline 
for the first asset management plan are addressed in the section-by-
section discussion of NPRM Sec.  515.011(a).
NPRM Section 515.013(b) (Final Rule Section 515.13(a))
    This section addresses process certification and recertification 
under 23 U.S.C. 119(e)(6). Proposed Sec.  515.013(b) outlined how FHWA 
would certify a State's processes under 23 U.S.C. 119(e)(6). In the 
NPRM, FHWA specifically requested comments on the proposed process 
certification processes. Oregon DOT generally supported the 
certification process. Several State DOTs urged FHWA to provide more 
details about the certification process, especially regarding the 
criteria to be used for certifying State processes and whether FHWA 
Headquarters or Division Offices will do the certification.\54\ 
Maryland and South Dakota DOTs said the FHWA Division Offices should 
approve the States' plans. The AASHTO and the State DOTs of Vermont and 
Wyoming urged FHWA to allow 180 days for State DOTs to coordinate with 
the other agencies and MPOs in developing the process. Alaska DOT urged 
FHWA to remove the certification language completely. New Jersey DOT 
said that a plan should be certified as long as it addresses the 
requirements.
---------------------------------------------------------------------------

    \54\ Colorado DOT, Connecticut DOT, Georgia DOT, Maryland DOT, 
Missouri DOT, North Carolina DOT, Tennessee DOT, Texas DOT.
---------------------------------------------------------------------------

    In response to these comments, FHWA revised the language in this 
provision to simplify and clarify the certification and recertification 
processes implementing 23 U.S.C. 119(e)(6). The FHWA revised the 
approach to the initial certification and recertification. In the final 
rule, Sec.  515.13(a) provides FHWA will treat the State DOT's 
submission of its initial State-approved asset management plan under 
Sec.  515.11(b) as the State DOT's request for the first certification 
of the State's DOT's asset management plan development processes under 
23 U.S.C. 119(e)(6). Section 515.13(a) of the final rule provides State 
DOTs must resubmit their asset management plan development processes 
for a new process certification at least every 4 years, consistent with 
final rule Sec.  515.13(c).
    The FHWA retained language from the proposed rule that specifies 
when FHWA does process certification, FHWA will consider whether the 
State DOT's processes meet the requirements established in part 515 
(see final rule Sec.  515.13(a) and (a)(1)). In practice, this means 
FHWA will consider how the State DOT's processes align with the

[[Page 73244]]

requirements in Sec.  515.7. The FHWA also retained, with revisions, 
the language in proposed Sec.  515.013(b)(2) (see final rule Sec.  
515.13(a)(2)). The first change is the insertion of a sentence 
relocated from proposed Sec.  515.011(a). The sentence provides that 
FHWA, upon request of the State DOT, may extend the 90-day period for a 
State DOT to cure any deficiencies in its asset management plan 
development processes. The second change is the addition of language 
that reflects the provision in 23 U.S.C. 119(e)(6)(C)(i) that stays all 
penalties and other legal impacts of a denial of certification during 
the established cure period.
    The FHWA will administer the certification process through its 
Division Offices, and those offices will be responsible for issuing 
process certifications and consistency determinations under Sec.  
515.13. The Division Offices and FHWA Headquarters will work together 
to help ensure consistency in interpretation and application of asset 
management requirements. The timing provisions adopted in the final 
rule give State DOTs until April 30, 2018, to develop their asset 
management plan development processes. The FHWA believes this timeline 
is responsive to the commenters' concerns about the time needed for 
coordination of proposed processes.
NPRM Section 515.013(c) (Final Rule Section 515.13(b))
    Proposed Sec.  515.013(c) described how FHWA would make annual 
determinations of consistency under 23 U.S.C. 119(e)(5). The State DOTs 
of Missouri, Oregon, and Vermont opposed the proposed annual 
determination of consistency, and urged FHWA to conduct the review 
every 2 years instead. North Carolina DOT asserted that annual 
determination of consistency should not be required if the 
certification process is not changed.
    In response, FHWA notes that, under 23 U.S.C. 119(e)(5), FHWA must 
make an annual consistency determination beginning the second fiscal 
year after the asset management rule is effective. The FHWA has no 
authority to eliminate this requirement.
    In the NPRM, FHWA proposed making its first consistency 
determination not later than August 31 of the first fiscal year after 
the effective date of the final rule. This was to give a State DOT time 
to adjust its program in the event the State DOT receives a negative 
determination and the Federal share for NHPP projects and activities is 
reduced on October 1 of the following fiscal year. The FHWA requested 
comments on whether this time period is needed, and whether the 
proposed 30-day period between the determination and the start of the 
next fiscal year is sufficient. The AASHTO and several State DOTs 
opposed the NPRM's proposal to have only 30 days between the 
determination of consistency and the start of the next fiscal year. 
Most of the commenters suggested a 60-day period, and another suggested 
up to 90 days.\55\
---------------------------------------------------------------------------

    \55\ AASHTO, Connecticut DOT, Georgia DOT, Michigan DOT, Oregon 
DOT, Tennessee DOT, Texas DOT.
---------------------------------------------------------------------------

    In response, FHWA revised the first sentence of Sec.  515.13(b) of 
the final rule to adjust the time period. For the first consistency 
determination, FHWA must notify the State DOT not later than August 31, 
2019, of the FHWA's determination. The FHWA retained August 31 for the 
first consistency determination because the use of an earlier date 
would require FHWA to set the deadline for submission of a fully 
compliant asset management plan at a correspondingly earlier date than 
June 30, 2019. For the reasons, discussed in more detail in the 
section-by-section discussion of NPRM Sec.  515.011(b), FHWA decided to 
give State DOTs as much time as possible to prepare their first fully 
compliant plans. After 2019, the final rule provides FHWA will notify 
the State DOT of FHWA's consistency decision not later than July 31 
each year.
    The AASHTO expressed concern that the NPRM did not propose any 
language that would allow the State DOT to appeal, rebut, or correct 
any findings in the consistency determination. The AASHTO pointed out 
that a negative determination could be based on inaccurate or outdated 
information. In response, FHWA added a new provision, Sec.  
515.13(b)(3), giving the State DOT an opportunity to cure deficiencies 
FHWA specifies as the basis for a negative consistency determination. 
If FHWA makes a negative consistency determination, the State DOT has 
30 days to address the deficiencies by either providing additional 
information showing the FHWA negative determination was in error, or 
showing the State DOT has corrected the problem(s) that caused the 
negative determination. The FHWA also added a new sentence to Sec.  
515.13(b) of the final rule, specifying the FHWA consistency 
determination notice will be in writing and, in the case of a negative 
determination, will specify the deficiencies the State DOT needs to 
address.
    Proposed Sec.  515.013(c) focused the consistency determination on 
plan development and plan implementation. In the NPRM, FHWA requested 
comments on the processes proposed. (see 80 FR 9231, at 9243, published 
on February 20, 2015). In part, this was in recognition of the 
importance of the consistency provisions to the potential assessment of 
asset management plan-related penalties (see section-by-section 
discussion of NPRM Sec.  515.015). The FHWA also requested comments on 
methods for determining asset management plan implementation, as part 
of the NPRM's discussion of penalties under proposed section 515.015. 
(see 80 FR 9231, at 9244, published on February 20, 2015). The FHWA 
received a number of comments on plan implementation in response to the 
two requests. The FHWA consolidated those plan implementation comments 
and its responses, in this section.
    The AASHTO suggested FHWA clarify the scope of review FHWA will use 
for consistency determinations. Montana DOT stated that FHWA should 
clarify that investment decisions and judgments made by State DOT's in 
the asset management plans would not be within the scope of FHWA's 
review of State asset management plans. The AASHTO and the State DOTs 
of Florida, Illinois, and Maryland argued that reporting the 
achievement of performance targets should be sufficient to demonstrate 
successful implementation of the asset management plan. The AASHTO and 
the State DOTs of Alabama, New Jersey, and Minnesota urged FHWA to 
clarify in the rule that the consistency determination will not impinge 
upon the State's authority over project selection. Michigan DOT said 
the rule should not limit the ability of State DOTs to manage pavements 
and bridges in a way that recognizes the integrated nature of their 
function and service. It further stated that while an asset management 
plan is an important tool for organizing the systematic management of 
assets, it should not restrict the ability of transportation agencies 
to make investment decisions, even when those decisions are not in 
perfect alignment with the plan.
    Seven commenters addressed FHWA's request for comments on whether, 
as part of the implementation determination, the rule should specify 
one or more methods State DOTs could use to identify projects that 
would make progress toward achievement of the States' targets for asset 
condition and performance of the NHS, in accordance with 23 U.S.C. 
150(d), and supporting

[[Page 73245]]

progress toward the national goals identified in 23 U.S.C. 150(b). The 
AASHTO and the State DOTs of Connecticut, Georgia, and Maryland urged 
FHWA to grant States flexibility to establish methods to identify 
projects that meet 23 U.S.C. 119(e)(2) requirements. New Jersey DOT 
stated that none of the alternative methods are necessary. Tennessee 
DOT commented that that a list identifying which programs were selected 
based on the asset management plan may be too simplistic, as 
categorizing projects as entirely bridge or pavement may be difficult. 
Fugro Roadware argued that the rule should give States flexibility to 
demonstrate implementation.
    Six commenters addressed FHWA's request for comments on whether 
there are other possible approaches to determining whether a State has 
implemented its asset management plan. Georgia DOT suggested using the 
AASHTO Guide and including an implementation plan as one possible 
approach. Michigan DOT suggested that the asset management plan include 
a section that addresses implementation. Tennessee DOT urged FHWA to 
specify a method for calculating what percentage of a project can be 
counted toward a pavement or bridge project, as these types of repairs 
or reconstruction may be grouped with other system improvements. Oregon 
DOT encouraged FHWA to limit demonstration of consistency to having 
State DOTs submit an annual list of projects with a narrative 
describing how the projects are consistent with the asset management 
plan or are in accordance with another option proposed by a State DOT 
(and agreed to by FHWA). Maryland DOT suggested that demonstration 
toward performance targets is sufficient. Fugro Roadware stated that 
the rule should give States flexibility to demonstrate implementation.
    Five commenters addressed FHWA's question on whether there may be 
any problems that State DOTs might anticipate in identifying projects 
that meet the requirements of 23 U.S.C. 119(e)(2) and ideas for 
resolving any anticipated problems. Georgia DOT commented that it uses 
lump-sum funding for pavement preservation and resurfacing, so specific 
projects may not be identified in the STIP unless they are larger, 
standalone efforts. Therefore, funding locations instead of specific 
projects may be an alternative methodology to meet the goal of this 
requirement. Tennessee DOT said that sometimes it is more advantageous 
to perform maintenance on a pavement or bridge as part of a larger 
project, even if it is not included in the asset management plan, and 
asked whether such a project would be considered non-compliant. The 
AASHTO noted a potential problem related to FHWA's role regarding the 
STIP, and urged FHWA to make clear in the final rule that FHWA will 
ensure that State DOTs implement the required asset management 
processes, but FHWA will not dictate project selection. Connecticut and 
Delaware DOTs did not foresee any problems. However, Connecticut DOT 
remarked that it may take time for States to achieve a well-functioning 
asset management system, and suggested that the rule make allowances 
during the initial period for States to reevaluate and modify their 
management systems accordingly.
    Oklahoma DOT asked for further clarification of Sec.  515.015(a) 
concerning implementation of asset management plans.
    The FHWA appreciates these responses, and the concerns reflected in 
the responses. After considering these comments, FHWA decided to revise 
the section, which is Sec.  515.13(b) in the final rule, to include 
more detailed provisions concerning the scope of the consistency 
determination and how the determination will be made. New language 
makes it clear the consistency determination is not an approval or 
disapproval of strategies or other decisions contained in the plan. The 
revisions include the addition of two paragraphs describing the 
consistency determination review criteria for plan development and plan 
implementation. Section 515.13(b)(1) of the final rule provides FHWA 
will review the State DOT's asset management plan to ensure that it was 
developed with certified processes, includes the required content, and 
is consistent with other applicable requirements in 23 U.S.C. 119 and 
part 515. Section 515.13(b)(2) of the final rule establishes that State 
DOTs must demonstrate implementation of an asset management plan that 
meets the requirements of 23 U.S.C. 119 and part 515. The final rule 
permits State DOTs to determine the most suitable manner for 
documenting and demonstrating implementation. State DOTs must submit 
documentation of implementation not less than 30 days prior to the 
deadline for the FHWA consistency determination. The State DOT must use 
current and verifiable information. The submission must show the State 
DOT is using the investment strategies in its plan to make progress 
toward achievement of its targets for asset condition and performance 
of the NHS, and to support progress toward the national goals 
identified in 23 U.S.C. 150(b).
    In adopting an implementation test that focuses on investment 
strategies, FHWA declined commenters' suggestions that FHWA use 
achievement of condition targets as proof of plan implementation. There 
are two primary reasons for this decision. First, progress toward 
condition targets is reported on a 2-year cycle, not annually. Thus, 
the reporting cycle does not support using achievement of 23 U.S.C. 
150(d) performance targets as the deciding factor in the annual 
consistency determination. Second, achievement of a State DOT's 23 
U.S.C. 150(d) targets for NHS pavement and bridge conditions does not, 
by itself, demonstrate the State DOT has implemented the investment 
strategies in its asset management plan.
    With respect to the requirement State DOTs use the investment 
strategies in their asset management plans, new Sec.  515.13(b)(2)(i) 
in the final rule reflects FHWA's view that the best evidence of plan 
implementation is that, for the 12 months preceding the consistency 
determination, the State DOT funding allocations are reasonably 
consistent with the investment strategies in the State DOT's asset 
management plan. This type of demonstration takes into account the 
degree of alignment between the actual and planned levels of investment 
for various work types (i.e., initial construction, maintenance, 
preservation, rehabilitation and reconstruction). Section 
515.13(b)(2)(ii) of the final rule provides that, if a State DOT 
deviates from the investment strategies in its plan, FHWA may 
nevertheless find the State DOT has implemented its asset management 
plan if the State DOT shows the deviation was necessary due to 
extenuating circumstances beyond the State DOT's reasonable control. 
One example might be a sudden increase in material prices that has an 
impact on delivery of the entire program, forcing the State DOT to 
divert more funds to projects already underway. Table 2 shows possible 
scenarios when FHWA determines consistency under Sec.  515.13(b) of the 
final rule:

[[Page 73246]]



                                                     Table 2
----------------------------------------------------------------------------------------------------------------
                                             Alignment between the
                                               actual and planned   Circumstances leading
                        Consistency  with     level of investment    to a diversion from        Consistency
                             part 515           for various work      the financial plan       determination
                                                     types
----------------------------------------------------------------------------------------------------------------
Year X..............  Met..................  Met..................  NA...................  There is consistency.
Year X..............  Met..................  Not Met..............  Justification was      Consistency is
                                                                     provided and was       granted due
                                                                     accepted by the FHWA.  extenuating
                                                                                            circumstances.
Year X..............  Met..................  Not Met..............  Justification was      There is no
                                                                     provided, but was      consistency.
                                                                     not accepted..
Year X..............  Not Met..............  NA...................  NA...................  There is no
                                                                                            consistency.
----------------------------------------------------------------------------------------------------------------

    With regard to the suggestion FHWA require the State DOTs to 
include an implementation plan in their asset management plans, FHWA 
responds that the plan's investment strategies should serve that 
purpose. The FHWA agrees that investment strategies typically will be 
at the asset class level, not the project-level. With respect to 
Connecticut DOT's concern it may take some time for States to 
reevaluate and modify their management systems to adequately service 
asset management plan needs, FHWA notes State DOTs may move forward 
immediately with whatever work may be needed to develop or modify their 
management systems, so that they are prepared to use them to produce 
the fully compliant asset management plan due on June 30, 2019.
    In sum, Sec.  515.13(b) of the final rule reflects FHWA's 
expectation that asset management plans will address both the condition 
of the NHS bridges and pavements and the performance of the NHS, to 
meet the requirements of 23 U.S.C. 119(e)(2). The State asset 
management plan is a tool to arrive at investment strategies that best 
addresses a State's unique situation. During the plan development, 
State DOTs will consider potential strategies and their associated pros 
and cons. The inclusion of strategies which are more risk-based than 
condition-based allows States to conduct a comprehensive analysis 
before making decisions about which investment strategies to include in 
its asset management plan. Therefore, FHWA sees no reason for a State's 
funding allocations not to be in alignment with its asset management 
plan. However, FHWA recognizes there may be unforeseeable circumstances 
that force a State to deviate from the asset management plan. In such 
cases, if adequately justified in accordance with Sec.  
515.13(b)(2)(ii), FHWA will not penalize a State DOT for a deviation 
from its asset management plan's investment strategies.
NPRM Section 515.013(d) (Final Rule Section 515.13(c))
    Proposed Sec.  515.013(d) described the requirements for plan 
updates and amendments to the plan, and the recertification process. 
Texas DOT urged FHWA to provide a definition or examples of ``minor 
technical corrections'' made to the plan, and asked if this included 
updates to the costs of pavement maintenance and rehabilitation 
projects. Oregon DOT suggested that FHWA define a ``material impact'' 
that would precipitate an amended asset management plan, and also 
provide guidance on the amendment process and requirements. The NEPPP 
said FHWA should clarify the difference between the documentation that 
would be required every year for a consistency determination and the 
documentation that would be required every 4 years for recertification 
of the State DOT's asset management plan development processes.
    In response to these comments, FHWA first notes the final rule 
provides clarification on documentation and other consistency and 
process certification matters as discussed in the section-by-section 
discussion of NPRM Sec.  515.013(a) and (b). After considering the 
comments, FHWA decided to revise the regulatory language to clarify the 
requirements in Sec.  515.13(c) of the final rule. The FHWA revised the 
recertification language in first sentence and relocated that material 
to final rule Sec.  515.13(a) (see section by section discussion of 
NPRM Sec.  515.013(b)). The FHWA revised the remainder of Sec.  
515.13(c) of the final rule, to more clearly address the requirement 
for updates. Section 515.13(c) of the final rule provides State DOTs 
must update their asset management plans and asset management plan 
development processes at least every 4 years, beginning on the date of 
the initial FHWA certification of the State DOT's processes under Sec.  
515.13(a) of the final rule. Section 515.13(c) of the final rule 
retains the requirement, proposed in NPRM Sec.  515.013(d), that 
whenever the State DOT updates or otherwise amends its asset management 
plan or its asset management plan development processes, the State DOT 
must submit the revised document to FHWA for a new process 
certification and consistency determination at least 30 days prior to 
the deadline for the next FHWA consistency determination under final 
rule Sec.  515.13(b).
    The FHWA also retained language excepting minor technical 
corrections and revisions with no foreseeable material impact from the 
submission requirement. The phrase ``minor technical corrections'' 
applies to corrections that do not require an adjustment to either 
investment strategies or level of investment on various work types. For 
example, updating the pavement performance curves with more accurate 
data could result in changing the levels of investment for pavement 
preservation and rehabilitation. However, updating data for just one 
single bridge is not likely to have a foreseeable ``material impact'' 
(e.g., a significant impact on analysis results) if a State owns 500 
bridges).
NPRM Section 515.015 (Final Rule Section 515.15)
    Sixteen commenters addressed proposed Sec.  515.015, which 
describes the statutory penalties that would be imposed on States that 
do not develop and implement an asset management plan consistent with 
the requirements of 23 U.S.C. 119 and the proposed rule, or do not 
adopt targets as required by 23 U.S.C. 150(d). The GTMA, New York State 
DOT, and Oregon DOT supported the provision as proposed. Several 
commenters suggested changes to the penalty provision. The AASHTO and 
the State DOTs of Colorado, Connecticut, and Virginia urged FHWA to 
delay penalties until the first recertification process. Maryland DOT 
remarked that FHWA should allow States more time to coordinate the 
internal and statewide processes associated with developing the asset

[[Page 73247]]

management plan. The NYSAMPO urged FHWA to work with States to address 
deficiencies and only issue penalties as a last resort. Tennessee DOT 
suggested that FHWA develop a method for giving States partial credit 
for improvements in progress so they are not penalized while major 
projects are underway but not yet completed. Virginia DOT asked for 
clarification of when the 18-month time period to develop and implement 
an asset management plan, mentioned in proposed Sec.  515.015(b), would 
begin.
    In response, FHWA notes the penalty provisions are statutory. The 
penalty under 23 U.S.C. 119(e)(5) applies if a State has not developed 
and implemented an asset management plan consistent with applicable 
requirements by the stated deadline. The transition provision penalty 
under MAP-21 section 1106(b) applies if the State has not adopted its 
23 U.S.C. 150(d) targets, or does not have an approved asset management 
plan in place, by the statutory deadline. The FHWA does not have legal 
authority to eliminate or waive the penalty provisions. However, the 
penalty provision under MAP-21 section 1106(b) does permit FHWA to 
extend the time for compliance with that section if the State DOT has 
made a good faith effort to establish an asset management plan and its 
23 U.S.C. 150(d) performance targets for NHS pavements and bridges. The 
first date the penalty under 23 U.S.C. 119(e)(5) will apply is October 
1, 2019, because under the final rule, State DOTs are not required to 
submit a fully compliant asset management plan until June 30, 2019. The 
first penalty date under MAP-21 1106(b) is 18 months after the 
effective date of the final rule for the second performance measure 
rulemaking.
    The FHWA recognizes many elements must come together, and many 
entities must cooperate with the State DOT, to create a fully compliant 
asset management plan. As discussed under NPRM Sec.  515.011(a), the 
final rule provides State DOTs with a substantial amount of time to 
address the coordination, process development, data collection, target-
setting, programming, and other tasks that are necessary to the 
development and implementation of a fully compliant asset management 
plan. In addition, both the process certification and consistency 
determination provisions in Sec.  515.13 of the final rule provide 
State DOTs with the opportunity to cure deficiencies before a penalty 
takes effect.
    To further address the comments received, FHWA clarified the timing 
for the first penalty by revising Sec.  515.15(a) to insert the actual 
first penalty date of October 1, 2019. This replaces the NPRM's more 
general language relating to the penalty beginning the second fiscal 
year after the effective date of this rule. The FHWA also revised the 
last clause of that section to better align with the statutory language 
specifying the penalty is a reduction in Federal share for ``any 
project or activity carried out by the State in that fiscal year.'' 
Similarly, FHWA made clarifying revisions in Sec.  515.15(b), which 
implements the penalty provision in MAP-21 section 1106(b).
    The FHWA reworded Sec.  515.15(b)(1) to clarify the applicability 
of the provision and specify when the penalty, if triggered, would 
terminate. Under Sec.  515.15(b)(1) of the final rule, the FHWA will 
not approve projects using NHPP funds on or after the date 18 months 
after the effective date of the 23 U.S.C. 150(c) final rule in the 
second performance measure rulemaking unless the State DOT has 
developed and implemented an asset management plan that is consistent 
with the requirements of 23 U.S.C. 119 and this part, and established 
the performance targets for NHS pavements and bridges required under 23 
U.S.C. 150(d). If this penalty is triggered, and FHWA must suspend NHPP 
funding approvals, and the penalty will terminate once the State DOT 
has developed and implemented an asset management plan that is 
consistent with the requirements of 23 U.S.C. 119 and this part and 
established the performance targets for NHS pavements and bridges 
required under 23 U.S.C. 150(d). As MAP-21 section 1106(b) is a 
transition provision, once the State has met the requirements of that 
statute, there is no further risk of triggering the section 1106(b) 
penalty. In Sec.  515.15(b)(2), FHWA revised the wording by changing 
``extend the 18-month period'' to ``extend the deadline,'' and 
clarified the phrase referring to the performance targets for NHS 
pavements and bridges required under 23 U.S.C. 150(d).
    The FHWA received a number of comments under this section relating 
to how FHWA might determine whether a State DOT has implemented its 
asset management plan. Plan implementation is relevant to both the 
consistency determination under Sec.  515.013 and penalties under Sec.  
515.015. The comments on this topic are discussed in the section-by-
section discussion of NPRM Sec.  515.013(c).
    Hawaii DOT suggested that FHWA fund an emergency project at the 
reduced Federal share when a State DOT must implement a project due to 
an emergency event but the emergency response funds are not available 
and the State does not have access to enough non-Federal funds.
    In response, FHWA notes that this comment appears to relate to 
eligibility and Federal share under the Emergency Relief Program in 23 
CFR part 668, and thus relates to matters outside the scope of this 
rulemaking.
    Oregon DOT asked for clarification of the role of FHWA Division 
Offices and Headquarters staff in making decisions related to the asset 
management plan and imposing penalties.
    The FHWA will administer the certification process through its 
Division Offices. The Division Offices will be responsible for issuing 
process certifications and consistency determinations under Sec.  
515.13. The Division Offices and FHWA Headquarters will work together 
to help ensure consistency in interpretation and application of asset 
management requirements.
NPRM Section 515.017 (Final Rule Section 515.19)
    Twelve commenters addressed proposed Sec.  515.017, which described 
practices that State DOTs would be encouraged to consider to support 
the development and implementation of asset management plans. The GTMA 
strongly supported the provision as proposed. However, most of the 
commenters addressing this section said this section consists of non-
prescriptive guidance and is therefore inappropriate to include in a 
regulation. They suggested that FHWA omit the provision from the final 
rule and instead provide separate guidance.\56\ The AASHTO and 
Connecticut DOT expressed concern that if Sec.  515.017 remains in the 
final rule, FHWA could pressure States to take non-required steps that 
are set forth in the section. New Jersey DOT did not ask for this 
section of the proposed rule to be deleted, but instead asked FHWA to 
clarify in the final rule that this section simply provides suggestions 
and would not impose any additional requirements on State DOTs.
---------------------------------------------------------------------------

    \56\ AASHTO, NYSAMPO, Alaska DOT, Colorado DOT, Connecticut DOT, 
Delaware DOT, Florida DOT, Hawaii DOT, Maryland DOT, Oregon DOT.
---------------------------------------------------------------------------

    In response, FHWA points to its recent ``State DOT Gap Analysis'' 
initiative, which has helped States significantly with their asset 
management plan development activities. The FHWA believes that all 
States could benefit from the types of practices recommended, but not 
required, in the section. Therefore, FHWA retained the proposed 
language

[[Page 73248]]

in Sec.  515.19 of the final rule. However, FHWA has added a sentence 
to Sec.  515.19(a) that specifically states the activities described in 
the section are not requirements.

B. Periodic Evaluation of Facilities Repeatedly Requiring Repair and 
Reconstruction Due to Emergency Events, Part 667 (NPRM Section 515.019)

    Section 515.019 of the NPRM contained the proposed provisions for 
implementation of MAP-21 section 1315(b), which requires periodic 
evaluations to determine if there are reasonable alternatives to roads, 
highways, and bridges that have repeatedly require repair and 
reconstruction activities due to emergency events. Comments received on 
the proposed Sec.  515.019 demonstrated that FHWA needed to reconsider 
the location of the implementing regulations. Some commenters found the 
proposed regulation confusing with respect to the relationship between 
these MAP-21 section 1315(b) evaluation requirements and the proposed 
asset management regulations implementing 23 U.S.C. 119(e). Similarly, 
it was apparent there is confusion about the relationship between MAP-
21 section 1315(b) and title 23 Emergency Relief Program funding 
eligibility provisions in 23 U.S.C. 125 and implementing regulations at 
23 CFR part 668.
    As a result of these comments, FHWA decided to relocate the MAP-21 
section 1315(b) implementing regulations to part 667, thereby giving 
the regulations their own part, separate from both the asset management 
regulations in part 515 and the Emergency Relief Program regulations in 
part 668. As a result of the relocation, as well as changes FHWA made 
in response to NPRM comments, the final rule substantially reorganizes 
and revises the section 1315(b) implementing regulations. Table 1 shows 
the changes in numbering in the final rule. The FHWA discusses other 
comments received, and the changes made in response to those comments, 
below.
NPRM Section 515.019(a) (Final Rule Section 667.1)
    Section 667.1 of the final rule describes the obligation of each 
State, acting through its State DOT, to perform periodic statewide 
evaluations. In the final rule, the description of the overall State 
DOT obligation to carry out statewide evaluations is revised to more 
closely align with the language in MAP-21 section 1315(b). The 
reference to eligibility for funding under title 23, U.S.C., that was 
in NPRM Sec.  515.019(a) is removed from the regulation. The FHWA made 
this change because FHWA created a definition of ``roads, highways' and 
bridges'' in Sec.  667.3 of the final rule, and the definition 
addresses eligibility under title 23. For the same reason, the 
definition of ``emergency event'' that was in NPRM Sec.  515.019(a) is 
removed from the general provision in Sec.  667.1 of the final rule, 
and placed in the definitions section in Sec.  667.3.
    Seventeen commenters addressed the general provision on statewide 
evaluations. Several States asserted that FHWA should remove the 
evaluation section from the rule entirely.\57\ The State DOTs of 
Maryland, New York State, and South Dakota recommended that, instead of 
a separate rule on evaluations, FHWA use the risk analysis in asset 
management plans as the means for fulfilling section 1315(b) 
requirements. Alaska and Delaware DOTs asserted that FHWA should remove 
the provision from the asset management rule and instead address the 
matter in the Emergency Relief Program.
---------------------------------------------------------------------------

    \57\ DOTs of Alaska, Connecticut, Delaware, Georgia, Oklahoma, 
Maryland, New York State, and South Dakota.
---------------------------------------------------------------------------

    In response, in the final rule FHWA relocated the MAP-21 section 
1315(b) implementing regulations to 23 CFR part 667. The reasons for 
choosing this approach include: (a) MAP-21 section 1315(b) applies to 
more types of facilities (roads, highways, or bridges that repeatedly 
require repair and reconstruction activities) than the minimum assets 
that must be included in an asset management plan under 23 U.S.C. 
119(e) (pavement and bridge assets on the National Highway System in 
the State); and (b) section 1315(b) is not limited by the Emergency 
Relief Program provisions in 23 U.S.C. 125 or 23 CFR part 668, which 
address eligibility for special funding and administration of those 
funds. The MAP-21 section 1315(b) has no connection to past, present, 
or future eligibility of repairs for title 23 emergency relief funding.
    Washington State DOT supported the need for a network evaluation to 
identify locations where emergency events have occurred or may occur. 
The GTMA stated that it supports the provision for periodic evaluations 
of facilities requiring repair or reconstruction due to emergency.
    The FHWA agrees, and believes the evaluations will provide useful 
information for planning transportation investments and developing 
projects.
    Mississippi DOT stated that requiring States to ensure evaluations 
are done on State and local roads would place an unfair burden on 
States. The commenter observed that including locally owned facilities 
in the evaluations would not assure any remedial action will occur, and 
that it likely would prove difficult to obtain necessary data from 
local entities. The NYSAMPO commented that MPOs should be engaged in 
the development of the evaluation and determination of ``reasonable 
alternatives'' to repair and rehabilitation, because metropolitan 
planning organizations have the data, knowledge, and capability to do 
this work in their metropolitan planning area.
    The FHWA considered these comments, but has not made any change in 
the responsible entity under the final rule. Under Sec.  667.1 of the 
final rule, State DOTs remain responsible for performing the statewide 
evaluations required by MAP-21 section 1315(b), as was described in the 
NPRM (see 80 FR 9231, at 9245, published on February 20, 2015). The 
FHWA agrees that, if the statutory purpose and requirements are to be 
fulfilled, States will need to develop effective arrangements with MPOs 
and other entities not only for sharing data, but also for identifying 
reasonable alternatives. The FHWA acknowledges that States may find it 
challenging to obtain data from non-State owners, and this final rule 
addresses the issue of unavailable data (see discussion of Sec.  667.5 
of the final rule, below).
    Mississippi DOT asked FHWA to identify the extent to which State 
DOTs will be required to address assets within areas that are 
periodically subjected to ``emergency events.''
    In response, FHWA notes MAP-21 section 1315(b) does not include any 
express requirement for remedial action to address facilities 
identified through the evaluation process. However, FHWA believes a 
different kind of obligation is imposed because the statute requires 
this rulemaking to help conserve Federal resources and protect public 
safety and health. For that reason, this final rule includes provisions 
addressing State DOT and FHWA consideration of the results of the 
evaluations (see discussion of NPRM Sec.  515.019(d)).
    Hawaii DOT suggested that if the intent of the provision is for 
NHPP funding to be spent to address improvements related to climate 
change, or to respond to or protect against emergency or extreme 
weather events, then these considerations are already included in 
existing project planning

[[Page 73249]]

and programming (i.e., the long range planning process, the FHWA 
Emergency Relief Manual, and the FHWA Hydraulic Engineering Circulars).
    In response, FHWA notes MAP-21 section 1315(b) is not part of the 
statute establishing the NHPP (23 U.S.C. 119), and section 1315(b) does 
not specify any funding eligibility or funding source for work 
undertaken on the facilities covered by the statute. The FHWA also 
believes the enactment of MAP-21 section 1315(b) indicates Congress 
wanted to focus additional attention on avoiding the expenditure of 
funds on repair and reconstruction activities that fail to reduce or 
eliminate the risk of repeated damage to a facility from emergency 
events.
    In the NPRM, FHWA asked for comments on the question whether the 
final rule should provide greater detail on the required content for 
the evaluations. The FHWA requested commenters provide specific 
suggestions for elements they thought FHWA ought to require in the 
evaluations (see 80 FR 9231, at 9245, published on February 20, 2015). 
Ten commenters responded to FHWA's request. The AASHTO and several 
State DOTs urged FHWA not to specify the required content for the 
evaluations in greater detail.\58\ Oregon DOT suggested that the rule 
specify what is normally to be contained in an evaluation, but also 
direct States to base evaluations on the best information and approach 
possible, and to discuss the reasons for using the approach selected to 
complete an evaluation. Georgia DOT asserted that additional guidance 
is needed regarding periodic evaluations to cover existing roads, 
highways, and bridges eligible for funding under title 23, including 
guidance on the parameters for evaluation of reasonable alternatives.
---------------------------------------------------------------------------

    \58\ AASHTO, Connecticut DOT, Georgia DOT, Maryland DOT, New 
Jersey DOT, Oregon DOT, Virginia DOT.
---------------------------------------------------------------------------

    The FHWA has considered these comments, and added a definition of 
``evaluation'' to the final rule (Sec.  667.3(b)), but decided not to 
establish detailed content requirements for the evaluations at this 
time. The final rule retains the approach proposed in the NPRM of 
providing broad minimum requirements, and giving States the flexibility 
to determine the specifics as they develop evaluations that meet those 
broad minimum requirements. The FHWA will monitor the need for further 
guidance.
    Several State DOTs, in responding to FHWA's request for comments on 
evaluation content, did ask FHWA to define certain terms, which would 
have an impact on how the evaluations are done. The FHWA response to 
those requests appears in the section-by-section discussion of NPRM 
Sec.  515.019(a).
NPRM Sections 515.019 (a) and (b) (Final Rule Section 667.3)
    The final rule adds a new section devoted to definitions specific 
to part 667. The NPRM defined two terms, ``emergency event'' and 
``reasonable alternatives'' (Sec.  919.019(a) and (b) of the NPRM). The 
final rule includes revised versions of those definitions in Sec. Sec.  
667.3(c) and 667.3(d). The final rule adds definitions for the terms 
``catastrophic failure'' (Sec.  667.3(a)), ``evaluation'' (Sec.  
667.3(b)), ``repair and reconstruction'' (Sec.  667.3(e)) and ``roads, 
highways, and bridges'' (Sec.  667.3(f)). Each definition is discussed 
below.
    Six commenters addressed the proposed definition of ``emergency 
event'' in NPRM Sec.  515.019(a). Three commenters called for the rule 
to address infrastructure failures caused by human actions. Hawaii and 
North Carolina DOTs asked whether FHWA intended the definition to 
encompass events caused by human error (e.g., over-height vehicles 
hitting an overpass, a bridge pier being struck by a barge). The 
Atlanta Regional Commission stated that infrastructure failure caused 
by humans (e.g., traffic crash, sabotage) should not be considered 
``emergency events'' for the purposes of the evaluation requirements. 
Georgia DOT said FHWA needs to clarify the types and levels of 
emergencies that would meet the definition. Maryland DOT said an event 
should meet the definition if significant damage is the direct result 
of a weather-related, State-declared state of emergency.
    In response, FHWA notes the proposed rule defined ``emergency 
event'' as ``a natural disaster or catastrophic failure due to external 
causes resulting in an emergency declared by the Governor of the State 
or an emergency or disaster declared by the President of the United 
States.'' The FHWA concluded there is no need to revise that 
definition, but FHWA did see the need to add a definition of 
``catastrophic failure'' to the final rule to clarify the scope of that 
term. A ``catastrophic failure'' under the final rule means a sudden 
failure of a major element or segment of a road, highway, or bridge due 
to an external cause. The definition includes external events due to 
both human and natural causes, but excludes human-caused catastrophic 
failures that are primarily attributable to gradual and progressive 
deterioration or lack of proper maintenance. Thus, an ``emergency 
event'' under the final rule includes catastrophic failures caused by 
human error or related factors (e.g., trucks striking bridge girders), 
but does not include catastrophic failures caused by a failure to 
properly care for a facility.
    The FHWA does not believe the inclusion of human-caused events will 
make the evaluation requirement overly broad because the definition 
also requires the event to be accompanied by a declaration of emergency 
or disaster. Both Federal and State governments have used declarations 
of emergency or disaster in cases involving human-caused disasters. For 
example, in 2007, the I-35 bridge collapse in Minnesota was declared a 
disaster by both the President of the United States and by Minnesota 
Governor Pawlenty. However, the primary focus of the implementing rule 
continues to be on disasters involving acts of nature, such as floods, 
hurricanes, earthquakes, tornados, tidal waves, severe storms, or 
landslides. The FHWA decided not to adopt suggestions that the 
definition of ``emergency event'' include some form of threshold for 
degree or cost of damage. The FHWA concluded that the State and Federal 
criteria for disaster and emergency declarations provide adequate 
safeguards against the inclusion of minor events within the scope of 
the evaluation rule.
    The FHWA defines ``evaluation'' in the final rule to assist State 
DOTs in understanding the basic elements required for an adequate 
evaluation under part 667. Consistent with the purpose of MAP-21 
section 1315(b), a part 667 evaluation requires an analysis that 
identifies and considers any alternative that will mitigate, or 
partially or fully resolve, the root cause of the recurring damage to 
the particular facility. The evaluation also must identify and consider 
the costs of achieving such solution, and the likely duration of the 
solution. Finally, as proposed in NPRM Sec.  515.019(a), the evaluation 
must consider the risk of recurring damage and cost of future repair 
under current and future environmental conditions.
    Two commenters addressed the proposed definition of ``reasonable 
alternatives'' in NPRM Sec.  515.019(b), which describes minimum 
factors for determining whether there is a reasonable alternative to an 
existing road, highway, or bridge that repeatedly requires repair and 
reconstruction activities from emergency events. Georgia DOT requested 
clarification on what FHWA would consider to be an acceptable 
reasonable alternative. Mississippi DOT asked what would be

[[Page 73250]]

an acceptable probability that major repairs will be required in the 
future, and what cost threshold would be considered reasonable to 
achieve a practical probability that damage will not occur in the 
future. Colorado DOT stated that the proposed provision might conflict 
with procedures in FHWA's Emergency Response Manual, and asked if 
``reasonable alternatives'' could be considered betterment activities, 
and thus eliminate consideration of socioeconomic factors from 
alternatives. The commenter indicated transportation asset management 
activities require socio-economic inputs, and result in alternatives 
recommendations that do not qualify under the Emergency Relief Program. 
A third commenter, Oregon DOT, suggested FHWA should rewrite the rule 
to encourage a more general approach to determining the response to 
emergency events that is based on local circumstances or connect 
section 1315(b) requirements with Emergency Response or the Federal 
Emergency Management Agency (FEMA) funding requests.
    In response to the request for FHWA to identify what would be an 
acceptable ``reasonable alternative,'' or what level of expenditures 
would be reasonable in order to avoid future damage, FHWA notes the 
definition of ``reasonable alternative'' in the rule is intended to 
provide States with flexibility. The FHWA believes the rule will permit 
States to determine, within certain broad parameters, what options are 
reasonable in light of their particular situations. The definition 
permits States to take overall cost and relative effectiveness of 
alternatives into account. Thus, the final rule definition in Sec.  
667.3(d) retains the NPRM's description of three criteria FHWA 
interprets as fundamental to the overall objective of MAP-21 section 
1315(b), which is to conserve Federal resources and protect public 
safety and health.
    With regard to the request for identification of a probability 
factor, FHWA notes that the evaluation of reasonable alternatives 
should include consideration of both incremental and total solutions. 
This means considering whether there is one or more alternatives that 
will mitigate, or partially or fully resolve, the root cause of the 
recurring damage. The evaluation of alternatives includes consideration 
of the cost of the alternatives and the likely extent and duration of 
the potential solutions. The FHWA did revise the definition of 
``reasonable alternatives'' to clarify that actions that partially 
address the three criteria can be ``reasonable alternatives.'' The 
newly added definition of ``evaluation'' also incorporates these 
principles. However, FHWA does not believe it is necessary or desirable 
to require States to achieve a particular level of certainty or 
probability. The FHWA also added language to the final rule's 
definition of ``reasonable alternatives'' (Sec.  667.3(d)(3)) 
recognizing that these types of considerations are typically part of 
the planning and project development process.
    Finally, FHWA reiterates that MAP-21 section 1315(b) is not a part 
of the Emergency Relief Program, and eligibility under the Emergency 
Relief Program has no effect on the applicability of the evaluation 
regulation. The two statutory schemes have very different purposes and 
requirements. The evaluation is intended to identify and address 
alternatives to facilities that have experienced recurring damage, and 
to lead to long-term solutions, not to address transportation needs 
immediately following a particular emergency event. Identification of a 
reasonable alternative pursuant to the section 1315(b) evaluation 
process does not automatically mean the alternative qualifies for 
funding under the Emergency Relief Program. The Emergency Relief 
Program has its own standards for funding eligibility, as reflected in 
23 U.S.C. 125.\59\ For these reasons, there is no conflict between the 
evaluation regulation and Emergency Relief Program regulations in 23 
CFR part 668, and there is no need to consider whether a repair and 
reconstruction under part 667 involves a betterment.
---------------------------------------------------------------------------

    \59\ Amendments to the statute in MAP-21 substantially enhanced 
the availability of Emergency Relief Program funding, extending it 
to cover the cost of repair and reconstruction that meets current 
geometric and construction standards required for the types and 
volumes of traffic that the facility will carry over its design 
life. The program still requires economic justification to support 
funding eligibility for work exceeding the ``comparable facility'' 
standard in 23 U.S.C. 125(d)(2).
---------------------------------------------------------------------------

    The comments suggest, however, a need to emphasize that the section 
1315(b) evaluation of reasonable alternatives is only one of several 
potential alternatives analysis requirements that may apply to proposed 
work on an affected facility. Facilities subject to the section 1315(b) 
requirement for evaluation of reasonable alternatives may also be 
subject to other Federal requirements for the consideration of 
alternatives that have their own standards for when and how 
alternatives are considered.\60\ The FHWA and State DOTs should work 
together to ensure applicable alternatives analyses requirements are 
identified and coordinated. This should occur early enough in the 
planning and project development process to make the required 
alternatives analyses meaningful, avoid duplication in the review 
process, and ensure the review process complies with the applicable 
standards and timing for each requirement. Thus, FHWA encourages State 
DOTs to consider the various alternatives analysis requirements that 
may apply as the proposed project moves through the environmental 
review process, so that reasonable alternative(s) identified under 
section 1315(b) are tailored to meet other applicable requirements as 
well.
---------------------------------------------------------------------------

    \60\ Examples include NEPA (requires an evaluation of reasonable 
alternatives for certain classes of action when there is a major 
Federal actions, such as an FHWA funding decision and other 
approval); section 404 of the Clean Water Act (requires evaluation 
of practicable alternatives to discharge of dredge and fill into 
waters of the United States); and Executive Order 11988, as amended 
by Executive Order 13690 (requires consideration during NEPA, for 
all classes of action, of alternatives to avoid adverse effects and 
incompatible development in the floodplain; includes an ``only 
practicable alternative'' provision).
---------------------------------------------------------------------------

Roads, Highways, and Bridges
    The FHWA received comments from thirteen parties relating to the 
scope and applicability of the rule. Those comments indicated a need 
for greater clarity in the rule about which roads, highways, and 
bridges are covered by part 667. The AASHTO and several State DOTs 
urged FHWA to make MAP-21 section 1315(b) implementing regulations 
apply only to NHS assets.\61\ A few of these commenters cited concerns 
about data access or availability as the reasons for this suggestion. 
Connecticut DOT remarked that if the evaluation section remained in the 
final rule, it should only focus on assets addressed as part the asset 
management plan. Washington State DOT asked for additional 
clarification of the term ``all other roads, highways and bridges,'' in 
the proposed rule, including whether this phrase is meant to include 
all public roads (e.g., State non-NHS routes, county routes, city 
routes). West Piedmont Planning District Commission suggested that 
tunnels be subject to evaluation. Tennessee DOT asked FHWA to define 
roads and highways in the context of the evaluation regulations, 
asserting that elsewhere in the proposed asset management rule only 
pavements and

[[Page 73251]]

bridges are considered mandatory assets.
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    \61\ AASHTO, Connecticut DOT, Delaware DOT, Maryland DOT, 
Missouri DOT, Mississippi DOT, DOTS of ID, MT, ND, SD, and WY (joint 
submission); Wyoming DOT; South Dakota DOT; Oregon DOT; Florida DOT.
---------------------------------------------------------------------------

    In response, FHWA notes MAP-21 section 1315(b)(1) requires the 
evaluation of reasonable alternatives for ``roads, highways, or bridges 
that repeatedly require repair and reconstruction activities.'' The 
statute makes no distinction based on NHS status, ownership, or 
inclusion in a State's asset management plan. For that reason, the 
final rule does not limit the definition of ``roads, highways, and 
bridges'' to the NHS or to State-owned routes. Section 667.3(f) of the 
final rule defines ``roads, highways, and bridges'' for purposes of 
part 667 as meaning a highway, as defined in 23 U.S.C. 101(a)(11), that 
is open to the public and eligible for financial assistance under title 
23, U.S.C.; but excluding tribally owned and federally owned roads, 
highways, and bridges. The definition draws from language on title 23 
eligibility that FHWA proposed in NPRM Sec.  515.019(a), as well as 
from the definitions of ``Federal-aid highway'' and ``highway'' in 23 
U.S.C. 101(a). However, unlike the term ``Federal-aid highway'' under 
23 U.S.C. 101(a)(6), the final rule's definition includes highways or 
roads functionally classified as local roads or rural minor collectors 
because the statute does not provide a basis for excluding them.
    The definition in the final rule has a broader scope than just the 
pavements and bridges covered by the asset management final rule 
because, unlike the asset management plan minimum requirements under 23 
U.S.C. 119(e), MAP-21 section 1315(b) does not contain language 
limiting the components subject to evaluation. For that reason, the 
definition in the final rule is broad in terms of included features, 
and incorporates the definition of ``highway'' in 23 U.S.C. 101(a)(11). 
Thus, the final rule definition includes the component parts such as 
tunnels and drainage structures.
    The definition in the final rule adopts the NPRM's proposed 
exclusion for federally owned roads (see NPRM Sec.  515.019(c)), and 
adds an express exclusion for tribal roads. The NPRM preamble discussed 
excluding federally owned roads (see 80 FR 9231, at 9244 (February 20, 
2015)), but did not expressly discuss an exclusion of tribally owned 
roads. The FHWA received no comments in opposition to the exclusion of 
federally owned roads, and Connecticut DOT commented in support of the 
exclusion.
    The FHWA decision on these exclusions took into account the many 
comments expressing concern about the scope of the regulation and the 
potential burdens on the State if the State were required to evaluate 
roads owned by other parties. The FHWA appreciates the challenges this 
may present, and believes those challenges could potentially be much 
greater in the case of federally owned and tribally owned facilities 
because of the government-to-government aspects of the parties' 
relationships. Furthermore, there are a number of fundamental 
differences between the Federal-aid highway program that creates 
funding eligibility for State and local roads, highways, and bridges, 
and the title 23 funding programs focused on federally owned and 
tribally owned roads, highways, and bridges. Given these factors, FHWA 
concluded evaluation of federally owned and tribally owned roads should 
not be a State responsibility. The FHWA will address evaluation of 
federally owned and tribally owned facilities separately from this 
rulemaking.
    In summary, ``roads, highways, and bridges'' under part 667 means a 
highway, as defined in 23 U.S.C. 101(a)(11), that is open to the public 
and eligible for financial assistance under title 23, U.S.C. The term 
excludes tribally owned and federally owned roads, highways, and 
bridges. The FHWA views all facilities meeting the definition of 
``roads, highways, and bridges'' in this final rule as subject to the 
evaluation requirement. The FHWA recognizes this means State DOTs will 
have to work cooperatively with such owners to carry out the 
evaluations. However, many aspects of the Federal-aid highway program, 
such as the transportation planning process and performance management, 
require State and local governments to work together toward a common 
goal. Nonetheless, FHWA acknowledges there may be challenges in doing a 
statewide evaluation of roads, highways, and bridges as defined in the 
final rule. In recognition of those challenges, in the final rule FHWA 
changed the timing and frequency requirements for evaluations of roads, 
highways, and bridges that are not on the NHS. This decision is 
discussed below under final rule Sec.  667.5, which describes the 
section added to the final rule to address data time period, 
availability, and sources.
    North Carolina DOT asked for further clarification of the term 
``site,'' specifically as it relates to roads and pipes. Tennessee DOT 
requested guidance on what would constitute a ``site.'' Neither the 
NPRM nor this final rule use the term ``site.'' The FHWA believes the 
commenters asked about ``site'' because that term is used in FHWA's 
Emergency Relief Program regulations (23 CFR part 668) and its 
Emergency Relief Manual. Because the term is not used in this final 
rule, FHWA does not believe there is a need to define it.
    Mississippi DOT requested that FHWA define the phrase ``repeatedly 
require repair.'' This phrase appears both in MAP-21 section 1315(b) 
and in this rule. The FHWA interprets the comment as asking for a 
response on two issues. First, the applicable time period within which 
repair and reconstruction activities would have to occur in order to 
trigger application of the evaluation requirement. The FHWA received 
related comments in connection with its request for comments on whether 
FHWA should establish a limit to the length of the ``look back'' States 
DOTs will do under the rule to determine whether a road, highway, or 
bridge has been repaired or reconstructed on two or more occasions. All 
of these comments, and FHWA's responses, are discussed below in the 
section-by-section discussion of final rule Sec.  667.5.
    The FHWA interprets the second part of the Mississippi DOT question 
as asking what type of work qualifies as ``repair.'' The Mississippi 
and Tennessee DOTs requested clarification on what would constitute a 
repair, including repairs to infrastructure other than pavement or a 
bridge; and whether the term includes minor repairs addressed by State 
forces through routine maintenance, or debris removal. Tennessee DOT 
requested a definition for the term ``repair.'' The NYMTC suggested 
setting a dollar threshold for the cost of repairs that would trigger 
the evaluation.
    After considering these comments, FHWA decided to make two changes 
to the rule. First, FHWA revised the term ``repair or reconstruction'' 
to ``repair and reconstruction.'' The FHWA made this change because the 
statute uses ``and'' rather than ``or'' and the use of ``or'' could be 
interpreted as expanding the scope of the statute. The FHWA also 
decided to add a definition of the statutory phrase ``repair and 
reconstruction'' to the final rule. The term plays a central role in 
determining which facilities will be subject to evaluation, and 
comments indicated some uncertainty among the States about the scope of 
the term. In developing a definition, FHWA considered that work meeting 
the MAP- 21 section 1315(b) statutory standard of ``repair and 
reconstruction'' must include at least some aspect of reconstruction 
(rebuilding) work. In addition, FHWA also considered the fact that many 
types of repair work fall under the term ``reconstruction.''

[[Page 73252]]

Finally, FHWA does not believe section 1315(b) was intended to capture 
minor repair work or routine maintenance work.
    As a result of the above considerations, FHWA defines ``repair and 
reconstruction'' in the final rule as meaning permanent repairs such as 
restoring pavement surfaces, reconstructing damaged bridges and 
culverts, and replacing highway appurtenances. The definition 
explicitly excludes repair work meeting the definition of ``emergency 
repairs'' in 23 CFR 668.103. The exclusion helps ensure ``repair and 
reconstruction'' focuses on work that is more substantial than 
activities such as routine maintenance or debris removal. The FHWA also 
notes that, when a State DOT determines whether a facility that has had 
repair and reconstruction work on two or more occasions is subject to 
the evaluation requirement, it is necessary to look at other portions 
of the rule as well. To fall within the evaluation rule, the repair and 
reconstruction activity must be carried out as a result of an emergency 
event (as that term is defined in the final rule). By definition, this 
eliminates any repair and reconstruction activity performed as routine 
maintenance (including repair of minor damage typically expected from 
normal seasonal weather conditions), preventative maintenance, or 
reconstruction due to the normal ``wear and tear'' effects experienced 
over the life of a facility.
    Vermont Agency of Transportation recommended that FHWA add a 
definition of ``resilience'' to the rule, to acclimate States to the 
terminology and its integration as a transportation value and 
performance metric. The FHWA agrees the concept of resilience, and its 
integration in transportation planning and project development, are 
important. The FHWA expects resilience will be a consideration in the 
evaluation of reasonable alternatives under part 667, particularly 
resilience to extreme weather events and climate change. The FHWA does 
not believe it is necessary to define the term in part 667 because it 
is defined in FHWA Order 5520, Transportation System Preparedness and 
Resilience to Climate Change and Extreme Weather Events (December 15, 
2014). The Order defines ``resilience'' as ``. . . the ability to 
anticipate, prepare for, and adapt to changing conditions and 
withstand, respond to, and recover rapidly from disruptions.'' That 
definition can be readily applied, without change, to activities under 
part 667.
Final Rule Section 667.5
    The proposed rule did not include any time limit on the scope of 
the evaluations. In the NPRM, FHWA requested comments on whether FHWA 
should establish a limit to the length of the ``look back'' State DOTs 
will do in order to determine whether a road, highway, or bridge has 
been repaired or reconstructed on two or more occasions. The FHWA also 
requested comments on what would be an appropriate and feasible length 
of time. Twenty-six commenters addressed FHWA's questions.
    Eighteen commenters agreed that FHWA should establish a limit to 
the length of the ``look back.'' The range of comments on an 
appropriate and feasible length of time varied from as few as 5 years, 
to nearly 40 years. Commenters who suggested shorter lengths of time 
for the look-back expressed concern that some States have issues 
regarding the availability or reliability of data on repairs or 
reconstructions due to emergency events, or that it would be time-
consuming to conduct an inventory for a longer period of time. The 
specific comments suggested the following time frames:
     The State DOTs of Mississippi, Tennessee, and Virginia 
suggested that the look-back period should be 5 years.
     Delaware DOT stated that the period should be between 5 
and 10 years.
     Four State DOTs, an association of governments, and one 
MPO recommended that the period be capped at 10 years.\62\
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    \62\ Atlanta Regional Council, Washington State DOT, South 
Dakota DOT, New Jersey DOT, Maryland DOT, New York State Association 
of MPOs.
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     North Carolina DOT and Oregon DOT suggested 20 years for 
the length of the length of the look back.
     The remaining commenters who provided feedback, including 
AASHTO and nine State DOTs, suggested the length of time be less than 
40 years.\63\ However, one of the commenters, while agreeing with the 
stance of less than 40 years, suggested a substantially shorter 
timeframe (e.g., 7 years). The rationale for limiting the length of 
time to less than 40 years was that this time period aligns 
approximately with the Disaster Relief Act of 1974, and that any time 
period longer than 40 years would require State DOTs to examine older, 
non-computerized records.
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    \63\ AASHTO; Colorado DOT, Connecticut DOT, Florida DOT; North 
Dakota DOT; DOTs of ID, MT, ND, SD, WY (joint submission).
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    West Piedmont Planning District Commission stated that FHWA did not 
need to establish a limit on the length of the look-back, and Missouri 
DOT commented that FHWA should provide flexibility in the time for the 
evaluation period.
    Several State DOTs commented on the question of time periods, but 
focused on aspects other than whether FHWA should establish a look-back 
limit.\64\ Instead, most of them expressed the need for more 
clarification, specifically that the rule should define the frequency 
interval by which repeated repairs/reconstruction should be measured 
(e.g., two repairs during a period of 10 years). Texas DOT said FHWA 
should clarify the interval threshold for triggering an evaluation, 
meaning FHWA should specify the length of time between two repairs or 
reconstructions due to an emergency. Mississippi DOT requested that 
FHWA identify the applicable time period within which repair or 
reconstruction activities would have to occur in order to trigger 
application of the evaluation requirement.
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    \64\ Georgia DOT, Hawaii DOT, Minnesota DOT, Texas DOT, Vermont 
DOT, Wyoming DOT.
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    In response to these comments, FHWA considered both the time period 
that should be covered by an evaluation (the ``look-back'' period), and 
whether the rule should establish a parameter for how close in time 
repairs or reconstruction on a facility must occur in order to fall 
under the regulation. Based on the comments received and the purpose of 
the statute, FHWA determined a 20-year ``look back'' is the most 
appropriate time span for the first evaluation. The FHWA chose the 20-
year period for the starting point because FHWA shares commenters 
concerns about the availability of data, especially for older work. The 
necessary repair and reconstruction records likely are reasonably 
available for at least the last 20 years. Many of those records also 
are likely to be in electronic form, which will facilitate analysis. 
However, to further address commenters' concerns, FHWA included 
provisions on data availability in the final rule, as discussed below. 
The FHWA also elected to adopt a specific starting date for the look-
back, to avoid any potential uncertainty about the starting point for 
the evaluations.
    Accordingly, final rule Sec.  667.5(a) establishes January 1, 1997, 
as the beginning date for the evaluations. The final rule also provides 
the end date for evaluations can be no earlier than December 31 of the 
year preceding the deadline for completion of the evaluation in 
question. Under these two provisions, the first State DOT

[[Page 73253]]

evaluation will cover a period of approximately 20 years. Subsequent 
evaluations will build on the first evaluation by continuing to use the 
January 1, 1997 starting date.
    The FHWA agrees with commenters it would be useful to clarify in 
the final rule whether there is a frequency interval between repair/
reconstruction incidents that determines whether a facility must be 
included in the evaluation (e.g., two repairs during a period of 10 
years). The comments make it evident adding a specific provision on 
this question would help eliminate potential confusion and uncertainty 
about the requirements under the rule. In deciding how to address this 
issue, FHWA considered that one important objective of the rule is to 
focus evaluation efforts on facilities where repeated repair and 
reconstruction activities suggest the presence of some underlying 
problem or condition. In cases where there is an underlying problem or 
condition, such as location or design, contributing to the damage, 
repeated reinvestment without considering alternative actions is 
potentially wasteful. The amount of time that elapses between events 
may be, or may not be, relevant to whether there is a need to consider 
alternative actions.
    After balancing the considerations raised by the comments, FHWA 
adopted a requirement in the final rule that State DOTs must include 
all facilities that have required repair and reconstruction due to 
emergency events on two or more occasions during the time period 
covered by an evaluation. The FHWA concluded this choice will help 
ensure State DOTs have a growing body of data to help them recognize 
potential trends in damage to particular facilities, and will ensure 
evaluations over time capture any facilities suffering a second damage 
incident after the date of the first evaluation. In the case of 
emergency events, particularly natural disasters, it often is necessary 
to look at long periods of time to ensure weather and other relevant 
trends are recognized. However, FHWA acknowledges the length of time 
between the incidents may affect a State DOT's assessment of what may 
be a reasonable alternative, as well as the priority a State DOT may 
assign to resolving the problems affecting the facility.
    For example, when incidents of repair and reconstruction due to 
emergency events for a facility occurred more than 20 years apart, even 
if the root cause of the damage was the same in both incidents, the 
State DOT evaluation may conclude addressing the underlying problem is 
a low priority because the probability of recurrence is relatively low. 
In addition, State DOT evaluations should take into account all 
relevant facts in assessing reasonable alternatives, and that 
assessment may indicate that the two incidents do not reflect a common 
underlying problem that can be mitigated, or partially or fully solved, 
through one course of action. Accordingly, Sec.  667.5(a) of the final 
rule provides that, subject to the timing provisions in Sec.  667.7 of 
the final rule, evaluations must include any road, highway, or bridge 
(as defined in the rule) that on or after January 1, 1997, required 
repair and reconstruction on two or more occasions because of emergency 
events.
    Several commenters raised concerns related to the availability of 
the data needed to perform the required evaluations. Some commenters, 
like Tennessee DOT, stated the evaluation period should be short enough 
to ensure good records existed for repairs and reconstruction performed 
as a result of emergency events. Others, like Mississippi DOT, stated 
it would likely prove difficult to obtain necessary data from local 
entities. Several NPRM commenters referred to their concerns about data 
access or availability as the reasons for suggesting evaluation 
requirements apply only to NHS pavements and bridges. As a result of 
the comments received on the NPRM, FHWA added a provision to Sec.  
667.5(b) of the final rule, limiting the State DOT's responsibility to 
using reasonable efforts to obtain the data needed for the evaluations. 
If the State DOT determines the needed data is not reasonably available 
for a road, highway, or bridge, the State DOT must document that fact 
in the evaluation.
    The NPRM did not propose to specify data sources or data 
requirements in the rule. The FHWA requested comments on whether the 
rule should include such provisions, and what data sources would be 
most appropriate. Ten commenters addressed FHWA's questions. The AASHTO 
and several State DOTs remarked that the rule should not address the 
types of data that should be considered.\65\ Three State DOTs said the 
regulation should address the types of data that should be considered 
in the evaluation. Washington State DOT requested that FHWA specify 
data sources regarding locations that have been declared a state of 
emergency and the projects on the NHS that have been funded through 
emergency conditions. Tennessee DOT suggested that only FHWA or FEMA 
emergency funds records should be considered, as they would coincide 
with the presidential disaster declaration requirement in the proposed 
rule. Oregon DOT urged that the rule should only specify the types of 
data that normally should be considered, and that the rule direct State 
DOTs to base evaluations on the best data available, to provide a 
discussion of data sources used, and a discussion of problems or 
limitations associated with carrying out the evaluations.
---------------------------------------------------------------------------

    \65\ AASHTO, Connecticut DOT, Delaware DOT, Georgia DOT, New 
Jersey DOT, Oregon DOT, Virginia DOT.
---------------------------------------------------------------------------

    In response, FHWA notes that States will have the most 
comprehensive knowledge about both State and federally declared 
disasters affecting their facilities, as well as about which events 
involved damage to title 23-eligible transportation facilities in the 
State. Therefore, in the final rule FHWA does not set a requirement for 
the types of data States should use. Under Sec.  667.5(c) of the final 
rule, States may use whatever data types and sources they believe 
useful. The FHWA interprets this provision as implicitly requiring the 
States to apply reasonable data quality standards in selecting what 
data will be useful. The final rule indicates available data sources 
include reports and other information required to receive Emergency 
Relief Program funds, as well as other sources used to apply for 
Federal or non-Federal funding, and State or local records pertaining 
to damage sustained and/or funding sought.
NPRM Section 515.019(c)) (Final Rule Section 667.7)
    The proposed rule would have established a phased approach to the 
required evaluations (see NPRM Sec.  515.019(c)). The proposed rule 
gave State DOTs 2 years after effective date of the final rule to 
complete evaluations for NHS highways and bridges and any other assets 
included in the State DOT's asset management plan. The State DOTs would 
have 4 years after the effective date of the final rule to complete the 
evaluation for all other roads, highways, and bridges meeting the 
criteria for evaluation. Under the proposed rule, State DOTs would 
update evaluations after every emergency event to the extent needed to 
include facilities affected by the event, and would perform a full 
review and update at least every 4 years after completion of the first 
evaluation of the NHS. In the NPRM, FHWA requested comments on whether 
the time frames for the initial evaluations were appropriate and, if 
not, how much time ought to be allotted. The FHWA also requested 
comments on

[[Page 73254]]

the appropriateness of the timing for update requirements.
    Six commenters responded to FHWA's question about the deadline for 
the initial evaluation of NHS assets and other assets included in State 
DOT asset management plans. The State DOTs of Delaware, New Jersey, 
Virginia, and Washington State said the 2 years allotted for the 
initial evaluations of these assets was appropriate. Oregon and 
Tennessee DOTs argued that they could not answer the question without 
knowing more specific information about the evaluation process, such as 
the length of the look-back, the scale of repair to be considered, and 
the availability of data. One of these commenters urged FHWA to provide 
flexibility to States regarding the timeframe.
    With regard to the evaluation deadline for all other facilities 
covered by the rule, nine commenters responded. The State DOTs of 
Delaware, New Jersey, and Virginia stated that the 4 years allotted for 
the first evaluation of such other facilities was appropriate. Oregon 
and Tennessee DOTs remarked that an appropriate timeframe depends on 
the complexity and sophistication of the expected evaluations, data 
availability, and other factors. Two commenters associated the time 
needed with the scope of the phrase ``roads, highways, and bridges.'' 
Washington State DOT asked for additional clarification of the term 
``all other roads, highways and bridges,'' including whether this 
phrase is meant to include all public roads (e.g., State non-NHS 
routes, county routes, city routes). Connecticut DOT suggested that the 
final rule exclude federally owned facilities from this evaluation.
    The FHWA received a number of comments relating to the proposed 
provisions on updating evaluations after emergency events. Texas DOT 
requested clarification of the extent of the additional evaluation of 
the assets after emergency events. South Dakota DOT said updating the 
data every time there is an emergency event would be extremely 
burdensome. The AASHTO and Connecticut DOT said an exemption from 
providing an update should be provided if, during the period, the State 
did not experience an applicable disaster over a certain financial 
threshold (e.g., $1 million). Oregon DOT argued that completing the 
proposed evaluation in conjunction with undertaking a repeated repair 
or replacement project would eliminate the need for a periodic update 
cycle. North Carolina DOT asked whether the phrase ``to the extent 
needed to include facilities affected by the event'' (NPRM Sec.  
515.019(c)) would require States to include ferry approaches, ferry 
terminals, alternate routes, or detour routes in addition to the route 
causing an update to the evaluation.
    Fifteen commenters addressed FHWA's question on whether a 4-year 
general update for statewide evaluations would be appropriate, and if 
not, then what would be a reasonable timeframe. Eight State DOTs stated 
that a 4-year general update was appropriate.\66\ Tennessee DOT argued 
that a 4-year update should be feasible, provided that only repairs 
requiring disaster funding would be considered after the initial 
evaluation is complete. Georgia and Mississippi DOTs suggested that the 
update cycle align with the STIP development cycle. Maryland DOT 
suggested that the cycle align with the cycle for the ``Bridge and 
Pavement Management Systems.'' The city of Wahpeton, ND said the update 
cycle should be lengthened to 10 years, because the economic viability 
of a facility would not likely change over a 4-year period. Maryland 
DOT stated if there has not been a declared state of emergency, or no 
damage occurred as a result of a State-declared state of emergency 
within an allotted number of years, this evaluation should not be 
required.
---------------------------------------------------------------------------

    \66\ Delaware DOT, Georgia DOT, Maryland DOT, Mississippi DOT, 
New Jersey DOT, Tennessee DOT, Virginia DOT, Washington State DOT.
---------------------------------------------------------------------------

    In developing the final rule, FHWA considered all of these comments 
on evaluation deadlines and updates, along with related comments 
submitted with regard to the definition of ``roads, highways, and 
bridges.'' The FHWA acknowledges the potential burdens on State DOTs 
caused by the breadth of the MAP-21 section 1315(b) mandate, and 
believes these burdens ought to be considered when determining the 
timing for the first evaluation and the frequency of evaluations 
required for the varying types of roads, highways, and bridges covered 
by the rule. Given the various factors, FHWA concluded the purposes of 
the statute (conservation of Federal resources and protection of public 
safety and health) can best be accomplished by focusing State DOT 
efforts primarily on NHS roads, highways, and bridges. The FHWA also 
concluded it would be reasonable to require evaluation of a non-NHS 
facility only when there is some plan to do work on the facility. 
Accordingly, FHWA substantially revised the evaluation deadlines and 
evaluation update provisions in the final rule. The final rule divides 
the periodic evaluation requirement into the following two categories:
     States must complete the first evaluations for NHS roads, 
highways, and bridges within 2 years after the effective date for part 
667. States must update the evaluation of NHS facilities after 
emergency events, as well as on a regular 4-year cycle (see final rule 
Sec.  667.7(a)).
     States may defer the evaluations of roads, highways, and 
bridges not included in Sec.  667.7(a) for 4 years after the effective 
date for part 667, and those evaluations will be required based on a 
timeline tied to the proposal of a project on the road, highway, or 
bridge (see final rule Sec.  667.7(b)). Prior to including any project 
relating to a road, highway, or bridge subject to Sec.  667.7(b) in its 
STIP, the State DOT must prepare an evaluation that conforms to part 
667 for the affected portion of the facility. Because the evaluation is 
project-based, each time a project is proposed for inclusion in the 
STIP there will be an evaluation. For that reason, no separate update 
requirement is needed.
    The FHWA believes this approach is consistent with the objectives 
of MAP-21 section 1315(b) and is within FHWA's discretion to interpret 
the meaning of ``periodic evaluation'' in the statute. The revisions 
adopted in the final rule should address the concerns expressed by some 
commenters about the potential burden on State DOTs, and the need for 
alignment between the evaluation requirements and asset management plan 
requirements. The final rule limits the highest level of effort to 
regular evaluations of assets that are of high Federal interest and 
must be in State DOT asset management plans. Evaluations for other 
roads, highways, and bridges are required only when there is some 
reasonable likelihood work will be performed on those facilities.
    In response to North Carolina DOT's question about the intended 
scope of the phrase ``to the extent needed to include facilities 
affected by the event'' in NPRM Sec.  515.019(c), FHWA has revised the 
language in the final rule. The new language substitutes the phrase 
``roads, highways, and bridges'' for the word ``facilities.'' As a 
result, infrastructure features like ferry approaches, ferry terminals, 
alternate routes, or detour routes would be included if they meet the 
rule's definition of ``roads, highways, and bridges.''
    The FHWA concluded the remaining comments on these issues did not 
warrant a change in the final rule. In response to Texas DOT's question 
about the extent of the update after an emergency event, FHWA clarifies 
that

[[Page 73255]]

the level of information added should be commensurate with the kind of 
information the evaluation already contains. In addition, FHWA notes 
that updates after an emergency event are for the purpose of adding 
newly qualifying roads, highways, or bridges, or modifying information 
on facilities already in the evaluation. Because the evaluations are 
intended to help avoid repeated investment in facilities that are 
damaged on a recurring basis, FHWA does not believe the dollar amount 
of the damage from a particular emergency event or during a particular 
time period is relevant. For that reason, FHWA declines to adopt the 
suggestions from AASHTO, Connecticut DOT, and Maryland DOT that State 
DOTs be exempt from update requirements if, during the 4-year period 
between the required updates, the State did not experience an 
applicable disaster or did not have a disaster over a certain financial 
threshold (e.g., $1 million). However, FHWA notes if no emergency event 
(as defined in the rule) occurs during the evaluation period, the new 
evaluation may simply state that fact and indicate the new evaluation 
covers the same roads, highways, and bridges as the previous 
evaluation.
    Similarly, FHWA declines Tennessee DOT's suggestion that post-
emergency event updates should be limited to repairs requiring disaster 
funding. As previously discussed, the statutory requirements in MAP-21 
section 1315(b) are not linked to eligibility for disaster funding. The 
FHWA disagrees with Oregon DOT's comment that, if a remedial project is 
completed, there is no need for periodic evaluation updates. Even if 
remedial work has been done on a facility, it will still be important 
to know whether that facility is damaged by an emergency event after 
the remedial work. For that reason, road, highway, and bridge segments 
that meet evaluation criteria are included in the evaluation (including 
updates) even if remedial work on the facility occurs on or after 
January 1, 1997.
    In response to suggestions from Georgia DOT, Mississippi DOT, and 
Maryland DOT about aligning the general update cycle with other 
planning or system management activities, FHWA believes such ideas have 
merit. However, FHWA concluded that State DOTs may have different 
preferences about which activities they want to align with the 
evaluation updates. Based on the likely differences in State DOT 
practices and views, FHWA has not attempted to align the evaluation 
update cycles in Sec.  667.7(a) with other activities, but notes State 
DOTs may take steps to do so as long as they meet the minimum update 
requirements in the final rule.
    Finally, Missouri DOT noted a possible typographical error in the 
section-by-section discussion in the NPRM (80 FR 9231, at 9238 
(February 20, 2015)), and suggested that ``affects'' should be changed 
to ``affected.'' The FHWA appreciates the comment, but because the 
comment relates to language in the NPRM preamble that does not appear 
in this final rule, no response is needed.
NPRM Section 515.019(d) (Final Rule Section 667.9)
    Under NPRM Sec.  515.019(d), State DOTs would have to include in 
their 23 U.S.C. 119(e) asset management plans the results of MAP-21 
section 1315(b) evaluations for any roads, highways, and bridges in 
their asset management plans. In the NPRM, FHWA requested comments on 
two issues: (1) Whether the rule should require States to consider the 
evaluations prior to requesting title 23 funding; and (2) whether the 
rule should address when and how FHWA would consider the evaluations of 
reasonable alternatives in connection with a project approval.
    Ten commenters addressed the proposed language on inclusion of 
information from the evaluations in the State DOT asset management 
plans. The FHWA received similar comments on the proposal to include an 
evaluation information requirement as part of the asset management plan 
processes for risk management analyses. Both sets of comments, and 
FHWA's responses, are discussed in the above section-by-section 
discussion of NPRM Sec.  515.007(a)(3). The FHWA decided the use of 
evaluation information in asset management plans is best addressed in 
the asset management regulations in part 515. For this reason, FHWA 
removed the proposed language from the section 1315(b) provisions in 
NPRM Sec.  515.019(d). Section 515.7(c) of this final rule includes the 
only provisions on inclusion of the section 1315(b) evaluations in 
State DOT asset management plans.
    The FHWA received feedback from ten commenters on its question 
whether to require State DOT consideration of evaluation results prior 
to requesting title 23 funding for a project. All of the commenters--
AASHTO and the State DOTs--stated that FHWA should not require States 
to consider the section 1315(b) alternatives evaluation prior to 
requesting title 23 funding for a project.\67\ A few of the commenters 
remarked that developing alternatives might take months or even years 
to complete, which would preclude rapid response to an emergency and 
restoring the functionality of the transportation system as quickly as 
possible. Mississippi DOT argued that when a facility is damaged due to 
an extreme event, the requirement to conduct and submit an evaluation 
for review prior to approval of funding could create an undue hardship 
to the public.
---------------------------------------------------------------------------

    \67\ AASHTO, Connecticut DOT, Delaware DOT, Maryland DOT, 
Mississippi DOT, New Jersey DOT, Oregon DOT, Tennessee DOT, Virginia 
DOT, Washington State DOT.
---------------------------------------------------------------------------

    The FHWA considered these comments and agrees that the rule should 
not include a specific milestone requirement. The FHWA also concluded 
that the purpose of the rule cannot be achieved if State DOTs and FHWA 
do nothing to take the evaluation results into consideration. After 
considering the statutory purpose and potential burdens on State DOTs, 
FHWA concluded the final rule should require State DOTs to consider the 
information, but provide flexibility in terms of when that 
consideration occurs. The final rule (Sec.  667.9(a)) requires State 
DOTs to consider the results of an evaluation when developing projects 
involving facilities subject to part 667, and encourages the State DOTs 
to include consideration of the evaluations in the transportation 
planning process and the environmental review process.
    The FHWA notes that part 667 is intended to support long-term 
investment decisionmaking in a manner that results in the conservation 
of Federal resources and protection of public safety and health. These 
objectives can most easily be accomplished if the evaluations are 
considered early in the project development process. However, in terms 
of compliance with part 667, State DOTs are free to decide when in the 
overall project development process they wish to consider the 
information. The final rule expressly provides that State DOTs are not 
prohibited from responding immediately to an emergency, and restoring 
the functionality of the transportation system as quickly as possible, 
or from receiving funding under the Emergency Repair Program.
    The FHWA received comments from ten parties on its question whether 
the rule should specify when and how FHWA would consider MAP-21 section 
1315(b) evaluations. The State DOTs of Connecticut, Delaware, Maryland, 
and New Jersey stated that FHWA should not address when and how it 
would consider the section 1315(b) alternatives evaluation in 
connection with FHWA

[[Page 73256]]

project approval. The State DOTs of Georgia, Oregon, and Tennessee said 
FHWA should address how it will consider the alternatives evaluation. 
Washington State DOT suggested that FHWA provide clarification on the 
intent of when and how FHWA would consider the section 1315(b) 
alternatives. Mississippi DOT argued that States should be given 
maximum flexibility to address damage due to extreme events because 
upgrading a facility to address a given probability of future repairs 
could be financially impractical.
    The FHWA considered these comments and the purposes of the 
underlying statute. The FHWA also viewed these issues in the context of 
its risk-based stewardship and oversight approach to program 
administration. As a result, FHWA decided the final rule should not 
specify a particular milestone at which FHWA would consider evaluation 
results. The FHWA also concluded the final rule should not prevent FHWA 
from considering the evaluations when appropriate. Accordingly, Sec.  
667.9(c) of the final rule provides FHWA will periodically review the 
State DOT's compliance with part 667. This review will include looking 
at whether the State is performing the evaluations and considering the 
results in a manner consistent with part 667.
    The FHWA will also consider whether the evaluations are having the 
beneficial effects on investment decisions that the statute promotes, 
for the purpose of assessing nationally whether the regulation is 
effective. In addition, Sec.  667.9(c) makes it clear that FHWA may 
consider the results of the evaluations when relevant to an FHWA 
decision, including when FHWA makes a planning finding under 23 U.S.C. 
134(g)(8), when it makes decisions during the environmental review 
process for projects involving roads, highways, or bridges subject to 
part 667, or when FHWA approves funding.
    The NPRM Sec.  515.019(e) proposed requiring State DOTs to make 
MAP-21 section 1315(b) evaluations available to FHWA on request. The 
FHWA did not receive any comments on this provision. In the final rule, 
this provision is included in Sec.  667.9(c).
    The AASHTO suggested that the cross-reference in Sec.  515.019(d) 
appears to be incorrect, and stated FHWA should instead reference Sec.  
515.007(a)(3). The FHWA appreciates the comment, as the NPRM citation 
was incorrect. However, FHWA decided to eliminate the provisions in 
NPRM Sec.  515.019(d) from the final rule, and thus the citation is not 
used in part 667.

C. Other Comments

    The FHWA received a number of comments that did not relate to 
specific proposals in the NPRM. This section addresses those comments.
    The Atlanta Regional Commission encouraged FHWA to consider how a 
State asset management plan relates to other mandated planning products 
required by Federal law, in particular the Statewide Transportation 
Plan. Similarly, South Carolina DOT stated that guidance on the 
relationships between the asset management plan and other planning 
documents (e.g., Multimodal Transportation Plan and STIP) should be 
provided to ensure consistency in the way States implement asset 
management.
    In response, FHWA believes that final rule's requirement for 
integration of the asset management plan with the planning processes 
addresses this request (see Sec.  515.9(h) of the final rule). The 
relationships between the asset management plan, other performance 
plans, and the planning process is also addressed in the planning 
statutes, 23 U.S.C. 134(h)(2)(D) and 23 U.S.C. 135 (d)(2)(C), and their 
implementing regulations in 23 CFR 450.206(c)(4) and 23 CFR 
450.306(d)(4). The FHWA does not believe additional guidance on the 
relationships between the asset management plan and other planning 
documents is needed at this time.
    Alaska DOT said the statement in the NPRM's Executive Summary (80 
FR 9231, 9232) that ``FAHP once primarily funded major new location 
infrastructure projects, today the FAHP primary focuses on preserving 
existing infrastructure through preventative maintenance and 
reconstruction'' is inaccurate because some States still need to spend 
Federal funds on expanding infrastructure.
    In response, FHWA agrees that there are States that still need to 
spend portion of their Federal funds on expanding infrastructure. 
However, the FAHP's primary focus today is on maintaining the existing 
infrastructure rather than expanding it.
    Virginia DOT recommended that FHWA commit resources to assisting 
State DOTs in developing the asset management plan, such as periodic 
meetings and expert assistance from FHWA's consultants. The commenter 
also asked FHWA to provide an example of an overall asset management 
plan that meets their minimum requirements.
    In response, FHWA notes it will continue to present Webinars, 
undertake Peer Exchanges, provide training, conduct meetings, and 
undertake other information sharing and technical assistance type 
activities with regard to asset management and developing asset 
management plans. For example, FHWA has developed and presented 
training pertaining to development of asset management plans, 
developing training focused on asset management financial planning, 
conducted bi-monthly Webinars on asset management-related topics, and 
conducted pilot studies with products that benefits all States. In 
addition, in the last 2 years, FHWA has provided technical assistance 
to 15 States to conduct an asset management gap analysis for 
strengthening their current asset management practices. Examples of 
asset management plans prepared prior to this final rule are available; 
however, as of the publication date of this final rule, FHWA has not 
reviewed those plans to determine whether they are consistent with the 
requirements of this final rule.
    Maryland DOT said FHWA should note in the final rule that, because 
of non-data driven variables used in developing a program of asset 
management, the answers to asset management's five core questions as 
outlined in the NPRM's Executive Summary (80 FR 9231) \68\ represent a 
snapshot in time of how a State DOT might approach managing its assets, 
relative to fiscal and policy constraints, which could change with new 
leadership or other, external events.
---------------------------------------------------------------------------

    \68\ The NPRM's five core questions: What is the current status 
of our assets? What is the required condition and performance of 
those assets? Are there critical risks that must be managed? What 
are the best investment options available for managing the assets? 
What is the best long-term funding strategy?
---------------------------------------------------------------------------

    In response, FHWA acknowledges that States may have their own 
fiscal and policy constraints and agrees that the asset management plan 
for the NHS would need to be implemented consistent with State 
requirements, but with the understanding that Federal requirements as 
described in this final rule must also be met. The answers to the five 
questions may seem to be a snap-shot in time. However, the respondents 
will belong to different agencies with different business practices and 
local requirements. Therefore, the responses collectively cover many 
different scenarios that help with developing an implementable 
approach.
    Washington State DOT said that it could not locate the chart, 
identified on in the NPRM (80 FR 9231, 9240), as showing the 
interaction of the proposed asset management processes and related 
requirements.

[[Page 73257]]

    In response, FHWA notes the chart was placed in the rulemaking 
docket on April 14, 2015.
    A private citizen said the NHS should be evaluated to decide 
whether the new NHS additions required by MAP-21 can be supported by 
the DOT. Oregon DOT said FHWA should add to the final rule a thorough 
discussion of the attributes of an NHS route and what should or should 
not be a part of the NHS.
    In response, FHWA notes that a discussion of new NHS additions and 
the attributes of an NHS route are outside the scope of this rule.
    New York State DOT said compounding these proposed rules is the 
fact that MAP-21 dedicates two-thirds of Federal-aid funding to the NHS 
in the form of NHPP funds. The commenter stated that, if a State does 
not meet minimum thresholds for Interstate pavement conditions, it will 
be forced to divert funds from its STP to meet the requirement, which 
would further limit investments in a critical part of the 
transportation system. In addition, the commenter stated that, if a 
State does not meet minimum NHS bridge conditions, it must ensure that 
minimum investment levels are achieved, which could also cause a 
diversion of funds from other asset management driven needs.
    In response, FHWA notes that a discussion of funding and diversion 
of funds from STP to NHPP is outside the scope of this rule.
    A private citizen said each State DOT should have a better 
understanding of the MAP-21 requirements, noting that FHWA has not 
offered any formal MAP-21 on-site seminars. This same commenter said a 
relational database management system would have to be established to 
support all on-system work.
    In response, FHWA notes these comments fall outside the scope of 
this rulemaking, but points out FHWA conducted a public Webinar on 
April 1, 2015, to explain the proposed asset management regulations in 
lieu of on-site Webinars.

VII. Rulemaking Analyses and Notices

Executive Order 12866 (Regulatory Planning and Review), Executive Order 
13563 (Improving Regulation and Regulatory Review), and DOT Regulatory 
Policies and Procedures

    The FHWA has determined that this action does not constitute a 
significant regulatory action within the meaning of Executive Order 
12866 or within the meaning of DOT's regulatory policies and 
procedures. The FHWA determination that the final rule is 
nonsignificant is based on important differences between the proposed 
rule and the final rule. The final rule lessens requirements placed on 
States, increases flexibility afforded State DOTs, and reduces the 
potential for uncertainty in the application of the rule. The FHWA made 
the changes in the final rule in response to comments received.
    The FHWA determined that this action is not economically 
significant within the meaning of E.O. 12866. Additionally, this action 
complies with the principles of Executive Order 13563. The rule is 
expected to have benefits that exceed its costs, and the rule will not 
require expenditures by State, local, or tribal governments that exceed 
the $151 million threshold under the Unfunded Mandates Reform Act. 
These changes are not anticipated to adversely affect, in any material 
way, any sector of the economy. In addition, these changes will not 
create a serious inconsistency with any other agency's action or 
materially alter the budgetary impact of any entitlements, grants, user 
fees, or loan programs. Therefore, a full regulatory evaluation is not 
necessary.
    The FHWA is presenting a RIA in support of this final rule. The RIA 
estimates the economic impact, in terms of costs and benefits, on State 
DOTs as required by E.O. 12866 and E.O. 13563. This section of the 
final rule identifies and estimates costs and benefits resulting from 
the rule. The complete RIA may be accessed in the rulemaking's docket 
(FHWA-2013-0052).
    The FHWA received a number on comments on the RIA that was prepared 
in support of the NPRM. Those comments, and FHWA's responses, are 
summarized below.
Comments on Estimated Costs
    Seventeen commenters addressed the estimated costs included in the 
RIA.\69\ The majority of comments stated that the RIA underestimated 
the cost of developing and implementing an asset management plan in 
compliance with the proposed rule.
---------------------------------------------------------------------------

    \69\ AASHTO; Arkansas DOT; Connecticut DOT; Georgia DOT; 
Michigan DOT; Mississippi DOT; New York Metropolitan Transportation 
Council; New York State DOT; Oregon DOT; South Carolina DOT; South 
Dakota DOT; Tennessee DOT; Texas DOT; Vermont Agency of 
Transportation; Wyoming DOT; DOTs of ID, MT, ND, SD, and WY (joint 
submission), The City of Wahpeton, ND.
---------------------------------------------------------------------------

    The Mississippi DOT stated that the figures suggest expenditures by 
the States at approximately $60,000 per year over a 12-year period, 
which it felt was very low. Given the complexity of developing and 
implementing the asset management plan, it cited the need to assign 
numerous staff to the effort. In addition, they noted that many State 
DOTs do not have the in-house staff to conduct various aspects of the 
asset management plan, which would require consultants and additional 
resources for the operational components associated with inventory 
management, data collection, verification, and analysis. They also felt 
that the operational cost to implement and maintain the plan would be 
significant and that the cost of implementing the asset management plan 
did not appear to be included in the estimated cost of implementing the 
rule.
    The Oregon DOT said that both the costs and time period to develop 
an asset management plan and implement the requirements are 
underestimated since the financial and staffing costs would be 
significant, as indicated by their own estimates. The AASHTO remarked 
that the cost estimated by FHWA underestimates the professional staff 
time and other costs needed to comply with all of the items in the 
action given the complexity of the rule. They expanded on this remark, 
saying that the estimate does not cover the cost to build, track, and 
submit the asset management plan, does not include all of the other 
staff work needed to support this system, and does not seem to consider 
that States would have to change various data collection and analyses 
processes in order to develop the specific type of proposed asset 
management plan. The Florida and North Dakota DOTs concurred with the 
comments submitted by AASHTO. The Connecticut DOT noted that in 
Connecticut, the estimated cost for asset management is about $3 
million annually including labor, software, training, and consultant 
services for asset management, bridge management, and pavement 
management units.
    The Texas DOT stated that the proposed rule (and other rulemakings 
on National Performance Measures) would create an onerous program. The 
South Dakota and Wyoming DOTs said that FHWA should significantly 
reduce the requirements and burdens that the proposed rule would impose 
on State DOTs. In a joint submission, five State DOTs commented that 
States already do asset management work, and that the cost of complying 
with the proposed rule would exceed FHWA's estimates. They suggested 
that FHWA should significantly reduce the requirements and burdens.\70\ 
The South Carolina DOT said that most State DOTs are already measuring 
their infrastructure

[[Page 73258]]

conditions and will continue to use their existing performance measures 
for reporting to their legislators and stakeholders. This State DOT 
stated that measuring condition, inspection frequency, and performance 
vary according to the geographic location, weather conditions 
(including extreme weather), and the size of the State's NHS, which 
could make assessment difficult and the cost of implementation 
disproportionate.
---------------------------------------------------------------------------

    \70\ DOTs of ID, MT, ND, SD, and WY (joint submission).
---------------------------------------------------------------------------

    In response to these comments, FHWA conducted additional research 
by contacting 5 of the 9 States that were initially used as the basis 
for developing cost estimates (approximately 10 percent of 52 DOTs) to 
validate or update the estimated compliance costs of the rule. Four of 
the five states estimated higher costs than provided in the initial 
analysis, reflecting additional labor time and/or consultant costs to 
complete an asset management plan anticipated to be compliant with the 
rule. As a result of the revised figures, FHWA has increased the staff 
and consultant cost estimate for developing a compliant asset 
management plan by approximately 23.7 percent. This increase was based 
on an 80 percent increase in the estimated cost for developing an in-
house asset management plan, to an average of $306,000 per State, and a 
19.9 percent increase in the cost of developing a consultant-supported 
plan, to an average of $472,058 per state, for the initial plans.
    For the plan updates, which would be required every 4 years, the 
RIA includes costs equal to half of the total cost of the initial plan, 
so the adjustment in the initial plan development costs also are 
factored in as higher costs for plan updates. The FHWA believes these 
revised cost estimates are reasonable, and may actually overestimate 
the cost of the rule since several of the State DOTs that provided cost 
estimates included assets or system coverage in their plans that go 
beyond the requirements of the rule, and these costs were substantial 
for at least one State. Moreover, many States have already incorporated 
some of the asset management practices into their investment planning 
processes so some of the costs estimated for the development of the 
Transportation Asset Management Plans likely would have been incurred 
even in the absence of the rule.
    The FHWA acknowledges that some States may not have the in-house 
staff with appropriate skills to develop an asset management plan. This 
was accounted for in the original RIA by assuming that only one-third 
of the States will develop their asset management plans in-house, while 
two-thirds will use contractors. In response to the comment about not 
including the cost of implementing the asset management plan, the RIA 
cost estimate did not include the cost associated with inventory 
management and data collection and verification because this activity 
was included in the RIA developed for the Pavement and Bridge Condition 
Performance Measures NPRM.\71\ However, data analysis was taken into 
account in the estimated costs of developing the asset management plan.
---------------------------------------------------------------------------

    \71\ See the RIA for the Pavement and Bridge Condition 
Performance Measures NPRM at rulemaking docket FHWA-2013-0053.
---------------------------------------------------------------------------

    The FHWA also acknowledges that this rule and its requirements may 
require some States to perform additional analyses above their current 
practices; however, the burden on the States has been minimized by 
allowing them to develop their own unique processes that address their 
needs, align with their asset management maturity level, include State-
specific targets, and allow States to decide on the level of investment 
based on various strategies. The FHWA acknowledges that the level of 
effort and cost for developing and implementing an asset management 
plan varies from one State to another and agrees that the cost depends 
on the confidence level that each State may find acceptable with 
regards to inventory size, data quality, complexity of method of 
analysis, and other factors.
    The RIA in the NPRM assumed that only four States do not currently 
have pavement and bridge management systems that meet the minimum 
standards in the proposed rule, and based on that assumption, included 
costs for those four States to acquire these management systems. 
Several commenters argued that even States with existing bridge and 
pavement management systems would incur costs to bring those existing 
management systems into compliance with the proposed rule. 
Specifically, Tennessee DOT said that State DOTs would need to spend 
more to use their existing pavement and bridge management systems. The 
Tennessee DOT also said that its existing management system lacks some 
of the required tools to meet the MAP-21 requirements, that the agency 
would need to purchase and/or develop an enterprise asset management 
system to evaluate funding decisions between different assets, and that 
there would be costs in consulting and/or personnel costs for the 
additional data and reporting requirements. The New York State DOT said 
that the costs of recent system implementations (Agile Assets or 
Deighton for pavement and bridge management) should also be considered. 
The Michigan DOT said that the estimates do not mention the cost of 
developing forecasting tools designed around pavement and bridge 
performance measures established by FHWA, stating that these tools 
would be needed to forecast infrastructure conditions under alternative 
investment scenarios and to establish investment strategies required 
under section 515.009. The Michigan DOT estimated that the cost to make 
changes to comply with the proposed measures would exceed $100,000.
    The FHWA does not believe that purchasing and/or developing an 
enterprise asset management system is necessary to meet the asset 
management plan requirements. Asset management trade-off analyses could 
be accomplished using common tools such as an in-house-developed 
spreadsheet and does not necessitate sophisticated software purchases 
or upgrades. However, FHWA agrees that inclusion of some incremental 
costs for States to develop better forecasts of infrastructure 
conditions is justified. None of the five States that provided updated 
cost information indicated that they require upgrades to their bridge 
and pavement management systems as a result of the NPRM. Nonetheless, 
in response to comments, FHWA has updated the cost estimate to assume 
that, in addition to four States that need to purchase pavement 
management analysis tools, one-third of the remaining States (16) may 
require system upgrades. The cost of these system upgrades was assumed 
to be $150,000 each, on average.
    The AASHTO, Michigan DOT, and Vermont Agency of Transportation 
commented that in addition to the direct costs of collecting data, 
analyzing data, and preparing the asset management plan document, there 
would be costs associated with coordinating with local agencies and 
providing oversight and training to these agencies and jurisdictions. 
The AASHTO noted that the requirements would place new burdens on State 
DOTs, since in most States the State does not own and operate all of 
the NHS assets. As a result, they commented that the rule would require 
counties, toll authorities, and municipalities to provide corresponding 
plans and data for their NHS assets. The Michigan DOT stated that State 
DOTs would incur additional costs to grant local transportation 
agencies access to the State's condition databases. It also noted that 
these transportation agencies (and MPOs)

[[Page 73259]]

would potentially need financial or technical resources to make full 
use of the data.
    In response, FHWA notes that the State DOT staffing costs 
associated with the rule were included in the RIA, and these costs 
should encompass coordination with other agencies. The information 
gathered from FHWA's follow up interviews with the five State DOTs 
indicated that that the costs of coordination were likely to be 
minimal, already incorporated into their cost estimates, or accounted 
for within other planning coordination activities that would have been 
encompassed under other rulemakings. In addition, the five States 
surveyed included two with a significantly higher share of non-State 
owned NHS assets than the national average.
    The city of Wahpeton, ND, asserted that the proposed rule would 
require some number of local governments to maintain asset management 
programs and that the cost per locality of doing so would be 
potentially as high as $60,000 to $70,000 per year.
    The FHWA notes that this rule does not require local governments to 
develop or maintain an asset management plan or program. Thus, the 
costs to the local governments if they voluntarily decide to develop an 
asset management plan were not taken into consideration in the RIA. 
However, because FHWA believes that following an asset management 
framework is the right approach to the management of infrastructure 
assets and because the benefits of asset management are substantially 
higher than the costs, FHWA encourages local governments to consider 
incorporating asset management practices into their current way of 
doing business.
Comments on Estimated Benefits
    Nine commenters commented on the estimated benefits of the rule. 
The AASHTO and five State DOTs commenters stated that the RIA 
overestimated the benefits of developing and implementing an asset 
management plan in accordance with the proposed rule.\72\ These 
commenters argued that the benefits were overestimated because the RIA 
incorrectly assumed that States do not already undertake asset 
management. The AASHTO added that the NPRM did not attempt to identify 
the increase in benefits that would result from implementation of this 
proposed rule by States that have already implemented asset management 
practices. According to AASHTO, the heart of the benefits analysis 
should be identifying the extent that the proposed rule would provide 
benefits over and above the benefits derived from the current asset 
management practices of States. The Mississippi DOT suggested noting in 
the rule that many States have already adopted policies consistent with 
the principles of asset management.
---------------------------------------------------------------------------

    \72\ AASHTO, Arkansas DOT, Mississippi DOT, Tennessee DOT, South 
Dakota DOT, Wyoming DOT.
---------------------------------------------------------------------------

    The Alaska DOT asserted that the benefits of adopting asset 
management into practice had not been proven. The Alaska DOT also 
stated that the costs and benefits of asset management should be better 
analyzed before requiring States to conduct ``detailed life-cycle 
costs'' and to make organizational and cultural changes. The Georgia 
DOT noted that it is challenging to quantify the benefits and costs of 
asset management, but its experience has been that the costs may 
outweigh perceived benefits ``in some cases.'' The Tennessee DOT added 
that it also lacked confidence in the RIA's reported benefit-cost ratio 
because, according to the commenter, the analysis was based on a 20-
year-old study of a single State. The Arkansas DOT concurred with 
AASHTO comments that the costs of the proposed plan would exceed the 
benefits, and said that the requirements would result in highway funds 
being diverted from projects to administrative expenses. The agency 
further commented that the proposals create inefficiency as they do not 
account for the current asset management methodologies used by States. 
The Oregon DOT also encouraged FHWA to reassess the costs and benefits.
    The FHWA acknowledged in the NPRM the limited data on the overall 
benefits of asset management and specifically requested that commenters 
submit data on the quantitative benefits of asset management and 
reference any studies focusing on the economic benefits of overall 
asset management. The FHWA did not receive any comments directly 
providing quantitative benefits, but did receive an example from Oregon 
DOT. The Oregon DOT described its investment in a truck weight station 
preclearance program using an automated intelligent truck 
transportation system instead of building more weigh stations. The 
agency stated that this example illustrates not only the real-world 
benefit of applying asset management principles and practices, but also 
a weakness associated with limiting asset management considerations to 
only the physical condition of assets.
    The FHWA acknowledges this comment and agrees that both States and 
communities will benefit from a broader focus developing their asset 
management plan. The FHWA notes that asset management plans, in 
accordance with section 119(e), are to address both asset condition 
(NHS pavement and bridge assets) and performance of the NHS.
    In the follow-up interviews with a sample of States, FHWA again 
requested quantitative figures on the benefits of asset management. 
Several States noted that asset management practices are very 
beneficial in terms of wisely using resources, enhancing collaboration, 
and saving money by optimizing solutions rather than using a ``worst 
first'' approach to maintenance. However, the States were not able to 
identify specific studies or data on economic benefits that could be 
used by FHWA to re-calculate the benefits used in the RIA.
    The FHWA acknowledges that some States have already implemented 
various asset management practices and use asset management analysis 
tools to arrive at decisions. However, these practices are generally 
focused on project selection using a predetermined level of investment, 
while asset management plans look into the future and develop 
investment strategies that address long term asset sustainability and 
system resiliency at the lowest practicable cost. Although the benefits 
analysis did not separate out the incremental costs of the rule above 
existing asset management practices of States, the costs analysis also 
likely includes some costs associated with analysis and financial 
planning that would be occurring in the absence of the rule.
    The FHWA agrees that the study used as the basis for the benefits 
analysis was conducted 20-years ago, but believes this study's 
conclusion is still valid regardless of the date the study was 
conducted. Moreover, the benefits could be significantly higher than 
estimated in the original RIA. That study focused on pavement 
condition, and as noted in the RIA, the benefits estimated did not 
include the potential benefits resulting from bridge management and its 
role to make long-term investment decisions. The study also did not 
address the benefits associated with using a risk-based approach. A key 
value of a risk-based asset management plan is the ability to make more 
informed investment decisions to address risks to infrastructure. Risk-
based asset management can be used to manage a number of threats, 
including seismic risks and extreme weather events. By understanding 
the assets' vulnerability to these threats and of the economic impacts 
of damage, resources can be

[[Page 73260]]

prioritized to address those with the highest likely impact per dollar 
expenditure. By spending up-front to increase resilience, DOTs can save 
over the long run by avoiding higher future costs. Additionally, there 
would be substantial benefits in terms of mobility and safety for the 
traveling public due to infrastructure closures that would be avoided.
    The FHWA reviewed two additional studies to re-assess the potential 
benefits of the rule. A study from Oregon \73\ indicated that risk 
assessment and adopting resiliency strategies could reduce the costs of 
infrastructure repair, potential loss of life, and delays to travelers 
associated with disruptions to transportation infrastructure as well as 
other costs that may be incurred by the public and significantly affect 
the regional economy. Another study from Alaska \74\ indicated that 
between now and 2080, climate change adaptation strategies could save 
anywhere from 10 percent to 45 percent of the costs resulting from 
climate change. Due to the high variability in each State's degree of 
vulnerability to various types of risks to transportation assets (and 
thus the benefits from addressing risks), FHWA decided not to adjust 
the quantitative benefits analysis. Consequently, the RIA makes a 
number of conservative assumptions likely underestimating the asset 
management benefits. The RIA also shows a break-even analysis that 
suggests the rule will be cost beneficial even with a much more limited 
set of benefits.
---------------------------------------------------------------------------

    \73\ Oregon DOT (2009), Seismic Vulnerability of Oregon State 
Highway Bridges: Mitigation Strategies to Reduce Major Mobility 
Risks, available at: https://www.oregon.gov/ODOT/TD/TP_RES/docs/reports/2009/2009_seismic_vulnerability.pdf.
    \74\ Larsen, P.H., et al., Estimating Future Costs for Alaska 
Public Infrastructure At Risk from Climate Change. Global 
Environmental Change (2008), doi:10.1016/j.gloenvcha.2008.03.005, 
available at: https://climatechange.alaska.gov/aag/docs/O97F18069.pdf.
---------------------------------------------------------------------------

Other Comments on the RIA
    The Mississippi DOT commented on the background included in the 
III. Costs and benefits of NPRM and remarked that not mentioning the 
primary reason for the deterioration of NHS assets--that revenue has 
not been adjusted for inflation--alongside increased use, environmental 
inputs, and age, was misleading. The agency asserted that increased 
material costs and flat funding have led to a decline in asset 
conditions despite a shift in funding from new projects to maintenance.
    The FHWA agrees with the comment that a failure to adjust revenue 
to account for inflation can contribute to decisions leading to a 
decline in asset conditions. In fact, to forecast future revenue, a 
sound financial plan must take into consideration inflation. The FHWA 
also agrees that if maintenance or preservation is delayed due to 
inadequate resources (whatever the reason might be), assets deteriorate 
faster. However, inadequate resources are just contributors to asset 
deterioration, but not the cause of deterioration. Assets deteriorate 
as a result of usage or exposure to the environment.
Revised RIA
    The costs and benefits are estimated for implementing the 
requirement for States to develop a risk-based asset management plan 
and to use pavement and bridge management systems that comply with the 
minimum standards proposed by the U.S. Department of Transportation. 
For this analysis, the base case is assumed to be the current state of 
the practice, where most State DOTs already own pavement and bridge 
management systems, but do not develop risk-based asset management 
plans.
    The total cost of developing the initial plan and three updates for 
all 52 State DOTs, covering a 12-year time period, would be $46.1 
million discounted at 3 percent and $38.5 million discounted at 7 
percent, an annual cost of $3.8 million and $3.2 million, respectively. 
These estimates may be conservative, since many agencies may already be 
developing planning documents that could feed into the asset management 
plans or be replaced by them, therefore saving some costs to the 
agencies. An additional cost of $4 million to $6 million is estimated 
for acquiring pavement management systems (PMS) for all non-complying 
agencies along with $2.4 million needed to upgrade an estimated 16 
existing PMS at $150,000 each for an undiscounted total of $8.4 
million. The total discounted costs of the PMS acquisitions and 
upgrades are $8.2 million using a discount rate of 3 percent and $7.9 
million for a 7 percent discount rate.
    Therefore, the total nationwide costs for States to develop their 
asset management plans and for four State DOTs to acquire and install 
pavement and bridge management systems that meet the standards of the 
proposed rule would be $54.3 million discounted at 3 percent and $46.3 
million discounted at 7 percent.
    Taking the Iowa study \75\ as an example of the potential benefits 
of applying a long-term asset management approach using a PMS, the 
costs of developing the asset management plans and acquiring PMS are 
compared to determine if the benefits of applying the rules developed 
would exceed the costs. We estimate the total benefits for the 50 
States, the District of Columbia, and Puerto Rico of applying PMS and 
developing asset management plans to be $453.5 million discounted at 3 
percent and $340.6 million discounted at 7 percent.
---------------------------------------------------------------------------

    \75\ Smadi, Omar, Quantifying the Benefits of Pavement 
Management, a paper from the 6th International Conference on 
Managing Pavements, 2004.
---------------------------------------------------------------------------

    Based on the benefits derived from the Iowa study and the estimated 
costs of asset management plans and acquiring and upgrading PMS 
systems, the ratio of benefits to costs would be 8.3 at a 3 percent 
discount rate and 7.4 at a 7 percent discount rate. The estimated 
benefits do not include the potential benefits resulting from savings 
in bridge programs. The benefits for States already practicing good 
asset management decisionmaking using their PMS will be lower, as will 
the costs. If the requirement to develop asset management plans only 
marginally influences decisions on how to manage the assets, benefits 
are expected to exceed costs.

       Summary of Benefits and Costs of Asset Management Plan Rule
------------------------------------------------------------------------
                                         Discounted at    Discounted at
                                               3%               7%
------------------------------------------------------------------------
Total Benefits for 50 States, the          $453,517,253     $340,580,894
 District of Columbia, and Puerto Rico
Total Costs for 50 States, the              $54,337,661      $46,313,354
 District of Columbia, and Puerto Rico
Benefit/Cost Ratio....................              8.3              7.4
------------------------------------------------------------------------


[[Page 73261]]

    Further, any reduction in cost to maintain and rehabilitate assets 
can potentially free resources to make improvements elsewhere on the 
system, creating benefits to users from improved pavement, including 
improved operations and safety. In addition to improving asset 
investment decisionmaking, asset management plans will increase 
transparency and accountability to the public, gaining trust of the 
public and the political leadership. This can help gain support to fund 
highways and bridges to improve condition and performance of assets 
that benefits the users in the long run, rather than allowing assets to 
deteriorate over time as a result of a lack of funding and incur higher 
costs later.
    To estimate the threshold benefits necessary from pavement or 
bridge preservation for the rule to be worthwhile, we use the 
incremental benefits that can be realized by road users in vehicle 
operating cost reductions due to improvements in pavement or bridge 
condition. The estimates used for the user costs in the break-even 
analysis are based on the numbers derived for the ``Establishment of 
National Bridge and Pavement Condition Performance Management Measures 
Regulatory Impact Analysis'' (see Docket Number FHWA-2013-0053). The 
FHWA estimated the cost saving per mile of travel on pavement with fair 
condition versus pavement in poor condition to be $0.01 per vehicle, 
averaged for the share of trucks and cars on the NHS. Dividing the cost 
of the rule by this cost, we estimated the number of vehicle miles 
traveled (VMT) that needed to be improved to cover the cost of the 
rule. Then, taking the ratio of the VMT to be improved to the number of 
VMT in poor condition, and multiplying by the number of NHS miles in 
poor condition, we estimated the number of lane-miles that needed to be 
improved to cover the cost of the rule. To cover the $62.7 million 
undiscounted cost of the rule, approximately 159 lane-miles would have 
to be improved from poor condition to fair condition to generate 
sufficient user benefits to make the rule worthwhile. For more details 
on the calculations, see appendix 2 of the RIA available on the docket.
    For bridges, FHWA estimated the additional user cost (travel time 
and vehicle operating costs) of a detour due to a weight-restricted 
bridge. According to the National Bridge Inventory, the average detour 
is equal to 20 miles. The estimated average user cost per truck is 
$1.69 per mile. Each posted bridge is estimated to impose a detour cost 
of $33.80 per truck ($1.69 per VMT x 20 miles). Based on the number of 
trucks affected by the weight restrictions, we estimated that 2.62 
weight-restricted bridge postings would have to be avoided to meet the 
cost of the rule. For more details on the estimates, see appendix 2.
    We believe that the benefits of the rule will be well in excess of 
these minimal threshold amounts that would be necessary to exceed 
costs.
    A copy of the FHWA's RIA has been placed in the docket.
Regulatory Flexibility Act
    The Mississippi DOT commented on the Regulatory Flexibility Act 
section and said although the proposed rule states that the action of 
implementing this action would affect only States, the action actually 
extends to local public agencies that have jurisdictional authority 
over NHS routes.
    Section 119(e)(1) of title 23, U.S.C., states that a State shall 
develop a risk-based asset management plan for the NHS. No other 
entities were required by the statute to develop a risk-based asset 
management plan for the NHS. The FHWA has made no change to the 
language of this section in response to this comment.
    In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 
5 U.S.C. 601- 612), the FHWA has evaluated the effects of this action 
on small entities and has determined that the action would not have a 
significant economic impact on a substantial number of small entities. 
The proposed amendment addresses the obligation of Federal funds to 
States for Federal-aid highway projects. As such, it affects only 
States, and States are not included in the definition of small entity 
set forth in 5 U.S.C. 601. Therefore, the Regulatory Flexibility Act 
does not apply, and the FHWA certifies that the proposed action would 
not have a significant economic impact on a substantial number of small 
entities.
Unfunded Mandates Reform Act of 1995
    Two commenters addressed the applicability of the Unfunded Mandates 
Reform Act of 1995 to the proposed rule. The Mississippi DOT asked 
whether the financial threshold to be considered an unfunded mandate 
would be exceeded if ``realistic'' estimates of the proposed rule's 
compliance costs were considered. The New York Metropolitan 
Transportation Council stated simply that the proposed rule represents 
an unfunded mandate, not just on States but also on county and local 
governments and authorities that are responsible for portions of the 
NHS.
    In response to these comments, FHWA notes that the estimated costs 
of this final rule have been adjusted upward in response to the 
comments received on the NPRM and additional analysis of costs from a 
sample of States. Even with the increased estimate, the costs still do 
not exceed the Unfunded Mandates Reform Act threshold.
    Regarding the New York Metropolitan Council comment, 23 U.S.C. 119 
(e)(1) states that a State shall develop a risk-based asset management 
plan for the NHS. As noted earlier, no other entities are statutorily 
required to develop a risk-based asset management plan for the NHS.
    This rule would not impose unfunded mandates as defined by the 
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48, 
March 22, 1995) as it would not result in the expenditure by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of $151 million or more in any one year (2 U.S.C. 1532).
Executive Order 13132 (Federalism Assessment)
    The NPRM indicated that the proposed rule did not have sufficient 
federalism implications to warrant the preparation of a federalism 
assessment. Two State DOTs did not directly comment on this 
determination, but instead commented on how the proposed rule would 
affect the relationships among different levels of government. The 
Mississippi DOT stated that proposed rule has federalism implications 
because it would require State DOTs to assess and report data on NHS 
assets that are beyond their jurisdictional control. The Florida DOT 
commented that the Federal-State partnership in transportation should 
have reasonable and constructive boundaries with respect to appropriate 
roles and responsibilities. It further commented that the Federal role 
should be limited to the following: Setting of broad national policy 
goals; conducting ``broad'' oversight to ensure that Federal funds are 
properly expended; funding of research; technical assistance; and 
dissemination of best practices. It stated that the Federal role should 
not extend to asset management, investment planning, and programming, 
and that those tasks should be left to State DOTs, with input from 
stakeholders closer to the actual transportation needs and concerns.
    The FHWA has determined that a federalism summary impact statement 
is not required because this regulation is required by statute and will 
not preempt any State law. The FHWA believes that this final rule 
strikes an appropriate

[[Page 73262]]

balance between Federal oversight and State flexibility. This rule 
focuses on the management of the NHS and establishes the minimum 
requirements necessary to comply with 23 U.S.C. 119. We note that the 
Secretary of Transportation is required by 23 U.S.C. 119(e)(8) to 
establish the process to develop the State asset management plan 
described in 23 U.S.C. 119. The statute also entrusts the Secretary 
with ensuring that an asset management plan is consistent with the 
requirements of 23 U.S.C. 119 and certifying that the process used to 
develop the plan meets the requirements of this final rule (23 U.S.C. 
119(e)(5) and (6)). Under this final rule, States continue to have 
discretion regarding investment planning and project selection.
Executive Order 12372 (Intergovernmental Review)
    The regulations implementing E.O. 12372 regarding intergovernmental 
consultation on Federal programs and activities apply to this program. 
Local entities should refer to the Catalog of Federal Domestic 
Assistance Program Number 20.205, Highway Planning and Construction, 
for further information.
Paperwork Reduction Act
    Two State DOTs commented that the estimated burden hours in the 
Paperwork Reduction Act (PRA) analysis of the NPRM were too low. The 
Mississippi DOT argued that the estimated burden hours were not 
consistent with the overall compliance cost estimates reported in the 
NPRM. It stated that the estimate of burden hours did not appear to 
include ``operational cost'' to support asset management as presented 
in the proposed rule. The Oregon DOT stated that the estimate of 
average burden hours seemed ``quite low,'' especially considering the 
need to coordinate with MPOs during development of an asset management 
plan and with FHWA during the review process.
    The FHWA has updated the RIA. As a result of this update the 
average cost of developing an asset management plan and management 
systems has increased by 25.7 percent. This was mainly due to 
underestimating the staff time in the initial RIA. The FHWA has also 
increased the burden hours based on a re-evaluation of a sample of the 
States that had updated their burden hours. This re-evaluation resulted 
in an overall increase in labor costs of 23.7 percent per State.
    Under the PRA (44 U.S.C. 3501, et seq.), Federal agencies must 
obtain approval from Office of Management and Budget for each 
collection of information they conduct, sponsor, or require through 
regulations. This action contains a collection-of-information 
requirement under the PRA. The MAP-21 requires State DOTs to develop 
risk-based asset management plans for NHS bridges and pavements to 
improve or preserve the condition of the assets and the performance of 
the system. It also requires the Secretary of Transportation to review 
the processes State DOTs have used to develop their asset management 
plans, and to determine if States have developed and implemented their 
asset management plans consistent with the MAP-21 requirements.
    In order to be responsive to the requirements of MAP-21, FHWA 
proposes that State DOTs submit their asset management plans, including 
the processes used to develop these plans, to FHWA for: (1) 
Certification of the processes, and (2) a determination that the asset 
management plans have been developed consistent with the certified 
processes; however, these plans are not subject to the FHWA approval.
    A description of the collection requirements, the respondents, and 
an estimate of the burden hours per data collection cycle are set forth 
below:
    Collection Title: State DOTs' Risk-Based Asset Management Plan 
including its processes for the NHS bridges and pavements.
    Type of Request: New information collection requirement.
    Respondents: 50 States, the District of Columbia, and Puerto Rico.
    Frequency: One collection every 4 years.
    Estimated Average Burden per Response per Data Collection Cycle: 
Some early examples of asset management plan burden hours are 
available. The transportation agencies for Minnesota, Louisiana, and 
New York are cooperating with the FHWA to produce three early 
transportation asset management plans. These three States represent 
three different approaches that illustrate the possible range of costs 
and level of effort for conducting asset management plans. In addition, 
the information relative to the burden hours from Colorado DOT is 
included in the benefit-cost analysis for this rule as required by E.O. 
12866. The result of that analysis indicates that the average burden 
hours per State for developing the initial asset management plan would 
be approximately 2,600 hours. However, on average, development of 
subsequent plans would require less effort because the processes have 
already been developed. The estimate for updating plans for future 
submission indicates that approximately 1,300 burden hours per State 
per data-collection cycle would be required.
National Environmental Policy Act
    Agencies are required to adopt implementing procedures under the 
National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 
4321 et seq.), that establish specific criteria for, and identification 
of, three classes of actions: Those that normally require preparation 
of an environmental impact statement; those that normally require 
preparation of an environmental assessment; and those that are 
categorically excluded from further NEPA review (40 CFR 1507.3(b)). The 
FHWA's procedures are found in 23 CFR part 771. This action qualifies 
for categorical exclusions under 23 CFR 771.117(c)(20) (promulgation of 
rules, regulations, and directives) and 771.117(c)(1) (activities that 
do not lead directly to construction). The FHWA has evaluated whether 
the proposed action would involve unusual circumstances and has 
determined that this action would not involve such circumstances.
Executive Order 12630 (Taking of Private Property)
    The FHWA has analyzed this rule under E.O. 12630, Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights. The FHWA does not anticipate that this action would affect a 
taking of private property or otherwise have taking implications under 
E.O. 12630.
Executive Order 12988 (Civil Justice Reform)
    This action meets applicable standards in sections 3(a) and 3(b)(2) 
of E.O. 12988, Civil Justice Reform, to minimize litigation, eliminate 
ambiguity, and reduce burden.
Executive Order 12898 (Environmental Justice)
    The E.O. 12898, Federal Actions to Address Environmental Justice in 
Minority Populations and Low-Income Populations, and DOT Order 
5610.2(a), 91 FR 27534 (May 10, 2012) (available online at 
www.fhwa.dot.gov/environment/environmental_justice/ej_at_dot/order_56102a/index.cfm), requires DOT agencies to achieve environmental 
justice (EJ) as part of their mission by identifying and addressing, as 
appropriate, disproportionately high and adverse human health or 
environmental effects, including interrelated social and economic 
effects, of their programs, policies, and activities on minority 
populations and low-income

[[Page 73263]]

populations in the United States. The DOT Order requires DOT agencies 
to address compliance with the E.O. and the DOT Order in all rulemaking 
activities. In addition, FHWA has issued additional documents relating 
to administration of the E.O. and the DOT Order. On June 14, 2012, FHWA 
issued an update to its EJ order, FHWA Order 6640.23A, FHWA Actions to 
Address Environmental Justice in Minority Populations and Low-Income 
Populations (available online at www.fhwa.dot.gov/legsregs/directives/orders/664023a.htm).
    The FHWA has evaluated this rule under the E.O., the DOT Order, and 
the FHWA Order. This rule establishes the process under which States 
would develop and implement asset management plans, which is a document 
describing how the highway network system will be managed, in a 
financially responsible manner, to achieve a desired level of 
performance and condition while managing risks over the life cycle of 
the assets. The asset management plan does not lead directly to 
construction. Therefore, the FHWA has determined that this final rule 
would not cause disproportionately high and adverse human health and 
environmental effects on minority or low-income populations.
Executive Order 13045 (Protection of Children)
    We have analyzed this rule under E.O. 13045, Protection of Children 
from Environmental Health Risks and Safety Risks. The FHWA certifies 
that this action would not cause an environmental risk to health or 
safety that might disproportionately affect children.
Executive Order 13175 (Tribal Consultation)
    The FHWA has analyzed this action under E.O. 13175, Consultation 
and Coordination with Indian Tribal Governments, and believes that the 
proposed action would not have substantial direct effects on one or 
more Indian tribes; would not impose substantial direct compliance 
costs on Indian tribal governments; and would not preempt tribal laws. 
The proposed rulemaking would not impose any direct compliance 
requirements on Indian tribal governments. Therefore, a tribal summary 
impact statement is not required.
Executive Order 13211 (Energy Effects)
    The FHWA has analyzed this action under E.O. 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. The FHWA has determined that this is not a 
significant energy action under that order since it is not a 
significant regulatory action under E.O. 12866 and is not likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy. Therefore, a Statement of Energy Effects is not required.
Regulation Identification Number
    A Regulation Identification Number (RIN) is assigned to each 
regulatory action listed in the Unified Agenda of Federal Regulations. 
The Regulatory Information Service Center publishes the Unified Agenda 
in April and October of each year. The RIN number contained in the 
heading of this document can be used to cross-reference this action 
with the Unified Agenda.

List of Subjects

23 CFR Part 515

    Asset management, Highways and roads, Transportation.

23 CFR Part 667

    Bridges, Emergency events, Highways and roads, Periodic 
evaluations.

    In consideration of the foregoing, the FHWA amends title 23, Code 
of Federal Regulations, parts 515 and 667 as follows:

0
1. Add part 515 to read as follows:

PART 515--ASSET MANAGEMENT PLANS

Sec.
515.1 Purpose.
515.3 Applicability and effective date.
515.5 Definitions.
515.7 Process for establishing the asset management plan.
515.9 Asset management plan requirements.
515.11 Deadlines and phase-in of asset management plan development.
515.13 Process certification and recertification, and annual plan 
consistency review.
515.15 Penalties.
515.17 Minimum standards for developing and operating bridge and 
pavement management systems.
515.19 Organizational integration of asset management.

    Authority: Sec. 1106 and 1203 of Pub. L. 112-141, 126 Stat. 405; 
23 U.S.C. 109, 119(e), 144, 150(c), and 315; 49 CFR 1.85(a).


Sec.  515.1  Purpose.

    The purpose of this part is to:
    (a) Establish the processes that a State transportation department 
(State DOT) must use to develop its asset management plan, as required 
under 23 U.S.C. 119(e)(8);
    (b) Establish the minimum requirements that apply to the 
development of an asset management plan;
    (c) Describe the penalties for a State DOT's failure to develop and 
implement an asset management plan in accordance with 23 U.S.C. 119 and 
this part;
    (d) Set forth the minimum standards for a State DOT to use in 
developing and operating highway bridge and pavement management systems 
under 23 U.S.C. 150(c)(3)(A)(i).


Sec.  515.3  Applicability and effective date.

    This part applies to all State DOTs. The effective date for the 
requirements in this part is October 2, 2017.


Sec.  515.5  Definitions.

    As used in this part:

    Asset means all physical highway infrastructure located within 
the right-of-way corridor of a highway. The term asset includes all 
components necessary for the operation of a highway including 
pavements, highway bridges, tunnels, signs, ancillary structures, 
and other physical components of a highway.
    Asset class means assets with the same characteristics and 
function (e.g., bridges, culverts, tunnels, pavements, or guardrail) 
that are a subset of a group or collection of assets that serve a 
common function (e.g., roadway system, safety, Intelligent 
Transportation (IT), signs, or lighting).
    Asset condition means the actual physical condition of an asset.
    Asset management means a strategic and systematic process of 
operating, maintaining, and improving physical assets, with a focus 
on both engineering and economic analysis based upon quality 
information, to identify a structured sequence of maintenance, 
preservation, repair, rehabilitation, and replacement actions that 
will achieve and sustain a desired state of good repair over the 
life cycle of the assets at minimum practicable cost.
    Asset management plan means a document that describes how a 
State DOT will carry out asset management as defined in this 
section. This includes how the State DOT will make risk-based 
decisions from a long-term assessment of the National Highway System 
(NHS), and other public roads included in the plan at the option of 
the State DOT, as it relates to managing its physical assets and 
laying out a set of investment strategies to address the condition 
and system performance gaps. This document describes how the highway 
network system will be managed to achieve State DOT targets for 
asset condition and system performance effectiveness while managing 
the risks, in a financially responsible manner, at a minimum 
practicable cost over the life cycle of its assets. The term asset 
management plan under this part is the risk-based asset management 
plan that is required under 23 U.S.C. 119(e) and is intended to 
carry out asset management as defined in 23 U.S.C. 101(a)(2).
    Asset sub-group means a specialized group of assets within an 
asset class with the same

[[Page 73264]]

characteristics and function (e.g., concrete pavements or asphalt 
pavements.)
    Bridge as used in this part, is defined in 23 CFR 650.305, the 
National Bridge Inspection Standards.
    Critical infrastructure means those facilities the incapacity or 
failure of which would have a debilitating impact on national or 
regional economic security, national or regional energy security, 
national or regional public health or safety, or any combination of 
those matters.
    Financial plan means a long-term plan spanning 10 years or 
longer, presenting a State DOT's estimates of projected available 
financial resources and predicted expenditures in major asset 
categories that can be used to achieve State DOT targets for asset 
condition during the plan period, and highlighting how resources are 
expected to be allocated based on asset strategies, needs, 
shortfalls, and agency policies.
    Investment strategy means a set of strategies that result from 
evaluating various levels of funding to achieve State DOT targets 
for asset condition and system performance effectiveness at a 
minimum practicable cost while managing risks.
    Life-cycle cost means the cost of managing an asset class or 
asset sub-group for its whole life, from initial construction to its 
replacement.
    Life-cycle planning means a process to estimate the cost of 
managing an asset class, or asset sub-group over its whole life with 
consideration for minimizing cost while preserving or improving the 
condition.
    Minimum practicable cost means lowest feasible cost to achieve 
the objective.
    NHS pavements and bridges and NHS pavement and bridge assets 
mean Interstate System pavements (inclusion of ramps that are not 
part of the roadway normally traveled by through traffic is 
optional); NHS pavements (excluding the Interstate System) 
(inclusion of ramps that are not part of the roadway normally 
traveled by through traffic is optional); and NHS bridges carrying 
the NHS (including bridges that are part of the ramps connecting to 
the NHS).
    Performance of the NHS refers to the effectiveness of the NHS in 
providing for the safe and efficient movement of people and goods 
where that performance can be affected by physical assets. This term 
does not include the performance measures established for 
performance of the Interstate System and performance of the NHS 
(excluding the Interstate System) under 23 U.S.C. 
150(c)(3)(ii)(A)(IV)-(V).
    Performance gap means the gaps between the current asset 
condition and State DOT targets for asset condition, and the gaps in 
system performance effectiveness that are best addressed by 
improving the physical assets.
    Risk means the positive or negative effects of uncertainty or 
variability upon agency objectives.
    Risk management means the processes and framework for managing 
potential risks, including identifying, analyzing, evaluating, and 
addressing the risks to assets and system performance.
    Statewide Transportation Improvement Program (STIP) has the same 
meaning as defined in Sec.  450.104 of this title.
    Work type means initial construction, maintenance, preservation, 
rehabilitation, and reconstruction.


Sec.  515.7  Process for establishing the asset management plan.

    A State shall develop a risk-based asset management plan that 
describes how the NHS will be managed to achieve system performance 
effectiveness and State DOT targets for asset condition, while managing 
the risks, in a financially responsible manner, at a minimum 
practicable cost over the life cycle of its assets. The State DOT shall 
develop and use, at a minimum the following processes to prepare its 
asset management plan:
    (a) A State DOT shall establish a process for conducting 
performance gap analysis to identify deficiencies hindering progress 
toward improving or preserving the NHS and achieving and sustaining the 
desired state of good repair. At a minimum, the State DOT's process 
shall address the following in the gap analysis:
    (1) The State DOT targets for asset condition of NHS pavements and 
bridges as established by the State DOT under 23 U.S.C. 150(d) once 
promulgated.
    (2) The gaps, if any, in the performance-of the NHS that affect NHS 
pavements and bridges regardless of their physical condition; and
    (3) Alternative strategies to close or address the identified gaps.
    (b) A State DOT shall establish a process for conducting life-cycle 
planning for an asset class or asset sub-group at the network level 
(network to be defined by the State DOT). As a State DOT develops its 
life-cycle planning process, the State DOT should include future 
changes in demand; information on current and future environmental 
conditions including extreme weather events, climate change, and 
seismic activity; and other factors that could impact whole of life 
costs of assets. The State DOT may propose excluding one or more asset 
sub-groups from its life-cycle planning if the State DOT can 
demonstrate to FHWA the exclusion of the asset sub-group would have no 
material adverse effect on the development of sound investment 
strategies due to the limited number of assets in the asset sub-group, 
the low level of cost associated with managing the assets in that asset 
sub-group, or other justifiable reasons. A life-cycle planning process 
shall, at a minimum, include the following:
    (1) The State DOT targets for asset condition for each asset class 
or asset sub-group;
    (2) Identification of deterioration models for each asset class or 
asset sub-group, provided that identification of deterioration models 
for assets other than NHS pavements and bridges is optional;
    (3) Potential work types across the whole life of each asset class 
or asset sub-group with their relative unit cost; and
    (4) A strategy for managing each asset class or asset sub-group by 
minimizing its life-cycle costs, while achieving the State DOT targets 
for asset condition for NHS pavements and bridges under 23 U.S.C. 
150(d).
    (c) A State DOT shall establish a process for developing a risk 
management plan. This process shall, at a minimum, produce the 
following information:
    (1) Identification of risks that can affect condition of NHS 
pavements and bridges and the performance of the NHS, including risks 
associated with current and future environmental conditions, such as 
extreme weather events, climate change, seismic activity, and risks 
related to recurring damage and costs as identified through the 
evaluation of facilities repeated damaged by emergency events carried 
out under part 667 of this title. Examples of other risk categories 
include financial risks such as budget uncertainty; operational risks 
such as asset failure; and strategic risks such as environmental 
compliance.
    (2) An assessment of the identified risks in terms of the 
likelihood of their occurrence and their impact and consequence if they 
do occur;
    (3) An evaluation and prioritization of the identified risks;
    (4) A mitigation plan for addressing the top priority risks;
    (5) An approach for monitoring the top priority risks; and
    (6) A summary of the evaluations of facilities repeatedly damaged 
by emergency events carried out under part 667 of this title that 
discusses, at a minimum, the results relating to the State's NHS 
pavements and bridges.
    (d) A State DOT shall establish a process for the development of a 
financial plan that identifies annual costs over a minimum period of 10 
years. The financial plan process shall, at a minimum, produce:
    (1) The estimated cost of expected future work to implement 
investment strategies contained in the asset management plan, by State 
fiscal year and work type;
    (2) The estimated funding levels that are expected to be reasonably 
available, by fiscal year, to address the costs of future work types. 
State DOTs may estimate the amount of available future

[[Page 73265]]

funding using historical values where the future funding amount is 
uncertain;
    (3) Identification of anticipated funding sources; and
    (4) An estimate of the value of the agency's NHS pavement and 
bridge assets and the needed investment on an annual basis to maintain 
the value of these assets.
    (e) A State DOT shall establish a process for developing investment 
strategies meeting the requirements in Sec.  515.9(f). This process 
must result in a description of how the investment strategies are 
influenced, at a minimum, by the following:
    (1) Performance gap analysis required under paragraph (a) of this 
section;
    (2) Life-cycle planning for asset classes or asset sub-groups 
resulting from the process required under paragraph (b) of this 
section;
    (3) Risk management analysis resulting from the process required 
under paragraph (c) of this section; and
    (4) Anticipated available funding and estimated cost of expected 
future work types associated with various candidate strategies based on 
the financial plan required by paragraph (d) of this section.
    (f) The processes established by State DOTs shall include a 
provision for the State DOT to obtain necessary data from other NHS 
owners in a collaborative and coordinated effort.
    (g) States DOTs shall use the best available data to develop their 
asset management plans. Pursuant to 23 U.S.C. 150(c)(3)(A)(i), each 
State DOT shall use bridge and pavement management systems meeting the 
requirements of Sec.  515.17 to analyze the condition of NHS pavements 
and bridges for the purpose of developing and implementing the asset 
management plan required under this part. The use of these or other 
management systems for other assets that the State DOT elects to 
include in the asset management plan is optional (e.g., Sign Management 
Systems, etc.).


Sec.  515.9  Asset management plan requirements.

    (a) A State DOT shall develop and implement an asset management 
plan to improve or preserve the condition of the assets and improve the 
performance of the NHS in accordance with the requirements of this 
part. Asset management plans must describe how the State DOT will carry 
out asset management as defined in Sec.  515.5.
    (b) An asset management plan shall include, at a minimum, a summary 
listing of NHS pavement and bridge assets, regardless of ownership.
    (c) In addition to the assets specified in paragraph (b) of this 
section, State DOTs are encouraged, but not required, to include all 
other NHS infrastructure assets within the right-of-way corridor and 
assets on other public roads. Examples of other NHS infrastructure 
assets include tunnels, ancillary structures, and signs. Examples of 
other public roads include non-NHS Federal-aid highways. If a State DOT 
decides to include other NHS assets in its asset management plan, or to 
include assets on other public roads, the State DOT, at a minimum, 
shall evaluate and manage those assets consistent with paragraph (l) of 
this section.
    (d) The minimum content for an asset management plan under this 
part includes a discussion of each element in this paragraph (d).
    (1) Asset management objectives. The objectives should align with 
the State DOT's mission. The objectives must be consistent with the 
purpose of asset management, which is to achieve and sustain the 
desired state of good repair over the life cycle of the assets at a 
minimum practicable cost.
    (2) Asset management measures and State DOT targets for asset 
condition, including those established pursuant to 23 U.S.C. 150, for 
NHS pavements and bridges. The plan must include measures and 
associated targets the State DOT can use in assessing the condition of 
the assets and performance of the highway system as it relates to those 
assets. The measures and targets must be consistent with the State 
DOT's asset management objectives. The State DOT must include the 
measures established under 23 U.S.C. 150(c)(3)(A)(ii)(I)-(III), once 
promulgated in 23 CFR part 490, for the condition of NHS pavements and 
bridges. The State DOT also must include the targets the State DOT has 
established for the measures required by 23 U.S.C. 150(c)(3)(A)(ii)(I)-
(III), once promulgated, and report on such targets in accordance with 
23 CFR part 490. The State DOT may include measures and targets for NHS 
pavements and bridges that the State DOT established through pre-
existing management efforts or develops through new efforts if the 
State DOT wishes to use such additional measures and targets to 
supplement information derived from the pavement and bridge measures 
and targets required under 23 U.S.C. 150.
    (3) A summary description of the condition of NHS pavements and 
bridges, regardless of ownership. The summary must include a 
description of the condition of those assets based on the performance 
measures established under 23 U.S.C. 150(c)(3)(A)(ii) for condition, 
once promulgated. The description of condition should be informed by 
evaluations required under part 667 of this title of facilities 
repeated damaged by emergency events.
    (4) Performance gap identification.
    (5) Life-cycle planning.
    (6) Risk management analysis, including the results for NHS 
pavements and bridges, of the periodic evaluations under part 667 of 
this title of facilities repeated damaged by emergency event.
    (7) Financial plan.
    (8) Investment strategies.
    (e) An asset management plan shall cover, at a minimum, a 10-year 
period.
    (f) An asset management plan shall discuss how the plan's 
investment strategies collectively would make or support progress 
toward:
    (1) Achieving and sustaining a desired state of good repair over 
the life cycle of the assets,
    (2) Improving or preserving the condition of the assets and the 
performance of the NHS relating to physical assets,
    (3) Achieving the State DOT targets for asset condition and 
performance of the NHS in accordance with 23 U.S.C. 150(d), and
    (4) Achieving the national goals identified in 23 U.S.C. 150(b).
    (g) A State DOT must include in its plan a description of how the 
analyses required by State processes developed in accordance with Sec.  
515.7 (such as analyses pertaining to life cycle planning, risk 
management, and performance gaps) support the State DOT's asset 
management plan investment strategies.
    (h) A State DOT shall integrate its asset management plan into its 
transportation planning processes that lead to the STIP, to support its 
efforts to achieve the goals in paragraphs (f)(1) through (4) of this 
section.
    (i) A State DOT is required to make its asset management plan 
available to the public, and is encouraged to do so in a format that is 
easily accessible.
    (j) Inclusion of performance measures and State DOT targets for NHS 
pavements and bridges established pursuant to 23 U.S.C. 150 in the 
asset management plan does not relieve the State DOT of any performance 
management requirements, including 23 U.S.C. 150(e) reporting, 
established in other parts of this title.
    (k) The head of the State DOT shall approve the asset management 
plan.
    (l) If the State DOT elects to include other NHS infrastructure 
assets or other public roads assets in its asset management plan, the 
State at a minimum shall address the following, using a level of effort 
consistent with the State DOT's needs and resources:

[[Page 73266]]

    (1) Summary listing of assets, including a description of asset 
condition;
    (2) Asset management measures and State DOT targets for asset 
condition;
    (3) Performance gap analysis;
    (4) Life-cycle planning;
    (5) Risk analysis, including summaries of evaluations carried out 
under part 667 of this title for the assets, if available, and 
consideration of those evaluations;
    (6) Financial plan; and
    (7) Investment strategies.
    (m) The asset management plan of a State may include consideration 
of critical infrastructure from among those facilities in the State 
that are eligible under 23 U.S.C. 119(c).


Sec.  515.11  Deadlines and phase-in of asset management plan 
development.

    (a) Deadlines. (1) Not later than April 30, 2018, the State DOT 
shall submit to FHWA a State-approved initial asset management plan 
meeting the requirements in paragraph (b) of this section. The FHWA 
will review the processes described in the initial plan and make a 
process certification decision as provided in Sec.  515.13(a).
    (2) Not later than June 30, 2019, the State DOT shall submit a 
State-approved asset management plan meeting all the requirements of 23 
U.S.C. 119 and this part, including paragraph (c) of this section, 
together with documentation demonstrating implementation of the asset 
management plan. The FWHA will determine whether the State DOT's plan 
and implementation meet the requirements of 23 U.S.C. 119 and this part 
as provided in Sec.  515.13(b).
    (b) The initial plan shall describe the State DOT's processes for 
developing its risk-based asset management plan, including the 
policies, procedures, documentation, and implementation approach that 
satisfy the requirements of this part. The plan also must contain 
measures and targets for assets covered by the plan. The investment 
strategies required by Sec.  515.7(e) and 515.9((d)(8) must support 
progress toward the achievement of the national goals identified in 23 
U.S.C. 150(b). The initial plan must include and address the State 
DOT's 23 U.S.C. 150(d) targets for NHS pavements and bridges only if 
the first target-setting deadline established in 23 CFR part 490 for 
NHS pavements and bridges is a date more than 6 months before the 
initial plan submission deadline in paragraph (a)(1). The initial asset 
management plan may exclude one or more of the necessary analyses with 
respect to the following required asset management processes:
    (1) Life-cycle planning required under Sec.  515.7(a)(2);
    (2) The risk management analysis required under Sec.  515.7(a)(3); 
and
    (3) Financial plan under Sec.  515.7(a)(4).
    (c) The State-approved asset management plan submitted not later 
than June 30, 2019, shall include all required analyses, performed 
using FHWA-certified processes, and the section 150 measures and State 
DOT targets for the NHS pavements and bridges. The plan must meet all 
requirements in Sec. Sec.  515.7 and 515.9. This includes investment 
strategies that are developed based on the analyses from all processes 
required under Sec.  515.7, and meet the requirements in 23 U.S.C. 
119(e)(2).


Sec.  515.13  Process certification and recertification, and annual 
plan consistency review.

    (a) Process certification and recertification under 23 U.S.C. 
119(e)(6). Not later than 90 days after the date on which the FHWA 
receives a State DOT's processes and request for certification or 
recertification, the FHWA shall decide whether the State DOT's 
processes for developing its asset management plan meet the 
requirements of this part. The FHWA will treat the State DOT's 
submission of an initial State-approved asset management plan under 
Sec.  515.11(b) as the State DOT's request for the first certification 
of the State's DOT's plan development processes under 23 U.S.C. 
119(e)(6). As provided in paragraph (c) of this section, State DOT 
shall update and resubmit its asset management plan development 
processes to the FHWA for a new process certification at least every 4 
years.
    (1) If FHWA determines that the processes used by a State DOT to 
develop and maintain the asset management plan do not meet the 
requirements established under this part, FHWA will send the State DOT 
a written notice of the denial of certification or recertification, 
including a listing of the specific requirement deficiencies.
    (2) Upon receiving a notice of denial of certification or 
recertification, the State DOT shall have 90 days from receipt of the 
notice to address the deficiencies identified in the notice and 
resubmit the State DOT's processes to FHWA for review and 
certification. The FHWA may extend the State DOT's 90-day period to 
cure deficiencies upon request. During the cure period established, all 
penalties and other legal impacts of a denial of certification shall be 
stayed as provided in 23 U.S.C. 119(e)(6)(C)(i).
    (3) If FHWA finds that a State DOT's asset management processes 
substantially meet the requirements of this part except for minor 
deficiencies, FHWA may certify or recertify the State DOT's processes 
as being in compliance, but the State DOT must take actions to correct 
the minor deficiencies within 90 days of receipt of the notification of 
certification. The State shall notify FHWA, in writing, when corrective 
actions are completed.
    (b) Annual determination of consistency under 23 U.S.C. 119(e)(5). 
Not later than August 31, 2019, and not later than July 31 in each year 
thereafter, FHWA will notify the State DOT whether the State DOT has 
developed and implemented an asset management plan consistent with 23 
U.S.C. 119. The notice will be in writing and, in the case of a 
negative determination, will specify the deficiencies the State DOT 
needs to address. In making the annual consistency determination, the 
FHWA will consider the most recent asset management plan submitted by 
the State DOT, as well as any documentation submitted by the State DOT 
to demonstrate implementation of the plan. The FHWA determination is 
only as to the consistency of the State DOT asset management plan and 
State DOT implementation of that plan with applicable requirements, and 
is not an approval or disapproval of strategies or other decisions 
contained in the plan. With respect to any assets the State DOT may 
elect to include in its plan in addition to NHS pavement and bridge 
assets, the FHWA consistency determination will consider only whether 
the State DOT has complied with Sec.  515.9(l) with respect to such 
discretionary assets.
    (1) Plan development. The FHWA will review the State DOT's asset 
management plan to ensure that it was developed with certified 
processes, includes the required content, and is consistent with other 
applicable requirements in this part.
    (2) Plan implementation. The State DOT must demonstrate 
implementation of an asset management plan that meets the requirements 
of 23 U.S.C. 119 and this part. Each State DOT may determine the most 
suitable approach for demonstrating implementation of its asset 
management plan, so long as the information is current, documented, and 
verifiable. The submission must show the State DOT is using the 
investment strategies in its plan to make progress toward achievement 
of its targets for asset condition and performance of the NHS and to 
support progress toward the national goals identified in 23 U.S.C. 
150(b). The State DOT must submit its

[[Page 73267]]

implementation documentation not less than 30 days prior to the 
deadline for the FHWA consistency determination.
    (i) FHWA considers the best evidence of plan implementation to be 
that, for the 12 months preceding the consistency determination, the 
State DOT funding allocations are reasonably consistent with the 
investment strategies in the State DOT's asset management plan. This 
demonstration takes into account the alignment between the actual and 
planned levels of investment for various work types (i.e., initial 
construction, maintenance, preservation, rehabilitation and 
reconstruction).
    (ii) FHWA may find a State DOT has implemented its asset management 
plan even if the State has deviated from the investment strategies 
included in the asset management plan, if the State DOT shows the 
deviation was necessary due to extenuating circumstances beyond the 
State DOT's reasonable control.
    (3) Opportunity to cure deficiencies. In the event FHWA notifies a 
State DOT of a negative consistency determination, the State DOT has 30 
days to address the deficiencies. The State DOT may submit additional 
information showing the FHWA negative determination was in error, or to 
demonstrate the State DOT has taken corrective action that resolves the 
deficiencies specified in FHWA's negative determination.
    (c) Updates and other amendments to plans and development 
processes. A State DOT must update its asset management plan and asset 
management plan development processes at least every 4 years, beginning 
on the date of the initial FHWA certification of the State DOT's 
processes under paragraph (a) of this section. Whenever the State DOT 
updates or otherwise amends its asset management plan or its asset 
management plan development processes, the State DOT must submit the 
amended plan or processes to the FHWA for a new process certification 
and consistency determination at least 30 days prior to the deadline 
for the next FHWA consistency determination under paragraph (b) of this 
section. Minor technical corrections and revisions with no foreseeable 
material impact on the accuracy and validity of the processes, 
analyses, or investment strategies in the plan do not constitute 
amendments and do not require submission to FHWA.


Sec.  515.15  Penalties

    (a) Beginning on October 1, 2019, and in each fiscal year 
thereafter, if a State DOT has not developed and implemented an asset 
management plan consistent with the requirements of 23 U.S.C. 119 and 
this part, the maximum Federal share for National Highway Performance 
Program projects and activities carried out by the State in that fiscal 
year shall be reduced to 65 percent for that fiscal year.
    (b)(1) Except as provided in paragraph (b)(2) of this section, if 
the State DOT has not developed and implemented an asset management 
plan that is consistent with the requirements of 23 U.S.C. 119 and this 
part and established the performance targets for NHS pavements and 
bridges required under 23 U.S.C. 150(d) by the date that is 18 months 
after the effective date of the 23 U.S.C. 150(c) final rule for NHS 
pavements and bridges, the FHWA will not approve any further projects 
using National Highway Performance Program funds. Such suspension of 
funding approvals will terminate once the State DOT has developed and 
implemented an asset management plan that is consistent with the 
requirements of 23 U.S.C. 119 and this part and established its 
performance targets for NHS pavements and bridges required under 23 
U.S.C. 150(d).
    (2) The FHWA may extend this deadline if FHWA determines that the 
State DOT has made a good faith effort to develop and implement an 
asset management plan and establish the performance targets for NHS 
pavements and bridges required under 23 U.S.C. 150(d).


Sec.  515.17  Minimum standards for developing and operating bridge and 
pavement management systems

    Pursuant to 23 U.S.C.150(c)(3)(A)(i), this section establishes the 
minimum standards States must use for developing and operating bridge 
and pavement management systems. State DOT bridge and pavement 
management systems are not subject to FHWA certification under Sec.  
515.13. Bridge and pavement management systems shall include, at a 
minimum, documented procedures for:
    (a) Collecting, processing, storing, and updating inventory and 
condition data for all NHS pavement and bridge assets.
    (b) Forecasting deterioration for all NHS pavement and bridge 
assets;
    (c) Determining the benefit-cost over the life cycle of assets to 
evaluate alternative actions (including no action decisions), for 
managing the condition of NHS pavement and bridge assets;
    (d) Identifying short- and long-term budget needs for managing the 
condition of all NHS pavement and bridge assets;
    (e) Determining the strategies for identifying potential NHS 
pavement and bridge projects that maximize overall program benefits 
within the financial constraints.; and
    (f) Recommending programs and implementation schedules to manage 
the condition of NHS pavement and bridge assets within policy and 
budget constraints.


Sec.  515.19  Organizational integration of asset management.

    (a) The purpose of this section is to describe how a State DOT may 
integrate asset management into its organizational mission, culture and 
capabilities at all levels. The activities described in paragraphs (b) 
through (d) of this section are not requirements.
    (b) A State DOT should establish organizational strategic goals and 
include the goals in its organizational strategic implementation plans 
with an explanation as to how asset management will help it to achieve 
those goals.
    (c) A State DOT should conduct a periodic self-assessment of the 
agency's capabilities to conduct asset management, as well as its 
current efforts in implementing an asset management plan. The self-
assessment should consider, at a minimum, the adequacy of the State 
DOT's strategic goals and policies with respect to asset management, 
whether asset management is considered in the agency's planning and 
programming of resources, including development of the STIP; whether 
the agency is implementing appropriate program delivery processes, such 
as consideration of alternative project delivery mechanisms, effective 
program management, and cost tracking and estimating; and whether the 
agency is implementing adequate data collection and analysis policies 
to support an effective asset management program.
    (d) Based on the results of the self-assessment, the State DOT 
should conduct a gap analysis to determine which areas of its asset 
management process require improvement. In conducting a gap analysis, 
the State DOT should:
    (1) Determine the level of organizational performance effort needed 
to achieve the objectives of asset management;
    (2) Determine the performance gaps between the existing level of 
performance effort and the needed level of performance effort; and
    (3) Develop strategies to close the identified organizational 
performance gaps and define the period of time over which the gap is to 
be closed.

0
2. Add part 667 to read as follows:

[[Page 73268]]

PART 667--PERIODIC EVALUATION OF FACILITIES REPEATEDLY REQUIRING 
REPAIR AND RECONSTRUCTION DUE TO EMERGENCY EVENTS

Sec.
667.1 Statewide evaluation.
667.3 Definitions.
667.5 Data time period, availability, and sources.
667.7 Timing of evaluations.
667.9 Consideration of evaluations.

    Authority:  Sec. 1315(b) of Pub. L. 112-141, 126 Stat. 405; 23 
U.S.C. 109, 144, and 315; 49 CFR 1.85.


Sec.  667.1  Statewide evaluation.

    Each State, acting through its department of transportation (State 
DOT), shall conduct statewide evaluations to determine if there are 
reasonable alternatives to roads, highways, and bridges that have 
required repair and reconstruction activities on two or more occasions 
due to emergency events. The evaluations shall be conducted in 
accordance with the requirements in this part.


Sec.  667.3  Definitions.

    For purposes of this part:

    Catastrophic failure means the sudden failure of a major element 
or segment of a road, highway, or bridge due to an external cause. 
The failure must not be primarily attributable to gradual and 
progressive deterioration or lack of proper maintenance.
    Evaluation means an analysis that includes identification and 
consideration of any alternative that will mitigate, or partially or 
fully resolve, the root cause of the recurring damage, the costs of 
achieving the solution, and the likely duration of the solution. The 
evaluations shall consider the risk of recurring damage and cost of 
future repair under current and future environmental conditions. 
These considerations typically are a part of the planning and 
project development process.
    Emergency event means a natural disaster or catastrophic failure 
resulting in an emergency declared by the Governor of the State or 
an emergency or disaster declared by the President of the United 
States.
    Reasonable alternatives include options that could partially or 
fully achieve the following:
    (1) Reduce the need for Federal funds to be expended on 
emergency repair and reconstruction activities;
    (2) Better protect public safety and health and the human and 
natural environment; and
    (3) Meet transportation needs as described in the relevant and 
applicable Federal, State, local, and tribal plans and programs. 
Relevant and applicable plans and programs include the Long-Range 
Statewide Transportation Plan, Statewide Transportation Improvement 
Plan (STIP), Metropolitan Transportation Plan(s), and Transportation 
Improvement Program(s) (TIP) that are developed under part 450 of 
this title.
    Repair and reconstruction means work on a road, highway, or 
bridge that has one or more reconstruction elements. The term 
includes permanent repairs such as restoring pavement surfaces, 
reconstructing damaged bridges and culverts, and replacing highway 
appurtenances, but excludes emergency repairs as defined in 23 CFR 
668.103.
    Roads, highways, and bridges means a highway, as defined in 23 
U.S.C. 101(a)(11), that is open to the public and eligible for 
financial assistance under title 23, U.S.C.; but excludes tribally 
owned and federally owned roads, highways, and bridges.


Sec.  667.5  Data time period, availability, and sources.

    (a) The beginning date for every evaluation under this part shall 
be January 1, 1997. The end date must be no earlier than December 31 of 
the year preceding the date on which the evaluation is due for 
completion. Evaluations should cover a longer period if useful data is 
reasonably available. Subject to the timing provisions in Sec.  667.7, 
evaluations must include any road, highway, or bridge that, on or after 
January 1, 1997, required repair and reconstruction on two or more 
occasions due to emergency events.
    (b) State DOTs must use reasonable efforts to obtain the data 
needed for the evaluation. If the State DOT determines the necessary 
data for the evaluation is unavailable, the State DOT must document in 
the evaluation the lack of available data for that facility.
    (c) A State DOT may use whatever sources and types of data it 
determines are useful to the evaluation. Available data sources include 
reports or other information required to receive emergency repair funds 
under title 23, other sources used to apply for Federal or nonfederal 
funding, and State or local records pertaining to damage sustained and/
or funding sought.


Sec.  667.7  Timing of evaluations.

    (a) Not later than November 23, 2018, the State DOT must complete 
the statewide evaluation for all NHS roads, highways and bridges. The 
State DOT shall update the evaluation after every emergency event to 
the extent needed to add any roads, highways, or bridges subject to 
this paragraph that were affected by the event. The State DOT shall 
review and update the entire evaluation at least every 4 years. In 
establishing its evaluation cycle, the State DOT should consider how 
the evaluation can best inform the State DOT's preparation of its asset 
management plan and STIP.
    (b) Beginning on November 23, 2020, for all roads, highways, and 
bridges not included in the evaluation prepared under paragraph (a) of 
this section, the State DOT must prepare an evaluation that conforms 
with this part for the affected portion of the road, highway, or bridge 
prior to including any project relating to such facility in its STIP.


Sec.  667.9  Consideration of evaluations.

    (a) The State DOT shall consider the results of an evaluation 
prepared under this part when developing projects. State DOTs and 
metropolitan planning organizations are encouraged to include 
consideration of the evaluations during the development of 
transportation plans and programs, including TIPs and STIPs, and during 
the environmental review process under part 771 of this title. Nothing 
in this section prohibits State DOTs from proceeding with emergency 
repairs to restore functionality of the system, or from receiving 
emergency repair funding under part 668 of this title.
    (b) The FHWA will periodically review the State DOT's compliance 
under this part, including evaluation performance, consideration of 
evaluation results during project development, and overall results 
achieved. Nothing in this paragraph limits FHWA's ability to consider 
the results of the evaluations when relevant to an FHWA decision, 
including when making a planning finding under 23 U.S.C. 134(g)(8), 
making decisions during the environmental review process under part 771 
of this title, or when approving funding. The State DOT must make 
evaluations required under this part available to FHWA upon request.

    Dated: October 11, 2016.
Gregory G. Nadeau,
Federal Highway Administrator.
[FR Doc. 2016-25117 Filed 10-21-16; 8:45 am]
 BILLING CODE 4910-22-P