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

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URL: https://www.frixlaw.com/law-library/documents/fr%3A2016-25117

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** October 24, 2016
- **Citation:** 81 FR 73196

## Text

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.

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:
http://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:
http://www.orf.gov
and the Government Publishing Office's Web site at:
http://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

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.

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.

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

NPRM section

Final rule
section

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)

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.

4
The FAST Act added the term “critical infrastructure” to 23 U.S.C. 119(j).

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

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).

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).

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

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.

6
There are currently four States that do not currently have pavement and bridge management systems that meet the standards of the proposed rule.

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.

7
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 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.

Discounted at 3%
Discounted at 7%

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

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.

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

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

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

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.
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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).
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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

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 § 515.13(b) of the final rule. The FHWA has revised proposed § 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 § 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

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.
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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.

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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

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.

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

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.

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

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 § 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 § 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

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

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.
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For a discussion of network-level LCP, please see “Highway Infrastructure Asset Management Guidance,” UK Roads Liaison Group (May 2013), available online at:

http://www.highwaysefficiency.org.uk/efficiency-resources/asset-management/highway-

infrastructure-asset-management-guidance.html

(as of March 2016).

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.”
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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 netwo

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2016-25117. Public record. Not legal advice.