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Carpool and Vanpool Projects (23 CFR 656.5)

Contact Information: Wayne Berman at

Formerly Federal-aid Policy Guide Non-Regulatory Supplement NS 23 CFR, 656.5,
September 30, 1992, Transmittal 5
See Order 1321.1C FHWA Directives Management

  1. CARPOOL AND VANPOOL PROJECTS (23 CFR 656.5). The following is information regarding what the proper procedures and conditions are for closing out a "carpool/vanpool project" through which vanpool vehicles were acquired.

    1. There are certain general principles which apply to funds used for acquisition of vehicles.

      (1) The first is that the funds must be repaid. The FHWA can aid in the acquisition of vehicles with an advance of funds but cannot purchase vehicles outright except under the special conditions outlined in 23 CFR 656. If Federal-aid funds are used for vehicle acquisition they must eventually be returned to the fund category (FAP, FAS, FAU) from which they were originally drawn. If a revolving fund is set up this could result in a delay of many years but the final disposition of the funds must be a credit to the unobligated balance of the appropriate funds.

      (2) The second is that if discretionary funds are used for vehicle acquisition any further use of these funds after payback must be approved by Washington Headquarters. This must be done to maintain national policy consistency in the use of discretionary funds. If the discretionary funds involved are non-lapsing the payback funds could remain with the original project to enhance it or they could be called back to Washington Headquarters for other use. This will be jointly decided for each project. If the discretionary funds involved are lapsing the payback funds can only be used to complete the original project objectives. If not needed for this purpose they will be allowed to lapse. Again the specifications will have to be jointly worked out for each project.

      (3) Third, a project involving the use of any FHWA funds to acquire ridesharing vehicles cannot be closed out until the funds have been repaid to FHWA. If the funds are then approved for other use, the project is subject to regular Federal-aid closeout procedures.

    2. With these general principles in mind, the following are more specific principles:

      (1) Project completion - a project is complete once all authorized activities have been accomplished. The project cannot be closed out until the Federal pro-rata share of the van acquisition costs have been repaid to FHWA. Disposition of these payback funds will be as discussed under the general principles above.

      (2) Repayment of van acquisition costs -

      (a) repayment of funds - can come from any source as long as it is legally permitted. If other Federal funds are used, it would be wise to check with the Federal funding agency to be sure there are no complications.

      (b) proper disposition of funds accumulated through the repayment provision - the normal disposition of the funds would be to use them for repaying van costs. If the ridesharing agency has repaid the vans in some other way then the funds belong to the ridesharing agency.

      (3) Valid reason for the repayment of the van acquisition costs on projects funded under Section 126 of PL 95-599 (November 6, 1978) - the original requirement for repayment of vehicle costs was based on the intent of Congress as expressed in the Congressional Record. This intent was not changed when the ridesharing program was made a regular Federal-aid program in the Surface Transportation Assistance Act of 1978. The FHWA, therefore, included repayment provisions in its regulation (23 CFR 656), with one small exception that vans used for marketing purposes (demonstrators, trial vans) could be charged off to the project. All other vans purchased with Federal-aid highway funds must be repaid.

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