Section 4: Research Funding and Budgeting
Anchor: #i1002535General
The discussion in this section is limited to work that:
- meets the definition of “research”, “implementation”, or “technology transfer” presented in Chapter 1, and
- is contracted or managed through the Research and Technology Implementation Office (RTI).
Federal Funding of State Planning and Research (SPR) Program
Source of SPR Funds — Title 23, “Highways”, Chapter 5, “Research and Technology”, of the US Code provides for SPR funding. Of the total funds apportioned to states, it authorizes 2 percent, of most apportionment categories, to be used only for planning and research activities. These funds are administered and accounted for as a single fund, regardless of the category of Federal-aid highway funds from which they were derived.
The 25 Percent Rule — Chapter 5 of the US Code further states that not less than 25 percent of the SPR funds apportioned to a state for a fiscal year shall be used for research, unless the state meets the requirements for a waiver of this rule.
Sharing of SPR Program Funds — Federal SPR funds are shared between the Research and Technology Implementation Office (RTI) and the Transportation Planning and Programming Division (TPP).
Obligation of SPR Funds — RTI requests obligation of federal SPR funds before each annual program is initiated, based on 80% of the total Legislative appropriation for that program. Obligation of SPR funds for projects which are not part of an annual program are generally handled individually for each project.
Anchor: #i1002580Federal SPR Work Program
Requirements for an SPR Work Program — Title 23, Section 420.111, “Work Program”, of the Code of Federal Regulations (CFR) requires that the proposed use of FHWA Planning and Research funds be documented by TxDOT in a work program “acceptable to the FHWA”. This section also includes the requirements for information to be included in each work program.
Separate Work Programs for Planning and Research — Part 2 (research) of the SPR annual program is represented in a work program document separate from the SPR Part 1 (planning) work program. RTI also develops a separate Implementation Work Program funded from SPR Part 2 Funds. In addition to the work programs just mentioned, FHWA requires an overall summary showing the total planning and research programs. This overall summary is generally prepared by the TPP, with RTI providing the data for Part 2 of the summary.
SPR Program Submission and Approval — SPR Part 2 work programs are developed by RTI just before the beginning of each new fiscal year and submitted to the local FHWA office for review and approval. RTI also provides quarterly updates of the work programs to the local FHWA office.
Anchor: #i1002600Budgeting for Research
Where Funds Are Budgeted — Funds for research are budgeted under TxDOT Strategy 116, “Research,” in several budget accounts. Implementation funding is included in Strategy 101, “Highway Design,” in Budget Account 0138, “Research Implementation.”
Components of the Research Budget — RTI develops a research budget each year composed of funds for:
- program administration and management,
- in-house research projects, and
- research conducted by Texas state-supported colleges and universities.
Components of the Implementation Budget — RTI develops an implementation budget each year of funds for:
- assisting D/D/Os in implementing research products,
- technology transfer activities and support, and
- implementation program administration and management.
Determination of Program Size — The amount of funding available for research and implementation programs is set by the Executive Director in consultation with the chair of the Research Oversight Committee, and is adjusted as necessary depending upon state and federal appropriations.
The Use of Additional Federal Funds — The budgets for research and implementation reflect approximately 80 percent federal SPR funds and 20 percent state matching funds. Estimated federal funds are reported to the legislature in the Legislative Appropriations Request (LAR) to assist lawmakers in appropriating adequate state funds to match the federal funds. The final state appropriation is a federal/state mix, with the Legislature approving a total appropriation that includes the estimated federal funds. If federal funds in excess of those identified in the LAR become available during the fiscal year (such as through work orders issued by FHWA), the research budget may be increased by the amount of new federal funds made available.
RTI’s cash budget is not increased when these additional funds are made available, nor when they are spent. If total research expenditures, including for projects funded with these additional federal funds, exceed RTI’s cash budget, the Finance Division, in consultation with RTI, identifies the additional funds available and needed, and adjusts RTI’s budget.
Other Funds Used for Research — Research or implementation funding can come from sources other than TxDOT state funds or federal SPR funds apportioned to Texas. For example, funds may be made available:
- from other state agencies − Occasionally, other state agencies offer to contribute money to TxDOT to fund research of mutual interest, which TxDOT is managing. An example is the funding of a series of recycling projects by the Texas Natural Resource Conservation Commission (TNRCC). TNRCC contributed the state's 20 percent share to match the 80 percent Federal SPR share of project costs.
- from Federal agencies − FHWA, for example, often contributes up to 100 percent of the budget for specific research or demonstration projects that it feels have a compelling national importance. A common type of federally funded project is a pooled-fund project (see discussion below). FHWA issues a work order (FPAA) for each project, which provides the funding. FHWA will at some point approve a work plan submitted by TxDOT, if TxDOT is the lead agency. If a university will be performing the work, a contract is executed by RTI in accordance with established research contracting procedures. Funds received by Work Order are considered to be additional funding over and above the funds available in the research or implementation budgets.
- from SPR funds apportioned to other states – FHWA recognizes a type of project called a Pooled Fund project. For these projects, one or more states and FHWA pool together to conduct research of regional or national significance. FHWA may waive the usual 20 percent state match on these projects. When Texas leads one of these projects, all the expenditures on the project flow through RTI’s cash budget. SPR funds from other states are recovered as discussed above under “The Use of Additional Federal Funds”.
- from other agencies or entities (including private institutions) − Under certain circumstances, projects of mutual benefit may be developed with agencies in addition to those mentioned above. Joint-funded projects with private entities are possible under certain circumstances, and within strict guidelines to protect the public interest.
- but not from other TxDOT sources − Current department policy requires all research work to be funded through RTI’s budget. (Such a restriction is not placed on implementation work.) Additional TxDOT funds for research can come only from the Finance Division increasing RTI’s budget at the request of the TxDOT administration.