e Usdeparment 380 Carlos Chardon Ave, Sute 210 otertacecien ‘San Juan, PR 00918-2161 Federal Highway Phone: 787-765-5600 emit Fax 767-766-5924 Me. Miguel Torres In Reply Refer To: Secretary HDAPR Department of Transportation and Public Works Post Office Box 42007 San Juan, PR.00940-2007 Dear Secretary Torres: RE: P.R. Act 1-2015 and Potential Impact on Federal-Aid Highway Program lt has come to our attention that the Governor of Puerto Rico hai signed Aet | of January 15, 2015 (P.R. Act 1-2015). The purpose ofthis leter is to identify potential concerns about possible conflicts with Federal law and regulation governing the Federal-Ail Highway Program (FAHP). While FHWA recognizes the authority ofthe Commonwealth to organize governmental agencies to cary out Commonvrealth functions; under the FAHP, Federal hw requires the State DOT to bbe authorized under the laws of the State to make final decisions on behalf of the State in all matters, under all contracts and agreements and to take such actions to ensure compliance with Federal law and regulation. According to our review based ufon an unofficial translation of PR. Act 1-2015, the statute may result in the appointment of an emergency official (EO) with broad powers to act on behalf of the Commonwealth on FAHP Junded projects in lew of the Puerto Rico Highway and Transportation Authority (PRHITA). This authority includes the power to modify Federal-aid funded contracts previously awarded by the PRHTA. The EO is appointed by a special oversight committee, which is also created under PLR, Act 1-2015, and ‘may take action to override State DOT decisions. The EOs powers and the manner in which they are implemented have the potential to conflict with Federal law and regulation, which ‘equite thatthe State DOT make final decisions in all matters in administering the FAHP. [As noted previously in our correspondence of November 26, 2014, relating to the PRITTAs proposed cessation of operation, section 302 (a) of Title 23 of the United States Code requires {Gut each state “shall have a State Transportation Department which shall have adequate powers and be suitably equipped and organized to discharge to the satisfaction of the Secretary the duties ‘required by this ile.” 23 CFR 1.3 requires that “each State Highway Department, maintained in conformity with 23 U.S.C. 302 shall be authorized, by the laws of the State to make final decisions for the State in all matters relating to, and to enter into on behalf of the state, all contracts and agreements for projects and to take such actions on behalf of the State as may be necessary to comply with Federal laws and regulation in this par.” These requirements are2 fundamental to the operation and implementation of the FAHP. They include requirements that apply to highways constructed with federal assistance, as well a residual obligations associated with those highways, such as existing contracts, transportation programs and projeet plans, highway maintenance and size and weight enforcement, and other highway safety requirements that apply whether of not the particular highway was improved with federal assistance, such as bridge inspections. FHWA looks to the State Department of Transportation asthe entity ultimately responsible to the Federal government for compliance with all Federal requirements. The Commouwealt uf Puerto Rico has an obligation under Federal law to maintain the capability of the PRHTA to discharge its responsibilities associated with FAHP projects under 23 U.S.C. 302, FHWA is concerned that implementation of PR. Act 1-201S may conflict with Federal requitements given the broad authority of the EO, For example, the termination of construction and engineering consultant contracts as a result of decisions made by the EO pursuant to its authority under Article 3.05 of H.B, 2212 may result in construction or contract claims stemming from the Commonwealth's failure to comply with 23 U.S.C. 302. Consistent with 23 CER 1.9(@), Federalaid funds shall not participate (reimburse) any cost which is not incurred in conformity with Federal law. Thus, any increased costs associated with contract terminations are subject to this requirement. In light of these concerns, we would like to work with the Commonwealth to ensure that the ‘manner in which P.R. Act 1-2015 is implemented is consistent with existing Federal requirements relating to FAHP. We look forward to working with you to ensure the on-going Aelivery ofthe FAHP forthe benefit ofall Puerto Ricans. Division Administrator Ce: Carmen Villar Prados, Executive Director PRHTA,