Section 34.1 Introduction.

The Consolidated Local Street and Highway Improvement Program (CHIPS) was legislated in [1982] 1981 to provide state aid for the construction, operation, and/or maintenance of highways, bridges, and highway-railroad crossings that are not on the state highway system. Between 1982 and 1991, all CHIPS funds were distributed to localities in a lump sum on a quarterly allocation basis. In 1991, as a result of statutory changes, the CHIPS Program was divided into two components: a quarterly operation and maintenance (O&M) component, funded from the state's general fund, and a quarterly capital component, funded from New York State Thruway Authority bond proceeds. Effective April 1, 2014, CHIPS is being funded in the first instance by a budget appropriation and all CHIPS capital reimbursements are now issued by the Office of the State Comptroller.

CHIPS O&M funding has not been included since the SFY 01-02 state budget. The Legislature converted these funds into additional CHIPS capital funds that have been appropriated since SFY 02-03. Section 10-c of the Highway Law and Thruway Authority bond documents require that municipalities provide several certifications to the Department of Transportation (NYSDOT) that are described [herein] in section 34.2 of this part.

The Office of the State Comptroller audits municipal records and accounts. Such audits may include examination of the data generated and used in CHIPS calculations.

17 NYCRR Section 34.2 is amended to read as follows:

Section 34.2 CHIPS certification.

(a) Annual certification for the CHIPS O&M component is only required if O&M funding is appropriated by the Legislature. [-] Unless an exemption [therefore] is granted by the Commissioner for any municipality that receives more than $5,000 but less than $7,000 in any local fiscal year, each municipality that receives $5,000 or more annually in CHIPS O&M funding must annually certify on a NYSDOT-provided form that its fiscal year expenditures of non-state funds raised by the municipality for the operation and maintenance (exclusive of capital construction) of its highways, bridges, and/or highway-railroad crossings was not reduced below the level of the average of the previous two fiscal years' expenditures. The annual certificate is due to the NYSDOT[‘s] regional office that serves the municipality by the first day of the third month following the end of a municipality's fiscal year.

(b) Capital certification to accompany each request for the CHIPS capital component. [-] Each capital project reimbursement request must be accompanied by a certification by the municipality, on a NYSDOT-provided form, that the amount requested is for moneys expended by the municipality during a specified reimbursement period solely for eligible work. Eligible work consists of construction, reconstruction, or improvement of local highways, bridges, [and/or] highway-railroad crossings, and/or other local facilities per NYSDOT CHIPS Capital Guidelines, including right-of-way acquisition, preliminary engineering, and construction supervision and inspection, where the service life of the project is [at least 10 years.] in accordance with the stipulation on the CHIPS Capital Reimbursement Request Form for the project.

The New York State Department of Transportation has determined that no person is likely to object to the amendment of 17 NYCRR Part 34 as herein proposed, as its sole purpose is to correct inaccuracies in the regulation as currently written, and to update the provisions of the regulation in regard to reduction of grant recipient certification requirements.

17 NYCRR 34.1 is being amended to correct the year in which the Consolidated Local Street and Highway Improvement Program (CHIPS) was added to the Highway Law, to reflect the exclusion of CHIPS Operation & Maintenance (O&M) funding from the SFY 02-03 state budget onward, and to reflect that, effective April 1, 2014, CHIPS is being funded in the first instance by a budget appropriation and all CHIPS capital reimbursements are now issued by the Office of the State Comptroller.

17 NYCRR 34.2 is being amended to provide for the O&M certification requirement only if O&M funding is appropriated by the Legislature, and to accurately reflect the current CHIPS reimbursement request form certification provisions.

There is no foreseeable impact on jobs and employment opportunities, as is evident from the subject matter and content of the rule amendments.