1. Distribution Guided by State Law Surface Transportation Program (STP) Surface Transportation Program (STP) Congestion Mitigation & Air Quality Improvement (CMAQ) Congestion Mitigation & Air Quality Improvement (CMAQ) Federal Funding Category State Funding Category Distribution Guided by Policy or Agreement Funding Flow for Federal Transportation Funds Rural, Elderly & Disabled, JARC, New Freedom (Sections 5311/5310/53165317) Rural, Elderly & Disabled, JARC, New Freedom (Sections 5311/5310/53165317) Transfers allowed between categories in accordance with Federal laws Montana Transportation Commission Secondary Highway Program Urban Highway Program Districts 15 Urban Areas (Pop. >5,000) Primary Highway Program Enhancement (10% of STP) Hazard Elimination (10% of STP) CTEP (Distributed by formula) Statewide Distribution Financial Districts Authorization Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) Apportionment & Annual Appropriation Act (Obligation Limitation) Montana Department of Transportation December 2007 Statewide Distribution Distribution Guided by Federal Law Urban Transit (Section 5307) Urbanized Areas (>50,000) Safe Routes to School SAFETEA-LU Section 1404 Statewide Distribution Coordinated Border Infrastructure Program SAFETEA-LU Section 1303 Within 200 Miles of Border-High Volume NH Routes Directed Funds High Priority Trans. Improvements Approp. Earmarks Directed Funds High Priority Trans. Improvements Approp. Earmarks Statewide Urbanized Planning Support (PL) Urbanized Areas (>50,000) Urban High Growth Adjustment 15 Urban Areas (Pop. >5,000) Urban Highway Preservation Federal Lands Highway Program (FLHP) Public Lands Highways Parkways & Park Roads Indian Reservation Roads (IRR) Refuge Roads Federal Lands Highway Program (FLHP) Public Lands Highways Parkways & Park Roads Indian Reservation Roads (IRR) Refuge Roads National Highway System (NHS) National Highway System (NHS) Interstate Maintenance (IM) Interstate Maintenance (IM) Bridge (HBRRP) Bridge (HBRRP) Statewide Distribution Missoula Urban High Growth Adjustment >15% Population Increase Rail/Highway Crossing Statewide Distribution Equity Bonus - Billings -Discretionary Montana Air & Congestion Initiative (MACI) -Great Falls -Guaranteed

2. Congestion Mitigation and Air Quailty (CMAQ) ELIGIBILITY: Eligible projects/programs include: transportation activities in an approved State Implementation Plan, transportation control measures to assist areas designated as nonattainment under the Clean Air Act Amendments (CAAA) of 1990, pedestrian/bicycle facilities traffic management/monitoring/congestion relief strategies, transit (new system/service expansion or operations), alternative fuel projects (including vehicle refueling infrastructure, clean fuel fleet programs and conversions), vehicle inspection and maintenance (I/M) programs, intermodal freight, telework/telecommuting programs travel demand management, development activities in support of eligible projects (e.g. NEPA studies), public education and outreach activities, rideshare programs, establishing/contracting with transportation management associations (TMAs), fare/fee subsidy programs (operating subsidies have a 3-year limit), HOV programs, including HOT lanes diesel retrofits, truck-stop electrification experimental pilot projects, and other transportation projects with air quality benefits. Ineligible projects include: Construction of projects which add new capacity for single-occupancy vehicles.

3. Surface Transportation Program (STP) - Enhancement ELIGIBILITY: Transportation enhancement activity.--The term "transportation enhancement activity" means, with respect to any project or the area to be served by the project, any of the following activities as the activities relate to surface transportation: Provision of facilities for pedestrians and bicycles. Provision of safety and educational activities for pedestrians and bicyclists. Acquisition of scenic easements and scenic or historic sites (including historic battlefields). Scenic or historic highway programs (including the provision of tourist and welcome center facilities). Landscaping and other scenic beautification. Historic preservation. Rehabilitation and operation of historic transportation buildings, structures, or facilities (including historic railroad facilities and canals). Preservation of abandoned railway corridors (including the conversion and use of the corridors for pedestrian or bicycle trails). Inventory, control, and removal of outdoor advertising. Archaeological planning and research. Environmental mitigation– i. to address water pollution due to highway runoff; or, ii. reduce vehicle-caused wildlife mortality while maintaining habitat connectivity. Establishment of transportation museums. Each State administers its own program and develops its own procedures to solicit and select projects for funding.

4. Local Funding Sources Transportation Impact Fee Assessments Capital Projects Gas Tax General Fund Special Road Districts Maintenance Gas Tax General Fund