This document is intended to give an overview of the Federal-Aid Program and its impacts on Arizona. There are four major sections in the report: (1) Overview of the Federal-Aid Program; (2) Arizona Federal funding highlights for the fiscal year; (3) Federal-aid Highway Program Characteristics; and (4) Federal-Aid Highway Program descriptions. The first section gives a general overview of how the Federal-Aid Program is financed, the authorization process and a discussion of the apportionment, allocation and obligation authority processes. The second section deals with Arizona Federal funding highlights the for fiscal year. The last two sections are devoted to characteristics of the core programs, including eligibility, limitations, apportionment formulas and descriptions of the funding categories.

The Arizona Department of Transportation was authorized in 1996 to administer a State Infrastructure Bank under a cooperative agreement with the Federal Highway Administration. The Highway Expansion and Extension Loan Program (HELP) was established. The financial statements present only the funds comprising the Fund and are not intended to present fairly the financial position or results of operations of the Department.

The HELP program is meant to be a funding tool to accelerate needed highway projects throughout the state. Board Funding Obligations are an important part of the HELP capitalization and the current stress on the State's General Fund has impacted our ability to use BFOs as a funding source for new loans. Though $140 million of BFOs are authorized by statute to capitalize the HELP, the State Treasurer was required to call all outstanding BFOs in April 2009. Consequently, the State Transportation Board and the Department have suspended the HELP program given the uncertainty of a long term funding source.

Since 1986, the Arizona Department of Transportation has used a comprehensive regression-based econometric model to estimate Transportation Excise Tax revenues for Maricopa County. These revenues, which flow into the Regional Area Road Fund (RARF), are the major funding source for the Maricopa County Freeway Program. This document contains the official forecast of expected values for the Maricopa County Transportation Excise Tax as developed by the Arizona Department of Transportation in cooperation with the Maricopa Association of Governments, Valley Metro and Valley Metro Rail.