In most states, the legislature appropriates or sets expenditure limits on federal transportation funds. Fifteen states, however, allow at least some of these funds to flow directly to the state DOT without legislative appropriation.

Federal funding-provided by the federal-aid highway and transit programs, grant programs, congressional earmarks and one-time expenditures-accounts for approximately 20 percent of highway and transit funding nationwide. At least 15 states have minimal legislative involvement with federal transportation funds, allowing at least some funds to flow directly to the state DOT without legislative appropriation. In Illinois, Minnesota and South Dakota, federal funds are reviewed and reflected in budget documents but do not require legislative action in order to be spent. In most states, however, the legislature has a more substantial role by appropriating federal funds or setting expenditure limits. Legislatures also may require additional approvals before a DOT can spend certain federal funds. Ohio law, for example, requires a form of legislative approval before the DOT or other entity can spend capital funds-including federal grant funds-for passenger rail development.