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Use of Proceeds from the Sale of Real Property Purchased with Federal Highway Funds

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Highlights

A Congressional officer requested GAO's opinion on whether the proceeds from real property sales retain their character as federal funds under 23 U.S.C. 156, as well as how the states have applied this law. GAO found that Section 156 permits states to apply the federal share of proceeds of excess property dispositions to other Federal Highway Trust Fund projects in lieu of returning those funds to the Highway Trust Fund. The federal interest in such funds is not extinguished. Consequently, states may not convert federal money to state money by buying and selling property or use the federal share of recaptured funds to reduce or avoid their obligation to provide matching funds.

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