# Presentation: 854199

## Federal Transit Funding for Transportation, Community & System Preservation

- Federal Transit Funding for Transportation, Community & System Preservation

- U.S. Department of Transportation
- Federal Transit Administration

**Notes:**
Thanks for the chance to discuss FTA’s programs as they relate to TCSP activities.

## TEA-21 Highway and Transit Funds

- TEA-21 Highway and Transit Funds

**Notes:**
I’ll focus on Transit funds
TEA-21 splits funds about 80:20 
CMAQ and FHWA Enhancements in highway program will be covered by others

## TEA-21 Guaranteed Transit FundsFY98 - FY03: $36 Billion

- TEA-21 Guaranteed Transit FundsFY98 - FY03: $36 Billion

**Notes:**
Majority of FTA Funds are eligible:  e.g. UZA Formula/ Bus Grants/ New Starts

UZA Formula is a core

Few slices not shown

UZA $18 B
Rural $1.2 B
E&D $456 M
Bus $3.5 B
NS $8.1 B
Rail Mod $6.6 B
Planning $253

## Slide 4

**Notes:**
58% of ISTEA authorizations were funded from the Mass Transit Account of the Highway Trust Fund.  Actual appropriations, however, were 70% trust funded.  Over the six year ISTEA period, the share of transit trust funding appropriated increased.  TEA-21 continued this trend by increasing the trust funding to 82% of the guaranteed program.  If the additional non-guaranteed general funding is included, then the trust fund share drops to 71%, but still higher than ISTEA as authorized and as appropriated.

BACKGROUND
ISTEA authorized:    Trust  $18.2b       General $13.3b   Total $31.5    Percent trust 58%
ISTEA appropriated               16.9                          7.1                 24.1                         70%
Percent appropriated of authorized  76%

So far we have seen all of the guaranteed funding, and only a very little bit of the non-guaranteed funds for Job Access and Reverse Commute.

## Key Transit Programs and Provisions

- Formula & Capital Investment Programs
- Planning
- Notable Program Provisions

**Notes:**
Program Structure and Funding:  The overall program structure was basically unchanged by TEA-21.  But I must highlight the fact that the Nonurbanized Area Program now gets a bigger share of the overall program
Planning/NEPA:  TEA-21 maintained and strengthened the ISTEA Planning process.  While the requirement for a separate Major Investment Study is ended, we are to integrate the concepts of MIS’s into the Long Range Planning and NEPA processes.  The NPRM is now on the street.
New Starts Criteria:  The New Starts process has been enhanced.  FTA must now state three levels of recommendations for each project.
Capital Definitions:  Two major changes: Preventive Maintenance and ADA Paratransit are now eligible as capital costs.
Fixed Guideway Formula:  Now has seven tiers, and provides more funding to the newer rail cities as budget resources increase.
New Programs:  Several new programs have been added: Clean Fuels, Job Access and Reverse Commute, Over-the-Road Bus Accessibility, Joint Partnerships, and International Program.
Transit Benefits:  Another step on the road to a level playing field with parking benefits; transit passes can be provided in stead of employee pay, and the limit goes to $100 per month in 2002.
.

## Formula & Capital Investment Programs

- Formula Grants ($19.97B)
- Urbanized (88.61%)
- Non-Urbanized (6.19%)
- Elderly and Persons with Disabilities (2.33%)
- Other Takedowns -- AK Rail, Accessible Bus, Clean Fuels -- (2.87%)

**Notes:**
Each program has funding from both the guaranteed and non-guaranteed amounts.

The formula program authorization has three takedowns: Alaska Railroad, Clean Fuel, and the Rural Transportation Accessibility Incentive Program. 

Then specified percentages are applied to get the amounts which go to each of the three formula programs.  The Non-urbanized percentage is about 1 percentage point more than under ISTEA, while the Urbanized percentage is 1 percentage point less.
No changes were made to apportionment formula for any of these three programs.

## Formula & Capital Investment Programs

- Capital Investment ($18.32B)
- 40 % New Starts
- 40 % Fixed Guideway Modernization
- 20 % Bus - Includes Clean Fuels at $50M
- Additional General Funds $3.09B
-  New Starts $2.09B
- Fixed Guideway Modernization $500M
- Bus $500M

**Notes:**
The Guaranteed authorizations are split 40/40/20 as in ISTEA.

The additional General Fund authorizations are split differently with about $400 million per year to New Starts, and $100 million per year to each of Bus and Fixed Guideway Modernization.
New Starts - 191 project earmarks plus $10.4m per year set-aside for ferry boats and facilities in Alaska and Hawaii.  Senate Approps earmarked 83 projects
Bus -156 project earmarks plus set-asides for Bus Testing Facility in Altoona, PA ($3m per year), Fuel Cell Bus and Facilities at Georgetown University ($4.85m per year).  At least 5.5% per year must go to nonurban areas.  Senate Approps earmarked 311 projects.

## Planning

- Planning ($534M Authorized)
- Metropolitan Planning (82.72%)
- Statewide Planning (17.28%)
- Additional General Fund: $170M

**Notes:**
Research and Planning are separate authorizations.
The planning program guaranteed amounts were set at 1 percent of the total guarantee authorized.  
Additional amounts are authorized.
Funds are split by percentages, which match the ISTEA shares, between Metropolitan and Statewide Planning.  Planning and Research are no longer tied together as in ISTEA.
FTA planning funds are consolidated with FHWA planning funds at state and local level so grantees may administer as one program.

## Notable Program ProvisionsNew Start Criteria

- Notable Program ProvisionsNew Start Criteria

- Process: AA, PE, FD, FFGA
- Projects Rated:  Highly Recommended, Recommended, Not Recommended at each step
- Criteria at each step: Justification, Local Financial Commitment
- Land Use and Development Considerations:
- Reduced Infrastructure Costs Due to Compact Development
- Cost of Sprawl
- Population Density and Current Ridership
- Technical Capabilities of Grantee

**Notes:**
Process remains essentially the same as contained in ISTEA and our 1996 and 97 Federal Register Notices on “criteria.”  The Final Rule for new starts should be out soon, implementing the TEA-21 changes.
We must publish a summary rating for each project that completes alternatives analysis.   Those summary ratings are highly recommended, recommended, and not recommended.  Before TEA-21, we had been using a multiple measure approach and had not provided any sort of summary rating.
The Secretary’s findings are still to be based on the project justification criteria and degree of local financial commitment.  Project justification means (subject to change in the Final Rule):
mobility improvements - value of travel time savings
environmental benefits - change in pollutant and gas emissions, reduction in consumption of energy, and EPA designation under National Ambient Air Quality Standards
cost effectiveness - change in capital and operating costs per incremental passenger
operating efficiencies - change in operating cost per passenger-mile
Included additional factors in our Federal Register Notice :
transit supportive existing land use policies
other factors - policy, planning and parking policies in place; project management capability; and other.
Local financial commitment means “stable and dependable financing sources to construct, maintain and operate the system or extension.”  Local share (over match), strength of capital financing plan, and ability of locality to fund operation of the system once built.
TEA-21 added several new considerations.  Population density and current ridership are essentially new considerations, while land use and capabilities of the grantee were included in our FRN.

## Notable Program ProvisionsCapital Definitions and Eligibility

- Notable Program ProvisionsCapital Definitions and Eligibility

- Joint Development
- Codifies FTA Policy
- Physically or Functionally Related
- Fair Share of Revenue
- Includes Safety and Security Equipment and Facilities and Community Facilities

**Notes:**
FTA’s recent changes in its policy on Joint Development are codified in a program-wide definition of joint development.  The definitions of joint development are included under the transit-wide definition of capital.  

Joint development projects must be physically and functionally related to transit.  And projects must produce a fair share of revenue.  Such revenue can be used for any transit purpose.

TEA-21 has clearly spelled out that safety and security facilities and equipment are eligible capital expenses as are community facilities such as daycare and healthcare facilities.

FTA can not pay for revenue producing activities--meaning the fitting out of shops and offices—but we can pay for the shell.  The developer or leasee then fits out the space.  

Another feature of TEA-21 that can be related to joint development is the sale of assets.  Subject to Secretarial approval, real property acquired under the Federal transit program may be sold, leased, or transferred.  The net income may then be used to reduce the gross cost of another federally assisted transit capital project.  TEA-21 specifically stated that sales of assets feature does not affect existing law and policy, so current rules on program income are unaffected.

## Notable Program ProvisionsTransit Enhancements

- Notable Program ProvisionsTransit Enhancements

- 1 % set-aside of Urbanized Area Formula grants in area’s over 200,000 population
- Example: 1 % of FY 2000
- _Total UZA Formula funding is __	__$2.7 billion_  34 areas > 1 million pop. = 	$20.2 million  Areas 200k to 1 million pop. = 	$4.7 million  Areas 50k to 200K pop = 		not required

**Notes:**
TEA-21 also supported transit's efforts to make our communities more livable through transit enhancements.  This program provides for improvements to facilities to make transit more attractive to riders.  Transit providers in urban areas of over 200,000 now must use at least one percent of their apportionment for transit enhancements.  They must consider sidewalks, landscaping, and lighting that not only make transit facilities more pleasant, but enhance the safety of transit riders walking to and from bus stops or rail stations.

If a bicycle access project is included in the one percent enhancement level, then it is eligible for a 95% Federal match.
Urbanized areas over 200,000. Areas have to spend the funds within four years of the date of apportionment. 

## Notable Program ProvisionsTransit Enhancements

- Notable Program ProvisionsTransit Enhancements

- Historic Preservation (incl. Operation of Historic Transit Bldgs. and Faclts.)
- Bus Shelters
- Landscaping
- Public Art

- Pedestrian Access
- Bicycle Access
- Connections to Parks
- Signage
- Enhanced Access for Disabled Persons

**Notes:**
TEA-21 also supports transit's efforts to make our communities more livable through transit enhancements.  This program provides for improvements to facilities to make transit more attractive to riders.  Transit providers in urban areas of over 200,000 now must use at least one percent of their apportionment for transit enhancements.  They must consider sidewalks, landscaping, and lighting that not only make transit facilities more pleasant, but enhance the safety of transit riders walking to and from bus stops or rail stations.
If a bicycle access project is included in the one percent enhancement level, then it is eligible for a 95% Federal match.

Urbanized areas over 200,000. Areas have to spend the funds within four years of the date of apportionment.

Transit related ITS is explicitly made eligible.

## Transit Benefits

- Transit Benefits May Be Provided “In Lieu of” Compensation
- Transit Benefit Goes to $100 Per Month (From $65) In 2002

**Notes:**
As you know, employers may provide free or financially assisted parking to employees, the value of which up to $175 is not taxable.  For transit, employers may reimburse employees who choose to ride transit to work with up to $65 per month that is tax free.  TEA-21 made two changes to the transit benefit program.  

The first change is to allow transit benefits to be provided in lieu of compensation beginning in the tax year 1998.  That is, an employee may choose to have part of his or her regular pay in the form of a transit pass which would be tax free up to the $65.  This benefit was previously allowed for parking benefits under the Taxpayer Relief Act of 1997.

The second TEA-21 change is to increase the $65 per month tax free amount. For tax years 1998 and 1999, the tax free amount for parking remains fixed at $175 and transit remains fixed at $65.  In 2000, both may again be increased due to inflation.  Treasury makes the decision on the inflation indexing.  And then, beginning in the tax year 2002, the transit benefit increases to $100 per month.

The President recently signed an Executive Order requiring Federal employees to be provided with full Commuter Choice benefits:
. In the DC area, all employees are to receive the full amount, in addition to pay.
. Outside DC, employees are to be given the choice to receive part of their pay as a tax free transit benefit.
. DOT, DOE, and EPA will provide the benefits in addition to pay throughout the country. 

## Federal Transit Administration Internet Site

- Federal Transit Administration Internet Site

- http://www.fta.dot.gov

**Notes:**
For more info, see our Internet Site.

Each year we publish an Notice in the Federal Register.  Look for the FY 2001 Notice on our Web site.

It must be published within 10 days of the enactment of the DOT Appropriations Act.  This year, it may be a little late.