Congress created JARC in the 1998 Transportation Equity Act for the 21st Century to support the nation’s welfare-reform goals—including helping adults meet new work requirements to receive federal assistance. A purpose of JARC was to improve the mobility of low-income individuals through grants that states and localities could use to provide additional or expanded transportation services and thus provide more opportunities for individuals to get to work. Accessing entry-level jobs can be challenging for low-income individuals, many of whom do not own cars, have poorly maintained cars that are not sufficient for daily commuting, or do not have access to transit options that link them to jobs. In 2005, SAFETEA-LU made several changes to JARC. Notably, SAFETEA- LU created a formula to distribute $602.5 million over 4 years beginning with fiscal year 2006 and required that state or local recipients be designated to competitively allocate JARC funds. These recipients are responsible for distributing funds to other agencies. SAFETEA-LU required that 40 percent of JARC funds be apportioned annually among states for projects in small urbanized and rural areas (those with populations of 50,000–199,999 and less than 50,000, respectively). It also required that the remaining 60 percent be apportioned among large urbanized areas (those with populations of 200,000 or more). In fiscal year 2010, a total of $175 million in JARC funds were apportioned to designated recipients. JARC funds must be obligated within a certain time period, can be used for some administrative activities, and must be supplemented by local funding. Funds must be obligated within 3 years from the time of apportionment or they lapse. Lapsed funds are reapportioned among all states and large urbanized areas in the following fiscal year. For example, $18.6 million in JARC funds apportioned for fiscal year 2006 was allowed to lapse, per FTA records, at the end of fiscal year 2008. Accordingly, FTA increased the JARC apportionments for fiscal year 2009 by $18.6 million. The reapportionment process allows lapsed JARC funds to be used in other areas. SAFETEA-LU authorizes states and large urbanized areas to use 10 percent of JARC funds for administrative activities, including planning and coordination activities. Currently, the federal government’s cost share for JARC projects is limited to no more than 80 percent for capital costs and no more than 50 percent of operating costs. For example, if a subrecipient purchases a bus with JARC funds, it is eligible for up to 80 percent federal funding; however if JARC funding is used for operating the bus (bus drivers, fuel, etc. ), it is eligible for up to 50 percent federal funding. SAFETEA-LU also required JARC recipients to fulfill specific requirements and follow specific processes (see fig. 1). In addition to the requirement that a recipient be designated to competitively allocate JARC funds, SAFETEA-LU required that designated recipients certify that JARC projects are derived from locally developed, coordinated public transit-human service transportation plans. The coordinated planning process must include representatives of public, private, and nonprofit transportation and human services providers and participation by the public. Furthermore, SAFETEA-LU required that states and large urbanized areas develop and conduct a competitive selection process for their projects. After projects are selected, states and urbanized areas must apply to FTA to fund the projects. Recipients have used JARC funds for a wide variety of projects to help low-income workers get to jobs and related activities. Many projects expand the service area or extend the hours of existing bus routes. For example, in Danbury, Connecticut, JARC funds were used to add evening and weekend hours to an existing bus route. Some projects fund van pools that take groups of workers to work sites. For example, JARC funds were used for both capital and operating expenses for a van pool to employment centers from a rural area in Texas. Other projects pay for vehicle loans or vehicle repairs. For example, a human service organization in Dodgeville, Wisconsin—a rural area without transit—uses JARC funds to provide low-interest car loans to low-income workers. As of 2009, the program helped 352 low-income individuals obtain loans to purchase a car for work. See appendix II for more information on types of projects supported by JARC funds. In addition to JARC, other federal transit programs support transportation for specific purposes and populations. For example, the New Freedom program, created by SAFETEA-LU, supports new public transportation services and public transportation alternatives beyond those required by the Americans with Disabilities Act. In fiscal year 2010, $99 million was apportioned for this program. The Elderly Individuals and Individuals with Disabilities program (commonly referred to as the Section 5310 program), has existed since 1975. The Section 5310 program originally provided formula funding for capital projects to help meet the transportation needs of elderly individuals and persons with disabilities. In 1991, Congress expanded the Section 5310 program to allow funds to be used to acquire services to promote the use of private-sector providers and to coordinate with other human service agencies and public transit providers. In fiscal year 2010, $134 million was apportioned to state agencies for Section 5310. SAFETEA-LU requires that both of these programs, as with JARC, certify that projects be derived from a locally developed, coordinated public transit-human services transportation plan. FTA’s Urbanized Area Formula Grant Program (Section 5307) and Other Than Urbanized (Rural) Area Grant Program (Section 5311) also provide formula funds for general public transit programs. The Section 5307 program provides transit funding for large and small urbanized areas, while the Section 5311 program provides transit funding for rural areas. In fiscal year 2010, $4.6 billion was apportioned for these programs: $4.1 billion for the Section 5307 program and $438 million for the Section 5311 program. In our 2009 report on JARC, we found that about 14 percent of the fiscal year 2006 JARC funds lapsed, in part due to the fact that some applicants did not meet administrative requirements, such as developing a coordinated public transit-human service transportation plan, in time to apply for funds. We also found that recipients faced several challenges in implementing JARC, including the inability to provide the required local match, and that overall, the effort required to obtain JARC funds was disproportionate to the relatively small amount of funding available. JARC funds have been apportioned to 258 geographic areas and each year since SAFETEA-LU was enacted the number of designated recipients allowing JARC funds to lapse has decreased. Where JARC funds lapsed, the designated recipients lost the funds and those funds were FTA reapportioned to all designated recipients. For fiscal year 2006 apportionments, at least some of the JARC funds were allowed to lapse in 49 areas at the end of fiscal year 2008. The number of areas where funds lapsed dropped to 45 at the end of fiscal year 2009 and then to 37 at the end of fiscal year 2010. Further, the number of recipients allowing all their JARC funds to lapse decreased steadily from the end of fiscal year 2008 through 2010. In fiscal year 2008, 29 designated recipients (or 11.2 percent of all designated recipients) let all funds apportioned in fiscal year 2006 lapse. By the end of fiscal year 2010, 11 designated recipients (or 4.3 percent of all designated recipients) allowed all the JARC funds to lapse that were apportioned to them for fiscal year 2008. (See fig. 2.) In addition, the amount of funding allowed to lapse also steadily declined from the end of fiscal year 2008 through 2010. In fiscal year 2008, approximately $16.7 million, or 12 percent of all apportioned funds, were allowed to lapse. By the end of fiscal year 2010, the amount of lapsed funds had dropped to about $10.2 million, or 6.5 percent of all funds apportioned for fiscal year 2008. (See fig. 3) Recipients allowing JARC funds to lapse were concentrated in three southeastern states—Florida, Mississippi, and North Carolina—plus the Commonwealth of Puerto Rico. Recipients in those jurisdictions accounted for 77.4 percent of the $39.5 million that was allowed to lapse from the $436.6 million apportioned to JARC recipients for fiscal years 2006, 2007, and 2008. Puerto Rico alone accounted for $18.9 million, or 48 percent, of funds allowed to lapse during this period. Florida’s large urbanized area recipients allowed $4.8 million in JARC funds to lapse. Recipients in Mississippi and North Carolina accounted for more than $3 million in lapsed funds for each state. According to designated recipients and FTA officials, recipients allowed funds to lapse for reasons that included lack of proposals from potential project sponsors and a lack of matching funds. We discuss these reasons in more depth later in the report. Recipients in 30 other states allowed $8.9 million of JARC funds to lapse; in no case did the amount of funds allowed to lapse in any of these jurisdictions exceed $1 million (see fig. 4). Some of these lapses were not due to lack of interest in taking advantage of the JARC program or other program-related barriers, according to DOT officials. Rather, in some cases, funds lapsed because the grant recipients’ budgets for JARC projects totaled less than the entire amount of JARC funds available. The remaining unobligated funds could range from several hundred dollars to several thousand dollars.