1. (a) Purpose. Transportation Code, Chapter 456 requires the commission to allocate, at the beginning of each fiscal biennium, certain amounts appropriated for public transportation. This section sets out the policies, procedures, and requirements for that allocation.

2. (b) Formula allocation. At the beginning of each state fiscal biennium, an amount equal to the amount appropriated from all sources to the commission by the legislature for that biennium for public transportation, other than federal funds and amounts specifically appropriated for coordination, technical support, or other costs of administration, will be allocated to urban and rural transit districts. The commission will allocate 35% of the funding to urban transit districts and 65% of the funding to rural transit districts.

   1. (1) Urban funds available under this section will be allocated to urban transit districts that are designated recipients or transit providers in urbanized areas that are not served by an authority and to designated recipients that received state transit funding during the fiscal biennium ending August 31, 1997, that are not served by an authority but are located in urbanized areas that include one or more authorities. Any local governmental entity having the power to operate or maintain a public transportation system, except an authority, may receive formula program funds. The commission will distribute the money in the following manner.

      1. (A) Urban funds will be divided into two tiers. Tier one will include urban transit districts that restrict transit eligibility for all public transportation services to the elderly and persons with disabilities. Funding available in tier one is calculated by multiplying the available urban funding by the population of elderly and persons with disabilities in tier one providers, divided by the service eligible population of urbanized areas receiving funding under this subchapter. Tier two will include urban transit districts that provide any service to the general population. The funds for tier two will be the remaining balance of the available funds after the funds for tier one have been allocated. Funds within each tier will be allocated to urban transit districts based on subparagraphs (B) and (C) of this paragraph.
      2. (B) The need based allocation is determined as follows: 65% for the 2008 - 2009 biennium, and 50% for each biennium thereafter, based on population by using the latest census data available from, and as defined by, the U.S. Census Bureau for each urbanized area relative to the sum of all urbanized areas. Any urban transit district whose urbanized area population is 200,000 or greater will have the population adjusted to reflect a population level of 199,999; except that any urban transit district receiving funds in tier one, as described in subparagraph (A) of this paragraph, will have the population adjusted to reflect a population level of 199,999, or the urbanized area population of the place as defined by the U.S. Census Bureau, whichever is less.
      3. (C) The performance based allocation will be 35% for the 2008 - 2009 biennium, and 50% for each biennium thereafter. An urban transit district is eligible for funding under this subparagraph if it is in good standing with the department and has no deficiencies and no findings of noncompliance. The commission will award the funding based on the following weighted criteria: 30% for local funds per operating expense, 20% for ridership per capita, 30% for ridership per revenue mile, and 20% for revenue miles per operating expense. These criteria may be calculated using the urban transit district's annual audit for the previously completed fiscal year, data from other sources, or from the department's records.

   2. (2) Rural funds available under this section will be allocated to rural transit districts in nonurbanized areas. Any eligible recipient may receive formula program funds. The funding will be allocated to rural transit districts based upon need and performance as described in subparagraphs (A) and (B) of this paragraph.

      1. (A) The need based allocation is determined as follows: 80% will be awarded for fiscal year 2008, and 65% for each fiscal year thereafter giving consideration to population weighted at 75% and on land area weighted at 25% for each nonurbanized area relative to the sum of all nonurbanized areas.
      2. (B) The performance based allocation will be 20% for fiscal year 2008, and 35% for each biennium thereafter. A rural transit district is eligible for funding under this subparagraph if it is in good standing with the department and has no deficiencies and no findings of noncompliance. The commission will award the funding by giving equal consideration to local funds per operating expense, ridership per revenue mile, and revenue miles per operating expense. These criteria may be calculated using the rural transit district's annual audit for the previously completed fiscal year, data from other sources, or from the department's records.

   3. (3) Funds allocated under this section and any local funds may be used for any transit-related activity except that a designated recipient not included in a transit authority but located in an urbanized area that includes one or more transit authorities may only use funds to provide:

      1. (A) 65% of the local share requirement for federally financed projects for capital improvements;
      2. (B) 50% of the local share requirement for projects for operating expenses and administrative costs;
      3. (C) 50% of the total cost of a public transportation capital improvement, if the designated recipient certifies that federal money is unavailable for the proposed project and the commission finds that the proposed project is vitally important to the development of public transportation in the state; and
      4. (D) 65% of the local share requirement for federally financed planning activities.
3. (c) Funding stability. Subject to available appropriation, no award to an urban or rural transit district under this section will be less than 90% of the award to that transit district for the previous fiscal year. All allocations under subsection (b)(1) and (2) of this section are subject to revision to comply with this standard. If available funding exceeds $57,482,135, additional funding will be awarded by the commission on a pro rata basis, competitively, or a combination of both. Consideration for the award of these additional funds may include, but is not limited to, coordination and technical support activities, compensation for unforeseen funding anomalies, assistance with eliminating waste and ensuring efficiency, maximum coverage in the provision of public transportation services, adjustment for reductions in purchasing power, and reductions in air pollution. These additional awards are not subject to the funding stability allocation process in succeeding fiscal years.
4. (d) Change in service area. If part of an urban or rural transit district's service area is changed due to declaration by the United States Census Bureau, or if the service area is otherwise altered, the department and the urban or rural transit district shall negotiate an appropriate adjustment in the funding awarded to that urban or rural transit district for that funding year or any subsequent year, as appropriate. This negotiated adjustment is not subject to the minimum and maximum standards set forth in subsection (c) of this section.
5. (e) Unobligated funds. Any money under this section that the designated recipient has not applied for before the November commission meeting in the second year of a state fiscal biennium will be administered by the commission under the discretionary program described in §31.13 of this subchapter.
6. (f) Returned funds. Any money under this section that the designated recipient agrees to return to the department will be administered by the commission under the discretionary program described in §31.13 of this subchapter.
7. (g) Application. To receive funds allocated under this section, a designated recipient must first submit a completed application, in the form prescribed by the department, to the appropriate district. The application must include certification that the proposed public transportation project is consistent with continuing, cooperating, and comprehensive regional transportation planning implemented in accordance with 49 USC §5301. Federal approval of a proposed public transportation project will be accepted as a determination that all federal planning requirements have been met.
8. (h) Project evaluation. In evaluating a project under this section, the department will consider the need for fast, safe, efficient, and economical public transportation and the approval of the FTA, or its successor.

Source Note:The provisions of this §31.11 adopted to be effective November 23, 1989, 14 TexReg 5938; amended to be effective January 10, 1992, 17 TexReg 47; amended to be effective January 13, 1994, 19 TexReg 90; amended to be effective March 22, 1996, 21 TexReg 2096; amended to be effective March 26, 1998, 23 TexReg 3044; amended to be effective February 15, 2001, 26 TexReg 1365; amended to be effective April 17, 2003, 28 TexReg 3080; amended to be effective September 1, 2004, 29 TexReg 6734; amended to be effective June 20, 2005, 30 TexReg 3606; amended to be effective July 20, 2006, 31 TexReg 5675; amended to be effective February 21, 2008, 33 TexReg 1380.