Funding Levels

With documented needs in excess of $42 billion a year, the recommendations of the Reauthorization Task Force call for continued growth of guaranteed funding for the entire federal transit program at no less than 12% annually, providing for an increase in guaranteed transit funding from a level of $7.2 billion in FY 2003 to $14.3 billion in FY 2009.

Funding Distribution

As shown in the box on the next page, the recommendations generally envision building on the existing program structure, with its predictable funding levels and needs-based approach to addressing demand. The recommendations hold harmless the existing program at the FY 2003 level. Up to the $7.2 billion level guaranteed in FY 2003, no changes would be made in program structure. Any changes proposed would apply only to funding growth, above the $7.2 billion level.

As the program grows, specific funding increases would be provided for a bus replacement program in rural areas and urbanized areas of less than one million, for a program in small urbanized areas based on service factors, and for the rural formula program. (See section D on page 11 for a further discussion of these proposals.) Specified increases would also be provided for five research and planning programs (see section D on page 11), and language would be added requiring that one percent of annual funding be provided for Metropolitan and State planning. The recommendations also call for about 55% of remaining growth to be distributed to all existing programs according to their share of the current program. The remainder provides for additional funding increases for Fixed-Guideway New Starts and Extensions, the Fixed-Guideway Modernization program, and the Bus and Bus Facilities program.

Because the proposal calls for slightly greater growth (with new funding) of the three capital investment programs (New Starts, Fixed Guideway-Modernization, and Bus and Bus Facilities), Task Force members chose to apply a relationship between formula programs and capital investment programs that ensures that overall formula funding remains the largest element of the program. The Task Force proposal mandates that the ratio of the total formula funding to total capital investment funding will be 1.15 to 1.

The recommendations would modify the distribution of new growth funds within the Fixed-Guideway Modernization program. It would not change the formula used to distribute funds under this program until its funding exceeds the FY 2003 level of $1.214 billion (when the total program level is $7.2 billion). For funding growth, the task force recommends that a new, eighth tier be added that would govern the distribution of funds between the eleven "Old Areas" (urbanized areas or subareas with older fixed-guideway systems originally built with little or no federal funding) and "New Areas" (all other areas with fixed-guideway systems in operation for at least seven years). Under the proposal, 60% of new funding growth under the program would go to "Old Cities" and 40% of funding growth would go to "New Cities."

Specific Program Recommendations

1. Increased Funding for Research Programs

Proposal: Provide increases for five research and planning programs - which did not receive increases under ISTEA or TEA 21 - equal to the growth rates provided for the rest of the transit program with a one-time "catch up" provision in FY 2004.

Background: The transit research program has been invaluable in providing critical industry-driven research to the transit industry; it has reduced costs, increased productivity and enhanced operations. In contrast to the federal highway research program, federal transit research has had the same funding level for a number of years, thereby losing its purchasing power. Funding for the National Transit Institute, National Planning and Research, Rural Transportation Assistance, and University Transportation Research is an important means of improving the delivery of public transportation services. This proposal would provide a one-time adjustment in FY 2004 to restore about half of the growth that these programs would have received if their funding had been increased at the same rate as overall transit funding between FY 1992 and FY 2003. In subsequent years, the research programs are increased so that, over the six-year authorization, about half of the lost funding would be restored.

2. High Intensity Small Urbanized Area Formula Program

Proposal: Establish a High Intensity Small Urbanized Area Formula Program to provide additional capital funding for urbanized areas under 200,000 population that operate a level of service above the average level of service provided in areas of more than 200,000 population.

Background: In response to concerns of small transit intensive communities, Congress mandated a study of the issue of the effectiveness and equity of the formula program in the 1998 Transportation Equity Act for the 21^st Century (TEA 21). Section 3033 of the Act required the Federal Transit Administration to report to Congress on the Federal Transit Formula Program and address the needs of small areas with unusually high levels of transit service, both provision and consumption.

In September 2000, FTA released "The Urbanized Area Formula Program and the Needs of Small Transit Intensive Cities" (Report No. FTA-TBP10-00-04). The study concluded that "sufficient issues exist to suggest the changes to the existing Urbanized Area Formula Grant Program should be considered in 2002-2003 as part of the FY 2004 and beyond reauthorization cycle". The study defined small transit intensive communities as those that: a) have transit systems or vehicles that are heavily used by the public, measured by passenger miles per vehicle revenue mile and passenger miles per vehicle revenue hour; b) provide a high level of service to the citizenry measured by vehicle revenue miles per capita and vehicle revenue hours per capita; c) have a high rate of service consumption by the population measured by passenger miles traveled per capita and unlinked passenger trips per capita; d) have service levels that are significantly greater than would be predicted given population and density or those communities whose existing needs (reflected by service levels) are not captured by the potential needs (reflected by population and density).

Funding would be distributed based on meeting or exceeding one or more of six service factors outlined in the FTA study.

Action: Establish new program under 49 USC 5307.

3. Aging Bus Replacement Program

Proposal: Establish a new bus replacement program for Urbanized Areas of less than one million and rural areas. Grants would be provided for the replacement of vehicles that exceed 150% of the FTA required age.

Background: Transit agencies in many communities are unable to obtain sufficient federal funding under the existing Section 5309 Bus and Bus Facility program or under existing federal formula programs to replace vehicles that reach the FTA recommended age for replacement. This program is intended to replace vehicles that exceed 150% of that age and to create a more modern fleet of public transportation vehicles in every community.

Action: Add a new subsection to 49 USC 5309.

Background: A number of communities are considering development of Bus Rapid Transit (BRT) systems as a way to meet transportation needs. BRT projects are often viewed as an alternative to new fixed-guideway projects, including light or heavy rail systems, and to existing fixed-route bus service. Many proposed BRT projects emulate light rail projects operationally and include the characteristics of light rail projects and could be considered as eligible for funding under the program for Fixed-Guideway New Starts and Extensions. Eligibility of BRT projects under the New Starts program should, however, ensure that such BRT projects can be differentiated from conventional bus service, while still allowing the flexibility of phased implementation that is one of the strengths of the BRT approach.

5. Transitional Authority for UZAs Going Over 200,000 Population

Background: Current law provides transit authorities in urbanized areas (UZAs) of less than 200,000 people the flexibility to use federal funds made available under the Section 5307 Formula program for either capital or operating expenses. Many transit agencies in this category use a significant portion of federal formula funds for operating expenses. With the recent completion of the 2000 Census, there are a number of transit agencies and UZAs that will "transition" from "less than" 200,000 to "more than" 200,000 in population. Absent a change in current law, this transition would eliminate the flexibility that permits these transit agencies to use formula funds as needed.

Action: Add new provision at 49 USC 5307.

III. RECOMMENDATIONS ON POLICIES AND PROCEDURES

APTA below recommends a number of proposals to expedite program delivery; improve the planning process; streamline procurement; and revise other federal programs. As noted earlier, APTA proposes to grandfather existing programs under current law, which means APTA supports the continuation of critical ongoing programs such as the Disadvantaged Business Enterprise (DBE).

1. Expediting Program Delivery

2. Improving the Planning Process

3. Streamlining the Procurement Process

4. Revising Other Federal Programs

1. EXPEDITING PROGRAM DELIVERY

Proposal: Provide flexibility under drug and alcohol testing programs.

Background: APTA supports federal drug and alcohol testing of transportation safety workers, including operators of transit vehicles. Nonetheless, the application of the rules sometimes is duplicative, burdensome, and costly. Where the underlying program goals are unaffected, APTA urges greater flexibility in DOTs administration of the program. For example, a transit system can be subject to the testing programs of FTA, FHWA, FRA and the Coast Guard, each of which has unique testing program requirements. In such situations where more than one drug and alcohol testing program applies, the transit system should be permitted to comply with the one program that affects its operations most. In addition, under the existing DOT regulations, transit systems may have their random drug and alcohol testing rates lowered only on the basis of industry-wide data. Random testing is costly; if a transit system can show from its own data that positive drug and alcohol rates are low, it should be able to apply to FTA for lowered random testing rates on an individual basis, and not be held to a more difficult industry-wide standard. Further, FTA recipients are subject to more frequent drug and alcohol testing program audits and oversight than are other DOT modes, yet positive drug and alcohol testing rates are low in the transit industry. The transit industry should be subject to less onerous and costly audits and oversight, given this record, but at a minimum the auditing and oversight procedures for FTA should be no more stringent than they are for other modes. Finally, the application of the testing requirements to outside contractors and mechanics is especially difficult and costly, if not impossible in some instances among small operators. No safety data indicate that such off-site testing is necessary, and in the absence of such data, it should be eliminated.

Background: APTA believes that the existing charter regulations do not allow community transit needs to be met. Additional flexibility is needed to provide the most effective method for providing charter services to local communities, without creating undue competition for privately owned charter operators. Public transit operators have been unable to provide needed charter service to their communities when "willing and able" is too broadly defined under the existing regulations. While current charter regulations allow public transit operators in non-urbanized areas to provide direct service to customers when such a hardship occurs, operators in small and large urbanized areas are not currently provided this exception. Finally, the current requirements particularly affect small transit systems negatively; to promote flexibility and ease of operations, such systems should not be subject to charter bus regulations.

• Amend federal transit law to permit transit authorities to provide charter service directly to local governments and private non-profit agencies that would not otherwise be served in a cost effective and efficient manner by private operators.

• Amend the definition of "willing and able" to exclude private operators who do not have the desire or capability to provide certain trips.

• Broaden the "hardship" exception to include public transit operators in urbanized areas when the service provided by private operator creates a hardship on the customer due to minimum duration requirements or distance between the charter origin and operator location.

• Exempt small transit systems - those with 100 or fewer buses engaged in peak hour service - from charter bus requirements.

3

Proposal: Require FTA to coordinate/combine federal reviews and audits to avoid duplication of efforts.

Background: Recipients of federal transit funds are subject to comprehensive federal triennial reviews and a variety of ongoing audits on issues as diverse as procurement, drug and alcohol testing and financial management. Increasingly, such systems are subject to state and local reviews as well. FTA needs to minimize or coordinate its ongoing audits and reviews, which increasingly overlap and are duplicative. Indeed, the 1982 Surface Transportation Assistance Act added the federal triennial review provision to streamline federal oversight and concentrate federal resources on a single major review of a transit systems compliance with federal requirements once every three years. Simply put, FTA needs to return to the intent of this provision and eliminate or reduce audits not part of the triennial review process. Moreover, outside auditors used by FTA to conduct many reviews often are inexperienced and unaware of federal laws and regulations. Such outside consultants need to be better trained and more experienced; at the same time, FTA should have greater in-house staff to help perform mission-critical audits and functions.

Background: In contrast to FTA regulations, which are issued in proposed form and subject to comment and revision, FTA circulars, letters or other policy statements can be issued without the benefit of the same public review and comment process. Unfortunately, however, such documents often carry the same weight and penalties as regulations. Accordingly, any FTA substantive policy statement whether issued as guidance, policy, regulatory interpretation or as a "Dear Colleague" letter - should be subject to at least 90 days prior notice and comment before becoming effective. It should clarify specifically to whom and under what circumstances it applies. Finally, all such guidance should be available for convenient public review.

Proposal: Amend 49 USC 5310 to include public transit entities as eligible direct grantees under the state apportionments.

Background: Section 5310 is the section of federal transit law which addresses the "special needs of elderly individuals and individuals with disabilities". The section has two sub-categories: (a)(1) for state and local governments, and (a)(2) for non-profit agencies or (under special circumstances) state and local governments. The (a)(2) program is the old section 16(b)(2) program which primarily provides vehicles to non-profits.

While TEA 21 includes the (a)(1) program, Congress has not authorized any funding for this category, although Congress has consistently provided an increasing allocation of funds for the (a)(2) program. While public agencies are technically eligible for (a)(2) funding, the conditions to receive the funding effectively preclude many public entities from accessing this source; funds that go to nonprofits under Section 5310(a)(2) require a finding that service is "unavailable, insufficient, or inappropriate" under Section 5310(a)(1).

Under Section 5310(a)(2), public bodies may only receive grants if they coordinate services for the elderly and persons with disabilities, or if they certify to the Governor that no nonprofit corporations or associations are readily available in an area to provide the service. These categories unnecessarily complicate the grant process and should be merged, which should eliminate the requirement for the State to make the above findings. Another approach might be to simply eliminate the conditions on public agencies.

Under the proposal, the ability to flex funds from other sources (e.g., STP) into 5310 would be maintained. The ability for public transit operators to directly draw on these funds should also enhance local coordination opportunities.

Action: Amend federal transit law at 49 USC Section 5310 to include public transit entities as direct grantees under the state apportionments, equally eligible with other current categories. This would include the availability of contracted transportation services as an eligible capital expense.

Proposal: Permanently extend the current exemption for public transit buses that exceed Interstate System axle weight standards.

Background: Current law provides an exemption from Interstate System axle weight standards for transit buses. An FHWA/FTA study has found that only a portion of such transit bus traffic is overweight, and that use of interstate highways is vital to some transit agencies. The study further notes that, due to cost and scheduling problems, it is not feasible to operate different types of buses on and off the interstate system. Accordingly, it is in the public interest that public transit buses permanently be allowed to operate on the interstate system at a grandfathered weight.

Action: Amend the law to make the exemption permanent.

Proposal: Permit Bus and Bus Facility projects earmarked for the Elderly and Persons with Disabilities Program and the Non-Urbanized Area Formula Program to be implemented using the program guidance for those programs.

Background: A significant and increasing portion of the section 5309 Bus and Bus Facilities program is earmarked by members of Congress for otherwise traditional recipients of section 5310 and 5311 funding. Capital projects authorized under section 5309 must comply with more stringent urbanized area program requirements; project sponsors, finding it difficult to address urbanized area requirements, often have been unable to move projects forward. Accordingly, the section 5309 program should be amended to allow recipients that generally receive Section 5310 and/or 5311 funding to transfer and administer Section 5309 Bus and Bus Facility earmarked projects pursuant to the general program rules governing these programs.

1. The Job Access and Reverse Commute Program, authorized in TEA 21, assists welfare recipients and low-income individuals in getting to work. The program provides funding through a competitive application process to support welfare-to-work initiatives. The Job Access program currently is administered under section 5307 (urbanized area) program requirements regardless of the location of the project. Because section 5307 projects are subject to more stringent reporting, technical and other provisions, rural areas find it difficult to address these requirements and often have been unable to progress projects. Accordingly, rural projects should be administered under section 5311 program requirements. Urbanized area projects would continue to be administered under section 5307 requirements.

2. Currently, JARC low-income eligibility is defined as 150% of the federal poverty level. In contrast, for the Temporary Assistance for Needy Families (TANF) program, a state determines eligible definitions. The programs should be made consistent in this regard.

3. JARC grant solicitation cycles have not coincided with TANF grant cycles, possibly jeopardizing the funding match for some projects.

Background: TEA 21 amended Section 5319 of the Transit Program, Bicycle Facilities, which specifies federal share requirements for projects that provide access for bicycles to mass transportation facilities, to provide shelters and parking facilities for bicycles in or around mass transportation facilities or to install equipment for transporting bicycles on mass transportation vehicles. Under the TEA 21 provision, bicycle projects that are funded using federal transit grants are eligible for a federal share of 90 percent, except grants made under the requirements of Section 5307 (k). Under this exception, grants made under Section 5307(k), Transit Enhancements, are eligible for a 95 percent federal share. Section 5307 (k), however, only applies to urbanized areas of 200,000 or more in population. As such, this exception sets up different federal share requirements for bicycle projects in larger urbanized areas and similar projects in small-urbanized areas and rural cities and counties.

Background: Under federal highway law, the emergency relief (ER) program provides funds for the repair or reconstruction of federal-aid highways and roads on federal lands which have suffered serious damage as a result of (1) natural disasters or (2) catastrophic failures from an external cause. Similar language should be added to federal transit law for affected transit projects. In addition, the provision should be expanded to include broader authority relating to economic stimulus funding made available by Congress on a national basis. Finally, the provision should require that any funds so provided may be on such terms and conditions as the Secretary of Transportation deems appropriate, which means that local share and other project development requirements such as procurement, environmental and planning matters could be waived by the Secretary as appropriate in light of the emergency at hand. No funds need be authorized for the provision other than "such sums as may be necessary" which provides sufficient authority for emergency supplemental funds to be made available under this section.

Action: Amend federal transit law to provide emergency relief authority for emergency supplemental or related funding that is made available separate from the federal transit program authorized funding.

Background: Currently, FTA provides pre-award authority to cover certain planning and capital costs prior to grant award, once an appropriations bill has been enacted into law. This pre-award automatic spending authority permits a grantee to incur costs on an eligible transit capital or planning project without prejudice to possible future federal participation in the cost of the project. Before exercising pre-award authority, grantees must comply with environmental and planning requirements. All federal requirements must ultimately be met; failure to do so renders an otherwise eligible project ineligible for federal financial assistance. Essentially the authority applies to all federally funded transit projects, if they are formula funded or have an earmark, other than New Start projects. But FTA Regional offices usually want to work closely with the grantee during the process, including sometimes even requiring that a grant application be filed before the grantee proceed with the project. The proposal would provide that, for projects affected, a recipient could cover costs prior to grant award so long as it has met the requirements of NEPA and planning requirements. No formal signoff by FTA would be required.

Action: Amend federal transit law to make pre-award authority permanent in federal transit law.

Background: The period of record retention should commence with the closeout date of the grantees project. For this purpose a project is defined as an undertaking by a grantee that is identified by a unique scope of work. (This is not the definition that is used in the TEAM system, where project is synonymous with grant.) Project records should be maintained for seven years from the closeout date as reported to the FTA. In general, no records should be retained for more than seven years from the last formal action.

Action: Revise federal transit law accordingly.

B. IMPROVING THE PLANNING PROCESS

Introduction: The planning provisions of ISTEA triggered a more inclusive, comprehensive, inter-modal, flexible, responsive, and transit-friendly approach to transportation planning. These planning provisions provided communities with a sound planning process that helped communities make difficult choices and justify them in the short and long terms. TEA 21 continued ISTEAs planning provisions, while providing beneficial simplification. However, Section 1308 of TEA 21 also called for the elimination of Major Investment Studies one of the key multi-modal planning tools created under ISTEA.

With the exception of Section 1308, APTA endorses the TEA 21 planning provisions, and in some cases recommends measures to strengthen them. APTA supports reauthorization legislation that would achieve the following goals:

• Reauthorization should ensure multi-modal planning and a "level playing field" for the consideration of public transportation alternatives within a multi-modal planning process;

• The planning process should serve decision-making at all levels;

• Reauthorization should promote a balance of economic, mobility, environmental, and other objectives;

• APTA supports environmental streamlining, so long as it does not create a bias against any particular mode, and so long as it does not compromise environmental protections;

• Reauthorization should ensure early, proactive, and continuous collaboration among all planning, environmental, and modal implementing agencies;

• Reauthorization should provide opportunities for early and continuing stakeholder participation, including all groups with an interest in transportation decision-making.

We propose the following planning provisions for inclusion in the next authorization act:

Proposal: Strengthen Metropolitan Planning Organizations

Background: The economic health of metropolitan regions is an essential component of our nations economic health. Making metropolitan regions more economically productive depends on an efficient and effective intermodal transportation system that moves people and goods efficiently and effectively. APTA supports a prominent role for Metropolitan Planning Organizations (MPOs) in a collaborative, multi-modal transportation decision-making process.

MPOs have been charged with a growing list of responsibilities clean air conformity, operations and management, inter-modal planning, performance monitoring, security, early consideration of environmental impacts, public and agency involvement, and others. Meanwhile, the number of MPOs and the geographic coverage of many existing MPOs is growing as a result of the 2000 Census, which identified 61 new urbanized areas.

The best way to strengthen MPOs is to ensure that they have sufficient funding to carry out their responsibilities. With respect to Title 49 planning funds, TEA 21, through its authorization levels, set the level of planning funds at 1% of the total transit program. This level has been met each year under TEA 21, primarily because the guaranteed funding levels have resulted in very little tampering with the authorized levels. This ratio (1% of all program funds) is likely to continue under reauthorization. However, because there is much uncertainty as to whether the guarantee will continue to be honored, it is proposed that language be included in the reauthorization bill that requires that 1% of the total program funds in any year be set aside for the metropolitan and state planning programs.

Background: To support a thorough consideration of views in the transportation planning process, States and MPOs should be encouraged to give agencies that administer or operate major modes or systems of transportation a voice in the decision-making process. This may include representation/membership on the policy body and/or other appropriate committees. Incorporate into statute the administrative language in 23 CFR 450.306(K) which provides that adding membership to the policy body does not automatically trigger redesignation of the MPO.

Background: The importance of participatory planning in developing transportation plans, programs, projects, and policies cannot be overemphasized. Effective transportation planning does not take place without meaningful public involvement programs tailored to the particular local circumstances. Where there is effective public involvement, it appears that transit solutions receive higher priority. Other benefits of public input include improved planning, facilitated decision-making, enhanced legitimacy, and increased implementation prospects.

Existing law requires that MPOs provide citizens (and others) with "a reasonable opportunity to comment" on the long-range plan and the Transportation Improvement Plan (TIP) before the plan and program are approved. The law does not require that public involvement be early and continuous during the development of the plan and TIP. Although FHWA/FTA planning regulations require that public involvement begin early in the plan development/update process, this requirement is not currently founded in law.

Proposal: Reduce the time required to develop transportation projects.

Background: APTA supports responsible reforms that will advance transportation projects. However, we do not support efforts to weaken NEPA, the Clean Air Act Amendments, or key planning requirements, especially regarding major capital investments. These are serious decisions with a wide range of potential positive and negative impacts, and it is prudent to do adequate planning and analyses to ensure sound decisions. Further, reform initiatives should be consistent with the goal of a "level playing field" for highways and transit.

TEA 21 helped to improve the environmental review process for highways by allowing States to conduct a single procurement for NEPA documentation and subsequent engineering and design, provided the State assures the objectivity of the NEPA work. This provision (23 USC 112(g)) does not currently specifically cover transit agencies. APTA believes that the same requirements should apply to both highways and transit.

Proposal: Support the continued use of Corridor Planning (Major Investment Studies) as a process to make sound investment choices to solve transportation problems.

Background: Following ISTEA, FHWA and FTA created the Major Investment Study (MIS) process to provide a sound basis for reaching major investment decisions in metropolitan areas. APTA strongly supported the MIS process as it existed prior to TEA 21. However, despite the best efforts of FTA and FHWA, the MIS process was widely misunderstood. The FHWA/FTA environmental regulations were never updated to be consistent with the planning regulations, leading to confusion about the relationship between MIS and the NEPA process. Some questioned whether decisions made in planning as part of an MIS even those decisions reflecting NEPA principles such as public involvement and early consideration of environmental effects would have "standing" in a subsequent NEPA process.

Section 1308 of TEA 21 required that the MIS process be eliminated as a separate requirement, and directed that FHWA and FTA promulgate regulations to integrate MIS requirements into the metropolitan transportation planning process and the NEPA process. Draft regulations were released for comment in May 2000, but final regulations have not been issued.

During the comment process on the May 2000 draft regulations, APTA, AASHTO, and AMPO issued a joint statement identifying points of agreement regarding MIS/NEPA integration. These points included:

• Planning and project development activities should be linked and the decisions made in the planning process should be incorporated into the planning process;

• The evaluation of multi-modal transportation alternatives should continue to be an integral part of the decision-making process;

• As applicable, the transportation planning process should reach "design concept and scope" decisions as defined by the Clean Air Act Amendments;

• The transportation planning process should involve the active participation and involvement of different modes, environmental resource agencies and local officials; and

• The overall time from the beginning of the planning process to project implementation should be reduced as called for by Congress.

APTA strongly supports the continued use of multi-modal corridor planning to make sound choices on major transportation investments. This is accomplished for major transit investments seeking New Starts funds, because such projects must be the product of an Alternatives Analysis. Similar requirements should apply to highway projects.

Background: ISTEA included 15 factors to be considered in metropolitan planning with the intent of stimulating comprehensive thinking. TEA 21 reduced the number of planning factors to 7 by consolidation. While the factors have sometimes been dealt with in perfunctory ways, APTA supports the underlying premise of the factors and recommends the following provision to strengthen and broaden their effectiveness.

Background: Although the federal government does not require land use planning, it has recognized that transit-supportive land use patterns and associated policies are the cornerstone of success for transit investments. Therefore, Congress and the Administration must continue to give special consideration to projects with transit-supportive land use patterns and/or legally binding policies and must encourage and promote the coordination of land use and transportation planning.

Background: Section 3008 of TEA 21 modified the New Starts evaluation and ratings process to require FTA to categorize each proposed project as "highly recommended", "recommended", or "not recommended". The "not recommended" category creates a Catch 22 situation. Projects may receive a "not recommended" rating, for example, because they do not currently have sufficient funding or other policy commitments in place. FTAs "not recommended" rating may make it more difficult for the transit agency to obtain these commitments, since the rating could give the impression that a potentially worthy project lacks merit. The requirement that a project be "recommended" before it can be approved for Preliminary Engineering (PE) and Final Design is also confusing. Projects that receive a "recommended" or "highly recommended" rating may not, in fact, be ready for a funding recommendation.

APTAs comments to the FTA docket on the new starts rulemaking proposed that the "highly recommended", "recommended", and "not recommended" categories only be used in the context of funding for the next fiscal year. It was further proposed that different terminology be used to describe projects that have sufficient merit to be approved for PE or Final Design but that are not ready for a funding recommendation. (Such phrases as "not rated" or "not ready for recommendation" were suggested.) FTA responded, in the preamble to the final rule, that the three categories are established in law by TEA 21 and that FTA is not at liberty to change them.

Background: FTA regulations on the New Starts program require project sponsors to submit, each year, a package of information on the justification for and financial commitment to their proposed projects. FTA technical guidance further defines the reporting requirements. Developing these packages often requires significant time and resources. Project sponsors seeking less than $25 million in New Starts funds are exempt from the criteria, and are not required to make an annual submission, but are not eligible for a Full Funding Grant Agreement (FFGA). Project sponsors seeking slightly more than $25 million are subject to the same annual reporting requirements as those seeking several hundred million dollars or more. These requirements place a disproportionate and unnecessary burden on those sponsors seeking relatively small amounts of New Starts funds.

Background: The "financial constraint" requirement is necessary to protect the integrity of the MPO planning processes. It also forces decision-makers to set a more realistic set of priorities in a collaborative, participatory setting. In addition, financial constraints can also help areas to obtain more resources. When state and local officials fully realize the shortfall between available funding and transportation needs, they more readily work to support additional funding sources.

TEA 21 (Section 1203(h)(1)(C)) added new requirements for the cooperative development of revenue estimates for TIPs but did not include similar language for long-range plans. Under the law as it currently stands, States and MPOs (but not transit agencies) cooperatively develop estimates of funds that will be available to support implementation of the plan; while States, MPOs and public transit agencies cooperatively develop estimates of funding to support implementation of the TIP.

Proposal: Continue federal oversight in the planning process to ensure consideration and consultation between state and regional stakeholders.

Background: APTA believes the FHWA/FTA certification process can provide much-needed oversight to ensure that all the players are adhering to the principles of Federal law.

ISTEA and TEA 21 changed the way we do business. Some oversight must be expected to ensure that the new principles are being followed. However, FHWA and FTA have been inconsistent in how they apply their certification procedures.

Background: APTA supports state planning as generally defined in ISTEA and TEA 21. However, there is no requirement that state transportation plans reflect the transportation plans adopted by MPOs.

C. STREAMLINING THE PROCUREMENT PROCESS

We propose the following procurement provisions for inclusion in the next authorization act:

Proposal: Apply federal procurement requirements only to capital funds.

Background: Under current FTA policy, federal procurement requirements apply to all federally funded projects, including those funded with operating assistance. While operating assistance no longer is available in areas over 200,000 in population, it remains eligible for areas under 200,000 in population. Because operating assistance is "fungible" and cannot be limited to a particular project in the way that capital funds can, this FTA policy essentially means that federal procurement rules apply to all of a grantees procurements, even those funded solely from state and local sources. There is no indication that federal procurement requirements were meant to apply so broadly. Accordingly, APTA recommends that federal transit law be amended to limit federal procurement requirements to the use of federal capital funds, thereby permitting projects or parts of projects not using federal capital funds to be subject solely to relevant state and local requirements. In short, federal procurement requirements would apply only to the particular capital activities that were being federally funded.

Background: In 49 USC Section 5326(b), a five-year limitation is placed on multi-year contracts for rolling stock and replacement parts and options to purchase additional such equipment. Recently, FTA administratively removed five-year limitations on procurements from other types of contracts. Removing the statutory five-year limitation on rolling stock and replacement part procurements would make this type of procurement consistent with the rest of transit procurements.

Background: The federal General Services Administration (GSA) has a process under which federal agencies may procure products from a pre-approved schedule of GSA contracts. Over 4 million commercial services and products can be ordered directly from GSA schedule contractors. This means that federal agencies can quickly make procurements that already satisfy federal procurement requirements by choosing products from the GSA schedule of contracts. There have been efforts in Congress to extend this procurement choice to public transit systems via appropriations acts, but they have never been successful. Accordingly, APTA recommends that the GSA schedule process be extended to recipients of federal transit funds, which means that vehicle manufacturers and other suppliers of products to the transit industry would be able to apply to be on the GSA schedule of approved contracts. Any vehicles or other products on the GSA schedule could thus be procured directly by federal transit systems without going through the time-consuming federal procurement process. This would provide transit systems with another acquisition alternative, one they could use or not use at their option. Finally, it is important to emphasize that any vehicles or products so procured would also have to meet all of the federal substantive requirements that all other federal transit procurements must meet - Buy America, environmental requirements, etc.

Background: Some thirty states impose in-state dealership processing and fee requirements for vehicles purchased out of state. Failure to comply with such laws can result in fines and penalties. Apparently many states do not enforce the requirements for public transit vehicles, but some do. Compliance with such laws is costly and burdensome, in some cases costing approximately $500 per vehicle purchased. Indeed, the paperwork requirements alone can be time consuming and complicated, and many dealers are not interested in participating in the process. It is not in the public interest to impose additional costs on federally funded vehicles purchased by public tax-exempt organizations to be used solely for transit purposes. Accordingly, vehicles purchased with federal funds by tax-exempt organizations for public transportation purposes should not be subject to such restrictive dealership requirements.

Action: Amend federal transit law to prohibit states from imposing such restrictive dealership practices on federally funded equipment.

D. REVISING OTHER FEDERAL PROGRAMS

We propose the following provisions for inclusion in the next authorization act:

Background: The TEA 21 Final Guidance for the CMAQ program states that "routine [highway and transit] maintenance projects are not eligible for CMAQ funding." CMAQ or its guidance should be modified to allow CMAQ funding for significant capital improvements to transit stations. Station improvement projects in old transit systems are more similar to a highway widening project than a highway repaving or reconstruction project. For example, station improvement projects often include widening or adding new stairs, reconfiguring fare control areas, removing obstructions, rehabilitating or replacing platforms, improving accessibility, replacing or rehabilitating platforms, installing elevators to comply with the ADA, new lighting and signage, and new/rebuilt architectural features. These improvements make stations more secure, comfortable, convenient, as well as reduce the time required to enter/exit stations and to transfer between routes at stations. Since they can help attract more riders to transit systems, they should be eligible for CMAQ funding.

Background: The CMAQ program is designed to fund projects that maximize air quality and congestion relief benefits. The restriction on using CMAQ funds for operating expenses of newly initiated CMAQ projects for more than three years creates an incentive for making capital expenditures that may not be efficient and may arbitrarily eliminate some effective operating expenditures. Indeed, a pending Transportation Research Board Special Report assessing the 10 years of the CMAQ program will recommend that restrictions of the use of CMAQ funds for operating assistance should be relaxed if it can be demonstrated that using the funds for this purpose continues to be cost effective.

Background: The regulations implementing the Clean Air Act, with respect to transportation projects, (90 CFR 126) list projects that can be considered exempt from conformity analysis for inclusion in the Transportation Improvement Program (TIP). These three categories of projects should be added to the list:

• Fleet Procurement: All fleet expansions should be exempt since additional passenger capacity encourages the use of transit. Currently, purchases of new buses or rail cars that expand a fleet size must have a minor impact on fleet size to be exempt.

• Rail System Improvements: Projects that increase line throughput (e.g., train control, signalization), provide operational flexibility (e.g., crossovers) and increase passenger throughput capacity (e.g., fare collection, circulation improvements) should be exempt.

• Station Improvements and Access to Station: Improvements to existing transit stations should be exempt. Similarly, projects that enhance access to stations such as additional parking, shuttle buses and shuttle ferries should also be exempt. These types of projects that help divert automobile trips to transit should be exempt.

Background: FHWA has a Ferryboat Discretionary program, which it administers to fund the construction of ferryboats and ferry terminal facilities. The program is funded from the Highway Trust Fund with an 80 percent federal share. TEA 21 expanded eligibility for ferry boats and terminals beyond those that are publicly owned to also include those that are publicly operated or those that are majority publicly owned and provide substantial public benefit. In the FBD TEA 21 program, $20 million is set aside for three states which operate large ferry boat systems: Washington, Alaska, and New York. The remainder of the annual funding is available for distribution throughout the country. A number of public transit systems operate public ferry systems, which are eligible for funding under this provision.

Background: In the event of a conformity lapse, projects that expand transit capacity in order to meet current demand should be allowed to proceed. Since these projects can help regions meet air quality standards, it is counterproductive to subject them to a delay during a conformity lapse.

Background: APTA supports responsible measures to expedite the delivery of transit projects. However, we do not support efforts to weaken NEPA, community involvement programs, the National Historic Preservation Act, the Clean Air Act Amendments, or key planning requirements, especially regarding major capital investments. These are serious decisions with a wide range of potential positive and negative impacts, and it is prudent to do adequate planning and analyses to ensure sound decisions. Further, streamlining initiatives should be consistent with the goal of a "level playing field" for highways and transit.

Both Section 106 of the National Historic Preservation Act and Section 4(f) of the Department of Transportation Act apply to cultural resources (historic and archaeological properties). Section 106 requires that federal agencies consider the effects of their actions on cultural resources, and that they provide an opportunity for the State Historic Preservation Officer, the Advisory Council on Historic Preservation, and interested parties to comment on an undertaking that affects properties listed on or eligible for listing on the National Register of Historic Places. Under Section 4(f), the Secretary of Transportation cannot approve the use of properties listed on or eligible for listing on the National Register unless there are no prudent and feasible alternatives to the use of such properties, and the proposed use incorporates all planning to minimize harm. Reliance on the Section 106 process alone should provide adequate protection for historic properties and would streamline the project approval process.

Action: Revise Title 23 and Title 49 so that compliance with Section 106 would be sufficient to address impacts on historic and archaeological properties, and so that historic and archaeological properties would no longer be subject to 4(f) requirements. Public parks, recreation areas, and wildlife/water fowl refuges would continue to be covered under Section 4(f).

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Proposal: Modify the employee commute benefit to narrow the difference between the $100 per month tax-free transit benefit and the $185 per month tax-free parking benefit.

Background: Employers can subsidize employee work trips through tax-free fringe benefits. Persons commuting in personal vehicles can receive free parking and transit users can receive transit passes. The value of these two benefits is not, however, equal. The parking benefit is tax-free up to $185 per month whereas the transit pass benefit is tax free only up to $100 per month. Transit users are limited to only a portion of the benefit available to private vehicle drivers simply because they choose to use transit. In additionto encouraging private vehicle commuting and discouraging transit commuting, the tax-free parking benefit costs the federal government $17 billion annually in lost tax revenues. In recent years, Congress has made significant progress in redressing this imbalance. APTA recommends further reforms to equalize the tax-exempt fringe benefit for transit riders and private vehicle commuters, and supports certain revisions to the tax code to eliminate barriers that deter employers from offering the benefit.

Action: Amend federal tax law to provide equal monthly tax benefits for employee parking and employee transit expenses.

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Proposal: Eliminate current distinctions that make some employees and other workers ineligible for transportation commute tax benefits.

Background: Currently partners, the self-employed, and 2% or higher shareholders of subchapter S corporations are not eligible to receive pre-tax benefits to pay for their transportation commute. Section 132(f) should be changed to make these employees and workers eligible for transportation commute tax benefits.

Proposal: Establish federal requirements in TANF and the Job Access and Reverse Commute (JARC) program in TEA 21 to mandate states and/or local entities to coordinate such services utilizing the most effective state, local or regional mechanisms where networks for service exist. In addition, provide in both TANF and TEA 21 that TANF funds be used to match the JARC program funds.

Background: The 1996 "Personal Responsibility and Work Opportunity Reconciliation Act of 1996" (PRWORA) is the welfare reform law that transformed the nations welfare system from an entitlement program to a block grant program requiring work and personal responsibility in exchange for time-limited cash assistance. The Temporary Assistance for Needy Families (TANF) program, established by the PRWORA, provides $16.38 billion annually in the form of block grants to the states. The TANF program went into effect on July 1, 1997.

The TANF program regulations provide specific mandates regarding time limits and work requirements; however, the regulations give states broad flexibility in the provision of support services, such as transportation. Many states have taken advantage of this opportunity by developing innovative and expanded transportation services, while others have chosen not to prioritize transportation services. The variations in the manner in which each state addresses public transportation, as well as the diverse relationships between public transportation and health and human service agencies have had an adverse impact on the implementation of coordinated TANF and JARC public transportation projects. These differences have not only encouraged the proliferation of duplicative high cost client specific transportation services but have also impacted a Grantees or sub-recipients ability to access JARC funds because perceived requirements (e.g., Cost Allocation) governing the use of TANF funds for shared use services are so bureaucratic that it precluded the use of TANF funds to meet the 50% match requirement for JARC.

Coordination is not an issue in states that have state/local mandates or in states where common goals have been agreed upon by both the public transportation and health and human service agencies. However, in areas of the country where public transportation and health and human service agencies choose not to coordinate, there are no existing federal processes or incentives that support mutual participation. Moreover, there is little value in requiring one party (i.e., transportation), through reauthorization of its legislation (i.e., TEA 21) to coordinate, if the other party does not have a similar requirement in its legislation (i.e., TANF). In short, mandated coordination should provide for enhanced use of public transportation services and counteract practices such as "trip shedding."

Action:

• Incorporate mechanisms into TEA 21 and TANF reauthorizations to encourage and enable effective coordination of HHS-funded programs aimed at individual client transportation services (such as TANF) and transit system services (funded through TEA 21 and its successors). Such mechanisms include:

• Amend TANF and the Job Access and Reverse Commute program in TEA 21 requiring states and/or local entities to coordinate such services utilizing whatever are the most effective state, local or regional mechanisms where networks for service exist.

• Provide in both TANF and TEA 21 that TANF funds can be used to match the Job Access and Reverse Commute (JARC) program funds.

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Proposal: Provide for a pilot program that identifies the benefits of shared use of freight rail lines by light rail.

Background: The shared use of freight rail lines by light rail vehicles is a common and effective practice in Europe. In the U.S., the Federal Railroad Administration (FRA) maintains a number of regulatory requirements on such arrangements, and approves them only where there is "temporal separation" - that is, when the light rail vehicle and freight rail system do not operate at the same time. APTA and others have been advocating a more flexible approach, recognizing what technology and coordination can accomplish. Accordingly, the Task Force recommends that a pilot program be jointly carried out by the FTA and FRA to demonstrate how equivalent safety measures can be applied to accommodate shared used operations safely, effectively and smoothly. Conclusions drawn from the pilot program could provide the basis for FRA to revise its existing regulatory framework.

Background: What will be the impact of this on the gas tax and resources coming into the Highway Trust Fund? How will surface infrastructure needs - highway and transit - be met in the FY 2010 surface transportation reauthorization bill?

APPENDIX:APTA TEA 21 Reauthorization Funding Proposal. Unanimously adopted by APTA Board of Directors 9/22/02.