Section 2: Program Specifics for Section 5310 and 5311 (Formula Programs)

Who Is Eligible

Under these programs, a State agency is designated to be the direct grantee on its own behalf or on behalf of subrecipients. Eligible subrecipients include State agencies, local public bodies, Indian tribes, private-nonprofit organizations and operators of public transportation services. A private-for profit operator may participate in the program as a third party contractor for grantees or eligible subrecipients.

State's Role

The State as the direct grantee of Section 5310 and 5311 funding is responsible for complying with specific FTA requirements. These include the solicitation/ evaluation/selection of subrecipients and projects; inclusion of the projects in the Statewide Transportation Improvement Program (STIP); and financial and project management requirements. In order for the State to comply with some Federal requirements it may pass these requirements on to subrecipients depending upon the size and scope of a project. These requirements may include the National Environmental Policy Act, Drug and Alcohol Requirements and Civil Rights. State agencies may have their own more stringent requirements or restrictions. Therefore, early coordination with your State agency is important.

What Is Eligible

Section 5311 (Non-urbanized Area Formula Program): Funds may be used for capital, operating, project and State administration, and the Rural Transit Assistance Program (RTAP).

• Capital activities include the acquisition, construction and improvement of public transit facilities, buses, vans and other equipment.

• Eligible operating expenses are costs directly related to system operations such as drivers' and dispatchers' salaries and fringe benefits, and licenses, fuel and oil. FTA participates in the net operating cost i.e. after subtracting farebox and non-matching revenues. The State has the discretion to treat some expenses as either operating or capital expenses, such as maintenance and project administration.

• Project administration (non-operating expenses) may include staff salaries, marketing expenses, insurance premiums, office supplies, rental fees for facilities and equipment, standard overhead rates and the costs of administering drug and alcohol testing. Each State may treat administrative costs as either operating or administrative expenses.

• State administrative costs include salaries, overhead expenses, supplies, and office equipment used to administer the program. The State has the discretion to utilize these funds for planning and/or technical assistance for the subrecipients and may require matching funds for these activities. State administrative costs cannot exceed 15% of the annual apportionment.

• Intercity Bus activities include capital and operating assistance as defined above and planning and marketing. States must use 15% of their annual apportionment to support intercity bus service, unless the Governor certifies that the State has adequately met its intercity bus needs.

• The Rural Transit Assistance Program (RTAP) provides funds to assist in the design and implementation of training and technical assistance projects and other support services to meet the need of rural operators. Acquisition of equipment to support one of these activities is eligible. RTAP has both State and national program components.

Section 5310 (Elderly and Persons with Disabilities Program): Funding under the Section 5310 program is available only for capital expenses to support the provision of transportation services to meet the special needs of elderly persons and persons with disabilities. Eligible capital expenses may also include, at the option of the subrecipient, the acquisition of transportation services under a contract, lease or other arrangement. Activities not funded under this program include operating assistance, planning, intercity bus and RTAP activities.

Funding Availability

Section 5311 (Non-urbanized Program): Funds are available to a State for obligation in the year of apportionment plus two years. For example, funds apportioned in fiscal year 2003 are available for obligation until September 30, 2005. Once funds are obligated in a grant they are available until fully expended and the grant is complete and ready for closeout.

Section 5310 (Elderly and Persons with Disabilities Program): Funds are available to a State for obligation (approval) only for the fiscal year in which they are apportioned. Once funds are obligated in a grant they are available until fully expended and the grant is complete and ready for closeout.

Funding Ratios

Both the Section 5310 and 5311 programs have local share requirements. The specific matching requirements follow:

*State decides percentage of Federal share. The Federal percentages are maximum amounts. An overmatch of local or State funds is allowed.

** There are three exceptions to the 80% match for capital projects. The Federal share may be 90% to provide access for bicycles to transit facilities, or to install racks or other equipment for transporting bicycles on transit vehicles; for vehicle-related equipment to comply with the Americans with Disabilities Act (ADA); or vehicle-related equipment for the purpose of complying with or maintaining compliance with the Clean Air Act, as amended (CAA).

Sources of Local Share

All of the local share must be provided in cash from sources other than Federal funds unless another Federal statute permits the use of specific Federal funds for local share. Such use is dependent upon agreement by the Federal agency. Non-federal sources include: State or local appropriations; dedicated tax revenues; private donations; and net income generated from advertising and concessions. Non-cash share such as donations, volunteer services, or in-kind contributions are eligible to be counted toward the local match as long as the value of each is documented and supported, and represents a cost that would otherwise be eligible under the program.

The 5311 Program (non-urbanized) expands local share flexibility because income from contracts to provide human service transportation may be used either to reduce the net project cost or to provide local match for operating assistance. In either case, the cost of providing the contract service is included in the total project cost. Details are provided in the individual grant circulars.

 FTA Circular 9040.1E, Pages III-6 & 7 and FTA Circular 9070.1E, Page II-4  &  49 CFR Part 18 and 49 CFR Part 19 

Application Content

The State agency applies directly to FTA for Sections 5310 and 5311 funding and must prepare/submit specific elements that constitute a grant application. These include a Program of Projects (POP), Project Budget, Milestones, Environmental Findings, Fleet Status and Certification to the Department of Labor (DOL)(5311 ONLY). Each element is explained below.

• Program of Projects (POP): The State provides an annual POP to FTA that identifies all subrecipients and indicates whether they are private, non-profit, public, or an Indian tribal agency. The POP also includes a brief description of each project including the counties in which transit service is provided, and the total and Federal cost for each subrecipient's project. Finally, the POP shows funds used for planning, technical assistance, and administration.
  
  FTA allows State agencies to submit grant applications that include subrecipientsat various stages of compliance with applicable Federal requirements. Projects in the grant application that have met all Federal applicable requirements are approved unconditionally as Category A projects. Projects that have not met all requirements are approved in Category B and funds cannot be disbursed for these activities until requirements are met. Category C consists of funds for projects/activities that have not yet been determined by the State. The State agency must notify FTA when projects move from Categories B and C into Category A. No funds should remain in Category C after the period of availability.

  The POP is prepared by the State agency as a compilation of subrecipients' projects and is not required of subrecipients.

• Project Budget: The Project Budget includes activity lines for capital items, operating assistance, project administration, State administration, intercity bus projects and RTAP activities. A State combines the various subrecipients' projects listed in the POP into standard activity line items. The activity line should include Federal and total costs, quantities of revenue rolling stock and a brief description of the activity. For example, all operating assistance funds requested by the various subrecipients listed in the POP would be tallied in one operating assistance activity line item.

• Milestones: These indicate significant project events and estimated completion dates for each activity line item.

• Environmental Findings: FTA's environmental impact regulation requires different levels of analysis and documentation according to the type of project.

  Most Section 5310 and 5311 projects are "categorically excluded" from the requirement to prepare an environmental document.

• Fleet Status: If acquiring revenue rolling stock the State must provide a statement that they are following the guidelines outlined in their SMP.

  Subrecipients will need to provide to the State agency the type, mileage or age of the vehicle that is being replaced.

• Certification to the Department of Labor (DOL): DOL certification protects the interests of employees that may be affected by FTA funded projects. The State certifies that each subrecipient has agreed to the special warranty of employee protective arrangements. This warranty letter is sent directly to the DOL, and a copy provided to FTA. DOL certification is not required of the 5310 program.

  It is the subrecipients' responsibility to provide written acceptance of the terms and conditions of the Warranty to the State agency.