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Formula Grant Programs comprise the largest assistance program administered by FTA, totaling $3.0 billion in FY 2000. The programs provide assistance to local governments and transit operators for both operating and capital expenditures. The three formula programs are authorized in Sections 5307, 5310, and 5311 of 49 U.S.C., which can be briefly summarized as follows:
2.1 Nonurbanized Area Formula Program (Section 5311)
The Nonurbanized Area Formula Program allocates funding to states to be used to support the operations and capital needs of transit operators serving residents outside of urbanized areas. The formula allocates funds to states based solely on their nonurbanized area population, using Census data. The Section 5311 program receives 6.37 percent of the funds available for formula programs.
2.2 Elderly and Persons with Disabilities Formula Program (Section 5310)
The Elderly and Persons with Disabilities Formula Program allocates funding to states to be used to provide capital assistance (including purchase of service arrangements) to providers of specialized transit services for the elderly and disabled. The funds are allocated based on each state's population of elderly persons and persons with disabilities. The Section 5310 program receives 2.4 percent of the funds available for formula programs. 2.3 Urbanized Area Formula Program (Section 5307)
The vast majority of funding for the formula programs, 91.23 percent, is dedicated for use in urbanized areas. The Urbanized Area Formula Grants Program, Section 5307 of Title 49 of the United States Code, allocates funds to urbanized areas for capital and planning costs associated with mass transit. Operating assistance is also available for urbanized areas under 200,000 in population. The actual apportionment formula for the program is found in 49 U.S.C. 5336. The formula allocates section 5307 funds through a series of hierarchical tiers. The first division establishes two separate tiers of urbanized areas:
9.32% is allocated to small urbanized areas (population 50,000 to 199,999)
90.68% is allocated to large urbanized areas (population 200,000 and above).
For small urbanized areas, the formula apportionments are based solely on two factors:
population
population times population density
For large urbanized areas, however, the formula is applied through multiple tiers:
The Fixed Guideway Tiers (33.29%)
Fixed Guideway Incentive Tier (4.39%). Allocated based on:
fixed guideway passenger miles weighted by passenger-miles per dollar of operating cost
Fixed Guideway Non-incentive Tier (95.61%). Allocated based on:
fixed guideway route miles
fixed guideway vehicle revenue miles
The Bus Tiers (66.71%).
Bus Incentive Tier (9.2%). Allocated based on:
bus passenger miles weighted by passenger-miles per dollar of operating cost
Bus Non-incentive Tier (90.8). This portion of the bus tier is segmented between urbanized areas above and below 1 million in population. Allocated based on:
population
population times population density
bus vehicle revenue miles
In sum, funding is allocated to urbanized areas under 200,000 solely on the basis of population and population density, while funding for areas over 200,000 includes factors related to the level of transit service provided.
There are two other important distinctions between small and large urbanized areas in the formula program. The first lies in the method of apportioning funds to the urbanized areas. In large urbanized areas, formula funds are apportioned directly to the urbanized area, through a designated recipient agency within the urbanized area. In small urbanized areas that are not in a transportation management area, however, formula funds attributable to the area are apportioned to the governor, who acts as the designated recipient for all of the small urbanized areas within the state. The governor may allocate these funds without FTA input or involvement. The second distinction between large and small urbanized areas is that formula funds for small urbanized areas may be used for operating costs, while this option is no longer available to larger urbanized areas since the passage of TEA-21.
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