Urbanized Area Formula Program (Section 5307)

URBANIZED AREA FORMULA PROGRAM (49 U.S.C. § 5307)

Section 5307 is a formula grant program for urbanized areas providing capital, operating, and planning assistance for mass transportation. This program was initiated by the Surface Transportation Act of 1982 and became FTA's primary transit assistance program in FY 1984. Funds are apportioned to urbanized areas utilizing a formula based on population, population density, and other factors associated with transit service and ridership. Section 5307 is funded from both General Revenues and Trust Funds.

Section 5307 urbanized area formula funds are available for transit improvements for 34 urbanized areas over 1 million population, 91 urbanized areas with populations between 200,000 and 1 million, and 283 urbanized areas between 50,000 and 200,000 population. For urbanized areas over 200,000 in population, funds flow directly to the designated recipient. For areas under 200,000, the funds are apportioned to the Governor of each state for distribution.

Several changes became effective to this program in fiscal year 1998 with the passage of TEA-21. One percent of appropriated Section 5307 funds is set-aside to be used for transit enhancement projects that physically or functionally enhance transit service or use. Preventive maintenance, defined as all maintenance costs, became eligible for FTA capital assistance at an 80 percent Federal share. FY 2001 operating assistance is available only to urbanized areas with populations under 200,000. An exception is made for urbanized areas over 200,000 population if the number of total bus revenue vehicle miles operated is under 900,000 and the number of buses operated does not exceed 15. Up to 10% of an area's apportionment may be used for complementary ADA paratransit service cost.

The Alaska Railroad received a special appropriation of Section 5307 funds amounting to $4.8 million (including oversight) in FY 2001 for improvements to its passenger operations. During this fiscal year, $12.8 million of funds (including carryover) was obligated.

In FY 2001, a total of $4.1 billion of Section 5307 funds was obligated, about $300 million (7%) less than the total obligated in FY 2000. Of this amount, $3.8 billion or 92 percent was used for capital; $276.6 million or 7 percent for operating; and $51.8 million or 1 percent for planning assistance. Funds were obligated to 437 FTA grantees. As a group, the urbanized areas with population over 1 million obligated the largest share of the funds, $3.1 billion or 75 percent. The total number of vehicles approved was 4,327. Bus rehabilitation totaled $26.5 million.

As in previous years, flexible funds transferred from FHWA had a significant impact on the availability of funds for obligation. In FY 2001, a total of $1.1 billion was transferred to the urbanized area formula program. The total flexible funds obligated for this program were $1.3 billion, some of which was carryover of funds transferred in prior years. Of the total obligations for capital (planning included), about 33 percent represents flexible funds. The program sources of these obligations are: Congestion Mitigation and Air Quality (CMAQ), $656.0 million (52 percent); and Surface Transportation Program (STP), $558.7 million (44 percent) and FHWA earmarks $45.6 million (4 percent).