(a) Purpose. Section 5307, Federal Transit Act (49 U.S.C. §5307), authorizes the Secretary of the U.S. DOT to make capital and operating grants for public transportation projects in urbanized areas.     
      (b) Eligible recipients. Section 5307 funds for urbanized areas with populations of 200,000 or more are dispensed by the FTA directly to eligible recipients designated by the governor or the governor's designee. Section 5307 funds for urbanized areas with populations of less than 200,000 may be dispensed by the governor or may be dispensed by FTA directly to eligible recipients designated by the governor or the governor's designee.     
      (c) Allocation of funds. For the urbanized areas with populations of 200,000 or more, funds are apportioned to the urbanized area by the FTA. For the urbanized areas with populations of less than 200,000, funds are apportioned to the governor for allocation to those areas. This section governs the allocation of those funds if the governor delegates this responsibility to the commission or to the department.     
      (d) Department role. After notification from the FTA that the §5307 governor's apportionment funds are available, the department will notify the FTA of the amounts allocated to each recipient from the governor's apportionment and will notify the recipient of that amount.     
      (e) Funding distribution. The department will allocate §5307 funds in the following manner.      
        (1) Each recipient will receive the amount published in the                 Federal Register                under the §5307 formula apportionment, except as provided in paragraphs (2) - (4) of this subsection.       
        (2) Any deobligated funds still available to Texas from previous years will be distributed to recipients on a pro rata basis except for urbanized areas that are under 200,000 in population and that are located within the planning boundaries of a transportation management area (a metropolitan planning organization with over 200,000 population, as defined by the U.S. Census).       
        (3) Recipients must notify the department if allocated funds are not needed in a given year. These funds may be distributed to the remaining recipients on a pro rata basis or distributed at the department's discretion.       
        (4) The department may review grant balances from previous years and adjust individual awards as needed. Adjustments that increase the overall available apportionment will be distributed to all recipients on a pro rata basis. An adjustment under this paragraph and any resulting distribution do not apply to an urbanized area that is under 200,000 in population and that is located within the planning boundaries of a transportation management area.       
     Source Note:        The provisions of this §31.26 adopted to be effective August 14, 1989, 14 TexReg 3704; amended to effective July 20, 1992, 17 TexReg 4891; amended to be effective February 15, 2001, 26 TexReg 1365; amended to be effective April 17, 2003, 28 TexReg 3080; amended to be effective February 21, 2008, 33 TexReg 1380; amended to be effective November 21, 2013, 38 TexReg 8253