(a) Purpose. Section 5311, Federal Transit Act (49 U.S.C. §5311), authorizes the Secretary of the U.S. DOT to make grants for public transportation projects in rural areas. The department has been designated by the governor to administer the §5311 program.
(b) Goal and objectives. The department's goal in administering the §5311 program is to promote the availability of cost-effective, efficient, and coordinated passenger transportation services to the general public in rural areas using the most efficient combination of financial and other resources. To achieve this goal, the objectives of the department are to:
  (1) promote the development and maintenance of a network of general public transportation services, including intercity services, in rural areas throughout the state, in partnership with local officials;
  (2) fully integrate the §5311 program with other federal, state, and local resources that are designed to serve rural populations;
  (3) improve the efficiency, effectiveness, and safety of §5311 systems through the provision of technical assistance;
  (4) include private sector operators in the overall plan to provide public transportation services; and
  (5) minimize negative impacts from changes in public transportation district boundaries.
(c) Department role. The department acts as the designated recipient for all §5311 funds apportioned to the state and has an oversight responsibility for all rural transit services within the state. The department, however, recognizes the subrecipients as partners who shall retain control of daily operations. As the administering agency, the department will:
  (1) develop application materials and disseminate information to prospective applicants and other interested parties;
  (2) allocate the available program funds in a fair and equitable manner as described in subsection (f) of this section (the department will not provide §5311 funds to more than one transit system in a geographical area);
  (3) develop evaluation criteria and select projects for funding;
  (4) prepare the state's annual program of projects and funding application and submit that material to the FTA for approval;
  (5) negotiate and execute contracts with local §5311 subrecipients;
  (6) prepare requests for federal reimbursement, and process payment requests from §5311 subrecipients;
  (7) monitor and evaluate the progress of ongoing transportation operations, including compliance with federal regulations; and
  (8) provide technical assistance to §5311 subrecipients to aid them in improving transit services.
(d) Eligible subrecipients. State agencies, local public entities, private nonprofit organizations, Native American tribes and organizations, and operators of public transportation services are eligible to receive §5311 funds through the department. Private for-profit operators of public transportation services may participate in the program through contracts with eligible subrecipients. An entity must be a rural transit district to receive §5311 funds except that private for-profit operators of public transportation services and entities that are not rural transit districts are eligible to receive §5311 funds through the department under the intercity bus program, as set forth in subsections (f)(2) and (h) of this section.
(e) Eligible expenses. The department will follow FTA Circular 9040.1G, or its latest version, to determine eligible §5311 program expenses.
(f) Allocation of funds. As part of its administration of the §5311 program, the department is charged with ensuring that there is a fair and equitable distribution of funds within the state (FTA Circular 9040.1G or its latest version). After receipt of annual §5311 program apportionment totals, the department will allocate §5311 funds in the following manner and order.
  (1) State Administration. The department will use not more than 10 percent of the annual federal apportionment to defray its expenses incurred for the administration of the §5311 program.
  (2) Intercity bus allocation. Unless the chief executive officer of the state or the executive officer's authorized designee certifies to the Secretary of the U.S. DOT that the intercity bus service needs of the state are being adequately met, the department will allocate not less than 15 percent of the annual §5311 federal apportionment for the development and support of intercity bus transportation facilities and services providing access and connections to rural areas. If it is determined that all or a portion of the set-aside monies is not required for intercity bus service, those funds will be applied to the formula apportionment process described in paragraph (4) of this subsection. Procedures for determining if a certification of adequacy is warranted are as follows.
    (A) The department will review all data on intercity bus service availability, including outstanding requests from intercity operators and rural transit districts, and levels of service.
    (B) The department will consult with affected intercity bus service providers and rural transit districts.
    (C) Based on the findings of subparagraphs (A) and (B) of this paragraph, the commission, the governor or the governor's authorized designee may certify to the adequacy of intercity bus service.
  (3) Discretionary allocation. After the allocation of funds under paragraphs (1) and (2) of this subsection, up to 10 percent of the remaining funds will be available to the commission for award at any time during the fiscal year on a pro rata basis, competitively, a combination of both pro rata basis and competitively, or as a one-time award. Funds may be used to address rural transit district service and capital development needs, changes in transit district boundaries, unforeseen funding anomalies, emergency services response and recovery needs, changes in economic conditions or availability of assets significantly impacting current year operational expenses, or other needs as determined by the commission.
  (4) Rural Transit District Total Allocation. Excluding the amounts allocated under paragraphs (1), (2), and (3) of this subsection, the commission will allocate to rural transit districts in accordance with this paragraph the balance of the annual §5311 federal apportionment and any program funds that were available for award in the previous fiscal year under paragraph (3) of this subsection but not awarded.
    (A) Subrecipients will receive a baseline allocation. The amount of a subrecipient's baseline allocation is the amount of §5311 funds that the subrecipient received for federal Fiscal Year 2021 and will not be reduced by the performance adjustment under paragraph (5) of this subsection.
    (B) Each rural transit district will receive a subrecipient growth allocation amount based on proportional share using the following criteria:
      (i) population of the district - 50 percent;
      (ii) land area of the district - 25 percent;
      (iii) total vehicle miles in the district - 15 percent; and
      (iv) number of low-income individuals residing in the district - 10 percent.
    (C) For the purposes of subparagraph (B)(i) of this paragraph, population is determined using the most recent federal decennial census except that beginning September 1, 2027, the director may choose to use population information from the Texas Demographic Center for periods between the publication of federal decennial census information.
  (5) Performance Adjustment. The total allocation computed for a rural transit district under paragraph (4) of this subsection is subject to adjustment for performance in accordance with this paragraph, except as provided by subparagraph (A) of that paragraph.
    (A) The performance measures used for performance adjustments under this paragraph are:
      (i) the rural transit district's ridership increasing by two percent or more; and
      (ii) the district's operating costs per total vehicle hours not exceeding the annual average of those costs for the district, plus one standard deviation, computed over a 10-year period but excluding any year in which a federal major disaster declaration was applicable to the district.
    (B) For each performance measure not achieved, a rural transit district's total allocation will be reduced by five percent.
    (C) A rural transit district that achieves both performance measures will receive an additional allocation amount computed by dividing the total amount of reductions for all under subparagraph (B) of this paragraph by the total number of rural transit districts that achieve both performance measures.
Cont'd...