SECTION 31.31. Section 5310 Grant Program

(a) Purpose. Title 49 U.S.C. §5310 authorizes the Secretary of the U.S. DOT to make grants for the provision of transportation services meeting the special needs of seniors and individuals with disabilities. The governor has designated the department to administer the §5310 program.

(b) Goal and objectives. The department's goal in administering the §5310 program is to promote the availability of cost-effective, efficient, and coordinated passenger transportation services planned, designed, and carried out to meet the special needs of seniors and individuals with disabilities when public transportation is insufficient, inappropriate, or unavailable, using the most efficient combination of financial and other resources. To achieve this goal, the department's objectives are to:

(1) promote the development and maintenance of a network of transportation services for seniors and individuals with disabilities throughout the state, in partnership with local stakeholders;

(2) fully integrate the §5310 program with other federal, state, and local resources and programs that are designed to serve similar populations;

(3) promote public transportation projects that exceed the requirements of the Americans with Disabilities Act (ADA);

(4) promote public transportation projects that decrease the reliance of individuals with disabilities on ADA complementary paratransit services;

(5) promote and encourage local participation, especially by seniors and individuals with disabilities or their advocates, in decision-making;

(6) improve the efficiency, effectiveness, and safety of §5310 transit systems through the provision of technical assistance; and

(7) include private sector operators in the overall plan to provide transportation services for seniors and individuals with disabilities.

(c) Department role.

(1) The department acts as the designated recipient for all §5310 funds appropriated to:

(A) a rural area;

(B) an urbanized area with less than 200,000 population; and

(C) an urbanized area with a population of 200,000 or more, on request of the metropolitan planning organization of the urbanized area and concurrence by the commission.

(2) The department recognizes the subrecipients as partners who shall retain control of daily operations. As the administering agency, the department will:

(A) develop application materials and disseminate information to prospective applicants and other interested parties;

(B) develop evaluation criteria and select projects for funding, with input from local entities and local individuals, in accordance with the standards set forth in subsection (i) of this section;

(C) prepare the state's annual program of projects and funding application and submit that material to the FTA for approval;

(D) negotiate and execute contracts with local §5310 recipients;

(E) prepare requests for federal reimbursement and process payment requests from §5310 recipients;

(F) monitor and evaluate the progress of ongoing transportation operations, including compliance with federal regulations and coordination of services; and

(G) provide technical assistance to §5310 recipients to aid them in improving and coordinating transit services.

(3) Failure to expend funds in a timely manner may cause the department to terminate the grant and re-award the unobligated balance to another project.

(d) Eligible recipients.

(1) Existing rural transit districts and urban transit districts serving a population of less than 200,000, local public entities, private non-profit organizations, state and local government authorities that coordinate services for seniors and individuals with disabilities, or private taxi companies that provide shared-ride taxi service to the public or to special categories of users (such as seniors or individuals with disabilities) are eligible recipients of funds.

(2) For an area included in a rural or urban transit district's service area for which the existing transit district is not willing or able to provide the transportation, the director may choose a local public entity or a private organization as a recipient to receive §5310 funds. Private taxi companies that provide shared-ride taxi service to the public or to special categories of users (such as seniors or individuals with disabilities) on a regular basis are also eligible recipients. Any recipient that is not a transit district shall coordinate §5310 service with the existing transit district to ensure service is complementary to and not competitive with existing services.

(3) If the department is the designated recipient for an urbanized area with 200,000 population or more, a recipient for that area will be selected from local transportation providers who are transit authorities or eligible alternate recipients under this program.

(e) Eligible assistance categories. The following categories of expenses are eligible for federal reimbursement under the §5310 program.

(1) State administrative expenses. The department may use up to 10 percent of the annual federal program apportionment to defray its expenses incurred for the administration of the §5310 program. State administrative expenses do not require a non-federal match.

(2) Capital expenses.

(A) With department concurrence, eligible items include:

(i) buses;

(ii) vans or other smaller accessible vehicles;

(iii) the acquisition of transportation services under a contract, lease, or other arrangement;

(iv) mobility management;

(v) curb cuts, sidewalks, pedestrian signals or other accessible features;

(vi) radios and communication equipment;

(vii) vehicle shelters;

(viii) lifts, ramps, and securement devices;

(ix) vehicle rehabilitation, remanufacture, or overhaul;

(x) computer hardware and software;

(xi) initial component installation costs;

(xii) vehicle procurement, testing, inspection, and acceptance costs;

(xiii) vehicle extended warranties that do not exceed industry standards;

(xiv) the lease of equipment, provided that the local recipient determines a lease is more cost effective than the purchase of equipment after considering management efficiency, availability of equipment, staffing capabilities, and guidelines on capital leases as contained in 49 C.F.R. Part 639;

(xv) transit-related intelligent transportation systems;

(xvi) the introduction of new technology, through innovative and improved products, into mass transportation; and

(xvii) the acquisition of preventive maintenance services and vehicle parts associated with preventive maintenance services.

(B) For reimbursement:

(i) federal funds may be used to defray up to 80 percent of the cost of eligible capital expenditures;

(ii) the federal share may increase to up to 85 percent of the net project cost for a project that involves acquiring vehicles for the purpose of complying with the Americans with Disabilities Act or the Clean Air Act; and

(iii) the federal share may increase to up to 90 percent for incremental costs related to compliance with the Clean Air Act in areas of air quality non-attainment or with the Americans with Disabilities Act.

(3) Operating expenses.

(A) Operating expenses are costs that are directly tied to systems operations, such as costs for fuel, oil, and replacement parts, and driver, mechanic, and dispatcher salaries.

(B) Operating expenses may be reimbursed at 50 percent of net operating expense.

(f) Local share requirements.

(1) Eligible sources to satisfy local share requirements may be derived from the following:

(A) an undistributed cash surplus, or a replacement or depreciation cash fund or reserve;

(B) a service agreement with a state or local social service or workforce agency, or a private social service organization;

(C) amounts appropriated or otherwise made available to a U.S. department or agency that are eligible to be expended for transportation;

(D) funds to carry out the federal lands highways program established by 23 U.S.C. §204;

(E) funds available under §403(a)(5)(C)(vii) of the Social Security Act (42 U.S.C. §603(a)(5)(C)(vii));

(F) in-kind contributions, volunteer services, and donations attributable to the project if the value is documented and previously approved by the department; or

(G) transportation development credits, with prior department approval.

(2) Funds from any other U.S.DOT program are not eligible for use as local matching funds.

(g) Funding distribution. After the state administrative expenses described in subsection (e)(1) of this section are set aside, funds will be allocated on a formula basis as provided by this subsection.

(1) For urbanized areas with a population less than 200,000, 25 percent of the available funds will be allocated equally, using department district boundaries of the districts that include such an area. To allocate the remaining 75 percent, the department will:

(A) calculate the population of seniors and individuals with disabilities in each of those urbanized areas using the latest census figures available from the United States Census Bureau; and

(B) divide each urbanized area's population of seniors and individuals with disabilities, as determined under subparagraph (A) of this paragraph, by the state's total population for urbanized areas with less than 200,000 population to determine that urbanized area's formula allocation.

(2) For rural areas, 25 percent of the available funds will be allocated equally, using department district boundaries of the districts that include such an area. To allocate the remaining 75 percent, the department will:

(A) calculate the population of seniors and individuals with disabilities in each department district using the latest census figures for counties available from the United States Census Bureau; and

(B) divide each department district's subtotal of the population of seniors and individuals with disabilities, as determined under subparagraph (A) of this paragraph, by the state total of that population in rural areas to determine the district's formula allocation.

(3) For urbanized areas with 200,000 population or more for which the department is the designated recipient, funds will be allocated to the respective urbanized area based on the federal apportionment as published in the Federal Register.

(4) Residual funds.

(A) Urbanized areas with populations of less than 200,000 and rural areas. On completion of the project selection procedures described in subsection (i) of this section, if any portion of the allocation described in paragraph (1) or (2) of this subsection is not needed, the commission or the executive director may distribute the balances, as appropriate, to satisfy unmet needs in other areas of the state. This action may require the department to transfer funds, at the state level, between urbanized and rural areas to fully obligate the state's apportionment.

(B) Urbanized areas with populations of 200,000 or more. On completion of the project selection procedures described in subsection (i) of this section, any unallocated funds for urbanized areas with populations of 200,000 or more will remain in that urbanized area until allocated at a future date.

(h) Application requirements. A prospective applicant must submit an application for §5310 grant funds at the time specified by the department. The application must document the need and demand for passenger transportation services for seniors and individuals with disabilities, and also must document inclusion of the project in the coordinated public transit-human service transportation plan.

(i) Project selection. To select projects, the department will consult with all local parties, including metropolitan planning organizations, and follow the procedures set out in this subsection.

(1) The department will establish public outreach processes involving local stakeholders. In an effort to streamline decision-making processes and maximize coordination opportunities, the department may choose to combine contiguous department district boundaries for stakeholder engagement, project selection, and public outreach. The stakeholder groups should include representatives of the following groups, further defined in FTA Circular 9070.1G, or its latest version:

(A) transportation partners;

(B) passengers and advocates;

(C) human service and work force agencies; and

(D) others, such as emergency management agencies.

(2) In recommending projects, the department will consider the program goals and objectives set forth in subsection (b) of this section and consider projects that:

(A) leverage existing resources and promote innovation;

(B) are the only public transportation option for the proposed service area;

(C) are sustainable over time;

(D) demonstrate efficient use of resources;

(E) involve partnerships that include organizations; or

(F) provide service continuity.

(3) At least 55 percent of the funds allocated by district boundaries or combination of district boundaries shall be used for capital expenses.

(4) Not more than 45 percent of the funds allocated by district boundaries or combination of district boundaries may be used for operating expenses. This cap applies to both urbanized areas and rural areas, respectively.

(5) The requirements of this subparagraph apply to all projects recommended for funding.

(A) There must be a demonstrated need for any capital purchases. Examples of items that may be used to demonstrate need include a needs assessment that documents the demand for new services, a vehicle inventory that establishes the need for replacement of older equipment, dispatcher logs that document requests for service that cannot be met with existing equipment, and purchase of service contracts that substantiate the need for additional vehicles.

(B) The proposed applicant must be able to demonstrate its financial and managerial capability to carry out the project. Examples of items that may be used to demonstrate the capability include audited financial statements and review letters from grantor agencies.

(C) Consideration should be given to the applicant's past efforts to coordinate services and related activities with other local entities. Examples showing those efforts include contracts that outline purchase of service agreements, shared maintenance or dispatching functions, and joint training initiatives.

(D) There should be evidence of local support for the proposal. Examples of that evidence include resolutions by local governing bodies and endorsement letters from other organizations or individuals.

(E) The project must be included in the coordinated public transit-human service transportation plan.

(6) Based on stakeholder input, department personnel assigned to cover district areas will rank projects in priority order.

(7) On receipt of the applications recommended for funding, the director, or the director's designee, will review all funding requests for completeness and compliance with all statutory and program administrative requirements. Following commission approval, the department will negotiate a contract with the selected local entities and organizations to implement the projects selected for funding.

(j) Vehicle leasing. Vehicles acquired under the §5310 program may be leased to other entities, such as local public entities or agencies, other private nonprofit agencies, or private for-profit operators. The lessee shall operate the vehicles on behalf of the §5310 recipient and provide the transportation services as described in the original grant application.

(k) Incidental vehicle use. A vehicle that is purchased with §5310 funds may be used for incidental uses that do not conflict with the primary use of the vehicle to provide transportation services for seniors and individuals with disabilities. Examples of permissible incidental uses are allowing riders who are neither senior nor an individual with a disability to occupy vacant seats, delivering meals, or using the vehicle for other public transportation activities when it is not required for seniors or individuals with disabilities project purposes. The vehicle shall not be altered in any way to accommodate incidental use.

(l) Private for-profit transportation business participation. Taxi companies that provide only exclusive-ride service are not eligible subrecipients; however, they may participate in the §5310 program as contractors. Exclusive-ride taxi companies may receive §5310 funds to purchase accessible taxis under contract with an eligible subrecipient.

Source Note: The provisions of this §31.31 adopted to be effective November 21, 2013, 38 TexReg 8253; amended to be effective December 6, 2017, 42 TexReg 6815