Part 1.
TEXAS DEPARTMENT OF TRANSPORTATION
Chapter 31.
PUBLIC TRANSPORTATION
The Texas Department of Transportation (department) proposes amendments
to §31.11, concerning state formula program and §31.36, concerning
the Section 5311 grant program for public transportation.
EXPLANATION OF PROPOSED AMENDMENTS
Transportation Code, §456.022 authorized the Texas Transportation
Commission (commission) to adopt rules to establish a formula that may take
into account a transportation provider's performance, the number of its riders,
the need of residents in its service area for public transportation, population,
population density, land area, and other factors established by the commission.
On June 24, 2004, the commission amended §31.11 and §31.36 to
establish formulas for the distribution of state and federal funds. The commission
now desires to further define the formulas to better allocate funding resources.
The Public Transportation Advisory Committee (PTAC) met several times to
discuss the changes to the existing formulas and rules. PTAC provides a forum
for the exchange of information between the department, the commission, and
committee members.
Four PTAC committee members represent a diverse cross-section of public
transportation providers; three members represent a diverse cross-section
of public transportation users; and two members represent the general public.
Advice and recommendations expressed by the committee provide the department
and the commission with a broader perspective regarding public transportation
matters that will be considered in formulating department policies.
PTAC's duties include advising the commission on the needs and problems
of the state's public transportation providers, including recommending methods
for allocating state public transportation funds, and commenting on proposed
rules or rule changes involving public transportation matters during their
development and prior to final adoption. PTAC recommended that state funds
be allocated between urban and non-urbanized areas with 35% of the funding
allocated to the urban areas of the state and 65% of the funding allocated
to the non-urbanized areas of the state. PTAC also recommended that any further
distribution of state funds allocated to urban areas be based on population
not to exceed 199,999, in both the 80%, which is allocated based on population,
and the 20%, which is allocated based on system performance. In addition,
PTAC recommended new state funds performance criteria for the urban areas
to be based on local funds per operating expense, operating expense per mile
(inverted), and ridership per capita. PTAC recommended for the urban areas
that the state funds performance criterion of operating expenses per mile
(inverted) be calculated comparing a transit agency against its previous performance.
PTAC further recommended state funds performance criteria for the urban areas
that local funds per operating expense and ridership per capita be compared
system to system.
The rules presented include recommendations from PTAC as outlined above
and also include the following changes to the state formula for urban areas
and federal funds for Section 5311, non-urbanzied areas: (1) Provisions of
the phase-in process are revised to use fiscal year 2004 as the base year
when calculating allocations for the next allocation of funds, after which,
succeeding allocations will be based on previous fiscal years; and (2) The
limitation of the growth cap will be removed allowing systems to grow to their
full formula allocation, subject to available funding, and should available
funding exceed the full formula allocations, additional funding will be allocated
to all systems on a pro rata basis with these additional awards not subject
to the transition funding allocation process in succeeding fiscal years.
On March 15, 2005, PTAC met and, by unanimous vote of the members present,
waived preliminary review and comment of the proposed rules until after the
public comment period is initiated.
The amendments to §31.11, Formula Program, provide changes to the
current formula. The funds will be allocated between small urban and non-urbanized
areas with 35% of the funding allocated to the urban areas of the state and
65% of the funding allocated to the non-urbanized areas of the state. This
percentage funding split more closely parallels historical distribution between
urban and non-urbanized areas.
Urban areas that have populations of 200,000 or greater will be adjusted
on a pro rata basis to reflect a population level of 199,999 for both the
80%, which is allocated based on population, and the 20%, which is allocated
based on system performance. This adjustment of population more closely aligns
systems with the population levels used at the federal level, which separate
smaller urban systems from larger urban systems, and also more closely aligns
with the population levels used in the definition of urban transit district
defined in Transportation Code, Chapter 458.
Performance criteria for the urban areas are changed to local funds per
operating expense, operating expense per mile (inverted), and ridership per
capita. Operating expenses per mile (inverted) will be calculated comparing
a transit agency against its previous performance. Local funds per operating
expense and ridership per capita will be compared system to system. These
revised performance criteria reflect standards that provide a more meaningful
and accurate measurement and comparison.
The five-year phase-in process that went into effect in FY 2005 will continue
for the next four fiscal year allocations. However, the provisions of the
phase-in process are revised to use fiscal year 2004 as the base year when
calculating allocations for the next allocation of funds, after which, succeeding
allocations will be based on previous fiscal years. This will allow an entity
time to plan before it will be affected by a significant change in funding.
In addition, the limitation of 20% growth will be removed allowing systems
to grow to their full formula allocation, subject to available funding. Should
available funding exceed the full formula allocations, additional funding
will be awarded by the commission on a pro rata basis, competitively, or a
combination of both. Consideration for the award of these additional funds
may include, but is not limited to, coordination and technical support activities,
compensation for unforeseen funding anomalies, assistance with eliminating
waste and ensuring efficiency, maximum coverage in the provision of public
transportation services, and reductions in air pollution. These additional
awards will allow the commission to address state priorities. These awards
are not subject to the transition funding allocation process in succeeding
fiscal years.
The amendments to §31.36, Section 5311 Grant Program, provide changes
to the current formula. The five-year phase-in process that went into effect
in FY 2005 will continue for the next four fiscal year allocations. However,
the provisions of the phase-in process are revised to use fiscal year 2004
as the base year when calculating allocations for the next allocation of funds,
after which, succeeding allocations will be based on previous fiscal years.
This will continue to guarantee that an entity will have time to plan before
it will be affected by a significant reduction. In addition, the limitation
of 20% growth will be removed allowing systems to grow to their full formula
allocation, subject to available funding. Should available funding exceed
the full formula allocations, additional funding will be awarded by the commission
on a pro rata basis, competitively, or a combination of both. Consideration
for the award of these additional funds may include, but is not limited to,
coordination and technical support activities, compensation for unforeseen
funding anomalies, assistance with eliminating waste and ensuring efficiency,
maximum coverage in the provision of public transportation services, and reductions
in air pollution. These additional awards will allow the commission to address
state priorities. These awards are not subject to the transition funding allocation
process in succeeding fiscal years.
FISCAL NOTE
James Bass, Director, Finance Division, has determined that for each of
the first five years the amendments as proposed are in effect, there will
be fiscal implications for state or local governments as a result of enforcing
or administering the amendments. There will be anticipated economic costs
for transit agencies required to comply with the sections as proposed due
to some entities receiving a reduction in funds.
For urban systems that receive state funds, the maximum reduction for the
first four fiscal years is 10% per fiscal year, and for the fifth year, the
maximum reduction for urban systems is 11.41%. For the urban systems that
receive state funds, the maximum growth for the first five years is 36.51%,
38.42%, 121.63%, 35.75%, and 12.44% respectively.
For non-urbanized systems that receive state funds, the maximum reduction
for the first four fiscal years is 10% per fiscal year, and for the fifth
year, the maximum reduction for non-urbanized systems is 41.00%. For the non-urbanized
systems that receive state funds, the maximum growth for the first five years
is 24.73%, 18.09%, 15.54%, 12.59%, and 101.57% respectively.
For non-urbanized systems that receive federal funds, the maximum reduction
for the first four fiscal years is 10% per fiscal year, and for the fifth
year, the maximum reduction for non-urbanized systems is 39.22%. For the non-urbanized
systems that receive federal funds, the maximum growth for the first five
years is 33.73%, 19.70%, 12.86%, 18.09%, and 86.51% respectively.
Since the future performance of individual transit systems cannot be predicted,
the basis of calculation was held constant. Individual systems performing
at a level better than their current level may realize a higher percentage
funding level. Funding levels were applied based on the department's request
for legislative appropriation and the fiscal year 2005 federal apportionment.
However, future appropriations and apportionments cannot be predicted. Therefore,
commission awards also cannot be predicted should additional funding be available.
Susan N. Bryant, Director, Public Transportation Division, has certified
that there will be no significant impact on local economies or overall employment
as a result of enforcing or administering the amendments.
PUBLIC BENEFIT
Ms. Bryant has also determined that for each year of the first five years
the sections are in effect, the public benefit anticipated as a result of
enforcing or administering the amendments will be a fair and equitable distribution
of public transportation funds that will encourage transportation providers
to be efficient and economical. There will be no adverse economic effect on
small businesses.
PUBLIC HEARINGS
Pursuant to the Administrative Procedure Act, Government Code, Chapter
2001, the Texas Department of Transportation will conduct three public hearings
to receive comments concerning the proposed rules. Public hearings will be
held at: 4:00 p.m. on April 25, 2005, at the Texas Department of Transportation
Corpus Christi District office, 1701 South Padre Island Dr., Room A; 4:00
p.m. on May 4, 2005, in the first floor hearing room of the Dewitt C. Greer
State Highway Building, 125 East 11th Street, Austin, Texas; and 4:00 p.m.
on May 9, 2005, at the Texas Department of Transportation Dallas District
office, 4777 E. Hwy 80, Dallas Room. These hearings will be conducted in accordance
with the procedures specified in 43 Texas Administrative Code §1.5. Those
desiring to make comments or presentations may register a half hour before
the scheduled hearing time. Any interested persons may appear and offer comments,
either orally or in writing; however, questioning of those making presentations
will be reserved exclusively to the presiding officer as may be necessary
to ensure a complete record. While any person with pertinent comments will
be granted an opportunity to present them during the course of the hearing,
the presiding officer reserves the right to restrict testimony in terms of
time and repetitive content. Organizations, associations, or groups are encouraged
to present their commonly held views and identical or similar comments through
a representative member when possible. Comments on the proposed text should
include appropriate citations to sections, subsections, paragraphs, etc. for
proper reference. Any suggestions or requests for alternative language or
other revisions to the proposed text should be submitted in written form.
Presentations must remain pertinent to the issues being discussed. A person
may not assign a portion of his or her time to another speaker. Persons with
disabilities who plan to attend this meeting and who may need auxiliary aids
or services such as interpreters for persons who are deaf or hearing impaired,
readers, large print or Braille, are requested to contact Randall Dillard,
Director, Public Information Office, 125 East 11th Street, Austin, Texas 78701-2483,
512/463-8588 at least two working days prior to the hearing so that appropriate
services can be provided.
SUBMITTAL OF COMMENTS
Written comments on the proposed amendments may be submitted to Bobby Killebrew,
Deputy Director, Public Transportation Division, 125 East 11th Street, Austin,
Texas 78701-2483. The deadline for receipt of comments is 5:00 p.m. on May
16, 2005.
Subchapter B. STATE PROGRAMS