CHAPTER 456. STATE FINANCING OF PUBLIC TRANSPORTATION

TRANSPORTATION CODE

TITLE 6. ROADWAYS

SUBTITLE K. MASS TRANSPORTATION

CHAPTER 456. STATE FINANCING OF PUBLIC TRANSPORTATION

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 456.001. DEFINITIONS. In this chapter:

(1) "Capital improvement" means the acquisition, construction,

or improvement of a facility, equipment, or real property for use

in public transportation service. The term includes designing,

engineering, supervising, inspecting, surveying, mapping,

relocation, right-of-way acquisition, housing replacement, and

other expenses incidental to the acquisition, construction, or

improvement.

(2) "Designated recipient" means an entity that receives money

from the United States or this state for public transportation

through the department or the Federal Transit Administration or

the administration's successor and is a transit authority, a

municipality not included in a transit authority, a local

governmental body, another political subdivision of this state,

or a nonprofit entity providing rural public transportation

service.

(3) "Federal-Aid Highway Act" means the Federal-Aid Highway Act

of 1973 (49 U.S.C. Section 1602a).

(4) "Federal Transit Act" means the Federal Transit Act (49

U.S.C. Section 5301 et seq.) and includes the Urban Mass

Transportation Act of 1964.

(5) "Federally financed project" means a public transportation

project that is partially financed under a program of the United

States for financing public transportation.

(6) "Local share requirement" means the amount of money required

of and available to a public transportation provider in this

state to match the amount available from the United States for a

federally financed project.

(7) "Operating expense" means an expense, including an

administrative expense, incurred in the daily operation of a

public transportation system.

(8) "Public transportation" means transportation of passengers

and their hand-carried packages or baggage on a regular or

continuing basis by means of surface or water, including fixed

guideway or underground transportation or transit, other than

aircraft, taxicab, ambulance, or emergency vehicle.

(9) "Ride-sharing activity" means transportation provided by a

vehicle equipped with rubber tires that carries 10 to 15

passengers.

(10) "State-financed project" means a project for which this

state provides partial financing under this chapter.

(11) "Transit authority" means a municipality or a metropolitan

or regional authority in an urbanized area of over 200,000

population with a local transit tax.

(12) "Urbanized area" means an area with a population of more

than 50,000 so designated by the United States Bureau of the

Census.

(13) "Nonurbanized area" means an area outside the boundaries of

an urbanized area and so designated by the United States Bureau

of the Census.

(14) "Local funds" include:

(A) passenger revenues, notwithstanding any statutory

requirement to apply that money to offset operating deficits;

(B) money from the purchase of service agreements, contract

income, advertising revenue, local tax receipts, and private

donations;

(C) money provided by a political subdivision of this state; and

(D) in-kind contributions.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.33(b), eff.

Sept. 1, 1997; Acts 1997, 75th Leg., ch. 588, Sec. 1, eff. June

2, 1997.

Sec. 456.002. ADMINISTRATION AND PURPOSE. (a) The commission

shall administer the formula and discretionary programs provided

by this chapter.

(b) Each public transportation program provided by this chapter,

except the passenger rail service assistance program under

Subchapter D, is a grant program for public transportation

projects. Approval by the United States of a proposed public

transportation project means that the project is consistent with

the purposes of this chapter and with the continuing,

cooperative, and comprehensive regional transportation planning

implemented in accordance with the Federal Transit Act and the

Federal-Aid Highway Act.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1997, 75th Leg., ch. 110, Sec. 1, eff. May 16,

1997; Acts 1997, 75th Leg., ch. 165, Sec. 30.34(b), eff. Sept. 1,

1997.

Sec. 456.003. PARTICIPATION INELIGIBILITY. A transit authority

is ineligible to participate in the formula or discretionary

program provided by this chapter unless the authority was created

under Chapter 453 or former Article 1118z, Revised Statutes, by a

municipality having a population of less than 200,000.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 456.004. GENERAL FINANCING APPLICATION REQUIREMENTS. An

application for project financing under this chapter must be

certified and contain a statement by the applicant that the

proposed public transportation project is consistent with the

continuing, cooperative, and comprehensive regional

transportation planning implemented in accordance with the

Federal Transit Act and the Federal-Aid Highway Act.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.34(c), eff.

Sept. 1, 1997.

Sec. 456.005. EVALUATION OF PROJECT. In evaluating a project

under the formula or discretionary program, the commission shall

consider the need for fast, safe, efficient, and economical

public transportation and the approval of the Federal Transit

Administration, or its successor.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 456.006. USE OF FINANCING. (a) A designated recipient

that is a rural or urban transit district or municipal transit

department may use money from the formula or discretionary

program and any local funds for any transit-related activity.

(b) A designated recipient not included in a transit authority

but located in an urbanized area that includes one or more

transit authorities and that received state transit funding

during the biennium ending August 31, 1997, may receive money

from the formula or discretionary program in an amount that does

not exceed the amount of funds expended during that biennium to

provide:

(1) 65 percent of the local share requirement for a federally

financed capital improvement project;

(2) 50 percent of the local share requirement for a federally

financed project for operating expenses;

(3) 65 percent of the local share requirement for federally

financed planning activities; and

(4) 50 percent of the total cost of a public transportation

capital improvement project, if the designated recipient

certifies that money from the United States is unavailable for

the project and the commission determines that the project is

vitally important to the development of public transportation in

this state.

(c) In this section, "rural transit district" and "urban transit

district" have the meanings assigned by Section 1, Chapter 645,

Acts of the 74th Legislature, Regular Session, 1995 (Article

6663c-1, Vernon's Texas Civil Statutes).

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.34(d), eff.

Sept. 1, 1997; Acts 1997, 75th Leg., ch. 588, Sec. 2, eff. June

2, 1997.

Sec. 456.007. PUBLIC TRANSPORTATION ACCOUNT FUND; APPROPRIATIONS

AND GRANTS. (a) The public transportation account fund is an

account in the general revenue fund. A grant of money to the

state for public transportation purposes from a public or private

source shall be deposited to the credit of the public

transportation account fund. Money in the public transportation

account fund may be used only by the department to carry out the

responsibilities of the commission and the department for public

transportation under this chapter.

(b) The legislature may appropriate money for public

transportation purposes from the portion of the state highway

fund that is not dedicated by the constitution.

(c) A federal grant of transit money to the state for public

transportation purposes shall be deposited in the treasury to the

credit of the state highway fund. Federal transit grants for

public transportation purposes may be used only by the department

to carry out the responsibilities of the commission and the

department for public transportation under this chapter.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.34(e), eff.

Sept. 1, 1997; Acts 1997, 75th Leg., ch. 588, Sec. 3, eff. June

2, 1997.

Sec. 456.008. COMMISSION REPORT ON PUBLIC TRANSPORTATION

PROVIDERS. (a) The commission by rule shall prepare and issue a

report on the performance of public transportation providers in

this state that received state or federal funding during the

previous 12-month period. The commission shall issue a report

under this section at least once each state fiscal year.

(b) The commission shall establish a performance-based reporting

system for all public transportation providers. The commission

may establish different performance measures for different

sectors of the transit industry. The performance measures shall

assess the efficiency, effectiveness, and safety of the public

transportation providers.

(c) The commission shall submit copies of each report issued

under this section to the budget and planning division of the

governor's office and the Legislative Budget Board not later than

November 1 of the year following the period covered in the

report.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1999, 76th Leg., ch. 873, Sec. 1, eff. Sept. 1,

1999.

SUBCHAPTER B. FORMULA PROGRAM

Sec. 456.021. BIENNIAL ALLOCATION. (a) The commission shall

allocate to urban, urbanized, and rural areas under the formula

program provided by this subchapter the amount appropriated from

all sources to the commission each state fiscal biennium for

public transportation, other than money from the United States

and amounts specifically appropriated for coordination, technical

support, or other administrative costs.

(b) The commission shall make the allocation at the beginning of

each state fiscal biennium.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 456.022. FORMULA ALLOCATION. The commission shall adopt

rules establishing a formula allocating funds among individual

eligible public transportation providers. The formula 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.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.34(f), eff.

Sept. 1, 1997; Acts 1997, 75th Leg., ch. 588, Sec. 4, eff. June

2, 1997; Acts 2003, 78th Leg., ch. 312, Sec. 79(a), eff. Sept. 1,

2004.

Sec. 456.023. APPLICATION; USE OF MONEY NOT APPLIED FOR. (a) A

designated recipient may submit an application to the commission

for financing of a project under the formula program.

(b) The commission shall administer under the discretionary

program provided by Subchapter C any money that a designated

recipient under the formula program has not applied for before

the November commission meeting in the second year of a biennium.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 456.026. REPORTING BY DESIGNATED RECIPIENTS. The

commission by rule shall establish a performance-based reporting

system for all designated recipients eligible for financing under

the formula program.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

SUBCHAPTER C. DISCRETIONARY PROGRAM

Sec. 456.041. PROJECT FINANCING APPLICATION BY DESIGNATED

RECIPIENT. (a) To participate in the discretionary program

provided by this subchapter, a designated recipient must submit

to the commission an application for project financing. The

application must contain:

(1) a description of the project, including an estimate of the

population that the project would benefit and the anticipated

completion date of the project;

(2) a statement of the estimated cost of the project, including

an estimate of the portion of the cost of the project financed by

the United States; and

(3) the certification required by Section 456.006(b)(4).

(b) After the commission receives an application under this

section, the commission shall approve or deny the application and

notify the applicant in writing of its decision.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Amended by Acts 1997, 75th Leg., ch. 165, Sec. 30.34(g), eff.

Sept. 1, 1997; Acts 1997, 75th Leg., ch. 588, Sec. 6, eff. June

2, 1997.

Sec. 456.042. RIDE-SHARING ACTIVITIES. (a) A designated

recipient or a local government that has the power to operate a

public transportation system, directly or by contract, in an

urbanized or rural area may apply to the commission and receive

money from the discretionary program for a capital expenditure to

operate a ride-sharing activity.

(b) The commission shall provide 80 percent of the cost of

capital expenditures for a ride-sharing activity of a project it

approves under this section.

(c) An applicant for financing of a ride-sharing activity must

certify that:

(1) money is available to provide 20 percent of the cost of the

capital expenditure;

(2) the equipment the applicant provides for the ride-sharing

activity will be used primarily for commuting purposes;

(3) the ride-sharing activity will be operated without state

operating subsidies and under procedures required by Subsection

(d); and

(4) any financing available from the United States Department of

Transportation to supplement state and locally financed capital

expenditures for ride-sharing activities will be applied for and

used for the replacement of van pool equipment in the manner

required by Subsections (e) and (f).

(d) A recipient of money under this section must establish

procedures to purchase van pool equipment that are satisfactory

to the state and ensure that the equipment is operated for

commuter purposes as a nonprofit activity in the manner required

by Subsection (e).

(e) A recipient of money under this section must deposit all

revenue in excess of operating expenses that is derived from the

use of state-financed van pool equipment in a contingency reserve

account designated for use in the replacement of state-financed

van pool equipment at the end of the useful life of the

equipment.

(f) The state financial interest in the purchase of replacement

van pool equipment is based:

(1) on the ratio that money from the contingency reserve account

that is used in the purchase of replacement equipment bears to

the total price of the equipment; and

(2) on the ratio that state money bears to the total price of

the equipment being replaced.

(g) A recipient of money under this section shall return to the

state the portion of any remaining money in the contingency

reserve account when ride-sharing activities using state-financed

van pool equipment cease that represents the ratio of

state-to-local financing under the activities.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

SUBCHAPTER D. PASSENGER RAIL SERVICE ASSISTANCE PROGRAM

Sec. 456.061. DEFINITION. In this subchapter, "eligible

corporation" means a corporation created under former Subchapter

III, Chapter 14, Title 45, United States Code (now 49 U.S.C.

Sections 24101 et seq. and 24301 et seq.).

Added by Acts 1997, 75th Leg., ch. 110, Sec. 2, eff. May 16,

1997.

Sec. 456.062. LOANS TO CORPORATION. (a) Under the authority of

Section 52-a, Article III, Texas Constitution, and from funds

appropriated from the general revenue fund for this purpose, the

commission may loan money to an eligible corporation that

provides rail passenger service in the state.

(b) Notwithstanding any other statutory restriction, the portion

of the state highway fund not dedicated by the constitution is

collateral for repayment of a loan made under this section. The

comptroller may transfer from that portion of the state highway

fund to the general revenue fund the amount needed to repay any

unpaid balance on the loan, including applicable interest, in

accordance with the loan agreement.

Added by Acts 1997, 75th Leg., ch. 110, Sec. 2, eff. May 16,

1997.

Sec. 456.063. AGREEMENT. The department, on behalf of the

commission and with the approval of the comptroller, shall enter

into an agreement, under terms and conditions the department

considers appropriate, with an eligible corporation for the

purposes of making a secured loan under this subchapter. The

agreement must provide for collateralization and guaranties in a

form and amount determined by the comptroller and the commission

to be sufficient to repay to the state highway fund any money

transferred to the general revenue fund under Section 456.062(b).

Added by Acts 1997, 75th Leg., ch. 110, Sec. 2, eff. May 16,

1997.

Sec. 456.064. LIMITATION OF FUNDING. The commission may only

expend funds specifically appropriated by the legislature for the

purposes of this subchapter.

Added by Acts 1997, 75th Leg., ch. 110, Sec. 2, eff. May 16,

1997.

Sec. 456.065. GUARANTEE FROM MUNICIPALITIES. The department, on

behalf of the commission and with the approval of the

comptroller, shall secure an agreement or agreements with the

municipalities served by an eligible corporation that receives

assistance under this subchapter to further guarantee the

repayment of half of any unpaid balance on a loan, including

interest, made under this subchapter.

Added by Acts 1997, 75th Leg., ch. 110, Sec. 2, eff. May 16,

1997.