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Section 5307(d)(1)(K) of SAFETEA-LU stipulates that the recipient for an urbanized area with a population of at least 200,000 must submit a certification that it will expend not less than one percent of the amount the recipient receives each fiscal year under Section 5307 for transit enhancements, as defined in section 5302(a); and will submit an annual report listing projects carried out in the preceding fiscal year with those funds.


Although this language reads differently from that of TEA-21, the intent of the provisions is the same in that both require the spending of one of the urbanized area’s section 5307 funds for transit enhancements.  SAFETEA-LU, however, provides that FTA may administer the one percent requirement as a certification in contrast to FTA’s set-aside approach under TEA-21.  There are also other administrative changes resulting from the SAFETEA-LU language.  The questions and information below serve as guidance for administering the SAFETEA-LU transit enhancement provision. 


1.  What is the definition of transit enhancement and what are the eligible projects? 


The term “transit enhancement” means, with respect to any project or an area to be served by a project, projects that are designed to enhance public transportation service or use and that are physically or functionally related to transit facilities. Eligible projects are: 

    • historic preservation, rehabilitation, and operation of historic public transportation buildings, structures, and facilities (including historic bus and railroad facilities);
    • bus shelters;
    • landscaping and other scenic beautification, including tables, benches, trash receptacles, and street lights;
    • public art;
    • pedestrian access and walkways;
    • bicycle access, including bicycle storage facilities and installing equipment for transporting bicycles on public transportation vehicles;
    • transit connections to parks within the recipient's transit service area;
    • signage; and
    • enhanced access for persons with disabilities to public transportation. 

2.  Does SAFETEA-LU continue the one percent set-aside for transit enhancements required in TEA-21? 


Yes and No.  The requirement that one percent of Section 5307 funds apportioned to an urbanized area with a population of 200,000 or more be used for transit enhancement projects is continued under SAFETEA-LU.  SAFETEA-LU language stipulates that the recipient for an urbanized area with a population of at least 200,000 must certify that it will expend one percent of the funds it receives each fiscal year for transit enhancements.  This differs from the language in TEA-21, which directed FTA to make the funds available from an area’s apportionment.  Given the SAFETEA-LU language, FTA no longer has a separate accounting classification code for the one percent and does not show the one percent amount separately in the agency’s annual apportionment notice.  Consequently, the DR will have to compute the amount (one percent of the urbanized area’s apportionment) that must be obligated for transit enhancements.  See question #6 for further explanation.  


3.  Who must submit the required certification and report? 


FTA interprets the term recipient as used in section 5307(d)(1)(K) to mean the Designated Recipient (DR) for the urbanized area (UZA) with a population of at least 200,000.  Therefore, it is the DR for the UZA that must certify with the submission of the annual Certifications and Assurances that one percent will be spent on transit enhancements


In a UZA that has more than one DR, each DR is required to submit the certification and the required annual report of transit enhancement projects.  However, when an urbanized area includes more than one DR the DRs are required to submit a sub-allocation agreement (“split letter”) to the FTA regional office, which shows how the funding will be allocated.  If that split letter stipulates that all of the DRs have agreed on how one percent of the urbanized area apportionment will be obligated for transit enhancements, and if the split letter identifies a specific DR (or its grantee) that will obligate the one percent, then only that DR, in the urbanized area with multiple DRs, must submit the required certification and report.  See the example below.     


Example:  The Boston, MA-NH-RI urbanized area has eight DRs.  The DRs reached agreement on how the area’s $120,120,589 FY 2006 Section 5307 apportionment would be allocated among them.  They also agreed that the one percent required to be expended for transit enhancements for the entire urbanized area, $1,201,206, will be the responsibility of the Greater Attleboro-Taunton Regional Transit Authority (GATRTA).  In the urbanized area sub-allocation split letter to the FTA Region I Office, which is signed by representatives for all of the DRs, the DRs document the amount of the urbanized area apportionment that is allocated to each DR, stipulate that one percent of the urbanized area apportionment will be obligated for transit enhancements, and specify that GATRTA will ensure that these funds are obligated for transit enhancements either by FTA grants in which it is the applicant and recipient, or through grants applied for and carried out by the grantees it represents as a DR.  GATRTA also states that it will submit the appropriate certification and report to FTA. 


In the example above, each DR signs the split letter indicating all agree to the conditions reported to FTA in the letter.  In another local procedure FTA has encountered, the agreement of the individual DRs to the sub-allocation of the urbanized area apportionment and use of the one percent for transit enhancements described in the letter was supported by the adoption of an official resolution or similar measure.  This procedure can serve as an acceptable example for certifying an identifying the DR and grantee(s) responsible for expending the one percent, in lieu of having all of the DRs sign the split letter.


The required annual report must be submitted with the Federal fiscal year’s final quarterly progress report for a Section 5307 grant in TEAM-WEB, or be sent to the appropriate FTA regional office electronically, or in hard-copy if the DR has no active grant application in TEAM-Web. The DR may also submit the certification in hard-copy to the regional office.  However, a DR can submit the certification and assurances in TEAM-Web, even though it may not have an active grant in TEAM-Web or be an FTA grantee. 


As you will note, this is a change from FTA’s transit enhancement certification and reporting requirements under TEA-21, in that effective with SAFETEA-LU only the DR is responsible to certify and report, and not each grantee that applies for a grant that contains a transit enhancement project subject to the one percent requirement. 


4.  How does a grantee that is not a DR fit into the process that assures that the urbanized area meets the one percent transit enhancement requirement?


It will be the responsibility of the DR, in coordination with the MPO, to determine how the one percent requirement will be allotted to transit projects in the urbanized area.  A grantee identified by the DR and MPO to implement a transit enhancement project will use funds allocated to it by the DR to apply to FTA for a grant to fund the transit enhancement project that counts toward the one percent.  These grantees, however, will need to provide the DR with the information it needs to report to FTA annually.  A grantee that is not the DR, as described in the question, is not required to provide a certification or to submit a report to FTA. 


The one percent is a minimum requirement and does not preclude the obligation of more than one percent in an urbanized area for transit enhancements (other than operation of historic facilities, which is not an eligible capital activity outside of the transit enhancements category.) 


5.  You said that enhancements are no longer a set-aside.  Does this mean that grant applications no longer need a separate ALI (Activity Line Item code) for the one percent enhancement projects?


A grantee should continue to use the ALI codes for transit enhancement when applicable.  Since the requirement to expend funds for and report on transit enhancement activities is still in effect, use of the transit enhancement ALI codes in the project budget will allow FTA to track the amount obligated for transit enhancements and report to Congress on how the funds were used. 


6.  In the revised FY 2006 apportionment notice, dated February 3, 2006, section 5340 Growing States and High Density funds are combined with 5307 funds.  Is the one percent for transit enhancements computed using the total apportionment amount published in that notice, since FTA does not show the required enhancement amount in a separate column? 


Yes.  SAFETEA-LU stipulates that section 5340 funds apportioned to urbanized areas are to be added to urbanized area formula funds made available for grants under section 5307.  The apportionment amount for an urbanized area 200,000 or more in population shown in the FTA FY 2006 and future years annual apportionment notice includes section 5340 funds.  One percent of the published apportionment is the amount that must be spent for transit enhancements.   


7.  Must the DR apply for the transit enhancement projects? May the DR allocate funds to grantees in the urbanized area and have them apply for transit enhancement projects?


No, the DR does not have to apply for or implement the transit enhancement project(s) directly. The DR is responsible for assuring that the one percent is spent for transit enhancements and reporting on the use of the funds. 


Yes, the DR may allocate funds to grantees in the urbanized area and have them apply directly for a grant that includes a transit enhancement project(s).  In coordination with the MPO the DR(s) can decide which grantees and projects in the urbanized area will use the one percent.     


8.  Must all of the transit enhancement funds be expended in a single fiscal year?  For example, does the one percent applicable to FY 2006 funds have to be expended in FY 2006?


No.  For purposes of clarification FTA interprets the term “expend” as used in section 5307(d)(1)(K) to mean obligate and “each fiscal year” refers to the year of apportionment, which in this case is FY 2006.  Therefore, to be in compliance with the expenditure element of the certification, the DR must ensure that one percent of the urbanized area’s apportionment for each fiscal year is obligated for transit enhancements within the period of availability.  For FY 2006 funds, one percent for transit enhancements must be obligated by September 30, 2009. 


9.  What information must be included in the annual transit enhancement report


The report must be submitted with the Federal fiscal year's final quarterly progress report for an active 5307 grant in TEAM-Web, or must be submitted without using TEAM-Web if the DR does not have an active FTA grant.  The report should include the following elements: a) name of grantee(s) expending the enhancement funds, b) UZA name and number, c) FTA project number(s), d) transit enhancement category or categories for which enhancement funds were obligated, e) brief description of enhancement by Federal fiscal year of funding and progress towards project implementation, f) activity line item codes from the approved budget(s), and g) amount awarded by FTA for the enhancement.  A link to the list of transit enhancement categories and activity line item (ALI) codes may be found on the TEAM-Web homepage.