Transit Funding Flexibility Act

The Transit Funding Flexibility Act would broaden how urbanized area formula grant funds (the federal 5307 program) may be used and tighten accountability around those funds. Specifically, it would allow recipients to use 5307 funds for operating costs related to equipment and facilities used in public transportation, rather than restricting funds primarily to capital purposes. It would also remove a population-based eligibility cap, making the funds available to all urbanized areas (not just those above a 200,000 population threshold). In addition, the bill introduces annual maintenance-of-effort (MOE) certifications tied to operating costs and imposes a penalty (a 1/3 reduction in the next year’s grant) if an agency is found to have failed to maintain MOE. The changes would increase flexibility for transit agencies while increasing federal oversight to ensure ongoing local funding commitments.