The Legislation

On February 17, 2009 the President signed the American Recovery and Reinvestment Act (ARRA) of 2009 into law. Click here for text of the Act. The purpose of the legislation is:

• To preserve and create jobs and promote economic recovery.
• To assist those most impacted by the recession.
• To provide investments needed to increase economic efficiency by spurring technological advances in science and health.
• To invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits.
• To stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases.

ARRA Transit Funding

Transit Provisions of the Act include $8.4 billion dollars for new capital investment for public transportation. Of this total, $7.533 billion is available for capital projects eligible for funding under existing transit formula programs. The Federal Transit Administration (FTA) released apportionments on March 5, 2009. The funds will be distributed as follows:

• $5.44 billion for capital projects under the Urban Formula Program (§5307)
• $750 million for the Fixed Guideway Modernization program (§5309) $663 million for capital projects under the Rural Formula Program (§5311)
• $680 million for Growing States and High Density Formula Program (§5340)

The legislation stipulates that grantees must obligate 50 percent of the funds under these programs within 180 days of the apportionment, and the FTA has set the deadline at September 1, 2009. Funds not obligated within this period will be recaptured and redistributed to other grantees that demonstrate that the funds can be spent in a reasonable time frame. The remaining funds must be spent within one year, or they may also be subject to redistribution. Requests for extensions of the one-year deadline may be considered under narrow circumstances. The federal share for the grants is 100 percent.

In addition to the formula grants, $867 million is made available for new discretionary grant programs. $100 million of this is reserved for transit agencies to "reduce energy consumption or greenhouse gas emissions." The FTA will publish guidance with program details and instruction on how to apply for these funds.

$17 million of this discretionary money has been set aside for Public Transportation on Indian Reservations.

Lastly, $750 million is available for Capital Investment Grants under the New Starts and Small Starts program. These discretionary grants will be competitively awarded by FTA. Priority will go to projects that are currently in construction or are able to obligate funds within 150 days of enactment. The federal share would be consistent with existing Full Funding Grant Agreements and for new projects that could be initiated within the time limits at up to an 80 percent federal match.

Supplemental Discretionary Grants for a National Transportation System Program

In addition to the transit funds provided, the ARRA also includes $1.5 billion for a new discretionary multi-modal program, entitled the "Supplemental Discretionary Grants for a National Transportation System Program." The U.S. Department of Transportation (DOT) will award grants ranging from $20 million to $300 million for highways, bridges, public transportation, including New Starts and Small Starts, port infrastructure and freight rail projects of national, regional and metropolitan significance. The Secretary may waive the $20 million minimum for projects in small communities. No more than 20 percent of the total may be spent in one state, and grants must be distributed equitably among urban and rural areas. The DOT must issue a request for proposals and guidance within 90 days, applications for grants under the program must be submitted within 180 days, and grants must be awarded by February 17, 2010. The federal share for these grants is 100 percent.

ARRA General Provisions

In general, all FTA grant requirements will apply to stimulus grants as they do to annual FTA formula grants Grantees will be required to submit period reporting about progress with their stimulus projects including information about contracting efforts, financial performance and job creation. There are a few additional provisions of the Act relevant to grantees, regardless of the awarding agency:

• All ARRA-funded projects must utilize domestic iron and steel (waivers will be permitted in specific instances).
• The locally prevailing wage rate must be paid to all laborers and mechanics employed by contractors and subcontractors funded by ARRA funds in accordance to the Davis-Bacon Act.
• No ARRA funds can be dispersed to firms that do NOT participate in the E-Verify program under the Illegal Immigration Reform and Immigrant Responsibility Act of 1996.
• Each federal, state, or local government agency receiving ARRA funds must post all obligated AARA funds on the www.recovery.gov website.