Details and current State of the US Transit industry entering the $1.9 Trillion American Rescue Plan Act:
The U.S. Transit industry has received a long-awaited third-round stimulus package stemming from the recently signed into law American Rescue Plan Act of 2021. Of the $1.9 trillion dollar package, $30.5 billion has been allocated to assist transit and rail. This will in turn avoid imminent service cuts and employee furloughs to jump-start the heartbeat of many of our nation's transit agencies into 2021. The stimulus package is designed to alleviate transit hardships due to reduced ridership during the pandemic. This stopgap will prove instrumental in allowing providers the opportunity to afford operating cost and overhead expenses until we are out of the pandemic and ridership numbers can return to previous transit capacity totals, pre-COVID.
As mentioned, this plan provides $30.5 billion in funding for transit agencies through the following Federal Transit Administration Formula Funds: (5307) urbanized transit, (5311) rural transit, and (5310) nonprofit transit. Funds will be available through and must be obligated by September 30, 2024, and disbursed by September 30, 2029. The CARES Act and Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSAA) funding are still in effect and agencies are now reporting to state officials who are currently requesting expenditure reports. As of March 23, 2021, FTA has awarded 806 CARES Act granted totaling $24.2 billion or 97% of the $25 billion allocated to transit. Also as of March 23, 2021, FTA awarded 32 CRRSAA grants totaling $347.1 million or 2% of the $14 billion allocated to transit.
CARES, CRRSAA, and the newly approved ARPA funding can be combined to remedy operating cost expenditures if needed. If the operator chooses to set up their facility as a COVID vaccination site within their community, all CARES and
CRRSAA Act funding can be used for these transportation and event expenses as well.
American Rescue Plan Act of 2021 apportion amounts for transit recovery will be as follows. Urbanized Transit, under the 5307 Formula Grant will receive $26.1 billion in total allocations from the ARPA bill. Recipients were selected based on financial need, including projects based on the amount of CARES, CRRSAA, and funds under this Act as a percentage of their respective 2018, pre-COVID operating expenses.
5311 recipients or formula Grants for Rural Transit providers are slated to receive $317.2 million in which many different vehicle sizes are represented within this Grant. 5310 grantee recipients, or non-profit Enhanced Mobility of Seniors and Individuals with Disabilities and allocation from the ARPA Act of $50 million. Funds were apportioned based on amounts received under the CARES Act and CRRSAA with states that received 150% of their 2018 rural operating expenses. These states received an additional 5%. States receiving between 140-150% will receive an additional 10% as where states at less than 140% will receive an additional 20%.
As a rule, all American Rescue Plan Act funding must be used for Operating expenses, administrative leave for operators or contractor personnel due to restrictions in service, and related expenses (including the purchase of PPE). All available at 100% federal reimbursement share.
The only exception would be the use of the Capital Investment Grant funding of 2.2 billion or 2% of the total ARPA Act amount. Emergency Discretionary Grants to be used for Operating expense only, set at $2.2 billion of 7% of the total allotment. The FTA is requiring an expenditure of 90% of CARES Act funding to apply for these pending ARPA funds. Capital Investment Grants will receive $1.7 billion of 6% of all total ARPA transit bills. As mentioned, these funds will also go towards payroll and operations, unless the recipient and certify they have not had layoffs or furloughs of staff since receiving funding. If all cases are reported and meet to show these requirements, ARPA funding may be used for capital expenses.
How Does this apply to our Commercial and Transit Customers?
Our assessment is the federal government is watching how FTA recipients will use this new 3rd round of money to see if the recently released Infrastructure Bill might enhance FAST Act Extension money. Recent news suggests that $621 billion will go towards Transit in this new Infrastructure Bill recently announced.
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