Intermodal Surface Transportation Efficiency Act:
Flexible Funding Opportunities for Transportation Investments FY '95




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U.S. Department               Administrator        400 Seventh St., SW
of Transportation                               Washington, D.C. 20590

Federal Transit                                        Federal Highway
Administration                                          Administration

                                                        March 27, 1995

Dear Colleague:

Transportation planners and decisionmakers face a number of challenges
in the 1990s.  Managing congestion, improving air quality, and
providing equitable access to transportation services and facilities
demand a new and dynamic approach to transportation planning.  Rather
than focusing only on adding capacity to the Nation's roads, highways,
and transit systems, today's problems require multimodal solutions
whereby highway, transit, bicycle, and pedestrian projects complement
and support each other within a larger transportation system.

The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)
provides state and local planners and decisionmakers with
unprecedented tools to develop and implement plans, improvement
programs, and projects which meet locally determined goals and
objectives.  One such tool, flexible funding, supports multimodal
planning and project development by eliminating strict modal criteria
as a condition for use.  Because flexible funds may be used for
highway, transit, and multimodal investments, Federal dollars may be
directed to the most appropriate transportation solutions as
determined by state and metropolitan planning processes.

Over the 6-year life of the ISTEA authorization, over $70 billion of
Federal highway and nearly $10 billion of Federal transit funds maybe
used "flexibly." In the first three years of ISTEA, flexible funds
have been used to fund such transit improvements as maintenance
facility renovations, alteratively-fueled bus purchases, and advanced
technology fare collection systems.  In addition, transit capital
funds are being transferred to the Federal Highway Administration
(FHWA) and used for needed highway improvements.

More significantly, the broad eligibility provided for by the Surface
Transportation Program, the Congestion Mitigation and Air Quality
Improvement Program, and other "flexible" programs empowers state and
local transportation officials to look beyond developing "highway" and
"transit" agendas and instead consider more innovative, truly
intermodal solutions to transportation problems.  Recognizing the
importance of encouraging this broader perspective, the U. S.
Department of Transportation's Regional Roundtable Report and Action
Plan recommended that the scope of the Federal Transit
Administration's (FTA) annual "Flexible Funding Opportunities for
Transit" be enhanced to reflect a multimodal approach to using Federal
transportation resources.  This joint FTA/FHWA report thus summarizes
ISTEA's flexible funding opportunities for a wider range of surface
transportation investments, focusing in particular on the
transportation planning processes and fund management procedures
required to take fill advantage of this flexibility.

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The Department of Transportation--and by extension, its customers--
face a number of changes and challenges in the years ahead.  Many of
the goals of our restructuring efforts, however, are simply extensions
of the principles advanced by ISTEA: promoting new partnerships,
empowering local decisionmakers, and fostering innovation in the
maintenance and continued improvement of the Nation's transportation
system.  Flexible funding supports these goals, and we encourage you
to continue to pursue these resources as a means to address your local
and regional transportation investment needs.

                              Sincerely,


______________________________         ______________________________
Rodney E. Slate                        Gordon J. Linton       
Administrator                          Administrator
Federal Highway Administration         Federal Transit Administration

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Flexible Funding Opportunities
for Transportation Investments


FY '95



Federal Transit Administration
Federal Highway Administration
Washington, D.C. 20590

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      Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)

                           Table of Contents

Introduction to Flexible Funds                                       3

Planning and Priority Setting                                        4

   Case Studies

         The Transportation Planning Process in Albany, NY           5
         Cooperative Planning: the Key to Improving Mobility         7
         Multimodal Project Evaluation and Priority Setting          9

Flexible Fund Programs                                              10

   Case Studies

         Community Support: the Key to Enhancement Projects         11
         CMAQ and Innovative Transit Delivery                       12
         Multimodal Funds at Work                                   12
         Flexing Transit Funds for Highway Use                      13

Flexible Fund Management                                            14

Appendices

      Appendix I     Transportation Control Measures                15
      Appendix 11    Ozone and Carbon Monoxide Nonattainment
                     Areas                                          16
      Appendix III   Summary of FY 1995 Non-Interstate and
                     Urbanized Area Formula Apportionments,
                     by State                                       18
      Appendix IV    FY 1995 Multimodal Funds Attributable to
                     Urbanized Areas Over 200,000 Population        20

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   Flexible Funding Opportunities for Transportation Investments

                    Introduction to Flexible Funds


The Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)
broke significant ground in giving State and local decisionmakers
greater discretion in the use of Federal transportation dollars. 
ISTEA established several new programs delivered by FHWA which provide
State and local transportation planners and decisionmakers with the
flexibility to fund transportation projects, which best meet locally
determined goals and objectives for mobility, economic opportunity,
and air quality.  In addition, ISTEA allows for the flexible use, with
some restrictions Federal Highway and Transit funding sources.  These
flexible programs represent a clear departure from the way Federal
financial resources have been administered in the past, with State and
local transportation agencies gaining much more control over how and
where Federal funds are to be expended.

And these agencies are increasingly taking advantage of funding
flexibility.  Prior to ISTEA, Federal Aid Urban System (FAUS) funds
were the only USDOT surface transportation program resources available
to all States and localities which could be considered "flexible", and
this flexibility was limited.  ISTEA, however, created the flexible
Congestion Mitigation and Air Quality Improvement (CMAQ) program to
focus investment in highway and transit projects which improve our
cities' air quality, and the $24 billion Surface Transportation
Program (STP) which provides for an even broader range of highway and
transit capital, planning, and "enhancement" activities.  Use of these
and other flexible funds for transit and intermodal projects has
increased dramatically every year.

The benefits of flexible funding are not just limited to transit.


Click HERE for graphic.


      The transfer of flexible Federal-aid highway funds from
      FHWA to FTA has increased significantly since the passage
      of ISTEA.  Whereas only $5.8 million in FAUS funds were
      transferred in FY 1991, $609.7 million in STP, CMAQ, and
      other flexible funds were made available to FTA for
      transit purposes in FY 1994.  In addition to these
      amounts, FHWA has since FY 1992 administered over $1.1
      billion in STP, CMAQ, and NHS funds for multimodal
      transportation projects such as HOV facilities, vanpool
      projects, and park and ride lots, as well as multimodal
      planning activities.

Given limited resources, clean air requirements, and the desire
to make our communities more "livable", planners and decision-
makers are learning that no amount of investment in a single
"traditional" mode of transportation can solve all of today's
transportation problems.  Instead, likely solutions will stem from a
combination of innovative demand management policies and programs,
highway and transit operational improvements which get the most out of
existing system capacities, and a package of carefully planned
multimodal capital investments which provide travellers with more
choices.  Flexible funding supports all of these strategies by
providing for broader eligibility than traditional Federal grants
programs. 

In this sense, flexible fund programs should be thought of less in
terms of their transferability between the Federal Highway and Transit
Administrations, and more in terms of the wide range of projects,
programs, and strategies which can be supported by these resources. 
Taking full advantage of the potential of flexible funding is
dependent on the ability of State and local transportation planners,
working cooperatively with transit and environmental agencies and the
general public, to institutionalize an inclusive, multimodal
transportation planning process.  This report summarizes the planning,
programming, and administrative procedures which maximize the full
potential of flexible funds.  Throughout the text, several examples of
innovative projects and effective planning processes are provided to
illustrate how some metropolitan areas and states are meeting the
challenges presented by ISTEA.  In addition, a summary of the flexible
fund programs, and procedures for their administration is included. 
Finally, the report concludes the flexible fund programs available to
States and urbanized areas (UZAs) of greater than 200,000 population
(and other areas designated as transportation management areas).

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      Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)

                      Planning & Priority Setting

ISTEA has significantly changed the way that transportation plans and
programs are developed.  Because flexible funds have fewer
restrictions for use, planners are not limited to developing
transportation solutions based on what "type" (highway or transit) of
funding is available; instead, they can orient their transportation
plans and programs towards the evaluation of a wide range of
alternatives --- including demand management, bicycle, and pedestrian
initiatives --- which best achieve locally developed goals. 
Similarly, instead of letting funding requirements drive project
investment decisions, officials can determine investment priorities
based on their ability to meet not only these local goals for the
delivery of transportation services, but broader social and
environmental objectives such as those included among ISTEA's planning
factors.

Multimodal uses of Federal Highway and Transit Administration funds
have resulted from a collaborative, multimodal approach to
transportation planning and programming, with projects being
prioritized by their ability to meet locally determined needs rather
than because of Federal requirements dictating where money must be
spent.  Flexible funding is working in those areas which have
"institutionalized" a truly multimodal planning process and see
flexibility as an opportunity to meet multiple goals for improving air
quality, enhancing mobility, and achieving an equitable distribution
of transportation services.

The following section summarizes the Federally-required transportation
planning process, the planning tools that local transportation
entities can use to get the most out of flexible funding, and provides
several examples of these tools being put to work in areas all over
the United States.


Multimodal Transportation Planning

ISTEA requires a continuing, cooperative, and comprehensive transpor-
tation planning process in all metropolitan areas and throughout each
State.  The planning function in urbanized areas of greater than
50,000 population is conducted by officially designated metropolitan
planning organizations (MPOs); state Departments of Transportation
(DOTs) are responsible for statewide transportation planning
activities.  In both cases, ISTEA requires that MPOs and States work
with each other, as well as with transit operators, other affected
local and state agencies, and the general public in the development of
multimodal transportation plans and improvement programs.

Cooperatively developed statewide and metropolitan transportation
plans must forecast future growth, identify the needed transportation
investments to meet this growth, and ensure the maintenance and
efficient operation of existing transportation systems over a 20 year
timeframe.  Projects identified through the planning process and in-
cluded in transportation plans are then prioritized and programmed in
transportation improvement programs (TIPs) at the metropolitan level
and consolidated throughout the State in statewide transportation
improvement programs (STIPs) (which include both urban and rural
areas).  These nearterm programming documents serve as the agenda for
implementing a multi (at least three) year package of highway, 
transit, bicycle and pedestrian projects for each metropolitan area
and throughout the State.  To qualify for Federal financial
assistance, all projects contained in TIPS and STIPs must be derived
from an adopted transportation plan.


Major Investment Studies

Where the metropolitan planning process identifies the need for a
project to provide added capacity on a given corridor (or in a defined
sub-area of the metropolitan area) which will have an impact on the
regional transportation system and which may involve federal funding,
a major investment study (MIS) is required.  The MIS should 1)
establish the nature of present and future problems in a corridor or
sub-area and 2) identify all reasonable alternative strategies for
addressing transportation demand and produce information on the costs,
benefits, and impacts of these alternatives.  Flexible funding
supports the analysis of a wide range of multimodal options within the
MIS by providing capital assistance to most potential study outcomes,
be they highway, transit, or bicycle facilities or transportation
demand and/or congestion management strategies.

Flexible funds may also be used to fund the costs associated with
conducting major investment studies, as well as provide financial
support for many other transportation planning activities.


Congestion Management System

ISTEA requires for all transportation management areas (TMAs;
urbanized areas over 200,000 population and other areas designated at
the request of locally elected officials and the State Governor) that
the congestion management system be a part of the transportation
planning process.  The intent of the CMS is to provide a framework for
1) the identification of corridors and subareas where congestion is
occurring or likely to occur; 2) an evaluation of the cause and
characteristics of congestion within these corridors/ subareas; and 3)
the identification and evaluation of potential strategies to manage
congestion and improve the mobility of persons and goods.  For TMAs
that are nonattainment for carbon monoxide and ozone, no new fa-
cilities which serve significant single occupant vehicle (SOV) travel
may be

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Flexible Funding Opportunities for Transportation Investments

           The Transportation Planning Process in Albany, NY

An excellent example of long range planning that encourages the
development of innovative strategies to meet future transportation
needs is the process established by the Capital District
Transportation Commission (CDTC), the MPO of the four county area
surrounding Albany, New York.  Grounded by strong technical tools, an
understanding of Federal requirements, and an open, participatory
planning and public involvement process, CDTC is seen by State and
local highway, transit, and environmental interests as a credible
forum for regional transportation planning and decisionmaking.

CDTC views existing and planned transportation facilities not as a
collection of surface roads, bus routes, stations, and airports, but
as a single transportation system.  For example, CDTC defines the
elements of its metropolitan transportation system not in terms of
physical attributes, but by function (i.e. passenger and freight
access, connectivity, significance to the entire region).  This
orientation to function recognizes that transportation in and of
itself is of little value; instead, transportation is best seen as an
engine which serves broader goals for community and economic
development.  By incorporating a wide range of land use, energy, and
environmental considerations and performance measures into the
planning and programming processes, CDTC has established an
environment which is extremely conducive to the programming of funds
for non-traditional alternatives to adding highway capacity.

CDTC's transportation planning process thus represents an innovative,
multimodal approach to transportation systems planning.  Specifically,
the Albany process reflects the major themes addresses by ISTEA ---
getting the most out of the existing transportation system, managing
and mitigating traffic congestion, involving the public in
transportation planning and decisionmaking --- and uses flexible
funding as a mechanism for achieving these policy goals.  Several
elements of the Albany transportation planning process are described
below.

   New Visions
      The focus of CDTC's "New Visions" planning process, which will
      result in the update of their current plan, is to engage those
      affected by transportation decisions --- i.e. the users of the
      system --- in a dialogue about fundamental, long-term issues and
      options for the Albany region.  Specific task forces, consisting
      of a wide range of interested parties, have been established to
      provide input to the CDTC on locally determined priorities, such
      as expressway and arterial corridor management, freight/goods
      movement, special transportation needs, and bicycle and
      pedestrian issues.  Each task force must further address five
      overriding considerations to synthesize the findings of the task
      forces, further input from the public is provided at community
      meetings, open houses, and business and community sponsored
      forums for discussion.

      Albany's New Visions effort recognizes that emerging
      technologies, significant demographic changes, and
      unprecedented Federal funding opportunities require a new
      approach to transportation planning which 1) challenges
      traditional assumptions on how to meet the demand for
      transportation services and 2) sees transportation policy
      as a means to improving not only personal mobility but
      quality of life.  By expanding the scope of participants
      in the planning process, and by creating an environment
      where land use, community development, and energy
      efficiency are the concerns around which transportation
      solutions need to be crafted, CDTC believes that more
      creative initiatives can be developed to meet long term
      goals.

   Public Involvement
      A major component of CDTC's New Visions is a proactive public
      involvement process.  The MPO's public participation program is
      based on two key assumptions:  1) that providing the public with
      a range of opportunities to participate --- from major
      conferences, workshops, and informal participation methods (one-
      on-one meetings, brainstorming sessions) to frequent surveys,
      press releases, and requests for public comment

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      Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)

      --- generates more interest, more innovative ideas, and
      wider public and political support for regional
      transportation plans and improvement programs; and 2)
      meaningful participation must occur before major decisions
      have been made.  CDTC's outreach activities, including the
      publication of a citizen's guide to planning, ensures that
      the public is informed about the process, proposed
      improvements, and the opportunity to participate and
      provide input to decisionmaking.

   Managing Transportation Supply and Demand
      Recognizing the tremendous investment required to add
      significant capacity to the region's congested highway and
      expressway network, CDTC has placed great importance on highway
      systems management.  Specifically, CDTC understands that
      investment in other modes (transit, bicycles), intermodal
      facilities (park and ride and HOV facilities), TSM measures
      (incident management, traveler information systems) and TDM
      strategies (ride-sharing, parking policies) are credible
      elements of a highway system management program.  CDTC's
      transportation planning process has identified several
      strategies to improve the performance of the highway system
      without adding all purpose lanes.  For example, CDTC has
      programmed nearly $17 million in CMAQ resources to fund an
      Advanced Traffic Management System incorporating motorist
      advisory radio, comprehensive signal coordination, enhanced
      public transit communication, and improved incident management
      into a regional congestion surveillance and monitoring system. 
      The Capital District Travel Demand Management Initiative, funded
      under the CMAQ program, provides economic incentives to the
      private sector for establishment of TDM programs such as
      employer-subsidized transit passes, "cashing out" parking, or
      strategies which encourage employers to reduce peak period trips
      by their employees.

   Land Use
      CDTC's year 2015 demographic forecasts indicate that without a
      combination of regional and local growth management strategies,
      nearly 70% of the region's new trips will occur outside
      traditional urban transit corridors.  CDTC rightfully views land
      use as a promising long term strategy with the potential to
      impact travel behavior.  In an innovative effort to encourage
      local communities to undertake the necessary land use and policy
      initiatives which might ensure long term management of the
      transportation system, CDTC has programmed $100,000 annually in
      STP funds to match local resources dedicated to zoning and land
      use planning activities.  The Capital District Transportation
      Authority, Albany's primary provider of public transportation,
      is preparing a manual to guide policy makers on integrating
      transit into land use plans.  Perhaps most importantly, CDTC
      understands the impacts that transportation and land use plans. 
      Perhaps most importantly, CDTC understands the impacts that
      transportation and land use policies have on each other, and,
      through their planning process, are addressing the right
      questions:  What land use policies will be required to support
      fixed guideway transit in the region?  Will a reduction in
      highway congestion ultimately encourage more ex-urban growth? 
      How can a proper balance be struck?  

   Congestion Management
      Optimizing the performance of the highway system is dependent in
      large part on managing traffic congestion.  If current commute
      trends continue, CDTC forecasts that excess delay may triple by
      the year 2000; however, modeling work demonstrates that reaching
      total vehicle travel by only 4%, if targeted to the peak hour,
      can reduce this delay by almost 25%.  As part of the process for
      developing a congestion management system, the CDTC adopted
      several principles to guide the selection of potential
      strategies to reduce vehicle travel and improve mobility.  These
      principles emphasize alternatives to single occupant vehicle
      travel and physical highway capacity expansion, favoring instead
      operational improvements and TDM strategies typically eligible
      for flexible funding.  Furthermore, these principles have been
      incorporated into project evaluation criteria for the
      programming of CMAQ and STP funds in the region.

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   Flexible Funding Opportunities for Transportation Investments

implemented unless such a facility has been evaluated within a CMS.

Potential congestion management strategies include travel demand
management measures, traffic flow/operational enhancements, facilities
and programs which encourage the use of bicycles for non-recreational
purposes, and transit capital and operating improvements.  The CMS
process is intended to allow specific mobility-related problems to
drive the identification of solutions, rather than assume that adding
capacity either highway or transit --- is the de facto preferable
solution.  Like the alternatives evaluated as part of the MIS process,
most CMS strategies are projects and programs which are  eligible for
flexible funding.


Financial Constraints

ISTEA stipulates that metropolitan plans, TIPs, and STIPs include only
those projects for which funding can be reasonably expected to be
available.  The intent of "financially constrained" plans and programs
is to focus investment on operating and to maintaining the existing
transportation system and to prevent TIPs from becoming wish lists of
unrealistic projects.  Furthermore, in nonattainment areas, fiscally
constrained plans and TIPs ensure that sufficient funds are available
for the implementation of required transportation control measures
(TCMs; see appendix I) and that the sum of transportation improvements
identified in plans and contained in TIPs demonstrates conformity with
State Implementation Plans for the reduction of transportation related
pollutants.

Because of these financial requirements, projects generated by the
transportation planning process must not only meet cooperatively
defined needs, but must be developed within the context of how they
will be funded. Flexible funds give decisionmakers great leverage in
long term financial planning by expanding the potential availability
of funding beyond traditional specific highway or transit allocations.

Planning Factors

To help set a direction for the development and preparation of plans,
TIPs, and major investment studies in metropolitan areas, ISTEA has
identified 15 explicit factors which must be considered throughout the
transportation planning process.  These factors address both
transportation issues (i.e. alleviating congestion, preserving
existing facilities) and the need for the process to encompass broader
issues such as consistency with land use planning and the affects of
transportation investments on surrounding communities.  The 15 factors
are provided on the following page:

   Cooperative Planning:  the Key to Improving Mobility

   One of the most important goals of ISTEA is to improve mobility
   through the provision of attractive and efficient alternatives to
   single occupant vehicle trips.  Developing the most appropriate
   alternative, be it transit, HOV facilities, TDM strategies --- or a
   combination of a complementary projects and programs --- is
   dependent on several factors, including:  a thorough knowledge of
   identified needs, based on credible data and technical analyses
   processes; a cooperative, mutually determined process for
   evaluating options and measuring benefits; a willingness to think
   in terms of supporting regional, rather than just local, goals and
   objectives; and an understanding of the opportunities provided
   under flexible funding programs.


   With the opening of a new international airport west of Pittsburgh,
   PA, in 1992 and the major rehabilitation and reconstruction
   required of the Fort Pitt bridge, a major point of entry into
   Downtown Pittsburgh from the south and west, regional planners in
   southwestern Pennsylvania faced two important challenges:  how to
   meet the increasing demand for travel along the southwest corridor
   while allowing for the partial closure of the bridge during
   reconstruction.  After careful and cooperative planning, the
   Pittsburgh Airport Busway/Wabash HOV facility, a major capital
   infrastructure project drawing heavily on FHWA CMAQ and FTA "New
   Start" funding, will provide an attractive long term alternative to
   SOV travel from the central business district towards the airport
   which will simultaneously alleviate congestion during the temporary
   closing of the bridge during major repair work and help the region
   attain clean air standards required by the Clean Air Act.

   Working closely with the Southwestern Pennsylvania Regional
   Planning Commission, Conrail, and PennDOT, Port Authority Transit
   examined several options which would improve travel along the
   airport corridor and into downtown.  Simply adding capacity might
   in the short term decrease congestion but would not reduce the
   number of vehicles and the emissions associated with those
   vehicles; furthermore this volume could not be served during the
   temporary closing of the bridge to make needed improvements. 
   Clearly, a longer term solution which would reduce traffic volumes
   on both facilities (and, through a reduction in vehicle trips,
   improve air quality throughout the region) was critically needed.

   A seven mile busway and HOV segment was developed as the first step
   towards meeting these needs.  Combined with a planned bikeway along
   part of the alignment and the consideration of TDM measures to
   further reduce vehicle traffic downtown, the project is intended to
   provide the needed mobility in the corridor and permit the closing
   of the bridge for repairs.  In addition, expected development
   around planned stations could act as a focal point for economic
   revitalization in several communities.  Subsequent phases would
   extend improvements in the corridor westward to the airport.

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      Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)

   1.  The preservation of existing transportation facilities.

   2.  Consistency of transportation plans with Federal, State, and
       local energy conservation programs and polices.

   3.  The need to relieve congestion and to prevent congestion
       where it does not yet occur.

   4.  Consistency of transportation plans and programs with land use
       plans.

   5.  Where appropriate, the programming of funds for transportation
       enhancement activities.

   6.  The effect of transportation projects on the surrounding
       communities.  Such considerationshould include an
       analysis of the cost-effectiveness of alternative
       vestments to meet the demand for transportation
       services.

   7.  Access to other transportation facilities (such as air
       and seaports, freight distribution routes), national
       parks, and border crossings.

   8.  Connectivity of roads within metropolitan areas with roads
       outside of such areas.

   9.  Needs identified through ISTEA-required transportation
       management and monitoring systems.

  10.  The preservation of rights-of-way for future
       transportation improvements.

  11. The enhancement of the efficient movement of freight.

  12.  The use of life-cycle costing for bridges, tunnels, and
       pavements.

  13.  The overall social, economic, energy, and environmental effects
       of transportation decisions and the need to work with the
       public and affected agencies (such as housing, community
       development, and environmental resource management agencies) to
       ensure that transportation plans arc compatible with social and
       environmental goals.

   14. The expansion of transit services, where appropriate.

   15. Improving security on transit systems.

The joint FTA/FHWA planning regulations further define 23 factors for
consideration in the development of statewide plans and STIPs. 
Metropolitan and statewide planning factors, combined with the
cooperation of affected agencies and the need to solve the air quality
and congestion problems faced in most urban areas, should serve as the
building blocks for the development of multimodal planning and project
evaluation criteria.  As demonstrated by the included case studies,
the development of multimodal project evaluation criteria is an
important component of any planning process which intends to get the
most out of flexible funding.


Project Evaluation Processes

Prior to the availability of flexible funding, the selection of
transportation projects was driven in large part by the narrowly
defined eligibility of the source of funds being used.  Such re-
strictions discouraged the development of multimodal project
evaluation criteria because any type of multimodal analysis could not
be supported by traditional funding mechanisms.  Flexible funding,
however, eliminates these funding limitations, and the development of
multimodal project evaluation criteria allows planners to effectively
rate the various highway, transit, and other modal improvements to
evaluate how well they address the needs defined by the transportation
planning process.

To be most effective, project evaluation criteria must be credible to
the implementing agencies affected by them and understandable to the
decisionmakers responsible for approving transportation improvement
programs.  The key to establishing such criteria is the broad
participation of affected agencies in the development of evaluative
measures.


Public Involvement

ISTEA further requires that participation in the development of plans,
programs, and projects extend beyond institutional entities and
embrace the concerns of the general public.  To the extent that
transportation investment decisions have far-reaching economic,
environmental, and social effects upon the communities they impact,
the involvement of the public is critical in helping MPOs and States
address community values and needs.  Furthermore, an ongoing and open
public participation process, which provides the public with early
opportunities for input into plans and programs, helps to build broad-
based consensus for these planning efforts and minimize dissatis-
faction with resulting transportation improvements.

Public involvement should be a significant element of metropolitan and
statewide planning, programming, and project prioritizing processes,
as well as MIS and management system activities.  An educated and
informed public is the key to ensuring that this involvement is
meaningful, productive, and ultimately reflect community goals for
transportation, economic development, and quality of life.


                     Additional Planning Guidance

   FHWA and FTA have issued additional guidance on many of the
   planning requirements discussed here, including:

   Guidance on Major Investment Studies (August 19, 1994)
   Bicycle and Pedestrian Planning Interim Technical Guidance (January
   13, 1995)
   Interim Policy and Questions and Answers on Public Involvement
   (Jan. 27, 1995)

   Additional guidance will be available shortly.  Please contact FHWA
   or FTA, 400 7th St. S.W., Washington, D.C. 20590 for more
   information and/or copies.

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          Multimodal Project Evaluation and Priority Setting

   An excellent example of an inclusive and cooperative approach to
   multimodal planning and programming is the process that the
   Metropolitan Transportation Commission (MTC), the MPO for the San
   Francisco Bay Area, used to develop multimodal criteria for the
   allocation of flexible funding.  One of the first regional planning
   bodies to recognize the opportunities provided by ISTEA, the MTC
   established in early 1992 an Ad Hoc Committee -- composed of
   transit operations, operators of regional ports and airports,
   representatives from city and county governments, the State
   Department of Transportation, and the Air Quality District -- to
   develop regional objectives for the use of flexible funds and
   multimodal criteria to score and rank projects funded the STP and
   CMAQ programs.

   MTC adopted a three stage evaluation process for allocating
   flexible funds to worthy transportation projects.  The first stage
   consists of a basic eligibility test to ensure that the proposed
   projects meet ISTEA requirements and demonstrate adequate local
   commitment and support.  Projects meeting these screening criteria
   move on to the second stage, an innovative scoring system which
   ranks potential activities according to their ability to meet four
   cooperatively developed goals for the provision of transportation
   services throughout the region.  These four categories of
   criteria -- 1) maintaining the metropolitan transportation system;
   2) improving the efficiency of the metropolitan transportation
   system; 3) expanding the system to meet current and future demand;
   and 4) addressing external impacts such as air quality standards,
   land use goals, and the potential for reducing SOV trips -- are
   allocated specific point levels, with projects best meeting these
   goals receiving the highest scores.  Finally, ranked projects must
   meet a series of programming principles which guarantee that the
   entire program of transportation improvements presents a balanced,
   compatible package of investments that improves air quality,
   enhances mobility, and are ready for implementation.

   MTC's process, which has been adopted by other MPOs, has resulted
   in an extremely diverse program of transportation investments,
   including significant allocations of STP funding for transit,
   bicycle, and urban arterial projects with multimodal elements.

   By viewing the 15 factors contained in the ISTEA legislation as
   building blocks for the development of multimodal evaluation
   criteria, the North Central Council of Governments (NCTGC), the MPO
   of the Dallas-Ft. Worth region, established its process for
   allocating flexible funding.  NCTGC added several regional goals to
   the factors, and then submitted a total of 21 criteria to its
   Policy Board, highway, transit, and travel demand management
   committees, and community transportation groups for review. 
   Specifically, members of these groups were asked to assign weights
   to each of the criteria, to combine complimentary criteria, and to
   formulate final evaluation criteria for the development of the FY
   1993 TIP.

   NCTGC continued to look at ways to improve its evaluation criteria,
   and its Policy Board approved a revised set of criteria in November
   of 1993.  The MPO's final evaluation criteria for the allocation of
   STP and FTA Urbanized Area Formula funds reflect regional
   priorities such as current and future cost-effectiveness, air
   quality and energy conservation goals, and social mobility. 
   Acknowledging ISTEA's requirement that the transportation plans and
   improvement programs be fiscally constrained, the final criteria
   lend particular weight to a project's local cost participation. 
   CMAQ project evaluation criteria were similarly revised to give
   more points to Transportation Control Measures and social mobility
   projects than in the original criteria.  The net result of this
   cooperation is the mutual support of the project evaluation process
   by a wide range of transportation interests and the facilitation of
   significant amounts of flexible funds for worthy transit and
   multimodal projects throughout the Dallas-Ft. Worth region.

                                   9
.

                        Flexible Fund Programs

Another element of a successful multimodal planning process is 
understanding the Federal, State, and local funding sources which
support the implementation of transportation improvement programs. The
following summarizes FHWA and FTA flexible funding programs and the
improvement opportunities provided by them.  

While all of the programs described below may be considered
"flexible", it is important to consider and understand the distinct
eligibility requirements for the use of each funding source.

The Surface Transportation Program

The Surface Transportation Program (STP) provides for the widest
flexibility of ISTEA's formula programs.  STP funds may be used for
several highway and transit capital and planning activities,
including:

   Capital                 Planning

Construction/              Surface transpor-
rehab of roads &           tation planning

Transit capital            Development of
improvements               ISTEA mgmt
                           systems

Car & vanpool              Wetland
projects                   mitigation

Fringe and                 Highway and
corridor parking           transit research
facilities                 and development

Bicycle and ped            Environmental
facilities                 analysis


                         STP Fund Distribution


Click HERE for graphic.


   Funds distributed under the STP General Purposes allocation must be
   used in the population categories to which they are assigned. 
   STATEWIDE funds ($1.8 billion nationally in FY '95) are allocated
   for use in any area(s) of a State, at the discretion of the State.


Other eligible projects under the Surface Transportation Program
include highway and transit safety improvements, capital and operating
costs for traffic management and control projects and most
Transportation Control Measures (TCMs; see appendix 1) established by
the Clean Air Act Amendments of 1990 (CAAA).

The Surface Transportation is authorized in ISTEA at $23.9 billion
over the life of the act.  In FY '95, $3,897,976,000 has been
apportioned under the program, while an additional $913 million in
apportionment adjustments have been added to bring the FY '95 STP
program to over $ 4.8 billion nationwide. Approximately $939 million
of this amount is made available specifically to metropolitan planning
areas containing UZAs over 200,000 population; STP funds are further
distributed among two program (transportation enhancement and safety)
and several population categories.  The figure at the left displays
the STP distribution formula, and appendices 3 and 4 provide the
amount of STP funds available throughout each State and attributable
to each UZA over 200,000 population in FY '95.

STP Transportation Enhancements

10% of each States's annual STP apportionment ($423,559,054
nationally) is set aside for transportation enhancement activities. 
Enhancement projects are intended to integrate transportation
facilities into their surrounding communities by increasing public
access and enjoyment.  They can also be stand-alone projects with an
identifiable relationship to the intermodal transportation system. 
Transportation enhancement projects should be generated from the
metropolitan and statewide transportation planning process described
in the previous section and must be based on strong community support.

                                  10
.

Ten specific categories of transportation enhancements are eligible
for funding.  Please note that the list is definitive; only those
activities listed below are eligible for transportation enhancement
funding:

   1. Provision of facilities for pedestrian and bicycles.
   2. Acquisition of scenic easements and scenic or historic sites.
   3. Scenic/historic highway programs.
   4. Landscaping and other scenic beautification.
   5. Historic preservation.
   6. Rehabilitation and operation of historic transportation
      facilities (including railroads and canals).
   7. Preservation of abandoned railroad corridors (and their
      conversion to pedestrian and bicycle trails).
   8. Control and removal of outdoor advertising.
   9. Archeological planning and research.
   1O. Mitigation of water pollution due to highway runoff.


          Community Support:  The Key to Enhancement Projects

   The involvement and support of affected communities are critical to
   the success of transportation enhancement projects.  For nearly a
   decade, local citizens groups and public officials have been
   developing plans and gathering financial support for the renovation
   of a historic railroad depot along route 66 in Gallup, New Mexico. 
   Transportation enhancement funds, while not financing the entire
   project, were used primarily to rehabilitate the interior and
   exterior of the building.  Plans for the facility include
   rehabilitating the historic depot to operate as a multimodal
   facility serving AMTRAK, an inter-city motor coach company, and
   local public transportation.

   Additionally, the facility also serves as a cultural center, and
   contains a museum to display objects depicting the rich cultural
   heritage of the community, an outdoor market featuring Native
   American crafts, and a multi-purpose room to be used for community
   activities.  The location of the project within the downtown of the
   city is significant as it will help to revitalize the downtown and
   promote economic opportunities for Native Americans while also
   increasing tourism.  Through the use of transportation enhancement
   funds, the decade-long plan for the Gallup depot project is
   becoming reality.

   Another example of a community-supported enhancement project is the
   Anacostia Tributaries Trail in Prince George's County, Maryland. 
   This 12.3 mile bike and pedestrian trail will connect existing
   multi-use trails into a 24 mile greenway system linking Wheaton
   Regional Park in Montgomery County to Greenbelt National Park in
   Prince George's County, Maryland.  The completed trails will also
   provide access to non-polluting alternative means of transportation
   in a non-attainment area.  

   Grassroots efforts to complete these projects have been underway
   since the 1970s.  This is significant inasmuch as the trails will
   also serve as one of the anchors of an inner-beltway revitalization
   effort affecting several densely populated, racially mixed
   neighborhoods which have previously demonstrated substantial level
   of citizen involvement and strong locally elected official support. 
   As evidence of that involvement, only half of the total cost of the
   project will be paid for with STP enhancement funds; the remainder
   will be provided by local community groups under an innovative
   matching funds arrangement developed by the State of Maryland.  


Congestion Mitigation and Air Quality Improvement Program

Consistent with the intent of flexible funding, the Congestion
Mitigation and Air Quality Improvement (CMAQ) Program is distinguished
by its objectives --- i.e. improving our Nation's air quality and
managing traffic congestion --- rather than by typical modal
eligibility requirements.  CMAQ projects and programs are often
innovative solutions to common mobility problems and are driven by
Clean Air Act mandates to attain national ambient air quality
standards (NAAQS).  Eligible activities under the CMAQ program
include:

   Transit system capital expansion and improvements which are pro-
   jected to realize an increase in ridership.  In limited cases,
   operating costs associated with new transit service which has been
   specifically developed for air quality benefits are eligible for
   CMAQ funds for a maximum of two years.

   Travel demand management strategies and shared ride services.

   Traffic flow improvements such as incident management
   initiatives, ramp metering, timed traffic signalization, and the
   construction and dedication of HOV facilities.

   Pedestrian and bicycle facilities, as well as promotional
   activities which encourage bicycle commuting.

   Automobile inspection and maintenance programs.

Eligible TCMs contained in a State Implementation Plan for reducing
airborne pollutants are at all times provided the highest priority for
CMAQ funding.  The $6 billion dollar program --- $979,555,500 has been
apportioned in FY 1995 --- must be used in areas designated by the
Environmental Protection Agency as being "nonattainment" for carbon
monoxide and ozone NAAQS (see appendix 2).  Funds are apportioned to
States based on a formula which considers the severity of its air
quality problems.  States which are in attainment of air quality


                                  11
.

standards receive 0.5% of the national program, which may be
used for any project or program eligible for assistance under the
Surface Transportation Program.

                 CMAQ and Innovative Transit Delivery

   A recent transit needs study undertaken in Ventura County,
   California, revealed the potential to reduce SOV trips by providing
   new intra-county connecting service between several small local
   transit operations.  Working closely with its municipalities, the
   Ventura County Transportation Commission (VCTC) began to develop
   four new bus routes on main arteries in the county.  The new fixed-
   route service-known as VISTA--also connects with regional commuter
   rail service as well as the existing dail-a-ride service offered in
   the more rural parts of the county.  

   This project which started up in July, 1994, is an excellent
   example of cooperation at the local level in defining and
   implementing a project of mutual benefit to all the parties.  VCTC
   worked closely with affected communities to establish routes and
   schedules and to secure local financing commitments.  It also
   represents a concerted effort to provide the service at minimum
   cost, with the county contracting with several private transit
   companies to operate the new service.  

   Based on the projected ability to reduce SOV trips, VCTC received
   federal funding under the CMAQ program for a two-year demonstration
   project.  Ridership is being monitored to better align service
   schedules with actual demand and several routes have already been
   adjusted.  Considering today's more dispersed travel patterns in
   Ventura County, coupled with the regional nature of ozone
   pollution, there is a premium now on intergovernmental cooperation
   and the formulation of regional strategies to improve mobility and
   air quality.  Ventura County's new transit service demonstration is
   an excellent example of a well-coordinated, grass-roots approach to
   problem-solving which was aided by the flexible funding provisions
   of ISTEA.


National Highway System 

National Highway System (NHS) funds are intended to provide for a wide
range of transportation activities.  Until the NHS is actually
designated by Congressional legislation (deadline for this action is
September 30, 1995), NHS funds may be used on any principal arterial.
Eligible highway and transit under the NHS program projects
include:

   Construction and rehabilitation of roads and bridges

   Fringe and corridor parking facilities

   Bicycle and pedestrian facilities

   Carpool and vanpool
   
   Public transportation facilities in an NHS corridor, provided
   that such facilities are deemed cost effective and improve the
   level of service on a specific NHS limited access facility
   
In FY 1995, $3,331,743,154 has been apportioned for use under the
NHS program (see appendix 3 for a state-by-state breakdown).  Fifty
percent of a State's NHS apportionment may be transferred to the
STP (although up to 100% may be transferred with the approval Of the
U.S. Secretary Of Transportation).


                       Multimodal Funds at Work

   Commuter and heavy rail operation, express and local bus service,
   and the regional highway system provide Dade County, Florida,
   residents with several modal options for travel.  The Dade County
   MPO, however, found that the efficiency of the overall multimodal
   transportation system is limited in some areas by 1) poor
   connectivity between modes; 2) increasingly congested roadway
   conditions; and 3) lack of integration of land use and surface
   transportation planning.  A 1992 study to improve intermodal
   connections to the Miami International Airport and major employment
   centers identified an intermodal center, linking the airport with
   intracity, commuter, and future high-speed regional rail, bus and
   ferry service, and planned highway expansion (including the
   region's East/West Multimodal Corridor), as a means to address
   these multiple issues.  The ultimate intent of the Miami Intermodal
   Center (MIC) is to improve access to the airport, foster
   appropriate development in the surrounding area, and make the
   transfer of passengers between transit, highway and air modes as
   safe, efficient, and "seamless" as possible. 

   The delivery of Federal dollars to support multimodal projects
   should be just as seamless.  FHWA, through the Florida Department
   of Transportation, has administered nearly $16 million in CMAQ
   funds for project planning, preliminary engineering, and
   environmental work for the MIC; FTA has also served in an advisory
   capacity.  $700 million in Federal, State, and other resources are
   programmed in the region's TIP for project construction.  The MIC
   demonstrates not only a cooperative Federal-State-local and
   highway-transit-air partnership to project planning, but the
   flexibility of CMAQ program funds:  despite the significant transit
   components to the project, no transfer of funds to FTA was
   necessary.   


Bridge and Interstate Maintenance programs

Bridge Replacement and Rehabilitation program funds are

                                  12 
.

apportioned among States based on the square footage of "deficient"
highway bridges inventoried by each State.  In FY 95, $2,549,114,372
in Bridge funds were apportioned to States.  Up to 40% of this amount
($1,019,645,700) may be transferred by States to the STP or NHS for
purposes consistent with either program.

Interstate Maintenance program funds, $2,776,677,750 nationally in FY
1995, are apportioned to States based on interstate lane miles and
vehicle miles traveled criteria established by Congress.  Each State
may unconditionally transfer up to 20% of its Interstate Maintenance 
apportionment to the ST? or NHS. In FY 1995, $555,335,540 may be
transferred.  In addition, if a State certifies that its apportionment
is in excess of its maintenance needs, it may, upon approval by the
Secretary of Transportation, transfer this excess amount to the
STP or NHS.

Funds transferred by either program to the STP may be used anywhere
within a State.

Donor State Bonus and Minimum Allocation

The Donor State Bonus and Minimum Allocation programs are additional
equity provisions which ensure a return to "donor" States which
contribute more to the Highway Trust Fund than they receive in
Federal-aid apportionments.  In FY 1995, $494,725,000 under the Donor
State Bonus and $1,426,822,463 under the Minimum Allocation provision
are available to the 18 States that qualified for the two Programs
(see appendix 3).  Like the STP, a portion of the Donor State Bonus
and Minimum Allocation funds are earmarked for use in areas of
specific Population thresholds.  Funds available under these
categories may be used for any purpose eligible under the Surface
Transportation Program.


                 Flexing Transit Funds for Highway Use

   On April 26, 1994, the Board of Directors of the Mid-America
   Regional Council (MARC), the metropolitan planning organization for
   the Kansas City urbanized area, approved a memorandum of
   understanding with Johnson County, Kansas, and the Kansas City Area
   Transportation Authority (KCATA) which set into motion the Nation's
   first transfer of FTA formula transit funds to FHWA for highway
   improvement purposes.  The proposed transfer of $750,000 in
   Urbanized Area Formula funds to the Surface Transportation Program
   demonstrates an innovative, cooperative approach to using funding
   flexibility for meeting the investment needs, regardless of mode,
   identified by a multimodal transportation planning process.

   Johnson County, which through the Transit division of its
   Transportation Department offers both fixed-route and demand-
   response public transportation services, was looking for ways to
   supplement operating revenues for fiscal years 1995 and '96.  At
   the same time, capital funds were needed for critical road
   improvements within the County.  Because of the flexibility of both
   local and Federal funding sources, however, MARC saw an opportunity
   to transfer $375,000 FY 95 and '96 Urbanized Area Formula capital
   resources to the Kansas Department of Transportation's Surface
   Transportation Program to add needed capacity to a congested local
   arterial; this, by agreement, would allow the overmatch portion of
   the local funds previously committed to the road project to offset
   operating expenses of Johnson County Transit.  The transfer of
   transit capital to highway capital funds, and the subsequent
   "trading" of these highway funds for transit operating assistance,
   demonstrates that funding flexibility, coupled with interagency
   cooperation, can work for the benefit of all modes.


Interstate Substitute Program

The Federal-Aid Highway Act of 1978 established the Interstate
Substitute Program which permits State and local officials to withdraw
planned Federal-aid interstate routes and substitute transit (with
Substitute Highway funds) in their place.  ISTEA provides even more
flexibility by allowing the Substitute Highway portion of the program
to be used for mass transit purposes.

$231,000,000 in FY 1995 Substitute Highway funds are available in
areas which have interstate routes.  Substitute funds must be used for
projects which serve the area from which the interstate route was
withdrawn, Most highway and transit capital costs are eligible under
the substitute Highway provision.


FTA Urbanized Area Formula Transit funds

FTA's Urbanized Area Formula Program provides transit capital and
operating assistance to metropolitan areas of 50,000 and more popula-
tion.  Urbanized Area Formula funds apportioned to TMAs which cannot
be used for the payment of operating expenses may be made available
for highway Projects if the following are met: 

1. The use of these funds for highway purposes is approved by the
   MPO after appropriate notice and opportunity for comment and
   appeal are Provided to affected transit providers;

2. The funds are not needed for capital transit investments required
   by the Americans with Disabilities Act of 1990;

3. State and local funds used to match Urbanized Area Formula funds
   made available for highway purposes are also eligible to fund
   either highway or transit projects.

In FY 1995, up to $2,079,943,275 in Urbanized Area Formula funds may
be eligible for highway use; see appendix 4 for the distribution of
these funds.

                                  13
.

                       Flexible Fund Management

While fund flexibility has often been thought, and measured in terms,
of their transferability between the Federal Highway and Transit
Administrations, it must be noted that several FHWA programs may
provide for transit-related projects without actually the funds being
administered by FTA.  For example, eligible projects on the National
Highway System include capital investments in transit, provided they
meet the conditions described in the previous section.  The Interstate
Maintenance and Substitute Highway programs also provide for specific,
limited, transit opportunities.

As importantly, multimodal projects such as HOV lanes and park and
ride lots, as well as TSM and TDM strategies and surface
transportation planning activities, may be funded with flexible
resources and administered through either agency.  Funding flexibility
means that for many multimodal projects, local and State officials
have discretion in choosing how funds are to be administered.  In all
cases, it is critical that State and local planners work closely with
their FTA and FHWA counterparts to determine a strategy for delivering
funds which facilitates project delivery.

FHWA Obligation Ceiling

For budgetary reasons, each fiscal year a ceiling is placed on most
programs contained in the overall Federal-aid highway program.  What
this generally means is that the sum total of all FHWA obligations in
any fiscal year for these programs (including STP, CMAQ, and other
flexible programs) cannot equal the sum total of available funds for
that year; instead, each State has the authority to obligate only up
to a lesser amount, i.e. its "obligation ceiling".  The gap between
the sum of FHWA apportionments and the obligation ceiling is carried
over as an unobligated balance, available for obligation in future
years.

Because this ceiling is applied by Congress to the sum total of all
Federal-aid highway and highway safety construction program
apportionments and not to each individual program which collectively
make up this total, States have the flexibility to obligate the mix of
FHWA programs which best meets their transportation needs.  MPOs,
transit operators, and other project sponsors need to be aware,
however, that this choice typically allows States to obligate funds
for projects that are immediately ready for implementation regardless
of individual funding; this, in turn, may prevent States from obli-
gating their full apportionment of STP, CMAQ, or other flexible funds
if a State has already reached its obligation ceiling.

It should be noted that FHWA flexible funds made available to FTA are
counted against a State's obligation limitation at the time of the
transfer, not with the obligation by FTA of the funds.  Furthermore,
any obligation authority individual States do not expect to utilize by
the end of the fiscal year is redistributed in August to other States
that are able to utilize more than their share of the total obligation
limitation.  This annual redistribution of obligation authority
provides some MPOs and transit operators another opportunity for
funding if projects are already in an approved STIP and are ready to
go.

States which use up both their original ceiling and their
redistributed authority may further qualify for a bonus ceiling.  This
additional authority is usually set at an amount equal to 2.5% of the
State's unobligated balance.

Clearly, it is essential that all players engaged in metropolitan and
statewide planning activities understand the obligation limitation
mechanism, and work together to best manage its States obligation
authority.  In addition to carefully monitoring the status of the
limitation to avoid funding shortfalls and to take advantage of any
possible authority redistribution, project sponsors should also try
and get their projects programmed as early in the fiscal year as
possible.  The incremental "phasing" of federal funds for major
construction projects over a multiyear period, rather than a larger,
onetime obligation, is another viable strategy to get the most out of
a State's obligation limitation.

                                  14
.

      Flexible Funding Opportunities for Transportation Investments

                              Appendices

                              Appendix I
                                   
                Transportation Control Measures (TCMs)

                   Clean Air Act Amendments of 1990
                         Section 108(b)(1)(A)

   (i)   programs for improved public transit;

  (ii)   restriction of certain roads or lanes to, or
         construction of such roads or lanes for use by,
         passenger buses or high occupancy vehicles;

 (iii)   employer-based transportation management plans,
         including incentives;

  (iv)   trip reduction ordinances;

   (v)   traffic flow improvement programs that achieve
         emission reductions;

  (vi)   fringe and transportation corridor parking
         facilities serving multiple occupancy vehicle
         programs or transit service;

 (vii)   programs to limit or restrict vehicle use in
         downtown areas or other areas of emission
         concentration particularly during periods of peak
         use;

(viii)   programs for the provision of all forms of high-
         occupancy, shared-ride services;

  (ix)   programs to limit portions of road surfaces or
         certain sections of the metropolitan area to the use
         of non-motorized vehicles or pedestrian use, both as
         to time and place;

   (x)   programs for secure bicycle storage facilities and
         other facilities, including bicycle lanes, for the
         convenience and protection of bicyclists, in both
         public and private areas;

  (xi)   programs to control extended idling of vehicles;

 (xii)   programs to reduce motor vehicle emissions,
         consistent with Title II, which are caused by
         extreme cold start conditions;

(xiii)   employer-sponsored programs to permit flexible work
         schedules;

 (xiv)   programs and ordinances to facilitate non-automobile
         travel, provision and utilization of mass transit
         and to generally reduce the need for single-occupant
         vehicle travel, as part of transportation planning
         and development efforts of a locality, including
         programs and ordinances applicable to new shopping
         centers, special events, and other centers of
         vehicle activity;

  (xv)   programs for new construction and major
         reconstruction of paths, tracks or areas solely for
         the use by pedestrian or other non-motorized means
         of transportation when economically feasible and in
         the public interest.  For purposes of this clause,
         the Administrator shall also consult with the
         Secretary of the Interior; and

 (xvi)   program to encourage the voluntary removal from use
         and the marketplace of pre-1980 model year light
         duty vehicles and pre-1980 model light duty trucks.

                                  15
.

                                     Appendix II

                        Designated Ozone and Carbon Monoxide
                                 Nonattainment Areas

                        Classified Ozone Nonattainment Areas

              Dates in parenthesis are when ozone standards must be met

                                   Extreme (2010)
Los Angeles-South Coast Air Basin

                                    Severe (2007)
Baltimore, MD                           San Diego, CA
Philadelphia-Wilmington-Trenton, 
PA-NJ-DE-MD                             Ventura County, CA

                                    Severe (2005)
Chicago-Gary-Lake County, IL-IN         New York-N. New Jersey-Long Isle, NY-NJ-CT
Houston-Galveston-Brazoria, TX          Southeast Desert Modified AQMA, CA
Milwaukee-Racine                        
                                   Serious (1999)
Atlanta, GA                             Portsmouth-Dover-Rochester, NH
Baton Rouge, LA                         Providence, RI
Beaumont-Port Arthur, TX                Sacramento Metro, CA
Boston-Lawrence-Worcester,MA-NH         San Joaquin Valley, CA
El Paso, TX                             Springfield, MA
Greater Connecticut                     Washington, DC-MD-VA

                                   Moderate (1996)
Ashland, KY                             Monterey Bay, CA
Atlantic City, NJ                       Muskegon, MI
Charlotte-Gastonia, NC                  Nashville, TN
Cincinnati-Hamilton, OH-KY              Phoenix, AZ
Cleveland-Akron-Lorain, OH              Pittsburgh-Beaver Valley, PA
Dallas-Fort Worth, TX                   Portland, ME
Dayton -Springfield, OH                 Poughkeepsie, NY
Detroit-Ann Arbor, NH                   Reading, PA
Grand Rapids, NH                        Richmond, VA
Kewaunee County, WI                     Salt Lake City, UT
Knox and Lincoln Counties, NM           San Francisco Bay Area, CA
Lewiston-Ashburn, ME                    Santa Barbara-Santa Maria-Lompoc, CA
Louisville, KY-IN                       Sheboygan, WI
Manitowoc County, WI                    St. Louis, MO-IL
Miami-Fort Lauderdale-
West Palm Beach, FL                     Toledo, OH

                                   Marginal (1993)
Albany-Schnectady-Troy, NY              Lake Charles, LA
Allentown-Bethlehem-Easton, PA-NJ       Lancaster, PA
Altoona, PA                             Lexington-Fayette, KY
Birmingham, AL                          Manchester, NH
Buffalo-Niagara Falls, NY               Memphis, TN
Canton, OH                              Norfolk-Virginia Beach-Newp. News, VA
Columbus, OH                            Paducah, KY
Door County, WI                         Portland-Vancouver, OR-WA
Erie, PA                                Reno, NV
Essex County, NY                        Scranton-Wilkes Barre, PA
Evansville, IN                          Seattle-Tacoma, WA
Greenbrier County, WV                   Smyth County, VA
Hancock and Waldo Counties, NM          Sussex County, DE
Harrisburg-Lebanon-Carlisle, PA         Tampa-St. Petersburg-Clearwater, FL
Jefferson County, NY                    Walworth County, WI
Jersey County, IL                       York, PA
Johnstown, PA                           Youngstown-Warren-Sharon, OH-PA
Kent and Queen Anne's Counties, MD

                                         16
.

Flexible Funding Opportunities for Transportation Investments

                               Appendix II (continued)

                   Classified Carbon Monoxide Nonattainment Areas

                                          Serious
Los Angeles South Coast Air Basin

                                 Moderate > 12.7 ppm
Anchorage, AK                           New York-N. New Jer-Long Isle, NY-NJ-CT
Denver-Boulder, CO                      Provo, UT
Fresno, CA                              Seattle-Tacoma, WA
Las Vegas, NV                           Spokane, WA

                                 Moderate <=12.7 ppm
Albuquerque, NM                         Minneapolis, MN
Baltimore, MD                           Missoula, MT
Boston, MA                              Modesto, CA
Chico, CA                               Ogden, UT
Colorado Springs, CO                    Philadelphia-Camden County, PA-NJ
El Paso, TX                             Phoenix, AZ
Fairbanks, AK                           Portland-Vancouver, OR-WA
Fort Collins, CO                        Raleigh-Durham, NC
Grants Pass, OR                         Reno, NV
Hartford-New Britain-Middletown, CT     Sacramento, CA
Klamath Falls, OR                       San Francisco-Oakland-San Jose, CA
Lake Tahoe South Shore, CA              San Diego, CA
Longmont CO                             Stockton, CA
Medford, OR                             Washington, DC-MD-VA

                                         17
.

                             Appendix III

         Summary of FY 1995 Non-Interstate and Urbanized Area
                   Formula Apportionments, by State

                        all amounts in dollars


Click HERE for graphic.


                                  18

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Click HERE for graphic.


*  Apportionment Adjustments are funding sources legislated by
   Congress to achieve equity in funding levels among States.  They
   may be used for any project eliginle for funding under the Surface
   Transportation Program.  Fifty percent of the adjustments are
   distributed according to the STP distribution rules presented on
   page 10; the other 50% may be used anywhere within the State they
   are apportioned.
** 40% of each State's apportionment considered "flexible."
#  20% of each State's apportionment considered "flexible."
+  Formerly known as Section 9; estimated amounts based on average
   obligations over past five years.  Up to $2,079,943,275 considered
   "flexible."

                                  19



.

      Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)

                              Appendix IV

          Summary of FY 1995 Multimodal Funds Attributable to
               Urbanized Areas Over 200,000 Population*
                        all amounts in dollars


Click HERE for graphic.


                                  20

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*  Urbanized Area Formula funds (formerly FTA Section 9) are
   apportioned to all TMAs, whether or not they contain a UZA over
   200,000 population; bi- or tri-State apportionments are provided
   under the State where the majority of the population within the TMA
   resides (although funds under this program may be obligated in any
   portion of the TMA).  STP, Minimum Allocation, and Donor State
   Bonus funds presented here are attributable only to UZAs over
   200,000 population.

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       U.S. GOVERNMENT PRINTING OFFICE: 1995 - 387 - 554 / 35745
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                    Federal Transit Administration
                    Federal Highway Administration

                       400 Seventh Street, S.W.
                        Washington, D.C. 20590

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