(a) Definitions.—As used in this section, the following definitions shall apply:

(1) Recipient.—The term "recipient" means a State or Indian tribe that receives a Federal transit program grant directly from the Government.

(2) Subrecipient.—The term "subrecipient" means a State or local governmental authority, a nonprofit organization, or an operator of public transportation or intercity bus service that receives Federal transit program grant funds indirectly through a recipient.

(b) General Authority.—

(1) Grants authorized.—Except as provided by paragraph (2), the Secretary may award grants under this section to recipients located in rural areas for—

(A) planning, provided that a grant under this section for planning activities shall be in addition to funding awarded to a State under section 5305 for planning activities that are directed specifically at the needs of rural areas in the State;

(B) public transportation capital projects;

(C) operating costs of equipment and facilities for use in public transportation;

(D) job access and reverse commute projects; and

(E) the acquisition of public transportation services, including service agreements with private providers of public transportation service.

(2) State program.—

(A) In general.—A project eligible for a grant under this section shall be included in a State program for public transportation service projects, including agreements with private providers of public transportation service.

(B) Submission to secretary.—Each State shall submit to the Secretary annually the program described in subparagraph (A).

(C) Approval.—The Secretary may not approve the program unless the Secretary determines that—

(i) the program provides a fair distribution of amounts in the State, including Indian reservations; and

(ii) the program provides the maximum feasible coordination of public transportation service assisted under this section with transportation service assisted by other Federal sources.

(3) Rural transportation assistance program.—

(A) In general.—The Secretary shall carry out a rural transportation assistance program in rural areas.

(B) Grants and contracts.—In carrying out this paragraph, the Secretary may use not more than 2 percent of the amount made available under section 5338(a)(2)(F) to make grants and contracts for transportation research, technical assistance, training, and related support services in rural areas.

(C) Projects of a national scope.—Not more than 15 percent of the amounts available under subparagraph (B) may be used by the Secretary to carry out competitively selected projects of a national scope, with the remaining balance provided to the States.

(4) Data collection.—Each recipient under this section shall submit an annual report to the Secretary containing information on capital investment, operations, and service provided with funds received under this section, including—

(A) total annual revenue;

(B) sources of revenue;

(C) total annual operating costs;

(D) total annual capital costs;

(E) fleet size and type, and related facilities;

(F) vehicle revenue miles; and

(G) ridership.

(c) Apportionments.—

(1) Public transportation on indian reservations.—Of the amounts made available or appropriated for each fiscal year pursuant to section 5338(a)(2)(F) to carry out this paragraph, the following amounts shall be apportioned each fiscal year for grants to Indian tribes for any purpose eligible under this section, under such terms and conditions as may be established by the Secretary:

(A) $5,000,000 for each fiscal year shall be distributed on a competitive basis by the Secretary.

(B) $30,000,000 for each fiscal year shall be apportioned as formula grants, as provided in subsection (j).

(2) Appalachian development public transportation assistance program.—

(A) Definitions.—In this paragraph—

(i) the term "Appalachian region" has the same meaning as in section 14102 of title 40; and

(ii) the term "eligible recipient" means a State that participates in a program established under subtitle IV of title 40.

(B) In general.—The Secretary shall carry out a public transportation assistance program in the Appalachian region.

(C) Apportionment.—Of amounts made available or appropriated for each fiscal year under section 5338(a)(2)(F) to carry out this paragraph, the Secretary shall apportion funds to eligible recipients for any purpose eligible under this section, based on the guidelines established under section 9.5(b) of the Appalachian Regional Commission Code.

(D) Special rule.—An eligible recipient may use amounts that cannot be used for operating expenses under this paragraph for a highway project if—

(i) that use is approved, in writing, by the eligible recipient after appropriate notice and an opportunity for comment and appeal are provided to affected public transportation providers; and

(ii) the eligible recipient, in approving the use of amounts under this subparagraph, determines that the local transit needs are being addressed.

(3) Remaining amounts.—

(A) In general.—The amounts made available or appropriated for each fiscal year pursuant to section 5338(a)(2)(F) that are not apportioned under paragraph (1) or (2) shall be apportioned in accordance with this paragraph.

(B) Apportionment based on land area and population in nonurbanized areas.—

(i) In general.—83.15 percent of the amount described in subparagraph (A) shall be apportioned to the States in accordance with this subparagraph.

(ii) Land area.—

(I) In general.—Subject to subclause (II), each State shall receive an amount that is equal to 20 percent of the amount apportioned under clause (i), multiplied by the ratio of the land area in rural areas in that State and divided by the land area in all rural areas in the United States, as shown by the most recent decennial census of population.

(II) Maximum apportionment.—No State shall receive more than 5 percent of the amount apportioned under subclause (I).

(iii) Population.—Each State shall receive an amount equal to 80 percent of the amount apportioned under clause (i), multiplied by the ratio of the population of rural areas in that State and divided by the population of all rural areas in the United States, as shown by the most recent decennial census of population.

(C) Apportionment based on land area, vehicle revenue miles, and low-income individuals in nonurbanized areas.—

(i) In general.—16.85 percent of the amount described in subparagraph (A) shall be apportioned to the States in accordance with this subparagraph.

(ii) Land area.—Subject to clause (v), each State shall receive an amount that is equal to 29.68 percent of the amount apportioned under clause (i), multiplied by the ratio of the land area in rural areas in that State and divided by the land area in all rural areas in the United States, as shown by the most recent decennial census of population.

(iii) Vehicle revenue miles.—Subject to clause (v), each State shall receive an amount that is equal to 29.68 percent of the amount apportioned under clause (i), multiplied by the ratio of vehicle revenue miles in rural areas in that State and divided by the vehicle revenue miles in all rural areas in the United States, as determined by national transit database reporting.

(iv) Low-income individuals.—Each State shall receive an amount that is equal to 40.64 percent of the amount apportioned under clause (i), multiplied by the ratio of low-income individuals in rural areas in that State and divided by the number of low-income individuals in all rural areas in the United States, as shown by the Bureau of the Census.

(v) Maximum apportionment.—No State shall receive—

(I) more than 5 percent of the amount apportioned under clause (ii); or

(II) more than 5 percent of the amount apportioned under clause (iii).

(d) Use for Local Transportation Service.—A State may use an amount apportioned under this section for a project included in a program under subsection (b) of this section and eligible for assistance under this chapter if the project will provide local transportation service, as defined by the Secretary of Transportation, in a rural area.

(e) Use for Administration, Planning, and Technical Assistance.—The Secretary may allow a State to use not more than 10 percent of the amount apportioned under this section to administer this section and provide technical assistance to a subrecipient, including project planning, program and management development, coordination of public transportation programs, and research the State considers appropriate to promote effective delivery of public transportation to a rural area.

(f) Intercity Bus Transportation.—

(1) In general.—A State shall expend at least 15 percent of the amount made available in each fiscal year to carry out a program to develop and support intercity bus transportation. Eligible activities under the program include—

(A) planning and marketing for intercity bus transportation;

(B) capital grants for intercity bus facilities;

(C) joint-use facilities;

(D) operating grants through purchase-of-service agreements, user-side subsidies, and demonstration projects; and

(E) coordinating rural connections between small public transportation operations and intercity bus carriers.

(2) Certification.—A State does not have to comply with paragraph (1) of this subsection in a fiscal year in which the Governor of the State certifies to the Secretary, after consultation with affected intercity bus service providers, that the intercity bus service needs of the State are being met adequately.

(g) Government Share of Costs.—

(1) Capital projects.—

(A) In general.—Except as provided by subparagraph (B), a grant awarded under this section for a capital project or project administrative expenses shall be for 80 percent of the net costs of the project, as determined by the Secretary.

(B) Exception.—A State described in section 120(b) of title 23 shall receive a Government share of the net costs in accordance with the formula under that section.

(2) Operating assistance.—

(A) In general.—Except as provided by subparagraph (B), a grant made under this section for operating assistance may not exceed 50 percent of the net operating costs of the project, as determined by the Secretary.

(B) Exception.—A State described in section 120(b) of title 23 shall receive a Government share of the net operating costs equal to 62.5 percent of the Government share provided for under paragraph (1)(B).

(3) Remainder.—The remainder of net project costs—

(A) may be provided in cash from non-Government sources;

(B) may be provided from revenues from the sale of advertising and concessions;

(C) may be provided from an undistributed cash surplus, a replacement or depreciation cash fund or reserve, a service agreement with a State or local social service agency or a private social service organization, or new capital;

(D) may be derived from amounts appropriated or otherwise made available to a department or agency of the Government (other than the Department of Transportation) that are eligible to be expended for transportation;

(E) notwithstanding subparagraph (B), may be derived from amounts made available to carry out the Federal lands highway program established by section 204 ¹ of title 23; and

(F) in the case of an intercity bus project that includes both feeder service and an unsubsidized segment of intercity bus service to which the feeder service connects, may be derived from the costs of a private operator for the unsubsidized segment of intercity bus service, including all operating and capital costs of such service whether or not offset by revenue from such service, as an in-kind match for the operating costs of connecting rural intercity bus feeder service funded under subsection (f), if the private operator agrees in writing to the use of the costs of the private operator for the unsubsidized segment of intercity bus service as an in-kind match.

(4) Use of certain funds.—For purposes of paragraph (3)(B), the prohibitions on the use of funds for matching requirements under section 403(a)(5)(C)(vii) of the Social Security Act (42 U.S.C. 603(a)(5)(C)(vii)) shall not apply to Federal or State funds to be used for transportation purposes.

(5) Limitation on operating assistance.—A State carrying out a program of operating assistance under this section may not limit the level or extent of use of the Government grant for the payment of operating expenses.

(h) Transfer of Facilities and Equipment.—With the consent of the recipient currently having a facility or equipment acquired with assistance under this section, a State may transfer the facility or equipment to any recipient eligible to receive assistance under this chapter if the facility or equipment will continue to be used as required under this section.

(i) Relationship to Other Laws.—

(1) In general.—Section 5333(b) applies to this section if the Secretary of Labor utilizes a special warranty that provides a fair and equitable arrangement to protect the interests of employees.

(2) Rule of construction.—This subsection does not affect or discharge a responsibility of the Secretary of Transportation under a law of the United States.

(j) Formula Grants for Public Transportation on Indian Reservations.—

(1) Apportionment.—

(A) In general.—Of the amounts described in subsection (c)(1)(B)—

(i) 50 percent of the total amount shall be apportioned so that each Indian tribe providing public transportation service shall receive an amount equal to the total amount apportioned under this clause multiplied by the ratio of the number of vehicle revenue miles provided by an Indian tribe divided by the total number of vehicle revenue miles provided by all Indian tribes, as reported to the Secretary;

(ii) 25 percent of the total amount shall be apportioned equally among each Indian tribe providing at least 200,000 vehicle revenue miles of public transportation service annually, as reported to the Secretary; and

(iii) 25 percent of the total amount shall be apportioned among each Indian tribe providing public transportation on tribal lands (American Indian Areas, Alaska Native Areas, and Hawaiian Home Lands, as defined by the Bureau of the Census) on which more than 1,000 low-income individuals reside (as determined by the Bureau of the Census) so that each Indian tribe shall receive an amount equal to the total amount apportioned under this clause multiplied by the ratio of the number of low-income individuals residing on an Indian tribe's lands divided by the total number of low-income individuals on tribal lands on which more than 1,000 low-income individuals reside.

(B) Limitation.—No recipient shall receive more than $300,000 of the amounts apportioned under subparagraph (A)(iii) in a fiscal year.

(C) Remaining amounts.—Of the amounts made available under subparagraph (A)(iii), any amounts not apportioned under that subparagraph shall be allocated among Indian tribes receiving less than $300,000 in a fiscal year according to the formula specified in that clause.

(D) Low-income individuals.—For purposes of subparagraph (A)(iii), the term "low-income individual" means an individual whose family income is at or below 100 percent of the poverty line, as that term is defined in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)), including any revision required by that section, for a family of the size involved.

(E) Allocation between multiple indian tribes.—If more than 1 Indian tribe provides public transportation service on tribal lands in a single Tribal Statistical Area, and the Indian tribes do not determine how to allocate the funds apportioned under clause (iii) of subparagraph (A) between the Indian tribes, the Secretary shall allocate the funds so that each Indian tribe shall receive an amount equal to the total amount apportioned under such clause (iii) multiplied by the ratio of the number of annual unlinked passenger trips provided by each Indian tribe, as reported to the National Transit Database, to the total unlinked passenger trips provided by all Indian tribes in the Tribal Statistical Area.

(2) Non-tribal service providers.—A recipient that is an Indian tribe may use funds apportioned under this subsection to finance public transportation services provided by a non-tribal provider of public transportation that connects residents of tribal lands with surrounding communities, improves access to employment or healthcare, or otherwise addresses the mobility needs of tribal members.