SB 597 — An Act amending Title 74 (Transportation) of the Pennsylvania Consolidated Statutes, in sustainable mobility options, further providing for definitions, for fund, for application and approval process, for Federal funding, for coordination and consolidation, for operating program, for asset improvement program, for new initiatives program, for programs of Statewide significance and for program oversight and administration, providing for small purchase procedures and repealing provisions relating to evaluation of private investment opportunities.

PRINTER'S NO.   761

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                        SENATE BILL
                        No. 597
                                                Session of
                                                  2025

     INTRODUCED BY LAUGHLIN, FLYNN, LANGERHOLC, YAW, BARTOLOTTA,
        SAVAL, FONTANA, VOGEL, DUSH, PENNYCUICK, HUTCHINSON, BAKER,
        KANE, STEFANO, KEARNEY, ARGALL, BOSCOLA AND COMITTA,
        MAY 12, 2025

     REFERRED TO TRANSPORTATION, MAY 12, 2025


                                    AN ACT
 1   Amending Title 74 (Transportation) of the Pennsylvania
 2      Consolidated Statutes, in sustainable mobility options,
 3      further providing for definitions, for fund, for application
 4      and approval process, for Federal funding, for coordination
 5      and consolidation, for operating program, for asset
 6      improvement program, for new initiatives program, for
 7      programs of Statewide significance and for program oversight
 8      and administration, providing for small purchase procedures
 9      and repealing provisions relating to evaluation of private
10      investment opportunities.
11      The General Assembly of the Commonwealth of Pennsylvania
12   hereby enacts as follows:
13      Section 1.    The definitions of "community transportation
14   service" or "shared ride service," "community transportation
15   system," "local transportation organization," "operating
16   expenses" and "Public Passenger Transportation Performance
17   Report" in section 1503 of Title 74 of the Pennsylvania
18   Consolidated Statutes are amended and the section is amended by
19   adding definitions to read:
20   § 1503.   Definitions.
21      The following words and phrases when used in this chapter
 1   shall have the meanings given to them in this section unless the
 2   context clearly indicates otherwise:
 3      * * *
 4      "Class 1 transit entity."   A local transportation
 5   organization or transportation company, excluding PAAC,
 6   operating 1,000 or more transit vehicles in the peak period.
 7      "Class 2 transit entity."   A local transportation
 8   organization or transportation company, excluding SEPTA,
 9   operating more than 300 but less than 1,000 transit vehicles in
10   the peak period.
11      "Class 3 transit entity."   A local transportation
12   organization or transportation company, excluding SEPTA and
13   PAAC, operating 300 or less fixed-route transit vehicles in the
14   peak period serving an urbanized area. A class 3 transit entity
15   may also hold a class 4 designation for certain portions of its
16   service area for purposes of eligible funding.
17      "Class 4 transit entity."   A local transportation
18   organization or transportation company, excluding SEPTA and
19   PAAC, which serves a nonurbanized area and, during the 1990-1991
20   fiscal year, received or was approved to receive funding under
21   the act of February 11, 1976 (P.L.14, No.10), known as the
22   Pennsylvania Rural and Intercity Common Carrier Surface
23   Transportation Assistance Act. A class 4 transit entity may also
24   hold a class 3 designation for certain portions of its service
25   area for purposes of eligible funding.
26      * * *
27      "Community transportation service" or "shared ride service."
28   [Door-to-door] A demand response transportation system that is
29   available to the general public on a nonexclusive basis,
30   operates on a nonfixed route basis and charges a fare to all

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 1   riders. The term does not include exclusive ride taxi service,
 2   charter and sightseeing service, nonpublic transportation,
 3   school bus and limousine service.
 4      "Community transportation system."     A [person] public or
 5   nonprofit entity or organization that provides community
 6   transportation service designated by a county or other
 7   governmental entity and contracts with the Department of
 8   Transportation to receive revenue replacement funds.
 9      * * *
10      "Formula Grants for Rural Areas Program."     A public
11   transportation program, authorized by the Congress of the United
12   States and administered by the United States Department of
13   Transportation to assist states and local governmental
14   authorities in financing capital, operating, planning and job
15   access and reverse commute projects, associated with providing
16   public transportation in rural areas under 49 U.S.C. § 5311
17   (relating to formula grants for rural areas).
18      "Full level of performance."     The objective standard
19   established by the Federal Transit Administration or the
20   department, or both, for determining whether a capital asset is
21   in a state of good repair.
22      * * *
23      "Local transportation agency safety plan."     The plan to
24   improve the safety of all public transportation systems that
25   receive Federal and State financial assistance under 49 U.S.C. §
26   5329 (relating to public transportation safety program).
27      "Local transportation organization."     Any of the following:
28          (1)   A political subdivision or a public transportation
29      authority, port authority or redevelopment authority,
30      organized under the laws of this Commonwealth or pursuant to

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 1      an interstate compact or otherwise empowered to render,
 2      contract for the rendering or assist in the rendering of
 3      transportation service in a limited area in this
 4      Commonwealth, even though it may also render or assist in
 5      rendering transportation service in adjacent states.
 6          (2)   A legally existing and established nonprofit
 7      association that directly or indirectly provides public
 8      transportation service.
 9          (3)   A legally existing and established nonprofit
10      association of public transportation providers operating
11      within this Commonwealth.
12      * * *
13      "Operating expenses."   Total expenses required to continue
14   service to the public and to permit needed improvements in
15   service which are not self-supporting and otherwise for any
16   purpose in furtherance of public passenger transportation[,
17   including all State asset maintenance costs]. The term does not
18   include expenditures for capital projects unless specific
19   approval is provided by the Department of Transportation.
20      * * *
21      "PAAC."   The Port Authority of Allegheny County organized and
22   existing under the act of April 6, 1956 (1955 P.L.1414, No.465),
23   known as the Second Class County Port Authority Act.
24      * * *
25      "Performance target."   A quantifiable level of performance or
26   condition, expressed as a value for the measure to be achieved
27   for a fiscal year in order to reach a state of good repair.
28      "Preventive maintenance costs."     The activities, supplies,
29   materials, labor, services and associated costs required to
30   preserve or extend the functionality and serviceability of an

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 1   asset in a cost-effective manner, up to and including the
 2   current state of art for maintaining the asset.
 3      * * *
 4      "Public Passenger Transportation Performance Report."     An
 5   annual report completed by the Department of Transportation
 6   which shall include all of the following:
 7          (1)    Each local transportation organization's passengers,
 8      revenue vehicle miles, revenue vehicle hours and senior
 9      [passengers] ridership statistics for the most recently
10      available fiscal year.
11          (2)    Any other statistical information that the
12      Department of Transportation deems necessary.
13      * * *
14      "SEPTA."   The Southeastern Pennsylvania Transportation
15   Authority organization organized and existing under Chapter 17
16   (relating to metropolitan transportation authorities).
17      "State of good repair."   The condition in which a capital
18   asset is able to operate at a full level of performance.
19      * * *
20      "Transit asset management plan."    The federally required
21   transit asset management plan that includes an inventory of
22   capital assets, a condition assessment of inventoried assets, a
23   decision support tool and a prioritization of investments needed
24   to reach a state of good repair.
25      * * *
26      "Transportation development plan."    A planning tool prepared
27   by a transit entity used to analyze the need for transit in a
28   defined area, evaluate the services that are provided and
29   develop strategies to match the service to the identified
30   transit needs.

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 1      * * *
 2      Section 2.      Sections 1506(d)(2) and 1507(a)(6.1), (b) and (c)
 3   of Title 74 are amended to read:
 4   § 1506.    Fund.
 5      * * *
 6      (d)    Use of revenues.--Money in the fund shall be used by the
 7   department as follows:
 8             * * *
 9             (2)   for costs incurred directly by the department, not
10      to exceed the amount allocated to the department under this
11      chapter, in the administration of public passenger
12      transportation programs, including under this chapter; and
13             * * *
14   § 1507.    Application and approval process.
15      (a)    Application.--An eligible applicant that wishes to
16   receive financial assistance under this chapter shall submit a
17   written application to the department on a form developed by the
18   department, which shall include the following:
19             * * *
20             (6.1)    [A statement of policy outlining the basic
21      principles for the adjustment of fare growth to meet the rate
22      of inflation.] A statement of policy outlining the basic
23      policy for fare adjustments that may be needed to meet the
24      financial and performance target of the transit organization
25      as part of the transit organization's five-year financial
26      projections included in the planning study or transportation
27      development plan update to be completed under section
28      1513(e).
29             * * *
30      (b)    Approval and award.--Upon determining that an applicant

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 1   has complied with this chapter, applicable rules and regulations
 2   and any other requirement with respect to the financial
 3   assistance requested, the department may award financial
 4   assistance to the applicant. If the department awards financial
 5   assistance to the applicant, the department and the applicant
 6   shall enter into a financial assistance agreement setting forth
 7   the terms and conditions governing the use of the financial
 8   assistance and the timing of payment of the funds. The
 9   department, in collaboration with and duly considering and
10   responding to all feedback and recommendations received from
11   local transportation organizations, shall develop guidelines for
12   the application for and awarding of financial assistance under
13   this chapter and shall forward them to the Legislative Reference
14   Bureau for publication in the next available issue of the
15   Pennsylvania Bulletin.
16      (c)   Restriction on use of funds.--[Unless the department
17   grants the award recipient a waiver allowing the funds to be
18   used for a different purpose, financial assistance under this
19   chapter shall be used only for activities set forth under the
20   financial assistance agreement. The department's regulations
21   shall describe circumstances under which it will consider waiver
22   requests and shall set forth all information to be included in a
23   waiver request. The waiver request shall include a plan of
24   corrective action to demonstrate that the award recipient does
25   not have an ongoing need to use financial assistance funds for
26   activities other than those for which funds were originally
27   awarded. The duration of the waiver may not exceed the duration
28   of the plan of corrective action. The department shall monitor
29   implementation of the plan of corrective action. If the plan of
30   corrective action is not implemented by the local transportation

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 1   organization, the department shall rescind the waiver approval.]
 2   Financial assistance under this chapter shall be used only for
 3   activities provided under the financial assistance agreement
 4   unless the department grants the award recipient a waiver
 5   allowing the funds to be used for a different purpose. The
 6   department's regulations shall describe circumstances under
 7   which the department will consider waiver requests and shall
 8   provide all information to be included in a waiver request. The
 9   maximum duration of a waiver shall be until the financial need,
10   project or activity is completed that warranted the waiver and
11   may be further extended within the discretion of the department.
12      Section 3.     Section 1508 of Title 74 is amended by adding a
13   subsection to read:
14   § 1508.    Federal funding.
15      * * *
16      (e)    Subrecipients.--Rural public transportation funding
17   received by the department from the Formula Grants for Rural
18   Areas Program under 49 U.S.C. § 5311 (relating to formula grants
19   for rural areas) shall be distributed to local transportation
20   organizations that are subrecipients of Federal funds as
21   provided under this subsection. The following shall apply:
22             (1)   The department shall allocate not less than 70% of
23      the annual apportionment under 49 U.S.C. § 5311 that the
24      department receives as the direct recipient of funds from the
25      Formula Grants for Rural Areas Program to eligible Class 3
26      and Class 4 transit entities who have any form of rural
27      service area. The distribution may not include funding
28      received by the department under 49 U.S.C. § 5311(b)(3). The
29      department shall prepare an annual application to the Federal
30      Transit Administration for the full allocation of apportioned

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 1    funds. The department's application shall outline the
 2    operation allocations for eligible subrecipients and capital
 3    allocations for eligible capital expenses.
 4        (2)   Eligible applicants may apply for funds on an annual
 5    basis. The department shall maximize the use of funds under
 6    49 U.S.C. § 5311 for operating and shall notify applicants by
 7    April 1 of each year of the amount for their allocation.
 8        (3)   Eligible applicants may hold funds under section
 9    1513 (relating to operating program) in reserve up to an
10    amount that equals 100% of operating costs of the prior year.
11    Allocations under section 1513 shall not be reduced if
12    general State operating funds under section 1513 in reserve
13    are less than 100% of systemwide budget operating costs of
14    the prior year.
15        (4)   The Governor shall designate the department to
16    allocate and distribute the funds with proper oversight for
17    eligible activities under 49 U.S.C. § 5311 to ensure:
18              (i)    Priority for fixed route rural public
19        transportation agencies.
20              (ii)    The provision of proper technical assistance
21        for rural designated areas.
22              (iii)    Fair and equitable distribution of funds.
23              (iv)    State administration of projects required by
24        objectives under 49 U.S.C. § 5311.
25              (v)    Subject to paragraph (5), development of rules
26        to define the process for service expansion.
27        (5)   The following:
28              (i)    The department shall promulgate temporary
29        regulations that shall expire no later than July 1, 2026,
30        or upon promulgation of final regulations, whichever is

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 1           earlier. The department may promulgate temporary
 2           regulations not subject to:
 3                        (A)   Section 612 of the act of April 9, 1929
 4                 (P.L.177, No.175), known as The Administrative Code
 5                 of 1929.
 6                        (B)   Sections 201, 202, 203, 204 and 205 of the
 7                 act of July 31, 1968 (P.L.769, No.240), referred to
 8                 as the Commonwealth Documents Law.
 9                        (C)   Sections 204(b) and 301(10) of the act of
10                 October 15, 1980 (P.L.950, No.164), known as the
11                 Commonwealth Attorneys Act.
12                        (D)   The act of June 25, 1982 (P.L.633, No.181),
13                 known as the Regulatory Review Act.
14                 (ii)    The department's authority to adopt temporary
15           regulations under subparagraph (i) shall expire 90 days
16           after the effective date of this subparagraph.
17           Regulations adopted after this period shall be
18           promulgated as provided by law.
19           (6)   The department shall promulgate final-form
20      regulations no later than July 1, 2027.
21           (7)   The department shall retain up to 5% of funds under
22      section 1513 for discretionary use and distribution by the
23      secretary.
24           (8)   The department shall, as part of its annual report,
25      publish the amount of program funds under 49 U.S.C. § 5311
26      apportioned to the State, the amounts applied for and the
27      amounts distributed to each subrecipient.
28      Section 4.    Section 1512(a) and (b)(1) of Title 74 are
29   amended and subsection (b) is amended by adding a paragraph to
30   read:

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 1   § 1512.    Coordination and consolidation.
 2      (a)    Coordination.--Coordination is required in regions where
 3   two or more award recipients have fixed route, shared ride, or
 4   both, services or activities for which financial assistance is
 5   being provided under this chapter to assure that the services or
 6   activities are provided efficiently and effectively.
 7      (b)    Consolidation and mutual cooperation.--
 8             (1)   The department, [in consultation with] at the
 9      request of local governments and local transportation
10      organizations, shall study the feasibility of consolidation
11      and mutual cooperation among local transportation
12      organizations as a means of reducing annual expenses without
13      loss of service to the communities they serve. The study
14      shall examine the creation of service regions or mutual
15      cooperation pacts to determine whether either method would
16      reduce annual expenses. The feasibility analysis is to
17      include a cost-benefit analysis and operational analysis.
18             * * *
19             (4)   After the five-fiscal-year period under paragraph
20      (3), the department shall waive the match requirement under
21      sections 1513 and 1514 for an additional five fiscal years
22      for the local transportation organization's participation in
23      the recommended action under paragraph (2) in an amount not
24      to exceed the estimated annual net savings of the implemented
25      recommendations. At the end of the five-year period, the
26      local match shall begin at the preconsolidated level.
27      * * *
28      Section 5.     Sections 1513(a)(2), (d)(3) and (4), (e), (f),
29   (g) and (h) and 1514(a), (b), (e) introductory paragraph and
30   (2), (e.1) and (f) of Title 74 are amended to read:

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 1   § 1513.    Operating program.
 2      (a)    Eligible applicants.--The following may apply for
 3   financial assistance for operating expenses under this section:
 4             * * *
 5             (2)   A Commonwealth agency or instrumentality whose
 6      primary purpose is providing public transportation.
 7             * * *
 8      (d)    Local match requirements.--
 9             * * *
10             (3)   Eligible local matching funds shall consist only of
11      cash contributions provided by one or more municipalities or
12      counties. The amount of the match and the time period during
13      which the match must continue to be available shall be
14      specified in the financial assistance agreement. [Funding] At
15      the discretion of the local transportation organization,
16      funding provided by local and private entities, including
17      [advertising or naming rights] non-fare transit revenue, may
18      qualify as local matching funds to the extent they provide
19      for the cost of transit service that is open to the public.
20      The following shall not be considered local matching funds:
21                   (i)    Any form of transit operating revenue or other
22             forms of transit income provided by the local
23             transportation organization.
24                   (ii)   Funds used to replace fares.
25             (4)   A municipality in a metropolitan area which is a
26      member of a local transportation organization which receives
27      direct or indirect Federal funds is authorized to provide
28      annual financial assistance from current revenues to the
29      local transportation organization of which it is a member or
30      enter into a long-term agreement for payment of money to

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 1    assist in defraying the costs of operation, maintenance and
 2    debt service of the local transportation organization or of a
 3    particular public transportation project of a local
 4    transportation organization. The obligation of a municipality
 5    under an agreement pursuant to this paragraph shall not be
 6    considered to be a part of the indebtedness of the
 7    municipality, nor shall the obligation be deemed to impair
 8    the status of any indebtedness of the municipality which
 9    would otherwise be considered self-sustaining.
10    [(e)    Performance reviews.--
11           (1)   The department may conduct performance reviews of an
12    award recipient under this section to determine the
13    effectiveness of the financial assistance. Reviews shall be
14    conducted at regular intervals as established by the
15    department in consultation with the management of the award
16    recipient. After completion of a review, the department shall
17    issue a report that:
18                 (i)    highlights exceptional performance and
19           identifies any problems that need to be resolved;
20                 (ii)    assesses performance, efficiency and
21           effectiveness of the use of the financial assistance;
22                 (iii)    makes recommendations on follow-up actions
23           required to remedy any problem identified; and
24                 (iv)    provides an action plan documenting who should
25           perform the recommended actions and a time frame within
26           which they should be performed.
27           (2)   The department shall deliver the report to the
28    Governor, to the chairman and minority chairman of the
29    Transportation Committee of the Senate and to the chairman
30    and minority chairman of the Transportation Committee of the

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 1      House of Representatives. The department's regulations shall
 2      contain a description of the impact on both the amount of,
 3      and future eligibility for, financial assistance under this
 4      chapter based upon the degree to which the local
 5      transportation organization complies with the recommendations
 6      in the report. The department shall develop a list of best
 7      practices revealed by the reports issued under this
 8      subsection and shall post them on the department's Internet
 9      website.
10      (f)   Performance criteria.--Criteria used for the reviews
11   conducted under subsection (e) shall consist of passengers per
12   revenue vehicle hour, operating costs per revenue vehicle hour,
13   operating revenue per revenue vehicle hour, operating costs per
14   passenger and other items as the department may establish. The
15   department's regulations shall set forth the minimum system
16   performance criteria based upon comparison of the award
17   recipient to its past performance and to its peers that an award
18   recipient must satisfy.
19      (g)   Failure to satisfy minimum performance criteria.--
20            (1)   If a performance review conducted under subsection
21      (e) reveals that the performance of an award recipient's
22      transportation system has decreased compared to performance
23      determined through a prior review, the department may, upon
24      the written request of an award recipient, waive any
25      requirement for a reduction in the amount of financial
26      assistance to be awarded under this section for a reasonable
27      time period to allow the award recipient to bring the system
28      back to the required performance level. The award recipient
29      shall provide written justification for providing a time
30      period longer than two years. In order to obtain the waiver

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 1      for the period requested, the award recipient must do all of
 2      the following:
 3                  (i)    Develop an action plan to improve system
 4            performance that contains key measurable milestones. The
 5            action plan must be acceptable to the department and must
 6            be approved by the department in writing.
 7                  (ii)    Submit quarterly progress reports on the action
 8            plan to the department.
 9            (2)   The department shall review and evaluate the award
10      recipient's progress to determine if the system has improved.
11      If the system has improved, the award recipient will remain
12      eligible for full formula funding as determined under
13      subsection (c). If the system has not improved by the end of
14      the waiver period, the waiver will be withdrawn. Expenses
15      incurred by the award recipient as a result of the failure of
16      the award recipient's system to meet the minimum performance
17      criteria shall be borne by the award recipient.
18      (h)   Adjustments to minimum performance criteria.--Upon
19   written request of an award recipient, the department may adjust
20   the minimum performance criteria described in subsection (g) in
21   a given year if the performance of the award recipient's system
22   is adversely affected by circumstances which are beyond the
23   award recipient's control. Examples are labor strikes,
24   infrastructure failures and natural disasters. The request must
25   include the award recipient's reasons for seeking the
26   adjustment.]
27      (e)   Planning studies.--
28            (1)   Beginning January 1, 2026, the department may
29      require each award recipient to conduct an independent
30      planning study or transportation development plan update

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 1    every five years to evaluate the public transit services
 2    being funded under this section. The planning study shall
 3    include, but not be limited to, the following:
 4              (i)    A financial performance analysis of existing
 5        services and trends.
 6              (ii)    A customer satisfaction survey.
 7              (iii)    A five-year capital improvement plan,
 8        including a performance target consistent with the
 9        recipient's adopted transit asset management plan for
10        reaching a state of good repair.
11              (iv)    A five-year service plan based on customer and
12        community input and participation.
13              (v)    A five-year financial plan based on the adopted
14        service plan and levels of funding.
15              (vi)    An evaluation of safety and performance target
16        related to the recipient's adopted local transportation
17        agency safety plan.
18              (vii)    Other analysis as may be needed.
19        (2)   The department shall fund the planning studies
20    through a technical assistance grant to the award recipient
21    in full or in part and match Federal funds to conduct the
22    study.
23        (3)   The department may utilize consultants already under
24    contract or solicit independently or jointly with other
25    transit systems for a consultant to conduct the study in
26    compliance with all applicable Federal and State procurement
27    regulations.
28        (4)   The department shall deliver an executive summary of
29    the planning studies to the Governor, the chairperson and
30    minority chairperson of the Transportation Committee of the

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 1      Senate and the chairperson and minority chairperson of the
 2      Transportation Committee of the House of Representatives. The
 3      department shall develop a list of best practices documented
 4      by the studies conducted under this subsection and post the
 5      best practices and the executive summary on the department's
 6      publicly accessible Internet website.
 7      (f)    Performance criteria.--A performance target shall be
 8   developed by the recipient based on the current and projected
 9   trends in service and adopted by the recipient's governing
10   board. The department shall review and evaluate the progress of
11   the performance target to determine if the service has improved
12   or if the performance target needs adjusted.
13   § 1514.    Asset improvement program.
14      (a)    Eligible applicants.--
15             (1)   The following may apply for financial assistance for
16      improvement, replacement or expansion of capital projects
17      under this section:
18                   (i)    A local transportation organization.
19                   (ii)    An agency or instrumentality of the
20             Commonwealth engaged in public transportation service.
21                   (iii)    A [person] public or nonprofit entity or
22             organization responsible for coordinating community
23             transportation program services.
24                   (iv)    Any other [person] public or nonprofit entity
25             or organization that provides public transportation
26             services the department deems to be eligible.
27             (2)   The department and the local transportation
28      organization shall develop and maintain four-year and 12-year
29      plans that summarize the capital projects and financial
30      assistance commitments for each [applicant] local

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 1      transportation organization in accordance with the local
 2      transportation organization's adopted transit asset
 3      management plan and annual performance target. The department
 4      may enter into multiyear agreements to provide financial
 5      assistance for capital projects based upon cash flow and
 6      revenue projections for the fund. Each capital project shall
 7      be based on the transit asset management plan developed by
 8      the local transportation organization in collaboration with
 9      the department.
10      (b)   Applications.--In addition to information required under
11   section 1507 (relating to application and approval process), an
12   application for financial assistance under this section shall
13   include the following:
14            (1)    Evidence satisfactory to the department that the
15      proposed capital project is included in the first year of the
16      applicant's four-year capital plan, transit asset management
17      plan's performance target and its federally approved
18      transportation improvement program.
19            (2)    If an applicant is requesting financial assistance
20      for replacement of a capital project, evidence satisfactory
21      to the department that the capital project to be replaced has
22      exceeded the useful life criteria [as defined by the
23      department] in accordance with the applicant's transit asset
24      management plan's performance target. At its discretion, the
25      department may approve funding to replace a capital project
26      that does not exceed the useful life criteria if the
27      applicant provides documentation acceptable to the department
28      to justify the early replacement of the capital project.
29            [(3)    If the applicant is requesting financial assistance
30      for expansion of a capital project, evidence satisfactory to

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 1      the department that the applicant will have sufficient future
 2      annual operating funds to support the proposed expansion.
 3            (4)   Any other information required by the department,
 4      including a return on investment analysis or a life cycle
 5      cost analysis, or both.]
 6      * * *
 7      (e)   Priorities.--The award of [financial assistance under
 8   this section] discretionary funding under subsection (e.1)(4)
 9   shall be subject to the following set of priorities in
10   descending order of significance unless a compelling return on
11   investment analysis for a project in a lower category is
12   provided to and approved by the department:
13            * * *
14            (2)   Requests for funds required to match federally
15      approved capital projects [funded under 49 U.S.C. §§ 5307
16      (relating to urbanized area formula grants) and 5309
17      (relating to capital investment grants and loans) and other
18      federally approved capital projects].
19            * * *
20      (e.1)   [Distribution.--] Allocation and distribution
21   procedure.--During each fiscal year, capital project,
22   preventative maintenance costs and other program funds shall be
23   distributed to each transit organization on a monthly basis in
24   accordance with the formula specified in this section and used
25   strictly in accordance with the use specified in this section.
26   The department shall allocate financial assistance under this
27   section on a percentage basis of available funds each fiscal
28   year as follows:
29            (1)   [The local transportation organization organized and
30      existing under Chapter 17 (relating to metropolitan

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 1    transportation authorities) as the primary provider of public
 2    passenger transportation for the counties of Bucks, Chester,
 3    Delaware, Montgomery and Philadelphia shall receive 69.4% of
 4    the funds available for distribution under this section.]
 5    SEPTA shall receive 69.4% of the funds available for
 6    distribution under this section.
 7        (2)   [The local transportation organization organized and
 8    existing under the act of April 6, 1956 (1955 P.L.1414,
 9    No.465), known as the Second Class County Port Authority Act,
10    as the primary provider of public transportation for the
11    county of Allegheny shall receive 22.6% of the funds
12    available for distribution under this section.] PAAC shall
13    receive 22.6% of the funds available for distribution under
14    this section.
15        (3)   Other local transportation organizations organized
16    and existing as the primary providers of public passenger
17    transportation for the counties of this Commonwealth not
18    identified under paragraph (1) or (2) shall receive 8% of the
19    funds available for distribution under this section. The
20    department shall allocate the funds under this paragraph
21    among the local transportation organizations.
22        (4)   Notwithstanding paragraphs (1), (2) and (3) and
23    before distributing the funds under paragraph (1), (2) or
24    (3), the department shall set aside 5% of the funds available
25    for distribution under this section for discretionary use and
26    distribution by the secretary.
27        (5)   The department shall promulgate regulations to
28    provide that each year the department shall make available to
29    each local transportation organization under paragraph (3)
30    the local transportation organization's share of capital

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 1    funds based on the approved formula for the allocation of
 2    funds under this section distribution as provided under this
 3    title by April 30 of each year. Based upon local planning
 4    efforts and board-approved projects, the department shall
 5    make grants to a local transportation organization for the
 6    amount applied for by the local transportation organization.
 7    Excess funds for which a local transportation organization
 8    does not apply shall be placed in a fund for the department
 9    to distribute to eligible local transportation organizations
10    under paragraph (3).
11        (6)   On or before the fifth day of each month, the
12    Treasury Department shall certify to the department the total
13    amount then available for distribution and the department
14    shall make distribution of payments required under this
15    subsection on or before the 20th day of each month.
16        (7)   If, during any fiscal year, either the number of
17    vehicles operated by a local transportation organization or
18    transportation company or the area served by a local
19    transportation organization or transportation company changes
20    so that the local transportation organization or
21    transportation company meets the criteria for a different
22    transit entity class provided under section 1503 (relating to
23    definitions), on or before July 15 of the fiscal year which
24    follows the change and in each fiscal year thereafter, the
25    department shall reflect any change in the transit entity
26    class of the local transportation organization or
27    transportation company in the department certification for
28    that year and subsequent fiscal years. The following shall
29    apply:
30              (i)   In the department's calculation of the transit

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 1        entity shares under this section for each transit entity
 2        class required by section 1508(e) (relating to Federal
 3        funding) for the fiscal year following the change in a
 4        local transportation organization or transportation
 5        company's transit entity class and thereafter, the
 6        department shall include the amount of the transit entity
 7        shares under this section allocated to the local
 8        transportation organization or transportation company for
 9        the fiscal year prior to the change in the transit entity
10        class, in the transit entity shares under this section
11        for the new transit entity class of such a local
12        transportation organization or transportation company,
13        and shall delete an equal amount from the transit entity
14        shares under this section for the transit entity class
15        for which such a local transportation organization or
16        transportation company no longer meets the criteria in
17        the new fiscal year.
18              (ii)   No local transportation organization or
19        transportation company which has changed from one transit
20        entity class to another due to either an increase in the
21        number of vehicles operated or due to the most recent
22        Federal decennial census prepared by the United States
23        Census Bureau declaring the transportation organization
24        or transportation company's service area an urbanized
25        area shall receive less than the amount transferred on
26        the account by the department under this section.
27        (8)   No change in classification or distribution to a
28    Class 1, 2, 3 or 4 transit entity shall change, reduce, alter
29    or otherwise be done in a manner that would adversely impact
30    the distribution percentages under this section and amounts

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 1      that SEPTA and PAAC are entitled to under paragraphs (1) and
 2      (2).
 3      (f)    Bonding by award recipients.--With the approval of the
 4   department, an award recipient that is permitted by law to issue
 5   bonds may do so for the purpose of financing a [multiyear]
 6   single year or multiyear capital project, as applicable. The
 7   department shall enter into an agreement with the award
 8   recipient providing that payments of the awarded funds
 9   sufficient to satisfy requirements of the bonds issued be made
10   directly to the trustee of the bondholders until such time as
11   the bonds are retired.
12      Section 6.     Section 1515(a) of Title 74 is amended and
13   subsection (c) is amended by adding a paragraph to read:
14   § 1515.    New initiatives program.
15      (a)    Eligible applicants.--[Persons] A public or nonprofit
16   entity or organization eligible to apply for financial
17   assistance under section 1514 (relating to asset improvement
18   program) shall also be eligible to apply for financial
19   assistance for new or expansions of fixed guideway systems or
20   improvements of a corridor project designed to expedite bus
21   service under this section.
22      * * *
23      (c)    Source of funds and priorities.--
24             * * *
25             (3)   The department may develop and implement a pilot
26      program to test and evaluate new models of paying and
27      delivering shared ride and community transportation in
28      collaboration with existing public transit systems and other
29      transportation organizations and entities in this
30      Commonwealth with the goal of developing a sustainable and

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 1      need-based delivery and payment of services model.
 2      * * *
 3      Section 7.      Sections 1516(a)(3) and (d)(3)(iv), (4) and (5)
 4   and 1518 of Title 74 are amended to read:
 5   § 1516.    Programs of Statewide significance.
 6      (a)    General rule.--Money in the fund allocated for programs
 7   of Statewide significance shall be used by the department to
 8   support public transportation programs, activities and services
 9   not otherwise fully funded through the operating program,
10   capital program or asset improvement program. In addition to any
11   requirements contained in this section, applications must comply
12   with section 1507 (relating to application and approval
13   process). Programs of Statewide significance shall include:
14             * * *
15             (3)   Community transportation capital and service
16      stabilization. The department shall issue a notification of
17      the availability of funds for the programs under this
18      paragraph by March 1 of each year.
19             * * *
20      (d)    Community transportation.--
21             * * *
22             (3)   Financial assistance for service stabilization may
23      only be provided for the following purposes:
24                   * * *
25                   (iv)    Offsetting operating expenses that cannot be
26             covered by fare revenue due to emergencies declared by
27             the Governor or reauthorized by the General Assembly.
28                   * * *
29             (4)   The department shall give high priority to providing
30      financial assistance under this subsection as match for

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 1      Federal funding to support capital projects for community
 2      transportation systems[.] as long as the Federal funding
 3      being matched is not reducing the amount of Federal funding
 4      available to support existing federally funded public
 5      transportation direct or subrecipients.
 6             [(5)   The department shall conduct a study to evaluate
 7      the effectiveness and efficiency of community transportation
 8      service delivery as it relates to human service programs. The
 9      Department of Public Welfare, the Office of the Budget and
10      the Department of Aging and other appropriate Commonwealth
11      agencies identified by the department shall participate in
12      the study. Within two years following the effective date of
13      this section, these agencies shall make recommendations to
14      the Governor and the Majority and Minority chairpersons of
15      the Transportation Committee of the Senate and the Majority
16      and Minority chairpersons of the Transportation Committee of
17      the House of Representatives for improving coordination and
18      efficiency of human services and community transportation.]
19      * * *
20   § 1518.    Program oversight and administration.
21      The department is authorized to use available money in the
22   fund to cover the costs incurred by the department in
23   administering all of its public passenger transportation funding
24   programs, including those established under this chapter, and
25   incurred in the carrying out of its responsibilities with
26   respect to the programs[.], not to exceed the amount authorized
27   to the department under this chapter. The department shall
28   annually produce a report on the department's publicly
29   accessible Internet website detailing the amount of funding
30   received for administering the program, total funding received

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 1   and total funds disbursed under each program to be funded in the
 2   entire program.
 3      Section 8.     Title 74 is amended by adding a section to read:
 4   § 1518.1.    Small purchase procedures.
 5      A local transportation company or transportation organization
 6   may use small purchase procedures to acquire services, supplies
 7   or other property valued at more than the micro-purchase
 8   threshold but less than the Federal simplified acquisition
 9   threshold as defined under 2 CFR 200.1 (relating to
10   definitions).
11      Section 9.     Section 1520 of Title 74 is repealed:
12   [§ 1520.    Evaluation of private investment opportunities.
13      (a)     Study.--A local transportation organization receiving
14   funding in an amount greater than $5,000,000 annually under this
15   chapter shall undertake a study to evaluate the feasibility of
16   utilizing partnerships with private service providers and
17   financial partners as a method to operate and finance new or
18   existing services. Within one year following the effective date
19   of this section, each local transportation organization required
20   to evaluate private participation under this section shall
21   submit a report to the secretary and the majority chairperson
22   and minority chairperson of the Transportation Committee of the
23   Senate and the majority chairperson and minority chairperson of
24   the Transportation Committee of the House of Representatives.
25      (b)     Report.--The report shall, at a minimum, include the
26   results of the evaluation, a determination of the viability of
27   greater private partnering and any recommendations about how to
28   achieve greater participation from the private sector.
29      (c)     Preclusion.--Nothing in this section shall preclude a
30   local transportation organization receiving less than $5,000,000

20250SB0597PN0761                    - 26 -
1   annually under this chapter from making an evaluation of greater
2   private involvement in their operations.]
3      Section 10.   This act shall take effect in 60 days.




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