Federal and State Funding
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Federal, state, and local revenues are used to fund the transportation network. As the County Transportation Commission and the Regional Transportation Planning Agency (RTPA), RCTC is responsible for planning, coordinating, and administering federal, state, and local funds to enhance the region’s transportation network by working with the county, cities, and transit operators to maximize available funding sources.


Federal Funds

Federal funds are either authorized by legislation for a specific length of time or appropriated annually by Congress.  The current authorization bill is the Moving Ahead for Progress in the 21st Century Act (MAP-21) which was signed into law in July 2012 for fiscal years (FY) 2013 and 2014 and has been extended through continuing resolutions.  Funding for most of MAP-21 comes from the Highway Trust Fund (HTF).  The HTF is comprised of the Highway Account, which funds highway and intermodal programs, and the Mass Transit Account (MTA).  Funds are derived from the federal gas tax rate, which are 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel.  Of this amount, 15.44 cents is deposited into the Highway Account; 2.86 cents in the Mass Transit Account; and 0.1 cents into the Leaking Underground Storage Tank Trust Fund. 

The U.S. Department of Transportation (DOT) is responsible for keeping the traveling public safe and secure, increase mobility, and ensure the transportation system contributes to the nation’s economic growth.  The Federal Highway Administration (FHWA) and the Federal Transit Administration (FTA) are the two major DOT agencies that RCTC and the local agencies work with in conjunction with the State of California Department of Transportation (CALTRANS) to obtain federal funds.  Funds from FHWA and FTA are allocated to state Departments of Transportation (DOTs), Metropolitan Planning Organizations (MPOs), and transit operators based on statute for each program.

State Funds

A large portion of transportation funds in California are collected through the State Fuel Excise Tax revenues which are divided between the State Highway Account and local entities according to a statutory formula and relief of transportation General Fund obligation debt.  California currently collects about 42.35 cents per gallon on gasoline and 39.38 cents per gallon on diesel fuel. 

A portion of the statewide sales tax of 7.50% also provides revenues and is earmarked for the Transportation Development Act (TDA) and Public Transportation Account (PTA).  The TDA was established in 1971 and allows each county to impose a 0.25% sales tax for transportation purposes through the Local Transportation Fund (LTF).  The revenue is collected by the State Board of Equalization and is distributed to each county based on a pro rata basis.  The PTA provides funding for local transit through the sales tax on diesel fuel, which adds 1.7% on top of the base sales tax of 7.50%.

Other revenues include truck weight fees and motor vehicle license fees.  Truck weight fees are collected from vehicle fees based on the gross weight of commercial vehicles.  These fees are deposited into the State Highway Account and transferred onto the General Fund to pay for transportation bond debt.  Motor vehicle licenses fees such as vehicle license, registration, and driver license fees are allocated to the California Highway Patrol and the Department of Motor Vehicles for traffic law enforcement and regulations. 


MAP-21 guaranteed that each state would receive a minimum return of 95 percent of the amount of federal excise tax revenues that it contributes to the Highway Account.  Under MAP-21, FHWA programs were consolidated into six core programs:  National Highway Performance Program (NHPP), Surface Transportation Program (STP), Highway Safety Improvement Program (HSIP), Congestion Mitigation & Air Quality Improvement Program (CMAQ), Metropolitan Planning (PL) Funds, and Transportation Alternatives. 

National Highway Performance Program

The purposes of the NHPP are (1) to provide support for the condition and performance of the National Highway System (NHS); (2) to provide support for the construction of new facilities on the NHS; and (3) to ensure that investments of Federal-aid funds in highway construction are directed to support progress toward the achievement of performance targets established in a State's asset management plan for the NHS.

Surface Transportation Program

The STP is intended to fund a wide range of transportation projects from capital improvements to planning activities. Projects previously approved for STP funds include freeway interchanges, roadway widening, signal installations, road rehabilitations, and planning studies.

Highway Safety Improvement Program

HSIP provides funds to reduce traffic fatalities and serious injuries on all public roads, including non-State-owned public roads and roads on tribal lands. The HSIP requires a data-driven, strategic approach to improving highway safety on all public roads that focuses on performance.

Congestion Mitigation and Air Quality

CMAQ funds are targeted at transportation projects that benefit both congestion and air quality. Projects must undergo an air quality analysis demonstrating emissions reductions. In general, projects that add capacity are not eligible under this program. Projects previously approved for CMAQ funds include the purchase of transit vehicles, High Occupancy Vehicle (HOV) lanes, rail stations, and signal interconnects.

Metropolitan Planning Funds

Planning funds are distributed to the state DOTs to Metropolitan Planning Organizations (MPOs) to conduct planning activities that establish a cooperative, continuous, and comprehensive framework for making transportation investment decisions in metropolitan areas.

Transportation Alternative Program (TAP)

The TAP provides funding for programs and projects defined as transportation alternatives, including on- and off-road pedestrian and bicycle facilities, infrastructure projects for improving non-driver access to public transportation and enhanced mobility, community improvement activities, and environmental mitigation; recreational trail program projects; safe routes to school projects; and projects for planning, designing, or constructing boulevards and other roadways largely in the right-of-way of former Interstate System routes or other divided highways.  In California, the TAP is used to fund the Active Transportation Program (ATP) that is administered by the California Transportation Commission and Caltrans.


Under MAP-21, FTA consolidated certain programs and repealed others.  The various formula and discretionary programs are as follows:

Metropolitan & Statewide Nonmetropolitan Planning (Sections 5303, 5304, 5305) 

Provides funding and procedural requirements for multimodal transportation planning in metropolitan areas and states that is cooperative, continuous, and comprehensive, resulting in long-range plans and short-range programs of transportation investment priorities. The planning programs are jointly administered by FTA and FHWA, which provides additional funding.

Urbanized Area Formula Grants (Section 5307 & 5340)

Grant funds used for capital investment and public transit operating assistance in urban areas with populations above 50,000.

Fixed Guideway Capital Investment Grants (Section 5309)

Provides funds for new and expanded rail, bus rapid transit, and ferry systems that reflect local priorities to improve transportation options in key corridors.    

Enhanced Mobility of Seniors & Individuals with Disabilities (Section 5310)

This is a formula grant program that is intended to enhance mobility for seniors and persons with disabilities by providing funds for programs to serve the special needs of transit-dependent populations beyond traditional public transportation services and Americans with Disabilities Act (ADA) complementary paratransit services (AKA Dial-A-Ride).  Section 5310 funds are awarded through a statewide competition. A Local Review Committee in each county quantitatively evaluates all applications submitted for its area, ranks them, and submits the scores to Caltrans for the statewide competition.

Rural Area Formula Grants (Section 5311)

This program provides capital, planning, and operating assistance to states to support public transportation in rural areas with populations less than 50,000, where many residents often rely on public transit to reach their destinations. 

Research, Development, Demonstration, and Deployment Projects (Section 5312)

To support research activities that improve the safety, reliability, efficiency, and sustainability of public transportation by investing in the development, testing, and deployment of innovative technologies, materials, and processes; carry out related endeavors; and to support the demonstration and deployment of low-emission and no-emission vehicles to promote clean energy and improve air quality.

Technical Assistance and Standards Development (Section 5314)

To provide technical assistance to the public transportation industry and to sponsor the development of voluntary and consensus-based standards to more effectively and efficiently provide transit service, as well as support the improved administration of federal transit funds.

Human Resources and Training (Section 5322)

Under this new program, FTA may make grants or enter into contracts for human resource and workforce development programs as they apply to public transportation activities. Such programs may include:

Employment training;

An outreach program to increase minority and female employment in public transportation activities;

Research on public transportation personnel and training needs; and

Training and assistance for minority business opportunities.

Transit Asset Management (Section 5326)

This section establishes new requirements for transit asset management by FTA’s grantees as well as new reporting requirements to promote accountability. The goal of improved transit asset management is to implement a strategic approach for assessing needs and prioritizing investments for bringing the nation’s public transit systems into a state of good repair.

Public Transportation Emergency Relief Program (Section 5324)

This program helps states and public transportation systems pay for protecting, repairing, and/or replacing equipment and facilities that may suffer or have suffered serious damage as a result of an emergency, including natural disasters such as floods, hurricanes, and tornadoes. The program also improves coordination between U.S. DOT and the Department of Homeland Security (DHS) to expedite assistance to public transit providers in times of disasters and emergencies.

State Safety Oversight Program (Section 5329(e))

MAP-21 grants FTA the authority to establish and enforce a new comprehensive framework to oversee the safety of public transportation throughout the United States as it pertains to heavy rail, light rail, buses, ferries, and streetcars. The law requires, among other things, that FTA update the State Safety Oversight (SSO) program to ensure that rail transit systems are meeting basic, common-sense safety requirements. The law also includes important new safety provisions for bus-only operators. FTA will implement the new law in consultation with the transit community and the U.S. Department of Transportation (DOT) Transit Rail Advisory Committee for Safety (TRACS), which has been working since September of 2010 to help guide this effort.

Alcohol and Control Substances Testing (Section 5331)

This program maintains authority for the U.S. Secretary of Transportation to establish a program that requires grantees to conduct pre-employment, reasonable suspicion, random, and post-accident testing of public transportation employees responsible for safety-sensitive functions.

State of Good Repair (Section 5337)

A new formula-based State of Good Repair program is FTA’s first stand-alone initiative written into law that is dedicated to repairing and upgrading the nation’s rail transit systems along with high-intensity motor bus systems that use high-occupancy vehicle lanes, including bus rapid transit (BRT). These funds reflect a commitment to ensuring that public transit operates safely, efficiently, reliably, and sustainably so that communities can offer balanced transportation choices that help to improve mobility, reduce congestion, and encourage economic development.

Bus and Bus Facilities (Section 5339)

Provides capital funding to replace, rehabilitate and purchase buses and related equipment and to construct bus-related facilities.

Bus Testing Facilities (Section 5318)

Provides for an FTA-funded bus testing facility where all new models purchased using FTA capital assistance must be tested to meet performance standards for safety, structural integrity, reliability, performance (including braking performance), maintainability, emissions, noise, and fuel economy.

Transit-Oriented Development Planning Pilot

Provides funding to advance planning efforts that support transit-oriented development (TOD) associated with new fixed-guideway and core capacity improvement projects. TOD focuses growth around transit stations to promote ridership, affordable housing near transit, revitalized downtown centers and neighborhoods, and encourage local economic development.


Regional Improvement Program

The State Transportation Improvement Program (STIP) is developed and approved by the California Transportation Commission (CTC) by April of every even year. Each county transportation agency in the state is responsible for programming projects on or off the state highway system with Regional Improvement Program (RIP) funds, which represent 75% of the total STIP funds available for project programming. Eligible projects include capital improvement projects (e.g. interchange improvements, freeway and arterial widening, commuter rail stations, etc.) and planning and rideshare activities.

SB 821 Bicycle and Pedestrian Facilities Program

Each year 2% of the Local Transportation Fund (LTF) revenue is made available for use on bicycle and pedestrian facility projects through the Commission's SB 821 Program. All of the cities and the county of Riverside are notified of the SB821 program estimate of available funding and are requested to submit project proposals. Eligible projects include sidewalks, access ramps, bicycle facilities, and bicycle plan development.  A Call for Projects is issued biennially in February and funds are allocated each June. An evaluation committee typically reviews and ranks the projects based on evaluation criteria approved by the Commission. The evaluation committee composed of the Technical Advisory Committee makes recommendations for projects and funding award amounts to the Commission for their final approval. 

Active Transportation Program (ATP)

ATP was created to encourage increased use of active modes of transportation, such as biking and walking. The ATP consolidates various transportation programs including the federal Transportation Alternatives Program, state Bicycle Transportation Account, and federal and state Safe Routes to School programs into a single program to:

  • Increase the proportion of biking and walking trips,
  • Increase safety for non-motorized users,
  • Increase mobility for non-motorized users,
  • Advance the efforts of regional agencies to achieve greenhouse gas reduction goals,
  • Enhance public health, including the reduction of childhood obesity through the use of projects eligible for Safe Routes to Schools Program funding,
  • Ensure disadvantaged communities fully share in program benefits (25% of program), and
  • Provide a broad spectrum of projects to benefit many types of active transportation users.

RCTC member agencies are eligible to compete at the statewide level for ATP funds and at the MPO level through the Southern California Association of Governments