This week, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing titled “Advancing Public Transportation in Small Cities and Rural Places under the Bipartisan Infrastructure Law.” Held under the Subcommittee on Housing, Transportation, and Community Development, this was a short hearing, with only the chair and ranking member of the subcommittee, Sen. Tina Smith (D-MN) and Sen. Mike Rounds (R-SD) asking questions in person and Sen. Jon Ossoff (D-GA) asking questions virtually.

Witnesses included:

• Ryan Daniel, Chief Executive Officer, St. Cloud Metro Bus
• Scott Bogren, Executive Director, Community Transportation Association of America
• Baruch Feigenbaum, Senior Managing Director, Transportation Policy, Reason Foundation

Rural transit agencies face unique challenges, often very different from their urban counterparts. All mentioned the variety of services that rural transit provides: while some agencies have fleets of 50 buses, others are much smaller and only have five cars or small vans. Many rural agencies also utilize on-demand transit: Bogren claimed these are often more efficient for small agencies as these services can increase service levels and the number of people served while lowering overhead costs as compared to running fixed routes.

With smaller fleets, large geographic areas, a sparse concentration of customers, and fewer staff, rural agencies face many challenges. One of the biggest issues witnesses and Senators focused on was staff capacity constraints that exist at small transit agencies. While Sen. Smith mentioned resources DOT makes available, such as hosting webinars and taking phone calls from rural agency staff, many mentioned the capacity crunch that small agencies still have as staff wear many hats.

One solution Feigenbaum proposed was to lower rural agencies’ data reporting requirements. Currently, all transit agencies must report data in up to 21 different categories to the FTA. While large agencies have adequate staff, Feigenbaum argued this requirement places an inordinate burden on small agencies. Instead, he recommended rural agencies be allowed to provide a minimum amount of information, such as farebox recovery ratio, passenger counts, and funding data. This way, he claimed, agencies would report the essential information, but the process would not be overly onerous.

Because of these staff capacity pressures, both Senators and witnesses commended FTA’s recent Notice of Funding Opportunity (NOFO) that streamlined the grant application process for two bus grant programs. This NOFO combined the regular Bus and Bus Facilities grant program (under which diesel, alternative-fuel, hybrid, and zero-emission buses are all eligible) with the Low or No Emission bus grant program (only hybrids, alternative fuels, and zero-emission are eligible). Thus, agencies without large or dedicated grant writer staff only must write one application, cutting down on redundancies.

In addition to difficulties in applying for federal funding, all witnesses agreed on the challenges small transit agencies face in finding local funding matches to satisfy the current 50/50 federal/local split in operating expenses. Both Sen. Smith and Sen. Rounds promoted their Investments in Rural Transit Act of 2021 (S.267), which would increase the federal share of operating costs to 80 percent in rural areas, though this has only been introduced in the Senate. Feigenbaum recommended looking to more local funding sources instead of relying on federal funding. In his written testimony, he mentioned the North Carolina structure, in which the state bundles federal and state rural transit funding onto one Rural Operating Assistance Program allocated via two formulae, one tracking the federal Elderly and Disabled Transportation Assistance Program and the other more general. In that way, the state can supplement rural operating assistance for each county as it judges necessary.

Rural agencies are also struggling with driver shortages. While some agencies’ ridership has returned to near pandemic levels, said Bogren, agencies are having trouble filling the drivers’ seats. Bogren gave an example of when he visited one rural transit agency CEO, and when he arrived the staff apologized, saying she was out driving a van that day. Many rural systems rely on volunteer drivers, and these too have declined. One solution Bogren proposed was simplifying the process of obtaining a Commercial Driver’s License (CDL), as law requires drivers possess a CDL for vans designed for more than 16 people. The Biden Administration has also worked to expedite the CDL process through their November 2021 Trucking Action Plan, which expanded apprenticeship programs, connected veterans to trucking careers, and gave states more power to issue CDLs. In February 2022, Congress also introduced two bipartisan bills aimed at accelerating the CDL process. The LICENSE Act (Licensing Individual Commercial Exam-takers Now Safely and Efficiently Act) (H.R. 6567 and S.3556) would allow out-of-state and third-party training and permit those with a CDL learner permit to drive if accompanied by CDL-holder in the truck. The Transportation Security Administration Security Threat Assessment Application Modernization Act (H.R.6571) will reduce fees and streamline the application process for commercial drivers applying for several TSA authorizations.

Two final issues mentioned revolve around rolling stock. First, Bogren spoke about supply chains’ impact on vehicle procurement. He noted that small transit agencies have recently been quoted with long waiting periods due to high demand for small chassis. For van and small bus delivery, he said in the hearing that some agencies have been quoted at a 48-month timeframe, and in his written testimony he cites three years. Particularly with new IIJA money, rural agencies are ready to purchase new vehicles. Yet, a four-year delivery headway is steep, particularly as witnesses noted that many rural fleets are already past their useful life.

In addition, Feigenbaum mentioned the problems with Buy America (BA) requirements. On average, he stated, BA provisions are a big part of the reason why U.S. transit agencies pay 32 percent more for transit railcars than do providers in peer nations. (At least according to the study cited on page 18 of this CRS report.) He proposed lessening BA mandates for transit vehicles.