Funding Programs

The following summaries provide brief descriptions of transportation funding program categories included in the TIP documents and the specific types of projects funded in the various categories. 

How are Transportation Projects Funded?

Congestion Mitigation and Air Quality Improvement Program

Also referred to as CMAQ or Category 5, these funds are intended for projects that contribute to improved air quality. With a few exceptions, CMAQ-funded projects must have a demonstrable air quality benefit.

Examples of projects include:

  • intersection and signal system improvements
  • park-and-ride lots
  • high occupancy vehicle lanes
  • vanpool and rideshare programs
  • incident detection and response programs
  • bicycle and pedestrian facilities
  • conversion of public vehicles to alternative fuels/clean vehicles
  • transit system improvements 

Surface Transportation Block Grant Program 

Also referred to as STBG, or Category 7 funds (and previously called Surface Transportation Program-Metropolitan Mobility or STP-MM), these funds are designed to fund projects that contribute to improved surface/ground mobility in the transportation system. Generally, this funding category is designed to fund mobility improvements within the transportation system.

Examples of eligible projects include:

  • interchange projects
  • roadway widenings
  • construction of new arterials
  • bottleneck removal projects
  • construction of high occupancy vehicle lanes
  • installation of intelligent transportation system infrastructure

Carbon Reduction Program

The Carbon Reduction Program (CRP), established by the Bipartisan Infrastructure Law (BIL), provides funds for projects designed to reduce transportation emissions from on-road highway sources.

Examples of eligible projects include:

  • operating or establishing traffic monitoring, management, and control
  • on- and off-road trail facilities for pedestrians, bicyclists and other nonmotorized forms of transportation
  • advanced transportation and congestion management technologies
  • energy-efficient replacements for street lighting and traffic control devices
  • development of infrastructure-based intelligent transportation systems, capital improvements and installation of vehicle-to-infrastructure communications equipment
  • carbon reduction strategy development
  • strategy design to support congestion pricing, shifting transportation demand to nonpeak hours or other transportation modes, increasing vehicle occupancy rates, or otherwise reducing demand for roads
  • efforts to reduce environmental or community impacts of freight movement
  • support for deployment of alternative fuel vehicles, including electric vehicle charging infrastructure or hydrogen, natural gas, or propane vehicle fueling infrastructure; and purchase or lease of zero-emission construction equipment and vehicles
  • diesel engine retrofit
  • improvement to traffic flow without construction for new capacity

Category 2 Funds

Category 2 addresses mobility and added capacity projects on urban corridors to mitigate traffic congestion, as well as traffic safety and roadway maintenance or rehabilitation. Projects must be located on the state highway system.

Examples of project types include:

  • roadway widening (freeway and non-freeway)
  • interchange improvements
  • roadway operational improvements

Transportation Set-Aside Funds

Transportation Alternatives (TA) Set-Aside Program funds are used for infrastructure-related projects which provide safe routes for non-motorized transportation.

Funds may be awarded for the following types of projects:

  • construction of sidewalks
  • bicycle infrastructure
  • pedestrian and bicycle signals, lighting, or other safety-related infrastructure
  • projects to achieve compliance with the Americans with Disabilities Act (ADA)

Regional Toll Revenue (RTR)

Regional Toll Revenue funds are an innovative funding source that was initially secured through an agreement between the Regional Transportation Council (RTC) and the North Texas Tollway Authority (NTTA). In exchange for the opportunity to construct, operate, and maintain the 26-mile SH 121 toll road (Sam Rayburn Tollway) for 52 years, NTTA paid the region a $3.2 billion concession fee. The RTC used these funds to expedite more than 200 transportation projects. Additionally, the region added $200 million to the RTR program in July 2010, when NTTA agreed to build and maintain State Highway 161 in western Dallas County, an extension of the President George Bush Turnpike (PGBT) from SH 183 to Interstate Highway 20. RTR Funds continue to be created from other priced facilities.


RTC/Local funds are another innovative funding source secured through exchange of federal funds for local funds on specific projects. These funds are traditionally used for air quality, planning, federally ineligible, and non-traditional projects.

Transportation Development Credits

Transportation Development Credits, or TDCs, are Federal Highway Administration (FHWA) toll credits. They can serve as a substitute for the required cash match to federal funds that are programmed on a project. They are earned by states and metropolitan planning organizations (MPOs) when toll revenues are used to fund capital projects on public highways within their boundaries. Additional information about TDCs can be found here.

State Funding Categories

Category 1 Funds: Preventative Maintenance and Rehabilitation

Preventive maintenance and rehabilitation on the existing state highway system, including:

  • Preventive maintenance ‐ minor roadway modifications to improve operations and safety; and
  • Rehabilitation ‐ installation, rehabilitation, replacement, and maintenance of pavement, bridges, traffic control devices, traffic management systems, and ancillary traffic devices. Funds are formula allocated.

Category 6 Funds: Structures Replacement and Rehabilitation

Replacement or rehabilitation of eligible bridges on and off the state highway system (functionally obsolete or structurally deficient). Replacement of existing highway‐railroad grade crossings, and the rehabilitation or replacement of deficient railroad underpasses on the State Highway System. Specific locations evaluated by a cost‐benefit derived index.

Category 8 Funds: Safety

Safety-related projects both on and off the State Highway System including the federal Highway Safety Improvement Program, Railway‐Highway Crossing Program, Safety Bond Program, and High-Risk Rural Roads Program.

Category 11 Funds: District Discretionary

Miscellaneous projects on the State Highway System selected at the TxDOT District’s discretion. This category also includes funding for facilities that are affected by the energy sector (e.g., activities related to the Barnett Shale in North Texas).

Category 12 Funds: Strategic Priority

Projects with specific importance to the state including those that generally promote economic opportunity, increase efficiency on military deployment routes or retain military assets in response to the federal military base realignment and closure reports, maintain the ability to respond to both man-made and natural emergencies, and provide pass‐through toll financing for local communities.

Proposition 1 Funding

Projects eligible for Proposition 1 funds include construction, maintenance, and right-of-way acquisition for public roads, except for toll roads.  The Texas Department of Transportation (TxDOT) and the Regional Transportation Council (RTC) share the selection authority (in the Dallas-Fort Worth region) for Proposition 1 funding. This funding is currently allocated through the Regional 10-Year Plan. Additional Proposition 1 Funding information is available here.

Proposition 7 Funding

Proposition 7 funds can be used for projects to construct, maintain, or acquire rights-of-way for public roadways other than toll roads. This funding is currently allocated to existing TxDOT funding categories when it becomes available.  Additional information can be found on TxDOT's website.

Transit Funding Categories

Section 5307 - Urbanized Area Formula Program (UAFP)

Section 5307 funds are designated for public transit providers to cover eligible project costs including capital, planning, administrative, and limited operating costs. Two percent of funds are set aside annually to award competitively to transit projects that support low-income individuals.

Examples of transit projects funded under this program include:

  • vehicle acquisition
  • capital cost of contracting
  • transit planning studies
  • operating assistance
  • park-and-ride facilities
  • transit stations

Section 5309 - Fixed Guideway Capital Investment Grants Program

The Fixed Guideway Capital Investment Grants Program (49 US §5309) provides capital assistance for new and expanded fixed guideway systems, such as rail and bus rapid transit services. This is a discretionary program whereby applicants much apply directly to the United States Department of Transportation for funding.  More information is available here.

Section 5310 - Enhanced Mobility of Seniors and Individuals with Disabilities Program

Section 5310 program funds are utilized by fulfilling existing commitments to local providers, and then awarding any remaining funds competitively. Eligible project costs include capital, planning, administration, and limited operating costs.

Examples of transit projects funded under this program include:

  • vehicle acquisition
  • purchase of service
  • operating assistance to cover services offered beyond the requirements of the Americans with Disabilities Act
  • mobility management

Section 5311 - Nonurbanized Area Formula Program

The Nonurbanized Area Formula Program (49 US §5311) funds public transportation in areas with populations less than 50,000. The goal of the program is to enhance access to health care, shopping, education, employment, and recreation services in nonurbanized areas. Funds are apportioned to the states by formula, and may be used for planning, capital, operating, job access and reverse commute projects, and the acquisition of public transportation services. In Texas, the funds are allocated and awarded by the Texas Transportation Commission (TTC).

Section 5337 - State of Good Repair Grants

Section 5337 program funds are only available to agencies that have operated rail fixed guideway and high intensity motor bus systems for at least seven years (from initial National Transit Database report date). The funds are used to maintain, rehabilitate or replace system equipment and vehicles to maintain safe, reliable, and efficient public transit services.

Examples of projects include:

  • vehicle or rail/track replacement or overhaul
  • facility rehabilitation
  • preventive maintenance

Section 5339 - Grants for Bus and Bus Facilities

Section 5339 program funds are only eligible for capital projects related to transit vehicles and equipment. As federal funds are made available through transportation funding bills, the MPO staff must decide how much of this funding should be programmed through the next funding initiative and how much will be needed in a cost overrun/future needs pool.

Examples of eligible projects include:

  • project administration
  • the acquisition of vehicles and related equipment (e.g., radios, fare boxes, and shop and garage equipment)
  • construction or rehabilitation of bus-related facilities (e.g., bus malls, transportation centers)
  • bus maintenance and administrative facilities