FTA Section 5310 for NEMT providers: who gets the money and how private operators take part

What Section 5310 is

Section 5310 is the Federal Transit Administration’s formula program for transportation that serves seniors and people with disabilities where existing service is unavailable, insufficient, or inappropriate. The law behind it is 49 U.S.C. 5310, and the program’s full name is Enhanced Mobility of Seniors and Individuals with Disabilities.

The money is split by formula. Sixty percent goes to large urbanized areas of 200,000 people or more, 20 percent to small urbanized areas, and 20 percent to rural areas, each in proportion to its count of seniors and people with disabilities. FTA apportioned $470,117,209 nationwide for fiscal year 2026. Each year’s money stays available for three federal fiscal years, so the 2026 funds must be obligated by September 30, 2028.

A “senior” under this program is someone 65 or older. The money does not go straight to transportation companies. It moves through a chain of agencies, and a private NEMT company has to find its place in that chain.

Who receives the money

Section 5310 has two layers of grantees. Knowing which layer you are dealing with tells you who makes the funding decision.

The statute adds a limit for the core capital share. A recipient may pass that money to a private nonprofit, or to a government authority that the state approved to coordinate services or that certifies no nonprofit is readily available. Operators of public transportation can receive only nontraditional project funds.

Each direct recipient describes how it picks projects in a state or program management plan. Selection can be by formula, by competition, or at the agency’s discretion. The plan is the first document to request, because it tells you whether private operators appear anywhere in the process.

What the grants pay for

FTA sorts eligible work into traditional and nontraditional projects. At least 55 percent of each area’s apportionment must go to traditional projects, which are capital projects built around the needs of seniors and people with disabilities.

Federal money can cover as much as 80 percent of capital and planning costs and half of operating costs. The capital share rises to 85 percent for vehicles bought to comply with the ADA or the Clean Air Act. Up to 10 percent of an apportionment can pay for program administration at 100 percent federal share.

The local match does not have to be cash from a city budget. The circular accepts revenue from service contracts, private donations, documented in-kind contributions, and money from other federal programs outside the Department of Transportation, such as aging, medical, and rehabilitation programs. That is one reason 5310 projects often sit alongside Area Agency on Aging transportation contracts.

Four ways a private NEMT company takes part

A company counts as a subrecipient only if its shared-ride service is open to everyone, or to a whole group of riders defined by age, disability, or income. Most NEMT companies run prearranged trips for brokers and facilities instead, so they reach 5310 money through one of these four routes.

1. Contracted service

This is the most common route. The statute makes the acquisition of public transportation services an eligible capital expense, and the circular says both the capital and operating costs of contracted service count. A county, a transit agency, or a nonprofit can win 5310 money and pay your company to carry its riders rather than purchase vehicles. Contracted service can cover more than one year, and it can count toward the 55 percent traditional share when an eligible subrecipient carries out the project and it appears in the coordinated plan.

The service still has to meet federal civil rights rules. That includes equivalent service for riders who use wheelchairs, so the grantee will want to see wheelchair accessible vehicles and trained drivers in your proposal.

2. Operating a grantee’s vehicle under a lease

A subrecipient may lease a 5310 vehicle to a private for-profit operator. Your company then runs the vehicle on the subrecipient’s behalf and carries the riders described in its grant application. The state or designated recipient must agree to each lease in writing, and the lease should say the vehicle serves seniors and people with disabilities first. Other trips are allowed only after those needs are met, and they cannot cut into that service.

3. Holding title under a service contract

The circular gives an example of an exclusive-ride taxi company that receives 5310 funds to buy accessible vehicles while under a transportation service contract with a state, designated recipient, or subrecipient. The company may hold title if the agency keeps satisfactory continuing control. The circular names a lien, or contract terms requiring that the vehicle serve seniors and people with disabilities and stay in service until the end of its useful life unless the agency agrees in writing.

4. Becoming a subrecipient as an operator of public transportation

A company that runs regular shared rides open to anyone, or open to an entire rider group such as seniors or low-income residents, counts as an operator of public transportation. The circular says taxi companies and ride-hailing companies qualify when shared rides are the general nature of the service, and it tells recipients to ask for documentation before award. As a subrecipient you carry the same federal requirements as the public agency, and you are limited to nontraditional projects. For a typical broker-funded NEMT company, routes 1 and 2 are the practical ones.

5310 can also fund voucher programs. A grantee can hand riders vouchers for a taxi trip or a ride from a human service agency, and the transportation provider submits the vouchers to the grantee for payment.

The coordinated plan is where private operators get a voice

Every 5310 project has to be listed in the region’s coordinated plan, officially the coordinated public transit-human services transportation plan. The recipient certifies that seniors, riders with disabilities, transportation providers of every kind, and human service agencies all had a hand in writing it. Circular C 9070.1H lists private transportation brokers, taxi operators, and school transportation operators among the groups to include.

The plan is not a one-time event. At a minimum it should follow the update cycle of the metropolitan transportation plan, which is four years in air quality nonattainment and maintenance areas and five years elsewhere. Call your metropolitan planning organization, regional council, or state DOT transit office and ask when the next update starts. Then attend, give the planners a written summary of the counties you cover, the vehicles you run, and your hours, and ask to be listed as an available provider. Projects must appear in the plan to be funded, so a plan that lists contracted service as a strategy keeps that option open for local grantees.

Some states add their own notice step. Connecticut requires each applicant for Traditional vehicle funds to email or mail the transportation operators within 15 miles of its service area one week before publishing a newspaper notice. The notice invites interested transit and paratransit operators to review the application, and comments are due within seven days of publication. A public hearing is held if someone asks for one. If you get one of these letters, answer it with a written offer to provide the service.

Application cycles: what the calendar looks like

States run 5310 on their own schedules, and the gap between applying and receiving money is long. These examples show the range.

Connecticut’s timeline is a useful reality check. Applications are due in March 2026, the state applies to FTA in November 2026, awards follow in early 2027, and new operating funds from the cycle are not available until July 1, 2027. If a local agency wants to buy service from you with 5310 money, the conversation needs to start a year or more before the ride.

Rules that come with the money

A 5310 contract brings terms that ordinary private-pay work does not. Expect these.

• Drug and alcohol testing. Agencies that receive only Section 5310 funds are not subject to FTA’s testing rule, but drivers with a commercial driver’s license are still tested under FMCSA’s rule at 49 CFR Part 382. If the agency also receives Section 5307, 5309, or 5311 funds, its FTA testing program should cover 5310-funded employees. Our sample testing policy gives you a base to adapt to the contract.
• Insurance at the agency’s limits. Connecticut’s packet, for example, asks vehicle grantees for auto liability of $1,000,000 for vehicles seating 10 or fewer, $1,500,000 for 11 to 14, and $5,000,000 for 15 or more, plus a $3,000,000 umbrella and the state named as additional insured. Price that into your bid. Our guide to NEMT insurance cost covers the policies involved.
• Fares and donations. Connecticut bars fares on vehicles bought with Traditional funds, allows donations, and does not let a grantee refuse a ride for no donation.
• Vehicle control and reports. In Connecticut the state is first lienholder on Traditional vehicles and keeps the title, and recipients file quarterly operating and maintenance reports for each vehicle’s useful life.
• Civil rights. The circular requires contracted service to meet federal civil rights rules, and recipients must comply with Title VI, equal employment opportunity, disadvantaged business enterprise, and ADA requirements.

A practical plan for the next year

1. Find your direct recipient. Outside large cities it is the state DOT transit office. In a big metro area, the state DOT can tell you which agency is the designated recipient.
2. Request the state or program management plan and read how projects are selected.
3. Get your region’s coordinated plan and its update schedule, and get on the notice list.
4. List likely subrecipients in your area: county transit, senior centers, disability service groups, and charities that transport their own clients. Find out which of them buy service from outside operators and which lease out their vehicles.
5. Write a one-page offer listing the area you serve, your vehicles, wheelchair capacity, hours, and a per-trip or per-hour rate. Our guide to government NEMT contracts covers capability statements and bid pricing.
6. Line up the insurance limits, driver files, and testing program a public contract will require.
7. Mark the next call for projects on your calendar and reach grantees months before it opens.

If you are looking at 5310 because you need startup money, read NEMT business funding as well. A for-profit NEMT company usually reaches these funds as a contractor, not as a grantee. Rural operators should also read our guide to rural NEMT.

Where software helps

Grantees file operating reports with the state (Connecticut wants one every month from operating grantees), so they need clean trip data from their contractors. HealthRide records GPS miles, timestamps, on-screen signatures, and how long a driver waited on a no-show. The reports page shows on-time performance for any period, such as a month, and the full trip log can be saved in CSV or PDF format for the grantee. A finished trip is billed at the agency’s own rates. See how reports work.