Status of Transit Authorities as State Agencies or Instrumentalities under Intergovernmental Cooperation Act of 1968

B-180617: Feb 9, 1977

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The Acting Chief Counsel of the Urban Mass Transit Administration (UMTA) of the Department of Transportation, asked whether certain transit operators are not accountable for interest earned on UMTA financial assistance grants pending program disbursement. Federal grantors should follow State law: those transit authorities which are State instrumentalities are permitted to retain such interest, whereas political subdivisions of State may not. State entities may keep interest from October 16, 1968 (date of relevant statute), or from date it was created, if later. (DJM)