To amend section 5307 of title 49, United States Code, to allow transit systems in urbanized areas that, for the first time, exceeded 200,000 in population according to the 2000 census to retain flexibility in the use of Federal transit formula grants in fiscal year 2003, and for other purposes.

Makes a special rule for FY 2003 authorizing the Secretary of Transportation to make such grants from FY 2003 funds to finance the operating cost of equipment and facilities for use in mass transportation in an urbanized area with a population of at least 200,000 as determined under the 2000 Federal decennial census of population, if: (1) the urbanized area had a population under 200,000 in the 1990 census; (2) a portion of the area was a separate urbanized area with a population under 200,000 in the 1990 census; or (3) the area was not designated as a urbanized area in the 1990 census.

Limits such amounts: (1) for the first two described areas to the amount apportioned in FY 2002 to such areas; and (2) for urbanized areas that, for the first time, exceeded 200,000 in population according to the 2000 census, to the amount apportioned for FY 2003.