One-dimensional Feynman--Kac regularity under the Engelbert--Schmidt conditions

Let $X$ be a time-homogeneous one-dimensional diffusion whose coefficients satisfy the Engelbert–Schmidt conditions, and let $q$ be a bounded potential. We show that the associated Feynman–Kac semigroup is smooth in time and $C^1$ in space, with a locally absolutely continuous first spatial derivative; the Kolmogorov equation holds almost everywhere. If the drift, second-order coefficient, and potential are continuous, the Feynman–Kac value is $C^{1,2}$ in the interior. Thus, in the time-homogeneous one-dimensional setting, continuity suffices for interior $C^{1,2}$ regularity. We identify the corresponding semigroups with the killed and reflected Feynman–Kac functionals, treat nonzero, time-independent Dirichlet data, and give examples showing the sharpness of the continuity assumptions and the failure of the corresponding statement in two dimensions.