[Federal Register: February 28, 2007 (Volume 72, Number 39)]
[Notices]
[Page 9062-9073]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28fe07-116]
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DEPARTMENT OF TRANSPORTATION
Federal Transit Administration
[Docket No: FTA-2006-25365]
Formula Grants for Other Than Urbanized Areas Program (49 U.S.C.
5311): Notice of Final Circular
AGENCY: Federal Transit Administration (FTA), DOT.
ACTION: Notice of Availability of Final Circular.
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SUMMARY: This notice announces the publication of final guidance in the
form of a circular to assist grantees in implementing the Federal
Transit Administration (FTA) Formula Grants for Other Than Urbanized
Areas Program (commonly referred to as Section 5311). This notice
provides a summary of the Section 5311 program circular, and addresses
comments received in response to the July 31, 2006, Federal Register
notice (71 FR 43280) announcing the availability of the proposed
circular for comment.
DATES: The effective date of this final circular is April 1, 2007.
AVAILABILITY OF THE FINAL CIRCULAR: You may download the circular from
the Department's Docket Management System (http://dms.dot.gov) by
entering docket number 25365 in the search field. You may also download
an electronic copy of the circular from FTA's Web site, at
http://www.fta.dot.gov. You may obtain paper copies of the circular by calling
FTA's Administrative Services Help Desk, at 202-366-4865.
FOR FURTHER INFORMATION CONTACT: Lorna R. Wilson, Office of Program
Management, Federal Transit Administration, 400 Seventh Street, SW.,
Room 9114, Washington, DC 20590, phone: 202-366-2053, fax: 202-366-
7951, or e-mail: lorna.wilson@dot.gov. Legal questions may be addressed
to Shauna J. Coleman, Office of Chief Counsel, Federal Transit
Administration, 400 Seventh Street, SW., Room 9316, Washington, DC
20590, phone: 202-366-4063, fax: 202-366-3809, or e-mail:
shauna.coleman@dot.gov.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Chapter-by-Chapter Analysis
A. Chapter I--Introduction and Background
B. Chapter II--Program Overview
C. Chapter III--General Program Information
D. Chapter IV--Program Development
E. Chapter V--Locally Developed, Coordinated Public Transit-
Human Services Transportation Plan
F. Chapter VI--Program Management and Administrative
Requirements
G. Chapter VII--State Management Plan
H. Chapter VIII--Intercity Bus
I. Chapter IX--Rural Transit Assistance Program
J. Chapter X--Other Provisions
K. Appendices
Appendix 1.--Implementation of Two-Year Pilot of In-Kind Match for
Intercity Bus
I. Background
On July 31, 2006, the Federal Transit Administration (FTA)
published a Notice of Proposed Program Guidance and Request for
Comments on the proposed revisions to FTA Circular 9040.1E,
``Nonurbanized Area Formula Program Guidance and Grant Application
Instructions,'' dated 10-01-98. The proposed circular contained
guidance on how to administer the Section 5311 program. The proposed
circular also contained summaries of cross-cutting provisions such as
Charter Bus, Buy America, Title VI, and EEO requirements. FTA did not
seek specific comments on these cross-cutting provisions, however,
because these are subjects of separate rulemaking or circular efforts.
The comment period remained open until September 29, 2006. FTA
received 17 comments to the docket. FTA reviewed and considered all
comments submitted. In addition to changes made in response to comments
received, FTA also edited the proposed circular for clarity and
accuracy. Based upon comments received, FTA hereby announces issuance
of the final circular, Federal Transit Administration (FTA) Circular
9040.1F, ``Nonurbanized Area Formula Program Guidance and Grant
Applications Instructions,'' which supersedes the 1998 FTA Circular
9040.1E. FTA reserves the right to make changes to this circular in the
future and to update references to requirements contained in other
revised or new guidance and regulations that undergo notice and comment
procedures without further notice and comment on this circular.
[[Page 9063]]
This notice does not contain the final circular, but rather
provides a summary of the provisions found within. An electronic
version of the circular may be found on the docket, at http://dms.dot.gov
, docket number FTA-2006-25365, or on FTA's Web site, at
http://www.fta.dot.gov. You may obtain paper copies of the circulars by
contacting FTA's Administrative Services Help Desk, at 202-366-4865.
II. Chapter-by-Chapter Analysis
A. Chapter I--Introduction and Background
This chapter is a general introduction to FTA to provide an
orientation for those readers less familiar with FTA and our programs.
FTA intends to include this introduction in all new and revised program
circulars for the orientation of readers new to FTA programs. Chapter I
also includes definitions.
Six parties submitted comments on this chapter, with some parties
offering multiple comments. One commenter thought that the statement
``Grants.gov is information on all Federal grant opportunities'' was
misleading because not all Federal grants are included on this Web
site. This commenter suggested that FTA provide information concerning
who is responsible for updating this Web site.
FTA agrees and revised the final circular to reflect that all
competitive discretionary Federal grants are included on Grants.gov.
FTA further clarified, in the final circular, that while FTA does not
manage Grants.gov, FTA is responsible for posting all FTA competitive
grant opportunities. In addition, FTA clarified, in the final circular,
that the Department of Health and Human Services officially manages the
Grants.gov postings.
Five commenters submitted comments concerning the definitions. Four
commenters submitted comments regarding the use of the term ``small
urban areas'' throughout the proposed circular. Three of these
commenters stated that the inclusion of the term ``small urban areas''
in the definition of ``nonurbanized areas'' was confusing and
misleading when FTA proposed using ``small urban areas'' as synonymous
with ``nonurbanized areas,'' ``rural and small urban areas,'' and
``rural.'' These commenters proposed that FTA not define small urban
areas as synonymous with rural areas. One commenter supported the
continued use of the term ``small urban'' in the circular, and believed
that its use was consistent with current language. One commenter
suggested that FTA more clearly define intercity bus service. Another
commenter suggested that FTA consistently define ``mobility
management.''
FTA agrees that while the technical use of the term ``small urban''
throughout the circular was correct, we understand that the common use
of the terms ``small urban'' and ``small urbanized'' may be confusing.
Therefore, FTA revised the definition of ``Other than Urbanized
(Nonurbanized) Area,'' in the final circular, to clarify that a
nonurbanized area means any area outside of an urbanized area, and
includes rural areas and urban areas with populations under 50,000 not
included within an urbanized area. Further, FTA added definitions of
``rural area,'' and ``urbanized areas'' for further clarification. In
addition, FTA removed the term ``small urban'' throughout the circular
and replaced it with the term ``nonurbanized.''
In response to the commenter who suggested that FTA more clearly
define intercity bus service, the commenter failed to specify what
aspect of the definition was unclear. Therefore, FTA adopts the
definition of intercity bus service from the previous versions of the
circular and as proposed in the proposed circular. FTA agrees with the
commenter who proposed that FTA consistently define ``mobility
management.'' Therefore, FTA replaced the proposed definition to make
it consistent with the definition of mobility management provided in 49
U.S.C. 5302(a)(1)(L).
B. Chapter II--Program Overview
This chapter replaces the former Chapter I, ``General Overview,''
in Circular 9040.1E. It provides an overview of the Section 5311
program in terms of its statutory authority and program goals. It
defines the role of the individual States and FTA, and explains the
program's relationship to other FTA-funded programs, as well as its
coordination with other Federal programs. It contains the same
information as the existing circular, with minor updates.
Three parties submitted comments on this chapter, with some parties
offering multiple comments. One commenter asked FTA to provide a
definition of ``takedown'' when FTA uses it in relation to the Rural
Transportation Assistance Program (RTAP).
FTA agrees with this suggestion and added a definition of
``takedown'' to the definitions section in Chapter I of the final
circular.
One commenter suggested that FTA mention, in Chapter II, funding
transfers of interrelated FTA grant funding. This commenter further
suggested that FTA mention that States may choose to delegate some of
their non-metropolitan transportation planning functions to regional
planning organizations, in addition to noting that States may choose to
suballocate some of their statewide transportation planning funds to
Metropolitan Planning Organizations (MPOs). Another commenter suggested
that FTA expand the brief descriptions of its other programs in Chapter
II to provide comprehensive cross-program guidance to ensure
consistency in management and reporting requirements.
FTA disagrees that Chapter II should discuss funding transfers in
detail because FTA intended Chapter II to be an overview. FTA provided
a detailed discussion of transfers of interrelated FTA grant funding in
Chapter III. For the same reason, FTA did not adopt the suggestion that
FTA expand the brief descriptions of its other programs in Chapter II
to provide comprehensive cross-program guidance. However, FTA revised
some program descriptions to emphasize the relationship to the
nonurbanized area formula program and referenced the transfer
provisions.
One commenter suggested that FTA provide additional guidance, under
Section 3(b)(2), State Role in Program Administration, concerning the
State's obligation when the Regional Planning Agency makes funding
decisions for the nonurbanized area.
In response, FTA added a sentence to Chapter II, Section 5(f) to
clarify that the State is responsible for satisfying grantee
requirements for the Section 5311 program. Because each State's unique
authorizing legislation defines the roles, responsibilities, and
authorities of Regional Planning Agencies, each State must establish
appropriate controls to monitor subrecipient activities to ensure that
all provisions of the Section 5311 program are met. FTA looks to the
States, not to Regional Planning Agencies or other subrecipients, to
demonstrate program compliance.
Two commenters submitted multiple comments on the Tribal Transit
Program. These commenters asked FTA to clarify the State's role and
relationship to the Section 5311 program in relation to the Federal
Highway Administration's (FHWA's) Indian Reservation Roads (IRR)
Program. Specifically, one commenter asked FTA whether a tribe could
support its transit program with simultaneous funding from Section 5311
assistance through the State in which it is located, 5311(c)(1) funding
directly from FTA, and IRR funding. This commenter also asked FTA
[[Page 9064]]
whether tribes could use IRR funds as the non-Federal share of Section
5311 assistance to tribes.
FTA permits a tribe to support its transit program with
simultaneous funding from Section 5311 assistance through the State in
which it is located, 5311(c)(1) funding directly from FTA, and IRR
funding, as long as the tribe uses the funds for costs associated with
administering the respective programs.
Regarding the commenter's question of whether State may use IRR
funds for the ``non-Federal'' share of Section 5311 assistance to
tribes, FTA points out that States may use IRR funds for the non-FTA
share. Title 49 U.S.C. 5311(g)(3) allows States to use funds from
Federal agencies, other than those of the U.S. Department of
Transportation, for the non-FTA share of a Section 5311 grant, but
makes a specific exception allowing States to use the Federal lands
highway programs for the local share. The FHWA, a U.S. Department of
Transportation operating administration, administers IRR funds under
the Federal Lands program. Therefore, IRR funds are not ``non-Federal''
funds. They are Federal funds, but they are eligible as local match. To
clarify that IRR funds are eligible as local match, FTA added to
Chapter III, Section 3(d) of the final circular a statement indicating
that IRR funds are an eligible local match.
One commenter suggested that FTA expand Section 6(c) Other
Intraagency Coordination to include the following language:
Federal transit law requires metropolitan planning organizations
to coordinate their planning with the activities of other
governmental agencies and non-profit organizations that receive
Federal financial assistance from sources other than the Department
of Transportation to provide non-emergency transportation services.
This requirement does not extend to statewide transportation
planning activities, but FTA does encourage State participation in
interagency efforts, such as coordinated statewide planning of
public and human services transportation, and the facilitation or
involvement in State rural development councils or other interagency
coordinating bodies. States also are reminded that they will be
responsible for the selection of nonurbanized Section 5310, 5316,
and 5317 projects as derived from locally developed, coordinated
public transit-human services transportation plans, and that the
creation or use of statewide interagency councils or other bodies
may be a successful strategy for reviewing plans and making project
selections under these programs.
FTA agrees with the general idea of this recommendation. FTA did
not adopt this commenter's proposal verbatim, but FTA expanded Chapter
II, Section 6(b) of the final circular to include the following
language:
FTA encourages State DOT participation in interagency efforts,
such as coordinated statewide planning of public and human services
transportation. Since States are responsible for the selection of
nonurbanized Section 5310, 5316, and 5317 projects as derived from
locally developed, coordinated public transit-human services
transportation plans, the creation or use of statewide interagency
councils or other bodies may be a successful strategy for reviewing
plans and making project selections under these programs.
C. Chapter III--General Program Information
This chapter consolidates the former Chapters II ``Apportionments''
with Chapter III ``Eligibility''. This revised chapter sets forth the
basis for the apportionment of Section 5311 funds including the
availability of those funds and the transfer of funds; also, it
identifies eligible recipients and expenses, and the traditional
Federal/State matching ratio. Although this revised chapter retains
much of the content of the first two chapters, it includes several
changes required by the Safe Accountable, Flexible, Efficient
Transportation Equity Act (SAFETEA-LU). These changes include: (1) A
sliding scale that permits a higher Federal share for capital and
operating costs for several States based on a formula used by FHWA; (2)
an expanded list of eligible capital expenses for crime prevention and
security; and (3) the inclusion of Mobility Management as an eligible
capital expense.
Nine commenters submitted comments on this chapter, with some
parties offering multiple comments.
One commenter suggested that if the provisions of 48 U.S.C. 1469a
do not apply to Puerto Rico, FTA should note this in Section 1(e)
Consolidation of Grants to Insular Areas. This commenter further asked
FTA to address whether or not Section 5307 (Urbanized Area Formula
Grant Program) funds attributable to the U.S. Virgin Islands may be
part of the consolidated grants to insular areas authorized under 48
U.S.C. 1469a.
In response to the first issue, FTA notes that 48 U.S.C. 1469a does
not specify Puerto Rico as a covered insular territory. Therefore, the
consolidated grant provisions do not apply to grants to Puerto Rico.
Further, FTA declined to note in Chapter III, Section 1(e) that 48
U.S.C. 1469a does not apply to Puerto Rico. FTA explicitly listed the
covered insular territories, and does not believe that listing every
other uncovered territory in the circular is warranted. In response to
the second issue, FTA notes that Section 5307 funding that is
attributable to the U.S. Virgin Islands and Guam may be part of the
consolidated grants to insular areas authorized under 48 U.S.C. 1469a.
FTA added Section 5307 to the list of grant programs in this section
and notes that the U.S. Virgin Islands do not receive Section 5311
funds.
Two comments concerned transfers of apportionment under different
programs. One commenter asked whether FTA permits States to combine
funds available to them for program administration under Section 5311
funds with Sections 5310 (Elderly Individuals and Individuals With
Disabilities), 5316 (Job Access and Reverse Commute), and 5317 (New
Freedom) into a common program management account, or whether FTA
requires States to track each program's State administrative expense
separately. Another commenter noted it is not clear why FTA allows a
transfer of funds if it is only for ``administrative streamlining of
grant making,'' particularly when States must separate and track the
transferred funds under the same grant, and asked FTA to provide some
examples of this procedure. This commenter further suggested that FTA
retain the ability to transfer 5310 funds to 5311 strictly for capital
projects, without a separate grant process for the use of those funds.
In response to the first comment, FTA determined that States may
combine program administration funds available to them into one
administrative account at the State level, so long as the State uses
the funds for State costs associated with administering the 5310, 5311,
and 5316 programs. However, FTA must still track the funds attributable
to each program at the accounting classification code, Activity Line
Item (ALI), and Financial Purpose Code level in the respective grants.
As the State incurs expenses against the pooled funds for program
administration, it can draw down the reimbursement against any grant
that has undisbursed program administration funds. In response to the
second comment, FTA, upon closer examination, agrees that there is
little administrative ease in combining the program in a consolidated
grant, because FTA would still require States to separate and track the
transferred funds under the same grant. However, a State may transfer
funds it allocates to Federally recognized Indian tribes under Section
5310, 5316 or 5317 to Section 5311 to enable FTA to make direct grants
to Federally recognized Indian tribes for the selected projects,
because the tribes are eligible direct
[[Page 9065]]
recipients under Section 5311 but not under the other programs.
In response to the third comment, FTA can no longer allow a State
to transfer Section 5310 funds to Section 5311 without first selecting
projects eligible under Section 5310. In other words, the State must
now use the Section 5310 funds it transfers to Section 5311 only for
Section 5310 program purposes. This is a result of a change in the law,
FTA can no longer allow the transfer of Section 5310 to Section 5311 to
supplement resources available under the nonurbanized formula grant
program, as the law previously permitted.
Eight comments concerned Federal Motor Carrier Safety
Administration (FMCSA) regulations in relation to feeder bus service.
Four commenters noted that information in Chapter III, Section 2(c) and
Chapter VIII, Section 9 is conflicting when Chapter III states that
operators of interstate service ``may'' be required to comply with
FMCSA regulations, and Chapter VIII states that operators of interstate
service ``are required'' to comply with FMCSA regulations. These
commenters proposed that FTA clarify these statements. Two commenters
recommended that FTA's guidance emphasize that rural transit services
that feed intercity bus service with meaningful connections can provide
that service without any FMCSA regulatory involvement, as long as the
rural transit service does not physically cross state lines and does
not interline with the intercity bus service. Additionally, two
commenters recommended that FTA provide in the circular that a rural
transit agency's costs of compliance with FMCSA safety and insurance
regulations are eligible for Section 5311(f) funding to the extent that
they are incurred in providing eligible feeder service.
FTA agrees with the comments concerning the conflicting language in
Chapter III and Chapter VIII. FTA reconciled the conflicting statements
by replacing ``may be required'' in Chapter III with ``are required.''
In response to the commenters' suggestions that FTA guidance emphasize
that rural transportation services are subject to FMCSA regulation when
the rural transportation service crosses state lines or when
interlining is involved, Chapter VIII, Section 9 contains this
statement. To the extent FMCSA regulations apply beyond this statement,
FTA declines to further interpret FMCSA regulations and directs
commenters to contact FMCSA Headquarters for further information.
In response to the commenters' suggestion that FTA state in the
circular that a rural transit agency's costs of compliance with FMCSA
safety and insurance regulations are eligible for Section 5311(f)
funding to the extent that they are incurred in providing eligible
feeder service, FTA agrees and added language to clarify in Chapter 8,
Section 9.
Three commenters submitted concerns about Eligibility Assistance
Categories. One commenter noted that the funding derived under Section
5340 (Apportionments based on growing States and high density States
formal factors) is a substantial portion for most States' Section 5311
apportionments, and suggested that FTA move the paragraph that refers
to Section 5340 to the second paragraph under the subheading of
``Apportionment of Section 5311 Funds.'' One commenter requested that
FTA clarify ``capital activities.'' Another commenter suggested that
FTA expressly add park and ride lots to the list of eligible capital
items.
FTA agrees with the commenter's suggestion concerning Section 5340
and moved that paragraph as suggested. FTA disagrees that the circular
should further clarify eligible capital activities. As proposed,
Chapter III, Section 2(e)(2) of the proposed circular defines ``capital
expenses'' and provides a list of eligible capital expenses. In
response to the last commenter, FTA added park and ride lots to Chapter
III, Section 2(e)(2) of the final circular.
Four commenters submitted multiple comments concerning Federal/
Local matching requirements. Two commenters recommended that FTA retain
all of the matching requirements set forth in the draft circular
without change. One commenter applauded FTA for its proposal to allow
the increased ``sliding scale'' Federal share for Section 5311
assistance in States with high proportions of public lands. This
commenter suggested that FTA include a qualifying statement in Section
3(a)(3) regarding whether FHWA is likely to recalculate these sliding
scale rates and their qualifying States.
FTA agrees with the first two commenters and retained all matching
requirements set forth in the final circular without change. FTA notes
that the match provisions in the circular reflect our understanding of
Congressional intent. However, FTA notes that technical corrections
legislation may be forthcoming which could further clarify SAFETEA-LU
provisions on this point. Finally, FTA defers any questions about
possible changes to FHWA's rates to FHWA.
One commenter noted that Chapter III (Table 2) is not clear as to
whether the 88.53 percent (sliding scale for capital projects) for the
State of California covers all capital, including accessible vehicle
purchase with 3 percent allowance. Another commenter suggested that FTA
name the five specific programs established under the Federal Lands
Highway authorization (e.g., Indian Reservation Roads, Park Roads and
Parkways, Forest Highways, Public Lands Highways, and Refuge Roads),
when FTA discusses the eligibility of Federal Lands Highway funds
toward the non-Federal share of Section 5311 grants.
In response to the clarity of Table 2, FTA notes that it allows the
recipient the option of using the sliding scale in lieu of the 80
percent match. In addition, FTA notes that a recipient may also use the
90 percent for the actual incremental costs of equipment necessary to
comply with the Americans with Disabilities Act (ADA) or the Clean Air
Act (CAA) if that calculation proves more advantageous than the sliding
scale. FTA added this explanatory language to Chapter III, Section
3(d). While no commenters raised objections regarding a provision in
the proposed circular, which stated that States could not use Section
5310 funds received under service agreements as local match for 5311 to
the docket, several States subsequently raised this objection to FTA
regional staff. FTA reaffirmed and clarified this position, in Chapter
III, Section 3(b) of the final circular, based on reading of 49 U.S.C.
5311(g)(3)(A) and 49 U.S.C. 5311(g)(3)(B).
In response to the addition of the eligibility of Federal Lands
Highway funds, FTA believes that FHWA is better suited to provide this
information. FTA added a reference to Chapter III, Section 3 to direct
interested parties to the statutorily defined sources of DOT funds that
States can use as local match for Section 5311 projects from the
Federal Lands Highway Program.
D. Chapter IV--Program Development
FTA renamed and made minor updates to Chapter IV, including adding
a requirement that designated State agencies provide annual
Certifications and Assurances to FTA, which was always assumed under
the former circular, but is now explicitly stated. FTA also made non-
substantive, technical corrections to this chapter for clarity.
[[Page 9066]]
E. Chapter V--Locally Developed, Coordinated Public Transit--Human
Services Transportation Plan
This chapter replaces the former Chapter V ``Application
Instructions,'' which is now attached as Appendix A to the proposed
circular. This new Chapter V describes the Locally Developed
Coordinated Public Transit--Human Services Transportation Plan
(Coordinated Plan) required under three other FTA programs (Sections
5310, 5316, and 5317) and addresses the relationship to that planning
process for Section 5311 subrecipients. Although SAFETEA--LU does not
require Section 5311 projects to be derived from a local coordinated
plan, FTA states in Chapter V the expectation that Section 5311 and
5307 recipients and subrecipients will be included as essential
partners or participants in any coordinated planning activities. FTA
also revised Chapter V in the final version to include a reference to
the statutory requirements for ``maximum feasible coordination'' with
transportation assistance by other Federal services.
One commenter submitted multiple comments on this chapter. This
commenter expressed concern that the proposed guidance was completely
silent on the question of how, or whether FTA would allow incumbent Job
Access and Reverse Commute (JARC) projects to continue. This commenter
also was concerned about how FTA will allow local Section 5311 and 5307
grantees and subrecipients to provide important transportation services
through Sections 5310, 5316, or 5317 directly. The commenter was
further concerned that the approaches FTA was considering for these
designations and allocations ``will shut the door on many currently
effective and many more potentially effective job access, new freedom,
or elderly and disabled persons' mobility programs.''
FTA agrees that the proposed circular did not address how FTA will
allow local Section 5311 and 5307 grantees and subrecipients to provide
important transportation services through Sections 5310, 5316, or 5317
directly. FTA has revised this chapter to include a cross-reference to
5310, 5316, and 5317 program circulars. In addition, FTA directs
readers to FTA's proposed JARC circular, which addresses incumbent JARC
projects. The Federal Register notice accompanying the circular (71 FR
52610, Sept. 6, 2006) and the proposed circular are available on FTA's
Web site at http://www.fta.dot.gov. FTA will publish the final JARC
Circular at a later date.
F. Chapter VI--Program Management and Administrative Requirements
This chapter retains the requirements that were in Chapter VI of
Circular 9040.1E, and adds the National Transit Database (NTD)
reporting required by SAFETEA-LU.
Nine commenters submitted comments on this chapter, with some
commenters submitting multiple comments. One commenter generally
applauded the clarity with which FTA presents procurement procedures
that States and subrecipients may consider under the Section 5311
program.
One commenter provided comments on the proposed ``Procurement''
section. This commenter suggested that FTA emphasize in Section 5(a)
that States may set procurement procedures or requirements that are
more restrictive than FTA's guidance, provided that a State's policy
does not violate Federal requirements. This commenter further suggested
that FTA consider giving States' authority to establish vehicle useful
life and replacement standards for vehicles acquired with Section 5309
assistance for use by subrecipients under Section 5310, 5311, 5316, and
5317.
In response to this commenter's first suggestion, FTA does not
believe that it needs to add this qualifying statement to Chapter VI,
Section 5(a) because this qualifying statement appears in the first
sentence of this section. In response to this commenter's second
suggestion, FTA believes that this suggestion would be better addressed
in the Section 5309 (Capital Investment Grant program) Circular, which
is currently in the process of being revised.
One commenter provided a comment on the proposed ``Financial
Management'' section. This commenter requested that FTA clarify Section
6(c) regarding the application of accrual accounting to subrecipients.
The common grant rule gives States the right to have the same
financial management system for Federal funds they receive that they
use for State funds. However, the requirement for accrual accounting is
an FTA requirement. FTA requirements as well as common grant rule
requirements are passed through to the subrecipient. Therefore, the
accrual accounting requirement applies to subrecipients as well.
One commenter took exception on the proposed closeout requirements
that require closing out subrecipient grant agreements within 90 days
after all funds are expended. This commenter preferred to closeout a
subrecipient grant after FTA has reviewed the single audit report and
made any adjustments, including repayments, to the grant.
The common grant rule, which is applicable to all recipients and
subrecipients, requires the recipient or subrecipient to submit all
financial, performance, and other reports required as a condition of
the grant within 90 days after the expiration or termination of the
grant. As this is a separate regulation not governed by FTA, FTA did
not incorporate this commenter's proposal into the final circular.
Seven commenters provided comments on the proposed NTD reporting
requirements. One commenter recommended that FTA should keep data
collection and reporting requirements to a minimum. This commenter
further suggested that data collection and reporting requirements
should have a direct purpose to transit performance. Three commenters
noted that FTA designed the existing Rural NTD data module for a
voluntary pilot program that predates the SAFETEA-LU requirements, and
includes data categories that exceed the statutory requirements. These
commenters also proposed that FTA eliminate the excess data categories
and requirements to avoid unnecessary data collection and reporting.
FTA agrees that 49 U.S.C. 5311(b)(4) does not require some data
elements, such as fatalities, that the current form requires. FTA also
notes that the current form does not provide for collection of data
required by SAFETEA-LU, such as fleet size and type. However, due to
timing and funding limitations for the 2006 reporting year, FTA used
the existing NTD rural data reporting module, which FTA developed in
consultation with the State DOTs. For the FY 2007 reporting cycle, FTA
is working with a team of NTD experts, selected State DOTs, and rural
and private operators to review data elements and definitions in light
of SAFETEA-LU requirements. FTA anticipates data for intercity bus and
Tribal transit will be added at this time, though the number of data
elements will be kept to a minimum. FTA also agrees with the direct
purpose comment, and points out that the one-page, rural form requires
the following performance measures: trips, costs, miles, and hours.
Three commenters supported direct reporting of data from rural
subrecipients of Section 5311 funds. One of these commenters further
suggested that FTA develop the option for States to allow their 5311
subrecipients to directly enter NTD data elements, subject to
verification/concurrence by the State and suggested that FTA use, as a
model, the Volpe
[[Page 9067]]
Center's Drug and Alcohol Management Information System (DAMIS)
submission system.
FTA will continue to require the States to submit subrecipient
data, and in the short term FTA will continue to require recipients to
use the module that FTA and State DOTs developed. While FTA cannot use
the Volpe Center's DAMIS submission system for direct reporting by
subrecipients as a model at this time, FTA will explore implementing
improvements in the reporting software as resources permit in the
future. FTA will also explore other alternate means of receiving
formatted data from the States.
Four commenters opposed FTA collection of subrecipient NTD data.
Two commenters suggested that FTA consider accepting rural data in the
aggregate rather than requesting forms for each State's subrecipients.
One of these commenters further suggested that FTA discontinue such
requests and accept rural transit data on an aggregate statewide level
because such reporting is not compelled by statute. This commenter
urged FTA to make an express written decision, reflected either in the
final program circular or in a Federal Register notice, that it will
not require the submission of 5311 program data by subrecipient. This
commenter further questioned whether FTA provided notice that is
legally sufficient to enable it to impose upon Section 5311 recipients
a requirement to collect and submit data by subrecipient, at least for
FY 2007 and beyond.
FTA is preparing a separate Federal Register notice on NTD
reporting that will address the 5311 reporting requirements for in
SAFETEA-LU for FY 2007, and seek comment on the implementation of rural
data collection provisions. Overall, FTA has statutory authority to
require recipients to gather and report subrecipients' NTD data to FTA
pursuant to 49 U.S.C. Section 5335. Section 5335(a) states that FTA may
request and receive appropriate information for the NTD from ``any
source,'' and Section 5335(b) states that FTA ``may award a grant under
section 5307 or 5311 only if the applicant, and any person that will
receive benefits directly from the grant, are subject to the reporting
and uniform systems.'' A subrecipient of Section 5311 is a direct
beneficiary of the grant and, as such, is subject to providing
information for the NTD to the extent FTA requires.
On the issue of collecting subrecipient data in the aggregate, FTA
disagrees with the commenter's position. As stated above, 49 U.S.C.
5335(a) permits FTA to ``request and receive appropriate information
from any source,'' and 49 U.S.C. 5335(b) subjects ``any person that
receives benefits directly from the grant'' to the reporting and
uniform systems. In addition, Congress expected that the data
collection requirements would be ``tailored to the smaller size of the
typical public transportation system in rural areas, while still
providing enough information to judge the condition and performance of
our Nation's network of rural public transportation systems.''
Conference Report No. 109-203, at 943 (2005). FTA does not believe that
aggregate data is ``tailored to the smaller size of the typical public
transportation system in rural areas.'' Moreover, FTA does not believe
that aggregate data provides ``enough information to judge the
condition and performance of our Nation's network of rural public
transportation systems.'' Based on 49 U.S.C. 5335 and the Conference
Report, FTA will require that States provide individual subrecipient
NTD data to FTA.
One of these commenters suggested that FTA add a sentence at the
end of the paragraph concerning NTD reporting to read as follows: ``It
is the State's responsibility to collect such information from its
subrecipients as will be necessary to submit these annual reports to
the NTD.''
FTA agrees with the general idea of this sentence, and added the
following statement to the end of the Chapter VI, Section 12(e): ``The
State agency administering the FTA Formula Program for Non-Urbanized
Areas (49 U.S.C. 5311) will be responsible for the data collection and
compilation from each Section 5311 subrecipient in the State serving
the general public.''
Two commenters suggested that FTA provide training on the Rural NTD
Program requirements and processes. One of these commenters recommended
``in person'' training in addition to online training or telephone help
desk assistance.
FTA agrees and is working to provide more training on rural
reporting. Currently, most States are using the NTD rural reporting
telephone help desk, 703-462-5233. Additionally, FTA anticipates
providing an NTD rural training session during the FY 2007 State
Programs Meetings, in addition to various trainings throughout the
year. FTA will post the training schedule on FTA's public Web site,
located at http://www.fta.dot.gov FTA will also post the training schedule on the NTD Program Web site, located at http://.
http://www.ntdprogram.com. States should frequently check these Web sites for
updated training information.
One commenter provided comments on proposed Chapter VI, Section 14,
``FTA Management Review.'' This commenter stated that there have been
misunderstandings, or misplaced apprehensions, about ramifications of
subrecipient site visits in the context of FTA management reviews. This
commenter suggested FTA state that while FTA or its contractors may
visit a sampling of subrecipients as part of the State Management
Review, FTA does not intend for these visits to validate observations
of States' program management practices, or to be compliance reviews of
subrecipients. This commenter further suggested that FTA revise the
first paragraph of Section 14 to read, ``FTA also conducts more
specific compliance reviews of States or their subrecipients in
particular areas; for example * * * ''
FTA agrees that there have been misunderstandings, or misplaced
apprehensions, about ramifications of subrecipient site visits in the
context of FTA management reviews, and therefore, incorporated a
modified version of the commenter's suggested language into Chapter VI,
Section 14 of the final circular.
G. Chapter VII--State Management Plan
This chapter consists of the previous Circular 9040.1E's Chapter
XI, which FTA moved forward in the document to be consistent with the
general format for FTA's revised circulars.
One commenter provided multiple comments on this chapter. This
commenter generally applauded FTA's encouragement of States to prepare
consolidated State Management Plans (SMPs) that encompass Sections
5310, 5316, and 5317, in addition to their Section 5311 program
management. This commenter was concerned, however, that FTA does not
require SMPs to explain the State's processes for assuring that it
considered rural projects in the statewide transportation planning
process. This commenter suggests that FTA encourage States to discuss
outreach and consultation with local officials and, as appropriate,
with Indian tribal governments as part of the Section 5311 management
process.
FTA agrees that discussion of the State's approach to outreach and
consultation with local officials should be included in the State
Management Plan. FTA added clarifying language to Chapter VIII, Section
4 of the final circular.
H. Chapter VIII--Intercity Bus
This chapter retains the same information from Chapter VII of
Circular 9040.1E, and adds the SAFETEA-LU
[[Page 9068]]
mandated enhanced consultative process requirement. While consultation
between a State and intercity bus operators regarding the adequacy of
intercity bus service within the State was encouraged under the
previous circular, SAFETEA-LU now makes consultation mandatory for any
State certifying that intercity bus needs are adequately met.
Ten commenters submitted comments on this chapter, with some
commenters providing multiple comments. Two commenters submitted
general comments. One of these commenters applauded FTA's efforts to
see that States more fully include and consider intercity bus service
operators in the development and support of rural transit services.
Another commenter expressed concern that the guidance under this
section would affect an urban grantee as well as a non-urban grantee,
and suggested that FTA consider intercity bus service as public
transportation.
On the issue of considering intercity bus transportation as public
transportation, FTA does not agree. Title 49 U.S.C. 5302(a)(10)
expressly excludes intercity bus transportation from the definition of
public transportation. Although, intercity bus transportation is
explicitly eligible for assistance under Section 5311(f), the
commenter's concern is misplaced. Commuter bus service is public
transportation, not intercity bus service, and is eligible for
assistance under FTA's Urbanized Area Formula Program. As such, FTA has
not incorporated the commenter's suggestion into the final circular.
Three commenters provided multiple comments on the consultation
requirement to access intercity bus service. These commenters thought
this requirement was too burdensome, and were concerned that the State
will be unable to certify that intercity needs are met because private
intercity bus operators are reluctant to submit proposals for intercity
program funding. Two of these commenters believed that the evaluation
of private sector business activities is outside of its scope and
authority.
FTA is aware that it may be difficult to obtain proposals for
intercity bus projects in areas where the State has identified unmet
needs. The statutory provision for certification implies a statewide
assessment of intercity bus service that is currently available and an
assessment of any existing needs. This is not a new requirement.
On the issue of FTA's scope and authority, FTA notes that 49 U.S.C.
5311(f)(2) requires the chief executive officer to consult with
``affected intercity bus providers.'' Affected intercity bus providers
may include private sector providers. In addition, 49 U.S.C. 5311(f)(2)
requires the State to certify to FTA that the ``intercity bus service
needs of the State are being met adequately,'' if the State will not
use the funds to support intercity bus service. Because FTA requires a
direct correlation between the consultation process and the result of
such certification, States will necessarily have to assess private
sector business. Therefore, it is not outside of FTA's scope and
authority to require States to assess private sector business
activities to the extent that 49 U.S.C. 5311(f)(2) requires.
One commenter was concerned that any proposal related to counting
expenditures on intercity bus services outside of a delineated Section
5311(f) project would need to verify that the service does meet the
standards for Section 5311(f) participation.
FTA believes that Chapter VIII is clear that intercity bus mobility
needs can be met in many ways, including by publicly provided service.
FTA agrees that to meet the Section 5311(f) expenditure requirement, a
project must meet the standards for 5311(f) participation provided in
Chapter VIII of the final circular.
Two commenters suggested that if consultation demonstrates that
there are significant unmet intercity bus needs in the State and there
are substantial proposals presented to meet those needs, there is no
``direct correlation'' between the process and the result. The
commenters suggest that the requirement for certification that there
are no unmet bus needs renders the consultation process meaningless.
These commenters proposed that when there is no direct correlation
between the process and the results, FTA should not accept the
certification. Further, these commenters suggested that FTA clarify, in
Section 3 or 4, that FTA will reject the certification if it finds that
there is no direct correlation between the certification and the
results of the consultation process.
FTA agrees that a ``direct correlation'' should exist between the
certification processes and consultation results, including any needs
assessment. In response, FTA strengthened the language in Chapter VIII,
Section 3, and modified the model certification letter in Appendix E.
As such, FTA will review letters of certification upon receipt to
ensure that a direct correlation exists. FTA will not accept the
certification if it is apparent that there is no direct correlation
between the certification and the results of the consultation process.
FTA will also review the consultation processes and needs assessment
during the State Management Review.
Four commenters submitted multiple comments on the proposed
consultation process requirements. One commenter suggested that
Sections 4(b)(2) and (4) are not clear. Another commenter was concerned
that the process, as proposed, was too burdensome.
These commenters were not specific concerning which aspects of the
consultation requirements were unclear or burdensome. Therefore, FTA
adopted the consultation process for intercity bus service as proposed
in the proposed circular.
Two commenters supported the definition of ``consultation'' as
defined in the joint FTA/FHWA Metropolitan and Statewide Planning
regulation (49 CFR part 613). Specifically, one of these commenters
noted that the specific aspects in Section 4(b) undermine the
flexibility granted in the planning regulation, and proposed that the
consultation requirements of this circular should reflect the
requirements of the planning regulation. This commenter further
recommended that FTA replace ``must include'' with ``may include'' in
Section 4(b) to support flexibility in the approaches that States may
take in the consultation process.
FTA retained the definition of ``consultation'' as provided in FTA/
FHWA's Statewide and Metropolitan Planning regulation, but also notes
that consultation, as it applies to the intercity bus program, must
meet specific requirements. FTA disagrees with the proposal that FTA
replace ``must include'' with ``may include'' in Section 4(b). FTA
believes that the four elements outlined in the guidance are necessary
to establish an effective consultation with intercity bus providers and
an assessment of the State's needs. FTA further believes the elements
are not too prescriptive and allow the State's flexibility in
establishing an assessment and consultation process.
Two commenters submitted comments on the proposed suggestions for
identifying private intercity carriers. One commenter applauded FTA's
comprehensive list of suggested consultation activities and suggested
that States may identify the intercity bus network and consultation
with its members through State outreach to State-level or multi-State
regional associations of motor coach operators. This commenter further
suggested consultation activities could include participation,
dialogue, and meaningful interactions at the meetings and
[[Page 9069]]
conferences of these associations. This commenter also feels that the
locally developed, coordinated public transit-human services
transportation plans have enough concerns and priorities from their
statutory mandates, and to have them become a vehicle for intercity bus
industry consultation, as well, strikes the commenter as too burdensome
a suggestion. Another commenter suggested that FTA change the wording
in 4(c)(b) regarding the use of ``The Bus Industry Directory'' to
``industry directories'' to avoid reference to a particular book that
may no longer be published.
FTA agrees with the commenters and encourages States to engage in
as many activities as possible to facilitate an effective consultation
process. FTA also agrees that the requirement to include an assessment
of intercity bus needs in the development of Coordinated Public
Transit-Human Service Transportation Plans could indeed become
burdensome. However, Section 5311 and 5307 recipients are the ``public
transit'' in the Coordinated Public Transit-Human Service
Transportation Plan, and FTA expects and encourages their involvement
in the development of those plans. To the extent that intercity bus
service is an unmet need for low income, elderly, or persons with
disabilities, States should include those needs, and strategies to meet
those needs, in their coordinated plans. To that extent, the
coordinated planning process can be a resource to States in identifying
unmet intercity bus transportation needs. On the issue of amending
``The Bus Industry Directory'' to read ``industry directories,'' FTA
agrees and incorporated this change accordingly.
Two commenters thought that informing intercity bus carriers of a
State's intent to certify was not an appropriate way to start the
consultation process because it implies that a State has made a
judgment about certification that it should not make prior to
consultation. Furthermore, these commenters believed that the proposed
Section 4(c)(2)(a) implies that consultation should be limited to those
situations where the State is considering certifying, rather than
including intercity bus operators in the State rural planning process
on an ongoing basis. These commenters recommended that FTA strike the
language of Section 4(c)(2)(a) and substitute it with the following
language:
Inform intercity bus carriers of the State's rural planning
process and encourage their participation in that process, and where
a State is considering possible certification, provide an
opportunity to submit comments and/or request a public meeting to
identify unmet needs and discuss proposals for meeting those needs.
FTA agrees with these comments and incorporated this language into
Chapter VIII, Section 4(c)(2)(a) of the final circular.
Two commenters agreed with FTA's proposal in Section 4(c)(3)(a)
concerning the appropriateness for a State to work in partnership with
the American Bus Association. However, these commenters suggested that
this should not preclude States from working with carriers on an
individual basis. These commenters proposed adding ``and/or carriers
individually'' after ``Association'' in line two of Section 4(c)(3)(a).
Another commenter noted that not all of Greyhound's schedules are
listed in the Russell's Guide, and suggested that FTA list Greyhound's
Web site as a source for identifying intercity bus carriers and
service.
FTA agrees that States should not be precluded from working with
intercity bus carriers on an individual basis and incorporated the
language ``and/or carriers individually,'' accordingly. On the issue of
adding the Greyhound Web site, FTA agrees that while the Russell's
Guide may not contain the most current information, the addition of
only Greyhound's Web site (and not other intercity carriers' Web sites)
is not warranted. FTA, however, added ``Web sites of private intercity
bus operators'' in the resources for identifying intercity bus
operators in the State.
Three commenters submitted comments concerning eligible activities.
One commenter supported the inclusion of FTA's new definition of joint
development, and applauded FTA for describing this new eligibility in
the ``eligible activities'' section. Two commenters indicated that FTA
published proposed guidance on joint development projects, including
implementation of the new intercity bus terminal eligibility in the
Federal Register on September 12, 2006. These commenters suggested that
FTA reference that guidance in Section 8 and suggested that FTA correct
the last sentence to reflect that the joint development eligibility
criterion for intercity bus terminals is ``physical or functional''
relationship to public transportation facilities, not ``physical and
functional'' relationship.
FTA agrees that the joint development eligibility criterion for
intercity bus terminals is ``physical or functional'' relationship to
public transportation facilities, not ``physical and functional''
relationship. FTA published final guidance on joint development on
February 7, 2007. Accordingly, FTA added a reference to this document
in Section 8.
Two commenters submitted multiple comments concerning feeder
service. These commenters recommended that Section 9 make clear that
feeder service is only eligible for Section 5311(f) funding if it makes
``meaningful connections with scheduled intercity bus service to more
distant points'' by adding ``and which makes meaningful connections
with scheduled intercity bus service to more distant points'' at the
end of the first sentence of Paragraph 9. These commenters further
noted there are many factors (e.g., weather, accidents, change of
plans) that can impede a customer's ability to properly schedule a
return intercity bus trip with a demand-responsive feeder service, and
suggested that FTA add language to Section 9 that encourages feeder
services to make regularly scheduled connections with intercity bus
services. These commenters also recommended that FTA make clear, in
Section 9, that States should also use the same merit based selection
process, as outlined in Section 6, for feeder services.
On the issue of adding ``and which makes meaningful connections
with scheduled intercity bus service to more distant points'' at the
end of the first sentence, FTA agrees and added this language
accordingly. On the issue of adding language that encourages feeder
services to make regularly scheduled connections with intercity bus
services, FTA disagrees. FTA believes that this is a local operational
issue and should be resolved at the local level. On the issue of a
merit based selection process as applied to feeder service, FTA agrees
that States should use the same merit based selection process as
outlined in Section 6 and this process should be documented in the
State Management Plan.
One commenter submitted comments concerning ADA requirements. This
commenter suggested that FTA's explanation of ADA obligations in
relation to intercity bus operations was ``too light'' in its listing
of ADA obligations. This commenter pointed out other features of
accessibility that pertain to public and private intercity bus
operators alike, such as, the requirement to provide accommodation to
persons with disabilities and to make information on the operation
accessible to persons with sensory or cognitive impairments. This
commenter asked FTA to clarify whether the ADA ``stand in the shoes''
standard applies to private operators of intercity bus services who
[[Page 9070]]
receive public support through Section 5311(f).
On the issue of whether the Section 5311 Circular is ``too light''
in its listing of ADA obligations, FTA believes DOT's ADA regulation is
self-explanatory and that there is no need to repeat the regulation at
length in this circular. However, FTA revised the final circular to
state that while the ADA complementary paratransit provisions may not
apply to intercity bus, FTA notes that other relevant requirements of
49 CFR parts 27, 37, and 38 may apply to intercity bus service.
With regard to the ``stand in the shoes'' issue, FTA acknowledges
that DOT has proposed changes to 49 CFR 37.23 in an attempt to address
the relationship between a public and private entity where the private
entity was providing service under a contract or other arrangement,
with the ``other arrangement'' taking the form of a grant. FTA provided
a discussion on this issue in the section pertaining to Chapter X.
Eight commenters submitted comments on the Federal share
requirements. One commenter concurred with the Federal share for this
program, and recommended that FTA include the requirement of a 50
percent of net cost Federal share for operations and 80 percent for
capital projects and project administration in the final circular.
Seven commenters submitted comments supporting the use of verifiable
capital costs of the unsubsidized intercity bus network within its
borders as local match for a project involving Section 5311(f) services
that make meaningful connections to that unsubsidized intercity bus
network, when the entity operating the unsubsidized service approves of
such use. Two commenters suggested that FTA add the following paragraph
at the end of Section 11:
FTA is aware that the 50 percent local match requirement for
operating assistance for intercity bus services is problematic for
States attempting to develop networks of intercity bus services
since these services are, by definition, intercity, not local
services. In order to encourage the development of such networks,
FTA will allow a State to use the verifiable capital costs of the
unsubsidized intercity bus network within its borders as local match
for a project involving Section 5311(f) services that make
meaningful connections to that unsubsidized intercity bus network,
provided that the entity operating the unsubsidized service approves
of such use. In such cases, the project cost will be defined as the
net operating cost of the subsidized service plus the capital cost
of the unsubsidized intercity bus network and any other local match
as may be needed. Section 5311 funds can be used to fund up to 50
percent of that project cost.
Another commenter suggested that the following language be added to
Section 11:
In order to encourage the development of intercity networks, FTA
will allow a State to use the verifiable capital costs of the
unsubsidized intercity bus network within its borders as local match
for a project involving Section 5311(f) services that make
meaningful connections to that unsubsidized intercity bus network.
In such cases, the project cost will be defined as the net cost of
the subsidized service plus the capital cost of the unsubsidized
intercity bus network and any other local match as may be needed.
Section 5311(f) funds can be used to fund up to 50 percent of that
project cost.
FTA agrees in part with the proposal to use verifiable capital
costs of the unsubsidized intercity bus network within its borders as
local match, and approved a two-year pilot of In-Kind Match for
Intercity Bus (``Pilot Program''). This Pilot Program allows States to
use the capital costs of private sector intercity-bus service as in-
kind match for the operating costs of connecting rural intercity bus
feeder service funded under 49 U.S.C. 5311(f). FTA included an Appendix
to this notice that outlines the program terms of the Pilot Program.
I. Chapter IX--Rural Transportation Assistance Program
This chapter contains the renumbered Chapter VIII from Circular
9040.1E. Although it makes no significant substantive changes, it
reflects the new funding source for Rural Transportation Assistance
Program (RTAP) as defined by SAFETEA-LU. Prior to SAFETEA-LU, RTAP was
funded out of FTA's Research budget. SAFETEA-LU now funds RTAP with a 2
percent takedown from the Section 5311 program, with 85 percent going
to the States for local projects, and 15 percent to be used towards
national projects to supplement State projects, such as the maintenance
of a National RTAP resource center. This funding method ensures a
predictable source of annual funding.
Two commenters submitted multiple comments on this chapter. One
commenter applauded FTA for noting that SAFETEA-LU re-named this
program from ``Rural Transit Assistance Program'' to ``Rural
Transportation Assistance Program.'' This commenter further applauded
FTA for its accurate embodiment of SAFETEA-LU's substantive changes to
RTAP, and agrees that tribal transit technical assistance is a matter
of pressing need, but thinks that it is outside the scope of this
circular. This commenter also suggested that FTA update the list of
initiatives that parallel the national component of RTAP, such as
Project ACTION, the National Technical Assistance Center for Senior
Transportation, the National Resource Center for Human Service
Transportation Coordination, and the FTA/Labor Department JobLinks
initiative.
FTA agreed with this commenter and incorporated a link to other
National Technical Initiatives to Chapter 9, Section 6 of the final
circular.
Another commenter stated that this section incorrectly indicated
how many operators were in Alaska. This commenter suggests that when
next reviewing RTAP allocations, that FTA make RTAP apportionments to
States according to the population and area formulas already in place
for the 5311 program.
At the time of publication of the proposed circular, FTA used
information that was readily available; however, we discovered this was
not the most current information. FTA apologizes to the State of
Alaska. FTA did not receive other comments advising a change in the
RTAP formula, and will not be changing the formula at this time.
J. Chapter X--Other Provisions
This chapter combines Circular 9040.1E's Chapter IX ``Civil Rights
Requirements'' and Chapter X ``Other Provisions.'' Chapter X of the
revised circular incorporates the same text from those two existing
chapters. FTA renumbered and reorganized this text. The revised Chapter
X also: (1) Expands the public hearing and involvement requirement for
capital project planning to conform with SAFETEA-LU; (2) adds
standardized language on real property acquisition and relocation
assistance; (3) relieves the pre-award and post-deliver audit review
requirement for procurements of 20 vehicles or less; (4) amends the Buy
America section to reflect SAFETEA-LU changes regarding post-award
requests and the right of an adversely affected party to seek FTA
review; and (5) adds a new section on safety and security.
Four commenters submitted comments on this chapter, with some
commenters submitting multiple comments. One commenter raised the fact
that FTA and FHWA are in the process of drafting updated regulations
for statewide and metropolitan transportation planning that address the
National Environmental Policy Act (NEPA) compliance and environmental
protections, in addition to, core aspects of the planning requirements
incumbent on States and metropolitan planning organizations. This
commenter also
[[Page 9071]]
hopes that FTA is taking steps to assure that the Disadvantaged
Business Enterprise (DBE) language in the circular comports with DBE
rules and guidance that DOT has issued in recent months and years.
On February 14, 2007 FTA and FHWA published the new joint planning
regulation. There were no significant changes in the new planning rule
that are inconsistent with the more general information in this
circular relative to the Statewide or Metropolitan planning process.
Members of the public interested in the planning rulemaking may wish to
review the docket by going to http://dms.dot.gov and entering docket
number 22986. FTA agrees with the comment concerning DBE rules and
guidance. FTA is taking steps to assure that the DBE language in the
circular comports with DBE rules and guidance that DOT has issued.
Three commenters submitted comments on civil rights. One of these
commenters noted that FTA is in the process of revising its civil
rights circular that addresses a number of issues, including Title VI
compliance, environmental justice, and consideration of limited English
proficiency, and suggested that FTA reference these issues referenced
by this and other program management circulars.
FTA agrees with these comments, but declined to amend the final
circular to incorporate changes made in other reference documents until
these documents have gone through notice and comment, and have been
finalized. Members of the public interested in the transportation for
individuals with disabilities rulemaking may wish to review the docket
by going to http://dms.dot.gov and entering docket number 23227.
Another commenter stated that Chapter X fails to provide a specific
reference to the clarification of 49 CFR 37.23 in the Office of the
Secretary's Notice of Proposed Rulemaking ``Transportation for
Individuals with Disabilities.'' This commenter proposed highlighting
this change in the Section 5311 Circular because it affects grants,
sub-grants, cooperative agreements, and contracting for services.
FTA declines at this time to provide a specific reference to the
clarification of 49 CFR 37.23 in Chapter X of the final circular. With
regard to the ``stand in the shoes'' issue, FTA acknowledges that DOT
has proposed changes to 49 CFR 37.23 in an attempt to address the
relationship between a public and private entity where the private
entity was providing service under a contract or other arrangement,
with the ``other arrangement'' taking the form of a grant. In other
words, under current DOT policy and the proposed rule, Section 5311
subrecipients that are private non-profit agencies providing fixed
route public transit service would be required to provide complementary
paratransit. Traditional means of financial support for intercity bus,
such as vouchers or operating subsidies, would remain covered under 49
CFR 37.37(a), which would not be changed under the proposed rulemaking.
According to 49 CFR 37.37(a), a private entity does not become subject
to requirements applicable to a public entity simply ``because it
receives an operating subsidy from, is regulated by, or is granted a
franchise or permit to operate by a public entity.'' The nature of the
arrangement between the public entity and the private intercity
operator would determine whether Section 37.37 or Section 37.23
applies. In any case, the language likening intercity bus service to
commuter service in terms of applicability of the requirement to
provide ADA complementary paratransit is still valid and would not be
changed by the proposed ADA rulemaking.
Two commenters submitted comments on charter service. One commenter
agreed that FTA should not issue any new rules or regulations regarding
charter bus service until the negotiated rulemaking advisory committee
completes its work. This commenter suggested that FTA rely on its prior
charter bus rulings and existing legislation. Another commenter
suggested that FTA add a note that it has begun a negotiated rulemaking
process concerning its charter service regulations, and the outcome of
that rulemaking, when completed, likely will result in changes to this
circular's charter service language.
FTA agrees, and will rely on the existing regulations. However, FTA
can supplement the existing regulations with the language in SAFETEA-LU
to the extent the regulations do not conflict. In the interim,
recipients can forward any charter issues regarding a particular fact
scenario to the regions. FTA further suggests that interested parties
follow the rulemaking proceedings by going to http://dms.dot.gov and
entering docket number 22657 into the search criteria.
Two commenters suggested that FTA consider adding language to
Chapter X, Section 19, ``Safety'' to explain any expectations that FTA
has of its Section 5311 recipients and subrecipients in the area of
public transit security. One commenter submitted multiple comments
concerning safety and/or security. This commenter suggested that FTA
add a sentence to Section 19 that reads as follows:
FTA has entered into a Memorandum of Understanding with the
American Association of State Highway and Transportation Officials
(AASHTO), the American Public Transportation Association (APTA) and
the Community Transportation Association of America (CTAA) that
supports the transit industry and Federal commitment to bus safety,
and supports a model bus safety program to which all the signatories
of this agreement have agreed to subscribe.
FTA agrees, and incorporated the commenter's proposed language. FTA
further added the following sentence to the end of the commenter's
suggested language: ``This program will also focus on addressing the
needs of rural and small urban providers.'' FTA has reserved the right
to amend the final circular to incorporate changes, with regard to any
expectations that FTA has of its Section 5311 recipients and
subrecipients in the area of public transit security, made in other
reference documents that have gone through notice and comment, and have
been finalized.
K. Appendices
FTA proposed to re-label and reorganize Exhibits A-G of Circular
9040.1E as Appendices A-H of the revised circular. The proposed new
Appendix A contained revised application instructions that were
formerly contained in Chapter V of Circular 9040.1E. The proposed
Appendix B retained the Sample Selection of Projects that was formerly
Exhibit A, but FTA proposed amending it to recognize the transfer of
funds from the Section 5310, 5316, and 5317 programs. The proposed
Appendix C retained the Section 5311 budget information from the former
Exhibit B, and added new codes for the Section 5310, 5316, and 5317
programs. FTA proposed adding a new Appendix D to reflect the use of
flexible funds under SAFETEA-LU. FTA proposed to retain the next three
appendices without change: Appendix E retained the sample intercity bus
certification from the former Exhibit E with the addition of evidence
of consultation; Appendix F proposed to reserve the Section 5333(b)
labor protection warranty from the former Exhibit F; and Appendix G
retained the Capital Cost of Contracting percentage breakdowns from the
former Exhibit G. FTA proposed to add a new Appendix H, listing contact
information for FTA's Regional Offices.
Three commenters submitted comments on the Appendices to this
circular. One commenter asked whether
[[Page 9072]]
the Department of Labor (DOL) and/or FTA will publish the procedures
and afford States an opportunity to comment in response to the
statement in Appendix A. Section 1h. under Certification of Labor
Protective Arrangements that states, ``at the time of this draft, DOL
is preparing to revise its procedures for Section 5311.''
In response, FTA would like to clarify that DOL has not yet issued
a Notice of Proposed Rulemaking (NPRM), but may in coming months. FTA
anticipates that DOL will provide States an opportunity to submit
comments on this NPRM. FTA will advise the States how to access the
NPRM when DOL issues it.
Two commenters suggested that the following paragraph replace the
second paragraph and the second bracketed paragraph in Appendix E of
the Revised Guidelines:
The State has conducted an assessment of statewide intercity bus
mobility needs between (fill in dates), which dates are no more than
four years prior to the date of this certification. What follows is
a description of the assessment process and findings: * * * Prior to
this certification, as required by 5311(f)(2), the State consulted
with affected intercity bus operators. That consultation process
contained the four elements required by the circular and involved
the following activities: (Description of activities and how they
complied with required elements): Considering the State assessment
and the results of the consultation process, the basis for the
certification that there are no unmet intercity bus needs in the
State is (explain in detail).
These commenters believed this language would provide FTA with an
initial view of whether a State is complying with the new standards so
that it can move quickly when corrective action appears necessary.
FTA agrees and has incorporated these commenters' proposed language
into the final circular accordingly. FTA has adopted the remainder of
the Appendix as proposed, with minor technical corrections. FTA does
not now recommend consolidation of multiple programs into a single
grant, but retains the Scope code information for potential use. In the
final circular FTA has also added new data fields for subrecipient
information in the program of projects to comply with new requirements
contained in the Federal Funding Accountability and Transparency Act of
2006 (Pub. L. 109-282), enacted September 26, 2006.
Appendix 1. Implementation of Two-Year Pilot of In-Kind Match for
Intercity Bus
Prior to publication of the proposed circular, FTA had ongoing
conversations with intercity bus industry representatives, a private
consultant working on intercity bus issues, and a State DOT to
explore the possibility of capturing the value of unsubsidized
intercity bus service as a source of in-kind local match for
intercity bus projects funded with Section 5311(f). Greyhound and
the American Bus Association submitted comments to the docket for
the revisions to the Section 5311 program circular that reflected
the outcome of those preliminary conversations, and several States
submitted comments in support of the intercity bus industry's
proposal.
On October 20, 2006, FTA initiated a two-year pilot allowing
States to use the capital costs of private sector intercity-bus
service as in-kind match for the operating costs of connecting rural
intercity bus feeder service funded under 49 U.S.C. 5311(f).
Background
Title 49, U.S.C. 5311(f) requires each State to use 15 percent
of its annual apportionment under its Section 5311 program to
support intercity bus service, unless the Governor certifies that
the intercity bus needs of the states are adequately met. SAFETEA-LU
strengthened this requirement by requiring consultation with
intercity bus operators prior to certification.
In the last several years Greyhound has terminated most of its
rural service, but Greyhound and other private operators maintain
service between larger cities. Smaller regional carriers and rural
transit systems can help support the national network of intercity
bus service and meet the mobility needs of rural residents by
providing feeder service that connects rural communities to the
closest city with intercity bus service.
Several States have conducted comprehensive state intercity bus
needs assessments and identified corridors that could be supported
by Section 5311(f) funding for feeder service, providing intercity
connections to rural communities and increasing ridership and
productivity to help sustain the unsubsidized intercity service
provided by Greyhound and other operators.
However, even when the State was interested and willing to use
Section 5311(f) funds to meet identified needs and the private
operator needed and desired the connecting service, lack of sources
of local match often impeded implementation of the feeder service.
A consultant working with the State of Washington came up with a
creative financing concept, which Greyhound endorsed and promoted to
FTA. While FTA rejected the original proposal to use the entire
value of the unsubsidized intercity bus network in a State as a form
of credit to be awardable for match, FTA continued to work with the
advocates to refine the proposal. Several states and industry groups
sought FTA's approval of the financing concept in comments submitted
to the Docket for the proposed revisions to the Section 5311 program
circular. FTA internally discussed the proposal and agreed to test a
limited version of the financing concept in a two-year pilot for
Section 5311 grants obligated during FY 2007-2008.
In this notice, FTA addressed the financing concept in the
preamble but FTA did not incorporate the financing concept in the
Circular because FTA is limiting the financing concept to a two-year
period pilot. Depending on whether the pilot proves that the
financing concept is workable and beneficial, FTA may extend and
incorporate it into later iterations of the Section 5311 Circular,
or in future legislative proposals.
I. Implamentation Instructions
A. Defining the FTA Assisted Project
To use the capital provided by a private operator as in-kind
match, the FTA assisted project must be defined as including both
the feeder service and an unsubsidized segment of intercity bus
network to which it connects.
B. Costs Allowable As In-Kind Match
To be eligible to be used as in-kind match, a cost must be
otherwise allowable under the project. Thus, to be eligible under
Section 5311, the costs contributed by the private operator as in-
kind match must connect the rural community to further points. Also,
since FTA can only fund the net project cost and the private
operator is presumed to be collecting at least enough in fares to
cover the operating costs of the service, we are only allowing the
capital costs of the unsubsidized service to be used as in-kind
match. To simplify matters, we will use the percentages allowed in
the capital cost of contracting guidance to determine how much of
the private operator's total costs are attributable to capital.
(e.g., 50% where the operator provides and maintains all the
equipment, less if FTA funded equipment is provided.)
C. Simplified Example of a Project
Feeder Service--Rural Community A to Intercity Bus Terminal in City B
------------------------------------------------------------------------
------------------------------------------------------------------------
Total Operating Costs.......... $15,000 Service operates 2
round trips per day, 5
days per week. 1000
mile.
Less Farebox Revenue........... 5,000 Based on weekly
ridership of 20
passengers who use the
feeder to connect with
intercity service at
point B.
Net Operating costs............ 10,000 Subsidized by 5311(f).
------------------------------------------------------------------------
Note: City B may be either under or over 50,000 in population if the
origin in Point A is a non-urbanized area.
[[Page 9073]]
Connecting Service--From Intercity Bus Terminal in City B to Big City C
------------------------------------------------------------------------
------------------------------------------------------------------------
Total Operating Costs.......... $20,000 Documented fully
allocated costs (both
capital and operating)
of unsubsidized
privately operated
service--2 trips each
day that connect with
the feeder service.
(ten trips per week)
$40/hour. (If there
are more trips per day
that do not connect
with the feeder, those
costs aren't counted).
Less Operating Costs........... 10,000 The operating portion
of the fully allocated
costs is not allowable
as in-kind match
because the private
operator is not
operating at a loss,
so farebox revenues
are presumed to cover
all the operating
costs. Capital cost of
contracting ratios may
be used to determine
the percentage of the
total unsubsidized
cost of the private
service attributable
to capital--50% if no
FTA provided vehicles
are used. The
remainder is operating
costs.
Value of Capital contributed by 10,000 May be used as In-Kind
private operator. match.
------------------------------------------------------------------------
Note: Both City B and City C are on the route on which the private
intercity bus operator provides scheduled service. In this example
there is just one destination, but in other cases there may be
additional segments of the network included in the calculation--for
example, service from B to D as well as B to C.
FTA Assisted Project--Service From Rural Community A to Big City C
------------------------------------------------------------------------
------------------------------------------------------------------------
Operating Deficit Segment A-B.. $10,000 Funded by 5311(f)--
Federal Share.
Capital Costs Segment B-C...... 10,000 In-Kind Match--Local
Share.
Net Cost of project A-C........ 20,000 Net Project Cost--
included in program of
projects and in TEAM
Budget.
------------------------------------------------------------------------
Note: The example above assumes a 50/50 match ratio for operating
assistance. The Federal share may be greater if a State is eligible to
use the sliding scale match ratios.
D. Use of Private Capital as In-Kind Match for Subsidized Private
Sector Routes or Service Contracted From Private Operator
A contribution of unsubsidized private capital can also be used
to provide in-kind match when Section 5311(f) funds are used to
subsidize an unprofitable rural intercity bus route that might
otherwise be discontinued by the private operator. Section 5311(f)
funds can be used to pay for the operating deficit and the local
match can come from the capital costs contributed by the private
operator. Alternatively, a State (or local transit agency) can
contract with a private operator to provide rural intercity bus
service, and pay for the operating deficit with Section 5311(f)
funds, with the private operator providing in-kind match in the form
of the value of the unsubsidized capital portion of the contracted
service.
E. Excess or Insufficient In-Kind Match
If there is excess in-kind match available from the value of the
capital costs, it cannot be used to increase the Federal share above
the actual operating deficit of the project. In the simplified
example above, if the capital costs of the connecting service were
$12,000, the Federal share of the project provided in Section
5311(f) funds would still be $10,000 because that is what is needed
to pay the operating deficit of the feeder service. Only $10,000 of
the capital costs are used for in-kind match.
On the other hand, if the value of the unsubsidized capital
contribution does not provide sufficient in-kind match to equal the
Section 5311(f) funds needed to cover the operating deficit, the
State or local agency has to produce the difference in cash. In the
simplified example above, if the capital costs of the unsubsidized
service were only $8,000, the $10,000 operating deficit of the
feeder service could be paid with $8,000 in Section 5311(f) funds
and $2,000 in cash from other sources.
F. Period of Availability of the In-Kind Match
Once included in an approved grant obligated within the two-year
pilot period, the capital contribution described in the application
may be used as in-kind match until the Federal share is fully
expended.
G. Documentation Required in State's Application for Section 5311
When applying to use the unsubsidized capital as in-kind match,
the State must provide supplemental information with its Section
5311 grant application.
1. For each Section 5311(f) project using the match, the State
must provide a detailed description of the feeder service and the
connecting service, identifying locations served by each, and the
connections. Only those runs that actually connect with the feeder
service can be used for match. For example, if the private operator
makes four trips per day through point B but the feeder service only
operates twice daily, only the capital costs of the two daily
connecting trips can be used as in-kind match.
2. Itemize the total and net costs of each segment used in the
project description (for example A-B and B-C, by actual place names,
and level of service.) The value of the in-kind match must be based
on the documented fully allocated costs incurred by the private
operator in providing the connecting service, with reasonable
calculations by methods such as costs per mile, or costs per hour.
Capital Cost of Contracting percentages may be used to determine the
amount of fully allocated costs attributable to capital, unless the
operator can provide documentation that the capital costs (including
preventive maintenance) are higher. The detailed information may be
presented in table form, as in the simplified example above.
3. If the capital costs do not provide sufficient match for the
entire operating deficit of the feeder service, additional cash
match is required, and should be documented in the application.
4. The application should include documentation that the private
operator has consented to the arrangement, documented the costs of
the private service being used for in-kind match, and acknowledged
that the private service is part of the FTA project and thus is
covered by the labor warranty and other Federal requirements.
H. Regional Review and Processing of Grant Application
When a State applies to use this source of in-kind match during
the two-year pilot in FY 2007 or 2008, the FTA regional office will
review the documentation to ensure that the project as defined is
eligible for Section 5311(f) assistance and that sufficient local
match is provided by the in-kind capital contribution to match the
operating assistance provided.
I. Assessment of Pilot Project
FTA invites States and industry to comment on the implementation
of the pilot as it proceeds. Observations about any procedural
issues and reflections on the impact of the pilot in increasing the
rural intercity bus connections are welcome at any time. FTA
particularly invites you to submit an assessment on the two-year
pilot in July, 2008, when FTA expects to consider whether to extend
or terminate the pilot.
Issued in Washington, DC, this 22nd day of February, 2007.
James S. Simpson,
Administrator, Federal Transit Administration.
[FR Doc. E7-3452 Filed 2-27-07; 8:45 am]
BILLING CODE 4910-57-P