[Federal Register Volume 63, Number 215 (Friday, November 6, 1998)]
[Notices]
[Pages 60052-60105]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29683]



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Part II





Department of Transportation





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Federal Transit Administration



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FTA Fiscal Year 1999 Apportionments, Allocations and Program 
Information; Notice

  Federal Register / Vol. 63, No. 215 / Friday, November 6, 1998 / 
Notices  

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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration


FTA Fiscal Year 1999 Apportionments, Allocations and Program 
Information

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Notice.

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SUMMARY: The Omnibus Consolidated and Emergency Supplemental 
Appropriations Act, Fiscal Year 1999 includes Appropriations for 
Department of Transportation (DOT) and Related Agencies for fiscal year 
1999 (Pub. L. 105-277), signed into law by President Clinton on October 
21, 1998, and provides fiscal year 1999 appropriations for the Federal 
Transit Administration (FTA) transit assistance programs. Based upon 
this Act, the Transportation Equity Act for the 21st Century (TEA-21), 
and 49 U.S.C. Chapter 53, this Notice contains a comprehensive list of 
apportionments and allocations of the various transit programs.
    This Notice includes the apportionment of fiscal year 1999 funds in 
the 1999 Omnibus Appropriations Act for the Metropolitan Planning 
Program and State Planning and Research Program, the Urbanized Area 
Formula Program, the Nonurbanized Area Formula Program, the Elderly and 
Persons with Disabilities Program, the Rural Transit Assistance 
Program, and the Capital Program for Fixed Guideway Modernization. This 
Notice also contains the allocations of funds for the New Starts and 
Bus categories under the Capital Program in the 1999 Omnibus 
Appropriations Act. Also it contains general information about new 
programs established under TEA-21: the Clean Fuels Formula Program, the 
Over-the-Road Bus Accessibility Program, the Job Access and Reverse 
Commute Program, and the Transportation and Community and System 
Preservation Pilot Program.
    Information regarding TEA-21 funding authorization levels for use 
in developing Metropolitan Transportation Improvement Programs (TIPS) 
and State Transportation Improvement Programs (STIP) is also included. 
For informational purposes, this Notice contains the apportionment of 
fiscal year 1999 funds for the Federal Highway Administration (FHWA) 
Metropolitan Planning Program and the estimated apportionment of the 
fiscal year 1999 State Planning and Research Program.
    Included in this Notice is a listing of prior year unobligated 
allocations for the Section 5309 New Starts and Bus Programs as in 
previous year notices. In addition, the FTA policy regarding pre-award 
authority to incur project costs, the Letter of No Prejudice Policy, as 
well as other pertinent program information is included.

FOR FURTHER INFORMATION CONTACT:
The appropriate FTA Regional Administrator for grant-specific 
information and issues; Patricia Levine, Director, Office of Resource 
Management and State Programs, (202) 366-2053, for general information 
about the Urbanized Area Formula Program, the Nonurbanized Area Formula 
Program, the Elderly and Persons with Disabilities Program, the Rural 
Transit Assistance Program, the Clean Fuels Formula Program, the Over-
the-Road Bus Accessibility Program, or the Capital Program; or Robert 
Stout, Director, Office of Planning Operations, (202) 366-6385, for 
general information concerning the Metropolitan Planning Program, the 
State Planning and Research Program, and the Transportation and 
Community and System Preservation Pilot Program.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Overview of Appropriations for Grant Programs
    A. General
    B. TEA-21 Authorized Levels
    C. Project Management Oversight
III. Outreach
    A. FTA-Sponsored TEA-21 Listening Sessions
    B. Revised Program Guidance Circulars
IV. Emphasis Areas
    A. Americans with Disabilities Act Compliance
    B. National ITS Architecture and Standards Requirements
V. Transportation Electronic Awards and Management System
    A. Background
    B. Transportation of Electronic Awards and Management System
    C. Fiscal Year 1999 Emphasis
VI. Expanded Definition of Capital
    A. Preventive Maintenance
    B. ADA Complementary Paratransit Service
    C. Capital Cost of Contracting
VII. Section 5303 Metropolitan Planning Program and Section 5313(b) 
State Planning and Research Program
    A. Metropolitan Planning Program
    B. State Planning and Research Program
    C. Data Used for Metropolitan Planning Apportionments and State 
Planning and Research Apportionments
    D. FHWA Metropolitan Planning Program and State Planning and 
Research Program
    E. Local Match Waiver for Job Access Planning Activities
    F. Planning Emphasis Areas
    G. Federal Planning Certification Reviews
    H. Consolidated Planning Grant
    I. New Starts Evaluation and Criteria
    J. Metropolitan Transportation Improvement Programs (TIPs) and 
State Transportation Improvement Programs (STIPs)
    K. Metropolitan Planning
VIII. Section 5307 Urbanized Area Formula Program
    A. Total Urbanized Area Formula Apportionments
    B. Data Used for Urbanized Area Formula Apportionments
    C. Adjustments for Energy and Operating Efficiencies
    D. Urbanized Area Formula Fiscal Year 1999 Apportionments to 
Governors
    E. Transit Enhancements
    F. Fiscal Year 1999 Operating Assistance
    G. Carryover Funds for Operating Assistance
    H. Designated Transportation Management Areas
    I. Urbanized Area Formula Funds Used for Highway Purposes
IX. Section 5311 Nonurbanized Area Formula Program and Section 
5311(b) Rural Transit Assistance Program (RTAP)
    A. Nonurbanized Area Formula Program
    B. Rural Transit Assistance Program (RTAP)
X. Section 5310 Elderly and Persons With Disabilities Program
XI. Surface Transportation Program Flexible Funds Used for Transit 
Purposes (Title 23, U.S.C.)
    A. Transfer Process
    B. Matching Share for Flexible Funds
    C. Other Funds Transferred to FTA
XII. Section 5309 Capital Program
    A. Fixed Guideway Modernization
    B. New Starts
    C. Bus
XIII. New Programs
    A. Section 5308 Clean Fuels Formula Program
    B. Over-the-Road Bus Accessibility Program
    C. Job Access and Reverse Commute Program
    D. Transportation and Community and System Preservation Pilot 
Program
XIV. Unit Values of Data for Section 5307 Urbanized Area Formula 
Program, Section 5311 Nonurbanized Area Formula Program, and Section 
5309 Fixed Guideway Modernization Program
XV. Period of Availability of Funds
XVI. Automatic Pre-award Authority To Incur Project Costs
    A. Background
    B. Conditions
    C. Environmental, Planning, and Other Federal Requirements
XVII. Letter of No Prejudice Policy (Prior Approval of Pre-Award 
Authority)
    A. Policy
    B. Conditions
    C. Environmental, Planning, and Other Federal Requirements
    D. Request for LONP
XVIII. State Infrastructure Banks
XIX. FTA Home Page on the Internet
XX. 1999 Annual List of Certifications and Assurances
XXI. Grant Application Procedures Tables
    1. FTA Fiscal Year 1999 Appropriations for Grant Programs

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    2. FTA Fiscal Year 1999 Section 5303 Metropolitan Planning 
Apportionments and Section 5313(b) State Planning and Research 
Apportionments
    3. FHWA Fiscal Year 1999 Apportionment for the Metropolitan 
Planning Program and Estimated Fiscal Year 1999 Apportionment for 
the State Planning and Research Program
    4. FTA Fiscal Year 1999 Section 5307 Urbanized Area Formula 
Apportionments
    5. FTA Fiscal Year 1999 Section 5311 Nonurbanized Area Formula 
Apportionments, and Section 5311(b) Rural Transit Assistance Program 
(RTAP) Allocations
    6. FTA Fiscal Year 1999 Section 5310 Elderly and Persons With 
Disabilities Apportionments
    7. FTA Fiscal Year 1999 Section 5309 Fixed Guideway 
Modernization Apportionments
    8. FTA Fiscal Year 1999 Section 5309 New Start Allocations
    8A. FTA Prior Year Unobligated Section 5309 New Start 
Allocations
    9. FTA Fiscal Year 1999 Section 5309 Bus Allocations
    9A. FTA Prior Year Unobligated Section 5309 Bus Allocations
    10. FTA TEA-21 Authorization Levels (Guaranteed Funding Only)
    10A. FTA TEA-21 Authorization Levels (Guaranteed and 
Nonguaranteed Funding)
    11. FTA Fiscal Years 1999-2003 Apportionment Formula for Section 
5307 Urbanized Area Formula Program
    12. FTA Fiscal Years 1998-2003 Apportionment Formula for Section 
5309 Fixed Guideway Modernization Program
    13. Unit Values of Data--FTA FY 1999 Formula Grant 
Apportionments

I. Background

    Metropolitan Planning funds are apportioned by a statutory formula 
to the Governors for allocation by them to Metropolitan Planning 
Organizations (MPOs) in urbanized areas or portions thereof. State 
Planning and Research funds also are apportioned to states by a 
statutory formula. Urbanized Area Formula Program funds are apportioned 
by statutory formula to urbanized areas and to the Governors to provide 
capital, operating and planning assistance in urbanized areas. 
Nonurbanized Area Formula Program funds are apportioned by statutory 
formula to the Governors for capital, operating and administrative 
assistance in nonurbanized areas. The Elderly and Persons with 
Disabilities Program funds are apportioned by statutory formula to the 
Governors to provide capital assistance to organizations providing 
transportation service for the elderly and persons with disabilities. 
Fixed Guideway Modernization funds are apportioned by statutory formula 
to specified urbanized areas for capital improvements in rail and other 
fixed guideways. New Start and Bus funds identified in the Omnibus 
Appropriations Act are also included in this Notice.

II. Overview of Appropriations for Grant Programs

A. General

    The fiscal year 1999 appropriations for the FTA program is 
$5,390,000,000, the guaranteed funding level under TEA-21, plus an 
additional $25,000,000 above the guaranteed level to support the 
Administration's proposed and TEA-21 adopted Job Access and Reverse 
Commute Program.
    In fiscal year 1999, the appropriation for the Metropolitan 
Planning Program is $43,841,600 and $9,158,400 for the State Planning 
and Research Program. The appropriation for formula grants totals 
$2,850,000,000. Under statutory authority, the distribution of the 
total formula funds available is as follows: $4,849,950 is set aside 
for the Alaska Railroad, $50,000,000 for the Clean Fuels Formula 
Program is transferred to the Capital Investment Bus program, and 
$2,000,000 is for the Over-the-Road Bus Accessibility Program. Of the 
remaining amount of $2,793,150,050, 91.23 percent ($2,548,190,791) is 
made available to the Urbanized Area Formula Program, 6.37 percent 
($177,923,658) is made available to the Nonurbanized Area Formula 
Program, and 2.4 percent ($67,035,601) is made available to the Elderly 
and Persons with Disabilities Program.
    The other program appropriations contained in this Notice are as 
follows: $5,250,000 for the Rural Transit Assistance Program (RTAP); 
and $2,257,000,000 for the Capital Program. Of the Capital Program 
amount, $902,800,000 is for Fixed Guideway Modernization, $902,800,000 
is for New Starts, and $451,400,000 is for Bus Capital. In addition, 
$50,000,000 of formula funds for Clean Fuels was transferred to and 
merged with the Bus Capital Program increasing that program to 
$501,400,000. $75,000,000 is for the Job Access and Reverse Commute 
Program.
    Table 1 displays the amounts appropriated for these programs, 
including adjustments and final apportionment and allocation amounts. 
The following text provides a narrative explanation for the funding 
levels and other factors affecting these apportionments and 
allocations.

B. TEA-21 Authorized Program Levels

    TEA-21 provides a combination of trust and general fund 
authorizations that total $6,542,000,000 for fiscal year 1999 FTA 
program. Of this amount, $5,365,000,000 is guaranteed under the 
discretionary spending cap. See Table 9 for fiscal years 1998-2003 
guaranteed fund levels by program, and Table 9A for the total of 
guaranteed and non-guaranteed levels by program.
    Information regarding estimates of the fundings levels for 1999-
2003 by state and urbanized area is available on the FTA home page at 
www.fta.dot.gov. These numbers are for planning purposes only as they 
will be revised in the future but may be used for programming 
metropolitan transportation improvement programs and statewide 
transportation improvement programs.

C. Project Management Oversight

    49 U.S.C. Section 5327 allows the Secretary of Transportation to 
use not more than one-half percent of the funds made available under 
the Urbanized Area Formula Program, the Nonurbanized Area Formula 
Program; the National Capital Transportation Act, as 1 amended; and 
three-quarters percent of funds made available under the Capital 
Program to contract with any person to oversee the construction of any 
major project under these statutory programs; to conduct safety, 
procurement, management and financial reviews and audits; and to 
provide technical assistance to correct deficiencies identified in 
compliance reviews and audits. Therefore, one-half percent of the funds 
appropriated for the Urbanized Area Formula Program, the Nonurbanized 
Area Formula Program and the National Capital Transportation Act, as 
amended, for fiscal year 1999, and three-quarters percent of Capital 
Program funds have been reserved for these purposes before 
apportionment of funds.

III. Outreach

A. FTA-Sponsored TEA-21 Listening Sessions

    Over a thirty-day period that began in early September of 1998, the 
FTA conducted eight listening sessions for its customers and 
constituents. Sessions were held in Dallas, Portland, San Francisco, 
Atlanta, Kansas City, Chicago, Philadelphia, and New York.
    The sessions were designed to allow FTA leadership and staff to 
hear the concerns and issues that people had with respect to the 
implementation of TEA-21. The overwhelming majority of people who spoke 
during the sessions asked questions about new provisions, 
implementation schedules and funding levels. The principal issues in 
all of the

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sessions were changes in the New Start evaluation process, the new 
preventive maintenance provision, and the three new programs: Job 
Access and Reverse Commute; Clean Fuel Formula; and Over-the-Road Bus 
Accessibility.

B. Revised Program Guidance Circulars

    To incorporate changes introduced in TEA-21, FTA has issued revised 
program guidance circulars. New circulars, which are all effective 
October 1, 1998, include C9030.1C, Urbanized Area Formula Program: 
Grant Application Instructions; C9040.1E, Nonurbanized Area Formula 
Program Guidance and Grant Application Instructions; C9070.1E, Elderly 
and Persons with Disabilities Program Guidance and Grant Application 
Instructions; C9300.1A, Capital Program: Grant Application 
Instructions; and C5010.1C, Grant Management Guidelines.

IV. Emphasis Areas

A. Americans With Disabilities Act Compliance

    With eight years since the passage of the Americans with 
Disabilities Act (ADA), compliance with all aspects of ADA is one of 
FTA's highest priorities. FTA will continue to focus on grantees' 
compliance with ADA. Several grantees have entered into voluntary 
compliance agreements (VCAs) which represent their commitment to come 
into full compliance. FTA will continue to monitor the milestones in 
the VCAs and expects the grantees to meet them.
    TEA-21 and the fiscal year 1999 Omnibus Appropriations Act provide 
unprecedented levels of funding for public transportation and these 
increased funds should be utilized to ensure speedy and full compliance 
with all aspects of the ADA.
    Grantees that may have difficulties with ADA compliance should 
contact their FTA regional office as soon as they are aware of any 
problems.

B. National ITS Architecture and Standards Requirements

    Section 5206(e) of TEA-21 requires that Intelligent Transportation 
Systems (ITS) projects using funds from the Highway Trust Fund 
(including the Mass Transit Account) conform to the National ITS 
Architecture and Standards. Interim guidance on conformity with 
National ITS Performance Standards was issued October 2, 1998 jointly 
by FTA and FHWA. This document provides guidance for meeting this 
provision of TEA-21 and is available from the FTA regional office or on 
the internet at www.its.dot.gov. These standards and requirements apply 
to fiscal year 1999 bus allocations included in this notice which 
contain ITS components.
    Questions regarding the applicability of these standards and 
requirements should be addressed to the FTA regional office or Ronald 
Boenau, FTA Office of Research, Demonstration and Innovation at (202) 
366-0195.

V. Transportation Electronic Awards and Management System

A. Background

    The FTA Grants Management Information System (GMIS) became 
operational 10 years ago. In 1994 FTA began the Electronic Grant Making 
and Management (EGMM) initiative. The EGMM program is a paperless 
electronic grant application, review, approval, acceptance and 
management process. This program started as a pilot effort and involved 
20 grantees nationwide who served as pilots. By fiscal year 1998, 191 
grantees were participating in the FTA EGMM program. Over 800 grantees 
were on line for various management activities such as filing of 
financial and narrative status reports. In addition, grantees could use 
EGMM for the electronic signature of annual certifications and 
assurances. During the assessment of the GMIS, FTA became aware that 
the GMIS was not Year 2000 compliant.

B. Transportation Electronic Awards and Management System (TEAM)

    On November 2, 1998, FTA will introduce its third generation of 
electronic enhancements when the Transportation Electronic Awards and 
Management System, the TEAM system, becomes operational. This will make 
FTA's mission critical grant management systems Year 2000 compliant, 
and the FTA grant delivery process will not be interrupted. The TEAM 
system utilizes graphical user interface (GUI) technology providing 
point and click ``Smart'' selections that aid the grant recipients with 
their business process for submitting applications and management 
reporting.
    During fiscal year 1999, the TEAM system will use a dual grant 
numbering system which includes the current system and one that 
reflects the codification of Federal transit laws. For example, a 
current number may be NY-90-X321; the new number would be NY-5307-0321. 
Starting with fiscal year 2000, only the numbers reflecting the 
codification will be used.
    FTA outreach to the industry has been extensive and thorough. FTA 
personnel have traveled to 30 cities to conduct hands-on training 
sessions, which have attracted over 1,200 transit industry 
professionals--with more sessions underway until everyone who uses FTA 
programs can access the TEAM system. On September 30, 1998, FTA began 
distributing the TEAM system software to grantees at no charge and 
expects all grantees to apply for grants electronically in fiscal year 
1999.

C. Fiscal Year 1999 Emphasis

    In fiscal year 1999 FTA expects grantees to use the TEAM system 
grantees for grant application and approval, as well as for grant 
management activities if they have not already done so. FTA also 
expects all grantees to file the fiscal year 1999 Certifications and 
Assurances electronically using the TEAM system.

VI. Expanded Definition of Capital

A. Preventive Maintenance

    Preventive maintenance, an expense that became eligible for FTA 
capital assistance for one year with the DOT 1998 Appropriations Act, 
was established as permanently eligible for FTA capital assistance 
under TEA-21; therefore, FY 1998 funds and subsequent fiscal year 
appropriations may be used for preventive maintenance. Preventive 
maintenance costs are defined as all maintenance costs. For general 
guidance regarding eligible maintenance costs, the grantee should refer 
to the definition of maintenance in the most recent National Transit 
Database reporting manual. A grantee may continue to request assistance 
for capital expenses under the FTA policies governing associated 
capital maintenance items (spare parts), vehicle overhaul as 20 percent 
of maintenance, maintenance of vehicle leased under contract, and 
vehicle rebuilds (major re-work); or a grantee may choose to capture 
all maintenance under preventive maintenance. If a grantee purchases 
service instead of operating service directly, and maintenance is 
included in the contract for that purchased service, then the grantee 
may apply for preventive maintenance capital assistance under the 
capital cost of contracting policy. The capital cost of contracting 
policy is discussed below.
    For accounting purposes, the grantee is cautioned not to confuse 
the fact that an item generally considered to be an operating expense 
is eligible for FTA capital assistance. Generally accepted accounting 
principles and the grantee's accounting system detemine those costs 
that are to be accounting for as operating costs. The National Transit 
Database

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Reporting System (NTD) follows generally accepted accounting 
principles, so a grant recipient reporting to the NTD must report the 
operating costs the grant recipient has incurred as operating costs 
regardless of its eligibility for FTA capital assistance. Nevertheless, 
under provisions of TEA-21 and earlier under provision of the fiscal 
year 1998 Approriations Act, some of those operating costs, while 
continuing to be accounted for as operating costs in the grant 
recipient's accounting records, are now eligible for FTA capital 
assistance. Grantees may not count the same costs twice.

B. ADA Complimentary Paratransit Service

    TEA-21 expanded the definition of an eligible capital project to 
include: ``* * * the provision of nonfixed route paratransit 
transportation in accordance with Section 223 of the Americans with 
Disabilities Act of 1990 (42 U.S.C. 12143), but only for grant 
recipients that are in compliance with the applicable requirements of 
the Act, including both fixed route and demand responsive service, and 
only for amounts not to exceed 10 percent of such recipient's annual 
formula apportionment under sections 5307 and 5311.''
    Recipients of formula funds under the Urbanized Area Formula 
Program and the Nonurbanized Area Formula Program may now use up to 10 
percent of their annual formula apportionment to pay for ADA 
paratransit operating costs. Section 223 of the ADA defines the 
specific type of paratransit service that is eligible for this new 
provision which is implemented in Subpart F of the Department of 
Transportation's ADA regulation, which (at 49 CFR Part 37) explains the 
ADA paratransit eligibility process, and the service criteria (service 
area, response time, fares, trip purpose restrictions, hours and days 
of service and capacity constraints).
    a. ADA Compliance. Eligibility for using this expanded definition 
of capital is dependent upon compliance with ADA requirements. 
Currently, FTA grantees are required to certify compliance with ADA on 
an annual basis. Non-compliance with ADA is the result of a formal 
determination by FTA. Transit systems determined as being in non-
compliance are not eligible to use this provision. Grantees who do not 
make satisfactory progress in negotiating voluntary compliance 
agreements or who do not achieve milestones within signed agreements 
will lose their eligibility for funds for paratransit operating 
expenses.
    b. Non-ADA Paratransit. Operating costs associated with paratransit 
services which are not required by the ADA are not eligible for this 
funding option.
    c. Time of Costs Incurred. FTA reimbursement at the 80 percent 
Federal share for ADA paratransit costs under this provision must be by 
means of a grant awarded after June 9, 1998. Eligible costs must have 
been incurred in a local fiscal year ending after June 9, 1998.
    d. Implementation in UZA's with More than One Grantee. For those 
urbanized areas with more than one ADA paratransit provider, it will be 
the responsibility of the Metropolitan Planning Organization (MPO), 
working with the transit operators, to program up to 10 percent of the 
urbanized area's apportionment should it want to utilize this 
eligibility.

C. Capital Cost of Contracting

    Some FTA grantees contract for transit service, for maintenance 
service, or for vehicles that the grantee will use in transit service. 
FTA traditionally provides assistance for the capital consumed in the 
course of the contract. The concept of assisting with capital consumed 
is referred to as the ``capital cost of contracting.'' FTA provides 
assistance at the 80/20 FTA/local share ratio for the capital cost of 
contracting.
    To incorporate the fact that preventive maintenance is now an 
eligible capital cost, FTA has changed the admininstration of the 
Capital Cost of Contracting policy, effecitive with fiscal year 1998 
funds. Preventive maintenance costs are now included within the capital 
cost of contracting category, along with the capital charges for the 
use of assets (capital consumed). Consequently, revisions have been 
made to the schedule of precentages and type of contract used in the 
past. The new schedule appears in the revised Circular 9030.1C.

VII. Section 5303 Metropolitan Planning Program and Section 5313(b) 
State Planning and Research Program

A. Metropolitan Planning Program

    The fiscal year 1999 Metropolitan Planning apportionment to states 
for MPOs to be used in urbanized areas totals $43,901,198. This amount 
includes $43,841,600 in fiscal year 1999 appropriated funds, and 
$59,598 in prior year deobligated funds which have become available for 
reallocation for this program. A basic allocation of 80 percent of this 
amount ($35,120,958) is distributed to the states based on the state's 
urbanized area population as defined by the U.S. Census Bureau for 
subsequent state distribution to each urbanized area, or parts thereof, 
within each state. A supplemental allocation of the remaining 20 
percent ($8,780,240) is also provided to the States based on an FTA 
administrative formula to address planning needs in the larger, more 
complex urbanized areas. Table 2 contains the final state 
apportionments for the combined basic and supplemental allocations. 
Each state, in cooperation with the MPOs, must develop an allocation 
formula for the combined apportionment which distributes these funds to 
MPOs representing urbanized areas, or parts thereof, within the State. 
This formula, which must be approved by the FTA, must ensure to the 
maximum extent practicable that no MPO is allocated less than the 
amount it received by administrative formula under the Metropolitan 
Planning Program in fiscal year 1991 (minimum MPO allocation). Each 
state formula must include a provision for the minimum MPO allocation. 
Where the State and MPOs desire to use a new formula not previously 
approved by FTA, it must be submitted to the appropriate FTA Regional 
Office for prior approval.

B. State Planning and Research Program

    The fiscal year 1999 apportionment for the State Planning and 
Research Program totals $9,257,248. This amount includes $9,158,400 in 
fiscal year 1999 appropriated funds, and $98,848 in prior year 
deobligated funds which have become available for reallocation to this 
program. Final state apportionments for this program are also contained 
on Table 2. These funds may be used for a variety of purposes such as 
planning, technical studies and assistance, demonstrations, management 
training, and cooperative research. In addition, a state may authorize 
a portion of these funds to be used to supplement planning funds 
allocated by the state to its urbanized areas as the state deems 
appropriate.

C. Data Used for Metropolitan Planning and State Planning and Research 
Apportionments

    Population data from the 1990 Census is used in calculating these 
apportionments. The Metropolitan Planning funding provided to urbanized 
areas in each state by administrative formula in fiscal year 1991 was 
used as a ``hold harmless'' base in calculating funding to each State.

D. FHWA Metropolitan Planning Program and State Planning and Research 
Program

    For informational purposes, the fiscal year 1999 apportionment for 
the FHWA

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Metropolitan Planning Program and estimated apportionment for fiscal 
year 1999 State Planning and Research Program are contained in Table 3.

E. Local Match Waiver for Job Access Planning Activities

    Federal, state, and local welfare reform initiatives may require 
the development of new and innovative public and other transportation 
services to ensure that former welfare recipients have adequate 
mobility for reaching employment opportunities. In recognition of the 
key role that transportation plays in ensuring the success of welfare-
to-work initiatives, FTA and FHWA are continuing the policy established 
last year to permit waiver of the local match requirement for job 
access planning activities undertaken with metropolitan Planning 
Program and State Planning and Research Program funds. FTA and FHWA 
will support requests for waivers when they are included in 
metropolitan Unified Planning Work Programs and State Planning and 
Research Programs and meet all other appropriate requirements.

F. Planning Emphasis Areas

    (1) The Concept: The FTA and FHWA have cooperatively developed 
Planning Emphasis Areas (PEA) for fiscal years 1999 and 2000. Emphasis 
areas promote priority themes for consideration, as appropriate, in 
metropolitan and statewide transportation planning processes.
    (2) An Emphasis on System Management and Operation: TEA-21 
identifies system management and operation as a focal theme and context 
for transportation investment nationwide. The Conference Report 
supporting TEA-21 contains language that places high priority on 
Operations and Management, as indicated by the following excerpt. ``It 
is in the national interest to encourage and promote the safe and 
efficient management, operation, and development of surface 
transportation systems that will serve the mobility needs of people and 
freight and foster economic growth and development within and through 
urbanized areas * * *''
    TEA-21 identifies seven planning areas to be considered in 
metropolitan and statewide planning. These include:
    (A) support the economic vitality of the metropolitan area, 
especially by enabling global competitiveness, productivity, and 
efficiency;
    (B) increase the safety and security of the transportation system 
for motorized and nonmotorized users;
    (C) increase the accessibility and mobility options available to 
people and for freight;
    (D) Protect and enhance the enviroment, promote energy 
conservation, and improve quality of life;
    (E) enhance the integration and connectivity of the transportation 
system, across and between modes, for people and freight;
    (F) promote efficient system management and operation; and
    (G) emphasize the preservation of the existing transportation 
system.
    Planning area (F) promotes the consideration of efficient system 
management and operation in transportation planning processes and 
recognizes that we cannot always build our way out of congestion but 
need to better manage and operate the existing system. Many agencies 
that use a traditional capital intensive, capacity-enhancing 
programming process to address the area's transportation problems will 
need to review and revise their planning and programming process to 
consider system management and operations.
    (3) DOT Activities in Support of Management and Operations: FTA and 
FHWA will work to support metropolitan areas and states in their 
efforts to incorporate system management and operation strategies in 
their local planning processes.
    DOT is spearheading an effort to develop a collaborative dialogue 
among a broad range of transportation stakeholders leading to a 
consenus of the role of management and operations in transportation 
decision-making. This dialogue would identify customer needs for 
training and technical assistance. Support for integrated planning and 
application of Intelligent Transportation Systems (ITS) strategies, 
including the role of ITS National Architecture, is another effort 
supporting system management and operation.
    (4) Next Steps: FTA and FHWA will be working over the coming months 
to support further development of the added emphasis on System 
Management and Operation and outline a comprehensive approach for 
consideration and use by MPOs.

G. Federal Planning Certification Reviews

    Federal certification of the planning process is conducted in a 
Transportation Management Area (TMA), which is an urbanized area with a 
population of 200,000 and above or other urbanized areas designated by 
the Secretary of Transportation (the Secretary). The Secretary is 
responsible for certifying, at least once every three years, that the 
metropolitan transportation planning process in the TMA is being 
carried out under applicable provisions of Federal law.
    Dates for site visits for the TMAs to be reviewed in fiscal year 
1999 are being established and will be available on the FTA Home Page 
at http://www.fta.gov/office/planning.
    For further information regarding Federal certifications of the 
planning process contact: For FTA: Mr. Charles Goodman, FTA 
Metropolitan Planning Division (TPL-12), 202-366-1944; or Scott Biehl, 
FTA Office of Chief Counsel (TCC-30), 202-366-4063. For FHWA: Mr. 
Sheldon Edner, FHWA Metropolitan Planning Division (HEP-20), 202-366-
4066; or Reid Alsop, FHWA Office of the Chief Counsel (HCC-31), 202-
366-1371.

H. Consolidated Planning Grant

    In fiscal year 1997, FTA and FHWA began offering states the option 
of participating in a pilot Consolidated Planning Grant (CPG) program. 
Eleven states are participating in the pilot so far. Since the first 
CPG grant was awarded in April 1997, more than $95,000,000 has been 
obligated by the pilot states. Of this total, more than $69,700,000 is 
from FHWA sources. Of the eleven participants, nine have completed at 
least one full year under the pilot. Of the nine, two states have 
elected to continue the pilot with new, separate CPG grants for the 
second year. This approach treats the CPG much as FHWA funds are 
treated currently; that is, as basically annual apportionments with a 
yearly close-out of project activities and a deobligation and 
reobligation cycle. Seven states have elected to amend the original CPG 
grant to add new fiscal year funds to treat the CPG more like an FTA 
grant, but with even greater flexibility. Under the multi-year approach 
option, the CPG grant would stay open for a period of years to be 
determined by the state (and MPO, jointly, for Metropolitan Planning 
funds) with the approval of the Federal Government. New apportionments 
can be added by grant amendment as funds become available. The ease 
with which a state can opt for the single year or the multi-year 
approach to the CPG grant speaks to the flexibility intended for the 
program.
    One of our original goals in developing the CPG Pilot was to give 
states and MPOs more control over their planning resources with a 
combination of broader financial controls and greater flexibility in 
the management of their planning activities. After more than one full 
year's experience under the pilot,

[[Page 60057]]

FTA's annual review of planning program fund balances and potential 
lapsing funds revealed that none of the pilot states had funds in 
danger of lapsing (under FTA's planning programs, funds that are 
unobligated after four years' time lapse to the state). Further, only 
two of the eleven pilot states have any FTA planning funds available 
that were appropriated before fiscal year 1998. As in previous years, 
pre-award authority is granted to both of FTA's planning programs as 
part of this annual Notice. This pre-award authority enables states to 
continue planning program activities from year to year with the 
assurance that eligible costs can later be converted to a regularly 
funded Federal project without the need for prior approval or 
authorization from the granting agency.
    This November, FTA will be providing an enhancement to its 
electronic grant system (TEAM system) that can be used to request 
planning grants, obligate funds, monitor fund balances and grant 
status, and file financial and status reports for the CPG. While 
benefiting all grants, these enhancements are particularly well suited 
to the very streamlined funding request format of the CPG Pilot. As 
part of the pilot, FTA will continue to work with participating states 
to increase the flexibility and further streamline the consolidated 
approach to planning grants. For further information on participating 
in the CPG Pilot, contact Ms. Candace Noonan, Intermodal and Statewide 
Planning Division, FTA, at (202) 366-1648 or Anthony Solury, 
Metropolitan Planning Division, FHWA, at (202) 366-5003.

I. New Starts Evaluation and Criteria

    TEA-21 includes several changes to the evaluation process and 
criteria for New Starts fixed guideway projects. The Secretary shall 
consider several additional criteria in the Department's review and 
evaluation of candidate New Starts projects. FTA will be required to 
evaluate each project authorized for New Starts funding by each 
criterion, as well as provide an overall project rating of ``highly 
recommended,'' ``recommended,'' and ``not recommended.'' In addition to 
its annual report to Congress on Funding Levels and Allocations of 
Funds for Transit Major Capital Investments, FTA will be required to 
issue a supplemental report in August of each year which rates all 
projects that have completed alternatives analysis and preliminary 
engineering since the date of the last report. FTA must also approve 
candidate New Starts project's entry into final design. FTA also 
continues its prior approval authority for entrance into preliminary 
engineering.
    TEA-21 requires that no less than 92 percent of the annual New 
Starts program must be used for final design and construction.
    FTA will soon issue regulations implementing the New Starts 
provision of TEA-21.

J. Metropolitan Transportation Improvement Programs (TIPs) and State 
Transportation Improvement Programs (STIPs)

    Both the TIPs and STIPs, major products of the metropolitan and 
State transportation planning processes, continue to be required under 
TEA-21 and 23 CFR part 450. TEA-21 has provided new authorization 
levels as well as new programs for the FTA and FHWA. Development of 3-
year TIPs and STIPs requires knowledge of Federal FTA and FHWA funding 
amounts and sources. With respect to Federal funding sources, 
``available'' or ``committed'' funds identified in TIPs and STIPs are 
to be taken to mean authorized and/or appropriated funds. Authorized 
amounts for the purposes of TEA-21 include the total of guaranteed and 
nonguaranteed funding. FTA and FHWA funding amounts and sources for the 
six years of TEA-21 are provided by State and/or urbanized areas on the 
Internet at the following locations: (1) FTA, http://www.fta.dot.gov/
library/policy/t21toc.htm and (2) FHWA, http://www.fhwa.dot.gov/tea21/
98appor.htm.

K. Metropolitan Planning

    TEA-21 retains much of the basic structure of the metropolitan and 
statewide planning process, as established by ISTEA, with a few 
significant changes. The set of sixteen metropolitan planning factors 
has been reduced to seven factors: economic vitality; safety and 
security; accessibility and mobility; environment, energy conservation 
and quality of life; integration and connectivity; efficient operation 
and management; and preservation of existing transportation resources. 
Freight shippers and users of public transit are added to the explicit 
set of stakeholders to be given opportunities to comment on 
metropolitan plans and transportation improvement programs (TIPs).
    Metropolitan planning organizations (MPOs) may include in their 
TIPs an ``illustrative'' list of projects that could be implemented if 
additional resources were made available. MPOs will also be encouraged 
to coordinate the planning for Federally-funded non-emergency 
transportation services as part of the metropolitan planning process. 
FTA and FHWA will be revising the Joint Planning Regulations (23 CFR 
part 450 and 49 CFR part 613) to formally incorporate changes to the 
planning program.

VIII. Section 5307 Urbanized Area Formula Program

A. Total Urbanized Area Formula Apportionments

    In addition to the appropriated fiscal year 1999 Urbanized Area 
Formula funds of $2,548,190,791, the apportionment also includes 
$5,055,703 in deobligated funds which have become available for 
reapportionment for the Urbanized Area Formula Program as provided by 
49 U.S.C. 5336(i).
    Table 4 displays the amount apportioned for the Urbanized Area 
Formula Program. After the one-half percent for oversight is set-aside 
($12,740,954), the amount appropriated for this program is 
$2,543,135,088. The funds to be reapportioned, described in the 
previous paragraph, have then been added. Thus, the total amount 
apportioned for this program is $2,540,505,540.
    An additional $4,849,950 is appropriated for the Alaska Railroad 
for improvements to its passenger operations. After the one-half 
percent for oversight is reserved ($24,250), $4,825,700 is available 
for the Alaska Railroad.
    Table 2 contains the fiscal years 1999-2003 apportionment formula 
for the Section 5307 Urbanized Area Formula Program.

B. Data Used for Urbanized Area Formula Apportionments

    Data from the 1997 NTD (49 U.S.C. 5335) Report Year submitted in 
late 1997 and early 1998 have been used to calculate the fiscal year 
1999 Urbanized Area Formula apportionments for urbanized areas 200,000 
in population and over. The population and population density figures 
used in calculating the Urbanized Area Formula are from the 1990 
Census.

C. Adjustments for Energy and Operating Efficiencies

    49 U.S.C. 5336(b)(2)(E) provides that, if a recipient of Urbanized 
Area Formula Program funds demonstrates to the satisfaction of the 
Secretary that energy or operating efficiencies would be achieved by 
actions that reduce revenue vehicle miles but provide the same 
frequency of revenue service to the same number of riders, the 
recipient's apportionment under 49 U.S.C. 5336(b)(2)(A)(i) shall not be 
reduced as

[[Page 60058]]

a result of such actions. One recipient has submitted data acceptable 
to FTA in accordance with this provision. Accordingly, the revenue 
vehicle miles used in the Urbanized Area Formula database to calculate 
the fiscal year 1999 Urbanized Area Formula apportionment reflect the 
amount the recipient would have received without the reductions in 
mileage.

D. Urbanized Area Formula Fiscal Year 1999 Apportionments to Governors

    The total Urbanized Area Formula apportionment to the Governor for 
use in areas under 200,000 in population for each state is shown on 
Table 4. Table 4 also contains the total apportionment amount 
attributable to each of the urbanized areas within the state. The 
Governor may determine the allocation of funds among the urbanized 
areas under 200,000 in population with one exception. As further 
discussed below in Section H, funds attributed to an urbanized area 
under 200,000 in population, located within the planning boundaries of 
a transportation management area, must be obligated in that area.

E. Transit Enhancements

    For urbanized areas with populations 200,000 and over, TEA-21 
established a minimum annual expenditure requirement of one percent for 
transit projects and project elements that qualify as enhancements 
under the Urbanized Area Formula Program. Table 4 indicates the amount 
set aside for enhancements in these areas. The term ``transit 
enhancement'' includes projects or project elements that are designed 
to enhance mass transportation service or use and are physically or 
functionally related to transit facilities.
    (1) Eligible enhancements. Following are the transit projects and 
project elements that may be counted to meet the minimum enhancement 
expenditure requirement.
    (a) Historic preservation, rehabilitation, and operation of 
historic mass transportation buildings, structures, and facilities 
(including historic bus and railroad facilities);
    (b) Bus shelters;
    (c) Landscaping and other scenic beautification, including tables, 
benches, trash receptacles, and street lights;
    (d) Public art;
    (e) Pedestrian access and walkways;
    (f) Bicycle access, including bicycle storage facilities and 
installing equipment for transporting bicycles on mass transportation 
vehicles;
    (g) Transit connections to parks within the recipient's transit 
service area;
    (h) Signage; and
    (i) Enhanced access for persons with disabilities to mass 
transportation.
    (2) Requirements. One percent of the Urbanized Area Formula Program 
apportionment in each urbanized area with a population of 200,000 and 
over must be made available only for transit enhancements. When there 
are several grantees in an urbanized area, it is not required that each 
grantee spend one percent of its Urbanized Area Formula Program funds 
on transit enhancements. Rather, one percent of the urbanized area's 
apportionment must be expended on projects and project elements that 
qualify as enhancements. If these funds are not obligated for transit 
enhancements within three years following the fiscal year in which the 
funds are apportioned, the funds will lapse and no longer be available 
to the urbanized area, and will be reapportioned under the Urbanized 
Area Formula Program.
    It will be the responsibility of the MPO to determine how the one 
percent will be allotted to transit projects. The one percent minimum 
requirement does not preclude more than one percent being expended in 
an urbanized area for transit enhancements. Items that are only 
eligible as enhancements, however--in particular, operating costs for 
historic facilities--may only be assisted within the one percent fund 
level.
    (3) Project Budget. The project budget for each grant application 
that includes enhancement funds must include a scope code for transit 
enhancements and specific budget activity line items for transit 
enhancements.
    (4) Enhancement Report. The recipient must submit a report to the 
appropriate FTA Regional Office listing the projects or elements of 
projects carried out with those funds during the previous fiscal year 
and the amount expended. The report must be submitted in the Federal 
fiscal year's final quarterly report, using activity line item codes 
from the approved project budget.
    (5) Bicycle Access. TEA-21 provides that projects providing bicycle 
access to transit assisted with the FTA enhancement apportionment shall 
be eligible for a 95 percent Federal share.
    (6) Enhanced Access for Persons with Disabilities. Enhancement 
projects or elements of projects designed to enhance access for persons 
with disabilities must go beyond the requirements contained in the 
Americans with Disabilities Act.

F. Fiscal Year 1999 Operating Assistance

    Fiscal year 1999 funding for operating assistance is available only 
to urbanized areas with populations under 200,000. For these smaller 
areas, there is no limitation on the amount of the state apportionment 
that may be used for operating assistance, and the Federal/local share 
ratio is 50/50. In addition, for all areas, many of the activities 
formerly funded by FTA with operating assistance are now eligible 
capital items under the category of preventive maintenance at the 
Federal/local share ratio of 80/20. TEA-21 provides one exception to 
the non-availability of funds for operating assistance to areas with 
populations 200,000 and above. Operating assistance is available to any 
urbanized area with a populations of 200,000 and above if the number of 
total bus revenue vehicle miles operated in or directly serving the 
area is under 900,000, and if the number of buses operated in or 
directly serving the area does not exceed 15.
    This provision is not available to small operators within a large 
urbanized area in which the total number of vehicles that provide 
service is more than 15 and the total number of bus revenue vehicle 
miles operated in or directly servicing the area is 900,000 or more.
    The Omnibus Appropriations Act amended Section 3027 of TEA-21 
(which in turn amended 49 U.S.C. 5336 regarding use of operating 
assistance in larger urbanized areas) to allow transit providers of 
services to the elderly and disabled that operate 20 or fewer vehicles 
and are located in urbanized areas with a population of at least 
200,000 to use Federal funds to finance the operating costs of 
equipment and facilities used by the transit provider in providing mass 
transit services to elderly persons and persons with disabilities, 
providing that such assistance to all entities should not exceed 
$1,000,000,000 annually.

G. Carryover Funds for Operating Assistance

    The operating assistance limitations remain on the unused fiscal 
years 1996-1998 funds. These funds continue to be available for 
obligation at the Federal/local share ratio of 50/50 in fiscal year 
1999 and throughout the period of availability. For unused fiscal year 
1998 funds for areas under 200,000, operating assistance as a capital 
project with an 80 percent federal match ratio (without limitation) 
will continue to be available in fiscal year 1999 and throughout the 
period of availability.

[[Page 60059]]

H. Designated Transportation Management Areas

    All urbanized areas over 200,000 in population have been designated 
as transportation management areas (TMAs), in accordance with 49 U.S.C. 
Section 5305. These designations were formally made in a Federal 
Register Notice dated May 18, 1992 (57 FR 21160), signed by the Federal 
Highway Administrator and the Federal Transit Administrator. Additional 
areas may be designated as TMAs upon the request of the Governor and 
the MPO designated for such area or the affected local officials. As of 
October 1, 1998, two additional TMAs have been formally designated: 
Petersburg, Virginia, comprised solely of the Petersburg, Virginia, 
urbanized area; and Santa Barbara, Santa Maria, and Lompoc, California, 
which were combined and designated as one TMA.
    Guidance for setting the boundaries of TMAs is contained in the 
joint transportation planning regulations codified at 23 CFR part 450 
and 49 CFR part 613. In some cases, the TMA boundaries, which have been 
established by the MPO for the designated TMA, also include one or more 
urbanized areas with less than 200,000 in population. Where this 
situation exists, the discretion of the Governor to allocate Urbanized 
Area Formula program ``Governor's Apportionment'' funds for urbanized 
areas with less than 200,000 in population is restricted.
    As required by 49 U.S.C. 5307(a)(2), a recipient(s) must be 
designated to dispense the Urbanized Area Formula funds attributable to 
TMAs. Those urbanized areas that do not already have a designated 
recipient must name one and notify the appropriate FTA regional office 
of the designation. This would include those urbanized areas with less 
than 200,000 in population that may receive TMA designation 
independently, or those with less than 200,00 in population which are 
currently included within the boundaries of a larger designated TMA. In 
both cases, the Governor would only have discretion to allocate 
Governor's Apportionment funds attributable to areas which are outside 
of designated TMA boundaries. In order for the FTA and Governors to 
know which urbanized areas under 200,000 in population are included 
within the boundaries of an existing TMA, and so that they can be 
identified in future Federal Register notices, each MPO whose TMA 
planning boundaries include these smaller urbanized areas is asked to 
identify such areas to the FTA. This notification should be made in 
writing to the Associate Administrator for Program Management, Federal 
Transit Administration, 400 Seventh Street, SW, Washington, DC 20590, 
no later than July 1 of each fiscal year. To date, FTA has been 
notified of the following urbanized areas with less than 200,000 in 
population that are included within the planning boundaries of 
designated TMAs:

----------------------------------------------------------------------------------------------------------------
                                                                                Small urbanized area included in
                                Designated TMA                                           TMA boundaries
----------------------------------------------------------------------------------------------------------------
Baltimore, Maryland...........................................................  Annapolis, Maryland.
Dallas-Fort Worth, Texas......................................................  Denton, Texas; Lewisville,
                                                                                 Texas.
Houston, Texas................................................................  Galveston, Texas; Texas City,
                                                                                 Texas.
Orlando, Florida..............................................................  Kissimmee, Florida.
Philadelphia, Pennsylvania....................................................  Pottstown, Pennsylvania.
Pittsburgh, Pennsylvania......................................................  Monessen, Pennsylvania;
                                                                                 Steubenville-Weirton, OH-WV-PA
                                                                                 (PA portion)
Seattle, Washington...........................................................  Bremerton, Washington.
Washington, DC-MD-VA..........................................................  Frederick, Maryland (MD
                                                                                 portion).
----------------------------------------------------------------------------------------------------------------

I. Urbanized Area Formula Funds Used for Highway Purposes

    Urbanized Area Formula funds apportioned to a TMA are also 
available for highway projects if the following three conditions are 
met: (1) Such use must be approved by the MPO in writing after 
appropriate notice and opportunity for comment and appeal are provided 
to affected transit providers; (2) in the determination of the 
Secretary, such funds are not needed for investments required by the 
Americans with Disabilities Act of 1990 (ADA); and (3) the MPO 
determines that local transit needs are being addressed.
    Urbanized Area Formula funds which are designated for highway 
projects will be transferred to and administered by the FHWA. The MPO 
should notify FTA of its intent to program FTA funds for highway 
purposes.

IX. Section 5311 Nonurbanized Area Formula Program and Section 
5311(b) Rural Transit Assistance Program (RTAP)

A. Nonurbanized Area Formula Program

    The fiscal year 1999 Nonurbanized Area Formula apportionments to 
the states totaling $177,856,722 are displayed in Table 5. Of the 
$177,923,658 appropriated, one-half percent ($889,618) was reserved for 
oversight. In addition to the current appropriation, the funds 
available for apportionment included $822,682 in deobligated funds from 
fiscal years prior to 1999.
    The population figures used in calculating these apportionments are 
from the 1990 Census.
    The Nonurbanized Formula Program provides capital, operating and 
administrative assistance for areas under 50,000 in population. Each 
state must spend no less than 15 percent of its fiscal year 1999 
Nonurbanized Area Formula apportionment for the development and support 
of intercity bus transportation, unless the Governor certifies to the 
Secretary that the intercity bus service needs of the state are being 
adequately met. Fiscal year 1999 Nonurbanized Area Formula grant 
applications must reflect this level of programming for intercity bus 
or include a certification from the Governor.
    Funding for the Nonurbanized Area Formula Program is significantly 
higher under TEA-21 than it was under the Intermodal Surface 
Transportation Efficiency Act of 1991 (ISTEA). FTA encourages the 
states to use the increase to begin to expand the coverage of transit 
service into rural and small urban areas currently unserved and to 
improve levels of service in those areas which currently have only 
minimal transit service.

B. Rural Transit Assistance Program (RTAP)

    The fiscal year 1999 RTAP allocations to the states totaling 
$5,401,831 are also displayed on Table 5. This amount includes 
$5,250,000 in fiscal year 1999 appropriated funds, and $151,831 in

[[Page 60060]]

prior year deobligated funds, which have become available for 
reallocation for this program.
    The funds are allocated to the states to undertake research, 
training, technical assistance, and other support services to meet the 
needs of transit operators in nonurbanized areas. These funds are to be 
used in conjunction with the states' administration of the Nonurbanized 
Area Formula Program.
    Effective with fiscal year 1999, FTA has revised the administrative 
formula used to allocate RTAP funds to the states, by increasing the 
minimum allocation each state receives from $50,000 to $65,000. The 
minimum allocation for the insular areas remains at $10,000. The effect 
of this change is to distribute the increase in RTAP funds more 
equitably to the smaller states, to enable them to continue to provide 
effective RTAP services. Due to the increase in program funding, no 
state receives an allocation in fiscal year 1999 that is less than in 
fiscal year 1998.

X. Section 5310 Elderly and Persons with Disabilities Program

    A total of $67,136,222 is apportioned to the states for fiscal year 
1999 for the Elderly and Persons with Disabilities Program. In addition 
to the fiscal year 1999 appropriation of $67,035,601, the fiscal year 
1999 apportionment also includes $100,621 in prior year unobligated 
funds which have become available for reapportionment for the Elderly 
and Persons with Disabilities Program. Table 6 shows each state's 
apportionment.
    The formula for apportioning these funds uses 1990 Census 
population data for persons aged 65 and over and for persons with 
disabilities.
    The funds provide capital assistance for transportation for elderly 
persons and persons with disabilities. Eligible capital expenses may 
include, at the option of the recipient, the acquisition of 
transportation services by a contract, lease, or other arrangement.
    While the assistance is intended primarily for private non-profit 
organizations, public bodies that coordinate services for the elderly 
and persons with disabilities, or any public body that certifies to the 
state that non-profit organizations in the area are not readily 
available to carry out the service, may receive these funds.
    These funds may be transferred by the Governor to supplement the 
Urbanized Area Formula or Nonurbanized Area formula capital funds 
during the last 90 days of the fiscal year.

XI. Surface Transportation Program Flexible Funds Used for Transit 
Purposes (Title 23, U.S.C.)

A. Transfer Process

    TEA-21 made changes in how funds are to be transferred from FHWA to 
FTA. Under ISTEA, obligation authority was not transferred to and from 
FTA. TEA-21 provides that obligation authority will be transferred to 
and from FHWA to FTA. In order to accommodate this change, FHWA and FTA 
are revising internal transfer procedures. The external process from 
transferring funds may also be revised. Until these revised procedures 
are developed, the two agencies have agreed to use the transfer process 
that was established under ISTEA which is described below.
    Flexible DOT funds, such as Surface Transportation Program (STP) 
funds, Congestion Mitigation and Air Quality (CMAQ) funds, or others, 
which are designated for use in transit projects, are transferred from 
the FHWA to FTA after which FTA approves the project and awards a 
grant. Flexible funds designated for transit projects must result from 
the metropolitan and state planning and programming process, and must 
be included in an approved State Transportation Improvement Program 
(STIP) before the funds can be transferred. In order to initiate the 
transfer process, the grantee must submit a completed application to 
the FTA Regional Office, and must notify the state highway/
transportation agency that it has submitted an application which 
requires a transfer of funds. Once the state highway/transportation 
agency determines that the state has sufficient obligation authority, 
the state agency notifies the FHWA Division Office that the funds are 
to be used for transit purposes. FHWA then notifies the FTA of the 
transfer project for processing and obligation. The flexible funds 
transferred to FTA will be placed in an urbanized area or state account 
for one of the three existing formula programs--Urbanized Area, 
Nonurbanized Area, or Elderly and Persons with Disabilities.
    The flexible funds are then treated as FTA formula funds, although 
they retain a special identifying code. They may be used for any 
purpose eligible under these FTA programs. All FTA requirements are 
applicable to transferred funds. Flexible funds should be combined with 
regular FTA formula funds in a single annual grant application.

B. Matching Share for Flexible Funds

    The provisions of Title 23, U.S.C. regarding the non-Federal share 
apply to Title 23 funds used for transit projects. Thus, flexible funds 
transferred to FTA retain the same matching share that the funds would 
have if used for highway purposes and administered by the FHWA.
    There are three instances in which a higher than 80 percent Federal 
share would be maintained. First, in states with large areas of Indian 
and certain public domain lands, and national forests, parks and 
monuments, the local share for highway projects is determined by a 
sliding scale rate, calculated based on the percentage of public lands 
within that state. This sliding scale, which permits a greater Federal 
share, but not to exceed 95 percent, is applicable to transit projects 
funded with flexible funds in these public land states. FHWA develops 
the sliding scale matching ratios for the increased Federal share.
    Secondly, commuter carpooling and vanpooling projects and transit 
safety projects using flexible funds administered by FTA may retain the 
same 100 percent Federal share that would be allowed for ride-sharing 
or safety projects administered by the FHWA. The third instance 
includes the 100 percent Federal safety projects; however, these are 
subject to a nationwide 10 percent program limitation.

C. Other Funds Transferred to FTA

    Certain demonstration projects authorized in title 23 are specified 
to be used for transit projects and are more appropriately administered 
by FTA. In such cases, FHWA has transferred the funds to FTA for 
administration. Since these funds are not STP flexible funds, they are 
transferred into the appropriate Capital Program category (Bus, New 
Starts, or fixed Guideway Modernization) for obligation and are 
administered as Capital projects.

XII. Section 5309 Capital Program

A. Fixed Guideway Modernization

    TEA-21 modified the formula for allocating the Fixed Guideway 
Modernization funds. The new formula contains seven tiers. The 
allocation of funding under the first four tiers, through fiscal year 
2003, will be allocated based on data used to apportion the funding in 
fiscal year 1997. Funding in the three new tiers will be apportioned 
based on the latest available route miles and revenue vehicle miles on 
segments at least seven years old as reported to the National Transit 
Database.
    Table 7 displays the fiscal year 1999 Fixed Guideway Modernization 
apportionments. Fixed Guideway

[[Page 60061]]

Modernization funds apportioned for this section must be used for 
capital projects to maintain, modernize, or improve fixed guideway 
systems.
    All urbanized areas with fixed guideway systems that are at least 
seven years old are eligible to receive Fixed Guideway Modernization 
funds. A request for the start-up service dates for fixed guideways has 
been incorporated into the National Transit Database reporting system 
to ensure that all eligible fixed guideway data is included in the 
calculation of these apportionments. A threshold level of more than one 
mile of fixed guideway is required to receive Fixed Guideway 
Modernization funds. Therefore, urbanized areas reported one mile or 
less of Fixed Guideway mileage under the National Transit Database are 
not included.
    For fiscal year 1999, $902,800,000 was appropriated for fixed 
guideway modernization. After deducting the three-fourth percent for 
Oversight ($6,771,000), $896,029,000 is available for apportionment to 
the specified urbanized areas.
    Each year, the new fixed guideway modernization formula will 
allocate funds by seven tiers as follows:
Tier 1
    The first $497,700,000 shall be apportioned to the following 
urbanized areas as follows: Baltimore $8,372,000; Boston $38,948,000; 
Chicago/Northwestern Indiana $78,169,000; Cleveland $9,509,500; New 
Orleans $1,730,588; New York $176,034,461; Northeastern New Jersey 
$50,604,653; Philadelphia/Southern New Jersey $58,924,764; Pittsburgh 
$13,662,463; San Francisco $33,989,571; Southwestern Connecticut 
$27,755,000.
Tier 2
    The next $70,000,000 shall be apportioned as follows: 50 percent to 
areas identified in Tier I and 50 percent to other urbanized areas with 
fixed guideway segments which have been in operation at least seven 
years. These funds are apportioned using the Urbanized Area Formula 
Program fixed guideway tier formula factors that were used to apportion 
funds for the Fixed Guideway Modernization Program in fiscal year 1997.
Tier 3
    The next $5,700,000 shall be apportioned to the following urbanized 
areas as follows: Pittsburgh, 61.76 percent; Cleveland, 10.73 percent; 
New Orleans, 5.79 percent; the remaining 21.72 percent is apportioned 
to all other cities using the same fixed guideway tier data used for 
Tier II.
Tier 4
    The next $186,600,000 shall be apportioned to all eligible areas 
using the same year fixed guideway tier data that was used for Tiers II 
and III.
Tier 5
    The next $70,000,000 shall be apportioned as follows: 65 percent to 
the eleven areas specified in Tier I, and 35 percent to other urbanized 
areas with fixed guideway system segments in revenue service for at 
least seven years. Allocations will be based on the latest available 
route miles and revenue vehicle miles for fixed guideway segments at 
least seven years old as reported to the National Transit Database.
Tier 6
    The next $50,000,000 shall be apportioned as follows: 60 percent to 
the eleven areas specified in Tier I, and 40 percent to the other 
urbanized areas with fixed guideway system segments in revenue service 
for at least seven years. Allocations will be based on the latest 
available route miles and revenue vehicle miles for fixed guideway 
segments at least seven years old as reported to the National Transit 
Database.
Tier 7
    Any remaining amounts shall be apportioned as follows: 50 percent 
to the eleven urbanized areas specified in Tier I, and 50 percent to 
the other urbanized areas with fixed guideway system segments in 
revenue service for at least seven years. Allocations will be based on 
the latest available route miles and revenue vehicle miles for fixed 
guideway segments at least seven years old as reported to the National 
Transit Database.
    Table 12 contains the fiscal years 1998-2003 apportionment formula 
for the Section 5309 Fixed Guideway Modernization Program.

B. New Starts

    The fiscal year 1999 appropriation for New Starts is $902,800,000 
which was fully allocated in the fiscal year 1999 DOT Appropriations 
Act. However, by statute, this amount is reduced by three-fourth 
percent ($6,771,000) for Oversight activities, leaving $896,029,000 
available for allocations to areas. The Oversight reduction was applied 
on a prorata basis to all 95 projects specified in the fiscal year 1999 
Omnibus Appropriations Act yielding the final allocation for each of 
these projects (contain in Table 8 of this Federal Register Notice).
    Prior year unobligated appropriations for New Starts in the amount 
of $430,856,230 remain available for obligation in fiscal year 1999. 
These carryover amounts are displayed in Table 8A, along with 
explanatory notes.
    Since New Starts funds are used for design and construction of new 
systems or extensions to existing systems, preventive maintenance is 
not an eligible cost under this program.

C. Bus

    The fiscal year 1999 appropriation for Bus is $451,400,000 for the 
purchase of buses, bus-related equipment and paratransit vehicles, and 
for the construction of bus-related facilities. TEA-21 established a 
$100,000,000 Clean Fuels Formula Program under Section 5308. The 
program is authorized to be funded with $50,000,000 from the Bus 
category of the Capital Program, and $50,000,000 from the Formula 
Program. However, the fiscal year 1999 Omnibus Appropriations Act 
directs FTA to transfer $50,000,000 Appropriated under the Formula 
Program to and merge it with funding provided for the Bus category of 
the Capital Program. Thus, $501,400,000 is available for funding the 
Bus category of the Capital Program. After deducting the three-fourth 
percent for oversight ($3,760,500), $497,639,500 remains available for 
projects.
    The 1999 Omnibus Appropriations Act earmarked all of the fiscal 
year 1999 Bus funds to specified states or localities for bus and bus-
related projects.
    Because the three-fourth percent for oversight was subtracted from 
the amount appropriated, each bus project identified in the Conference 
Report receives three-fourth percent less than the funding level 
contained in the report. No funds remain available for discretionary 
allocation by the Federal Transit Administrator. Table 9 displays the 
allocations of the fiscal year 1999 Bus funds by area and also shows 
prior year unobligated earmarks for the Bus Program. The fiscal year 
1999 bus allocations include the funding which would have been 
available for the Clean Fuels Formula Program under TEA-21.
    Prior year unobligated appropriations for Bus in the amount of 
$379,813,842 remain available for obligation in fiscal year 1999, and 
are displayed in Table 9A.

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XIII. New Programs

A. Section 5308 Clean Fuels Formula Program

    TEA-21 established a $100,000,000 Clean Fuels Formula Program under 
Section 5308, to be funded with $50,000,000 from the Bus category of 
the Capital Program, and $50,000,000 from the Formula Program. However, 
the fiscal year 1999 Omnibus Appropriations Act transfers $50,000,000 
appropriated under the Formula Program to and merges it with funding 
provided for the replacement, rehabilitation and purchase of buses and 
related equipment and the construction of bus related facilities under 
the Bus category of the Capital Program. In addition, in fiscal year 
1999 Congress allocated the entire Bus category, including the 
$100,000,000, which TEA-21 provides for funding of the Clean Fuels 
Formula Program. These appropriation actions override the provisions 
established in TEA-21 for the Clean Fuels Formula Program. Therefore, 
FTA cannot implement this new program. A rulemaking to implement the 
Clean Fuels Formula program is being developed for use in fiscal year 
2000. The fiscal year 1999 Bus Allocations on Table 9 include the 
funding which would have been available for the Clean Fuels Formula 
Program under TEA-21.

B. Over-the-Road Bus Accessibility Program

    The Over-the-Road Bus Accessibility Program (OTRB) authorizes FTA 
to make grants to operators of over-the-road buses to finance the 
incremental capital and training costs of complying with the DOT over-
the-road bus accessibility final rule, published on September 24, 1998. 
The legislation calls for national solicitation of applications, with 
grantees to be selected on a competitive basis. Federal funds are 
available for up to 50 percent of the project cost. A total of 
$2,000,000 is apportioned for intercity fixed route operators in fiscal 
year 1999.
    FTA is exploring two approaches for implementation of the capital 
portion of the program. One approach would be to enter into a 
cooperative agreement with an intermediate entity which represents the 
over-the-road bus industry. This entity would serve as the funding 
distribution mechanism. This approach has the merit of consolidating 
numerous small grants and would allow a group familiar with the over-
the-road bus industry to carry out the program. The entity would accept 
and review grant applications and make recommendations for funding 
based on the criteria in TEA-21 and in coordination with FTA and enter 
into agreements with over-the-road bus providers. The entity would also 
pass on all Federal requirements to the over-the-road bus operators. 
TEA-21 provides that all Federal requirements applicable to the Section 
5311 Nonurbanized Area Formula Program are applicable to the Over-the-
Road Bus Program. Federal requirements include but are not limited to 
competitive procurement, labor protections, Buy America, and civil 
rights requirements.
    Alternately, FTA may implement the program with individual grants 
to over-the-road bus operators. With this approach, there would be a 
national solicitation of applications and FTA would review applications 
against the criteria in TEA-21 and make recommendations for funding. 
The appropriate FTA regional office would review the application and 
approve the grant.
    In addition, FTA is proposing to enter into an agreement with a 
single agency which represents the disability community to take the 
lead on a national training initiative.
    FTA will issue further guidance and application instructions for 
this program.

C. Job Access and Reverse Commute Program

    A total of $75,000,000 is appropriated for the Job Access and 
Reverse Commute Program in fiscal year 1999. Of this amount, 
$50,000,000 is guaranteed under the discretionary spending cap and 
$25,000,000 was made available from other discretionary spending 
offsets. This program, established under TEA-21, provides funding for 
the provision of transportation services designed to increase access to 
jobs and employment-related activities. Job Access projects are those 
which transport welfare recipients and low-income individuals in urban, 
suburban, or rural areas to and from jobs and activities related to 
their employment. Reverse Commute projects provide transportation 
services for the general public from urban, suburban, and rural areas 
to suburban employment opportunities.
    One of the major goals of the Job Access and Reverse Commute 
program is to increase collaboration among transportation providers, 
human service agencies, employers, metropolitan planning organizations, 
states, and affected communities and individuals. All projects funded 
under this program must be derived from a regional Job Access and 
Reverse Commute Transportation Plan, developed through a regional 
approach which supports the implementation of a variety of 
transportation services designed to connect welfare recipients to jobs 
and related activities. A key element of the program is making the most 
efficient use of existing public, nonprofit and private transportation 
service providers.
    A Federal Register Notice will be published by the end of October 
which will provide program guidance and application procedures. The 
notice will also be available on the FTA website.

D. Transportation and Community and System Preservation Pilot Program 
(TCSP)

    Section 1221 of TEA-21 established a pilot program that will enable 
grantees to plan or implement activities that investigate and address 
the relationship between transportation and community and system 
preservation. Eligible grantees are State agencies, metropolitan 
planning organizations (MPOs) and units of local governments, including 
public transit agencies. TCSP will provide $20,000,000 in fiscal year 
1999 and $25,000,000 per year for fiscal years 2000 through 2003 for 
planning and implementation grants, as well as research, which address 
transportation efficiency while meeting community preservation and 
environmental goals.
    TCSP activities must be eligible under Title 23 (the Federal 
highway program) of Chapter 52 of Title 49 (the Federal transit 
program) of the United States Code, or must be activities which the 
Secretary of Transportation determines to be appropriate. TCSP 
discretionary grants will be used to plan and implement strategies 
which (1) improve the efficiency of the transportation system; (2) 
reduce the impacts of transportation on the environment; (3) reduce the 
need for costly future public infrastructure; (4) ensure efficient 
access to jobs, services and centers of trade, and (5) encourage 
private sector development patterns which achieve these goals. Grants 
will be directed to new and innovative activities that are eligible but 
under the current Federal-aid program. TCSP activities must be 
coordinated with the MPO and/or state transportation planning 
processes.
    The FHWA is administering this program and has established an 
interagency working group, which includes the FTA, to design and 
implement TCSP. On September 16, 1998, a Federal Register Notice 
requested comments within 60 days on TCSP implementation in fiscal year 
2000 and beyond. The Notice also requested that eligible entities 
interested in applying for fiscal year 1999 planning and implementation 
grants should

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submit letters of intent within 60 days. The DOT expects to select 
about 50 letters of intent to be developed into full proposals, and to 
fund 20 to 30 planning and implementation grants in fiscal year 1999. 
TCSP research activities will begin in fiscal year 2000. The voice mail 
for information on TCSP is (800) 488-6034.

XIV. Unit Values of Data for the Section 5307 Urbanized Area 
Formula Program, Section 5311 Nonurbanized Area Formula Program, 
and Section 5309 Capital Fixed Guideway Modernization

    For technical assistance purposes, the dollar unit values of data 
derived from the computations of the Urbanized Area Formula Program, 
the Nonurbanized Area Formula Program, and the Capital Program--Fixed 
Guideway Modernization apportionments are included in this Notice in 
Table 13. To determine how a particular apportionment amount was 
developed, areas may multiply their population, population density, and 
data from the NTD by these unit values.

XV. Period of Availability of Funds

    The funds apportioned under the Metropolitan Planning Program and 
the State Planning and Research Program, the Urbanized Area Formula 
Program, and the Fixed Guideway Modernization Program, in this notice, 
will remain available to be obligated by FTA to recipients for three 
fiscal years following fiscal year 1999. Any of these apportioned funds 
unobligated at the close of business on September 30, 2002 will revert 
to FTA for reapportionment under these respective programs.
    Funds apportioned to nonurbanized areas under the Nonurbanized Area 
Formula Program, including RTAP funds, will remain available for two 
fiscal years following fiscal year 1999. Any such funds remaining 
unobligated at the close of business on September 30, 2001, will revert 
to FTA for reapportionment among the states under the Nonurbanized Area 
Formula Program. Funds allocated to States under the Elderly and 
Persons with Disabilities Program in this Notice must be obligated by 
September 30, 1999. Any such funds remaining unobligated as of this 
date will revert to FTA for reapportionment among the states under the 
Elderly and Persons with Disabilities Program. The fiscal year 1999 
Omnibus Appropriations Act includes a provision requiring that fiscal 
year 1999 New Starts and Bus funds not obligated for their original 
purpose as of September 30, 2001, shall be made available for other 
discretionary projects within the respective categories of the Capital 
Program. Similar provisions in the 1998 and 1997 DOT Appropriations 
Acts required that fiscal year 1998 Bus and New Starts funds that are 
not obligated by September 30, 2000 also be made available for other 
discretionary Bus or New Starts projects, respectively; and fiscal year 
1997 Bus and New Starts funds unobligated by September 30, 1999 shall 
be made available for other discretionary Bus or New Starts projects, 
respectively.

XVI. Automatic Pre-Award Authority to Incur Project Cost

A. Background

    Since fiscal year 1994, FTA has provided pre-award authority to 
cover certain planning and capital costs prior to grant award. This 
automatic pre-award spending authority permits a grantee to incur costs 
on an eligible transit capital or planning project without prejudice to 
possible future Federal participation in the cost of the project or 
projects. Prior to exercising pre-award authority, grantees must comply 
with the conditions and environmental planning and other Federal 
requirements outlined in paragraphs B and C immediately below. Failure 
to do so will render an otherwise eligible project ineligible for FTA 
financial assistance. In addition, grantees are strongly encouraged to 
consult with the appropriate regional office if there could be any 
question regarding the eligibility of the project for future FTA funds 
or the applicability of the conditions and Federal requirements.
    Authority to incur costs for fiscal year 1998 Fixed Guideway 
Modernization, Metropolitan Planning, Urbanized Area Formula, Elderly 
and Persons with Disabilities, Nonurbanized Area Formula, STP or CMAQ 
flexible funds to be transferred from the FHWA and State Planning and 
Research Programs in advance of possible future Federal participation 
was provided in the December 5, 1997, Federal Register Notice. Pre-
award authority was extended in the June 24, 1998 Federal Register 
Notice on TEA-21 to all formula funds and flexible funds that will be 
apportioned during the authorization period of TEA-21, 1998-2003. Pre-
award authority also applies to Capital Bus funds identified in this 
notice. Pre-award authority does not apply to Capital New Start funds, 
or to Capital Bus projects not specified in this or previous notices. 
Pre-award authority also applies to preventive maintenance costs 
incurred within a local fiscal year ending during calendar year 1997, 
or thereafter, under the formula programs cited above.

B. Conditions

    Similar to the FTA Letter of No Prejudice (LONP) authority, the 
conditions under which this authority may be utilized are specified 
below:
    (1) This pre-award authority is not a legal or moral commitment 
that the project(s) will be approved for FTA assistance or that FTA 
will obligate Federal funds. Furthermore, it is not a legal or moral 
commitment that all items undertaken by the applicant will be eligible 
for inclusion in the project(s).
    (2) All FTA statutory, procedural, and contractual requirements 
must be met at the appropriate time.
    (3) No action will be taken by the grantee that prejudices the 
legal and administrative findings which the Federal Transit 
Administrator must make in order to approve a project.
    (4) Local funds expended by the grantee pursuant to and after the 
date of this authority will be eligible for credit toward local match 
or reimbursement if FTA later makes a grant for the project(s) or 
project amendment(s).
    (5) The Federal amount of any future FTA assistance to the grantee 
for the project will be determined on the basis of the overall scope of 
activities and the prevailing statutory provisions with respect to the 
Federal/local match ratio at the time the funds are obligated.
    (6) For funds to which this authority applies, the authority 
expires with the lapsing of the fiscal year funds.

C. Environmental, Planning, and Other Federal Requirements

    FTA emphasizes that all of the Federal grant requirements must be 
met for the project to remain eligible for Federal funding. Some of 
these requirements must be met before pre-award costs are incurred, 
notably the requirements of the National Environmental Policy Act 
(NEPA), and the planning requirements. Compliance with NEPA and other 
environmental laws or executive orders (e.g., protection of parklands, 
wetlands, historic properties) must be completed before state or local 
funds are spent on implementing activities such as final design, 
construction, and acquisition for a project that is expected to be 
subsequently funded with FTA funds. Depending on which class the 
project is included under in FTA environmental regulations (23 CFR part 
771), the grantee may not advance the project beyond planning and 
preliminary engineering before FTA has approved either a categorical 
exclusion (refer to 23 CFR part 771.117(d)), a finding of no

[[Page 60064]]

significant impact, or a final environmental impact statement. The 
conformity requirements of the Clean Air Act (40 CFR part 93) also must 
be fully met before the project may be advanced with non-Federal funds.
    Similiarly, the requirement that a project be included in a locally 
adopted metropolitan transportation improvement program and federally 
approved statewide transportation improvement program must be followed 
before the project may be advanced with non-Federal funds. In addition, 
Federal procurement procedures, as well as the whole range of Federal 
requirements, must be followed for projects in which Federal funding 
will be sought in the future. Failure to follow any such requirements 
could make the project ineligible for Federal funding. In short, this 
increased administrative flexibility requires a grantee to make certain 
that no Federal requirements are circumvented through the use of pre-
award authority. If a grantee has questions or concerns regarding the 
environmental requirements, or any other Federal requirements that must 
be met before incurring costs, it should contact the appropriate 
regional office.
    Before an applicant may incur costs either for activities expected 
to be funded by New Start funds, or for Bus Capital projects not listed 
in this notice or previous notices, it must first obtain a written LONP 
from FTA. To obtain an LONP, a grantee must submit a written request 
accompanied by adequate information and justification to the 
appropriate FTA regional office.

XVII. Letter of No Prejudice Policy (Prior Approval of Pre-Award 
Authority)

A. Policy

    The latest guidance on Letters of No Prejudice (LONP) policy and 
procedures is contained in an October 21, 1982 Federal Register Notice. 
Since the issuance of that notice in 1982 there have been many changes 
to the FTA program including automatic pre-award authority for formula 
funds, flexible funds transferred from the FHWA and for bus earmarks. 
The 1982 policy was based on the philosophy that LONPs would only be 
issued under the most extenuating circumstances. With substantial 
experience with automatic pre-award authority, this philosophy is no 
longer an accurate reflection of FTA policy. This Federal Register 
Notice supersedes the Letter of No Prejudice (LONP) policy issued 
October 21, 1982.
    LONP authority allows an applicant to incur costs on a future 
project utilizing non-Federal resources with the understanding that the 
costs incurred subsequent to the issuance of the LONP may be 
reimbursable as eligible expenses or eligible for credit toward the 
local match should the FTA approve the project at a later date. LONPs 
are applicable to projects not covered by automatic pre-award 
authority. The majority of LONPs will be for New Starts not covered 
under a full funding grant agreement or for Section 5309 bus funds not 
yet appropriated by Congress. At the end of an authorization period, 
there may be LONPs for formula funds beyond the life of the current 
authorization.
    Under most circumstances the LONP will cover the total project. 
Under certain circumstances the LONP may be issued for local match 
only. In such cases the local match would be to permit real estate to 
be used for match for the project at a later date.

B. Conditions

    The following conditions apply to all LONPs.
    (1) LONP pre-award authority is not a legal or moral commitment 
that the project(s) will be approved for FTA assistance or that FTA 
will obligate Federal funds. Furthermore, it is not a legal or moral 
commitment that all items undertaken by the applicant will be eligible 
for inclusion in the project(s).
    (2) All FTA statutory, procedural, and contractual requirements 
must be met.
    (3) No action will be taken by the grantee that prejudices the 
legal and administrative findings which the Federal Transit 
Administrator must make in order to approve a project.
    (4) Local funds expended by the grantee pursuant to and after the 
date of the LONP will be eligible for credit toward local match or 
reimbursement if FTA later makes a grant for the project(s) or project 
amendment(s).
    (5) The Federal amount of any future FTA assistance to the grantee 
for the project will be determined on the basis of the overall scope of 
activities and the prevailing statutory provisions with respect to the 
Federal/local match ratio at the time the funds are obligated.
    (6) For funds to which this pre-award authority applies, the 
authority expires with the lapsing of the fiscal year funds.

C. Environmental, Planning, and Other Federal Requirements

    As with automatic pre-award authority, FTA emphasizes that all of 
the Federal grant requirements must be met for the project to remain 
eligible for Federal funding. Some of these requirements must be met 
before pre-award costs are incurred, notably the requirements of the 
National Environmental Policy Act (NEPA), and the planning 
requirements. Compliance with NEPA and other environmental laws or 
executive orders (e.g., protection of parklands, wetlands, historic 
properties) must be completed before state or local funds are spent on 
implementation activities such as final design, construction, or 
acquisition for a project expected to be subsequently funded with FTA 
funds. Depending on which class the project is included under in FTA's 
environmental regulations (23 CFR part 771), the grantee may not 
advance the project beyond planning and preliminary engineering before 
FTA has approved either a categorical exclusion (refer to 23 CFR part 
771.117(d)), a finding of no significant impact, or a final 
environmental impact statement. The conformity requirements of the 
Clean Air Act (40 CFR part 93) also must be fully met before the 
project may be advanced with non-Federal funds.
    Similarly, the requirement that a project be included in a locally 
adopted metropolitan transportation improvement program and federally 
approved statewide transportation improvement program must be followed 
before the project may be advanced with non-Federal funds. In addition, 
Federal procurement procedures, as well as the whole range of Federal 
requirements, must be followed for projects in which Federal funding 
will be sought in the future. Failure to follow any such requirements 
could make the project ineligible for Federal funding. In short, this 
pre-award authority requires a grantee to make certain that no Federal 
requirements are circumvented. If a grantee has questions or concerns 
regarding the environmental requirements, or any other Federal 
requirements that must be met before incurring costs, it should contact 
the appropriate regional office.

D. Request for LONP

    Before an applicant may incur costs for a project not covered by 
automatic pre-award authority, it must first submit a written request 
for an LONP to the appropriate regional office. This written request 
must include a description of the project for which pre-award authority 
is desired and a justification for the request.

XVIII. State Infrastructure Banks

    The State Infrastructure Bank (SIB) pilot program was authorized in 
the National Highway System Designation Act of 1995. It allows the 
creation of state-level institutions that can use Federal Highway 
Administration (FHWA) and FTA funds to make loans

[[Page 60065]]

and loan guarantees (and other forms of credit enhancement) to transit 
and highway projects. The SIBs may earn interest on deposits of Federal 
funds, and they may charge below-market interest rates on long-term 
loans.
    While 31 states established SIBs under the NHS Act authorizations, 
TEA-21 only renewed this authority to four states--California, Florida, 
Missouri, and Rhode Island. Thus, the original SIBs may continue to 
function with funds appropriated for their use in 1996 and 1997, but 
only the four SIBs authorized in TEA-21 will be allowed to use fiscal 
year 1998 and subsequent year grant funds for capitalization. These 
states may use up to 100 percent of their highway or transit formula 
funds for capitalization, but there are no additional funds apportioned 
specifically to SIBs. TEA-21 also allowed the four authorized SIBs to 
use any Federal capital funds to make loans to highway, transit, and 
rail projects--a significant increase in flexibility.

XIX. FTA Home Page on the Internet

    FTA provides extended customer service by making available transit 
information on the FTA Home Page web site, including this Apportionment 
Notice. Also posted on the web site are FTA program circulars: 
C9030.1C, Urbanized Area Formula Program: Grant Application 
Instructions, dated October 1, 1998; C9040.1E, Nonurbanized Area 
Formula Program Guidance and Grant Application Instructions, dated 
October 1, 1998; C9070.1E, Elderly and Persons with Disabilities 
Program Guidance and Application Instructions, dated October 1, 1998; 
C9300.1A, Capital Program: Grant Application Instructions, dated 
October 1, 1998; 4220.1D, Third Party Contracting Requirements, dated 
April 15, 1996; C5010.1C, Grant Management Guidelines, dated October 1, 
1998; and C8100.1B, Program Guidance and Application Instructions for 
Metropolitan Planning Program Grants, dated October 25, 1996. The 
fiscal year 1999 Annual List of Certifications and Assurances is also 
posted on the FTA web site. Other documents on the FTA web site of 
particular interest to public transit providers and users include the 
1997 Statistical Summaries of FTA Grant Assistance Programs, and the 
National Transit Database Profiles.
    The FTA Home Page may be accessed at: http://www.fta.dot.gov. FTA 
circulars and other guidance are at: http://www.fta.dot.gov/program.
    Grantees should check our web site frequently to keep up to date on 
new postings.

XX. 1999 Annual List of Certifications and Assurances

    The Fiscal Year 1999 Annual List of Certifications and Assurances 
is published in conjunction with the Apportionments, as per 49 U.S.C. 
section 5307(k). It appears as a separate Part of the Federal Register 
on the same date whenever possible. The 1999 list contains several 
changes to the previous year's Federal Register publication. (1) All 
applicants for FTA Capital Program or Formula Program assistance, and 
current grantees with an active project financed with FTA Capital 
Program or Formula Program assistance, will be required to provide the 
Appendix A Certifications and Assurances within 90 days from the date 
of the above Federal Register publication or with its first grant 
application in fiscal year 1999, whichever comes first. (2) The 
attorney signature from previous years on the single signature page is 
not acceptable. A current attorney's affirmation is required to certify 
applicant's legal authority to comply with fiscal year 1999 FTA funding 
assistance. (3) As in previous years, the grant applicant should (when 
possible) certify electronically, indicating that a current attorney's 
signature is on file. (4) The applicant is advised that Transit 
Enhancement activities (49 U.S.C. 5307(k)) require an annual report 
listing projects carried out during the previous year.
    The fiscal year 1999 Annual List of Certifications and Assurances 
is accessible on the Internet at www.fta.dot.gov. Any questions 
regarding this document may be addressed to the appropriate Regional 
Office or to Pat Berkley, Office of Program Management, Federal Transit 
Administration, (202) 366-6470.

XXI. Grant Application Procedures

    All applications for FTA funds should be submitted to the 
appropriate FTA Regional Office. As described in Section V, FTA is 
expecting that most applications will be filed electronically in FY 
1999 using the new TEAM system. Formula grant applications should be 
prepared in conformance with the following FTA Circulars: Program 
Guidance and Application Instructions for Metropolitan Planning Program 
Grants--C8100.1B, October 25, 1996; Urbanized Area Formula Program: 
Grant Application Instructions--C9030.1C, October 1, 1998; Nonurbanized 
Area Formula Program Guidance and Grant Application Instructions--
C9040.1E, October 1, 1998; Section 5310 Elderly and Persons with 
Disabilities Program Guidance and Application Instructions C9070.1E, 
October 1, 1998; and Section 5309 Capital Program: Grant Application 
Instructions--C9300.1A, October 1, 1998. Applications for STP 
``flexible'' fund grants should be prepared in the same manner as the 
apportioned funds under the Urbanized Area Formula, Nonurbanized Area 
Formula, or Elderly and Persons with Disabilities Programs. Guidance on 
preparation of applications for State Planning and Research funds may 
be obtained from each FTA Regional Office. Copies of circulars are 
available from FTA Regional Offices as well as the FTA Home Page on the 
Internet.

    Issued on: October 29, 1998.
Gordon J. Linton,
Administrator.

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[FR Doc. 98-29683 Filed 11-5-98; 8:45 am]
BILLING CODE 4910-57-C