[Federal Register Volume 66, Number 167 (Tuesday, August 28, 2001)]
[Proposed Rules]
[Pages 45552-45561]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-21724]



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Part VI





Department of Transportation





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Federal Transit Administration



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49 CFR Part 624



Clean Fuels Formula Grant Program; Proposed Rule

  Federal Register / Vol. 66 , No. 167 / Tuesday, August 28, 2001 / 
Proposed Rules  

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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

49 CFR Part 624

[Docket No. FTA-2001-9877]
RIN 2132-AA64


Clean Fuels Formula Grant Program

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Notice of proposed rulemaking.

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SUMMARY: On June 9, 1998, the Transportation Equity Act for the 21st 
Century (TEA-21) was enacted requiring the Federal Transit 
Administration (FTA) to establish a new grant program entitled the 
Clean Fuels Formula Grant Program. This proposed rule establishes the 
procedures potential recipients must use to apply for this new program.
    The FY 1999, FY 2000, and FY 2001 appropriations bills did not make 
funding available for this program. FTA is publishing this proposed 
rulemaking in anticipation that funds may be available in FY 2002 or 
future Federal fiscal years.

DATES: Comment on this proposed rule must be received by October 12, 
2001.

ADDRESS: Written comments must refer to the docket number that appears 
above and be submitted to the United States Department of 
Transportation; Central Dockets Office, PL-401; 400 Seventh Street, 
SW., Washington, DC 20590. All comments received will be available for 
inspection at the above address from 10 a.m. to 5 p.m., E.T. Monday 
through Friday, except Federal holidays. Those desiring the agency to 
acknowledge receipt of their comments should include a self-addressed, 
stamped postcard with their comments. The Docket Clerk will date-stamp 
the post card and mail it back to the commenter.

FOR FURTHER INFORMATION CONTACT: For program issues: Nancy Grubb, 
Office of Resource Management and State Programs, (202) 366-2053; for 
program evaluation issues, Abbe Marner, Office of Planning, (202)366-
4317; and Christina Gikakis, Office of Research, Demonstration, and 
Innovation, FTA, (202) 366-2637. For legal issues: Scheryl Portee, 
Office of Chief Counsel, FTA, (202) 366-1936 (telephone) or (202) 366-
3809 (fax). Electronic access to this and other rules may be obtained 
through the FTA World Wide Web home page at http://www.fta.dot.gov/library/legal/frootoc.htm. Comments may be reviewed via the internet at 
http://dms.dot.gov.

SUPPLEMENTARY INFORMATION:

Electronic Access

    Electronic access to this and other documents is available through 
FTA's home page on the World Wide Web, at http://www.fta.dot.gov.
    The comment period for this rulemaking is 45 days. A shorter 
comment period is needed because this program may be funded in FY 2002. 
FTA believes that this period will allow all interested parties enough 
time to file their comments; however, late filed comments will be 
considered to the extent practicable.
    Internet users can access all comments received by the U.S. DOT 
Dockets, Room PL-401, via the Docket Management System (DMS) on the DOT 
home page, at http://dms.dot.gov. The DMS is available 24 hours each 
day, 365 days each year. Please follow the instructions online for more 
information and help.
    An electronic copy of this document may be downloaded using a modem 
and suitable communications software from the Government Printing 
Office Electronic Bulletin Board Service at (202) 512-1661. Internet 
users may reach the Federal Register's home page, at http://www.nara.gov/fedreg, and the GPO database, at http://www.access.gpo.gov/nara.

Table of Contents

I. Background
II. Government Performance and Results Act of 1993
III. Today's Proposed Rule
IV. Section-by-Section Analysis
V. Request for comments on Particular Issue
VI. Regulatory Process Matters

I. Background

    The Clean Fuels Formula Grant Program is a new transit grant 
program contained in section 3008 of the Transportation Equity Act for 
the 21st Century (TEA-21) as amended, Pub. L. 105-178, (codified at 49 
U.S.C. 5308). This program has a two-fold purpose. First, the program 
is intended to assist nonattainment and maintenance areas in achieving 
or maintaining air quality attainment status. Second, the program seeks 
to support emerging clean fuel and advanced propulsion technologies for 
transit buses and to create markets for these technologies. As the 
legislation establishes the basic parameters of the program, the focus 
of this rulemaking is application procedures. While the program is a 
formula program, the amount of funds available to individual grantees 
cannot be calculated in advance of the receipt of applications. The 
formula is applied to the universe of eligible applications subsequent 
to receiving and screening all applications in each Federal fiscal 
year.
    The formula provides two-thirds of the funds to urban areas over 
one million in population and one-third of the funds to urban areas 
less than one million in population. The specifics of the formula are 
explained later in this notice. In addition, TEA-21 provides weighting 
factors based on the severity of nonattainment for ozone and carbon 
monoxide (CO). These weighting factors are also explained later in the 
text. TEA-21 provides authorization levels of up to $200,000,000 per 
year and guaranteed levels at $100,000,000 per year, but actual amounts 
available are subject to annual appropriations. FTA will make the 
annual funding level for this program available in the annual Federal 
Register notice that announces each fiscal year's appropriations and 
allocations. However, in DOT's FYs 1999, 2000, and 2001 no funds were 
made available to the program. Rather, Congress, in the FYs 1999, 2000, 
and 2001 appropriations acts, directed that the funds made available 
for the Clean Fuels Formula Grant Program under ``Formula Grants'' be 
transferred and merged with funds made available for the replacement, 
rehabilitation, and purchase of buses and related equipment and the 
construction of bus-related facilities under ``FTA Capital Investment 
Grants.'' In addition, Congress mandated that the funding available for 
this program pursuant to 49 U.S.C. 5309(m)(3)(C) did not apply to funds 
made available in the DOT's FY 2001 Appropriation Act, Public Law 106-
346. See The Military Construction Appropriations Act, 2001, section 
1108, Public Law 106-554.
    Section 5308 of title 49, U.S.C., defines eligibility and provides 
both minimum and maximum percentages of funds for certain clean fuel 
technologies. All of these provisions are described in this proposed 
rulemaking.
    With respect to the second purpose of promoting new clean fuel 
technologies for transit buses, section 3015(d) of TEA-21 also 
authorized a new Joint Partnership Program for Deployment of Innovation 
(JPP), which was announced in a separate Federal Register notice on 
October 2, 1998. Projects determined eligible for funding under the 
Clean Fuels Formula Grant Program, meeting the requirements of section 
3015(d) and FTA's JPP guidelines, may also be considered for inclusion 
under that program.
    With respect to the weighting factors for severity of 
nonattainment, it appears that Congressional intent was to use the same 
weighting that had been developed for the Congestion Mitigation

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and Air Quality Improvement (CMAQ) Program under the Intermodal Surface 
Transportation Efficiency Act (ISTEA). However, it appears that errors 
were made in section 5308 regarding the carbon monoxide (CO) 
nonattainment classification terms. To properly apply the weighting 
factors for ``severity of nonattainment,'' FTA is making certain 
interpretations concerning the statutory language in section 
5308(d)(2). The statute uses the nonattainment classification terms 
``marginal,'' ``moderate,'' ``serious,'' ``severe,'' and ``extreme'' 
for both ozone and carbon monoxide. However, the Clean Air Act 
Amendments of 1990 only use the terms ``moderate'' and ``serious'' to 
classify CO nonattainment areas. Thus, FTA will use those two 
classifications for CO and disregard the other CO classifications and 
associated weighting factors.
    The CMAQ weighting factors for ozone and CO nonattainment areas are 
laid out in 23 U.S.C. 104(b). Both ozone and CO areas are also given 
weighting factors in 49 U.S.C. 5308(d)(2)(A). Section 5308(d)(2)(B) 
provides additional weighting to CO areas. FTA believes that the 
drafters of this legislation did not intend double weighting for CO 
nonattainment areas. Thus, FTA will use the higher of the weighting 
factors for ozone and CO in section 5308(d)(2)(A), and then apply the 
additional adjustment of 1.2 in areas classified as both nonattainment 
for CO and either nonattainment or maintenance for ozone as described 
in section 5308(d)(2)(B). Section 5308(d)(2)(A) indicates that the 
number of clean fuel vehicles will be a multiplier; however, FTA 
believes that the multiplier should be the number of buses in the bus 
fleet as laid out in section 5308(d)(1).
    TEA-21 provides limitations on the use of funds and the maximum 
amount of grants. In general, the amount of a grant to a designated 
recipient for an eligible project shall not exceed the lesser of: (1) 
$15,000,000 in areas with a population under 1,000,000 or $25,000,000 
in areas with a population of at least 1,000,000; or (2) 80 percent of 
the eligible project's total project cost. Additionally, at least five 
percent of the total program funding must be used for the purchase of 
hybrid electric or battery-powered buses or construction of facilities 
designed to service those buses. No more than 35 percent of the amount 
made available each fiscal year may be available to fund clean diesel 
buses. No more than five percent of the amount made available each 
fiscal year may be available to fund retrofitting or replacement of the 
engines of buses that do not meet the clean air standards of the 
Environmental Protection Agency (EPA).
    TEA-21 requires that FTA issue a rule describing the application 
procedures it proposes to use to implement this new grant program. The 
purpose of this rulemaking is to comply with that requirement.

II. Government Performance and Results Act of 1993

    The Government Performance and Results Act (GPRA) was enacted in 
1993 to provide the establishment of strategic planning and performance 
measurement in the Federal Government. It is primarily intended to 
improve Federal program effectiveness and public accountability by 
promoting a new focus on results, service quality, and customer 
satisfaction.
    In order to carry out its statutory program responsibilities under 
GPRA, FTA intends to evaluate the effectiveness of the Clean Fuels 
Formula Grant Program in meeting its objectives to reduce transit bus 
emissions and support emerging markets for clean fuel technologies. A 
comprehensive and accurate evaluation of the program's effectiveness to 
reduce transit bus emissions would require actual in-use emissions data 
of the clean fuel buses. However, due to lack of funding for this 
activity, FTA will not be able to conduct emissions tests on individual 
vehicles to obtain such information. One possible approach to assess 
the program's effectiveness in reducing transit bus emissions would be 
to report the number and type of buses purchased with Clean Fuels 
Formula Program funds, and estimate the reduction in emissions based on 
representative emissions from similar vehicles, recognizing this data 
may differ from actual in-use emission data. Information on the number 
of buses, type of vehicles purchased, including type of propulsion 
systems, and whether the vehicles are for service expansion or 
replacement, must be entered into FTA's electronic grant management 
system, i.e., TEAM. FTA believes assumptions about the emissions of the 
vehicles being replaced will have to be made. Other approaches may be 
applicable. FTA is interested in receiving comments on possible 
evaluation strategies.
    FTA is proposing to measure the impact on supporting new and 
emerging markets for advanced propulsion technologies by reporting the 
number and type of advanced propulsion vehicles purchased with Clean 
Fuel Formula Program funds and reporting on new infrastructure funded 
with the Clean Fuels Formula Program funds.
    Information on the number of advanced propulsion vehicles purchased 
with Clean Fuel Formula Program funds and the new infrastructure funded 
with the Clean Fuels Formula Program funds must be entered into TEAM.

III. Today's Proposed Rule

    This rule describes the application process FTA proposes to use to 
implement the Clean Fuels Formula Grant Program. This rulemaking is 
required in section 5308(c)(1).

IV. Section-by-Section Analysis

A. Eligible Applicant. (Sec. 624.1)

    An eligible applicant is a state or local governmental authority 
providing mass transportation service in either: (1) ozone and carbon 
monoxide nonattainment areas which have the specific classifications 
established by section 103 of the 1990 Clean Air Act Amendments, Public 
Law 101-549 [amended 42 U.S.C. 7511-7511(f)], or (2) ozone and CO 
``maintenance'' areas which, before they were redesignated to 
attainment by the EPA, had these same classifications. The 
nonattainment classifications for ozone are: ``marginal,'' 
``moderate,'' ``serious,'' ``severe,'' and ``extreme.'' The 
nonattainment classifications for CO are: ``moderate'' and ``serious.'' 
It is clear that the program is limited to these nonattainment and 
maintenance areas from the way the classification terms are embedded in 
the program's apportionment formula as air quality weighting factors. 
These weighting factors are patterned after the factors used in the 
CMAQ Program in Title 23, U.S.C., before changes by TEA-21, and the 
sole purpose of that program is to assist areas in attaining and 
maintaining the National Ambient Air Quality Standards, principally for 
ozone and CO.
    It should be noted that EPA uses some additional classification 
terms besides the ones listed above for certain other nonattainment 
areas. Some examples are: ``incomplete data'' for some ozone areas and 
``not classified'' for some CO areas. These classification terms are 
not used in the Clean Fuels apportionment formula; therefore, areas 
with these classifications are not eligible for funding under this 
program. This is consistent with the Department of Transportation's 
approach with respect to the CMAQ Program.
    EPA's lists of nonattainment and maintenance areas do not change 
much from year to year. Changes may involve reclassifications of 
existing nonattainment areas as well as

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redesignations to attainment (i.e., achieving maintenance area status). 
The changes occur throughout the year. The pre-application worksheet 
for this program requires potential recipients to report their current 
status as a nonattainment or a maintenance area for ozone and/or CO. 
FTA will use this information as a starting point but will rely on the 
most up-to-date information available from EPA regarding designations 
and classifications for use in the apportionment formula. In summary, 
only nonattainment or maintenance areas that have, or previously had, 
the classifications identified above are eligible for this program.

B. Eligible Activities  (Sec. 624.3)

    This section describes the eligible activities as contained in 49 
U.S.C. 5308. FTA believes that Congress intended section 5308 to 
include vans in revenue service as well as buses. Other eligible 
activities include the purchase or lease of clean fuel buses and 
facilities, repowering or retrofitting buses to operate on clean fuels 
and the improvement of existing facilities to accommodate clean fuel 
buses. (The legislation defines clean fuel buses as those powered by 
compressed natural gas, liquefied natural gas, biodiesel fuels, 
batteries, alcohol-based fuels, hybrid electric, fuel cell and clean 
diesel, and other low or zero emissions technology, and which the EPA 
has certified sufficiently reduce harmful emissions. Because liquefied 
petroleum gas (i.e., propane) qualifies as a low or zero emission 
technology, FTA interprets section 5308 to include propane as an 
eligible fuel.)

C. Application Process  (Sec. 624.5)

    This section describes the application process for the Clean Fuels 
Formula Grant Program. The grant requirements for 49 U.S.C. 5309, the 
Capital Investment Grants and Loans Program (Capital Program) apply. 
These requirements are contained in FTA Circular 9300.1, which is 
available from the FTA regional offices and on the FTA home page 
(http://www.fta.dot.gov). The Federal share shall not exceed 80 percent 
for this program. While the procedures in the circular do not include a 
pre-application process, FTA will institute a pre-application process 
for this program. This pre-application will be considered an 
application for the purpose of determining the universe of eligible 
applicants to apply the formula and will provide the information 
necessary for FTA to calculate apportionment of the funds, based on the 
formula contained in the legislation.
1. Pre-Application
    In order to accommodate the need to submit an application without 
knowing the amount of funds available to individual applicants, FTA 
intends to request the submission of pre-applications for this program 
in the Federal Register notice announcing annual apportionments and 
allocations when funding has been appropriated by Congress. The pre-
application consists of a Letter of Interest and a Pre-application 
Worksheet as described below:
    a. Letter of Interest: This letter should serve as the cover letter 
for the Pre-application Worksheet, expressing interest in submitting an 
application. It should describe the overall clean fuel technology 
program of the agency, including the technology selected; describe the 
necessary infrastructure to support the program; and the long-range 
objectives of the program including the eventual size of the clean fuel 
fleet. It should summarize the eligible activities for which the agency 
is applying and the amount of funds that the agency is seeking.
    b. Pre-application Worksheet. This worksheet is contained in 
Appendix A to this Notice. The purpose of the worksheet is to provide 
all of the data necessary for FTA to calculate the apportionment. 
Instructions for completing the Pre-application Worksheet are included 
in Appendix A. Data needed to make the formula apportionment should be 
included in the pre-application worksheet. The data include the size of 
the bus fleet and the bus passenger miles of the applicant. Data from 
the National Transit Database (NTD) will be used to make the formula 
apportionment, and applicants that report to the NTD should provide 
this information in the pre-application worksheet. Due to the time 
required to collect and produce the NTD data, there is a lag time of 
two years. For example, fiscal year 2002 apportionments will be based 
on 2000 data. In order to provide for consistency of data, all 
applicants should use 2000 data for fiscal year 2002 program 
apportionments, even though they may report to the NTD. Applicants 
outside urbanized areas, who are not required to report to NTD, shall 
provide the same information based on their records for the current 
calendar year.
    Pre-applications must be submitted to the FTA regional office no 
later than January 1 of each fiscal year. The regional office will 
review the pre-applications for eligibility and for completeness of 
information needed to apply the formula. The regional offices will 
provide the information from pre-applications to FTA headquarters. FTA 
headquarters will apply the formula and provide information to the 
regional offices on the amount of funds available to each applicant. 
The regional office will notify the applicant in writing as to the 
amount of funds available for the submission of the final application. 
The letter will also contain results of the eligibility review. If, for 
any reason, the whole application were found to be ineligible, the 
regional office would notify the applicant as soon as possible. If 
portions of the application were found ineligible, the letter providing 
information on the availability of funds would also contain this 
information. Once the applicant has been notified of the amount of 
funds available and advised of the eligibility of its application, it 
may proceed to complete and file the final application. The final 
application must be submitted electronically if the applicant is using 
FTA's electronic application process, i.e., TEAM.
    For urbanized areas, programming of the clean fuels projects in the 
Metropolitan Transportation Improvement Program (MTIP) and Statewide 
Transportation Improvement Program (STIP) may be completed following 
notification by the FTA regional office of the amount of funds 
available under the formula and results of the eligibility review.

D. Certification  (Sec. 624.7)

    This section discusses the certification called for in 49 U.S.C. 
5308. Section 5308(c)(2) requires that there be a certification with 
each Clean Fuels Formula Program application, which states that 
vehicles purchased with a grant under this section will be operated by 
the grantee using only clean fuels. Rather than be included in the 
application, this certification will be contained in the annual FTA 
Federal Register notice of assurances and certifications. This is 
consistent with one-stop filing of all required certifications and 
assurances. Transit operators planning to apply for a Clean Fuels 
Formula grant should indicate compliance with this certification when 
submitting the annual certifications and assurances to FTA.

E. Formula  (Sec. 624.9)

    This section includes the formula as contained in 49 U.S.C. 5308. 
It appears that the congressional intent was to transfer the CMAQ 
statutory language into the new Clean Fuels Formula Program. However, 
it appears that errors were made in the Clean Fuels Formula language, 
as it is not completely

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consistent with the provisions of the CMAQ program.
    The CMAQ weighting factors for ozone nonattainment and CO areas are 
laid out in 23 U.S.C. 104(b). Both ozone and CO areas are also given 
weighting factors in 49 U.S.C. 5308(d)(2)(A). Section 5308(d)(2)(B) 
provides additional weighting to CO areas. FTA believes the drafters of 
this legislation did not intend the double weighting of CO 
nonattainment area. Thus, FTA will use the higher of the weighting 
factors for ozone and CO in section 5308(d)(2)(A), and then apply the 
additional adjustment of 1.2 in areas classified as both nonattainment 
for CO and either nonattainment or maintenance for ozone as described 
in section 5308(d)(2)(B).

F. Reporting  (Sec. 624.11)

    FTA supports the development and deployment of clean fuel and 
advanced propulsion technologies for transit buses. FTA is interested 
in collecting relevant information on the operations and performance of 
these clean fuel technology buses in revenue service to help assess the 
reliability, benefits, and costs of these technologies compared to 
conventional vehicle technologies. Accordingly, FTA intends to require 
Clean Fuels Formula grantees receiving funds for projects to purchase 
or lease buses powered by advanced propulsion technologies (e.g., 
battery electric, hybrid electric, and fuel cell powered vehicles) to 
provide information to FTA on the operations, performance, and 
maintenance of those vehicles. Reporting would be required each quarter 
for the first three years of the useful life of the vehicle. Data on 
the operation of the vehicle past this period would be voluntary. 
Transit agencies acquiring alternative fuel buses (e.g., compressed 
natural gas (CNG), liquefied natural gas (LNG), liquefied petroleum gas 
(LPG), etc.) under the Clean Fuels Formula Grant Program are encouraged 
to provide FTA similar information, on a voluntary basis. The 
information will be used to evaluate the operating costs of clean fuel 
and advanced propulsion technology vehicles compared to conventional 
vehicles, and provide more accurate information to transit agencies for 
future clean fuel and advanced propulsion vehicle purchases. 
Information such as vehicle miles traveled, fuel costs, vehicle fuel/
energy consumption and oil consumption, road calls or breakdowns 
resulting from clean fuel and advanced propulsion technology systems, 
and maintenance costs associated with these systems will be collected 
from the transit agencies. It is FTA's belief that operators may 
collect such information as part of normal management practices. FTA 
encourages transit agencies acquiring buses under this grant program to 
establish a control set of comparable, conventional diesel buses to 
form the baseline for comparison with the clean fuel or advanced 
propulsion technology buses, and to collect and submit data to FTA for 
this control set of buses, on a voluntary basis. Upon award 
notification, grantees will be informed of the data collection 
requirements for the grant.
    Appendix A: Pre-application Worksheet. The Pre-application 
Worksheet is included in this notice of proposed rulemaking.

V. Request for Comments on Particular Issues

    The basic framework of this program is established by legislation. 
We specifically request comment on the implementation guidance, 
especially application requirements and possible evaluation approaches. 
This program is a formula program, but the amount of funds available 
for each applicant cannot be determined prior to receiving and 
reviewing application information from potential grantees. As a result, 
procedures different from FTA's other formula assistance programs are 
needed to accommodate this situation. Comments are solicited on FTA's 
proposed approach to structuring the application process, given that 
under this particular grant program, FTA cannot determine the funding 
amounts available to individual grantees until after the total number 
of eligible applicants is known and the specific funding ceilings 
(e.g., 35 percent clean diesel) have been applied.
    FTA is proposing that the 49 U.S.C. 5309, Capital Investment Grants 
and Loans Program requirements apply. These requirements are contained 
in FTA Circular 9300.1, which is available from the FTA regional 
offices. It is also available on the FTA Home Page (www.fta.dot.gov). 
In order to lessen the administrative burden on applicants, FTA is 
proposing a pre-application process. Pre-applications must be submitted 
by January 1 of each year.
    These pre-applications will permit FTA to identify the pool of 
eligible applicants and apply the statutory funding formula. Once the 
amount of funds that could be available to each grantee is determined, 
the grantee may complete the programming process and submit its 
application to FTA. FTA will submit the completed application to the 
Department of Labor for the labor certification required by 49 U.S.C. 
5333(b). Applications may be modified to reflect the limitation on 
uses. Since the pre-application will be a basis for the formula 
apportionment, any modifications to the application must be approved by 
FTA. Comments on the pre-application process are requested.
    Since the amount of available funds cannot be determined at the 
time of the pre-application, FTA is proposing to require that the 
programming of Clean Fuels Formula funds in the MTIP and STIP be 
completed after February 1 when FTA apportions the funds. This would 
ensure that fiscal constraint is maintained and simplifies the 
paperwork and time required to accomplish the programming. Comment on 
this procedure is requested.
    In addition, FTA is proposing to impose reporting requirements for 
those transit agencies acquiring advanced propulsion technology buses 
with Clean Fuels Formula Grant funds. (See Sec. 624.11.) Information to 
be collected includes operations, performance and maintenance data on 
the vehicles to help assess the reliability, benefits, and costs of 
these technologies compared to conventional vehicle technologies. Under 
current FTA grant programs, such reporting is not required. Comments on 
this proposed reporting requirement are requested.
    FTA is also requesting suggestions on the program evaluation. 
Information on sources of emissions data is sought. Additionally, 
suggestions as to how evaluation approaches and evaluation methodology 
are solicited.

VI. Regulatory Process Matters

A. Executive Order 12866

    FTA has evaluated the industry costs and benefits of the clean 
fuels formula grant program and has determined that it is not a 
significant rule under E.O. 12866 because it involves grant application 
procedures and will not cost more than $100 million annually.

B. Departmental Significance

    This rule is a significant regulation as defined by the 
Department's Regulatory Policies and Procedures. Although the 
regulation involves grant application procedures, it is expected to 
generate substantial public interest.

C. Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601-
612, FTA has evaluated the effects of this rule on small entities. This 
rule will not have a significant effect on a substantial number of 
small entities because it merely establishes application procedures for 
the Clean Fuels Formula Grant Program.

[[Page 45556]]

D. Paperwork Reduction Act

    This rule includes information collection requirements subject to 
the Paperwork Reduction Act. The Office of Management and Budget (OMB) 
has approved FTA's new information collection request. The affected 
public would be mass transit operators that apply for Federal funds 
under this program. Once this NPRM becomes a final rule, any burden 
associated with it would be added to the current information collection 
package, Clean Fuels Formula Grant Program, OMB approval number 2132-
0560. Comments are being solicited on the paperwork requirements, 
particularly the proposed reporting requirement. Comments should 
address: whether the proposed collection of information is necessary 
for the proper performance of the FTA grant process; ways to enhance 
the quality, utility, and clarity of the information collected; and 
ways to minimize the burden of the collection of information on the 
applicants, including the use of automated collection techniques (e.g., 
filing applications via facsimile (fax), electronic mail or other forms 
of information technology). The Government Paperwork Elimination Act 
(GPEA) of 1998 requires all Federal agencies to have an electronic 
means of reporting to the government as an alternative to reporting on 
paper by October 2003. Because of logistical difficulties, all means of 
electronic filing are not immediately available. However, concurrent 
with the continued development of this rulemaking action, FTA intends 
to develop the authentication infrastructure to receive worksheets 
through additional electronic means, such as web-based forms and 
electronic file transfer by October 2003

E. Executive Order 13132

    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13132 and it has been determined 
that the proposed rule does not have sufficient Federalism implications 
to warrant the preparation of a Federalism Assessment because it sets 
forth application procedures for a discretionary grant program.

F. National Environmental Policy Act

    This program will have a positive impact on the environment. It 
promotes the alternative use of clean fuels in vehicles used for mass 
transportation.

G. Energy Act Implications

    Mass transit has a positive impact on energy consumption as it 
promotes an alternative to the single occupant vehicle.

H. Unfunded Mandates Reform Act

    This program is a voluntary grant program and will not result in 
the expenditure by state, local and tribal governments, in the 
aggregate, of $100,000,000 or more in any one year.

List of Subjects in 49 CFR Part 624

    Grant Programs--Transportation, Mass transportation, Reporting and 
record keeping requirements.

    Accordingly, for the reasons cited above, the FTA proposes to amend 
title 49 of the CFR by adding a new part 624, as set forth below:

PART 624--CLEAN FUELS FORMULA GRANT PROGRAM

Sec.
624.1  Eligible applicant.
624.3  Eligible activities.
624.5  Application process.
624.7  Certification.
624.9  Formula.
624.11  Reporting.
Appendix A to Part 624--Pre-Application Worksheet

    Authority: 49 U.S.C. 5308; 49 CFR 1.51.


Sec. 624.1  Eligible applicant.

    (a) An eligible applicant is a state or local governmental 
authority providing mass transportation service in either:
    (1) Ozone and carbon monoxide nonattainment areas that have the 
specific classifications established by the 1990 Clean Air Act 
Amendments (Public Law 101-549), or
    (2) Ozone and carbon monoxide (CO) ``maintenance'' areas that, 
before they were redesignated to attainment by the Environmental 
Protection Agency (EPA), had these same classifications.
    (b) The nonattainment classifications for ozone are ``marginal,'' 
``moderate,'' ``serious,'' ``severe,'' and ``extreme.'' The 
nonattainment classifications for CO are ``moderate'' and ``serious.''


Sec. 624.3  Eligible activities.

    (a) Eligible activities include the purchase or lease of clean fuel 
buses and facilities, repowering or retrofitting buses to operate on 
clean fuels, and the improvement of existing facilities to accommodate 
clean fuel buses.
    (b) The term clean fuel vehicle means a vehicle that--
    (1) Is powered by--
    (i) Compressed natural gas;
    (ii) Liquefied natural gas;
    (iii) Biodiesel fuels;
    (iv) Batteries;
    (v) Alcohol-based fuels;
    (vi) Hybrid electric;
    (vii) Fuel cells; or
    (viii) Clean diesel, to the extent allowed under this section; or
    (2) The Administrator of the Environmental Protection Agency has 
certified sufficiently reduces harmful emissions.
    (c) Eligible projects are the following:
    (1) Purchasing or leasing clean fuel buses, including buses that 
employ a lightweight composite primary structure, and vans for use in 
revenue service. The purchase or lease of non-revenue vehicles is not 
an eligible project.
    (2) Constructing or leasing clean fuel bus facilities or electrical 
recharging facilities and related equipment. Facilities and related 
equipment for clean diesel buses are not eligible.
    (3) Improving existing mass transportation facilities to 
accommodate clean fuel buses.
    (4) Repowering pre-1993 engines with clean fuel technology that 
meets the current urban bus emission standards. Repowering means the 
removal of an engine from a bus followed by the installation of another 
engine and applies to engines that are replaced with new, previously 
unused engines, as well as those exchanged from an inventory of rebuilt 
engines.
    (5) Retrofitting or rebuilding pre-1993 engines if before half life 
(i.e., prior to six years of bus life) to rebuild; retrofit means use 
of the latest after-market technology such as ``upgrade kits,'' or 
after-treatment device(s) that treat the exhaust after it has left the 
engine, such as catalytic converters and particulate filters.
    (6) At the discretion of FTA, projects relating to clean fuel, 
biodiesel, hybrid electric, or zero emissions technology vehicles that 
achieve emissions reductions equivalent or superior to existing clean 
fuel or hybrid electric technologies.


Sec. 624.5  Application process.

    (a) Pre-applications must be submitted to the appropriate FTA 
regional office no later than January 1 of each fiscal year. Subject to 
the availability of funds, FTA will apportion the funds based on the 
formula and the pool of applicants, no later than February 1 of each 
year. Once the applicant has been notified of the apportionment of 
funds and the eligibility of its application, it should proceed to 
complete and file the final application. The final application must be 
submitted electronically if the grantee is using the electronic 
application process (i.e., TEAM).
    (b) The pre-application consists of a Letter of Interest and a Pre-
application Worksheet described as follows:

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    (1) Letter of interest. This letter serves as the cover letter for 
the Pre-application Worksheet, expressing interest in submitting an 
application. It describes the overall clean fuel technology program of 
the agency, including the technology selected, describes the necessary 
infrastructure to support the program and the long-range objectives of 
the program including the eventual size of the clean fuel fleet. It 
summarizes the eligible activities for which the agency is applying and 
the amount of funds that the agency is seeking.
    (2) Pre-application Worksheet. Applicants must use the Worksheet 
found in Appendix A to this part.


Sec. 624.7  Certification.

    The applicant must use the certification contained in the Annual 
Notice of Assurances and Certifications published in the Federal 
Register each October.


Sec. 624.9  Formula.

    The Clean Fuels Formula funds will be apportioned according to the 
following formula:
    (a) Areas with 1,000,000 population and above. Two thirds of the 
funds available each fiscal year shall be apportioned to applicants 
with eligible projects in urban areas with a population of 1,000,000 
and above. Of this, 50 percent shall be apportioned so that each 
applicant receives a grant in an amount equal to the ratio between:
    (1) The number of vehicles in the bus fleet of the eligible 
project, weighted by the severity of nonattainment for the area in 
which the eligible project is located; and
    (2) The total number of vehicles in the bus fleets of all eligible 
projects in areas with a population of 1,000,000 and above, weighted by 
the severity of nonattainment for all areas in which those eligible 
projects are located as provided in paragraphs (c) and (d) of this 
section. The remaining 50 percent shall be apportioned such that each 
designated recipient receives a grant in an amount equal to the ratio 
between:
    (i) The number of bus passenger miles of the eligible project of 
the designated recipient, weighted by the severity of nonattainment of 
the area in which the eligible project is located as provided in 
paragraphs (c) and (d) of this section;
    (ii) The total number of bus passenger miles of all eligible 
projects in areas with a population of 1,000,000 and above, weighted by 
the severity of nonattainment of all areas in which those eligible 
projects are located as provided in paragraphs (c) and (d) of this 
section.
    (b) Areas under 1,000,000 population. The formula for areas under 
1,000,000 in population is the same as paragraph (a) of this section, 
except the formula removes the pool of eligible projects in areas with 
a population of 1,000,000 and above and replaces it with the pool of 
eligible projects in areas with populations under 1,000,000.
    (c) Weighting factors. (1) The weighting factor for ozone shall be 
determined based on the following factors:
    (i) 1.0 if, at the time of the apportionment, the area is a 
maintenance area for ozone;
    (ii) 1.1 if, at the time of the apportionment, the area is 
classified as a marginal ozone nonattainment area;
    (iii) 1.2 if, at the time of the apportionment, the area is 
classified as a moderate ozone nonattainment area;
    (iv) 1.3 if, at the time of the apportionment, the area is 
classified as a serious ozone nonattainment area;
    (v) 1.4 if, at the time of the apportionment, the area is 
classified as a severe ozone nonattainment area;
    (vi) 1.5 if, at the time of the apportionment, the area is 
classified as an extreme ozone nonattainment area;
    (2) The weighting factor for CO shall be determined based on the 
following factors:
    (i) 1.0 if, at the time of the apportionment, the area is a 
maintenance area for carbon monoxide;
    (ii) 1.2 if, at the time of the apportionment, the area is 
classified as a moderate carbon monoxide nonattainment area;
    (iii) 1.3 if, at the time of the apportionment, the area is 
classified as a serious carbon monoxide nonattainment area.
    (3) The number of buses in the fleet and the bus passenger miles 
shall be multiplied by the higher of the ozone or CO factors.
    (d) Additional adjustment. The number of buses in the fleet and the 
bus passenger miles shall be further multiplied by a factor of 1.2 if 
the area is both nonattainment for CO and either nonattainment or 
maintenance for ozone.
    (e) Limitation on uses. (1) Not less than 5 percent of the amount 
made available by or appropriated under 49 U.S.C. 5338 in each fiscal 
year to carry out this section shall be available for any eligible 
projects for which an application is received from a designated 
recipient for the purchase or construction of hybrid electric or 
battery-powered buses or facilities specifically designed to service 
those buses.
    (2) Not more than 35 percent of the amount made available by or 
appropriated under 49 U.S.C. 5338 in each fiscal year to carry out this 
section may be made available to fund clean diesel buses.
    (3) Not more than 5 percent of the amount made available by or 
appropriated under 49 U.S.C. 5338 in each fiscal year to carry out this 
section may be made available to fund 21 retrofitting or replacement of 
the engines of buses that do not meet the clean air standards of the 
Environmental Protection Agency, as in effect on the date on which the 
application for such retrofitting or replacement is submitted under 
Sec. 624.5.


Sec. 624.11  Reporting.

    (a) Recipients of financial assistance under 49 U.S.C. 5308 who 
purchase or lease hybrid electric, battery electric and fuel cell 
vehicles must report to the appropriate FTA regional office on a 
quarterly basis for the first three years of the useful life of the 
vehicle with the following information:
    (1) Vehicle miles traveled;
    (2) Fuel/energy costs;
    (3) Vehicle fuel/energy consumption and oil consumption;
    (4) Number of road calls or breakdowns resulting from clean fuel 
and advanced propulsion technology systems, and
    (5) Maintenance costs associated with the clean fuels or advanced 
propulsion system.
    (b) Recipients of financial assistance under 49 U.S.C. 5308 who 
purchase or lease compressed natural gas (CNG), liquefied natural gas 
(LNG), and liquefied petroleum gas (LPG) vehicles may report the 
information described in paragraph (a) of this section, but this 
reporting is voluntary.
    (c) Recipients of financial assistance under 49 U.S.C. 5308 who 
purchase or lease clean diesel vehicles should not report information 
beyond the normal FTA quarterly reporting requirements.

Appendix A to Part 624: Pre-Application Worksheet

    The following are instructions for completing the pre-
application worksheet:
    (1) Requesting Agency. Fill in the name of the applicant. The 
applicant must be a state or local governmental authority providing 
mass transportation service.
    (2) UZA (or Urban Area). List the name of the urbanized area if 
the applicant is located in an urbanized area. Otherwise, indicate 
the name of the city or town.
    (3) Nonattainment or Maintenance Area Name. List the name of the 
nonattainment or maintenance area in which your agency provides 
service.
    (4) Classification for Ozone. List the current EPA nonattainment 
classification for

[[Page 45558]]

your service area. (The classification must be of the following 
terms: marginal, moderate, serious, severe, or extreme.)
    (5) Classification for Carbon Monoxide. List the current EPA 
nonattainment classification for your service area. (The 
classification must be either moderate or serious.)

I. Proposed Activity

    (1) New Bus Purchase/Lease. Enter the number of vans or buses by 
fuel category in the pre-application. For hybrid electric vehicles, 
include fuel types. Indicate whether the structure is lightweight 
composite or traditional structure and weight. Enter the total and 
Federal amount for each fuel type.
    (2) Construct/Lease New Clean Fuel Facility and Related 
Equipment. Indicate the Federal and total amount for a clean fuels 
facility, related equipment or electrical recharging facility. Enter 
any descriptive or explanatory information on the lines for 
additional information, including what fuel type is being 
accommodated. Facilities to accommodate clean diesel are not 
eligible.
    (3) Indicate the Federal amount and total amount for 
improvements to existing facilities to accommodate clean fuel buses. 
Enter any descriptive or explanatory information on the line for 
additional items, including what fuel type is being accommodated.
    (4) Indicate the Federal amount and total amount for repowering/
replacing pre-1993 engines with engines that meet current emissions 
standards when installed. Please include a separate entry for each 
fuel type. For the purposes of this program, repowering/replacement 
means the removal of an engine from the bus followed by the 
installation of another engine. This applies to engines that are 
replaced with new, previously unused engines, as well as those 
exchanged from an inventory of rebuilt engines.
    (5) Enter a quantity, Federal amount, and total amount by fuel 
type for retrofit/rebuild of pre-1993 engines to comply with latest 
EPA-certified emissions standards. For the purposes of this program, 
``retrofit'' means the use of the latest after-market technology 
such as ``upgrade kits,'' or after-treatment device(s) that treat 
the exhaust after it has left the engine, such as catalytic 
converters or particulate filters. ``Before the half-life rebuild'' 
means that the retrofitting would need to occur before the bus is 
six years old. Since this provision applies to pre-1993 engines, 
this provision is of limited time availability.
    (6) This section should describe any proposed clean fuel project 
not included in categories (1) through (5). Since any project not 
included in those categories requires approval at the discretion of 
FTA, projects included here should also be described in the letter 
of interest. Include the Federal amount and total.
    (7) Summary. Indicate the Totals for the Federal and Total 
Amounts requested for all projects listed in this Section I.

II. Data

    This section contains the active bus fleet and annual bus 
passenger miles information that is required to run the Clean Fuels 
formula.
    (1) Enter the number of buses in the active fixed route fleet. 
For this purpose, ``bus'' includes articulated motor bus, Class A 
bus (>35 seats), Class B bus (25-35 seats), Class C bus (25 seats), 
double-decked bus, school bus, and electric trolley bus. Use 2000 
data. For UZAs that have already submitted information for the 2000 
National Transit Database (NTD), add the data from column H of Form 
408 for the following vehicle types: AB, BA, BB, BC, DD, SB, and TB. 
(These vehicle types are defined in reporter's guidance for the 
NTD.)
    (2) Enter the fixed route annual bus passenger miles for year 
2000. This may include motor bus (see types in paragraph 1) or 
trolley bus. For UZAs that have submitted 2000 NTD data, add the 
information from column I of line 25 of Form 406 for the modes MB 
and TB.

III. Projects Subject to Minimum/Maximum Apportionments

    This section provides a dollar total for the areas that are 
affected by either maximum or minimum constraints. These constraints 
apply to the entire program and not to individual applicants. 
However, in order to comply with these constraints, FTA must know 
how much each applicant is applying for in each of these areas.
    (1) Enter the total Federal dollar amount for the purchase/lease 
of clean diesel vehicles.
    (2) Enter the total Federal dollar amount for project elements 
that fall into the category of purchasing hybrid electric or 
battery-powered buses or constructing facilities designed to service 
them.
    (3) Enter the total Federal dollar amount for project elements 
that fall into the category of retrofitting or replacing bus engines 
that do not meet the clean air standards of the EPA.

    Note: Because of the uncertainty of how many grantees will 
apply, the actual amount that a grantee receives in an apportionment 
may be different from the amount requested in the application that 
was submitted. Furthermore, because clean diesel and retrofit/
replacement of bus engines are subject to maximum constraints, the 
amounts specifically apportioned for those purposes may not resemble 
the proportionality of the application. For example, suppose Grantee 
A's application included $500,000 for clean diesel and $100,000 for 
a compressed natural gas bus. If the 35 percent ceiling for clean 
diesel is exceeded by the total applications, Grantee A may only be 
allowed $50,000 to be used specifically for clean diesel because of 
the ceiling. The remainder of the funds apportioned to Grantee A 
(say, $300,000) would have to be used in areas without a maximum 
constraint, i.e., in areas other than clean diesel or retrofit/
replacement of bus engines if applied for.

IV. Certification

    The chief executive officer or the general manager of the 
transit agency should sign this certification.
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    Issued on: August 22, 2001.
Jennifer L. Dorn,
Administrator, Federal Transit Adminstration.

[FR Doc. 01-21724 Filed 8-27-01; 8:45 am]
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