[Federal Register Volume 71, Number 59 (Tuesday, March 28, 2006)]
[Notices]
[Pages 15513-15516]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-4441]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket No. FTA-2006-23511]


Supplemental Request for Comments on Issues Relating to ``Joint 
Development'' of Intercity Bus and Intercity Rail Stations and 
Terminals and Extension of Comment Period

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Solicitation of comment; Extension of comment period.

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SUMMARY: The Safe, Accountable, Flexible, Efficient Transportation 
Equity Act of 2005: A Legacy for Users (SAFETEA-LU) enacted certain 
amendments to the definition of the term ``capital project'' as used in 
49 U.S.C. 5301 et seq. (Federal Transit Law) relating to ``joint 
development'' activities by recipients of Federal funds under Federal 
Transit Law. In order to assist the Federal Transit Administration 
(FTA) in developing a proposed guidance document concerning the 
implementation of such amendments, FTA published a proposed guidance 
document on January 31, 2006 (71 FR 5107). Since publication of that 
document, FTA identified several other issues on which we would like to 
receive public input, and, thus, we are extending the comment period 
for an additional thirty days. Also, please be advised that the 
previously published guidance on joint development will not operate as 
interim or final guidance for FTA unless and until otherwise stated by 
FTA, in writing.

DATES: Comments should be received on or before April 27, 2006. Late 
filed comments will be considered to the extent practicable.

ADDRESSES: You may submit comments [identified by DOT DMS Docket Number 
FTA-2006-23511] by any of the following methods:
    Web Site: http://dms.dot.gov. Follow the instructions for 
submitting comments on the DOT electronic docket site.
    Fax: 202-493-2251.
    Mail: Docket Management Facility; U.S. Department of 
Transportation, 400 Seventh Street, SW., Nassif Building, PL-401, 
Washington, DC 20590-0001.
    Hand Delivery: Room PL-401 on the plaza level of the Nassif 
Building, 400 Seventh Street, SW., Washington, D.C., between 9 a.m. and 
5 p.m., Monday through Friday, except Federal holidays.
    Instructions: You must include the agency name (Federal Transit 
Administration) and the docket number (FTA-2006-23511). You should 
submit two copies of your comments if you submit them by mail. If you 
wish to receive confirmation that FTA received your comments, you must 
include a self-addressed stamped postcard. Note that all comments 
received will be posted without change to the Department's Docket 
Management System (DMS) Web site located at http://dms.dot.gov. This 
means that if your comment includes any personal identifying 
information, such information will be made available to users of DMS.

FOR FURTHER INFORMATION CONTACT: For program questions, please contact 
Robert Tuccillo at (202) 366-4050. For legal questions, please contact 
Jayme Blakesley at (202) 366-0304. The principal office of FTA is 
located at 400 Seventh Street, SW., Washington, DC 20590-0001. Office 
hours are from 8:30 a.m. to 5 p.m., Monday through Friday, except 
Federal holidays.

SUPPLEMENTARY INFORMATION:

[[Page 15514]]

Background

    Federal Transit Law has included joint development authority since 
the Federal Public Transportation Act of 1978. In the Transportation 
Equity Act for the 21st Century, the joint development authority was 
incorporated into the definition of a public transportation ``capital 
project'' at 49 U.S.C. 5302(a)(1)(G). This made joint development 
activities eligible for reimbursement under formula and discretionary 
public transportation grant programs.

New Authority

    SAFETEA-LU adds intercity bus and rail stations and terminals to 
the joint development authority and exempts such facilities from the 
prohibition on funding the construction of commercial, revenue-
producing facilities.
    As amended by SAFETEA-LU, the definition of ``capital project'' 
provides, in pertinent part, as follows:

    (1) Capital project.--The term ``capital project'' means a 
project for--
    (G) a public transportation improvement that enhances economic 
development or incorporates private investment, including commercial 
and residential development, pedestrian and bicycle access to a 
public transportation facility, construction, renovation, and 
improvement of intercity bus and intercity rail stations and 
terminals and the renovation and improvement of historic 
transportation facilities, because the improvement enhances the 
effectiveness of a public transportation project and is related 
physically or functionally to that public transportation project, or 
establishes new or enhanced coordination between public 
transportation and other transportation, and provides a fair share 
of revenue for public transportation that will be used for public 
transportation--
    (i) including property acquisition, demolition of existing 
structures, site preparation, utilities, building foundations, 
walkways, open space, safety and security equipment and facilities 
(including lighting, surveillance and related intelligent 
transportation system applications), facilities that incorporate 
community services such as daycare or health care, and a capital 
project for, and improving, equipment or a facility for an 
intermodal transfer facility or transportation mall, except that a 
person making an agreement to occupy space in a facility under this 
subparagraph shall pay a reasonable share of the costs of the 
facility through rental payments and other means; and
    (ii) excluding construction of a commercial revenue-producing 
facility (other than an intercity bus station or terminal) or a part 
of a public facility not related to public transportation . * * * 
[emphasis added]

    FTA proposes to implement the joint development authority by 
providing guidance in Appendix A to Circular 9300.1A (Capital Program: 
Grant Application Instructions) and in Appendix B to Circulars 5010.1C 
and 9030.1C (Grants Management Guidelines and Urbanized Area Formula 
Program: Grant Application Instructions). In addition to the proposed 
guidance document published on January 31, 2005, and before issuing the 
appendices for public comment in accordance with 49 U.S.C. 5334(l), FTA 
is soliciting additional comment on the issues identified below and we 
invite those reviewing this document to bring to our attention issues 
we might not have identified, due to state law or local share issues 
that may affect how this new authority can be implemented.

1. Interpretation of ``Capital Project''

    FTA proposes to interpret the definition and operation of the term 
``capital project'' set forth at 49 U.S.C. 5302(a)(1)(G) with respect 
to ``construction, renovation and improvement of intercity bus and 
intercity rail stations and terminals'' as follows: To be eligible for 
funding pursuant to a program established by Federal Transit Law, the 
``construction, renovation and improvement of intercity bus and 
intercity rail stations and terminals'' must be ``a public 
transportation improvement'' that (A) ``enhances economic development 
or incorporates private investment'' and (B) that either (i) ``enhances 
the effectiveness of a public transportation project and relates 
physically or functionally to that public transportation project'' or 
(ii) ``establishes new or enhanced coordination between public 
transportation and other transportation.'' FTA requests comment on the 
above interpretation of 49 U.S.C. 5302(a)(1)(G).

2. ``Enhances Economic Development or Incorporates Private 
Development''

    As noted above, it is a threshold requirement for Federal funding 
of ``construction, renovation and improvement of intercity bus and 
intercity rail stations and terminals'' that such construction, 
renovation and improvement enhance economic development or incorporate 
private investment. FTA invites recommendations of criteria by which 
FTA may determine whether the construction, renovation and improvement 
of an intercity bus or intercity rail station or terminal enhance 
economic development or incorporate private investment.

3. ``Enhances the Effectiveness of Public Transportation Project''

    The construction, renovation and improvement of intercity bus and 
intercity rail stations and terminals may receive Federal funding if, 
among other things, such construction, renovation and improvement 
``enhances the effectiveness of a public transportation project.'' FTA 
invites recommendations of criteria by which FTA may determine whether 
the construction, renovation and improvement of an intercity bus or 
intercity rail station or terminal ``enhances the effectiveness of a 
public transportation project.''

4. The Meaning of ``Related Physically or Functionally''

    The construction, renovation and improvement of intercity bus and 
intercity rail stations and terminals may receive Federal funding if, 
among other things, such construction, renovation and improvement are 
``related physically or functionally'' to a public transportation 
project. Based on the implementation of this authority over the last 
twenty years, FTA has construed ``related physically or functionally'' 
to require, as a threshold matter, that such construction, renovation 
and improvement be located on land used for a transit purpose. Within 
this framework, FTA has previously preferred projects where the joint 
development was fully integrated into the overall structural envelope 
of the public transportation project, thus ensuring a physical 
relationship.
    However, the addition of intercity bus and train stations to the 
definition of a public transportation capital project raises some 
questions regarding functional relationship. The disjunctive 
requirement of physical ``or'' functional relation suggests that such a 
facility could be built separately from--but in functional relation 
to--a public transportation facility and located on land not used for a 
transit purpose, so long as such facility bore a functional relation to 
public transportation. FTA invites recommendations of criteria by which 
FTA may determine whether the construction, renovation and improvement 
of an intercity bus and intercity rail station or terminal relate 
``functionally'' to a public transportation project. In particular, FTA 
solicits examples of joint development projects that are functionally 
related to a public transportation facility without being physically 
related (that is, without being contiguous or structurally integrated). 
In addition, FTA invites responses to the following related questions:

[[Page 15515]]

     Should FTA consider any other indicators of functional 
relationship, such as facility design, presence or function of 
pedestrian improvements?
     May the functional relationship extend across an 
intervening street, major thoroughfare or unrelated property? For 
example, is a public transportation facility on one side of the street 
still functionally related to an intercity bus station on the opposite 
side of the street?
     What is sufficient to establish a functional relationship 
that does not involve physical proximity to and/or physical connection 
to a public transportation facility? Please provide examples that 
illustrate such a relationship.
     If FTA determines that a free-standing facility is 
functionally related to a public transportation facility or system, how 
should it determine the amount of parking that is an eligible cost?

5. Meaning of ``New or Enhanced Coordination between Public 
Transportation and Other Transportation''

    A joint development project may be eligible for Federal funding if, 
among other things, it establishes ``new or enhanced coordination 
between public transportation and other transportation.'' FTA invites 
recommendations of criteria by which FTA may determine whether the 
construction, renovation and improvement of an intercity bus or 
intercity rail station or terminal establishes ``new or enhanced 
coordination between public transportation and other transportation.'' 
In addition, FTA invites responses to the following related questions:
     Is there a minimum or basic standard to estimate ``new or 
enhanced coordination''? That is, by what metric should the new or 
enhanced coordination be assessed--increased trips, increases in 
certain kinds of trips, revenue generated or revenue shared?
     What level of public transportation service should there 
be with which the joint development project might establish ``new or 
enhanced coordination''? Is an hourly scheduled service bus stop 
sufficient, or does it require at least a main line route or terminal?
     FTA seeks practical, recent examples of new or enhanced 
coordination between public transportation and other transportation, 
particularly where multiple modes are involved, such as public 
transportation with intercity rail and/or bus, or airports, or taxi.

6. Requirements Regarding ``Satisfactory Continuing Control''

    The law provides significant flexibility to public transportation 
grantees to encumber their federally supported assets for public 
transportation purposes, with prior FTA approval. Sections 
5307(d)(1)(B) and 5309(c)(1)(B) of Title 49 require that the grantee 
has or will have (or certify that it has or will have) ``satisfactory 
continuing control over the use of the equipment [and/or] facilities. * 
* *'' FTA has allowed public transportation grantees to transfer the 
title to their federally-funded rolling stock to facilitate lease 
financing or to transfer real property to a third party to facilitate a 
joint development, again, with prior FTA approval. In addition, FTA 
invites responses to the following related questions:
     In the case of an intercity bus or rail terminal, how 
should the grantee demonstrate satisfactory continuing control?
     If FTA allows a free-standing intercity bus terminal to be 
built with FTA funds, should FTA record its interest in the real estate 
as allowed for in the Master Agreement? Should the grantee? If no 
interest is recorded, how and who will be responsible for monitoring 
future encumbrances of the asset as required by the common grant rule?
     Once an intercity bus or rail terminal is constructed with 
FTA funds, should the grantee or the intercity bus or rail operator 
control the quality of maintenance, the hours of facility operations, 
or the manner of functional relationship to public transportation?

7. Requirements Regarding Maintenance

    Section 5309(c)(1) of Title 49 provides that ``[t]he Secretary may 
not approve a grant for a project under [49 U.S.C. 5309] unless the 
Secretary determines that * * * the applicant has, or will have the 
capability and willingness to maintain the equipment or facilities.'' 
Similarly, 49 U.S.C. 5307(d) provides that ``[a] recipient may receive 
a grant in a fiscal year only if * * * the recipient, within the time 
the Secretary prescribes, submits a final program of projects prepared 
under subsection (c) of [49 U.S.C. 5307] and a certification for that 
fiscal year that the recipient * * * will maintain equipment and 
facilities. * * *'' FTA invites recommendations of criteria by which 
FTA may determine whether a recipient has the capability and 
willingness to maintain (or that the recipient will maintain) the 
construction, renovation and improvement of an intercity bus and 
intercity rail stations and terminals funded pursuant to 49 U.S.C. 
5309(c)(1) or 49 U.S.C. 5307(d). FTA also invites comment on to what 
degree, if any, FTA should investigate the quality of certification by 
a recipient that it ``will maintain equipment and facilities'' pursuant 
to 49 U.S.C. 5307(d)(1)(C), given that in most cases the recipient will 
be a public body such as a transit authority. In addition, FTA invites 
responses to the following related questions:
     Once an intercity bus or rail terminal or station is 
constructed with FTA funds, what should be the permissible use of 
program income generated by the intercity bus or rail terminal or 
station? Should FTA allow program income to be used for debt service, 
return on investment of any private person financing the facility, or 
operation and maintenance costs, with excess revenues used for purposes 
allowable under Federal Transit Law?
     Should FTA ensure that there is an enforceable maintenance 
agreement between the transit authority and private company as a pre-
requisite to grant approval?
     Do transit authorities have funding and legal authority to 
assume the maintenance responsibility for private facilities?

8. Rules Concerning Cessation of Use of a Federally-Funded Intercity 
Bus or Rail Terminal or Station for Purposes Allowable Under Federal 
Transit Law

    The construction of an intercity bus or rail terminal with Federal 
grant funds establishes a ``Federal Interest'' in the resulting 
project, such that the project is governed by the real estate 
disposition requirements of the common grant rule at 49 CFR 18.31 and 
Circular 5010.1C, as well as by disposition rules at 49 U.S.C. 5334(h) 
and the common grant rule set forth at 49 CFR 18.32. (See also Section 
19 of the Master Agreement.) If the property ceases to be used for a 
public transportation purpose, including an intercity bus or rail 
purpose, then the property may be disposed of as ``excess property.'' 
In such instance, the grantee or sub-grantee must request disposition 
instructions from the granting agency. These instructions may include 
requiring a pro-rata return of disposition proceeds to the U.S. 
Treasury, or the grantee may be allowed to apply the proceeds to reduce 
the net capital cost of a future public transportation project. The 
property may also be transferred to another public use with prior FTA 
approval, without having to return the

[[Page 15516]]

Federal investment. In addition, FTA invites responses to the following 
related questions:
     How should this provision be implemented for intercity bus 
or rail terminal projects undertaken on land not owned by the public 
transportation agency?
     On what basis might non-transportation joint development 
activities be considered in this context, particularly with regard to 
the generation of program income and joint development transfer of real 
property? FTA seeks practical examples of intercity bus or rail 
terminal reuse, after cessation of intercity service.

9. Eligibility of Furniture, Fixtures and Equipment as a ``Capital 
Project''

    Generally, FTA has funded transportation-related furniture, 
fixture, and equipment (FFE) as eligible costs for public 
transportation projects. FFE related to community services and private, 
profit-making activities has never been considered eligible, even in 
the context of joint development. For example, when FTA provided 
funding for the Linden Center day care in central Ohio, this did not 
extend to lighting fixtures, tables, chairs, blackboards, or other 
items required for the day care, even though many of these items were 
permanently affixed or built into the facility. These items were paid 
for by the tenant. FTA is considering applying this same standard to 
intercity bus and rail terminals that are qualified as public 
transportation capital projects. Because, to date, these items are not 
considered eligible for Federal funding, they have also not been 
previously allowed as local match for Federal grant dollars. In 
addition, FTA invites responses to the following related question:
     How should FTA treat FFE related to lunch counters, 
vending kiosks, and miscellaneous retail activities, such as those 
found in many intercity bus and rail terminals?

    Issued on the 22nd day of March, 2006.
Sandra K. Bushue,
Deputy Administrator.
 [FR Doc. E6-4441 Filed 3-27-06; 8:45 am]
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