[Federal Register Volume 73, Number 190 (Tuesday, September 30, 2008)]
[Notices]
[Pages 56888-56892]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-22840]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket No. FTA-2007-29123]


Capital Investment Program: Availability of Final Circular

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Notice of Availability of Final Circular.

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SUMMARY: The Federal Transit Administration (FTA) has placed in the 
docket and on its Web site, guidance in the form of a circular to 
assist grantees in implementing the Capital Investment Program. 
Principally, the Capital Investment Program provides Federal funding 
for buses and bus facilities, new fixed guideway systems, and fixed 
guideway modernization, as authorized by statute.

DATES: The effective date of the circular is November 1, 2008.

FOR FURTHER INFORMATION CONTACT: Kimberly Sledge, Office of Program 
Management, Federal Transit Administration, 1200 New Jersey Ave., SE., 
East Building, Washington, DC 20590, phone: (202) 366-2053, fax: (202) 
366-7951, or e-mail, [email protected]; or Bonnie Graves, Office 
of Chief Counsel, same address, phone: (202) 366-0944, fax: (202) 366-
3809, or e-mail, [email protected].

SUPPLEMENTARY INFORMATION: 

Availability of Final Circular

    The final circular is not included with this document. You may 
download an electronic copy of the circular from FTA's Web site, at 
http://www.fta.dot.gov. From the home page, click on ``Legislation, 
Regulations and Guidance'' and on that page click on ``Circulars.'' 
Circulars are listed in numerical order; the Capital Investment 
Circular is number 9300.1. Paper copies of the circular may be obtained 
by calling FTA's Administrative Services Help Desk, at 202-366-4865.
    You may retrieve the circular and comments online through the 
Federal Document Management System (FDMS) at: http://www.regulations.gov. Enter docket number FTA-2007-29123 in the

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search field. The FDMS is available 24 hours each day, 365 days each 
year. Electronic submission and retrieval help and guidelines are 
available under the help section of the Web site.

Table of Contents I. Overview

II. Chapter-by-Chapter Analysis
    A. Chapter I--Introduction and Background
    B. Chapter II--Program Overview
    C. Chapter III--Buses and Bus Facilities
    D. Chapter IV--Fixed Guideway Modernization
    E. Chapter V--New Starts/Small Starts Program
    F. Chapter VI--Other Provisions
    G. Appendices

I. Overview

    This notice provides a summary of changes to FTA Circular 9300.1A, 
Capital Program: Grant Application Instructions, and addresses comments 
received in response to the September 28, 2007, Federal Register notice 
(72 FR 55624). Originally, the comment period was scheduled to close on 
November 27, 2007; however, in response to comments to the docket, the 
comment period was subsequently extended until January 25, 2008. FTA 
received comments from twelve parties, including industry associations, 
transit agencies, metropolitan planning organizations, and one private 
transportation provider.
    This final Circular 9300.1B supersedes the Circular 9300.1A, issued 
in 1998.
    FTA has adopted all of the proposed formatting changes published in 
the proposed circular. For example, we have changed the name of the 
circular to ``Capital Investment Program'' to reflect a focus on the 
capital investment nature of eligible activities in 49 U.S.C. 5309 
(``Section 5309''), as amended by the Safe, Accountable, Flexible, 
Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). 
In addition, we changed the format to make this circular consistent 
with the style of other circulars FTA is updating. At the same time, we 
have tried to maintain some consistency with the previous document; for 
example, information about the Bus program is still in Chapter III, 
Fixed Guideway Modernization continues to be in Chapter IV, with New 
Starts/Small Starts information in Chapter V. Substantive changes in 
content, as well as comments to the proposed circular, are discussed in 
the chapter-by-chapter analysis.

II. Chapter-by-Chapter Analysis

    As a preliminary matter, some commenters had non-substantive 
comments, such as formatting suggestions, a suggestion to remove 
references to old Federal Register notices, to include specific terms 
in the index, and to do a thorough review of the draft for typos, 
cross-referencing errors, and the like. We have removed the old Federal 
Register references, made some, but not all, of the suggested 
formatting changes, added terms to the index, and we have thoroughly 
reviewed the document in an effort to remove the errors noted by 
commenters. Further, we have re-ordered the sections of some of the 
chapters to present the material in a more organized fashion. Some 
comments were outside the scope of the proposed circular, and we have 
not addressed those comments in either the circular or this Federal 
Register notice.
    One commenter thought the title ``Capital Investment Program'' was 
misleading since we have included a brief description of the Clean 
Fuels program (49 U.S.C. 5308) in the Bus chapter. We included 
information about the Clean Fuels program because buses purchased under 
Section 5309 may be Clean Fuels buses, and some recipients under 
Section 5309 may also seek funding under the Clean Fuels program for 
additional buses. It is therefore appropriate to include information 
about this related program in the Bus chapter. One commenter suggested 
that if FTA amends or updates the circular due to changes in other 
circulars or regulations that undergo notice and comment, that there be 
further public notice and comment. FTA disagrees. When the revision of 
a circular or regulation requires an opportunity for notice and 
comment, there is no need to satisfy that requirement again just to 
update a reference to that revised document in this circular. We have 
clarified this language in the circular.

A. Chapter I--Introduction and Background

    Chapter I of the proposed circular is an introductory chapter and 
covers general information about FTA and how to contact us, briefly 
reviews the authorizing legislation for the Capital Investment program 
(``Section 5309 program''), provides information about Grants.gov, 
includes definitions applicable to the program, and provides a brief 
program history. The definitions section is new to this circular and 
includes definitions related to the Section 5309 program, as well as 
the Section 5308, Clean Fuels grant program. Where applicable, we have 
used the same definitions found in statutes, rulemakings or other 
circulars and guidance documents to ensure consistency.
    One commenter suggested that the definition of ``Alternatives 
Analysis'' should not require alternatives analysis studies to include 
sufficient information to provide a rating for project justification 
and local financial commitment. FTA refers the commenter and others to 
49 U.S.C. 5309(a)(1)(B), which requires that alternatives analysis 
studies include this information. Since this information is in the 
statute, we did not change the definition in the circular.
    Two commenters had questions about the definitions of ``Eligible 
Applicant'' and ``Designated Recipient'' as used in this circular. The 
term ``Eligible Applicant,'' as used in this circular, applies only to 
the Capital Investment program, and not to the Clean Fuels bus program; 
similarly, the definition of ``Designated Recipient,'' as used in this 
circular, applies only to the Clean Fuels program, as it specifically 
addresses the nonattainment and maintenance area requirements of the 
Clean Air Act. We have used the term ``Recipient'' when referring to a 
designated recipient or an eligible applicant, but when those specific 
terms are used in this circular, they apply to either the Clean Fuels 
or the Capital Investment program, as defined. One commenter suggested 
that FTA change the Clean Fuels definition to state, ``* * * the 
Administrator of EPA has certified sufficiently or significantly 
reduces harmful emissions.'' Since the statute at 49 U.S.C. 
5308(a)(1)(B) uses the term ``sufficiently,'' FTA will use the same 
terminology.
    One commenter suggested we add the word ``streetcar'' to the 
definition of fixed guideway and we made that change. One commenter 
suggested we add a definition of ``Urbanized Area,'' and we have done 
so. One commenter suggested that we change the acronym for urbanized 
area from ``UZA'' to ``UA,'' which is the Census Bureau's acronym. We 
decline to make that change. The acronym UZA is familiar to the transit 
industry, is used in virtually every FTA document, and has become a 
term of art. At the request of a commenter, we have added a definition 
of ``Intelligent Transportation Systems,'' but decline to add a 
definition of ``Eligible Projects,'' as eligible projects are included 
in Chapters II through V. One commenter objected to the inclusion of a 
definition of ``Very Small Starts;'' we will address that objection and 
other comments received regarding Very Small Starts in the analysis of 
Chapter V.
    In addition to the changes described above, FTA has added several

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definitions to this chapter, including ``Capital Asset,'' ``Capital 
Lease,'' ``Discretionary Funding,'' ``Facilities,'' ``Grant,'' 
``Intelligent Transportation Systems,'' ``Preventive Maintenance,'' 
``Public Transportation,'' and ``Useful Life.''

B. Chapter II--Program Overview

    Chapter II provides more detail about the Capital Investment 
program. The first few sections of the chapter were re-ordered for 
readability and consistency. This chapter starts with the statutory 
authority for the Capital Investment program, followed by 
apportionments, funds availability, the goals of the program and a list 
of eligible projects. Also included in Chapter II is information on 
Federal/local matching requirements, relationship to other FTA 
programs, and the requirements to ensure a recipient has the legal, 
financial and technical capacity to carry out a Capital Investment 
project.
    There were some changes to eligible projects under 49 U.S.C. 5309 
with the enactment of SAFETEA-LU. Under the previous authorization 
statute (The Transportation Equity Act for the 21st Century (TEA-21)), 
there were eight categories of eligible projects in 49 U.S.C. 5309. 
These included bus and bus facilities, new fixed guideways, fixed 
guideway modernization, development of corridors to support fixed 
guideway systems, projects designed to meet the needs of elderly and 
disabled passengers, projects to introduce new technology, the capital 
costs of coordinating public transportation with other transportation, 
and capital projects needed for an efficient and coordinated public 
transportation system. Under SAFETEA-LU, there are only four categories 
of eligible projects in 49 U.S.C. 5309: bus and bus facilities, new 
fixed guideways, fixed guideway modernization, and corridor 
improvements. Therefore, the list of eligible projects in the circular 
changed, as well. We defined the four categories of eligible projects 
as ``capital investment projects'' and listed them in this chapter as 
``assets for which FTA provides assistance.'' In addition to these 
``capital investment projects,'' however, we have included a list of 
projects that, ``when integral to a capital investment project,'' are 
eligible for Section 5309 funding. One commenter asked us to clarify 
whether Intelligent Transportation Systems (ITS) is eligible as a 
stand-alone project. Since the statute permits the purchase of ``buses 
and related equipment'' and ITS projects are directly related to buses 
and bus facilities, ITS is eligible as a stand-alone project. In 
addition, bus purchases to meet the needs of elderly persons and 
persons with disabilities continue to be eligible, since bus purchases 
generally are eligible. We note that the purchase of buses to meet the 
special transportation needs of these populations is the purpose of the 
Section 5310 program, and funding is available from that program to 
private non-profit organizations where public transportation is 
unavailable, insufficient or inappropriate.
    We proposed removing two previously eligible projects from the 
circular: the capital cost of contracting and preventive maintenance 
for the bus program. We noted that both of these capital expenditures 
are eligible for funding under other FTA programs, including the 
Urbanized Area Formula program (49 U.S.C. 5307) and the Nonurbanized 
Area Formula program (49 U.S.C. 5311). Three commenters expressed 
concern about removing the capital cost of contracting from the list of 
eligible expenses, and three commenters expressed concern about 
removing preventive maintenance as an eligible expense. After careful 
consideration of the comments, we have returned both the capital cost 
of contracting and preventive maintenance to the list of eligible 
activities.
    Two commenters suggested that FTA include ``intercity bus and 
intercity rail stations and terminals'' as eligible projects. We have 
added this language where appropriate. One commenter requested that we 
add a paragraph on Joint Development under the ``Relationship to Other 
Programs'' section of this chapter. We decline to add an additional 
paragraph, as there is an extensive discussion in Chapter III, at 
section 8, ``Requirements Related to Facilities,'' including a 
reference to FTA's policy on joint development, published in the 
Federal Register on February 7, 2007 (72 FR 5788).

C. Chapter III--Buses and Bus Facilities

    Chapter III addresses buses and related equipment, commonly known 
as ``the bus program.'' This chapter contains information on how funds 
are allocated, a new section describing eligible recipients, examples 
of eligible bus projects, environmental considerations, requirements 
related to vehicles, equipment, and facilities, and information about a 
complementary program, the Clean Fuels grant program.
    Two commenters suggested including intercity bus and rail terminals 
and stations as eligible projects. We have added this language where 
appropriate, and specified that funding of intercity bus stations and 
terminals are eligible when part of a joint development project, in 
accordance with FTA's guidance on joint development (72 FR 5788, Feb. 
7, 2007).
    One commenter recommended that FTA include a reference to the 
Federal Highway Administration's (FHWA) guidance on the Congestion 
Mitigation and Air Quality (CMAQ) Improvement program in the paragraph, 
``Clean Air Act.'' We have added the hyperlink to FHWA's guidance on 
this program. One commenter suggested that FTA require recipients to 
include the planning justification in FTA's Transportation Electronic 
Award and Management (TEAM) system grant application. We have modified 
the circular to reflect this suggestion. We have also updated the 
Charter Bus information, since the final rule became effective on April 
30, 2008.
    Four commenters raised concerns about the paragraph describing 
``Mixed-Use Projects'' in the section, ``Requirements Related to 
Facilities.'' Commenters were concerned about FTA's characterization of 
when a project would qualify as a joint development project, and were 
concerned that FTA had an overbroad interpretation of ``program 
income.'' In addition, one commenter requested that FTA include 
language on intercity bus terminals in this section. We have revised 
this section to address the commenter's concerns by more clearly 
describing joint development projects and clarifying when revenue is 
``program income.'' Further, we added language about intercity bus 
terminals.
    Two commenters suggested that FTA edit the section, ``Environmental 
Considerations,'' which describes the requirements under the National 
Environmental Policy Act (NEPA). In the proposed circular, we included 
examples of projects that are considered ``categorical exclusions''; 
however, FHWA and FTA jointly published a notice of proposed rulemaking 
in the Federal Register (72 FR 44038, Aug. 7, 2007), and therefore, 
that list may change. In order to keep the circular current even after 
the rule has been finalized, we have removed the list of items that are 
considered categorical exclusions and addressed NEPA requirements in 
general terms.
    Two commenters suggested that FTA revise its like-kind exchange 
policy. One commenter suggested that proceeds from vehicles disposed of 
prior to the end of their useful lives should be able to be used for 
any federally funded activity. FTA's long-standing like-kind exchange 
policy requires assets disposed of prior to their useful lives to be 
replaced in kind, or the proceeds of such disposition returned to FTA. 
We

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believe this policy protects the Federal interest and should not be 
changed. Another commenter suggested that FTA's ability to direct the 
proceeds of any sale should be limited to its remaining interest, and 
the use of proceeds in excess of the Federal interest should be up to 
the recipient. FTA declines to make this change because 49 U.S.C. 
5334(h)(4)(B) requires that ``the net income from asset sales, uses, or 
leases (including lease renewals) * * * shall be used by the recipient 
to reduce the gross project cost of other capital projects carried out 
under this chapter.'' One commenter suggested that FTA develop useful 
life standards for sedans and pick-up trucks which are commonly 
purchased by transit agencies. FTA has added sedans used in revenue 
service to the list that includes small buses and vans, and we have 
added useful life standards for trolleys and ferryboats. Vehicles used 
in non-revenue service are considered ``equipment'' and the reader is 
directed to FTA circular 5010, Grants Management Requirements, for 
useful life requirements for equipment.
    Two commenters made suggestions about the language in the section 
on Buy America; we have streamlined this paragraph in Chapter III as 
well as in other chapters that contain information on Buy America. One 
commenter requested that FTA permit a ``phase-in'' period for the 
requirements of the Presidential Coin Act. FTA does not have a role in 
the implementation of this statute. We provide the information in the 
circular simply to make recipients aware of their responsibilities. FTA 
has moved the section discussing the Presidential Coin Act to Chapter 
VI, Other Provisions, since it applies to all Section 5309 projects.

D. Chapter IV--Fixed Guideway Modernization

    Chapter IV addresses fixed guideway modernization, and the chapter 
has been re-ordered for readability and consistency. One commenter 
disagreed with the statement in the section, ``Relationship to 
Urbanized Area Formula Funding,'' that for projects using both Section 
5307 and Section 5309 funding, ``it may be efficient to submit the 
grant applications at the same time.'' We decline to remove this 
sentence. It is not a requirement that these applications be submitted 
at the same time, but in many cases, it may in fact be more efficient 
to do so. As we state in the circular, the grant applicant should 
discuss the best approach with the appropriate FTA regional office.
    Similar to Chapter III's section on ``Environmental 
Considerations,'' we have edited the section, ``Requirements of Fixed 
Guideway Modernization Projects'' to remove the list of categorically 
excluded projects. This section now includes general information about 
NEPA requirements as they relate to fixed guideway modernization.
    One commenter noted that FTA has adopted a general policy that rail 
vehicles have a minimum useful life of 25 years, but a recipient may 
measure lifespan by hours of operation or another measure, and 
requested that these alternative methodologies be referenced in 
subsequent paragraphs. We decline to make that change primarily because 
we note in the circular that ``A recipient * * * may develop an 
appropriate methodology for converting its system to years of 
service.'' Once converted, it is appropriate to discuss useful life in 
terms of years rather than in hours of service or other measure of 
useful life.
    One commenter suggested that FTA clarify, in the subsection, 
``Major Capital Projects,'' whether a project management plan must be 
approved by FTA as a prerequisite to having the grant approved, and set 
a time period for FTA review of any submissions. We have made this 
change.

E. Chapter V--New Starts/Small Starts Program

    Chapter V addresses the New Starts/Small Starts program, and we 
have added a section, ``Allocation of Funds and Period of 
Availability.'' In addition to the information found in Chapter V of 
the circular, FTA maintains a New Starts Web page, at http://www.fta.dot.gov/planning/planning_environment_5221.html, which 
contains the most up-to-date guidance for this program.
    In this circular, FTA draws a distinction between a ``New Start''--
a project that has a total cost of $250 million or more, or for which 
the project sponsor is requesting more than $75 million in Federal 
funds; and a ``Small Start''--a project that has a total cost of less 
than $250 million that requests less than $75 million in Federal funds. 
The various requirements for these two different types of projects are 
described throughout the chapter.
    Two commenters requested that FTA include the statutory list of 
characteristics that make a corridor-based bus capital project a 
``fixed guideway capital project.'' The list of characteristics found 
in 49 U.S.C. 5309(e)(10)(B) is neither prescriptive nor exhaustive. The 
statute uses the words ``such as'' when listing those features that 
represent a ``substantial investment in a defined corridor.'' The 
discussion of Small Starts set forth in the circular reflects the 
proposed and final policy guidance on New Starts and Small Starts 
developed through public notice and comment. See, 73 FR 21170, Apr. 18, 
2008 and 73 FR 46352, Aug. 8, 2008.
    Two commenters questioned FTA's authority to establish requirements 
for ``Very Small Starts'' that differ from those for Small Starts since 
``Very Small Starts'' are not defined or established by statute or 
regulation. FTA interprets 49 U.S.C. 5309(c)(3) to provide the Federal 
Transit Administrator with broad discretion to award grants for 
disparate types of New Start and Small Start projects on such ``terms, 
conditions, requirements, and provisions'' as the Administrator 
determines ``necessary or appropriate'' to carry out the New Starts and 
Small Starts programs authorized by 49 U.S.C. 5309(d) and (e). The 
discussion of Very Small Starts set forth in the circular reflects the 
proposed and final policy guidance on New Starts and Small Starts 
developed through public notice and comment. See, e.g., 71 FR 45100, 
Aug. 8, 2006; 72 FR 6663, Feb. 12, 2007; 72 FR 30912, June 4, 2007; and 
the Updated Interim Guidance on Small Starts issued in July 2007. 
Although FTA has not yet promulgated a final regulation for New Starts 
and Small Starts, the Administrator continues, in his discretion, to 
award discretionary grants under both programs, and this circular 
reflects the basis on which the Administrator will award grants for 
Very Small Starts.
    Two commenters indicated that FTA should revise its definition of 
``financially constrained,'' found in the section, ``Planning and 
Project Development Process.'' We have revised this definition so that 
it is identical to the definition found in the FHWA/FTA planning 
regulation at 23 CFR 450.104. Two commenters suggested that in the 
section, ``Environmental Protection,'' the circular should not state 
that environmental regulations ``prohibit FTA from taking a final 
action * * *.'' We have revised the section to include language from 
the joint FHWA/FTA environmental regulations. One commenter indicated 
that we only addressed New Starts in this section; we have added the 
terms Small Starts and Very Small Starts, as the environmental 
protection requirements are likely to apply to those projects, as well.

F. Chapter VI--Other Provisions

    This chapter is similar to the ``Other Provisions'' chapters in 
other FTA circulars, and summarizes a number of FTA-specific and other 
Federal

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requirements that FTA grantees are held to in addition to the program-
specific requirements and guidance provided in the circular. We revised 
this chapter to alphabetize the provisions, and we moved the 
Presidential Coin Act to this chapter.
    Two commenters asked FTA to clarify whether the public hearing 
requirements described in the section, ``Public Hearing Requirements'' 
apply to projects that are categorical exclusions under NEPA. The 
circular states that NEPA public hearing requirements are sufficient to 
meet the requirements of 49 U.S.C. 5323(b), which requires public 
involvement for any capital project that will ``substantially affect a 
community or the public transportation services of a community.'' 
Therefore, whether or not NEPA public hearing requirements apply, the 
provisions of 49 U.S.C. 5323(b) require public involvement for most 
capital projects. In response to comments, we have edited this section 
to clarify the requirements.
    We have revised the section, ``Environmental Reviews,'' since each 
chapter contains specific information about environmental requirements 
that apply to specific types of projects, and an extensive discussion 
in this chapter is repetitive and unnecessary. One commenter suggested 
that in the section, ``Clean Air Act,'' we include as an appendix the 
list of exempt transit projects in the EPA regulation that do not 
require any analysis. We decline to include this list, but we have 
included the direct regulatory citation for this information.
    We have updated the section, ``Charter Bus Services'' to reflect 
the new regulation on charter service. (73 FR 2326, Jan. 14, 2008).

G. Appendices

    The appendices are intended as tools for developing a grant 
application. Appendix A specifically addresses steps and instructions 
for preparing a grant application, including pre-application and 
application stages. Appendix A also includes an application checklist 
and information for registering with the Electronic Clearing House 
Operation's (ECHO's) electronic payment system. One commenter suggested 
we include information as to where one can find the TEAM User Guide; we 
have included the hyperlink to the Web site for this information. One 
commenter suggested that FTA request planning justification information 
in the ``project description'' section of TEAM. While this information 
is not required in the project description, we note that recipients 
must include the date and page number of the most recently approved 
Statewide Transportation Improvement Plan (STIP) for the projects 
listed in the application.
    Appendix B provides budget information, including several sample 
budgets. Appendix C contains samples of an Authorizing Resolution, a 
Fleet Status Report, Like-Kind Transaction for Mid-life Sale of a 
Transit Bus, an Opinion of Counsel, a Project Milestone Schedule, and 
Proceeds from the Sale of Assets. Appendix D contains contact 
information for all of FTA's regional and metropolitan offices, and a 
new Appendix E contains a listing of all legal citations found in the 
circular.
    With the substantive exceptions noted in the chapter-by-chapter 
analysis above, as well as non-substantive and clarifying edits, FTA 
adopts the final circular as proposed.

    Issued in Washington, DC, this 22nd day of September, 2008.
James S. Simpson,
Administrator.
[FR Doc. E8-22840 Filed 9-29-08; 8:45 am]
BILLING CODE 4910-57-P