[Federal Register Volume 76, Number 26 (Tuesday, February 8, 2011)]
[Notices]
[Pages 6958-7079]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-2592]



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Vol. 76

Tuesday,

No. 26

February 8, 2011

Part IV





Department of Transportation





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Federal Transit Administration



FTA Fiscal Year 2011 Apportionments, Allocations, and Program 
Information; Notice

  Federal Register / Vol. 76 , No. 26 / Tuesday, February 8, 2011 / 
Notices  

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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration


FTA Fiscal Year 2011 Apportionments, Allocations, and Program 
Information

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Notice.

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SUMMARY: The Federal Transit Administration (FTA) annually publishes 
one or more notices apportioning funds appropriated by law. In some 
cases, if less than a full year of funding is available, FTA publishes 
multiple partial apportionment notices. This notice is the first notice 
announcing partial apportionment of Fiscal Year (FY) 2011 formula 
funds. It also provides program guidance and requirements; and provides 
information on several program issues important in the current fiscal 
year. The notice also includes tables that show certain unobligated 
(carryover) funding discretionary programs from previous years that 
will be available for obligation during FY 2011.

FOR FURTHER INFORMATION CONTACT: For general information about this 
notice contact Kimberly Sledge, Team Leader, Transit Program Management 
Team, at (202) 366-2053. Please contact the appropriate FTA regional 
office for any specific requests for information or technical 
assistance. The Appendix at the end of this notice includes contact 
information for FTA regional offices. An FTA headquarters contact for 
each major program area is included in the discussion of that program 
in the text of the notice.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Overview
II. FY 2011 Available Funding for FTA Programs
    A. Available Funding Based on Continuing Appropriations and 
Surface Transportation Extension Act, 2011, and Safe, Accountable, 
Flexible, Efficient Transportation Equity Act: A Legacy for Users 
(SAFETEA-LU).
    B. Program Funds Set-aside for Oversight
III. 2011 FTA Programs
    A. Metropolitan Planning Program (49 U.S.C. 5305)
    B. Statewide Planning and Research Program (49 U.S.C. 5305)
    C. Urbanized Area Formula Program (49 U.S.C. 5307)
    D. Capital Investment Program (49 U.S.C. 5309)--Fixed Guideway 
Modernization
    E. Special Needs of Elderly Individuals and Individuals With 
Disabilities Program (49 U.S.C. 5310)
    F. Nonurbanized Area Formula Program (49 U.S.C. 5311)
    G. Rural Transportation Assistance Program (49 U.S.C. 
5311(b)(3))
    H. Job Access and Reverse Commute Program (49 U.S.C. 5316)
    I. New Freedom Program (49 U.S.C. 5317)
    J. Growing States and High Density States Formula (49 U.S.C. 
5340)
IV. FTA Policy and Procedures for FY 2011 Grants Requirements
    A. Automatic Pre-Award Authority to Incur Project Costs
    B. Letter of No Prejudice (LONP) Policy
    C. FTA FY 2011 Annual List of Certifications and Assurances
    D. FHWA Funds Used for Transit Purposes
    E. Technical Assistance
Tables
    1. FTA FY 2011 Appropriations and Apportionments for Grant 
Programs
    2. FTA FY 2011 Metropolitan Planning Program and Statewide 
Planning and Research Program Apportionments
    3. FTA FY 2011 Section 5307 and Section 5340 Urbanized Area 
Apportionments
    3-A. 2000 Census Urbanized Areas 200,000 or More in Population 
Eligible to Use Section 5307 Funds for Operating Assistance
    4. FTA FY 2011 Section 5307 Apportionment Formula
    5. FTA FY 2011 Formula Programs Apportionments Data Unit Values
    6. FTA FY 2011 Small Transit Intensive Cities Performance Data 
and Apportionments
    7. FTA Prior Year Unobligated Section 5308 Clean Fuels 
Allocations
    8. FTA FY 2011 Section 5309 Fixed Guideway Modernization 
Apportionments
    9. FTA FY 2011 Fixed Guideway Modernization Program 
Apportionment Formula
    10. FTA Prior Year Unobligated Section 5309 Buses and Bus 
Related Equipment and Facilities Allocations
    11. FTA Prior Year Unobligated Section 5309 New Starts 
Allocations
    12. FTA FY 2011 Special Needs for Elderly Individuals and 
Individuals with Disabilities Apportionments
    13. FTA FY 2011 Section 5311 and Section 5340 Nonurbanized Area 
Formula Apportionments, and Rural Transportation Assistance Program 
(RTAP) Allocations
    14. FTA Prior Unobligated Tribal Transit Discretionary 
Allocations
    15. FTA FY 2011 Section 5316 Job Access and Reverse Commute 
(JARC) Apportionments
    16. FTA FY 2011 Section 5317 New Freedom Apportionments
    17. 2011 FTA Prior Year Unobligated Section 5339 Alternatives 
Analysis Allocations
    Appendix

I. Overview

    FTA's current authorization, the Safe, Accountable, Flexible, 
Efficient, Transportation Equity Act: A Legacy for Users (SAFETEA-LU), 
expired September 30, 2009. Since that time, Congress has enacted 
short-term extensions allowing FTA to continue its current programs. 
Most recently, the Continuing Appropriations and Surface Transportation 
Extensions Act, 2011, as amended, (Pub. L. 111-322, Div. C), continues 
the authorization of the Federal transit programs of the U.S. 
Department of Transportation (DOT) through March 4, 2011. It extends 
contract authority for programs in the Formula and Bus Grants account 
provided in the previous authorization extension Hiring Incentives to 
Restore Employment Act (Pub. L. 111-147) until March 4, 2011, i.e., 
approximately 5/12th of the contract authority available in FY 2010.
    This document apportions approximately $3 billion in FY 2011 funds 
made available under the Continuing Appropriations and Surface 
Transportation Extensions of Act 2011, as amended, hereinafter, (``CR, 
2011'') among potential program recipients according to statutory 
formulas in 49 U.S.C. Chapter 53. This is in addition to over $4.2 
billion existing in unobligated formula funds available from prior 
years. The notice includes FY 2011 formula funds that are currently 
available, which is approximately 5/12 or 42.47% of the amounts that 
were available under the Consolidated Appropriations Act, 2010 (Pub. L. 
111-117). The notice does not include any extension or reprogramming of 
any discretionary funds that lapsed to the designated project as of 
September 30, 2010. FTA will issue a supplemental notice at a later 
date for any additional increments of formula and discretionary funds 
that become available.
    For each FTA program included in this notice, we have provided 
relevant information on the FY 2011 funding currently available, 
program requirements, period of availability, and other related program 
information and highlights, as appropriate. A separate section of the 
document provides information on program requirements and guidance that 
are applicable to all FTA programs.

II. FY 2011 Available Funding for FTA Programs

A. Funding Based on the Continuing Appropriations and Surface 
Transportation Extensions Act, 2011 (Pub. L. 111-322)

    The CR 2011 makes available approximately 5/12ths of the contract 
authority levels authorized in FY 2010 for the Formula programs. Table 
1 of this document shows the funding that is currently available for 
the FTA programs. This Federal Register notice includes tables of 
apportionments and

[[Page 6959]]

allocations for FTA formula programs based on CR, 2011 and carryover 
discretionary funds.

B. Program Funds Set-aside for Project Management Oversight

    As background, Section 5327 of title 49 U.S.C. authorizes the 
takedown of funds from FTA programs for project management oversight. 
Section 5327 provides oversight takedowns at the following levels: 0.5 
percent of Planning funds, 0.75 percent of Urbanized Area Formula 
funds, 1 percent of Capital Investment funds, 0.5 percent of Special 
Needs of Elderly Individuals and Individuals with Disabilities formula 
funds, 0.5 percent of Non-urbanized Area Formula funds, and 0.5 percent 
of the Paul S. Sarbanes Transit in the Parks Program funds (formerly 
the Alternative Transportation in the Parks and Public Lands Program).
    The funds are used to provide necessary oversight activities, 
including oversight of the construction of any major capital project 
under these statutory programs; to conduct State Safety Oversight, drug 
and alcohol, civil rights, procurement systems, management, planning 
certification and, financial reviews and audits, as well as evaluations 
and analyses of grantee specific problems and issues; and to provide 
technical assistance to correct deficiencies identified in compliance 
reviews and audits.

III. 2011 FTA Programs

    This section of the notice provides the available FY 2011 funding 
through March 4, 2011, and/or other important program-related 
information for eleven FTA formula programs that are contained in this 
notice. Funding and/or other important information for each of the 
formula programs is presented immediately below. This includes program 
apportionments, certain program requirements, length of time FY 2011 
funding is available for obligation and other significant program 
information pertaining to FY 2011.

A. Metropolitan Planning Program (49 U.S.C. 5305(d))

    Section 5305(d) authorizes Federal funding to support a 
cooperative, continuous, and comprehensive planning program for 
transportation investment decision-making at the metropolitan area 
level. The specific requirements of metropolitan transportation 
planning are set forth in 49 U.S.C. 5303 and further explained in 23 
CFR Part 450, as incorporated by reference in 49 CFR Part 613, 
Statewide Transportation Planning; Metropolitan Transportation 
Planning; Final Rule. State Departments of Transportation are direct 
recipients of funds allocated by FTA, which are then suballocated to 
Metropolitan Planning Organizations (MPOs) by formula, for planning 
activities that support the economic vitality of the metropolitan area, 
especially by enabling global competitiveness, productivity, and 
efficiency; increasing the safety and security of the transportation 
system for motorized and non-motorized users; increasing the 
accessibility and mobility options available to people and for freight; 
protecting and enhancing the environment, promoting energy 
conservation, and improving quality of life; enhancing the integration 
and connectivity of the transportation system, across and between 
modes, for people and freight; promoting efficient transportation 
system management and operation; and emphasizing the preservation of 
the existing transportation system. This funding must support work 
elements and activities resulting in balanced and comprehensive 
intermodal transportation planning for the movement of people and goods 
in the metropolitan area. Comprehensive transportation planning is not 
limited to transit planning or surface transportation planning, but 
also encompasses the relationships among land use and all 
transportation modes, without regard to the programmatic source of 
Federal assistance. Eligible work elements or activities include, but 
are not limited to studies relating to management, mobility management, 
planning, operations, capital requirements, and economic feasibility; 
evaluation of previously funded projects; peer reviews and exchanges of 
technical data, information, assistance, and related activities in 
support of planning and environmental analysis among MPOs and other 
transportation planners; work elements and related activities 
preliminary to and in preparation for constructing, acquiring, or 
improving the operation of facilities and equipment; development of 
coordinated public transit human services transportation plans. An 
exhaustive list of eligible work activities is provided in FTA Circular 
8100.1C, Program Guidance for Metropolitan Planning and State Planning 
and Research Program Grants, dated September 1, 2008. For more about 
the Metropolitan Planning Program and the FTA Circular 8100.1C, contact 
Victor Austin, Office of Planning and Environment at (202) 366-2996.
1. FY 2011 Funding Availability
    CR 2011 provides $39,790,936 to the Metropolitan Planning Program 
(49 U.S.C. 5305(d) to support metropolitan transportation planning 
activities set forth in 49 U.S.C. 5303. The total amount apportioned 
for the Metropolitan Planning Program to States for MPOs' use in 
urbanized areas (UZAs) is $39,591,981, as shown in the table below, 
after the deduction for oversight.

                      Metropolitan Planning Program
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total Appropriation...................................       $39,790,936
Oversight Deduction...................................          -198,955
                                                       -----------------
    Total Apportioned.................................        39,591,981
------------------------------------------------------------------------

    States' apportionments for this program are displayed in Table 2.
2. Basis for Formula Apportionments
    As specified in law, 82.72 percent of the amounts authorized for 
Section 5305 are allocated to the Metropolitan Planning program. FTA 
allocates Metropolitan Planning funds to the States according to a 
statutory formula. Eighty percent of the funds are distributed to the 
States as a basic allocation based on each State's UZA population, 
based on the most recent decennial Census. The remaining 20 percent is 
provided to the States as a supplemental allocation based on an FTA 
administrative formula to address planning needs in the larger, more 
complex UZAs. The amount published for each State is a combined total 
of both the basic and supplemental allocation.
3. Program Requirements
    The State allocates Metropolitan Planning funds to MPOs in UZAs or 
portions thereof to provide funds for projects included in an annual 
work program (the Unified Planning Work Program, or UPWP) that includes 
both highway and transit planning projects. Each State has either 
reaffirmed or developed, in consultation with their MPOs, an allocation 
formula, based on the 2000 Census. The State allocation formula may be 
changed annually, but any change requires approval by the FTA regional 
office before grant approval. Program guidance for the Metropolitan 
Planning Program is found in FTA Circular 8100.1C, Program Guidance for 
Metropolitan Planning and State Planning and Research Program Grants, 
dated September 1, 2008. For more about the Metropolitan Planning 
Program and the FTA Circular 8100.1C, contact Victor Austin, Office of

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Planning and Environment at (202) 366-2996.
4. Period of Availability
    The funds apportioned under the Metropolitan Planning program to 
each State remain available for obligation by FTA to recipients for 
four fiscal years--which includes the year of apportionment plus three 
additional years. Any apportioned funds that remain unobligated at the 
close of business on September 30, 2014, will revert to FTA for 
reapportionment under the Metropolitan Planning Program.
5. Consolidated Planning Grants
    FTA and FHWA planning funds under both the Metropolitan Planning 
and State Planning and Research Programs can be consolidated into a 
single consolidated planning grant (CPG), awarded by either FTA or 
FHWA. The CPG eliminates the need to monitor individual fund sources, 
if several have been used, and ensures that the oldest funds will 
always be used first. Unlike ``flex funds'' for capital programs, 
planning funds from FHWA may be combined with FTA planning funds in a 
single grant. Alternatively, FTA planning funds may be transferred to 
FHWA to be administered as combined grants.
    Under the CPG, States can report metropolitan planning program 
expenditures (to comply with the Single Audit Act) for both FTA and 
FHWA under the Catalogue of Federal Domestic Assistance number for 
FTA's Metropolitan Planning Program (20.505). Additionally, for States 
with an FHWA Metropolitan Planning (PL) fund-matching ratio greater 
than 80 percent, the State can waive the 20 percent local share 
requirement, with FTA's concurrence, to allow FTA funds used for 
metropolitan planning in a CPG to be granted at the higher FHWA rate. 
For some States, this Federal match rate can exceed 90 percent.
    States interested in transferring planning funds between FTA and 
FHWA should contact the FTA Regional Office or FHWA Division Office for 
more detailed procedures. Current guidelines are included in Federal 
Highway Administration Memorandum dated July 12, 2007, ``Information: 
Final Transfers to Other Agencies that Administer Title 23 Programs.''
    For further information on CPGs, contact Nancy Grubb, Office of 
Budget and Policy, FTA, at (202)366-1635.

B. Statewide Planning and Research Program (49 U.S.C. 5305(e))

    This program provides financial assistance to States for Statewide 
transportation planning and other technical assistance activities, 
including supplementing the technical assistance program provided 
through the Metropolitan Planning program. The specific requirements of 
Statewide transportation planning are set forth in 49 U.S.C. 5304 and 
further explained in 23 CFR Part 450 as referenced in 49 CFR Part 613, 
Statewide Transportation Planning; Metropolitan Transportation 
Planning; Final Rule. This funding must support work elements and 
activities resulting in balanced and comprehensive intermodal 
transportation planning for the movement of people and goods. 
Comprehensive transportation planning is not limited to transit 
planning or surface transportation planning, but also encompasses the 
relationships among land use and all transportation modes, without 
regard to the programmatic source of Federal assistance. For more 
information, contact Victor Austin, Office of Planning and Environment 
at (202) 366-2996.
1. FY 2011 Funding Availability
    CR 2011 provides $8,312,227 to the State Planning and Research 
Program (49 U.S.C. 5305). The total amount apportioned for the State 
Planning and Research Program (SPRP) is $8,270,666 as shown in the 
table below, after the deduction for oversight (authorized by 49 U.S.C. 
5327).

                   State Planning and Research Program
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total Appropriation...................................        $8,312,227
Oversight Deduction...................................           -41,561
                                                       -----------------
    Total Apportioned.................................         8,270,666
------------------------------------------------------------------------

    State apportionments for this program are displayed in Table 2.
2. Basis for Apportionment Formula
    As specified in law, 17.28 percent of the amounts authorized for 
Section 5305 are allocated to the State Planning and Research program. 
FTA apportions funds to States by a statutory formula that is based on 
the most recent decennial Census, and the State's UZA population as 
compared to the UZA population of all States.
3. Requirements
    Funds are provided to States for Statewide transportation planning 
programs. These funds may be used for a variety of purposes such as 
planning, technical studies and assistance, demonstrations, and 
management training. In addition, a State may authorize a portion of 
these funds to be used to supplement Metropolitan Planning funds 
allocated by the State to its UZAs, as the State deems appropriate. 
Program guidance for the State Planning and Research program is found 
in FTA Circular 8100.1C. This funding must support work elements and 
activities resulting in balanced and comprehensive intermodal 
transportation planning for the movement of people and goods. 
Comprehensive transportation planning is not limited to transit 
planning or surface transportation planning, but also encompasses the 
relationships among land use and all transportation modes, without 
regard to the programmatic source of Federal assistance. Eligible work 
elements or activities include, but are not limited to studies relating 
to management, planning, operations, capital requirements, and economic 
feasibility; evaluation of previously funded projects; peer reviews and 
exchanges of technical data, information, assistance, and related 
activities in support of planning and environmental analysis; work 
elements and related activities preliminary to and in preparation for 
constructing, acquiring, or improving the operation of facilities and 
equipment. An exhaustive list of eligible work activities is provided 
in FTA Circular 8100.1C, Program Guidance for Metropolitan Planning and 
State Planning and Research Program Grants, dated September 1, 2008. 
For more information, contact Victor Austin, Office of Planning and 
Environment at (202) 366-2996.
4. Period of Availability
    The funds apportioned under the State Planning and Research program 
to each State remain available for obligation for four fiscal years, 
which include the year of apportionment plus three additional fiscal 
years. Any apportioned funds that remain unobligated at the close of 
business on September 30, 2014, will revert to FTA for reapportionment 
under the State Planning and Research Program.

C. Urbanized Area Formula Program (49 U.S.C. 5307)

    Section 5307 authorizes Federal capital assistance, and in some 
cases, operating assistance for public transportation in UZAs. A UZA is 
an area with a population of 50,000 or more that has been defined and 
designated as such in the 2000 Census by the U.S. Census Bureau. The

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Urbanized Area Formula Program funds may also be used to support 
planning activities, and may supplement planning projects funded under 
the Metropolitan Planning program. Urbanized Areas Formula Program 
funds used for planning must be shown in the Unified Planning Work 
Program (UPWP) for MPO(s) with responsibility for that area. Funding is 
apportioned directly to each UZA with a population of 200,000 or more, 
and to the State Governors for UZAs with populations between 50,000 and 
200,000. Eligible applicants are limited to entities designated as 
recipients in accordance with 49 U.S.C. 5307(a)(2) and other public 
entities with the consent of the Designated Recipient. Generally, 
operating assistance is not an eligible expense for UZAs with 
populations of 200,000 or more. However, there are several exceptions 
to this restriction. The exceptions are described in section 3(d)(5) 
below.
    For more information about the Urbanized Area Formula Program 
contact Kimberly Sledge, Office of Transit Programs, at (202) 366-2053.
1. FY 2011 Funding Availability
    CR 2011 provides $1,763,230,999 to the Urbanized Area Formula 
Program (49 U.S.C. 5307). The total amount apportioned for the 
Urbanized Area Formula Program is $1,916,008,252 as shown in the table 
below, after the 0.75 percent deduction for oversight (authorized by 49 
U.S.C. 5327) and including funds apportioned to UZAs from the 
appropriation for Section 5340 for Growing States and High Density 
States.

                     Urbanized Area Formula Program
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total Appropriation..................................                \a\
                                                          $1,763,230,999
Oversight Deduction..................................        -13,224,232
Section 5340 Funds Added.............................        166,001,486
                                                      ------------------
    Total Apportioned................................      1,916,008,252
------------------------------------------------------------------------
\a\ One percent set-aside for Small Transit Intensive Cities Formula.

    Table 3 displays the amounts apportioned under the Urbanized Area 
Formula Program.
2. Basis for Formula Apportionment
    FTA apportions Urbanized Area Formula Program funds based on 
legislative formulas. Different formulas apply to UZAs with populations 
of 200,000 or more and to UZAs with populations less than 200,000. For 
UZAs with 50,000 to 199,999 in population, the formula is based solely 
on population and population density. For UZAs with populations of 
200,000 and more, the formula is based on a combination of bus revenue 
vehicle miles, bus passenger miles, fixed guideway revenue vehicle 
miles, and fixed guideway route miles, as well as population and 
population density. Table 4 includes detailed information about the 
formulas.
    To calculate a UZA's FY 2011 apportionment, FTA used population and 
population density statistics from the 2000 Census and (when 
applicable) validated mileage and transit service data from transit 
providers' 2009 National Transit Database (NTD) Report Year. Consistent 
with 49 U.S.C. 5336(b), FTA used 60 percent of the directional route 
miles attributable to the Alaska Railroad passenger operations system 
to calculate the apportionment for the Anchorage, Alaska UZA.
    FTA has calculated dollar unit values for the formula factors used 
in the Urbanized Area Formula Program apportionment calculations. These 
values represent the amount of money each unit of a factor is worth in 
this year's apportionment. The unit values change each year, based on 
all of the data used to calculate the apportionments. The dollar unit 
values for FY 2011 are displayed in Table 5. To replicate the basic 
formula component of a UZA's apportionment, multiply the dollar unit 
value by the appropriate formula factor (i.e., the population, 
population x population density), and when applicable, data from the 
NTD (i.e., route miles, vehicle revenue miles, passenger miles, and 
operating cost).
    In FY 2011, one percent of funds appropriated for Section 5307, or 
$17,632,310 based on CR 2011 is set aside for Small Transit Intensive 
Cities (STIC). FTA apportions these funds to UZAs under 200,000 in 
population that operate at a level of service equal to or above the 
industry average level of service for all UZAs with a population of at 
least 200,000, but not more than 999,999, in one or more of six 
performance categories: passenger miles traveled per vehicle revenue 
mile, passenger miles traveled per vehicle revenue hour, vehicle 
revenue miles per capita, vehicle revenue hours per capita, passenger 
miles traveled per capita, and passengers per capita.
    The data for these categories for the purpose of FY 2011 
apportionments comes from the NTD reports for the 2009 reporting year. 
This data is used to determine a UZA's eligibility under the STIC 
formula, and is also used in the STIC apportionment calculations. 
Because these performance data change with each year's NTD reports, the 
UZAs eligible for STIC funds and the amount each receives may vary each 
year. In FY 2011, FTA apportioned $55,976 for each performance factor/
category for which the urbanized area exceeded the national average for 
UZAs with a population of at least 200,000 but not more than 999,999.
    In addition to the funds apportioned to UZAs, according to the 
Section 5307 formula factors contained in 49 U.S.C. 5336, FTA also 
apportions funds to urbanized areas under Section 5340 Growing States 
and High Density States formula factors. In FY 2011, FTA apportions 
$67,464,168 to UZAs in growing States and $98,537,318 to UZAs in High 
Density States. Half of the funds appropriated for Section 5340 are 
available to Growing States and half to High Density States. FTA 
apportions Growing States funds by a formula based on State population 
forecasts for 15 years beyond the most recent Census. FTA distributes 
the amounts apportioned for each State between UZAs and nonurbanized 
areas based on the ratio of urbanized/nonurbanized population within 
each State in the 2000 census, and to UZAs proportionately based on UZA 
population in the 2000 census (because population estimates are not 
available at the UZA level). FTA apportions the High Density States 
funds to States with population densities in excess of 370 persons per 
square mile. These funds are apportioned only to UZAs within those 
States. FTA pro-rates each UZA's share of the High Density funds based 
on the population of the UZAs in the State in the 2000 census.
    FTA cannot provide unit values for the Growing States or High 
Density formulas because the allocations to individual States and 
urbanized areas are based on their relative population data, rather 
than on a national per capita basis.
    Based on language in the conference report accompanying SAFETEA-LU, 
FTA is to show a single apportionment amount for Section 5307, STIC and 
Section 5340. FTA shows a single Section 5307 apportionment amount for 
each UZA in Table 3, the Urbanized Area Formula apportionments. The 
amount includes funds apportioned based on the Section 5307 formula 
factors, any STIC funds, and any Growing States and High Density States 
funding allocated to the area. FTA uses separate formulas to calculate 
and generate the respective apportionment amounts for the Section 5307, 
STIC and Section 5340. For technical assistance purposes, the UZAs that 
received STIC funds are listed in Table 6. FTA will make available 
breakouts of the funding allocated to each UZA under these

[[Page 6962]]

formulas, upon request to the regional office.
3. Program Requirements
    Program guidance for the Urbanized Area Formula Program is 
currently found in FTA Circular 9030.1D, Urbanized Area Formula 
Program: Grant Application Instructions, dated May 1, 2010, and 
supplemented by additional information or changes provided in this 
document.
a. Urbanized Area Formula Apportionments to Governors
    For small UZAs, those with a population of less than 200,000, FTA 
apportions funds to the Governor of each State for distribution. A 
single total Governor's apportionment amount for the Urbanized Area 
Formula, STIC, and Growing States and High Density States is shown in 
the Urbanized Area Formula Apportionment Table 3. The table also shows 
the apportionment amount attributable by formula to each small UZA 
within the State for information purposes only unless the small UZA is 
located within the planning boundaries of a Transportation Management 
Area (TMA). The Governor is not bound by the small UZA amounts 
published in this notice and shall determine the sub-allocation of 
funds among the small UZAs. The Governor's sub-allocation should be 
sent to the appropriate FTA Regional Office before grants are awarded. 
In the case of a small UZA that is located within the planning 
boundaries of TMA, the Governor must allocate to that small UZA, as 
discussed in subsection f below.
b. Transit Enhancements
    Section 5307(d)(1)(K) requires that one percent of Section 5307 
funds apportioned to UZAs with populations of 200,000 or more be spent 
on eligible transit enhancement activities or projects. This 
requirement is now treated as a certification, rather than as a set-
aside as was the case under the Transportation Equity Act for the 21st 
Century (TEA-21). Designated recipients in UZAs with populations of 
200,000 or more certify they are spending no less than one percent of 
Section 5307 funds for transit enhancements. In addition, Designated 
Recipients must submit an annual report on how they spent the money 
with the Federal fiscal year's final quarterly progress report in TEAM-
Web. The report should include the following elements: (1) Grantee 
name; (2) UZA name and number; (3) FTA project number; (4) transit 
enhancement category; (5) brief description of enhancement and progress 
towards project implementation; (6) activity line item code from the 
approved budget; and (7) amount awarded by FTA for the enhancement. The 
list of transit enhancement categories and Activity Line Item (ALI) 
codes may be found in the table of Scope and ALI codes on TEAM-Web, 
which can be accessed at http://FTATEAMWeb.fta.dot.gov.
    The term ``transit enhancement'' includes projects or project 
elements that are designed to enhance public transportation service or 
use and are physically or functionally related to transit facilities. 
Eligible enhancements include the following: (1) Historic preservation, 
rehabilitation, and operation of historic mass transportation 
buildings, structures, and facilities (including historic bus and 
railroad facilities); (2) bus shelters; (3) landscaping and other 
scenic beautification, including tables, benches, trash receptacles, 
and street lights; (4) public art; (5) pedestrian access and walkways; 
(6) bicycle access, including bicycle storage facilities and installing 
equipment for transporting bicycles on mass transportation vehicles; 
(7) transit connections to parks within the recipient's transit service 
area; (8) signage; and (9) enhanced access for persons with 
disabilities to mass transportation.
    It is the responsibility of the MPO to determine how the one-
percent for transit enhancements will be allotted to transit projects. 
The one percent minimum requirement does not preclude more than one 
percent from being expended in a UZA for transit enhancements. However, 
activities that are only eligible as enhancements--in particular, 
operating costs for historic facilities--may be assisted only within 
the one-percent funding level.
c. Transit Security Projects
    Consistent with section 5307(d)(1)(J), each recipient of Urbanized 
Area Formula funds must certify that of the amount received each fiscal 
year, it will expend at least one percent on ``public transportation 
security projects'' or must certify that it has decided the expenditure 
is not necessary. For applicants not eligible to receive Section 5307 
funds for operating assistance, only capital security projects may be 
funded with the one percent. SAFETEA-LU, however, expanded the 
definition of eligible ``capital'' projects to include specific crime 
prevention and security activities, including: (1) Projects to refine 
and develop security and emergency response plans; (2) projects aimed 
at detecting chemical and biological agents in public transportation; 
(3) the conduct of emergency response drills with public transportation 
agencies and local first response agencies; and (4) security training 
for public transportation employees, but excluding all expenses related 
to operations, other than such expenses incurred in conducting 
emergency drills and training. Activity Line Item (ALI) codes have been 
established for these four new capital activities and will be used to 
track the use of this provision. The one percent may also include 
security expenditures included within other capital activities, and, 
where the recipient is eligible, operating assistance.
    FTA is often called upon to report to Congress and others on how 
grantees are expending Federal funds for security enhancements. To 
facilitate tracking of grantees' security expenditures, which are not 
always evident when included within larger capital or operating ALI 
items in the grant budget, we have established a non-additive (``non-
add'') scope code for security expenditures--Scope 991. The non-add 
scope is to be used to aggregate activities included in other scopes, 
and it does not increase the budget total. Section 5307 grantees should 
include this non-add scope in the project budget for each new Section 
5307 grant application or amendment. Under this non-add scope, the 
applicant should repeat the full amount of any of the line items in the 
budget that are exclusively for security and include the portion of any 
other line item in the project budget that is attributable to security, 
using under the non-add scope the same line item used in the project 
budget. The grantee can modify the ALI description or use the extended 
text feature, if necessary, to describe the security expenditures.
    The grantee must provide information regarding its use of the one 
percent for security as part of each Section 5307 grant application, 
using a special screen in TEAM-Web. If the grantee has certified that 
it is not necessary to expend one percent for security, the Section 
5307 grant application must include information to support that 
certification. FTA will not process an application for a Section 5307 
grant until the security information is complete.
d. FY 2011 Operating Assistance
    UZAs under 200,000 in population may use Section 5307 funds for 
operating assistance. In addition, Section 5307, as amended, allows 
some UZAs with a population of 200,000 or more to use Urbanized Area 
Formula funds for operating assistance under certain conditions. CR, 
2011 extends

[[Page 6963]]

that eligibility until March 4, 2011. The specific provisions allowing 
the limited use of operating assistance in large UZAs follow:
    (1) Section 5307(b)(1)(E) provides for grants for the operating 
costs of equipment and facilities for use in public transportation in 
the Evansville, IN-KY urbanized area, for a portion or portions of the 
UZA if ``the portion'' of the UZA includes only one State, the 
population of ``the portion'' is less than 30,000, and the grants will 
not be used to provide public transportation outside of ``the portion'' 
of the UZA.
    (2) Section 5307(b)(1)(F) provides operating costs of equipment and 
facilities for use in public transportation for local governmental 
authorities in areas which adopted transit operating and financing 
plans that became a part of the Houston, Texas, UZA as a result of the 
2000 decennial census of population, but lie outside the service area 
of the principal public transportation agency that serves the Houston 
UZA.
    (3) Section 5336(a)(2) prescribes the formula to be used to 
apportion Section 5307 funds to UZAs with population of 200,000 or 
more. SAFETEA-LU amended 5336(a)(2) to add language that stated, `` * * 
* except that the amount apportioned to the Anchorage urbanized area 
under subsection (b) shall be available to the Alaska Railroad for any 
costs related to its passenger operations.'' This language has the 
effect of directing that funds apportioned to the Anchorage urbanized 
area, under the fixed guideway tiers of the Section 5307 apportionment 
formula, be made available to the Alaska Railroad, and that these funds 
may be used for any capital or operating costs related to its passenger 
operations.
    (4) Section 3027(c)(3) of TEA-21, as amended (49 U.S.C. 5307 note), 
provides an exception to the restriction on the use of operating 
assistance in a UZA with a population of 200,000 or more, by allowing 
transit providers/grantees that provide service exclusively to elderly 
persons and persons with disabilities and that operate 20 or fewer 
vehicles to use Section 5307 funds apportioned to the UZA for operating 
assistance. The total amount of funding made available for this purpose 
under Section 3027(c)(3) is $1.4 million. Transit providers/grantees 
eligible under this provision have already been identified and 
notified.
    (5) Consistent with the SAFETEA-LU Technical Corrections Act, 2008, 
in FY 2009, section 5307(b)(2) allowed: (1) UZAs that grew in 
population from under 200,000 to over 200,000 or that were under 
200,000 but merged into another urbanized area and the population is 
over 200,000, as a result of the 2000 Census to use Section 5307 funds 
for operating assistance in an amount up to 50 percent of the 
grandfathered amount for FY 2002 funds; (2) Areas that were 
nonurbanized under the 1990 Census and became urbanized, as a result of 
the 2000 Census, to use no more than 50 percent of the amount 
apportioned to the area for FY 2003 for operating assistance; and (3) 
nonurbanized areas under the 1990 Census that merged into urbanized 
areas over 200,000, as a result of the 2000 Census, to use 50 percent 
of the amount the area received in FY 2002 Section 5311 funding for 
operating assistance. CR 2011 continued these special rules for the 
period October 1, 2009 through March 4, 2011.
e. Sources of Local Match
    Consistent with Section 5307(e), the Federal share of an urbanized 
area formula grant is 80 percent of net project cost for a capital 
project and 50 percent of net project cost for operating assistance 
unless the recipient indicates a greater local share. The remainder of 
the net project cost (i.e., 20 percent and 50 percent, respectively) 
shall be provided from the following sources:
    (1) From non-Government sources other than revenues from providing 
public transportation services;
    (2) From revenues derived from the sale of advertising and 
concessions;
    (3) From an undistributed cash surplus, a replacement or 
depreciation cash fund or reserve, or new capital;
    (4) From amounts received under a service agreement with a State or 
local social service agency or private social service organization; and
    (5) Proceeds from the issuance of revenue bonds.
    (6) Funds from Section 403(a)(5)(C)(vii) of the Social Security Act 
(42 U.S.C. 603(a)(5)(C)(vii)) can be used to match Urbanized Area 
Formula funds.
f. Designated Transportation Management Areas (TMA)
    Guidance for setting the boundaries of TMAs is in the joint 
transportation planning regulations codified at 23 CFR Part 450 as 
referenced in 49 CFR Part 613. In some cases, the TMA planning 
boundaries established by the MPO for the designated TMA includes one 
or more small UZAs. In addition, one small UZA (Santa Barbara, CA) has 
been designated as a TMA. In either of these situations, the Governor 
cannot allocate ``Governor's Apportionment'' funds attributed to the 
small UZAs to other areas; that is, the Governor only has discretion to 
allocate Governor's Apportionment funds attributable to areas that are 
outside of designated TMA planning boundaries.
    The list of small UZAs included within the planning boundaries of 
designated TMAs is provided in the table below:

------------------------------------------------------------------------
                                    Small urbanized area included in TMA
          Designated TMA                      planning boundary
------------------------------------------------------------------------
Albany, NY........................  Saratoga Springs, NY.
Houston, TX.......................  Galveston, TX; Lake Jackson-
                                     Angleton, TX; Texas City, TX; The
                                     Woodlands, TX.
Jacksonville, FL..................  St. Augustine, FL.
Orlando, FL.......................  Kissimmee, FL.
Palm Bay-Melbourne, FL............  Titusville, FL.
Philadelphia, PA-NJ-DE-MD.........  Pottstown, PA.
Pittsburg, PA.....................  Monessen, PA; Weirton, WV-
                                     Steubenville, OH-PA (PA portion);
                                     Uniontown-Connellsville, PA.
Seattle, WA.......................  Bremerton, WA.
Washington, DC-VA-MD..............  Frederick, MD.
------------------------------------------------------------------------

    The MPO must notify the Associate Administrator for Program 
Management, Federal Transit Administration, 1200 New Jersey Avenue, 
SE., Washington, DC 20590, in writing, no later than July 1 of each 
year of the identity of any small UZA within the planning boundaries of 
a TMA.
g. Urbanized Area Formula Funds Used for Highway Purposes
    Funds apportioned to a TMA are eligible for transfer to FHWA for 
highway projects, if the Designated Recipient has allocated a portion 
of the

[[Page 6964]]

area's Section 5307 funding for such use. However, before funds can be 
transferred, the following conditions must be met: (1) Approval by the 
MPO in writing, after appropriate notice and opportunity for comment 
and appeal are provided to affected transit providers; (2) a 
determination of the Secretary that funds are not needed for 
investments required by the Americans with Disabilities Act of 1990 
(ADA); and (3) the MPO determines that local transit needs are being 
addressed.
    The MPO should notify the appropriate FTA Regional Administrator of 
its intent to use FTA funds for highway purposes. Urbanized Area 
Formula funds that are designated by the MPO for highway projects and 
meet the conditions cited in the previous paragraph will be transferred 
to and administered by FHWA.
4. Period of Availability
    The Urbanized Area Formula Program funds apportioned in this notice 
are available for obligation during the year of appropriation plus 
three additional years. Accordingly, these funds must be obligated in 
grants by September 30, 2014. Any apportioned funds that remain 
unobligated at the close of business on September 30, 2014, will revert 
to FTA for reapportionment under the Urbanized Area Formula Program.
5. Other Program or Apportionment Related Information and Highlights
    In each UZA with a population of 200,000 or more, the Governor, in 
consultation with responsible local officials and publicly owned 
operators of public transportation, has designated one or more entities 
to be the Designated Recipient for Section 5307 funds apportioned to 
the UZA. The same entity(s) may or may not be the Designated Recipient 
for the Job Access and Reverse Commute (JARC) and New Freedom program 
funds apportioned to the UZA. In UZAs under 200,000 in population, the 
State is the Designated Recipient for Section 5307 as well as JARC and 
New Freedom programs. The Designated Recipient for Section 5307 may 
authorize other entities to apply directly to FTA for Section 5307 
grants pursuant to a supplemental agreement. While the requirement that 
projects selected for funding be included in a locally developed 
coordinated public transit/human service transportation plan is not 
included in Section 5307 as it is in Sections 5310, 5316 (JARC) and 
5317 (New Freedom), FTA expects that in their role as public transit 
providers, recipients of Section 5307 funds will be participants in the 
local planning process for these programs.

D. Capital Investment Program (49 U.S.C. 5309)--Fixed Guideway 
Modernization

    This program provides capital assistance for the maintenance, 
recapitalization, and modernization of existing fixed guideway systems. 
Funds are apportioned by a statutory formula to UZAs with fixed 
guideway systems that have been in operation for at least seven years. 
A ``fixed guideway'' refers to any transit service that uses exclusive 
or controlled rights-of-way or rails, entirely or in part. The term 
includes heavy rail, commuter rail, light rail, monorail, trolleybus, 
aerial tramway, inclined plane, cable car, automated guideway transit, 
ferryboats, that portion of motor bus service operated on exclusive or 
controlled rights-of-way, and high-occupancy-vehicle (HOV) lanes. 
Eligible applicants are the public transit authorities in those 
urbanized areas to which the funds are apportioned. For more 
information about Fixed Guideway Modernization contact Kimberly Sledge, 
Office of Transit Programs, at (202) 366-2053.
1. FY 2011 Funding Availability
    CR 2011 provides $706,290,063 to the Fixed Guideway Modernization 
Program. The total amount apportioned for the Fixed Guideway 
Modernization Program is $699,227,162, after the deduction for 
oversight, as shown in the table below.

                  Fixed Guideway Modernization Program
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total Appropriation.....................................    $706,290,063
Oversight Deduction.....................................      -7,062,901
                                                         ---------------
    Total Apportioned...................................     699,227,162
------------------------------------------------------------------------

    The FY 2011 Fixed Guideway Modernization Program apportionments to 
eligible areas are displayed in Table 8.
2. Basis for Formula Apportionment
    The formula for allocating the Fixed Guideway Modernization funds 
includes seven tiers. The apportionment of funding under the first four 
tiers is based on amounts specified in law and NTD data used to 
apportion funds in FY 1997. Funding under the last three tiers is 
apportioned based on the latest available data on route miles and 
revenue vehicle miles on segments at least seven years old, as reported 
to the NTD. Section 5337(f) of title 49, U.S.C. provides for the 
inclusion of Morgantown, West Virginia (population 55,997) as an 
eligible UZA for purposes of apportioning Fixed Guideway Modernization 
funds. Also, consistent to 49 U.S.C. 5336(b), FTA uses 60 percent of 
the directional route miles attributable to the Alaska Railroad 
passenger operations system to calculate the apportionment for the 
Anchorage, Alaska UZA under the Section 5309 Fixed Guideway 
Modernization formula.
    FY 2011 Formula apportionments are based on data grantees provided 
to the NTD for the 2009 report year. Table 9 provides additional 
information and details on the formula. Dollar unit values for the 
formula factors used in the Fixed Guideway Modernization Program are 
displayed in Table 5. To replicate an area's apportionment, multiply 
the dollar unit value by the appropriate formula factor, i.e., route 
miles and revenue vehicle miles.
3. Program Requirements
    Fixed Guideway Modernization funds must be used for capital 
projects to maintain, modernize, or improve fixed guideway systems. 
Eligible UZAs (those with a population of 200,000 or more) with fixed 
guideway systems that are at least seven years old are entitled to 
receive Fixed Guideway Modernization funds. A threshold level of more 
than one mile of fixed guideway is required in order to receive Fixed 
Guideway Modernization funds. Therefore, UZAs reporting one mile or 
less of fixed guideway mileage to the NTD are not included. However, 
funds apportioned to an urbanized area may be used on any fixed 
guideway segment in the UZA. Program guidance for Fixed Guideway 
Modernization is presently found in FTA Circular C9300.1B, Capital 
Facilities and Formula Grant Programs, dated November 1, 2008.
4. Period of Availability
    The funds apportioned in this notice under the Fixed Guideway 
Modernization Program remain available to recipients to be obligated in 
a grant during the year of appropriation plus three additional years. 
FY 2011 Fixed Guideway Modernization funds that remain unobligated at 
the close of business on September 30, 2014, will revert to FTA for 
reapportionment under the Fixed Guideway Modernization Program.

E. Special Needs of Elderly Individuals and Individuals With 
Disabilities Program (49 U.S.C. 5310)

    This program provides formula funding to States for capital 
projects to assist private nonprofit groups in meeting the 
transportation needs of the

[[Page 6965]]

elderly and individuals with disabilities when the public 
transportation service provided in the area is unavailable, 
insufficient, or inappropriate to meet these needs. A State agency 
designated by the Governor administers the Section 5310 program. The 
State's responsibilities include: notifying eligible local entities of 
funding availability; developing project selection criteria; 
determining applicant eligibility; selecting projects for funding; and 
ensuring that all subrecipients comply with Federal requirements. 
Eligible nonprofit organizations or public bodies must apply directly 
to the designated State agency for assistance under this program. For 
more information about the Elderly and Individuals with Disabilities 
Program contact Gil Williams, Office of Transit Programs, at (202) 366-
2053.
1. FY 2011 Funding Availability
    CR 2011 provides $56,579,492 to the Elderly and Individuals with 
Disabilities Program (49 U.S.C. 5310). After deduction of 0.5 percent 
for oversight, and the addition of reapportioned prior year funds, 
$56,296,595 remains available for allocation to the States.

            Elderly and Individuals With Disabilities Program
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total Appropriation...................................       $56,579,492
Oversight Deduction...................................          -282,897
                                                       -----------------
    Total Apportioned.................................        56,296,595
------------------------------------------------------------------------

    The FY 2011 Elderly and Individuals with Disabilities Program 
apportionments to the States are displayed in Table 12.
2. Basis for Apportionment
    FTA allocates funds to States by an administrative formula 
consisting of a $125,000 floor for each State ($50,000 for smaller 
territories) with the balance allocated based on 2000 Census population 
data for persons aged 65 and over and for persons with disabilities.
3. Requirements
    Funds are available to support the capital costs of transportation 
services for older adults and people with disabilities. Uniquely under 
this program, eligible capital costs include the acquisition of 
service. Seven specified States (Alaska, Louisiana, Minnesota, North 
Carolina, Oregon, South Carolina, and Wisconsin) may use up to 33 
percent of their apportionment for operating assistance under the terms 
of the SAFETEA-LU Section 3012(b) pilot program.
    Capital assistance is provided on an 80 percent Federal, 20 percent 
local matching basis except that Section 5310(c) allows States eligible 
for a higher match under the sliding scale for FHWA programs to use 
that match ratio for Section 5310 capital projects. Operating 
assistance is 50 percent Federal, 50 percent local. Funds provided 
under other Federal programs (other than those of the U.S. DOT, with 
the exception of the Federal Lands Highway Program established by 23 
U.S.C. 204) may be used as match. Revenue from service contracts may 
also be used as local match.
    While the assistance is intended primarily for private non-profit 
organizations, public bodies approved by the State to coordinate 
services for the elderly and individuals with disabilities, or any 
public body that certifies to the State that there are no non-profit 
organizations in the area that are readily available to carry out the 
service, may receive these funds.
    States may use up to ten percent of their annual apportionment to 
administer, plan, and provide technical assistance for a funded 
project. No local share is required for these program administrative 
funds. Funds used under this program for planning must be shown in the 
United Planning Work Program (UPWP) for MPO(s) with responsibility for 
that area.
    The State recipient must certify that: the projects selected were 
derived from a locally developed, coordinated public transit-human 
services transportation plan; and, the plan was developed through a 
process that included representatives of public, private, and nonprofit 
transportation and human services providers and participation by the 
public. The locally developed, coordinated public transit-human 
services transportation planning process must be coordinated and 
consistent with the metropolitan and statewide planning processes and 
funding for the program must be included in the metropolitan and 
statewide Transportation Improvement Program (TIP and STIP) at a level 
of specificity or aggregation consistent with State and local policies 
and procedures. Finally, the State must certify that allocations to 
subrecipients are made on a fair and equitable basis.
    The coordinated planning requirement is a requirement in two 
additional programs. Projects selected for funding under the Job Access 
Reverse Commute program and the New Freedom program also are required 
to be derived from a locally developed coordinated public transit/human 
service transportation plan. FTA anticipates that most areas will 
develop one consolidated plan for all the programs, which may include 
separate elements and other human service transportation programs.
    The Section 5310 program is subject to the requirements of Section 
5307 formula program to the extent the Secretary determines 
appropriate. Program guidance is found in FTA Circular 9070.1F, dated 
May 1, 2007. The circular is posted on the FTA Web site at http://www.fta.dot.gov.
4. Period of Availability
    FTA has administratively established a three-year period of 
availability for Section 5310 funds. Funds allocated to States under 
the Elderly and Individuals with Disabilities Program in this notice 
must be obligated by September 30, 2013. Any funding that remains 
unobligated as of that date will revert to FTA for reapportionment 
among the States under the Elderly and Individuals with Disabilities 
Program.
5. Other Program or Apportionment Related Information and Highlights
    States may transfer Section 5310 funds to Section 5307 or Section 
5311, but only for projects selected under the Section 5310 program, 
not as a general supplement for those programs. FTA anticipates that 
the States would use this flexibility primarily for projects to be 
implemented by a Section 5307 recipient in a small urbanized area, or 
for Federally recognized Indian Tribes that elect to receive funds as a 
direct recipient from FTA under Section 5311. A State that transfers 
Section 5310 funds to Section 5307 must certify that each project for 
which the funds are transferred has been coordinated with private 
nonprofit providers of services. FTA has established a scope code (641) 
in the TEAM grant system to track Section 5310 projects included within 
a Section 5307 or 5311 grant. Transfer to Section 5307 or 5311 is 
permitted, but not required. FTA expects primarily to award stand-alone 
Section 5310 grants to the State for any and all subrecipients.
6. Performance Measure
    To support the evaluation of the program, FTA has established 
performance measures for the Section 5310 program, which should be 
submitted with the State's annual program of projects status report on 
October 31, 2011. States should submit performance measures on behalf 
of their subrecipients. Information on the Section 5310 performance 
measures can be found at http://www.fta.dot.gov/laws/circulars/leg_reg_6622.html.

[[Page 6966]]

F. Nonurbanized Area Formula Program (49 U.S.C. 5311)

    This program provides formula funding to States and Indian Tribes 
for the purpose of supporting public transportation in areas with a 
population of less than 50,000. Funding may be used for capital, 
operating, State administration, and project administration expenses. 
Eligible subrecipients include State and local governmental authority, 
Indian Tribes, private non-profit organizations, and private operators 
of public transportation services, including intercity bus companies. 
Indian Tribes are also eligible direct recipients under Section 5311, 
both for funds apportioned to the States and for projects selected to 
be funded with funds set aside for a separate Tribal Transit Program.
    For more information about the Nonurbanized Area Formula Program 
contact Lorna Wilson, Office of Transit Programs, at (202) 366-2053.
1. FY 2011 Funding Availability
    CR 2011 provides $197,074,635 to the Nonurbanized Area Formula 
Program (49 U.S.C. 5311). The total amount apportioned for the 
Nonurbanized Area Formula Program is $216,863,673 after take-downs of 
two percent for the Rural Transportation Assistance Program (RTAP), 0.5 
percent for oversight, and $6,357,246 for the Tribal Transit Program, 
and the addition of Section 5340 funding for Growing States, as shown 
in the table below:

                    Nonurbanized Area Formula Program
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total appropriation.....................................    $197,074,635
------------------------------------------------------------------------
Oversight deduction.....................................        -985,373
Tribal takedown.........................................      -6,357,246
RTAP takedown...........................................      -3,941,493
Section 5340 funds added................................      31,073,150
                                                         ---------------
    Total apportioned...................................     216,863,673
------------------------------------------------------------------------

    The FY 2011 Nonurbanized Area Formula apportionments to the States 
are displayed in Table 13.
2. Basis for Apportionments
    FTA apportions the funds after take-down for oversight, the Tribal 
Transit Program, and RTAP according to a statutory formula. FTA 
apportions the first twenty percent to the States based on land area in 
nonurbanized areas with no state receiving more than 5 percent of the 
amount apportioned. FTA apportions the remaining eighty percent based 
on nonurbanized population of each State relative to the national 
nonurbanized population. FTA does not apportion Section 5311 funds to 
the Virgin Islands, which by a statutory exception are treated as an 
urbanized area for purposes of the Section 5307 formula program.
    FTA is allocating $31,073,150 to the States and territories for 
nonurbanized areas from the Growing States portion of Section 5340. FTA 
apportions Growing States funds by a formula based on State population 
forecasts for 15 years beyond the most recent census. FTA distributes 
the amounts apportioned for each State between UZAs and nonurbanized 
areas based on the ratio of urbanized/nonurbanized population within 
each State in the 2000 census.
3. Program Requirements
    The Nonurbanized Area Formula Program provides capital, operating 
and administrative assistance for public transit service in 
nonurbanized areas under 50,000 in population.
    The Federal share for capital assistance is 80 percent and for 
operating assistance is 50 percent, except that States eligible for the 
sliding scale match under FHWA programs may use that match ratio for 
Section 5311 capital projects and 62.5 percent of the sliding scale 
capital match ratio for operating projects.
    Each State must spend no less than 15 percent of its FY 2011 
Nonurbanized Area Formula apportionment for the development and support 
of intercity bus transportation, unless the State certifies, after 
consultation with affected intercity bus service providers, that the 
intercity bus service needs of the State are being adequately met. FTA 
also encourages consultation with other stakeholders, such as 
communities affected by loss of intercity service.
    Each State prepares an annual program of projects, which must 
provide for fair and equitable distribution of funds within the States, 
including Indian reservations, and must provide for maximum feasible 
coordination with transportation services assisted by other Federal 
sources.
    To retain eligibility for funding, recipients of Section 5311 
funding must report data annually to the NTD. Additional information on 
NTD reporting is contained in paragraph 5 of this section, below.
    Program guidance for the Nonurbanized Area Formula Program is found 
in FTA Circular 9040.1F, ``Nonurbanized Area Formula Program Guidance 
and Grant Application Instructions,'' dated April 1, 2007. The circular 
is posted at http://www.fta.dot.gov.
4. Period of Availability
    It was administratively determined that funds apportioned to 
nonurbanized areas under the Nonurbanized Area Formula Program during 
FY 2011 will remain available for obligation for two additional fiscal 
years after the year of apportionment. Any funds that remain 
unobligated at the close of business on September 30, 2013, will revert 
to FTA for reapportionment among the States under the Nonurbanized Area 
Formula Program.
5. Other Program or Apportionment Related Information and Highlights
    a. NTD Reporting. By law, FTA requires that each recipient under 
the Section 5311 program submit an annual report to the NTD containing 
information on capital investments, operations, and service provided 
with funds received under the Section 5311 program. Section 5311(b)(4), 
as amended by SAFETEA-LU, specifies that the report shall include 
information on total annual revenue, sources of revenue, total annual 
operating costs, total annual capital costs, fleet size and type, and 
related facilities, revenue vehicle miles, and ridership. State or 
Territorial DOT 5311 grant recipients must complete a one-page form of 
basic data for each 5311 subrecipient, unless the subrecipient is 
already providing a full report to the NTD as a Tribal Transit direct 
recipient or as an urbanized area reporter (without receiving a Nine or 
Fewer Vehicles Waiver). For the 2010 Report Year, State or Territorial 
DOTs must report on behalf of any subrecipient receiving Section 5311 
grants in 2010, or that continued to benefit in 2010 from capital 
assets purchased using Section 5311 grants. Tribal Transit direct 
recipients must report if they received an obligation or an outlay for 
a Section 5311 grant in 2010, or if they continued to benefit in 2010 
from capital assets using Section 5311 Grants, unless the Tribe is 
already filing a full NTD Report as an urbanized area reporter or 
unless the Tribe only received $50,000 or less in planning grants. The 
NTD Rural Reporting Manual contains detailed reporting instructions and 
is posted on the NTD Web site, http://www.ntdprogram.gov.
    b. Extension of Intercity Bus Pilot of In-Kind Match. Beginning in 
FY 2007, FTA implemented a two year pilot program of in-kind match for 
intercity bus service. The initial program was set to expire after FY 
2008; however, FTA decided to extend the program through FY 2010. 
Through this notice FTA extends the In-Kind Match program through FY 
2011. FTA published

[[Page 6967]]

guidance on the in-kind match pilot in the Federal Register on February 
28, 2007, as Appendix 1 of the Notice announcing the final revised 
circular 9040.1F, which is available at http://www.fta.dot.gov.

G. Rural Transportation Assistance Program (49 U.S.C. 5311(b)(3))

    This program provides funding to assist in the design and 
implementation of training and technical assistance projects, research, 
and other support services tailored to meet the needs of transit 
operators in nonurbanized areas. For more information about Rural 
Transportation Assistance Program (RTAP) contact Lorna Wilson, Office 
of Transit Programs, at (202) 366-2053.
1. FY 2011 Funding Availability
    CR 2011 provides $3,941,493 to RTAP (49 U.S.C. 5311(b)(2)), as a 
two percent takedown from the funds appropriated for Section 5311. FTA 
has reserved 15 percent for the National RTAP program. A total of 
$3,350,269 is available for allocation to the States, as shown in the 
table below.

                    Rural Transit Assistance Program
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total Appropriation.....................................      $3,941,493
National RTAP Takedown..................................        -591,224
                                                         ---------------
    Total Apportioned...................................       3,350,269
------------------------------------------------------------------------

    Table 13 shows the FY 2011 RTAP allocations to the States.
2. Basis for Allocation
    FTA allocates funds to the States by an administrative formula. 
First FTA allocates $65,000 to each State ($10,000 to territories), and 
then allocates the balance based on nonurbanized population in the 2000 
census.
3. Program Requirements
    States may use the funds to undertake research, training, technical 
assistance, and other support services to meet the needs of transit 
operators in nonurbanized areas. These funds are to be used in 
conjunction with a State's administration of the Nonurbanized Area 
Formula Program, but also may support the rural components of the 
Section 5310, JARC, and New Freedom programs.
4. Period of Availability
    FTA administratively established that funds apportioned to States 
under RTAP remain available for obligation two fiscal years following 
FY 2011. Any funds that remain unobligated at the close of business on 
September 30, 2013, will revert to FTA for allocation among the States 
under the RTAP.
5. Other Program or Apportionment Related Information and Highlights
    The National RTAP project is administered by cooperative agreement 
and re-competed at five-year intervals. In FY 2008, FTA awarded the 
cooperative agreement to the Neponset Valley Transportation Management 
Association (NVTMA) located in Waltham, Massachusetts through a 
competitive process. The National RTAP projects are guided by a project 
review board that consists of managers of rural transit systems and 
State DOT RTAP programs. National RTAP resources also support the 
biennial TRB National Conference on Rural Public and Intercity Bus 
Transportation and other research and technical assistance projects of 
a national scope.

H. Job Access and Reverse Commute Program (49 U.S.C. 5316)

    The Job Access and Reverse Commute (JARC) program provides formula 
funding to States and Designated Recipients to support the development 
and maintenance of job access projects designed to transport welfare 
recipients and low-income individuals to and from jobs and activities 
related to their employment, and for reverse commute projects designed 
to transport residents of UZAs and other than urbanized areas to 
suburban employment opportunities. For more information about the JARC 
program contact Gil Williams, Office of Transit Programs, at (202) 366-
2053.
1. Funding Availability in FY 2011
    CR 2011 provides $69,717,801 for the JARC Program. The total amount 
apportioned by formula is shown in the table below.

                 Job Access and Reverse Commute Program
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total apportioned.......................................     $69,717,801
------------------------------------------------------------------------

    Table 15 shows the FY 2011 JARC apportionments.
2. Basis for Formula Apportionment
    By law, FTA allocates 60 percent of funds available to UZAs with 
populations of 200,000 or more persons (large UZAs); 20 percent to the 
States for urbanized areas with populations ranging from 50,000 to 
199,999 persons (small UZAs), and 20 percent to the States for rural 
and small urban areas with populations of less than 50,000 persons. FTA 
apportions funds based upon the number of low income individuals 
residing in a State or large urbanized area, using data from the 2000 
Census for individuals with incomes below 150 percent of the poverty 
level. FTA publishes apportionments to each State for small UZAs and 
for rural and small urban areas and a single apportionment for each 
large UZA.
    The Designated Recipient, either for the State or for a large UZA, 
is responsible for further allocating the funds to specific projects 
and subrecipients through a competitive selection process. If the 
Governor has designated more than one recipient of JARC funds in a 
large UZA, the Designated Recipients may agree to conduct a single 
competitive selection process or sub-allocate funds to each Designated 
Recipient, based upon a percentage split agreed upon locally, and 
conduct separate competitions.
    States may transfer funds between the small UZA and the 
nonurbanized apportionments, if all of the objectives of JARC are met 
in the size area the funds are taken from. States may also use funds 
apportioned to the small UZA and nonurbanized area apportionments for 
projects anywhere in the State (including large UZAs) if the State has 
established a statewide program for meeting the objectives of JARC. A 
State that is planning to transfer funds under either of these 
provisions should submit a request to the FTA regional office. FTA will 
assign new accounting codes to the funds before obligating them in a 
grant.
3. Requirements
    States and Designated Recipients must solicit grant applications 
and select projects competitively, based on application procedures and 
requirements established by the Designated Recipient, consistent with 
the Federal JARC program objectives. In the case of large UZAs, the 
area-wide solicitation shall be conducted in cooperation with the 
appropriate MPO(s).
    Funds are available to support the planning, capital, and operating 
costs of transportation services that are eligible for funding under 
the program. Assistance may be provided for a variety of transportation 
services and strategies directed at assisting welfare recipients and 
eligible low-income individuals to address unmet transportation needs, 
and to provide reverse commute services. The transportation services 
may be provided by public, non-profit, or private-for-profit operators. 
The Federal share is 80 percent of capital and planning expenses and 50 
percent of operating expenses. Funds provided under other Federal 
programs (other

[[Page 6968]]

than those of the DOT, with the exception of the Federal Lands Highway 
Program established by 23 U.S.C. 204) may be used for local/State match 
for funds provided under Section 5316, and revenue from service 
contracts may be used as local match.
    States and Designated Recipients may use up to ten percent of their 
annual apportionment for administration, planning, and to provide 
technical assistance. No local share is required for these program 
administrative funds. Funds used under this program for planning in 
urbanized areas must be shown in the UPWP for MPO(s) with 
responsibility for that area.
    The Designated Recipient must certify that: the projects selected 
were derived from a locally developed, coordinated public transit-human 
services transportation plan; and, the plan was developed through a 
process that included representatives of public, private, and nonprofit 
transportation and human services providers and participation by the 
public, including those representing the needs of welfare recipients 
and eligible low-income individuals. The locally developed, coordinated 
public transit-human services transportation planning process must be 
coordinated and consistent with the metropolitan and statewide planning 
processes and funding for the program must be included in the 
metropolitan and statewide Transportation Improvement Program (TIP and 
STIP) at a level of specificity or aggregation consistent with State 
and local policies and procedures. Finally, the State must certify that 
allocations of the grant to subrecipients are made on a fair and 
equitable basis.
    The coordinated planning requirement is also a requirement in two 
additional programs. Projects selected for funding under the Elderly 
and Individuals with Disabilities Program (Section 5310) and the New 
Freedom program (Section 5317) also are required to be derived from a 
locally developed coordinated public transit-human service 
transportation plan. FTA anticipates that most areas will develop one 
consolidated plan for all the programs, which may include separate 
elements and other human service transportation programs. The goal of 
the coordinated planning process is not to be an exhaustive document, 
but to serve as a tool for planning and implementing beneficial 
projects. The level of effort required to develop the plan will vary 
among communities based on factors such as the availability of 
resources. FTA does not approve coordinated plans.
    The JARC program is subject to the relevant requirements of Section 
5307, including the requirement for certification of labor protections. 
JARC program requirements are published in FTA Circular 9050.1, dated 
April 1, 2007. The circular and other guidance including frequently 
asked questions are posted on the FTA Web site at http://www.fta.dot.gov.
4. Period of Availability
    FTA has established a consistent three-year period of availability 
for JARC, New Freedom, and the Section 5310 program, which includes the 
year of apportionment plus two additional years. FY 2011 funding is 
available for obligation through FY 2013. Any funding that remains 
unobligated on September 30, 2013 will revert to FTA for 
reapportionment among the States and large UZAs under the JARC program.
5. Other Program or Apportionment Related Information and Highlights
    a. Carryover Earmarks. In the FTA 2010 Apportionments, Allocations 
and Program Information notice, which was published on February 16, 
2010, FTA notified recipients of 2002-2005 earmarks that any remaining 
JARC discretionary funds should be obligated in a grant before 
September 30, 2010. At this time, JARC discretionary funds are no 
longer available for obligation.
    b. Designated Recipient. FTA must have received formal notification 
from the Governor or Governor's designee of the Designated Recipient 
for JARC funds apportioned to a State or large UZA before awarding a 
grant to that area for JARC projects.
    c. Transfers to Section 5307 or Section 5311. States may transfer 
JARC funds to Section 5307 or Section 5311, but only for projects 
competitively selected under the JARC program, not as a general 
supplement for those programs. FTA anticipates that the States would 
use this flexibility primarily for projects to be implemented by a 
Section 5307 recipient in a small urbanized area or for Federally 
recognized Indian Tribes that elect to receive funds as a direct 
recipient from FTA under Section 5311. FTA has established a scope code 
(646) to track JARC projects included within a Section 5307 or 5311 
grant. All activities within a Section 5307 or Section 5311 grant 
application that are funded with JARC resources should be listed under 
the 646-00 scope code. Transfer to Section 5307 or 5311 is permitted 
but not required. FTA also will award stand-alone JARC grants to the 
State for any and all subrecipients. To track disbursements accurately 
against the appropriate program, FTA will not combine JARC funds with 
Section 5307 funds in a single Section 5307 grant, nor will FTA combine 
JARC with New Freedom funds in a single Section 5307 grant.

I. New Freedom Program (49 U.S.C. 5317)

    SAFETEA-LU established the New Freedom Program under 49 U.S.C. 
5317. The program purpose is to provide new public transportation 
services and public transportation alternatives beyond those currently 
required by the Americans with Disabilities Act of 1990 (42 U.S.C. 
12101 et seq.) that assist individuals with disabilities with 
transportation, including transportation to and from jobs and 
employment support services. For more information about the New Freedom 
program contact Gil Williams, Office of Transit Programs, at (202) 366-
2053.
1. Funding Availability in FY 2011
    CR 2011 provides $39,203,019 for the New Freedom Program. The 
entire amount is apportioned by formula, as shown in the table below:

                           New Freedom Program
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total Apportioned.......................................     $39,203,019
------------------------------------------------------------------------

    Table 16 shows the FY 2011 New Freedom apportionments.
2. Basis for Formula Apportionment
    By law, FTA allocates 60 percent of funds available to UZAs with 
populations of 200,000 or more persons (large UZAs); 20 percent to the 
States for urbanized areas with populations ranging from 50,000 to 
199,999 persons (small UZAs), and 20 percent to the States for rural 
and small urban areas with populations of less than 50,000 persons. FTA 
apportions funds based upon the number of persons with disabilities 
over the age of five residing in a State or large urbanized area, using 
data from the 2000 Census. FTA publishes apportionments to each State 
for small UZAs and for rural and small urban areas and a single 
apportionment for each large UZA.
    The Designated Recipient, either for the State or for a large UZA, 
is responsible for further allocating the funds to specific projects 
and subrecipients through a competitive selection process. If the 
Governor has designated more than one recipient of New Freedom funds in 
a large UZA, the Designated Recipients may agree to conduct a single 
competitive selection process or sub-allocate funds to each Designated 
Recipient, based upon a

[[Page 6969]]

percentage split agreed on locally and conduct separate competitions.
3. Requirements
    States and Designated Recipients must solicit grant applications 
and select projects competitively, based on application procedures and 
requirements established by the Designated Recipient, consistent with 
the Federal New Freedom program objectives. In the case of large UZAs, 
the area-wide solicitation shall be conducted in cooperation with the 
appropriate MPO(s).
    Funds are available to support the capital and operating costs of 
new public transportation services and public transportation 
alternatives that are beyond those required by the Americans with 
Disabilities Act (ADA). Funds provided under other Federal programs 
(other than those of the DOT, with the exception of the Federal Lands 
Highway Program established by 23 U.S.C. 204) may be used as match for 
capital funds provided under Section 5317, and revenue from contract 
services may be used as local match.
    Funding is available for transportation services provided by 
public, non-profit, or private-for-profit operators. Assistance may be 
provided for a variety of transportation services and strategies 
directed at assisting persons with disabilities to address unmet 
transportation needs. Eligible public transportation services and 
public transportation alternatives funded under the New Freedom program 
must be both new and beyond the ADA. In a notice of policy change 
published on April 29, 2009, (Federal Register Volume 74 Number 81, 
April 29, 2009) FTA expanded the type of projects it considers to be 
``beyond the ADA'' and thus increase the types of projects eligible for 
funding under the New Freedom program. Under interpretation published 
in the Federal Register, new and expanded fixed route and demand 
responsive transit service planned for and designed to meet the needs 
of individuals with disabilities are eligible projects.
    The Federal share is 80 percent of capital expenses and 50 percent 
of operating expenses. Funds provided under other Federal programs 
(other than those of the DOT) may be used for local/state match for 
funds provided under Section 5317, and revenue from service contracts 
may be used as local match.
    States and Designated Recipients may use up to ten percent of their 
annual apportionment to administer, plan, and provide technical 
assistance for a funded project. No local share is required for these 
program administrative funds. Funds used under this program for 
planning must be shown in the UPWP for MPO(s) with responsibility for 
that area.
    The Designated Recipient must certify that: the projects selected 
were derived from a locally developed, coordinated public transit-human 
services transportation plan; and, the plan was developed through a 
process that included representatives of public, private, and nonprofit 
transportation and human services providers and participation by the 
public, including those representing the needs of welfare recipients 
and eligible low-income individuals. The locally developed, coordinated 
public transit-human services transportation planning process must be 
coordinated and consistent with the metropolitan and statewide planning 
processes and funding for the program must included in the metropolitan 
and statewide Transportation Improvement Program (TIP and STIP) at a 
level of specificity or aggregation consistent with State and local 
policies and procedures. Finally, the State must certify that 
allocations of the grant to subrecipients are made on a fair and 
equitable basis.
    The coordinated planning requirement is also a requirement in two 
additional programs. Projects selected for funding under the Section 
5310 program and the JARC program are also required to be derived from 
a locally developed coordinated public transit-human service 
transportation plan. FTA anticipates that most areas will develop one 
consolidated plan for all the programs, which may include separate 
elements and other human service transportation programs.
    The New Freedom program is subject to the relevant requirements of 
Section 5307, but certification of labor protections is not required. 
New Freedom Program requirements are published in FTA Circular 9045.1, 
which was effective May 1, 2007. The circular and other guidance 
including frequently asked questions are posted on the FTA Web site at 
http://www.fta.dot.gov.
4. Period of Availability
    FTA has established a consistent three-year period of availability 
for New Freedom, JARC, and the Section 5310 program funds, which 
includes the year of apportionment plus two additional years. FY 2011 
funding is available for obligation through FY 2013. Any funding that 
remains unobligated on September 30, 2013 will revert to FTA for 
reapportionment among the States and large UZAs to be used for New 
Freedom program purposes.
5. Other Program or Apportionment Related Information and Highlights
    a. Designated Recipient. FTA must have received formal notification 
from the Governor or Governor's designee of the Designated Recipient 
for New Freedom funds apportioned to a State or large UZA before 
awarding a grant to that area for New Freedom projects.
    b. Transfers to Section 5307 or 5311. States may transfer New 
Freedom funds to Section 5307 or Section 5311, but only for projects 
competitively selected under the New Freedom program, not as a general 
supplement for those programs. FTA anticipates that the States would 
use this flexibility for projects to be implemented by a Section 5307 
recipient in a small urbanized area or for Federally recognized Indian 
Tribes that elect to receive funds as a direct recipient from FTA under 
Section 5311. FTA has established a scope code (647) to track New 
Freedom projects included within a Section 5307 or 5311 grant. All 
activities within a Section 5307 or Section 5311 grant application that 
are funded with New Freedom resources should be listed under the 647-00 
scope code. Transfer to Section 5307 or 5311 is permitted but not 
required. FTA also will award stand-alone New Freedom Program grants to 
the State for any and all subrecipients. In order to track 
disbursements accurately against the appropriate program, FTA will not 
combine New Freedom funds with Section 5307 funds in a single Section 
5307 grant, nor will FTA combine New Freedom with JARC funds in a 
single Section 5307 grant.

J. Growing States and High Density States Formula Factors (49 U.S.C. 
5340)

    CR 2011 makes $197,074,635 available for apportionment in 
accordance with the formula factors prescribed for Growing States and 
High Density States set forth in 49 U.S.C. 5340. Fifty percent of this 
amount is apportioned to eligible States and urbanized areas using the 
Growing State formula factors. The other 50 percent is apportioned to 
eligible States and urbanized areas using the High Density States 
formula factors.
    The term ``State'' is defined only to mean the 50 States. For the 
Growing State portion of the program, funds are allocated based on the 
population forecasts for fifteen years after the date of that census. 
Forecasts are based on the trend between the most recent decennial 
census and Census Bureau population estimates for the most current 
year. Census population

[[Page 6970]]

estimates as of July 1, 2009 were used in the FY 2011 apportionments. 
Funds allocated to the States are then sub-allocated to urbanized and 
non-urbanized areas based on forecast population, where available. If 
forecasted population data at the urbanized level is not available, as 
is currently the case, funds are allocated to current urbanized and 
non-urbanized areas on the basis of current population in the 2000 
Census. Funds allocated to urbanized areas are included in their 
Section 5307 apportionment. Funds allocated for non-urbanized areas are 
included in the states' Section 5311 apportionments.

IV. FTA Policy and Procedures for FY 2011 Grants

A. Automatic Pre-Award Authority To Incur Project Costs

1. Caution to New Grantees and Grantees Using Innovative Financing
    While we provide pre-award authority to incur expenses before grant 
award for many projects, we recommend that first-time grant recipients 
NOT utilize this automatic pre-award authority and wait until the grant 
is actually awarded by FTA before incurring costs. As a new grantee, it 
is easy to misunderstand pre-award authority conditions and be unaware 
of all of the applicable FTA requirements that must be met in order to 
be reimbursed for project expenditures incurred in advance of grant 
award. FTA programs have specific statutory requirements that are often 
different from those for other Federal grant programs with which new 
grantees may be familiar. If funds are expended for an ineligible 
project or activity, FTA will be unable to reimburse the project 
sponsor and, in certain cases, the entire project may be rendered 
ineligible for FTA assistance.
    Grantees proposing to use innovative financing techniques or 
capital leasing are required to consult with the applicable FTA 
Regional Office (see Appendix A) before entering into the financial 
agreement--especially where the grantee expects to use Federal funds 
for debt service or capital lease payments. Consulting with FTA before 
entering into the agreement allows FTA to advise the project sponsor of 
any applicable Federal regulations, such as the Capital Leasing 
Regulation, and will minimize the risk of the costs being ineligible 
for reimbursement at a later date.
2. Policy
    FTA provides pre-award authority to incur expenses before grant 
award for certain program areas described below. This pre-award 
authority allows grantees to incur certain project costs before grant 
approval and retain the eligibility of those costs for subsequent 
reimbursement after grant approval. The grantee assumes all risk and is 
responsible for ensuring that all conditions are met to retain 
eligibility. This pre-award spending authority permits a grantee to 
incur costs on an eligible transit capital, operating, planning, or 
administrative project without prejudice to possible future Federal 
participation in the cost of the project. In the Federal Register 
Notice of November 30, 2006, FTA extended pre-award authority for 
capital assistance under all formula programs through FY 2009, the 
duration of SAFETEA-LU. In this notice, FTA extends pre-award authority 
through FY 2012 for capital assistance under all formula programs. FTA 
provides pre-award authority for planning and operating assistance 
under the formula programs without regard to the period of the 
authorization. In addition, we extend pre-award authority for certain 
discretionary programs based on the annual Appropriations Act each 
year. All pre-award authority is subject to conditions and triggers 
stated below:
    a. FTA does not impose additional conditions on pre-award authority 
for operating, planning, or administrative assistance under the formula 
grant programs. Grantees may be reimbursed for expenses incurred before 
grant award so long as funds have been expended in accordance with all 
Federal requirements. In addition to cross-cutting Federal grant 
requirements, program specific requirements must be met. For example, a 
planning project must have been included in a Unified Planning Work 
Program (UPWP); a New Freedom operating assistance project or a JARC 
planning or operating project must have been derived from a coordinated 
public transit-human services transportation plan (coordinated plan) 
and competitively selected by the Designated Recipient before incurring 
expenses; expenditure on State Administration expenses under State 
Administered programs must be consistent with the State Management 
Plan. Designated Recipients for JARC and New Freedom have pre-award 
authority for the ten percent of the apportionment they may use for 
program administration, if the use is consistent with their Program 
Management Plan.
    b. Pre-Award authority for Alternatives Analysis planning projects 
under 49 U.S.C. 5339 is triggered by the publication of the allocation 
in FTA's Federal Register Notice of Apportionments and Allocations 
following the annual Appropriations Act, or announcement of additional 
discretionary allocations. The projects must be included in the UPWP of 
the MPO for that metropolitan area.
    c. Pre-award authority for design and environmental work on a 
capital project is triggered by the authorization of formula funds, or 
the appropriation or allocation of funds for a discretionary project.
    d. Following authorization of formula funds or appropriation and 
publication of discretionary projects, pre-award authority for capital 
project implementation activities, such as property acquisition, 
demolition, construction, and acquisition of vehicles, equipment, or 
construction materials, may be exercised only after FTA concurs that 
all applicable environmental requirements have been satisfied, 
including those for actions classified as normally requiring 
preparation of environmental impact statements, environmental 
assessments, and categorical exclusions found in 23 CFR 771.117(d). 
Other conditions and requirements set forth in paragraph 3, below, must 
also be satisfied. Before exercising pre-award authority, grantees must 
comply with the conditions and Federal requirements outlined in 
paragraph 3 below. Failure to do so will render an otherwise eligible 
project ineligible for FTA financial assistance. Capital projects under 
the Section 5310, JARC, and New Freedom programs must comply with 
specific program requirements, including coordinated planning and 
competitive selection. In addition, before incurring costs, grantees 
are strongly encouraged to consult with the appropriate FTA regional 
office regarding the eligibility of the project for future FTA funds 
and the applicability of the conditions and Federal requirements.
    e. As a general rule, pre-award authority applies to the Section 
5309 Capital Investment Bus and Bus-Related Facilities, the Clean Fuels 
Bus program, high priority project designations, and any other transit 
discretionary projects only AFTER funds have been appropriated or 
allocated to the project. For Section 5309 Capital Investment Bus and 
Bus-Related Facilities, Clean Fuels Program, or other transit capital 
discretionary projects such as those designated in an annual 
Appropriations Act, the date that costs may be incurred is: (1) For 
design and environmental review, the appropriations bill which funds 
the project was enacted or the announcement of the discretionary 
allocation of funds for the project; and (2) for property acquisition, 
demolition,

[[Page 6971]]

construction, and acquisition of vehicles, equipment, or construction 
materials, the date that FTA approves the document (ROD, FONSI, or CE 
determination) that completes the environmental review process required 
by the National Environmental Policy Act (NEPA) and its implementing 
regulations. FTA introduced this new trigger for pre-award authority in 
FY 2006 in recognition of the growing prevalence of new grantees 
unfamiliar with Federal and FTA requirements to ensure FTA's continued 
ability to comply with NEPA and related environmental laws. Because FTA 
does not sign a final NEPA document until MPO and statewide planning 
requirements (including air quality conformity requirements, if 
applicable) have been satisfied, this new trigger for pre-award will 
ensure compliance with both planning and environmental requirements 
before irreversible action by the grantee.
    f. In previous notices, FTA extended pre-award authority to Section 
330 projects referenced in the DOT Appropriation Act, 2002, and the 
Consolidated Appropriations Resolution, 2003 and to those surface 
transportation projects commonly referred to as Section 115 projects 
administered by FTA, for which amounts were provided in the 
Consolidated Appropriations Act, 2004, Section 117 projects in the 2005 
Appropriations Act, and Section 112 of the 2006 Appropriations Act that 
are to be administered by FTA. FTA, in the FY 2008 Apportionment 
Notice, extended pre-award authority to high priority projects in 
SAFETEA-LU, as of the date they were transferred or allotted to FTA for 
administration. The same conditions described for bus projects apply to 
these projects. We strongly encourage any prospective applicant that 
does not have a previous relationship with FTA to review Federal grant 
requirements with the FTA regional office before incurring costs.
    g. Blanket pre-award authority does not apply to Section 5309 
Capital Investment New and Small Starts funds. Specific instances of 
pre-award authority for Capital Investment New and Small Starts 
projects are described in paragraph 4 below. Pre-award authority does 
not apply to Capital Investment Bus and Bus-Related Facilities or Clean 
Fuels projects authorized for funding beyond this fiscal year. Before 
an applicant may incur costs for Capital Investment New and Small 
Starts projects, Bus and Bus-Related Facilities projects, or any other 
projects not yet published in a notice of apportionments and 
allocations, it must first obtain a written Letter of No Prejudice 
(LONP) from FTA. To obtain an LONP, a grantee must submit a written 
request accompanied by adequate information and justification to the 
appropriate FTA regional office, as described below.
    h. Blanket pre-award authority does not apply to Section 5314 
National Research Programs. Before an applicant may incur costs for 
National Research Programs, it must first obtain a written Letter of No 
Prejudice (LONP) from FTA. To obtain an LONP, a grantee must submit a 
written request accompanied by adequate information and justification 
to the appropriate FTA headquarters office. Information about LONP 
procedures may be obtained from the appropriate headquarters office.
3. Conditions
    The conditions under which pre-award authority may be utilized are 
specified below:
    a. Pre-award authority is not a legal or implied commitment that 
the subject project will be approved for FTA assistance or that FTA 
will obligate Federal funds to support the project. Furthermore, it is 
not a legal or implied commitment that all items undertaken by the 
applicant will be eligible for inclusion in the project.
    b. All FTA statutory, procedural, and contractual requirements must 
be met.
    c. No action will be taken by the grantee that prejudices the legal 
and administrative findings that the Federal Transit Administrator must 
make in order to approve a project.
    d. Local funds expended by the grantee pursuant to and after the 
date of the pre-award authority will be eligible for credit toward 
local match or reimbursement if FTA later makes a grant or grant 
amendment for the project. Local funds expended by the grantee before 
the date of the pre-award authority will not be eligible for credit 
toward local match or reimbursement. Furthermore, the expenditure of 
local funds or undertaking of project implementation activities such as 
land acquisition, demolition, or construction before the date of pre-
award authority for those activities (i.e., the completion of the NEPA 
process) would compromise FTA's ability to comply with Federal 
environmental laws and may render the project ineligible for FTA 
funding.
    e. The Federal amount of any future FTA assistance awarded to the 
grantee for the project will be determined on the basis of the overall 
scope of activities and the prevailing statutory provisions with 
respect to the Federal/local match ratio at the time the funds are 
obligated.
    f. For funds to which the pre-award authority applies, the 
authority expires with the lapsing of the fiscal year funds.
    g. When a grant for the project is subsequently awarded, the 
Financial Status Report, in TEAM-Web, must indicate the use of pre-
award authority.
    h. Environmental, Planning, and Other Federal Requirements. All 
Federal grant requirements must be met at the appropriate time for the 
project to remain eligible for Federal funding. The growth of the 
Federal transit program has resulted in a growing number of 
inexperienced grantees who make compliance with Federal planning and 
environmental laws increasingly challenging. FTA has therefore modified 
its approach to pre-award authority to use the completion of the NEPA 
process, which has as a prerequisite the completion of planning and air 
quality requirements, as the trigger for pre-award authority for all 
activities except design and environmental review.
    i. The requirement that a project be included in a locally adopted 
metropolitan transportation plan, the metropolitan transportation 
improvement program and Federally-approved statewide transportation 
improvement program (23 CFR Part 450) must be satisfied before the 
grantee may advance the project beyond planning and preliminary design 
with non-Federal funds under pre-award authority. If the project is 
located within an EPA-designated non-attainment area for air quality, 
the conformity requirements of the Clean Air Act, 40 CFR Part 93, must 
also be met before the project may be advanced into implementation-
related activities under pre-award authority. Compliance with NEPA and 
other environmental laws and executive orders (e.g., protection of 
parklands, wetlands, historic properties, and assurance of tribal 
consultation) must be completed before State or local funds are spent 
on implementation activities, such as site preparation, construction, 
and acquisition, for a project that is expected to be subsequently 
funded with FTA funds. The grantee may not advance the project beyond 
planning and preliminary design/engineering before FTA has determined 
the project to be a categorical exclusion, or has issued a Finding of 
No Significant Impact (FONSI) or an environmental Record of Decision 
(ROD), in accordance with FTA environmental regulations, 23 CFR Part 
771. For planning projects, the project must be included in a locally-
approved Unified Planning Work Program (UPWP) that has been coordinated 
with the State.

[[Page 6972]]

    j. In addition, Federal procurement procedures, as well as the 
whole range of applicable Federal requirements (e.g., Buy America, 
Davis-Bacon Act, Disadvantaged Business Enterprise) must be followed 
for projects in which Federal funding will be sought in the future. 
Failure to follow any such requirements could make the project 
ineligible for Federal funding. In short, this increased administrative 
flexibility requires a grantee to make certain that no Federal 
requirements are circumvented through the use of pre-award authority. 
If a grantee has questions or concerns regarding the environmental 
requirements, or any other Federal requirements that must be met before 
incurring costs, it should contact the appropriate regional office.
4. Pre-Award Authority for New and Small Starts Projects
    a. Preliminary Engineering (PE), Final Design (FD), and Project 
Development (PD). Projects proposed for Section 5309 capital investment 
funds (New and Small Starts) are required to follow a federally defined 
project development process. For New Starts projects, this process 
includes, among other things, FTA approval of the entry of the project 
into PE and FD. For Small Starts projects, this process includes, among 
other things, approval of the entry of the project into PD. In 
accordance with Sections 5309(d) and (e), FTA considers the merits of 
the project, the strength of its financial plan, and its readiness to 
enter the next phase in deciding whether or not to approve entry into 
PE, FD, or PD. For New Starts projects, upon FTA approval to enter PE, 
FTA extends pre-award authority to incur costs for PE activities. Upon 
completion of NEPA, FTA extends pre-award authority to incur costs for 
utility relocation, as well as real property acquisition and vehicle 
purchases, which are further addressed below. Upon FTA approval to 
enter FD, FTA extends pre-award authority to incur costs for FD 
activities, demolition, and non-construction activities such as 
procurement of long-lead time items or items for which market 
conditions play a significant role in the acquisition price. This 
includes, but is not limited to procurement of rails, ties, and other 
specialized equipment, and commodities. Please contact the FTA Regional 
Office for a determination of activities not listed here, but which 
meet the intent described above. For Small Starts projects, upon FTA 
approval to enter PD, FTA extends pre-award authority to incur costs 
for the design and engineering activities necessary to complete the 
NEPA process. Upon completion of NEPA, FTA extends pre-award authority 
to incur costs for utility relocation, as well as real property 
acquisition and vehicle purchases, which are further addressed below. 
Because Small Starts projects are not subject to approval into FD, they 
are not granted pre-award authority for procurement of rails, ties, and 
other specialized equipment; the procurement of commodities; and 
demolition. The pre-award authority for each phase is automatic upon 
FTA's signing of a letter to the project sponsor approving entry into 
that phase.
    b. Real Property Acquisition Activities and Vehicle Purchases. FTA 
extends automatic pre-award authority for the acquisition of real 
property, real property rights and acquisition of vehicles for a New or 
Small Starts project upon completion of the NEPA process for that 
project. The NEPA process is completed when FTA signs an environmental 
Record of Decision (ROD) or Finding of No Significant Impact (FONSI), 
or makes a Categorical Exclusion (CE) determination. With the 
limitations and caveats described below, real estate acquisition and 
vehicle purchases for a New or Small Starts project may commence, at 
the project sponsor's risk, upon completion of the NEPA process.
    For FTA-assisted projects, any acquisition of real property or real 
property rights must be conducted in accordance with the requirements 
of the Uniform Relocation Assistance and Real Property Acquisition 
Policies Act (URA) and its implementing regulations, 49 CFR Part 24. 
This pre-award authority is strictly limited to costs incurred: (i) To 
acquire real property and real property rights in accordance with the 
URA regulation, and (ii) to provide relocation assistance in accordance 
with the URA regulation. This pre-award authority is limited to the 
acquisition of real property and real property rights that are 
explicitly identified in the final environmental impact statement 
(FEIS), environmental assessment (EA), or CE document, as needed for 
the selected alternative that is the subject of the FTA-signed ROD or 
FONSI, or CE determination. This pre-award authority regarding property 
acquisition that is granted at the completion of NEPA does not cover 
site preparation, demolition, or any other activity that is not 
strictly necessary to comply with the URA, with one exception. That 
exception is when a building that has been acquired, has been emptied 
of its occupants, and awaits demolition poses a potential fire-safety 
hazard or other hazard to the community in which it is located, or is 
susceptible to reoccupation by vagrants. Demolition of the building is 
also covered by this pre-award authority upon FTA's written agreement 
that the adverse condition exists.
    Pre-award authority for property acquisition is also provided when 
FTA makes a CE determination for a protective buy or hardship 
acquisition in accordance with 23 CFR 771.117(d)(12), and when FTA 
makes a CE determination for the acquisition of a pre-existing railroad 
right-of-way in accordance with 49 U.S.C. 5324(c). When a tiered 
environmental review in accordance with 23 CFR 771.111(g) is being 
used, pre-award authority is NOT provided upon completion of the first-
tier environmental document except when the Tier-1 ROD or FONSI signed 
by FTA explicitly provides such pre-award authority for a particular 
identified acquisition.
    Project sponsors should use pre-award authority for real property 
acquisition relocation assistance, and vehicle purchases very 
carefully, with a clear understanding that it does not constitute a 
funding commitment by FTA. FTA provides pre-award authority upon 
completion of the NEPA process for real property acquisition and 
relocation assistance to maximize the time available to project 
sponsors to move people out of their homes and places of business, in 
accordance with the requirements of the Uniform Relocation Act, but 
also with maximum sensitivity to the plight of the people so affected. 
FTA provides pre-award authority upon the completion of the NEPA 
process for vehicles purchases in recognition of the long-lead time and 
complexity of this activity as well as its relationship to the 
``critical path'' project schedule. FTA cautions grantees that do not 
currently operate the type of vehicle proposed in the New or Small 
Starts project about exercising this pre-award authority and encourages 
these sponsors to wait until later in the project development process 
when project plans are more fully developed and Federal support for the 
project is more certain. FTA reminds project sponsors that the 
procurement of vehicles must comply with all Federal requirements 
including, but not limited to, competitive procurement practices, the 
Americans with Disabilities Act, and Buy America. FTA encourages 
project sponsors to discuss the procurement of vehicles with FTA in 
regards to Federal requirements before exercising pre-award authority.
    Although FTA provides pre-award authority for property acquisition 
and vehicle purchases upon completion of the NEPA process, FTA will not 
make a grant to reimburse the sponsor for real estate activities 
conducted under pre-

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award authority until the New Starts project has been approved into FD 
or the Small Starts project has received its construction grant. FTA 
will only reimburse the sponsor for vehicle purchases through an 
executed Full Funding Grant Agreement (New Starts) or a Project 
Construction Grant Agreement or single year capital grant (Small 
Starts). This is to ensure that Federal funds are not risked on a 
project whose advancement into construction is still not yet assured.
    c. National Environmental Policy Act (NEPA) Activities. NEPA 
requires that major projects proposed for FTA funding assistance be 
subjected to a public and interagency review of the need for the 
project, its environmental and community impacts, and alternatives to 
avoid and reduce adverse impacts. Projects of more limited scope also 
need a level of environmental review, either to support an FTA finding 
of no significant impact (FONSI) or to demonstrate that the action is 
categorically excluded from the more rigorous level of NEPA review.
    FTA's regulation titled ``Environmental Impact and Related 
Procedures,'' at 23 CFR Part 771 states that the costs incurred by a 
grant applicant for the preparation of environmental documents 
requested by FTA are eligible for FTA financial assistance (23 CFR 
771.105(e)). Accordingly, FTA extends pre-award authority for costs 
incurred to comply with NEPA regulations and to conduct NEPA-related 
activities for a proposed New Starts or Small Starts project, effective 
as of the date of the Federal approval of the relevant STIP or STIP 
amendment that includes the project or any phase of the project. NEPA-
related activities include, but are not limited to, public involvement 
activities, historic preservation reviews, section 4(f) evaluations, 
wetlands evaluations, endangered species consultations, and biological 
assessments. This pre-award authority is strictly limited to costs 
incurred to conduct the NEPA process, and to prepare environmental, 
historic preservation and related documents. It does not cover PE 
activities beyond those necessary for NEPA compliance.
    For many FTA programs, costs incurred by a grant applicant 
exercising pre-award authority in the preparation of environmental 
documents required by FTA are eligible for FTA reimbursement (See also 
23 CFR 771.105(e)). When any transit project (including New Starts and 
Small Starts) is adopted into the STIP or STIP amendment and pre-award 
authority is granted, reimbursement for NEPA activities may be sought 
at any time through Section 5339 (Alternatives Analysis program), 
Section 5307 (Urbanized Area Formula Program), and some flexible 
highway funds. FTA assistance for environmental documents for New 
Starts and Small Starts projects is subject to certain restrictions. 
Under SAFETEA-LU, Section 5309 capital investment funds (New and Small 
Starts) funds cannot be used to reimburse any activity, including a 
NEPA-related activity that occurs before the approval of a New Starts 
project into PE or a Small Starts project into PD. Only when a project 
has PE approval (for New Starts) or PD approval (for Small Starts) may 
it seek reimbursement for NEPA work conducted after the approval 
through Section 5309 New Starts funds. Prior to PE approval, any NEPA 
related work for New Starts or Small Starts can only be reimbursed 
through the use of Section 5339 (Alternatives Analysis Program), 
Section 5307 (Urbanized Area Formula Program) and some flexible highway 
funds. NEPA-related activities include, but are not limited to, public 
involvement activities, historic preservation reviews, section 4(f) 
evaluations, wetlands evaluations, endangered species consultations, 
tribal consultation, and biological assessments. As with any pre-award 
authority, FTA reimbursement for costs incurred is not guaranteed.
    d. Other New and Small Starts Activities Requiring Letter of No 
Prejudice (LONP). Except as discussed in paragraphs a through c above, 
a grant applicant must obtain a written LONP from FTA before incurring 
costs for any activity expected to be funded by New or Small Starts 
funds not yet awarded. To obtain an LONP, an applicant must submit a 
written request accompanied by adequate information and justification 
to the appropriate FTA regional office, as described in B below.

B. Letter of No Prejudice (LONP) Policy

1. Policy
    LONP authority allows an applicant to incur costs on a project 
utilizing non-Federal resources, with the understanding that the costs 
incurred subsequent to the issuance of the LONP may be reimbursable as 
eligible expenses or eligible for credit toward the local match should 
FTA approve the project at a later date. LONPs are applicable to 
projects and project activities not covered by automatic pre-award 
authority. The majority of LONPs will be for Section 5309 New Starts or 
Small Starts projects undertaking activities not covered under 
automatic pre-award authority, an FFGA or a PCGA, or for Section 5309 
Bus and Bus-Related projects authorized but not yet appropriated by 
Congress. LONPs may be issued for formula and discretionary funds 
beyond the life of the current authorization or FTA's extension of 
automatic pre-award authority; however, the LONP is limited to a five-
year period, unless otherwise authorized.
2. Conditions and Federal Requirements
    The conditions for pre-award authority specified in section IV.A.2 
above apply to all LONPs. The Environmental, Planning and Other Federal 
Requirements described in section IV.A.3 also apply to all LONPs. 
Because project implementation activities may not be initiated before 
NEPA completion, FTA will not issue an LONP for such activities until 
the NEPA process has been completed with a ROD, FONSI, or CE.
3. Request for LONP
    Before incurring costs for a project not covered by automatic pre-
award authority, the project sponsor must first submit a written 
request for an LONP, accompanied by adequate information and 
justification, to the appropriate regional office and obtain written 
approval from FTA. FTA approval of an LONP for a New Starts or Small 
Starts project is determined on a case-by-case basis. Federal funding 
for a New or Small Starts project is not implied or guaranteed by an 
LONP. Specifically, when requesting an LONP, the applicant shall 
provide sufficient information to allow FTA to consider the following 
items:
    a. Description of the activities to be covered by the LONP.
    b. Justification for advancing the identified activities. The 
justification should include an accurate assessment of the consequences 
to the project scope, schedule, and budget should the LONP not be 
approved.
    c. Allocated level of risk and contingency for the activity 
requested.
    d. Status of procurement progress, including, if appropriate, 
submittal of bids for the activities covered by the LONP.
    e. Strength of the capital and operating financial plan for the New 
or Small Starts project and the future transit system.
    f. Adequacy of the Project Management Plan.
    g. Resolution of any readiness issues that would affect the 
project, such as land acquisition and technical capacity to carry out 
the project.
    FTA will, following the completion of the requirements under NEPA, 
expedite the issuance of LONPs for New and

[[Page 6974]]

Small Starts projects, when appropriate, by no longer performing a 
detailed review of the cost and scope of the request in every instance. 
Rather, a limited review will be performed in those cases that are of a 
more routine nature, especially those involving an experienced sponsor.

C. FTA FY 2011 Annual List of Certifications and Assurances

    The full text of the FY 2011 Certifications and Assurances was 
published in the Federal Register on November 2, 2010, and is available 
on the FTA Web site and in TEAM-Web. The FY 2011 Certifications and 
Assurances must be used for all grants made in FY 2011, including 
obligation of carryover funds. All grantees with active grants are 
required to have signed the FY 2011 Certifications and Assurances 
within 90 days after publication. Any questions regarding this document 
may be addressed to the appropriate Regional Office or to Nydia Picayo, 
in the FTA Office of Program Management, at (202) 366-1662.

D. FHWA Funds Used for Transit Purposes

    SAFETEA-LU continues provisions in the Intermodal Surface 
Transportation Efficiency Act of 1991 (ISTEA) and TEA-21 that expanded 
modal choice in transportation funding by including substantial 
flexibility to transfer funds between FTA and FHWA formula program 
funding categories. The provisions also allow for transfer of certain 
discretionary program funds for administration of highway projects by 
FHWA and transit projects by FTA. FTA and FHWA execute Flex Funding 
Transfers between the Formula and Bus Grants programs and the Federal 
Aid Highway programs. This also includes the transfer of Metropolitan 
and Statewide planning set-aside funds between FHWA and FTA to be 
combined with metropolitan and statewide planning resources as 
Consolidated Planning Grants (CPG). These transfers are based on a 
State's requests to transfer funding from the Highway and/or Transit 
programs to fund States and local project priorities, and joint 
planning needs. This practice can result in transfers to the Federal 
Transit Program from the Federal Aid Highway Program or vice versa.
    SAFETEA-LU was signed into law on August 10, 2005. With the 
enactment of SAFETEA-LU, beginning in FY 2006, with few exceptions, 
Federal transit programs were funded solely from general funds or trust 
funds. The transit Formula and Bus Grant programs are now funded 
entirely from Mass Transit Account of the Highway Trust Fund. The 
Formula and Bus Grant Programs can also receive flex funding transfers 
from the Federal Aid Highway Program.
    As a result of the changes to program funding mechanisms, there is 
no longer a requirement to transfer budget authority and liquidating 
cash resources simultaneously upon the execution of a flex funding 
transfer request by a State. Since the transfers are between trust fund 
accounts, the only requirement is to transfer contract authority 
(obligation limitation) between the Federal Aid Program trust fund 
account and the Formula and Bus Grant Program account. At the point 
that the obligation resulting from the transfer of budgetary authority 
is expended, a transfer of liquidating cash will be required.
    Beginning in FY 2007, the accounting process was changed for 
transfers of flex funds and other specific programs to allow contract 
authority to be transferred and the liquidating cash to be transferred 
separately. FTA requires that flexed fund transfers to FTA be in 
separate and identifiable grants in order to ensure that the draw-down 
of flexed funds liquidating cash can be tracked, thus securing the 
internal controls for monitoring these resources from the Federal 
Highway Administration to avoid deficiencies in FTA's Formula and Bus 
Grants account.
    FTA monitors the expenditures of flexed funded grants and requests 
the transfer of liquidating cash from FHWA to ensure sufficient funds 
are available to meet expenditures. To facilitate tracking of grantees' 
flex funding expenditures, FTA developed codes to provide distinct 
identification of ``flex funds.''
    The process for transferring flexible funds between FTA and FHWA 
programs is described below. Note that the new transfer process for 
``flex funds'' that began in FY 2007 does not apply to the transfer of 
State planning set-aside funds from FHWA to FTA to be combined with 
metropolitan and statewide planning resources as Consolidated Planning 
Grants (CPG). These transfers are based on States requests to transfer 
funding from the Highway and/or Transit programs to fund States and 
local project priorities, and joint planning needs. Planning funds 
transferred will be allowed to be merged in a single grant with FTA 
planning resources using the same process implemented in FY 2006. For 
information on the process for the transfer of funds between FTA and 
FHWA planning programs refer to section III.A and B. Note also that 
certain prior year appropriations earmarks (Sections 330, 115, 117, and 
112) are allotted annually for administration rather than being 
transferred. For information regarding these procedures, please contact 
Erin McCartney, FTA Budget Office, at (202) 366-5189 or Nancy Grubb, 
FTA Budget Office, at (202) 366-1635; or FHWA Budget Division, at (202) 
366-2845.
1. Transfer From FHWA to FTA
    FHWA funds transferred to FTA are used primarily for transit 
capital projects and eligible operating activities that have been 
designated as part of the metropolitan and statewide planning and 
programming process. The project must be included in an approved STIP 
before the funds can be transferred. By letter, the State DOT requests 
the FHWA Division Office to transfer highway funds for a transit 
project. The letter should specify the project, amount to be 
transferred, apportionment year, State, urbanized area, Federal aid 
apportionment category (i.e., Surface Transportation Program (STP), 
Congestion Mitigation and Air Quality (CMAQ) or identification of the 
earmark and indication of the intended FTA formula program (i.e., 
Section 5307, 5311 or 5310) and should include a description of the 
project as contained in the STIP. Note that FTA may also administer 
certain transfers of statutory earmarks under the Section 5309 bus 
program, for tracking purposes.
    The FHWA Division Office confirms that the apportionment amount is 
available for transfer and concurs in the transfer, by letter to the 
State DOT and FTA. The FHWA Office of Budget and Finance then transfers 
obligation authority. All FHWA CMAQ and STP funds transferred to FTA 
will be transferred to one of the three FTA formula programs (i.e. 
Urbanized Area Formula (Section 5307), Nonurbanized Area Formula 
(Section 5311) or Elderly and Persons with Disabilities (Section 5310). 
High Priority projects in Section 1702 of SAFETEA-LU or Transportation 
Improvement projects in Section 1934 of SAFETEA-LU and other 
Congressional earmarks that are transferred to FTA will be aligned with 
and administered through FTA's discretionary Bus and Bus Related 
Facilities Program (Section 5309). The most recent guidance on 
transfers of FHWA funds as allowed under SAFETEA-LU is FHWA Memorandum, 
dated July 19, 2007, ``Information Fund Transfers to Other Agencies and 
Among Title 23 Programs.''
    The FTA grantee's application for the project must specify which 
program the funds will be used for, and the application must be 
prepared in accordance with the requirements and

[[Page 6975]]

procedures governing that program. Upon review and approval of the 
grantee's application, FTA obligates funds for the project.
    Transferred funds are treated as FTA formula or discretionary 
funds, except for local match purposes as described in c below, but are 
assigned a distinct identifying code for tracking purposes. The funds 
may be transferred for any capital purpose eligible under the FTA 
formula program to which they are transferred and, in the case of CMAQ, 
for certain operating costs. FHWA issued revised interim guidance on 
project eligibility under the CMAQ program in a Notice at 71 FR 76038 
et seq. (December 19, 2006) incorporating changes made by SAFETEA-LU. 
In accordance with 23 U.S.C. 104(k), all FTA requirements except local 
share, which remains the same as required under the FHWA program, are 
applicable to transferred funds except in certain cases when CMAQ funds 
are authorized for operating expenses. Earmarks that are transferred to 
the Section 5309 Bus Program for administration, however, can be used 
for the congressionally designated transit purposes, and in some cases 
where the law provides, are not limited to eligibility under the Bus 
Program.
    Earmarked funds, however, can only be used for the congressionally 
designated purposes.
2. Transfers From FTA to FHWA
    The MPO submits a written request to the FTA regional office for a 
transfer of FTA Section 5307 formula funds (apportioned to a UZA 
200,000 and over in population) to FHWA based on approved use of the 
funds for highway purposes, as determined by the designated recipient 
under Section 5307 and contained in the Governor's approved State 
Transportation Improvement Program. The MPO must certify that: (1) 
Notice and opportunity for comment and appeal has been provided to 
affected transit providers; (2) the funds are not needed for capital 
investments required by the Americans with Disabilities Act, and (3) 
local transit needs are being addressed. The FTA Regional Administrator 
reviews and, if he or she concurs in the request, then forwards the 
approval in written format to FTA Headquarters, where a reduction equal 
to the dollar amount being transferred to FHWA is made to the grantee's 
Urbanized Area Formula Program apportionment.
    Transfers of discretionary earmarks for administration by FHWA are 
handled on a case by case basis, by the FTA regional office, in 
consultation with the FTA Office of Program Management, Office of Chief 
Counsel, and Office of Budget and Policy.
3. Matching Share for FHWA Transfers
    Section 104(k) of title 23 U.S.C., regarding the non-Federal share, 
applies to Title 23 funds used for transit projects. Thus, FHWA funds 
transferred to FTA retain the same matching share that the funds would 
have if used for highway purposes and administered by FHWA.
    There are four instances in which a Federal share higher than 80 
percent would be permitted. First, in States with large areas of Indian 
and certain public domain lands and national forests, parks and 
monuments, the local share for highway projects is determined by a 
sliding scale rate, calculated based on the percentage of public lands 
within that State. This sliding scale, which permits a greater Federal 
share, but not to exceed 95 percent, is applicable to transfers used to 
fund transit projects in these public land States. FHWA develops the 
sliding scale matching ratios for the increased Federal share.
    Second, commuter carpooling and vanpooling projects and transit 
safety projects using FHWA transfers administered by FTA may retain the 
same 100 percent Federal share that would be allowed for ride-sharing 
or safety projects administered by FHWA.
    The third instance is the 100 percent Federally-funded safety 
projects; however, these are subject to a nationwide 10 percent program 
limitation.
    The fourth instance occurs with CMAQ funds. Section 1131 of, The 
Energy Independence and Security Act, 2007 (Pub. L. 11-140) amended 23 
U.S.C. 120 increased the Federal share of CMAQ projects to 100% at the 
State's discretion. FTA will honor this increased match for CMAQ funds 
transferred to FTA for implementation if the state chooses to fund the 
project at a higher Federal share than 80 percent. The Federal share 
for CMAQ projects cannot be lower than 80 percent.

E. Technical Assistance

    FTA headquarters and regional staff will be pleased to answer your 
questions and provide any technical assistance you may need to apply 
for FTA program funds and manage the grants you receive. This notice 
and the program guidance circulars previously identified in this 
document may be accessed via the FTA Web site at http://www.fta.dot.gov.
    In addition, copies of the following circulars and other useful 
information are available on the FTA Web site and may be obtained from 
FTA regional offices; Circular 4220.1F, ``Third Party Contracting 
Guidance,'' and Circular 5010.1D, ``Grant Management Guidelines.'' Both 
circulars were recently revised and can be found at http://www.fta.dot.gov/laws/leg_reg_circulars_guidance.html. The FY 2011 
Annual List of Certifications and Assurances and Master Agreement are 
also posted on the FTA Web site.
    The DOT final rule on ``Participation by Disadvantaged Business 
Enterprises in Department of Transportation Financial Assistance 
Programs,'' which was effective July 16, 2003, can be found at http://www.access.gpo.gov/nara/cfr/waisidx_04/49cfr26_04.html/.

    Issued in Washington, DC, this 1st day of February, 2011.
Peter Rogoff,
Administrator.

Appendix A

                          FTA Regional Offices
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Mary Beth Mello, Regional            Robert C. Patrick, Regional
 Administrator, Region 1--Boston,     Administrator, Region 6--Ft.
 Kendall Square, 55 Broadway, Suite   Worth, 819 Taylor Street, Room
 920, Cambridge, MA 02142-1093,       8A36, Ft. Worth, TX 76102, Tel.
 Tel. 617-494-2055                    817-978-0550
 
States served: Connecticut, Maine,   States served: Arkansas, Louisiana,
 Massachusetts, New Hampshire,        Oklahoma, New Mexico, and Texas
 Rhode Island, and Vermont
------------------------------------------------------------------------
Brigid Hynes-Cherin, Regional        Mokhtee Ahmad, Regional
 Administrator, Region 2--New York,   Administrator, Region 7--Kansas
 One Bowling Green, Room 429, New     City, MO, 901 Locust Street, Room
 York, NY 10004-1415, Tel. 212-668-   404, Kansas City, MO 64106, Tel.
 2170                                 816-329-3920

[[Page 6976]]

 
States served: New Jersey, New York  States served: Iowa, Kansas,
                                      Missouri, and Nebraska
 
New York Metropolitan Office,
 Region 2--New York, One Bowling
 Green, Room 428, New York, NY
 10004-1415, Tel. 212-668-2202
------------------------------------------------------------------------
Letitia Thompson, Regional           Terry Rosapep, Regional
 Administrator, Region 3--            Administrator, Region 8--Denver,
 Philadelphia, 1760 Market Street,    12300 West Dakota Ave., Suite 310,
 Suite 500, Philadelphia, PA 19103-   Lakewood, CO 80228-2583, Tel. 720-
 4124, Tel. 215-656-7100              963-3300
 
States served: Delaware, Maryland,   States served: Colorado, Montana,
 Pennsylvania, Virginia, West         North Dakota, South Dakota, Utah,
 Virginia, and District of Columbia   and Wyoming.
 
Philadelphia Metropolitan Office,    Leslie T. Rogers, Regional
 Region 3--Philadelphia, 1760         Administrator, Region 9--San
 Market Street, Suite 500,            Francisco, 201 Mission Street,
 Philadelphia, PA 19103-4124, Tel.    Room 1650, San Francisco, CA 94105-
 215-656-7070                         1926, Tel. 415-744-3133
 
Washington, DC Metropolitan Office,  States served: American Samoa,
 1990 K Street, NW., Room 510,        Arizona, California, Guam, Hawaii,
 Washington, DC 20006, Tel. 202-219-  Nevada, and the Northern Mariana
 3562                                 Islands
------------------------------------
Yvette Taylor, Regional              Los Angeles Metropolitan Office,
 Administrator, Region 4--Atlanta,    Region 9--Los Angeles, 888 S.
 230 Peachtreet Street, NW., Suite    Figueroa Street, Suite 1850, Los
 800, Atlanta, GA 30303, Tel. 404-    Angeles, CA 90017-1850, Tel. 213-
 865-5600                             202-3952
                                    ------------------------------------
 
States served: Alabama, Florida,     Rick Krochalis, Regional
 Georgia, Kentucky, Mississippi,      Administrator, Region 10--Seattle,
 North Carolina, Puerto Rico, South   Jackson Federal Building, 915
 Carolina, Tennessee, and Virgin      Second Avenue, Suite 3142,
 Islands                              Seattle, WA 98174-1002, Tel. 206-
                                      220-7954
------------------------------------
Marisol Simon, Regional              States served: Alaska, Idaho,
 Administrator, Region 5--Chicago,    Oregon, and Washington
 200 West Adams Street, Suite 320,
 Chicago, IL 60606, Tel. 312-353-
 2789,
 
States served: Illinois, Indiana,
 Michigan, Minnesota, Ohio, and
 Wisconsin
 
Chicago Metropolitan Office, Region
 5-Chicago, 200 West Adams Street,
 Suite 320, Chicago, IL 60606, Tel.
 312-353-2789
------------------------------------------------------------------------

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[FR Doc. 2011-2592 Filed 2-7-11; 8:45 am]
BILLING CODE 4910-57-C