[Federal Register Volume 78, Number 61 (Friday, March 29, 2013)]
[Notices]
[Pages 19357-19362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-07268]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration


Allocation of Public Transportation Emergency Relief Funds in 
Response to Hurricane Sandy

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Notice of allocation of Emergency Relief funds.

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SUMMARY: The Federal Transit Administration (FTA) announces the 
allocation of $2,000,000,000 under the Public Transportation Emergency 
Relief Program (Emergency Relief Program, Catalogue of Federal Domestic 
Assistance 20.527) for FTA recipients affected by Hurricane 
Sandy, which impacted the northeastern seaboard in October 2012 and had 
a particularly devastating impact on transit systems in New York and 
New Jersey. FTA is allocating funds as outlined in a Notice of 
Availability of Emergency Relief Funds published in the Federal 
Register on February 6, 2013 (78 FR 8691), and consistent with the 
requirements of the Disaster Relief Appropriations Act of 2013 
(Appropriations Act, Pub. L. 113-2).
    Concurrently with this notice of allocations, FTA is publishing in 
today's Federal Register an interim final rule (IFR) for the Emergency 
Relief Program (49 CFR Part 602). This rule outlines general program 
requirements that will apply to all funds allocated in this notice and 
to subsequent grant awards under this program. The rule takes effect 
immediately.
    FTA's Emergency Relief Program was authorized by Congress in the 
Moving Ahead for Progress in the 21st Century Act (MAP-21, Pub. L. 112-
141) and provides FTA with primary responsibility for reimbursing 
emergency response and recovery costs after an emergency or major 
disaster that affects public transportation systems. The Appropriations 
Act provides $10.9 billion for FTA's Emergency Relief Program for 
recovery, relief and resiliency efforts for public transportation in 
areas affected by Hurricane Sandy. As a result of the Budget Control 
Act of 2011 (Pub. L. 112-25), five percent of the $10.9 billion made 
available under the Appropriations Act ($545,000,000) is subject to the 
significant spending cuts known as sequestration and is unavailable for 
Hurricane Sandy disaster relief.
    The Appropriations Act requires that not more than $2 billion shall 
be made available no later than March 30, 2013. With this notice, FTA 
is allocating the initial $2 billion, excluding funds to be used for 
program implementation and oversight, to recipients affected by 
Hurricane Sandy (affected recipients) for eligible emergency response 
and recovery costs.
    In the February 6, 2013, Federal Register notice, FTA instructed 
affected recipients to submit requests for reimbursement of eligible 
expenses incurred in advance of January 29, 2013, and for the costs of 
contract work advertised and force account work budgeted prior to 
January 29, 2013. FTA announced individual allocations on a rolling 
basis beginning March 6, 2013. Table 1 shows a summary of the 
allocations made in this notice. Table 2 shows the allocation for each 
affected recipient.
    In addition to funds allocated for the reimbursement of costs 
meeting the above criteria, FTA is allocating the remainder of the 
initial $2 billion, based on the anticipated cost of recovery for each 
affected recipient. These funds are available for eligible emergency 
operations, emergency protective measures, and emergency and permanent 
repairs to and replacement of assets that suffered serious damage as a 
result of the storm. Recipients should develop a list of eligible 
projects, consistent with the Emergency Relief Program rule, at 49 CFR 
Sec.  602.17, and review the list of projects with the applicable FTA 
Regional Office prior to submitting a grant application in FTA's 
Transportation Electronic Award Management (TEAM) system. FTA granted 
affected recipients pre-award authority for projects eligible for the 
initial $2 billion allocation in the February 6, 2013 Federal Register 
notice. Prior to exercising pre-award authority, recipients are 
encouraged to work with the appropriate Regional Office to ensure that 
the applicable Federal requirements are followed. All allocations, 
including these pro-rated allocations, are included in Table 2.
    Guidance regarding project eligibility and determinations regarding 
applicability of certain FTA requirements issued in the February 6, 
2013 notice will only apply to costs incurred prior to January 29, 
2013, and to other expenses that meet the requirements specified in 
that notice for inclusion under Category One, Two or Three. Recipients 
may request waivers of FTA administrative requirements by submitting a 
request to FTA docket number FTA-2013-0001, as described in the 
February 6, 2013 Federal Register notice, and in the Emergency Relief 
Program rule at 49 CFR Sec.  602.15, however, recipients should not 
proceed with a project under the expectation that waivers will be 
provided. Additional program requirements, considerations and grant 
application procedures specific to these funds are included in this 
notice.

FOR FURTHER INFORMATION CONTACT: Contact the appropriate FTA Regional 
Office found at http://www.fta.dot.gov for application-specific 
information and other assistance needed in preparing a TEAM grant 
application. For program-specific questions, please contact Adam 
Schildge, Office of Program Management, 1200 New Jersey Ave. SE., 
Washington, DC 20590, phone: (202) 366-0778, or email, 
[email protected]. For legal questions, contact Bonnie Graves, 
Office of Chief Counsel, same address, phone: (202) 366-4011, or email, 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Considerations for Recipients of Emergency Relief Funds
    A. Allocation of Funds
    B. Use of Funds
    C. Pre-award Authority
    D. Application Process
    E. 24 Month Expenditure Requirement
    F. Waiver of Remaining Useful Life Requirement
    G. Disposition of Assets
    H. Treatment of Insurance Proceeds
    I. Executive Order 11988, Floodplain Management
II. Award Administration
    A. Grant Application
    B. Payment
    C. Special Conditions for Grant Agreements
    D. Reporting Requirements
    E. Oversight and Audits

I. Considerations for Recipients of Emergency Relief Funds

A. Allocation of Funds

    FTA is allocating the first $2 billion to affected recipients in 
two steps. In the first step, FTA prioritized the reimbursement of 
immediate response and recovery expenses related to Hurricane Sandy. 
While the list of eligible activities is the same for all allocations 
under this notice, in order to qualify for reimbursement in this first 
step, costs must have met the requirements of one of the following 
three categories: Category One includes

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costs incurred or disbursed prior to January 29, 2013. Category Two 
includes costs related to requests for proposals or invitations to bid 
that were advertised prior to January 29, 2013. Category Three includes 
the costs of future force account work that was budgeted prior to 
January 29, 2013. FTA has already allocated $576,620,159 for expenses 
under Categories One, Two and Three. The specific grant requirements 
listed in section II.D. in the February 6, 2013, Federal Register 
notice apply to these three categories of projects.
    In the second step, FTA is allocating additional funding for 
pending validated costs requested under Categories One, Two, and Three 
and for additional eligible recovery and rebuilding costs. For this 
second step, which involves a pro-rated allocation, FTA is allocating 
funds based on detailed damage assessments submitted by affected 
agencies and prepared in cooperation with FTA and FEMA staff and firms 
contracted by FTA to provide assistance in compiling and reviewing 
these assessments. FTA, in coordination with FEMA, performed 
preliminary assessments of the damage caused by Sandy to assets owned 
by those transit providers in the states of New York and New Jersey 
most affected by the storm. These transit providers included the 
following major transit agencies:
     The Metropolitan Transportation Authority, doing business 
as:
    [cir] MTA New York City Transit (NYCT)
    [cir] MTA Bus Company (MTA Bus)
    [cir] MTA Metro-North Railroad (MNR)
    [cir] MTA Long Island Railroad (LIRR)
    [cir] MTA Capital Construction Division (MTACC)
     The New York City Department of Transportation (NYCDOT)
     The Port Authority of New York and New Jersey (PANYNJ) 
which operates Port Authority Trans Hudson (PATH) service and the 
rebuilding of the World Trade Center Transportation Hub and site
 New Jersey Transit
    Affected recipients have had the opportunity to review and provide 
comments on these damage assessments. The damage assessments include an 
initial overall cost of recovery and rebuilding for the affected 
agencies, excluding projects to improve the resiliency of the affected 
systems to future disasters, is approximately $5.83 billion. Using 
these initial costs estimates based on these damage assessments, FTA is 
allocating the remaining $1,402,424,841, less pending validation of 
Category One, Two, and Three expenses, on a pro-rated basis to the 
agencies listed above and setting aside two percent of this amount for 
agencies other than these four that suffered damage. From FTA's earlier 
damage assessment efforts, it knows that New York State Department of 
Transportation and many smaller transit agencies such as the City of 
Long Beach and Nassau County Intercounty Express (NICE); and the 
counties of Putnam, Rockland and Westchester suffered serious damage. 
Two percent, or $28,048,497, is available for affected recipients, such 
as these, that may have eligible expenses not yet reimbursed to date. 
Affected recipients should contact their regional office to discuss 
outstanding response and recovery expenses.
    As of the date of publication of the Emergency Relief Program rule, 
FTA is authorized to allocate additional funding beyond the initial $2 
billion allocated in this notice. FTA intends to issue a second Notice 
of Availability of Emergency Relief Funding in the near future for this 
additional Hurricane Sandy disaster relief funding, over and above the 
$2 billion allocated in this notice.

B. Use of Funds

    Consistent with the February 6, 2013, Federal Register notice, 
funds allocated in this notice are available to reimburse eligible 
emergency operations, emergency protective measures, and emergency and 
permanent repairs to and replacement of assets that suffered serious 
damage as a result of the storm.
    FTA has determined that the operating costs of re-establishing 
regular transit service in the immediate aftermath of the storm are 
eligible emergency operating expenses and are eligible under this 
program, subject to the determination by FTA of the appropriate time 
period and extent of operations as warranted by the condition of the 
transit system in the immediate aftermath of the storm.

C. Pre-award Authority

    In the February 6, 2013, Federal Register notice, FTA granted pre-
award authority to affected recipients for expenses incurred in 
preparation for Hurricane Sandy (e.g., evacuation, relocation, 
protecting and safeguarding assets) and for response and recovery 
expenses incurred as a result of Hurricane Sandy. Pre-award authority 
allows affected recipients to incur certain project costs before grant 
approval and retain the eligibility of those costs for subsequent 
reimbursement after grant approval.
    If a recipient intends to use pre-award authority for the funds 
allocated in this notice, FTA recommends the recipient submit a 
proposed program of projects to FTA to verify that all pre-requisite 
requirements have been met, and that the proposed costs are all 
eligible under the Emergency Relief program, in advance of incurring 
any costs. Since this program is new and interim final regulations are 
being published concurrently with this allocation, recipients may not 
be familiar with all applicable statutory and regulatory requirements 
for this program, including those that might be different from other 
FTA grant programs. If funds are expended for an ineligible project or 
activity, or for an eligible activity but at an inappropriate time 
(e.g., prior to environmental review completion), FTA will be unable to 
reimburse the project sponsor and, in certain cases, the entire project 
may be rendered ineligible for FTA assistance.
    Pre-award authority is described in the Emergency Relief Program 
rule at 49 CFR Sec.  602.11. In considering the use of pre-award 
authority, recipients should be aware of the following:
    (i) 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. Furthermore, it is not a legal or implied 
commitment that all activities undertaken by the applicant will be 
eligible for inclusion in the project.
    (ii) Except as provided for Categories One, Two and Three in 
section II.D. of the February 6, 2013, Federal Register notice, all FTA 
statutory, procedural, and contractual requirements must be met.
    (iii) The recipient must take no action that prejudices the legal 
and administrative findings that the FTA Regional Administrator must 
make in order to approve a project.
    (iv) The Federal amount of any future FTA assistance awarded to the 
recipient 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/non-Federal match ratio at the time the 
funds are obligated.
    (v) When FTA subsequently awards a grant for the project, the 
Federal Financial Report in TEAM-Web must indicate the use of pre-award 
authority.

D. Application Process

    Amounts allocated for costs in Categories One, Two and Three are 
based on a recipient's demonstration of expenses incurred for emergency 
operations and capital repair,

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reconstruction and replacement expenses in response to Hurricane Sandy. 
FTA has reviewed each recipient's justification for reimbursement, and 
has validated specific costs as eligible for reimbursement. Recipients 
are permitted to submit grant applications in TEAM upon the 
announcement of an allocation for these expenses. FTA's Regional 
Offices will review these grant applications for consistency with each 
agency's request for reimbursement.
    Amounts allocated for costs outside these three categories are 
based on damage assessments prepared by FTA staff, FEMA staff, and 
contractors. Prior to submitting a grant application or modification 
for new recovery and rebuilding projects, recipients should submit a 
proposed list of projects and expenses to FTA's Regional Office for 
review, consistent with 49 CFR Sec.  602.17. Upon verification by FTA 
that such projects are eligible, recipients may submit grant 
applications in TEAM. This review will ensure that all proposed 
projects and costs are eligible under the Emergency Relief Program.
    Recipients are required to maintain records, including but not 
limited to all invoices, contracts, time sheets, and other evidence of 
expenses to assist FTA in periodically validating the eligibility and 
completeness of a recipient's reimbursement requests.

E. 24 Month Expenditure Requirement

    Projects funded through the Disaster Relief Appropriations Act of 
2013 are subject to section 904(c) of that Act, which requires 
expenditure of funds within 24 months of grant obligation, unless this 
requirement is subsequently waived for this program in accordance with 
guidance to be issued by the Office of Management and Budget. In all 
cases, oversight procedures will be put in place to ensure that 
projects are implemented in accordance with the project schedule.

F. Waiver of Remaining Useful Life Requirement

    FTA is implementing a blanket waiver to relieve FTA recipients from 
its useful life requirement with respect to assets that were destroyed 
or seriously damaged as a result of the storm and taken out of service 
before the end of their useful life. Due to the damage inflicted by 
Hurricane Sandy, facilities and equipment that have suffered serious 
damage and hence qualify for replacement under the Emergency Relief 
Program are presumed to have no remaining useful life. As a result of 
this waiver, recipients may apply for funds to replace assets at a 90% 
Federal share without regard to the Federal share remaining in the 
destroyed asset.

G. Disposition of Damaged or Destroyed Assets

    Although FTA has determined that federally-funded assets seriously 
damaged or destroyed by Hurricane Sandy have no remaining useful life, 
recipients may have a financial obligation to FTA for assets that have 
a fair market value (FMV) in excess of $5,000 at the time of 
disposition.
    Each recipient must notify FTA of how it is disposing of any 
federally-funded assets that have reached the end of their useful life 
(or those for which FTA has waived remaining useful life) that have a 
FMV greater than $5,000 and calculate the pro-rata share of the FMV if 
FTA funded the asset.
    Consistent with the common grant rule at 49 CFR Sec.  18.32(e), FTA 
Circular 5010.1D, ``Grant Management Requirements,'' October 1, 2008, 
Chapter IV, subsection 3, http://www.fta.dot.gov/documents/C_5010_1D_Finalpub.pdf, discusses disposition of equipment that has reached 
the end of its service life. If the unit has a FMV of $5,000 or more, 
then the recipient must reimburse FTA's share of the fair market value 
of the FTA assisted equipment. Reimbursements and documentation should 
be documented in the Sandy grant in TEAM.

H. Treatment of Insurance Proceeds

    As stated in the February 6, 2013, Notice of Availability of 
Emergency Relief Funding, recipients that have received insurance 
payments for damaged equipment and facilities prior to the receipt of 
FTA Emergency Relief funding must reduce their reimbursement request by 
the amount of insurance proceeds allocated for the repair or 
replacement of a given asset. FTA will participate at a 90 percent 
Federal share of the net project cost after application of insurance 
proceeds. If a recipient receives or allocates insurance proceeds to a 
project after receiving FTA Emergency Relief funds, the recipient must 
repay to FTA either 90 percent or 100 percent of the insurance proceeds 
received, depending on the Federal share for that project. Remaining 
insurance proceeds after repayment may be used as local match. In the 
event a recipient receives insurance proceeds for an asset and decides 
not to replace that asset, the waiver of useful life described in 
section F does not apply, and the recipient must reimburse FTA the 
remaining Federal interest in that asset in accordance with FTA 
Circular 5010.1D.

I. Executive Order 11988, Floodplain Management

    Executive Order 11988, Floodplain Management, requires Federal 
agencies to avoid to the extent possible the long and short-term 
adverse impacts associated with the occupancy and modification of 
floodplains and to avoid direct and indirect support of floodplain 
development wherever there is a practicable alternative. In accordance 
with the Executive Order, recipients shall not use grant funds for any 
activity in an area delineated as a `special flood hazard area' or 
equivalent, as labeled in the Federal Emergency Management 
Administration's (FEMA) most recent and current data source, unless, 
prior to seeking FTA funding for such action, the recipient designs or 
modifies its actions in order to minimize potential harm to or within 
the floodplain. To guide decision making, recipients shall use the 
``best available information'' as identified by FEMA, which includes 
advisory data (such as Advisory Base Flood Elevations), preliminary and 
final Flood Insurance Rate Maps (FIRMs), and Flood Insurance Studies 
(FISs). If FEMA data is mutually determined by FTA and the recipient to 
be unavailable or insufficiently detailed, other Federal, State, or 
local data may be used as the ``best available information'' in 
accordance with Executive Order 11988.
    For Hurricane Sandy, the Secretary of Transportation has determined 
that if a Federally-funded project or activity is located in a 
floodplain, that the ``best available information'' requires a minimum 
baseline standard for elevation no less than that found in FEMA's 
Advisory Base Flood Elevations, where available, plus one foot 
(ABFE+1). This determination recognizes that the existing Flood 
Insurance Rate Maps (FIRMs) for the New Jersey and New York coastlines 
were developed more than 25 years ago. Updated FIRMs are yet to be 
finalized and will not be available in time to provide updated 
information to support vital and immediate reconstruction efforts. This 
determination is based on FEMA's assessment that, following recent 
storm events including Hurricane Sandy, the base flood elevations shown 
on some existing FIRMs do not adequately reflect the current coastal 
flood hazard risk. FEMA recognizes that the ABFEs are based on sound 
science and engineering, and are derived from more recent data and 
improved study methodologies compared to existing FIRMs. To reduce the 
likelihood of future damage from such risks as storm surge, coastal 
hazards, and projections of sea level rise, the application of an

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ABFE+1 standard provides a limited safeguard against the natural 
recurrence of flood hazards.
    Thus, for projects in floodplains, when considering alternatives to 
avoid adverse effects and determining how to design or modify its 
actions in order to minimize potential harm to or within the floodplain 
consistent with Executive Order 11988, recipients should consider that 
the ``best available information'' for baseline elevation is ABFE, or, 
if that is not available, FIRM+1. This standard does not mean that 
transit agencies will be required to move existing facilities to a 
higher elevation; however, in order to minimize potential harm within 
the floodplain in accordance with Executive Order 11988, recipients 
must consider the best available information (ABFE or FIRMs), including 
sea level rise consistent with the addition of at least one foot over 
the most up to date elevations. Particularly with respect to existing 
facilities where relocating them may not be feasible, examples of 
actions to minimize potential harm to or within the floodplain and 
reduce the risk of damage from future disasters include but are not 
limited to updated design features or added protective features 
(resiliency projects). Consistent with FTA's interim final rule, if 
State or locally adopted code or standards require higher elevations, 
those higher standards would apply.

II. Award Administration

A. Grant Application

    Once FTA allocates Emergency Relief funds to a recipient, the 
recipient will be required to submit a grant application electronically 
via FTA's TEAM system. Recipients should work with their FTA Regional 
Office to develop and submit their application in TEAM so that funds 
can be obligated expeditiously. Grant applications in TEAM may only 
include eligible activities under the Emergency Relief program.
    A discretionary project identification number has been assigned to 
each recipient's allocation for tracking purposes and must be used in 
the TEAM application.

B. Payment

    Upon award, payments to recipients will be made by electronic 
transfer to the recipient's financial institution through FTA's 
Electronic Clearing House Operation (ECHO) system.

C. Grant Requirements

    Emergency Relief funds may only be used for eligible purposes as 
defined under 49 U.S.C. 5324 and as described in the Emergency Relief 
Program Rule (49 CFR Part 602) and the February 6, 2013, Notice of 
Availability of Emergency Relief Funds.
    Recipients of section 5324 funds must comply with all applicable 
Federal requirements, including FTA's Master Agreement. Each grant for 
section 5324 funds will include special grant conditions, including but 
not limited to, application of insurance proceeds, application of any 
FEMA funds received, section 904(c) of the Disaster Relief 
Appropriations Act of 2013, Federal share, and enhanced oversight.

D. Reporting Requirements

    Post-award reporting requirements include a monthly submission of 
the Federal Financial Report and Milestone reports in TEAM consistent 
with FTA's grants management Circular 5010.1D, as well as any other 
reporting requirements FTA determines are necessary.

E. Oversight and Audits

    Recipients are advised that FTA will implement an enhanced 
oversight process for funds awarded under the Emergency Relief Program 
in response to Hurricane Sandy. FTA will issue separate guidance on the 
applicable oversight procedures for grants awarded in response to 
Hurricane Sandy. In addition, recipients should anticipate a high 
likelihood of additional scrutiny by the Government Accountability 
Office (GAO) and the Department of Transportation's Office of the 
Inspector General (OIG).

    Issued in Washington, DC, this 25th day of March, 2013.
Peter Rogoff,
Administrator.
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[FR Doc. 2013-07268 Filed 3-28-13; 8:45 am]
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