[Federal Register Volume 80, Number 18 (Wednesday, January 28, 2015)]
[Notices]
[Pages 4622-4627]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-01530]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket No. FTA-2014-0008]


State of Good Repair Grants Program: Final Circular

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Notice of availability of final circular.

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SUMMARY: FTA has placed guidance in the docket and on its Web site, in 
the form of a circular, to assist recipients of financial aid under the 
49 U.S.C. 5337 State of Good Repair (``SGR'') Grants Program. The 
circular provides instructions and guidance on program administration 
and the grant application process.

DATES: The effective date of the circular is February 27, 2015.

FOR FURTHER INFORMATION CONTACT: For program questions, contact Eric 
Hu, FTA Office of Program Management, 1200 New Jersey Ave. SE., Room 
E44-419, (202) 366-0870, [email protected]. For legal questions, contact 
Christopher Hall, FTA Office of Chief Counsel, same address, Room E54-
413, (202) 366-5218, [email protected].

SUPPLEMENTARY INFORMATION:

Availability of Final Circular

    This notice provides a summary of the circular and responses to 
comments received on the proposed version of the circular. The circular 
itself is not included in this notice. Instead, an electronic version 
of the circular can be found on FTA's Web site at www.fta.dot.gov, or 
in the docket at www.regulations.gov. Paper copies of the circular can 
be obtained by contacting FTA's Administrative Services Help Desk at 
(202) 366-4865.

Table of Contents

I. Overview
II. Discussion of Comments
III. Chapter-by-Chapter Summary

I. Overview

    The Moving Ahead for Progress in the 21st Century Act (``MAP-21''), 
Public Law 112-141, 126 Stat. 405 (2012), made significant changes to 
the Federal transit laws that are applicable across all of FTA's 
financial assistance programs. These changes further several important 
goals of the U.S. Department of Transportation. Most notably, MAP-21 
grants FTA new authority to oversee and regulate the safety of public 
transportation systems in the United States and authorizes a new Public 
Transportation Safety Program at 49 U.S.C. 5329. MAP-21 also 
establishes a new National Transit Asset Management system at 49 U.S.C. 
5326, including a new requirement for transit asset management plans, 
performance measures and annual target setting based on a definition of 
``state of good repair,'' and additional technical assistance from FTA.
    MAP-21 also establishes the new SGR Grants Program at 49 U.S.C. 
5337. In contrast to the repealed Fixed Guideway Modernization Program, 
the purpose of the SGR Grants Program is the maintenance, replacement, 
and rehabilitation of capital assets, along with the development and 
implementation of transit asset management plans.
    These three new sections--the transit asset management provisions 
at section 5326, the Public Transportation Safety Program at section 
5329, and the SGR Grants Program at section 5337--enhance the process 
by which a transit provider evaluates the SGR needs of capital assets. 
Section 5337 provides financial assistance for repairs, replacement or 
rehabilitation, as informed by conditions of capital assets and safety 
risk priorities. A transit provider's safety and asset assessment 
informs its asset management process, which informs budgeting and 
project selection. On October 3, 2013, FTA published an advance notice 
of proposed rulemaking (``ANPRM''), 78 FR 61251, to request public 
comments on a wide range of topics related to the new Public 
Transportation Safety Program and the transit asset management 
provisions. FTA is currently reviewing the public input received in 
response to the ANPRM.
    On March 3, 2014, FTA published a notice in the Federal Register 
(79 FR 11865) announcing the availability of a proposed version of this 
circular and requesting public comment. FTA received 12 individual 
responses that contained more than 60 comments. Commenters included 
eight transit providers, two metropolitan planning organizations 
(``MPO''), one advocacy association, and one architectural and 
engineering public contractor. This circular incorporates FTA's 
responses to the comments.

[[Page 4623]]

II. Summary Discussion of Comments Received in Response to the Proposed 
Circular

Definitions

    In the notice of availability for the proposed circular, FTA 
specifically sought public comment on several new or clarified 
definitions that would appear in the circular, including ``bus rapid 
transit,'' ``commuter rail,'' and ``high intensity motorbus.'' The 
largest number of comments FTA received related to definitions in the 
proposed circular.
    Three commenters responded to FTA's proposed elaboration of the 
definition of bus rapid transit (``BRT''). One commenter suggested that 
FTA should require shorter headways than FTA proposed, specifically 
that a bus rapid transit system should run maximum 15-minute headways 
for at least 14 hours on weekdays and for at least 10 hours on 
weekends. The same commenter proposed that, in addition to active 
signal priority and queue-jump lanes, BRTs be permitted to make use of 
any other ``physical or signal improvements that reduce delay for buses 
at intersections.'' Another commenter suggested that FTA eliminate the 
requirement for maximum headways altogether because it may lead to 
service levels that exceed demand. A third commenter suggested that 
FTA's proposed definition of BRT was unnecessary, or that, in any case, 
the definition change should be proposed somewhere other than the 
circular because the definition change will have effects beyond the SGR 
Grants Program.
    The requirement for maximum headways is necessary to give effect to 
the statutory definition of BRT at 49 U.S.C. 5302(2), and FTA cannot 
eliminate the requirement. BRT is statutorily defined as a system that 
``includes features that emulate the services provided by rail fixed 
guideway'' and that has ``short headway bidirectional services for a 
substantial part of weekdays and weekend days.'' The definition of BRT 
in the final circular clarifies these statutory requirements and adopts 
the proposed definition's requirements for maximum headways. The final 
circular preserves the proposed circular's flexibility for grantees to 
choose between 15-minute maximum headways throughout weekday service, 
or 10-minute maximum headways during weekday peak service hours and 20-
minute maximum headways during off-peak weekday service. This option is 
designed to give project sponsors flexibility in designing BRT service. 
The final circular also requires 30-minute maximum headways on weekend 
service, instead of the 15-minute maximum headways suggested by the 
commenter, because 30-minute weekend headways will be more appropriate 
for the variety of providers that may seek FTA financial assistance to 
create BRT services. The maximum headways described in the final 
circular are, of course, maximums, and nothing in the final circular 
prevents a BRT operator from providing service with shorter headways.
    The final circular does not incorporate the suggestion to allow 
BRTs to use other ``physical or signal improvements that reduce delay 
for buses at intersections'' as an alternative to active signal 
priority and queue-jump lanes. The statutory definition of BRT requires 
BRTs to include ``traffic signal priority for public transportation 
vehicles,'' 49 U.S.C. 5302(2)(B)(ii), and the suggested language would 
have avoided this requirement. FTA intends to apply a similar 
definition of BRT to its Capital Investment Grant (CIG) Program to be 
consistent between programs and because the BRT definition in 49 U.S.C. 
5302(2) closely matches that for the CIG program in 49 U.S.C. 5309(a). 
The only difference would be that the fixed-guideway element would not 
be required for Small Starts BRT projects that qualify as ``corridor-
based'' projects, for which no dedicated right-of-way is required. 
Projects that qualify as corridor-based Small Starts BRT projects would 
not be eligible for Section 5337 funding given that they do not meet 
the fixed-guideway element of the BRT definition in this circular.
    One commenter suggested that the proposed definition of 
``rehabilitation'' be amended to describe in detail how rehabilitation 
affects a vehicle's useful life. Another commenter suggested that the 
definitions of both ``rehabilitation'' and ``rebuild'' be amended to 
refer to assets other than vehicles. The final circular does not 
incorporate these suggestions because rebuilding and rehabilitation and 
their effects on the useful lives of vehicles and other capital assets 
are already discussed elsewhere in the final circular and in FTA's 
circular 5010.1D (Grant Management Requirements).
    One commenter requested clarification as to whether a State's 
governor must designate a regional transportation planning organization 
(``RTPO'') or regional transportation planning authority (``RTPA'') 
before the RTPO or RTPA can be the designated recipient of SGR Grant 
funds apportioned to a large urbanized area. Under the statutory 
definition of ``designated recipient,'' a regional authority need not 
be designated by the Governor of a State to become a designated 
recipient ``if the authority is responsible under the laws of a State 
for a capital project and for financing and directly providing public 
transportation.'' 49 U.S.C. 5302(4)(B).
    FTA's project management oversight requirements apply to projects 
with costs in excess of $100 million or other projects that FTA 
determines to be ``major capital projects.'' One commenter asked FTA to 
provide a definition of ``major capital project'' in the circular, and 
another commenter suggested that SGR Grants Program projects be 
exempted from the $100-million trigger for project management 
oversight. FTA's project management oversight program is required by 
statute, 49 U.S.C. 5327, and is effected by regulation at 49 CFR part 
633. The kinds of projects subject to project management oversight, 
including major capital projects designated as such by FTA's 
discretion, are already discussed in the regulation. The regulatory 
requirement for project management oversight of projects that involve 
``the rehabilitation or modernization of an existing fixed guideway 
with a total project cost in excess of $100 million,'' is based upon 
the size and complexity of such projects, and not the grant program 
through which Federal funding is awarded.
    As part of MAP-21's requirements for a national transit asset 
management system, FTA will, in a separate rulemaking, define the term 
``state of good repair.'' See 49 U.S.C. 5326(b)(1). Multiple comments 
suggested that, until FTA has finalized such a definition, it is 
premature to say that SGR Grants are available for projects that 
maintain systems in a state of good repair. FTA disagrees. Foremost, 
SGR Grants are available statutorily for certain eligible activities to 
``maintain public transportation systems in a state of good repair.'' 
49 U.S.C. 5337(b)(1). Also, it is possible to determine the eligibility 
of SGR Grants activities described in the statute and final circular--
e.g., projects for rehabilitation, rebuilding, or replacement--
independently of a definition of state of good repair. FTA expects that 
a final definition of state of good repair will enhance and clarify the 
SGR Grants Program.

High-Occupancy Toll Lanes

    Under the SGR Grants Program, an urbanized area's high-intensity 
motorbus apportionment is calculated based on vehicle revenue miles and 
directional route miles. FTA's current policy excludes high-occupancy 
toll

[[Page 4624]]

(``HOT'') lane miles from this calculation, except for certain 
``grandfathered'' lanes that were recently converted from high-
occupancy vehicle (``HOV'') lanes to HOT lanes. In the notice of 
availability that accompanied the proposed circular, FTA proposed to 
exclude all HOT lanes from SGR Grants Program eligibility, including 
the grandfathered systems.
    Several commenters responded to FTA's proposed policy regarding the 
eligibility of HOT lanes as a form of high intensity motorbus. Some 
commenters asked FTA to clarify language in the proposed circular 
distinguishing between HOT lanes and other kinds of lanes. Some other 
commenters suggested that FTA should discard the proposed policy and 
consider HOT lanes to be an eligible form of high intensity motorbus.
    The proposed circular included the following statement: ``The State 
of Good Repair Grants Program provides capital assistance for 
replacement and rehabilitation projects for . . . high intensity 
motorbus (buses operating in high-occupancy vehicle (HOV) lanes) or 
toll lanes with free access to HOVs) to maintain public transportation 
systems in a state of good repair. Projects in high-occupancy toll 
lanes are not eligible for State of Good Repair funding.'' Several 
commenters asked FTA to distinguish between ``toll lanes with free 
access to HOVs'' and HOT lanes. The final circular clarifies the 
eligibility of HOT lanes by removing the words ``or toll lanes with 
free access to HOVs.''
    Some commenters suggested that FTA should amend its current policy 
and begin recognizing HOT lanes as eligible forms of high intensity 
motorbus transit. This would be inconsistent with the definition of 
high intensity motorbus, which is limited to transit that is provided 
``on a facility with access for other high-occupancy vehicles.'' 49 
U.S.C. 5337(d)(1). If this definition were broadened to include HOT 
lanes, which provide access to fee-paying single-occupancy vehicles as 
well as high-occupancy vehicles, the definition could fairly include 
any lane that is used by both single-occupancy and high-occupancy 
vehicles.
    Previously, FTA excluded HOT lanes from the SGR Grants Program 
except for certain ``grandfathered'' HOT lanes that had been recently 
converted from HOV to HOT lanes. The final circular ends this 
grandfathering provision. In considering the effect of this policy 
decision on recipients of SGR formula funding, FTA determined that as 
few as three urbanized areas may be negatively affected by the policy 
expressed in the final circular, and that other urbanized areas will 
benefit from the additional SGR funding available in the high intensity 
motorbus tier.

Eligible Activities

    Some commenters requested clarification regarding FTA's statement 
that SGR funds are not available to modernize assets. These commenters 
observed that when an asset is replaced, it is normal to replace the 
asset with its modern equivalent. The SGR Grants Program stands in 
contrast to the repealed Fixed Guideway Modernization program. The 
purpose of the SGR Grants Program is to maintain transit systems in a 
state of good repair, not to alter or modernize them. However, 
modernization that occurs as part of bringing assets into a state of 
good repair may be permissible. For example, rebuilding and 
rehabilitation projects, which are eligible activities under the SGR 
Grants Program, include the replacement of older features with new ones 
and the incorporation of current design standards.
    The proposed circular stated that ``[r]ebuilding work must be 
procured competitively from private sector sources, unless there are 
mitigating circumstances. In-house rebuilding must not interfere with 
normal maintenance activities.'' One commenter asked FTA to clarify 
whether the proposed requirement for rebuilding services to be procured 
competitively precluded or otherwise affected performing in-house 
rebuilding. FTA has provided clarity by deleting these sentences from 
the final circular and referring the reader to FTA's discussion of 
rebuilding in circular 5010.1, which does not exclude in-house 
rebuilding efforts.
    Some commenters objected to the proposed circular's requirement 
that equipment, vehicles, or facilities to be replaced must have 
reached or exceeded their minimum useful lives to be eligible for SGR 
funds. The commenters observed that age alone should not be 
determinative of whether an asset requires replacement, especially with 
regard to technical assets that may be obsolete before the end of their 
useful lives. FTA agrees that asset age is not the sole determinant of 
whether an asset must be replaced, and useful life is not determinative 
of whether an asset is eligible for repair, rebuilding, or 
rehabilitation using SGR funds. Furthermore, a recipient may replace an 
asset using funds from other sources. However, FTA expects that an 
asset will have at least served its original useful life before it is 
replaced entirely using SGR funds, and the final circular retains this 
policy.
    Some commenters suggested that FTA concurrence should not be 
required to create pre-award authority for projects that are covered by 
categorical exclusions (``CE'') under the National Environmental Policy 
Act (``NEPA''), and that the circular expand the examples of SGR Grants 
projects that fall with CEs to include certain construction projects as 
well as vehicle and equipment purchases. One commenter also suggested 
that the circular restate and clarify the eligibility of property 
acquisitions prior to the completion of the NEPA review process. The 
same commenter also suggested that a Letter of No Prejudice should not 
be required for projects using SGR funds awarded through multiple 
grants that span authorizations. The final circular clarifies the kinds 
of projects that may qualify for a CE to include ``construction of 
transit facilities primarily within the transportation right-of-way,'' 
or, for a documented CE, ``real property acquisition and construction 
of transit facilities with features located outside of the 
transportation right-of-way'' when such projects are only ``slightly 
greater in scope than those qualifying as a CE.'' A project that makes 
use of SGR funds without pre-award authority (e.g., through a fiscal 
year appropriation notice) requires a Letter of No Prejudice to incur 
costs for future reimbursement.

Miscellaneous Program Questions

    Only miles of fixed guideway and high intensity motorbus transit 
that have been in revenue service for at least seven years are 
considered when calculating apportionments of SGR funding. One 
commenter asked FTA to clarify whether vehicle revenue miles must have 
been operated at attributable service levels continuously during the 
seven years. Yes, FTA's intention is that the attributable revenue 
miles will have been operated continuously during the preceding seven-
year period. Another commenter asked how the seven-year requirement 
affects new systems' reporting to the National Transit Database 
(``NTD''). The seven-year requirement applies only to the SGR Grants 
Program and does not affect how bus transit is reported to the NTD.
    One commenter asked FTA to clarify whether a supplemental agreement 
executed among FTA, a direct recipient, and a designated recipient, can 
be executed electronically in the electronic award management system. 
All applications for FTA grant funds must be submitted electronically 
through FTA's electronic award management system. Any supplemental 
agreement

[[Page 4625]]

should be attached electronically to the grant application.
    One commenter asked FTA to clarify that designated recipients of 
SGR funding have discretion to distribute the funding among eligible 
recipients, and are not required to adhere to the formulas used by FTA 
to apportion SGR funds. The role of the designated recipient and the 
apportionment and allocation processes are already discussed in detail 
in chapters III and IV of the circular.
    One commenter requested the FTA make SGR Grant funds available for 
the year of obligation, plus an additional five years, instead of the 
current year of obligation plus three years. FTA's policy in this area 
is consistent with other periods of availability that have been set by 
statute. For example, FTA's Bus and Bus Facilities Formula Grants also 
have a period of availability for the year of obligation plus three 
years. 49 U.S.C. 5339(g).
    Some commenters had questions regarding the eligibility of transit 
projects for Congestion Mitigation and Air Quality (``CMAQ'') funding. 
The CMAQ program is administered by the Federal Highway Administration 
and is obligated separately from FTA assistance. Certain transit 
projects may be eligible to receive CMAQ funding, in which case, the 
CMAQ funds obligated to the transit project are administered by FTA.
    One commenter suggested that grant applicants be permitted to 
obtain FTA's concurrence on vehicle and equipment useful life 
assumptions at any time, and not just through the grant application 
process. For vehicles and equipment that do not already have 
established useful lives, a grant applicant can consult with FTA 
regarding useful life at any time prior to making a grant application. 
However, specific useful life is established in the grant application.
    One commenter requested clarification regarding grant budget 
revisions, particularly whether (a) adjustments to a grant's scope must 
be coordinated with the applicable STIP and (b) when FTA's approval is 
required to make a budget revision to a grant. The circular states that 
budget revisions must be consistent with the activities contained in an 
approved STIP. If changes to a grant's scope would make it inconsistent 
with its associated STIP, a STIP amendment will be required. FTA's 
approval is required when the Federal share of a grant exceeds $100,000 
and the change in the cumulative amount of funds allocated to each 
scope from the originally approved scope exceeds 20 percent. The 20-
percent threshold refers to ``each scope,'' not, as suggested by the 
commenter, to the sum of all budget revisions to all scopes under the 
grant.
    One commenter requested clarification of when a grant recipient 
would be required to use the form entitled Sample Opinion of Counsel, 
which is included in the circular at Appendix C. Use of the form is 
required when a designated recipient agrees to permit another recipient 
to receive and dispense FTA financial assistance.
    One commenter suggested that the circular should clarify that 
direct recipients are able to apply directly to FTA for an SGR grant. 
The final circular retains the definition of direct recipient as ``[a]n 
eligible entity authorized by a Designated Recipient or State to 
receive State of Good Repair Grants Program funds directly from FTA,'' 
and no change is required.

Planning and Transit Asset Management (TAM)

    Eventually, projects funded by the SGR Grants Program must be 
included in a recipient's transit asset management (``TAM'') plan. One 
commenter asked FTA to clarify whether TAM requirements, specifically 
the requirements to create TAM plans and to set TAM targets apply only 
to direct recipients of SGR Grant funds or also to designated 
recipients of SGR Grant funds. The same commenter also asked if TAM 
plans must include all of a recipient's assets, or only assets acquired 
with Federal assistance. Statutorily, all ``recipients and 
subrecipients'' of assistance from FTA must develop TAM plans, and all 
``recipients'' must establish TAM targets. 49 U.S.C. 5326(b)(2) and 
(c)(2). TAM plans must include ``capital asset inventories''. 49 U.S.C. 
5326(a)(2). FTA expects to determine the specifics of these 
requirements through a separate rulemaking implementing the TAM 
requirements of 49 U.S.C. 5326.
    Two commenters objected to the proposed circular's statement that, 
upon completion of FTA's TAM rulemaking, projects receiving SGR funds 
must be included in a recipient's TAM plan. The commenters suggested 
that this statement presupposed that, after the TAM rulemaking process, 
FTA would require TAM plans to be project-specific, rather than broadly 
categorical. The requirement for SGR Grants Program projects to be 
included in TAM plans is contained in statute at 49 U.S.C. 5337(b)(2) 
and is not an FTA proposal.
    One commenter discussed the proposed circular's reference to the 
metropolitan and statewide-and-nonmetropolitan planning processes. 
Particularly, the commenter was concerned with the proposed circular's 
statement that a transportation improvement program (``TIP'') or 
statewide transportation improvement program (``STIP'') must contain a 
description of the anticipated effect of the TIP or STIP towards 
achieving performance targets that have been incorporated into the 
planning process by metropolitan planning organizations (``MPO'') or 
States. The commenter asked FTA to clarify that FTA will not require 
transit providers to quantify the performance impacts of individual 
projects contained in TIPs or STIPs. FTA's final circular retains the 
discussion of MPO and State planning because it is important to provide 
context for the SGR Grants Program within MAP-21's broader emphasis on 
performance-based transportation planning. The proposed circular's 
statement that TIPs and STIPs must discuss the effect of the TIP or 
STIP on achieving MPO or State performance targets closely paraphrases 
statutory requirements at 49 U.S.C. 5303(j)(2)(D) and 5304(g)(4), and 
for this reason has been left unchanged in the final circular. It is 
important to note that the TIP and STIP requirements apply to MPOs and 
States, not to transit providers, and this circular does not create new 
planning requirements for MPOs or States. FTA expects to establish TAM 
target setting for transit providers through a separate rulemaking, and 
the commenter is encouraged to provide comments in response to that 
expected proposed rule.

Other

    FTA received several comments that were beyond the scope of the 
circular. Some of these comments referred to matters that will be the 
subject of future rulemakings or other circulars (e.g., TAM, safety 
regulations, a definition of ``state of good repair''). Others 
discussed subjects that are of such general applicability to FTA's 
programs that they are fully discussed in other guidance (e.g., 
application of Buy America requirements, how to use TEAM/TRAMS). FTA 
encourages commenters with questions about these matters to contact FTA 
directly.

III. Chapter-by-Chapter Summary

A. Chapter I: Introduction and Background

    Chapter I of the proposed circular is an introductory chapter that 
contains general information about FTA, a distinction between the new 
SGR Grants Program and previous programs that existed under previous 
authorization

[[Page 4626]]

statutes, and a set of definitions applicable throughout the proposed 
circular. The final circular confirms the proposed definitions of bus 
rapid transit and commuter rail. For the reasons discussed above, the 
final circular limits the definition of high intensity motorbus to 
service that is provided on HOV lanes and excludes HOT lanes from the 
definition.

B. Chapter II: Program Overview

    Chapter II provides general information about the SGR Grants 
program.
1. Statutory Authority
    This section states the statutory authorization of the SGR Grants 
Program, which is codified at 49 U.S.C. 5337.
2. Program Goals
    This section describes the program goals for the SGR Grants 
Program: the maintenance, repair or replacement of capital assets to 
bring fixed-guideway and high-intensity motorbus systems into a state 
of good repair. The SGR Grants Program is part of MAP-21's emphasis on 
improved safety, asset management, and restoring aging transit 
infrastructure.
3. FTA Role in Program Administration
    This section describes the respective roles of FTA's headquarters 
and regional offices in program administration. The headquarters office 
is generally responsible for policy guidance and national program 
reviews, while the regional offices are generally responsible for day-
to-day program administration, obligating funds, providing technical 
assistance, and reviewing recipients' compliance with Federal 
requirements.
4. Designated Recipient Role in Program Administration
    This section explains that SGR Grants are apportioned to designated 
recipients. The term designated recipient is defined at 49 U.S.C. 
5302(4), and designated recipients for purposes of the SGR Grants 
Program are the same as for the Urbanized Area Formula Grants Program.
5. Direct Recipient and Sub-Recipient Eligibility
    This section describes how to establish a direct recipient and the 
process for allocating funds to direct recipients and for sub-awarding 
funds to subrecipients. A direct recipient is a public entity that may 
apply for some or all of an urbanized area's funding if certain 
requirements are met.
6. FTA Oversight
    This section describes the oversight conducted by FTA to ensure a 
recipient's compliance with grant program conditions. FTA performs 
comprehensive triennial reviews and may perform reviews focused 
specifically on a recipient's technical capability, procurement 
practices, civil rights compliance, safety and security, or other 
subject areas. Also, FTA may apply the Project Management Oversight 
Requirements to SGR grants for the rehabilitation of fixed guideway 
systems having total project costs in excess of $100 million.
7. Relationship to Other Programs
    This section discusses other FTA grant programs that have been 
repealed but for which funds may still be available, and programs 
created or amended by MAP-21. Funds previously authorized for programs 
that were repealed by MAP-21 remain available for their authorized 
purposes until the statutory period of availability expires or until 
the funds are fully expended, rescinded by the Congress, or 
reallocated.

C. Chapter III: General Program Information

    This chapter discusses in more detail the apportionments for the 
SGR Grants Program.
1. Apportionment of Program Funds
    This section states that FTA will apportion SGR Grants Program 
funds to designated recipients in urbanized areas with high intensity 
fixed guideway and high intensity motorbus systems. The section 
describes the statutory formula used to apportion funds under the SGR 
Grants Program. Of the funds appropriated to the SGR Grants Program by 
Congress, 97.15 percent is apportioned among urbanized areas with fixed 
guideway systems that have been in operation for at least 7 years, and 
2.85 percent is apportioned among urbanized areas with high-intensity 
motorbus systems that have been in operation for at least 7 years.
    An urbanized area's fixed guideway apportionment is determined by 
two calculations. Half of the apportionment is based on what the 
urbanized area would have received under the pre-MAP-21 fixed guideway 
modernization program, but using calculations contained in the current 
version of 49 U.S.C. 5336(b)(1). The other half of the apportionment is 
calculated based on fixed guideway service attributable to the 
urbanized area, weighted 60-40 between vehicle revenue miles and 
directional route miles. Only segments of fixed guideway systems that 
have been in operation for at least 7 years prior to the start of a 
fiscal year are included in the calculation for any given fiscal year.
    An urbanized area's high-intensity motorbus apportionment is 
calculated based on vehicle revenue miles and directional route miles. 
As with the fixed guideway calculation, the motorbus calculation is 
weighted 60-40 between vehicle revenue miles and directional route 
miles. Only segments of motorbus systems in operation for seven years 
prior to the start of a fiscal year are included in the calculation for 
any given fiscal year. The final circular clarifies that HOT lanes are 
not considered a form of high intensity motorbus and therefore are not 
included in the calculation of formula apportionments. As such, the FY 
2016 SGR formula apportionments will reflect this final guidance.
2. Availability of Funds
    SGR Grants Program funds are available for obligation during the 
fiscal year of appropriation plus three additional years. This period 
of availability is unchanged from the proposed circular.
3. Eligible Recipients
    State and local government authorities in urbanized areas with 
qualifying fixed guideway or motorbus systems are eligible recipients.
4. Eligible Projects
    This section describes projects eligible for SGR Grants Program 
funds. The SGR Grants Program is available for the maintenance, 
rehabilitation, or replacement of existing capital assets. SGR grants 
are not available for projects that expand system capacity or service 
or modernize assets. However, FTA will permit expansion of capacity 
within replacement projects to meet current or projected short-term 
service needs (e.g., replacing a maintenance facility with a larger 
facility, or replacing a bus with a larger bus). Replacement and 
rehabilitation includes (1) replacement of older features with new 
ones; (2) incorporation of current design standards; and (3) additional 
features required by Federal requirements. For any expansion elements 
included in a replacement project, a grant recipient will need to 
address how the project meets current or short-term service levels. FTA 
will review the reasonableness of such expansion elements when 
reviewing the grant. This section also notes the eligibility of 
incorporating resilience features into SGR projects.

[[Page 4627]]

    Funds apportioned under high intensity fixed guideway shall be 
available exclusively for fixed guideway projects. High intensity 
motorbus funds can be used interchangeably on any eligible high 
intensity motorbus or high intensity fixed guideway project. High 
intensity motorbus funds must be used for capital expenses of public 
transportation systems that provide regular, continuing shared-ride 
surface transportation service to the general public. The final 
circular clarifies the eligibility of certain projects for high 
intensity motorbus funding.
5. Federal Share of Project Costs
    This section describes the requirement for local funding of 
projects assisted under the SGR Grants Program. The Federal share of a 
project generally shall not exceed 80 percent of the net project cost. 
This section also discusses exceptions to the 80-percent limitation.
6. Capital Cost of Contracting
    This section describes the eligibility of recipients who contract 
with a third party for the provision of transit services and therefore 
do not have direct capital costs. In such situations, FTA can apply a 
concept called the ``capital cost of contracting.''
7. Local Share of Project Costs
    This section describes qualifying sources of the local share of a 
project.
8. Additional Sources of Local Share
    This section describes qualifying sources of the local share of a 
project that have special requirements associated with their use.
9. Alternative Financing
    This section describes alternative or innovative sources of project 
financing and the U.S. Department of Transportation's Transportation 
Infrastructure Finance and Innovation Act (TIFIA) loans. Recipients are 
encouraged to investigate and pursue innovative financing methods for 
transit projects.
10. Deferred Local Share
    This section describes a possible arrangement whereby a project 
sponsor may defer contributing the local share of project costs until 
the Federal share has been fully drawn down.

D. Chapter IV: Planning and Program Development

    Chapter IV describes planning requirements that apply to most 
recipients of FTA funding and are common to most of FTA's programs. The 
chapter contains a new section, Transit Asset Management (TAM), that 
describes the new national asset management system and the requirements 
for planning, target-setting, and reporting placed on recipients of FTA 
funding that will be effective upon completion of rulemaking. Asset 
management and the management of safety risks should inform recipients' 
selection of SGR Grants Program projects. Other sections in chapter IV 
are: (2) Metropolitan and Statewide Planning Requirements; (3) 
Metropolitan Planning Areas; (4) Transportation Management Areas; (5) 
Performance-Based Planning; (6) Roles of Designated Recipient and 
Metropolitan Planning Organization in Allocating Program Funds; (7) 
Subarea Allocation; (8) Availability of FHWA ``Flexible Funds'' for 
Transit Projects; (9) Requirements Related to Vehicles and Equipment; 
(10) Requirements Related to Facilities; (11) Environmental 
Considerations; (12) Major Capital Projects; (13) Authority to 
Undertake Projects in Advance; and (14) Public Transportation Safety 
Requirements.
    In response to comments received in response to the proposed 
circular, the final circular makes edits to three sections within 
Chapter IV. Section (7), Subarea Allocation, has been edited to clarify 
that although the MPO is not required to participate in the 
suballocation of program funds, FTA recommends that the designated 
recipient and MPO work together cooperatively in determining the 
suballocation of funds. Section (9), Requirements Related to Vehicles 
and Equipment, has been edited to improve clarity. Instead of 
containing a new discussion of FTA's rebuilding and overhaul policies, 
the section now refers the reader to FTA's primary discussion of the 
topic in circular 5010.1. Section (11), Environmental Considerations, 
has been edited to provide a more accurate description of the 
application of CEs under NEPA to SGR Grants Program projects, including 
construction-related projects. Section (13), Authority to Undertake 
Projects in Advance, has been rewritten for consistency with recent 
changes to FTA's list of CEs at 23 CFR 771.118.

E. Chapter V: Program Management and Administrative Requirements

    Chapter V describes management and administrative requirements that 
apply to FTA grants and are common to FTA's various programs. Sections 
included in chapter V are: (1) FTA Electronic Award Management System; 
(2) System for Award Management Requirements; (3) Data Universal 
Numbering System (DUNS) Registration Requirements; (4) DUNS Requirement 
for Subrecipients; (5) Electronic Clearing House Operation (ECHO) 
Requirements; (6) Federal Funding Accountability and Transparency Act 
(FFATA) Requirements; and (7) National Transit Database (NTD) 
Reporting.

F. Chapter VI: Other Provisions

    Chapter VI describes some of the requirements and conditions that 
apply to FTA grants and are common to FTA's programs. Sections included 
in chapter VI are: (1) Introduction; (2) Charter Bus Services; (3) 
Civil Rights; (4) Clean Air Act (CAA); (5) Commercial Driver's License 
(CDL); (6) Debarment and Suspension; (7) Drug and Alcohol Testing; (8) 
Drug-Free Workplace; (9) Employee Political Activity; (10) Energy 
Conservation; (11) Environmental Reviews; (12) Intergovernmental 
Review; (13) Labor Protections; (14) Presidential Coin Act; (15) 
Private Sector Participation; (16) Use of Competitive Procurements; 
(17) Real Property Acquisition and Relocation Assistance; (18) 
Restrictions on Lobbying; (19) Safety and Security; (20) School Bus 
Transportation; (21) Seismic Design and Construction Standards; (22) 
Sensitive Security Information; and (22) State Safety Oversight.

G. Appendices

    The final circular contains five appendices. Appendix A contains 
instructions for recipients preparing a grant application. Appendix B 
contains instructions for how to prepare a project budget. Appendix C 
contains example documents to assist recipients in applying for and 
managing an SGR grant. Appendix D contains FTA regional and 
metropolitan contact information. Appendix E contains a list of 
references for the circular.

Therese McMillan,
Acting Administrator.
[FR Doc. 2015-01530 Filed 1-27-15; 8:45 am]
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