[Federal Register Volume 74, Number 144 (Wednesday, July 29, 2009)]
[Notices]
[Pages 37760-37762]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-18096]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket Number: FTA-2009-0036]


Additional Proposed Guidance for New Starts/Small Starts Policies 
and Procedures and Request for Comments for 2009

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Proposed guidance; request for comments.

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SUMMARY: This notice includes, and requests comments on, additional 
Proposed Guidance on New Starts/Small Starts Policies and Procedures. 
This guidance continues FTA's efforts to streamline and simplify the 
New and Small Starts programs. The notice: (1) Proposes modifications 
to the evaluation and rating process; (2) clarifies existing policies; 
and (3) solicits public feedback on potential changes to FTA's internal 
practices for the New and Small Starts programs. Please note this 
guidance is in addition to, and distinct from, the guidance on New 
Starts/Small Starts Policies and Procedures published concurrently in 
this issue of the Federal Register.

DATES: Comments on the additional Proposed Guidance on New Starts/Small 
Starts Policies and Procedures must be received by August 18, 2009.

ADDRESSES: You may submit comments--identified by the docket number 
FTA-2009-0036--by any of the following methods:
    Web site: http://regulations.gov.
    Follow the instructions for submitting comments on the DOT 
electronic docket site.
    Fax: 202-493-2251.
    Mail: U.S. Department of Transportation, Docket Operations, M-30, 
West Building Ground Floor, Room W12-140, 1200 New Jersey Ave., SE., 
Washington, DC 20590.
    Hand Delivery: U.S. Department of Transportation, Docket 
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Ave., SE., Washington, DC 20590, between 8:30 a.m. and 5 p.m., 
Monday through Friday, except Federal holidays.
    Instructions: You must include the agency name (Federal Transit 
Administration) and the docket number (FTA-2009-0036). You should 
submit two copies of your comments if you submit them by mail. If you 
wish to receive confirmation that FTA received your comments, you must 
include a self-addressed stamped postcard. Note that all comments 
received will be posted without change to the Federal Government Web 
site located at http://regulations.gov. This means that if your comment 
includes any personal identifying information, such information will be 
made available to users of the Web site.

FOR FURTHER INFORMATION CONTACT: Elizabeth Day, Office of Planning and 
Environment, telephone (202) 366-5159 and Christopher Van Wyk, Office 
of Chief Counsel, telephone (202) 366-1733. FTA is located at 1200 New 
Jersey Ave., SE., East Building, Washington, DC 20590. Office hours are 
from 8:30 a.m. to 5 p.m., EST, Monday through Friday, except Federal 
holidays.

SUPPLEMENTARY INFORMATION: This notice includes, and requests comments 
on, additional Proposed Guidance on New Starts/Small Starts Policies 
and Procedures. This guidance continues FTA's efforts to streamline and 
simplify the New and Small Starts programs. This guidance is in 
addition to, and distinct from, the Final Guidance on New Starts/Small 
Starts Policies and Procedures published concurrently in this issue of 
the Federal Register. After reviewing and considering public comment on 
the guidance proposed below, FTA intends to publish Supplemental Final 
Guidance on New Starts/Small Starts Policies and Procedures, which will 
take effect immediately upon publication. Projects approved into final 
design within 30 days of issuance of the Supplemental Final Guidance or 
prior to its issuance will not be affected in accordance with the 
policy established by FTA in 2006 so as to provide more stability for 
New Starts projects far along in the project development process.

Organization

    This notice covers three topic areas: (1) Proposed policy changes; 
(2) clarification of existing policies and procedures; and (3) 
potential changes to FTA internal practices for managing the New Starts 
and Small Starts program. This notice fully articulates the

[[Page 37761]]

proposed guidance; the guidance will also be made available on the 
docket at http://regulations.gov and on FTA's public Web site at http://www.fta.dot.gov/planning/planning_environment_5221.html.

Proposed Policy Changes

1. Local Financial Commitment Rating

    FTA proposes to eliminate the policy of considering the degree to 
which a project employs innovative contractual agreements in the 
evaluation and rating of the operating financial plan under the local 
financial commitment criterion.
    In 2007, FTA implemented policy guidance stating that when 
evaluating local financial commitment it would consider the degree to 
which a project employs innovative contractual agreements. 
Specifically, FTA stated it would increase the operating financial plan 
rating (from ``medium'' to ``medium-high'' or from ``medium-high'' to 
``high'') when project sponsors provide evidence that the operations 
and maintenance of the project will be contracted out or when there is 
evidence that an opportunity had been given for contracting out but the 
project sponsor had substantive reasons for not doing so. FTA has 
determined that the type of contracting arrangement used or considered 
by a project sponsor is not useful or appropriate in determining the 
strength of the overall project. Thus, FTA proposes to eliminate 
consideration of it in evaluating and rating the operating financial 
plan.
    This change would apply to New Starts projects, as well as to any 
Small Starts or Very Small Starts projects that do not qualify for the 
streamlined local financial commitment evaluation enumerated in FTA's 
Updated Interim Guidance on Small Starts.

2. New Starts and Small Starts Other Factors Criterion

    FTA proposes to be less prescriptive on the items considered under 
the ``Other Factors'' criterion so as to better accommodate all of the 
unique project characteristics or circumstances that may justify 
special treatment in the evaluation of a project.
    Existing FTA policy guidance calls out specific items for 
consideration and rating as ``other'' factors (e.g., whether the 
project is a principal element of a congestion management strategy for 
the region, ``make-the-case'' documents, reliability of data). FTA 
proposes not to emphasize specific items it will consider when 
determining whether to modify a project's rating based on ``other'' 
factors pursuant to 49 U.S.C. 5309(d)(3)(K) and 49 U.S.C. 
5309(e)(4)(E). Rather, anything related to the project deemed 
appropriate by FTA under the discretion granted to it in statute can be 
considered under ``other'' factors on a project-by-project basis.
    Thus, FTA proposes to no longer call out congestion management 
strategies with automobile pricing schemes in particular or the 
contents of a ``make-the-case'' document as items it will specifically 
consider or formally rate as ``other'' factors. Under this proposal, 
project sponsors would be free to submit information on these items 
voluntarily to assist FTA in its overall evaluation and rating of the 
project, but would not be required to submit the information. In 
addition, FTA proposes to no longer formally and explicitly rate the 
reliability of information provided on costs and travel forecasts, but 
will still consider reliability of the data as an ``other'' factor when 
determining whether the project justification rating should be changed.

3. New Starts Project Planning Horizon Year

    FTA proposes to allow New Starts project sponsors to use the 
adopted planning horizon forecast year of the metropolitan planning 
organization (MPO) to estimate project ridership, transportation system 
user benefits, and operations and maintenance costs.
    Since 2005, FTA has required project sponsors to submit information 
on ridership, transportation system user benefits, and operations and 
maintenance costs based on forecasts representing conditions in 2030. 
Because many MPOs have now moved to a horizon year of 2035, FTA will 
allow project sponsors to submit information consistent with the MPO's 
adopted planning horizon year, whether it is 2030 or 2035. Project 
sponsors may only use a 2035 planning horizon year if it has been 
officially adopted by the MPO.
    Because of the timing of this guidance relative to the annual 
review of projects conducted in support of preparing FTA's Annual 
Report on Funding Recommendations, this policy, if adopted, would not 
go into effect until March 2010.
    This proposed change does not impact potential Small Starts or Very 
Small Starts projects, since they submit information based on the 
opening year of the project rather than a forecast year.

Clarification of Existing Policies

1. New and Small Starts Documentation of Uncertainties

    In August 2008, FTA adopted a policy to require predictions of 
capital costs and project ridership for the locally preferred 
alternative to be expressed as ranges with accompanying explanations of 
the contributing sources of uncertainty that bracket the range. FTA 
reminds project sponsors that this policy will not be implemented until 
six months after FTA issues separate guidance concerning this 
provision, which has not yet been published. As such, the requirement 
is not yet in effect.

2. Alternate Ridership and Transportation System User Benefits 
Estimation Methods for New Starts and Small Starts

    FTA reminds project sponsors that regional travel forecasting 
models are not always required for New or Small Starts predictions of 
ridership and transportation system user benefit estimates.
    FTA's evaluation of New Starts and Small Starts projects requires 
estimates of ridership and user benefits. These estimates are often 
generated by regional travel demand models, which attempt to represent 
existing travel patterns and choices in order to predict future travel 
patterns and choices. Under the right circumstances, quality data 
paired with straightforward analysis can provide a more direct 
representation of travel than a regional model.
    The following paragraph gives a broad description and example of 
the ``right circumstances'' in which data-driven approaches may be 
preferable to a regional-model-based approach. Approaches outside the 
broad guidelines presented here may also be appropriate. Project 
sponsors should contact FTA's Office of Planning and Environment to 
discuss potential analytical techniques when beginning an alternatives 
analysis.
    Data-driven analytical techniques first require quality data. 
Further, the corridor should be served by a mature transit system in 
which existing riders exhibit a variety of behaviors, including 
travelers choosing transit when a reasonable automobile option is 
available (so-called ``choice riders''). Extensions of existing rail 
projects typically offer an excellent opportunity to use data-driven, 
incremental techniques. For example, a two-mile extension of a heavy 
rail line from the outer-most suburban station. If a large number of 
transit riders currently travel to the existing outer-most station by 
bus from the surrounding neighborhood and by car from more distant 
suburbs, an extension of the rail system would likely represent an 
incremental improvement to the transit trips in these two well-
established travel markets. An

[[Page 37762]]

incremental, data-driven approach might well be preferred over a 
regional model-based approach under these types of circumstances. 
Several Small Starts projects have already used simplified, data-driven 
analytical techniques to estimate ridership and user benefits. FTA 
welcomes New Starts project sponsors to use similar techniques as 
appropriate.

Changes to Internal FTA Practices

    FTA invites comment on certain changes the agency is considering to 
its own internal practices, described below. Any adoption of these 
changes would not require public notice-and-comment per 5 U.S.C. 
Section 553(b)(A), but FTA welcomes any opinions or suggestions whether 
these proposed changes would help improve FTA's management of the New 
Starts program.

1. Expanded Pre-Award Authority and/or Expanded Use of Letters of No 
Prejudice

    FTA is considering expanding the activities covered by 
``automatic'' pre-award authority upon completion of the requirements 
under the National Environmental Policy Act (NEPA) and/or expanding the 
circumstances under which FTA will issue Letters of No Prejudice 
(LONPs). Both approaches strive to expedite project delivery by 
allowing project sponsors to undertake activities covered by the pre-
award authority or LONP with non-Federal sources while maintaining 
eligibility for future Federal reimbursement should an award be 
forthcoming. Neither pre-award authority nor an LONP is a guarantee of 
future Federal funding. Thus, project sponsors should understand they 
undertake the activities at their own risk.
    Current FTA practice limits automatic pre-award authority for New 
and Small Starts projects to the following:
    <bullet> Upon FTA approval to enter preliminary engineering (PE), 
FTA extends pre-award authority to incur costs for PE activities;
    <bullet> Upon FTA approval to enter final design, FTA extends pre-
award authority to incur costs for final design activities; and
    <bullet> Upon completion of the NEPA process, FTA extends pre-award 
authority to incur costs for the acquisition of real property and real 
property rights.
    FTA is considering expanding the activities covered by automatic 
pre-award authority at the completion of NEPA to include procurement of 
items such as vehicles, rails and ties, etc., that are long-lead time 
items or items for which market conditions play a significant role in 
the acquisition price.
    FTA reminds the public that local funds expended by the project 
sponsor pursuant to and after the date of the pre-award authority are 
eligible for credit toward local match or reimbursement only if FTA 
later makes a grant or grant amendment for the project. Local funds 
expended by the project sponsor prior to the date of the pre-award 
authority are not eligible for credit toward local match or 
reimbursement. Furthermore, the expenditure of local funds on 
activities such as land acquisition, demolition, or construction prior 
to the completion of the NEPA process would compromise FTA's ability to 
comply with Federal environmental laws and may render the entire 
project ineligible for FTA funding.
    Letters of No Prejudice (LONP) also allow a project sponsor to 
incur costs using 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 for funding at a later date.
    Currently, before considering an LONP, FTA determines whether a 
project seeking an LONP is a promising candidate for a Full Funding 
Grant Agreement (New Starts) or a Project Construction Grant Agreement 
(Small Starts). Typically, New Starts projects need to be approved into 
final design to be considered ``promising candidates.'' However, LONP 
requests have occasionally been approved by FTA for projects prior to 
entry into final design when the LONP is sufficiently justified based 
on the cost or schedule impacts of not undertaking the work prior to 
final design. Currently, approval of LONPs is determined by FTA on a 
case-by-case basis. FTA is considering expanding the use of LONPs prior 
to project entry into final design but after completion of NEPA. 
Decisions on LONPs would still be determined case-by-case based on the 
justification provided by the project sponsor.
    Note that LONPs neither provide Federal funds nor constitute a 
commitment that Federal funds will be provided in the future. 
Nonetheless, LONPs are often viewed by project sponsors and/or other 
stakeholders as a signal of a future Federal commitment because FTA 
does not generally award them unless it believes the project to be a 
promising candidate for an FFGA or PCGA. Thus, should FTA move to a 
practice of awarding LONPs earlier in project development before it has 
sufficient information to know whether a project is a promising 
candidate for an FFGA or PCGA, the public should be aware that LONPs 
may no longer serve as a signal of a future Federal commitment.

    Issued on: July 24, 2009.
Peter M. Rogoff,
Administrator, Federal Transit Administration.
[FR Doc. E9-18096 Filed 7-24-09; 4:15 pm]
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