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###### Department of Transportation

###### Federal Transit Administration

          - [Docket No. FTA-2006-23511]

# AGENCY:

Federal Transit Administration, Department of Transportation.

# ACTION:

Notice of Guidance; request for comments. 

# SUMMARY:

This guidance would implement additional authority provided in the Safe, Accountable, Flexible and Efficient Transportation Equity Act, a Legacy for Users (SAFETEA-LU) for public transportation agencies undertaking joint development projects. In addition, this notice seeks comment on two issues: a clarification of what is “physically or functionally related” to a transit project; and a proposed limitation on the amount of space that might be leased under “incidental use.” Finally, this guidance would provide additional information in a question-and-answer format to assist grantees in developing and submitting project proposals for FTA review.

# DATES:

Comments should be received on or before March 2, 2006.

# ADDRESSES:

Mail or hand deliver comments to the U.S. Department of Transportation, Dockets Management Facility, Room PL-401, 400 Seventh Street, SW., Washington, DC 20590, or submit electronically at *http://dmses.dot.gov/​submit*. All comments should include the docket number that appears in the heading of this document. All comments received will be available for examination and copying at the above address from 9 a.m. to 5 p.m., e.s.t., Monday through Friday, except Federal holidays. Those desiring notification of receipt of comments must include a self-addressed, stamped postcard or you may print the acknowledgment page that appears after submitting comments electronically.

# FOR FURTHER INFORMATION CONTACT:

Paul Marx, 202-366-1675, or Paula Schwach, 816-329-3935. FTA is located at 400 Seventh Street, SW., Washington, DC 20590-0001. Office hours are from 8:30 a.m. to 5 p.m., Monday through Friday, except Federal holidays.

# SUPPLEMENTARY INFORMATION:

## Electronic Access and Filing

You may submit or retrieve comments online through the Document Management System (DMS) at: *http://dmses.dot.gov/​submit*. Acceptable formats include: MS Word (versions 95       ( print page 5108)    or later), MS Word for Mac (versions 6 to 8), Rich Text File (RTF), American Standard Code Information Interchange (ASCII) (TXT), Portable Document Format (PDF), and WordPerfect (versions 7 to 9). The DMS is available 24 hours each day, 365 days each year. Electronic submission and retrieval help and guidelines are available under the help section of the Web site.

An electronic copy of this document may also be downloaded by using a computer, modem and suitable communications software from the FTA Web site: *http://www.fta.dot.gov*. Internet users may also reach the Office of the Federal Register's home page at: *http://www.nara.gov/​fedreg* and the Government Printing Office's Web page at: *http://www.access.gpo.gov/​nara*.

## Background

The Federal Transit laws have included joint development authority since the Urban Mass Transit Act of 1974. In the Transportation Equity Act for the 21st Century (TEA-21), the joint development authority was incorporated into the definition of a transit capital project, at 49 U.S.C. 5302(a)(1)(G). This made joint development activities eligible for reimbursement under formula and discretionary transit grant programs. SAFETEA-LU added intercity bus and rail terminals to the joint development authority, and excepted them from the prohibition on supporting the construction of space for commercial, revenue-producing activities.

 The definition of “capital project” reads, in pertinent part, as follows:

(1) Capital project.—The term “capital project” means a project for * * *

(G) a mass transportation improvement that enhances economic development or incorporates private investment, including commercial and residential development, pedestrian and bicycle access to a mass transportation facility, and the renovation and improvement of historic transportation facilities, construction, renovation, and improvement of intercity bus and intercity rail stations and terminals, because the improvement enhances the effectiveness of a mass transportation project and is related physically or functionally to that mass transportation project, or establishes new or enhanced coordination between mass transportation and other transportation, and provides a fair share of revenue for mass transportation that will be used for mass transportation—

(i) Including, property acquisition, demolition of existing structures, site preparation, utilities, building foundations, walkways, open space, safety and security equipment and facilities (including lighting, surveillance and related intelligent transportation system applications), facilities that incorporate community services such as daycare or health care, and a capital project for, and improving, equipment or a facility for an intermodal transfer facility or transportation mall, except that a person making an agreement to occupy space in a facility under this subparagraph shall pay a reasonable share of the costs of the facility through rental payments and other means; and 

(ii) Excluding construction of a commercial revenue-producing facility (other than an intercity bus station or terminal) or a part of a public facility not related to mass transportation;” [Emphasis on additions added.]

FTA has implemented the joint development authority as part of its grant program circulars, inserting guidance as Appendix A to Circular 5010.1, guidance for new Major Capital Investments, and as Appendix B to the Grants Management and Formula Capital Grants circulars, 9300.1 and 9030.1. The proposed revision incorporates the new authority provided in SAFETEA-LU, and it seeks to clarify how FTA will review and approve specific activities involving the use of federally-assisted real property. These include transfer of real property for joint development, incidental use and shared use of transit property, as well as property disposition. The following are changes made to the original Appendix, for each of Circulars 5010.1, 9030.1 and 9300.1. The revised Appendix, as a substitute for the existing Appendices, is accessible on the FTA Web site, at *http://www.fta.dot.gov/​;* as well as in the DOT Docket, at FTA-2006-23511.
    - Page 1—Reorganized the beginning of the Appendix to focus on the three tests defining a joint development: Statutory Definition; Financial Return; and Highest and Best Transit Use.
    - Page 5—Eligible Costs—Added element f., “including integrity bus and rail facilities.” This item reflects the new authority in SAFETEA-LU.
    - Page 10—Added a new Section 9: Process for Submitting a New Joint Development Proposal.
    - Page 12—Revised Frequently Asked Questions, to include new examples on low and moderate-income housing (Question 11), Parking for Community Service Activities (Question 13), the difference between Joint Development Transfer and Disposition (Question 14), and the difference between Joint Development and Shared Use (Question 15).
    - Page 25—Added Questions 18, 19, and 20 to clarify the treatment of property disposition, sharing common walls, and intercity bus and rail stations.
    - Attachment 1—FTA has developed a Joint Development checklist defining what is to be included in a project proposal submitted for FTA review.

FTA seeks comment on these revisions to the joint development appendices to the respective FTA Circulars.

In addition, FTA seeks comment on two basic issues that arose during the development of this Appendix.

Physically or Functionally Related—A joint development project must be a mass transportation improvement that is physically or functionally related to the transit project. Based on the implementation of this authority over the last twenty years, FTA has taken this to mean that: either the joint development must be integrated into the transit project—i.e., share its common walls, floor, and/or roof—or that the joint development must be related to the transit project by function, as evidenced by connecting pathways, joint use of parking, bicycle and related amenities, and enhancement of the transit system by the joint development. FTA has tended to prefer projects where the joint development was fully integrated into the overall transit project, thus ensuring physical relationship.

However, the addition of intercity bus and train stations to the definition of a joint development project raises some questions regarding functional relationship. The joint development is intended to enhance the effectiveness of public transit, and this may occur optimally if the intercity bus or rail station is in a nearby but separate facility from the transit station. FTA seeks comment on whether a direct (short distance) pedestrian or bicycle pathway is sufficient to establish a functional relationship between two stand-alone structures that are defined as a transit capital project, or whether FTA should require that a joint transit/intercity terminal project share a common wall and roof in order to conform to the requirements of SAFETEA-LU.

Parking is a related issue in this regard. FTA generally will not support parking in excess of transit need. However, both intercity bus and rail terminals will have a need for parking (and taxi access) even if most of their customers come to the terminal on public transportation. FTA seeks comment on how to incorporate intercity bus and rail terminal parking requirements into the overall transit project.

Maintenance cost is also a related issue in this regard. Unlike other joint development projects, intercity bus and rail stations are not required to pay “a reasonable share of the costs of the facility through rental payments and       ( print page 5109)    other means; * * *” FTA has interpreted this exception as applying to the construction cost of these facilities, not their ongoing reasonable costs of maintenance. FTA will encourage public transportation agencies to negotiate shared maintenance agreements to ensure satisfactory condition and usefulness of the joint development project over its full term.  

Proportion of Incidental Use—FTA is considering establishing a percentage of additional space that may be supported with transit grant funds for joint development and/or incidental use purposes. Taking as given that the primary purpose of the expenditure is a transit project—say, a bus transfer facility—how much more space would be reasonable to include for a join development activity such as a day care center, congregate meal facility, or health care facility? Is it reasonable for the physical capacity of the jointly developed improvement to exceed the transit facility in size and/or cost? This question arises particularly in the context of an intercity bus or rail station which, since its service area is likely to be considerably larger than the transit agency's, may require even more “peak” than the transit agency does.  

Related to this issue is the question of how to treat changes in the use of joint development space after the project is complete. For example, if space was made available for a day care center but three years after the project is complete, the day care center manager moves the operation to another location. FTA seeks comment on whether the transit agency should be required to replace the day care center only with another eligible transit activity (such as a senior care or public health activity), or whether the space might be made available for lease by a public or private sector activity. FTA is considering requiring the transit agency to perform a new market analysis on the basis of replacing the initial joint development activity with a market-based joint development activity.  

Finally, the public transit agency may reasonably seek to build a large enough facility to allow for future expansion. Given that such facilities may have a useful life of 40 years or more, it is reasonable to anticipate some growth in the transit agency and its service over that term. The transit agency may then wish to offer this additional space for rent on a non-interfering basis until it is needed for transit operations. FTA seeks comment on a method for determining what growth is “reasonable” to project in this instance. FTA is considering linking this projected growth to population forecasts for the region, as used by the Metropolitan Planning Organization for its long range plans.

Issued on: January 24, 2006.

Sandra K. Bushue,

Deputy Administrator.

[FR Doc. 06-871  Filed 1-30-06; 8:45 am]

BILLING CODE 4910-57-M