9062 Federal Register / Vol. 72, No. 39 / Wednesday, February 28, 2007 / Notices 

MetroLink currently crosses a single 

existing freight railroad industry lead 

known as the Grand Freight Diamond, 

thus constituting a limited connection 

to the general railroad system. Freight 

movements are conducted by Metro’s 

contractor, Squaw Creek Southern 

Railroad, Inc., across this diamond 

crossing and are temporally separated, 

occurring only during MetroLink’s 

nonrevenue hours of 1:15 a.m. to 3:45 

a.m. 

For this limited connection, Metro 

seeks permanent waiver of compliance 

from the following Parts of 49 CFR: Part 

217—Railroad Operating Rules, Part 

219—Control of Alcohol and Drug Use, 

Part 220—Railroad Communications, 

Part 221—Rear End Marking Devices, 

Part 223—Safety Glazing Standards, Part 

238—Passenger Equipment Safety 

Standards, and Part 239—Passenger 

Emergency Preparedness. Metro offers 

that it is similarly governed by the 

System Safety Program Plan as required 

by the Federal Transit Administration 

(FTA) and administered by the Missouri 

Department of Transportation (Momot). 

Interested parties are invited to 

participate in these proceedings by 

submitting written views, data, or 

comments. FRA does not anticipate 

scheduling a public hearing in 

connection with these proceedings since 

the facts do not appear to warrant a 

hearing. If any interested party desires 

an opportunity for oral comment, they 

should notify FRA in writing before the 

end of the comment period and specify 

the basis for their request. 

All communications concerning these 

proceedings should identify the 

appropriate docket number (e.g., Waiver 

Petition Docket Number 2007–27207) 

and must be submitted to the Docket 

Clerk, DOT Docket Management 

Facility, Room PL–401 (Plaza Level), 

400 7th Street, SW., Washington, DC 

20590. Communications received within 

30 days of the date of this notice will 

be considered by FRA before final 

action is taken. Comments received after 

that date will be considered as far as 

practicable. All written communications 

concerning these proceedings are 

available for examination during regular 

business hours (9 a.m.–5 p.m.) at the 

above facility. All documents in the 

public docket are also available for 

inspection and copying on the Internet 

at the docket facility’s Web site at http:// 

dms.dot.gov. 

Anyone is able to search the 

electronic form of all comments 

received into any of our dockets by the 

name of the individual submitting the 

comment (or signing the comment, if 

submitted on behalf of an association, 

business, labor union, etc.). You may 

review DOT’s complete Privacy Act 

Statement in the Federal Register 

published on April 11, 2000 (Volume 

65, Number 70; Pages 19477–78). The 

Statement may also be found at http:// 

dms.dot.gov. 

Issued in Washington, DC on February 23, 

2007. 

Grady C. Cothen, Jr., 

Deputy Associate Administrator for Safety 

Standards and Program Development. 

[FR Doc. E7–3449 Filed 2–27–07; 8:45 am] 

BILLING CODE 4910–06–P 

DEPARTMENT OF TRANSPORTATION 

Federal Transit Administration 

[Docket No: FTA–2006–25365] 

Formula Grants for Other Than 

Urbanized Areas Program (49 U.S.C. 

5311): Notice of Final Circular 

AGENCY: Federal Transit Administration 

(FTA), DOT. 

ACTION: Notice of Availability of Final 

Circular. 

SUMMARY: This notice announces the 

publication of final guidance in the form 

of a circular to assist grantees in 

implementing the Federal Transit 

Administration (FTA) Formula Grants 

for Other Than Urbanized Areas 

Program (commonly referred to as 

Section 5311). This notice provides a 

summary of the Section 5311 program 

circular, and addresses comments 

received in response to the July 31, 

2006, Federal Register notice (71 FR 

43280) announcing the availability of 

the proposed circular for comment. 

DATES: The effective date of this final 

circular is April 1, 2007. 

AVAILABILITY OF THE FINAL CIRCULAR: You 

may download the circular from the 

Department’s Docket Management 

System (http://dms.dot.gov) by entering 

docket number 25365 in the search 

field. You may also download an 

electronic copy of the circular from 

FTA’s Web site, at www.fta.dot.gov. You 

may obtain paper copies of the circular 

by calling FTA’s Administrative 

Services Help Desk, at 202–366–4865. 

FOR FURTHER INFORMATION CONTACT: 

Lorna R. Wilson, Office of Program 

Management, Federal Transit 

Administration, 400 Seventh Street, 

SW., Room 9114, Washington, DC 

20590, phone: 202–366–2053, fax: 202–

366–7951, or e-mail: 

lorna.wilson@dot.gov. Legal questions 

may be addressed to Shauna J. Coleman, 

Office of Chief Counsel, Federal Transit 

Administration, 400 Seventh Street, 

SW., Room 9316, Washington, DC 

20590, phone: 202–366–4063, fax: 202–

366–3809, or e-mail: 

shauna.coleman@dot.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

II. Chapter-by-Chapter Analysis 

A. Chapter I—Introduction and 

Background 

B. Chapter II—Program Overview 

C. Chapter III—General Program 

Information 

D. Chapter IV—Program Development 

E. Chapter V—Locally Developed, 

Coordinated Public Transit-Human 

Services Transportation Plan 

F. Chapter VI—Program Management and 

Administrative Requirements 

G. Chapter VII—State Management Plan 

H. Chapter VIII—Intercity Bus 

I. Chapter IX—Rural Transit Assistance 

Program 

J. Chapter X—Other Provisions 

K. Appendices 

Appendix 1.—Implementation of Two-Year 

Pilot of In-Kind Match for Intercity Bus 

I. Background 

On July 31, 2006, the Federal Transit 

Administration (FTA) published a 

Notice of Proposed Program Guidance 

and Request for Comments on the 

proposed revisions to FTA Circular 

9040.1E, ‘‘Nonurbanized Area Formula 

Program Guidance and Grant 

Application Instructions,’’ dated 10–01–

98. The proposed circular contained 

guidance on how to administer the 

Section 5311 program. The proposed 

circular also contained summaries of 

cross-cutting provisions such as Charter 

Bus, Buy America, Title VI, and EEO 

requirements. FTA did not seek specific 

comments on these cross-cutting 

provisions, however, because these are 

subjects of separate rulemaking or 

circular efforts. 

The comment period remained open 

until September 29, 2006. FTA received 

17 comments to the docket. FTA 

reviewed and considered all comments 

submitted. In addition to changes made 

in response to comments received, FTA 

also edited the proposed circular for 

clarity and accuracy. Based upon 

comments received, FTA hereby 

announces issuance of the final circular, 

Federal Transit Administration (FTA) 

Circular 9040.1F, ‘‘Nonurbanized Area 

Formula Program Guidance and Grant 

Applications Instructions,’’ which 

supersedes the 1998 FTA Circular 

9040.1E. FTA reserves the right to make 

changes to this circular in the future and 

to update references to requirements 

contained in other revised or new 

guidance and regulations that undergo 

notice and comment procedures without 

further notice and comment on this 

circular. 


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This notice does not contain the final 

circular, but rather provides a summary 

of the provisions found within. An 

electronic version of the circular may be 

found on the docket, at http:// 

dms.dot.gov, docket number FTA–

2006–25365, or on FTA’s Web site, at 

www.fta.dot.gov. You may obtain paper 

copies of the circulars by contacting 

FTA’s Administrative Services Help 

Desk, at 202–366–4865. 

II. Chapter-by-Chapter Analysis 

A. Chapter I—Introduction and 

Background 

This chapter is a general introduction 

to FTA to provide an orientation for 

those readers less familiar with FTA and 

our programs. FTA intends to include 

this introduction in all new and revised 

program circulars for the orientation of 

readers new to FTA programs. Chapter 

I also includes definitions. 

Six parties submitted comments on 

this chapter, with some parties offering 

multiple comments. One commenter 

thought that the statement ‘‘Grants.gov 

is information on all Federal grant 

opportunities’’ was misleading because 

not all Federal grants are included on 

this Web site. This commenter 

suggested that FTA provide information 

concerning who is responsible for 

updating this Web site. 

FTA agrees and revised the final 

circular to reflect that all competitive 

discretionary Federal grants are 

included on Grants.gov. FTA further 

clarified, in the final circular, that while 

FTA does not manage Grants.gov, FTA 

is responsible for posting all FTA 

competitive grant opportunities. In 

addition, FTA clarified, in the final 

circular, that the Department of Health 

and Human Services officially manages 

the Grants.gov postings. 

Five commenters submitted 

comments concerning the definitions. 

Four commenters submitted comments 

regarding the use of the term ‘‘small 

urban areas’’ throughout the proposed 

circular. Three of these commenters 

stated that the inclusion of the term 

‘‘small urban areas’’ in the definition of 

‘‘nonurbanized areas’’ was confusing 

and misleading when FTA proposed 

using ‘‘small urban areas’’ as 

synonymous with ‘‘nonurbanized 

areas,’’ ‘‘rural and small urban areas,’’

and ‘‘rural.’’ These commenters 

proposed that FTA not define small 

urban areas as synonymous with rural 

areas. One commenter supported the 

continued use of the term ‘‘small urban’’

in the circular, and believed that its use 

was consistent with current language. 

One commenter suggested that FTA 

more clearly define intercity bus 

service. Another commenter suggested 

that FTA consistently define ‘‘mobility 

management.’’

FTA agrees that while the technical 

use of the term ‘‘small urban’’

throughout the circular was correct, we 

understand that the common use of the 

terms ‘‘small urban’’ and ‘‘small 

urbanized’’ may be confusing. 

Therefore, FTA revised the definition of 

‘‘Other than Urbanized (Nonurbanized) 

Area,’’ in the final circular, to clarify 

that a nonurbanized area means any 

area outside of an urbanized area, and 

includes rural areas and urban areas 

with populations under 50,000 not 

included within an urbanized area. 

Further, FTA added definitions of ‘‘rural 

area,’’ and ‘‘urbanized areas’’ for further 

clarification. In addition, FTA removed 

the term ‘‘small urban’’ throughout the 

circular and replaced it with the term 

‘‘nonurbanized.’’

In response to the commenter who 

suggested that FTA more clearly define 

intercity bus service, the commenter 

failed to specify what aspect of the 

definition was unclear. Therefore, FTA 

adopts the definition of intercity bus 

service from the previous versions of the 

circular and as proposed in the 

proposed circular. FTA agrees with the 

commenter who proposed that FTA 

consistently define ‘‘mobility 

management.’’ Therefore, FTA replaced 

the proposed definition to make it 

consistent with the definition of 

mobility management provided in 49 

U.S.C. 5302(a)(1)(L). 

B. Chapter II—Program Overview 

This chapter replaces the former 

Chapter I, ‘‘General Overview,’’ in 

Circular 9040.1E. It provides an 

overview of the Section 5311 program in 

terms of its statutory authority and 

program goals. It defines the role of the 

individual States and FTA, and explains 

the program’s relationship to other FTAfunded programs, as well as its 

coordination with other Federal 

programs. It contains the same 

information as the existing circular, 

with minor updates. 

Three parties submitted comments on 

this chapter, with some parties offering 

multiple comments. One commenter 

asked FTA to provide a definition of 

‘‘takedown’’ when FTA uses it in 

relation to the Rural Transportation 

Assistance Program (RTAP). 

FTA agrees with this suggestion and 

added a definition of ‘‘takedown’’ to the 

definitions section in Chapter I of the 

final circular. 

One commenter suggested that FTA 

mention, in Chapter II, funding transfers 

of interrelated FTA grant funding. This 

commenter further suggested that FTA 

mention that States may choose to 

delegate some of their non-metropolitan 

transportation planning functions to 

regional planning organizations, in 

addition to noting that States may 

choose to suballocate some of their 

statewide transportation planning funds 

to Metropolitan Planning Organizations 

(MPOs). Another commenter suggested 

that FTA expand the brief descriptions 

of its other programs in Chapter II to 

provide comprehensive cross-program 

guidance to ensure consistency in 

management and reporting 

requirements. 

FTA disagrees that Chapter II should 

discuss funding transfers in detail 

because FTA intended Chapter II to be 

an overview. FTA provided a detailed 

discussion of transfers of interrelated 

FTA grant funding in Chapter III. For 

the same reason, FTA did not adopt the 

suggestion that FTA expand the brief 

descriptions of its other programs in 

Chapter II to provide comprehensive 

cross-program guidance. However, FTA 

revised some program descriptions to 

emphasize the relationship to the 

nonurbanized area formula program and 

referenced the transfer provisions. 

One commenter suggested that FTA 

provide additional guidance, under 

Section 3(b)(2), State Role in Program 

Administration, concerning the State’s 

obligation when the Regional Planning 

Agency makes funding decisions for the 

nonurbanized area. 

In response, FTA added a sentence to 

Chapter II, Section 5(f) to clarify that the 

State is responsible for satisfying 

grantee requirements for the Section 

5311 program. Because each State’s 

unique authorizing legislation defines 

the roles, responsibilities, and 

authorities of Regional Planning 

Agencies, each State must establish 

appropriate controls to monitor 

subrecipient activities to ensure that all 

provisions of the Section 5311 program 

are met. FTA looks to the States, not to 

Regional Planning Agencies or other 

subrecipients, to demonstrate program 

compliance. 

Two commenters submitted multiple 

comments on the Tribal Transit 

Program. These commenters asked FTA 

to clarify the State’s role and 

relationship to the Section 5311 

program in relation to the Federal 

Highway Administration’s (FHWA’s) 

Indian Reservation Roads (IRR) 

Program. Specifically, one commenter 

asked FTA whether a tribe could 

support its transit program with 

simultaneous funding from Section 

5311 assistance through the State in 

which it is located, 5311(c)(1) funding 

directly from FTA, and IRR funding. 

This commenter also asked FTA 


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whether tribes could use IRR funds as 

the non-Federal share of Section 5311 

assistance to tribes. 

FTA permits a tribe to support its 

transit program with simultaneous 

funding from Section 5311 assistance 

through the State in which it is located, 

5311(c)(1) funding directly from FTA, 

and IRR funding, as long as the tribe 

uses the funds for costs associated with 

administering the respective programs. 

Regarding the commenter’s question 

of whether State may use IRR funds for 

the ‘‘non-Federal’’ share of Section 5311 

assistance to tribes, FTA points out that 

States may use IRR funds for the nonFTA share. Title 49 U.S.C. 5311(g)(3) 

allows States to use funds from Federal 

agencies, other than those of the U.S. 

Department of Transportation, for the 

non-FTA share of a Section 5311 grant, 

but makes a specific exception allowing 

States to use the Federal lands highway 

programs for the local share. The 

FHWA, a U.S. Department of 

Transportation operating 

administration, administers IRR funds 

under the Federal Lands program. 

Therefore, IRR funds are not ‘‘nonFederal’’ funds. They are Federal funds, 

but they are eligible as local match. To 

clarify that IRR funds are eligible as 

local match, FTA added to Chapter III, 

Section 3(d) of the final circular a 

statement indicating that IRR funds are 

an eligible local match. 

One commenter suggested that FTA 

expand Section 6(c) Other Intraagency 

Coordination to include the following 

language: 

Federal transit law requires metropolitan 

planning organizations to coordinate their 

planning with the activities of other 

governmental agencies and non-profit 

organizations that receive Federal financial 

assistance from sources other than the 

Department of Transportation to provide 

non-emergency transportation services. This 

requirement does not extend to statewide 

transportation planning activities, but FTA 

does encourage State participation in 

interagency efforts, such as coordinated 

statewide planning of public and human 

services transportation, and the facilitation or 

involvement in State rural development 

councils or other interagency coordinating 

bodies. States also are reminded that they 

will be responsible for the selection of 

nonurbanized Section 5310, 5316, and 5317 

projects as derived from locally developed, 

coordinated public transit-human services 

transportation plans, and that the creation or 

use of statewide interagency councils or 

other bodies may be a successful strategy for 

reviewing plans and making project 

selections under these programs. 

FTA agrees with the general idea of 

this recommendation. FTA did not 

adopt this commenter’s proposal 

verbatim, but FTA expanded Chapter II, 

Section 6(b) of the final circular to 

include the following language: 

FTA encourages State DOT participation in 

interagency efforts, such as coordinated 

statewide planning of public and human 

services transportation. Since States are 

responsible for the selection of nonurbanized 

Section 5310, 5316, and 5317 projects as 

derived from locally developed, coordinated 

public transit-human services transportation 

plans, the creation or use of statewide 

interagency councils or other bodies may be 

a successful strategy for reviewing plans and 

making project selections under these 

programs. 

C. Chapter III—General Program 

Information 

This chapter consolidates the former 

Chapters II ‘‘Apportionments’’ with 

Chapter III ‘‘Eligibility’’. This revised 

chapter sets forth the basis for the 

apportionment of Section 5311 funds 

including the availability of those funds 

and the transfer of funds; also, it 

identifies eligible recipients and 

expenses, and the traditional Federal/ 

State matching ratio. Although this 

revised chapter retains much of the 

content of the first two chapters, it 

includes several changes required by the 

Safe Accountable, Flexible, Efficient 

Transportation Equity Act (SAFETEA–

LU). These changes include: (1) A 

sliding scale that permits a higher 

Federal share for capital and operating 

costs for several States based on a 

formula used by FHWA; (2) an 

expanded list of eligible capital 

expenses for crime prevention and 

security; and (3) the inclusion of 

Mobility Management as an eligible 

capital expense. 

Nine commenters submitted 

comments on this chapter, with some 

parties offering multiple comments. 

One commenter suggested that if the 

provisions of 48 U.S.C. 1469a do not 

apply to Puerto Rico, FTA should note 

this in Section 1(e) Consolidation of 

Grants to Insular Areas. This commenter 

further asked FTA to address whether or 

not Section 5307 (Urbanized Area 

Formula Grant Program) funds 

attributable to the U.S. Virgin Islands 

may be part of the consolidated grants 

to insular areas authorized under 48 

U.S.C. 1469a. 

In response to the first issue, FTA 

notes that 48 U.S.C. 1469a does not 

specify Puerto Rico as a covered insular 

territory. Therefore, the consolidated 

grant provisions do not apply to grants 

to Puerto Rico. Further, FTA declined to 

note in Chapter III, Section 1(e) that 48 

U.S.C. 1469a does not apply to Puerto 

Rico. FTA explicitly listed the covered 

insular territories, and does not believe 

that listing every other uncovered 

territory in the circular is warranted. In 

response to the second issue, FTA notes 

that Section 5307 funding that is 

attributable to the U.S. Virgin Islands 

and Guam may be part of the 

consolidated grants to insular areas 

authorized under 48 U.S.C. 1469a. FTA 

added Section 5307 to the list of grant 

programs in this section and notes that 

the U.S. Virgin Islands do not receive 

Section 5311 funds. 

Two comments concerned transfers of 

apportionment under different 

programs. One commenter asked 

whether FTA permits States to combine 

funds available to them for program 

administration under Section 5311 

funds with Sections 5310 (Elderly 

Individuals and Individuals With 

Disabilities), 5316 (Job Access and 

Reverse Commute), and 5317 (New 

Freedom) into a common program 

management account, or whether FTA 

requires States to track each program’s 

State administrative expense separately. 

Another commenter noted it is not clear 

why FTA allows a transfer of funds if 

it is only for ‘‘administrative 

streamlining of grant making,’’

particularly when States must separate 

and track the transferred funds under 

the same grant, and asked FTA to 

provide some examples of this 

procedure. This commenter further 

suggested that FTA retain the ability to 

transfer 5310 funds to 5311 strictly for 

capital projects, without a separate grant 

process for the use of those funds. 

In response to the first comment, FTA 

determined that States may combine 

program administration funds available 

to them into one administrative account 

at the State level, so long as the State 

uses the funds for State costs associated 

with administering the 5310, 5311, and 

5316 programs. However, FTA must still 

track the funds attributable to each 

program at the accounting classification 

code, Activity Line Item (ALI), and 

Financial Purpose Code level in the 

respective grants. As the State incurs 

expenses against the pooled funds for 

program administration, it can draw 

down the reimbursement against any 

grant that has undisbursed program 

administration funds. In response to the 

second comment, FTA, upon closer 

examination, agrees that there is little 

administrative ease in combining the 

program in a consolidated grant, 

because FTA would still require States 

to separate and track the transferred 

funds under the same grant. However, a 

State may transfer funds it allocates to 

Federally recognized Indian tribes 

under Section 5310, 5316 or 5317 to 

Section 5311 to enable FTA to make 

direct grants to Federally recognized 

Indian tribes for the selected projects, 

because the tribes are eligible direct 


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recipients under Section 5311 but not 

under the other programs. 

In response to the third comment, 

FTA can no longer allow a State to 

transfer Section 5310 funds to Section 

5311 without first selecting projects 

eligible under Section 5310. In other 

words, the State must now use the 

Section 5310 funds it transfers to 

Section 5311 only for Section 5310 

program purposes. This is a result of a 

change in the law, FTA can no longer 

allow the transfer of Section 5310 to 

Section 5311 to supplement resources 

available under the nonurbanized 

formula grant program, as the law 

previously permitted. 

Eight comments concerned Federal 

Motor Carrier Safety Administration 

(FMCSA) regulations in relation to 

feeder bus service. Four commenters 

noted that information in Chapter III, 

Section 2(c) and Chapter VIII, Section 9 

is conflicting when Chapter III states 

that operators of interstate service 

‘‘may’’ be required to comply with 

FMCSA regulations, and Chapter VIII 

states that operators of interstate service 

‘‘are required’’ to comply with FMCSA 

regulations. These commenters 

proposed that FTA clarify these 

statements. Two commenters 

recommended that FTA’s guidance 

emphasize that rural transit services that 

feed intercity bus service with 

meaningful connections can provide 

that service without any FMCSA 

regulatory involvement, as long as the 

rural transit service does not physically 

cross state lines and does not interline 

with the intercity bus service. 

Additionally, two commenters 

recommended that FTA provide in the 

circular that a rural transit agency’s 

costs of compliance with FMCSA safety 

and insurance regulations are eligible 

for Section 5311(f) funding to the extent 

that they are incurred in providing 

eligible feeder service. 

FTA agrees with the comments 

concerning the conflicting language in 

Chapter III and Chapter VIII. FTA 

reconciled the conflicting statements by 

replacing ‘‘may be required’’ in Chapter 

III with ‘‘are required.’’ In response to 

the commenters’ suggestions that FTA 

guidance emphasize that rural 

transportation services are subject to 

FMCSA regulation when the rural 

transportation service crosses state lines 

or when interlining is involved, Chapter 

VIII, Section 9 contains this statement. 

To the extent FMCSA regulations apply 

beyond this statement, FTA declines to 

further interpret FMCSA regulations 

and directs commenters to contact 

FMCSA Headquarters for further 

information. 

In response to the commenters’

suggestion that FTA state in the circular 

that a rural transit agency’s costs of 

compliance with FMCSA safety and 

insurance regulations are eligible for 

Section 5311(f) funding to the extent 

that they are incurred in providing 

eligible feeder service, FTA agrees and 

added language to clarify in Chapter 8, 

Section 9. 

Three commenters submitted 

concerns about Eligibility Assistance 

Categories. One commenter noted that 

the funding derived under Section 5340 

(Apportionments based on growing 

States and high density States formal 

factors) is a substantial portion for most 

States’ Section 5311 apportionments, 

and suggested that FTA move the 

paragraph that refers to Section 5340 to 

the second paragraph under the 

subheading of ‘‘Apportionment of 

Section 5311 Funds.’’ One commenter 

requested that FTA clarify ‘‘capital 

activities.’’ Another commenter 

suggested that FTA expressly add park 

and ride lots to the list of eligible capital 

items. 

FTA agrees with the commenter’s 

suggestion concerning Section 5340 and 

moved that paragraph as suggested. FTA 

disagrees that the circular should 

further clarify eligible capital activities. 

As proposed, Chapter III, Section 2(e)(2) 

of the proposed circular defines ‘‘capital 

expenses’’ and provides a list of eligible 

capital expenses. In response to the last 

commenter, FTA added park and ride 

lots to Chapter III, Section 2(e)(2) of the 

final circular. 

Four commenters submitted multiple 

comments concerning Federal/Local 

matching requirements. Two 

commenters recommended that FTA 

retain all of the matching requirements 

set forth in the draft circular without 

change. One commenter applauded FTA 

for its proposal to allow the increased 

‘‘sliding scale’’ Federal share for Section 

5311 assistance in States with high 

proportions of public lands. This 

commenter suggested that FTA include 

a qualifying statement in Section 3(a)(3) 

regarding whether FHWA is likely to 

recalculate these sliding scale rates and 

their qualifying States. 

FTA agrees with the first two 

commenters and retained all matching 

requirements set forth in the final 

circular without change. FTA notes that 

the match provisions in the circular 

reflect our understanding of 

Congressional intent. However, FTA 

notes that technical corrections 

legislation may be forthcoming which 

could further clarify SAFETEA–LU 

provisions on this point. Finally, FTA 

defers any questions about possible 

changes to FHWA’s rates to FHWA. 

One commenter noted that Chapter III 

(Table 2) is not clear as to whether the 

88.53 percent (sliding scale for capital 

projects) for the State of California 

covers all capital, including accessible 

vehicle purchase with 3 percent 

allowance. Another commenter 

suggested that FTA name the five 

specific programs established under the 

Federal Lands Highway authorization 

(e.g., Indian Reservation Roads, Park 

Roads and Parkways, Forest Highways, 

Public Lands Highways, and Refuge 

Roads), when FTA discusses the 

eligibility of Federal Lands Highway 

funds toward the non-Federal share of 

Section 5311 grants. 

In response to the clarity of Table 2, 

FTA notes that it allows the recipient 

the option of using the sliding scale in 

lieu of the 80 percent match. In 

addition, FTA notes that a recipient may 

also use the 90 percent for the actual 

incremental costs of equipment 

necessary to comply with the Americans 

with Disabilities Act (ADA) or the Clean 

Air Act (CAA) if that calculation proves 

more advantageous than the sliding 

scale. FTA added this explanatory 

language to Chapter III, Section 3(d). 

While no commenters raised objections 

regarding a provision in the proposed 

circular, which stated that States could 

not use Section 5310 funds received 

under service agreements as local match 

for 5311 to the docket, several States 

subsequently raised this objection to 

FTA regional staff. FTA reaffirmed and 

clarified this position, in Chapter III, 

Section 3(b) of the final circular, based 

on reading of 49 U.S.C. 5311(g)(3)(A) 

and 49 U.S.C. 5311(g)(3)(B). 

In response to the addition of the 

eligibility of Federal Lands Highway 

funds, FTA believes that FHWA is better 

suited to provide this information. FTA 

added a reference to Chapter III, Section 

3 to direct interested parties to the 

statutorily defined sources of DOT 

funds that States can use as local match 

for Section 5311 projects from the 

Federal Lands Highway Program. 

D. Chapter IV—Program Development 

FTA renamed and made minor 

updates to Chapter IV, including adding 

a requirement that designated State 

agencies provide annual Certifications 

and Assurances to FTA, which was 

always assumed under the former 

circular, but is now explicitly stated. 

FTA also made non-substantive, 

technical corrections to this chapter for 

clarity. 


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E. Chapter V—Locally Developed, 

Coordinated Public Transit—Human 

Services Transportation Plan 

This chapter replaces the former 

Chapter V ‘‘Application Instructions,’’

which is now attached as Appendix A 

to the proposed circular. This new 

Chapter V describes the Locally 

Developed Coordinated Public Transit—

Human Services Transportation Plan 

(Coordinated Plan) required under three 

other FTA programs (Sections 5310, 

5316, and 5317) and addresses the 

relationship to that planning process for 

Section 5311 subrecipients. Although 

SAFETEA—LU does not require Section 

5311 projects to be derived from a local 

coordinated plan, FTA states in Chapter 

V the expectation that Section 5311 and 

5307 recipients and subrecipients will 

be included as essential partners or 

participants in any coordinated 

planning activities. FTA also revised 

Chapter V in the final version to include 

a reference to the statutory requirements 

for ‘‘maximum feasible coordination’’

with transportation assistance by other 

Federal services. 

One commenter submitted multiple 

comments on this chapter. This 

commenter expressed concern that the 

proposed guidance was completely 

silent on the question of how, or 

whether FTA would allow incumbent 

Job Access and Reverse Commute 

(JARC) projects to continue. This 

commenter also was concerned about 

how FTA will allow local Section 5311 

and 5307 grantees and subrecipients to 

provide important transportation 

services through Sections 5310, 5316, or 

5317 directly. The commenter was 

further concerned that the approaches 

FTA was considering for these 

designations and allocations ‘‘will shut 

the door on many currently effective 

and many more potentially effective job 

access, new freedom, or elderly and 

disabled persons’ mobility programs.’’

FTA agrees that the proposed circular 

did not address how FTA will allow 

local Section 5311 and 5307 grantees 

and subrecipients to provide important 

transportation services through Sections 

5310, 5316, or 5317 directly. FTA has 

revised this chapter to include a crossreference to 5310, 5316, and 5317 

program circulars. In addition, FTA 

directs readers to FTA’s proposed JARC 

circular, which addresses incumbent 

JARC projects. The Federal Register 

notice accompanying the circular (71 FR 

52610, Sept. 6, 2006) and the proposed 

circular are available on FTA’s Web site 

at http://www.fta.dot.gov. FTA will 

publish the final JARC Circular at a later 

date. 

F. Chapter VI—Program Management 

and Administrative Requirements 

This chapter retains the requirements 

that were in Chapter VI of Circular 

9040.1E, and adds the National Transit 

Database (NTD) reporting required by 

SAFETEA–LU. 

Nine commenters submitted 

comments on this chapter, with some 

commenters submitting multiple 

comments. One commenter generally 

applauded the clarity with which FTA 

presents procurement procedures that 

States and subrecipients may consider 

under the Section 5311 program. 

One commenter provided comments 

on the proposed ‘‘Procurement’’ section. 

This commenter suggested that FTA 

emphasize in Section 5(a) that States 

may set procurement procedures or 

requirements that are more restrictive 

than FTA’s guidance, provided that a 

State’s policy does not violate Federal 

requirements. This commenter further 

suggested that FTA consider giving 

States’ authority to establish vehicle 

useful life and replacement standards 

for vehicles acquired with Section 5309 

assistance for use by subrecipients 

under Section 5310, 5311, 5316, and 

5317. 

In response to this commenter’s first 

suggestion, FTA does not believe that it 

needs to add this qualifying statement to 

Chapter VI, Section 5(a) because this 

qualifying statement appears in the first 

sentence of this section. In response to 

this commenter’s second suggestion, 

FTA believes that this suggestion would 

be better addressed in the Section 5309 

(Capital Investment Grant program) 

Circular, which is currently in the 

process of being revised. 

One commenter provided a comment 

on the proposed ‘‘Financial 

Management’’ section. This commenter 

requested that FTA clarify Section 6(c) 

regarding the application of accrual 

accounting to subrecipients. 

The common grant rule gives States 

the right to have the same financial 

management system for Federal funds 

they receive that they use for State 

funds. However, the requirement for 

accrual accounting is an FTA 

requirement. FTA requirements as well 

as common grant rule requirements are 

passed through to the subrecipient. 

Therefore, the accrual accounting 

requirement applies to subrecipients as 

well. 

One commenter took exception on the 

proposed closeout requirements that 

require closing out subrecipient grant 

agreements within 90 days after all 

funds are expended. This commenter 

preferred to closeout a subrecipient 

grant after FTA has reviewed the single 

audit report and made any adjustments, 

including repayments, to the grant. 

The common grant rule, which is 

applicable to all recipients and 

subrecipients, requires the recipient or 

subrecipient to submit all financial, 

performance, and other reports required 

as a condition of the grant within 90 

days after the expiration or termination 

of the grant. As this is a separate 

regulation not governed by FTA, FTA 

did not incorporate this commenter’s 

proposal into the final circular. 

Seven commenters provided 

comments on the proposed NTD 

reporting requirements. One commenter 

recommended that FTA should keep 

data collection and reporting 

requirements to a minimum. This 

commenter further suggested that data 

collection and reporting requirements 

should have a direct purpose to transit 

performance. Three commenters noted 

that FTA designed the existing Rural 

NTD data module for a voluntary pilot 

program that predates the SAFETEA–LU 

requirements, and includes data 

categories that exceed the statutory 

requirements. These commenters also 

proposed that FTA eliminate the excess 

data categories and requirements to 

avoid unnecessary data collection and 

reporting. 

FTA agrees that 49 U.S.C. 5311(b)(4) 

does not require some data elements, 

such as fatalities, that the current form 

requires. FTA also notes that the current 

form does not provide for collection of 

data required by SAFETEA–LU, such as 

fleet size and type. However, due to 

timing and funding limitations for the 

2006 reporting year, FTA used the 

existing NTD rural data reporting 

module, which FTA developed in 

consultation with the State DOTs. For 

the FY 2007 reporting cycle, FTA is 

working with a team of NTD experts, 

selected State DOTs, and rural and 

private operators to review data 

elements and definitions in light of 

SAFETEA–LU requirements. FTA 

anticipates data for intercity bus and 

Tribal transit will be added at this time, 

though the number of data elements will 

be kept to a minimum. FTA also agrees 

with the direct purpose comment, and 

points out that the one-page, rural form 

requires the following performance 

measures: trips, costs, miles, and hours. 

Three commenters supported direct 

reporting of data from rural 

subrecipients of Section 5311 funds. 

One of these commenters further 

suggested that FTA develop the option 

for States to allow their 5311 

subrecipients to directly enter NTD data 

elements, subject to verification/ 

concurrence by the State and suggested 

that FTA use, as a model, the Volpe 


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Center’s Drug and Alcohol Management 

Information System (DAMIS) 

submission system. 

FTA will continue to require the 

States to submit subrecipient data, and 

in the short term FTA will continue to 

require recipients to use the module that 

FTA and State DOTs developed. While 

FTA cannot use the Volpe Center’s 

DAMIS submission system for direct 

reporting by subrecipients as a model at 

this time, FTA will explore 

implementing improvements in the 

reporting software as resources permit 

in the future. FTA will also explore 

other alternate means of receiving 

formatted data from the States. 

Four commenters opposed FTA 

collection of subrecipient NTD data. 

Two commenters suggested that FTA 

consider accepting rural data in the 

aggregate rather than requesting forms 

for each State’s subrecipients. One of 

these commenters further suggested that 

FTA discontinue such requests and 

accept rural transit data on an aggregate 

statewide level because such reporting 

is not compelled by statute. This 

commenter urged FTA to make an 

express written decision, reflected 

either in the final program circular or in 

a Federal Register notice, that it will not 

require the submission of 5311 program 

data by subrecipient. This commenter 

further questioned whether FTA 

provided notice that is legally sufficient 

to enable it to impose upon Section 

5311 recipients a requirement to collect 

and submit data by subrecipient, at least 

for FY 2007 and beyond. 

FTA is preparing a separate Federal 

Register notice on NTD reporting that 

will address the 5311 reporting 

requirements for in SAFETEA–LU for 

FY 2007, and seek comment on the 

implementation of rural data collection 

provisions. Overall, FTA has statutory 

authority to require recipients to gather 

and report subrecipients’ NTD data to 

FTA pursuant to 49 U.S.C. Section 5335. 

Section 5335(a) states that FTA may 

request and receive appropriate 

information for the NTD from ‘‘any 

source,’’ and Section 5335(b) states that 

FTA ‘‘may award a grant under section 

5307 or 5311 only if the applicant, and 

any person that will receive benefits 

directly from the grant, are subject to the 

reporting and uniform systems.’’ A 

subrecipient of Section 5311 is a direct 

beneficiary of the grant and, as such, is 

subject to providing information for the 

NTD to the extent FTA requires. 

On the issue of collecting subrecipient 

data in the aggregate, FTA disagrees 

with the commenter’s position. As 

stated above, 49 U.S.C. 5335(a) permits 

FTA to ‘‘request and receive appropriate 

information from any source,’’ and 49 

U.S.C. 5335(b) subjects ‘‘any person that 

receives benefits directly from the 

grant’’ to the reporting and uniform 

systems. In addition, Congress expected 

that the data collection requirements 

would be ‘‘tailored to the smaller size of 

the typical public transportation system 

in rural areas, while still providing 

enough information to judge the 

condition and performance of our 

Nation’s network of rural public 

transportation systems.’’ Conference 

Report No. 109–203, at 943 (2005). FTA 

does not believe that aggregate data is 

‘‘tailored to the smaller size of the 

typical public transportation system in 

rural areas.’’ Moreover, FTA does not 

believe that aggregate data provides 

‘‘enough information to judge the 

condition and performance of our 

Nation’s network of rural public 

transportation systems.’’ Based on 49 

U.S.C. 5335 and the Conference Report, 

FTA will require that States provide 

individual subrecipient NTD data to 

FTA. 

One of these commenters suggested 

that FTA add a sentence at the end of 

the paragraph concerning NTD reporting 

to read as follows: ‘‘It is the State’s 

responsibility to collect such 

information from its subrecipients as 

will be necessary to submit these annual 

reports to the NTD.’’

FTA agrees with the general idea of 

this sentence, and added the following 

statement to the end of the Chapter VI, 

Section 12(e): ‘‘The State agency 

administering the FTA Formula 

Program for Non-Urbanized Areas (49 

U.S.C. 5311) will be responsible for the 

data collection and compilation from 

each Section 5311 subrecipient in the 

State serving the general public.’’

Two commenters suggested that FTA 

provide training on the Rural NTD 

Program requirements and processes. 

One of these commenters recommended 

‘‘in person’’ training in addition to 

online training or telephone help desk 

assistance. 

FTA agrees and is working to provide 

more training on rural reporting. 

Currently, most States are using the 

NTD rural reporting telephone help 

desk, 703–462–5233. Additionally, FTA 

anticipates providing an NTD rural 

training session during the FY 2007 

State Programs Meetings, in addition to 

various trainings throughout the year. 

FTA will post the training schedule on 

FTA’s public Web site, located at http:// 

www.fta.dot.gov. FTA will also post the 

training schedule on the NTD Program 

Web site, located at http:// 

www.ntdprogram.com. States should 

frequently check these Web sites for 

updated training information. 

One commenter provided comments 

on proposed Chapter VI, Section 14, 

‘‘FTA Management Review.’’ This 

commenter stated that there have been 

misunderstandings, or misplaced 

apprehensions, about ramifications of 

subrecipient site visits in the context of 

FTA management reviews. This 

commenter suggested FTA state that 

while FTA or its contractors may visit 

a sampling of subrecipients as part of 

the State Management Review, FTA 

does not intend for these visits to 

validate observations of States’ program 

management practices, or to be 

compliance reviews of subrecipients. 

This commenter further suggested that 

FTA revise the first paragraph of Section 

14 to read, ‘‘FTA also conducts more 

specific compliance reviews of States or 

their subrecipients in particular areas; 

for example * * * ’’

FTA agrees that there have been 

misunderstandings, or misplaced 

apprehensions, about ramifications of 

subrecipient site visits in the context of 

FTA management reviews, and 

therefore, incorporated a modified 

version of the commenter’s suggested 

language into Chapter VI, Section 14 of 

the final circular. 

G. Chapter VII—State Management Plan 

This chapter consists of the previous 

Circular 9040.1E’s Chapter XI, which 

FTA moved forward in the document to 

be consistent with the general format for 

FTA’s revised circulars. 

One commenter provided multiple 

comments on this chapter. This 

commenter generally applauded FTA’s 

encouragement of States to prepare 

consolidated State Management Plans 

(SMPs) that encompass Sections 5310, 

5316, and 5317, in addition to their 

Section 5311 program management. 

This commenter was concerned, 

however, that FTA does not require 

SMPs to explain the State’s processes 

for assuring that it considered rural 

projects in the statewide transportation 

planning process. This commenter 

suggests that FTA encourage States to 

discuss outreach and consultation with 

local officials and, as appropriate, with 

Indian tribal governments as part of the 

Section 5311 management process. 

FTA agrees that discussion of the 

State’s approach to outreach and 

consultation with local officials should 

be included in the State Management 

Plan. FTA added clarifying language to 

Chapter VIII, Section 4 of the final 

circular. 

H. Chapter VIII—Intercity Bus 

This chapter retains the same 

information from Chapter VII of Circular 

9040.1E, and adds the SAFETEA–LU 


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mandated enhanced consultative 

process requirement. While consultation 

between a State and intercity bus 

operators regarding the adequacy of 

intercity bus service within the State 

was encouraged under the previous 

circular, SAFETEA–LU now makes 

consultation mandatory for any State 

certifying that intercity bus needs are 

adequately met. 

Ten commenters submitted comments 

on this chapter, with some commenters 

providing multiple comments. Two 

commenters submitted general 

comments. One of these commenters 

applauded FTA’s efforts to see that 

States more fully include and consider 

intercity bus service operators in the 

development and support of rural 

transit services. Another commenter 

expressed concern that the guidance 

under this section would affect an urban 

grantee as well as a non-urban grantee, 

and suggested that FTA consider 

intercity bus service as public 

transportation. 

On the issue of considering intercity 

bus transportation as public 

transportation, FTA does not agree. Title 

49 U.S.C. 5302(a)(10) expressly excludes 

intercity bus transportation from the 

definition of public transportation. 

Although, intercity bus transportation is 

explicitly eligible for assistance under 

Section 5311(f), the commenter’s 

concern is misplaced. Commuter bus 

service is public transportation, not 

intercity bus service, and is eligible for 

assistance under FTA’s Urbanized Area 

Formula Program. As such, FTA has not 

incorporated the commenter’s 

suggestion into the final circular. 

Three commenters provided multiple 

comments on the consultation 

requirement to access intercity bus 

service. These commenters thought this 

requirement was too burdensome, and 

were concerned that the State will be 

unable to certify that intercity needs are 

met because private intercity bus 

operators are reluctant to submit 

proposals for intercity program funding. 

Two of these commenters believed that 

the evaluation of private sector business 

activities is outside of its scope and 

authority. 

FTA is aware that it may be difficult 

to obtain proposals for intercity bus 

projects in areas where the State has 

identified unmet needs. The statutory 

provision for certification implies a 

statewide assessment of intercity bus 

service that is currently available and an 

assessment of any existing needs. This 

is not a new requirement. 

On the issue of FTA’s scope and 

authority, FTA notes that 49 U.S.C. 

5311(f)(2) requires the chief executive 

officer to consult with ‘‘affected 

intercity bus providers.’’ Affected 

intercity bus providers may include 

private sector providers. In addition, 49 

U.S.C. 5311(f)(2) requires the State to 

certify to FTA that the ‘‘intercity bus 

service needs of the State are being met 

adequately,’’ if the State will not use the 

funds to support intercity bus service. 

Because FTA requires a direct 

correlation between the consultation 

process and the result of such 

certification, States will necessarily 

have to assess private sector business. 

Therefore, it is not outside of FTA’s 

scope and authority to require States to 

assess private sector business activities 

to the extent that 49 U.S.C. 5311(f)(2) 

requires. 

One commenter was concerned that 

any proposal related to counting 

expenditures on intercity bus services 

outside of a delineated Section 5311(f) 

project would need to verify that the 

service does meet the standards for 

Section 5311(f) participation. 

FTA believes that Chapter VIII is clear 

that intercity bus mobility needs can be 

met in many ways, including by 

publicly provided service. FTA agrees 

that to meet the Section 5311(f) 

expenditure requirement, a project must 

meet the standards for 5311(f) 

participation provided in Chapter VIII of 

the final circular. 

Two commenters suggested that if 

consultation demonstrates that there are 

significant unmet intercity bus needs in 

the State and there are substantial 

proposals presented to meet those 

needs, there is no ‘‘direct correlation’’

between the process and the result. The 

commenters suggest that the 

requirement for certification that there 

are no unmet bus needs renders the 

consultation process meaningless. These 

commenters proposed that when there 

is no direct correlation between the 

process and the results, FTA should not 

accept the certification. Further, these 

commenters suggested that FTA clarify, 

in Section 3 or 4, that FTA will reject 

the certification if it finds that there is 

no direct correlation between the 

certification and the results of the 

consultation process. 

FTA agrees that a ‘‘direct correlation’’

should exist between the certification 

processes and consultation results, 

including any needs assessment. In 

response, FTA strengthened the 

language in Chapter VIII, Section 3, and 

modified the model certification letter 

in Appendix E. As such, FTA will 

review letters of certification upon 

receipt to ensure that a direct 

correlation exists. FTA will not accept 

the certification if it is apparent that 

there is no direct correlation between 

the certification and the results of the 

consultation process. FTA will also 

review the consultation processes and 

needs assessment during the State 

Management Review. 

Four commenters submitted multiple 

comments on the proposed consultation 

process requirements. One commenter 

suggested that Sections 4(b)(2) and (4) 

are not clear. Another commenter was 

concerned that the process, as proposed, 

was too burdensome. 

These commenters were not specific 

concerning which aspects of the 

consultation requirements were unclear 

or burdensome. Therefore, FTA adopted 

the consultation process for intercity 

bus service as proposed in the proposed 

circular. 

Two commenters supported the 

definition of ‘‘consultation’’ as defined 

in the joint FTA/FHWA Metropolitan 

and Statewide Planning regulation (49 

CFR part 613). Specifically, one of these 

commenters noted that the specific 

aspects in Section 4(b) undermine the 

flexibility granted in the planning 

regulation, and proposed that the 

consultation requirements of this 

circular should reflect the requirements 

of the planning regulation. This 

commenter further recommended that 

FTA replace ‘‘must include’’ with ‘‘may 

include’’ in Section 4(b) to support 

flexibility in the approaches that States 

may take in the consultation process. 

FTA retained the definition of 

‘‘consultation’’ as provided in FTA/ 

FHWA’s Statewide and Metropolitan 

Planning regulation, but also notes that 

consultation, as it applies to the 

intercity bus program, must meet 

specific requirements. FTA disagrees 

with the proposal that FTA replace 

‘‘must include’’ with ‘‘may include’’ in 

Section 4(b). FTA believes that the four 

elements outlined in the guidance are 

necessary to establish an effective 

consultation with intercity bus 

providers and an assessment of the 

State’s needs. FTA further believes the 

elements are not too prescriptive and 

allow the State’s flexibility in 

establishing an assessment and 

consultation process. 

Two commenters submitted 

comments on the proposed suggestions 

for identifying private intercity carriers. 

One commenter applauded FTA’s 

comprehensive list of suggested 

consultation activities and suggested 

that States may identify the intercity bus 

network and consultation with its 

members through State outreach to 

State-level or multi-State regional 

associations of motor coach operators. 

This commenter further suggested 

consultation activities could include 

participation, dialogue, and meaningful 

interactions at the meetings and 


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conferences of these associations. This 

commenter also feels that the locally 

developed, coordinated public transithuman services transportation plans 

have enough concerns and priorities 

from their statutory mandates, and to 

have them become a vehicle for intercity 

bus industry consultation, as well, 

strikes the commenter as too 

burdensome a suggestion. Another 

commenter suggested that FTA change 

the wording in 4(c)(b) regarding the use 

of ‘‘The Bus Industry Directory’’ to 

‘‘industry directories’’ to avoid reference 

to a particular book that may no longer 

be published. 

FTA agrees with the commenters and 

encourages States to engage in as many 

activities as possible to facilitate an 

effective consultation process. FTA also 

agrees that the requirement to include 

an assessment of intercity bus needs in 

the development of Coordinated Public 

Transit-Human Service Transportation 

Plans could indeed become 

burdensome. However, Section 5311 

and 5307 recipients are the ‘‘public 

transit’’ in the Coordinated Public 

Transit-Human Service Transportation 

Plan, and FTA expects and encourages 

their involvement in the development of 

those plans. To the extent that intercity 

bus service is an unmet need for low 

income, elderly, or persons with 

disabilities, States should include those 

needs, and strategies to meet those 

needs, in their coordinated plans. To 

that extent, the coordinated planning 

process can be a resource to States in 

identifying unmet intercity bus 

transportation needs. On the issue of 

amending ‘‘The Bus Industry Directory’’

to read ‘‘industry directories,’’ FTA 

agrees and incorporated this change 

accordingly. 

Two commenters thought that 

informing intercity bus carriers of a 

State’s intent to certify was not an 

appropriate way to start the consultation 

process because it implies that a State 

has made a judgment about certification 

that it should not make prior to 

consultation. Furthermore, these 

commenters believed that the proposed 

Section 4(c)(2)(a) implies that 

consultation should be limited to those 

situations where the State is considering 

certifying, rather than including 

intercity bus operators in the State rural 

planning process on an ongoing basis. 

These commenters recommended that 

FTA strike the language of Section 

4(c)(2)(a) and substitute it with the 

following language: 

Inform intercity bus carriers of the State’s 

rural planning process and encourage their 

participation in that process, and where a 

State is considering possible certification, 

provide an opportunity to submit comments 

and/or request a public meeting to identify 

unmet needs and discuss proposals for 

meeting those needs. 

FTA agrees with these comments and 

incorporated this language into Chapter 

VIII, Section 4(c)(2)(a) of the final 

circular. 

Two commenters agreed with FTA’s 

proposal in Section 4(c)(3)(a) 

concerning the appropriateness for a 

State to work in partnership with the 

American Bus Association. However, 

these commenters suggested that this 

should not preclude States from 

working with carriers on an individual 

basis. These commenters proposed 

adding ‘‘and/or carriers individually’’

after ‘‘Association’’ in line two of 

Section 4(c)(3)(a). Another commenter 

noted that not all of Greyhound’s 

schedules are listed in the Russell’s 

Guide, and suggested that FTA list 

Greyhound’s Web site as a source for 

identifying intercity bus carriers and 

service. 

FTA agrees that States should not be 

precluded from working with intercity 

bus carriers on an individual basis and 

incorporated the language ‘‘and/or 

carriers individually,’’ accordingly. On 

the issue of adding the Greyhound Web 

site, FTA agrees that while the Russell’s 

Guide may not contain the most current 

information, the addition of only 

Greyhound’s Web site (and not other 

intercity carriers’ Web sites) is not 

warranted. FTA, however, added ‘‘Web 

sites of private intercity bus operators’’

in the resources for identifying intercity 

bus operators in the State. 

Three commenters submitted 

comments concerning eligible activities. 

One commenter supported the inclusion 

of FTA’s new definition of joint 

development, and applauded FTA for 

describing this new eligibility in the 

‘‘eligible activities’’ section. Two 

commenters indicated that FTA 

published proposed guidance on joint 

development projects, including 

implementation of the new intercity bus 

terminal eligibility in the Federal 

Register on September 12, 2006. These 

commenters suggested that FTA 

reference that guidance in Section 8 and 

suggested that FTA correct the last 

sentence to reflect that the joint 

development eligibility criterion for 

intercity bus terminals is ‘‘physical or 

functional’’ relationship to public 

transportation facilities, not ‘‘physical 

and functional’’ relationship. 

FTA agrees that the joint development 

eligibility criterion for intercity bus 

terminals is ‘‘physical or functional’’

relationship to public transportation 

facilities, not ‘‘physical and functional’’

relationship. FTA published final 

guidance on joint development on 

February 7, 2007. Accordingly, FTA 

added a reference to this document in 

Section 8. 

Two commenters submitted multiple 

comments concerning feeder service. 

These commenters recommended that 

Section 9 make clear that feeder service 

is only eligible for Section 5311(f) 

funding if it makes ‘‘meaningful 

connections with scheduled intercity 

bus service to more distant points’’ by 

adding ‘‘and which makes meaningful 

connections with scheduled intercity 

bus service to more distant points’’ at 

the end of the first sentence of 

Paragraph 9. These commenters further 

noted there are many factors (e.g., 

weather, accidents, change of plans) that 

can impede a customer’s ability to 

properly schedule a return intercity bus 

trip with a demand-responsive feeder 

service, and suggested that FTA add 

language to Section 9 that encourages 

feeder services to make regularly 

scheduled connections with intercity 

bus services. These commenters also 

recommended that FTA make clear, in 

Section 9, that States should also use 

the same merit based selection process, 

as outlined in Section 6, for feeder 

services. 

On the issue of adding ‘‘and which 

makes meaningful connections with 

scheduled intercity bus service to more 

distant points’’ at the end of the first 

sentence, FTA agrees and added this 

language accordingly. On the issue of 

adding language that encourages feeder 

services to make regularly scheduled 

connections with intercity bus services, 

FTA disagrees. FTA believes that this is 

a local operational issue and should be 

resolved at the local level. On the issue 

of a merit based selection process as 

applied to feeder service, FTA agrees 

that States should use the same merit 

based selection process as outlined in 

Section 6 and this process should be 

documented in the State Management 

Plan. 

One commenter submitted comments 

concerning ADA requirements. This 

commenter suggested that FTA’s 

explanation of ADA obligations in 

relation to intercity bus operations was 

‘‘too light’’ in its listing of ADA 

obligations. This commenter pointed 

out other features of accessibility that 

pertain to public and private intercity 

bus operators alike, such as, the 

requirement to provide accommodation 

to persons with disabilities and to make 

information on the operation accessible 

to persons with sensory or cognitive 

impairments. This commenter asked 

FTA to clarify whether the ADA ‘‘stand 

in the shoes’’ standard applies to private 

operators of intercity bus services who 


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receive public support through Section 

5311(f). 

On the issue of whether the Section 

5311 Circular is ‘‘too light’’ in its listing 

of ADA obligations, FTA believes DOT’s 

ADA regulation is self-explanatory and 

that there is no need to repeat the 

regulation at length in this circular. 

However, FTA revised the final circular 

to state that while the ADA 

complementary paratransit provisions 

may not apply to intercity bus, FTA 

notes that other relevant requirements of 

49 CFR parts 27, 37, and 38 may apply 

to intercity bus service. 

With regard to the ‘‘stand in the 

shoes’’ issue, FTA acknowledges that 

DOT has proposed changes to 49 CFR 

37.23 in an attempt to address the 

relationship between a public and 

private entity where the private entity 

was providing service under a contract 

or other arrangement, with the ‘‘other 

arrangement’’ taking the form of a grant. 

FTA provided a discussion on this issue 

in the section pertaining to Chapter X. 

Eight commenters submitted 

comments on the Federal share 

requirements. One commenter 

concurred with the Federal share for 

this program, and recommended that 

FTA include the requirement of a 50 

percent of net cost Federal share for 

operations and 80 percent for capital 

projects and project administration in 

the final circular. Seven commenters 

submitted comments supporting the use 

of verifiable capital costs of the 

unsubsidized intercity bus network 

within its borders as local match for a 

project involving Section 5311(f) 

services that make meaningful 

connections to that unsubsidized 

intercity bus network, when the entity 

operating the unsubsidized service 

approves of such use. Two commenters 

suggested that FTA add the following 

paragraph at the end of Section 11: 

FTA is aware that the 50 percent local 

match requirement for operating assistance 

for intercity bus services is problematic for 

States attempting to develop networks of 

intercity bus services since these services are, 

by definition, intercity, not local services. In 

order to encourage the development of such 

networks, FTA will allow a State to use the 

verifiable capital costs of the unsubsidized 

intercity bus network within its borders as 

local match for a project involving Section 

5311(f) services that make meaningful 

connections to that unsubsidized intercity 

bus network, provided that the entity 

operating the unsubsidized service approves 

of such use. In such cases, the project cost 

will be defined as the net operating cost of 

the subsidized service plus the capital cost of 

the unsubsidized intercity bus network and 

any other local match as may be needed. 

Section 5311 funds can be used to fund up 

to 50 percent of that project cost. 

Another commenter suggested that 

the following language be added to 

Section 11: 

In order to encourage the development of 

intercity networks, FTA will allow a State to 

use the verifiable capital costs of the 

unsubsidized intercity bus network within its 

borders as local match for a project involving 

Section 5311(f) services that make 

meaningful connections to that unsubsidized 

intercity bus network. In such cases, the 

project cost will be defined as the net cost 

of the subsidized service plus the capital cost 

of the unsubsidized intercity bus network 

and any other local match as may be needed. 

Section 5311(f) funds can be used to fund up 

to 50 percent of that project cost. 

FTA agrees in part with the proposal 

to use verifiable capital costs of the 

unsubsidized intercity bus network 

within its borders as local match, and 

approved a two-year pilot of In-Kind 

Match for Intercity Bus (‘‘Pilot 

Program’’). This Pilot Program allows 

States to use the capital costs of private 

sector intercity-bus service as in-kind 

match for the operating costs of 

connecting rural intercity bus feeder 

service funded under 49 U.S.C. 5311(f). 

FTA included an Appendix to this 

notice that outlines the program terms 

of the Pilot Program. 

I. Chapter IX—Rural Transportation 

Assistance Program 

This chapter contains the renumbered 

Chapter VIII from Circular 9040.1E. 

Although it makes no significant 

substantive changes, it reflects the new 

funding source for Rural Transportation 

Assistance Program (RTAP) as defined 

by SAFETEA–LU. Prior to SAFETEA–

LU, RTAP was funded out of FTA’s 

Research budget. SAFETEA–LU now 

funds RTAP with a 2 percent takedown 

from the Section 5311 program, with 85 

percent going to the States for local 

projects, and 15 percent to be used 

towards national projects to supplement 

State projects, such as the maintenance 

of a National RTAP resource center. 

This funding method ensures a 

predictable source of annual funding. 

Two commenters submitted multiple 

comments on this chapter. One 

commenter applauded FTA for noting 

that SAFETEA–LU re-named this 

program from ‘‘Rural Transit Assistance 

Program’’ to ‘‘Rural Transportation 

Assistance Program.’’ This commenter 

further applauded FTA for its accurate 

embodiment of SAFETEA–LU’s 

substantive changes to RTAP, and 

agrees that tribal transit technical 

assistance is a matter of pressing need, 

but thinks that it is outside the scope of 

this circular. This commenter also 

suggested that FTA update the list of 

initiatives that parallel the national 

component of RTAP, such as Project 

ACTION, the National Technical 

Assistance Center for Senior 

Transportation, the National Resource 

Center for Human Service 

Transportation Coordination, and the 

FTA/Labor Department JobLinks 

initiative. 

FTA agreed with this commenter and 

incorporated a link to other National 

Technical Initiatives to Chapter 9, 

Section 6 of the final circular. 

Another commenter stated that this 

section incorrectly indicated how many 

operators were in Alaska. This 

commenter suggests that when next 

reviewing RTAP allocations, that FTA 

make RTAP apportionments to States 

according to the population and area 

formulas already in place for the 5311 

program. 

At the time of publication of the 

proposed circular, FTA used 

information that was readily available; 

however, we discovered this was not the 

most current information. FTA 

apologizes to the State of Alaska. FTA 

did not receive other comments 

advising a change in the RTAP formula, 

and will not be changing the formula at 

this time. 

J. Chapter X—Other Provisions 

This chapter combines Circular 

9040.1E’s Chapter IX ‘‘Civil Rights 

Requirements’’ and Chapter X ‘‘Other 

Provisions.’’ Chapter X of the revised 

circular incorporates the same text from 

those two existing chapters. FTA 

renumbered and reorganized this text. 

The revised Chapter X also: (1) Expands 

the public hearing and involvement 

requirement for capital project planning 

to conform with SAFETEA–LU; (2) adds 

standardized language on real property 

acquisition and relocation assistance; (3) 

relieves the pre-award and post-deliver 

audit review requirement for 

procurements of 20 vehicles or less; (4) 

amends the Buy America section to 

reflect SAFETEA–LU changes regarding 

post-award requests and the right of an 

adversely affected party to seek FTA 

review; and (5) adds a new section on 

safety and security. 

Four commenters submitted 

comments on this chapter, with some 

commenters submitting multiple 

comments. One commenter raised the 

fact that FTA and FHWA are in the 

process of drafting updated regulations 

for statewide and metropolitan 

transportation planning that address the 

National Environmental Policy Act 

(NEPA) compliance and environmental 

protections, in addition to, core aspects 

of the planning requirements incumbent 

on States and metropolitan planning 

organizations. This commenter also 


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hopes that FTA is taking steps to assure 

that the Disadvantaged Business 

Enterprise (DBE) language in the 

circular comports with DBE rules and 

guidance that DOT has issued in recent 

months and years. 

On February 14, 2007 FTA and 

FHWA published the new joint 

planning regulation. There were no 

significant changes in the new planning 

rule that are inconsistent with the more 

general information in this circular 

relative to the Statewide or Metropolitan 

planning process. Members of the 

public interested in the planning 

rulemaking may wish to review the 

docket by going to http://dms.dot.gov 

and entering docket number 22986. FTA 

agrees with the comment concerning 

DBE rules and guidance. FTA is taking 

steps to assure that the DBE language in 

the circular comports with DBE rules 

and guidance that DOT has issued. 

Three commenters submitted 

comments on civil rights. One of these 

commenters noted that FTA is in the 

process of revising its civil rights 

circular that addresses a number of 

issues, including Title VI compliance, 

environmental justice, and 

consideration of limited English 

proficiency, and suggested that FTA 

reference these issues referenced by this 

and other program management 

circulars. 

FTA agrees with these comments, but 

declined to amend the final circular to 

incorporate changes made in other 

reference documents until these 

documents have gone through notice 

and comment, and have been finalized. 

Members of the public interested in the 

transportation for individuals with 

disabilities rulemaking may wish to 

review the docket by going to http:// 

dms.dot.gov and entering docket 

number 23227. 

Another commenter stated that 

Chapter X fails to provide a specific 

reference to the clarification of 49 CFR 

37.23 in the Office of the Secretary’s 

Notice of Proposed Rulemaking 

‘‘Transportation for Individuals with 

Disabilities.’’ This commenter proposed 

highlighting this change in the Section 

5311 Circular because it affects grants, 

sub-grants, cooperative agreements, and 

contracting for services. 

FTA declines at this time to provide 

a specific reference to the clarification 

of 49 CFR 37.23 in Chapter X of the final 

circular. With regard to the ‘‘stand in 

the shoes’’ issue, FTA acknowledges 

that DOT has proposed changes to 49 

CFR 37.23 in an attempt to address the 

relationship between a public and 

private entity where the private entity 

was providing service under a contract 

or other arrangement, with the ‘‘other 

arrangement’’ taking the form of a grant. 

In other words, under current DOT 

policy and the proposed rule, Section 

5311 subrecipients that are private nonprofit agencies providing fixed route 

public transit service would be required 

to provide complementary paratransit. 

Traditional means of financial support 

for intercity bus, such as vouchers or 

operating subsidies, would remain 

covered under 49 CFR 37.37(a), which 

would not be changed under the 

proposed rulemaking. According to 49 

CFR 37.37(a), a private entity does not 

become subject to requirements 

applicable to a public entity simply 

‘‘because it receives an operating 

subsidy from, is regulated by, or is 

granted a franchise or permit to operate 

by a public entity.’’ The nature of the 

arrangement between the public entity 

and the private intercity operator would 

determine whether Section 37.37 or 

Section 37.23 applies. In any case, the 

language likening intercity bus service 

to commuter service in terms of 

applicability of the requirement to 

provide ADA complementary 

paratransit is still valid and would not 

be changed by the proposed ADA 

rulemaking. 

Two commenters submitted 

comments on charter service. One 

commenter agreed that FTA should not 

issue any new rules or regulations 

regarding charter bus service until the 

negotiated rulemaking advisory 

committee completes its work. This 

commenter suggested that FTA rely on 

its prior charter bus rulings and existing 

legislation. Another commenter 

suggested that FTA add a note that it 

has begun a negotiated rulemaking 

process concerning its charter service 

regulations, and the outcome of that 

rulemaking, when completed, likely 

will result in changes to this circular’s 

charter service language. 

FTA agrees, and will rely on the 

existing regulations. However, FTA can 

supplement the existing regulations 

with the language in SAFETEA–LU to 

the extent the regulations do not 

conflict. In the interim, recipients can 

forward any charter issues regarding a 

particular fact scenario to the regions. 

FTA further suggests that interested 

parties follow the rulemaking 

proceedings by going to http:// 

dms.dot.gov and entering docket 

number 22657 into the search criteria. 

Two commenters suggested that FTA 

consider adding language to Chapter X, 

Section 19, ‘‘Safety’’ to explain any 

expectations that FTA has of its Section 

5311 recipients and subrecipients in the 

area of public transit security. One 

commenter submitted multiple 

comments concerning safety and/or 

security. This commenter suggested that 

FTA add a sentence to Section 19 that 

reads as follows: 

FTA has entered into a Memorandum of 

Understanding with the American 

Association of State Highway and 

Transportation Officials (AASHTO), the 

American Public Transportation Association 

(APTA) and the Community Transportation 

Association of America (CTAA) that supports 

the transit industry and Federal commitment 

to bus safety, and supports a model bus 

safety program to which all the signatories of 

this agreement have agreed to subscribe. 

FTA agrees, and incorporated the 

commenter’s proposed language. FTA 

further added the following sentence to 

the end of the commenter’s suggested 

language: ‘‘This program will also focus 

on addressing the needs of rural and 

small urban providers.’’ FTA has 

reserved the right to amend the final 

circular to incorporate changes, with 

regard to any expectations that FTA has 

of its Section 5311 recipients and 

subrecipients in the area of public 

transit security, made in other reference 

documents that have gone through 

notice and comment, and have been 

finalized. 

K. Appendices 

FTA proposed to re-label and 

reorganize Exhibits A–G of Circular 

9040.1E as Appendices A–H of the 

revised circular. The proposed new 

Appendix A contained revised 

application instructions that were 

formerly contained in Chapter V of 

Circular 9040.1E. The proposed 

Appendix B retained the Sample 

Selection of Projects that was formerly 

Exhibit A, but FTA proposed amending 

it to recognize the transfer of funds from 

the Section 5310, 5316, and 5317 

programs. The proposed Appendix C 

retained the Section 5311 budget 

information from the former Exhibit B, 

and added new codes for the Section 

5310, 5316, and 5317 programs. FTA 

proposed adding a new Appendix D to 

reflect the use of flexible funds under 

SAFETEA–LU. FTA proposed to retain 

the next three appendices without 

change: Appendix E retained the sample 

intercity bus certification from the 

former Exhibit E with the addition of 

evidence of consultation; Appendix F 

proposed to reserve the Section 5333(b) 

labor protection warranty from the 

former Exhibit F; and Appendix G 

retained the Capital Cost of Contracting 

percentage breakdowns from the former 

Exhibit G. FTA proposed to add a new 

Appendix H, listing contact information 

for FTA’s Regional Offices. 

Three commenters submitted 

comments on the Appendices to this 

circular. One commenter asked whether 


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the Department of Labor (DOL) and/or 

FTA will publish the procedures and 

afford States an opportunity to comment 

in response to the statement in 

Appendix A. Section 1h. under 

Certification of Labor Protective 

Arrangements that states, ‘‘at the time of 

this draft, DOL is preparing to revise its 

procedures for Section 5311.’’

In response, FTA would like to clarify 

that DOL has not yet issued a Notice of 

Proposed Rulemaking (NPRM), but may 

in coming months. FTA anticipates that 

DOL will provide States an opportunity 

to submit comments on this NPRM. FTA 

will advise the States how to access the 

NPRM when DOL issues it. 

Two commenters suggested that the 

following paragraph replace the second 

paragraph and the second bracketed 

paragraph in Appendix E of the Revised 

Guidelines: 

The State has conducted an assessment of 

statewide intercity bus mobility needs 

between (fill in dates), which dates are no 

more than four years prior to the date of this 

certification. What follows is a description of 

the assessment process and findings: * * * 

Prior to this certification, as required by 

5311(f)(2), the State consulted with affected 

intercity bus operators. That consultation 

process contained the four elements required 

by the circular and involved the following 

activities: (Description of activities and how 

they complied with required elements): 

Considering the State assessment and the 

results of the consultation process, the basis 

for the certification that there are no unmet 

intercity bus needs in the State is (explain in 

detail). 

These commenters believed this 

language would provide FTA with an 

initial view of whether a State is 

complying with the new standards so 

that it can move quickly when 

corrective action appears necessary. 

FTA agrees and has incorporated 

these commenters’ proposed language 

into the final circular accordingly. FTA 

has adopted the remainder of the 

Appendix as proposed, with minor 

technical corrections. FTA does not now 

recommend consolidation of multiple 

programs into a single grant, but retains 

the Scope code information for potential 

use. In the final circular FTA has also 

added new data fields for subrecipient 

information in the program of projects 

to comply with new requirements 

contained in the Federal Funding 

Accountability and Transparency Act of 

2006 (Pub. L. 109–282), enacted 

September 26, 2006. 

Appendix 1. Implementation of TwoYear Pilot of In-Kind Match for 

Intercity Bus 

Prior to publication of the proposed 

circular, FTA had ongoing conversations 

with intercity bus industry representatives, a 

private consultant working on intercity bus 

issues, and a State DOT to explore the 

possibility of capturing the value of 

unsubsidized intercity bus service as a source 

of in-kind local match for intercity bus 

projects funded with Section 5311(f). 

Greyhound and the American Bus 

Association submitted comments to the 

docket for the revisions to the Section 5311 

program circular that reflected the outcome 

of those preliminary conversations, and 

several States submitted comments in 

support of the intercity bus industry’s 

proposal. 

On October 20, 2006, FTA initiated a twoyear pilot allowing States to use the capital 

costs of private sector intercity-bus service as 

in-kind match for the operating costs of 

connecting rural intercity bus feeder service 

funded under 49 U.S.C. 5311(f). 

Background 

Title 49, U.S.C. 5311(f) requires each State 

to use 15 percent of its annual apportionment 

under its Section 5311 program to support 

intercity bus service, unless the Governor 

certifies that the intercity bus needs of the 

states are adequately met. SAFETEA–LU 

strengthened this requirement by requiring 

consultation with intercity bus operators 

prior to certification. 

In the last several years Greyhound has 

terminated most of its rural service, but 

Greyhound and other private operators 

maintain service between larger cities. 

Smaller regional carriers and rural transit 

systems can help support the national 

network of intercity bus service and meet the 

mobility needs of rural residents by 

providing feeder service that connects rural 

communities to the closest city with intercity 

bus service. 

Several States have conducted 

comprehensive state intercity bus needs 

assessments and identified corridors that 

could be supported by Section 5311(f) 

funding for feeder service, providing intercity 

connections to rural communities and 

increasing ridership and productivity to help 

sustain the unsubsidized intercity service 

provided by Greyhound and other operators. 

However, even when the State was 

interested and willing to use Section 5311(f) 

funds to meet identified needs and the 

private operator needed and desired the 

connecting service, lack of sources of local 

match often impeded implementation of the 

feeder service. 

A consultant working with the State of 

Washington came up with a creative 

financing concept, which Greyhound 

endorsed and promoted to FTA. While FTA 

rejected the original proposal to use the 

entire value of the unsubsidized intercity bus 

network in a State as a form of credit to be 

awardable for match, FTA continued to work 

with the advocates to refine the proposal. 

Several states and industry groups sought 

FTA’s approval of the financing concept in 

comments submitted to the Docket for the 

proposed revisions to the Section 5311 

program circular. FTA internally discussed 

the proposal and agreed to test a limited 

version of the financing concept in a twoyear pilot for Section 5311 grants obligated 

during FY 2007–2008. 

In this notice, FTA addressed the financing 

concept in the preamble but FTA did not 

incorporate the financing concept in the 

Circular because FTA is limiting the 

financing concept to a two-year period pilot. 

Depending on whether the pilot proves that 

the financing concept is workable and 

beneficial, FTA may extend and incorporate 

it into later iterations of the Section 5311 

Circular, or in future legislative proposals. 

I. Implamentation Instructions 

A. Defining the FTA Assisted Project 

To use the capital provided by a private 

operator as in-kind match, the FTA assisted 

project must be defined as including both the 

feeder service and an unsubsidized segment 

of intercity bus network to which it connects. 

B. Costs Allowable As In-Kind Match 

To be eligible to be used as in-kind match, 

a cost must be otherwise allowable under the 

project. Thus, to be eligible under Section 

5311, the costs contributed by the private 

operator as in-kind match must connect the 

rural community to further points. Also, 

since FTA can only fund the net project cost 

and the private operator is presumed to be 

collecting at least enough in fares to cover the 

operating costs of the service, we are only 

allowing the capital costs of the unsubsidized 

service to be used as in-kind match. To 

simplify matters, we will use the percentages 

allowed in the capital cost of contracting 

guidance to determine how much of the 

private operator’s total costs are attributable 

to capital. (e.g., 50% where the operator 

provides and maintains all the equipment, 

less if FTA funded equipment is provided.) 

C. Simplified Example of a Project 

FEEDER SERVICE—RURAL COMMUNITY A TO INTERCITY BUS TERMINAL IN CITY B 

Total Operating Costs ............................... $15,000 Service operates 2 round trips per day, 5 days per week. 1000 miles total @ $15/ 

mile. 

Less Farebox Revenue ............................ 5,000 Based on weekly ridership of 20 passengers who use the feeder to connect with 

intercity service at point B. 

Net Operating costs .................................. 10,000 Subsidized by 5311(f). 

Note: City B may be either under or over 50,000 in population if the origin in Point A is a non-urbanized area. 


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CONNECTING SERVICE—FROM INTERCITY BUS TERMINAL IN CITY B TO BIG CITY C 

Total Operating Costs ............................... $20,000 Documented fully allocated costs (both capital and operating) of unsubsidized privately operated service—2 trips each day that connect with the feeder service. 

(ten trips per week) 500 hours of service @ $40/hour. (If there are more trips per 

day that do not connect with the feeder, those costs aren’t counted). 

Less Operating Costs ............................... 10,000 The operating portion of the fully allocated costs is not allowable as in-kind match 

because the private operator is not operating at a loss, so farebox revenues are 

presumed to cover all the operating costs. Capital cost of contracting ratios may 

be used to determine the percentage of the total unsubsidized cost of the private 

service attributable to capital—50% if no FTA provided vehicles are used. The 

remainder is operating costs. 

Value of Capital contributed by private 

operator.

10,000 May be used as In-Kind match. 

Note: Both City B and City C are on the route on which the private intercity bus operator provides scheduled service. In this example there is 

just one destination, but in other cases there may be additional segments of the network included in the calculation—for example, service from B 

to D as well as B to C. 

FTA ASSISTED PROJECT—SERVICE FROM RURAL COMMUNITY A TO BIG CITY C 

Operating Deficit Segment A–B ............... $10,000 Funded by 5311(f)—Federal Share. 

Capital Costs Segment B–C ..................... 10,000 In-Kind Match—Local Share. 

Net Cost of project A–C ........................... 20,000 Net Project Cost—included in program of projects and in TEAM Budget. 

Note: The example above assumes a 50/50 match ratio for operating assistance. The Federal share may be greater if a State is eligible to 

use the sliding scale match ratios. 

D. Use of Private Capital as In-Kind Match 

for Subsidized Private Sector Routes or 

Service Contracted From Private Operator 

A contribution of unsubsidized private 

capital can also be used to provide in-kind 

match when Section 5311(f) funds are used 

to subsidize an unprofitable rural intercity 

bus route that might otherwise be 

discontinued by the private operator. Section 

5311(f) funds can be used to pay for the 

operating deficit and the local match can 

come from the capital costs contributed by 

the private operator. Alternatively, a State (or 

local transit agency) can contract with a 

private operator to provide rural intercity bus 

service, and pay for the operating deficit with 

Section 5311(f) funds, with the private 

operator providing in-kind match in the form 

of the value of the unsubsidized capital 

portion of the contracted service. 

E. Excess or Insufficient In-Kind Match 

If there is excess in-kind match available 

from the value of the capital costs, it cannot 

be used to increase the Federal share above 

the actual operating deficit of the project. In 

the simplified example above, if the capital 

costs of the connecting service were $12,000, 

the Federal share of the project provided in 

Section 5311(f) funds would still be $10,000 

because that is what is needed to pay the 

operating deficit of the feeder service. Only 

$10,000 of the capital costs are used for inkind match. 

On the other hand, if the value of the 

unsubsidized capital contribution does not 

provide sufficient in-kind match to equal the 

Section 5311(f) funds needed to cover the 

operating deficit, the State or local agency 

has to produce the difference in cash. In the 

simplified example above, if the capital costs 

of the unsubsidized service were only $8,000, 

the $10,000 operating deficit of the feeder 

service could be paid with $8,000 in Section 

5311(f) funds and $2,000 in cash from other 

sources. 

F. Period of Availability of the In-Kind Match 

Once included in an approved grant 

obligated within the two-year pilot period, 

the capital contribution described in the 

application may be used as in-kind match 

until the Federal share is fully expended. 

G. Documentation Required in State’s 

Application for Section 5311 

When applying to use the unsubsidized 

capital as in-kind match, the State must 

provide supplemental information with its 

Section 5311 grant application. 

1. For each Section 5311(f) project using 

the match, the State must provide a detailed 

description of the feeder service and the 

connecting service, identifying locations 

served by each, and the connections. Only 

those runs that actually connect with the 

feeder service can be used for match. For 

example, if the private operator makes four 

trips per day through point B but the feeder 

service only operates twice daily, only the 

capital costs of the two daily connecting trips 

can be used as in-kind match. 

2. Itemize the total and net costs of each 

segment used in the project description (for 

example A–B and B–C, by actual place 

names, and level of service.) The value of the 

in-kind match must be based on the 

documented fully allocated costs incurred by 

the private operator in providing the 

connecting service, with reasonable 

calculations by methods such as costs per 

mile, or costs per hour. Capital Cost of 

Contracting percentages may be used to 

determine the amount of fully allocated costs 

attributable to capital, unless the operator 

can provide documentation that the capital 

costs (including preventive maintenance) are 

higher. The detailed information may be 

presented in table form, as in the simplified 

example above. 

3. If the capital costs do not provide 

sufficient match for the entire operating 

deficit of the feeder service, additional cash 

match is required, and should be 

documented in the application. 

4. The application should include 

documentation that the private operator has 

consented to the arrangement, documented 

the costs of the private service being used for 

in-kind match, and acknowledged that the 

private service is part of the FTA project and 

thus is covered by the labor warranty and 

other Federal requirements. 

H. Regional Review and Processing of Grant 

Application 

When a State applies to use this source of 

in-kind match during the two-year pilot in 

FY 2007 or 2008, the FTA regional office will 

review the documentation to ensure that the 

project as defined is eligible for Section 

5311(f) assistance and that sufficient local 

match is provided by the in-kind capital 

contribution to match the operating 

assistance provided. 

I. Assessment of Pilot Project 

FTA invites States and industry to 

comment on the implementation of the pilot 

as it proceeds. Observations about any 

procedural issues and reflections on the 

impact of the pilot in increasing the rural 

intercity bus connections are welcome at any 

time. FTA particularly invites you to submit 

an assessment on the two-year pilot in July, 

2008, when FTA expects to consider whether 

to extend or terminate the pilot. 

Issued in Washington, DC, this 22nd day 

of February, 2007. 

James S. Simpson, 

Administrator, Federal Transit 

Administration. 

[FR Doc. E7–3452 Filed 2–27–07; 8:45 am] 

BILLING CODE 4910–57–P 


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