[Federal Register Volume 72, Number 60 (Thursday, March 29, 2007)]
[Notices]
[Pages 14851-14861]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-5734]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket No. FTA-2006-24037]


Elderly Individuals and Individuals With Disabilities, Job Access 
and Reverse Commute, and New Freedom Programs: Final Circulars

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Notice of Availability of Final Circulars.

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SUMMARY: The Federal Transit Administration (FTA) has placed in the 
docket and on its website final guidance in the form of circulars to 
assist grantees in implementing the Elderly Individuals and Individuals 
with Disabilities (Section 5310), Job Access and Reverse Commute 
(JARC), and New Freedom Programs.

DATES: Effective Date: The effective date of these circulars is: May 1, 
2007.

FOR FURTHER INFORMATION CONTACT: Henrika Buchanan-Smith or Bryna 
Helfer, Office of Program Management, Federal Transit Administration, 
400 Seventh Street SW., Room 9114, Washington, DC, 20590, phone: 202-
366-4020, fax: 202-366-7951, or e-mail, <a href="/cdn-cgi/l/email-protection#763e1318041f1d17583403151e171817185b251b1f021e3612190258111900"><span class="__cf_email__" data-cfemail="e0a8858e92898b81cea2958388818e818ecdb38d899488a0848f94ce878f96">[email protected]</span></a>; 
<a href="/cdn-cgi/l/email-protection#501222293e317e18353c36352210343f247e373f26"><span class="__cf_email__" data-cfemail="6220101b0c034c2a070e04071022060d164c050d14">[email protected]</span></a>; or Bonnie Graves, Office of Chief Counsel, 
Federal Transit Administration, 400 Seventh Street SW., Room 9316, 
Washington, DC, 20590, phone: 202-366-4011, fax: 202-366-3809, or e-
mail, <a href="/cdn-cgi/l/email-protection#90d2fffefef9f5bed7e2f1e6f5e3d0f4ffe4bef7ffe6"><span class="__cf_email__" data-cfemail="0f4d606161666a21487d6e796a7c4f6b607b21686079">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Availability of Final Circulars

    You may download the circulars from the Department's Docket 
Management System (http://dms.dot.gov) by entering docket number 24037 
in the search field, and then clicking on ``reverse order.'' The 
circulars are the most recently posted documents. You may also download 
an electronic copy of the circulars from FTA's Web site, at 
www.fta.dot.gov. Paper copies of the circulars may be obtained by 
calling FTA's Administrative Services Help Desk, at 202-366-4865.

Table of Contents

I. Overview
II. Chapter-by-Chapter Analysis
    A. Chapter I--Introduction and Background
    B. Chapter II--Program Overview
    C. Chapter III--General Program Information
    1. Elderly Individuals and Individuals with Disabilities 
(Section 5310)
    2. Job Access and Reverse Commute (JARC) and New Freedom
    D. Chapter IV--Program Development
    1. Elderly Individuals and Individuals with Disabilities 
(Section 5310)
    2. Job Access and Reverse Commute (JARC) and New Freedom
    E. Chapter V--Coordinated Planning
    F. Chapter VI--Program Management and Administrative 
Requirements
    G. Chapter VII--State and Program Management Plans
    H. Chapter VIII--Other Provisions
    I. Appendices

I. Overview

    This notice provides summaries of the Section 5310, JARC, and New 
Freedom program circulars, and addresses comments received in response 
to the September 6, 2006, Federal Register notice (71 FR 52610). These 
programs are affected by the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users (SAFETEA-LU, Pub. L. 109-
59), signed into law on August 10, 2005.
    The Section 5310 program provides funding, allocated by a formula, 
to States for capital projects to assist in meeting the transportation 
needs of older adults and persons with disabilities. The States 
administer this program. FTA is updating the existing Section 5310 
circular, last revised in 1998, to reflect changes in the law.
    The JARC program was authorized as a discretionary program under 
the Transportation Equity Act for the 21st Century (TEA-21, Pub. L. 
105-178, June 9, 1998), changed to a formula program under SAFETEA-LU 
and codified at 49 U.S.C. 5316. The JARC program provides formula 
funding to States and designated recipients to support the development 
and maintenance of job access projects designed to transport welfare 
recipients and eligible low-income individuals to and from jobs and 
activities related to their employment. The JARC program also supports 
reverse commute projects designed to transport residents of urbanized 
areas and other than urbanized areas to suburban employment 
opportunities. FTA is

[[Page 14852]]

issuing a new circular for the JARC program.
    SAFETEA-LU established the New Freedom Program under 49 U.S.C. 
5317. The purpose of the New Freedom program is to provide new public 
transportation services and public transportation alternatives beyond 
those required by the Americans with Disabilities Act of 1990 (42 
U.S.C. 12101 et seq.) that assist individuals with disabilities with 
transportation, including transportation to and from jobs and 
employment support services. FTA is issuing a new circular for the New 
Freedom program.
    FTA conducted extensive outreach to develop these final circulars. 
First, FTA held listening sessions in Washington, DC, in September 
2005. Then, FTA requested comments related to the Section 5310, JARC, 
and New Freedom programs in a Federal Register notice published 
November 30, 2005, (70 FR 71950), and held listening sessions in five 
cities around the country. Subsequent to that notice, FTA published in 
the Federal Register on March 15, 2006 (71 FR 13456), proposed 
strategies for implementing these programs and requested comments on 
those strategies. In addition, FTA conducted an all-day public meeting 
on March 23, 2006, and held a number of meetings and teleconferences 
with stakeholders. To ensure that we heard from a broad range of 
stakeholders and interested parties, we extended the comment period of 
the March 15, 2006, Federal Register notice through May 22, 2006. FTA 
received more than 200 comments from State departments of 
transportation (DOTs), trade associations, public and private providers 
of transportation services, metropolitan planning organizations (MPOs), 
individuals, and advocates. Finally, we published the proposed 
circulars on our website (www.fta.dot.gov) and a Federal Register 
notice (71 FR 52610) on September 6, 2006, seeking public comment on 
the proposed circulars. FTA received an additional 70 comments in 
response to the September 6, 2006, notice and proposed circulars.
    This document does not include the final circulars; electronic 
versions of the circulars may be found in the docket, at http://dms.dot.gov, docket number FTA-2006-24037, or on FTA's Web site, at 
www.fta.dot.gov. Paper copies of the circulars may be obtained by 
contacting FTA's Administrative Services Help Desk, at 202-366-4865.
    FTA recognizes that implementation of the Section 5310, JARC and NF 
programs is still in the early stages. We expect to continue to learn 
from our experience in administering the grants and from grantees' 
experiences in implementing the provisions at the State and local 
level. FTA will be monitoring the implementation of the programs, and 
we continue to be open to comments and suggestions. We value input from 
grantees and others as we put these programs into action, and we urge 
interested parties to communicate with FTA regional offices regarding 
successes, questions, and concerns that may arise.

Effect of Interim Guidance

    On October 31, 2006, FTA issued a Federal Register notice (71 FR 
63838) stating that the proposed circulars, developed after extensive 
notice and comment, should be used as interim guidance for grant 
applications filed in FY 2007 to the extent possible. In the notice, 
FTA acknowledged that some grantees may have proceeded with the interim 
guidance published on March 15, 2006, and noted that grantees would be 
``held harmless'' for applications submitted in FY 2007 ``based on 
coordinated planning or competitive selection processes substantially 
complete before the issuance of final guidance.'' The final circulars 
will take effect May 1, 2007; however, this ``hold harmless'' provision 
will continue to apply to FY 2007 grant applications for grantees who 
have substantially completed their planning or competitive selection 
processes using earlier guidance issued by FTA.
    Three commenters requested that FTA allow the same flexibility in 
FY 2008 for developing the coordinated plan that we allowed in the 
interim guidance for FY 2007; namely, that planning agencies simply 
make ``good faith efforts'' to meet the planning requirements. The 
beginning of FY 2008 is a full two years after the passage of SAFETEA-
LU, and FTA provided a phased-in approach for FY 2007. Because the law 
requires a coordinated plan, all grants obligated in FY 2008 and beyond 
must be in full compliance with the requirements of these circulars.

II. Chapter-by-Chapter Analysis

    All three circulars generally follow the same format. Where 
possible, this notice discusses the chapters in general terms. Where 
the chapters vary significantly, as in Chapters III and IV, the 
discussion is specific to each program. This section briefly describes 
the content of each chapter and addresses public comments received in 
response to the September 6, 2006, notice. In addition to making 
changes to the circulars in response to public comments, FTA has edited 
for clarity and consistency among the circulars.
    One commenter suggested that FTA develop one coordinated circular 
for Section 5310, JARC, and New Freedom, especially since much of the 
material in the circulars is the same, and only a couple of chapters 
have program-specific information. FTA determined that many recipients 
would only receive funds from one of the three programs, and did not 
want to burden those recipients with unnecessary information; 
therefore, we developed three distinct circulars, one for each program.

A. Chapter I--Introduction and Background

    Chapter I is an introductory chapter in all three circulars. This 
chapter covers general information about FTA and how to contact us, 
provides a brief review of the authorizing legislation for the specific 
program (i.e., Section 5310, JARC, or New Freedom), provides 
information about Grants.gov, includes definitions applicable to the 
specific program, and provides a brief program history.
    Several commenters had suggestions for additional definitions of 
terms. Where we agreed with those suggestions, we have incorporated 
them into the circulars. For example, we added a definition for 
``elderly individuals'' to the Section 5310 and New Freedom circulars, 
and we added a definition for ``chief executive officer of a State'' to 
all three circulars. We did not, however, change the definitions of 
``individual with a disability,'' ``eligible low-income individual,'' 
or ``welfare recipient.'' FTA acknowledges that there are many 
definitions for these terms. Since the circulars were developed under 
the authority of Federal transit law, we have decided to use the 
definitions in the transit law--49 U.S.C. Chapter 53. We also did not 
include definitions for ``unavailable, insufficient, or inappropriate'' 
public transportation services in the Section 5310 circular, as we 
believe the dictionary definitions of those terms are sufficient. We 
did not add, in the definition of coordinated plan, that passengers 
with disabilities be a part of the planning process. We have described 
the requirements for outreach and stakeholder input in Chapter V. 
Further, we declined to include local Workforce Investment Boards in 
the definition of human service transportation (as we did not include 
any specific agencies in that definition), but we did reference the 
Board in Chapter V in all three circulars.

[[Page 14853]]

    One commenter asked FTA to identify the source data for ``welfare 
recipients'' for apportionment of JARC funds. The Census identifies 
persons whose income is at 150 percent of poverty level and below--this 
includes welfare recipients. The U.S. Department of Health and Human 
Services data on welfare recipients are not disaggregated in such a way 
that FTA could use the data for apportionment purposes; therefore, we 
use Census data for persons living at 150 percent of poverty or below.

B. Chapter II--Program Overview

    Chapter II provides more detail about the programs. This chapter 
starts with the statutory authority for the specific program, including 
how authorized funds are apportioned. One commenter suggested that the 
amounts authorized for fiscal years 2006 through 2009 should not be 
part of the circulars, as the circulars are expected to be in effect 
past the authorization period of SAFETEA-LU. We agree, and have removed 
the authorized amounts, but retained the information regarding how the 
funds are apportioned. The chapter then discusses the goals of the 
program. We have added the performance measures for each program to 
this chapter, and, in response to comments, clarified that the 
indicators specified are targeted to capture program information on a 
National level--these measures will not be used to assess individual 
grants.
    Next is a brief description of the State or recipient's role and 
FTA's role in program administration, followed by an overview of how 
the specific program relates to other FTA programs, and a description 
of coordination with other Federal programs through the Federal 
Interagency Coordinating Council on Access and Mobility (CCAM). The 
section on coordination has been updated to reflect CCAM's recent 
adoption of policies on coordinated planning and vehicle sharing. In 
addition, in response to a commenter, the New Freedom circular contains 
a reference to joint guidance on funding resources regarding access to 
work, which was originally only in the proposed JARC circular.
    Chapter II is an ``overview'' chapter that contains valuable 
information but not in the detail that later chapters cover. Some 
commenters requested that more information be included in this chapter; 
however, we believe it is more appropriate to include detail in later 
chapters. We have, however, provided more references to later chapters 
to direct readers toward the detailed information they are seeking.

C. Chapter III--General Program Information

    Due to the differences in program requirements, the discussion of 
this chapter is divided by program.
1. Elderly Individuals and Individuals With Disabilities (Section 5310)
    The final Section 5310 circular hereby supersedes the Section 5310 
circular last revised in 1998 (FTA Circular 9070.1E), and incorporates 
changes in transit law. Significantly, Section 5310, as amended by 
SAFETEA-LU, permits the use of up to 10 percent of funding for expenses 
related to program administration, planning, and technical assistance 
(consistent with FTA's longstanding administrative practice). The law 
increases coordination requirements and allows the local funding share 
to include amounts available for transportation from other non-DOT 
Federal agencies, as well as Federal lands highway funding. SAFETEA-LU 
also establishes a pilot program that allows seven States to use up to 
33 percent of their Section 5310 funds for operating expenses. One 
commenter requested that the pilot program be referenced in the 
circular; FTA issued general guidance for the pilot program in a 
Federal Register notice (70 FR 69201, Nov. 14, 2005) and announced the 
States selected to participate in a later Federal Register notice (71 
FR 59101, Feb. 3, 2006). Since the pilot program has its own guidance, 
FTA did not include any specific guidance regarding this program in the 
final circular, however, we did make note of the pilot program in 
Chapter III.
    Chapter III addresses State agency designation, apportionment of 
Section 5310 funds, when the funds are available to the States, under 
what circumstances funds may be transferred, consolidation of grants to 
insular areas, who is an eligible subrecipient, administrative 
expenses, eligible capital expenses, and Federal/local match 
requirements. This information compares to information found in Chapter 
II of the 1998 circular.
    FTA made two changes to this chapter in response to comments. 
First, in paragraph 7, ``State Administrative Expenses,'' we added a 
provision allowing the administrative funds for Section 5310, JARC, 
and/or New Freedom to be combined to support activities such as 
coordinated planning that are common to all three programs. In the 
September 6, 2006, notice, we stated this was allowable, but we did not 
include this information in the proposed circular. Second, in paragraph 
9, ``Federal/Local Matching Requirements'' we removed the reference to 
specific Federal programs and instead used generic terms to describe 
the types of programs that are a potential source for local match, 
including employment, training, aging, medical, community services, and 
rehabilitation services.
    One commenter requested that the sliding scale table for Federal 
match, which addresses the ``Sliding Scale Rate for Transit Capital 
Grants'' include the ``increased Federal share for operating 
assistance'' for States participating in the Section 5310 pilot 
program. Section 3012 of SAFETEA-LU, which established the pilot 
program, caps the Federal share for operating expenses for this program 
at 50 percent (see Section 3012(b)(3)), so the sliding scale rate does 
not apply to the pilot program. As stated previously, FTA issued 
general guidance for the pilot program in a Federal Register notice (70 
FR 69201, Nov. 14, 2005) and announced the States selected to 
participate in a later Federal Register notice (71 FR 59101, Feb. 3, 
2006). Individuals interested in this program should refer to those 
documents.
    Most comments on this chapter related to eligible activities. FTA 
proposed that eligible capital expenses would remain substantially the 
same as in the 1998 circular, with the addition of mobility management 
activities as eligible expenses. We pointed out in the September 6, 
2006, Federal Register notice and the proposed circular that the list 
of eligible activities is illustrative and not exhaustive. Two 
commenters wanted to see mention of contracted service, or purchase-of-
service agreements as an eligible capital expense. This item is in 
paragraph 8(m). One commenter asserted that any Intelligent 
Transportation Service (ITS) project should be eligible under all three 
programs. ITS is mentioned in paragraph 8(o), and is further identified 
as a project that is part of mobility management under paragraph 
8(p)(7). One commenter asked FTA to reconsider funding the coordinated 
plan under mobility management. As we explained in the September 6, 
2006, notice, mobility management is an eligible expense and includes 
project planning activities. However, any planning project must be 
derived from a coordinated plan. Therefore, mobility management funds 
may not be used to develop the coordinated plan. Mobility management 
activities are a capital expense funded at an 80/20 Federal/local 
funding share pursuant to 49 U.S.C 5310(c).

[[Page 14854]]

    One commenter explored the differences among the Section 5310, 
JARC, and New Freedom programs, and seemed to disagree with the fact 
that States are not required to competitively select Section 5310 
programs. The commenter also seemed to imply that having Section 5310 
projects included in the Statewide Transportation Improvement Program 
(STIP) and the Transportation Improvement Program (TIP) was a new 
requirement. Under Section 5310, States allocate funds to private non-
profit organizations or governmental authorities. Most States choose to 
use a competitive process, and FTA encourages the practice, but the law 
does not require competitive selection for 5310 as it does for JARC and 
New Freedom. All grant funds are subject to planning requirements; 
Section 5310 projects have always had to be part of the STIP and TIP.
    One commenter wanted to know if States could ``pool'' their JARC, 
New Freedom, and Section 5310 funds into a combined set of funds, 
provided that they could show that the priorities of all programs are 
being met. The transfer provisions in SAFETEA-LU do not permit such a 
pooling of funds; funds may not be ``flexed'' from one program to 
another. One commenter asserted that the authority granted in SAFETEA-
LU to designated urbanized area recipients to develop their own 
competitive selection criteria for apportioned Section 5316 (JARC) and 
5317 (New Freedom) funds could be extended to the Section 5310 program 
if States were permitted to sub-apportion some of their 5310 funds to 
the designated recipient. FTA notes again that while most States 
conduct a competitive selection process for Section 5310, there is no 
statutory competitive selection requirement for Section 5310. Second, 
States may allocate funds to government authorities (e.g., designated 
recipients) only when the government authority is approved by the State 
to coordinate services for elderly individuals and individuals with 
disabilities, or if the authority certifies that there are no non-
profit organizations readily available to provide the special services, 
which is unlikely in a large urbanized area.
2. Job Access and Reverse Commute (JARC) and New Freedom
    The JARC and New Freedom programs have similar statutory 
requirements, so Chapter III, with the exception of Eligible 
Activities, is the same or similar for each circular. This chapter 
covers recipient designation, including designation in urbanized areas 
where there are multiple recipients; the role of the designated 
recipient; eligible direct recipients and subrecipients; apportionment, 
availability and transfer of funds; consolidation of grants to insular 
areas; recipient administrative expenses; eligible activities; and 
Federal/local matching requirements.

a. Recipient Designation

    FTA proposed, and adopts in the final circulars, that the 
designated recipient for JARC and/or New Freedom in urbanized areas 
over 200,000 in population may be the same as the designated recipient 
for Section 5307 (Urbanized Area Formula Grant Program) funds; however, 
it does not have to be the same designated recipient. The MPO, State, 
or another public agency may be a preferred choice based on local 
circumstances. The designation of a recipient shall be made by the 
governor in consultation with responsible local officials and publicly 
owned operators of public transportation, as required in 49 U.S.C. 
5307(a)(2). Since the State is a public entity, a single State agency 
could be designated as the recipient of JARC and/or New Freedom funds 
apportioned to large urbanized areas. The recipient for JARC and New 
Freedom funds will apply to FTA for these funds on behalf of 
subrecipients within the recipient's area. Regardless of whether the 
JARC and New Freedom recipient is the same as or different from the 
Section 5307 designated recipient, the governor shall issue new 
designation of JARC and New Freedom recipient letters. Designations 
remain in effect until changed by the governor by official notice of 
redesignation to the appropriate FTA Regional Administrator.
    In urbanized areas with populations less than 200,000 and in other 
than urbanized areas, the State is the designated recipient for JARC 
and New Freedom funds. The governor designates a State agency 
responsible for administering the funds and notifies the appropriate 
FTA regional office in writing of that designation. The governor may 
designate the State agency receiving Other Than Urbanized Area formula 
funds (Section 5311) and/or Section 5310 funds to be the JARC and/or 
New Freedom recipient, or the governor may designate a different 
agency.
    FTA encourages the designation of a single designated recipient for 
each urbanized area over 200,000 in population, in order to streamline 
the administration of the program and foster coordination although some 
commenters asserted that a single designated recipient should be a 
requirement. However, FTA respects the complexity of geographical and 
institutional histories of different areas, so this remains a local 
decision. Further, nothing precludes the designation of multiple 
designated recipients. When more than one recipient is designated for a 
single large urbanized area, the designated recipients must agree on 
how to divide the single apportionment to the urbanized area and notify 
FTA annually of the division and the geographic area each recipient 
will be responsible for managing. For multi-State urbanized areas of 
less than 200,000 in population, the designated recipient for each 
State is responsible for that State's portion.
    In response to comments, FTA made two changes in order to clarify 
the responsibilities of designated recipients and direct recipients. 
First, we note that in some large urbanized areas, the competitive 
selection process may result in projects being awarded to a transit 
agency that is not the designated recipient for the JARC or New Freedom 
programs but is a Section 5307 designated recipient. If this happens 
and the 5307 designated recipient wants to apply directly to FTA for a 
JARC or New Freedom grant, the JARC or New Freedom designated recipient 
must enter into a supplemental agreement with the Section 5307 
recipient. The supplemental agreement will release the designated 
recipient from any liability under the grant agreement.
    Second, we note that if a State transfers JARC or New Freedom funds 
to a Section 5307 recipient in a small urbanized area (population 
between 50,000 and 200,000) for administration of a competitively 
selected project, the transfer of funds also transfers the oversight 
responsibilities from the State to the grant recipient. In this 
situation, the State will only be responsible for the program 
requirements (e.g., coordinated planning, competitive selection) and 
data collection for annual reporting purposes. When the funds are 
transferred to the 5307 direct recipient, the 5307 direct recipient 
could apply to FTA directly for the funds; however, the application 
must be submitted as a separate grant. For oversight purposes, FTA will 
include the JARC/New Freedom projects in the triennial review of the 
5307 direct recipient.
    One commenter encouraged FTA to accept Section 5307 designation for 
the JARC and New Freedom programs. These are new programs, and the 
recipients must go through the process of being designated by the 
Governor. If a State has a ``blanket certification'' that the State is 
the designated recipient for all FTA programs, the State simply needs 
an amendment to the certification

[[Page 14855]]

or an affirmation that the State or other designated recipient will be 
the designated recipient for all FTA programs, including JARC and New 
Freedom.
    Some commenters expressed concern about the ``administrative 
burden'' associated with a designated recipient's oversight 
responsibilities of subrecipients, some of which may be private 
operators. One commenter suggested that the burden of certifying 
compliance with Federal requirements could discourage selection of non-
governmental entities for funding, and another suggested that private 
operators selected for funding should report directly to FTA, and not 
to the designated recipient. In response, FTA notes that the 
competitive selection process must be open and fair--criteria set by 
the designated recipient cannot discourage private participation. In 
addition, oversight of subrecipients is the responsibility of the 
designated recipient.

b. Apportionment, Availability and Transfer of Funds

    FTA did not make any substantive changes to these sections of the 
circulars. One commenter wanted to confirm that recipients must 
obligate apportioned funds within the year of apportionment plus two 
years, and once obligated, they may be spent sometime after that period 
of availability. That is correct; only if funds remain unobligated 
after the period of availability will they lapse and be re-apportioned 
by FTA. This includes funds that have been administratively transferred 
to a Section 5307 recipient--the funds must be obligated within the 
period of availability or they will be re-apportioned by FTA. One 
commenter suggested that if JARC funds remain unobligated due to an 
absence of applications or insufficient local matching funds, States 
should have the flexibility to transfer those unobligated JARC funds to 
rural or large urbanized areas, if unmet needs exist in those areas. 
Another commenter wanted to know if there are any mechanisms to 
transfer JARC or New Freedom funds between urbanized and nonurbanized 
areas, or between urbanized areas. As stated in 49 U.S.C. 5316(c)(3), a 
State may use JARC funds apportioned for small urbanized and rural 
areas for projects serving either of these areas of the State, if the 
State's chief executive officer certifies that all of the objectives of 
JARC are being met in the specified areas. Funds may also be 
transferred for use anywhere in the State including large urbanized 
areas, if the State has established a statewide program for meeting 
JARC program goals. There is no authority to transfer funds apportioned 
to large urbanized areas to small urbanized or rural areas.
    New Freedom funds cannot be transferred from one population area 
(such as rural) to another population area (such as small urbanized) 
within a State. While such a transfer provision is statutorily 
permitted under the JARC program, this provision is not included in the 
New Freedom program. Therefore, FTA cannot allow this transfer of 
funds. States may, however, transfer JARC and New Freedom funds to 
Section 5307 or Section 5311(c) to ease program administration, as long 
as the transferred funds are used for competitively selected JARC or 
New Freedom projects, respectively. Transfer requests must be submitted 
to the appropriate FTA Regional Administrator in writing. One commenter 
suggested that FTA permit transfers of funds between the JARC and New 
Freedom programs. The law does not permit such a transfer; funds must 
be used for the program for which they were apportioned except in 
insular areas.

c. Recipient Expenses (10 Percent) for Administration, Planning, and 
Technical Assistance

    Up to 10 percent of program funds are available for the 
administration, planning, and technical assistance of Section 5310, 
JARC, and New Freedom programs. These funds may be used directly by the 
designated recipient or they may be passed through to subrecipients for 
these purposes. For example, the designated recipient may award grants 
to local areas to support the development of the coordinated plan. The 
competitive selection process is part of ``administering'' the programs 
and, therefore, these funds may be used to conduct the competitive 
selection process.
    Several commenters expressed concern that 10 percent of the amount 
apportioned may not be sufficient to administer the program. FTA notes 
that there is no local match requirement for this funding, and we 
revised the final circulars to state that the administrative funding 
available under Section 5310, JARC, and New Freedom may be combined in 
order to develop a single coordinated plan to meet the needs of persons 
with disabilities, older adults, and low-income individuals. Further, 
as we stated in the September 6, 2006, notice, FTA treats the 
limitation on administrative funds as applicable to funds apportioned 
to recipients over time, not necessarily to the apportionment for a 
particular fiscal year. A recipient may accumulate the ``entitlement'' 
to administrative funds for the year of apportionment plus two years to 
augment the funds available for a special administrative need in a 
subsequent year.
    One commenter asked FTA to reconsider funding the coordinated plan 
under mobility management. As we explained in the September 6, 2006, 
notice, (and noted in the Section 5310 discussion of eligible 
activities, above) mobility management is an eligible expense and 
includes project planning activities. However, any planning project 
must be derived from a coordinated plan. Therefore, mobility management 
funds may not be used to develop the coordinated plan. Mobility 
management activities are funded at an 80/20 Federal/local ratio 
pursuant to the applicable program share requirements under Title 49 
U.S.C. Chapter 53.

d. JARC Eligible Activities

    Section 5316, as amended by SAFETEA-LU, requires that JARC projects 
selected for funding be derived from a coordinated plan (see Chapter V) 
and that grants will be awarded on a competitive basis (see Chapter 
IV). Funds are available for capital, planning, and operating expenses 
that support the development and maintenance of transportation services 
designed to transport low-income individuals to and from jobs and 
activities related to their employment, and for reverse commute 
projects. The list of eligible projects included in the final circular 
is consistent with the use of funds described in FTA's April 8, 2002, 
Federal Register notice for JARC Program Grants (67 FR 16790). As 
requested by commenters, this list of eligible activities is 
illustrative, not exhaustive. In the final circular, we added reverse 
commute activities to the list of eligible activities. That is the only 
change we made to JARC eligible activities from the proposed circular 
to the final circular.
    Commenters generally disagreed with FTA's proposal that transit 
passes should not be an eligible expense under the JARC program. In 
addition to comments to the docket, on February 4, 2007, FTA received a 
letter from a trade association expressing their support for funding 
transit passes through the JARC program. FTA posted this letter to the 
docket. FTA strongly supports the implementation of transit pass 
programs and believes that such activities offer low-income persons 
affordable transportation opportunities, particularly during periods 
when transitioning from public assistance to employment. JARC 
legislation does

[[Page 14856]]

explicitly provide for the promotion of such transit pass programs for 
low-income persons as an eligible JARC expense, but the statute does 
not expressly provide language for the actual funding of transit 
passes. The JARC program instead concentrates on building additional 
transportation capacity to connect low-income persons to jobs and 
support services and to provide connections to suburban employment 
sites.
    FTA notes that many other Federal human service partner programs 
are available to support customer fares on existing transit services. 
Examples include the Temporary Assistance for Needy Families (TANF) 
program, Workforce Investment Act funds, and other Federal, state, and 
local human services programs that assist individuals. These 
opportunities may be pursued within the new locally developed 
coordinated public transit-human services planning process where many 
of these agencies and organizations will be participating stakeholders. 
Further, the Internal Revenue Code at 26 U.S.C. 132(f) allows employers 
to pay for transit passes and the employee does not pay taxes on this 
transportation fringe benefit. Promotion of transit pass programs 
remains an eligible expense.
    Several commenters expressed an interest in FTA approving all car 
ownership program models as eligible JARC projects, including car 
ownership programs that are not loan programs, such as rehabilitation 
or donation programs. The commenters requested that FTA remove the 
shared ride participation requirement, and remove the requirement that 
the agency administering the program hold the lien on the title of the 
vehicle, since the lending institution usually holds title.
    FTA appreciates the interest of commenters in car ownership 
programs. In keeping with the original April 8, 2002, Federal Register 
notice, FTA has decided to continue funding auto loan programs but not 
rehabilitation or donation programs. In addition, FTA will continue the 
shared-ride requirement, which maximizes the benefits of the Federal 
investment to low-income populations. As for the lien on the title of 
the vehicle, the agency administering the loan program can often be a 
lien holder, in addition to the lending institution. FTA believes this 
is the best way to ensure satisfactory continuing control, which is a 
requirement under Section 5307.
    One commenter asserted they should be able to prioritize existing 
JARC projects for funding. FTA believes this is a local decision made 
through the planning process. Some existing JARC projects will be 
selected for funding while others may not, especially if new projects 
are considered more cost-effective and/or better serve a need of a 
community.

e. New Freedom Eligible Activities

    Section 5317, as amended by SAFETEA-LU, requires that New Freedom 
projects selected for funding be derived from a coordinated plan (see 
Chapter V) and that grants will be awarded on a competitive basis (see 
Chapter IV). Funds are available for capital, planning, and operating 
expenses that support new public transportation services and new public 
transportation alternatives beyond those required by the Americans with 
Disabilities Act (ADA), that assist individuals with disabilities with 
transportation, including transportation to and from jobs and 
employment support services. As requested by commenters, the list of 
eligible activities is illustrative, not exhaustive.
    FTA proposed, in our September 6, 2006, Federal Register notice, 
that ``new'' service is any service or activity that was not 
operational before August 10, 2005, (the date of passage of SAFETEA-LU) 
and did not have an identified funding source as of August 10, 2005, as 
evidenced by inclusion in the Transportation Improvement Plan (TIP) or 
the State Transportation Improvement Plan (STIP). In other words, if 
not for the New Freedom program, these projects would not be considered 
for funding and proposed service enhancements would not be available 
for individuals with disabilities. Some commenters were concerned that 
this definition of ``new'' would eliminate projects that were in place 
before August 10, 2005, but terminated due to a lack of funding prior 
to August 10, 2005. To address this concern, we have changed the 
wording to reflect that projects not operational on August 10, 2005, 
and without a dedicated funding source as evidenced by inclusion in the 
TIP or STIP at that time are considered ``new.'' This will allow 
projects discontinued prior to August 10, 2005, to be reinstated if the 
coordinated planning process determines the service is needed. 
Inclusion of projects in the metropolitan or statewide long-range 
transportation plans does not constitute a funding commitment. However, 
once a project is included in the TIP/STIP, it has an identified 
funding source. Therefore, projects identified in a long-range 
metropolitan or statewide plan may be eligible for New Freedom funding, 
but not projects in the four-year program period of the TIP/STIP.
    One commenter asked how long projects could be considered new; in 
other words, if a multi-year project is successful, does it lose its 
``new'' status at some point? In response, eligible projects funded by 
New Freedom may continue to be eligible for New Freedom funding 
indefinitely as long as they remain part of the coordinated plan.
    Many commenters objected to FTA's interpretation that New Freedom 
projects are those that are both ``new'' and ``beyond the ADA,'' while 
others were in favor of the policy position set forth in the proposed 
circular. In addition, FTA received feedback from both Administration 
and Congressional offices in support of the proposed policy that New 
Freedom projects be ``new public transportation services beyond those 
required by the ADA'' and ``new public transportation alternatives 
beyond those required by the ADA.'' Therefore, we have not changed the 
description of eligible activities in the final circular. The only 
change we made in eligible activities was to clarify that Intelligent 
Transportation Services is an eligible project, and the incremental 
cost (if any) of changing the basic mode of service of an ADA 
paratransit system from curb-to-curb to door-to-door is an eligible 
project.
    One commenter asserted that, in rural areas, it was difficult to 
conceptualize any new public transportation that is ``beyond the ADA.'' 
The commenter sought more examples of eligible rural New Freedom public 
transportation projects where the service in those areas is demand-
responsive. One commenter wanted to know if demand-responsive or flex 
route services would be eligible for New Freedom funding, or if only 
fixed route and ADA paratransit were eligible. FTA acknowledges there 
are limits to the use of New Freedom funds in rural systems that 
operate only demand-response service; however, the substantial increase 
in funding to the Section 5311 program under SAFETEA-LU should be 
sufficient to cover many of the needs of these communities. Certainly 
vehicle modifications that are beyond the ADA, such as equipment to 
accommodate over-sized wheelchairs, or increased securement locations 
on vehicles, would be an eligible New Freedom expense on demand-
response vehicles as well as other public transportation vehicles. 
Travel training and mobility management activities may be valuable 
public transportation activities in rural areas, as would the addition 
of new feeder service to outlying transit stations for which ADA 
complementary paratransit is not

[[Page 14857]]

required, such as commuter rail stations, express or commuter bus 
service, or an intercity bus stop or rail station. In addition, 
alternatives to public transportation such as accessible taxis and 
volunteer driver programs can be invaluable to rural residents. FTA 
encourages rural operators (as well as urbanized area operators) to use 
the planning process to create innovative solutions to meet the needs 
of individuals with disabilities in their communities.
    One commenter asserted that the current U.S. DOT ADA proposed 
rulemaking (71 FR 9761, Feb. 27, 2006) introducing ``reasonable 
modification'' of policies and practices will essentially nullify the 
New Freedom program as it will be difficult for any service to be 
beyond the ADA. FTA disagrees with this assertion. As we understand the 
proposed rulemaking, it would call on transportation providers to make 
exceptions to otherwise appropriate general policies and practices on a 
case-by-case basis where needed to make service available to a 
particular individual. The purpose of New Freedom, on the other hand, 
is to enhance the availability of transportation services to persons 
with disabilities in a community.
    One commenter asserted that the ADA regulations allow same-day 
service for ADA paratransit but do not require it, and similarly, allow 
door-to-door service but do not require it. The commenter asked why the 
implementation of same day service would be considered an eligible New 
Freedom project but door-to-door service would not. As we stated in the 
September 6, 2006, notice, the ADA regulation requires ``origin-to-
destination'' service, and U.S. DOT guidance issued on September 1, 
2005, reiterates the ``origin-to-destination'' language and notes that, 
``service may need to be provided to some individuals, or at some 
locations, in a way that goes beyond curb-to-curb service.'' The 
difference is that the provision of door-to-door service as a 
reasonable modification to make service possible to a particular 
individual in a system that otherwise provides curb-to-curb service may 
allow someone to use the service who otherwise could not access ADA 
paratransit at all. Same day service is an enhancement that makes the 
system more convenient and easier to use for all passengers.
    FTA is persuaded, however, that the incremental cost increase (if 
any) of changing the basic mode of an operator's entire ADA paratransit 
service from curb-to-curb to door-to-door could be considered eligible 
for New Freedom funding in the same manner as same-day service, 
inasmuch as the Department's ADA regulations and related guidance do 
not specify a basic mode of service beyond origin-to-destination. 
Therefore, if a change in mode of service from curb-to-curb to door-to-
door is new, and is part of the coordinated plan, the incremental cost 
increase (if any)--and only the incremental cost increase--is an 
eligible expense. FTA has modified the eligible project list 
accordingly. The availability of New Freedom funds for this purpose 
does not imply that any transit system must change its service to door-
to-door; it is simply one option among many possible projects that may 
be funded with New Freedom funds if it is part of the coordinated plan. 
A system that maintains a general curb-to-curb policy may not use New 
Freedom funds to provide a ``reasonable modification'' to the general 
policy of curb-to-curb to provide door-to-door service to individuals 
on a case-by-case basis.
    Two commenters suggested that ``travel training'' should be 
included as an eligible project under mobility management, and 
therefore eligible for funding as a capital project. Travel training is 
listed as an eligible project, both independently and as part of 
mobility management. Travel training is eligible for up to an 80 
percent Federal match.

f. Federal/Local Match Requirements

    A grant for a capital project under the JARC and New Freedom 
programs may not exceed 80 percent of the net cost of the project. A 
grant for operating costs under these programs may not exceed 50 
percent of the net operating costs of the project. One commenter 
expressed concern that a 50 percent match for operating expenses for 
New Freedom may prove to be too high for smaller organizations; 
however, these limits are set by law. (See 49 U.S.C. 5316(h) and 
5317(g)). Finally, a grant for administrative expenses incurred by 
these programs (up to 10 percent of the annual apportionment), may be 
fully funded by FTA. The circular lists the potential sources of local 
funding match, including the types of other Federal programs that 
provide funding for transportation.
    One commenter noted that the Section 5310 and Section 5311 
circulars allow local match to come from DOT's Federal lands highways 
program, and suggested that Federal lands highways funds be available 
as local match for JARC and New Freedom, as well. The law specifically 
permits Federal lands highways funds to be used as local match for 
Sections 5310 and 5311; however, this same provision is not in the JARC 
or New Freedom authority. Therefore, Federal lands highways funds may 
not be used as local match for the JARC and New Freedom programs.
    One commenter asserted that if there are other Federal funding 
sources that can be used as local match for the JARC program, the 
circular should list the criteria which would qualify agencies to 
receive funding from these sources. Federal programs supporting human 
service transportation are listed on the United We Ride Web site: 
www.unitedweride.gov. We have included this link in the final circulars 
in the discussion of local match.

D. Chapter IV--Program Development

    Due to the differences in program requirements, the discussion of 
this chapter is divided by program.
1. Elderly Individuals and Individuals With Disabilities (Section 5310)
    Chapter IV provides an overview of planning requirements (described 
in further detail in Chapter V); describes the program of projects 
(POP), including the approval of and revisions to the POP; and 
describes pre-award authority, labor protections, and when public 
hearings are required. This information compares to information found 
in Chapter III of the 1998 Section 5310 circular (FTA C 9070.1E).
    FTA proposed and adopted four changes to this chapter. First, the 
planning requirements now reference the coordinated plan required under 
SAFETEA-LU. Second, the 1998 circular states that grants are awarded on 
a quarterly release cycle; the new circular reflects FTA's current 
commitment to promptly process grants upon receipt of a complete and 
acceptable grant application. Third, under ``Revisions to Program of 
Projects,'' FTA included a new paragraph for when grant revisions need 
to be made in FTA's Transportation Electronic Award and Management 
(TEAM) system. And fourth, the ``Public Hearing'' section clarifies and 
provides the statutory authority regarding public hearing requirements.
    Two commenters suggested that contact information for subrecipients 
should be added to the list of information that FTA receives regarding 
the POP, including the specific geographical area served. As a result 
of the Federal Funding Accountability and Transparency Act of 2006 
(Pub. L. 109-282, Sept. 26, 2006), all Federal agencies are required to 
publish to a public Web site information regarding recipients of 
Federal grants, contracts, and other

[[Page 14858]]

forms of financial assistance equal to or greater than $25,000. The 
Office of Management and Budget (OMB) and U.S. DOT will be developing 
criteria to allow FTA to report on grants awarded to subrecipients. To 
prepare for this new government-wide requirement, FTA is adding the 
location of the subrecipient (city, State and Congressional district) 
and primary location of project performance under the award to the 
subrecipient information for all three programs. Specific contact 
information (i.e., addresses, phone numbers, e-mail addresses) will not 
be included, but the name and location of the subrecipient will be, 
thus allowing interested parties to find contact information for 
subrecipients.
2. Job Access and Reverse Commute (JARC) and New Freedom
    The JARC and New Freedom programs have the same statutory 
requirements for the areas covered by this chapter, so Chapter IV is 
the same for both circulars. This chapter provides a summary of the 
planning and coordination requirements (described in further detail in 
Chapter V); describes the competitive selection process and what 
constitutes a fair and equitable distribution of funds; describes the 
program of projects (POP), including approval of and revisions to the 
POP; and addresses certifications and assurances and pre-award 
authority.
    Chapter IV includes guidance on how a designated recipient should 
conduct the competitive selection process. Some commenters continue to 
have concerns about a perceived ``conflict of interest'' if the 
designated recipient for JARC or New Freedom is also bidding on a 
project. The designated recipient is, by law, responsible for the 
competitive selection process. The designated recipient may take steps 
it deems appropriate to mitigate any conflict of interest, such as 
contracting out the competitive selection process. FTA declines to 
require designated recipients to establish conflict of interest 
provisions.
    One commenter disagreed with the concept of competitive selection, 
stating that the development of a coordinated plan, coupled with 
current local, regional, and State coordination of projects provides an 
adequate means of coordinating projects and programs. The law requires 
that designated recipients and States conduct a ``solicitation for 
applications for grants to the recipient and subrecipients under [the 
JARC and New Freedom programs].'' (See 49 U.S.C. 5316(d) and 5317(d). 
One commenter wondered for what purpose is the competitive selection; 
the purpose is to select recipients and subrecipients that will carry 
out JARC and New Freedom projects.
    Another commenter thought that once the planning process is 
complete and projects have been selected for funding, it would be 
reasonable to have existing FTA grantees subcontract with other 
providers, thus keeping the grant administrative process to a minimum. 
This commenter asserted that allowing anyone and everyone to compete 
for eligible projects will be cumbersome in oversight, coordination, 
and contradict the original purpose of streamlining processes. In our 
proposed circulars, FTA proposed significant flexibility within the 
process to address concerns such as these, and we have retained that 
flexibility in the final circulars. It is important to understand that 
projects to be funded are not selected through the planning process. 
Projects are prioritized, but selection occurs competitively. Anyone 
can compete for projects, including private non-profit and private for-
profit companies. Entities selected to carry out the projects will be 
subrecipients, not subcontractors.
    One commenter suggested that, for New Freedom funds, FTA should 
include in the selection process a requirement that a review of other 
funding sources occurs in order to ensure that limited New Freedom 
funds are not spent where other funds could be used. FTA declines to 
explicitly make this a requirement, but we note that a coordinated plan 
includes an assessment of existing resources and services--we expect 
this to be part of the plan. FTA strongly encourages communities to 
include potential strategies that could be funded from multiple 
sources, including other Federal programs.
    Several commenters objected to the proposed two-year competitive 
selection cycle, and some suggested that the competition should occur 
at a ``reasonable interval'' based on local circumstances. In response, 
FTA has changed this so the competition may be held annually or at 
intervals up to three years as determined by the designated recipient 
based on local needs. Three years allows a sufficient period to 
determine if a multi-year project is successful and should be 
continued. If the competitive selection process is less frequent than 
every three years, it is possible that new needs will not be addressed, 
and interested participants may be shut out of the process. FTA 
encourages ongoing efforts of looking at how the needs are being met, 
and if the project selected is meeting the needs identified in the 
plan.
    Several commenters wanted to see further clarification on what 
constitutes a ``fair and equitable'' distribution of funds. One 
commenter asked FTA to clearly state that fair and equitable does not 
mean funds are distributed on a pro rata basis, while another wanted to 
ensure ``equal'' allocation of resources among projects and 
communities. Several commenters asked about geographic distribution, in 
terms of evaluating ``areas'' rather than ``projects'' (example two in 
the selection process examples), and in terms of Title VI and 
Environmental Justice. As we stated in the September 6, 2006, notice, 
(and we have added this language to the final circular) equitable 
distribution refers to equal access to--and equal treatment by--a fair 
and open competitive process. The result of such a process may not be 
an ``equal'' allocation of resources among projects or communities. FTA 
added ``geographic distribution'' to the list of selection criteria 
that may be considered by designated recipients and States, but it is 
possible that some areas may not receive any funding at the conclusion 
of the competitive selection process. A successful competitive 
selection process will, however, minimize perceptions of unfairness in 
the allocation of program resources.
    Some commenters had questions about the examples we provided in the 
proposed circulars. We have attempted to clarify the language in 
response to comments. Two commenters noticed that there was no language 
in the proposed circulars requiring designated recipients to choose 
projects/needs in order of the priority established in the coordinated 
plan. While the designated recipient certainly should consider the 
priorities identified in the plan, there may be times when the 
resources available are not sufficient to fund the first or second 
priorities listed. In cases such as these, it would be appropriate for 
the designated recipient to look at the resources available and fund 
what is possible, which may mean going further down the list of 
prioritized projects or strategies than the first one or two items. 
Therefore, we decline to require designated recipients to choose 
projects/needs in order of priority identified in the coordinated plan.
    The rest of this chapter addresses the Program of Projects (POP). 
In response to commenters, we added some clarifying language and 
language addressing the Federal Funding Accountability and Transparency 
Act of 2006 (discussed above). Two commenters were concerned that 
categorizing projects as ``A'' or ``B'' could delay or deny funding. A 
POP is

[[Page 14859]]

necessary at the time of the grant application, but not at the time of 
developing the planning documents, unless a local area's process 
requires projects to be listed in the STIP at the project level rather 
than at the program level. Since projects can be described at either 
the project level or the program level, if the projects are listed in 
the STIP at the program level, then neither the STIP nor the TIP would 
need to be amended when projects are moved from category ``B'' to 
category ``A.'' ``A'' and ``B'' categories differentiate between levels 
of readiness. This allows the designated recipient flexibility and 
reduces delays in FTA's grant process. Additional comments received 
about inclusion of projects in the STIP/TIP will be addressed in 
Chapter V.

E. Chapter V--Coordinated Planning

    The Section 5310, JARC, and New Freedom programs all require the 
development of a locally developed, coordinated public transit-human 
services transportation plan (``coordinated plan''). Each of the 
circulars for these three programs has the same requirements for 
coordinated planning; therefore, Chapter V is identical in all three 
circulars. This chapter includes the definition of a coordinated plan, 
how a coordinated plan is developed, the level of public participation 
that is expected and strategies for inclusion, and the relationship of 
the coordinated plan to other planning processes.
    FTA made changes to this chapter as a result of comments received. 
The required elements of a coordinated plan have been modified for 
clarification purposes. For example, in paragraph 2(b)(3), we have 
expanded the element as follows: ``[s]trategies, activities and/or 
projects to address the identified gaps between current services and 
needs, as well as opportunities to improve efficiencies in service 
delivery.'' We made additional clarifying changes to paragraph 4, 
``Relationship to Other Transportation Planning Processes.'' With 
regard to the relationship of the coordinated plan with other planning 
processes, we have added a new Appendix E to the Section 5310 circular, 
and Appendix G to the JARC and New Freedom circulars, and included a 
schematic drawing to clarify the timing and other elements related to 
the coordinated planning process, competitive selection, POP, and 
inclusion of projects in the STIP/TIP.
    One commenter recommended allowing a ``community'' to be defined as 
a separate area within a larger urbanized area where different 
transportation solutions are necessary, and allow the designated 
recipient to be made up of local municipalities. Another commenter 
asked if a ``county'' could be a local area for planning purposes. As 
we stated in the September 6, 2006, notice, the decision as to the 
boundaries of the local planning areas should be made in consultation 
with the State, designated recipients, and/or the MPO. In addition, 
``designated recipient'' is defined in the law as an entity designated, 
in accordance with planning processes, by the chief executive officer 
of a State, responsible local officials, publicly owned operators of 
public transportation, or a State.
    Several commenters expressed concern that 10 percent of the amount 
apportioned may be insufficient to administer the program. Some 
requested that FTA allow program funds to be used for the initial 
coordinated plan. As we stated above, the law allows up to 10 percent 
of funds to be used for administering the program, and development of 
the coordinated plan is part of that program administration--program 
funds may not be used to fund the coordinated plan. FTA notes that 
there is no local match requirement for this funding, and we revised 
the circulars to state that the administrative funding available under 
Section 5310, JARC, and New Freedom may be combined in order to develop 
a single coordinated plan to meet the needs of persons with 
disabilities, older adults, and low-income individuals. Several of the 
strategies outlined in Chapter V offer approaches that may be done with 
a range of resources based on local interest and need. Further, 
administrative funds for the coordination strategies discussed in 
Chapter V may be supplemented with Sections 5303 and 5304 Metropolitan 
Planning and Statewide Planning funds, Section 5307 formula funds, and 
administrative funding available under Section 5311.
    One commenter suggested that FTA should maintain a central list 
that includes the designated planning entity in each community, contact 
information, and sample coordinated plans. A second commenter suggested 
that FTA regional offices collect coordinated plans and have a 
procedure for obtaining a copy. A third suggested that FTA facilitate 
information sharing across regions on plan development and 
implementation. A fourth commenter suggested that technical assistance 
from FTA could assist regions in managing expectations of what the 
coordinated plans can be expected to achieve. In response, FTA is 
funding several technical assistance centers to assist States and local 
communities during the development and implementation of coordinated 
public transit-human service transportation plans. The Federal 
Interagency Coordinating Council on Access and Mobility (CCAM) has 
posted State Coordination Plans on the United We Ride Web site 
(www.unitedweride.gov) which will also be linked to FTA's public Web 
site.
    Some commenters asserted that other key Federal agencies need to be 
mandated to participate in the process, and that true coordination, 
without the involvement of those agencies, has little hope of 
substantive success. One commenter suggested that FTA actively seek 
opportunities to include similar coordination requirements in the 
authorizing legislation for all Federal programs receiving Federal 
dollars to provide transportation to their clients.
    As stated in our March 15, 2006, and our September 6, 2006, Federal 
Register notices, FTA is committed to working with our Federal partners 
through the United We Ride initiative and CCAM to encourage agencies 
that receive Federal funding to participate in the coordinated planning 
process. In the 2005 Report to the President, CCAM outlined five 
recommendations for future action related to coordinated human services 
transportation. These recommendations include two policy statements 
adopted by CCAM members in late 2006 related to coordinated planning 
and vehicle sharing. We have included summaries of the policy 
statements in Chapter III of each circular, and Web links to the full 
policy statements. CCAM will work with each member Department to 
implement the policy statements that build participation in coordinated 
human service transportation services at the local level. In addition 
to these efforts, FTA encourages State DOT offices to work closely with 
their partner agencies and local governmental officials to educate 
policy makers about the importance of partnering with human service 
transportation programs and the opportunities that are available when 
building a coordinated system.
    One commenter suggested that each plan should include a description 
of the planning process, specifically outlining how the planning entity 
involved the disability community in developing the plan. The commenter 
felt that including this description in the plan would be a safeguard 
to ensure that all interested stakeholders had an opportunity to be 
involved. Another commenter wondered why documentation of efforts, the 
process for adopting the plan, and human service needs related to 
intercity transportation are included

[[Page 14860]]

in the body of the circulars but not as required elements.
    In an effort to streamline, we have identified what we believe are 
the key elements in the plan. A description of the planning process, 
documenting efforts, and adopting the plan are not elements. Further, 
whether available intercity transportation is meeting the needs of the 
community or not is part of identifying the needs, which is one of the 
required elements. Designated recipients must certify annually that 
projects selected were derived from a coordinated plan, and the plan 
must be developed through a process that includes members of the 
public, which includes persons with disabilities. FTA's oversight of 
these programs will include review of the outreach efforts engaged in 
by the designated recipient, as well as the list of participants, to 
ensure that interested parties are invited to participate.
    One commenter asked if a State could unilaterally update a plan 
developed by a locally chosen lead agency. A second asserted that the 
MPO, as well as the designated recipient, should have a role in the 
planning process. A State should not be unilaterally updating a local 
coordinated plan--the planning team that developed the plan should do 
the updating as necessary. The circulars and the planning regulations 
encourage a collaborative process for developing the coordinated plan 
that includes key players such as the MPO and the designated recipient. 
As we stated in both previous Federal Register notices, the ``public 
transit'' in ``locally developed coordinated public transit-human 
service transportation plan'' is the local transit agency, which is 
often, but not always, the designated recipient, and that entity is 
expected to participate in the coordinated planning process. When 
everyone is at the planning table--the MPO; the designated 
recipient(s); passengers who are elderly, low income, or have 
disabilities; and other interested stakeholders--the opportunity for 
producing a truly coordinated plan that works for the whole community 
is realized.
    FTA received several comments on the relationship between the 
coordinated planning process and other transportation planning 
processes. As stated previously, in response to comments, we have added 
an ``Appendix E'' to the Section 5310 circular and an ``Appendix G'' to 
the JARC and New Freedom circulars describing in more detail the 
relationship between the coordinated planning process and other 
transportation planning processes. Some commenters asserted that small 
JARC or New Freedom projects may not rise to the level of ``regionally 
significant'' and therefore should be included in the STIP at the 
program level, rather than at the project level. FTA agrees, and stated 
that in the proposed circulars. We have retained that language in the 
final circulars, and therefore retained the language that projects 
should be ``included in'' the STIP, and not merely ``consistent with'' 
the STIP.

F. Chapter VI--Program Management and Administrative Requirements

    Chapter VI provides more details for States and direct recipients 
on how to manage the administrative aspects of the three grant 
programs, and is similar for all three programs. FTA notes that Chapter 
VI in the final circulars is largely a reorganization of the Program 
Management chapter in the 1998 Section 5310 Circular 9070.1E (Chapter 
V). The chapter starts by noting that the basic grant management 
requirements for State and local governments are contained in DOT 
regulations, ``Uniform Administrative Requirements for Grants and 
Cooperative Agreements to State and Local Governments,'' 49 CFR part 
18, and ``Uniform Administrative Requirements for Grants and Agreements 
with Institutions of Higher Education, Hospitals, and Other Non-Profit 
Organizations,'' 49 CFR part 19, which are collectively referred to as 
the ``common grant rule.'' Chapter VI provides summary information 
about certain aspects of the common grant rule, and how management of 
those aspects may be applied to these three programs. Chapter VI also 
notes that more detailed information about general program and grant 
management is found in FTA Circular 5010.1C, ``Grant Management 
Guidelines.''
    The common grant rule allows States to use slightly different 
standards for the establishment of equipment management, procurement, 
and financial management systems than are required for other FTA 
recipients. Therefore, throughout Chapter VI, distinctions are made 
between the requirements for States and other designated recipients. In 
addition, the Section 5310 circular has a section on leasing vehicles 
that is specific to that program. The only change made to the final 
circulars was in the section on ``Reporting Requirements'' regarding 
program performance measures.
    FTA received a number of comments on our proposed performance 
measures; some in support, and others against. In response to comments, 
we have modified the reporting measures somewhat, placed them in 
Chapter II as well as Chapter VI, and clarified that the indicators 
specified are targeted to capture program information on a National 
level--these measures will not be used to assess individual grants. 
Each program has different performance measures.
    Two commenters noted that the circulars require States to submit 
annual reports, but urbanized areas must submit quarterly reports, and 
they questioned why there is a difference. This reporting requirement 
is consistent with FTA's reporting requirements for Section 5307 and 
5309 grants.
    One commenter suggested adding a provision to the Section 5310 
circular that would require vehicles purchased with Section 5310 funds 
to be available in disasters and emergency situations, especially lift-
equipped vehicles. FTA declines to add this provision to the final 
circular. Each community and/or State develops its own emergency plans, 
and should certainly have an inventory of available vehicles that 
includes those vehicles purchased with Section 5310 funds. In many 
cases, the non-profit agencies that own those vehicles use them to 
evacuate their consumers in cases of emergency. When necessary, 
however, those vehicles should be a part of a communities' emergency 
evacuation plan.
    One commenter, in responding to paragraph 5(c) regarding transfers 
of equipment to another subrecipient when the property is no longer 
needed for the original grant purpose, and showing the transfer in an 
active POP, asserted that adding transferred property to a current POP 
is problematic if the grant under which the property was purchased has 
been closed. FTA does not view this as a problem. Recording the 
transferred equipment in an active grant is sufficient to indicate that 
the entity responsible for use of the vehicle has changed. The original 
grant does not have to be modified.

G. Chapter VII--State and Program Management Plans

    FTA requires States and designated recipients responsible for 
implementing the Section 5310, JARC, and New Freedom (and Section 5311) 
programs to document their approach to managing the programs. Chapter 
VII includes guidance on how to create and use State Management Plans 
(SMP) (for the State-managed aspects of the programs), and Program 
Management Plans (PMP) (for designated recipient-managed aspects of the 
programs). The primary purposes of Management Plans are to serve as the 
basis for FTA management reviews of the program, and to provide public 
information on the administration of the programs. Chapter VII in the 
final

[[Page 14861]]

circulars is largely a restatement of the SMP chapter in the 1998 
Section 5310 Circular 9070.1E (Chapter VII). FTA did not make any 
changes to the proposed Chapter VII; we have adopted the proposed 
Chapter VII as the final Chapter VII.
    In all three program circulars, the first two parts of Chapter VII 
explain the general requirements and purpose of Management Plans. The 
third part, ``Reviews,'' differs slightly among the programs. The 
Section 5310 circular discusses only State Management Reviews (as it is 
an entirely State-managed program), while the JARC and New Freedom 
circulars discuss reviews at both the State and designated recipient 
level. The ``Reviews'' part of Chapter VII is an addition to the 1998 
Section 5310 circular.
    The fourth part of Chapter VII discusses the content of Management 
Plans. The suggested content of SMPs and PMPs is essentially identical 
in all three circulars, but the Section 5310 circular reflects the fact 
that Section 5310 is entirely State administered. Management Plans are 
to include a section on use of the 10 percent of the apportionment 
available for administration and technical assistance, and a 
description of how the State or designated recipient makes additional 
resources available to local areas.
    The final part of Chapter VII, which discusses revisions to the 
Management Plan, is the same for all three circulars, and mirrors the 
language in the 1998 Section 5310 circular.
    One commenter requested that FTA make the information in the SMP 
and PMP more available to the public. Members of the public can obtain 
this information from the FTA regional office that serves the 
designated recipient or State. In addition, some grantees make this 
information available on their Web sites.

H. Chapter VIII--Other Provisions

    This chapter is an expansion of the current ``Other Provisions'' 
chapter in the 1998 Section 5310 circular, and is virtually the same 
for all three circulars. Chapter VIII summarizes a number of FTA-
specific and other Federal requirements that FTA grantees are held to 
in addition to the program-specific requirements and guidance provided 
in these circulars. This chapter explains some of the most relevant 
requirements and provides citations to the actual statutory or 
regulatory text. Grantees should use this document in conjunction with 
FTA's ``Master Agreement'' and the current fiscal year ``Certifications 
and Assurances'' to assure that they have met all requirements. 
Grantees may contact FTA Regional Counsel for more details about these 
requirements.
    In paragraph 10(b) of the proposed JARC circular, describing 
transit employee protection under 49 U.S.C. 5333(b), FTA stated that we 
anticipate the Department of Labor (DOL) will revise the warranty and 
procedures currently in use relative to Section 5311. One commenter 
wanted to know, until such action is taken by DOL, what provisions are 
being made to allow the Section 5311 process to be applied to rural 
grantees of the JARC program. We have removed this language from the 
JARC circular, and will amend the circular when/if DOL changes its 
procedures. Until DOL changes its procedures, the Section 5311 warranty 
will not apply to rural JARC projects, and FTA must transmit JARC 
grants to DOL for certification. JARC projects should not be combined 
in a single grant with Section 5311 funds.
    Paragraph 14 discusses the Drug and Alcohol testing requirements 
for Section 5310, JARC, and New Freedom. Recipients that only receive 
Section 5310, JARC, or New Freedom funds are not subject to FTA's drug 
and alcohol testing rules, but must comply with the Federal Motor 
Carrier Safety Administration's rule for employees who hold Commercial 
Driver's Licenses. Recipients of other FTA programs that also receive 
Section 5310, JARC, or New Freedom funds should include any employees 
funded under these programs in their testing program. One commenter 
asserted that FTA rules do not allow employees not covered by FTA's 
drug and alcohol rules to be tested under FTA rules, and therefore they 
would have to have two testing programs. An FTA compliant testing 
program, as required by the receipt of FTA operating or capital funding 
(5307, 5309, 5311), can be used for Section 5310, JARC, and New Freedom 
employees; there is no need to have two testing programs. Employees of 
a subrecipient of Section 5310, JARC, or New Freedom funds from a 
designated recipient of another FTA program (such as 5307 or 5311) 
should also be included in the designated recipient's testing program.

I. Appendices

    The Appendices sections for the Section 5310, JARC, and New Freedom 
programs are intended as tools for developing a grant application. 
Appendix A specifically addresses steps and instructions for preparing 
a grant application, including pre-application and application stages. 
Appendix A also includes an application checklist and information for 
registering with the Electronic Clearinghouse Operation System (ECHO). 
One commenter questioned why both an Allocation Letter and a Program of 
Projects (POP) needed to be submitted at the same time, since the POP 
is included with the grant application and includes the same 
information as the Allocation Letter. We have revised the language in 
paragraph 1(f) of Appendix A to state that the Allocation Letter is 
only necessary if the State is allowing a public entity in a small 
urbanized area under 200,000 in population to apply for funds directly 
from FTA.
    Appendix B includes a sample program of projects. Appendix C in the 
5310 circular and Appendix E in the JARC and New Freedom circulars 
provides contact information for FTA's regional offices. In the JARC 
and New Freedom circulars, Appendix C includes budget information and 
provides specific activity line item (ALI) codes for specific types of 
eligible costs (i.e., capital, operating, planning, etc.). A sample 
approved budget is included in Appendix D. Appendix C in the Section 
5310 circular and Appendix E in the JARC and New Freedom circulars 
contain contact information for FTA's regional and metropolitan 
offices. Appendix D in Section 5310 and Appendix F in the JARC and New 
Freedom circulars list potential sources of technical assistance. In 
the final circulars, we added Appendix E in the Section 5310 circular 
and Appendix G in the JARC and New Freedom circulars, ``Relationship 
Between Coordinated Planning and Metropolitan and Statewide Planning.'' 
The final Appendix in each circular is a list of References, 
traditionally at the front of FTA circulars. FTA has moved this list to 
an appendix for ease of reading.

    Issued in Washington, DC, this 22nd day of March 2007.
James S. Simpson,
Administrator.
[FR Doc. E7-5734 Filed 3-28-07; 8:45 am]
BILLING CODE 4910-57-P


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