`[Federal Register Volume 63, Number 121 (Wednesday, June 24, 1998)]
[Notices]
[Pages 34506-34547]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-16698]



[[Page 34505]]

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Part II





Department of Transportation





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Federal Transit Administration



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FTA Transit Program Changes and Final Funding Levels for Fiscal Year 
1998 Under the Transportation Equity Act for the 21st Century; Notice

  Federal Register / Vol. 63, No. 121 / Wednesday, June 24, 1998 / 
Notices  

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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration


FTA Transit Program Changes and Final Funding Levels for Fiscal 
Year 1998 Under the Transportation Equity Act for the 21st Century

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Notice.

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SUMMARY: This Notice announces the availability of the remaining fiscal 
year 1998 funding for the Federal transit programs that was not 
available previously due to the lack of a full year authorization of 
the transit program. The Transportation Equity Act for the 21st Century 
(TEA-21), signed into law by President Clinton on June 9, 1998, 
provides a six-year reauthorization of the Federal transit program and 
the necessary contract authority needed to fully fund the fiscal year 
1998 obligation limitations contained in the fiscal year 1998 
Department of Transportation Appropriations Act. In addition to 
announcing the remaining fiscal year funding, this Notice also revises 
the apportionment of funding for the Section 5307 Urbanized Area 
Formula Program in compliance with new provisions which require a one 
percent set-aside for transit enhancements, and $4,849,950 to be set 
aside for financing the Alaska Railroad. Additionally, this Notice 
revises the apportionment of funds for the Section 5309 Fixed Guideway 
Modernization Program to reflect the new allocation formula established 
in TEA-21. It also revises the Section 5309 Bus Allocations to comply 
with new provisions in TEA-21 to fund a Bus Test Facility in the amount 
of $3,000,000 and a Fuel Cell Bus Program in the amount of $4,850,000 
in fiscal year 1998. These two programs were not provided for in the 
original Bus Allocations.
    This Notice updates and expands on the December 5, 1997, Federal 
Register Notice entitled ``FTA Fiscal Year 1998 Apportionments, 
Allocations and Program Information.'' It also contains information 
regarding the changes made by TEA-21 to the various Federal transit 
programs, as well as the FTA policy on pre-award authority and other 
new program information.
    The new programs are the Clean Fuels Formula Program, the Job 
Access and Reverse Commute Program, the Over-the-Road Bus Accessibility 
program, the Single State Pilot Program for Intercity Rail 
Infrastructure Investment, and the State Infrastructure Banks Pilot 
Program. The funding level for the Over-the-Road Bus Accessibility 
Program is subject to a pending technical correction bill which would 
decrease the $6.8 million a year for operators of other over-the-road 
service to a total of $6.8 million for the four years, 2000-2003.

FOR FURTHER INFORMATION CONTACT: The appropriate FTA Regional 
Administrator for grant-specific information and issues; Patricia 
Levine, Director, Office of Resource Management and State Programs, 
(202) 366-2053, for general information about the Urbanized Area 
Formula Program, the Nonurbanized Area Formula Program, the Elderly and 
Persons with Disabilities Program, the Rural Transit Assistance 
Program, or the Capital Program; or Robert Stout, Director, Office of 
Planning Operations, (202) 366-6385, for general information concerning 
the Metropolitan Planning Program and the State Planning and Research 
Program.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. FTA Fiscal Year 1998 Funds Available for Obligation
III. Fiscal Year 1998 Revised Section 5307 Urbanized Area Formula 
Apportionments
IV. Fiscal Year 1998 Revised Section 5309 Fixed Guideway 
Modernization Apportionments
V. Fiscal Year 1998 Revised Section 5309 Bus Allocations
VI. Transit Authorization Levels Under TEA-21
VII. Changes Affecting FTA Formula, Capital Investment and Planning 
Programs
    A. Capital Project Definitions
    B. Operating Assistance
    C. Preventive Maintenance
    D. Transit Enhancements
    E. Proceeds from Sale of Assets
    F. Revenue Bond Proceeds As Local Share
    G. Notice of Pre-award Authority to Incur Project Costs
    1. Conditions
    2. Environmental, Planning, and Other Federal Requirements
    H. Metropolitan Planning
    I. New Starts Evaluation and Criteria
VIII. New Programs Authorized by TEA-21
    A. Clean Fuels Formula Program
    1. Definition of Eligible Projects
    2. Application and Apportionment Deadlines
    3. Formula for Apportioning Funds
    4. Availability of Funds
    B. Job Access and Reverse Commute Program
    1. Definition and Eligible Projects
    2. Factors for Consideration
    3. Availability of Funds and Grant Requirements
    C. Over-the-Road Bus Accessibility Program
    D. Single State Pilot Program for Intercity Rail Infrastructure 
Investment
    E. State Infrastructure Banks Pilot Program
IX. General Information Tables:
    1. FTA Fiscal Year 1998 Revised Appropriations and Funds 
Available for Grant Programs
    2. FTA Fiscal Year 1998 Revised Section 5307 Urbanized Area 
Formula Apportionments
    3. FTA Fiscal Year 1998 Revised Section 5309 Fixed Guideway 
Modernization Apportionments
    4. FTA Fiscal Year 1998 Revised Section 5307 Section 5309 Bus 
Allocations
    5. FTA TEA-21 Authorization Levels
    6. FTA TEA-21 New Start Project Authorizations
    7. FTA TEA-21 Bus Capital Project Authorizations
    8. FTA Fiscal Years 1998-2003 Apportionment Formula for Sections 
5307 and 5311
    9. FTA Fiscal Years 1998-2003 Apportionment Formula for Section 
5309 Fixed Guideway Modernization Program
    10. FTA Unit Values of Data--Fiscal Year 1998 Revised Formula 
Grant Apportionments

I. Background

    The fiscal year 1998 apportionments and allocations for the 
formula, capital, and transit planning and research programs were 
published in a Federal Register Notice on December 5, 1997, entitled 
``FTA Fiscal Year 1998 Apportionments, Allocations and Program 
Information.'' That Notice contained apportioned funds based on the 
1998 Appropriations Act and Federal transit laws, as well as funds 
available under the Surface Transportation Extension Act of 1997. 
Because the Surface Transportation Extension Act of 1997 only provided 
contract authority through March 31, 1998, FTA published (1) a listing 
of the full amount of the fiscal year 1998 apportionments and 
allocations for the formula, capital, and transit planning and research 
programs, based on the 1998 Appropriations Act and Federal transit 
laws; and (2) a listing of the partial amount of the apportionments and 
allocations, based on the fiscal year 1998 available funds for these 
programs, in accordance with the 1998 DOT Appropriations Act and the 
Surface Transportation Extension Act of 1997. Now that full year 
contract authority is provided under TEA-21, the full amount of the 
fiscal year 1998 apportionments and allocations is available for 
obligation.

II. FTA Fiscal Year 1998 Funds Available for Obligation

    The total fiscal year 1998 apportionments and allocations for the 
formula, capital investment, and transit planning and research programs 
in the amount of $4,547,737,724 were

[[Page 34507]]

published in the Federal Register Notice of December 5, 1997. Full 
obligational authority for each of the amounts listed in the December 
5, 1997, Notice is now provided for the following programs:
    Section 5307 Urbanized Area Formula Program;
    Section 5311 Nonurbanized Area Formula Program;
    Section 5310 Elderly and Persons with Disabilities Program;
    Section 5309 Capital Investment Program: Fixed-Guideway 
Modernization Program, and the Bus Capital Program.
    Obligational authority for the following programs is not affected 
by this Notice because they received the full year's funding pursuant 
to the December 5, 1997, Federal Register Notice:
    Section 5311(b) Rural Transit Assistance Program Funds;
    Section 5309 New Starts Program;
    Section 5303 Metropolitan Planning Program;
    Section 5313(b) State Planning and Research Program.
    Table 1 displays the amount of appropriations and funds available 
for each of the programs listed in this Notice.

III. Fiscal Year 1998 Revised Section 5307 Urbanized Area Formula 
Apportionments

    The new law provides that, of the funds apportioned each fiscal 
year under the Urbanized Area Formula Program to urbanized areas of 
200,000 or more in population, at least one percent shall be used for 
transit enhancement activities. It also requires that $4,849,950 shall 
be available annually to the Alaska Railroad for improvements to its 
passenger operations. Accordingly, the fiscal year 1998 Urbanized Area 
Formula apportionment has been revised to accommodate these two 
provisions.
    The fiscal year 1998 funds appropriated and made available for 
Urbanized Area Formula grants total $2,303,702,677. After a deduction 
of .32343056 of one percent for Project Management Oversight 
($7,450,879), $2,296,251,798 is available for apportionment to the 
urbanized areas and states. Of this amount, $4,834,264 ($4,849,950 less 
$15,6896 for PMO) is set aside for the Alaska Railroad. In addition to 
the balance of $2,291,417,534 of the appropriated funds, the revised 
apportionment also includes $7,162,381 in deobligated funds which have 
become available for reapportionment for the Urbanized Area Formula 
Program, leaving a balance of $2,298,579,915 to be apportioned to 
urbanized areas and states. Table 2 shows a revised apportionment of 
$2,303,414,179, which includes the Alaska Railroad.
    There is no longer an operating assistance limitation for areas 
under 200,000 in population. TEA-21 eliminates Federal financing of 
operating expenses for areas 200,000 and above effective immediately.
    Also indicated on Table 2 is the amount set aside for transit 
enhancements as provided in TEA-21. See Section VII.D of this Notice 
for a further discussion of transit enhancement funds. This transit 
enhancement provision is effective immediately.

IV. Fiscal Year 1998 Revised Section 5309 Fixed Guideway 
Modernization Apportionments

    TEA-21 modifies the formula for allocating the Fixed Guideway 
Modernization funds. The new formula contains seven tiers rather than 
four. The allocation of funding under the first four tiers has been 
modified slightly and, through fiscal year 2003, will be allocated 
based on data used to apportion the funding in fiscal year 1997. 
Funding in the three new tiers will be apportioned based on the latest 
available route miles and revenue vehicle miles on segments at least 
seven years old as reported to the National Transit Database, rather 
than on route miles and revenue vehicle miles on entire systems which 
are seven years old.
    TEA-21 specifically required the FTA to revise the fiscal year 1998 
Fixed Guideway Modernization funds using the new formula. This has 
resulted in generally minor changes in the amounts available. However, 
one area, Worcester, Massachusetts, is no longer eligible, because the 
fixed guideway segment attributable to that urbanized area was not in 
place as of October 1, 1990. For the fiscal year 1998 revised 
apportionments, sufficient funds were available to allocate only to the 
first five tiers. The revised apportionments are contained in Table 3. 
For the reapportionment of fiscal year 1998 funds, Tier 5 uses 
Urbanized Area Formula Program fixed guideway tier formula factors that 
were used to apportion the fiscal year 1998 Fixed Guideway allocations 
in the December 5, 1997, Federal Register Notice. Any fixed guideway 
segment that is less than seven years old has been deleted from this 
data base.
    For fiscal year 1998, there is an $800,000,000 obligation 
limitation for fixed guideway modernization. After a deduction of 
.32343056 of one percent for Project Management Oversight ($2,587,445), 
$797,412,555 is available for apportionment to the specified urbanized 
areas.
    Each year, the new fixed guideway modernization formula will 
allocate funds by seven tiers as follows:

Tier 1

    The first $497,700,000 shall be apportioned to the following 
urbanized areas as follows: Baltimore $8,372,000; Boston $38,948,000; 
Chicago/Northwestern Indiana $78,169,000; Cleveland $9,509,500; New 
Orleans $1,730,588; New York $176,034,461; Northeastern New Jersey 
$50,604,653; Philadelphia/Southern New Jersey $58,924,764; Pittsburgh 
$13,662,463; San Francisco $33,989,571; Southwestern Connecticut 
$27,755,000.

Tier 2

    The next $70,000,000 shall be apportioned as follows: Tier 2B: 50 
percent to areas identified in Tier 1; and Tier 2B: 50 percent to other 
urbanized areas with fixed guideway in operation at least seven years. 
Funds for both Tiers 2A and 2B are apportioned using the Urbanized Area 
Formula Program fixed guideway tier formula factors that were used to 
apportion funds for the Fixed Guideway Modernization Program in fiscal 
year 1997.

Tier 3

    The next $5,700,000 shall be apportioned to the following urbanized 
areas as follows: Pittsburgh, 61.76 percent; Cleveland, 10.73 percent; 
New Orleans, 5.79 percent; the remaining 21.72 percent is apportioned 
to areas in Tier 2B using the fixed guideway tier formula factors used 
in fiscal year 1997.

Tier 4

    The next $186,600,000 shall be apportioned to all eligible areas 
using the fixed guideway tier formula factors used in fiscal year 1997.

Tier 5

    The next $70,000,000 shall be apportioned as follows: 65 percent to 
the eleven areas specified in Tier I, and 35 percent to all other 
urbanized areas using the most current urbanized area formula program 
fixed guideway tier formula factors. Any segment this is less than 
seven years old has been deleted from this data base.

Tier 6

    The next $50,000,000 shall be apportioned as follows: 60 percent to 
the eleven areas specified in Tier I, and 30 percent to the other 
urbanized areas with fixed guideway system segments in

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revenue service for at least seven years. Allocations will be based on 
the latest available route miles and revenue vehicle miles for fixed 
guideway segments at least seven years old as reported to the National 
Transit Database.

Tier 7

    Any remaining amounts shall be apportioned as follows: 50 percent 
to the eleven urbanized areas specified in Tier I, and 50 percent to 
the other urbanized areas with fixed guideway system segments in 
revenue service for at least seven years. Allocations will be based on 
the latest available route miles and revenue vehicle miles for fixed 
guideway segments at least seven years old as reported to the National 
Transit Database.

V. Fiscal Year 1998 Revised Section 5309 Bus Allocations

    TEA-21 provides funding for a Bus Testing Facility in the amount of 
$3,000,000 and a Fuel Cell Bus Program in the amount of $4,850,000 in 
fiscal year 1998. These two programs were not provided for in the 
original allocations; therefore, all bus allocations have been reduced 
on a prorated basis to accommodate these two additional activities. 
Table 4 displays the revised allocations.

VI. Transit Authorization Levels Under TEA-21

    TEA-21 provides a combination of trust and general fund 
authorizations that total $42.0 billion over the six year period, 
fiscal years 1998--2003. However, $36 billion is guaranteed funds 
included under the discretionary spending cap. TEA-21 includes $6 
billion above the guaranteed level. See Table 5 for the guaranteed 
funding levels by program, and Table 5A for the guaranteed and 
nonguaranteed levels by program.
    TEA-21 authorizes 191 New Starts projects. Of this number, 108 
projects are authorized for final design and construction funding and 
68 projects are authorized for alternatives analysis and preliminary 
engineering funding. Of these, 34 projects have specific dollar amounts 
associated with them. An additional 15 projects have specific dollar 
amounts but are not included in the first two lists. All earmarks are 
listed in Table 6 by area and project, including the dollar amount if 
specified. Projects authorized for alternatives analysis and 
preliminary engineering also become authorized for final design and 
construction as of October 1, 2000.
    TEA-21 contains a provision that makes $10,400,000 available from 
Section 5309 New Starts funds in fiscal years 1999--2003 for ferry boat 
capital projects in Alaska or Hawaii. These projects may be ferry boats 
or ferry terminal facilities or approaches to ferry terminal 
facilities. TEA-21 also authorizes an additional $3,600,000 from 
Section 5309 New Start nonguaranteed funds in fiscal years 1999--2003 
for ferry projects as defined above.
    It should be noted that projects earmarked in TEA-21 are subject to 
Congressional actions in later appropriations bills.
    Also authorized are project specific allocations in fiscal years 
1999 and 2000 for 158 Capital Investment Bus projects totaling 
$539,637,000. These projects by amount and area are displayed on Table 
7.
    Information regarding estimates of funding levels for 1999--2003 by 
state and urbanized area is available on the FTA home page at 
www.fta.dot.gov. These numbers are for planning purposes only as they 
will be revised in the future but may be used for programming 
metropolitan transportation improvement programs and statewide 
transportation improvement programs.

VII. Changes Affecting FTA Formula, Capital Investment, and 
Planning Programs

A. Capital Project Definitions

    TEA-21 amends the definition of a capital project placing several 
new items in the general definition and formally codifying in the FTA 
authorizing statute several items that had been modified in the past 
through appropriations acts.
    Following is the definition of a capital project contained in TEA-
21. The term `capital project' means a project for:
    1. Acquiring, constructing, supervising or inspecting equipment or 
a facility for use in mass transportation, expenses incidental to the 
acquisition or construction (including designing, engineering, location 
surveying, mapping, and acquiring rights of way), payments for the 
capital portions of rail trackage rights agreements, transit-related 
intelligent transportation systems, relocation assistance, acquiring 
replacement housing sites, and acquiring, constructing, relocating, and 
rehabilitating replacement housing;
    2. Rehabilitating a bus;
    3. Remanufacturing a bus;
    4. Overhauling rail rolling stock;
    5. Preventive maintenance;
    6. Leasing equipment or a facility for use in mass transportation 
subject to regulations the Secretary prescribes limiting the leasing 
arrangements to those that are more cost-effective than acquisition or 
construction;
    7. Joint development: a mass transportation improvement that 
enhances economic development or incorporates private investment, 
including commercial and residential development, pedestrian and 
bicycle access to a mass transportation facility, and the renovation 
and improvement of historic transportation facilities, because the 
improvement enhances the effectiveness of a mass transportation project 
and is related physically or functionally to that mass transportation 
project or establishes new or enhanced coordination between mass 
transportation and other transportation, and provides a fair share of 
revenue for mass transportation that will be used for mass 
transportation--
    (a) Including property acquisition, demolition of existing 
structures, site preparation, utilities, building foundations, 
walkways, open space, safety and security equipment and facilities 
(including lighting, surveillance, and related intelligent 
transportation system applications), facilities that incorporate 
community services such as daycare and health care, and a capital 
project for, and improving, equipment or a facility for an intermodal 
transfer facility or transportation mall, except that a person making 
an agreement to occupy space in a facility under this subparagraph 
shall pay a reasonable share of the costs of the facility through 
rental payments and other means; and
    (b) Excluding construction of a commercial revenue-producing 
facility or a part of a public facility not related to mass 
transportation;
    8. The introduction of new technology, through innovative and 
improved products, into mass transportation; or
    9. The provision of nonfixed route paratransit transportation 
services in accordance with section 223 of the Americans with 
Disabilities Act of 1990 (42 U.S.C. 12143), but only for grant 
recipients that are in compliance with applicable requirements of that 
Act, including both fixed route and demand responsive service, and only 
for amounts not to exceed 10 percent of such recipient's annual formula 
apportionment under sections 5307 and 5311.''

B. Operating Assistance

    Operating assistance for urbanized areas with populations under 
200,000 continues to be available, at the Federal/local share ratio of 
50/50, with no limitation on the amount of a grantee's

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apportionment that may be used for operating assistance. Operating 
assistance funds for urbanized areas with populations of 200,000 and 
above are no longer available as of effective date of TEA-21.
    For fiscal year 1999 and thereafter, operating assistance is 
available only to nonurbanized and urbanized areas with populations 
under 200,000. For these smaller areas, there is no limitation on the 
amount of the apportionment that may be used for operating assistance, 
and the Federal/local share ratio is 50/50. However, for both 
categories of urbanized areas, many of the activities formerly funded 
by FTA with operating assistance are now eligible capital items under 
the category of preventive maintenance. Operating assistance as a 
capital project with an 80 percent federal match ratio will continue 
for fiscal year 1998 for areas under 200,000. Operating assistance at 
the 80/20 match will not be available in fiscal year 1999 or 
thereafter.

C. Preventive Maintenance

    Preventive maintenance, an expense that became eligible for FTA 
capital assistance with the DOT 1998 Appropriations Act, is now 
eligible for FTA capital assistance under TEA-21, so that fiscal year 
1998 funds and subsequent fiscal year appropriations may be used for 
preventive maintenance. Preventive maintenance costs, as in fiscal year 
1998, are defined as all maintenance costs. For general guidance as to 
the definition of eligible maintenance costs, the grantee should refer 
to the definition of maintenance in the most recent National Transit 
Database reporting manual. A grantee may continue to request assistance 
for capital expenses under the FTA policies governing associated 
capital maintenance items (spare parts), maintenance of vehicles leased 
under contract, and vehicle overhauls; or a grantee may choose to 
capture all maintenance under preventive maintenance. If a grantee 
purchases service instead of operating service directly, and 
maintenance is included in the contract for that purchased service, 
then the grantee may apply for preventive maintenance capital 
assistance for the actual maintenance costs of the purchased service.
    For accounting purposes, the grantee is cautioned not to confuse 
the fact that an item generally considered to be an operating expense 
is now eligible for FTA capital assistance. Generally accepted 
accounting principles and the grantee's accounting system determine 
those costs that are to be accounted for as operating costs. The 
National Transit Database Reporting System (NTD) follows generally 
accepted accounting principles, and so a grantee reporting to the NTD 
must report the operating costs the grantee has incurred as operating 
costs regardless of grant eligibility as capital. Nevertheless, under 
provisions of the fiscal year 1998 Appropriations Act, and now under 
provisions of TEA-21, some of those operating costs, while continuing 
to be accounted for as operating costs in the grantee's accounting 
records, are now eligible for FTA capital assistance. Grantees may not 
count the same costs twice.

D. Transit Enhancements

    TEA-21 establishes a one percent set-aside for transit enhancements 
under the Urbanized Area Formula Program for areas 200,000 and above in 
population. The term ``transit enhancement'' includes projects that are 
designed to enhance mass transportation service or use and are 
physically or functionally related to transit facilities. Eligible 
projects are: (1) historic preservation, rehabilitation, and operation 
of historic mass transportation buildings, structures, and facilities 
(including historic bus and railroad facilities); (2) bus shelters; (3) 
landscaping and other scenic beautification, including tables, benches, 
trash receptacles, and street lights; (4) public art; (5) pedestrian 
access and walkways; (6) bicycle access, including bicycle storage 
facilities and installing equipment for transporting bicycles on mass 
transportation vehicles; (7) transit connections to parks within the 
recipient's transit service area; (8) signage; and (9) enhanced access 
for persons with disabilities to mass transportation.
    One percent of the urbanized area formula apportionment in 
urbanized areas with a population of 200,000 and above shall be 
available only for transit enhancements. Table 2 indicates the amount 
set aside for enhancements in urbanized areas of 200,000 and above. If 
these funds are not obligated for transit enhancement projects by three 
years following the fiscal year in which the funds are apportioned, the 
funds shall be reapportioned under the urbanized area formula program.
    The project budget for each urbanized area formula grant 
application which includes enhancement funds shall include a scope code 
for transit enhancements and specific budget line activity items for 
transit enhancements. Transit enhancements may exceed the one percent 
set-aside. However, items that are only eligible as enhancements such 
as operating costs for historic facilities may only be funded with the 
enhancement funds.
    Recipients of the one percent set-aside enhancement funds shall 
submit a report to the appropriate FTA regional office listing the 
projects carried out during the fiscal year with those funds. This 
report shall be part of the recipient's annual certification to the 
FTA. If at all possible, the report should be submitted electronically 
and should utilize the budget line item codes used in the approved 
project budget.
    Under a related provision, projects providing bicycle access to 
mass transportation funded with the enhancement set-aside shall be 
funded at a 95 percent Federal share.

E. Proceeds From Sale of Assets

    TEA-21 provides an additional option for handling proceeds from the 
sale of federally-funded assets. This new provision allows the 
recipient, with FTA approval, to sell, transfer, or lease real 
property, equipment, or supplies acquired with FTA assistance and no 
longer needed for transit purposes. The net proceeds of the transaction 
may then be used to reduce the gross project cost of other Federally-
assisted capital transit projects.
    If the asset is identified as no longer needed by the grantee for 
public transportation purposes, and determined by FTA as eligible for 
disposition, then the new requirements would apply. That is, the 
proceeds could be retained by the grantee and used to reduce the gross 
project costs of another Federally-assisted capital transit project 
prior to applying for Federal financial assistance.
    If the asset is to be retained in transit use after being 
transferred, sold, or leased, such as by another transit provider or in 
a joint development project, then existing requirements would apply.
    Previous provisions continue to allow the recipient of assistance 
to transfer assets to another public agency to be used for a public 
purpose. Additional information is available from the appropriate FTA 
Regional Office.

F. Revenue Bond Proceeds as Local Share

    Beginning with fiscal year 1999, and permissible thereafter, a 
recipient of assistance under the Urbanized Area Formula Program 
(Section 5307) and the Capital Program (Section 5309), may use as the 
local share for capital projects the proceeds from the issuance of 
bonds that are backed by future revenue from the farebox. This 
provision of TEA-21 is expected to help reduce borrowing costs for 
transit authorities. Under this

[[Page 34510]]

provision, using the proceeds of the revenue bonds as matching share 
will be approved only if the aggregate amount of financial support from 
the State and affected local governmental authorities in the urbanized 
area during the next three fiscal years is not less than the aggregate 
amount provided by the State and affected local governmental 
authorities in the urbanized area during the preceding three fiscal 
years (as is made evident in the State Transportation Improvement 
Program).

G. Notice of Pre-Award Authority To Incur Project Costs

    Since fiscal year 1994, FTA has provided pre-award authority to 
cover certain planning and capital costs prior to grant award. This 
automatic pre-award spending authority permits a grantee to incur costs 
on an eligible transit capital or planning project without prejudice to 
possible future Federal participation in the cost of the project or 
projects. Prior to exercising pre-award authority, grantees are 
strongly encouraged to consult with the appropriate regional office 
where there could be any question regarding the eligibility of the 
project for future FTA funds.
    Authority to incur costs for fiscal year 1998 Fixed Guideway 
Modernization, Metropolitan Planning, Urbanized Area Formula, Elderly 
and Persons with Disabilities, Nonurbanized Area Formula, and State 
Planning and Research Programs in advance of possible future Federal 
participation was provided in the December 5, 1997, Federal Register 
Notice. This pre-award authority now also extends to future formula 
funds that will be apportioned during the authorization period of TEA-
21, 1998-2003. Pre-award authority also applies to Capital Bus funds 
identified in the December 5, 1997, notice. This pre-award authority 
also applies to projects intended to be funded with STP or CMAQ funds 
transferred to FTA in fiscal year 1998. This pre-award authority for 
STP or CMAQ funds is now extended for the 1998-2003 authorization 
period of TEA-21. Pre-award authority applies to FTA funds and flexible 
funds provided the conditions in paragraphs (1) and (2) below are met. 
The pre-award authority does not apply to Capital New Start funds, or 
to Capital Bus projects not specified in this or previous notices. Pre-
award authority also applies to preventive maintenance costs incurred 
within a local fiscal year ending during calendar year 1997, or 
thereafter, under the formula programs cited above.
1. Conditions
    Similar to the FTA Letter of No Prejudice (LONP) authority, the 
conditions under which this authority may be utilized are specified 
below:
    a. This pre-award authority is not a legal or moral commitment that 
the project(s) will be approved for FTA assistance or that FTA will 
obligate Federal funds. Furthermore, it is not a legal or moral 
commitment that all items undertaken by the applicant will be eligible 
for inclusion in the project(s).
    b. All FTA statutory, procedural, and contractual requirements must 
be met.
    c. No action will be taken by the grantee that prejudices the legal 
and administrative findings which the Federal Transit Administrator 
must make in order to approve a project.
    d. Local funds expended by the grantee pursuant to and after the 
date of this authority will be eligible for credit toward local match 
or reimbursement if FTA later makes a grant for the project(s) or 
project amendment(s).
    e. The Federal amount of any future FTA assistance to the grantee 
for the project will be determined on the basis of the overall scope of 
activities and the prevailing statutory provisions with respect to the 
Federal/local match ratio at the time the funds are obligated.
    f. For funds to which this authority applies, the authority expires 
with the lapsing of the fiscal year funds.
2. Environmental, Planning, and Other Federal Requirements
    FTA emphasizes that all of the Federal grant requirements must be 
met for the project to remain eligible for Federal funding. Some of 
these requirements must be met before pre-award costs are incurred, 
notably the requirements of the National Environmental Policy Act 
(NEPA), and the planning requirements. Compliance with NEPA and other 
environmental laws or executive orders (e.g., protection of parklands, 
wetlands, historic properties) must be completed before state or local 
funds are advanced for a project expected to be subsequently funded 
with FTA funds. Depending on which class the project is included under 
in FTA's environmental regulations (23 CFR part 771), the grantee may 
not advance the project beyond planning and preliminary engineering 
before FTA has approved either a categorical exclusion (refer to 23 CFR 
part 771.117(d)), a finding of no significant impact, or a final 
environmental impact statement. The conformity requirements of the 
Clean Air Act (40 CFR part 51) also must be fully met before the 
project may be advanced with non-Federal funds.
    Similarly, the requirement that a project be included in a locally 
adopted metropolitan transportation improvement program and federally 
approved statewide transportation improvement program must be followed 
before the project may be advanced with non-Federal funds. In addition, 
Federal procurement procedures, as well as the whole range of Federal 
requirements, must be followed for projects in which Federal funding 
will be sought in the future. Failure to follow any such requirements 
could make the project ineligible for Federal funding. In short, this 
increased administrative flexibility requires a grantee to make certain 
that no Federal requirements are circumvented through the use of pre-
award authority. If a grantee has questions or concerns regarding the 
environmental requirements, or any other Federal requirements that must 
be met before incurring costs, it should contact the appropriate 
regional office.
    Before an applicant may incur costs either for activities expected 
to be funded by New Start funds, or for Bus Capital projects not listed 
in the December 5, 1997, Federal Register Notice, it must first obtain 
a written LONP from FTA. To obtain an LONP, a grantee must submit a 
written request accompanied by adequate information and justification 
to the appropriate FTA regional office.

H. Metropolitan Planning

    TEA-21 retains much of the basic structure of the metropolitan and 
statewide planning process, as established by ISTEA, with a few 
significant changes. The set of sixteen metropolitan planning factors 
has been reduced to seven factors: economic vitality; safety and 
security; accessibility and mobility; environment, energy conservation 
and quality of life; integration and connectivity; efficient operation 
and management; and preservation of existing transportation resources. 
Freight shippers and users of public transit are added to the explicit 
set of stakeholders to be given opportunities to comment on 
metropolitan plans and transportation improvement programs (TIPs).
    Metropolitan planning organizations (MPOs) may include in their 
TIPs an ``illustrative'' list of projects that could be implemented if 
additional resources were made available. MPOs will also be encouraged 
to coordinate the planning for Federally-funded non-emergency 
transportation services as part of the metropolitan planning process. 
FTA and FHWA will be revising the Joint Planning Regulations (23 CFR 
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incorporate changes to the planning program.

I. New Starts Evaluation and Criteria

    TEA-21 includes several changes to the evaluation process and 
criteria for New Starts fixed guideway projects. The Secretary shall 
consider several additional factors in the Department's review and 
evaluation of candidate New Starts projects. FTA will be required to 
evaluate each project authorized for New Starts funding by each 
criterion, as well as provide an overall project rating of ``highly 
recommended,'' ``recommended,'' and ``not recommended.'' In addition to 
its annual report to Congress on Funding Levels and Allocations of 
Funds for Transit Major Capital Investments, FTA will be required to 
issue a supplemental report in August of each year which rates all 
projects that have completed alternatives analysis and preliminary 
engineering since the date of the last report. FTA must also approve 
candidate New Starts project's entry into final design. FTA also 
continues its prior approval authority for entrance into preliminary 
engineering.
    TEA-21 requires that no less than 92 percent of the annual New 
Starts program must be used for final design and construction.
    FTA will issue regulations implementing the New Starts provision of 
TEA-21.

VIII. New Programs Authorized by TEA-21

A. Clean Fuels Formula Program

1. Definition and Eligible Projects
    The Clean Fuels Formula Program will finance the purchase or lease 
of clean fuel buses and facilities and the improvement of existing 
facilities to accommodate clean fuel buses. Clean fuel buses include 
those powered by compressed natural gas, liquefied natural gas, 
biodiesel fuels, batteries, alchohol-based fuels, hybrid electric, fuel 
cell and certain clean diesel, and other low or zero emissions 
technology, and which the Environmental Protection Agency (EPA) has 
certified sufficiently reduces harmful emissions. Eligible projects 
include:
    a. purchasing or leasing clean fuel buses, including buses that 
employ a lightweight composite primary structure;
    b. constructing or leasing clean fuel buses or electrical 
recharging facilities and related equipment;
    c. improving existing mass transportation facilities to accommodate 
clean fuel buses;
    d. repowering pre-1993 engines with clean fuel technology that 
meets the current urban bus emission standards;
    e. retrofitting or rebuilding pre-1993 engines if before half life 
to rebuild; and may,
    f. at the discretion of the FTA, projects relating to clean fuel, 
biodiesel, hybrid electric or zero emissions technology vehicles that 
exhibit equivalent or superior emissions reductions to existing clean 
fuel or hybrid electric technologies.
2. Application and Apportionment Deadlines
    Any designated recipient seeking to apply for a grant under this 
section shall submit an application to FTA no later than January 1 of 
each fiscal year. No later than February 1 of each fiscal year FTA 
shall apportion funds to designated recipients who submitted 
applications. FTA is required to issue regulations to implement this 
program.
3. Formula for Apportioning Funds
    a. Areas 1,000,000 and above. Two thirds of the funds available 
shall be apportioned to designated recipients with eligible projects in 
urban areas with a population of 1,000,000 and above. Of this, 50 
percent shall be apportioned so that each designated recipient receives 
a grant in an amount equal to the ratio between:
    (1) the number of vehicles in the bus fleet of the eligible 
project, weighted by the severity of nonattainment for the area in 
which the eligible project is located; and
    (2) the total number of vehicles in the bus fleets of all eligible 
projects in areas with a population of 1,000,000 and above funded, 
weighted by the severity of nonattainment for all areas in which those 
eligible projects are located as provided in c. below. The remaining 50 
percent shall be apportioned such that each designated recipient 
receives a grant in an amount equal to the ratio between:
    (a) the number of bus passenger miles of the eligible project of 
the designated recipient, weighted by the severity of nonattainment of 
the area in which the eligible project is located as provided in c. 
below.
    (b) the total number of bus passenger miles of all eligible 
projects in areas with a population of 1,000,000 and above funded, 
weighted by the severity of nonattainment of all areas in which those 
eligible projects are located as provided in c. below.
    b. Areas under 1,000,000 Population. The formula for areas under 
1,000,000 is the same as for areas 1,000,000 and above, except that in 
areas 1,000,000 and above the formula uses a pool of all eligible 
projects in areas with a population of 1,000,000 and above and the 
formula for areas under 1,000,000 uses a pool of all eligible project 
for areas under 1,000,000.
    c. Weighting Factors. The number of clean fuel vehicles in the 
fleet or the number of passenger miles shall be multiplied by a factor 
of:
    (1) 1.0 if, at the time of the apportionment, the area is a 
maintenance area for ozone or carbon monoxide;
    (2) 1.1 if, at the time of the apportionment, the area is 
classified as a marginal ozone nonattainment area or a marginal carbon 
monoxide nonattainment area;
    (3) 1.2 if, at the time of the apportionment, the area is 
classified as a moderate ozone nonattainment area or a moderate carbon 
monoxide nonattainment area;
    (4) 1.3 if, at the time of the apportionment, the area is 
classified as a serious ozone nonattainment area or a serious carbon 
monoxide nonattainment area;
    (5) 1.4 if, at the time of the apportionment, the area is 
classified as a severe ozone nonattainment area or a severe carbon 
monoxide nonattainment area;
    (6) 1.5 if, at the time of the apportionment, the area is 
classified as an extreme ozone nonattainment area or an extreme carbon 
monoxide nonattainment area;
    (7) The fleet and passenger miles for an eligible project shall 
also be multiplied by a factor of 1.2 in those areas that are both 
nonattainment for carbon monoxide and are also classified as 
nonattainment or maintenance for ozone.

    Note: Certain of the carbon monoxide categories are inconsistent 
with the categories established by the Clean Air Act, as amended.

    d. Limitation on Use of Funds and Maximum Grant Amounts. The amount 
of a grant to a designated recipient shall not exceed the lesser of 
$15,000,000 in areas under 1,000,000 population, or $25,000,000 in 
areas with a population of 1,000,000 and above, or 80 percent of the 
total project cost.
    No more than $50,000,000 of the amount made available each year may 
be available to fund clean diesel buses.
    No more than five percent of the amount made available may be 
available to fund retrofitting or replacement of the engines of buses 
that do not meet the clean air standards of the EPA.
    At least five percent of the total program funding must be used for 
the

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purchase or construction of hybrid electric or battery-powered buses or 
facilities designed to service those buses.
4. Availability of Funds
    TEA-21 authorizes $200,000,000 each year for the Clean Fuels 
Formula Program. However, only $100,000,000 each year is within the 
guaranteed funding level. Any amount made available shall remain 
available to a project for one year after the fiscal year for which the 
amount is made available and any funds that remain unobligated at the 
end of the second fiscal year shall be added to the amount made 
available in the following fiscal year.
    FTA will issue guidance and application instructions for this 
program.

B. Job Access and Reverse Commute Program

1. Definition and Eligible Projects
    The Job Access and Reverse Commute Program, to develop additional 
transportation services needed to connect welfare recipients and other 
low income persons to jobs and needed support services, is authorized 
at $150 million annually. However, the amounts under the guaranteed 
funding level start at $50 million in fiscal year 1999 and increases to 
$150 million in fiscal year 2003.
    A Job Access project is a project designed to transport welfare 
recipients and eligible low-income individuals to and from jobs and 
activities related to their employment. The grants may finance capital 
projects and operating cost of equipment, facilities, and associated 
capital maintenance items related to providing access to jobs; promote 
the use of transit by workers with nontraditional work schedules; 
promote the use by appropriate agencies of transit vouchers for welfare 
recipients and eligible low-income individuals; and promote the use of 
employer provided transportation, including the transit pass benefit 
program under section 132 of the Internal Revenue Code of 1986.
    A Reverse Commute project is a project related to the development 
of transportation services designed to transport residents from urban 
areas, urbanized areas and nonurbanized areas to suburban employment 
opportunities. Eligible projects include projects which subsidize the 
costs associated with adding reverse commute bus, train, carpool, van 
routes or service from urbanized and nonurbanized areas to suburban 
work places; subsidize the purchase or lease by a nonprofit 
organization or public agency of a bus or bus dedicated to shuttling 
employees from their residences to a suburban work place; or otherwise 
facilitate the provision of mass transportation services to suburban 
employment opportunities. Planning and coordination are not eligible 
activities under this program.
2. Factors for Consideration
    There will be a competitive grant selection process and TEA-21 
contains specific factors for consideration in awarding grants under 
this program. Factors include:
    a. The percentage of the population in the area to be served by the 
applicant that are welfare recipients;
    b. The need for additional transportation services in the area to 
be served;
    c. The extent to which the applicant demonstrates:
    (1) Coordination with and the financial commitment of existing 
transportation service providers; and
    (2) Coordination with the State agency that administers the State 
program funded under part A of Title IV of the Social Security Act;
    d. Maximum utilization of existing transportation service providers 
and expanded transit networks or hours of service,
    e. Innovative approach that is responsive to identified service 
needs;
    f. The extent to which the applicant for a Job Access project:
    (1) Presents a regional transportation plan for addressing the 
transportation needs of welfare recipients and eligible low income 
individuals, and
    (2) Identifies long-term financing strategies to support the 
services;
    g. The extent to which the applicant demonstrates that the 
community to be served has been consulted in the planning process; and
    h. For Reverse Commute projects, the need for additional services 
identified in a regional transportation plan to transport individuals 
to suburban employment opportunities and the extent to which the 
proposed services will address these needs.
3. Availability of Funds and Grant Requirements
    Of the funds made available under this program, 60 percent shall be 
allocated for eligible projects in urbanized areas with populations of 
200,000 and above. Twenty percent shall be allocated for eligible 
projects in urbanized areas with populations under 200,000. Twenty 
percent shall be allocated for eligible projects in nonurbanized areas.
    The program has a 50 percent federal share. Certain other Federal 
funds may be used to meet the 50 percent local match requirement. The 
requirements of Section 5307, the Urbanized Area Formula Program, apply 
to these grants. All planning requirements apply to these grants.
    FTA will issue further guidance and application instructions for 
this program.

C. Over-the-Road Bus Accessibility Program

    TEA-21 establishes the Rural Transportation Accessibility Incentive 
Program, hereinafter referred to as the Over-the-Road Bus Accessibility 
Program. This program is designed to assist operators of over-the-road 
buses to finance the incremental capital and training costs of 
complying with the Department of Transportation's anticipated final 
rule regarding accessibility of over-the-road buses required by the 
Americans with Disabilities Act.
    Beginning in fiscal year 1999, funding will be available for 
operators of over-the-road buses in intercity fixed route service, 
starting with $2 million in fiscal year 1999 and increasing to $5.25 
million in fiscal year 2003. In addition, beginning in fiscal year 
2000, an additional $6.8 million each year will also be available for 
operators of other over-the-road bus service, including local commuter 
service and charter or tour service. Total funding authorized through 
fiscal year 2003 is $17,500,000 for fixed route over-the-road bus 
operators and $27,200,000 for operators of other over-the road bus 
services. (Note: The pending technical correction bill decreases the 
$6.8 million a year for operators of other over-the-road service to a 
total of $6.8 million for the four years, fiscal years 2000-2003.)
    TEA-21 directs FTA to conduct a national solicitation for 
applications. FTA must select the recipients of grants on a competitive 
basis, considering the following criteria:
    1. The identified need for over-the-road bus accessibility for 
persons with disabilities in the areas served by the operator;
    2. The extent to which the applicant demonstrates innovative 
strategies and financial commitment to providing access to over-the-
road buses to persons with disabilities;
    3. The extent to which the over-the-road bus operator acquires 
equipment required by the final rule prior to any required timeframe in 
the final rule;
    4. The extent to which financing the costs of complying with the 
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road buses presents a financial hardship for the applicant; and
    5. The impact of accessibility requirements on the continuation of 
over-the-road bus service, with particular consideration of the impact 
of the requirements on service to rural areas and for low-income 
individuals.
    The Federal share shall not exceed 50 percent of the project cost. 
The grants under this new program will be subject to all of the terms 
and conditions applicable to intercity bus operators assisted under the 
nonurbanized formula program and any other terms and conditions FTA 
prescribes.
    FTA will issue implementing guidance.

D. Single State Pilot Program for Intercity Rail Infrastructure 
Investment

    TEA-21 establishes a pilot program to determine the benefits of 
using transit funds to support intercity passenger rail service in the 
State of Oklahoma. Any assistance provided to the State of Oklahoma 
under Sections 5307 and 5311 during fiscal years 1998-2003 may be used 
for capital improvements to, and operating assistance for, intercity 
passenger rail service. The Secretary must submit to the House 
Transportation and Infrastructure Committee and Senate Banking, Housing 
and Urban Affairs Committee by October 1, 2002, a report which 
evaluates the pilot program. The evaluation must address the effect of 
the pilot program on alternative forms of transportation within the 
State, the effects on operators of mass transportation and their 
passengers; a calculation of the amount of Federal assistance provided 
for intercity passenger rail service; and an estimate of the benefits 
to intercity passenger rail service.

E. State Infrastructure Banks Pilot Program

    The State Infrastructure Bank program was first authorized as a 
pilot program under the National Highway System Designation Act of 
1995. TEA-21 provides for a revised pilot program in four states, 
California, Florida, Missouri and Rhode Island. These four states may 
enter into new or revised cooperative agreements that specify 
procedures and guidelines for establishing, operating and providing 
assistance from the infrastructure bank. These four states may 
capitalize the infrastructure bank with funds from Section 5307, 5310 
and 5311 as well as with Federal highway funds. There is no limitation 
on the amount of Federal funds that may be used to capitalize the bank 
as there was under the original pilot program.
    TEA-21 specifies that the requirements of Titles 23 and 49, United 
States Code, shall apply to repayments from non-Federal sources to an 
infrastructure bank from projects assisted by the bank. Such repayment 
shall be considered to be Federal funds. Repayments from Federal 
sources will also be subject to the requirements of Titles 23 and 49. 
In addition, for transit projects, the requirements for Sections 5307 
and 5309 projects will apply.

IX. General Information

    For technical assistance purposes, the Fiscal Years 1998-2003 
Apportionment Formula for Sections 5307 and 5311 are contained in Table 
8. Table 9 displays the FTA Fiscal Years 1998-2003 Apportionment 
Formula for the Section 5309 Fixed Guideway Modernization Funding. The 
FTA Fiscal Years 1999-2003 Apportionment Formula for the Section 5308 
Clean Fuels Formula Program is shown on Table 10. Displayed on Table 11 
are the dollar unit values of data derived from the computations of the 
fiscal year 1998 revised Urbanized Area Formula Apportionment and the 
Fixed Guideway Modernization Apportionment.
    This Notice is included on the FTA Home Page and may be accessed at 
www.fta.dot.gov.

    Issued on: June 18, 1998.
Gordon J. Linton,
Administrator.

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[FR Doc. 98-16698 Filed 6-23-98; 8:45 am]
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