[Federal Register Volume 70, Number 229 (Wednesday, November 30, 2005)]
[Notices]
[Pages 71950-72022]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-23322]



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Part III





Department of Transportation





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Federal Transit Administration



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FTA Transit Program Changes, Authorized Funding Levels and 
Implementation of the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users; Notice

Federal Register / Vol. 70, No. 229 / Wednesday, November 30, 2005 / 
Notices

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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration


FTA Transit Program Changes, Authorized Funding Levels and 
Implementation of the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users

[Docket No. FTA-2005-23089]

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Notice.

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SUMMARY: This notice announces changes in the Federal Transit 
Administration (FTA) programs in accordance with SAFETEA-LU, which 
authorizes funds for all of the surface transportation programs of the 
Department of Transportation for Federal fiscal years 2005 through 
2009. This notice provides preliminary implementation instructions and 
guidance for grants under the new and revised programs in FY 2006 and 
invites public comment. The notice also includes tables of unobligated 
(or carryover) amounts for earmarks from prior years under the 
discretionary programs, and tables that list discretionary program 
earmarks authorized under SAFETEA-LU.

DATES: Comments on the content of this notice will be received until 
December 30, 2005. Late filed comments will be considered to the extent 
practicable.

ADDRESSES: You may submit comments [identified by DOT DMS Docket Number 
FTA-2005-23089] by any of the following methods:
    1. Web Site: http://dms.dot.gov. Follow the instructions for 
submitting comments on the DOT electronic docket site. Fax: 202-493-
2251.
    2. Mail: Docket Management Facility; U.S. Department of 
Transportation, 400 Seventh Street, SW., Nassif Building, PL-401, 
Washington, DC 20590-0001.
    3. Hand Delivery: Room PL-401 on the plaza level of the Nassif 
Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 
p.m., Monday through Friday, except Federal holidays.
    Instructions: You must include the agency name (Federal Transit 
Administration) and the docket number (FTA-2005-23089). You should 
submit two copies of your comments if you submit them by mail. If you 
wish to receive confirmation that FTA received your comments, you must 
include a self-addressed stamped postcard. Note that all comments 
received will be posted without change to the Department's Docket 
Management System (DMS) Web site located at http://dms.dot.gov. This 
means that if your comment includes any personal identifying 
information, such information will be made available to users of DMS.

FOR FURTHER INFORMATION CONTACT: For general information about this 
notice contact Mary Martha Churchman, Director, Office of Resource 
Management and State Programs, (202) 366-2053. Please contact the 
appropriate FTA regional office, from the list in Appendix A, for 
grantee specific requests for information or technical assistance.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Overview
II. FY 2006 Funding for FTA Programs
    A. Authorized Funding for FY 2006
    B. Status of FY 2006 Funding
    C. Project Management Oversight Takedown
III. SAFETEA-LU: FY 2006-2009 Authorized Funding Levels and Project 
Authorizations
IV. SAFETEA-LU: Highlights of Cross-Cutting Changes
    A. Definitional Changes
    1. Mobility Management
    2. Security Planning, Training, and Drills
    3. Debt Service Reserve
    4. Intercity Bus and Intercity Rail
    5. Definition of Public Transportation
    B. Cross-cutting Programmatic Requirements and Changes
    1. State Infrastructure Bank
    2. Coordination
    3. Public Participation Planning Requirement
    4. Public Hearings
    5. Labor Protection
    6. Buy America
    7. Procurement
    8. Pre-award/Post-Delivery Reviews
    9. Charter Service and School Bus
    10. Revenue Bonds as Local Match
    11. Government's Share of Cost of Equipment and Facilities for 
ADA and Clean Air Act Compliance
V. SAFETEA-LU: Summary of New Programs and Formulas
    A. New Freedom (49 U.S.C. 5317)
    B. Alternative Transportation in the Parks and Public Lands (49 
U.S.C. 5320)
    C. Small Starts (Component of the Section 5309 New Starts 
Program)
    D. Alternative Analysis (49 U.S.C. 5339)
    E. Public Transportation on Indian Reservations (49 U.S.C. 
5311(c)(1))
    F. Growing States and High Density States Formula Factors (49 
U.S.C. 5340)
VI. Program Specific Information and Requests for Comments
    A. Metropolitan Planning Program (49 U.S.C. 5303)
    B. Statewide Planning and Research Program (49 U.S.C. 5304)
    C. Urbanized Area Formula Program (49 U.S.C. 5307)
    D. Clean Fuels Grant Program (49 U.S.C. 5308)
    E. Capital Investment Program (49 U.S.C. 5309)--Fixed Guideway 
Modernization
    F. Capital Investment Program (49 U.S.C. 5309)--Bus and Bus-
Related Facilities
    G. Capital Investment Program (49 U.S.C. 5309)--New Starts
    H. Special Needs of Elderly Individuals and Individuals with 
Disabilities Program (49 U.S.C. 5310)
    I. Nonurbanized Area Formula Program (49 U.S.C. 5311)
    J. Rural Transportation Assistance Program (49 U.S.C. 
5311(b)(2))
    K. Public Transportation on Indian Reservations Program (49 
U.S.C. 5311(c)(1))
    L. National Research Program (49 U.S.C. 5314)
    M. Job Access and Reverse Commute Program (49 U.S.C. 5316)
    N. New Freedom Program (49 U.S.C. 5317)
    O. Alternative Transportation in the Parks and Public Lands 
Program (49 U.S.C. 5320)
    P. Alternative Analysis Program (49 U.S.C. 5339)
    Q. Growing States and High Density States Formula Factors (49 
U.S.C. 5340)
    R. Over-the-Road Bus Accessibility Program (Pub. L. 105-85, 
Section 3038)
VII. FTA National Planning Emphasis Areas
VIII. FTA Policy and Procedures for FY 2006 Grants
    A. Automatic Pre-Award Authority To Incur Project Costs
    B. Letter of No Prejudice (LONP) Policy
    C. FTA FY 2006 Annual List of Certifications and Assurances
    D. FHWA Funds Used for Transit Purposes
    E. Consolidated Planning Grants
    F. Grant Application Procedures
Tables
    1. SAFETEA-LU Authorized Programs and Funding Levels
    2. SAFETEA-LU Authorized Section 5309 New Starts Projects
    3. SAFETEA-LU Authorized Section 5339 Alternative Analysis 
Projects
    4. SAFETEA-LU Authorized Section 5309 Bus and Bus-Related 
Facilities Projects
    5. SAFETEA-LU Authorized Section 5308 Clean Fuels Projects
    6. Prior Year Unobligated Section 5309 Bus and Bus-Related 
Facilities Allocations
    7. Prior Year Unobligated Section 5309 New Starts Allocations
    8. SAFETEA-LU Authorized Section 5314 National Research Program 
Projects
    9. Prior Year Unobligated Job Access and Reverse Commute 
Allocations
Appendices
    Appendix A--FTA Regional Offices
    Appendix B--Specific Questions and Issues for Comment

I. Overview

    This document contains important information about new FTA programs 
authorized by the Safe, Accountable, Flexible, Efficient Transportation 
Equity Act: A Legacy for Users, (SAFETEA-LU) (Pub. L. 109-059), signed 
into law by President Bush on August 10, 2005, and changes to programs 
reauthorized by that legislation. It also contains information on how 
FTA plans to administer the transit programs

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discussed in this document, in fiscal year (FY) 2006. For each FTA 
program included, we have provided information on the SAFETEA-LU 
authorized funding levels for fiscal years 2006-2009, the basis for 
apportionment or allocation for funds, requirements specific to the 
program, period of availability of funds, and other program 
information. The document also includes a section that introduces 
planning emphasis areas for FY 2006. A separate section of the document 
provides information on pre-award authority and other requirements and 
guidance applicable to FTA program administration. Finally, the notice 
includes tables that show unobligated or carryover funding available, 
in FY 2006, from prior years under certain discretionary programs, and 
tables that list authorized project earmarks under SAFTEA-LU.
    Information in this document includes references to the existing 
FTA program guidance circulars. While some information in the circulars 
has been superseded by new provisions in SAFETEA-LU, the circulars 
remain a resource for program guidance in most areas. FTA intends to 
revise the circulars, with an opportunity for public comment.
    To supplement the guidance provided in this document FTA is 
preparing answers to frequently asked questions (FAQs), on SAFETEA-LU 
changes and impacts, from its grantees, stakeholders, and other 
interested parties. These FAQs will be posted on the FTA Web site at 
http://www.fta.dot.gov when they become available.
    Throughout the document we have included specific questions on 
which we seek comment, and we invite your comments to the docket on any 
information provided in this notice. A list of the specific questions 
or issues can be found in Appendix B.

II. FY 2006 Funding for FTA Programs

A. Authorized Funding for FY 2006

    SAFETEA-LU provides a combination of trust and general funds that 
total $8.6 billion for FTA programs for FY 2006. Table 1 of this 
document shows the authorized funding for the FTA programs for the 
fiscal years 2006-2009. This notice provides a narrative explanation of 
the funding levels and other factors affecting the apportionments and 
allocations for each program.

B. Status of FY 2006 Funding

    When the FY 2006 appropriations bill is passed and enacted into 
law, FTA will publish another notice that will include a table for each 
program that contains the apportionments or allocations, based on the 
program funding level in the FY 2006 appropriations act. At the time 
this notice was prepared the agency was operating under a Continuing 
Resolution and only a small fraction of the FY 2006 funds authorized in 
SAFETEA-LU was available for FTA programs and administrative expenses. 
No FY 2006 program funds have been apportioned at this time. Congress 
recently took action on the FY 2006 Appropriations Act and we will 
publish the FY 2006 apportionments and allocations shortly.

C. Project Management Oversight Takedown

    FTA draws money from funds appropriated to certain FTA programs for 
program oversight activities conducted by the agency. The funds are 
used to provide necessary oversight activities, including oversight of 
the construction of any major project under these statutory programs; 
to conduct safety and security, civil rights, procurement, management 
and financial reviews and audits; and to provide technical assistance 
to correct deficiencies identified in compliance reviews and audits.
    49 U.S.C. 5327 authorizes the takedown of funds from FTA programs 
for project management oversight. SAFETEA-LU increased the amount that 
may be set-aide for such activities above the levels established under 
TEA-21 and identified additional programs to which the oversight 
takedown applies. SAFETEA-LU provides oversight takedowns at the 
following levels: 0.5 percent of Planning funds, 0.75 percent of 
Urbanized Area Formula funds, 1 percent of Capital Investment funds, 
0.5 percent of Special Needs of Elderly Individuals and Individuals 
with Disabilities formula funds, 0.5 percent of Nonurbanized Area 
Formula funds, and 0.5 percent of Alternative Transportation in the 
Parks and Public Lands funds. Language in section 5327 also specifies 
the addition of ``safety and security management'' to the list of 
project management plan requirements.

III. SAFETEA-LU: FY 2006-2009 Authorized Funding Levels and Project 
Authorizations

    SAFETEA-LU provides a combination of trust and general fund 
authorizations that total $45.3 billion for public transportation for 
fiscal years 2005-2009 ($52.6 billion over the six year period 2004-
2009). Just over 80 percent is derived from the Mass Transit Account, 
with only New Starts, Research and FTA Administrative funding coming 
from the General Fund. All funds, including the General Fund portion, 
are guaranteed, which means that the guaranteed annual levels are 
already ``paid for'' under Congressional budgetary rules. This assures 
that in each year's appropriations process the specified amount of 
authorized funding will be available each year for transit programs. 
See Table 1 for the guaranteed funding levels by program.
    Previously, under TEA-21, all the FTA programs were funded with 
both Mass Transit Account and General Funds. Because of this change in 
the structure of FTA's accounts, except for New Starts and Research 
program grants, FTA will not be able to combine FY 2006 funds in the 
same grant with funds appropriated in prior years. See section VIII F 
below for grant application procedures.
    SAFETEA-LU includes 405 New Starts project designations for fiscal 
years 2006-2009, many of which are listed more than once. The total 
funding authorized for these projects is $5.49 billion. Thirty-one (31) 
projects are authorized for Full Funding Grant Agreements (FFGAs); 38 
projects are authorized for Final Design (FD) and Construction, and 264 
projects are authorized for Preliminary Engineering (PE). Dollar 
amounts are specified by fiscal year for each FFGA project. No funding 
amounts are specified for the FD and construction and PE projects.
    Fifty-two New Starts project designations listed have a total 
amount specified but this amount is not identified with any particular 
fiscal year. In addition, 18 New Starts projects for Alternative 
Analysis under section 5339 are designated and amounts authorized for 
fiscal years 2006 and 2007 specified. The Alaska and Hawaii Ferry Boat 
and Denali Commission projects are also authorized. All New Starts 
earmarks are listed in Table 2 and Table 3 by State, including the 
dollar amount if specified.
    Also authorized are project specific allocations for 646 Bus and 
Bus-Related Facilities projects totaling $1,819,662,341 for fiscal 
years 2006-2009. These projects and amounts are displayed in Table 4.
    Under the Clean Fuels program, 16 projects totaling $78,385,000 are 
earmarked for funding for FY 2006-2009. These projects and amounts are 
displayed in Table 5.
    It should be noted that projects earmarked in SAFETEA-LU are 
subject to Congressional actions in later appropriations bills and 
funding is not available for immediate obligation. Estimates of formula 
program funding

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levels for fiscal years 2006-2009, by State and urbanized area (UZA), 
are available on the FTA Web site. These numbers are for planning 
purposes only as they will be revised when each year's appropriation 
bill is enacted but may be used for the purpose of programming 
metropolitan transportation improvement programs (TIPs) and statewide 
transportation improvement programs (STIPs).
    In the estimates of formula funding for UZAs, for the JARC and New 
Freedom programs, FTA included the amount of funding attributable to 
each UZA less than 200,000 in population (small UZA) low income 
individuals and individuals with disabilities, respectively. These 
amounts were provided, for information purposes only. Under these 
programs, funds for the UZAs under 200,000 in population will be 
apportioned to the state for competitive selection of projects. 
Similarly, we estimated the amount of funding that might go to each 
State under the Public Transportation on Indian Reservations Program 
(49 U.S.C. 5311(c)(1) also referred to as the Tribal Transit Program in 
this document), based on tribal population. But these funds will not be 
apportioned to the States and the process for apportioning them among 
the Tribes has not yet been determined.

IV. SAFETEA-LU: Highlights of Cross-Cutting Changes

A. Definitional Changes

1. Mobility Management
    SAFETEA-LU added ``mobility management'' to the list of capital 
projects at 5302(a)(1)(L). This allows ``short-range planning and 
management activities and projects for improving coordination among 
public transportation and other transportation service providers 
carried out by a recipient or subrecipient'' to be funded as a capital 
project. The definition excludes the actual costs of operating public 
transportation services, but allows the costs of planning and 
coordination with human service transportation to be treated as capital 
rather than operating costs.
2. Security Planning, Training, and Drills
    Four new eligible capital activities were added at 5302(a)(1)(J). 
These include projects ``to refine and develop security and emergency 
response plans, projects aimed at detecting chemical and biological 
agents in public transportation, the conduct of emergency response 
drills with public transportation agencies and local first response 
agencies, and security training for public transportation employees.'' 
Expenses related to transit operations, other than those incurred in 
conducting emergency response drills or security training, are excluded 
from this definition and will continue to be eligible only as operating 
in those areas eligible to use FTA funds for operating assistance.
3. Debt Service Reserve
    SAFETEA-LU allows recipients to be reimbursed from section 5309 
funds for deposits of bond proceeds in a debt service reserve. The Act 
also allows up to ten recipients to be reimbursed from section 5307 
funds for bond proceeds deposited in a debt service reserve established 
with a bondholders' trustee. These provisions will have the effect of 
reducing grantees' out of pocket bond issuance costs due to the 
reimbursement for the cost of the debt service reserve. The new capital 
definition of debt service reserve is found at 5302(a)(1)(K) and the 
limitations on its use are at sections 5323(e)(3) and (4).
4. Intercity Bus and Intercity Rail
    The definition of an eligible joint development capital project in 
section 5302(A)(1)(G) has been expanded to include ``construction, 
renovation, and improvement of intercity bus and intercity rail 
stations and terminals.'' Further, the limitation that made 
``commercial revenue-producing facilities'' ineligible for FTA 
assistance has been lifted with respect to intercity bus stations or 
terminals. Intercity bus stations and terminals are not required to 
provide a fair share of revenue for public transportation that will be 
used for public transportation.
    The result of these changes is that FTA funds can now be used for 
all aspects of intercity bus and rail facilities in facilities (such as 
intermodal terminals) which meet the criteria in section 5302(a)(1)(G) 
for joint development projects (physical and functional relationship to 
public transportation). Further, $35 million per year is set aside in 
the section 5309 Bus and Bus-Related Facilities program for intermodal 
terminals, including the intercity bus portions of those terminals.
5. Definition of Public Transportation
    Throughout SAFETEA-LU, the term public transportation is used 
wherever the FTA statute previously referred to mass transit or mass 
transportation. The definition of public transportation at 5302(a)(10) 
was also modified to specifically exclude intercity bus transportation. 
This change does not affect the eligibility of intercity bus service 
under the rural program (section 5311) or the over-the-road bus 
accessibility program (TEA-21, section 3038). The definition now also 
specifically excludes intercity passenger rail transportation provided 
by AMTRAK. The intercity bus and intercity rail portion of intermodal 
terminals, however, is an eligible capital cost under 49 U.S.C. 
5302(a)(1)(G).

B. Cross-cutting Programmatic Requirements and Changes

1. State Infrastructure Bank
    SAFETEA-LU establishes a new State Infrastructure Bank (SIB) 
program under which all States, Puerto Rico, the District of Columbia, 
American Samoa, Guam, the Virgin Islands, and the Commonwealth of the 
Northern Mariana Islands are authorized to enter into cooperative 
agreements with the Secretary of Transportation to establish financial 
entities that provide various types of transportation infrastructure 
credit assistance for fiscal years 2005-2009. The new program is a 
continuation and expansion of similar programs created by the National 
Highway System (NHS) Act in 1995 and the TEA-21 legislation of 1998. It 
gives States the capacity to increase the efficiency of their 
transportation investment and significantly leverage Federal resources 
by attracting non-Federal public and private investment. The program 
provides greater flexibility to the States by allowing other types of 
project assistance in addition to grant assistance.
2. Coordination
    Under three FTA formula programs [the Special Needs of Elderly 
Individuals and Individuals with Disabilities Program (section 5310), 
Job Access and Reverse Commute (section 5316), and New Freedom (section 
5317)], there is a requirement that the designated recipient 
competitively select projects and that the projects must be derived 
from a locally developed coordinated public transit/human service 
transportation plan. Public transit operators, including those funded 
under both the urbanized and non-urbanized formula programs (sections 
5307 and 5311) are expected to be participants in the local planning 
process for coordinated public transit/human service transportation. 
See the specific programs below for more information about the planning 
requirements as it relates to the three programs. See also the 
metropolitan planning public participation requirement below.

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3. Public Participation Planning Requirement
    Metropolitan Planning Organizations (MPOs) must develop and utilize 
a ``participation plan'' that provides reasonable opportunities for the 
interested parties to comment on the content of the metropolitan 
transportation plan and metropolitan TIP. This requirement is intended 
to afford parties who participate in the metropolitan planning process 
a specific opportunity to comment on the plan prior to its approval, 
including governmental agencies and nonprofit organizations that 
receive Federal assistance from a source other than the Department of 
Transportation (DOT) to provide non-emergency transportation services 
and recipients of assistance under section 204 of Title 23 U.S.C. The 
participation plan must be in place prior to MPO adoption of 
transportation plans and TIPs addressing SAFETEA-LU provisions.
4. Public Hearings
    The public hearing requirement in 49 U.S.C. 5323(b) for capital 
projects was changed by SAFETEA-LU. Formerly, an opportunity for a 
public hearing was required on a section 5309 grant application if the 
grant would substantially affect the community or its mass 
transportation service. Many of the notices published under this 
requirement did not ultimately result in a hearing being held.
    SAFETEA-LU associates more clearly the public involvement and 
hearing requirements for capital projects with the environmental review 
required by the National Environmental Policy Act (NEPA) and its 
implementing regulations. It also broadens the requirement to apply to 
all capital projects (as defined in section 5302). Now, the grant 
applicant must provide an adequate opportunity for public review and 
comment on a capital project, and, after providing notice, must hold a 
public hearing on the project if the project affects significant 
economic, social, or environmental interests. These requirements will 
be satisfied through compliance with the NEPA requirements for a public 
scoping process, public review and comment on NEPA documents, and a 
public hearing on every draft environmental impact statement (EIS). FTA 
will also require a public hearing on environmental assessments (EAs) 
that have a high probability of being elevated to EISs.
    Section 5323(b) must be read in concert with section 5324(b) which 
states that FTA must review the public comments and hearing transcript 
to ascertain that an adequate opportunity to present views was given to 
all parties having a significant economic, social, or environmental 
interest in the project, and that FTA must make a written finding to 
this effect.
5. Labor Protection
    SAFETEA-LU codified in 5333(b) streamlined labor protection 
arrangements already used by the Department of Labor (DOL) in 
certifying FTA grants for purchase of like-kind equipment or facilities 
or non-material grant amendments. It also codified existing practice 
when a contractor is changed through competitive bidding. In section 
5311, the use of a special warranty is written into the law. Awards 
under two new programs, New Freedom and Alternative Transportation in 
Parks and Public Lands, will not be required to be certified by DOL.
6. Buy America
    The Buy America stipulation is intended to ensure that Federal 
grants stimulate domestic economic activity. FTA funds must be used for 
goods that must be produced or manufactured in the United States or 
with specific products, and have a defined percent of domestic content. 
Four changes from the previous law are that SAFETEA-LU:
    <bullet> Requires the Secretary of Transportation to issue a 
written justification for public interest waivers on Buy America 
requirements. (Under the law, he may waive the Buy America requirements 
if they are deemed inconsistent with the public interest). The 
Secretary must publish the written justification in the Federal 
Register and provide the public with a reasonable period of time for 
notice and comment.
    <bullet> Clarifies that a party adversely affected by a FTA 
decision under the Buy America provisions has the right to seek 
administrative review.
    <bullet> Repeals the general waiver of sub-sections (b) and (c) of 
Appendix A of section 661.7.
    <bullet> Requires a rulemaking within 180 days clarifying or 
defining the following Buy America requirements:
    1. Microprocessors; Buy America requirements have been waived for 
microprocessors since few are manufactured in the United States. The 
Secretary is directed to apply the waiver to a device that is solely 
for the purpose of processing and storing data and not extended to a 
product containing the microprocessor.
    2. Defining the term ``end product'' for non-rolling stock. Does 
the end product serve a purpose by itself or with other end products on 
an interoperative basis? A product that does not work with products of 
other manufacturers is part of that manufacturers system that is the 
end product. A list of systems and end products will be developed.
    3. Defining the term ``negotiated procurement'' and determine Buy 
America compliance on the basis of the certification with the final 
offer.
    4. Defining the term ``contractor''.
    5. Clarifying that a grant recipient may request a non-availability 
waiver after the contract award if the contractor has made a 
certification of compliance with the requirements in good faith. The 
contractor must have certified that it can meet the Buy America 
requirements before being awarded a contract. If the contractor later 
finds that parts are not available to meet the requirement, the grantee 
may now request a Buy America waiver.
7. Procurement
    SAFETEA-LU recodified FTA's procurement requirements in section 
5325 of Title 49 U.S.C. Section 5325(a) establishes full and open 
competition as the basic requirement for FTA-funded third party 
contracts. Section 5325(b), which covers architectural, engineering, 
and design contracts, has been modified to match similar language in 
Title 23 U.S.C., on reciprocity of audited indirect cost rates. Section 
5325(c) on use of other-than-low-bid procurement has been reenacted. 
Language on Turnkey Contracting, formerly in section 5326, now appears 
as section 5325(d), and is re-titled ``Design-Build'', reflecting more 
up-to-date terminology. Provisions formerly in section 5326 governing 
rolling stock procurements now appear in sections 5325(e) and (f). 
Section 5325(g) now allows access by DOT or the Government 
Accountability Office (GAO) to any contract-related record, not just 
those in sole-source procurements. Section 5325(h) continues the 
prohibition on exclusionary or discriminatory procurements. A new 
section 5325(i) prohibits application of State laws requiring bus 
purchases to go through in-State bus dealers from applying to projects 
assisted under the FTA program. Finally, section 5325(j) codifies in 
law the requirement that contracts be awarded only to ``responsible'' 
contractors. Grantees are required to assess the integrity of the 
contractor, compliance with public policy, the contractor's financial 
and technical resources, and the contractors past performance, 
particularly as reported in the Contractor Performance Assessment 
Report required under section 5309(l)(2).

[[Page 71954]]

8. Pre-Award/Post-Delivery Reviews
    Under the current Buy America provisions, there is a requirement 
for a resident factory inspector for rolling stock procurements of 
greater than 10 buses. SAFETEA-LU eliminates the requirement for a 
resident factory inspector for rolling stock procurements of 20 
vehicles or less for use in rural (other than urbanized) areas, or UZAs 
of 200,000 population or less.
9. Charter Service and School Bus
    SAFETEA-LU section 3023(d) amended 49 U.S.C., section 5323(d)(2) 
and provided new remedies for violations of charter service. The 
amended provision states that the Secretary shall bar a recipient or an 
operator from receiving Federal transit assistance in an amount the 
Secretary considers appropriate if the Secretary finds a pattern of 
violations of the agreement. The previous provision stated that the 
Secretary could bar a recipient from receiving further assistance when 
the Secretary found a continuing pattern of violations of the 
agreement. The new provision allows for more flexibility. Under the 
prior law the Secretary could totally bar a recipient from receiving 
further financial assistance, but this penalty was so harsh that it was 
only rarely invoked. Under SAFETEA-LU the Secretary can determine a 
penalty less than a complete bar of financial assistance; the Secretary 
shall bar an operator from receiving assistance in an amount the 
Secretary considers appropriate.
    In addition, the Conference Report for SAFETEA-LU stated that the 
conferees directed FTA to initiate a negotiated rulemaking seeking 
public comment on the charter service regulation implementing 49 
U.S.C., 5323(d) and to consider the following issues: (1) Whether 
public transit agencies can provide community-based charter services 
directly to local governments and private non-profit agencies that 
would not otherwise be served in a cost effective manner by private 
operators; (2) how can the administration and enforcement of charter 
bus provisions be better communicated to the public, including use of 
internet technology; (3) improve the enforcement of violations; and (4) 
improve the complaint and administrative appeals process. FTA has 
initiated the negotiated rulemaking process.
    SAFETEA-LU section 3023(f) amended 49 U.S.C., 5323(f) and provided 
new remedies for violations of the school bus transportation provision. 
The amended provision states that if the Secretary finds a violation, 
the Secretary shall bar a recipient or operator from receiving Federal 
transit assistance in an amount the Secretary considers appropriate. 
The previous provision stated that in the case of a violation, an 
applicant could not receive other mass transportation financial 
assistance. The new provision allows for more flexibility. Under the 
prior law the penalty was so severe that it was only rarely invoked. 
Under SAFETEA-LU the Secretary can determine a penalty less than a 
complete bar of financial assistance; the Secretary shall bar an 
operator from receiving assistance in an amount the Secretary considers 
appropriate.
10. Revenue Bonds as Local Match
    Originally allowed in TEA-21, revenue bonds may now be used as 
local match, provided that the grantee maintains a greater level of 
local transit investment in the subsequent three years (as demonstrated 
in the TIP) than as in the current and prior two years. This provision 
in 5323(e) allows bond proceeds, secured by the revenues of a transit 
capital project, to be used as local match for that project.
11. Government's Share of Cost of Equipment and Facilities for ADA and 
Clean Air Act Compliance
    The provision allowing a 90 percent Federal share for the 
incremental cost of compliance with the Americans with Disabilities Act 
(ADA) or Clean Air Act (CAA) was expanded to include vehicle-related 
facilities as well as equipment at section 5323(i). Under the provision 
allowing the Secretary ``to determine through practicable 
administrative procedures, the costs of such equipment or facilities 
attributable to compliance with those Acts'', FTA previously computed 
an 83 percent composite match for vehicle-related equipment. Given 
changes in technology, FTA may revisit that calculation, but for the 
time being, grantees may use the 83 percent share. FTA seeks public 
comment on the continued use of the 83 percent share. Also, the 
administratively determined 83 percent Federal share does not apply to 
facilities, for which the costs are more variable. Grantees may apply 
for the 90 percent share of the actual incremental costs of vehicle-
related facility improvements related to ADA or CAA compliance, but FTA 
requests that grantees provide supporting documentation for that 
request. Until FTA develops guidance, the eligibility of facility 
related costs at the higher share will be reviewed on a case-by-case 
basis as part of the grant application process.

V. SAFETEA-LU: Summary of New Programs and Formulas

A. New Freedom (49 U.S.C. 5317)

    The New Freedom program provides formula funding for new public 
transportation services and public transportation alternatives beyond 
those required by the Americans with Disabilities Act of 1990 that 
assist individuals with disabilities with transportation, including 
transportation to and from jobs and employment support services. 
Details are provided in section VI N below.

B. Alternative Transportation in the Parks and Public Lands (49 U.S.C. 
5320)

    SAFETEA-LU provides $22 million annually for alternative 
transportation projects to enhance the protection of national parks and 
public lands and increase the enjoyment of those visiting the parks and 
public lands by ensuring access to all, including persons with 
disabilities, improving conservation and park and public land 
opportunities in urban areas through partnering with State and local 
governments, and improving park and public land transportation 
infrastructure. The program is to be implemented by FTA in consultation 
with the Department of the Interior and other Federal land management 
agencies.
    The Secretary of Transportation will develop cooperative 
arrangements with the Secretary of the Interior that provide: (1) 
Technical assistance; (2) interagency and multidisciplinary teams to 
develop alternative transportation policy, procedures, and 
coordination; and, (3) procedures and criteria relating to the 
planning, selection, and funding of qualified projects and the 
implementation and oversight of selected projects. The Secretary of the 
Interior, after consultation with and in cooperation with the Secretary 
of Transportation, will determine the final selection and funding 
levels of an annual program of qualified projects.

C. Small Starts (Component of the Section 5309 New Starts Program)

    SAFETEA-LU specifies a new category of projects to be funded 
separately out of the section 5309 New Starts program. This new 
category encompasses smaller scale projects, referred to as Small 
Starts, and has been authorized at a funding level of $200 million per 
year, beginning in FY 2007.
    Projects requesting less than $75 million in section 5309 New 
Starts funds with a total project cost less than $250 million will be 
eligible to receive funds under the new Small Starts provision. 
SAFETEA-LU lays out a

[[Page 71955]]

simplified evaluation and rating process that FTA will use to support 
funding decisions for Small Starts projects. The statute specifies both 
cost-based and project-definition-based eligibility requirements. The 
definition of fixed guideway capital project to be applied in Small 
Starts has been expanded to include substantial corridor bus projects 
that either operate in a separate right of way during peak hours or 
contain significant investment in corridor-based bus improvements. 
Small Starts projects must also be the result of planning and 
alternatives analysis.
    The transit program statute provides for an evaluation process for 
proposed Small Starts projects that include a subset of the evaluation 
criteria specified for traditional New Starts projects. The Small 
Starts evaluation criteria in the statute include:
    <bullet> Transit supportive land use,
    <bullet> Cost-effectiveness,
    <bullet> Reliability of cost and ridership estimates,
    <bullet> Effect on economic development, and
    <bullet> Other factors that the Secretary determines are 
appropriate.
    Currently, projects requesting less than $25 million in New Starts 
funding are exempt from the annual evaluation and rating process. Under 
the new statute, this exemption no longer applies once a regulation is 
issued for Small Starts. All eligible projects that meet the 
aforementioned Small Starts cost criterion will be rated and evaluated 
according to the Small Starts process. SAFETEA-LU also calls for a 
simplified project development process to be applied to Small Starts 
projects. SAFETEA-LU requires that FTA issue regulations establishing 
an evaluation and rating process for the Small Starts process. The 
Small Starts Advance Notice of Proposed Rulemaking will be issued soon.

D. Alternatives Analysis (49 U.S.C. 5339)

    Alternatives Analysis is no longer included in the eight percent of 
the section 5309 New Starts program that can be used for projects prior 
to FD and Construction. Instead, $25 million annually is provided for 
Alternatives Analysis grants under section 5339. As before, 
Metropolitan Planning funds and Urbanized Area Formula funds can also 
be used to support alternatives analysis. The procedures grantees 
should use to apply for section 5339 funds are referred to in section 
VI P below.

E. Public Transportation on Indian Reservations (49 U.S.C. 5311(c)(1))

    SAFETEA-LU creates a new Tribal Transit program as a takedown under 
the section 5311 program. Forty-five million dollars is authorized for 
fiscal years 2006-2009, growing from $8 million annually to $15 
million. The funds are to be apportioned to the Tribes, not to the 
States, for capital and operating assistance for rural transit and 
rural intercity bus service. FTA will develop procedures for the Tribal 
Transit program in consultation with tribal leaders and other 
interested stakeholders.
    In addition to funding under the Tribal Transit program, States 
must continue to include the Tribes in the equitable distribution of 
the section 5311 funds apportioned to the States. Indian Tribes are 
established as direct recipients under section 5311 for funding from 
the States' apportionment as well as from the new Tribal Transit 
program.
    See section VI K for additional information and for specific 
questions on which FTA seeks comments from Tribes and other interested 
stakeholders.

F. Growing States and High Density States Formula Factors (49 U.S.C. 
5340)

    SAFETEA-LU establishes new Growing States and High Density States 
formula factors to distribute funds to the section 5307 and section 
5311 programs. One-half of the funds are made available under the 
Growing States factors and are apportioned by a formula based on State 
population forecasts for 15 years beyond the most recent Census. 
Amounts apportioned for each State are then distributed between UZAs 
and nonurbanzied areas based on the ratio of urbanized/nonurbanzied 
population within each State. The High Density States factors 
distribute the other half of the funds to States with population 
densities in excess of 370 persons per square mile. These funds are 
apportioned only to UZAs within those States. Additional details on the 
Growing States and High Density States formula and factors are 
discussed in section VI Q below.

VI. Program Specific Information and Requests for Comments

A. Metropolitan Planning Program (49 U.S.C. 5303)

    Section 5303 authorizes a cooperative, continuous, and 
comprehensive planning program for transportation investment decision-
making at the metropolitan area level. State Departments of 
Transportation and MPOs may receive funds for planning projects that 
support the economic vitality of the metropolitan area, especially by 
enabling global competitiveness, productivity, and efficiency; 
increasing the safety and security of the transportation system for 
motorized and non-motorized users; increasing the accessibility and 
mobility options available to people and for freight; protecting and 
enhancing the environment, promoting energy conservation, and improving 
quality of life; enhancing the integration and connectivity of the 
transportation system, across and between modes, for people and 
freight; promoting efficient system management and operation; and 
emphasizing the preservation of the existing transportation system.
1. Authorized Amounts
    SAFETEA-LU authorizes the following amounts to carryout section 
5305 Planning programs for fiscal years 2006-2009:
[GRAPHIC] [TIFF OMITTED] TN30NO05.001

    As specified in law, 82.72 percent of the amounts authorized for 
section 5305 are allocated to the Metropolitan Planning program. The 
table below shows the amount of funding authorized under section 5305 
to be allocated to the Metropolitan Planning program.
[GRAPHIC] [TIFF OMITTED] TN30NO05.000


[[Page 71956]]


2. Basis for Formula Apportionment
    FTA allocates Metropolitan Planning funds to the States according 
to a statutory formula. Eighty percent of the funds are distributed to 
the States as a basic allocation based on each State's UZA population, 
based on the most recent Census. The remaining 20 percent is provided 
to the States as a supplemental allocation based on an FTA 
administrative formula to address planning needs in the larger, more 
complex UZAs. The amount published for each State is a combined total 
of both the basic and supplemental allocation.
3. Requirements
    The State allocates Metropolitan Planning funds to MPOs in UZAs or 
portions thereof to provide funds for projects included in an annual 
work program (the Unified Planning Work Program, or UPWP) that includes 
both highway and transit planning projects. Each State has either 
reaffirmed or developed, in consultation with their MPOs, a new 
allocation formula, as a result of the 2000 Census. The State 
allocation formula may be changed annually, but any change requires 
approval by the FTA regional office before grant approval. Program 
guidance for the Metropolitan Planning Program is found in FTA Circular 
C8100.1B, Program Guidance and Application Instructions for 
Metropolitan Planning Program Grants, dated October 25, 1996. FTA is in 
the process of updating this circular to incorporate changes resulting 
from language in SAFETEA-LU.
4. Period of Availability
    The funds apportioned under the Metropolitan Planning program will 
remain available to be obligated by FTA to recipients for four fiscal 
years--which includes the year of apportionment plus three additional 
years. Any apportioned funds that remain unobligated at the end of this 
period will revert to FTA for reapportionment under the program.
5. Other Program Information
    Sections VII and VIII F of this document provide guidance and 
information specific to FTA planning programs, including the 
Metropolitan Planning program. Please refer to those sections for 
additional information relevant to this program.

B. Statewide Planning and Research Program (49 U.S.C. 5304)

    This program provides financial assistance to States for Statewide 
planning and other technical assistance activities (including 
supplementing the technical assistance program provided through the 
Metropolitan Planning program), planning support for nonurbanized 
areas, research, development and demonstration projects, fellowships 
for training in the public transportation field, university research, 
and human resource development.
1. Authorized Amounts
    SAFETA-LU authorizes the following amounts to carryout section 5305 
Planning programs for fiscal years 2006-2009:
[GRAPHIC] [TIFF OMITTED] TN30NO05.002

    As specified in law, 17.28 percent of the amounts authorized for 
section 5305 are allocated to the Statewide Planning and Research 
program. The table below shows the amount of funding authorized under 
section 5305 to be allocated to the Statewide Planning and Research 
program.
[GRAPHIC] [TIFF OMITTED] TN30NO05.003

2. Basis for Apportionment Formula
    Funds are apportioned to States by a statutory formula that is 
based on information received from the latest decennial census, and the 
State's UZA population as compared to the UZA population of all States. 
However, a State must receive at least 0.5 percent of the amount 
apportioned under this program.
3. Requirements
    Funds are provided to States for statewide planning and research 
programs. These funds may be used for a variety of purposes such as 
planning, technical studies and assistance, demonstrations, management 
training, and cooperative research. In addition, a State may authorize 
a portion of these funds to be used to supplement Metropolitan Planning 
funds allocated by the State to its UZAs, as the State deems 
appropriate. Program guidance for the Statewide Planning and Research 
program is found in FTA Circular C8200.1, Program Guidance and 
Application Instructions for State Planning and Research Program 
Grants, dated December 27, 2001. FTA is in the process of updating this 
circular to incorporate changes resulting from language in SAFETEA-LU.
4. Period of Availability
    The funds apportioned under the Statewide Planning and Research 
program will remain available to be obligated by FTA to recipients for 
four fiscal years'which include the year of apportionment plus three 
additional fiscal years. Any apportioned funds that remain unobligated 
at the end of this period will revert to FTA for reapportionment under 
the program.

C. Urbanized Area Formula Program (49 U.S.C. 5307)

    Section 5307 authorizes Federal capital and operating assistance 
for transit in UZAs. A UZA is an area with a population of 50,000 or 
more that has been defined and designated as such in the most recent 
decennial census by the U.S. Census Bureau. The Urbanized Area Formula 
Program also supports planning, in addition to that funded under the 
Metropolitan Planning program described above. Funding is apportioned 
directly to each UZA with a population of 200,000 or more, and to the 
State Governors for UZAs with populations between 50,000 and 200,000. 
Generally, operating assistance is not an eligible expense for UZAs 
with populations of 200,000 or more. However, there are several 
exceptions to this restriction. The exceptions are described in section 
2(e) below.

[[Page 71957]]

1. Authorized Amounts
    SAFETEA-LU authorizes the following amounts under section 5307 to 
provide financial assistance to UZAs for fiscal years 2006-2009:
[GRAPHIC] [TIFF OMITTED] TN30NO05.004

    SAFETEA-LU directs that there be a one percent takedown from the 
funds made available under section 5307. This takedown amount will be 
for apportionment under the new Small Transit Intensive Cities (STIC) 
formula.
[GRAPHIC] [TIFF OMITTED] TN30NO05.005

    Under the formula for STIC, funds are apportioned to UZAs with a 
population less than 200,000 that meet or exceed the average level of 
service for all UZAs with populations between 200,000 and 1,000,000.
    In addition to the funds made available to UZAs under section 5307, 
approximately 84 percent of the funds authorized for the new section 
5340 Growing States and High Density States formula factors will be 
apportioned to UZAs. The portion of authorized section 5340 funds 
allocable to UZAs, based on the section 5340 formulas, is shown in the 
following table.
[GRAPHIC] [TIFF OMITTED] TN30NO05.006

    Language in the SAFETEA-LU conference report indicates that FTA is 
to show a single apportionment amount for 5307, STIC and 5340. 
Accordingly, the apportionment amount for a UZA that will be displayed 
in the Urbanized Area Formula apportionment table to be published in 
the FTA FY 2006 apportionments and allocations Notice, after FY 2006 
funding is appropriated, will include regular 5307 funds (that amount 
remaining after the one percent takedown for STIC), STIC funds, and 
Growing States and High Density States funding for the area. Although a 
single UZA amount will be shown to comply with conference report 
language (as noted above), separate formula calculations will be used 
to generate the respective apportionment amounts for the 5307, STIC and 
5340.
2. Requirements
    Program guidance for the Urbanized Area Formula Program is 
presently found in FTA Circular C9030.1C, Urbanized Area Formula 
Program: Grant Application Instructions, dated October 1, 1998, and 
supplemented by additional information or changes provided in this 
document. FTA is in the process of updating this circular to 
incorporate changes resulting from language in SAFETEA-LU. Several 
important program requirements are highlighted below.
(a) Urbanized Area Formula Apportionments to Governors
    For small UZAs, the funds are apportioned to the Governor of each 
State for distribution. A single total Governor apportionment amount 
for the Urbanized Area Formula, STIC, and Growing States and High 
Density States will be shown in the Urbanized Area Formula 
Apportionment table to be published in the FTA FY 2006 apportionments 
and allocations Notice, after FY 2006 funding is appropriated. The 
table will also show the apportionment amount attributable to each 
small UZA within the State. The Governor may determine the 
suballocation of funds among the small UZAs except that funds 
attributed to a small UZA that is located within the planning 
boundaries of a Transportation Management Area (TMA) must be obligated 
to that small UZA, as discussed in subsection (g) below.
(b) STIC Apportionments
    SAFETEA-LU establishes a one percent set-aside program from section 
5307 that provides funding to UZAs under 200,000 in population that 
operate at a level of service equal to or above the industry average 
level of service for all UZAs with a population of at least 200,000 but 
not more than 999,999, in one or more of six performance categories: 
Passenger miles traveled per vehicle revenue mile, passenger miles 
traveled per vehicle revenue hour, vehicle revenue miles per capita, 
vehicle revenue hours per capita, passenger miles traveled per capita, 
and passengers per capita. The data for these categories comes from the 
most current National Transit Database (NTD) reports. This data is used 
to determine a UZA's eligibility under the STIC formula, and is also 
used in the STIC apportionment calculations. Because this performance 
data change with each year's NTD reports the eligible STIC UZAs may 
vary each year. The performance categories for providing bonus grants 
to STIC were established in the September 2000 FTA report to Congress 
called ``The Urbanized Area Formula Program and the Needs of Small 
Transit Intensive Cities.''
(c) Transit Enhancements
    SAFETEA-LU requires that one percent of section 5307 funds 
apportioned to UZAs with populations of 200,000 or more be spent on 
eligible transit enhancement activities or projects. This requirement 
is now treated as a certification, rather than as a set-aside as was 
the case under TEA-21. Grantees in UZAs with populations of 200,000 or 
more will be certifying they are spending not less than one percent of 
section 5307 funds for transit enhancements and will be required to

[[Page 71958]]

submit an annual report on how they spent the money. The report must be 
submitted with the Federal fiscal year's final quarterly progress 
report in TEAM-Web. The report should include the following elements: 
(a) Grantee name, (b) UZA name and number, (c) FTA project number, (d) 
transit enhancement category, (e) brief description of enhancement and 
progress towards project implementation, (f) activity line item code 
from the approved budget, and (g) amount awarded by FTA for the 
enhancement. The list of transit enhancement categories and activity 
line item (ALI) codes may be found in FTA Circular 9030.1C, Urbanized 
Area Formula Program: Grant Application Instructions, dated October 1, 
1998, and in the table of Scope and ALI codes on TEAM-Web, which can be 
accessed at http://FTATEAMWeb.fta.dot.gov.
    The term ``transit enhancement'' includes projects or project 
elements that are designed to enhance mass transportation service or 
use and are physically or functionally related to transit facilities. 
Eligible enhancements include the following: (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.
    It is the responsibility of the MPO to determine how the one 
percent for transit enhancements will be allotted to transit projects. 
The one percent minimum requirement does not preclude more than one 
percent being expended in a UZA for transit enhancements. However, 
items that are only eligible as enhancements--in particular, operating 
costs for historic facilities--may be assisted only within the one-
percent funding level.
(d) Transit Security Projects
    Each recipient of Urbanized Area Formula funds must certify that of 
the amount received each fiscal year, it will expend at least one 
percent on ``public transportation security projects'' or must certify 
that it has decided the expenditure is not necessary. For applicants 
not eligible to receive section 5307 funds for operating assistance, 
only capital security projects may be funded with the one percent. 
SAFETEA-LU, however, expanded the definition of eligible ``capital'' 
projects to include specific crime prevention and security activities, 
including: (1) Projects to refine and develop security and emergency 
response plans; (2) projects aimed at detecting chemical and biological 
agents in public transportation; (3) the conduct of emergency response 
drills with public transportation agencies and local first-response 
agencies; and (4) security training for public transportation employees 
but excluding all expenses related to operations, other than such 
expenses incurred in conducting emergency drills and training. New ALI 
codes have been established for these four new capital activities. The 
one percent may also include security expenditures included within 
other capital activities, and, where the recipient is eligible, 
operating assistance. The relevant ALI codes would be used for those 
activities.
    Given the importance of transit security, FTA is often called upon 
to report to Congress and others on how grantees are expending Federal 
funds for security enhancements. To facilitate tracking of grantees' 
security expenditures, which are not always evident when included 
within larger capital or operating activity line items in the grant 
budget, we have established a new non-additive (``non-add'') scope code 
for security expenditures--Scope 991. The non-add scope is to be used 
to aggregate activities included in other scopes, and it does not 
increase the budget total. Section 5307 grantees should include this 
non-add scope in the project budget for each new section 5307 grant 
application or amendment. Under this non-add scope, the applicant 
should repeat the full amount of any of the line items in the budget 
that are exclusively for security and include the portion of any other 
line item in the project budget that is attributable to security, using 
under the non-add scope the same line item used in the project budget. 
The grantee can modify the ALI description or use the extended text 
feature, if necessary, to describe the security expenditures.
    If the grantee has certified that it is not necessary to expend one 
percent for security, the section 5307 grant application must include 
information to support that certification.
    To summarize, a grant application requesting 5307 funds cannot be 
considered complete until the applicant has indicated whether it will 
or will not expend one percent of the 5307 funds being requested for 
security purposes. If the applicant has determined expenditure for 
security purposes is not necessary, an explanation must be provided. 
FTA is implementing these new grant application procedures in response 
to requests for information from the Inspector General.
(e) FY 2006 Operating Assistance
    Several SAFETEA-LU provisions allow FY 2006 Urbanized Area Formula 
funds to be used for operating assistance in a UZA with a population of 
200,000 or more. They include: (1) Continuation of the operating 
assistance flexibility provisions of TEA-21 that allows transit systems 
in UZAs that crossed over the 200,000 population threshold, as a result 
of the 2000 Census, to use 5307 funds for operating assistance; (2) a 
provision applicable to portions of the UZAs between 200,000 and 
225,000 in population that meet certain criteria; (3) a provision for 
certain local governmental authorities that lie outside the service 
area of the principal public transportation agency that serves the 
Houston, TX UZA; and (4) language that stipulates that section 5307 
funds made available to the Anchorage UZA under fixed guideway tiers of 
the section 5307 apportionment formula shall be made available to the 
Alaska Railroad for any costs related to passenger operations. In 
addition, language in section 3027(c)(3) of TEA-21, as amended, is 
still applicable and allows the use of funds for operating assistance 
by certain recipients of section 5307 funds, in a UZA at least 200,000 
in population, that provide service exclusively for elderly persons and 
persons with disabilities and operate 20 or fewer vehicles.
    The requirements for each of the above provisions are described 
below.
    (1) Section 5307(b)(2) provides exception to the use of operating 
assistance in UZAs that grew in population from under 200,000 to over 
200,000, as a result of the 2000 Census. This exception allows for the 
use of funds for operating assistance in eligible UZAs at 100% of the 
grandfathered amount for FY 2005 funds, but this amount ``phases down 
and out'' to 50 percent in FY 2006, 25 percent in FY 2007, and zero 
percent in FY 2008. FTA has identified and listed all eligible UZAs in 
previous years apportionment notices (FY 2003-FY 2005), along with the 
maximum amount of the area's 5307 fund that could be used for 
operating. A similar list will be included in the FY 2006 apportionment 
Notice.
    (2) Section 5307(b)(1)(E) provides for grants for the operating 
costs of equipment and facilities for use in public transportation in 
the Evansville,

[[Page 71959]]

IN-KY urbanized area, for a portion or portions of the UZA if: The 
portion of the UZA includes only one State; the population of the 
portion is less than 30,000; and the grants will be not used to provide 
public transportation outside of the portion of the UZA.
    (3) Section 5307(b)(1)(F) provides operating costs of equipment and 
facilities for use in public transportation for local governmental 
authorities in areas which adopted transit operating and financing 
plans that became a part of the Houston, Texas UZA as a result of the 
2000 decennial census of population, but lie outside the service area 
of the principal public transportation agency that serves the Houston 
UZA.
    (4) Section 5336(a)(2) prescribes the formula to be used to 
apportion section 5307 funds to UZAs with population of 200,000 or 
more. SAFETEA-LU amended 5336(a)(2) to add language that stated, ``* * 
* except that the amount apportioned to the Anchorage urbanized area 
under subsection (b) shall be available to the Alaska Railroad for any 
costs related to its passenger operations.'' This language has the 
effect of directing that funds apportioned to the Anchorage urbanized 
area, under the fixed guideway tiers of the section 5307 apportionment 
formula, be made available to the Alaska Railroad, and that these funds 
may be used for any capital or operating costs related to its passenger 
operations.
    (5) Section 3027(c)(3) of TEA-21, as previously amended, provides 
an exception to the restriction on the use of operating assistance in a 
UZA with a population of 200,000 or more, by allowing transit 
providers/grantees that provide service exclusively to elderly persons 
and persons with disabilities and that operate 20 or fewer vehicles to 
use section 5307 funds apportioned to the UZA for operating assistance. 
The total amount of funding made available for this purpose under 
section 3027(c)(3) of TEA-21, as amended, is $1.4 million. Transit 
providers/grantees eligible under this provision have already been 
identified.
    Unless one of the exceptions noted above applies, the use of FY 
2006 Urbanized Area Formula funds for operating assistance is available 
only to small UZAs. For small UZAs, there is no limitation on the 
amount of the Governor's apportionment that may be used for operating 
assistance, and the Federal/local share ratio is 50/50.
(f) Expansion of Local Match Eligibility
    SAFETEA-LU expands the categories of funds that can be used as 
local match for section 5307 projects. The newly eligible sources are 
advertising and concessions revenue, social service contract revenue, 
and revenue bonds proceeds.
    Pursuant to 49 U.S.C. 5307(e) the Federal share of a grant under 
Section 5307 is 80 percent of net project cost for a capital project 
and 50 percent of net project cost for operating assistance. The 
remainder of the net project cost (i.e., 20 percent and 50 percent, 
respectively) shall be provided from the following sources:
    1. In cash from non-Government sources other than revenues from 
providing public transportation services;
    2. From revenues derived from the sale of advertising and 
concessions;
    3. From an undistributed cash surplus, a replacement or 
depreciation cash fund or reserve, or new capital;
    4. From amounts received under a service agreement with a State or 
local social service agency or private social service organization; and
    5. Proceeds from the issuance of revenue bonds. In addition, funds 
from section 403(a)(5)(C)(vii) of the Social Security Act (42 U.S.C. 
603(a)(5)(C)(vii)) can be used to match Urbanized Area Formula funds.
(g) Designated Transportation Management Areas (TMA)
    Guidance for setting the boundaries of TMAs is in the joint 
transportation planning regulations codified at 23 CFR part 450 and 49 
CFR part 613. In some cases, the TMA planning boundaries established by 
the MPO for the designated TMA includes one or more small UZAs. In 
addition, one small UZA (Santa Barbara, CA) has been designated as a 
TMA. In either of these situations, the Governor cannot allocate 
``Governor's Apportionment'' funds attributed to the small UZAs to 
other areas; that is, the Governor only has discretion to allocate 
Governor's Apportionment funds attributable to areas that are outside 
of designated TMA planning boundaries.
    The list of small UZAs included within the planning boundaries of 
designated TMAs is provided in the table below.
[GRAPHIC] [TIFF OMITTED] TN30NO05.007

    The MPO must notify the Associate Administrator for Program 
Management, Federal Transit Administration, 400 Seventh Street, SW., 
Washington, DC 20590, in writing, no later than July 1 of each year, to 
identify any small UZA within the planning boundaries of a TMA.
(h) Urbanized Area Formula Funds Used for Highway Purposes
    Funds apportioned to a TMA are eligible for transfer to FHWA for

[[Page 71960]]

highway projects. However, before funds can be transferred, the 
following conditions must be met: (1) Such use must be approved by the 
MPO in writing, after appropriate notice and opportunity for comment 
and appeal are provided to affected transit providers; (2) in the 
determination of the Secretary, such funds are not needed for 
investments required by the Americans with Disabilities Act of 1990 
(ADA); and (3) the MPO determines that local transit needs are being 
addressed.
    The MPO should notify the appropriate FTA Regional Administrator of 
its intent to use FTA funds for highway purposes, as prescribed in 
section VIII D below. Urbanized Area Formula funds that are designated 
by the MPO for highway projects will be transferred to and administered 
by FHWA.
3. Basis for Formula Apportionment
    Urbanized Area Formula Program funds are apportioned based on 
legislative formulas. Different formulas are used for UZAs with 
populations of 200,000 or more and UZAs with populations of less than 
200,000. For UZAs of 50,000 to 199,999 in population, the formula is 
based simply on population and population density. For UZAs with 
populations of 200,000 and more, the formula is based on a combination 
of bus revenue vehicle miles, bus passenger miles, fixed guideway 
revenue vehicle miles, and fixed guideway route miles, as well as 
population and population density.
    To comply with language in the SAFETEA-LU conference report, we 
will combine a UZA's section 5307, STIC, and section 5340 apportionment 
amounts and publish a single amount. For technical assistance purposes 
we will identify the UZAs that received STIC funds each year and will 
make available breakouts of the funding allocated to each UZA under 
5307, STIC and 5340 formulas, upon request to the regional office.
4. Period of Availability
    Urbanized Area Formula funds will remain available to be obligated 
by FTA to recipients for four fiscal years--which include the year of 
apportionment plus three additional years. Any apportioned funds that 
remain unobligated after this period will revert to FTA for 
reapportionment.
5. Other Program Information
    Population and population density statistics from the 2000 Census 
and (when applicable) validated mileage and transit service data from 
transit providers' 2004 NTD Report Year will be used to calculate a 
UZA's FY 2006 Urbanized Area Formula apportionment when FY 2006 funds 
are appropriated.
    We will calculate dollar unit values for the formula factors used 
in the Urbanized Area Formula program apportionment. These values 
represent the amount of money each unit of a factor is worth in the FY 
2006 apportionment. The unit values change each year as a result of 
changes in the data used to calculate a particular year's 
apportionments. The FTA apportionment amount for a UZA may be 
replicated by multiplying the dollar unit value by the appropriate 
formula factor.

D. Clean Fuels Grant Program (49 U.S.C. 5308)

    SAFETEA-LU establishes the Clean Fuels Grant Program--formerly the 
Clean Fuels Formula Program under TEA-21--to support the use of 
alternative fuels in air quality maintenance or nonattainment areas for 
ozone or carbon monoxide.
1. Total Allocations
    SAFETA-LU authorizes the following amounts for the Clean Fuels 
Grant Program for fiscal years 2006-2009.
[GRAPHIC] [TIFF OMITTED] TN30NO05.008

2. Basis for Allocation of Funds
    Under SAFETEA-LU, funding for the Clean Fuels program is now 
appropriated on a discretionary basis rather than by formula. [Note: 
Congress never appropriated funds for the formula program authorized by 
TEA-21.]
    SAFETEA-LU includes 16 projects to be funded through the Clean 
Fuels program in section 3044, Projects for Bus and Bus-Related 
Facilities and Clean Fuels Buses. Table 5 displays the SAFETEA-LU 
authorized Clean Fuels earmarked projects.
    It is important to note that these allocations are subject to be 
changed by subsequent appropriations acts and additional projects may 
be earmarked during the appropriations process. Final Clean Fuels 
program allocations for FY 2006 will be published after enactment of 
the FY 2006 Appropriations Act.
3. Requirements
    Clean Fuels program funds may be made available to any grantee in a 
UZA that is designated as maintenance or nonattainment area for ozone 
or carbon monoxide as defined in the Clean Air Act. Eligible recipients 
include section 5307 designated recipients as well as recipients in 
small UZAs. In the case of a small UZA, the State in which the area is 
located will act as the recipient.
    Eligible projects include the purchase or lease of clean fuel buses 
(including buses that employ a lightweight composite primary 
structure), the construction or lease of clean fuel buses or electrical 
recharging facilities and related equipment for such buses, and 
construction or improvement of public transportation facilities to 
accommodate clean fuel buses.
    If a recipient wishes to use funds designated under the program in 
SAFETEA-LU for eligible project activities outside the scope of a 
project designation, the recipient must submit its request for 
reprogramming to the House and Senate Authorizing Committees for 
resolution. Changes to designations that are in statute, as opposed to 
report language, can only be made in law. If in the future, Congress 
designates projects in report language, FTA will not reprogram the 
projects without direction from the Appropriations Committees.
    Unless otherwise specified in law, grants made under the Clean 
Fuels program must meet all other eligibility requirements as outlined 
in section 5308.
4. Period of Availability
    Funds designated for specific Clean Fuels Program projects will 
remain available for obligation for three fiscal years, which includes 
the year of appropriation plus two additional fiscal years. Clean Fuels 
funds not obligated in a FTA grant for their original purpose at the 
end of the period of availability will generally be made available for 
other projects.

E. Capital Investments Program (49 U.S.C. 5309)--Fixed Guideway 
Modernization

    This program provides capital assistance for the modernization of 
existing fixed guideway systems. Funds

[[Page 71961]]

are allocated by a statutory formula to UZAs with fixed guideway 
systems that have been in operation for at least seven years. A ``fixed 
guideway'' refers to any transit service that uses exclusive or 
controlled rights-of-way or rails, entirely or in part. The term 
includes heavy rail, commuter rail, light rail, monorail, trolleybus, 
aerial tramway, inclined plane, cable car, automated guideway transit, 
ferryboats, that portion of motor bus service operated on exclusive or 
controlled rights-of-way, and high-occupancy-vehicle (HOV) lanes.
1. Authorized Amounts
    SAFETEA-LU authorizes the following amounts for the Fixed Guideway 
Modernization for fiscal years 2006-2009:
[GRAPHIC] [TIFF OMITTED] TN30NO05.009

2. Basis for Formula Apportionment
    The formula for allocating the Fixed Guideway Modernization funds 
contains seven tiers. The apportionment of funding under the first four 
tiers is based on amounts specified in law and NTD data used to 
apportion funds in FY 1997. Funding under the last three tiers is 
apportioned based on the latest available data on route miles and 
revenue vehicle miles on segments at least seven years old, as reported 
to the NTD. Because the Fixed Guideway Modernization apportionment 
formula did not change from TEA-21 to SAFETEA-LU, you may refer to 
Table 8 of the FTA Fiscal Year 2005 Apportionments, Allocations and 
Program Information Notice for additional information and details on 
the formula.
3. Requirements
    Fixed Guideway Modernization funds must be used for capital 
projects to maintain, modernize, or improve fixed guideway systems. 
Eligible UZAs (those with a population of 200,000 or more) with fixed 
guideway systems that are at least seven years old are entitled to 
receive Fixed Guideway Modernization funds. A threshold level of more 
than one mile of fixed guideway is required in order to receive Fixed 
Guideway Modernization funds. Therefore, UZAs reporting one mile or 
less of fixed guideway mileage under the NTD are not included. Program 
guidance for Fixed Guideway Modernization is presently found in FTA 
Circular C9300.1A, Capital Program: Grant Application Instructions, 
dated October 1, 1998. FTA is in the process of updating this circular 
to incorporate changes resulting from language in SAFETEA-LU.
4. Period of Availability
    Funds apportioned under the Fixed Guideway Modernization Program 
will remain available to be obligated by FTA to recipients for four 
fiscal years--which include the year of apportionment plus three 
additional years. Any apportioned funds that remain unobligated at the 
end of this period will revert to FTA for reapportionment under the 
program.
5. Other Program Information
    Generally, there were no changes to the formula or eligibility 
criteria for the program in SAFETEA-LU from those specified in TEA-21. 
However, sections 5337(f) (g) of SAFETEA-LU provides for the inclusion 
of Morgantown, WV (population 55,997) as an eligible UZA for purposes 
of apportioning fixed guideway modernization funds. Also, language in 
section 5336(b) has the impact of directing FTA to use 60 percent of 
the directional route miles attributable to the Alaska Railroad 
passenger operations system to calculate apportionments for the 
Anchorage, AK UZA under the 5307 and Fixed Guideway Modernization 
formulas.

F. Capital Investments (49 U.S.C. 5309)--Bus and Bus-Related Facilities

    The Bus and Bus-Related Facilities program provides capital 
assistance for new and replacement buses and related equipment and 
facilities.
1. Authorized Amounts
    SAFETEA-LU authorizes the following amounts for the Bus and Bus-
Related Facilities program for fiscal years 2006-2009.
[GRAPHIC] [TIFF OMITTED] TN30NO05.010

2. Basis for Allocation of Funds
    Funding is appropriated on a discretionary basis. SAFETEA-LU 
includes 646 earmarked projects to be funded through the Bus Program in 
section 3044, Projects for Bus and Bus-Related Facilities and Clean 
Fuels Buses. Table 4 displays the SAFETEA-LU authorized earmarked 
projects.
    It is important to note that these allocations are subject to be 
changed by subsequent appropriations acts and additional projects may 
be earmarked during the appropriations process. Final Bus and Bus-
Related Facilities program allocations for FY 2006 will be published 
after enactment of the FY 2006 Appropriations Act.
3. Requirements
    Eligible capital projects include the acquisition of buses for 
fleet and service expansion, bus maintenance and administrative 
facilities, transfer facilities, bus malls, transportation centers, 
intermodal terminals, park-and-ride stations, acquisition of 
replacement vehicles, bus rebuilds, bus preventive maintenance, 
passenger amenities such as passenger shelters and bus stop signs, 
accessory and miscellaneous equipment such as mobile radio units, 
supervisory vehicles, fare boxes, computers, and shop and garage 
equipment.
    A general provision in the appropriations acts of FY 2004 (section 
547) and FY 2005 (section 125) contained language making the earmarked 
projects eligible under the program ``notwithstanding any other 
provision of law.'' SAFETEA-LU did not include a similar 
``Notwithstanding'' provision, but the wording of certain bus program 
earmarks included expanded eligibility. The FY 2006 Appropriations Act 
might modify some of the authorized earmarks. Unless stated in law to 
the contrary, projects

[[Page 71962]]

earmarked prior to FY 2004 must conform to the eligibility requirements 
of the Bus and Bus-Related Facilities program.
    If a recipient wishes to apply for use of funds designated under 
the Bus and Bus-Related Facilities program in SAFETEA-LU for project 
activities outside the scope of the project designation, the recipient 
must submit its request for reprogramming to the House and Senate 
Authorizing Committees for resolution. Changes to earmarks that are in 
statute, as opposed to report language, can only be made in law. FTA 
will not reprogram projects earmarked by Congress in report language 
without direction from the Appropriations Committees.
    Grants made under the Bus and Bus-Related Facilities program must 
meet all other eligibility requirements as outlined in section 5309 
unless otherwise specified in law.
    Program guidance for Bus and Bus-Related Facilities is found in FTA 
Circular C9300.1A, Capital Program: Grant Application Instructions. FTA 
is in the process of updating this circular to incorporate changes 
resulting from language in SAFETEA-LU.
4. Period of Availability
    Funds designated for specific Bus Program projects remain available 
for obligation for three fiscal years--which includes the fiscal year 
in which the amount is made available or appropriated plus two 
additional years. Bus and Bus-Related Facilities funds not obligated in 
a FTA grant for their original purpose by the end of this period will 
generally be made available for other projects.
    Prior year unobligated balances for Bus and Bus-Related Facilities 
allocations in the amount of $723,995,747 remain available for 
obligation in FY 2006. The amounts that remain unobligated as of 
September 30, 2005, can be found in Table 6. Projects appropriated 
prior to FY 2004 and extended in the FY 2006 Appropriations Act or 
accompanying Conference Report will be included in the FY 2006 
Apportionments and Allocations Notice.
5. Other Program Information
    The Bus Program remains largely unchanged with the passage of 
SAFETEA-LU; however, one significant change is the inclusion of private 
companies engaged in public transportation and private non-profit 
organizations as eligible subrecipients of FTA grants. Prior to 
SAFETEA-LU, private non-profit entities could only receive FTA funds if 
they were selected by a public authority through a competitive process, 
and private operators were not eligible subrecipients. Private 
operators may now receive FTA funds as a pass-through without 
competition if they are included in a program of projects submitted by 
the designated public authority acting as the direct recipient of a 
grant.

G. Capital Investment Program (49 U.S.C. 5309)--New Starts

    SAFETEA-LU made several changes in the way funding is allocated for 
New Starts projects. Beginning in FY 2007, $200,000,000 each year is 
designated for ``Small Starts'' (section 5309(e)) projects with a New 
Starts share of less than $75,000,000 and a net project cost of less 
than $250,000,000. Major Capital Investment grants of $75,000,000 or 
more (section 5309 (d)) will receive $7.4 billion over the five years. 
In addition, SAFETEA-LU authorizes 38 projects for FD and 264 projects 
for PE. The total amount of FY 2006-2009 funding for 31 existing FFGA 
projects is $2,136,764,604. Fifty-two additional New Starts projects 
are authorized for a total of $3,237,700,000 during SAFETEA-LU.
    Congress allocated $10,500,000 to Alaska and Hawaii for ferryboats 
each year of TEA-21 and for FY 2005. SAFETEA-LU allocates $15,000,000 
to Alaska and Hawaii for ferryboats for FY 2006-FY 2009. The allocation 
is split equally between Alaska and Hawaii.
    SAFETEA-LU also makes $5,000,000 available for each year, FY 2006-
FY 2009, to the Denali Commission in Anchorage, Alaska under the terms 
of section 307(e) of the Denali Commission Act of 1998 (42 U.S.C. 3121) 
for docks, waterfront development projects and related transportation 
infrastructure. The Commission was established to (1) deliver the 
services of the Federal Government cost effectively, (2) provide job 
training and other economic development services in rural communities, 
and (3) promote rural development, provide power generation and 
transmission facilities, modern communication systems, water and sewer 
systems and other infrastructure needs.
1. Authorized Amounts
    SAFETEA-LU authorizes the following amounts for the New Starts 
program for fiscal years 2006-2009.
[GRAPHIC] [TIFF OMITTED] TN30NO05.011

2. Requirements
    Because New Starts projects are earmarked in law rather than report 
language, reprogramming for a purpose other than that specified must 
also occur in law. New Starts projects are subject to a complex set of 
approvals related to planning and project development set forth in 49 
CFR part 611. Program guidance for New Starts is found in FTA Circular 
C9300.1A, Capital Program: Grant Application Instructions, dated 
October 1, 1998; and C5200.1A, Full Funding Grant Agreement Guidance, 
dated December 5, 2002. FTA is in the process of updating these 
circulars to incorporate changes resulting from language in SAFETEA-LU.
3. Period of Availability
    New Starts funds remain available for three fiscal years--which 
includes the fiscal year the funds are made available or appropriated 
plus two additional years. Funds may be extended by Congress or made 
available for other projects after the period of availability has 
expired.
4. Other Program Information and Highlights
    Prior year unobligated allocations for New Starts in the amount of 
$557,727,154 remain available for obligation in FY 2006. This amount 
includes $112,052,679 in FY 2004 and $445,674,475 in FY 2005 
unobligated allocations. These unobligated amounts are displayed in 
Table 7.

H. Special Needs of Elderly Individuals and Individuals with 
Disabilities Program (49 U.S.C. 5310)

    This program provides formula funding to States for capital 
projects to assist in meeting the transportation needs of the elderly 
and persons with disabilities. The State (or State-designated agency) 
administers the section 5310 program. The State's responsibilities 
include: notifying eligible local entities of funding

[[Page 71963]]

availability; developing project selection criteria; determining 
applicant eligibility; selecting projects for funding; and ensuring 
that all subrecipients comply with Federal requirements. Eligible 
nonprofit organizations or public bodies must apply directly to the 
designated State agency for assistance under this program.
    FTA invites comment regarding technical assistance or training that 
would be helpful to grantees in implementing the Special Needs of 
Elderly Individuals and Individuals with Disabilities program. 
Additionally, FTA seeks comment on strategies and measures that could 
be employed to evaluate the successes of this program.
1. Authorized Amounts
    SAFETEA-LU authorizes the following amounts for the Special Needs 
of Elderly Individuals and Individuals with Disabilities program for 
fiscal years 2006-2009.
[GRAPHIC] [TIFF OMITTED] TN30NO05.012

2. Basis for Formula Apportionment
    Funds are allocated according to a formula based on the number of 
elderly individuals and individuals with disabilities in each State 
using Census 2000 data.
3. Requirements and Eligible Expenses
    Funds are available to support the capital costs of transportation 
services for older adults and people with disabilities. Uniquely under 
this program, eligible capital costs include the acquisition of 
service. Capital assistance is provided on an 80 percent Federal, 20 
percent local matching basis except that SAFETEA-LU allows states 
eligible for the sliding scale match under FHWA programs to use that 
match ratio for section 5310 capital projects. Funds provided under 
other Federal programs (other than those of the Department of 
Transportation, with the exception of the Federal Lands Highway Program 
established by section 204 of Title 23 U.S.C.) may be used as match for 
capital funds provided under section 5310. Revenue from service 
contracts may also be used as local match.
    Those eligible to receive section 5310 funding include private 
nonprofit agencies, public bodies approved by the state to coordinate 
services for elderly persons and persons with disabilities, or public 
bodies which certify to the Governor that no nonprofit corporations or 
associations are readily available in an area to provide the service.
    States may use up to ten percent of their annual apportionment to 
administer, plan, and provide technical assistance for a funded 
project. Beginning in FY 2006, no local share is required for these 
program administrative funds. FTA previously administratively allowed 
States to use ten percent of the capital funds for administration at 
the capital matching share, but SAFETEA-LU specifically allows ten 
percent for administration.
    The section 5310 program was previously subject to the requirements 
of section 5309 to the extent the Secretary determined appropriate. 
SAFETEA-LU changed the applicable requirements to 5307, to the extent 
the Secretary determines appropriate. FTA is not applying any new 
requirements to the section 5310 program as a result of this technical 
change.
4. Planning and Consultation
    Beginning in FY 2007, the State recipient must certify that: the 
projects selected were derived from a locally developed, coordinated 
public transit-human services transportation plan; and, the plan was 
developed through a process that included representatives of public, 
private, and nonprofit transportation and human services providers and 
participation by the public. Projects in the locally developed, 
coordinated public transit-human services transportation plan must be 
integrated into and consistent with the metropolitan and state planning 
processes. Finally, each grant recipient must certify that allocations 
of the grant to subrecipients are distributed on a fair and equitable 
basis.
    The planning requirement is also a requirement in two additional 
programs. The Job Access Reverse Commute program (in FY 2006) and the 
New Freedom program (in FY 2007) will also be required to have a 
coordinated human service plan. It is anticipated that most areas will 
develop one consolidated plan for all the programs, which may include 
separate elements and other human service transportation programs. FTA 
seeks comment on the specific aspects of the collaborative planning 
process (for example, participants, elements, measures, etc.). FTA also 
seeks comment on the relationship between the public transit-human 
services plans and other planning processes.
    Program guidance is found in FTA C 9070.1E, dated October 1, 1998. 
FTA is in the process of updating this circular to incorporate changes 
resulting from language in SAFETEA-LU.
5. Period of Availability
    There is no statutory period of availability for section 5310. 
Given the relatively simple nature of the state administered program 
with many subrecipients receiving small capital grants, FTA previously 
allowed only one year of availability. Given the new common planning 
requirement with JARC and New Freedom, beginning with FY 2006 funding, 
FTA is extending the period of availability for section 5310 to three 
years, which includes the year funds are apportioned plus two 
additional years, consistent with the other two programs.
6. Other Program Information
    Under Title III of SAFETEA-LU section 3012(b), the following states 
are named as eligible to use up to 33 percent of their section 5310 
funds starting in FY 2006 for operating expenses: Wisconsin, Alaska, 
Minnesota, and Oregon. FTA is authorized to select an additional three 
states to participate in the pilot. FTA issued a separate Federal 
Register Notice on November 14, 2005, specifying the guidelines for 
States participation in the pilot and soliciting proposals from states 
to participate. If possible, given the timing of the FY 2006 
appropriations act, we anticipate announcing the participants with the 
FY 2006 apportionments.
7. Transfer of 5310 Funds to Other FTA Programs
    Section 5310 funds may be transferred to the section 5311 or the 
section 5307 program, but only to implement projects competitively 
selected under the section 5310 program. The purpose of the transfer 
provision under SAFETEA-LU is for administrative streamlining of grant 
making, not to supplement the resources available under the Urbanized 
Area Formula or Non-urbanized Area Formula programs, as was the case 
under TEA-21. A State that transfers section 5310 funds to section 5307 
must certify that each project for which the

[[Page 71964]]

funds are transferred has been coordinated with private nonprofit 
providers of services. FTA has established a new scope code (641) to 
track 5310 projects included within a section 5307 or 5311 grant. 
Transfer to section 5307 or 5311 is permitted but not required. FTA 
will also award stand-alone section 5310 grants with the section code 
16 in the project number.

I. Nonurbanized Area Formula Program (49 U.S.C. 5311)

    This program provides formula funding to States and Indian Tribes 
for the purpose of supporting public transportation in areas with a 
population of less than 50,000. Funding may be used for capital, 
operating, State administration, and project administration expenses. 
Each State prepares an annual program of projects, which must provide 
for fair and equitable distribution of funds within the States, 
including Indian reservations, and must provide for maximum feasible 
coordination with transportation services assisted by other Federal 
sources. SAFETEA-LU identifies Indian Tribes as direct recipients under 
section 5311.
1. Authorized Amounts
    SAFETA-LU authorizes the following amounts for the Nonurbanized 
Areas Formula program.
[GRAPHIC] [TIFF OMITTED] TN30NO05.013

    In addition to the funds made available to States under section 
5311, approximately 16 percent of the funds authorized for the new 
section 5340 Growing States and High Density States formula factors 
will be apportioned to States for use in nonurbanized areas. The 
portion of the section 5340 authorized funds allocable to States for 
nonurbanized areas is shown in the following table.
[GRAPHIC] [TIFF OMITTED] TN30NO05.014

    The States receive funding for nonurbanized areas only from the 
Growing States portion of the 5340 formulas. Fifty percent of the funds 
authorized for section 5340 are allotted to Growing States and the 
other 50 percent goes to High Density. The High Density formula 
allocates all of its funds to urbanized areas.
    Funding for the Tribal Transit Program, oversight, and the Rural 
Transportation Assistance Program (RTAP) will be taken off the top 
before amounts are apportioned to the States. Takedowns for Tribal 
Transit and RTAP based on authorized funding levels are shown below.
[GRAPHIC] [TIFF OMITTED] TN30NO05.015

2. Basis for Formula Apportionment
    SAFETEA-LU changed the formula for section 5311. Starting in FY 
2006, twenty percent of the funds available will be apportioned to the 
states based on land area in nonurbanized areas with no state receiving 
more than 5 percent of the amount apportioned. The remaining eighty 
percent will be apportioned based on nonurbanized population, as 
before. The effect of this change is to provide additional resources to 
low density States.
3. Requirements
    The Nonurbanized Area Formula Program provides capital, operating 
and administrative assistance for areas with a population under 50,000. 
The Federal share for capital assistance is 80 percent and for 
operating assistance is 50 percent, except that SAFETEA-LU allows 
states eligible for the sliding scale match under FHWA programs to use 
that match ratio for section 5311 capital projects and 62.5 percent of 
the sliding scale capital match ratio for operating projects.
    Each State must spend no less than 15 percent of its FY 2005 
Nonurbanized Area Formula apportionment for the development and support 
of intercity bus transportation, unless the State certifies, after 
consultation with affected intercity bus service providers, that the 
intercity bus service needs of the State are being adequately met. 
SAFETEA-LU added this requirement for consultation with the industry to 
strengthen the certification requirement. FTA also encourages 
consultation with other stakeholders, such as communities affected by 
loss of intercity service.
    Program guidance for the Nonurbanized Area Formula Program is found 
in FTA C 9040.1E, Nonurbanized Area Formula Program Guidance and Grant 
Application Instructions, dated October 1, 1998. FTA is in the process 
of updating this circular to incorporate changes resulting from 
language in SAFETEA-LU.
4. Period of Availability
    Funds apportioned to States under the Nonurbanized Area Formula 
Program will remain available for three fiscal years--which includes 
the fiscal year the funds were apportioned plus two additional years. 
Any funds that remain unobligated at the end of this period will revert 
to FTA for allocation among the States under the Nonurbanized Area 
Formula Program.
5. Other Program Information
    SAFETEA-LU added a requirement to provide rural transit data to the 
NTD. Each recipient under the section 5311 program shall submit an 
annual report to the Secretary, containing information

[[Page 71965]]

on capital investments, operations, and service provided with funds 
received under the section 5311 program. SAFETEA-LU specifies that the 
report should include information on total annual revenue, sources of 
revenue, total annual operating costs, total annual capital costs, 
fleet size and type, and related facilities, revenue vehicle miles, and 
ridership. In consultation with State Departments of Transportation, 
FTA previously developed a voluntary state-based rural data module for 
the NTD. The existing NTD Rural Data Reporting Module manual and 
reporting instructions can be reviewed on the NTD Web site, http://www.ntdprogram.com. For each 5311 subrecipient, the State Department of 
Transportation will complete a one-page form of basic data. The 
existing module will serve as a basis for reporting requirements for 
the new, mandatory Rural Reporting Module of the NTD. Pursuant to 
SAFETEA-LU, mandatory reporting will begin with the FY 2006 NTD Report 
Year. The first reports will be due on October 28, 2006, for those 
States with fiscal years ending between January 1 and June 30, 2006; on 
January 28, 2007, for those States with fiscal years ending between 
July 1 and September 30, 2006; and April 30, 2007, for those States 
with fiscal years ending between October 1 and December 31, 2006. To 
enter data and receive additional instructions, State Departments of 
Transportation can go to the NTD Web site. FTA requests public comment 
on whether the State-based rural data module should serve as the basis 
for the new mandatory reporting requirements.

J. Rural Transportation Assistance Program (49 U.S.C. 5311(b)(2))

    This program provides funding to assist in the design and 
implementation of training and technical assistance projects, research, 
and other support services tailored to meet the needs of transit 
operators in nonurbanized areas.
1. Authorized Amounts
    SAFETEA-LU changes the source of funding for RTAP. Previously 
funded under the National Planning and Research Program, starting in FY 
2006, RTAP is funded as a two percent takedown from the amount 
authorized and appropriated for section 5311. The takedown amount based 
on funds authorized for section 5311 for fiscal years 2006-2009 is as 
follows:
[GRAPHIC] [TIFF OMITTED] TN30NO05.016

    Of the takedown, FTA may use up to 15 percent for projects of a 
national scope. The remaining 85 percent is allocated to the States.
2. Basis for Formula Apportionment
    For FY 2006, FTA will use the current administrative formula. Funds 
are allocated to the States by an administrative formula consisting of 
a $65,000 floor for each State ($10,000 for territories), with the 
balance allocated based on nonurbanized population in the 2000 Census. 
The floor was raised from $50,000 to $65,000 in FY 1999. Comments are 
invited on whether the floor should again be raised and whether the low 
density portion of the section 5311 formula should be used.
3. Program Requirements
    Funds are allocated to the States to undertake research, training, 
technical assistance, and other support services to meet the needs of 
transit operators in nonurbanized areas. These funds are to be used in 
conjunction with a State's administration of the Nonurbanized Area 
Formula Program.
4. Period of Availability
    Funds apportioned to States under RTAP will remain available for 
three fiscal years--which includes the fiscal year the funds were 
apportioned plus two additional years. Any funds that remain 
unobligated after the end of this period will revert to FTA for 
allocation among the States under the RTAP.
5. Other Program Information
    The National RTAP project is administered by the American Public 
Works Association in consortium with the Community Transportation 
Association of America, under a cooperative agreement re-competed at 
five-year intervals. The projects are guided by a project review board 
of managers of rural transit systems and State Department of 
Transportation rural transit programs. National RTAP resources have 
also supported the biennial TRB National Conference on Rural Public and 
Intercity Bus Transportation. The percentage takedown for RTAP, 
combined with rising funding levels for section 5311, make additional 
resources available for national projects such as providing technical 
assistance for the new tribal transit program. FTA invites comments on 
use of the National RTAP resource.

K. Public Transportation on Indian Reservations Program (49 U.S.C. 
5311(c)(1))

    SAFETEA-LU creates a new Tribal Transit Program as a takedown under 
the section 5311 program. Indian Tribes are defined as eligible direct 
recipients. The funds are to be apportioned for grants to Indian Tribes 
for any purpose eligible under section 5311, which includes capital and 
operating assistance for rural public transit services. Support for 
rural intercity bus service, including planning and marketing, is 
eligible. Planning for rural transit is not eligible. FTA will develop 
procedures for the Tribal Transit program in consultation with tribal 
leaders and other interested stakeholders and will provide an 
opportunity for the public to comment on its new methodology.
1. Authorized Funding
    The takedown amount authorized for Tribal Transit for fiscal years 
2006-2009 is as follows:
[GRAPHIC] [TIFF OMITTED] TN30NO05.017


[[Page 71966]]


2. Basis for Formula Apportionment
    SAFETEA-LU does not specify a basis for formula apportionment. FTA 
will develop procedures for allocating the funds in consultation with 
the Tribes and with opportunity for public comment. An interim measure 
would be to allocate FY 2006 funds based on responses to a request for 
letters of interest. FTA requests comments on the feasibility of 
allocating FY 2006 funds based on this approach. Because planning is 
not an eligible activity under the program, FTA is considering limiting 
transit participation to Tribes which already have transit options or 
which have already conducted planning and are prepared to implement new 
transit service. We seek comments on what criteria should be considered 
in selecting Tribes to receive funding and what factors should be used 
in allocating available funds among successful applicants.
3. Requirements
    Grants may be made to Indian Tribes for any purpose eligible under 
section 5311. Eligibility under section 5311 includes capital and 
operating assistance for local public transportation service in other 
than urbanized areas. Planning is not an eligible activity except under 
section 5311(e), which allows States to use 15 percent of a States' 
apportionment for administration, planning, and technical assistance, 
and 5311(f), which allows planning for intercity bus transportation. 
Support for rural intercity bus service is eligible under section 5311.
    FTA may establish the terms and conditions for the program. FTA 
seeks comments about appropriate terms and conditions for the program. 
We especially invite comments from Tribes that previously received FTA 
funding about which requirements we should consider waiving for the 
Tribal Transit program.
4. Period of Availability
    Funds will remain available for three fiscal years, which includes 
the fiscal year the funds were apportioned or appropriated plus two 
additional years. Any funds that remain unobligated after this period 
will revert to FTA for reallocation among the Tribes.
5. Other Program Information
    The funds set aside for Indian Tribes are not meant to replace or 
reduce funds that Indian Tribes receive from states through the section 
5311 program but are to be used to enhance public transportation on 
Indian reservations. Funds allocated to Tribes by the States may be 
included in the State's section 5311 application or awarded by FTA in a 
grant directly to the tribe. We encourage Tribes intending to apply to 
FTA as direct recipients to contact the appropriate FTA regional office 
at the earliest opportunity.
    Planning for Tribal Transit projects may be funded under the 
following programs: FTA and FHWA Statewide Planning programs; the 
State's apportionment under section 5311; and the Indian Reservation 
Roads Program (IRR). Technical assistance for Tribes may be available 
from the State DOT using the State's allocation of RTAP or funds 
available for State administration under section 5311, from the Tribal 
Transportation Assistance Program (TTAP) Centers supported by FHWA, and 
from the Community Transportation Association of America under a 
program funded by the United States Department of Agriculture (USDA). 
The National RTAP will also be developing new resources for Tribal 
Transit.

L. National Research Program (49 U.S.C. 5314)

    FTA's National Research Programs include the National Research and 
Technology Program (NRTP), Project ACTION, the National Technical 
Assistance Center for Senior Transportation, and the Medical 
transportation grants program.
    Through funding under these programs, FTA seeks to deliver 
solutions that improve public transportation. FTA's Strategic Research 
Goals are to provide transit research leadership, increase transit 
ridership, improve capital and operating efficiencies, improve safety 
and emergency preparedness, and to protect the environment and promote 
energy independence. For more information contact Bruce Robinson, 
Office of Research, Demonstration and Innovation, at (202) 366-4209.
1. Authorized Funding
    SAFETEA-LU authorizes the following amounts for the National 
Research Program for fiscal years 2006-2009.
[GRAPHIC] [TIFF OMITTED] TN30NO05.018

    SAFETEA-LU project authorizations under the National Research 
Program are listed in Table 8.
    All research and research and development projects are subject to a 
2.6% reduction for the Small Business Innovative Research Program 
(SBIR). FTA will make the determination as to whether or not the SBIR 
reduction will be applied to a particular project--based on our review 
of the proposed scope of work for the project.
2. Basis for Allocation of Funds
    Funds not designated by Congress for specific projects and 
activities will be programmed by FTA based on FTA's Strategic Research 
Plan using competitive procedures to the maximum extent possible.
3. Requirements
    Application Instructions and Program Management Guidelines are set 
forth in FTA Circular 6100.1C. FTA is in the process of updating this 
circular to incorporate changes resulting from language in SAFETEA-LU. 
Research projects must support FTA's Strategic Research Goals and meet 
the Office of Management and Budget's Research and Development 
Investment Criteria. All research recipients are required to work with 
FTA to develop approved Statements of Work. A plan to evaluate research 
results must be in place before award of a research grant.
    Eligible activities under the NRTP include research, development, 
demonstration and deployment projects as defined by 49 U.S.C. 5312 (a); 
Joint Partnership projects for deployment of innovation as defined by 
49 U.S.C. 5312(b); International Mass Transportation Projects as 
defined by 49 U.S.C. 5312(c); and, human resource programs as defined 
by 49 U.S.C. 5322.
4. Period of Availability
    Funds are available until expended.
5. Other Related Information
    Requests for research proposals will be published in grants.gov 
under CFDA 20.514.

[[Page 71967]]

M. Job Access and Reverse Commute Program (49 U.S.C. 5316)

    The Job Access and Reverse Commute (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, and for reverse commute 
projects designed to transport residents of UZAs and other than 
urbanized to suburban employment opportunities. FTA invites comment 
regarding technical assistance or training that would be helpful to 
grantees in implementing the JARC program.
1. Authorized Funding
    SAFETEA-LU authorizes the following amounts for the Job Access and 
Reverse Commute Program for fiscal years 2006-2009:
[GRAPHIC] [TIFF OMITTED] TN30NO05.019

2. Basis for Formula Apportionment
    SAFETEA-LU establishes JARC as a formula program and provides that 
60% of funds available be allocated to UZAs with populations of 200,000 
or more persons (large UZAs); 20% to urbanized areas with populations 
ranging from 50,000 to 200,000 persons (small UZAs), and 20% to rural 
and small urban areas with populations of less than 50,000 persons. 
Funds are allocated to the States for small UZAs and rural and small 
urban areas and to designated recipients in large UZAs. A single 
apportionment will be published for each large UZAs.
    Formula allocations are based upon the number of persons with 
disabilities residing in a state or metropolitan area. These figures 
are drawn from Census 2000 figures. In cases where a large UZA has more 
than one designated recipient, they may agree upon a single competitive 
selection process or sub-allocate funds to each designated recipient, 
based upon a percentage split agreed upon locally, and conduct separate 
planning processes and competitions.
    States and designated recipients must solicit grant applications 
and select projects competitively, based on application procedures and 
requirements established by the designated recipient, consistent with 
the Federal JARC program objectives. In the case of large UZAs, the 
area-wide solicitation shall be conducted in cooperation with the 
appropriate MPO(s).
3. Eligible Expenses
    Funds are available to support the capital and operating costs of 
transportation services that address the needs of welfare recipients 
and eligible low-income individuals that are not met by other 
transportation services. Federal JARC funds may be used for 80% of 
capital expenses and 50% of operating expenses. Funds provided under 
other Federal programs (other than those of the Department of 
Transportation) may be used for local/state match for funds provided 
under section 5316, and revenue from service contracts may be used as 
local match.
    Funding is available for transportation services provided by 
public, non-profit, or private-for-profit operators. Assistance may be 
provided for a variety of transportation services and strategies 
directed at assisting welfare recipients and eligible low-income 
individuals address unmet transportation needs. Examples of projects 
and activities that might be funded under the program include, but are 
not limited to:
    <bullet> Transportation projects to finance planning, capital, and 
operating costs of providing access to jobs;
    <bullet> Promoting public transportation by low-income workers, 
including the use of public transportation by workers with 
nontraditional work schedules;
    <bullet> Promoting the use of transit vouchers for welfare 
recipients and eligible low-income individuals;
    <bullet> Promoting the use of employer-provided transportation, 
including the transit pass benefit program under section 132 of the 
Internal Revenue Code of 1986;
    <bullet> Subsidizing the costs associated with adding reverse 
commute bus, train, carpool, van routes, or service from urbanized 
areas and other than urbanized areas to suburban workplaces;
    <bullet> Subsidizing the purchase or lease by a nonprofit 
organization or public agency of a van or bus dedicated to shuttling 
employees from their residences to workplaces;
    <bullet> Facilitating the provision of public transportation 
services to suburban employment opportunities.
    States and designated recipients may use up to ten percent of their 
annual apportionment to administer, plan, and provide technical 
assistance for a funded project. Beginning in FY 2006, no local share 
is required for these program administrative funds.
4. Planning and Consultation
    A recipient of JARC funds must certify that projects selected were 
derived from a locally developed, coordinated public transit-human 
services transportation plan; and, the plan was developed through a 
process that included representatives of public, private and non-profit 
transportation and human service providers; participation by the 
public; and included those representing the needs of welfare recipients 
and eligible low-income individuals. Projects in the locally developed, 
coordinated public transit-human services transportation plan must be 
integrated into and consistent with the metropolitan and state planning 
processes. Finally, recipients must certify that allocations of the 
grant to subrecipients are distributed on a fair and equitable basis.
    The planning requirement applies not only to JARC, but beginning in 
FY 2007 to the section 5310 and section 5317 (New Freedom) programs. It 
is anticipated that most areas will develop one consolidated plan for 
all the programs, which may include separate elements and other human 
service transportation programs. In FY 2006, in areas with no current 
JARC plan, the planning partners should at a minimum be consulted about 
projects and where possible expressions of support should be obtained 
and documented. For areas that previously received JARC discretionary 
funding, the previous JARC plan may satisfy the requirement in FY 2006. 
FTA seeks comment on the specific aspects of the collaborative planning 
process (for example, participants, elements, measures, etc.). FTA also 
seeks comment on the relationship between the public transit-human 
services plans and other planning processes.
5. Period of Availability
    While there is no statutory period of availability for JARC funds, 
FTA is establishing a consistent three-year period of availability for 
JARC, New

[[Page 71968]]

Freedom, and the section 5310 program, which includes the year of 
apportionment plus two additional years. Any funding that remains 
unobligated at the end of this period will revert to FTA for 
reapportionment among the States and large UZAs under the JARC program.
6. Program Requirements
    Grants are subject to the requirements of section 5307, including 
certification of labor protection arrangements.
7. Transfer of JARC funding to Other FTA Programs

Administrative Transfers

    States may transfer funds to FTA's section 5307 or section 5311 
programs. Funds so transferred must be used for the express purposes 
designated by the JARC program and must meet all associated 
requirements. The projects for which the funds are transferred must 
have been competitively selected and derived from the locally 
coordinated public transit--human services transportation plan. The 
purpose of the transfer provision under SAFETEA-LU is for 
administrative streamlining of grant making, not to supplement the 
resources available under the Urbanized Area Formula or Non-urbanized 
Area Formula programs. This provision allows the small UZAs to apply 
for funding directly from FTA, rather than through a statewide grant 
and allows Tribes to be direct recipients. A State that transfers funds 
to section 5307 must certify that the JARC projects being funded have 
been coordinated with nonprofit providers of service.
    FTA has established a new scope code (646) to be used when JARC 
projects are funded within a 5307 or 5311 grant. Transfer to section 
5307 or 5311 is permitted but not required. FTA will also award stand-
alone JARC grants with the section code 37 in the project number.

Transfers Between Categories

    States may move funds between the small UZA and the nonurbanized 
parts of the state apportionment, if the Governor certifies that all of 
the objectives of JARC are met in the specified area. States may also 
transfer funds in the small UZA and nonurbanized areas for projects 
anywhere in the State if the State has established a statewide program 
for meeting the objectives of JARC.
8. Prior Year Carryover
    JARC earmarks carried over from TEA-21 are subject to the terms and 
conditions under which they were originally appropriated. The local 
match for both capital and operating assistance remains consistent with 
the TEA-21 authorization as a 50/50 match. All projects should be in 
the regional JARC Plan as required under TEA-21. Prior year carryover 
is shown in Table 9.
9. Evaluation
    SAFETEA-LU requires FTA to conduct a study to evaluate the 
effectiveness of the JARC program (49 U.S.C. 5316(i)(2)). FTA seeks 
comment on strategies and measures that will evaluate the successes of 
this program.

N. New Freedom Program (49 U.S.C. 5317)

    The New Freedom Program (NFP) was established in SAFETEA-LU. The 
program purpose is to provide new public transportation services and 
public transportation alternatives beyond those currently 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 invites comment regarding technical assistance or training that 
would be helpful to grantees in implementing the New Freedom program. 
Additionally, FTA seeks comment on strategies and measures that could 
be employed to evaluate the successes of this program.
1. Authorized Funding
    SAFETA-LU authorizes the following amounts for the New Freedom 
program for fiscal years 2006-2009.
[GRAPHIC] [TIFF OMITTED] TN30NO05.020

2. Basis for Formula Apportionment
    SAFETEA-LU establishes a New Freedom Program as a formula program 
and provides that 60% of funds available be allocated to urbanized 
areas with populations of 200,000 or more persons (large urbanized 
areas); 20% to urbanized areas with populations ranging from 50,000 to 
200,000 persons (small UZAs), and 20% to rural and small urban areas 
with populations of less than 50,000 persons (nonurbanized areas). 
Funds are allocated to the States for small UZAs and nonurbanized areas 
and to designated recipients in metropolitan areas with populations of 
200,000 or more.
    Formula allocations are based upon the number of persons with 
disabilities residing in a State or metropolitan area. The data 
includes elderly persons with disabilities. These figures are drawn 
from Census 2000 figures. In cases where a large UZA has more than one 
designated recipient, they may agree upon a single competitive 
selection process or sub-allocate funds to each designated recipient, 
based upon a percentage split agreed upon locally, and conduct separate 
planning processes and competitions.
    States and designated recipients must solicit grant applications 
and select projects competitively, based on application procedures and 
requirements established by the recipient. In the case of large 
urbanized areas, the area-wide solicitation shall be conducted in 
cooperation with the appropriate MPO(s).
3. Eligible Expenses
    Funds are available to support the capital and operating costs of 
new public transportation services and public transportation 
alternatives that are beyond those required by the Americans with 
Disabilities Act. Federal New Freedom funds may be used for 80 percent 
of capital expenses and 50 percent of operating expenses. There is no 
limitation on the amount of funds that can be used for operating 
expenses. Funds provided under other Federal programs (other than those 
of the DOT) may be used as match for capital funds provided under 
section 5317, and revenue from contract services may be used as local 
match.
    Funding is available for transportation services provided by 
public, non-profit, or private-for-profit operators. Assistance may be 
provided for a variety of transportation services and strategies 
directed at assisting persons with disabilities address unmet 
transportation needs. The conference report stated that examples of 
projects and activities that might be funded under the program include, 
but are not limited to:

[[Page 71969]]

    <bullet> Purchasing vehicles and supporting accessible taxi, ride-
sharing, and vanpooling programs.
    <bullet> Providing paratransit services beyond minimum requirements 
(\3/4\ mile to either side of a fixed route), including for routes that 
run seasonally.
    <bullet> Making accessibility improvements to existing transit and 
intermodal stations not designated as key stations.
    <bullet> Supporting voucher programs for transportation services 
offered by human service providers.
    <bullet> Supporting volunteer driver and aide programs.
    <bullet> Acquisition of transportation services by a contract, 
lease, or other arrangement.
    <bullet> Supporting mobility management and coordination programs 
among public transportation providers and other human service agencies 
providing transportation.
    We invite comment on the projects and activities listed above and 
how they relate to what is ``beyond the ADA.'' We invite comment on 
activities related to ADA complementary paratransit services beyond the 
minimum requirements outlined in 49 CFR part 37. Further, we invite 
comment regarding the types of projects and services that should be 
considered for eligibility under New Freedom as they relate to new 
public transportation beyond the ADA and alternatives to public 
transportation beyond the ADA.
    States and designated recipients may use up to ten percent of their 
annual apportionment to administer, plan, and provide technical 
assistance for a funded project. No local share is required for these 
program administrative funds.
4. Planning and Consultation
    Beginning in FY 2007, a recipient of New Freedom funds must certify 
that projects selected are derived from a locally developed, 
coordinated public transit-human services transportation plan; and, the 
plan was developed through a process that included representatives of 
public, private and non-profit transportation and human service 
providers; participation by the public; and representatives addressing 
the needs of persons with disabilities. In FY 2006, the planning 
partners should at a minimum be consulted about projects and where 
possible expressions of support should be obtained and documented. 
Finally, each grant recipient must certify that allocations of the 
grant to subrecipients are distributed on a fair and equitable basis.
    The planning requirement is also a requirement in two additional 
programs. The Job Access Reverse Commute program (in FY 2006) and the 
Capital Program for Elderly and People with Disabilities (in FY 2007) 
will also be required to have a locally developed, coordinated public 
transit-human services transportation plan. It is anticipated that most 
areas will develop one consolidated plan for all the programs, which 
may include separate elements and other human service transportation 
programs.
5. Period of Availability
    While there is no statutory period of availability for New Freedom, 
FTA is establishing a consistent three-year period of availability for 
JARC, New Freedom, and the section 5310 program, which includes the 
year of apportionment plus two additional years. Funds allocated to 
States under the New Freedom program that remain unobligated at the end 
of this period will revert to FTA for reapportionment among the States 
and large UZAs under the New Freedom program.
6. Program Requirements
    Grants are subject to the requirements of section 5310 to the 
extent the Secretary deems appropriate. FTA will not require labor 
protective arrangements for this program.
7. Transfer of New Freedom funding to Other FTA Programs
    States may transfer funds to FTA's section 5307 or section 5311 
programs. Funds so transferred must be used for the express purposes 
designated by the New Freedom Program and must meet all associated 
requirements. The projects for which the funds are transferred must 
have been competitively selected and derived from the locally 
developed, coordinated public transit-human services transportation 
plan. The purpose of the transfer provision under SAFETEA-LU is for 
administrative streamlining of grant making, not to supplement the 
resources available under the urbanized or non-urbanized formula 
programs. This provision allows the small UZAs to apply for funding 
directly from FTA, rather than through a statewide grant and allows 
Tribes to be direct recipients. A State that transfers funds to section 
5307 must certify that New Freedom projects being funded have been 
coordinated with nonprofit providers of service.
    FTA has established a new scope code (647) to be used when New 
Freedom Projects are funded within a 5307 or 5311 grant. Transfer of 
funds to section 5307 or 5311 is permitted but not required. FTA will 
also award stand-alone New Freedom grants with the section code 57 in 
the project number.

O. Alternative Transportation in the Parks and Public Lands Program (49 
U.S.C. 5320)

    FTA will work with the Department of Interior and other Federal 
land management agencies to implement this program during FY 2006. No 
procedures for allocating the funds have yet been established.

P. Alternative Analysis Program (49 U.S.C. 5339)

    Alternative Analysis projects are studies conducted as part of the 
transportation planning process required under sections 5303 and 5304. 
Beginning in FY2006, funding is provided under section 5339 instead of 
within the eight percent allowed for projects prior to FD and 
Construction under TEA-21.
1. Total Allocation
    SAFETEA-LU authorizes the following amounts for the Alternative 
Analysis program for fiscal years 2006-2009.
[GRAPHIC] [TIFF OMITTED] TN30NO05.021

    In FY 2006 and FY 2007 there are 18 projects authorized for a total 
of $18,900,000 each year, leaving $6,100,000, which could be allocated 
to other projects during those years. There are no projects authorized 
in FY 2008 or FY 2009. The projects authorized in SAFETEA-LU are listed 
in Table 3. It is important to note that these allocations are subject 
to be changed by subsequent appropriations acts and additional projects 
may be earmarked during the appropriations process. Final Alternative 
Analysis program allocations for FY 2006 will be published after 
enactment of the FY 2006 Appropriations Act.

[[Page 71970]]

2. Program Requirements
    The transportation planning process of Alternative Analysis 
includes (a) An assessment of a wide range of public transportation 
alternatives, which will address transportation problems within a 
corridor or subarea; (b) ample information to enable the Secretary to 
make the findings of project justification and local financial 
commitment; (c) the selection of a locally preferred alternative; and 
(d) the adoption of the locally preferred alternative, which will be 
part of the long-range transportation plan. The Government's share of 
the total cost of a project under this section is 80 percent. The funds 
will be awarded as separate section 5339 grants. The grant requirements 
under this program will be comparable to those for section 5309 grants.
3. Period of Availability
    Funds shall remain available for three fiscal years, which includes 
the fiscal year the funds are made available or appropriated plus two 
additional years.

Q. Growing States and High States Density Formula Factors

    A new section 5340 is added by SAFETEA-LU to allocate funds to 
Growing States and High Density States. For this section, the term 
`State' is defined only to mean the 50 States. For the Growing State 
portion of section 5340, funds are allocated based on the population 
forecasts for fifteen years after the date of that census. Forecasts 
are based on the trend between the most recent decennial census and 
Census Bureau population estimates for the most current year. Funds 
allocated to the States are then sub-allocated to urbanized and non-
urbanized areas based on forecast population, where available. If 
forecasted population data at the urbanized level is not available, 
funds are allocated to current urbanized and non-urbanized areas on the 
basis of current population. Funds allocated to urbanized areas are 
included in their section 5307 apportionment. Funds allocated for non-
urbanized areas are included in the states' section 5311 
apportionments.
    Funding for the High Density States portion of section 5340 is 
allocated to the seven States with population densities in excess of 
370 persons per square mile, based on 2000 Census information. Each 
State receives a prorated share of the available funds. To arrive at a 
State's prorated share the formula requires that a series of 
mathematical calculations be performed using 2000 Census population, 
land area, and UZA population data for each State to produce the 
State's apportionment factor. The steps used to compute a State's 
apportionment factor are as follows:

    Step 1: State land area, in square miles, is multiplied by 370.
    Step 2: the product from step 1 is then multiplied by the State's 
UZA population.
    Step 3: the product from step 2 is divided by the State total 
population.
    Step 4: the quotient derived from step 3 is the State apportionment 
factor.

    The factors for the seven States are summed and divided by the 
individual State factor to arrive at the State ratio or percentage. 
This ratio is multiplied by the available funding to arrive at the 
State's apportionment of High Density funding. The allocation of a 
State's High Density apportionment among the UZAs in each State is 
based on each UZA receiving a proportional share of the State's 
apportionment according to a UZA's population within the State, as 
related to the total UZA population for the State. Population, 
population density and land area data from the most recent Decennial 
Census is used in the High Density formula.
    FTA will publish single urbanized and rural apportionments that 
show the total amount for 5307 and 5311 programs that includes 
apportionments these programs formulas together with 5340.

R. Over-the-Road Bus Accessibility Program (Pub. L. 105-85, Section 
3038)

    The Over-the-Road Bus Accessibility (OTRB) Program authorizes FTA 
to make grants to operators of over-the-road buses to help finance the 
incremental capital and training costs of complying with the DOT over-
the-road bus accessibility final rule, 49 CFR part 37, published on 
September 28, 1998 (63 FR 51670). FTA conducts a national solicitation 
of applications, and grantees are selected on a competitive basis.
1. Total Allocation
    SAFETA-LU authorizes the following amounts for the OTRB program for 
fiscal years 2006-2009.
[GRAPHIC] [TIFF OMITTED] TN30NO05.022

    Of the authorized amounts, the following funding is allocable to 
providers of intercity fixed-route service (75 percent) and to other 
providers of over-the-road bus services, including local fixed-route 
service, commuter service, and charter and tour service (25 percent).
[GRAPHIC] [TIFF OMITTED] TN30NO05.023

2. Basis for Allocations
    FTA allocates the funds appropriated annually among eligible 
private operators of over-the-road buses that apply in response to a 
request for proposals published in the Federal Register and announced 
on Grants.Gov. A separate Federal Register notice will be published 
later this fall announcing the competitive selection process for funds 
appropriated in FY 2006.
    FTA will screen all applications to determine whether all required 
eligibility elements are present. An FTA evaluation team will evaluate 
each application according to the criteria described in the 
announcement. FTA will notify all applicants, both those selected for 
funding and those not selected when the competitive selection process 
is complete. Projects selected for funding will be published in a 
Federal Register notice. Applicants selected for funding must apply to 
the FTA regional office for the actual grant award, sign Certifications 
and

[[Page 71971]]

Assurances, and execute a grant contract before funds can be drawn 
down.
3. Program Requirements
    Projects are competitively selected. The Federal share of the 
project is 90 percent of net project cost. Program guidance is provided 
in the Federal Register notice soliciting applications. Assistance is 
available to operators of buses used substantially or exclusively in 
intercity, fixed route, over-the-road bus service. Capital projects 
eligible for funding include projects to add lifts and other 
accessibility components to new vehicle purchases and to purchase lifts 
to retrofit existing vehicles. Eligible training costs include 
developing training materials or providing training for local providers 
of over-the-road bus services.
4. Period of Availability
    Funds are available until expended.

VII. FTA National Planning Emphasis Areas

    The FTA has identified a series of national Planning Emphasis Areas 
(PEAs) to promote as priority themes for consideration in developing 
the annual work programs for Statewide Planning (State Planning and 
Research, or SP&R) and Metropolitan Planning (Unified Planning Work 
Program, or UPWP). The PEAs represent topics in statewide and 
metropolitan planning that are of strategic national importance and are 
proposed for consideration by State and local officials as they prepare 
UPWPs and SP&R programs during the next applicable annual planning 
program cycle. This year's PEAs broadly promote improved person 
mobility, while addressing Core Accountabilities of FTA's Strategic 
Business Plan. The Strategic Business Plan may be viewed at the FTA Web 
site, http://www.fta.dot.gov. Because of the wide range in fiscal years 
across the States, it is understood that full consideration to include 
the PEAs may not take place until FY 2007. FTA invites comments from 
all interested parties on the PEAs outlined in the following pages--
both the planning topics that are listed, as well as the specific 
themes under each topic.
    A dedicated program of technical assistance and informational 
support is being made available to States, MPOs, and public 
transportation operators to aid in carrying out work activities that 
support the PEAs. The Transportation Planning Capacity Building Program 
(TPCB), accessible on-line at http://www.planning.dot.gov, is an 
important component of this support, with additional resources also to 
be made available through the FTA Web site, http://www.fta.dot.gov. The 
TPCB is an on-line accessible portfolio of informational reports and 
services sponsored jointly by FTA and the Federal Highway 
Administration (FHWA) providing useful guidelines and case studies of 
innovative practice related to statewide and metropolitan planning. A 
key element of the TPCB is the Peer Exchange Program, which provides 
support for sharing experiences among planning practitioners of 
innovative practices on these PEAs, as well as other planning topics, 
on request. Requests for information and technical support through the 
TPCB can be made by accessing the Web site noted above, or by 
contacting the FTA Region Office or FHWA Division Office 
representatives in your areas. In addition, training courses that 
address these PEAs in a variety of planning contexts are available 
through the National Transit Institute (NTI) and the National Highway 
Institute (NHI). Please go to the following Web sites: http://www.ntionline.com and http://www.nhi.fhwa.dot.gov.
    Finally, FTA is interested in identifying and showcasing examples 
of effective and innovative practice in Statewide and Metropolitan 
Planning that support the PEAs. States, MPOs, and public transportation 
operators are encouraged to forward work scopes and reports documenting 
their innovative efforts to their respective FTA Region Offices, so 
they may be reviewed and forwarded to Headquarters for national 
dissemination through a dedicated webpage to be developed over the 
coming year.
    FTA has identified five key themes as PEAs for the current and 
upcoming fiscal year: (1) Incorporating Safety and Security in 
Transportation Planning; (2) Participation of Transit Operators in 
Metropolitan and Statewide Planning; (3) Coordination of Non-Emergency 
Human Service Transportation; (4) Planning for Transit Systems 
Management/Operations to Increase Ridership; and (5) Support Transit 
Capital Investment Decisions through Effective Systems Planning.
1. Incorporating Safety and Security in Transportation Planning
    Since passage of the Intermodal Surface Transportation Efficiency 
Act (ISTEA) in 1991, and in all subsequent surface transportation 
authorizing legislation, States and MPOs have been encouraged to 
incorporate safety and security in their plans, programs, and ongoing 
planning activities. Most recently, SAFETEA-LU has expanded emphasis on 
safety and security by de-coupling the two concepts and elevating their 
status as individual factors in the planning process. Communication and 
collaboration among safety professionals, emergency service providers, 
the enforcement community, and transportation planners is essential to 
successfully integrate safety and security into all stages of 
transportation planning and decision-making.
    Regarding transportation system safety, information describing the 
tools and strategies associated with the implementation of 
transportation safety planning within statewide and metropolitan 
transportation planning processes, including resources targeted to the 
planning organizations, is available at http://www.tfhrc.gov/pubrds/pubrds.htm. A training course titled ``Safety Conscious Planning'' is 
available through NTI (see Web site above) with additional information 
available from TPCB Web site and FHWA and FTA, as follows: http://www.fhwa.dot.gov/planning/scp/index.htm and http://transit-safety.volpe.dot.gov/.
    The types of planning work activities addressed under this emphasis 
area can include, among others, education, training, and development/
application of analytical processes related to addressing safety and 
security in planning on a systematic basis, and development and use of 
approaches to considering safety and security in setting implementation 
priorities in plans and programs. The ``security'' component of this 
emphasis area refers to both maintaining the personal security of 
transportation system operators and users, as well as strategies for 
system operations that support the ``homeland'' security of localities, 
regions, States, and the nation. Coordinated approaches to the training 
of operators, deployment of communications and control technologies, 
and general coordination of emergency preparedness are among the types 
of planning activities that fall under this category.
    A high-profile theme that spans both security and safety is 
disaster planning. In particular, areas that are vulnerable to 
disasters of either man-made or natural origin are encouraged to 
consider including disaster planning work activities into their SP&Rs 
and UPWPs. Examples of planning-related disaster planning activities 
include all stages of emergency preparedness planning--ranging from 
preparing multimodal evacuation plans before a possible event, to 
strategies for bringing emergency supplies and relief aid to affected 
areas after the event. Additional

[[Page 71972]]

information is available at the following Web sites:
    <bullet> http://www.planning.dot.gov/Documents/Securitypaper.htm.
    <bullet> http://www.fhwa.dot.gov/planning/scp/index.htm.
    <bullet> http://www.planning.dot.gov/Peer/Michigan/detroitSafety.htm.
2. Participation of Transit Operators in Metropolitan and Statewide 
Planning
    SAFETEA-LU expands the mandate and opportunities for transit 
operator participation in multimodal transportation decision-making 
through Statewide and Metropolitan planning. This PEA outlines a set of 
strategies for realizing the full potential and benefits of multimodal 
decision-making. A recent FTA publication, Transit at the Table: A 
Guide to Participation to Metropolitan Decision Making, available 
online and in hard-copy, provides candid testimonials of the values and 
strategies for full achievement of ``transit-at-the-table'' by transit 
and MPO leaders from 25 metropolitan areas across the U.S.
    Among the planning activities that support this emphasis area are 
(a) establishing program, project, and technical advisory committees 
that include representation and active participation by transit 
operators, (b) developing and monitoring transportation system 
performance indicators that include measures that involve public 
transportation, (c) ensuring that travel forecasting methods are 
sensitive to policies affecting the full range of modal options and 
that transit ridership forecasts have been validated and are credible, 
and (d) using criteria for setting project priorities for inclusion in 
plans and programs that are mode-neutral.
    Training on ways to ensure that planning processes are modally-
balanced and the resulting decisions mode-neutral are available through 
the National Transit Institute (http://www.ntionline.com) and the 
National Highway Institute (http://www.nhi.fhwa.dot.gov), with 
additional information available through the Transportation Planning 
Capacity Building Web site (http://planning.dot.gov) and the Travel 
Model Improvement Program (http://tmip.fhwa.dot.gov/). Over the past 
two years, the TPCB has sponsored a number of transit-at-the-table peer 
exchange workshops, with the results posted on that Web site. The 
``Transit at the Table'' report is available at http://www.planning.dot.gov/Documents/tat.htm.
3. Coordination of Non-Emergency Human Service Transportation
    Following the theme of Executive Order <greek-i>13330, Human 
Service Transportation Coordination, SAFETEA-LU provides expanded 
program authority and funding opportunities to provide transit service 
to individuals with job access and specialized transportation needs. 
However, these programs, 49 U.S.C. 5310 (Special Needs of Elderly 
Individuals and Individuals with Disabilities), 49 U.S.C. 5316 (Job 
Access and Reverse Commute), and 49 U.S.C. 5317 (New Freedom) all 
require an extensive coordination among DOT and non-DOT-funded 
services, including preparation of a locally-developed coordinated 
human service-transportation plan as the basis for project-level 
funding decisions. The plan has to be developed by local area 
representatives of public, private, and nonprofit transportation human 
services providers, as well as involve participation by the public, 
including older adults, people with disabilities, and individuals with 
lower incomes. SAFETEA-LU further outlines that project ``competition'' 
for funding awards at the local level should be coordinated with the 
MPO.
    Support of the emphasis area could involve a wide range of work 
activities in Statewide and metropolitan planning, including forming 
and hosting meetings of a committee of non-emergency service providers, 
assemblage of a base-year ridership profile of service users and 
forecasting future usage, and incorporating these programs into the 
public involvement programs of States and MPOs. United We Ride, an 
initiative of the Coordinating Council on Access and Mobility has 
developed a number of tools and strategies for building coordinated 
human service transportation systems across programs and funding 
streams. Additional information resources are available at the 
following Web sites:
    <bullet> http://www.fta.dot.gov/16290_17544_ENG_HTML.htm.
    <bullet> http://www.unitedweride.gov/.
    <bullet> http://www.fta.dot.gov/1139_ENG_HTML.htm.
    <bullet> http://www.fta.dot.gov/1266_ENG_HTML.htm.
    <bullet> http://www.planning.dot.gov/Peer/Austin/austin_peer.htm.
4. Planning for Transit Systems Management/Operations to Increase 
Ridership
    A regionally coordinated, strategic approach to managing and 
operating transportation systems can yield dramatic improvements in 
systems productivity and service cost effectiveness. With regard to 
transit, a key criterion of operational effectiveness is the number of 
passenger miles traveled. FTA's Strategic Business Plan has a goal 
calling for an annual increase in passenger miles, discounted for 
employment. The ability to accomplish this is tied closely to the 
effective management and operation of transit systems--individually, as 
well as in within a regional context of multimodal systems management 
and operations. In addition, transit operational strategies such as 
fare policies, service characteristics (e.g. headways, transfers, 
frequency of stops), marketing and public awareness/information, and 
overall facilities maintenance on services and schedules, have a major 
impact on system ridership.
    Work activities in Statewide and Metropolitan planning to address 
this emphasis area include such efforts as: (a) Convene a system 
operators coordinating committee to identify issues, share solutions, 
and establish an ongoing framework for coordination, (b) develop 
analytical tools and expertise in assessing the impacts of operational 
strategies, both in conjunction with, and as alternatives to, capital 
investments, (c) facilitate improved understanding and deployment of 
advanced technologies to improve the operational efficiency of systems, 
and (d) improve the tracking, analysis, and use of operational 
performance data in transportation plan and program development.
    FTA has developed an extensive body of information and guidance to 
assist transit operators in developing strategies that increase use of 
their systems. The guidance includes technical assistance such as 
training courses, research studies, and proceedings from conferences 
that transit operators can use in developing their ridership growth 
strategies. This guidance is summarized in the report, ``Ridership 
Guidance Quick Study,'' which is posted at http://www.fta.dot.gov/17525_ENG_HTML.htm).
    Additional information on achieving ridership growth is available 
at the following Web sites:
    <bullet> http://www.fta.dot.gov/initiatives_tech_assistance/technology/15791_ENG_HTML.htm.
    <bullet> http://www.tcrponline.org.
    <bullet> http://www.plan4operations.dot.gov/.

[[Page 71973]]

5. Support Transit Capital Investment Decisions Through Effective 
Systems Planning
    The information, processes, and decisions of metropolitan systems 
planning lay the foundation for, and have direct impacts upon, 
corridor-focused project planning and subsequent stages of project 
development. There is a strong relationship between systems planning 
activities, more refined corridor analyses in Alternatives Analysis (or 
``AA.'' an FTA requirement for advancing New Starts projects), and 
their impact on subsequent project development--all within the context 
of metropolitan planning and decision-making. In systems planning, 
regional priorities among corridors of need are identified, as well as 
causes of the corridors' problems and a reasonable range of possible 
solutions. An AA investigates the range of possible modal solutions 
within individual corridors in much greater detail, concluding with a 
``Locally Preferred Alternative'' (LPA). That LPA, in turn, goes to the 
Metropolitan Planning Organization (MPO) for adoption into the long-
range transportation plan and is, ultimately, programmed in the 
Transportation Improvement Program. And, as the work of systems 
planning is carried forward into more focused planning at the corridor 
level, it becomes readily apparent that the quality of work performed 
in systems planning sets the foundation--and the quality of that 
foundation--for subsequent, more detailed planning.
    Within systems planning, three planning activities have been found 
to be the most challenging and, if not performed effectively, to have 
the most significant impact on the quality and credibility of major 
transit investment proposals as they advance into project development. 
These three systems planning topics are: (a) Data, Technical Tools, & 
Analysis; (b) Regional Needs Identification & Corridor Prioritization; 
and (c) Financial Planning.
(a) Data, Technical Tools, & Analysis
    There is a long and ever-expanding list of planning activities to 
improve the technical aspects of systems planning. These include 
ongoing collection of systems usage and performance to understand 
current travel behavior (e.g. onboard transit surveys and monitoring 
travel--by mode--that crosses a strategically picked network of screen-
lines), training for staff to improve their technical skills and 
expertise. Frequent validation checks should be performed on the travel 
forecasting models to confirm their reliability for use in assessing 
the travel implications of policy and network alternatives. Also, as 
improvements to MPOs' models are made during corridor-level AA studies, 
those refinements should be cycled back to the MPOs for use in their 
models.
    FTA staff and contractors have identified a wide range of problems 
with MPO travel demand forecasting models, particularly in locales with 
no prior experience in conducting AA studies. The ``sponsors'' of 
candidate projects for New Starts funding (49 U.S.C. 5309) will want to 
work with FTA staff before beginning the AA Study to examine model 
inputs, policy variables and assumptions, and model outputs for 
reasonableness.
    Informational resources available to State/local planners include:
    <bullet> National Highway Institute (http://www.nhi.fhwa.dot.gov), 
which offers the course Introduction to Travel Demand Forecasting.
    <bullet> National Transit Institute (http://www.ntionline.com), 
which offers the advanced course Multimodal Travel Forecasting.
    <bullet> Travel Model Improvement Program (http://tmip.fhwa.dot.gov), a joint FTA/FHWA/EPA program to support local 
transportation planning agencies and improve their forecasting 
abilities.
(b) Regional Needs Identification & Corridor Prioritization
    Goals and objectives for the transportation system are driven by 
public input and set by local policy makers and elected officials. 
These should be based on needs and clearly set forth in the long-range 
transportation plan. Furthermore, the goals and objectives should drive 
not only performance measures for the existing system, but also 
evaluation criteria for any new projects and programs to assist in 
decision making. If a major transit investment is to be considered in a 
corridor for study and Federal funding assistance is anticipated for 
the investment, then project sponsors may want to include FTA's New 
Starts criteria among the locally developed evaluation criteria.
    Systems planning involves identifying corridors with needs in 
accordance with a set of performance measures and establishing 
priorities among the corridors for further analysis. Valid, current, 
and comprehensive data are crucial in understanding transportation 
problems in the region; they also support rational decision making in 
formulating solutions. It is important that the planning documents and 
studies clearly articulate the problem(s) that are to be addressed. 
This will lead to the discovery the root causes of the problem(s). 
Knowledge of problems and causes becomes the basis for a project-level 
``Purpose and Need'' statement in federal environmental review 
documentation. The identification of regional transportation problems 
and their causes through data collection, analysis, and forecasting is 
the basis for ``telling the story'' of the applicant's local 
conditions. Good systems planning will help to ``make the case'' for 
funding potential major transit investments.
    Links to informational resources on this topic include:
    <bullet> http://www.fta.dot.gov/16231_ENG_HTML.htm.
    <bullet> http://www.fta.dot.gov/16363_ENG_HTML.htm.
    <bullet> http://www.fta.dot.gov/grant_programs/transportation_planning/major_investment/procedures_technical_methods/9949_10244_ENG_HTML.htm.
(c) Financial Planning
    Effective systems planning depends upon sound, defensible financial 
planning. Otherwise, the plans will always remain just plans and what 
is implemented will not reflect the vision expressed by decision makers 
through the metropolitan planning process. Good financial planning, in 
turn, depends upon credible assumptions, for revenues, expenses, 
inflation, and realistic project implementation schedules. For transit 
service and projects, in particular, the concept of maintenance first 
must take precedence in systems planning. Recapitalization and the 
ongoing expenses of operating and maintaining (O&M) the existing system 
over the long-term must be considered. The applicant or proposed 
project sponsor should be able to demonstrate that the existing transit 
system can be maintained and operated at current levels of service for 
the next 20 years. Development of a robust cost model for transit O&M 
expenses can prove invaluable in systems planning. For new projects, 
careful estimation of capital and operating costs should also include 
risk management analysis to challenge assumptions behind the estimates 
and consider a range of cost impacts should assumptions not hold true.
    Additional guidance is available, as follows:
    <bullet> Standard Cost Categories for Major Capital Projects 
(http://www.fta.dot.gov; Home [squ] Grant Programs [squ] New Starts 
Project Planning & Development [squ] Technical Guidance).

[[Page 71974]]

    <bullet> Interim FHWA/FTA Guidance on Fiscal Constraint for STIPs, 
TIPs, and Metro Plans (http://www.fhwa.dot.gov/planning/fcindex.htm).

VIII. FTA Policy and Procedures for FY 2006 Grants

A. Automatic Pre-Award Authority To Incur Project Costs

    This section includes some changes to the automatic pre-award 
authority published in previous Notices. Pre-award authority for 
capital projects beyond design and environmental work is more limited 
than before. The conditions under which pre-award authority may be used 
for real property acquisition are also clarified.
    While we provide pre-award authority for many projects, we do not 
recommend that first-time grant recipients utilize the automatic pre-
award authority to incur expenses before the grant is actually awarded 
by FTA. As a new grantee, it is easy to misunderstand pre-award 
authority conditions and not be aware of all of the applicable FTA 
requirements that must be met in order to be reimbursed for project 
expenditures incurred in advance of grant award. FTA programs have 
specific statutory requirements that are often different from those for 
other Federal grant programs with which new grantees may be familiar. 
If funds are expended for an ineligible project or activity, FTA will 
be unable to reimburse the project sponsor.
1. Policy
    FTA provides blanket, or automatic, pre-award authority in certain 
program areas described below. This pre-award authority allows grantees 
to incur certain project costs prior to grant approval and retain their 
eligibility for subsequent reimbursement after grant approval. The 
grantee assumes all risk and is responsible for ensuring that all 
conditions are met to retain eligibility. This automatic pre-award 
spending authority, when triggered, 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. Pre-award authority for design and environmental work on the 
project is triggered by the authorization of formula funds or 
appropriation of funds for discretionary projects and publication of 
those projects in FTA's annual Federal Register Notice of 
apportionments and allocations. Following authorization of formula 
funds or appropriation and publication of discretionary projects, pre-
award authority for other capital projects including property 
acquisition, demolition, construction, and acquisition of vehicles, 
equipment, or construction materials is triggered by completion of the 
environmental review process with FTA's signing of an environmental 
Record of Decision (ROD), Finding of No Significant Impact (FONSI), or 
categorical exclusion (CE) determination. Prior to exercising pre-award 
authority, grantees must comply with the conditions and Federal 
requirements outlined in paragraphs 2 and 3 below. Failure to do so 
will render an otherwise eligible project ineligible for FTA financial 
assistance. In addition, prior to incurring costs, grantees are 
strongly encouraged to consult with the appropriate FTA regional office 
regarding the eligibility of the project for future FTA funds and the 
applicability of the conditions and Federal requirements.
    FTA previously extended pre-award authority to all formula funds 
and flexible funds apportioned during from Fiscal Years 1998 through 
2006. In this notice, FTA is extending this pre-award authority for 
formula funds and flexible funds that will be appropriated through FY 
2009 under SAFETEA-LU, but with modifications. Pre-award authority for 
operating and planning projects under the formula grant programs is not 
limited to the authorization period. In addition, automatic pre-award 
authority for section 5303 and 5304 is extended through FY 2009.
    Pre-award authority does not apply to the section 5309 Capital 
Investment Bus and Bus-Related Facilities and Clean Fuels program high 
priority project designations or any other transit discretionary 
projects designated in SAFETEA-LU and published in Tables 4 and 5 of 
this notice. These authorizations are subject to change in future 
appropriations acts. In fiscal years 2006-2009, after Congress 
appropriates funds for these and other discretionary projects and the 
allocations are published in an FTA notice of apportionments and 
allocations, pre-award authority will be available for those projects 
and projects for which funds were appropriated in prior years and 
published in previous notices, except that the triggers for pre-award 
authority have been changed. For such section 5309 Capital Investment 
Bus and Bus-Related, Clean Fuels Program, or other transit capital 
discretionary projects, the date that costs may be incurred is: (1) for 
design and environmental review, the date that the appropriation bill 
which funds the project was enacted; and (2) for property acquisition, 
demolition, construction, and acquisition of vehicles, equipment, or 
construction materials, the date that FTA signs the document (ROD, 
FONSI, or CE determination) that completes the environmental review 
process required by the National Environmental Policy Act (NEPA) and 
its implementing regulations. The growing prevalence of new grantees 
unfamiliar with Federal and FTA requirements has necessitated this 
change in the pre-award trigger to ensure FTA's continued ability to 
comply with NEPA and related environmental laws. Because FTA does not 
sign a final NEPA document until MPO and statewide planning 
requirements have been satisfied, this new trigger for pre-award will 
ensure compliance with both planning and environmental requirements 
prior to irreversible action by the grantee. In previous notices FTA 
extended pre-award authority to section 330 projects and those surface 
transportation projects commonly referred to as section 115 projects 
administered by FTA, for which amounts were provided in the 
Consolidated Appropriations Act, 2004 and section 117 projects in the 
2005 Appropriations Act. The same conditions described for bus projects 
apply to these projects. We strongly encourage any prospective 
applicant that does not have a relationship with FTA to review Federal 
grant requirements with the FTA regional office before incurring costs.
    Blanket pre-award authority does not apply to section 5309 Capital 
Investment New Starts funds. Specific instances of pre-award authority 
for Capital Investment New Starts projects are described in paragraph 4 
below. Pre-award authority does not apply to Capital Investment Bus and 
Bus-Related or Clean Fuels projects for which funding has been 
authorized but not yet appropriated. Before an applicant may incur 
costs for Capital Investment New Starts projects, Bus and Bus-Related 
projects, or any other projects not yet published in a notice of 
apportionments and allocations, it must first obtain a written Letter 
of No Prejudice (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, as described 
below.
2. Conditions
    The conditions under which pre-award authority may be utilized are 
specified below:
    (a) Pre-award authority is not a legal or implied 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 implied 
commitment that all

[[Page 71975]]

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 that 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 the pre-award 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). Local funds expended by the grantee 
prior to the date of the pre-award authority will not be eligible for 
credit toward local match or reimbursement. Furthermore, the 
expenditure of local funds on activities such as land acquisition, 
demolition, or construction prior to the date of pre-award authority 
for those activities (i.e., the completion of the NEPA process) would 
compromise FTA's ability to comply with Federal environmental laws and 
may render the project ineligible for FTA funding.
    (e) The Federal amount of any future FTA assistance awarded 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 the pre-award authority applies, the 
authority expires with the lapsing of the fiscal year funds.
    (g) When a grant for the project is subsequently awarded, the 
Financial Status Report, in TEAM-Web, must indicate the use of pre-
award authority.
3. Environmental, Planning, and Other Federal Requirements
    All Federal grant requirements must be met at the appropriate time 
for the project to remain eligible for Federal funding. The growth of 
the Federal transit program has resulted in a growing number of 
inexperienced grantees who make compliance with Federal planning and 
environmental laws increasingly challenging. FTA has therefore modified 
its approach to pre-award authority to use the completion of the NEPA 
process, which has as a prerequisite the completion of planning and air 
quality requirements, as the trigger for pre-award authority for all 
activities except design and environmental review.
    The requirement that a project be included in a locally adopted 
metropolitan transportation improvement program and Federally-approved 
statewide transportation improvement program (23 CFR part 450) must be 
satisfied before the grantee may advance the project beyond planning 
and preliminary design with non-Federal funds under pre-award 
authority. The conformity requirements of the Clean Air Act, 40 CFR 
part 93, if applicable, must also be fully met before the project may 
be advanced into implementation under pre-award authority with non-
Federal funds. Compliance with NEPA and other environmental laws and 
executive orders (e.g., protection of parklands, wetlands, and historic 
properties) must be completed before State or local funds are spent on 
implementation activities, such as site preparation, construction, and 
acquisition, for a project that is expected to be subsequently funded 
with FTA funds. The grantee may not advance the project beyond planning 
and preliminary design before FTA has determined the project to be a 
categorical exclusion, or has issued a finding of no significant impact 
(FONSI) or an environmental record of decision (ROD), in accordance 
with FTA environmental regulations, 23 CFR part 771. For planning 
projects, the project must be included in a locally-approved Planning 
Work Program that has been coordinated with the State.
    In addition, Federal procurement procedures, as well as the whole 
range of applicable Federal requirements (e.g., Buy America, Davis-
Bacon Act, Disadvantaged Business Enterprise), 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.
4. Pre-Award Authority for New Starts Projects
    (a) Preliminary Engineering and Final Design
    Projects proposed for section 5309 New Starts funds are required to 
follow a Federally defined New Starts project development process. This 
New Starts process includes, among other things, FTA approval of the 
entry of the project into PE and into FD. In accordance with section 
5309(d), FTA considers the merits of the project, the strength of its 
financial plan, and its readiness to enter the next phase in deciding 
whether or not to approve entry into PE or FD. Upon FTA approval to 
enter PE, FTA extends pre-award authority to incur costs for PE 
activities. Upon FTA approval to enter FD, FTA extends pre-award 
authority to incur costs for FD activities. The pre-award authority for 
each phase is automatic upon FTA's signing of a letter to the project 
sponsor approving entry into that phase. PE and FD are defined in the 
New Starts regulation entitled Major Capital Investment Projects, found 
at 49 CFR part 611.
    (b) Real Property Acquisition Activities
    FTA extends automatic pre-award authority for the acquisition of 
real property and real property rights for a New Starts project upon 
completion of the NEPA process for that project. The NEPA process is 
completed when FTA signs an environmental Record of Decision (ROD) or 
Finding of No Significant Impact (FONSI), or makes a Categorical 
Exclusion (CE) determination. With the limitations and caveats 
described below, real estate acquisition for a New Starts project may 
commence, at the project sponsor's risk, upon completion of the NEPA 
process.
    For FTA-assisted projects, any acquisition of real property or real 
property rights must be conducted in accordance with the requirements 
of the Uniform Relocation Assistance and Real Property Acquisition 
Policies Act (URA) and its implementing regulations, 49 CFR part 24. 
This pre-award authority is strictly limited to costs incurred: (i) to 
acquire real property and real property rights in accordance with the 
URA regulation, and (ii) to provide relocation assistance in accordance 
with the URA regulation. This pre-award authority is limited to the 
acquisition of real property and real property rights that are 
explicitly identified in the final environmental impact statement 
(FEIS), environmental assessment (EA), or CE document, as needed for 
the selected alternative that is the subject of the FTA-signed ROD or 
FONSI, or CE determination. This pre-award authority does not cover 
site preparation, demolition, or any other activity that is not 
strictly necessary to comply with the URA, with one exception. That 
exception is when a building that has been acquired, has been emptied 
of its occupants, and awaits demolition poses a potential fire-safety 
hazard or other hazard to the community in which it is located, or is 
susceptible to reoccupation by vagrants, demolition of the building is 
also covered by this pre-award authority upon FTA's written agreement 
that the adverse condition exists.

[[Page 71976]]

    Pre-award authority for property acquisition is also provided when 
FTA makes a CE determination for a protective buy or hardship 
acquisition in accordance with 23 CFR 771.117(d)(12), and when FTA 
makes a CE determination for the acquisition of a pre-existing railroad 
right-of-way in accordance with 49 U.S.C. 5324(c). When a tiered 
environmental review in accordance with 23 CFR 771.111(g) is being 
used, pre-award authority is NOT provided upon completion of the first-
tier environmental document except when the Tier-1 ROD or FONSI signed 
by FTA explicitly provides such pre-award authority for a particular 
identified acquisition.
    FTA's rationale for providing this pre-award authority was 
described in the FY 2003 Apportionments and Allocations Notice 
published in the Federal Register on March 12, 2003, (68 FR 1106 et 
seq.). The FY 2003 Notice may be found on the FTA Web site at http://www.fta.dot.gov/library/legal/federalregister/2003/fr31203.pdf. Project 
sponsors should use pre-award authority for real property acquisition 
and relocation assistance very carefully, with a clear understanding 
that it does not constitute a funding commitment by FTA.
    (c) National Environmental Policy Act (NEPA) Activities
    NEPA requires that major projects proposed for FTA funding 
assistance be subjected to a public and interagency review of the need 
for the project, its environmental and community impacts, and 
alternatives to avoid and reduce adverse impacts. Projects of more 
limited scope also need a level of environmental review, either to 
support an FTA finding of no significant impact (FONSI) or to 
demonstrate that the action is categorically excluded from the more 
rigorous level of NEPA review.
    FTA's regulation entitled Environmental Impact and Related 
Procedures at 23 CFR part 771 states that the costs incurred by a grant 
applicant for the preparation of environmental documents requested by 
FTA are eligible for FTA financial assistance (23 CFR 771.105(e)). 
Accordingly, FTA extends automatic pre-award authority for costs 
incurred to comply with NEPA regulations and to conduct NEPA-related 
activities for a proposed New Starts project, effective as of the date 
of the Federal approval of the relevant STIP or STIP amendment that 
includes the project or any phase of the project. NEPA-related 
activities include, but are not limited to, public involvement 
activities, historic preservation reviews, section 4(f) evaluations, 
wetlands evaluations, endangered species consultations, and biological 
assessments. This pre-award authority is strictly limited to costs 
incurred to conduct the NEPA process, and to prepare environmental, 
historic preservation and related documents. It does not cover PE 
activities beyond those necessary for NEPA compliance. As with any pre-
award authority, FTA reimbursement for costs incurred is not 
guaranteed.
    (d) Other New Starts Activities Requiring Letter of No Prejudice 
(LONP)
    Except as discussed in paragraphs (a) through (c) above, a grant 
applicant must obtain a written LONP from FTA before incurring costs 
for any activity expected to be funded by New Start funds not yet 
granted. To obtain an LONP, an applicant must submit a written request 
accompanied by adequate information and justification to the 
appropriate FTA regional office, as described in B below.

B. Letter of No Prejudice (LONP) Policy

1. Policy
    LONP authority allows an applicant to incur costs on a project 
utilizing non-Federal resources, with the understanding that the costs 
incurred subsequent to the issuance of the LONP may be reimbursable as 
eligible expenses or eligible for credit toward the local match should 
FTA approve the project at a later date. LONPs are applicable to 
projects and project activities not covered by automatic pre-award 
authority. The majority of LONPs will be for section 5309 New Starts 
funds not covered under a full funding grant agreement, or for section 
5309 Bus and Bus-Related funds not yet appropriated by Congress. At the 
end of an authorization period, LONPs may be issued for formula funds 
beyond the life of the current authorization or FTA's extension of 
automatic pre-award authority.
2. Conditions and Federal Requirements
    The conditions for pre-award authority specified in section VIII A2 
above apply to all LONPs. The Environmental, Planning and Other Federal 
Requirements described in section VIII A3, also apply to all LONPs. 
Because project implementation activities may not be initiated prior to 
NEPA completion, FTA will normally not issue an LONP for such 
activities until the NEPA process has been completed with a ROD, FONSI, 
or Categorical Exclusion determination.
3. Request for LONP
    Before incurring costs for a project not covered by automatic pre-
award authority, the project sponsor must first submit a written 
request for an LONP, accompanied by adequate information and 
justification, to the appropriate regional office and obtain written 
approval. As a prerequisite to FTA approval of an LONP for a New Starts 
project, FTA will require project sponsors to demonstrate project 
worthiness and readiness that establish the project as a candidate for 
an FFGA. Projects will be assessed based upon the criteria considered 
in the New Start evaluation process. Specifically, upon the request for 
an LONP, the applicant shall provide sufficient information to allow 
FTA to consider the following items:
    (a) Description of the activities to be covered by the LONP.
    (b) Justification for advancing the identified activities.
    (c) Data that indicates that the project will maintain its ability 
to receive a rating of ``medium'', or better and that its cost-
effectiveness rating will be ``medium'' or better, unless such project 
has been specifically exempt from such a requirement.
    (d) Allocated level of risk and contingency for the activity 
requested.
    (e) Status of procurement progress, including, if appropriate, 
submittal of bids for the activities covered by the LONP.
    (f) Strength of the capital and operating financial plan for the 
New Starts project and the future transit system.
    (g) Adequacy of the Project Management Plan.
    (h) Resolution of any readiness issues that would affect the 
project, such as land acquisition and technical capacity to carry out 
the project.

C. FTA FY 2006 Annual List of Certifications and Assurances

    The FTA ``Fiscal 2006 Annual List of Certifications and 
Assurances'' will incorporate new or changed requirements due to 
SAFETEA-LU. The full text of the Fiscal Year 2006 Certifications and 
Assurances was published in the Federal Register on November 15, 2005, 
and is available on the FTA Web site and in TEAM-WEB. The FY 2006 
Certifications and Assurances must be used for all grants made in FY 
2006, including obligation of carryover.

D. FHWA Funds Used for Transit Purposes

    SAFETEA-LU continues provisions in the Intermodal Surface 
Transportation Efficiency Act of 1991 (ISTEA) and TEA-21 that expanded 
modal choice in transportation funding by including

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substantial flexibility to transfer funds between FTA and FHWA program 
funding categories.
1. Transfer Process
    The process for transferring flexible formula funds between FTA and 
FHWA programs is described below. For information on the process or the 
transfer of funds between FTA and FHWA planning programs refer to 
section VIII E.
    Transfer from FHWA to FTA. FHWA funds designated for use in transit 
capital projects must be derived from the metropolitan and statewide 
planning and programming process, and must be included in an approved 
STIP before the funds can be transferred. By letter, the State DOT 
requests the FHWA Division Office to transfer highway funds for a 
transit project. The letter should specify the project, amount to be 
transferred, apportionment year, State, urbanized area, Federal aid 
apportionment category (i.e., Surface Transportation Program (STP), 
Congestion Mitigation and Air Quality (CMAQ), Interstate Substitute, or 
congressional earmark), indication of the intended FTA formula program 
(i.e., section 5307, 5311 or 5310), and should include a description of 
the project as contained in the STIP.
    The FHWA Division Office confirms that the apportionment amount is 
available for transfer and concurs in the transfer, by letter to the 
State DOT and FTA. The FHWA Office of Budget and Finance then transfers 
obligation authority and an equal amount of cash to FTA. All FHWA CMAQ, 
STP, and certain Congressionally earmarked funds for transit projects 
in the Appropriations Act or Conference Report will be transferred to 
one of the three FTA formula programs (i.e. Urbanized Area Formula 
(section 5307), Nonurbanized Area Formula (section 5311) or Elderly and 
Persons with Disabilities (section 5310).
    The FTA grantee's application for the project must specify which 
program the funds will be used for, and the application must be 
prepared in accordance with the requirements and procedures governing 
that program. Upon review and approval of the grantee's application, 
FTA obligates funds for the project.
    Transferred funds are treated as FTA formula funds, but are 
assigned a distinct identifying code for tracking purposes. The funds 
may be used for any capital purpose eligible under the FTA formula 
program to which they are transferred and, in the case of CMAQ, for 
certain operating costs. FTA and FHWA have issued guidance on project 
eligibility under the CMAQ program in a Notice at 65 FR 9040 et seq. 
(February 23, 2000). In accordance with 23 U.S.C. 104(k), all FTA 
requirements except local share are applicable to transferred funds; 
FHWA local share requirements apply to funds transferred from FHWA to 
FTA. Transferred funds should be combined with regular FTA funds in a 
single annual grant application.
    In the event that transferred funds are not obligated for the 
intended purpose within the period of availability of the program to 
which they were transferred, they become available to the Governor for 
any eligible capital transit project.
    Transfers from FTA to FHWA. The Metropolitan Planning Organization 
(MPO) submits a written request to the FTA regional office for a 
transfer of FTA section 5307 formula funds (apportioned to a UZA 
200,000 and over in population) to FHWA based on approved use of the 
funds for highway purposes, as contained in the Governor's approved 
State Transportation Improvement Program. The MPO must certify that: 
(1) The funds are not needed for capital investments required by the 
Americans with Disabilities Act; (2) notice and opportunity for comment 
and appeal has been provided to affected transit providers; and (3) 
local funds used for non-Federal match are eligible to provide 
assistance for either highway or transit projects. The FTA Regional 
Administrator reviews and concurs in the request, then forwards the 
approval in written format to FTA Headquarters, where a reduction equal 
to the dollar amount being transferred to FHWA is made to the grantee's 
Urbanized Area Formula Program apportionment.
2. Matching Share for FHWA Transfers
    The provisions of Title 23 U.S.C. regarding the non-Federal share 
apply to Title 23 funds used for transit projects. Thus, FHWA funds 
transferred to FTA retain the same matching share that the funds would 
have if used for highway purposes and administered by FHWA.
    There are three instances in which a Federal share higher than 80 
percent would be permitted. First, in States with large areas of Indian 
and certain public domain lands and national forests, parks and 
monuments, the local share for highway projects is determined by a 
sliding scale rate, calculated based on the percentage of public lands 
within that State. This sliding scale, which permits a greater Federal 
share, but not to exceed 95 percent, is applicable to transfers used to 
fund transit projects in these public land States. FHWA develops the 
sliding scale matching ratios for the increased Federal share.
    Second, commuter carpooling and vanpooling projects and transit 
safety projects using FHWA transfers administered by FTA may retain the 
same 100 percent Federal share that would be allowed for ride-sharing 
or safety projects administered by FHWA.
    The third instance is the 100 percent Federally-funded safety 
projects; however, these are subject to a nationwide 10 percent program 
limitation.

E. Consolidated Planning Grants

    Since FY 1997, FTA and FHWA have offered States the option of 
participating in a pilot Consolidated Planning Grant (CPG) program. 
This streamlined fund drawdown process eliminates the need to monitor 
individual fund sources, if several have been used, and ensures that 
the oldest funds will always be used first.
    Under a CPG administered by FTA, States can report metropolitan 
planning expenditures (to comply with the Single Audit Act) for both 
FTA and FHWA under the Catalogue of Federal Domestic Assistance number 
for FTA's Metropolitan Planning Program. Additionally, for States with 
an FHWA Metropolitan Planning (PL) fund-matching ratio greater than 80 
percent, the State (through FTA) can request a waiver of the 20 percent 
local share requirement in order that all FTA funds used for 
metropolitan planning in a CPG can be granted at the higher FHWA rate. 
For some States, this Federal match rate can exceed 90 percent. In FY 
2005, the CPG program was expanded to allow the transfer of FTA 
planning funds to FHWA in addition to the current process whereby FHWA 
funds for planning are transferred to FTA. For planning projects funded 
through a CPG, the State DOT requests the transfer of funds in a letter 
to the FHWA Division Office (if transferring funds to FTA) or to the 
FTA regional office (if transferring funds to FHWA).

F. Grant Application Procedures

    Grantees must provide a Dun and Bradstreet (D&B) Data Universal 
Numbering System (DUNS) number for inclusion in all applications for a 
Federal grant or cooperative agreement submitted on or after October 1, 
2003. The DUNS number should be entered into the grantee profile in 
TEAM-Web. Additional information about this and other Federal grant 
streamlining initiatives mandated by the Federal Financial Assistance 
Management Improvement Act of 1999 (Pub. L. 106-107) can be accessed on 
OMB's Web site at http://www.whitehouse.gov/omb/grants/reform.html.

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    All applications for FTA funds should be submitted to the 
appropriate FTA regional office. FTA utilizes TEAM-Web, an Internet-
accessible electronic grant application system, and all applications 
are filed electronically. FTA has provided limited exceptions to the 
requirement for electronic filing of applications.
    In FY 2006, FTA is committed to ensuring that the average number of 
days to process an FTA grant is 36 days, or fewer, after receipt of a 
completed application by the appropriate regional office. In order for 
an application to be considered complete and for FTA to assign a grant 
number, enabling submission in TEAM-Web, the following requirements 
must be met:
    <bullet> The project is listed in a currently approved 
Transportation Improvement Program (TIP); Statewide Transportation 
Improvement Program (STIP), or Unified Planning Work Program (UPWP).
    <bullet> All eligibility issues have been resolved.
    <bullet> Required environmental findings have been made.
    <bullet> The project budget's Activity Line Items (ALI), scope, and 
project description meet FTA requirements.
    <bullet> Local share funding source(s) have been identified.
    <bullet> The grantee's required Civil Rights submissions are 
current.
    <bullet> Certifications and assurances are properly submitted.
    <bullet> Funding is available, including any flexible funds 
included in the budget.
    <bullet> For projects involving new construction (using at least 
$100 million in New Starts or formula funds), FTA engineering staff has 
reviewed the project management plan and given approval.
    <bullet> When required for grants related to New Starts projects, 
PE and/or FD has been approved.
    <bullet> Milestone information is complete, or FTA determines that 
milestone information can be finalized before the grant is ready for 
award.
    Before FTA can award grants for discretionary projects and 
activities designated by Congress, notification must be given to 
members of Congress, and in the case of awards greater than $1 million, 
to the House and Senate authorizing and appropriations committees.
    Other important issues that impact FTA grant processing activities 
are discussed below.
1. Change in Budget Structure
    Because SAFETEA-LU restructured FTA's accounts from all general 
funded accounts to one solely trust funded account and three general 
funded accounts, we are not able to mix funds from prior years in the 
same grant with funds that will be appropriated in FY 2006 and beyond 
(except for New Starts and research grants). Previously all programs 
were funded approximately 80 percent trust funds from the Mass Transit 
Account (MTA) of the Highway Trust Fund and 20 percent General Funds 
from the U.S. Treasury. The trust funds were transferred into the 
general funded accounts at the beginning of the year. Under SAFETEA-LU 
most programs are funded entirely from trust funds derived from the 
Mass Transit Account, while the New Starts and Research programs are 
funded with general funds. Carryover FY 2005 and prior funds currently 
available for obligation as well as FY 2006 funds, when they become 
available, may be included in an amendment to an existing grant for New 
Starts and research grants.
    For formula programs funded solely from trust funds beginning in FY 
2006, grantees must initiate a new grant to obligate FY 2006 funds. 
Grant amendments cannot be made to add FY 2006 and later year funds to 
a grant that includes FY 2005 or prior funds. Obligations of FY 2005 
and prior year carryover funds must be made in the original program 
accounts established under TEA-21 (either as an amendment to an 
existing grant or as a new grant) and cannot be combined with funds 
appropriated in FY 2006 or later. Grantees will, however, be able to 
amend the new grants established with FY 2006 funds to add funds made 
available after FY 2006. We regret any inconvenience this accounting 
change may cause as we implement new statutory requirements under 
SAFETEA-LU. We encourage grantees to spend down and close out old 
grants as quickly as possible to minimize the inconvenience.
2. Grant Budgets--SCOPE and ALI Codes
    FTA uses the SCOPE and Activity Line Item (ALI) Codes in the grant 
budgets to track program trends, to report to Congress, and to respond 
to requests from the Inspector General and the Government 
Accountability Office (GAO), as well as to manage grants. The accuracy 
of the data is dependent on the careful and correct use of codes. We 
have revised the SCOPE and ALI table to include new codes for the newly 
eligible capital items, to better track certain expenditures, and to 
accommodate the new programs. We encourage grantees to review the table 
before selecting codes from the drop-down menus in TEAM-WEB while 
creating a grant budget. Additional information about how to use the 
SCOPE and ALI codes to accurately code budgets will be added to the 
resources available through TEAM-WEB.
3. Earmark Tracking
    FTA is implementing new procedures for relating grants to earmarks. 
Each earmark published in the Federal Register will have a unique 
identifier associated with it. Tables of earmarks will also be 
established in TEAM. When applying for a grant using funding designated 
by Congress, grantees will be asked to identify the amount of funding 
associated with specific earmarks used in the grant. Further 
instructions will be posted on the TEAM-WEB site and training will be 
provided. The carryover tables in this Notice include the new 
identifiers.
4. New Freedom and JARC--Administering Agency
    Before the first grant application to FTA is submitted, the 
Governor must designate the state agency or agencies charged with 
administering the New Freedom and JARC formula programs. In large 
urbanized areas with more than one designated recipient or transit 
operator, supplemental agreements may be necessary.
5. Payments
    Once a grant has been awarded and executed, requests for payment 
can be processed. To process payments FTA uses ECHO-Web, an Internet 
accessible system that provides grantees the capability to submit 
payment requests on-line, as well as receive user-IDs and passwords via 
e-mail. New applicants should contact the appropriate FTA regional 
office to obtain and submit the registration package necessary for set-
up under ECHO-Web.
6. Oversight
    FTA conducts periodic oversight reviews to assess grantee 
compliance with Federal requirements. Each UZA grantee is reviewed 
every three years (a triennial review). States are reviewed 
periodically for their management of the section 5310 and 5311 
programs. Other more detailed reviews are scheduled based on an annual 
grantee risk assessment. FTA will develop appropriate oversight 
procedures for the new programs authorized by SAFETEA-LU.
7. Technical Assistance
    FTA headquarters and regional staff will be pleased to answer your

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questions and provide any technical assistance you may need to apply 
for FTA program funds and manage the grants you receive. This notice 
and the program guidance circulars previously identified in this 
document may be accessed via the FTA Web site at http://www.fta.dot.gov.
    In addition, copies of the following circulars and other useful 
information are available on the FTA Website and may be obtained from 
FTA regional offices: 4220.1E, Third Party Contracting Requirements, 
dated June 19, 2003; and C5010.1C, Grant Management Guidelines, dated 
October 1, 1998. The FY 2006 Annual List of Certifications and 
Assurances and Master Agreement are also posted on the FTA Web site. 
Other documents on the FTA Web site of particular interest to public 
transit providers and others include the annual Statistical Summaries 
of FTA Grant Assistance Programs and the NTD Profiles. The DOT final 
rule on ``Participation by Disadvantaged Business Enterprises in 
Department of Transportation Financial Assistance Programs,'' which was 
effective July 16, 2003, can be found on the Department's Web site at 
http://osdbu.dot.gov/business/DBE/49cfrpart26_final_rule.html.

    Issued on: November 21, 2005.
David B. Horner,
Acting Deputy Administrator.

Appendix A

FTA Regional Offices

Richard H. Doyle, Regional Administrator, Region 1-Boston Kendall 
Square, 55 Broadway, Suite 920, Cambridge, MA 02142-1093, Tel. 617 
494-2055. States served: Connecticut, Maine, Massachusetts, New 
Hampshire, Rhode Island, and Vermont.
Letitia Thompson, Regional Administrator, Region 2-New York, One 
Bowling Green, Room 429, New York, NY 10004-1415, Tel. No. 212 668-
2170. States served: New Jersey, New York, and the Virgin Islands.
Susan Borinsky, Regional Administrator, Region 3-Philadelphia, 1760 
Market Street, Suite 500, Philadelphia, PA 19103-4124, Tel. 215 656-
7100. States served: Delaware, Maryland, Pennsylvania, Virginia, 
West Virginia, and District of Columbia.
Yvette Taylor, Regional Administrator, Region 4-Atlanta, Atlanta 
Federal Center, Suite 17T50, 61 Forsyth Street SW., Atlanta, GA 
30303, Tel. 404 562-3500. States served: Alabama, Florida, Georgia, 
Kentucky, Mississippi, North Carolina, Puerto Rico, South Carolina, 
and Tennessee.
Don Gismondi, Deputy Regional Administrator, Region 5-Chicago, 200 
West Adams Street, Suite 320, Chicago, IL 60606, Tel. 312 353-2789. 
States served: Illinois, Indiana, Michigan, Minnesota, Ohio, and 
Wisconsin.
Robert C. Patrick, Regional Administrator, Region 6-Ft. Worth, 819 
Taylor Street, Room 8A36, Ft. Worth, TX 76102, Tel. 817 978-0550. 
States served: Arkansas, Louisiana, Oklahoma, New Mexico and Texas.
Mokhtee Ahmad, Regional Administrator, Region 7-Kansas City, MO, 901 
Locust Street, Room 404, Kansas City, MO 64106, Tel. 816 329-3920. 
States served: Iowa, Kansas, Missouri, and Nebraska.
Lee O. Waddleton, Regional Administrator, Region 8-Denver, 12300 
West Dakota Ave., Suite 310, Lakewood, CO 80228-2583, Tel. 720-963-
3300. States served: Colorado, Montana, North Dakota, South Dakota, 
Utah, and Wyoming.
Leslie T. Rogers, Regional Administrator, Region 9-San Francisco, 
201 Mission, Street, Room 2210, San Francisco, CA 94105-1926, Tel. 
415 744-3133. States served: American Samoa, Arizona, California, 
Guam, Hawaii, Nevada, and the Northern Mariana Islands.
Rick Krochalis, Regional Administrator, Region 10-Seattle, Jackson 
Federal Building, 915 Second Avenue, Suite 3142, Seattle, WA 98174-
1002, Tel. 206 220-7954. States served: Alaska, Idaho, Oregon, and 
Washington.

Appendix B

Specific Questions and Issues for Comment

    1. FTA seeks public comment on the continued use of the 83 
percent Federal share of cost of equipment and facilities for ADA 
and CAA compliance. (See section IV.A.11).
    2. FTA invites comment regarding technical assistance or 
training that would be helpful to grantees in implementing the 
Special Needs of Elderly Individuals and Individuals with 
Disabilities program. Additionally, FTA seeks comment on strategies 
and measures that could be employed to evaluate the successes of 
this program. (See section VI.H).
    3. For the Special Needs of Elderly Individuals and Individuals 
with Disabilities program, FTA seeks comment on the specific aspects 
of the collaborative planning process (for example, participants, 
elements, measures, etc.). FTA also seeks comment on the 
relationship between the public transit-human services plans and 
other planning processes. (See section VI.H).
    4. FTA requests public comment on whether the State-based rural 
data module should serve as the basis for the new mandatory 
reporting requirements. (See section VI.I).
    5. Concerning the basis for section RTAP formula apportionments, 
comments are invited on whether the floor should again be raised and 
whether the low density portion of the section 5311 formula should 
be used. (See section VI.J).
    6. FTA invites comments on use of the National RTAP resource. 
(See section VI.J).
    7. SAFETEA-LU does not specify a basis for formula apportionment 
for the new Tribal Transit program. FTA will develop procedures for 
allocating the funds in consultation with the Tribes and with 
opportunity for public comment. An interim measure would be to 
allocate FY 2006 funds based on responses to a request for letters 
of interest. FTA requests comments on the feasibility of allocating 
FY 2006 funds based on this approach. (See section VI.K).
    8. We seek comments on what criteria should be considered in 
selecting Tribes to receive funding and what factors should be used 
in allocating available funds among successful applicants. (See 
section VI.K).
    9. FTA may establish the terms and conditions for the Tribal 
Transit program. FTA seeks comments about appropriate terms and 
conditions for the program. We especially invite comments from 
Tribes that previously received FTA funding about which requirements 
we should consider waiving for the program. (See section VI.K).
    10. FTA invites comment regarding technical assistance or 
training that would be helpful to grantees in implementing the JARC 
program. (See section VI.M).
    11. For the JARC program, FTA seeks comment on the specific 
aspects of the collaborative planning process (for example, 
participants, elements, measures, etc.). FTA also seeks comment on 
the relationship between the public transit-human services plans and 
other planning processes. (See section VI.M).
    12. SAFETEA-LU requires FTA to conduct a study to evaluate the 
effectiveness of the JARC program (49 U.S.C. 5316(i)(2)). FTA seeks 
comment on strategies and measures that will evaluate the successes 
of this program. (See section VI.M).
    13. FTA invites comment regarding technical assistance or 
training that would be helpful to grantees in implementing the New 
Freedom program. Additionally, FTA seeks comment on strategies and 
measures that could be employed to evaluate the successes of this 
program. (See section VI.N).
    14. We invite comment on the projects and activities stated in 
the SAFETEA-LU that might be funded under the New Freedom program 
and how they relate to what is ``beyond the ADA.'' We invite comment 
on activities related to ADA complementary paratransit services 
beyond the minimum requirements outlined in 49 CFR part 37. Further, 
we invite comment regarding the types of projects and services that 
should be considered for eligibility under New Freedom as they 
relate to new public transportation beyond the ADA and alternatives 
to public transportation beyond the ADA. (See section VI.N).
    15. FTA invites comments from all interested parties on the 
Planning Emphasis Areas (PEA) identified for FY 2006. (See section 
VII).

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[FR Doc. 05-23322 Filed 11-29-05; 8:45 am]
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