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

SUMMARY: This Notice announces the availability of the remaining fiscal

year 1998 funding for the Federal transit programs that was not

available previously due to the lack of a full year authorization of

the transit program. The Transportation Equity Act for the 21st Century

(TEA-21), signed into law by President Clinton on June 9, 1998,

provides a six-year reauthorization of the Federal transit program and

the necessary contract authority needed to fully fund the fiscal year

1998 obligation limitations contained in the fiscal year 1998

Department of Transportation Appropriations Act. In addition to

announcing the remaining fiscal year funding, this Notice also revises

the apportionment of funding for the Section 5307 Urbanized Area

Formula Program in compliance with new provisions which require a one

percent set-aside for transit enhancements, and $4,849,950 to be set

aside for financing the Alaska Railroad. Additionally, this Notice

revises the apportionment of funds for the Section 5309 Fixed Guideway

Modernization Program to reflect the new allocation formula established

in TEA-21. It also revises the Section 5309 Bus Allocations to comply

with new provisions in TEA-21 to fund a Bus Test Facility in the amount

of $3,000,000 and a Fuel Cell Bus Program in the amount of $4,850,000

in fiscal year 1998. These two programs were not provided for in the

original Bus Allocations.

This Notice updates and expands on the December 5, 1997, Federal

Register Notice entitled ``FTA Fiscal Year 1998 Apportionments,

Allocations and Program Information.'' It also contains information

regarding the changes made by TEA-21 to the various Federal transit

programs, as well as the FTA policy on pre-award authority and other

new program information.

The new programs are the Clean Fuels Formula Program, the Job

Access and Reverse Commute Program, the Over-the-Road Bus Accessibility

program, the Single State Pilot Program for Intercity Rail

Infrastructure Investment, and the State Infrastructure Banks Pilot

Program. The funding level for the Over-the-Road Bus Accessibility

Program is subject to a pending technical correction bill which would

decrease the $6.8 million a year for operators of other over-the-road

service to a total of $6.8 million for the four years, 2000-2003.

FOR FURTHER INFORMATION CONTACT: The appropriate FTA Regional

Administrator for grant-specific information and issues; Patricia

Levine, Director, Office of Resource Management and State Programs,

(202) 366-2053, for general information about the Urbanized Area

Formula Program, the Nonurbanized Area Formula Program, the Elderly and

Persons with Disabilities Program, the Rural Transit Assistance

Program, or the Capital Program; or Robert Stout, Director, Office of

Planning Operations, (202) 366-6385, for general information concerning

the Metropolitan Planning Program and the State Planning and Research

Program.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

II. FTA Fiscal Year 1998 Funds Available for Obligation

III. Fiscal Year 1998 Revised Section 5307 Urbanized Area Formula

Apportionments

IV. Fiscal Year 1998 Revised Section 5309 Fixed Guideway

Modernization Apportionments

V. Fiscal Year 1998 Revised Section 5309 Bus Allocations

VI. Transit Authorization Levels Under TEA-21

VII. Changes Affecting FTA Formula, Capital Investment and Planning

Programs

A. Capital Project Definitions

B. Operating Assistance

C. Preventive Maintenance

D. Transit Enhancements

E. Proceeds from Sale of Assets

F. Revenue Bond Proceeds As Local Share

G. Notice of Pre-award Authority to Incur Project Costs

1. Conditions

2. Environmental, Planning, and Other Federal Requirements

H. Metropolitan Planning

I. New Starts Evaluation and Criteria

VIII. New Programs Authorized by TEA-21

A. Clean Fuels Formula Program

1. Definition of Eligible Projects

2. Application and Apportionment Deadlines

3. Formula for Apportioning Funds

4. Availability of Funds

B. Job Access and Reverse Commute Program

1. Definition and Eligible Projects

2. Factors for Consideration

3. Availability of Funds and Grant Requirements

C. Over-the-Road Bus Accessibility Program

D. Single State Pilot Program for Intercity Rail Infrastructure

Investment

E. State Infrastructure Banks Pilot Program

IX. General Information Tables:

1. FTA Fiscal Year 1998 Revised Appropriations and Funds

Available for Grant Programs

2. FTA Fiscal Year 1998 Revised Section 5307 Urbanized Area

Formula Apportionments

3. FTA Fiscal Year 1998 Revised Section 5309 Fixed Guideway

Modernization Apportionments

4. FTA Fiscal Year 1998 Revised Section 5307 Section 5309 Bus

Allocations

5. FTA TEA-21 Authorization Levels

6. FTA TEA-21 New Start Project Authorizations

7. FTA TEA-21 Bus Capital Project Authorizations

8. FTA Fiscal Years 1998-2003 Apportionment Formula for Sections

5307 and 5311

9. FTA Fiscal Years 1998-2003 Apportionment Formula for Section

5309 Fixed Guideway Modernization Program

10. FTA Unit Values of Data--Fiscal Year 1998 Revised Formula

Grant Apportionments

I. Background

The fiscal year 1998 apportionments and allocations for the

formula, capital, and transit planning and research programs were

published in a Federal Register Notice on December 5, 1997, entitled

``FTA Fiscal Year 1998 Apportionments, Allocations and Program

Information.'' That Notice contained apportioned funds based on the

1998 Appropriations Act and Federal transit laws, as well as funds

available under the Surface Transportation Extension Act of 1997.

Because the Surface Transportation Extension Act of 1997 only provided

contract authority through March 31, 1998, FTA published (1) a listing

of the full amount of the fiscal year 1998 apportionments and

allocations for the formula, capital, and transit planning and research

programs, based on the 1998 Appropriations Act and Federal transit

laws; and (2) a listing of the partial amount of the apportionments and

allocations, based on the fiscal year 1998 available funds for these

programs, in accordance with the 1998 DOT Appropriations Act and the

Surface Transportation Extension Act of 1997. Now that full year

contract authority is provided under TEA-21, the full amount of the

fiscal year 1998 apportionments and allocations is available for

obligation.

II. FTA Fiscal Year 1998 Funds Available for Obligation

The total fiscal year 1998 apportionments and allocations for the

formula, capital investment, and transit planning and research programs

in the amount of $4,547,737,724 were

[[Page 34507]]

published in the Federal Register Notice of December 5, 1997. Full

obligational authority for each of the amounts listed in the December

5, 1997, Notice is now provided for the following programs:

Section 5307 Urbanized Area Formula Program;

Section 5311 Nonurbanized Area Formula Program;

Section 5310 Elderly and Persons with Disabilities Program;

Section 5309 Capital Investment Program: Fixed-Guideway

Modernization Program, and the Bus Capital Program.

Obligational authority for the following programs is not affected

by this Notice because they received the full year's funding pursuant

to the December 5, 1997, Federal Register Notice:

Section 5311(b) Rural Transit Assistance Program Funds;

Section 5309 New Starts Program;

Section 5303 Metropolitan Planning Program;

Section 5313(b) State Planning and Research Program.

Table 1 displays the amount of appropriations and funds available

for each of the programs listed in this Notice.

III. Fiscal Year 1998 Revised Section 5307 Urbanized Area Formula

Apportionments

The new law provides that, of the funds apportioned each fiscal

year under the Urbanized Area Formula Program to urbanized areas of

200,000 or more in population, at least one percent shall be used for

transit enhancement activities. It also requires that $4,849,950 shall

be available annually to the Alaska Railroad for improvements to its

passenger operations. Accordingly, the fiscal year 1998 Urbanized Area

Formula apportionment has been revised to accommodate these two

provisions.

The fiscal year 1998 funds appropriated and made available for

Urbanized Area Formula grants total $2,303,702,677. After a deduction

of .32343056 of one percent for Project Management Oversight

($7,450,879), $2,296,251,798 is available for apportionment to the

urbanized areas and states. Of this amount, $4,834,264 ($4,849,950 less

$15,6896 for PMO) is set aside for the Alaska Railroad. In addition to

the balance of $2,291,417,534 of the appropriated funds, the revised

apportionment also includes $7,162,381 in deobligated funds which have

become available for reapportionment for the Urbanized Area Formula

Program, leaving a balance of $2,298,579,915 to be apportioned to

urbanized areas and states. Table 2 shows a revised apportionment of

$2,303,414,179, which includes the Alaska Railroad.

There is no longer an operating assistance limitation for areas

under 200,000 in population. TEA-21 eliminates Federal financing of

operating expenses for areas 200,000 and above effective immediately.

Also indicated on Table 2 is the amount set aside for transit

enhancements as provided in TEA-21. See Section VII.D of this Notice

for a further discussion of transit enhancement funds. This transit

enhancement provision is effective immediately.

IV. Fiscal Year 1998 Revised Section 5309 Fixed Guideway

Modernization Apportionments

TEA-21 modifies the formula for allocating the Fixed Guideway

Modernization funds. The new formula contains seven tiers rather than

four. The allocation of funding under the first four tiers has been

modified slightly and, through fiscal year 2003, will be allocated

based on data used to apportion the funding in fiscal year 1997.

Funding in the three new tiers will be apportioned based on the latest

available route miles and revenue vehicle miles on segments at least

seven years old as reported to the National Transit Database, rather

than on route miles and revenue vehicle miles on entire systems which

are seven years old.

TEA-21 specifically required the FTA to revise the fiscal year 1998

Fixed Guideway Modernization funds using the new formula. This has

resulted in generally minor changes in the amounts available. However,

one area, Worcester, Massachusetts, is no longer eligible, because the

fixed guideway segment attributable to that urbanized area was not in

place as of October 1, 1990. For the fiscal year 1998 revised

apportionments, sufficient funds were available to allocate only to the

first five tiers. The revised apportionments are contained in Table 3.

For the reapportionment of fiscal year 1998 funds, Tier 5 uses

Urbanized Area Formula Program fixed guideway tier formula factors that

were used to apportion the fiscal year 1998 Fixed Guideway allocations

in the December 5, 1997, Federal Register Notice. Any fixed guideway

segment that is less than seven years old has been deleted from this

data base.

For fiscal year 1998, there is an $800,000,000 obligation

limitation for fixed guideway modernization. After a deduction of

.32343056 of one percent for Project Management Oversight ($2,587,445),

$797,412,555 is available for apportionment to the specified urbanized

areas.

Each year, the new fixed guideway modernization formula will

allocate funds by seven tiers as follows:

Tier 1

The first $497,700,000 shall be apportioned to the following

urbanized areas as follows: Baltimore $8,372,000; Boston $38,948,000;

Chicago/Northwestern Indiana $78,169,000; Cleveland $9,509,500; New

Orleans $1,730,588; New York $176,034,461; Northeastern New Jersey

$50,604,653; Philadelphia/Southern New Jersey $58,924,764; Pittsburgh

$13,662,463; San Francisco $33,989,571; Southwestern Connecticut

$27,755,000.

Tier 2

The next $70,000,000 shall be apportioned as follows: Tier 2B: 50

percent to areas identified in Tier 1; and Tier 2B: 50 percent to other

urbanized areas with fixed guideway in operation at least seven years.

Funds for both Tiers 2A and 2B are apportioned using the Urbanized Area

Formula Program fixed guideway tier formula factors that were used to

apportion funds for the Fixed Guideway Modernization Program in fiscal

year 1997.

Tier 3

The next $5,700,000 shall be apportioned to the following urbanized

areas as follows: Pittsburgh, 61.76 percent; Cleveland, 10.73 percent;

New Orleans, 5.79 percent; the remaining 21.72 percent is apportioned

to areas in Tier 2B using the fixed guideway tier formula factors used

in fiscal year 1997.

Tier 4

The next $186,600,000 shall be apportioned to all eligible areas

using the fixed guideway tier formula factors used in fiscal year 1997.

Tier 5

The next $70,000,000 shall be apportioned as follows: 65 percent to

the eleven areas specified in Tier I, and 35 percent to all other

urbanized areas using the most current urbanized area formula program

fixed guideway tier formula factors. Any segment this is less than

seven years old has been deleted from this data base.

Tier 6

The next $50,000,000 shall be apportioned as follows: 60 percent to

the eleven areas specified in Tier I, and 30 percent to the other

urbanized areas with fixed guideway system segments in

[[Page 34508]]

revenue service for at least seven years. Allocations will be based on

the latest available route miles and revenue vehicle miles for fixed

guideway segments at least seven years old as reported to the National

Transit Database.

Tier 7

Any remaining amounts shall be apportioned as follows: 50 percent

to the eleven urbanized areas specified in Tier I, and 50 percent to

the other urbanized areas with fixed guideway system segments in

revenue service for at least seven years. Allocations will be based on

the latest available route miles and revenue vehicle miles for fixed

guideway segments at least seven years old as reported to the National

Transit Database.

V. Fiscal Year 1998 Revised Section 5309 Bus Allocations

TEA-21 provides funding for a Bus Testing Facility in the amount of

$3,000,000 and a Fuel Cell Bus Program in the amount of $4,850,000 in

fiscal year 1998. These two programs were not provided for in the

original allocations; therefore, all bus allocations have been reduced

on a prorated basis to accommodate these two additional activities.

Table 4 displays the revised allocations.

VI. Transit Authorization Levels Under TEA-21

TEA-21 provides a combination of trust and general fund

authorizations that total $42.0 billion over the six year period,

fiscal years 1998--2003. However, $36 billion is guaranteed funds

included under the discretionary spending cap. TEA-21 includes $6

billion above the guaranteed level. See Table 5 for the guaranteed

funding levels by program, and Table 5A for the guaranteed and

nonguaranteed levels by program.

TEA-21 authorizes 191 New Starts projects. Of this number, 108

projects are authorized for final design and construction funding and

68 projects are authorized for alternatives analysis and preliminary

engineering funding. Of these, 34 projects have specific dollar amounts

associated with them. An additional 15 projects have specific dollar

amounts but are not included in the first two lists. All earmarks are

listed in Table 6 by area and project, including the dollar amount if

specified. Projects authorized for alternatives analysis and

preliminary engineering also become authorized for final design and

construction as of October 1, 2000.

TEA-21 contains a provision that makes $10,400,000 available from

Section 5309 New Starts funds in fiscal years 1999--2003 for ferry boat

capital projects in Alaska or Hawaii. These projects may be ferry boats

or ferry terminal facilities or approaches to ferry terminal

facilities. TEA-21 also authorizes an additional $3,600,000 from

Section 5309 New Start nonguaranteed funds in fiscal years 1999--2003

for ferry projects as defined above.

It should be noted that projects earmarked in TEA-21 are subject to

Congressional actions in later appropriations bills.

Also authorized are project specific allocations in fiscal years

1999 and 2000 for 158 Capital Investment Bus projects totaling

$539,637,000. These projects by amount and area are displayed on Table

7.

Information regarding estimates of funding levels for 1999--2003 by

state and urbanized area is available on the FTA home page at

www.fta.dot.gov. These numbers are for planning purposes only as they

will be revised in the future but may be used for programming

metropolitan transportation improvement programs and statewide

transportation improvement programs.

VII. Changes Affecting FTA Formula, Capital Investment, and

Planning Programs

A. Capital Project Definitions

TEA-21 amends the definition of a capital project placing several

new items in the general definition and formally codifying in the FTA

authorizing statute several items that had been modified in the past

through appropriations acts.

Following is the definition of a capital project contained in TEA-

21. The term `capital project' means a project for:

1. Acquiring, constructing, supervising or inspecting equipment or

a facility for use in mass transportation, expenses incidental to the

acquisition or construction (including designing, engineering, location

surveying, mapping, and acquiring rights of way), payments for the

capital portions of rail trackage rights agreements, transit-related

intelligent transportation systems, relocation assistance, acquiring

replacement housing sites, and acquiring, constructing, relocating, and

rehabilitating replacement housing;

2. Rehabilitating a bus;

3. Remanufacturing a bus;

4. Overhauling rail rolling stock;

5. Preventive maintenance;

6. Leasing equipment or a facility for use in mass transportation

subject to regulations the Secretary prescribes limiting the leasing

arrangements to those that are more cost-effective than acquisition or

construction;

7. Joint development: a mass transportation improvement that

enhances economic development or incorporates private investment,

including commercial and residential development, pedestrian and

bicycle access to a mass transportation facility, and the renovation

and improvement of historic transportation facilities, because the

improvement enhances the effectiveness of a mass transportation project

and is related physically or functionally to that mass transportation

project or establishes new or enhanced coordination between mass

transportation and other transportation, and provides a fair share of

revenue for mass transportation that will be used for mass

transportation--

(a) Including property acquisition, demolition of existing

structures, site preparation, utilities, building foundations,

walkways, open space, safety and security equipment and facilities

(including lighting, surveillance, and related intelligent

transportation system applications), facilities that incorporate

community services such as daycare and health care, and a capital

project for, and improving, equipment or a facility for an intermodal

transfer facility or transportation mall, except that a person making

an agreement to occupy space in a facility under this subparagraph

shall pay a reasonable share of the costs of the facility through

rental payments and other means; and

(b) Excluding construction of a commercial revenue-producing

facility or a part of a public facility not related to mass

transportation;

8. The introduction of new technology, through innovative and

improved products, into mass transportation; or

9. The provision of nonfixed route paratransit transportation

services in accordance with section 223 of the Americans with

Disabilities Act of 1990 (42 U.S.C. 12143), but only for grant

recipients that are in compliance with applicable requirements of that

Act, including both fixed route and demand responsive service, and only

for amounts not to exceed 10 percent of such recipient's annual formula

apportionment under sections 5307 and 5311.''

B. Operating Assistance

Operating assistance for urbanized areas with populations under

200,000 continues to be available, at the Federal/local share ratio of

50/50, with no limitation on the amount of a grantee's

[[Page 34509]]

apportionment that may be used for operating assistance. Operating

assistance funds for urbanized areas with populations of 200,000 and

above are no longer available as of effective date of TEA-21.

For fiscal year 1999 and thereafter, operating assistance is

available only to nonurbanized and urbanized areas with populations

under 200,000. For these smaller areas, there is no limitation on the

amount of the apportionment that may be used for operating assistance,

and the Federal/local share ratio is 50/50. However, for both

categories of urbanized areas, many of the activities formerly funded

by FTA with operating assistance are now eligible capital items under

the category of preventive maintenance. Operating assistance as a

capital project with an 80 percent federal match ratio will continue

for fiscal year 1998 for areas under 200,000. Operating assistance at

the 80/20 match will not be available in fiscal year 1999 or

thereafter.

C. Preventive Maintenance

Preventive maintenance, an expense that became eligible for FTA

capital assistance with the DOT 1998 Appropriations Act, is now

eligible for FTA capital assistance under TEA-21, so that fiscal year

1998 funds and subsequent fiscal year appropriations may be used for

preventive maintenance. Preventive maintenance costs, as in fiscal year

1998, are defined as all maintenance costs. For general guidance as to

the definition of eligible maintenance costs, the grantee should refer

to the definition of maintenance in the most recent National Transit

Database reporting manual. A grantee may continue to request assistance

for capital expenses under the FTA policies governing associated

capital maintenance items (spare parts), maintenance of vehicles leased

under contract, and vehicle overhauls; or a grantee may choose to

capture all maintenance under preventive maintenance. If a grantee

purchases service instead of operating service directly, and

maintenance is included in the contract for that purchased service,

then the grantee may apply for preventive maintenance capital

assistance for the actual maintenance costs of the purchased service.

For accounting purposes, the grantee is cautioned not to confuse

the fact that an item generally considered to be an operating expense

is now eligible for FTA capital assistance. Generally accepted

accounting principles and the grantee's accounting system determine

those costs that are to be accounted for as operating costs. The

National Transit Database Reporting System (NTD) follows generally

accepted accounting principles, and so a grantee reporting to the NTD

must report the operating costs the grantee has incurred as operating

costs regardless of grant eligibility as capital. Nevertheless, under

provisions of the fiscal year 1998 Appropriations Act, and now under

provisions of TEA-21, some of those operating costs, while continuing

to be accounted for as operating costs in the grantee's accounting

records, are now eligible for FTA capital assistance. Grantees may not

count the same costs twice.

D. Transit Enhancements

TEA-21 establishes a one percent set-aside for transit enhancements

under the Urbanized Area Formula Program for areas 200,000 and above in

population. The term ``transit enhancement'' includes projects that are

designed to enhance mass transportation service or use and are

physically or functionally related to transit facilities. Eligible

projects are: (1) historic preservation, rehabilitation, and operation

of historic mass transportation buildings, structures, and facilities

(including historic bus and railroad facilities); (2) bus shelters; (3)

landscaping and other scenic beautification, including tables, benches,

trash receptacles, and street lights; (4) public art; (5) pedestrian

access and walkways; (6) bicycle access, including bicycle storage

facilities and installing equipment for transporting bicycles on mass

transportation vehicles; (7) transit connections to parks within the

recipient's transit service area; (8) signage; and (9) enhanced access

for persons with disabilities to mass transportation.

One percent of the urbanized area formula apportionment in

urbanized areas with a population of 200,000 and above shall be

available only for transit enhancements. Table 2 indicates the amount

set aside for enhancements in urbanized areas of 200,000 and above. If

these funds are not obligated for transit enhancement projects by three

years following the fiscal year in which the funds are apportioned, the

funds shall be reapportioned under the urbanized area formula program.

The project budget for each urbanized area formula grant

application which includes enhancement funds shall include a scope code

for transit enhancements and specific budget line activity items for

transit enhancements. Transit enhancements may exceed the one percent

set-aside. However, items that are only eligible as enhancements such

as operating costs for historic facilities may only be funded with the

enhancement funds.

Recipients of the one percent set-aside enhancement funds shall

submit a report to the appropriate FTA regional office listing the

projects carried out during the fiscal year with those funds. This

report shall be part of the recipient's annual certification to the

FTA. If at all possible, the report should be submitted electronically

and should utilize the budget line item codes used in the approved

project budget.

Under a related provision, projects providing bicycle access to

mass transportation funded with the enhancement set-aside shall be

funded at a 95 percent Federal share.

E. Proceeds From Sale of Assets

TEA-21 provides an additional option for handling proceeds from the

sale of federally-funded assets. This new provision allows the

recipient, with FTA approval, to sell, transfer, or lease real

property, equipment, or supplies acquired with FTA assistance and no

longer needed for transit purposes. The net proceeds of the transaction

may then be used to reduce the gross project cost of other Federally-

assisted capital transit projects.

If the asset is identified as no longer needed by the grantee for

public transportation purposes, and determined by FTA as eligible for

disposition, then the new requirements would apply. That is, the

proceeds could be retained by the grantee and used to reduce the gross

project costs of another Federally-assisted capital transit project

prior to applying for Federal financial assistance.

If the asset is to be retained in transit use after being

transferred, sold, or leased, such as by another transit provider or in

a joint development project, then existing requirements would apply.

Previous provisions continue to allow the recipient of assistance

to transfer assets to another public agency to be used for a public

purpose. Additional information is available from the appropriate FTA

Regional Office.

F. Revenue Bond Proceeds as Local Share

Beginning with fiscal year 1999, and permissible thereafter, a

recipient of assistance under the Urbanized Area Formula Program

(Section 5307) and the Capital Program (Section 5309), may use as the

local share for capital projects the proceeds from the issuance of

bonds that are backed by future revenue from the farebox. This

provision of TEA-21 is expected to help reduce borrowing costs for

transit authorities. Under this

[[Page 34510]]

provision, using the proceeds of the revenue bonds as matching share

will be approved only if the aggregate amount of financial support from

the State and affected local governmental authorities in the urbanized

area during the next three fiscal years is not less than the aggregate

amount provided by the State and affected local governmental

authorities in the urbanized area during the preceding three fiscal

years (as is made evident in the State Transportation Improvement

Program).

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

Since fiscal year 1994, FTA has provided pre-award authority to

cover certain planning and capital costs prior to grant award. This

automatic pre-award spending authority permits a grantee to incur costs

on an eligible transit capital or planning project without prejudice to

possible future Federal participation in the cost of the project or

projects. Prior to exercising pre-award authority, grantees are

strongly encouraged to consult with the appropriate regional office

where there could be any question regarding the eligibility of the

project for future FTA funds.

Authority to incur costs for fiscal year 1998 Fixed Guideway

Modernization, Metropolitan Planning, Urbanized Area Formula, Elderly

and Persons with Disabilities, Nonurbanized Area Formula, and State

Planning and Research Programs in advance of possible future Federal

participation was provided in the December 5, 1997, Federal Register

Notice. This pre-award authority now also extends to future formula

funds that will be apportioned during the authorization period of TEA-

21, 1998-2003. Pre-award authority also applies to Capital Bus funds

identified in the December 5, 1997, notice. This pre-award authority

also applies to projects intended to be funded with STP or CMAQ funds

transferred to FTA in fiscal year 1998. This pre-award authority for

STP or CMAQ funds is now extended for the 1998-2003 authorization

period of TEA-21. Pre-award authority applies to FTA funds and flexible

funds provided the conditions in paragraphs (1) and (2) below are met.

The pre-award authority does not apply to Capital New Start funds, or

to Capital Bus projects not specified in this or previous notices. Pre-

award authority also applies to preventive maintenance costs incurred

within a local fiscal year ending during calendar year 1997, or

thereafter, under the formula programs cited above.

1. Conditions

Similar to the FTA Letter of No Prejudice (LONP) authority, the

conditions under which this authority may be utilized are specified

below:

a. This pre-award authority is not a legal or moral commitment that

the project(s) will be approved for FTA assistance or that FTA will

obligate Federal funds. Furthermore, it is not a legal or moral

commitment that all items undertaken by the applicant will be eligible

for inclusion in the project(s).

b. All FTA statutory, procedural, and contractual requirements must

be met.

c. No action will be taken by the grantee that prejudices the legal

and administrative findings which the Federal Transit Administrator

must make in order to approve a project.

d. Local funds expended by the grantee pursuant to and after the

date of this authority will be eligible for credit toward local match

or reimbursement if FTA later makes a grant for the project(s) or

project amendment(s).

e. The Federal amount of any future FTA assistance to the grantee

for the project will be determined on the basis of the overall scope of

activities and the prevailing statutory provisions with respect to the

Federal/local match ratio at the time the funds are obligated.

f. For funds to which this authority applies, the authority expires

with the lapsing of the fiscal year funds.

2. Environmental, Planning, and Other Federal Requirements

FTA emphasizes that all of the Federal grant requirements must be

met for the project to remain eligible for Federal funding. Some of

these requirements must be met before pre-award costs are incurred,

notably the requirements of the National Environmental Policy Act

(NEPA), and the planning requirements. Compliance with NEPA and other

environmental laws or executive orders (e.g., protection of parklands,

wetlands, historic properties) must be completed before state or local

funds are advanced for a project expected to be subsequently funded

with FTA funds. Depending on which class the project is included under

in FTA's environmental regulations (23 CFR part 771), the grantee may

not advance the project beyond planning and preliminary engineering

before FTA has approved either a categorical exclusion (refer to 23 CFR

part 771.117(d)), a finding of no significant impact, or a final

environmental impact statement. The conformity requirements of the

Clean Air Act (40 CFR part 51) also must be fully met before the

project may be advanced with non-Federal funds.

Similarly, the requirement that a project be included in a locally

adopted metropolitan transportation improvement program and federally

approved statewide transportation improvement program must be followed

before the project may be advanced with non-Federal funds. In addition,

Federal procurement procedures, as well as the whole range of Federal

requirements, must be followed for projects in which Federal funding

will be sought in the future. Failure to follow any such requirements

could make the project ineligible for Federal funding. In short, this

increased administrative flexibility requires a grantee to make certain

that no Federal requirements are circumvented through the use of pre-

award authority. If a grantee has questions or concerns regarding the

environmental requirements, or any other Federal requirements that must

be met before incurring costs, it should contact the appropriate

regional office.

Before an applicant may incur costs either for activities expected

to be funded by New Start funds, or for Bus Capital projects not listed

in the December 5, 1997, Federal Register Notice, it must first obtain

a written LONP from FTA. To obtain an LONP, a grantee must submit a

written request accompanied by adequate information and justification

to the appropriate FTA regional office.

H. Metropolitan Planning

TEA-21 retains much of the basic structure of the metropolitan and

statewide planning process, as established by ISTEA, with a few

significant changes. The set of sixteen metropolitan planning factors

has been reduced to seven factors: economic vitality; safety and

security; accessibility and mobility; environment, energy conservation

and quality of life; integration and connectivity; efficient operation

and management; and preservation of existing transportation resources.

Freight shippers and users of public transit are added to the explicit

set of stakeholders to be given opportunities to comment on

metropolitan plans and transportation improvement programs (TIPs).

Metropolitan planning organizations (MPOs) may include in their

TIPs an ``illustrative'' list of projects that could be implemented if

additional resources were made available. MPOs will also be encouraged

to coordinate the planning for Federally-funded non-emergency

transportation services as part of the metropolitan planning process.

FTA and FHWA will be revising the Joint Planning Regulations (23 CFR

part 450 and 49 CFR part 613) to formally

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incorporate changes to the planning program.

I. New Starts Evaluation and Criteria

TEA-21 includes several changes to the evaluation process and

criteria for New Starts fixed guideway projects. The Secretary shall

consider several additional factors in the Department's review and

evaluation of candidate New Starts projects. FTA will be required to

evaluate each project authorized for New Starts funding by each

criterion, as well as provide an overall project rating of ``highly

recommended,'' ``recommended,'' and ``not recommended.'' In addition to

its annual report to Congress on Funding Levels and Allocations of

Funds for Transit Major Capital Investments, FTA will be required to

issue a supplemental report in August of each year which rates all

projects that have completed alternatives analysis and preliminary

engineering since the date of the last report. FTA must also approve

candidate New Starts project's entry into final design. FTA also

continues its prior approval authority for entrance into preliminary

engineering.

TEA-21 requires that no less than 92 percent of the annual New

Starts program must be used for final design and construction.

FTA will issue regulations implementing the New Starts provision of

TEA-21.

VIII. New Programs Authorized by TEA-21

A. Clean Fuels Formula Program

1. Definition and Eligible Projects

The Clean Fuels Formula Program will finance the purchase or lease

of clean fuel buses and facilities and the improvement of existing

facilities to accommodate clean fuel buses. Clean fuel buses include

those powered by compressed natural gas, liquefied natural gas,

biodiesel fuels, batteries, alchohol-based fuels, hybrid electric, fuel

cell and certain clean diesel, and other low or zero emissions

technology, and which the Environmental Protection Agency (EPA) has

certified sufficiently reduces harmful emissions. Eligible projects

include:

a. purchasing or leasing clean fuel buses, including buses that

employ a lightweight composite primary structure;

b. constructing or leasing clean fuel buses or electrical

recharging facilities and related equipment;

c. improving existing mass transportation facilities to accommodate

clean fuel buses;

d. repowering pre-1993 engines with clean fuel technology that

meets the current urban bus emission standards;

e. retrofitting or rebuilding pre-1993 engines if before half life

to rebuild; and may,

f. at the discretion of the FTA, projects relating to clean fuel,

biodiesel, hybrid electric or zero emissions technology vehicles that

exhibit equivalent or superior emissions reductions to existing clean

fuel or hybrid electric technologies.

2. Application and Apportionment Deadlines

Any designated recipient seeking to apply for a grant under this

section shall submit an application to FTA no later than January 1 of

each fiscal year. No later than February 1 of each fiscal year FTA

shall apportion funds to designated recipients who submitted

applications. FTA is required to issue regulations to implement this

program.

3. Formula for Apportioning Funds

a. Areas 1,000,000 and above. Two thirds of the funds available

shall be apportioned to designated recipients with eligible projects in

urban areas with a population of 1,000,000 and above. Of this, 50

percent shall be apportioned so that each designated recipient receives

a grant in an amount equal to the ratio between:

(1) the number of vehicles in the bus fleet of the eligible

project, weighted by the severity of nonattainment for the area in

which the eligible project is located; and

(2) the total number of vehicles in the bus fleets of all eligible

projects in areas with a population of 1,000,000 and above funded,

weighted by the severity of nonattainment for all areas in which those

eligible projects are located as provided in c. below. The remaining 50

percent shall be apportioned such that each designated recipient

receives a grant in an amount equal to the ratio between:

(a) the number of bus passenger miles of the eligible project of

the designated recipient, weighted by the severity of nonattainment of

the area in which the eligible project is located as provided in c.

below.

(b) the total number of bus passenger miles of all eligible

projects in areas with a population of 1,000,000 and above funded,

weighted by the severity of nonattainment of all areas in which those

eligible projects are located as provided in c. below.

b. Areas under 1,000,000 Population. The formula for areas under

1,000,000 is the same as for areas 1,000,000 and above, except that in

areas 1,000,000 and above the formula uses a pool of all eligible

projects in areas with a population of 1,000,000 and above and the

formula for areas under 1,000,000 uses a pool of all eligible project

for areas under 1,000,000.

c. Weighting Factors. The number of clean fuel vehicles in the

fleet or the number of passenger miles shall be multiplied by a factor

of:

(1) 1.0 if, at the time of the apportionment, the area is a

maintenance area for ozone or carbon monoxide;

(2) 1.1 if, at the time of the apportionment, the area is

classified as a marginal ozone nonattainment area or a marginal carbon

monoxide nonattainment area;

(3) 1.2 if, at the time of the apportionment, the area is

classified as a moderate ozone nonattainment area or a moderate carbon

monoxide nonattainment area;

(4) 1.3 if, at the time of the apportionment, the area is

classified as a serious ozone nonattainment area or a serious carbon

monoxide nonattainment area;

(5) 1.4 if, at the time of the apportionment, the area is

classified as a severe ozone nonattainment area or a severe carbon

monoxide nonattainment area;

(6) 1.5 if, at the time of the apportionment, the area is

classified as an extreme ozone nonattainment area or an extreme carbon

monoxide nonattainment area;

(7) The fleet and passenger miles for an eligible project shall

also be multiplied by a factor of 1.2 in those areas that are both

nonattainment for carbon monoxide and are also classified as

nonattainment or maintenance for ozone.

Note: Certain of the carbon monoxide categories are inconsistent

with the categories established by the Clean Air Act, as amended.

d. Limitation on Use of Funds and Maximum Grant Amounts. The amount

of a grant to a designated recipient shall not exceed the lesser of

$15,000,000 in areas under 1,000,000 population, or $25,000,000 in

areas with a population of 1,000,000 and above, or 80 percent of the

total project cost.

No more than $50,000,000 of the amount made available each year may

be available to fund clean diesel buses.

No more than five percent of the amount made available may be

available to fund retrofitting or replacement of the engines of buses

that do not meet the clean air standards of the EPA.

At least five percent of the total program funding must be used for

the

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purchase or construction of hybrid electric or battery-powered buses or

facilities designed to service those buses.

4. Availability of Funds

TEA-21 authorizes $200,000,000 each year for the Clean Fuels

Formula Program. However, only $100,000,000 each year is within the

guaranteed funding level. Any amount made available shall remain

available to a project for one year after the fiscal year for which the

amount is made available and any funds that remain unobligated at the

end of the second fiscal year shall be added to the amount made

available in the following fiscal year.

FTA will issue guidance and application instructions for this

program.

B. Job Access and Reverse Commute Program

1. Definition and Eligible Projects

The Job Access and Reverse Commute Program, to develop additional

transportation services needed to connect welfare recipients and other

low income persons to jobs and needed support services, is authorized

at $150 million annually. However, the amounts under the guaranteed

funding level start at $50 million in fiscal year 1999 and increases to

$150 million in fiscal year 2003.

A Job Access project is a project designed to transport welfare

recipients and eligible low-income individuals to and from jobs and

activities related to their employment. The grants may finance capital

projects and operating cost of equipment, facilities, and associated

capital maintenance items related to providing access to jobs; promote

the use of transit by workers with nontraditional work schedules;

promote the use by appropriate agencies of transit vouchers for welfare

recipients and eligible low-income individuals; and promote the use of

employer provided transportation, including the transit pass benefit

program under section 132 of the Internal Revenue Code of 1986.

A Reverse Commute project is a project related to the development

of transportation services designed to transport residents from urban

areas, urbanized areas and nonurbanized areas to suburban employment

opportunities. Eligible projects include projects which subsidize the

costs associated with adding reverse commute bus, train, carpool, van

routes or service from urbanized and nonurbanized areas to suburban

work places; subsidize the purchase or lease by a nonprofit

organization or public agency of a bus or bus dedicated to shuttling

employees from their residences to a suburban work place; or otherwise

facilitate the provision of mass transportation services to suburban

employment opportunities. Planning and coordination are not eligible

activities under this program.

2. Factors for Consideration

There will be a competitive grant selection process and TEA-21

contains specific factors for consideration in awarding grants under

this program. Factors include:

a. The percentage of the population in the area to be served by the

applicant that are welfare recipients;

b. The need for additional transportation services in the area to

be served;

c. The extent to which the applicant demonstrates:

(1) Coordination with and the financial commitment of existing

transportation service providers; and

(2) Coordination with the State agency that administers the State

program funded under part A of Title IV of the Social Security Act;

d. Maximum utilization of existing transportation service providers

and expanded transit networks or hours of service,

e. Innovative approach that is responsive to identified service

needs;

f. The extent to which the applicant for a Job Access project:

(1) Presents a regional transportation plan for addressing the

transportation needs of welfare recipients and eligible low income

individuals, and

(2) Identifies long-term financing strategies to support the

services;

g. The extent to which the applicant demonstrates that the

community to be served has been consulted in the planning process; and

h. For Reverse Commute projects, the need for additional services

identified in a regional transportation plan to transport individuals

to suburban employment opportunities and the extent to which the

proposed services will address these needs.

3. Availability of Funds and Grant Requirements

Of the funds made available under this program, 60 percent shall be

allocated for eligible projects in urbanized areas with populations of

200,000 and above. Twenty percent shall be allocated for eligible

projects in urbanized areas with populations under 200,000. Twenty

percent shall be allocated for eligible projects in nonurbanized areas.

The program has a 50 percent federal share. Certain other Federal

funds may be used to meet the 50 percent local match requirement. The

requirements of Section 5307, the Urbanized Area Formula Program, apply

to these grants. All planning requirements apply to these grants.

FTA will issue further guidance and application instructions for

this program.

C. Over-the-Road Bus Accessibility Program

TEA-21 establishes the Rural Transportation Accessibility Incentive

Program, hereinafter referred to as the Over-the-Road Bus Accessibility

Program. This program is designed to assist operators of over-the-road

buses to finance the incremental capital and training costs of

complying with the Department of Transportation's anticipated final

rule regarding accessibility of over-the-road buses required by the

Americans with Disabilities Act.

Beginning in fiscal year 1999, funding will be available for

operators of over-the-road buses in intercity fixed route service,

starting with $2 million in fiscal year 1999 and increasing to $5.25

million in fiscal year 2003. In addition, beginning in fiscal year

2000, an additional $6.8 million each year will also be available for

operators of other over-the-road bus service, including local commuter

service and charter or tour service. Total funding authorized through

fiscal year 2003 is $17,500,000 for fixed route over-the-road bus

operators and $27,200,000 for operators of other over-the road bus

services. (Note: The pending technical correction bill decreases the

$6.8 million a year for operators of other over-the-road service to a

total of $6.8 million for the four years, fiscal years 2000-2003.)

TEA-21 directs FTA to conduct a national solicitation for

applications. FTA must select the recipients of grants on a competitive

basis, considering the following criteria:

1. The identified need for over-the-road bus accessibility for

persons with disabilities in the areas served by the operator;

2. The extent to which the applicant demonstrates innovative

strategies and financial commitment to providing access to over-the-

road buses to persons with disabilities;

3. The extent to which the over-the-road bus operator acquires

equipment required by the final rule prior to any required timeframe in

the final rule;

4. The extent to which financing the costs of complying with the

DOT's final rule regarding accessibility of over-the-

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road buses presents a financial hardship for the applicant; and

5. The impact of accessibility requirements on the continuation of

over-the-road bus service, with particular consideration of the impact

of the requirements on service to rural areas and for low-income

individuals.

The Federal share shall not exceed 50 percent of the project cost.

The grants under this new program will be subject to all of the terms

and conditions applicable to intercity bus operators assisted under the

nonurbanized formula program and any other terms and conditions FTA

prescribes.

FTA will issue implementing guidance.

D. Single State Pilot Program for Intercity Rail Infrastructure

Investment

TEA-21 establishes a pilot program to determine the benefits of

using transit funds to support intercity passenger rail service in the

State of Oklahoma. Any assistance provided to the State of Oklahoma

under Sections 5307 and 5311 during fiscal years 1998-2003 may be used

for capital improvements to, and operating assistance for, intercity

passenger rail service. The Secretary must submit to the House

Transportation and Infrastructure Committee and Senate Banking, Housing

and Urban Affairs Committee by October 1, 2002, a report which

evaluates the pilot program. The evaluation must address the effect of

the pilot program on alternative forms of transportation within the

State, the effects on operators of mass transportation and their

passengers; a calculation of the amount of Federal assistance provided

for intercity passenger rail service; and an estimate of the benefits

to intercity passenger rail service.

E. State Infrastructure Banks Pilot Program

The State Infrastructure Bank program was first authorized as a

pilot program under the National Highway System Designation Act of

1995. TEA-21 provides for a revised pilot program in four states,

California, Florida, Missouri and Rhode Island. These four states may

enter into new or revised cooperative agreements that specify

procedures and guidelines for establishing, operating and providing

assistance from the infrastructure bank. These four states may

capitalize the infrastructure bank with funds from Section 5307, 5310

and 5311 as well as with Federal highway funds. There is no limitation

on the amount of Federal funds that may be used to capitalize the bank

as there was under the original pilot program.

TEA-21 specifies that the requirements of Titles 23 and 49, United

States Code, shall apply to repayments from non-Federal sources to an

infrastructure bank from projects assisted by the bank. Such repayment

shall be considered to be Federal funds. Repayments from Federal

sources will also be subject to the requirements of Titles 23 and 49.

In addition, for transit projects, the requirements for Sections 5307

and 5309 projects will apply.

IX. General Information

For technical assistance purposes, the Fiscal Years 1998-2003

Apportionment Formula for Sections 5307 and 5311 are contained in Table

8. Table 9 displays the FTA Fiscal Years 1998-2003 Apportionment

Formula for the Section 5309 Fixed Guideway Modernization Funding. The

FTA Fiscal Years 1999-2003 Apportionment Formula for the Section 5308

Clean Fuels Formula Program is shown on Table 10. Displayed on Table 11

are the dollar unit values of data derived from the computations of the

fiscal year 1998 revised Urbanized Area Formula Apportionment and the

Fixed Guideway Modernization Apportionment.

This Notice is included on the FTA Home Page and may be accessed at

www.fta.dot.gov.

Issued on: June 18, 1998.

Gordon J. Linton,

Administrator.

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

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