Magnetic Levitation Transportation Technology Deployment Program

Federal RegisterOct 13, 1998

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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

49 CFR Part 268

[FRA Docket No. FRA-98-4545]

RIN 2130-AB29

Magnetic Levitation Transportation Technology Deployment Program

AGENCY: Federal Railroad Administration (FRA), Department of

Transportation (DOT).

ACTION: Interim final rule with request for comments.

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SUMMARY: The Transportation Equity Act for the 21st Century (TEA 21)

adds a new section 322 to title 23 of the United States Code. Section

322 provides a total of $55 million for Fiscal Years 1999 through 2001

for transportation systems employing magnetic levitation (``Maglev'').

Section 322 requires FRA to establish project selection criteria, to

solicit applications for funding, to select one or more projects to

receive financial assistance for preconstruction planning activities

and, after completion of such activities, to select one of the projects

to receive financial assistance for final design, engineering, and

construction activities. Section 322 authorizes--but does not

appropriate--additional Federal funds of $950 million for final design

and construction of the most promising project. Section 322 provides

that the portion of the project not covered by the funds provided under

section 322 may be covered by any non-Federal funding sources--

including private (debt and/or equity), State, local, regional, and

other public or public/private entities--as well as by Federally-

provided Surface Transportation Program, and Congestion Mitigation and

Air Quality Improvement Program funds, and from other forms of

financial assistance under TEA 21, such as loans and loan guarantees.

This Interim Final Rule creates a new part to title 49 of the Code

of Federal Regulations which establishes the regulations governing

financial assistance under section 322, including the project selection

criteria, and solicits applications for Maglev planning grants.

DATES: (1) This Interim Final Rule is effective October 13, 1998.

(2) Written comments concerning this rule must be filed on or

before November 12, 1998.

(3) Applications for financial assistance for preconstruction

planning must be received by December 31, 1998.

ADDRESSES: Written comments should refer to the docket number of this

notice

[[Page 54601]]

and be submitted in duplicate to: DOT Central Docket Management

Facility located in room PL-401 at the Plaza level of the Nassif

Building, 400 Seventh Street, SW., Washington, DC 20590. All docket

material will be available for inspection at this address and on the

Internet at http://dms.dot.gov. Docket hours at the Nassif Building are

Monday-Friday, 10 a.m. to 5 p.m., excluding Federal holidays. Those

desiring notification of receipt of comments must include a self-

addressed, stamped envelope or postcard.

Applications for preconstruction planning financial assistance must

be submitted to FRA in accordance with the provisions of this Interim

Final Rule.

FOR FURTHER INFORMATION CONTACT: Neil E. Moyer, Chief--Program

Development Division, FRA, 400 Seventh Street, SW., Washington, DC

20590 (telephone 202-493-6365; E-mail address: Neil.M[email protected]),

or Gareth Rosenau, Attorney, Office of Chief Counsel, FRA, 400 Seventh

Street, S.W., Mailstop 10, Washington, D.C. 20590 (telephone 202-493-

6054; E-mail address: Gareth.R[email protected]).

SUPPLEMENTARY INFORMATION:

Electronic Access

Internet users can access all comments received by the U.S. DOT

Dockets, Room PL-401, by using the universal resource locator (URL):

http://dms.dot.gov. It is available 24 hours each day, 365 days each

year. Please follow the instructions online for more information and

help.

An electronic copy of this document may be downloaded using a modem

and suitable communication software from the Government Printing Office

Electronic Bulletin Board Service at (202) 512-1661. Internet users may

reach the Federal Register's home page at: http://www.nara.gov/fedreg

and the Government Printing Office's database at: http://

www.access.gpo.gov/nara.

What Is Maglev?

This background information covers high-speed Maglev (240 mph) and

does not necessarily apply to the low-speed variations on this

technology, which are covered by a separate program under 23 U.S.C.

322(i).

Maglev is an advanced transport technology in which magnetic forces

lift, propel, and guide a vehicle over a specially designed guideway.

Utilizing state-of-the art electric power and control systems, this

configuration reduces the need for many mechanical parts, thereby

minimizing resistance and permitting excellent acceleration, with

cruising speeds on the order of 240 mph or more. This high performance

would enable Maglev to provide air-competitive trip times at longer

trip distances than other high-speed ground transportation (HSGT)

options. Germany has a Maglev technology ready for commercial use and

planned for application in the Berlin-Hamburg corridor; Japan has a

technologically different system under test. In the more than three

decades since passage of the HSGT Act of 1965, a number of Maglev

system concepts have undergone varying degrees of research and

development in the United States, under private or governmental

auspices. There are no Maglev systems currently operating in commercial

transportation service.

Maglev Deployment Program Under 23 U.S.C. 322

Multi-Stage Competition

Section 1218(a) of TEA 21, Pub. L.105-178, adds a new section 322

to title 23 of the United States Code. Section 322 authorizes the

funding for the design, construction, and deployment of one full-scale

revenue-service Maglev system, to be sponsored by a State or group of

States in a private/public partnership. Section 322 bases the selection

of the system to be deployed on a multi-stage competition. Initially

FRA is to establish selection criteria and to solicit applications,

within 180 days after the enactment of TEA 21 (which would be by

December 6, 1998), for financial assistance for preconstruction

planning activities. FRA may select one or more projects of those

submitted to receive funding for such activities. After the completion

of the preconstruction planning activities, FRA will select one of the

projects to receive financial assistance for final design, engineering,

and construction activities. Any decision to proceed with possible

construction of the project selected after the preconstruction planning

phase of the program will be contingent upon the receipt of

appropriations, and upon completion of appropriate environmental

documentation. The section 322 program, which is described in greater

detail below, will be referred to as the ``Maglev Deployment Program.''

This Interim Final Rule establishes the regulations governing

financial assistance under the Maglev Deployment Program, including the

project selection criteria, and solicits applications for Maglev

planning grants.

Federal Funding of the Maglev Deployment Program

Section 322 provides two types of funding from the Highway Trust

Fund for the Maglev Deployment Program; for purposes of this Interim

Final Rule, these funds are referred to as ``Federal Maglev Funds.''

First, $55 million has been made available as contract authority for

Fiscal Years 1999 through 2001; this would be used to fund the

competition in all its phases and could also be used for final design,

engineering, and construction activities of the selected project. Of

the $55 million, the Congress has made available up to $15 million for

Fiscal Year 1999, up to $15 million for Fiscal Year 2000, and $25

million for Fiscal Year 2001. Second, $950 million has been authorized

to be appropriated for Fiscal Years 2000 through 2003. No guarantee

exists that the Executive Branch will request, or that Congress will

appropriate, the $950 million (or any portion of that amount) to build

a Maglev project. Of the $950 million, $200 million is authorized to be

appropriated for each of Fiscal Years 2000 and 2001, $250 million for

Fiscal Year 2002, and $300 million for Fiscal Year 2003.

Section 322 also provides that the portion of the project not

covered by Federal Maglev Funds may be supported by any non-Federal

funding sources--including private (debt and/or equity), State, local,

regional, and other public or public/private entities--as well as by

Federally-provided Surface Transportation Program (``STP'') (23 U.S.C.

133), and Congestion Mitigation and Air Quality Improvement Program

(``CMAQ'') (23 U.S.C. 149) funds, and by other forms of financial

assistance provided under title 23, or under TEA 21, such as loans and

loan guarantees.

Standards a Maglev Project Must Meet To Be Eligible for Financial

Assistance

Section 322 provides that in order to be eligible to receive

financial assistance, a Maglev project shall:

(1) Involve a segment or segments of a high-speed ground

transportation corridor that exhibit partnership potential;

(2) Require an amount of Federal funds for project financing that

will not exceed the sum of Federal Maglev Funds, and the amounts made

available by States under STP and CMAQ;

(3) Result in an operating transportation facility that provides a

revenue producing service;

(4) Be undertaken through a public and private partnership, with at

least \1/3\ of full project costs paid using non-

[[Page 54602]]

Federal funds--funds provided under STP and CMAQ qualify as non-Federal

fund for purposes of the \1/3\ match requirement;

(5) Satisfy applicable statewide and metropolitan planning

requirements;

(6) Be approved by FRA based on an application submitted by a State

or authority designated by 1 or more States;

(7) To the extent that non-United States Maglev technology is used

within the United States, be carried out as a technology transfer

project; and

(8) Be carried out using materials at least 70 percent of which are

manufactured in the United States.

The Interim Final Rule explains these requirements in more detail.

FRA recognizes that applicants for preconstruction planning

assistance will not have detailed information with respect to these

requirements, and that the purpose of the preconstruction planning

assistance is to develop much of this information with respect to a

particular Maglev project. The preconstruction planning application

requirements of the Interim Final Rule are designed to elicit whatever

information an applicant may have pertaining to these requirements and

to secure a commitment from the applicant that the applicant fully

intends to comply with these requirements if the project is selected as

the project to receive financing for final design, engineering, and

construction activities.

Maglev Project Selection Criteria

Section 322 requires the agency to establish criteria for selecting

which eligible projects will receive financial assistance. The criteria

are required to include the extent to which--

(1) A project is nationally significant, including the extent to

which the project will demonstrate the feasibility of deployment of

Maglev technology throughout the United States;

(2) Timely implementation of the project will reduce congestion in

other modes of transportation and reduce the need for additional

highway or airport construction;

(3) States, regions, and localities financially contribute to the

project; implementation of the project will create new jobs in

traditional and emerging industries;

(4) The project will augment Maglev networks identified as having

partnership potential;

(5) Financial assistance will foster public and private

partnerships for infrastructure development and attract private debt or

equity investment;

(6) Financial assistance would foster the timely implementation of

a project; and

(7) Life-cycle costs in design and engineering are considered and

enhanced.

The Interim Final Rule establishes the criteria FRA will use in

selecting projects to receive funding; these criteria are an

elaboration of the list of requirements contained in section 322.

FRA recognizes that applicants for preconstruction planning

assistance may not have detailed information with respect to each of

these criteria, and that the purpose of the preconstruction planning

assistance is to develop much of this information with respect to a

particular Maglev project. The preconstruction planning application

requirements of the Interim Final Rule are designed to elicit whatever

information an applicant may have pertaining to these criteria. As

previously noted, FRA will select one of the various Maglev projects

that receives preconstruction planning grants to receive financing for

final design, engineering, and construction activities. The project

selected must meet all of the project eligibility standards contained

in this Interim Final Rule. If more than one project meets these

standards, FRA will evaluate and compare the eligible projects

according to the project selection criteria.

Eligible Project Costs

Section 322 provides that the following project costs are eligible

to be paid with Federal Maglev Funds made available under section 322:

preconstruction planning activities and the capital cost of the fixed

guideway infrastructure of a Maglev project, including land, piers,

guideways, propulsion equipment and other components attached to

guideways, power distribution facilities (including substations),

control and communications facilities, access roads, and storage,

repair and maintenance facilities. The costs of stations, vehicles, and

equipment are not eligible project costs.

Preconstruction planning activities that are eligible to be funded

under section 322 include:

(1) Preparation of such feasibility studies, major investment

studies, and environmental impact statements and assessments as are

required under State law;

(2) Pricing of the final design, engineering, and construction

activities proposed to be assisted; and

(3) Such other activities as are necessary to provide FRA with

sufficient information to evaluate whether a project should receive

financial assistance for final design, engineering, and construction

activities.

Construction Contracts Must Comply With the Davis Bacon Act

Section 322 requires that the ``Prevailing Wages'' requirement of

the Davis Bacon Act (40 U.S.C. 276a--276a-5) applies to construction

contracts under the Maglev Deployment Program.

FRA's Outreach Efforts Regarding the Maglev Deployment Program

FRA is conducting an extensive outreach program to inform the

public of the availability of funding of new and expanded programs

under TEA 21, including the Maglev Deployment Program. Based on

discussions to date, FRA believes that fewer than 10 States are likely

to apply for financial assistance under the Maglev Deployment Program.

Initial Outreach Session

On July 23, 1998, FRA, in cooperation with the High Speed Ground

Transportation Association and Amtrak, held an all day meeting to

explain the TEA 21 rail-related programs to representatives of

constituent interest groups at Union Station, Washington D.C. Included

was a session on the Maglev Deployment Program. In conjunction with

this meeting FRA made available to all participants a loose leaf

notebook with information regarding each of the new programs. The

Maglev information included an earlier draft of the substance of this

rule, in the form of guidelines for applicants for planning grants, a

``fact sheet'' on the program, and the statutory language behind it.

The guidelines were also published on FRA's internet web page. Part of

the Maglev session included a question and answer period involving a

number of interested persons attending the meeting. Attendance was

about 65.

``Piggybacking'' on Other DOT Outreach Meetings

Other DOT components are having similar outreach meetings on parts

of TEA 21 of particular interest to them; examples are an early Federal

Highway Administration-sponsored meeting with representatives of most

State DOTs in Dallas, and a recent Federal Transit Administration-

sponsored meeting in Harrisburg. FRA has been represented at these

meetings and has briefly described the Maglev Deployment Program.

Three Other Outreach Sessions

FRA has scheduled two other meetings similar to the Union Station

meeting described above. They will

[[Page 54603]]

each have similar Maglev components, including publication of the

Interim Final Rule. The first will be held in Los Angeles on October

23. Another, session is planned to be held in New Orleans. In October,

1998, FRA also plans to schedule at least one meeting specifically

addressing the Maglev Deployment Program and inviting the general

public as well as States known to have a particular interest and which

are likely to apply for financial assistance. This session will include

a focused question and answer period intended to clarify for all

concerned any issues associated with the Interim Final Rule.

Why FRA Is Issuing an Interim Final Rule

This document is published as an Interim Final Rule, without prior

notice and opportunity for comment. Because this regulation relates to

a grant program, the requirements of the Administrative Procedure Act

(APA), 5 U.S.C. 553, are not applicable. Moreover, even if the notice

and comment provisions of the APA did apply, the agency believes that

there is good cause for finding that providing notice and comment in

connection with this rulemaking action is impracticable, unnecessary,

and contrary to the public interest.

FRA's decision to proceed with an Interim Final Rule in this

proceeding rather than a notice of proposed rulemaking was guided by

several considerations. First, the enabling legislation requires the

Secretary to solicit applications from States or authorities designated

by one or more States within 180 days after the date of enactment of

TEA 21 (June 9, 1998). This time constraint simply did not provide

sufficient time for FRA to frame an approach to implementing the

program, develop proposed implementing regulations, consult with

interested groups, and publish draft and final regulations by December

6, 1998 (180 days after enactment). The development of appropriate

implementing procedures was further complicated by Congressional

consideration of TEA 21 technical corrections legislation that was

ultimately adopted on July 22, 1998 (Pub. L. 105-206). The technical

corrections legislation contained modifications to a number of TEA 21

programs, including the Maglev Deployment Program. FRA's decision to

proceed with an Interim Final Rule was also bolstered by an extensive

outreach conducted with the interested Maglev and state transportation

communities. States officials and others with an interest in Maglev

development had an opportunity to receive briefings from agency

officials and to review and comment on FRA's proposed approach to the

application and award processes before FRA completed this Interim Final

Rule.

In addition, States need the information contained in this Interim

Final Rule immediately in order to determine what type of Maglev

projects qualify for preconstruction planning assistance, to gather

supporting information, and to begin to prepare applications

immediately upon this Interim Final Rule's publication in the Federal

104-121) (The Congressional review provisions of the Small Business

Regulatory Enforcement Fairness Act), the agency also, for good cause,

finds that notice and public procedure are impracticable, unnecessary,

and contrary to the public interest, and, therefore, this Interim Final

Rule can be made effective upon publication.

As an Interim Final Rule, this regulation is fully in effect and

binding upon its effective date. No further regulatory action by the

agency is necessary to make the rule effective. However, in order to

benefit from comments which interested parties and the public may have,

the agency is requesting that comments be submitted to the docket for

this rule. All comments submitted in response to this Interim Final

Rule, will be considered by the agency. Following the close of the

comment period, the agency will publish a document responding to the

comments and, if appropriate, the agency will amend the provisions of

this Interim Final Rule.

Section-by-Section Analysis

Subpart A--Overview

Section 268.1 Definitions

The terms used in this part are defined; many of these definitions

are taken from 23 U.S.C. 322.

Section 268.3 Different Phases of the Maglev Deployment Program

This section identifies the five different phases of this program,

and FRA's projected timetable for implementing these phases. In Phase

I, States will submit applications, and FRA will select projects for

preconstruction planning assistance. In Phase II, financial assistance

recipients will prepare and submit to FRA project descriptions and

supporting preconstruction planning reports and environmental

documentation (environmental assessment (EA)). After completion of the

EA, each financial assistance recipient will initiate activities aimed

at preparing a site-specific draft environmental impact statement

(``EIS''). In Phase III, FRA will select the one project which could

ultimately be constructed, subject to appropriation of funds to cover

such construction. Each recipient of financial assistance will be

expected to continue to work on the site-specific draft EIS in Phase

III. In Phase IV, the financial assistance recipient selected in Phase

III will undertake final design and engineering work for the selected

project together with completing the site-specific final EIS. Detailed

agreements for the construction and operation of the project would be

negotiated. The other planning grant recipients may also elect to

continue their work on preparing a site-specific draft EIS and bring it

to completion. In Phase V, the sponsoring State or State designated

authority would oversee the efforts of the public/private partnership

formed to progress the selected project, to complete the detailed

engineering designs, finance, construct, equip, and operate the project

in revenue service.

Section 268.5 Funding Sources for the Maglev Deployment Program

This section identifies the amounts of funding available under 23

U.S.C. 322 (referred to as ``Federal Maglev Funds'') to support the

program. It also identifies other potential Federal funding sources.

These various funding sources were outlined earlier in this document.

Section 268.7 Federal/State Share and Restrictions on the Uses of

Federal Maglev Funds

This section contains the various restrictions imposed on the use

of Federal Maglev Funds. First, Federal Maglev Funds may only be used

for ``eligible project cost.'' Eligible project costs include

preconstruction planning activities and the capital costs of fixed

guideway infrastructure of a Maglev project. Eligible project costs do

not include costs incurred for Maglev stations, vehicles, and

equipment; these non-eligible project costs would be part of the full

project cost.

Second, the Federal share of full project costs shall be not more

than \2/3\, with the remaining \1/3\ paid by the applicant using non-

Federal funds. For purposes of this cost sharing arrangement, funds

made available to the applicant under STP and CMAQ count as non-Federal

funds. Federal funds made available to the applicant under title 23 and

TEA 21 can be used to pay full project cost. To ensure that the cost

sharing requirements are met,

[[Page 54604]]

all preconstruction planning grants will require States or designated

authorities to provide a match of at least \1/3\ from non-Federal

funds.

Third, Federal Maglev funds provided under a preconstruction

planning grant may be used only for Phase II activities, and for

completion of a site-specific draft EIS; see Sec. 268.3;

Finally, the ``prevailing wages'' requirement of the Davis Bacon

Act (40 U.S.C. 276a--276a-5) applies to any construction contracts

under the Maglev Deployment Program.

Subpart B--Procedures For Financial Assistance

Section 268.9 Eligible Participants

Any State, or any authority designated by one or more State(s) to

carry out the preconstruction planning activities under the Maglev

Deployment Program, is eligible to participate in the Maglev Deployment

Program.

Section 268.11 Project Eligibility Standards

This section identifies the standards which projects must meet to

be eligible for funding under the Maglev Deployment Program. See the

earlier discussion of project eligibility standards; there FRA set out

the eight project eligibility standards contained in 23 U.S.C. 322. FRA

recognizes that applicants for preconstruction planning assistance will

not have detailed information with respect to the eight standards, and

that the purpose of the preconstruction planning assistance is to

develop much of this information with respect to a particular Maglev

project. The preconstruction planning application requirements of the

Interim Final Rule are designed to elicit whatever information an

applicant may have pertaining to these requirements and to secure a

commitment from the applicant that the applicant fully intends to

comply with these requirements if the project is selected as the

project to receive financing for final design, engineering, and

construction activities.

FRA has described section 322 standards in more detail for purposes

of eligibility for final design, engineering, and construction

financing. These standards, and the reference to corresponding citation

in section 322, are as follows:

Purpose and Significance of the Project. (1) The project

description shall point to a Maglev facility and daily operation the

primary purpose of which is the conduct of a revenue-producing

passenger transportation service between distinct points, rather than a

service solely for the passengers' riding pleasure. (subsection

322(d)(3), ``result in an operating transportation facility that

provides a revenue producing service.'')

(2) The project description shall incorporate scheduled operation

at a top speed of not less than 240 mph. (subsection 322(a)(3),

definition of Maglev as ``capable of safe use by the public at a speed

in excess of 240 mph.'')

Benefits for the American Economy. The project description shall

include a certification as to (1) and (2) below and, as appropriate, a

technology acquisition/transfer plan which describes the strategy for

their accomplishment.

(1) Processes will be established that will enable an American-

owned and -sited firm (or firms) to gain, in the course of the project,

the capability to participate in the design, manufacture, and

installation of the facilities and vehicles needed for a Maglev

operation, if the owner of the selected version of Maglev technology is

not an American owned and -sited firm (thus meeting the technology

transfer requirement of Section 322). (subsection 322(d)(7))

(2) The 70 percent U.S. content provision of Section 322

(subsection 322(d)(8)) will be carried out.

Partnership Potential. The project shall exhibit partnership

potential by satisfying all three items (1), (2), and (3) below.

(1) A private/public partnership must be in place that is ready,

willing, and able to finance, construct, operate, and maintain the

project; and

(2) The private/public partnership either owns the version of

Maglev technology proposed to be implemented in the project, or has an

agreement with the owner which affords full cooperation to the

partnership in progressing the project, including implementation of the

technology acquisition/transfer plan if applicable; and

(3) The recipient of a preconstruction planning grant or the FRA

has developed and endorsed a projection of system capital costs,

demand, revenues, operating expenses, and total costs and benefits,

that--

(A) Covers either the entire corridor in which the Maglev project

is involved (``Corridor''), or the project considered independently;

(B) Demonstrates that private enterprise would be able to run the

Corridor or the project--once built and paid for--as a completely self-

sustaining entity, in which revenues will cover operating expenses and

continuing investment needs; and

(subsection 322(d)(1), ``involve a segment or segments of a high-speed

* * * transportation corridor that exhibit partnership potential.''

Under subsection 322(a)(4), Definitions, ``partnership potential'' is

given the definition it received in the FRA report, High-Speed Ground

Transportation for America, September 1997. This portion of the Interim

Final Rule applies FRA's definition of ``partnership potential'' to the

availability of funds for planning a Maglev program.)

Funding Limits and Sources. The project description shall include a

financing plan that demonstrates project completion with Federal Maglev

Funds not in excess of the remaining funds from the total of $1,005

million authorized in Section 322, and funds made available to the

recipient under STP and CMAQ. At least \1/3\ of Full Project Costs must

come from non-Federal funds; funds made available to the recipient

under STP and CMAQ qualify as non-Federal funds for purposes of this

cost-sharing requirement. Federal funds made available under title 23

and TEA 21 may be used to pay for full project costs. (subsections

322(b), (d)(2) and (4), and (h)(3) and (4))

Project Management. The State, the technology owner, and all other

relevant project partners must include in the Project Description an

agreed upon--

(1) Management plan that defines the partnership, responsibilities,

and procedures for accomplishing the project;

(2) Project schedule that shows how timely implementation of the

project will be accomplished, including, to the extent possible, a

construction plan and schedule; and

(3) Financial plan that shows how funds will flow, in accordance

with the other project eligibility standards.

(FRA considers effective project management, making use of the minimal

tools specified in this provision, as essential to the fulfillment of,

and therefore implicit in, the other project eligibility standards as

called for in section 322.)

Planning/Environmental Process. (1) Assessment of environmental

consequences of the proposed project. Recipients of preconstruction

planning grants shall prepare EAs and site-specific draft EISs.

EAs shall include information to support the grantee's decision to

pursue the proposed project. The grantee shall develop the information

and discuss the environmental consequences of the proposed technology

and route in

[[Page 54605]]

sufficient detail for the preparation of appropriate documentation by

FRA to support selection of one project. This shall include the

identification of potential positive and negative environmental effects

resulting from the technology (e.g. energy consumption compared to

other transportation options), generic noise emissions at various

distances from the centerline of the guideway, changes in

electromagnetic field levels at various distances from the centerline

of the guideway, as well as environmental screening of the proposed

route (e.g., identification of land use; identification of endangered

species possibly present and location of their critical habitat;

identification of navigable waterways, wetlands and other sensitive

water resources; and identification of the location of parks, wildlife

refuges, historic and archaeological sites of National, State or local

significance and other sites protected by Section 4(f) of the

Department of Transportation Act.). The latter information and analysis

shall be submitted four months in advance of the remainder of the

project description.

Site-specific draft EISs will consist of all work necessary to

support selection of a preferred alignment within the proposed corridor

discussed in the EA. (subsection 322(d)(5))

(2) The project description must also include letters of

endorsement of project implementation from all the State departments of

transportation involved, and from all Metropolitan Planning

Organizations for metropolitan areas that would be served by the

project.

Section 268.13 Deadline for Submission of Applications for

Preconstruction Planning Assistance

Applications for preconstruction planning assistance shall be

submitted to the FRA Administrator by December 31, 1998. The section

identifies the address to which the applications must be sent.

Section 268.15 Form and Contents of Applications for Preconstruction

Planning Assistance

This section identifies the information that must be contained in

each application.

Section 268.17 Project Selection Criteria

This section identifies the project selection criteria that FRA

will apply in selecting projects for financing under the Maglev

Deployment Program. These criteria are based on the seven factors

contained in 23 U.S.C. 322, and discussed earlier in this document.

These criteria, and the reference to corresponding citation in section

322, are as follows.

Purpose and Significance of the Project. (1) The degree to which

the project description demonstrates attractiveness to travelers, as

measured in passengers and passenger-miles. (subsection 322(e)(1))

(2) The extent to which implementation of the project will reduce

congestion, and attendant delay costs, in other modes of

transportation; will reduce emissions and/or energy consumption; or

will reduce the rate of growth in needs for additional highway or

airport construction. Measures for this criterion will include but not

be limited to the present value of congestion reduction, pollution

reduction, and/or facility cost-avoidance benefits. (subsection

322(e)(2))

(3) The degree to which the project will demonstrate the variety of

operating conditions which are to be expected in the United States.

(subsection 322(e)(1))

(4) The degree to which the project will augment a Maglev corridor

or network that has been identified, by any State, group of States, or

the FRA, as having partnership potential. (subsection 322(e)(5))

Timely Implementation. The speed with which the project can

realistically be brought into full revenue service, based on the

project description and on the current and projected development status

of the Maglev technology selected by the applicant for the project.

(The text of section 322 twice explicitly assumes ``timely

implementation of the project'' (in subsections 322(e)(2) and (7)), and

the stringent deadlines established in subsections 322(c) and (f)(1),

together with the five-year authorization schedule in subsection

322(h)(1), reinforce the clear Congressional intent that the project

shall be implemented in a timely manner.)

Benefits for the American Economy. The extent to which the project

is expected to create new jobs in traditional and emerging industries

in the United States. (subsection 3322(e)(4))

Partnership Potential. The degree to which the project description

demonstrates partnership potential for the corridor in which it is

involved, and/or for the project independently. (subsection 322(e)(2),

(3), (5), (6), and (8))

Funding Limits and Sources. (1) The extent and proportion to which

States, regions, and localities commit to financially contributing to

the project, both in terms of their own locally-raised, entirely non-

Federal funds, and in terms of commitments of scarce Federal resources

from non-Federal Maglev funds (subsection 322(e)(3)); and

(2) The extent and proportion to which the private sector

contributes financially to the project. (subsection 322(e)(6))

FRA did not set forth criteria dealing with project management and

planning dealing with the environmental process. Commenters are

requested to address whether criteria in these two or additional areas

are needed and, if so, to provide detailed suggestions as to how such

criteria should be worded.

Section 268.19 Evaluation of Applications for Preconstruction Planning

Assistance

This section identifies the criteria to be used by FRA in

evaluating the applications. FRA will evaluate the applications for

their completeness and responsiveness to the requirements listed in

Sec. 268.15 (form and content of application). The project eligibility

standards (Sec. 268.11) and project evaluation criteria (Sec. 268.17)

will guide the FRA's review of the project descriptions produced under

the planning grants. Although subject to revision, the information in

Sec. 268.11 and Sec. 268.17 should assist the States in completing

their applications in the competition for planning grants, since the

project descriptions will need to respond to the standards and

criteria. In evaluating the applications for planning grants FRA will

consider how consistent the applicant's project is to the standards and

criteria and the application's likelihood of leading to a project that

meets all the standards and criteria.

Section 268.21 Selection of one Maglev Project for Final Design,

Engineering and Construction Funding

This section is a brief description of the process FRA will follow

in selecting the one successful applicant for a construction assistance

from among the recipients of planning grants. That one project must

meet each and every project eligibility standard contained in

Sec. 268.11(b). If more than one project meets all these standards,

then the FRA will evaluate and compare the eligible projects according

to the set of project selection criteria contained in Sec. 268.17. In

reviewing competing projects under the project eligibility standards

and project selection criteria, the FRA will exercise particular

vigilance regarding the following elements of the preconstruction

planning process, although not to the exclusion of others:

[[Page 54606]]

(1) The credibility of the demand and revenue forecasts, cost

estimates, and benefit/cost comparisons; and

(2) The credibility of the financial plan.

Regulatory Analyses and Notices

E.O. 12866 and DOT Regulatory Policies and Procedures

The agency has evaluated this Interim Final Rule in accordance with

existing regulatory policies and procedures and has concluded that it

is a nonsignificant regulatory action under E.O. 12866, and a

nonsignificant rule under section 5(a)(4) of the DOT Regulatory

Policies and Procedures (44 FR 11034, February 26, 1979). The Interim

Final Rule is not a significant regulatory action under E.O. 12866

because it will not have an annual effect on the economy of $100

million or more or adversely affect in a material way the economy, a

sector of the economy, productivity, competition, jobs, the

environment, public health or safety, or State, local, or tribal

governments or communities; will not create a serious inconsistency

with an action planned or underway by another Federal agency; will not

materially alter the budgetary impact of entitlements, grants, user

fees, or loan programs or the rights and obligations of recipients

thereof; and will not raise novel legal or policy issues arising out of

legal mandates, the President's priorities, or the principles of the

Executive Order. The Interim Final Rule implements the preconstruction

planning portion of a Congressionally mandated program to provide

financial assistance to state and local governments in developing and

implementing a transportation project involving magnetic levitation. At

this time, the sum of $55 million dollars is available to implement the

program and an authorization for future appropriations totaling $950

million is in place. However, as noted earlier, the availability of

these additional funds is contingent on an appropriation by the

Congress.

Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.)

requires a review of rules to assess their impact on small entities.

FRA certifies that this rule will not have a significant impact on a

substantial number of small entities. Eligible applicants for the

Maglev Deployment Program are limited by the enabling statute (23

U.S.C. 322(d)) to States or authorities designated by one or more

States. The program implemented by the Interim Final Rule has the

potential to benefit some small entities who may be able to participate

as consultants to States or designated authorities in the

preconstruction planning activities, final design, engineering and

construction activities for Maglev deployment.

Paperwork Reduction Act

The Paperwork Reduction Act (44 U.S.C. 3501 et seq.) addresses the

collection of information by the Federal government from individuals,

small businesses and State and local government and seeks to minimize

the burdens such information collection requirements might impose. A

collection of information includes requiring answers to identical

questions posed to, or identical reporting or record-keeping

requirements imposed on, ten or more persons, other than agencies,

instrumentalities or employees of the United States. This Interim Final

Rule contains information and reporting requirements that would apply

to States, groups of States or designated authorities that file

applications for Federal funding for preconstruction planning

activities, and to grant recipients who would conduct final design,

engineering and construction activities in support of Maglev

deployment. Based on FRA's long experience in Maglev development in the

United States extending back to the early 1970's, including preparation

and issuance of the 1997 report ``High Speed Ground Transportation for

America,'' the statutory limit on the types of entities that may apply

for funding (States, groups of States, and State designated

authorities), the rigorous requirements for developing a viable

project, and the substantial financial and resource commitment that

will be required of applicants, and the information FRA has received

through its outreach efforts, the FRA has concluded that fewer than 10

applications for preconstruction planning funds are likely to be

received by the FRA from qualified applicants. However, if, as a result

of this Interim Final Rule, FRA becomes aware that there are

information collection requirements, FRA will submit an information

collection package to OMB for approval at that time.

Environmental Impact

FRA has evaluated these regulations in accordance with its

procedures for ensuring full consideration of the potential

environmental impacts of FRA actions, as required by the National

Environmental Policy Act (42 U.S.C. 4321 et seq.) and related

directives. FRA has concluded that the issuance of this Interim Final

Rule, which establishes a process for receiving applications for

planning activities associated with the Maglev Deployment Program, does

not have a potential impact on the environment and does not constitute

a major Federal action requiring an environmental assessment or

environmental impact statement. The Interim Final Rule includes

requirements for the preparation of environmental assessments of

proposed Maglev projects by successful applicants during the

preconstruction planning stage and additional environmental reviews

will be undertaken under the auspices of the FRA before one Maglev

project is selected for final design and construction funding.

Federalism Implications

This Interim Final Rule has been analyzed in accordance with the

principles and criteria contained in Executive Order 12612, and FRA has

determined that it does not have sufficient federalism implications to

warrant the preparation of a Federalism Assessment. The Maglev

Deployment Program provides states with the opportunity to explore the

development of a new transportation technology in a working partnership

with the Federal Government.

List of Subjects in 49 CFR Part 268

Grant programs-transportation, High speed ground transportation,

Maglev, Magnetic levitation.

The Rule

In consideration of the foregoing, FRA adds new part 268 to Title

49 of the Code of Federal Regulations as set forth below:

PART 268--MAGNETIC LEVITATION TRANSPORTATION TECHNOLOGY DEPLOYMENT

PROGRAM

Subpart A--Overview

Sec.

268.1 Definitions.

Sec 268.3 Different phases of the Maglev Deployment Program.

Sec 268.5 Federal funding sources for the Maglev Deployment

Program.

268.7 Federal/State share and restrictions on the uses of Federal

Maglev Funds.

Subpart B--Procedures For Financial Assistance

268.9 Eligible participants.

268.11 Project eligibility standards.

268.13 Deadline for submission of applications for preconstruction

planning assistance.

268.15 Form and contents of applications for preconstruction

planning assistance.

268.17 Project selection criteria.

268.19 Evaluation of applications for preconstruction planning

assistance.

[[Page 54607]]

268.21 Selection of one Maglev project for final design,

engineering, and construction funding.

Authority: 49 U.S.C. 322, 23 U.S.C. 322; 49 CFR 1.49.

Subpart A--Overview

Sec. 268.1 Definitions.

As used in this part--

CMAQ means Congestion Mitigation and Air Quality Improvement

Program (23 U.S.C. 149).

Environmental assessment (``EA'') means the environmental

assessment in support of the project description and containing the

information listed in Sec. 268.11(b)(6)(i).

Environmental impact statement (``EIS'') means the environmental

impact statement which is required pursuant to Secs. 268.3 and

Sec. 268.11(b)(6)(i).

Eligible project costs means the costs of preconstruction planning

activities and the capital cost of the fixed guideway infrastructure of

a Maglev project, including land, piers, guideways, propulsion

equipment and other components attached to guideways, power

distribution facilities (including substations), control and

communications facilities, access roads, and storage, repair, and

maintenance facilities, but eligible project costs do not include the

cost of stations, vehicles, and equipment.

Federal Maglev Funds means such funds as are provided under the

authority of 23 U.S.C. 322 to pay for Eligible Project Costs.

Full project costs means the total capital costs of a Maglev

project, including Eligible Project Costs and the costs of stations,

vehicles, and equipment.

Phase means one of the five different phases of the Maglev

Deployment Program; these phases are described in Sec. 268.3.

Maglev means transportation systems employing magnetic levitation

that would be capable of safe use by the public at a speed in excess of

240 miles per hour.

Maglev deployment program means the program authorized by 23 U.S.C.

322.

Partnership potential means the usage of the term in the commercial

feasibility study of high-speed ground transportation (High Speed

Ground Transportation for America) mandated under section 1036 of the

Intermodal Surface Transportation Efficiency Act of 1991 (105 Stat.

1978). Under that usage any corridor exhibiting Partnership Potential

must at least meet the following two conditions:

(1) Private enterprise must be able to run on the corridor--once

built and paid for--as a completely self-sustaining entity; and

(2) The total benefits of a Maglev corridor must equal or exceed

its total costs.

STP means the Surface Transportation Program (23 U.S.C. 133).

TEA 21 means the Transportation Equity Act for the 21st Century

(Pub. L. 105-178).

Sec. 268.3 Different phases of the Maglev Deployment Program.

(a) The Maglev Deployment Program includes five phases, as

described in paragraphs (b) through (f) of this section. The current

projected timing for implementing these phases is indicated to assist

applicants in planning their projects. All dates beyond the first date

(the deadline for the submission of preconstruction planning

applications) are for planning purposes only and are subject to

change--including possible acceleration of deadlines--based on the

progress of the Maglev Deployment Program; grantees will be notified

accordingly.

(b) Phase I--Competition for Planning Grants (Early October 1998-

March 31, 1999)--(1) Description. In Phase I, States will apply for

funds for preconstruction planning activities. As required by

Sec. 268.13, applications must be filed with FRA by December 31, 1998.

FRA will select one or more projects to receive preconstruction

planning financial assistance awarded under this part to perform Phase

II of the Maglev Deployment Program.

(2) Timing of Major Milestones.

(i) December 31, 1998--Planning grant applications due.

(ii) February 28, 1999--FRA selects grantees for planning grants.

(iii) March 31, 1999--FRA awards planning grants for the conduct of

activities listed in Phase II.

31, 2000)--(1) Description. In Phase II, each grant recipients will

prepare and submit to FRA a project description and supporting

preconstruction planning reports and an EA. Supporting reports may

include demand and revenue analyses, project specification, cost

estimates, scheduling, financial studies, and other information in

support of the project description. FRA will use this information in

reaching a decision on which project to select for final engineering

and construction financing. In addition, after completion of the EA,

each grant recipient will initiate activities aimed at preparing a

site-specific draft EIS. FRA will initiate documentation of

environmental factors considered in the project selection process.

(2) Timing of Major Milestones.

(i) November 30, 1999--Deadline for submission of appropriate EA

needed by FRA for the selection of one project under Phase III.

(ii) March 30, 2000--Deadline for submission of project

descriptions and any related supporting reports needed by FRA for

project selection.

(d) Phase III--Project Selection Process (April 1, 2000)--July 31,

2000)--(1) Description. FRA will evaluate the information provided by

the grant recipients under Phase II and will select one project for

final design, engineering, and construction funding. Recipients of

assistance will progress work on site-specific EISs.

(2) Timing of Major Milestones. July 31, 2000--FRA selects the

project.

(e) Phase IV--Project Development and Completion of Site-specific

EIS (August 1, 2000--July 31, 2001)--(1) Description. The financial

assistance recipient selected in Phase III will undertake final design

and engineering work for the selected project together with completing

the site-specific final EIS. Detailed agreements for the construction

and operation of the project would be negotiated. The other grant

recipients may also elect to complete the site-specific draft EISs

initiated during Phase II.

(2) Timing of Major Milestones. July 31, 2001--Final Record of

Decision on site-specific EIS, confirming the project design.

(f) Phase V--Completion of Detailed Engineering & Construction

(August 1, 2001 and beyond).--(1) Description. In Phase V, the

sponsoring State or State designated authority would oversee the

efforts of the public/private partnership formed to progress the

selected project, to complete the detailed engineering designs,

finance, construct, equip, and operate the project in revenue service.

Construction would likely be contingent on the appropriation of federal

funds.

Sec. 268.5 Federal funding sources for the Maglev Deployment Program.

(a) Federal Maglev Funds. Section 322 of Title 23 provides for the

following funds for the Maglev Deployment Program:

(1) Contract authority. Fifty-five million has been made available

for the Maglev Deployment Program as contract authority from the

Highway Trust Fund for Fiscal Years 1999 through 2001; this would be

used to fund the competition in all its phases and could also be used

for final design, engineering, and construction activities of the

selected

[[Page 54608]]

project. Of the $55 million, the Congress has made available up to $15

million for Fiscal Year 1999, up to $15 million for Fiscal Year 2000,

and $25 million for Fiscal Year 2001.

(2) Authorization for appropriations. Nine hundred fifty million,

also from the Highway Trust Fund, has been authorized to be

appropriated for the Maglev Deployment Program for Fiscal Years 2000

through 2003. Of the $950 million, $200 million is authorized to be

appropriated for each of Fiscal Years 2000 and 2001, $250 million for

Fiscal Year 2002, and $300 million for Fiscal Year 2003. Any decision

to proceed with possible Federal funding of the construction of a

Maglev system will be contingent upon the receipt of appropriations,

and upon completion of appropriate environmental documentation.

(b) Other Federal funds. Section 322 of Title 23 provides that the

portion of the Maglev project not covered by Federal Maglev Funds may

be covered by any non-Federal funding sources--including private (debt

and/or equity), State, local, regional, and other public or public/

private entities--as well as by Federally-provided STP and CMAQ funds,

and by other forms of financial assistance made available under title

23 and TEA 21, such as loans and loan guarantees.

Sec. 268.7 Federal/State share and restrictions on the uses of Federal

Maglev Funds.

(a) Federal share. The Federal share of Full Projects Costs shall

be not more than \2/3\, with the remaining \1/3\ paid by the grant

recipient using non-Federal funds. Funds made available under STP and

CMAQ are considered non-Federal funds for purposes of the matching

requirement.

(b) Restrictions on the uses of Federal Maglev Funds. (1) Federal

Maglev Funds may be applied only to Eligible Project Costs;

(2) Federal Maglev funds provided under a preconstruction planning

grant may be used only for Phase II activities, and for completion of

site-specific draft EIS; see Sec. 268.3;

(3) Federal Maglev Funds may be used to pay for only \2/3\ of

preconstruction planning costs; grant recipients are required to pay

the remaining \1/3\ of the costs with non-Federal funds; and

(4) The ``prevailing wages'' requirement of the Davis Bacon Act (40

U.S.C. 276a-276a-5) applies to any construction contracts under the

Maglev Deployment Program.

Subpart B--Procedures for Financial Assistance

Sec. 268.9 Eligible participants.

Any State, or any authority designated by one or more State(s) to

carry out the preconstruction planning activities under the Maglev

Deployment Program is eligible to participate in the Maglev Deployment

Program.

Sec. 268.11 Project eligibility standards.

(a) Project eligibility standards for preconstruction planning

financing. (1) As required by 23 U.S.C. 322(d)(4), in order to be

eligible to receive financial assistance, a Maglev project shall:

(i) Involve a segment or segments of a high-speed ground

transportation corridor that exhibit Partnership Potential;

(ii) Require an amount of Federal funds for project financing that

will not exceed the sum of Federal Maglev Funds, and the amounts made

available by States under STP and CMAQ;

(iii) Result in an operating transportation facility that provides

a revenue producing service;

(iv) Be undertaken through a public and private partnership, with

at least \1/3\ of Full Project Costs paid using non-Federal funds;

(v) Satisfy applicable statewide and metropolitan planning

requirements;

(vi) Be approved by FRA based on an application submitted by a

State or authority designated by 1 or more States;

(vii) To the extent that non-United States Maglev technology is

used within the United States, be carried out as a technology transfer

project; and

(viii) Be carried out using materials at least 70 percent of which

are manufactured in the United States.

(2) FRA recognizes that applicants for preconstruction planning

grants will not have detailed information with respect to some of the

requirements of paragraph (a)(1) of this section, and that the purpose

of a preconstruction planning grant is to develop much of this

information with respect to a particular Maglev project. As required by

Sec. 268.15, an applicant will need to provide whatever information it

has with respect to each of the requirements of paragraph (a)(1) of

this section together with a certification that the applicant fully

intends to comply with the requirements of paragraph (a) of this

section should its project be selected by FRA for final design,

engineering and construction financing.

(b) Project eligibility standards for final design, engineering,

and construction financing. FRA will select the most promising Maglev

project for final design, engineering, and construction financing. To

be eligible to be considered, the project must meet each of the

following requirements; these requirements restate the requirements in

paragraph (a)(1) of this section, but with more detail and in a

different order:

(1) Purpose and Significance of the Project. (i) The project

description shall point to a Maglev facility and daily operation the

primary purpose of which is the conduct of a revenue-producing

passenger transportation service between distinct points, rather than a

service solely for the passengers' riding pleasure.

(ii) The project description shall incorporate scheduled operation

at a top speed of not less than 240 mph.

(2) Benefits for the American Economy. The project description

shall include a certification as to paragraph (b)(2)(i) and (ii) of

this section and, as appropriate, a technology acquisition/transfer

plan which describes the strategy for their accomplishment.

(i) Processes will be established that will enable an American-

owned and -sited firm (or firms) to gain, in the course of the project,

the capability to participate in the design, manufacture, and

installation of the facilities and vehicles needed for a Maglev

operation, if the owner of the selected version of Maglev technology is

not an American-owned and--sited firm (thus meeting the technology

transfer requirement of 23 U.S.C. 322).

(ii) The 70 percent U.S. content requirement content of 23 U.S.C.

322 will be carried out.

(3) Partnership Potential. The project shall exhibit Partnership

Potential by satisfying the following:

(i) A private/public partnership must be in place that is ready,

willing, and able to finance, construct, operate, and maintain the

project;

(ii) The private/public partnership either owns the version of

Maglev technology proposed to be implemented in the project, or has an

agreement with the owner which affords full cooperation to the

partnership in progressing the project, including implementation of the

technology acquisition/transfer plan if applicable; and

(iii) The recipient of a preconstruction planning grant or the FRA

has developed and endorsed a projection of system capital costs,

demand, revenues, operating expenses, and total costs and benefits,

that:

(A) Covers either the entire corridor in which the Maglev project

is involved (``Corridor''), or the project considered independently;

[[Page 54609]]

(B) Demonstrates that private enterprise would be able to run the

Corridor or the project--once built and paid for--as a completely self-

sustaining entity, in which revenues will cover operating expenses and

continuing investment needs; and

(4) Funding Limits and Sources. The project description shall

include a financing plan that demonstrates project completion with the

$950 million in Federal Maglev Funds, funds remaining unobligated from

the $55 million in contract authority, and the funds made available

under STP and CMAQ. The project that is selected will be eligible for

other forms of financial assistance provided under title 23 and TEA 21,

including loans, loan guarantees, and lines of credit. However, at

least \1/3\ of Full Project Costs must come from non-Federal Funds.

(5) Project Management. The State, the technology owner, and all

other relevant project partners must include in the project

description, an agreed upon--

(i) Management plan that defines the partnership, responsibilities,

and procedures for accomplishing the project;

(ii) Project schedule that shows how timely implementation of the

project will be accomplished, including, to the extent possible, a

construction plan and schedule; and

(iii) Financial plan that shows how funds will flow, in accordance

with the other requirements of this subsection.

(6) Planning/Environmental Process. (i) Assessment of environmental

consequences of the proposed project. Recipients of preconstruction

planning grants shall conduct an EA in support of the project

description; and will prepare a site-specific EIS for the project. The

EA shall include information to support the grantee's decision to

pursue the proposed project. The grantee shall develop the information

and discuss the environmental consequences of the proposed technology

and route in sufficient detail for the preparation of appropriate

documentation by FRA to support selection of one project. This shall

include: the identification of potential positive and negative

environmental effects resulting from the technology (e.g. energy

consumption compared to other transportation options); generic noise

emissions at various distances from the centerline of the guideway;

changes in electromagnetic field levels at various distances from the

centerline of the guideway; and environmental screening of the proposed