Notice2024-22163
Rural Areas Formula Grant Programs Guidance, Final Circular
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 27, 2024
Issuing agencies
Transportation DepartmentFederal Transit Administration
Abstract
The Federal Transit Administration (FTA) has finalized an updated circular, to assist recipients in their implementation of the Rural Areas Formula Program and the rural component of the Grants for Buses and Bus Facilities Program. The update and consolidation of the circulars incorporates provisions from the Fixing America's Surface Transportation (FAST) Act; the Infrastructure Investment and Jobs Act (IIJA), also known as the Bipartisan Infrastructure Law (BIL); the Uniform Administrative Requirements for Federal awards to non-Federal entities; and current FTA policies and procedures. This notice responds to the comments FTA received on the proposed circular, which was published in the Federal Register on April 4, 2024.
Full Text
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[Federal Register Volume 89, Number 188 (Friday, September 27, 2024)]
[Notices]
[Pages 79345-79350]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-22163]
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DEPARTMENT OF TRANSPORTATION
Federal Transit Administration
[Docket No. FTA-2024-0004]
Rural Areas Formula Grant Programs Guidance, Final Circular
AGENCY: Federal Transit Administration (FTA), Department of
Transportation (DOT).
ACTION: Notice of availability of final circular and response to
comments.
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SUMMARY: The Federal Transit Administration (FTA) has finalized an
updated circular, to assist recipients in their implementation of the
Rural Areas Formula Program and the rural component of the Grants for
Buses and Bus Facilities Program. The update and consolidation of the
circulars incorporates provisions from the Fixing America's Surface
Transportation (FAST) Act; the Infrastructure Investment and Jobs Act
(IIJA), also known as the Bipartisan Infrastructure Law (BIL); the
Uniform Administrative Requirements for Federal awards to non-Federal
entities; and current FTA policies and procedures. This notice responds
to the comments FTA received on the proposed circular, which was
published in the Federal Register on April 4, 2024.
DATES: The applicable date of this circular is November 1, 2024.
ADDRESSES: One may view the comments at docket number FTA-2024-0004.
For access to the docket, please visit <a href="https://www.regulations.gov">https://www.regulations.gov</a> or
the Docket Operations office located in the West Building of the United
States Department of Transportation, Room W12-140, 1200 New Jersey
Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m. Monday
through Friday.
FOR FURTHER INFORMATION CONTACT: For Rural Formula program questions,
Matt Lange, Office of Transit Programs, Federal Transit Administration,
US DOT Volpe Center, 220 Binney Street, Room-940, Cambridge, MA 02142,
phone: (617) 494-6308, or email, <a href="/cdn-cgi/l/email-protection#a7cac6d3d3cfc2d089cbc6c9c0c2e7c3c8d389c0c8d1"><span class="__cf_email__" data-cfemail="d9b4b8adadb1bcaef7b5b8b7bebc99bdb6adf7beb6af">[email protected]</span></a>. For Bus and Bus
Facilities program questions, Kirsten Wiard-Bauer, Office of Transit
Programs, Federal Transit Administration, 1200 New Jersey Ave. SE,
Washington, DC 20590, phone: (202) 366-7052, or email, <a href="/cdn-cgi/l/email-protection#3d76544f4e4958536a545c4f59107f5c48584f7d595249135a524b"><span class="__cf_email__" data-cfemail="3d76544f4e4958536a545c4f59107f5c48584f7d595249135a524b">[email protected]</span></a>. For Tribal Transit Program questions, Elan Flippin,
Office of Transit Programs, phone: (202) 366-3800, or email,
<a href="/cdn-cgi/l/email-protection#57323b363979313b3e27273e391733382379303821"><span class="__cf_email__" data-cfemail="0d68616c63236b61647d7d64634d696279236a627b">[email protected]</span></a>. For legal questions, Bonnie Graves, Office of
Chief Counsel, phone: (202) 366-0944, or email, <a href="/cdn-cgi/l/email-protection#9ad8f5f4f4f3ffb4dde8fbecffe9dafef5eeb4fdf5ec"><span class="__cf_email__" data-cfemail="66240908080f03482114071003152602091248010910">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Overview
II. Responses to Public Comments
A. Disposition of Comments for Which No Changes Were Made
B. Changes Made as a Result of Public Comments
C. 2 CFR Part 200 Updates
I. Overview
The Federal Transit Administration's (FTA) final circular, ``Rural
Areas Formula Grant Programs Guidance,'' C 9040.1H, is a consolidation
of guidance for Rural Areas Formula Grants Program under 49 U.S.C. 5311
(Circular 9040.1) and the rural area component of the Grants for Buses
and Bus Facilities Program under 49 U.S.C. 5339(a) (Circular 5100.1).
Additionally, this updated circular incorporates provisions of the FAST
Act (Pub. L. 114-94), the Infrastructure Investment and Jobs Act (IIJA)
(Pub. L. 117-58), and other changes in law, and includes program-
specific guidance for these formula programs. Additional requirements
for all grant programs are identified in FTA's Award Management
Requirements (Circular 5010.1).
The update to Circular 9040.1 consolidates and summarizes
programmatic information, streamlines pre-existing guidance from the
two program circulars, and reduces duplication of information provided
between the Rural Areas Formula Program circular and FTA's other topic-
specific circulars, including by moving certain text applicable to most
or all FTA grant programs to Circular 5010.1. Furthermore, the circular
incorporates statutory changes and clarifies policies as applied by
FTA. Statutory changes for Section 5311 include additional sources of
local share; in-kind match for intercity bus service; and fund
allocations for tribes. Statutory changes for Section 5339(a) include
the application of Section 5311 requirements to Section 5339 grants in
rural areas; additional source for local share; additional eligible
entities; and use of procurement tools authorized under Section 3019 of
the FAST Act. Policy clarifications address topics in the existing
program circulars, including consolidation of grants to
[[Page 79346]]
insular areas; eligible projects and activities for each program;
operating assistance limitations and exceptions; capital cost of
contracting; the role of transportation network companies in providing
public transportation services; and period of availability to obligate
funds flexed to FTA formula programs from the Federal Highway
Administration (FHWA).
In addition to statutory and policy updates, the Office of
Management and Budget (OMB) issued 2 CFR part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards, also known as the Uniform Guidance, in December,
2013, which superseded the Common Grant Rule, formerly codified at 49
CFR parts 18 and 19. Due to the timing of the last circular update and
the effective date of the Uniform Guidance, FTA Circular 9040.1G
continued to reference 49 CFR parts 18 and 19. FTA has updated these
references, including definitions, in Circular 9040.1H. Further, on
April 22, 2024, OMB issued a final rule updating 2 CFR part 200 (89 FR
30046). Two of those updates resulted in changes to the draft C.
9040.1H, and those changes are discussed in this notice.
This notice provides a summary of comments received and FTA's
response to those comments.
II. Response to Public Comments
FTA published a notice for comment on this circular in the Federal
Register on April 4, 2024 (89 FR 23618), describing the consolidation
and updates and seeking public comment on the proposed circular. FTA
received eighty-three (83) comments from sixteen (16) unique
commenters. FTA reviewed the comments and addresses below the
categories of comments for which no changes to the proposed circular
were made, as well as the changes FTA made in the final circular in
response to public comments.
A. Categories of Comments for Which No Changes Were Made
Comment: Three commenters requested an extension of the sixty (60)
day review period.
FTA Response: FTA determined, based on the agency's preexisting
decision-making schedule; two other draft circulars published for
public comment prior to proposed C. 9040.1H which included similar
information; and the updates and consolidations to the existing
circulars include limited statutory changes resulting from FAST Act and
BIL, regulatory updates to 2 CFR part 200, and policy clarifications;
that an extension was not warranted. FTA considered all comments
received.
Comment: Several commenters requested increasing the period of time
during which governors can, without local consultation, transfer funds
between the Section 5307 and 5311 programs from ninety (90) days to one
(1) year.
FTA Response: The ninety (90) day period for transferring state
apportionments of formula grants without local consultation is set
statutorily under 49 U.S.C. 5336(f) and FTA does not have the authority
to increase the time period for these transfers.
Comment: One commenter requested a change to allow direct
recipients of FTA Section 5307 funds to serve as direct recipients of
Section 5311 funds.
FTA Response: Under 49 U.S.C. 5311(a)(1) the only eligible
recipients of formula funds for rural areas are States and Indian
Tribes. Local government authorities are eligible subrecipients.
Comment: One commenter requested the addition of language
specifying that Section 5311(f) funds may be used to build all parts of
an urbanized area intercity bus terminal serving both rural and urban
passengers regardless of the proportion of such service that would
benefit rural users.
FTA Response: Rural transit program funds are intended to primarily
benefit rural transit users; while urban users may also benefit from
services funded by the rural transit programs, they should not be the
primary beneficiaries. The use of rural transit program funds should be
proportional to the benefits realized by rural users.
Comment: One commenter requested an increase to the Federal share
of operating expenses for Section 5311 funds.
FTA Response: FTA does not have the authority to change the Federal
share as it is set by statute--49 U.S.C. 5311(g)(2) provides the
Federal share shall not exceed 50 percent of the net operating cost of
the project.
Comment: One commenter requested the relaxation of, or provision of
waivers for, the Buy America requirements in situations where the costs
were onerous.
FTA Response: No changes to Buy America are possible as this is a
statutory requirement. FTA encourages interested stakeholders to review
49 U.S.C. 5323(j) for a list of waivers permitted by statute, one of
which is when including domestic material will increase the cost of the
overall project by more than 25 percent. FTA's Buy America rule at 49
CFR part 661 describes how to request a waiver. Additionally, Buy
America requirements are discussed in depth in Circular 5010.1.
Comment: One commenter requested that up to ten percent (10%) of
transferred flexible funds from FHWA may be used for State
administration.
FTA Response: Flexed funds are only eligible for State
administration to the extent that FHWA permits. Recipients should
contact their FTA Regional Office for information on eligible
activities when accepting transferred FHWA funds.
Comment: One commenter requested a ``more streamlined process that
all States must adhere to'' related to State oversight of intercity bus
service.
FTA Response: The guidance provided in this circular is
intentionally broad to address a variety of circumstances, geographies,
and types of recipients and subrecipients while allowing maximum
flexibility to the States in administering Federal grants programs. Due
to this dynamic and the reality that the provided guidance is based on
existing statutes, policies, and regulations, FTA cannot provide a
single process for all recipients; nor can FTA streamline the process
by removing or waiving any requirements.
Comment: Two commenters requested formatting changes related to
page numbering and removal of blank pages.
FTA Response: FTA appreciates these comments; however, the layout
of the circular is deliberate and intended to make printed versions
readable.
Comment: One commenter recommended that references to circulars and
other documents be as broad as possible to make them easier to update,
which FTA interpreted to mean that, for example, the Rural Areas
circular would be referred to as ``C 9040.1'' and not as ``C 9040.1H''
and statutory provisions would be referred to as ``49 U.S.C. 5311''
instead of ``49 U.S.C. 5311(b).''
FTA Response: Where appropriate, FTA already endeavors to make
references in the broad fashion suggested here. In addition, FTA is
able to update guidance documents with statutory or regulatory citation
changes without undergoing further notice and comment.
Comment: One commenter requested that links be provided wherever
possible throughout the document.
FTA Response: FTA has included links where appropriate and when the
corresponding web address can be expected, with relative certainty, to
remain the same into the future.
Comment: One commenter requested the inclusion of ``contract'' and
``contractor'' in the definitions list.
[[Page 79347]]
FTA Response: The terms ``third-party contract'' and ``third-party
contractor'' are defined in Circular 5010.1 and FTA declines to include
definitions of these terms in this circular.
Comment: One commenter requested that the term ``urban areas'' in
the definition of ``intercity bus'' be more thoroughly defined or
explained.
FTA Response: FTA includes the statutory definition of urbanized
areas in the definitions section: ``Urbanized Area (UZA). An area
encompassing a population of not less than 50,000 people that has been
defined and designated in the most recent decennial census as an `urban
area' by the Secretary of Commerce (49 U.S.C. 5302).'' FTA notes the
Census now defines some areas with populations of less than 50,000 as
``urban,'' however, for purposes of FTA's programs, areas with a
population of less than 50,000 are defined as rural. For consistency we
have changed ``urban area'' to ``urbanized area'' in the definition of
intercity bus.
Comment: One commenter requested that the threshold at which
recipients must revise their Program of Projects (POP) change, from a
20% increase in total funds reflected on the POP to a 25% increase in
total funds reflected on the POP, in order to coincide with the
commenter's practices.
FTA Response: The threshold is set at 20% as a matter of policy and
FTA declines to make this change.
Comment: One commenter requested that FTA remove the requirement to
submit an annual POP Status Report. Another commenter requested that
FTA add language stating that if the most recent POP in TrAMS is
current, the annual POP Status Report may reference the date of the
current POP in lieu of uploading a POP.
FTA Response: FTA considers the POP Status Report necessary to
ensure the POPs are tracked at least annually. Annual reports for the
POP provide the opportunity for comprehensive updates based on the
progress of the award, in a holistic way than an individual FFR or MPR.
Comment: Several commenters expressed concern regarding the
requirement that a Section 5311(f), intercity bus Governor's
Certification Letter be sent to the FTA Regional Administrator and not
the FTA Administrator. Commenters asserted this was a change in policy
reducing the level of oversight from FTA's Administrator to a Regional
Administrator.
FTA Response: The Governor's Certification Letter has always been
sent to the Regional Administrators for approval. The additional
language simply makes this review process more apparent to
stakeholders.
Comment: One commenter asked FTA to remove any references to
procedure when discussing State oversight in the context of the State
Management Plan (SMP).
FTA Response: States are required to perform oversight activities
in order to properly manage the Federal programs they are responsible
for, and FTA is required to monitor how States manage these programs to
ensure this oversight is taking place. As a result, discussions of
State program management and State monitoring are necessary to ensure
compliance with all relevant statutory and regulatory requirements.
Comment: One commenter requested new requirements be added to the
State Management Plan (SMP), including a requirement that States
address what their policies are toward ``high-risk'' subrecipients.
FTA Response: The guidance is written to provide maximum
flexibility to the States. Monitoring is already addressed via the SMP,
and a State is not prohibited from increased monitoring of any
subrecipient they deem to be high-risk. As the recipient, it is up to
the State to determine the best approach to ensure subrecipient
compliance. FTA declines to add this proposed requirement to the
circular.
Comment: One commenter requested additional language further
emphasizing that intercity city bus services that cross state
boundaries are eligible for Section 5311 funding.
FTA Response: The request for eligibility emphasis is not needed
given the enabling language already present in the circular. Section
5311 eligibility language included under ``General Program Information,
Chapter III 1.c., states that for Section 5311 projects, ``The service
area may include destinations across a State line.'' This applies to
intercity bus service as well as Section 5311 public transit service.
Further, the intercity bus language in Chapter IX provides, ``FTA
encourages the State to look at the intercity bus transportation needs
of the entire State and to work with neighboring States to adopt a
program that will support a network of intrastate services and provide
connections with a national network of interstate service.'' It is
reasonable to expect service may need to cross State lines in order to
provide access to neighboring State service as well as the national
network of intercity bus service.
Comment: Several commenters asked FTA to provide additional
examples, or lists of examples, to further illustrate requirements and
processes. For example, one commenter requested a complete list of
other public transportation-related Federal programs that may provide
support for Section 5311 and Section 5339 projects. One commenter
requested that FTA clarify whether rural transit activities for RTAP
assistance include Section 5310-funded activities in rural areas.
FTA Response: FTA declines to provide additional non-exhaustive
lists of examples as the elements could vary from case to case and
programs change over time such that a list could become out of date.
For those seeking information on other Federal programs that provide
funding for transportation, FTA invites interested stakeholders to
review FTA's web page on the Coordinating Council on Access and
Mobility and view the ``CCAM Program Inventory,'' located at <a href="https://www.transit.dot.gov/coordinating-council-access-and-mobility">https://www.transit.dot.gov/coordinating-council-access-and-mobility</a>. Finally,
RTAP funds may be used to support Section 5310 projects in rural areas.
Comment: One commenter requested the addition of language to the
definition of ``Joint Development Activities,'' emphasizing the role of
intermodal transportation centers as hubs for intercity bus facilities.
FTA Response: FTA has included only a streamlined definition of
joint development and referred readers to FTA's Joint Development
Circular 7050.1C. FTA notes that intercity bus is specifically included
as an eligible joint development project on page IV-9 of circular.
Thus, additional language about its eligibility is not needed.
Comment: One commenter noted that there are instances in the
circular where projects are listed as eligible public transit projects
when those projects are also eligible intercity bus projects. The
commenter requested that FTA add ``intercity bus'' where such projects
are also eligible.
FTA Response: FTA generally declines to accept this suggestion, as
in some cases, intercity bus projects are not eligible for Section 5311
funds except for the Section 5311(f) set-aside. Under the statute,
eligible activities are ``public transportation capital projects; and
operating costs of equipment and facilities for use in public
transportation;'' 49 U.S.C. 5311(b)(1). Given intercity bus is not
considered public transportation under 49 U.S.C. 5302, intercity bus
projects are not eligible except where they are considered ``capital
projects'' under 49 U.S.C. 5302, including joint development projects
that include intercity bus, and intermodal facilities. This discussion
is included in Chapter
[[Page 79348]]
IX. As discussed below, FTA has added ``intercity bus'' to flex fund
discussions, as intercity bus projects are eligible for some funds
transferred to FTA from FHWA. FTA encourages intercity bus operators to
work with the States and FTA Regional Offices if there are questions
about eligible activities.
As stated in the Federal Register notice accompanying the proposed
circular, FTA proposed moving cross-cutting requirements and guidance
to Circular 5010.1, as an effort to streamline the program circulars.
Three commenters asked FTA to retain some of that information in the
updated C 9040.1.
Comment: Two commenters requested additional guidance on minimum
useful life of vehicles and other capital assets, to include either
examples or links to lists.
FTA Response: As this information is cross-cutting, it is included
in the C 5010.1 Award Management Requirements Circular, to which the C
9040.1H refers users. Therefore, the inclusion of that same information
here would be redundant.
Comment: One commenter requested additional information about the
use of Transportation Development Credits (TDCs) for local match.
FTA Response: As this information is cross-cutting, it is included
in the C 5010.1 Award Management Requirements Circular, to which the C
9040.1H refers users. Therefore, the inclusion of that same information
here would be redundant.
Comment: Several commenters requested changes that are outside the
purview of the circular update process. For example, two commenters
requested changes to the ALI system in TrAMS. One commenter requested a
consolidation of certain ALI codes within the existing ALI tree.
Another requested that language be added stating that mobility
management activities are eligible as administrative expenses in the
ALI codes.
FTA Response: FTA is updating the ALI tree, but this is not related
to the process of updating the circulars. However, the comments related
to ALI trees and ALI codes have been shared with staff involved with
that update. Mobility management is an eligible capital expense, not an
administrative expense.
Comments: Several comments were of a general nature, such as those
expressing support of rural transit funding or concern for potential
impacts of requirements on small rural providers.
FTA Response: FTA appreciates these statements and, while no action
or change was requested, the comments have been read, recorded, and
discussed.
Comment: One commenter noted that questions arose on whether FTA
would use 'smoothed' UZA boundaries that have been adjusted from the
raw 2020 UZA boundaries for FHWA roadway classification purposes to
determine eligibility of UZA vs. rural FTA formula program funds. The
commenter requested that FTA include guidance on this topic in the
circular that has been provided through other FTA resources.
FTA Response: Post-delineation UZA smoothing adjustments made for
FHWA roadway classification purposes do not have the effect of changing
the geographic coverage of UZAs or any other UZA characteristics for
any aspects of FTA program administration. Because such adjustments are
administered by another Federal agency for purposes that are irrelevant
to FTA programs, FTA does not feel it is necessary to include related
guidance in the circular.
Comment: One commenter requested that language be added to say that
intercity bus and related facilities are eligible under Section
5339(a).
FTA Response: FTA disagrees--per Section 5339, eligible recipients
are designated recipients that allocate funds to fixed route bus
operators or State or local governmental entities that operate fixed
route bus service. Section 5339 further specifies that eligible
subrecipients must be public agencies or private nonprofit
organizations engaged in public transportation. Intercity bus projects
are eligible under Section 5311(f).
Comment: One commenter requested more specific program/project
management oversight activities required for States that award FTA
Section 5311(f) funding to private intercity bus providers and the
applicable requirements for private intercity bus service providers.
FTA Response: The requested information is provided in various
places throughout Chapter IX. State certification requirements and
procedures are discussed on page IX-1. The Intercity Bus Consultation
Requirement is discussed on page V-3 and the consultation requirements
are discussed in Section 4 of Chapter IX. Documentation requirements
are discussed on page IX-5; the State's role in reviewing and
processing applications is discussed on page IX-6. Transportation
Improvement Plan (TIP) and State Transportation Improvement Plan (STIP)
inclusion requirements are discussed on page IX, State POP. Budgeting,
labor protection, and enforcement of compliance are discussed in
Section 13.
Comment: One commenter requested that FTA ``explicitly identify the
cognizant agency for providers who receive Section 5307 and 5311
funding.''
FTA Response: The cognizant agency as it would apply to an indirect
cost rate is determined by the largest amount of funding a recipient
receives from a Federal agency. FTA encourages recipients with
questions about cognizant agencies for indirect costs to contact their
FTA Regional Office.
Comment: One commenter questioned the need to discuss Title VI
civil rights requirements in both the State Management Plan (SMP) and
the Title VI Plan.
FTA Response: This is a necessary element of the required state
management review. Information is frequently required in multiple
reports as the reports serve different functions and have different
audiences. The information provided in the SMP may be identical to that
in the Title VI Plan, so this requirement is not difficult to meet.
This also ensures civil rights considerations are included at all
stages of FTA-funded projects.
FTA received several comments requesting FTA provide outreach on
circular changes, as well as requests for more targeted technical
assistance. FTA will provide external training on changes made to this
and the other circulars that FTA is revising and will go into effect at
the same time (C 9040.1H, C 9070.1H, C 5010.1F) soon after publication
of the final circulars.
Comment: One commenter offered an alternative example for
calculating the allowable in-kind match cost of the private operator as
they felt the provided example was confusing.
FTA Response: FTA declines to replace the existing example with the
one provided by the commenter and will further providing training to
assist with any confusion on the topic.
B. Changes to the Final Circular as a Result of Public Comments
A portion of the comments that FTA received were requests for
clarification or more specificity on various requirements. FTA revised
language in the circular to address these comments, as explained below.
Use of the terms ``grant'' and ``award.'' FTA ensured that the
terms ``award'' and ``grant'' are used in a consistent and
understandable way throughout the document.
Incidental Use. In Chapter I, FTA updated the definition for Shared
Use to match the definition in Circular 5010.1
[[Page 79349]]
and other program circulars to better differentiate between ``shared
use'' and ``incidental use.'' In addition, in the discussion of
incidental use in Chapter III, FTA included a sentence directing
readers to Circular 5010.1 for additional information. FTA amended the
section on incidental use to clarify that FTA-funded public
transportation service should be coordinated with other rural
transportation services, including intercity bus service. The purpose
of a public transit bus stop or station may be for public
transportation and an intercity operator using the stop or station a
few times a day would be incidental to the public transportation
purpose. Consistent with 49 U.S.C. 5323(r), FTA expects recipients to
grant reasonable access to such stops or stations to intercity bus
operators. An intercity bus operator using a stop or station that is
part of a joint development or other intermodal project would not be
incidental, as such use would meet the purpose of the project.
Program of Projects (POP). In Chapter I, FTA removed the word
``annual'' from the definition of Program of Projects (POP) and in
Chapter II removed ``annually'' from the POP reporting procedures; the
POP is not required to be submitted every year if a State is not
receiving an award in a given year. It must be submitted for any year
in which the State requests FTA funds.
The Role of the State Agency. In Chapter II, FTA added ``Ensure an
accurate and complete list of projects are included in the Statewide
Transportation Improvement Program (STIP)'' to the list of roles of a
State agency in administering the Section 5311 and 5339 programs.
Conducting State Management Reviews (SMRs). In Chapter II, FTA
added language that FTA conducts SMRs in accordance with the most
recent Comprehensive Oversight Review and Technical Assistance Program
(CORTAP) Manual. FTA also added language to make it clear that FTA may
perform SMRs in addition to, or in lieu of, Triennial Reviews where
appropriate.
Transfer of FHWA Flexible Funds. In Chapter III, FTA added language
stating a State may transfer certain funds from FHWA to FTA to use for
transportation planning or intercity bus projects (in addition to
transit projects, which were already noted as eligible).
Eligibility of Regional Development Organizations (RDOs) as Section
5311 Subrecipients. In Chapter III, FTA added language that regional
development organizations (RDOs) may be eligible subrecipients as local
governmental authorities.
Intercity bus terminals in urban areas using Section 5311(f) funds.
Intercity bus terminals or the intercity bus portions of intermodal
terminals in urbanized areas that serve both rural and non-rural
passengers may be built with Section 5311(f) funds. The Section 5311
program is primarily intended to benefit rural transportation needs.
While Section 5311(f) funds can sometimes be applied to projects and
services that collocate in urbanized areas, the funds must be used in
proportion to the benefit to rural transportation needs. FTA does not
specify the exact methodology to be used, to allow flexibility to the
States and designated recipients in urbanized areas. A reasonable
method must be used to ensure the funds are spent proportionally to the
benefits to rural transportation needs. FTA has added language on page
III-9 to clarify this policy.
Employee Training Expenses. In Chapter IV, FTA added language
clarifying the 0.5% cap on FTA funds used for employee training
expenses applies only to Section 5339 funding, as employee training
expenses are eligible under Section 5311.
Eligibility of oil as a preventive maintenance expense. In Chapter
IV and Chapter XI, FTA removed ``oil'' from the list of operating
expenses eligible under Section 5311; oil is an eligible preventive
maintenance expense. Please note operating and preventative maintenance
are not eligible under Section 5339.
Eligibility of 5339(a) funded projects that do not support fixed
route only. FTA added language in Chapter IV clarifying that Section
5339(a) funds are not limited to projects that only support fixed
route. This language addressed a commenter's concern about the
statement, ``Eligible recipients for Section 5339 funds include
designated recipients that allocate funds to fixed route bus operators,
and States and local governmental authorities that operate fixed route
service.'' While the statute provides funds are allocated only to fixed
route operators, the funds may be used to support demand-response
vehicles and facilities.
ADA Complementary Paratransit. In Chapter IV, FTA added language
and made changes to existing language to clarify the requirements for
using formula funds at an 80 percent Federal share for ADA
complementary paratransit: the percentage caps are applied at the
State, not the subrecipient level, and there are additional
requirements for applying the higher twenty percent (20%) cap of the
apportionment. Additionally, FTA corrected the spelling of
``complimentary'' to ``complementary.''
Metropolitan, Statewide, and Non-Metropolitan Planning
Requirements. In Chapter V, FTA added language regarding projects
receiving rural funding and located within Metropolitan Planning Area
(MPA) boundaries but not within a UZA boundary to state that they may
or may not need to be included in the Metropolitan Transportation Plan
and TIP for the respective MPO. Also in Chapter V, FTA added language
specifying that rural areas outside MPAs (and therefore not included in
a metropolitan STIP) may receive FHWA flex funds.
Recordkeeping Requirements. In Chapter VI, FTA added language that
States are not required to keep all supporting documentation received
from subrecipients on file, but this documentation must be maintained
by each subrecipient.
State Management Plans (SMPs). In Chapter VII, FTA added a
reference to the planning statute at 49 U.S.C. 5304 to differentiate
between the SMP and the long-range statewide transportation plan. FTA
also added language to Chapter VII stating that the SMP must be
approved by and filed with the FTA Regional Office. FTA added language
which reflects statutory amendments to 49 U.S.C. 5304 resulting from
the FAST Act, which require States to describe their processes for
developing and integrating intermodal facilities that support intercity
transportation, including intercity buses and intercity bus facilities,
and for consideration of the role that intercity buses may play in
reducing congestion, pollution, and energy consumption in a cost-
effective manner and strategies and investments that preserve and
enhance intercity bus systems, including systems that are privately
owned and operated.
Reasonable Access to Federally Funded Transportation Facilities for
Intercity Bus Providers. In Chapter IX, FTA added language specifying
that recipients of FTA funds may not deny reasonable access for a
private intercity or charter transportation operator to federally
funded public transportation facilities. FTA also provided guidance for
determining when access is reasonable.
Meaningful Connections to the Intercity Bus Network. In Chapter IX,
FTA added examples of factors that determine whether connections
between services funded by Section 5311(f) and the intercity bus
network are ``meaningful.'' However, we declined to add the word
``scheduled'' as requested by a commenter, as the word is already
[[Page 79350]]
included in the discussion of meaningful connections.
Eligibility of New Intercity Bus Facilities. In Chapter IX, FTA
specified that constructing new intercity terminal facilities for rural
passengers is an eligible activity under Section 5311(f), in addition
to improvements for existing facilities.
Eligible Subrecipients of Section 5311 funds. FTA amended language
in Chapter IX regarding when an intercity bus operator elects to be a
contractor or a subrecipient. A ``contract'' is a legal instrument by
which a recipient or subrecipient purchases property or services needed
to carry out its project or program under a Federal award. In contrast,
a ``subaward'' is an award provided by a pass-through entity to a
subrecipient for the subrecipient to carry out part of a Federal award
received by the pass-through entity. The requirements for each are
similar but the terms and conditions, including oversight and
enforcement, may be different.
ADA Regulations for Intercity Bus Service Operated by Private
Entities Using Over-the-Road Buses (OTRBs). In Chapter IX, FTA added
language clarifying that vehicles used by intercity bus services
provided by a public entity or under contract or other arrangement or
relationship to a public entity must be compliant with both 49 CFR
38.23 and subpart G of 49 CFR part 38, as well as 49 CFR part 37.
Update to the Capitalization Threshold for Equipment. FTA received
several comments inquiring about the $5,000 capitalization threshold
for equipment, with some commenters requesting the threshold be raised.
In its recent final rule, codified at 2 CFR 200.1, OMB increased the
threshold for the definition of equipment to $10,000, and FTA has made
this change in the final circular.
State Planning Requirement for Intercity Bus. FTA received three
comments from one commenter requesting language reflecting new State
planning requirements as updated in FAST Act. FTA added a section to
Chapter IX, Intercity Bus, emphasizing that transportation plans and
transportation improvement programs must provide for intermodal
facilities that support intercity transportation, including intercity
buses and intercity bus facilities. Chapter V, Planning & Program
Development, subsection 2 (``Metropolitan, Statewide, and Non-
Metropolitan Planning'') already specifies that States requesting
Section 5311 or Section 5339(a) assistance must comply with the
planning requirements of 49 U.S.C. 5303, 5304 and 5306.
Tribal Transit Matching Funds. Consistent with a recent Tribal
consultation (89 FR 48593, June 10, 2024), no local match is required
for the Tribal Transit Competitive Program. FTA has updated Chapter XI
to reflect this change.
C. 2 CFR Part 200 Updates
As stated above, OMB's 2024 update to 2 CFR part 200 increased the
threshold, from $5,000 to $10,000, for the value of equipment, which
impacts how a recipient may retain, sell, or dispose of the equipment
at closeout. Items under $10,000 are considered supplies. In addition,
the threshold for expenditures at which recipients of Federal awards
are required to have independent audits conducted annually increased
from $750,000 to $1,000,000. FTA has updated the final circular to
reflect these changes.
Veronica Vanterpool,
Deputy Administrator.
[FR Doc. 2024-22163 Filed 9-26-24; 8:45 am]
BILLING CODE 4910-57-P
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