Implementation of the Federal Mass Transportation Act of 1987

Printer Friendly Number 52 FR 15440

Urban Mass Transportation Administration
AGENCY: Urban Mass Transportation Administration, DOT.
52 FR 15440
April 28, 1987

Implementation of the Federal Mass Transportation Act of 1987

ACTION: Notice.

SUMMARY: The Federal Mass Transportation Act of 1987 (the Act), Title III of the Surface Transportation and Uniform Relocation Assistance Act of 1987 (Pub. L. 100-17), effective April 2, 1987, makes a number of significant changes to the programs of the Urban Mass Transportation Administration (UMTA). This notice describes generally some of the principal changes that the new legislation makes that are applicable to a number of grantees. UMTA Circulars providing application instructions are being updated to reflect the changes, and a number of regulations will have to be issued or revised to comply with the law. Unless otherwise specified, each of the changes applies to funds obligated by UMTA after enactment of the Act.

FOR FURTHER INFORMATION CONTACT: Brian J. Cudahy, Office of Grants Management, (202) 366-1662, for information on general grant application issues, or the appropriate Regional Administrator; Kenneth W. Butler, Office of Budget and Policy, (202) 366-4050, for general policy matters; or Daniel Duff, Office of Chief Counsel, (202) 366-4063, for information on legal issues. Except for Regional Administrators, all are located at 400 Seventh Street, SW., Washington, DC 20590.

TEXT: SUPPLEMENTARY INFORMATION: Changes to the section 3 program. The Act provides contract authority for the Mass Transit Account of the Highway Trust Fund for fiscal years 1987 through 1991. The amount for fiscal year 1987 is $1.097 billion; however, the fiscal year 1987 DOT appropriation act provides an obligation limitation of $1.0025 billion, which is the amount UMTA is authorized to obligate from the Mass Transit Account authorization for fiscal year 1987. Completed applications for these fiscal year 1987 section 3 funds should be submitted to UMTA Regional offices by June 1, 1987.

Of the amounts from the Mass Transit Account available for section 3 funding, the Act allocates funding on a percentage basis: 40 percent for new starts; 40 percent for rail modernization; 10 percent for bus activities; and 10 percent to be allocated at the Secretary's discretion.

Under the Act, no new start project may be funded under section 3 unless the Secretary determines that the project is based on alternatives analysis, is cost-effective, and is supported by an acceptable degree of local financial commitment. UMTA is developing a regulation to implement this provision. Any project for which a letter of intent or full funding contract was issued before enactment of the Act, or any project in the preliminary engineering, final design, or construction stage as of January 1, 1987, is not subject to these new start criteria.

Finally, advance construction authority, discussed below, is available under section 3.

Distribution of Mass Transit Account funds over $1 billion. Beginning in fiscal year 1988, in any year in which an obligation limitation for the Transit Account exceeds $1 billion, and after necessary drawdowns for the section 4(i), 8 and 16(b) and other programs funded from the Transit Account, the funds in excess of $1 billion are to be allocated half on a discretionary basis and half under a new section 9B formula program -- essentially a capital-only section 9 program. The discretionary amounts must be allocated in accordance with the section 3 percentage allocations discussed above.

Changes to the section 8 program. The Act amends this section to provide that the local planning process must include an analysis and development of long-term financial plans for regional transit improvements and the revenue available from current and potential sources to implement such improvements. UMTA issued a Circular on financial capacity on March 30, 1987, that addresses a number of financial planning issues.

Changes to the section 9 program. The Act makes a number of changes to this program, but the distribution formula and the basic structure of the program remain unchanged. The section 9 Circular is being updated to describe these program changes in detail. In accordance with the FY 1987 DOT appropriation act, UMTA published the FY 1987 section 9 formula apportionments in the Federal Register on December 10, 1986 (51 FR 44546).

Under the Act, a number of expenses that have been eligible as operating costs under section 9 may now be eligible for capital funding. These include the leasing of certain facilities and equipment if it can be demonstrated that leasing is more cost-effective than the acquisition of such items; UMTA will be developing a regulation to implement this provision. Also capitalized under the Act are bus remanufacturing projects which extend the economic life of a bus eight years or more, as well as any overhaul of rail rolling stock. The associated capital maintenance item threshold has been lowered from its current one percent to one-half of one percent, and includes tires, tubes, and materials.

The Federal share for section 9 capital projects "shall be" eighty percent, but a recipient at its discretion may provide overmatch.

The Act has a provision regarding the disposition of advertising revenues a grantee earns in excess of those earned in fiscal year 1985.

The operating assistance limitation for urbanized areas of less than 200,000 in population has been changed by the Act. For urbanized areas that became such as a result of the 1980 Census or later, the limitation is two-thirds of their first fiscal year section 9 apportionment, which will be fiscal year 1984 for all areas except Merced, California, which was recently designated an urbanized area. These new limitations are being published elsewhere in the Federal Register today. The operating assistance cap for other urbanized areas of less than 200,000 in population shall be increased by 32.2 percent on October 1, 1987. On each October 1 thereafter the operating assistance limitation for all small UZAs shall be increased to reflect the increase in the latest available CPI.

The limitation on the Governor's ability to transfer apportionments to areas larger than 300,000 in population has been deleted.

Advance construction authority. Under section 9, a recipient that has used all of its capital apportionment in a fiscal year may seek approval from UMTA to spend its local funds and be reimbursed from future section 9 apportionments. Certain bond interest costs are eligible costs under this provision. A similar provision applies to section 3.

Buy America. The Buy America domestic content requirement for buses, rolling stock and associated equipment will be increased from its existing 50 percent to 55 percent at the end of three years, and to 60 percent at the end of five years, except that any company that has met the existing Buy America requirement would be exempted from these increases for all contracts entered into before April 1, 1992. In addition, the rolling stock price differential waiver is increased from its current 10 percent to 25 percent, and the definition of "components" is specifically to include "subcomponents." UMTA will be revising its Buy America regulation to reflect these changes.

Project management oversight. The Act authorizes UMTA to contract directly for project management oversight in connection with major capital projects, using one-half of one percent of funds available for the major grant programs. In addition, a grantee undertaking a major capital project is to prepare a project management plan. UMTA will be issuing a regulation to implement this provision.

Interstate transfer-transit. The Act authorizes $200 million a year from general revenues for this program.

Section 18/Rural transit assistance program. A new section 18(h) is added to the UMT Act. Beginning in FY 1988, it authorizes some $5 million a year from general revenues for rural transportation assistance and research. In addition, beginning in fiscal year 1988, the section 18 program will receive from general revenues 2.93 percent of the general fund formula program (as it receives under current law) as well as the new section 9B program.

Contracts for engineering and design. Unless a State adopts some other law, a recipient of UMTA funds may not use low bid procurements on any architectural and engineering contracts. It must use quality-based procurements on any such contracts.

Disadvantaged business enterprise program. The Act provides that women are presumptively to be considered eligible under this program. The Department's DBE regulations are being revised accordingly.

Preaward and postdelivery audit of rolling stock purchases. UMTA is required to issue regulations requiring preaward and postdelivery audit of rolling stock purchases to assure compliance with Buy America, Federal motor vehicle safety requirements, and bid specifications.

Bus testing facility. After September 30, 1989, no funds made available under the Act may be obligated for the acquisition of a new bus model unless such model has been tested at a facility to be established in Altoona, Pennsylvania. UMTA will be developing a regulation to implement this provision.

Increased Federal share. The Act provides that the Federal share for projects that provide transit station access, parking and conveyance facilities for bicycles under sections 3, 9 or 18 shall be 90 percent, and that the Federal share for projects that enhance transportation accessibility for elderly and handicapped persons (beyond those projects required by law) shall have a Federal share of 95 percent.

Charter bus restrictions. The Act also revises ICC procedures to provide that publicly-funded operators cannot get interstate charter authority beyond their service area if private operators already provide such service or are willing and able to.

Issued on: April 22, 1987.

Ralph L. Stanley,


This material is reprinted with the permission of LEXIS-NEXIS, a division of Reed Elsevier Inc. No copyright is claimed as to any part of the original work prepared by a government officer or employee as part of that person's official duties.