Nonurbanized Area Formula Program Guidance and Grant Application Instructions
Revised Circular (9040.1E) Re: Nonurbanized Area Formula Program Guidance and Grant Application Instructions
I am pleased to issue Federal Transit Administration (FTA) Circular 9040.1E, a revision of the program guidance and application instructions for the nonurbanized area formula program, Section 5311.
The main purpose of this revision is to reflect provisions of the Transportation Equity Act for the 21st Century (TEA-21). The most important impact of TEA-21 on this program is the significantly higher level of authorized funding for rural transit.The program not only benefits from the overall higher level of funding for transit under TEA-21, but also receives a greater share of total Federal transit formula funding than it did under the Intermodal Surface Transportation Efficiency Act (ISTEA). In this revised program circular, FTA urges states to use the increased funding to expand the coverage of transit in areas that currently have minimal or no service, as well as to improve the quality of rural transit.
Because funding for the Rural Transit Assistance Program (RTAP) also increased, FTA has revised the administrative formula used to allocate RTAP funds to the states. Beginning in Fiscal Year 1999, we have raised the minimum allocation from $50,000 to $65,000 to assist the smaller states in meeting the need for technical assistance to new rural transit operators.
The revised circular also reflects other minor changes. The guidance gives the states more flexibility in how they provide assistance to private intercity bus operators. The application and grant management procedures reflect FTA's progress toward making and managing grants entirely through our electronic system.
FTA looks forward to continuing to work in partnership with the states and with the many public and private providers of the transit services so important to the people who d~pend upon them and to the well-being of our rural and small urban communities.
Chapter I: General Overview
1. PROGRAM SUMMARY. The nonurbanized formula assistance program for public transportation is authorized by 49 U.S.C. § 5311. The Federal Transit Administration (FTA), on behalf of the Secretary of Transportation, apportions the funds appropriated annually to the Governor of each state for public transportation projects in nonurbanized areas. The statutory formula is based solely on the nonurbanized population of the states. Each state prepares an annual program of projects, which must provide for fair and equitable distribution of funds within the states, including Indian reservations, and must provide for maximum feasible coordination with transportation services assisted by other Federal sources.
Program funds may be used for capital, operating, and administrative assistance to state agencies, local public bodies and nonprofit organizations (including Indian tribes and groups), and operators of public transportation services. There is no limitation on operating assistance. The state must use fifteen percent of its annual apportionment to support intercity bus service, unless the Governor certifies that the intercity bus needs of the state are adequately met. The amount which the state may use for state administration and for planning, and technical assistance activities is limited to fifteen percent of the annual apportionment. A separate annual allocation to the state under Section 5311(h), the Rural Transit Assistance Program (RTAP), may be used only for training, technical assistance, research, and related support activities. The maximum Federal share for capital and project administration is 80 percent (except for projects to meet the requirement of the Americans with Disabilities Act (ADA) , the Clean Air Act, or bicycle access projects, which may be funded at 90 percent). The maximum FTA share for operating assistance is 50 percent of the net operating costs. No local share is required for state administration or RTAP.
The code assigned to the nonurbanized formula program in the Catalogue of Federal Domestic Assistance is 20.509.
2. PROGRAM GOALS. The goals of the nonurbanized formula program are: to enhance the access of people in nonurbanized areas to health care, shopping, education, employment, public services and recreation; to assist in the maintenance, development, improvement, and use of public transportation systems in rural and small urban areas; to encourage and facilitate the most efficient use of all Federal funds used to provide passenger transportation in nonurbanized areas through the coordination of programs and services; to assist in the development and support of intercity bus transportation; and to provide for the participation of private transportation providers in nonurbanized transportation to the maximum extent feasible. The program supports the national policy stated in ISTEA: "to develop a National Intermodal Transportation System that is economically efficient and environmentally sound, [and which includes] significant improvements in public transportation necessary to achieve national goals for improved . . . mobility for elderly persons, persons with disabilities, and economically disadvantaged persons in urban and rural areas of the country."
One of FTA's goals is to ensure that all Americans, including those who live in rural and small urban areas, have access to transit to meet basic mobility needs. The significantly higher funding levels for the nonurbanized formula program authorized in the Transportation Equity Act for the 21st Century (TEA-21) should enable the states to extend transit service to areas currently unserved and improve service levels in areas which currently have minimal service.
3. STATE ROLE IN PROGRAM ADMINISTRATION. To the extent permitted by law, FTA gives the states maximum discretion in designing and managing the Section 5311 program to meet nonurbanized public transportation needs. Where possible, FTA defers to states and state instrumentalities in developing program standards, criteria, procedures and policies in order to provide the states flexibility to standardize their management of FTA assistance and related state programs. Department of Transportation (U.S. DOT) regulations, "Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments," 49 C.F.R. Part 18 (sometimes referred to as the "common rule"), permit states to rely on their own laws and procedures instead of Federal procedures in the areas of financial management systems, equipment, and procurement and may pass these procedures down to subrecipients which are public entities. While subrecipients which are private nonprofit organizations must comply with U.S. DOT regulations, "Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations," 49 C.F.R. Part 19, FTA delegates authority to the state wherever allowed.
The Governor designates a state agency which will have the principal authority and responsibility for administering the Section 5311 program. Specifically, the role of the state agency includes: documenting the state's procedures in a state management plan; notifying eligible local entities of the availability of the program; soliciting applications; developing project selection criteria; reviewing and selecting projects for approval; forwarding an annual program of projects and grant application to FTA; certifying eligibility of applicants and project activities; ensuring compliance with Federal requirements by all subrecipients; monitoring local project activity; and overseeing project audit and closeout. In addition, the state agency may carry out a project directly. The state must exercise adequate oversight to ensure that only eligible activities receive Federal assistance and that subrecipients meet Federal requirements.
In administering the program, the state is also responsible for the following: providing for appropriate technical assistance for nonurbanized areas; ensuring that there is a fair and equitable distribution of program funds within the state; ensuring a process whereby private transit operators are provided an opportunity to participate to the maximum extent feasible; expending funds for the support of intercity bus transportation to the extent required by law; and providing for maximum feasible coordination of public transportation services assisted by FTA with transportation services assisted by other Federal sources.
The state must include its Section 5311 apportionment, along with all other Federal highway and transit funds, in a Statewide Transportation Improvement Program (STIP) approved by FTA and the Federal Highway Administration (FHWA). FTA subsequently obligates Section 5311 funds and any flexible funds transferred to Section 5311 based on the program of projects included in the state's Section 5311 grant application. Before the state may expend Federal funds on behalf of a subrecipient, the state must enter into an agreement with the subrecipient, and the subrecipient must have met all statutory and program requirements. The state certifies to FTA annually that the state and subrecipients have met, or will meet, all Federal requirements.
4. FTA ROLE IN PROGRAM ADMINISTRATION. The FTA headquarters office is responsible for: providing overall policy and program guidance for the Section 5311 program; apportioning funds annually to the states; developing and implementing financial management procedures; initiating and managing program support activities; and conducting national program review and evaluation.
The FTA regional offices have the day-to-day responsibility for administration of the program. Regional office activities include: reviewing and approving state grant applications; obligating funds; managing grants; overseeing the state's implementation of the annual program, including revisions to the program of projects; receiving state certifications; reviewing and approving State Management Plans; providing technical assistance and advice to the states as needed; and performing state management reviews every three years, or as circumstances warrant.
FTA uses contractor support to conduct state management reviews. The reviews examine the state's management procedures, based on the approved State Management Plan. In each area reviewed, a finding is made of compliance, non-compliance, or compliance with follow-up. FTA places emphasis on providing the information needed to help the state come into compliance with Federal requirements in all areas. FTA periodically conducts state management review seminars to assist the states with understanding the requirements. If a particular problem area is observed, a more detailed oversight review may be scheduled in the areas of civil rights, procurement, financial management, drug and alcohol rule compliance, or ADA compliance.
5. RELATIONSHIP TO OTHER FTA PROGRAMS.
a. Elderly and Persons with Disabilities Program (Section 5310). Section 5310 directs FTA to make funds available to the Governor of each state to assist private nonprofit organizations in the purchase of vehicles and related equipment to provide transportation services which meet the special needs of elderly persons and persons with disabilities. Public bodies meeting either of the following two conditions are eligible subrecipients of Section 5310 funds:
(1) Public bodies approved by the state to coordinate services for elderly persons and persons with disabilities, or
(2) Public bodies which have certified to the Governor that no nonprofit corporations or associations are readily available in an area to provide service for elderly persons and persons with disabilities.
Many Section 5310 subrecipient organizations serve clients in rural and small urban areas. While the overall objectives of Section 5311 and Section 5310 differ (the former is to provide transportation to the general public in nonurbanized areas and the latter is to serve elderly persons and persons with disabilities in both rural and urbanized areas), there are parallels which make it desirable for states to consider both resources and plan for their use in a complementary way. With a few exceptions, the two programs are administered by the same state agency. Many Section 5311 subrecipients are private nonprofit organizations, and in some cases a single agency receives funding under both Section 5311 and Section 5310. In other cases, subrecipients of Section 5311 funds participate in coordinated service arrangements which also include Section 5310 funded organizations. FTA encourages participation in such coordinated efforts as long as the coordinated services will continue to meet the purposes of both programs.
Section 5310 funds can be transferred to the Governor for use in nonurbanized areas (Section 5311) or small urbanized areas (Section 5307) if they will not be obligated for projects supporting the Elderly and Persons with Disabilities Program. Where possible, FTA has established consistent guidelines for Section 5310 and Section 5311 to facilitate coordination and to simplify program administration for the state and for subrecipients. Guidance fopr Section 5310 is found in FTA C 9070.1E.
b. Urbanized Area Formula Assistance Program (Section 5307). Section 5307 provides funding for urbanized areas for planning, capital and operating assistance for public transit services. Funds for urbanized areas under 200,000 population are made available to the Governor or the Governor's designee(s). For urbanized areas of 200,000 or more, funds are available to a local designated recipient(s). A number of urbanized area recipients of Section 5307 funds also receive Section 5311 funds to carry out projects in outlying nonurbanized areas. The Governor has the authority to transfer Section 5307 funds apportioned to the state for urbanized areas under 200,000 to supplement the state's Section 5311 apportionment. The Governor may also transfer Section 5311 funds to supplement the state's apportionment of Section 5307 funds for small urbanized areas. The transfer provisions were established to give Governors greater flexibility in allocating formula transit funds in both urbanized and nonurbanized areas, to ensure that funds available to the state are fully utilized. In the past, some states used the transfer provision to balance capital and operating needs given the limitation on operating assistance in the urbanized formula program, but the removal of the operating cap for small urbanized areas in TEA-21 eliminated the need for such transfers. Guidance for Section 5307 is found in FTA C 9030.1C.
c. Capital Program - Bus (Section 5309). Section 5309 provides capital assistance for fixed guideway modernization (40 percent), construction and extension of new fixed guideway systems (40 percent), and bus and bus related equipment and facilities (20 percent) in both urbanized and nonurbanized areas. States and local public bodies are eligible applicants for Section 5309 funds. . States may apply on behalf of private nonprofit and public subrecipients. Many states look to the capital program to supplement vehicles acquired under Section 5310 and Section 5311 or to construct facilities. While distribution of capital program funds is often determined in accordance with congressional direction, FTA encourages states to be the applicant on behalf of nonurbanized areas. Guidance for Section 5309 is found in FTA C 9300.1C. The Department of Labor (DOL) must certify to FTA that adequate labor protections required by Section 5333(b) are in place prior to approval of Section 5309 grants. In the case of statewide grants, however, DOL does not require the state to guarantee the labor protection arrangements, but rather looks at each subrecipient separately. In most cases, DOL will certify these grants based on terms and conditions similar to those of the special warranty for the nonurbanized formula program.
d. Job Access and Reverse Commute Program. This new FTA program was authorized in TEA-21. Of the funds authorized, 20 percent is reserved for use in other than urbanized areas. The Federal DOT share is 50 percent, and contract income and funds from other Federal agencies may be used for the local match. Application procedures will be available from FTA regional offices, or the FTA home page, beginning in FY 1999.
e. Clean Fuels Formula Grant Program. TEA-21 included a new formula program to promote the use of clean fuels. Public body transit operators in clean air non-attainment or maintenance areas, both urbanized and nonurbanized, may apply. FTA must apportion funds by February 1, 1999, to eligible recipients who apply by the January 1, 1999 deadline. Apportioned funds are available to applicants for one year plus one additional year. Eligible projects include the following: the purchase or lease of clean fuel buses, the construction or lease of clean fuel electrical recharging facilities, improvement of existing facilities to accommodate clean fuel buses, the re-power of pre-1993 engines with clean fuel technology and the retrofit or rebuild of pre-1993 engines if before a mid-life rebuild. There is a limitation on the percentage of the funds used for clean diesel projects. FTA will issue guidance in a Federal Register announcement prior to the application deadline.
f. Flexible Funds. TEA-21 maintained the flexible funding provisions of ISTEA, which established the Surface Transportation Program (STP) as a source of flexible funding for both highway and transit projects. At the state's discretion, funds allocated under the STP for highways and transit in rural areas may be used for any capital transit project eligible for assistance under 49 U.S.C. Chapter 53, including vehicles and facilities, whether publicly or privately owned, that are used to provide intercity passenger service by bus. Certain other program funds, for example, Congestion Management and Air Quality (CMAQ), may also be used for either highway or transit projects. These flexible funding sources may be used to supplement the nonurbanized formula program. When the state decides to use flexible funds for rural public transit, the funds are transferred and managed within the Section 5311 program of projects.
g. State Planning and Research Program (Section 5313(b)). Section 5313(b) funds are apportioned annually to the states for use in planning and research. Some of the Section 5313(b) funds are suballocated to metropolitan planning organizations (MPO) in urbanized areas at the state's discretion. Other eligible uses, at the state's discretion, include statewide planning and other technical assistance activities, planning support for nonurbanized areas, research, development and demonstration projects, fellowships for training in the public transportation field, university research, and human resource development. Section 5303 funds are also apportioned annually to the state for allocation to MPO's for planning in urbanized areas.
In addition to Section 5313(b) funds allocated to the states, a state may use up to 15 percent of its Section 5311 apportionment for planning and technical assistance. While RTAP funds are also available to the states for technical assistance, training, research, and support services, it is not intended that RTAP be viewed as a planning resource. However, the state may use RTAP for special projects which support its planning program for rural and small urban areas. Similarly, the state may use its Section 5313(b) funds to support or supplement the technical assistance program it provides through RTAP. States are encouraged to develop a coordinated program of planning, research, training, and technical assistance, taking Sections 5313(b), 5311, and RTAP resources into consideration.
h. State Infrastructure Banks. TEA-21 provides for a revised state infrastructure bank (SIB) pilot program for four states: California, Florida, Missouri, and Rhode Island. These four states may use Section 5311 funds to capitalize SIB's. Other states which established SIB's under the provisions of Section 350 of the National Highway System Designation Act of 1995, as amended, may continue using funds already deposited but, at this time, are not permitted to add Section 5311 funds apportioned after FY 1997. Contact the FTA regional office for more information.
6. COORDINATION WITH OTHER FEDERAL PROGRAMS.
a. The Coordinating Council on Mobility and Access. The U.S. Department of Transportation (DOT) and the U.S. Department of Health and Human Services (DHHS) have been working together since 1986 to improve the coordination of programs funded by the two departments. Previously known as the DOT/DHHS Federal Coordinating Council on Human Service Transportation, the council has adopted a new name which reflects a broader charter. The council meets quarterly to address transportation coordination issues. Concerns about Federal program barriers to coordination may be brought to the attention of the Council through the FTA regional administrator. The FTA regional offices also work with states to address regional concerns and initiatives. FTA encourages state DOT's to work with their counterparts at state human service agencies, to participate with other states in regional initiatives, and to assist local recipients and subrecipients of Sections 5307, 5310, or 5311 funds to participate in coordinated systems at the local level, along with recipients of funds from the programs of DHHS and other Federal and state programs. Section 5311, RTAP, and Federal transportation planning funds provided to the state may be used in various ways to support eligible activities related to the development and administration of coordinated activities at the state and local level.
b. Coordination Mandate. TEA-21 includes a new requirement for local governmental agencies and nonprofit organizations that receive assistance from Federal sources other than the FTA for nonemergency transportation services. To the extent feasible these agencies are now required to participate and coordinate with recipients of assistance from FTA in the design and delivery of transportation services. They must be included in the planning for those services.
c. Welfare to Work. States are encouraged to take a leadership role in coordinating transportation resources for welfare reform initiatives. In addition to FTA and state transit funding, funding is available under Department of Labor Jobs programs and Department of Health and Human Services Temporary Assistance to Needy Families (TANF), as described in joint guidance published by DOT, DOL, and DHHS on May 27, 1998.
d. Public Lands and Indian Reservations. Under TEA-21, transit facilities within public lands, national parks, and Indian reservations are now an eligible use of funds available for public lands, highways, park roads and parkways, and Indian reservation roads (Chapter 2 of Title 23). These funds will be administered directly by the appropriate Federal land management agency (for example, the Bureau of Indian Affairs for the Indian Reservation Roads Program), but they must be included within the state transportation improvement program [49 U.S.C. 5304(c)(6)]. In developing the program of projects for Section 5311, the state should be aware of any transit capital projects tribes may have developed with Indian reservation roads funds.
e. Other Interagency Coordination. FTA encourages state DOT participation in other interagency efforts such as the state Rural Development Councils.
Chapter II: Apportionments
1. NOTIFICATION. The Section 5311 program apportionments and RTAP allocations to the states are published in the Federal Register annually, within ten days after the DOT Appropriation Act is signed.
2. AUTHORIZATION. The amount authorized for Section 5311 under 49 U.S.C. §5338(a)(2)(C)(iii)(II) is 6.37 percent of the amounts appropriated for FTA formula grants. Funds for RTAP are authorized under 49 U.S.C. § 5338(d)(2) as part of the National Planning and Research Program.
3. FORMULA. Section 5311 funds are apportioned to the states by a statutory formula based on the ratio of the nonurbanized population of each state to the nonurbanized population of all of the states, according to the latest available U.S. census data.
4. FUNDS AVAILABILITY. Section 5311 funds remain available to the states for three fiscal years, beginning with the year of apportionment plus two additional years. For example, funds apportioned in FY 1999 will lapse to a state at the end of FY 2001 unless obligated under Section 5311 or transferred to the Section 5307 program and obligated for urbanized areas under 200,000 population. Unobligated funds which have lapsed to a particular state are included in a subsequent FTA apportionment to all the states.
Funds which are deobligated from an approved program of projects remain available to the state for reobligation during the time period in which the funds were originally available to the state. Funds deobligated after the period of availability lapse to the state, and FTA reapportions the funds among all the states.
If a state has carryover funds available, it should obligate the oldest funds first. If a grant contains funds from more than one fiscal year, FTA will generally disburse the oldest funds first. However, if a grant included funds restricted to non-operating projects (for example, restricted funds transferred from Section 5307), restricted funds would be disbursed for a capital drawdown, even if older non-restricted funds remained available in the grant.
Procedures for revising an approved program of projects are described in Chapter IV. Many revisions can be made without changing the scope of the program of projects. Those revisions that do change the scope can only be made so long as there are sufficient undisbursed funds remaining that are within their period of availability.
5.TRANSFER OF APPORTIONMENTS UNDER DIFFERENT PROGRAMS. Funds may be transferred to and from certain other programs to balance state transit and highway needs. The transfer of funds from other programs to Section 5311 does not increase the amount of funds required to be expended for intercity bus. That amount remains at fifteen percent of the state's original Section 5311 apportionment.
a.Transfer of Section 5307 Funds. The Governor may transfer any amount of the state's apportionment for urbanized areas under 200,000 population to any urbanized area in the state, or to supplement the state's Section 5311 program. The Governor may make such transfers only after consultation with responsible local elected officials and publicly owned operators of mass transportation services in each area to which the funding was originally apportioned. The Governor may transfer funds without consultation within the last 90 days in which the funds are available for obligation.
If Section 5307 funds are transferred to supplement a state's Section 5311 apportionment, the funds are treated as additional Section 5311 funding and all the requirements of Section 5311 apply. Three conditions, however, follow the Section 5307 funds when they are transferred to Section 5311.
(1) For Section 5307 funds apportioned to the states before FY 1999, the transferred funds are subject to the capital and operating limitations applicable to the original Section 5307 apportionment. The Governor must designate whether the funds being transferred are unrestricted, that is, available for both capital and operating assistance purposes, or whether they are restricted to non-operating purposes. If unrestricted funds apportioned prior to FY 1999 are transferred, the state's Section 5307 operating cap for that year is reduced accordingly. The transfer of Section 5307 funds to Section 5311 does not increase the amount of Section 5311 funds which may be used for state administration with no local share. This is limited to 15 percent of the state's original Section 5311 apportionment. However, funds transferred from Section 5307 may be used for planning activities without respect to the cap, with a Federal share not to exceed 80 percent.
(2) The period of availability of the transferred funds remains that of the Section 5307 apportionment, one year longer than the same year's Section 5311 apportionment.
b.Transfer of Section 5311 Funds. The Governor may also transfer Section 5311 funds to supplement Section 5307 funds apportioned to the state for urbanized areas under 200,000 population. Transferred Section 5311 funds may not be used for urbanized areas with populations of 200,000 and over. While there is no statutory requirement for local consultation, FTA expects that any transfers would be made in consultation with the state agency which administers Section 5311. Transferred funds are subject to any limitations applicable to the original apportionment of the funds, not of the receiving program. Section 5311 funds transferred to Section 5307 are not subject to operating limitations and the use of transferred funds for operating assistance does not reduce the operating assistance cap of Section 5307 funds apportioned prior to FY 1999. Transfer of part of a state's Section 5311 apportionment to Section 5307 does not reduce the amount of the Section 5311 apportionment subject to the intercity bus requirement, nor does it reduce the amount of Section 5311 funds which may be used for state administration of the Section 5311 program. The period of availability of the transferred funds is that of the Section 5311 apportionment (three years).
c.Transfer of Section 5310 Funds. The Governor may transfer any portion of the state's apportionment under Section 5310 for elderly persons and persons with disabilities to Section 5311 for nonurbanized areas or to Section 5307 for urbanized areas under 200,000 if the funds will remain unobligated at the beginning of the 90 day period before the end of the Federal fiscal year. The period of availability of the transferred funds is that of the receiving program, three years in the case of Section 5311 and four years in the case of Section 5307. Section 5310 funds transferred to Section 5311 may only be used for non-operating costs (capital and project administration, as defined under Section 5311), and do not change the amount available for state administration under either Section 5311 or Section 5310. Since there is no statutory provision which would funds to be transferred the other way, Section 5311 funds cannot be transferred to Section 5310.
d.Transfer of Flexible Funds. Surface Transportation Program (STP) funds, Congestion Mitigation and Air Quality (CMAQ) funds, and certain other "flexible" funds, may be transferred from FHWA to FTA for use by the state for transit projects. Projects in rural areas and urban areas of less than 50,000 population (excluding projects on the National Highway System (NHS) and projects funded with Bridge and Interstate Maintenance funds) are selected by the state in cooperation with affected local officials. STP, CMAQ, or other flexible funds transferred to Section 5311 are treated under the program requirements applicable to Section 5311, but are restricted to non-operating costs, with limited exceptions. Capital and project administration are eligible with an 80 percent Federal share. Up to, but no more than, fifteen percent of the transferred funds may be used for state administration, including planning. No local share is required for state administration. The period of availability of flexible funds transferred to Section 5311 is three years.
Since planning for both transit and highways is eligible under FHWA's formula programs, flexible funds to be used for a rural transit planning project should not be transferred to Section 5311, where they become subject to the cap on state administration which limits the use of the funds for planning.
e. Notification of Transfer. The state initiates the transfer of FTA funds by notifying the FTA regional administrator of the intent to transfer funds. For transfers of Section 5307 funds to the state's apportionment for Section 5311, this notice should include the following: amount of funds to be transferred; fiscal year in which they were apportioned; whether or not the funds are restricted to capital projects (if apportioned prior to FY 1999); and, unless it is within the last 90 days of the period of availability of the funds, a statement by the Governor or designated representative that responsible local officials and operators have been consulted prior to the transfer. For transfers of Section 5311 funds to the state's apportionment for Section 5307, the notice must indicate the amount and fiscal year of funds transferred. Transfers of Section 5310 funds must indicate the amount of funds and the program to which they are to be transferred.
For transfers of flexible funds, the state must notify both FHWA and FTA and request FHWA to transfer the funds. Since FTA approves grants on a quarterly cycle, the state must notify the FTA regional administrator no later than the beginning of the funding cycle when the state expects FTA to obligate the transferred funds.
6. CONSOLIDATION OF GRANTS TO INSULAR AREAS. FTA grants to insular areas may be consolidated under the provisions of 48 U.S.C. § 1469a. This provision permits Federal agencies to streamline and consolidate certain grant-in-aid programs available to the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. These insular areas receive Section 5311 and Section 5310 apportionments and RTAP allocations annually. Specifically, 48 U.S.C. § 1469a permits:
a.Federal agencies to consolidate any or all grants to each of the insular areas and to waive requirements for matching funds, applications, and reports with respect to the consolidated grants, and
b.Each insular area to use the consolidated grant funds for any purpose or program authorized for any of the consolidated grants.
FTA implements this consolidation of Section 5310, Section 5311, and RTAP funding into a single grant by transferring funds from one Section to another, similar to the transfer of funds between Section 5311 and Section 5307 for small urbanized areas described above. The insular areas may transfer all or a portion of the funds apportioned for Section 5310, Section 5311, or RTAP, for use under any of these Sections. This should improve the efficiency of grant making and grant management for these areas which have small staff resources and receive small amounts of funds under each of these programs. Those insular areas interested in submitting applications for consolidated grants should notify the appropriate FTA regional office for application procedures and consolidation requirements. Among other things, the area should identify the intended use of consolidated funds and should show that the transportation of the elderly persons and persons with disabilities will not be adversely affected.
In addition, 48 U.S.C. § 1469a(d) allows a Federal agency to waive any local matching share requirements for grants to insular areas. FTA has no authority under 48 U.S.C. § 1469a to waive any cross-cutting requirements, such as Buy America or drug and alcohol testing.
Chapter III: Eligibilty
1. DESIGNATED STATE AGENCY. The chief executive officer of each state designates an agency with the requisite legal, financial, and staffing capabilities to receive and administer Federal funds under this program. The designated state agency is the grantee for all Section 5311 funds within the state, whether it applies on its own behalf or on behalf of subrecipients. Existing designations remain in effect until changed by official notice of redesignation to the FTA regional administrator. The term chief executive officer of a state includes the designee of the chief executive officer.
2. ELIGIBLE RECIPIENTS. Eligible recipients or subrecipients include state agencies, local public bodies and agencies thereof, private-nonprofit organizations, and operators of public transportation services. The definition of local governmental authority includes Indian tribes. Eligible nonprofit organizations may also serve tribal transportation needs. Private for-profit operators of transit services participate in the program as third party contractors for grantees or eligible subrecipients, rather than as subrecipients. (An exception to this principle for private intercity bus operators assisted under Section 5311(f) is described in Chapter VII,) State agencies may further limit subrecipient eligibility requirements in order to comply with state laws or to further program goals.
3. ELIGIBLE SERVICE AND SERVICE AREAS. Section 5311 funds can be used for public transportation projects and intercity bus transportation projects in areas other than urbanized areas. Public transportation is defined to mean mass transportation by a conveyance that provides regular and continuing general or special transportation to the public, but does not include school bus, charter, or sightseeing transportation. Limitations on the provision of charter and school service are described in Chapter X. Guidance on funding for intercity bus transportation is found in Chapter VII of this circular.
The purpose of Section 5311 assistance is the provision of public transportation services. Incidental use of a Section 5311 vehicle for non-passenger transportation on an occasional or regular basis, for example, package delivery, must not result in a reduction of service quality or availability of public transportation service. This policy on incidental use does not preclude the use of Section 5311 assistance to support the transportation of passengers by a private provider not primarily engaged in passenger transportation, for example a contract mail carrier which incidentally provides intercity passenger transportation.
Section 5311 funded services may be designed to maximize use by members of the general public who are transportation-disadvantaged persons, including elderly persons and persons with disabilities. Coordinated human service transportation which primarily serves elderly persons and persons with disabilities, but which is not restricted from carrying other members of the public, is considered available to the general public if it is marketed as public transit service.
Transit service providers receiving assistance under Section 5310 or Section 5311 may coordinate and assist in providing meal delivery service for homebound persons on a regular basis if the meal delivery services do not conflict with the provision of transit services or result in a reduction of service to transit passengers. It is expected that the operating costs attributable to meal delivery will be borne by the nutrition program which provides the meals. Section 5311 capital assistance may not be used to purchase special vehicles used solely for meal delivery or to purchase specialized equipment such as racks or heating or refrigeration units related to meal delivery.
The terms "nonurbanized areas" and "rural and small urban areas" are used synonymously to mean any area outside of an urbanized area, as designated by the Bureau of the Census. An urbanized area consists of a core area and the surrounding densely populated area with a total population of 50,000 or more, with boundaries fixed by the Bureau of the Census or extended by state and local officials. Areas not currently within the urbanized area are eligible for Section 5311 funding even if they are included within the metropolitan area planning boundary, which includes the surrounding area expected to be urbanized within twenty years and/or the air quality non-attainment boundary.
Since the goal of Section 5311 is to enhance access of people living in nonurbanized areas to activities, Section 5311 projects may include transportation to and from urbanized areas.
The service area may include destinations across a state line. Operators of interstate service are required to register with the FHWA Office of Motor Carriers.
4.JOINT URBANIZED AND NONURBANIZED PROJECTS. In some localities, a subrecipient receives both Section 5307 and Section 5311 funding to provide public transportation for an urbanized area and surrounding nonurbanized areas. Section 5311 funds should be used only to assist the nonurbanized portion of those localities. Because of the wide range of circumstances under which an operator could be providing services in both urbanized and nonurbanized areas, FTA expects the subrecipient to develop a reasonable basis for allocating operating costs between the two funding sources which is related to the service provided. This procedure should also be applied to "joint" capital projects. Likewise in the interest of flexibility and coordination, vehicles purchased under either program may be used in any part of a combined urbanized and nonurbanized service area, but capital replacement policies should ensure that program funds are used appropriately. Where there is a question, FTA would look to the state to make a determination as to the reasonableness of the cost allocation methodology. Section 5307 program information is contained in FTA Circular 9030.1C.
5. ELIGIBLE ASSISTANCE CATEGORIES.
a.State Administration, Planning, and Technical Assistance. The state may use an amount not to exceed 15 percent of its apportioned Section 5311 funds, not including the RTAP allocation, to administer the program and to provide technical assistance to subrecipients. Allowable administrative costs include salaries, overhead expenses, supplies, and office equipment used to administer the program. Technical assistance may include project planning, program development, development of vehicle and equipment specifications, management development, coordination of public transportation programs (public and private for-profit and non-profit), and such research as the state may deem appropriate to promote effective means of delivering public transportation service in nonurbanized areas. No local share is required for these expenses. The state may pass any portion of these funds on to subrecipients for the same purposes and, at its discretion, may impose a local share requirement.
The eligibility of planning costs is limited to funds within the 15 percent state administration cap, with several limited exceptions. As described in Chapter VII, planning and marketing for intercity bus services funded with a 20 percent local share is not limited by the 15 percent cap on state administrative expenses. Planning is also an unlimited eligible use of funds transferred from Section 5307, with a 20 percent local share required. Flex funds transferred into Section 5311, however, are subject to a 15 percent limitation on planning and other state administration activities, with no local share required.
While many administrative and technical assistance activities useful to the state may also be funded as RTAP projects, those technical assistance activities more directly related to the administration of the Section 5311 program, such as conducting procurements and monitoring subrecipients are more appropriately funded as state administration expenses, with RTAP being used to deliver training and technical assistance needed by rural providers.
FTA treats the limitation on state administration as applicable to Section 5311 funds apportioned to the state over time, not necessarily to the apportionment for a particular fiscal year. FTA encourages the states to include all the available state administration funds they intend to use routinely in each annual grant application. However, a state may accumulate the "entitlement" to state administration over several years to augment the funds available for a special administrative need in a subsequent year, such as a major planning study for which current year administrative funds would be insufficient. The period over which the cap is accumulated may not exceed three years. If a state includes planning or state administration expenses in excess of the 15 percent limitation in its grant application, it should document the unused state administration cap from prior years available to augment the cap in the current apportionment.
b. Capital expenses. Capital expenses include the acquisition, construction and improvement of public transit facilities and equipment needed for a safe, efficient and coordinated public transportation system. The Federal share of eligible facilities and equipment shall not exceed 80 percent of the net project cost, except that the Federal share may be 90 percent for bicycle facilities projects and vehicle related equipment required to comply with the Americans with Disabilities Act of 1990, as amended (ADA), or the Clean Air Act, as amended.
In general, capital eligibility is the same as for other FTA capital programs. Where FTA allows certain costs to be capitalized or treated as operating expenses, the state may determine which of those costs it will allow subrecipients to capitalize.
Examples of eligible capital expenditures include, but are not limited to:
(2) vans or other paratransit vehicles;
(3) radios and communications equipment;
(4) passenger shelters, bus stop signs, and similar passenger amenities;
(5) wheelchair lifts and restraints;
(6) vehicle rehabilitation, remanufacture, or overhaul;
(7) preventive maintenance, defined as all maintenance costs;
(8) extended warranties which do not exceed the industry standard;
(9) the mass transit portion of ferry boats and terminals;
(10) operational support such as computer hardware or software;
(11) installation costs; vehicle procurement, testing, inspection and acceptance costs;
(12) construction or rehabilitation of transit facilities including design, engineering and land acquisition;
(13) facilities to provide access for bicycles to transit facilities or equipment for transporting bicycles on transit vehicles;
(14) lease of equipment or facilities when lease is more cost effective than purchase (when lease of equipment or facilities is treated as a capital expense, the state must establish criteria for determining cost effectiveness, which may include non-economic factors such as management efficiency, availability of equipment, and staffing capabilities. While 49 C.F.R. Part 639, the Final Rule on Capital Leases, published in the Federal Register on October 15, 1991, does not apply to Section 5311, it contains guidelines which may be useful to the state in making the cost-effectiveness comparison);
(15) the capital portion of costs for service provided under contract. Such costs are commonly referred to as the "capital cost of contracting" and include depreciation, interest on facilities and equipment, as well as those allowable capital costs that would otherwise be incurred directly, including maintenance. Under this provision, only privately owned assets are eligible. No capital assets (vehicle, equipment, or facility) that have any remaining Federal interest in them, nor items purchased with state, or local government assistance, may be capitalized under the contract. Costs incurred in the provision of services ineligible for FTA assistance such as charter or school bus service, may not be capitalized under the contract. Capital costs of contracting may be computed as a fixed percentage of the contract without further justification, as detailed in Exhibit G;
(16) joint development projects (FTA Circular 9300.1A, "Capital Program: Grant Application Instructions," Appendix B, provides guidelines for joint development projects);
(17) the introduction of new technology, through innovative and improved products, into mass transportation;
(18)transit related intelligent transportation systems; and
(19)the provision of ADA paratransit service (may not exceed ten percent of the state's annual apportionment of Section 5311 and may be used only by recipients that are in compliance with ADA requirements for both fixed route and demand responsive service).
c. Operating Expenses Operating expenses are considered those costs directly related to system operations. At a minimum, the following items must be considered operating expenses: fuel, oil, drivers' salaries and fringe benefits, dispatcher salaries and fringe benefits, and licenses.
Maintenance may be treated as either operating or capital for funding purposes, at the state's discretion. Likewise, for the Section 5311 program only, FTA gives the state the option of classifying certain other expenses as either operating or non-operating (project administration). Even if these expenses are eligible to be funded at the capital match, they may be classified as operating expenses in the transit provider's internal accounting system, under generally accepted accounting principles. For funding purposes, the same cost may not be counted twice. Net operating expenses are those expenses that remain after operating revenues are subtracted from eligible operating expenses. At a minimum, operating revenues must include farebox revenues. States may further define what constitute operating revenues. Farebox revenues include fares paid by riders who are later reimbursed by a human service agency, or other user-side subsidy arrangements, but do not include payments made directly to the transit provider by human service agencies. Application of contract revenue is further defined in paragraph 6b below.
The Federal share for net operating expenses may not exceed 50 percent. Operating assistance projects of up to two years' duration may be included in the annual program of projects. Operating costs incurred as of the beginning of the local fiscal year but prior to grant award may be approved for reimbursement.
d. Project Administrative Expenses. Under the Section 5311 program, the state has the option to treat project administrative expenses incurred by a local provider as a separate cost category from either capital or operating expenses. This allows administrative expenses to be considered "non-operating" expenses, which may be funded up to the 80 percent Federal share. This practice is consistent with congressional intent that smaller communities be given greater flexibility in matching requirements than larger cities.
Eligible project administrative costs may include, but are not limited to, general administrative expenses such as salaries of the project director, secretary, and bookkeeper; marketing expenses; insurance premiums or payments to a self-insurance reserve; office supplies; facilities and equipment rental; standard overhead rates; and the costs of administering drug and alcohol testing. Administrative costs for promoting and coordinating ridesharing may be eligible if the activity is part of a coordinated public transportation program. Interest on short-term loans for operating assistance is an eligible administrative expense if approved by the state.
e. Pilot Program. During fiscal years 1998 through 2003, any assistance provided to the state of Oklahoma under Section 5307 and 5311 may be used for capital improvements to, and operating assistance for, intercity passenger rail service. This provision of TEA-21 does not apply to any other state. FTA is required to evaluate the pilot program and report to Congress by October 1, 2002.
6. LOCAL MATCH REQUIREMENTS AND ELIGIBILITY
a. Capital and Project Administration. The Federal share of eligible capital and project administrative expenses may not exceed 80 percent of the net cost of the project.
There are three exceptions to the 80 percent match for capital projects. The Federal share may be 90 percent for those capital projects used to provide access for bicycles to transit facilities, or to install racks or other equipment for transporting bicycles on transit vehicles. The Federal share may also be 90 percent for vehicle-related equipment required by the Americans with Disabilities Act of 1990 (ADA) or vehicle-related equipment (including clean fuel or alternative fuel vehicle-related equipment) for purposes of complying with or maintaining compliance with the Clean Air Act, as amended (CAAA). It is only the incremental cost of the equipment required by the ADA or CAAA that may be funded at 90 percent, not the entire cost of the vehicle, even if the vehicle is purchased for use in service required by the ADA or CAAA. Alternatively, for administrative simplicity FTA allows grantees to compute the Federal share at 83 percent for accessible vehicles.
b. Operating. With respect to operating expenses, 49 U.S.C. § 5311(g)(2) provides that the Federal share shall not exceed 50 percent of the net operating deficit included in the project. Of the remainder of the deficit, 50 percent must be financed from sources other than Federal funds or revenues of the system (i.e., half of the local match must come from local funds). This restriction does not apply to the other half of the local share.
Examples of non-Federal sources of local match which may be used for any or all of the local share include: state or local appropriations; dedicated tax revenues; private donations; and net income generated from advertising and concessions. Non-cash shares such as donations, volunteered services or in-kind contributions are eligible to be counted toward the local match only if the value of each is formally documented and supported, and represents a cost which would otherwise be eligible under the project. Guidance on this subject is provided in the Federal administrative rules for grants and cooperative agreements at 49 C.F.R. Parts 18 and 19. The value of in-kind contributions is included in net project cost to the extent it is used as local match.
Pursuant to 49 U.S.C. § 5311 (g)(1), funds received by subrecipients pursuant to service agreements with a state or local social service agency or a private social service organization may be treated as local rather than Federal funds, even though the original source of such funds may have been another Federal program. In addition, certain Federal programs specifically permit the use of Federal funds appropriated for those programs to be treated as local funds for the purposes of matching share for other Federal programs.
Income from contracts to provide human service transportation may be used either to reduce the net project cost or to provide local match for Section 5311 operating assistance. In either case, the cost of providing the contract service is included in the total project cost.
The manner in which a subrecipient applies income from human service agencies to a project affects the calculation of net operating expenses and, therefore, the amount of Section 5311 operating assistance the project is eligible to receive. A state's method of sub-allocating its apportionment among its subrecipients is a discretionary action, subject only to the statutory requirements described in this circular. While a state may not prohibit a subrecipient from using income from human service agency contracts as a source of local match according to 49 U.S.C. § 5311(e)(2), the state may elect to regard the degree to which a subrecipient demonstrates local financial commitment to the project from other sources of local funds as a rating factor in its discretionary allocation decisions.
Chapter IV: Program Management and Administrative Requirements
1. FAIR AND EQUITABLE DISTRIBUTION. The program of projects that the state submits to FTA for approval must provide for fair and equitable distribution of the apportionment in the state, including Indian reservations. While constrained funding levels in the past have sometimes prevented the states from funding new rural transit systems, TEA-21 has dramatically increased the Federal funding available for rural transit. FTA encourages the states to use the increased availability of funds to support expansion of transit service to areas not currently served and to improve the level of service or coverage in areas which currently have minimal service.
2.PLANNING REQUIREMENT. With limited exceptions, all Federal funds to be used for highway or transit projects must be included in a Statewide Transportation Improvement Program (STIP), 23 U.S.C. Section 135. Section 5311 funds must be included in the STIP. Unlike the annual program of projects the state submits with its grant application, the STIP generally covers three program years. For the purposes of the STIP, the state may group its planned expenditures of Section 5311 and RTAP funds into broad statewide projects such as vehicle acquisition for rural and small urban transportation services, operating assistance, intercity bus projects, facility construction, state administration, and training and technical assistance, or show the 5311 apportionment as one aggregate project.
Metropolitan planning organizations (MPO's) are responsible for transportation planning and programs in metropolitan areas. Where Section 5311 projects are being proposed within the MPO's current planning/study area boundaries, which may include areas that are currently nonurbanized but are expected to become urbanized within twenty years, then these projects must be included in the MPO's Transportation Improvement Program (TIP). While the state is ultimately responsible for distribution of nonurbanized formula funds within the state, Section 5311 projects within the metropolitan area planning boundaries of a Transportation Management Area (certain urbanized areas over 200,000) should be selected by the MPO in cooperation with the state.
TEA-21 includes a new requirement that, to the extent feasible, governmental agencies and nonprofit organizations that receive assistance from other Federal agencies for nonemergency transportation services shall participate and coordinate with FTA recipients in the design and delivery of transportation services and be included in the planning for those services.
For further guidance on planning, programming and project selection see the joint FHWA/FTA planning regulations at 23 C.F.R. Part 450 and 49 C.F.R. Part 613.
3. PROGRAM OF PROJECTS. The program of projects identifies the subrecipients and projects for which the state is applying for financial assistance. The Section 5311 annual program of projects submitted to FTA for approval must indicate the total number of subrecipients, identify each subrecipient, give a brief description of each project which includes the counties in which transit service is provided, and indicate the total project cost and the Federal share for each project. The state should identify subrecipients which are Indian tribal governments, and mention any tribal transportation needs which will be served in the project descriptions. FTA needs this information for grant releases given to the state's Congressional delegation, and to compile reports.
The projects to support intercity bus transportation required by Section 5311(f) should be grouped together and subtotaled. Specific RTAP projects should also be described, within the broad areas of eligibility. Information for developing an RTAP program of projects is contained in Chapter VIII of this circular. The program of projects also includes any funds the state will use for planning, technical assistance, and administration, within the fifteen percent limitation, and any other projects the state will conduct directly.
In general, states should not include projects that will extend for more than two years in duration. Exceptions to this should be discussed with the regional office.
The total Federal funding level for the projects in the program cannot exceed the total amount of Section 5311 funds available, including funds from the current fiscal year apportionment, unobligated carryover funds from previous years, and funds transferred from Section 5307 or flexible funds for highway or transit.
4. CATEGORIES OF APPROVAL. FTA's approval of a program of projects does not reflect unconditional approval of all projects within the program. Nor does FTA's approval of a program of projects reflect unconditional approval of all prospective subrecipients identified in the program. FTA recognizes that not all projects in a state program of projects may be at the same stage of development, and therefore, not all applications to the state may be complete at the time the state forwards its annual program of projects to FTA. FTA also recognizes that all subrecipients identified in the program of projects may not yet be in compliance with all applicable Federal requirements. To expedite grant award, FTA allows states to separate projects and funds included in its program of projects into three different categories, depending on how completely Federal requirements have been met.
a. Category A. This category includes those projects certified by the state as having met all the Federal statutory and administrative requirements for approval applicable to both the project activities and subrecipient that will carry out those activities. Upon grant award, FTA's approval of Category A projects is unconditional. Upon execution of the grant, the state may start drawing down funds to implement projects in Category A. Most, if not all, of the projects included in the state's program of projects are expected to be in this category.
b. Category B. Projects in Category B are those the state anticipates approving during the current year, but which have not yet met all Federal statutory and/or administrative requirements, such as certification by the state to the Department of Labor that the special labor protection warranty has been signed, or, in the case of a major capital project other than vehicle purchase, completion of the environmental review process, or are proposed to be implemented by a subrecipient that has not yet met all applicable Federal requirements. When the necessary Federal requirements have been satisfied for a project, FTA's approval of that project becomes unconditional, and the project may be advanced to Category A. Cash drawdowns for that project may commence after the state advances it to Category A. In addition, any Category B project that does not qualify as a categorical exclusion under 23 C.F.R. § 771.117(c) requires environmental clearance from FTA before being advanced to Category A. (See Chapter X for information regarding categorical exclusions.) If a state can list all of its projects in Category A, it would not list any projects in Category B.
c. Category C. Category C consists of funds to finance as yet unidentified Section 5311 projects not included in the state's program of projects submitted with its grant application. The category was established to enable states to obligate the entire annual apportionment at one time, even if the state has not designated all the projects for which its entire Section 5311 apportionment should be used at the time of application to FTA. For example, if the state cannot immediately identify specific projects that would use the entire fifteen percent of the apportionment required to be expended for intercity bus transportation, the remaining intercity bus funds may be listed in Category C designated for intercity bus projects.
This optional Category C represents a "program reserve" and is designed to accommodate unanticipated program needs. It should not be confused with funds for reasonable contingencies for the projects designated in the state program of projects, which the state may include in Category A or B project level budgets, or as a capital or operating contingency set-aside to be allocated among the designated projects as needed. No more than 10 percent of the total amount obligated in the grant may be included in Category C program reserve. FTA strongly encourages the state not to include more funds in Category C than it reasonably expects to allocate to new projects capable of meeting the applicable Federal requirements or to budget adjustments in existing projects within twelve months. If, in the near future, the state does not expect to select projects for which all its Category C funds will be used, the state should defer obligating those remaining funds until the following year. In any case, Category C funds must be allocated to specific projects within the period of availability of the funds. FTA will deobligate any Category C funds not so allocated within the period of availability. (If a grant contains funds apportioned in more than one fiscal year, FTA assumes that the funds remaining in Category C are the newest funds.) Funds deobligated after the period of availability lapse to the state and are redistributed to all the states in a subsequent year's apportionment. When a state selects projects to be advanced out of Category C, it must notify FTA of the changes to the program of projects. Any new project that does not qualify as a categorical exclusion under 23 C.F.R. § 771.117(b) requires environmental clearance from FTA before funds can be advanced to Category A.
5. PRE-AWARD AUTHORITY. FTA allows grantees to incur costs prior to grant award in the formula programs. In order for the pre-award costs to be eligible for subsequent reimbursement, the project must have met all FTA statutory, procedural and contractual requirements, in other words the project must qualify as a "Category A" project in the program of projects. Reimbursement is subject to the availability of funds and grant award. Specific information is included in FTA's annual apportionment notice.
6. GRANT AWARD AND PROJECT APPROVAL. FTA awards grants on a quarterly cycle. States submitting a complete and acceptable application by the beginning of each quarter will be awarded a grant by the end of the quarter. FTA awards grants and obligates funds for the total amount the state requests for all three categories and the RTAP program of projects. FTA grant award constitutes FTA approval of the state's annual program of projects. But FTA approval of the Section 5311 program of projects does not constitute unqualified approval of each project in the program. Grant award does constitute FTA approval of those projects in Category A. Thus the state may draw down Federal funds immediately upon execution of the grant agreement. Grant award also constitutes FTA's approval of those projects in Category B on the condition that all applicable Federal requirements will be met. The state must ensure that those requirements are met and advance the projects to Category A before funds can be drawn down to support those projects. In addition, the grant award obligates Federal funds for Category C projects and constitutes approval of Category C projects, not identified at the time of award, that have met or will meet all applicable Federal requirements. The state, however, must allocate Federal funds awarded for Category C within the period of availability of those funds to new or existing projects that have met or will meet all of the necessary statutory and administrative requirements.
7. REVISIONS TO PROGRAM OF PROJECTS. The state may revise an approved program of projects without constituting a change in scope which would require the deobligation and reobligation of funds. The scope of the grant is the approved program of projects in its entirety. The addition of Federal funds to the approved program of projects is a change in the scope of the approved program of projects and requires an amendment of the grant agreement. Below are examples of project and funding revisions that do not change the scope of the approved program of projects. Unless FTA notifies the state otherwise, the following levels of notification and FTA approval apply to revisions:
a. Revisions Not Requiring Prior Notification or FTA Approval. The state may make the following revisions without any prior notification to or approval by FTA:
(1) Delete a project from the program of projects if the project cost is less than the $250,000 or 10 percent of the total of the program of projects, whichever is greater;
(2) Advance projects from Category B to Category A, provided the prospective subrecipient is in compliance with all applicable Federal requirements, and the state has no information suggesting otherwise;
(3) Allocate Category C funds to existing projects, if the funds are within their period of availability;
(4) Reallocate funds within an approved program of projects among approved projects within a local area or from one local area to another. This includes adjustments of local project funding levels to accommodate changes in vehicle or equipment requirements, including number and type of vehicles and changes in operating costs;
(5) Add equipment or property transferred from a subrecipient to another subrecipient listed in the program of projects, regardless of whether the items were originally funded from a different grant.
(6) Transfer funds designated for intercity bus projects within the program of projects for use in other intercity bus projects, or to other projects if more than the required percentage has been allocated for intercity bus projects and the transfer of funds to another project would not reduce the intercity funding below the required percentage; and
(7) Transfer funds designated for RTAP projects within the program of projects for use in other RTAP projects.
b. Revisions Requiring Notification to FTA, But Not FTA Approval
. The state may make the following revisions after notifying FTA:
(1) Allocate Category C funds to new operating assistance projects or capital projects under $250,000, within the period of availability of funds, provided the prospective subrecipient is in compliance with all applicable Federal requirements, and the state has no information suggesting otherwise;
(2) Create new operating assistance projects or capital projects under $250,000 with funds subtracted from other projects within the approved program, or assign transferred equipment or property to a recipient not previously listed in the program of projects, provided the prospective subrecipient is in compliance with all applicable Federal requirements, and the state has no information suggesting otherwise; and
(3) Delete or reduce a project by more than $250,000 or 10 percent of the total program of projects, whichever is greater.
c. Revisions Requiring FTA Approval. The state may make the following revisions to an approved program of projects only after obtaining approval from FTA:
(1) Allocate more than over $250,000, or 10 percent of the total of the program of projects, whichever is greater, for any new capital project or for any project that is not a categorical exclusion under NEPA;
(2) Change intercity bus projects if the change would result in less than fifteen percent of the annual apportionment being designated for intercity projects. This change can only be made if the Governor certifies that the intercity bus transportation needs of the state are adequately met, as described in Chapter VII; or
(3) Advance to Category A any prospective subrecipient with serious questions of compliance with Federal requirements remaining unresolved.
d. Update of Program of Projects. The most recently updated program of projects submitted by the state to FTA in its annual program status report or in the course of making revisions will be considered the approved program of projects, incorporated by reference in the grant agreement. Only the addition of Federal funds or a change in the scope of the approved program of projects requires amendment of the grant agreement.
e. FTA's Right to Defer Section 5311 Assistance. If serious questions are raised about the compliance of any subrecipient or project with civil rights requirements, FTA reserves the right to require the state to defer provision of Section 5311 funds to that subrecipient or project until FTA finds the subrecipient or project in compliance or expressly approves the expenditure of Section 5311 funds involving that subrecipient or project.
Chapter V: Application Instructions
1. GENERAL. The application procedures are intended to give grantees maximum flexibility in the use of funds for eligible project purposes. The program of projects and budget format provides for a single, annual application. This chapter presents the procedures the state and subrecipients should follow to apply for Section 5311 funds. Section 2, state application, sets forth guidelines for the contents of a state agency's application to FTA. Section 3, subrecipient application, sets forth minimal guidelines for the subrecipient's application to the state agency. Subrecipients should refer to the state management plan and/or state application instructions for additional application requirements established by the state.
FTA has developed an electronic award and management system. Beginning in FY 1999, electronic submission and approval of grant applications will be the norm. Grantees may obtain guidance and training for use of the electronic system by contacting the FTA regional office. The application instructions in this circular give program guidance for the content of the grant application. Instructions for use of the electronic system are available separately.
2. STATE APPLICATION.
a. Office of Management and Budget (OMB) Budget Information Forms and Instructions. FTA's electronic application includes the content of OMB Standard Form 424.
b. Program of Projects. Exhibit A provides a sample format for the information required in an annual Section 5311 program of projects. The applicant should include RTAP and intercity bus funds as separate sections within the program of projects. The state may substitute alternative formats developed for state use so long as all the information elements are included in a form FTA can use. The applicant can import text files or cut and paste text into the electronic application as part of the project description. FTA anticipates future enhancements to the electronic system to improve retention of formatting of imported text or allow importation of spreadsheets.
See Chapter IV for specific instructions for development of the program of projects, including the categories in which projects may be approved.
c. Project Budget. The electronic application includes a line item budget for the entire grant. This budget combines the details of all the projects listed in the program of projects (regardless of category of project readiness), through the use of standard activity line item codes, which facilitate FTA program reporting and analysis. The capital codes in particular provide a detailed picture of vehicles and equipment purchased with Federal funds. Exhibit C contains a table of codes currently in use. The FTA regional office will inform grantees of any changes in the codes.
In the project budget, activity line items are grouped under the label "scope." The use of the term "scope" in the electronically prepared and approved project budget does not alter the conditions for revisions to programs of projects described in Chapter IV, paragraph 6. FTA uses the same format for all of its grant programs, and some of the terms used have slightly different meanings in other programs. When there is a discrepancy, the interpretation in this circular prevails. Exhibit B includes a worksheet for preparing a Section 5311 project budget and an example of the project budget format.
d. Milestone Schedule. As part of its application the state submits milestones that indicate the completion date for significant project events. At a minimum FTA requires milestone dates for certain vehicle procurements, for the final expenditure of operating assistance, and for the commitment of all Category C funds to identified projects. The grantee must also indicate the estimated date when the entire grant will be completed and ready for close-out. State Certifications and Assurances. In order to receive a grant under Section 5311, the designated state agency must annually assure FTA that certain requirements have been met or will be met by the state and subrecipients. The state should maintain adequate files documenting the basis for all assurances which it makes. Each fiscal year, FTA publishes the required certifications and assurances in the Federal Register at the time the annual apportionment notice is issued, and updates the certifications and assurances in the electronic award and management system. The notice indicates which items apply to all grantees or to certain kinds of awards, and which are required for grants under specific sections. The state submits the appropriate certifications and assurances electronically each fiscal year for all grants expected to be made during that fiscal year. See the current year notice for a list of required certifications and assurances. Exhibit D includes excerpts from the FY 1998 notice as a sample of what may be required. Grantees should use the most recent version FTA has issued. State Intergovernmental Review. One of the published certifications and assurances satisfies the certification requirement of FTA Circular 9500.1, "Intergovernmental Review of FTA Planning, Capital and Operating Programs and Activities." States are not required to submit the actual state clearinghouse documentation. In some states development of the STIP satisfies this requirement. The application should indicate how the state meets the requirement.
e. Certification to Department of Labor (DOL). The state must certify to the DOL that each subrecipient has agreed to the special warranty of employee protective arrangements for the nonurbanized formula program. In the case of projects listed in Category A, the state must make this certification prior to grant approval. Note that this certification is sent to DOL, not to FTA. See Chapter X for further discussion of the labor protection requirements. Exhibit F shows the text of the special warranty.
3. SUBRECIPIENT APPLICATION TO THE STATE. Before a state agency can provide FTA with the required assurances in the preceding subparagraphs, the state agency should receive sufficient documentation from all subrecipients to support the assurances. In addition to any other documentation the state agency may require, the state should receive from each subrecipient, either as a one-time submission or with each application, as appropriate, the following:
a. Project Description. The application should include sufficient information for the state to evaluate the eligibility of the proposed project, and the subrecipient's legal, financial, technical, and managerial capability to implement the project, and maintain any project property.
b. Certifications and Assurances. The subrecipient must sign the certifications and assurances required of each grantee (except those applicable only to direct grantees), and all those applicable to the particular project (for example, the lobbying certification if the application exceeds $100,000). While most of the certifications and assurances required of subrecipients need only be submitted once to the state and updated as necessary, the state may want to use FTA's annual notice as a model and obtain certifications and assurances from subrecipients annually using the most recent FTA notice to ensure that all required certifications and assurances are obtained and are worded accurately.
c. Coordination. The application should describe how FTA assisted services are or will be coordinated with social service agencies and private transportation providers in the service area. TEA-21 requires that to the extent feasible, governmental agencies and nonprofit organizations that receive assistance from other Federal agencies for nonemergency transportation services shall participate and coordinate with FTA recipients in the design and delivery of transportation services and be included in the planning for those services.
d. Public Involvement. Section 5323(b) requires all subrecipients of capital assistance to afford the opportunity for a public hearing, to hold that hearing unless no one requests one, to consider the economic, social, and environmental effects of the project, and to find the project consistent with official plans for the area. The application should document that this requirement has been met (including a copy of the published notice, hearing record, if one was held, and summary of efforts to involve the private sector to the maximum extent feasible, etc.). For subrecipients within the planning boundary of an urbanized area, this requirement may be satisfied through the local TIP public participation process. There is no public hearing requirement for operating assistance grants.
e. Civil Rights. If any lawsuits or complaints have been received or acted on, or compliance reviews conducted, since the applicant's most recent Title VI submission, these and other relevant civil rights activities should be described in the application. For construction projects that are not categorical exclusions, the documentation for the environmental review process should include information about social and economic impacts.
f. Labor. The application must document that the subrecipient has agreed in writing to accept the terms and conditions of the special warranty of employee protective arrangements for the Section 5311 program, or made alternative arrangements agreed to by DOL, and that the existing agreement is still valid and labor conditions have not changed. See Chapter X for details about labor protection requirements.
Chapter VI: Program Management and Administrative Requirements
1. GENERAL. The basic grant management requirements for state and local governments are contained in the Department of Transportation (U.S. DOT) regulations, "Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments," 49 C.F.R. Part 18, which is referred to as the "common rule." The comparable U.S. DOT rule for private nonprofit organizations is "Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations," 49 C.F.R. Part 19. The provisions of these rules apply except where inconsistent with Federal statutes or authorizing legislation.
The common rule identifies three areas in which the administrative requirements for state grantees and their subrecipients which are public bodies may differ from Federal requirements for local government grantees: equipment management, procurement, and financial management systems. The basic intent in these areas is to shift the emphasis from national uniformity to uniformity of procedures and requirements within a state, in order to provide greater flexibility to the states in standardizing the management of related state and Federal programs. The three areas are discussed in detail later in this chapter. Part 19 does not allow states to pass down state procedures in these three areas to subrecipients which are nonprofit organizations as Part 18 permits for subrecipients which are public bodies. However, so long as the state procedures are not inconsistent with Part 19, the state may apply the same procedures for all its subrecipients. The state may use procedures which are more restrictive than Part 19, but in the case of nonprofit organizations, state procedures may not be more permissive than Part 19.
Unless an issue is specifically addressed in this circular or in other FTA guidance specific to the Section 5311 program, FTA Circular 5010.1C, "Grant Management Guidelines," including any changes thereto, which provides guidance for other FTA programs, should be used as guidance for project management issues not unique to Section 5311.
The state must enter into a written agreement with each subrecipient stating the terms and conditions of assistance by which the project will be undertaken and completed.
2. EQUIPMENT MANAGEMENT.
a. General. Under the common rule, states use, manage, and dispose of equipment acquired under a Section 5311 grant in accordance with state laws and procedures. Common rule procedures and requirements for public body recipients that are not states and their subrecipients are more explicit. States are free to adopt the procedures established for other public body subrecipients or use them as a guide in developing state procedures for equipment use, management, and disposition, but are not required to do so. States may use the same procedures for private nonprofit subrecipients as for public body subrecipients, so long as those procedures are consistent with 49 C.F.R. Part 19.
b. Transfer of Property. Section 5311(i) permits a state to transfer facilities and equipment acquired with assistance under Section 5311 to any subrecipient eligible to receive assistance under 49 U.S.C. Chapter 53 with the consent of the subrecipient currently in possession of such facilities or equipment, if the facility or equipment will continue to be used in accordance with the requirements of Section 5311. This provision complements the state's flexibility under the common rule to manage equipment and extends the state's flexibility in the management of facilities, including real property. The entity receiving equipment or facilities under this provision to provide Section 5311 service must comply with all the state and Federal requirements for Section 5311 recipients, including acceptance in writing of the special Section 5333(b) warranty for Section 5311. The names of the entities involved in the transfer of equipment or real property, along with a description of the equipment or real property transferred should be included in a new or revised program of projects. The transfer may be shown in the program of projects for any active grant. It does not have to be in the grant under which the equipment or property was originally funded.
In addition, Section 5334(g) allows facilities and equipment and other assets (including land) which are no longer needed for the purposes for which they were acquired to be transferred to any public body to be used for any public purpose with no further obligation to the Federal government, if authorized by the Secretary.
c. Vehicle Useful Life and Replacement Standards. In keeping with the intent of the common rule that states be given greater flexibility in managing and disposing of equipment, FTA elects not to apply to Section 5311 and 5310 its policies regarding useful life standards for vehicles, vehicle replacement, or the requirement to use the straight line depreciation method for determining fair market value and FTA reimbursement. Instead, FTA holds states responsible for establishing and implementing their own rolling stock requirements for all categories of vehicles acquired under the 5311 or 5310 programs. For these programs only, FTA permits state grantees to do the following:
(1) establish their own minimum useful life standards for vehicles;
(2) use their own procedures for determining fair market value; and
(3) develop their own policies and procedures for maintenance and replacement of vehicles. Maintenance requirements and insurance coverage must be adequate to protect the Federal interest in the vehicle within the useful life determined by the state.
d. Disposition. States and their subrecipients should follow state laws and procedures for disposing of equipment. States are not required to return to FTA proceeds from the disposition of equipment, regardless of the fair market value at the time the equipment is sold, but should follow their own procedures regarding the use of proceeds, so long as the proceeds remain in use for mass transit purposes. This applies to all equipment currently in use which was purchased with Section 5311 funds. This blanket disposition instruction satisfies the provision of 49 C.F.R. Part 19 requiring private non-profit organizations to seek disposition instructions from the Federal awarding agency.
3. PROCUREMENT. When procuring property, supplies, equipment or services under an FTA grant, the state will follow the same policies and procedures it uses for procurements from its non-Federal funds, to the extent permitted by Federal statutes and regulations. While the Federal threshold for small purchases is currently $100,000, the state may set a lower threshold for itself and its subrecipients. All public body subrecipients follow state procurement procedures. However, because of differences between 49 C.F.R. Part 18 and 49 C.F.R. Part 19, FTA third party contracting requirements are fewer for states and subrecipients that are local or tribal governments than for subrecipients that are private nonprofit organizations. For the sake of consistency, the state may choose to use the more detailed FTA requirements included in FTA Circular 4220.1D for all subrecipients as part of its state procurement procedures.
In some cases, a state may choose to grant Section 5311 assistance to a subrecipient through an intermediary subrecipient. For example, for public policy reasons, the state might pass funds to a nonprofit organization through a local public body. The arrangement between the first tier and second tier subrecipient is not a third party contract if the ultimate subrecipient would otherwise be eligible under Section 5311 to receive funds directly from the state and the ultimate subrecipient intends to use those funds to pursue its own nonurbanized area transit project.
Procurement procedures used by states and their subrecipients, however, must comply with the following specific Federal procurement requirements:
a. States. State procurement practices must at a minimum comply with five specific Federal requirements contained in FTA Circular 4220.1D. These include a five year limitation on contract period of performance, a requirement for full and open competition, a prohibition against geographic preferences, the use of Brooks Act procedures for procurement of architectural and engineering services if the state has not adopted a statute governing procurement of such services, and inclusion in contracts of all Federal clauses required by Federal statutes and executive orders and their implementing regulations. These clauses are identified in specific Federal regulations cited in FTA's Master Agreement incorporated by reference into the grant agreement. Additional technical assistance for third party contracting is available in FTA's "Best Practices Procurement Manual."
b. Subrecipients that are Public Entities. Subrecipients that are public entities such as local or Indian tribal governments must comply with the same Federal requirements governing state procurements. States are responsible for ensuring that subrecipients are aware of and comply with Federal requirements.
c. Subrecipients that are Private Nonprofit Organizations. Subrecipients that are private nonprofit organizations must comply with FTA procurement requirements contained in FTA Circular 4220.1D. States are responsible for ensuring that private nonprofit subrecipients are aware of and comply with these additional requirements.
Other requirements related to procurement, including bus testing, Buy America, pre-award and post-delivery reviews, and debarment and suspension, are discussed in Chapter X. The need to include disadvantaged businesses in contracting opportunities is discussed in Chapter IX.
4. SATISFACTORY CONTINUING CONTROL. When capital equipment or facilities are acquired, built, or improved for use by any entity in nonurbanized area public transportation or intercity transportation, provisions must be made to assure satisfactory continuing control of that capital equipment and facilities. While the state agency serving as the FTA grantee may delegate these responsibilities to another entity, the state is ultimately responsible for compliance with this requirement.
5. FINANCIAL MANAGEMENT.
a. State Financial Management Systems. The common rule requires a state to expend and account for grant funds in accordance with state laws and procedures for expending and accounting for its own funds. Fiscal control and accounting procedures of the state, as well as its subrecipients and cost-type contractors must be sufficient to:
(1) Permit preparation of reports described in this circular and reports necessary to comply with other program and statutory requirements; and
(2) Permit the tracing of funds to a level of expenditures adequate to establish that such funds have not been used in violation of the restrictions and prohibitions applicable to the program.
b. FTA Payment Procedure. FTA makes all payments by electronic funds transfer, regardless of the money amount involved. Most payments are made under the Electronic Clearing House Operation (ECHO) system, by means of a control number assigned to the state. The state agrees to comply with the ECHO requirements contained in the Treasury Regulations, 31 C.F.R. Part 205, "Rules and Procedures for Funds Transfers," and as established by the "Guidelines for Disbursements" set forth in FTA's ECHO system operations manual. In general:
(1) The state may initiate cash drawdowns only when actually needed for immediate disbursement required for project purposes. The state must disburse the funds drawn down according to their Treasury-State Agreement or Subpart B of 31 C.F.R. Part 205. The state's access to the ECHO system may be revoked or suspended, or other remedies may be invoked, if the state fails to expend the Federal funds or to return the funds to FTA within a reasonable period, or is unwilling or unable to establish procedures that will minimize the time elapsing between cash advances and the disbursement.
(2) Costs incurred and available balances are reported annually on an accrual basis, on the Financial Status Report in FTA's electronic award and management system.
(3) The state agrees to provide for control and accountability for all project funds consistent with Federal requirements and procedures for use of the ECHO system.
(4) The state may not draw down funds for a project in an amount that would exceed the sum obligated by FTA or the current available balance for that project.
(5) The state shall limit drawdowns to eligible project costs and ensure that subrecipients also follow applicable financial requirements.
c. State Financial Records. FTA does not maintain detailed financial records on individual projects within a program of projects. Financial records, supporting documentation, and all other records pertinent to a grant must be retained by the designated state agency (and its subrecipients) and must be made readily available to authorized representatives of the U.S. Department of Transportation and the Comptroller General of the United States for a period of three years. The retention period starts on the date the state electronically submits the final Financial Status Report (SF-269A). If any litigation, claim or audit is started before the expiration of the three-year period, the records must be retained beyond three years, until all litigation, claims, or audit findings involving the records have been resolved.
The state's financial records should adequately document the computation of the Federal share and the provision of the required local share for each kind of project. The eligibility of any ADA, clean air, or bicycle projects for which the increased Federal share is claimed should be adequately documented.
6. ALLOWABLE COSTS. OMB Circular A-87 provides the Federal guidelines for allowable costs for recipients which are public bodies. OMB Circular A-122 provides comparable guidance for nonprofit organizations. Expenses such as indirect costs or payments to a self-insurance fund must be documented appropriately. The restrictions on advertising and public relations in A-87, Attachment B, Section 2 permit advertising and public relations for "specific purposes necessary to meet the requirements of the Federal award." Similar provisions are also contained in A-122, Attachment B, Section 1. Transit marketing and promotion are allowable project costs under these provisions, since transit ridership is the ultimate purpose of the Federal grant.
7. AUDIT. State agencies are responsible for: ensuring that audits are performed pursuant to the requirements of OMB Circular A-128, "Audits of State and Local Governments" or OMB Circular A-133, "Audits of Institutions of Higher Education and Other Non-Profit Institutions" resolving audit findings; and bringing problems to FTA's attention. FTA has not required an annual financial audit of a subrecipient when assistance is provided solely in the form of capital equipment procured directly by the state even if the amount of FTA funds the state passes to a particular subrecipient does not trigger the requirement for an A-133 audit, the state may wish to review A-133 audit reports prepared for subrecipients that are required to be audited because the total federal funds from all sources exceed the threshold (currently $300,000). At a minimum states should require subrecipients to bring to the attention of the state any audit findings relevant to their use of FTA funds.
OMB has issued an audit compliance supplement for FTA grants. It should be noted, however, that while the guidance contained in the supplement may be helpful to auditors, it is specific to the Section 5307 and 5309 programs, and not all of the provisions are applicable to the Section 5311 program. The state may wish to make FTA C 9040.1E and relevant state program guidance available to auditors of its subrecipients.
8. REAL PROPERTY. Real property acquisition standards are included in FTA Circular 5010.1C, "Grant Management Guidelines." Subrecipients may use the state's staff appraisers to prepare required independent appraisals.
9. CONSTRUCTION MANAGEMENT AND OVERSIGHT. The responsibility for construction management and oversight lies with the state. FTA does not approve design plans for construction projects.
10. REPORTING REQUIREMENTS.
a. Annual Program of Projects Status Reports. By October 31 each year, the state should submit to FTA a program status report for each active grant, covering the 12-month period ending September 30. Status reports are intended to meet minimal program information needs at the regional and national levels. Reports should include an updated program of projects for each approved grant which contains active projects. The updated program of projects should reflect revised project descriptions, changes in projects from one category to another, and adjustments within budget categories. The updated program of projects can be imported as text into the project summary section of the electronic status report. (FTA anticipates enhancements to the electronic award and management system which will improve retention of formatting of imported text and allow spreadsheets to be imported.) If revisions to the program of projects result in changes to the line item budget for the grant, these changes should be submitted as budget revisions. For activity line items for which milestones were required at the time of grant application (for example, for vehicle procurements, construction projects, and program reserve), the grantee should enter revised milestone dates as part of the annual report. If the estimated completion date for the grant has changed, the revised date should be entered. Significant civil rights compliance issues occurring during the year (such as Title VI, EEO, or DBE complaints against the state or subrecipients) should be addressed in the annual status report. In addition, the state may report notable accomplishments or problems involving Section 5311 subrecipients.
b. Financial Status Report. The state must submit electronically an annual Financial Status Report for each active grant, for the period ended September 30. For the purpose of this report, funds are considered encumbered when agreements are signed with subrecipients. Reports should be prepared using the accrual method of accounting.
c. DBE Reports. Annually, states must submit a statewide DBE program including goals for the utilization of DBEs by the state, if it is over a specified funding threshold, and by subrecipients which exceed the threshold. Semi-annually for the entities required to submit a DBE program with goals, and annually for others, the state must submit contracting activity reports for itself and its subrecipients. Detailed requirements are described in Chapter IX.
11. CLOSEOUT. States should initiate project closeout with subrecipients within 90 days after all funds are expended and all work activities for the project are completed. The states should similarly initiate program of project closeout with FTA within 90 days after all work activities for the program of projects are completed. A final Financial Status Report (SF 269A), final budget and final program of projects are required at the time of closeout all are submitted electronically.
FTA expects grants awarded for a specific program of projects to be completed within a reasonable, specified time frame. Although this circular provides the state a great deal of flexibility in developing and subsequently revising programs of projects, it is not FTA's intent that grants be continually revised or amended in ways which will excessively prolong the life of the grant, and consequently result in a large number of active Section 5311 grants. If small amounts of funds remain in an inactive grant, the state should request that the funds be deobligated and the project closed out. If the deobligated funds are still within their period of availability, FTA can reobligate the funds in a new grant to the state along with other currently available funds. Otherwise the deobligated funds lapse to the state and are reapportioned by FTA among all the states in a subsequent year.
12. PROGRAM MANAGEMENT DOCUMENTATION AND REVIEW.
a. State Management Plan. The state management plan (SMP) is a document which describes the state's policies and procedures in administering the Section 5311 program. The SMP required for the Section 5310 program may be included in the same document. All states are required to have an approved SMP on file in the FTA regional office. Additions or amendments to the SMP must be made and submitted to FTA for approval whenever a state significantly changes its management of the program, or when new program management requirements are imposed by FTA. Changes may be required as the result of a state management review by FTA. Guidance on the contents of the SMP is included in Chapter XI.
b. FTA Management Review. FTA's administration of Section 5311 results in relatively little Federal involvement in the day-to-day program activities or the review of individual applications from subrecipients. In order to ensure that the program objectives are being carried out, the FTA regional office, with contractor assistance, conducts periodic state management reviews every three years or as circumstances warrant. The review includes an inspection of documentation on file at the regional office, a visit to the state offices to examine the procedures the state uses in administering the program, and local site visits. The review assesses the accuracy and adequacy of the SMP, and may result in recommendations for changes to the SMP. Preliminary findings are presented at an exit conference, followed by a draft report. The state has an opportunity to comment on the report and to take corrective actions before a final report is issued. The regional office follows up on corrective actions required in the final report.
FTA periodically conducts State Management Review seminars to help states understand the Federal requirements being reviewed and to provide technical assistance. Contact the regional office for a current schedule of seminars.
FTA also conducts more specific compliance reviews in particular areas, for example financial management, procurement, drug and alcohol testing compliance, and the various aspects of civil rights compliance, usually in response to a risk assessment or other indication of a possible problem. Reviews of subrecipients are coordinated with the state.
Chapter VII: Intercity Bus
1. PROGRAM SUMMARY. Section 5311(f) requires each state to spend fifteen percent of its annual Section 5311 apportionment "to carry out a program to develop and support intercity bus transportation," unless the Governor certifies that "the intercity bus service needs of the state are being met adequately." The required percentage applies only to the amount of FTA's announced annual apportionment of Section 5311 funds to the state, not to any funds the state subsequently transfers to its nonurbanized area formula program from another program
2. NATIONAL OBJECTIVES. In many states, intercity bus service is a vital link between otherwise isolated rural and small urban communities and the rest of the nation. In the 1980's the major intercity carriers abandoned many less productive routes. Patronage generated in rural and small urban areas, however, appears to be important to the continuing viability of the remaining intercity routes. One objective of the funding for intercity bus service under Section 5311, therefore, is to support the connection between nonurbanized areas and the larger regional or national system of intercity bus service. Another objective is to support services to meet the intercity travel needs of residents in nonurbanized areas. A third objective is to support the infrastructure of the intercity bus network through planning and marketing assistance and capital investment in facilities. FTA encourages states to use the funding under Section 5311(f) to support these national objectives as well as priorities determined by the state.
3. GOVERNOR'S CERTIFICATION. A state is not required to expend the specified percentage of its apportionment for an intercity bus program "in a fiscal year in which the chief executive officer of the state certifies to the Secretary of Transportation that the intercity bus service needs of the state are being met adequately."
The statutory provision for certification by the chief executive officer implies a statewide assessment of intercity bus service currently available and of any existing needs. The legislative history indicates that the assessment of intercity bus needs may be made "relative to other rural needs in the state." The state should make available some opportunity for obtaining public comment, particularly from existing private intercity bus operators, before deciding to certify that the needs are adequately met rather than expending the required percentage of funds. The state should document in the state management plan any process that it develops for assessing statewide needs or seeking public comment.
A state must certify for each fiscal year for which it does not intend to use fifteen percent of its Section 5311 apportionment for intercity bus service, but may include more than one year in a single signed certification. If the state determines that expenditure of some amount of funds less than the full fifteen percent will result in needs being adequately met, it may submit a "partial" certification for the remainder of the fifteen percent and spend only the portion needed to ensure that the intercity bus needs are adequately met. If funds which have been obligated and assigned to intercity bus projects or reserved for intercity bus projects not yet selected are later determined not to be needed for intercity bus needs, or if prior year funds were withheld from obligation pending a decision on intercity bus needs, submission of a "retroactive" certification within the period of availability of the funds will permit the use of the prior year funds for other nonurbanized transit projects, subject to the notification and approval conditions described in Chapter IV. Any certification must be signed by the chief executive officer of the state or his or her duly authorized designee, and directed to the Federal Transit Administrator, with a copy to the regional office. FTA normally will not look behind a Governor's certification. The assurance the state makes as part of the annual certifications and assurances that it will meet the requirements of Section 5311(f) does not substitute for a certification by the Governor that the needs are adequately met.
4. STATE ROLE. The state implements Section 5311(f) as part of its management of the Section 5311 program. FTA encourages the state to look at the intercity bus transportation needs of the entire state and to work with neighboring states in order to adopt a program which will support a network of intrastate services and provide connections with a national network of interstate service. The state will provide available information to FTA or its contractors upon request to support a national evaluation of the implementation of Section 5311(f).
5. ELIGIBLE ACTIVITIES. Assistance under Section 5311(f) must support intercity bus service in rural and small urban areas. Section 5311(f) specifies eligible intercity bus activities to include "planning and marketing for intercity bus transportation, capital grants for intercity bus shelters, joint-use stops and depots, operating grants through purchase-of-service agreements, user-side subsidies and demonstration projects, and coordination of rural connections between small transit operations and intercity bus carriers." This listing does not preclude other capital and operating projects for the support of rural intercity bus service. For example, the state may provide operating assistance to a public or private nonprofit organization for the direct operation of intercity service after appropriate consideration of participation by private for-profit service providers. Capital assistance may be provided to purchase vehicles or vehicle related equipment such as wheelchair lifts for use in intercity service. Charter and tour services are generally not eligible for FTA assistance (see 49 C.F.R. Part 604).
FTA reminds states that 49 U.S.C. § 5323(a) requires the participation of private mass transportation companies to the maximum extent feasible in this and other FTA programs. Among the various types of projects in which private intercity bus operators may wish to participate are improvements to existing intercity terminal facilities for rural passengers, modifications to transit facilities to facilitate shared use by intercity bus and rural transit operators, operating assistance to support specific intercity route segments, and applications of Intelligent Transportation Systems (ITS) technology for coordinated information and scheduling.
6. ELIGIBLE RECIPIENTS. FTA has generally allowed the state to pass through funds to local public bodies and to private nonprofit organizations as subrecipients, while requiring that assistance to private for-profit operators of transportation service be in the form of third party contracts. For the purpose of Section 5311(f) only, however, FTA permits states to pass through funds to private intercity bus providers in a subrecipient relationship. In some instances, certain intercity bus providers may be unwilling or unable to accept the terms and conditions the state applies to subrecipients and may prefer to maintain a contractual relationship, in order to isolate the remainder of their operations from Federal requirements related to a grant. The state may use either mechanism to provide assistance to private operators for intercity bus service. In either case, the state should use a merit based selection process to ensure that the private operator is qualified, will provide eligible service, can comply with Federal and state requirements, and is the best, or only, provider available to offer service at a fair and reasonable cost.
7. DEFINITION. For the purpose of this provision, FTA defines intercity bus service as regularly scheduled bus service for the general public which operates with limited stops over fixed routes connecting two or more urban areas not in close proximity, which has the capacity for transporting baggage carried by passengers, and which makes meaningful connections with scheduled intercity bus service to more distant points, if such service is available. (Urban area is defined very broadly in 49 U.S.C. § 5302(a)(16) as "an area that includes a municipality or other built-up place that...is appropriate for a local mass transportation system to serve individuals in the locality.") Schedule information for intercity service is typically maintained in the Official Bus Guide (Russell's Guide). Package express service may be included, if incidental to passenger transportation. Commuter service (service designed primarily to provide daily work trips within the local commuting area) is excluded from the definition. Intercity service is not limited by the size of the vehicle used or by the identity of the carrier. Air, water, and rail service are not included.
While much of the public transportation service assisted under Section 5311 covers large distances because of the nature of the areas served, not all long distance trips are included in the definition of intercity service. For example, service which provides extensive circulation within a region (in contrast to regular but infrequent service from a limited points in the community of origin to limited points in the destination community) is not considered intercity service, although it may be an eligible public transportation service. Similarly, service which only incidentally stops at an intercity bus facility among other destinations within the city at either end of a route which covers a long distance, without regard to scheduled connections, is eligible for Section 5311 assistance as public transportation, but is not an intercity feeder service. Likewise, commuter service is excluded because it is considered a local public transportation service, eligible for assistance under Section 5311 but not counting toward the required percentage for Section 5311(f).
8. FEEDER SERVICE. The "coordination of rural connections between small transit operations and intercity bus carriers" may include the provision of service which acts as a feeder to intercity bus service. The feeder service is not required to have the same characteristics as the intercity service with which it connects, as defined in paragraph 6, above. For example, feeder service may be demand responsive, while intercity service is by definition fixed route. Examples of eligible costs include marketing and extended hours of service in order to connect with scheduled intercity service. Where feasible, intercity bus feeder service may also provide access to intercity connections with rail or air service.
9. ADA REQUIREMENTS. A public entity operating or contracting for intercity bus service is not required to provide complementary paratransit service for individuals with disabilities who are unable to use the fixed route intercity bus service. Under ADA, commuter bus service is exempt by law from the requirement for complementary paratransit service. In its implementing regulation, DOT exempted certain other services from the complementary paratransit requirement because they are functionally like commuter bus service. Similarly, intercity bus service is functionally like commuter bus service in that the service is relatively infrequent and the distance between stops is great. Like commuter service, intercity bus service does not truly serve the entire corridor along which it passes. Fixed route feeder service provided by a public entity, however, must be evaluated on a case by case basis to determine if its characteristics are those of commuter service or of transit requiring complementary paratransit.
Vehicles acquired for use in intercity service or feeder service may be required to be accessible. (See 49 C.F.R. Part 37. The exception for over-the-road buses in the original rule applied only to private entities.) DOT recently issued (or will soon issue) a final rule regarding ADA accessibility requirements for private over-the-road bus operators.
10. FEDERAL SHARE. The Federal share for intercity projects is the same as for the Section 5311 program as a whole: 50 percent of the net cost for operations and 80 percent of the net cost for capital projects and project administration. State administration, planning and technical assistance in support of intercity bus transportation are eligible at 100 percent Federal share if applied against the cap on state administration expenses. The amount of Section 5311 funds used for planning for intercity bus transportation is not limited by the 15 percent cap on state administration. However, the Federal share of any planning assistance for intercity bus not included in the 15 percent allowed for state administration is limited to 80 percent of the planning costs.
11. CAPITAL PROJECTS IN URBANIZED AREAS. Use of Section 5311(f) funds for capital projects in urbanized areas is limited to those aspects of the project which can be identified as directly benefiting and supporting service to and from nonurbanized areas. These projects are to be included in both the metropolitan TIP and the STIP and follow the appropriate project selection requirements contained in the joint planning rule.
12. OBLIGATION OF FUNDS. In the absence of a certification from the Governor that intercity needs are adequately met, fifteen percent of the state's annual apportionment must be obligated for intercity bus transportation within the period of availability (three years).
a. Program of Projects. All projects in support of intercity bus service should be clearly identified and grouped together in the program of projects. Funds may be listed for specific projects in Category A or B, or reserved for intercity use in Category C. (Note, however, that funds in Category C must be advanced to identified projects within the period of availability.) Alternately, the percentage required to be expended for intercity bus transportation may be withheld and not obligated in a given year, if it is to be obligated at a later date along with funds from subsequent year's apportionments. The intention to withhold funds for later obligation should be noted in the state's application to FTA.
b. Budget. In the project budget, the state should separately group the projects that are dedicated to the support of intercity service under the scope code 634, "Intercity Bus Transportation." Any activity code may be used under scope code 634 to describe the intercity projects (for example, capital, operating, and planning projects, or program reserve for intercity bus projects not yet identified).
c. Labor Protections. All Section 5311 operational projects, including intercity bus projects, require agreement in writing to the terms and conditions of the standard Section 5333(b) special warranty for the Section 5311 program, or substitute arrangements approved by the Department of Labor.
d. Enforcement of Compliance. If the state does not ultimately expend the funds for intercity service, the funds will lapse to the state. If a state chronically fails to comply with the requirement to fund projects for intercity bus needs within the period of availability, FTA may impose other sanctions. Within the parameters described in this chapter, FTA will rely on the state's determination of which projects support intercity bus transportation.
13. OVER-THE-ROAD BUS ACCESSIBILITY INCENTIVE PROGRAM. TEA-21 included a new program to assist operators of over-the-road buses comply with the capital and training requirements of the anticipated DOT rule on ADA accessibility for over-the-road buses. This funding is separate from Section 5311 funding and is administered through a national solicitation for applications from operators of over-the-road buses. The Federal share is fifty percent. The grants are subject to the terms and conditions applicable to recipients of Section 5311(f). Beginning in FY 1999, assistance is available to operators of over-the-road buses used substantially or exclusively in intercity, fixed route over-the-road bus service. In FY 2000 and thereafter, assistance will also be available to operators of over-the-road buses in other service, including local commuter, charter and tour service. This new program may supplement and/or complement assistance the states provide to intercity bus operators through Section 5311(f).
14. SURFACE TRANSPORTATION PROGRAM ELIGIBILITY. TEA-21 modified eligibility under the Surface Transportation Program (STP) to include "vehicles and facilities, whether publicly or privately owned, that are used to provide intercity passenger service by bus." The state may transfer these funds to Section 5307 or 5311 to supplement assistance provided under 5311(f).
Chapter VIII: Rural Transit Assistance Program
1. PROGRAM SUMMARY. Section 5311(b)(2) authorizes the Secretary "to make grants and contracts for transportation research, technical assistance, training and related support services in nonurbanized areas." The Rural Transit Assistance Program (RTAP) provides a source of funding to assist in the design and implementation of training and technical assistance projects and other support services tailored to meet the specific needs of transit operators in nonurbanized areas. RTAP has both state and national program components. The state program provides an annual allocation to each state to develop and implement training and technical assistance programs in conjunction with the state's administration of the Section 5311 formula assistance program. The national program provides for the development of information and materials for use by local operators and state administering agencies and supports research and technical assistance projects of national interest.
2. PROGRAM OBJECTIVES. The objectives of RTAP are:
a. to promote the safe and effective delivery of public transportation in nonurbanized areas and to make more efficient use of public and private resources;
b. to foster the development of state and local capacity for addressing the training and technical assistance needs of the rural/small urban transportation community;
c. to improve the quality of information and technical assistance available through the development of training and technical assistance resource materials;
d. to facilitate peer-to-peer self help through the development of local networks of transit professionals;
e. to support the coordination of public, private, specialized, and human service transportation services; and
f. to build a national database on the nonurbanized segment of the public transportation industry.
3. FUNDING AND ALLOCATIONS.
a. Authorization. TEA-21 authorizes RTAP funding of not less than $5,250,000 annually at 49 U.S.C. § 5338(d)(2)(C)(i), the source of funds allocated to the states. RTAP projects are also authorized under the National Planning and Research program at 49 U.S.C. § 5338(d)(C)(iv), the source of national RTAP projects.
b. Allocation. FTA allocates RTAP funds to the states based on an administrative formula. The RTAP formula first allocates $65,000 to each of the states and Puerto Rico, and $10,000 to the Insular Areas of Guam, American Samoa, Northern Marianas, and the Virgin Islands and then distributes the balance according to nonurbanized population of the states. FTA increased the minimum RTAP allocation from $50,000 to $65,000, effective in Fiscal Year 1999, to help the smaller states provide effective technical assistance to rural providers, especially new systems. The floor had been at $50,000 since the inception of the program in 1987 while funding for both RTAP and Section 5311 has increased. FTA announces the state RTAP allocations in the Federal Register along with the annual Section 5311 apportionments.
c. Funds Availability. State RTAP funds have the same period of availability as the Section 5311 formula funds, the fiscal year in which they are allocated plus two additional fiscal years. If the state does not obligate its allocation during this period, FTA reallocates the funds among all the states the following fiscal year.
d. Federal Matching Requirements. There is no Federal requirement for a local match for RTAP funds.
4. STATE PROGRAM DEVELOPMENT AND DELIVERY.
a. Eligible Assistance Categories. States may use RTAP funds to support nonurbanized transit activities in four categories: training, technical assistance, research, and related support services. Capital costs are allowable if the equipment is purchased to support one of the four eligible activities.
b. Program Development. The state should develop state RTAP activities through a process which provides maximum opportunity for the participation of nonurbanized transit operators, both public and private, in identifying and establishing priority areas of need for the training, technical assistance, research, and other support services, and in determining the appropriate mechanisms for delivering services. Establishment of a state RTAP advisory committee is one effective way to enable nonurbanized transit operators within the state to provide ongoing review and comment on the state's program development and delivery. The costs associated with implementing a state RTAP advisory committee are eligible RTAP expenses.
c. Program Delivery. States have broad discretion in deciding how best to provide assistance and implement projects under the state program. Delivery mechanisms include:
(1) assistance by in-house state staff;
(2) contracts with private consultants, universities, nonprofit organizations, state transit associations or other organizations of operators;
(3) contracts for administration of the state program or particular elements of it by the state FHWA sponsored Local Technical Assistance Program (LTAP) center (a resource with a demonstrated capacity for delivering training and technical assistance on highway topics that may represent a valuable in-state resource for transit as well);
(4) support of peer-to-peer networks of individuals to provide assistance to each other;
(5) interagency agreements with other state agencies, both within the state and in other states; and
(6) scholarships or tuition and expenses for individuals to attend training courses or workshops.
d. State Administrative Expenses. The state may not use state RTAP funds for state administrative or overhead expenses. However, any state administrative expense incurred in administering the state program may be covered by the fifteen percent of a state's annual Section 5311 formula apportionment available for state administration. The direct cost of using state staff to deliver RTAP services such as training or technical assistance is a program expense, not an administrative expense. Contracts with other organizations to administer and deliver RTAP services may include reasonable administrative and overhead costs.
e. RTAP Participation by Providers in Urbanized Areas. Providers of specialized transportation in urbanized areas, such as Section 5310 funded agencies, as well as public transit operators in small urbanized areas, have many of the same training and technical assistance needs as transit providers in nonurbanized areas. Participation by these providers in RTAP sponsored activities is permitted, at the state's discretion, so long as the activities are primarily designed and delivered to benefit nonurbanized transit providers. When urbanized area providers are more than incidental beneficiaries of an RTAP supported activity, the costs of the project should be allocated fairly between RTAP and other sources. RTAP should pay only for the proportion of the project costs attributable to the rural beneficiaries.
f. Pooling of State RTAP Funds. FTA encourages states to consider "pooling" or consolidating RTAP funds in order to support activities or projects that would be more effectively carried out on a larger scale than a single state. Such pooling could be done by two or more states within a region. Examples of activities that could be funded through pooled state RTAP funds include regional workshops or training courses, development of technical assistance information, and peer-to-peer assistance activities. Contributions to combined efforts such as the Multi-State Technical Assistance Project (MTAP) of the American Association of State Transportation Officials (AASHTO) are eligible only to the extent that they support RTAP objectives and benefit nonurbanized public transportation. FTA has determined that annual MTAP dues are an eligible state RTAP expense. Two methods are available to consolidate funding: (1) Each state involved can obligate funds for the joint project as part of the state RTAP program of projects in its Section 5311 grant and subsequently transfer the funds to the implementing organization through a contract or subagreement; or (2) Participating states may designate a single state to receive and administer all of the pooled funds. Each participating donor state then informs its FTA regional office in writing of the amount of state RTAP funds to be transferred to the allocation of the state administering the joint project. FTA will adjust the allocations accordingly and the administering state applies to FTA for the entire funding of the joint project as part of the state RTAP program of projects in its Section 5311 grant application.
5. PROGRAM MANAGEMENT. The state administers state RTAP funds in conjunction with its management of the Section 5311 formula assistance program. Application procedures and program administration and management requirements correspond to those for Section 5311 as described elsewhere in this circular.
6. NATIONAL PROGRAM. The purpose of the national RTAP is to support the state programs and develop information resources about rural public transportation. FTA generally determines national program activities with the advice of an eleven member project review board that includes both state administrators and local transit operators. FTA directly funds the national program through cooperative agreements and contracts. The national program currently includes the following elements:
a. development of training materials and information resources;
b. a national resource center, including a toll-free hotline for information and technical assistance (800-527-8279), on-line information on the Internet (http://www.ctaa.org), and automated Fax-on-demand availability of many printed materials;
c. a peer-to-peer technical assistance network;
d. regional and national meetings and workshops which support the state RTAPs and promote information exchange about rural public transportation; coordination with a parallel initiative supported by the U.S. Department of Health and Human Services under the name CTAP (Community Transportation Assistance Project); and
e. periodic updates of the national rural transit database and publication of directories of subrecipients under the FTA formula programs for other than urbanized areas and for the elderly and individuals with disabilities.
CHapter IX: Civil Rights Requirements
1. GENERAL. All recipients and subrecipients of FTA assistance are responsible for compliance with all civil rights requirements applicable to transit related projects, including the nondiscrimination prohibitions of 49 U.S.C. § 5332, and of Title VI of the Civil Rights Act of 1964, as amended; the Equal Employment Opportunity (EEO) requirements of Executive Order No. 11246 as amended by Executive Order No. 11375; FTA's Disadvantaged Business Enterprise program requirements; and the Federal protections for persons with disabilities of Section 504 of the Rehabilitation Act of 1973, as amended, and the Americans with Disabilities Act of 1990, as amended (ADA). The specific civil rights obligations of both the state and subrecipients of Section 5311 funds in each area of civil rights compliance are summarized in this chapter. For further guidance, refer to the Federal laws, regulations, and executive orders cited in this chapter. FTA's regional civil rights officers or headquarters civil rights staff will also provide current guidance on request.
2. REVIEW PROCESS. The designated state agency is responsible both for complying with civil rights requirements and for monitoring compliance by subrecipients of Section 5311 funding. The state submits required information to FTA and/or FHWA on a regular basis and maintains information submitted to the state by subrecipients. The state should include its process for monitoring subrecipients in the state management plan. FTA's periodic state management reviews include an assessment of whether or not the state appears to have adequate procedures in place to ensure compliance by itself and its subrecipients.
As the result of a state management review, a civil rights review, a complaint investigation, or a routine information submission, FTA may make a determination of compliance or probable noncompliance. If FTA makes a finding of probable noncompliance, technical assistance is provided to resolve outstanding issues informally. If voluntary compliance is not achieved, other administrative remedies may be considered. FTA's approval of a state's program of projects does not constitute unconditional approval of each prospective subrecipient or project within that program, as explained in Chapter IV, paragraphs 3 and 6. FTA reserves the right to instruct the state to defer provision of Section 5311 funds to any subrecipient whose civil rights compliance comes into question until FTA finds the subrecipient in compliance satisfactory to FTA.
3. NONDISCRIMINATION. 49 U.S.C. § 5332 states that "a person [defined broadly] may not be excluded from participating in, denied a benefit of, or discriminated against under, a project, program, or activity receiving financial assistance [from FTA] because of race, color, creed, national origin, sex, or age." The statute gives FTA responsibility and authority for enforcing compliance with this provision and Title VI of the Civil Rights Act of 1964, as amended, by withholding financial assistance or referring the matter for civil action by the Attorney General.
4. TITLE VI PROGRAM REQUIREMENTS. Title VI of the 1964 Civil Rights Act, Section 601, states:
No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.
FTA specifies both general requirements and program specific requirements for Title VI compliance. The following requirements supersede conflicting requirements of FTA guidance issued before publication of this circular.
a. DOT and FTA Title VI Standard Assurance. The state submits its assurances to FTA and retains those it has received from subrecipients. While these are one-time assurances, the requirement may also be satisfied by annual signing of the nondiscrimination assurance included in FTA's notice of certifications and assurances.
b. General Requirements. The state meets the general requirements by submitting the following information to FTA. Each subrecipient must file the following information with the state. The states and subrecipients must update this information at least every three years. The state may wish to require it with each subrecipient application.
(1) A concise description of any lawsuits or complaints alleging discrimination in service delivery filed against the subrecipient within the past year together with a statement of status or outcome of each such complaint or law suit;
(2) A summary of all civil rights compliance review activities conducted in the last three years. (3) An analysis of any environmental and or social economic impacts as the result of proposed construction projects, including the impact on minority communities. This information is required only for those projects which do not qualify as a categorical exclusion in the environmental process.
c. Program Specific Requirements. The state management plan should include the following documention:
(1) A description of the process by which the state develops the annual program of projects submitted to FTA as part of its Section 5311 grant application, especially the method used to ensure fair and equitable distribution of funds, including to Native American tribes where present.
(2) A description of the state's efforts to assist subrecipients in applying for Section 5311 funds, especially any efforts made to assist minority applicants.
(3) A description of the state's criteria for selecting transit providers to participate in the program, especially its efforts to include subrecipients serving significant minority populations.
(4) A description of the state's ongoing process to monitor subrecipients' compliance with Title VI, such as ongoing site visits to each subrecipient, review checklists, etc.
5. EQUAL EMPLOYMENT OPPORTUNITY REQUIREMENTS. The state is responsible both for its own compliance and for assuring FTA that all subrecipients are in compliance with FTA's EEO objectives, in accordance with FTA requirements. If the state or any subrecipient meets the threshold specified in that circular (receipt of $1,000,000 or more in the previous Federal fiscal year, and 50 or more mass transit related employees) it must submit an EEO program. The state may require any documentation it deems necessary from subrecipients to ensure that they do not discriminate in employment on the basis of race, color, creed, national origin, sex, age, or disability. For state departments of transportation and state agencies, DOT, through a memorandum of understanding, has designated FHWA to receive EEO programs. Subrecipients which are required to submit an EEO program should submit the program to the state rather than to FTA or FHWA. FTA will review subrecipient programs during a state management review or other compliance review of the state.
6. DISADVANTAGED BUSINESS ENTERPRISE PROGRAM REQUIREMENTS. FTA recipients must take necessary and reasonable steps to ensure that disadvantaged business enterprises have the maximum opportunity to compete for and perform contracts. Certain applicants for FTA funds are required to submit a DBE program and set transit DBE goals.
a. The state is responsible for informing all subrecipients of their responsibility to make a reasonable effort to use DBE firms, providing information to the subrecipients about the availability of such firms, monitoring subrecipient contracting activity for DBE compliance, and reporting to FTA at required intervals on contracting activities. .
b. Applicants meeting either of the following thresholds are required to prepare and submit DBE programs and to set and submit transit goals for DBE participation:
(1) Applicants for funds in excess of $250,000 exclusive of transit vehicle purchases under Sections 5309, 5307, 5310, and 5311; or
(2) Applicants for planning funds in excess of $100,000 under Sections 5303, 5313, or 5307.
For states, the thresholds apply to all FTA funds the state retains. For subrecipients, the thresholds apply to all FTA funds.
The state meets the program requirement as part of the state DOT's DBE submission to FHWA. Subrecipients submit DBE programs to the state. FTA will look at subrecipient programs during a state management review or other compliance review of the state. In special cases, such as the construction of a facility by a subrecipient that normally does not exceed a threshold, FTA may allow a project-specific DBE program in lieu of a standard program.
The state must submit a transit DBE goal to FTA if either the state or any subrecipient applies for funds in excess of a threshold. In setting a DBE goal, the state needs to include only the contracting opportunities of entities applying for funds in excess of threshold amounts. States file contracting activity reports with the FTA regional office semi-annually on entities that receive FTA funds in excess of threshold amounts, and annually for other entities (i.e., those which were not required to set goals).
7. SECTION 504 AND ADA PROGRAM REQUIREMENTS. Section 504 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 794, prohibits discrimination on the basis of handicap by recipients of Federal financial assistance. In addition, the Americans with Disabilities Act of 1990, as amended (ADA), specifies Federal civil rights of individuals with disabilities. Section 5311 recipients must comply with 49 C.F.R. Parts 27, 37, and 38, implementing ADA and amending the Section 504 rule. Among other requirements, the regulations: prohibit discrimination against individuals with disabilities; require that vehicles acquired be accessible to and usable by individuals with disabilities, including individuals using wheelchairs (with limited exceptions for demand responsive systems providing equivalent service to individuals with disabilities or a demonstration of inability to obtain an accessible used vehicle despite good faith efforts to do so); and require that public entities operating fixed route transit plan for and provide complementary paratransit for individuals with disabilities who cannot use accessible fixed route transit.
a. Systems required to provide complementary paratransit must be in full compliance, unless FTA has approved a temporary time extension due to undue financial burden or a voluntary compliance agreement.
b. The state should ensure that all vehicles acquired with Section 5311 funds are equipped, maintained, and operated in accordance with the regulation and that service provided does not discriminate against individuals with disabilities.
c. Newly constructed facilities, including joint use stops and depots for intercity bus transportation, must comply with ADA accessibility standards. For intercity bus transportation, recipients are encouraged to consider the provision of additional optional accessibility equipment, such as portable lifts.
In addition, recipients of any FTA funds should be aware that they also have responsibilities under other provisions of ADA in the areas of employment, public accommodations, and telecommunications.
Chapter X: Other Provisions
1. GENERAL. This chapter describes some of the more significant Federal requirements that apply to the Section 5311 program. Both the state and subrecipients must comply with Federal requirements to the extent those requirements apply to the various activities the state or subrecipients undertake.
2. LABOR. For almost all Federal transit programs involving transit operations, including the Section 5311 program, 49 U.S.C. § 5333(b) requires that fair and equitable arrangements must be made to protect the interests of employees affected by such assistance. The Department of Labor (DOL) is responsible under Federal law for the administration of Section 5333(b).
There is a simplified process for assuring employee protections that accommodates the needs of participants in the Section 5311 program. DOL and DOT agreed upon a Special Section 5333(b) Warranty for Section 5311 projects (Special Warranty), which the Secretary of Labor certified on May 31, 1979. The Special Warranty contains standard terms and conditions, shown in Exhibit F. While the state must still meet certain administrative requirements, acceptance of the Special Warranty by the subrecipients substitutes for the certification by DOL of individually negotiated agreements for each project within the state's program of projects for Section 5311. If DOL has certified comparable arrangements to be substituted for certain parts of the Special Warranty for use in a particular situation, DOL and FTA treat acceptance of the warranty as modified the same as acceptance of the Special Warranty.
Before undertaking a project, the subrecipient of Section 5311 funding (or a legally responsible entity designated by the state) must agree in writing to the Special Warranty. The state must certify to DOL that each subrecipient included in the program of projects for a particular grant has agreed in writing to the Special Warranty before permitting the subrecipient to draw down Section 5311 funds for a project. The state must make this certification to DOL for each Category A subrecipient prior to FTA grant approval and for all other subrecipients prior to moving their projects to Category A. The Special Warranty is incorporated by reference in the grant agreement between FTA and the state. Once a subrecipient has signed the Special Warranty, it is not necessary for the subrecipient to sign it again for subsequent projects, but the state is responsible for assuring that each subrecipient has a currently valid signed Special Warranty and for certifying this to DOL for each grant.
The Special Warranty also requires that the state "provide to DOL and maintain at all times an accurate, up-to-date listing of all existing transportation providers which are eligible recipients of transportation assistance funded by the project, in the transportation service area of the project, and any labor organizations representing the employees of such providers." The state and each subrecipient must also post the Special Warranty where affected employees may see it.
Part of the Special Warranty consists of certain specified terms and conditions derived from the National (Model) Agreement for Section 5333(b) dated July 23, 1975. Alternative arrangements comparable to those National (Model) Agreement terms and conditions incorporated in the Special Warranty may be substituted if approved and certified by the Secretary of Labor. Under certain rare circumstances, when there are no existing transportation related employees in the service area, the Secretary of Labor may, upon request, grant a waiver of the required labor protections. Subrecipients should transmit requests for waivers or approval of alternative arrangements to DOL through the state.
The state may not draw down funds for a project unless the subrecipient has agreed in writing to the Special Warranty, and the state has certified this agreement to DOL and provided DOL with the required list of eligible subrecipients and labor unions in the service area of the project. If any noncompliance problems develop, DOL will inform FTA and work with the state and subrecipients to reach a satisfactory solution to permit the release of funds for the project in question.
The text of the National (Model) Agreement and additional guidance concerning the Special Warranty for Section 5311 may be obtained by contacting the U.S. Department of Labor, Division of Statutory Programs, Suite N5603, 200 Constitution Avenue, N.W., Washington, D.C. 20210, or by calling (202) 219-4473.
DOL procedures established for using the Special Warranty do not extend beyond the Section 5311 program. DOL guidelines (29 C.F.R. Part 215) have established different labor protection procedures for FTA's Section 5309 capital program and Section 5307 urbanized area formula program. Note that those procedures apply to Section 5309 funds which the state may receive on behalf of recipients in nonurbanized areas. Unlike the Special Warranty for Section 5311, employee protective arrangements for each grant under other FTA programs must be certified by DOL prior to grant award. The terms and conditions which DOL may certify for Section 5307 and 5309 grants, however, are generally similar to those of the Special Warranty for Section 5311.
3. PRIVATE SECTOR PARTICIPATION. Section 5323(a)(1) requires that FTA funded projects "to the maximum extent feasible" provide for "the participation of private mass transportation companies." While FTA no longer prescribes a particular private sector participation process, the basic requirement still stands. The statewide and metropolitan planning process is assumed to adequately address private sector concerns. If, however, the state's planning process does not address rural transit projects in sufficient detail to provide adequate notice to potential private operators in the service area of Section 5311 projects, the state may need to adopt supplemental procedures in order to be able to make the required assurance.
4. CHARTER SERVICE. Section 5323(d) places limits on the charter services which may be provided by federally funded public transportation operators. These limitations are specified in the FTA charter service regulation (49 C.F.R. Part 604).
The charter service regulation (49 C.F.R. Part 604) prohibits FTA recipients from providing any charter service using FTA funded equipment or facilities if there is at least one private charter operator willing and able to provide the charter service that the recipient proposes to provide. The regulation applies to both buses and vans. Any Section 5311 recipient desiring to provide charter service must publish a notice annually and determine whether there are any private charter operators willing and able to provide the service. The state may conduct this process for itself and subrecipients or delegate this responsibility for the subrecipients to any or all of the subrecipients. The state must sign a charter agreement as part of the annual certifications and assurances and obtain and retain signed charter agreements from its subrecipients.
The regulation lists seven exceptions to the general prohibition on providing charter service. One exception allows FTA subrecipients in nonurbanized areas to petition FTA for an exception if the charter service that would be provided by willing and able private charter operators would result in a hardship on the customer because there are minimum durations pursuant to a state regulatory requirement or because the private charter operator is located too far from the origin of charter service. The regulation specifies the process for requesting this exception, which, if granted, is effective for no more than twelve months. Section 604.9 of the regulation provides specific guidance regarding exceptions which permit incidental charter service to meet the needs of the elderly, persons with disabilities, and persons served by DHHS funded programs listed in Appendix A of the charter regulation.
Service provided under contract to a social service agency will usually be mass transportation, not charter service, if the service is under the control of the subrecipient, is open door, and the subrecipient can put any rider on the vehicle in addition to the agency's clients. The regulation should not discourage Section 5311 subrecipients from using FTA funded equipment in coordinated systems, or from providing service under contract to social service agencies.
5. SCHOOL TRANSPORTATION. Section 5323(f) prohibits the use of FTA funds for exclusive school bus transportation for school students and school personnel. The implementing regulation (49 C.F.R. Part 605) does permit regular service to be modified to accommodate school students along with the general public. For the purpose of FTA's school bus regulation, Headstart is a social service, not a school program. FTA recipients may operate vehicles which meet the safety requirements for school transportation, but may not provide exclusive school service.
6. BUY AMERICA. Section 5323(j) provides that, with exceptions, Federal funds may not be obligated for mass transportation projects unless steel, iron, and manufactured products used in such projects are produced in the United States. Section 5311 recipients must conform with the FTA regulations, 49 C.F.R. Part 661, and any amendments thereto. Buy America requirements apply to all purchases, including materials or supplies funded as operating costs, if the purchase exceeds the threshold for small purchases (currently $100,000).
There are four exceptions to the basic requirement which may be the basis for a waiver. First, the requirement will not apply if its application is not in the public interest. Second, the requirement will not apply if materials and products being procured are not produced in the United States in sufficient and reasonably available quantities and of a satisfactory quality. Third, the requirement will not apply in a case involving the procurement of buses and other rolling stock (including train control, communication, and traction power equipment) if the cost of components and subcomponents which are produced in the United States is more than 60 percent of the cost of all components and subcomponents of the vehicles or equipment, and if final assembly takes place in the United States. The meaning of final assembly is further described in the FTA Guidance on Buy America Requirements, dated March 18, 1997, which applies to all buses purchased with FTA funds. Fourth, the requirement will not apply if the inclusion of domestic material will increase the overall project contract by more than 25 percent. Buy America waivers under the non-availability, price differential, and public interest exceptions require FTA approval but the waiver for rolling stock meeting the domestic content and final assembly requirements does not. FTA has issued a general waiver for selected items, including all purchases under the Federal small purchase threshold, currently $100,000.
TEA-21 included a provision which allows a manufacturer or supplier to correct an incomplete certification or a certification of noncompliance after bid opening under certain circumstances if submission of the incorrect certification was the result of an inadvertent or clerical error.
7. PRE-AWARD AND POST-DELIVERY REVIEW. Procurements for vehicles, other than sedans or unmodified vans, must be audited in accordance with FTA regulation, "Pre-Award and Post-Delivery Audits of Rolling Stock Purchases," 49 C.F.R. Part 663. Additional guidance is available in a manual, "Conducting Pre-Award and Post-Delivery Reviews for Bus Procurements," published May 1, 1995. The regulation requires any recipient that purchases rolling stock for use in revenue service with funds obligated after October 24, 1991, conduct a pre-award and post-delivery review to assure compliance with its bid specifications, Buy America requirements, and Federal Motor Vehicle Safety requirements, and to complete specific certifications. Purchase of more than ten vehicles, other than unmodified vans or sedans, requires in-plant inspection. In the case of consolidated state procurements on behalf of multiple recipients, the in-plant inspection requirement is triggered only if any single recipient will receive more than ten of the vehicles.
8. NEW MODEL BUS TESTING. Any new bus models must be tested at the FTA sponsored test facility in Altoona, PA, before FTA funds can be expended to purchase them (49 C.F.R. Part 665). This requirement applies to all buses and modified vans, but not to unmodified vans, including vans with raised roofs or lifts installed in strict conformance with the original equipment manufacturer modification guidelines. A new model is defined as one that has not been used in mass transportation service in the United States before October 1, 1988, or that has been used in such service but which, after September 30, 1988, is being produced with a major change in configuration or components. A major change in "configuration" is defined as a change which may have a significant impact on vehicle handling and stability or structural integrity. A major change in "components" is defined as a change in one or more of the vehicle's major components such as the engine, transmission, suspension, axle, or steering. Purchasers of new model buses should ensure that the manufacturer has complied with the testing requirement by requesting a copy of the bus testing report, from the Altoona Bus Testing Center, 6th Avenue and 45th Street, Altoona, Pennsylvania, 16602. The telephone number is (814) 949-7944. Before expending any FTA funds for a new model bus, the purchaser must certify that it has obtained the report. Information in the reports may be useful to operators early in the vehicle procurement process, for example, when writing specifications.
9. DEBARMENT AND SUSPENSION. The purpose of the so-called "integrity" certification required of the state as primary grantee, and the second tier certification required of subrecipients and contractors receiving over $100,000, is to ensure that Section 5311 funds are not given to anyone who has been debarred, suspended, ineligible, or voluntarily excluded from participation in federally assisted transactions. The U.S. General Services Administration issues a document titled "Lists of Parties Excluded from Federal Procurement or Nonprocurement Programs" monthly. The list is available on the GSA website [http://epls.arnet.gov/]. The burden of disclosure is on those debarred or suspended. If at any time the grantee or other covered entity learns that a certification it made or received was erroneous when submitted or if circumstances have changed, disclosure to FTA is required.
10. SAFETY. FTA's authority in the area of transit safety is set forth in Section 5329. FTA may withhold further financial assistance from any grantee that fails to correct any condition which FTA believes "creates a serious hazard of death or injury." FTA's authority to investigate and make findings in certain safety-related areas is permissive, not mandatory.
11. DRUG AND ALCOHOL ABUSE. Section 5311 recipients are required to comply with regulations issued by the Federal Transit Administration on drug and alcohol testing, 49 C.F.R. Parts 653 and 654. Among other requirements, these regulations require that all safety sensitive employees be tested for drug and alcohol use pre-employment (drug only), randomly, and post accident, that certifications be made, and that reports be submitted. There are limited exceptions to the testing requirements for contract maintenance workers under Section 5311 and for volunteers. The rule requires annual reporting of the results of testing on Management Information System (MIS) forms. Subrecipients submit the MIS forms to the state, which transmits them to FTA.
Direct grantees must comply with the Drug Free Workplace Act of 1988 (41 U.S.C. § 702), as implemented by 49 C.F.R. §§ 29.600 et. seq. The requirements, including a drug-free workplace certification, apply only to the states as FTA's direct grantees, not to subrecipients.
12. COMMERCIAL DRIVERS LICENSE. All drivers of vehicles designed to transport more than 15 persons (including the driver) must have a commercial drivers license (CDL). Mechanics who drive the vehicles must also have a CDL.
13. RESTRICTIONS ON LOBBYING. Federal financial assistance may not be used to influence any member of Congress or an officer or employee of any agency in connection with the making of any Federal contract, grant, or cooperative agreement. The state, subrecipients, and third party contractors at any tier awarded FTA assistance exceeding $100,000 must sign a certification so stating and also must disclose the expenditure of non-Federal funds for such purposes (49 C.F.R. Part 20). Other Federal laws also govern lobbying activities. For example, Federal funds may not be used for lobbying Congressional representatives or senators indirectly, such as by contributing to a lobbying organization or funding a grass-roots campaign to influence legislation (31 U.S.C. § 1352). General advocacy for transit and providing information to legislators about the services a recipient provides in the community are not prohibited, nor is using non-Federal funds for lobbying, so long as the required disclosures are made.
14. PROTECTION OF THE ENVIRONMENT. FTA's environmental impact regulation requires different levels of analysis and documentation for the various types of projects funded through its programs. Most projects and activities funded through the Section 5311 program do not normally involve significant environmental impacts. Such projects are termed "categorical exclusions" in FTA's procedures because they are types of projects which have been categorically excluded from the requirement to prepare an environmental document. In the annual certifications and assurances, the state assures FTA that all the projects in the application are categorical exclusions under 23 C.F.R. § 771.117(c) unless otherwise noted. FTA's regulation classifies categorically excluded actions and projects into two groups.
The first group, described at 23 C.F.R. § 771.117(c), contains activities and projects which have very limited or no environmental effects at all such as: planning and technical studies, preliminary design work, program administration, operating assistance, and transit vehicle purchases. Because environmental impacts of these activities are either nonexistent or minimal, no environmental documentation is required.
The second group of projects, described at 23 C.F.R. § 771.117(d), which normally qualify for a categorical exclusion are projects involving more construction and greater potential for off-site impacts. Examples are: new construction or expansion of transit terminals, storage and maintenance garages, office facilities, and parking facilities. Experience has shown that these projects can be built and operated without causing significant impacts if they are carefully sited in areas with compatible land use where the primary access routes are adequate to handle the additional transit vehicle traffic. These construction projects may be designated as categorical exclusions after FTA approval, but no presumption exists concerning the significance of environmental effects. It is the applicant's responsibility to provide documentation which clearly demonstrates that the stated conditions or criteria are met and that no significant adverse effects will result. Such documentation is usually narrowly focused on one or a limited number of environmental concerns or questionable areas. Depending on the circumstances, some technical analysis may be required, such as a noise impact assessment or a street capacity analysis; but in most cases, the documentation will focus on consistency with local land-use plans, zoning and any state or local plans or programs governing the protection and management of environmental resources, such as air quality, water quality and noise abatement. The documentation will provide a written record of coordination with those state and local agencies having jurisdiction or a special interest in some aspect of the project. There is no formal public review for these types of environmental studies. FTA reviews this information and determines if a categorical exclusion is appropriate. In order to include or advance such a project to Category A, the state must have on file a letter from FTA approving the categorical exclusion.
For any project which is not found to be a categorical exclusion, the state may be required to prepare an environmental assessment (EA) for public comment and FTA review to determine if a finding of no significant impact (FONSI) is appropriate. A project which requires an EA may not be included in Category A before FTA has issued a FONSI for the project. In the unlikely event that significant environmental impacts are identified for a Section 5311 project, an environmental impact statement (EIS) will be required.
There are a number of environmentally related statutes, orders, and compliance procedures which may apply to a given project even if it is properly classified as a categorical exclusion. The environmental requirements which may come into play for Section 5311 projects are: Clean Air Act conformity provisions; protection of public parkland, wetland and waterfowl refuges, and historic sites (49 U.S.C. § 303); Section 106 of the National Historic Preservation Act (protection of historic and archaeological resources); and Section 404 of the Clean Water Act (Corp of Engineers' permit requirements for dredge and fill activities in "waters of the United States"). FTA policy is to require compliance with these environmentally related requirements within the overall environmental process. The EA or environmental documentation to support a categorical exclusion must address these related requirements. Compliance with these requirements must be completed before a construction project is included in Category A.
FTA's procedures categorically exclude most Section 5311 projects. States should screen potential projects when they are first identified to make an initial determination as to which projects clearly meet the FHWA/FTA criteria for categorical exclusions and which projects may require additional documentation. The latter should be coordinated with the FTA regional office early in project development so that any necessary environmental analysis and review will not delay implementation. Any project involving new construction of a facility or substantial rehabilitation of an existing facility must be discussed with FTA to determine the need for information supporting a categorical exclusion and the applicability of any additional environmental requirements. Early coordination is also necessary to identify those projects for which the state must prepare an EA. If an EA is required, further steps to develop the project will not be authorized (e.g., property acquisition, final design, and construction) until FTA makes a final environmental finding for the project. Any Category B or C project that is not in the list of categorical exclusions in 23 C.F.R. §771.117(c) requires environmental clearance from FTA before being advanced to Category A (see Chapter IV for discussion of the categories of approval).
15. CLEAN AIR ACT. The Clean Air Act, as amended, establishes many substantive requirements in order to bring air quality regions which violate the national ambient air quality standards into attainment by prescribed dates. Most "nonattainment" areas are heavily urbanized, but in the case of areas that are nonattainment for ozone or small particulate matter (PM-10), substantial rural areas may be included within the nonattainment area boundaries.
The principal requirement that the state and Section 5311 subrecipients must be aware of is the transportation/air quality conformity review process. In general, transportation plans, programs, and projects must be found to "conform" with approved state (air quality) implementation plans before they can be funded by FHWA or FTA. Most of the projects typically funded under Section 5311 have been exempted by regulation from the conformity review process, e.g., operating assistance, purchase and rehabilitation of transit vehicles, operating equipment, construction of most storage and maintenance facilities, etc. A complete list of exempted highway and transit projects is found in 40 C.F.R. § 51.361. Other types of projects may require detailed air quality analysis (either burden analysis or dispersion modeling) in order to determine whether the project would create a violation of a standard or make an existing violation worse. While this is not an issue for most Section 5311 projects, it could be for certain large facilities, e.g., transit terminals and park-and-ride facilities.
The state should consult with FTA as early as possible in the development of the program of projects to establish which projects, if any, will require further analysis to support FTA's conformity determination. Consultation with the Environmental Protection Agency and state and local air quality agencies is also required for all projects subject to the conformity review process; thus, it is in the best interests of the state and subrecipient to identify these projects to the FTA regional office as soon as possible.
Other Clean Air Act requirements may apply to the state and Section 5311 subrecipients, e.g., phase-in of more stringent bus emission standards. The FTA regional office can supply up-to-date information on various provisions of the Clean Air Act related to mobile sources.
Chapter XI: State Management Plan
1. GENERAL. The state management plan (SMP) is a document that describes the state's policies and procedures for administering the Section 5311 program. Each state is required to have an approved SMP on file with the appropriate FTA regional office and to update it regularly to incorporate any changes in program management or new requirements. The state should seek public comment when it revises the plan significantly. The state may include the required SMP for Section 5310 in the same document. Certain contents of the SMP, such as the project selection criteria, should be coordinated with the statewide transportation plan. FTA Order 1365.1, "Accessible Format Policy," requires that all public documents developed under a grant from FTA be prepared and submitted in electronic format.
2. PURPOSE. The SMP is intended to facilitate both state management and FTA oversight by documenting the state's procedures and policies for administering the Section 5311 program in a single reference. The SMP should be a document which is useful to the state and subrecipients, as well as to FTA. At a minimum, this document must include the state's objectives, policies, procedures, and administrative requirements, in a form readily accessible to potential subrecipients, state staff, FTA, and the public. The SMP's primary purposes are to serve as the basis for FTA state level management reviews of the program, and to provide public information on the state's administration of the Section 5311 program. It may also be used internally by the state as a program guide for local project applicants. If the state has other relevant documentation that provides the same information requested for the SMP, such as an annual application instructions manual, it may be included by reference, as an attachment.
3. STATE MANAGEMENT REVIEWS. When a state management review is scheduled, FTA and its contractors examine the SMP on file as part of a desk review at the regional office to determine whether the procedures in the SMP satisfy current requirements. At the site visit, the reviewers document whether or not the state is following its own stated procedures. Findings of the review might include recommendations that the state revise the SMP to reflect its actual procedures, or that it change its procedures and document them in revisions to the SMP.
4. STATE MANAGEMENT PLAN CONTENT. While FTA does not prescribe a format for the SMP, the plan should address the following topics and provide the information as requested for each topic below:
5. SMP REVISIONS. All states must have an SMP approved by FTA on file with the FTA regional office. An approved SMP remains valid until FTA approves a later plan submitted by the state, or an FTA state management review results in a specific request to the state by FTA for a revised SMP, or FTA announces significant new program documentation requirements. FTA strongly encourages the state to issue timely revisions to the SMP, particularly when information helpful to minority applicants, subrecipients, and third party contractors is involved. When the state proposes major changes to the SMP it should give an opportunity to comment at the minimum to potential subrecipients of assistance, potential service providers, other state agencies and representatives of other funding sources, and any relevant state associations and professional organizations.
If revisions are substantive but not pervasive, the state may submit changes and additions in the form of page changes that can be approved by FTA and incorporated into the SMP on file. If the state changes the SMP significantly, however, it should submit the entire revised plan to FTA for approval. The state is responsible for ensuring that FTA has a complete copy of the current SMP. The state may submit minor changes and technical corrections to FTA to update the approved plan, without the need for additional FTA approval. The state should reexamine the SMP to make sure it reflects current requirements of this FTA Circular 9040.1E and revise the SMP if necessary.
Exhibit A: Sample Section 5311 Program of Projects
5311: FY ___ Apportionment: $________; Carryover:____________
RTAP: FY __Allocation: $___________; Carryover: ___________________
Transfer Funds (plus or minus): ___________________
Total Funds Available:________________________
Total number of subrecipients funded in this Program of Projects:________
LIST OF PROJECTS
In the following list, identify with an asterisk (*) those subrecipients which are Indian tribal governments or serve Indian tribal transportation needs. List Intercity Bus projects separately.
CAPITAL, OPERATING, AND PROJECT ADMINISTRATION
[Program of projects may be printed horizontally, with columns added to show capital, operating, and project administration for each subrecipient to facilitate subtotalling.]
(INTERCITY BUS PROJECTS [Section 5311(f)]
SUBTOTAL INTERCITY BUS
STATE ADMINISTRATION, PLANNING AND TECHNICAL ASSISTANCE
(Not to exceed 15% of Section 5311 apportionment and any flex funds transferred to the Section 5311 account may be used to provide a 100% Federal share. Section 5307 funds transferred to the Section 5311 account may be used to provide 80% Federal share for planning projects without regard to the 15% cap.)
PROGRAM RESERVE (CATEGORY C)
RURAL TRANSIT ASSISTANCE PROGRAM (RTAP) [Section 5311(b)(2)]
Exhibit B: Section 5311 Budget Information
Use the chart of activity line item (ALI) codes (Exhibit C) to prepare a consolidated budget for the entire program of projects (Exhibit A). Group related line items under appropriate scope codes. The scope is usually identified by the first three digits of the ALI followed by a two digit sequence number. A few exceptions for the 5311 program are noted below. The same scope may be used more than once in a complex budget. If so, the repeated scope is numbered sequentially. If applying electronically, the state may enter the project and recipient descriptions from the program of projects as extended text associated with the scopes.
For each ALI, enter the net project cost and the Federal share. The GMIS generates standard descriptions for each ALI code, but the text may be overridden to enter more specific descriptions.
Use of the correct ALI codes identifies all vehicles as replacement or expansion, and indicates the size and type of vehicle or equipment. Enter a quantity for each vehicle ALI. For example, if there are ten subrecipients in the program of projects and each will receive three replacement vans and one will get a mid sized bus for new service, the scope 111 (Bus, revenue rolling stock) would include two ALI codes - 11.12.15, quantity 30, and 11.13.03, quantity 1. The individual recipients and types of service provided could be identified in extended text. Through the GMIS, FTA is able to use this information to generate detailed reports electronically on the use of program funds.
When grantees use the higher Federal match for equipment purchased to meet clean air or accessibility requirements, a special non-add scope must be used for tracking, in addition to the usual coding.
Use as many capital scopes and activity codes as necessary to aggregate capital projects from the program of projects. Capital projects in support of intercity bus transportation should not be included here, but rather under scope 634.
The ALI for operating assistance for all FTA programs is 30.09.00. The grant project number is sufficient to identify the program as Section 5311. Operating assistance may be shown either under scope 300 or grouped with other miscellaneous items in scope 600. Operating assistance for intercity bus projects should be shown under scope 634.
OTHER PROGRAM COSTS
The scope 600 may include the ALI's for all other program costs, such as state administration (11.80.00), project administration (11.79.00), and program reserve (11.73.00), and (optionally) operating assistance (30.09.00). This creates a shorter printed project budget. Quantitities are not used for these line items.
Alternately, these activities may also be listed under separate scopes in the 600 series: 610 - state administration, 620 - project administration, 630 - program reserve. It may be preferable to use the separate scopes if only one of these activities is included in the grant, or if an ALI is used more than once, for example state administration funded at 100% with funds apportioned as Section 5311 and eligible state administration activities funded at 80% with funds transferred from Section 5307.
Show both net cost and Federal share for each ALI. The maximum Federal share for project administration is 80 percent; for operating, 50 percent; for program reserve, 80 percent; and for state administration or planning outside the cap, 80 percent. The fifteen percent of the apportionment or transferred flex funds allowed for state administration, planning, and technical assistance may be funded at 100 percent Federal share.
INTERCITY BUS [Section 5311(f)]
All projects used to fulfill the statutory requirement to spend fifteen percent of the apportionment in support of intercity bus service must be included in scope 634. Any of the ALI codes may be used under this scope, even if they have been used elsewhere in the budget for other rural transit projects. However, the same project should not be double-counted. For example, if a single subrecipient receives capital and/or operating assistance for local rural transit services and also for service meeting the criteria for Section 5311(f), the costs would be separated out and only the intercity bus portion reported under scope 634 with the other project costs shown under other appropriate scopes.
The activity codes for intercity bus projects are the same as those used elsewhere. Eligible activities also include planning and marketing, in addition to capital and operating. Inclusion under scope 634 identifies these activities as intercity projects and enables FTA to track and report on intercity bus obligations.
Planning ALI codes should be used in the project budget only if funds transferred from Section 5307 are being used for planning outside the state administration limitation, or if the planning or marketing activity is for intercity bus and is included in scope 634. The FPC 09 is used when obligating funds for planning permitted outside the state administration limitation. All other planning is subject to the fifteen percent limitation on state administration and must be included in the ALI for state administration (11.80.00) and included in the funds obligated using FPC 06.
RURAL TRANSIT ASSISTANCE PROGRAM - RTAP
The scope code for RTAP is 635. This code, which departs from the usual numbering scheme, was chosen so that RTAP would appear at the bottom of the printed budget, since it is funded from a separate allocation. There are five ALI codes for RTAP, which reflect the eligible assistance categories: 43.50.01 - training, 43.50.02 - technical assistance, 43.50.03 - research, 43.50.04 - support services, and 43.50.05 - program reserve (not to exceed ten percent of RTAP allocation). More specific project descriptions should be included either in the extended description at the grant level (i.e. the program of projects) or in the extended description fields for the RTAP ALI's.
ACCOUNTING CLASSIFICATION CODES
FTA uses accounting classification codes to indicate the source of funds in a grant. Each digit in the code has a specific meaning. For example, the accounting classification code 220.127.116.11.1 provides the following information:
The first two digits indicate the year of apportionment of the funds, in this case FY 1999.
The second two digits indicate the appropriation; in this case the 21 stands for general funds. A 61 in this place indicates trust funds (for example transferred flex funds). (Certain trust funds from prior years had the appropriation codes 17 and 37) RTAP funds currently come from the national planning and research program, appropriation 23.
The next two digits indicate the program the funds reside in. Section 5311 is represented by 18, and Section 5310 by 16, the former section numbers under the Federal Transit Act. Section 5307 is 90. When funds are transferred from one program to another, these digits reflect the change.
The next two digits indicate the specific program source of the funds. The original Section 5311 apportionment is coded 81. Funds transferred from Section 5307 are either C8 (capital only) or U8 (unrestricted). Section 5311 funds transferred to Section 5307 are coded T9. Section 5310 funds transferred to Section 5311 are coded B2. Each flexible funding program has its own code, so FTA and FHWA can track the specific source of the funds.
The last digit is a technical detail related to the appropriation code and indicates the type of spending authority the Federal agency has.
FINANCIAL PURPOSE CODES
When the funds are obligated for a grant, FTA uses a financial purpose code (FPC) to indicate any broad statutory restrictions on the funds. All funds used for state administration within the fifteen percent cap are obligated using FPC 06. The RTAP funds are obligated under FPC 07. For Section 5311 only, everything else is obligated under FPC 09, the general purpose code. In other FTA grant programs, 00 is used for capital obligations, 04 for operating, and 02 for planning. Because the states have the flexibility to move funds around among projects within the program of projects, FTA maintains the maximum flexibility by aggregating the obligations as broadly as possible. When the funds are actually expended and drawn down, the state indicates the use of the funds by substituting a number for the X in the project number in the drawdown request. Operating (4), capital and project administration (0), and planning (2) all draw against FPC 09.
Page 1(Sample Approved Budget)
SAMPLE APPROVED PROJECT BUDGET
GRANTEE: ANYSTATE DEPARTMENT OF TRANSPORTATION
PROJECT NO.: AN-18-X015-00 BUDGET NO.: 01
SOURCES OF FEDERAL FINANCIAL ASSISTANCE
FUNDING UZA: 990000 FUNDINF UZA NAME: ANYSTATE
Exhibit C: Activity Line Item Codes
Exhibit E: Sample Intercity Bus Certification
(On official letterhead)
Month, Day, Year
Mr. Gordon J. Linton
Dear Mr. Linton:
I hereby certify to the Secretary of the United States Department of Transportation that the intercity bus service needs of the state of are being met adequately. Pursuant to Subsection 5311(f)(2) of 49 United States Code, the state accordingly does not intend to expend fifteen percent of its Fiscal Year(s) Section 5311 apportionment(s) to carry out a program for the development and support of intercity bus transportation as would be required by Federal law in the absence of this certification.
[The model letter constitutes a certification by the person signing the letter. Thus, if this letter is signed by anyone other than the Governor, explain the authority under which this person signs the certification.]
[Additional explanatory information may be added, for example, a description of the process used to assess whether unmet needs existed, the extent of any public participation in the decision, state financial support for intercity bus service, etc., or the amount to be used in the case that intercity bus needs can be adequately met using less than the full fifteen percent. FTA finds this kind of information useful in responding to questions about implementation of the program.]
cc: FTA Regional Administrator
Exhibit F: Special Section 5333(b) Warranty for Application to the Small Urban and Rural Program
The following language shall be made part of the contract of assistance with the State or other public body charged with allocation and administration of funds provided under 49 U.S.C. Section 5311:
A. General application
The Public Body (" ") agrees that, in the absence of waiver by the Department of Labor, the terms and conditions of this warranty, as set forth below, shall apply for the protection of the transportation related employees of any employer providing transportation services assisted by the Project ("Recipient"), and the transportation related employees of any other surface public transportation providers in the transportation service area of the Project.
The Public Body shall provide to the Department of Labor and maintain at all times during the Project an accurate, up-to-date listing of all existing transportation providers which are eligible Recipients of transportation assistance funded by the Project, in the transportation service area of the Project, and any labor organizations representing the employees of such providers.
Certification by the Public Body to the Department of Labor that the designated Recipients have indicated in writing acceptance of the terms and conditions of the warranty arrangement will be sufficient to permit the flow of Section 5311 funding in the absence of a finding of non-compliance by the Department of Labor.
B. Standard Terms and Conditions
(1) The Project shall be carried out in such a manner and upon such terms and conditions as will not adversely affect employees of the Recipient and of any other surface public transportation provider in the transportation service area of the Project. It shall be an obligation of the Recipient and any other legally responsible party designated by the Public Body to assure that any and all transportation services assisted by the Project are contracted for and operated in such a manner that they do not impair the rights and interests of affected employees. The term "Project," as used herein, shall not be limited to the particular facility, service or operation assisted by Federal funds, but shall include any changes, whether organizational, or otherwise, which are a result of the assistance provided. The phrase "as a result of the Project," shall when used in this arrangement, include events related to the Project occurring in anticipation of, during, and subsequent to the Project and any program of efficiencies or economies related thereto; provided, however, that volume rises and falls of business, or changes in volume and character of employment brought about by causes other than the Project (including any economies or efficiencies unrelated to the Project) are not within the purview of this arrangement.
An employee covered by this arrangement, who is not dismissed, displaced or otherwise worsened in his position with regard to his employment as a result of the Project, but who is dismissed, displaced or otherwise worsened solely because of the total or partial termination of the Project, discontinuance of Project services, or exhaustion of Project funding shall not be deemed eligible for a dismissal or displacement allowance within the meaning of paragraphs (6) and (7) of the Model agreement or applicable provisions of substitute comparable arrangements.
(2) (a) Where employees of a Recipient are represented for collective bargaining purposes, all Project services provided by that Recipient shall be provided under and in accordance with any collective bargaining agreement applicable to such employees which is then in effect.
(2) (b) The Recipient or legally responsible party shall provide to all affected employees sixty (60) days' notice of intended actions which may result in displacements or dismissals or rearrangements of the working forces. In the case of employees represented by a union, such notice shall be provided by certified mail through their representatives. The notice shall contain a full and adequate statement of the proposed changes, and an estimate of the number of employees affected by the intended changes, and the number and classifications of any jobs in the Recipient's employment available to be filled by such affected employees.
(2) (c) The procedures of this subparagraph shall apply to cases where notices involve employees represented by a union for collective bargaining purposes. At the request of either the Recipient or the representatives of such employees negotiations for the purposes of reaching agreement with respect to the applications of the terms and conditions of this arrangement shall commence immediately. If no agreement is reached within twenty (20) days from the commencement of negotiations, any party to the dispute may submit the matter to dispute settlement procedures in accordance with paragraph (4) of this warranty. The foregoing procedures shall be complied with and carried out prior to the institution of the intended action.
(3) For the purpose of providing the statutory required protections including those specifically mandated by 49 U.S.C. Section 5333(b)1, the public Body will assure as a condition of the release of funds that the Recipient agrees to be bound by the terms and conditions of the National (Model) Section 5333(b) Agreement executed July 23, 1975, identified below2, provided that other comparable arrangements may be substituted therefor, if approved by the Secretary of Labor and certified for inclusion in these conditions.
(4) Any dispute or controversy arising regarding the application, interpretation, or enforcement of any of the provisions of this arrangement which cannot be settled by and between the parties at interest within thirty (30) days after the dispute or controversy first arises, may be referred by any such party to any final and binding disputes settlement procedure acceptable to the parties, or in the event they cannot agree upon such procedure, to the Department of Labor or an impartial third party designated by the Department of Labor for final and binding determination. The compensation and expenses of the impartial third party, and any other jointly incurred expenses, shall be borne equally by the parties to the proceeding and all other expenses shall be paid by the party incurring them.
In the event of any dispute as to whether or not a particular employee was affected by the Project, it shall be his obligation to identify the Project and specify the pertinent facts of the Project relied upon. It shall then be the burden of either the Recipient or other party legally responsible for the application of these conditions to prove that factors other than the Project affected the employees. The claiming employee shall prevail if it is established that the Project had an effect upon the employee even if other factors may also have affected the employee.
(5) The Recipient or other legally responsible party designated by the Public Body will be financially responsible for the application of these conditions and will make the necessary arrangements so that any employee covered by these arrangements, or the union representative of such employee, may file claim of violation of these arrangements with the Recipient within sixty (60) days of the date he is terminated or laid off as a result of the Project, or within eighteen (18) months of the date his position with respect to his employment is otherwise worsened as a result of the Project. In the latter case, if the events giving rise to the claim have occurred over an extended period, the 18-month limitation shall be measured from the last such event. No benefits shall be payable for any period prior to six (6) months from the date of the filing of any claim.
(6) Nothing in this arrangement shall be construed as depriving any employee of any rights or benefits which such employee may have under existing employment or collective bargaining agreements, nor shall this arrangement be deemed a waiver of any rights or any union or of any represented employee derived from any other agreement or provision of federal, state or local law.
(7) In the event any employee covered by these arrangements is terminated or laid off as a result of the Project, he shall be granted priority of employment or reemployment to fill any vacant position within the control of the Recipient for which he is, or by training or retraining within a reasonable period, can become qualified. In the event training or retraining is required by such employment or reemployment, the Recipient or other legally responsible party designated by the Public Body shall provide or provide for such training or retraining at no cost to the employee.
(8) The Recipient will post, in a prominent and accessible place, a notice stating that the Recipient has received federal assistance under 49 U.S.C. Chapter 53 and has agreed to comply with the provisions of 49 U.S.C. Section 5333(b). This notice shall also specify the terms and conditions set forth herein for the protection of employees. The Recipient shall maintain and keep on file all relevant books and records in sufficient detail as to provide the basic information necessary to the proper application, administration, and enforcement of these arrangements and to the proper determination of any claims arising thereunder.
(9) Any labor organization which is the collective bargaining representative of employees covered by these arrangements, may become a party to these arrangements by serving written notice of its desire to do so upon the Recipient and the Department of Labor. In the event of any disagreement that such labor organization represents covered employees, or is otherwise eligible to become a party to these arrangements, as applied to the Project, the dispute as to whether such organization shall participate shall be determined by the Secretary of Labor.
(10) In the event the Project is approved for assistance under 49 U.S.C. Chapter 53, the foregoing terms and conditions shall be made part of the contract of assistance between the federal government and the Public Body or Recipient of federal funds; provided, however, that this arrangement shall not merge into the contract of assistance, but shall be independently binding and enforceable by an upon the parties thereto, and by any covered employee or his representative, in accordance with its terms, nor shall any other employee protective agreement merge into this arrangement, but each shall be independently binding and enforceable by and upon the parties thereto, in accordance with its terms.
As part of the grant approval process, either the Recipient or other legally responsible party designated by the Public Body may in writing seek from the Secretary of Labor a waiver of the statutory required protections. The Secretary will waive these protections in cases, where at the time of the requested waiver, the Secretary determines that there are no employees of the Recipient or of any other surface public transportation providers in the transportation service area who could be potentially affected by the Project. A 30-day notice of proposed waiver will be given by the Department of Labor and in the absence of timely objection, the waiver will become final at the end of the 30-day notice period. In the event of timely objection, the Department of Labor will review the matter and determine whether a waiver shall be granted. In the absence of waiver, these protections shall apply to the Project.
1Such protective arrangements shall include, without being limited to, such provisions as may be necessary for (1) the preservation of rights, privileges, and benefits (including continuation of pension rights and benefits) under existing collective bargaining agreements or otherwise; (2) the continuation of collective bargaining rights; (3) the protection of individual employees against a worsening of their positions with respect to their employment; (4) assurances of employment to employees of acquired mass transportation systems and priority of reemployment of employees terminated or laid off; and (5) paid training and retraining programs. Such arrangements shall include provisions protecting individual employees against a worsening of their positions with respect to their employments which shall in no event provide benefits less than those established pursuant to 49 U.S.C. Section 11347 [the codified citation of Section 5(2)(f) of the Act of February 4, 1887 ( 24 Stat. 379), as amended]. Return to original reference point.
2 For purposes of this warranty agreement, paragraphs (1); (2); (5); (15); (22); (23); (24); (26); (27); (28); and (29) of the Model Section 5333(b) Agreement, executed July 23, 1975 are to be omitted. Return to original reference point.
Exhibit G: Capital Cost of Contracting
Chapter III, 5, b, 16 identifies the capital cost of contracting for service as an eligible capital expense. The following table shows the percent of various types of contracts which are eligible for FTA capital assistance without further justification to FTA. The percentages apply no matter whether the service is local, express, shuttle, or paratransit.
A recipient may request FTA participation in a higher percentage of the contract than is shown in the table, but must provide appropriate written cost information and documentation to justify the higher percentage to FTA. The state should obtain FTA's approval of any such requests for a level of capital participation higher than the percentages shown in the chart before advancing the project to Category A.