Projects of National and Regional Significance Evaluation and Rating, 63362-63372 [E8-25382]

Agencies

• Federal Highway Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 73, Number 207 (Friday, October 24, 2008)]
[Rules and Regulations]
[Pages 63362-63372]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-25382]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Part 505

[Docket No. FHWA-05-23393]
RIN 2125-AF08


Projects of National and Regional Significance Evaluation and 
Rating

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: Section 1301 of the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Pub. L. 
109-59; 119 Stat. 1144) established a program to provide grants to 
States for Projects of National and Regional Significance (PNRS) to 
improve the safe, secure, and efficient movement of people and goods 
throughout the United States and to improve the health and welfare of 
the national economy. Section 1301 requires the Secretary of 
Transportation (Secretary) to establish regulations on the manner in 
which the proposed projects will be evaluated and rated, in order to 
determine which projects shall receive grant funding. This rule 
establishes the required evaluation and rating guidelines for proposed 
projects. Under this rule, a proposed project would be eligible for 
funding under the PNRS Program (Program) only if the Secretary finds 
that the project meets the eligibility requirements of the rule. The 
Secretary will then evaluate and rate each project as ``highly 
recommended,'' ``recommended,'' or ``not recommended'' based on the 
results of preliminary engineering, the project justification criteria, 
and the degree of non-Federal financial commitment.
    All funds authorized by section 1101(a)(15) of SAFETEA-LU for the 
Program are fully designated to the 25 projects listed in section 
1301(m) of SAFETEA-LU. For the duration of SAFETEA-LU there are no 
additional funds available for distribution beyond those already 
designated, and there are no assurances that any additional funds will 
become available. Funding in future highway reauthorization bills is at 
the discretion of Congress.

DATES: Effective Date: This rule is effective November 24, 2008.

FOR FURTHER INFORMATION CONTACT: Mr. Edward Strocko, Office of Freight 
Management and Operations, HOFM-1, (202) 366-2997, or Ms. Alla Shaw, 
Office of the Chief Counsel, (202) 366-1042, Federal Highway 
Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590. 
Office Hours are from 7:45 a.m. to 4:15 p.m., e.t., Monday through 
Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access and Filing

    You may retrieve a copy of the NPRM, comments submitted to the 
docket, and a copy of this final rule online through the Federal 
eRulemaking portal at: www.regulations.gov. The Web site is available 
24 hours each day, 365 days each year. Electronic retrieval help and 
guidelines are available under the help section of the Web site.
    An electronic copy of this document may also be downloaded by 
accessing the Office of the Federal Register's home page at: https://
www.archives.gov and the Government Printing Office's Web page at: 
https://www.gpoaccess.gov/nara.

Background

    Section 1301 of SAFETEA-LU establishes a program to finance 
critical, high-cost transportation infrastructure facilities that 
address critical national economic and transportation needs. These 
projects often involve multiple levels of government, agencies, modes 
of transportation, and transportation goals and planning processes that 
are not easily addressed or funded within existing surface 
transportation program categories. Projects of National and Regional 
Significance would have national and regional benefits, including 
improving economic productivity by facilitating international trade, 
relieving congestion, and improving transportation safety by 
facilitating passenger and freight movement. Additionally, this Program 
would further the goals of the Secretary's National Strategy to Reduce 
Congestion on America's Transportation Network (Congestion 
Initiative).\1\
---------------------------------------------------------------------------

    \1\ Speaking before the National Retail Foundation's annual 
conference on May 16, 2006, in Washington, DC, U.S. Transportation 
Secretary Norman Mineta unveiled a new plan to reduce congestion 
plaguing America's roads, rail and airports. The National Strategy 
to Reduce Congestion on America's Transportation Network includes a 
number of initiatives designed to reduce transportation congestion 
and is available at the following URL: https://fightgridlocknow.com.
---------------------------------------------------------------------------

    The benefits of PNRS would accrue beyond local areas and States, to 
the Nation as a whole. A program dedicated to constructing PNRS would 
improve the safe, secure, and efficient movement of people and goods 
throughout the United States as well as improve the health and welfare 
of the national economy.
    Under these regulations, a State seeking a grant for a proposed 
PNRS would submit to the Secretary an application that demonstrates the 
ability of the proposed project to enhance the national transportation 
system, generate national or regional economic benefits, reduce 
congestion, improve transportation safety, and attract non-Federal 
investment.
    The Secretary shall evaluate and rate each proposed project as 
``highly recommended,'' ``recommended,'' or ``not recommended'' based 
on the results of preliminary engineering, the project criteria set 
forth in the regulations, and degree of non-Federal financial 
commitments. If the Secretary finds that the proposed project meets the 
requirements of the regulations, and there is a reasonable likelihood 
that the project will continue to meet such requirements, the Secretary 
may issue a letter of intent to obligate funds from future available 
budget authority specified in law or execute a full funding grant 
agreement with a State. A full funding grant agreement (FFGA) would 
establish the terms of Federal participation in the project, maximum 
amount of Federal financial assistance, cover the period of time for 
completing the project, and address the timely and efficient management 
of the project in accordance with applicable Federal statutes, 
regulations, and policy, including oversight roles and 
responsibilities, and other terms and conditions.
    The designated projects in section 1301(m) of SAFETEA-LU are not 
subject to the criteria established in this part, and the projects will 
not be subject to the evaluation and rating as proposed in this part in 
order to receive the SAFETEA-LU authorized funding. However, projects 
currently designated under SAFETEA-LU section 1301(m) would be required 
to compete in the evaluation and rating process should any new or 
additional funding be authorized for this Program.

Notice of Proposed Rulemaking

    On July 24, 2006, FHWA published in the Federal Register at 71 FR 
41748 a notice of proposed rulemaking (NPRM) to establish regulations 
on the manner in which the proposed projects under the Projects of 
National and Regional Significance Program will be evaluated and rated, 
in order to determine which projects shall receive grant funding. The

[[Page 63363]]

FHWA was looking for specific and detailed comments that would assist 
in defining grant criteria, project eligibility, project ratings, and 
the nature and form of full funding grant agreements. The FHWA 
specifically solicited comments that would contribute to an 
understanding and a quantification of criteria related to congestion, 
system throughput, safety, technology, private contributions and 
national and/or regional economic benefits.
    The first comment period for the NPRM closed on September 22, 2006. 
The FHWA recognized that additional time would allow interested parties 
a broader and more comprehensive review and discussion of the proposed 
regulations and would allow the development and submission of complete 
responses to the docket. To allow time for interested parties to submit 
more comprehensive comments, FHWA reopened the comment period with a 
notice published in the Federal Register on December 28, 2006. This 
extended comment period closed on February 9, 2007.

Discussion of Comments Received

    The FHWA received 22 documents representing over 230 comments on 
the rulemaking. Of these comments, most (163) were received during the 
second comment period, and more organizations (12 out of 22) submitted 
documents during the second comment period. The majority of the 
comments (13) came from associations that are organized for the 
purposes of representing a particular set of interests within 
transportation, and many of these associations represent freight 
interests. State departments of transportation (7) were the second most 
common submitters of comments. The FHWA received one document from a 
citizen and one from a company.
    The types of comments submitted can be separated into three broad 
categories. The first are comments that agreed with the language of the 
rulemaking and did not propose any changes to the NPRM. These comments 
are not addressed in the section-by-section discussion below. The 
second set of comments contains suggestions that would require changes 
to SAFETEA-LU, Title 23, United States Code, or other Federal statutes. 
Many of these suggestions appeared useful; however, they simply could 
not be incorporated into the rule because they directly contradict 
current Federal law. The third category of comments contained 
suggestions that could be implemented at the discretion of FHWA. The 
FHWA was open to all suggestions in this category and exercised careful 
thought and discretion regarding the incorporation of these comments in 
the final rule.

Section-by-Section Discussion

    This section discusses comments submitted on each section of the 
rule along with an explanation of any changes that have been made from 
the NPRM to the final rule. All references to revisions or changes are 
to changes in language that was originally proposed in the NPRM.

Section 505.1 Purpose

    The agency received no comments regarding this section and made no 
changes to the final rule.

Section 505.3 Policy

    The FHWA received five comments on section 505.3. Commenters 
suggested the concept of ``economic sustainability'' be introduced in 
describing the public interest in assuring on-going benefits from the 
PNRS projects and that the expected congestion relief should be ``long-
term.'' Both of these suggestions were adopted and the final rule was 
revised to reflect this broader policy statement. The final rule now 
reads ``A Project of National and Regional Significance should 
quantitatively improve the throughput or provide long-term congestion 
relief for passenger or freight movement for a part of the 
transportation network and clearly connect this improvement to 
sustainable economic productivity for the Nation or the region in which 
it is located.''
    One commenter proposed that national security should be an 
essential element of the policy underlying this Program. The DOT 
recognizes the importance of national security and providing resiliency 
for the Nation's transportation infrastructure. The FHWA is committed 
to improving our Nation's ability to manage emergencies that take place 
within the transportation network infrastructure or affect it in some 
way. However, FHWA believes the primary focus of the PNRS program is to 
provide improved throughput or long-term congestion relief for 
passenger or freight movements. Therefore, an amplification of national 
security in the program's policy statement has not been added to the 
final rule.

Section 505.5 Definitions

    The FHWA received more than 40 comments on section 505.5. Most of 
the comments concerned the definitions of the terms ``applicant,'' 
``eligible projects,'' ``eligible project costs,'' and ``full funding 
grant agreements.''
    ``Applicant''--Several commenters noted that large projects, or 
``mega-projects,'' frequently involve and require cooperation between 
adjacent States, and recommended that multistate applications be 
permitted. After further consideration of the types of projects that 
would be national or regionally significant, FHWA has amended the 
definition of ``applicant'' to include multiple State departments of 
transportation; however, one State agency must serve as the lead for 
the application.
    Several commenters suggested entities other than States, such as 
major cities, transit agencies, metropolitan planning organizations, or 
other regional organizations, should be permitted to submit proposals 
for PNRS. The FHWA encourages strong local and regional interagency 
coordination on PNRS. However, we could not adopt this suggestion 
because the authorizing statute specifically provides that grants are 
to be made to States and that the ``State'' is to have the same meaning 
as is contained in 23 U.S.C. 101(a). In 23 U.S.C. 101(a), ``State'' is 
defined as any of the 50 States, the District of Columbia, or Puerto 
Rico.
    ``Eligible project''--The proposed rule defined ``eligible 
projects'' in a flexible manner. The FHWA received 13 comments 
regarding this definition. At one end of the spectrum, a commenter 
proposed to include ``transit-only'' projects, while at the other end, 
a commenter suggested restricting grants under this program to the 
highway portions of these projects only.
    In crafting this definition, FHWA is mindful of the intent of the 
authorizing legislation which permits PNRS to consist of multiple modes 
of transportation, which are not easily addressed within existing 
categorical surface transportation programs. However, FHWA must respect 
the constraints present in the legislation that projects eligible for 
assistance under this Program must be eligible for assistance under 
Title 23 of the United States Code.
    In light of these two principles, the final rule reiterates a 
flexible definition of ``eligible projects,'' which encompasses 
multimodal approaches to projects that address major bottlenecks, 
chokepoints, gateways, hubs, surface transportation system corridors, 
and, in the context of a multimodal approach, allows the use of PNRS 
funds on non-highway facilities provided they are eligible under Title 
23, United States Code. Examples of Title 23 programs under which non-
highway facilities are eligible include the Transportation 
Infrastructure Finance and Innovation

[[Page 63364]]

Act (TIFIA) Program and the Congestion Mitigation and Air Quality 
(CMAQ) Program. Under the CMAQ program, construction of intermodal 
freight facilities is eligible as long as the project is beneficial to 
the region meeting its air quality conformity goals. Under the TIFIA 
program, public or private rail facilities providing benefits to 
highway users are eligible, as are surface transportation 
infrastructure modifications to facilitate intermodal interchange, 
transfer, and access into and out of ports.
    A number of commenters suggested that a program of integrated or 
related projects could be considered as a single project for purposes 
of satisfying eligibility under the authorizing statute for the PNRS. 
This would allow funding for projects where multiple or different 
private, as well as public, partners may be involved in collaborative 
relationships in different phases of the project. The FHWA has 
considered the types of projects that may be submitted under this 
Program and agrees with these comments. The FHWA has revised the final 
rule to reflect this interpretation that an eligible project means any 
surface transportation project or set of integrated surface 
transportation projects closely related in the function they perform 
and that are eligible for Federal assistance under Title 23, United 
States Code. Applicants will need to demonstrate that the program of 
related projects provides benefits that could not be realized if they 
were considered as stand alone or independent projects.
    ``Eligible project costs''--Comments received on this definition 
addressed the mode or type of facility eligible as well as the type of 
activities that would be eligible. Several commenters suggested 
distinctions between highway and non-highway costs be eliminated, while 
others suggested eligible costs only apply to the highway portion of 
projects. As noted above, the use of PNRS funds on non-highway 
facilities are eligible project costs when such costs are related to 
and are part of the project. This is consistent with the statute, which 
permits any eligible activity under a Title 23 program to be funded 
under this Program. The FHWA clarified the definition of ``eligible 
project costs'' in the final rule to be explicit regarding costs 
associated with eligible projects.
    The comments on this definition related to types of activities were 
divided about whether preliminary engineering (PE) and/or environmental 
planning costs that preceded the application for funding under this 
Program should be considered an ``eligible project cost.'' Some of the 
commenters argued that the use of PNRS grants should be limited to the 
construction phase only, while others were in favor of the language in 
the NPRM. There is a general recognition in the comments that some 
level of environmental analysis and project engineering should be 
undertaken, prior to the application, in order to establish that the 
project for which funding is sought is practicable and feasible. The 
final rule retains the language in the NPRM that would allow PE and 
design work, environmental reviews, and other planning and 
preconstruction activities to be considered eligible project costs 
reimbursable after a project is funded with a FFGA. In order for these 
costs to be eligible, they must be appropriate and authorized prior to 
being incurred, pursuant to Title 23, United States Code. A State may 
request the use of Advanced Construction funds for the project and 
subsequently convert those funds to an eligible Federal-aid funding 
category or to PNRS funding as part of the FFGA.
    Commenters also suggested allowing bond financing costs to be 
included in the definition of eligible costs. The FHWA has reviewed 
other statutory language and has included language in this rule to 
allow debt-financing costs to be included in the definition of eligible 
costs, provided that such financing costs are appropriate and 
authorized, pursuant to Title 23, United States Code.
    ``Full funding grant agreement''--Some substantive comments were 
received concerning this definition and the types of funding mechanisms 
that could be offered by the Program. The authorizing statute provides 
that a project financed under this Program shall be carried out through 
a FFGA. In this regard, the mechanism for funding is modeled after the 
New Starts Program administered by the Federal Transit Administration, 
and similar procedures are applicable. The FHWA has clarified the final 
rule to make it clear that a FFGA will define the scope of the project, 
establish the amount of funding, cover the period of time for the 
project's completion, and, as in the case in the New Starts program, 
facilitate project management, consistent with applicable Federal law, 
including oversight roles and responsibilities and other terms and 
conditions. The FHWA recognizes that a PNRS FFGA may only be a piece of 
the Federal funding for a project, and applicants may wish to pursue 
other Federal grant or loan vehicles. Such additional funding sources 
will not become part of the PNRS FFGA. However, FHWA will work with 
applicants to coordinate the application for, and administration of, 
other Federal funding.

Section 505.7 Eligibility

    Comments received for section 505.7 expressed particular concern 
regarding how the statute's eligibility requirements might be applied 
in the case of multistate projects. The legislation that authorized the 
PNRS Program does not seem to contemplate such projects, although, as 
discussed above, many of the significant projects will involve more 
than a single State. The FHWA will accommodate these circumstances, by 
allowing a multistate project to be eligible, if it has costs that 
equal or exceed the lesser of $500 million or 75 percent of the Federal 
highway apportionment to the State in which the project is located that 
has the largest apportionment. This principle has been incorporated in 
the final rule, and the eligibility presentation has been clarified in 
an amended format.
    Other commenters suggested eligibility for projects already 
underway, the costs of which might not meet the statutory threshold, 
urged eligibility for smaller projects, or recommended an increase in 
the threshold to $1 billion. In light of the eligibility requirements 
and constraints of the authorizing statute, FHWA cannot change the 
threshold levels in the final rule. In determining the cost threshold 
for a project currently underway or a multiphase or multipart project, 
the applicant will need to define the functional relationship and 
demonstrate how the components are comprehensively linked together in a 
plan or program that is being undertaken in a near term and contiguous 
timeframe. Applicants will need to demonstrate that the program of 
related projects provides benefits that could not be realized if they 
were considered as stand alone or independent projects. Additionally, 
projects that are currently listed in section 1301(m) of SAFETEA-LU 
will not be treated any differently than any other submissions. They 
will have to compete with all other applicants for any new 
discretionary funding that becomes available to the program in future 
authorization or appropriations acts.

Section 505.9 Criteria for Grants

    The FHWA received 120 comments on section 505.9. This represents 
approximately one half of all comments received to the docket. In the 
final rule, FHWA has reordered some sub-sections under section 505.9 to 
provide the

[[Page 63365]]

reader with a clearer presentation of the criteria.

General Criteria

    The FHWA received 15 comments regarding section 505.9 that referred 
to general criteria for the PNRS Program rather than the specific 
criteria outlined in the rulemaking. Some of these comments focused on 
the modal intentions of the Program while others suggested the use of 
additional or different criteria.
    Comments focused on the modal intentions of the Program noted a 
perceived highway bias and lack of criteria regarding multimodalism. 
Although the rulemaking does not include multimodalism specifically as 
part of the criteria, FHWA believes it is clear from the law and from 
the discussion of section 505.5 above, that multimodal projects are 
eligible for this Program as long are they are Title 23 eligible. There 
is no intended bias toward highways that should be discerned in the 
rulemaking. There are also no criteria targeted toward multimodalism 
because there is no indication of the need for such criteria in the 
legislative language.
    Comments relating to the imposition of additional criteria on 
potential projects focused on political, institutional, and technical 
feasibility of a project. Under the suggested institutional and 
political feasibility criteria, whether the project is likely to move 
forward based on political and institutional factors, was proposed as a 
relevant test. The FHWA agrees that institutional feasibility is an 
important element for successfully undertaking projects of national and 
regional significance. However, independent criteria specifically 
measuring political or institutional feasibility analysis are not 
required because a State DOT is unlikely to be able to complete PE, 
secure matching funds, and propose a project of the magnitude 
contemplated under this Program without strong political support. The 
FHWA determined that institutional feasibility can be demonstrated 
through a combination of other criteria and identification that the 
project emerged from the metropolitan and statewide planning process. 
In consideration of this comment and other comments relating to 
financial feasibility, FHWA has added section 505.9(a)(3) to the final 
rule that states a proposed project must emerge from the metropolitan 
and statewide planning process. This addition is intended to clearly 
indicate that proposed projects need to go through the transportation 
planning and programming processes as required by Federal regulations. 
These processes, including long-range plans and transportation 
improvement programs, provide a level of assurance that there is 
institutional support and financial stability for the project. As an 
additional check, regardless of a project's rating, a FFGA will be 
entered into only after the project has commitments for non-Federal 
funding in place and all other requirements are met. Regarding 
technical feasibility, the FHWA believes technical feasibility can be 
demonstrated through analysis of other criteria and does not require a 
stand-alone criterion.
    Commenters also suggested that the PNRS should follow different 
selection criteria than those proposed in the rule. In particular, it 
was recommended that FHWA use selection criteria from the Corridors of 
the Future Program and the Executive Order on Environmental Stewardship 
and Transportation Project Process Review (Executive Order 13274). In 
related suggestions, commenters recommended the PNRS Program be used to 
implement projects identified under these programs. The Corridors of 
the Future Program and Executive Order on Environmental Stewardship and 
Transportation Project Process Review use a separate selection process 
with review of the projects based on a different set of established 
criteria and therefore cannot be used as the criteria for PNRS project 
selection.

Section 505.9(a)(1)

    Commenters expressed that the requirement for PE to be completed 
prior to applying for a grant was too heavy a burden and could exclude 
some worthwhile projects. However, another commenter agreed with the PE 
requirement on the grounds that it provides sufficient evidence for 
FHWA to properly review the project. The FHWA cannot change this 
requirement to evaluate PE results because it is required by the PNRS 
statute. Nonetheless, PE is just one evaluation criterion, and this 
language does not preclude from consideration proposals for projects 
that have not performed PE. In response to these suggestions, FHWA has 
added language to the final rule under section 505.11 to provide States 
with additional flexibility in submitting proposals for consideration 
while preserving the statutorily specified PE criteria. Further, as 
mentioned above in the discussion regarding section 505.5, PE costs may 
be reimbursed once a project is funded with a FFGA if the cost is 
appropriate and authorized prior to being incurred, pursuant to Title 
23, United States Code.

Section 505.9(a)(2)

    The FHWA received a few comments on section 505.9(a)(2). One 
commenter expressed support for including evidence of the stability of 
any potential funding sources, which was proposed in the NPRM. After 
reviewing this comment and other comments pertaining to institutional 
feasibility, FHWA determined that clarifying language relating to the 
need for all projects to emerge from the metropolitan and statewide 
planning processes as required by Federal law and regulation should be 
added to the rule text. This was added under section 505.9(a)(3). In 
addition, commenters suggested allocation of public and private costs 
in accordance with risk and benefit should be a potential evaluation 
criterion. The FHWA agrees with the concept of delineating the 
allocation of public and private costs and benefits derived from a 
project. In response, FHWA has adopted these comments in section 
505.9(a)(4)(ii) of the final rule.
    To provide for a more coherent presentation in the final rule, FHWA 
has consolidated the proposed rule's section 505.9(c), factors in 
evaluating a non-Federal financial contribution, into this section. The 
FHWA received several comments on the proposed rule's section 505.9(c), 
mostly requesting additional information, about the contingency amounts 
required to cover unanticipated cost increases on a project. The FHWA 
plans to follow industry and agency standards with respect to these 
issues.

Section 505.9(a)(3)

    This is a new subsection the FHWA added to provide additional 
emphasis and clarity relating to the point at which PNRS projects must 
emerge from the metropolitan and statewide planning processes, 
consistent with 23 CFR Part 450. As discussed previously, this 
subsection was added in response to comments relating to political, 
institutional, and financial feasibility as well as stability of 
funding.

Section 505.9(a)(4)(i)

    This is a renumbered section 505.9(a)(3)(i) from the proposed rule. 
The FHWA received a number of comments regarding the economic benefits, 
jobs, and business opportunities that could be used to justify a PNRS 
project. The FHWA interprets the consideration of economic benefits in 
the project justification criteria as pertaining to those benefits 
realized from solving current transportation problems through

[[Page 63366]]

increased throughput that is derived from completing the PNRS project. 
This is in contrast to economic benefits associated with the actual 
construction of the project or for projects whose primary purpose is to 
serve as a tool to create new areas of economic development rather than 
to solve an existing transportation problem. The FHWA has incorporated 
this clarification in the final rule.
    One idea echoed by two commenters was that both regional and 
national economic benefits must exist, rather than one or the other. 
The FHWA supports this concept and hopes that projects will create both 
types of benefits, but recognizes the wide range of potential projects 
and the need to provide flexibility to States when analyzing the 
benefits. As a point of clarification regarding the definition of a 
region, for the purpose of evaluating a project proposal's economic 
impacts, FHWA interprets a region to be based upon the: (1) Origin and 
destination patterns of traffic using the facility, (2) geography of 
the areas served by freight and passenger movement that use the 
facility or are affected by this facility, and (3) other facilities 
directly affected by the project.
    Another commenter emphasized the idea that projects under this 
Program should be targeted toward existing, rather than generating, 
economic value. The law is very specific that projects are to be 
justified on the basis of their ability to generate economic benefits. 
However, it is likely that any such project would also have substantial 
existing economic value. With respect to job creation, commenters 
expressed that sustaining existing jobs is as important as creating new 
ones and this should be reflected in the rule. Although this is a 
useful distinction, it is not a distinction made in the law. Commenters 
provided a number of specific measures relating to business 
opportunities, including costs, productivity and impacts to American 
made goods. The FHWA believes these themes are currently captured in 
the economic benefit and congestion reduction criteria, and the listing 
of specific measures should not be made in the rule. However, FHWA does 
believe that the rule should provide additional specificity and clarity 
for the economic benefit criteria based on these comments. The FHWA has 
added additional specificity to the criteria in section 505.9(a)(4)(i) 
of the final rule that incorporates the amount of demographic and 
economic activity of the area served by a given project. A commenter 
indicated the need to be able to compare the impacts of not 
constructing the project versus constructing a project. In response, 
section 505.9(d) was added to the final rule to address the requirement 
for information to include projections for both the build and no-build 
scenarios.
    Several commenters expressed a general concern about the 
subjectivity, comparability and cost involved in undertaking a full 
cost-benefit analysis, and indicated a preference for the use of other 
measures. In reviewing these comments, FHWA has determined that it will 
not prescribe a specific cost-benefit analysis methodology, but will 
allow the applicant to determine how to apply such an analysis in 
presenting information about the project. However, with this cost-
benefit flexibility and concerns raised about subjectivity of economic 
analysis, FHWA has determined that all information submitted as part of 
or in support of an application shall use publicly available data or 
data that can be made public and methodologies that are accepted by 
industry practice and standards. This has been reflected in language 
added to section 505.9(c) in the final rule.
    Additionally, in response to these comments and related comments 
submitted on other sections of the rule, FHWA has added criteria to the 
final rule that requires the application to show a clear allocation of 
public and private costs commensurate with the share of public and 
private benefits and risks for the project. This is reflected in 
section 505.9(a)(4)(ii).
    Many comments addressed the idea that the level of freight volumes 
carried is of prime importance when assessing whether a project is 
justified, and that ports, international gateways and intermodal 
facilities deserve similar emphasis. Other related comments discussed 
national transportation system function. The FHWA believes that 
effective freight movement is vital for economic activity and is an 
extremely important component of the goals of the PNRS Program. The 
facilitation of freight and passenger movement is highlighted in the 
law and mentioned in a number of comments. In response to these 
comments, FHWA has included language in the final rule creating 
specific evaluation criteria in this section focused on the amount and 
importance of freight and passenger travel served.

Section 505.9(a)(4)(ii)

    As mentioned above, in response to comments on section 
505.9(a)(4)(i) (proposed section 505.9(a)(3)(i)) and related comments 
submitted on other sections of the rule, FHWA has added this subsection 
to the final rule as a criterion that requires the application to show 
a clear allocation of public and private costs commensurate with the 
share of public and private benefits and risks for the project.

Section 505.9(a)(4)(iii)

    This is a renumbered section 505.9(a)(3)(ii) from the proposed 
rule. Several commenters applauded the use of congestion as a necessary 
criterion and suggested additional ways to emphasize it in the final 
rule. These suggestions included condition and performance of the 
gateway, hub or corridor, impact on freight mobility, as well as 
distinguishing local and national congestion. Reducing congestion is an 
important criterion for eligibility and FHWA included language in the 
final rule to reflect the additional emphasis and focus suggested in 
the comments. The new language calls particular attention to delays and 
consequences, as well as the efficiency and effectiveness, of 
congestion mitigation.

Section 505.9(a)(4)(iv)

    This is a renumbered section 505.9(a)(3)(iii) from the proposed 
rule. One commenter suggested that larger trucks are unsafe and should 
not be permitted on highways. This is out of the scope of this 
rulemaking. However, FHWA believes additional clarifying language 
should be included in the final rule with regard to the specific 
criteria for this section. The FHWA included language specifying that 
the evaluation criteria would include number, rate and consequences of 
crashes, injuries and fatalities in the affected region and corridor. 
The FHWA believes proposed projects need to take a comprehensive 
approach to safety and evaluate safety impacts on a regional basis. 
Information on how the proposed project will improve transportation 
safety should be consistent with the State Strategic Highway Safety 
Plan or Regional Safety Plan.

 Section 505.9(a)(4)(v)

    This is a renumbered section 505.9(a)(3)(iv) from the proposed 
rule. The FHWA received several comments about what it means to enhance 
the national transportation system and how qualitative criteria will be 
evaluated. Suggestions included projects that are critical for 
evacuation, cross multiple State boundaries, connect corridors or hubs, 
and/or link across natural barriers. These are all suggestions that may 
be considered enhancements of the national transportation system. 
However, the merit of each specific enhancement is largely dependent on 
the context and specifics of the individual project as well as the 
needs

[[Page 63367]]

of the national transportation system at the time of project 
solicitation. The FHWA believes States should be given flexibility to 
develop a specific justification for how a proposed project enhances 
the national transportation system. Further, due to the continuously 
evolving needs of the Nation's transportation system, FHWA believes a 
project solicitation is the appropriate place to provide specific focus 
areas related to the current needs of the national transportation 
system and measures to rate enhancements to the system. In 
consideration of these comments, FHWA did provide a clarification in 
the final rule that indicates criterion of enhancements to the national 
transportation system relates to the concept of improving throughput.

Section 505.9(a)(4)(vi)

    This is a renumbered section 505.9(a)(3)(v) from the proposed rule. 
Comments relating to the topic are discussed above in the discussion of 
section 505.9(a)(2).

Section 505.9(b)(1)

    Several commenters suggested that public-private partnerships 
(PPPs) are unnecessary or irrelevant for inclusion as a criterion in 
this rule. PPP is a required evaluation criterion in the authorizing 
statute. PPPs encompass a wide variety of arrangements, and the FHWA 
believes they can provide the support necessary for a successful 
project and can leverage Federal investments. The level to which PPP 
involvement will factor into the selection process will be determined 
through the solicitation process, not through this rule.
    There were several comments raised with respect to measuring 
contributions. One question raised by a commenter is whether private 
activity bonds (PABs) or TIFIA contributions to a project would be 
considered as part of the ``non-Federal'' contribution. Other 
commenters questioned how FHWA would define a ``non-Federal'' 
contribution and suggested that Federal investment programs from other 
Federal agencies should count as leveraging investment. Under general 
appropriations principles, a grantee may not use funds provided under 
another Federal program as a non-Federal match unless specifically 
authorized by law. However, this rule does not apply to Federal loans. 
Loans, unlike grants, are expected to be repaid by the recipient using 
its own funds. As a clarification, funds from State and local 
governments and proceeds from Federal loans count toward the non-
Federal share, and these are certainly encouraged. Thus, PABs or TIFIA 
contributions to a project would be considered part of the ``non-
Federal'' contribution. However, FHWA cannot accommodate the comments 
requesting that other Federal grant programs be considered part of the 
non-Federal contribution in the final rule because, as noted above, a 
grantee may not use funds provided under another Federal program as a 
non-Federal match unless specifically authorized by law. Finally, one 
commenter suggested that the ability of a project to attract outside 
funding should not be part of the criteria at all. The law is clear 
about outside funding being part of the rule, as the idea is to 
encourage as much non-Federal investment as possible. Therefore, the 
final rule was not changed in this regard.
    One commenter expressed concern that private companies will not 
agree to PPPs if funding is not provided for an entire program of 
integrated or related sub-projects of a given proposal. There is 
nothing in the final rule that prevents funding for a full program for 
eligible projects.
    Two commenters suggested that the non-Federal contributions to the 
project should be allowed on a ``pay-as-you-go'' basis. The FHWA will 
permit this method as long as the constrained long-range transportation 
plan for the region shows concrete evidence of stable and dependable 
funding sources for the entire project.

Section 505.9(b)(2)

    The agency received no comments regarding this section and made no 
changes to the final rule.

Section 505.9(b)(3)

    One commenter suggested that the PNRS evaluation criteria should 
include whether a project both improves and protects the environment, 
instead of one or the other. This is a subtle distinction given that 
the legislative language simply requires consideration of the extent to 
which the project helps maintain or protect the environment and a 
project could theoretically be approved even if it fails to do either. 
Although the idea that the project should aim to do both is a very 
reasonable one, the law uses the word ``or'' and therefore it will not 
be changed in the final rule.
    There were several suggestions in the comments for additional and 
more specific environmental criteria to clarify the meaning of 
``maintaining or improving'' the environment including air quality, 
energy use, water quality, and environmental streamlining. The FHWA 
believes these are more measures than criteria and thinks it best that 
States should be given the flexibility to quantify how the projects 
maintain or improve the environment. Examples of how different 
parameters could be quantified can be included in project solicitations 
or guidance documents.

Section 505.9(b)(4)

    A commenter suggested that a proposed project should demonstrate 
the need for Federal support and participation because multiple 
jurisdictions or the private sector are affected and there are no non-
Federal mechanisms to implement the project. The FHWA agrees with this 
suggestion and believes that a project should demonstrate why it 
requires Federal support beyond apportioned Federal-aid funding. The 
FHWA has added this concept to the list of factors to consider when 
evaluating a proposed project.

Section 505.9(c)

    To provide for a more coherent presentation in the final rule, FHWA 
has consolidated the proposed rule's section 505.9(c) into section 
505.9(a)(2) as discussed above. The FHWA replaced the text of section 
505.9(c) in the final rule with language regarding the use of publicly 
available data or data that can be made public and methodologies that 
are accepted by industry practice and standards. This was added to the 
final rule in response to comments regarding the PNRS criteria and the 
FHWA's belief that additional guidance and clarification was required.

Section 505.9(d)

    The FHWA added this subsection which requires that measures for the 
selection criteria include projections for build and no-build 
scenarios. This was added in response to comments regarding the 
criteria and FHWA's belief that additional guidance and clarification 
was required. A commenter questioned if a build/no build scenario could 
be undertaken when the PNRS project involves replacement or major 
upgrade of an existing facility. The FHWA believes that an applicant 
can undertake this type of analysis by comparing the impacts of not 
undertaking the project with the impacts of undertaking the project.

Section 505.9(e)

    This section clarifies elements of the PNRS solicitation process. 
This section was added by FHWA in response to comments suggesting the 
identification of specific measures and weighting for the criteria. The 
FHWA believes these issues are most appropriately handled through the 
solicitation process or

[[Page 63368]]

guidance documents rather than rulemaking. The FHWA intends to use 
guidance documents or solicitations to provide applicants with 
additional specific information related to the use of the evaluation 
criteria identified in the rule.

Section 505.9(f)

    The FHWA received comments that all projects under this Program 
should comply with section 1904 of SAFETEA-LU which requires a 
financial and management plan for all projects. The FHWA agrees and has 
included language in the final rule under this section to clarify that 
all proposed PNRS projects are required to follow the FHWA's Major 
Project Guidance regardless of whether they meet project cost 
thresholds for classification as a major project.

Section 505.11 Project Evaluation and Rating

    The FHWA received 15 comments on section 505.11. One commenter 
suggested that a new category should be included that covers projects 
that are not yet ready for recommendation. The law clearly delineates 
the required categories leaving the agency no discretion to create 
additional ones. However, the FHWA will notify every State applicant of 
the rating for its application. This will permit a State to withdraw 
any applications which are not strong candidates for funding under this 
Program. The ratings will remain in effect until FHWA issues a new 
project solicitation. At the time of a new solicitation, an applicant 
may choose to submit a new or revised application, or choose to submit 
a letter to FHWA indicating that the current application should again 
be considered.
    Two commenters suggested the use of a point system, or weighting 
various criteria, to provide greater clarity in FFGA ratings. Other 
commenters proposed factors that must be demonstrated to achieve a 
highly recommended rating for the various criteria and suggested a two-
tiered rating process. The FHWA has determined that a point system 
determination and weighting of criteria are most appropriately handled 
through a PNRS project solicitation or guidance documents rather than 
in a rulemaking. The PNRS solicitation or guidance documents are the 
appropriate vehicles to provide additional information on the weights 
and points assigned to the various criteria and measures.
    One commenter suggested that FHWA could recommend projects which 
are highly rated under the PNRS for funding in other discretionary 
programs. Each FHWA discretionary program has statutorily defined 
criteria. Thus, a project that satisfies the PNRS criteria may not 
automatically satisfy the criteria for another discretionary program. 
Therefore, the final rule cannot accommodate language that would 
automatically qualify PNRS projects for another discretionary program. 
However, FHWA will work with applicants to coordinate applications for, 
and the administration of, other Federal programs.
    Several commenters addressed the idea of how to choose between 
qualified projects. One suggestion was to fund a limited number of 
projects nationally from this Program. The number of projects funded 
ultimately depends on the overall amount of funding available for this 
Program, which at this point is unknown. The FHWA plans to recommend 
funding the highest rated projects based on the outlined criteria, and 
those projects will be recommended for FFGAs. Another commenter 
suggested FHWA configure a protocol for deciding between projects 
ranked in the ``Highly Recommended'' category, in case there are too 
many projects in that category. The FHWA does not anticipate providing 
rankings within rating categories. However, as with the points and 
weight discussion above, if necessary, the PNRS solicitation or 
guidance documents will provide additional information on this topic.
    There were several comments regarding ongoing projects, including a 
suggestion that a constant process of evaluation and selection would be 
useful. The FHWA has added language to the final rule that clarifies 
that any rating or evaluation is good until the next evaluation is 
performed.
    Several comments also addressed the issue of the current projects 
under the Program, and whether these projects will need to be 
evaluated. As discussed in the summary and background sections, the 
funding currently authorized in SAFETEA-LU section 1301 for the 25 
projects designated in subsection (m) of section 1301 is not subject to 
the criteria established in this part, and these projects will not be 
subject to the evaluation and rating as proposed in this part in order 
to receive the SAFETEA-LU authorized funding. However, projects 
currently designated under SAFETEA-LU section 1301(m) will be required 
to compete in the evaluation and rating process for any new or 
additional discretionary funding that is authorized for this Program.
    A suggestion was made that States should be able to submit projects 
for evaluation after completion of a draft environmental impact 
statement. The FHWA has modified the language of the final rule to 
allow flexibility on when applications can receive a rating, allowing 
non-binding ratings and evaluations any time in the project development 
process after the project's concept plan is developed. These non-
binding preliminary ratings and evaluations will be reported in the 
appendix of the Secretary's Annual Report on PNRS. Any project that has 
completed PE would be subject to a complete and final evaluation. At 
that time, a rating and evaluation will be considered complete and 
listed in the Secretary's Annual Report on PNRS along with a 
recommendation on funding.

Section 505.13 Federal Government's Share of Project Cost

    The FHWA received 10 comments on section 505.13. One commenter 
suggested that the Federal Government should be responsible for cost 
escalations that are caused by Federal processes. The FHWA does not 
believe that complying with Federal laws and regulations should be 
considered a cost escalation for a project. As such, the final rule 
does not address this comment.
    Comments in this section again addressed the issue of Federal 
funding for PE. As is the case for similar Federal grant programs, this 
program will be able to reimburse PE work for those projects receiving 
a FFGA, or those projects can use the non-Federal funds spent on PE 
toward the State's matching share. The FHWA has added clarifying 
language relating to this issue in section 505.15.
    Another comment specific to this section suggested that financing 
costs associated with assistance of bonds be included in the FFGA. As 
mentioned previously in the discussion of the comments under section 
505.5, the final rule has been amended to make it clear that debt 
expenses covered under Title 23 are eligible to be included in the 
FFGA.
    In general, several comments expressed appreciation for this 
Program and the fact that it will advance large nationally significant 
projects that might otherwise be impossible to undertake from a 
financial perspective.

Section 505.15 Full Funding Grant Agreement

    The FHWA received nine comments relating to section 505.15. General 
comments on this section and others included the suggestion that only 
highway projects should be eligible for an FFGA under this Program. 
This would be incompatible with Title 23

[[Page 63369]]

eligibility, which is what is prescribed in the law. In fact, the 
interpretation of eligibility is intended to be as broad as possible 
rather than excluding any particular mode. As such, FHWA did not make 
this change to the final rule.
    One commenter suggested that something other than an FFGA should be 
used for projects where less than 25 percent of the cost is provided by 
the Program. The idea would be to use a simplified grant vehicle with a 
provision to prevent cost overruns that make FHWA responsible for 
unexpected costs. The FFGA is required by the authorizing statute to be 
used as the funding mechanism for this Program. Additionally, FHWA 
believes there is sufficient flexibility in the FFGA mechanism to 
appropriately scale the agreement to a project's complexity, size, 
funding situation, and percentage of the total costs that will be 
covered. Therefore, FHWA has not changed the language in the final 
rule.
    Two commenters suggested that projects in this Program be 
automatically included in the Special Experimental Program No. 15 (SEP-
15) for PPPs, or the Executive Order on Environmental Stewardship and 
Transportation Project Process Review (Executive Order 13274). After a 
review of these programs, FHWA determined that automatic inclusion in 
either program is not possible or desirable, as projects must be 
evaluated on a case-by-case basis through a process specified for each 
program. The SEP-15 program is designed for use on a project-by-project 
basis to experiment with solutions to impediments in Title 23, the 
regulations under Title 23, and FHWA policy, to the use of PPPs and 
innovative project delivery techniques. However, a given project may 
not wish to employ any experimental features. The FHWA could provide 
priority to PNRS projects, but since SEP-15 has no predetermined 
limitations on numbers of projects, priority, as such, is not an issue. 
The Executive Order on Environmental Stewardship and Transportation 
Project Process Review uses a separate selection process with review of 
the project based on a different set of established criteria. 
Therefore, FHWA did not include language that provides automatic 
inclusion in the SEP-15 or Executive Order programs. The FHWA 
encourages applicants to consider applying to the SEP-15 program if the 
project could utilize techniques that provide solutions to impediments 
to the use of PPPs and innovative project delivery. The FHWA will work 
with applicants to coordinate the application for, and administration 
of, other Federal programs.
    One commenter suggested that FHWA commit to providing recommended 
projects priority consideration under innovative financing programs 
such as TIFIA. Since one of the TIFIA program's eight statutory 
selection criteria requires an assessment of a project's national or 
regional significance, any project selected under PNRS would meet at 
least partially the objectives of TIFIA, which provides credit 
assistance up to 33 percent of a project's eligible costs. Because a 
TIFIA loan application must meet additional requirements (such as 
creditworthiness) not considered under PNRS, such priority 
consideration may not be appropriate. Accordingly, FHWA did not add 
language to the final rule providing priority consideration under the 
TIFIA program. However, FHWA will work with applicants to identify 
opportunities to pursue TIFIA and other innovative Federal financial 
assistance, ensuring that a TIFIA application, if forthcoming, would be 
coordinated within the agency.
    One commenter expressed concern that it is unrealistic to expect 
that all funding could be guaranteed by non-Federal sources prior to 
implementation. Although the difficulty of such an expectation is 
understood, it is nonetheless important that commitments from other 
sources be in place before FHWA commits to an FFGA. The rule has been 
modified to clarify this point.
    The rule also adds language in response to comments concerning the 
reimbursement of expenses as mentioned in the section 505.13 
discussion. Specifically, language was added that clarifies that the 
use of Advance Construction can be requested and then converted to PNRS 
funding, or other eligible Federal-aid funding, as part of an FFGA. 
Advanced Construction approval does not constitute a commitment that 
future Federal funds will be approved for the project, and all Federal 
requirements must be met prior to incurring costs in order to retain 
eligibility for future FHWA grant assistance.

Section 505.17 Applicability of Title 23, U.S. Code

    The FHWA received two comments on section 505.17. One commenter 
encouraged DOT and the Surface Transportation Policy and Revenue Study 
Commission to advocate wider eligibility for this Program as we move 
toward the next statutory reauthorization. This suggestion is not 
directly relevant to this rulemaking, and FHWA did not make any changes 
to the final rule.
    The other comment on this section suggested removing the 
prohibition on allowing funds to be transferred to other agencies 
because this may impair multimodal projects. The possibility of 
impairment notwithstanding, this prohibition is specifically stated in 
the authorizing statute and cannot be removed through a regulatory 
process. The FHWA recognizes the importance of involving other DOT 
agencies during the evaluation and administration of certain multimodal 
projects. To the extent practicable, FHWA will engage other DOT modal 
agencies in the evaluation and administration of multimodal projects in 
this program.

Rulemaking Analyses and Notices

Executive Order 12866 (Regulatory Planning and Review) and DOT 
Regulatory Policies and Procedures

    The FHWA has determined that this action would be a significant 
rulemaking action within the meaning of Executive Order 12866 and would 
be significant within the meaning of the U.S. Department of 
Transportation's regulatory policies and procedures. This rulemaking 
establishes evaluation and rating procedures for Projects of National 
and Regional Significance as mandated in section 1301 of SAFETEA-LU.
    The Projects of National and Regional Significance program is a 
newly created and complex program, receiving substantial Federal 
funding. This action is considered significant because of the 
substantial State and local government, and public interest in the 
administration of this newly created program. Because this program is 
dedicated to constructing critical high-cost transportation 
infrastructure facilities that address critical national economic and 
transportation needs, it is essential for FHWA to develop evaluations 
and rating criteria to ensure that selected projects will further the 
goals of the program.
    This rule is not anticipated to adversely affect, in a material 
way, any sector of the economy. This rulemaking sets forth evaluation 
and ratings criteria for project proposals in the Projects of National 
and Regional Significance Program, which will result in only minimal 
cost to program applicants. In addition, this rule would not create a 
serious inconsistency with any other agency's action or materially 
alter the budgetary impact of any entitlements, grants, user fees, or 
loan programs. Consequently, a full regulatory evaluation is not 
required.

[[Page 63370]]

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 
5 U.S.C. 601-612) we have evaluated the effects of this action on small 
entities and have determined that the action will not have a 
significant economic impact on a substantial number of small entities.
    The rule addresses evaluation and rating procedures for States 
wishing to submit project proposals for Projects of National and 
Regional Significance. As such, it affects only States and States are 
not included in the definition of small entity set forth in 5 U.S.C. 
601. Therefore, the Regulatory Flexibility Act does not apply, and the 
FHWA certifies that this action would not have a significant economic 
impact on a substantial number of small entities.

Unfunded Mandates Reform Act of 1995

    This rule does not impose unfunded mandates as defined by the 
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4; 109 Stat. 48). 
This rule will not result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of 
$136.1 million or more in any one year (2 U.S.C. 1532). Additionally, 
the definition of ``Federal Mandate'' in the Unfunded Mandates Reform 
Act excludes financial assistance of the type in which State, local, or 
tribal governments have authority to adjust their participation in the 
program in accordance with changes made in the program by the Federal 
Government. (2 U.S.C. 658, 1502). The Federal-aid highway program 
permits this type of flexibility.

Executive Order 13132 (Federalism Assessment)

    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13132, and the FHWA has 
determined that this action would not have sufficient federalism 
implications to warrant the preparation of a federalism assessment. The 
FHWA has also determined that this action would not preempt any State 
law or State regulation or affect the States' ability to discharge 
traditional State governmental functions.

Executive Order 12372 (Intergovernmental Review)

    Catalog of Federal Domestic Assistance Program Number 20.205, 
Highway Planning and Construction. The regulations implementing 
Executive Order 12372 regarding intergovernmental consultation on 
Federal programs and activities apply to this program.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501), 
Federal agencies must obtain approval from the Office of Management and 
Budget (OMB) for each collection of information they conduct, sponsor, 
or require through regulations. The FHWA has determined that this 
proposal does not contain collection of information requirements for 
the purposes of the PRA. The FHWA does not anticipate receiving project 
proposals from ten or more States in any given year because of the 
nature of the projects eligible under the PNRS program. These projects 
are critical, high-cost transportation infrastructure facilities that 
often include multiple levels of government, agencies, modes of 
transportation, and transportation goals and planning processes that 
are not easily addressed or funded within existing surface 
transportation program categories. In fact, the Congress has identified 
only 25 such projects for funding over the 5-year authorization period 
currently established for this program.

National Environmental Policy Act

    The agency has analyzed this proposed action for the purpose of the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321-4347) and has 
determined that the establishment of the evaluation and rating 
procedures for proposed Projects of National and Regional Significance, 
as required by the Congress in SAFETEA-LU, would not have any effect on 
the quality of the environment.

Regulation Identification Number

    A regulation identification number (RIN) is assigned to each 
regulatory action listed in the Unified Agenda of Federal Regulations. 
The Regulatory Information Service Center publishes the Unified Agenda 
in April and October of each year. The RIN contained in the heading of 
this document can be used to cross reference this action with the 
Unified Agenda.

List of Subjects in 23 CFR Part 505

    Grant programs--transportation, Highways and roads, Intermodal 
transportation.

    Issued on: October 15, 2008.
Thomas J. Madison,
Federal Highway Administrator.

0
In consideration of the foregoing, the FHWA adds new part 505 to title 
23, Code of Federal Regulations, to read as follows:

PART 505--PROJECTS OF NATIONAL AND REGIONAL SIGNIFICANCE EVALUATION 
AND RATING

Sec.
505.1 Purpose.
505.3 Policy.
505.5 Definitions.
505.7 Eligibility.
505.9 Criteria for grants.
505.11 Project evaluation and rating.
505.13 Federal Government's share of project cost.
505.15 Full funding grant agreement.
505.17 Applicability of Title 23, U.S. Code.

    Authority: Section 1301 of the Safe, Accountable, Flexible, 
Efficient Transportation Equity Act: A Legacy for Users (Pub. L. 
109-59; 119 Stat. 1144); 23 U.S.C. 315; 49 CFR 1.48.


Sec.  505.1  Purpose.

    The purpose of this part is to establish evaluation, rating, and 
selection guidelines for funding proposed Projects of National and 
Regional Significance (PNRS).


Sec.  505.3  Policy.

    A Project of National and Regional Significance should 
quantitatively improve the throughput or provide long term congestion 
relief for passenger or freight movement for a part of the 
transportation network and clearly connect this improvement to 
sustainable economic productivity for the nation or the region in which 
it is located.


Sec.  505.5  Definitions.

    Unless otherwise specified in this part, the definitions contained 
in 23 U.S.C. 101(a) are applicable to this part. In addition, the 
following definitions apply:
    Applicant mean