State Safety Oversight Formula Grant Program, 13380-13387 [2014-05058]

Agencies

• Federal Transit Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 79, Number 46 (Monday, March 10, 2014)]
[Notices]
[Pages 13380-13387]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-05058]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket No. FTA-2013-0022]


State Safety Oversight Formula Grant Program

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Establishment of the State Safety Oversight (SSO) Formula Grant 
Program Formula; Apportionment of Fiscal Years 2013 and 2014 SSO 
Formula Grant Program Funding.

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SUMMARY: The Federal Transit Administration (FTA) is apportioning 
fiscal years (FY) 2013 and 2014 funds for the new State Safety 
Oversight (SSO) Formula Grant Program in accordance with the Moving 
Ahead for Progress in the 21st Century Act (MAP-21). This notice 
apportions the available funding for FYs 2013 and 2014 and provides 
instructions and guidance for this new formula grant program, for which 
funding is available to eligible States to develop or carry out SSO 
Programs (SSOPs) that monitor and improve the safety of rail fixed 
guideway public transportation systems (RFGPTS or rail transit systems) 
in their jurisdictions that are not regulated by the Federal Railroad 
Administration (FRA). This notice also establishes the formula for this 
new grant program and responds to the comments received pursuant to the 
May 13, 2013 Federal Register notice (78 FR 28014) on the illustrative 
apportionment for SSO grant funding.

FOR FURTHER INFORMATION CONTACT: For application-specific information 
and other assistance in preparing a grant application, please contact 
the appropriate FTA Regional Office found at https://www.fta.dot.gov. 
For program-specific questions about certification or eligible grant 
activities as outlined in this notice, please contact Maria Wright, 
Office of Safety and Oversight, 1200 New Jersey Ave. SE., Washington, 
DC 20590, (202) 366-5922, or Maria1.Wright@dot.gov. For legal 
questions, please contact Mary J. Lee, Office of Chief Counsel, 1200 
New Jersey Ave. SE., Washington, DC 20590, (202) 366-9085, or 
Mary.J.Lee@dot.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

A. Overview
B. Definitions For Use In This Notice
C. Background
D. SSO Formula Grant Program
    1. Funding Formula
    2. Comments and Responses
E. SSO Formula Grant Program Requirements
    1. Eligible Recipients
    2. Eligible Activities
    3. Ineligible Activities
    4. Grant Application Procedures
    5. Grant Requirements
    6. Award Administration

A. Overview

    Section 5336(h)(4) of 49 U.S.C. stipulates that FTA must apportion 
0.5 percent of amounts made available to provide financial assistance 
for urbanized areas under 49 U.S.C. 5307 to eligible States for the SSO 
Formula Grant Program. For FY 2013, $21,945,771 is available for 
eligible States to develop or carry out SSOP activities described in 49 
U.S.C. 5329(e). For FY 2014, $22,293,250 is available under the SSO 
Formula Grant Program. These amounts are being apportioned according to 
the established formula in this notice. The final apportionment amounts 
are set forth in Table 13 on FTA's Web site: https://www.fta.dot.gov/grants/15105.html.

B. Definitions for Use In This Notice

    Applicant: The Governor-designated State entity that applies for 
the SSO Formula Grant Program funds and later becomes the grant 
recipient that carries out the grant funding responsibilities on behalf 
of the State.
    Eligible State: A State that has: (1) A rail transit system, as 
defined below, within the jurisdiction of the State, that is not 
subject to regulation by the FRA, or (2) a rail transit system in the 
engineering or construction phase of development that will not be 
subject to regulation by the FRA.
    Engineering or Construction phase of development: a project phase 
that involves completing significant design work, refining project 
scope and cost estimates, preparing construction documents, and 
securing local funding commitments.
    At a minimum, for a project in engineering or construction to be 
included in the SSO Formula Grant Program, the project must: (1) Have 
completed the National Environmental Policy Act (NEPA) of 1969 if it 
will be a federally funded project as demonstrated by a determination 
that the project is categorically excluded from review under NEPA, 
issuance of a Finding of No Significant Impact, or issuance of a Record 
of Decision; and (2) have demonstrated local financial commitment. FTA 
will monitor projects used in the SSO Formula Grant Program and 
reserves the right to change its initial eligibility determination if 
there are significant changes to the level of financial commitment to a 
project or the project is not making adequate progress.
    National Transit Database (NTD) Reporter: a rail transit system 
that reported service data or capital expenditure data to the NTD in 
the most recent Reporting Year.
    Out-of-Service rail transit system: A previously-operational system 
that has discontinued rail transit operations for more than one year, 
as indicated by having reported zero service data in the NTD for the 
most recent Report Year.
    Public Transportation: Section 5302(14)(A) of the U.S.C. provides 
that public transportation means ``regular, continuing shared-ride 
surface transportation services that are open to the general public or 
open to a segment of the general public defined by age, disability, or 
low income. . . .'' Section 5302(14)(B) of 49 U.S.C. establishes seven 
types of service that are excluded from the definition of Public 
Transportation. Accordingly, FTA will exclude any non-public 
transportation systems listed in 49 U.S.C. 5302(14)(B) that a State may 
have reported in its

[[Page 13381]]

annual report. Applicable exclusions include, among others, sightseeing 
service and intra-terminal or intra-facility shuttle services.
    Rail fixed guideway public transportation system (RFGPTS or rail 
transit system): For purposes of this notice, a RFGPTS is a fixed 
guideway system, including, but not limited to, light, heavy, hybrid, 
or rapid rail system, monorail, inclined plane, funicular, trolley, 
cable car, streetcar, or automated guideway, that is not regulated by 
the FRA, or any such system in the engineering or construction phase of 
development. This definition excludes systems such as aerial tramways, 
ferry boats, trackless trolleys, trolleybuses, and bus rapid transit.
    Recipient or grantee: A State entity that receives Federal transit 
funds directly from FTA to support its SSOP.
    State: Includes all of the fifty States, the District of Columbia, 
the Commonwealth of Puerto Rico, the Commonwealth of the Northern 
Mariana Islands, American Samoa, Guam, and the Virgin Islands. A State 
is eligible for SSO Formula Grant Program funds only if it meets the 
definition of an eligible State as defined in this notice.
    State Safety Oversight Agency (SSOA): A public entity in compliance 
with 49 U.S.C. 5329(e)(4) that implements the SSOP requirements for the 
State.
    State Safety Oversight Program (SSOP): The program implemented by 
the eligible State and its designated SSOA to address 49 U.S.C. 5329(e) 
requirements and objectives.

C. Background

    Prior to MAP-21, Public Law 112-141, except under limited 
circumstances, FTA was prohibited from regulating the operation, 
routes, or schedules of a public transportation system, which included 
much of rail transit safety. See 49 U.S.C. 5334(b)(1), as amended by 
the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A 
Legacy for Users (SAFETEA-LU), Public Law 109-59. What safety authority 
FTA had over rail transit safety was limited to the authority 
delineated under 49 U.S.C. 5330 (Section 5330). Section 5330 provides 
limited authority for States to oversee the safety of rail transit 
systems in their jurisdictions with no Federal funding to support such 
oversight activities.
    MAP-21 provides funding for States to develop or carry out their 
SSOPs that meet the requirements under 49 U.S.C. 5329(e)(3), as amended 
by MAP-21, which include, among other things:
     Overseeing rail transit safety;
     Adopting and enforcing Federal and relevant State laws on 
rail transit safety;
     Establishing an SSOA;
     Determining, in consultation with FTA, an appropriate 
staffing level for the SSOA that is commensurate with the number, size, 
and complexity of the rail transit system(s) in the State;
     Requiring that employees and other designated personnel of 
the eligible SSOA who are responsible for rail transit oversight are 
qualified to perform such functions through appropriate training, 
including successful completion of the public transportation safety 
certification training program, which is being established under 49 
U.S.C. 5329(c); and
     Prohibiting any public transportation agency from 
providing funds to the SSOA.
    Per 49 U.S.C. 5329(e)(4), the SSOA must meet the following 
requirements:
     Has financial and legal independence from any public 
transportation entity the SSOA oversees;
     Does not directly provide public transportation services 
in an area with a rail transit system subject to the requirements of 49 
U.S.C. 5329;
     Does not employ any individual who is also responsible for 
the administration of rail transit programs subject to the requirements 
of 49 U.S.C. 5329;
     Has the authority to review, approve, oversee, 
investigate, and enforce the implementation by the rail transit agency 
of the public transportation agency safety plan required under 49 
U.S.C. 5329(d);
     Has investigative and enforcement authority with respect 
to the safety of rail transit systems in its State;
     Audits, at least once triennially, the compliance of the 
rail transit systems in the State subject to 49 U.S.C. 5329(d); and
     Provides, at least once annually, a status report on the 
safety of the rail transit systems the SSOA oversees to the FTA, the 
Governor of its State, and the Board of Directors (or equivalent) of 
any rail transit system the SSOA oversees.
    Under MAP-21, FY 2013 funds in the amount of $21,945,771 are 
available for eligible States to develop or carry out SSOP activities 
described above. For FY 2014, funds in the amount of $22,293,250 are 
available. On May 13, 2013, FTA published a Federal Register notice (78 
FR 28014) that set forth an illustrative formula apportionment and 
requested public comments. The comment period ended on June 12, 2013. 
FTA considered all comments received when developing the final 
apportionment formula and grant guidelines discussed below in this 
notice.

D. SSO Formula Grant Program

    In this section, FTA provides the final formula for the SSO Formula 
Grant Program as well as responses to comments received for the 
proposed formula.
    FTA publishes an annual apportionment notice that includes program 
and funding information on FTA's formula and discretionary programs. 
Formula apportionments are based on congressional appropriations. The 
Federal Register notice published on May 13, 2013, among other things, 
included the then-illustrative apportionment for the SSO Formula Grant 
Program. The funds shown in Table 13 on FTA's Web site (https://www.fta.dot.gov/grants/15105.html) now represent the final FYs 2013 and 
2014 apportionments and are available for obligation by eligible States 
consistent with FTA's SSO Formula Grant Program Requirements (see 
Section E.5). FTA is providing additional guidance in the form of 
Frequently Asked Questions (FAQs) that are posted on FTA's Web site 
concurrently with this notice (https://www.fta.dot.gov/tso.html), and 
during upcoming webinars. Interested parties should monitor the FTA 
event calendar (https://www.fta.dot.gov/newsroom/calendar.html) for 
instructions to join the upcoming webinars.

1. Funding Formula

    MAP-21 requires FTA to develop a formula that takes into account 
fixed guideway vehicle revenue miles, fixed guideway route miles, and 
fixed guideway vehicle passenger miles attributable to all rail transit 
systems not subject to regulation by the FRA within each eligible 
State. In developing this formula, FTA intended to provide funding in 
proportion to the level of effort necessary for required oversight 
duties, while still ensuring that each State receives adequate funding 
to carry out a minimum level of oversight duties. Therefore, FTA is 
apportioning funds using a three-tier formula.
    FTA is apportioning the majority of funds, sixty percent (60%), 
through the factors required by MAP-21, called the Service Tier, as 
follows:
    a. Fifteen percent (15%) based on vehicle passenger miles (PMT),
    b. Fifteen percent (15%) based on vehicle revenue miles (VRM), and
    c. Thirty percent (30%) based on directional route miles (DRM).
    The Service Tier includes a cap so that no State can receive more 
than 15% of the funding available for each of the

[[Page 13382]]

above NTD data measures (i.e. PMT, VRM, DRM). The Service Tier is 
intended to reflect the infrastructure size and service delivered by 
rail transit systems and the consequent level of effort required from 
each State.
    FTA is apportioning twenty percent (20%) equally to each eligible 
State through a second tier, the Base Tier, to provide funding equally 
among the eligible States and ensure a minimum funding level for each 
State.
    FTA is apportioning the remaining twenty percent (20%) through a 
third tier, the Modal Tier, which takes into account the number of 
separate rail transit systems (e.g., light rail, heavy rail, etc.) not 
regulated by the FRA in each State's jurisdiction. The Modal Tier is 
intended to reflect the additional oversight activities and technical 
complexity associated with overseeing each distinct rail mode.
    The table below summarizes the percentage apportioned to each tier. 
A flow chart that further explains the final formula is available on 
the FTA Web site (https://www.fta.dot.gov/12853_14910.html).

Table 1--Final Formula Factors and Percent Apportioned Under Each Factor
------------------------------------------------------------------------
                                 Base tier factor
Service tier factors  (60%)\1\        (20%)          Modal factor (20%)
------------------------------------------------------------------------
PMT Factor (15%)..............  Equal amount per   Number of separate
                                 eligible State.    rail modes in each
                                                    State's jurisdiction
                                                    not regulated by
                                                    FRA, as reported to
                                                    the NTD, or in the
                                                    engineering or
                                                    construction phase
                                                    of development.
VRM Factor (15%)..............
DRM Factor (30%) as reported
 to the NTD.
------------------------------------------------------------------------
\1\ FTA includes a 15% cap on each factor within the Service Tier.

    Consistent with other formula programs, FTA uses VRM, DRM, and PMT 
data as reported to the NTD. Also, as consistent with other FTA 
apportionments, FTA uses passenger car miles to calculate VRM. A modal 
system in revenue operations must be an NTD reporter during the 
previous NTD Reporting Year to be included in the Service Tier 
apportionment. For example, a rail transit system in operations must 
have reported to the NTD in Report Year 2011 to be included in the FY 
2013 Apportionment. See the NTD Web site for information on becoming a 
NTD reporter (https://www.ntdprogram.gov/ntdprogram/ntdid.htm).
    FTA reserves the right to remove out-of-service rail transit 
systems from the apportionment. If a previously operational system is 
out of service for one or more years, as of September 30 of the current 
fiscal year, the system may not be eligible for inclusion in the next 
fiscal year apportionment.
    For the Modal Tier, FTA is apportioning an equal amount of funding 
for each rail transit system mode in the State's jurisdiction reported 
to the NTD. Projects in engineering or construction may not report to 
the NTD and, as such, FTA will use a separate process to identify the 
appropriate number of modes in engineering or construction to use in 
this formula. States must notify FTA of their intent to oversee and 
receive formula funding for rail transit systems in engineering or 
construction in their annual SSO report in order for the project(s) to 
be considered for inclusion in the apportionment. States that are new 
to the SSO program and are not currently required to complete an annual 
SSO report should work with FTA to assess whether the project meets the 
definition of engineering and construction, as defined in this notice, 
and can be included in the apportionment.
    Projects must be in engineering or construction by the SSO Program 
annual report submission due date, which is typically March 15 of the 
prior fiscal year. For FY 2013 and FY 2014 only, FTA will use the 
beginning of the fiscal year (October 1, 2012 and October 1, 2013, 
respectively) as the date for inclusion.
    FTA evaluates the projects submitted and determines whether they 
fall within the definition of engineering or construction, as described 
in this notice. FTA will post a table on its Web site that includes the 
data used for each apportionment (see https://www.fta.dot.gov/12853_13935.html). FTA monitors projects in the engineering and construction 
phase of development to confirm the project is progressing and States 
are using the SSO Formula Grant Program funds to oversee the safety of 
these projects. FTA reserves the right to change its initial 
determination (to include a project in the apportionment) if there is a 
significant change to the level of financial commitment. States should 
contact FTA to discuss specific projects.
    In cases where a rail transit system serves multiple States, FTA 
apportions funding associated with the Service Tier and the Modal Tier 
to the eligible State in which the rail transit system is 
headquartered. For the States that are apportioned funds based upon a 
rail transit system that serves multiple States, apportioned funds 
pursuant to the Service Tier and the Modal Tier are distinguished by 
each system within that State. A State that is apportioned funds based 
upon a multi-State rail system may use those apportioned funds only for 
the oversight of that multi-State rail system. The amount apportioned 
to each eligible State in the Base Tier is unaffected by multi-state 
rail transit systems. The eligible State to which funds are apportioned 
is ultimately responsible for carrying out the grant program 
responsibilities as the FTA grantee (although FTA recognizes a 
subrecipient relationship may exist). Each State served by the multi-
state rail transit system is expected to support the oversight 
program's local match as defined in their SSO program plans and grant 
agreement. As part of the grant application process, FTA requires local 
agreements that identify how each State will contribute to the SSOP and 
demonstrate each State's agreement with the division of 
responsibilities. This approach consolidates federally funded SSOP 
activities to oversee a single rail transit system into one grant to 
eliminate duplication of efforts and reimbursement for the same 
activities, as well as to lessen the eligible States' grant 
administration burden. FTA recognizes that States with multi-state rail 
transit systems are developing SSOPs that will conform to MAP-21 
requirements. FTA will continue to work with these States on an 
individual basis.

2. Comments and Responses

    In the May 13, 2013 Federal Register notice (78 FR 28014), FTA 
requested comment on six specific questions concerning the methodology 
used to

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apportion SSOP funding. FTA received 16 comments and reviewed each 
comment it received. The 16 comments were from 13 SSOAs and 3 rail 
transit systems.\1\
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    \1\ Commenters included: Arizona Department of Transportation; 
California Public Utilities Commission; Colorado Department of 
Regulatory Agencies, Public Utilities Commission; Hawaii Department 
of Transportation; New York Metropolitan Transportation Authority; 
Missouri Department of Transportation; New Jersey Department of 
Transportation, Oregon Department of Transportation; Sarasota County 
Area Transit; St. Clair County Transit District; Texas Department of 
Transportation; Tri-State Oversight Committee; Virginia Department 
of Rail and Public Transportation; Michigan Department of 
Transportation; Ohio Department of Transportation; and New York 
Department of Transportation.
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    The comments generally supported SSO grant funding and improving 
SSOPs to strengthen safety oversight of rail transit systems. FTA 
received a number of additional questions and comments about eligible 
activities and expenses under the SSO Formula Grant Program, local 
match requirements, the period of availability of the funds, and FTA's 
administration of the grants. These areas are discussed in more detail 
in Section E.4 of this notice. Other questions and comments included 
the future of the SSO Formula Grant Program beyond MAP-21 and the 
uncertainty of the level of available funding in the future.
    The section below provides the six questions posed in the May 13 
notice, a summary of the comments received, and FTA's corresponding 
response. Some commenters did not provide comments on each question, so 
each question has fewer than 16 commenters.
i. Should FTA include a Base Tier Factor and is this share appropriate?
    Comments: Eight of eleven commenters agreed that FTA should include 
a Base Tier Factor and distribute twenty percent (20%) of the total 
available funds equally to each State. These commenters stated that the 
allocated amount for each State under the Base Tier would be sufficient 
to cover the expenses for one full-time employee and reasonable program 
expenses. One commenter agreed with having the Base Tier factor, but 
wanted a higher percentage of the total apportionment allocated for 
this Tier. Another commenter stated that the factor and amount 
allocated for the factor would be appropriate to carry out 49 CFR Part 
659, but insufficient to carry out additional duties beyond those 
required in 49 CFR Part 659. Finally, one commenter disagreed with the 
Base Tier because it had ``no practical correlation to the 
characteristics that drive the susceptibility and risk of a system.''
    Response: In allocating twenty percent (20%) of the available funds 
for the Base Tier, FTA intends to alleviate some of the basic cost 
burdens for each State to develop or carry out an SSOP that addresses 
MAP-21 requirements. FTA recognizes that this amount may not be 
sufficient to cover all costs associated with a SSOP, but the funds 
apportioned through the Base Tier, as well as the Service Tier and the 
Modal Tier, along with the local match funds, should provide 
substantial, if not full, support to all States.
ii. Should FTA include an Oversight Complexity Tier Factor as 
presented?
    Comments: Ten of fourteen commenters generally agreed that FTA 
should include an Oversight Complexity Tier Factor. However, three of 
these ten commenters stated that because this tier only considered one 
dimension of complexity (i.e., the number of rail modes), it would not 
fully capture the increased oversight burden resulting from increasing 
degrees of complexity of each rail mode. One commenter stated that the 
percentage allocated to this tier should be higher. Three commenters 
stated that FTA miscalculated the number of rail modes in their 
respective States.
    Response: FTA instituted this component of the formula to recognize 
that a State must oversee additional technical complexity for each rail 
technology present at each rail transit agency it oversees. This may 
become increasingly important as FTA adopts minimum vehicle safety 
standards. As one respondent noted, each unique system type has 
different operational and infrastructure components. FTA's intent is to 
distribute funds in a manner that reflects each State's level of 
effort. Although other drivers of complexity may exist, readily 
available, objective data does not exist to measure these drivers of 
safety oversight complexity. Therefore, for now, FTA will allocate 
these funds using the number of rail modes in a particular State. FTA 
renamed this tier as the Modal Tier to more accurately reflect the 
measure used.
    In response to commenters that believed FTA had miscalculated the 
number of rail modes in their respective States, FTA believes these 
issues have been resolved or clarified based upon, among other things, 
the definition of a rail transit system and the requirements for 
consideration under this tier. States should contact FTA to discuss any 
specific cases.
iii. Should FTA include rail fixed guideway public transportation 
systems in the engineering or construction phase of development in the 
Oversight Complexity Tier?
    Comments: Ten of eleven commenters agreed with FTA's proposal to 
include rail transit systems in the engineering or construction phase 
of development in the Oversight Complexity Tier. Out of the ten, one 
commenter stated that this tier should include engineering or 
construction projects only to the extent that SSO workload is generated 
and its construction and ultimate operation is assured. Three 
commenters stated that FTA should include rail transit systems that are 
not funded by FTA. Some commenters noted that FTA should consider 
extensions to existing systems and not just projects funded under 49 
U.S.C. 5309. According to other commenters, there would be a delay 
between the time a rail transit system in the engineering or 
construction phase enters revenue service and is included in an FTA-
validated NTD data report. These commenters stated this would cause a 
delay for States to receive funds.
    One commenter disagreed with this factor, stating strong opposition 
to the inclusion of this factor because it has ``no practical 
correlation to the characteristics that drive the susceptibility and 
risk of a system.''
    Response: As stated above, this tier has been renamed the Modal 
Tier. FTA will include systems in the engineering or construction phase 
in the Modal Tier as proposed. This policy encourages SSOPs to have a 
role in rail transit safety earlier than currently required under 49 
CFR Part 659. FTA believes this early investment will improve safety 
oversight and accountability in the future. Additionally, by providing 
funding to States to oversee projects in the engineering or 
construction phase, FTA believes it is reducing the perceived effects 
of a ``delay'' to include Service Tier data in the apportionment. The 
process by which FTA determines whether rail transit systems are in the 
engineering or construction phase of development is described above in 
Section D.1 of this notice.
    Finally, SSO Formula Grant Program funding may be used to oversee 
rail transit systems that are still in the early stages of development, 
such as planning, that occur prior to the engineering or construction 
phase. However, as stated above, only those rail transit systems in the 
engineering or construction phase of development as defined in this 
notice will be included in the Modal Tier and additional funds will not 
be provided for oversight of

[[Page 13384]]

such rail transit systems in earlier development stages. In addition, 
use of these funds for the oversight of rail transit systems in earlier 
stages, such as planning, that occur prior to the engineering or 
construction phase is conditioned upon meeting all applicable Federal 
requirements even if that particular rail transit system is not funded 
by FTA. The applicant or that rail transit system should submit 
documentation to FTA indicating that rail transit system's intent to 
report to NTD.
iv. Are the Service Tier factors appropriately weighted?
    Comments: Eight of thirteen commenters stated that the Service Tier 
factors were appropriately weighted. Two of these eight commenters 
requested additional explanation of how the dollar amounts were 
computed. Three commenters raised a concern regarding the delay in the 
validated NTD data publication for new systems in revenue service that 
will not receive funding during that delay. One commenter stated that 
FTA should use anticipated DRM, PMT, and VRM for systems in operations 
that do not yet have validated Service Tier data in the NTD. 
Additionally, one commenter stated the percentage of allocated funds 
under this tier was too high and should not exceed more than forty 
percent (40%) while two commenters stated the cap for this tier was too 
low.
    Response: The factors used in this Service Tier are required by law 
and cannot be changed, and FTA finds that the percentages of allocated 
funds for each factor under this tier are appropriate because of the 
importance Congress placed on these factors. Moreover, FTA finds that 
the percentages of allocated funds are a good measure for States' 
safety oversight level of effort. However, FTA agrees that more 
explanation is warranted and provides this detail below.
    In determining the percentages of each Service Tier factor, FTA 
considered historical data such as the frequency and scope of required 
SSOP activities based on system size and number of RFGPTSs overseen as 
well as the annual level of effort totals reported by states for 
previous years. FTA found that DRM is a useful indicator of the 
physical size of rail transit system infrastructure, which is closely 
related to the level of effort required to perform SSO activities. VRM 
(service provided) and PMT (service consumed) are useful measures of 
transit service and provide an indication of both SSOP level of effort 
and safety risk exposure. FTA chose to split these factors evenly 
between system size (DRM) and service (VRM and PMT). Thus, of the 60% 
total apportionment allocated to the Service Tier, FTA allocated 30% to 
DRM, 15% to VRM, and 15% to PMT. Based upon the foregoing, FTA 
determined these percentages are fair and appropriate. Additionally, in 
many cases the apportionment in this notice is similar to the 
historical distribution of resources to fund 2011 SSOP activities, as 
reported by States.
    Finally, this apportionment uses passenger car miles instead of 
train car miles for the VRM calculation. This is consistent with other 
FTA formula apportionments.
v. Should FTA include a fifteen percent (15%) cap on each Service Tier 
factor, and are they weighted appropriately?
    Comments: Eight of twelve commenters were in favor of a fifteen 
percent (15%) cap on each Service Tier factor. One commenter stated 
that if no State is disadvantaged by allowing a State to exceed the 
fifteen percent (15%) cap, then the cap should not apply. All other 
commenters disagreed with the fifteen percent (15%) cap and cited 
various reasons, including that a cap would result in a formula that 
inaccurately reflected the workload of a specific SSOA, and that more 
funds are required for States with larger rail transit systems.
    Response: The cap is intended to improve the fit between States' 
safety oversight level of effort and the formula funding provided to 
each State. For the two States that meet this cap in FY 2013, both are 
apportioned Federal funding well in excess of their reported FY 2011 
SSOP expenses and one of the two receives Federal funding approximately 
ten times greater than its FY 2011 SSOP expenses. Without a cap, States 
with the largest rail transit systems would receive an overwhelming 
proportion of the total grant funds. FTA believes the cap better 
matches funding to level of effort. (See the discussion above for more 
information on the weight of each Service Tier.)
vi. Should FTA apportion multi-State operator funding to the eligible 
State in which the operator is headquartered?
    Comments: Six out of nine commenters disagreed with FTA's proposal 
that FTA apportion multi-State operator funding to the eligible State 
in which the operator is headquartered. Three of these six commenters 
have multi-State operators within their jurisdiction. Of the three 
commenters that agreed with FTA's proposal, only one commenter is part 
of a State that includes a multi-State rail transit system. Concerns 
with FTA's proposal included the following:
     Apportioning the multi-State operator funds to one State 
would add an extra financial and administrative burden on that State 
(e.g., all of the local match would need to come from that State);
     A State might not have the authority to accept and 
administer such funds on behalf of another State;
     Achieving a fair and equitable distribution among multiple 
States with varying levels of oversight responsibilities; and
     The apportionment methodology could negatively impact 
States' agreements with each other that cover funding, oversight 
responsibility, and program administration.
    Response: FTA is apportioning funding to multi-State operators as 
proposed in the May 13, 2013 notice. FTA recognizes that there are 
inherent challenges with apportioning funds for the safety oversight of 
multi-State operators and has invested a significant amount of time and 
effort to examine alternatives. FTA believes this approach is the most 
suitable.
    FTA believes the SSO Program activities are more effectively and 
efficiently managed in one grant as opposed to monitoring program 
activities and grant reimbursements for one program through multiple 
grants. Multiple Federal grants to oversee one rail transit system 
creates extra and potentially duplicative work, regardless of whether a 
single SSOA or multiple SSOAs provide safety oversight. In the first 
case, where each State establishes its own SSOA under 49 U.S.C. 
5329(e)(5)(A), each State would need to agree to uniform standards and 
enforcement procedures and to coordinate extensively to ensure there 
was no duplication of effort in the Federal grant agreements. In the 
second, a single multi-State SSOA established under 49 U.S.C. 
5329(e)(5)(B) would have to manage multiple Federal grants to operate 
the SSOP.
    Although the funding is apportioned to one State, FTA requires 
local agreements that identify how the States will structure the SSOP 
and SSOA and how each State will contribute to the local match. 
Notwithstanding this decision, FTA will continue to work with States 
that have multi-state rail transit systems within their jurisdictions 
to resolve any remaining issues.

E. SSO Formula Grant Program Requirements

    This section describes SSO Formula Grant Program Requirements. FAQs 
are available on FTA's Web site to further

[[Page 13385]]

explain grant requirements (https://www.fta.dot.gov/tso.html).

1. Eligible Recipients

    Eligible recipients include any eligible State or entity designated 
by the eligible State(s) with the legal capacity to perform all of the 
following responsibilities:
    (a) Receive and dispense Federal funds for the purposes of the 
SSOP;
    (b) Submit grant applications to FTA; and
    (c) Enter into formal grant agreements with FTA.

2. Eligible Activities

    FTA requires each applicant to demonstrate in its grant application 
that its proposed grant activities will develop, lead to, or carry out 
an enhanced SSOP that meets the requirements under 49 U.S.C. 5329(e). 
Grant funds may be used for program operational and administrative 
expenses, including employee training activities. Grant funds under 
this program used for activities related to oversight of rail transit 
systems within an SSOA's jurisdiction must meet the definition of a 
rail transit system as defined herein, including those in operation, in 
the engineering or construction phase of development as defined herein, 
and those in a planning or other earlier phase occurring prior to the 
engineering or construction phase as long as that rail transit system 
meets all applicable Federal requirements. As stated above, the 
applicant or the rail transit system should submit documentation to FTA 
indicating that rail transit system's intent to report to NTD in order 
for oversight of such systems to be considered an eligible cost. In 
addition, it is important to state that SSO Formula Grant funds may not 
be used to support activities that meet 49 CFR Part 659 requirements 
unless those activities also meet 49 U.S.C. 5329(e). FTA has provided 
FAQs to further clarify eligible activities: https://www.fta.dot.gov/tso.html.
    Also, FTA will work with the transit industry in using the Safety 
Management System (SMS) approach to bridge the disparity between the 
current SSO program and the enhanced requirements specified in 49 
U.S.C. 5329. Therefore, State participation in FTA-sponsored SMS 
activities, such as training, review of technical assistance materials, 
completion of gap assessments and development of transition or 
implementation plans, are eligible activities funded through the SSO 
Formula Grant Program.
    FTA is in the process of implementing the National Public 
Transportation Safety Program under 49 U.S.C. 5329 and a rulemaking on 
the SSO Program, among other things, is expected under 49 U.S.C. 
5329(e). If FTA subsequently establishes criteria or conditions for 
grants made under the SSO Formula Grant Program that are different from 
those in this notice, the different criteria or conditions will not be 
applied retroactively to applications submitted or grants awarded 
consistent with this notice, unless the change benefits the applicant.
    (a) SSOP Certification
    As stated in the May 13, 2013 Federal Register notice, the grant 
award and certification processes are considered separate and distinct 
from each other. FTA announced the initial certification status of each 
eligible State on October 1, 2013. To determine this status, FTA 
evaluated each eligible State's submitted SSO program against the 
statutory mandates set forth in 49 U.S.C. 5329(e). As required in 49 
U.S.C. 5329(e)(7), FTA provided each State with the results of this 
evaluation in writing by October 1, 2013. FTA also conducted 
teleconference calls with the eligible States to review these results.
    States that were certified may be awarded grants to cover the costs 
associated with implementing or carrying out their SSO programs. States 
that were not certified, but received FTA approval to submit grant 
applications, may be awarded grants to support initial development and 
implementation of enhanced SSOPs. Regardless, as stated above, States 
may only use grant funds to develop or carry out activities that meet 
requirements specified in 49 U.S.C. 5329(e). States may not use grant 
funds to carry out activities established in their 49 CFR Part 659 
programs that do not also address 49 U.S.C. 5329(e) provisions.
    To confirm States use their grant funds to enhance their SSOPs in 
ways that address MAP-21 requirements, FTA intends for States to use 
FTA's October 1, 2013 certification correspondence and the supporting 
teleconference calls to develop work plans to supplement their 
applications to FTA's new SSO Formula Grant Program. States that are 
not certified are required to provide these work plans as part of the 
grant application process and must be submitted and approved prior to 
submission of the State's grant application. States that are certified 
are encouraged, but not required, to submit work plans that will 
further enhance their SSOPs. FTA will work with grantees to identify 
meaningful milestones to apply grant funding.
    These work plans should demonstrate a clear and workable transition 
to meet MAP-21 statutory requirements. They should identify gaps or 
deficiencies in their respective State's authorizing safety legislation 
relative to MAP-21 statutory requirements, articulate a clear end 
result to achieve compliance, and identify eligible activities with 
reasonable timeframes to accomplish these goals. FTA will provide 
States with a work plan template, as well as supporting materials for 
addressing some of the more common gaps in meeting MAP-21 provisions. 
These materials are available on the FTA Web site at: https://www.fta.dot.gov/tso.html. States are not required to use these 
materials and may use a format of their choice when developing their 
work plan.
    FTA will review each plan to assess compliance with MAP-21 
statutory requirements and the reasonableness of the activities and 
timeframes proposed. Each State's work plan must be accepted by FTA 
before the State may submit its grant application and the funds can be 
awarded. FTA will work closely with each eligible State to determine 
conformance with these eligibility criteria and to develop these 
transition or remedial work plans to address any non-compliance with 
these criteria.

3. Ineligible Activities

    The SSO Formula Grant Program specified in 49 U.S.C. 5329(e)(6) is 
intended to support administrative and operating costs for State safety 
oversight of rail transit systems. Therefore, the following costs are 
ineligible:
    (a) Project costs that cover rail transit system expenses;
    (b) Project costs for State activities unrelated to the SSOP;
    (c) Project costs that directly support the operation or 
maintenance of a rail transit system;
    (d) Project costs for which the recipient has received funding from 
another Federal agency; and
    (e) Other project costs that FTA determines are not appropriate for 
the SSOP.
    To find standards for determining eligible and ineligible expenses, 
see 2 CFR part 200.

4. Grant Application Procedures

    To receive the funds apportioned through this formula, each 
eligible State must be or become an FTA grantee. Eligible States should 
follow these steps to begin the grant application process:
    (a) Identify FTA grant recipient: Each Governor will need to 
identify the State agency that will be the FTA grant recipient for 
these program funds by sending a letter to the appropriate FTA Regional 
Administrator. A listing of

[[Page 13386]]

FTA Regional Offices and full contact information is available at 
https://www.fta.dot.gov/.
    (b) Coordinate with the FTA Regional Office: The identified grant 
recipient should work with the FTA Regional Office to determine what 
additional activities or information are required with respect to the 
new SSO Formula Grant Program. If the identified grant recipient is not 
an existing FTA grant recipient, it must work with the appropriate FTA 
Regional Office to be established as a new FTA recipient. The FTA 
Regional Office will identify the specific activities necessary to 
become established as a FTA recipient.
    (c) Identify sufficient and allowable matching funds: Eligible 
States are required to provide a twenty percent (20%) match for FTA-
funded SSOP activities. See section E.5.b ``Local Share'' for more 
information.

5. Grant Requirements

    Section 5329(e)(6)(B)(ii) requires that grant funds apportioned to 
eligible States must be subject to uniform administrative requirements 
for grants and cooperative agreements to State and local governments 
under part 18 of title 49, Code of Federal Regulations. Thus, 49 CFR 
Part 18 applies to SSO grant funding. SSO grant funding under 49 U.S.C. 
5329(e)(6) is also ``. . . subject to the requirements of this chapter 
[49 U.S.C. chapter 53] as the Secretary determines appropriate.'' 49 
U.S.C. 5329(e)(6)(B)(ii). Among these requirements, the following terms 
and conditions apply:
    (a) Work Plan Submission Requirements. As stated in section E.2 (a) 
above, States that have not yet been certified as part of FTA's October 
1, 2013 initial certification determination must submit a work plan. 
The work plan must identify and address gaps and deficiencies in the 
State's SSOP to meet 49 U.S.C. 5329(e) requirements. See section E.2 
(a) of this notice for additional information.
    (b) 49 CFR Part 659. Until three years after a final rule issued by 
FTA, 49 U.S.C. 5330 and its implementing regulations at 49 CFR Part 659 
will stay effective. In order to receive FTA funding for its SSOP, 
recipients in compliance with 49 CFR Part 659 as of October 1, 2013, 
must, at a minimum, maintain compliance until these provisions are 
repealed. However, as stated above, SSO Formula Grant Program funds may 
not be used to support activities that meet 49 CFR Part 659 
requirements unless those activities also meet 49 U.S.C. 5329(e) 
requirements.
    (c) Local Share. FTA's formula provides a Federal share covering up 
to eighty percent (80%) of the eligible project costs of an SSOP grant 
developed or carried out under MAP-21. Eligible States must provide at 
least a twenty percent (20%) local share. The twenty percent (20%) 
local share may not include other Federal funds, any funds received by 
the State from a rail transit agency, or any revenues earned by a rail 
transit agency. Section 5329(e)(4)(A)(i) requires each SSOA to be 
financially and legally independent from any public transportation 
entity it oversees. States that currently rely entirely upon fees, 
assessments, or funding from rail transit systems in their jurisdiction 
to fund SSO activities are unable to use those funds for any SSO 
Formula Grant Program activities and will need to address this issue of 
financial and legal independence as part of their work plan. FTA will 
work with these States on an individual basis, to the extent necessary, 
to identify permissible local share sources. States overseeing multi-
state operations may include funds collected from partner States as 
part of their local share as long as those funds are not otherwise 
prohibited under this Grant Program. As part of the grant application, 
States need to include the source of the local match. In addition, for 
those States overseeing multi-state operations must show evidence of 
agreement regarding how the local share will be met among the States.
    (d) Period of availability. SSO Formula Grant Program funds are 
available for the year of apportionment plus two additional years. Any 
FY 2013 funds that remain unobligated at the close of business on 
September 30, 2015 will revert to FTA for reapportionment under the SSO 
Formula Grant Program. Any FY 2014 funds that remain unobligated at the 
close of business on September 30, 2016 will revert to FTA for 
reapportionment under the SSO Formula Grant Program.
    (e) Pre-award authority. Grantees may be reimbursed for eligible 
activities incurred as of the date of publication of this notice, 
provided the grantee has been certified or upon approval of a 
certification work plan. A grant marked for pre-award authority cannot 
be executed unless the Initial Federal Financial Report (FFR) has been 
completed in TEAM-Web. Please see the most current version of FTA 
Circular 5010, ``Grants Management Guidelines'' found on FTA's Circular 
Web page. (https://www.fta.dot.gov/circulars) or contact your Regional 
Office for more information.
    (f) Procurement and contracting guidelines. FTA procurement and 
contracting requirements apply to projects funded by the SSO Formula 
Grant Program. For additional information, please see the latest 
version of FTA Circular 4220.1, ``Third Party Contracting Guidance.'' 
(https://www.fta.dot.gov/circulars)
    (g) Grant Management. FTA Circular 5010, ``Grants Management 
Guidelines'' (https://www.fta.dot.gov/circulars) provides FTA's grant 
management requirements. All recipients need to affirm the current 
version of FTA's Master Agreement, which contains the terms and 
conditions applicable to awards of Federal financial assistance. The 
Master Agreement will be incorporated by reference and made part of the 
underlying Grant Agreement when executed. The latest Master Agreement 
can be found on FTA's Web site (https://www.fta.dot.gov/grants/15072.html).
    (h) Annual Certifications and Assurances. Each Applicant for (and 
later Recipient of) SSO grant funds must sign and submit the required 
Certifications and Assurances and submit updated Certifications and 
Assurances annually thereafter. Submissions may be made electronically 
through TEAM-Web. The latest Certifications and Assurances can be found 
on FTA's Web site at https://www.fta.dot.gov/grants/13071.html.
    (i) Planning requirements. Projects funded by the SSO Formula Grant 
Program may, but are not required to, be included in the Statewide 
Transportation Improvement Program (STIP) or a Metropolitan 
Transportation Improvement Plan (TIP). Inclusion of such projects in 
the STIP or TIP is not a prerequisite in order to be reimbursed by FTA.
    (j) Cost Principles (2 CFR Part 200 subpart E). Cost principles 
established in 2 CFR part 200 subpart E must be used as guidelines for 
determining the eligibility of specific types of expenses. Grantees 
should exercise care when incurring costs to confirm all expenditures 
meet the criteria of eligible costs. Failure to comply with these 
requirements may result in expenditures for which use of project funds 
cannot be authorized. For further information on allowable costs and 
FTA financial grant management expectations, please refer to the most 
current version of FTA Circular 5010, ``Grants Management Guidelines'' 
Chapter VI, ``Financial Management.'' The document can be found at the 
following web address: https://www.fta.dot.gov/documents/C_5010_1D_Finalpub.pdf.

[[Page 13387]]

    (k) Apportionments Based Upon a Rail Transit System That Serves 
Multiple States. As stated above, for a State that is apportioned funds 
based upon a rail transit system that serves multiple States, 
apportioned funds pursuant to the Service Tier and the Modal Tier are 
distinguished by each system within that State. The amounts apportioned 
based upon a particular system that serves multiple States may only be 
used for oversight of that system.

6. Award Administration

    Upon award, payments to recipients will be made by electronic 
transfer to the recipient's financial institution through FTA's 
Electronic Clearing House Operation web-based system (ECHO-Web), an 
Internet accessible system that provides grantees the capability to 
submit payment requests on-line. New applicants should contact the 
appropriate FTA Regional Office to obtain and submit the registration 
package necessary for set-up under ECHO-Web.
    Grantees must submit a quarterly Federal Financial Report and 
Milestone Progress Report in TEAM-Web consistent with the most current 
version of FTA Circular 5010, ``Grants Management Guidelines,'' as well 
as any other reporting requirements FTA determines necessary. When 
applicable, FTA will review the quarterly reports to assess consistency 
with the SSOP work plans approved by FTA.
    FTA is responsible for conducting oversight activities to confirm 
grant recipients are using Federal financial assistance in a manner 
consistent with their intended purpose and in compliance with 
regulatory and statutory requirements. FTA conducts periodic oversight 
reviews to assess grantee compliance and will similarly, or in 
conjunction with other oversight reviews, conduct oversight reviews and 
audits of the operations of each SSOA at least once triennially as 
required under 49 U.S.C. 5329(e)(9).

Therese W. McMillan,
Deputy Administrator.
[FR Doc. 2014-05058 Filed 3-7-14; 8:45 am]
BILLING CODE 4910-57-P