Award Management Requirements: Proposed Circular, 10358-10363 [2016-04273]

Agencies

• Federal Transit Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 81, Number 39 (Monday, February 29, 2016)]
[Notices]
[Pages 10358-10363]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-04273]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket No. FTA-2015-0030]


Award Management Requirements: Proposed Circular

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Notice of availability of proposed circular and request for 
comments.

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SUMMARY: FTA has placed in the docket and on its Web site proposed 
guidance in the form of proposed FTA Circular, 5010.1E, ``Award 
Management Requirements,'' to facilitate implementation of FTA's 
assistance programs. The purpose of the proposed circular is to update 
the current ``Grants Management Requirements'' circular to reflect 
various changes in the law, regulations, and FTA's transition to a new 
electronic award and management system. The proposed circular provides 
guidance regarding the management responsibilities accompanying FTA 
awards of federal assistance through Grants and Cooperative Agreements. 
By this notice, FTA seeks public comment on the proposed circular.

DATES: Comments must be submitted by April 29, 2016. Late-filed 
comments will be considered to the extent practicable.

ADDRESSES: Please submit your comments by only one of the following 
methods, identifying your submission by DOT Docket Number FTA-2015-
0030. All electronic submissions must be made to the U.S. Government 
electronic site at https://www.regulations.gov.
    Federal e-Rulemaking Portal: Go to https://www.regulations.gov and 
follow the online instructions for submitting comments.
    Mail: Docket Management Facility: U.S. Department of 
Transportation, 1200 New Jersey Avenue SE., West Building, Ground 
Floor, Room W12-140, Washington, DC 20590-0001.
    Hand Delivery or Courier: West Building Ground Floor, Room W12-140, 
1200 New Jersey Avenue SE., between 9 a.m. and 5 p.m. Eastern time, 
Monday through Friday, except Federal holidays.
    Fax: 202-493-2251.
    Instructions: You must include the agency name (Federal Transit 
Administration) and Docket number (FTA-2015-0030) for this notice at 
the beginning of each submission of your comments. Submit two copies of 
your comments if you submit them by mail. For confirmation that FTA 
received your comments, include a self-addressed stamped postcard. All 
comments received will be posted without change to www.regulations.gov 
including any personal information provided and will be available to 
internet users. You may review DOT's complete Privacy Act Statement 
published in the Federal Register on April 11, 2000 (65 FR 19477) or 
https://DocketsInfo.dot.gov.
    Docket: For access to the docket to read background documents and 
comments received, go to www.regulations.gov at any time or to the U.S. 
Department of Transportation, 1200 New Jersey Avenue SE., Docket 
Operations, M-30, West Building Ground Floor, Room W12-140, Washington, 
DC 20590 between 9:00 a.m. and 5:00 p.m. Eastern Standard Time, Monday 
through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: For program matters, contact Pamela A. 
Brown, FTA Office of Program

[[Page 10359]]

Management, at (202) 493-2503, or pamela.brown@dot.gov. For legal 
matters, contact Linda W. Sorkin, FTA Attorney-Advisor, Office of Chief 
Counsel, at (202) 366-0959 or linda.sorkin@dot.gov.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Overview
II. Chapter-by-Chapter Analysis
    A. Chapter I--Introduction and Background
    B. Chapter II--Circular Overview
    C. Chapter III--Administration of the Award
    D. Chapter IV--Management of the Award
    E. Chapter V--FTA Oversight
    F. Chapter VI--Financial Management
    G. Appendices

I. Overview

    The proposed circular incorporates changes to FTA's programs 
resulting from enactment of FTA's most recent authorizing legislation, 
the Fixing America's Surface Transportation (FAST) Act, Public Law 114-
94, December 4, 2015, the Moving Ahead for Progress in the 21st Century 
Act (MAP-21), and the impact of FTA programs funded with federal 
assistance appropriated or made available for the Safe, Accountable, 
Flexible, Efficient Transportation Equity Act: A Legacy for Users 
(SAFETEA-LU), Public Law 109-59, August 10, 2005, as amended. In 
addition, the proposed circular incorporates the promulgation of 
Department of Transportation (DOT) regulations, ``Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards,'' 2 CFR part 1201, and changes in terms as used in 
FTA's new electronic award and management system, the Transit Award and 
Management System (TrAMS). The proposed circular reflects these 
changes, proposes policies, adds information, clarifies FTA's 
requirements and processes, and restructures FTA Circular 5010.1D, 
``Grant Management Requirements,'' for accuracy, clarity, and ease of 
use.
    On December 4, 2015, the FAST Act, Public Law 114-94, was signed 
into law with an effective date of October 1, 2015, the first day of 
Fiscal Year (FY) 2016. With certain exceptions, the provisions of the 
FAST Act will apply to funds FTA obligates in FY 2016 through FY 2020, 
including funds apportioned in FY 2015 and prior. To the extent that 
FTA awards additional funding in FY 2016 to support a project 
originally receiving FTA funding before FY 2016, FAST Act cross-cutting 
requirements will apply to the new funding. FTA will be developing and 
issuing guidance on implementation of FAST Act requirements as 
necessary to accommodate situations that arise.
    On December 26, 2014, U.S. DOT adopted the Office of Management and 
Budget (OMB) regulatory guidance, ``Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal 
Awards,'' (Uniform Guidance), 2 CFR part 200, now incorporated by 
reference in U.S. DOT regulations, 2 CFR part 1201. The Uniform 
Guidance streamlines and adds to the guidance found in the following 
eight OMB circulars that have been superseded by 2 CFR part 200: OMB 
Circular A-102, ``Grant Awards and Cooperative Agreements with State 
and Local Governments''; OMB Circular A-110, ``Uniform Administrative 
Requirements for Awards and Other Agreements with Institutions of 
Higher Education, Hospitals, and Other Nonprofit Organizations,'' 2 CFR 
part 215; OMB Circular A-21, ``Cost Principles for Educational 
Institutions,'' 2 CFR part 220; OMB Circular A-87, ``Cost Principles 
for State, Local and Indian Tribal Governments.'' 2 CFR part 225; OMB 
Circular A-122, ``Cost Principles for Non-Profit Organizations,'' 2 CFR 
part 230; OMB Circular A-133, ``Audits of States, Local Governments and 
Non-Profit Organizations''; and OMB Circular A-50, ``Audit Follow-Up,'' 
and OMB Circular A-89, ``Federal Domestic Assistance Program 
Information.'' While 2 CFR part 1201 generally adopts most of the 
Uniform Guidance, part 1201 does contain several DOT-specific 
provisions.
    U.S. DOT regulations, 2 CFR part 1201, apply to an FTA Award and 
any Amendments thereto that have been signed by an authorized FTA 
official on or after December 26, 2014. These regulations supersede the 
former 49 CFR part 18, ``Uniform Administrative Requirements for Grants 
and Cooperative Agreements to State and Local Governments,'' and former 
49 CFR part 19, ``Uniform Administrative Requirements for Grants and 
Agreements with Institutions of Higher Education, Hospitals, and Other 
Non-Profit Organizations,'' except that Grants and Cooperative 
Agreements executed before December 26, 2014, continue to be subject to 
former 49 CFR parts 18 and 19 in effect on the date of such grants or 
agreements.
    In addition to addressing changes to federal law and regulations, 
the proposed circular reflects terminology changes for consistency with 
FTA's prospective new electronic award and management system, TrAMS. 
The proposed circular also clarifies FTA's requirements and processes, 
proposes new FTA policies, and restructures FTA Circular 5010.1D, 
``Grant Management Requirements.'' The proposed circular applies to 
both Grants and Cooperative Agreements when program-specific 
requirements are not addressed in an FTA program-specific circular.
    This notice provides a section-by-section summary of the proposed 
circular. The proposed circular itself is not included in this notice; 
instead, an electronic version may be found on FTA's Web site, at 
www.fta.dot.gov, and in the docket, at www.regulations.gov. Paper 
copies of the proposed circular may be obtained by contacting FTA's 
Administrative Services Help Desk at (202) 366-4865. The FTA seeks 
comment on the proposed circular.
    FTA will publish a second notice in the Federal Register after the 
close of the comment period. The second notice will respond to comments 
received and announce the availability of the final circular. The final 
circular will supersede FTA Circular 5010.1D.

II. Chapter-by-Chapter Analysis

    Apart from changes in terms to accommodate 2 CFR part 1201, 2 CFR 
part 200, and the introduction of TrAMS, minor changes to headings and 
names of reports and processes, and structural changes, this analysis 
discusses proposed substantive changes to FTA Circular 5010.1D. We 
strongly recommend that stakeholders carefully review the proposed 
circular in its entirety, particularly those provisions that contain 
new, added, or expanded information.

A. Chapter I--Introduction and Background

    Proposed Chapter I covers general information regarding FTA, FTA's 
authorizing legislation, how to contact FTA, and Grants.Gov. It also 
provides definitions and acronyms and updates the information in FTA 
Circular 5010.1D.
    Along with a new list of acronyms and their meanings, most changes 
in proposed Chapter I are changes to definitions, particularly those 
needed for consistency with the FAST Act, MAP-21, the Uniform Guidance, 
and TrAMS.
    An example of a new definition resulting from the FAST Act is the 
definition of ``Low or No Emission Vehicle'' which means a passenger 
vehicle used to provide public transportation that the Secretary 
determines sufficiently reduces energy consumption or harmful 
emissions, including direct carbon emissions, when compared to a 
comparable

[[Page 10360]]

standard vehicle; or a zero emission vehicle used to provide public 
transportation. A new policy regarding using low or no emission 
vehicles when repowering or remanufacturing vehicles to extend their 
useful life is included in the 5010.1E and this definition will provide 
clarification for that use.
    Another new definition added by MAP-21 and enhanced in the FAST 
Act, is the definition of ``associated transit improvements,'' which 
supersedes ``transit enhancements'' under the Urbanized Area Formula 
Program (49 U.S.C. 5307) financed with appropriations or federal 
assistance made available for fiscal years 2013 and later. The 
following activities qualify as both associated transit improvements 
under MAP-21 and transit enhancements under the FAST Act: (1) Historic 
preservation, rehabilitation, and operation of historic public 
transportation buildings, structures, and facilities (including 
historic bus and railroad facilities) intended for use in public 
transportation service; (2) bus shelters; (3) functional landscaping 
and streetscaping, including benches, trash receptacles, and street 
lights; (4) pedestrian access and walkways; (5) bicycle access, 
including bicycle storage shelters and parking facilities and the 
installation of equipment for transporting bicycles on public 
transportation vehicles; (6) signage; and (7) enhanced access for 
persons with disabilities to public transportation. The FAST Act 
prohibits grants or loans to be used to pay the incremental costs of 
incorporating art or non-functional landscaping into facilities, 
including the cost of an artist on the design team. Both the FAST Act 
and MAP-21 do not treat the following ``transit enhancements'' that 
were eligible under SAFETEA-LU as eligible ``associated transit 
improvements'' under MAP-21: (1) Public art, (2) transit connections to 
parks within the recipient's transit service area, (3) scenic 
beautification other than functional landscaping, and (4) tables.
    Two examples of new definitions added for consistency with TrAMS 
include the definition of ``Project'' and ``Award.'' ``Project'' now 
means public transportation improvement activities eligible for federal 
assistance in an application to FTA and/or in an FTA Award. ``Award'' 
now means the Scope of Work that FTA has approved when FTA agreed to 
provide federal assistance, including the requirements of all 
documents, terms, and conditions incorporated by reference and made 
part of the Grant Agreement or Cooperative Agreement.
    Two examples of definitions FTA has added to explain program 
concerns are ``Remanufactured Vehicles'' and ``Rolling Stock Repower.'' 
``Remanufactured vehicles'' means a previously owned/used vehicle that 
has undergone or requires substantial structural, mechanical, 
electrical, and/or cosmetic rebuilding, restoration or updating and 
that is to be acquired or leased by a new party; a remanufactured 
vehicle must meet all of the requirements for new bus models (e.g., 
useful life, bus testing, etc.). ``Rolling stock repowering'' involves 
replacing a vehicle's propulsion system with a propulsion system of a 
different type (e.g., replacing a diesel engine with an electric 
battery propulsion system). Rolling stock repowering is permitted for 
buses that have met at least 40 percent of their useful life; in which 
case, it must be designed to permit the bus to meet its useful life 
requirements. Rolling stock repowering also is permitted as part of a 
rebuild; in which case, it must extend the useful life by at least 4 
years.

B. Chapter II--Circular Overview

    Proposed Chapter II covers general information regarding the 
requirements and procedures for FTA programs, particularly when the 
program-specific circular does not discuss a particular issue.
    Proposed Chapter II lists descriptions of new or revised programs 
under 49 U.S.C. chapter 53, as amended by the FAST Act and MAP-21. 
FTA's public Web site https://www.fta.dot.gov provides a complete 
listing of FTA programs and their current FTA circulars. Among the new 
programs listed are: (1) The Buses and Bus Facilities Formula Program 
authorized under 49 U.S.C. 5339, (2) the Public Transportation 
Emergency Relief Program authorized under 49 U.S.C. 5324, (3) the 
Public Transportation Safety Program authorized under 49 U.S.C. 5329, 
(4) the State of Good Repair Formula Program authorized under 49 U.S.C. 
5337, and (5) the Transit-Oriented Development Planning Pilot Program 
authorized under Section 20005(b) of MAP-21. As in the current 
circular, proposed Chapter II then discusses various federal civil 
rights requirements, such as those pertaining to the Americans with 
Disabilities Act (ADA), Title VI of the Civil Rights Act of 1964 (Title 
VI), Equal Employment Opportunity (EEO) and Disadvantaged Business 
Enterprise (DBE).

C. Chapter III--Administration of the Award

    Proposed Chapter III provides more detail about administrative 
requirements that accompany an Award to ensure easier compliance with 
the FAST Act, MAP-21, and the Uniform Guidance. The chapter begins by 
describing the life cycle of an Award from the application process, 
reporting requirements, modifications, and closeout.
    Among the differences between proposed Chapter III and the current 
Chapter III are the following:
    Proposed Chapter III explains that the purpose of reporting 
requirements is to ensure proper recipient stewardship of federal 
assistance and compliance with laws, regulations, and requirements 
applicable to the Award and its recipients and/or subrecipients.
    Proposed Chapter III directs stakeholders to FTA program-specific 
circulars for information about exceptions to Milestone Progress 
Reports (MPR) due dates. In limited instances, FTA may grant extensions 
of report due dates for good cause. For quarterly reporters, an 
extension may be granted up to the day prior to the next quarter 
reporting cycle. (For example, a report due on January 30, may receive 
an extension with a due date no later than March 30. This is necessary 
to ensure information is captured for the next reporting cycle 
beginning on April 1.) Extensions may not be granted for recipients 
required to report monthly. Annual reporters must report by October 30. 
Proposed Chapter III asserts FTA's right to require more stringent or 
specialized reports than reports typically required; and, reports on 
significant events impacting the Award should be reported to FTA 
immediately after detection and then reflected in the next MPR. The 
frequency of reporting based on risk also may be implemented. We are 
seeking comments on that matter.
    Proposed Chapter III indicates that the requirements for Associated 
Transit Improvement Reports required by MAP-21 will be similar to the 
requirements for Transit Enhancement Reports required by SAFETEA-LU.
    Proposed Chapter III explains that within 30 days, after entering 
into a contract for any vehicle purchase or when exercising an option 
or a piggyback on an existing contract, the recipient must submit to 
FTA the name of the transit vehicle manufacturer (TVM) that is the 
contractor and the total dollar value of the third party contract. 
Additionally, the next MPR after the contract is awarded should

[[Page 10361]]

include the name of the successful bidder.
    Proposed Chapter III also states that recipients must submit a 
quarterly, rather than montly, project budget and project schedule 
update for Major Capital projects to be consistent with changes made by 
MAP-21 .
    For greater consistency with the Uniform Guidance, proposed Chapter 
III explains the criteria for when prior approval for budget revisions 
will be required.
    For construction projects, FTA will require approval when the 
budget revision results from changes in the scope or the objective of 
the project or program, the need arises for additional Federal funds to 
complete the project, or when the desired revision involves specific 
costs for which prior written approval requirements may be imposed 
consistent with applicable OMB cost principles listed in 2 CFR part 
200, subpart E--Cost Principles.
    For nonconstruction projects, such as projects for equipment, FTA 
will require approval of the budget revision when the federal share of 
the Award exceeds the simplified acquisition threshold ($150,000 as of 
the date of publication of the proposed circular) and the cumulative 
amount of the change exceeds 20 percent of the total federal assistance 
allocated from the current approved Award Budget. A change below these 
thresholds does not require FTA prior approval, provided it does not 
alter the scope of work of the Award.
    In addition, rolling stock spare ratio requirements will continue 
to apply when changes are contemplated or undertaken. This chapter also 
cautions that budget revisions or proposed Award amendments must be 
consistent with the approved STIP, satisfy NEPA requirements, and be 
consistent with its earmark, if any, and statutory requirements.
    When closeout of an Award is sought, proposed Chapter III requires 
recipients to confirm that all activities are complete, to indicate 
whether or not funds will need to be deobligated, and to list the 
assets acquired or improved that will continue to be subject to the 
requirements of the accompanying Grant or Cooperative Agreement.

D. Chapter IV--Management of the Award

    Proposed Chapter IV includes guidance regarding the management, 
use, and disposition of FTA assisted assets, including real property 
such as land and the facilities purchased or constructed thereon, 
equipment consisting of rolling stock and other items of personal 
property, and supplies consistent with 2 CFR part 1201 and 2 CFR part 
200. It also addresses the design and construction of facilities in 
light of MAP-21 amendments to 49 U.S.C. chapter 53.
    General information regarding real property is consolidated in 
proposed Section 2, and oversight of real property transactions is 
addressed in proposed Section 3. Information about equipment and 
supplies, including rolling stock, is consolidated in proposed Section 
4. In connection with appraisals, proposed Section 2 updates NEPA 
information including information regarding environmental site 
assessments (ESA), particularly in regard to contaminated property and 
the estimated cost to remediate contaminated property and contamination 
discovered during construction. Contaminated property is addressed more 
fully in Appendix D.
    Proposed Section 2 discusses administrative settlements, clarifying 
that relocation payments are not considered part of an administrative 
settlement.
    Proposed Section 2 adds the following new Special Real Estate 
Acquisition Program Strategies/Issues including: (1) A new discussion 
of land exchanges advising that FTA does not have separate processes 
for these transactions but uses typical appraisal processes, including 
a reminder that relocation requirements will continue to apply; (2) 
directs stakeholders interested in joint development to FTA Circular 
7050.1 as well as to the discussion in proposed Chapter IV; and (3) 
adds an extensive discussion of contaminated properties including 
information regarding ESAs.
    Proposed Section 2 adds information about the treatment of real 
estate acquisition management plans (RAMP) advising that the recipient 
review it for needed changes, provide information about how real 
property will be acquired, and provide adequate information about 
relocation.
    Proposed Section 2 discusses property management. Along with the 
topics addressed in FTA Circular 5010.1D, FTA has added new subsections 
to clarify FTA policy pertaining to issues FTA staff frequently 
encounter in administering its awards. These new subsections discuss 
such matters as title to real property, use, maintenance, idle 
facilities and idle capacity, reporting on real property, and non-
transit uses of real property, including incidental use, joint 
development, and shared use. Real property reporting has become more 
extensive, with a list of subjects to be addressed in the new Appendix 
I to the proposed circular.
    Proposed Section 3 is a separate section addressing FTA management 
and project oversight of real property but does not change the 
information in FTA Circular 5010.1D.
    Proposed Section 4 addresses issues pertaining to the acquisition, 
use, management, and disposition of equipment and supplies, including 
rolling stock.
    Consistent with the Uniform Guidance, proposed Section 4 expressly 
states that title to equipment continues to vest in the recipient, but 
the equipment must be used for purposes of the project, remain 
unencumbered unless FTA provided prior approval of the encumbrance, and 
it must be disposed of in accordance with federal law and/or the 
Uniform Guidance.
    Proposed Section 4 adds the Uniform Guidance prohibition against 
using federally assisted equipment to provide services in connection 
with incidental uses for a fee less than private companies charge for 
equivalent services unless specifically authorized by Federal statute 
for as long as the Federal Government retains an interest in the 
equipment.
    Proposed Section 4 clarifies that FTA provides a minimum useful 
life policy for capital rolling stock, trolleys, ferries, and 
facilities in this circular. If property is prematurely withdrawn from 
service, FTA must be notified immediately.
    As an effort to streamline and add flexibility, FTA will no longer 
require its recipients, in the application for federal assistance, to 
identify a minimum useful life period for equipment (other than rolling 
stock, trolleys, ferries, and facilities) with an acquisition value 
greater than $5,000 procured with federal assistance. However, the 
recipient should identify useful life in its equipment records and must 
continue to complete the physical inventory of the equipment and the 
results reconciled with equipment records at least once every two 
years. Proposed Section 4 also adds more information regarding 
calculations of the federal interest in FTA-assisted property.
    FTA is interested in the potential of zero-emission vehicles to 
provide cleaner, more efficient transit service. FTA is seeking 
comments on whether the current useful life requirements for buses 
discourages the consideration of this technology, and if so, what an 
appropriate useful life requirement for these vehicles should be and/or 
whether these requirements should change over time as the technology 
advances.
    Proposed Section 4 clarifies FTA's rolling stock rebuilding 
policies for buses and railcars as follows: (1) With

[[Page 10362]]

FTA approval, the recipient may rebuild a bus, railcar, or repowered 
rolling stock before it has met its minimum useful life, and (2) for a 
bus or railcar that has been rebuilt before the end of its minimum 
useful life, the minimum extension of the useful life of the rebuilt 
vehicle is the remaining useful life at the time the vehicle is rebuilt 
plus four years. A remanufactured vehicle must meet all the 
requirements for new vehicles.
    Proposed Section 4 notes that repowering of rolling stock is 
permitted for buses that have met at least 40 percent of their useful 
life in which case it must be designed to permit the bus to meet its 
useful life requirements or as part of a rebuild in which case it must 
extend the useful life by at least 4 years. We seek your comments on 
how repowering should be implemented.
    Proposed Section 4 notes that remanufactured vehicles also may be 
eligible for FTA assistance so long as they meet all of the 
requirements for new bus models (e.g., useful life, bus testing, etc.). 
We also seek your comments on the standards FTA should adopt in 
providing federal assistance for remanufactured vehicles.
    Proposed Section 4 notes that FTA also will permit agencies to 
include vehicles that have met their minimum useful life in their 
contingency fleet if an agency is introducing zero emission vehicles 
into its fleet. This will ensure reliable public transportation service 
in the event that these vehicles require more frequent maintenance. 
These contingency vehicles are not included in the calculation of the 
recipient's spare ratio. Contingency plans are subject to review during 
triennial reviews and other FTA oversight reviews. Any rolling stock 
not supported by a contingency plan will be considered part of the 
active fleet.
    Proposed Section 4 notes that if a recipient has exceeded its spare 
ratio by a small amount when acquiring vehicles to be used in public 
transportation service, FTA may be willing to allow a deviation; 
approval of such a deviation must be obtained in writing.
    Proposed Section 4 expands maintenance requirements to include a 
vehicle maintenance plan and a facility/equipment maintenance plan.
    Proposed Section 4 includes additional information regarding 
leases, including operating and capital leases as updated in the FAST 
Act, including removable power sources for zero emission vehicles which 
may now be acquired separately as capital leases. Notably, the FAST Act 
eliminates FTA's regulatory requirement that FTA may only participate 
in capital leases that are more cost effective than acquisitions. 
However, the FAST Act also requires recipients to provide a report to 
FTA within 3 years after the date on which the recipient enters into 
rolling stock or related equipment leases, with an evaluation of the 
overall costs and benefits of leasing rolling stock and a comparison of 
the expected short-term and long-term maintenance costs of leasing 
versus buying rolling stock.
    Proposed Section 4 includes additional information regarding the 
disposition or inappropriate use of federally assisted property before 
the end of that property's useful life, focusing especially on: (1) The 
transfer of property no longer needed; (2) dispositions due to 
casualty, fire, or natural disaster and the use of insurance proceeds 
recovered as a result of the casualty, fire, or natural disaster; and 
(3) misused property. To facilitate compliance with federal 
requirements, proposed Section 4 adds a subsection providing 
instructions on calculating the ``federal interest'' in federally 
assisted property. Proposed Section 4 also consolidates information 
regarding disposition or use of federally assisted property after the 
property's useful life has ended.
    Proposed Section 4 expands the information about flood insurance 
requirements for FTA programs, including requirements for coverage of 
buildings and contents.
    Proposed Section 5 provides information on design and construction 
of facilities.
    Proposed Section 5 sets forth references to major environmental 
laws and regulations that affect the design and construction of 
facilities.
    Proposed Section 5 clarifies force account work requirements and 
raises the threshold for when force account justification and plans are 
required from $100,000 to $1,000,000 to reduce the administrative 
burden on recipients. FTA's policies require a force account 
justification and a force account plan when work is $1,000,000 or 
greater. When force account work is $10,000,000 or more, FTA approval 
of the force account plan is required. Among the justifications FTA 
recognizes for using force account are: (1) Cost savings, (2) exclusive 
expertise, (3) safety and efficiency of operations, or (4) union 
agreement.
    Proposed Section 5 now removes the requirement for a separate 
annual value engineering (VE) report. Recipients with major capital 
projects are still required to submit a VE report to the appropriate 
FTA Regional Office upon completing the report.
    Proposed Section 5 also includes information regarding federal $1 
coin requirements, specifically that equipment and facilities must be 
capable of accepting and dispensing $1 coins when coins or currency are 
required to use that equipment or those facilities and appropriate 
signs must be in place.
    Finally, Section 5 cautions recipients to consult appropriate 
circulars, DOT guidance, and other official guidance pertaining to 
compliance with the Americans with Disabilities Act.

E. Chapter V--FTA Oversight

    Proposed Chapter V includes guidance regarding the various types of 
reviews FTA conducts. Reviews are grouped in the following categories: 
(1) Program Oversight, (2) Safety Oversight, and (3) Project Oversight. 
Project Management Meetings have been added to the list of reviews.
    Program Oversight reviews include comprehensive reviews and 
specialized reviews. Comprehensive reviews assess a recipient's project 
management practices as well as compliance with the program and 
administrative requirements. Specialized reviews are conducted when a 
recipient is, or at risk of being, out of compliance in a specific 
area. These specialized reviews include: Procurement, financial 
management, and civil rights reviews.
    Safety Oversight reviews are conducted to evaluate and direct 
changes in a recipient's performance of operations in order to improve 
the safety of public transportation systems. These reviews include: 
Drug and alcohol program compliance audits, state safety oversight 
program audits, and FTA voluntary bus transit safety and security 
reviews.
    Project level oversight includes reviews of capital management 
projects, which includes the assignment of a Project Management 
Oversight (PMO) contractor and is applied to major capital projects.
    A ``Note'' has been added to advise that as a result of a review, 
FTA may determine that a recipient requires additional or specialized 
oversight to address identified or potential programmatic, 
administrative, or financial concerns. Supplemental oversight also may 
include the imposition of additional conditions on the award or 
monitoring requirements.

F. Chapter VI--Financial Management

    Proposed Chapter VI includes guidance regarding general matters, 
internal controls, non-federal share, financial plan, federal 
principles for determining allowable costs, indirect

[[Page 10363]]

costs, program income, annual audit, payment procedures, de-obligation 
of federal assistance, debt service reserve, and the right to 
terminate. While retaining much of the information found in FTA 
Circular 5010.1D, substantive proposed changes include the following:
    Due to the emphasis on having adequate internal controls under the 
Uniform Guidance, FTA has added more detailed information to assure 
that transactions are properly executed, funds are safeguarded, and 
records are adequately created and maintained.
    The discussion of non-federal share now lists some sources of non-
federal share, noting that the type of federal assistance awarded 
determines their eligibility as matching funds.
    Proposed Chapter VI adds to the information in FTA Circular 5010.1D 
pertaining to indirect costs. Proposed Chapter VI now states that OMB 
assigns cognizant agencies for state and local governments. U.S. DOT is 
the cognizant agency for determining indirect costs for transit 
districts. In addition, proposed Chapter VI now provides extensive 
instructions on how to report indirect costs.
    Proposed Chapter VI expands the discussion of how program income is 
to be used and now includes a chart illustrating those requirements. 
License fees and royalties derived from patents and copyrights, as well 
as advertising and concession fees are now expressly acknowledged to be 
program income.
    Proposed Chapter VI amends the information regarding the annual 
``Single Audit'' to note that the single audit threshold has been 
changed from $500,000 to $750,000, as required by 2 CFR part 200.
    Proposed Chapter VI sets forth the information about procedures a 
recipient must follow and information a recipient is requested to 
provide in connection with returns of federal assistance to the Federal 
Government. When requesting federal assistance, proposed Chapter VI 
reminds recipients to verify the availability of that federal 
assistance in FTA's current electronic award and management system.
    Proposed Chapter VI provides information regarding requisition 
payments to include information on the DELPHI e-Invoicing System or 
DELPHI Markview system.

G. Appendices

    Following are changes made to the Appendices of FTA Circular 
5010.1D and information about new appendices that have been added to 
the Proposed Circular:
    Proposed Appendix A, ``Table of FTA Circulars,'' has been updated 
to reflect the current circulars, as well as list FTA programs 
associated with the circulars.
    Proposed Appendix B, ``Federal Financial Report,'' has been updated 
to remove information pertaining to TEAM. Once TrAMS is available, FTA 
will revise Appendix B to include illustrations from TrAMS.
    Proposed Appendix C, ``Real Estate Acquisition Management Plan,'' 
which is substantially similar to Appendix C of FTA Circular 5010.1D, 
has been revised to address the following issues: (1) Acquisitions, 
partial acquisitions, and anticipated number of relocations; (2) 
whether FTA needs to concur in the appraisal review; (3) issues arising 
from administrative settlements; (4) the anticipated extent of 
displacement, types of displacement, availability of replacement 
housing and business sites, and other anticipated problems; and (5) the 
contracting requirements, reporting requirements, statement of policy 
regarding rental property for extended possession by tenants and 
owners, and policy regarding rental of property not immediately needed 
for use to accomplish the purposes of the Award.
    Proposed Appendix D, ``Guide for Preparing an Appraisal Scope of 
Work,'' has been expanded to provide more guidance on appraising real 
property, especially real property with adverse environmental 
conditions. FTA believes this guidance is needed due to the frequency 
of issues arising when a recipient seeks to acquire real property, 
especially when adverse environmental conditions are present.
    Proposed Appendix E, ``Rolling Stock Status Report,'' is 
substantially similar to Appendix E of FTA Circular 5010.1D.
    FTA Circular 5010.1D, Appendix F, combined information about 
indirect cost rate proposals (IDRP) with cost allocation plans (CAP). 
In 2 CFR part 200, indirect cost rate and cost allocation plan have 
independent definitions and requirements, Appendix F is now solely 
dedicated to IDRPs and also provides an example of what constitutes a 
20 percent change in the FTA approved IDRP, which will then require 
approval by FTA for a new indirect cost rate.
    Also consistent with new provisions of the Uniform Guidance, 
Appendix F permits recipients that have never negotiated an indirect 
cost rate or have not had an indirect cost rate approved by a cognizant 
agency to choose a ``de minimis rate'' or an indirect cost rate of 10% 
of the modified total direct cost.
    ``Cost Allocation Plans'' are now addressed in proposed Appendix G. 
Among other things, proposed Appendix G defines a CAP consistent with 
the Uniform Guidance and also contains information pertaining to cost 
principles appendices of the Uniform Guidance.
    Proposed Appendix H [Appendix G of FTA Circular 5010.1D], ``Request 
for Advance or Reimbursement (SF-270)'' has been revised to explain how 
the recipient should use FTA's DELPHI e-Invoicing of DELPHI Markview 
system.
    New Proposed Appendix I, ``Reporting on Real Property,'' lists the 
information about real property that the recipient, at a minimum, must 
provide to FTA to facilitate compliance with 2 CFR 200.329. Among the 
information expressly required is the parcel number and the size, 
expressed as acreage, square or linear units.
    New Proposed Appendix J, ``Award Amendments and Budget Revision 
Guidelines,'' provides an explanation of how amendments and budget 
revisions will be treated in both TEAM and TrAMS.
    Proposed Appendix K [Appendix H to FTA Circular 5010.1D], 
``References,'' has been updated to add citations to new documents 
appearing in the circular.
    Proposed Appendix L [Appendix I to FTA Circular 5010.1D], ``FTA 
Regional and Metropolitan Contact Information,'' updates previous 
contact information.
    In summary, we emphasize that interested stakeholders should review 
the proposed circular in its entirety carefully, particularly the 
definitions that have been added or revised, and those provisions that 
contain new or expanded information.

    Issued in Washington, DC.
Therese W. McMillan,
Acting Administrator.
[FR Doc. 2016-04273 Filed 2-26-16; 8:45 am]
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