Award Management Requirements: Availability of Final Circular, 4455-4459 [2017-00728]

Download as PDF Federal Register / Vol. 82, No. 9 / Friday, January 13, 2017 / Notices connection with these proceedings since the facts do not appear to warrant a hearing. If any interested party desires an opportunity for oral comment and a public hearing, they should notify FRA, in writing, before the end of the comment period and specify the basis for their request. All communications concerning these proceedings should identify the appropriate docket number and may be submitted by any of the following methods: • Web site: https:// www.regulations.gov. Follow the online instructions for submitting comments. • Fax: 202–493–2251. • Mail: Docket Operations Facility, U.S. Department of Transportation, 1200 New Jersey Avenue SE., W12–140, Washington, DC 20590. • Hand Delivery: 1200 New Jersey Avenue SE., Room W12–140, Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal Holidays. Communications received by February 27, 2017 will be considered by FRA before final action is taken. Comments received after that date will be considered as far as practicable. Anyone is able to search the electronic form of any written communications and comments received into any of our dockets by the name of the individual submitting the comment (or signing the document, if submitted on behalf of an association, business, labor union, etc.). In accordance with 5 U.S.C. 553(c), DOT solicits comments from the public to better inform its processes. DOT posts these comments, without edit, including any personal information the commenter provides, to www.regulations.gov, as described in the system of records notice (DOT/ALL– 14 FDMS), which can be reviewed at www.transportation.gov/privacy. See also https://www.regulations.gov/ privacyNotice for the privacy notice of regulations.gov. Robert C. Lauby, Associate Administrator for Railroad Safety, Chief Safety Officer. [FR Doc. 2017–00693 Filed 1–12–17; 8:45 am] asabaliauskas on DSK3SPTVN1PROD with NOTICES BILLING CODE 4910–06–P DEPARTMENT OF TRANSPORTATION Federal Transit Administration [Docket No. FTA–2015–0030] Award Management Requirements: Availability of Final Circular Federal Transit Administration (FTA), DOT. AGENCY: VerDate Sep<11>2014 19:06 Jan 12, 2017 Jkt 241001 Notice of availability of final circular. ACTION: The Federal Transit Administration (FTA) has placed in the docket and on its Web site guidance in the form of FTA Circular 5010.1E, ‘‘Award Management Requirements,’’ to facilitate implementation of FTA’s assistance programs. The final Circular updates the ‘‘Grant Management Requirements’’ Circular 5010.1D to reflect various changes in the law, as well as FTA’s transition to a new electronic award management system. DATES: The effective date of the Circular is February 13, 2017. FOR FURTHER INFORMATION, CONTACT: For program matters, contact Pamela A. Brown, FTA Office of Program 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: SUMMARY: Availability of Final Circular This notice provides a summary of the final changes to the Award Management Requirements Circular and responds to comments received on the proposed Circular. The final Circular itself is not included in this notice; instead, an electronic version may be found on FTA’s Web site, at www.transit.dot.gov, and in the docket, at www.regulations.gov. Paper copies of the final Circular may be obtained by contacting FTA’s Administrative Services Help Desk, at (202) 366–4865. Table of Contents I. Overview II. Chapter-by-Chapter Analysis A. General Comments B. Chapter I—Introduction and Background C. Chapter II—Circular Overview D. Chapter III—Administration of the Award E. Chapter IV—Management of the Award F. Chapter V—FTA Oversight G. Chapter VI—Financial Management H. Appendices I. Overview FTA is updating its Award Management Requirements Circular (formerly ‘‘Grant Management Requirements’’ Circular) to incorporate changes to FTA’s programs resulting from enactment of FTA’s most recent authorizing legislation, the Fixing America’s Surface Transportation (FAST) Act (Pub. L. 114–94, Dec. 4, 2015), as well as the Moving Ahead for Progress in the 21st Century Act (MAP– 21) (Pub. L. 112–141, July 6, 2012). In addition, the final Circular incorporates PO 00000 Frm 00177 Fmt 4703 Sfmt 4703 4455 Department of Transportation (DOT) regulations, ‘‘Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,’’ 2 CFR part 1201, and changes in the terms as used in FTA’s new electronic award management system, the Transit Award Management System (TrAMS). This notice provides a summary of changes to FTA Circular 5010.1D, ‘‘Grant Management Requirements,’’ and addresses comments received in response to the February 29, 2016, Federal Register notice of proposed circular and request for comments (81 FR 10358). The final Circular 5010.1E, ‘‘Award Management Requirements’’ becomes effective on February 13, 2017 and supersedes Circular 5010.1D. 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 formerly found in eight OMB Circulars that have been superseded by 2 CFR part 200. While 2 CFR part 1201 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 signed by an authorized FTA official on or after December 26, 2014. These regulations supersede 49 CFR part 18, ‘‘Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments,’’ and 49 CFR part 19, ‘‘Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other NonProfit Organizations,’’ except that Grants and Cooperative Agreements executed before December 26, 2014, continue to be subject to 49 CFR parts 18 and 19 as in effect on the date of such Grants or Cooperative Agreements. In addition to addressing changes to federal law, the final Circular reflects terminology changes for consistency with FTA’s new electronic award management system, TrAMS. The Circular also clarifies FTA’s requirements and processes, includes FTA policies, and restructures FTA Circular 5010.1D, ‘‘Grant Management Requirements.’’ The final Circular applies to Grants and Cooperative Agreements when program-specific requirements are not addressed in an FTA program-specific Circular. E:\FR\FM\13JAN1.SGM 13JAN1 4456 Federal Register / Vol. 82, No. 9 / Friday, January 13, 2017 / Notices II. Chapter-by-Chapter Analysis asabaliauskas on DSK3SPTVN1PROD with NOTICES A. General Comments Approximately 71 commenters provided feedback to the docket in response to the proposed Award Management Requirements Circular, including providers of public transportation, State Departments of Transportation, bus and bus part manufacturers, members of Congress, industry associations, and individuals. Generally, commenters were supportive of FTA’s efforts to update this Circular. Several commenters suggested the award management process should be streamlined, with Activity Line Items (ALIs) as general as possible while still meeting FTA’s oversight needs. Commenters suggested that administrative staff time to receive and then manage Awards is significant, given the specificity of information required, and that specific ALIs and scope codes do not ensure better oversight or stronger adherence to federal law. Commenters suggested that Grant Agreements and Cooperative Agreements simply provide a ‘‘general understanding of the project’’ in place of the specific detail required currently. FTA did not propose any changes to the ALI and scope codes as the level of information is necessary to define what is being funded and to report on program activities. Commenters further suggested that, in particular for states, FTA should approach ‘‘Administration of Award’’ at the recipient level, giving states more flexibility to define projects for subrecipients over the course of implementing an Award. In response, FTA’s practice is to approach Administration of Award at the recipient level. States and designated recipients are required to have a State or Program Management Plan and manage subrecipient programs in compliance with that plan. Further, when FTA last issued the Rural Area Formula Program Circular (C. 9040.1G), FTA made streamlining efforts; for example, commenters were supportive of FTA providing flexibility to states when making minor revisions to the program of projects. B. Chapter I—Introduction and Background Chapter I covers general information regarding FTA, FTA’s authorizing legislation, Grants.gov, and how to contact FTA; this chapter also includes definitions and acronyms used in the Circular. In Chapter I, FTA proposed a new list of acronyms and their meanings, as well as changes to definitions, particularly those needed VerDate Sep<11>2014 19:06 Jan 12, 2017 Jkt 241001 for consistency with 49 U.S.C. chapter 53 as amended by the FAST Act and MAP–21, the Uniform Guidance, and TrAMS. In the proposed Circular, FTA added and amended numerous definitions to align with changes in the law and TrAMS. Some commenters noted defined terms and acronyms that were not included in the text of the document; FTA has reviewed all defined terms and acronyms to ensure all are used in the text of the Circular. Similarly, FTA has added terms (such as ‘‘Intelligent Transportation Systems,’’ ‘‘Project Budget’’) in response to commenters who noted the terms would make the Circular easier to read. A number of commenters suggested small edits to some of the definitions, and FTA adopted most of those suggestions. For example, FTA has amended the definition of the term ‘‘Rolling Stock Repowering’’ to clarify that repowering does not require a propulsion system to be replaced with a different type of propulsion system, and amended the definition of the term ‘‘Overhaul’’ to state that it applies to revenue and non-revenue vehicles. Where terms included in the Circular are defined in regulation, FTA has not amended the Circular definition; this includes terms such as ‘‘Subrecipient’’ (2 CFR 200.93) and ‘‘Questioned Cost’’ (2 CFR 200.84). One commenter sought a definition of ‘‘non-functional landscaping’’; in response, FTA has included examples of functional landscaping in the definition of ‘‘Associated Transit Improvement.’’ Finally, several commenters expressed concern with the definition of ‘‘Capital Asset,’’ both in reference to proposed text indicating an asset with a useful life of at least one year, and to the value of capital assets, suggesting that no individual asset with an initial value below $50,000 should be deemed capital for FTA purposes or tracked as a unit of equipment. FTA has amended the definition from a useful life of ‘‘at least one year’’ to a useful life of ‘‘more than one year.’’ In addition, FTA has amended the definition for consistency with the Uniform Guidance (2 CFR 200.12) and FTA’s Transit Asset Management (TAM) rule (49 CFR 625.5). Notably, the TAM rule requires an inventory of ‘‘all capital assets that a provider owns, except equipment with an acquisition value under $50,000 that is not a service vehicle.’’ C. Chapter II—Circular Overview Chapter II covers general information regarding the requirements and procedures for FTA programs, particularly when a program-specific PO 00000 Frm 00178 Fmt 4703 Sfmt 4703 Circular does not discuss a particular issue. 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. As in Circular 5010.1D, 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). The proposed Circular provided updates to Chapter II consistent with changes in the law and FTA policy. FTA has made some edits to this chapter for clarity and ease of reading. In response to comments, FTA had edited the section on Disadvantaged Business Enterprise (DBE), including Transit Vehicle Manufacturers (TVM), and closely reviewed to ensure the Circular text is consistent with the DOT DBE regulations. D. Chapter III—Administration of the Award Chapter III provides more detail about administrative requirements that accompany an Award to ensure compliance with 49 U.S.C. chapter 53 and the Uniform Guidance. While Chapter III of the final Circular covers the same information found in Circular 5010.1D, FTA proposed substantial edits to this chapter. In response to comments, FTA included the stages of the Award Cycle in a bulleted list, in order to provide clarity for readers. In addition, the Department is now using the term ‘‘notice of funding opportunity’’ or NOFO, in place of ‘‘notice of funding availability’’ or NOFA, so FTA has used the acronym ‘‘NOFO’’ in the final Circular. In section 3, Reporting Requirements, one commenter read the sentence, ‘‘FTA’s policy for reporting requirements may vary depending on the size of the recipient or the type or amount of federal assistance the recipient receives’’ as meaning the recipient might be able to negotiate its reporting requirements with FTA. The sentence following the above-quoted sentence is instructive: ‘‘The Award may include special reporting requirements.’’ In other words, there are cases where additional reporting may be required depending on the circumstances; however, the basic reporting requirements apply to all recipients, with some variation as necessary and appropriate, as determined by FTA. E:\FR\FM\13JAN1.SGM 13JAN1 Federal Register / Vol. 82, No. 9 / Friday, January 13, 2017 / Notices A few commenters had questions about the reporting requirements for transit vehicle manufacturers (TVM). The regulation at 49 CFR 26.49 requires recipients to report to FTA the name of the TVM contractor and the total dollar amount of the contract to FTA within 30 days of entering into a contract for a federally-funded vehicle. FTA has amended the language in the Circular for clarity. One commenter questioned the threshold for reporting under the Federal Funding Accountability and Transparency Act of 2006 (FFATA) (Pub. L. 109–282, Sept. 26, 2006). The threshold for reporting is $25,000, not $25 million as suggested by the commenter. Throughout Chapter III, FTA has made edits as requested by commenters to ensure consistency, add clarity, and improve readability. Specifically, FTA has edited the section on NTD reporting to include additional information on the small systems waiver, tribal reporting, annual and monthly reports, and safety reports. In addition, FTA has made clarifying edits to the section on modifications to the award, including award budget revisions and amendments to awards; as well as to the section on award closeout. asabaliauskas on DSK3SPTVN1PROD with NOTICES E. Chapter IV—Management of the Award Chapter IV includes guidance regarding the management, use, and disposition of FTA assisted assets, including real property 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 amendments to 49 U.S.C. chapter 53. 1. Real Property One commenter sought clarity on the text related to preliminary discussions and preliminary negotiations related to acquisition of real property. The text in the Circular is clear that preliminary discussions and preliminary negotiations are two different activities. FTA proposed that the paragraph, ‘‘title to real property’’ require the recipient to include a covenant in the title of the property acquired that assures non-discrimination during the useful life of the property. One commenter suggested this covenant was neither necessary nor customary for commercial real estate transactions. The U.S. DOT Title VI regulation at 49 CFR 21.7 provides, ‘‘the instrument effecting or recording the transfer shall contain a covenant running with the land assuring VerDate Sep<11>2014 19:06 Jan 12, 2017 Jkt 241001 nondiscrimination for the period during which the real property is used for a purpose for which the federal financial assistance is extended or for another purpose involving the provision of similar services or benefits.’’ There is a similar provision in the Department’s Section 504 regulation at 49 CFR 27.9. Therefore, FTA has not amended the language. Some commenters had questions about real property inventory and reporting, with one commenter recommending the inventory/reporting requirements be removed, as pulling data for property could be timeconsuming and expensive. To clarify, the requirement applies only to new federal awards made on or after December 26, 2014. The Excess Real Property and Utilization Plan continues to apply to awards made prior to December 26, 2014. FTA has made clarifying edits to this section. FTA received several comments related to incidental use of federal assets. The proposed Circular stated that FTA approval would be required for incidental use. One commenter suggested FTA reconsider that proposal; FTA has removed the language and instead the final Circular states the recipient must maintain satisfactory continuing control over the asset, and should consult with FTA before continuing with incidental use. FTA proposed that an incidental use agreement should permit revocation by the recipient. One commenter observed that in its experience, few incidental users would agree to a revocation provision, and suggested FTA strike the language or clarify that a revocation clause may be commercially reasonable under certain circumstances. FTA has accepted the suggestion and added the words, ‘‘if commercially feasible’’ to the provision. Two commenters asked about ‘‘no-income incidental use’’; in response, FTA has provided examples of no-income use. One commenter suggested the language on shared use was not clear as to whether a non-transit partner is free to sell or lease the part of the property that the partner is occupying. FTA has added text to this section to be clear that the recipient must maintain satisfactory continuing control of the property. 2. Equipment, Supplies, and Rolling Stock Section 4 of Chapter IV addresses issues pertaining to the acquisition, use, management, and disposition of equipment and supplies, including rolling stock. FTA received several comments pertaining to useful life of rolling stock. PO 00000 Frm 00179 Fmt 4703 Sfmt 4703 4457 One commenter suggested the useful life of a trolley should be the same as that of a bus, given they operate in the same environment. The Circular indicates that trolleys with combustion engines do have the same useful life as a bus of similar size. Trolleys that operate on overhead catenaries have a longer useful life as the propulsion system lasts longer than combustion engines. For rebuilt buses, FTA proposed the additional useful life be the remaining useful life at the time of rebuild plus four years. One commenter suggested the extension of useful life be based on the cost of repowering the vehicle, and two commenters suggested that FTA add a mileage option to the useful life, in addition to years. FTA declines to accept the first suggestion, and we have amended the Circular to include ‘‘or miles equivalent to four years.’’ FTA specifically sought comment on whether the current useful life requirement for buses discourages the consideration of zero emission 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. One commenter suggested that FTA consider reassessing its useful life and spare ratio requirements for zero emission vehicles. One commenter suggested that a rigid useful life requirement prevents transit agencies from adopting new technologies when they are first introduced. The commenter suggested that a graduated useful life policy for new technologies would mean that manufacturers would commit to a certain durability, but recipients would have the option to upgrade prior to the end of the useful life of the vehicles they’ve acquired, as additional technologies become available. FTA did not receive information sufficient to determine another method of determining whether useful life for zero emission technology would be sufficient or appropriate and has retained the current language. Several commenters addressed zero emission buses and spare ratio requirements. The proposed Circular added the introduction of zero emission vehicles as a reason that an agency would be permitted to maintain their contingency fleet. One commenter noted that at times, it has experienced up to 45 percent of the zero emission fleet out of commission due to mechanical issues, and a 20 percent spare ratio does not fill that gap. Some commenters suggested removing advanced technology vehicles from the spare ratio calculation. Another commenter suggested that, absent a spare ratio E:\FR\FM\13JAN1.SGM 13JAN1 4458 Federal Register / Vol. 82, No. 9 / Friday, January 13, 2017 / Notices asabaliauskas on DSK3SPTVN1PROD with NOTICES policy specifically for zero emission buses, FTA’s proposal of permitting agencies to include vehicles that have met their useful life in their contingency fleet if the agency is adding zero emission vehicles into its fleet is a reasonable solution. Another commenter suggested that newer technology should not be considered for the spare ratio until the technology is at least five years old and the industry has an understanding of the durability of the technology. In response to these concerns as well as to a comment requesting additional information on contingency fleets, FTA has added language to clarify the use of vehicles held in a contingency fleet. In addition, FTA has retained language from the proposed Circular that permits an agency to seek a spare ratio deviation from FTA for no more than two (2) years. Similarly, some commenters requested the spare ratio be increased to 25 percent and increased proportionally for fleets with an average vehicle age exceeding 12 years or an average vehicle mileage greater than 500,000. There may be situations in which a recipient may want to seek a spare ratio deviation from FTA, or keep vehicles in a contingency fleet, and the final Circular provides guidance on these issues. Several small operators had questions about spare ratio requirements for smaller fleets. The proposed Circular stated that the spare ratio requirement of 20 percent applies to recipients operating 50 or more fixed route buses in peak service, but was silent as to the ratio requirement for operators with fewer than 50 fixed route buses in peak service. FTA does not set a specific spare ratio for smaller operators, but expects the number of spare buses to be reasonable taking into account the number of vehicles and variety of vehicle types and sizes. We have added this information to the final Circular for clarity. 3. Remanufactured Vehicles Almost every commenter to the docket commented on FTA’s proposals related to remanufactured vehicles. Generally, commenters objected to FTA including this information in a Circular; asserted that remanufactured vehicles should not be subject to bus testing, useful life, and other requirements that apply to new vehicles; and asserted that remanufactured vehicles have already undergone testing, proven reliable over the years, and have provided value, particularly to smaller transit providers. Commenters asserted that FTA’s efforts to define the remanufacturing process limits the manufacturer’s ability to VerDate Sep<11>2014 19:06 Jan 12, 2017 Jkt 241001 control the cost of the remanufacturing process, and that requiring remanufactured vehicles to comply with new bus requirements would diminish the cost and time savings in the remanufacturing process, and likely eliminate remanufactured buses as a viable option. FTA’s previous Grant Management Requirements Circular did not specifically address requirements for the purchase of previously-owned and/or remanufactured vehicles purchased from a third party. As the remanufactured vehicle market has developed, FTA has received questions from recipients on what requirements apply to the acquisition of these vehicles if using FTA funding. As the previous Circular applied Buy America, useful life, and Bus Testing requirements to the acquisition of vehicles in general, unless FTA provided for otherwise, those requirements would have applied to the acquisition of all vehicles whether new or previously owned. While FTA will continue to study the issue, FTA has modified its requirements in the final Circular to provide guidance for these procurements without proscribing specific performance characteristics. For clarification, FTA has added a definition of previously-owned vehicles and modified its definition of remanufactured vehicles to be a subset of previously-owned vehicles. FTA has added language permitting funds to be used to purchase previously-owned vehicles that had previously met FTA’s Bus Testing and Buy America requirements. Recipients are required to identify their intent to purchase previously-owned vehicles and identify the proposed useful life in their procurement. As part of the bid or proposal the recipient is required to obtain from the vendor certification and documentation ascertaining that applicable Bus Testing and Buy America requirements have been met by the original owner. Additionally, for remanufactured vehicles, the remanufacturer would need to demonstrate compliance with Buy America and DBE TVM requirements. No additional bus testing would be required for the remanufactured vehicles. Further, FTA has not added any new requirements for bus overhauls or bus rebuilds for work on buses a recipient already owns, whether or not the work is done by the recipient or contracted. 4. Other FTA proposed a number of changes to the section on capital leases, in PO 00000 Frm 00180 Fmt 4703 Sfmt 4703 accordance with changes to the law pursuant to the FAST Act. One commenter suggested that the organization of the provisions in the proposed Circular was confusing and did not clearly indicate when FTA’s capital leasing regulation, 49 CFR part 639, applies and when it doesn’t, nor did it adequately explain when section 3019 of the FAST Act applies. Another commenter asked for specificity related to the applicability of 49 CFR part 639. FTA has amended the text of the final Circular to clarify these matters. Several commenters had questions and suggestions related to disposition of assets. One commenter asked about disposal costs of assets that have become liabilities, as when a bus or railcar is at the end of or past its useful life and there is no buyer for the asset. Disposal of assets is considered an operating cost and thus may be an eligible expense for recipients in small urbanized or rural areas. Often, these assets do have a salvage value that can offset transportation and disposal costs. To the extent there remains a federal interest in the asset disposed of, the final Circular provides that a recipient may subtract $500 or ten percent of the proceeds, whichever is less, for selling and handling expenses, from the amount due to FTA. For calculating the federal interest in an asset, one commenter requested information on how fair market value is determined. Generally, fair market value is determined by the value an unrelated party is willing to pay for an asset. This may be obtained by advertising the asset for sale, seeking an estimate from dealers, published values for assets (e.g., blue book value), prior experience in valuation of similar assets, selling the asset for scrap, or any reasonable means the recipient has to access to in order to determine the remaining value of the asset. Section 5 of Chapter IV provides information on design and construction of facilities, sets forth references to major environmental laws and regulations that affect the design and construction of facilities, and clarifies force account requirements. One commenter objected to language in the proposed Circular stating that recipients agree to comply with FTA ‘‘recommendations and determinations’’ pertaining to its review of construction plans and specifications, given the recipient is responsible for managing the Award. The commenter asserted the language suggests FTA would take full control of the Award. Similarly, the commenter suggested that language providing the FTA regional office should be consulted to determine E:\FR\FM\13JAN1.SGM 13JAN1 Federal Register / Vol. 82, No. 9 / Friday, January 13, 2017 / Notices whether FTA review is necessary to advance the Award to the next level of design could delay Awards. Importantly, the text does not state that FTA will manage or take control of the Award. However, there may be instances in which FTA or its contractors observe a situation that must be addressed, such as a failure to comply with the law. Thus, FTA has not amended the language in the final Circular. FTA received two comments related to force accounts: one commenter asked whether a force account plan is required for preventive maintenance, and one commenter asked whether the requirement for force account plans was subject to the Paperwork Reduction Act. First, a force account plan is not required for preventive maintenance. Second, FTA has paperwork collection approvals for all of its federal assistance programs. Paperwork submissions and recordkeeping requirements are captured in those approvals. In addition to the changes described above, FTA made minor edits to the text of Chapter IV for clarity. asabaliauskas on DSK3SPTVN1PROD with NOTICES F. Chapter V—FTA Oversight Chapter V includes guidance regarding the various types of reviews that FTA conducts. Reviews are grouped in the following categories: (1) Program Oversight, (2) Safety Oversight, and (3) Project Oversight. FTA received one comment related to Chapter V. The commenter asked if FTA intended to use the term ‘‘project sponsor’’ instead of ‘‘recipient.’’ In response, FTA edited the text to state, ‘‘project sponsor or recipient.’’ In addition, FTA made minor, clarifying edits to this chapter. G. Chapter VI—Financial Management Chapter VI includes guidance regarding internal controls, non-federal share, financial plan, federal principles for determining allowable costs, indirect costs, program income, annual audit, payment procedures, de-obligation of federal assistance, debt service reserve, and the right to terminate. Farebox Revenues is discussed in the Program Income section of Chapter VI, found at section 7(i). For purposes of operating assistance grants, farebox revenues are deducted from the eligible operating expenses to derive the ‘‘net project cost.’’ The question regarding FTA’s treatment of farebox revenues for recipients of capital assistance arose in light of the proposed definition of program income in proposed FTA Circular 5010.1E. Although FTA Circular 5010.1D does not discuss the relationship, if any, between program VerDate Sep<11>2014 19:06 Jan 12, 2017 Jkt 241001 income and farebox revenue, the proposed Circular 5010.1E included explicit language listing farebox revenue as a type of program income. Whereas Circular 5010.1D allowed program income to be spent ‘‘for public transportation purposes,’’ the proposed Circular permits program income to be spent only on allowable costs. Under Circular 5010.1D, there are no federal requirements governing the disposition of program income earned after the end of the period of performance (i.e., after the ending date of the final Federal Financial Report), unless the terms of the agreement or the federal agency regulations provide otherwise. In proposed Circular 5010.1E, FTA has included an exception to this general rule for farebox revenue states that farebox revenue retains its status as program income after the close of the Award. FTA has made edits to Chapter VI to withdraw these changes and clarify these points. FTA received several comments related to indirect costs. One commenter noted that the discussion of indirect costs in section 6 of Chapter VI contained a different definition than that found in the definitions section of Chapter I. Specifically, the text in Chapter VI contains additional language relating to states and local governments and Cost Allocation Plans found in 2 CFR 200.416. We have clarified the language in Chapter VI. One commenter suggested that FTA clarify that cost allocation plans will not apply to every recipient. The commenter also suggested that FTA clarify that indirect cost proposals and cost allocation plans are separate documents. FTA has made edits to Chapter VI to clarify these points. One commenter indicated that reporting indirect costs on a cumulative basis in the Federal Financial Report (FFR) would require adding many lines to the FFR. Further, the commenter noted that indirect costs currently are not reported for subrecipients. In response, FTA agrees that cumulative reporting will add lines to the FFR. However, indirect cost rates should be reported for the reporting agency, not for subrecipients. Documentation and reporting on subawards and contractual indirect cost rates should be maintained by the recipient and collected as part of its subrecipient monitoring. We have made edits to Appendix B to provide additional guidance to recipients for this reporting requirement. In addition, a commenter suggested that the requirement to identify the indirect cost rate as a separate budget line item ‘‘would require recipients to provide a level of budget detail that will be PO 00000 Frm 00181 Fmt 4703 Sfmt 4703 4459 impossible to meet.’’ The commenter asserted that many Awards contain multiple projects, and many projects are funded by multiple Awards. However, the indirect cost rate should be the same across multiple Awards and multiple projects, as indirect cost rates are not determined on an Award by Award or project by project basis. H. Appendices As stated in the summary under Chapter VI, FTA has amended Appendix B, Federal Financial Report, for clarity in reporting indirect costs. FTA has reversed the order of proposed Appendices F and G, such that now Appendix F is Cost Allocation Plans and Appendix G is Indirect Cost Rate Proposals. FTA struck proposed Appendix J, ‘‘Award Amendments and Budget Revision Guidelines,’’ as the information is otherwise available on FTA’s Web site at https:// www.transit.dot.gov/trams. In addition to the above, FTA made minor, clarifying edits to the appendices. Carolyn Flowers, Acting Administrator. [FR Doc. 2017–00728 Filed 1–12–17; 8:45 am] BILLING CODE 4910–57–P DEPARTMENT OF THE TREASURY Community Development Financial Institutions Fund Community Development Advisory Board Meeting ACTION: Notice of open meeting. This notice announces the next meeting of the Community Development Advisory Board (the Advisory Board), which provides advice to the Director of the Community Development Financial Institutions Fund (the CDFI Fund). The meeting will be conducted via telephone conference call. DATES: The meeting will be held from 2:00 p.m. to 3:00 p.m. Eastern Standard Time on Monday, January 30, 2017. Submission of Written Statements: Participation in the discussions at the meeting will be limited to Advisory Board members, Department of the Treasury staff, and certain invited guests. Anyone who would like to have the Advisory Board consider a written statement must submit it by 5:00 p.m. Eastern Standard Time on Monday, January 23, 2017. Send paper statements to Bill Luecht, Senior Advisor, Office of SUMMARY: E:\FR\FM\13JAN1.SGM 13JAN1

Agencies

[Federal Register Volume 82, Number 9 (Friday, January 13, 2017)]
[Notices]
[Pages 4455-4459]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00728]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket No. FTA-2015-0030]


Award Management Requirements: Availability of Final Circular

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Notice of availability of final circular.

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SUMMARY: The Federal Transit Administration (FTA) has placed in the 
docket and on its Web site guidance in the form of FTA Circular 
5010.1E, ``Award Management Requirements,'' to facilitate 
implementation of FTA's assistance programs. The final Circular updates 
the ``Grant Management Requirements'' Circular 5010.1D to reflect 
various changes in the law, as well as FTA's transition to a new 
electronic award management system.

DATES: The effective date of the Circular is February 13, 2017.
    FOR FURTHER INFORMATION, CONTACT: For program matters, contact 
Pamela A. Brown, FTA Office of Program 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:

Availability of Final Circular

    This notice provides a summary of the final changes to the Award 
Management Requirements Circular and responds to comments received on 
the proposed Circular. The final Circular itself is not included in 
this notice; instead, an electronic version may be found on FTA's Web 
site, at www.transit.dot.gov, and in the docket, at 
www.regulations.gov. Paper copies of the final Circular may be obtained 
by contacting FTA's Administrative Services Help Desk, at (202) 366-
4865.

Table of Contents

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

I. Overview

    FTA is updating its Award Management Requirements Circular 
(formerly ``Grant Management Requirements'' Circular) to incorporate 
changes to FTA's programs resulting from enactment of FTA's most recent 
authorizing legislation, the Fixing America's Surface Transportation 
(FAST) Act (Pub. L. 114-94, Dec. 4, 2015), as well as the Moving Ahead 
for Progress in the 21st Century Act (MAP-21) (Pub. L. 112-141, July 6, 
2012). In addition, the final Circular incorporates Department of 
Transportation (DOT) regulations, ``Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal 
Awards,'' 2 CFR part 1201, and changes in the terms as used in FTA's 
new electronic award management system, the Transit Award Management 
System (TrAMS).
    This notice provides a summary of changes to FTA Circular 5010.1D, 
``Grant Management Requirements,'' and addresses comments received in 
response to the February 29, 2016, Federal Register notice of proposed 
circular and request for comments (81 FR 10358). The final Circular 
5010.1E, ``Award Management Requirements'' becomes effective on 
February 13, 2017 and supersedes Circular 5010.1D.
    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 formerly found in eight 
OMB Circulars that have been superseded by 2 CFR part 200. While 2 CFR 
part 1201 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 signed by an authorized FTA official on or after 
December 26, 2014. These regulations supersede 49 CFR part 18, 
``Uniform Administrative Requirements for Grants and Cooperative 
Agreements to State and Local Governments,'' and 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 49 CFR parts 18 and 
19 as in effect on the date of such Grants or Cooperative Agreements.
    In addition to addressing changes to federal law, the final 
Circular reflects terminology changes for consistency with FTA's new 
electronic award management system, TrAMS. The Circular also clarifies 
FTA's requirements and processes, includes FTA policies, and 
restructures FTA Circular 5010.1D, ``Grant Management Requirements.'' 
The final Circular applies to Grants and Cooperative Agreements when 
program-specific requirements are not addressed in an FTA program-
specific Circular.

[[Page 4456]]

II. Chapter-by-Chapter Analysis

A. General Comments

    Approximately 71 commenters provided feedback to the docket in 
response to the proposed Award Management Requirements Circular, 
including providers of public transportation, State Departments of 
Transportation, bus and bus part manufacturers, members of Congress, 
industry associations, and individuals.
    Generally, commenters were supportive of FTA's efforts to update 
this Circular. Several commenters suggested the award management 
process should be streamlined, with Activity Line Items (ALIs) as 
general as possible while still meeting FTA's oversight needs. 
Commenters suggested that administrative staff time to receive and then 
manage Awards is significant, given the specificity of information 
required, and that specific ALIs and scope codes do not ensure better 
oversight or stronger adherence to federal law. Commenters suggested 
that Grant Agreements and Cooperative Agreements simply provide a 
``general understanding of the project'' in place of the specific 
detail required currently. FTA did not propose any changes to the ALI 
and scope codes as the level of information is necessary to define what 
is being funded and to report on program activities.
    Commenters further suggested that, in particular for states, FTA 
should approach ``Administration of Award'' at the recipient level, 
giving states more flexibility to define projects for subrecipients 
over the course of implementing an Award. In response, FTA's practice 
is to approach Administration of Award at the recipient level. States 
and designated recipients are required to have a State or Program 
Management Plan and manage subrecipient programs in compliance with 
that plan. Further, when FTA last issued the Rural Area Formula Program 
Circular (C. 9040.1G), FTA made streamlining efforts; for example, 
commenters were supportive of FTA providing flexibility to states when 
making minor revisions to the program of projects.

B. Chapter I--Introduction and Background

    Chapter I covers general information regarding FTA, FTA's 
authorizing legislation, Grants.gov, and how to contact FTA; this 
chapter also includes definitions and acronyms used in the Circular. In 
Chapter I, FTA proposed a new list of acronyms and their meanings, as 
well as changes to definitions, particularly those needed for 
consistency with 49 U.S.C. chapter 53 as amended by the FAST Act and 
MAP-21, the Uniform Guidance, and TrAMS.
    In the proposed Circular, FTA added and amended numerous 
definitions to align with changes in the law and TrAMS. Some commenters 
noted defined terms and acronyms that were not included in the text of 
the document; FTA has reviewed all defined terms and acronyms to ensure 
all are used in the text of the Circular. Similarly, FTA has added 
terms (such as ``Intelligent Transportation Systems,'' ``Project 
Budget'') in response to commenters who noted the terms would make the 
Circular easier to read.
    A number of commenters suggested small edits to some of the 
definitions, and FTA adopted most of those suggestions. For example, 
FTA has amended the definition of the term ``Rolling Stock Repowering'' 
to clarify that repowering does not require a propulsion system to be 
replaced with a different type of propulsion system, and amended the 
definition of the term ``Overhaul'' to state that it applies to revenue 
and non-revenue vehicles. Where terms included in the Circular are 
defined in regulation, FTA has not amended the Circular definition; 
this includes terms such as ``Subrecipient'' (2 CFR 200.93) and 
``Questioned Cost'' (2 CFR 200.84). One commenter sought a definition 
of ``non-functional landscaping''; in response, FTA has included 
examples of functional landscaping in the definition of ``Associated 
Transit Improvement.''
    Finally, several commenters expressed concern with the definition 
of ``Capital Asset,'' both in reference to proposed text indicating an 
asset with a useful life of at least one year, and to the value of 
capital assets, suggesting that no individual asset with an initial 
value below $50,000 should be deemed capital for FTA purposes or 
tracked as a unit of equipment. FTA has amended the definition from a 
useful life of ``at least one year'' to a useful life of ``more than 
one year.'' In addition, FTA has amended the definition for consistency 
with the Uniform Guidance (2 CFR 200.12) and FTA's Transit Asset 
Management (TAM) rule (49 CFR 625.5). Notably, the TAM rule requires an 
inventory of ``all capital assets that a provider owns, except 
equipment with an acquisition value under $50,000 that is not a service 
vehicle.''

C. Chapter II--Circular Overview

    Chapter II covers general information regarding the requirements 
and procedures for FTA programs, particularly when a program-specific 
Circular does not discuss a particular issue.
    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. As in 
Circular 5010.1D, 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).
    The proposed Circular provided updates to Chapter II consistent 
with changes in the law and FTA policy. FTA has made some edits to this 
chapter for clarity and ease of reading. In response to comments, FTA 
had edited the section on Disadvantaged Business Enterprise (DBE), 
including Transit Vehicle Manufacturers (TVM), and closely reviewed to 
ensure the Circular text is consistent with the DOT DBE regulations.

D. Chapter III--Administration of the Award

    Chapter III provides more detail about administrative requirements 
that accompany an Award to ensure compliance with 49 U.S.C. chapter 53 
and the Uniform Guidance. While Chapter III of the final Circular 
covers the same information found in Circular 5010.1D, FTA proposed 
substantial edits to this chapter.
    In response to comments, FTA included the stages of the Award Cycle 
in a bulleted list, in order to provide clarity for readers. In 
addition, the Department is now using the term ``notice of funding 
opportunity'' or NOFO, in place of ``notice of funding availability'' 
or NOFA, so FTA has used the acronym ``NOFO'' in the final Circular.
    In section 3, Reporting Requirements, one commenter read the 
sentence, ``FTA's policy for reporting requirements may vary depending 
on the size of the recipient or the type or amount of federal 
assistance the recipient receives'' as meaning the recipient might be 
able to negotiate its reporting requirements with FTA. The sentence 
following the above-quoted sentence is instructive: ``The Award may 
include special reporting requirements.'' In other words, there are 
cases where additional reporting may be required depending on the 
circumstances; however, the basic reporting requirements apply to all 
recipients, with some variation as necessary and appropriate, as 
determined by FTA.

[[Page 4457]]

    A few commenters had questions about the reporting requirements for 
transit vehicle manufacturers (TVM). The regulation at 49 CFR 26.49 
requires recipients to report to FTA the name of the TVM contractor and 
the total dollar amount of the contract to FTA within 30 days of 
entering into a contract for a federally-funded vehicle. FTA has 
amended the language in the Circular for clarity. One commenter 
questioned the threshold for reporting under the Federal Funding 
Accountability and Transparency Act of 2006 (FFATA) (Pub. L. 109-282, 
Sept. 26, 2006). The threshold for reporting is $25,000, not $25 
million as suggested by the commenter.
    Throughout Chapter III, FTA has made edits as requested by 
commenters to ensure consistency, add clarity, and improve readability. 
Specifically, FTA has edited the section on NTD reporting to include 
additional information on the small systems waiver, tribal reporting, 
annual and monthly reports, and safety reports. In addition, FTA has 
made clarifying edits to the section on modifications to the award, 
including award budget revisions and amendments to awards; as well as 
to the section on award closeout.

E. Chapter IV--Management of the Award

    Chapter IV includes guidance regarding the management, use, and 
disposition of FTA assisted assets, including real property 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 amendments to 49 
U.S.C. chapter 53.
1. Real Property
    One commenter sought clarity on the text related to preliminary 
discussions and preliminary negotiations related to acquisition of real 
property. The text in the Circular is clear that preliminary 
discussions and preliminary negotiations are two different activities.
    FTA proposed that the paragraph, ``title to real property'' require 
the recipient to include a covenant in the title of the property 
acquired that assures non-discrimination during the useful life of the 
property. One commenter suggested this covenant was neither necessary 
nor customary for commercial real estate transactions. The U.S. DOT 
Title VI regulation at 49 CFR 21.7 provides, ``the instrument effecting 
or recording the transfer shall contain a covenant running with the 
land assuring nondiscrimination for the period during which the real 
property is used for a purpose for which the federal financial 
assistance is extended or for another purpose involving the provision 
of similar services or benefits.'' There is a similar provision in the 
Department's Section 504 regulation at 49 CFR 27.9. Therefore, FTA has 
not amended the language.
    Some commenters had questions about real property inventory and 
reporting, with one commenter recommending the inventory/reporting 
requirements be removed, as pulling data for property could be time-
consuming and expensive. To clarify, the requirement applies only to 
new federal awards made on or after December 26, 2014. The Excess Real 
Property and Utilization Plan continues to apply to awards made prior 
to December 26, 2014. FTA has made clarifying edits to this section.
    FTA received several comments related to incidental use of federal 
assets. The proposed Circular stated that FTA approval would be 
required for incidental use. One commenter suggested FTA reconsider 
that proposal; FTA has removed the language and instead the final 
Circular states the recipient must maintain satisfactory continuing 
control over the asset, and should consult with FTA before continuing 
with incidental use. FTA proposed that an incidental use agreement 
should permit revocation by the recipient. One commenter observed that 
in its experience, few incidental users would agree to a revocation 
provision, and suggested FTA strike the language or clarify that a 
revocation clause may be commercially reasonable under certain 
circumstances. FTA has accepted the suggestion and added the words, 
``if commercially feasible'' to the provision. Two commenters asked 
about ``no-income incidental use''; in response, FTA has provided 
examples of no-income use.
    One commenter suggested the language on shared use was not clear as 
to whether a non-transit partner is free to sell or lease the part of 
the property that the partner is occupying. FTA has added text to this 
section to be clear that the recipient must maintain satisfactory 
continuing control of the property.
2. Equipment, Supplies, and Rolling Stock
    Section 4 of Chapter IV addresses issues pertaining to the 
acquisition, use, management, and disposition of equipment and 
supplies, including rolling stock.
    FTA received several comments pertaining to useful life of rolling 
stock. One commenter suggested the useful life of a trolley should be 
the same as that of a bus, given they operate in the same environment. 
The Circular indicates that trolleys with combustion engines do have 
the same useful life as a bus of similar size. Trolleys that operate on 
overhead catenaries have a longer useful life as the propulsion system 
lasts longer than combustion engines. For rebuilt buses, FTA proposed 
the additional useful life be the remaining useful life at the time of 
rebuild plus four years. One commenter suggested the extension of 
useful life be based on the cost of repowering the vehicle, and two 
commenters suggested that FTA add a mileage option to the useful life, 
in addition to years. FTA declines to accept the first suggestion, and 
we have amended the Circular to include ``or miles equivalent to four 
years.''
    FTA specifically sought comment on whether the current useful life 
requirement for buses discourages the consideration of zero emission 
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. One commenter suggested 
that FTA consider reassessing its useful life and spare ratio 
requirements for zero emission vehicles. One commenter suggested that a 
rigid useful life requirement prevents transit agencies from adopting 
new technologies when they are first introduced. The commenter 
suggested that a graduated useful life policy for new technologies 
would mean that manufacturers would commit to a certain durability, but 
recipients would have the option to upgrade prior to the end of the 
useful life of the vehicles they've acquired, as additional 
technologies become available. FTA did not receive information 
sufficient to determine another method of determining whether useful 
life for zero emission technology would be sufficient or appropriate 
and has retained the current language.
    Several commenters addressed zero emission buses and spare ratio 
requirements. The proposed Circular added the introduction of zero 
emission vehicles as a reason that an agency would be permitted to 
maintain their contingency fleet. One commenter noted that at times, it 
has experienced up to 45 percent of the zero emission fleet out of 
commission due to mechanical issues, and a 20 percent spare ratio does 
not fill that gap. Some commenters suggested removing advanced 
technology vehicles from the spare ratio calculation. Another commenter 
suggested that, absent a spare ratio

[[Page 4458]]

policy specifically for zero emission buses, FTA's proposal of 
permitting agencies to include vehicles that have met their useful life 
in their contingency fleet if the agency is adding zero emission 
vehicles into its fleet is a reasonable solution. Another commenter 
suggested that newer technology should not be considered for the spare 
ratio until the technology is at least five years old and the industry 
has an understanding of the durability of the technology. In response 
to these concerns as well as to a comment requesting additional 
information on contingency fleets, FTA has added language to clarify 
the use of vehicles held in a contingency fleet. In addition, FTA has 
retained language from the proposed Circular that permits an agency to 
seek a spare ratio deviation from FTA for no more than two (2) years.
    Similarly, some commenters requested the spare ratio be increased 
to 25 percent and increased proportionally for fleets with an average 
vehicle age exceeding 12 years or an average vehicle mileage greater 
than 500,000. There may be situations in which a recipient may want to 
seek a spare ratio deviation from FTA, or keep vehicles in a 
contingency fleet, and the final Circular provides guidance on these 
issues.
    Several small operators had questions about spare ratio 
requirements for smaller fleets. The proposed Circular stated that the 
spare ratio requirement of 20 percent applies to recipients operating 
50 or more fixed route buses in peak service, but was silent as to the 
ratio requirement for operators with fewer than 50 fixed route buses in 
peak service. FTA does not set a specific spare ratio for smaller 
operators, but expects the number of spare buses to be reasonable 
taking into account the number of vehicles and variety of vehicle types 
and sizes. We have added this information to the final Circular for 
clarity.
3. Remanufactured Vehicles
    Almost every commenter to the docket commented on FTA's proposals 
related to remanufactured vehicles. Generally, commenters objected to 
FTA including this information in a Circular; asserted that 
remanufactured vehicles should not be subject to bus testing, useful 
life, and other requirements that apply to new vehicles; and asserted 
that remanufactured vehicles have already undergone testing, proven 
reliable over the years, and have provided value, particularly to 
smaller transit providers. Commenters asserted that FTA's efforts to 
define the remanufacturing process limits the manufacturer's ability to 
control the cost of the remanufacturing process, and that requiring 
remanufactured vehicles to comply with new bus requirements would 
diminish the cost and time savings in the remanufacturing process, and 
likely eliminate remanufactured buses as a viable option.
    FTA's previous Grant Management Requirements Circular did not 
specifically address requirements for the purchase of previously-owned 
and/or remanufactured vehicles purchased from a third party. As the 
remanufactured vehicle market has developed, FTA has received questions 
from recipients on what requirements apply to the acquisition of these 
vehicles if using FTA funding. As the previous Circular applied Buy 
America, useful life, and Bus Testing requirements to the acquisition 
of vehicles in general, unless FTA provided for otherwise, those 
requirements would have applied to the acquisition of all vehicles 
whether new or previously owned.
    While FTA will continue to study the issue, FTA has modified its 
requirements in the final Circular to provide guidance for these 
procurements without proscribing specific performance characteristics. 
For clarification, FTA has added a definition of previously-owned 
vehicles and modified its definition of remanufactured vehicles to be a 
subset of previously-owned vehicles. FTA has added language permitting 
funds to be used to purchase previously-owned vehicles that had 
previously met FTA's Bus Testing and Buy America requirements. 
Recipients are required to identify their intent to purchase 
previously-owned vehicles and identify the proposed useful life in 
their procurement. As part of the bid or proposal the recipient is 
required to obtain from the vendor certification and documentation 
ascertaining that applicable Bus Testing and Buy America requirements 
have been met by the original owner.
    Additionally, for remanufactured vehicles, the remanufacturer would 
need to demonstrate compliance with Buy America and DBE TVM 
requirements. No additional bus testing would be required for the 
remanufactured vehicles.
    Further, FTA has not added any new requirements for bus overhauls 
or bus rebuilds for work on buses a recipient already owns, whether or 
not the work is done by the recipient or contracted.
4. Other
    FTA proposed a number of changes to the section on capital leases, 
in accordance with changes to the law pursuant to the FAST Act. One 
commenter suggested that the organization of the provisions in the 
proposed Circular was confusing and did not clearly indicate when FTA's 
capital leasing regulation, 49 CFR part 639, applies and when it 
doesn't, nor did it adequately explain when section 3019 of the FAST 
Act applies. Another commenter asked for specificity related to the 
applicability of 49 CFR part 639. FTA has amended the text of the final 
Circular to clarify these matters.
    Several commenters had questions and suggestions related to 
disposition of assets. One commenter asked about disposal costs of 
assets that have become liabilities, as when a bus or railcar is at the 
end of or past its useful life and there is no buyer for the asset. 
Disposal of assets is considered an operating cost and thus may be an 
eligible expense for recipients in small urbanized or rural areas. 
Often, these assets do have a salvage value that can offset 
transportation and disposal costs. To the extent there remains a 
federal interest in the asset disposed of, the final Circular provides 
that a recipient may subtract $500 or ten percent of the proceeds, 
whichever is less, for selling and handling expenses, from the amount 
due to FTA.
    For calculating the federal interest in an asset, one commenter 
requested information on how fair market value is determined. 
Generally, fair market value is determined by the value an unrelated 
party is willing to pay for an asset. This may be obtained by 
advertising the asset for sale, seeking an estimate from dealers, 
published values for assets (e.g., blue book value), prior experience 
in valuation of similar assets, selling the asset for scrap, or any 
reasonable means the recipient has to access to in order to determine 
the remaining value of the asset.
    Section 5 of Chapter IV provides information on design and 
construction of facilities, sets forth references to major 
environmental laws and regulations that affect the design and 
construction of facilities, and clarifies force account requirements.
    One commenter objected to language in the proposed Circular stating 
that recipients agree to comply with FTA ``recommendations and 
determinations'' pertaining to its review of construction plans and 
specifications, given the recipient is responsible for managing the 
Award. The commenter asserted the language suggests FTA would take full 
control of the Award. Similarly, the commenter suggested that language 
providing the FTA regional office should be consulted to determine

[[Page 4459]]

whether FTA review is necessary to advance the Award to the next level 
of design could delay Awards. Importantly, the text does not state that 
FTA will manage or take control of the Award. However, there may be 
instances in which FTA or its contractors observe a situation that must 
be addressed, such as a failure to comply with the law. Thus, FTA has 
not amended the language in the final Circular.
    FTA received two comments related to force accounts: one commenter 
asked whether a force account plan is required for preventive 
maintenance, and one commenter asked whether the requirement for force 
account plans was subject to the Paperwork Reduction Act. First, a 
force account plan is not required for preventive maintenance. Second, 
FTA has paperwork collection approvals for all of its federal 
assistance programs. Paperwork submissions and recordkeeping 
requirements are captured in those approvals.
    In addition to the changes described above, FTA made minor edits to 
the text of Chapter IV for clarity.

F. Chapter V--FTA Oversight

    Chapter V includes guidance regarding the various types of reviews 
that FTA conducts. Reviews are grouped in the following categories: (1) 
Program Oversight, (2) Safety Oversight, and (3) Project Oversight.
    FTA received one comment related to Chapter V. The commenter asked 
if FTA intended to use the term ``project sponsor'' instead of 
``recipient.'' In response, FTA edited the text to state, ``project 
sponsor or recipient.'' In addition, FTA made minor, clarifying edits 
to this chapter.

G. Chapter VI--Financial Management

    Chapter VI includes guidance regarding internal controls, non-
federal share, financial plan, federal principles for determining 
allowable costs, indirect costs, program income, annual audit, payment 
procedures, de-obligation of federal assistance, debt service reserve, 
and the right to terminate.
    Farebox Revenues is discussed in the Program Income section of 
Chapter VI, found at section 7(i). For purposes of operating assistance 
grants, farebox revenues are deducted from the eligible operating 
expenses to derive the ``net project cost.'' The question regarding 
FTA's treatment of farebox revenues for recipients of capital 
assistance arose in light of the proposed definition of program income 
in proposed FTA Circular 5010.1E. Although FTA Circular 5010.1D does 
not discuss the relationship, if any, between program income and 
farebox revenue, the proposed Circular 5010.1E included explicit 
language listing farebox revenue as a type of program income. Whereas 
Circular 5010.1D allowed program income to be spent ``for public 
transportation purposes,'' the proposed Circular permits program income 
to be spent only on allowable costs. Under Circular 5010.1D, there are 
no federal requirements governing the disposition of program income 
earned after the end of the period of performance (i.e., after the 
ending date of the final Federal Financial Report), unless the terms of 
the agreement or the federal agency regulations provide otherwise. In 
proposed Circular 5010.1E, FTA has included an exception to this 
general rule for farebox revenue states that farebox revenue retains 
its status as program income after the close of the Award. FTA has made 
edits to Chapter VI to withdraw these changes and clarify these points.
    FTA received several comments related to indirect costs. One 
commenter noted that the discussion of indirect costs in section 6 of 
Chapter VI contained a different definition than that found in the 
definitions section of Chapter I. Specifically, the text in Chapter VI 
contains additional language relating to states and local governments 
and Cost Allocation Plans found in 2 CFR 200.416. We have clarified the 
language in Chapter VI.
    One commenter suggested that FTA clarify that cost allocation plans 
will not apply to every recipient. The commenter also suggested that 
FTA clarify that indirect cost proposals and cost allocation plans are 
separate documents. FTA has made edits to Chapter VI to clarify these 
points.
    One commenter indicated that reporting indirect costs on a 
cumulative basis in the Federal Financial Report (FFR) would require 
adding many lines to the FFR. Further, the commenter noted that 
indirect costs currently are not reported for subrecipients. In 
response, FTA agrees that cumulative reporting will add lines to the 
FFR. However, indirect cost rates should be reported for the reporting 
agency, not for subrecipients. Documentation and reporting on subawards 
and contractual indirect cost rates should be maintained by the 
recipient and collected as part of its subrecipient monitoring. We have 
made edits to Appendix B to provide additional guidance to recipients 
for this reporting requirement. In addition, a commenter suggested that 
the requirement to identify the indirect cost rate as a separate budget 
line item ``would require recipients to provide a level of budget 
detail that will be impossible to meet.'' The commenter asserted that 
many Awards contain multiple projects, and many projects are funded by 
multiple Awards. However, the indirect cost rate should be the same 
across multiple Awards and multiple projects, as indirect cost rates 
are not determined on an Award by Award or project by project basis.

H. Appendices

    As stated in the summary under Chapter VI, FTA has amended Appendix 
B, Federal Financial Report, for clarity in reporting indirect costs.
    FTA has reversed the order of proposed Appendices F and G, such 
that now Appendix F is Cost Allocation Plans and Appendix G is Indirect 
Cost Rate Proposals.
    FTA struck proposed Appendix J, ``Award Amendments and Budget 
Revision Guidelines,'' as the information is otherwise available on 
FTA's Web site at https://www.transit.dot.gov/trams.
    In addition to the above, FTA made minor, clarifying edits to the 
appendices.

Carolyn Flowers,
Acting Administrator.
[FR Doc. 2017-00728 Filed 1-12-17; 8:45 am]
 BILLING CODE 4910-57-P
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