Private Investment Project Procedures, 35500-35506 [2017-15985]

Agencies

• Federal Transit Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 82, Number 145 (Monday, July 31, 2017)]
[Proposed Rules]
[Pages 35500-35506]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-15985]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

49 CFR Part 650

[Docket No. FTA-2016-0008]
RIN 2132-AB27


Private Investment Project Procedures

AGENCY: Federal Transit Administration, Department of Transportation.

ACTION: Notice of proposed rulemaking (NPRM); request for comments.

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SUMMARY: The Federal Transit Administration (FTA) is proposing new, 
experimental procedures to encourage increased project management 
flexibility, more innovation in project funding, improved efficiency, 
timely project implementation, and new project revenue streams. A 
primary goal is to address impediments to the greater use of public-
private partnerships (P3s) and private investment in public 
transportation capital projects (Private Investment Project Procedures 
or PIPP). FTA anticipates using the lessons learned from these 
experimental procedures to develop more effective approaches to 
including private

[[Page 35501]]

participation and investment in project planning, project development, 
finance, design, construction, maintenance, and operations.

DATES: Comments must be received September 29, 2017. Any comments filed 
after this deadline will be considered to the extent practicable.

ADDRESSES: Please identify your submission by Docket Number (FTA-2016-
0008) or RIN number (2132-AB27) through one of the following methods:
     Federal eRulemaking Portal: Submit electronic comments and 
other data to https://www.regulations.gov.
     U.S. Mail: Send comments to Docket Operations, U.S. 
Department of Transportation, 1200 New Jersey Avenue SE., West 
Building, Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take comments to Docket 
Operations in Room W12-140 of the West Building, Ground Floor, at 1200 
New Jersey Avenue SE., Washington, DC, between 9:00 a.m. and 5 p.m., 
Monday through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations, U.S. Department of 
Transportation, at (202) 493-2251.
     Instructions: You must include the agency name (Federal 
Transit Administration) and Docket Number (FTA-2016-0008) for this 
notice or RIN (2132-AB27), at the beginning of your comments. If sent 
by mail, submit two copies of your comments. Due to security procedures 
in effect since October 2001, mail received through the U.S. Postal 
Service may be subject to delays. Parties submitting comments should 
consider using an express mail firm to ensure the prompt filing of any 
submissions not filed electronically or by hand. If you wish to receive 
confirmation that FTA received your comments, you must include a self-
addressed stamped postcard. All comments received will be posted 
without change to https://www.regulations.gov, including any personal 
information provided. You may review the complete U.S. Department of 
Transportation (DOT) Privacy Act Statement published in the Federal 
Register on April 11, 2000, at 65 FR 19477-8 or https://DocketsInfo.dot.gov.
     Electronic Access and Filing: This document and all 
comments received may be viewed online through the Federal eRulemaking 
portal at https://www.regulations.gov. Electronic submission and 
retrieval help and guidelines are available on the Web site. It is 
available 24 hours each day, 365 days a year. Please follow the 
instructions. An electronic copy of this document may also be 
downloaded from the Office of the Federal Register's home page at 
https://www.federalregister.gov.

FOR FURTHER INFORMATION CONTACT: For program matters, Tom Yedinak, 
Office of Budget and Policy, (202) 366-5137 or Tom.Yedinak@dot.gov. For 
legal matters, Charla Tabb, Office of Chief Counsel, (202) 366-4011 or 
charla.tabb@dot.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Section-by-Section Analysis
III. Regulatory Analyses and Notices

I. Background

A. History

    Over the past decade, Federal legislation has evolved to encourage 
increased use of public-private partnerships and private investment in 
public transportation capital projects. Pursuant to section 3011(c) of 
the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A 
Legacy for Users (SAFETEA-LU), Public Law 109-59, the U.S. Secretary of 
Transportation (Secretary) established a pilot program, commonly 
referred to as ``Penta-P,'' to demonstrate the advantages and 
disadvantages of public-private partnerships for certain new fixed 
guideway capital projects. 72 FR 2583-01 (January 19, 2007). SAFETEA-LU 
also required that the Secretary identify and examine the costs, 
benefits, and efficiencies of applying P3 delivery approaches to 
transit projects. The resulting report, entitled ``Report to Congress 
on the Costs, Benefits, and Efficiencies of Public-Private Partnerships 
for Fixed Guideway Capital Projects,'' \1\ was transmitted to Congress 
in December 2007.
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    \1\ https://www.fta.dot.gov/documents/Costs_Benefits_Efficiencies_of_Public-Private_Partnerships.pdf.
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    In order to facilitate increased private sector participation in 
project development, finance, design, construction, maintenance, and 
operations of transit projects, in 2008 and 2009, FTA, along with the 
National Council of Public-Private Partnerships, sponsored eight public 
workshops on P3s in transit and a one-day workshop for FTA employees. 
Each workshop attracted almost 100 participants and provided technical 
assistance to transit agencies, local officials, and consultants on 
legal and regulatory issues, financing, and contract matters related to 
P3s.
    In 2009, the Government Accountability Office (GAO) released a 
report, ``Public Transportation--Federal Project Approval Process 
Remains a Barrier to Greater Private Sector Role and DOT Could Enhance 
Efforts to Assist Project Sponsors, (GAO-10-19)'' \2\ (GAO Report), 
which recommended that FTA increase efforts to better equip project 
sponsors by developing guidance and providing technical assistance on 
P3s. In response to the GAO Report, FTA created a Private Sector 
Participation Web site that provides guidance, technical support and 
resources to those project sponsors considering P3s.\3\
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    \2\ https://www.gao.gov/new.items/d1019.pdf.
    \3\ https://www.transit.dot.gov/funding/funding-finance-resources/private-sector-participation/private-sector-participation-1.
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    More recently, Section 20013(b)(1) of the Moving Ahead for Progress 
in the 21st Century Act (MAP-21), Public Law 112-141 (July 6, 2012), 
directed FTA to identify impediments in chapter 53 of title 49 of the 
United States Code, and any regulations or practices thereunder, to the 
use of public-private partnerships and private investment in public 
transportation capital projects, and to develop and implement 
procedures on a project basis that address such impediments in a manner 
similar to the Special Experimental Project Number 15 of the Federal 
Highway Administration (FHWA), commonly referred to as ``SEP-15''. 
Additionally, Section 3005(b) of the Fixing America's Surface 
Transportation (FAST) Act, Public Law 114-94 (December 4, 2015), 
authorizes an expedited project delivery program for capital investment 
projects that requires projects be supported, at least in part, by 
public-private partnerships.
    Moreover, project sponsors have used the Transportation 
Infrastructure Finance and Innovation Act (TIFIA) (23 U.S.C. 181-189, 
601-609), the private activity bonds (PABs) legislation (26 U.S.C. 141-
147) and the Railroad Rehabilitation and Improvement Financing (RRIF) 
program (45 U.S.C. 821-823) to help finance public transit capital 
projects. TIFIA provides Federal credit assistance in the form of 
direct loans, loan guarantees, and standby lines of credit. The PABs 
legislation authorized the Department of Transportation to offer PABs 
allocations to private developers and operators, providing them access 
to tax-exempt interest rates and potentially more favorable interest 
rates. The RRIF program provides Federal credit assistance in the form 
of direct loans and loan guarantees.

[[Page 35502]]

    FTA also has issued guidance to facilitate private sector 
participation, such as Circular 7050.1, ``Federal Transit 
Administration Guidance on Joint Development,'' which provides guidance 
on how transit agencies may use FTA funds or FTA-funded real property 
for joint development with the private sector.
    Section 9001 of the FAST Act established the National Surface 
Transportation and Innovative Finance Bureau (referred to as the Build 
America Bureau), in the Department which aims to drive transportation 
infrastructure development projects in the United States by 
streamlining credit opportunities and grants more quickly and 
transparently, while providing technical assistance and encouraging 
innovative best practices in project planning, financing, delivery, and 
monitoring. The Bureau works with project sponsors to educate them on 
how they can best utilize innovative project delivery approaches, such 
as P3s, and offers project-specific technical assistance.

B. Perceived Barriers

    Pursuant to Section 20013(b)(1) of MAP-21, FTA has undertaken 
research on potential impediments to the greater use of public-private 
partnerships and private investment in public transportation capital 
projects. FTA has reviewed a number of Federal agency reports on the 
use of private investment in public infrastructure projects and has 
reviewed statements from the private sector, financial institutions, 
transit agencies, other transit industry organizations and the public 
about perceived barriers that exist industry-wide and in FTA's 
policies. FTA also conducted an online dialogue from October 2014 to 
January 2015 with grantees and stakeholders to help inform this 
rulemaking process.
    In general, commenters suggested that FTA grant processes should be 
further streamlined in order to encourage greater use of public-private 
partnerships and private investment in public transportation capital 
projects. In addition, some commenters suggested that the timing of 
grant awards can discourage lender interest because it is perceived to 
be incompatible with the timing of private financing schedules, public 
agency procurement schedules and DOT financing programs, such as TIFIA, 
RRIF and PABs. Commenters recommended that the level of Federal 
oversight could be more flexible and dependent upon the experience of 
the project sponsor, terms of agreements, and the existence of 
concurrent, independent oversight, such as state or regulatory 
agencies, and type of financing. Commenters also suggested that FTA 
rely more heavily upon approvals of third parties with jurisdiction 
over a project, rather than replicate certain reviews, and questioned 
whether any necessary FTA reviews could be expedited by having them 
performed by an independent third party selected by FTA, but paid for 
by the project sponsor. Some comments were unrelated to the subject 
matter of the online dialogue or provided only opinions as to the 
benefits or disadvantages of private investment in public projects, 
without offering any suggestions that FTA could apply to draft this 
proposed rule.
    This proposed rule aims to address the comments received during the 
online dialogue as well as other potential impediments identified in 
FTA's research. Under the proposed rule, recipients funding a public 
transportation capital project subject to 49 U.S.C. chapter 53 with 
FTA, RRIF, TIFIA or other Federal financial assistance could request a 
modification or waiver, in whole or in part, of a specific FTA 
regulation, practice, procedure or guidance document (including a 
circular) that may be an impediment to the use of P3s or private 
investment in that project. For example, an applicant could propose 
that FTA rely upon approvals of third parties with jurisdiction over an 
eligible project, rather than replicate certain FTA oversight reviews.

C. Purpose of Regulatory Action

    Section 20013(b)(1) of MAP-21 required FTA to identify any 
provisions of 49 U.S.C. chapter 53, and any regulations or practices 
thereunder, that impede greater use of P3s and private investment. FTA 
must develop and implement on a project basis procedures and approaches 
that address such impediments in a manner similar to FHWA's SEP-15 and 
protect the public interest and any public investment in public 
transportation capital projects that involve P3s or private investment. 
Section 20013(b)(5) of MAP-21 requires the issuance of a rule to carry 
out the procedures and approaches developed under section 20013(b)(1).
    In 2004 FHWA initiated SEP-15, pursuant to authority granted the 
Secretary by 23 U.S.C. 502(b), to create a procedure to waive the 
requirements of title 23 of the United States Code and implementing 
regulations on a case-by-case basis in order to encourage tests and 
experimentation in the entire project development process, specifically 
aimed at attracting private investment, leading to increased project 
management flexibility, more innovation, improved efficiency, timely 
project implementation, and new revenue streams. 69 FR 59983 (October 
6, 2004). SEP-15 permits FHWA to experiment in four major areas of 
project delivery--contracting, right-of-way acquisition, project 
finance, and compliance with the National Environmental Policy Act 
(NEPA), 42 U.S.C. 4321, et seq., and other environmental requirements. 
SEP-15 enables FHWA to actively explore changes in the way it 
approaches the oversight and delivery of highway projects to further 
the Administration's goals of reducing congestion and preserving 
transportation infrastructure. A key feature of SEP-15 is that it 
allows FHWA to identify current FHWA laws, regulations, and practices 
that inhibit greater use of P3s and private investment in 
transportation improvements and allows FHWA to develop procedures and 
approaches that address these impediments.
    FHWA currently administers several projects under SEP-15, including 
the two examples provided below.\4\
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    \4\ https://www.fhwa.dot.gov/ipd/p3/tools_programs/sep15.aspx.
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FHWA SEP-15 Projects
    1. The Pennsylvania Department of Transportation (PennDOT) is 
replacing 558 bridges throughout the State as a single P3 project. At 
PennDOT's request, FHWA allowed the private partner in the P3 to be 
responsible for preparing, in coordination with the overall replacement 
schedule, the NEPA supporting documentation and draft environmental 
decision documents for each bridge. In addition, the private partner 
was allowed to select the consultant that prepares the NEPA document 
and retain exclusive control over the consultant. These are deviations 
from FHWA design-build regulations codified at 23 CFR part 636. FHWA's 
acceptance of the PennDOT proposal was conditional and contingent on 
the inclusion of specific safeguards to protect the integrity of the 
environmental decision-making process. FHWA and PennDOT remain 
responsible for issuing the final environmental determinations under 
NEPA, and FHWA and PennDOT remain responsible for the scope and 
contents of the NEPA documents.
    2. The Idaho Transportation Department (ITD) recently completed a 
ten-year capital program that added 120 miles to Idaho's highway 
system, including many new or improved bridges and interchanges. The 
program was funded primarily through a series of

[[Page 35503]]

grant anticipation bonds, or GARVEEs, and delivered by a private sector 
program manager. FHWA allowed ITD to initiate final design and acquire 
right of way (by voluntary sale only) prior to conclusion of the NEPA 
process, through deviations from multiple provisions of 23 CFR parts 
710 and 771. FHWA's acceptance of these waivers required ITD to put in 
place specific safeguards to, for example, avoid the appearance of 
undue influence on property owners and perceptions of unfavorable 
treatment for those properties not acquired. ITD was also required to 
show that the acquisition of properties did not influence the NEPA 
decisions.
    Having concluded its research, and pursuant to Section 20013(b)(5) 
of MAP-21, FTA is proposing the PIPP, which would be similar to FHWA's 
SEP-15, and would help address impediments to the greater use of 
public-private partnerships and private investment in public 
transportation capital projects identified by FTA. The PIPP are 
intended to encourage project sponsors to seek modifications of Federal 
requirements that will accelerate the project development process, 
attract private investment and lead to increased project management 
flexibility, more innovation, improved efficiency, and/or new revenue 
streams.
    A key goal of the PIPP would be to identify provisions of current 
FTA regulations, practices, procedures, and guidance documents that may 
be impediments to the greater use of public-private partnerships and 
private investment in public transportation capital projects, and, 
where possible, modify such requirements while ensuring protection of 
the public interest and any public investment in the project. In 
accordance with Section 20013(b)(6) of MAP-21, the PIPP could not be 
used to waive any requirement under NEPA, 49 U.S.C. chapter 53 
(including 49 U.S.C. 5333), or any other provision of Federal statute. 
Thus, the PIPP would allow for innovations in project delivery while 
maintaining FTA's stewardship responsibilities. The lessons learned 
from projects approved under the PIPP would aid FTA in developing more 
effective approaches to project planning, project development, finance, 
design, construction, maintenance, and operations.
    As with the SEP-15 program, a recipient could apply to FTA to 
request modification or waiver of specific FTA requirements that the 
recipient contends make a project unattractive from the P3 or private 
investment standpoint. The FTA Administrator would have discretion to 
grant a modification or waiver of a requirement under certain 
circumstances. Applications would be required to include specific 
information in order to be considered for the PIPP; FTA is considering 
creating a standard format for applications that would assist 
applicants in ensuring the completeness of their applications, and 
allow for electronic submission of applications via the FTA Web site. 
FTA recognizes that PIPP project proposals could include multi-modal 
components. FTA would coordinate the review of multi-modal project 
proposals with the appropriate DOT modal administration(s). In 
addition, if PIPP project proposals anticipate financing under TIFIA, 
RRIF or PABs, FTA would coordinate with the Bureau.

II. Summary of Provisions

    The proposed rule would add a new part 650, ``Private Investment 
Project Procedures,'' to title 49 of the Code of Federal Regulations. 
The rule proposes to implement the statutory requirements of section 
20013(b)(1) of MAP-21. The rule would be composed of four subparts.
    Subpart A, sections 650.1 through 650.5, would contain the 
definitive terms of the rule: The purpose, applicability and defined 
terms.
    Subpart B, section 650.11, would describe who may submit an 
application, the type of project eligible for consideration, and 
factors that the applicant must demonstrate in order for FTA to 
consider waiving or modifying its requirements. The proposed section 
650.13 would provide limitations on FTA's ability to waive or modify 
certain requirements despite implementation of the proposed rule.
    Subpart C, section 650.21 would require successful applicants to 
submit a report following completion of the project that would analyze 
the impact of the experimental procedures on project delivery.
    Subpart D, section 650.31, would describe the application process, 
including the minimum requirements for applications. One of the minimum 
requirements is evidence of committed financing for the project, 
including from private partners or investors in a proposed project. FTA 
seeks comment on whether requiring evidence of committed financing 
would be premature at the time of application.

III. Regulatory Analyses and Notices

Executive Order 12866 and 13563; USDOT Regulatory Policies and 
Procedures

    Executive Orders 12866 and 13563 direct Federal agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits--including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity. Also, 
Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, reducing costs, harmonizing rules, and promoting 
flexibility. The proposed rule would encourage tests and 
experimentation in the project development process and is specifically 
aimed at attracting public-private partnerships and private investment. 
Public-private partnerships of capital projects are rare in the U.S. 
transit industry, although they are common in other countries. The 
proposed rule would provide an avenue to address existing impediments 
to P3 projects with the aim of increasing their use, but it is 
unlikely, on its own, to significantly increase the level of P3 
activity in the U.S. transit industry.
    FTA has determined this rulemaking is a non-significant regulatory 
action within the meaning of Executive Order 12866 and is non-
significant within the meaning of the U.S. Department of 
Transportation's regulatory policies and procedures. FTA has examined 
the potential economic impacts of this rulemaking and has determined 
that this rulemaking is not economically significant because it will 
not result in an effect on the economy of $100 million or more. The 
proposals set forth in today's rule will not adversely affect the 
economy, interfere with actions taken or planned by other agencies, or 
generally alter the budgetary impact of any entitlements, grants, user 
fees, or loan programs.
Executive Order 13771
    This proposed rule is expected to be an EO 13771 deregulatory 
action because FTA believes it would reduce the cost of complying with 
FTA's requirements. However, FTA is unable at this time to quantify the 
cost savings due to the lack of information about (1) the types of 
waivers that would be requested, (2) the number of waivers that would 
be requested, and (3) the difference in cost between complying with 
FTA's existing requirements and complying with the requirements of a 
waiver and this proposed rule. FTA requests public comments on 
estimating the cost savings of this proposed rule.
Regulatory Flexibility Act
    In compliance with the Regulatory Flexibility Act (Pub. L. 96-354; 
5 U.S.C. 601-612), FTA has evaluated the likely

[[Page 35504]]

effects of the proposals set forth in this NPRM on small entities, and 
has determined that the NPRM would not have a significant economic 
impact on a substantial number of small entities.
Unfunded Mandates Reform Act of 1995
    This proposed rulemaking would not impose unfunded mandates as 
defined by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4; 109 
Stat. 48).
Executive Order 13132 (Federalism)
    This proposed rulemaking has been analyzed in accordance with the 
principles and criteria established by Executive Order 13132 (Aug. 4, 
1999). FTA has determined that the proposed action would not have 
sufficient Federalism implications to warrant the preparation of a 
Federalism assessment. FTA has also determined that this proposed 
action would not preempt any State law or State regulation or affect 
the States' abilities to discharge traditional State governmental 
functions. Moreover, consistent with Executive Order 13132, FTA has 
examined the direct compliance costs of the NPRM on State and local 
governments and has determined that the collection and analysis of the 
data are eligible for Federal funding under FTA's grant programs.
Executive Order 12372 (Intergovernmental Review)
    The regulations effectuating Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities apply 
to this proposed rulemaking.
Paperwork Reduction Act (PRA)
    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et 
seq.), Federal agencies must obtain approval from the Office of 
Management and Budget for each collection of information they conduct, 
sponsor, or require through regulations. FHWA has received an average 
of less than one application per year for the SEP-15 program since its 
inception. Therefore, FTA believes that this proposed rule will not 
generate collection of information requirements that impact ten or more 
applicants. FTA seeks comment on whether FTA should anticipate ten or 
more applications to the PIPP on an annual basis.
National Environmental Policy Act
    NEPA requires Federal agencies to analyze the potential 
environmental effects of their proposed actions in the form of a 
categorical exclusion, environmental assessment, or environmental 
impact statement. This proposed rulemaking is categorically excluded 
under FTA's environmental impact procedure at 23 CFR 771.118(c)(4), 
pertaining to planning and administrative activities that do not 
involve or lead directly to construction, such as the promulgation of 
rules, regulations, and directives. FTA has determined that no unusual 
circumstances exist in this instance, and that a categorical exclusion 
is appropriate for this rulemaking.
Executive Order 12630 (Taking of Private Property)
    This rulemaking will not affect a taking of private property or 
otherwise have taking implications under Executive Order 12630 (March 
15, 1998), Governmental Actions and Interference with Constitutionally 
Protected Property Rights.
Executive Order 12898 (Federal Actions To Address Environmental Justice 
in Minority Populations and Low-Income Populations)
    Executive Order 12898, Federal Actions to Address Environmental 
Justice in Minority Populations and Low-Income Populations, and DOT 
Order 5610.2(a) (77 FR 27534) require DOT agencies to achieve 
environmental justice (EJ) as part of their mission by identifying and 
addressing, as appropriate, disproportionately high and adverse human 
health or environmental effects, including interrelated social and 
economic effects, of their programs, policies and activities on 
minority and/or low-income populations. The DOT Order requires DOT 
agencies to address compliance with the Executive Order and the DOT 
Order in all rulemaking activities. In addition, on July 17, 2014, FTA 
issued a circular to update its EJ Policy Guidance for Federal Transit 
Recipients (www.fta.dot.gov/legislation_law/12349_14740.html), which 
addresses administration of the Executive Order and DOT Order.
    FTA has evaluated this rule under the Executive Order, the DOT 
Order, and the FTA Circular and has determined that this rulemaking 
will not cause disproportionately high and adverse human health and 
environmental effects on minority or low income populations.
Executive Order 12988 (Civil Justice Reform)
    This action meets the applicable standards in sections 3(a) and 
3(b)(2) of Executive Order 12988 (February 5, 1996), Civil Justice 
Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
Executive Order 13045 (Protection of Children)
    FTA has analyzed this proposed rulemaking under Executive Order 
13045 (April 21, 1997), Protection of Children from Environmental 
Health Risks and Safety Risks. FTA certifies that this proposed rule 
will not cause an environmental risk to health or safety that may 
disproportionately affect children.
Executive Order 13175 (Tribal Consultation)
    FTA has analyzed this action under Executive Order 13175 (November 
6, 2000), and believes that it will not have substantial direct effects 
on one or more Indian tribes; will not impose substantial direct 
compliance costs on Indian tribal governments; and will not preempt 
tribal laws. Therefore, a tribal summary impact statement is not 
required.
Executive Order 13211 (Energy Effects)
    FTA has analyzed this proposed rulemaking under Executive Order 
13211, Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use (May 18, 2001). FTA has determined that 
this action is not a significant energy action under the Executive 
Order, given that the action is not likely to have a significant 
adverse effect on the supply, distribution, or use of energy. 
Therefore, a Statement of Energy Effects is not requirement.
Privacy Act
    Anyone is able to search the electronic form of all comments 
received into any of FTA's dockets by the name of the individual 
submitting the comment or signing the comment if submitted on behalf of 
an association, business, labor union, or any other entity. You may 
review USDOT's complete Privacy Act Statement published in the Federal 
Register on April 11, 2000, at 65 FR 19477-8.
Statutory/Legal Authority for This Rulemaking
    This rulemaking is issued under the authority of section 
20013(b)(1) of MAP-21, which requires the Secretary to issue rules to 
carry out procedures and approaches for alleviating impediments to P3s 
or private investment in public transportation.
Regulation Identifier Number
    A Regulation Identifier Number (RIN) is assigned to each regulatory 
action listed in the Unified Agenda of Federal Regulations. The 
Regulatory Information Service Center publishes the Unified Agenda in 
April and October of each

[[Page 35505]]

year. The RIN set forth in the heading of this document can be used to 
cross-reference this action with the Unified Agenda.

List of Subjects in 49 CFR Part 650

    Grant programs--transportation, Mass transportation.
    For the reasons set forth in the preamble, and under the authority 
of Section 20013(b)(1) of The Moving Ahead for Progress in the 21st 
Century Act (Pub. L. 112-141) and the delegations of authority at 49 
CFR 1.91, FTA hereby proposes to amend Chapter VI of Title 49, Code of 
Federal Regulations by adding Part 650 to read as follows:

PART 650--PRIVATE INVESTMENT PROJECT PROCEDURES

Sec.
Subpart A--General Provisions
650.1 Purpose.
650.3 Applicability.
650.5 Definitions.
Subpart B--Private Investment Project Procedures
650.11 Private investment project procedures.
650.13 Limitation.
Subpart C--Reporting
650.21 Lessons learned report.
Subpart D--Application Process
650.31 Application requirements.

    Authority: Sec. 20013(b)(5), Pub. L. 112-141, 126 Stat 405; 49 
CFR 1.91.

Subpart A--General Provisions


Sec.  650.1  Purpose.

    This part establishes private investment project procedures that 
seek to identify and address Federal Transit Administration 
requirements that are impediments to the greater use of public-private 
partnerships and private investment in public transportation capital 
projects, while protecting the public interest and any public 
investment in such projects.


Sec.  650.3  Applicability.

    This part applies to any recipient subject to 49 U.S.C. chapter 53 
that funds a public transportation capital project with Federal 
financial assistance under 49 U.S.C. chapter 53, the Transportation 
Infrastructure Finance and Innovation Act (TIFIA) (23 U.S.C. 181-189, 
601-609), the Railroad Rehabilitation and Improvement Financing (RRIF) 
program (45 U.S.C. 821-823), or with any other Federal financial 
assistance.


Sec.  650.5  Definitions.

    All terms defined in 49 U.S.C. chapter 53 are applicable to this 
part. The following definitions also apply to this part:
    Administrator means the Administrator of the Federal Transit 
Administration.
    Application means the formal documentation of an applicant's 
request to modify FTA requirements for an eligible project.
    Eligible project means any surface transportation capital project 
that is subject to 49 U.S.C. chapter 53 and that will be implemented as 
a public-private partnership, a joint development, or with other 
private sector investment.
    FTA means the Federal Transit Administration.
    FTA requirements means, for purposes of this part, existing FTA 
regulations and mandatory provisions of practices, procedures or 
guidance documents, including circulars.
    Joint development has the meaning ascribed to it in FTA Circular 
7050.1 ``Federal Transit Administration Guidance on Joint Development'' 
and, for purposes of this part, includes private sector contributions, 
whether in the form of cash investment, capital construction 
contributed at the private sector's cost or other contribution 
determined by the Administrator to qualify.
    Other private sector investment means a financial or capital 
contribution to an eligible project from a private sector investor that 
is not provided through a public-private partnership or joint 
development.
    Private investment project procedures means the procedures by which 
applicants may propose, and the Administrator may agree, subject to the 
requirements of this part, to modify or waive existing FTA requirements 
for an eligible project.
    Private sector investor means the private sector entity that 
proposes to contribute funding to an eligible project.
    Public-private partnership (P3) means a contractual agreement 
formed between a public agency and a private sector entity that is 
characterized by private sector investment and risk-sharing in the 
delivery, financing and operation of a project.
    Recipient means an entity that proposes to receive Federal 
financial assistance for an eligible project under 49 U.S.C. chapter 
53, RRIF, TIFIA or other Federal financial assistance program.

Subpart B--Private Investment Project Procedures


Sec.  650.11  Private investment project procedures.

    (a) A recipient may, subject to the requirements of this part, 
submit applications to modify or waive existing FTA requirements for an 
eligible project. For projects with multiple recipients, recipients 
may, but are not required to, submit an application for a project 
jointly; however, only one application per project may be submitted. 
All applications shall comply with the requirements of Sec.  650.31.
    (b) Subject to Sec.  650.13, the Administrator may modify or waive 
FTA requirements if the Administrator determines that the recipient has 
demonstrated that--
    (1) The FTA requirement proposed for modification discourages the 
use of a public-private partnership, a joint development, or other 
private sector investment in a Federally assisted public transportation 
capital project,
    (2) The proposed modification or waiver of the FTA requirements is 
likely to have the effect of encouraging a public-private partnership, 
a joint development, or other private sector investment in a Federally-
assisted public transportation capital project,
    (3) The amount of private sector participation or risk transfer 
proposed is sufficient to warrant modification or waiver of FTA 
requirements, and
    (4) Modification or waiver of the FTA requirements can be 
accomplished while protecting the public interest and any public 
investment in the proposed Federally assisted public transportation 
capital project.


Sec.  650.13  Limitation.

    (a) Nothing in this part may be construed to allow the 
Administrator to modify or waive any requirement under-
    (1) 49 U.S.C. 5333;
    (2) The National Environmental Policy Act of 1969 (42 U.S.C. 4321, 
et seq.) or
    (3) Any other provision of Federal statute.
    (b) The Administrator's consideration of an application under this 
part does not commit Federal-aid funding for the project.

Subpart C--Reporting


Sec.  650.21  Lessons learned report.

    No later than one year after completion of a project for which the 
Administrator has modified or waived any FTA requirement pursuant to 
this part, the recipient shall submit to FTA

[[Page 35506]]

a report that evaluates the effect of the modification or waiver of 
Federal requirements on the delivery of the project. The report shall 
describe the modification or waiver applied to the project; evaluate 
the success or failure of the modification or waiver; evaluate the 
extent to which the modification or waiver addressed impediments to 
greater use of public-private partnerships and private investment in 
public transportation capital projects; and may include any recommended 
statutory, regulatory or other changes with an explanation of how the 
changes would encourage greater use of public-private partnerships and 
private investment in public transportation capital projects.

Subpart D--Applications


Sec.  650.31  Application process.

    (a) Applications must be submitted to the FTA Private Sector 
Liaison at the Federal Transit Administration, 1200 New Jersey Avenue 
SE., Washington, DC 20590.
    (b) To be considered, an application submitted under this part 
must--
    (1) Describe the proposed project with respect to anticipated 
scope, cost, schedule, and anticipated source and amount of Federal 
financial assistance,
    (2) Identify whether the project is to be delivered as a public-
private partnership, as a joint development or with other private 
sector investment,
    (3) Describe in detail the role of the private sector investor, if 
any, in delivering the project,
    (4) Identify the specific FTA requirement that the recipient 
requests to have modified or waived and a proposal as to how a 
requirement should be modified,
    (5) Provide a justification for the modification or waiver, 
including an explanation of how the FTA requirement presents an 
impediment to a public-private partnership, joint development, or other 
private sector investment,
    (6) Explain how the public interest and public investment in the 
project will be protected and how FTA can ensure the appropriate level 
of public oversight and control, as determined by the Administrator, is 
undertaken if the modification or waiver is allowed,
    (7) Provide other recipients' concurrence with submission of the 
application and waiver of the right to submit a separate application 
for the same project, where a project has more than one recipient at 
the time of application,
    (8) Provide a financial plan identifying sources and uses of funds 
committed to the project, and
    (9) Explain the expected benefits that the modification or waiver 
of FTA requirements would provide to address impediments to the greater 
use of public-private partnerships and private investment in the 
project.
    (c) The Administrator shall notify the recipient in writing if the 
application fails to meet the requirements of Sec.  650.31(b). If the 
recipient does not supplement an incomplete application within thirty 
days of the date of the Administrator's notification, the application 
will be considered withdrawn without prejudice. The Administrator will 
not consider an application until the application is complete. The 
Administrator reserves the right to request additional information 
beyond the requirements in 650.31(b) upon determining that more 
information is needed to evaluate an application.
    (d) For applications that have been deemed complete, the 
Administrator will notify the recipient in writing as to whether the 
request for modification or waiver is approved or denied. Any approval 
may be given in whole or in part and may be conditioned or contingent 
upon the recipient satisfying the conditions identified in the 
approval.

    Issued on: July 25, 2017.
Matthew J. Welbes,
Executive Director.
[FR Doc. 2017-15985 Filed 7-28-17; 8:45 am]
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