Capital Leases, 47574-47576 [2018-20474]

Agencies

• Federal Transit Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 83, Number 183 (Thursday, September 20, 2018)]
[Rules and Regulations]
[Pages 47574-47576]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20474]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

49 CFR Part 639

[Docket No. FTA-2018-0006]
RIN 2132-AB34


Capital Leases

AGENCY: Federal Transit Administration (FTA), Department of 
Transportation.

ACTION: Final rule.

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SUMMARY: This rulemaking rescinds the regulation implementing the 
requirement for recipients to conduct a cost-effectiveness analysis 
before leasing public transportation equipment or facilities with 
Federal transit funds. The requirement to conduct a cost-effectiveness 
analysis was rescinded by statute in 2015.

DATES: This final rule is effective on September 20, 2018.

FOR FURTHER INFORMATION CONTACT: Mark Montgomery, Office of Chief

[[Page 47575]]

Counsel, (202) 366-1017 or [email protected]. Office hours are 
from 9 a.m. to 5:30 p.m., ET, Monday through Friday, except Federal 
holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access and Filing

    This document is viewable online through the Federal eRulemaking 
portal at https://www.regulations.gov. Retrieval help and guidelines are 
available on the website. It is available 24 hours each day, 365 days a 
year. An electronic copy of this document is available for download 
from the Office of the Federal Register home page at: https://www.ofr.gov and the Government Publishing Office web page at: https://www.gpo.gov.

Background

    49 CFR part 639 limits capital leasing arrangements for use in 
public transportation to those that are more cost-effective than 
purchase or construction. This part implements section 3003 of the 
Transportation Equity Act for the 21st Century (Pub. L. 105-178) (TEA-
21), which amended section 5302 of title 49, United States Code 
(Section 5302), to allow a recipient to use capital funds to finance 
the leasing of facilities and equipment on the condition that the 
leasing arrangements are more cost-effective than purchase or 
construction. This section also required the Secretary to promulgate 
regulations to implement the cost-effectiveness limitation. Recently, 
section 3002 of the Fixing America's Surface Transportation Act (Pub. 
L. 114-357) (FAST Act) amended the definition of ``capital project'' 
under section 5302 to remove this requirement and the mandate to 
promulgate regulations to carry out this requirement. For this reason, 
FTA is issuing this final rule to rescind 49 CFR part 639.
    FTA will continue to evaluate its regulations and guidance to 
promote improvements to the capital leasing process in the least 
burdensome manner.

Discussion of the Changes

    Under the amended statutory definition of ``capital project,'' 
capital leases are no longer subject to the requirement or regulation 
limiting leasing arrangements to those that are more cost-effective 
than purchase or construction. Accordingly, this rulemaking rescinds 49 
CFR part 639, which outlines the procedures for conducting the cost-
effectiveness analysis. This rule does not affect the general 
procurement standards in 2 CFR part 200, nor does it alter the award 
management requirements in FTA's Circular 5010.1E.
    Under the Administrative Procedure Act (APA) (5 U.S.C. 553(b)), an 
agency may waive the normal notice and comment procedure if it finds, 
for good cause, that it is impracticable, unnecessary, or contrary to 
the public interest. Additionally, 5 U.S.C. 553(d) provides that an 
agency may waive the 30-day delayed effective date upon finding of good 
cause.
    Section 3003 of TEA-21 amended section 5302 to allow a recipient to 
use capital funds to finance the leasing of facilities and equipment, 
``subject to regulations that the Secretary prescribes limiting the 
leasing arrangements to those that are more cost-effective than 
purchase or construction.'' By removing this language, section 3002 of 
the FAST Act eliminated the requirement limiting capital leases to 
those that are more cost-effective than purchase or construction. FTA 
finds good cause that notice and comment for this rule is unnecessary 
due to the nature of the revisions (i.e., the rule simply carries out 
the statutory language found in the FAST Act). The statutory language 
does not require regulatory interpretation to carry out its intent, and 
comments cannot alter the regulation given that the statute abrogated 
its purpose. Further, the delayed effective date is unnecessary because 
the removal of the cost-effectiveness analysis requirement was already 
made effective by the FAST Act. Accordingly, FTA finds good cause under 
5 U.S.C. 553(b)(3)(B) and (d)(3) to waive notice and opportunity for 
comment and the delayed effective date.

Rulemaking Analyses and Notices

Executive Order 12866 (Regulatory Planning and Review), Executive Order 
13563 (Improving Regulation and Regulatory Review), Executive Order 
13771 (Reducing Regulation and Controlling Regulatory Costs), and 
Department of Transportation (DOT) Regulatory Policies and Procedures

    FTA has determined that this rulemaking is not a significant 
regulatory action within the meaning of Executive Order 12866, and 
within the meaning of DOT regulatory policies and procedures. This 
action complies with Executive Orders 12866, 13563 and 13771 to improve 
regulation.
    FTA classifies this rule as a deregulatory action under Executive 
Order 13771, because it removes the mandatory cost-effectiveness 
analysis. FTA finds that the cost savings are minor. On average, there 
are twelve leases per year subject to the requirement, and the analysis 
takes approximately a week for transit agencies to compile and prepare 
and approximately eight hours for FTA to review and approve the 
certification. Thus, removing these requirements would provide a 
maximum average annual cost savings of $32,373 and impose no additional 
costs on recipients.

Regulatory Flexibility Act

    Because FTA finds good cause under 5 U.S.C. 553(b)(3)(B) to waive 
notice and opportunity for comment for this rule, the provisions of the 
Regulatory Flexibility Act (Pub. L. 96-354, 5 U.S.C. 601-612) do not 
apply. FTA evaluated the effects of this action on small entities and 
determined the action would not have a significant economic impact on a 
substantial number of small entities. FTA hereby certifies that this 
rule will not have a significant economic impact on a substantial 
number of small entities.

Unfunded Mandates Reform Act of 1995

    FTA has determined that this rule does not impose unfunded 
mandates, as defined by the Unfunded Mandates Reform Act of 1995 (Pub. 
L. 104-4, March 22, 1995, 109 Stat. 48). This rule does not include a 
Federal mandate that may result in expenditures of $155.1 million or 
more in any 1 year (when adjusted for inflation) in 2012 dollars for 
either State, local, and tribal governments in the aggregate, or by the 
private sector. Additionally, the definition of ``Federal mandate'' in 
the Unfunded Mandates Reform Act excludes financial assistance of the 
type in which State, local, or tribal governments have authority to 
adjust their participation in the program in accordance with changes 
made in the program by the Federal Government. The Federal Transit Act 
permits this type of flexibility.

Executive Order 13132 (Federalism Assessment)

    Executive Order 13132 requires agencies to assure meaningful and 
timely input by State and local officials in the development of 
regulatory policies that may have a substantial direct effect on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. This action has been analyzed in 
accordance with the principles and criteria contained in Executive 
Order 13132 dated August 4, 1999, and FTA determined this action will 
not have a substantial direct effect

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or sufficient federalism implications on the States. FTA also 
determined this action will not preempt any State law or regulation or 
affect the States' ability to discharge traditional State governmental 
functions.

Executive Order 12372 (Intergovernmental Review)

    The regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities apply 
to this program.

Paperwork Reduction Act

    Federal agencies must obtain approval from the Office of Management 
and Budget (OMB) for each collection of information they conduct, 
sponsor, or require through regulations. FTA has analyzed this rule 
under the Paperwork Reduction Act and believes that it does not impose 
additional information collection requirements for the purposes of the 
Act above and beyond existing information collection clearances from 
OMB.

National Environmental Policy Act

    Federal agencies are required to adopt implementing procedures for 
the National Environmental Policy Act (NEPA) that establish specific 
criteria for, and identification of, three classes of actions: (1) 
Those that normally require preparation of an Environmental Impact 
Statement, (2) those that normally require preparation of an 
Environmental Assessment, and (3) those that are categorically excluded 
from further NEPA review (40 CFR 1507.3(b)). This rule qualifies for 
categorical exclusions under 23 CFR 771.118(c)(4) (planning and 
administrative activities that do not involve or lead directly to 
construction). FTA has evaluated whether the rule will involve unusual 
or extraordinary circumstances and has determined that it will not.

Executive Order 12630 (Taking of Private Property)

    FTA has analyzed this rule under Executive Order 12630, 
Governmental Actions and Interference with Constitutionally Protected 
Property Rights. FTA does not believe this rule effects a taking of 
private property or otherwise has taking implications under Executive 
Order 12630.

Executive Order 12988 (Civil Justice Reform)

    This rule meets applicable standards in sections 3(a) and 3(b)(2) 
of Executive Order 12988, Civil Justice Reform, to minimize litigation, 
eliminate ambiguity, and reduce burden.

Executive Order 13045 (Protection of Children)

    FTA has analyzed this rule under Executive Order 13045, Protection 
of Children from Environmental Health Risks and Safety Risks. FTA 
certifies that this action will not cause an environmental risk to 
health or safety that might disproportionately affect children.

Executive Order 13175 (Tribal Consultation)

    FTA has analyzed this rule under Executive Order 13175, dated 
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 action under Executive Order 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. FTA has determined that this action is not a 
significant energy action under that order and 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 required.

Executive Order 12898 (Environmental Justice)

    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, May 10, 2012) (available online at https://www.fhwa.dot.gov/environment/environmental_justice/ej_at_dot/order_56102a/index.cf) 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 
low-income populations. All DOT agencies must address compliance with 
Executive Order 12898 and the DOT Order in all rulemaking activities. 
On August 15, 2012, FTA's Circular 4703.1 became effective, which 
contains guidance for recipients of FTA financial assistance to 
incorporate EJ principles into plans, projects, and activities 
(available online at https://www.fta.dot.gov/documents/FTA_EJ_Circular_7.14-12_FINAL.pdf).
    FTA has evaluated this action under the Executive Order, the DOT 
Order, and the FTA Circular. The rule rescinds the requirement of 
conducting cost-effectiveness analysis for capital leases, and FTA has 
determined that this action will not cause disproportionately high and 
adverse human health and environmental effects on minority or low-
income populations.

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 year. The RIN number contained in the heading 
of this document can be used to cross-reference this rule with the 
Unified Agenda.

List of Subjects in 49 CFR Part 639

    Grant programs--transportation, Mass transportation.

    Issued in Washington, DC, under authority delegated in 49 CFR 
1.90:
K. Jane Williams,
Acting Administrator.

Title 49--Transportation

PART 639--[REMOVED AND RESERVED]

0
In consideration of the foregoing, and under the authority of 49 U.S.C. 
5302 and Public Law 114-357, amend 49 CFR chapter VI by removing and 
reserving part 639, consisting of Sec. Sec.  639.1 through 639.33.

[FR Doc. 2018-20474 Filed 9-19-18; 8:45 am]
BILLING CODE P