Rural Areas Formula Grant Programs Guidance Proposed Circular, 23618-23621 [2024-07107]

Agencies

• Federal Transit Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 89, Number 66 (Thursday, April 4, 2024)]
[Notices]
[Pages 23618-23621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-07107]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket No. FTA-2024-0004]


Rural Areas Formula Grant Programs Guidance Proposed Circular

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

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

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SUMMARY: The Federal Transit Administration (FTA) has placed in the 
docket and on its website, proposed guidance in the form of an updated 
circular, to assist recipients in their implementation of the Rural 
Areas Formula Program and the rural component of the Buses and Bus 
Facilities Program. The purpose of these proposed updates is to provide 
recipients of FTA financial assistance with updated guidance on program 
administration. The proposed revisions to these circulars are a result 
of changes in the law since the last updates to both the Rural Areas 
and Buses and Bus Facilities circulars. By this notice, FTA invites 
public comment on the proposed circular.

DATES: Comments must be submitted by June 3, 2024. Late-filed comments 
will be considered to the extent practicable.

ADDRESSES: Please submit your comments by only one of the following 
methods, identifying your submission by docket number FTA-2024-0004. 
All electronic submissions must be made to the U.S. Government 
electronic site at https://www.regulations.gov/.
    (1) Federal eRulemaking Portal: Go to https://www.regulations.gov/ 
and follow the online instructions for submitting comments.
    (2) Mail: Docket Management Facility: U.S. Department of 
Transportation, 1200 New Jersey Avenue SE, West Building, Ground Floor, 
Room W12-140, Washington, DC 20590-0001.
    (3) Hand Delivery or Courier: West Building Ground Floor, Room W12-
140, 1200 New Jersey Avenue SE, between 9 a.m. and 5 p.m. Eastern time, 
Monday through Friday, except Federal holidays.
    (4) Fax: 202-493-2251.
    Instructions: You must include the agency name (Federal Transit 
Administration) and Docket number (FTA-2024-0004) for this notice at 
the beginning of your comments. Submit two copies of your comments if 
you submit them by mail. For confirmation that FTA received your 
comments, include a self-addressed stamped postcard. Note that all 
comments received will be posted without change to https://www.regulations.gov/ including any personal information provided and 
will be available to internet users. For information on DOT's 
compliance with the Privacy Act, please visit https://www.transportation.gov/privacy.
    Docket: For access to the docket to read background documents and 
comments received, go to https://www.regulations.gov/ at any time or to 
the U.S. Department of Transportation, 1200 New Jersey Ave. SE, Docket 
Operations, M-30, West Building Ground Floor, Room W12-140, Washington, 
DC 20590 between 9 a.m. and 5 p.m. Eastern Time, Monday through Friday, 
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: For program questions, Jay Lindsey, 
Office of Program Management, phone, (202)

[[Page 23619]]

366-6299 or email, [email protected]. For legal questions, Bonnie 
Graves, Office of Chief Counsel, phone, (202) 366-0944, or email, 
[email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Overview
II. Chapter-by-Chapter Analysis
    A. Chapter I--Introduction and Background
    B. Chapter II--Program Overview
    C. Chapter III--General Program Information
    D. Chapter IV--Eligible Projects and Requirements
    E. Chapter V--Planning and Program Development
    F. Chapter VI--Program Management and Administrative 
Requirements
    G. Chapter VII--State Management Plan
    H. Chapter VIII--Appalachian Development Public Transportation 
Assistance Program (ADTAP)
    I. Chapter IX--Intercity Bus
    J. Chapter X--Rural Transportation Assistance Program (RTAP)
    K. Chapter XI--Public Transportation on Indian Reservations
    L. Appendices

I. Overview

    The Federal Transit Administration's (FTA) proposed circular, 
``Rural Areas Formula Grant Programs Guidance,'' C 9040.1H, is a 
consolidation of guidance for the administration and preparation of 
grant applications for the Rural Areas Formula Grants Program under 49 
U.S.C. 5311 (FTA circular 9040.1) and the rural area component of the 
Grants for Buses and Bus Facilities Program under 49 U.S.C. 5339(a) 
(FTA circular 5100.1). Additionally, this updated circular incorporates 
provisions of the FAST Act (Pub. L. 114-94), the Infrastructure 
Investment and Jobs Act (IIJA) (Pub. L. 117-58), and other changes in 
law, and includes program-specific guidance for these formula programs. 
Additional requirements for all grant programs are identified in FTA's 
Award Management Requirements circular 5010.1. The availability of the 
proposed 5010 circular and request for public comment was published in 
the Federal Register (89 FR 11334, Feb. 14, 2024) and is posted on 
https://www.regulations.gov in Docket FTA-2024-0003.
    The proposed update to circular 9040.1 consolidates and summarizes 
programmatic information, streamlines pre-existing guidance from the 
two program circulars, and reduces duplication of information provided 
between the Rural Areas Formula Program circular and FTA's other topic-
specific circulars, including by moving certain text applicable to most 
or all of FTA's grant programs to FTA's Award Management Requirements 
circular 5010.1. Furthermore, the proposed circular incorporates 
statutory changes and clarifies a number of policy issues as 
interpreted and applied by FTA. Statutory changes for section 5311 
include additional sources of local share; in-kind match for intercity 
bus service; and fund allocations for tribes. Statutory changes for 
section 5339(a) include the application of section 5311 requirements to 
section 5339 grants in rural areas; additional source for local share; 
additional eligible entities; and use of procurement tools authorized 
under section 3019 of the FAST Act. Policy clarifications address 
topics in the existing program circulars, including consolidation of 
grants to insular areas; eligible projects and activities for each 
formula program; operating assistance limitations and exceptions; 
capital cost of contracting; the role of transportation network 
companies in providing public transportation services; and period of 
availability to obligate funds flexed to FTA formula programs from the 
Federal Highway Administration (FHWA).
    In addition to statutory and policy updates, the Office of 
Management and Budget (OMB) issued 2 CFR part 200, Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards, also known as the Uniform Guidance, in December 
2013, which superseded the Common Grant Rule, formerly codified at 49 
CFR parts 18 and 19. Due to the timing of the last circular update and 
the effective date of the Uniform Guidance, FTA circular 9040.1G 
continued to reference 49 CFR parts 18 and 19. FTA has updated these 
references, including definitions, in proposed circular 9040.1H.
    This notice provides a summary of proposed changes to the current 
circular 9040.1G, ``Formula Grants for Rural Areas: Program Guidance 
and Grant Application Instructions.'' FTA invites public comment on the 
substance and format of the proposed circular.

A. Chapter I--Introduction and Background

    Due to the consolidation of the two program circulars, definitions 
and program descriptions were compared and revised for consistency with 
proposed updates to circular 5010.1E ``Award Management Requirements,'' 
circular 9030.1E ``Formula Grants for Urbanized Areas,'' and circular 
9070.1G ``Enhanced Mobility of Seniors and Individuals with 
Disabilities.'' FTA proposes to amend the definitions section for 
consistency, clarification, and to reflect changes in statutes and 
other authorities. For example, FTA has updated the following terms: 
``Capital Asset'' is modified for consistency with Generally Accepted 
Accounting Principles (GAAP), Governmental Accounting Standards Board 
(GASB), Financial Accounting Standards Board (FASB), and FTA's Uniform 
System of Accounts. ``Clean Fuel Bus'' recognizes low or no emissions 
technologies other than full electric and hybrid electric buses. 
``Rehabilitate'' is expanded to include applicability to bus facilities 
and amended to clarify that not all rehabilitative activities must be a 
restoration to original condition, to more accurately reflect the 
term's broad usage in 49 U.S.C. 5339. ``Urbanized Area'' is updated to 
reflect changes in designation by the U.S. Census Bureau, which no 
longer utilizes ``Urbanized Area'' (UZA) but instead uses ``Urban 
Area,'' as defined by the Secretary of Commerce. ``Useful Life'' now 
applies to real property and other capital assets. Because useful life 
depends on depreciation and estimated time in use, consideration of 
useful life varies according to the type of asset in question.

B. Chapter II--Program Overview

    Chapter II of the proposed circular contains information related to 
program goals, State and FTA roles in program administration, and 
relationship of the section 5311 program to other programs. These 
sections are in the current 9040.1G circular and the language is 
generally unchanged, with updates where appropriate. Consistent with 
the consolidation of section 5339 program requirements into the new 
circular, the updated chapter contains information related to section 
5339 as well as section 5311. FTA proposes to add a section on program 
measures with broad measures for both section 5311 and section 5339. In 
addition, FTA proposes a new section on program oversight.

C. Chapter III--General Program Information

    FTA proposes substantially reorganizing the material found in 
Chapters III-V of circular 9040.1G, consistent with the reorganization 
of the Urbanized Area Program circular. Material in Chapters III-V of 
circular 9040.1G not moved to circular 5010.1 generally is in Chapters 
III-VI of the proposed circular. For example, some of the information 
contained in Chapter III of the current circular remains in this 
chapter, and other information moves to Chapter IV. Eligible 
recipients, apportionment of funds, and local share of project costs 
remain in Chapter III,

[[Page 23620]]

but in a different order. FTA has clarified in the updated circular 
that local share is waived for insular areas. FTA proposes moving 
eligible activities, including discussions related to job access/
reverse commute, operating, administrative, and capital expenses, to 
Chapter IV. A new section in Chapter III discusses the eligibility of 
rural funds for use in urbanized areas. In addition, we have included a 
section on taxis and transportation network companies, and when these 
entities may be subrecipients or contractors. This section has been in 
FTA's 9070.1 circular for many years and is slightly modified for the 
section 5311 program. FTA has historically treated transportation 
network companies (TNCs) the same as taxis, given they both provide on-
demand, exclusive ride service, primarily in automobiles. Where taxis 
and TNCs provide shared ride service, they may be subrecipients. 
Exclusive-ride companies may be contractors for job access reverse 
commute (JARC) service under section 5311, as eligible JARC activities 
include service that does not meet the definition of ``public 
transportation'' in 49 U.S.C. 5302(15).

D. Chapter IV--Eligible Projects and Requirements

    Chapter IV in circular 9040.1G is titled ``Program Development.'' 
As stated above, FTA proposes moving some of the information found in 
Chapter III of the existing circular to Chapter IV. In addition, we 
propose moving much of the information found in Chapter IV of circular 
9040.1G to Chapter V of circular 9040.1H. Chapter IV in the updated 
circular includes information related to eligible projects. Given the 
consolidation of the Rural Areas and Buses and Bus Facilities 
circulars, this chapter specifies which activities are eligible under 
each of the programs. Capital leases to replace vehicles are eligible, 
and in the event a contractor is used to provide service, the actual 
costs of a capital lease can be removed from the operating contract and 
funded at an 80 percent federal share, or the recipient can utilize 
capital cost of contracting. FTA proposes two new sections: employee 
training expenses, and interest and debt financing as an eligible cost. 
FTA proposes moving information related to certifications and 
assurances, pre-award authority and grant award and project approval to 
FTA circular 5010.1.

E. Chapter V--Planning and Program Development

    The proposed circular moves much of the information found in 
Chapter V of circular 9040.1G, to FTA's circular 5010.1, Award 
Management Requirements, including information on procurement, 
financial management, data universal numbering system (DUNS), system 
for awards management (SAM), electronic clearinghouse operation (ECHO), 
and other topics that apply to all FTA grant programs. Most of the 
information not moved to circular 5010.1 is moved to Chapter VI of the 
proposed circular 9040.1H, including satisfactory continuing control, 
state financial records, reporting requirements and the state 
management plan.
    FTA proposes moving much of the information in Chapter IV of 
circular 9040.1G, including fair and equitable distribution of funds, 
planning requirements, performance-based planning, intercity bus 
consultation, program of projects, to proposed Chapter V of circular 
9040.1H. Chapter V includes a reference to pre-award authority, but the 
full discussion is included in FTA Circular 5010.1. The proposed 
Chapter V also includes information related to coordinated planning, 
availability of FHWA funds flexed to transit projects, transit asset 
management requirements, public transit safety requirements, and 
environmental considerations. As with other chapters, FTA has updated 
this chapter to include references to section 5339 as appropriate. The 
chapter contains updates and clarifications to the program of projects 
and coordinated planning requirements. FTA proposes updating the 
section describing flex funding from FHWA and includes a period of 
availability for funds that are transferred. FTA proposes moving 
sections on transit asset management and safety from Chapter XI of 
circular 9040.1G to this chapter and has updated the text consistent 
with changes in law and with the transit asset management and safety 
regulations issued after the last circular update.

F. Chapter VI--Program Management and Administrative Requirements

    Chapter VI of circular 9040.1G is the state management plan; FTA 
proposes moving this to Chapter VII. The new Chapter VI contains 
information on satisfactory continuing control and responsibility, 
state financial records, construction management and oversight, 
reporting requirements, state management plan, and FTA state management 
plan review. FTA proposes adding references to section 5339 as 
appropriate; the substance of these sections is substantially similar 
to these sections in the current circulars.

G. Chapter VII--State Management Plan

    Proposed Chapter VII is substantially similar to Chapter VI of 
circular 9040.1G, except it adds references to section 5339 and removes 
the section on State Management Plan Reviews, which is moved to Chapter 
VI. Thus, Chapter VII includes general information, a statement 
regarding the purpose of state management plans, the contents of state 
management plans, and making state management plan revisions.

H. Chapter VIII--Appalachian Development Public Transportation 
Assistance Program (ADTAP)

    Proposed Chapter VIII is substantially similar to Chapter VII of 
circular 9040.1G. FTA proposes removing text related to eligible 
projects, local share, and planning requirements, and instead includes 
the statement that all requirements and eligibilities for section 5311 
apply to ADTAP funds.

I. Chapter IX--Intercity Bus

    Proposed Chapter IX is substantially similar to Chapter VIII in the 
current FTA circular 9040.1G, with the exceptions stated here. FTA has 
updated the section on in-kind match to reflect a change in the law. 
Intercity bus projects that include both feeder service and an 
unsubsidized segment of intercity bus service to which the feeder 
service connects, may use all operating and capital costs of 
unsubsidized segments, whether or not offset by revenue from such 
service, as an in-kind match for the operating costs of connecting 
rural intercity bus feeder service funded under section 5311(f). This 
section provides an example of how to calculate this in-kind match. In 
the section describing eligible services and service areas, FTA 
clarifies long-standing policy that a service is considered ``commuter 
service'' (and therefore does not meet the 15 percent intercity bus 
requirement of section 5311(f)) if at least 50 percent of passengers 
make a return trip on the same day across all service runs for one 
year. Finally, FTA has added text stating that private operators 
providing intercity service using vehicles other than over-the-road-
buses are subject to the U.S. DOT Americans with Disabilities Act (ADA) 
regulations governing fixed route or demand responsive service by 
private entities.

J. Chapter X--Rural Transportation Assistance Program (RTAP)

    Proposed Chapter X is substantially similar to Chapter IX in 
circular 9040.1G, except the section on the national program is 
enhanced to include more specific elements.

[[Page 23621]]

K. Chapter XI--Public Transportation on Indian Reservations

    FTA proposes moving most of the content of Chapter XI (``Other 
Provisions'') in circular 9040.1G to circular 5010.1, as the cross-
cutting requirements summarized in that chapter apply to most or all of 
FTA's grant programs. Proposed Chapter XI is substantially similar to 
Chapter X in circular 9040.1G, with the exceptions stated here. There 
is a new paragraph on tribal self-governance, and how funds provided to 
a tribe with a self-governance compact between the tribe and U.S. DOT 
will be administered. In the section on eligible services and service 
areas, FTA clarifies that funds provided to tribes must be used to 
serve the general population in rural areas, and not just tribal 
members. In the section on matching requirements, the requirement has 
changed from an automatic 10 percent local match requirement for 
competitive funds to a variance depending on the allocation year. Local 
match requirements will be stated in notices of funding opportunity. 
Finally, FTA has updated the section related to indirect cost rate.

L. Appendices

    FTA proposes to move most of the appendices currently found in 
circular 9040.1G to FTA circular 5010.1. The remaining appendices 
include Appendix A, Procedures Related to Flexible Funding, and 
Appendix B, Sample Intercity Bus Certification. Appendix A is updated 
consistent with changes in the law and adding a period of availability 
to funds flexed from FHWA. Appendix B is substantially unchanged from 
the intercity bus certification appendix in circular 9040.1G.
    FTA invites public comment on the structure and content of proposed 
circular 9040.1H.
    After a review and consideration of the comments provided on this 
proposed circular, FTA will publish the updated circular on its website 
and will announce the availability of the updated circular and the 
response to comments in the Federal Register.
    Note that on October 5, 2023, the Office of Management and Budget 
(OMB) published a notice of proposed rulemaking in the Federal Register 
to revise 2 CFR part 200 and other OMB guidance for grants and 
agreements (88 FR 69390). FTA intends to incorporate any changes in 2 
CFR part 200 to the extent OMB issues the final rule before FTA 
publishes the final updated circular.

Veronica Vanterpool,
Acting Administrator.
[FR Doc. 2024-07107 Filed 4-3-24; 8:45 am]
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