Award Management Requirements, Final Circular, 79336-79345 [2024-22160]

Agencies

• Federal Transit Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 89, Number 188 (Friday, September 27, 2024)]
[Notices]
[Pages 79336-79345]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-22160]


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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket No. FTA-FTA-2024-0003]


Award Management Requirements, Final Circular

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

ACTION: Notice of availability of final circular and response to 
comments.

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SUMMARY: The Federal Transit Administration (FTA) has made available on 
its website the final updated Award Management Requirements Circular (C 
5010.1). The updated circular combines requirements applicable to all 
FTA financial assistance awards (referred to as ``cross-cutting'' 
requirements) and supersedes the previous Award Management Requirements 
Circular C 5010.1E. This notice responds to the comments FTA received 
on the proposed circular, which was published in the Federal Register 
on February 14, 2024.

DATES: The applicable date of this circular is November 1, 2024.

ADDRESSES: One may view the comments at docket number FTA-2024-0003. 
For access to the docket, please visit https://www.regulations.gov or 
the Docket Operations office located in the West Building of the United 
States Department of Transportation, Room W12-140, 1200 New Jersey 
Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m. Monday 
through Friday.

FOR FURTHER INFORMATION CONTACT: For award management questions, 
Latrina Trotman, Office of Program Management, Federal Transit 
Administration, 1200 New Jersey Ave. SE, Room E46-301, Washington, DC 
20590, phone: (202) 366-2328, or email, [email protected]. For 
legal questions, Jerry Stenquist, Office of Chief Counsel, same 
address, Room E56-314, phone: (202) 493-8020, or email, 
[email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Overview
II. Responses to Public Comments
    A. Comments for Which No Changes Were Made
    B. Changes Based on Public Comments
    C. Comment Requesting Technical Assistance
III. Other Updates

I. Overview

    This notice announces the availability of FTA Circular C 5010.1F, 
Award Management Requirements. C 5010.1F replaces C 5010.1E, with an 
applicable date of November 1, 2024. This circular incorporates 
provisions of Federal law enacted since the publication of C 5010.1E, 
including the Infrastructure Investment and Jobs Act (Pub. L. 117-58); 
the Office of Management and Budget's (OMB) and United States 
Department of Transportation's (USDOT) updated Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal 
Awards at 2 CFR part 200 (89 FR 30046, effective October 1, 2024) and 2 
CFR part 1201, respectively; USDOT's regulation implementing the 
Uniform Relocation Assistance and Real Property Acquisition Policies 
Act of 1970 (Uniform Act) (49 CFR part 24); and USDOT's Disadvantaged 
Business Enterprise (DBE) regulation (49 CFR part 26).
    The purpose of Circular 5010.1 is to summarize generally applicable 
FTA administrative requirements for financial assistance awards 
(colloquially referred to as ``cross-cutting requirements'') while 
consolidating other pre-existing cross-cutting guidance historically 
included in other FTA program circulars, including the pre-existing 
``Formula Grants for Rural Areas'' (C 9040.1G), ``Enhanced Mobility of 
Seniors and Individuals with Disabilities'' (C 9070.1G), ``Bus and Bus 
Facilities Formula Program'' (C 5100.1), ``State of Good Repair Grants 
Program'' (C 5300.1), and ``Urbanized Area Formula Program'' (C 
9030.1E) circulars, reducing duplicative, redundant, and conflicting 
information in separate circulars. The last three of these circulars 
have been consolidated and superseded by a new circular, ``Urbanized 
Areas Formula Grant Programs Guidance'' (C 9050.1A), which is being 
published contemporaneously with this updated C 5010.1F. The first two 
are also being updated and superseded with circulars published 
contemporaneously.
    Additionally, the revisions update or clarify descriptions of 
policy to explain current FTA practices. The circular updates include 
FTA policies regarding real property status reporting, the incidental 
use of FTA-funded project property, and transfer of real property to 
third parties for affordable housing. The circular updates also 
increase the use of graphics, tables, and weblinks to improve clarity. 
A copy of the circular is in the docket and is posted on FTA's 
Circulars page (https://www.transit.dot.gov/regulations-and-guidance/fta-circulars/circulars).

[[Page 79337]]

II. Responses to Public Comments

    FTA published notice for the proposed C 5010.1F in the Federal 
Register on February 14, 2024 (89 FR 11334), seeking public comment. 
FTA received seventy-four comments from twelve unique commenters. FTA 
reviewed the comments and discusses below the changes that FTA made in 
the final circular based on public comments. FTA also addresses 
comments for which no changes were made in the final circular. FTA 
appreciates the commenters who expressed support for updates in the 
circular, as well as those who provided feedback on administrative non-
substantive changes, such as recommending corrections for typographical 
errors and document formatting. FTA has reviewed and made these changes 
to the final circular, as necessary. In cases where a commenter found 
FTA's guidance confusing or requested clarification and FTA declined to 
amend the circular, the commenter should contact the FTA regional 
office responsible for administering its awards for assistance.

A. Comments for Which No Changes Were Made

Comments Outside the Scope of FTA C 5010.1F
    FTA declined to make changes in response to some comments because 
the comments' subject matter was outside the scope of this circular. 
Topics that were outside the scope of the circular include: State DOT 
policies for subrecipients' completion of National Environmental Policy 
Act (NEPA) requirements for non-federally funded projects and notes on 
circular changes apparently intended for the commenter's internal 
communication.
Cloud-Based Computing Technology
    Comment: One commenter requested FTA clarify whether cloud-based 
computing technology is a capital or operating expense.
    FTA Response: FTA declines to make a change based on this comment. 
C 5010.1F sufficiently establishes that cloud-based computing 
technology is included under the definition of ``Information Technology 
Systems,'' which, by extension, is included under the definition of 
``Equipment.'' If cloud-based computing technology qualifies as 
``Equipment,'' it may be considered a capital expense as opposed to an 
operating expense.
Major Capital Project Construction Oversight
    Comment: One commenter suggested FTA institute a time limit for 
FTA's review of technical plans and specifications for a major capital 
project so as not to delay a project from construction. The commenter 
also expressed concerns that the proposed C 5010.1F does not specify 
the milestones during the design of a project at which FTA may request 
to review the technical plans and specifications.
    FTA Response: FTA declines to make a change in response to the 
comment. FTA declines to establish generally applicable design 
milestones and corresponding time limits because the stages of design 
at which technical plans and specifications should be reviewed, and the 
duration of time it takes to review them, are better determined on a 
case-by-case basis. FTA reviews the design of major capital projects at 
various stages during a project's lifecycle, which is established in 
consultation with project sponsors. This project-specific approach 
retains flexibility and efficiency in FTA's review, benefiting both FTA 
and recipients.
FTA Technical and Construction Oversight Review
    Comment: One commenter asked how quickly FTA's reviews of technical 
plans and specifications of a project will occur if FTA deems such a 
review necessary. The commenter expressed concern that designs that may 
need to be reviewed could be time sensitive. The commenter also 
mentioned that there is no guidance on what ``projects'' the oversight 
review requirement may concern and asked whether there are there 
specific cost thresholds for projects that would trigger a review.
    FTA Response: FTA declines to make a change in response to this 
comment. If deemed necessary, FTA may review technical plans and 
specifications of a project to ensure proper execution, consistency 
with the scope of work and need, and incorporation of FTA requirements. 
The duration of such a review necessarily depends on multiple factors 
that are distinct to the project in question and cannot be prescribed. 
For the referenced provision, there is no set cost threshold for 
projects that could trigger such a review. However, all projects that 
meet the definition of a ``Major Capital Project'' are subject to 
design reviews at different stages during a project's lifecycle.
Incidental and Shared Use
    Comment: One commenter thanked FTA for the updated definition of 
``Equipment.'' The comment also requested FTA reference the definition 
of ``Equipment'' in other parts of the circular related to the concept 
of incidental use.
    FTA Response: FTA declines to make a change in response to the 
comment. The definitions section controls the use of the term 
``Equipment'' throughout the circular. No additional identification of 
the term is required.
    Comment: One commenter asked that FTA clarify that incidental use 
and shared use can apply to property other than just real property.
    FTA Response: FTA declines to make a change in response to this 
comment. The circular is sufficiently clear that the incidental use 
provisions apply to equipment. The definition of ``Incidental Use'' is 
``the limited non-transit use of project property that does not 
conflict with the original authorized purpose of the project property 
or the recipient's ability to maintain satisfactory continuing 
control.'' The circular defines ``Project Property'' to include both 
real property and personal property.
    Comment: FTA's definitions of ``Incidental Use'' and ``Shared Use'' 
authorize certain non-transit uses of transit property. One commenter 
asked FTA to modify these definitions so that uses that support or 
relate to public transportation in some way would not be categorized as 
non-transit uses.
    FTA Response: FTA declines to make a change in response to this 
comment. FTA's definitions of ``Incidental Use'' and ``Shared Use'' 
sufficiently identify FTA's intended treatment of property uses that 
support public transportation, which provides recipients with 
flexibility to use project property for both transit and non-transit 
purposes. The commenter's proposed recategorization of property uses 
would not create additional flexibilities and conflict with the 
definition of ``Public Transportation'' at 49 U.S.C. 5302.
    Comment: A commenter asked FTA to provide further guidance for 
establishing the allocation of applicable costs of a shared use of 
project property.
    FTA Response: FTA declines to make a change in response to this 
comment. The circular says the costs of shared uses are tied to the pro 
rata share of the construction, acquisition, maintenance, and operating 
costs that the shared use represents. The method of determining pro 
rata costs will vary depending on the particular shared use. FTA 
declines to be more prescriptive as to determining pro rata share 
because the circular's purpose is to provide general guidance and allow 
for flexibility.

[[Page 79338]]

    Comment: One commenter expressed concern that FTA's incidental use 
policy in Chapter IV restricts leases of FTA-assisted real property to 
a one-year term.
    FTA Response: FTA declines to make a change based on this comment. 
The policy in the circular does not limit leases for the incidental use 
of FTA-assisted real property to one year. Rather, the revision 
modifies FTA policy by changing FTA's review of incidental uses from a 
concurrence process to a notice process. Except in cases of utility, 
ingress, and egress use, FTA now requires 30-day prior notice for 
incidental uses that will: (1) encumber title to the project property, 
(2) exceed a term of one year, or (3) allow for the installation of 
real property fixtures onto project property by third parties.
    If none of these apply to an incidental use, a 30-day notice is not 
required. Nevertheless, recipients must keep a record of all incidental 
uses, which may be reviewed during a compliance review or audit.
Real Property
    Comment: One commenter requested that FTA add property use 
restrictions to the list of items included in an appraisal report that 
may affect the appraised value.
    FTA Response: FTA declines to make a change in response to this 
comment. 49 CFR 24.103 establishes the requirements for appraisals, 
which are intended to be consistent with the Uniform Standards of 
Professional Appraisal Practice (USPAP) and already require the 
appraiser to consider factors like land use restrictions and 
encumbrances when determining market value.
    Comment: Three commenters expressed support for the circular's 
exemption from FTA's concurrence on real property appraisals for major 
capital projects when FTA has determined that a recipient's Real 
Property Acquisition and Management Plan (RAMP) establishes that the 
recipient is adequately prepared to comply with Federal requirements 
when acquiring project property. One of the three commenters requested 
that FTA provide additional information to guide recipients' drafting 
of a RAMP and the changes to the existing circular.
    FTA Response: FTA declines to make a change based on these 
comments. A RAMP is required of all FTA-designated major capital 
projects. FTA provides technical assistance and feedback to project 
sponsors through its project management oversight contractor (PMOC) 
program on the development of a project-specific RAMP document. 
Appendix D of the circular includes a model outline for the development 
of a RAMP document. FTA is also exploring other ways to provide 
training and technical assistance to major capital project sponsors on 
the RAMP development process.
    Comment: One commenter opined that, by deleting the definitions of 
``Global Settlement'' and ``Legal Settlement,'' FTA may have caused a 
conflict with the circular's provisions for property acquisition and 
relocation assistance.
    Response: FTA declines to make a change based on this comment. 
While the definitions for ``Global Settlement'' and ``Legal 
Settlement'' were removed from the Definitions section of the proposed 
circular, the circular's use of the terms are unambiguous. The circular 
refers to legal settlements arrived at after filing for property 
condemnation as ``administrative settlements'' for purposes of the 
Uniform Relocation Assistance and Real Property Acquisition Policies 
Act (Uniform Act), because that is the term used in USDOT's 
implementing regulation. 49 CFR 24.102(i). The circular states that a 
``global settlement'' means the consolidation of all payments, 
including acquisition and relocation assistance, into one payment. 
Global settlements conflict with the purpose of the Uniform Act because 
relocation assistance benefits are a reimbursement of eligible actual, 
reasonable, and necessary expenses, while the payment to acquire real 
property relates to the payment of just compensation and is subject to 
negotiation. Uniform Act relocation assistance benefits must not be 
used as consideration for a settlement of a dispute regarding property 
value. Therefore, the circular's uses of ``Legal Settlement,'' 
``Administrative Settlement,'' and ``Global Settlement'' do not 
conflict with each other or the purposes of the Uniform Act. The words 
are used according to their ordinary meanings, and it is not necessary 
to give them special definitions in the circular.
    Comment: One comment opined that FTA's allowance of acquisition 
incentives payments (AIPs) to exceed a recipient's just compensation 
determination may conflict with language prohibiting global 
settlements. The commenter expressed concern with the risk of the 
global settlement prohibition conflicting with state law and that a 
comparison of local government acquisition requirements should take 
place prior to full implementation.
    FTA Response: FTA declines to make a change based on this comment. 
AIPs are payments for interests in real property above a recipient's 
established just compensation determination applied equally project-
wide, based on pre-established criteria, if initial offers are timely 
accepted. FTA has determined that the proper use of AIPs does not 
conflict with the Uniform Act or the circular's restriction on global 
settlements because their use is limited to compensating owners for the 
value of property, and they serve to ``encourage and expedite 
acquisition by agreements.'' 49 CFR 24.1(a). To avoid any conflict, FTA 
will concur on AIP programs prior to their implementation, including a 
review of the proposing agency's documentation that the AIP program is 
permissible under state law. AIPs may not be used for relocation 
assistance benefits because a pre-determined incentive for displaced 
persons to relocate may potentially incentivize premature displacement 
of a person or otherwise incentivize actions inconsistent with the 
purpose of the Uniform Act. Recipients still may not use global 
settlements, regardless of whether an AIP payment is offered or paid.
    Comment: One commenter recommended that FTA restore a paragraph 
that had appeared in C 5010.1E allowing for alternative real property 
valuation methods in exceptional circumstances.
    FTA Response: FTA declines to make a change based on this comment. 
C 5010.1F retains the same provision in Chapter IV under a subsection 
titled ``Valuation of Property Pending Disposal.''
    Comment: One commenter asked that FTA remove leases exceeding a 
one-year term and third-party fixture installation from the requirement 
for recipients to provide 30-day advance notice of an incidental use. 
The commenter asserted that these conditions should only be for 
incidental uses that do not require FTA concurrence and should be 
removed because all incidental use agreements must be terminable and 
most, if not all, require FTA concurrence.
    FTA Response: FTA declines to make a change based on this comment 
because the updated language regarding incidental uses of real property 
no longer requires concurrence as the commenter describes. Rather, the 
revision modifies FTA policy by changing FTA's review of incidental 
uses from a concurrence process to a notice process. Except in cases of 
utility, ingress, and egress use, FTA now requires 30-day prior notice 
for incidental uses that will: (1) encumber title to the project 
property, (2) exceed a term of one year, or (3) allow for the

[[Page 79339]]

installation of real property fixtures onto project property by third 
parties. If none of these apply to an incidental use, a 30-day notice 
is not required. FTA's concurrence is not required for any incidental 
use unless another provision of law or the circular applies. 
Nevertheless, recipients must keep a record of all incidental uses, 
which FTA may review during a compliance review or audit. Lastly, FTA 
advises that recipients should include termination provisions in their 
incidental use agreements, but FTA does not prescribe any particular 
terms or notice periods. Recipients should use commercially reasonable 
terms that ensure satisfactory continuing control over the transit use 
of the property.
Project Signage
    Comments: FTA received two comments on project signage. One 
commenter supported FTA's encouragement of recipients to prominently 
display project signage to identify projects approved and funded by 
USDOT but recommended that FTA clarify that the suggestion applies to 
signs pertaining to permanent projects, as opposed to signage for 
wayfinding or planned service disruptions. Another commenter 
recommended that FTA only apply the recommendation to projects with a 
cost of greater than $200,000.
    FTA Response: FTA declines to make a change based on this comment. 
FTA encourages, but does not require, project signage that identifies 
projects approved and funded by USDOT. FTA encourages recipients to use 
their discretion in determining which projects are most appropriate for 
such signage, as well as the sizes and formats of signs. C 5010.1F 
permits this flexibility through the provided guidelines. The inclusion 
of a specific cost or project type threshold would limit this 
flexibility.
Activity Line Item (ALI) Tree
    Comment: One commenter requested that FTA update and streamline its 
Activity Line Item (ALI) tree, which is an inventory of scope codes and 
associated ALIs for which funds may be obligated in FTA's award 
management system (TrAMS), as part of the updated C 5010.1F.
    FTA Response: FTA declines to make a change based on this comment. 
FTA seeks to use C 5010.1F for cross-cutting guidance on award 
management, not to provide administrative direction on the use of 
TrAMS. However, FTA currently is working on an update to the ALI tree.
Disadvantaged Business Enterprise (DBE) Program
    Comment: In response to language in Chapter II stating that FTA-
funded contracts subject to FTA's procurement rules are also subject to 
USDOT's DBE regulation, one commenter requested that FTA clarify that 
micro-purchases (those transactions not in excess of $10,000) are not 
``contracts'' for DBE purposes. The comment further argues that 40 CFR 
part 26 provides that applicable DBE regulations apply to competitive 
bids and proposals as opposed to micro-purchases (which are excepted 
from competition because of their small size), and otherwise applying 
DBE requirements to micro-purchase procurements is burdensome.
    FTA Response: FTA declines to make a change based on this comment. 
The term ``contract,'' for purposes of the USDOT DBE program, is 
defined in regulation at 49 CFR 26.5. There is no contract dollar value 
threshold in 49 CFR part 26. An FTA Tier 1 recipient that is required 
to set a DBE goal must set its goal as a percentage ``of all FTA or FAA 
funds (exclusive of FTA funds to be used for the purchase of transit 
vehicles) that [the recipient] will expend''. 49 CFR 26.45(e). The DBE 
rule does not exclude micro-purchases. FTA has issued guidance on 
reporting multiple purchases from the same vendor (see FAQ CR10 at 
https://www.transit.dot.gov/frequently-asked-questions-fta-grantees-regarding-coronavirus-disease-2019-covid-19#COVID-19Civil).
FTA Minimum Useful Life Policy for Rolling Stock and Ferries
    Comment: A commenter urged FTA to add examples of common vehicle 
makes and models used in public transit/human services transportation 
to the table detailing the minimum useful life for FTA-funded rolling 
stock and ferries in Chapter IV of the circular.
    FTA Response: FTA declines to make a change based on this comment. 
FTA does not include specific vehicle makes and models in guidance 
because vehicle manufacturers, makes, and models often change. 
Furthermore, this inclusion could suggest FTA's endorsement of 
particular vehicle manufacturers, which is inappropriate and goes 
beyond the scope of FTA's role, mission and purview.
    Comment: A commenter stated that there should be a nexus between 
FTA minimum useful life requirements and Altoona testing.
    FTA Response: FTA declines to make a change based on this comment. 
FTA's bus testing rule, 49 CFR 665.11(e), already requires that 
``[b]uses shall be tested according to the service life requirements 
identified in the prevailing published version of FTA Circular 5010.'' 
While it is unclear what further nexus the commenter is suggesting, FTA 
declines to amend the circular beyond the requirements of 49 CFR part 
665.
    Comment: A commenter requested that FTA add minimum useful life 
thresholds for bus shelters and other common transit features.
    FTA Response: FTA declines to make a change based on this comment. 
Useful life serves as a benchmark representing a reasonable expectation 
of the duration of time for which FTA-funded assets should be used by 
recipients for transit purposes. Any benefit of FTA prescribing useful 
life for the many different types of bus shelters or other common 
transit features would likely be outweighed by the loss of flexibility 
to account for unforeseen factors and allow for innovation, as well as 
the burden on FTA and recipients to follow useful life standards for 
inexpensive assets. In Chapter IV, FTA seeks to maximize flexibility by 
allowing recipients to identify reasonable and common methods for 
determining minimum useful life for assets other than vehicles and 
certain facilities and lists examples of acceptable methods.
Rolling Stock Rebuilds and Overhauls
    Comment: One commenter asked FTA for additional clarification on 
distinguishing between overhauls and rebuilds. The commenter asked 
whether it is the recipient who determines whether vehicle work is a 
rebuild or an overhaul.
    FTA Response: FTA declines to make a change based on this comment. 
Whether vehicle work is an overhaul or a rebuild is determined by the 
remaining useful life of the vehicle at the time of the work, and the 
amount of remaining useful life the vehicle will have after the work is 
completed. The circular establishes that an overhaul is a capital 
activity enabling a vehicle to perform until the end of the vehicle's 
original, expected useful life. On the other hand, the circular 
explains that rebuilds are intended to extend the vehicle's useful life 
beyond its original useful life. The commenter should contact the FTA 
regional office responsible for administering its grants for further 
assistance.
Like-Kind Exchange of Equipment
    Comment: A commenter opined that FTA should include examples of 
calculations for like-kind exchanges of equipment involving insurance

[[Page 79340]]

proceeds, as were provided in the pre-existing C 5010.1E.
    FTA Response: FTA declines to make a change based on this comment. 
FTA consolidated the pre-existing like-kind exchange examples into the 
Equipment Disposition Scenarios in Appendix G to C 5010.1F.
Use of Insurance Proceeds Toward Damaged or Destroyed FTA-Assisted 
Equipment
    Comment: A commenter requested FTA change its policy that 
subrecipients may keep all insurance proceeds obtained from claims for 
loss of damaged or destroyed equipment in excess of a remaining Federal 
interest. According to the commenter, FTA's interest in a vehicle 
extinguishes when the vehicle has reached its minimum useful life, 
although the vehicle may still be in good condition, and ``this creates 
an incentive for a [recipient] to deliberately total a federally 
funded'' vehicle when it has reached the end of its useful life to 
obtain insurance proceeds.
    FTA Response: FTA declines to make a change in response to the 
comment. FTA's interest in a vehicle does not extinguish when a vehicle 
reaches its minimum useful life as the commenter describes. FTA's 
interest in the vehicle persists until the recipient disposes of the 
vehicle. For any vehicle with a value in excess of $10,000, the 
recipient must follow authorized disposition procedures and remit to 
FTA its proportional share of the vehicle's fair market value at the 
time of disposition when the fair market value is greater than the 
straight-line depreciated value of the vehicle. FTA's interest is based 
on the greater of a vehicle's fair market value or sale proceeds, if it 
is sold, or alternatively the straight-line depreciated value. Section 
3 of Chapter IV of C 5010.1F describes the process of equipment 
disposition and valuation.
    The commenter is correct that, in the case of insurance proceeds 
received for a vehicle taken out of service by casualty, FTA claims an 
interest in the insurance proceeds equal to the value of FTA's interest 
in the vehicle immediately before the vehicle was taken out of service. 
If insurance proceeds exceed the value of FTA's interest, the recipient 
may retain the excess. This policy protects the Federal financial 
interest and incentivizes recipients to adequately insure project 
property in their possession. FTA is not aware of examples of its 
policy driving the behavior the commenter is concerned about.
    For more information, FTA encourages any interested recipient to 
speak with its insurer about the consequences of deliberately damaging 
vehicles to collect insurance proceeds.
Drug and Alcohol Program Compliance Audits
    Comment: In relation to drug and alcohol compliance audits, a 
commenter requested FTA clarify whether recipients' annual drug and 
alcohol certification is in reference to Drug and Alcohol Management 
Information System (DAMIS) reporting or a separate requirement.
    FTA Response: FTA declines to make a change in response to the 
comment. The circular and FTA's annual Certifications and Assurances 
are clear that the annual certification of drug and alcohol testing is 
separate from the drug and alcohol management information system 
reporting that requires submission of the previous year's testing.
Cognizant Federal Agency for Indirect Cost Rate Proposals
    Comment: A commenter requested the circular provide that indirect 
cost rate proposals (ICRPs) need to be approved by the cognizant 
Federal agency and to provide clarification for determining the 
cognizant agency for subrecipients' indirect costs as distinct from the 
cognizant agency for audits.
    FTA Response: FTA declines to make a change in response to the 
comment. In Chapter VI, the circular states, ``ICRPs must be approved 
by FTA or another legally designated cognizant Federal agency''. The 
circular, in Section 7 of Chapter VI, also states the method of 
determining agency cognizance: ``DOT is the cognizant agency of 
indirect costs for State and local airport and port authorities and 
transit districts' cognizant audit agencies. Based on delegations 
within DOT, FTA is cognizant for transit districts. For other 
organizations, cognizance is generally assigned to the Federal agency 
that provides the predominant amount of Federal funding to a recipient 
within a given departmental organization within the State or 
locality.'' Appendix I explains that ICRPs are prepared by an 
individual recipient or subrecipient to substantiate an indirect cost 
rate.
De Minimis Rate for Indirect Costs
    Comment: A commenter requested FTA to leave the de minimis rate for 
indirect costs unspecified in the circular, in case the de minimis rate 
is changed by subsequent legislation or rulemaking.
    FTA Response: FTA declines to make a change in response to the 
comment. FTA has updated the de minimis rate in the circular to 15 
percent, in accordance with the revision to 2 CFR 200.414(f). The de 
minimis rate has changed only once since the original part 200 was 
published in 2014. The convenience to readers of stating the de minimis 
rate in the circular outweighs the potential inconvenience if the de 
minimis rate changes again in the future and the circular must be 
updated.
Relationship of Circular to FTA Master Agreement
    Comment: One commenter suggested that instead of describing ethical 
standards, certifications, and procurement standards in Chapter II of 
the circular, FTA simply refer the reader to FTA's Master Agreement, 
because the requirements derive from the Master Agreement, and the 
Master Agreement is subject to change.
    FTA Response: FTA declines to make a change in response to the 
comment. The commenter did not cite a specific requirement, but 
generally speaking, the procurement requirements derive both from 
Federal regulations, like 2 CFR part 200, and FTA's Master Agreement. 
Where a requirement has more than one source, the circular generally 
cites only to the regulation so as not to overcrowd the document with 
citations. The convenience to the reader of stating requirements in the 
circular outweighs the potential inconvenience if a requirement should 
change in the future and the circular must be updated. For more 
information about the standards that apply to procurements carried out 
under FTA awards, refer to the latest version of FTA's C 4220.
Requests To Change Statutory or Other Government-Wide Regulatory 
Requirements
    FTA received some comments requesting changes to requirements that 
are based in statutes or regulations that FTA does not have the 
authority to change.
    Comment: One commenter asked FTA to reinsert language in the 
definition for ``Associated Transit Improvement'' to include 
landscaping for stormwater absorption and erosion prevention, 
consistent with version C 5010.1E of the circular.
    FTA Response: FTA declines to make a change in response to the 
comment. The definition of ``Associated Transit Improvement'' is given 
in statute at 49 U.S.C. 5302(2). Note that certain kinds of landscaping 
may remain eligible as ``functional landscaping'' under the definition 
of ``Associated Transit Improvement.''

[[Page 79341]]

    Comment: A commenter requested that FTA include fares as a 
permissible source of local match.
    FTA Response: FTA declines to make a change in response to the 
comment. Federal law excludes fares as an eligible source of local 
match for FTA financial assistance. E.g., 49 U.S.C. 5307(d)(3) (``the 
remainder of the net project costs shall be provided . . . in cash from 
non-Government sources other than revenues from providing public 
transportation services''). Generally, financial assistance from FTA 
may only fund up to the permissible Federal share of the ``net project 
cost'' of eligible projects. The term ``net project cost'' means the 
part of a project that reasonably cannot be financed from revenues (49 
U.S.C. 5302(13)).
    Comment: One commenter requested the circular only reference 
national flood insurance coverage thresholds as the required coverage 
for FTA-funded facilities in special flood hazard areas, which the 
commenter alleges would ``avoid confusion due to the unavailability of 
substantial flood insurance policies or policies that fully ensure 
agency's assets and facilities.''
    FTA Response: FTA declines to make a change in response to the 
comment. The circular does not require that recipients obtain full 
flood insurance coverage over project property. The circular cites 42 
U.S.C. 4013(b)(4), which sets the minimum flood insurance coverage 
requirements.
    Comment: One commenter recommended FTA remove language from Chapter 
III stating that milestone progress reports (MPRs) and Federal 
financial reports (FFRs) must be submitted to FTA within 30 days after 
the end of each quarter, as the commenter opines that 30 days is not 
sufficient to research, document, and provide explanations for 
variances that arise between MPRs and FFRs due to differences in the 
timing of project progress and project invoice submissions. The 
commenter further recommended FTA provide reporting frequencies and 
submission deadlines as best practices rather than requirements.
    FTA Response: FTA declines to make a change based on this comment. 
Per 2 CFR 200.329, the recipient must submit regular performance 
reports. Reports that are due more frequently than annually, like the 
quarterly submitted MPRs, ``must be due no later than 30 calendar days 
after the reporting period.'' FTA does not have the discretion to 
deviate from this government-wide regulation.

B. Changes Based on Public Comments

    Comments below reflect areas where FTA made language changes in the 
circular in response to public comments.
Effective Date for Updated Circular
    Comment: One commenter noted the circular's lack of a stated 
effective date or a statement of how existing awards and third-party 
agreements will be affected by C 5010.1F. The commenter asked if FTA 
will adjust its compliance reviews to account for differing applicable 
requirements based on the applicable date of circular C 5010.1F.
    FTA Response: In response to this comment, FTA included the 
circular's applicable date, November 1, 2024, in the first paragraph of 
the circular. FTA also added a statement to clarify the legal effect of 
the circular on FTA recipients. As a guidance document, the circular 
does not have the force and effect of law and is not meant to bind the 
public in any way. The circular is intended only to provide clarity to 
the public regarding existing requirements under the law or agency 
policies.
    Some of the revisions made in C 5010.1F describe changes in law or 
policy that took effect before the applicable date of C 5010.1F. Those 
changes apply according to their respective terms. Other circular 
provisions reflect long-standing FTA operating procedures to which 
notice was already provided or not required. Future compliance reviews 
conducted by FTA will account for the applicable effective dates.
Changes Made to Definitions in the Circular
    Comment: One commenter said the proposed circular's definition of 
``Shared Use'' appeared to only apply to real property. The comment 
requested that FTA modify the definition to explicitly include shared 
use of equipment, including rolling stock.
    FTA Response: FTA updated this definition to explicitly note shared 
use can apply to equipment, including rolling stock.
    Comment: A commenter asked FTA to define Qualified Human Service 
Organization (QHSO) and provide additional guidance regarding the 
exception of QHSOs from the restrictions of FTA recipients to provide 
charter bus services contained in 49 U.S.C. 5323(d).
    FTA Response: FTA added a definition of QHSO to C. 5010.1 using the 
same definition provided at 49 CFR 604.3(q) for consistency. Additional 
language addressing QHSO exceptions was not added to the circular 
because 49 CFR part 604 addresses charter service. 49 CFR 604.7 
provides the necessary guidance for QHSOs providing charter bus 
services. No further guidance from the circular is required at this 
time.
Information on Specific Discretionary Programs
    Comment: One commenter asked FTA to include a reference to FTA's 
passenger-only ferry program in the list of current FTA programs in 
Chapter II.
    FTA response: FTA added the Passenger Ferry Discretionary Program 
(49 U.S.C. 5307(h)) to the list of current FTA programs.
Request for Reference to Additional Resource
    Comment: One commenter asked FTA to include a reference to the 
Coordinating Council on Access and Mobility (CCAM) Federal Fund 
Braiding Guide in Chapter VI as a resource for recipients to understand 
which sources of Federal funds may be used as local match for FTA-
funded activities.
    FTA Response: FTA added a reference to the CCAM Federal Fund 
Braiding Guide and a link to the online resource.
Incidental and Shared Uses
    Comment: One commenter requested that FTA include examples of 
shared use and incidental use of equipment similar to the circular's 
examples of shared use and incidental use of real property, further 
suggesting FTA include a table clarifying the difference between the 
two, as well as the applicable Federal rules for each.
    FTA Response: In response to this comment, FTA included examples 
for the shared use and incidental use of equipment in Chapter IV of the 
circular. FTA did not include a table clarifying the difference between 
the two concepts, as the difference between the two concepts is 
sufficiently described in both Chapter IV and the circular's 
definitions.
    Comment: A commenter asked FTA to explain if FTA must always 
provide prior approval for shared use of real property. The commenter 
also asked if it was appropriate for FTA to refer to the allocable 
costs of construction for equipment that may qualify as a shared use 
for determining such a shared use's pro rata share.
    FTA Response: The circular already states that a shared use of 
property requires prior FTA approval except when it involves 
coordinated public transit-human services transportation. However, the 
word ``construction'' was replaced with ``acquisition'' to refer to the 
usual process for acquiring

[[Page 79342]]

equipment that may qualify as a shared use.
    Comment: A commenter requested that the circular address incidental 
and shared uses of equipment and supplies by a non-controlling 
subrecipient for a public transportation use.
    FTA Response: In response to this comment, FTA updated language 
addressing the concept of shared use for both real property and 
equipment in Chapter IV to clarify that shared uses can be arranged 
with any third-party user of project property, regardless of the type 
of entity, and is not limited only to non-transit entities or uses. 
Accordingly, a subrecipient's use of a recipient's real property or 
equipment can qualify as a shared use. However, FTA declines to change 
the language addressing incidental uses because the circular accurately 
reflects FTA's intent to define ``Incidental Use'' as the limited non-
transit use of project property. A subrecipient's use of a recipient's 
project property for public transportation is not an incidental use 
because a subrecipient's activities are inherently public 
transportation.
    Comment: One commenter requested that FTA remove the language 
addressing the incidental use of real property under the Property 
Management subsection in Chapter IV because the circular provides the 
same language under the Non-transit Uses of FTA-Assisted Real Property 
subsection in the same chapter.
    FTA Response: In response to this comment, FTA removed the language 
regarding incidental use in Chapter IV's section on general use of 
project property, while retaining the same language in the section on 
incidental use.
Intercity Bus
    Comment: One commenter asked that the circular recognize intercity 
bus as a non-incidental use, in other words, that intercity bus should 
be recognized in FTA guidance as a primary transportation use at FTA-
funded facilities. The commenter stated that this request was because 
of challenges and delays intercity bus companies experience trying to 
obtain reasonable access for intercity bus at federally funded public 
transportation facilities.
    FTA Response: FTA has added text to Chapter IV of C 5010.1F 
emphasizing the requirements of 49 U.S.C. 5323(r). According to 49 
U.S.C. 5323(r), a recipient of FTA assistance may not deny reasonable 
access for a private intercity or charter transportation operator to 
federally funded public transportation facilities, including intermodal 
facilities, park-and-ride lots, and bus-only highway lanes.
    FTA declines to exclude intercity bus uses as a potential type of 
incidental use. By statute, 49 U.S.C. 5302(15) and 49 U.S.C. 5311, 
intercity bus service is not public transportation. The circular's 
definition of incidental use does not diminish the requirement in 49 
U.S.C. 5323(r) that transit agencies must provide reasonable access 
because it is reasonable to ensure that intercity bus use does not 
conflict with the transit purpose of the project property or the 
recipient's ability to maintain satisfactory continuing control over 
the use of the property. Therefore, reasonable access provided to 
intercity bus service at an FTA-funded facility may be an incidental 
use of such a facility.
    Comment: One commenter requested that FTA revise the circular to 
state that recipients should give intercity bus companies access to 
transit property at low or no cost. In C 5010.1F, FTA added a 
description of ``no- or low-income'' uses of transit property (those 
that bring little revenue to the recipient but serve a public purpose) 
as a kind of incidental use recipients may consider. The commenter 
suggested that FTA recategorize no- or low-income uses as distinct from 
incidental uses, under a new category such as ``Non-Incidental,'' 
``Primary,'' or ``Intercity Transportation'' use. The commenter then 
requested that FTA state that intercity bus companies should be treated 
as a no- or low-cost use because they are a form of transportation with 
public benefits.
    FTA Response: In response to this comment, FTA added a subsection 
to the circular to highlight the requirements of 49 U.S.C. 5323(r), 
which says recipients may not deny intercity bus companies and charter 
companies reasonable access to transit facilities. However, FTA 
declines to recategorize no- or low-income use separately from 
incidental use. FTA's incidental use policy is intended to cover all 
non-transit uses occurring on transit property, regardless of the 
revenue they create for FTA's recipient.
    The purpose of the circular's description of no- or low-income uses 
is to recognize a recipient's flexibility to allow less-than-market 
rates for uses that provide benefits that complement public 
transportation services notwithstanding their low potential for revenue 
to the transit system. The categorization of any use as an incidental 
use is not a statement as to the importance of the use.
    Additionally, FTA declines to describe intercity bus as a no- or 
low-income use. The access provision of 49 U.S.C. 5323(r) requires that 
recipients not deny intercity bus companies reasonable access to 
transit assets, but reasonable access does not require no cost or low 
cost access, although a recipient may determine that intercity bus 
service is an appropriate no- or low-income use depending on the 
location and its unique situation. FTA intends that its recipients have 
the full flexibility to bargain for what is reasonable in each 
situation, taking into consideration the public benefit of the proposed 
use, the costs the recipient incurs by allowing the use, the impact of 
the use on the recipient's operations, market rates, the value of the 
access to the non-transit entity, possible alternative uses, and other 
factors as determined by the recipient.
Real Property Status Reporting
    Comment: One commenter recommended that FTA remove the additional 
elements now included in the updated circular's list of required 
information a recipient must include in its real property status 
reports, saying that records containing the additional information may 
not exist, require significant funds to generate, or otherwise would be 
burdensome to produce. The commenter further stated that 2 CFR 200.330 
only requires recipients to generate real property status reports on a 
regular basis and does not require FTA acquire such information.
    FTA Response: FTA declines to make any changes in response to this 
comment. Recipients must maintain adequate records for FTA's monitoring 
of recipients' compliance with Federal requirements. A real property 
status report would be inadequate to assess compliance with FTA real 
property requirements without the specified information. However, FTA 
modified the ``Current Use(s) of the Property'' element to prompt 
reporters to identify whether a significant change has occurred to a 
parcel of real property or is anticipated to occur in the next 
reporting period, and, if so, to describe the change. Further, FTA 
clarified language that some of the reporting elements apply to real 
property dispositions.
    Comment: One commenter requested that FTA not require recipients to 
report the date of property disposition or the sale price and net 
proceeds in their real property status reports following property 
disposition.
    FTA Response: FTA declines to remove the property disposition date, 
sales price, and related proceeds from the list of property status 
report elements because the information is

[[Page 79343]]

necessary to sufficiently assess a recipient's compliance with 
requirements regarding real property disposition and accounting for 
FTA's interest in the property. However, in response to this comment, 
FTA added language explaining that recipients should include the 
requisite disposition information for real property disposed within a 
three-year reporting cycle in the following real property status 
report, but recipients may remove the disposition information from the 
real property status reports thereafter.
Equipment Disposition Scenarios--Appendix G
    Comment: One commenter asserted that the equipment disposition 
scenarios in Appendix G contain two errors. The commenter said the 
second paragraph of the appendix should indicate that the insurance 
proceeds received by the recipient are more than the Federal share for 
the example unit of equipment rather than less than the Federal share. 
The commenter also said that language in the third paragraph of the 
appendix should indicate that the insurance proceeds received by the 
recipient are less than the Federal share for the example unit of 
equipment rather than more than the Federal share.
    FTA Response: In response to this comment, FTA adjusted the 
language referenced by the commenter to accurately show the 
relationship between the amount of insurance proceeds and the 
respective Federal share for the example units of equipment in the 
scenarios presented.
Comments Requesting Clarifications or Specificity
    FTA received several requests for clarification or more specificity 
on various requirements. In response, FTA revised language in the 
circular to address comments, as explained below.
Inventory of Vehicle Components
    Comment: Three commenters expressed concerns regarding the 
requirement for recipients to identify and inventory vehicle components 
removed from a vehicle at the end of the vehicle's useful life that 
retain a Federal interest. The commenters opined that such treatment 
would exact an administrative burden for transit agencies and auditors 
because of the large volume of low-value components that fall into this 
category.
    FTA Response: In response to this comment, FTA clarified in the 
circular that a recipient only must inventory a removed vehicle 
component when the component meets the definition of ``equipment.'' 2 
CFR 200.1 and the circular define equipment as tangible property having 
a useful life of more than one year and a per-unit acquisition cost 
that equals or exceeds the lesser of the capitalization level 
established by the recipient for financial statement purposes, or 
$10,000.
Transfer of Real Property for Affordable Housing
    Comments: A commenter submitted multiple comments related to 
provisions for the transfer of real property for affordable housing 
purposes as part of a transit-oriented development (TOD). One comment 
expressed safety concerns with the combination of housing with transit 
facilities and asserted that any such developments that combine the two 
should include separation requirements between those uses. Another 
comment suggested that restrictions on the use of transferred real 
property for low-cost housing could limit complementary ancillary 
services for transit patrons associated with transit facilities located 
in mixed-use environments. An additional comment expressed concerns and 
confusion with the transfer criteria potentially excluding governmental 
entities and non-profit organizations.
    FTA Response: In response to this comment, FTA changed the title of 
the subsection in Chapter IV from ``Transfer for Transit Oriented 
Development'' to ``Transfer for Affordable Housing for Transit Oriented 
Development'' to clarify that this transfer authority is specific to 
affordable housing in a TOD environment, not all TOD initiatives. 
However, no additional changes were made based on these comments. The 
affordable housing requirements do not prevent the inclusion of 
additional ancillary services beyond those that could support 
affordable housing. The provisions of 49 U.S.C. 5334(h)(1)(B) do not 
prohibit recipients' abilities to engage in TOD initiatives or 
additional transit-related services, but rather provide one permissible 
disposition option for affordable housing projects meeting the 
statutory requirements. Further, this asset disposition provision 
prioritizes transfer to governmental entities and non-profit 
organizations. An asset may only be transferred to a third-party entity 
if a local government authority or nonprofit organization is unable to 
develop the property. For additional information about the asset 
disposition provision, please see FTA's Interim Asset Disposition 
Guidance at https://www.transit.dot.gov/funding/funding-finance-resources/interim-asset-disposition-guidance.
Asset Disposition
    Comment: Two commenters requested that FTA increase the disposition 
threshold from $5,000. One commenter also requested that FTA permit 
recipients to retain all proceeds obtained through the resale of FTA-
assisted vehicles to supplement open grants.
    FTA Response: FTA edited language addressing disposition of 
equipment and supplies in Chapter IV to conform with changes IIJA made 
to 49 U.S.C. 5334(h)(4)(B), as well as changes to 2 CFR part 200 that 
took effect on October 1, 2024. Per 2 CFR 200.313 and 200.314, 
equipment with a per unit value of $10,000 or less and unused supplies 
with an aggregate value of $10,000 or less may be retained, sold, or 
otherwise disposed of with no further responsibility to FTA. If the 
proceeds are greater than $10,000, then per 49 U.S.C. 5334(h)(4)(B), 
the recipient may retain $5,000 and the percentage of the local share 
in the original award of the remaining proceeds, with the remaining 
Federal share returned to FTA. Because 49 U.S.C. 5334(h)(4)(B) requires 
recipients to return to FTA the FTA share of proceeds from the sale of 
rolling stock, FTA does not have discretion to allow recipients to 
retain these proceeds to supplement open grants.
    Comment: A commenter asked FTA to provide further guidance 
regarding the disposition of supplies and attendant insurance proceeds, 
mentioning that pre-existing C 5010.1E provided detailed information on 
the topic.
    FTA Response: In response to this comment and to reflect updates to 
2 CFR 200.314, FTA included additional language identifying the 
treatment of the disposition of supplies. In several places where C 
5010.1F discusses the application of disposition rules to equipment, 
FTA has added a statement that disposition rules also apply to unused 
supplies the aggregate value of which exceeds $10,000. FTA does not 
have any unique considerations regarding the disposition of supplies 
beyond what is directed in 2 CFR 200.314. Furthermore, FTA's treatment 
of insurance proceeds applies similarly to all project property. 
Equipment disposition scenarios that involve insurance proceeds are 
provided in Appendix G of the C 5010.1F. The same examples illustrate 
FTA's treatment of disposition of unused supplies. Therefore, no 
further guidance is necessary to further illustrate FTA's treatment of 
the disposition of supplies or attendant insurance proceeds from claims 
arising for the loss of supplies.

[[Page 79344]]

Buy America
    Comment: One commenter recommended that FTA remove the summaries of 
``Buy America Domestic Preference'' in Chapter II and, instead, only 
use the circular to refer FTA grant recipients to current Buy America 
regulations at 49 CFR part 661, 2 CFR part 184, and the Office of 
Management and Budget's (OMB's) implemented guidance for Build America, 
Buy America (BABA). The commenter was concerned that the summary of 
these requirements in C 5010.1F may inhibit compliance by overly 
simplifying complex requirements.
    FTA Response: FTA understands the commenter's concern and agrees 
that recipients always should refer to the actual laws and regulations 
cited in the circular. However, FTA declines to adopt the commenter's 
suggestion. C 5010.1F strikes a balance between informing readers of 
the broad requirements of Buy America while recognizing that actual 
rules are complicated. Moreover, directing recipients to regulations 
without additional context may also be confusing. The application of 
the Build America, Buy America Act domestic preference, located at 2 
CFR part 184, is only partially applicable to FTA financial assistance 
awards because FTA's existing Buy America requirements at 49 U.S.C. 
5323(j) continue to apply where they meet or exceed the Build America, 
Buy America Act requirements.
    However, FTA updated a reference from a superseded OMB memorandum 
to its current version and corrected a misstatement in the circular's 
text. The proposed version of C 5010.1F had said that 49 CFR 663.37 
exempts some vehicle purchases from the auditing requirement, when 49 
CFR 663.37 actually exempts those purchases from the resident inspector 
requirement.
Transit Vehicle Manufacturer (TVM) Compliance Under FTA's Disadvantaged 
Business Enterprise (DBE) Program
    Comment: A commenter requested FTA include a clarification in 
Chapter II that recipients are not restricted to solicit bids from DBE-
eligible transit vehicle manufacturers (TVMs). The commenter states 
that bid respondents could be other third parties, such as authorized 
dealers, which can also be bound by the TVM requirements.
    FTA Response: In response to this comment, FTA expanded relevant 
language explaining that recipients may seek bids from entities other 
than vehicle manufacturers, such as dealerships, who certify that the 
procured vehicles are, or will be, manufactured by DBE-eligible TVMs.
Rolling Stock Spare Ratio Policies
    Comment: A commenter requested that FTA exempt the requirement to 
report spare ratios for subrecipients whose spare ratios are not 
limited to 20 percent. The commenter also asked FTA to clarify whether 
a direct recipient or the subrecipient's maximum spare ratio would 
apply when the direct recipient is seeking funding to procure vehicles 
on behalf of a subrecipient.
    FTA Response: In response to this comment, FTA added a statement in 
its spare ratio policy clarifying that FTA calculates each transit 
operator's maximum spare ratios separately, based on each separate 
operator's fleet size, without regard to their status as a direct 
recipient or subrecipient. FTA's spare ratio policy is that recipients 
with 50 or more fixed-route vehicles limit their spare ratio to 20 
percent of the number of vehicles operated in maximum fixed-route 
service. This requirement extends to subrecipients' separate fleets 
individually, and their fleets are not imputed to the recipient. For 
individual operators with fewer than 50 fixed-route vehicles, whether 
they are recipients or subrecipients, FTA does not set a specific 
maximum spare ratio but expects the number of spare vehicles to be 
reasonable, considering the number of vehicles and variety of vehicle 
types and sizes.
Recipient-to-Recipient Transfer of Rolling Stock
    Comment: A commenter requested that FTA clarify that recipient-to-
recipient transfers of rolling stock are used for instances in which 
the useful life of the rolling stock has not yet been met.
    FTA Response: In response to this comment, in Chapter IV, FTA has 
amended the language specific to recipient-to-recipient transfers of 
rolling stock to clarify that recipients should provide FTA with 
certain documentation when seeking FTA's approval of recipient-to-
recipient transfer of rolling stock with a remaining useful life. The 
language in Chapter III addressing recipient-to-recipient transfers of 
rolling stock does not exclusively apply to rolling stock at the end of 
its useful life. Rather, the language specifically addresses the 
differing requirements and considerations when transferring rolling 
stock that does or does not have a remaining useful life.

C. Request for Technical Assistance

    Comment: FTA received a comment requesting more targeted technical 
assistance on new information included in Appendices A, B, and C. The 
commenter also asked FTA to provide guidance regarding recipient legal 
capacity requirements outlined in Appendix A. Lastly, the commenter 
asserted that pre-award requirements in Appendix B include substantial 
changes that may require proper lead time for agencies to prepare for 
the requirements.
    FTA Response: FTA declines to make any changes in the circular in 
response to this comment. However, FTA will provide training and 
technical assistance opportunities regarding updates made to this and 
the other simultaneously issued program circulars (C 9040.1H, C 
9070.1H, C 9050.1A).

III. Other Updates

    In addition to the changes noted above, FTA made revisions in this 
final circular for consistency with changes in statute, regulation, and 
other FTA circulars, as well as minor, non-substantive revisions for 
clarity. For consistency with statute, FTA added language in Chapter IV 
identifying alternative fueling facilities as a potential type of 
incidental use of both real property and equipment in accordance with 
49 U.S.C. 5323(p). Additionally, FTA added a statement at the beginning 
of the circular that in cases for which the circular is inconsistent 
with changes to any law, the law will supersede this circular. Along 
with other non-substantive administrative changes that were recommended 
by several commenters, FTA made additional corrections in the circular 
for typographical errors, grammatical errors, and formatting.

Updates Based on Regulatory Changes

    Since C 5010.1F was released for public comment on February 14, 
2024, several government-wide regulations have changed. FTA has 
accordingly updated the 5010.1 circular to reflect changes in the law 
since that time, including the following:
2 CFR Part 200 Changes
    The Office of Management and Budget (OMB) updated the government-
wide policies for the Uniform Administrative Requirements, Cost 
Principles, and Audit Requirements for Federal Awards under 2 CFR part 
200 as well as parts 25, 175, and 180, effective October 1, 2024, 
including but not limited to the following:
     Equipment and Aggregate Supplies Definitions/Thresholds: 
Sections

[[Page 79345]]

200.313 (Equipment) and 200.314 (Supplies) of 2 CFR part 200 each 
increase the thresholds, from $5,000 to $10,000, for the value of 
equipment and aggregate supplies a recipient may retain, sell, or 
dispose of at closeout. Consistent with 2 CFR 200.314, FTA also 
clarified throughout the circular that disposition requirements apply 
only to unused supplies.
     De Minimis Rate: 2 CFR part 200 increases the de minimis 
indirect cost rate from 10% to 15% of Modified Total Direct Costs 
(MTDC). FTA recipients and subrecipients may elect a lower de minimis 
rate at their discretion and modify the indirect cost rate of MTDC to 
permit inclusion of the first $50,000 of any one subaward in the base.
     Single Audit: 2 CFR part 200 increases the direct Federal 
expenditure threshold requiring a recipient to conduct a single audit 
from $750,000 to $1 million. OMB also revised the definitions of 
``known questioned costs'' and ``likely questioned costs'' while 
providing additional direction to recipients to identify such costs in 
an audit report.
Uniform Act Changes
    Acting as Lead Agency, FHWA published a final rule on May 3, 2024, 
to amend and update 49 CFR part 24, which implements the Uniform 
Relocation Assistance and Real Property Acquisition Policies Act 
(Uniform Act) for land acquisition and displacement activities by all 
Federal agencies and their financial assistance recipients (89 FR 
36908). These regulations clarify existing requirements for 
implementing the Uniform Act, meet modern needs, and improve the 
agencies' service to individuals and businesses affected by Federal or 
federally assisted projects. All references to these regulations were 
updated in C 5010.1F.
Disadvantaged Business Enterprise (DBE) Final Rule Changes
    On April 9, 2024, the U.S. Department of Transportation published 
its final rule regarding Participation by Disadvantaged Business 
Enterprises (DBE) in Department of Transportation Financial Assistance 
Programs located at 49 CFR part 26 (89 FR 24898). Changes to the rule 
include a streamlined DBE certification process, adjustments to grant 
recipient reporting requirements, and other technical corrections. For 
FTA specifically, the rule creates two tiers of recipients: Tier I 
recipients who award more than $670,000 in FTA funds annually in 3rd 
party contracts and are subject to all DBE program provisions and Tier 
II recipient who award $670,000 or less in FTA funds annually and are 
subject to a subset of provisions.

Veronica Vanterpool,
Deputy Administrator.
[FR Doc. 2024-22160 Filed 9-26-24; 8:45 am]
BILLING CODE 4910-57-P