Urbanized Areas Formula Grant Programs Guidance, Final Circular, 79350-79357 [2024-22161]

Agencies

• Federal Transit Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 89, Number 188 (Friday, September 27, 2024)]
[Notices]
[Pages 79350-79357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-22161]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

[Docket No. FTA-2023-0009]


Urbanized Areas Formula Grant Programs Guidance, Final Circular

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

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

-----------------------------------------------------------------------

SUMMARY: The Federal Transit Administration (FTA) has finalized a new 
circular entitled, ``Urbanized Areas Formula Grant Programs Guidance,'' 
which consolidates and replaces the circulars for the Urbanized Area 
Formula Grants Program (FTA Circular C 9030.1), the State of Good 
Repair Grants Program (FTA Circular C 5300.1), and the Urbanized Area 
formula component of the Grants for Buses and Bus Facilities Program 
(FTA Circular C 5100.1). The update and consolidation of the circulars 
incorporate provisions from the Fixing America's Surface Transportation 
(FAST) Act; the Bipartisan Infrastructure Law (BIL), enacted as the 
Infrastructure Investment and Jobs Act; the Uniform Administrative 
Requirements for Federal awards to non-Federal entities; and current 
FTA policies and procedures. This notice responds to the comments FTA 
received on the proposed circular, which was published in the Federal 
Register on July 12, 2023.

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

ADDRESSES: One may view the comments at docket number FTA-2023-0009. 
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 State of Good Repair Grant program 
questions, Ciara Williams, Office of Transit Programs, Federal Transit 
Administration, 1200 New Jersey Ave. SE, Room E44-412, Washington, DC 
20590, phone: (202) 366-8954, or email, [email protected]. For 
Urbanized Area Formula Grant program questions, Nichole Neal, Office of 
Transit Programs, Federal Transit Administration, 1200 New Jersey Ave. 
SE, Room E44-451, Washington, DC 20590, phone: (202) 366-7865, or 
email, [email protected]. For Buses and Bus Facilities program 
questions, Kirsten Wiard-Bauer, Office of Transit Programs, Federal 
Transit Administration, 1200 New Jersey Ave. SE, Washington, DC 20590, 
phone: (202) 366-7052, 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. Introduction
II. Response to Public Comments
    A. Comments for Which No Changes Were Made
    B. Changes Based on Public Comments
III. Other Changes

I. Introduction

    This notice announces the availability of FTA Circular C 9050.1A, 
``Urbanized Areas Formula Grant Programs Guidance,'' which is a 
consolidation of guidance for the administration of grants for the 
Urbanized Area Formula Grants Program under 49 U.S.C. 5307 (FTA 
Circular C 9030.1), State of Good Repair Grants Program under 49 U.S.C. 
5337 (FTA Circular C 5300.1), and the urbanized area formula component 
of the Grants for Buses and Bus Facilities Program under 49 U.S.C. 
5339(a) (FTA Circular C 5100.1). The C 9050.1A circular replaces these 
three circulars. Additionally, this circular incorporates provisions of 
the FAST Act (Pub. L. 114-94) and the Infrastructure Investment and 
Jobs Act (Pub. L. 117-58) and includes program-specific

[[Page 79351]]

guidance for these formula programs. Additional requirements for all 
grant programs are identified in FTA's Award Management Requirements 
Circular C 5010.1. The applicable date of C 9050.1A is November 1, 
2024.
    The C 9050.1A circular consolidates and summarizes programmatic 
information, streamlines pre-existing guidance from the three previous 
program circulars, and reduces duplication of information provided 
between the Urbanized Area Formula Programs 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 C 5010.1.
    Additionally, C 9050.1A clarifies a number of policy issues as 
interpreted and applied by FTA. These clarifications address topics in 
the previous program circulars (C 9030.1, C 5300.1, and C 5100.1), 
including: how funds are apportioned; reallocations or transfers of 
apportionments; consolidation of grants to insular areas; intermodal 
use of formula funds; 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; period of availability to 
obligate funds flexed to the FTA formula programs from the Federal 
Highway Administration (FHWA); planning requirements; pre-award 
authority; revisions to required planning documents as a result of 
post-award modifications; and requirements pertaining to fares charged 
to seniors and persons with disabilities.

II. Response to Public Comments

    FTA published a notice in the Federal Register on July 12, 2023 (88 
FR 44440), seeking public comment on a proposed version of Circular C 
9050.1. FTA received 115 comments from 30 unique commenters. FTA 
reviewed the comments and discusses below the changes that FTA made in 
the final circular based on the public comments. FTA also addresses 
below the categories of 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 alternative pagination 
methods. FTA has reviewed and made those changes to the final circular, 
as needed.

A. Comments for Which No Changes Were Made

Comments Outside the Scope of FTA C 9050.1A
    FTA received comments for which no changes were made because FTA 
has determined that the topics were outside of the scope of this 
circular. Topics that were outside the scope of the circular included: 
a request that FTA increase the size or scope of grants; inquiring 
whether FTA will require a subrecipient to ensure its contractors pay a 
livable wage; a request for information about financing programs 
administered by the U.S. DOT Build America Bureau; and updating 
guidance outside of FTA C 9050.1A. FTA also determines the following 
topics were outside the scope of the circular, although it discusses 
them in further detail because they were raised by more than one 
commenter:
    Comment: Three commenters asked which version of the C 5010.1 
``Award Management Requirements'' circular should be referenced in C 
9050.1A.
    FTA Response: In the proposed C 9050.1A, FTA referenced that FTA 
planned to propose updates to C 5010.1E, which FTA published for public 
notice and comment in the Federal Register on February 14, 2024 (89 FR 
11334). The final C 9050.1A references C 5010.1F, which also is being 
published on this date.
    Comment: Two commenters requested extension of the public comment 
period for C 9050.1A to accommodate the public comment period for 
proposed C 5010.1F. One commenter asked that FTA publish responses to 
comments on proposed C 5010.1F before taking comments on proposed C 
9050.1A. The other commenter asked that FTA extend the comment period 
for proposed C 9050.1A to close simultaneously with comment period for 
C 5010.1F.
    FTA Response: The public comment period for proposed C 9050.1A 
closed on September 11, 2023, and proposed C 5010.1F was not published 
until February 14, 2024. Thus, it was not possible for FTA to extend 
the public comment period for proposed C 9050.1A to coincide with the 
comment period for proposed C 5010.1F. FTA, however, made proposed C 
9050.1A available for reference during the subsequent C 5010.1F public 
comment review period in response to these requests. FTA has revised 
the circulars concurrently and withheld publishing the final C 9050.1A 
until after its review of the comments received in response to the C 
5010.1F Federal Register notice requesting public comment. To the 
extent that a topic is related to both circulars, commenters were able 
to comment during either comment period, and FTA considered any comment 
that applied to both circulars while both circulars were under 
revision.
    Comment: Three commenters requested more information about Transit 
Asset Management (TAM) requirements, including adding overall policies, 
principles, strategies, organizational structure, and objectives that 
inform the creation and implementation of TAM plans. Furthermore, 
commenters sought more specificity regarding TAM review schedules, 
monitoring asset performance, overlap with the metropolitan planning 
organization (MPO) planning process, and providing guidance on useful 
life and asset life cycles.
    FTA Response: All recipients and subrecipients of Federal financial 
assistance under 49 U.S.C. chapter 53 that own, operate, or manage 
capital assets used for providing public transportation must develop a 
TAM plan. Clarity and guidance concerning TAM requirements are 
important; however, the requested policy, guidance, and clarification 
regarding these TAM requirements is outside the scope of the urbanized 
area formula grant programs discussed in C 9050.1A. Because TAM 
requirements apply to most FTA recipients across many FTA grant 
programs, FTA ensures consistency and reduces duplicative information 
by providing TAM information and resources independently of the 
circulars on a publicly available website, https://www.transit.dot.gov/TAM. FTA will consider these comments during future updates to its TAM 
guidance.
    Comment: One commenter provided comments focused on safety 
technology, which requested that FTA update the model bus safety 
program to account for advances in technology since the program was 
last amended, including an update to include a mandate for advanced 
driver assistance systems (ADAS) on transit vehicles.
    FTA Response: FTA acknowledges the importance of safety technology. 
The substance of these comments, however, is outside the scope of the 
urbanized area formula grant programs discussed in C 9050.1A. FTA 
provides and maintains safety information and resources independently 
of the circulars on a publicly available website, https://www.transit.dot.gov/regulations-and-guidance/safety/transit-system-safety.
    Comment: One commenter requested additional guidance or training 
focused on responsibilities of MPOs during the metropolitan 
transportation planning process.

[[Page 79352]]

    FTA Response: MPOs play an integral role in the planning and 
approval of transportation projects, including those financed with 
formula funding offered through 49 U.S.C. 5307, 5337, and 5339(a). 
However, the commenter's proposals are outside of the scope of the 
formula funding programs discussed in the circular. FTA acknowledges 
that additional technical assistance may be beneficial and will 
consider the substance of the comments in any future training and 
guidance provided to recipients regarding MPO programs. Please also see 
FTA's resources about MPOs at https://www.transit.dot.gov/regulations-and-guidance/transportation-planning/metropolitan-planning-organization-mpo.
    Comment: One commenter requested FTA to include intercity bus 
considerations as a part of planning justifications in Chapter IV of 
the circular. The commenter also noted that FTA's circular, FTA C 
8100.1D ``Program Guidance for Metropolitan Planning and State Planning 
and Research Program Grants,'' refers to the need for States and MPOs 
to provide intercity bus operators and other stakeholders a reasonable 
opportunity to comment on transportation plans. The commenter requested 
the C 9050.1A section on planning justifications require improved 
timely intercity bus consultation processes by States and MPOs. The 
commenter also provided recommendations on the preferred method for the 
States and MPOs to engage with intercity bus carriers and the timing 
for when they can provide input on plans. Similarly, the commenter 
requested FTA highlight the intercity bus consultation component of 
planning under Chapter V where additional planning requirements are 
discussed. The commenter also noted that the language in Chapter V 
stating that the local coordinated planning process ``may also include 
consideration of the intercity bus transportation needs of the targeted 
population of seniors and individuals with disabilities'' is too 
permissive.
    Response: FTA declines to make a change in response to the 
comments. FTA declines to incorporate the recommendations under the 
planning justifications section in Chapter IV or in Chapter V in this 
circular because the more appropriate venue for planning-specific 
guidance is FTA C 8100.1D, which addresses the planning requirements 
carried out by States and MPOs. The scope of C 9050.1A, on the other 
hand, is to address the administration of urbanized area formula grant 
program funding under Sections 5307, 5337, and 5339(a), in which there 
are no provisions regarding intercity bus.
    Comment: One commenter requested continued engagement with MPOs and 
other stakeholders and requested FTA provide a cross-reference guide to 
assist MPOs in understanding the updates in terminology in C 9050.1A.
    Response: FTA will continue to engage with recipients, applicants, 
and the public to communicate changes resulting from the consolidation 
of the previous circulars into C 9050.1A. FTA's engagement will include 
outreach that provides explanations of updates to terminology and other 
content in the circular.
    Comment: One commenter requested more emphasis throughout the 
circular on the role private providers of transportation play in the 
provision of public transportation services. The commenter requested 
that the circular reference coordination with the private sector in the 
definition of ``Mobility Management.'' The commenter also requested 
that FTA change the reference to ``private nonprofit organizations'' in 
Chapter II discussing subrecipient arrangements to ``private 
providers.'' Further, the commenter requested that FTA add a reference 
to ``operational service planning including consideration of contracted 
operations'' as one example of a technical study that could be funded 
as a planning activity with Section 5307 funds. Additionally, the 
commenter requested that FTA add ``local ride providers'' to the 
entities involved in public transportation/human services planning or 
an alternative planning process from which Job Access and Reverse 
Commute (JARC) projects may be derived.
    Response: FTA declines to make changes in response to these 
comments. FTA acknowledges the significant role of private 
transportation providers in the provision of public transportation 
services and the benefit of their consideration in transportation 
coordination and public transportation planning processes. However, for 
the purposes of this circular, FTA limits the circular's discussion of 
private providers' roles in transit to their relevance to Sections 
5307, 5337, and 5339(a). FTA further addresses the resources and 
benefits of private providers within its guidance on transportation 
coordination and planning.
Comments Within the Scope of the Circular That Resulted in No Changes
    The following comments regarding the circular resulted in no 
changes because either the requests sought changes to statutory 
requirements, the topics they raised already are addressed adequately 
in the circular, or because the comment is better addressed through 
direct guidance from FTA to the commenter.
Comments Requesting Changes to Statutory Requirements
    Comment: Two commenters requested that FTA change the maximum 
Federal share for Section 5307 operating assistance from 50 percent to 
80 percent.
    FTA Response: The 50 percent maximum Federal share for operating 
assistance is set in statute, 49 U.S.C. 5307(d), and FTA has no 
authority to change it.
    Comment: Similarly, two commenters requested a change to allow 
proceeds from transit fares to be used as local match to FTA financial 
assistance.
    FTA Response: Generally, financial assistance from FTA may only 
fund the permissible Federal share of the ``net project cost'' of 
eligible projects for the formula programs covered by C 9050.1A (49 
U.S.C. 5307(d), 49 U.S.C. 5337(e), and 49 U.S.C. 5339(a)(7)). The term 
``net project cost'' means the part of a project that reasonably cannot 
be financed from revenues (49 U.S.C. 5302(13)). Furthermore, 49 U.S.C. 
5307(d)(3) and 49 U.S.C. 5339(a)(7)(B) specify the sources of funds 
that may be used as match and explicitly exclude ``revenues from 
providing public transportation services.''
    Comment: Two commenters requested a change to the period of 
availability to obligate Section 5307, 5337, and 5339(a) funds to 
awards, so that all three sources of formula funds have the same period 
of availability. Another commenter requested FTA remove language 
addressing Governors' discretion to use Section 5307 program funds 
remaining from the State's apportionment for small urbanized areas 
(UZAs) 90 days before the expiration of their period of availability, 
or alternatively, change the time period from 90 days to one year.
    FTA Response: FTA lacks discretion to modify the periods of 
availability to obligate formula funds for Section 5307 and 5339(a) 
programs because the periods of availability are set forth in 49 U.S.C. 
5336(g) and 49 U.S.C. 5339(a)(8), respectively. FTA has already 
administratively matched the period of availability for Section 5337 
funds with the statutory period governing Section 5339(a) funds. 
Similarly, FTA lacks discretion to remove or modify the 90-day time 
frame during which Governors may reallocate lapsing Section 5307 
program funds because the time frame is established in 49 U.S.C. 
5336(f)(3).

[[Page 79353]]

    Comment: One commenter requested that the circular require the 
Governor or the Governor's designee to consult with the MPO when 
redesignating a UZA's designated recipient. The commenter further 
requested that FTA require that an MPO's letter of concurrence 
accompany the Governor's written notice of redesignation to FTA. The 
commenter opined that past redesignation procedures requiring transit 
providers' unanimous consensus caused notable challenges in achieving a 
timely agreement.
    Response: FTA declines to make a change in response to the comment. 
FTA has not changed the recipient redesignation process requiring 
concurrence by the applicable MPO(s). Further, FTA does not have the 
discretion to exclude publicly owned operators of public transportation 
from a designation decision because 49 U.S.C. 5302 defines a 
``designated recipient'' as ``an entity designated, in accordance with 
the planning process under Sections 5303 and 5304, by the Governor of a 
State, responsible local officials, and publicly owned operators of 
public transportation to receive and apportion amounts made available 
under Section 5336 to UZAs of 200,000 or more in population.''
    Comment: One commenter requested FTA allow recipients who receive 
funds for contiguous but separately defined UZAs to use funds 
apportioned to one UZA for capital improvements in another UZA, as long 
as the recipient can demonstrate that the funds are being expended 
equitably across all areas.
    Response: FTA declines to make a change in response to this 
comment. FTA does not have the discretion to allow funds apportioned to 
one UZA to be used in another UZA when those funds provide no direct 
benefit to the apportioned UZA. Such use of funds would circumvent the 
apportionment transfer provisions codified in 49 U.S.C. 5336. However, 
as detailed at the end of Chapter IV, FTA notes limited flexibility for 
the use of UZA-specific funds for capital projects outside of the UZA. 
A recipient may use funds apportioned to a UZA outside the UZA for 
capital activities that involve mobile capital assets (e.g., rolling 
stock acquisition or maintenance) if the capital assets support a 
geographically continuous public transportation service that has at 
least one passenger access point within the apportioned UZA. Further, 
the updated circular clarifies that recipients may use funds 
apportioned to a UZA for immobile capital assets (e.g., rail stations, 
bus stops and terminals, etc.) located outside the UZA in proportion to 
the extent the asset supports transit service provided in the 
apportioned UZA based on a reasonable cost allocation methodology.
Topics Already Adequately Addressed or Better Addressed Directly With 
Recipients
    Comment: One commenter encouraged FTA to exercise discretion to 
determine that not all vehicles providing demand-response service be 
included in a vehicle count for purposes of complying with 49 U.S.C. 
5307(a)(2), colloquially referred to as the `100-bus rule'.
    FTA Response: 49 U.S.C. 5307(a)(2) limits a recipient's use of 
Section 5307 funds for operating assistance based on the number of 
buses operated in peak service. In compliance with the statute, FTA 
counts buses operated in peak demand-response service, excluding ADA 
complimentary paratransit service. Because common practice of transit 
providers operating both fixed-route and demand-response services is to 
employ their demand-response fleets for ADA complementary paratransit 
service, FTA excludes these operators' demand-response fleets for 
purposes of 49 U.S.C. 5307(a)(2). However, for operators that only 
provide demand-response service, FTA cannot distinguish that portion of 
the fleet used for ADA complementary paratransit service. Therefore, 
the bus count for demand-response-only fleets, for purposes of the 
thresholds in 49 U.S.C. 5307(a)(2), is determined by counting the 
number of demand-response vehicles used in peak service.
    Comment: Four commenters requested that FTA provide additional 
clarification of eligible expenses under FTA grants. One commenter 
requested clarification regarding eligibility of certain activities as 
a capital expense; one commenter requested clarification on the 
eligibility of fixed guideway under Section 5337; one commenter 
requested clarification about the eligibility of art and landscaping 
used for flood protection and resiliency; and one commenter asked that 
FTA list preventive maintenance in Table IV-1 ``Summary of Eligible 
Activities by Formula Grant Program'' as an eligible activity.
    Response: FTA declines to make a change in response to these 
comments. FTA issues circulars to provide general guidance and 
clarification while summarizing applicable Federal law. It would be 
impractical to provide this level of specificity for eligible expenses. 
Recipients should contact their FTA regional office with specific 
eligibility questions.
    Comment: One commenter requested the circular include an example 
illustrating how to split contract expenses to avoid counting the same 
expenses as both operating and capital costs under FTA's capital cost 
of contracting policy.
    Response: FTA declines to make a change in response to the comment. 
The requested examples would either be unduly specific or not expansive 
enough. FTA issues circulars to provide general guidance and 
clarification while summarizing applicable Federal law. The recipient 
should contact its FTA regional office with these eligibility 
questions.
    Comment: One commenter requested FTA add language stating whether a 
subrecipient of Section 5310 funds would also be considered an eligible 
subrecipient for the grant programs covered in this circular.
    Response: FTA declines to make a change in response to the comment. 
FTA considers its guidance sufficient regarding subrecipient 
eligibility in the circular, including the potential participation of 
non-profit organizations in certain grant programs. FTA issues 
circulars to provide general guidance and clarification while 
summarizing applicable Federal law. For this purpose, it is generally 
impractical to specify the eligibility of entities' grant participation 
in other FTA grant programs.
    Comment: One commenter requested that FTA include language stating 
when a recipient may charge administrative fees to an award for 
administration and management of Section 5307, 5337, and 5339(a) grant 
awards. Similarly, another commenter noted that FTA should address de 
minimis administrative costs, alleging that they are or should be 
separate from direct and indirect costs.
    Response: FTA declines to make a change in response to the comment. 
Under the government-wide Uniform Cost Principles for Federal Awards, 
every eligible cost must be either a direct cost or an indirect cost. 
(See 2 CFR 200.412 through 200.415 for information about determining 
whether a cost is direct or indirect.) This includes costs the 
commenter considers administrative in nature. The circular describes 
which administrative expenses are eligible. These expenses may 
potentially be indirect costs or directly allocable to the award. If 
the recipient is referring to administrative expenses associated 
specifically with designated recipient responsibilities, Table IV-2, 
Urban Formula Programs Capital Eligibility Table, states that those are 
not an eligible expense of formula funds.
    Comment: In reference to FTA's definition of ``Rehabilitate'' in 
Chapter I,

[[Page 79354]]

one commenter opined that the phrase ``including a rebuild and overhaul 
as defined in this circular'' may be confusing because these terms are 
a reference to the process to cause a capital asset to meet or extend 
its planned useful life.
    Response: FTA declines to make a change in response to the comment. 
FTA disagrees that the use of these terms is confusing. 
``Rehabilitate'' is the term used in Section 5339(a) to describe 
projects eligible under that section. FTA's definition clarifies that 
both rebuilds and overhauls are examples of activities that qualify as 
rehabilitation and only pertain to rolling stock. The definition uses 
rebuilds and overhauls to further distinguish from standard preventive 
maintenance, which is not a form of rehabilitation.
    Comment: One commenter requested that the list of Associated 
Transit Improvements in Chapter IV include additional examples of 
projects that address resiliency issues.
    Response: FTA declines to make a change in response to the comment. 
The circular only lists projects eligible as Associated Transit 
Improvements (ATI) that are in statute. FTA declines to add examples to 
the list. It is impractical to include additional specificity because 
of the various considerations in determining whether a project meets 
the statutory criteria as an ATI. Recipients should contact their FTA 
regional office with these eligibility questions.
    Comment: One commenter requested that FTA add language in Chapter 
IV discussing JARC projects to clarify that private for-profit 
companies are eligible for third-party contracts to provide JARC 
services.
    Response: FTA declines to add additional language regarding 
program-specific eligibility of third-party private for-profit 
companies because Chapter II of the circular articulates generally the 
eligibility of contracted service arrangements with such operators. 
These arrangements may include, but are not limited to, contracts to 
provide JARC services.
    Comment: One commenter noted that ``Job Access and Reverse Commute 
(JARC) Project'' as a defined term should be deleted because the JARC 
formula grant program under 49 U.S.C. 5316 was repealed.
    Response: While 49 U.S.C. 5316 was repealed by MAP-21, FTA declines 
to remove the definition of JARC in the circular because JARC projects 
are still eligible under 49 U.S.C. 5307(a)(1)(C).
    Comment: A commenter requested FTA consider removing all specific 
dollar amounts under the apportionment section of the circular in 
Chapter III. The commenter noted future legislative changes could 
modify certain fixed apportionment amounts, creating confusion and 
causing the circular to become outdated. The commenter opined, for 
example, that if Congress were to amend the $4 million State 
apportionment of 5339(a) National Distribution funding, such 
legislation would cause this circular to have incorrect information and 
cause confusion.
    Response: FTA did not remove the dollar amounts for certain fixed 
apportionments because the circular cites to the transportation 
reauthorization legislation from which the amounts are derived. FTA 
asserts that, in some cases when the risk of imminent change in the 
apportionment is low, the public and recipients are better served by 
references to the specific apportionment amounts in this circular. The 
commenter's example is a good example of an appropriate use of citation 
to a specific dollar amount because the State set-aside requirement in 
49 U.S.C. 5339(a)(5)(A) is a statutory set-aside set forth in a 
program-specific section of 49 U.S.C. chapter 53. The statutory 
provision is less likely to be amended before reauthorization, so 
citation to a specific dollar amount is appropriate.
    Comment: One commenter requested that the definition of 
``Facilities'' in the circular be revised to reference the intercity 
bus portion of intermodal facilities. The commenter noted that FTA's 
circular on joint development projects, FTA C 7050.1C, includes 
references to intercity bus when referring to joint development.
    Response: FTA declines to make a change in response to the comment. 
FTA declines to revise the definition of ``Facilities'' in C 9050.1A 
because the definition is sufficiently broad to include different types 
of facilities. FTA C 7050.1C is specific to joint development projects 
and provides more targeted information on intermodal facilities. The 
definition of ``Facilities'' in C 9050.1A does not preclude intermodal 
facilities, which may include intercity bus, from being included in a 
joint development. FTA's joint development circular provides sufficient 
applicable guidance regarding this definition from which the formula 
grant programs do not deviate.
    Comment: One commenter requested that the definition of ``Public 
Transportation'' be revised in the circular to clarify that Section 
5307 and 5339 funding can be used to improve intercity bus services.
    Response: FTA declines to revise the definition of ``Public 
Transportation'' as requested. The circular's definition of ``Public 
Transportation'' is consistent with the definition at 49 U.S.C. 
5302(15). Intercity bus is not public transportation according to this 
statutory definition applicable to the entirety of Chapter 53. The 
circular references intercity bus services where applicable to Section 
5307, 5337, and 5339(a) programs, which specify the narrow instances 
for which Section 5307 and 5339 funding can be used for intercity bus 
purposes.
    Comment: One commenter requested FTA to elaborate on information in 
Table IV-3 under ``Crime Prevention and Security Projects'' to clarify 
that capital projects that enhance safety and security at intercity bus 
facilities and intermodal transportation centers are eligible 
activities.
    Response: FTA declines to make a change in response to the comment. 
FTA declines to revise the list of examples in response to this comment 
because the list of examples is to reference specific technology or 
items that may enhance safety and security, not the type of facility.
    Comment: One commenter requested FTA add ``intermodal facilities 
including the intercity bus portions of such facilities'' as an example 
of eligible capital projects in Chapter IV where capital projects are 
generally discussed.
    Response: FTA declines to add this reference as specified; however, 
FTA added language regarding reasonable access for private intercity or 
charter transportation operators to federally funded public 
transportation facilities under 49 U.S.C. 5323(r) in the same section 
where capital projects are generally discussed based on other comments. 
FTA has also included a reference to joint development improvements, 
which include improvements of intercity bus facilities, in Table IV-2, 
based on other comments. To the extent that the comment seeks to state 
the inclusion of intercity bus in eligible transit programs, these 
additional references sufficiently address this comment.
    Comment: One commenter requested FTA include additional language 
under the ``Joint Development Projects'' section in Chapter IV to 
specify that eligible activities also include the improvement of 
transportation-related furniture, fixtures, and equipment in intercity 
bus terminals, as it is specified in the ``Transit-Oriented 
Development'' section.
    Response: FTA declines to make a change in response to the comment. 
FTA declines to add language to the ``Joint Development Projects'' 
section in the circular because the section already

[[Page 79355]]

references FTA C 7050.1C, FTA's Joint Development circular, which 
provides guidance regarding joint development projects. FTA also notes 
that the joint development projects and transit-oriented development 
projects are categorically distinct, and any addition of relevant 
information would be duplicative of other sections in the circular.
    Comment: One commenter requested FTA revise the definition of 
``Incidental Use'' in the circular by adding a sentence clarifying that 
privately or publicly operated intercity bus service in an FTA-funded 
facility is not an incidental use of that facility. The commenter 
expressed concern that, without that clarifying sentence, the circular 
may create confusion on whether intercity bus services are an 
incidental use.
    Response: FTA declines to make a change in response to the comment. 
FTA declines to revise the definition of ``Incidental Use'' by adding 
the suggested sentence. The nature of property incidental use is 
discussed in full in FTA's Award Management Requirements circular (C 
5010.1), which explains that 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.'' By statute, 49 
U.S.C. 5302(15), intercity bus service is not public transportation. 
Circular 9050.1A addresses intercity bus opportunities where 
appropriate while FTA's guidance regarding incidental use and intercity 
bus is discussed in other FTA circulars.
    Comment: One commenter requested FTA add language referencing the 
Surface Transportation Block Grant Program (STBG) under ``Availability 
of FHWA `Flexible Funds' for Transit Projects'' and ``Congestion 
Mitigation and Air Quality (CMAQ) Improvement Program'' that specifies 
flex funds can be used for intercity bus projects.
    Response: FTA declines to make a change in response to the comment. 
FTA declines to add this language because the flexible funding section 
in the circular sufficiently conveys that expenses must be eligible 
under both the originating Federal Highway Administration (FHWA) 
program and the FTA receiving program.

B. Changes Based on Public Comments

Comments Requesting Clarifications or Specificity
    FTA revised language in the circular to address the following 
comments, as explained below.
    Comment: One commenter requested FTA to add a statement that 
acknowledges that circulars may become outdated, and in that event, the 
law would apply.
    Response: In response to this comment, FTA added the sentence, ``to 
the extent this circular is inconsistent with changes in any statute or 
regulation, statute or regulation will supersede this circular,'' in 
the introductory paragraph of the circular.
    Comment: One commenter requested FTA to include language stating 
that third-party contracted service agreements may include businesses 
other than taxi companies and transportation network companies (TNCs) 
that are referred to in Chapter II, under ``Private Operators of Public 
Transportation as Contractors.''
    Response: FTA agrees that taxi companies and TNCs are not 
exclusively the businesses that may participate in these contracted 
service agreements. In response to this comment, FTA added ``or other 
similar service deployment models'' to the section to account for the 
various business models and contracting arrangements recipients may 
engage.
    Comment: One commenter requested clarification as to how State 
recipients must administer transferred funds. More specifically, the 
commenter asked whether apportionments transferred from a large UZA to 
a rural area would be administered as Section 5311 funds and therefore 
would follow the corresponding guidance for those funds.
    Response: Funds apportioned under one formula program to another 
separate formula program, or to a different tier of the same formula 
program, as determined by Census designations, are managed as if they 
are part of the receiving funding program (e.g., Section 5307 
transferred to Section 5311). While the circular already addresses how 
transferred apportionments would retain certain requirements/
limitations associated with the original apportioned program in Chapter 
III, additional language was included to specify that transfers of 
apportionments retain the same period of availability to obligate funds 
to grants as the program of the original apportionment.
    Comment: In reference to FTA's definitions of ``Equipment'' and 
``Supplies,'' three commenters requested an increase of the $5,000 per-
unit value threshold to $10,000 in order to match the threshold for 
micro-purchases for federalized procurement purchases.
    Response: Since FTA published the proposed circular, the Office of 
Management and Budget (OMB) has updated the ``Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal 
Awards'' under 2 CFR part 200, which will be effective October 1, 2024 
(89 FR 30046). Among those updates, OMB increased the threshold in the 
definitions of ``Equipment'' and ``Supplies'' from $5,000 to $10,000. 
FTA has incorporated these new thresholds in the circular. Note that 
FTA made this change based on definitional changes in part 200, not 
based on the micro-purchase threshold as suggested by the commenters. 
Also note that the threshold change is not effective until OMB's update 
to part 200 is effective on October 1, 2024.
    Comment: One commenter requested that FTA expand the criteria that 
a recipient should consider when undertaking fleet expansion in Chapter 
IV under ``Requirements Related to Vehicles and Equipment 
Eligibility.'' The commenter noted that the language should 
additionally account for recipients' evaluation of locally available 
resources to identify feasible opportunities for new and expanded 
routes and services, as such an evaluation is needed to require 
consideration of private mobility providers and to consider provision 
of demand-response services in lieu of fixed-route transit.
    Response: In response to the comment, FTA added ``and evaluate 
available resources'' to refer to other available resources, including 
those contemplated by the commenter, because recipients can consider a 
wide variety of resources.
    Comment: One commenter requested further clarification on 
recipients' eligibility to use funds apportioned to UZAs in rural 
areas, as well as their eligibility to use funds apportioned to rural 
areas in UZAs. More specifically, the commenter communicated support 
for the circumstances under which either rural or UZA funds may be used 
for services that intersect both a UZA and rural area but noted a 
contradiction in the circular's language regarding the inflexibility to 
use rural funds for the portion of such a service that is internal to a 
UZA when both UZA and rural funds are combined to support the 
respective service.
    Response: FTA updated the applicable circular language to reflect 
and clarify that, when both UZA and rural funds are combined to 
subsidize

[[Page 79356]]

such a service (or mobile capital assets used for the service), rural 
funds may support the portion of a service that is internal to a UZA. 
However, the language re-emphasizes that if a recipient only uses rural 
funds for such a service, the service must be designed primarily to 
bring rural passengers to and from the UZA with a limited number of 
route stops within the UZA. Additionally, FTA modified language to 
reflect and clarify that funds apportioned to a UZA that will be used 
for immobile capital assets located outside the UZA may support such an 
asset in proportion to the extent the asset supports transit service 
provided in the respective UZA based on a reasonable cost allocation 
methodology.
    Comment: One commenter requested clarification on whether transit 
agencies' bike share programs are eligible for Section 5307 funding, 
which would include activities such as purchasing bicycles and 
operating and managing bike share services.
    Response: In response to the comment, in Chapter IV, FTA clarified 
that eligible projects funded with Section 5307 funds may include 
infrastructure expenses to accommodate the presence of bicycle or other 
mobility device sharing programs in the vicinity of transit stops or 
stations, but the acquisition of bicycles, scooters, segways, or other 
similar mobility devices are ineligible expenses. Further, in the 
section addressing JARC projects in Chapter IV, FTA removed language 
that suggested operating expenses for bicycle sharing programs in the 
vicinity of transit stations are eligible. Such expenses are ineligible 
because operations associated with those individualized modes of travel 
do not qualify as public transportation.
    Comment: One commenter requested FTA to consider a different 
terminology other than ``Bicycle and Pedestrian Paths'' in Chapter IV. 
The commenter recommended FTA use the term ``bicycle and pedestrian 
facilities'' in order to highlight the physical nature of the space 
rather than give the impression that it refers to an off-road type of 
recreation amenity.
    Response: FTA updated the section in Chapter IV to which the 
comment referred by revising the terminology to ``Bicycle and 
Pedestrian Access Improvements.'' Changing the term to ``access 
improvements'' rather than ``paths'' or ``facilities'' provides better 
alignment to Associated Transit Improvements (ATI), which is defined in 
49 U.S.C. 5302(2) and is the focus of the section in the circular. FTA 
presumptively interprets bicycle and pedestrian access improvements as 
being ``physically or functionally related to transit facilities'' if 
they meet the distance requirements specified in the circular.
    Comment: Two commenters requested C 9050.1A clarify that minimum 
useful life, which is addressed in FTA's circular ``Award Management 
Requirements'' (C 5010.1), is different from useful life benchmark 
(ULB), which is governed by the Transit Asset Management (TAM) 
requirements. One of the commenters requested that C 9050.1A note that 
C 5010.1 is the governing circular on minimum useful life.
    Response: In response to these comments, FTA references C 5010.1F 
in the definition for the term ``minimum useful life'' for more 
information on that specific topic. FTA also deleted ``useful life 
benchmark'' from the list of defined terms in C 9050.1A to further 
reduce confusion since the term is no longer used in the circular.
    Comment: One commenter requested that the circular define or 
clarify the types of communications that fulfill the ``in writing'' 
requirement for purposes of requesting and issuing pre-award authority.
    Response: These types of communications are already addressed in 
Chapter V of the circular, but FTA additionally updated the definition 
of ``Pre-award Authority'' to state that it is announced in the annual 
Apportionment Notice, Notice of Funding Opportunity, a Letter of No 
Prejudice, or other written notification.
    Comment: One commenter requested that FTA emphasize the statutory 
provision 49 U.S.C. 5323(r), which states that a recipient may not deny 
reasonable access for a private intercity or charter transportation 
operator to federally funded public transportation facilities. The 
commenter said that the cost of maintaining bus terminals in dense 
urban areas is becoming too expensive for intercity bus companies, and 
the intercity bus companies are facing difficulty finding suitable and 
affordable facilities for passenger terminals in dense urban areas. The 
commenter further said that allowing the intercity bus companies access 
to public transportation facilities would be a convenience to 
passengers connecting to public transportation.
    Response: In response, FTA included the reference to the statute in 
the ``Activities Applicable to Section 5307, 5337, and 5339(a)'' 
section under Chapter IV. There, FTA states that a recipient's capacity 
requirements and the impact on existing public transportation services 
must be considered by a recipient in its determination of whether a 
proposed access is reasonable. FTA included examples of considerations 
in this determination.
    Comment: One commenter requested that ``intercity bus service'' be 
a defined term in C 9050.1A to ensure clarity on the meaning of 
intercity bus service. The commenter further requested that information 
about the Intercity Bus program under Section 5311(f) be added to C 
9050.1A under ``Relationship to Other Programs'' in Chapter II.
    Response: In response to these comments, FTA added information on 
the Intercity Bus Program under Section 5311(f) in Chapter II and a 
definition of ``intercity bus service'' that is based on the definition 
in FTA's Rural Areas Formula Grant Programs Guidance circular, C 
9040.1H, for consistency.
    Comment: One commenter requested clarification regarding how the 
capital cost of contracting table in Chapter IV applies to Section 
5339(a) funds.
    Response: In response, FTA amended the circular to now include 
additional information within the capital cost of contracting table 
summarizing the extent to which Section 5337 and 5339(a) funds may 
support capital cost of contracting activities.
    Comment: One commenter requested FTA to clarify that, in Chapter 
III, the ``Lapsing Funds'' section under ``Reallocation or Transfer of 
Apportionments'' is referring to Section 5307 funds.
    Response: FTA made this revision so that the section is titled 
``Lapsing Section 5307 Funds.''
    Comment: One commenter requested FTA emphasize that intercity bus 
projects are eligible as a capital project if they are part of a joint 
development improvement project under 49 U.S.C. 5302(4)(G).
    Response: FTA added a new row in Table IV-2 to specify joint 
development improvement projects as eligible capital activities in 
response to this public comment.
    Comment: One commenter requested FTA implement the requirement for 
recipients in UZAs with a population of 200,000 or more to expend a 
minimum of 0.75 percent of their Section 5307 apportionment on safety-
related projects, referred to as the safety set-aside, only at the 
individual recipient level and not for each recipient's grant 
application to allow recipients greater grant-making flexibility.
    Response: FTA removed the applicability of the requirement to each 
grant application to allow recipient flexibility for determining how to 
best structure grants to satisfy the minimum 0.75 percent expenditure 
on safety-

[[Page 79357]]

related projects. The implementation of the requirement at the 
individual recipient level was retained to ensure compliance with the 
statute.
    Comment: One commenter requested that FTA clarify in Chapter II, 
under the section that briefly explains Federal Highway Administration 
(FHWA) Flexible Programs, that flex funds can be used for intercity bus 
projects. The commenter noted that the language in the circular refers 
to flex funds being eligible for ``public transportation projects,'' 
which does not include intercity bus.
    Response: In response to this comment, FTA removed the reference to 
``public transportation projects'' and added language from the statute 
governing the transfer of highway funds for transit projects, 23 U.S.C. 
104(f)(1), to specify that recipients can transfer funds that were 
available for transit projects or transportation planning. The 
inclusion of the statutory language provides better alignment with the 
scope of eligible projects covered by the statute.
    Comment: One commenter requested that FTA revise the language in 
Chapter V stating that subarea allocations of formula funds are 
determined by ``a process based on local needs.'' The commenter asked 
that ``local needs'' be replaced with ``regional priorities'' to better 
align subarea allocation of formula funds with the performance and 
outcome-based planning processes carried out by MPOs.
    Response: FTA agrees. 49 U.S.C. 5303 generally establishes regional 
priorities as the appropriate geographic scale and standard governing 
metropolitan transportation planning decisions while incorporating 
local considerations through MPO local official participation. FTA 
revised the language to more closely match the statutory language 
emphasizing regional priorities as the controlling standard. In the 
same sentence, FTA removed language emphasizing the agreement by 
designated recipients to subarea allocations, as designated recipients' 
participation in the subarea allocation process is already represented 
through the metropolitan planning process.
    Comment: One commenter requested clarification on whether the 
flexibility to include substitute or contingency projects in a grant 
application is now being extended to all recipients rather than to just 
States and MPOs with multiple subrecipients. The commenter also 
requested clarification on this flexibility because the circular 
references ``below the line'' in a section of a grant application which 
may have referred to a scope code that no longer exists.
    Response: In the proposed circular, FTA changed the reference from 
``State'' to ``recipient.'' In response to the comment, FTA clarified 
that recipients with more than one subrecipient may substitute 
contingency subrecipient projects within a grant application. FTA 
declines to extend the flexibility to recipients without more than one 
subrecipient because they do not manage a program of projects within a 
single grant application for more than one other entity. FTA agrees 
that the reference to ``below the line'' section of a grant budget is 
unnecessary and has removed the reference to the term.

III. Other Changes

    In addition to the changes noted above, FTA has 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 has added 
language in Chapter II, under ``Designated Recipient and State Roles in 
Program Administration,'' to match the language for the criteria for 
eligible recipients in 49 U.S.C. 5339(a)(4). FTA also deleted 
information about the ``Over the Road Bus Accessibility Program'' in 
Chapter IV, which was mentioned under the section discussing the 
capital cost of contracting in the proposed circular. FTA removed that 
reference from the circular because the funding program expired after 
Federal fiscal year 2012.
    FTA also updated Public Transportation Safety Program (PTASP) 
information in Chapter V for consistency with revisions to the PTASP 
regulation (49 CFR part 673) that occurred after publication of the 
proposed circular.
    In Chapter IV, under ``Workforce Development Activities,'' the 
reference to cost principles for Federal awards under 2 CFR 200.403(d) 
was updated with a clarifying change from ``may not'' to ``must not'' 
for consistency with OMB updates to 2 CFR part 200 that become 
effective October 1, 2024.
    FTA made revisions in this final circular for consistency with 
language that was included in proposed FTA C 5010.1F ``Award Management 
Requirements'' and C 9040.1H ``Rural Areas Formula Grant Programs 
Guidance'' that were published for notice and comment. The name of this 
circular, C 9050.1A, has been updated to ``Urbanized Areas Formula 
Grant Programs Guidance'' for consistency with the naming structure of 
C 9040.1H. FTA also removed the statement that the circular contains 
guidance for the preparation of grant applications because that 
information is in C 5010.1F. FTA updated or added the following 
definitions for consistency with proposed C 5010.1F: the definition of 
``Capital Asset,'' which was modified for consistency with 2 CFR 200.1; 
the definition of ``Federal Interest,'' which was updated to better 
align with FTA and Federal regulations, including in cases for which 
fair market value determinations are not readily discernable; the 
definition of ``Incidental Use'' to align with C 5010.1F; the 
definition of ``National Environmental Policy Act (NEPA),'' which was 
updated to clarify the role in FTA-funded projects; the definition of 
``Preventive Maintenance,'' which was updated to provide more 
specificity; added the definition of ``Project Property'' for 
consistency with C 5010.1F; removed the definition of ``Spare Parts'' 
as it is not a term used in the circular; and the definition of ``State 
of Good Repair'' was clarified with non-substantive changes. For 
consistency with C 9040.1H, the definition of ``State'' was updated to 
include the 49 U.S.C. 5339 reference to the distinction between 
``State'' and ``territory,'' and a similar revision was made to note 
territories under the section explaining the Grants for Buses and Bus 
Facilities Formula Program under 49 U.S.C. 5339(a) in Chapter III.
    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.
    Finally, FTA removed outdated language establishing a threshold 
level of more than one mile of fixed guideway in order for UZAs to 
receive State of Good Repair funds in Chapter III under the ``State of 
Good Repair Grants program (Section 5337).'' The outdated requirement 
was not based in statute and has not been FTA policy for a significant 
amount of time. Removing this threshold requirement from the circular 
does not impact any prospective applicants of State of Good Repair 
funds and is not a change in existing policy.

Veronica Vanterpool,
Deputy Administrator.
[FR Doc. 2024-22161 Filed 9-26-24; 8:45 am]
BILLING CODE 4910-57-P