[Federal Register Volume 65, Number 236 (Thursday, December 7, 2000)]
[Rules and Regulations]
[Pages 76864-76884]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-30921]
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Part VI
Department of Transportation
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Federal Transit Administration
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49 CFR Part 611
Major Capital Investment Projects; Final Rule
Federal Register / Vol. 65, No. 236 / Thursday, December 7, 2000 /
Rules and Regulations
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DEPARTMENT OF TRANSPORTATION
Federal Transit Administration
49 CFR PART 611
[Docket No. FTA 99-5474]
RIN 2132-AA63
Major Capital Investment Projects
AGENCY: Federal Transit Administration (FTA), DOT.
ACTION: Final rule.
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SUMMARY: The Transportation Equity Act for the 21st Century (TEA-21)
requires the Federal Transit Administration (FTA) to issue regulations
on the manner in which candidate projects for capital investment grants
and loans for new fixed guideway systems and extensions to existing
systems (``new starts'') will be evaluated and rated. This rule
describes the procedures that FTA will use in the project evaluation
and rating process. This rule will enable FTA and Congress to identify
those new starts projects that should be considered for funding, in
part, by the Federal government.
DATES: This rule will become effective on February 5, 2001, except for
paragraphs (a)(1)(i)-(ii) and (d) of Appendix A to Part 611 which will
become effective on September 1, 2001. Affected parties do not have to
comply with the information collection requirements until FTA publishes
in the Federal Register the control numbers assigned by the Office of
Management and Budget (OMB) to these information collection
requirements.
FOR FURTHER INFORMATION CONTACT: For program issues, John Day, Office
of Policy Development, FTA, (202) 366-4060. For legal issues, Scott A.
Biehl, Assistant Chief Counsel, FTA, (202) 366-4063.
SUPPLEMENTARY INFORMATION:
Electronic Access
Electronic access to this and other documents is available through
FTA's home page on the World Wide Web, at http://www.fta.dot.gov.
Internet users can access all comments received by the U.S. DOT
Dockets, Room PL-401, via the Docket Management System (DMS) on the DOT
home page, at http://dms.dot.gov. The DMS is available 24 hours each
day, 365 days each year. Please follow the instructions online for more
information and help.
An electronic copy of this document may be downloaded using a modem
and suitable communications software from the Government Printing
Office's (GPO) Electronic Bulletin Board Service at (202) 512-1661.
Internet users may reach the Federal Register's home page, at http://www.nara.gov/fedreg, and the GPO database, at http://www.access.gpo.gov/nara.
Table of Contents
I. Background
II. History
A. The First Policy Statement (1976)
B. Policy on Rail Transit (1978)
C. Statement of Policy on Major Urban Mass Transportation
Capital Investments (1984)
D. Surface Transportation and Uniform Relocation Assistance Act
of 1987 (STURAA)
E. Intermodal Surface Transportation Efficiency Act of 1991
(ISTEA)
F. Executive Order 12893 (1994)
G. Policy Discussion Paper (1994)
H. The 1996 Statement of Policy
III. Transportation Equity Act for the 21st Century (TEA-21)
A. Significant Changes
B. Other Changes
IV. Government Performance and Results Act of 1993
V. Outreach
VI. Section-By-Section Analysis
VII. Response to Request for Comments on Particular Issues
VIII. Other Comments
IX. Regulatory Evaluation
X. Regulatory Process Matters
I. Background
The Federal Transit Administration (FTA) is issuing this rule to
carry out the requirements of section 3009(e)(5) of TEA-21. This rule
defines the process FTA will use to evaluate candidate new starts
projects proposed for funding under 49 USC Sec. 5309.
The Notice of Proposed Rulemaking (NPRM) for this Rule was issued
on April 7, 1999 (64 FR 17062). The period for public comment closed on
July 6, 1999, though late-filed comments were accepted through July 19.
See docket #FTA-99-5474.
These procedures replace those in force since the December 19, 1996
Federal Register Notice (61 FR 67093), and the November 12, 1997
amendments to this Notice (62 FR 60756), which described the measures
used by FTA to evaluate candidate projects for discretionary new starts
funding under the statutory criteria in effect at that time.
This rule, together with the FTA/Federal Highway Administration
(FHWA) planning and environmental regulations at 23 CFR parts 450 and
771, will flesh out the requirements of 49 USC 5309(e) under TEA-21.
The statute now requires candidate projects to be ``(A) based on the
results of an alternatives analysis and preliminary engineering, (B)
justified based on a comprehensive review of its mobility improvements,
environmental benefits, cost effectiveness, and operating efficiencies,
and (C) supported by an acceptable degree of local financial
commitment, including evidence of stable and dependable financing
sources to construct, maintain, and operate the system or extension.''
This rule sets forth the approach FTA will use to evaluate candidate
projects in terms of their justification and local financial
commitment. Consistent with 49 USC 5309(e)(6), as amended by section
3009(e) of TEA-21, these procedures will be used to approve candidate
projects for entry into preliminary engineering and final design. These
procedures will also be used to evaluate projects in order to make
recommendations for funding in the annual report to Congress required
by 49 USC 5309(o)(1).
This rule describes the project evaluation and rating process; it
does not define the process by which FTA determines annual project
funding recommendations, nor does it define the process by which FTA
enters into funding commitments through Full Funding Grant Agreements
(FFGAs). These processes are beyond the scope of this rule. The ratings
developed under this rule are intended to denote overall project merit,
and will form the basis for such funding decisions; however, actual
funding decisions will also involve consideration of the amounts of new
starts funding available under section 5309 (both annually and over the
authorization period), proposed projects' phase of project development,
geographical factors, and any outstanding issues that may affect the
viability of a proposed project. For purposes of annual budget
recommendations to Congress, proposed new starts projects must also be
likely to have completed enough of final design that cost estimates are
firm and be likely to have in place a fully committed financial plan by
the close of the fiscal year for which recommendations for new Full
Funding Grant Agreements (FFGAs) are being made.
II. History
Since the early 1970's, the Federal government has provided a large
share of the Nation's capital investment in urban mass transportation,
particularly for ``new starts'' (major new fixed guideway transit
systems or extensions to existing fixed guideway systems). By the mid-
1970's, because of the magnitude of the new start commitments being
proposed, the
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Department found it useful to publish a statement of Federal policy to
ensure that the available resources would be used in the most prudent
and effective manner.
A. The First Policy Statement (1976)
The first policy statement was issued in 1976 (41 FR 41512
(September 22, 1976)). It introduced a process-oriented approach with
the requirement that new start projects be subjected to an analysis of
alternatives, including a Transportation System Management (TSM)
alternative that used no-capital and low-capital measures to make the
best use of the existing transportation system. The Statement also
required projects to be ``cost-effective.''
B. Policy on Rail Transit (1978)
The original policy was supplemented in 1978 by a ``Policy on Rail
Transit'' (43 FR 9428 (March 7, 1998)). This Statement reiterated the
requirement for alternatives analysis, established requirements for
local financial commitments to the project, established the concept of
a contract providing for a multi-year commitment of Federal funds, with
a maximum limit of Federal participation (the Full Funding Grant
Agreement--FFGA), and required that local governments undertake
supporting local land use actions. This was supplemented by a 1980
policy statement that linked the alternatives analysis requirement to
the Environmental Impact Statement development process (45 FR 71986
(October 30, 1980.))
C. Statement of Policy on Major Urban Mass Transportation Capital
Investments (1984)
These principles were reiterated and refined in a May 18, 1984,
Statement of Policy on Major Urban Mass Transportation Capital
Investments (49 FR 21284). The major feature of this policy statement
was the introduction of an approach for making comparisons between
competing projects. To do so, a rating system was established under
which projects were evaluated in terms of a cost effectiveness index of
forecast incremental cost per incremental rider for the build
alternative, compared with the TSM alternative as the base. Further,
index threshold values were established which projects had to pass in
order to be considered for funding. In addition, the criteria to be
used to judge local financial commitment were spelled out.
D. Surface Transportation and Uniform Relocation Assistance Act of 1987
(STURAA)
The principles of the 1984 policy statement were later incorporated
into law with enactment by Congress of the Surface Transportation and
Uniform Relocation Assistance Act of 1987 (STURAA) (Pub. L. 100-17).
This act established in law a set of criteria which new starts projects
had to meet in order to be eligible for Federal discretionary grants.
Specifically, projects had to be ``cost-effective'' and ``supported by
an adequate degree of local financial commitment.'' STURAA also added a
requirement for an annual report to Congress laying out the
Department's recommendations for discretionary funding for new starts
for the subsequent fiscal year.
To effectuate the requirements set forth in STURAA, on April 25,
1989 FTA (then the Urban Mass Transportation Administration) issued a
Notice of Proposed Rulemaking (54 FR 17878). This Proposed Rule would
have codified the requirements of the 1984 Policy Statement and made
the ``Cost Per New Rider'' Index and threshold values regulatory.
However, in the FY 1990 and FY 1991 Appropriations Acts, Congress
directed that this rulemaking not be advanced (See the Department of
Transportation and Related Agencies Appropriations Act, 1990 (Pub. L.
101-164) and Department of Transportation and Related Agencies
Appropriations Act, 1991 (Pub. L. 101-516)). Consequently, on February
3, 1993, this proposed rulemaking was withdrawn (58 FR 6948).
E. Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA)
The Intermodal Surface Transportation Efficiency Act of 1991
(ISTEA) made substantial changes to the legislative basis for the
criteria used to evaluate candidate projects. Specifically, the
original requirement that a project be ``cost-effective'' was expanded;
the new requirement specified that projects be ``justified, based on a
comprehensive review of its mobility improvements, environmental
benefits, cost-effectiveness, and operating efficiencies.'' In
addition, certain ``considerations'' and ``guidelines'' were
established that were to be taken into account in determining how well
a project met the criteria.
F. Executive Order 12893 (1994)
On January 26, 1994, the President issued Executive Order 12893 (59
FR 4233), describing the principles which Federal agencies are to apply
in determining how to invest in all forms of infrastructure, including
transportation. The Executive Order requires a systematic analysis of
the costs and benefits of proposed investments, and sets out the
parameters for such analysis. It calls for efficient management of
infrastructure, including a focus on the operation and maintenance of
facilities, as well as the use of pricing to manage demand, and calls
for comparison of a comprehensive set of options and consideration of
quantifiable and qualitative measures of benefits for all programs.
G. Policy Discussion Paper (1994)
Thereafter, in September 1994, FTA circulated a ``policy discussion
paper'' to the transit industry and other stakeholders for comment.
This paper detailed various approaches for evaluating proposed projects
under the ISTEA criteria, and requested comment on nine specific
issues. Interest was extensive, and a period of public comment, further
analysis, additional industry input, and additional analysis ensued.
H. The 1996 Statement of Policy
On December 19, 1996, FTA issued a Notice in the Federal Register
that formally adopted the ISTEA project justification criteria (61 FR
67093). This Notice defined the criteria, established the process, and
described the measures that would be used to evaluate candidate
projects for discretionary new starts funding. This Notice also
established a multiple-measure method of project evaluation, in a
manner consistent with Executive Order 12893.
This Statement of Policy was amended on November 12, 1997, to
incorporate Departmental guidance establishing a Department-wide
standard for valuing travel time, and made other technical corrections
(62 FR 60756).
III. Transportation Equity Act for the 21st Century (TEA-21)
On June 9, 1998, the Transportation Equity Act for the 21st Century
(TEA-21) (Pub. L. 105-178) was enacted. TEA-21 leaves much of past law
and policy regarding new starts intact, including the basic project
justification criteria and the multiple-measure method of project
evaluation. However, a number of significant changes were introduced.
A. Significant Changes
Integration of the Major Investment Study (MIS)
requirement into the FTA/FHWA planning and environmental regulations
(23 CFR part 450 and 23
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CFR part 771), elimination of the MIS as a separate requirement (see
section 1308 of TEA-21), and required streamlining of the environmental
process (see section 1309 of TEA-21);
The requirement for FTA to establish overall project
ratings of ``highly recommended,'' ``recommended,'' or ``not
recommended;''
The requirement for FTA approval for a project to advance
to the final design stage of the project development process; and
The requirement that FTA publish regulations on the manner
in which proposed projects will be evaluated and rated (the purpose of
this rule).
B. Other Changes
Several additional statutory ``considerations'' have been
added to the project evaluation process, including the cost of sprawl,
infrastructure cost savings due to compact land use, population density
and current transit ridership in a corridor, and the technical capacity
of the grantee to undertake the project.
TEA-21 expressly prohibits FTA from considering the dollar
value of mobility improvements (see section 3010).
The ISTEA exemptions from the FTA statutory project
evaluation process, for proposed projects that require less than one-
third of the project funding from 49 U.S.C. 5309 or are part of a State
Improvement Plan for air quality, were eliminated. The exemption
remains for projects requiring less than $25 million in 49 U.S.C. 5309
funding.
For evaluating local financial commitment, the
consideration for local funding beyond the required non-Federal share
has been incorporated into statute.
A second annual report to Congress, in addition to the
existing Report on Funding Levels and Allocations of Funds, is now
required. This new ``Supplemental New Starts Report,'' due each August,
will include updated ratings for projects that have completed the
alternatives analysis and preliminary engineering stages of development
since the date of the last Report on Funding Levels and Allocations of
Funds.
IV. Government Performance and Results Act of 1993
The Government Performance and Results Act (GPRA) was enacted in
1993 to provide for the establishment of strategic planning and
performance measurement in the Federal Government. It is primarily
intended to improve Federal program effectiveness and public
accountability by promoting a new focus on results, service quality,
and customer satisfaction.
In the NPRM for this rule, FTA indicated an intent to develop
performance measures to evaluate our administration of the new starts
program, and to measure the performance of Federal new starts
investments. Both of these measures would be incorporated into FTA's
management of new starts projects. The NPRM invited specific comment on
these issues, including recommendations as to which measures and
indicators would be appropriate, as well as appropriate timeframes for
evaluation.
Comment. FTA received a total of three comments on the GPRA issues,
from two interest groups and one transit industry trade association. On
the subject of FTA's performance in administering the new starts
program, two of the commenters recommended that performance be measured
according to factors under FTA's control, such as timeliness in
responding to grantee inquiries, reporting to Congress, uniformity of
guidance, approval actions, and the extent to which funding
recommendations are based on project ratings. One commenter saw no
benefit to evaluating FTA's performance in this regard.
Only two of the three commenters addressed the subject of new
starts follow-up evaluations, the industry trade association and one of
the two interest groups. Both supported the general concept of follow-
up evaluations, but provided little additional comment. The interest
group recommended that reviews not occur until at least after the first
year of revenue service, and not later than 15 years, suggesting
ratings at 2 and 7 years. The trade association recommended that
projects be evaluated against objectives set at time of the decision to
implement the project; ratings should encompass a 5-10 year operating
period, and should focus on overall performance, not ridership and
cost.
Response. The wording of the section on GPRA in the preamble to the
NPRM may have led to confusion regarding what FTA intends to measure,
which may account for the fact that few comments were submitted on this
issue. In evaluating FTA's administration of the new starts program,
the intent was to establish measures for determining the degree to
which projects remain on schedule and on budget once a commitment to
fund the project has been made (i.e., an FFGA has been executed), and
to measure the success of new starts projects once they are in
operation. This rule incorporates a two-step data collection process to
meet both of these goals. For those new starts that are put under
FFGAs, FTA will combine before-and-after data with planning projections
to evaluate the project in terms of four areas of interest: Capital
costs, operating costs, system utilization (including ridership levels,
service levels, user characteristics, trip purposes, demographics,
etc.), and external factors relevant to the project. These data
collection activities will be considered an eligible part of the
project for funding purposes. Prior to the execution of an FFGA,
project sponsors, as part of their final design efforts, will have to
submit a complete plan for collection of the ``before'' data to FTA.
The actual collection of data by project sponsors will be required
before construction begins. The FFGA will contain a requirement for the
project sponsors to collect the ``after'' data, two years after the
project opens for revenue service. FTA will then compare the ``after''
data with the ``before'' data, as well as with the projections of
costs, ridership, and system utilization characteristics made during
the project development process, to evaluate the success of the
project. Project sponsors will also be asked to report on any external
factors that might have influenced the costs, ridership, and
utilization factors, such as unexpected increases or decreases in
gasoline prices, employment trends, etc.
The intent of this evaluation process is to help to develop a
greater understanding of the actual benefits of new starts, and support
improvements to the forecasting process. FTA recognizes that this
evaluation will provide only a short-term ``snapshot'' of the
performance of a new fixed-guideway system, and that many of the
benefits, particularly in terms of land use, are long-term in nature.
Project sponsors are of course encouraged to continue their data
collection efforts beyond the period two years after opening. However,
given the nature of the appropriations and authorization process, there
is also a need for short-term data to provide an initial indication of
the benefits of a project.
V. Outreach
The development of this Rule began with a series of outreach
sessions conducted during the months of September and October 1998.
Three workshops were held around the country: One in Portland, Oregon,
in conjunction with the RailVolution Conference on September 14, 1998;
one
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in Washington, DC on September 25, 1998; and one in New York City, in
conjunction with the Annual Meeting of the American Public Transit
Association (APTA) on October 8, 1998.
The purpose of these outreach sessions was to describe the changes
made by TEA-21 to the new starts program, discuss how we plan to
implement them, and solicit general comment on FTA's policies and
procedures in managing the new starts program.
The comments received during this outreach process were generally
supportive of our proposed approach to this rule, including the
retention of the basic principles of the 1996 Statement of Policy.
The NRPM for this rule was issued on April 7, 1999. The docket was
open for public comment through July 6, 1999, though late-filed
comments were accepted through July 19, 1999. Comments were received
from a total of 41 individuals and organizations. During the comment
period, FTA held three additional public outreach workshops to solicit
comment on the proposed rule; one in Toronto, Ontario on May 24, 1999,
in conjunction with the 1999 American Public Transit Association's
Commuter Rail/Rapid Transit Conference; one in Oakland, California on
June 3, 1999; and one in Washington, DC on June 8, 1999. Notes from
these workshops have been placed in the docket for this rule (#FTA-99-
5474-48).
VI. Section-by-Section Analysis
A. Section 611.1: Purpose and Contents
This section states that this rule is issued to meet the statutory
requirement of Title 49, United States Code, section 5309(e)(5).
This rule establishes the methodology by which FTA will evaluate
proposed new starts projects as required by 49 U.S.C. 5309(e). The data
collected as part of the planning and project development processes and
related regulations, conducted under 23 CFR part 450 and 23 CFR part
771, will provide the basis for this evaluation. Applicants must follow
these rules to be considered eligible for capital investment grants and
loans for new fixed guideway systems or extensions (``new starts'').
The results of this evaluation will be used by FTA to make the
findings required by statute for proposed projects to advance into the
preliminary engineering and final design stages of project development,
and to develop funding recommendations for the President's annual
budget request. They will also be used to determine which projects are
eligible for funding commitments under Full Funding Grant Agreements.
The information collected and ratings developed under this rule
will form the basis for the annual Report on Funding Levels and
Allocations of Funds, as required under 49 U.S.C. 5309(o)(1), and the
``Supplemental Report on New Starts,'' as required by 49 U.S.C.
5309(o)(2). The NPRM to this Rule proposed cutoff dates for information
to be included in these reports; however, FTA has reconsidered the need
for dates, as we strive for more real-time information. Thus, the
cutoff dates for these reports have been dropped from this rule.
B. Section 611.3: Applicability
This section states that this rule applies only to the evaluation
of projects seeking Federal capital investment funds for new transit
fixed guideway and extension projects (``new starts'') under 49 U.S.C.
5309.
It also states that proposed projects are exempt from evaluation
under this rule if the total amount of funding under 49 U.S.C. 5309 is
less than $25,000,000, or if they are specifically exempt by statute.
Such projects must still meet the planning requirements under 23 CFR
part 450 and environmental review requirements under 23 CFR part 771,
as well as the project development process described in this rule.
Title 49, U.S.C. 5309(e)(7) requires new starts projects to be
carried out through a Full Funding Grant Agreement (FFGA), and also
requires FTA to base the decision to issue an FFGA on the results of
the evaluations and ratings process. Thus, any proposed project that is
not evaluated will not be eligible for an FFGA. Sponsors of proposed
projects that they believe to be exempt are therefore strongly urged to
submit project evaluation information to FTA. FTA will carefully review
projects for which sponsors are claiming exemptions under this rule.
Such projects will still be approved for entry into preliminary
engineering and final design, based on planning and project development
requirements. If the proposed share of project funding from the section
5309 new starts program passes the $25 million level at any time, FTA
will expect the project sponsor to develop the information required to
be evaluated under this rule, and will require that such a project be
funded using an FFGA.
This section also notes that projects for which an FFGA has already
been executed are not subject to reevaluation under this rule. However,
extensions and/or modifications to projects with existing FFGAs will be
subject to evaluation and rating under this rule.
Comment. FTA received six comments on the issue of project
exemptions, expressing general confusion and opposition to FTA's
position on exempt projects. One transportation consultant and one
transit operator argued that all exempt projects should be assigned a
default rating of ``medium,'' which could be raised by the submission
of data for evaluation; the transit operator also expressed the opinion
that small projects (i.e., $25 million in new starts funds) do not
generate great benefits, and therefore should not be required to submit
data for evaluation. One State DOT recommended that FTA simply set
aside $500 million annually for exempt projects.
Three commenters also expressed some degree of confusion regarding
the treatment of exempt projects. One attendee at the Washington, DC
workshop wondered whether project sponsors would attempt to ``cheat''
the process by claiming exemptions and another at the Oakland, CA
workshop expressed confusion about continued eligibility of exempt
projects for funding. One industry interest group commented that, since
TEA-21 already contains language exempting projects under existing
FFGAs from re-evaluation under the revised criteria, including the same
language in the Final Rule would be confusing.
Response. FTA is not prepared to set aside half (or any amount) of
the annual new starts funding authorization for exempt projects, and
rejects the assertion that Congress intended such projects to be exempt
from the evaluation process because they have no measurable benefits.
The Final Rule retains the NPRM language strongly encouraging sponsors
of projects they believe to be exempt to submit data for project
evaluation. This encouragement does not and is not intended to
eliminate the provisions in TEA-21 exempting certain projects from the
evaluation process, as many of the commenters seem to have surmised.
Any proposed project that meets these provisions is still exempt from
the evaluation and rating process; however, submitting data will give
FTA an empirical basis on which to make funding recommendations to
Congress. It will also maintain a proposed project's eligibility for an
FFGA. Indeed, 49 U.S.C. 5309(e)(7) requires new starts projects to be
carried out through a Full Funding Grant Agreement, and also requires
FTA to base the decision to execute an FFGA on the results of the
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evaluations and ratings process. Thus, any proposed project that is not
evaluated will not be eligible for an FFGA. FTA will of course allocate
any funds appropriated by Congress for such projects. However, we
believe project sponsors will find the more predictable and reliable
funding provided through an FFGA to be to their advantage. Therefore,
project sponsors are encouraged to submit data for evaluation to retain
their eligibility for an FFGA.
Finally, FTA acknowledges that there may be a temptation to
circumvent the project evaluation process, as noted during the
Washington, D.C. workshop. For example, it is conceivable that project
sponsors may officially maintain a low level of section 5309 new starts
funds throughout a project's development, only to ``discover'' that
additional funds will be needed as the development process draws to a
close. FTA also recognizes that not all such instances will result from
deliberate attempts to manipulate the process; occasionally, further
engineering and design will uncover a legitimate need for additional
funds during the project development process, or local funding may not
materialize as initially proposed. However, due to the fact that
project evaluation is a condition of eligibility for an FFGA, and that
an FFGA offers more stability in terms of funding than relying on
annual Congressional appropriations, FTA believes that deliberate
attempts to evade project evaluation will be few and far between.
Although projects proposed as ``exempt'' are not subject to
evaluation against the new starts project justification and local
financial commitment criteria, such projects must still request FTA
approval for entrance into preliminary engineering and final design.
The decision to approve advancement in the project development process
for such projects is based on compliance with basic planning,
environmental, project management, and other requirements which apply
to all projects pursuing section 5309 new starts funding, regardless of
the amount. It is at the preliminary engineering and final design
approval points that FTA works with the project sponsor to determine if
the proposed ``exempt'' project appears to be at risk for requiring new
starts funding at an amount greater that $25 million, and to seek
assurances that local or other Federal formula funds will be pursued if
a project's cost or funding strategy changes. Once again, in order to
preserve maximum funding flexibility, FTA strongly encourages the
sponsors of proposed projects that they believe to be exempt to
nonetheless submit data for evaluation.
C. Section 611.5: Definitions
This section defines key terms used in this part.
Comment. Four commenters to the proposed rule expressed concern
that the definition of ``fixed guideway'' was unnecessarily narrow, and
may perhaps exclude many bus rapid transit (BRT), ferry boat, commuter
rail and light rail systems that would operate along a shared right-of-
way.
Response. FTA has re-examined the definition used in the NPRM, and
agrees that it could be read as excluding some BRT and ferry projects
that would otherwise be eligible under the new starts program. The
definition used in this rule has been modified to address this
uncertainty. Definitions for ``bus rapid transit'' and ``BRT'' have
also been added, consistent with the definition used in FTA's Request
for Participation in the Bus Rapid Transit Demonstration Program (63 FR
68347 (December 10, 1998)).
FTA has also added a definition for ``Transportation System User
Benefits'' and removed the definition for the ``Transportation System
Management alternative,'' as discussed later in the preamble to this
Rule.
D. Section 611.7: Relation to Planning and Project Development
Processes
New start projects, like all transportation investments in
metropolitan areas, must emerge from a regional multimodal
transportation planning process in order to be eligible for Federal
funding. In addition, 49 U.S.C. 5309(e)(1) specifies that discretionary
grants or loans for new starts may only be approved if a proposed
project is based on the results of alternatives analysis and
preliminary engineering, and that certain project justification and
financial criteria have been met.
As part of the metropolitan planning process, local project
sponsors must perform a corridor-level analysis of mode and alignment
alternatives in corridors for which projects may be proposed for
section 5309 new starts funding. This alternatives analysis will
provide information on the benefits, costs, and impacts of alternative
strategies, leading to the selection of a locally-preferred alternative
to the community's mobility needs.
The approach taken in this rule envisions alternatives analysis as
a key planning tool to be undertaken within the multimodal metropolitan
and statewide planning processes, supplemented by subsequent project
development analyses, for determining appropriate solutions to
transportation issues. FTA and FHWA are currently modifying their joint
planning and environmental regulations to better reflect the planning
and project development provisions of TEA-21. To the extent possible,
the development of these regulations has been coordinated with the
development of this final rule on major transit capital investments.
However, FTA may amend this rule, if necessary, when the joint planning
and environmental Final Rule is issued.
Federal financial support for the planning process is derived from
a number of sources, including the Metropolitan Planning Program under
49 U.S.C. 5303, the State National Planning and Research Program under
49 U.S.C. 5313, and planning programs administered by the Federal
Highway Administration. FTA Urbanized Area Formula funds under 49
U.S.C. 5307 and flexible funds under the Surface Transportation Program
(STP) and the Congestion Mitigation and Air Quality (CMAQ) Program may
also be used to support certain planning activities. Given the
significant demands placed on the new start program, FTA does not
support the use of 49 U.S.C. 5309 funds for initial planning
activities. Moreover, as amended by TEA-21, 49 U.S.C. 5309(m)(2) limits
the amount of new starts funding that can be used for purposes other
than final design and construction to not more than 8 percent of funds
appropriated. In evaluating the local financial commitment to a
proposed project, FTA will consider the degree to which initial
planning activities are conducted without funding from section 5309.
The alternatives analysis study (also known as a major investment
study--MIS--or multimodal corridor analysis) evaluates several modal
and alignment options for addressing mobility needs in a given
corridor. It is intended to provide information to local officials on
the benefits, costs, and impacts of alternative transportation
investments. Potential local funding sources for implementing and
operating the investment are to be identified and studied, and
information in response to the FTA new starts project evaluation
criteria is to be developed. Involvement of a wide range of
stakeholders--including the general public--in the alternatives
analysis study process is strongly encouraged. At local discretion, the
alternatives analysis may include the undertaking of a Draft
Environmental Impact Statement (DEIS) or Environmental Assessment (EA).
Alternatives analysis is considered
[[Page 76869]]
complete when a locally preferred alternative (LPA) is selected by
local and regional decisionmakers and adopted by the metropolitan
planning organization (MPO) in its financially-constrained metropolitan
transportation plan.
At this point, the local project sponsor may submit a request to
the FTA regional office to initiate the preliminary engineering phase
of project development. The request must provide information that
demonstrates the readiness of the project to advance into preliminary
engineering, including the adoption of the project into the
metropolitan transportation plan and the programming of the preliminary
engineering study in the Transportation Improvement Plan (TIP), and
information demonstrating the technical capability of project sponsors
to undertake the preliminary engineering effort. The request must also
address the project justification and local financial commitment
criteria outlined below. (This information is normally developed as
part of an alternatives analysis.) FTA will then evaluate the proposed
project as required by 49 U.S.C. 5309(e)(6) and determine whether or
not to advance the project into preliminary engineering. FTA approval
to initiate preliminary engineering is not a commitment to fund final
design or construction.
Where the sponsoring agency believes that a proposed project is
exempt from evaluation under this rule, submission of project
justification and financial commitment information to FTA is not
required. However, exempt projects must still meet all planning,
environmental, project management, and other requirements which
demonstrate their readiness to advance into preliminary engineering. In
addition, without information to support the justification of and local
financial commitment to a proposed project, FTA will have no basis for
decisions on whether to recommend Federal funding commitments.
Therefore, sponsors of exempt projects are strongly encouraged to
submit information on project justification and financial commitment.
During the preliminary engineering phase, local project sponsors
refine the design of the proposal, taking into consideration all
reasonable design alternatives. Preliminary engineering results in
estimates of project costs, benefits and impacts in which there is a
much higher degree of confidence. A comprehensive preliminary
engineering effort will also address the evaluation criteria described
in this rule. In addition, NEPA requirements must be met (for new
starts, this usually includes the completion of a Final Environmental
Impact Statement), project management plans and fleet management plans
are finalized, and local funding sources are committed to the project
(if they have not already been committed). Information on project
justification and the degree of local financial commitment will be
updated and reported as appropriate. As part of their preliminary
engineering activities, localities are encouraged to consider policies
and actions designed to enhance the benefits of the project and its
financial feasibility.
Project sponsors should also ensure that safety considerations are
weighed during the preliminary engineering phase. With regard to rail
projects that will be subject to Federal Railroad (FRA) safety
jurisdiction, FTA will notify FRA of pending new starts at the earliest
date practicable, as important decisions affecting rail safety must be
made at the outset of the planning and grant development process. FRA
will forward any recommendations it has to FTA, which will forward them
to the project sponsor.
Preliminary engineering is typically financed with 49 U.S.C.
Sec. 5303 and Sec. 5307 funds, local revenues, and flexible funds under
the STP and CMAQ programs.
Preliminary engineering is considered complete when FTA has issued
a Record of Decision (ROD) or Finding of No Significant Impact (FONSI),
as required by NEPA.
Proposed projects that have completed preliminary engineering must
request FTA approval to enter the final design phase of development.
The request must provide information that demonstrates to FTA the
technical capability and financial capacity of the local project
sponsor to advance the project into final design. Like the approval to
enter into preliminary engineering, this approval is based upon a
review and evaluation of the costs, benefits, and impacts under the
statutory project evaluation criteria. Final design is the last phase
of project development, and includes right-of-way acquisition, utility
relocation, and the preparation of final construction plans (including
construction management plans), detailed specifications, construction
cost estimates, and bid documents. Final design is typically eligible
for 49 U.S.C. 5309 new start funds.
Comment. In the NPRM to this rule, FTA asked for public comment on
the relationship between the alternatives analysis requirement and the
planning and project development processes. A total of nine comments
addressed this issue. Two respondents, a transit industry trade
association and a large transit operator, objected to the fact that an
alternatives analysis is required for transit new starts, but not for
highway projects. Another transit operator objected to alternatives
analysis as ``outside'' of the ``normal'' corridor study process,
topheavy and burdensome, and inconsistent with planning regulations.
Response. It is in fact true that Federal highway programs do not
require an analysis of alternatives in the same manner as the new
starts program. However, this is a fact of law, not Departmental
policy. The new starts program is a discretionary funding program;
alternatives analyses are required to develop information for
decisionmaking purposes. Conversely, the Federal highway program is a
formula program; no Federal decisionmaking is required. Neither FTA nor
DOT are at liberty to remove the requirement for alternatives analysis
from the new starts program, or to impose a similar requirement on the
Federal highway program. To do so would require a change in the law by
Congress. As for the perceived inconsistency with planning regulations,
the joint FTA/FHWA planning regulations are designed to be consistent
for both agencies' major capital investment programs; they neither
require FHWA-funded projects to undergo alternatives analysis, nor
prevent FTA-funded new starts from meeting the statutory requirement
that an alternatives analysis be conducted.
Comment. One transit operator commented that the issuance of this
rule should be delayed until the revisions required by TEA-21 to the
FTA/FHWA planning and project development regulations have been issued.
Response. This rule applies only to FTA's own evaluations of
proposed new starts, which does not feed into the planning process;
rather, FTA's new starts evaluations rely upon the data and information
derived from the planning process. Therefore, FTA is not persuaded that
formal implementation of the TEA-21 new starts provisions should be
delayed further. Should the final planning rule require changes to the
new starts project development process, however, this rule will be
amended accordingly.
Comment. Two commenters expressed confusion regarding the
``demise'' of the Major Investment Study (MIS), and requested
clarification.
Response. Section 1308 of TEA-21 eliminated the separate
requirement for an MIS and integrated its basic concepts into the joint
planning and
[[Page 76870]]
environmental regulations issued by FTA and FHWA (23 CFR parts 450 and
771). Existing MIS activities will still satisfy the requirement for an
alternatives analysis, and project sponsors who wish to follow the
principles of the multimodal MIS to conduct new alternatives analyses
are encouraged to do so. The joint planning and environmental
regulations will more fully describe how the MIS concepts will be
integrated into the process.
Comment. The NPRM noted that FTA does not support the use of
section 5309 new starts funds for initial planning activities, given
the demands placed on the program and the availability of funds from
other FTA programs for this purpose, and stated that FTA would consider
this when evaluating local financial commitment. Six comments were
received on this issue. Four commenters objected to what they viewed as
``penalizing'' project sponsors for using new starts funds for planning
activities relating to proposed new starts projects; one commenter
asked for clarification as to whether such projects would be penalized;
and one (a transit operator) supported limiting the use of new starts
funds for planning. One transit operator, citing the statutory 8
percent limit on program funding for activities other than final design
and construction, noted that Congress ``clearly intended'' for section
5309 funds to be used for alternatives analysis and preliminary
engineering. A local government entity claimed that there was no
``statutory basis'' for including the use of section 5309 funds for
planning purposes as part of the project evaluation process, and noted
that it would be inappropriate to ``penalize'' projects that Congress
saw fit to earmark. This same commenter suggested measuring such uses
of funds against the 8% limit established in TEA-21.
Response. The Final Rule retains the principle that FTA will
consider the degree to which initial planning activities are conducted
without funding from section 5309 as part of our evaluation of the
local financial commitment. This is not intended as a ``penalty'' for
project sponsors who seek and secure Congressional earmarks for these
activities. Rather, it is intended to give a degree of recognition to
the efforts of sponsors who make use of existing sources of Federal,
State, and local planning funds, such as those noted above. Further,
making such considerations is consistent with Congressional direction.
The conference report to the FY 1999 appropriations act instructed FTA
to consider the extent to which new starts project sponsors make use of
the appreciable increases in formula funding for alternatives analysis
and preliminary engineering, when evaluating the local financial
commitment of proposed new starts.
Comment. Twelve comments addressed the issue of the statutory
requirement for FTA approval to advance into preliminary engineering
and final design. Most expressed some degree of discomfort with the
notion of such approvals, and noted a need for more guidance and better
definitions of the stages of project development and the development
process itself. The strongest objection was expressed by a transit
operator who asserted the project development process is separate and
distinct from the evaluation process, and that proposed new starts
projects should therefore simply be permitted to proceed without FTA
approval.
Response. In most cases, the ``newness'' of this approval
requirement seems to be responsible for much of the confusion. The
requirement for FTA approval to enter final design was added to the new
starts program by TEA-21; this rule simply implements that requirement.
FTA is not at liberty to change the law through this or any other
rulemaking process. FTA approval has long been required to enter into
preliminary engineering, though the role of the project ratings process
was not as large.
Comment. Four of those commenting on the approval requirement,
including a transit industry trade association, requested clarification
of what is required to fulfill the requirements for completion of the
various stages of development.
Response. The language concerning alternatives analysis,
preliminary engineering, and final design has been revised in both the
text of this rule and the preamble to better describe these activities.
In addition, FTA issued guidance in September 1999 which clarifies the
project development and approval process.
Comment. The industry trade association also suggested that local
financial commitment not be considered for approval to enter the next
stage, a comment echoed by a transit operator. Another transit operator
and the trade association suggested that different requirements be
established for approval to enter preliminary engineering than for
final design. The apparent fear is that worthy projects may be denied
approval to enter preliminary engineering simply because adequate
information on costs and benefits is not available with a high level of
certainty so early in the development process.
Response. Section 5309(e)(6) clearly states that FTA may only
approve the advancement of a proposed project to the next stage of
development if it meets the statutory project evaluation criteria, and
is likely to continue to do so. However, FTA recognizes that the level
of information available and the degree of certainty varies according
to the stage of project development; the earlier in the process a
proposed project is, the less certain the forecasts and estimates. For
this reason, FTA sets different standards for high, medium, and low
ratings for preliminary engineering than for final design; the further
a proposed project is in the process, the higher the standard. In the
case of local financial commitment, for example, it may be sufficient
to simply demonstrate a reasonable financial plan that identifies
proposed sources of local funds needed to construct the project (i.e.,
to show that the sponsors have considered how they intend to pay for
it) when seeking approval to enter preliminary engineering. It is not
reasonable to expect ballot measures to have passed and funds to have
been programmed at this stage. However, by the time a proposed project
is ready to enter final design, most or all of the local funds should
be committed, including provisions for cost overruns. It has been a
longstanding FTA practice in the management of the new starts program
and the project evaluation process to make such distinctions among the
stages of project development; this practice has been discussed in the
Annual Report on New Starts and its predecessor, the annual Report on
Funding Levels and Allocations of Funds, since the May 1991 edition.
Further, FTA cannot assign project ratings during alternatives
analysis, as there is essentially no project to evaluate until the
locally-preferred alternative is selected. Project sponsors need not
worry that they will ``fail'' the evaluation process simply because
their proposed project is still in the early development stages.
Comment. The trade association and three other commenters also
requested language clarifying that projects already in preliminary
engineering at the time the final rule is issued have met the
requirement for alternatives analysis, as have prior Major Investment
Studies (MISs).
Response. This rule in no way revokes prior FTA approvals for
preliminary engineering (or final design). Language to this effect has
been added to Sec. 611.7, Relation to planning and project development
processes.
[[Page 76871]]
Comment. One commenter requested a regulation to define ``major
investment studies.''
Response. The discussion of alternatives analysis earlier in the
preamble to this rule has been revised to better address this issue.
The pending joint FTA/FHWA planning and environmental regulations will
more fully describe the integration of the MIS into the planning and
environmental process under TEA-21.
E. Section 611.9: Project Justification Criteria
Section 5309(e)(1)(B) requires the Secretary to determine that a
proposed new starts project is justified based on a comprehensive
review of its mobility improvements, environmental benefits, cost
effectiveness, and operating efficiencies. To make this determination,
FTA will evaluate information developed through the planning and
project development processes. The method used to make these
determinations is a multiple measure approach in which the merits of
candidate projects will be evaluated against a set of measures. The
ratings for each measure will be updated annually for purposes of the
annual report on funding levels and allocations of funds required by
section 5309(o)(1), the supplemental report required by section
5309(o)(2), and as required for FTA approvals to enter into preliminary
engineering, final design, or FFGAs. As a candidate project proceeds
through the stages of the project development process, a greater degree
of certainty is expected with respect to these measures. Measures have
been established for each of the following criteria:
1. Mobility improvements;
2. Environmental benefits;
3. Operating efficiencies;
4. Transportation System User Benefits (Cost Effectiveness);
5. Existing land use, transit supportive land use policies, and
future patterns; and
6. Other factors, including:
(a) The degree to which the policies and programs (e.g., parking
policies, etc.) are in place as assumed in the forecasts;
(b) Project management capability; and
(c) Additional factors relevant to local and national priorities
and relevant to the success of the project.
For each proposed project, FTA will assign one of five descriptive
ratings (``high,'' ``medium-high,'' ``medium,'' ``low-medium,'' or
``low'') for each of the first five criteria; information on ``other
factors'' will be reported as appropriate.
The measures for the project evaluation criteria are described in
Appendix A to this rule. FTA may amend or modify these measures in
response to the results of ongoing research into methods for evaluating
the benefits of transit investments.
Comment. In the NPRM for this Rule, FTA proposed that in all cases,
the proposed new start would be evaluated against both a no-build and
Transportation System Management (TSM) alternative. The retention of
the TSM was the subject of substantial comment in response to the NPRM.
A total of 13 comments were submitted on this issue, all of them
opposed. Most of the commenters felt that it was unnecessarily
burdensome to maintain a TSM alternative for what they viewed as solely
FTA's purposes, noting that certain incremental system improvements
will occur whether the new start is constructed or not; i.e., it is no
longer appropriate to view the no-build alternative as a ``do nothing''
scenario. The most common suggestion was that, if the TSM requirement
is retained, it should be dropped after alternatives analysis has
resulted in the selection of a locally-preferred alternative.
Response. FTA accepts the argument that it is no longer appropriate
to assume that a no-build alternative presents a ``do nothing''
scenario. The realities of modern urban and suburban planning,
transportation, and economic development make it virtually impossible
to assume that no improvements will occur if a proposed new start is
not implemented. At the same time, however, a consistent baseline is
needed to ensure a fair evaluation of proposed new starts projects
nationwide. The TSM alternative has served well in this regard.
In response to comments submitted on this issue and in recognition
of the desire to simplify the new starts process, this Rule eliminates
the requirement for separate no-build and TSM alternatives, and instead
requires that the proposed new start be evaluated against a single
``baseline alternative.'' The baseline alternative is best described as
transit improvements lower in cost than the proposed new start, which
result in a better ratio of measures of transit mobility compared to
cost than the no build alternative; the ``best you can do'' without the
new start investment. The purpose of the baseline comparison is to
isolate the costs and benefits of the proposed major transit
investment. At a minimum, the baseline alternative must include in the
project corridor all reasonable cost-effective transit improvements
short of investment in the new start project.
Depending on the circumstances and through prior agreement with
FTA, the baseline alternative can be defined appropriately in one of
three ways. First, where the adopted financially constrained regional
transportation plan includes within the corridor all reasonable cost-
effective transit improvements short of the new start project, a the
no-build alternative that includes those improvements may serve as the
baseline. Second, where additional cost-effective transit improvements
can be made beyond those provided by the adopted plan, the baseline
will incorporate those cost-effective transit improvements as well.
Third, where the proposed new start project is part of a multimodal
alternative that includes major highway components, the baseline
alternative will be the preferred multimodal alternative without the
new start project and associated transit services. Prior to submittal
of a request to enter preliminary engineering for the new start
project, grantees must obtain FTA approval of the definition of the
baseline alternative.
Consistent with the requirement that differences between the new
start project and the baseline alternative measure only the benefits
and costs of the project itself, planning factors external to the new
start project and its supporting bus service must be the same for both
the baseline and new start project alternatives. Consequently, the
highway and transit networks defined for the analysis must be the same
outside the corridor for which the new start project is proposed.
Further, policies affecting travel demand and travel costs, such as
land use, transit fares and parking costs, must be applied consistently
to both the baseline alternative and the new start project alternative.
The Final Rule has been rewritten to substitute ``baseline
alternative'' wherever ``no-build and TSM alternatives'' appeared in
the NPRM, and a definition for ``baseline alternative'' has been added.
``Existing land use, transit supportive land use policies, and
future patterns'' is not listed among the project justification
criteria contained in 49 U.S.C. 5309(e)(1)(B), but is listed as one of
the ``considerations'' under 49 U.S.C. 5309(e)(3) that FTA must take
into account when determining a proposed project's ``justification.''
Consistent with past practice, we have included land use among the
project justification
[[Page 76872]]
criteria for a number of reasons. Transit-supportive land use, whether
it is a factor of existing patterns, existing local policies, or
planned future development which targets development around the
Federally-assisted project, has been an important indicator of future
project success. Additionally, TEA-21 added two new land-use-related
considerations to the project evaluation process: The reduction in
local infrastructure costs achieved through compact land use
development (49 U.S.C. 5309(e)(3)(B)), and the cost of suburban sprawl
(49 U.S.C. 5309(e)(3)(C)). This appears to be a clear intent by
Congress to give additional attention to this issue. The NPRM for this
Rule labeled the land use criteria as ``transit supportive existing
land use policies and future patterns.'' This has been changed to
``existing land use, transit supportive land use plans, and future
patterns'' in this Rule, to more accurately reflect FTA's practices in
evaluating land use issues relating to proposed new starts. The
underlying factors described in paragraph (e) of Appendix A to this
rule have been revised in response to this change.
In making the determination of project justification, 49 U.S.C.
5309(e)(3) requires the FTA to consider a variety of factors, as
follows:
1. The direct and indirect costs of relevant alternatives;
2. Factors such as congestion relief, improved mobility, air
pollution, noise pollution, energy consumption, and all associated
ancillary and mitigation costs necessary to carry out each alternative
analyzed;
3. Existing land use, mass transportation-supportive land use
policies, future patterns, and the cost of suburban sprawl;
4. The degree to which the project increases the mobility of the
mass transportation dependent population or promotes economic
development;
5. Population density and current transit ridership in the
corridor;
6. The technical capability of the grant recipient to construct the
project;
7. Differences in local land, construction, and operating costs;
and
8. Other factors that the Secretary determines appropriate.
This represents a modest expansion of the ``considerations''
established by ISTEA. Specifically, section 3009(e) of TEA-21 added the
consideration for the cost of suburban sprawl noted in (3) above; for
population density and current transit ridership in the corridor in (5)
above; and for the technical capacity of the grantee to carry out the
proposed project in (6) above. The ``considerations'' serve to
illustrate the project justification criteria, providing further detail
on specific information that should be collected and how the criteria
should be evaluated. Much of the data required to consider these
factors is already developed as part of the existing planning and
project development processes, however, as required under 23 CFR part
450 and 23 CFR part 771. FTA believes these considerations are already
adequately addressed by the current project justification criteria and
measures.
When evaluating proposed new starts projects, FTA will apply these
criteria to the project as proposed for Federal funding under 49 U.S.C.
section 5309. This means that if local project sponsors are seeking new
starts funding at this time for a segment of a larger planned transit
investment, only that specific segment will be evaluated.
Comment. FTA received 24 comments relating to the criteria for
mobility improvements. Of these, 15 addressed the issue of mobility for
low-income households. Ten commenters recommended revising the low-
income mobility measure to include destinations, such as employment
areas, within \1/2\-mile of boarding points, in addition to the
existing measure for households. Two commenters recommended expanding
the low-income household measure to include other populations that tend
towards transit-dependence, such as senior citizens, students, and
persons with disabilities. One recommended accounting for discretionary
riders, and another suggested eliminating the measure for low-income
mobility, perceiving that it perpetuated an image of transit as a
carrier of poor people that persons of middle-class status would not
want to ride. One commenter suggested that low-income mobility be
separated from the measure for mobility improvements.
Other comments on this measure included two recommendations to
incorporate a consideration for congestion, two requests to incorporate
a measure for delays and ``incidents'' on the transit system, various
calls for ``better measures,'' and recommendations that different
measures be applied to different modes of transit (i.e., light rail
versus commuter rail).
Response. FTA recognizes that a system that is located near low-
income households is of little use to residents unless it can also
provide access to employment centers and other activity centers.
Therefore, a factor for destinations within a \1/2\-mile radius of new
stations has been added to the measure for mobility improvements.
FTA is required by section 5309(e)(3)(D) to ``consider the degree
to which the (proposed) project increases the mobility of the mass
transportation dependent population, or promotes economic
development.'' For a variety of reasons, low-income households were
chosen as a surrogate for measuring the transit dependent population.
Chief among these is the fact that transit dependence is often a factor
of income. Many people rely on transit service for basic mobility--some
by necessity, and some by economic choice; many residents of upscale
central city neighborhoods simply choose not to own an automobile.
There is value in considering all of these people in the measure for
basic mobility; however, were transit service suddenly eliminated,
those riders with an economic choice would find other alternatives
available to them. Further, many of those riders who ride transit by
choice do so because it permits them to bypass congestion on highways
and city streets. These benefits would already be accounted for in the
measure for travel time savings. The focus on low income households
provides a clearer--though still imperfect--assessment of how well the
proposed project would serve those who do not have the ability to
choose; i.e., the mass transit dependent population specified in the
statute.
The comments calling for better measures to assess the mobility
improvements of a proposed project are well taken; unfortunately, no
recommendations for new measures or methodologies accompanied those
comments. FTA is as interested as the transit industry in advancing the
state of the art of transit planning, and is conducting research into
better ways to measure the various benefits of transit service,
particularly high-quality rail systems. Beginning on September 1, 2001,
this Rule employs a revised measure of travel benefits based on a
multimodal measure of perceived travel times faced by all users of the
transportation system. As new measures and methods become available,
FTA may amend or modify this rule.
Comment. Ten comments were received on the criterion for
environmental benefits; no two were alike. One interest group suggested
that impacts on areas where energy is generated (i.e., the location of
a remote generating plant) be incorporated into the evaluation, and
that energy comparisons be made on a passenger-mile basis. One transit
operator recommended incorporating ``non-scientific `quality of life
''' factors. Two interest groups objected to the use of BTUs, with one
suggesting the use of
[[Page 76873]]
vehicle miles traveled (VMT) instead and the other suggesting that if
it is retained, the measure should be limited to non-renewable energy
sources and should include energy used in construction. Two commented
that greater weight should be given to proposed projects in
nonattainment areas, and one individual commenter recommended that
other benefits should be included, such as reduced parking demand which
would reduce parking lot runoff. One local government recommended that
the evaluation consider wetlands and endangered species habitats.
Response. It should be noted that this evaluation does not
represent the only relationship between the new starts process and
environmental considerations. All proposed new starts projects must
meet NEPA requirements as a condition of eligibility for funding. Thus,
factors such as runoff, wetlands, and the habitat of endangered species
are already considered. In addition, EPA classifications for
attainment/nonattainment are also considered as part of the evaluation
of environmental benefits for all proposed new starts projects.
To the extent that ``greater weight'' can be given to proposed
projects in nonattainment areas, 49 USC 5309(e)(8)(B) provides
expedited procedures for FTA decisionmaking and prohibits any
limitations on the simultaneous evaluation of proposed projects in at
least two corridors in such cases. This is reflected in paragraph (c)
under Sec. 611.3 of this rule. It should be noted that previously,
these projects were also exempt from evaluation under the new starts
criteria; this provision was among those eliminated by TEA-21.
Quality of life issues, to the extent that they can be identified
and defined for individual projects, are more appropriately addressed
in the ``other factors'' criteria than as part of the measures for
environmental benefits.
BTUs were chosen as the measure for reporting energy consumption
because they represent a universal and universally-accepted measure of
energy. While it may be possible to evaluate changes in energy
consumption in terms of gallons of gasoline, gallons of diesel fuel,
barrels of crude oil, kilowatt-hours of electricity, or tons of coal, a
universal measure is needed to compare these energy sources to each
other and to evaluate the benefits of one project in comparison to
others.
Comment. Three comments were submitted on the measures for
evaluating operating efficiencies. One operator of a major northeastern
transit system commented that the change in operating cost per
passenger mile would give high marks for crowding and penalize proposed
projects that would mitigate crowding, a topic that was raised by
others in comments relating to the measure for cost effectiveness. One
interest group recommended no changes to the measure, but suggested
that the TSM alternative be dropped after entry into preliminary
engineering and proposed language for incorporation into the rule. One
individual commenter opined that cost per passenger mile is easily
manipulated, costs vary across the country, and recommended the
establishment of thresholds for number of peak and off-peak passengers,
with a pass/fail rating.
Response. Concerns regarding the ``ease'' with which information
for this measure might be ``manipulated'' are noted, but they are
ultimately not relevant to the process. Project sponsors are required
to certify to FTA that the information submitted under the project
evaluation criteria is developed in compliance with FTA's technical
guidance. Any attempt at manipulation of data would likely be
discovered during the evaluation and approval process. This measure is
but one of the many criteria under which proposed new starts are
evaluated, and will not by itself ``make or break'' a project. The
other comments are addressed elsewhere in the preamble to this rule.
Comment. FTA received a total of 32 comments on the measure for
cost effectiveness. The NPRM for this rule solicited comment on the
retention of FTA's historical ``cost per new rider'' (or more properly,
incremental cost per incremental rider) measure to indicate cost
effectiveness, and asked if there were other measurements. Twenty-three
comments were submitted in response this request. An additional nine
commenters addressed this issue as part of their general comments on
the NPRM. All were unanimous in their assertion that the cost
effectiveness measure should ``roll up'' additional benefits beyond
incremental cost per incremental rider. The consensus was that focusing
on new riders alone ignores benefits to other riders, and thus biases
the measure against older cities with ``mature'' transit systems where
the focus of a proposed new start would be on improving service, not
attracting new riders. Most recommended a measure based on ``cost per
benefiting rider'' or simply ``cost per rider.'' The most common
examples of benefits given in comments were reductions in crowding and
travel time savings. A trade group representing the transit industry
recommended the formation of a committee to study the issues. One
transit operator recommended a ``full-cost accounting approach''
incorporating the full range of societal impacts, including local
policy decisions on land use and parking; another operator recommended
a measure based on transit system throughput. Others recommended
including cost per new trip, new riders attracted to the existing
system by the new start, total annualized cost per rider, travel time
savings, and accounting for the conversion of multimodal trips to
transit trips, and single-occupant vehicle (SOV) trips to multimodal
trips.
Response. It is important to note that the measure for cost
effectiveness is not intended to be a single, stand-alone indicator of
the merits of a proposed new starts project. It is but one part of the
multiple measure method that FTA uses to evaluate project justification
under the statutory criteria. While cost effectiveness is an important
consideration, so are mobility improvements, environmental benefits,
and the other factors described both in TEA-21 and elsewhere in this
rule.
However, FTA is aware that the cost effectiveness measure is often
interpreted by project sponsors, State and local decisionmakers, and
even elsewhere within the Executive and Legislative branches of the
Federal government as ``the'' measure that will ``make or break'' a
proposed new start. In light of this, and in response to the unanimous
call by commenters for a ``better'' measure of cost effectiveness, FTA
has developed a measure of ``transportation system user benefits'' to
more accurately address the criteria for cost effectiveness. In simple
terms, the basic goal of any major transportation investment is to
reduce the amount of travel time and out-of-pocket costs that people
incur for taking a trip; the cost of mobility. The new Transportation
System User Benefits measure of cost effectiveness measures the change
in these costs, and accounts for changes to transit, highway, and other
modes of travel.
This new cost effectiveness measure replaces the current ``dollars
per new rider'' figure that can be--and often is--perceived as
``subsidy per new rider.'' This approach de-emphasizes new riders and
measures not only the benefits to people who change modes, but also
accounts for benefits within modes (i.e., benefits to existing riders
and highway users).
The Transportation System User Benefits measure is not new to FTA
or to the new starts project evaluation process. A similar combination
of cost
[[Page 76874]]
and travel time savings for new and existing riders was identified as a
measure for cost effectiveness in the 1984 Statement of Policy on Urban
Mass Transportation Major Capital Investments.
User benefits are a good measure of the effectiveness of a major
transit investment; however, the Transportation System User Benefits
measure should not be interpreted as a single measure of all of the
expected benefits of a new starts project. Those in search of a single
measure that ``rolls up'' the overall benefits expected of a proposed
new start should direct their attention towards the overall rating for
project justification; the Transportation System User Benefits measure
of cost effectiveness is but a single component.
This rule has been revised to reflect this new approach. In
addition, FTA will publish guidance describing how project sponsors
should calculate and report the new cost effectiveness measure for
evaluation purposes. The new Transportation System User Benefits
measure of cost effectiveness will be phased in over time, becoming
effective on September 1, 2001.
Comment. FTA received a total of 19 comments relating to the land
use criterion. In general, the comments reflected a general concern
over how land use will be measured and used as a factor for project
evaluation.
While there was no clear pattern to the comments, a number of
recurring themes were apparent. One of these themes was
``flexibility.'' A transit industry trade association and a new starts
interest group supported the measure in general, but noted that its
application should be flexible enough to account for regional
differences, and that guidance would be essential; one recommended that
FTA undertake a study of the ``cost of sprawl'' and suggested
alternative language for the final rule. One transit operator submitted
comments in support of the trade association.
The second theme that arose from the comments concerned the
application of the land use measure. Five commenters expressed
confusion or concern over a perceived vagueness of the land use
criterion, terming it ``nebulous,'' ``vague'' and ``ambiguous.'' Two
commenters noted that land use issues would already be captured by
other project justification measures or through the modeling process,
and two others expressed concerns over a perceived reporting burden.
Two more commented that land use would vary greatly by alternative and
alignment. One transit operator in a major northeastern city and one
commenter at the Oakland, CA workshop expressed concern that the
measure for land use would bias the new starts process in favor of
suburban projects. One transit operator in a southwestern city that
does not have zoning ordinances recommended incorporating a
consideration for voluntary actions by the community to coordinate
station area development, and objected to the elevation of land use
considerations to the ``status'' of the other statutory criteria. An
operator in another southwestern city in the same State commented that
ratings should be based only on factors over which transit operators
have control, and noted that similar evaluation criteria should be
applied to FHWA funds. In contrast, a council of governments from a
city in the Pacific Northwest recommended that FTA give significant
weight to regions with a history of containing sprawl.
The final common theme among some of the commenters was to question
the connection between land use and transportation planning. One
commenter noted that the criterion assumes coordination between
transportation and planning, and two questioned or flatly rejected any
correlation between transportation and land use.
Response. This rule does not represent a substantial change from
existing FTA policy or practice. Even prior to TEA-21, FTA included
land use among the primary evaluation criteria. As noted earlier in
this preamble, while land use is not one of the project justification
criteria specified in Federal transit law, it is included among the
factors that FTA is to consider when applying those criteria.
Additionally, TEA-21 added two new land use considerations to the
evaluation process; a clear intent by Congress to give additional
attention to this issue. Contrary to those comments that questioned the
link between transportation and land use, FTA has found that transit
supportive local land use policies have been an important indicator of
the future success of Federally-assisted new starts projects.
In response to the comment that highway projects should be subject
to a similar evaluation of land use, FTA is tempted to agree. However,
as noted in response to a similar comment on the alternatives analysis
requirement, highway projects are funded under a formula program and
are not subject to the same evaluation process as transit new starts,
which are funded under a discretionary program, and FTA is not at
liberty to change the law or otherwise impose such a requirement.
Finally, in terms of flexibility in the application of the land use
criteria, FTA finds that the existing process, which will continue
under this rule, offers an acceptable balance between the need for
comparability among proposed projects and the desire to permit project
sponsors in each region to highlight their own successes in linking
transit and land use planning. This can and often does include
privately-sponsored transit-oriented development. A new starts
investment requires a regional commitment by a variety of State and
local agencies, as well as the community at large; those who have a
stake in the financing and construction of a new start also have a
stake in its ultimate success. Thus, it is not unreasonable to expect
the same degree of commitment to regional planning as to project
funding.
Reflecting that same concept of local commitment, this Rule also
incorporates an element for pedestrian mobility into the land use
measure. Pedestrian mobility has been a component of FTA's land use
evaluation, as described in guidance issued each year at the beginning
of the data collection process. This Rule formalizes that approach.
Pedestrian facilities represent the basic, common link among all modes
of transportation; therefore, a regional emphasis on pedestrian
facilities and systems as part of land use planning will enhance the
mobility of the population and the utility of the planned transit
investment. Language has been added to appendix A of this Rule to
specify that the land use measure will include consideration of
existing and planned pedestrian facilities, which are expected to
reflect curb ramp transition plans and milestones as required under 28
CFR 35.150(d)(2).
F. Section 611.11: Local Financial Commitment
Section 5309(e)(1)(C) requires that proposed projects also be
supported by an acceptable degree of local financial commitment,
including evidence of stable and dependable financing sources to
construct, maintain and operate the system or extension. This proposed
rule retains the following measures for evaluation of the local
financial commitment to a proposed project:
1. The proposed share of total project costs from sources other
than the section 5309 new starts program, including Federal formula and
flexible funds, the local match required by Federal law, any additional
capital funding (``overmatch''), and the degree to which initial
planning activities have
[[Page 76875]]
been carried out without relying on funds from Sec. 5309.
Comment. Three commenters expressed confusion over whether ``non-
5309 funds'' included only local funds, or whether other Federal funds
would be counted as part of ``local'' funding.
Response. Paragraph (a) under the heading, ``Local Financial
Commitment'' in Appendix A to this rule has been revised to specify
that the proposed local share of project costs is defined as the
percentage of capital costs to be met using funds from sources other
than the new starts program under 49 U.S.C. 5309. Thus, the use of
flexible funds from other Federal sources will not be considered as
part of the ``Federal share'' for purposes of evaluation under this
Rule (though for purposes of funding eligibility the statutory ratio of
at least 20 percent local funding must still be met using other than
Federal funds).
2. The stability and reliability of the proposed capital financing
plan (rated ``high,'' ``medium-high,'' ``medium,'' ``low-medium,'' or
``low'').
3. The stability and reliability of the sponsoring agency to fund
the operating needs of the entire transit system as planned once the
guideway project is built. Ratings of ``high,'' ``medium-high,''
``medium,'' ``low-medium,'' or ``low'' will be used to describe
stability and reliability of operating revenue.
The measures for these criteria are carried over intact from those
used previously, and are more fully explained in Appendix A. The only
changes are that ``overmatch'' was added as a statutory consideration
by TEA-21, and an acknowledgement was added that FTA will consider
whether adequate provisions have been made to fund the capital needs of
the entire transit system as planned, including key station plans and
milestones as required by the Americans with Disabilities Act.
Comment. Eleven commenters expressed varying opinions and made
numerous recommendations on the local financial commitment criteria,
but no clear theme emerged. A transit industry trade group urged FTA to
consider not only the strength of the funding plan, but also the degree
of commitment, the level of policy commitment to the project and funds
already secured, and recommended addressing the level of commitment to
the overall capital program. One transit operator from the mid-Atlantic
region expressed support for the trade association's position. An
industry interest group requested more detailed, prescriptive
requirements. One State DOT that is also a Statewide transit operator
wrote in support of their trust-fund-supported Statewide intermodal
system, and stated that projects in such States should not be judged
inferior to those that rely on project-specific ballot measures.
Response. The existing project evaluation and rating process,
already accounts for factors such as the strength of the local
commitment, the level of policy commitment to the proposed project, the
level of commitment to the overall capital program. This practice would
continue under this rule. Contrary to the comment implying that
Statewide trust funds would be judged ``inferior'' to other financing
plans, such dedicated funding sources offer a distinct advantage in the
rating process. It should be noted, however, that the mere existence of
a dedicated Statewide funding source is not sufficient to achieve a
high rating; as a project proceeds through preliminary engineering and
final design, evidence that sufficient funds have been committed and
programmed to the project will also be required. The comment that this
Rule is not prescriptive enough is puzzling; Federal agencies are more
often criticized for being too prescriptive and inflexible. This Rule
is intended to strike a balance between the need to apply a consistent
standard, and the need to allow for the differences inherent in
locally-derived projects.
G. Section 611.13: Overall Project Ratings
Perhaps the most significant change to this process brought by TEA-
21 is the requirement that FTA establish summary recommendations for
each project, in addition to the ratings for each of the project
justification criteria. Section 5309(e)(6) requires FTA to ``evaluate
and rate (each) project as `highly recommended,' `recommended,' or `not
recommended,' '' based on the results of the project evaluation
process. It also requires that ratings be assigned to each of the
individual evaluation criteria.
FTA will combine the ratings for each of the financial rating
factors and project justification criteria into overall ``finance'' and
``justification'' ratings of ``high,'' ``medium-high,'' ``medium,''
``low-medium,'' or ``low.'' These ratings will then be combined into
the single, overall project ratings required by TEA-21. For a proposed
project to be rated as ``recommended,'' it must be rated at least
``medium'' in terms of both finance and justification. To be ``highly
recommended,'' a proposed project must be rated at least ``medium-
high'' for both finance and justification. Proposed projects not rated
at least ``medium'' in both finance and justification will be rated as
``not recommended.'' These ratings will be used both to approve entry
into preliminary engineering and final design, as input to recommend
proposed projects for Federal funding commitments, and for purposes of
the Annual and Supplemental Reports on New Starts under section
5309(o)(1) and (2). A proposed project must receive a rating of at
least ``recommended'' in order to be approved for any of these
purposes.
Comment. A total of 14 comments addressed the overall project
ratings. Virtually all of them expressed discomfort with the terms,
particularly the term, ``not recommended.'' The most common concern was
that a meritorious project would be rated ``not recommended'' simply
because it had not been sufficiently developed to be rated. Nine
commenters suggested renaming the ``not recommended'' rating or
creating a separate rating such as ``not ready for recommendation,''
``not rated,'' ``not ready,'' ``incomplete,'' or ``not currently
recommended.'' One commenter at the Washington, DC workshop noted that
proposed projects that ``fail'' should be provided with information
explaining the rationale for the ratings. There was also substantial
discussion at all three workshops concerning the permanence of the
ratings, opportunities to change ratings, and so forth.
Response. The terms used for the overall project ratings--``highly
recommended,'' ``recommended'' and ``not recommended'' `` are
established in law by TEA-21, and FTA is not at liberty to change them.
We can, however, elaborate. While the names used for the overall
ratings will continue to be given as ``highly recommended,''
``recommended'' and ``not recommended,'' in the case of the ``not
recommended'' rating we will indicate the reason for the rating. In
order to be rated at least ``recommended,'' a proposed new starts
project must be rated at least ``medium'' for both project
justification and local financial commitment. In order to be rated at
least ``medium'' for local financial commitment, a proposed project
must be rated at least ``medium'' in terms of the stability and
reliability of operating funds, and the stability and reliability of
capital funding. When a proposed project is rated ``not recommended,''
FTA will indicate which of these areas requires improvement: ``J'' for
project justification, ``O'' for the operating funding plan, and ``C''
for the capital funding plan. Thus, a proposed new
[[Page 76876]]
start that was found to need improvement in the capital plan would be
rated ``not recommended (C).'' This will provide project sponsors,
State, local, and Federal decisionmakers, and the public at large with
a simple means to identify the basis for the project rating. In
addition, the Annual and Supplemental Reports on New Starts, as well as
all project-specific FTA correspondence, will contain language that
discusses the reasoning behind the rating and note that all ratings are
subject to change.
Comment. Three commenters recommended that the ratings be tied to a
proposed project's stage of development; i.e., different standards for
preliminary engineering and final design.
Response. FTA has historically applied different rating standards
for different stages of project development, recognizing that it is not
possible to expect the same level of detail or degree of certainty for
proposed projects that are in preliminary engineering as for those
nearing the end of final design and contemplating FFGAs. Each edition
of the Annual Report on New Starts contains tables describing the
standards applied for each of the criteria at each stage of
development. This Rule does not change FTA's historical approach.
It is important to note that a rating of ``recommended'' does not
translate directly into a funding recommendation in any given fiscal
year. Rather, the overall project ratings are intended to reflect
overall project merit. Proposed projects that are rated ``recommended''
or ``highly recommended,'' and have been sufficiently developed for
consideration of a Federal funding commitment (i.e., FFGA), will be
eligible for funding recommendations in the Administration's proposed
budget for a given fiscal year.
Comment. A transit industry trade association expressed concern
that proposed projects in the early stages of development would be
rated ``not recommended'' because sufficient information has not been
developed to address the justification criteria, and/or local funding
is not in place. This, they advise, would compromise the future of such
projects. They therefore suggested that the statutory ratings of
``highly recommended,'' ``recommended,'' and ``not recommended'' be
used only in the context of annual funding recommendations to Congress.
Response. The distinction between a rating of ``recommended'' and a
funding recommendation continues to be the subject of much confusion.
The comments submitted by the trade association are most illustrative
of this confusion. They are concerned that projects that are ``not
ready'' to be rated will be unfairly given a ``not recommended'' rating
simply because they are still early in the development process. They
therefore suggest that the overall ratings be used only for purposes of
FTA's annual funding recommendations to Congress, and not as an
indicator of overall merit. Were FTA to adopt this suggestion, however,
it would guarantee that all projects for which FTA did not recommend
funding in the President's budget request would receive a summary
rating of ``not recommended,'' regardless of merit; i.e., it would
actually cause the effect the trade association wishes to avoid, and
would increase, not decrease, the degree of confusion over these
ratings. FTA is convinced that Congress intended for the overall
ratings to be used to denote project merit, and that FTA's practice of
applying different rating standards at different stages of project
development already prevents the difficulties imagined by the trade
association. Further, FTA would like to remind the transit industry,
Federal, State and local decisionmakers, and the public at large that
proposed new starts projects are re-rated at least annually for the
Annual Report on New Starts, as well as at the time approval is sought
for entry into preliminary engineering, final design, and entry into an
FFGA. The overall ratings are not permanent judgements of project
worth.
Comment. One transit operator objected to the statutorily-required
approval to enter preliminary engineering and final design, urging that
proposed projects be permitted to proceed regardless of funding
recommendations. This same operator also objected to the requirement
that proposed projects be rated at least ``medium'' for both finance
and justification, claiming that one category should be sufficient.
Response. This comment also reflects confusion regarding the annual
funding recommendations versus a rating of ``recommended.'' Neither
FTA's project funding recommendations nor annual appropriations
earmarks have any bearing on FTA's approval for a proposed project to
enter the next phase of development. FTA is not persuaded by the
argument that a rating of at least ``medium'' for either justification
or finance is sufficient, and will continue to require both. To do
otherwise would be to suggest that enough money can offset a poorly
justified project, or that the inability of project sponsors to secure
adequate funding would not be a barrier if the proposed project is
``good enough.'' Clearly neither is the case. It takes a worthy project
with a sound local financial commitment to ensure a successful new
start.
VII. Response to Request for Comments on Particular Issues
The NPRM specifically solicited comment on four issues: (1) Should
FTA establish ``threshold'' or ``pass/fail'' values for evaluating each
of the project evaluation criteria, and if so, what values would be
appropriate; (2) Are there other means for measuring cost effectiveness
than the current ``cost per new rider'' measure; (3) How should FTA
evaluate the ``technical capability'' of project sponsors, and what
``other factors'' might be appropriate; and (4) How much relative
attention should be given to each of the criteria in establishing the
overall project ratings. A total of 31 individuals or organizations
submitted comments on one or more of these questions.
Question 1: Threshold Values. Consistent with FTA's 1996 Statement
of Policy and prior practice, this proposed rule does not establish
``threshold'' values for the statutory project justification criteria.
Instead, we rate each project as ``high,'' ``medium-high,'' ``medium,''
``low-medium,'' or ``low'' according to its individual merits under
each of the measures. Should FTA establish ``threshold'' or ``pass/
fail'' values for evaluating each of these criteria? If so, what
thresholds are appropriate for each criterion?
Comment. Of the 16 responses received on this issue, 12 opposed the
establishment of any type of threshold or pass/fail values for the
criteria. One interest group and one local government entity dissented,
supporting such requirements. One transit operator supported
thresholds, but only on the condition that FTA revise the cost
effectiveness measure to account for additional benefits such as travel
time savings. One commenter at the Oakland, CA workshop commented that
any thresholds would have to account for geographic differences. One
operator noted that if thresholds are deemed necessary, they should be
based on the mean or lowest value for prior ``recommended'' projects,
or ranges should be established.
Response. This rule does not establish threshold values for rating
purposes.
Question 2: Cost Effectiveness. FTA has historically relied on the
measure of ``cost per new rider'' (more precisely, incremental cost per
incremental rider) to indicate cost effectiveness, an approach retained
in this proposed rule. Are there other means for measuring the cost
effectiveness of a proposed new starts project?
[[Page 76877]]
Comment. The 23 comments that specifically addressed this question
were unanimous in the assertion that the cost effectiveness measure
should ``roll up'' additional benefits beyond incremental cost per
incremental rider. The consensus was that focusing on new riders alone
ignores benefits to other riders, and thus biases the measure against
older cities with ``mature'' transit systems where the focus of a
proposed new start would be on improving service, not attracting new
riders. Most recommended a measure based on ``cost per `benefiting'
rider'' or simply ``cost per rider.'' The most common examples of
benefits given in comments were reductions in crowding and travel time
savings. A trade group representing the interests of the transit
industry recommended the formation of a committee to study the issues.
One transit operator recommended a ``full-cost accounting approach''
incorporating the full range of societal impacts, including local
policy decisions on land use and parking; another operator recommended
a measure based on transit system throughput.
Response. In response to the near-universal call for a new measure
of cost effectiveness, FTA has developed a new Transportation System
User Benefits measure. This measure is described more fully in the
section of the preamble to this rule that discusses comments to the
cost effectiveness measure. It should be repeated, however, that the
Transportation System User Benefits Measure will be used to evaluate
cost effectiveness; the overall measure for project justification
represents the ``roll-up'' of anticipated benefits.
Question 3: Technical Capability/Other Factors. 49 U.S.C.
5309(e)(3) establishes a number of ``factors'' that FTA must consider
when evaluating proposed projects under the justification criteria. In
particular, 49 U.S.C. 5309(e)(3)(F) directs us to ``consider the
technical capability of the grant recipient to construct the project,''
and 49 U.S.C. 5309(e)(3)(H) directs FTA to consider ``other factors''
as ``appropriate.'' How should FTA evaluate the ``technical
capability'' of project sponsors? What ``other factors'' might be
appropriate?
Comment. Of the 18 commenters who responded to this question, 14
recommended that technical capacity be based on factors related to the
project sponsor's experience or ``track record'' with prior new starts,
the strength of the project's management plan, or some combination of
these factors. One interest group and one transit operator noted that
most project sponsors lack the technical expertise to implement a new
start, which is why they hire contractors; one of these commenters
asserted that any technical capacity measure would therefore favor
existing systems with their own technical staff. However, seven
commenters recommended that the experience of contractors, management
teams, and/or other agency resources be considered. Two commenters
recommended an evaluation including sponsors' prior success in
obtaining local funds. One commenter at the Oakland workshop expressed
confusion regarding the difference between a measure for technical
capacity and the triennial review process.
Response. FTA intends to use the technical capacity factor as an
indicator of the ability of the project sponsor(s) to successfully
implement a proposed new start, as well as an indicator of project
``readiness.'' To successfully implement a new starts project, the
project sponsor(s) must meet the same basic legal, financial, and
eligibility requirements for all FTA grants; have an adequate project
management plan in place, and have adequate resources available to
carry out the project management plan. By ``readiness,'' we mean that
there are no outstanding issues that remain to be resolved before a
funding commitment can be considered. Such outstanding issues might
include unresolved environmental or mitigation issues, outstanding
engineering or right-of-way issues, upcoming referenda or board actions
that are crucial to the financing plan, and issues relating to other
basic requirements including Title IV of the Civil Rights Act;
Environmental Justice; key station, fleet accessibility, complimentary
paratransit, and other requirements under the Americans with
Disabilities Act of 1990; and consistency with National Intelligent
Transportation Systems Architecture.
Comment. Six commenters offered suggestions regarding ``other
factors'' that should be considered. Two of these recommended
incorporating a factor for ``smart growth'' or ``livable communities,''
with one further recommending that forecasts used for such a measure be
grounded in MPO forecasts and that ``extra credit'' be given to
projects which support national priorities. One transit industry trade
group recommended that ``other factors'' be open-ended. Other
recommendations included measures for new ridership, ``willingness to
commit funds,'' and advancement of multimodal choice.
Response. Many of the suggestions submitted by commenters to the
NPRM, such as smart growth, livable communities, and ``willingness to
commit funds,'' are already captured in the primary criteria. FTA
intends for the ``other factors'' category to be used as a means of
portraying factors about a proposed project that the other evaluation
criteria do not adequately address. Each new start is unique, each has
its own ``story;'' the ``other factors'' category will permit project
sponsors and FTA to consider elements of the proposed project that may
otherwise be ignored in the evaluation process. FTA has therefore taken
a more ``open-ended'' approach to the use of ``other factors'' in this
Rule, and has not defined specific factors for this category.
Question 4: Relative Attention to Criteria. FTA also seeks comment
on how much relative attention should be given to each of the project
justification criteria (mobility improvements, environmental benefits,
operating efficiencies, cost effectiveness, land use and other factors)
to establish the overall project ratings.
Comment. Of the 16 comments received on this issue, nine supported
some kind of weighting of the criteria in general, but few were
specific as to which should be weighted more or less, or what those
specific weights should be. Two commenters noted that the relative
importance of the criteria should vary over time, either over the
course of project development or as national priorities change. Three
indicated that different weights should apply according to geographic
area or local conditions; the citizens' advisory committee from a
transit operator in a major northeastern city recommended that cost
effectiveness not be considered at all in that city. Only two comments,
one from a State DOT and one from an individual member of the public,
recommended specific weights for specific criteria. Four comments
specifically stated that there should be no weighting at all, with one
major northeastern transit operator stating that the ``weights''
already used by FTA, as reported in a recent GAO report, be
discontinued.
Response. This rule does not establish specific weights for
specific project evaluation criteria.
VIII. Other Comments
Additional comments were submitted to the docket concerning a
variety of issues that are not easily categorized. These included
issues such as concerns regarding definitions of terms used in the
NPRM, to regional concerns, to the relationship with the pending FTA/
FHWA joint planning rule, to objections
[[Page 76878]]
regarding the differences between FTA and FHWA capital programs.
Comment. Four commenters expressed concerns that the FTA new starts
process complicates the design-build or ``turnkey'' approach. Two
additional, related comments recommended that FTA approve FFGAs as
early as possible in final design, or perhaps late in preliminary
engineering.
Response. Nothing in this rule prevents project sponsors from
proceeding with a new start under a design-build approach. No existing
FFGA requirements will be changed or waived to accommodate the design-
build process. FTA will provide guidance to project sponsors to clarify
how the design-build process can be integrated with the new starts
project development process and the FFGA requirements.
Comment. Two transit operators, one large and one small, commented
that the approach proposed in the NPRM biases the process against
``established systems in mature cities,'' calling again for more
emphasis on benefits to existing riders and ``preservation of high
market shares.''
Response. The Transportation System User Benefits measure for cost
effectiveness moves away from the perceived emphasis on new riders and
takes a much broader view of the benefits of transit. In addition,
project sponsors are reminded that the cost effectiveness measure was
not and is not intended as a single indicator of project merit.
Established systems in mature cities may not be able to claim as many
new riders as a brand-new system may expect, for example, but they have
a distinct advantage under the land use criteria.
Comment. One large operator objected to the evaluation of
``segments'' as separate projects, recommending that segments also be
considered in relation to an entire proposed system. Another operator
recommended consideration of how well a proposed new start would
complement other Federal investments.
Response. In many cases, local project sponsors propose an
extensive regional fixed guideway transit system that must be
implemented in phases over time, as Federal, State, and local funding
permits. To ascribe all of the projected benefits of an entire such
system to an initial segment overstates the benefits of that segment
and prevents equitable comparison with other proposed new starts. Taken
to its logical conclusion, it could be argued that measuring the same
systemwide benefits for subsequent segments would double-count those
benefits. FTA will continue to evaluate new starts projects as they
have been proposed to us for funding. This Rule retains the existing
requirement that segments be evaluated as individual projects.
Comment. One interest group claimed that alternatives analyses lack
independence and objectivity, recommending that the process instead
require a vote on options or an independent poll upon circulation of
the Draft Environmental Impact Study (DEIS).
Response. Alternatives analysis is intended to be a means whereby
the local community identifies a transportation problem and evaluates
alternative solutions, eventually selecting one that best meets local
needs--the locally-preferred alternative. It is incumbent upon the
community to ensure that adequate opportunity for public involvement is
provided, and to take advantage of those opportunities to be part of
the process.
Comment. One small transit operator recommended that the final rule
include a schedule of deadlines for approval of proposed projects to
advance, and a list of FTA contacts.
Response. The comment regarding schedules and deadlines for
approval assumes that all proposed new starts projects in TEA-21 will
be implemented, will all be found to be justified and rated as
``recommended'' or higher, and will all proceed at the same rate of
progress. FTA understands the desire by one commenter for a list of FTA
contacts to be published as a part of this rule. However, to do so
would require an amendment to this rule, including issuance of an NPRM
and a minimum 60-day period for public comment, for each change in
personnel. Project sponsors are instead encouraged to contact the
appropriate FTA Regional Office for their area, as follows:
Region 1 (ME, VT, NH, MA, RI, CT): Volpe National
Transportation Systems Center, Kendall Square, 55 Broadway, Suite 920,
Cambridge, MA 02142-1093. Phone 617-494-2055.
Region 2 (NY, NJ): One Bowling Green, Room 429, New York,
NY, 10004-1415. Phone 212-668-2170.
Region 3 (PA, MD, WV, VA, DC): 1760 Market Street, Suite
500, Philadelphia, PA, 19103-4124. Phone 215-656-7100.
Region 4 (KY, TN, NC, SC, GA, FL, AL, MS, PR): Atlanta
Federal Center, 61 Forsyth Street, SW, Suite 17T50, Atlanta, GA, 30303.
Phone 404-562-3500.
Region 5 (MN, WI, MI, IL, IN, OH): 200 West Adams Street,
24th Floor, Suite 2410, Chicago, IL, 60606-5232. Phone 312-353-2789.
Region 6 (NM, TX, OK, AR, LA): Fritz Lanham Federal
Building, 819 Taylor Street, Room 8A36, Fort Worth, TX, 76102. Phone
817-978-0550.
Region 7 (NE, IA, KS, MO): 901 Locust Street, Suite 404,
Kansas City, MO, 64106. Phone 816-329-3920.
Region 8 (MT, ND, SD, WY, UT, CO): Columbine Place, 216
16th Street, Suite 650, Denver, CO, 80202-5120. Phone 303-844-3242.
Region 9 (CA, NV, AZ, HI, AS, GU): 201 Mission Street,
Suite 2210, San Francisco, CA, 94105-1831. Phone 415-744-3133.
Region 10 (WA, OR, ID, AK): Jackson Federal Building, 915
Second Avenue, Suite 3142, Seattle, WA, 98174-1002. Phone 206-220-7954.
Comment. An advisory committee to a large northeastern transit
operator recommended that the criteria account for ``Congressional
funding anomalies.''
Response. ``Congressional funding anomalies,'' such as annual
appropriations for new starts projects that do not follow the amounts
committed under the FFGA for a particular project in a given year, are
only a factor in the case of projects for which FFGAs have already been
issued. The execution of an FFGA represents the conclusion of the
project rating process. Therefore, appropriations shortfalls do not
affect the project rating process. When making annual funding
recommendations for new starts, FTA attempts to adjust its funding
requests to account for prior year shortfalls, but this requires no
changes to the project rating criteria, measures, or process. No change
to this rule has been made in response to this comment.
IX. Regulatory Evaluation
The Federal Transit Administration (FTA) has evaluated the
industry-wide costs and benefits of the rule, Major Capital Investment
Projects, which is required by section 3009(e) of TEA-21. This rule
sets forth the process that FTA will use to evaluate and rate major
capital investments under the statutory criteria in 49 U.S.C. section
5309(e), which requires FTA to establish overall project ratings of
``highly recommended,'' ``recommended,'' or ``not recommended,'' and to
consider new criteria elements. The changes required by TEA-21 to FTA's
pre-existing statutory criteria are relatively minor and affect FTA
program management operations more than a recipient's operations. The
final regulatory evaluation is available for public inspection in the
docket established for this rulemaking.
[[Page 76879]]
X. Regulatory Process Matters
A. Executive Order 12688
The FTA has evaluated the industry costs and benefits of the major
capital investments rule and has determined that it is a significant
rule under E.O. 12688 because of the significant policy issues involved
in federally funding major capital investments. This rule will not,
however, have an impact on the economy of $100 million or more.
FTA estimates the costs associated with this Rule to be minimal.
This Rule implements specific changes required under TEA-21 in the
administration of the new starts program under 49 U.S.C. 5309.
The following tables show the costs associated with this Rule. The
first table indicates the costs associated with the collection,
reporting and analysis of data for the project evaluation and rating
process. These costs are associated with activities that are already
required as part of the new starts project development process; they do
not represent new costs associated with this Rule. Costs are based on
estimates of the number of proposed new starts projects that are
expected to perform each task listed in the table below.
----------------------------------------------------------------------------------------------------------------
New starts data submission, evaluation and Estimated total cost Total project sponsor cost
ratings ----------------------------------------------------------------
------------------------------------------------ Avg. hrs
Task Hours $ per Hours $
----------------------------------------------------------------------------------------------------------------
(A) PE Request................................. 7,590 $632,028 450 6,750 $337,500
(B) Annual New Starts Report................... 8,480 622,416 150 6,000 300,000
(C)Supplemental Report......................... ......... .............. 0 ......... ..............
(D) Final Design Request....................... 2,424 204,221 150 1,800 90,000
(E) FFGA Approval.............................. 370 16,004 50 250 12,500
----------------------------------------------------------------
Subtotal................................... 18,864 1,474,669 ......... 14,800 740,000
----------------------------------------------------------------------------------------------------------------
Note: Difference between Total Cost and Project Sponsor Cost is FTA Cost.
The second table indicates the costs associated with the GPRA data
collection requirements contained in this rule. As these requirements
are new to the new starts process, the associated costs represent
additional costs to FTA and to new starts project sponsors. The
estimated total costs include costs to both FTA and to new starts
project sponsors who enter into FFGAs. The total project sponsor costs
are based on projections that five new FFGAs will be issued per year,
and represents the total of the costs to all five project sponsors
(i.e., the average cost to each project sponsor is expected to be
$1,670,000 / 5, or $334,000).
----------------------------------------------------------------------------------------------------------------
GPRA-FFGA data collection Estimated total cost Total project sponsor cost
----------------------------------------------------------------------------------------------------------------
Avg. hrs
Task Hours $ per Hours $
----------------------------------------------------------------------------------------------------------------
(A) Data Collection Plan....................... 480 $42,336 80 400 $40,000
(B) Before Data Collection..................... 15,200 755,840 3000 15,000 750,000
(C) Documentation of Forecasts................. 880 42,336 160 800 40,000
(D) After Data Collection...................... 15,200 755,840 3000 15,000 750,000
(E) Analysis and Reporting..................... 1,600 101,680 240 1,200 90,000
----------------------------------------------------------------
Subtotal................................... ......... 1,698,032 ......... 32,400 1,670,000
----------------------------------------------------------------------------------------------------------------
Note: Difference between Total Cost and Project Sponsor Cost is FTA Cost.
The third table sums the total costs for both the project
evaluation and rating data collection and analysis process, and the
GPRA data collection and analysis process.
----------------------------------------------------------------------------------------------------------------
All data collection and analysis activities Estimated total cost Total project sponsor cost
----------------------------------------------------------------------------------------------------------------
Avg. hrs
Task Hours $ per Hours $
----------------------------------------------------------------------------------------------------------------
New Starts Data Submission, Evaluation and 18,864 $1,474,669 ......... 14,800 $740,000
Ratings.......................................
GPRA-FFGA Data Collection...................... ......... 1,698,032 ......... 32,400 1,670,000
----------------------------------------------------------------
Total...................................... ......... 3,172,701 ......... 47,200 2,410,000
----------------------------------------------------------------------------------------------------------------
Note:Difference between Total Cost and Project Sponsor Cost is FTA Cost.
B. Departmental Significance
This rule is a ``significant regulation'' as defined by the
Department's Regulatory Policies and Procedures. Because the purpose of
this rule is to establish how the Secretary will rate various major
capital investment projects, it concerns an important departmental
policy and will likely generate a great deal of public interest.
C. Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act, 5 U.S.C.
Sec. 601 et seq., the FTA has evaluated the effects of this rule on
small entities. Based on this evaluation, the FTA hereby certifies that
[[Page 76880]]
this action will not have a significant economic impact on a
substantial number of small entities because this rule concerns only
major capital investments in new fixed-guideway transit systems and
extensions, which are not typically undertaken by small entities.
D. Paperwork Reduction Act
FTA will publish an estimate of the paperwork burden required by
this Rule in the Federal Register, providing a sixty-day period for
interested parties to submit comments on FTA's proposed information
collection methods. Upon completion of the sixty-day period, FTA will
submit its summary of the comments received and any resulting change in
the information collection methods to OMB. Upon submission to OMB, FTA
will provide an additional thirty days to provide comments on FTA's
finalized methods to OMB. Once OMB has reviewed this data for
compliance with the Paperwork Reduction Act, OMB will provide FTA with
a control number authorizing FTA to collect the requested information.
Affected parties will not have to comply with the information
collection requirements of this Rule until FTA publishes the OMB
control number in the Federal Register.
E. Executive Order 13132
This action has been analyzed in accordance with the principles and
criteria contained in Executive Order 13132 and it has been determined
that the proposed rule will not have federalism implications that
impose substantial direct compliance costs on state and local
governments.
F. National Environmental Policy Act
The agency has determined that this proposed rule, if adopted, will
have positive effects on the environment by encouraging the use of mass
transit, which may reduce the use of single occupancy vehicles.
G. Energy Act Implications
This regulation should have a positive effect on energy consumption
because, through the Federal investment mass transit projects, it would
increase the use of mass transit.
H. Unfunded Mandates Reform Act
This rule will not result in the expenditure by State, local, and
tribal governments, in the aggregate, of $100,000,000 or more in any
one year.
List of Subjects in 49 CFR Part 611
Government contracts; Grant programs--Transportation; Mass
transportation
A new part 611 is added to read as follows:
PART 611--MAJOR CAPITAL INVESTMENT PROJECTS
Sec.
611.1 Purpose and contents.
611.3 Applicability.
611.5 Definitions.
611.7 Relation to planning and project development processes.
611.9 Project justification criteria for grants and loans for
fixed guideway systems.
611.11 Local financial commitment criteria.
611.13 Overall project ratings.
Appendix A to Part 611--Description of Measures for Project
Evaluation.
Authority: 49 U.S.C. 5309; 49 CFR 1.51
Sec. 611.1 Purpose and contents.
(a) This part prescribes the process that applicants must follow to
be considered eligible for capital investment grants and loans for new
fixed guideway systems or extensions to existing systems (``new
starts''). Also, this part prescribes the procedures used by FTA to
evaluate proposed new starts projects as required by 49 U.S.C. 5309(e),
and the scheduling of project reviews required by 49 U.S.C. 5328(a).
(b) This part defines how the results of the evaluation described
in paragraph (a) of this section will be used to:
(1) Approve entry into preliminary engineering and final design, as
required by 49 U.S.C. 309(e)(6);
(2) Rate projects as ``highly recommended,'' ``recommended,'' or
``not recommended,'' as required by 49 U.S.C. 5309(e)(6);
(3) Assign individual ratings for each of the project justification
criteria specified in 49 U.S.C. 5309(e)(1)(B) and (C);
(4) Determine project eligibility for Federal funding commitments,
in the form of Full Funding Grant Agreements;
(5) Support funding recommendations for this program for the
Administration's annual budget request; and
(6) Fulfill the reporting requirements under 49 U.S.C. 5309(o)(1),
Funding Levels and Allocations of Funds, Annual Report, and 5309(o)(2),
Supplemental Report on New Starts.
(c) The information collected and ratings developed under this part
will form the basis for the annual reports to Congress, required by 49
U.S.C. 5309(o)(1) and (2).
Sec. 611.3 Applicability.
(a) This part applies to all proposals for Federal capital
investment funds under 49 U.S.C. 5309 for new transit fixed guideway
systems and extensions to existing systems.
(b) Projects described in paragraph (a) of this section are not
subject to evaluation under this part if the total amount of funding
from 49 U.S.C. 5309 will be less than $25 million, or if such projects
are otherwise exempt from evaluation by statute.
(1) Exempt projects must still be rated by FTA for purposes of
entering into a Federal funding commitment as required by 49 U.S.C.
5309(e)(7). Sponsors who believe their projects to be exempt are
nonetheless strongly encouraged to submit data for project evaluation
as described in this part.
(2) Such projects are still subject to the requirements of 23 CFR
part 450 and 23 CFR part 771.
(3) This part does not apply to projects for which a Full Funding
Grant Agreement (FFGA) has already been executed.
(c) Consistent with 49 U.S.C. 5309(e)(8)(B), FTA will make project
approval decisions on proposed projects using expedited procedures as
appropriate, for proposed projects that are:
(1) Located in a nonattainment area;
(2) Transportation control measures as defined by the Clean Air Act
(42 U.S.C. 7401 et seq.); and
(3) Required to carry out a State Implementation Plan.
Sec. 611.5 Definitions.
The definitions established by Titles 12 and 49 of the United
States Code, the Council on Environmental Quality's regulation at 40
CFR parts 1500-1508, and FHWA-FTA regulations at 23 CFR parts 450 and
771 are applicable. In addition, the following definitions apply:
Alternatives analysis is a corridor level analysis which evaluates
all reasonable mode and alignment alternatives for addressing a
transportation problem, and results in the adoption of a locally
preferred alternative by the appropriate State and local agencies and
official boards through a public process.
Baseline alternative is the alternative against which the proposed
new starts project is compared to develop project justification
measures. Relative to the no build alternative, it should include
transit improvements lower in cost than the new start which result in a
better ratio of measures of transit mobility compared to cost than the
no build alternative.
BRT means bus rapid transit.
Bus Rapid Transit refers to coordinated improvements in a transit
[[Page 76881]]
system's infrastructure, equipment, operations, and technology that
give preferential treatment to buses on fixed guideways and urban
roadways. The intention of Bus Rapid Transit is to reduce bus travel
time, improve service reliability, increase the convenience of users,
and ultimately, increase bus ridership.
Extension to existing fixed-guideway system means a project to
extend an existing fixed guideway system.
FFGA means a Full Funding Grant Agreement.
Final Design is the final phase of project development, and
includes (but is not limited to) the preparation of final construction
plans (including construction management plans), detailed
specifications, construction cost estimates, and bid documents.
Fixed guideway system means a mass transportation facility which
utilizes and occupies a separate right-of-way, or rail line, for the
exclusive use of mass transportation and other high occupancy vehicles,
or uses a fixed catenary system and a right of way usable by other
forms of transportation. This includes, but is not limited to, rapid
rail, light rail, commuter rail, automated guideway transit, people
movers, ferry boat service, and fixed-guideway facilities for buses
(such as bus rapid transit) and other high occupancy vehicles. A new
fixed guideway system means a newly-constructed fixed guideway system
in a corridor or alignment where no such system exists.
FTA means the Federal Transit Administration.
Full Funding Grant Agreement means an instrument that defines the
scope of a project, the Federal financial contribution, and other terms
and conditions.
Major transit investment means any project that involves the
construction of a new fixed guideway system or extension of an existing
fixed guideway system for use by mass transit vehicles.
NEPA process means those procedures necessary to meet the
requirements of the National Environmental Policy Act of 1969, as
amended (NEPA), at 23 CFR part 771; the NEPA process is completed when
a Record of Decision (ROD) or Finding of No Significant Impact (FONSI)
is issued.
New start means a new fixed guideway system, or an extension to an
existing fixed guideway system.
Preliminary Engineering is the process by which the scope of the
proposed project is finalized, estimates of project costs, benefits and
impacts are refined, NEPA requirements are completed, project
management plans and fleet management plans are further developed, and
local funding commitments are put in place.
Secretary means the Secretary of Transportation.
TEA-21 means the Transportation Equity Act for the 21st Century.
Sec. 611.7 Relation to Planning and Project Development Processes
All new start projects proposed for funding assistance under 49 USC
5309 must emerge from the metropolitan and Statewide planning process,
consistent with 23 CFR part 450. To be eligible for FTA capital
investment funding, a proposed project must be based on the results of
alternatives analysis and preliminary engineering.
(a) Alternatives Analysis. (1) To be eligible for FTA capital
investment funding for a major fixed guideway transit project, local
project sponsors must perform an alternatives analysis.
(2) The alternatives analysis develops information on the benefits,
costs, and impacts of alternative strategies to address a
transportation problem in a given corridor, leading to the adoption of
a locally preferred alternative.
(3) The alternative strategies evaluated in an alternatives
analysis must include a no-build alternative, a baseline alternative,
and an appropriate number of build alternatives. Where project sponsors
believe the no-build alternative fulfills the requirements for a
baseline alternative, FTA will determine whether to require a separate
baseline alternative on a case-by-case basis.
(4) The locally preferred alternative must be selected from among
the evaluated alternative strategies and formally adopted and included
in the metropolitan planning organization's financially-constrained
long-range regional transportation plan.
(b) Preliminary Engineering. Consistent with 49 USC 5309(e)(6) and
5328(a)(2), FTA will approve/disapprove entry of a proposed project
into preliminary engineering within 30 days of receipt of a formal
request from the project sponsor(s).
(1) A proposed project can be considered for advancement into
preliminary engineering only if:
(i) Alternatives analysis has been completed
(ii) The proposed project is adopted as the locally preferred
alternative by the Metropolitan Planning Organization into its
financially constrained metropolitan transportation plan;
(iii) Project sponsors have demonstrated adequate technical
capability to carry out preliminary engineering for the proposed
project; and
(iv) All other applicable Federal and FTA program requirements have
been met.
(2) FTA's approval will be based on the results of its evaluation
as described in Secs. 611.9-611.13.
(3) At a minimum, a proposed project must receive an overall rating
of ``recommended'' to be approved for entry into preliminary
engineering.
(4) This part does not in any way revoke prior FTA approvals to
enter preliminary engineering made prior to February 5, 2001.
(5) Projects approved to advance into preliminary engineering
receive blanket pre-award authority to incur project costs for
preliminary engineering activities prior to grant approval.
(i) This pre-award authority does not constitute a commitment by
FTA that future Federal funds will be approved for this project.
(ii) All Federal requirements must be met prior to incurring costs
in order to retain eligibility of the costs for future FTA grant
assistance.
(c) Final Design. Consistent with 49 USC 5309(e)(6) and 5328(a)(3),
FTA will approve/disapprove entry of a proposed project into final
design within 120 days of receipt of a formal request from the project
sponsor(s).
(1) A proposed project can be considered for advancement into final
design only if:
(i) The NEPA process has been completed;
(ii) Project sponsors have demonstrated adequate technical
capability to carry out final design for the proposed project; and
(iii) All other applicable Federal and FTA program requirements
have been met.
(2) FTA's approval will be based on the results of its evaluation
as described in Parts Secs. 611.9-611.13 of this Rule.
(3) At a minimum, a proposed project must receive an overall rating
of ``recommended'' to be approved for entry into final design.
(4) Consistent with the Government Performance and Results Act of
1993, project sponsors seeking FFGAs shall submit a complete plan for
collection and analysis of information to identify the impacts of the
new start project and the accuracy of the forecasts prepared during
development of the project.
(i) The plan shall provide for: Collection of ``before'' data on
the current transit system; documentation of the ``predicted'' scope,
service levels, capital costs, operating costs, and ridership of the
project; collection of ``after'' data on the transit system two years
after opening of the new start project; and analysis of the consistency
[[Page 76882]]
of ``predicted'' project characteristics with the ``after'' data.
(ii) The ``before'' data collection shall obtain information on
transit service levels and ridership patterns, including origins and
destinations, access modes, trip purposes, and rider characteristics.
The ``after'' data collection shall obtain analogous information on
transit service levels and ridership patterns, plus information on the
as-built scope and capital costs of the new start project.
(iii) The analysis of this information shall describe the impacts
of the new start project on transit services and transit ridership,
evaluate the consistency of ``predicted'' and actual project
characteristics and performance, and identify sources of differences
between ``predicted'' and actual outcomes.
(iv) For funding purposes, preparation of the plan for collection
and analysis of data is an eligible part of the proposed project.
(5) Project sponsors shall collect data on the current system,
according to the plan required under Sec. 611.7(c)(4) as approved by
FTA, prior to the beginning of construction of the proposed new start.
Collection of this data is an eligible part of the proposed project for
funding purposes.
(6) This part does not in any way revoke prior FTA approvals to
enter final design that were made prior to February 5, 2001.
(7) Projects approved to advance into final design receive blanket
pre-award authority to incur project costs for final design activities
prior to grant approval.
(i) This pre-award authority does not extend to right of way
acquisition or construction, nor does it constitute a commitment by FTA
that future Federal funds will be approved for this project.
(ii) All Federal requirements must be met prior to incurring costs
in order to retain eligibility of the costs for future FTA grant
assistance.
(d) Full funding grant agreements. (1) FTA will determine whether
to execute an FFGA based on:
(i) The evaluations and ratings established by this rule;
(ii) The technical capability of project sponsors to complete the
proposed new starts project; and
(iii) A determination by FTA that no outstanding issues exist that
could interfere with successful implementation of the proposed new
starts project.
(2) An FFGA shall not be executed for a project that is not
authorized for final design and construction by Federal law.
(3) FFGAs will be executed only for those projects which:
(i) Are rated as ``recommended'' or ``highly recommended;''
(ii) Have completed the appropriate steps in the project
development process;
(iii) Meet all applicable Federal and FTA program requirements; and
(iv) Are ready to utilize Federal new starts funds, consistent with
available program authorization.
(4) In any instance in which FTA decides to provide financial
assistance under section 5309 for construction of a new start project,
FTA will negotiate an FFGA with the grantee during final design of that
project. Pursuant to the terms and conditions of the FFGA:
(i) A maximum level of Federal financial contribution under the
section 5309 new starts program will be fixed;
(ii) The grantee will be required to complete construction of the
project, as defined, to the point of initiation of revenue operations,
and to absorb any additional costs incurred or necessitated;
(iii) FTA and the grantee will establish a schedule for
anticipating Federal contributions during the final design and
construction period; and
(iv) Specific annual contributions under the FFGA will be subject
to the availability of budget authority and the ability of the grantee
to use the funds effectively.
(5) The total amount of Federal obligations under Full Funding
Grant Agreements and potential obligations under Letters of Intent will
not exceed the amount authorized for new starts under 49 U.S.C.
Sec. 5309.
(6) FTA may also make a ``contingent commitment,'' which is subject
to future congressional authorizations and appropriations, pursuant to
49 U.S.C. 5309(g), 5338(b), and 5338(h).
(7) Consistent with the Government Performance and Results Act of
1993 (GPRA), the FFGA will require implementation of the data
collection plan prepared in accordance with Sec. 611.7(c)(4):
(i) Prior to the beginning of construction activities the grantee
shall collect the ``before'' data on the existing system, if such data
has not already been collected as part of final design, and document
the predicted characteristics and performance of the project.
(ii) Two years after the project opens for revenue service, the
grantee shall collect the ``after'' data on the transit system and the
new start project, determine the impacts of the project, analyze the
consistency of the ``predicted'' performance of the project with the
``after'' data, and report the findings and supporting data to FTA.
(iii) For funding purposes, collection of the ``before'' data,
collection of the ``after'' data, and the development and reporting of
findings are eligible parts of the proposed project.
(8) This part does not in any way alter, revoke, or require re-
evaluation of existing FFGAs that were issued prior to February 5,
2001.
Sec. 611.9 Project justification criteria for grants and loans for
fixed guideway systems
In order to approve a grant or loan for a proposed new starts
project under 49 U.S.C. 5309, and to approve entry into preliminary
engineering and final design as required by section 5309(e)(6), FTA
must find that the proposed project is justified as described in
section 5309(e)(1)(B).
(a) To make the statutory evaluations and assign ratings for
project justification, FTA will evaluate information developed locally
through alternatives analyses and refined through preliminary
engineering and final design.
(1) The method used to make this determination will be a multiple
measure approach in which the merits of candidate projects will be
evaluated in terms of each of the criteria specified by this section.
(2) The measures for these criteria are specified in Appendix A to
this rule.
(3) The measures will be applied to the project as it has been
proposed to FTA for new starts funding under 49 U.S.C. 5309.
(4) The ratings for each of the criteria will be expressed in terms
of descriptive indicators, as follows: ``high,'' ``medium-high,''
``medium,'' ``low-medium,'' or ``low.''
(b) The criteria are as follows:
(1) Mobility Improvements.
(2) Environmental Benefits.
(3) Operating Efficiencies.
(4) Transportation System User Benefits (Cost-Effectiveness).
(5) Existing land use, transit supportive land use policies, and
future patterns.
(6) Other factors. Additional factors, including but not limited
to:
(i) The degree to which the programs and policies (e.g., parking
policies, etc.) are in place as assumed in the forecasts,
(ii) Project management capability, including the technical
capability of the grant recipient to construct the project, and
(iii) Additional factors relevant to local and national priorities
and relevant to the success of the project.
(c) In evaluating proposed new starts projects under these
criteria:
(1) As a candidate project proceeds through preliminary engineering
and
[[Page 76883]]
final design, a greater degree of certainty is expected with respect to
the scope of the project and a greater level of commitment is expected
with respect to land use.
(2) For the criteria under Sec. 611.9(b)(1)-(4), the proposed new
start will be compared to the baseline alternative.
(d) In evaluating proposed new starts projects under these
criteria, the following factors shall be considered:
(1) The direct and indirect costs of relevant alternatives;
(2) Factors such as congestion relief, improved mobility, air
pollution, noise pollution, energy consumption, and all associated
ancillary and mitigation costs necessary to carry out each alternative
analyzed, and recognize reductions in local infrastructure costs
achieved through compact land use development;
(3) Existing land use, mass transportation supportive land use
policies, and future patterns;
(4) The degree to which the project increases the mobility of the
mass transportation dependent population or promotes economic
development;
(5) Population density and current transit ridership in the
corridor;
(6) The technical capability of the grant recipient to construct
the project;
(7) Differences in local land, construction, and operating costs;
and
(8) Other factors as appropriate.
(e) FTA may amend the measures for these criteria, pending the
results of ongoing studies regarding transit benefit evaluation
methods.
(f) The individual ratings for each of the criteria described in
this section will be combined into a summary rating of ``high,''
``medium-high,'' ``medium,'' ``low-medium,'' or ``low'' for project
justification. ``Other factors'' will be considered as appropriate.
Sec. 611.11 Local financial commitment criteria.
In order to approve a grant or loan under 49 U.S.C. 5309, FTA must
find that the proposed project is supported by an acceptable degree of
local financial commitment, as required by section 5309(e)(1)(C). The
local financial commitment to a proposed project will be evaluated
according to the following measures:
(a) The proposed share of project capital costs to be met using
funds from sources other than the section 5309 new starts program,
including both the non-Federal match required by Federal law and any
additional capital funding (``overmatch''), and the degree to which
planning and preliminary engineering activities have been carried out
without funding from the section 5309 new starts program;
(b) The stability and reliability of the proposed capital financing
plan for the new starts project; and
(c) The stability and reliability of the proposed operating
financing plan to fund operation of the entire transit system as
planned over a 20-year planning horizon.
(d) For each proposed project, ratings for paragraphs (b) and (c)
of this section will be reported in terms of descriptive indicators, as
follows: ``high,'' ``medium-high,'' ``medium,'' ``low-medium,'' or
``low.'' For paragraph (a) of this section, the percentage of Federal
funding sought from 49 U.S.C. Sec. 5309 will be reported.
(e) The summary ratings for each measure described in this section
will be combined into a summary rating of ``high,'' ``medium-high,''
``medium,'' ``low-medium,'' or ``low'' for local financial commitment.
Sec. 611.13 Overall project ratings.
(a) The summary ratings developed for project justification local
financial commitment (Sec. Sec. 611.9 and 611.11) will form the basis
for the overall rating for each project.
(b) FTA will assign overall ratings of ``highly recommended,''
``recommended,'' and ``not recommended,'' as required by 49 U.S.C.
5309(e)(6), to each proposed project.
(1) These ratings will indicate the overall merit of a proposed new
starts project at the time of evaluation.
(2) Ratings for individual projects will be updated annually for
purposes of the annual report on funding levels and allocations of
funds required by section 5309(o)(1), and as required for FTA approvals
to enter into preliminary engineering, final design, or FFGAs.
(c) These ratings will be used to:
(1) approve advancement of a proposed project into preliminary
engineering and final design;
(2) Approve projects for FFGAs;
(3) Support annual funding recommendations to Congress in the
annual report on funding levels and allocations of funds required by 49
U.S.C. 5309(o)(1); and
(4) For purposes of the supplemental report on new starts, as
required under section 5309(o)(2).
(d) FTA will assign overall ratings for proposed new starts
projects based on the following conditions:
(1) Projects will be rated as ``recommended'' if they receive a
summary rating of at least ``medium'' for both project justification
(Sec. 611.9) and local financial commitment (Sec. 611.11);
(2) Projects will be rated as ``highly recommended'' if they
receive a summary rating higher than ``medium'' for both local
financial commitment and project justification.
(3) Projects will be rated as ``not recommended'' if they do not
receive a summary rating of at least ``medium'' for both project
justification and local financial commitment.
Appendix A to Part 611--Description of Measures Used for Project
Evaluation.
Project Justification
FTA will use several measures to evaluate candidate new starts
projects according to the criteria established by 49 U.S.C.
5309(e)(1)(B). These measures have been developed according to the
considerations identified at 49 U.S.C. 5309(e)(3) (``Project
Justification''), consistent with Executive Order 12893. From time
to time, FTA has published technical guidance on the application of
these measures, and the agency expects it will continue to do so.
Moreover, FTA may well choose to amend these measures, pending the
results of ongoing studies regarding transit benefit evaluation
methods. The first four criteria listed below assess the benefits of
a proposed new start project by comparing the project to the
baseline alternative. Therefore, the baseline alternative must be
defined so that comparisons with the new start project isolate the
costs and benefits of the major transit investment. At a minimum,
the baseline alternative must include in the project corridor all
reasonable cost-effective transit improvements short of investment
in the new start project. Depending on the circumstances and through
prior agreement with FTA, the baseline alternative can be defined
appropriately in one of three ways. First, where the adopted
financially constrained regional transportation plan includes within
the corridor all reasonable cost-effective transit improvements
short of the new start project, a no-build alternative that includes
those improvements may serve as the baseline. Second, where
additional cost-effective transit improvements can be made beyond
those provided by the adopted plan, the baseline will add those
cost-effective transit improvements. Third, where the proposed new
start project is part of a multimodal alternative that includes
major highway components, the baseline alternative will be the
preferred multimodal alternative without the new start project and
associated transit services. Prior to submittal of a request to
enter preliminary engineering for the new start project, grantees
must obtain FTA approval of the definition of the baseline
alternative. Consistent with the requirement that differences
between the new start project and the baseline alternative measure
only the benefits and costs of the project itself, planning factors
external to the new start project and its supporting bus service
must be the same for both the baseline and new start project
alternatives. Consequently, the highway and transit networks defined
for the analysis must be the same outside the corridor for which the
new start project is proposed. Further, policies affecting travel
demand and travel costs, such as land use, transit fares and parking
costs,
[[Page 76884]]
must be applied consistently to both the baseline alternative and
the new start project alternative. The fifth criterion, ``existing
land use, transit supportive land use policies, and future
patterns,'' reflects the importance of transit-supportive local land
use and related conditions and policies as an indicator of ultimate
project success.
(a) Mobility Improvements.
(1) The aggregate travel time savings in the forecast year
anticipated from the new start project compared to the baseline
alternative. This measure sums the travel time savings accruing to
travelers projected to use transit in the baseline alternative,
travelers projected to shift to transit because of the new start
project, and non-transit users in the new start project who would
benefit from reduced traffic congestion.
(i) After September 1, 2001, FTA will employ a revised measure
of travel benefits accruing to travelers.
(ii) The revised measure will be based on a multi-modal measure
of perceived travel times faced by all users of the transportation
system.
(2) The absolute number of existing low income households
located within \1/2\-mile of boarding points associated with the
proposed system increment.
(3) The absolute number of existing jobs within \1/2\-mile of
boarding points associated with the proposed system increment.
(b) Environmental Benefits.
(1) The forecast change in criteria pollutant emissions and in
greenhouse gas emissions, ascribable to the proposed new investment,
calculated in terms of annual tons for each criteria pollutant or
gas (forecast year), compared to the baseline alternative;
(2) The forecast net change per year (forecast year) in the
regional consumption of energy, ascribable to the proposed new
investment, expressed in British Thermal Units (BTU), compared to
the baseline alternative; and
(3) Current Environmental Protection Agency designations for the
region's compliance with National Ambient Air Quality Standards.
(c) Operating Efficiencies. The forecast change in operating
cost per passenger-mile (forecast year), for the entire transit
system. The new start will be compared to the baseline alternative.
(d) Transportation System User Benefits (Cost-Effectiveness).
(1) The cost effectiveness of a proposed project shall be
evaluated according to a measure of transportation system user
benefits, based on a multimodal measure of perceived travel times
faced by all users of the transportation system, for the forecast
year, divided by the incremental cost of the proposed project.
Incremental costs and benefits will be calculated as the differences
between the proposed new start and the baseline alternative.
(2) Until the effective date of the transportation system user
benefits measure of cost effectiveness, cost effectiveness will be
computed as the incremental costs of the proposed project divided by
its incremental transit ridership, as compared to the baseline
alternative.
(i) Costs include the forecast annualized capital and annual
operating costs of the entire transit system.
(ii) Ridership includes forecast total annual ridership on the
entire transit system, excluding transfers.
(e) Existing land use, transit supportive land use policies, and
future patterns. Existing land use, transit-supportive land use
policies, and future patterns shall be rated by evaluating existing
conditions in the corridor and the degree to which local land use
policies are likely to foster transit supportive land use, measured
in terms of the kinds of policies in place, and the commitment to
these policies. The following factors will form the basis for this
evaluation:
(1) Existing land use;
(2) Impact of proposed new starts project on land use;
(3) Growth-management policies;
(4) Transit-supportive corridor policies;
(5) Supportive zoning regulations near transit stations;
(6) Tools to implement land use policies;
(7) The performance of land use policies; and
(8) Existing and planned pedestrian facilities, including access
for persons with disabilities.
(f) Other factors. Other factors that will be considered when
evaluating projects for funding commitments include, but are not
limited to:
(1) Multimodal emphasis of the locally preferred investment
strategy, including the proposed new start as one element;
(2) Environmental justice considerations and equity issues,
(3) Opportunities for increased access to employment for low
income persons, and Welfare-to-Work initiatives;
(4) Livable Communities initiatives and local economic
activities;
(5) Consideration of alternative land use development scenarios
in local evaluation and decision making for the locally preferred
transit investment decision;
(6) Consideration of innovative financing, procurement, and
construction techniques, including design-build turnkey
applications; and
(7) Additional factors relevant to local and national priorities
and to the success of the project, such as Empowerment Zones,
Brownfields, and FTA's Bus Rapid Transit Demonstration Program.
Local Financial Commitment
FTA will use the following measures to evaluate the local
financial commitment to a proposed project:
(a) The proposed share of project capital costs to be met using
funds from sources other than the 49 U.S.C. 5309 new starts program,
including both the local match required by Federal law and any
additional capital funding (``overmatch''). Consideration will be
given to:
(i) The use of innovative financing techniques, as described in
the May 9, 1995, Federal Register notice on FTA's Innovative
Financing Initiative (60 FR 24682);
(ii) The use of ``flexible funds'' as provided under the CMAQ
and STP programs;
(iii) The degree to which alternatives analysis and preliminary
engineering activities were carried out without funding from the
Sec. 5309 new starts program; and
(iv) The actual percentage of the cost of recently-completed or
simultaneously undertaken fixed guideway systems and extensions that
are related to the proposed project under review, from sources other
than the section 5309 new starts program (FTA's intent is to
recognize that a region's local financial commitment to fixed
guideway systems and extensions may not be limited to a single
project).
(b) The stability and reliability of the proposed capital
financing plan, according to:
(i) The stability, reliability, and level of commitment of each
proposed source of local match, including inter-governmental grants,
tax sources, and debt obligations, with an emphasis on availability
within the project development timetable;
(ii) Whether adequate provisions have been made to cover
unanticipated cost overruns and funding shortfalls; and
(iii) Whether adequate provisions have been made to fund the
capital needs of the entire transit system as planned, including key
station plans as required under 49 CFR 37.47 and 37.51, over a 20-
year planning horizon period.
(c) The stability and reliability of the proposed operating
financing plan to fund operation of the entire transit system as
planned over a 20-year planning horizon.
Issued: November 29, 2000.
Nuria I. Fernandez,
Acting Administrator.
[FR Doc. 00-30921 Filed 12-6-00; 8:45 am]
BILLING CODE 4910-57-P