Federal Register, Volume 66 Issue 167 (Tuesday, August 28, 2001)

[Federal Register Volume 66, Number 167 (Tuesday, August 28, 2001)]
[Proposed Rules]
[Pages 45552-45561]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-21724]

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Part VI

Department of Transportation

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Federal Transit Administration

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49 CFR Part 624

Clean Fuels Formula Grant Program; Proposed Rule

Federal Register / Vol. 66 , No. 167 / Tuesday, August 28, 2001 /
Proposed Rules

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DEPARTMENT OF TRANSPORTATION

Federal Transit Administration

49 CFR Part 624

[Docket No. FTA-2001-9877]
RIN 2132-AA64

Clean Fuels Formula Grant Program

AGENCY: Federal Transit Administration (FTA), DOT.

ACTION: Notice of proposed rulemaking.

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SUMMARY: On June 9, 1998, the Transportation Equity Act for the 21st
Century (TEA-21) was enacted requiring the Federal Transit
Administration (FTA) to establish a new grant program entitled the
Clean Fuels Formula Grant Program. This proposed rule establishes the
procedures potential recipients must use to apply for this new program.
The FY 1999, FY 2000, and FY 2001 appropriations bills did not make
funding available for this program. FTA is publishing this proposed
rulemaking in anticipation that funds may be available in FY 2002 or
future Federal fiscal years.

DATES: Comment on this proposed rule must be received by October 12,
2001.

ADDRESS: Written comments must refer to the docket number that appears
above and be submitted to the United States Department of
Transportation; Central Dockets Office, PL-401; 400 Seventh Street,
SW., Washington, DC 20590. All comments received will be available for
inspection at the above address from 10 a.m. to 5 p.m., E.T. Monday
through Friday, except Federal holidays. Those desiring the agency to
acknowledge receipt of their comments should include a self-addressed,
stamped postcard with their comments. The Docket Clerk will date-stamp
the post card and mail it back to the commenter.

FOR FURTHER INFORMATION CONTACT: For program issues: Nancy Grubb,
Office of Resource Management and State Programs, (202) 366-2053; for
program evaluation issues, Abbe Marner, Office of Planning, (202)366-
4317; and Christina Gikakis, Office of Research, Demonstration, and
Innovation, FTA, (202) 366-2637. For legal issues: Scheryl Portee,
Office of Chief Counsel, FTA, (202) 366-1936 (telephone) or (202) 366-
3809 (fax). Electronic access to this and other rules may be obtained
through the FTA World Wide Web home page at http://www.fta.dot.gov/library/legal/frootoc.htm. Comments may be reviewed via the internet at
http://dms.dot.gov.

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.
The comment period for this rulemaking is 45 days. A shorter
comment period is needed because this program may be funded in FY 2002.
FTA believes that this period will allow all interested parties enough
time to file their comments; however, late filed comments will be
considered to the extent practicable.
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 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. Government Performance and Results Act of 1993
III. Today's Proposed Rule
IV. Section-by-Section Analysis
V. Request for comments on Particular Issue
VI. Regulatory Process Matters

I. Background

The Clean Fuels Formula Grant Program is a new transit grant
program contained in section 3008 of the Transportation Equity Act for
the 21st Century (TEA-21) as amended, Pub. L. 105-178, (codified at 49
U.S.C. 5308). This program has a two-fold purpose. First, the program
is intended to assist nonattainment and maintenance areas in achieving
or maintaining air quality attainment status. Second, the program seeks
to support emerging clean fuel and advanced propulsion technologies for
transit buses and to create markets for these technologies. As the
legislation establishes the basic parameters of the program, the focus
of this rulemaking is application procedures. While the program is a
formula program, the amount of funds available to individual grantees
cannot be calculated in advance of the receipt of applications. The
formula is applied to the universe of eligible applications subsequent
to receiving and screening all applications in each Federal fiscal
year.
The formula provides two-thirds of the funds to urban areas over
one million in population and one-third of the funds to urban areas
less than one million in population. The specifics of the formula are
explained later in this notice. In addition, TEA-21 provides weighting
factors based on the severity of nonattainment for ozone and carbon
monoxide (CO). These weighting factors are also explained later in the
text. TEA-21 provides authorization levels of up to $200,000,000 per
year and guaranteed levels at $100,000,000 per year, but actual amounts
available are subject to annual appropriations. FTA will make the
annual funding level for this program available in the annual Federal
Register notice that announces each fiscal year's appropriations and
allocations. However, in DOT's FYs 1999, 2000, and 2001 no funds were
made available to the program. Rather, Congress, in the FYs 1999, 2000,
and 2001 appropriations acts, directed that the funds made available
for the Clean Fuels Formula Grant Program under ``Formula Grants'' be
transferred and merged with funds made available for the replacement,
rehabilitation, and purchase of buses and related equipment and the
construction of bus-related facilities under ``FTA Capital Investment
Grants.'' In addition, Congress mandated that the funding available for
this program pursuant to 49 U.S.C. 5309(m)(3)(C) did not apply to funds
made available in the DOT's FY 2001 Appropriation Act, Public Law 106-
346. See The Military Construction Appropriations Act, 2001, section
1108, Public Law 106-554.
Section 5308 of title 49, U.S.C., defines eligibility and provides
both minimum and maximum percentages of funds for certain clean fuel
technologies. All of these provisions are described in this proposed
rulemaking.
With respect to the second purpose of promoting new clean fuel
technologies for transit buses, section 3015(d) of TEA-21 also
authorized a new Joint Partnership Program for Deployment of Innovation
(JPP), which was announced in a separate Federal Register notice on
October 2, 1998. Projects determined eligible for funding under the
Clean Fuels Formula Grant Program, meeting the requirements of section
3015(d) and FTA's JPP guidelines, may also be considered for inclusion
under that program.
With respect to the weighting factors for severity of
nonattainment, it appears that Congressional intent was to use the same
weighting that had been developed for the Congestion Mitigation

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and Air Quality Improvement (CMAQ) Program under the Intermodal Surface
Transportation Efficiency Act (ISTEA). However, it appears that errors
were made in section 5308 regarding the carbon monoxide (CO)
nonattainment classification terms. To properly apply the weighting
factors for ``severity of nonattainment,'' FTA is making certain
interpretations concerning the statutory language in section
5308(d)(2). The statute uses the nonattainment classification terms
``marginal,'' ``moderate,'' ``serious,'' ``severe,'' and ``extreme''
for both ozone and carbon monoxide. However, the Clean Air Act
Amendments of 1990 only use the terms ``moderate'' and ``serious'' to
classify CO nonattainment areas. Thus, FTA will use those two
classifications for CO and disregard the other CO classifications and
associated weighting factors.
The CMAQ weighting factors for ozone and CO nonattainment areas are
laid out in 23 U.S.C. 104(b). Both ozone and CO areas are also given
weighting factors in 49 U.S.C. 5308(d)(2)(A). Section 5308(d)(2)(B)
provides additional weighting to CO areas. FTA believes that the
drafters of this legislation did not intend double weighting for CO
nonattainment areas. Thus, FTA will use the higher of the weighting
factors for ozone and CO in section 5308(d)(2)(A), and then apply the
additional adjustment of 1.2 in areas classified as both nonattainment
for CO and either nonattainment or maintenance for ozone as described
in section 5308(d)(2)(B). Section 5308(d)(2)(A) indicates that the
number of clean fuel vehicles will be a multiplier; however, FTA
believes that the multiplier should be the number of buses in the bus
fleet as laid out in section 5308(d)(1).
TEA-21 provides limitations on the use of funds and the maximum
amount of grants. In general, the amount of a grant to a designated
recipient for an eligible project shall not exceed the lesser of: (1)
$15,000,000 in areas with a population under 1,000,000 or $25,000,000
in areas with a population of at least 1,000,000; or (2) 80 percent of
the eligible project's total project cost. Additionally, at least five
percent of the total program funding must be used for the purchase of
hybrid electric or battery-powered buses or construction of facilities
designed to service those buses. No more than 35 percent of the amount
made available each fiscal year may be available to fund clean diesel
buses. No more than five percent of the amount made available each
fiscal year may be available to fund retrofitting or replacement of the
engines of buses that do not meet the clean air standards of the
Environmental Protection Agency (EPA).
TEA-21 requires that FTA issue a rule describing the application
procedures it proposes to use to implement this new grant program. The
purpose of this rulemaking is to comply with that requirement.

II. Government Performance and Results Act of 1993

The Government Performance and Results Act (GPRA) was enacted in
1993 to provide 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 order to carry out its statutory program responsibilities under
GPRA, FTA intends to evaluate the effectiveness of the Clean Fuels
Formula Grant Program in meeting its objectives to reduce transit bus
emissions and support emerging markets for clean fuel technologies. A
comprehensive and accurate evaluation of the program's effectiveness to
reduce transit bus emissions would require actual in-use emissions data
of the clean fuel buses. However, due to lack of funding for this
activity, FTA will not be able to conduct emissions tests on individual
vehicles to obtain such information. One possible approach to assess
the program's effectiveness in reducing transit bus emissions would be
to report the number and type of buses purchased with Clean Fuels
Formula Program funds, and estimate the reduction in emissions based on
representative emissions from similar vehicles, recognizing this data
may differ from actual in-use emission data. Information on the number
of buses, type of vehicles purchased, including type of propulsion
systems, and whether the vehicles are for service expansion or
replacement, must be entered into FTA's electronic grant management
system, i.e., TEAM. FTA believes assumptions about the emissions of the
vehicles being replaced will have to be made. Other approaches may be
applicable. FTA is interested in receiving comments on possible
evaluation strategies.
FTA is proposing to measure the impact on supporting new and
emerging markets for advanced propulsion technologies by reporting the
number and type of advanced propulsion vehicles purchased with Clean
Fuel Formula Program funds and reporting on new infrastructure funded
with the Clean Fuels Formula Program funds.
Information on the number of advanced propulsion vehicles purchased
with Clean Fuel Formula Program funds and the new infrastructure funded
with the Clean Fuels Formula Program funds must be entered into TEAM.

III. Today's Proposed Rule

This rule describes the application process FTA proposes to use to
implement the Clean Fuels Formula Grant Program. This rulemaking is
required in section 5308(c)(1).

IV. Section-by-Section Analysis

A. Eligible Applicant. (Sec. 624.1)

An eligible applicant is a state or local governmental authority
providing mass transportation service in either: (1) ozone and carbon
monoxide nonattainment areas which have the specific classifications
established by section 103 of the 1990 Clean Air Act Amendments, Public
Law 101-549 [amended 42 U.S.C. 7511-7511(f)], or (2) ozone and CO
``maintenance'' areas which, before they were redesignated to
attainment by the EPA, had these same classifications. The
nonattainment classifications for ozone are: ``marginal,''
``moderate,'' ``serious,'' ``severe,'' and ``extreme.'' The
nonattainment classifications for CO are: ``moderate'' and ``serious.''
It is clear that the program is limited to these nonattainment and
maintenance areas from the way the classification terms are embedded in
the program's apportionment formula as air quality weighting factors.
These weighting factors are patterned after the factors used in the
CMAQ Program in Title 23, U.S.C., before changes by TEA-21, and the
sole purpose of that program is to assist areas in attaining and
maintaining the National Ambient Air Quality Standards, principally for
ozone and CO.
It should be noted that EPA uses some additional classification
terms besides the ones listed above for certain other nonattainment
areas. Some examples are: ``incomplete data'' for some ozone areas and
``not classified'' for some CO areas. These classification terms are
not used in the Clean Fuels apportionment formula; therefore, areas
with these classifications are not eligible for funding under this
program. This is consistent with the Department of Transportation's
approach with respect to the CMAQ Program.
EPA's lists of nonattainment and maintenance areas do not change
much from year to year. Changes may involve reclassifications of
existing nonattainment areas as well as

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redesignations to attainment (i.e., achieving maintenance area status).
The changes occur throughout the year. The pre-application worksheet
for this program requires potential recipients to report their current
status as a nonattainment or a maintenance area for ozone and/or CO.
FTA will use this information as a starting point but will rely on the
most up-to-date information available from EPA regarding designations
and classifications for use in the apportionment formula. In summary,
only nonattainment or maintenance areas that have, or previously had,
the classifications identified above are eligible for this program.

B. Eligible Activities (Sec. 624.3)

This section describes the eligible activities as contained in 49
U.S.C. 5308. FTA believes that Congress intended section 5308 to
include vans in revenue service as well as buses. Other eligible
activities include the purchase or lease of clean fuel buses and
facilities, repowering or retrofitting buses to operate on clean fuels
and the improvement of existing facilities to accommodate clean fuel
buses. (The legislation defines clean fuel buses as those powered by
compressed natural gas, liquefied natural gas, biodiesel fuels,
batteries, alcohol-based fuels, hybrid electric, fuel cell and clean
diesel, and other low or zero emissions technology, and which the EPA
has certified sufficiently reduce harmful emissions. Because liquefied
petroleum gas (i.e., propane) qualifies as a low or zero emission
technology, FTA interprets section 5308 to include propane as an
eligible fuel.)

C. Application Process (Sec. 624.5)

This section describes the application process for the Clean Fuels
Formula Grant Program. The grant requirements for 49 U.S.C. 5309, the
Capital Investment Grants and Loans Program (Capital Program) apply.
These requirements are contained in FTA Circular 9300.1, which is
available from the FTA regional offices and on the FTA home page
(http://www.fta.dot.gov). The Federal share shall not exceed 80 percent
for this program. While the procedures in the circular do not include a
pre-application process, FTA will institute a pre-application process
for this program. This pre-application will be considered an
application for the purpose of determining the universe of eligible
applicants to apply the formula and will provide the information
necessary for FTA to calculate apportionment of the funds, based on the
formula contained in the legislation.
1. Pre-Application
In order to accommodate the need to submit an application without
knowing the amount of funds available to individual applicants, FTA
intends to request the submission of pre-applications for this program
in the Federal Register notice announcing annual apportionments and
allocations when funding has been appropriated by Congress. The pre-
application consists of a Letter of Interest and a Pre-application
Worksheet as described below:
a. Letter of Interest: This letter should serve as the cover letter
for the Pre-application Worksheet, expressing interest in submitting an
application. It should describe the overall clean fuel technology
program of the agency, including the technology selected; describe the
necessary infrastructure to support the program; and the long-range
objectives of the program including the eventual size of the clean fuel
fleet. It should summarize the eligible activities for which the agency
is applying and the amount of funds that the agency is seeking.
b. Pre-application Worksheet. This worksheet is contained in
Appendix A to this Notice. The purpose of the worksheet is to provide
all of the data necessary for FTA to calculate the apportionment.
Instructions for completing the Pre-application Worksheet are included
in Appendix A. Data needed to make the formula apportionment should be
included in the pre-application worksheet. The data include the size of
the bus fleet and the bus passenger miles of the applicant. Data from
the National Transit Database (NTD) will be used to make the formula
apportionment, and applicants that report to the NTD should provide
this information in the pre-application worksheet. Due to the time
required to collect and produce the NTD data, there is a lag time of
two years. For example, fiscal year 2002 apportionments will be based
on 2000 data. In order to provide for consistency of data, all
applicants should use 2000 data for fiscal year 2002 program
apportionments, even though they may report to the NTD. Applicants
outside urbanized areas, who are not required to report to NTD, shall
provide the same information based on their records for the current
calendar year.
Pre-applications must be submitted to the FTA regional office no
later than January 1 of each fiscal year. The regional office will
review the pre-applications for eligibility and for completeness of
information needed to apply the formula. The regional offices will
provide the information from pre-applications to FTA headquarters. FTA
headquarters will apply the formula and provide information to the
regional offices on the amount of funds available to each applicant.
The regional office will notify the applicant in writing as to the
amount of funds available for the submission of the final application.
The letter will also contain results of the eligibility review. If, for
any reason, the whole application were found to be ineligible, the
regional office would notify the applicant as soon as possible. If
portions of the application were found ineligible, the letter providing
information on the availability of funds would also contain this
information. Once the applicant has been notified of the amount of
funds available and advised of the eligibility of its application, it
may proceed to complete and file the final application. The final
application must be submitted electronically if the applicant is using
FTA's electronic application process, i.e., TEAM.
For urbanized areas, programming of the clean fuels projects in the
Metropolitan Transportation Improvement Program (MTIP) and Statewide
Transportation Improvement Program (STIP) may be completed following
notification by the FTA regional office of the amount of funds
available under the formula and results of the eligibility review.

D. Certification (Sec. 624.7)

This section discusses the certification called for in 49 U.S.C.
5308. Section 5308(c)(2) requires that there be a certification with
each Clean Fuels Formula Program application, which states that
vehicles purchased with a grant under this section will be operated by
the grantee using only clean fuels. Rather than be included in the
application, this certification will be contained in the annual FTA
Federal Register notice of assurances and certifications. This is
consistent with one-stop filing of all required certifications and
assurances. Transit operators planning to apply for a Clean Fuels
Formula grant should indicate compliance with this certification when
submitting the annual certifications and assurances to FTA.

E. Formula (Sec. 624.9)

This section includes the formula as contained in 49 U.S.C. 5308.
It appears that the congressional intent was to transfer the CMAQ
statutory language into the new Clean Fuels Formula Program. However,
it appears that errors were made in the Clean Fuels Formula language,
as it is not completely

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consistent with the provisions of the CMAQ program.
The CMAQ weighting factors for ozone nonattainment and CO areas are
laid out in 23 U.S.C. 104(b). Both ozone and CO areas are also given
weighting factors in 49 U.S.C. 5308(d)(2)(A). Section 5308(d)(2)(B)
provides additional weighting to CO areas. FTA believes the drafters of
this legislation did not intend the double weighting of CO
nonattainment area. Thus, FTA will use the higher of the weighting
factors for ozone and CO in section 5308(d)(2)(A), and then apply the
additional adjustment of 1.2 in areas classified as both nonattainment
for CO and either nonattainment or maintenance for ozone as described
in section 5308(d)(2)(B).

F. Reporting (Sec. 624.11)

FTA supports the development and deployment of clean fuel and
advanced propulsion technologies for transit buses. FTA is interested
in collecting relevant information on the operations and performance of
these clean fuel technology buses in revenue service to help assess the
reliability, benefits, and costs of these technologies compared to
conventional vehicle technologies. Accordingly, FTA intends to require
Clean Fuels Formula grantees receiving funds for projects to purchase
or lease buses powered by advanced propulsion technologies (e.g.,
battery electric, hybrid electric, and fuel cell powered vehicles) to
provide information to FTA on the operations, performance, and
maintenance of those vehicles. Reporting would be required each quarter
for the first three years of the useful life of the vehicle. Data on
the operation of the vehicle past this period would be voluntary.
Transit agencies acquiring alternative fuel buses (e.g., compressed
natural gas (CNG), liquefied natural gas (LNG), liquefied petroleum gas
(LPG), etc.) under the Clean Fuels Formula Grant Program are encouraged
to provide FTA similar information, on a voluntary basis. The
information will be used to evaluate the operating costs of clean fuel
and advanced propulsion technology vehicles compared to conventional
vehicles, and provide more accurate information to transit agencies for
future clean fuel and advanced propulsion vehicle purchases.
Information such as vehicle miles traveled, fuel costs, vehicle fuel/
energy consumption and oil consumption, road calls or breakdowns
resulting from clean fuel and advanced propulsion technology systems,
and maintenance costs associated with these systems will be collected
from the transit agencies. It is FTA's belief that operators may
collect such information as part of normal management practices. FTA
encourages transit agencies acquiring buses under this grant program to
establish a control set of comparable, conventional diesel buses to
form the baseline for comparison with the clean fuel or advanced
propulsion technology buses, and to collect and submit data to FTA for
this control set of buses, on a voluntary basis. Upon award
notification, grantees will be informed of the data collection
requirements for the grant.
Appendix A: Pre-application Worksheet. The Pre-application
Worksheet is included in this notice of proposed rulemaking.

V. Request for Comments on Particular Issues

The basic framework of this program is established by legislation.
We specifically request comment on the implementation guidance,
especially application requirements and possible evaluation approaches.
This program is a formula program, but the amount of funds available
for each applicant cannot be determined prior to receiving and
reviewing application information from potential grantees. As a result,
procedures different from FTA's other formula assistance programs are
needed to accommodate this situation. Comments are solicited on FTA's
proposed approach to structuring the application process, given that
under this particular grant program, FTA cannot determine the funding
amounts available to individual grantees until after the total number
of eligible applicants is known and the specific funding ceilings
(e.g., 35 percent clean diesel) have been applied.
FTA is proposing that the 49 U.S.C. 5309, Capital Investment Grants
and Loans Program requirements apply. These requirements are contained
in FTA Circular 9300.1, which is available from the FTA regional
offices. It is also available on the FTA Home Page (www.fta.dot.gov).
In order to lessen the administrative burden on applicants, FTA is
proposing a pre-application process. Pre-applications must be submitted
by January 1 of each year.
These pre-applications will permit FTA to identify the pool of
eligible applicants and apply the statutory funding formula. Once the
amount of funds that could be available to each grantee is determined,
the grantee may complete the programming process and submit its
application to FTA. FTA will submit the completed application to the
Department of Labor for the labor certification required by 49 U.S.C.
5333(b). Applications may be modified to reflect the limitation on
uses. Since the pre-application will be a basis for the formula
apportionment, any modifications to the application must be approved by
FTA. Comments on the pre-application process are requested.
Since the amount of available funds cannot be determined at the
time of the pre-application, FTA is proposing to require that the
programming of Clean Fuels Formula funds in the MTIP and STIP be
completed after February 1 when FTA apportions the funds. This would
ensure that fiscal constraint is maintained and simplifies the
paperwork and time required to accomplish the programming. Comment on
this procedure is requested.
In addition, FTA is proposing to impose reporting requirements for
those transit agencies acquiring advanced propulsion technology buses
with Clean Fuels Formula Grant funds. (See Sec. 624.11.) Information to
be collected includes operations, performance and maintenance data on
the vehicles to help assess the reliability, benefits, and costs of
these technologies compared to conventional vehicle technologies. Under
current FTA grant programs, such reporting is not required. Comments on
this proposed reporting requirement are requested.
FTA is also requesting suggestions on the program evaluation.
Information on sources of emissions data is sought. Additionally,
suggestions as to how evaluation approaches and evaluation methodology
are solicited.

VI. Regulatory Process Matters

A. Executive Order 12866

FTA has evaluated the industry costs and benefits of the clean
fuels formula grant program and has determined that it is not a
significant rule under E.O. 12866 because it involves grant application
procedures and will not cost more than $100 million annually.

B. Departmental Significance

This rule is a significant regulation as defined by the
Department's Regulatory Policies and Procedures. Although the
regulation involves grant application procedures, it is expected to
generate substantial public interest.

C. Regulatory Flexibility Act

In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601-
612, FTA has evaluated the effects of this rule on small entities. This
rule will not have a significant effect on a substantial number of
small entities because it merely establishes application procedures for
the Clean Fuels Formula Grant Program.

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D. Paperwork Reduction Act

This rule includes information collection requirements subject to
the Paperwork Reduction Act. The Office of Management and Budget (OMB)
has approved FTA's new information collection request. The affected
public would be mass transit operators that apply for Federal funds
under this program. Once this NPRM becomes a final rule, any burden
associated with it would be added to the current information collection
package, Clean Fuels Formula Grant Program, OMB approval number 2132-
0560. Comments are being solicited on the paperwork requirements,
particularly the proposed reporting requirement. Comments should
address: whether the proposed collection of information is necessary
for the proper performance of the FTA grant process; ways to enhance
the quality, utility, and clarity of the information collected; and
ways to minimize the burden of the collection of information on the
applicants, including the use of automated collection techniques (e.g.,
filing applications via facsimile (fax), electronic mail or other forms
of information technology). The Government Paperwork Elimination Act
(GPEA) of 1998 requires all Federal agencies to have an electronic
means of reporting to the government as an alternative to reporting on
paper by October 2003. Because of logistical difficulties, all means of
electronic filing are not immediately available. However, concurrent
with the continued development of this rulemaking action, FTA intends
to develop the authentication infrastructure to receive worksheets
through additional electronic means, such as web-based forms and
electronic file transfer by October 2003

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 does not have sufficient Federalism implications
to warrant the preparation of a Federalism Assessment because it sets
forth application procedures for a discretionary grant program.

F. National Environmental Policy Act

This program will have a positive impact on the environment. It
promotes the alternative use of clean fuels in vehicles used for mass
transportation.

G. Energy Act Implications

Mass transit has a positive impact on energy consumption as it
promotes an alternative to the single occupant vehicle.

H. Unfunded Mandates Reform Act

This program is a voluntary grant program and 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 624

Grant Programs--Transportation, Mass transportation, Reporting and
record keeping requirements.

Accordingly, for the reasons cited above, the FTA proposes to amend
title 49 of the CFR by adding a new part 624, as set forth below:

PART 624--CLEAN FUELS FORMULA GRANT PROGRAM

Sec.
624.1 Eligible applicant.
624.3 Eligible activities.
624.5 Application process.
624.7 Certification.
624.9 Formula.
624.11 Reporting.
Appendix A to Part 624--Pre-Application Worksheet

Authority: 49 U.S.C. 5308; 49 CFR 1.51.

Sec. 624.1 Eligible applicant.

(a) An eligible applicant is a state or local governmental
authority providing mass transportation service in either:
(1) Ozone and carbon monoxide nonattainment areas that have the
specific classifications established by the 1990 Clean Air Act
Amendments (Public Law 101-549), or
(2) Ozone and carbon monoxide (CO) ``maintenance'' areas that,
before they were redesignated to attainment by the Environmental
Protection Agency (EPA), had these same classifications.
(b) The nonattainment classifications for ozone are ``marginal,''
``moderate,'' ``serious,'' ``severe,'' and ``extreme.'' The
nonattainment classifications for CO are ``moderate'' and ``serious.''

Sec. 624.3 Eligible activities.

(a) Eligible activities include the purchase or lease of clean fuel
buses and facilities, repowering or retrofitting buses to operate on
clean fuels, and the improvement of existing facilities to accommodate
clean fuel buses.
(b) The term clean fuel vehicle means a vehicle that--
(1) Is powered by--
(i) Compressed natural gas;
(ii) Liquefied natural gas;
(iii) Biodiesel fuels;
(iv) Batteries;
(v) Alcohol-based fuels;
(vi) Hybrid electric;
(vii) Fuel cells; or
(viii) Clean diesel, to the extent allowed under this section; or
(2) The Administrator of the Environmental Protection Agency has
certified sufficiently reduces harmful emissions.
(c) Eligible projects are the following:
(1) Purchasing or leasing clean fuel buses, including buses that
employ a lightweight composite primary structure, and vans for use in
revenue service. The purchase or lease of non-revenue vehicles is not
an eligible project.
(2) Constructing or leasing clean fuel bus facilities or electrical
recharging facilities and related equipment. Facilities and related
equipment for clean diesel buses are not eligible.
(3) Improving existing mass transportation facilities to
accommodate clean fuel buses.
(4) Repowering pre-1993 engines with clean fuel technology that
meets the current urban bus emission standards. Repowering means the
removal of an engine from a bus followed by the installation of another
engine and applies to engines that are replaced with new, previously
unused engines, as well as those exchanged from an inventory of rebuilt
engines.
(5) Retrofitting or rebuilding pre-1993 engines if before half life
(i.e., prior to six years of bus life) to rebuild; retrofit means use
of the latest after-market technology such as ``upgrade kits,'' or
after-treatment device(s) that treat the exhaust after it has left the
engine, such as catalytic converters and particulate filters.
(6) At the discretion of FTA, projects relating to clean fuel,
biodiesel, hybrid electric, or zero emissions technology vehicles that
achieve emissions reductions equivalent or superior to existing clean
fuel or hybrid electric technologies.

Sec. 624.5 Application process.

(a) Pre-applications must be submitted to the appropriate FTA
regional office no later than January 1 of each fiscal year. Subject to
the availability of funds, FTA will apportion the funds based on the
formula and the pool of applicants, no later than February 1 of each
year. Once the applicant has been notified of the apportionment of
funds and the eligibility of its application, it should proceed to
complete and file the final application. The final application must be
submitted electronically if the grantee is using the electronic
application process (i.e., TEAM).
(b) The pre-application consists of a Letter of Interest and a Pre-
application Worksheet described as follows:

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(1) Letter of interest. This letter serves as the cover letter for
the Pre-application Worksheet, expressing interest in submitting an
application. It describes the overall clean fuel technology program of
the agency, including the technology selected, describes the necessary
infrastructure to support the program and the long-range objectives of
the program including the eventual size of the clean fuel fleet. It
summarizes the eligible activities for which the agency is applying and
the amount of funds that the agency is seeking.
(2) Pre-application Worksheet. Applicants must use the Worksheet
found in Appendix A to this part.

Sec. 624.7 Certification.

The applicant must use the certification contained in the Annual
Notice of Assurances and Certifications published in the Federal
Register each October.

Sec. 624.9 Formula.

The Clean Fuels Formula funds will be apportioned according to the
following formula:
(a) Areas with 1,000,000 population and above. Two thirds of the
funds available each fiscal year shall be apportioned to applicants
with eligible projects in urban areas with a population of 1,000,000
and above. Of this, 50 percent shall be apportioned so that each
applicant receives a grant in an amount equal to the ratio between:
(1) The number of vehicles in the bus fleet of the eligible
project, weighted by the severity of nonattainment for the area in
which the eligible project is located; and
(2) The total number of vehicles in the bus fleets of all eligible
projects in areas with a population of 1,000,000 and above, weighted by
the severity of nonattainment for all areas in which those eligible
projects are located as provided in paragraphs (c) and (d) of this
section. The remaining 50 percent shall be apportioned such that each
designated recipient receives a grant in an amount equal to the ratio
between:
(i) The number of bus passenger miles of the eligible project of
the designated recipient, weighted by the severity of nonattainment of
the area in which the eligible project is located as provided in
paragraphs (c) and (d) of this section;
(ii) The total number of bus passenger miles of all eligible
projects in areas with a population of 1,000,000 and above, weighted by
the severity of nonattainment of all areas in which those eligible
projects are located as provided in paragraphs (c) and (d) of this
section.
(b) Areas under 1,000,000 population. The formula for areas under
1,000,000 in population is the same as paragraph (a) of this section,
except the formula removes the pool of eligible projects in areas with
a population of 1,000,000 and above and replaces it with the pool of
eligible projects in areas with populations under 1,000,000.
(c) Weighting factors. (1) The weighting factor for ozone shall be
determined based on the following factors:
(i) 1.0 if, at the time of the apportionment, the area is a
maintenance area for ozone;
(ii) 1.1 if, at the time of the apportionment, the area is
classified as a marginal ozone nonattainment area;
(iii) 1.2 if, at the time of the apportionment, the area is
classified as a moderate ozone nonattainment area;
(iv) 1.3 if, at the time of the apportionment, the area is
classified as a serious ozone nonattainment area;
(v) 1.4 if, at the time of the apportionment, the area is
classified as a severe ozone nonattainment area;
(vi) 1.5 if, at the time of the apportionment, the area is
classified as an extreme ozone nonattainment area;
(2) The weighting factor for CO shall be determined based on the
following factors:
(i) 1.0 if, at the time of the apportionment, the area is a
maintenance area for carbon monoxide;
(ii) 1.2 if, at the time of the apportionment, the area is
classified as a moderate carbon monoxide nonattainment area;
(iii) 1.3 if, at the time of the apportionment, the area is
classified as a serious carbon monoxide nonattainment area.
(3) The number of buses in the fleet and the bus passenger miles
shall be multiplied by the higher of the ozone or CO factors.
(d) Additional adjustment. The number of buses in the fleet and the
bus passenger miles shall be further multiplied by a factor of 1.2 if
the area is both nonattainment for CO and either nonattainment or
maintenance for ozone.
(e) Limitation on uses. (1) Not less than 5 percent of the amount
made available by or appropriated under 49 U.S.C. 5338 in each fiscal
year to carry out this section shall be available for any eligible
projects for which an application is received from a designated
recipient for the purchase or construction of hybrid electric or
battery-powered buses or facilities specifically designed to service
those buses.
(2) Not more than 35 percent of the amount made available by or
appropriated under 49 U.S.C. 5338 in each fiscal year to carry out this
section may be made available to fund clean diesel buses.
(3) Not more than 5 percent of the amount made available by or
appropriated under 49 U.S.C. 5338 in each fiscal year to carry out this
section may be made available to fund 21 retrofitting or replacement of
the engines of buses that do not meet the clean air standards of the
Environmental Protection Agency, as in effect on the date on which the
application for such retrofitting or replacement is submitted under
Sec. 624.5.

Sec. 624.11 Reporting.

(a) Recipients of financial assistance under 49 U.S.C. 5308 who
purchase or lease hybrid electric, battery electric and fuel cell
vehicles must report to the appropriate FTA regional office on a
quarterly basis for the first three years of the useful life of the
vehicle with the following information:
(1) Vehicle miles traveled;
(2) Fuel/energy costs;
(3) Vehicle fuel/energy consumption and oil consumption;
(4) Number of road calls or breakdowns resulting from clean fuel
and advanced propulsion technology systems, and
(5) Maintenance costs associated with the clean fuels or advanced
propulsion system.
(b) Recipients of financial assistance under 49 U.S.C. 5308 who
purchase or lease compressed natural gas (CNG), liquefied natural gas
(LNG), and liquefied petroleum gas (LPG) vehicles may report the
information described in paragraph (a) of this section, but this
reporting is voluntary.
(c) Recipients of financial assistance under 49 U.S.C. 5308 who
purchase or lease clean diesel vehicles should not report information
beyond the normal FTA quarterly reporting requirements.

Appendix A to Part 624: Pre-Application Worksheet

The following are instructions for completing the pre-
application worksheet:
(1) Requesting Agency. Fill in the name of the applicant. The
applicant must be a state or local governmental authority providing
mass transportation service.
(2) UZA (or Urban Area). List the name of the urbanized area if
the applicant is located in an urbanized area. Otherwise, indicate
the name of the city or town.
(3) Nonattainment or Maintenance Area Name. List the name of the
nonattainment or maintenance area in which your agency provides
service.
(4) Classification for Ozone. List the current EPA nonattainment
classification for

[[Page 45558]]

your service area. (The classification must be of the following
terms: marginal, moderate, serious, severe, or extreme.)
(5) Classification for Carbon Monoxide. List the current EPA
nonattainment classification for your service area. (The
classification must be either moderate or serious.)

I. Proposed Activity

(1) New Bus Purchase/Lease. Enter the number of vans or buses by
fuel category in the pre-application. For hybrid electric vehicles,
include fuel types. Indicate whether the structure is lightweight
composite or traditional structure and weight. Enter the total and
Federal amount for each fuel type.
(2) Construct/Lease New Clean Fuel Facility and Related
Equipment. Indicate the Federal and total amount for a clean fuels
facility, related equipment or electrical recharging facility. Enter
any descriptive or explanatory information on the lines for
additional information, including what fuel type is being
accommodated. Facilities to accommodate clean diesel are not
eligible.
(3) Indicate the Federal amount and total amount for
improvements to existing facilities to accommodate clean fuel buses.
Enter any descriptive or explanatory information on the line for
additional items, including what fuel type is being accommodated.
(4) Indicate the Federal amount and total amount for repowering/
replacing pre-1993 engines with engines that meet current emissions
standards when installed. Please include a separate entry for each
fuel type. For the purposes of this program, repowering/replacement
means the removal of an engine from the bus followed by the
installation of another engine. This applies to engines that are
replaced with new, previously unused engines, as well as those
exchanged from an inventory of rebuilt engines.
(5) Enter a quantity, Federal amount, and total amount by fuel
type for retrofit/rebuild of pre-1993 engines to comply with latest
EPA-certified emissions standards. For the purposes of this program,
``retrofit'' means the use of the latest after-market technology
such as ``upgrade kits,'' or after-treatment device(s) that treat
the exhaust after it has left the engine, such as catalytic
converters or particulate filters. ``Before the half-life rebuild''
means that the retrofitting would need to occur before the bus is
six years old. Since this provision applies to pre-1993 engines,
this provision is of limited time availability.
(6) This section should describe any proposed clean fuel project
not included in categories (1) through (5). Since any project not
included in those categories requires approval at the discretion of
FTA, projects included here should also be described in the letter
of interest. Include the Federal amount and total.
(7) Summary. Indicate the Totals for the Federal and Total
Amounts requested for all projects listed in this Section I.

II. Data

This section contains the active bus fleet and annual bus
passenger miles information that is required to run the Clean Fuels
formula.
(1) Enter the number of buses in the active fixed route fleet.
For this purpose, ``bus'' includes articulated motor bus, Class A
bus (>35 seats), Class B bus (25-35 seats), Class C bus (25 seats),
double-decked bus, school bus, and electric trolley bus. Use 2000
data. For UZAs that have already submitted information for the 2000
National Transit Database (NTD), add the data from column H of Form
408 for the following vehicle types: AB, BA, BB, BC, DD, SB, and TB.
(These vehicle types are defined in reporter's guidance for the
NTD.)
(2) Enter the fixed route annual bus passenger miles for year
2000. This may include motor bus (see types in paragraph 1) or
trolley bus. For UZAs that have submitted 2000 NTD data, add the
information from column I of line 25 of Form 406 for the modes MB
and TB.

III. Projects Subject to Minimum/Maximum Apportionments

This section provides a dollar total for the areas that are
affected by either maximum or minimum constraints. These constraints
apply to the entire program and not to individual applicants.
However, in order to comply with these constraints, FTA must know
how much each applicant is applying for in each of these areas.
(1) Enter the total Federal dollar amount for the purchase/lease
of clean diesel vehicles.
(2) Enter the total Federal dollar amount for project elements
that fall into the category of purchasing hybrid electric or
battery-powered buses or constructing facilities designed to service
them.
(3) Enter the total Federal dollar amount for project elements
that fall into the category of retrofitting or replacing bus engines
that do not meet the clean air standards of the EPA.

Note: Because of the uncertainty of how many grantees will
apply, the actual amount that a grantee receives in an apportionment
may be different from the amount requested in the application that
was submitted. Furthermore, because clean diesel and retrofit/
replacement of bus engines are subject to maximum constraints, the
amounts specifically apportioned for those purposes may not resemble
the proportionality of the application. For example, suppose Grantee
A's application included $500,000 for clean diesel and $100,000 for
a compressed natural gas bus. If the 35 percent ceiling for clean
diesel is exceeded by the total applications, Grantee A may only be
allowed $50,000 to be used specifically for clean diesel because of
the ceiling. The remainder of the funds apportioned to Grantee A
(say, $300,000) would have to be used in areas without a maximum
constraint, i.e., in areas other than clean diesel or retrofit/
replacement of bus engines if applied for.

IV. Certification

The chief executive officer or the general manager of the
transit agency should sign this certification.
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Issued on: August 22, 2001.
Jennifer L. Dorn,
Administrator, Federal Transit Adminstration.

[FR Doc. 01-21724 Filed 8-27-01; 8:45 am]
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