[Federal Register Volume 71, Number 176 (Tuesday, September 12, 2006)]
[Notices]
[Pages 53745-53752]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-15022]
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DEPARTMENT OF TRANSPORTATION
Federal Transit Administration
[Docket No: FTA-2006-23511]
Notice of Proposed Agency Guidance and Request for Comments on
the Eligibility of Joint Development Improvements Under Federal Transit
Law
AGENCY: Federal Transit Administration (FTA), DOT.
ACTION: Notice of proposed guidance with request for comment.
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SUMMARY: The Federal Transit Administration (FTA) seeks public comment
on the following proposed guidance on joint development capital
projects funded by the Federal Transit Administration. The Safe,
Accountable, Flexible, Efficient Transportation Equity Act of 2005: A
Legacy for Users (SAFETEA-LU) enacted certain amendments to the
definition of the term ``capital project'' as used in 49 U.S.C.
5302(a)(1)(G) relating to ``joint development'' activities by
recipients of Federal funds under 49 U.S.C. 5301 et seq. (Federal
Transit Law). The Federal Transit Administration (FTA) proposes to
adopt the following guidance in accordance with the procedures for
notice and an opportunity for the public to comment set forth at 49
U.S.C. 5334(l) and FTA's Notice of Final Policy Statement for
Implementation of Notice and Comment Procedures for Documents Imposing
``Binding Obligations,'' as published in the Federal Register on June
5, 2006. The following proposed guidance seeks to ensure maximum
benefit to the people who ride public transportation, to FTA grantees
that choose to sponsor joint development improvements (the project
sponsor), and to their joint development partners by (i) Affording FTA
grantees maximum flexibility within the law to work with the private
sector and others for purposes of joint development, (ii) generally
deferring to the decisions of the project sponsor, negotiating and
contracting at arm's length with third parties, to utilize Federal
Transit funds and program income for joint development purposes, and
(iii) promoting transit-oriented
[[Page 53746]]
development, subject to the broad parameters set forth herein.
DATES: Comments must be received by October 12, 2006. Late-filed
comments will be considered to the extent practicable.
ADDRESSES: To ensure your comments are not entered more than once into
the DOT Docket, please identify your submissions by the following
docket number: FTA-2006-23511. Please make your submissions by only one
of the following means:
Web site: http://dms.dot.gov. Follow the instructions for
submitting comments on the DOT electronic docket site.
Web Site: http://dms.dot.gov. Follow the online
instructions for making submissions to the DOT electronic docket site.
Fax: 1-202-493-2478.
U.S. Post or Express Mail: Docket Management System, U.S.
Department of Transportation, 400 Seventh Street, SW., Nassif Building,
Room PL-401, Washington, DC 20590-001.
Hand Delivery: To the Docket Management System; Room PL-
401 on the plaza level of the Nassif Building, 400 Seventh Street, SW.,
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal Holidays.
Instructions: All submissions must make reference to the ``Federal
Transit Administration'' and include the docket number for this notice
set forth above. Due to security procedures in effect since October
2001 regarding mail deliveries, mail received through the U.S. Postal
Service may be subject to delays. Parties making submissions responsive
to this notice should consider using an express mail firm to ensure the
prompt filing of any submissions not filed electronically or by hand.
Note that all submissions received, including any personal information
therein, will be posted without change or alteration to http://dms.dot.gov.
Docket: For access to the DOT docket to read materials relating to
this notice, please go to http://dms.dot.gov at any time or to the
Docket Management System.
FOR FURTHER INFORMATION CONTACT: For program questions, please contact
Robert Tuccillo at (202) 366-4050. For legal questions, please contact
Jayme Blakesley at (202) 366-0304. The principal office of FTA is
located at 400 Seventh Street, SW., Washington, DC 20590-0001. Office
hours are from 8:30 a.m. to 6 p.m., Monday through Friday, except
Federal holidays.
SUPPLEMENTARY INFORMATION:
Statement of Policy
Through this guidance, FTA interprets the definition and operation
of the term ``capital project'' as defined at 49 U.S.C. 5302(a)(1)(G),
and as amended by Section 3003(a) of the Safe, Accountable, Flexible,
Efficient Transportation Equity Act: A Legacy for Users (``SAFETEA-
LU''). This amendment permits FTA to issue public transportation grants
``for the construction, renovation, and improvement of intercity bus
and intercity rail stations and terminals,'' including the
construction, renovation, and improvement of commercial revenue-
producing intercity bus stations or terminals. In doing so, it modifies
the underlying policy of joint development improvements, and therefore
enhances the ability of FTA grantees to work with the private sector
and others for purposes of joint development. To ensure maximum benefit
to the people who ride public transportation, to FTA grantees that
choose to sponsor joint development improvements (the ``project
sponsor''), and to their joint development partners, the following
guidance (i) seeks to afford FTA grantees maximum flexibility within
the law to work with the private sector and others for purposes of
joint development, (ii) generally will defer to the decisions of the
project sponsor, negotiating and contracting at arm's length with third
parties, to utilize Federal transit funds and program income for joint
development purposes, and (iii) aims to promote transit-oriented
development, subject to the broad parameters set forth herein.
Proposed Guidance Text
I. Eligibility Criteria
a. Definition of ``Capital Project''
Federal Transit Law defines a ``capital project'' for joint
development as follows:
A public transportation improvement that enhances economic
development or incorporates private investment, including commercial
and residential development, pedestrian and bicycle access to a
public transportation facility, construction, renovation, and
improvement of intercity bus and intercity rail stations and
terminals, and the renovation and improvement of historic
transportation facilities, because the improvement enhances the
effectiveness of a public transportation project and is related
physically or functionally to that public transportation project, or
establishes new or enhanced coordination between public
transportation and other transportation, and provides a fair share
of revenue for public transportation that will be used for public
transportation.
49 U.S.C. 5302(a)(1)(G).
This definition establishes the following criteria for determining
whether a joint development improvement is eligible for funding
pursuant to a program established under 49 U.S.C. 5301 et seq. (the
``Federal Transit Law''): The public transportation improvement must
(i) Enhance economic development or incorporate private investment;
(ii)(a) Enhance the effectiveness of a public transportation project
and relates physically or functionally to that public transportation
project, or (b) establish new or enhanced coordination between public
transportation and other transportation; and (iii) provide a fair share
of revenue for public transportation that will be used for public
transportation. In addition, a person making an agreement to occupy
space in a facility under this subparagraph shall pay a reasonable
share of the costs of the facility through rental payments and other
means. 49 U.S.C. 5302(a)(1)(G)(i).
Joint development improvements will be eligible for FTA funding
only if they satisfy the criteria set forth above, and do not fall
within the exclusion detailed at 49 U.S.C. 5302(a)(1)(G)(ii), which
excludes the construction of a commercial revenue-producing facility
(other than an intercity bus station or terminal) or a part of a public
facility not related to public transportation.
b. ``Enhances Economic Development or Incorporates Private Investment''
As noted above, it is a threshold requirement for Federal funding
of a public transportation improvement as joint development that such
improvement either (i) Enhance economic development or (ii) incorporate
private investment.\1\
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\1\ In accordance with the statute's use of the disjunctive
``or,'' rather than the conjunctive ``and,'' FTA shall determine
that a transportation improvement satisfies the threshold
requirement for funding as joint development if the transportation
improvement either (i) Enhances economic development or (ii)
incorporates private investment (the disjunctive), and shall not
require that the transportation improvement satisfy each of (i) and
(ii) (the conjunctive).
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i. ``Enhances Economic Development''
This criterion requires that a joint development improvement
enhance economic development. A grantee may satisfy this criterion by
demonstrating that the joint development improvement will add value to
privately-or publicly-funded economic development activity occurring in
close proximity to a public transportation facility.
[[Page 53747]]
ii. ``Incorporates Private Investment''
Any joint development improvement that incorporates private
investment will satisfy this criterion. Private investment need not be
monetary; it may take the form of cash, real property, or other benefit
to be generated initially or over the life of the joint development
improvements. FTA will not set a monetary threshold. The amount and
form of private investment shall be negotiated by the parties to the
joint development improvement.
c. ``Enhances the Effectiveness of a Public Transportation Project''
Any reasonable forecast of joint development impacts that enhance
the effectiveness of a public transportation project will satisfy this
criterion. These impacts may include, but are not limited to, any of
the following: increased ridership, shortened travel times, and
lessened or deferred transit operating or capital costs.
d. ``Related Physically or Functionally''
The disjunctive requirement of physical ``or'' functional
relationship provides that a joint development improvement may be built
separately from, but in functional relationship to, a public
transportation project. Therefore, a joint development improvement
satisfies this element if it is related physically or functionally to a
public transportation project.
i. ``Physically Related''
A joint development improvement is ``physically related'' to a
public transportation project if it provides a direct physical
connection to public transportation services or facilities.
Illustrative, but not exhaustive, examples of physical relationships
include (i) projects built within or adjacent to public transportation
facilities and (ii) projects using air rights over public
transportation facilities.
ii. ``Functionally Related''
A joint development improvement is ``functionally related'' to a
public transportation project if by activity and use, with or without a
direct physical connection, it (i) enhances the use of, connectivity
with or access to public transportation; or (ii) provides a
transportation-related service (such as, but not limited to, remote
baggage handling or shared ticketing) or community services (such as
daycare or health care) to the public. Considerations include a
reduction in travel time between the joint development project and the
public transportation facility, reasonable access between the joint
development project and the public transportation facility, and
increased trip generation rates resulting from the relationship between
the joint development project and the public transportation facility.
While the functional relationship test of activity and use permits
the use of FTA funds for joint development improvements located outside
the structural envelope of a public transportation project, and may
extend across an intervening street, major thoroughfare or unrelated
property, functional relationships should not extend beyond the
distance most people can be expected to safely and conveniently walk to
use the transit service (in certain cases, for example, within a radius
of 1,500 feet around the center of the public transportation project).
e. ``Establishes New or Enhanced Coordination Between Public
Transportation and Other Transportation'' \2\
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\2\ Subsection (e), ``New or Enhanced Coordination,'' explains
the second method for complying with a disjunctive requirement. As
explained in section (I)(d) of this document, a joint development
improvement may satisfy this requirement by (i) Relating physically
or functionally to a public transportation project or (ii)
establishing new or enhanced coordination between public
transportation and other transportation.
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Any reasonable forecast of joint development impacts that establish
new or enhanced coordination between public transportation and other
transportation will satisfy this criterion. FTA will accept any
reasonably supported judgment of new or enhanced coordination from the
project sponsor.
i. ``New or Enhanced Coordination''
To establish new or enhanced coordination, a joint development
improvement must create or enhance the physical or functional
connections between public transportation and other transportation.\3\
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\3\ This requirement is similar to, but not the same as, the
requirement of physical or functional relationship described at
subsection (d)(i) and (ii). The two are distinct, disjunctive
requirements, but they share common criteria. A project could
satisfy both requirements, but need only satisfy one to qualify for
funding as a joint development improvement. Visualized as such, the
disjunctive requirement would appear as a Venn diagram--separate
requirements with overlapping criteria.
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Examples of physical connections that establish new or enhanced
coordination include, but are not limited to, proximate or shared
ticket counters, termini, park-and-ride lots, taxicab bays, passenger
drop-off points, waiting areas, bicycle paths and sidewalks connecting
public transportation to non-transportation facilities. Projects that
shorten the distance between public transportation termini and other
transportation shall be presumed to enhance coordination.
Examples of functional connections that establish new or enhanced
coordination include, but are not limited to, shared or coordinated
signage, schedules, and ticketing.
ii. ``Public Transportation''
Section 5307(a)(7) of Title 49 defines ``public transportation'' as
``transportation by a conveyance that provides regular and
continuing general or special transportation to the public, but does
not include schoolbus, charter, or intercity bus transportation or
intercity passenger rail transportation provided by the entity
described in chapter 243 \4\ (or a successor to such entity).''
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\4\ National Railroad Passenger Corporation (``Amtrak'')
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iii. ``Other Transportation''
FTA interprets the term ``other transportation,'' as used in 49
U.S.C. 5307(a)(1)(G), to mean all forms of transportation that are not
public transportation, including, but not limited to, airplane, school
bus, charter bus, sightseeing vehicle, intercity bus and rail,
automobile, taxicab, bicycle and pedestrian transportation.
f. ``Provides a Fair Share of Revenue for Public Transportation That
Will Be Used for Public Transportation''
The third criterion for determining whether a joint development
improvement is eligible for funding pursuant to a program established
under the Federal Transit Law is that the improvement ``provides a fair
share of revenue for public transportation that will be used for public
transportation.'' \5\ 49 U.S.C. 5302(a)(1)(G). FTA will not define the
term ``fair share of revenue,'' nor will it set a monetary threshold.
What is a fair share of revenue, and what form it should take,\6\ shall
be negotiated between the parties involved in the joint development
improvement. The only requirements are (i) That the
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public transportation provider receives a fair share of revenue, (ii)
that such revenue be used for public transportation, and (iii) that the
project sponsor obtain a written opinion of counsel or other advisor
(or FTA's agreement) that the share of revenue to public transportation
is fair. This allows a public transportation provider to negotiate for
financial benefits in exchange for the benefits it will convey through
the joint development improvement.
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\5\ This criterion should not be confused with the requirement
of 49 U.S.C. 5302(a)(1)(G)(ii) that ``a person making an agreement
to occupy space in a facility under this subparagraph shall pay a
reasonable share of the costs of the facility through rental
payments and other means.''
\6\ For example, ``fair share of revenue'' need not be a direct
payment of revenue by an intercity bus provider to a transit agency
but may take the form of an increase in revenues received by a
transit agency, whether in its capacity as landlord or otherwise, as
a result of enhanced passenger traffic created by the service of a
jointly developed facility by an intercity bus provider, provided
that the transit agency and intercity bus provider together
designate and report to FTA the source of such ``fair share of
revenue.'' FTA grantees shall expend the ``fair share of revenue''
in accordance with the common grant rule of 49 CFR 18.1-18.52.
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g. ``Reasonable Share of the Costs of the Facility''
While not a criterion to determine eligibility, as noted above, it
is nonetheless required that any ``person making an agreement to occupy
space in a facility under [49 U.S.C. 5302(a)(1)(G)] shall pay a
reasonable share of the costs of the facility through rental payments
and other means.'' FTA shall not require a specific valuation
methodology and shall accept any reasonable valuation methodology used
by the grantee to determine a reasonable share of the costs of the
facility.
II. Eligible Activities
Subject to the eligibility criteria detailed at section (II) above,
joint development improvements expressly include the following:
Commercial and residential development;
Pedestrian and bicycle access to a public transportation
facility;
Construction, renovation, and improvement of intercity bus
and intercity rail stations and terminals; and
Renovation and improvement of historic transportation
facilities.
49 U.S.C. 5302(a)(1)(G). These and other joint development
improvements will be eligible for FTA funding if they satisfy the
criteria set forth above, and do not fall within the exclusion detailed
at 49 U.S.C. 5302(a)(1)(G)(ii), which excludes the construction of a
commercial revenue-producing facility (other than an intercity bus
station or terminal) or a part of a public facility not related to
public transportation.\7\
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\7\ Many aspects of commercial and residential development will
be excluded by 49 U.S.C. 5302(a)(1)(G)(ii), which makes ineligible
for FTA financial assistance the ``construction of a commercial
revenue-producing facility (other than an intercity bus station or
terminal) or a part of a public facility not related to public
transportation.'' It is important to note, however, that commercial
and residential development is not excluded wholesale. For example,
space in an FTA-funded facility may be made available for commercial
revenue-producing activities and for connections to revenue
producing activities. Similarly, non-commercial, non-revenue-
producing aspects of commercial and residential developments may be
eligible for FTA financial assistance, subject to the criteria
detailed at section (II).
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Costs related to a joint development improvement are only eligible
for Federal Transit funding pursuant to a budget contained in an
approved grant. FTA cannot approve funding for costs associated with a
joint development improvement that are not contained in an approved
grant budget. FTA Regional Administrators approve joint development
proposals as part of the grant approval process.
Eligible costs for joint development improvements include, but are
not limited to, the following:
a. Real Estate Acquisition, including the acquisition of real
property and structures thereon; \8\
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\8\ Note that certain costs in connection with real estate
acquisition (such as costs associated with eminent domain and
relocation assistance) shall be eligible, as provided by the
respective statutes and regulations.
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b. Demolition of Existing Structures;
c. Site Preparation;
d. Building Foundations, including substructure improvements for
buildings constructed over transit facilities;
e. Utilities, including utility relocation and construction;
f. Walkways, including bicycle lanes and pedestrian connections and
access links between public transportation services and related
development;
g. Open Space, including site amenities and related streetscape
improvements such as street furniture and landscaping;
h. Safety and Security Equipment and Facilities, including
lighting, surveillance and related intelligent transportation
applications;
i. Construction, renovation, and improvement of bus and intercity
rail stations and terminals;
j. Facilities that Incorporate Community Services such as daycare
or health care;
k. Capital Project, and Equipment, for an Intermodal Transfer
Facility or Transportation Mall, including acquisition of facilities
and equipment, roadbeds, tracks and bus ramps, pedestrian concourses,
loading shelters, parking facilities, park-and-ride services,
improvements of existing bus or rail transit terminals, stations, major
transfer points, and shelters as well as other facilities directly
related to the linking of public transportation facilities with other
modes of transportation;
l. Furniture, Fixtures and Equipment (FFE): Transportation-related
FFE are eligible costs in all cases. However, due to the exclusion of
commercial revenue-producing facilities (other than an intercity bus
station or terminal) and public facilities not related to public
transportation at 49 U.S.C. 5302(a)(1)(G)(ii), FFE related to
commercial revenue-producing facilities (other than an intercity bus
station or terminal) or public facilities not related to public
transportation are considered ineligible;
m. Parking, including parking improvements with a public
transportation justification and use or an intercity bus or intercity
rail justification and use in connection with joint development; and
n. Project Development Activities, including design, engineering,
construction cost estimating, environmental analysis, real estate
packaging and financial projections (operating income and expenses,
debt service and cash flow analysis), and negotiations to secure
financing and tenants;
o. Professional Services, including reasonable and necessary costs
incurred to hire professionals to prepare or perform items a through n
above, or to assist the grantee in reviewing the same.
III. Ineligible Activities
a. Construction of a Commercial Revenue-Producing Facility
Eligible costs do not include construction of commercial revenue
producing facilities (other than an intercity bus station or terminal)
or part of a public facility not related to public transportation.
IV. Federal Requirements
FTA's Master Agreement contains the standard terms and conditions
governing the administration of a project supported with Federal
assistance awarded by FTA through a grant agreement or cooperative
agreement with the recipient, or supported by FTA through a
Transportation Infrastructure (TIFIA) Loan, loan guarantee, or line of
credit with the recipient. Not every provision of the Master Agreement
will apply to every project for which FTA provides Federal assistance
through a grant agreement or cooperative agreement. The type of
project, the Federal laws and regulations authorizing Federal
assistance for the project, and the legal status of the recipient as a
State or local government, private non profit entity, or private for
profit entity will determine which Federal laws, regulations, and
directives apply. Federal laws, regulations, and directives that do not
apply will not be enforced. The recipient shall comply with all
applicable Federal laws, regulations, and directives, except to the
extent that FTA determines otherwise in writing. Any violation of a
Federal law,
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regulation, or directive applicable to the recipient or its project may
result in penalties to the violating party. Applicable crosscutting
requirements likely to apply to joint development improvements include,
but are not limited to, the following:
a. Ground Lease or Transfer of Federally Assisted Real Estate
If the joint development improvement involves a ground lease or
transfer of federally-funded real estate and there is no Federal
assistance for new improvements, then the following requirements apply
to the lessee or transferee and must be incorporated into the lease or
the conveyance instrument:
i. Language found at 49 CFR 26.7 binding the lessee or transferee
not to discriminate based on race, color, national origin, or sex;
ii. Language found at 49 CFR 27.7; 27.9(b) and 37 binding the
lessee or transferee not to discriminate based on disability and
binding the same to compliance with the Americans with Disabilities Act
with regard to any improvements constructed; and
iii. Language contained in FTA's Master Agreement, updated annually
in October, particularly relating to conflicts of interest and
debarment and suspension.
b. Federally Assisted Construction of Joint Development Improvements
If the construction of improvements is also federally assisted,
then the following requirements will apply and must be incorporated
into the lease or the conveyance or encumbrance instrument:
i. Buy America--language making it clear that the steel, iron, and
manufactured goods used in the joint development project are produced
in the United States, as described in 49 U.S.C. 5323(j) and 49 CFR part
661;
ii. Planning and Environmental Analysis--language making it clear
that the grantee must comply with, and the joint development project is
subject to the requirements of:
A. The FHWA/FTA metropolitan and statewide planning regulations at
23 CFR part 450;
B. The National Environmental Policy Act of 1969, as amended, 42
U.S.C. 4321 et seq.;
C. Executive Order No. 12898, ``Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations,'' 59 FR 7629, Feb. 16, 1994;
D. FTA statutory requirements on environmental matters at 49 U.S.C.
5324(b); Council on Environmental Quality regulations on compliance
with the NEPA, 40 CFR part 1500 et seq.;
E. FHWA/FTA regulations, ``Environmental Impact and Related
Procedures,'' 23 CFR part 771;
F. Section 106 of the National Historic Preservation Act, 16 U.S.C.
470f, involving historic and archaeological preservation; Advisory
Council on Historic Preservation regulations on compliance with Sec.
106, ``Protection of Historic and Cultural Properties,'' 36 CFR part
800; and
G. restrictions on the use of certain publicly owned lands and
historic resources unless the FTA makes the specific findings required
by 49 U.S.C. 303.
iii. Cargo Preference--language making it clear that items imported
from abroad and used in the joint development were shipped
predominantly on U.S.-flag ships and that the project complies with 46
CFR part 381, to the extent these regulations apply to the joint
development;
iv. Seismic Safety--language certifying that a structure conforms
to seismic safety standards, as contained in 49 CFR part 41;
v. Energy Assessments--Language making it clear that the
transferee(s) or joint developer agrees to perform a mandatory, energy
assessment as prescribed by 23 CFR part 771 and 42 U.S.C. 8373(b)(1)
for any buildings constructed, reconstructed or modified with FTA
assistance. The assessment shall be incorporated into the Environmental
Impact Statement or Environmental Assessment, if the project has one;
otherwise the assessment shall be provided with the application for FTA
assistance;
vi. Lobbying--49 CFR part 20;
vii. Labor Protection--Language making it clear that the transferee
or joint developer will adhere to labor protection requirements
applying to Federal projects, such as Davis-Bacon--49 U.S.C. 5333(a)
and 40 U.S.C. 3141 et seq., and 29 CFR part 5; Copeland ``Anti-
Kickback'' Act as amended, 18 U.S.C. 874 and 29 CFR part 3; and
Contract Work Hours and Safety Standards Act, 40 U.S.C. 3701 et seq,
and 29 CFR part 5 and at 40 U.S.C. 3704; as well as 49 U.S.C. 5333(b)
concerning protection of transit employees;
viii. Civil Rights Requirements--49 U.S.C. 5332 and DOT
implementing regulations at 49 CFR part 21 (effecting Title VI of the
Civil Rights Act of 1964), 49 CFR 26 (participation by Disadvantaged
Business Enterprises in DOT financial assistance programs) and 49 CFR
parts 27 and 37 (respectively, nondiscrimination on the basis of
disability in programs or activities receiving Federal financial
assistance and transportation services for individuals with
disabilities);
ix. Program Fraud--grantees agree to comply with Program Fraud
Civil Remedies Act of 1986, as amended, 31 U.S.C. 3801 et seq. and 49
CFR part 31. Penalties may apply for noncompliance;
x. Language making it clear that the level of Federal participation
in the joint development provides no U.S. Government obligation to
third parties in the project; and
xi. Uniform Relocation--If the federally-funded site to be improved
is occupied by other than the grantee and the occupant is displaced,
the transferee(s) or joint developer must comply with 42 U.S.C. 4601 et
seq. and the regulations at 49 CFR part 24.
c. National Environmental Policy Act (NEPA)
In any instance in which FTA determines that NEPA applies to the
joint development, the level of environmental analysis will depend upon
the complexity of the project and its likely impacts. In some
instances, minimal review will be necessary, in which case FTA may
issue a Categorical Exclusion. Generally, however, joint development
activities that portend significant environmental impacts will
necessitate the preparation of an Environmental Assessment or an
Environmental Impact Statement. FTA is available to provide guidance on
the environmental review process. See generally the FTA Environmental
Impact and Related Procedures at 23 CFR part 771.
V. Eligibility Procedures
Before becoming eligible for FTA funding, a joint development
improvement must be approved by the FTA Regional Administrator, or his
designee, responsible for the project sponsor's locality. Only FTA
grantees may sponsor a joint development improvement. The project
sponsor may submit a joint development proposal at any time. FTA
approval shall be contingent upon the project sponsor certifying that
the joint development improvement conforms to the criteria set forth
above and that the project conforms to the requirements of the common
grant rule found at 49 CFR 18.31. In the event that the project does
not conform to 49 CFR 18.31, FTA may approve the project if the project
sponsor submits an alternative certification explaining compliance with
49 U.S.C. 5302(a)(1)(G) and 49 CFR 18.25(g)(4) and (5) together with
supporting documentation, in each case
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in form and substance satisfactory to FTA in its reasonable discretion.
The FTA Regional Administrator, or his designee, shall approve all
proposals that meet the criteria described herein. Like all projects
funded by FTA, joint development improvements are subject to the
applicable crosscutting requirements.
There are two methods for seeking approval for a joint development
project. In all cases, the project sponsor must submit a completed
Joint Development Checklist and proposed Joint Development Agreement.
By submitting a completed Joint Development Checklist, the project
sponsor shall certify that the proposed joint development improvement
conforms to the criteria of 49 U.S.C. 5302(a)(1)(G) as outlined above.
For an expedited review, the joint development proposal shall
include a signed Certificate of Compliance. By signing the Certificate
of Compliance, the project sponsor shall certify, among other things,
that the proposed joint development improvement conforms to the
requirements of 49 CFR 18.31.
If a project sponsor seeks a more individualized review of the
project, a joint development proposal shall include an explanation of
compliance with 49 U.S.C. 5302(a)(1)(G) and 49 CFR 18.25(g)(4) and (5)
(the ``alternative certification'') with supporting documentation.
The Joint Development Checklist and Certificate of Compliance are
attached hereto.
VI. Real Property
Real property acquired by a grantee or subgrantee pursuant to 49
U.S.C. 5302(a)(1)(G) shall be governed by 49 U.S.C. 5334(h)as amended,
and subject to the obligations and conditions set forth in 49 CFR 18.31
as amended, which require the grantee or subgrantee to request
disposition instructions from FTA whenever real property is no longer
needed for the originally authorized purpose.\9\
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\9\ FTA shall rely on the parties to joint development
transactions, including, notably, transit agencies, to determine the
appropriate use and disposition of real property used on joint
development improvements, so long as such disposition and use
complies with applicable statutes and duly promulgated regulations
of FTA. For example, FTA shall no longer apply, and shall not
require it grantees to apply, its administratively-derived test of
``highest and best transit use'' (or any other tests) for
determining the value of real property used in FTA-funded joint
developments, including the disposition of real property connected
to a joint development improvement. In the past, FTA relied on 49
CFR 18.25(g) as its authority for requiring (and determining in its
discretion) the ``highest and best transit use'' of such property.
No such requirement is expressly authorized or required by 49 CFR
18.25(g), however.
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VII. Applicability of Third Party Contracting Requirements
FTA's third party contracting requirements, which appear in FTA
Circular 4220.1E, have limited applicability to joint development
projects. As described on page 12 of Circular 4220.1E, the third-party
contracting requirements must apply to the federally funded
construction aspects of joint development. With regard to revenue
contracts as defined in the Circular, FTA will work with grantees on a
case-by-case basis to craft approaches that satisfy the statutory and
regulatory requirements while preserving the benefits of this
innovative contracting strategy to the maximum possible extent.
If a contract between a grantee and a third party involving a joint
development project is not a construction contract or a revenue
contract as defined by Circular 4220.1E, then such contract is not
covered by FTA's third party contracting requirements. Paragraph 7.n.
of Circular 4220.1E defines ``revenue contracts'' as ``those third
party contracts whose primary purpose is to either generate revenues in
connection with a transit related activity or to create business
opportunities utilizing an FTA funded asset.''
Revenue contracts in joint development projects that do not meet
this primary purpose test are not covered by the third party
contracting requirements. For example, third party contracts to manage,
operate, and/or maintain intercity bus or intercity rail terminals that
are part of FTA-funded joint development projects or tenancy agreements
with third party intercity bus or intercity rail operators are not
covered revenue contracts. The primary purpose of such contracts is to
carry out the congressional intent to give grantees the flexibility to
integrate intercity rail and intercity bus terminals and their related
services into FTA-funded joint development projects.
Even in situations not covered by the third party contracting
requirements, FTA generally favors full and open competition. However,
where the third party contracting requirements are not involved, FTA
will leave it to the full discretion of the grantees to determine the
appropriate extent and nature of competition, if any, for such
contracts. For example, in cases involving management of intercity bus
or rail terminals or tenancy agreements in those terminals, FTA
recognizes that given the unique nature of the national intercity rail
and bus systems, a competitive procurement process for such contracts
may not be appropriate.
VII. Certificate of Compliance
To ensure compliance with 49 CFR 18.31 and other Federal
requirements related to joint development improvements, and the
acquisition, use and disposition of real property for such
improvements. FTA shall require project sponsors to sign a Certificate
of Compliance or, in lieu of such certificate, an alternative
certification explaining compliance with 49 U.S.C. 5302(a)(1)(G) and 49
CFR 18.25(g)(4) and (5) with supporting documentation. By signing the
Certificate of Compliance, the project sponsor shall certify, among
other things, that the proposed joint development improvement conforms
to the requirements of 49 CFR 18.31.
IX. Satisfactory Continuing Control
For purposes of this guidance and the Certificate of Compliance,
``satisfactory continuing control'' shall not mean complete operating
or managerial control of a joint development facility. In determining
whether ``satisfactory continuing control'' with respect to a joint
development capital project is maintained, the project sponsor and FTA
shall consider, as a primary factor, whether the project sponsor has
the right and power to direct that such project shall be used for
activities eligible for funding under Federal Transit Law (49 U.S.C.
53).
Appendix A--Proposed Joint Development Checklist
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Appendix B--Proposed Certificate of Compliance
Certificate of Compliance
Effective as of the date hereof, the undersigned hereby
certifies and covenants to the Federal Transit Administration
(``FTA'') as follows:
1. Title. Subject to the obligations and conditions set forth in
49 CFR 18.31, as amended, title to real property acquired under a
grant or subgrant for FTA Project Number----, [insert project title
here] (the ``Project''), shall vest in the undersigned or subgrantee
thereof (collectively or individually, as the case may be, the
``Grantee'').
2. Use. Except as otherwise provided by Federal statutes, real
property shall only be used for the originally authorized purposes
(which may include Joint Development purposes that generate program
income, both during and after the award period and used to support
public transportation activities) as long as needed for such
purposes, and that the Grantee shall not dispose of or encumber its
title or other interests.
3. Disposition. When real property acquired with funds provided
by FTA for the Project is no longer needed for the purpose
originally authorized by FTA, the Grantee shall request disposition
instructions from FTA and shall agree that, unless otherwise
authorized by FTA, such disposition shall be made in accordance with
applicable law, including without limitation 49 U.S.C. 5334(h) and
49 CFR 18.31.
4. Federal Interest. The Federal Government retains a Federal
interest in any real property, equipment, and supplies financed with
Federal assistance (``Project Property'') until, and to the extent
that, the Federal Government relinquishes its Federal interest in
such Project Property.
5. Incidental Use. Any incidental use of Project Property, as
determined by FTA, shall not exceed that permitted under applicable
Federal laws, regulations, and directives, including the
requirements of FTA's Master Agreement.
6. Encumbrance of Project Property. The Grantee covenants to FTA
as follows:
a. Written Transactions. The Grantee agrees that it will not
execute any transfer of title to the Project Property or enter into
an instrument legally binding on the Grantee that would encumber
Federal Interest in the Project Property.
b. Oral Transactions. The Grantee agrees that it will not
obligate itself in any manner to any third party with respect to
Project Property.
7. Notice to Joint Development Partner. The undersigned has
delivered to the Joint Development Partner a duly executed copy of
this certificate, dated as of the date hereof, receipt of which has
been acknowledged by the Joint Development Partner in writing to the
undersigned on or before the date of execution of the Joint
Development Agreement.
8. Other Actions. The Grantee (a) agrees that it will not take
any action that encumbers the Federal Interest in the Project
Property and (b) hereby affirms that each of its representations and
warranties set forth in the Master Agreement is true and correct in
all material respects as of the date hereof. The Grantee agrees that
nothing herein shall supersede, amend, modify or otherwise affect
the provisions, terms or conditions set forth in the Master
Agreement.
9. Definitions.
a. ``FTA'' shall have the meaning provided in the preamble of
this certificate.
b. ``Grantee'' shall have the meaning provided in section (2) of
this certificate.
c. ``Joint Development'' shall mean a capital project as defined
by 49 U.S.C. 5302(a)(1)(G) that is eligible for funding pursuant to
the terms and conditions set forth in [insert new Joint Development
circular number].
d. ``Joint Development Partner'' shall mean [insert definition].
e. ``Master Agreement'' shall mean that certain Master Agreement
by and between FTA and the Grantee, as authorized by 49 U.S.C. 53,
Title 23, United States Code (Highways), the National Capital
Transportation Act of 1969, as amended, the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy for Users,
the Transportation Equity Act for the 21st Century, as amended, or
other Federal laws that FTA administers, as the same may be lawfully
revised, superseded or supplemented from time to time.
f. ``Project'' shall have the meaning provided in section (1) of
this certificate.
g. ``Project Property'' shall have the meaning provided in
section (4) of this certificate.
10. No Estoppel. The undersigned agrees that acceptance of this
Certificate of Compliance by FTA shall not estop the Federal
government from initiating or conducting, and shall not be used as a
defense for, any investigation, audit or inquiry by the Federal
government following approval by FTA of the project.
Issued on the 5th day of September, 2006.
James S. Simpson,
Administrator.
[FR Doc. E6-15022 Filed 9-11-06; 8:45 am]
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