Passenger Rail Update

In this edition of the Passenger Rail Highlight we cover recent updates and guidance from the Federal Transit Administration (FTA) regarding implementation of changes to requirements for federal transit funding recipients and applicants provided under the recently passed Infrastructure and Investment Jobs Act, Public Law 117-58 (IIJA). First, FTA Administrator Nuria Fernandez issued a Dear Colleague Letter reminding transit agencies of new requirements regarding the establishment of Safety Committees. FTA also issued new proposed guidance regarding its Capital Investment Grants (CIG) program, while signaling more comprehensive changes to CIG policy guidance on the horizon.

FTA Dear Colleague Letter Reminds Transit Agencies of New Agency Safety Plan Requirements under IIJA

On February 17, 2022, FTA Administrator Nuria Fernandez issued a Dear Colleague Letter reminding transit agencies of changes under the IIJA to federal public transportation Agency Safety Plan (ASP) requirements under 49 U.S.C. § 5329(d). These changes under the IIJA include requiring that transit agencies that receive Section 5307 funding and that serve a large urbanized area must convene a Safety Committee through a joint labor-management process, as well as establishment of risk reduction performance targets. The substantive requirements for Safety Committees and risk reduction performance targets are provided under 49 U.S.C. § 5329(d). A redline document of the changes under the IIJA to Section 5329(d) is available here.

The Dear Colleague Letter notes that transit agencies must establish a Safety Committee compliance with 49 U.S.C. § 5329(d)(5) by July 31, 2022. Once established Safety Committees must “begin work to meet its responsibilities as soon as practicable.”  If the agency’s ASP was not developed in cooperation with frontline employee representatives, FTA expects the transit agency to update its ASP in cooperation with frontline employee representatives by December 31, 2022.

The Dear Colleague Letter states that transit agencies may choose to follow an existing collective bargaining process to establish and operate the required Safety Committee, provided that such a process complies with the new statutory requirements under 49 U.S.C. § 5329(d)(5). Performance targets for a risk reduction program will not be required to be in place until the FTA has updated the National Public Transportation Safety Plan to include these performance measures required under the IIJA.

FTA Proposes Changes to CIG Program Policy Guidance

On March 15, 2022, FTA issued a notice in the Federal Register of availability of initial guidance proposals (Guidance Proposals) for the CIG program. These Guidance Proposals would change the FTA’s current CIG policy guidance document (Interim Policy) in three ways: (1) CIG project eligibility; (2) requirements for CIG grant applicants regarding demonstration of progress toward achieving Transit Asset Management (TAM) targets; and (3) how applicants can request entry into the initial phase of the CIG “project development” process for bundles of CIG projects.

As background, FTA administers the CIG program, which provides New Starts, Small Starts, and Core Capacity discretionary funding grants to public agencies for transit capital projects. These grants are awarded pursuant to authorizing statute, 49 U.S.C. § 5309, as well as binding policy guidance developed by FTA. FTA’s current policy guidance for CIG grants, the Interim Policy, was published in 2016 and was intended to serve as interim guidance while the agency developed permanent final guidance in the wake of passage of the Fixing America’s Surface Transportation Act (FAST) in late 2015. Fast forwarding to July 2021, FTA published a Request for Information in the Federal Register seeking public comment on the CIG program implementation. Then, in November 2021, Congress passed the IIJA, which made substantive changes to the CIG program framework.

The three policy changes are described below:

            CIG Eligibility:

The IIJA changed the eligibility for both New Starts and Core Capacity projects. For Small Starts, the IIJA raised the maximum total project cost threshold from $300 million to $400 million, and raised the maximum amount a Small Starts applicant could seek from $100 million to $150 million. FTA explains in the Guidance Proposals that this change is self-effectuating as federal statutory law and is therefore not subject to notice and comment but is discussed in FTA’s Guidance Proposals for clarity and completeness.

With respect to Core Capacity grants, the IIJA extended grant eligibility to corridors that are projected to be at or over capacity within the next 10 years, rather than only 5 years as previously provided under 49 U.S.C. § 5309.  In order to account for this change, the FTA is proposing adjustments to the methodology it uses to assess future capacity constraints. FTA’s methodology assesses future expected capacity needs based on whether the corridor’s current peak ridership meets or exceeds certain thresholds, which are calculated differently for light/heavy rail and for commuter rail corridors. FTA is accordingly proposing to adjust these thresholds.

Specifically, for light rail and heavy rail passenger systems, the threshold used—peak loading level—is a ratio calculated by dividing the available train space during peak hour ridership by the number of passengers riding during the peak hour in the peak direction along the entire corridor. The threshold to meet to be eligible for Core Capacity grants is currently less than 5.7 square feet per passenger. The assumption is that with future ridership growth, this amount of space or less per passenger during peak periods indicates that additional capacity will be needed in five years. Because the IIJA extends the eligibility from 5 to 10 years, FTA is proposing to increase the peak loading level threshold to 10.8 square feet per passenger in peak hour and peak direction. The new threshold is based on recent research published through the Transit Cooperative Research Program that indicates 5.4 to 10.8 square feet of space per passenger is a comfortable loading level. The rationale for this change is that the longer (now 10 year) period in which a corridor may reach capacity requires the lowering of thresholds based on existing ridership. FTA also proposes to calculate the available train space in a manner that takes into account the fact that not all space on a railcar is useable by passengers.

For commuter rail corridors, FTA uses a different threshold for determining eligibility for Core Capacity Grants: whether at least 95% of seats are filled in peak hour in peak direction. FTA is proposing to lower this threshold to 80%, again on the basis that the longer 10-year period during which corridors may reach capacity to be eligible for Core Capacity grants requires lowering of the threshold based on existing ridership levels.

FTA currently verifies that proposed Core Capacity projects increase capacity by at least 10%, which is a condition of funding, by calculating the difference between the existing thresholds described above and these thresholds calculated using the expected increase in available train space. In the Guidance Proposals FTA proposes using the same methodology but new thresholds to verify capacity increases.

FTA assesses existing capacity needs based on passenger levels of service, which are categorized using particular ratings threshold breakpoints. These breakpoints follow in part the thresholds outlined above the determine eligibility. FTA proposes revising the breakpoints for level of service to adopt the revised thresholds FTA is proposing in the Guidance Proposals.

FTA also proposes to require Core Capacity project sponsors during Project Development phase to submit a proposed accounting of elements of the project that will constitute Core Capacity elements, versus elements that address state of good repair items, which are not eligible under Core Capacity grants but are eligible under the separate State of Good Repair program.

FTA emphasizes it its Guidance Proposals that the IIJA change to Core Capacity grants does not change the requirement that such grants are expected to fund substantial corridor-based capital investments in existing fixed guideways, rather than other types of system-wide improvements. FTA notes that it considers improvements along a trunk line with several branches to be an eligible Core Capacity corridor project. FTA also notes that investments in vehicles, station facilities, or parking by themselves are not eligible for Core Capacity projects, although they may be elements of a larger Core Capacity project.

In issuing the Guidance Proposals, FTA also indicated that it intends in the future to propose more comprehensive changes to its CIG program guidance, which will consider the comments received from its July 2021 Request for Information.

            Demonstrating Progress Toward Transit Asset Management Targets:

The IIJA revised the CIG program to require that applicants demonstrate that they have made progress toward transit asset management performance targets that federal law requires all FTA funding recipients to establish and report annually.  FTA has established state of good repair performance measures in its Transit Asset Management final rule for rolling stock, infrastructure, facilities, and equipment.

In the Guidance Proposals, FTA proposes that for any CIG applications through December 31, 2023, applicants must show that at least one of the rolling stock vehicle asset classes has met or done better than its target in at least one of the years for which reporting data is available through the recently established National Transit Database. On or after January 1, 2024, FTA proposes to use data from the previous three years available on the National Transit Database to determine if at least one of the rolling stock vehicle asset classes has met or done better than its target in at least one of those previous three years. If this is the case, FTA can determine that progress toward meeting the targets has been demonstrated and the CIG grant can be awarded. FTA proposes to use only rolling stock vehicle asset classes because the targets and performance reported to the National Transit Database are too inconsistent for other types of asset classes. However, FTA seeks comment on other means of determining progress toward transit asset management targets.

            Bundles of CIG Projects:

The IIJA created a new eligibility under the CIG program for project bundles, i.e. a series of projects that are being proposed at the same time or in phases. Project bundling is intended to assist in streamlining procurements for the applicant or enable time or cost savings for the project, but each project must be independently eligible for CIG funding, and the bundling of projects must enhance or increase the capacity of the transportation system.

FTA proposes to require project sponsors seeking to enter a bundle of CIG projects to submit additional information regarding the bundle for projects entering the development phase of FTA’s CIG program. This additional information includes identification of the specific type of CIG project for each project in the bundle and providing specific details for each project in the bundle if the projects will be pursued immediately together (for phased bundles, less information is required for subsequent phases). FTA also proposes to require applicants to describe in the application how the proposed CIG bundle of projects will streamline procurement or enable cost or time savings, and how the will together increase the capacity of the project sponsor’s total transportation system or the transportation system of the region the applicant serves. For existing projects that are currently in the project development phase and are connected to future projects, FTA proposes that project sponsors submit to FTA a letter explaining the bundle of CIG projects.

FTA notes that in the future it will provide a more comprehensive CIG Policy Guidance update that will propose how bundles of CIG projects can proceed through the evaluation and rating process and obtain a letter of intent or construction grant award.

The public is encouraged to comment FTA’s Guidance Proposals by submitting comments online via, by mail, or hand delivery to the U.S. Department of Transportation. The docket number that must be included in the submission is FTA-2021-0010. The deadline for public comments is April 14, 2022.

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