[Federal Register Volume 75, Number 106 (Thursday, June 3, 2010)]
[Proposed Rules]
[Pages 31383-31387]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-13423]



Federal Transit Administration

49 CFR Part 611

[Docket No. FTA-2010-0009]
RIN 2132-AB02

Major Capital Investment Projects

AGENCIES: Federal Transit Administration (FTA), DOT.

ACTION: Advance Notice of Proposed Rulemaking; request for comments.


SUMMARY: This advance notice of proposed rulemaking (ANPRM) seeks 
public comment regarding the Federal Transit Administration's (FTA) New 
Starts and Small Starts project justification criteria. In particular, 
FTA seeks public input on how to improve its calculation of ``cost 
effectiveness,'' including whether FTA should measure quantifiable 
benefits other than reduced travel time. In addition, FTA seeks comment 
on how it should evaluate environmental benefits and economic 
development effects. Information gathered from this ANPRM will inform 
FTA's broader effort, next year, to amend the regulations that govern 
its New Starts and Small Starts programs.

DATES: Comments must be received by August 2, 2010. Late-filed comments 
will be considered to the extent practicable. The public should know 
the dates, times, and locations of the first two public outreach 
sessions are as follows: (1) Monday, June 7, 4:30 p.m. to 6:30 p.m., 
EST, 500 South Salisbury Street, Raleigh, North Carolina (Raleigh 
Convention Center); (2) Tuesday, June 8, 2:30 p.m. to 4:30 p.m., PST, 
655 Burrard Street, Vancouver, British Columbia, Canada V6C 2R7 (Hyatt 
Regency Hotel).

FOR FURTHER INFORMATION CONTACT: Elizabeth Day, Office of Planning and 
Environment, (202) 366-5159; for questions of a legal nature, 
Christopher Van Wyk, Office of Chief Counsel, (202) 366-1733. FTA is 
located at 1200 New Jersey Avenue, SE., Washington, DC 20590. Office 
hours are from 9 a.m. to 5:30 p.m., EST, Monday through Friday, except 
Federal holidays.

ADDRESSES: You may submit comments identified by the docket number FTA-
2010-0009 by any of the following methods:

[[Page 31384]]

    1. Federal eRulemaking Portal: Go to http://www.regulations.gov. 
Follow the online instructions for submitting comments on the U.S. 
Government electronic docket site.
    2. Fax: 202-493-2251.
    3. Mail: U.S. Department of Transportation, 1200 New Jersey Ave., 
SE., Docket Operations, M-30, West Building Ground Floor, Room W12-140, 
Washington, DC 20590-0001.
    4. Hand Delivery: U.S. Department of Transportation, 1200 New 
Jersey Ave., SE., Docket Operations, M-30, West Building Ground Floor, 
Room W12-140, Washington, DC 20590 between 9 a.m. and 5 p.m., Monday 
through Friday, except Federal holidays.
    Instructions: You must include the agency name (Federal Transit 
Administration) and Docket number (FTA-2010-0009) for this notice at 
the beginning of your comments. You should submit two copies of your 
comments if you submit them by mail. If you wish to receive 
confirmation that FTA received your comments, you must include a self-
addressed stamped postcard. Note that all comments received will be 
posted without change to www.regulations.gov including any personal 
information provided and will be available to internet users. You may 
review DOT's complete Privacy Act Statement in the Federal Register 
published on April 11, 2000 (65 FR 19477). Docket: For access to the 
docket to read background documents and comments received, go to http://www.regulations.gov at any time or to the U.S. Department of 
Transportation, 1200 New Jersey Ave., SE., Docket Operations, M-30, 
West Building Ground Floor, Room W12-140, Washington, DC 20590 between 
9 a.m. and 5 p.m., EST, Monday through Friday, except Federal holidays.



    This ANPRM seeks new ideas through public comment on a funding 
program for new or expanded transit systems that involves a large 
amount of technical information and analysis. As such, this document is 
being issued to provide a general overview of FTA's current approach to 
evaluating and rating major capital investment projects (``New Starts'' 
and ``Small Starts'') in support of its funding decisions, and, to ask 
questions that will assist FTA in its development of a Notice of 
Proposed Rulemaking. Because this document avoids technical terminology 
and detailed discussion, it is necessary to refer to other sources 
where additional information can be obtained for commenters who would 
like to know more of the details behind FTA's current process. To aid 
in that effort, FTA will place all of the documents cited in this 
notice in the public docket at www.regulations.gov under the docket 
number for this rulemaking effort (FTA-2010-0009). Interested persons 
may also consult the FTA public Web site, http://www.fta.dot.gov, for 
further information on these subjects.


    The New Starts and Small Starts programs, established in Section 
5309(d) and (e) of Title 49, U.S. Code, are FTA's primary capital 
funding programs for new or extended transit systems across the 
country, including rapid rail, light rail, commuter rail, bus rapid 
transit, and ferries. Under this discretionary program, proposed 
projects are evaluated and rated as they seek FTA approval for a multi-
year federal funding commitment to finance project construction. 
Currently, overall ratings for New Starts and Small Starts proposed 
projects are based on summary ratings for two categories of criteria--
project justification and local financial commitment. Within these two 
categories, projects are evaluated and rated against several individual 
criteria specified in statute. Details on how projects are currently 
evaluated and rated are set forth in the FTA regulations at 49 CFR Part 
611, which can be found at the following web address: http://edocket.access.gpo.gov/cfr_2008/octqtr/49cfr611.htm.
    Several statutory changes since 49 CFR part 611 was first written 
have modified the evaluation process, including the Safe, Accountable, 
Flexible, Efficient Transportation Equity Act: A Legacy for Users 
(SAFETEA-LU) enacted on August 10, 2005, and the SAFETEA-LU Technical 
Corrections Act of 2008, signed on June 6, 2008. FTA's most recent 
policy guidance on the evaluation process (issued to address the 
SAFETEA-LU Technical Corrections Act), was announced on July 29, 2009 
and is available in the Federal Register at 74 FR 37763; it is also set 
forth in Appendix B of FTA's ``FY 2011 Annual Report on Funding 
Recommendations'' available at http://www.fta.dot.gov/publications/reports/reports_to_congress/publications_11092.html.
    This ANPRM seeks comment on three of the evaluation criteria under 
the project justification category: Cost effectiveness, environmental 
benefits, and economic development benefits. Although FTA also 
evaluates other statutory criteria for projects, those other criteria 
will be addressed in the notice of proposed rulemaking following this 

Cost Effectiveness

    Since April of 2005, FTA has had in place a budget decision 
approach that required at least a Medium rating on cost effectiveness 
for a project to be considered for funding in the President's annual 
    Members of the transit community criticized FTA's approach on the 
cost effectiveness criterion, and questioned the methodology FTA uses 
to calculate cost effectiveness. Specifically, the transit community 
expressed concern that receiving a Low- or Medium-low cost 
effectiveness rating ``trumped'' other project justification criteria 
established by law. Critics also noted that sometimes projects were 
designed to achieve a Medium cost effectiveness rating to remain in the 
funding pipeline while sacrificing other potentially important 
considerations, such as station locations and/or design features to 
accommodate ridership growth. On January 13, 2010, Secretary Ray LaHood 
announced the end of that approach. This new direction presents FTA 
with an opportunity to rethink how it evaluates cost effectiveness for 
projects seeking New Starts and Small Starts funding.
    While the other project justification criteria characterize the 
effectiveness of projects in addressing the objectives identified by 
the statute, cost effectiveness characterizes the extent to which 
benefits are in scale with project costs. In its current cost 
effectiveness measure, FTA includes the direct mobility benefits of the 
project, expressed as time savings. FTA defines mobility benefits as 
any measurable change in travel times, walking, waiting, transfers, and 
other attributes of travel on the transportation system. FTA's 
definition of mobility benefits includes time savings to highway users 
caused by congestion relief but FTA has not as yet been able to accept 
projections of highway time savings because of their unreliability and 
inconsistency. Instead, in determining cost effectiveness ratings, FTA 
credits all projects with an allowance for highway time savings that is 
equal to 20 percent of the project-specific transit time savings. FTA 
is sponsoring research on better methods to predict highway time 
savings so that project-specific highway time savings can be included 
in the mobility benefits that are compared to project costs.
    FTA has not included other impacts among the project-specific 
benefits used to compute the current cost effectiveness measure because 
of the difficulties in summing, in a common

[[Page 31385]]

unit of measurement, the broad range of other benefits. Instead, in 
determining cost effectiveness ratings, FTA credits all projects with 
an allowance for other benefits that is equal to 100 percent of the 
project-specific time savings. FTA is seeking comment in this ANPRM on 
ways to quantify and value other benefits so that they can be included 
as project-specific benefits, rather than a general allowance, in the 
comparison against project costs.
    For more information how FTA calculates cost effectiveness, see 
Appendix B of FTA's ``FY 2011 Annual Report on Funding 
Recommendations'' available at http://www.fta.dot.gov/publications/reports/reports_to_congress/publications_11092.html.
    In general, quantitative measures require evaluating the 
incremental (or added) benefits of implementing a proposed project 
against some alternative. FTA is seeking comment on what the basis for 
comparison should be. Currently, New Starts and Small Starts projects 
are evaluated against a ``baseline alternative,'' which is defined as 
the ``best that can be done'' to address identified transportation 
needs in the corridor without a major capital investment in new 
infrastructure. The baseline alternative generally includes lower cost 
actions such as traffic engineering, enhanced bus service and other 
transit operational changes, and modest capital improvements such as 
reserved lanes, park-and-ride lots, and transit terminals. Although 
less expensive than the proposed project, the baseline alternative may 
still result in substantial costs, particularly in complex study areas 
with significant transportation problems.
    Consistent with current law, FTA will continue to use cost 
effectiveness as one of the principal criteria for project 
justification. FTA is open to new ideas, however, regarding the 
direction the agency should take to improve how it evaluates cost 
effectiveness, including whether and how non-mobility benefits should 
be measured and how they could be calculated on a project-specific 
basis as part of that criterion, as well as how determinations of a 
baseline alternative could be improved if one continues to be used.

Questions on Cost Effectiveness

    FTA seeks specific comment on the following questions:
    1. How might FTA better evaluate cost effectiveness?
    2. What, if any, additional benefits such as environmental 
benefits, equity considerations (e.g., the social benefits of low 
income ridership), and benefits of economic development attributed to a 
specific project could FTA include in the measure of cost 
effectiveness? What specific benefits should be included in the 
calculation of cost effectiveness?
    3. If you believe that FTA should include other benefits in the 
measure of cost effectiveness, how can FTA best quantify those 
benefits? Please include specifics on how FTA would quantify and 
measure these benefits.
    4. Are there simpler measures of cost effectiveness that FTA could 
use? If so, what are they? Please be specific.
    5. How should FTA evaluate projects across cities with varying 
levels of transit service? In other words, should FTA continue to 
compare projects against a ``baseline alternative''? Should FTA 
consider additional benefit categories such as convenience for riders, 
reduced congestion, reduced travel time as a result of reduced 
congestion, reduction in the number of accidents due to reduced 
congestion, fuel costs (or other variable cost) savings for individuals 
who would be using the projects and/or the benefit to national security 
of additional transportation options? If so, how should these be 
    6. Should FTA measure the benefits of projects based on the opening 
year of those projects or retain the current methodology which is based 
on the planning forecast year (which is approximately 20 years in the 
future)? Please explain the rationale for your response. If 20-year 
estimates are used, should FTA require project sponsors to support the 
reasonableness of their land use forecasts 20 years into the future? If 
so, how might project sponsors support their conclusions? Should FTA 
consider using forecasting periods other than opening year or 20-year? 
If so, what forecast year should FTA consider, and why?

Environmental Benefits

    Since the environmental benefits criterion was first added as a 
project justification criterion in the Intermodal Surface 
Transportation Efficiency Act of 1991, FTA has attempted through 
various methods, with limited success, to meaningfully measure and 
compare the environmental benefits of transit projects in different 
environmental settings throughout the country.
    For a number of years, FTA used an air quality approach based on a 
regional forecast of the changes in vehicle miles of travel (VMT) for 
the proposed project compared to the New Starts baseline alternative in 
the forecast year. (See Appendix A in 49 CFR part 611 for more 
explanation of the baseline alternative.) The results of that approach 
proved unsatisfactory because any one project has only a minor effect 
on total regional air quality. The results also did not take into 
account the severity of the metropolitan area's air quality problems or 
the size of the population exposed to polluted air.
    Although FTA has focused solely on air quality for environmental 
benefits, the statute is written broadly enough to allow FTA to take 
into account other factors such as noise pollution, energy consumption, 
reductions in local infrastructure costs achieved through compact land 
use development, and the cost of suburban sprawl.
    To gain a sharper perspective on the issue of environmental 
benefits, FTA convened a two-day colloquium in October 2008 in which a 
number of experts discussed different types of environmental benefits 
associated with transit projects. The record of that meeting 
(``Comparing the Environmental Benefits of Transit Projects: 
Proceedings from a Colloquium--October 28 & 29, 2008'') is available at 
http://www.fta.dot.gov/documents/FTA_EnvironmentalBenefitProceedings.pdf and on compact disc through the 
Volpe National Transportation Systems Center. FTA is also actively 
participating in a Transit Cooperative Research Program study on the 
environmental benefits of transit projects. This work has helped to 
inform the questions posed below.
    Moreover, the President recently signed Executive Order 13514 
(``Federal Leadership in Environmental, Energy, and Economic 
Performance''; October 5, 2009), which is germane to evaluating and 
rating the environmental benefits of New Starts and Small Starts 
projects. As part of a broad strategy, E.O. 13514 obliges Federal 
agencies to advance integrated planning of infrastructure at regional 
and local levels; align Federal policies to promote sustainable 
technologies and opportunities for locally generated renewable energy; 
and take a leadership role in reducing greenhouse gas emissions. FTA 
seeks to incorporate the goals and objectives of E.O. 13514 into the 
New Starts and Small Starts programs to maximize the land use 
efficiencies created through locating transit projects in areas that 
facilitate sustainable development. The text of E.O. 13514 is available 
at http://edocket.access.gpo.gov/2009/pdf/E9-24518.pdf.

Questions on Environmental Benefits

    FTA seeks specific comment on the following questions:
    1. How might FTA better measure environmental benefits?
    2. In measuring environmental benefits, should FTA consider a broad

[[Page 31386]]

definition of environment, as does the National Environmental Policy 
Act, which includes consideration of both the human and natural 
environment? Or, should FTA focus on the environmental performance in 
specific areas such as air quality emissions, energy use, greenhouse 
gas emissions, or water quality? Should FTA look at project-specific 
environmental benefits such as change in energy use and/or pollutant 
emissions? Should FTA consider other characteristics such as assessing 
the degree to which a proposed New Starts project fits into a State or 
Regional Sustainability Plan or whether a transit agency's capital 
program is operating under an official Environmental Management System 
(EMS) or has attained the EMS certification of the International 
Standards Organization (ISO 14001)? Would it be best to have a 
combination? Please be specific in what metrics you think should be 
    3. Should the environmental benefits evaluation consider the steps 
a project sponsor takes to mitigate the construction impacts of New 
Starts projects in addition to the environmental effects of their 
operation? Should the origin and methods to obtain construction or 
vehicle materials; energy type and use; and water consumption be 
considered in the overall evaluation of environmental benefits?
    4. Should FTA consider the reduction in single occupant vehicle 
usage as part of its evaluation of environmental benefits? What method 
should be used to measure the changes in vehicle miles travelled 
resulting from implementation of a project? Please be specific about 
how FTA should measure this.
    5. Should FTA consider certification of the planned facility 
through the Leadership in Energy and Environmental Design (LEED) Green 
Building Rating System; low impact development of transit facilities; 
or energy production with windmills or solar panels?
    6. In measuring the environmental benefits of a project, how might 
FTA take into account the goals and objectives of Executive Order 
13514? Should a project be evaluated and rated on how well it maximizes 
the land use efficiencies created through locating the project in areas 
that facilitate sustainable development?
    7. To what extent, if any, can technology improvements--lower 
carbon transport technologies, the use of emerging light weight 
materials, improved engine designs, or bio-fuel applications, for 
example--be said to reflect environmental benefits of transit 
proposals? How would such improvements be measured and compared?
    8. Should environmental benefits be included in the cost 
effectiveness measure? How can environmental benefits be compared 
across projects, and incorporated into FTA funding decisions?

Economic Development Benefits

    FTA has defined economic development as the extent to which a 
proposed New Starts or Small Starts project is likely to enhance 
additional, transit-supportive development. Currently, FTA rates the 
economic development effects of major transit investments on the basis 
of the transit-supportive plans and policies in place and the 
demonstrated performance and impact of those policies. These ``on the 
ground'' indicators characterize the environment in which a project 
would be built and are not intended to predict future development 
    In order to guide future research in this area, FTA convened a 
panel of experts in late 2007 to consider the potential methodologies 
available for measuring the economic development effects of New Starts 
and Small Starts projects. Some experts on the panel noted that FTA may 
be able to achieve this goal in two ways: (1) Through the use of 
quantitative models to estimate the impacts of transit projects on land 
values; and (2) through the use of integrated transportation/land-use 
models to predict changes in land-use patterns that might result from 
transit projects and the various benefits associated with those 
changes. The record of that meeting (``Measuring the Economic 
Development Benefits of Transit Projects: Proceedings of an Expert 
Panel Workshop,'' March 2008) is available at http://www.fta.dot.gov/documents/Econ_Dev_Expert_Panel_Report.pdf. FTA is sponsoring two 
ongoing Transit Cooperative Research Program (TCRP) projects (Reference 
numbers H-39 and SH-12) to study the impact of transit on economic 
    FTA also issued a discussion paper on new, alternative ways of 
evaluating economic development effects in a Federal Register notice 
published on January 26, 2009. This paper (``Discussion Paper on the 
Evaluation of Economic Development,'' October 2008) is available at 
http://www.fta.dot.gov/planning/newstarts/planning_environment_5615.html. FTA received comments on the discussion paper from eleven 
respondents and has considered those comments in formulating the 
questions listed below.

Questions on Economic Development Effects

    FTA seeks specific comment on the following questions:
    1. How might FTA better measure the impact of transit on local land 
use patterns and/or economic development?
    2. Should FTA continue to use its current approach for evaluating 
the economic development effects of major transit investments?
    3. Should FTA define economic development differently? If so, how?
    4. Should FTA use either a qualitative or a quantitative approach 
(or both) for evaluating the economic development effects of New Starts 
and Small Starts projects? Should FTA consider a qualitative approach 
for evaluating land use policies or a quantitative approach for 
predicting changes in land use values and patterns (or both) as a proxy 
for evaluating economic development benefits?
    5. What scale should be used to measure economic development? At a 
corridor level or at the metropolitan area level?
    6. How should FTA distinguish between the land use effects and the 
economic development effects of a proposed project? How should they be 
    7. Can a New Starts or Small Starts project generate new economic 
development that would otherwise not have occurred in the surrounding 
area? If so, how might that economic development be measured? Should 
FTA consider the overall economic health of a metropolitan area when 
estimating the potential for a New Starts or Small Starts project to 
foster economic development?
    8. How should FTA assess whether the plans, policies, and 
incentives intended to promote economic development would lead to 
transit oriented development that provides jobs and services within the 
corridor? Should FTA consider the economic development effects of the 
project on adjacent corridors? Should FTA consider commitments by 
developers or funding offered by developers as evidence of future 
economic development benefits? What time horizon should be used for 
considering economic development effects?
    9. Should FTA consider changes in land values as evidence of 
potential economic growth in a station area or project corridor? How 
would FTA quantify recent and future changes in land values? How can 
FTA avoid double counting benefits given that changes in land values 
may be caused in part by the improved accessibility from the

[[Page 31387]]

project that FTA already measures as part of cost effectiveness? Should 
FTA consider the extent to which existing affordable housing and 
commercial space can be maintained in the corridor after implementation 
of a transit project there?
    10. Should economic development be a part of the cost effectiveness 

Public Outreach Sessions

    The meetings listed below are the first two in a series of outreach 
sessions that will provide a forum for FTA staff to make oral 
presentations on this ANPRM and allow meeting attendees an opportunity 
to pose questions to the speakers. Additionally, the sessions are 
intended to encourage interested parties and stakeholders to submit 
their comments directly to the official docket per the instructions 
found in the ADDRESSES section of this notice. Further outreach 
sessions, once scheduled, will be announced in a subsequent Federal 
Register notice.
    The dates, times, and locations of the first two public outreach 
sessions are: (1) Monday, June 7, 4:30 pm to 6:30 pm, EST, 500 
Fayetteville Street, Raleigh, NC 27601 (Marriott City Center Hotel), 
concurrent with the conference on ``Environment and Energy: Better 
Delivery of Better Transportation Solutions,'' sponsored by the 
Transportation Research Board; (2) Tuesday, June 8, 2:30 pm to 4:30 pm, 
PST, Vancouver, British Columbia, Canada, 655 Burrard Street, 
Vancouver, British Columbia, Canada V6C 2R7 (Hyatt Regency Hotel), 
concurrent with the ``2010 Rail Conference'' sponsored by the American 
Public Transportation Association. All locations are ADA-accessible. 
Individuals attending a meeting who are hearing or visually impaired 
and have special requirements, or a condition that requires special 
assistance or accommodations, should call Elizabeth Day, Office of 
Planning and Environment, at (202) 366-5159.

Regulatory Notices

    All comments received on this ANPRM will be available for 
examination in the docket at http://www.regulations.gov.

Executive Order 12866 and DOT Regulatory Policies and Procedures

    This rulemaking is a significant regulatory action pursuant to 
section 3(f) of Executive Order 12866 and the Regulatory Policies and 
Procedures of the Department of Transportation (44 FR 11032). This 
ANPRM was reviewed by the Office of Management and Budget.
    Executive Order 12866 requires agencies to regulate in the ``most 
cost-effective manner,'' to make a ``reasoned determination that the 
benefits of the intended regulation justify its costs,'' and to develop 
regulations that ``impose the least burden on society.'' Because this 
ANPRM does not contain specific proposals, it is not possible at this 
time to perform a cost-benefit analysis.

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et 
seq.), FTA must consider whether a proposed rule would have a 
significant economic impact on a substantial number of small entities. 
``Small entities'' include small businesses, not-for-profit 
organizations that are independently owned and operated and are not 
dominant in their fields, and governmental jurisdictions with 
populations under 50,000. Because this ANPRM does not contain specific 
proposals, it is not possible to perform that analysis at this time. 
This ANPRM does, however, seek input from the public, including small 
entities, on the implementation of the New Starts and Small Starts 
programs, including what, if any, significant economic impacts might 

Executive Order 13132: Federalism

    Executive Order 13132 requires agencies to assure meaningful and 
timely input by State and local officials in the development of 
regulatory policies that may have a substantial, direct effect on the 
states, on the relationship between the national government and the 
states, or on the distribution of power and responsibilities among the 
various levels of government. This ANPRM asks questions about FTA's 
implementation of the New Starts and Small Starts programs, and FTA 
specifically invites State and local governments with an interest in 
this rulemaking to provide feedback on those questions.

Regulation Identifier Number (RIN)

    The U.S. DOT assigns a regulation identifier number (RIN) to each 
regulatory action listed in the Unified Agenda of Federal Regulations. 
The Regulatory Information Service Center publishes the Unified Agenda 
in April and October of each year. The RIN number contained in the 
heading of this document may be used to cross-reference this action 
with the Unified Agenda.

    Issued in Washington, DC, this 1st day of June, 2010.
Peter Rogoff,
[FR Doc. 2010-13423 Filed 6-1-10; 11:15 am]