Notice of Availability of Final Policy Guidance for the Capital Investment Grants Program

<NOTICE> DEPARTMENT OF TRANSPORTATION <SUBAGY>Federal Transit Administration</SUBAGY> <DEPDOC>[FTA-2025-0068]</DEPDOC> <SUBJECT>Notice of Availability of Final Policy Guidance for the Capital Investment Grants Program</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Federal Transit Administration (FTA), Department of Transportation (DOT). <HD SOURCE="HED">ACTION:</HD> Notice of availability of final policy guidance for the Capital Investment Grants program. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Federal Transit Administration (FTA) is making available the agency's final policy guidance for the Capital Investment Grants (CIG) program. This version amends FTA's CIG Policy Guidance published in December 2024 and incorporates input, as appropriate, FTA received from the public comment on its proposed Policy Guidance published in the <E T="04">Federal Register</E> in August 2025. The final guidance has been placed in the docket and posted on the FTA website. The policy guidance complements FTA's regulations governing the CIG program. </SUM> <DATES> <HD SOURCE="HED">DATES:</HD> This final policy guidance is effective immediately. FTA will not exempt projects from following the new amended final CIG policy guidance. </DATES> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Mark Ferroni, FTA Office of Planning and Environment, telephone (202) 366-3233 or <E T="03">mark.ferroni@dot.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> This final policy guidance document contains binding obligations, which 49 U.S.C. 5334(k) defines as “a substantive policy statement, rule, or guidance document issued by the Federal Transit Administration that grants rights, imposes obligations, produces significant effects on private interests, or effects a significant change in existing policy.” Under 49 U.S.C. 5334(k), FTA may issue binding obligations if it follows applicable rulemaking procedures under 5 U.S.C. 553. Prior to making the amendments announced today, FTA followed such procedures. The policy guidance FTA periodically issues for the CIG program complements the FTA regulations governing the CIG program, codified at 49 CFR part 611. The regulations set forth the process grant applicants must follow to be considered for discretionary grant funding under the CIG program, and the procedures and criteria FTA uses to rate and evaluate projects to determine their eligibility for discretionary CIG program funding. The policy guidance provides a greater level of detail about the methods FTA uses and the sequential steps a sponsor must follow in developing a project. Pursuant to 49 U.S.C. 5309(g)(5), FTA is required to publish policy guidance for the CIG program each time the agency makes significant changes to the review and evaluation process and criteria, but not less frequently than once every two years. In August 2025, FTA published a notice in the <E T="04">Federal Register</E> (90 FR 40465) seeking comment on proposed changes to FTA's CIG Policy Guidance issued in December 2024 (89 FR 102248). The amended Final CIG program policy guidance is being made available today on the agency's public website at <E T="03">https://www.transit.dot.gov/funding/grant-programs/capital-investments/capital-investment-grants-program-regulations-guidance,</E> and in the docket at <E T="03">https://www.regulations.gov/docket/FTA-2025-0068.</E> Companion documents to the CIG Policy Guidance such as reporting instructions, CIG reporting templates, and standard cost category worksheets will be updated and will also be posted on the FTA website at a future date. Until such time, project sponsors should continue to use the reporting instructions, CIG reporting templates, and standard cost category worksheets dated January 2025. <HD SOURCE="HD1">Response to Comments</HD> FTA received comments from 16 respondents on the proposed policy guidance for the CIG program. Four of the 16 respondents were transit agencies. FTA received six comments from interest groups or policy organizations, five comments from individuals, and one comment from an anonymous respondent. One of the comments was submitted to a separate docket for FTA's Request for Information Concerning the Capital Investment Grants Program (FTA-2025-0069). FTA is partially responding to that comment in this Notice because a portion of the comment relates to FTA's environmental benefits proposal. <HD SOURCE="HD1">Environmental Benefits</HD> Regarding the proposed changes to the calculation of environmental benefits in the proposed policy guidance, roughly half of the 16 respondents supported the change. Many of these commenters expressed support for the proposed methodology, stating it would result in a simpler and more streamlined evaluation of environmental benefits, reduce administrative burden, and expedite the CIG process. Some commenters specifically criticized the existing vehicle miles traveled (VMT)-based methodology, noting it is complex, subject to varied interpretations, data-intensive, complicated, and burdensome. One of these commenters additionally requested FTA continue working with the industry in the future regarding the environmental benefits methodology. Two of these commenters argued the proposed methodology would capture air quality improvements and reduced emissions without the need to use a complex methodology. An additional commenter supported the removal of the social cost of carbon, arguing the metric is deeply flawed and artificially inflates the dollar value of reducing greenhouse gas emissions. It also noted the underlying statute governing the CIG program does not require consideration of carbon emissions or the social cost of carbon. Two commenters requested FTA modify its proposal by assigning a “Medium-High” rating for projects located in areas formerly designated as nonattainment but that have since achieved attainment through local planning and policy decisions, suggesting FTA should reward projects in such areas. One of these commenters stated it nevertheless supported FTA's measure as proposed, as it believed resolution of the issue may stand in the way of FTA allocating CIG funding and making funding recommendations in the FY26 CIG report to Congress. <E T="03">Response:</E> FTA appreciates the comments supporting the proposal and agrees the new methodology will reduce burden and complexity for project sponsors. We agree with the suggestion to work with the industry in the future to “capture the specific environmental benefits of public transportation projects” without unduly burdening project sponsors with overly complex analysis. To clarify, however, FTA is not adopting the suggestion to assign a “Medium-High” rating for maintenance areas ( <E T="03">i.e.,</E> areas formerly designated nonattainment but have since achieved attainment) as suggested because FTA proposed to assign a “High” rating to such areas. The proposed methodology therefore already rewards areas formerly in nonattainment and that have since achieved attainment. Of the multiple respondents in support of the change, one respondent suggested FTA clarify in the final policy guidance how a project will be rated when a project crosses more than one geographic area which may have varying air quality designations. The commenter requested FTA clarify that projects located either wholly or partially within maintenance or nonattainment areas will receive a “High” rating for the environmental benefits criterion. <E T="03">Response:</E> FTA agrees with this commenter because we recognize that an eligible CIG project may traverse areas with different air quality designations, perhaps by crossing urban area boundaries or even State lines. This might create confusion as to which specific air quality designation will be applied. In response, FTA will modify the environmental benefits measure language in the CIG Policy Guidance to read as follows: <HD SOURCE="HD2">Measure</HD> FTA evaluates and rates the environmental benefits criterion for New Starts projects based on the EPA air quality designation given to the geographic area(s) in which the project is located for the transportation-related criteria pollutants, carbon monoxide (CO), nitrogen dioxide (NO <E T="52">2</E> ), ozone (O <E T="52">3</E> ) (2015 standard), and particulate matter (PM <E T="52">2.5</E> ) (2012 standard). This information is readily obtained from the EPA Green Book ( <E T="03">https://www.epa.gov/green-book</E> ). Projects located wholly or partially in areas designated as nonattainment or maintenance for any of the four criteria pollutants will receive a High rating, and projects located wholly in areas designated as attainment in all four criteria pollutants will receive a Medium rating. About half of the 16 commenters opposed FTA's proposal, one of whom expressed general opposition without providing a reason. Some commenters voiced concerns about the removal of the social cost of carbon, including concerns the change would negatively affect the evaluation of environmental impacts and that the social cost of carbon was an important metric to include in the analysis. One commenter opposed the elimination of VMT-based metrics, noting VMT is a valuable measure of the cost-effectiveness of a proposed project. <E T="03">Response:</E> FTA disagrees with these commenters because the social cost of carbon calculation is complex and depends heavily on assumed unit values, some of which are arbitrary and may vary over time. There is not consistent agreement that the social cost of carbon is a reliable metric in climate policy. The use of the social cost of carbon measure may lead to unsubstantiated policy decisions, which exceeds the marginal practical benefit of using the social cost of carbon in rating CIG projects. In addition, FTA disagrees that the VMT-based metric should be retained t ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 24k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━