The distribution of the local and federal shares starts with the sales proceeds of the item sold for fair market value. Of that amount, the recipient retains $5,000. Of the remaining amount of the sales proceeds, the recipient retains the amount calculated by its percentage of participation in the cost of the original purchase. For example, if a bus, purchased with federal assistance at an 80/20 split, is sold for the fair market value of $12,000, the recipient retains $5,000 plus 20% of the remaining $7000, or $1,400, for a total of $6,400. The recipient is required to return 80% of $7,000, or $5,600, to FTA.

No, because the disposition extinguishes the federal interest, the funds are returned to FTA without restriction or retention. The funds are no longer available for apportionment or allocation by FTA.

FTA has determined that “service life” means minimum useful life. Information on the rolling stock minimum useful life for rolling stock and equipment is included in Chapter IV – Management of the Award of FTA Circular 5010.1E. Supplies have a useful life of less than a year.

The new provision only applies to items that have met the end of their minimum useful life.

No, the new provisions do not apply to insurance claims. FTA Circular 5010.1E provides information on how the federal share of insurance proceeds should be treated in Chapter IV – Management of the Award.

No, the new provisions do not apply when a recipient transfers the assets to another eligible entity. The provisions would apply to the new entity at the time they dispose of the assets. FTA Circular 5010.1E provides information on transfer of assets in Chapter IV – Management of the Award.

Yes, rolling stock, equipment, and supplies can be retained by the recipient past their minimum useful life as long they continue to be used for public transportation purposes. Once they no longer are needed for public transportation services, they could be disposed of consistent with the procedures outlined above, or retained for other uses once the federal interest is extinguished. FTA Circular 5010.1E provides information on disposition of assets in Chapter IV – Management of the Award.

Because the funds cannot be retained locally and to ensure consistency across FTA programs and offices, the remaining federal share must be returned to FTA using pay.gov. Information on how to return funds to FTA via pay.gov.

This change in 49 USC § 5334(h)(4)(B) took effect on November 15, 2021. Thus, funds received from items sold prior to this date may be applied to future capital projects. Please continue to work with your Regional Office to determine the appropriate documentation.

Yes, the new disposition provisions under 49 USC § 5334(h)(4)(B) apply to all recipients of Chapter 53 federal financial assistance.