Ms. Cindy E. Fish
Senior Grant Coordinator
West Virginia Department of Transportation
Division of Public Transit
1900 Kanawha Boulevard East
Building Five, Room 716
Charleston, West Virginia 25305-0432

Dear Ms. Fish:

Thank you for your letter concerning the application of the Federal Transit Administration's (FTA) drug and alcohol rules to transit providers in West Virginia that receive funding under FTA's formula program for nonurbanized areas (formerly section18). You write that these transit providers usually have only one or two safety-sensitive employees, thus making drug and alcohol testing expensive. You ask whether FTA's rules would apply, if during the next State fiscal year, which begins July 1, West Virginia funds these programs with State dollars only. If the rules do not apply after June 30, 1996, you ask how these providers should report the results of tests administered under FTA's rules.

The drug and alcohol rules apply to recipients of FTA's discretionary capital grant program, formula grant program for urbanized and nonurbanized areas, and the interstate transfer program, and require them to implement a program to test safety-sensitive employees for the use of five prohibited drugs and the misuse of alcohol. 49 CFR 653.5 and 654.3. FTA's rules apply not only to direct recipients of these categories of FTA funding, but also to "any entity that provides mass transportation service ... for such recipient or other entity." 49 CFR 653.7 and 654.7. The direct recipient is responsible for ensuring that any entity providing transportation service on its behalf is in compliance with the rules.

FTA's formula grant program for nonurbanized areas is comprised of operating and capital assistance. When capital funds are used, a recipient may segregate FTA funding from other funding sources, thus limiting the application of Federal requirements to the capital project funded by FTA. Operating assistance under FTA's formula grant program, however, cannot be similarly segregated; such assistance generally affects the recipient's entire program, and is used for salaries, office equipment and supplies, and insurance premiums. When operating assistance is used, all of a recipient's operations are subject to Federal requirements, including those relating to drug and alcohol testing.

The rules, however, attach only to Federal funds obligated by FTA on or after

March 17, 1994, the effective date of the rules. Because operating assistance is obligated and expended annually, the rules apply to those funds for the duration of the Federal fiscal year, which begins on October 1 and ends on September 30, or for the length of time the funds are used. Capital assistance, however, is expended over several years and capital projects generally have a useful life of many years. Hence, a recipient is obligated to implement a drug and alcohol testing program for the duration of the capital project's useful life, if FTA obligated the funds after March 17, 1994.

Accordingly, if you have used funding under FTA's formula grant program for nonurbanized areas for operating expenses only, any entity performing a safety-sensitive function for you must comply with FTA's drug and alcohol rules until it no longer uses those operating funds. In other words, if the subrecipient stops using operating assistance on June 30, 1996, then it is under no obligation to continue a federally required drug and alcohol testing program. If, however, the subrecipient has used FTA formula funds for nonurbanized areas or discretionary capital grant funds for a capital project, such as purchasing buses or vans, and the funding was obligated by FTA on or after March 17, 1994, it is required to continue a drug and alcohol testing program for the useful life of the project.

If capital funds were not involved, testing could cease on June 30, 1996. If that is the case, the drug and alcohol MIS forms should be sent by the subrecipients, who should note on the forms or on a separate cover letter, stating that they tested for six months and that their program has ended, to West Virginia to be submitted to FTA.

If you have any additional questions or comments, please contact Nancy Zaczek of this Office at (202) 366-4011.

Very truly yours,
(Signed)
Gregory B. McBride
Acting Chief Counsel