Mr. Kip Grimes
Michigan Department of Transportation
Transportation Building
425 West Ottawa
P.O. Box 30050
Lansing, Michigan 48908

Re: Flexible funding; 49 CFR Parts 653 and 654

Dear Mr. Grimes:

Thank you for your letter asking about the application of the Federal Transit Administration's (FTA) drug and alcohol rules to certain transit agencies in the State of Michigan. These agencies receive section 16(b)(2) funding and section 18 funding "flexed" from the Federal Highway Administration's (FHWA) Surface Transportation Program (STP). The State "flexes" the STP funding into the section 18 program because it submits its Statewide section 18 application before it submits its Statewide section 16(b)(2) application, thus allowing the agencies to purchase capital equipment earlier than they could if the STP funding were "flexed" into the section 16(b)(2) program. You ask whether the drug and alcohol rules apply to the agencies that receive these "flexed" STP funds.

Yes, the rules apply to these agencies. According to 49 U.S.C. §5334(h)(1) "[a]mounts made available for a mass transportation project under title 23 shall be transferred to and administered by the Secretary of Transportation under this chapter." Thus, amounts "flexed" from the STP account into the section 18 account, must be administered by the FTA as if they were section 18 funds; because the drug and alcohol rules apply to the section 18 program, any agency receiving these "flexed section 18 funds" must comply with the rule.

We note that you could "flex" the STP funds into the section 16(b)(2) account, in which case FTA's drug and alcohol rules would not apply; although, depending on the size of the vehicles used by a particular agency, FHWA's drug and alcohol rule may apply. FHWA's rule applies to a Commercial Driver's License holder, which is required of anyone driving a vehicle capable of carrying 16 or more passengers including the driver. 49CFR 382.103 and 382.107.

If you have any additional questions, please call Nancy Zaczek or Kristin O'Grady of this Office at (202) 366-4011. I apologize for the late response to your inquiry and any inconvenience this may have caused you.

Very truly yours,
(Signed)
Berle M. Schiller
Chief Counsel