E8-8789. Grants and Cooperative Agreements to State and Local Governments; Grants and Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations

AGENCY:

Office of the Secretary (OST), DOT.

ACTION:

Notice of proposed rulemaking (NPRM); request for comments.

SUMMARY:

This proposal would amend Department of Transportation regulations on uniform administrative requirements for grants and agreements with institutions of higher education, hospitals and other non-profit organizations. Specifically, the DOT proposes to make requirements for these grants and agreements consistent with the uniform administrative requirements for grants and cooperative agreements to state and local governments. In addition, this proposal would update references to applicable cost principles for grants and cooperative agreements with state and local governments and for grants and other agreements with institutions of higher education, hospitals and other non-profit organizations that appear in current Department of Transportation regulations.

DATES:

Comments must be received on or before June 16, 2008

ADDRESSES:

You may file comments identified by the docket number DOT-OST-2007-0022 by any of the following methods:

○ Federal eRulemaking Portal: go to http://www.regulations.gov and follow the online instructions for submitting comments.

○ Mail: Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Ave., SE., West Building Ground Floor, Room W12-140, Washington, DC 20590-0001.

○ Hand Delivery or Courier: West Building Ground Floor, Room W12-140, 1200 New Jersey Ave., SE., between 9 a.m. and 5 p.m. ET, Monday through Friday, except Federal Holidays.

○ Fax: [phone].

Instructions: You must include the agency name and docket number DOT-OST-2007-0022 or the Regulatory Identification Number (RIN) for the rulemaking at the beginning of your comment. All comments received will be posted without change to http://www.regulations.gov, including any personal information provided.

FOR FURTHER INFORMATION CONTACT:

Ellen Shields, Office of the Senior Procurement Executive, Office of Administration (M-61), [phone], 1200 New Jersey Avenue, SE., Washington, DC 20590-0001. Office hours are from 7:45 a.m. to 4:15 p.m. ET, Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access and Filing

You may submit or retrieve comments online through the Document Management System (DMS) at: http://www.regulations.gov. Acceptable formats include: MS Word (versions 95 to 97), MS Word for Mac (versions 6 to 8), Rich Text File (RTF), American Standard Code Information Interchange (ASCII)(TXT), Portable Document Format (PDF), and WordPerfect (versions 7 to 8). This site is available 24 hours each day, 365 days each year. Electronic submission and retrieval help and guidelines are available under the help section of the web site.

An electronic copy of this document may also be downloaded by using a computer, modem and suitable communications software from the Government Printing Office's Electronic Bulletin Board Service at [phone]. Internet users may also reach the Office of the Federal Register's home page at: http://www.nara.gov/​fedreg and the Government Printing Office's Web page at: http://www.access.gpo.gov/​nara.

Background

Regulations governing two types of U.S. Department of Transportation grant and cooperative agreement recipients are found in Parts 18 and 19 of Title 49 of the Code of Federal Regulations:

1. 49 CFR Part 18: Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments.

2. 49 CFR Part 19: Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations

Both of these parts contain a provision that governs allowable costs. However, while 49 CFR 18.22(a) identifies certain specific limitations on the use of grant or cooperative agreement funds by state or local governments receiving financial assistance from the U.S. Department of Transportation, 49 CFR 19.27 does not contain similar limitations. Specifically, under 49 CFR 18.22(a), grant funds may only be used for:

(1) The allowable costs of the grantees, subgrantees and cost-type contractors, including allowable costs in the form of payments to fixed-price contractors; and

(2) Reasonable fees or profit to cost-type contractors but not any fee or profit (or other increment above allowable costs) to the grantee or subgrantee.

This proposal would impose the same limitation on the use of funds used for grants and agreements with institutions of higher education, hospitals, and other non-profit organizations as there are on the use of funds used for uniform administrative requirements for grants and cooperative agreements to state and local governments, which are set forth above.

In addition, this proposal would update references to applicable cost principles for grants and cooperative agreements with state and local governments that appear in 49 CFR 18.22(b) and include comparable updated references in 49 CFR 19.27(b) with regard to grants and agreements awarded to institutions of higher education, hospitals, and other non-profit organizations. These updated references are necessary in light of the establishment of title 2 of the Code of Federal Regulations in 2004. Subtitle A of title 2 of the Code of Federal Regulations consists of government-wide guidance from the Office of Management and Budget (OMB) to Federal agencies for grants and other financial assistance and nonprocurement agreements that previously had been contained in seven separate OMB circulars and other OMB policy documents. Currently, 49 CFR 18.22(b) references three specific OMB circulars that are now codified in several Parts in chapter II, subtitle A of title 2 of the Code of Federal Regulations. This proposal would amend 49 CFR 18.22(b) by replacing the citations to these former OMB circulars with the appropriate references in title 2 of the Code of Federal Regulations and would reflect these same changes in 49 CFR 19.27(b).

Rulemaking Analyses and Notices

All comments received before the close of business on the comment closing date indicated above will be considered and will be available for examination in the docket at the above address. Comments received after the comment closing date will be filed in the docket and will be considered to the extent practicable. In addition to late comments, the DOT will also continue to file relevant information in the docket as it becomes available after the comment period closing date, and interested persons should continue to examine the docket for new material. A final rule may be published at any time after close of the comment period.

Executive Order 12866

The Department has determined that this rule is nonsignificant. It is purely administrative in nature and does not impose new burdens on any parties.

Regulatory Flexibility Act of 1980

The Department certifies that this rule will not have a significant effect on a substantial number of small entities. This is because, as a purely administrative rule, it does not create economic effects on anyone. The amendment would not change or limit the potential eligibility of any small entity.

Unfunded Mandates Reform Act of 1995

This regulatory action does not contain a Federal mandate that will result in the expenditure by State, local, and tribal governments, in aggregate, or by the private sector of $100 million or more in any one year, as adjusted for inflation.

Paperwork Reduction Act of 1995

This regulatory action will not impose any additional reporting or recordkeeping requirements covered under the Paperwork Reduction Act.

Executive Order 13132 (Federalism)

This regulatory action does not have Federalism implications, as set forth in Executive Order 13132. It will not have substantial direct effects 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.

List of Subjects in 49 CFR Parts 18 and 29

• Administrative practice and procedure
• Grant programs
• Allowable costs
• Cooperative agreements

Issued on: April 14, 2008.

Mary E. Peters,

Secretary of Transportation.

In consideration of the foregoing, the DOT proposes to amend, title 49, Code of Federal Regulations, parts 18 and 19, as set forth below:

PART 18—UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS

1. The authority citation for part 18 continues to read as follows:

Authority: 49 U.S.C. 322(a).

2. In § 18.22(b), revise the table to read as follows:

§ 18.22

Allowable costs.

* * * * *

(b) * * *

For the costs of a	Use the principles in—
State, local or federal-recognized Indian tribal government	2 CFR part 225.
Private non-profit organization other than an (1) institution of higher education, (2) hospital, or (3) organization named in 2 CFR part 230, Appendix C, as not subject to that part	2 CFR part 230.
Institutions of higher education	2 CFR part 220.
For-profit organizations other than a hospital, commercial organization or a non-profit organization listed in 2 CFR part 230, Appendix C, as not subject to that part	48 CFR part 31, Contract Cost Principles and Procedures, or uniform cost accounting standards that comply with cost principles acceptable to the Federal agency.

* * * * *

PART 19—UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH INSTITUTIONS OF HIGER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS

3. The authority citation for part 19 continues to read as follows:

Authority: 49 U.S.C. 322(a).

4. Revise § 19.27 to read as follows:

§ 19.27

Allowable costs.

(a) Limitation on use of funds. Grant funds may be used only for:

(1) The allowable costs of the grantees, subgrantees and cost-type contractors, including allowable costs in the form of payments to fixed-price contractors; and

(2) Reasonable fees or profit to cost-type contractors but not any fee or profit (or other increment above allowable costs) to the grantee or subgrantee.

(b) Applicable cost principles. For each kind of recipient, there is a set of Federal principles for determining allowable costs. Allowability of costs shall be determined according to the cost principles applicable to the entity organization incurring the costs. The following chart lists the kinds of organization and the applicable cost principles:

For the costs of a	Use the principles in—
State, local or federal-recognized Indian tribal government	2 CFR part 225.
Private non-profit organization other than an (1) institution of higher education, (2) hospital, or (3) organization named in 2 CFR part 230, Appendix C, as not subject to that circular	2 CFR part 230.
Institutions of higher education	2 CFR part 220.
Hospitals	45 CFR part 74, Appendix E, “Principles for Determining Costs Applicable to Research and Development under Grants and Contracts with Hospitals.”
For-profit organizations other than a hospital, commercial organization or a non-profit organization listed in 2 CFR part 230, Appendix C, as not subject to that part	48 CFR part 31, Contract Cost Principles and Procedures, or uniform cost accounting standards that comply with cost principles acceptable to the Federal agency.