[Federal Register Volume 59, Number 140 (Friday, July 22, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17908]
[[Page Unknown]]
[Federal Register: July 22, 1994]
_______________________________________________________________________
Part III
Department of Transportation
_______________________________________________________________________
Federal Highway Administration
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23 CFR Parts 420 and 511
State Planning and Research Program Administration; Final Rule
DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
23 CFR Parts 420 and 511
[FHWA Docket No. 93-18]
RIN 2125-AD21
State Planning and Research Program Administration
AGENCY: Federal Highway Administration (FHWA), DOT.
ACTION: Final rule.
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SUMMARY: With the restructuring of the Federal-aid highway program due
to enactment of the Intermodal Surface Transportation Efficiency Act
(ISTEA) of 1991 (Pub. L. 102-240, 105 Stat. 1914), regulations for the
administration and management of activities undertaken with FHWA
planning and research funds are updated to reflect the revised sources
of, and activities eligible for, such funds. In addition, the ISTEA
allows the States more flexibility in managing and directing federally
funded research, development, and technology transfer (RD&T)
activities. This final rule includes the ISTEA revisions and grants
States this greater responsibility and flexibility for the management
and oversight of their RD&T initiatives funded with FHWA planning and
research funds.
EFFECTIVE DATE: This rule is effective on August 22, 1994.
FOR FURTHER INFORMATION CONTACT: Mr. Tony Solury (202-366-5003), Office
of Environment and Planning, Federal Highway Administration, 400
Seventh Street, SW., Washington, D.C. 20590, for 23 CFR part 420,
subpart A; Mr. Charles W. Niessner (703-285-2100), Office of Research
and Development, Federal Highway Administration, Turner-Fairbank
Highway Research Center, 6300 Georgetown Pike, McLean, VA 22101-2296,
for 23 CFR part 420, subpart B; or Mr. Wilbert Baccus (202-366-0780),
Office of the Chief Counsel, Federal Highway Administration, 400
Seventh Street, SW., Washington, D.C. 20590. Office hours are from 7:45
a.m. to 4:15 p.m., e.t., Monday through Friday, except Federal
holidays.
SUPPLEMENTARY INFORMATION: On December 21, 1993, a notice of proposed
rulemaking (NPRM) was published by the FHWA in the Federal Register (58
FR 67510) to obtain comments from interested persons on proposed
revisions to regulations for program approval and authorization;
conduct; and reporting of planning, research, development, and
technology transfer activities undertaken by States and their
subrecipients, including metropolitan planning organizations (MPOs),
with FHWA planning and research funds. The proposed revisions were
necessary to reflect changes to Title 23, United States Code, Highways,
that resulted from enactment of the ISTEA. In addition, the FHWA
proposed that States establish a process for management of RD&T
activities undertaken with FHWA planning and research funds that would
enable States to exercise greater authority over such activities.
With respect to administration of FHWA planning and research funded
RD&T activities, the final rule reflects the FHWA's belief that its
stewardship role should be one of concentrating more on the policies
and procedures by which States implement such activities than on
project-specific approvals and oversight. This philosophy parallels the
administrative oversight procedures adopted for FHWA planning and
research funded transportation planning activities in earlier revisions
to 23 CFR part 420, subpart A in 1985 and 1990.
The ISTEA instituted a number of substantive changes pertinent to
transportation planning and RD&T programs. In addition to retitling it
from Highway Planning and Research to State Planning and Research
(SPR), the ISTEA: (1) increased the set-aside of funds apportioned to
States for SPR activities from 1.5 percent to 2 percent; (2) included
planning and RD&T as eligible activities under the National Highway
System (NHS) program and Surface Transportation Program (STP); (3)
permitted the use of certain funds made available under title 23,
U.S.C., for intermodal transportation planning and RD&T; and (4)
required the expenditure of 25 percent of a State's annual SPR funds
for RD&T activities, unless the State certifies that it will use more
than 75 percent for planning and the Secretary of Transportation (the
Secretary) accepts the certification. These legislative provisions are
reflected in this rule.
Thirty-one sets of comments were submitted to the docket in
response to the NPRM; 28 from State transportation departments/
agencies, 1 from a regional planning agency, 1 from a professional
association, and 1 from a Federal agency. The overwhelming majority of
comments were in support of the proposed revisions and the increased
flexibility for State management of RD&T activities. However, there
were some concerns regarding some of the specific revisions and the
short deadline for compliance. Many of these concerns were due to
misunderstandings about existing requirements and not the proposed
revisions. A summary of the comments, their disposition, and the
changes made to the rule follow.
Subpart A--Administration of FHWA Planning and Research Funds
General Comments and Responses
Comment: One State, in which most research is conducted for the
State by higher education institutions, stated that the proposed
regulation does not pertain to universities as subrecipients and
recommended citing Office of Management and Budget (OMB) Circular A-
110, ``Uniform Administrative Requirements for Grants and Agreements
with Institutions of Higher Education, Hospitals, and Other Non-Profit
Organizations,'' November, 19, 1993, for universities as subrecipients.
Response: While the State is the recipient of FHWA planning and
research funds, Part 420 also applies to subawards to all categories of
subrecipients, including institutions of higher education. In
accordance with standard OMB requirements, subawards are to be
administered in accordance with the procedures in the OMB Circular and
corresponding agency implementing regulations that apply to the type of
agency receiving the subaward, whether or not specifically stated in
the regulation. To clarify what applies to administration of subawards
to institutions of higher education, a new paragraph (o) has been added
to Sec. 420.121 as discussed under the section-by-section analysis.
Comment: One commenter suggested that the term ``State highway
agency'' be changed to ``State transportation agency'' to maintain
consistent nomenclature and reflect reality.
Response: Since most of the State agencies to which Federal-aid
highway program funds are apportioned are no longer single purpose
highway agencies, the FHWA agrees that use of the term ``State
transportation agency'' is more appropriate and has made this change.
However, 23 U.S.C. 302 requires that a State desiring to avail itself
of the provisions of title 23, U.S.C., have a suitably equipped and
organized State highway department and has been interpreted by the FHWA
to restrict reimbursement of a State highway department's indirect
costs. Therefore, a definition of State transportation agency (STA) has
been added to Sec. 420.103, as discussed below under the section-by-
section analysis, to distinguish a State highway department from other
State transportation agencies in order to determine whether the
agency's indirect costs are allowable under 23 U.S.C. 302.
Comment: One State commented that it is using a significant portion
of its SPR funds for training, ``since the ISTEA language which was
supposed to have covered training was inadvertently left out of that
Legislation.''
Response: The ISTEA in fact continued the funding provisions (23
U.S.C. 321) for training of State personnel although at a reduced level
of funding. With the exception of a specific type of training cited in
23 U.S.C. 307(c), FHWA planning and research funds may only be used for
transportation planning or RD&T related training if the cost of the
training is necessary, reasonable, and it benefits the purposes of the
grant or subgrant. General training of employees who are not working on
grant funded activities is not an allowable cost. This is consistent
with OMB cost principles which are applicable to FHWA planning and
research fund grants and subgrants.
Comment: One State questioned the estimate of 2,100 burden hours,
shown under the heading Paperwork Reduction Act in the NPRM, for the 50
States to comply with the regulation and stated that it will take much
more time to develop a procedures manual; procedures for tracking
activities, schedules, accomplishment, and fiscal commitments; and
procedures to determine the effectiveness of the implementation
process, and the utilizations of the RD&T output. The commenter
indicated that the State has many of the elements in place, but did not
know if the FHWA Division office would accept them or require revisions
in content or format.
Response: The estimate of 2,100 burden-hours (40 hours per
respondent) is for the one-time preparation by each State, the District
of Columbia, and the Commonwealth of Puerto Rico of the new
certification required by subpart B of the regulation. Many of the
other activities cited by the commenter are either required already
(e.g., progress reports) and are covered by the cited existing OMB
clearances or are standard management practices that the State should
already have in place. An updated burden estimate has been prepared. It
is estimated that the average one-time burden for preparation of RD&T
management process documentation and certification statements is 480
burden-hours (12 weeks x 40 hours per week) per State.
Section-by-Section Analysis
The authority citation has been amended from the NPRM to include 23
U.S.C. 303(g) which allows the use of NHS, STP, and highway bridge
replacement and rehabilitation (HBRR) funds for development and
establishment of the management and monitoring systems required under
23 U.S.C. 303. In addition, section 149(b) has been deleted since this
regulation does not apply to funds made available under this section of
title 23, U.S.C.
Section 420.101 Purpose
This section states the purpose of this regulation. It indicates
that the provisions of this part apply to subrecipients of States,
including MPOs. Language has been added to indicate that it also
applies to activities undertaken with NHS, STP, and Highway Bridge
Replacement and Rehabilitation Program (HBRRP) funds for development,
establishment, and implementation of the management and monitoring
systems required by 23 U.S.C. 303 and 23 CFR part 500. Use of NHS and
STP funds for such purposes was included in the NPRM definition of FHWA
planning and research funds; the use of HBRRP funds is being added to
the definition as discussed below. A reference to the additional
requirements for RD&T programs and studies in subpart B of this part is
included.
Section 420.103 Definitions
This section includes the terms defined in 23 U.S.C. 101(a) and
contains additional definitions for terms used in this part.
The term ``FHWA planning and research funds'' includes SPR funds,
metropolitan planning (PL) funds, and the optional use of NHS, STP, and
Minimum Allocation (MA) funds for planning and RD&T purposes. It also
includes the use of NHS, STP, and HBRRP funds for development,
establishment, and implementation of the management and monitoring
systems required by 23 U.S.C. 303. The definition has been amended from
the NPRM to include funds apportioned under 23 U.S.C. 144 for the HBRRP
when such funds are used for development, establishment, and
implementation of the bridge management system required by 23 U.S.C.
303. This category was inadvertently not included in the NPRM.
Although this rulemaking does not change the definition of grant,
one commenter believed that new readers may not be familiar with the
difference between a contract and a grant and, therefore, suggested
that a definition of grant be included to reduce confusion.
The FHWA agrees and has added definitions of ``grant agreement''
and ``procurement contract.'' These mechanisms for agencies to make
awards to recipients are adaptations of definitions in Chapter 63,
Using Procurement Contracts and Grant and Cooperative Agreements, of
title 31, CFR.
A ``grant agreement'' is defined as a legal instrument between an
awarding agency and recipient where the principal purpose is to provide
funds to the recipient to carry out a public purpose of support or
stimulation authorized by law.
A ``procurement contract'' is defined as a legal instrument between
an awarding agency and recipient where the principal purpose is to
acquire (by purchase, lease, or barter) property or services for the
direct benefit or use of the awarding agency.
For administrative purposes, it is important to note that the
purpose of the award determines whether the award is a grant or a
procurement action. The administrative procedures for grants are
governed by OMB Circulars A-102 and A-110 and agency implementing
regulations. The administrative procedures for procurement contracts
are governed by the Federal Acquisition Regulations (48 CFR Part 31) or
State procedures if the recipient is a State.
Since FHWA planning and research funds may be pooled for planning,
as well as RD&T, studies or activities of national or regional
significance, the definitions of national and regional pooled-fund
studies have been moved from Sec. 420.203 to Sec. 420.103. In addition,
both definitions have been modified to indicate: that MPOs, as well as
States, may contribute to pooled-fund studies; that national studies
are usually administered by the FHWA headquarters office; that regional
studies are usually administered by an FHWA regional office in
cooperation with a lead State or MPO; and that the funds may be pooled
with or without matching. While any of the categories of funds included
in the definition of ``FHWA planning and research funds'' may be
pooled, the matching requirement can only be waived for SPR or PL
funds. Such waiver must be approved by FHWA headquarters for both
national and regional studies in accordance with the provisions of
Sec. 420.119(d).
As discussed under the general comments and responses, a definition
of State transportation agency has been added. ``State transportation
agency (STA)'' is defined as the State highway department,
transportation department, or other State transportation agency to
which Federal-aid highway funds are apportioned.
Section 420.105 Policy
This section continues the FHWA's previous policy of allowing
States maximum possible flexibility in determining which eligible
activities may be undertaken with FHWA planning and research funds, as
long as planning activities of national significance, as identified in
paragraph (b) of this section, are being adequately addressed. Under
the provisions of this section, the FHWA may withhold or withdraw
authorization of FHWA planning and research funds if planning
activities of national significance are not being performed by a State.
As discussed in the preamble to the NPRM, this policy also applies to
State subrecipients. Paragraphs (a)(1) through (4) in the NPRM have
been rewritten and consolidated for clarity into paragraphs (a)(1) and
(2) in the rule without changing the substance of the policy.
One commenter expressed concern about the potential involvement in
long range data reporting requirements that would make unexpected
demands on its manpower in order to provide data that support FHWA
responsibilities as specified in Sec. 420.105(b). The commenter
indicated that clarification was needed on this requirement. Another
commenter indicated that States should have the right to question the
need for particular data requests from the FHWA if the cost of
providing such data becomes high.
This provision has been in the regulation since 1986. The major
data bases that are referenced in Sec. 420.105(b) are the FHWA's
Highway Performance Monitoring System (HPMS) and statistical reports
provided by the States for inclusion in the annual publication
``Highway Statistics.'' Both of these data collection activities have
been approved by the OMB and are resubmitted for approval every three
years. Occasionally, information not included in these ongoing data
bases is needed due to special circumstances and enactment of
legislation, such as, designation of a National Highway System in
accordance the provisions of the ISTEA. With each update of the HPMS
and highway statistics reporting requirements and with each special
request, the FHWA will continue to make every effort possible to limit
the burden to the States while still receiving the information
essential to guide the national transportation program.
Section 420.107 SPR Minimum Research, Development, and Technology
Transfer Expenditure
This section reflects the requirement in 23 U.S.C. 307(c) that not
less than 25 percent of a State's annual SPR funds be expended for RD&T
activities unless the State certifies that it will expend more than 75
percent of such funds for transportation planning under 23 U.S.C. 134
and 135. It includes specific procedures and criteria for FHWA approval
of a State's certification that were in the FHWA Executive Director's
June 25, 1992, memorandum to the FHWA Regional Administrators. (This
memorandum is available for review and copying in the file for FHWA
docket number 93-18 at the address specified above under the caption
FOR FURTHER INFORMATION CONTACT.) The certification must be submitted
annually with the work program or with the request for authorization of
funds for the second year of a biennial work program. Except for
rephrasing of the considerations in paragraphs (c)(1) to (6) to change
them from questions to statements, this section is unchanged from the
NPRM.
Several commenters expressed concern over the criteria and
procedures in Sec. 420.107 for waiver of the requirement for use of 25
percent of a State's annual apportionment of SPR funds. One commenter
stated that the proposed rules go far beyond what should be necessary
to support such a certification and that it appears that the FHWA is
unduly striving to discourage this option. This commenter recommended
that the requirements be reduced to an assurance that the State's RD&T
needs are being adequately addressed. Similarly, other commenters
stated that the requirements for submitting an exception to the use of
25 percent of SPR fund for research are onerous and effectively
prohibit exceptions as they are currently written or that the proposed
rule indicates that the FHWA will be reluctant to grant exceptions.
While 23 U.S.C. 307(c)(2) requires that a State certify to the
Secretary that its total expenditures for transportation planning under
23 U.S.C. 134 and 135 for the fiscal year will exceed 75 percent, it
also requires that the certification be accepted by the Secretary.
Based on the extensive provisions and emphasis on transportation RD&T
in the ISTEA, the FHWA strongly believes that the Congress intended
that the States have effective transportation RD&T programs. Therefore,
the criteria for approving an exception are being retained.
Section 420.109 Distribution of PL Funds
This section reflects the requirements in 23 U.S.C. 104 that a
State must make apportioned PL funds available to MPOs and that the
funds must be distributed by the State to MPOs in the State based on a
formula, approved by the Secretary (approval authority has been
delegated to the FHWA), that considers population, status of planning,
attainment of national ambient air quality standards, and other factors
necessary to provide for an appropriate distribution of funds to carry
out the requirements of 23 U.S.C. 134 and other applicable requirements
of Federal law. The FHWA's longstanding interpretation, that the
legislative requirement that States make PL funds available to MPOs
precludes the use of such funds by the State for administration of PL
grants or subgrants, is included in paragraph (a). It is FHWA policy to
consult with the appropriate Federal Transit Administration (FTA)
regional office prior to approval of a State's PL formula.
One State commented that the requirement in paragraph (a) that
``the State shall not use any PL funds for grant or subgrant
administration'' is too restrictive and should be changed to permit a
reasonable amount for administration. Another State commented that
under the ISTEA, a State DOT's role in administering and participating
in MPO planning activities funded with PL funds has increased
significantly and that there should be a provision which permits the
State DOT to retain a certain percentage of PL funds for its costs in
administering and participating in PL funded programs. Another State
commented: that the cost for grant administration historically has been
included as part of the funding package of the MPO planning work
program; that this new provision may unfairly restrict the use of PL
funds to only direct program activity and not permit the State or MPO
to use PL funds for organization administration costs; and that by not
allowing the use of PL funds for grant or subgrant administration, the
FHWA will be placing an unfair economic burden on the various parties
concerned.
These comments imply a misunderstanding of both the legislation and
regulation. Before responding to these comments, a distinction needs to
be made between ``grant or subgrant administration'' and ``general
planning process administrative activities.'' ``Grant or subgrant
administration'' includes activities such as processing or preparing PL
grant agreements between the FHWA and the State, subgrant agreements
between the State and the MPOs, fiscal documents, progress reports, and
audits. ``General planning process administrative activities'' may
include conducting MPO meetings, preparation of planning work programs,
and salaries of an MPO executive director and other administrative
support staff.
The legislation has always specified that PL funds are to be made
available to the MPOs by the State. The FHWA historically has
interpreted this to mean that a State cannot unilaterally retain PL
funds for any purpose; all PL funds must be made available to the MPOs.
If an individual MPO chooses to include activities (e.g., development
of a long range plan, traffic counting) to be performed with its PL
funds by the State for the MPO in its work program, it may do so. If
the required State PL fund distribution formula, developed in
consultation with the MPOs, allows for State retainage of PL funds, it
may be approved by the FHWA if the retained funds will be used by the
State for technical activities in support of metropolitan planning or
for making discretionary subgrants to MPOs for special studies.
In no instance may PL funds (either in an MPO's work program or
retained under an approved formula) be used by a State for PL fund
``grant or subgrant administration'' as indicated in subparagraph (a).
Such State grant or subgrant administrative activities are eligible for
SPR funding. ``General planning process administrative activities''
performed by MPOs are eligible for PL funds. Such general
administrative activities performed by a State for an MPO are eligible
for SPR funds and would be eligible for PL funds if included in the
MPO's work program.
One State commented that it would be concerned if the regulation is
administratively construed to require a specific formula for
distribution, or require reconsideration of its policy on PL funds.
The requirement that funds be distributed by a State by a formula
that considers specific factors has existed since the enactment of the
PL funding in 1973. The ISTEA added the additional factor of attainment
of the national ambient air quality standards. In developing the
formula, the State must consult with the MPOs and must consider the
legislatively mandated factors, but all of the factors do not need to
be included in the formula. In accordance with paragraph (f), any
formula that does not meet these requirements must be brought into
conformance as soon as possible, but not later than in time for
distribution of PL funds apportioned to the State for the first Federal
fiscal year beginning after the effective date of the regulation.
Section 420.111 Work Program
This section includes requirements for State and subrecipient work
programs that serve as the application for FHWA planning and research
funds. References to 23 CFR part 450 and subpart B of this part are
cited for additional information on metropolitan area unified planning
work programs and RD&T work programs, respectively. Except for
correcting citations to 23 CFR part 450 and changing the first word in
paragraph (a) from ``expenditure'' to ``proposed use,'' this section is
unchanged from the NPRM. The work program in essence is a statement of
work that identifies the proposed use of the funds; expenditure of the
funds is documented in the financial and progress reports.
One commenter stated that the requirement to submit work program
documents creates duplicate paperwork for agencies. The commenter
stated that the same information is available in work plans for
individual studies, and, if FHWA review of individual study work plans
is no longer required, submission of a work program is not appropriate.
A work program has always been required for both planning and RD&T
activities. The work program is the ``grant application'' for FHWA
planning and research funds and is necessary for the FHWA to determine
if the proposed work is eligible. A work program may consist of a
listing of proposed studies and activities and other appropriate
information, such as cost of the activity and performing agency, with
sufficient description for the FHWA to determine eligibility of the
work. ``Work plans'' that included details on need, purpose, approach,
etc., for individual RD&T studies are no longer required. Therefore,
there is no duplication.
One State commented that while a biennial work program is allowed,
it requires a projection of available Federal funds which may be
difficult to make on a biennial basis.
Historically, the amount of FHWA planning and research funds
available to a State is consistent from year to year over the period
covered by authorizing legislation (e.g., the ISTEA). In any case, if a
State's or subrecipient's transportation planning is a continuation of
the same activities with minimal change in activities over an extended
period, use of a 2-year work program should result in a significant
reduction in paperwork since draft and final work programs would not
need to be prepared and submitted for review and approval in the second
year unless significant changes are necessary in the description of
work. The initial work program would describe the activities
anticipated to be accomplished over the 2-year period along with an
estimate of funds for each year. The FHWA would approve the 2-year work
program and authorize the first year's work subject to availability of
funds. Prior to the beginning of the second year, when the actual
amount of funds that will be available is known, the State would only
need to submit a request to revise the budget to reflect the actual
funds available (and if necessary any significant amendments in the
description of work to be accomplished) for the second year and request
the FHWA's authorization to proceed with the second year's work.
Section 420.113 Eligibility of Costs
This section includes general criteria and incorporates by
reference other regulations and OMB Circulars for determining
eligibility of transportation planning and RD&T activities and
allowability of items of cost (e.g., salaries, travel) within such
activities that are proposed for FHWA planning and research funds.
Administrative procedures that must be followed for costs to be
eligible for reimbursement are also included.
One commenter requested that a list of examples of transportation
planning and RD&T activities that are eligible for FHWA planning and
research funds be included in the final rule. Appropriate sections of
title 23, U.S.C., that include information on broad categories of
eligible activities are included by reference. The FHWA believes that
any attempt to provide a more specific listing could be misinterpreted
since all eligible activities could not possibly be listed. The
longstanding practice of allowing the FHWA field offices to determine
eligible activities, in consultation with the headquarters office if
necessary, has worked well in the past and will be continued. In
addition, the FHWA headquarters office will continue to issue
appropriate guidance when necessary on the eligibility of specific
types of activities. For example, in response to several inquiries
since enactment of the ISTEA, guidance has been provided on the use of
FHWA planning and research funds for transportation planning involving
modes in addition to highway or transit. As discussed in the preamble
to the NPRM, transportation planning studies involving modes in
addition to highway or transit are eligible for FHWA planning and
research funds when performed as part of the statewide or metropolitan
transportation planning processes.
In response to questions regarding eligibility of travel costs of
team members conducting peer reviews of a State's RD&T management
process, subpart B has been revised, as discussed below under the
responses to comments on subpart B, to specify that such travel costs
are eligible for FHWA planning and research funds. While not required
by this regulation or 23 CFR part 450, similar peer reviews of
statewide and metropolitan transportation planning processes would also
be eligible if included in a State or MPO transportation planning work
program and it is determined by the FHWA that the costs are necessary,
reasonable, and benefit the FHWA planning and research funded
transportation planning process.
Paragraph (b) of this section in the NPRM referenced the provisions
of 23 CFR part 140, subpart G on the allowability of indirect costs of
STA planning and research units. The allowability of such costs for any
STA unit that performs work for development, establishment, and
implementation of the management and monitoring systems required under
23 U.S.C. 303 was addressed in a May 3, 1994, memorandum to the FHWA
and FTA Regional Administrators. (This memorandum is available for
review and copying in the file for FHWA docket number 93-18 at the
address specified above under the caption FOR FURTHER INFORMATION
CONTACT.) To more clearly identify such allowable indirect costs, the
reference to 23 CFR part 140, subpart G has been replaced with the
specific provisions and information provided in the May 3 memorandum.
In accordance with longstanding FHWA interpretation of 23 U.S.C. 302,
except as specified in new paragraph (b)(2) of Sec. 420.113, STA
indirect costs are not eligible for reimbursement with FHWA planning
and research funds. Paragraph (b)(2) specifies that salaries, but not
other indirect costs, for services rendered by STA employees generally
classified as administrative are eligible for reimbursement for a
transportation planning unit, RD&T unit, or other unit performing
eligible work with FHWA planning and research funds (including
development, establishment, and implementation of the management and
monitoring systems required by 23 U.S.C. 303 and 23 CFR part 500). Such
STA administrative costs are allowable in the ratio of time spent on
the FHWA planning and research funded work in the unit to the total
unit's working hours. The FHWA is currently conducting a review of its
longstanding policy on eligibility of STA indirect costs and, if
necessary based on the results of this review, the provisions in this
section will be amended.
Section 420.115 Approval and Authorization Procedures
This section includes procedures for approval of work programs or
projects, and amendments thereto, and authorization for work to be
performed with FHWA planning and research funds. The governmentwide
common grant management provisions for prior awarding agency approval
of certain budget and programmatic changes are referenced at 49 CFR
18.30. While executed project agreements are still necessary, the
language in paragraph (c) was revised to eliminate reference to forms
PR-2 and PR-2A since these forms are currently being revised and the
form numbers may change.
Several commenters believe that the requirement for prior FHWA
approval for budget and programmatic changes as specified in 49 CFR
18.30 is contrary to the intent of giving States more responsibility
and authority. Some commenters also recommended that, after receiving
initial FHWA approval of the work programs, additional FHWA approval
should only be sought when a budget revision means additional Federal
funds are required. One commenter suggested that FHWA approval be
sought only when a budget revision exceeds the limits of $10,000 and 15
percent of a research study cost as specified in 23 CFR 511.3(e).
Most of these comments reflect a misunderstanding of the provisions
of 49 CFR 18.30 which are governmentwide common grant management
provisions that have been applicable to FHWA planning and research
funded work programs since revision of OMB Circular A-102 in 1988 and
issuance of 49 CFR part 18. These provisions were included in 23 CFR
part 420 in the 1990 update and are unchanged in this final rule.
The limit of $10,000 and 15 percent under 23 CFR 511.3(e), applies
to individual RD&T studies; for example, a cost increase of greater
than $15,000 for a $100,000 study would require prior approval. Under
the provisions of 49 CFR 18.30(c)(1)(ii), the State may make budget
transfers among direct cost categories (e.g., individual RD&T studies)
without FHWA prior approval unless the total of such transfers over the
period of the work program will, or is expected to, exceed the larger
of $100,000 or 10 percent of the total approved (i.e., work program)
budget. For example, if an RD&T work program totals $2 million, the
State may transfer $200,000 among direct cost line items included in
the work program without prior FHWA approval. At the discretion of the
FHWA, this prior approval requirement may be waived. Thus the use of
the provisions of 49 CFR 18.30 provide more flexibility and authority
to the State than the provisions that are being replaced.
On the other hand, a budget change that involves an increase in the
total funds authorized for the work program still requires prior FHWA
approval and authorization. Similarly, the programmatic changes (e.g.,
adding a line item, contracting out) specified in 49 CFR 18.30(d)
require prior FHWA approval.
One commenter interpreted the provisions of paragraphs (b) and (c)
of this section to imply that the State can impose obligation
limitations on subrecipients of the PL funds and requested that it be
clarified to indicate that such limits can indeed be applied.
The provisions of these paragraphs are not new and are not related
to the issue of distribution of available obligation authority within a
State. These provisions allow work to proceed and be reimbursed at a
later date in situations where sufficient funds or obligation authority
are not available at the time authorization is requested for all work
in a statewide or metropolitan area work program. Obligation authority
is distributed to the States for use by the States as determined in
cooperation with the FHWA field offices. In general, neither
legislation nor the FHWA specifies categories of funds for which the
States must use the obligation authority. States may choose to request
authorization of only a portion of the PL funds needed for a work
program period, but would then need to ensure that additional funds are
requested and authorized prior to the MPO proceeding with the remainder
of the work program. Such partial funding necessitates processing of
project amendments and additional paperwork. It also could result in an
MPO performing work that would be ineligible for reimbursement if the
work is performed prior to approval of the amendment. Such partial
funding should be avoided if possible.
Section 420.117 Program Monitoring and Reporting
This section includes grant monitoring and reporting requirements.
The frequency and content of progress and financial reports specified
in paragraphs (a) through (d) are identical to those contained in the
governmentwide common grant management requirements and 49 CFR 18.40
which is referenced in paragraph (a). Paragraph (e) requires FHWA
approval prior to publication of reports that document the results of
work performed with FHWA planning and research funds. A State may
request waiver of this prior approval requirement. The reference to the
Federal-aid Project Agreement (Form PR-2) in the first sentence of
paragraph (e) has been deleted since Form PR-2 is being revised and the
contents of the cited provision for prior approval of reports are
included in this paragraph.
Several commenters believe that these reporting requirements are
contrary to the concept of delegation of program management
responsibility to the State which should be allowed to determine how to
monitor its research program; FHWA review and approval should be
limited to assurance that an adequate monitoring process is in place
and is being used to guide the State's program; and, if a State truly
has responsibility for managing its own program, the State should
determine the needed frequency of reporting for adequately monitoring
projects. Another commenter recommended that an annual report should be
adequate and that the reporting format should be kept simple.
These grant reporting requirements are not new and are standard
governmentwide grant reporting requirements that replaced more
comprehensive requirements that were in 23 CFR part 420 prior to 1990.
These reports are necessary for the FHWA to perform its grant oversight
responsibilities. Progress and financial reports that include the
specified information must be submitted at least annually. The FHWA
field offices may require more frequent reports, but not more than
quarterly, unless the State is determined to be a high-risk grantee in
accordance with the provisions of 49 CFR 18.12. The reporting
requirements are for the work program (i.e., grant), not for individual
``projects/studies.'' The progress reports previously required in 23
CFR part 511 for individual research studies are no longer required.
Progress on individual studies would be addressed in the overall work
program report. A State may establish additional reporting procedures
that meet its needs for individual studies.
Similarly, another commenter stated that Sec. 420.117 requires an
increased level of reporting activity and that the interpretation and
administration of this section could produce some very demanding
requirements. This commenter also questioned who would establish and
approve performance goals, and what level of detail would be required.
As indicated above, this section is unchanged from the existing
regulation and does not require increased reporting. The level of
reporting will only be greater for a State or subrecipient if the State
or subrecipient was not in compliance with the existing requirements.
One commenter recommended that the reporting provisions be flexible
enough to allow monthly reports if agreed to by the agency and the
subrecipient.
As mentioned above, the FHWA may require more frequent reports, but
may not require submission of reports more than quarterly unless a
recipient or subrecipient is determined to be a high risk. A State may
establish the frequency of progress and financial reports for its
subgrantees, but is encouraged not to impose more burdensome
requirements than those imposed upon the State by the FHWA.
One commenter stated that the requirement in Sec. 420.117(c) that
reports from subrecipients be submitted no more than 90 days after the
end of the reporting period does not allow sufficient time to complete
the audit of the work program, especially when the MPO has elected a 2-
year cycle for the audit to be performed. It was suggested that the 90-
day requirement be deleted and the timeframe be determined by the State
with approval of the FHWA.
The commenter is confusing grant audit requirements with grant
reporting requirements. In accordance with governmentwide common grant
management requirements, final progress and financial reports for a
grant (i.e., the annual/biennial work program) must be submitted within
90 days of the end of the grant period. If the later financial audit,
which covers the MPO's fiscal year and typically is not completed until
a year after the end of the grant period, necessitates adjustments, the
grant may be reopened or adjustment may be made to a current grant, as
appropriate. With regard to the statement that an MPO has been
operating under a 2-year cycle for financial audits, in accordance with
the OMB Circular A-128, Single Audits of State and Local Governments,
audits must be performed annually unless a constitutional or statutory
requirement for less frequent audit was in effect by January 1, 1987.
One commenter stated that the requirement that a State must request
a waiver of prior approval of report publication is an unnecessary and
demeaning retention of FHWA authority; the State should have sole
responsibility and authority to publish reports that follow accepted
editorial formatting for electronic data base management and retrieval
purposes; and the use of a report as evidence of work performed and
approval for publication are two separate issues and should not be
combined. Another commenter stated that FHWA approval of reports prior
to publication is inconsistent with the intent of allowing States
flexibility in managing their own programs.
With respect to ``editorial formatting,'' the FHWA does not review
reports for this purpose. The FHWA agrees that the use of a report as
evidence of work performed and approval for publication are two
separate issues, but does not agree that they should not be combined.
This comment implies that the report should be submitted to the FHWA
after publication for acceptance as evidence of work performed. In
addition to determining if the proposed work that was approved as part
of the grant was performed, the FHWA should have an opportunity to
determine if the contents of the report are supported by the work
performed since the published report will include a credit reference to
the FHWA. Also, submission prior to publication allows a State to use
FHWA expertise, if desired, to identify any necessary technical
corrections prior to publication and distribution. If, based on past
performance, an FHWA field office is satisfied that prior review is
unnecessary and a State requests a waiver of the prior review
requirement, the field office may grant the waiver for all reports or
for selected categories (e.g., State planning, MPO planning, all
research, or bridge research). A waiver may be granted for an
indefinite period of time, annually, or any other appropriate period.
Whether or not a waiver is approved, appropriate reports that document
work performed with FHWA planning and research funds must be prepared,
the reports must include a credit reference and disclaimer statement,
and copies must be provided to the FHWA as evidence of work performed.
Section 420.119 Fiscal Procedures
This section includes fiscal requirements for administration,
matching, and payment for FHWA planning and research funds. Paragraph
(c) specifies that the statewide and, if appropriate, metropolitan
transportation improvement program provisions of 23 CFR Part 450 need
to be met for the use of NHS, STP, MA, or HBRRP funds for planning or
RD&T purposes. Paragraph (d) includes provisions for waiver of matching
requirements for SPR and PL funds (this option is not applicable for
optional use of STP, NHS, MA, or HBRRP funds for planning or RD&T
activities). If the FHWA determines that the interests of the Federal-
aid program would be best served without matching, it may waive the
matching requirement for individual activities or regional or national
pooled-fund studies.
Two commenters stated that authority to approve 100 percent Federal
funding should be delegated to the FHWA regional offices.
The approval authority for 100 percent Federal funding will remain
with the Associate Administrator for Program Development (for planning
activities) and the Associate Administrator for Research and
Development (for RD&T activities) since these offices are in the best
position to determine whether the interests of the Federal-aid highway
program would be best served and whether the proposed work can be more
effectively addressed if the matching requirement is waived.
Several commenters stated that limiting the cost to a minimum of
$50,000 for cooperatively (pooled) funded projects and requiring an
agency's contribution to be at least $10,000 were inappropriate.
Due to administrative costs and the time involved in coordinating
pooled-fund studies, proposed national studies costing less than
$50,000 will not be accepted. In response to the comments, the minimum
agency contribution of $10,000 has been deleted. Agencies contributing
less than $10,000 to a national pooled-fund study may participate in
the technical committee meetings, but will not be reimbursed from the
pooled funds for their expenses to attend the meetings. At the
discretion of the FHWA regional offices and participating agencies,
regional pooled-fund studies of less than $50,000 may be undertaken and
travel costs may be reimbursed from the regional pooled funds for
expenses for attendance at technical committee meetings of
representatives of agencies that contribute less than $10,000.
Section 420.121 Other Requirements
This section contains, mostly by cross reference, other legislative
or regulatory requirements applicable to FHWA planning and research
fund grants. Except as noted below, this section is unchanged from the
NPRM.
With respect to paragraph (d), one commenter stated that it appears
that the regulation does not differ from present procedures with
respect to the acquisition of research equipment. It was suggested that
more latitude be given to the States for the purchase of research
equipment with SPR funds when the equipment will clearly be devoted to
research at a facility largely supported by SPR funds.
In accordance with governmentwide grant management procedures and
cost principles, equipment is eligible if the cost is necessary,
reasonable, and it benefits the grant. Individual items of equipment
must be identified in the grant application (i.e., the work program)
and will be reviewed for eligibility on a case-by-case basis. In
general, if the equipment will be used only for FHWA funded work, all
of the cost may be eligible. If the equipment will be used for work
funded by other sources, the cost should be shared on an equitable
basis or through the establishment of rental/use rates.
As noted above under the heading General Comments and Responses,
paragraph (o) has been added to this section. This new paragraph
specifies that subawards to institutions of higher education,
hospitals, and other nonprofit organizations will be administered by
the State in accordance with the provisions of OMB Circular A-110 (58
FR 62992) and the U.S. DOT's implementing regulations, 49 CFR part 19
(59 FR 15657). (Copies of OMB Circular A-110 and 49 CFR part 19 are
available for review and copying in the file for FHWA docket number 93-
18 at the address specified above under the caption FOR FURTHER
INFORMATION CONTACT.)
A new paragraph (p) has been added to specify that reports and
other documents prepared under FHWA planning and research funded grants
or subgrants awarded after the effective date of this regulation must
be in metric units.
Subpart B--Research, Development, and Technology Transfer Program
Management
General Comments and Responses
Comment: Several commenters requested clarification concerning
various aspects of the peer review process, including the purpose and
use of the results of the reviews, funding of travel for review team
members, and frequency of the reviews.
Response: It is the State's responsibility to initiate a peer
review of its RD&T management process. An initial peer review should be
undertaken sometime during the first three years after the State's
management process has been approved by the FHWA Division Office.
The peer review is intended to review a State's management process,
not the content of its RD&T program. It will not be used for compliance
or certification. Peer reviews should help in identifying, reinforcing,
and conveying effective program approaches across the country and
enable a nationwide sharing of successful practices and policies. The
purpose of providing the peer review report and a written response to
the report findings to the FHWA Division Administrator is primarily to
keep the Division Administrator informed of the status of the State's
program and what efforts are being taken to improve the program.
The members of the peer review team will be selected by the State.
The FHWA will establish criteria for team members and will develop and
maintain a list of qualified individuals who will be available to serve
on the teams. At least two members of the peer review team must be
selected from this list.
A State may include a line item in its work program to pay for the
peer review of its RD&T program with FHWA planning and research funds.
The FHWA will consider establishing a national pooled-fund project if
there is sufficient interest from the States and if it would expedite
the peer review process.
The ``periodic basis'' for conducting peer reviews has been
determined by the FHWA to be once every three years. After experience
has been gained operating under the new procedures, consideration will
be given to extending the time period between reviews.
Comment: Comments were mixed on whether the proposed rule should be
mandatory for all States or whether a State could continue to submit
individual RD&T studies for Federal approval.
Response: The option to submit individual studies for Federal
approval (i.e., to continue operating under current procedures) has not
been included in the final rule. The regulations are mandatory for all
States. The final regulation provides a State with considerable
latitude in developing and managing its RD&T activities and supports
the intent of ISTEA to move the decisionmaking process to the State
level.
The FHWA is available, at a State's request, to assist in reviewing
any RD&T activities that are highly technical or require special
expertise.
Comment: One commenter stated that the FHWA's intent concerning the
degree of RD&T program interaction within State agencies should be more
clearly stated. Specifically, expectations regarding the degree of
management involvement at various organizational levels should be
disclosed.
Response: Due to the different organizational structures of the
States, it is not possible to be specific concerning the degree of
management involvement. Each State should involve those management
levels that are necessary to develop and implement an RD&T program that
addresses high priority transportation issues.
Comment: One commenter stated that the NPRM implies that the FHWA
is going to require a uniform format for State work programs since the
information will be entered into a national data base.
Response: There is no intent to require a uniform work program
format. The FHWA will encourage the States to include summary sheets
listing all studies and costs followed by more detailed information on
individual studies in their work programs. Also, as part of its
management process, each State is required to use the Transportation
Research Board's Transportation Research Information Services (TRIS)
for reporting its active RD&T activities. It will be the State's
responsibility to enter its new RD&T activities into the TRIS data
base. Since uniform entries will be required for the data base, it
could reasonably result in the States' work programs becoming more
uniform to simplify data entry.
Comment: Several commenters expressed concern about the requirement
that each State implement a program of RD&T activities for planning,
design, construction, and maintenance of highways, public
transportation, and intermodal transportation systems. The concerns
were that the budgets for the smaller States are not sufficient to
support activities in all of these areas; the FHWA is requiring the
States to set up separate groups of funding for highway, transit, and
intermodal research; and the term ``program of RD&T activities'' is not
defined.
Response: The ISTEA allows the use of FHWA planning and research
funds for RD&T activities noted in Sec. 420.207. The regulation
reflects the types of activities that may be conducted, but does not
mandate that particular types be conducted. Each State is to develop a
program that addresses its highest priority transportation research
needs. The priorities will vary from State to State depending on such
factors as the size of the State, its population, and the size and
number of urban areas. This regulation does not establish separate
groups of funds for highway, transit, or intermodal research.
Comment: One commenter stated that the conditions for grant
approval appear to require more paperwork than currently required.
Response: Initially, for some States, it may require additional
effort to document the State's RD&T management process. Once the
management process has been documented and approved by the FHWA the
amount of paperwork between the State and the FHWA should be reduced
substantially. Paperwork on individual RD&T activities essentially will
be eliminated.
Comment: One commenter was concerned that without additional
explanation each FHWA Division Office would have a different
interpretation of the requirement that a State have procedures to
determine the effectiveness of its RD&T program.
Response: Guidelines for implementing subpart B are being
developed. These guidelines will expand on the requirements in
Sec. 420.207. As a minimum, a State should develop a follow-up
procedure to determine if the RD&T results have been incorporated into
the State's standard plans, specifications, practices, or procedures. A
more detailed process could involve benefit/cost ratios or other
effectiveness measures.
Comment: One commenter stated that to list individual studies in
the work program reduced the State's ability to be responsive to
research needs as they arise during the year. According to the
commenter this will cause a delay in the start of new research by
having to wait for the next program approval or for approval of an
amended program.
Response: A listing of individual studies in the work program is
necessary for the FHWA Division Office to determine if the items are
eligible for FHWA planning and research funds. Addition or deletion of
individual studies is a programmatic change that requires prior FHWA
approval. Such prior approval may be waived by the FHWA division
office; however, the total FHWA planning and research funds authorized
for the work program cannot be exceeded without FHWA prior
authorization. It is anticipated that once a State has demonstrated
that it has an adequate RD&T management process that meets the
requirements of this rule, the FHWA Division Office would consider a
request for waiver of prior approval of programmatic changes in the
work program.
Section-by-Section Analysis
Section 420.201 Purpose and Applicability
This section states the purpose of subpart B. It indicates that the
requirements are applicable to RD&T activities performed by the States
and their subrecipients with FHWA planning and research funds. It
references the provisions of subpart A. This section is unchanged from
that proposed in the NPRM.
Section 420.203 Definitions
This section includes the definitions in 23 U.S.C. 101(a) and
subpart A and provides additional definitions for terms used in this
subpart.
Several commenters stated that the definition of ``peer review'' in
the NPRM could be misinterpreted to require participation of
representatives of specific organizations listed in the definition and
that the definition should be revised to clearly state what is
intended. The definition has been revised to indicate that a ``peer
review'' is a review of a State's RD&T program conducted by persons who
are knowledgeable in RD&T management and operation and to clarify that
the peer review team may include, and is not limited to,
representatives of another State, the FHWA, the American Association of
State Highway and Transportation Officials, the Transportation Research
Board, universities, or the private sector.
Commenters suggested that definitions of the terms ``RD&T
activity'' and ``intermodal RD&T'' be included to provide an indication
of individual or categories of activities that are included in these
terms that are used in other sections of the rule.
The FHWA has added definitions of these two terms.
Section 420.205 Policy
This section explains the FHWA's intent to allow States maximum
flexibility and discretion in managing and directing their FHWA
planning and research funded RD&T activities while ensuring proper
utilization of Federal funds and avoiding unnecessary duplication of
effort.
Except for removal of paragraph (h), this section is unchanged from
the NPRM. Paragraph (h) includes the nondiscrimination provisions of
title VI of the Civil Rights Act of 1964 and DOT and FHWA implementing
regulations. Most of this paragraph was redundant of Sec. 420.121(m),
which applies to RD&T as well as planning programs. The citation to 23
CFR part 200 that was in this paragraph has been moved to
Sec. 420.121(m).
Section 420.207 Conditions for Grant Approval
This section outlines the conditions that a State must meet for
approval of FHWA planning and research funds for its RD&T activities.
Paragraph (b) has been revised to indicate that a State's work
program ``may'' include a line item for the costs associated with a
peer review of its RD&T program.
The FHWA will establish criteria and develop and maintain a list of
qualified individuals who will be available to serve on peer review
teams. A requirement has been added to paragraph (b) providing that at
least two members of the peer review team must be selected from the
FHWA list.
The last sentence in paragraph (c) has been rewritten to eliminate
the impression that the peer review team is under the direction of the
FHWA.
Section 420.209 RD&T Work Program
This section outlines the items that must be included in a State's
work program and incorporates by reference Sec. 420.115 for approval
and authorization procedures. The title of this section has been
changed from ``State work program'' to ``RD&T work program'' since it
includes provisions applicable to the RD&T program. A requirement to
include a summary, listing the major items and estimated cost, has been
added to this section. The summary will provide a quick overview of the
content of a State's RD&T program.
Section 420.211 Eligibility of Costs
This section indicates eligible costs for FHWA participation in
RD&T activities and references Sec. 420.113 for other eligible costs.
Paragraph (c) was revised to conform with Sec. 420.113(b).
Section 420.213 Certification Requirements
This section provides the format for a State's certification
indicating (1) State compliance with the requirements of this subpart;
(2) the condition under which a new certification is required; and (3)
the due date for the initial certification.
Several commenters noted that some States may not be able to comply
with the proposed January 1, 1995, certification date. The date for
certification has been changed to June 30, 1995. In addition, a
provision has been added that allows the FHWA Division Administrator to
grant conditional approval of a State's RD&T management process for a
State unable to achieve full compliance by June 30, 1995. A conditional
approval would cite those areas of the State's management process that
are deficient and that all deficiencies would need to be corrected by
January 1, 1996.
Questions were asked on how often a certification needs to be
submitted and if a State could begin operating under the new procedures
prior to proposed date of January 1, 1995. The certification is a one-
time submittal, unless a State significantly changes its RD&T
management process. A copy of the State's certification is to be
submitted with its work program. A State may begin operating under
these procedures as soon as its RD&T management process is approved by
the FHWA.
Section 420.215 Procedure for Withdrawal of Approval
This section outlines the procedures used and penalties imposed if
a State is not complying with the requirements of this subpart or is
not performing in accordance with its RD&T management process.
Paragraph (d) in the NPRM proposed that, for any State not in
compliance, the FHWA would withdraw the State's ability to approve RD&T
activities and require the State to submit individual studies for FHWA
approval. This approval requirement is similar to current procedures
and would have provided little incentive for a State to correct
deficiencies in its program. Therefore, paragraph (d) has been revised
to indicate that an adverse decision shall result in the immediate
withdrawal of FHWA planning and research funding for the State's RD&T
activities until the State is in full compliance.
Rulemaking Analyses and Notices
Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures
The FHWA has determined that this rulemaking is not a significant
regulatory action within the meaning of Executive Order 12866 or a
significant regulation under the regulatory policies and procedures of
the Department of Transportation. This action amends requirements for
administration of FHWA planning and research funds to be consistent
with legislative changes made by the ISTEA. Also, this rulemaking
establishes a mandatory State certification process and a Federal and
peer review process to determine annually whether each State complies
with the standards for State RD&T management in subpart B. The economic
costs of this rulemaking will be insignificant and will consist only of
the costs associated with preparation of the grant applications and
State development of procedures for RD&T management. The cost savings
that will be realized by the States due to the reduction in time to
initiate and conduct RD&T activities under the State RD&T management
provisions will more than offset the one-time cost of development of
the procedures.
Regulatory Flexibility Act
In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), the FHWA has evaluated the effects of this rule on small
entities. This rule addresses the administrative procedures and
requirements that States must comply with when using FHWA planning and
research funds provided under title 23, U.S.C. This rule does not
impose any direct requirement on small entities that would result in
increased economic costs. Based on this evaluation, the FHWA certifies
that this rule will not have a significant economic impact on a
substantial number of small entities.
Executive Order 12612 (Federalism Assessment)
This action has been analyzed in accordance with the principles and
criteria contained in Executive Order 12612. Although this rule relates
to requirements that States must meet to be eligible for FHWA planning
and research funds, federalism implications, though unavoidable, would
be minimized. Nothing in this rule preempts any State law or
regulation. The rule provides States increased authority and
flexibility to manage their federally assisted State planning and
research programs. This increase in authority and flexibility is in
concert with the principles and criteria contained in Executive Order
12612 for the implementation of express statutory provisions.
Accordingly, the FHWA certifies that this rule does not have sufficient
Federalism implications to warrant the preparation of a full Federalism
Assessment under the principles and criteria contained in Executive
Order 12612.
Executive Order 12372 (Intergovernmental Review)
Catalog of Federal Domestic Assistance Program Number 20.205,
Highway Planning and Construction. The regulations implementing
Executive Order 12372 regarding intergovernmental consultation of
Federal programs and activities apply to this program.
Paperwork Reduction Act
The information collection requirements referenced in
Sec. 420.105(b) have been approved by the OMB under the provisions of
the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3520) and have been
assigned OMB control numbers 2125-0028 and 2125-0032. The information
collection requirements in Secs. 420.111 (a), (b), and (c), and 420.117
(b) and (c) for metropolitan planning areas have been approved by the
OMB and assigned control number 2132-0529. The information collection
requirements in Secs. 420.111 (a), (b), and (c), 420.117 (b) and (c),
and 420.213 (a) and (b) for State planning and RD&T activities have
been submitted to the OMB for approval.
National Environmental Policy Act
The agency has analyzed this action for the purpose of the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and has
determined that this action would not have any effect on the quality of
the environment.
Regulation Identification Number
A regulation identification number (RIN) is assigned to each
regulatory action listed in the Unified Agenda of Federal Regulations.
The Regulatory Information Service Center publishes the Unified Agenda
in April and October of each year. The RIN contained in the heading of
this document can be used to cross reference this action with the
Unified Agenda.
For the reasons set out in the preamble, and under the authority of
23 U.S.C. 315 and 49 CFR 1.48, title 23, Code of Federal Regulations,
is revised as set forth below.
List of Subjects in 23 CFR Parts 420 and 511
Accounting, Grant programs--transportation, Highways and roads,
Planning, Reporting and recordkeeping requirements, Research.
Issued on: July 18, 1994.
Rodney E. Slater,
Federal Highway Administrator.
In consideration of the foregoing, the FHWA amends Chapter I of
title 23, Code of Federal Regulations, by revising the heading of
subchapter E, by revising part 420, and by removing and reserving part
511 as set forth below.
SUBCHAPTER E--PLANNING AND RESEARCH
1. The heading of subchapter E is revised as set forth above.
2. Part 420 is revised to read as follows:
PART 420--PLANNING AND RESEARCH PROGRAM ADMINISTRATION
Subpart A--Administration of FHWA Planning and Research Funds
Sec.
420.101 Purpose and applicability.
420.103 Definitions.
420.105 Policy.
420.107 SPR minimum research, development, and technology transfer
expenditure.
420.109 Distribution of PL funds.
420.111 Work program.
420.113 Eligibility of costs.
420.115 Approval and authorization procedures.
420.117 Program monitoring and reporting.
420.119 Fiscal procedures.
420.121 Other requirements.
Subpart B--Research, Development and Technology Transfer Program
Management
Sec.
420.201 Purpose and applicability.
420.203 Definitions.
420.205 Policy.
420.207 Conditions for grant approval.
420.209 State work program.
420.211 Eligibility of costs.
420.213 Certification requirements.
420.215 Procedure for withdrawal of approval.
Authority: 23 U.S.C. 103(i), 104(f), 115, 120, 133(b), 134(n),
157(c), 303(g), 307, and 315; and 49 CFR 1.48(b).
Subpart A--Administration of FHWA Planning and Research
Sec. 420.101 Purpose and applicability.
This part prescribes the Federal Highway Administration (FHWA)
policies and procedures for the administration of activities undertaken
by States and their subrecipients, including Metropolitan Planning
Organizations (MPOs), with FHWA planning and research funds. It applies
to activities and studies funded as part of a recipient's or
subrecipient's work program or as separate Federal-aid projects that
are not included in a work program. This subpart also is applicable to
the approval and authorization of research, development, and technology
transfer (RD&T) work programs; additional policies and procedures
regarding administration of RD&T programs are contained in subpart B of
this part. The requirements in this part supplement those in 49 CFR
Part 18 which are applicable to administration of these funds.
Sec. 420.103 Definitions.
Unless otherwise specified in this part, the definitions in 23
U.S.C. 101(a) are applicable to this part. As used in this part:
Grant agreement means a legal instrument between an awarding agency
and recipient where the principal purpose is to provide funds to the
recipient to carry out a public purpose of support or stimulation
authorized by law.
FHWA planning and research funds means:
(1) State planning and research (SPR) funds (the 2 percent funds
authorized under 23 U.S.C. 307(c)(1));
(2) Metropolitan planning (PL) funds (the 1 percent funds
authorized under 23 U.S.C. 104(f) to carry out the provisions of 23
U.S.C. 134(a));
(3) National highway system (NHS) funds authorized under 23 U.S.C.
104(b)(1) used for transportation planning in accordance with 23 U.S.C.
134 and 135, highway research and planning in accordance with 23 U.S.C.
307, highway-related technology transfer activities, or development and
establishment of management systems under 23 U.S.C. 303;
(4) Surface transportation program (STP) funds authorized under 23
U.S.C. 104(b)(3) used for highway and transit research and development
and technology transfer programs, surface transportation planning
programs, or development and establishment of management systems under
23 U.S.C. 303; and
(5) Minimum allocation funds authorized under 23 U.S.C. 157(c) used
for carrying out, respectively, the provisions of 23 U.S.C. 307(c)(1)
(up to 1\1/2\ percent) and 23 U.S.C. 134(a) (up to \1/2\ percent).
Metropolitan planning area means the geographic area in which the
metropolitan transportation planning process required by 23 U.S.C. 134
and section 8 of the Federal Transit Act (49 U.S.C. app. 1607) must be
carried out.
Metropolitan planning organization (MPO) means the forum for
cooperative transportation decisionmaking for a metropolitan planning
area.
National pooled-fund study means a planning or RD&T study or
activity expected to solve problems of national significance, usually
administered by the FHWA headquarters office in cooperation with States
and/or MPOs, that is funded by State and/or MPO contributions of FHWA
planning and research funds, with or without matching funds.
Procurement contract means a legal instrument between an awarding
agency and recipient where the principal purpose is to acquire (by
purchase, lease, or barter) property or services for the direct benefit
or use of the awarding agency.
Regional pooled-fund study means a planning or RD&T study expected
to solve problems of regional significance, usually administered by an
FHWA region office in cooperation with a lead State and/or MPO, that is
funded by State and/or MPO contributions of FHWA planning and research
funds, with or without matching funds.
State transportation agency (STA) means the State highway
department, transportation department, or other State transportation
agency to which Federal-aid highway funds are apportioned.
Work program means a periodic statement of proposed work and
estimated costs that document the eligible activities to be undertaken
with FHWA planning and research funds during the next 1 or 2-year
period by STAs and/or their subrecipients.
Sec. 420.105 Policy.
(a) Within the limitations of available funding and with the
understanding that planning activities of national significance,
identified in paragraph (b) of this section, and the requirements of 23
U.S.C. 134, 135, 303, and 307(c) are being adequately addressed, the
FHWA will allow STAs and their subrecipients:
(1) Maximum possible flexibility in the use of FHWA planning and
research funds to meet highway and multimodal transportation planning
and RD&T needs at the national, State, and local levels while ensuring
legal use of such funds and avoiding unnecessary duplication of
efforts; and
(2) To determine which eligible planning and RD&T activities they
desire to support with FHWA planning and research funds and at what
funding level.
(b) The STAs shall provide data that support the FHWA's
responsibilities to the Congress and to the public. These data include,
but are not limited to, information required for: Preparing proposed
legislation and reports to the Congress; evaluating the extent,
performance, condition, and use of the Nation's transportation systems;
analyzing existing and proposed Federal-aid funding methods and levels
and the assignment of user cost responsibility; maintaining a critical
information base on fuel availability, use, and revenues generated; and
calculating apportionment factors.
(The information collection requirements in paragraph (b) of
Sec. 420.105 have been approved by the Office of Management and
Budget (OMB) under control numbers 2125-0028 and 2125-0032.)
Sec. 420.107 SPR minimum research, development, and technology
transfer expenditure.
(a) In accordance with the provisions of 23 U.S.C. 307(c), not less
than 25 percent of the SPR funds apportioned to a State for a fiscal
year shall be expended for RD&T activities relating to highway, public
transportation, and intermodal transportation systems, unless the State
certifies, and the FHWA accepts the State's certification, that total
expenditures by the State during the fiscal year for transportation
planning under 23 U.S.C. 134 and 135 will exceed 75 percent of the
amount apportioned for the fiscal year.
(b) Prior to submitting a request for an exception to the 25
percent requirement, the State shall ensure that:
(1) The additional planning activities are essential and there are
no other reasonable options available for funding these planning
activities (including the use of National Highway System, Surface
Transportation Program, or Federal Transit Administration Section
26(a)(2) funds or by deferment of lower priority planning activities);
(2) The planning activities have a higher priority than RD&T
activities in overall needs of the State for a given year; and
(3) The total level of effort by the State in RD&T (using both
Federal and State funds) is adequate.
(c) If the State chooses to pursue an exception, the request, along
with supporting justification, shall be sent to the FHWA Division
Administrator for action by the FHWA Associate Administrator for
Research and Development. The Associate Administrator's decision shall
be based upon the following considerations:
(1) Whether the State has a process for identifying RD&T needs and
for implementing a viable RD&T program.
(2) Whether the State is contributing to cooperative RD&T programs
or activities, such as the National Cooperative Highway Research
Program, the Transportation Research Board, the implementation of
products of the Strategic Highway Research Program, and pooled-fund
studies.
(3) Whether the State is using SPR funds for technology transfer
and for transit or intermodal research and development to help meet the
25 percent minimum requirement.
(4) The percentage or amount of the State's FHWA planning and
research funds that were used for RD&T prior to enactment of the 25
percent requirement and whether the percentage or amount will increase
if the exception is approved.
(5) If an exception is approved for the fiscal year, whether the
State can demonstrate that it will meet the requirement or
substantially increase its RD&T expenditures over a multi-year period.
(6) Whether the amount of Federal funds needed for planning for the
program period exceeds the total of the 75 percent limit for the fiscal
year and any unexpended (including unused funds that can be released
from completed projects) funds for planning from previous
apportionments.
(d) If the State's request for an exception is approved, the
exception will be valid only for the fiscal year in which the exception
is approved. A new request must be submitted in subsequent fiscal
years.
Sec. 420.109 Distribution of PL funds.
(a) States shall make all PL funds authorized by 23 U.S.C. 104(f)
available to the MPOs in accordance with a formula developed by the
State, in consultation with the MPOs, and approved by the FHWA. The
State shall not use any PL funds for grant or subgrant administration.
(b) In developing the formula for distributing PL funds, the State
shall consider population, status of planning, attainment of air
quality standards, metropolitan area transportation needs, and other
factors necessary to provide for an appropriate distribution of funds
to carry out the requirements of 23 U.S.C. 134 and other applicable
requirements of Federal law.
(c) As soon as practicable after PL funds have been apportioned by
the FHWA to the States, the STAs shall inform the MPOs and the FHWA of
the amounts allocated to each MPO.
(d) If the STA, in a State receiving the minimum apportionment of
PL funds under the provisions of 23 U.S.C. 104(f)(2), determines that
the share of funds to be allocated to any MPO results in the MPO
receiving more funds than necessary to carry out the provisions of 23
U.S.C. 134(a), the STA may, after considering the views of the affected
MPOs and with the approval of the FHWA, use these funds to finance
transportation planning outside of metropolitan planning areas.
(e) In accordance with the provisions of 23 U.S.C. 134(n), any PL
funds not needed for carrying out the metropolitan planning provisions
of 23 U.S.C. 134 may be made available by the MPOs to the State for
funding statewide planning activities under 23 U.S.C. 135, subject to
approval by the FHWA.
(f) Any State PL fund distribution formula that does not meet the
requirements of paragraphs (a) or (b) of this section shall be brought
into conformance with such requirements as soon as possible, but no
later than in time for distribution of PL funds apportioned to the
State for the first Federal fiscal year beginning after August 22,
1994.
Sec. 420.111 Work program.
(a) Proposed use of FHWA planning and research funds shall be
documented by the STAs and subrecipients in a work program(s)
acceptable to the FHWA. Statewide, metropolitan, other transportation
planning activities, and transportation RD&T activities may be
administered as separate programs, paired in various combinations, or
brought together as a single work program. Similarly, these
transportation planning and RD&T activities may be authorized for
fiscal purposes as one combined Federal-aid project or as separate
Federal-aid projects. The expenditure of PL funds for transportation
planning outside of metropolitan planning areas under Sec. 420.109(d)
may be included in the work program for statewide transportation
planning activities or in a separate work program submitted by the STA.
(b) Work program(s) that document transportation planning
activities shall include a description of work to be accomplished and
cost estimates for each activity. Additional information on
metropolitan planning area work programs is contained in 23 CFR
450.314. Additional information on research, development, and
technology transfer work program content and format is contained in
subpart B of this part.
(c) The STAs that use separate Federal-aid projects in accordance
with Sec. 420.111(a) shall submit, in addition to the financial
information specified below for each program, one overall summary
showing the funding for the entire FHWA funded planning, research,
development, and technology transfer effort. Each work program shall
include a financial summary that shows:
(1) Federal share by type of fund;
(2) Matching rate by type of fund;
(3) State and/or local matching share; and
(4) Other State or local funds.
(d) The STAs and MPOs also are encouraged to include cost estimates
for transportation planning, research, development, and technology
transfer related activities funded with other Federal or State and/or
local funds; particularly for producing the FHWA-required data
specified in paragraph (b) of Sec. 420.105, for planning for other
transportation modes, and for air quality planning activities in areas
designated as nonattainment for transportation-related pollutants in
their work programs. The MPOs in Transportation Management Areas shall
include such information in their work programs in accordance with the
provisions of 23 CFR part 450.
(The information collection requirements in Secs. 420.111(a), (b),
and (c), and 420.117(b) and (c) for metropolitan planning areas have
been approved by the OMB and assigned control number 2132-0529.)
Sec. 420.113 Eligibility of costs.
(a) Costs will be eligible for FHWA participation provided that the
costs:
(1) Are for work performed for activities eligible under the
section of title 23, U.S.C., applicable to the class of funds used for
the activities;
(2) Are verifiable from the STA's or the subrecipient's records;
(3) Are necessary and reasonable for proper and efficient
accomplishment of project objectives and meet the other criteria for
allowable costs in the applicable cost principles cited in 49 CFR
18.22;
(4) Are included in the approved budget, or amendment thereto; and
(5) Were not incurred prior to FHWA authorization.
(b)(1) Except as specified in paragraph (b)(2) of this section,
indirect costs of an STA are not eligible for reimbursement with FHWA
planning and research funds.
(2) Salaries for services rendered by STA employees who are
generally classified as administrative are eligible for reimbursement
for a transportation planning unit, RD&T unit, or other unit performing
eligible work with FHWA planning and research funds (including
development, establishment, and implementation of the management and
monitoring systems required by 23 U.S.C. 303 and 23 CFR part 500) in
the ratio of time spent on the participating portion of work in the
unit to the total unit's working hours.
(c) Indirect costs of MPOs and local governments are allowable if
supported by a cost allocation plan and indirect cost proposal approved
in accordance with the provisions of OMB Circular A-87. An initial plan
and proposal must be submitted to the Federal cognizant or oversight
agency for negotiation and approval prior to recovering any indirect
costs. The cost allocation plan and indirect cost proposal shall be
updated annually and retained by the MPO or local government, unless
requested to be resubmitted by the Federal cognizant or oversight
agency, for review at the time of the audit required in accordance with
49 CFR Part 90. If the MPO or local government's indirect cost rate
varies significantly from the rate approved for the previous year, or
if the MPO or local government changes its accounting system and
affects the previously approved indirect cost allocation plan and
proposal or rate and its basis of application, the indirect cost
allocation plan and proposal shall be resubmitted for negotiation and
approval. In either case, a rate shall be negotiated and approved for
billing purposes until a new plan and proposal are approved.
(d) Indirect costs of other STA subrecipients, including other
State agencies, are allowable if supported by a cost allocation plan
and indirect cost proposal prepared, submitted, and approved by the
cognizant or oversight agency in accordance with the OMB requirements
applicable to the subrecipient.
Sec. 420.115 Approval and authorization procedures.
(a) The STA and its subrecipients shall obtain work program
approval and authorization to proceed prior to beginning work on
activities in the work program. Such approvals and authorizations
should be based on final work program documents. The STA and its
subrecipients also shall obtain prior approval for budget and
programmatic changes as specified in 49 CFR 18.30 and for those items
of allowable costs which require prior approval in accordance with the
applicable cost principles specified in 49 CFR 18.22.
(b) Except for advance construction, authorization to proceed with
the work program(s) in whole or in part shall be deemed a contractual
obligation of the Federal Government pursuant to 23 U.S.C. 106 and
shall require that appropriate funds be available for the full Federal
share of the cost of work authorized. Those STAs that do not have
sufficient FHWA planning and research funds or obligation authority
available to obligate the full Federal share of the entire work
program(s) may utilize the advance construction provisions of 23 U.S.C.
115(a) in accordance with the requirements of 23 CFR Part 630, subpart
G. The STAs that do not meet the advance construction provisions, or do
not wish to utilize them, may request authorization to proceed with
that portion of the work program(s) for which FHWA planning and
research funds are available. In the latter case, authorization to
proceed may be given for either selected work activities or for a
portion of the program period, but such authorization shall not
constitute a commitment by the FHWA to fund the remaining portion of
the work program(s) should additional funds become available.
(c) A project agreement shall be executed by the STA and FHWA
Division Office for each statewide transportation planning,
metropolitan planning area transportation planning, or RD&T work
program, individual activity or study, or any combination administered
as a single Federal-aid project. The project agreement shall be
executed after the authorization has been given by the FHWA to proceed
with the work in whole or in part. In the event that the project
agreement is executed for only part of the work program, the project
agreement shall be amended when authorization is given to proceed with
additional work.
Sec. 420.117 Program monitoring and reporting.
(a) In accordance with 49 CFR 18.40, the STA shall monitor all
activities, including those of its subrecipients, supported by FHWA
planning and research funds to assure that the work is being managed
and performed satisfactorily and that time schedules are being met.
(b)(1) The STA shall submit performance and expenditure reports,
including a report from each subrecipient, that contain as a minimum:
(i) Comparison of actual performance with established goals;
(ii) Progress in meeting schedules;
(iii) Status of expenditures in a format compatible with the work
program, including a comparison of budgeted (approved) amounts and
actual costs incurred;
(iv) Cost overruns or underruns;
(v) Approved work program revisions; and
(vi) Other pertinent supporting data.
(2) Additional information on reporting requirements for individual
RD&T studies is contained in subpart B of this part.
(c) The frequency of reports required by paragraph (b) of this
section shall be annual unless more frequent reporting is determined to
be necessary by the FHWA; but in no case will reports be required more
frequently than quarterly. These reports are due 90 days after the end
of the reporting period for annual and final reports and no later than
30 days after the end of the reporting period for other reports.
(d) Events that have significant impact on the work program(s)
shall be reported as soon as they become known. The type of events or
conditions that require reporting include: problems, delays, or adverse
conditions that will materially affect the ability to attain program
objectives. This disclosure shall be accompanied by a statement of the
action taken, or contemplated, and any Federal assistance needed to
resolve the situation.
(e) A provision of the Federal-Aid Project Agreement requires both
the preparation of suitable reports to document the results of
activities performed with FHWA planning and research funds and FHWA
approval prior to publishing such reports. The STA may request a waiver
of the requirement for prior approval. The FHWA's approval constitutes
acceptance of such reports as evidence of work performed but does not
imply endorsement of a report's findings or recommendations. Reports
prepared for FHWA funded work shall include appropriate credit
references and disclaimer statements.
(The information collection requirements in Secs. 420.117(b) and (c)
for metropolitan planning areas have been approved by the OMB and
assigned control number 2132-0529.)
Sec. 420.119 Fiscal procedures.
(a) SPR funds shall be administered and accounted for as a single
fund regardless of the category of Federal-aid highway funds from which
they are derived.
(b) PL funds shall be administered and accounted for as a single
fund.
(c) Optional funds authorized under 23 U.S.C. 104(b)(1), 104(b)(3),
and 157(c) used for eligible planning and RD&T purposes shall be
identified separately in the work program(s) and shall be administered
and accounted for separately for fiscal purposes. The statewide and, if
appropriate, metropolitan transportation improvement program provisions
of 23 CFR Part 450 must be met for the use of NHS, STP, or minimum
allocation funds for planning or RD&T purposes.
(d) The maximum rate of Federal participation with funds identified
in paragraphs (a) through (c) of this section shall be as prescribed in
title 23, U.S.C., for the specific class of funds; unless, for funds
identified under paragraph (a) or (b) of this section, the FHWA
determines that the interests of the Federal-aid highway program would
be best served without such match in accordance with 23 U.S.C.
307(c)(3) or 23 U.S.C. 104(f)(3). The FHWA also may waive the
requirement for matching funds if national or regional high priority
planning or RD&T problems can be more effectively addressed if several
States and/or MPOs pool their funds. Requests for 100 percent Federal
funding must be submitted to the FHWA Division Office for approval by
the Associate Administrator for Program Development (for planning
activities) or the Associate Administrator Research and Development
(for RD&T activities).
(e) The provisions of 49 CFR 18.24 are applicable to any necessary
matching of FHWA planning and research funds.
(f) Payment shall be made in accordance with the provisions of 49
CFR 18.21.
Sec. 420.121 Other requirements.
(a) The financial management systems of the STAs and their
subrecipients shall be in accordance with the provisions of 49 CFR
18.20(a).
(b) Program income, as defined in 49 CFR 18.25(b), shall be shown
and deducted to determine the net costs on which the FHWA share will be
based, unless an alternative method for using program income is
specified in the Federal-Aid Project Agreement.
(c) Audits shall be performed in accordance with 49 CFR 18.26 and
49 CFR Part 90.
(d) Acquisition, use, and disposition of equipment purchased by the
STAs and their subrecipients with FHWA planning and research funds
shall be in accordance with 49 CFR 18.32(b).
(e) Acquisition and disposition of supplies acquired by the STAs
and their subrecipients with FHWA planning and research funds shall be
in accordance with 49 CFR 18.33.
(f) In accordance with 49 CFR 18.34, STAs and their subrecipients
may copyright any books, publications, or other copyrightable materials
developed in the course of the FHWA planning and research funded
project. The FHWA reserves a royalty-free, nonexclusive and irrevocable
right to reproduce, publish, or otherwise use, and to authorize others
to use, the work for Government purposes.
(g) Procedures for the procurement of property and services with
FHWA planning and research funds by the STAs and their subrecipients
shall be in accordance with 49 CFR 18.36(a) and, if applicable,
18.36(t). The STAs and their subrecipients shall not use FHWA funds for
procurements from persons (as defined in 49 CFR 29.105) who have been
debarred or suspended in accordance with the provisions of 49 CFR Part
29, subparts A through E.
(h) The STAs shall follow State laws and procedures when awarding
and administering subgrants to MPOs and local governments and shall
ensure that the requirements of 49 CFR 18.37(a) have been satisfied.
STAs shall have primary responsibility for administering FHWA planning
and research funds passed through to subrecipients, for ensuring that
such funds are expended for eligible activities, and for ensuring that
the funds are administered in accordance with this part, 49 CFR Part
18, and applicable cost principles.
(i) Recordkeeping and retention requirements shall be in accordance
with 49 CFR 18.42.
(j) The STAs and their subrecipients are subject to the provisions
of 37 CFR Part 401 governing patents and inventions and shall include,
or incorporate by reference, the standard patent rights clause at 37
CFR 401.14, except for Sec. 401.14(g), in all subgrants or contracts.
In addition, STAs and their subrecipients shall include the following
clause, suitably modified to identify the parties, in all subgrants or
contracts, regardless of tier, for experimental, developmental or
research work: ``The subgrantee or contractor will retain all rights
provided for the State in this clause, and the State will not, as part
of the consideration for awarding the subgrant or contract, obtain
rights in the subgrantee's or contractor's subject inventions.''
(k) In accordance with the provisions of 49 CFR Part 29, subpart F,
STAs shall certify to the FHWA that they will provide a drug free
workplace. This requirement can be satisfied through the annual
certification for the Federal-aid highway program.
(l) The provisions of 49 CFR Part 20 regarding restrictions on
influencing certain Federal activities are applicable to all tiers of
recipients of FHWA planning and research funds.
(m) The nondiscrimination provisions of 23 CFR Parts 200 and 230
and 49 CFR Part 21, with respect to Title VI of the Civil Rights Act of
1964 and the Civil Rights Restoration Act of 1987, apply to all
programs and activities of recipients, subrecipients, and contractors
receiving FHWA planning and research funds whether or not those
programs or activities are federally funded.
(n) The STAs shall administer the transportation planning and RD&T
program(s) consistent with their overall efforts to implement section
1003(b) of the Intermodal Surface Transportation Efficiency Act of 1991
(Pub. L. 102-240, 105 Stat. 1914) and 49 CFR Part 23 regarding
disadvantaged business enterprises.
(o) States and their subrecipients shall administer subgrants to
universities, hospitals, and other non-profit organizations in
accordance with the administrative requirements of OMB Circular A-110
as implemented by the U.S. DOT in 49 CFR Part 19, Uniform
Administrative Requirements for Grants and Agreements with Institutions
of Higher Education, Hospitals, and Other Non-Profit Organizations.
(p) Reports and other documents prepared under FHWA planning and
research funded grants or subgrants awarded after August 22, 1994, must
be in metric units.
Subpart B--Research, Development and Technology Transfer Program
Management
Sec. 420.201 Purpose and applicability.
The purpose of this subpart is to implement the provisions of 23
U.S.C. 307 and to prescribe Federal assistance requirements for
research, development, and technology transfer (RD&T) activities,
programs, and studies undertaken by States with FHWA planning and
research funds. The requirements of this subpart and subpart A of this
part are applicable to work performed by the States and their
subrecipients with FHWA planning and research funds.
Sec. 420.203 Definitions.
Unless otherwise specified in this part, the definitions in 23
U.S.C. 101(a) and Part 420, subpart A, are applicable to this subpart.
As used in this subpart:
Applied research means the study of phenomena relating to a
specific known need in connection with the functional characteristics
of a system; the primary purpose of this kind of research is to answer
a question or solve a problem.
Basic research means the study of phenomena whose specific
application has not been identified; the primary purpose of this kind
of research is to increase knowledge.
Cooperatively funded study means an RD&T study or activity,
administered by the FHWA, a lead State, or other agency, that is funded
by some combination of a State's contribution of FHWA planning and
research funds, FHWA administrative contract funds, 100 percent State
funds, or funds from other Federal agencies.
Development means the translation of basic or applied research
results into prototype materials, devices, techniques, or procedures
for the practical solution of a specific problem in transportation.
Final report means a report documenting a completed RD&T study or
activity.
Intermodal RD&T means research, development, and technology
transfer activities involving more than one mode of transportation
including transfer facilities between modes.
National Cooperative Highway Research Program (NCHRP) means the
cooperative RD&T program directed toward solving problems of national
or regional significance identified by States and the FHWA, and
administered by the Transportation Research Board, National Academy of
Sciences.
Peer review means a review conducted by persons who are
knowledgeable of the management and operation of RD&T programs. This
may include but is not limited to representatives of another State, the
FHWA, American Association of State Highway and Transportation
Officials, Transportation Research Board (TRB), universities or the
private sector.
RD&T activity means a basic or applied research, development, or
technology transfer project or study.
Research means a systematic controlled inquiry involving analytical
and experimental activities which primarily seek to increase the
understanding of underlying phenomena. Research can be basic or
applied.
Technology transfer means those activities that lead to the
adoption of a new technique or product by users and involves
dissemination, demonstration, training, and other activities that lead
to eventual innovation.
Transportation Research Information Services (TRIS) means the TRB-
maintained computerized storage and retrieval system for abstracts of
ongoing and completed RD&T activities, including abstracts of RD&T
reports and articles.
Sec. 420.205 Policy.
(a) It is the FHWA's policy to administer the RD&T program
activities utilizing FHWA planning and research funds consistent with
the policy specified in Sec. 420.105 and the following general
principles in paragraphs (b) through (g) of this section.
(b) State transportation agencies shall provide information
necessary for peer reviews.
(c) States are encouraged to develop, establish, and implement an
RD&T program, funded with Federal and State resources, that anticipates
and addresses transportation concerns before they become critical
problems. To promote effective utilization of available resources,
States are encouraged to cooperate with other States, the FHWA, and
other appropriate agencies to achieve RD&T objectives established at
the national level and to develop a technology transfer program to
promote and use those results.
(d) States will be allowed the authority and flexibility to manage
and direct their RD&T activities as presented in their work programs,
and to initiate RD&T activities supported by FHWA planning and research
funds, subject to the limitation of Federal funds and to compliance
with program conditions set forth in subpart A of this part and
Sec. 420.207.
(e) States will have primary responsibility for managing RD&T
activities supported with FHWA planning and research funds carried out
by other State agencies and organizations and for ensuring that such
funds are expended for purposes consistent with this subpart.
(f) Each State shall develop, establish, and implement a management
process that ensures effective use of available FHWA planning and
research funds for RD&T activities on a statewide basis. Each State is
permitted to tailor its management process to meet State or local
needs; however, the process must comply with the minimum requirements
and conditions of this subpart.
(g) States are encouraged to make effective use of the FHWA
Division, Regional, and Headquarters office expertise in developing and
carrying out their RD&T activities. Participation of the FHWA on
advisory panels and in program review meetings is encouraged.
Sec. 420.207 Conditions for grant approval.
(a) As a condition for approval of FHWA planning and research funds
for RD&T activities, a State shall implement a program of RD&T
activities for planning, design, construction, and maintenance of
highways, public transportation, and intermodal transportation systems.
Not less than 25 percent of the State's apportioned SPR funds shall be
spent on such activities, unless waived by the FHWA, in accordance with
the provisions of Sec. 420.107. In addition the State shall develop,
establish, and implement a management process that identifies and
implements RD&T activities expected to address highest priority
transportation issues, and includes:
(1) An interactive process for identification and prioritization of
RD&T activities for inclusion in an RD&T work program;
(2) Utilization, to the maximum extent possible, of all FHWA
planning and research funds set aside for RD&T activities either
internally or for participation in national, regional pooled, or
cooperatively funded studies;
(3) Procedures for tracking program activities, schedules,
accomplishments, and fiscal commitments;
(4) Support and use of the TRIS database for program development,
reporting of active RD&T activities, and input of the final report
information;
(5) Procedures to determine the effectiveness of the State's
management process in implementing the RD&T program, to determine the
utilization of the State's RD&T outputs, and to facilitate peer reviews
of its RD&T Program on a periodic basis and;
(6) Procedures for documenting RD&T activities through the
preparation of final reports. As a minimum, the documentation shall
include the data collected, analyses performed, conclusions, and
recommendations. The State shall actively implement appropriate
research findings and should document benefits.
(b) Each State shall conduct peer reviews of its RD&T program and
should participate in the review of other States' programs on a
periodic basis. To assist peer reviewers in completing a quality and
performance effectiveness review, the State shall disclose to them
information and documentation required to be collected and maintained
under this subpart. Travel and other costs associated with peer reviews
of the State's program may be identified as a line item in the State
work program and will be eligible for 100 percent Federal funding. At
least two members of the peer review team shall be selected from the
FHWA list of qualified peer reviewers. The peer review team shall
provide a written report of its findings to the State. The State shall
forward a copy of the report to the FHWA Division Administrator with a
written response to the peer review findings.
(c) Documentation that describes the management process and the
procedures for selecting and implementing RD&T activities shall be
developed and maintained by the State. The documentation shall be
submitted by the State to the FHWA Division office for FHWA approval.
Significant changes in the management process also shall be submitted
by the State for FHWA approval. The State shall make the documentation
available, as necessary, to facilitate peer reviews.
Sec. 420.209 RD&T work program.
(a) The State's RD&T work program shall, as a minimum, consist of
an annual or biennial description of activities and individual RD&T
activities to be accomplished during the program period, estimated
costs for each eligible activity, and a description of any
cooperatively funded activities that are part of a national or regional
pooled study including the NCHRP contribution. The State's work program
should include a list of the major items with a cost estimate for each
item.
(b) The State's RD&T work program shall include financial summaries
showing the funding levels and share (Federal, State, and other
sources) for RD&T activities for the program year. States are
encouraged to include any activity funded 100 percent with State or
other funds.
(c) Approval and authorization procedures in Sec. 420.115 are
applicable to the State's RD&T work program.
Sec. 420.211 Eligibility of costs.
(a) Unless otherwise specified in this section, the eligible costs
for Federal participation in Sec. 420.113 are applicable to this part.
(b) Costs for implementation of RD&T activities in conformity with
the requirements and conditions set forth in this subpart are eligible
for Federal participation.
(c) Indirect costs of a State transportation agency RD&T unit are
allowable to the extent specified in Sec. 420.113(b).
(d) Indirect costs of other State agencies and organizations are
allowable if supported by a cost allocation plan and indirect cost
proposal in accordance with OMB requirements.
Sec. 420.213 Certification requirements.
(a) Each State shall certify to the FHWA Division Administrator
before June 30, 1995, that it is complying with the requirements of
this subpart. For those States unable to meet full compliance by June
30, 1995, the FHWA Division Administrator may grant conditional
approval of the State's RD&T management process. A conditional approval
shall cite those areas of the State's management process that are
deficient. All deficiencies must be corrected by January 1, 1996. A
copy of the certification shall be submitted with each work program. A
new certification will be required if the State significantly revises
its management process for the RD&T program.
(b) The certification shall consist of a statement signed by the
Administrator, or an official designated by the Administrator, of the
State transportation agency certifying as follows: I (name of
certifying official), (position title), of the State (Commonwealth) of
________, do hereby certify that the State (Commonwealth) is in
compliance with all requirements of 23 U.S.C. 307 and its implementing
regulations with respect to the research, development and technology
transfer program, and contemplate no changes in statutes, regulations,
or administrative procedures which would affect such compliance.
(c) The FHWA Division Administrator shall determine if the State is
in compliance with the requirements of this subpart.
Sec. 420.215 Procedure for withdrawal of approval.
(a) If a State is not complying with the requirements of this
subpart, or is not performing in accordance with its RD&T management
process, the FHWA Division Administrator shall issue a written notice
of proposed determination of noncompliance to the State. The notice
shall set forth the reasons for the proposed determination and inform
the State that it may reply in writing within 30 calendar days from the
date of the notice. The State's reply should address the deficiencies
cited in the notice and provide documentation as necessary.
(b) If the State and Division Administrator cannot resolve the
differences set forth in the determination of nonconformity, the State
may appeal to the Federal Highway Administrator.
(c) The Federal Highway Administrator's action shall constitute the
final decision of the FHWA.
(d) An adverse decision shall result in immediate withdrawal of
approval of FHWA planning and research funds for the State's RD&T
activities until the State is in full compliance.
PART 511--RESEARCH AND DEVELOPMENT (R&D) STUDIES AND PROGRAMS;
GENERAL [REMOVED]
3. Chapter I of title 23, CFR, is amended by removing and reserving
part 511.
[FR Doc. 94-17908 Filed 7-21-94; 8:45 am]
BILLING CODE 4910-22-P
