[Federal Register Volume 65, Number 221 (Wednesday, November 15, 2000)]
[Proposed Rules]
[Pages 68969-68971]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-29111]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Parts 74 and 92


Uniform Administrative Requirements for Awards and Subawards to 
Institutions of Higher Education, Hospitals, Other Nonprofit 
Organizations, and Commercial Organizations; and Certain Grants and 
Agreements With States, Local Governments and Indian Tribal Governments 
and Uniform Administrative Requirements for Grants and Cooperative 
Agreements to State and Local Governments

AGENCY: Department of Health and Human Services (HHS).

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The Department of Health and Human Services proposes to revise 
its grants management regulations in order to bring the entitlement 
grant programs it administers under the same regulations that already 
apply to non-entitlement programs for grants and cooperative agreements 
to State, local, and tribal governments.

DATES: Comments must be submitted by January 16, 2001.

ADDRESSES: Comments must be in writing and should be mailed or faxed to 
Charles Gale, Director, Office of Grants Management, HHS, Room 517-D, 
200 Independence Avenue SW, Washington, D.C. 20201; Fax (202) 690-6902. 
Written comments may be inspected at the identified address during 
agency business hours from 9:30 am to 5:30 p.m., Monday through Friday, 
Federal Holidays excepted.

FOR FURTHER INFORMATION CONTACT: Charles Gale, Director, Office of 
Grants Management at the above address; (202) 690-6377. For the hearing 
impaired only: TDD (202) 690-6415. These are not toll-free numbers.

SUPPLEMENTARY INFORMATION:

Background and Purpose

    On March 11, 1988, HHS joined other Federal agencies in publishing 
a final grants management ``common rule'' which provides a uniform 
system for the administration of grants and cooperative agreements, and 
by subawards thereunder, to State, local, and tribal governments. Prior 
to that date, administrative requirements for awards and subawards 
under all HHS programs were codified under 45 CFR Part 74. HHS 
implemented the Common Rule at 45 CFR Part 92. At the time, entitlement 
grant programs of the Social Security Act (the Act) administered by HHS 
and the Department of Agriculture were excepted from the common rule, 
because it was believed that the States operated entitlement programs 
differently than non-entitlement programs. Therefore, Subpart E was 
reserved in the rule to subsequently address provisions specific to 
entitlement programs. Pending the publication of Subpart E to Part 92, 
the HHS entitlement programs have remained under Part 74. As cited in 
45 CFR 92.4, these programs included:
    (1) Aid to Needy Families with Dependent Children (Title IV-A of 
the

[[Page 68970]]

Act, not including the Work Incentive Program (WIN) authorized by 
section 402(a)19(G));
    (2) Child Support Enforcement and Establishment of Paternity (Title 
IV-D of the Act);
    (3) Foster Care and Adoption Assistance (Title IV-E of the Act);
    (4) Aid to the Aged, Blind, and Disabled (Titles I, X, XIV, and 
XVI-AABD of the Act);
    (5) Medical Assistance (Medicaid) (Title XIX of the Act) not 
including the State Medicaid Fraud Control program authorized by 
section 1903(a)(6)(B); and
    (6) Certain grant funds awarded under subsection 412(e) of the 
Immigration and Nationality Act and subsection 501(a) of the Refugee 
Education Assistance Act of 1980.
    Experimental, pilot, or demonstrations involving the above programs 
also remained under Part 74.
    Although it was initially believed that States operated entitlement 
programs differently than non-entitlement programs, over the years we 
have found that belief to be untrue. Based upon our experience, we 
believe that States operate entitlement grant programs like non-
entitlement programs. Furthermore, HHS and USDA consulted with State 
officials and their staffs and found that they applied the same 
fundamental administrative rules to both entitlement and non-
entitlement programs. Since the States are currently applying the 
substance of the common rule requirements to their entitlement 
programs, HHS and USDA plan to synchronize the administrative 
requirements for all entitlement grant programs by bringing them under 
the common rule. USDA issued a final rule which applies its Uniform 
Administrative Requirements for Grants and Cooperative Agreements to 
State and Local Governments to its entitlement grant programs. 65 Fed. 
Reg. 49474 (August 14, 2000). By way of this proposed rule, HHS is 
likewise proceeding with application of the common rule to its 
entitlement grant programs.
    This proposed rule would expand the scope of 45 CFR Part 92 to 
include the entitlement grant programs cited above and remove such 
programs from the scope of Part 74. Therefore, both entitlement and 
non-entitlement awards to State, local, and tribal governments will be 
under the same administrative rules. This will enable State, local, and 
tribal grantees and other affected parties, such as auditors, to use 
the same administrative rules for the vast majority of their Federal 
programs. This action will also reduce unnecessary confusion and 
inefficiency in program administration.
    There are technical distinctions between Part 74 and Part 92, e.g., 
wording and format. Also, while the substance of the cost principles 
and audit requirements remains the same, there are differences in 
wording and organization. While the wording and organization are 
different, we believe there are no significant differences in the 
meaning of these standard administrative provisions. With respect to 
program income, for example, while Part 92 provides more specific 
information and Part 74 is different with respect to research grants, 
there is no practical difference in the way States will treat program 
income earned under the entitlement programs. That is, unless 
instructed otherwise by the HHS awarding agency or superseded by other 
legislative requirements, States will use the deduction alternative. 
Similarly, with respect to termination for convenience, while Part 92 
covers the subject as a separate section, the requirements in Part 74 
provide for essentially the same treatment in such cases. That is, 
termination for convenience may occur upon mutual consent between the 
HHS awarding agency and the grantee or upon written notification on the 
part of the grantee under certain conditions. We invite comment on the 
effect of these examples and any other differences detected. 
Additionally, HHS has decided to apply the rule prospectively to grants 
awarded after the effective date of the rule. We welcome questions 
regarding the application of the rule to specific types of entitlement 
grant programs.
    In publishing this proposed rule, HHS solicits comments on applying 
the provisions of Part 92 to HHS entitlement program awards and 
subawards to State, local, and tribal governmental organizations. This 
proposed rule will not affect HHS non-entitlement grant programs. As 
noted above, Part 92 has covered grants and subgrants to State, local, 
and tribal governments relating to non-entitlement grant programs since 
its publication. HHS also solicits comments regarding whether certain 
provisions of the common rule should not be applied to entitlement 
grant programs but whether, instead, certain provisions of 45 CFR Part 
74 should remain applicable.

Regulatory Impact Analysis

Executive Order 12866

    In accordance with the provisions of Executive Order 12866, the 
Office of Management and Budget did not review this rule because it is 
not a significant regulatory action as defined in Executive Order 
12866.

Regulatory Flexibility Act

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 
605(b)), the Secretary has reviewed this proposed rule before 
publication and, by approving it, certifies that it will not have a 
significant impact on a substantial number of small entities. The 
proposed rule does not affect the amount of funds provided in the 
covered programs but, instead, modifies and updates the administrative 
and procedural requirements.

Unfunded Mandates Reform Act

    The Department has determined that this proposed rule is not a 
significant regulatory action within the meaning of the Unfunded 
Mandates Reform Act of 1995, 2 U.S.C. 1501, et seq., because it will 
not result in State, local, or tribal government expenditures of $100 
million or more.

Paperwork Reduction Act of 1995

    The reporting and recordkeeping requirements of this rule are the 
same as those required by OMB Circulars A-102 and A-110 and have 
already been cleared by OMB. Therefore, HHS believes this rule will not 
impose additional information collection requirements on grantees and 
subgrantees.

List of Subjects

45 CFR Part 74

    Accounting, Administrative practice and procedure, Colleges and 
universities, Grant programs, Hospitals, Indians, Intergovernmental 
relations, Nonprofit organizations, and Reporting and recordkeeping 
requirements.

45 CFR Part 92

    Accounting, Grant programs, Indians, Intergovernmental relations, 
Reporting and recordkeeping requirements.
(Catalog of Federal Domestic Assistance number does not apply.)

    Dated: November 2, 2000.
Donna E. Shalala,
Secretary.
    Accordingly, for the reasons set forth above it is proposed that 
Title 45 of the Code of Federal Regulations be amended as follows:

[[Page 68971]]

PART 74--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR AWARDS AND 
SUBAWARDS TO INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, OTHER 
NONPROFIT ORGANIZATIONS, AND COMMERCIAL ORGANIZATIONS

    1. The heading of part 74 is revised to read as set forth above.
    2. The authority citation for Part 74 is revised to read as 
follows:

    Authority: 5 U.S.C. 301; OMB Circular A-110 (58 FR 62992, 
November 29, 1993), as amended (64 FR 54926, October 8, 1999).
    3. In 74.1 remove paragraph (a)(3).

PART 92--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND 
COOPERATIVE AGREEMENTS TO STATE, LOCAL, AND TRIBAL GOVERNMENTS

    1. The authority citation for part 92 would continue to read as 
follows:

    Authority: 5 U.S.C. 301.
    2. In 92.4 remove paragraphs (a)(3), (7) and (8) and redesignate 
paragraphs (a)(4) through (10) as (a)(3) through (7) and remove and 
reserve paragraph (b).
    3. Remove Subpart E, Entitlement.

[FR Doc. 00-29111 Filed 11-14-00; 8:45 am]
BILLING CODE 4150-04-U