Document ID: DOT-OST-2009-0092-0187
Agency: dot
Document Type: Rule
Title: Grants and Cooperative Agreements to State and Local Governments: Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals and Other Non-Profit Organizations
Posted Date: 2011-10-05T04:00Z

[Federal Register Volume 76, Number 193 (Wednesday, October 5, 2011)]
[Rules and Regulations]
[Pages 61597-61599]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-25416]

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 DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Parts 18 and 19

RIN 2105-AD60

Grants and Cooperative Agreements to State and Local Governments: 
DOT Amendments on Regulations on Uniform Administrative Requirements 
for Grants and Agreements With Institutions of Higher Education, 
Hospitals and Other Non-Profit Organizations

AGENCY: Department of Transportation (DOT), Office of the Secretary 
(OST).

ACTION: Final rule.

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SUMMARY: The Department of Transportation (DOT) is adopting a public 
proposal on Grants and Cooperative Agreements to State and Local 
Governments; Grants and Agreements with Institutions of Higher 
Education, Hospitals and Other Non-Profit Organizations. The rule 
amends Department of Transportation regulations on uniform 
administrative requirements for grants and agreements with Institutions 
of Higher Education, Hospitals and other Non-profit Organizations. 
Specifically, the DOT is making requirements for these grants and 
agreements consistent with the uniform administrative requirements for 
grants and cooperative agreements to State and Local governments. In 
addition, this rule updates references to applicable cost principles 
for grants and cooperative agreements with State and Local Governments 
that appear in current Department of Transportation regulations.

DATES: This rule is effective November 4, 2011.

FOR FURTHER INFORMATION CONTACT: Ellen Shields, Office of the Senior 
Procurement Executive, Office of Administration (M-61), (202) 366- 
4268, 1200 New Jersey Avenue, SE., Washington, DC 20590-0001. Office 
hours are from 7:45 a.m. to 4:15 p.m. e.t., Monday through Friday, 
except Federal holidays.

Background

    Regulations governing two types of U.S. Department of 
Transportation grant and cooperative agreements recipients are found in 
Parts 18 and 19 of Title 49 of the Code of Federal Regulations:
    1. 49 CFR part 18: Uniform Administrative Requirements for Grants 
and Cooperative Agreements to State and Local Governments.
    2. 49 CFR part 19: Uniform Administrative Requirements for Grants 
and Agreements with Institutions of Higher Education, Hospitals, and 
Other Non-Profit Organizations.
    Both of these parts contain a provision that governs allowable 
costs. However, 49 CFR 18.22 imposes specific limitations on the use of 
grant funds while 49 CFR 19.27 merely lists cost principles applicable 
to each kind of grant and agreement recipient. Specifically, under 49 
CFR 18.22(a), grant funds may only be used for:
    (1) The allowable costs of the grantees, subgrantees and cost-type 
contractors, including allowable costs in the form of payments to 
fixed-price contractors; and
    (2) Reasonable fees or profit to cost-type contractors but not any 
fee or profit (or other increment above allowable costs) to the grantee 
or subgrantee.
    Public comments on this matter were solicited in a Federal Register 
notice dated May 2, 2008. Only one comment was received, from Robert 
Taylor, regarding the Office of Management and Budget (OMB) cost 
principle circulars as well as revisions prohibiting the payment of 
profit or fee to grantees and subgrantee covered by 49 CFR part 19. 
This comment did not pertain to the content of the proposed rule. 
Therefore, we are adopting the proposed rule without change.
    This rule imposes the same limitation on the use of funds used for 
Grants and Agreements with Institutions of Higher Education, Hospitals, 
and Other Non-Profit Organizations as there are on the use of funds 
used for Uniform Administrative Requirements for Grants and Cooperative 
Agreements to State and Local Governments.
    In addition, this rule updates references to applicable cost 
principles for grants and cooperative agreements with State and Local 
Governments that appear in 49 CFR 18.22(b) and include comparable 
updates references in 49 CFR 19.27(b). These updated references are 
necessary in light of the establishment of title 2 of the Code of 
Federal Regulations in 2004. Subtitle A of title 2 of the Code of 
Federal Regulations consists of government-wide guidance from the 
Office of Management and Budget (OMB) to Federal agencies for grants 
and other financial assistance and nonprocurement agreements that 
previously had been contained in seven separate OMB circulars and other 
OMB policy documents. Currently, 49 CFR 18.22(b) references three 
specific OMB circulars that are now codified in several Parts in 
chapter II, subtitle A of title 2 of the Code of Federal Regulations. 
This rule amends 49 CFR 18.22(b) by replacing the citations to these 
former OMB circulars with the appropriate references in title 2 of the 
Code of Federal Regulations and would reflect these same changes in 49 
CFR 19.27(b).
    The rule also makes minor referencing revisions to the Office of 
Management and Budget (OMB) cost principle circulars and, consistent 
with OMB materials, revises prohibitions on payment of profit or fee to 
grantees and subgrantees covered by 49 CFR part 19. The revised 
referencing is needed as the OMB cost circulars have been published in 
Title II of the Code of Federal Regulations since August 2005. However, 
these OMB circulars are only published as guidance (see 2 CFR 
1.105(a)). Also, the OMB circular number has been retained in the title 
of each circular, for example, 2 CFR part 225, Cost Principles for 
State and Local Governments (OMB Circular A-87).
    The title for the CFR part 19, which includes the OMB Circular 
number in the title, is included in the reference for all three cost 
principles. In addition, this makes the formatting of all titles in 49 
CFR sections 18.22 and 18.27 consistent.

Rulemaking Analyses and Notices

Executive Order 12866 (Regulatory Planning and Review) and DOT 
Regulatory Policies and Procedures

    The DOT has determined that this document does not constitute a 
significant rule within the meaning of Executive Order 12866 or within 
the meaning of Department of Transportation regulatory policies and 
procedures. DOT anticipates that the

[[Page 61598]]

economic impact of this rule will be minimal because the effect of the 
rule is simply to make similar provisions consistent with each other. 
These changes do not adversely affect, in a material way, any sector of 
the economy. In addition, the change does not interfere with any action 
taken or planned by another agency and does not materially alter the 
budgetary impact of any entitlements, grants, user fees, or loan 
programs. Consequently, a full regulatory evaluation is not required.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 
5 U.S.C. 60l-612) the Department has evaluated the effects of this 
proposed action on small entities. This ruledoes not have any economic 
effects, let alone significant effects, on anyone. This rulemaking 
establishes the same limitation on the use of funds for both Grants and 
Agreements with Institutions of Higher Education, Hospitals, and Other 
Non-Profit Organizations and Uniform Administrative Requirements for 
Grants and Cooperative Agreements to State and Local Governments. The 
amendment does not change or limit the potential eligibility of any 
small entity. For these reasons, the DOT certifies that this action 
would not have a significant economic impact on a substantial number of 
small entities.

Unfunded Mandates Reform Act of 1995

    This rule does not impose unfunded mandates as defined by the 
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, March 22, 1995, 
109 Stat. 48). Indeed, it does not impose any mandates. This rule will 
not result in the expenditure by State, local, and tribal governments, 
in the aggregate, or by the private sector, of $100 million or more in 
any one year (2 U.S.C. 1532).

Executive Order 13132 (Federalism Assessment)

    This rule has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13132, and the DOT has determined 
that this rule does not have sufficient federalism implications to 
warrant the preparation of a Federalism assessment. The DOT has also 
determined that this rule does not preempt any State law or State 
regulation or affect the States' ability to discharge traditional State 
governmental functions.

Executive Order 12372 (Intergovernmental Review)

    Catalog of Federal Domestic Assistance Program Number [Insert 
number], [Insert Program Name]. The regulations implementing Executive 
Order 12372 regarding intergovernmental consultation on Federal 
programs and activities [apply/do not apply] to this program.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501, et 
seq.), Federal agencies must obtain approval from the Office of 
Management and Budget (OMB) for each collection of information they 
conduct, sponsor, or require through regulations. The DOT has 
determined that this rule does not contain collection of information 
requirements for the purposes of the PRA.

National Environmental Policy Act

    The agency has analyzed this rule for the purpose of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321) and has determined 
that this rule does not have any effect on the quality of the 
environment.

List of Subjects in 49 CFR Parts 18 and 29

    Administrative practice and procedure, Grant programs, Allowable 
costs, Cooperative agreements.

    Issued this 21st day of September 2011, at Washington, DC.
Ray LaHood,
Secretary of Transportation.

    In consideration of the foregoing, the DOT amends, title 49, Code 
of Federal Regulations, Parts 18 and 19, as set forth below:

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

0
1. The authority citation for 49 CFR part 18 continues to read as 
follows.

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

0
2. In Sec.  18.22, revise the table in paragraph (b) to read as 
follows:

Sec.  18.22  Allowable costs.

* * * * *
    (b) * * *

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           For the costs of a                Use the principles in--
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State, local or federal-recognized       2 CFR part 225.
 Indian tribal government.
Private nonprofit organization other     2 CFR part 230.
 than an (1) Institution of higher
 education, (2) hospital, or (3)
 organization named in 2 CFR part 230,
 Appendix C, as not subject to that
 part.
Institutions of Higher Education.......  2 CFR part 220.
For-profit organizations other than a    48 CFR part 31. Contract Cost
 hospital, commercial organization or a   Principles and Procedures, or
 non-profit organization listed in 2      uniform cost accounting
 CFR part 230, Appendix C, as not         standards that comply with
 subject to that part.                    cost principles acceptable to
                                          the Federal agency.
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PART 19--UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND 
AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND 
OTHER NON-PROFIT ORGANIZATIONS

0
3. The authority citation for 49 CFR part 19 continues to read as 
follows:

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

0
4. Revise Sec.  19.27 to read as follows:

Sec.  19.27  Allowable Costs.

    (a) Limitation on use of funds. Grant funds may be used only for:
    (1) The allowable costs of the grantees, subgrantees and cost-type 
contractors, including allowable costs in the form of payments to 
fixed-price contractors; and
    (2) Reasonable fees or profit to cost-type contractors but not any 
fee or profit (or other increment above allowable costs) to the grantee 
or subgrantee.
    (b) Applicable cost principles. For each kind of recipient, there 
is a set of Federal principles for determining allowable costs. 
Allowability of costs shall be determined according to the cost 
principles applicable to the entity organization incurring the costs. 
The following chart lists the kinds of organization and the applicable 
cost principles:

[[Page 61599]]

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           For the costs of a                Use the principles in--
------------------------------------------------------------------------
State, local or federal-recognized       2 CFR part 225.
 Indian tribal government.
Private nonprofit organization other     2 CFR part 230.
 than an (1) Institution of higher
 education, (2) hospital, or (3)
 organization named in 2 CFR part 230,
 Appendix C, as not subject to that
 circular.
Institutions of Higher Education.......  2 CFR part 220.
Hospitals..............................  45 CFR part 74, Appendix E,
                                          ``Principles for Determining
                                          Costs Applicable to Research
                                          and Development under Grants
                                          and Contracts with
                                          Hospitals.''
For-profit organizations other than a    48 CFR part 31. Contract Cost
 hospital, commercial organization or a   Principles and Procedures, or
 non-profit organization listed in 2      uniform cost accounting
 CFR part 230, Appendix C, as not         standards that comply with
 subject to that part.                    cost principles acceptable to
                                          the Federal agency.
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[FR Doc. 2011-25416 Filed 10-4-11; 8:45 am]
BILLING CODE 4910-9X-P