[Congressional Record Volume 169, Number 175 (Tuesday, October 24, 2023)]
[Senate]
[Pages S5136-S5138]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      GOVERNMENT ACCOUNTABILITY OFFICE LEGAL OPINION NO. B-335488

  Mr. CRUZ. Mr. President, I ask unanimous consent that the attached 
legal opinion of the Government Accountability Office, no. B-335488, 
titled ``U.S. Department of Transportation--Applicability of the 
Congressional Review Act to Notice of Funding Opportunity for the 
Department of Transportation's FY 2023-2024 Multimodal Project 
Discretionary Grant Opportunity,'' issued on October 18, 2023, be 
printed in the Congressional Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                Decision

     Matter of: U.S. Department of Transportation--Applicability 
         of the Congressional Review Act to Notice of Funding 
         Opportunity for the Department of Transportation's FY 
         2023-2024 Multimodal Project Discretionary Grant 
         Opportunity
     File: B-335488
     Date: October 18, 2023


                                 DIGEST

       On June 23, 2023, the U.S. Department of Transportation 
     (DOT) published a document titled Notice of Funding 
     Opportunity for the Department of Transportation's FY 2023-
     2024 Multimodal Project Discretionary Grant Opportunity 
     (MPDG) (Multimodal NOFO). DOT did not submit a report 
     pursuant to the Congressional Review Act (CRA) to Congress or 
     the Comptroller General on the Multimodal NOFO.
       CRA incorporates the Administrative Procedure Act's 
     definition of a rule and requires that before a rule can take 
     effect, an agency must submit the rule to both the House of 
     Representatives and the Senate, as well as to the Comptroller 
     General. The Multimodal NOFO announced the availability of 
     DOT funding for three discretionary grant programs: the 
     Nationally Significant Multimodal Freight and Highway 
     Projects program, the National Infrastructure Project 
     Assistance program, and the Rural Surface Transportation 
     program. DOT's stated purpose in the Multimodal NOFO was to 
     fund surface transportation infrastructure projects meeting 
     the criteria of these programs and aligning with DOT goals. 
     We conclude that the Multimodal NOFO meets CRA's definition 
     of a rule and no CRA exception applies. Therefore, the 
     Multimodal NOFO is subject to CRA's submission requirement.


                                DECISION

       On June 23, 2023, the U.S. Department of Transportation 
     (DOT) published a document titled Notice of Funding 
     Opportunity for the Department of Transportation's FY 2023-
     2024 Multimodal Project Discretionary Grant Opportunity 
     (MPDG) (Multimodal NOFO), available at https://
www.transportation.gov/qrants/multimodal-project-
discretionary-grant-notice-fundinq-opportunity (last visited 
     Sept. 19, 2023). We received a request for a decision as to 
     whether the Multimodal NOFO is a rule for purposes of the 
     Congressional Review Act (CRA). Letter from Senator Ted Cruz 
     to the Comptroller General (July 27, 2023). As discussed 
     below, we conclude that the Multimodal NOFO is a rule subject 
     to CRA's submission requirement.
       Our practice when rendering decisions is to contact the 
     relevant agencies to obtain their legal views on the subject 
     of the request. GAO, Procedures and Practices for Legal 
     Decisions and Opinions, GAO-06-1064SP (Washington, D.C.: 
     Sept. 2006), available at https://

[[Page S5137]]

     www.gao.gov/products/qao-06-1064sp. Accordingly, we reached 
     out to DOT to obtain the agency's legal views. Letter from 
     Assistant General Counsel, GAO, to Acting General Counsel, 
     DOT (Aug. 2, 2023). We received DOT's response on August 31, 
     2023. Letter from Acting General Counsel, DOT, to Assistant 
     General Counsel, GAO (Aug. 31, 2023) (Response Letter).


                               BACKGROUND

     The Multimodal NOFO
       The Infrastructure Investment and Jobs Act (IIJA), Pub. L. 
     No. 117-58, 135 Stat. 429 (Nov. 15, 2021), provided DOT with 
     funding for three grant programs--the Nationally Significant 
     Multimodal Freight and Highway Projects grants program, the 
     Rural Surface Transportation grant program, and the National 
     Infrastructure Project Assistance grants program. Id. 
     Sec. Sec. 11110 (Nationally Significant Multimodal Freight 
     and Highway Projects), 11132 (Rural Surface Transportation 
     Grant Program); id. Sec. 21201 (National Infrastructure 
     Project Assistance); see also Multimodal NOFO, at 5. A 
     general purpose of these grant programs, consistent with the 
     overall purpose of the IIJA, is to promote ``Federal-aid 
     highways, highway safety programs, and transit programs,'' 
     IIJA, preamble.\1\ Id. Sec. Sec. 11110, 11132, 21201. The 
     IIJA authorized appropriations for these three programs 
     through FY 2026. Multimodal NOFO, at 5.
       In the Multimodal NOFO, in order to ``streamline the 
     process for applicants'' for the FY 2023-2024 grant period, 
     DOT ``combined [its] solicitations'' for all three of the 
     above-referenced grant programs. Id. at 5. The Multimodal 
     NOFO ``encouraged [applicants] to apply for multiple 
     programs'' and indicated that DOT would automatically 
     consider applicants for each program ``unless they opt[ed] 
     out of a specific program.'' Id. at 6. As the Multimodal NOFO 
     explained, the three grant programs have ``slightly 
     different'' eligibility criteria, but applicants generally 
     may include states or groups of states, metropolitan planning 
     organizations, units of local government, political 
     subdivisions of states or local governments, and tribal 
     governments or groups of tribal governments. Id. at 10. The 
     Multimodal NOFO outlined the precise eligibility and 
     selection criteria for each program, as well as the types of 
     projects eligible to receive DOT funding under each one, Id. 
     at 10, 15. Overall, DOT stated that its purposes were to fund 
     ``surface transportation infrastructure projects . . . with 
     significant national or regional impact'' and ``to improve 
     and expand the surface transportation infrastructure in rural 
     areas.'' Id. at 1. DOT further stated that it sought to award 
     projects that ``align with the [National Roadway Safety 
     Strategy]'', ``reduce greenhouse gas emissions and . . . 
     address climate change impacts'', ``address environmental 
     justice'', ``address equity and barriers to opportunity'', 
     and ``support the creation of good-paying jobs'', among other 
     things. Id. at 6-7.
       As compared with a similar notice of funding opportunity 
     that DOT issued in FY 2022 for these grant programs, the 
     Multimodal NOFO used changed ``criteria'' to evaluate 
     applicants and make award decisions in certain respects. Id. 
     at 8.\2\ For example, the Multimodal NOFO ``revised how 
     [Outcome Area] criteria will be rated'' and indicated that 
     Rural Program applicants requesting less than $25 million 
     need only address a subset of these criteria. Id. The 
     Multimodal NOFO also indicated that ``[f]or the first time'' 
     DOT would be using ``a Cost Estimate Review team'' to 
     ``evaluate in greater detail the cost estimates for any 
     project requesting $1 billion or more in funding.'' Id. 
     Finally, the Multimodal NOFO stated that the ``list of 
     counties qualifying as Areas of Persistent Poverty'' had been 
     updated in accordance with new census data, and that the 
     definition of ``Historically Disadvantaged Communities'' had 
     been updated ``in accordance with the [White House's] Climate 
     & Economic Justice Screening Tool'', developed ``as part of 
     the Justice40 initiative.'' Id. The Multimodal NOFO indicated 
     that applicants planning to ``reapply using materials 
     prepared for prior competitions'' should ensure they are ``up 
     to date'' with DOT's revised criteria. Id. at 8-9.
       The Multimodal NOFO provided an application deadline of 
     August 21, 2023, and indicated that DOT would award 
     ``approximately $5.45-5.575 billion'' to the current 
     ``round'' of applicants ``from FY 2023 and FY 2024 funding.'' 
     Id. at 2
     The Congressional Review Act
       CRA, enacted in 1996 to strengthen congressional oversight 
     of agency rulemaking, requires federal agencies to submit a 
     report on each new rule to both houses of Congress and to the 
     Comptroller General for review before a rule can take effect. 
     5 U.S.C. Sec.  801 (a)(1)(A).\3\ The report must contain a 
     copy of the rule, ``a concise general statement relating 
     to the rule,'' and the rule's proposed effective date. Id. 
     CRA allows Congress to review and disapprove federal 
     agency rules for a period of 60 days using special 
     procedures. See 5 U.S.C. Sec.  802. If a resolution of 
     disapproval is enacted, then the new rule has no force or 
     effect. 5 U.S.C. Sec.  801(b)(1).
       CRA adopts the definition of rule under the Administrative 
     Procedure Act (APA), 5 U.S.C. Sec.  551 (4), which states 
     that a rule is ``the whole or a part of an agency statement 
     of general or particular applicability and future effect 
     designed to implement, interpret, or prescribe law or policy 
     or describing the organization, procedure, or practice 
     requirements of an agency.'' 5 U.S.C. Sec.  804(3). CRA 
     excludes three categories of rules from coverage: (1) rules 
     of particular applicability; (2) rules relating to agency 
     management or personnel; and (3) rules of agency 
     organization, procedure, or practice that do not 
     substantially affect the rights or obligations of non-agency 
     parties. Id.
       DOT did not submit a CRA report to Congress or the 
     Comptroller General on the Multimodal NOFO. In its response 
     to us, DOT asserted that CRA is inapplicable to the 
     Multimodal NOFO because the Multimodal NOFO is an ``exempt 
     procedural rule'' and ``not a final agency action.'' Response 
     Letter at 5-6.


                               DISCUSSION

       An agency action is subject to CRA if it meets the APA's 
     definition of a rule and no CRA exception applies. Because 
     the Multimodal NOFO meets the APA's definition of a rule, and 
     because no CRA exception applies, the Multimodal NOFO is 
     subject to CRA's submission requirement.
       The Multimodal NOFO meets the APA definition of a rule. It 
     is an agency statement, as it is an official document issued 
     by DOT and posted on the agency's website. Multimodal NOFO; 
     see also B-334146, June 5, 2023 (finding that a document 
     issued by the U.S. Department of Agriculture (USDA) and 
     posted on USDA website qualified as agency statement); B-
     331560, Apr. 16, 2020. Second, the Multimodal NOFO has future 
     effect, as its provisions apply to, and announce criteria 
     for, grantprogram applications submitted after its issuance 
     and before future deadlines. Multimodal NOFO, at 2; see also 
     B-334146 (finding that a USDA notice of funding opportunity 
     document had future effect); B-333732, July 28, 2022 (finding 
     that a USDA publication had future effect because it defined 
     criteria for determining future financial assistance 
     benefits). Finally, the Multimodal NOFO prescribes or 
     implements law or policy and describes agency procedures, as 
     it defines the procedures by which eligible entities may 
     apply for three grant programs, describes the process by 
     which DOT will evaluate these applications, and specifies the 
     level of funding that applicants may receive. Multimodal 
     NOFO, at 1-15; B-334146 (finding that a USDA notice of 
     funding opportunity implemented law or policy and described 
     agency procedures when it ``establish[ed] a new grant 
     program'' with ``eligibility requirements'', ``criteria used 
     to select proposals'', and ``funding level [s]''); see also 
     B-333732 (finding that USDA's announcement of a payment-in-
     kind program for sugar was a rule because it established 
     application procedures, payment limits, and sanctions for 
     future noncompliance with program requirements).
       Additionally, none of CRA's exceptions apply:
       First, the Multimodal NOFO is not a rule of particular 
     applicability. Rules of particular applicability are those 
     addressed to specific, identified entities that address 
     actions that may or may not be taken by those entities, in 
     light of the facts and circumstances specific to those 
     entities. B-334995, July 6, 2023; B-334411, June 5, 2023; B-
     334146; B-334221, Feb. 9, 2023. The Multimodal NOFO applies 
     broadly to states or groups of states, metropolitan planning 
     organizations, units of local government, political 
     subdivisions of states or local governments, and tribal 
     governments or groups of tribal governments, among other 
     entities. Multimodal NOFO, at 10. Thus, it has general, not 
     particular, applicability. See B-334146 (USDA notice of 
     funding opportunity had general applicability because it was 
     addressed to ``local and state governments, small and large 
     businesses, and nonprofit entities.''); see also B-334221; B-
     330843, Oct. 22, 2019.
       Second, the Multimodal NOFO is not a rule relating to 
     agency management or personnel. ``A rule falls within the CRA 
     exception for rules relating to agency management or 
     personnel if it relates to purely internal agency matters, 
     with no effect on non-agency parties.'' B-334411; B-334146; 
     B-334221. Here, the Multimodal NOFO relates primarily to non-
     agency parties. As explained above, it specifies the means by 
     which a wide variety of non-agency parties may apply for 
     funding pursuant to three DOT grant programs, as well as 
     specifying the selection criteria and funding levels for 
     those programs for FY 2023-2024. Multimodal NOFO, at 1-15. 
     Thus, it does not relate to agency management or personnel. 
     B-334146 (finding that USDA notice of funding opportunities 
     that ``establish[ed] a grant program for a wide array of non-
     federal entities'' did not relate to agency management).
       Third, and finally, the Multimodal NOFO has a substantial 
     impact on the rights and obligations of non-agency parties. 
     GAO has previously found that notice of funding opportunity 
     documents associated with agency grant programs can have a 
     substantial impact on non-agency parties. Most recently, we 
     found that a USDA notice of funding opportunity document 
     substantially affected the rights and obligations of non-
     agency parties by implementing a new grant program for 
     nonfederal entities and establishing the program's 
     eligibility requirements, selection criteria, and funding 
     ranges. B-334146. As we explained, a notice that 
     ``determine[s] whether and in what amount [non-agency] 
     entit[ies] may receive funding . . . substantially affects 
     the rights or obligations of those non-agency parties.'' Id. 
     Similarly, we have found that agency rules amending or 
     clarifying the requirements of financial assistance programs 
     for non-agency parties substantially affected those parties'' 
     rights

[[Page S5138]]

     and obligations. In B-333732, for instance, we concluded that 
     USDA's 2021 Thrifty Food Plan substantially affected non-
     agency parties because it increased the maximum benefit 
     allotments for qualifying families under the Supplemental 
     Nutrition Assistance Program (SNAP).
       Here, by reference to the above cases, the Multimodal NOFO 
     has substantial effects on the rights and obligations of non-
     agency parties. While the Multimodal NOFO does not, itself, 
     establish a new grant program like the USDA notice in B-
     334146, it defines the FY 2023-2024 eligibility requirements, 
     selection criteria, and funding ranges for three existing DOT 
     grant programs. Multimodal NOFO, at 4-5. Each of these 
     programs offers potential DOT funding to a wide range of non-
     agency parties, as discussed above, which makes DOT's actions 
     in the Multimodal NOFO comparable to USDA's actions in B-
     334146 and B-333732. In the present case, as in B-334146 and 
     B-333732, the agency's actions ``determine[d] whether and in 
     what amount [a non-agency] entity may receive funding'', 
     which ?substantially affects the rights or obligations of 
     those non-agency parties.'' B-334146.
       In its response to us, DOT asserts that the Multimodal NOFO 
     is an ``exempt procedural rule.'' DOT relies upon four prior 
     GAO decisions: B-330190, Dec. 19, 2018, B-329926, Sept. 10, 
     2018, B-329916, May 17, 2018, and B-292045, May 19, 2003. 
     Response Letter, at 5.\4\ Each of these decisions is 
     distinguishable, however, because they involved changes to 
     agencies''internal conduct with only indirect and 
     insubstantial effects on the rights and obligations of non-
     agency parties. See B-330190 (finding CRA inapplicable to 
     agency memorandum that ``outline[d] the agency's internal 
     procedure for addressing violations of 8 U.S.C. 51325(a)''); 
     B-329926 (finding CRA inapplicable to agency manual governing 
     ``the use of evidence from the Internet'' by agency officials 
     during adjudicatory proceedings); B-329916 (finding CRA 
     inapplicable to Internal Revenue Service action that ``shifts 
     the timing of a step in the agency's process'' for reviewing 
     tax returns); B-292045 (finding CRA inapplicable to a 
     Department of Veterans Affairs (VA) memorandum announcing a 
     change in VA's procedures for disposal of real property 
     because it ``relat[ed] to agency management'' and did not 
     ``affect any party's right or obligation''). None of these 
     actions was directed at non-agency parties or concerned, like 
     the Multimodal NOFO and the agency actions in B-334146 and B-
     333732, with specifying the terms and conditions for non-
     agency parties to apply to receive federal funds. B-330190; 
     B-329926; B-329916; B-292045.
       Relatedly, DOT relies on Batterton v. Marshall, 648 F.2d 
     694 (D.C. Cir. 1980) to distinguish ``legislative'' from 
     ``procedural'' rules and urge that rules ``may alter the 
     manner in which the parties present themselves or their 
     viewpoints to the agency'' without affecting rights or 
     interests. Response Letter, at 4 (citation omitted). However, 
     Batterton concerned the distinction between ``legislative'' 
     and other rules for purposes of applying APA notice-and-
     comment requirements. See Batterton, 648 F. 2d at 707. As the 
     legislative history of CRA makes clear, a rule may be 
     nonlegislative and exempt from APA notice-and-comment 
     requirements while still being subject to CRA's submission 
     requirements. A principal sponsor of the CRA legislation 
     stated that:
       Although agency interpretive rules, general statements of 
     policy, guideline documents, and agency policy and procedure 
     manuals may not be subject to the notice and comment 
     provisions of section 553(c) of title 5, United States Code, 
     these types of documents are covered under the congressional 
     review [CRA] provisions of the new chapter 8 of title 5.
       142 Cong. Rec. H3005 (daily ed. Mar 28, 1996) (Statement of 
     Rep. McIntosh); see also B-331171, Dec. 17, 2020 (``The 
     sponsors of CRA intended the definition of rule to be as 
     broad as possible to ensure congressional review of agency 
     action.''). Here, as discussed above, the Multimodal NOFO 
     does more than just alter the manner in which certain parties 
     present themselves to DOT, it determines whether and in what 
     amount non-agency entities may receive funding from the 
     federal government.
       DOT also asserts that the Multimodal NOFO's ``requirements 
     for eligible applicants, cost sharing requirements, eligible 
     project types, and eligible project costs'' did not originate 
     with the Multimodal NOFO but come directly from the 
     ``detailed statutory authorit[ies]'' governing DOT's grant 
     programs. Response Letter, at 4. In other words, according to 
     DOT, ``any rights and obligations'' at issue in this matter 
     ``are prescribed by existing laws,'' not by the Multimodal 
     NOFO. Id. We acknowledge that the statutes governing DOT's 
     grant programs are detailed in many respects and establish 
     eligibility and other criteria outlined in the Multimodal 
     NOFO. However, it is not the case that the Multimodal NOFO 
     did nothing more than echo terms and conditions already set 
     forth in DOT's program statutes. Those statutes left DOT with 
     clear discretion and gap-filling authority in many respects. 
     For example, the statute governing the National 
     Infrastructure Project Assistance program states that 
     applications shall be submitted ``at such time, in such 
     manner, and containing such information as [DOT] determines 
     to be appropriate.'' 49 U.S.C. Sec.  6701 (c). It also 
     instructs DOT to ``determin[e]'' whether a given project 
     applying for grant funds ``is in need of significant Federal 
     funding'' and ``will be cost-effective,'' among other things. 
     Id Sec.  6701 (f). In the Multimodal NOFO, DOT exercised its 
     discretion to elaborate upon these statutory terms by 
     defining the ``time'' and ``manner'' in which applications 
     must be submitted and specifying detailed ``information'' 
     requirements, See, e.g., Multimodal NOFO, at 1-3 (stating 
     deadlines and ``anticipated'' funding amounts not set forth 
     in DOT's program statutes). With respect to the issue of 
     whether projects will be ``cost-effective,'' for example, the 
     Multimodal NOFO outlines a ``recommended approach for the 
     completion and submission of a benefit-cost analysis (BCA) 
     narrative and calculation file,'' as well as encouraging 
     applicants to ``review DOT's detailed guidance'' cited in the 
     Multimodal NOFO. Id. at 42. By providing detailed 
     instructions in this and other respects, the Multimodal NOFO 
     affected ``whether and in what amount [non-agency] entit[ies] 
     may receive funding'', which, once again, ``substantially 
     affects the[ir] rights or obligations.'' B-334146.
       Finally, DOT asserts that the Multimodal NOFO is ``not a 
     final agency action'' and is ``exempt'' from CRA because no 
     applicant is ``obligated to apply for'' or ``entitled to 
     receive''the advertised funding, and because DOT has yet to 
     make the ``final project selections'' that may result in 
     grant awards. Response Letter, at 6 (citation omitted). 
     However, DOT did not distinguish the funding notice in B-
     334146, which, like the Multimodal NOFO, was discretionary 
     and left final award decisions contingent upon further action 
     by USDA. See, e.g.. USDA, Partnerships for Climate-Smart 
     Commodities, USDA-NRCS-COMM-22-NOF00001 139, available at 
     https://www.grants.gov/web/grants/view-
opportunity.html?oppld=337878 (last visited Sept. 19, 2023) 
     (outlining an opportunity for ``[d]iscretionary'' grants). A 
     grant notice need not announce mandatory funding or make 
     final award decisions in order to have a substantial effect 
     on the rights and obligations of non-agency parties. B-
     334146. Rather, as we have explained, an agency action may be 
     ``non-binding'' and contemplate ``further action'' without 
     therefore becoming ``eligible for CRA's procedural 
     exception.'' B-334032.2, Apr. 5, 2023 (``CRA's requirements 
     are applicable to general statements of policy that lack 
     legally binding effects.'') (citation omitted). Here, DOT's 
     announcement of criteria that ``determine[d] whether and in 
     what amount [a non-agency] entity may receive funding'' is 
     sufficient to make the Multimodal NOFO ineligible for that 
     exception. See B-334146.


                               CONCLUSION

       The Multimodal NOFO is a rule under CRA because it meets 
     the APA's definition of a rule and no CRA exception applies. 
     Therefore, the Multimodal NOFO is subject to CRA's 
     requirement that it be submitted to Congress before it can 
     take effect.
       (Signed) Edda Emmanuelli Perez, General Counsel.


                                ENDNOTES

       1. Under the general rubric of improving highways, highway-
     safety, and transit programs, each program focuses on 
     particular types of improvement projects, in line with their 
     titles and corresponding IIJA provisions. Two of these 
     programs--the Rural Surface Transportation grant program and 
     the National infrastructure Project Assistance grants 
     program--originated with the LLJA. LLJA Sec. Sec.  11110, 
     11132; id Sec.  21201.
       2. DOT previously announced and awarded funding for the FY 
     2022-2023 period via a publication titled Notice of Funding 
     Opportunity for the Department of Transportation's Project 
     Discretionary Grant Opportunity, 87 Fed., Reg. 17108 (Mar. 
     25, 2022).
       3. Alternatively, an agency can find for good cause that 
     notice and public procedure are impracticable, unnecessary, 
     or contrary to the public interest, and the rule will then 
     take effect at a time the agency determines. 5 U.S.C. Sec.  
     808(2).
       4. Additionally, DOT urges that the Multimodal NOFO is 
     distinguishable from the grant notices in B-33416 because 
     USDA in that case exercised ``general statutory authority'' 
     to ``accomplish certain enumerated statutory ends.'' Response 
     Letter, at 5. However, GAO's determination that the notice of 
     funding opportunities at issue in B-334146 did not qualify 
     for the CRA's third exception was based on the effects of 
     USDA's actions on non-agency parties, as discussed above, not 
     on the general or specific nature of USDA's statutory 
     authority.

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