[Federal Register Volume 60, Number 33 (Friday, February 17, 1995)]
[Proposed Rules]
[Pages 9306-9309]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4029]



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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration

23 CFR Part 630

[FHWA Docket No. 94-30]
RIN 2125-AD40


Federal-Aid Project Authorization

AGENCY: Federal Highway Administration (FHWA), DOT.
ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FHWA proposes to amend its regulation on Federal-aid 
program approval and project authorization. In light of changes made by 
the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) in 
the area of statewide planning, and the joint FHWA/Federal Transit 
Administration (FTA) regulations implementing those changes, this NPRM 
proposes to remove all other project programming provisions from the 
FHWA's regulations. This NPRM would also provide more flexible funding 
arrangements and make the Federal-aid authorization process more 
flexible. Changes contained in related laws are included.

DATES: Written comments are due on or before April 18, 1995. Comments 
received after that date will be considered to the extent practicable.

ADDRESSES: All written, signed comments should refer to the docket 
number that appears at the top of this document and should be submitted 
to Federal Highway Administration, Office of the Chief Counsel, Room 
4232, HCC-10, 400 Seventh Street, SW., Washington, D.C. 20590. All 
comments received will be available for examination at the above 
address between 8:30 a.m. and 3:30 p.m., e.t., Monday through Friday, 
except Federal holidays. Those desiring notification of receipt of 
comments must include a self-addressed, stamped postcard.

FOR FURTHER INFORMATION CONTACT: Jerry L. Poston, Office of 
Engineering, 202-366-0450, or Wilbert Baccus, Office of the Chief 
Counsel, 202-366-0780, FHWA, 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: The initiation of work for transportation 
projects funded under the Federal-aid highway program is a two-step 
process. First, the State, in cooperation and consultation with local 
officials, as appropriate, through the metropolitan and statewide 
planning process, determines activities which will be advanced with 
Federal funds made available under title 23, United States Code, and 
the Federal Transit Act (49 U.S.C. 5301-5338) and develops a statewide 
program of projects for these activities. Prior to passage of the 
ISTEA, the requirements for developing the program of projects were 
found in 23 U.S.C. 105 and the implementing regulations in 23 CFR 630, 
subpart A. With passage of the ISTEA, title 23, U.S.C., was modified 
and the new requirements concerning development of a program of 
projects, now referred to as the Statewide transportation improvement 
program, are contained in 23 U.S.C. 135. The implementing regulation 
for this section are at 23 CFR 450 and were initiated through previous 
rulemaking actions.
    Accordingly, those requirements pertaining to a program of projects 
in 23 CFR 630, subpart A, no longer need to be retained. The FHWA 
therefore proposes to eliminate Secs. 630.106, 630.108, 630.110 and 
630.112 along with inappropriate programming references from the 
existing regulation.
    The second step in initiation of work is the project authorization 
process. The State highway agency (SHA) requests FHWA authorization to 
proceed with a proposed Federal-aid highway project. [[Page 9307]] The 
FHWA authorization commits the Federal Government to participate in the 
funding of a project, except in those instances where the State 
requests FHWA authorization without the commitment of Federal funds. In 
addition, FHWA authorization also establishes a point in time after 
which costs incurred on a project are eligible for Federal 
participation. Requirements covering project authorization are also 
contained in 23 CFR 630, subpart A. The FHWA proposes to modify certain 
of these requirements, both for clarification and to provide the SHA a 
greater degree of flexibility on certain funding arrangements. These 
modifications are discussed in the following section-by-section 
analysis.

Section-By-Section Analysis

Section 630.102  Purpose

    The statement of purpose would be revised to eliminate the 
reference to programming of projects since this activity would be 
eliminated from this subpart.

Section 630.104  Applicability

    The existing Sec. 630.104, Definitions, would be replaced with a 
new section to identify the types of projects that are covered by this 
subpart. FHWA planning and research funds, as defined in 23 CFR 
420.103, are authorized using the procedures in the regulations dealing 
specifically with these types of projects. At times, certain special 
funding categories may have unique authorization requirements and these 
types of projects are authorized as set out in implementing 
instructions or regulations.

Section 630.106  Authorization to Proceed

    Current Sec. 630.106, Policy, would be removed. A new Sec. 630.106, 
Authorization to proceed, would be redesignated from current 
Sec. 630.114 covering the authorization process. It retains many of the 
basic principles set forth in existing Sec. 630.114. However, there are 
modifications to provide greater flexibility in some funding areas and 
additions for clarification. The following discussion covers proposed 
Sec. 630.106 by individual paragraph.
    Paragraph (a) would retain the requirement that FHWA authorization 
to proceed with a Federal-aid project will only be given in response to 
a request from the SHA, and then only if the applicable requirements in 
law have been satisfied for the project.
    Paragraph (b) would retain the longstanding requirement that 
Federal-aid funds will only participate in costs incurred after the 
date the FHWA has authorized the State to proceed with the project. 
However, exceptions to this requirement have been allowed under a 
process set forth in 23 CFR 1.9(b). For informational purposes, wording 
has been included in paragraph (b) to identify and cross reference the 
exception process.
    Paragraphs (c), (d) and (e) would retain the requirement that at 
the time a Federal-aid project is authorized, the appropriate Federal 
funds for this project must be available. Five general categories for 
exceptions to this rule are presented, these being the same five 
categories that are in the existing regulation.
    Paragraph (f) is new and would be added for purposes of 
clarification. The FHWA authorization represents a contractual action 
by the FHWA and the Federal share of eligible costs must be agreed upon 
when the authorization occurs. The Federal share may be in the form of 
a specified percentage of eligible costs or a lump sum amount. Use of 
the lump sum share is a relatively new concept and is introduced to 
accommodate those instances where there is a desire to commit a fixed 
amount of Federal funds to a project. The lump sum amount may not 
exceed the legal pro rata share for the Federal funds involved. This 
may require downward adjustment of the lump sum amount when costs of 
eligible work on a project are less than the initial estimates at the 
time of FHWA authorization.
    The Federal share agreed to at FHWA authorization would continue 
through the life of the project. Manipulation of funding levels of 
individual projects to accommodate program funding changes or needs 
would not be allowed. However, adjustments to the Federal share would 
be permitted for projects in situations where bid prices are 
significantly different from the estimates at the time of FHWA 
authorization.
    Paragraph (g) is new and would incorporate the cost sharing 
principles of title 23, U.S.C., into the regulation. For Federal-aid 
projects, the Federal share of eligible costs incurred by the State 
cannot exceed the maximum share permitted by legislation. There is an 
agreed to Federal share of eligible costs and the non-Federal share of 
eligible costs must come from State funds (State match). Local 
government funds are considered to be State funds. Thus, local 
government funds can be combined with SHA funds to cover the required 
State match of eligible costs.
    Cash contributions from private sources are a different matter. 
FHWA participates in costs incurred on Federal-aid projects. Donations 
of private cash contributions for a specific Federal-aid project reduce 
the cost incurred; therefore, the private funds cannot be used to 
reduce the required State match. Private cash contributions can be 
applied to either eligible or ineligible items of work. However, when a 
private cash contribution is applied to costs eligible for Federal 
participation, the private cash contribution is considered to have 
reduced the cost of the project and thus reduced the cost incurred by 
the State.
    On the other hand, if a private cash contribution is made to a 
State or local government with no designation to a specific project, 
then the private cash contribution can be treated as funds of the State 
or local government and may be used in any way State or local funds are 
authorized to be used, including providing State match on Federal-aid 
projects.
    Contributions of funds from other Federal agencies to a specific 
project are for the most part treated similarly to private cash 
donations. These other Federal agency funds may not be used to provide 
the required State match on a Federal-aid project but, instead, are 
viewed as having reduced the cost incurred by the State on the project. 
The only exception is in those cases where the other Federal agency has 
specific legislative authority to use its funds to match other Federal 
funds.
    Paragraph (h) is new and would require that all contributions to a 
project be accounted for and properly credited to the project. The sum 
of cash contributions from all sources plus the Federal funds may not 
exceed the total cost of the project.
    Paragraph (i) is new and would incorporate into the regulation the 
provision in 23 U.S.C. 120(i) that allows the State to contribute more 
than the normal State match on a Federal-aid project. This provision 
has been interpreted to mean that a State may overmatch without being 
tied to a mandatory Federal share. However, token financing, such as 
when the Federal share represents only a minor percentage of eligible 
work or when large contributions are applied to the project to reduce 
the total cost, would not be permitted. As a general rule of thumb, it 
would be expected that the amount of Federal funds requested will 
represent at least 50 percent of eligible project costs. Exceptions to 
the 50 percent level should be based on sound project development or 
management reasons.
    The following table is provided to assist the user in locating 
regulatory [[Page 9308]] paragraph changes proposed by this rulemaking:

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              Old Section                          New section          
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630.102...............................  630.102                         
630.104...............................  Removed                         
None..................................  630.104                         
630.106...............................  Removed                         
630.108...............................  Removed                         
630.110...............................  Removed                         
630.112...............................  Removed                         
630.114(b)............................  630.106(a)                      
630.114(g)............................  630.106(b)                      
630.114(h)............................  630.106(c)                      
630.114(h)(3).........................  630.106(d)                      
630.114(h)(3).........................  630.106(e)                      
None..................................  630.106(f) through (i)          
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Rulemaking Analyses and Notices

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

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

    The FHWA has determined that this action is not a significant 
regulatory action within the meaning of Executive Order 12866 or 
significant within the meaning of Department of Transportation 
regulatory policies and procedures. It is anticipated that the economic 
impact of this rulemaking would be minimal; therefore, a full 
regulatory evaluation is not required. The FHWA does not consider this 
action to be a significant regulatory action because the proposed 
amendments would update the Federal-aid project authorization 
regulation to conform to recent laws, regulations, and to clarify 
existing policies.

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. Based on the evaluation, the FHWA certifies that this action 
would not have a significant economic impact on a substantial number of 
small entities. The proposed amendments would only clarify or simplify 
procedures used by SHA's in accordance with existing laws, regulations, 
or guidance.

Executive Order 12612 (Federalism Assessment)

    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 12612, and it has been determined 
that this action does not have sufficient federalism implications to 
warrant the preparation of a federalism assessment.

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 on 
Federal programs and activities apply to this program.

Paperwork Reduction Act

    This action does not contain a collection of information 
requirement for purposes of the Paperwork Reduction Act of 1980, 44 
U.S.C. 3501-3520.

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.

List of Subjects in 23 CFR Part 630

    Government contracts, Grant programs--transportation, Highways and 
roads, Project authorization.

    In consideration of the foregoing, the FHWA proposes to amend title 
23, Code of Federal Regulations, by revising Part 630, subpart A to 
read as set forth below.

    Issued on: February 10, 1995.
Rodney E. Slater,
Federal Highway Administrator.

PART 630--PRECONSTRUCTION PROCEDURES

Subpart A--Federal-Aid Project Authorization

Sec.
630.102  Purpose.
630.104  Applicability.
630.106  Authorization to proceed.

    Authority: 23 U.S.C. 106, 118, 120, and 315; 49 CFR 1.48(b).


Sec. 630.102  Purpose.

    The purpose of this subpart is to prescribe policies for 
authorizing Federal-aid projects.


Sec. 630.104  Applicability.

    (a) This subpart is applicable to all Federal-aid projects unless 
specifically exempted.
    (b) Projects financed with FHWA planning and research funds, as 
defined in 23 CFR 420.103 are not covered by this subpart. These 
projects are to be handled in accordance with 23 CFR parts 420 and 450.
    (c) Other projects which involve special procedures shall be 
authorized as set out in the implementing instructions.


Sec. 630.106  Authorization to proceed.

    (a) The FHWA issuance of an authorization to proceed with a 
Federal-aid project shall be in response to a written request from the 
State highway agency (SHA). Authorization can be given only after 
applicable prerequisite requirements of Federal laws and implementing 
regulations and directives have been satisfied.
    (b) Federal funds shall not participate in costs incurred prior to 
the date of authorization to proceed except as provided by 23 CFR 
1.9(b).
    (c) Authorization to proceed shall be deemed a contractual 
obligation of the Federal Government under 23 U.S.C. 106 and shall 
require that appropriate funds be available at the time of 
authorization for the agreed Federal share, either pro rata or lump 
sum, of the cost of eligible work to be incurred by the State except as 
follows:
    (1) Advance construction projects authorized under 23 U.S.C. 115.
    (2) Bond issue projects authorized under 23 U.S.C. 122.
    (3) Projects for preliminary studies for the portion of the 
preliminary engineering and right-of-way (ROW) phase(s) through the 
selection of a location.
    (4) Projects for ROW acquisition in hardship and protective buying 
[[Page 9309]] situations through the selection of a particular 
location. This includes ROW acquisitions within a potential highway 
corridor under consideration where necessary to preserve the corridor 
for future highway purposes. Authorization of work under this paragraph 
shall be in accord with the provisions of 23 CFR part 712.
    (5) In special cases where the Federal Highway Administrator 
determines it to be in the best interest of the Federal-aid highway 
program.
    (d) The authorization to proceed with a project under 23 CFR 
630.106(c)(3) through (c)(5) shall contain the following statement: 
``Authorization to proceed shall not constitute any commitment of 
Federal funds, nor shall it be construed as creating in any manner any 
obligation on the part of the Federal Government to provide Federal 
funds for that portion of the undertaking not fully funded herein.''
    (e) When a project has received an authorization under 23 CFR 
630.106 (c)(3) and (c)(4), subsequent authorizations beyond the 
location stage shall not be given until appropriate available funds 
have been obligated to cover eligible costs of the work covered by the 
previous authorization.
    (f)(1) The Federal-aid share of eligible project costs shall be 
established at the time of project authorization in one of the 
following manners:
    (i) Pro rata, with the authorization stating the Federal share as a 
specified percentage, or
    (ii) Lump sum, with the authorization stating that Federal funds 
are limited to a specified dollar amount not to exceed the legal pro 
rata.
    (2) The pro-rata or lump sum share may be adjusted to reflect any 
substantive change in the bids received as compared to the SHA's 
estimated cost of the project at the time of FHWA authorization, 
provided that Federal funds are available.
    (g) Federal participation is limited to the agreed Federal share of 
eligible costs actually incurred by the State, not to exceed the 
maximum permitted by enabling legislation. Any private cash 
contributions to the project must be credited to, and thereby such 
contributions reduce, the total project cost and are not considered to 
be costs incurred by the State. Private cash contributions may be 
applied to participating or nonparticipating work. Cash contributions 
provided by a local government are considered the same as State funds.
    (h) The sum of cash contributions from all sources plus the Federal 
funds may not exceed the total cost of the project.
    (i) The State may contribute more than the normal non-Federal share 
of title 23, U.S.C., projects. However, proposals resulting in token 
Federal financing of a Federal-aid project shall not be approved.

[FR Doc. 95-4029 Filed 2-16-95; 8:45 am]
BILLING CODE 4910-22-P