[Federal Register Volume 61, Number 57 (Friday, March 22, 1996)]
[Rules and Regulations]
[Pages 11743-11747]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6878]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 74

RIN 0991-AA56


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

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

ACTION: Final Rule including an Interim Final Rule for State-
Administered Entitlement Programs.

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SUMMARY: This final rule amends the HHS grants administration 
regulations to incorporate changes resulting from comments received in 
response to the publication of an interim rule implementing Office of 
Management and Budget (OMB) Circular A-110 on August 25, 1994. The 
revision of Section 74.1(a)(3), which applies this rule to the 
entitlement programs, remains an interim final rule until permanent 
policies are developed for these programs.

EFFECTIVE DATES: This final rule is effective April 22, 1996. The 
interim final rule revising Sec. 74.1(a)(3) is effective April 22, 
1996.

FOR FURTHER INFORMATION CONTACT:
Charles Gale, Director, Division of Grants Policy and Oversight, HHS, 
Room 517-D, 200 Independence Ave. SW, Washington, DC 20201; telephone 
(202) 690-6377; fax (202) 690-8772; for the hearing impaired only: TDD 
(202) 690-6415.

SUPPLEMENTARY INFORMATION: The interim rule published by the Department 
on August 25, 1994 (59 FR 43754) provided recipients with substantial 
flexibility regarding OMB Circular A-110. This flexibility included, 
for example, declining to exercise the authority to require prior 
approval for percentage budget transfers (Circular A-110, Section 
______.25(f)), declining to exercise the authority to require prior 
approval for fund transfers between direct and indirect costs (Circular 
A-110, Section ______.25(c)(5)), and declining to exercise the 
authority to require a notice of Federal interest in equipment 
(Circular A-110, Section ______.37). This final rule continues that 
flexibility.
    The Department received comments on the interim rule from several 
organizations representing the grantee community and from within HHS. 
Organizations commenting included community action agencies, community 
health centers, universities, State governments, law firms, and firms 
of certified public accountants. Many comments were supportive of HHS' 
implementation of OMB Circular A-110. All comments were considered in 
developing these final amendments.
    The following section presents a summary of the comments, grouped 
by subject, and a response to each. Whenever possible we have cited the 
specific provision under consideration.

General

    Comment: HHS should control the use of policy options by HHS 
awarding agencies. (For example, the choice of how program income shall 
be used under particular grants may be determined by HHS awarding 
agencies pursuant to Section 74.24(b).)
    Response: We believe the regulation strikes an appropriate balance 
between providing overall HHS uniformity, and giving flexibility to HHS 
awarding agencies, particularly in that HHS awarding agencies must 
operate within the requirements of the new rule in exercising their 
options.
    Comment: The definition of ``Federal share'' includes property 
improved with Federal funds. Do not apply the Federal share requirement 
to property improved with Federal funds.
    Response: We do not agree. Improvement of property with Federal 
funds creates a Federal interest in the same way as methods of 
financing property with Federal funds creates a Federal interest. 
(Section 74.2)
    Comment: The definition of ``Federal share'' includes ``improvement 
expenditures.'' Define ``improvement.''
    Response: ``Improvement'' needs no special definition because this 
is not a specialized use of the term. Only the ordinary, common sense 
meaning is intended. (Section 74.2)
    Comment: The definition of ``Federal share'' discusses property 
acquired on an amortized basis. Give examples of the Federal share on 
an amortized basis.
    Response: We have dropped that addition to the definition in order 
to avoid any implication of a change in the basic definition. It was 
not intended to alter the definition. The Federal share of property 
acquired on an amortized basis is determined in the same way as the 
Federal share of any other property. (Section 74.2)
    Comment: The external policy issuances of HHS awarding agencies 
should be rescinded.
    Response: There is no need to rescind HHS agencies' policy 
issuances. In many cases those issuances provide helpful explanations 
of HHS policy as it applies to special situations. Provisions of those 
issuances which conflict with this regulation, if any, are superseded. 
(Section 74.3)
    Comment: Deviations from the Part 74 rules, in individual cases, 
should be approved at the HHS level, rather than by the HHS awarding 
agencies.
    Response: We do not agree. HHS agencies make thousands of awards 
each year. It is not administratively feasible to route all individual 
cases to a central office. It would entail unacceptable delays for 
recipients. (Section 74.4)
    Comment: We would hope that the new rule continues to exempt block 
grants and other grants and subgrants covered by 45 CFR Part 92.
    Response: Part 74 applies to subawards made by State and local 
governments under 45 CFR Part 92 when those subawards are made to 
organizations covered by Part 74. Part 74 does not apply to subawards 
under block grants covered by 45 CFR Part 96. We have amended the text 
to make it clear that it does not apply to block grants. (Section 
74.5(a)(1))
    Comment: May a recipient impose special conditions on a 
subrecipient as it deems necessary or appropriate? For example, may a 
recipient insist on obtaining title when a subrecipient purchases 
equipment?
    Response: A recipient may impose special conditions on a 
subrecipient provided the special conditions are consistent with the 
provisions of this regulation. Rules which apply to recipients flow 
down also to subrecipients, as provided in Section 74.5. When a 
subrecipient purchases equipment, the subrecipient retains title 
subject to the recipient's right to require transfer under Section 
74.34(h).

Pre-Award Requirements

    Comment: Why was the previous subpart E, Waiver of Single State 
Agency Requirements, dropped from the regulation?
    Response: Subpart E was dropped from the interim final because it 
was decided that it would be better placed in the individual program 
regulations. However, in recognition of its placement in Part 74 for 
many years, we have now concluded it should be retained in this 
regulation as a matter of general information. Accordingly, we

[[Page 11744]]
have added the waiver provision at Section 74.1(a)(3).
    Comment: The circumstances for imposing special conditions should 
be limited to violations of statutory and regulatory conditions.
    Response: We do not agree. In addition to violations of statutory 
and regulatory conditions, Section 74.14(a) lists other situations 
which we believe warrant special conditions.

Post-Award Requirements

    Comment: Allow recipients to request advances when their cash 
declines to a percentage of their monthly budget.
    Response: We do not agree. A percentage rule would allow recipients 
to request advances, in some cases, before they are actually needed. 
(Section 74.22(g))
    Comment: Relax the requirement for insured bank accounts for 
certain days, such as payroll days, when cash balances are temporarily 
higher than the amount covered by Federal Deposit Insurance.
    Response: The insured account requirement says ``whenever 
possible.'' This covers situations, as described above, where 
recipients can justify that compliance is not possible. (Section 
74.22(i)(2))
    Comment: Do not apply the requirement for return of interest earned 
on advance payments to the period between deposit of the funds in the 
recipient's bank, and their disbursement by the recipient.
    Response: We do not agree. This is precisely the period that the 
interest-return requirement was designed to cover. (Section 74.22(k))
    Comment: Correct the reference to ``paid fringe benefits'' in the 
discussion of volunteer services.
    Response: We agree. We have amended the last sentence of section 
74.23(d) to read ``fringe benefits consistent with those paid * * *.''
    Comment: Do not require that recipients use the deductive 
alternative for program income in cases where the HHS awarding agency 
does not specify which alternative to use.
    Response: We do not agree. Not all Federally-supported projects are 
suitable for expansion with additional funds from program income. 
(Section 74.24(d))
    Comment: Delete the requirement that recipients use the deductive 
alternative for any income that exceeds the amount authorized by the 
HHS awarding agency for the recipient to use under the additive or 
cost-sharing alternatives.
    Response: We do not agree. Not all Federally-supported projects are 
suitable for unlimited expansion with additional funds from program 
income. (Section 74.24(c))
    Comment: Budget revisions should be considered approved if the HHS 
awarding agency does not reply within 30 days.
    Response: We do not agree. Occasionally it is not possible to reply 
in 30 days. This does not make the requested budget revision 
appropriate. (Section 74.25(i))
    Comment: Do not impose OMB Circular A-133 audit requirements on 
commercial organizations because most are already audited in accordance 
with generally accepted auditing standards (GAAS).
    Response: We have revised section 74.26(a) to add new paragraphs 
(2) and (3) to give commercial organizations which receive annual HHS 
awards that exceed the OMB Circular A-133 audit threshold the option of 
either a Circular A-133 audit or a financial related audit of HHS 
awards in accordance with Government Auditing Standards (GAS). However, 
an audit performed in accordance with GAAS alone can not be used as a 
substitute. (Proposed revisions to OMB Circular A-133 (60 FR 14594) set 
the audit threshold at $300,000).
    Comment: Amend the real property disposition rules to authorize 
waiver of the recipient's requirement to reimburse the Federal 
Government if the property has been used for its authorized purpose for 
the period, usually 20 years, specified in the conditions of the award. 
(Comment from an HHS awarding agency.)
    Response: Since the commenter's objection can be accomplished in a 
particular program through OMB Circular A-110's deviations procedures, 
we see no reason to amend the real property disposition rules. (Section 
74.32(c))
    Comment: When real property is sold, the Federal share should be 
based on the proceeds of sale rather than the fair market value.
    Response: We do not agree. In order for the Federal Government to 
equitably share in the appreciation or depreciation of real property 
acquired with Federal funds, the Federal Government's share must be 
based on the current fair market value. (Section 74.32(c)(2))
    Comment: Federally-furnished equipment should be included in the 
provisions for Federally-owned equipment.
    Response: Federally-owned equipment includes Federally-furnished 
equipment. (Section 74.33)
    Comment: Restore Circular A-110's introductory language in the 
provisions on exempt property.
    Response: We have amended section 74.33(b) to reference 31 U.S.C. 
6306, which authorizes HHS to vest title to tangible personal property 
in certain specified organizations conducting scientific research.
    Comment: In determining equipment's value for disposition purposes, 
``imputed undepreciated value'' should be an acceptable alternative to 
the regulation's ``current fair market value.''
    Response: We do not agree. In our view, current fair market value 
is a more accurate measure of value. (Section 74.34)
    Comment: The prohibition on use of equipment to provide services 
for a fee that is less than that charged by private companies should be 
limited to services other than those for which the award was made.
    Response: The prohibition does not apply to the activities for 
which the award was specifically made, because the award was 
statutorily authorized for that purpose, e.g., the provision of health 
care under an award to a community health center. (Section 74.34(b)(1))
    Comment: The statement that property shall be held in ``trust'' for 
the award's beneficiaries, and that the recipient shall record 
``liens'' should be deleted because ``trust'' and ``lien'' have legal 
meanings that go beyond the requirements of the policy.
    Response: We do not agree. We believe that the legal effect of 
``trusts'' and ``liens,'' as used in Section 74.37, is consistent with 
the requirements of the policy and that Federal interests are better 
protected by considering recipients as trustees for the beneficiaries 
of the program and by providing the Federal Government with a lien on 
the applicable property. (Section 74.37)
    Comment: Delete the requirement that the recipient record a notice 
of Federal interest in property, unless the HHS awarding agency 
furnishes a computation of the Federal interest in each item of 
property.
    Response: The recipient has much better information with which to 
calculate the Federal recipient shares of property than does the HHS 
awarding agency. In order to furnish such a computation to the 
recipient, HHS would have to impose a burdensome reporting requirement. 
There is no advantage to any of the parties in doing so. (Section 
74.37)
    Comment: Exempt small purchases from the requirement for a cost or 
price analysis.
    Response: Although this is not a new requirement, OMB and the 
Federal

[[Page 11745]]
agencies will carefully review this requirement, especially for 
purchases involving $2,500, or less, as revisions to OMB Circular A-110 
are developed. Federal fiscal interests require, and the section on 
cost or price analysis is intended to assure, that each element of the 
cost of a recipient's procurement action is reasonable, allocable and 
allowable. Recipients, however, are provided considerable latitude in 
determining the appropriate form of the cost or price analysis, 
depending on the nature and size of the procurement action. (Section 
74.45)
    Comment: Do not require the contract clauses to be used with 
purchase orders that do not require a written contract.
    Response: We do not agree. All of these clauses have been 
determined necessary to protect Federal interests, if not actually 
required by law, and therefore cannot be waived. (Section 74.48(e))
    Comment: The requirement for reasonable access to the recipient's 
employees for purposes of discussing records should be rewritten to 
state that recipients do not have an affirmative obligation to produce 
an employee for an interview.
    Response: We do not agree. Reasonable access to a recipient's 
personnel is necessary in order for the Federal Government to exercise 
fully its rights to undertake audits, examinations and similar 
procedures. Accordingly, recipients do have an affirmative obligation 
to provide that access. (Section 74.53(e))
    Comment: Since Appendix G has been removed, do HHS awarding 
agencies continue to have authority to place pre-award approval 
requirements on procurements under the entitlement programs? (Comment 
from an HHS awarding agency.)
    Response. Yes. OMB Circular A-110 does not preclude HHS awarding 
agencies from continuing their longstanding policies pertaining to pre-
award approval and other requirements regarding procurements under the 
entitlement programs.
    Comment: All enforcement actions should have a hearing on the 
record.
    Response: Part 74 is not intended to establish any enforcement 
action hearing rights. The section on enforcement simply states that 
recipients and subrecipients will receive whatever opportunity for a 
hearing, appeal or other administrative proceeding that they are 
entitled to. (Section 74.62(b))
    Comment: Allow subrecipients to appeal recipient enforcement 
actions to HHS.
    Response: See the previous response. (Section 74.62(b))

Other Substantive Changes

    Other substantive changes are as follows:
    1. In section 74.1(a)(3) we have added references to section 74.23, 
Cost sharing or matching, and section 74.52, Financial reporting, to 
the list of sections of this part which do not apply to the entitlement 
programs. These have been approved deviations for many years, and were 
inadvertently left out of the interim regulation.
    2. As we discussed in the preamble to the interim regulation (at 59 
FR 43758), the applicability of this regulation to the entitlement 
programs is a temporary measure until new policies for these programs 
are developed. Therefore, section 74.1(a)(3) remains as interim final 
rule. We intend to work with the Department of Agriculture and OMB to 
review existing policies and promulgate new regulations regarding these 
programs.
    3. We have added OMB Circular A-110's prohibitions on additional 
requirements, additional copies of payment reports, and additional 
prior approval requirements at sections 74.1(c), 74.22(m), and 
74.25(l), respectively. We have included the Circular's references, at 
section ______.25 (d) and (i), with respect to approval of deviations 
by OMB, and specified that it refers to class deviations (74.25(l)). It 
is noted that individual case deviations do not require OMB approval. 
(Circular section ______.4.)
    4. Because this regulation is applicable to some awards to 
governmental organizations (the entitlement programs), while OMB 
Circular A-110 is not, we have added a sentence to the definition of 
program income in section 74.2 to exempt taxes, special assessments, 
levies, and fines raised by governmental recipients from the definition 
of program income.
    5. We have added a statement of policy that the Department will use 
its deviation authority to facilitate comprehensive or integrated 
service delivery or multi-source consolidated awards. A particularly 
appropriate example would be to facilitate Empowerment Zones or 
Enterprise Communities, and similar awards in communities that 
unsuccessfully applied for those designations. (HHS may not grant 
deviations in classes of cases without the approval of OMB.) (Section 
74.4(b))
    6. We have amended sections 74.5, 74.12, and 74.22 to exempt 
subawards from section 74.12, Forms for applying for HHS financial 
assistance, and use of the forms prescribed in section 74.22, Payment. 
Recipients need not apply the forms in dealing with their subrecipients 
and should not impose more burdensome requirements on subrecipients.
    7. In order to permit automated tracking of audits, we have amended 
section 74.26(d) to provide that audits shall include the recipient's 
Employer Identification Number, and to request that recipients submit a 
computer disk containing the audit report in addition to the paper 
copy.
    8. We have amended section 74.34 to add a provision that formerly 
appeared at section 74.139(b)(2) and was inadvertently left out of the 
interim rule. That provision allows proceeds from equipment disposition 
to be used for project costs if the recipient's project is still 
receiving support from the same HHS program, and if the HHS awarding 
agency gives prior approval.
    9. We have amended section 74.44(e)(2) to change the simplified 
acquisition threshold (formerly the ``small purchase threshold'') for 
recipient procurements from $25,000 to $100,000 as provided in the 
Federal Acquisition Streamlining Act of 1994. We have also added the 
$100,000 reference to Section 74.48(b).
    10. Two changes have been made to Appendix A as a result of the 
Federal acquisition Streamlining Act, Public Law 103-355. The threshold 
for the requirement to include a provision for compliance with the 
Copeland ``Anti-Kickback Act'' (18 U.S.C. 874) was raised from $2,000 
to $100,000. Also, the threshold for the requirement to include the 
provision for compliance with sections 102 and 107 of the Contract Work 
Hours and Safety Standards Act (40 U.S.C. 327-333) was raised to 
$100,000.
    Other editorial changes have been made to correct errors and 
improve clarity.

Regulatory Impact Analyses

Executive Order 12866

    This rule was submitted to the Office of Management and Budget.

Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed this rule before publication and, by 
approving it, certifies that it does not have a significant impact on a 
substantial number of small entities.

Paperwork Reduction Act

    In keeping with the requirements of 44 U.S.C. 3504(h), the 
information

[[Page 11746]]
collection requirements in this rule have been approved by OMB as 
Standard Forms or HHS adaptations of Standard Forms with the following 
clearance numbers: SF-269: 0348-0039; SF-424: 0348-0043; and PMS 270 
and 272: 0937-0200.

List of Subjects in 45 CFR Part 74

    Accounting, Administrative practice and procedures, Grant programs-
health, Grant programs-social programs, Grants administration, 
Reporting and recordkeeping requirements.

(Catalog of Federal Domestic Assistance Number does not apply.)

    Dated: March 4, 1996.
Donna E. Shalala,
Secretary of Health and Human Services.

    Accordingly, the interim rule amending Part 74 of Title 45 of the 
Code of Federal Regulations, which was published at 59 FR 43754 on 
August 25, 1994, is adopted as final, except for Section 74.1(a)(3), 
which remains interim, with the following changes:

PART 74--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

    1. The authority citation for Part 74 is revised to read as 
follows:

    Authority: 5 U.S.C. section 301; OMB Circular A-110; Appendix J 
is also issued under 31 U.S.C. section 7505.

    2. Section 74.1 is amended by adding a new paragraph (c) to read as 
follows:


Sec. 74.1  Purpose and applicability.

* * * * *
    (c) HHS shall not impose additional or inconsistent requirements 
except as provided in Secs. 74.4 and 74.14, or unless specifically 
required by Federal statute or executive order.


Sec. 74.2  [Amended]

    3. Section 74.2 is amended by:
    a. Removing the last sentence in the definition of ``Federal 
share.''
    b. Adding a sentence at the end of the definition of ``Program 
income'' to read as follows:


Sec. 74.2  Definitions.

* * * * *
    Program income * * * Furthermore, program income does not include 
taxes, special assessments, levies, and fines raised by governmental 
recipients.
* * * * *


Sec. 74.3  [Amended]

    4. Section 74.3 is amended by adding ``Federal'' before 
``statute''.
    5. Section 74.4 is amended by designating the current text as 
paragraph (a) and adding a new paragraph (b) to read as follows:


Sec. 74.4  Deviations.

    (a) * * *
    (b) As a matter of Departmental policy, requests for individual 
case deviations will be considered favorably by HHS and its awarding 
agencies whenever the deviation will facilitate comprehensive or 
integrated service delivery, or multiple-source consolidated awards, 
unless the deviation would impair the integrity of the program.


Sec. 74.5  [Amended]

    6. Section 74.5(a) introductory text is amended by adding ``(except 
for Sec. 74.12 and the forms prescribed in Sec. 74.22)'' after ``this 
part''.
    7. Section 74.5(a)(1) is revised to read as follows:


Sec. 74.5  Subawards.

    (a) * * *
    (1) Except for subawards under block grants (45 CFR part 96), all 
subawards received by institutions of higher education, hospitals, 
other nonprofit organizations, and commercial organizations from any 
recipient of an HHS award, including any subawards received from 
States, local governments, and Indian tribal governments covered by 45 
CFR part 92; and
* * * * *
    8. Section 74.12 is amended by adding a new paragraph (e) to read 
as follows:


Sec. 74.12  Forms for applying for HHS financial assistance.

* * * * *
    (e) This section does not apply to applications for subawards.


Sec. 74.17  [Amended]

    9. Section 74.17 is amended by removing the ``HHS'' preceding 
``official(s)'' in the second sentence.
    10. Section 74.22 is amended by adding a sentence at the end of 
paragraph (m) and a new paragraph (n) to read as follows:


Sec. 74.22  Payment.

* * * * *
    (m) * * * HHS shall not require recipients to submit more than an 
original and two copies.
    (n) Recipients and subrecipients are not required to use forms PMS-
270 and 272 in connection with subaward payments.
    11. Section 74.23(d) is amended by revising the last sentence to 
read as follows:


Sec. 74.23  Cost sharing or matching.

* * * * *
    (d) * * * In either case, fringe benefits consistent with those 
paid that are reasonable, allowable, and allocable may be included in 
the valuation.
* * * * *
    12. Section 74.25 is amended in paragraph (c)(5) by revising ``or 
costs'' to read ``of costs'', and by adding a new paragraph (l) to read 
as follows:


Sec. 74.25  Revision of budget and program plans.

* * * * *
    (l) No other prior approval requirements for specific items may be 
imposed unless a class deviation has been approved by OMB.

    13. Section 74.26 is amended by revising paragraphs (a) and (d) to 
read as follows:


Sec. 74.26  Non-Federal audits.

    (a)(1) Recipients and subrecipients that are institutions of higher 
education, hospitals affiliated with institutions of higher education, 
and other nonprofit organizations shall be subject to the audit 
requirements contained in OMB Circular A-133, ``Audits of Institutions 
of Higher Education and Other Non-Profit Institutions.'' (See Appendix 
I to this part.)
    (2) Recipients and subrecipients that are commercial organizations 
have two options regarding audits:
    (i) A financial related audit (as defined in the Government 
Auditing Standards, GPO Stock #020-000-00-265--4) of a particular award 
in accordance with Government Auditing Standards, in those cases where 
the recipient receives awards under only one HHS program; or, if awards 
are received under multiple HHS programs, a financial related audit of 
all HHS awards in accordance with Government Auditing Standards; or
    (ii) An audit that meets the requirements contained in OMB Circular 
A-133.
    (3) Commercial organizations that receive annual HHS awards 
totaling less than OMB Circular A-133'a audit requirement threshold are 
exempt from requirements for a non-Federal audit for that year, but 
records must be available for review by appropriate officials of 
Federal agencies.
* * * * *
    (d)(1) All copies of audit reports required by this section shall 
be submitted to: Department of Health and Human Services, Office of 
Inspector

[[Page 11747]]
General, National External Audit Review Center, Lucas Place, Room 514, 
323 West 8th Street, Kansas City, MO 64105.
    (2) The HHS Office of Inspector General will distribute copies as 
appropriate within HHS. Recipients, therefore, are not required to send 
their audit reports to any other HHS officials. Recipients shall 
provide their Employer Identification Numbers (EIN) on the cover page 
of reports and submit along with the printed reports a computer disk 
containing the entire contents of the audit report a computer disk 
containing the entire contents of the audit report or at least the 
information in the report relating to HHS awards.
    14. Section 74.33(b) is amended by adding two sentences at the 
beginning of the paragraph to read as follows:


Sec. 74.33  Federally-owned and exempt property.

* * * * *
    (b) For research awards to certain types of recipients, 31 U.S.C. 
6306 authorizes HHS to vest title to property acquired with Federal 
funds in the recipient without further obligation to the Federal 
government and under conditions that HHS considers appropriate. Such 
property is ``exempt property.'' * * *
    15. Section 74.34 is amended by adding a new paragraph (g)(4) to 
read as follows:


Sec. 74.34  Equipment.

* * * * *
    (g) * * *
    (4) If the recipient's project or program for which or under which 
the equipment was acquired is still receiving support from the same HHS 
program, and if the HHS awarding agency approves, the net amount due 
may be used for allowable costs of that project or program. Otherwise 
the net amount must be remitted to the HHS awarding agency by check.
* * * * *


Sec. 74.35  [Amended]

    16. Section 74.35(b)(2) is amended by adding the word ``are'' after 
``supplies''.


Sec. 74.44  [Amended]

    17. Section 74.44(a)(2) is amended by adding ``recipient and the'' 
before ``Federal Government''.
    18. Section 74.44(e)(2) is amended by removing ``small purchase 
threshold fixed at 41 U.S.C. 403(11) (currently $25,000)'' and 
replacing it with ``simplified acquisition threshold fixed at 41 U.S.C. 
403(11) (currently $100,000)''.


Sec. 74.48  [Amended]

    19. Section 74.48(b) is amended by removing ``small purchase 
threshold'' and replacing it with ``simplified acquisition threshold 
(currently $100,000''.


Sec. 74.81  [Amended]

    20. Section 74.81 is amended by adding ``Transfer'' after 
``Technology''.


Sec. 74.90  [Amended]

    21. Section 74.90(d) is amended by adding ``the office responsible 
for awarding agency preliminary appeal process or, where none,'' after 
``e.g.,''.

Appendix A to Part 74 [Amended]

    22. Paragraph 2 of Appendix A is amended by removing ``$2,000'' and 
replacing it with ``$100,000''.
    23. Paragraph 4 of Appendix A is amended by removing ``$2,000 for 
construction contracts and in excess of $2500'' and replacing it with 
``$100,000 for construction contracts and''.
    24. Section 74.1(a)(3) is amended as an interim final rule by 
revising interim paragraph (a)(3) to read as follows:


Sec. 74.1  Purpose and applicability.

    (a) * * *
    (3) HHS grants and agreements, and any subawards under such grants 
and agreements, awarded to carry out the entitlement programs 
identified at 45 CFR Part 92, Sec. 92.4(a)(3), (a)(7), and (a)(8), 
except that Secs. 74.12, 74.23, 74.25, and 74.52 of this part do not 
apply. Under these programs, requests to HHS from Governors or other 
duly constituted State authorities for waiver of single State agency 
requirements in accordance with 31 U.S.C. 6501-6508 will be given 
expeditious handling. Whenever possible, such requests will be granted.
* * * * *
[FR Doc. 96-6878 Filed 3-21-96; 8:45 am]
BILLING CODE 4160-17-M