[Federal Register Volume 65, Number 144 (Wednesday, July 26, 2000)]
[Rules and Regulations]
[Pages 45883-45885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18776]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Part 140

RIN 2125-AE74


Payroll and Related Expenses of Public Employees; General 
Administration and Other Overhead; and Cost Accumulation Centers and 
Distribution Methods

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Final rule; rescission of regulation.

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SUMMARY: This document rescinds the regulation for payroll and related 
expenses of public employees; general administration and other 
overhead; and cost accumulation centers and distribution methods. This 
rescission stems from a provision in the Transportation Equity Act for 
the 21st Century (TEA-21) that allows for eligibility of administrative 
costs of a State department of transportation (State DOT). The 
provision permits State transportation departments to request Federal 
reimbursement for various indirect costs, such as administrative 
overhead. Previously, Federal reimbursement was only available for 
direct costs, such as project construction and engineering expenses. 
States may claim indirect costs in accordance with the provisions of 
Office of Management and Budget (OMB) Circular A-87.

DATES: This rule is effective July 26, 2000.

FOR FURTHER INFORMATION CONTACT: Mr. Max Inman, Federal-aid Financial 
Management Division, (202) 366-2853 or Mr. Steve Rochlis, Office of the 
Chief Counsel, (202) 366-1395, Federal Highway Administration, 400 
Seventh Street SW., Room 4310, Washington, D.C. 20590. Office hours are 
from 7:45 a..m. to 4:45 p.m., e.t., Monday through Friday, except 
Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

    An electronic copy of this document may be downloaded using a modem 
and suitable communications software from the Government Printing 
Office's Electronic Bulletin Board Service (202) 512-1661. Internet 
users may reach the Office of the Federal Register's home page at 
http://www.nara.gov/fedreg and the Government Printing Office's 
database at http://www.access.gpo.gov/nara.

[[Page 45884]]

Background

    Section 1212(a) of the TEA-21, Public Law 105-178, 112 Stat. 107, 
at 193 (1998), amended 23 U.S. Code 302. Section 302 has long been 
interpreted to mean that a State could not claim Federal-aid highway 
funds for its costs associated with administering its highway 
department even though a State agency's indirect costs are generally 
allowable in accordance with directives issued by the OMB. This new 
provision in the TEA-21 clarifies that 23 U.S.C. 302 does not limit 
reimbursement of eligible indirect costs and thereby makes the Federal-
aid highway program consistent with other federal programs under OMB 
Circular A-87, as revised May 4, 1995, and further amended on August 
29, 1997. The change reduces the administrative burden caused by 
requiring States to develop separate accounting systems.
    The OMB Circular A-87 provides principles for determining the 
allowable costs of programs administered by State and local governments 
under grants from, and contracts with, the Federal government. These 
principles are designed to provide the basis for a uniform 
determination of costs and generally to provide that federally assisted 
programs bear their fare share of costs.
    Those States desiring to claim administrative overhead costs for 
the Federal-aid highway program may do so by developing an indirect 
cost rate proposal in accordance with the criteria provided in OMB 
Circular A-87, whereby the costs may be distributed to the various 
departments and programs in an equitable and consistent manner.

Rulemaking Analyses and Notices

    This final rule makes technical changes to existing regulations 
mandated by law to provide greater uniformity of treatment of indirect 
costs as applied to the Federal-aid highway program and reduces the 
burden on State and local governments. This action eliminates outdated 
language by rescinding the regulation for payroll and related expenses 
of public employees, general administration and other overhead, and 
cost accumulation centers and distribution methods. Rescission of the 
regulation is more consistent with current statutory authority under 
the TEA-21 that allows for eligibility of various indirect costs, such 
as, administrative overhead costs of a State DOT. Therefore, the FHWA 
finds good cause to take this action without prior notice or 
opportunity for public comment [5 U.S.C. 553(b)]. The DOT's regulatory 
policies and procedures also authorize promulgation of the rule without 
prior notice because it is anticipated that such action would not 
result in the receipt of useful information. The FHWA is making the 
rule effective upon publication in the Federal Register because it 
imposes no new burdens and merely corrects or clarifies exiting 
regulations [5 U.S.C. 553(d)].

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

    The FHWA has determined 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. This rulemaking action makes only technical corrections 
to the current regulations by rescinding a rule to eliminate outdated 
language due to current statutory authority under the TEA-21. It is 
anticipated that the economic impact of this rulemaking will be 
minimal; therefore, a full regulatory evaluation is not required.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act [5 U.S.C. 601-
612], the FHWA has evaluated the effects of this action on small 
entities. Based on the evaluation and since this rulemaking action 
merely removes an outdated regulation, the FHWA hereby certifies that 
this action will not have a significant economic impact on a 
substantial number of small entities. Furthermore, States are not 
included in the definition of ``small entity'' as provided in 5 U.S.C. 
601.

Executive Order 13132 (Federalism)

    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 13132, dated August 4, 1999, and 
it has been determined that this action does not have substantial 
direct effect or sufficient federalism implications on States that 
would limit the policymaking discretion of the States. Nothing in this 
document directly preempts any State law or regulation.

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.

Unfunded Mandates Reform Act of 1995

    This action does not impose a Federal mandate resulting in the 
expenditure by State, local, tribal governments, in the aggregate, or 
by the sector, of $100 million or more in any year. (2 U.S.C. 1531 et 
seq.)

Paperwork Reduction Act

    This action does not contain a collection of information 
requirement for purposes of the Paperwork Reduction Act of 1995, 44 
U.S.C. 3501 et seq.

Executive Order 12988 (Civil Justice Reform)

    This action meets applicable standards in sections 3(a) and 3(b)(2) 
of Executive Order 12988, Civil Justice Reform, to minimize litigation, 
eliminate ambiguity, and reduce burden.

Executive Order 13045 (Protection of Children)

    We have analyzed this action under Executive Order 13045, 
Protection of Children from Environmental Health Risks and Safety 
Risks. This rule, involved here is not economically significant and 
does not concern an environmental risk to health of safety that may 
disproportionately affect children.

Executive Order 12630 (Taking of Private Property)

    This action will not effect a taking of private property or 
otherwise have taking implications under Executive Order 12630, 
Governmental Actions and Interference with Constitutionally Protected 
Property Rights.

National Environmental Policy Act

    The FHWA 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. Therefore, an environmental impact statement is not 
required.

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 number contained in the 
heading of this document can be used to cross-reference this action 
with the Unified Agenda.

[[Page 45885]]

List of Subjects in 23 CFR Part 140

    Accounting, Grants programs--transportation, Highways and roads.

    Issued on: July 18, 2000.
Kenneth R. Wykle,
Federal Highway Administrator.

    In consideration of the foregoing, the FHWA amends title 23, Code 
of Federal Regulations, part 140, as set forth below:

PART 140--[AMENDED]

    1. Revise the authority citation for part 140 to read as follows:

    Authority: 23 U.S.C. 101(e), 106, 109(e), 114(a), 120(g), 121, 
122, 130, and 315; and 49 CFR 1.48(b).

Subpart G--[Removed and Reserved]

    2. Remove and reserve subpart G of part 140.

[FR Doc. 00-18776 Filed 7-25-00; 8:45 am]
BILLING CODE 4910-22-P