[Federal Register Volume 65, Number 170 (Thursday, August 31, 2000)]
[Proposed Rules]
[Pages 52962-52967]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-22297]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Part 630

[FHWA Docket No. FHWA-2000-7426]
RIN 2125-AE77


Federal-Aid Project Agreement

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice of proposed rulemaking (NPRM); request for comments.

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SUMMARY: The FHWA proposes to combine its regulation on Federal-aid 
project authorization and its regulation on project agreements. Section 
1305 of the Transportation Equity Act for the 21st Century (TEA-21) 
amended 23 U.S.C. 106(a) and combined authorization of work and 
execution of the project agreement for a Federal-aid project into a 
single action. Changes to the agreement provisions are being proposed 
to reflect these adjustments. Additionally, section 1304 of the TEA-21 
amended 23 U.S.C. 102(b) to include a provision to allow the granting 
of time extensions for engineering cost reimbursement. Changes to the 
procedures would be added to agency regulations to provide this new 
flexibility.

DATES: Comments must be received on or before October 2, 2000. Comments 
received after that date will be considered to the extent practicable.

ADDRESSES: Mail or hand deliver comments to the U.S. Department of 
Transportation, Dockets Management Facility, Room PL-401, 400 Seventh 
Street, SW., Washington, DC 20590, or submit electronically at http://dmses.dot.gov/submit. All comments should include the docket number 
that appears in the heading of this document. All comments received 
will be available for examination and copying at the above address from 
9 a.m. to 5 p.m., e.t., Monday through Friday, except Federal Holidays. 
Those desiring notification of receipt of comments must include a self-
addressed, stamped postcard or print the acknowledgment page that 
appears after submitting comments electronically.

FOR FURTHER INFORMATION CONTACT: Mr. Jack Wasley, Office of Program 
Administration (HIPA), (202) 366-4658, or Mr. Harold Aikens, Office of 
the Chief Counsel (HCC-30), (202) 366-0791, Federal Highway 
Administration, 400 Seventh Street, SW., 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.

SUPPLEMENTARY INFORMATION:

Electronic Access and Filing

    You may submit or retrieve comments online through the Document 
Management System (DMS) at: http://dmses.dot.gov/submit. Acceptable 
formats include: MS Word (versions 95 to 97), MS Word for Mac (versions 
6 to 8), Rich Text File (RTF), American Standard Code Information 
Interchange (ASCII)(TXT), Portable Document Format (PDF), and 
WordPerfect (versions 7 to 8). The DMS is available 24 hours each day, 
365 days each year. Electronic submission and retrieval help and 
guidelines are available under the help section of the web site.
    An electronic copy of this document may be downloaded by using a 
computer, modem and suitable communications software from the 
Government Printing Office's Electronic Bulletin Board Service at (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 web page at: http://www.access.gpo.gov/nara.

Background

    Under the provisions of 23 U.S.C. 106, a formal agreement between 
the State transportation department (STD) and the FHWA is required for 
Federal-aid highway projects. This agreement, referred to as the 
``project agreement,'' is in essence a written contract between the 
State and the Federal Government defining the extent of the work to be 
undertaken, the State and the Federal shares of a project's cost, and 
commitments concerning maintenance of the project.
    The present regulation at 23 CFR 630, subpart C, provides 
requirements concerning the project agreement. It

[[Page 52963]]

includes detailed instructions on preparation of the project agreement, 
and an assemblage of agreement provisions that are part of the project 
agreement.
    The present regulation at 23 CFR 630, subpart A, provides 
requirements concerning the project authorization. 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.
    It is the FHWA's desire to update and modify the existing 
regulation to incorporate needed changes to reflect adjustments made by 
sections 1304 and 1305 of the TEA-21, Public Law 105-178, 112 Stat.107, 
to combine the project agreement and provisions into the authorization 
of work, and to retain existing versatility in its use. The proposed 
changes are discussed in the following section-by-section analysis.

Section-by-Section Analysis

Section 630.102  Purpose

    Section 630.102 would be combined with Sec. 630.301 to create a new 
Sec. 630.102, with minor changes for clarity.

Section 630.104  Applicability

    Section 630.104(a) would be retained without modification. Section 
630.104(b) would be combined with Sec. 630.104(c) to create a new 
Sec. 630.104(b), to eliminate the need to cross reference projects 
financed with FHWA funds covered under separate regulations.

Section 630.106  Authorization To Proceed

    Section 630.106 would be revised to reflect that a project 
agreement is needed before authorization can be given to proceed with a 
project. At times, certain special projects may have unique 
authorization requirements in advance of the commitment of Federal 
funds. A project agreement, therefore, would be used to authorize 
special projects to proceed and not be construed as creating in any 
manner any obligation of the part of the Federal government to provide 
Federal funds for that portion of the undertaking not fully funded in 
the agreement. This section would retain many of the basic principles 
set forth in existing Sec. 630.106. The following discussion covers 
proposed Sec. 630.106 by individual paragraph.
    Section 630.106(a) would retain the requirement that the FHWA's 
authorization to proceed with a Federal-aid project will only be given 
in response to a request from the STD in a project agreement, and then 
only if the applicable requirements in law have been satisfied for the 
project.
    Section 630.106(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.
    Section 630.106 (c), (d), and (e) would retain the requirement that 
at the time a project agreement is executed for a Federal-aid project, 
the appropriate Federal funds for this project must be available. Four 
general categories for exceptions to this rule are presented in 
Sec. 630.106(c)(1)-(4), these being the same four categories that are 
in the existing regulation. Section 630.106(d) would be shortened to 
make it comparable with the clarification provided for other project 
agreement conditions and requirements.
    Section 630.106(f) is revised for purposes of clarification. The 
FHWA project agreement represents a contractual action by the FHWA and 
the Federal share of eligible costs must be agreed upon when the 
project agreement is executed. 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 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 the project agreement is executed.
    The Federal share agreed to 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.
    Section 630.106(g) would retain cost sharing principles of title 
23, U.S.C. This would continue the practice of allowing the State to 
contribute more than the normal State match on a Federal-aid project. 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, is not to be 
permitted. It is expected that the amount of Federal funds requested 
will represent at least 50 percent of eligible project costs. Exception 
to the 50 percent level should be based on sound project development or 
management reasons.
    Section 630.106(h)(1) is new and would permit cash contributions 
from private sources for a specific Federal-aid project to be used to 
reduce the required State match of eligible costs. The FHWA 
participates in costs incurred on Federal-aid projects. Private cash 
contributions can be applied to either eligible or ineligible items of 
work. However, when a private cash contribution is applied to costs 
ineligible for Federal participation, the private cash contribution is 
not considered to have reduced the cost of the Federal-aid project and 
thus cannot reduce the State match.
    Private cash contributions made to a State or local government with 
no designation to a specific project, are considered to be State or 
local government funds 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 generally 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 specific legislative authority allows Federal funds 
to match other Federal funds.
    The fair market value of any donated materials, services, or real 
property that are accepted and incorporated into the Federal-aid 
project by the STD may be credited against the State share in certain 
cases.
    Section 630.106(h)(2) 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. This item 
is intended to prevent the State from making a profit on a Federal-aid 
project.

[[Page 52964]]

Section 630.108  Preparation of Agreement

    This proposed new section would be a revision of existing 
Sec. 630.303. A State is required to prepare a project agreement for 
each Federal-aid highway project. A State would continue to have the 
flexibility to develop its own format for the project agreement, 
provided it contains information identified as necessary by the 
regulation. The optional use of electronic forms and signatures as 
developed and implemented by the FHWA would also continue.
    The following discussion covers proposed Sec. 630.108 by individual 
paragraph:
    Section 630.303(a) and (b) would be relocated to Sec. 630.108(a) 
and (b), respectively, with the term ``State highway agency'' replaced 
with the new term ``State transportation department'' along with minor 
changes for clarity and consistency.
    Sections 630.303(b)(1), (b)(2), (b)(3), and (b)(4), would be 
relocated to 23 CFR 630.108(b)(1), (b)(2), (b)(3), and (b)(4), 
respectively, without modification.
    Section 630.108(b)(5) would be a new requirement for the project 
agreement. The Federal-aid share of eligible costs expressed as either 
a pro rata percentage or a lump sum is presently required to be 
established at the time of project authorization. The project agreement 
being combined with the project authorization requirements must contain 
this information.
    Section 630.303(b)(5), (b)(6), and (b)(7), would be redesignated as 
Sec. 630.108(b)(6), (b)(7), and (b)(8), and revised to reflect the new 
agreement provisions section.
    Section 630.108(c) would be a new section containing the 
requirement that the project agreement must document instances when the 
State uses credit from special accounts and/or when other arrangements 
affecting Federal funding are used. The Federal share of eligible costs 
incurred by the State cannot exceed the maximum share permitted by 
legislation. The only exception is when using amounts of credits from 
special accounts (such as the 23 U.S.C. 120(j) toll credits, 23 U.S.C. 
144(n) off-system bridge credits and 23 U.S.C. 323 land value credits) 
to cover all, or a portion, of the normal percent of non-Federal share 
of eligible project costs. The result is that the State may apply these 
credits to adjust the Federal participation in actual project costs up 
to 100 percent. The non-Federal participation of eligible costs must 
come from State funds. Local government funds are considered to be 
State funds. Thus, local government funds can be combined with STD 
funds to cover the required State match of eligible costs. The State 
has the flexibility of using amounts of credit from special accounts 
permitted by enabling legislation to cover all or a portion of the 
normal percent non-Federal share of the project.
    Section 630.303(d) would be redesignated as Sec. 630.108(d), 
without modification.

Section 630.110  Modification of Original Agreement

    This proposed new section would be comprised of existing 
Sec. 630.305 with minor revisions. References to the obsolete ``SHA'' 
nomenclature would be replaced with the current ``STD'' nomenclature 
and a clarifying statement added that would include our longstanding 
requirement that agreements should not be modified to replace one 
Federal fund category with another unless specifically authorized by 
statute.

Section 630.112  Agreement Provisions

    This proposed new section would be a revision of existing 
Sec. 630.307. The provisions contained in this section continue to be a 
required part of each project agreement. Only the provisions that are 
necessary are included in this section of the regulation. The project 
agreement, by reference to this section, incorporates the provisions 
into each agreement. The following discussion covers each of the 
existing provisions and describes the revisions that are being 
proposed.
    Section 630.307(a), would be redesignated as Sec. 630.312(a), 
replacing only the references to the obsolete ``SHA'' nomenclature with 
the current ``STD'' nomenclature. This general provision is so broad in 
scope that there is little or no need for other provisions. Under this 
general provision, the State agrees to comply with title 23, United 
States Code, the regulations implementing title 23, and the policies 
and procedures established by the FHWA. The States generally agree, in 
the project agreement process, to comply with all other applicable 
Federal laws and regulations.
    Section 630.307(b), would be redesignated as Sec. 630.312(a), with 
minor changes for clarity.
    Section 630.307(c), would be redesignated as Sec. 630.312(c), 
without modification, except for the use of ``STD'' nomenclature.
    Section 630.307(c)(1), would be redesignated as Sec. 630.312(c)(1), 
with minor changes for clarity. This provision requires repayment of 
Federal-aid highway funds authorized if road construction on this 
right-of-way had not begun within 20 years. It is proposed that 
information be added concerning the FHWA's process to approve a period 
longer than twenty years for the repayment of Federal funds that is 
allowed under 23 U.S.C. 108(a)(2).
    Section 630.307(c)(2), would be redesignated as Sec. 630.312(c)(2), 
with changes to allow the granting of time extensions for engineering 
cost reimbursement. This provision requires repayment of Federal-aid 
highway funds authorized if right-of way acquisition or actual 
construction had not begun within 10 years after authorization of the 
preliminary engineering. It is proposed that information be added 
indicating that the FHWA may approve a period longer than 10 years for 
the repayment of Federal funds if considered reasonable. This provision 
is now found in the statute; section 1304 of the TEA-21 incorporated 
this provision into 23 U.S.C. 102(c).
    Sections 630.307(c)(3), (4), and (5) would be redesignated as 
Sec. 630.312(c)(3), (4) and (5) without modification, except for the 
replacement of ``SHA'' nomenclature with ``STD'' nomenclature. These 
provisions require that certifications be given to the FHWA, for drug-
free workplace certification required by 49 CFR 29.630, for suspension/
debarment certification required by 49 CFR 29.510, and for lobbying 
certification required by 49 CFR 20.110. States must provide these 
certifications for each project. Placing language in the project 
agreement as part of the general provisions is considered the same as 
providing a separate certification action for every project placed 
under agreement.

Section 630.301  Purpose

    This section would be removed because Sec. 630.301 would be 
combined with Sec. 630.102 to create a new Sec. 630.102.

Section 630.303  Preparation of Agreement

    This section would be removed because it would be relocated and 
revised as proposed new Sec. 630.108.

Section 630.305  Modification of Original Agreement

    This section would be removed because it would be relocated as 
proposed new Sec. 630.110 with minor revisions.

[[Page 52965]]

Section 630.307  Agreement Provisions

    This section would be removed because it would be relocated and 
revised as proposed new Sec. 630.112.
    The following derivation table is provided to assist the user in 
understanding the reorganization of sections contained in proposed 
subpart A of part 630. Note that many of the proposed new sections 
would contain revised language that originated from current subpart C, 
according to the description in the section-by-section analysis above:

------------------------------------------------------------------------
                New section                          Old section
------------------------------------------------------------------------
630.102...................................  630.102 and 630.301
630.104(a)................................  630.104(a)
630.104(b)................................  630.104(b) and (c)
630.106(a)................................  630.106(a)
630.106(b)................................  630.106(b)
630.106(c)................................  630.106(c)
630.106(d)................................  630.106(d)
630.106(e)................................  630.106(e)
630.106(f)................................  630.106(f)
630.106(g)................................  630.106(g)
630.106(h)................................  Added
630.108(a)................................  630.303(a)
630.108(b)(1) through (b)(4)..............  630.303(b)(1) through (b)(4)
630.108(b)(5).............................  Added
630.108(b)(6), (b)(7), and (b)(8).........  630.303(b)(5), (b)(6), and
                                             (b)(7)
630.108(c)................................  Added
630.108(d)................................  630.303(d)
630.110...................................  630.305
630.112...................................  630.307
------------------------------------------------------------------------

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. The proposed amendments would 
merely update the Federal-aid project agreement regulation to conform 
to recent laws, regulations, or guidance and clarify existing policies. 
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 rule on small 
entities, such as local governments and businesses. Based on the 
evaluation, the FHWA hereby certifies that this action would not have a 
significant economic impact on a substantial number of small entities. 
The proposed amendments would merely clarify or simplify procedures 
used by State highway agencies in accordance with existing laws, 
regulations, or guidance. We specifically invite comments on this 
issue.

Unfunded Mandates Reform Act of 1995

    This proposed rule would not impose a Federal mandate resulting 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. 1531 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 proposed rule is not economically significant and does not 
concern an environmental risk to health or safety that may 
disproportionately affect children.

Executive Order 12630 (Taking of Private Property)

    This proposed rule would 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.

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 preliminarily determined that it does not have a 
substantial direct affect or significant federalism implications on 
States or local governments 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.

Paperwork Reduction Act of 1995

    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 FHWA has 
determined that this proposal contains collection of information 
requirements for the purposes of the PRA. The requirements to collect 
information relating to the current provisions for the project 
agreement form are covered by a currently-approved information 
collection entitled ``Preparation and Execution of the Project 
Agreement and Modifications.'' This collection is covered under OMB 
Approval No. 2125-0529 with an expiration date of May 31, 2001.
    This proposal would update and modify existing requirements to 
reflect statutory changes to the project agreement process enacted by 
Section 1305 of the Transportation Equity Act for the 21st Century 
(TEA-21, Pub. L. 105-178) amended 23 U.S.C. 106(a) and combined 
authorization of work and execution of the project agreement for a 
Federal-aid project into a single action. There are no changes to the 
current information collection burden estimates as a result of this 
proposal. The FHWA has estimated that the average number of project 
agreements executed annually by each of the respondents is 215 and that 
each agreement takes approximately one hour to complete. The 56 
respondents include STDs in the 50 States, the District of Columbia, 
Puerto Rico, the Commonwealth of the Northern Mariana Islands and the 
Territories of Guam, the Virgin Islands, and American Samoa.
    The FHWA seeks public comments regarding these information 
collection requirements. Interested parties are

[[Page 52966]]

invited to send comments regarding any aspect of these information 
collection requirements, including, but not limited to: (1) Whether the 
collection of information is necessary for the FHWA's performance, 
including whether the information has practical utility; (2) the 
accuracy of the estimated burdens; (3) ways to enhance the quality, 
utility, and clarity of the collection information; and (4) ways to 
minimize the collection burden without reducing the quality of the 
information collected.

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 agreement procedures.

    Issued on: August 24, 2000.
Kenneth R. Wykle,
Federal Highway Administrator.
    In consideration of the foregoing, the FHWA proposes to amend title 
23, Code of Federal Regulations, by revising subpart A and removing and 
reserving subpart C of part 630 as set forth below:

PART 630--PRECONSTRUCTION PROCEDURES

    1. Revise the authority citation for part 630 to read as follows:

    Authority: 23 U.S.C. 106, 109, 115, 315, 320, and 402(a); 23 CFR 
1.32; and 49 CFR 1.48(b).

    2. Revise subpart A of part 630 to read as follows:

Subpart A--Project Authorization and Agreements

Sec.
630.102  Purpose.
630.104  Applicability.
630.106  Authorization to proceed.
630.108  Preparation of agreement.
630.110  Modification of original agreement.
630.112  Agreement provisions.


Sec. 630.102  Purpose.

    The purpose of this subpart is to prescribe policies for 
authorizing Federal-aid projects through execution of the project 
agreement required by 23 U.S.C. 106(a)(2).


Sec. 630.104  Applicability.

    (a) This regulation is applicable to all Federal-aid projects 
unless specifically exempted.
    (b) Other projects which involve special procedures are to be 
approved, or authorized as set out in the implementing instructions or 
regulations for those projects.


Sec. 630.106  Authorization to proceed.

    (a)(1) The State transportation department (STD) must obtain an 
authorization to proceed from the FHWA before beginning work on any 
Federal-aid project. The STD may request an authorization to proceed in 
writing or by electronic mail for a project or a group of projects.
    (2) The FHWA will issue the authorization to proceed either through 
or after the execution of a formal project agreement with the State. 
The agreement can be executed only after applicable prerequisite 
requirements of Federal laws and implementing regulations and 
directives are satisfied. Except as provided in subsections (c)(1)-(4) 
of the section, the FHWA will obligate Federal funds in the projects or 
group of projects upon execution of the project agreement.
    (b) Federal funds shall not participate in costs incurred prior to 
the date of a project agreement except as provided by 23 CFR 1.9(b).
    (c) The execution of the project agreement 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) Projects for preliminary studies for the portion of the 
preliminary engineering and right-of-way (ROW) phase(s) through the 
selection of a location.
    (3) Projects for ROW acquisition in hardship and protective buying 
situations through the selection of a particular location. This 
includes ROW acquisition 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 710.
    (4) In special cases where the Federal Highway Administrator 
determines it to be in the best interest of the Federal-aid highway 
program.
    (d) For projects authorized to proceed under paragraphs (c)(1) 
through (c)(4) of this section, the executed project agreement shall 
contain the following statement: ``Authorization to proceed is not a 
commitment or obligation to provide Federal funds for that portion of 
the undertaking not fully funded herein.''
    (e) For projects authorized under paragraphs (c)(2) and (c)(3) of 
this section, 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 the project agreement is executed in one of the 
following manners:
    (i) Pro rata, with the agreement stating the Federal share as a 
specified percentage; or
    (ii) Lump sum, with the agreement 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 before or 
shortly after contract award to reflect any substantive change in the 
bids received as compared to the STD's estimated cost of the project at 
the time of FHWA authorization, provided that Federal funds are 
available.
    (3) 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.
    (g) The State may contribute more than the normal non-Federal share 
of title 23, U.S.C., projects. In general, financing proposals that 
result in only minimal amounts of Federal funds in projects should be 
avoided unless they are based on sound project management decisions.
    (h)(1) Donations of cash, land, material or services may be 
credited to the State's non-Federal share of the participating project 
work in accordance with title 23, United States Code, and implementing 
regulations.
    (2) Contributions may not exceed the total costs incurred by the 
State on the project. Cash contributions from all sources plus the 
Federal funds may not exceed the total cost of the project.

[[Page 52967]]

Sec. 630.108  Preparation of agreement.

    (a) The STD shall prepare a project agreement for each Federal-aid 
project.
    (b) The STD may develop the project agreement in a format 
acceptable to both the STD and the FHWA provided the following are 
included:
    (1) A description of the project location including State and 
project termini;
    (2) The Federal-aid project number;
    (3) The work covered by the agreement;
    (4) The total project cost and amount of Federal funds under 
agreement;
    (5) The Federal-aid share of eligible project costs expressed as 
either a pro rata percentage or a lump sum as set forth in 
Sec. 630.106(f)(1);
    (6) A statement that the State accepts and will comply with the 
agreement provisions set forth in Sec. 630.112;
    (7) A statement that the State stipulates that its signature on the 
project agreement constitutes the making of the certifications set for 
in Sec. 630.112; and
    (8) Signatures of officials from both the State and the FHWA, and 
the date executed.
    (c) The project agreement should also document, by comment, 
instances where:
    (1) The State is applying amounts of credits from special accounts 
(such as the 23 U.S.C. 120(j) toll credits, 23 U.S.C. 144(n) off-system 
bridge credits and 23 U.S.C. 323 land value credits) to cover all or a 
portion of the normal percent non-Federal share of the project; and
    (2) The project involves other arrangements affecting Federal 
funding or non-Federal matching provisions, including tapered match, 
donations, or use of other Federal agency funds, if known at the time 
the project agreement is executed.
    (3) The State is claiming finance related costs for bond and other 
debt instrument financing (such as payments to States under 23 U.S.C. 
122).
    (d) The STD may use an electronic version of the agreement as 
provided by the FHWA.
    (Approved by the Office of Management and Budget under control 
number 2125-0529)


Sec. 630.110  Modification of original agreement.

    (a) When changes are needed to the original project agreement, a 
modification of agreement shall be prepared. Agreements should not be 
modified to replace one Federal fund category with another unless 
specifically authorized by statute.
    (b) The STD may develop the modification of project agreement in a 
format acceptable to both the STD and the FHWA provided the following 
are included:
    (1) The Federal-aid project number and State;
    (2) A sequential number identifying the modification;
    (3) A reference to the date of the original project agreement to be 
modified;
    (4) The original total project cost and the original amount of 
Federal funds under agreement;
    (5) The revised total project cost and the revised amount of 
Federal funds under agreement;
    (6) The reason for the modifications; and,
    (7) Signatures of officials from both the State and the FHWA and 
date executed.
    (c) The STD may use an electronic version of the modification of 
project agreement as provided by the FHWA.


Sec. 630.112  Agreement provisions.

    (a) The State, through its transportation department, accepts and 
agrees to comply with the applicable terms and conditions set forth in 
title 23, United States Code, the regulations issued pursuant thereto, 
the policies and procedures promulgated by the FHWA relative to the 
designated project covered by the agreement, and all other applicable 
Federal laws and regulations.
    (b) Federal funds obligated for the project must not exceed the 
amount agreed to on the project agreement, the balance of the estimated 
total cost being an obligation of the State. Such obligation of Federal 
funds extends only to project costs incurred by the State after the 
execution of a formal project agreement with the FHWA.
    (c) The State must stipulate that as a condition to payment of the 
Federal funds obligated, it accepts and will comply with the following 
applicable provisions:
    (1) Project for acquisition of rights-of-way. In the event that 
actual construction of a road on this right-of-way is not undertaken by 
the close of the twentieth fiscal year following the fiscal year in 
which the project is authorized, the STD will repay to the FHWA the sum 
or sums of Federal funds paid to the transportation department under 
the terms of the agreement. The State may request a time extension 
beyond the 20-year limit with no repayment of Federal funds, and the 
FHWA may approve this request if it is considered reasonable.
    (2) Preliminary engineering project. In the event that right-of-way 
acquisition for, or actual construction of, the road for which this 
preliminary engineering is undertaken is not started by the close of 
the tenth fiscal year following the fiscal year in which the project is 
authorized, the STD will repay to the FHWA the sum or sums of Federal 
funds paid to the transportation department under the terms of the 
agreement. The State may request a time extension for any preliminary 
engineering project beyond the 10-year limit with no repayment of 
Federal funds, and the FHWA may approve this request if it is 
considered reasonable.
    (3) Drug-free workplace certification. By signing the project 
agreement, the STD agrees to provide a drug-free workplace as required 
by 49 CFR part 29, subpart F. In signing the project agreement, the 
State is providing the certification required in appendix C to 49 CFR 
part 29, unless the State provides an annual certification.
    (4) Suspension and debarment certification. By signing the project 
agreement, the STD agrees to fulfill the responsibility imposed by 49 
CFR 29.510 regarding debarment, suspension, and other responsibility 
matters. In signing the project agreement, the State is providing the 
certification for its principals required in appendix A to 49 CFR part 
29.
    (5) Lobbying certification. By signing the project agreement, the 
STD agrees to abide by the lobbying restrictions set forth in 49 CFR 
part 20. In signing the project agreement, the State is providing the 
certification required in the appendix to 49 CFR part 20.

Subpart C--[Removed and Reserved]

    3. In part 630, remove and reserve subpart C.

[FR Doc. 00-22297 Filed 8-30-00; 8:45 am]
BILLING CODE 4910-22-P