[Federal Register Volume 66, Number 226 (Friday, November 23, 2001)]
[Rules and Regulations]
[Pages 58665-58667]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-29258]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Part 1

RIN 2125-AE73


Engineering Services

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Final rule.

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SUMMARY: This document amends the regulation for engineering services 
by removing a sentence that defined expenditures for the establishment, 
maintenance, general administration, supervision, and other overhead of 
the State highway department, or other instrumentality or entity 
referred to in the regulation, as ineligible for Federal participation. 
This amendment to the regulation stems from a provision in the 
Transportation Equity Act for the 21st Century (TEA-21) that changed 
statutory requirements to allow for eligibility of administrative costs 
for State transportation departments.

EFFECTIVE DATE: This rule is effective December 24, 2001.

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., Washington, DC 20590. 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

    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 homepage at http://www.nara.gov/fedreg and the Government Printing Office's database at 
http://www.access.gpo.gov/nara.

Background

    Prior to the TEA-21 (Pub. L. 105-178, 112 Stat. 107 (1998), 
expenditures for the establishment, maintenance, general 
administration, supervision, and other overhead of the State highway 
department, or other instrumentality or entity referred to in paragraph 
(b) of 23 CFR 1.11, were not eligible for Federal participation. 
Section 302 of title 23, U.S. Code, requires a State to have a 
functioning transportation department as a condition for receiving 
Federal-aid highway funds. The FHWA has interpreted this provision, in 
accordance with legislative intent, to mean that the costs of operating 
the State transportation department were not eligible for Federal 
highway funds. This policy was inconsistent with general government 
policy issued in the Office of Management and Budget (OMB) Circular A-
87 \1\ which allows Federal participation in a State's indirect or 
overhead costs.
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    \1\ OMB Circular A-87, Cost Principles for State, Local, and 
Indian Tribal Governments, is available at the following URL: http://www.whitehouse.gov/omb/circulars.
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    Section 1212 (a) of the TEA-21 amended section 302, clarifying that 
the requirement to maintain a suitably equipped and organized 
transportation department did not effect a State's eligibility to be 
reimbursed for costs (including costs for indirect rates).
    The purpose for this statutory change was to provide for a 
consistent policy for cost reimbursement, specifically among Federal 
transportation agencies.
    Therefore, the FHWA is amending the regulation for engineering 
services. In 23 CFR 1.11 (a), the first paragraph is amended by 
removing the last sentence of the paragraph, ``Expenditures for the

[[Page 58666]]

establishment, maintenance, general administration, supervision, and 
other overhead of the State highway department, or other 
instrumentality or entity referred to in paragraph (b) of this section 
shall not be eligible for Federal participation.''

Discussion of Comments

    The Federal Highway Administration did not receive any comments to 
the docket of the notice of proposed rulemaking published on July 26, 
2000, at 65 FR 45941.

Rulemaking Analyses and Notices

    This final rule makes only minor technical corrections to our 
existing regulation. The rule amends outdated statutory language that 
stems from a provision in the Transportation Equity Act for the 21st 
Century (TEA-21) that changed statutory requirements to allow for 
eligibility of administrative costs for State transportation 
departments. As a result of the revised statutory requirements, the 
FHWA is amending its regulation at 23 CFR 1.11 (a) to reflect that 
costs of engineering services performed by the State highway department 
may be eligible for Federal participation to the extent that such costs 
are directly attributable to specific projects.

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

    The FHWA has considered the impact of this action and has 
determined that it is not a significant rulemaking action within the 
meaning of Executive Order 12866 or significant within the meaning of 
the U.S. Department of Transportation regulatory policies and 
procedures. Since this action merely amends a regulation it is 
anticipated that its economic impact is 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 the fact that 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.

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.)

Executive Order 12988 (Civil Justice Reform)

    This action meets applicable standards in sections 3(a) and 3(b) 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 action 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 rule 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.

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 a substantial 
direct effect or sufficient federalism implications on States that 
would limit policymaking discretion of the States. Nothing in this 
document directly preempts any State law or regulation.

Executive Order 12372 (Intergovernmental Review)

    Catalog of Domestic Assistance Program Number 20.205, Highway 
Planning and Construction. The regulations implementing Executive Order 
12372 regarding intergovernmental consultation of Federal programs and 
activities apply to this program.

Paperwork Reduction Act

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

National Environmental Policy Act

    The FHWA has analyzed this action for the purposes of the National 
Environmental Policy Act of 1969, as amended (42 U.S.C. 4321 et seq.) 
and has determined that it would not have any effect on the quality of 
the environment. Therefore, an environmental impact statement is not 
required.

Executive Order 13175 (Tribal Consultation)

    The FHWA has analyzed this rule under Executive Order 13175, dated 
November 6, 2000, and believes that the proposed action will not have 
substantial direct effects on one or more Indian tribes; will not 
impose substantial direct compliance costs on Indian tribal 
governments; and will not preempt tribal law. Therefore, a tribal 
summary impact statement is not required.

Executive Order 13211 (Energy Effects)

    We have analyzed this rule under Executive Order 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. We have determined that it is not a significant 
energy action under that order because it is not a significant 
regulatory action under Executive Order 12866 and is not likely to have 
a significant adverse effect on the supply, distribution, or use of 
energy. Therefore, a Statement of Energy Effects under Executive Order 
13211 is not required.

Regulatory 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.

List of Subjects in 23 CFR Part 1

    Administration, Conflicts of interest, Engineering services, Grant 
programs-transportation, Highways and roads, Rights-of-way.

    Issued on: November 13, 2001.
Mary E. Peters,
Federal Highway Administrator.

    In consideration of the foregoing, the FHWA amends, title 23, Code 
of Federal Regulations, part 1, as set forth below.

PART 1--[AMENDED]

    1. The authority citation for part 1 continues to read as follows:

    Authority: 23 U.S.C. 315; 49 CFR 1.48 (b).

    2. Revise Sec. 1.11 (a) to read as follows:


[[Page 58667]]




Sec. 1.11  Engineering services.

    (a) Federal participation. Costs of engineering services performed 
by the State highway department or any instrumentality or entity 
referred to in paragraph (b) of this section may be eligible for 
Federal participation only to the extent that such costs are directly 
attributable and properly allocable to specific projects.
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[FR Doc. 01-29258 Filed 11-21-01; 8:45 am]
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