[Federal Register Volume 73, Number 157 (Wednesday, August 13, 2008)]
[Rules and Regulations]
[Pages 47046-47057]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-18497]


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DEPARTMENT OF LABOR

Office of Labor-Management Standards

29 CFR Part 215

RIN 1215-AB58


Amendment to Guidelines for Processing Applications for 
Assistance To Conform to Sections 3013(h) and 3031 of the Safe, 
Accountable, Flexible, and Efficient Transportation Equity Act--A 
Legacy for Users and To Improve Processing for Administrative 
Efficiency

AGENCY: Office of Labor-Management Standards, Department of Labor.

ACTION: Final rule.

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SUMMARY: The Department of Labor (``Department''), through the Office 
of Labor-Management Standards (``OLMS''), issued proposed changes to 
its Guidelines for the Department's administration of the Secretary of 
Labor's (``Secretary'') responsibility under the Federal transit law, 
49 U.S.C. 5333(b). This document sets forth the Department's review of 
and response to comments on the proposed revisions, as well as the 
changes made to the Guidelines in response to those comments.
    Pursuant to section 5333(b) of the Federal transit law, the 
Department must certify that, as a condition of certain grants of 
Federal financial assistance, fair and equitable labor protective 
provisions are in place to protect the interests of employees affected 
by such Federal assistance. The Department administers this program 
through Guidelines set forth at 29 CFR Part 215. The Department's 
proposed changes are intended to conform the Guidelines to amendments 
to the Federal transit law made by sections 3013(h) and 3031 of the 
Safe, Accountable, Flexible, and Efficient Transportation Equity Act--A 
Legacy for Users (``SAFETEA-LU''), Public Law No. 109-59, 119 Stat. 
1144 (2005). In addition to changes mandated by statute, the Department 
proposed revisions to the Guidelines that are intended to enhance the 
speed and

[[Page 47047]]

efficiency of the Department's processing of grant certifications. The 
revisions to existing procedures for processing grant applications 
under the Federal transit law are intended to ensure timely 
certifications in a predictable manner, while remaining consistent with 
the transit law's objectives. The Department invited written comments 
on the proposed revisions from members of the public.

EFFECTIVE DATE: This rule is effective October 1, 2008.

FOR FURTHER INFORMATION CONTACT: Ann Comer, Chief, Division of 
Statutory Programs, Office of Labor-Management Standards, U.S. 
Department of Labor, 200 Constitution Avenue, NW., Room N-5112, 
Washington, DC 20210, [email protected], (202) 693-0126.

SUPPLEMENTARY INFORMATION:

I. Background

    On September 14, 2007, the Department, through OLMS, issued 
proposed revisions to the Guidelines it employs to administer the 
Department's program under 49 U.S.C. 5333(b), which requires the 
Secretary to certify that labor protections are in place for employees 
who may be affected by certain grants of Federal financial assistance. 
See Amendment to Guidelines for Processing Applications for Assistance 
To Conform to Sections 3013(h) and 3031 of the Safe, Accountable, 
Flexible, and Efficient Transportation Equity Act--A Legacy for Users 
and To Improve Processing for Administrative Efficiency (``NPRM''), 72 
FR 52521. The Department invited written comments on the proposed 
revisions from interested parties. The written comment period closed on 
October 15, 2007, and the Department has considered all timely comments 
received in response to the proposed Guidelines revisions.
    The Department received 10 timely comments in response to its 
proposed revisions, including five comments from various labor 
organizations (the Transportation Trades Department of the AFL-CIO; the 
Amalgamated Transit Union; a joint submission from the United 
Transportation Union and the Sheet Metal Workers International 
Association; the Transportation Communications International Union, and 
a joint submission by the American Train Dispatchers Association, the 
Brotherhood of Locomotive Engineers and Trainmen/IBT, the Brotherhood 
of Maintenance of Way Employees Division/IBT, the Brotherhood of 
Railroad Signalmen, the International Brotherhood of Boilermakers and 
Blacksmiths, the National Council of Firemen and Oilers/SEIU, the Sheet 
Metal Workers International Association, and the Transport Workers 
Union of America (rail division)); two comments from transit 
associations (American Public Transportation Association and Taxicab, 
Limousine & Paratransit Association); two public transit authorities 
(the Texas Department of Transportation and the Regional Transportation 
Commission of Southern Nevada); and one private consulting firm (Jim 
Seal Consulting Services).
    Under 49 U.S.C. 5333(b), when Federal funds are used to acquire, 
improve, or operate a transit system, the Department must ensure that 
the recipient of those funds establishes arrangements to protect the 
rights of affected transit employees. Federal law requires such 
arrangements to be ``fair and equitable,'' and the Department must 
certify the arrangements before the U.S. Department of Transportation's 
Federal Transit Administration (FTA) can award certain funds to 
grantees. These employee protective arrangements must include 
provisions that may be necessary for the preservation of rights, 
privileges, and benefits under existing collective bargaining 
agreements or otherwise; the continuation of collective bargaining 
rights; the protection of individual employees against a worsening of 
their positions related to employment; assurances of employment to 
employees of acquired transportation systems; assurances of priority of 
reemployment of employees whose employment is ended or who are laid 
off; and paid training or retraining programs. 49 U.S.C. 5333(b)(2).

II. Summary of the Final Guidelines and Discussion of the Comments

    The development of these Final Guidelines has included a careful 
review of the public's timely comments. All timely comments received 
are addressed in this Section. In those cases in which comments made 
suggestions that, in the Department's view, improved or corrected the 
proposed Guidelines, such changes have been incorporated. In some 
cases, no change to the proposed language was deemed necessary.

A. Processing of Grant Applications To Replace Equipment or Facilities 
of ``Like-kind''

    In its NPRM, the Department proposed amending the guidelines to 
conform to section 3031 of SAFETEA-LU, which added a new subparagraph 
to section 5333(b) relating to grants for the purchase of ``like-kind'' 
equipment or facilities. As amended by SAFETEA-LU, section 5333(b)(4) 
now requires that employee protective arrangements for grants 
requesting assistance to purchase like-kind equipment or facilities be 
certified by the Department without referral to the parties. The 
current Guidelines, at section 215.3(b)(1), reflect this practice, 
except that the current provision creates an exception to non-referral 
if the Department determines that the grant application has a 
``potentially material effect on employees.'' To conform the guidelines 
to the statutory mandate, the proposed guidelines, at section 
215.3(a)(4)(iii), provided that employee protections relating to grants 
funding equipment and/or facilities of like-kind shall be certified 
without a referral, and deleted the ``material effect'' exception. 
Proposed Section 215.3(a)(4)(iii) also addressed the terms the 
Department will apply in like-kind grant applications. That section 
states that where ``application of the existing protective agreement(s) 
or the Unified Protective Arrangement would not satisfy the 
requirements of the statute in the circumstances presented, the 
Department will make any necessary modifications to the existing 
protections to ensure that the requirements of the statute are 
satisfied.''
    The Department received five comments regarding its proposed change 
to its processing of grant applications to replace like-kind equipment 
or facilities, and the comments addressed the following three issues: 
Whether it is appropriate for the Department to eliminate its current 
exception to its practice of non-referral of grant applications for 
like-kind purchases in those cases in which the funding would result in 
a ``potentially material effect on employees'' under the current 
Section 215.3(b)(1); whether the Department appropriately included new 
language in Section 215.3(a)(4)(iii) permitting it to make ``any 
necessary modifications to the existing protections'' when certifying 
grant applications for like-kind purchases; and whether the Department 
will notify the labor organizations representing employees who may be 
affected by grant applications for like-kind purchases that the 
Department has received such an application but has made no referral. 
Addressing the last issue first, the Department has included a 
subsection in Section 215.3(a) to confirm its current practice that the 
Department will ``notify labor organizations representing potentially 
affected transit employees of the certification of grants without 
referral under paragraph (a)(4) and

[[Page 47048]]

inform them of their rights under the applicable protective 
arrangements.'' See Section 215.3(a)(5).
    The Department has fully considered the first issue regarding the 
deletion of the current exception to the practice of non-referral of 
grant applications for like-kind purchases in those cases in which the 
funding would result in a ``potentially material effect on employees,'' 
currently found at Section 215.3(b)(1). The amendments to 49 U.S.C. 
5333(b) enacted by SAFETEA-LU incorporate the following provision into 
the statute:

    Fair and equitable arrangements to protect the interests of 
employees utilized by the Secretary of Labor for assistance to 
purchase like-kind equipment or facilities, and grant amendments 
which do not materially revise or amend existing assistance 
agreements, shall be certified without referral.

49 U.S.C. 5333(b)(4). The Department interprets this statutory 
provision as permitting no exception for the referral of grants for 
like-kind purchases in any case, and no comments provide a persuasive 
reason for adopting a different interpretation. As a result, the 
Department, as proposed, is deleting the provision in the current 
guidelines permitting referral of grant applications for the purchase 
of like-kind equipment in cases in which the purchase may have a 
material effect on employees.
    The remaining issue addressed by the comments dealing with the 
Department's non-referral of grants for like-kind purchases is the 
Department's proposal in Section 215.3(a)(4)(iii) to ``make any 
necessary modifications to the existing [non-referred] protections to 
ensure that the requirements of the statute are satisfied'' in those 
cases in which application of the existing protective agreement(s) or 
the Unified Protective Arrangement would not satisfy the requirements 
of the statute. One comment in particular noted that where changes to 
existing arrangements are ``deemed necessary [they] should be referred 
to the parties for resolution or, at a minimum, such imposed changes 
should be made without prejudice to any future objections or proposal 
by the parties.'' Comment submitted by Transportation Communications 
International Union in response to NPRM, October 15, 2007 (``TCU 
Comment''), page 2.
    With one modification, the Department will retain the proposed 
language in Section 215.3(a)(4)(iii) to permit it to modify those non-
referred arrangements to comply with the statute in the event that 
circumstances associated with a grant for a like-kind purchase indicate 
that application of the current protective arrangement would no longer 
satisfy the statute's requirements. Because referrals are not permitted 
for like-kind grants, and situations may arise where the existing 
protections are not statutorily sufficient, the Department must retain 
the authority to unilaterally apply protections as an alternative to 
referral. Situations that may give rise to the Department's need to 
make a unilateral change to existing protections include a change to 
the framework of state or local law, a court decision interpreting 
existing protections, or where the Department's periodic review of an 
agreement has disclosed that required protections are missing or 
inadequate based on current policies and standards. This retention of 
authority to unilaterally modify non-referred arrangements to ensure 
statutory sufficiency is consistent with the Department's treatment of 
other grant programs subject to non-referral, see, e.g. , 29 CFR 
215.3(a)(4), 215.3(b)(3), and is necessary in order to ensure that the 
Department certifies only those arrangements that are statutorily 
sufficient. In some circumstances the Department will need to modify 
protections to simultaneously ensure satisfaction of the statutory 
requirements and to conform to the SAFETEA-LU requirement that 
certification be made without referral. However, in response to 
comments by labor organizations suggesting that the proposed language 
was too broad and created uncertainty, the Department will delete the 
word ``any,'' which may be broadly construed, from the proposed Section 
215.3(a)(4)(iii) so that the final Guidelines limit the Department to 
``make necessary modifications to the existing protections to ensure 
that the requirements of the statute are satisfied.'' See Section 
215.3(a)(4)(iii).
    The Department agrees with the comment, noted above, suggesting 
that imposed changes should be made without prejudice to any future 
objections or proposals by the parties. Therefore, should the 
Department determine unilaterally that changes are necessary to 
arrangements applicable to a particular like-kind grant in order to 
satisfy the requirements of the statute in the circumstances presented, 
those changes will be made without prejudice to future objections or 
proposals of either of the parties in response to subsequent referrals 
for new grants. Accordingly, where subsequent referrals contain the 
unilateral modifications made by the Department pursuant to Section 
215.3(a)(4)(iii), parties to the referral may object at that time to 
the proposed terms, including any terms that had been unilaterally 
modified by the Department. This approach is consistent with the 
Department's practice, in which it fully considers any objections to 
referral terms, even when those terms have been previously imposed by 
the Department. Where objections are deemed sufficient in subsequent 
referred protections, the Department will require negotiations to 
permit the parties to develop alternative employee protections for 
application to the subsequently referred grant.

B. Processing of Amendatory Grant Applications

    The Department has proposed amending section 215.5 of the 
guidelines to conform to section 3031 of SAFETEA-LU, which provides 
that ``grant amendments which do not materially amend existing 
assistance agreements'' will not be subject to the Department's 
referral procedures. See 49 U.S.C. 5333(b)(4). The proposed guidelines 
were designed to reflect this statutory provision, and to clarify the 
Department's treatment of grant amendments that, on the one hand, 
result in material changes to existing assistance agreements and those 
that, on the other hand, make only immaterial changes to such 
agreements. The proposed revision also identified as examples some 
types of grant amendments that would be certified without referral. As 
set out below, in response to certain comments from the public, the 
Department has made some revisions to proposed section 215.5.
    As explained in the NPRM, the statutory change regarding 
certification of grant amendments essentially codifies the Department's 
current practice, and requires the Department to distinguish between 
``material'' grant amendments that will be referred and ``immaterial'' 
grant amendments that will be certified without referral.\1\ In

[[Page 47049]]

making the distinction in the NPRM, the Department focused on what 
constituted ``immaterial'' grant amendments, in large part because this 
term already appears in the Guidelines, which establish that the 
Department will certify ``immaterial'' grant revisions or amendments on 
the basis of the previously certified terms without referral. See 
current 29 CFR 215.5. In responding to the statute's now explicit 
requirement that the Department refer only those grant amendments that 
are ``material,'' and building on the presence of the term 
``immaterial'' in the Guidelines text, the Department proposed in the 
NPRM to add to the Guidelines several circumstances in which it 
appeared that ``immaterial'' changes were present. For reasons 
explained here, the Department has rejected this approach, and has 
revised Section 215.5 accordingly.
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    \1\ Under the Department's current practice, the FTA first 
determines, pursuant to that agency's grant administration 
authority, whether a proposed change or modification to an existing 
assistance agreement (the contract of assistance) constitutes a 
budget revision, an administrative amendment, or a grant amendment, 
based on the FTA's own criteria it has established for such 
categories. See FTA Circular C 5010.1C: Grant Management Guidelines, 
Chapter 1.6 (Project Administration and Management: Grant 
Modifications), October 1, 1998; see also FTA Proposed Circular C 
5010.1D: Grant Management Requirements, Chapter 3.4 (Grant 
Administration: Grant Modifications), September 28, 2007. Following 
that categorization, the FTA then transmits only grant amendments to 
the Department for processing, in accordance with the statute and 
the Department's guidelines. Once grant amendments are received from 
the FTA for processing, the Department reviews each grant amendment 
to determine whether, as the statute now explicitly requires, it 
``materially amend[s] existing assistance agreements [,]'' which 
requires a referral, or does not ``materially amend existing 
assistance agreements[,]'' which requires certification by the 
Department without referral.
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    Several comments raised concerns about the Department's distinction 
between grant amendments that make material changes and those that make 
immaterial changes to existing assistance agreements. Two comments 
objected to the Department's description of the nature of an immaterial 
grant amendment. Comments submitted by the Amalgamated Transit Union 
(ATU) in response to the NPRM, October 15, 2007 (``ATU Comment''), page 
3; United Transportation Union, October 11, 2007 (``UTU Comment''), 
page 2. Additionally, one comment noted concern that ``the NPRM does 
not appropriately define the line between material and immaterial grant 
amendments'' and that ``the NPRM would actually allow material 
amendments without referral, which clearly violates the intent of 
Section 3031 of SAFETEA-LU.'' Comment submitted by Transportation 
Trades Department, AFL-CIO, October 15, 2007 (``TTD Comment''), page 2.
    As is the Department's current practice, Section 5333(b)(4) now 
explicitly requires the Department to review and assess the potential 
impact on employees and existing protections in order to distinguish 
between those grant amendments that may ``materially revise or amend 
existing assistance agreements,'' which will be referred, and those 
that do not. In order to clearly incorporate the statutory mandate into 
the Guidelines, the Department has revised proposed Section 215.5(a)(2) 
(now Section 215.5(a)(1) in the final Guidelines) to indicate that 
material changes are those that ``make changes to a project that may 
necessitate alternative employee protections.'' If a grant amendment 
makes changes to a project that may necessitate alternative employee 
protections in the circumstances presented, a new referral will be 
made. Conversely, those grant amendments that do not materially revise 
a grant in such a way that they would potentially affect employees will 
not be referred. The Department's past practice and administrative 
experience, upon which the Department will rely to administer 
certification of grant amendments, suggests generally that material 
changes that may necessitate alternative employee protections include 
those that constitute a significant, important or sizeable change to 
items or elements in the federally funded project.
    The Department agrees with those comments suggesting that the 
specific examples of ``immaterial changes'' included in the proposed 
guidelines did not provide useful guidance for either the Department or 
the regulated community in determining when referral would be 
necessary. The examples in the NPRM largely mirrored FTA criteria for 
categorizing the nature and type of grant modifications for that 
agency's determination of whether a change was, in fact, a ``grant 
amendment,'' and did not serve to assist with the concept of 
``material'' grant amendments as that term is used in Section 
5333(b)(4). Because conclusions regarding the impact of changes may 
vary in differing circumstances, those examples may not universally 
qualify as immaterial changes for the Department's statutory purposes. 
Moreover, the comments regarding the NPRM's examples of ``immaterial'' 
grant amendments reinforce the conclusion that the term itself is too 
dependent on specific facts to be capable of a more detailed definition 
in the abstract. Under these circumstances, hypothetical examples are 
more likely to result in confusion than clarity.
    Upon reconsideration of the approach to this subject in the NPRM, 
the Department has made three modifications to Section 215.5 (in 
addition to the change noted above regarding ``material'' amendments) 
to clarify the procedures under which grant revisions or amendments 
will be certified. First, as an organizational matter, the order of the 
two sub-paragraphs in subsection 215.5(a) have been switched, so that 
the initial subparagraph of the subsection addresses the issue of 
``material'' revisions or amendments. Second, the term ``immaterial'' 
has been deleted from Section 215.5, and final subparagraph (a)(2) 
instead addresses those cases in which ``an application amends in a 
manner that is not material'' a previously certified grant. Finally, 
those examples of immaterial changes to a grant have been deleted, and 
because each grant is fact-specific, the Department has concluded that 
including alternate examples of ``immaterial'' changes in the 
Guidelines would not assist in the administration of the program * * * 
See 29 CFR 215.5(a)(1) and (a)(2). As the Department does with all non-
referred grants, informational copies of those grant amendments not 
referred will be sent to the affected labor organizations.
    In addition, one comment notes that the proposed guidelines did not 
include a provision in this section for the Department to ``make any 
minimal modifications necessary to the protective terms where 
application of existing protective agreements would not satisfy the 
requirements of the statute in the circumstances presented.'' ATU 
Comment, page 3. Similar authority has been adopted for like-kind 
grants certified without referral, and comments suggested that such 
language would be appropriate in any instance where protections would 
be applied without referral. The Department has determined that such 
language is not necessary to ensure satisfaction of the requirements of 
the statute when grant amendments are processed by the Department. As 
noted above, where grants materially revise existing assistance 
agreements by making changes that may necessitate alternative employee 
protections in the circumstances presented, the Department will refer 
the grant amendment, and the parties will have the opportunity to 
address employee protective provisions that may not satisfy the statute 
in the circumstances presented. Where grant amendments make changes 
that require no alternate employee protections, then the Department 
need not retain authority to make unilateral modifications to employee 
protections. Under either process, the requirements of the statute will 
be assured, and there is no need for the Department's retention of this 
authority with regard to grant amendments.
    Finally, several comments indicated that a copy of applications for 
grant amendments that result in no referral must be provided to labor 
organizations. Consistent with the proposed guidelines, the Department 
confirms that its ``processing of these applications will be expedited 
and copies will be forwarded to interested parties.'' See 215.5(a)(2). 
In addition, the Department

[[Page 47050]]

will forward to service area unions any informational copies of budget 
revisions received from the Federal Transit Administration.

C. Special Warranty Procedures for Grant Applications for Other Than 
Urbanized Areas and Grant Applications for Over-the-Road Bus 
Accessibility Programs

    For grant applications under 49 U.S.C. 5311 for funding of transit 
operations in Other Than Urbanized areas, SAFETEA-LU now requires the 
use of a warranty as the sole mechanism for certification of employee 
protections, and eliminates the Secretary of Labor's option to waive 
the required certification. See 49 U.S.C. 5311(i).\2\ Prior to the 
enactment of SAFETEA-LU, the Department followed procedures contained 
in a ``Guidebook'' published in September 1979 governing the processing 
of small urban and rural grants. The Department is discontinuing use of 
the 1979 Guidebook, and has included in sections 215.3(a)(4)(i) and 
215.7 procedures to be used for the application of a warranty without 
referral when processing Other Than Urbanized and Over-the-Road Bus 
(OTRB) grants.\3\ The comments received by the Department raised 
several issues, and particularly addressed two primary issues 
concerning procedures used to bind State's subrecipients to terms of 
the Special Warranty and the application of alternative comparable 
arrangements when necessitated by requirements of the statute.
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    \2\ The Other Than Urbanized transit grant program authorized by 
49 U.S.C. 5311 was previously known as the ``small urban and rural 
program.'' For clarity and consistency, this program is generally 
referred to in this document as the Other Than Urbanized program and 
not by its section number in Title 49 of the U.S. code.
    \3\ The OTRB program was first established by Congress in 
section 3038 of TEA-21, Public Law No. 105-178, 112 Stat. 107 
(1998). It has been amended a number of times, most recently by 
section 3039 of SAFETEA-LU. The authority for the program currently 
appears in the Historical and Statutory Notes to 49 U.S.C. 5310. For 
clarity and consistency, the program is referred to in this document 
by its ``OTRB'' designation, rather than by citation to its public 
law number or the 49 U.S.C. 5310 note.
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    Regarding the subrecipients issue, the Department indicated in the 
NPRM that it will include a requirement in the new Special Warranty 
that the protective arrangements are binding upon any subrecipients 
assisted under the grant. Three comments expressed concern that the 
Department had eliminated the requirement contained in the Guidebook to 
have State agencies provide copies of assurances to the Department 
indicating each recipient had signed and understood the Special 
Warranty. One comment in particular noted that ``[e]nforcement of 
employee protections under such a provision would * * * be problematic 
at best and more likely a practical, or even legal, impossibility.'' 
ATU Comment, page 5. Another comment indicated that ``transportation 
labor urges the Department to establish procedures to guarantee that 
sub-recipients are bound to the protective arrangements, perhaps by 
continuing to require written assurances.'' TTD Comment, page 2. Still 
another comment indicated that the Department cannot ``bind third 
parties to arrangements simply by proclaiming they are bound in a 
Special Warranty that will be incorporated into the contract of 
assistance * * *.'' UTU Comment, page 3.
    In response to these comments, the Department notes that the former 
Special Warranty procedures required only that a State agency ``certify 
to the Department of Labor that each Recipient designated to receive 
transportation assistance under the Project has indicated in writing 
acceptance of the terms and conditions of the Warranty.'' Rural 
Transportation Employee Protection Guidebook, September 1979, page 13. 
Thus, the Department did not require fully executed copies of the 
Special Warranty from each subrecipient, but instead required only that 
a State agency submit certified lists of recipients that it indicated 
had signed the Warranty. Accordingly, the obligation to ensure that 
recipients had signed and were thus bound by the Special Warranty has 
long rested with the State agencies. The Department has not altered the 
State agencies' responsibility to ensure that its subrecipients are 
equally bound to the terms of the Special Warranty.
    In response to concerns noted above regarding a State's obligation 
to ensure that its subrecipients are bound to the terms of the Special 
Warranty, the Department clarifies its proposal in the NPRM that it 
will include language in the Special Warranty requiring the State 
agency (Grantee), which signs the contract of assistance, to obligate 
its subrecipients to the required protections as a condition precedent 
to the subrecipient's receipt of any funds under the contract of 
assistance. Thus, the requirement remains that a State agency must 
ensure that sub-recipients have agreed to be bound by the protective 
arrangements. That requirement will now be an explicit part of the 
Special Warranty, and the failure to comply with this provision may 
impact the State's eligibility for such funds. In addition, should a 
Grantee fail to bind a subrecipient, the alleged breach can be pursued 
in a state court. Therefore, the new procedure is an adequate, 
effective alternative to assuring that subrecipients are bound and 
their employees are aware that the protections of the Special Warranty 
are fully applicable.
    Regarding the ``alternative comparable arrangement procedures'' 
issue, the Department stated in the NPRM that ``as required under 
SAFETEA-LU, the Department will eliminate waivers and procedures to 
request alternative comparable arrangements.'' This statement raised 
concerns among several commenters. Some noted that although SAFETEA-LU 
eliminated procedures to waive application of the Special Warranty, the 
amendment did not require that the alternative comparable arrangements 
provision be removed. In addition, comments noted, some State agencies 
and subrecipients may be deemed ineligible for assistance if 
alternative warranty arrangements were not available.
    SAFETEA-LU specifies that employee protections will be applicable 
to Other Than Urbanized grants ``if the Secretary of Labor utilizes a 
special warranty that provides a fair and equitable arrangement to 
protect the interests of employees.'' 49 U.S.C. 5311(i). To clarify our 
statement in the NPRM, the Department interprets this statutory 
provision to preclude the development of alternate arrangements through 
special procedures established in the Guidelines. However, after 
considering comments, the Department has concluded that where a 
recipient is unable to satisfy the specific provisions in the Special 
Warranty because of a conflict with State or local law, the Department 
will make every effort to develop modifications to the Warranty that 
are necessary to ensure that the requirements of the statute are 
satisfied.
    This approach is consistent with the Department's residual 
authority, noted above in reference to like-kind grants, to make 
modifications to non-referred arrangements where necessary. Therefore, 
as with all non-referred arrangements that present compliance problems 
for grantees as the result of conflict with State or local law, parties 
must notify the Department in writing in advance of the Department's 
certification that modification to the terms of the Special Warranty 
may be necessary. In instances in which the Department makes necessary 
modifications to the Special Warranty for specific recipients or 
subrecipients, a supplementary certification letter will be sent to the 
FTA setting forth the alternative provisions to be included in

[[Page 47051]]

the contract of assistance between the recipient and FTA, by reference.
    Other comments concerning the new Special Warranty procedures 
addressed the omission of a provision in the proposed guidelines to 
ensure that potentially affected transit employees in the service area 
of Other Than Urbanized grants, in addition to those employees who may 
be affected by Over-the-Road Bus grants, are notified of their rights 
under the Special Warranty and receive copies of grant applications to 
facilitate the unions' administration of protections. This inadvertent 
oversight has been corrected in the final guidelines, which now state 
that the ``Department will notify labor organizations representing 
potentially affected transit employees of the approval of Other Than 
Urbanized and OTRB grants and inform them of their rights under the 
Special Warranty Arrangement.'' See Section 215.7(d)(2).
    Two comments note that proposed Section 215.7 states that the 
revised Special Warranty will be ``derived from the terms and 
conditions of the May 1979 Special Section 13(c) Warranty, and the 
Department's subsequent experience under 49 U.S.C. 5333(b).'' NPRM 
Section 215.7. These comments request that the Department clarify what 
it means to ``derive'' protections from the current Special Warranty, 
and that it also specify that the terms and conditions of any new 
Warranty Arrangement will be ``no less protective'' and ``offer no less 
protection'' than the version currently in place. ATU Comment, page 5; 
UTU Comment, page 3. While the terms and conditions of the Special 
Warranty will adopt much of the May 1979 Special Section 13(c) 
Warranty, some additional changes are needed to reflect processing 
differences under the new Guidelines, to create a self-contained 
document, and to update the language. Most of the planned changes are 
largely procedural and were previously described in the NPRM, such as 
the establishment of procedures necessary to bind subrecipients, the 
elimination of the need for unions to become a party to the Special 
Warranty, the elimination of the Department's finding of noncompliance 
in the Other Than Urbanized program, and the adoption of a dispute 
resolution procedure that ends the Department's involvement in claims 
arbitration. In response to concerns that the new Special Warranty must 
not be less protective than its predecessor, the Department will ensure 
that the provisions of the new Special Warranty provide appropriate 
protections for Other Than Urbanized and OTRB grants and continue to 
satisfy all the requirements of the statute.
    Two comments note that the Department has indicated that it will no 
longer make findings of non-compliance and will instead include a 
dispute resolution procedure to address compliance issues that arise 
under the Special Warranty. One comment indicates that ``provisions 
must be made for the Department to honor an arbitrator's ruling of non-
compliance and refuse further certifications to stop new funding from 
flowing to the recipient until evidence of compliance is presented to 
the arbitrator.'' ATU Comment, page 5. In the absence of such 
provisions, the commenter suggests that violators would be free of 
consequences resulting from the failure to abide by the Warranty. The 
Department has concluded that the inclusion of a standard labor 
arbitration dispute resolution procedure in the Special Warranty will 
ensure that there is a process in place to resolve disputes, and the 
arbitrator may direct compliance with the terms of the Warranty. A 
prevailing party to an arbitrator's ruling directing compliance with 
the terms of the Warranty can seek enforcement of that ruling in the 
appropriate state court.
    Three comments indicate that it is unclear how the Special Warranty 
is to be included in the contract of assistance. The proposed 
guidelines specified in section 215.7(c) that ``[t]he Federal Transit 
Administration will include the current version of the Special 
Warranty, through reference in its Master Agreement.'' The Master 
Agreement is included in each contract of assistance with a Grantee 
receiving Federal assistance and the reference in the Master Agreement 
will include language which specifies that the recipient agrees to 
comply with the terms and conditions of the Special Warranty 
Arrangement which is most current as of the date of execution of the 
contract of assistance, and any alternative comparable arrangements 
specified by the Department of Labor for application to the recipient's 
grants.. Inclusion of this language in the Master Agreement will ensure 
that the protections are binding on the Grantee and the specific 
reference to Special Warranty Arrangement that is most current as of 
the date of the execution of the contract of assistance will eliminate 
confusion about which terms and conditions were applied if changes to 
the Warranty are made in the future.
    Several comments raised concerns regarding the procedures the 
Department will use to identify relevant labor organizations as a 
result of the Department's notification provision in Section 
215.7(d)(2) of the proposed guidelines (now Section 215.7(c)(2) of the 
final guidelines). In the past, the Department has relied on 
information contained in the grant applications to identify labor 
organizations that may be affected by grants and should be notified of 
Federal funding of projects, and such information has generally proven 
sufficient to make such identification. Accordingly, this information 
will be employed to make the notifications required in Section 
215.7(c)(2). Other comments expressed doubt that, as asserted in the 
NPRM, the changes to the Special Warranty procedures will advance 
administrative efficiency. In response, the Department notes a variety 
of changes that it believes will improve the efficiency of the Special 
Warranty program and streamline the Department's processes: the 
provision establishing that the FTA will incorporate required employee 
protections into the contract of assistance through the Master 
Agreement and proceed with funding of Other Than Urbanized and Over the 
Road Bus grants without awaiting the Department's prior approval; the 
elimination of procedures to request to become a party to the warranty; 
the elimination of waiver procedures; and establishment of third-party 
neutral arbitration of disputes involving labor organizations, among 
others.

D. Unified Protective Arrangement

    In the NPRM, the Department proposed amending section 215.3(b)(1) 
and (2) of the guidelines to implement use of a unified protective 
arrangement (UPA) for both operating and capital grants except in 
certain situations set forth in the guidelines.\4\ The use of the UPA 
was primarily proposed because, over the past 12 years, administrative 
modifications to the Department's Operating and Capital Assistance 
Arrangements have rendered the two documents virtually identical to 
each other. As a result, the Department determined that two separate 
arrangements were no longer necessary, and administrative efficiency 
would be improved through the application of a single arrangement 
applicable to both operating and capital assistance. Application of a 
single UPA to future

[[Page 47052]]

grants will simplify the preparation of referrals, expedite processing 
of grant applications, and, most importantly, continue to satisfy the 
requirements of the statute.
---------------------------------------------------------------------------

    \4\ The NPRM indicated that the Department was proposing to 
amend sections 215.3(b)(2) and (b)(3) to address the UPA. The 
changes in the guidelines, however, are in sections (b)(1) and 
(b)(2), and the conflicting section (b)(3) has been deleted in the 
final guidelines. In addition, these changes require a corresponding 
revision to Section 215.3(d)(7), in order to delete references to 
``Sec. Sec.  215.3(b)(2) and 215.3(b)(3)'' and to substitute 
``215.3(b)(1)'' for those references.
---------------------------------------------------------------------------

    To clarify those circumstances in which previously certified 
arrangements will continue to be referred, and those circumstances in 
which the UPA will be referred, the Department has made organizational 
and substantive revisions to Sections 215.3(b)(1) and (b)(2). Section 
215.3(b)(1) now sets forth the general proposition that the Department 
will refer to applicants with previously certified arrangements, and 
new applicants that develop and submit protections to the Department 
before applying for assistance, those protective terms and conditions 
that are appropriate to the new grant and are set by:
    (1) A negotiated agreement developed and executed by the parties or 
the parties' adoption of the Model Agreement;
    (2) Terms adopted by a state or local government based on agreement 
between the grantee and affected employees, where the grantee is a 
state or political subdivision subject to legal restrictions on 
bargaining collectively with employee organizations;
    (3) A determination of protective terms by the Department that 
modifies in whole or in part negotiated or adopted protections; or
    (4) A standardized arrangement (either the Operating or Capital 
Arrangement) that has been modified through agreement or determination 
to include provisions that are more protective than the UPA.

See 29 CFR 215.3(b)(1). In order to improve the logical flow of this 
paragraph in the guidelines, the placement of the third and fourth 
categories in Section 215.3(b)(1) have been switched from the order set 
out in the NPRM. The Department anticipates that applicants with 
previously certified arrangements that fall into the categories 
identified in 215.3(b)(1) will continue to constitute the majority of 
the Department's referrals. The Department further anticipates that 
there will be very few situations that fall under the fourth type of 
arrangement listed above. An additional organizational change made was 
to Section 215.3(b)(2), which now states that in all other 
circumstances, the Department will refer the UPA. See revised Section 
215.3(b)(1) and (2).
    In addition to the organizational change, the Department has 
concluded that a substantive revision was required to Section 
215.3(b)(1) (formerly proposed 215.3(b)(2)) because the standard 
originally proposed--i.e., whether a provision in an arrangement 
modified by negotiation or Department determination, was ``addressed 
by'' the UPA--was ambiguous and would permit the substitution of the 
UPA in those cases in which the parties' may have adopted unique 
provisions that may be ``more protective than'' the UPA. Similarly, the 
language may have permitted the substitution of the UPA for a 
negotiated agreement or adopted instrument where the Department had 
made a determination addressing one issue in that otherwise unique 
agreed upon document. This result was not intended, and so the standard 
for the use of the UPA in those cases in which the applicant has 
protective terms described in Section 215.3(b)(1)(iii) and (iv) has 
been modified accordingly.
    A number of comments raised concerns regarding the continued 
application of previously certified arrangements, and whether they 
would be replaced in new grants by new arrangements. With the 
implementation of these guidelines revisions, in those cases in which 
the applicant has been previously certified on the basis of the 
Operating or Capital Arrangements, and there has been no modification 
to that previously certified arrangement through negotiation or 
Departmental determination, the UPA will be referred to the parties for 
the next grant. Section 215.3(b)(2). In those cases in which the 
applicant has been previously certified on the basis of the Operating 
or Capital Arrangement that has been modified either through 
negotiation or Departmental determination, and that modification 
contains a protective provision with an equivalent level of protection 
as a provision in the UPA, then the UPA will form the basis of the 
referral for the next grant. Section 215.3(b)(2). If the applicant has 
been previously certified on the basis of the Operating or Capital 
Arrangement, and any negotiated or Department-imposed modification 
thereto contains a protective provision that exceeds the level of 
protection established by a similar provision in the UPA, then the 
previously certified arrangement and not the UPA will be referred for 
the next grant because that arrangement is unique to those parties. 
Section 215.3(b)(1)(iv). The Department considers to be relatively rare 
those cases in which a grantee has been previously certified on the 
basis of Operating or Capital arrangement with more protective 
negotiated or Departmentally determined modifications. If the grantee 
has been previously certified based on protective terms and conditions 
that include, in whole or in part, a Departmental determination, then 
the previously certified terms and conditions and not the UPA will be 
referred for the next grant, again because those protections are unique 
to those parties. Section 215.3(b)(1)(iii). Finally, if the grantee's 
previous certifications are based on either a negotiated agreement, 
adoption of the Model Agreement, or adoption through resolution or 
other means by a state or local government of protective terms agreed 
to by the parties, those protections are unique to the parties and will 
form the basis of the Department's referral for the grantee's next 
grant. Section 215.3(b)(1)(i) and (ii). The same is true for new 
applicants that present to the Department proposed terms for 
certification based on either a negotiated agreement, adoption of the 
Model Agreement, or adoption through resolution or other means by a 
state or local government of protective terms agreed to by the 
parties--the Department's referral in those cases will be based on 
those proposed terms and not the UPA. Section 215.3(b)(1).
    Three comments indicated that there was support for a UPA, and for 
elimination of the sole provider clause from the terms and conditions 
to be applied. The Department received no explicit objections to 
elimination of the sole provider clause, but we presume that labor 
organizations that objected to the development of the UPA in general 
objected sub silentio to the elimination of the sole provider clause. 
The primary goal addressed by the use of the UPA is to substitute one 
instrument in place of the two instruments previously used. In 
addition, the terms of the UPA are intended to uniformly apply 
statutorily sufficient terms and conditions to future grants, where 
warranted. As a result, the UPA will exclude the ``sole provider'' 
clause, which has been determined by the Department to be unnecessary 
in ensuring compliance with the statute.
    Some comments indicated that certifying new arrangements for grant 
applicants that are already a party to Department of Labor-crafted 
arrangements would not create efficiencies in administration of the 
employee protections and would add to the number of arrangements to be 
administered, not reduce their proliferation. Currently, each time a 
new union is recognized, service is expanded to areas involving new 
unions, or a new project is proposed, additional operating and/or 
capital arrangements are put in place to accommodate the new unions or 
new service. Applying the UPA will reduce

[[Page 47053]]

this proliferation of operating and capital arrangements through 
application of the same arrangement to all those unions that are using 
standard Department of Labor-crafted arrangements. As new grant 
applications are submitted, the Department will refer the UPA rather 
than the various post-1996 Operating and Capital Arrangements. As a 
result, the administrative burden for the regulated community, as well 
as the Department, will decrease over time.
    Several comments expressed concerns that the Department's proposed 
adoption of the UPA is not consistent with the policy that the 
Department adopted when it revised the guidelines in 1996. One comment 
indicated that the earlier guidelines ``sought to preserve all terms, 
including those never negotiated or in bilateral agreements.'' ATU 
Comment, page 7. Another comment indicated ``it is improper to 
unilaterally negate arrangements that were negotiated in good faith or 
developed by DOL determination following briefing by the parties.'' 
Comment submitted jointly by the American Train Dispatchers 
Association, et al. (``ATDA, et al. comment'') in response to NPRM, 
October 15, 2007, page 3. The Department recognizes that the approach 
of applying the UPA in lieu of previously certified standard protective 
arrangements, i.e., the Operating or Capital Arrangements, departs from 
the practice established under the 1996 guidelines. Pursuant to the 
1996 guidelines revisions, new applicants and applicants for which 
previously certified arrangements were not appropriate to the pending 
project received a referral based on either the Operating Arrangement 
or the Capital Arrangement, and that arrangement would continue to be 
applied to subsequent grants unless the parties objected and the 
provisions were renegotiated. This system led to the proliferation of 
multiple arrangements and created a system that is currently difficult 
to administer. The UPA was developed in order to consolidate 
protections into one document that satisfies all of the statutory 
requirements. This will eventually reduce the grantees' need to 
administer multiple sets of standard arrangements for unions 
representing affected employees in the service area of a project. Use 
of the UPA will also benefit International Unions, because their 
oversight of protections applied for their local unions should be 
substantially more uniform. Moreover, application of the UPA in lieu of 
existing standard arrangements does not ``unilaterally negate'' the 
existing protective arrangements, because those arrangements will 
continue to be in force for the projects for which they were certified. 
Only grantees with previous certifications that do not fall into one of 
the categories contained in Section 215.3(b)(1) will have the UPA 
referred as a standard protective arrangement.
    The Department's administration of the program will also be 
improved using the UPA. Initially, as one comment suggested, the 
Department's decisions regarding referrals based on the UPA will ``call 
for a level of discretion in individual cases that will render the 
process more, rather than less complex.'' ATDA, et al. comment, p. 3. 
However, once the exceptions have been identified, processing of future 
grants will be expedited considerably. It will be easier to keep track 
of the appropriate protections to be included in future referrals and 
the parties to those protections. In the long run, there will be fewer 
arrangements for the Department and the regulated community to 
administer, and it will be easier to change a standard arrangement such 
as the UPA to reflect current program policies and statutory standards 
applicable to grants whenever necessary. As the Department previously 
indicated, it will also provide administrative certainty for the 
applicant and union because, with the exception of existing negotiated 
agreements and certain arrangements which are the product of 
negotiations or determinations, only the UPA will be applied to any 
particular grant.
    Finally, one comment expressed concern about the referral of the 
UPA should one or more provisions within it conflict with State law. 
The Department has determined that a State law conflict with one or 
more provisions of the UPA's protective terms and conditions will not 
render the entire document ``inappropriate'' for referral. In the event 
that a State law conflict is raised in connection with the provisions 
in the UPA, the Department will resolve such a conflict in the same 
manner that it currently does--by negotiation or Departmental 
determination of a substitute term required as the result of a 
sufficient objection raised under Section 215.3(d)(3).

E. Exclusion of Over-the-Road Bus Accessibility Program From the 
Department's Referral Process

    The Department proposed amending Section 215.3(a)(4) of the 
guidelines to specify that OTRB grants will no longer be subject to its 
referral process, but instead will be certified on the basis of the 
Special Warranty. The NPRM indicated that by eliminating referrals for 
OTRB grants and using the Special Warranty for certification, the 
Department intended to fully implement a requirement in the legislation 
establishing the OTRB program (Transportation Equity Act for the 21st 
Century ``TEA-21'', Public Law 105-178 (1998)) that OTRB grants ``shall 
be subject to all of the terms and conditions applicable to 
subrecipients who provide intercity bus transportation under section 
5311(f) of title 49.'' Section 3038(f) of TEA-21. The Department 
reasoned that because grants under 49 U.S.C. 5311(f) are certified on 
the basis of the Special Warranty without referral to the parties, TEA-
21 contemplated that OTRB grants would be certified on the basis of the 
Special Warranty without referral.
    Three comments challenged the Department's stated interpretation of 
TEA-21. Commenters suggested that in the absence of specific 
exclusionary language, TEA-21 cannot be read to preclude the use of the 
referral process for OTRB grants, particularly in light of the fact 
that Congress subsequently employed specific exclusionary language in 
SAFETEA-LU with regard to the Other Than Urbanized grant program.
    Upon reconsideration, the Department agrees with those comments 
stating that TEA-21 does not require OTRB grants to be certified 
without referral. Indeed, in 1999, when finalizing revisions to the 
Guidelines following the passage of TEA-21, the Department concluded 
that TEA-21 requires only that OTRB grants be subject to certification 
by the Secretary under Section 5333(b), and that ``neither th[at] 
statute nor [its] legislative history specify the procedures for 
processing these grants.'' See 64 FR 40,990, 40,992 (July 28, 1999). 
Accordingly, ``the Department has flexibility to develop and implement 
procedures appropriate to carry out its section 5333(b) 
responsibilities'' as to these grants. Ibid. In employing its 
administrative discretion under TEA-21, the Department at that time 
decided to employ the use of its referral procedures to OTRB grants.
    Although the Department agrees that TEA-21 does not require OTRB 
grants to be certified without referral, the Department nevertheless 
adheres to its proposal in the NPRM that such grants will be processed 
in that manner. While one comment appears to argue that TEA-21 mandates 
the use of referral (ATU Comment, page 7), such an argument is premised 
on the incorrect

[[Page 47054]]

assumption, which the Department rejected in 1999, that the ``terms and 
conditions'' guaranteed by TEA-21 include the referral procedure. Thus, 
the comment has provided no basis for concluding that referral is 
required. As a result, in employing its discretion, the Department now 
concludes that use of the Special Warranty without referral is the 
preferred policy in the OTRB context. As explained in the NPRM, the 
Department's experience with the OTRB program has led to the conclusion 
that use of the Special Warranty will improve administration of the 
program. See 72 FR at 52,522. Use of the Warranty streamlines the 
Department's processing of grants that have limited potential for 
adversely affecting employees and historically have been the subject of 
very few objections, while continuing to ensure that the requirements 
of the statute are satisfied through application of a Special Warranty. 
Accordingly, the Department will administer grants under the OTRB 
program through application of the warranty arrangement set forth in 
Section 215.7, which also provides procedures to be followed for the 
Other Than Urbanized program. See Section 215.7.

F. Administrative Changes

    Several adjustments were proposed in the NPRM to reflect current 
administrative practices.
    First, the Department has eliminated language contained in Section 
215.2 of the guidelines indicating that it will process applications 
that are in ``preliminary'' form. This section now requires that 
applications ``be in final form,'' based on the Department's 
determination that its administrative processes should not be engaged 
until the grant application reflects the actual project activities to 
be undertaken. Although all project activities must be firmly 
established, it is not necessary that project funding be available for 
the entire grant before the Department processes its certification of 
the grant. In addition, Section 215.8 will be modified to add an e-mail 
address and correct the room number of the Division of Statutory 
Programs office. Finally, the text of Section 5333(b) of the Federal 
transit law, which was set out in its entirety in Section 215.1 of the 
current Guidelines, has been removed from that section in the Final 
Guidelines so that modifications of the Guidelines will not be 
necessary each time statutory changes are enacted. The Department 
received no comments addressing these proposed administrative changes. 
As a result, the Final Guidelines will incorporate these revisions as 
proposed in the NPRM.
    As part of its administrative changes, the Department proposed to 
amend Section 215.6 to further explain how interested parties may 
utilize the July 23, 1975 National (Model) Agreement. In particular, 
the Department proposed to add procedures in Section 215.6, comparable 
to those in paragraphs 26, 27, and 28 of the Model Agreement itself, by 
which applicants and unions may become a party to or withdraw from the 
Model Agreement. One comment objected to the inclusion of these 
National Agreement paragraphs as untimely and unnecessary, indicating 
that they provide an ``incomplete explanation containing only a 
fraction of the procedures under the National Agreement.'' ATU Comment, 
page 8. Furthermore, it was indicated that additional parties no longer 
sign on to the National Agreement, and that those that are a party 
require no additional explanation and have access to the National 
Agreement itself or can access it through the Department's Web site.
    The Department's proposed guidelines were intended to increase 
awareness that the Model Agreement remains an appropriate instrument 
for the parties to agree to and apply to operating assistance projects. 
If grant recipients choose to do so, they, along with labor 
organizations representing employees in the service area, may continue 
to sign on to the Model Agreement and the Department will utilize this 
as a basis for referral of operating grants. Upon reconsideration, the 
Department concludes that it is not necessary to include in the Final 
Guidelines procedures regarding becoming a party to or withdrawing from 
the Model Agreement, particularly because the entire Model Agreement is 
available on the Department's Web site. Accordingly, section 215.6 of 
the guidelines will remain unchanged from its current version, except 
to make a technical correction so that this section accurately refers 
back to a revised portion of Section 215.3, and to reflect the current 
name of the American Public Transportation Association. See 29 CFR 
215.6.

G. Las Vegas Decisions

    Several comments addressed the Department's discussion of Section 
3031 of SAFETEA-LU, which directs the Department to follow certain 
substantive principles enunciated in the Department's decisions for 
grant NV-90-X021 (decision of September 21, 1994, supplemented by 
decision of November 7, 1994, also called the ``Las Vegas decisions'') 
when making determinations involving assurances of employment when one 
private transit bus service contractor replaces another through 
competitive bidding. See 49 U.S.C. 5333(b)(5). The Department stated in 
the NPRM that because the Guidelines are procedural in nature, and do 
not encompass discussion governing the adjudication of substantive 
rights of parties, this provision of SAFETEA-LU would not be addressed 
in the revisions of the Guidelines.
    In response to the NPRM, two comments requested that the Department 
address the Las Vegas decisions in its final rule, one suggested that 
the Department use only the precise language of the decisions, and the 
other suggested that the Department fully analyze and explain those 
decisions in the final rule. One comment in particular, submitted on 
behalf of the Regional Transportation Commission of Southern Nevada 
(``RTC''), took issue with the Department's very limited description of 
the Las Vegas decision in the NPRM and asserted that the Department had 
``mischaracterized'' and ``fail[ed] to fairly and honestly explain the 
principles'' of the Las Vegas decisions. Comment of RTC submitted in 
Response to NPRM, Oct. 15, 2007, at 4. Although the RTC comment urges 
the Department to set forth a substantive interpretation of the Las 
Vegas decisions, the comment does not discuss the Department's primary 
justification for not addressing the decisions' principles in the 
guidelines--i.e., the Department's guidelines have, since 1978, been 
intended only to establish procedures governing the efficient 
certification of transit grants and not substantive interpretation of 
49 U.S.C. 5333(b) guarantees. Moreover, the Department's brief 
discussion of the Las Vegas decisions, in the context of explaining why 
the Department would not address them in its procedural guidelines, was 
not intended to constitute complete guidance on, or interpretation of, 
the principles articulated in those decisions. Thus, it is unnecessary 
to join issue on the question whether the Department mischaracterized 
those principles in the NPRM. Parties to Departmental determinations, 
in which the Las Vegas principles are relevant, will be free to present 
argument about the principles' meaning and application, and those 
arguments will be considered and resolved with reference to specific 
facts presented by that existing case or controversy. Thus, the 
Department adheres to its conclusion in the NPRM that these procedural 
guidelines should not address the Las Vegas decisions,

[[Page 47055]]

and that application of the Las Vegas principles is better carried out 
on a case by case basis. Although not incorporated in these Guidelines, 
the Department, of course, will adhere to the statutory mandate 
contained in 49 U.S.C. 5333(b)(5). The Department's Las Vegas 
determinations, and subsequent determinations made based on principles 
set forth in the Las Vegas determinations, will be available for review 
on the Department's Web site.

H. Other Comments Addressing Issues That Exceed the Scope of Revisions 
Proposed in the NPRM

    The Department received comments on issues that exceed the scope 
and nature of the revisions made to the Guidelines in the NPRM. For 
instance, one commenter suggested that the Department revise the 
criteria used for the determination of sufficiency of objections under 
Section 215.3(d)(3), and include in those criteria ``court decisions, 
state law, or age of the referred protective arrangement.'' Comment 
submitted by Jim Seals Consulting Services in response to the NPRM, 
October 15, 2007, page 1.
    Another comment requested that the Special Warranty be applied to 
Job Access and Reverse Commute (``JARC'') grants serving populations 
under 200,000 to expedite processing of these grants because of their 
similarity to grants under the Other than Urbanized program. The rural 
JARC program is processed by the Department under Section 
215.3(a)(4)(ii) without referral to affected labor organizations on the 
basis of existing agreements or Department of Labor-crafted protective 
arrangements, as appropriate.
    The Department appreciates guidance offered by these comments, but 
because no proposals were made regarding these topics, they are beyond 
the scope of the revisions contemplated by the NPRM, and will not be 
considered at this time.

III. Regulatory Procedures

Executive Order 12866

    This final rule has been drafted and reviewed in accordance with 
Executive Order 12866, section 1(b), Principles of Regulation. The 
Department has determined that this rule is not a ``significant 
regulatory action'' under Executive Order 12866, section 3(f), 
Regulatory Planning and Review. The Department has also determined that 
this rule is not ``economically significant'' as defined in Section 
3(f)(1) of Executive Order 12866. Therefore, the information enumerated 
in section 6(a)(3)(C) of the order is not required.

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601, et 
seq., federal agencies must consider the impact of their rules on small 
entities. However, the requirements of the RFA apply only to rules that 
must be promulgated pursuant to notice and comment procedures under 
Section 553(b) of the Administrative Procedure Act (``APA''), 5 U.S.C. 
553(b). 5 U.S.C. 603(a). Section 553(a) of the APA exempts from notice 
and comment rulemaking interpretative rules, general statements of 
policy, or rules of agency organization, procedure or practice. 5 
U.S.C. 553(a).
    Under the Federal transit law, the Department is charged with the 
duty to administer the statutory grant certification process, and 
therefore must issue procedural rules to establish standards to 
effectuate this Congressionally delegated authority. This final rule 
establishes such procedural standards, and therefore is exempt from 
notice and comment rulemaking under Section 553(a) of the APA.\5\ As a 
result, this rule is also exempt from the requirements of the RFA. The 
Assistant Secretary for Employment Standards has certified this 
conclusion to the Chief Counsel for Advocacy of the Small Business 
Administration.
---------------------------------------------------------------------------

    \5\ Although the rule need not be promulgated pursuant to notice 
and comment procedures, the Department has elected to use those 
procedures in order to obtain valuable input from the regulated 
community and to increase government transparency and 
accountability.
---------------------------------------------------------------------------

Unfunded Mandates Reform

    Executive Order 12875--This rule will not create an unfunded 
Federal mandate upon any State, local or tribal government.
    Unfunded Mandates Reform Act of 1995--This rule will not include 
any Federal mandate that may result in increased expenditures by State, 
local, and tribal governments, in the aggregate, of $100 million or 
more, or in increased expenditures by the private sector of $100 
million or more.

Paperwork Reduction Act

    These Guidelines contain no new information collection requirements 
for purposes of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.).

Small Business Regulatory Enforcement Fairness Act of 1996

    A. This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996. This rule 
will not result in an annual effect on the economy of $100,000,000 or 
more; a major increase in costs or prices; or significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of the United States-based companies to 
compete with foreign-based companies in domestic and export markets.
    B. Consistent with the Small Business Regulatory Enforcement 
Fairness Act of 1996, the Department will, prior to the rule's 
Effective Date, submit to Congress a report regarding the issuance of 
today's final rule. The report will note the Office of Management and 
Budget's determination that this rule does not constitute a ``major 
rule'' under the Act. 5 U.S.C. 801, 805.

Congressional Review Act

    Consistent with the Congressional Review Act, 5 U.S.C. 801, et 
seq., the Department will submit to Congress and the Comptroller 
General of the United States a report regarding the issuance of this 
Final Rule prior to the effective date set forth at the outset of this 
document.

List of Subjects in 29 CFR Part 215

    Grant administration; Grants--transportation; Labor-management 
relations; Labor unions; Mass transportation.

0
In consideration of the foregoing, the Department of Labor, Office of 
Labor-Management Standards, hereby amends part 215 of title 29 of the 
Code of Federal Regulations as set forth below.

PART 215--GUIDELINES, SECTION 5333(b), FEDERAL TRANSIT LAW

0
1. The authority citation for part 215 is revised to read as follows:

    Authority: Secretary's Order No. 4-2007, 72 FR 26159, May 8, 
2007.


0
2. Section 215.1 is revised to read as follows:


Sec.  215.1  Purpose.

    The purpose of these guidelines is to provide information 
concerning the Department of Labor's administrative procedures in 
processing applications for assistance under the Federal Transit law, 
as codified at 49 U.S.C. chapter 53.


Sec.  215.2  [Amended]

0
3. Section 215.2 is amended by removing ``may be in either preliminary 
or final form'' and adding in its place ``must be in final form''.

0
4. Section 215.3 is amended as follows:
0
a. Revise paragraphs (a)(3), (a)(4), and (b);
0
b. Amend paragraph (d)(7) by removing ``Sec. Sec.  215.3(b)(2) and

[[Page 47056]]

215.3(b)(3)'' and adding in its place ``215.3(b)(1)''.
    The revisions read as follows:


Sec.  215.3  Employees represented by a labor organization.

    (a) * * *
    (3) If an application involves a grant to a state administrative 
agency or designated recipient that will pass assistance through to 
subrecipients, the Department will refer and process each 
subrecipient's respective portion of the project in accordance with 
this section. If a state administrative agency or designated recipient 
has previously provided employee protections on behalf of subrecipients 
in accordance with the terms of a negotiated agreement, the referral 
will be based on those terms and conditions.
    (4) The referral procedures set forth in paragraphs (b) through (h) 
of this section are not applicable to the following grants:
    (i) Grants to applicants for the Over-the-Road Bus Accessibility 
Program, and grant applications for the Other Than Urbanized Program; a 
special warranty will be applied to such grants under the procedures in 
Sec.  215.7.
    (ii) Grants to applicants serving populations under 200,000 under 
the Job Access and Reverse Commute Program or grants to capitalize 
State Infrastructure Bank accounts under the State Infrastructure Bank 
Program.
    (iii) Grants involving only capital assistance for replacement of 
equipment and/or facilities of like-kind; these will be certified by 
the Department without referral on the basis of existing agreements or 
the Unified Protective Arrangement as referenced in paragraphs (b)(1) 
or (b)(2) of this section. Where application of the existing protective 
agreement(s) or the Unified Protective Arrangement would not satisfy 
the requirements of the statute in the circumstances presented, the 
Department will make necessary modifications to the existing 
protections to ensure that the requirements of the statute are 
satisfied.
    (5) The Department will notify labor organizations representing 
potentially affected transit employees of the certification of grants 
without referral under paragraph (a)(4) of this section and inform them 
of their rights under the applicable protective arrangements.
    (b) Upon receipt from the Federal Transit Administration of an 
application involving affected employees represented by a labor 
organization, the Department will refer a copy of the application and 
proposed terms for certification to that organization and to the 
applicant, and will also provide a copy to subrecipients with unions in 
their service area.
    (1) For applicants with existing protections the Department's 
referral will be based on those protective terms and conditions that 
are appropriate to the grant and are set by:
    (i) A signed negotiated agreement or formal acceptance of the July 
23, 1975 National (Model) Agreement;
    (ii) Agreed-upon terms adopted by a State or local government 
through a resolution or similar instrument;
    (iii)) A determination of protective terms by the Department that 
modifies in whole or in part negotiated or adopted protections; or
    (iv) A protective arrangement that has been modified to include 
provisions that are more protective than the Unified Protective 
Arrangement referred to in paragraph (b)(2) of this section.
    (2) For applicants without protective terms and conditions set by 
an arrangement described in paragraph (b)(1) of this section, the 
referral will be based on the terms and conditions of the Unified 
Protective Arrangement.
* * * * *

0
5. Section 215.5 is revised to read as follows:


Sec.  215.5  Processing of amendments.

    (a) Grant modifications in the form of grant amendments will be 
transmitted by the Federal Transit Administration to the Department for 
review. Applications amending a grant for which the Department has 
already certified fair and equitable arrangements to protect the 
interests of transit employees affected by the project, will be 
processed by the Department following one of the two procedures 
described in paragraphs (a)(1) and (2) of this section.
    (1) When an application amends a grant for which the Department has 
previously certified fair and equitable arrangements and the amendment 
makes changes to a project that may necessitate alternative employee 
protections, the Department will conclude that the amendment materially 
amends the existing assistance agreement. The Department will refer 
and/or process the labor certification provisions of such an amended 
grant according to procedures specified under Sec. Sec.  215.3 and 
215.4, as appropriate.
    (2) When an application amends in a manner that is not material a 
grant for which the Department has already certified fair and equitable 
arrangements, the Department will, on its own initiative and without 
referral to the parties, certify the subject grant on the same terms 
and conditions as were certified for the project as originally 
constituted. The Department's processing of these applications will be 
expedited and copies will be forwarded to interested parties.
    (b) Budget Revisions that make minor changes within the scope of 
the existing grant agreement and do not require a Federal Transit 
Administration grant amendment, as set forth in Federal Transit 
Administration guidance, will be covered under the Department's 
original certifications.


Sec.  215.6  [Amended]

0
6. Section 215.6 is amended as follows:
0
a. Remove ``paragraph (b)(3)(i)'' and add in its place ``paragraphs 
(b)(1)(i) and (b)(2)'';
0
b. Following ``American Public Transit Association'' add ``(now known 
as the American Public Transportation Association)''.

0
7. Section 215.7 is amended as follows:
0
a. Remove ``(b)(3)(ii)'' and add ``(b)(2)'' in its place;
0
b. Remove the phrase ``small urban and rural program under section 5311 
of the Federal Transit Statute'' and add in its place ``Other Than 
Urbanized program''.
0
c. Designate the existing text as paragraph (a) and add two sentences 
to the end; and
0
d. Add new paragraphs (b) and (c).
    The revisions and additions read as follows:


Sec.  215.7  The Special Warranty.

    (a) * * * The Special Warranty Arrangement applicable to OTRB and 
Other Than Urbanized grants will be derived from the terms and 
conditions of the May 1979 Special Section 13(c) Warranty, and the 
Department's subsequent experience under 49 U.S.C. 5333(b). From time 
to time, the Department may update this Special Warranty Arrangement to 
reflect developments in the employee protection program.
    (b) The requirements of 49 U.S.C. 5333(b) for OTRB and ``Other Than 
Urbanized'' grants are satisfied through application of a Special 
Warranty Arrangement certified by the Department of Labor; a copy of 
the current arrangement will be included on the OLMS Web site.
    (c) The Federal Transit Administration will include the current 
version of the Special Warranty Arrangement, through reference in its 
Master Agreement, in each OTRB and Other Than Urbanized grant of 
assistance under the statute.
    (1) The Federal Transit Administration will notify the

[[Page 47057]]

Department that it is funding an OTRB or Other Than Urbanized grant by 
transmitting to the Department an information copy of each grant 
application upon approval of the grant.
    (i) Each grant of assistance for an Other Than Urbanized program 
will contain a labor section identifying labor organizations 
representing transit employees of each subrecipient, the labor 
organizations representing employees of other transit providers in the 
service area, and a list of those transit providers. A sample format is 
posted on the OLMS Web site to facilitate the inclusion of this 
information in the grant application.
    (ii) OTRB grants of assistance will contain a labor section 
identifying labor organizations representing employees of the 
recipient.
    (2) The Department will notify labor organizations representing 
potentially affected transit employees of the approval of Other Than 
Urbanized and OTRB grants and inform them of their rights under the 
Special Warranty Arrangement.


Sec.  215.8  [Amended]

0
8. Section 215.8 is amended as follows:
0
a. Remove ``Director,'' and add in its place ``Chief, Division of'';
0
b. Remove ``Suite N5603,''; and
0
c. Add the phrase ``or e-mailed to [email protected]'' at the 
end of the paragraph.

    Signed at Washington, DC, this 4th day of August, 2008.
Victoria A. Lipnic,
Assistant Secretary for Employment Standards.
Donald Todd,
Deputy Assistant Secretary, Office of Labor-Management Standards.
[FR Doc. E8-18497 Filed 8-12-08; 8:45 am]
BILLING CODE 4510-CP-P