[Federal Register Volume 76, Number 103 (Friday, May 27, 2011)]
[Proposed Rules]
[Pages 30898-30901]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-13187]



Office of the Secretary

49 CFR Part 23

[Docket No. OST-2011-0101]
RIN 2105-AE10

Disadvantaged Business Enterprise: Program Improvements for 
Airport Concessions

AGENCY: Office of the Secretary (OST), DOT.

ACTION: Notice of Proposed Rulemaking (NPRM).


SUMMARY: This notice of proposed rulemaking (NPRM) proposes conforming 
amendments to the Department of Transportation's Airport Concessions 
Disadvantaged Business Enterprise (ACDBE) regulation, consistent with 
recently issued amendments in the Department's regulation for the 
disadvantaged business enterprise (DBE) program in highway, transit, 
and airport financial assistance programs.

DATES: Comments on this proposed rule must be received by July 26, 

ADDRESSES: You may submit comments (identified by the agency name and 
DOT Docket ID Number OST-2011-0101) by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for submitting 
     Mail: Docket Management Facility: U.S. Department of 
Transportation, 1200 New Jersey Avenue, SE., West Building Ground 
Floor, Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: West Building Ground Floor, Room 
W12-140, 1200 New Jersey Avenue, SE., between 9 a.m. and 5 p.m. ET, 
Monday through Friday, except Federal holidays.
     Fax: 202-493-2251.
    Instructions: You must include the agency name (Office of the 
Secretary, DOT) and Docket number (OST-2011-0101) for this notice at 
the beginning of your comments. You should submit two copies of your 
comments if you submit them by mail or courier. Note that all comments 
received will be posted without change to http://www.regulations.gov 
including any personal information provided and will be available to 
Internet users. You may review DOT's complete Privacy Act Statement in 
the Federal Register published on April 11, 2000 (65 FR 19477) or you 
may visit http://DocketsInfo.dot.gov.
    Docket: For Internet access to the docket to read background 
documents and comments received, go to http://www.regulations.gov. 
Background documents and comments received may also be viewed at the 
U.S. Department of Transportation, 1200 New Jersey Ave, S.E., Docket 
Operations, M-30, West Building Ground Floor, Room W12-140, Washington, 
DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except 
Federal holidays.

FOR FURTHER INFORMATION CONTACT: Robert C. Ashby, Deputy Assistant 
General Counsel for Regulation and Enforcement, U.S. Department of 
Transportation, 1200 New Jersey Avenue, SE., Washington, DC 20590, Room 
W94-302, 202-366-9310, [email protected] or Wilbur Barham, Director 
National Airport Civil Rights Policy and Compliance, U.S. Department of 
Transportation, Federal Aviation Administration, 800 Independence 
Avenue, SW., Washington, DC 20591, Room 1030, 202-385-6210, 
[email protected].

SUPPLEMENTARY INFORMATION: On January 28, 2011, the Department 
published a final rule establishing several program improvements to the 
Department's DBE program rule (49 CFR part 26) for financial assistance 
programs (76 FR 5083). This NPRM proposes conforming amendments to the 
Department's companion rule for the ACDBE program (49 CFR part 23) for 
several of the Part 26 amendments. The rationales for the proposed 
conforming changes to Part 23 are very similar to

[[Page 30899]]

those for the parallel Part 26 changes, and we refer readers to the 
preamble of the Part 26 final rule for information on the basis and 
purpose of the proposed changes.
    We note that it is not necessary to propose conforming changes to 
Part 23 parallel to all of the Part 26 changes. For example, it is not 
necessary to include a Part 23 provision parallel to the change to 
Sec.  26.11, concerning the frequency of reports, since existing Sec.  
23.27(b) already states the appropriate reporting frequency for Part 23 
    In addition, many of the Part 26 amendments apply automatically to 
Part 23, because of sections in Part 23 that incorporate provisions of 
Part 26. For example, existing Sec.  23.23 incorporates the provisions 
of Sec.  26.31, regarding directories, so the changes to Sec.  26.31 
apply in the Part 23 context without further amendment to Part 23. 
Existing Sec.  23.31(a) states that, except where otherwise provided in 
Part 23, the certification provisions of Sec. Sec.  26.61-26.91 apply 
to Part 23. Consequently, the amendments to Sec. Sec.  26.71, 26.73, 
26.81, 26.83, 26.84, and 26.85 automatically apply under Part 23 as 
well as Part 26. Finally, the existing Sec.  23.25(e)(1)(iv) states 
that the administrative procedures applicable to contract goals in 
Sec. Sec.  26.51-26.53 apply with respect to concession specific goals, 
so the amendment to Sec.  26.51 and the amendment to Sec.  26.53 
automatically apply under Part 23 as well as Part 26.
    In the list that follows, we highlight the recent amendments to 
Part 26 that apply automatically under Part 23. When these Part 26 
sections apply under Part 23, the terms ``contractor'' or 
``subcontractor'' are understood to mean ``concessionaire'' or 
     Section 26.31: This amendment, requiring that the DBE 
directory include the list of each type of work for which a firm is 
eligible to be certified, applies to the ACDBE program as well.
     Section 26.51: Applied in the ACDBE context, this 
amendment directs recipients who originally set all race-neutral goals 
to start setting race-conscious concession-specific goals if it 
appeared that the race-neutral approach was not working.
     Section 26.53: As applied to ACDBEs, this amended section 
sets forth the circumstances in which a prime concessionaire has good 
cause to terminate an ACDBE firm.
     Section 26.71: Under this amended section, the types of 
work an ACDBE firm can perform must be described in terms of the most 
specific available NAICS code for that type of work.
     Section 26.73: This amended section provides that 
certification of a firm may not be denied solely on the basis that it 
is a newly formed firm, has not completed projects or contracts at the 
time of its application, has not yet realized profits from its 
activities, or has not demonstrated a potential for success.
     Section 26.81: The requirements for Unified Certification 
Programs (UCPs) were amended to require the UCP to revise the print 
version of the Directory at least once a year.
     Section 26.83: The amended procedures for making 
certification decisions apply in the ACDBE context. The amendments 
include a new subsection that addresses the procedure for a 
certification decision involving an application that was withdrawn and 
then resubmitted.
     Section 26.84: This section was removed in the recently 
issued Part 26 final rule.
     Section 26.85: This section has been removed and replaced 
with a section describing the process of interstate certification for a 
DBE firm. This includes the information the applicant must provide to 
the other state (``State B''), what actions State B must take when it 
receives an application, and appropriate reasons for making a 
determination that there is good cause to believe that the home 
state's, State A, certification of the firm is erroneous or should not 
apply in State B.
    Even though the Part 26 amendments listed above apply automatically 
to Part 23, it is important that these new Part 26 changes make sense 
in the ACDBE context. Therefore, the Department seeks comments on 
whether there are terms or concepts in these recently issued Part 26 
amendments that need to be modified to conform to the Part 23 context.
    Amended Sec.  26.39, concerning fostering small business 
participation, is focused on Federally-assisted contracting and 
associated issues such as ``unbundling.'' For this reason, the 
Department is not proposing at this time to include parallel provisions 
in Part 23, though we seek comments on whether additional small-
business-related provisions are needed in the concessions context. The 
changes to Sec.  26.45, concerning project goals, likewise apply only 
to DOT-assisted contracting, not concessions.
    In Sec.  23.35, the Department would substitute $1.32 million for 
the current $750,000 as the personal net worth (PNW) standard. This 
parallels the revision of Sec.  26.67, and is being proposed for the 
same reasons. The Part 23 PNW provision has been separate from the Part 
26 PNW provision, so a specific Part 23 amendment is needed to maintain 
consistency between the two regulations.
    The Part 26 PNW definition differs from the Part 23 PNW definition 
in that Part 23 includes an exemption for ``other assets that the 
individual can document are necessary to obtain financing or a 
franchise agreement for the initiation or expansion of his or her ACDBE 
firm (or have in fact been encumbered to support existing financing for 
the individual's ACDBE business), to a maximum of $3 million.'' Some 
background regarding the $3 million (maximum) exemption for ``other 
assets * * *'' can be found in the preamble to 49 CFR Part 23, issued 
March 22, 2005.
    In determining whether to include the $3 million exclusion, the 
Department noted that one PNW standard for Part 23 and Part 26 would 
``* * * avoid concerns about overinclusiveness in the program by 
ensuring that persons who would fairly be perceived as too wealthy for 
a program aimed at assisting `disadvantaged' individuals do not 
participate''. The Department countered ``[a]t the same time, the 
Department is sensitive to the concern of commenters that a PNW 
standard at this level [$750,000] could inhibit opportunities for 
business owners to enter the concessions field and expand existing 
businesses,'' and it also said that ``[i]n the different business 
context of concessions, the Department will add a third exclusion.''
    The Department recognized in the preamble that ``[w]ithout unduly 
expanding the well-accepted $750,000 standard, this approach will take 
into account individual circumstances and avoid the `glass ceiling' 
effect of an across-the-board PNW standard about which commenters were 
concerned'' and ``prevent the eligibility standards from becoming too 
open-ended, resulting in the participation of individuals so wealthy 
that it would be difficult to justify their inclusion in a program 
aimed at disadvantaged individuals, we are adding a $3 million cap on 
this third exclusion * * *''
    The Department is aware that the $3 million exemption from PNW for 
assets used as collateral for a loan has been difficult to implement. 
For example, issues arise in applying the exemption when part of the 
loan has been paid down. Also, there has been inconsistent 
interpretation as to the necessary documentation to support this 
exemption. The Department seeks comment on whether this exemption 
should be retained in the definition of PNW, deleted altogether, 
modified, or

[[Page 30900]]

replaced with a different but more workable provision aimed to achieve 
the same objective. We would also like comments on how to improve the 
definition of this exemption so if retained, the exemption can be 
implemented more effectively.
    In Sec.  23.29, we propose to adopt the key change we made to Sec.  
26.37 concerning enhanced monitoring of the actual performance of work 
by DBEs or ACDBEs. Airports would be responsible for reviewing 
documents and actual on-site performance to ensure that ACDBEs were 
actually performing the work committed to them during the concession 
award process.
    This NPRM would revise Sec.  23.57 to make its accountability 
provisions parallel to those of the recently amended Sec.  26.47(c). 
Again, the rationale for doing so is the same as for Part 26. The 
Department seeks comment on whether any further modifications of the 
language of this provision would be useful for purposes of the ACDBE 

Regulatory Analyses and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

    This is a non-significant regulation for purposes of Executive 
Order 12866 and the Department of Transportation's Regulatory Policies 
and Procedures. The proposals involve administrative modifications to 
several provisions of a long-existing and well-established program, 
designed to improve the program's implementation. The proposals, if 
made final, would not alter the direction of the program, make major 
policy changes, or impose significant new costs or burdens.

Regulatory Flexibility Act

    A number of provisions of the NPRM would reduce small business 
burdens or increase opportunities for small business. The personal net 
worth change would allow some small businesses to remain in the ACDBE 
program for a longer period of time. Small recipients would not be 
required to prepare or transmit reports concerning the reasons for 
overall goal shortfalls and corrective action steps to be taken. Only 
the 30-50 airports receiving the greatest amount of FAA financial 
assistance or enplaning the greatest number of passengers would have to 
file these reports. The NPRM would not make major policy changes that 
would cause recipients to expend significant resources on program 
modifications. For these reasons, the Department certifies that the 
NPRM, if made final, would not have a significant economic impact on a 
substantial number of small entities.


    A rule has implications for federalism under Executive Order 13132, 
Federalism, if it has a substantial direct effect on State or local 
governments and would either preempt State law or impose a substantial 
direct cost of compliance on them. We have analyzed this proposed rule 
under the Order and have determined that it does not have implications 
for federalism, since it merely makes administrative modifications to 
an existing program. It does not change the relationship between the 
Department and State or local governments, pre-empt State law, or 
impose substantial direct compliance costs on those governments.

Paperwork Reduction Act

    As required by the Paperwork Reduction Act of 1995, DOT has 
submitted the Information Collection Requests (ICRs) below to the 
Office of Management and Budget (OMB). Before OMB decides whether to 
approve these proposed collections of information and issue a control 
number, the public must be provided 30 days to comment. Organizations 
and individuals desiring to submit comments on the collections of 
information in this rule should direct them to the Office of Management 
and Budget, Attention: Desk Officer for the Office of the Secretary of 
Transportation, Office of Information and Regulatory Affairs, 
Washington, DC 20503. OMB is required to make a decision concerning the 
collection of information requirements contained in this rule between 
30 and 60 days after publication of this document in the Federal 
Register. Therefore, a comment is best assured of having its full 
effect if OMB receives it within 30 days of publication.
    We will respond to any OMB or public comments on the information 
collection requirements contained in this rule. The Department will not 
impose a penalty on persons for violating information collection 
requirements which do not display a current OMB control number, if 
required. The Department intends to obtain current OMB control numbers 
for the new information collection requirements resulting from this 
rulemaking action. The OMB control number, when assigned, will be 
announced by separate notice in the Federal Register.
    It is estimated that the total incremental annual burden for the 
information collection requirements in this rule is 13,855 hours.
    The following are the information collection requirements in this 

Certification of Monitoring (49 CFR 23.29)

    Each recipient would certify that it had conducted post-award 
monitoring of contracts that would be counted for ACDBE credit to 
ensure that ACDBEs had done the work for which credit was claimed. The 
certification is for the purpose of ensuring accountability for 
monitoring which the regulation already requires.
    Respondents: 184 (i.e., airports with covered concessions).
    Frequency: 1,071 non-car rental concessions; 449 car rental 
concessions, for a total of 1520, or an average of 8.2 concessions per 
    Estimated Burden per Response: \1/2\ hour.
    Estimated Total Annual Burden: 6,230 hours.

Accountability Mechanism (49 CFR 23.57)

    If a recipient failed to meet its overall goal in a given year, it 
would have to determine the reasons for its failure and establish 
corrective steps. Of the 184 airports covered by this rule, 35 large 
recipients would transmit this analysis to DOT; smaller recipients 
would perform the analysis but would not be required to submit it to 
DOT. We estimate that about half of recipients (92) would be subject to 
this requirement in a given year.
    Respondents: 92.
    Estimated Average Burden per Response: 80 hours + 5 additional 
hours for recipients sending report to DOT.
    Estimated Total Annual Burden Hours: 7535 (i.e., 7,360 [92 x 80] + 
175 [35 x 5]).

List of Subjects in 49 CFR Part 23

    Administrative practice and procedure, Airports, Civil rights, 
Government contracts, Grant programs--transportation, Minority 
businesses, Reporting and record keeping requirements.

    Issued this 4th day of May 2011, at Washington DC.
Ray LaHood,
Secretary of Transportation.

    For the reasons set forth in the preamble, the Department of 
Transportation proposes to amend 49 CFR part 23 as follows:

[[Page 30901]]


    1. The authority citation for Part 23 continues to read as follows:

    Authority:  49 U.S.C. 47107; 42 U.S.C. 2000d; 49 U.S.C. 322; 
Executive Order 12138.
    2. Revise Sec.  23.29 to read as follows:

Sec.  23.29  What monitoring and compliance procedures must recipients 

    As a recipient, you must implement appropriate mechanisms to ensure 
compliance with the requirements of this part by all participants in 
the program. You must include in your concession program the specific 
provisions to be inserted into concession agreements and management 
contracts, the enforcement mechanisms, and other means you use to 
ensure compliance. These provisions must include a monitoring and 
enforcement mechanism to verify that the work committed to ACDBEs is 
actually performed by the ACDBEs. This mechanism must include a written 
certification that you have reviewed records of all contracts, leases, 
joint venture agreements, or other concession-related agreements and 
monitored the work on-site in your State for this purpose. The 
monitoring to which this paragraph refers may be conducted in 
conjunction with monitoring of contract performance for other purposes 
(e.g., closeout reviews for a contract).
    3. In Sec.  23.35, remove the number ``$750,000'' and add in its 
place ``$1.32 million.''
    4. Revise Sec.  23.45(i) to read as follows:

Sec.  23.45  What are the requirements for submitting overall goal 
information to FAA?

* * * * *
    (i) If a new concession opportunity, the estimated average annual 
gross revenues of which are anticipated to be $200,000 or greater, 
arises at a time that falls between normal submission dates for overall 
goals, you must submit an appropriate adjustment to your overall goal 
to the FAA for approval at least six months before executing the 
concession agreement for the new concession opportunity.
    5. Revise Sec.  23.57(b) and (c) to read as follows:

Sec.  23.57  What happens if a recipient falls short of meeting its 
overall goals?

* * * * *
    (b) If the awards and commitments shown on your Uniform Report of 
ACDBE Participation (found in Appendix A to this Part) at the end of 
any fiscal year are less than the overall goal applicable to that 
fiscal year, you must do the following in order to be regarded by the 
Department as implementing your ACDBE program in good faith:
    (1) Analyze in detail the reasons for the difference between the 
overall goal and your awards and commitments in that fiscal year;
    (2) Establish specific steps and milestones to correct the problems 
you have identified in your analysis and to enable you to meet fully 
your goal for the new fiscal year;
    (3)(i) If you are an Operational Evolution Partnership Plan airport 
or other airport designated by the FAA, you must submit, within 90 days 
of the end of the fiscal year, the analysis and corrective actions 
developed under paragraphs (b)(1) and (2) of this section to the FAA 
for approval. If the FAA approves the report, you will be regarded as 
complying with the requirements of this section for the remainder of 
the fiscal year.
    (ii) As an airport not meeting the criteria of paragraph (b)(3)(i) 
of this section, you must retain analysis and corrective actions in 
your records for three years and make it available to the FAA, on 
request, for their review.
    (4) The FAA may impose conditions on the recipient as part of its 
approval of the recipient's analysis and corrective actions including, 
but not limited to, modifications to your overall goal methodology, 
changes in your race-conscious/race-neutral split, or the introduction 
of additional race-neutral or race-conscious measures.
    (5) You may be regarded as being in noncompliance with this Part, 
and therefore subject to the remedies in Sec.  23.11 of this part and 
other applicable regulations, for failing to implement your DBE program 
in good faith if any of the following things occur:
    (i) You do not submit your analysis and corrective actions to FAA 
in a timely manner as required under paragraph (b)(3) of this section;
    (ii) FAA disapproves your analysis or corrective actions; or
    (iii) You do not fully implement the corrective actions to which 
you have committed or conditions that FAA has imposed following review 
of your analysis and corrective actions.
    (c) If information coming to the attention of FAA demonstrates that 
current trends make it unlikely that you, as an airport, will achieve 
ACDBE awards and commitments that would be necessary to allow you to 
meet your overall goal at the end of the fiscal year, FAA may require 
you to make further good faith efforts, such as modifying your race-
conscious/race-neutral split or introducing additional race-neutral or 
race-conscious measures for the remainder of the fiscal year.

[FR Doc. 2011-13187 Filed 5-26-11; 8:45 am]