[Federal Register Volume 87, Number 244 (Wednesday, December 21, 2022)]
[Notices]
[Pages 78193-78201]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27705]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

[FHWA Docket No. FHWA-2022-0013]


Revision of Stewardship and Oversight Agreement Template

AGENCY: Federal Highway Administration (FHWA), Department of 
Transportation (DOT).

ACTION: Notice of revised Stewardship and Oversight Agreement template, 
request for comments.

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SUMMARY: The FHWA has completed a revision to the Federal-State 
Stewardship and Oversight (S&O) Agreement template. The revised S&O 
Agreement template that is the subject of this notice is an updated 
version of a template issued by FHWA in 2015. The revisions address 
such issues as changes in applicable laws and the evolution of FHWA's 
risk-based stewardship and oversight program. The FHWA is requesting 
comments on the revised S&O Agreement template. The FHWA will publish a 
Federal Register notice announcing the final S&O Agreement template, 
including any changes FHWA makes in response to public comments.

DATES: The public comment period closes on February 21, 2023.

ADDRESSES: All comments should include the docket number that appears 
in the heading of this document and may be submitted in any of the 
following ways:
     Electronically through the Federal eRulemaking Portal: 
www.regulations.gov. This website allows the public to enter comments 
on any Federal Register notice issued by any agency. Follow the online 
instructions for submitting comments.
     Fax: 1-202-493-2251.
     Mail: U.S. Department of Transportation, Docket 
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Avenue SE, Washington, DC 20590-0001.
     Hand Delivery: U.S. Department of Transportation, Docket 
Operations, West Building Ground Floor, Room W12-140, 1200 New Jersey 
Avenue SE, Washington, DC 20590 between 9 a.m. and 5 p.m., ET, Monday 
through Friday, except Federal holidays.
    Instructions: You should identify the docket number at the 
beginning of your comments. If you submit your comments by mail, submit 
two copies. To receive confirmation that DOT received your comments, 
include a self-addressed stamped postcard. Late comments will be 
considered to the extent practicable. Note that all comments received 
will be posted without change to www.regulations.gov, including any 
personal information provided.

FOR FURTHER INFORMATION CONTACT: Mr. Lloyd Rue, Office of 
Infrastructure, (202) 366-6125, office hours are from 8 a.m. to 4:30 
p.m., MT, Monday through Friday, except Federal holidays, or Ms. Alla 
Shaw, Office of the Chief Counsel, (202) 366-1042, office hours are 
from 8 a.m. to 4:30 p.m., ET, Federal Highway Administration, 1200 New 
Jersey Avenue SE, Washington, DC 20590. Offices are open Monday through 
Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

    This document and the revised S&O Agreement template may be viewed 
online under the docket number noted above through the Federal 
eRulemaking portal at: www.regulations.gov. Electronic submission and 
retrieval help and guidelines are available on the website. Please 
follow the online instructions.
    In addition to being available in the electronic docket, the 
revised S&O Agreement template may also be viewed online at: https://www.fhwa.dot.gov/federalaid/stewardship/Draft_stewardship_and_oversight_template.docx.
    An electronic copy of this document may also be downloaded from the 
Office of the Federal Register's website at: http://www.archives.gov/federal-register and the U.S. Government Publishing Office's website 
at: http://www.govinfo.gov/.
    Physical access to the docket is available at the U.S. Department 
of Transportation, Docket Operations, M-30, West Building Ground Floor, 
Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20950, between 
9 a.m. and 5 p.m. ET, Monday through Friday, except Federal holidays.
    All comments received before the close of business on the comment 
closing date indicated above will be considered and will be available 
for examination in the docket at the above address. Comments received 
after the comment closing date will be filed in the docket and will be 
considered to the extent practicable. In addition to late comments, 
FHWA will also continue to file relevant information in the docket as 
it becomes available after the comment period closing date and 
interested persons should continue to examine the docket for new 
material.

Background

    In enacting 23 United States Code (U.S.C.) 106(c), as amended, 
Congress established authority for States to enter into agreements with 
FHWA under which the States carry out certain project responsibilities 
traditionally handled by FHWA. Congress also recognized the importance 
of a risk-based approach to FHWA oversight of the Federal-aid highway 
program (FAHP), establishing requirements in 23 U.S.C. 106(g). The S&O 
Agreement is a key element of FHWA's risk-based S&O approach. The S&O 
Agreements are formal instruments executed between each FHWA Division 
Office and its corresponding State department of transportation (State 
DOT). The S&O Agreement defines the roles and responsibilities of FHWA 
and the State DOT with respect to Title 23, U.S.C. project approvals 
and related responsibilities, and documents methods that will be used 
for FAHP oversight activities.
    In response to Office of Inspector General recommendations,\1\ FHWA 
revised its national S&O procedures to require use of a uniform 
template for developing an S&O Agreement and instituted a legal review 
of each S&O Agreement. In 2015, FHWA issued the template currently in 
use. Each of the 52 FHWA Division Offices and their respective State 
DOTs executed a new S&O Agreement based on the 2015 S&O Agreement 
template.
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    \1\ ``Improvements to Stewardship and Oversight Agreements Are 
Needed to Enhance Federal-aid Highway Program Management,'' OIG, 
DOT, Report Number MH-2013-001 (October 1, 2012), available online 
at https://www.oig.dot.gov/library-item/28742.
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    Since the issuance of the 2015 S&O Agreement template and 
implementation of the new S&O Agreements, statutes and regulations 
applicable to the FAHP have changed.

[[Page 78194]]

In addition, FHWA identified improvements for the 2015 template. For 
these reasons, FHWA initiated updates to the 2015 S&O Agreement 
template.
    Finally, section 11307 of the Bipartisan Infrastructure Law (Pub. 
L. 117-58) directed the Secretary of Transportation to publish a 
template created by the Secretary for Federal-State S&O agreements in 
the Federal Register along with a notice requesting public comment on 
ways to improve the template. Accordingly, FHWA is making available the 
revised template and the 2015 template in the docket established for 
this notice. The 2015 template is included for reference, and it may 
also be viewed at https://go.usa.gov/xtQcM. The FHWA is requesting 
comments on the revised template, which FHWA believes addresses many 
concerns expressed by stakeholders since 2015.

Discussion of Changes

    Revisions to the 2015 S&O Agreement template include the removal of 
redundant language and outdated text; revisions to the project-level 
approval actions, listed in attachment A to the template, including 
revisions based on changes in Federal law that have occurred since 
March 2015; and reorganization of the template.
    The revised S&O Agreement template is more concise. The text of the 
2015 S&O Agreement template is 12 pages, excluding signature pages and 
the attachments. The text of the revised S&O Agreement template is 7 
pages, excluding signature pages and the attachments.
    The 2015 S&O Agreement template has 12 sections. The revised S&O 
Agreement template is now nine sections. The revised section headings 
are:

Section I. Background and Introduction
Section II. Intent and Purpose of Agreement
Section III. Permissible Areas of Assumption Under 23 U.S.C. 106(c)
Section IV. Assumption of Responsibilities for Federal-Aid Projects 
on the NHS
Section V. Assumption of Responsibilities for Federal-Aid Projects 
off the NHS
Section VI. FHWA Oversight Program Under 23 U.S.C. 106(g)
Section VII. State DOT Oversight Responsibilities
Section VIII. Agreement Execution and Modifications
Section IX. Agreement Term and Termination

    The title of the agreement is unchanged.

    The 2015 S&O Agreement template included three attachments: (1) 
attachment A--Project Action Responsibility Matrix; (2) attachment B--
Program Responsibility Matrix; and (3) attachment C--Manuals, 
Agreements, Control, Monitoring, And Reporting Documents. The revised 
S&O Agreement template eliminates attachment B--Program Responsibility 
Matrix of the 2015 agreement template. The purpose of attachment B in 
the 2015 template was to identify FHWA and State DOT offices involved 
in carrying out various program-level actions under the FAHP. That 
detailed level of information is not necessary in this more focused and 
concise version of the S&O Agreement template.
    The revised S&O Agreement template includes three attachments: (1) 
attachment A--Project Action Responsibility Matrix; (2) attachment B--
Manuals, Agreements, Control, Monitoring, And Reporting Documents; and 
(3) attachment C--Stewardship and Oversight Indicators.

Request for Comments

    Although comments may address any part or provision of the 
template, FHWA is specifically requesting comments on the following:
     Whether revisions are needed to the template to delete 
standard terms requiring approval by the Secretary of the policies, 
procedures, processes, or manuals of the States, or other State 
actions, if Federal law (including regulations) does not specifically 
require an approval. The FHWA encourages commenters to specify each 
provision that should be revised.
     Opportunities to modify the template to allow adjustments 
to the review schedules for State practices or actions, including 
through risk-based approaches, program reviews, process reviews, or 
other means.
     Provisions of the template that describe how FHWA will 
perform oversight under 23 U.S.C. 106(g), such as reviewing State DOT 
practices or actions through risk-based approaches, program reviews, 
process reviews, or other means. The FHWA is interested in how 
commenters believe FHWA could improve these provisions in the template.
     Whether FHWA should allow the template to be modified by 
individual division offices and State DOTs to include State-specific 
provisions that do not otherwise conflict with the template and, if so, 
examples of what might be included in those provisions. The FHWA is 
particularly interested in whether commenters believe FHWA should allow 
the addition of such State-specific provisions under Section VI. FHWA 
Oversight Program Under 23 U.S.C. 106(g) and Section VII. State DOT 
Oversight Responsibilities and, if so, examples of additional 
provisions commenters believe might be covered in these sections.
     Provisions of the template that describe project approval 
actions that are assumable by State DOTs. In particular, FHWA is 
seeking comments on whether those actions are adequately described or 
addressed, and whether there are additional project-level approval 
actions that commenters believe arise out of Title 23, U.S.C. or title 
23, Code of Federal Regulations and that may be assumed by State DOTs 
under 23 U.S.C. 106(c).
     Provisions of the template that describes State 
responsibilities for oversight of subrecipients. A State DOT is 
responsible for project oversight (23 U.S.C. 106(g)(4)) for federally 
assisted projects using apportioned Federal-aid highway funds. The FHWA 
is interested in whether the provisions in section VII of the template 
in conjunction with other existing FHWA policies, regulations, 
guidance, and technical assistance are sufficient for State DOTs to 
adequately provide subrecipient oversight and how commenters believe 
FHWA could improve the provisions in the template.
     Procedures for future updates to the S&O Agreement 
template. Comments are sought on how frequently the S&O Agreement 
template should be updated and on how future revisions to the S&O 
Agreement template should be managed to ensure the S&O Agreement 
template remains reasonably up to date without creating an overly 
burdensome process.
     Procedures for processing updates to FHWA-State DOT S&O 
Agreements. Comments are sought on how FHWA should process and execute 
revisions to existing FHWA-State DOT S&O Agreements, amendments to 
existing FHWA-State DOT S&O Agreements and new FHWA-State DOT S&O 
Agreements.

Further Proceedings

    The FHWA is providing a 60-day comment period. After considering 
public comments in response to this notice, FHWA will publish a notice 
in the Federal Register that includes:
     The final S&O Agreement template, including any changes 
FHWA makes in response to public comments and any alternatives to those 
changes.
     A summary response to public comments, including the basis 
for FHWA's decision whether to revise the template in response to 
comments. This will include an explanation of the basis for retaining 
any requirement for FHWA approval of State policies, procedures, 
processes, or manuals, or other State actions if Federal law (including

[[Page 78195]]

regulations) does not specifically require the approval.
     An implementation plan and schedule for use of the new 
template.

Stephanie Pollack,
Deputy Administrator, Federal Highway Administration.

Stewardship and Oversight Agreement on Project Assumption and Program 
Oversight By and Between the Federal Highway Administration, [State 
Name] Division Office, and the [State Name DOT/STA Organization]

Section I. Background and Introduction

    The Federal-aid Highway Program (FAHP) provides for a Federally-
assisted State program. In enacting section 106(c) of title 23, United 
States Code (U.S.C.), as amended, Congress established authority for a 
State Department of Transportation (State DOT) to carry out certain 
project responsibilities traditionally handled by the Federal Highway 
Administration (FHWA) through a delegation from the Secretary of the 
U.S. Department of Transportation (``Secretary''). The authority in 23 
U.S.C. 106(c) applies to projects that are subject to the requirements 
of title 23, U.S.C. (``title 23'') because the State DOT receives 
Federal funding or because the State DOT needs an FHWA action for the 
project even though the project may not use Federal funds. Congress 
also recognized the importance of a risk-based approach to FHWA 
oversight of the FAHP, establishing requirements in 23 U.S.C. 106(g). 
In addition to assumptions of responsibility, FHWA-State DOT 
Stewardship and Oversight Agreements cover certain oversight activities 
relating to the oversight requirements of 23 U.S.C. 106(g).
    The FHWA may not assign its decisionmaking authority to a State DOT 
unless authorized by law. The authorities FHWA assigns to a State DOT 
under 23 U.S.C. 106(c)(1) and (2) are listed in Attachment A of the 
applicable FHWA-State DOT Stewardship and Oversight Agreement. A 
decision, determination, or action carried-out by a State DOT under the 
authority of a Stewardship and Oversight Agreement (``Agreement'') does 
not constitute an eligibility, participation, obligation, 
reimbursement, authorization, or compliance decision by or for FHWA.
    For clarity, Attachment A also lists certain other actions FHWA may 
have allowed a State DOT to undertake based on delegation or assumption 
provisions in other Federal laws. As noted in those Attachment A 
listings, a State DOT exercise of those authorities is governed by 
separate agreements between FHWA and that State DOT.
    For project responsibilities that are not assumed by a State DOT 
under 23 U.S.C. 106(c), and are not otherwise delegated or assigned in 
accordance with another Federal law, FHWA may authorize a State DOT to 
perform work needed to reach the FHWA decision point, or to implement 
FHWA's decision. However, such decisions themselves are reserved to 
FHWA.

Section II. Intent and Purpose of Agreement

    This Stewardship and Oversight Agreement (``Agreement'') 
establishes the roles and responsibilities of the FHWA [State name] 
Division Office and the [State name DOT/STA organization 
(abbreviation)] with respect to certain title 23 project approvals and 
related responsibilities, and FAHP oversight activities. Nothing in 
this Agreement affects the Secretary's authority, or authority 
delegated to FHWA, to oversee compliance with Federal requirements. 
These authorities include but are not limited to 23 U.S.C. 114, under 
which the Secretary has the right to conduct such inspections and take 
such corrective action as the Secretary determines to be appropriate.
    This Agreement carries out 23 U.S.C. 106(c)(3), which requires FHWA 
and the State DOT enter into an agreement relating to the extent to 
which the State DOT assumes project responsibilities pursuant to 
section 106(c). This Agreement also documents certain oversight 
activities that FHWA and the [State name DOT/STA abbreviation] will use 
to efficiently and effectively deliver the FAHP.
    Section IV of this Agreement covers assumption of project approvals 
on the National Highway System (NHS). Section V covers assumption of 
project approvals off the NHS.
    The Project Action Responsibility Matrix, Attachment A to this 
Agreement, describes responsibilities that the [State name DOT/STA 
abbreviation] assumes from FHWA pursuant to 23 U.S.C. 106(c) and other 
legal authorities.
    Upon execution of this Agreement, Attachment A controls and, except 
as specifically noted in Attachment A (including any amendment thereto 
done in accordance with section VIII) and sections IV and V of this 
Agreement, no other agreements, attachments, or other documents shall 
have the effect of delegating or assigning FHWA approvals to the [State 
name DOT/STA abbreviation] under 23 U.S.C 106(c), or have the effect of 
altering Attachment A.

Section III. Permissible Areas of Assumption Under 23 U.S.C. 106(c)

    FHWA has determined the activities and actions that are assumable 
under 23 U.S.C. 106(c). Those activities and actions are listed in a 
template issued by FHWA to create this Agreement and cover only 
activities or actions in the following areas:
    A. Design, which includes preliminary engineering, engineering, and 
design-related services directly relating to the construction of a 
FAHP-funded project, including engineering, design, project development 
and management, construction project management and inspection, 
surveying, mapping (including the establishment of temporary and 
permanent geodetic control in accordance with specifications of the 
National Oceanic and Atmospheric Administration), and architectural-
related services.
    B. Plans, specifications and estimates (PS&E), which represents an 
array of actions and approvals required before authorization of 
construction and carried out during construction. The PS&E package 
includes standards, drawings, specifications, project estimates, 
certifications relating to completion of right-of-way acquisition and 
relocation, utility work, and railroad work.
    C. Contract awards, which include procurement of professional and 
other consultant services and construction-related services to include 
advertising, evaluating, and awarding contracts.
    D. Inspections, which include general contract administration, 
material testing and quality assurance, review, and inspections of 
Federal-aid contracts as well as final inspection/acceptance.
    E. Approvals and related responsibilities affecting real property 
as provided in 23 CFR 710.201(h) and any successor regulation.
    The [State name DOT/STA abbreviation] is to exercise any and all 
assumptions of the FHWA's responsibilities in accordance with the 
Federal laws, regulations, policies, Executive Orders, and procedures 
that would apply if the responsibilities were carried out by FHWA. For 
all projects and programs carried out under title 23, the [State name 
DOT/STA abbreviation] will comply with title 23 and all applicable non-
title 23 Federal-aid program requirements.

Section IV. Assumption of Responsibilities for FederaL-Aid Projects on 
the NHS

    For projects under title 23 that are on the NHS, including projects 
on the Interstate System, the [State name DOT/

[[Page 78196]]

STA abbreviation] may assume FHWA's title 23 responsibilities for 
activities or actions assumable under 23 U.S.C. 106(c) if the FHWA 
[State name] Division Office determines that assumption of 
responsibilities is appropriate and the [State name DOT/STA 
abbreviation] agrees.
    A. The activities or actions on the NHS assumed by the [State name 
DOT/STA abbreviation] under this Agreement are listed in Attachment A.
    B. Activities or actions for which the [State name DOT/STA 
abbreviation] has assumed the FHWA's responsibilities apply program-
wide except when superseded by provisions in a stewardship and 
oversight plan adopted by the FHWA [State name] Division Office for a 
specific project. Additional discussion on FHWA project involvement is 
included in section VI.D of this Agreement.
    C. In accordance with 23 U.S.C. 106(c)(4), the DOT Secretary may 
define high-risk categories for Interstate projects on a national 
basis, a State-by-State basis, or a national and State-by-State basis. 
A State DOT may not assume responsibilities for Interstate projects in 
a designated category. Currently, FHWA has not designated any high-risk 
categories applicable to [State name] in accordance with 23 U.S.C. 
106(c)(4). If the FHWA makes a future designation that applies to 
[State name], then that designation will immediately supersede the 
assumptions of responsibilities elsewhere in this Agreement.

Section V. Assumption of Responsibilities for Federal-Aid Projects Off 
the NHS

    For projects under title 23 that are not on the NHS, the [State 
name DOT/STA abbreviation] must assume FHWA's title 23 responsibilities 
for activities or actions assumable under 23 U.S.C. 106(c) unless the 
[State name DOT/STA abbreviation] determines that assumption of 
responsibilities is not appropriate (23 U.S.C. 106(c)(2)).
    A. The activities or actions off the NHS assumed by the [State name 
DOT/STA abbreviation] under this Agreement are listed in Attachment A.
    B. Activities or actions for which the [State name DOT/STA 
abbreviation] has assumed the FHWA's responsibilities apply programwide 
except when superseded by provisions in a stewardship and oversight 
plan for a specific project adopted by the FHWA [State name] Division 
Office. For non-NHS projects, the [State name DOT/STA abbreviation] 
must determine that superseding an assumption listed in Attachment A 
for a specific project is appropriate. Additional discussion on FHWA 
project involvement is included in section VI.D of this Agreement.
    C. Except as provided in 23 U.S.C.109(o), the [State name DOT/STA 
abbreviation] is to exercise FHWA's approvals and related 
responsibilities on these projects in accordance with Federal laws, 
regulations, policies, Executive Orders, and procedures that would 
apply if the responsibilities were carried out by FHWA.
    D. In accordance with 23 U.S.C. 109(o), non-NHS projects shall be 
designed and constructed in accordance with State laws, regulations, 
directives, safety standards, design standards, and construction 
standards, except that a local jurisdiction may use a roadway design 
guide recognized by FHWA and adopted by the local jurisdiction that is 
different from the roadway design guide used by the State in which the 
local jurisdiction is located for the design of projects on all 
roadways under the ownership of the local jurisdiction for which the 
local jurisdiction is the project sponsor, provided that the design 
complies with all other applicable Federal laws.

Section VI. FHWA Oversight Program Under 23 U.S.C. 106(g)

    The Secretary must establish an oversight program to monitor the 
effective and efficient use of funds authorized to carry out the FAHP 
(23 U.S.C. 106(g)). This includes FHWA oversight of the [State name 
DOT/STA abbreviation] processes and management practices, including 
those involved in carrying out the approvals and related 
responsibilities assumed by the [State name DOT/STA abbreviation] under 
23 U.S.C. 106(c).
    Section 106(g) requires, at a minimum, FHWA's oversight program be 
responsive to all areas relating to financial integrity and project 
delivery. To carry out the requirements of 23 U.S.C. 106(g), FHWA uses 
a risk management framework to evaluate financial integrity, project 
delivery, and other aspects of the FAHP. The objective is to balance 
risk while considering staffing, budget resources, and the State's 
transportation needs.
    The FHWA [State name] Division Office and the [State name DOT/STA 
abbreviation] may use a variety of methods to identify, analyze, and 
manage risks and develop response strategies, such as oversight 
techniques, manuals and operating agreements, stewardship and oversight 
indicators, and FHWA project involvement.

Oversight Techniques

    Techniques the FHWA [State name] Division Office and the [State 
name DOT/STA abbreviation] may use to identify and analyze risks and 
develop response strategies include, but are not limited to, the 
following:
     program assessments;
     FHWA Financial Integrity Review and Evaluations reviews;
     program reviews;
     certification reviews;
     recurring or periodic reviews such as the FHWA Compliance 
Assessment Program;
     inspections of project elements or phases.

Manuals and Operating Agreements

    The [State name DOT/STA abbreviation] manuals, agreements and other 
control, monitoring, and reporting documents that are used on Federal-
aid projects are listed in Attachment B to this Agreement.

Stewardship and Oversight Indicators

    [Drafting note: Select the paragraph that applies.]
Option 1
    The FHWA [State name] Division Office and the [State name DOT/STA 
abbreviation] have established stewardship and oversight indicators 
(indicators) to help monitor performance of responsibilities assumed 
under this Agreement. Indicators are those intended to provide evidence 
of how well a State DOT assumption of responsibilities is functioning. 
Indicators set targets, track trends, and may help determine when 
countermeasures and actions are implemented or adjusted. The indicators 
are agreed to as provided in Attachment C.
Option 2
    The FHWA [State name] Division Office and the [State name DOT/STA 
abbreviation] have not established indicators as part of this 
Agreement.

FHWA Project Involvement

    The FHWA [State name] Division Office may select projects 
(individually or by type) for risk-based FHWA project involvement and 
stewardship and oversight activities. In some instances, the 
programwide assumption by the [State name DOT/STA abbreviation] of 
FHWA's responsibilities under Attachment A to this Agreement may be 
superseded by provisions in a stewardship and oversight plan for a 
specific project, per sections IV and V of this Agreement. The FHWA 
[State name] Division Office will document

[[Page 78197]]

the additional activities in a stewardship and oversight plan for the 
affected project(s).

Section VII. State DOT Oversight Responsibilities

     Oversight of State DOT Performance of Assumed 
Responsibilities.This section addresses how 23 U.S.C. 106(c) assumed 
authorities are carried out by the [State name DOT/STA abbreviation]. 
The actions include monitoring to assure that the [State name DOT/STA 
abbreviation] is properly carrying out its responsibilities in 
accordance with this Agreement. The [State name DOT/STA abbreviation] 
is responsible for demonstrating to FHWA how it is carrying out its 
responsibilities in accordance with this Agreement. The [State name 
DOT/STA abbreviation] will provide information to the FHWA [State name] 
Division Office upon request.
    The [State name DOT/STA abbreviation] represents that processes, 
procedures, and practices from manuals, agreements, and other documents 
listed in Attachment B to this Agreement comply with applicable Federal 
requirements.

Subrecipient Oversight

    The [State name DOT/STA abbreviation] is responsible for ensuring 
that its subrecipients meet applicable Federal requirements (2 CFR 
200.332). This includes but is not limited to providing adequate 
oversight of sub-recipients with respect to both the subaward and any 
23 U.S.C. 106(c) assumed responsibilities the [State name DOT/STA 
abbreviation] delegates to a subrecipient. The [State name DOT/STA 
abbreviation] is responsible for determining that subrecipients of 
Federal funds are suitably staffed and equipped and have adequate 
project delivery systems and sufficient accounting controls to properly 
manage these funds (23 U.S.C. 106(g)).

Section VIII. Agreement Execution and Modifications

A. Agreement Execution

    This Agreement is effective when fully executed by the FHWA [State 
name] Division Administrator and authorized representative of the 
[State name DOT/STA abbreviation]. The [State name DOT/STA 
abbreviation] duly-authorized official shall execute this Agreement and 
then submit it to the FHWA [State name] Division Administrator, who 
shall sign this Agreement last.

B. Agreement Modifications

    The FHWA [State name] Division Office and the [State name DOT/STA 
abbreviation] acknowledge that Agreement modifications (minor revisions 
or amendments) are needed periodically. Either party may initiate a 
request to modify this Agreement.
1. Minor Revisions
    The FHWA [State name] Division Office and the [State name DOT/STA 
abbreviation] may make minor revisions to this Agreement without an 
amendment. For purposes of this Agreement, a minor revision makes a 
technical correction, addresses non-substantive changes such as a 
change in points-of-contact or document names, or revises aspects of 
procedures that do not materially change the terms of this Agreement. 
Changes to Attachments B or C are considered minor revisions. Minor 
revisions are recorded in a change log by the FHWA [State name] 
Division Office. Minor revisions may be executed without FHWA legal 
sufficiency review or coordination with FHWA's Office of 
Infrastructure.
2. Amendments
    Modifications to this Agreement that exceed the definition of a 
minor revision in paragraph B.1. of this section shall require 
execution of an amendment to this Agreement. Amendments include any 
change to Attachment A. The amendment shall follow the execution 
procedure set forth in paragraph A of this section. Amendments require 
FHWA legal sufficiency review and coordination with FHWA's Office of 
Infrastructure.

New Agreement

    This Agreement will be replaced in its entirety and a new Agreement 
executed between the FHWA [State name] Division Office and the [State 
name DOT/STA abbreviation] when mutually agreed upon by the parties, or 
as requested by the FHWA Office of Infrastructure. New Agreements 
require FHWA legal sufficiency review and coordination with FHWA's 
Office of Infrastructure prior to execution.
    The electronic Agreement file shall contain the executed Agreement, 
any change logs, and amendments.

IX. Agreement Term and Termination

    A. This Agreement shall have a term of [insert term of no greater 
than six (6) years] years, effective on the date of the signature of 
the FHWA [State name] Division Administrator in accordance with section 
VIII(A) of this Agreement.
    B. Before the expiration of the term of this Agreement, a new 
agreement must be executed by both parties or the Agreement will expire 
(refer to section VIII.C. and IX.D.).
    C. The FHWA [State name] Division Office may terminate this 
Agreement at any time if the FHWA [State name] Division Office 
determines that this Agreement is no longer in the public interest. 
Except in an extraordinary circumstance where immediate action is 
needed, prior to termination, the FHWA [State name] Division Office 
will issue a written notice to the [State name DOT/STA abbreviation] 
describing the FHWA's [State name] Division Office concerns and give 
the [State name DOT/STA abbreviation] a reasonable period of time to 
submit a written response addressing the FHWA [State name] Division 
Office concerns. The FHWA [State name] Division Office shall review the 
[State name DOT/STA abbreviation] response and make a final 
determination within 30 business days of receipt of the [State name 
DOT/STA abbreviation] response. The FHWA [State name] Division Office 
will notify the [State name DOT/STA abbreviation] in writing of the 
final determination and the effective date of any termination.
    D. Expiration or termination of this Agreement shall mean that the 
assumption of project approvals by the [State name DOT/STA 
abbreviation] as set forth in this Agreement and Attachment A hereto is 
automatically revoked upon the date of expiration or termination and 
the [State name DOT/STA abbreviation] must immediately cease exercising 
any decision, determination, or action under the authority of this 
Agreement, including any amendments.

Attachment A: Project Action Responsibility Matrix

    This matrix identifies the Federal-aid highway program (FAHP) 
project approvals and related responsibilities. The matrix specifies 
which actions are assumed by the [State name DOT/STA abbreviation] 
pursuant to this Stewardship and Oversight Agreement (``Agreement'') 
and certain other applicable authorities as specified in the tables in 
this Attachment A.
    The [State name DOT/STA abbreviation] is responsible for ensuring 
all individual elements of the project are eligible for FAHP funding. 
Where the [State name DOT/STA abbreviation] assumes authority to make a 
decision, approval, determination or action, the [State name DOT/STA 
abbreviation] decision does not constitute an eligibility, obligation, 
reimbursement, authorization, or compliance decision by or for the 
Federal Highway Administration (FHWA). Final

[[Page 78198]]

decisions on those matters must be made by FHWA.

                                          Table 1--Financial Management
----------------------------------------------------------------------------------------------------------------
                                                                                                     Agency
               #                                  Action                          Agency        responsible non-
                                                                             responsible NHS          NHS
----------------------------------------------------------------------------------------------------------------
1.............................  Review and accept financial plan and        FHWA.............  FHWA.
                                 annual updates for Federal major projects
                                 [23 U.S.C. 106(h)].
2.............................  Review cost estimates for Federal major     FHWA.............  FHWA.
                                 projects [23 U.S.C. 106(h)].
3.............................  Obligate funds/authorize Federal-aid        FHWA.............  FHWA.
                                 project agreement (including advance
                                 construction authorization and
                                 conversion), modifications, and project
                                 closures (project authorizations) [23
                                 U.S.C. 106(a)(2), 23 CFR 630.106,
                                 630.703, 630.709].
4.............................  Authorize to advertise for bids when all    FHWA or STATE....  STATE.
                                 preconditions are met [23 CFR 635.112(a),
                                 635.309].
5.............................  Approve reimbursements including            FHWA.............  FHWA.
                                 authorizing current bill (23 U.S.C. 121).
6.............................  Approval of reimbursement for bond-issue    FHWA.............  FHWA.
                                 projects [23 U.S.C. 122, 23 CFR part 140,
                                 Subpart F].
----------------------------------------------------------------------------------------------------------------


                                              Table 2--Environment
----------------------------------------------------------------------------------------------------------------
                                                                                                     Agency
               #                                  Action                          Agency        responsible non-
                                                                             responsible NHS          NHS
----------------------------------------------------------------------------------------------------------------
7.............................  EA/FONSI, EIS/ROD, 4(f), 106, 6(f) and      FHWA or            FHWA or
                                 other approval actions required by          Administered in    Administered in
                                 Federal environmental laws and              accordance with    accordance with
                                 regulations (Note: The FHWA may assign      23 U.S.C. 327      23 U.S.C. 327
                                 these NEPA actions and other                MOU.               MOU.
                                 environmental responsibilities to a State
                                 DOT as provided by 23 U.S.C. 327).
8.............................  Categorical exclusion approval actions      FHWA or            FHWA or
                                 [Note: The FHWA may assign this action      Administered in    Administered in
                                 and other FHWA environmental                accordance with    accordance with
                                 responsibilities to a State DOT as          applicable 23      applicable 23
                                 provided by 23 U.S.C. 326 and 327. The      U.S.C. 326 or      U.S.C. 326 or
                                 FHWA also may administratively delegate     327 MOUs, or       327 MOUs, or
                                 responsibility for categorical exclusion    Programmatic       Programmatic
                                 determinations to a State DOT through a     Categorical        Categorical
                                 programmatic agreement pursuant to          Exclusion          Exclusion
                                 Section 1318(d) of MAP-21 and               Agreement.         Agreement.
                                 implementing regulations in 23 CFR
                                 771.117(g)].
----------------------------------------------------------------------------------------------------------------


                                           Table 3--Preliminary Design
----------------------------------------------------------------------------------------------------------------
                                                                                                     Agency
               #                                  Action                          Agency        responsible non-
                                                                             responsible NHS          NHS
----------------------------------------------------------------------------------------------------------------
9.............................  Approval before utilizing a consultant to   FHWA or            FHWA or
                                 act in a management support role for the    Administered in    Administered in
                                 contracting agency [23 CFR                  accordance with    accordance with
                                 172.7(b)(5)(i)].                            procedures         procedures
                                                                             approved per 23    approved per 23
                                                                             CFR 172.5(c).      CFR 172.5(c).
10............................  Approval of noncompetitive procurement      FHWA or STATE....  STATE.
                                 method for engineering and design-related
                                 services [23 CFR 172.7(a)(3)].
11............................  Approve exceptions to design standards [23  FHWA or STATE....  Not subject to 23
                                 CFR 625.3(f)].                                                 CFR 625.3(f).
12............................  Airport highway clearance coordination and  FHWA or STATE....  STATE.
                                 respective public interest finding (if
                                 required).
                                [23 CFR 620.104]..........................
13............................  Approve project management plan for         FHWA.............  FHWA.
                                 Federal major projects [23 U.S.C. 106(h)].
14............................  Approval of Interstate System access        FHWA.............  Not subject to 23
                                 change [23 U.S.C. 111].                                        U.S.C. 111.
15............................  Determine the engineering and operational   FHWA.............  Not subject to
                                 acceptability of points of ingress or                         23 U.S.C. 111(e).
                                 egress with the Interstate System
                                 (justification reports) for new freeway-
                                 freeway interchanges (system),
                                 modification of freeway-freeway
                                 interchanges, and new partial
                                 interchanges or new ramps to/from
                                 continuous frontage roads that create a
                                 partial interchange [23 U.S.C. 111(e)].
16............................  Determine the engineering and operational   FHWA or            Not subject to 23
                                 acceptability of points of ingress or       Administered in    U.S.C. 111(e).
                                 egress with the Interstate System           Accordance with
                                 (justification reports) for new and         Programmatic
                                 modified freeway-to-crossroad (service)     Agreement.
                                 interchanges, and completion of basic
                                 movements at existing partial
                                 interchanges. [23 U.S.C. 111(e)].
17............................  Approve innovative and public-private       FHWA.............  FHWA.
                                 partnership projects in accordance with
                                 TE-045, SEP-14, SEP-15, or SEP-16. [23
                                 U.S.C. 502(b)].
18............................  Approve any betterment to be incorporated   FHWA.............  FHWA.
                                 into the project and for which emergency
                                 relief funding is requested (23 U.S.C.
                                 125, 23 CFR 668.109).

[[Page 78199]]

 
19............................  Prior written approval of the Federal       FHWA.............  FHWA.
                                 awarding agency for the direct charge of
                                 up-front acquisition cost of equipment (2
                                 CFR 200.439).
----------------------------------------------------------------------------------------------------------------


                                              Table 4--Final Design
----------------------------------------------------------------------------------------------------------------
                                                                                                     Agency
               #                                  Action                          Agency        responsible non-
                                                                             responsible NHS          NHS
----------------------------------------------------------------------------------------------------------------
20............................  Approve retaining right-of-way              FHWA or STATE....  STATE.
                                 encroachments [23 CFR 1.23(b), 1.23(c)].
21............................  Approve use of publicly owned equipment     FHWA or STATE....  STATE.
                                 [23 CFR 635.106].
22............................  Concur in use of publicly furnished         FHWA or STATE....  STATE.
                                 materials [23 CFR 635.407(a)].
23............................  Determine use of more costly signing,       FHWA or STATE....  STATE.
                                 pavement marking and signal materials (or
                                 equipment) is in the public interest [23
                                 CFR 655.606].
24............................  Exception to designation of Interstate      FHWA or STATE....  Not subject to23
                                 project as significant for work zones [23                      CFR 630.1010(d).
                                 CFR 630.1010(d)].
25............................  Determination that a United States Coast    FHWA.............  FHWA.
                                 Guard Permit is not required for bridge
                                 construction [23 CFR 650.805, 650.807, 23
                                 U.S.C. 144(c)].
----------------------------------------------------------------------------------------------------------------


                                                 Table 5--Realty
----------------------------------------------------------------------------------------------------------------
                                                                                                     Agency
               #                                  Action                          Agency        responsible non-
                                                                             responsible NHS          NHS
----------------------------------------------------------------------------------------------------------------
26............................  Completion of ROW clearance, utility, and   FHWA or STATE....  STATE.
                                 railroad work concurrently with
                                 construction: Make feasibility/
                                 practicability determination for allowing
                                 authorization to advertise for bids or to
                                 proceed with force account construction
                                 prior to completion of ROW clearance,
                                 utility and railroad work [23 CFR
                                 635.309(b)].
27............................  Approve non-highway use and occupancy of    FHWA for           STATE.
                                 real property interests [23 CFR 1.23(c),    Interstate.
                                 710.405].                                  FHWA or STATE for
                                                                            Non-Interstate...
28............................  Approve disposal at fair market value of    FHWA for           STATE.
                                 real property acquired with Federal-aid     Interstate.
                                 assistance, including disposals of access  FHWA or STATE for
                                 control [23 CFR 710.403(e), 710.409].       Non-Interstate.
29............................  Approve disposal at less than fair market   FHWA.............  FHWA.
                                 value of federally funded right-of-way,
                                 including disposals of access control [23
                                 U.S.C. 156, 23 CFR 710.403(e)].
30............................  Conditional ROW certification, bid          FHWA or STATE....  STATE.
                                 advertisement: Make public interest
                                 finding on whether State may proceed with
                                 bid advertisement even though ROW
                                 acquisition/relocation activities are not
                                 complete for some parcels [23 CFR
                                 635.309(c)(3)(i)].
31............................  Conditional ROW certification,              FHWA.............  FHWA.
                                 construction--Make finding of exceptional
                                 circumstances that make it in the public
                                 interest to allow State to proceed with
                                 construction even though ROW acquisition/
                                 relocation activities are not complete
                                 for some parcels [23 CFR
                                 635.309(c)(3)(ii)].
32............................  Approve hardship and protective buying [23  FHWA.............  FHWA.
                                 CFR 710.503].
33............................  Requests for credits toward the non-        FHWA.............  FHWA.
                                 Federal share of construction costs for
                                 early acquisitions, donations or other
                                 contributions applied to a project [23
                                 U.S.C. 323, 23 CFR 710.507].
34............................  Federal land transfers [23 CFR part 710,    FHWA.............  FHWA.
                                 subpart F].
35............................  Functional replacement of property [23 CFR  FHWA.............  FHWA.
                                 710.509].
36............................  Waiver of the policy of the availability    FHWA.............  FHWA.
                                 of comparable replacement dwelling before
                                 displacement under specified
                                 circumstances [49 CFR 24.204(b)].
----------------------------------------------------------------------------------------------------------------


                                          Table 6--PS&E and Advertising
----------------------------------------------------------------------------------------------------------------
                                                                                                     Agency
               #                                  Action                          Agency        responsible non-
                                                                             responsible NHS          NHS
----------------------------------------------------------------------------------------------------------------
37............................  Approve PS&E [23 CFR 635.309(a)]..........  FHWA or STATE....  STATE.
38............................  Approve utility or railroad force account   FHWA or STATE....  STATE.
                                 work (23 CFR 140.916, 645.113, 646.216).
39............................  Approve utility and railroad agreements     FHWA or STATE....  STATE.
                                 (23 CFR 140.916, 645.113, 646.216).
40............................  Approve use of consultants by utility and   FHWA or STATE....  STATE.
                                 railroad companies [23 CFR 645.109(b),
                                 646.216(b)].
41............................  Approve exceptions to maximum railroad      FHWA or STATE....  STATE.
                                 protective insurance limits (23 CFR
                                 140.916, 646.111).
42............................  Approve use of guaranty and warranty        FHWA or STATE....  STATE.
                                 clauses for projects other than design-
                                 build projects [23 CFR 635.413(b)].
43............................  Recovery of railroad material--Approval of  FHWA or STATE....  STATE.
                                 additional measures for restoration of
                                 areas affected by the removal of salvaged
                                 material for Railroad work (23 CFR
                                 140.908).

[[Page 78200]]

 
44............................  Approve use of lump sum payments to         FHWA or STATE....  STATE.
                                 reimburse railroad for work by its forces
                                 [23 CFR 646.216(d)(3)].
45............................  Waive Buy America provisions (23 CFR        FHWA.............  FHWA.
                                 635.410).
46............................  Training special provision--Approval of     FHWA.............  FHWA.
                                 new project training programs [23 CFR
                                 230.111(d), 230.111(e)].
----------------------------------------------------------------------------------------------------------------


                                    Table 7--Contract Advertisement and Award
----------------------------------------------------------------------------------------------------------------
                                                                                                     Agency
               #                                  Action                          Agency        responsible non-
                                                                             responsible NHS          NHS
----------------------------------------------------------------------------------------------------------------
47............................  Approve cost-effectiveness determinations   FHWA or STATE....  STATE.
                                 for construction work performed by
                                 contract awarded by other than
                                 competitive bidding or by force account
                                 (23 CFR 635.104, 635.204).
48............................  Approve emergency determinations for        FHWA or STATE....  STATE.
                                 construction work performed by contract
                                 awarded by other than competitive bidding
                                 or by force account (23 CFR 635.104,
                                 635.204).
49............................  Subrecipient project administration--       FHWA or STATE....  STATE.
                                 Approve arrangements for local agency to
                                 serve as the supervising agency for the
                                 project (23 CFR 635.105).
50............................  Approve advertising period less than 3      FHWA or STATE....  STATE.
                                 weeks [23 CFR 635.112(b)].
51............................  Approve addenda during advertising period   FHWA or STATE....  STATE.
                                 [23 CFR 635.112(c)].
52............................  Concur in award of contract or rejection    FHWA or STATE....  STATE.
                                 of all bids (23 CFR 635.114).
53............................  Approval of design-build requests-for-      FHWA or STATE....  STATE.
                                 proposals (RFP) and addenda for major
                                 changes to the RFP during solicitation
                                 period [23 CFR 635.112(i)(4)].
54............................  Approve award to the next low bidder [23    FHWA or STATE....  STATE.
                                 CFR 635.114(f)].
----------------------------------------------------------------------------------------------------------------


                                              Table 8--Construction
----------------------------------------------------------------------------------------------------------------
                                                                                                     Agency
               #                                  Action                          Agency        responsible non-
                                                                             responsible NHS          NHS
----------------------------------------------------------------------------------------------------------------
55............................  Approve contract changes and extra work     FHWA or STATE....  STATE.
                                 (23 CFR 635.120).
56............................  Approve contract time extensions [23 CFR    FHWA or STATE....  STATE.
                                 635.120, 635.121(b)].
57............................  Concur in use of mandatory borrow/disposal  FHWA or STATE....  STATE.
                                 sites (23 CFR 635.407).
58............................  Approval of administrative settlements and  FHWA or STATE....  STATE.
                                 contract claim awards and settlements (23
                                 CFR 140.505, 635.124).
59............................  Concur in termination of construction       FHWA or STATE....  STATE.
                                 contracts [23 CFR 635.125(b)].
----------------------------------------------------------------------------------------------------------------


  Table 9--Construction Manager/General Contractor (CM/GC) and Indefinite Delivery/Indefinite Quantity (ID/IQ)
                                                   Contracting
----------------------------------------------------------------------------------------------------------------
                                                                                                     Agency
               #                                  Action                          Agency        responsible non-
                                                                             responsible NHS          NHS
----------------------------------------------------------------------------------------------------------------
60............................  Approval of advertising for bids or         FHWA or STATE....  STATE.
                                 proposals for a CM/GC construction
                                 services phase contract [23 CFR
                                 635.504(b)(6)].
61............................  Determination of indirect cost rate for     FHWA or STATE....  STATE.
                                 preconstruction services for a CM/GC
                                 project in accordance with [23 CFR
                                 635.504(e)(2)].
62............................  Approval of preconstruction price and cost/ FHWA or STATE....  STATE.
                                 price analysis for preconstruction
                                 services for a CM/GC project [23 CFR
                                 635.506(b)(2)].
63............................  Approval of price estimate for              FHWA or STATE....  STATE.
                                 construction costs for the entire project
                                 for CM/GC project [23 CFR 635.506(d)(2)].
64............................  Approval of construction price analysis     FHWA or STATE....  STATE.
                                 and agreed price for construction
                                 services of a CM/GC project or portion of
                                 the project [23 CFR 635.506(d)(4)].
65............................  Approval of CM/GC project preconstruction   FHWA or STATE....  STATE.
                                 services contract award [23 CFR
                                 635.506(e)].
66............................  Concur in advertising an ID/IQ              FHWA or STATE....  STATE.
                                 solicitation prior to completion of NEPA
                                 [23 CFR 635.605(a)(2)].
67............................  Concur in awarding an ID/IQ contract prior  FHWA or STATE....  STATE.
                                 to completion of NEPA [23 CFR
                                 635.605(a)(3)].
68............................  Approve a time extension of an ID/IQ        FHWA or STATE....  STATE.
                                 contract [23 CFR 635.604(a)(6)(i)].
----------------------------------------------------------------------------------------------------------------


[[Page 78201]]

Attachment B (Drafting Example): Manuals, Agreements, Control, 
Monitoring, And Reporting Documents

    State department of transportation (State DOT) manuals, agreements 
and other control, monitoring, and reporting documents that are used on 
Federal-aid projects. (The following provides examples of the types of 
manuals, guidelines and procedures that will be listed in Attachment B 
and the type of information needed for each document. The format is 
optional and the items listed are not all inclusive or applicable to 
all States.)

Example for Construction Specifications

 Standard Specifications
    [cir] Elements that require the Federal Highway Administration 
(FHWA) approval:
    [ssquf] Specifications that will be used on the National Highway 
System (NHS). (23 CFR 625.3)

Example State DOT Manuals That Will Be Used on Federal-Aid Projects

 Highway Design Manual--information and guidance to design road 
projects.
    [cir] Elements that require FHWA approval:
    [ssquf] Roadway design standards for 3R and preventative 
maintenance projects on the NHS. [23 CFR 625.3, 625.4(a)(3)]
    [cir] Elements required by Federal law or regulation included in 
this manual that do not require FHWA approval:
    [ssquf] Erosion and Sediment Control Guidelines (23 CFR 650.211)
 Right of Way Manual--right-of-way organization, policies, and 
procedures. Describes functions and procedures for all phases of the 
real estate program, including appraisal and appraisal review, 
negotiation and eminent domain, property management, and relocation 
assistance.
    [cir] Elements that require FHWA approval:
    [ssquf] All elements. Right-of-way organization, policies, and 
procedures (23 CFR 710.201)

Additional Manuals, Agreements, Control, Monitoring, and Reporting 
Documents

 Noise Analysis and Abatement Policy (23 CFR part 772)
 Programmatic Agreement for Processing Interstate Access 
Requests (MAP-21, Section 1505)
 Asset Management Plan [23 U.S.C 119(e)(5)]
 Value Engineering Policy and Procedures [23 CFR 627.1]
 Quality Assurance Program [23 CFR 637.205]
 Construction Manager/General Contractor (CM/GC) procurement 
procedures [23 CFR 635.504(c)]
 Pavement Design Policy [23 CFR part 626]

Attachment C (Drafting Example): Stewardship and Oversight Indicators

    Indicators used to monitor assumptions of responsibility per 
section VI. C. of this Agreement. (This list is provided as an example. 
The format is optional and the items listed are not all inclusive or 
applicable to all states).

Example Stewardship a6nd Oversight Indicator

     Fiscal year Disadvantaged Business Enterprise (DBE) 
overall participation rate.
     Percent of DBE goal achieved.
     Average number of bidders per project per type of work per 
year.
     Percent of projects with low bid within +/- 10 percent of 
Engineer's Estimate.
     Percentage of projects that are awarded within 120 days of 
authorization.
     Number of National Bridge Inspection Standards metrics 
that are fully compliant.
     Percent of environmental mitigation commitments completed.
     Average number of days between the date of project final 
acceptance by State department of transportation and project close out 
date in the Financial Management Information System (FMIS).
     Percent of projects closed out with final costs within 110 
percent of award amount.
     Percent of projects closed out with final time expended 
within 135 percent of original contract time.
     Percent of current year projects in the State 
Transportation Improvement Program advanced as scheduled.
     Percent of projects with right-of-way (ROW) acquired by 
acquisition due date.
     Number of projects with conditional ROW certifications.
     Number of disposals of excess ROW below fair market value.
     Number of non-Interstate access breaks and/or 
encroachments approved.
     Number of modifications to project end dates in FMIS.
     Expenditures determined to be ineligible for Federal 
participation.

[FR Doc. 2022-27705 Filed 12-20-22; 8:45 am]
BILLING CODE 4910-22-P