[Federal Register Volume 89, Number 128 (Wednesday, July 3, 2024)]
[Rules and Regulations]
[Pages 55088-55091]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-14318]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Parts 23 and 26

[Docket No. DOT-OST-2022-0051]
RIN 2105-AE98


Disadvantaged Business Enterprise and Airport Concession 
Disadvantaged Business Enterprise Program Implementation Modifications; 
Corrections

AGENCY: Office of the Secretary (OST), U.S. Department of 
Transportation (DOT or the Department).

ACTION: Correcting amendments.

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SUMMARY: The U.S. Department of Transportation (DOT or Department) is 
correcting a final rule that appeared in the Federal Register on April 
9, 2024, concerning the Disadvantaged Business Enterprise (DBE) and 
Airport Concession Disadvantaged Business Enterprise (ACDBE) program 
regulations.

DATES: Effective on July 3, 2024.

FOR FURTHER INFORMATION CONTACT: For questions related to the final 
rule or general information about the DBE and ACDBE Program 
regulations, please contact Marc D. Pentino, Associate Director, 
Disadvantaged Business Enterprise Programs Division, Departmental 
Office of Civil Rights, Office of the Secretary, U.S. Department of 
Transportation, 1200 New Jersey Avenue SE, Room W78-302, Washington, DC 
20590 at 202-366-6968/[email protected] or Lakwame Anyane-Yeboa, 
ACDBE and DBE Compliance Lead, Disadvantaged Business Enterprise 
Programs Division, Departmental Office of Civil Rights, Office of the 
Secretary, U.S. Department of Transportation, 1200 New Jersey Avenue 
SE, Room W78-103, Washington, DC 20590, at 202-366-9361/[email protected]. Questions concerning part 23 amendments should be 
directed to Marcus England, Office of Civil Rights, National Airport 
Civil Rights Policy and Compliance (ACR-4C), Federal Aviation 
Administration, 600 Independence Ave. SW, Washington, DC 20591 at 202-267-0487/[email protected] or Nicholas Giles, Office of Civil 
Rights, National Airport Civil Rights Policy and Compliance (ACR-4C), 
Federal Aviation Administration, 600 Independence Ave. SW, Washington, 
DC 20591, at 202-267-0201/[email protected]. Office hours are from 
8 a.m. to 4:30 p.m., E.T., Monday through Friday, except Federal 
holidays.

SUPPLEMENTARY INFORMATION:

Background

    The Department identified technical errors in the Federal Register 
Document 2024-05583 published in the Federal Register on April 9, 2024 
(89 FR 24898); ``Disadvantaged Business Enterprise and Airport 
Concession Disadvantaged Business Enterprise Program Implementation 
Modifications''. This document corrects technical/typographical errors. 
It also clarifies that the current personal net worth (PNW) limit as of 
May 9, 2024 is $2.047 million, as detailed in sections Sec. Sec.  
23.35(a) and 26.68(a) and as indicated in the preamble to the final 
rule. Adjustments to this limit will start on May 9, 2027, based on the 
formula in sections Sec. Sec.  23.35(b), (c) and 26.68(d). For FTA-
assisted programs, FTA Tier II recipients do not need to set goals if 
they operate a race-neutral DBE program. Additionally, this document 
clarifies that Good Faith Efforts are required in certain situations 
described in 26.53(g).

List of Subjects in 49 CFR Part 23 and 26

    Administrative practice and procedure, Airports, Civil Rights, 
Government contracts, Grant programs--transportation; Mass 
transportation, Minority Businesses, Reporting and recordkeeping 
requirements.

    Accordingly, 49 CFR parts 23 and 26 are corrected by making the 
following correcting amendments.

PART 23--PARTICIPATION OF DISADVANTAGED BUSINESS ENTERPRISE IN 
AIRPORT CONCESSIONS

0
1. The authority citation for part 23 is revised to read as follows:

    Authority:  49 U.S.C. 47107 and 47113; 42 U.S.C. 2000d; 49 
U.S.C. 322; E.O. 12138, 44 FR 29637, 3 CFR, 1979 Comp., p. 393.


0
2. Revise Sec.  23.35 to read as follows:


Sec.  23.35  What role do business development and mentor-
prot[eacute]g[eacute] programs have in the DBE program?

    (a) An owner whose PNW exceeds $2,047,000 is not presumed 
economically disadvantaged.
    (b) The Department will adjust the PNW cap by May 9, 2027 by 
multiplying $1,600,000 by the growth in total household net worth since 
2019 as described by ``Financial Accounts of the United States: Balance 
Sheet of Households (Supplementary Table B.101.h)'' produced by the 
Board of Governors of the Federal Reserve (https://www.federalreserve.gov/releases/z1/), and normalized by the total 
number of households as collected by the Census in ``Families and 
Living Arrangements'' (https://www.census.gov/topics/families/families-and-households.html) to account for population growth. The Department 
will adjust the PNW cap every 3 years on the anniversary of the 
adjustment date described in this section. The Department will post the 
adjustments on the Departmental Office of Civil Rights' web page, 
available at https://www.Transportation.gov/DBEPNW. Each such 
adjustment will become the currently applicable PNW limit for purposes 
of this regulation.
    (c) The Department will use formula 1 to this paragraph (c) to 
adjust the PNW limit:

Formula 1 to Paragraph (c)

[[Page 55089]]

[GRAPHIC] [TIFF OMITTED] TR03JY24.130

PART 26--PARTICIPATION BY DISADVANTAGED BUSINESS ENTERPRISES IN 
DEPARTMENT OF TRANSPORTATION FINANCIAL ASSISTANCE PROGRAMS

0
3. The authority citation for part 26 continues to read as follows:

    Authority: 23 U.S.C. 304 and 324; 42 U.S.C. 2000d, et seq.; 49 
U.S.C. 47113, 47123; Sec. 1101(b), Pub. L. 114-94, 129 Stat. 1312, 
1324 (23 U.S.C. 101 note); Sec. 150, Pub. L. 115-254, 132 Stat. 3215 
(23 U.S.C. 101 note); Pub. L. 117-58, 135 Stat. 429 (23 U.S.C. 101 
note).


0
4. Revise Sec.  26.5 section heading to read as follows:


Sec.  26.5  Definitions.

* * * * *


Sec.  26.29  [Amended]

0
5. In Sec.  26.29 amend paragraph (f) by adding the word ``all'' before 
text ``lower-tier subcontractors''.


Sec.  26.31  [Amended]

0
6. In Sec.  26.31, in the second sentence of paragraph b, removing the 
citation ``Sec.  26.81(n)(1) and (3)'' and adding the citation ``Sec.  
26.73(a)'' in its place.

0
7. In Sec.  26.45, revise paragraph (a)(2) to read as follows:


Sec.  26.45  How do recipients set overall goals?

    (a) * * *
    (2) If you are an FTA Tier II recipient who intends to operate a 
race-neutral DBE program, or if you are an FAA recipient who reasonably 
anticipates awarding $250,000 or less in FAA prime contract funds in a 
Federal fiscal year, you are not required to develop overall goals for 
FTA or FAA, respectively, for that Federal fiscal year.
* * * * *

0
8. In Sec.  26.53, revise paragraph (g) to read as follows:


Sec.  26.53  What are the good faith efforts procedures recipients 
follow in situations where there are contract goals?

* * * * *
    (g) When a DBE subcontractor or any portion of its work is 
terminated by the prime contractor as provided in paragraph (f) of this 
section, or the firm fails to complete its work on the contract for any 
reason, including when work committed to a DBE is not countable or 
reduced due to overestimations made prior to award, the prime 
contractor must use good faith efforts to include additional DBE 
participation to the extent needed to meet the contract goal. The good 
faith efforts shall be documented by the contractor. If the recipient 
requests documentation under this provision, the contractor shall 
submit the documentation within 7 days, which may be extended for an 
additional 7 days, if necessary, at the request of the contractor, and 
the recipient shall provide a written determination to the contractor 
stating whether or not good faith efforts have been demonstrated.
* * * * *


Sec.  26.55  [Amended]

0
9. Amend Sec.  26.55 by:
0
a. In paragraph (e)(2)(ii), by removing the text ``and-operates'' and 
adding the text ``and operates'' in its place: and
0
b. In paragraph (e)(2)(iv)(B), by removing the text ``, operating, or 
maintaining'' and adding the text ``and operating'' in its place.

0
10. In Sec.  26.65, revise paragraph (b) to read as follows:


Sec.  26.65  Business Size Determinations.

* * * * *
    (b) Statutory Cap. Even if a firm is a small business under 
paragraph (a) of this section, it is ineligible to perform DBE work on 
FHWA or FTA assisted contracts if its affiliated annual gross receipts, 
as defined in 13 CFR 121.104, averaged over the firm's previous three 
fiscal years exceed $30.72 million (as of March 1, 2024). The 
Department will adjust this amount annually and post the adjusted 
amount on its website available at https://www.transportation.gov/
DBEsizestandards.


Sec.  26.67  [Amended]

0
11. In Sec.  26.67, in the last sentence of paragraph (a)(3)(iv), 
remove the text ``paragraph (e)'' and add the text ``paragraph (d)'' in 
its place.

0
12. In Sec.  26.68, revise paragraphs (a) and (d) to read as follows:


Sec.  26.68  Personal net worth.

    (a) General. An owner whose PNW exceeds $2,047,000 is not presumed 
economically disadvantaged. The Department will adjust the PNW cap 
pursuant to paragraph (d) of this section.
* * * * *
    (d) Regulatory adjustments. (1) The Department will adjust the PNW 
cap by May 9, 2027 by multiplying $1,600,000 by the growth in total 
household net worth since 2019 as described by ``Financial Accounts of 
the United States: Balance Sheet of Households (Supplementary Table 
B.101.h)'' produced by the Board of Governors of the Federal Reserve 
(https://www.federalreserve.gov/releases/z1/), and normalized by the 
total number of households as collected by the Census in ``Families and 
Living Arrangements'' (https://www.census.gov/topics/families/families-and-households.html) to account for population growth. The Department 
will adjust the PNW cap every 3 years on the anniversary of the 
adjustment date described in this section. The Department will post the 
adjustments on the Departmental Office of Civil Rights' web page, 
available at https://www.Transportation.gov/DBEPNW. Each such 
adjustment will become the currently applicable PNW limit for purposes 
of this regulation.
    (2) The Department will use formula 1 to this paragraph (d)(2) to 
adjust the PNW limit:

Formula 1 to Paragraph (d)

[[Page 55090]]

[GRAPHIC] [TIFF OMITTED] TR03JY24.131

* * * * *

0
13. Amend Sec.  26.81 by:
0
a. Revising section heading; and
0
b. In paragraph (d) removing the phrase ``home state'' and adding in 
its place the phrase ``Jurisdiction of Original Certification''.
    The revision reads as follows:


Sec.  26.81  Unified Certification Programs.

* * * * *


Sec.  26.83  [Amended]

0
14. Amend Sec.  26.83 by:
0
a. In paragraph (c)(2), removing phrase ``provided in Appendix F to 
this part'' and adding phrase ``available at https://transportation.gov/DBEFORMS'' in its place;
0
b. In paragraph (d) removing the word ``recipient'' wherever it appears 
and adding the word ``certifier'' in its place;
0
c. In paragraph (i) removing the word ``recipient'' and adding the word 
``certifier'' in its place; and
0
d. Removing paragraph (l)(2) and redesignating paragraph (l) 
introductory text as paragraph (l)(1) and paragraph (l)(1) as paragraph 
(l)(2).


Sec.  26.85  [Amended]

0
15. Amend Sec.  26.85 by:
0
a. In paragraph (c)(1), removing the phrase ``A cover letter with its 
application that specifies that the DBE is applying for interstate 
certification'' and adding the phrase ``A cover letter that specifies 
that the DBE is applying for interstate certification'' in its place;
0
b. In paragraph (h)(6),
0
i. Removing the phrase ``this paragraph (h)(6)'' and adding the phrase 
``paragraph (h)'' in its place; and
0
ii. Removing the text ``26.87(e)(6) (failure to cooperate)'' and adding 
the text ``26.109(c) (failure to cooperate)'' in its place.

0
16. Amend Sec.  26.87 by revising paragraphs (h) and (j) to read as 
follows:


Sec.  26.87  Decertification.

* * * * *
    (h) Status of firm during proceeding. A DBE remains certified until 
the certifier issues a NOD.
* * * * *
    (j) Consequences. Decertification has the following effects on 
contract and overall goals and DBE participation:
    (1) When a prime contractor has made a commitment to use a DBE, but 
a subcontract has not been executed before the certifier issues the NOD 
as provided for in paragraph (g) of this section, the committed firm 
does not count toward the contract goal. The recipient must direct the 
prime contractor to meet the contract goal with an eligible DBE or 
demonstrate to the recipient that it has made good faith efforts to do 
so.
    (2) When the recipient has made a commitment to using a DBE prime 
contractor, but a contract has not been executed before the certifier 
issues the NOD, the decertified firm does not count toward the 
recipient's overall DBE goal.
    (3) If a prime contractor has executed a subcontract with a DBE 
before the certifier issues the NOD, the prime contractor may continue 
to receive credit toward the contract goal for the firm's work. In this 
case, however, the prime contractor may not extend or add work to the 
contract without prior written consent from the recipient.
    (4) If a prime contractor has executed a subcontract with a DBE 
before the certifier issues the NOD, the prime contractor may continue 
to receive credit toward the contract goal as set forth in paragraph 
(j)(3) of this section; however, the portion of the decertified firm's 
continued performance of the contract must not count toward the 
recipient's overall goal.
    (5) If the recipient executed a prime contract with a DBE that was 
later decertified, the portion of the decertified firm's performance of 
the contract remaining after the certifier issued the NOD must not 
count toward an overall goal, but the DBE's performance of the contract 
may continue to count toward satisfying any contract goal.
    (6) The following exceptions apply to this paragraph (j):
    (i) If a certifier decertifies a firm solely because it exceeds the 
business size standard during the performance of the contract, the 
recipient may continue to count the portion of the decertified firm's 
performance of the contract remaining after the certifier issued the 
NOD toward the recipient's overall goal as well as toward the contract 
goal.
    (ii) If the certifier decertifies the DBE because it was acquired 
by or merged with a non-DBE, the recipient may not continue to count 
the portion of the decertified firm's performance on the contract 
remaining, after the certifier issued a NOD, toward either the contract 
goal or the overall goal, even if a prime contractor has executed a 
subcontract with the firm or the recipient has executed a prime 
contract with the DBE that was later decertified. In this case, if 
eliminating the credit of the decertified firm will affect the prime 
contractor's ability to meet the contract goal, the recipient must 
direct the prime contractor to subcontract to an eligible DBE to the 
extent needed to meet the contract goal or demonstrate to the recipient 
that it has made good faith efforts to do so.


Sec.  26.88  [Amended]

0
15. Amend Sec.  26.88 by:
0
a. In paragraph (d)(1)(iii), removing the phrase ``lieu of or in 
addition to attending the hearing'' and adding the phrase ``in lieu of 
or in addition to attending the hearing'' in its place;
0
b. Redesignating paragraph (d)(6) as paragraph (d)(5);
0
c. In paragraph (e)(1):
0
i. Removing the phrase ``under paragraph (c)(5)(iv)'' and adding the 
phrase ``under paragraph (d)(4)(iv) of this section'' in its place; and
0
ii. Removing the phrase ``unless paragraph (d)(2)'' and adding the 
phrase ``unless paragraph (e)(2)'' in its place; and
0
d. In paragraph (e)(2)(ii), removing the text ``paragraph (c)(6)'' and 
adding the text ``paragraph (d)(5)'' in its place.


[[Page 55091]]


    Signed pursuant to authority delegated at 49 CFR 1.27(c) in 
Washington, DC.
Subash Iyer,
Acting General Counsel.
[FR Doc. 2024-14318 Filed 7-2-24; 8:45 am]
BILLING CODE 4910-9X-P