Federal-Aid Project Authorization

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Part 630

[FHWA Docket No. 94-30]

RIN 2125-AD40

Federal-Aid Project Authorization

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The FHWA proposes to amend its regulation on Federal-aid

program approval and project authorization. In light of changes made by

the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) in

the area of statewide planning, and the joint FHWA/Federal Transit

Administration (FTA) regulations implementing those changes, this NPRM

proposes to remove all other project programming provisions from the

FHWA's regulations. This NPRM would also provide more flexible funding

arrangements and make the Federal-aid authorization process more

flexible. Changes contained in related laws are included.

DATES: Written comments are due on or before April 18, 1995. Comments

received after that date will be considered to the extent practicable.

ADDRESSES: All written, signed comments should refer to the docket

number that appears at the top of this document and should be submitted

to Federal Highway Administration, Office of the Chief Counsel, Room

4232, HCC-10, 400 Seventh Street, SW., Washington, D.C. 20590. All

comments received will be available for examination at the above

address between 8:30 a.m. and 3:30 p.m., e.t., Monday through Friday,

except Federal holidays. Those desiring notification of receipt of

comments must include a self-addressed, stamped postcard.

FOR FURTHER INFORMATION CONTACT: Jerry L. Poston, Office of

Engineering, 202-366-0450, or Wilbert Baccus, Office of the Chief

Counsel, 202-366-0780, FHWA, 400 Seventh Street, SW., Washington, D.C.

20590. Office Hours are from 7:45 a.m. to 4:15 p.m., e.t., Monday

through Friday except Federal holidays.

SUPPLEMENTARY INFORMATION: The initiation of work for transportation

projects funded under the Federal-aid highway program is a two-step

process. First, the State, in cooperation and consultation with local

officials, as appropriate, through the metropolitan and statewide

planning process, determines activities which will be advanced with

Federal funds made available under title 23, United States Code, and

the Federal Transit Act (49 U.S.C. 5301-5338) and develops a statewide

program of projects for these activities. Prior to passage of the

ISTEA, the requirements for developing the program of projects were

found in 23 U.S.C. 105 and the implementing regulations in 23 CFR 630,

subpart A. With passage of the ISTEA, title 23, U.S.C., was modified

and the new requirements concerning development of a program of

projects, now referred to as the Statewide transportation improvement

program, are contained in 23 U.S.C. 135. The implementing regulation

for this section are at 23 CFR 450 and were initiated through previous

rulemaking actions.

Accordingly, those requirements pertaining to a program of projects

in 23 CFR 630, subpart A, no longer need to be retained. The FHWA

therefore proposes to eliminate Secs. 630.106, 630.108, 630.110 and

630.112 along with inappropriate programming references from the

existing regulation.

The second step in initiation of work is the project authorization

process. The State highway agency (SHA) requests FHWA authorization to

proceed with a proposed Federal-aid highway project. [[Page 9307]] The

FHWA authorization commits the Federal Government to participate in the

funding of a project, except in those instances where the State

requests FHWA authorization without the commitment of Federal funds. In

addition, FHWA authorization also establishes a point in time after

which costs incurred on a project are eligible for Federal

participation. Requirements covering project authorization are also

contained in 23 CFR 630, subpart A. The FHWA proposes to modify certain

of these requirements, both for clarification and to provide the SHA a

greater degree of flexibility on certain funding arrangements. These

modifications are discussed in the following section-by-section

analysis.

Section-By-Section Analysis

Section 630.102 Purpose

The statement of purpose would be revised to eliminate the

reference to programming of projects since this activity would be

eliminated from this subpart.

Section 630.104 Applicability

The existing Sec. 630.104, Definitions, would be replaced with a

new section to identify the types of projects that are covered by this

subpart. FHWA planning and research funds, as defined in 23 CFR

420.103, are authorized using the procedures in the regulations dealing

specifically with these types of projects. At times, certain special

funding categories may have unique authorization requirements and these

types of projects are authorized as set out in implementing

instructions or regulations.

Section 630.106 Authorization to Proceed

Current Sec. 630.106, Policy, would be removed. A new Sec. 630.106,

Authorization to proceed, would be redesignated from current

Sec. 630.114 covering the authorization process. It retains many of the

basic principles set forth in existing Sec. 630.114. However, there are

modifications to provide greater flexibility in some funding areas and

additions for clarification. The following discussion covers proposed

Sec. 630.106 by individual paragraph.

Paragraph (a) would retain the requirement that FHWA authorization

to proceed with a Federal-aid project will only be given in response to

a request from the SHA, and then only if the applicable requirements in

law have been satisfied for the project.

Paragraph (b) would retain the longstanding requirement that

Federal-aid funds will only participate in costs incurred after the

date the FHWA has authorized the State to proceed with the project.

However, exceptions to this requirement have been allowed under a

process set forth in 23 CFR 1.9(b). For informational purposes, wording

has been included in paragraph (b) to identify and cross reference the

exception process.

Paragraphs (c), (d) and (e) would retain the requirement that at

the time a Federal-aid project is authorized, the appropriate Federal

funds for this project must be available. Five general categories for

exceptions to this rule are presented, these being the same five

categories that are in the existing regulation.

Paragraph (f) is new and would be added for purposes of

clarification. The FHWA authorization represents a contractual action

by the FHWA and the Federal share of eligible costs must be agreed upon

when the authorization occurs. The Federal share may be in the form of

a specified percentage of eligible costs or a lump sum amount. Use of

the lump sum share is a relatively new concept and is introduced to

accommodate those instances where there is a desire to commit a fixed

amount of Federal funds to a project. The lump sum amount may not

exceed the legal pro rata share for the Federal funds involved. This

may require downward adjustment of the lump sum amount when costs of

eligible work on a project are less than the initial estimates at the

time of FHWA authorization.

The Federal share agreed to at FHWA authorization would continue

through the life of the project. Manipulation of funding levels of

individual projects to accommodate program funding changes or needs

would not be allowed. However, adjustments to the Federal share would

be permitted for projects in situations where bid prices are

significantly different from the estimates at the time of FHWA

authorization.

Paragraph (g) is new and would incorporate the cost sharing

principles of title 23, U.S.C., into the regulation. For Federal-aid

projects, the Federal share of eligible costs incurred by the State

cannot exceed the maximum share permitted by legislation. There is an

agreed to Federal share of eligible costs and the non-Federal share of

eligible costs must come from State funds (State match). Local

government funds are considered to be State funds. Thus, local

government funds can be combined with SHA funds to cover the required

State match of eligible costs.

Cash contributions from private sources are a different matter.

FHWA participates in costs incurred on Federal-aid projects. Donations

of private cash contributions for a specific Federal-aid project reduce

the cost incurred; therefore, the private funds cannot be used to

reduce the required State match. Private cash contributions can be

applied to either eligible or ineligible items of work. However, when a

private cash contribution is applied to costs eligible for Federal

participation, the private cash contribution is considered to have

reduced the cost of the project and thus reduced the cost incurred by

the State.

On the other hand, if a private cash contribution is made to a

State or local government with no designation to a specific project,

then the private cash contribution can be treated as funds of the State

or local government and may be used in any way State or local funds are

authorized to be used, including providing State match on Federal-aid

projects.

Contributions of funds from other Federal agencies to a specific

project are for the most part treated similarly to private cash

donations. These other Federal agency funds may not be used to provide

the required State match on a Federal-aid project but, instead, are

viewed as having reduced the cost incurred by the State on the project.

The only exception is in those cases where the other Federal agency has

specific legislative authority to use its funds to match other Federal

funds.

Paragraph (h) is new and would require that all contributions to a

project be accounted for and properly credited to the project. The sum

of cash contributions from all sources plus the Federal funds may not

exceed the total cost of the project.

Paragraph (i) is new and would incorporate into the regulation the

provision in 23 U.S.C. 120(i) that allows the State to contribute more

than the normal State match on a Federal-aid project. This provision

has been interpreted to mean that a State may overmatch without being

tied to a mandatory Federal share. However, token financing, such as

when the Federal share represents only a minor percentage of eligible

work or when large contributions are applied to the project to reduce

the total cost, would not be permitted. As a general rule of thumb, it

would be expected that the amount of Federal funds requested will

represent at least 50 percent of eligible project costs. Exceptions to

the 50 percent level should be based on sound project development or

management reasons.

The following table is provided to assist the user in locating

regulatory [[Page 9308]] paragraph changes proposed by this rulemaking:

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Old Section New section

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630.102............................... 630.102

630.104............................... Removed

None.................................. 630.104

630.106............................... Removed

630.108............................... Removed

630.110............................... Removed

630.112............................... Removed

630.114(b)............................ 630.106(a)

630.114(g)............................ 630.106(b)

630.114(h)............................ 630.106(c)

630.114(h)(3)......................... 630.106(d)

630.114(h)(3)......................... 630.106(e)

None.................................. 630.106(f) through (i)

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Rulemaking Analyses and Notices

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, but the FHWA may issue a final

rule at any time after the close of the comment period. In addition to

late comments, the FHWA will also continue to file relevant information

in the docket as it becomes available after the comment closing date,

and interested persons should continue to examine the docket for new

material.

Executive Order 12866 (Regulatory Planning and Review) and DOT

Regulatory Policies and Procedures

The FHWA has determined that this action is not a significant

regulatory action within the meaning of Executive Order 12866 or

significant within the meaning of Department of Transportation

regulatory policies and procedures. It is anticipated that the economic

impact of this rulemaking would be minimal; therefore, a full

regulatory evaluation is not required. The FHWA does not consider this

action to be a significant regulatory action because the proposed

amendments would update the Federal-aid project authorization

regulation to conform to recent laws, regulations, and to clarify

existing policies.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-

612), the FHWA has evaluated the effects of this rule on small

entities. Based on the evaluation, the FHWA certifies that this action

would not have a significant economic impact on a substantial number of

small entities. The proposed amendments would only clarify or simplify

procedures used by SHA's in accordance with existing laws, regulations,

or guidance.

Executive Order 12612 (Federalism Assessment)

This action has been analyzed in accordance with the principles and

criteria contained in Executive Order 12612, and it has been determined

that this action does not have sufficient federalism implications to

warrant the preparation of a federalism assessment.

Executive Order 12372 (Intergovernmental Review)

Catalog of Federal Domestic Assistance Program Number 20.205,

Highway Planning and Construction. The regulations implementing

Executive Order 12372 regarding intergovernmental consultation on

Federal programs and activities apply to this program.

Paperwork Reduction Act

This action does not contain a collection of information

requirement for purposes of the Paperwork Reduction Act of 1980, 44

U.S.C. 3501-3520.

National Environmental Policy Act

The Agency has analyzed this action for the purpose of the National

Environmental Policy Act of 1969 (42 U.S.C. 4321 et. seq.) and has

determined that this action would not have any effect on the quality of

the environment.

Regulation Identification Number

A regulation identification number (RIN) is assigned to each

regulatory action listed in the Unified Agenda of Federal Regulations.

The Regulatory Information Service Center publishes the Unified Agenda

in April and October of each year. The RIN contained in the heading of

this document can be used to cross reference this action with the

Unified Agenda.

List of Subjects in 23 CFR Part 630

Government contracts, Grant programs--transportation, Highways and

roads, Project authorization.

In consideration of the foregoing, the FHWA proposes to amend title

23, Code of Federal Regulations, by revising Part 630, subpart A to

read as set forth below.

Issued on: February 10, 1995.

Rodney E. Slater,

Federal Highway Administrator.

PART 630--PRECONSTRUCTION PROCEDURES

Subpart A--Federal-Aid Project Authorization

Sec.

630.102 Purpose.

630.104 Applicability.

630.106 Authorization to proceed.

Authority: 23 U.S.C. 106, 118, 120, and 315; 49 CFR 1.48(b).

Sec. 630.102 Purpose.

The purpose of this subpart is to prescribe policies for

authorizing Federal-aid projects.

Sec. 630.104 Applicability.

(a) This subpart is applicable to all Federal-aid projects unless

specifically exempted.

(b) Projects financed with FHWA planning and research funds, as

defined in 23 CFR 420.103 are not covered by this subpart. These

projects are to be handled in accordance with 23 CFR parts 420 and 450.

(c) Other projects which involve special procedures shall be

authorized as set out in the implementing instructions.

Sec. 630.106 Authorization to proceed.

(a) The FHWA issuance of an authorization to proceed with a

Federal-aid project shall be in response to a written request from the

State highway agency (SHA). Authorization can be given only after

applicable prerequisite requirements of Federal laws and implementing

regulations and directives have been satisfied.

(b) Federal funds shall not participate in costs incurred prior to

the date of authorization to proceed except as provided by 23 CFR

1.9(b).

(c) Authorization to proceed shall be deemed a contractual

obligation of the Federal Government under 23 U.S.C. 106 and shall

require that appropriate funds be available at the time of

authorization for the agreed Federal share, either pro rata or lump

sum, of the cost of eligible work to be incurred by the State except as

follows:

(1) Advance construction projects authorized under 23 U.S.C. 115.

(2) Bond issue projects authorized under 23 U.S.C. 122.

(3) Projects for preliminary studies for the portion of the

preliminary engineering and right-of-way (ROW) phase(s) through the

selection of a location.

(4) Projects for ROW acquisition in hardship and protective buying

[[Page 9309]] situations through the selection of a particular

location. This includes ROW acquisitions within a potential highway

corridor under consideration where necessary to preserve the corridor

for future highway purposes. Authorization of work under this paragraph

shall be in accord with the provisions of 23 CFR part 712.

(5) In special cases where the Federal Highway Administrator

determines it to be in the best interest of the Federal-aid highway

program.

(d) The authorization to proceed with a project under 23 CFR

630.106(c)(3) through (c)(5) shall contain the following statement:

``Authorization to proceed shall not constitute any commitment of

Federal funds, nor shall it be construed as creating in any manner any

obligation on the part of the Federal Government to provide Federal

funds for that portion of the undertaking not fully funded herein.''

(e) When a project has received an authorization under 23 CFR

630.106 (c)(3) and (c)(4), subsequent authorizations beyond the

location stage shall not be given until appropriate available funds

have been obligated to cover eligible costs of the work covered by the

previous authorization.

(f)(1) The Federal-aid share of eligible project costs shall be

established at the time of project authorization in one of the

following manners:

(i) Pro rata, with the authorization stating the Federal share as a

specified percentage, or

(ii) Lump sum, with the authorization stating that Federal funds

are limited to a specified dollar amount not to exceed the legal pro

rata.

(2) The pro-rata or lump sum share may be adjusted to reflect any

substantive change in the bids received as compared to the SHA's

estimated cost of the project at the time of FHWA authorization,

provided that Federal funds are available.

(g) Federal participation is limited to the agreed Federal share of

eligible costs actually incurred by the State, not to exceed the

maximum permitted by enabling legislation. Any private cash

contributions to the project must be credited to, and thereby such

contributions reduce, the total project cost and are not considered to

be costs incurred by the State. Private cash contributions may be

applied to participating or nonparticipating work. Cash contributions

provided by a local government are considered the same as State funds.

(h) The sum of cash contributions from all sources plus the Federal

funds may not exceed the total cost of the project.

(i) The State may contribute more than the normal non-Federal share

of title 23, U.S.C., projects. However, proposals resulting in token

Federal financing of a Federal-aid project shall not be approved.

[FR Doc. 95-4029 Filed 2-16-95; 8:45 am]

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