[Title 49 CFR ]
[Code of Federal Regulations (annual edition) - October 1, 2012 Edition]
[From the U.S. Government Printing Office]



[[Page i]]

          

          Title 49

Transportation


________________________

Parts 1 to 99

                         Revised as of October 1, 2012

          Containing a codification of documents of general 
          applicability and future effect

          As of October 1, 2012
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as a 
                    Special Edition of the Federal Register

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 49:
          SUBTITLE A--Office of the Secretary of 
          Transportation                                             3
  Finding Aids:
      Table of CFR Titles and Chapters........................     741
      Alphabetical List of Agencies Appearing in the CFR......     761
      List of CFR Sections Affected...........................     771

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                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 49 CFR 1.1 refers to 
                       title 49, part 1, section 
                       1.

                     ----------------------------

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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, October 1, 2012), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 2001, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, 1973-1985, or 1986-2000, published in eleven separate 
volumes. For the period beginning January 1, 2001, a ``List of CFR 
Sections Affected'' is published at the end of each CFR volume.

``[RESERVED]'' TERMINOLOGY

    The term ``[Reserved]'' is used as a place holder within the Code of 
Federal Regulations. An agency may add regulatory information at a 
``[Reserved]'' location at any time. Occasionally ``[Reserved]'' is used 
editorially to indicate that a portion of the CFR was left vacant and 
not accidentally dropped due to a printing or computer error.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
valid, the Director of the Federal Register must approve it. The legal 
effect of incorporation by reference is that the material is treated as 
if it were published in full in the Federal Register (5 U.S.C. 552(a)). 
This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed as 
an approved incorporation by reference, please contact the agency that 
issued the regulation containing that incorporation. If, after 
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CFR INDEXES AND TABULAR GUIDES

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separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Authorities 
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alphabetical list of agencies publishing in the CFR are also included in 
this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.

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    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

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in the Code of Federal Regulations.

INQUIRIES

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    Charles A. Barth,
    Director,
    Office of the Federal Register.
    October 1, 2012.







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                               THIS TITLE

    Title 49--Transportation is composed of nine volumes. The parts in 
these volumes are arranged in the following order: Parts 1-99, parts 
100-177, parts 178-199, parts 200-299, parts 300-399, parts 400-571, 
parts 572-999, parts 1000-1199, and part 1200 to end. The first volume 
(parts 1-99) contains current regulations issued under subtitle A--
Office of the Secretary of Transportation; the second volume (parts 100-
177) and the third volume (parts 178-199) contain the current 
regulations issued under chapter I--Pipeline and Hazardous Materials 
Safety Administration (DOT); the fourth volume (parts 200-299) contains 
the current regulations issued under chapter II--Federal Railroad 
Administration (DOT); the fifth volume (parts 300-399) contains the 
current regulations issued under chapter III--Federal Motor Carrier 
Safety Administration (DOT); the sixth volume (parts 400-571) contains 
the current regulations issued under chapter IV--Coast Guard (DHS), and 
some of chapter V--National Highway Traffic Safety Administration (DOT); 
the seventh volume (parts 572-999) contains the rest of the regulations 
issued under chapter IV, and the current regulations issued under 
chapter VI--Federal Transit Administration (DOT), chapter VII--National 
Railroad Passenger Corporation (AMTRAK), and chapter VIII--National 
Transportation Safety Board; the eighth volume (parts 1000-1199) 
contains the current regulations issued under chapter X--Surface 
Transportation Board and the ninth volume (part 1200 to end) contains 
the current regulations issued under chapter X--Surface Transportation 
Board, chapter XI--Research and Innovative Technology Administration, 
and chapter XII--Transportation Security Administration, Department of 
Transportation. The contents of these volumes represent all current 
regulations codified under this title of the CFR as of October 1, 2012.

    In the volume containing parts 100-177, see Sec.  172.101 for the 
Hazardous Materials Table. The Federal Motor Vehicle Safety Standards 
appear in part 571.

    Redesignation tables for chapter III--Federal Motor Carrier Safety 
Administration, Department of Transportation and chapter XII--
Transportation Security Administration, Department of Transportation 
appear in the Finding Aids section of the fifth and ninth volumes.

    For this volume, Susannah C. Hurley was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Michael L. White, assisted by Ann Worley.

[[Page 1]]



                        TITLE 49--TRANSPORTATION




                   (This book contains parts 1 to 99)

  --------------------------------------------------------------------
                                                                    Part

SUBTITLE A--Office of the Secretary of Transportation.......           1

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          Subtitle A--Office of the Secretary of Transportation




  --------------------------------------------------------------------
Part                                                                Page
1               Organization and delegation of powers and 
                    duties..................................           5
3               Official seal...............................          49
5               Rulemaking procedures.......................          49
6               Implementation of Equal Access to Justice 
                    Act in agency proceedings...............          52
7               Public availability of information..........          58
8               Classified information: Classification/
                    declassification/access.................          73
9               Testimony of employees of the Department and 
                    production of records in legal 
                    proceedings.............................          81
10              Maintenance of and access to records 
                    pertaining to individuals...............          85
11              Protection of human subjects................          98
15              Protection of sensitive security information         109
17              Intergovernmental review of Department of 
                    Transportation programs and activities..         116
18              Uniform administrative requirements for 
                    grants and cooperative agreements to 
                    State and local governments.............         119
19              Uniform administrative requirements for 
                    grants and agreements with institutions 
                    of higher education, hospitals, and 
                    other non-profit organizations..........         148
20              New restrictions on lobbying................         177
21              Nondiscrimination in federally-assisted 
                    programs of the Department of 
                    Transportation--Effectuation of Title VI 
                    of the Civil Rights Act of 1964.........         188
22              Short-term lending program (STLP)...........         199
23              Participation of disadvantaged business 
                    enterprise in airport concessions.......         209
24              Uniform relocation assistance and real 
                    property acquisition for Federal and 
                    federally-assisted programs.............         229

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25              Nondiscrimination on the basis of sex in 
                    education programs or activities 
                    receiving Federal financial assistance..         277
26              Participation by disadvantaged business 
                    enterprises in Department of 
                    Transportation financial assistance 
                    programs................................         293
27              Nondiscrimination on the basis of disability 
                    in programs or activities receiving 
                    Federal financial assistance............         357
28              Enforcement of nondiscrimination on the 
                    basis of handicap in programs or 
                    activities conducted by the Department 
                    of Transportation.......................         369
30              Denial of public works contracts to 
                    suppliers of goods and services of 
                    countries that deny procurement market 
                    access to U.S. contractors..............         377
31              Program fraud civil remedies................         382
32              Governmentwide requirements for drug-free 
                    workplace (financial assistance)........         398
33              Transportation priorities and allocation 
                    system (Eff. 11-30-2012)................         403
37              Transportation services for individuals with 
                    disabilities (ADA)......................         428
38              Americans with Disabilities Act (ADA) 
                    accessibility specifications for 
                    transportation vehicles.................         521
39              Transportation for individuals with 
                    disabilities: passenger vessels.........         560
40              Procedures for transportation workplace drug 
                    and alcohol testing programs............         576
41              Seismic safety..............................         692
71              Standard time zone boundaries...............         694
79              Medals of honor.............................         700
80              Credit assistance for surface transportation 
                    projects................................         700
89              Implementation of the Federal Claims 
                    Collection Act..........................         706
91              International air transportation fair 
                    competitive practices...................         713
92              Recovering debts to the United States by 
                    salary offset...........................         715
93              Aircraft allocation.........................         724
95              Advisory committees.........................         725
98              Enforcement of restrictions on post-
                    employment activities...................         728
99              Employee responsibilities and conduct.......         730
Appendix to Subtitle A--United States Railway Association--
  Employee Responsibilities and Conduct.....................         733

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PART 1_ORGANIZATION AND DELEGATION OF POWERS AND DUTIES--Table of 
Contents



                           Subpart A_General.

Sec.
1.1 Overview.
1.2 Organization of the Department.
1.3 Exercise of authority.

                    Subpart B_Office of the Secretary

1.11 Overview.
1.13 OST key responsibilities.
1.15 OST structure.
1.17 OST line of secretarial succession.

                              OST Officials

1.20 Secretary of Transportation.
1.21 Reservations of Authority to the Secretary of Transportation.
1.22 Deputy Secretary.
1.23 Delegations to the Deputy Secretary.
1.24 Under Secretary of Transportation for Policy.
1.25 Delegations to the Under Secretary of Transportation for Policy.
1.25a Redelegations by the Under Secretary of Transportation for Policy.
1.26 General Counsel.
1.27 Delegations to the General Counsel.
1.27a Delegations to the Career Deputy General Counsel.
1.27b Delegations to the Assistant General Counsel for General Law.
1.30 Assistant Secretaries.
1.31 Assistant Secretary for Transportation Policy.
1.32 Assistant Secretary for Aviation and International Affairs.
1.33 Assistant Secretary for Budget and Programs and Chief Financial 
          Officer.
1.34 Delegations to the Assistant Secretary for Budget and Programs and 
          Chief Financial Officer.
1.35 Assistant Secretary for Governmental Affairs.
1.36 Delegations to the Assistant Secretary for Governmental Affairs.
1.37 Assistant Secretary for Administration.
1.38 Delegations to the Assistant Secretary for Administration.
1.38a Redelegations by the Assistant Secretary for Administration.
1.39 Executive Secretariat.
1.40 Departmental Office of Civil Rights.
1.41 Delegations to the Director of the Departmental Office of Civil 
          Rights.
1.42. Office of Small and Disadvantaged Business Utilization.
1.43 Delegations to the Director of the Office of Small and 
          Disadvantaged Business Utilization.
1.44 Office of Intelligence, Security and Emergency Response.
1.45 Delegations to the Director of the Office of Intelligence, Security 
          and Emergency Response.
1.46 Office of Public Affairs.
1.47 Delegations to the Assistant to the Secretary and Director of 
          Public Affairs.
1.48 Office of the Chief Information Officer.
1.49 Delegations to the Chief Information Officer.
1.50 Office of Drug & Alcohol Policy & Compliance.
1.60 General Authorizations and Delegations to Secretarial Officers.

                  Subpart C_Office of Inspector General

1.70 Overview.
1.71 Key responsibilities.
1.72 Structure.
1.73 Authority of Inspector General.
1.74 Delegations to Inspector General.

                   Subpart D_Operating Administrations

1.80 Overview.
1.81 Delegations to all Administrators.
1.81a Redelegation by all Administrators.
1.82 The Federal Aviation Administration.
1.83 Delegations to the Federal Aviation Administrator.
1.84 The Federal Highway Administration.
1.85 Delegations to the Federal Highway Administrator.
1.86 The Federal Motor Carrier Safety Administration.
1.87 Delegations to the Federal Motor Carrier Safety Administrator.
1.88 The Federal Railroad Administration.
1.89 Delegations to the Federal Railroad Administrator.
1.90 The Federal Transit Administration.
1.91 Delegations to the Federal Transit Administrator.
1.92 The Maritime Administration.
1.93 Delegations to the Maritime Administrator.
1.94 The National Highway Traffic Safety Administration.
1.95 Delegations to the National Highway Traffic Safety Administrator.
1.96 The Pipeline and Hazardous Materials Safety Administration.
1.97 Delegations to the Pipeline and Hazardous Materials Safety 
          Administrator.
1.98 The Research and Innovative Technology Administration.
1.99 Delegations to the Research and Innovative Technology 
          Administrator.
1.100 The Saint Lawrence Seaway Development Corporation.
1.101 Delegations to Saint Lawrence Seaway Development Corporation 
          Administrator.

[[Page 6]]


Appendix A to Part I--Delegations and Redelegations by Secretarial 
          Officers

    Authority: 49 U.S.C. 322.

    Source: 77 FR 49965, Aug. 17, 2012, unless otherwise noted.



                            Subpart A_General



Sec. 1.1  Overview.

    This part describes the organization of the United States Department 
of Transportation and provides for the performance of duties imposed 
upon, and the exercise of powers vested in, the Secretary of 
Transportation by law.



Sec. 1.2  Organization of the Department.

    (a) The Secretary of Transportation is the head of the Department.
    (b) The Department comprises the Office of the Secretary of 
Transportation (OST), the Office of the Inspector General (OIG), and the 
following Operating Administrations, each headed by an Administrator who 
reports directly to the Secretary:
    (1) The Federal Aviation Administration (FAA).
    (2) The Federal Highway Administration (FHWA).
    (3) The Federal Motor Carrier Safety Administration (FMCSA).
    (4) The Federal Railroad Administration (FRA).
    (5) The Federal Transit Administration (FTA).
    (6) The Maritime Administration (MARAD).
    (7) The National Highway Traffic Safety Administration (NHTSA).
    (8) The Pipeline and Hazardous Materials Safety Administration 
(PHMSA).
    (9) The Research and Innovative Technology Administration (RITA).
    (10) The Saint Lawrence Seaway Development Corporation (SLSDC).



Sec. 1.3  Exercise of authority.

    (a) In exercising powers and performing duties delegated by this 
part or redelegated pursuant thereto, officials of the Department of 
Transportation are governed by applicable laws, Executive Orders and 
regulations and by policies, objectives, plans, standards, procedures, 
and limitations as may be issued from time to time by or on behalf of 
the Secretary, or, with respect to matters under their jurisdictions, by 
or on behalf of the Deputy Secretary, the Under Secretary, the General 
Counsel, an Assistant Secretary, the Inspector General, or an 
Administrator. This includes, wherever specified, the requirement for 
advance notice to, prior coordination with, or prior approval by an 
authority other than that of the official proposing to act.
    (b) Subject to the reservations of authority to the Secretary of 
Transportation in section 1.21, the Deputy Secretary, the Under 
Secretary, the General Counsel, the Assistant Secretaries, the Inspector 
General, and the Administrators exercise the powers and perform the 
duties delegated to them under this part.
    (c) For delegations of authority vested in the Secretary by 
Executive Order 13526 (see also E.O. 12958 and 12065) originally to 
classify documents as secret and confidential, see Sec. 8.11 of this 
subtitle. Previous delegations of authority to Department of 
Transportation officials to originally classify information as secret 
and confidential are hereby rescinded.



                    Subpart B_Office of the Secretary



Sec. 1.11  Overview.

    This subpart sets forth the OST's key responsibilities, its basic 
organizational structure, and the line of Secretarial succession in time 
of need. It also describes the key responsibilities of OST officials, 
and sets forth delegations and reservations of authority to those 
officials.



Sec. 1.13  OST Key Responsibilities.

    (a) The OST is responsible for:
    (1) Providing leadership in formulating and executing well-balanced 
national and international transportation objectives, policies, and 
programs to ensure the Nation has safe, economically competitive 
transportation systems that support U.S. interests, that are maintained 
in a state of good repair, that foster environmental sustainability, and 
that support livable communities;
    (2) Chairing the Department's Safety Council;

[[Page 7]]

    (3) Stimulating and promoting research and development in all modes 
and types of transportation, with special emphasis on transportation 
safety;
    (4) Coordinating the various transportation programs of the Federal 
Government;
    (5) Encouraging maximum private development of transportation 
services;
    (6) Providing responsive, timely, and effective liaison with 
Congress and public and private organizations on transportation matters;
    (7) Providing innovative approaches to urban transportation and 
environmental enhancement programs;
    (8) Overseeing the Department's multimodal freight policy;
    (9) Providing effective management of the Department as a whole to 
ensure it achieves organizational excellence;
    (10) Leading Department-wide efforts for greater transparency and 
accountability;
    (11) Administering the Department's Livable Communities initiative 
to increase access to convenient and affordable transportation choices 
and improve transportation networks that accommodate pedestrians and 
bicycles;
    (12) Coordinating the Department's credit and financial assistance 
programs by leading the Credit Council to ensure responsible financing 
for the Nation's transportation projects; and
    (13) Formulating and executing policies to ensure effective 
operation of the Department's aviation economic program including 
functions related to consumer protection and civil rights, domestic 
airline licensing matters, competition oversight, airline data 
collection, and review of international route negotiations and route 
awards to carriers.



Sec. 1.15  OST Structure.

    (a) Secretary and Deputy Secretary. The Secretary and Deputy 
Secretary are assisted by the following, all of which report directly to 
the Secretary:
    (1) The Chief of Staff;
    (2) The Executive Secretariat;
    (3) The Departmental Office of Civil Rights;
    (4) The Office of Small and Disadvantaged Business Utilization;
    (5) The Office of Intelligence, Security and Emergency Response;
    (6) The Office of Public Affairs;
    (7) The Office of the Chief Information Officer; and
    (8) The Office of Drug & Alcohol Policy & Compliance.
    (b) The Under Secretary of Transportation for Policy, the General 
Counsel, and the Assistant Secretaries for Administration, Budget and 
Programs, and Governmental Affairs also report directly to the 
Secretary.
    (c) Office of the Under Secretary of Transportation for Policy. This 
Office is composed of:
    (1) The Office of the Assistant Secretary for Transportation Policy, 
which includes:
    (i) The Office of Safety, Energy, and the Environment,
    (ii) The Office of Infrastructure Finance and Innovation, and
    (iii) The Office of Economic and Strategic Analysis.
    (2) The Office of the Assistant Secretary for Aviation and 
International Affairs, which includes:
    (i) The Office of International Transportation and Trade,
    (ii) The Office of International Aviation, and
    (iii) The Office of Aviation Analysis.
    (d) Office of the General Counsel. This Office is composed of:
    (1) The Office of General Law,
    (2) The Office of International Law,
    (3) The Office of Litigation,
    (4) The Office of Legislation,
    (5) The Office of Regulation and Enforcement,
    (6) The Office of Operations, which includes the Freedom of 
Information Act (FOIA) Office,
    (7) The Office of Aviation Enforcement and Proceedings, which 
includes the Aviation Consumer Protection Division, and
    (8) The Center for Alternative Dispute Resolution.
    (e) Office of the Assistant Secretary for Budget and Programs and 
Chief Financial Officer. This Office is composed of:
    (1) The Office of Budget and Program Performance,
    (2) The Office of Financial Management, and
    (3) The Office of the Chief Financial Officer for the Office of the 
Secretary.

[[Page 8]]

    (f) Office of the Assistant Secretary for Governmental Affairs. This 
Office contains the following functional areas: Congressional Affairs 
and Intergovernmental Affairs; and includes a Deputy Assistant Secretary 
for Tribal Government Affairs.
    (g) Office of the Assistant Secretary for Administration. This 
Office is composed of:
    (1) The Office of Audit Relations,
    (2) The Office of Human Resource Management,
    (3) The Office of Hearings,
    (4) The Office of Security,
    (5) The Office of the Senior Procurement Executive,
    (6) The Office of Financial Management and Transit Benefit Programs, 
and
    (7) The Office of Facilities, Information and Asset Management.



Sec. 1.17  OST Line of Secretarial Succession.

    (a) The following officials, in the order indicated, shall act as 
Secretary of Transportation, in case of the absence or disability of the 
Secretary, until the absence or disability ceases, or in the case of a 
vacancy, until a successor is appointed. Notwithstanding the provisions 
of this section, the President retains discretion, to the extent 
permitted by the law, to depart from this order in designating an acting 
Secretary of Transportation.
    (1) Deputy Secretary.
    (2) Under Secretary of Transportation for Policy.
    (3) General Counsel.
    (4) Assistant Secretary for Budget and Programs and CFO.
    (5) Assistant Secretary for Transportation Policy.
    (6) Assistant Secretary for Governmental Affairs.
    (7) Assistant Secretary for Aviation and International Affairs.
    (8) Assistant Secretary for Administration.
    (9) Administrator of the Federal Highway Administration.
    (10) Administrator of the Federal Aviation Administration.
    (11) Administrator of the Federal Motor Carrier Safety 
Administration.
    (12) Administrator of the Federal Railroad Administration.
    (13) Administrator of the Federal Transit Administration.
    (14) Administrator of the Maritime Administration.
    (15) Administrator of the Pipeline and Hazardous Materials Safety 
Administration.
    (16) Administrator of the National Highway Traffic Safety 
Administration.
    (17) Administrator of the Research and Innovative Technology 
Administration.
    (18) Administrator of the Saint Lawrence Seaway Development 
Corporation.
    (19) Regional Administrator, Southern Region, Federal Aviation 
Administration.
    (20) Director, Resource Center, Lakewood, Colorado, Federal Highway 
Administration.
    (21) Regional Administrator, Northwest Mountain Region, Federal 
Aviation Administration.
    (b) Without regard to the foregoing, a person directed to perform 
the duties of the Secretary pursuant to 5 U.S.C. 3347 (the Vacancies 
Act) shall act as Secretary of Transportation.

                              OST Officials



Sec. 1.20  Secretary of Transportation.

    The Secretary is the head of the Department. The Secretary exercises 
oversight of all of the OST components, as well as each of the Operating 
Administrations, and overall planning, direction, and control of the 
Department's agenda.



Sec. 1.21  Reservations of Authority to the Secretary of Transportation.

    (a) All powers and duties that are not delegated by the Secretary in 
49 CFR Part 1, or otherwise vested in officials other than the 
Secretary, are reserved to the Secretary. Except as otherwise provided, 
the Secretary may exercise powers and duties delegated or assigned to 
officials other than the Secretary.
    (b) The delegations of authority in this part do not extend to the 
following actions, authority for which is reserved to the Secretary or 
the Secretary's delegatee within the Office of the Secretary:

[[Page 9]]

    (1) General transportation matters.
    (i) Transportation leadership authority pursuant to 49 U.S.C. 301 
(Duties of the Secretary of Transportation: Leadership, consultation, 
and cooperation).
    (ii) Functions relating to transportation activities, plans, and 
programs under 49 U.S.C. 304 (Joint activities with the Secretary of 
Housing and Urban Development).
    (iii) Authority to develop, prepare, coordinate, transmit, and 
revise transportation investment standards and criteria under 49 U.S.C. 
305 (Transportation investment standards and criteria).
    (iv) Authority relating to standard time zones and advanced 
(daylight) time (15 U.S.C. 260 et seq.).
    (2) Legislation, rulemakings, and reports. (i) Submission to the 
President, the Director of the Office of Management and Budget, or 
Congress of proposals or recommendations for legislation, significant 
rulemakings and related documents as authorized by law, Executive 
Orders, proclamations or reorganization plans, or other Presidential 
action.
    (ii) Submission to the President or Congress of any report or any 
proposed transportation policy or investment standards or criteria, 
except with the prior written approval of the Secretary.
    (iii) Submission of the annual statement on systems of internal 
accounting and administrative control under the Federal Managers' 
Financial Integrity Act of 1982 (FMFIA) (31 U.S.C. 3512 note).
    (3) Budget and finance. (i) Approval and submission to the Office of 
Management and Budget of original or amended budget estimates or 
requests for allocations of personnel ceiling (31 U.S.C. 1108).
    (ii) Approval of requests for legislation which, if enacted, would 
authorize subsequent appropriations for the Department (31 U.S.C. 581b).
    (iii) Transfer of the balance of an appropriation from one operating 
element to another within the Department (31 U.S.C. 581c).
    (iv) Submission to the Director of the Office of Management and 
Budget of requests for the transfer of the balance or portions of an 
appropriation from one element to another within the Department (31 
U.S.C. 665).
    (4) Personnel. (i) Recommendations to the Office of Personnel 
Management regarding the allocation of a position to the Senior 
Executive Service (SES) or Senior Level (SL), or Scientific and 
Professional Positions (ST) (5 U.S.C. 5108).
    (ii) Recommendations to the Office of Personnel Management of 
approval of the qualifications of any candidate for a position in the 
SES or SL.
    (iii) Recommendations to the Office of Personnel Management of a 
Lump-Sum Incentive Award in Excess of $10,000 (5 U.S.C. 4502).
    (iv) Approval of the following actions relating to Schedules A, B, 
C, or D and noncareer executive assignment positions or incumbents, 
except for actions under Schedules A and B limited to one year or less 
at grade GS-9 or lower, or an equivalent level:
    (A) Establishment or abolition of positions;
    (B) Hires;
    (C) Promotions other than quality and periodic within-grade 
promotions;
    (D) Transfer of personnel to Schedule A, B, C, or D positions or 
non-career executive assignment positions, either permanently or on 
detail; and
    (E) Transfer of personnel from Schedule A, B, C, or D or non-career 
executive assignment positions to career Civil Service positions.
    (v) Approval of employment of experts or consultants.
    (vi) Authority to determine the maximum limit of age for appointment 
of air traffic controllers as provided by 5 U.S.C. 3307(b).
    (vii) Authority to develop, coordinate, and issue wage schedules 
under the Federal Wage system.
    (5) Security. (i) Authorizing the filling of a critical-sensitive 
position for a limited period by a person on whom a preappointment full 
field investigation has not been completed (Executive Order 10450) as 
amended and Executive Order 12968 as amended by Executive Order 13467.
    (ii) Requesting Presidential approval of a claim of executive 
privilege with respect to information requested by a Congressional 
committee or Member of Congress.

[[Page 10]]

    (iii) Making determinations prescribed by Executive Order 12968 as 
amended by Executive Order 13467 and 32 CFR Part 147 relating to the 
adjudication and final denial of access to classified information to 
industry personnel.
    (iv) Making those determinations or delegations prescribed by 
Executive Order 13526 that are reserved to the head of the Department.
    (6) Procurement. Exercising the extraordinary authority for defense 
contracts provided for in Public Law 85-804 [(50 U.S.C. 1431-1435)].
    (7) Printing. Requesting approval of the Joint Committee on Printing 
for any procurement or other action requiring Committee approval.
    (8) Interagency agreements. Executing any written interdepartmental 
or interagency agreement with the head of another executive department 
or agency.
    (9) Withholding of funds. Withholding or suspension of Federal-Aid 
Highway funds on a state-wide basis and the waiver or compromise of such 
withholding or suspension, except for the administration of 23 U.S.C. 
141 and 154, which are specifically delegated in Sec. 1.85 (FHWA) and 
Sec. 1.95 (NHTSA).
    (10) National Highway Safety Advisory Committee. Directing the 
National Highway Safety Advisory Committee to meet (23 U.S.C. 404(c)).
    (11) Maritime Subsidy Board. Reviewing decisions, reports, orders 
and other actions of the Maritime Subsidy Board.
    (12) Cash purchases of passenger transportation. The authority under 
Federal Property Management Regulation G-72, as amended, to authorize 
and approve cash purchases for emergency passenger transportation 
services costing more than $100.
    (13) Solicitation of gifts. The implied authority to solicit gifts 
associated with 49 U.S.C. 326(a).
    (14) Foreign travel. Approving official travel outside of the United 
States.
    (15) United States Merchant Marine Academy. Pursuant to 49 U.S.C. 
51303, the authority to appoint each year without competition as cadets 
at the United States Merchant Marine Academy not more than 40 qualified 
individuals with qualities the Secretary considers to be of special 
value to the Academy.
    (16) Challenges and Competitions. Approving any challenge or 
competition administered by any office or Operating Administration of 
the Department.
    (17) Committees. Approving the establishment, modification, 
extension, or termination of all advisory committees (including industry 
advisory committees) subject to the Federal Advisory Committee Act (Pub. 
L. 92-463; 5 U.S.C. App.), and the designation of Departmental 
representatives to those committees.
    (18) Credit assistance approval. Granting final approval of 
applications for credit assistance under the Transportation 
Infrastructure Finance and Innovation Act (TIFIA), 23 U.S.C. 601-609.



Sec. 1.22  Deputy Secretary.

    Along with the Secretary, the Deputy Secretary exercises oversight 
of all of the OST components, as well as each of the Operating 
Administrations, and overall planning, direction, and control of the 
Department's agenda. The Deputy Secretary:
    (a) May exercise the authority of the Secretary, except where 
specifically limited by law, order, regulation, or instructions of the 
Secretary;
    (b) Serves as the Chief Operating Officer; and
    (c) Serves as the Chief Acquisition Officer.



Sec. 1.23  Delegations to the Deputy Secretary.

    The Deputy Secretary may exercise the authority of the Secretary, 
except where specifically limited by law, order, regulations, or 
instructions of the Secretary. In addition, the Deputy Secretary is 
delegated authority to:
    (a) Exercise executive control over Departmental Budgeting and 
Program Evaluation.
    (b) Serve as Chairman of the Departmental Executive Resources Board 
and its Executive Committee.
    (c) Serve as the Chair of the Department's Safety Council.
    (d) Serve as the Chair of the Department's Credit Council.
    (e) Approve the establishment, modification, extension, or 
termination of:

[[Page 11]]

    (1) Department-wide (intra-department) committees affecting more 
than one program.
    (2) OST-sponsored interagency committees.
    (f) Approve the designation of:
    (1) Departmental representatives and the chairman for interagency 
committees sponsored by the Office of the Secretary.
    (2) Departmental members for international committees.
    (g) Serve as the representative of the Secretary on the board of 
directors of the National Railroad Passenger Corporation and carry out 
the functions vested in the Secretary as a member of the board by 49 
U.S.C. 24302.
    (h) Approve the initiation of regulatory action, as defined in E.O. 
12866, by Secretarial offices and Operating Administrations.



Sec. 1.24  Under Secretary of Transportation for Policy.

    The Under Secretary provides leadership in the Department's 
development of policies and programs to protect and enhance the safety, 
adequacy, and efficiency of the transportation system and services. The 
Office of the Under Secretary serves as the focal point within the 
Federal Government for coordination of intermodal transportation policy, 
which brings together departmental intermodal perspectives, advocates 
intermodal interests, and provides secretarial leadership and visibility 
on issues that involve or affect more than one Operating Administration.



Sec. 1.25  Delegations to the Under Secretary of Transportation for 
Policy.

    The Under Secretary is delegated the following authorities:
    (a) Lead the development of transportation policy and serve as the 
principal adviser to the Secretary on all transportation policy matters.
    (b) Establish policy and ensure uniform departmental implementation 
of the National Environmental Policy Act of 1969, Public Law 91-190, as 
amended (42 U.S.C. 4321-4347) within the Department of Transportation.
    (c) Oversee the implementation of 49 U.S.C. 303 (Policy on lands, 
wildlife and waterfowl refuges, and historic sites).
    (d) Represent the Secretary of Transportation on various interagency 
boards, committees, and commissions to include the Architectural and 
Transportation Barriers Compliance Board and the Advisory Council on 
Historic Preservation and the Trade Policy Review Group and the Trade 
Policy Staff Committee.
    (e) Serve as the Department's designated principal conservation 
officer pursuant to section 656 of the Department of Energy Organization 
Act, Public Law 94-91 [42 U.S.C. 7266], and carry out the functions 
vested in the Secretary by section 656 of the Act, which pertains to 
planning and implementing energy conservation matters with the 
Department of Energy.
    (f) Carry out the functions of the Secretary pertaining to aircraft 
with respect to Transportation Order T-1 (44 CFR chapter IV) under the 
Defense Production Act of 1950, as amended, Public Law 81-774, 64 Stat. 
798 [50 U.S.C. App. 2061 et seq.] and Executive Order 10480 (3 CFR, 
1949-1953 comp., p. 962), as amended (see also Executive Order 10773 and 
12919).
    (g) Serve as Department of Transportation member of the Interagency 
Group on International Aviation, and pursuant to Executive Order No. 
11382 (3 CFR, 1966-1970 comp., p. 691), as amended, serve as Chair of 
the Group.
    (h) Serve as second alternate representing the Secretary of 
Transportation to the Trade Policy Committee as mandated by 
Reorganization Plan No. 3 of 1979 (5 U.S.C. App. at 1381), as amended, 
and Executive Order No. 12188 (3 CFR, 1980 comp., p. 131), as amended.
    (i) As supplemented by 14 CFR Part 385, and except as provided in 
Sec. Sec. 1.99(j) (RITA), and 1.27 (General Counsel) of this part, 
carry out the functions transferred to the Department from the Civil 
Aeronautics Board and other related functions and authority vested in 
the Secretary under the following:
    (1) Sections 40103(a)(2) (relating to the consultation with the 
Architectural and Transportation Barriers Compliance Board before 
prescribing regulations or procedures that will have a significant 
impact on accessibility of commercial airports for handicapped 
individuals), and (c) (relating to

[[Page 12]]

foreign aircrafts); 40105 (relating to international negotiations, 
agreements, and obligations); 40109(a), (c), (g), 46301(b) (smoke alarm 
penalty), (d), (f), (g) (relating to the authority to exempt certain air 
carriers) and (h); 40113(a) and (c); 40114(a) (relating to reports and 
records); 40115 (relating to the withholding of information from public 
disclosure) of Chapter 401 of 49 U.S.C.; and 40116 (relating to the 
Anti-Head Tax Act);
    (2) The following chapters of title 49, U.S.C., except as related to 
departmental regulation of airline consumer protection and civil rights 
which is delegated to the General Counsel at Sec. 1.27:
    (i) Chapter 411 of title 49, U.S.C., relating to air carrier 
certification;
    (ii) Chapter 413 of title 49, U.S.C., relating to foreign air 
transportation;
    (iii) Chapter 415 of title 49, U.S.C., relating to pricing;
    (iv) Chapter 417 of title 49, U.S.C., relating to the operations of 
air carriers, except sections 41721-41723;
    (v) Chapter 419 of title 49, U.S.C. and 39 U.S.C. 5402, relating to 
the transportation of mail; and
    (vi) Section 42303 of 49 U.S.C., relating to the management of the 
Web site regarding the use of insecticides in passenger aircraft.
    (3) Section 42111 of title 49, U.S.C. with respect to mutual aid 
agreements as it relates to foreign air transportation;
    (4) Chapters 461 and 463 of title 49, U.S.C., relating to aviation 
investigations, proceedings, and penalties under Part A of Subtitle VII 
of title 49, U.S.C. except for those sections delegated to the General 
Counsel under Sec. 1.27, and to the Federal Aviation Administrator 
under Sec. 1.83 of this part;
    (5) Chapter 473 of title 49, U.S.C., relating to international 
airport facilities.
    (6) Section 11 of the Clayton Act, Public Law 63-212 [15 U.S.C. 21], 
relating to air carriers and foreign air carriers.
    (7) Section 3 of An Act to Encourage Travel in the United States, 
and for other purposes, 54 Stat. 773 [16 U.S.C. 18b].
    (8) Sections 108(a)(4), 621(b)(5), 704(a)(5), and 814(b)(5) of the 
Consumer Credit Protection Act, Public Law 90-321 [15 U.S.C. 1607(a)(4), 
1681s(b)(5), 1691c(a)(5), and 1692l(b)(5)].
    (j) Carry out the functions vested in the Secretary by 49 U.S.C. 
44907(b)(1), (c), and (e) related to the security of foreign airports in 
coordination with the General Counsel, the Federal Aviation 
Administrator, and the Assistant Secretary for Administration.
    (k) Carry out section 101(a)(2) of the Air Transportation Safety and 
System Stabilization Act, Public Law 107-42 [49 U.S.C. 40101 note], as 
delegated to the Secretary of Transportation by the President pursuant 
to a Presidential Memorandum dated September 25, 2001.
    (l) Exercise the authority vested in the Secretary by section 11143 
of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: 
A Legacy for Users, Public Law 109-59, 119 Stat. 1144 (SAFETEA-LU), to 
manage the day-to-day activities associated with implementation of 
section 11143 regarding private activity bonds and tax-exempt financing 
of highway projects and rail-truck facilities.
    (m) In coordination with the General Counsel, to carry out the 
duties of the Secretary under Executive Orders 12866 and 13563 to 
establish the value of statistical life in connection with assessing the 
costs and benefits of Departmental regulatory action.



Sec. 1.25a  Redelegations by the Under Secretary of Transportation for 
Policy.

    (a) The Assistant Secretary for Transportation Policy is delegated 
authority to:
    (1) Establish policy and maintain oversight of implementation of the 
National Environmental Policy Act of 1969, Public Law 91-190, as amended 
(42 U.S.C. 4321-4347) within the Department of Transportation.
    (2) Oversee the implementation of 49 U.S.C. 303 (Policy on lands, 
wildlife and waterfowl refuges, and historic sites).
    (3) Represent the Secretary of Transportation on various interagency 
boards, committees, and commissions to include the Architectural and 
Transportation Barriers Compliance Board and the Advisory Council on 
Historic Preservation and the Trade Policy Review Group and the Trade 
Policy Staff Committee.

[[Page 13]]

    (4) Serve as the Department's designated principal conservation 
officer pursuant to section 656 of the Department of Energy Organization 
Act, Public Law 94-91 [ 42 U.S.C. 7266], and carry out the functions 
vested in the Secretary by section 656 of the Act, which pertains to 
planning and implementing energy conservation matters with the 
Department of Energy.
    (5) Carry out the functions of section 42303 of 49 U.S.C., relating 
to the management of the Web site regarding the use of insecticides in 
passenger aircraft.
    (6) In coordination with the General Counsel, to carry out the 
duties of the Secretary under Executive Orders 12866 and 13563 to 
establish the value of statistical life in connection with assessing the 
costs and benefits of Departmental regulatory action.
    (7) Carry out the duties of the Secretary under Executive Orders 
12866 and 13563 to establish the value of time in connection with 
assessing the costs and benefits of Departmental regulatory action.
    (b) The Assistant Secretary for Aviation and International Affairs 
is delegated authority to:
    (1) Carry out the functions of the Secretary pertaining to aircraft 
with respect to Transportation Order T-1 (44 CFR chapter IV) under the 
Defense Production Act of 1950, as amended, Public Law 81-774, 64 Stat. 
798 [50 U.S.C. App. 2061 et seq.] and Executive Order 10480 (3 CFR, 
1949-1953 comp., p. 962), as amended (see also Executive Order 10773 and 
12919).
    (2) Serve as Department of Transportation member of the Interagency 
Group on International Aviation, and pursuant to Executive Order No. 
11382 (3 CFR, 1966-1970 comp., p. 691), serve as Chair of the Group.
    (3) Serve as second alternate representing the Secretary of 
Transportation to the Trade Policy Committee as mandated by 
Reorganization Plan No. 3 of 1979 (5 U.S.C. App. at 1381), as amended, 
and Executive Order No. 12188 (3 CFR, 1980 comp., p. 131).
    (4) As supplemented by 14 CFR Part 385, and except as provided in 
Sec. Sec. 1.99 (RITA), and 1.27 (General Counsel) of this part, carry 
out the functions transferred to the Department from the Civil 
Aeronautics Board and other related functions and authority vested in 
the Secretary under the following provisions of Title 49, U.S.C.:
    (i) Sections 40103(a)(2) (relating to the consultation with the 
Architectural and Transportation Barriers Compliance Board before 
prescribing regulations or procedures that will have a significant 
impact on accessibility of commercial airports for handicapped 
individuals), and (c) (relating to foreign aircrafts); 40105 (relating 
to international negotiations, agreements, and obligations); 40109(a), 
(c), (g), 46301(b) (smoke alarm penalty), (d), (f), (g) (relating to the 
authority to exempt certain air carriers) and (h); 40113(a) and (c); 
40114(a) (relating to reports and records); 40115 (relating to the 
withholding of information from public disclosure; and 40116 (relating 
to the Anti-Head Tax Act);
    (ii) The following chapters of title 49, U.S.C., except as related 
to departmental regulation of airline consumer protection and civil 
rights which is delegated to the General Counsel at Sec. 1.27:
    (A) Chapter 411, relating to air carrier certification;
    (B) Chapter 413, relating to foreign air transportation;
    (C) Chapter 415, relating to pricing;
    (D) Chapter 417, relating to the operations of air carriers, except 
section 41721-41723;
    (E) Chapter 419, and 39 U.S.C. 5402, relating to the transportation 
of mail;
    (iii) Section 42111 of title 49, U.S.C. with respect to mutual aid 
agreements as it relates to foreign air transportation;
    (iv) Chapters 461 and 463 of title 49, U.S.C., relating to aviation 
investigations, proceedings, and penalties under Part A of 49 U.S.C. 
Subtitle VII except for those sections delegated to the General Counsel 
under Sec. 1.27, and to the Federal Aviation Administrator under Sec. 
1.83 of this part;
    (v) Chapter 473 of title 49, U.S.C., relating to international 
airport facilities.
    (vi) Section 11 of the Clayton Act, Public Law 63-212 [15 U.S.C. 
21], relating to air carriers and foreign air carriers.
    (vii) Section 3 of An Act to Encourage Travel in the United States, 
and

[[Page 14]]

for other purposes, 54 Stat. 773 [16 U.S.C. 18b].
    (viii) Sections 108(a)(4), 621(b)(5), 704(a)(5), and 814(b)(5) of 
the Consumer Credit Protection Act, Public Law 90-321 [15 U.S.C. 
1607(a)(4), 1681s(b)(5), 1691c(a)(5), and 1692l(b)(5)].
    (5) Carry out the functions vested in the Secretary by 49 U.S.C. 
44907(b)(1), (c), and (e) related to the security of foreign airports in 
coordination with the General Counsel, the Federal Aviation 
Administrator, and the Assistant Secretary for Administration.
    (6) Carry out section 101(a)(2) of the Air Transportation Safety and 
System Stabilization Act, Public Law 107-42 [49 U.S.C. 40101 note], as 
delegated to the Secretary of Transportation by the President pursuant 
to a Presidential Memorandum dated September 25, 2001.
    (7) Carry out the functions vested in the Secretary by 49 U.S.C. 
47129, relating to resolution of disputes over the reasonableness of 
fees imposed upon air carriers.



Sec. 1.26  General Counsel.

    The General Counsel is the chief legal officer of the Department, 
legal advisor to the Secretary, and final authority within the 
Department on questions of law. The Office of the General Counsel 
provides legal advice to the Secretary and secretarial offices, and 
supervision, coordination, and review of the legal work of the Chief 
Counsel Offices in the Department. The General Counsel participates with 
each Operating Administrator in the performance reviews of Chief 
Counsel. The General Counsel is responsible for retention of outside 
counsel, and for the approval of the hiring and promotion of 
departmental attorneys (other than in the Federal Aviation 
Administration). The General Counsel is also responsible for 
departmental regulation under statutes including the Air Carrier Access 
Act, statutes prohibiting unfair and deceptive practices in air 
transportation, the Americans with Disabilities Act, the Disadvantaged 
Business Enterprise program, and the Uniform Time Act. The General 
Counsel coordinates all international legal matters, and departmental 
participation in proceedings before other federal and state agencies. 
The General Counsel provides oversight of departmental litigation, 
regulation, legislation, Freedom of Information Act compliance, and 
administrative enforcement.



Sec. 1.27  Delegations to the General Counsel.

    The General Counsel is delegated authority to:
    (a) Conduct all rulemaking proceedings under the Americans with 
Disabilities Act, the Disadvantaged Business Enterprise program, and the 
Uniform Time Act, as amended (15 U.S.C. 260 et seq.).
    (b) Determine the practicability of applying the standard time of 
any standard time zone to the movements of any common carrier engaged in 
interstate or foreign commerce and issue operating exceptions in any 
case in which the General Counsel determines that it is impractical to 
apply the standard time (49 CFR 71.1).
    (c) Issue regulations making editorial changes or corrections to the 
regulations of the Office of the Secretary.
    (d) Grant permission, under specific circumstances, to deviate from 
a policy or procedure prescribed by the regulations of the Office of the 
Secretary (49 CFR Part 9) with respect to the testimony of OST employees 
as witnesses in legal proceedings, the serving of legal process and 
pleadings in legal proceedings involving the Secretary or his Office, 
and the production of records of that Office pursuant to subpoena.
    (e) Respond to petitions for rulemaking or petitions for exemptions 
in accordance with 49 CFR 5.13(c) (Processing of petitions), and notify 
petitioners of decisions in accordance with 49 CFR 5.13(d).
    (f) Provide counsel to employees on questions of conflict of 
interest covered by departmental regulations on employee responsibility 
and conduct.
    (g) Coordinate the issuance of proposed Executive Orders and 
proclamations for transmittal to the Office of Management and Budget for 
action by the White House.
    (h) Except with respect to proceedings relating to safety fitness of 
an applicant (49 U.S.C. 307), decide on requests to intervene or appear 
before

[[Page 15]]

courts (with the consent of the Department of Justice) or agencies to 
present the views of the Department, subject to the concurrence of the 
Secretary.
    (i) Exercise the authority delegated to the Department by the 
Assistant Attorney General, Land and Natural Resources Division, in his 
order of October 2, 1970, to approve the sufficiency of the title to 
land being acquired by purchase or condemnation by the United States for 
the use of the Department. (See also Appendix 1 relating to delegations 
to Operating Administration Chief Counsel).
    (j) Consider, ascertain, adjust, determine, compromise, and settle 
for an amount not exceeding $100,000, any tort claim arising from the 
activities of any employee of the Office of the Secretary; and request 
the approval of the Attorney General for any such award, compromise, or 
settlement in excess of $100,000 (28 CFR part 14.).
    (k) Compromise, suspend collection action on, or terminate claims of 
the United States not exceeding $100,000 (excluding interest) that are 
referred to, or arise out of the activities of the Office of the 
Secretary of Transportation.
    (l) Conduct coordination with foreign governments under section 118 
of the Deep Seabed Hard Mineral Resources Act (30 U.S.C. 1428).
    (m) Exercise review authority under 49 U.S.C. 41307 (related actions 
about foreign air transportation) delegated to the Secretary by the 
President in Executive Order 12597.
    (n) Assist and protect consumers in their dealings with the air 
transportation industry and conduct all departmental regulation of 
airline consumer protection and civil rights pursuant to chapters 401 
(General Provisions), 411 (Air Carrier Certificates), 413 (Foreign Air 
Transportation), 417 (Operations of Carriers), and 423 (Passenger Air 
Service Improvements) of title 49 U.S.C.
    (o) Carry out the functions vested in the Secretary by 49 U.S.C. 
40119(b) (Security and research and development activities), as 
implemented by 49 CFR part 15 (Protection of Sensitive Security 
Information), relating to the determination that information is 
Sensitive Security Information, in consultation and coordination with 
the Office of Intelligence, Security and Emergency Response.
    (p) Appear on behalf of the Department on the record in hearing 
cases, and initiate and carry out enforcement actions on behalf of the 
Department, under the authority transferred to the Department from the 
Civil Aeronautics Board as described in Sec. Sec. 1.25 and 1.25a 
(delegations to and redelegations by the Under Secretary), and 1.99 
(RITA). This includes the authority to compromise penalties under 49 
U.S.C. 46301 (civil penalties); to issue appropriate orders, including 
cease and desist orders, under 49 U.S.C. 46101 (complaints and 
investigations); and to require the production of information, under 49 
U.S.C. 41708, enter carrier property and inspect records, under 49 
U.S.C. 41709, and inquire into the management of the business of a 
carrier under 49 U.S.C. 41711 (Air carrier management inquiry and 
cooperation with other authorities), as appropriate to the enforcement 
responsibilities. In the event that such an enforcement matter comes 
before the Secretary of Transportation for adjudication, the Deputy 
General Counsel shall advise the Secretary.
    (q) Initiate and carry out enforcement actions relating to:
    (1) Foreign airport security on behalf of the Department under 49 
U.S.C. 44907; and
    (2) The Consumer Credit Protection Act under section 4(a)(5) of the 
Civil Aeronautics Board Sunset Act of 1984 (Pub. L. 98-443) [15 U.S.C. 
1607(a)(4), 1681s(b)(5), 1691c(a)(5) and 1692l(b)(5)].
    (r) Administer 5 U.S.C. 552 (FOIA) and 49 CFR part 7 (Public 
Availability of Information) in connection with the records of the 
Office of the Secretary and issue procedures to ensure uniform 
departmental implementation of statutes and regulations regarding public 
access to records.
    (s) Prepare reports by carriers on incidents involving animals 
during air transport pursuant to 49 U.S.C. 41721.
    (t) Exercise authority vested in the Secretary by the Federal Civil 
Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, 104 Stat. 
890), as amended by the Debt Collection Improvement Act of 1996 (Pub. L. 
104-134, 110 Stat. 1321), to promulgate rules that

[[Page 16]]

adjust civil penalties with respect to aviation enforcement.
    (u) In coordination with the Under Secretary, to carry out the 
duties of the Secretary under Executive Orders 12866 and 13563 to 
establish the value of statistical life in connection with assessing the 
costs and benefits of Departmental regulatory action.
    (v) Approve the initiation of regulatory action, as defined in E.O. 
12866, by Secretarial offices and Operating Administrations in the event 
that the Deputy Secretary is absent or otherwise unavailable to exercise 
such authority (see Sec. 1.23(h)).



Sec. 1.27a  Delegations to the Career Deputy General Counsel.

    The career Deputy General Counsel is delegated authority to:
    (a) Serve as the Department's Designated Agency Ethics Official in 
accordance with 5 CFR 2638.202;
    (b) Serve as the Department's Dispute Resolution Specialist pursuant 
to section 3(b) of the Alternative Dispute Resolution Act of 1996, 
Public Law 104-320, 5 U.S.C. App.; and
    (c) Serve as the Department's Chief FOIA Officer under 5 U.S.C. 
552(j).



Sec. 1.27b  Delegations to the Assistant General Counsel for General 
Law.

    The Assistant General Counsel for General Law is delegated authority 
to serve as the Department's Alternate Agency Ethics Official in 
accordance with 5 CFR 2638.202.



Sec. 1.30  Assistant Secretaries.

    (a) In performing their functions, the Assistant Secretaries are 
responsible for continuing liaison and coordination among themselves and 
with the Operating Administrations to:
    (1) Avoid unnecessary duplication of effort by or in conflict with 
the performance of similar activities by the Operating Administrations 
and the other Assistant Secretaries pursuant to their Secretarial 
delegations of authority or other legal authorities; and
    (2) Assure that the views of the Operating Administrations are 
considered in developing departmental policies, plans, and proposals. 
The Assistant Secretaries are also available to assist, as appropriate, 
the Operating Administrations in implementing departmental policy and 
programs. As primary staff advisors to the Secretary, the Assistant 
Secretaries are concerned with transportation matters of the broadest 
scope, including modal, intermodal, and other matters of Secretarial 
interest.
    (b) There are exceptions to the normal staff role described in 
paragraph (a) of this section. In selected instances, the Secretary has 
specifically delegated to Assistant Secretaries authority which they may 
exercise on the Secretary's behalf.



Sec. 1.31  Assistant Secretary for Transportation Policy.

    The Assistant Secretary for Transportation Policy provides policy 
advice to the Secretary, the Deputy Secretary, and the Under Secretary. 
The Office of the Assistant Secretary for Transportation Policy is 
responsible for: public policy development, coordination, and evaluation 
for all aspects of transportation, except in the areas of aviation and 
international affairs, with the goal of making the Nation's 
transportation resources function as an integrated national system; 
evaluation of private transportation sector operating and economic 
issues; evaluation of public transportation sector operating and 
economic issues; regulatory and legislative initiatives and review; 
energy, environmental, disability, and safety policy and program 
development and review; and transportation infrastructure assessment and 
review. For delegations to the Assistant Secretary for Transportation 
Policy, see Sec. 1.25a(a).



Sec. 1.32  Assistant Secretary for Aviation and International Affairs.

    The Office of the Assistant Secretary for Aviation and International 
Affairs is responsible for policy development, coordination, and 
evaluation of issues involving aviation, as well as international issues 
involving all areas of transportation; private sector evaluation; 
international transportation and transport-related trade policy and

[[Page 17]]

issues; regulatory and legislative initiatives and review of maritime/
shipbuilding policies and programs; transport-related trade promotion; 
coordination of land transport relations with Canada and Mexico; 
economic regulation of the airline industry while placing maximum 
reliance on market forces and on actual and potential competition; the 
essential air service program and other rural air service programs; and, 
in coordination with the FAA, promotion of the aerospace industry. For 
delegations to the Assistant Secretary for Aviation and International 
Affairs, see Sec. 1.25a(b).



Sec. 1.33  Assistant Secretary for Budget and Programs and Chief 
Financial Officer.

    (a) The Assistant Secretary for Budget and Programs is the principal 
budget and financial advisor to the Secretary and serves as Chief 
Financial Officer (CFO) for the Department. The Assistant Secretary for 
Budget and Programs and CFO provides oversight and policy guidance for 
all budget, financial management, program performance, and internal 
control activities of the Department and its Operating Administrations.
    (b) The Assistant Secretary for Budget and Programs and CFO concurs 
in the appointment and promotion of Chief Financial Officers, Budget 
Officers, and Directors of Finance of the Department and its Operating 
Administrations, and participates with each Administrator in the 
performance reviews of Chief Financial Officers, Budget Officers, and 
Directors of Finance in each of the Operating Administrations.
    (c) The Assistant Secretary for Budget and Programs and CFO, in 
consultation with the Chief Information Officer, may designate any 
information technology system as a financial management system under the 
CFO's policy and oversight area of responsibility.
    (d) The Assistant Secretary for Budget and Programs and CFO serves 
as the Vice Chair of the Department's Credit Council. The Office of the 
Assistant Secretary supports the Department's Credit Council by 
analyzing applications for the Department's various credit programs. The 
CFO also oversees the TIFIA program and the TIFIA Joint Program Office 
on behalf of the Secretary, including the evaluation of individual 
projects, and provides overall policy direction and program decisions 
for the TIFIA program.
    (e) The Office of the Assistant Secretary for Budget and Programs 
and CFO is responsible for preparation, review, and presentation of 
Department budget estimates; liaison with the Office of Management and 
Budget and Congressional Budget and Appropriations Committees; 
preparation of the Department's annual financial statements; 
departmental financial plans, apportionments, reapportionments, 
reprogrammings, and allotments; program and systems evaluation and 
analysis; program evaluation criteria; program resource plans; analysis 
and review of legislative proposals and one-time reports and studies 
required by Congress; and budget and financial management relating to 
the Office of the Secretary.



Sec. 1.34  Delegations to the Assistant Secretary for Budget and 
Programs and Chief Financial Officer.

    The Assistant Secretary for Budget and Programs and CFO is delegated 
authority to:
    (a) Serve as the Department's Chief Financial Officer pursuant to 31 
U.S.C. 901 (Establishment of Agency Chief Financial Officers).
    (b) Exercise day-to-day operating management responsibility over the 
Office of Budget and Program Performance, the Office of Financial 
Management, and the Office of the CFO for the Office of the Secretary.
    (c) Direct and manage the Departmental planning, evaluation, budget, 
financial management, and internal control activities.
    (d) Exercise oversight and provide exclusive policy guidance to the 
Enterprise Services Center (ESC) regarding all financial management 
activities conducted by ESC and financial systems operated by ESC. This 
authority includes concurrence with any organizational changes within 
the Federal Aviation Administration that may affect financial management 
operations of the ESC.

[[Page 18]]

    (e) Request apportionment or reapportionment of funds by the Office 
of Management and Budget, provided that no request for apportionment or 
reapportionment which anticipates the need for a supplemental 
appropriation shall be submitted to the Office of Management and Budget 
without appropriate certification by the Secretary.
    (f) Issue allotments or allocations of funds to components of the 
Department.
    (g) Authorize and approve official travel and transportation for 
staff members of the Immediate Office of the Secretary including 
authority to sign and approve related travel orders and travel vouchers, 
but not including requests for overseas travel.
    (h) Issue monetary authorizations for use of reception and 
representation funds.
    (i) Act for the Secretary and Deputy Secretary with respect to 
certain budgetary and administrative matters relating to the Immediate 
Office of the Secretary.
    (j) Exercise the Secretary's authority under 31 U.S.C. 3711 to 
collect, compromise, suspend collection action on, or terminate claims 
of the United States not exceeding $100,000 (excluding interest) which 
are referred to, or arise out of the activities of, the Office of the 
Secretary (excluding claims pertaining to the Working Capital Fund).
    (k) Exercise the Secretary's authority under the Improper Payments 
Elimination and Recovery Act of 2010 (Pub. L. 111-204) (33 U.S.C. 3301 
note).
    (l) Exercise the Secretary's authority under the Improper Payments 
Information Act of 2002 (Pub. L. 107-300) (31 U.S.C. 3321 note).
    (m) Exercise the Secretary's authority under the Recovery Auditing 
Act (Section 831, Defense Authorization Act for FY 2002 (Pub. L. 107-
107).
    (n) Exercise the Secretary's authority under the Federal Financial 
Management Improvement Act of 1996 (31 U.S.C. 3512 note).
    (o) Exercise the Secretary's authority under Federal Managers' 
Financial Integrity Act of 1982 (FMFIA) (31 U.S.C. 3512 note).
    (p) Exercise the Secretary's authority under the Accounting and 
Auditing Act of 1950 (31 U.S.C. 3512), as amended by FMFIA.
    (q) Exercise the Secretary's authority under the Government 
Performance and Results Act (GPRA) (Pub. L. 103-623) (1993).
    (r) Exercise the Secretary's authority under the Accountability of 
Tax Dollars Act of 2002, 31 U.S.C. 3515.
    (s) Exercise the Secretary's authority under the Government 
Management Reform Act of 1994 (GMRA) (Pub. L. 103-356).



Sec. 1.35  Assistant Secretary for Governmental Affairs.

    The Assistant Secretary for Governmental Affairs serves as the 
Department's primary point of contact for Congressional offices, as well 
as State and locally elected officials; works with other departmental 
offices to ensure that Congressional mandates are fully implemented by 
the Department; and works with the White House, other Federal agencies, 
and Congress to fulfill the Department's legislative priorities. The 
Assistant Secretary coordinates congressional and intergovernmental 
activities with governmental affairs offices in the Operating 
Administrations. The Assistant Secretary participates with each 
Administrator in the performance reviews of the Operating 
Administrations' Directors of Governmental Affairs. The Assistant 
Secretary supervises the Deputy Assistant Secretary for Tribal 
Government Affairs who plans and coordinates the Department's policies 
and programs with respect to Indian tribes and tribal organizations.



Sec. 1.36  Delegations to the Assistant Secretary for Governmental 
Affairs.

    The Assistant Secretary for Governmental Affairs is delegated 
authority to:
    (a) Establish procedures for responding to Congressional 
correspondence; and
    (b) Supervise the Deputy Assistant Secretary for Tribal Government 
Affairs.



Sec. 1.37  Assistant Secretary for Administration.

    The Assistant Secretary for Administration is the principal advisor 
to the

[[Page 19]]

Secretary and Deputy Secretary on Department-wide administrative 
matters. The Assistant Secretary for Administration serves as the 
Designated Agency Safety and Health Official. The Office of the 
Assistant Secretary for Administration's responsibilities include: 
strategic management of human capital; monitoring the progress of 
departmental offices related to sustainability goals; controls and 
standards to ensure that procurement and financial assistance programs 
are in accord with good business practice; follow-up and resolution of 
Government Accountability Office and Inspector General audit reviews; 
information resource management; property management information; 
facilities; and security. The Assistant Secretary for Administration is 
responsible for recommending performance objectives for the Operating 
Administrations' Directors of Human Resources.



Sec. 1.38  Delegations to the Assistant Secretary for Administration.

    The Assistant Secretary for Administration is delegated authority 
for the following:
    (a) Acquisition. (1) Exercise procurement authority with respect to 
requirements of the Office of the Secretary.
    (2) Make the required determinations with respect to mistakes in 
bids relative to sales of personal property conducted by the Office of 
the Secretary without power of redelegation.
    (3) Carry out the functions vested in the Secretary by sections 3 
and 4(b) (as appropriate) of Executive Order 11912 (energy 
conservation).
    (4) Carry out the functions delegated to the Secretary from time to 
time by the Administrator of General Services to lease real property for 
Department use.
    (5) Carry out the duties and responsibilities of agency head for 
departmental procurement within the meaning of the Federal Acquisition 
Regulation. This authority as agency head for departmental procurement 
excludes duties, responsibilities, and powers expressly reserved for the 
Secretary of Transportation.
    (6) Serve as Deputy Chief Acquisition Officer.
    (7) Provide departmental guidance on grants, cooperative agreements, 
loans, and other transactions.
    (b) Personnel. (1) Conduct a personnel management program for the 
Office of the Secretary of Transportation, with authority to take, 
direct others to take, recommend or approve any personnel action with 
respect to such authority.
    (2) Serve as Vice Chairman of the Departmental Executive Resources 
Board.
    (3) Exercise emergency authority to hire without the prior approval 
of the Deputy Secretary normally required by departmental procedures 
implementing general employment limitations when in the judgment of the 
Assistant Secretary immediate action is necessary to effect the hire and 
avoid the loss of a well-qualified job applicant, and for similar 
reasons.
    (4) Review proposals of the Office of the Secretary for each new 
appointment or transfer to verify the essentiality of the position.
    (5) Approve employment of experts and consultants in accordance with 
5 U.S.C. 3109.
    (6) Provide policy and overall direction in the execution of the DOT 
Labor-Management Relations Program, including issuing final 
interpretations for the Department and its Operating Administrations on 
matters arising under section 7117 of title VII of the Civil Service 
Reform Act of 1978.
    (7) Develop and operate the Federal Employee Workplace Drug and 
Alcohol Testing Program in accordance with Executive Order 12564 and The 
Omnibus Transportation Employee Testing Act of 1991, Public Law 102-143, 
Title V.
    (8) Serve as the Chief Human Capital Officer:
    (i) Oversee, direct, and execute all authorities included in the 
Chief Human Capital Officers Act of 2002 (5 U.S.C. 1401 et seq.); and
    (ii) Advise the Secretary on the Department's human capital needs 
and obligations, and to implement all related rules and regulations of 
the President and the Office of Personnel Management, and all laws 
government human resource management as delineated in the Federal 
Workforce Improvement Act of 2002.

[[Page 20]]

    (c) Sustainability. Responsible for ensuring that the Department 
meets its sustainability goals pursuant to the Energy Independence and 
Security Act (EISA) of 2007 (Pub. L. 110-140); the Energy Policy Act of 
2005 (Pub. L. 109-58); E.O. 13514 (Federal Leadership in Environmental, 
Energy, and Economic Performance); and E.O. 14323 (Strengthening Federal 
Environmental, Energy, and Transportation Management).
    (d) Finance. (1) Administer the financial and fiscal affairs of the 
Office of the Secretary (other than those for which the Assistant 
Secretary for Budget and Programs and CFO is responsible), in accordance 
with 31 U.S.C. 3512.
    (2) Settle and pay claims by employees of the Office of the 
Secretary for personal property losses, as provided by 31 U.S.C. 241(b).
    (3) Waive claims and make refunds in connection with claims of the 
United States for erroneous Working Capital Fund (WCF) payments of pay 
and allowances or of travel, transportation, and relocation expenses and 
allowances to a WCF employee of the Office of the Secretary in amounts 
aggregating not more than $1,500 without regard to any repayments, and 
deny requests for waiver of such claims regardless of the aggregate 
amount of the claim, as provided by 4 CFR parts 91, 92, and 93. This 
authority may be redelegated only to the Director of Financial 
Management.
    (4) Compromise, suspend collection action on, or terminate claims of 
the United States not exceeding $100,000 (excluding interest) which are 
referred to, or arise out of the activities of, the Working Capital 
Fund.
    (5) Oversee the Working Capital Fund for the Office of the 
Secretary, established by 49 U.S.C. 327.
    (6) Oversee a mass transportation and vanpool transportation fringe 
benefit program under Executive Order 13150.
    (e) Special funds. Except as otherwise delegated, establish or 
operate, or both, such special funds as may be required by statute or by 
administrative determination. This excludes the Working Capital Fund (49 
U.S.C. 327).
    (f) Security. (1) Serves as the agency representative appointed by 
the Secretary of Transportation to participate on the Interagency 
Security Committee in accordance with Executive Order 12977, to 
establish policies for the security in and protection of Federal 
facilities.
    (2) Represents the department on the White House Communications 
Agency Principal Communications Working Group and the Department of 
State Overseas Security Policy Board.
    (3) Conducts an internal security management program for the 
Department of Transportation with authority to take, direct others to 
take, recommend, or approve security actions with respect to such 
authorities related to personnel security, physical security, technical 
security, and classified and sensitive information management.
    (4) Issues identification media as directed by Homeland Security 
Presidential Directive 12, ``Policy for Common Identification Standard 
for Federal Employees and Contractors'' and other identification media 
(including credentials, passports and visas) by direction of the 
Secretary.
    (5) Manages the Department's classified information program as 
directed by Executive Order 13526, ``Classified National Security 
Information.''
    (6) Takes certain classified actions on behalf of the Department in 
connection with technical counter-surveillance programs as required by 
Executive Order 13526, ``Classified National Security Information.''
    (7) In conjunction with the Office of Security, Intelligence and 
Emergency Response, and the Office of the General Counsel, carries out 
the functions vested in the Secretary by 49 U.S.C. 40119(b), as 
implemented by 49 CFR part 15, related to the protection of information 
designated as Sensitive Security Information.
    (8) Ensure Department-wide compliance with Executive Orders 12968 as 
amended, 13467, 13488, 13526, 13556, and related regulations and 
issuances.
    (g) Printing. (1) Request approval of the Joint Committee on 
Printing, Congress of the United States, for any procurement or other 
action requiring Committee approval.
    (2) Certify the necessity for departmental periodicals and request 
approval of the Director of the Office of

[[Page 21]]

Management and Budget (OMB Circular No. A-3 Revised as of Sept. 8, 
1960).
    (h) Building management. Carry out the functions vested in the 
Secretary by sections 1(c) and 4(b) (as appropriate) of Executive Order 
11912 (energy conservation).
    (i) Hearings. Provide logistical and administrative support to the 
Department's Office of Hearings.
    (j) Federal real property management. Carry out the functions 
assigned to the Secretary with respect to Executive Order 13327, as 
amended.
    (k) The Uniform Act. Carry out the functions, powers, and duties of 
the Secretary to implement the Uniform Act (42 U.S.C. Chapter 61) with 
respect to programs administered by the Office of the Secretary. This 
authority is subject to the requirements listed in Sec. 1.81 that 
govern all Operating Administrations' authority with respect to the 
Uniform Act.
    (l) Regulations. Issue Departmental procurement regulations, subject 
to coordination with the General Counsel and interested Operating 
Administrations. In commenting upon proposed provisions for the 
procurement regulations, the Operating Administrations will indicate the 
nature and purpose of any additional implementing or supplementing 
policy guidance which they propose to issue at the Operating 
Administration level.
    (m) Designated Agency Safety and Health Official. Serve as the 
Designated Agency Safety and Health Official under 29 CFR 1960.6(a) to 
represent the interest of, and support, the Department's occupational 
safety and health program.
    (n) Senior Real Property Officer. Serve as the Senior Real Property 
Officer for the Department pursuant to Executive Order 13327, Federal 
Real Property Asset Management (as amended), and chair the Departmental 
Real Property Planning Council.
    (o) Telework Managing Officer. Serve as the Telework Managing 
Officer pursuant to 5 U.S.C. 6505.



Sec. 1.38a  Redelegations by the Assistant Secretary for Administration.

    (a) The Director, Office of the Senior Procurement Executive is 
redelegated the authority to:
    (1) Carry out the duties and responsibilities of agency head for 
departmental procurement within the meaning of the Federal Acquisition 
Regulation except for those duties expressly reserved for the Secretary 
of Transportation.
    (2) Carry out the functions of the Chief Acquisition Officer (CAO) 
except for those functions specifically reserved for the Deputy 
Secretary. In carrying out these functions and in support of 
requirements under Services Acquisition Reform Act (SARA), enacted as 
part of the National Defense Authorization Act for 2004--Public Law 108-
136, the Senior Procurement Executive (SPE) is expected to interact 
directly, and without intervening authority, with the CAO on issues 
related to strategic acquisition policy, implementation, and management. 
The nature and frequency of interactions with the CAO will be determined 
mutually between the SPE and the CAO.
    (3) Procure and authorize payment for property and services for the 
Office of the Secretary, with power to re-delegate and authorize 
successive re-delegations.
    (b) The Director of Human Resources Management is redelegated the 
authority to:
    (1) Develop and oversee human resource policies for the Department 
of Transportation, including concurrence in the appointment and 
promotion of all HR Directors in each Operating Administration and 
participation with each Administrator in the performance reviews of HR 
Directors.
    (2) Conduct a personnel management program for the Office of the 
Secretary with authority to take, direct others to take, recommend or 
approve any personnel action with respect to such authority.
    (3) Develop, coordinate, and issue wage schedules for Department 
employees under the Federal Wage System.
    (c) The Director of Financial Management is redelegated the 
authority to:

[[Page 22]]

    (1) Designate to the Treasury Department certifying officers and 
designated agents for the Office of the Secretary and imprest fund 
cashiers for the Departmental Headquarters.
    (2) Certify to the validity of obligations as required by 31 U.S.C. 
200 and to the adequacy of bond coverage for the designations under 
section 160(c)(2).
    (3) Sign reports on Budget Execution as required by OMB Circular A-
34 (Revised).
    (4) Review and approve for payment any voucher for $25 or less the 
authority for payment of which is questioned by a certifying or 
disbursing officer.
    (5) Process essential air service payments.
    (6) Approve claims of WCF employees allowable under 31 U.S.C. 3721 
for amounts of $500 or less.



Sec. 1.39  Executive Secretariat.

    The Executive Secretariat provides organized staff services to the 
Secretary and Deputy Secretary to assist them in carrying out their 
management functions and their responsibilities for formulating, 
coordinating and communicating major policy decisions. The Office 
controls and coordinates internal and external material directed to the 
Secretary and Deputy Secretary and ensures that their decisions and 
instructions are implemented.



Sec. 1.40  Departmental Office of Civil Rights.

    The Departmental Office of Civil Rights serves as the Department's 
Equal Employment Opportunity (EEO) Officer and Title VI Coordinator. The 
Director also serves as principal advisor to the Secretary and the 
Deputy Secretary on the civil rights and nondiscrimination statutes, 
regulations, and Executive Orders applicable to the Department, 
including titles VI and VII of the Civil Rights Act of 1964, as amended, 
the Age Discrimination in Employment Act of 1967, as amended, the Age 
Discrimination Act of 1975, as amended, section 504 of the 
Rehabilitation Act of 1973, as amended, the Americans with Disabilities 
Act of 1990, the Equal Pay Act of 1963, the ADA Amendments Act of 2008, 
and the Genetic Information Nondiscrimination Act of 2008. The 
Departmental Office of Civil Rights provides guidance to the Operating 
Administrations and Secretarial officers on these matters. The Office 
periodically reviews and evaluates the civil rights programs of the 
Operating Administrations to ensure that recipients of financial 
assistance meet applicable Federal civil rights requirements.



Sec. 1.41  Delegations to the Director of the Departmental Office of 
Civil Rights.

    The Director of the Departmental Office of Civil Rights is delegated 
authority to conduct all stages of the formal employment discrimination 
complaints process (including acceptance/dismissal, investigation, and 
final adjudication); to provide guidance to the Operating 
Administrations and Secretarial officers concerning the implementation 
and enforcement of all civil rights laws, regulations and Executive 
Orders for which the Department is responsible; to otherwise perform 
activities to ensure compliance with external civil rights programs; and 
to review and evaluate the Operating Administrations' enforcement of 
these authorities. These authorities include:
    (a) Title VI and VII of the Civil Rights Act of 1964, 42 U.S.C. 
2000d et seq. and 2000e et seq.
    (b) Sections 501 and 504 of the Rehabilitation Act of 1973, 29 
U.S.C. 791 and 794-794a.
    (c) Age Discrimination in Employment Act of 1967, 29 U.S.C. 621 et 
seq.
    (d) Age Discrimination Act of 1975, 42 U.S.C. 6101 et seq.
    (e) Americans with Disabilities Act of 1990, 42 U.S.C. 12101-121213.
    (f) ADA Amendments Act of 2008 (Pub. L. 110-325) [42 U.S.C. 12101 
Note].
    (g) Genetic Information Nondiscrimination Act of 2008, 42 U.S.C. 
2000ff et seq.
    (h) Equal Pay Act of 1963, 29 U.S.C. 206(d).
    (i) Alcohol, Drug Abuse, and Mental Health Administration 
Reorganization Act (Pub. L. 102-321)
    (j) Chapter XIV of Subtitle B, of Title 29 of the CFR (Equal 
Employment Opportunity Commission Regulations).
    (k) Title VIII of the Civil Rights Act of 1968 (Pub. L. 90-284) [42 
U.S.C. 3601 et seq].

[[Page 23]]

    (l) 40 U.S.C. 476 (prohibition on sex discrimination).
    (m) Title IX of the Education Amendments of 1972, 20 U.S.C. 1681.
    (n) In coordination with the Assistant Secretary for Transportation 
Policy, Executive Order No. 12898, Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income Populations 
(See also E.O. 12948).
    (o) 49 U.S.C. 306 (prohibition on discrimination in programs 
receiving financial assistance), 5310 (transportation for elderly 
persons and persons with disabilities), 5332 (nondiscrimination in mass 
transportation), 41705 (discrimination by air carriers against 
handicapped persons), 47113 (minority and disadvantaged business 
participation), and 47123 (nondiscrimination in airport improvement 
programs).
    (p) 23 U.S.C. 140, 324, and 402(b)(1)(D) (nondiscrimination in 
highway programs).
    (q) The Intermodal Surface Transportation Efficiency Act of 1991, 
Public Law 102-240, 105 Stat. 1919, section 1003.



Sec. 1.42  Office of Small and Disadvantaged Business Utilization.

    The Director of the Office of Small and Disadvantaged Business 
Utilization ensures that the Department's small and disadvantaged 
business policies and programs are developed in a fair, efficient, and 
effective manner. The Office is responsible for the Department's 
implementation and execution of the functions and duties under the Small 
Business Act, and providing opportunities, technical assistance, and 
financial services to the small and disadvantaged business community.



Sec. 1.43  Delegations to the Director of the Office of Small and 
Disadvantaged Business Utilization.

    The Director of Small and Disadvantaged Business Utilization is 
delegated authority to:
    (a) Exercise departmental responsibility for the implementation and 
execution of functions and duties under sections 2[8] and 2[15] of the 
Small Business Act (Public Law 85-836) [15 U.S.C. 637 and 644].
    (b) Carry out the functions vested in the Secretary by 49 U.S.C. 332 
(Minority Resource Center).



Sec. 1.44  Office of Intelligence, Security and Emergency Response.

    The Director of the Office of Intelligence, Security and Emergency 
Response is responsible for the development, coordination, and execution 
of plans and procedures for the Department to balance transportation 
security requirements with the safety, mobility and economic needs of 
the Nation through effective intelligence, security, preparedness and 
emergency response programs. The Director is the Department's principal 
Emergency Coordinator for the implementation of these programs.



Sec. 1.45  Delegations to the Director of the Office of Intelligence,
Security and Emergency Response.

    The Director of Intelligence, Security, and Emergency Response is 
delegated authority to:
    (a) Carry out the functions related to emergency preparedness and 
response vested in the Secretary by the following authorities: 49 U.S.C. 
101 and 301; the Defense Production Act of 1950, 50 U.S.C. App. 2061 et 
seq., as such authorities are delegated to the Department under 
Executive Order 13603, National Defense Resource Preparedness; Executive 
Order 12148, as amended, Federal Emergency Management; Executive Order 
12656, Assignment of Emergency Preparedness Responsibilities (as 
amended; see E.O. 13286); Executive Order 12742, National Security 
Industrial Responsiveness; Executive Order 13434, National Security 
Professional Development; Reorganization Plan No. 3 of 1978; and such 
other statutes, executive orders, and other directives as may pertain to 
emergency preparedness and response.
    (b) Serve as the Department's Continuity Coordinator in accordance 
with National Security Presidential Directive 51/Homeland Security 
Presidential Directive 20, National Continuity Policy, and Federal 
Continuity Directives (FCD) 1 Federal Executive Branch National 
Continuity Program and Requirements and FCD 2 Federal Executive Branch 
Mission Essential Function and

[[Page 24]]

Primary Mission Essential Function Identification and Submission 
Process. Provide leadership for departmental programs pertaining to 
intelligence related to the transportation sector, transportation 
security policy, and civil transportation emergency preparedness and 
response activities.
    (c) Lead departmental collaboration efforts with the Department of 
Homeland Security and other Departments and Agencies related to 
transportation security and transportation infrastructure protection as 
required by Homeland Security Presidential Directive 7, Critical 
Infrastructure Identification, Prioritization, and Protection.
    (d) Together with the Assistant Secretary for Administration, carry 
out oversight and management of the duties pertaining to national 
security professional development assigned to the Secretary under 
Executive Order 13434, National Security Professional Development.
    (e) Together with the Office of the Assistant Secretary for Aviation 
and International Affairs, coordinate the Department's responsibilities 
under National Security Presidential Directive 44, Management of 
Interagency Efforts Concerning Reconstruction and Stabilization, and 
Presidential Decision Directive 56, Managing Complex Contingency 
Operations, pertaining to interagency reconstruction and stabilization 
assistance.
    (f) Lead departmental efforts pertaining to transportation-related 
international civil emergency preparedness activities, including 
coordinating DOT representation on North Atlantic Treaty Organization 
committees, as directed under Executive Order 12656 (as amended; see 
E.O. 13286).
    (g) Carry out the functions vested in the Secretary by 49 U.S.C 
40119(b), as implemented by 49 CFR part 15, related to the designation 
of information as Sensitive Security Information.
    (h) Oversee the Department's protective service program.
    (i) Serve as the Secretary's representative to the Transportation 
Security Oversight Board, in accordance with 49 U.S.C 115, when so 
designated.
    (j) Lead Departmental participation in internal and interagency 
planning efforts related to preparedness in accordance with Presidential 
Policy Directive 8, National Preparedness.
    (k) Serve as the Secretary's senior advisor on matters pertaining to 
public health, biological, and medical matters.
    (l) Develop departmental plans to support the Department of Defense 
Civil Reserve Air Fleet (CRAF) program and allocate civil air carrier 
aircraft to CRAF based on Department of Defense requirements.
    (m) Oversee operation of the Department's Crisis Management Center.
    (n) Lead departmental efforts for all interaction with the Program 
Manager, Information Sharing Environment to include appointing the 
Associate Director for Intelligence as the DOT Information Sharing 
Program Manager to coordinate day-to-day Information Sharing Environment 
matters.
    (o) Carry out departmental responsibilities under Executive Order 
13587, Structural Reforms to Improve the Security of Classified Networks 
and the Responsible Sharing and Safeguarding of Classified Information, 
including overseeing classified information sharing and safeguarding 
efforts for DOT. Oversee the day-to-day activities for monitoring the 
Top Secret and Secret classified network used by DOT.
    (p) Serve as the department's program manager responsible for 
oversight of all intelligence programs, to include the DOT 
Counterintelligence effort as it pertains to the DOT classified 
networks, and coordinate intelligence matters throughout the department. 
Nothing in this provision is intended to prohibit or limit a component's 
ability to conduct intelligence activities authorized by law.



Sec. 1.46  Office of Public Affairs.

    The Director of Public Affairs is the principal advisor to the 
Secretary and Secretarial Officers on public affairs issues. The Office 
of Public Affairs prepares news releases and supporting media materials, 
and maintains a new media presence. The Office also provides information 
to the Secretary on opinions and reactions of the public and news media 
on programs and transportation issues. The Office of Public Affairs is 
responsible for the supervision, coordination, and review of the

[[Page 25]]

activities of the public affairs offices within the Operating 
Administrations.



Sec. 1.47  Delegations to the Assistant to the Secretary and Director 
of Public Affairs.

    The Assistant to the Secretary and Director of Public Affairs is 
delegated authority to:
    (a) Monitor the overall public information program and review and 
approve departmental informational materials having policy-making 
ramifications before they are printed and disseminated.
    (b) Carry out the functions to promote carpooling and vanpooling 
transferred to the Department of Transportation by section 310 of the 
Department of Energy Organization Act of 1977 (Pub. L. 95-91) [42 U.S.C. 
7159].



Sec. 1.48  Office of the Chief Information Officer.

    The Chief Information Officer (CIO) is the principal information 
technology (IT), cyber security, privacy, and records management advisor 
to the Secretary. The Office of the CIO supports the Organizational 
Excellence Strategic Goal by providing leadership on all matters 
associated with the Department's $3.5 billion IT portfolio.



Sec. 1.49  Delegations to the Chief Information Officer.

    The Chief Information Officer is delegated authority to carry out 
all functions and responsibilities:
    (a) Assigned to the Secretary with respect to the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3506);
    (b) Assigned to the Secretary with respect to the Clinger-Cohen Act 
of 1996 (40 U.S.C. 11312 to 11314, and 11317);
    (c) Assigned to the Secretary with respect to the E-Government Act 
of 2002, Public Law 107-347;
    (d) Necessary to ensure compliance with the Federal Information 
Security Management Act of 2002 (44 U.S.C. 3534 and 3544);
    (e) To serve as the Chief Privacy Officer under the Privacy Act, 5 
U.S.C. 552a (note; see Pub. L. 108-447) and to administer the Privacy 
Act and 49 CFR part 10 (Maintenance of and Access to Records Pertaining 
to Individuals) in connection with the records of the Office of the 
Secretary;
    (f) Necessary to issue notices of Department of Transportation 
systems of records as required by the Privacy Act; and
    (g) Assigned to the Secretary with respect to the Federal Records 
Act (44 U.S.C. 3101-3102) and necessary to ensure compliance with the 
regulations of the National Archives and Records Administration (36 CFR 
1220 et seq.; 44 U.S.C. Chapters 21, 29, 31, and 33), in coordination 
with the General Counsel.



Sec. 1.50  Office of Drug & Alcohol Policy & Compliance.

    The Office of Drug & Alcohol Policy & Compliance advises the 
Secretary on national and international drug testing and control issues 
and is the principal advisor to the Secretary on rules related to the 
drug and alcohol testing of safety-sensitive transportation employees in 
aviation, trucking, railroads, mass transit, pipelines, and other 
transportation industries. The Office, in coordination with the Office 
of the General Counsel, publishes and provides interpretations of rules 
related to 49 CFR Part 40 on the conduct of drug and alcohol tests, 
including how to conduct tests, and which procedures to use when 
testing. The Office coordinates with Federal Agencies and assists 
foreign governments in developing drug and alcohol testing programs and 
implementing the President's National Drug Control Strategy.



Sec. 1.60  General Authorizations and Delegations to Secretarial 
Officers.

    (a) Acting in his or her own name and title, the Under Secretary, 
the General Counsel, and each Assistant Secretary, within his or her 
sphere of responsibility, is authorized to identify and define the 
requirements for, and to recommend to the Secretary, new or revised 
departmental policies, plans, and proposals. Each of these officers is 
authorized to issue departmental standards, criteria, systems and 
procedures that are consistent with applicable laws, Executive Orders, 
Government-wide regulations and policies established by the Secretary, 
and to inspect, review, and evaluate departmental program performance 
and effectiveness

[[Page 26]]

and advise the Secretary regarding the adequacy thereof.
    (b) Except for nondelegable statutory duties including those that 
transfer as a result of succession to act as Secretary of 
Transportation, each Deputy Assistant Secretary and Deputy General 
Counsel is authorized to act for and perform the duties of his or her 
principal in the absence or disability of the principal and as otherwise 
directed by the principal.
    (c) The Deputy Secretary, the Under Secretary, the General Counsel, 
and the Assistant Secretaries for Administration, Budget and Programs, 
and Governmental Affairs are delegated authority to:
    (1) Redelegate and authorize successive redelegations of authority 
granted by the Secretary within their respective organizations, except 
as limited by law or specific administrative reservation, including 
authority to publish those redelegations in appendix A of this part.
    (2) Authorize and approve official travel (except foreign travel) 
and transportation for themselves, their subordinates, and others 
performing services for, or in cooperation with, the Office of the 
Secretary.
    (3) Establish ad hoc committees for specific tasks within their 
assigned staff area.
    (4) Establish, modify, extend, or terminate standing committees 
within their specific areas of responsibility when directed or 
authorized to do so by the Secretary.
    (5) Designate members of interagency committees when such committees 
are specifically concerned with responsibilities of direct interest to 
their office.
    (6) Exercise the following authorities with respect to positions in 
the Senior Executive Service and Senior Level within their respective 
areas of responsibility:
    (i) Determine how executive level positions will be filled; i.e., by 
reassignment, promotion, or appointment.
    (ii) Establish selection criteria to be used in identifying eligible 
candidates.
    (iii) Confer with the Administrators on selection criteria and 
candidates for an executive level position that is a counterpart of an 
activity or position in the Office of the Secretary.
    (iv) Recommend final selection for executive level positions, 
subject to review by the Executive Committee of the Departmental 
Executive Resources Board and approval by the Secretary and the Office 
of Personnel Management.
    (7) Enter into inter- and intra-departmental reimbursable agreements 
other than with the head of another department or agency (31 U.S.C. 
686). This authority may be redelegated only to office directors or 
other comparable levels and to contracting officers.
    (8) Administer and perform the functions described in their 
respective functional statements.
    (9) Exercise the authority of the Secretary to make certifications, 
findings and determinations under the Regulatory Flexibility Act (Pub. 
L. 96-354) with regard to any rulemaking document for which issuance 
authority is delegated by other sections in this part. This authority 
may be redelegated to those officials to whom document issuance 
authority has been redelegated.
    (10) Exercise the authority of the Secretary to resolve informal 
allegations of discrimination arising in or relating to their respective 
organizations through Equal Employment Opportunity counseling or the 
Alternative Dispute Resolution process and to develop and implement 
affirmative action and diversity plans within their respective 
organizations.
    (11) Exercise the authority vested in the Secretary by 49 U.S.C. 
326(a) and 31 U.S.C. 1353 to accept, in an amount not exceeding $1,000 
in value and subject to the concurrence of the Designated Agency Ethics 
Official, the following: gifts of property (other than real property), 
gifts of services (in carrying out aviation duties and powers) or 
reimbursement of travel expenses from non-federal sources. Acceptance of 
such gifts or travel reimbursement exceeding $1,000 in value or those 
that are otherwise significant may only take place with the additional 
concurrence of the General Counsel. This delegation extends only to the 
acceptance of gifts or travel expenses and does not authorize the 
solicitation of gifts, which is reserved to the Secretary at 49 CFR 
1.21.

[[Page 27]]



                  Subpart C_Office of Inspector General



Sec. 1.70  Overview.

    This subpart describes the key responsibilities of the Office of 
Inspector General, the structure of the office, and the authority of the 
Inspector General.



Sec. 1.71  Key responsibilities.

    The Inspector General conducts, supervises, and coordinates audits 
and investigations; reviews existing and proposed legislation and makes 
recommendations to the Secretary and Congress concerning their effect on 
the economy and efficiency of program administration, or the prevention 
and detection of fraud and abuse; recommends policies for and conducts, 
supervises, or coordinates other activities of the Department for the 
purpose of promoting economy and efficiency in program administration, 
or preventing and detecting fraud and abuse; and keeps the Secretary and 
the Congress fully and currently informed.



Sec. 1.72  Structure.

    This Office is composed of:
    (a) The Office of the Deputy Inspector General;
    (b) The Office of the Principal Inspector General for 
Investigations;
    (c) The Office of the Principal Inspector General for Auditing and 
Evaluation;
    (d) The Office of the Assistant Inspector General for 
Administration;
    (e) The Office of the Assistant Inspector General for Legal, 
Legislative and External Affairs;
    (f) The Office of the Assistant Inspector General for Aviation and 
Special Programs;
    (g) The Office of the Assistant Inspector General for Financial and 
Information Technology Audits;
    (h) The Office of the Assistant Inspector General for Highway and 
Transit Audits;
    (i) The Office of the Assistant Inspector General for Rail, Maritime 
and Economic Analysis; and
    (j) The Office of the Assistant Inspector General for Acquisition 
and Procurement Audits.



Sec. 1.73  Authority of Inspector General.

    The Inspector General shall report to and be under the general 
supervision of the Secretary and Deputy Secretary. The Inspector General 
has such authority as is provided by the Inspector General Act of 1978, 
as amended, and as is otherwise provided by law. Authorities provided to 
the Inspector General by law are reserved to the Inspector General. In 
accordance with the statutory intent of the Inspector General Act to 
create an independent and objective unit, the Inspector General is 
authorized to make such investigations and reports relating to the 
administration of the programs and operations of the Department as are, 
in the judgment of the Inspector General, necessary and desirable. 
Neither the Secretary nor the Deputy Secretary shall prevent or prohibit 
the Inspector General from initiating, carrying out, or completing any 
audit or investigation, or from issuing any subpoena during the course 
of any audit or investigation.



Sec. 1.74  Delegations to Inspector General.

    The Inspector General is delegated authority to:
    (a) Redelegate and authorize successive redelegations of authority 
granted by the Secretary within the Office of Inspector General, except 
as limited by law or specific administrative reservation.
    (b) Authorize and approve official travel, including foreign travel 
and transportation for themselves, their subordinates, and others 
performing services for, or in cooperation with, the Office of the 
Secretary.
    (c) Exercise the authority of the Secretary to resolve informal 
allegations of discrimination arising in or relating to the Inspector 
General through Equal Employment Opportunity counseling or the 
Alternative Dispute Resolution process and to develop and implement 
affirmative action and diversity plans.
    (d) Exercise the authority vested in the Secretary by 49 U.S.C. 
326(a) to accept gifts of property (other than real property) or 
services (in carrying out aviation duties and powers), and the authority 
to accept travel reimbursements from non-federal sources under 31 U.S.C. 
1353.

[[Page 28]]

    (e) The implied authority to solicit gifts associated with 49 U.S.C. 
326(a), notwithstanding the reservation of authority to the Secretary in 
section 1.21.
    (f) Carry out the emergency preparedness functions assigned to the 
Secretary by Executive Order 12656 (as amended; see E.O. 13286) and by 
the Federal Emergency Management Agency and General Services 
Administration (FEMA and GSA) as they pertain to the Office of Inspector 
General, including those relating to continuity of operations, emergency 
resource management, and training.
    (g) Determine the existence and amount of indebtedness and the 
method of collecting repayments from employees and members within the 
Office of Inspector General and collect repayments accordingly, as 
provided by 5 U.S.C. 5514.
    (h) Waive claims and make refunds in connection with claims of the 
United States for erroneous payment of pay and allowances or of travel, 
transportation, and relocation expenses and allowances in amounts 
aggregating not more than $1,500 without regard to any repayments, and 
deny requests for waiver of such claims regardless of the aggregate 
amount of the claim, as provided by 4 CFR parts 91, 92, and 93.
    (i) Settle and pay claims by employees for personal property losses 
as provided by 31 U.S.C. 3721 (Claims of personnel of agencies and the 
District of Columbia government for personal property damage or loss).
    (j) Review and approve for payment any voucher for $25 or less the 
authority for payment of which is questioned by a certifying or 
disbursing officer.
    (k) Request the Attorney General, after the concurrence of the 
General Counsel, to approve the award, compromise, or settlement of any 
tort claim for an amount exceeding $100,000 (excluding interest) (28 
U.S.C. 2672).
    (l) Compromise, suspend collection action on, or terminate claims of 
the United States not exceeding $100,000 (excluding interest) that are 
referred to, or arise out of the activities of the Office of Inspector 
General.
    (m) Compromise, suspend collection action on, or terminate tort 
claims against the United States not exceeding $100,000 (excluding 
interest) that are referred to, or arise out of the activities of the 
Office of Inspector General provided that when the Inspector General 
believes that a claim against the United States presents a novel 
question of law or of policy, he or she shall coordinate with the 
General Counsel to obtain the advice of the Assistant Attorney General 
in charge of the Civil Division; and provided further that whenever he 
or she settles any administrative claim against the United States for an 
amount in excess of $50,000, the Inspector General shall prepare a 
memorandum fully explaining the basis for the action taken and 
coordinate with the General Counsel before sending a copy of the 
memorandum to the Director, Federal Torts Claims Act Staff, Torts Branch 
of the Civil Division, U.S. Department of Justice.
    (n) Make written requests under subsection (b)(7) of the Privacy 
Act, 5 U.S.C. 552a(b)(7), for records maintained by other agencies that 
are necessary to carry out an authorized law enforcement activity.



                   Subpart D_Operating Administrations



Sec. 1.80  Overview.

    This subpart sets forth the key responsibilities of the Operating 
Administrations, and the delegations of authority from the Secretary of 
Transportation to the Administrators.



Sec. 1.81  Delegations to all Administrators.

    (a) Except as prescribed by the Secretary of Transportation, each 
Administrator is authorized to:
    (1) Exercise the authority of the Secretary over and with respect to 
any personnel within their respective organizations.
    (2) Exercise the authority of the Secretary as executive head of a 
department, under any statute, Executive Order or regulation.
    (3) Exercise the authority vested in the Secretary to prescribe 
regulations under 49 U.S.C. 322(a) with respect to statutory provisions 
for which authority is delegated by other sections in this part.

[[Page 29]]

    (4) Carry out the functions of the Secretary concerning 
environmental enhancement by 49 U.S.C. 303 (Duties of the Secretary of 
Transportation: Policy on lands, wildlife and waterfowl refuges, and 
historic sites) and 23 U.S.C. 138 as they relate to matters within the 
primary responsibility of each Operating Administration.
    (5) Carry out the functions of the Secretary under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), section 
176(c) of the Clean Air Act (42 U.S.C. 7506(c)), and related 
environmental laws as they relate to matters within the primary 
responsibility of each Operating Administration.
    (6) Carry out the functions of the Secretary under section 106 of 
the Historic Preservation Act of 1966, 16 U.S.C. 470f, as they relate to 
matters within the primary responsibility of each Operating 
Administration.
    (7) Administer FOIA and 49 CFR part 7 (Public Availability of 
Information) in connection with the records of the Operating 
Administration.
    (8) Administer the Privacy Act, 5 U.S.C. 552a and 49 CFR part 10 
(Maintenance of and Access to Records Pertaining to Individuals) in 
connection with the records of the Operating Administration.
    (9) Make written requests under subsection (b)(7) of the Privacy Act 
for records maintained by other agencies that are necessary to carry out 
an authorized law enforcement activity.
    (10) Carry out the emergency preparedness functions assigned to the 
Secretary by Executive Order 12656, (as amended; see E.O. 13286) and by 
the Federal Emergency Management Agency and General Services 
Administration (FEMA and GSA) as they pertain to his or her 
administration, including those relating to continuity of operations, 
emergency resource management, associated Federal claimant procedures, 
facilities protection and warfare effects monitoring and reporting, 
research, stockpiling, financial aid, and training.
    (11) Enter into inter- and intradepartmental reimbursable agreements 
other than with the head of another department or agency. This authority 
may be redelegated only to Office Directors, Regional Directors, 
District Commanders or other comparable levels and Contracting Officers.
    (12) Determine the existence and amount of indebtedness and the 
method of collecting repayments from employees within their respective 
administrations and collect repayments accordingly, as provided by 5 
U.S.C. 5514. Redelegation of this authority may be made only to the 
principal officials responsible for financial management or such 
officials' principal assistants.
    (13) Waive claims and make refunds in connection with claims of the 
United States for erroneous payment of pay and allowances or of travel, 
transportation, and relocation expenses and allowances in amounts 
aggregating not more than $1,500 without regard to any repayments, and 
deny requests for waiver of such claims regardless of the aggregate 
amount of the claim, as provided by 4 CFR parts 91, 92, and 93. 
Redelegation of this authority may be made only to the level of Regional 
Director or Regional Administrator.
    (14) Settle and pay claims by employees for personal property losses 
as provided by 31 U.S.C. 3721 (Claims of personnel of agencies and the 
District of Columbia government for personal property damage or loss). 
This authority may be redelegated only to Office Directors, Regional 
Directors, or other comparable levels and to those individuals that 
report to the above officials.
    (15) Exercise the authority of the Secretary to resolve informal 
allegations of discrimination arising in or relating to their respective 
organizations through Equal Employment Opportunity counseling or the 
Alternative Dispute Resolution process and to develop and implement 
affirmative action and diversity plans within their respective 
organizations. With regard to external civil rights programs, each 
Administrator exercises authority pursuant to statutes, regulations, 
Executive Orders, or delegations in this subpart to carry out these 
programs, under the guidance of the Director of the Departmental Office 
of Civil Rights, including conducting compliance reviews and other 
activities relating to the enforcement of these statutes, regulations, 
and Executive Orders.

[[Page 30]]

    (16) Review and approve for payment any voucher for $25 or less the 
authority for payment of which is questioned by a certifying or 
disbursing officer.
    (17) Authorize and approve official non-foreign travel and 
transportation for themselves, their subordinates, and others performing 
services for, or in cooperation with, their Operating Administrations.
    (18) Exercise the authority of the Secretary to make certifications, 
findings and determinations under the Regulatory Flexibility Act (5 
U.S.C. 601, et seq. with regard to any rulemaking document for which 
issuance authority is delegated by other sections in this part. This 
authority may be redelegated to those officials to whom document 
issuance authority has been delegated.
    (19) Carry out the functions vested in the Secretary by 15 U.S.C. 
3710(a), which authorizes agencies to permit their laboratories to enter 
into cooperative research and development agreements.
    (20) Request the Attorney General, after the concurrence of the 
General Counsel, to approve the award, compromise, or settlement of any 
tort claim for an amount exceeding $100,000 (excluding interest) (28 
U.S.C. 2672).
    (21) Compromise, suspend collection action on, or terminate claims 
of the United States not exceeding $100,000 (excluding interest) that 
are referred to, or arise out of the activities of, his or her Operating 
Administration.
    (22) Compromise, suspend collection action on, or terminate claims 
against the United States under the Federal Tort Claims Act, not 
exceeding $100,000 (excluding interest) that are referred to, or arise 
out of the activities of, his or her Operating Administration; provided 
that when the Administrator believes that a claim against the United 
States presents a novel question of law or of policy, he or she shall 
coordinate with the General Counsel to obtain the advice of the 
Assistant Attorney General in charge of the Civil Division; and provided 
further that whenever he or she settles any administrative claim against 
the United States for an amount in excess of $50,000, the Administrator 
shall prepare a memorandum fully explaining the basis for the action 
taken and coordinate with the General Counsel before sending a copy of 
the memorandum to the Director, Federal Torts Claims Act Staff, Torts 
Branch of the Civil Division, U.S. Department of Justice.
    (23) Enter into memoranda of agreement with the Occupational Safety 
and Health Administration (OSHA) in regard to setting and enforcing 
occupational safety or health standards and whistleblower protection for 
employees in DOT-regulated industries. The General Counsel shall concur 
in each memorandum of understanding with OSHA prior to its execution by 
the Administrator of the Operating Administration concerned.
    (24) Enter into memoranda of agreement with the Mine Safety Health 
Administration (MSHA) in regard to setting and enforcing safety 
standards for employees in DOT-regulated industries while on mine 
property. The General Counsel shall concur in each memorandum of 
agreement with MSHA prior to its execution by the Administrator of the 
Operating Administration concerned.
    (25) Exercise the authority vested in the Secretary by Section 329A 
of the Department of Transportation and Related Agencies Appropriations 
Act, 1995, Public Law 103-331, 329A, 108 Stat. 2471, 2493 (September 30, 
1994), to enter into grants, cooperative agreements, and other 
transactions with any person, agency, or instrumentality of the United 
States, any unit of state or local government, any educational 
institution, and any other entity in execution of the Technology 
Reinvestment Project authorized under the Defense Conversion, 
Reinvestment, and Transition Assistance Act of 1992, Public Law 102-484, 
106 Stat. 2658 (October 23, 1992), and related legislation.
    (26) Carry out the functions vested in the Secretary by 49 U.S.C. 
40119(b), as implemented by 49 CFR part 15, in coordination with the 
Office of the General Counsel and the Office of Intelligence, Security 
and Emergency Response, relating to the determination that information 
is Sensitive Security Information within their respective organizations.
    (27) Exercise the authority vested in the Secretary by 49 U.S.C. 
326(a) and 31

[[Page 31]]

U.S.C. 1353 to accept, in an amount not exceeding $1,000 in value and 
subject to the concurrence of the Operating Administration's Deputy 
Ethics Official, the following: Gifts of property (other than real 
property), gifts of services (in carrying out aviation duties and 
powers) or reimbursement of travel expenses from non-federal sources. 
Acceptance of such gifts or travel reimbursement exceeding $1,000 in 
value or those that are otherwise significant may only take place with 
the additional concurrence of the General Counsel. This delegation 
extends only to the acceptance of gifts or travel expenses and does not 
authorize the solicitation of gifts, which is reserved to the Secretary 
at 49 CFR 1.21.
    (28) Exercise the authority vested in the Secretary by the Federal 
Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. 101-410, 104 
Stat. 890), as amended by the Debt Collection Improvement Act of 1996 
(Pub. L. 104-134, 110 Stat. 1321), to promulgate rules that adjust civil 
penalties.
    (29) Carry out the functions vested in the Secretary to implement 
the Uniform Relocation Assistance and Real Property Acquisition Act of 
1970 (Uniform Act), 42 U.S.C. Chapter 61, with respect to programs 
administered by their respective Operating Administrations. Each 
Operating Administration may prescribe additional Uniform Act guidance 
that is appropriate to those particular programs, provided that such 
additional guidance must be consistent with the Uniform Act and 49 CFR 
Part 24. The lead agency for Uniform Act matters is the Federal Highway 
Administration (see section 1.85 and 49 CFR Part 24).



Sec. 1.81a  Redelegation by all Administrators.

    Except as otherwise specifically provided in this Part, each 
Administrator may redelegate and authorize successive redelegations of 
authority within the organization under that official's jurisdiction.



Sec. 1.82  The Federal Aviation Administration.

    Is responsible for:
    (1) Promulgating and enforcing regulations on all safety matters 
relating to the operation of airports, the manufacture, operation, and 
maintenance of aircraft, and the efficiency of the National Airspace 
System;
    (2) Planning and supporting the development of an integrated 
national system of airports, with due consideration of safety, capacity, 
efficiency, environmental compatibility and sustainability;
    (3) Administering federal financial assistance programs for airports 
including airport grants-in-aid;
    (4) Preserving and enhancing the safety and efficiency of the 
Nation's air transportation system by implementing NextGen and other 
technologies, as appropriate;
    (5) Registering aircraft and recording rights in aircraft;
    (6) Developing, modifying, testing, and evaluating systems, 
procedures, facilities, and devices needed for the safe and efficient 
navigation and traffic control of aircraft;
    (7) Locating, constructing or installing, maintaining and operating 
Federal aids to air navigation, wherever necessary;
    (8) Developing air traffic regulations, and administering air 
navigation services for control of civil and military air operations 
within U.S. airspace, as well as administering such air navigation 
services as the FAA has accepted responsibility for providing in 
international airspace and the airspace of foreign countries;
    (9) Promoting aviation safety and efficiency through technical 
aviation assistance to foreign aviation authorities;
    (10) Developing strategies to improve runway safety at all 
commercial service airports;
    (11) Administering the Continuous Lower Energy, Emissions and Noise 
program, improving connections to surface transportation, and other 
efforts to increase the environmental sustainability of the Nation's air 
transportation systems;
    (12) Conducting an effective airport technology research program to 
improve airport safety, efficiency, and sustainability;
    (13) Exercising the final authority for carrying out all functions, 
powers, and

[[Page 32]]

duties of the Administration in accordance with 49 U.S.C. 106(f) and 
adjudication in accordance with 49 U.S.C. 40110(d) and that such 
authorities supersede any conflicting provisions elsewhere in this part.
    (14) Promoting and encouraging U.S. leadership in commercial space 
activities, and promulgating and enforcing regulations on safety matters 
relating to commercial space transportation.



Sec. 1.83  Delegations to the Federal Aviation Administrator.

    The Federal Aviation Administrator is delegated authority to:
    (a) Carry out the following functions vested in the Secretary by 49 
U.S.C. Subtitle VII (Aviation Programs):
    (1) Sections 40103(a)(2), relating to the consultation with the 
Architectural and Transportation Barriers Compliance Board before 
prescribing regulations or procedures that will have a significant 
impact on accessibility of commercial airports or commercial air 
transportation for individuals with disabilities; 40109(c), but only as 
it relates to the regulation of 49 U.S.C. 46301(b) (smoke alarm device 
penalties), and 40109(e), relating to maximum flying hours 40113(a) as 
it relates to the functions vested in the Secretary and delegated in 
this section; 40114, relating to reports and records requirements; 
40115, relating to withholding information from public disclosure; 
40116, relating to the prohibition on State taxation as the prohibition 
may affect an airport sponsor's grant assurances; 40117, relating to 
passenger facility charges; 40119(b), relating to the issuance of 
regulations on disclosure of information obtained or developed in 
ensuring security; and 40127(b) of chapter 401, relating to prohibition 
on discrimination by private airports;
    (2) Section 41723 of subchapter I of chapter 417, relating to notice 
concerning aircraft assembly;
    (3) Section 44102(b) of chapter 441, relating to defining the term 
``based and primarily used in the United States'';
    (4) Chapter 443, relating to insurance;
    (5) Chapter 445, relating to facilities, personnel, and research, 
except section 44502(a)(3) as it relates to authorizing a department, 
agency, or instrumentality of the United States Government to carry out 
any duty or power under subsection 44502(a) with the consent of the head 
of the department, agency, or instrumentality;
    (6) Chapter 447, relating to safety regulation;
    (7) Chapter 451, relating to alcohol and controlled substances 
testing;
    (8) Subpart IV of Part A of 49 U.S.C. Subtitle VII (chapters 461-
465) relating to the Secretary's authority to enforce and impose 
penalties under sections of Subtitle VII that have been delegated to the 
Federal Aviation Administrator in this section;
    (9) Part B of 49 U.S.C. Subtitle VII (chapters 471-475) relating to 
airport development and noise;
    (10) Part C of 49 U.S.C. Subtitle VII (chapters 481-483) relating to 
financing; and
    (11) Part E of 49 U.S.C. Subtitle VII (chapter 501) relating to Buy-
American Preferences.
    (b) Carry out the functions vested in the Secretary by chapters 509 
and 511 (commercial space) of title 51, U.S.C. and coordinate with the 
Assistant Secretary for Aviation and International Affairs regarding 
those functions related to the promotion of the aerospace industry.
    (c) Carry out the functions vested in the Secretary by part B of 
title II of the Clean Air Act, as amended (84 Stat. 1703), and by 40 CFR 
part 87 as it relates to exemptions from aircraft air pollution 
standards.
    (d)(1) Except as delegated to the Under Secretary of Transportation 
for Policy by Sec. 1.25, carry out the functions vested in the 
Secretary by 49 U.S.C. 5121(a), (b), (c), and (d), 5122, 5123, and 5124, 
relating to the transportation or shipment of hazardous materials by 
air.
    (2) Carry out the functions vested in the Secretary by 49 U.S.C. 
5114, relating to the establishment of procedures for monitoring and 
enforcing regulations with respect to the transportation of radioactive 
materials on passenger-carrying aircraft.
    (e) Serve, or designate a representative to serve, as Vice Chairman 
and alternate Department of Transportation member of the Interagency 
Group on International Aviation (IGIA) pursuant

[[Page 33]]

to interagency agreement of December 9, 1960, and Executive Order 11382, 
and provide for the administrative operation of the IGIA Secretariat.
    (f) Carry out the functions assigned to the Secretary by Executive 
Order 12465 relating to commercial expendable launch vehicle activities.
    (g) Carry out the functions vested in the Secretary by the National 
Aeronautics and Space Administration Authorization Act, Fiscal Year 1993 
(Pub. L. 102-588, 106 Stat 5119, November 4, 1992).



Sec. 1.84  The Federal Highway Administration.

    Is responsible for:
    (a) Developing safety strategies using a data-driven, systematic 
approach to address safety for motorists, bicyclists, and pedestrians 
from engineering, education, enforcement, and emergency medical services 
perspectives and coordinating with FMCSA and NHTSA as appropriate.
    (b) Planning, in cooperation with the States, the national highway 
system.
    (c) Improving, in cooperation with the States (via the provision of 
grants), roads on the Federal-aid primary, secondary, and interstate 
highway systems and urban extensions thereof, to increase the percentage 
of highways in good condition.
    (d) Identifying and deploying innovation aimed at shortening project 
delivery, enhancing the safety of our roadways, and protecting the 
environment.
    (e) Surveying and constructing forest highway system roads, defense 
highways and access roads, and parkways and roads in national parks and 
other federally-administered areas.
    (f) Developing and administering uniform State standards for highway 
safety programs with respect to identification and surveillance of 
accident locations; highway design, construction, and maintenance, 
including context sensitive solutions, highway-related aspects of 
pedestrian safety, and traffic control devices.
    (g) Administering the Department's Highway Bridge Program to ensure 
the Nation has safe, well-maintained bridges for use by the traveling 
public.
    (h) In coordination with NHTSA, RITA, and FMCSA, conducting vehicle-
to-vehicle and vehicle-to-infrastructure research.
    (i) Managing TIFIA funds, 23 U.S.C. 601-609, in conjunction with the 
TIFIA Joint Program Office, including managing accounting and budgeting 
activities, and procuring any necessary financial or technical support 
services for the TIFIA program.
    (j) Maximizing the positive impacts on the U.S. economy by 
encouraging domestic manufacturing on highway projects through the 
enforcement of Buy America provisions.



Sec. 1.85  Delegations to the Federal Highway Administrator.

    (a) The Federal Highway Administrator is delegated authority to 
administer the following provisions of title 23, U.S.C. (Highways):
    (1) Chapter 1, Federal-Aid Highways, except for sections 142 (as it 
relates to matters within the primary responsibility of the Federal 
Transit Administrator), 153, 154, 158, 159, 161, and 164.
    (2) Chapter 2, Other Highways, except for section 205.
    (3) Chapter 3, General Provisions, except for section 322.
    (4) Section 409 of chapter 4, Highway Safety.
    (5) Chapter 5, Research, Technology, and Education, except for 
sections 508 and 509.
    (6) Chapter 6, Infrastructure Finance, subject to the limitations 
set forth in sections 1.33 (Assistant Secretary for Budget and Programs) 
and 1.21 (reservation to the Secretary of final approval of TIFIA credit 
assistance applications).
    (b) The Federal Highway Administrator is delegated authority to 
administer the following provisions of title 49, U.S.C. 
(Transportation):
    (1) Section 20134(a) with respect to the laws administered by the 
Federal Highway Administrator pertaining to highway safety and highway 
construction; and
    (2) Sections 31111 and 31112 (as it relates to matters within the 
primary responsibility of the Federal Highway Administration).
    (c) The Federal Highway Administrator is delegated authority to 
administer the following laws relating generally to highways:

[[Page 34]]

    (1) Section 502(c) of the General Bridge Act of 1946, as amended, 60 
Stat. 847, [33 U.S.C. 525(c)].
    (2) Reorganization Plan No. 7 of 1949 (63 Stat. 1070).
    (3) The Federal-Aid Highway Act of 1954, as amended (Pub. L. 83-350, 
68 Stat. 70).
    (4) The Federal-Aid Highway Act of 1956, as amended (Pub. L. 84-627, 
70 Stat. 374).
    (5) The Highway Revenue Act of 1956, as amended (Pub. L. 84-627, 70 
Stat. 374, 387, 23 U.S.C.A. 120 note).
    (6) The Alaska Omnibus Act, as amended (Pub. L. 86-70, 73 Stat. 141, 
48 U.S.C.A. 21 note.).
    (7) The Act of September 26, 1961, as amended (Pub. L. 87-307, 75 
Stat. 670).
    (8) The Act of April 27, 1962 (Pub. L. 87-441, 76 Stat. 59).
    (9) The Federal-Aid Highway Act of 1962, as amended (Pub. L. 87-866, 
76 Stat. 1145).
    (10) The Joint Resolution of August 28, 1965, as amended (Pub. L. 
89-139, 79 Stat. 578, 23 U.S.C.A. 101 et seq., notes).
    (11) The Federal-Aid Highway Act of 1966, as amended (Pub. L. 889-
574, 80 Stat. 766).
    (12) The Federal-Aid Highway Act of 1968, as amended (Pub. L. 90-
495, 82 Stat. 815).
    (13) The Federal-Aid Highway Act of 1970, as amended (except section 
118) (Pub. L. 91-605, 84 Stat. 1713).
    (14) Sections 103, 104, 111(b), 128(b), 131, 135, 136, 141, 147, 
149, 154, 158 through 161, 163, 203, 206, 401, and 402 of the Federal-
Aid Highway Act of 1973, as amended (Pub. L. 93-87, 87 Stat. 250; Public 
Law 93-643, 88 Stat. 2281).
    (15) Sections 102(b) (except subparagraph (2)) and (c); 105 (b)(1) 
and (c); 141; 146; 147; and 152 of the Federal-Aid Highway Act of 1976 
(Pub. L. 94-280, 90 Stat. 425).
    (16) The Highway Beautification Act of 1965, as amended (Pub. L. 89-
285, 79 Stat. 1028, 23 U.S.C.A. 131 et seq., notes).
    (17) The Federal-Aid Highway Act of 1982 (Pub. L. 97-327, 96 Stat. 
1611), except section 6 as it relates to matters within the primary 
responsibility of the Federal Transit Administrator.
    (18) The Surface Transportation Assistance Act of 1982, as amended, 
(Pub. L. 97-424, 96 Stat. 2097) except,
    (i) Sections 165 and 531 as they relate to matters within the 
primary responsibility of the Federal Transit Administrator;
    (ii) Sections 105(f), 413; 414(b)(2); 421, 426, and Title III; and
    (iii) Section 414(b)(1), unless with the concurrence of the National 
Highway Traffic Safety Administrator.
    (19) Sections 103(e), 105(a) through (g), 106(a), and (b), 110(b), 
114(d), 117(f), 120(c) and (d), 123(g) and (i), 133(f), 134, 136, 137, 
139 through 145, 146(b), 147(c), 149(a) through (f), (h), (i), (k), 151 
through 157, 164, and 208 of the Surface Transportation and Uniform 
Relocation Assistance Act of 1987 (Pub. L. 100-17, 101 Stat. 132).
    (20) Sections 105, 107(c) through (e), 123(a) and (b), 124(c), 
126(d) through (g), 138(c), 142, 144, 147 through 154, 167, and 171, 
Title IV, as amended (as it relates to matters within the primary 
responsibility of the Federal Highway Administrator), and sections 502-
504 of Title V of the Surface Transportation Assistance Act of 1978 
(Pub. L. 95-599, 92 Stat. 2689).
    (21) Sections 201 through 205, 327 through 336, 339, 340, 349, 352, 
353, and 408 of the National Highway System Designation Act of 1995 
(Pub. L. 104-59, 109 Stat. 568).
    (22) Sections 1002(e), 1006(h), 1009(c), 1012(b) and (d) through 
(f), 1015, 1016(g), 1017(c), 1021(c) and (d), 1022(c), 1023(f) through 
(g), 1032(d), 1038 through 1041, 1044, 1046(d), 1047, 1051, 1057 through 
1060, 1072, 1073, 1105, and 6016 of the Intermodal Surface 
Transportation Efficiency Act of 1991 (Pub. L. 102-240, 105 Stat. 1914).
    (23) Sections 1108(f) and (g) and 1224 of the Transportation Equity 
Act for the 21st Century (Pub. L. 105-178, 112 Stat. 107).
    (24) Sections 1102, 1109(f), 1111(b)(4), 1112, 1115(c), 1116(a) and 
(b), 1117, 1119(n), 1120(c), 1201, 1301, 1302, 1303, 1304, 1305, 1306, 
1308, 1310, 1404, 1408, 1409(a) and (b), 1410, 1411, 1502, 1604, 1803, 
1907, 1908, 1910, 1911, 1916, 1917, 1918, 1923, 1928, 1934, 1935, 1937, 
1939, 1940, 1941, 1943, 1944, 1945, 1948, 1949, 1950, 1952, 1957, 1958, 
1959, 1962, 1964, 4404 (as it relates to matters within the primary 
responsibility of the Federal Highway Administrator), 5101(b), 
5202(b)(3)(B), (c), and (d), 5203(e) and (f), 5204(g) and (i), 5304,

[[Page 35]]

5305, 5306, 5307, 5308, 5309, 5502, 5504, 5508, 5511, 5512, 5513(b), 
(f), (k), and (m) (as (m) relates to (b), (f), and (k)), 5514, 6009(b) 
(as they relate to matters within the primary responsibility of the 
Federal Highway Administrator), 6017, 6018, 10210, and 10212 of the 
Safe, Accountable, Flexible, Efficient Transportation Equity Act: A 
Legacy for Users (Publ. L. 109-59, 119 Stat. 1144).
    (d) The Federal Highway Administrator is delegated authority to:
    (1) Carry out the functions vested in the Secretary of 
Transportation by section 601 of the Pipeline Safety Act of 1992 (Pub. 
L. 102-508, 106 Stat. 3289) relating to construction of the Page Avenue 
Extension Project in Missouri.
    (2) Carry out the functions of the Secretary under the Appalachian 
Regional Development Act of 1965, 40 U.S.C. Subtitle IV.
    (3) Carry out the Act of September 21, 1966, Public Law 89-599, 
relating to certain approvals concerned with a compact between the 
States of Missouri and Kansas.
    (4) Carry out the functions vested in the Secretary by section 5 (as 
it relates to bridges, other than railroad bridges, not over navigable 
waters), and section 8(a) (as it relates to all bridges other than 
railroad bridges) of the International Bridge Act of 1972 (Public Law 
92-434, 86 Stat. 731) [33 U.S.C. 535c and 535e(a)].
    (5) Carry out the Highway Safety Act of 1966, as amended (Pub. L. 
89-564, 80 Stat. 731) and chapter 4 of title 23 U.S.C. as amended by 
section 207 of the Surface Transportation Assistance Act of 1978 for 
highway safety programs, research and development relating to highway 
design, construction and maintenance, traffic control devices, 
identification and surveillance of accident locations, and highway-
related aspects of pedestrian and bicycle safety.
    (6) Exercise the authority vested in the Secretary by 49 U.S.C. 
20134(a) with respect to the laws administered by the Federal Highway 
Administrator pertaining to highway safety and highway construction
    (7) Prescribe regulations, as necessary, at Part 24 of this title, 
to implement the Uniform Act, 42 U.S.C. Chapter 61, and to act as the 
lead agency in carrying out all other functions vested in the Secretary 
by the Uniform Act, in coordination with the Under Secretary.
    (8) Exercise the authority vested in the Secretary by sections 101, 
118, 120(b), 123 and 124 of the Federal-Aid Highway Amendments of 1974 
(Pub. L. 93-643, January 4, 1975, 88 Stat. 2281).
    (9) Carry out the functions vested in the Secretary of 
Transportation by section 114 of Part C of the Paperwork Reduction 
Reauthorization Act of 1986 (contained in the Act Making Continuing 
Appropriations for Fiscal Year 1987 and for Other Purposes, Pub. L. 99-
591, 100 Stat. 3341, 2241-349), relating to construction of Interstate 
Highway H-3 in Hawaii.
    (10) Carry out the functions vested in the Secretary by Public Law 
98-229, 98 Stat. 55, insofar as it relates to apportioning certain funds 
for construction of the Interstate Highway System in Fiscal Year 1985, 
apportioning certain funds for Interstate substitute highway projects, 
and increasing amounts available for emergency highway relief.
    (11) Carry out all of the functions vested in the Secretary under 
section 324 of the Fiscal Year 1986 Department of Transportation 
Appropriations Act (Pub. L. 99-190, 99 Stat. 1288), notwithstanding the 
reservation of authority under Sec. 1.21 of this part.
    (12) Carry out the functions vested in the Secretary of 
Transportation by section 505 of the Railroad Revitalization and 
Regulatory Reform Act of 1976, as amended, (Pub. L. 94-210, 90 Stat. 31) 
relating to the Alameda Corridor Project in consultation with the 
Federal Railroad Administrator.
    (13) Act as the lead DOT agency in matters relating to the National 
Environmental Policy Act of 1969, Public Law 91-190, 83 Stat. 852 [42 
U.S.C. 4321 et seq.] pertinent to the authority vested in the Secretary 
to establish, operate, and manage the Nationwide Differential Global 
Positioning System (NDGPS) by section 346 of the Department of 
Transportation and Related Agencies Appropriations Act, 1998 (Pub. L. 
105-66, 111 Stat. 1425).
    (14) Exercise the responsibilities of the Secretary under 49 U.S.C. 
309 (high speed ground transportation).

[[Page 36]]



Sec. 1.86  The Federal Motor Carrier Safety Administration.

    Is responsible for:
    (a) Managing program and regulatory activities, including 
administering laws and promulgating and enforcing regulations on safety 
matters relating to motor carrier safety;
    (b) Carrying out motor carrier registration and authority to 
regulate household goods transportation;
    (c) Developing strategies for improving commercial motor vehicle, 
operator, and carrier safety and administering grants to implement these 
strategies;
    (d) Inspecting records and equipment of commercial motor carriers, 
and investigating accidents and reporting violations of motor carrier 
safety regulations;
    (e) Carrying out research, development, and technology transfer 
activities to promote safety of operation and equipment of motor 
vehicles for the motor carrier transportation program; and
    (f) Carrying out an effective communications and outreach program 
which includes providing relevant safety data to the public.



Sec. 1.87  Delegations to the Federal Motor Carrier Safety 
Administrator.

    The Federal Motor Carrier Safety Administrator is delegated 
authority to:
    (a) Carry out the following functions and exercise the authority 
vested in the Secretary by 49 U.S.C., Subtitle IV, part B:
    (1) Chapter 131, relating to general provisions on transportation 
policy;
    (2) Chapter 133, relating to administrative provisions;
    (3) Chapter 135, relating to jurisdiction;
    (4) Sections 13704 and 13707 of chapter 137, relating to rates, 
routes, and services;
    (5) Chapter 139, relating to registration and financial 
responsibility requirements, except section 13907(d)(2);
    (6) Chapter 141, relating to operations of motor carriers;
    (7) Sections 14701 through 14705, 14707, 14708, 14710, and 14711 of 
chapter 147, relating to enforcement remedies, investigations and motor 
carrier liability; and
    (8) Sections 14901 through 14913 and 14915 of chapter 149 relating 
to civil and criminal penalties for violations of 49 U.S.C. subtitle IV, 
part B.
    (b) Carry out the functions vested in the Secretary by sections 104 
and 204 of the ICC Termination Act of 1995, Public Law 104-88, 109 Stat. 
803, relating to self-insurance rules and a savings clause.
    (c) Carry out the functions vested in the Secretary by 42 U.S.C. 
4917, relating to procedures for the inspection, surveillance and 
measurement of commercial motor vehicles for compliance with interstate 
motor carrier noise emission standards and related enforcement 
activities including the promulgation of necessary regulations.
    (d) Carry out the following functions and exercise the authority 
vested in the Secretary by chapter 51 of title 49, U.S.C.:
    (1) Except as delegated to the Under Secretary of Transportation for 
Policy by Sec. 1.25, carry out the functions vested in the Secretary by 
49 U.S.C. 5121(a), (b), (c), and (d), 5122, 5123, and 5124, relating to 
the transportation or shipment of hazardous materials by highway.
    (2) Carry out the functions vested in the Secretary by 49 U.S.C. 
5105(e), relating to inspections of motor vehicles carrying hazardous 
material; 49 U.S.C. 5109, relating to motor carrier safety permits, 
except subsection (f); 49 U.S.C. 5112, relating to highway routing of 
hazardous materials; 49 U.S.C. 5113, relating to unsatisfactory safety 
ratings of motor carriers; 49 U.S.C. 5119, relating to uniform forms and 
procedures; and 49 U.S.C. 5125(a) and (c)-(f), relating to preemption 
determinations or waivers of preemption of hazardous materials highway 
routing requirements.
    (e) Carry out the functions vested in the Secretary by:
    (1) Chapter 313 of 49, U.S.C., relating to commercial motor vehicle 
operators; and
    (2) Section 4123(c), (d) and (e) of SAFETEA-LU relating to grants, 
funding, and contract authority and availability, respectively, for 
commercial

[[Page 37]]

driver's license information system modernization.
    (f) Carry out the functions vested in the Secretary by subchapters 
I, III, and IV of chapter 311, title 49, U.S.C., and 49 U.S.C. 31111, 
relating to commercial motor vehicle programs, safety regulation, and 
international activities, except that the authority to promulgate safety 
standards for commercial motor vehicles and equipment subsequent to 
initial manufacture is limited to standards that are not based upon and 
similar to a Federal Motor Vehicle Safety Standard promulgated under 
chapter 301 of title 49, U.S.C.
    (g) Carry out the functions vested in the Secretary by 49 U.S.C. 
5701 relating to food transportation inspections of commercial motor 
vehicles.
    (h) Carry out the functions and exercise the authority delegated to 
the Secretary in section 2(d)(2) of Executive Order 12777 (3 CFR, 1992 
Comp., p. 351), as amended, with respect to highway transportation, 
relating to the approval of means to ensure the availability of private 
personnel and equipment to remove, to the maximum extent practicable, a 
worst case discharge, the review and approval of response plans, and the 
authorization of motor carriers, subject to the Federal Water Pollution 
Control Act, Public Law 87-88, as amended [33 U.S.C. 1321], to operate 
without approved response plans.
    (i) Carry out chapter 315 of title 49, U.S.C., relating to motor 
carrier safety.
    (j) Carry out 49 U.S.C. 502, 503, 504, 506, and 523 to the extent 
they relate to motor carriers, motor carriers of migrant workers, and 
motor private carriers; 49 U.S.C. 507 to the extent it relates to motor 
carriers, motor carries of migrant workers, motor private carriers, or 
freight forwarders; and 49 U.S.C. 505, 508, and 521(b).
    (k) Carry out the functions and exercise the authority vested in the 
Secretary by 23 U.S.C. 502(a)(1)(A).
    (l) Carry out the functions vested in the Secretary by the following 
sections of SAFETEA-LU:
    (1) Section 4105(b)(1) relating to the study concerning predatory 
tow truck operations;
    (2) Section 4126, relating to the commercial vehicle information 
systems and networks deployment program;
    (3) Section 4127, relating to outreach and education;
    (4) Section 4128, relating to grants under the safety data 
improvement program;
    (5) Section 4130-4133, amending section 229 of the Motor Carrier 
Safety Improvement Act of 1999 (49 U.S.C. 31136 note) relating to the 
operators of vehicles transporting agricultural commodities and farm 
supplies, and hours of service for miscellaneous vehicle operators;
    (6) Section 4134 (49 U.S.C. 31301 note), relating to the grant 
program for persons to train operators of commercial motor vehicles;
    (7) [Reserved]
    (8) Section 4136 relating to interstate vans;
    (9) Section 4138 relating to high risk carrier compliance (49 U.S.C. 
31100 note);
    (10) Section 4139(a)(1), relating to the training of and outreach to 
State personnel; section (b)(1) relating to a review of Canadian and 
Mexican compliance with Federal motor vehicles safety standards; and the 
first sentence of section (b)(2) relating to the report concerning the 
findings and conclusions of the review required by section (b)(1) (see 
49 U.S.C. 31100 note);
    (11) Section 4143, granting authority to stop commercial motor 
vehicles, 18 U.S.C. 3064;
    (12) Section 4144, relating to a motor carrier safety advisory 
committee;
    (13) [Reserved]
    (14) Section 4147, relating to emergency conditions requiring 
immediate response (amending section 229 of the Motor Carrier Safety 
Improvement Act of 1999 (49 U.S.C. 31136 note);
    (15) Section 4213, relating to the establishment of a working group 
for the development of practices and procedures to enhance Federal-State 
relations (49 U.S.C. 14710 note);
    (16) Section 4214, relating to the establishment of a system for 
collecting consumer complaint information and issuing regulations 
related to reporting requirements under the system (49 U.S.C. 14701 
note); and

[[Page 38]]

    (17) Section 4308, granting authority to adopt regulations to carry 
out SAFETEA-LU, Title IV, subtitle C (49 U.S.C. 13902 note).



Sec. 1.88  The Federal Railroad Administration.

    Is responsible for:
    (a) Regulating safety functions pertaining to railroads;
    (b) Conducting research and development activity in support of safer 
and more efficient rail transportation;
    (c) Investigating and issuing reports concerning collisions, 
derailments, and other railroad accidents resulting in serious injury to 
persons or to the property of a railroad;
    (d) Developing safety strategies to combat the causes of collisions, 
derailments, and other railroad accidents, as well as to reduce overall 
risk in the Nation's rail systems;
    (e) Promoting and strengthening the national rail system, including 
freight rail and high speed and higher performing intercity passenger 
rail.
    (f) Providing financial assistance, including grants, loans and loan 
guarantees, for rail freight and intermodal development, as well as 
high-speed and intercity passenger rail development;
    (g) Maximizing the positive impacts on the U.S. economy by 
encouraging domestic manufacturing on rail projects through the 
enforcement of Buy America provisions; and
    (h) Strengthening local communities by supporting station-area 
development and strong connections among rail passenger service, 
intercity bus, local transit, bicycle/pedestrian, and airport 
facilities.



Sec. 1.89  Delegations to the Federal Railroad Adminstrator.

    The Federal Railroad Administrator is delegated authority to:
    (a) Carry out the functions and exercise the authority vested in the 
Secretary by 49 U.S.C. Subtitle V, Part A (Safety, chapter 201 et seq.,) 
Part B (Assistance, chapter 221 et seq.), Part C (Passenger 
Transportation, chapter 241 et seq.), Part D (High Speed Rail, chapter 
261), and section 28101 of Part E, relating to the law enforcement 
authority of railroad police officers; except 49 U.S.C. 20134 with 
respect to highway, traffic, and motor vehicle safety and highway 
construction.
    (b) Carry out the functions and exercise the authority vested in the 
Secretary by the Rail Safety Improvement Act of 2008 (Pub. L. 110-432, 
Div. A, 122 Stat. 4848).
    (c) Carry out the functions and exercise the authority vested in the 
Secretary by the Passenger Rail Investment and Improvement Act of 2008 
(Pub. L. 110-432, Div. B, 122 Stat. 4907), except Title VI (122 Stat. 
4968) as it relates to capital and preventive maintenance projects for 
the Washington Metropolitan Area Transit Authority.
    (d) Carry out the functions vested in the Secretary by 33 U.S.C. 
535c, as it relates to railroad bridges not over navigable waterways.
    (e) Exercise the administrative powers vested in the Secretary by 49 
U.S.C. Subtitle I, Chapter 5 (section 501 et seq.) pertaining to 
railroad safety and 49 U.S.C. 103 (Federal Railway Administration).
    (f) Promote and undertake research and development relating to rail 
matters generally (49 U.S.C. Chapter 3 (section 301 et seq). and 49 
U.S.C. 102).
    (g) Carry out the functions vested in the Secretary by 45 U.S.C. Ch. 
15 (Section 601 et seq.) with respect to emergency rail services, except 
the authority to make findings required by 45 U.S.C. 662(a) and the 
authority to sign guarantees of certificates issued by trustees.
    (h) Carry out the functions vested in the Secretary by 45 U.S.C. 
chapter 17 (section 801 et seq.) with respect to railroad revitalization 
and regulatory reform and the Railroad Rehabilitation and Improvement 
Financing program.
    (i) Carry out the functions vested in the Secretary by 45 U.S.C. 
chapter 21 (section 1201 et seq.) related to the Alaska Railroad 
transfer.
    (j) Except as delegated to the Under Secretary of Transportation for 
Policy by Sec. 1.25 of this part, carry out the functions vested in the 
Secretary by 49 U.S.C. 5121-5124 relating to the transportation or 
shipment of hazardous materials by railroad.
    (k) Carry out the functions vested in the Secretary by section 7 of 
Executive Order 12580 (delegating sections 108 and 109, respectively, of 
the Comprehensive

[[Page 39]]

Environmental Response, Compensation, and Liability Act of 1980 as 
amended (49 U.S.C. 9615 et seq.), insofar as they relate to rolling 
stock.
    (l) Carry out the functions vested in the Secretary by 33 U.S.C. 
493, relating to disputes over the terms and compensation for use of 
railroad bridges built under that statute.
    (m) Carry out the functions vested in the Secretary by 49 U.S.C. 
5701 with respect to transportation of food and other products by 
railroad.
    (n) Carry out the functions vested in the Secretary by 23 U.S.C. 322 
(Magnetic Levitation Transportation Technology Deployment Program).
    (o) Carry out the functions vested in the Secretary by sections 1307 
(see note to 23 U.S.C. 322), and 1946 of SAFETEA-LU as they relate to 
deployment of magnetic levitation transportation projects and a study of 
rail transportation and regulation.
    (p) Investigate and report on safety compliance records of 
applicants seeking railroad operating authority from the Surface 
Transportation Board, and to intervene and present evidence concerning 
applicants' fitness in Board proceedings under 49 U.S.C. 307, relating 
to railroads.
    (q) Carry out the function vested in the Secretary by the Bankruptcy 
Code (11 U.S.C. 1163), which relates to the nomination of trustee for 
rail carriers in reorganization, with the concurrence of the Office of 
the General Counsel.



Sec. 1.90  The Federal Transit Administration.

    Is responsible for:
    (a) Providing grants that support the development of safe, 
comprehensive and coordinated public transportation systems;
    (b) Creating and implementing a national public transportation 
safety program that includes the development of safety practices and 
standards;
    (c) Assisting public transportation systems to achieve and maintain 
their infrastructure, equipment and vehicles in a state of good repair;
    (d) Promoting the environmental benefits of public transportation 
through continuing, cooperative, and comprehensive planning that 
improves the performance of the intermodal transportation system.
    (e) Supporting research, development, demonstration, and deployment 
projects dedicated to assisting in the delivery of safe, efficient and 
effective public transportation service;
    (f) Supporting, in coordination with FHWA and FRA, strong 
connections between public transportation and other modes of 
transportation, including bicycle/pedestrian facilities and station-area 
development that strengthen local communities; and
    (g) Maximizing the positive impacts on the U.S. economy by 
encouraging domestic manufacturing on transit projects through the 
enforcement of Buy America provisions.



Sec. 1.91  Delegations to the Federal Transit Administrator.

    The Secretary delegates to the Federal Transit Administrator the 
authority vested in him to carry out the following:
    (a) Chapter 53 of title 49, United States Code.
    (b) Sections 3 and 9 through 15 of the National Capital 
Transportation Assistance Act of 1969, as amended (DC Code, Sec. 9-
1101.01 et seq.).
    (c) Sections of title 23, United States Code, that involve public 
transportation projects, including those provisions that pertain to 
environmental reviews and use of historic resources for public 
transportation projects.
    (d) Section 303 of title 49, United States Code, as it involves 
public transportation projects.
    (e) The following sections of SAFETEA-LU:
    (1) [49 U.S.C. 5308 note], 3046 [49 U.S.C. 5338 note], 3048, 3049 [5 
U.S.C. 7905 note], and 3050; and
    (2) Sections 6009(b) [23 U.S.C. 138 note] and (c), and 6010, as they 
relate to public transit projects.
    (f) Section 601 of Title VI of the Passenger Rail Investment and 
Improvement Act of 2008 (Pub. L. 110-432, Div. B).



Sec. 1.92  The Maritime Administration.

    Is responsible for:
    (a) Fostering the development and maintenance of a United States 
merchant marine sufficient to meet the

[[Page 40]]

needs of the national security and of the domestic and foreign commerce 
of the United States;
    (b) Operating the U.S. Merchant Marine Academy in order to train 
officers for the Nation's merchant marine;
    (c) Promoting development of ports and intermodal transportation 
systems through investments in port infrastructure via grant programs 
and America's Marine Highway program;
    (d) Promoting the growth and modernization of the U.S. merchant 
marine and U.S. shipyards by administering loan and guarantee programs;
    (e) Overseeing the administration of cargo preference statutes;
    (f) Maintaining custody of, operating, and preserving ships in the 
National Defense Reserve Fleet as well as other vessels under the 
custody of MARAD and managing, maintaining and operating its Ready 
Reserve Force component;
    (g) Conducting research and development to improve and promote the 
waterborne commerce of the United States.



Sec. 1.93  Delegations to the Maritime Administrator.

    The Maritime Administrator is delegated authority to:
    (a) Carry out the functions and exercise the authorities vested in 
the Secretary under Subtitle V of title 46, U.S.C., except for 46 U.S.C. 
51303 and 55601(c) and (d);
    (b) Carry out the functions and exercise the authorities vested in 
the Secretary under Subtitle III of title 46, U.S.C.;
    (c) Carry out the functions and exercise the authorities vested in 
the Secretary under the Merchant Ship Sales Act of 1946, as amended (50 
U.S.C. App. 1735 et seq.);
    (d) Carry out the functions and exercise the authorities vested in 
the Secretary under 50 U.S.C. App 1744 with respect to the National 
Shipping Authority;
    (e) Exercise the authority vested in the Administrator of General 
Services by the Act of June 1, 1948, Public Law 80-566, 62 Stat. 281, 40 
U.S.C. 318-318c and the Federal Property and Administrative Services Act 
of 1949, as amended, 63 Stat. 377, and delegated to the Secretary of 
Transportation by the Administrator of General Services on March 23, 
2000, relating to the enforcement of laws for the protection of property 
and persons at the United States Merchant Marine Academy, located in 
Kings Point, New York. This may be accomplished through appointment of 
uniformed personnel as special police, establishment of rules and 
regulations governing conduct on the affected property, and execution of 
agreements with other Federal, State, or local authorities.
    (f) Carry out the functions and exercise the authorities vested in 
the Secretary by section 3(d) of the Act to Prevent Pollution from Ships 
(33 U.S.C. 1902(d)) as it relates to ships owned or operated by the 
Maritime Administration when engaged in noncommercial service;
    (g) Carry out the functions vested in the Secretary by 40 U.S.C. 554 
relating to authority to convey surplus real property to public entities 
for use in the development or operation of port facilities;
    (h) Carry out the following powers and duties and exercise the 
authorities vested in the Secretary by the Deepwater Port Act of 1974, 
Public Law 93-627, as amended (33 U.S.C. 1501 et seq.),
    (1) Section 4: The authority to issue, transfer, amend, or reinstate 
a license for the construction and operation of a deepwater port (33 
U.S.C. 1503(b));
    (2) Section 4: The authority to process applications for the 
issuance, transfer, amendment, or reinstatement of a license for the 
construction and operation of a deepwater port (33 U.S.C. 1503(b)), in 
coordination with the Commandant of the Coast Guard;
    (3) Section 5(h)(2): Approval of fees charged by adjacent coastal 
States for use of a deepwater port and directly related land-based 
facilities (33 U.S.C. 1504(h)(2));
    (4) Section 4: Make Adjacent Coastal State designations pursuant to 
33 U.S.C. 1508(a)(2);
    (5) Section 11: In collaboration with the Assistant Secretary for 
Aviation and International Affairs and the Assistant Secretary for 
Transportation Policy, consultation with the Secretary of State relating 
to international actions and cooperation in the

[[Page 41]]

economic, trade and general transportation policy aspects of the 
ownership and operation of deepwater ports (33 U.S.C. 1510);
    (6) Section 16(b): Submission of notice of the commencement of a 
civil suit (33 U.S.C. 1515(b));
    (7) Section 16(c): Intervention in any civil action to which the 
Secretary is not a party (33 U.S.C. 1515(c));
    (8) Sections 8(b), 12: Authority to request the Attorney General to 
seek the suspension or termination of a deepwater port license and to 
initiate a proceeding before the Surface Transportation Board (33 U.S.C. 
1507, 1511);
    (i) Carry out the functions and exercise the authority vested in the 
Secretary by section 109 of the Maritime Transportation Security Act of 
2002, Public Law 107-295, 116 Stat. 2064, 46 U.S.C. 70101 note, to 
provide training for maritime security professionals.
    (j) Exercise all the powers of the Secretary under 49 U.S.C. 336 
with respect to civil penalties;
    (k) Carry out all of the duties, authorities and powers of the 
Secretary under the Reefs for Marine Life Conservation law, 16 U.S.C. 
1220 et seq.;
    (l) In consultation and coordination with the Office of 
Intelligence, Security and Emergency Response, carry out the functions 
related to emergency preparedness and response vested in the Secretary 
by the Defense Production Act of 1950, 50 U.S.C. App. 2061, et seq., as 
such authorities relate to the use of sealift support and port 
facilities, and other maritime industry related facilities and services, 
and maritime-related voluntary agreements pursuant to Section 708;
    (m) Carry out the functions related to the National Defense Reserve 
Fleet vested in the Secretary pursuant to 50 U.S.C App. 1744;
    (n) Carry out all of the duties, authorities and powers of the 
Secretary under the following statutes:
    (1) 10 U.S.C. 2218, the National Defense Sealift Fund;
    (2) 40 U.S.C. 3134, Bond waiver authority for certain contracts;
    (3) 46 U.S.C. 501(b), Waiver of navigation and vessel-inspection 
laws and determination of non-availability of qualified U.S. flag 
vessels;
    (4) 46 U.S.C. 3316, granting authority to appoint a representative 
to Executive Board of the American Bureau of Shipping (ABS);
    (5) 46 U.S.C. 12119(a)(5), authority to waive or reduce the 
qualified proprietary cargo requirements and determine citizenship;
    (6) 50 U.S.C. 196, Emergency foreign vessel acquisition; purchase 
and requisition of vessels lying idle in United States waters;
    (7) 50 U.S.C. 197, Voluntary purchase or charter agreement;
    (8) 50 U.S.C. 198, granting authority over requisitioned vessels;
    (o) Carry out all of the duties, authorities and powers of the 
Secretary with respect to 16 U.S.C. 1220 et seq. (use of obsolete ships 
as reefs for marine life conservation);
    (p) Carry out all of the duties, powers and authorities delegated to 
the Secretary of Transportation by the Administrator of General Services 
with respect to the leasing and management of property under 41 CFR 102-
72.30, Delegations of Authority;
    (q) Carry out all of the duties, authorities and powers vested in 
the Secretary by 46 U.S.C. 70101 note, to provide training for maritime 
security professionals;
    (r) Carry out the duties, authorities and powers of the Secretary 
under the following statutes:
    (i) Title XV, Subtitle B of the Food, Agriculture, Conservation, and 
Trade Act of 1990, Public Law 101-624 (104 Stat. 3359, 3665), 7 U.S.C. 
1421 and Chapter 553 of Title 46, U.S.C., authorizing the Secretary to 
designate ``American Great Lakes'' vessels that are exempt from the 
restrictions relating to the carriage of preference cargoes;
    (ii) 46 U.S.C. 2302(e) (determination of substandard vessels);
    (iii) Section 304(a) of Coast Guard and Maritime Transportation Act 
of 2006, 33 U.S.C. 1503(i), a program to promote LNG tanker 
transportation;
    (iv) Section 306 of Public Law 111-281, concerning the phaseout of 
vessels supporting oil and gas development.
    (s) Carry out the functions and exercise the authorities vested in 
the President by Section 1019 of John Warner National Defense 
Authorization Act for Fiscal Year 2007 (Pub. L. 109-364) and

[[Page 42]]

delegated to the Secretary by the President;
    (t) Lead efforts pertaining to civil emergency planning for sealift 
support for North Atlantic Treaty Organization (NATO) operations, 
including coordinating DOT representation on sealift-related committees, 
in coordination with the Office of Intelligence, Security and Emergency 
Response.



Sec. 1.94  The National Highway Traffic Safety Administration.

    Is responsible for:
    (a) In highway safety, setting uniform guidelines for a coordinated 
national highway safety formula grant program carried out by the States 
and local communities; carrying out a research, development, and 
demonstration program; administering highway safety grant programs to 
encourage State efforts in such areas as occupant protection, impaired 
and distracted driving, traffic safety data information system 
improvements, motorcyclist safety, and child safety restraints; 
administering a nationwide high visibility enforcement program; and 
administering the National Driver Register.
    (b) In motor vehicle safety, establishing and enforcing safety 
standards and regulations for the manufacture and importation of motor 
vehicles and motor vehicle equipment; conducting research, development, 
and testing concerning motor vehicle safety, including vehicle to 
vehicle and vehicle to infrastructure technologies and other new or 
advanced vehicle technologies; and investigating safety-related defects 
and non-compliance in motor vehicles and motor vehicle equipment and 
administering related recalls.
    (c) In automobile fuel economy, establishing automobile fuel economy 
standards for passenger and non-passenger automobiles and fuel 
efficiency standards for medium and heavy vehicles.
    (d) In consumer protection and information, establishing 
requirements and carrying out programs for passenger motor vehicle 
information, such as the New Car Assessment Program; bumper standards 
for passenger motor vehicles; odometer requirements; and passenger motor 
vehicle theft prevention standards.



Sec. 1.95  Delegations to the National Highway Traffic Safety 
Administrator.

    The National Highway Traffic Safety Administrator is delegated 
authority to:
    (a) Exercise the authority vested in the Secretary under chapters 
301, 303, 321, 323, 325, 327, 329, and 331, of Title 49, U.S.C., except 
for 49 U.S.C. 32916(b).
    (b) Exercise the authority vested in the Secretary by 49 U.S.C. 
20134(a) with respect to laws administered by the National Highway 
Traffic Safety Administrator pertaining to highway, traffic and motor 
vehicle safety.
    (c) Carry out, in coordination with the Federal Motor Carrier Safety 
Administrator, the authority vested in the Secretary by subchapter III 
of chapter 311 of title 49, U.S.C., to promulgate safety standards for 
commercial motor vehicles and equipment subsequent to initial 
manufacture when the standards are based upon and similar to a Federal 
Motor Vehicle Safety Standard promulgated, either simultaneously or 
previously, under chapter 301 of title 49, U.S.C.
    (d) Carry out the Highway Safety Act of 1966, as amended (23 U.S.C. 
401 et seq.), except as it relates to highway safety programs, research 
and development relating to highway design, construction and 
maintenance; traffic control devices; identification and surveillance of 
accident locations; and highway-related aspects of pedestrian and 
bicycle safety.
    (e) Carry out the functions and exercise the authority vested in the 
Secretary under 23 U.S.C. 406(e)(3), to engage in activities with States 
and State legislators to consider proposals related to safety belt use 
laws. The National Highway Traffic Safety Administrator may further 
delegate this authority, including to other Administrators within the 
Department.
    (f) Carry out the functions and exercise the authority vested in the 
Secretary for the following provisions of Title 23, U.S.C. (with respect 
to matters within the primary responsibility of the National Highway 
Traffic Safety Administrator): 153, 154, 157, 158, 161, 163, 164, and 
313 (Buy America).

[[Page 43]]

    (g) Carry out the consultation functions vested in the Secretary by 
Executive Order 11912, as amended (energy conservation) relating to 
automobiles.
    (h) Exercise the authority vested in the Secretary by section 210(2) 
of the Clean Air Act, Public Law 90-148, as amended [42 U.S.C. 7544(2)].
    (i) Carry out the following functions and exercise the authority 
vested in the Secretary under SAFETEA-LU:
    (1) Section 1906 [23 U.S.C. 402 note], relating to the grant program 
to prohibit racial profiling;
    (2) Section 2001(d) [23 U.S.C. 401 note], relating to transfers of 
funds;
    (3) Section 2003(c), relating to on-scene motor vehicle collision 
causation;
    (4) Section 2003(d) [23 U.S.C. 403 note], relating to research on 
distracted, inattentive, and fatigued drivers;
    (5) Section 2003(f), relating to refusal of intoxication testing;
    (6) Section 2003(g), relating to impaired motorcycle driving;
    (7) Section 2003(h), relating to reducing impaired driving 
recidivism;
    (8) Section 2009(f) [23 U.S.C. 402 note], relating to the annual 
evaluation, in regard to high visibility enforcement program;
    (9) Section 2010 [23 U.S.C. 402 note], relating to motorcyclist 
safety;
    (10) Section 2011 [23 U.S.C. 405 note], relating to child safety and 
child booster seat incentive grants;
    (11) Section 2012, relating to safety data;
    (12) Section 2013 [23 U.S.C. 403 note], relating to drug-impaired 
driving enforcement;
    (13) Section 2014 [23 U.S.C. 402 note], relating to first responder 
vehicle safety program;
    (14) Section 2015, relating to driver performance study;
    (15) Section 2016, relating to rural state emergency medical 
services optimization pilot program;
    (16) Section 2017(a), relating to older driver safety and, (b) [23 
U.S.C. 402 note], relating to law enforcement training;
    (17) Section 5513(e) [23 U.S.C. 502 note], relating to automobile 
accident injury research;
    (18) Section 5513(m) [23 U.S.C. 502 note] as it relates to section 
513(e);
    (19) Section 10202 [42 U.S.C. 300d-4], relating to emergency medical 
services;
    (20) Section 10302, relating to side-impact crash protection 
rulemaking;
    (21) Section 10303 [49 U.S.C. 30101 note], relating to tire 
research;
    (22) Section 10305(b) [49 U.S.C. 30101 note], relating to the 
publication of non-traffic incident data collection;
    (23) Section 10306, relating to the study of safety belt use 
technologies;
    (24) Section 10307(b) [15 U.S.C. 1232 note], relating to the issuing 
of regulations in regard to safety labeling requirements;
    (25) Section 10308, relating to power window switches; and
    (26) Section 10309(a), relating to the testing of 15-passenger van 
safety.
    (j) Carry out the following functions and exercise the authority 
vested in the Secretary under the Energy Independence and Security Act 
of 2007 (Pub. L. 110-140):
    (1) Section 106 [49 U.S.C. 32902 note], relating to the continued 
applicability of existing standards;
    (2) Section 107 [49 U.S.C. 32902 note], relating to the National 
Academy of Sciences studies;
    (3) Section 108, relating to the National Academy of Sciences study 
of medium-duty and heavy-duty truck fuel economy;
    (4) Section 110 [49 U.S.C. 32908 note], relating to the periodic 
review of accuracy of fuel economy labeling;
    (5) Section 113 [49 U.S.C. 32904 note], relating to the exemption 
from separate calculation requirement;
    (6) Section 131(b)(2) and (c)(1) [42 U.S.C. 17011(b)(2), (c)(1)], 
relating to the Plug-in Electric Drive Vehicle Program;
    (7) Section 225(a), relating to the study of optimization of 
flexible fueled vehicles to use E-85 fuel;
    (8) Section 227(a), relating to the study of optimization of biogas 
used in natural gas vehicles;
    (9) Section 242[42 U.S.C. 17051], relating to renewable fuel 
dispenser requirements; and
    (10) Section 248(a) [42 U.S.C. 17054(a)], relating to biofuels 
distribution and advanced biofuels infrastructure.
    (k) Carry out the functions and exercise the motor vehicle safety 
authority

[[Page 44]]

vested in the Secretary under Sec. 7103 of the Transportation Equity 
Act for the 21st Century, Public Law 105-178.
    (l) Carry out the functions and exercise the motor vehicle safety 
authority vested in the Secretary under Sec. Sec. 3(d), 10, 11 and 13 
through 17 [uncodified provisions] of the Transportation Recall 
Enhancement, Accountability, and Documentation (TREAD) Act, Public Law 
106-414.
    (m) Carry out the functions and exercise the motor vehicle safety 
authority vested in the Secretary under Anton's Law, Public Law 107-318.
    (n) Carry out the functions and exercise the motor vehicle safety 
authority vested in the Secretary under the Cameron Gulbransen Kids 
Transportation Safety Act of 2007 or the K.T. Safety Act of 2007, Public 
Law 110-189.
    (o) Carry out the functions and exercise the motor vehicle safety 
authority vested in the Secretary under the Pedestrian Safety 
Enhancement Act of 2010, Public Law 111-373.



Sec. 1.96  The Pipeline and Hazardous Materials Safety Administration.

    Is responsible for:
    (a) Pipelines. (1) Administering a national program of safety in 
natural gas and hazardous liquid pipeline transportation including 
identifying pipeline safety concerns, developing uniform safety 
standards, and promulgating and enforcing safety regulations;
    (2) Increasing the gas and liquid pipeline industry's focus on 
safety beyond compliance with minimum standards, with particular 
attention to developing strong safety cultures in regulated entities;
    (3) Enhancing information awareness systems at the State and local 
levels to reduce pipeline damage from excavation and providing grants to 
support these systems; and
    (4) Encouraging the timely replacement of aging and deteriorating 
pipelines in distribution systems, especially in areas with high 
potential negative consequences to public safety and the environment.
    (b) Hazardous Materials. (1) Administering a national program of 
safety, including security, in multi-modal hazardous materials 
transportation including identifying hazardous materials safety 
concerns, developing uniform safety standards, and promulgating and 
enforcing safety and security regulations; and
    (2) Conducting outreach and provide available grants assistance to 
increase awareness and emergency preparedness.



Sec. 1.97  Delegations to the Pipeline and Hazardous Materials Safety
Administrator.

    The Pipeline and Hazardous Materials Safety Administrator is 
delegated responsibility to:
    (a) Pipelines. (1) Exercise the authority vested in the Secretary 
under chapter 601 of title 49, U.S.C.
    (2) Exercise the authority vested in the Secretary under section 28 
of the Mineral Leasing Act, as amended (30 U.S.C. 185(a) and 30 U.S.C. 
185 (w)(3)).
    (3) Exercise the authority vested in the Secretary under section 21 
of the Deepwater Port Act of 1974, as amended (33 U.S.C. 1520) relating 
to the establishment, enforcement and review of regulations concerning 
the safe construction, operation or maintenance of oil or natural gas 
pipelines on Federal lands and the Outer Continental Shelf.
    (4) Exercise the authority vested in the Secretary under section 5 
of the International Bridge Act of 1972 (33 U.S.C. 535) as it relates to 
pipelines not over navigable waterways.
    (5) Exercise the authority vested in the Secretary under the Outer 
Continental Shelf Lands Act, as amended (43 U.S.C. 1331 et seq.) with 
respect to the establishment, enforcement and review of regulations 
concerning pipeline safety.
    (6) Carry out the functions vested in the Secretary by section 7 of 
Executive Order 12580 (delegating sections 108 and 109, respectively, of 
the Comprehensive Environmental Response, Compensation, and Liability 
Act of 1980 as amended (49 U.S.C. 9615 et seq.), insofar as they relate 
to pipelines.
    (7) Exercise the authority vested in the Secretary by 49 U.S.C. 
60301 as it relates to pipeline safety user fees.
    (8) Exercise the authority vested in the Secretary by 49 U.S.C. 6101 
et seq. as it relates to pipeline damage prevention One Call programs.

[[Page 45]]

    (9) Exercise the authority vested in the Secretary by the Pipeline 
Safety Improvement Act of 2002 (Pub. L. 107-355, 116 Stat. 2985).
    (10) Exercise the authority vested in the Secretary by the Pipeline 
Safety, Regulatory Certainty, and Job Creation Act of 2011 (Pub. L. 112-
90).
    (b) Hazardous materials. Except as delegated to the Under Secretary 
of Transportation for Policy by Sec. 1.25:
    (1) Carry out the functions vested in the Secretary by 49 U.S.C. 
5121(a), (b), (c), (d) and (e), 5122, 5123, and 5124, with particular 
emphasis on the shipment of hazardous materials and the manufacture, 
fabrication, marking, maintenance, reconditioning, repair or test of 
multi-modal containers that are represented, marked, certified, or sold 
for use in the transportation of hazardous materials; and
    (2) Carry out the functions vested in the Secretary by all other 
provisions of the Federal hazardous material transportation law (49 
U.S.C. 5101 et seq.) except as delegated by Sec. Sec. 1.83(d)(2) (FAA) 
and 1.87(d)(2) (FMCSA) of this subpart and by paragraph 2(99) of 
Department of Homeland Security Delegation No. 0170.
    (c) Exercise the authority delegated to the Secretary in the 
following sections of Executive Order 12777:
    (1) Section 2(b)(2) relating to the establishment of procedures, 
methods, equipment and other requirements to prevent discharges from, 
and to contain oil and hazardous substances in, pipelines, motor 
carriers, and railroads; and
    (2) Section 2(d)(2) relating to the issuance of regulations 
requiring the owners or operators of pipelines, motor carriers, and 
railroads, subject to the Federal Water Pollution Control Act (33 U.S.C. 
1321 et seq.), to prepare and submit response plans. For pipelines 
subject to the Federal Water Pollution Control Act, this authority 
includes the approval of means to ensure the availability of private 
personnel and equipment to remove, to the maximum extent practicable, a 
worst case discharge, the review and approval of response plans, and the 
authorization of pipelines to operate without approved response plans.



Sec. 1.98  The Research and Innovative Technology Administration.

    Is responsible for:
    (a) Coordinating, facilitating, and reviewing the Department's 
research and development programs and activities, except as related to 
NHTSA.
    (b) After consultation with Operating Administration and OST 
offices, making recommendations to the Secretary on all Operating 
Administration and OST research budgets;
    (c) Providing leadership on technical, navigation, communication, 
and systems engineering activities, and spectrum management on behalf of 
the civil and civilian PNT communities;
    (d) Directing and administering university transportation research 
grants;
    (e) In coordination with FHWA, NHTSA, and FMCSA, conducting vehicle-
to-vehicle and vehicle-to-infrastructure research;
    (f) Advancing Intelligent Transportation Systems (ITS) research and 
deployment of real-time multi-modal travel information for travelers, 
carriers, and public agencies;
    (g) Providing oversight of the activities of the Volpe National 
Transportation Systems Center, the ITS Joint Program Office, the Bureau 
of Transportation Statistics, and the Transportation Safety Institute; 
and
    (h) Providing technical support to advance the mission of the 
Secretary's Safety Council.



Sec. 1.99  Delegations to the Research and Innovative Technology
Administrator.

    The Research and Innovative Technology Administrator is delegated 
authority for the following:
    (a) Coordination of departmental research and development programs 
and activities. (1) Coordinate, facilitate, and review all departmental 
research and development programs and activities, except those carried 
out by the National Highway Traffic Safety Administration, as described 
in section 4(b) of the Norman Y. Mineta Research and Special Programs 
Improvement Act (Pub. L. 108-426, 118 Stat. 2423).
    (2) After consultation with Operating Administration and OST 
offices, RITA shall make recommendations to the

[[Page 46]]

Secretary on all Operating Administration and OST research budgets.
    (b) Science and technology. (1) With respect to scientific and 
technological matters, serve as principal advisor to the Secretary and 
representative of the Department to the academic community, the private 
sector, professional organizations, and other federal, state and local 
government agencies.
    (2) Serve as principal liaison official for the Department of 
Transportation with the Office of Science and Technology Policy in the 
Executive Office of the President, the National Science and Technology 
Council, and the President's Committee of Advisors on Science and 
Technology.
    (3) Serve as primary official responsible for coordination and 
oversight of the Department's implementation of section 2 of the Federal 
Technology Transfer Act of 1986 (15 U.S.C. 3710a), relating to the 
transfer of Federal technology to the marketplace; and section 12(d) of 
the National Technology Transfer and Advancement Act of 1996 (Pub. L. 
104-113), as implemented by OMB Circular A-119: Federal Participation in 
the Development and Use of Voluntary Consensus Standards and in 
Conformity Assessment Activities.
    (4) Serve as Chair and Executive Secretary of the Department of 
Transportation's Research, Development and Technology Planning Council 
and Planning Team.
    (5) Advocate Department of Transportation policy and program 
coordination efforts associated with transportation research.
    (6) Represent the Department of Transportation on departmental, 
national and international committees and meetings dealing with 
transportation research and development (R & D).
    (7) Manage the strategic planning process for transportation R & D 
across the Department of Transportation and, through the National 
Science and Technology Council, across the Federal Government.
    (8) Carry out the transportation research and development strategic 
planning function vested in the Secretary by 23 U.S.C. 508.
    (9) Conduct transportation system-level assessments and policy 
research.
    (10) Facilitate the creation of transportation public/private 
partnerships.
    (11) Foster innovation in the transportation sector.
    (12) Disseminate information on departmental, national, and 
international transportation R & D activities.
    (13) Provide legal support for Departmental intellectual property 
and patent issues.
    (14) Manage department- and government-wide (inter/multimodal) 
transportation R & D programs.
    (15) Oversee such advisory boards that deal with transportation 
system-level R & D assessments and issues, such as the Transportation 
Research Board Committee on the Federal Transportation R & D Strategic 
Planning Process.
    (c) Advanced vehicle technology. Carry out the functions vested in 
the Secretary by section 5111 of the Transportation Equity Act for the 
21st Century (49 U.S.C. 5506), as extended by the Surface Transportation 
Extension Act of 2004, Part V, Public Law 108-310, September 30, 2004, 
118 Stat. 1144, and section 5513(j) of SAFETEA-LU.
    (d) Remote sensing technology. Carry out the functions vested in the 
Secretary by section 5113 of the Transportation Equity Act for the 21st 
Century (23 U.S.C. 502 Note), as extended by the Surface Transportation 
Extension Act of 2004, Part V, Public Law 108-310, September 30, 2004, 
118 Stat. 1144, and section 5506 of SAFETEA-LU.
    (e) University transportation research. Carry out the functions 
vested in the Secretary by section 5110 of the Transportation Equity Act 
for the 21st Century (49 U.S.C. 5505), as extended by the Surface 
Transportation Extension Act of 2004, Part V, Public Law 108-310, 
September 30, 2004, 118 Stat. 1144, and sections 5401 and 5402 of 
SAFETEA-LU.
    (f) Volpe National Transportation Systems Center. Exercise the 
authority vested in the Secretary with respect to the activities of the 
Volpe National Transportation Systems Center as described in 49 U.S.C. 
112(d)(1)(E) and carry out the functions vested in the Secretary by 49 
U.S.C. 328 with respect

[[Page 47]]

to the working capital fund for financing the activities of the Volpe 
National Transportation Systems Center.
    (g) Exercise authority over the Transportation Safety Institute.
    (h) Carry out the functions vested in the Secretary by 49 U.S.C. 111 
relating to transportation statistics, analysis, and reporting.
    (i) Carry out the functions vested in the Secretary by 49 U.S.C. 
5503(d) (Office of Intermodalism).
    (j) Aviation information. (1) Carry out the functions vested in the 
Secretary by 49 U.S.C. 329(b)(1) relating to the collection and 
dissemination of information on civil aeronautics.
    (2) Carry out the functions vested in the Secretary by section 
4(a)(7) of the Civil Aeronautics Board Sunset Act of 1984 (October 4, 
1984; Pub. L. 98-443) relating to the reporting of the extension of 
unsecured credit to political candidates (section 401, Federal Election 
Campaign Act of 1971; 2 U.S.C. 451), in conjunction with the General 
Counsel and the Assistant Secretary for Aviation and International 
Affairs.
    (3) Carry out the functions vested in the Secretary by: 49 U.S.C. 
40113 (relating to taking such actions and issuing such regulations as 
may be necessary to carry out its air commerce and safety 
responsibilities), 49 U.S.C. 41702 (relating to the duty of carriers to 
provide safe and adequate service), 49 U.S.C. 41708 and 41709 (relating 
to the requirement to keep information and the forms in which it is to 
be kept), and 49 U.S.C. 41701 (relating to establishing just and 
reasonable classifications of carriers and rules to be followed by each) 
as appropriate to carry out the responsibilities under this paragraph in 
conjunction with the General Counsel and the Assistant Secretary for 
Aviation and International Affairs.
    (k) Hazardous materials information. In coordination with the Under 
Secretary, work with the Operating Administrations to determine data 
needs, collection strategies, and analytical techniques appropriate for 
implementing 49 U.S.C. 5101 et seq.
    (l) Carry out the functions vested in the Secretary by section 
1801(e) of SAFETEA-LU (establishing and maintaining a national ferry 
database).
    (m) Carry out the functions vested in the Secretary by section 
5513(c), (d), (g), (h), (i), (l), and (m) of SAFETEA-LU (establishing 
various research grants)
    (n) Carry out the functions vested in the Secretary by section 
5201(m) of SAFETEA-LU (biobased transportation research program).
    (o) Carry out the functions vested in the Secretary by 23 U.S.C. 509 
(establishing and supporting a national cooperative freight 
transportation research program).
    (p) Positioning, navigation and timing (PNT) and spectrum 
management.
    Carry out the functions described in the Secretarial memo of August 
1, 2007, ``Positioning, Navigation and Timing (PNT) and Spectrum 
Management Realignment under the Research and Innovative Technology 
Administration (RITA).''
    (q) Carry out the Secretary's authority to establish, operate and 
manage the Nationwide Differential Global Positioning System (NDGPS) as 
described in Section 346 of Public Law 105-66 (Department of 
Transportation and Related Agencies Appropriations Act of 1998).



Sec. 1.100  The Saint Lawrence Seaway Development Corporation.

    Is responsible for the development, operation, and maintenance of 
that part of the Saint Lawrence Seaway within the territorial limits of 
the United States.



Sec. 1.101  Delegations to Saint Lawrence Seaway Development Corporation
Administrator.

    The Administrator of the Saint Lawrence Seaway Development 
Corporation is delegated authority to:
    (a) Carry out the functions vested in the Secretary by sections 4, 
5, 6, 7, 8, 12 and 13 of section 2 of the Port and Tanker Safety Act of 
1978 (92 Stat. 1471) [33 U.S.C. 1223-1225, 1227, and 1231-1232] as they 
relate to the operation of the Saint Lawrence Seaway.
    (b) Carry out the functions vested in the Secretary by section 5 of 
the International Bridge Act of 1972 (Pub. L. 92-434) [33 U.S.C. 535c] 
as it relates to the Saint Lawrence River.

[[Page 48]]

    (c) Carry out the functions vested in the Secretary by section 3(d) 
of the Act to Prevent Pollution from Ships [33 U.S.C. 1902e] as it 
relates to ships owned or operated by the Corporation when engaged in 
noncommercial service.

   Appendix A to Part I--Delegations and Redelegations by Secretarial 
                                Officers

    1. Director of Budget. The Assistant Secretary for Budget and 
Programs and CFO has redelegated to the Director of Budget authority 
to--
    (a) Request apportionment and reapportionment of funds by the Office 
of Management and Budget, provided that no request for apportionment or 
reapportionment which anticipates the need for a supplemental 
appropriation shall be submitted to the Office of Management and Budget 
without appropriate certification by the Secretary.
    (b) Issue allotments or allocations of funds to components of the 
Department.
    2. Chief Counsels. The General Counsel has delegated to the Chief 
Counsels the authority delegated to the General Counsel by Amendment 1-
41 to part 1 of title 49, Code of Federal Regulations, 35 FR 17653, 
November 17, 1970, as follows:
    Section 855 of the Revised Statutes, as amended by Public Law 91-
393, 84 Stat. 835 (40 U.S.C. 255) authorizes the Attorney General to 
delegate to other departments and agencies his authority to give written 
approval of the sufficiency to the title to land being acquired by the 
United States. The Attorney General has delegated to the Assistant 
Attorney General in charge of the Land and Natural Resources Division 
the authority to make delegations under that law to other Federal 
departments and agencies (35 FR 16084; 28 CFR Sec. 0.66). The Assistant 
Attorney General, Land and Natural Resources Division, has further 
delegated certain responsibilities in connection with the approval of 
the sufficiency of the title to land to the Department of Transportation 
as follows:

 Delegation to the Department of Transportation for the Approval of the 
        Title to Lands Being Acquired for Federal Public Purposes

    Pursuant to the provision of Public Law 91-393, approved September 
1, 1970, 84 Stat. 835, amending R.S. 355 (40 U.S.C. 255), and acting 
under the provisions of Order No. 440-70 of the Attorney General, dated 
October 2, 1970, the responsibility for the approval of the sufficiency 
of the title to land for the purpose for which the property is being 
acquired by purchase or condemnation by the United States for the use of 
your Department is, subject to the general supervision of the Attorney 
General and to the following conditions, hereby delegated to your 
Department.
    This delegation of authority is further subject to:
    1. Compliance with the regulations issued by the Assistant Attorney 
General on October 2, 1970, a copy of which is enclosed.
    2. This delegation is limited to:
    (a) The acquisition of land for which the title evidence, prepared 
in compliance with these regulations, consists of a certificate of 
title, title insurance policy, or an owner's duplicate Torrens 
certificate of title.
    (b) The acquisition of lands valued at $100,000 or less, for which 
the title evidence consists of abstracts of title or other types of 
title evidence prepared in compliance with said regulations.
    As stated in the above-mentioned Act, any Federal department or 
agency which has been delegated the responsibility to approve land 
titles under the Act may request the Attorney General to render his 
opinion as to the validity of the title to any real property or interest 
therein, or may request the advice or assistance of the Attorney General 
in connection with determinations as to the sufficiency of titles.
    The Chief Counsels of the Federal Aviation Administration, Federal 
Highway Administration, Federal Railroad Administration, National 
Highway Traffic Safety Administration, Federal Transit Administration, 
the Saint Lawrence Seaway Development Corporation, Maritime 
Administration, and Research and Innovative Technology Administration 
are hereby authorized to approve the sufficiency of the title to land 
being acquired by purchase or condemnation by the United States for the 
use of their respective organizations. This delegation is subject to the 
limitations imposed by the Assistant Attorney General, Land and Natural 
Resources Division, in his delegation to the Department of 
Transportation. Redelegation of this authority may only be made by the 
Chief Counsels to attorneys within their respective organizations.
    If the organization does not have an attorney experienced and 
capable in the examination of title evidence, a Chief Counsel may, with 
the concurrence of the General Counsel, request the Attorney General to 
(1) furnish an opinion as to the validity of a title to real property or 
interest therein, or (2) provide advice or assistance in connection with 
determining the sufficiency of the title.

    Editorial Note: For Federal Register citations affecting appendix A 
to part 1, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.

[[Page 49]]



PART 3_OFFICIAL SEAL--Table of Contents



    Authority: 49 U.S.C. 102(e).

    Source: Amdt. 3-3, 45 FR 75666, Nov. 17, 1980, unless otherwise 
noted.



Sec. 3.1  Description.

    The official seal of the Department of Transportation is described 
as follows: A white abstract triskelion figure signifying motion appears 
within a circular blue field. The figure is symmetrical. The three 
branches of the figure curve outward in a counter-clockwise direction, 
each tapering almost to a point at the edge of the field. Surrounding 
the blue circle is a circular ring of letters. The upper half of the 
ring shows the words ``Department of Transportation''. The lower half of 
the ring shows the words ``United States of America''. The letters may 
be shown in either black or medium gray. The official seal of the 
Department is modified when embossed. It appears below in black and 
white.
[GRAPHIC] [TIFF OMITTED] TC02FE91.096



PART 5_RULEMAKING PROCEDURES--Table of Contents



                            Subpart A_General

Sec.
5.1 Applicability.
5.3 Initiation of rulemaking.
5.5 Participation by interested persons.
5.7 Regulatory docket.

            Subpart B_Petitions for Rulemaking or Exemptions

5.11 Filing of petitions.
5.13 Processing of petitions.

                          Subpart C_Procedures

5.21 General.
5.23 Contents of notices.
5.25 Petitions for extension of time to comment.
5.27 Consideration of comments received.
5.29 Additional rulemaking proceedings.
5.31 Hearings.
5.33 Adoption of final rules.
5.35 Procedures for direct final rulemaking.

Appendix A to Part 5

    Authority: Sec. 9, 80 Stat. 944 (49 U.S.C. 1657).

    Source: 32 FR 10363, July 14, 1967, unless otherwise noted.



                            Subpart A_General



Sec. 5.1  Applicability.

    (a) This part prescribes general rulemaking procedures that apply to 
the issuance, amendment, and repeal of rules of the Office of the 
Secretary of Transportation. It does not apply to rules issued by the 
Federal Aviation Administration, Federal Highway Administration, Federal 
Railroad Administration, Federal Transit Administration, Maritime 
Administration, National Highway Traffic Safety Administration, Research 
and Special Programs Administration, St. Lawrence Seaway Development 
Corporation, or Federal Motor Carrier Safety Administration.
    (b) For the purposes of this part, Secretary means the Secretary of 
Transportation or the Under Secretary of Transportation, or any of the 
following to whom the Secretary has delegated authority to conduct 
rulemaking proceedings:
    (1) Any Assistant Secretary.
    (2) The General Counsel.

Any of these officers may redelegate that authority to the head of any 
office who reports to him.

[[Page 50]]

    (c) Records relating to rulemaking proceedings are available for 
inspection as provided in part 7 of this subtitle.

[32 FR 10363, July 14, 1967, as amended by Amdt. 5-2, 35 FR 5331, Mar. 
31, 1970; Amdt. 5-3, 36 FR 430, Jan. 13, 1971; 69 FR 4457, Jan. 30, 
2004]



Sec. 5.3  Initiation of rulemaking.

    The Secretary initiates rulemaking on his own motion. However, in 
doing so, he may, in his discretion, consider the recommendations of 
other agencies of the United States and of other interested persons.



Sec. 5.5  Participation by interested persons.

    Any person may participate in rulemaking proceedings by submitting 
written information or views. The Secretary may also allow any person to 
participate in additional rulemaking proceedings, such as informal 
appearances or hearings, held with respect to any rule.



Sec. 5.7  Regulatory docket.

    (a) Records of the Office of the Secretary of Transportation 
concerning rulemaking actions, including notices of proposed rule 
making, comments received in response to those notices, petitions for 
rulemaking or exemption, petitions for rehearing or reconsideration, 
grants and denials of exemptions, denials of petitions for rule making, 
and final rules are maintained in current docket form in the Office of 
the General Counsel.
    (b) Any person may examine any docketed material at that office and 
may obtain a copy of any docketed material upon payment of the 
prescribed fee.



            Subpart B_Petitions for Rulemaking or Exemptions



Sec. 5.11  Filing of petitions.

    (a) Any person may petition the Secretary to issue, amend, or repeal 
a rule, or for a permanent or temporary exemption from any rule.
    (b) Each petition filed under this section must:
    (1) Be submitted in duplicate to the Docket Clerk, Office of the 
General Counsel, Department of Transportation, Washington, DC 20590;
    (2) Set forth the text or substance of the rule or amendment 
proposed, or of the rule from which the exemption is sought, or specify 
the rule that the petitioner seeks to have repealed, as the case may be;
    (3) Explain the interest of the petitioner in the action requested 
including, in the case of a petition for an exemption, the nature and 
extent of the relief sought and a description of the persons to be 
covered by the exemption;
    (4) Contain any information and arguments available to the 
petitioner to support the action sought; and
    (5) In the case of a petition for exemption, unless good cause is 
shown in that petition, be submitted at least 60 days before the 
proposed effective date of the exemption.



Sec. 5.13  Processing of petitions.

    (a) General. Each petition received under Sec. 5.11 of this part is 
referred to the head of the office responsible for the subject matter of 
that petition. No public hearing, argument, or other proceeding is held 
directly on a petition before its disposition under this section.
    (b) Grants. If the Secretary determines that the petition contains 
adequate justification, he initiates rulemaking action under subpart C 
of this part or grants the exemption, as the case may be.
    (c) Denials. If the Secretary determines that the petition does not 
justify initiating rule-making action or granting the exemption, he 
denies the petition.
    (d) Notification. Whenever the Secretary determines that a petition 
should be granted or denied, the office concerned and the Office of the 
General Counsel prepare a notice of that grant or denial for issuance to 
the petitioner, and the Secretary issues it to the petitioner.

[[Page 51]]



                          Subpart C_Procedures



Sec. 5.21  General.

    (a) Unless the Secretary finds, for good cause, that notice is 
impractical, unnecessary, or contrary to the public interest, a notice 
of proposed rule making is issued and interested persons are invited to 
participate in the rulemaking proceedings with respect to each 
substantive rule.
    (b) Unless the Secretary determines that notice and public 
rulemaking proceedings are necessary or desirable, interpretive rules, 
general statements of policy, and rules relating to organization, 
procedure, or practice are prescribed as final without notice or other 
public rulemaking proceedings.
    (c) In his discretion, the Secretary may invite interested persons 
to participate in the rulemaking proceedings described in Sec. 5.29 of 
this subpart.
    (d) For rules for which the Secretary determines that notice is 
unnecessary because no adverse public comment is anticipated, the direct 
final rulemaking procedure described in Sec. 5.35 of this subpart may 
be followed.

[32 FR 10363, July 14, 1967, as amended at 69 FR 4458, Jan. 30, 2004]



Sec. 5.23  Contents of notices.

    (a) Each notice of proposed rulemaking is published in the Federal 
Register, unless all persons subject to it are named and are personally 
served with a copy of it.
    (b) Each notice, whether published in the Federal Register or 
personally served, includes:
    (1) A statement of the time, place, and nature of the proposed rule-
making proceeding;
    (2) A reference to the authority under which it is issued;
    (3) A description of the subjects or issues involved or the 
substance or terms of the proposed rule;
    (4) A statement of the time within which written comments must be 
submitted and the required number of copies; and
    (5) A statement of how and to what extent interested persons may 
participate in the proceeding.



Sec. 5.25  Petitions for extension of time to comment.

    (a) Any person may petition the Secretary for an extension of time 
to submit comments in response to a notice of proposed rulemaking. The 
petition must be submitted in duplicate not later than 3 days before 
expiration of the time stated in the notice. The filing of the petition 
does not automatically extend the time for petitioner's comments.
    (b) The Secretary grants the petition only if the petitioner shows a 
substantive interest in the proposed rule and good cause for the 
extension, and if the extension is in the public interest. If an 
extension is granted, it is granted as to all persons and is published 
in the Federal Register.



Sec. 5.27  Consideration of comments received.

    All timely comments are considered before final action is taken on a 
rule-making proposal. Late filed comments may be considered so far as 
possible without incurring additional expense or delay.



Sec. 5.29  Additional rulemaking proceedings.

    The Secretary may initiate any further rulemaking proceedings that 
he finds necessary or desirable. For example, he may invite interested 
persons to present oral arguments, participate in conferences, appear at 
informal hearings, or participate in any other proceeding.



Sec. 5.31  Hearings.

    (a) Sections 556 and 557 of title 5, United States Code, do not 
apply to hearings held under this part. As a fact-finding proceeding, 
each hearing is nonadversary and there are no formal pleadings or 
adverse parties. Any rule issued in a case in which a hearing is held is 
not necessarily based exclusively on the record of the hearing.
    (b) The Secretary designates a representative to conduct any hearing 
held under this part. The General Counsel designates a member of his 
staff to serve as legal officer at the hearing.

[[Page 52]]



Sec. 5.33  Adoption of final rules.

    Final rules are prepared by representatives of the office concerned 
and the Office of the General Counsel. The rule is then submitted to the 
Secretary for his consideration. If the Secretary adopts the rule, it is 
published in the Federal Register, unless all persons subject to it are 
named and are personally served with a copy of it.



Sec. 5.35  Procedures for direct final rulemaking.

    (a) Rules that the Secretary judges to be noncontroversial and 
unlikely to result in adverse public comment may be published as direct 
final rules. These include noncontroversial rules that:
    (1) Affect internal procedures of the Office of the Secretary, such 
as filing requirements and rules governing inspection and copying of 
documents,
    (2) Are nonsubstantive clarifications or corrections to existing 
rules,
    (3) Update existing forms,
    (4) Make minor changes in the substantive rules regarding statistics 
and reporting requirements,
    (5) Make changes to the rules implementing the Privacy Act, and
    (6) Adopt technical standards set by outside organizations.
    (b) The Federal Register document will state that any adverse 
comment or notice of intent to submit adverse comment must be received 
in writing by the Office of the Secretary within the specified time 
after the date of publication and that, if no written adverse comment or 
written notice of intent to submit adverse comment is received, the rule 
will become effective a specified number of days after the date of 
publication.
    (c) If no written adverse comment or written notice of intent to 
submit adverse comment is received by the Office of the Secretary within 
the specified time of publication in the Federal Register, the Office of 
the Secretary will publish a notice in the Federal Register indicating 
that no adverse comment was received and confirming that the rule will 
become effective on the date that was indicated in the direct final 
rule.
    (d) If the Office of the Secretary receives any written adverse 
comment or written notice of intent to submit adverse comment within the 
specified time of publication in the Federal Register, a notice 
withdrawing the direct final rule will be published in the final rule 
section of the Federal Register and, if the Office of the Secretary 
decides a rulemaking is warranted, a notice of proposed rulemaking will 
be published in the proposed rule section of the Federal Register.
    (e) An ``adverse'' comment for the purpose of this subpart means any 
comment that the Office of the Secretary determines is critical of the 
rule, suggests that the rule should not be adopted, or suggests a change 
that should be made in the rule. A comment suggesting that the policy or 
requirements of the rule should or should not also be extended to other 
Departmental programs outside the scope of the rule is not adverse.

[69 FR 4458, Jan. 30, 2004]



                        Sec. Appendix A to Part 5

    Pursuant to Sec. 5.1(b), the following officials of the Office of 
the Secretary of Transportation are authorized to conduct rulemaking 
proceedings under this part, as specified in this appendix:
    (1) The General Counsel is authorized to conduct all rule-making 
proceedings, except the issuance of final rules, under the Act of March 
19, 1918, ch. 24, as amended (15 U.S.C. 261-264); the Uniform Time Act 
of 1966 (80 Stat. 107, 15 U.S.C. 260-267); and section 6(e)(5) of the 
Department of Transportation Act (80 Stat. 939, 49 U.S.C. 1655 (e)(5)).
    (2) The General Counsel is authorized to determine the 
practicability of applying the standard time of any standard time zone 
to the movements of any common carrier engaged in interstate or foreign 
commerce, and, under section 2 of the Act of March 19, 1918, ch. 24, as 
amended (15 U.S.C. 262), to issue operating exceptions in any case in 
which he determines that it is impractical to apply the standard time.

[Amdt. 5-1, 32 FR 11473, Aug. 9, 1967]



PART 6_IMPLEMENTATION OF EQUAL ACCESS TO JUSTICE ACT IN AGENCY 
PROCEEDINGS--Table of Contents



                      Subpart A_General Provisions

Sec.
6.1 Purpose of these rules.
6.3 Applicability.
6.5 Proceedings covered.
6.7 Eligibility of applications.

[[Page 53]]

6.9 Standards for awards.
6.11 Allowable fees and expenses.
6.13 Delegations of authority.

             Subpart B_Information Required from Applicants

6.17 Contents of application.
6.19 Net worth exhibit.
6.21 Documentation of fees and expenses.

            Subpart C_Procedures for Considering Applications

6.23 Filing and service of documents.
6.25 Answer to application.
6.27 Comments by other parties.
6.29 Settlement.
6.31 Further proceedings.
6.33 Decision.
6.35 Agency review.
6.37 Judicial review.
6.39 Payment of award.

    Authority: 5 U.S.C. 504; 28 U.S.C. 2412.

    Source: 48 FR 1070, Jan. 10, 1983, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 6.1  Purpose of these rules.

    The Equal Access to Justice Act, 5 U.S.C. 504 (called ``the Act'' in 
this part), provides for the award of attorney fees and other expenses 
to eligible individuals and entities who are parties to certain 
administrative proceedings (called ``adversary adjudications'') before 
government agencies, such as the Department of Transportation or any of 
its operating administrations. The rules in this part describe the 
parties eligible for awards and the proceedings that are covered. They 
also explain how to apply for awards, and the procedures and standards 
that this agency will use to make them. The use of the term 
``Department'', in this rule, will be understood to mean the Department 
of Transportation or any of its operating administrations, unless 
otherwise specified. The term ``agency counsel'' will be understood to 
mean counsel for the Department of Transportation or any of its 
operating administrations.

[48 FR 1070, Jan. 10, 1983, as amended at 62 FR 19233, Apr. 21, 1997]



Sec. 6.3  Applicability.

    Section 6.9(a) applies to any adversary adjudication pending before 
the Department on or after October 1, 1981. In addition, applicants for 
awards must also meet the standards of Sec. 6.9(b) for any adversary 
adjudication commenced on or after March 29, 1996.

[62 FR 19233, Apr. 21, 1997]



Sec. 6.5  Proceedings covered.

    (a) The Act applies to adversary adjudications conducted by the 
Department of Transportation. These are adjudications under 5 U.S.C. 554 
in which the position of the Department is represented by an attorney or 
other representative who enters an appearance and participates in the 
proceeding. Coverage of the Act begins at designation of a proceeding or 
issuance of a charge sheet. Any proceeding in which the Department may 
prescribe or establish a lawful present or future rate is not covered by 
the Act. Proceedings to grant or renew licenses are also excluded, but 
proceedings to modify, suspend, or revoke licenses are covered if they 
are otherwise ``adversary adjudications.'' For the Department of 
Transportation, the types of proceedings covered include, but may not be 
limited to: Coast Guard suspension or revocation of licenses, 
certificates or documents under 46 U.S.C. 7701 et seq.; Coast Guard 
class II civil penalty proceedings under the Clean Water Act, 33 U.S.C. 
1321(b)(6)(B)(ii); Coast Guard class II penalty proceedings under the 
Comprehensive Environmental Response, Compensation and Liability Act, 42 
U.S.C. 9609(b); suspension and revocation of Certificates of Registry 
proceedings for Great Lakes Pilots pursuant to 46 CFR Part 401; National 
Highway Traffic Safety Administration (NHTSA) automotive fuel economy 
enforcement under 49 U.S.C. Chapter 329 (49 CFR Part 511); Federal 
Highway Administration (FHWA) enforcement of motor carrier safety 
regulations under 49 U.S.C. 521 and 5123 (49 CFR 386); the Department's 
aviation economic enforcement proceedings conducted by its Office of 
Aviation Enforcement and Proceedings pursuant to 49 U.S.C. Subtitle VII, 
14 CFR Chapter II. Also covered are any appeal of a decision made 
pursuant to section 6 of the Contract Disputes Act of 1978 (41 U.S.C. 
605) before an agency board of contract appeals as provided in section 8 
of that

[[Page 54]]

Act (41 U.S.C. 607), any hearing conducted under Chapter 38 of title 31, 
and the Religious Freedom Restoration Act of 1993, 42 U.S.C. 2000bb et 
seq.
    (b) If a proceeding includes both matters covered by the Act and 
matters specifically excluded from coverage, any award made will include 
only fees and expenses related to covered issues.

[48 FR 1070, Jan. 10, 1983, as amended at 62 FR 19233, Apr. 21, 1997]



Sec. 6.7  Eligibility of applications.

    (a) To be eligible for an award of attorney fees and other expenses 
under the Act, the applicant must be a party to an adversary 
adjudication for which it seeks an award. The term ``party'' is defined 
in 5 U.S.C. 504(b)(1)(B). The applicant must show that it meets all 
conditions of eligibility set out in this subpart and in paragraph (b) 
of this section.
    (b) The types of eligible applicants are as follows:
    (1) An individual with a net worth of not more than $2 million;
    (2) The sole owner of an unincorporated business who has a net worth 
of not more than $7 million, including both personal and business 
interests, and not more than 500 employees.
    (3) A charitable or other tax-exempt organization as described in 
section 501(c)(3) of the Internal Revenue Code (26 U.S.C. 501(c)(3)) 
with not more than 500 employees;
    (4) A cooperative association as defined in section 15(a) of the 
Agricultural Marketing Act (12 U.S.C. 1141j(a)) with a net worth of not 
more than $5 million and not more than 500 employees.
    (5) Any other partnership, corporation, association, or public or 
private organization with a net worth of not more than $7 million and 
not more than 500 employees.
    (6) For the purposes of Sec. 6.9(b), eligible applicants include 
small entities as defined in 5 U.S.C. 601.
    (c) For the purpose of eligibility, the net worth and number of 
employees of an applicant shall be determined as of the date the 
proceeding was designated.
    (d) An applicant who owns an unincorporated business will be 
considered an ``individual'' rather than a ``sole owner of an 
unincorporated business'' if the issues on which the applicant prevails 
are related primarily to personal interests rather than to business 
interests.
    (e) The number of employees of an applicant includes all persons who 
regularly perform services for remuneration for the applicant, under the 
applicant's direction and control. Part-time employees shall be included 
on a proportional basis.
    (f) The net worth and number of employees of the applicant and all 
of its affiliates shall be aggregated to determine eligibility. Any 
individual, corporation or other entity that directly or indirectly 
controls or owns a majority of the voting shares or other interest of 
the applicant, or any corporation or other entity of which the applicant 
directly or indirectly owns or controls a majority of the voting shares 
or other interest, will be considered an affiliate for purposes of this 
part, unless the administrative law judge determines that such treatment 
would be unjust and contrary to the purposes of the Act in light of the 
actual relationship between the affiliated entities. In addition, the 
administrative law judge may determine that financial relationships of 
the applicant other than those described in this paragraph constitute 
special circumstances that would make an award unjust.
    (g) An applicant that participates in a proceeding primarily on 
behalf of one or more other persons or entities that would be ineligible 
is not itself eligible for an award.
    (h) An applicant who appears pro se in a proceeding is ineligible 
for award of attorney fees. However, eligibility for other expenses is 
not affected by pro se representation.

[48 FR 1070, Jan. 10, 1983, as amended at 62 FR 19234, Apr. 21, 1997]



Sec. 6.9  Standards for awards.

    (a) An eligible applicant may receive an award for fees and expenses 
incurred by that party in connection with a decision in favor of the 
applicant in a proceeding covered by this Part, unless the position of 
the Department over which the applicant has prevailed was

[[Page 55]]

substantially justified or special circumstances make the award sought 
unjust. The burden of proof that an award should not be made to an 
eligible applicant is on the Department where it has initiated the 
proceeding. No presumption arises that the Department's position was not 
substantially justified simply because the Department did not prevail. 
Whether or not the position of the Department was substantially 
justified shall be determined on the basis of the administrative record, 
as a whole, in the adversary adjudication for which fees and other 
expenses are sought. The ``position of the Department'' means, in 
addition to the position taken by the agency in the adversary 
adjudication, the action or failure to act by the Department upon which 
the adversary adjudication may be based.
    (b) In the context of a Departmental proceeding to enforce a party's 
compliance with a statutory or regulatory requirement, if the demand by 
the Department is substantially in excess of the amount awarded to the 
government pursuant to the decision of the adjudicative officer and is 
unreasonable when compared with such decision, under the facts and 
circumstances of the case, the adjudicative officer shall award to an 
eligible applicant party the fees and expenses related to defending 
against the excessive demand, unless the applicant party has committed a 
willful violation of law or otherwise acted in bad faith, or special 
circumstances make an award unjust. Fees and expenses awarded under this 
paragraph shall be paid only as a consequence of appropriations provided 
in advance. As used in this section, ``demand'' means the express demand 
of the Department which led to the adversary adjudication, but does not 
include a recitation by the Department of the maximum statutory penalty
    (i) In the administrative complaint, or
    (ii) Elsewhere when accompanied by an express demand for a lesser 
amount.
    (c) The decision of the Department on the application for fees and 
other expenses shall be the final administrative decision under this 
section.
    (d) An award will be reduced or denied if the applicant has unduly 
or unreasonably protracted the proceeding.

[62 FR 19234, Apr. 21, 1997]



Sec. 6.11  Allowable fees and expenses.

    (a) Awards will be based on rates customarily charged by persons 
engaged in the business of acting as attorneys, agents or expert 
witnesses.
    (b) No award for the fee of an attorney or agent under these rules 
may exceed $125.00 per hour. This amount shall include all other 
expenses incurred by the attorney or agent in connection with the case. 
No award to compensate an expert witness may exceed the highest market 
rate at which the Department pays expert witnesses, or $24.09 per hour, 
whichever is less.
    (c) In determining the reasonableness of the fee sought for an 
attorney, agent or expert witness, the administrative law judge shall 
consider the following:
    (1) If the attorney, agent or witness is in private practice, his or 
her customary fee for similar services, or, if an employee of the 
applicant, the fully allocated cost of the services;
    (2) The prevailing rate for similar services in the community in 
which the attorney, agent or witness ordinarily performs services;
    (3) The time actually spent in the representation of the applicant;
    (4) The time reasonably spent in light of the difficulty or 
complexity of the issues in the proceeding; and
    (5) Such other factors as may bear on the value of the services 
provided.
    (d) The reasonable cost of any study, analysis, engineering report, 
test, project or similar matter prepared on behalf of a party may be 
awarded, to the extent that the charge for the service does not exceed 
the prevailing rate for similar services, and the study or other matter 
was necessary for preparation of the applicant's case.
    (e) Fees may be awarded only for work performed after designation of 
a proceeding.

[48 FR 1070, Jan. 10, 1983, as amended at 62 FR 19234, Apr. 21, 1997]



Sec. 6.13  Delegations of authority.

    The Secretary of Transportation delegates to the head of each 
operating

[[Page 56]]

administration of this Department the authority to take final action, 
other than rulemaking, on matters pertaining to the Act in actions that 
require section 554 proceedings. The head of each operating 
administration may redelegate this authority.



             Subpart B_Information Required from Applicants



Sec. 6.17  Contents of application.

    (a) An application for an award of fees and expenses under the Act 
shall identify the applicant and the proceeding for which an award is 
sought. The application shall show that the applicant has prevailed and 
identify the position of an agency or agencies in the proceeding that 
the applicant alleges was not substantially justified. Unless the 
applicant is an individual, the application shall also state that it did 
not have more than 500 employees at the time the proceeding was 
initiated, giving the number of employees of the applicant and 
describing briefly the type and purpose of its organization or business.
    (b) The application shall also include a statement that the 
applicant's net worth does not exceed $1 million (if an individual) or 
$5 million (for all other applicants, including their affiliates). 
However, an applicant may omit this statement if:
    (1) It attaches a copy of a ruling by the Internal Revenue Service 
that it qualifies as an organization described in section 501(c)(3) of 
the Internal Revenue Code (26 U.S.C. 501(c)(3)) or, in the case of a 
tax-exempt organization not required to obtain a ruling from the 
Internal Revenue Service on its exempt status, a statement that 
describes the basis for the applicant's belief that it qualifies under 
such section; or
    (2) It states that it is a cooperative association as defined in 
section 15(a) of the Agricultural Marketing Act (12 U.S.C. 114j(a)).
    (c) The application shall state the amount of fees and expenses for 
which an award is sought.
    (d) The application may also include any other matters that the 
applicant wishes this agency to consider in determining whether and in 
what amount an award should be made.
    (e) The application shall be signed by the applicant or an 
authorized officer or attorney of the applicant. It shall also contain 
or be accompanied by a written verification under oath or under penalty 
of perjury that the information provided in the application is true and 
correct.
    (f) If the applicant is a partnership, corporation, association, or 
organization, or a sole owner of an unincorporated business, the 
application shall state that it did not have more than 500 employees at 
the time the proceeding was initiated, giving the number of its 
employees and describing briefly the type and purpose of its 
organization or business.



Sec. 6.19  Net worth exhibit.

    (a) Each applicant except a qualified tax-exempt organization or 
cooperative association must provide with its application a detailed 
exhibit showing the net worth of the applicant and any affiliates (as 
defined in this part) when the proceeding was designated. If any 
individual, corporation, or other entity directly or indirectly controls 
or owns a majority of the voting shares or other interest of the 
applicant, or if the applicant directly or indirectly owns or controls a 
majority of the voting shares or other interest of any corporation or 
other entity, the exhibit must include a showing of the net worth of all 
such affiliates or of the applicant including the affiliates. The 
exhibit may be in any form convenient to the applicant that provides 
full disclosure of the applicant's and its affiliates' assets and 
liabilities and is sufficient to determine whether the applicant 
qualifies under the standards in this subpart. The administrative law 
judge may require an applicant to file additional information to 
determine its eligibility for an award.
    (b) The net worth exhibit shall describe any transfers of assets 
from, or obligations incurred by, the applicant or any affiliate, 
occurring in the one-year period prior to the date on which the 
proceeding was initiated, that reduced the net worth of the applicant 
and its affiliates below the applicable net worth ceiling. If there were 
no such transactions, the applicant shall so state.

[[Page 57]]

    (c) The net worth exhibit shall be included in the public record of 
the proceeding.



Sec. 6.21  Documentation of fees and expenses.

    (a) The application shall be accompanied by full documentation of 
the fees and expenses, including the cost of any study, analysis, 
engineering report, test, project or similar matter, for which an award 
is sought.
    (b) The documentation shall include an affidavit from any attorney, 
agent, or expert witness representing or appearing in behalf of the 
party, stating the actual time expended and the rate at which fees and 
other expenses were computed and describing the specific services 
performed.
    (1) The affidavit shall state the services performed. In order to 
establish the hourly rate, the affidavit shall state the hourly rate 
which is billed and paid by the majority of clients during the relevant 
time periods.
    (2) If no hourly rate is paid by the majority of clients because, 
for instance, the attorney or agent represents most clients on a 
contingency basis, the attorney or agent shall provide information about 
two attorneys or agents with similar experience, who perform similar 
work, stating their hourly rate.
    (c) The documentation shall also include a description of any 
expenses for which reimbursement is sought and a statement of the 
amounts paid and payable by the applicant or by any other person or 
entity for the services provided.
    (d) The administrative law judge may require the applicant to 
provide vouchers, receipts, or other substantiation for any expenses 
claimed.
    (e) The administrative law judge may, within his or her discretion, 
make a determination as to whether a study, conducted by the applicant, 
was necessary to the preparation of the applicant's case.



            Subpart C_Procedures for Considering Applications



Sec. 6.23  Filing and service of documents.

    Any application for an award or other pleading or document related 
to an application shall be filed and served on all parties to the 
proceeding in the same manner as other pleadings in the proceeding.



Sec. 6.25  Answer to application.

    (a) Within 30 calendar days after service of an application, the 
agency counsel may file an answer to the application. Unless the agency 
counsel requests an extension of time for filing or files a statement of 
intent to negotiate under paragraph (b) of this section, failure to file 
an answer within the 30-day period may be treated as a consent to the 
award request.
    (b) If agency counsel and applicant believe that they can reach a 
settlement concerning the award, the agency counsel may file a statement 
of intent to negotiate. The filing of such a statement shall extend the 
time for filing an answer an additional 30 days.
    (c) The answer shall explain in detail any objections to the award 
requested and identify the facts relied on in support of the 
Department's position. If the answer is based on any alleged facts not 
already in the record of the proceeding, the Department shall include 
with the answer either supporting affidavits or a request for further 
proceedings under Sec. 6.3.

[48 FR 1070, Jan. 10, 1983, as amended at 62 FR 19234, Apr. 21, 1997]



Sec. 6.27  Comments by other parties.

    Any party to a proceeding, other than the applicant and the 
Department may file comments on an application within 30 days after it 
is served or on an answer within 15 days after it is served. A 
commenting party may not participate further in proceedings on the 
application.



Sec. 6.29  Settlement.

    The applicant and agency counsel may agree on a proposed settlement 
of the award before final action on the application, either in 
connection with a settlement of the underlying proceeding, or after the 
underlying proceeding has been concluded, in accordance with the 
agency's standard settlement procedure. If a prevailing party and the 
agency counsel agree on a proposed settlement of an award before an

[[Page 58]]

application has been filed the application shall be filed with the 
proposed settlement.



Sec. 6.31  Further proceedings.

    (a) Ordinarily, the determination of an award will be made on the 
basis of the written record. However, on request of either the applicant 
or agency counsel, or on his or her own initiative, the administrative 
law judge may order further proceedings, such as an informal conference, 
oral argument, additional written submissions or an evidentiary hearing.

Such further proceedings shall be held only when necessary for full and 
fair resolution of the issues arising from the application, and shall be 
conducted as promptly as possible.
    (b) A request that the administrative law judge order further 
proceedings under this section shall specifically identify the 
information sought or the disputed issues and shall explain why the 
additional proceedings are necessary to resolve the issues.



Sec. 6.33  Decision.

    The administrative law judge shall issue an initial decision on the 
application as soon as possible after completion of proceedings on the 
application. The decision shall also include, if at issue, findings on 
whether the Department's position was substantially justified, whether 
the applicant unduly protracted the proceedings, or whether special 
circumstances make an award unjust. If the applicant has sought an award 
against more than one agency, the decision shall allocate responsibility 
for payment or any award made among the agencies, and shall explain the 
reasons for the allocation made.



Sec. 6.35  Agency review.

    Where Department review of the underlying decision is permitted, 
either the applicant or agency counsel, may seek review of the initial 
decision on the fee application, or the Department may decide to review 
the decision on its own initiative. If neither the applicant nor the 
agency counsel seeks review within 30 days after the decision is issued, 
it shall become final.



Sec. 6.37  Judicial review.

    Judicial review of final agency decisions on awards may be sought as 
provided in 5 U.S.C. 504(c)(2).



Sec. 6.39  Payment of award.

    An applicant seeking payment of an award from the Department of 
Transportation or any of its operating administrations under this part 
shall submit a copy of the Department of Transportation's or any of its 
operating administration's final decisions granting the award, 
accompanied by a statement that the applicant will not seek review of 
the decision in the United States courts. The copy of the decision and 
the statement should be submitted to the head of the affected operating 
administration or the Secretary of Transportation, where the Department 
of Transportation, Office of the Secretary, has initiated the 
proceedings.



PART 7_PUBLIC AVAILABILITY OF INFORMATION--Table of Contents



                      Subpart A_General Provisions

Sec.
7.1 General.
7.2 Definitions.

         Subpart B_Information Required To Be Made Public by DOT

7.3 Publication in the Federal Register.
7.4 Publication required.
7.5 Availability of opinions, orders, staff manuals, statements of 
          policy, and interpretations and indices.
7.6 Deletion of identifying detail.
7.7 Access to materials and indices.
7.8 Copies.
7.9 Protection of records.
7.10 Public records.

Subpart C_Availability of Reasonably Described Records Under the Freedom 
                           of Information Act

7.11 Applicability.
7.12 Administration of subpart.
7.13 Records available.
7.14 Requests for records.
7.15 Contacts for records requested under the FOIA.
7.16 Requests for records of concern to more than one government 
          organization.

[[Page 59]]

7.17 Consultation with submitters of commercial and financial 
          information.

  Subpart D_Procedures for Appealing Decisions Not To Disclose Records 
                            and/or Waive Fees

7.21 General.

                          Subpart E_Time Limits

7.31 Initial determinations.
7.32 Final determinations.
7.33 Extension.

                             Subpart F_Fees

7.41 General.
7.42 Payment of fees.
7.43 Fee schedule.
7.44 Services performed without charge or at a reduced charge.
7.45 Transcripts.
7.46 Alternative sources of information.

    Authority: 5 U.S.C. 552; 31 U.S.C. 9701; 49 U.S.C. 322; E.O. 12600, 
3 CFR, 1987 Comp., p. 235.

    Source: Amdt. 1, 63 FR 38331, July 16, 1998, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 7.1  General.

    (a) This part implements 5 U.S.C. 552, and prescribes rules 
governing the availability to the public of DOT records. Many documents 
are made available to the public for inspection and copying through 
DOT's Primary Electronic Access Facility and public record unit 
locations that are discussed in subpart B of this part, which contains 
the DOT regulations concerning the availability to the public of 
opinions issued in the adjudication of cases, policy issuances, 
administrative manuals, and other information made available to the 
public, without need for a specific request.
    (b) Subpart C of this part describes the records that are not 
required to be disclosed on DOT's own action under this part, but that 
may be available upon request under FOIA.
    (c) Indices are maintained to reflect all records subject to subpart 
B of this part, and are available for public inspection and copying as 
provided in subpart B.



Sec. 7.2  Definitions.

    Unless the context requires otherwise, the following definitions 
apply in this part:
    Act and FOIA mean the Freedom of Information Act, 5 U.S.C. 552, as 
amended.
    Administrator means the head of each component of DOT and includes 
the Under Secretary for Security, the Commandant of the Coast Guard, the 
Inspector General, and the Director of the Bureau of Transportation 
Statistics.
    Concurrence means that the approval of the person being consulted is 
required in order for the subject action to be taken.
    Consultation means that the approval of the person being consulted 
is not required in order for the subject action to be taken.
    Department means the Department of Transportation, including the 
Office of the Secretary, the Office of Inspector General, and the 
following DOT Operating Administrations, all of which may be referred to 
as DOT components. Means of contacting each of these DOT components 
appear in Sec. 7.15. This definition specifically excludes the Surface 
Transportation Board, which has its own FOIA regulations (49 CFR Part 
1001):
    (1) Federal Aviation Administration,
    (2) Federal Highway Administration,
    (3) Federal Motor Carrier Safety Administration,
    (4) Federal Railroad Administration,
    (5) National Highway Traffic Safety Administration,
    (6) Federal Transit Administration,
    (7) Saint Lawrence Seaway Development Corporation,
    (8) Maritime Administration,
    (9) Pipeline and Hazardous Materials Safety Administration, and
    (10) Research and Innovative Technology Administration.
    Primary Electronic Access Facility means the electronic docket 
facility in the DOT Headquarters Building, 1200 New Jersey Avenue, SE., 
Washington, DC 20590.
    Reading room records are those records required to be made available 
to the public under 5 U.S.C. 552(a)(2) as described in Sec. 7.5 of 
Subpart B of this part. These records are made available

[[Page 60]]

through DOT's Primary Electronic Access Facility. Other records may also 
be made available at DOT's discretion at DOT inspection facilities, 
including DOT's Primary Electronic Access Facility.
    Record includes any writing, drawing, map, recording, tape, film, 
photograph, or other documentary material by which information is 
preserved. The term also includes any such documentary material stored 
by computer.
    Responsible DOT official means the head of the DOT component 
concerned, or the General Counsel or the Inspector General, as the case 
may be, or the designee of any of them, authorized to take an action 
under this part.
    Secretary means the Secretary of Transportation or any person to 
whom the Secretary has delegated authority in the matter concerned.

[Amdt. 1, 63 FR 38331, July 16, 1998, as amended at 67 FR 54746, Aug. 
26, 2002; 73 FR 33328, June 12, 2008; 75 FR 5244, Feb. 2, 2010]



         Subpart B_Information Required To Be Made Public by DOT



Sec. 7.3  Publication in the Federal Register.

    This section implements 5 U.S.C. 552(a)(1), and prescribes rules 
governing publication in the Federal Register of the following:
    (a) Descriptions of DOT's organization, including its DOT components 
and the established places at which, the officers from whom, and the 
methods by which, the public may secure information and make submittals 
or obtain decisions;
    (b) Statements of the general course and methods by which DOT's 
functions are channeled and determined, including the nature and 
requirements of all formal and informal procedures available;
    (c) Rules of procedure, descriptions of forms available or the 
places at which forms may be obtained, and instructions as to the scope 
and contents of all papers, reports, or examinations;
    (d) Substantive rules of general applicability adopted as authorized 
by law and statements of general policy or interpretations of general 
applicability formulated and adopted by DOT; and
    (e) Each amendment, revision, or repeal of any material listed in 
paragraphs (a) through (d) of this section.



Sec. 7.4  Publication required.

    (a) General. The material described in Sec. 7.3 will be published 
in the Federal Register. For the purposes of this paragraph, material 
that will reasonably be available to the class of persons affected by it 
will be considered to be published in the Federal Register if it has 
been incorporated by reference with the approval of the Director of the 
Federal Register.
    (b) Effect of nonpublication. Except to the extent that he/she has 
actual and timely notice of the terms thereof, a person may not in any 
manner be required to resort to, or be adversely affected by, any 
procedure or matter required to be published in the Federal Register, 
but not so published.



Sec. 7.5  Availability of opinions, orders, staff manuals, statements of
policy, and interpretations and indices.

    (a) This section implements 5 U.S.C. 552(a)(2). It prescribes the 
rules governing the availability for public inspection and copying of 
the following reading room materials:
    (1) Any final opinion (including a concurring or dissenting opinion) 
or order made in the adjudication of a case.
    (2) Any policy or interpretation that has been adopted under DOT 
authority, including any policy or interpretation concerning a 
particular factual situation, if that policy or interpretation can 
reasonably be expected to have precedential value in any case involving 
a member of the public in a similar situation.
    (3) Any administrative staff manual or instruction to staff that 
affects any member of the public, including the prescribing of any 
standard, procedure, or policy that, when implemented, requires or 
limits any action of any member of the public or prescribes the manner 
of performance of any activity by any member of the public. However, 
this does not include staff manuals or

[[Page 61]]

instructions to staff concerning internal operating rules, practices, 
guidelines, and procedures for DOT inspectors, investigators, law 
enforcement officers, examiners, auditors, and negotiators and other 
information developed predominantly for internal use, the release of 
which could significantly risk circumvention of agency regulations or 
statutes.
    (4) Copies of all records, regardless of form or format, that have 
been released to any person under subpart C of this part and which, 
because of the nature of their subject matter, a DOT component 
determines have become or are likely to become the subject of subsequent 
requests for substantially the same records.
    (5) A general index of the records listed in this paragraph.
    (b) Any material listed in paragraph (a) of this section that is not 
made available for public inspection and copying, or that is not indexed 
as required by Sec. 7.7, may not be cited, relied on, or used as 
precedent by DOT to affect any member of the public adversely unless the 
person to whose detriment it is relied on, used, or cited has had actual 
timely notice of the material.
    (c) This section does not apply to material that is published in the 
Federal Register or covered by subpart C of this part.



Sec. 7.6  Deletion of identifying detail.

    Whenever it is determined to be necessary to prevent a clearly 
unwarranted invasion of personal privacy, identifying details will be 
deleted from any record covered by this subpart that is published or 
made available for inspection. Whenever it is determined to be necessary 
to prevent the disclosure of information required or authorized to be 
withheld by another Federal statute, such information shall be deleted 
from any record covered by this subpart that is published or made 
available for inspection. A full explanation of the justification for 
the deletion will accompany the record published or made available for 
inspection.



Sec. 7.7  Access to materials and indices.

    (a) Except as provided in paragraph (b) of this section, material 
listed in Sec. 7.5 will be made available for inspection and copying to 
any member of the public at DOT document inspection facilities. It has 
been determined that it is unnecessary and impracticable to publish the 
index of materials in the Federal Register. Information as to the kinds 
of materials available at each facility may be obtained from the 
facility or the headquarters of the DOT component of which it is a part.
    (b) The material listed in Sec. 7.5 that is published and offered 
for sale will be indexed, but is not required to be kept available for 
public inspection. Whenever practicable, however, it will be made 
available for public inspection at the appropriate DOT reading room.
    (c) Each DOT component will also make the reading room records 
identified in section 7.5(a) that are created by DOT on or after 
November 1, 1996, available electronically. This includes indices of its 
reading room records as required by law after December 1, 1999.



Sec. 7.8  Copies

    Copies of any material covered by this subpart that is not published 
and offered for sale may be ordered, upon payment of the appropriate 
fee, from the Docket Offices listed in Sec. 7.10. Copies will be 
certified upon request and payment of the fee prescribed in Sec. 
7.43(f).



Sec. 7.9  Protection of records.

    (a) Records made available for inspection and copying may not be 
removed, altered, destroyed, or mutilated.
    (b) 18 U.S.C. 641 provides for criminal penalties for embezzlement 
or theft of government records.
    (c) 18 U.S.C. 2071 provides for criminal penalties for the willful 
and unlawful concealment, mutilation or destruction of, or the attempt 
to conceal, mutilate, or destroy, government records.



Sec. 7.10  Public records.

    Publicly available records are located in DOT's Primary Electronic 
Access Facility at 1200 New Jersey Avenue, SE., Washington, DC 20590.
    (a) The Primary Electronic Access Facility maintains materials for 
the Office of the Secretary, including

[[Page 62]]

former Civil Aeronautics Board material, and materials for the DOT 
components. This facility is located at Room W94-128, and the hours of 
operation are 10:00-17:00 eastern time.
    (b) Certain DOT components also maintain public record units at 
regional offices. These facilities are open to the public Monday through 
Friday except Federal holidays, during regular working hours. The Saint 
Lawrence Seaway Development Corporation has facilities at 180 Andrews 
Street, Massena, New York 13662-0520.
    (c) Operating Administrations may have separate facilities for 
manual records. Additional information on the location and hours of 
operations for inspection facilities can be obtained through DOT's 
Primary Electronic Access Facility, at (202) 366-9322.

[73 FR 33328, June 12, 2008]



Subpart C_Availability of Reasonably Described Records Under the Freedom 
                           of Information Act



Sec. 7.11  Applicability.

    (a) This subpart implements 5 U.S.C 552(a)(3), and prescribes the 
regulations governing public inspection and copying of reasonably 
described records under FOIA.
    (b) This subpart does not apply to:
    (1) Records published in the Federal Register, opinions in the 
adjudication of cases, statements of policy and interpretations, and 
administrative staff manuals that have been published or made available 
under subpart B of this part.
    (2) Records or information compiled for law enforcement purposes and 
covered by the disclosure exemption described in Sec. 7.13(c)(7) if--
    (i) The investigation or proceeding involves a possible violation of 
criminal law; and
    (ii) There is reason to believe that--
    (A) The subject of the investigation or proceeding is not aware of 
its pendency, and
    (B) Disclosure of the existence of the records could reasonably be 
expected to interfere with enforcement proceedings.
    (3) Informant records maintained by a criminal law enforcement 
component of DOT under an informant's name or personal identifier, if 
requested by a third party according to the informant's name or personal 
identifier, unless the informant's status as an informant has been 
officially confirmed.



Sec. 7.12  Administration of subpart.

    Authority to administer this subpart and to issue determinations 
with respect to initial requests is delegated as follows:
    (a) To the General Counsel for the records of the Office of the 
Secretary other than the Office of Inspector General.
    (b) To the Inspector General for records of the Office of Inspector 
General.
    (c) To the Administrator of each DOT component, who may redelegate 
to officers of that administration the authority to administer this part 
in connection with defined groups of records. However, each 
Administrator may redelegate the duties under subpart D of this part to 
consider appeals of initial denials of requests for records only to his 
or her deputy or to not more than one other officer who reports directly 
to the Administrator and who is located at the headquarters of that DOT 
component.



Sec. 7.13  Records available.

    (a) Policy. It is DOT policy to make its records available to the 
public to the greatest extent possible, in keeping with the spirit of 
FOIA. This includes providing reasonably segregable information from 
documents that contain information that may be withheld.
    (b) Statutory disclosure requirement. FOIA requires that DOT, on a 
request from a member of the public submitted in accordance with this 
subpart, make requested records available for inspection and copying.
    (c) Statutory exemptions. Exempted from FOIA's statutory disclosure 
requirement are matters that are:
    (1)(i) Specifically authorized under criteria established by 
Executive Order to be kept secret in the interest of national defense or 
foreign policy, and
    (ii) In fact properly classified pursuant to such Executive order;

[[Page 63]]

    (2) Related solely to the internal personnel rules and practices of 
an agency;
    (3) Specifically exempted from mandatory disclosure by statute 
(other than the Privacy Act or the Government in the Sunshine Act), 
provided that such statute--
    (i) Requires that the matters be withheld from the public in such a 
manner as to leave not any discretion on the issue, or
    (ii) Establishes particular criteria for withholding or refers to 
particular criteria for withholding or refers to particular types of 
matters to be withheld;
    (4) Trade secrets and commercial or financial information obtained 
from a person and privileged or confidential;
    (5) Inter-agency or intra-agency memorandums or letters that would 
not be available by law to a party other than an agency in litigation 
with the agency;
    (6) Personnel and medical files and similar files the disclosure of 
which would constitute a clearly unwarranted invasion of personal 
privacy;
    (7) Records or information compiled for law enforcement purposes, 
but only to the extent that the production of such law enforcement 
records or information--
    (i) Could reasonably be expected to interfere with enforcement 
proceedings,
    (ii) Would deprive a person of a right to a fair or an impartial 
adjudication,
    (iii) Could reasonably be expected to constitute an unwarranted 
invasion of personal privacy,
    (iv) Could reasonably be expected to disclose the identity of a 
confidential source, including a State, local, Tribal, or foreign agency 
or authority or any private institution that furnished information on a 
confidential basis, and, in the case of a record or information compiled 
by a criminal law enforcement authority in the course of a criminal 
investigation, or by an agency conducting a lawful national security 
intelligence investigation, information furnished by a confidential 
source,
    (v) Would disclose techniques and procedures for law enforcement 
investigations or prosecutions or would disclose guidelines for law 
enforcement investigations or prosecutions if such disclosure could 
reasonably be expected to risk circumvention of the law, or
    (vi) Could reasonably be expected to endanger the life or physical 
safety of any individual;
    (8) Contained in or related to examination, operating, or condition 
reports prepared by, on behalf of, or for the use of an agency 
responsible for the regulation or supervision of financial institutions; 
or
    (9) Geological and geophysical information and data, including maps, 
concerning wells.
    (d) Deleted information. The amount of information deleted from 
frequently-requested electronic records that are available in a public 
reading room will be indicated on the released portion of the record, 
unless doing so would harm an interest protected by the exemption 
concerned. If technically feasible, the amount of information deleted 
will be indicated at the place in the record where the deletion is made.



Sec. 7.14  Requests for records.

    (a) Each person desiring access to or a copy of a record covered by 
this subpart shall comply with the following provisions:
    (1) A written request must be made for the record.
    (2) Such request should indicate that it is being made under FOIA.
    (3) The envelope in which a mailed request is sent should be 
prominently marked: ``FOIA.''
    (4) The request should be addressed to the appropriate office as set 
forth in Sec. 7.15.
    (5) The request should state the format (e.g., paper, microfiche, 
computer diskette, etc.) in which the information is sought, if the 
requestor has a preference.
    (b) If the requirements of paragraph (a) of this section are not 
met, treatment of the request will be at the discretion of the agency. 
The twenty-day limit for responding to requests, described in Sec. 
7.31, will not start to run until the request has been identified, or 
would have been identified with the exercise of due diligence, by an 
employee of DOT as a request pursuant to FOIA and has been received by 
the office to

[[Page 64]]

which it should have been originally sent.
    (c) Form of requests. (1) Each request should describe the 
particular record to the fullest extent possible. The request should 
describe the subject matter of the record, and, if known, indicate the 
date when it was made, the place where it was made, and the person or 
office that made it. If the description does not enable the office 
handling the request to identify or locate the record sought, that 
office will notify the requestor and, to the extent possible, indicate 
the additional data required.
    (2) Each request shall--
    (i) Specify the fee category (commercial use, news media, 
educational institution, noncommercial scientific institution, or other) 
in which the requestor claims the request to fall and the basis of this 
claim (see subpart F of this part for fees and fee waiver requirements),
    (ii) State the maximum amount of fees that the requestor is willing 
to pay or include a request for a fee waiver, and
    (iii) A request seeking a fee waiver shall, to the extent possible, 
address why the requestor believes that the criteria for fee waivers set 
out in Sec. 7.44(f) are met.
    (3) Requesters are advised that the time for responding to requests 
set forth in subpart E will not begin to run--
    (i) If a requestor has not sufficiently identified the fee category 
applicable to the request,
    (ii) If a requestor has not stated a willingness to pay fees as high 
as anticipated by DOT,
    (iii) If a fee waiver request is denied and the requestor has not 
included an alternative statement of willingness to pay fees as high as 
anticipated by DOT, or
    (iv) If a fee waiver request does not address fee waiver criteria.
    (d) Creation of records. A request may seek only records that are in 
existence at the time the request is received. A request may not seek 
records that come into existence after the date on which it is received 
and may not require that new records be created in response to the 
request by, for example, combining or compiling selected items from 
manual files, preparing a new computer program, or calculating 
proportions, percentages, frequency distributions, trends, or 
comparisons. In those instances where DOT determines that creating a new 
record will be less burdensome than disclosing large volumes of 
unassembled material, DOT may, in its discretion, agree to creation of a 
new record as an alternative to disclosing existing records. Records 
will be provided in the form or format sought by the requestor if the 
record is readily reproducible in the requested format.
    (e) Search for records. (1) Each record made available under this 
subpart will be made available for inspection and copying during regular 
business hours at the place where it is located, or photocopying may be 
arranged with the copied materials being mailed to the requestor upon 
payment of the appropriate fee. Original records ordinarily will be 
copied except in this instance where, in DOT's judgment, copying would 
endanger the quality of the original or raise the reasonable possibility 
of irreparable harm to the record. In these instances, copying of the 
original would not be in the public interest. In any event, original 
records will not be released from DOT custody. Original records, 
regardless of format, may be returned to agency service upon provision 
of a copy of the record to the requestor, or, in the case of a denial, 
upon creation and retention of a copy of the original for purposes of 
FOIA processing.
    (2) DOT will make a reasonable effort to search for requested 
records in electronic form or format, unless doing so would 
significantly interfere with operation of the affected automated 
information system.
    (f) If a requested record is known not to exist in the files of the 
agency, or to have been destroyed or otherwise disposed of, the 
requestor will be so notified.
    (g) Fees will be determined in accordance with subpart F of this 
part.
    (h) Notwithstanding paragraphs (a) through (g) of this section, 
informational material, such as news releases, pamphlets, and other 
materials of that nature that are ordinarily made available to the 
public as a part of any information program of the Government

[[Page 65]]

will be available upon oral or written request. A fee will be not be 
charged for individual copies of that material so long as the material 
is in supply. In addition DOT will continue to respond, without charge, 
to routine oral or written inquiries that do not involve the furnishing 
of records.



Sec. 7.15  Contacts for records requested under the FOIA.

    Each person desiring a record under this subpart should submit a 
request in writing (via paper, facsimile, or electronic mail) to the DOT 
component where the records are located:
    (a) FOIA Offices at 1200 New Jersey Avenue, SE., Washington, DC 
20590:
    (1) Office of the Secretary of Transportation, Room W94-122.
    (2) Office of Inspector General, Room W73-407.
    (3) Federal Highway Administration, Room E64-302.
    (4) Federal Motor Carrier Safety Administration, Room W66-458.
    (5) Federal Railroad Administration, Room W33-437.
    (6) Federal Transit Administration, Room E42-315.
    (7) National Highway Traffic Safety Administration, Room W41-311.
    (8) Pipeline and Hazardous Materials Safety Administration, Room 
E26-109.
    (9) Research and Innovative Technology Administration, Room E35-330.
    (10) Maritime Administration, Room W24-233.
    (b) Federal Aviation Administration, 800 Independence Avenue, S.W., 
Room 906A, Washington, DC 20591.
    (c) United States Coast Guard, 2100 2nd Street, S.W., Room 6106, 
Washington, DC 20593-0001.
    (d) Director, Office of Finance, Saint Lawrence Seaway Development 
Corporation, 180 Andrews Street, P.O. Box 520, Massena, New York 13662-
0520.
    (e) Federal Railroad Administration, 1120 Vermont Avenue NW, 7th 
Floor, Washington, DC. (Mailing address: 400 Seventh St., SW, 
Washington, DC 20590.)
    (f) Transportation Security Administration, 301 Seventh Street, SW. 
(General Services Administration Regional Office Building), Room 3624, 
Washington, DC (Mailing address: 400 Seventh Street, SW., Washington, DC 
20590).
    (g) Certain DOT components also maintain FOIA contacts at regional 
offices and at the offices of the Commandant and District Commanders of 
the United States Coast Guard. Additional information on the location of 
these offices can be obtained through the FOIA contact offices listed in 
this section.
    (h) If the person making the request does not know where in DOT the 
record is located, he or she may make an inquiry to the Chief, FOIA 
Division, Office of the General Counsel (voice: 202.366.4542; facsimile: 
202.366.8536).
    (i) Requests for records under this part, and Freedom of Information 
Act inquiries generally, may be made by accessing the DOT Home Page on 
the Internet (www.dot.gov) and clicking on the Freedom of Information 
Act link (www.dot.gov/foia).

[Amdt. 1, 63 FR 38331, July 16, 1998, 67 FR 54746, Aug. 26, 2002; 73 FR 
33328, June 12, 2008]



Sec. 7.16  Requests for records of concern to more than one government
organization.

    (a) If the release of a record covered by this subpart would be of 
concern to both DOT and another Federal agency, the determination as to 
release will be made by DOT only after consultation with the other 
interested agency.
    (b) If the release of the record covered by this subpart would be of 
concern to both DOT and a State, local, or Tribal government, a 
territory or possession of the United States, or a foreign government, 
the determination as to release will be made by DOT only after 
consultation with the interested government.
    (c) Alternatively, DOT may refer the request (or relevant portion 
thereof) for decision by a Federal agency that originated or is 
substantially concerned with the records, but only if that agency is 
subject to FOIA. Such referrals will be made expeditiously and the 
requestor notified in writing that a referral has been made.

[[Page 66]]



Sec. 7.17  Consultation with submitters of commercial and financial
information.

    (a) If a request is received for information that has been 
designated by the submitter as confidential commercial information, or 
which DOT has some other reason to believe may contain information of 
the type described in Sec. 7.13(c)(4), the submitter of such 
information will, except as is provided in paragraphs (c) and (d) of 
this section, be notified expeditiously and asked to submit any written 
objections to release. At the same time, the requestor will be notified 
that notice and an opportunity to comment are being provided to the 
submitter. The submitter will, to the extent permitted by law, be 
afforded a reasonable period of time within which to provide a detailed 
statement of any such objections. The submitter's statement shall 
specify all grounds for withholding any of the information. The burden 
shall be on the submitter to identify all information for which exempt 
treatment is sought and to persuade the agency that the information 
should not be disclosed.
    (b) The responsible DOT component will, to the extent permitted by 
law, consider carefully a submitter's objections and specific grounds 
for nondisclosure prior to determining whether to disclose business 
information. Whenever a decision is made to disclose such information 
over the objection of a submitter, the office responsible for the 
decision will forward to the submitter a written notice of intent to 
disclose that will, to the extent permitted by law, be forwarded to the 
submitter a reasonable number of days prior to the specified date upon 
which disclosure is intended. At the same time the submitter is 
notified, the requestor will be notified of the decision to disclose 
information. The written notice will include:
    (1) A statement of the reasons for which the submitter's disclosure 
objections were not accepted;
    (2) A description of the business information to be disclosed; and
    (3) A specific disclosure date.
    (c) The notice requirements of this section will not apply if:
    (1) The office responsible for the decision determines that the 
information should not be disclosed;
    (2) The information lawfully has been published or otherwise made 
available to the public; or
    (3) Disclosure of the information is required by law (other than 5 
U.S.C. 552).
    (d) The procedures established in this section will not apply in the 
case of:
    (1) Business information submitted to the National Highway Traffic 
Safety Administration and addressed in 49 CFR Part 512.
    (2) Information contained in a document to be filed or in oral 
testimony that is sought to be withheld pursuant to Rule 39 of the Rules 
of Practice in Aviation Economic Proceedings (14 CFR 302.39).
    (e) Whenever a requestor brings suit seeking to compel disclosure of 
confidential commercial information, the responsible DOT component will 
promptly notify the submitter.



  Subpart D_Procedures for Appealing Decisions Not To Disclose Records 
                            and/or Waive Fees



Sec. 7.21  General.

    (a) Each officer or employee of DOT who, upon a request by a member 
of the public for a record under this part, makes a determination that 
the record is not to be disclosed, either because it is subject to an 
exemption or not in DOT's custody and control, will give a written 
statement of the reasons for that determination to the person making the 
request; and indicate the names and titles or positions of each person 
responsible for the initial determination not to comply with such 
request, and the availability of an appeal within DOT. The denial letter 
will include an estimate of the volume of records or information 
withheld, in number of pages or in some other reasonable form of 
estimation. This estimate does not need to be provided if the volume is 
otherwise indicated through deletions on records disclosed in part, or 
if providing an estimate would harm an interest protected by an 
applicable exemption. Records disclosed in part will be marked or 
annotated to show both

[[Page 67]]

the amount and the location of the information deleted whenever 
practicable.
    (b) When a request for a waiver of fees pursuant to Sec. 7.44 has 
been denied in whole or in part, the requestor may appeal the denial.
    (c) Any person to whom a record has not been made available within 
the time limits established by Sec. 7.31 and any person who has been 
given a determination pursuant to paragraph (a) of this section that a 
record will not be disclosed may appeal to the responsible DOT official. 
Any person who has not received an initial determination on his or her 
request within the time limits established by Sec. 7.31 can seek 
immediate judicial review, which may be sought without the need first to 
submit an administrative appeal. Judicial review may be sought in the 
United States District Court for the judicial district in which the 
requestor resides or has his or her principal place of business, the 
judicial district in which the records are located, or in the District 
of Columbia. A determination that a record will not be disclosed and/or 
that a request for a fee waiver or reduction will not be granted does 
not constitute final agency action for the purposes of judicial review 
unless:
    (1) It was made by the responsible DOT official; or
    (2) The applicable time limit has passed without a determination on 
the initial request or the appeal, as the case may be, having been made.
    (d) Each appeal must be made in writing within thirty days from the 
date of receipt of the original denial and should include the DOT file 
or reference number assigned to the request and all information and 
arguments relied upon by the person making the request. (Appeals may be 
submitted via facsimile and conventional mail, but not via electronic 
mail.) Such letter should indicate that it is an appeal from a denial of 
a request made under FOIA. The envelope in which a mailed appeal is sent 
should be prominently marked: ``FOIA Appeal.'' If these requirements are 
not met, the twenty-day limit described in Sec. 7.32 will not begin to 
run until the appeal has been identified, or would have been identified 
with the exercise of due diligence, by a DOT employee as an appeal under 
FOIA, and has been received by the appropriate office.
    (e) Whenever the responsible DOT official determines it necessary, 
he/she may require the requestor to furnish additional information, or 
proof of factual allegations, and may order other proceedings 
appropriate in the circumstances; in any case in which a request or 
order is made, DOT's time for responding ceases to count while the 
requestor responds to the request or order. The decision of the 
responsible DOT official as to the availability of the record or the 
appropriateness of a fee waiver or reduction constitutes final agency 
action for the purpose of judicial review.
    (f) The decision of the responsible DOT official not to disclose a 
record under this part or not to grant a request for a fee waiver or 
reduction is considered to be a denial by the Secretary for the purpose 
of 5 U.S.C. 552(a)(4)(B).
    (g) Any final determination by the head of an DOT component not to 
disclose a record under this part, or not to grant a request for a fee 
waiver or reduction, is subject to concurrence by a representative of 
the General Counsel.
    (h) Upon a determination that an appeal will be denied, the 
requestor will be informed in writing of the reasons for the denial of 
the request and the names and titles or positions of each person 
responsible for the determination, and that judicial review of the 
determination is available in the United States District Court for the 
judicial district in which the requestor resides or has his or her 
principal place of business, the judicial district in which the 
requested records are located, or the District of Columbia.



                          Subpart E_Time Limits



Sec. 7.31  Initial determinations.

    An initial determination whether to release a record requested 
pursuant to subpart C of this part will be made within twenty Federal 
working days after the request is received by the appropriate office in 
accordance with Sec. 7.14, except that this time limit may be extended 
by up to ten Federal working days in accordance with Sec. 7.33. The

[[Page 68]]

person making the request will be notified immediately of such 
determination. If the determination is to grant the request, the desired 
record will be made available as promptly as possible. If the 
determination is to deny the request, the person making the request will 
be notified in writing, at the same time he or she is notified of such 
determination, of the reason for the determination, the right of such 
person to appeal the determination, and the name and title of each 
person responsible for the initial determination to deny the request.
    (a) In general. Components ordinarily will respond to requests 
according to their order of receipt.
    (b) Multitrack processing. (1) A component may use two or more 
processing tracks by distinguishing between simple and more complex 
requests based on the amount of work and/or time needed to process the 
request, or on the number of pages involved.
    (2) A component using multitrack processing may provide requesters 
in its slower track(s) with an opportunity to limit the scope of their 
requests in order to qualify for faster processing within the specified 
limits of the component's faster track(s). A component doing so will 
contact the requestor either by telephone, letter, facsimile, or 
electronic mail, whichever is most efficient in each case.
    (c) Expedited processing. (1) Requests and appeals will be taken out 
of order and given expedited treatment whenever a compelling need is 
demonstrated and it is determined that the compelling need involves:
    (i) Circumstances in which the lack of expedited treatment could 
reasonably be expected to pose an imminent threat to the life or 
physical safety of an individual;
    (ii) Requests made by a person primarily engaged in disseminating 
information, with an urgency to inform the public of actual or alleged 
Federal Government activity.
    (2) A request for expedited processing may be made at the time of 
the initial request for records or at any later time. For a prompt 
determination, a request for expedited processing must be received by 
the proper component. Requests must be submitted to the component that 
maintains the records requested.
    (3) A requestor who seeks expedited processing must submit a 
statement, certified to be true and correct to the best of that person's 
knowledge and belief, explaining in detail the basis for requesting 
expedited processing. For example, a requestor within the category in 
paragraph (c)(1)(ii) of this section, if not a full-time member of the 
news media, must establish that he or she is a person whose main 
professional activity or occupation is information dissemination, though 
it need not be his or her sole occupation. A requestor within the 
category in paragraph (c)(1)(ii) of this section also must establish a 
particular urgency to inform the public about the government activity 
involved in the request, beyond the public's right to know about 
government activity generally. The formality of certification may be 
waived as a matter of discretion.
    (4) Within ten calendar days of receipt of a request for expedited 
processing, the proper component will decide whether to grant it and 
will notify the requestor of the decision. If a request for expedited 
treatment is granted, the request will be given priority and will be 
processed as soon as practicable. If a request for expedited processing 
is denied, any appeal of that decision will be acted on expeditiously.



Sec. 7.32  Final determinations.

    (a) A determination with respect to any appeal made pursuant to 
Sec. 7.21 will be made within twenty Federal working days after receipt 
of such appeal except that this time limit may be extended by up to ten 
Federal working days in accordance with Sec. 7.33. The person making 
the request will be notified immediately of such determination pursuant 
to Sec. 7.21.
    (b) In general. Components ordinarily will respond to appeals 
according to their order of receipt.
    (c) Multitrack processing. (1) A component may use two or more 
processing tracks by distinguishing between simple and more complex 
appeals based on the amount of work and/or time needed to process the 
appeal, or on the number of pages involved.

[[Page 69]]

    (2) A component using multitrack processing may provide persons 
making appeals in its slower track(s) with an opportunity to limit the 
scope of their appeals in order to qualify for faster processing within 
the specified limits of the component's faster track(s). A component 
doing so will contact the person making the appeal either by telephone, 
letter, facsimile, or electronic mail, whichever is most efficient in 
each case.
    (d) Expedited processing. (1) An appeal will be taken out of order 
and given expedited treatment whenever a compelling need is demonstrated 
and it is determined that the compelling need involves:
    (i) Circumstances in which the lack of expedited treatment could 
reasonably be expected to pose an imminent threat to the life or 
physical safety of an individual;
    (ii) A request made by a person primarily engaged in disseminating 
information, with an urgency to inform the public of actual or alleged 
Federal Government activity.
    (2) A request for expedited processing may be made at the time of 
the appeal or at any later time. For a prompt determination, a request 
for expedited processing must be received by the proper component, which 
is the component that is processing the appeal for the records 
requested.
    (3) A requestor who seeks expedited processing must submit a 
statement, certified to be true and correct to the best of that person's 
knowledge and belief, explaining in detail the basis for requesting 
expedited processing. For example, a requestor within the category in 
Sec. 7.31(c)(1)(ii), if not a full-time member of the news media, must 
establish that he or she is a person whose main professional activity or 
occupation is information dissemination, though it need not be his or 
her sole occupation. A requestor within the category in Sec. 
7.31(c)(1)(ii) also must establish a particular urgency to inform the 
public about the government activity involved in the request, beyond the 
public's right to know about government activity generally. The 
formality of certification may be waived as a matter of discretion. A 
person who was granted expedited processing under Sec. 7.31 need merely 
certify that the same circumstances apply.
    (4) Within ten calendar days of receipt of a request for expedited 
processing, the proper component will decide whether to grant it and 
will notify the requestor of the decision. If a request for expedited 
treatment is granted, the appeal will be given priority and will be 
processed as soon as practicable. If a request for expedited processing 
of an appeal is denied, no further administrative recourse is available.



Sec. 7.33  Extension.

    (a) In unusual circumstances as specified in this section, the time 
limits prescribed in Sec. 7.31 and Sec. 7.32 may be extended by 
written notice to the person making the request setting forth the 
reasons for such extension and the date on which a determination is 
expected to be dispatched. Such notice may not specify a date that would 
result in a cumulative extension of more than 10 Federal working days 
without providing the requestor an opportunity to modify the request as 
noted in this section. As used in this paragraph, ``unusual 
circumstances'' means, but only to the extent reasonably necessary to 
the proper processing of the particular request:
    (1) The need to search for and collect the requested records from 
field facilities or other establishments that are separate from the 
office processing the request.
    (2) The need to search for, collect, and appropriately examine a 
voluminous amount of separate and distinct records that are demanded in 
a single request; or
    (3) The need for consultation, which will be conducted with all 
practicable speed, with any other agency or DOT component having a 
substantial interest in the determination of the request or among two or 
more components of the agency having substantial subject-matter interest 
therein.
    (b) Where the extension is for more than 10 working days, the DOT 
component will provide the requestor with an

[[Page 70]]

opportunity either to modify the request so that it may be processed 
within the time limits or to arrange an alternative time period with the 
component for processing the request or a modified request.
    (c) Where a component reasonably believes that multiple requests 
submitted by a requestor, or by a group of requesters acting in concert, 
constitute a single request that would otherwise involve unusual 
circumstances, and the requests involve clearly related matters, they 
may be aggregated for the purposes of fees and processing activities. 
Multiple requests involving unrelated matters will not be aggregated.



                             Subpart F_Fees



Sec. 7.41  General.

    (a) This subpart prescribes fees for services performed for the 
public under subparts B and C of this part by DOT.
    (b) All terms defined by FOIA apply to this subpart, and the term 
``hourly rate'' means the actual hourly base pay for a civilian 
employee.
    (c) This subpart applies to all employees of DOT, including those of 
non-appropriated fund activities of the Maritime Administration.
    (d) This subpart does not apply to any special study, special 
statistical compilation, table, or other record requested under 49 
U.S.C. 329(c). The fee for the performance of such a service is the 
actual cost of the work involved in compiling the record. All such fees 
received by DOT in payment of the cost of such work are deposited in a 
separate account administered under the direction of the Secretary, and 
may be used for the ordinary expenses incidental to providing the 
information.
    (e) This subpart does not apply to requests from record subjects for 
records about themselves in DOT systems of records, which are determined 
in accordance with the Privacy Act, as implemented by DOT regulations 
(49 CFR part 10).

[Amdt. 1, 63 FR 38331, July 16, 1998, as amended at 73 FR 33328, June 
12, 2008]



Sec. 7.42  Payment of fees.

    (a) The fees prescribed in this subpart may be paid by check, draft, 
or money order, payable to the DOT component where fees were incurred, 
for deposit in the General Fund of the Treasury of the United States, 
e.g. DOT/FAA.
    (b) Charges may be assessed by DOT for time spent searching for 
requested records even if the search fails to locate records or the 
records located are determined to be exempt from disclosure. In 
addition, if records are requested for commercial use, DOT may assess a 
fee for time spent reviewing any responsive records located to determine 
whether they are exempt from disclosure.
    (c) When it is estimated that the search charges, review charges, 
duplication fees, or any combination of fees that could be charged to 
the requestor will likely exceed US $25, the requestor will be notified 
of the estimated amount of the fees, unless the requestor has indicated 
in advance his or her willingness to pay fees as high as those 
anticipated. In cases where a requestor has been notified that actual or 
estimated fees may amount to more than US $25, the request will be 
deemed not to have been received until the requestor has agreed to pay 
the anticipated total fee. The notice will also inform the requestor how 
to consult with the appropriate DOT officials with the object of 
reformulating the request to meet his or her needs at a lower cost.
    (d) Payment of fees may be required prior to actual duplication or 
delivery of any releasable records to a requestor. However, advance 
payment, i.e., before work is commenced or continued on a request, may 
not be required unless:
    (1) Allowable charges that a requestor may be required to pay are 
likely to exceed US $250; or
    (2) The requestor has failed to pay within 30 days of the billing 
date fees charged for a previous request to any part of DOT.
    (e) When paragraph (d)(1) of this section applies, the requestor 
will be notified of the likely cost and, where he/she has a history of 
prompt payment of FOIA fees, requested to furnish satisfactory assurance 
of full payment of FOIA fees. Where the requestor does not have any 
history of payment, he or she may be required to make advance

[[Page 71]]

payment of any amount up to the full estimated charges.
    (f) When paragraph (d)(2) of this section applies, the requestor 
will be required to demonstrate that the fee has, in fact, been paid or 
to pay the full amount owed, including any applicable interest, late 
handling charges, and penalty charges as discussed in paragraphs (g) and 
(h) of this section. The requestor will also be required to make an 
advance payment of the full amount of the estimated fee before 
processing of a new request or continuation of a pending request is 
begun.
    (g) DOT will assess interest on an unpaid bill starting on the 31st 
day following the day on which the notice of the amount due is first 
mailed to the requestor. Interest will accrue from the date of the 
notice of amount due and will be at the rate prescribed in 31 U.S.C. 
3717. Receipt by DOT of a payment for the full amount of the fees owed 
within 30 calendar days after the date of the initial billing will stay 
the accrual of interest, even if the payment has not been processed.
    (h) If payment of fees charged is not received within 30 calendar 
days after the date the initial notice of the amount due is first mailed 
to the requestor, an administrative charge will be assessed by DOT to 
cover the cost of processing and handling the delinquent claim. In 
addition, a penalty charge will be applied with respect to any principal 
amount of a debt that is more than 90 days past due. Where appropriate, 
other steps permitted by Federal debt collection statutes, including 
disclosure to consumer reporting agencies and use of collection 
agencies, will be used by DOT to encourage payment of amounts overdue.
    (i) Notwithstanding any other provision of this subpart, when the 
total amount of fees that could be charged for a particular request (or 
aggregation of requests) under subpart C of this part, after taking into 
account all services that must be provided free of, or at a reduced, 
charge, is less than US $10.00 DOT will not make any charge for fees.



Sec. 7.43  Fee schedule.

    The rates for manual searching, computer operator/programmer time 
and time spent reviewing records will be calculated based on the grades 
and rates established by the Washington-Baltimore Federal White-Collar 
Pay Schedule or equivalent grades, as follows:
    When performed by employees:

GS-1 through GS-8--Hourly rate of GS-5 step 7 plus 16%
GS-9 through GS-14--Hourly rate of GS-12 step 7 plus 16%
GS-15 and above--Hourly rate of GS-15 step 7 plus 16%

    (a) The standard fee for a manual search to locate a record 
requested under subpart C of this part, including making it available 
for inspection, will be determined by multiplying the searcher's rate as 
calculated from the chart in this section and the time spent conducting 
the search.
    (b) The standard fee for a computer search for a record requested 
under subpart C of this part is the actual cost. This includes the cost 
of operating the central processing unit for the time directly 
attributable to searching for records responsive to a FOIA request and 
the operator/programmer's rate as calculated from the chart for costs 
apportionable to the search.
    (c) The standard fee for review of records requested under subpart C 
of this part is the reviewer's rate as calculated from the chart 
multiplied by the time he/she spent determining whether the requested 
records are exempt from mandatory disclosure.
    (d) The standard fee for duplication of a record requested under 
subpart C of this part is determined as follows:
    (1) Per copy of each page (not larger than 8.5x14 inches) reproduced 
by photocopy or similar means (includes costs of personnel and 
equipment)--US $0.10.
    (2) Per copy prepared by computer such as tapes or printout--actual 
costs, including operator time.
    (3) Per copy prepared by any other method of duplication--actual 
direct cost of production.
    (e) Depending upon the category of requestor, and the use for which 
the records are requested, in some cases the fees computed in accordance 
with the standard fee schedule in paragraph (d) of this section will 
either be reduced or not charged, as prescribed by other provisions of 
this subpart.

[[Page 72]]

    (f) The following special services not required by FOIA may be made 
available upon request, at the stated fees: Certified copies of 
documents, with DOT or DOT component seal (where authorized)--US $4.00; 
or true copy, without seal--US $2.00.



Sec. 7.44  Services performed without charge or at a reduced charge.

    (a) A fee is not to be charged to any requestor making a request 
under subpart C of this part for the first two hours of search time 
unless the records are requested for commercial use. For purposes of 
this subpart, when a computer search is required two hours of search 
time will be considered spent when the hourly costs of operating the 
central processing unit used to perform the search added to the computer 
operator's salary cost (hourly rate plus 16 percent) equals two hours of 
the computer operator's salary costs (hourly rate plus 16 percent).
    (b) A fee is not to be charged for any time spent searching for a 
record requested under subpart C if the records are not for commercial 
use and the requestor is a representative of the news media, an 
educational institution whose purpose is scholarly research, or a non-
commercial scientific institution whose purpose is scientific research.
    (c) A fee is not to be charged for duplication of the first 100 
pages (standard paper, not larger than 8.5x14 inches) of records 
provided to any requestor in response to a request under Subpart C 
unless the records are requested for commercial use.
    (d) A fee is not to be charged to any requestor under subpart C to 
determine whether a record is exempt from mandatory disclosure unless 
the record is requested for commercial use. A review charge may not be 
charged except with respect to an initial review to determine the 
applicability of a particular exemption to a particular record or 
portion of a record. A review charge may not be assessed for review at 
the administrative appeal level. When records or portions of records 
withheld in full under an exemption that is subsequently determined not 
to apply are reviewed again to determine the applicability of other 
exemptions not previously considered, this is considered an initial 
review for purposes of assessing a review charge.
    (e) Documents will be furnished without charge or at a reduced 
charge if the official having initial denial authority determines that 
disclosure of the information is in the public interest because it is 
likely to contribute significantly to public understanding of the 
operations or activities of the government and is not primarily in the 
commercial interest of the requestor.
    (f) Factors to be considered by DOT officials authorized to 
determine whether a waiver or reduction of fees will be granted include:
    (1) Whether the subject matter of the requested records concerns the 
operations or activities of the Federal government;
    (2) Whether the disclosure is likely to contribute to an 
understanding of Federal government operations or activities;
    (3) Whether disclosure of the requested information will contribute 
to the understanding of the public at large, as opposed to the 
individual understanding of the requestor or a narrow segment of 
interested persons;
    (4) Whether the contribution to public understanding of Federal 
government operations or activities will be significant;
    (5) Whether the requestor has a commercial interest that would be 
furthered by the requested disclosure; and
    (6) Whether the magnitude of any identified commercial interest to 
the requestor is sufficiently large in comparison with the public 
interest in disclosure that disclosure is primarily in the commercial 
interest of the requestor.
    (g) Documents will be furnished without charge or at a reduced 
charge if the official having initial denial authority determines that 
the request concerns records related to the death of an immediate family 
member who was, at the time of death, a DOT employee.
    (h) Documents will be furnished without charge or at a reduced 
charge if the official having initial denial authority determines that 
the request is by the victim of a crime who seeks the record

[[Page 73]]

of the trial at which the requestor testified.

[Amdt. 1, 63 FR 38331, July 16, 1998, as amended at 73 FR 33328, June 
12, 2008]



Sec. 7.45  Transcripts.

    Transcripts of hearings or oral arguments are available for 
inspection. Where transcripts are prepared by a nongovernmental 
contractor, and the contract permits DOT to handle the reproduction of 
further copies, Sec. 7.43 applies. Where the contract for transcription 
services reserves the sales privilege to the reporting service, any 
duplicate copies must be purchased directly from the reporting service.



Sec. 7.46  Alternative sources of information.

    In the interest of making documents of general interest publicly 
available at as low a cost as possible, alternative sources will be 
arranged whenever possible. In appropriate instances, material that is 
published and offered for sale may be obtained from the Superintendent 
of Documents, U.S. Government Printing Office, Washington, DC 20402; 
U.S. Department of Commerce's National Technical Information Service 
(NTIS), Springfield, Virginia 22151; or National Audio-Visual Center, 
National Archives and Records Administration, Capital Heights, MD 20743-
3701.



PART 8_CLASSIFIED INFORMATION: CLASSIFICATION/DECLASSIFICATION/ACCESS--
Table of Contents



                            Subpart A_General

Sec.
8.1 Scope.
8.3 Applicability.
8.5 Definitions.
8.7 Spheres of responsibility.

        Subpart B_Classification/Declassification of Information

8.9 Information Security Review Committee.
8.11 Authority to classify information.
8.13 Authority to downgrade or declassify.
8.15 Mandatory review for classification.
8.17 Classification challenges.
8.19 Procedures for submitting and processing requests for 
          classification reviews.
8.21 Burden of proof.
8.23 Classified information transferred to the Department of 
          Transportation.

                     Subpart C_Access to Information

8.25 Personnel Security Review Board.
8.27 Public availability of declassified information.
8.29 Access by historical researchers and former Presidential 
          appointees.
8.31 Industrial security.

    Authority: E. O. 10450, 3 CFR, 1949-1953 Comp., p. 936; E. O. 12829, 
3 CFR, 1993 Comp., p. 570; E. O. 12958, 3 CFR, 1995 Comp., p. 333; E. O. 
12968, 3 CFR, 1995 Comp., p. 391.

    Source: 62 FR 23661, May 1, 1997, unless otherwise noted.



                            Subpart A_General



Sec. 8.1  Scope.

    This part sets forth procedures for the classification, 
declassification, and availability of information that must be protected 
in the interest of national security, in implementation of Executive 
Order 12958 of April 17, 1995, ``Classified National Security 
Information;'' and for the review of decisions to revoke, or not to 
issue, national security information clearances, or to deny access to 
classified information, under Executive Order 12968 of August 2, 1995, 
``Access to National Security Information''.



Sec. 8.3  Applicability.

    This part applies to all elements of the Department of 
Transportation.



Sec. 8.5  Definitions.

    As used in this part:
    Classification means the act or process by which information is 
determined to be classified information.
    Classification levels means the following three levels at which 
information may be classified:
    (a) Top secret. Information that requires the highest degree of 
protection, and the unauthorized disclosure of which could reasonably be 
expected to cause exceptionally grave damage to the national security 
that the original classification authority is able to identify or 
describe.
    (b) Secret. Information that requires a substantial degree of 
protection, and the unauthorized disclosure of which could reasonably be 
expected to cause

[[Page 74]]

serious damage to the national security that the original classification 
authority is able to identify or describe.
    (c) Confidential. Information that requires protection and the 
unauthorized disclosure of which could reasonably be expected to cause 
damage to the national security that the original classification 
authority is able to identify or describe.
    Classified information or ``classified national security 
information'' means information that has been determined under Executive 
Order 12958, or any predecessor or successor order, to require 
protection against unauthorized disclosure, and is marked to indicate 
its classified status when in documentary form.
    Clearance means that an individual is eligible, under the standards 
of Executive Orders 10450 and 12968 and appropriate DOT regulations, for 
access to classified information.
    Damage to the national security means harm to the national defense 
or foreign relations of the United States from the unauthorized 
disclosure of information, to include the sensitivity, value, and 
utility of that information.
    Declassification means the authorized change in the status of 
information from classified information to unclassified information.
    Downgrading means a determination by a declassification authority 
that information classified and safeguarded at a specific level shall be 
classified and safeguarded at a lower level.
    Information means any knowledge that can be communicated, or 
documentary material, regardless of its physical form or 
characteristics, that is owned by, produced by or for, or is under the 
control of the United States Government. ``Control'' means the authority 
of the agency that originates information, or its successor in function, 
to regulate access to the information.
    Mandatory declassification review means the review for 
declassification of classified information in response to a request for 
declassification that qualifies under Section 3.6 of Executive Order 
12958.
    Original classification means an initial determination that 
information requires, in the interest of national security, protection 
against unauthorized disclosure.
    Original classification authority means an individual authorized in 
writing, either by the President or by agency heads or other officials 
designated by the President, to classify information in the first 
instance.



Sec. 8.7  Spheres of responsibility.

    (a) Pursuant to Section 5.6(c) of Executive Order 12958, and to 
section 6.1 of Executive Order 12968, the Assistant Secretary for 
Administration is hereby designated as the senior agency official of the 
Department of Transportation with assigned responsibilities to assure 
effective compliance with and implementation of Executive Order 12958, 
Executive Order 12968, Office of Management and Budget Directives, the 
regulations in this part, and related issuances.
    (b) In the discharge of these responsibilities, the Assistant 
Secretary for Administration will be assisted by the Director of 
Security and Administrative Management, who, in addition to other 
actions directed by this part, will evaluate the overall application of 
and adherence to the security policies and requirements prescribed in 
this part and who will report his/her findings and recommendations to 
the Assistant Secretary for Administration, heads of Departmental 
elements, and, as appropriate, to the Secretary.
    (c) Secretarial Officers and heads of Departmental elements will 
assure that the provisions in this part are effectively administered, 
that adequate personnel and funding are provided for this purpose, and 
that corrective actions that may be warranted are taken promptly.



        Subpart B_Classification/Declassification of Information



Sec. 8.9  Information Security Review Committee.

    (a) There is hereby established a Department of Transportation 
Information Security Review Committee, which will have authority to:

[[Page 75]]

    (1) Act on all suggestions and complaints not otherwise resolved 
with respect to the Department's administration of Executive Order 12958 
and implementing directives, including those regarding 
overclassification, failure to declassify, or delay in declassifying;
    (2) Act on appeals of requests for classification reviews, and 
appeals of requests for records under 5 U.S.C. 552 (Freedom of 
Information Act) when the initial, and proposed final, denials are based 
on continued classification of the record; and
    (3) Recommend to the Secretary, when necessary, appropriate 
administrative action to correct abuse or violation of any provision of 
Executive Order 12598 and implementing directives.
    (b) The Information Security Review Committee will be composed of 
the Assistant Secretary for Administration, who will serve as Chair; the 
General Counsel; and the Director of Security and Administrative 
Management. When matters affecting a particular Departmental agency are 
at issue, the Associate Administrator for Administration for that 
agency, or the Chief of Staff for the U.S. Coast Guard, as the case may 
be, will participate as an ad hoc member, together with the Chief 
Counsel of that agency. Any regular member may designate a 
representative with full power to serve in his/her place.
    (c) In carrying out its responsibilities to review decisions to 
revoke or not to issue clearances, or to deny access to classified 
information, the Committee will establish whatever procedures it deems 
fit.



Sec. 8.11  Authority to classify information.

    (a) Executive Order 12958 confers upon the Secretary of 
Transportation the authority to originally classify information as 
SECRET or CONFIDENTIAL with further authorization to delegate this 
authority.
    (b) The following delegations of authority originally to classify 
information as ``Secret'' or ``Confidential'', which may not be 
redelegated, are hereby made:
    (1) Office of the Secretary of Transportation. The Deputy Secretary; 
Assistant Secretary for Administration; Director of Intelligence and 
Security; Director of Security and Administrative Management.
    (2) Federal Aviation Administration. Administrator; Assistant 
Administrator for Security and Hazardous Materials.
    (3) Maritime Administration. Administrator.
    (c) Although the delegations of authority set out in paragraph (b) 
of this section are expressed in terms of positions, the authority is 
personal and is invested only in the individual occupying the position. 
The authority may not be exercised ``by direction of'' a designated 
official. The formal appointment or assignment of an individual to one 
of the identified positions or a designation in writing to act in the 
absence of one of these officials, however, conveys the authority 
originally to classify information as ``SECRET''.
    (d) Previous delegations and redelegations of authority within the 
Department of Transportation originally to classify information are 
hereby rescinded.

[62 FR 23661, May 1, 1997, as amended at 76 FR 19708, Apr. 8, 2011]



Sec. 8.13  Authority to downgrade or declassify.

    Information originally classified by the Department may be 
specifically downgraded or declassified by either the official 
authorizing the original classification, if that official is still 
serving in the same position, the originator's current successor in 
function, a supervisory official of either, officials delegated 
declassification authority in writing by the Secretary, or by the 
Departmental Information Security Review Committee.



Sec. 8.15  Mandatory review for classification.

    (a) All information classified by the Department of Transportation 
under Executive Order 12958 or predecessor orders shall be subject to a 
review for declassification if:
    (1) The request for review describes the information with sufficient 
specificity to enable its location with a reasonable amount of effort; 
and

[[Page 76]]

    (2) The information has not been reviewed for declassification 
within the prior two years. If the information has been reviewed within 
the prior two years, or the information is the subject of pending 
litigation, the requestor will be informed of this fact, and of the 
Department's decision not to declassify the information and of his/her 
right to appeal the Department's decision not to declassify the 
information to the Interagency Security Classification Appeals Panel.
    (b) All information reviewed for declassification because of a 
mandatory review will be declassified if it does not meet the standards 
for classification in Executive Order 12958. The information will then 
be released unless withholding is otherwise authorized and warranted 
under applicable law.



Sec. 8.17  Classification challenges.

    (a) Authorized holders of information classified by the Department 
of Transportation who, in good faith, believe that its classification 
status is improper are encouraged and expected to challenge the 
classification status of the information before the Departmental 
Information Security Review Committee.
    (1) No individual will be subject to retribution for bringing such a 
challenge; and
    (2) Each individual whose challenge is denied will be advised that 
he/she may appeal to the Interagency Security Classification Appeals 
Panel established by section 5.4 of Executive Order 12958.
    (b) This classification challenge provision is not intended to 
prevent an authorized holder of information classified by the Department 
of Transportation from informally questioning the classification status 
of particular information. Such information inquiries should be 
encouraged as means to resolve classification concerns and reduce the 
administrative burden of formal challenges.



Sec. 8.19  Procedures for submitting and processing requests for
classification reviews.

    (a) The Director of Security and Administrative Management is hereby 
designated as the official to whom a member of the public or another 
department or agency should submit a request for a classification review 
of classified information produced by or under the primary cognizance of 
the Department. Elements of the Department that receive a request 
directly will immediately notify the Director.
    (b) If the request for classification review involves material 
produced by or under the cognizance of the U.S. Coast Guard or the 
Federal Aviation Administration, the Director will forward the request 
to the headquarters security staff of the element concerned for action. 
If the request involves material produced by other Departmental 
elements, the Director will serve as the office acting on the request.
    (c) The office acting on the request will:
    (1) Immediately acknowledge receipt of the request and provide a 
copy of the correspondence to the Director. If a fee for search of 
records is involved pursuant to 49 CFR Part 7, the requester will be so 
notified;
    (2) Conduct a security review, which will include consultation with 
the office that produced the material and with source authorities when 
the classification, or exemption of material from automatic 
declassification, was based upon determinations by an original 
classifying authority; and
    (3) Assure that the requester is notified of the determination 
within 30 calendar days or given an explanation as to why further time 
is necessary, and provide a copy of the notification to the Director.
    (d) If the determination reached is that continued classification is 
required, the notification to the requester will include, whenever 
possible, a brief statement as to why the requested material cannot be 
declassified. The notification will also advise the requester of the 
right to appeal the determination to the Departmental Information 
Security Review Committee. A requester who wishes to appeal a 
classification review decision, or who has not been notified of a 
decision after 60 calendar days, may submit an appeal to the 
Departmental Information Security Review Committee.

[[Page 77]]

    (e) If the determination reached is that continued classification is 
not required, the information will be declassified and the material 
remarked accordingly. The office acting on the request will then refer 
the request to the office originating the material or higher authority 
to determine if it is otherwise withholdable from public release under 
the Freedom of Information Act (5 U.S.C. 552) and the Department's 
implementing regulations (49 CFR Part 7).
    (1) If the material is available under the Freedom of Information 
Act, the requester will be advised that the material has been 
declassified and is available. If the request involves the furnishing of 
copies and a fee is to be collected, the requester will be so advised 
pursuant to 49 CFR Part 7, Departmental regulations implementing the 
Freedom of Information Act.
    (2) If the material is not available under the Freedom of 
Information Act, the requester will be advised that the material has 
been declassified but that the record is unavailable pursuant to the 
Freedom of Information Act, and that the provisions concerning 
procedures for reconsidering decisions not to disclose records, 
contained in 49 CFR Part 7, apply.
    (f) Upon receipt of an appeal from a classification review 
determination based upon continued classification, the Departmental 
Information Security Review Committee will acknowledge receipt 
immediately and act on the matter within 30 calendar days. With respect 
to information originally classified by or under the primary cognizance 
of the Department, the Committee, acting for the Secretary, has 
authority to overrule previous determinations in whole or in part when, 
in its judgment, continued protection in the interest of national 
security is no longer required. When the classification of the material 
produced in the Department is based upon a classification determination 
made by another department or agency, the Committee will immediately 
consult with its counterpart committee for that department or agency.
    (1) If it is determined that the material produced in the Department 
requires continued classification, the requester will be so notified and 
advised of the right to appeal the decision to the Interagency 
Classification Review Committee.
    (2) If it is determined that the material no longer requires 
classification, it will be declassified and remarked. The Committee will 
refer the request to the General Counsel, or to the head of the 
Departmental agency concerned, as the case may be, to determine if the 
material is otherwise withholdable from the public under the Freedom of 
Information Act (5 U.S.C. 552) and Departmental regulations, (49 CFR 
Part 7), and paragraphs (f)(1) and (2) of this section will be followed. 
A copy of the response to the requester will be provided to the 
Committee.
    (g) Requests for a classification review of material more than 25 
years old will be referred directly to the Archivist of the United 
States and the requester will be notified of the referral. In this 
event, the provisions of this section apply.
    (h) Whenever a request is insufficient in the description of the 
record sought, the requester will be asked to limit his request to 
records that are reasonably obtainable. If, in spite of these steps, the 
requester does not describe the records with sufficient particularity, 
or the record requested cannot be obtained with a reasonable amount of 
effort, the requester will be notified of the reasons why the request is 
denied and of his/her right to appeal the determination to the 
Departmental Information Security Review Committee.



Sec. 8.21  Burden of proof.

    For the purpose of determinations to be made under Sec. Sec. 8.13, 
8.15, and 8.17, the burden of proof is on the originating Departmental 
agency to show that continued classification is warranted.



Sec. 8.23  Classified information transferred to the Department of 
Transportation.

    (a) Classified information officially transferred to the Department 
in conjunction with a transfer of function, and not merely for storage 
purposes, will be considered to have been originated by the Department.
    (b) Classified information in the custody of the Department 
originated by a

[[Page 78]]

department or agency that has ceased to exist and for whom there is no 
successor agency will be deemed to have been originated by the 
Department. This information may be declassified or downgraded by the 
Department after consultation with any other agency that has an interest 
in the subject matter of the information. Such agency will be allowed 30 
calendar days in which to express an objection, if it so desires, before 
action is taken. A difference of opinion that cannot be resolved will be 
referred to the Departmental Information Security Review Committee, 
which will consult with its counterpart committee for the other agency.
    (c) Classified information transferred to the National Archives and 
Records Administration (NARA) will be declassified or downgraded by the 
Archivist of the United States in accordance with Executive Order 12958, 
Departmental classification guides, and any existing procedural 
agreement between NARA and the Department. The Department will take all 
reasonable steps to declassify information contained in records 
determined to have permanent historical value before they are 
accessioned in NARA.
    (d) To the extent practicable, the Department will adopt a system of 
records management that will facilitate the public release of documents 
at the time such documents are declassified under the provisions of this 
part for automatic declassification. To the maximum extent possible 
without destroying the integrity of the Department's files, all such 
material will be segregated or set aside for public release upon 
request. The Department will cooperate with the Archivist in efforts to 
establish a Government-wide database of information that has been 
declassified.



                     Subpart C_Access to Information



Sec. 8.25  Personnel Security Review Board.

    (a) There is hereby established a Department of Transportation 
Personnel Security Review Board, which will, on behalf of the Secretary 
of Transportation (except in any case in which the Secretary personally 
makes the decision), make the administratively final decision on an 
appeal arising in any part of the Department from:
    (1) A decision not to grant access to classified information;
    (2) A decision to revoke access to classified information; or
    (3) A decision under Sec. 8.29 to deny access to classified 
information.
    (b) The Personnel Security Review Board will be composed of:
    (1) Two persons appointed by the Assistant Secretary for 
Administration: one from the Office of Personnel and Training, and one, 
familiar with personnel security adjudication, from the Office of 
Security and Administrative Management, who will serve as Chair;
    (2) One person appointed by the General Counsel, who, in addition to 
serving as a member of the Board, will provide to the Board whatever 
legal services it may require; and
    (3) One person appointed by each of the Commandant of the Coast 
Guard and the Federal Aviation Administrator.
    (4) Any member may designate a representative, meeting the same 
criteria as the member, with full power to serve in his/her place.
    (c) In carrying out its responsibilities to review final decisions 
to revoke or deny access to classified information, the Board will 
establish whatever procedures it deems fit.



Sec. 8.27  Public availability of declassified information.

    (a) It is a fundamental policy of the Department to make information 
available to the public to the maximum extent permitted by law. 
Information that is declassified for any reason loses its status as 
material protected in the interest of national security. Accordingly, 
declassified information will be handled in every respect on the same 
basis as all other unclassified information. Declassified information is 
subject to the Departmental public information policies and procedures, 
with particular reference to the Freedom of Information Act (5 U.S.C. 
552) and implementing Departmental regulations (49 CFR Part 7).
    (b) In furtherance of this policy, all classified material produced 
after June 1, 1972 that is of sufficient historical or

[[Page 79]]

other value to warrant preservation as permanent records in accordance 
with appropriate records administrative standards, and that becomes 
declassified, will be systematically reviewed prior to the end of each 
calendar year for the purpose of making the material publicly available. 
To the maximum extent possible without destroying the integrity of the 
Department's files, all such material will be segregated or set aside 
for public release upon request.



Sec. 8.29  Access by historical researchers and former Presidential 
appointees.

    (a) Historical researchers. (1) Persons outside the executive branch 
who are engaged in historical research projects may have access to 
classified information provided that:
    (i) Access to the information is clearly consistent with the 
interests of national security; and
    (ii) The person to be granted access is trustworthy.
    (2) The provisions of this paragraph apply only to persons who are 
conducting historical research as private individuals or under private 
sponsorship and do not apply to research conducted under Government 
contract or sponsorship. The provisions are applicable only to 
situations where the classified information concerned, or any part of 
it, was originated by the Department or its contractors, or where the 
information, if originated elsewhere, is in the sole custody of the 
Department. Any person requesting access to material originated in 
another agency or to information under the exclusive jurisdiction of the 
National Archives and Records Administration (NARA) will be referred to 
the other agency or to NARA, as appropriate.
    (3) When a request for access to classified information for 
historical research is received, it will be referred to the appropriate 
local security office. That office will obtain from the applicant 
completed Standard Form 86, Questionnaire for National Security 
Positions, in triplicate, and Standard Form 87, Fingerprint Chart; a 
statement in detail to justify access, including identification of the 
kind of information desired and the organization or organizations, if 
any, sponsoring the research; and a written statement (signed, dated, 
and witnessed) with respect to the following:
    (i) That the applicant will abide by regulations of the Department:
    (A) To safeguard classified information; and
    (B) To protect information that has been determined to be 
proprietary or privileged and is therefore not eligible for public 
dissemination.
    (ii) That the applicant understands that any classified information 
that the applicant receives affects the security of the United States.
    (iii) That the applicant acknowledges an obligation to safeguard 
classified information or privileged information of which the applicant 
gains possession or knowledge as a result of the applicant's access to 
files of the Department.
    (iv) That the applicant agrees not to reveal to any person or agency 
any classified information or privileged information obtained as a 
result of the applicant's access except as specifically authorized in 
writing by the Department, and further agrees that the applicant shall 
not use the information for purposes other than those set forth in the 
applicant's application.
    (v) That the applicant agrees to authorize a review of the 
applicant's notes and manuscript for the sole purpose of determining 
that no classified information or material is contained therein.
    (vi) That the applicant understands that failure to abide by 
conditions of this statement will constitute sufficient cause for 
canceling the applicant's access to classified information and for 
denying the applicant any future access, and may subject the applicant 
to criminal provisions of Federal law as referred to in this statement.
    (vii) That the applicant is aware and fully understands that title 
18, United States Code, Crimes and Criminal Procedures, and the Internal 
Security Act of 1950, as amended, title 50, United States Code, 
prescribe, under certain circumstances, criminal penalties for the 
unauthorized disclosure of information respecting the national security, 
and for loss, destruction, or compromise of such information.

[[Page 80]]

    (viii) That this statement is made to the U.S. Government to enable 
it to exercise its responsibilities for the protection of information 
affecting the national security.
    (ix) That the applicant understands that any material false 
statement that the applicant makes knowingly and willfully will subject 
the applicant to the penalties of 18 U.S.C. 1001.
    (4) The security office will process the forms in the same manner as 
specified for a preappointment national agency check for a critical-
sensitive position. Upon receipt of the completed national agency check, 
the security office, if warranted, may determine that access by the 
applicant to the information will be clearly consistent with the 
interests of national security and the person to be granted access is 
trustworthy. If deemed necessary, before making its determination, the 
office may conduct or request further investigation. Before access is 
denied in any case, the matter will be referred through channels to the 
Director of Security and Administrative Management for review and 
submission to the Personnel Security Review Board for final review.
    (5) If access to TOP SECRET or intelligence or communications 
security information is involved a special background investigation is 
required. However, this investigation will not be requested until the 
matter has been referred through channels to the Director of Security 
and Administrative Management for determination as to adequacy of the 
justification and the consent of other agencies as required.
    (6) When it is indicated that an applicant's research may extend to 
material originating in the records of another agency, approval must be 
obtained from the other agency prior to the grant of access.
    (7) Approvals for access will be valid for the duration of the 
current research project but no longer than 2 years from the date of 
issuance, unless renewed. If a subsequent request for similar access is 
made by the individual within one year from the date of completion of 
the current project, access may again be granted without obtaining a new 
National Agency Check. If more than one year has elapsed, a new National 
Agency Check must be obtained. The local security office will promptly 
advise its headquarters security staff of all approvals of access 
granted under the provisions of this section.
    (8) An applicant may be given access only to that classified 
information that is directly pertinent to the applicant's approved 
project. The applicant may review files or records containing classified 
information only in offices under the control of the Department. 
Procedures must be established to identify classified material to which 
the applicant is given access. The applicant must be briefed on local 
procedures established to prevent unauthorized access to the classified 
material while in the applicant's custody, for the return of the 
material for secure storage at the end of the daily working period, and 
for the control of the applicant's notes until they have been reviewed. 
In addition to the security review of the applicant's manuscript, the 
manuscript must be reviewed by appropriate offices to assure that it is 
technically accurate insofar as material obtained from the Department is 
concerned, and is consistent with the Department's public release 
policies.
    (b) Former Presidential appointees. Persons who previously occupied 
policymaking positions to which they were appointed by the President may 
be granted access to classified information or material that they 
originated, reviewed, signed, or received, while in public office, 
provided that:
    (1) It is determined that such access is clearly consistent with the 
interests of national security; and
    (2) The person agrees to safeguard the information, to authorize a 
review of the person's notes to assure that classified information is 
not contained therein, and that the classified information will not be 
further disseminated or published.



Sec. 8.31  Industrial security.

    (a) Background. The National Industrial Security Program was 
established by Executive Order 12829 of January 6, 1993 for the 
protection of information classified pursuant to Executive Order 12356 
of April 2, 1982, National Security Information, or its predecessor or 
successor orders, and the Atomic Energy

[[Page 81]]

Act of 1954, as amended. The Secretary of Defense serves as the 
Executive Agent for inspecting and monitoring contractors, licensees, 
grantees, and certificate holders that require or will require access 
to, or that store or will store, classified information, and for 
determining the eligibility for access to classified information of 
contractors, licensees, certificate holders, and grantees, and their 
respective employees.
    (b) Implementing regulations. The Secretary of Transportation has 
entered into agreement for the Secretary of Defense to render industrial 
security services for the Department of Transportation. Regulations 
prescribed by the Secretary of Defense to fulfill the provisions of 
Executive Order 12829 have been extended to protect release of 
classified information for which the Secretary of Transportation is 
responsible. Specifically, this regulation is DOD 5220.22-M, National 
Industrial Security Program Operating Manual. This regulation is 
effective within the Department of Transportation, which functions as a 
User Agency as prescribed in the regulation. Appropriate security 
staffs, project personnel, and contracting officers assure that actions 
required by the regulation are taken.



PART 9_TESTIMONY OF EMPLOYEES OF THE DEPARTMENT AND PRODUCTION OF 
RECORDS IN LEGAL PROCEEDINGS--Table of Contents



Sec.
9.1 Purpose.
9.2 Applicability.
9.3 Definitions.
9.5 General prohibition of production or disclosure in legal 
          proceedings.
9.7 Testimony by employees before the Department or in other legal 
          proceedings in which the United States is a party.
9.9 Legal proceedings between private litigants: General rules.
9.11 Legal proceedings between private litigants: Demands.
9.13 Legal proceedings between private litigants: Procedures to request 
          records.
9.15 Legal proceedings between private litigants: Procedures to request 
          testimony.
9.17 Legal proceedings between private litigants: Procedures for taking 
          testimony.
9.19 Acceptance of service on behalf of Secretary.

    Authority: 5 U.S.C. 301; 45 U.S.C. 41-42; 49 U.S.C. 322; 49 U.S.C. 
504(f); 23 U.S.C. 409.

    Source: 58 FR 6724, Feb. 2, 1993, unless otherwise noted.



Sec. 9.1  Purpose.

    (a) This part sets forth procedures governing the testimony of an 
employee in legal proceedings in which the United States is a party. It 
also sets forth procedures to be followed when an employee is issued a 
subpoena, order or other demand (collectively referred to in this part 
as a ``demand'') by a court or other competent authority, or is 
requested by a private litigant, to provide testimony or produce records 
concerning information acquired in the course of performing official 
duties or because of the employee's official status. It also prescribes 
the policies and procedures of the Department with respect to the 
acceptance of service of legal process and pleadings in legal 
proceedings involving the Department.
    (b) The purposes of this part are to:
    (1) Conserve the time of employees for conducting official business;
    (2) Minimize the possibility of involving the Department in 
controversial issues not related to its mission;
    (3) Maintain the impartiality of the Department among private 
litigants;
    (4) Avoid spending the time and money of the United States for 
private purposes; and
    (5) To protect confidential, sensitive information and the 
deliberative processes of the Department.
    (c) Agency counsel, in his or her discretion, may permit an 
exception from any requirement in this part. The exception may be 
granted only when the deviation will not interfere with matters of 
operational or military necessity, and when agency counsel determines 
that:
    (1) It is necessary to prevent a miscarriage of justice;
    (2) The Department has an interest in the decision that may be 
rendered in the legal proceeding; or
    (3) The exception is in the best interest of the Department or the 
United States.

For Office of Inspector General employees and documents, the Inspector

[[Page 82]]

General, in conjunction with the General Counsel of the Department, may 
permit an exception from any requirement of this part if the Inspector 
General determines, based on the Inspector General Act of 1978, as 
amended, that application of the requirement would be inappropriate.



Sec. 9.2  Applicability.

    This part applies to the testimony of an employee in legal 
proceedings in which the United States is a party. It also applies in 
legal proceedings between private litigants to requests or demands for 
testimony or records concerning information acquired in the course of an 
employee performing official duties or because of the employee's 
official status. This part does not apply to any legal proceeding in 
which an employee is to testify as to facts or events that are in no way 
related to the employee's official duties or the functions of the 
Department. Nor does it apply to Congressional demands for testimony or 
documents.



Sec. 9.3  Definitions.

    For purposes of this part:
    Department means the Department of Transportation (DOT), including 
the Office of the Secretary (which encompasses the Office of the 
Inspector General) and the following operating administrations while 
they are part of DOT:
    (a) The U.S. Coast Guard.
    (b) The Federal Aviation Administration.
    (c) The Federal Highway Administration.
    (d) The Federal Railroad Administration.
    (e) The Federal Transit Administration.
    (f) The St. Lawrence Seaway Development Corporation.
    (g) The National Highway Traffic Safety Administration.
    (h) The Maritime Administration.
    (i) The Research and Special Programs Administration.
    (j) Any DOT operating administration established after the effective 
date of this part.
    Legal proceeding means any case or controversy pending before any 
federal, state, or local court (including grand jury proceedings), any 
administrative proceeding pending before any federal, state, or local 
agency, or any legislative proceeding pending before any state or local 
agency.
    Legal proceeding between private litigants means any legal 
proceeding in which neither the Department of Transportation nor the 
United States (including any federal agency or officer of the United 
States in his or her official capacity) is a party.
    Employee of the Department or Employee means any current or former 
officer or employee of the Department; any active duty, retired, or 
former officer or enlisted member of the Coast Guard; or any current or 
former contractor (including any corporation or other entity and any 
employee or subcontractor).
    Agency counsel means the General Counsel of the Department or the 
Chief Counsel of any operating administration of the Department 
concerned, any person to whom the General Counsel or Chief Counsel has 
delegated authority, or any person who is authorized to represent the 
Department in a specific legal proceeding.
    Testimony means any written or oral statement by a witness, 
including depositions, answers to interrogatories, affidavits, 
declarations, and statements at a hearing or trial.



Sec. 9.5  General prohibition of production or disclosure in legal 
proceedings.

    No employee of the Department may provide testimony or produce any 
material contained in the files of the Department, or disclose any 
information relating to, or based upon, material contained in the files 
of the Department, or disclose any information or produce any material 
acquired as part of the performance of that employee's official duties 
or because of that employee's official status unless authorized in 
accordance with this part, or by other applicable law.



Sec. 9.7  Testimony by employees before the Department or in other
legal proceedings in which the United States is a party.

    In any legal proceeding before the Department or in which the United

[[Page 83]]

States (including any federal agency or officer of the United States) is 
a party:
    (a) Agency counsel shall arrange for an employee to testify as a 
witness for the United States whenever the attorney representing the 
United States requests it.
    (b) An employee may testify for the United States both as to facts 
within the employee's personal knowledge and as an expert or opinion 
witness. Except as provided in paragraph (c) of this section, an 
employee may not testify as an expert or opinion witness, with regard to 
any matter arising out of the employee's official duties or the 
functions of the Department, for any party other than the United States 
in any legal proceeding in which the United States is a party. An 
employee who receives a demand to testify on behalf of a party other 
than the United States may testify as to facts within the employee's 
personal knowledge, provided that the testimony be subject to the prior 
approval of agency counsel and to the Federal Rules of Civil Procedure 
and any applicable claims of privilege.
    (c) An employee may testify as an expert or opinion witness on 
behalf of an officer or enlisted member of the Coast Guard in any legal 
proceeding conducted by the Coast Guard.



Sec. 9.9  Legal proceedings between private litigants: General rules.

    In legal proceedings between private litigants:
    (a) The proper method for obtaining testimony or records from an 
employee is to submit a request to agency counsel as provided in 
Sec. Sec. 9.13 and 9.15 of this part, not to serve a demand on the 
employee. Whenever, in a legal proceeding between private litigants, an 
employee is served with a demand, or receives a request, to testify in 
that employee's official capacity or produce records, the employee shall 
immediately notify agency counsel.
    (b) If authorized to testify pursuant to these rules, an employee 
may testify only as to facts within that employee's personal knowledge 
with regard to matters arising out of his or her official duties.
    (1) When the proceeding arises from an accident, an employee may 
testify only as to personally known facts, not reasonably available from 
other sources, observed by the employee or uncovered during the 
employee's investigation of the accident or observed by the employee 
even if he or she did not investigate the accident. The employee shall 
decline to testify regarding facts beyond the scope of his or her 
official duties.
    (2) The employee shall not testify to facts that are contained in a 
report, or any part of a report, unless the employee has obtained 
permission from agency counsel to disclose the information.
    (3) The employee shall not disclose confidential or privileged 
information unless the employee has obtained permission from agency 
counsel to disclose the information.
    (4) The employee shall not testify as to facts when agency counsel 
determines that the testimony would not be in the best interest of the 
Department or the United States if disclosed.
    (c) An employee shall not testify as an expert or opinion witness 
with regard to any matter arising out of the employee's official duties 
or the functions of the Department. An employee who is asked questions 
that call for expert or opinion testimony shall decline to answer on the 
grounds that it is forbidden by this part. Agency counsel shall advise 
the employee on how to proceed if the presiding officer directs the 
employee to provide expert or opinion testimony.
    (d) An employee shall not provide testimony at a trial or hearing. 
An employee's testimony shall be limited to a single deposition, 
affidavit, or set of interrogatories, concerning the circumstances (e.g. 
an accident) from which the proceeding arose. Where multiple legal 
proceedings concerning those circumstances are pending, or can occur, it 
shall be the duty of the private litigant seeking the testimony to 
ascertain, to the extent feasible, the identities of all parties, or 
potential parties, to those proceedings and notify them that a 
deposition has been granted and that they have the opportunity to 
participate. The private litigant shall submit an affidavit or 
certification describing the extent of the search for parties and 
potential parties

[[Page 84]]

and listing the names of the parties and potential parties notified.
    (e) Where an employee has already provided testimony, any party 
wishing to obtain further testimony from that employee concerning the 
same matter or occurrence, whether in the same or a different private 
legal proceeding, may submit a request to agency counsel to waive the 
restrictions of paragraph (d) of this section. The request shall, in 
addition to meeting the requirements of Sec. 9.15 of this part, state 
why the requester should be permitted to gather additional information 
despite not having previously requested the information when it had an 
opportunity to do so, and why the additional testimony is now required 
and the prior testimony or previously supplied documents are 
insufficient.



Sec. 9.11  Legal proceedings between private litigants: Demands.

    (a) If an employee receives a demand that has not been validly 
issued or served, agency counsel may instruct the employee not to comply 
with the demand.
    (b) If an employee receives a demand (validly issued and served) to 
testify or produce records, agency counsel, in his or her discretion, 
may grant the employee permission to testify or produce records only if 
the purposes of this part are met or agency counsel determines that an 
exception is appropriate.
    (c) If a demand is issued to an employee, agency counsel shall 
contact the requester of the demand, inform that person of the 
requirements of this part, and may, in agency counsel's discretion, ask 
that the demand be withdrawn.
    (d) If the requester of the demand refuses to have it withdrawn or 
fails to comply with this part, the Department may seek to quash the 
demand.
    (e) If the court or other competent authority declines to grant the 
Department's motion to quash, agency counsel shall instruct the employee 
whether to testify or produce documents pursuant to the demand. Agency 
counsel may permit the testimony under Sec. 9.1(c) of this part. If 
response to a demand is required before the court or other competent 
authority rules on the motion to quash and the court fails to stay the 
demand, the employee must appear at the stated time and place, produce a 
copy of this part, and respectfully refuse to provide any testimony or 
produce any documents. Agency counsel shall take steps to arrange for 
legal representation for the employee. Agency counsel shall advise the 
employee how to respond, including not to testify, if the court or other 
competent authority rules that the demand must be complied with 
irrespective of these regulations.



Sec. 9.13  Legal proceedings between private litigants: Procedures to
request records.

    (a) In a legal proceeding between private litigants, a party who 
wishes to obtain records from the Department shall submit to agency 
counsel a request for the records. The request will ordinarily be 
handled in accordance with the Department's procedures concerning 
requests for records found at 49 CFR part 7. If the party does not 
follow the procedures specified in that part, the request must be 
accompanied by a statement setting forth the relevance of the records to 
the proceeding. The request should be resolved before any request for 
testimony under Sec. 9.15 is submitted. Where a request for testimony 
includes a request for additional records, it shall indicate precisely 
how this new request differs in scope from any previous request in order 
to avoid agency duplication of effort. Agency counsel shall notify the 
requester of the approval or denial of the request.
    (b) [Reserved]



Sec. 9.15  Legal proceedings between private litigants: Procedures to
request testimony.

    (a) Any party seeking the testimony of an employee in a legal 
proceeding between private litigants, concerning facts within the 
employee's personal knowledge with regard to matters arising out of the 
employee's official duties, shall, rather than serving a demand for the 
testimony, request the testimony at least 30 days before it is intended 
to be taken or received. The request must be submitted to agency counsel 
and must include:

[[Page 85]]

    (1) The title of the case, docket number, and the court, or 
otherwise clearly identify the legal proceeding involved;
    (2) A statement setting forth the basic facts in the proceeding, 
such as the type, date, and location of an accident;
    (3) A summary of the unresolved issues applicable to the testimony 
sought;
    (4) A summary of the testimony sought and its relevant to the 
proceeding;
    (5) A certification with support, that the information desired is 
not reasonably available from other sources, including Departmental 
documents;
    (6) Pursuant to Sec. 9.9(d) of this part, an affidavit or 
certification describing the extent of a search of parties and potential 
parties and listing the names of the parties and potential parties 
notified; and
    (7) A declaration that the party will not seek expert or opinion 
testimony from the witness or seek the testimony of the witness at a 
hearing or trial in the proceeding.

The request shall specify which form of testimony (deposition, 
affidavit, declaration, or answers to interrogatories) is desired and 
the date by which it is desired; however, only one form, the one least 
burdensome to the Department that will provide the needed information, 
will be permitted for each witness.
    (b) The party seeking the testimony shall include with its request 
for testimony a copy of any prior request(s) made by the same requester 
to the Department or other agency of the United States for records 
pertaining to the matter being litigated and of the response (not 
including the records themselves) to the request(s). The party seeking 
the testimony shall also comply with any agency counsel request that 
copies of the records previously disclosed by the Department, or a list 
of those records, be furnished.
    (c) In accordance with the requirement of this section and the 
general provisions of this part, agency counsel shall notify the 
requester of the approval or denial of the request. Agency counsel may 
attach special conditions to its approval.



Sec. 9.17  Legal proceedings between private litigants: Procedures for 
taking testimony.

    (a) Testimony of an employee of the Department may be taken only at 
the office to which the employee is assigned, or any other place 
designated by agency counsel. Additional conditions may be specified 
under Sec. 9.15(c) of this part. The time shall be reasonably fixed to 
avoid substantial interference with the performance of the employee's or 
agency counsel's official duties.
    (b) Upon completion of the testimony of an employee of the 
Department, a copy of the transcript of the testimony shall be 
furnished, at the expense of the party requesting the testimony, to 
agency counsel for the Department's files.



Sec. 9.19  Acceptance of service on behalf of Secretary.

    In any legal proceeding, at the option of the server, process or 
pleadings may be served on agency counsel, with the same effect as if 
served upon the Secretary or the head of the operating administration 
concerned, as the case may be. The official accepting service under this 
section shall acknowledge the service and take appropriate action. This 
section does not in any way abrogate or modify the requirements of Rule 
4(d)(4) and 4(d)(5) of the Federal Rules of Civil Procedure regarding 
service of summons and complaint.



PART 10_MAINTENANCE OF AND ACCESS TO RECORDS PERTAINING TO INDIVIDUALS--
Table of Contents



                   Subpart A_Applicability and Policy

Sec.
10.1 Applicability.
10.3 Policy.
10.5 Definitions.

                            Subpart B_General

10.11 Administration of part.
10.13 Privacy Officer.
10.15 Protection of records.

                    Subpart C_Maintenance of Records

10.21 General.
10.23 Accounting of disclosures.
10.25 Mailing lists.
10.27 Government contractors.

[[Page 86]]

10.29 Social Security numbers.

                    Subpart D_Availability of Records

10.31 Requests for records.
10.33 Acknowledgment and access.
10.35 Conditions of disclosure.
10.37 Identification of individual making request.
10.39 Location of records.

                     Subpart E_Correction of Records

10.41 Requests for correction of records.
10.43 Time limits.
10.45 Statement of disagreement.

Subpart F_Procedures for Reconsidering Decisions Not To Grant Access to 
                            or Amend Records

10.51 General.

                          Subpart G_Exemptions

10.61 General exemptions.
10.63 Specific exemptions.

                             Subpart H_Fees

10.71 General.
10.73 Payment of fees.
10.75 Fee schedule.
10.77 Services performed without charge.

                      Subpart I_Criminal Penalties

10.81 Improper disclosure.
10.83 Improper maintenance of records.
10.85 Wrongfully obtaining records.

Appendix to Part 10--Exemptions

    Authority: 5 U.S.C. 552a; 49 U.S.C. 322.

    Source: 45 FR 8993, Feb. 11, 1980, unless otherwise noted.



                   Subpart A_Applicability and Policy



Sec. 10.1  Applicability.

    This part implements section 552a of title 5, United States Code, as 
well as other provisions of the Privacy Act of 1974, and prescribes 
rules governing the availability of those records of the Department of 
Transportation which relate to citizens of the United States and aliens 
lawfully admitted for permanent residence.

[45 FR 8993, Feb. 11, 1980, as amended at 62 FR 23666, May 1, 1997]



Sec. 10.3  Policy.

    It is the policy of the Department of Transportation to comply with 
the letter and the spirit of the Privacy Act (the Act). Therefore, 
personal data contained in each system of records is afforded adequate 
protection against unauthorized access, is as accurate as is feasible, 
and is limited to that necessary to accomplish the stated use or uses of 
the system. Further, no system of records is exempted from the 
requirements of the Act unless it is determined that to do so is in the 
best interest of the government with due concern for individual rights.



Sec. 10.5  Definitions.

    Unless the context requires otherwise, the following definitions 
apply in this part:
    Administrator means the head of an operating administration and 
includes the Under Secretary for Security and the Commandant of the 
Coast Guard.
    Department means the Department of Transportation, including the 
Office of the Secretary, the Office of Inspector General, and the 
following operating administrations: This definition specifically 
excludes the Surface Transportation Board, which has its own Privacy Act 
regulations (49 CFR Part 1007), except to the extent that any system of 
records notice provides otherwise.
    (1) Federal Aviation Administration.
    (2) Federal Highway Administration.
    (3) Federal Motor Carrier Safety Administration.
    (4) Federal Railroad Administration.
    (5) Federal Transit Administration.
    (6) National Highway Traffic Safety Administration.
    (7) St. Lawrence Seaway Development Corporation.
    (8) Pipeline and Hazardous Materials Safety Administration.
    (9) Research and Innovative Technology Administration.
    (10) Maritime Administration.
    General Counsel means the General Counsel of the Department.
    Includes means ``includes but is not limited to;''
    Individual means a citizen of the United States or an alien lawfully 
admitted;

[[Page 87]]

    Maintain includes maintain, collect, use, or disseminate;
    May is used in a permissive sense to state authority or permission 
to do the act prescribed;
    Record means any item, collection, or grouping of information about 
an individual that is maintained by the Department including, but not 
limited to, education, financial transactions, medical history, and 
criminal or employment history and that contains the name of, or an 
identifying number, symbol, or other identifying particular assigned to, 
the individual, such as a finger or voice print or a photograph;
    Secretary means the Secretary of Transportation or any person to 
whom has been delegated authority in the matter concerned;
    System of records means a group of any records under the control of 
the Department from which information is retrieved by the name of the 
individual or by some identifying number, symbol, or other identifying 
particular assigned to the individual;
    Statistical record means a record in a system of records maintained 
for statistical research or reporting purposes only and not in whole or 
in part in making any determination about an identifiable individual, 
except as provided by section 8 of title 13, United States Code; and
    Routine use means, with respect to the disclosure of a record, the 
use of such record for a purpose which is compatible with the purpose 
for which it was collected.

[45 FR 8993, Feb. 11, 1980, as amended at 62 FR 23667, May 1, 1997; 65 
FR 48184, Aug. 7, 2000; 67 FR 54746, Aug. 26, 2002; 73 FR 33329, June 
12, 2008]



                            Subpart B_General



Sec. 10.11  Administration of part.

    Authority to administer this part in connection with the records of 
the Office of the Secretary is delegated to the Chief Information 
Officer. Authority to administer this part in connection with records in 
each operating administration is delegated to the Administrator 
concerned. An Administrator may redelegate to officers of that 
administration the authority to administer this part in connection with 
defined systems of records. An Administrator, however, may redelegate 
his or her duties under subparts F and G of this part only to his or her 
deputy and to not more than one other officer who reports directly to 
the Administrator and who is located at the headquarters of that 
administration or at the same location as the majority of that 
administration's systems of records.

[45 FR 8993, Feb. 11, 1980, as amended at 62 FR 23667, May 1, 1997; 73 
FR 33329, June 12, 2008]



Sec. 10.13  Privacy Officer.

    (a) To assist with implementation, evaluation, and administration 
issues, the Chief Information Officer appoints a principal coordinating 
official with the title Privacy Officer, and one Privacy Act Coordinator 
from his/her staff.
    (b) Inquiries concerning Privacy Act matters, or requests for 
assistance, may be addressed to the Privacy Act Officer (S-80), 
Department of Transportation, 1200 New Jersey Avenue, SE., Washington, 
DC 20590.
    (c) Administrators may designate Privacy Officers or Coordinators to 
act as central coordinators within their administrations to assist them 
in administering the Act.

[73 FR 33329, June 12, 2008]



Sec. 10.15  Protection of records.

    (a) No person may, without permission, remove any record made 
available for inspection or copying under this part from the place where 
it is made available. In addition, no person may steal, alter, mutilate, 
obliterate, or destroy, in whole or in part, such a record.
    (b) Section 641 of title 18 of the United States Code provides, in 
pertinent part, as follows:

    Whoever * * * steals, purloins, or knowingly converts to his use or 
the use of another, or without authority, sells, conveys or disposes of 
any record * * * or thing of value of the United States or of any 
department or agency thereof * * * shall be fined not more than $10,000 
or imprisoned not more than 10 years or both; but if the value of such 
property does not exceed the sum of $100, he shall be fined not more 
than $1,000 or imprisoned not more than one year or both * * *.


[[Page 88]]


    (c) Section 2071 of title 18 of the United States Code provides, in 
pertinent part, as follows:

    Whoever willfully and unlawfully conceals, removes, mutilates, 
obliterates, or destroys, or attempts to do so, or with intent to do so 
takes and carries away any record, proceeding, map, book, paper, 
document, or other thing, filed or deposited * * * in any public office, 
or with any * * * public officer of the United States, shall be fined 
not more than $2,000 or imprisoned not more than 3 years, or both.



                    Subpart C_Maintenance of Records



Sec. 10.21  General.

    Except to the extent that a system of records is exempt in 
accordance with subpart G of this part, the Department, with respect to 
each system of records:
    (a) Maintains in its records only such information about an 
individual as is relevant and necessary to accomplish a purpose of the 
Department required to be accomplished by statute or by executive order 
of the President;
    (b) Collects information to the greatest extent practicable directly 
from the subject individual when the information may result in adverse 
determinations about an individual's rights, benefits, or privileges 
under Federal programs;
    (c) Informs each individual whom it asks to supply information, on 
the form which it uses to collect the information or on a separate form 
that can be retained by the individual of:
    (1) The authority (whether granted by statute, or by executive order 
of the President) which authorizes the solicitation of the information 
and whether disclosure of such information is mandatory or voluntary;
    (2) The principal purpose or purposes for which the information is 
intended to be used;
    (3) The routine uses, as published pursuant to paragraph (d)(4) of 
this section, which may be made of the information; and
    (4) The effects, if any, on the individual of not providing all or 
any part of the requested information;
    (d) Publishes in the Federal Register at least annually a notice of 
the existence and character of the system of records, including:
    (1) The name and location of the system;
    (2) The categories of individuals on whom records are maintained in 
the system;
    (3) The categories of records maintained in the system;
    (4) Each routine use of the records contained in the system, 
including the categories of users and the purpose of such use;
    (5) The policies and practices regarding storage, retrievability, 
access controls, retention, and disposal of the records;
    (6) The title and business address of the official responsible for 
the system of records;
    (7) The procedures whereby an individual can be notified upon 
request if the system of records contains a record pertaining to that 
individual;
    (8) The procedures whereby an individual can be notified upon 
request how to gain access to any record pertaining to that individual 
contained in the system of records, and how to contest its content; and
    (9) The categories of sources of records in the system;
    (e) Maintains all records which are used in making any determination 
about any individual with such accuracy, relevancy, timeliness, and 
completeness as is reasonably necessary to assure fairness to the 
individual in the determination;
    (f) Prior to disseminating any record about an individual to any 
person other than an agency, unless the dissemination is made pursuant 
to Sec. 10.35(a)(2), makes reasonable efforts to assure that such 
records are accurate, complete, timely, and relevant for the 
Department's purposes;
    (g) Maintains no record describing how any individual exercises 
rights guaranteed by the First Amendment unless:
    (1) Expressly authorized by the General Counsel; and
    (2) Expressly authorized by statute or by the individual about whom 
the record is maintained or unless pertinent to and within the scope of 
an authorized law enforcement activity;

[[Page 89]]

    (h) Makes reasonable efforts to serve notice on an individual when 
any record on such individual is made available to any person under 
compulsory legal process when such process becomes a matter of public 
record.



Sec. 10.23  Accounting of disclosures.

    Each operating administration, the Office of Inspector General, and 
the Office of the Secretary, with respect to each system of records 
under its control:
    (a) Except for disclosures made under Sec. 10.35(a) (1) or (2) of 
this part, keep an accurate accounting of:
    (1) The date, nature, and purpose of each disclosure of a record to 
any person or to another agency made under Sec. 10.33; and
    (2) The name and address of the person or agency to whom the 
disclosure is made;
    (b) Retains the accounting made under paragraph (a) of this section 
for at least five years or the life of the record, whichever is longer, 
after the disclosure for which the accounting is made;
    (c) Except for disclosures made under Sec. 10.33(a)(7) of this 
part, makes the accounting made under paragraph (a)(1) of this section 
available to the individual named in the record at his request; and
    (d) Informs any person or other agency about any correction or 
notation of dispute made by the agency in accordance with Sec. 10.45 of 
any record that has been disclosed to the person or agency if an 
accounting of the disclosure was made.

[45 FR 8993, Feb. 11, 1980, as amended at 62 FR 23667, May 1, 1997]



Sec. 10.25  Mailing lists.

    An individual's name and address is not sold or rented unless such 
action is specifically authorized by law. This provision shall not be 
construed to require the withholding of names and addresses otherwise 
permitted to be made public.



Sec. 10.27  Government contractors.

    When the Department provides by a contract for the operation by or 
on behalf of the Department of a system of records to accomplish a 
function of the Department, the requirements of this part are applied to 
such system. For purposes of subpart I, Criminal Penalties, any such 
contractor and any employee of the contractor are considered, in 
accordance with section 3(m) of the Privacy Act, to be employees of the 
Department.



Sec. 10.29  Social Security numbers.

    (a) No individual is denied any right, benefit, or privilege 
provided by law because of such individual's refusal to disclose his 
Social Security account number.
    (b) The provisions of paragraph (a) of this section do not apply to:
    (1) Any disclosure which is required by Federal statute; or
    (2) The disclosure of a Social Security number when such disclosure 
was required under statute or regulation adopted prior to January 1, 
1975, to verify the identity of an individual.
    (c) When an individual is requested to disclose his or her Social 
Security account number, that individual is informed whether that 
disclosure is mandatory or voluntary, by what statutory or other 
authority such number is solicited, what uses are made of it, and what 
detriments, including delay in the location of records, are incurred if 
the number is not provided.



                    Subpart D_Availability of Records



Sec. 10.31  Requests for records.

    (a) Ordinarily, each person desiring to determine whether a record 
pertaining to him/her is contained in a system of records covered by 
this part or desiring access to a record covered by this part, or to 
obtain a copy of such a record, shall make a request in writing 
addressed to the system manager. The ``Privacy Act Issuances'' published 
by the Office of the Federal Register, National Archives and Records 
Administration, describes the systems of records maintained by all 
Federal agencies, including the Department and its components. In 
exceptional cases oral requests are accepted. A description of DOT 
Privacy Act systems notices is available through the Internet free of 
charge at http://www.access.gpo.gov/su--docs/aces/
PrivacyAct.shtml?desc015.html. See

[[Page 90]]

Sec. 10.13(b) regarding inquiries concerning Privacy Act matters or 
requests for assistance.
    (b) Each request shall specify the name of the requesting individual 
and the system of records in which the subject record is located or 
thought to be located. If assistance is required to determine the system 
of records identification number assigned in the systems notices, such 
assistance may be obtained from the appropriate Privacy Act officer or 
his assistant. Refer to Sec. 10.13 for procedures for requesting 
assistance.

[45 FR 8993, Feb. 11, 1980, as amended at 62 FR 23667, May 1, 1997]



Sec. 10.33  Acknowledgment and access.

    (a) Requests by an individual to determine whether he or she is the 
subject of a record in a system of records, or requesting access to a 
record in a system of records, should be acknowledged within 10 working 
days, where the request is by mail. For requests in person, an immediate 
response is given, either granting access or informing such individual 
when notification or access may be expected.
    (b) If the response granting access or copies of the record is made 
within 10 working days, separate acknowledgment is not required.
    (c) Although requests for access to a record are normally in 
writing, e.g., by filing a written form or letter, it is the option of 
the individual to mail or present the request form in person.



Sec. 10.35  Conditions of disclosure.

    (a) No record that is contained within a system of records of the 
Department is disclosed by any means of communication to any person, or 
to another agency, except pursuant to a written request by, or with the 
prior written consent of, the individual to whom the record pertains, 
unless disclosure of the record would be:
    (1) To those officers and employees of the Department who have a 
need for the record in the performance of their duties;
    (2) Required under part 7 of this title which implements the Freedom 
of Information Act;
    (3) For a routine use as defined in Sec. 10.5 and described 
pursuant to Sec. 10.21(d)(4);
    (4) To the Bureau of the Census for purposes of planning or carrying 
out a census or survey or related activity pursuant to the provisions of 
title 13, United States Code;
    (5) To a recipient who has provided the Department with advance 
adequate written assurance that the record will be used solely as a 
statistical research or reporting record, and the record is to be 
transferred in a form that is not individually identifiable;
    (6) To the National Archives of the United States as a record which 
has sufficient historical or other value to warrant its continued 
preservation by the U.S. Government, or for evaluation by the 
Administrator of General Services or his designee to determine whether 
the record has such value;
    (7) To another agency or to an instrumentality of any governmental 
jurisdiction within or under the control of the United States for a 
civil or criminal law enforcement activity if the activity is authorized 
by law, and if the head of the agency or instrumentality has made a 
written request to the agency which maintains the record specifying the 
particular portion desired and the law enforcement activity for which 
the record is sought;
    (8) To a person pursuant to a showing of compelling circumstances 
affecting the health or safety of an individual if upon such disclosure 
notification is transmitted to the last known address of such 
individual;
    (9) To either House of the Congress, or to the extent of matters 
within its jurisdiction, any committee or subcommittee thereof, any 
joint committee of the Congress or subcommittee of any such joint 
committee;
    (10) To the Comptroller General, or any authorized representatives, 
in the course of the performance of the duties of the General Accounting 
Office; or
    (11) Pursuant to the order of a court of competent jurisdiction.
    (12) To a consumer reporting agency in accordance with 31 U.S.C. 
3711(f).
    (b) Any individual requesting access to his or her record or to any 
information pertaining to that individual

[[Page 91]]

which is contained within a system of records within the Department has 
access to that record or information unless the system of records within 
which the record or information is contained is exempted from disclosure 
in accordance with subpart G, provided, however, that nothing in this 
part is deemed to require that an individual be given access to any 
information compiled in reasonable anticipation of a civil action or 
proceeding. No exemption contained in subpart G of part 7 of the 
regulations of the Office of the Secretary is relied upon to withhold 
from an individual any record which is otherwise accessible to such 
individual under the provisions of this part. Any individual who is 
given access to a record or information pertaining to him is permitted 
to have a person of his or her own choosing accompany him and to have a 
copy made of all or any portion of the record or information in a form 
comprehensible to the individual. When deemed appropriate, the 
individual may be required to furnish a written statement authorizing 
discussion of his record in the accompanying person's presence.
    (c) Medical records. Where requests are for access to medical 
records, including psychological records, the decision to release 
directly to the individual, or to withhold direct release, shall be made 
by a medical practitioner. Where the medical practitioner has ruled that 
direct release will do harm to the individual who is requesting access, 
normal release through the individual's chosen medical practitioner will 
be recommended. Final review and decision on appeals of disapprovals of 
direct release will rest with the General Counsel.
    (d) Any person requesting access to records or to any information 
pertaining to other individuals is not granted such access unless that 
person can show that he or she has obtained permission for such access 
from the individual to whom the record pertains, unless the request 
comes within one of the exceptions of paragraph (a) of this section.

[45 FR 8993, Feb. 11, 1980, as amended at 62 FR 23667, May 1, 1997]



Sec. 10.37  Identification of individual making request.

    No record or information contained in a system of records is 
disclosed to an individual nor is any correction of a record in 
accordance with subpart E made at the request of an individual unless 
that individual demonstrates that he or she is who he or she claims to 
be. Normally, identity can be proven for individuals who appear in 
person by the presentation of an identifying document issued by a 
recognized organization (e.g., a driver's license or a credit card) and 
which contains a means of verification such as a photograph or a 
signature. For requests by mail, the unique identifier used in the 
system should be included if known. Responses to mail requests are 
normally sent only to the name and address listed in the system of 
records. In the case of particularly sensitive records, additional 
identification requirements may be imposed. In such cases, these 
additional requirements are listed in the public notice for the system.

[45 FR 8993, Feb. 11, 1980, as amended at 62 FR 23667, May 1, 1997]



Sec. 10.39  Location of records.

    Each record made available under this subpart is available for 
inspection and copying during regular working hours at the place where 
it is located, or, upon reasonable notice, at the document inspection 
facilities of the Office of the Secretary or each administration. 
Original records may be copied but may not be released from custody. 
Upon payment of the appropriate fee, copies are mailed to the requester.

[62 FR 23667, May 1, 1997]



                     Subpart E_Correction of Records



Sec. 10.41  Requests for correction of records.

    Any person who desires to have a record pertaining to that person 
corrected shall submit a written request detailing the correction and 
the reasons the record should be so corrected. Requests for correction 
of records shall be submitted to the System Manager.

[62 FR 23667, May 1, 1997]

[[Page 92]]



Sec. 10.43  Time limits.

    Within ten days (excluding Saturday, Sunday, and legal holidays) of 
the receipt in accordance with Sec. 10.41 of a request by an individual 
to amend a record pertaining to him, the receipt of the request is 
acknowledged in writing. If a determination is made to correct the 
record as requested, the correction is promptly made. If a determination 
is made not to correct a record the individual is informed promptly of 
the right to appeal in accordance with subpart F. If an appeal of a 
refusal to correct a record is in accordance with subpart F, a 
determination whether to correct the record is made within thirty days 
(excluding Saturday, Sunday, and legal holidays) of the receipt of the 
appeal unless, for good cause shown the Administrator concerned, or in 
the case of the Office of the Secretary, the General Counsel, extends 
such period. Where an extension is taken, the party taking the appeal is 
promptly notified of such fact.



Sec. 10.45  Statement of disagreement.

    If a determination is made not to amend a record, the requester is 
informed of the right to file a concise statement setting forth the 
reasons for disagreement with the refusal to amend. In any disclosure 
containing information about which an individual has filed such a 
statement of disagreement, the portions of the record which are disputed 
are noted clearly and copies of the statement of disagreement provided. 
If the Administrator concerned or his or her delegee, or in the case of 
the Office of the Secretary, the General Counsel or his or her delegee, 
deems it appropriate, copies of a concise statement of the reasons for 
not making the amendments requested may be provided along with the 
statement of disagreement.



Subpart F_Procedures for Reconsidering Decisions Not To Grant Access to 
                            or Amend Records



Sec. 10.51  General.

    (a) Each officer or employee of the Department who, upon a request 
by a member of the public for a record under this part, makes a 
determination that access is not to be granted or who determines not to 
amend a record in a requested manner, gives a written statement of the 
reasons for that determination to the person making the request and 
indicates the name and title or position of each person responsible for 
the denial of such request and the procedure for appeal within the 
Department.
    (b) Any person:
    (1) Who has been given a determination pursuant to paragraph (a) of 
this section, that access will not be granted; or
    (2) Who has been informed that an amendment to a requested record 
will not be made; may apply to the Administrator concerned, or in the 
case of the Office of the Secretary, to the General Counsel for review 
of that decision. A determination that access will not be granted or a 
record amended is not administratively final for the purposes of 
judicial review unless it was made by the Administrator concerned or his 
or her delegee, or the General Counsel or his or her delegee, as the 
case may be. Upon a determination that an appeal will be denied, the 
requester is informed in writing of the reasons for the determination, 
and the names and titles or positions of each person responsible for the 
determination, and that the determination may be appealed to the 
District Court of the United States in the district in which the 
complainant resides, or has his or her principal place of business, or 
in which the records are located, or in the District of Columbia.
    (c) Each application for review must be made in writing and must 
include all information and arguments relied upon by the person making 
the request, and be submitted within 30 days of the date of the initial 
denial; exceptions to this time period are permitted for good reason.
    (d) Upon a determination that a request for the correction of a 
record will be denied, the requester is informed that he may file a 
concise statement in accordance with Sec. 10.45.
    (e) Each application for review must indicate that it is an appeal 
from a denial of a request made under the Privacy Act. The envelope in 
which the

[[Page 93]]

application is sent should be marked prominently with the words 
``Privacy Act.'' If these requirements are not met, the time limits 
described in Sec. 10.43 do not begin to run until the application has 
been identified by an employee of the Department as an application under 
the Privacy Act and has been received by the appropriate office.
    (f) The Administrator concerned, or the General Counsel, as the case 
may be, may require the person making the request to furnish additional 
information, or proof of factual allegations, and may order other 
proceedings appropriate in the circumstances. The decision of the 
Administrator concerned, or the General Counsel, as the case may be, as 
to the availability of the record or whether to amend the record is 
administratively final.
    (g) The decision by the Administrator concerned, or the General 
Counsel, as the case may be, not to disclose a record under this part is 
considered a determination for the purposes of section 552a(g) of title 
5, United States Code, ``Civil Remedies.''
    (h) Any final decision by an Administrator or his/her delegate not 
to grant access to or amend a record under this part is subject to 
concurrence by the General Counsel or his or her delegate.

[45 FR 8993, Feb. 11, 1980, as amended at 62 FR 23667, May 1, 1997]



                          Subpart G_Exemptions



Sec. 10.61  General exemptions.

    (a) The Assistant Secretary for Administration, with regard to the 
Investigations Division; and the Federal Aviation Administrator, with 
regard to the FAA's Investigative Record System (DOT/FAA 815) may exempt 
from any part of the Act and this part except subsections (b), (c)(1) 
and (2), (e)(4)(A) through (F), (e)(6), (7), (9), (10), and (11), and 
(i) of the Act, and implementing Sec. Sec. 10.35, 10.23(a) and (b), 
10.21(d)(1) through (6), 10.81, 10.83, and 10.85 of this chapter, any 
systems of records, or portions thereof, which they maintain which 
consist wholly of;
    (1) Information compiled for the purpose of identifying individual 
criminal offenders and alleged offenders and consisting only of 
identifying data and notations of arrests, the nature and disposition of 
criminal charges, sentencing, confinement, release, and parole and 
probation status;
    (2) Information compiled for the purpose of a criminal 
investigation, including reports of informants and investigators, and 
associated with an identifiable individual; or
    (3) Reports identifiable to an individual compiled at any stage of 
the process of enforcement of the criminal laws from arrest or 
indictment through release from supervision.
    (b) The requirements (including general notice) of sections 
553(b)(1), (2) and (3), and (c) and (e) of title 5, United States Code, 
will be met by publication in appendix A to this part, which must, at a 
minimum, specify:
    (1) The name of the system; and
    (2) The specific provisions of the Act from which the system is to 
be exempted and the reasons therefor.
    (c) Any decision to exempt a system of records under this section is 
subject to concurrence by the General Counsel.
    (d) Any person may petition the Secretary in accordance with the 
provisions of part 5 of this title, to institute a rulemaking proceeding 
for the amendment or repeal of any exemptions established under this 
section.

[45 FR 8993, Feb. 11, 1980, as amended at 58 FR 67697, Dec. 22, 1993; 73 
FR 33329, June 12, 2008]



Sec. 10.63  Specific exemptions.

    The Secretary or his or her delegee, in the case of the Office of 
the Secretary; or the Administrator or his or delegee, in the case of an 
operating administration; or the Inspector General or his or her 
delegee, in the case of the Office of Inspector General, may exempt any 
system of records that is maintained by the Office of the Secretary, an 
operating administration, or the Office of Inspector General, as the 
case may be, from subsections (c)(3), (d), (e)(1), (e)(4)(G), (H), and 
(I), and (f) of the Act and implementing Sec. Sec. 10.23(c); 10.35(b); 
10.41; 10.43; 10.45; 10.21(a) and 10.21(d)(6), (7), and (8) of this 
chapter, under the following conditions:
    (a) The system of records must consist of:
    (1) Records subject to the provisions of section 552(b)(1) of title 
5, United States Code;

[[Page 94]]

    (2) Investigatory material compiled for law enforcement purposes, 
other than material within the scope of Sec. 10.61(a)(2): Provided, 
however, That if any individual is denied any right, privilege, or 
benefit to which that individual would otherwise be entitled by Federal 
law, or for which that individual would otherwise be eligible, as a 
result of the maintenance of such material, such material is provided to 
such individual, except to the extent that the disclosure of such 
material would reveal the identity of a source who furnished information 
to the Government under an express promise that the identity of the 
source would be held in confidence, or, prior to September 27, 1975, the 
effective date of the Privacy Act of 1974, under an implied promise that 
the identity of the source would be held in confidence;
    (3) Records maintained in connection with providing protective 
services to the President of the United States or other individuals 
pursuant to section 3056 of title 18, United States Code;
    (4) Records required by statute to be maintained and used solely as 
statistical records;
    (5) Investigatory material compiled solely for the purpose of 
determining suitability, eligibility, or qualifications for Federal 
civilian employment, military service, Federal contracts, or access to 
classified information, but only to the extent that the disclosure of 
such material would reveal the identity of a source who furnished 
information to the Government under an express promise that the identity 
of the source would be held in confidence, or, prior to September 27, 
1975, the effective date of the Privacy Act of 1974, under an implied 
promise that the identity of the source would be held in confidence;
    (6) Testing or examination material used solely to determine 
individual qualifications for appointment or promotion in the Federal 
service the disclosure of which would compromise the objectivity or 
fairness of the testing or examination process; or
    (7) Evaluation material used to determine potential for promotion in 
the armed services, but only to the extent that the disclosure of such 
material would reveal the identity of a source who furnished information 
to the Government under an express promise that the identity of the 
source would be held in confidence, or, prior to the effective date of 
this section, under an implied promise that the identity of the source 
would be held in confidence.
    (b) The requirements (including general notice) of sections 553 (b) 
(1), (2) and (3), and (c) and (e) of title 5, United States Code, will 
be met by publication in appendix A to this part, which must, at a 
minimum, specify:
    (1) The name of the systems; and
    (2) The specific provisions of the Act from which the system is to 
be exempted and the reasons therefor.
    (c) Any decision to exempt a system of records under this section is 
subject to the concurrence of the General Counsel.
    (d) Any person may petition the Secretary in accordance with the 
provisions of 49 CFR part 5, to institute a rulemaking for the amendment 
or repeal of any exemptions established under this section.

[45 FR 8993, Feb. 11, 1980, as amended at 62 FR 23667, May 1, 1997; 73 
FR 33329, June 12, 2008]



                             Subpart H_Fees



Sec. 10.71  General.

    This subpart prescribes fees for services performed for the public 
under this part by the Department.



Sec. 10.73  Payment of fees.

    The fees prescribed in this subpart may be paid by check, draft, or 
postal money order payable to the Treasury of the United States.



Sec. 10.75  Fee schedule.

(a) Copies of documents by photocopy or similar method:
  Each page not larger than 11x17 inches:
    First page.................................................     $.25
    Each page..................................................      .05
(b) Copies of documents by typewriter: Each page...............     2.00
(c) Certified copies of documents:
  (1) With Department of Transportation seal...................     3.00
  (2) True copy, without seal..................................     1.00
(d) Photographs:
  (1) Black and white print (from negative)....................     1.25
  (2) Black and white print (from print).......................     3.15
  (3) Color print (from negative)..............................     3.50
  (4) Color print (from print).................................     6.25
(e) Duplicate data tapes--each reel of tape or fraction thereof    36.00
 


[[Page 95]]


The applicant must furnish the necessary number of blank magnetic tapes. 
The tapes must be compatible for use in the supplier's computer system, 
\1/2\ inch wide and 2,400 feet long, and must be capable of recording 
data at a density of 556 or 800 characters per inch. Unless otherwise 
designated, the tapes will be recorded at 556 CPI density. The 
Department of Transportation is not responsible for damaged tape. 
However, if the applicant furnishes a replacement for a damaged tape, 
the duplication process is completed at no additional charge.

(f) Microreproduction fees are as follows:
  (1) Microfilm copies, each 100 foot roll or less.............    $3.75
  (2) Microfiche copies, each standard size sheet (4x6 containing up to 65 frames)................
  (3) Apertune card to hard copy, each copy....................      .50
  (4) 16mm microfilm to hard copy:
    First......................................................      .25
    Additional.................................................      .07
(g) Computerline printer output, each 1,000 lines or fraction       1.00
 thereof.......................................................
 



Sec. 10.77  Services performed without charge.

    (a) No fee is charged for time spent in searching for records or 
reviewing or preparing correspondence related to records subject to this 
part.
    (b) No fee is charged for documents furnished in response to:
    (1) A request from an employee or former employee of the Department 
for copies of personnel records of the employee;
    (2) A request from a Member of Congress for official use;
    (3) A request from a State, territory, U.S. possession, county or 
municipal government, or an agency thereof;
    (4) A request from a court that will serve as a substitute for the 
personal court appearance of an officer or employee of the Department;
    (5) A request from a foreign government or an agency thereof, or an 
international organization.
    (c) Documents are furnished without charge or at a reduced charge, 
if the Chief Information Officer or the Administrator concerned, as the 
case may be, determines that waiver or reduction of the fee is in the 
public interest, because furnishing the information can be considered as 
primarily benefiting the general public.
    (d) When records are maintained in computer-readable form rather 
than human-readable form, one printed copy is made available which has 
been translated to human-readable form without a charge for translation 
but in accordance with Sec. 10.75(g), regarding computer line-printed 
charges.

[45 FR 8993, Feb. 11, 1980, as amended at 73 FR 33329, June 12, 2008; 75 
FR 5244, Feb. 2, 2010]



                      Subpart I_Criminal Penalties



Sec. 10.81  Improper disclosure.

    Any officer or employee of the Department who by virtue of his or 
her employment or official position, has possession of, or access to, 
agency records which contain individually identifiable information the 
disclosure of which is prohibited by this part and who knowing that 
disclosure of the specific material is so prohibited, willfully 
discloses the material in any manner to any person or agency not 
entitled to receive it, is guilty of a misdemeanor and fined not more 
than $5,000 in accordance with 5 U.S.C. 552a(i)(1).



Sec. 10.83  Improper maintenance of records.

    Any officer or employee of the Department who willfully maintains a 
system of records without meeting the notice requirements of Sec. 
10.21(d) of this part is guilty of a misdemeanor and fined not more than 
$5,000 in accordance with 5 U.S.C. 552a(i)(2).



Sec. 10.85  Wrongfully obtaining records.

    Any person who knowingly and willfully requests or obtains any 
record concerning an individual from the Department under false 
pretenses is guilty of a misdemeanor and fined not more than $5,000 in 
accordance with 5 U.S.C. 552a(i)(3).



                  Sec. Appendix to Part 10--Exemptions

                       Part I. General Exemptions

    Those portions of the following systems of records that consist of 
(a) Information compiled for the purpose of identifying individual 
criminal offenders and alleged offenders and consisting only of 
identifying data and notations of arrests, the nature and disposition of 
criminal charges, sentencing, confinement, release, and parole and 
probation status; (b) information compiled for the

[[Page 96]]

purpose of a criminal investigation, including reports of informants and 
investigators, and associated with an identifiable individual; or (c) 
reports identifiable to an individual compiled at any stage of the 
process of enforcement of the criminal laws from arrest or indictment 
through release from supervision, are exempt from all parts of 5 U.S.C. 
552a except subsections (b) (Conditions of disclosure); (c) (1) and (2) 
(Accounting of certain disclosures); (e)(4) (A) through (F) (Publication 
of existence and character of system); (e)(6) (Ensure records are 
accurate, relevant, timely, and complete before disclosure to person 
other than an agency and other than pursuant to a Freedom of Information 
Act request), (7) (Restrict recordkeeping on First Amendment rights), 
(9) (Rules of conduct), (10) (Safeguards), and (11) (Routine use 
publication); and (i) (Criminal penalties):
    A. The Investigative Records System maintained by the Assistant 
Inspector General for Investigations, Office of the Inspector General, 
Office of the Secretary (DOT/OST 100).
    B. Police Warrant Files and Central Files maintained by the Federal 
Aviation Administration (DOT/FAA 807).
    C. The Investigative Records System maintained by the Federal 
Aviation Administration regarding criminal investigations conducted by 
offices of Investigations and Security at headquarters and FAA Regional 
and Center Security Divisions (DOT/FAA 815).
    These exemptions are justified for the following reasons:
    1. From subsection (c)(3), because making available to a record 
subject the accounting of disclosures from records concerning him/her 
would reveal investigative interest by not only DOT but also the 
recipient agency, thereby permitting the record subject to take 
appropriate measures to impede the investigation, as by destroying 
evidence, intimidating potential witnesses, fleeing the area to avoid 
the thrust of the investigation, etc.
    2. From subsections (d), (e)(4) (G) and (H), (f), and (g), because 
granting an individual access to investigative records, and granting 
him/her rights to amend/contest that information, interfere with the 
overall law enforcement process by revealing a pending sensitive 
investigation, possibly identify a confidential source, disclose 
information that would constitute an unwarranted invasion of another 
individual's personal privacy, reveal a sensitive investigative 
technique, or constitute a potential danger to the health or safety of 
law enforcement personnel.
    3. From subsection (e)(1), because it is often impossible to 
determine relevancy or necessity of information in the early stages of 
an investigation. The value of such information is a question of 
judgement and timing: what appears relevant and necessary when collected 
may ultimately be evaluated and viewed as irrelevant and unnecessary to 
an investigation. In addition, DOT may obtain information concerning the 
violation of laws other than those within the scope of its jurisdiction. 
In the interest of effective law enforcement, DOT should retain this 
information because it may aid in establishing patterns of unlawful 
activity and provide leads for other law enforcement agencies. Further, 
in obtaining evidence during an investigation, information may be 
provided to DOT that relates to matters incidental to the main purpose 
of the investigation but that may be pertinent to the investigative 
jurisdiction of another agency. Such information cannot readily be 
identified.
    4. From subsection (e)(2), because in a law enforcement 
investigation it is usually counterproductive to collect information to 
the greatest extent practicable directly from the subject of the 
information. It is not always feasible to rely upon the subject of an 
investigation as a source for information that may implicate him/her in 
illegal activities. In addition, collecting information directly from 
the subject could seriously compromise an investigation by prematurely 
revealing its nature and scope, or could provide the subject with an 
opportunity to conceal criminal activities, or intimidate potential 
sources, in order to avoid apprehension.
    5. From subsection (e)(3), because providing such notice to the 
subject of an investigation, or to other individual sources, could 
seriously compromise the investigation by prematurely revealing its 
nature and scope, or could inhibit cooperation, permit the subject to 
evade apprehension, or cause interference with undercover activities.

                      Part II. Specific Exemptions

    A. The following systems of records are exempt from subsection 
(c)(3) (Accounting of Certain Disclosures), (d) (Access to Records), 
(e)(4)(G), (H), and (I) (Agency Requirements), and (f) (Agency Rules) of 
5 U.S.C. 552a, to the extent that they contain investigatory material 
compiled for law enforcement purposes, in accordance 5 U.S.C. 
552a(k)(2):
    1. Investigative Record System (DOT/FAA 815) maintained by the 
Federal Aviation Administration at the Office of Civil Aviation Security 
in Washington, DC; the FAA regional Civil Aviation Security Divisions; 
the Civil Aviation Security Division at the Mike Monroney Aeronautical 
Center in Oklahoma City, Oklahoma; the FAA Civil Aviation Security Staff 
at the FAA Technical Center in Atlantic City, New Jersey; and the 
various Federal Records Centers located throughout the country.
    2. FHWA Investigations Case File System, maintained by the Office of 
Program Review and Investigations, Federal Highway Administration (DOT/
FHWA 214).

[[Page 97]]

    3. Federal Motor Carrier Safety Administration (FMCSA) Enforcement 
Management Information System, maintained by the Chief Counsel, FMCSA 
(DOT/FMCSA 002).
    4. DOT/NHTSA Investigations of Alleged Misconduct or Conflict of 
Interest, maintained by the Associate Administrator for Administration, 
National Highway Traffic Safety Administration (DOT/NHTSA 458).
    5. Civil Aviation Security System (DOT/FAA 813), maintained by the 
Office of Civil Aviation Security Policy and Planning, Federal Aviation 
Administration.
    6. Suspected Unapproved Parts (SUP) Program, maintained by the 
Federal Aviation Administration (DOT/FAA 852).
    7. Motor Carrier Management Information System (MCMIS), maintained 
by the Federal Motor Carrier Safety Administration (DOT/FMCSA 001).
    8. Suspicious Activity Reporting (SAR) database, maintained by the 
Office of Intelligence, Security, and Emergency Response, Office of the 
Secretary.
    9. Departmental Office of Civil Rights System (DOCRS).
    These exemptions are justified for the following reasons:
    1. From subsection (c)(3), because making available to a record 
subject the accounting of disclosures from records concerning him/her 
would reveal investigative interest by not only DOT but also the 
recipient agency, thereby permitting the record subject to take 
appropriate measures to impede the investigation, as by destroying 
evidence, intimidating potential witnesses, fleeing the area to avoid 
the thrust of the investigation, etc.
    2. From subsections (d), (e)(4)(G), (H), and (I), and (f), because 
granting an individual access to investigative records, and granting 
him/her access to investigative records with that information, could 
interfere with the overall law enforcement process by revealing a 
pending sensitive investigation, possibly identify a confidential 
source, disclose information that would constitute an unwarranted 
invasion of another individual's personal privacy, reveal a sensitive 
investigative technique, or constitute a potential danger to the health 
or safety of law enforcement personnel.
    B. The following systems of records are exempt from subsections 
(c)(3) (Accounting of Certain Disclosures) and (d) (Access to Records) 
of 5 U.S.C. 552a, in accordance with 5 U.S.C. 552a(k)(2):
    1. General Air Transportation Records on Individuals, maintained by 
various offices in the Federal Aviation Administration (DOT/FAA 847).
    2. Investigative Records System, maintained by the Assistant 
Inspector General for Investigations in the Office of the Inspector 
General (DOT/OST 100).
    These exemptions are justified for the following reasons:
    1. From subsection (c)(3), because making available to a record 
subject the accounting of disclosures from records concerning him/her 
would reveal investigative interest by not only DOT but also the 
recipient agency, thereby permitting the record subject to take 
appropriate measures to impede the investigation, as by destroying 
evidence, intimidating potential witnesses, fleeing the area to avoid 
the thrust of the investigation, etc.
    2. From subsection (d), because granting an individual access to 
investigative records could interfere with the overall law enforcement 
process by revealing a pending sensitive investigation, possibly 
identify a confidential source, disclose information that would 
constitute an unwarranted invasion of another individual's personal 
privacy, reveal a sensitive investigative technique, or constitute a 
potential danger to the health or safety of law enforcement personnel.
    C. The system of records known as the Alaska Railroad Examination of 
Operating Personnel, maintained by the Alaska Railroad, Federal Railroad 
Administration (DOT/FRA 100), is exempt from the provisions of 
subsection (d) of 5 U.S.C. 552a. The release of these records would 
compromise their value as impartial measurement standards for 
appointment and promotion within the Federal Service.
    D. Those portions of the following systems of records consisting of 
investigatory material compiled for the purpose of determining 
suitability, eligibility, or qualifications for Federal civilian 
employment, military service, or access to classified information or 
used to determine potential for promotion in the armed services, are 
exempt from sections (c)(3) (Accounting of Certain Disclosures), (d) 
(Access to Records), (e)(4) (G), (H), and (I) (Agency Requirements), and 
(f) (Agency Rules) of 5 U.S.C. 552a to the extent that disclosure of 
such material would reveal the identity of a source who provided 
information to the Government under an express or, prior to September 
27, 1975, an implied promise of confidentiality (5 U.S.C. 552a(k) (5) 
and (7)):
    1. Investigative Records System, maintained by the Assistant 
Inspector General for Investigations in the Office of the Inspector 
General (DOT/OST 100).
    2. Investigative Record System, maintained by the Federal Aviation 
Administration at FAA Regional and Center Air Transportation Security 
Divisions; the Investigations and Security Division, Aeronautical 
Center; and Office of Investigations and Security, Headquarters, 
Washington, D.C. (DOT/FAA 815).
    3. Files pursuant to suitability for employment with National 
Highway Traffic Safety

[[Page 98]]

Administration (DOT/NHTSA-457) containing confidential investigatory 
reports.
    The purpose of these exemptions is to prevent disclosure of the 
identities of sources who provide information to the government 
concerning the suitability, eligibility, or qualifications of 
individuals for Federal civilian employment, contracts, access to 
classified information, or appointment or promotion in the armed 
services, and who are expressly or, prior to September 27, 1975, implied 
promised confidentiality (5 U.S.C. 552a(k) (5) and (7)).
    E. Those portions of the following systems of records consisting of 
testing or examination material used solely to determine individual 
qualifications for appointment or promotion in the Federal Service are 
exempt from subsections (c)(3) (Accounting of Certain Disclosures), (d) 
(Access to Records), (e)(4) (G), (H) and (I) (Agency Requirements), and 
(f) (Agency Rules) of 5 U.S.C. 552a:
    1. Reference Files (DOT/NHTSA 457), maintained by the National 
Highway Traffic Safety Administration personnel offices to determine 
fitness for employment prior to hiring.
    The purpose of these exemptions is to preserve the value of these 
records as impartial measurement standards for appointment and promotion 
within the Federal service.
    F. Those portions of the following systems of records which consist 
of information properly classified in the interest of national defense 
or foreign policy in accordance with 5 U.S.C. 552(b)(1) are exempt from 
sections (c)(3) (Accounting of Certain Disclosures), (d) (Access to 
Records), (e)(4) (G), (H) and (I) (Agency Requirements), and (f) (Agency 
Rules) of 5 U.S.C. 552a:
    1. Investigative Record System maintained by the Assistant Inspector 
General for Investigations in the Office of the Inspector General (DOT/
OST 100).
    2. Personnel Security Records System, maintained by the Office of 
Investigations and Security, Office of the Secretary (DOT/OST 016).
    3. Civil Aviation Security System (DOT/FAA 813), maintained by the 
Office of Civil Aviation Security, Federal Aviation Administration.
    The purpose of these exemptions is to prevent the disclosure of 
material authorized to be kept secret in the interest of national 
defense or foreign policy, in accordance with 5 U.S.C. 552(b)(1) and 
552a(k)(1).
    G. Those portions of the following systems of records which consist 
of information properly classified in the interest of national defense 
or foreign policy in accordance with 5 U.S.C. 552a(b)(1) are exempt from 
subsections (c)(3) (Accounting of Certain Disclosures) and (d) (Access 
to Records) of 5 U.S.C. 552a:
    1. Investigative Record System (DOT/FAA 815) maintained by the 
Federal Aviation Administration at the Office of Civil Aviation Security 
in Washington, DC; the FAA regional Civil Aviation Security Divisions; 
the Civil Aviation Security Division at the Mike Monroney Aeronautical 
Center in Oklahoma City, Oklahoma; the FAA Civil Aviation Security Staff 
at the FAA Technical Center in Atlantic City, New Jersey; and the 
various Federal Records Centers located throughout the country.
    The purpose of these exemptions is to prevent the disclosure of 
material authorized to be kept secret in the interest of national 
defense or foreign policy, in accordance with 5 U.S.C. 552(b)(1) and 
552a(k)(1).

[45 FR 8993, Feb. 11, 1980, as amended at 58 FR 67697, Dec. 22, 1993; 59 
FR 13662, Mar. 23, 1994; 60 FR 43983, Aug. 24, 1995. Redesignated at 62 
FR 23667, May 1, 1997, as amended at 63 FR 2172, Jan. 14, 1998; 63 FR 
4197, Jan. 28, 1998; 66 FR 20407, Apr. 23, 2001; 73 FR 33329, June 12, 
2008; 75 FR 5244, Feb. 2, 2010; 76 FR 79114, Dec. 21, 2011; 77 FR 19944, 
Apr. 3, 2012]



PART 11_PROTECTION OF HUMAN SUBJECTS--Table of Contents



Sec.
11.101 To what does this policy apply?
11.102 Definitions.
11.103 Assuring compliance with this policy--research conducted or 
          supported by any Federal Department or Agency.
11.104-11.106 [Reserved]
11.107 IRB membership.
11.108 IRB functions and operations.
11.109 IRB review of research.
11.110 Expedited review procedures for certain kinds of research 
          involving no more than minimal risk, and for minor changes in 
          approved research.
11.111 Criteria for IRB approval of research.
11.112 Review by institution.
11.113 Suspension or termination of IRB approval of research.
11.114 Cooperative research.
11.115 IRB records.
11.116 General requirements for informed consent.
11.117 Documentation of informed consent.
11.118 Applications and proposals lacking definite plans for involvement 
          of human subjects.
11.119 Research undertaken without the intention of involving human 
          subjects.
11.120 Evaluation and disposition of applications and proposals for 
          research to be conducted or supported by a Federal Department 
          or Agency.
11.121 [Reserved]
11.122 Use of Federal funds.
11.123 Early termination of research support: Evaluation of applications 
          and proposals.
11.124 Conditions.

    Authority: 5 U.S.C. 301; 42 U.S.C. 300v-1(b).

[[Page 99]]


    Source: 56 FR 28012, 28023, June 18, 1991, unless otherwise noted.



Sec. 11.101  To what does this policy apply?

    (a) Except as provided in paragraph (b) of this section, this policy 
applies to all research involving human subjects conducted, supported or 
otherwise subject to regulation by any federal department or agency 
which takes appropriate administrative action to make the policy 
applicable to such research. This includes research conducted by federal 
civilian employees or military personnel, except that each department or 
agency head may adopt such procedural modifications as may be 
appropriate from an administrative standpoint. It also includes research 
conducted, supported, or otherwise subject to regulation by the federal 
government outside the United States.
    (1) Research that is conducted or supported by a federal department 
or agency, whether or not it is regulated as defined in Sec. 11.102(e), 
must comply with all sections of this policy.
    (2) Research that is neither conducted nor supported by a federal 
department or agency but is subject to regulation as defined in Sec. 
11.102(e) must be reviewed and approved, in compliance with Sec. 
11.101, Sec. 11.102, and Sec. 11.107 through Sec. 11.117 of this 
policy, by an institutional review board (IRB) that operates in 
accordance with the pertinent requirements of this policy.
    (b) Unless otherwise required by department or agency heads, 
research activities in which the only involvement of human subjects will 
be in one or more of the following categories are exempt from this 
policy:
    (1) Research conducted in established or commonly accepted 
educational settings, involving normal educational practices, such as 
(i) research on regular and special education instructional strategies, 
or (ii) research on the effectiveness of or the comparison among 
instructional techniques, curricula, or classroom management methods.
    (2) Research involving the use of educational tests (cognitive, 
diagnostic, aptitude, achievement), survey procedures, interview 
procedures or observation of public behavior, unless:
    (i) Information obtained is recorded in such a manner that human 
subjects can be identified, directly or through identifiers linked to 
the subjects; and
    (ii) Any disclosure of the human subjects' responses outside the 
research could reasonably place the subjects at risk of criminal or 
civil liability or be damaging to the subjects' financial standing, 
employability, or reputation.
    (3) Research involving the use of educational tests (cognitive, 
diagnostic, aptitude, achievement), survey procedures, interview 
procedures, or observation of public behavior that is not exempt under 
paragraph (b)(2) of this section, if:
    (i) The human subjects are elected or appointed public officials or 
candidates for public office; or (ii) federal statute(s) require(s) 
without exception that the confidentiality of the personally 
identifiable information will be maintained throughout the research and 
thereafter.
    (4) Research, involving the collection or study of existing data, 
documents, records, pathological specimens, or diagnostic specimens, if 
these sources are publicly available or if the information is recorded 
by the investigator in such a manner that subjects cannot be identified, 
directly or through identifiers linked to the subjects.
    (5) Research and demonstration projects which are conducted by or 
subject to the approval of department or agency heads, and which are 
designed to study, evaluate, or otherwise examine:
    (i) Public benefit or service programs; (ii) procedures for 
obtaining benefits or services under those programs; (iii) possible 
changes in or alternatives to those programs or procedures; or (iv) 
possible changes in methods or levels of payment for benefits or 
services under those programs.
    (6) Taste and food quality evaluation and consumer acceptance 
studies, (i) if wholesome foods without additives are consumed or (ii) 
if a food is consumed that contains a food ingredient at or below the 
level and for a use found to be safe, or agricultural chemical or 
environmental contaminant at or below the level found to be safe, by the 
Food and Drug Administration or approved by the Environmental Protection

[[Page 100]]

Agency or the Food Safety and Inspection Service of the U.S. Department 
of Agriculture.
    (c) Department or agency heads retain final judgment as to whether a 
particular activity is covered by this policy.
    (d) Department or agency heads may require that specific research 
activities or classes of research activities conducted, supported, or 
otherwise subject to regulation by the department or agency but not 
otherwise covered by this policy, comply with some or all of the 
requirements of this policy.
    (e) Compliance with this policy requires compliance with pertinent 
federal laws or regulations which provide additional protections for 
human subjects.
    (f) This policy does not affect any state or local laws or 
regulations which may otherwise be applicable and which provide 
additional protections for human subjects.
    (g) This policy does not affect any foreign laws or regulations 
which may otherwise be applicable and which provide additional 
protections to human subjects of research.
    (h) When research covered by this policy takes place in foreign 
countries, procedures normally followed in the foreign countries to 
protect human subjects may differ from those set forth in this policy. 
[An example is a foreign institution which complies with guidelines 
consistent with the World Medical Assembly Declaration (Declaration of 
Helsinki amended 1989) issued either by sovereign states or by an 
organization whose function for the protection of human research 
subjects is internationally recognized.] In these circumstances, if a 
department or agency head determines that the procedures prescribed by 
the institution afford protections that are at least equivalent to those 
provided in this policy, the department or agency head may approve the 
substitution of the foreign procedures in lieu of the procedural 
requirements provided in this policy. Except when otherwise required by 
statute, Executive Order, or the department or agency head, notices of 
these actions as they occur will be published in the Federal Register or 
will be otherwise published as provided in department or agency 
procedures.
    (i) Unless otherwise required by law, department or agency heads may 
waive the applicability of some or all of the provisions of this policy 
to specific research activities or classes of research activities 
otherwise covered by this policy. Except when otherwise required by 
statute or Executive Order, the department or agency head shall forward 
advance notices of these actions to the Office for Human Research 
Protections, Department of Health and Human Services (HHS), or any 
successor office, and shall also publish them in the Federal Register or 
in such other manner as provided in department or agency procedures. \1\
---------------------------------------------------------------------------

    \1\ Institutions with HHS-approved assurances on file will abide by 
provisions of title 45 CFR part 46 subparts A-D. Some of the other 
Departments and Agencies have incorporated all provisions of title 45 
CFR part 46 into their policies and procedures as well. However, the 
exemptions at 45 CFR 46.101(b) do not apply to research involving 
prisoners, subpart C. The exemption at 45 CFR 46.101(b)(2), for research 
involving survey or interview procedures or observation of public 
behavior, does not apply to research with children, subpart D, except 
for research involving observations of public behavior when the 
investigator(s) do not participate in the activities being observed.

[56 FR 28012, 28023, June 18, 1991; 56 FR 29756, June 28, 1991, as 
amended at 70 FR 36328, June 23, 2005]



Sec. 11.102  Definitions.

    (a) Department or agency head means the head of any federal 
department or agency and any other officer or employee of any department 
or agency to whom authority has been delegated.
    (b) Institution means any public or private entity or agency 
(including federal, state, and other agencies).
    (c) Legally authorized representative means an individual or 
judicial or other body authorized under applicable law to consent on 
behalf of a prospective subject to the subject's participation in the 
procedure(s) involved in the research.

[[Page 101]]

    (d) Research means a systematic investigation, including research 
development, testing and evaluation, designed to develop or contribute 
to generalizable knowledge. Activities which meet this definition 
constitute research for purposes of this policy, whether or not they are 
conducted or supported under a program which is considered research for 
other purposes. For example, some demonstration and service programs may 
include research activities.
    (e) Research subject to regulation, and similar terms are intended 
to encompass those research activities for which a federal department or 
agency has specific responsibility for regulating as a research 
activity, (for example, Investigational New Drug requirements 
administered by the Food and Drug Administration). It does not include 
research activities which are incidentally regulated by a federal 
department or agency solely as part of the department's or agency's 
broader responsibility to regulate certain types of activities whether 
research or non-research in nature (for example, Wage and Hour 
requirements administered by the Department of Labor).
    (f) Human subject means a living individual about whom an 
investigator (whether professional or student) conducting research 
obtains
    (1) Data through intervention or interaction with the individual, or
    (2) Identifiable private information.

Intervention includes both physical procedures by which data are 
gathered (for example, venipuncture) and manipulations of the subject or 
the subject's environment that are performed for research purposes. 
Interaction includes communication or interpersonal contact between 
investigator and subject. ``Private information'' includes information 
about behavior that occurs in a context in which an individual can 
reasonably expect that no observation or recording is taking place, and 
information which has been provided for specific purposes by an 
individual and which the individual can reasonably expect will not be 
made public (for example, a medical record). Private information must be 
individually identifiable (i.e., the identity of the subject is or may 
readily be ascertained by the investigator or associated with the 
information) in order for obtaining the information to constitute 
research involving human subjects.
    (g) IRB means an institutional review board established in accord 
with and for the purposes expressed in this policy.
    (h) IRB approval means the determination of the IRB that the 
research has been reviewed and may be conducted at an institution within 
the constraints set forth by the IRB and by other institutional and 
federal requirements.
    (i) Minimal risk means that the probability and magnitude of harm or 
discomfort anticipated in the research are not greater in and of 
themselves than those ordinarily encountered in daily life or during the 
performance of routine physical or psychological examinations or tests.
    (j) Certification means the official notification by the institution 
to the supporting department or agency, in accordance with the 
requirements of this policy, that a research project or activity 
involving human subjects has been reviewed and approved by an IRB in 
accordance with an approved assurance.



Sec. 11.103  Assuring compliance with this policy--research conducted
or supported by any Federal Department or Agency.

    (a) Each institution engaged in research which is covered by this 
policy and which is conducted or supported by a federal department or 
agency shall provide written assurance satisfactory to the department or 
agency head that it will comply with the requirements set forth in this 
policy. In lieu of requiring submission of an assurance, individual 
department or agency heads shall accept the existence of a current 
assurance, appropriate for the research in question, on file with the 
Office for Human Research Protections, HHS, or any successor office, and 
approved for federalwide use by that office. When the existence of an 
HHS-approved assurance is accepted in lieu of requiring submission of an 
assurance, reports (except certification) required by this policy to be 
made to department and agency heads shall also be made to the

[[Page 102]]

Office for Human Research Protections, HHS, or any successor office.
    (b) Departments and agencies will conduct or support research 
covered by this policy only if the institution has an assurance approved 
as provided in this section, and only if the institution has certified 
to the department or agency head that the research has been reviewed and 
approved by an IRB provided for in the assurance, and will be subject to 
continuing review by the IRB. Assurances applicable to federally 
supported or conducted research shall at a minimum include:
    (1) A statement of principles governing the institution in the 
discharge of its responsibilities for protecting the rights and welfare 
of human subjects of research conducted at or sponsored by the 
institution, regardless of whether the research is subject to federal 
regulation. This may include an appropriate existing code, declaration, 
or statement of ethical principles, or a statement formulated by the 
institution itself. This requirement does not preempt provisions of this 
policy applicable to department- or agency-supported or regulated 
research and need not be applicable to any research exempted or waived 
under Sec. 11.101 (b) or (i).
    (2) Designation of one or more IRBs established in accordance with 
the requirements of this policy, and for which provisions are made for 
meeting space and sufficient staff to support the IRB's review and 
recordkeeping duties.
    (3) A list of IRB members identified by name; earned degrees; 
representative capacity; indications of experience such as board 
certifications, licenses, etc., sufficient to describe each member's 
chief anticipated contributions to IRB deliberations; and any employment 
or other relationship between each member and the institution; for 
example: full-time employee, part-time employee, member of governing 
panel or board, stockholder, paid or unpaid consultant. Changes in IRB 
membership shall be reported to the department or agency head, unless in 
accord with Sec. 11.103(a) of this policy, the existence of an HHS-
approved assurance is accepted. In this case, change in IRB membership 
shall be reported to the Office for Human Research Protections, HHS, or 
any successor ofice.
    (4) Written procedures which the IRB will follow (i) for conducting 
its initial and continuing review of research and for reporting its 
findings and actions to the investigator and the institution; (ii) for 
determining which projects require review more often than annually and 
which projects need verification from sources other than the 
investigators that no material changes have occurred since previous IRB 
review; and (iii) for ensuring prompt reporting to the IRB of proposed 
changes in a research activity, and for ensuring that such changes in 
approved research, during the period for which IRB approval has already 
been given, may not be initiated without IRB review and approval except 
when necessary to eliminate apparent immediate hazards to the subject.
    (5) Written procedures for ensuring prompt reporting to the IRB, 
appropriate institutional officials, and the department or agency head 
of (i) any unanticipated problems involving risks to subjects or others 
or any serious or continuing noncompliance with this policy or the 
requirements or determinations of the IRB and (ii) any suspension or 
termination of IRB approval.
    (c) The assurance shall be executed by an individual authorized to 
act for the institution and to assume on behalf of the institution the 
obligations imposed by this policy and shall be filed in such form and 
manner as the department or agency head prescribes.
    (d) The department or agency head will evaluate all assurances 
submitted in accordance with this policy through such officers and 
employees of the department or agency and such experts or consultants 
engaged for this purpose as the department or agency head determines to 
be appropriate. The department or agency head's evaluation will take 
into consideration the adequacy of the proposed IRB in light of the 
anticipated scope of the institution's research activities and the types 
of subject populations likely to be involved, the appropriateness of the 
proposed initial and continuing review procedures in light of the 
probable risks, and the size and complexity of the institution.

[[Page 103]]

    (e) On the basis of this evaluation, the department or agency head 
may approve or disapprove the assurance, or enter into negotiations to 
develop an approvable one. The department or agency head may limit the 
period during which any particular approved assurance or class of 
approved assurances shall remain effective or otherwise condition or 
restrict approval.
    (f) Certification is required when the research is supported by a 
federal department or agency and not otherwise exempted or waived under 
Sec. 11.101 (b) or (i). An institution with an approved assurance shall 
certify that each application or proposal for research covered by the 
assurance and by Sec. 11.103 of this Policy has been reviewed and 
approved by the IRB. Such certification must be submitted with the 
application or proposal or by such later date as may be prescribed by 
the department or agency to which the application or proposal is 
submitted. Under no condition shall research covered by Sec. 11.103 of 
the Policy be supported prior to receipt of the certification that the 
research has been reviewed and approved by the IRB. Institutions without 
an approved assurance covering the research shall certify within 30 days 
after receipt of a request for such a certification from the department 
or agency, that the application or proposal has been approved by the 
IRB. If the certification is not submitted within these time limits, the 
application or proposal may be returned to the institution.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)

[56 FR 28012, 28023, June 18, 1991; 56 FR 29756, June 28, 1991, as 
amended at 70 FR 36328, June 23, 2005]



Sec. Sec. 11.104-11.106  [Reserved]



Sec. 11.107  IRB membership.

    (a) Each IRB shall have at least five members, with varying 
backgrounds to promote complete and adequate review of research 
activities commonly conducted by the institution. The IRB shall be 
sufficiently qualified through the experience and expertise of its 
members, and the diversity of the members, including consideration of 
race, gender, and cultural backgrounds and sensitivity to such issues as 
community attitudes, to promote respect for its advice and counsel in 
safeguarding the rights and welfare of human subjects. In addition to 
possessing the professional competence necessary to review specific 
research activities, the IRB shall be able to ascertain the 
acceptability of proposed research in terms of institutional commitments 
and regulations, applicable law, and standards of professional conduct 
and practice. The IRB shall therefore include persons knowledgeable in 
these areas. If an IRB regularly reviews research that involves a 
vulnerable category of subjects, such as children, prisoners, pregnant 
women, or handicapped or mentally disabled persons, consideration shall 
be given to the inclusion of one or more individuals who are 
knowledgeable about and experienced in working with these subjects.
    (b) Every nondiscriminatory effort will be made to ensure that no 
IRB consists entirely of men or entirely of women, including the 
institution's consideration of qualified persons of both sexes, so long 
as no selection is made to the IRB on the basis of gender. No IRB may 
consist entirely of members of one profession.
    (c) Each IRB shall include at least one member whose primary 
concerns are in scientific areas and at least one member whose primary 
concerns are in nonscientific areas.
    (d) Each IRB shall include at least one member who is not otherwise 
affiliated with the institution and who is not part of the immediate 
family of a person who is affiliated with the institution.
    (e) No IRB may have a member participate in the IRB's initial or 
continuing review of any project in which the member has a conflicting 
interest, except to provide information requested by the IRB.
    (f) An IRB may, in its discretion, invite individuals with 
competence in special areas to assist in the review of issues which 
require expertise beyond or in addition to that available on the IRB. 
These individuals may not vote with the IRB.



Sec. 11.108  IRB functions and operations.

    In order to fulfill the requirements of this policy each IRB shall:

[[Page 104]]

    (a) Follow written procedures in the same detail as described in 
Sec. 11.103(b)(4) and, to the extent required by, Sec. 11.103(b)(5).
    (b) Except when an expedited review procedure is used (see Sec. 
11.110), review proposed research at convened meetings at which a 
majority of the members of the IRB are present, including at least one 
member whose primary concerns are in nonscientific areas. In order for 
the research to be approved, it shall receive the approval of a majority 
of those members present at the meeting.



Sec. 11.109  IRB review of research.

    (a) An IRB shall review and have authority to approve, require 
modifications in (to secure approval), or disapprove all research 
activities covered by this policy.
    (b) An IRB shall require that information given to subjects as part 
of informed consent is in accordance with Sec. 11.116. The IRB may 
require that information, in addition to that specifically mentioned in 
Sec. 11.116, be given to the subjects when in the IRB's judgment the 
information would meaningfully add to the protection of the rights and 
welfare of subjects.
    (c) An IRB shall require documentation of informed consent or may 
waive documentation in accordance with Sec. 11.117.
    (d) An IRB shall notify investigators and the institution in writing 
of its decision to approve or disapprove the proposed research activity, 
or of modifications required to secure IRB approval of the research 
activity. If the IRB decides to disapprove a research activity, it shall 
include in its written notification a statement of the reasons for its 
decision and give the investigator an opportunity to respond in person 
or in writing.
    (e) An IRB shall conduct continuing review of research covered by 
this policy at intervals appropriate to the degree of risk, but not less 
than once per year, and shall have authority to observe or have a third 
party observe the consent process and the research.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)

[56 FR 28012, 28022, June 18, 1991, as amended at 70 FR 36328, June 23, 
2005]



Sec. 11.110  Expedited review procedures for certain kinds of research
involving no more than minimal risk, and for minor changes in approved 

research.

    (a) The Secretary, HHS, has established, and published as a Notice 
in the Federal Register, a list of categories of research that may be 
reviewed by the IRB through an expedited review procedure. The list will 
be amended, as appropriate after consultation with other departments and 
agencies, through periodic republication by the Secretary, HHS, in the 
Federal Register. A copy of the list is available from the Office for 
Human Research Protections, HHS, or any successor office.
    (b) An IRB may use the expedited review procedure to review either 
or both of the following:
    (1) Some or all of the research appearing on the list and found by 
the reviewer(s) to involve no more than minimal risk,
    (2) Minor changes in previously approved research during the period 
(of one year or less) for which approval is authorized.


Under an expedited review procedure, the review may be carried out by 
the IRB chairperson or by one or more experienced reviewers designated 
by the chairperson from among members of the IRB. In reviewing the 
research, the reviewers may exercise all of the authorities of the IRB 
except that the reviewers may not disapprove the research. A research 
activity may be disapproved only after review in accordance with the 
non-expedited procedure set forth in Sec. 11.108(b).
    (c) Each IRB which uses an expedited review procedure shall adopt a 
method for keeping all members advised of research proposals which have 
been approved under the procedure.
    (d) The department or agency head may restrict, suspend, terminate, 
or choose not to authorize an institution's or IRB's use of the 
expedited review procedure.

[56 FR 28012, 28022, June 18, 1991, as amended at 70 FR 36328, June 23, 
2005]

[[Page 105]]



Sec. 11.111  Criteria for IRB approval of research.

    (a) In order to approve research covered by this policy the IRB 
shall determine that all of the following requirements are satisfied:
    (1) Risks to subjects are minimized: (i) By using procedures which 
are consistent with sound research design and which do not unnecessarily 
expose subjects to risk, and (ii) whenever appropriate, by using 
procedures already being performed on the subjects for diagnostic or 
treatment purposes.
    (2) Risks to subjects are reasonable in relation to anticipated 
benefits, if any, to subjects, and the importance of the knowledge that 
may reasonably be expected to result. In evaluating risks and benefits, 
the IRB should consider only those risks and benefits that may result 
from the research (as distinguished from risks and benefits of therapies 
subjects would receive even if not participating in the research). The 
IRB should not consider possible long-range effects of applying 
knowledge gained in the research (for example, the possible effects of 
the research on public policy) as among those research risks that fall 
within the purview of its responsibility.
    (3) Selection of subjects is equitable. In making this assessment 
the IRB should take into account the purposes of the research and the 
setting in which the research will be conducted and should be 
particularly cognizant of the special problems of research involving 
vulnerable populations, such as children, prisoners, pregnant women, 
mentally disabled persons, or economically or educationally 
disadvantaged persons.
    (4) Informed consent will be sought from each prospective subject or 
the subject's legally authorized representative, in accordance with, and 
to the extent required by Sec. 11.116.
    (5) Informed consent will be appropriately documented, in accordance 
with, and to the extent required by Sec. 11.117.
    (6) When appropriate, the research plan makes adequate provision for 
monitoring the data collected to ensure the safety of subjects.
    (7) When appropriate, there are adequate provisions to protect the 
privacy of subjects and to maintain the confidentiality of data.
    (b) When some or all of the subjects are likely to be vulnerable to 
coercion or undue influence, such as children, prisoners, pregnant 
women, mentally disabled persons, or economically or educationally 
disadvantaged persons, additional safeguards have been included in the 
study to protect the rights and welfare of these subjects.



Sec. 11.112  Review by institution.

    Research covered by this policy that has been approved by an IRB may 
be subject to further appropriate review and approval or disapproval by 
officials of the institution. However, those officials may not approve 
the research if it has not been approved by an IRB.



Sec. 11.113  Suspension or termination of IRB approval of research.

    An IRB shall have authority to suspend or terminate approval of 
research that is not being conducted in accordance with the IRB's 
requirements or that has been associated with unexpected serious harm to 
subjects. Any suspension or termination of approval shall include a 
statement of the reasons for the IRB's action and shall be reported 
promptly to the investigator, appropriate institutional officials, and 
the department or agency head.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)

[56 FR 28012, 28022, June 18, 1991, as amended at 70 FR 36328, June 23, 
2005]



Sec. 11.114  Cooperative research.

    Cooperative research projects are those projects covered by this 
policy which involve more than one institution. In the conduct of 
cooperative research projects, each institution is responsible for 
safeguarding the rights and welfare of human subjects and for complying 
with this policy. With the approval of the department or agency head, an 
institution participating in a cooperative project may enter into a 
joint review arrangement, rely upon the review of another qualified IRB, 
or make similar arrangements for avoiding duplication of effort.

[[Page 106]]



Sec. 11.115  IRB records.

    (a) An institution, or when appropriate an IRB, shall prepare and 
maintain adequate documentation of IRB activities, including the 
following:
    (1) Copies of all research proposals reviewed, scientific 
evaluations, if any, that accompany the proposals, approved sample 
consent documents, progress reports submitted by investigators, and 
reports of injuries to subjects.
    (2) Minutes of IRB meetings which shall be in sufficient detail to 
show attendance at the meetings; actions taken by the IRB; the vote on 
these actions including the number of members voting for, against, and 
abstaining; the basis for requiring changes in or disapproving research; 
and a written summary of the discussion of controverted issues and their 
resolution.
    (3) Records of continuing review activities.
    (4) Copies of all correspondence between the IRB and the 
investigators.
    (5) A list of IRB members in the same detail as described is Sec. 
11.103(b)(3).
    (6) Written procedures for the IRB in the same detail as described 
in Sec. 11.103(b)(4) and Sec. 11.103(b)(5).
    (7) Statements of significant new findings provided to subjects, as 
required by Sec. 11.116(b)(5).
    (b) The records required by this policy shall be retained for at 
least 3 years, and records relating to research which is conducted shall 
be retained for at least 3 years after completion of the research. All 
records shall be accessible for inspection and copying by authorized 
representatives of the department or agency at reasonable times and in a 
reasonable manner.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)

[56 FR 28012, 28022, June 18, 1991, as amended at 70 FR 36328, June 23, 
2005]



Sec. 11.116  General requirements for informed consent.

    Except as provided elsewhere in this policy, no investigator may 
involve a human being as a subject in research covered by this policy 
unless the investigator has obtained the legally effective informed 
consent of the subject or the subject's legally authorized 
representative. An investigator shall seek such consent only under 
circumstances that provide the prospective subject or the representative 
sufficient opportunity to consider whether or not to participate and 
that minimize the possibility of coercion or undue influence. The 
information that is given to the subject or the representative shall be 
in language understandable to the subject or the representative. No 
informed consent, whether oral or written, may include any exculpatory 
language through which the subject or the representative is made to 
waive or appear to waive any of the subject's legal rights, or releases 
or appears to release the investigator, the sponsor, the institution or 
its agents from liability for negligence.
    (a) Basic elements of informed consent. Except as provided in 
paragraph (c) or (d) of this section, in seeking informed consent the 
following information shall be provided to each subject:
    (1) A statement that the study involves research, an explanation of 
the purposes of the research and the expected duration of the subject's 
participation, a description of the procedures to be followed, and 
identification of any procedures which are experimental;
    (2) A description of any reasonably foreseeable risks or discomforts 
to the subject;
    (3) A description of any benefits to the subject or to others which 
may reasonably be expected from the research;
    (4) A disclosure of appropriate alternative procedures or courses of 
treatment, if any, that might be advantageous to the subject;
    (5) A statement describing the extent, if any, to which 
confidentiality of records identifying the subject will be maintained;
    (6) For research involving more than minimal risk, an explanation as 
to whether any compensation and an explanation as to whether any medical 
treatments are available if injury occurs and, if so, what they consist 
of, or where further information may be obtained;
    (7) An explanation of whom to contact for answers to pertinent 
questions about the research and research subjects' rights, and whom to 
contact in

[[Page 107]]

the event of a research-related injury to the subject; and
    (8) A statement that participation is voluntary, refusal to 
participate will involve no penalty or loss of benefits to which the 
subject is otherwise entitled, and the subject may discontinue 
participation at any time without penalty or loss of benefits to which 
the subject is otherwise entitled.
    (b) Additional elements of informed consent. When appropriate, one 
or more of the following elements of information shall also be provided 
to each subject:
    (1) A statement that the particular treatment or procedure may 
involve risks to the subject (or to the embryo or fetus, if the subject 
is or may become pregnant) which are currently unforeseeable;
    (2) Anticipated circumstances under which the subject's 
participation may be terminated by the investigator without regard to 
the subject's consent;
    (3) Any additional costs to the subject that may result from 
participation in the research;
    (4) The consequences of a subject's decision to withdraw from the 
research and procedures for orderly termination of participation by the 
subject;
    (5) A statement that significant new findings developed during the 
course of the research which may relate to the subject's willingness to 
continue participation will be provided to the subject; and
    (6) The approximate number of subjects involved in the study.
    (c) An IRB may approve a consent procedure which does not include, 
or which alters, some or all of the elements of informed consent set 
forth above, or waive the requirement to obtain informed consent 
provided the IRB finds and documents that:
    (1) The research or demonstration project is to be conducted by or 
subject to the approval of state or local government officials and is 
designed to study, evaluate, or otherwise examine: (i) public benefit of 
service programs; (ii) procedures for obtaining benefits or services 
under those programs; (iii) possible changes in or alternatives to those 
programs or procedures; or (iv) possible changes in methods or levels of 
payment for benefits or services under those programs; and
    (2) The research could not practicably be carried out without the 
waiver or alteration.
    (d) An IRB may approve a consent procedure which does not include, 
or which alters, some or all of the elements of informed consent set 
forth in this section, or waive the requirements to obtain informed 
consent provided the IRB finds and documents that:
    (1) The research involves no more than minimal risk to the subjects;
    (2) The waiver or alteration will not adversely affect the rights 
and welfare of the subjects;
    (3) The research could not practicably be carried out without the 
waiver or alteration; and
    (4) Whenever appropriate, the subjects will be provided with 
additional pertinent information after participation.
    (e) The informed consent requirements in this policy are not 
intended to preempt any applicable Federal, state, or local laws which 
require additional information to be disclosed in order for informed 
consent to be legally effective.
    (f) Nothing in this policy is intended to limit the authority of a 
physician to provide emergency medical care, to the extent the physician 
is permitted to do so under applicable Federal, state, or local law.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)

[56 FR 28012, 28022, June 18, 1991, as amended at 70 FR 36328, June 23, 
2005]



Sec. 11.117  Documentation of informed consent.

    (a) Except as provided in paragraph (c) of this section, informed 
consent shall be documented by the use of a written consent form 
approved by the IRB and signed by the subject or the subject's legally 
authorized representative. A copy shall be given to the person signing 
the form.
    (b) Except as provided in paragraph (c) of this section, the consent 
form may be either of the following:
    (1) A written consent document that embodies the elements of 
informed consent required by Sec. 11.116. This form

[[Page 108]]

may be read to the subject or the subject's legally authorized 
representative, but in any event, the investigator shall give either the 
subject or the representative adequate opportunity to read it before it 
is signed; or
    (2) A short form written consent document stating that the elements 
of informed consent required by Sec. 11.116 have been presented orally 
to the subject or the subject's legally authorized representative. When 
this method is used, there shall be a witness to the oral presentation. 
Also, the IRB shall approve a written summary of what is to be said to 
the subject or the representative. Only the short form itself is to be 
signed by the subject or the representative. However, the witness shall 
sign both the short form and a copy of the summary, and the person 
actually obtaining consent shall sign a copy of the summary. A copy of 
the summary shall be given to the subject or the representative, in 
addition to a copy of the short form.
    (c) An IRB may waive the requirement for the investigator to obtain 
a signed consent form for some or all subjects if it finds either:
    (1) That the only record linking the subject and the research would 
be the consent document and the principal risk would be potential harm 
resulting from a breach of confidentiality. Each subject will be asked 
whether the subject wants documentation linking the subject with the 
research, and the subject's wishes will govern; or
    (2) That the research presents no more than minimal risk of harm to 
subjects and involves no procedures for which written consent is 
normally required outside of the research context.
    In cases in which the documentation requirement is waived, the IRB 
may require the investigator to provide subjects with a written 
statement regarding the research.

(Approved by the Office of Management and Budget under Control Number 
0990-0260)

[56 FR 28012, 28022, June 18, 1991, as amended at 70 FR 36328, June 23, 
2005]



Sec. 11.118  Applications and proposals lacking definite plans for
involvement of human subjects.

    Certain types of applications for grants, cooperative agreements, or 
contracts are submitted to departments or agencies with the knowledge 
that subjects may be involved within the period of support, but definite 
plans would not normally be set forth in the application or proposal. 
These include activities such as institutional type grants when 
selection of specific projects is the institution's responsibility; 
research training grants in which the activities involving subjects 
remain to be selected; and projects in which human subjects' involvement 
will depend upon completion of instruments, prior animal studies, or 
purification of compounds. These applications need not be reviewed by an 
IRB before an award may be made. However, except for research exempted 
or waived under Sec. 11.101 (b) or (i), no human subjects may be 
involved in any project supported by these awards until the project has 
been reviewed and approved by the IRB, as provided in this policy, and 
certification submitted, by the institution, to the department or 
agency.



Sec. 11.119  Research undertaken without the intention of involving
human subjects.

    In the event research is undertaken without the intention of 
involving human subjects, but it is later proposed to involve human 
subjects in the research, the research shall first be reviewed and 
approved by an IRB, as provided in this policy, a certification 
submitted, by the institution, to the department or agency, and final 
approval given to the proposed change by the department or agency.



Sec. 11.120  Evaluation and disposition of applications and proposals
for research to be conducted or supported by a Federal Department or 

Agency.

    The department or agency head will evaluate all applications and 
proposals involving human subjects submitted to the department or agency 
through such officers and employees of the department or agency and such 
experts and consultants as the department or agency head determines to 
be appropriate. This evaluation will take into consideration the risks 
to the subjects, the adequacy of protection against these risks, the 
potential benefits of the research to the subjects and others, and

[[Page 109]]

the importance of the knowledge gained or to be gained.
    (b) On the basis of this evaluation, the department or agency head 
may approve or disapprove the application or proposal, or enter into 
negotiations to develop an approvable one.



Sec. 11.121  [Reserved]



Sec. 11.122  Use of Federal funds.

    Federal funds administered by a department or agency may not be 
expended for research involving human subjects unless the requirements 
of this policy have been satisfied.



Sec. 11.123  Early termination of research support: Evaluation of
applications and proposals.

    (a) The department or agency head may require that department or 
agency support for any project be terminated or suspended in the manner 
prescribed in applicable program requirements, when the department or 
agency head finds an institution has materially failed to comply with 
the terms of this policy.
    (b) In making decisions about supporting or approving applications 
or proposals covered by this policy the department or agency head may 
take into account, in addition to all other eligibility requirements and 
program criteria, factors such as whether the applicant has been subject 
to a termination or suspension under paragarph (a) of this section and 
whether the applicant or the person or persons who would direct or has/
have directed the scientific and technical aspects of an activity has/
have, in the judgment of the department or agency head, materially 
failed to discharge responsibility for the protection of the rights and 
welfare of human subjects (whether or not the research was subject to 
Federal regulation).



Sec. 11.124  Conditions.

    With respect to any research project or any class of research 
projects the department or agency head may impose additional conditions 
prior to or at the time of approval when in the judgment of the 
department or agency head additional conditions are necessary for the 
protection of human subjects.



PART 15_PROTECTION OF SENSITIVE SECURITY INFORMATION--Table of Contents



Sec.
15.1 Scope.
15.3 Terms used in this part.
15.5 Sensitive security information.
15.7 Covered persons.
15.9 Restrictions on the disclosure of SSI.
15.11 Persons with a need to know.
15.13 Marking SSI.
15.15 SSI disclosed by DOT.
15.17 Consequences of unauthorized disclosure of SSI.
15.19 Destruction of SSI.

    Authority: 49 U.S.C. 40119.

    Source: 69 FR 28078, May 18, 2004, unless otherwise noted.



Sec. 15.1  Scope.

    (a) Applicability. This part governs the maintenance, safeguarding, 
and disclosure of records and information that the Secretary of DOT has 
determined to be Sensitive Security Information, as defined in Sec. 
15.5. This part does not apply to the maintenance, safeguarding, or 
disclosure of classified national security information, as defined by 
Executive Order 12968, or to other sensitive unclassified information 
that is not SSI, but that nonetheless may be exempt from public 
disclosure under the Freedom of Information Act. In addition, in the 
case of information that has been designated as critical infrastructure 
information under section 214 of the Homeland Security Act, the receipt, 
maintenance, or disclosure of such information by a Federal agency or 
employee is governed by section 214 and any implementing regulations, 
not by this part.
    (b) Delegation. The authority of the Secretary under this part may 
be further delegated within DOT.



Sec. 15.3  Terms used in this part.

    In addition to the terms in Sec. 15.3 of this chapter, the 
following terms apply in this part:
    Administrator means the Under Secretary of Transportation for 
Security referred to in 49 U.S.C. 114(b), or his or her designee.
    Coast Guard means the United States Coast Guard.
    Covered person means any organization, entity, individual, or other 
person

[[Page 110]]

described in Sec. 15.7. In the case of an individual, covered person 
includes any individual applying for employment in a position that would 
be a covered person, or in training for such a position, regardless of 
whether that individual is receiving a wage, salary, or other form of 
payment. Covered person includes a person applying for certification or 
other form of approval that, if granted, would make the person a covered 
person described in Sec. 15.7.
    DHS means the Department of Homeland Security and any directorate, 
bureau, or other component within the Department of Homeland Security, 
including the United States Coast Guard.
    DOT means the Department of Transportation and any operating 
administration, entity, or office within the Department of 
Transportation, including the Saint Lawrence Seaway Development 
Corporation and the Bureau of Transportation Statistics.
    Federal Flight Deck Officer means a pilot participating in the 
Federal Flight Deck Officer Program under 49 U.S.C. 44921 and 
implementing regulations.
    Maritime facility means any facility as defined in 33 CFR part 101.
    Record includes any means by which information is preserved, 
irrespective of format, including a book, paper, drawing, map, 
recording, tape, film, photograph, machine-readable material, and any 
information stored in an electronic format. The term record also 
includes any draft, proposed, or recommended change to any record.
    Security contingency plan means a plan detailing response procedures 
to address a transportation security incident, threat assessment, or 
specific threat against transportation, including details of 
preparation, response, mitigation, recovery, and reconstitution 
procedures, continuity of government, continuity of transportation 
operations, and crisis management.
    Security program means a program or plan and any amendments 
developed for the security of the following, including any comments, 
instructions, or implementing guidance:
    (1) An airport, aircraft, or aviation cargo operation;
    (2) A maritime facility, vessel, or port area; or
    (3) A transportation-related automated system or network for 
information processing, control, and communications.
    Security screening means evaluating a person or property to 
determine whether either poses a threat to security.
    SSI means sensitive security information, as described in Sec. 
15.5.
    Threat image projection system means an evaluation tool that 
involves periodic presentation of fictional threat images to operators 
and is used in connection with x-ray or explosives detection systems 
equipment.
    TSA means the Transportation Security Administration.
    Vulnerability assessment means any review, audit, or other 
examination of the security of a transportation infrastructure asset; 
airport; maritime facility, port area, vessel, aircraft, train, 
commercial motor vehicle, or pipeline, or a transportation-related 
automated system or network, to determine its vulnerability to unlawful 
interference, whether during the conception, planning, design, 
construction, operation, or decommissioning phase. A vulnerability 
assessment may include proposed, recommended, or directed actions or 
countermeasures to address security concerns.



Sec. 15.5  Sensitive security information.

    (a) In general. In accordance with 49 U.S.C. 40119(b)(1), SSI is 
information obtained or developed in the conduct of security activities, 
including research and development, the disclosure of which the 
Secretary of DOT has determined would--
    (1) Constitute an unwarranted invasion of privacy (including, but 
not limited to, information contained in any personnel, medical, or 
similar file);
    (2) Reveal trade secrets or privileged or confidential information 
obtained from any person; or
    (3) Be detrimental to transportation safety.
    (b) Information constituting SSI. Except as otherwise provided in 
writing by the Secretary of DOT in the interest of public safety or in 
furtherance of transportation security, the following information, and 
records containing such information, constitute SSI:

[[Page 111]]

    (1) Security programs and contingency plans. Any security program or 
security contingency plan issued, established, required, received, or 
approved by DOT or DHS, including--
    (i) Any aircraft operator or airport operator security program or 
security contingency plan under this chapter;
    (ii) Any vessel, maritime facility, or port area security plan 
required or directed under Federal law;
    (iii) Any national or area security plan prepared under 46 U.S.C. 
70103; and
    (iv) Any security incident response plan established under 46 U.S.C. 
70104.
    (2) Security Directives. Any Security Directive or order--
    (i) Issued by TSA under 49 CFR 1542.303, 1544.305, or other 
authority;
    (ii) Issued by the Coast Guard under the Maritime Transportation 
Security Act, 33 CFR part 6, or 33 U.S.C. 1221 et seq. related to 
maritime security; or
    (iii) Any comments, instructions, and implementing guidance 
pertaining thereto.
    (3) Information Circulars. Any notice issued by DHS or DOT regarding 
a threat to aviation or maritime transportation, including any--
    (i) Information Circular issued by TSA under 49 CFR 1542.303 or 
1544.305, or other authority; and
    (ii) Navigation or Vessel Inspection Circular issued by the Coast 
Guard related to maritime security.
    (4) Performance specifications. Any performance specification and 
any description of a test object or test procedure, for--
    (i) Any device used by the Federal government or any other person 
pursuant to any aviation or maritime transportation security 
requirements of Federal law for the detection of any weapon, explosive, 
incendiary, or destructive device or substance; and
    (ii) Any communications equipment used by the Federal government or 
any other person in carrying out or complying with any aviation or 
maritime transportation security requirements of Federal law.
    (5) Vulnerability assessments. Any vulnerability assessment 
directed, created, held, funded, or approved by the DOT, DHS, or that 
will be provided to DOT or DHS in support of a Federal security program.
    (6) Security inspection or investigative information. (i) Details of 
any security inspection or investigation of an alleged violation of 
aviation or maritime transportation security requirements of Federal law 
that could reveal a security vulnerability, including the identity of 
the Federal special agent or other Federal employee who conducted the 
inspection or audit.
    (ii) In the case of inspections or investigations performed by TSA, 
this includes the following information as to events that occurred 
within 12 months of the date of release of the information: the name of 
the airport where a violation occurred, the airport identifier in the 
case number, a description of the violation, the regulation allegedly 
violated, and the identity of any aircraft operator in connection with 
specific locations or specific security procedures. Such information 
will be released after the relevant 12-month period, except that TSA 
will not release the specific gate or other location on an airport where 
an event occurred, regardless of the amount of time that has passed 
since its occurrence. During the period within 12 months of the date of 
release of the information, TSA may release summaries of an aircraft 
operator's, but not an airport operator's, total security violations in 
a specified time range without identifying specific violations or 
locations. Summaries may include total enforcement actions, total 
proposed civil penalty amounts, number of cases opened, number of cases 
referred to TSA or FAA counsel for legal enforcement action, and number 
of cases closed.
    (7) Threat information. Any information held by the Federal 
government concerning threats against transportation or transportation 
systems and sources and methods used to gather or develop threat 
information, including threats against cyber infrastructure.
    (8) Security measures. Specific details of aviation or maritime 
transportation security measures, both operational and technical, 
whether applied directly by the Federal government or another person, 
including--
    (i) Security measures or protocols recommended by the Federal 
government;

[[Page 112]]

    (ii) Information concerning the deployments, numbers, and operations 
of Coast Guard personnel engaged in maritime security duties and Federal 
Air Marshals, to the extent it is not classified national security 
information; and
    (iii) Information concerning the deployments and operations of 
Federal Flight Deck Officers, and numbers of Federal Flight Deck 
Officers aggregated by aircraft operator.
    (9) Security screening information. The following information 
regarding security screening under aviation or maritime transportation 
security requirements of Federal law:
    (i) Any procedures, including selection criteria and any comments, 
instructions, and implementing guidance pertaining thereto, for 
screening of persons, accessible property, checked baggage, U.S. mail, 
stores, and cargo, that is conducted by the Federal government or any 
other authorized person.
    (ii) Information and sources of information used by a passenger or 
property screening program or system, including an automated screening 
system.
    (iii) Detailed information about the locations at which particular 
screening methods or equipment are used, only if determined by TSA to be 
SSI.
    (iv) Any security screener test and scores of such tests.
    (v) Performance or testing data from security equipment or screening 
systems.
    (vi) Any electronic image shown on any screening equipment monitor, 
including threat images and descriptions of threat images for threat 
image projection systems.
    (10) Security training materials. Records created or obtained for 
the purpose of training persons employed by, contracted with, or acting 
for the Federal government or another person to carry out any aviation 
or maritime transportation security measures required or recommended by 
DHS or DOT.
    (11) Identifying information of certain transportation security 
personnel. (i) Lists of the names or other identifying information that 
identify persons as--
    (A) Having unescorted access to a secure area of an airport or a 
secure or restricted area of a maritime facility, port area, or vessel 
or;
    (B) Holding a position as a security screener employed by or under 
contract with the Federal government pursuant to aviation or maritime 
transportation security requirements of Federal law, where such lists 
are aggregated by airport;
    (C) Holding a position with the Coast Guard responsible for 
conducting vulnerability assessments, security boardings, or engaged in 
operations to enforce maritime security requirements or conduct force 
protection;
    (D) Holding a position as a Federal Air Marshal; or
    (ii) The name or other identifying information that identifies a 
person as a current, former, or applicant for Federal Flight Deck 
Officer.
    (12) Critical aviation or maritime infrastructure asset information. 
Any list identifying systems or assets, whether physical or virtual, so 
vital to the aviation or maritime transportation system that the 
incapacity or destruction of such assets would have a debilitating 
impact on transportation security, if the list is--
    (i) Prepared by DHS or DOT; or
    (ii) Prepared by a State or local government agency and submitted by 
the agency to DHS or DOT.
    (13) Systems security information. Any information involving the 
security of operational or administrative data systems operated by the 
Federal government that have been identified by the DOT or DHS as 
critical to aviation or maritime transportation safety or security, 
including automated information security procedures and systems, 
security inspections, and vulnerability information concerning those 
systems.
    (14) Confidential business information. (i) Solicited or unsolicited 
proposals received by DHS or DOT, and negotiations arising therefrom, to 
perform work pursuant to a grant, contract, cooperative agreement, or 
other transaction, but only to the extent that the subject matter of the 
proposal relates to aviation or maritime transportation security 
measures;
    (ii) Trade secret information, including information required or 
requested by regulation or Security Directive, obtained by DHS or DOT in 
carrying

[[Page 113]]

out aviation or maritime transportation security responsibilities; and
    (iii) Commercial or financial information, including information 
required or requested by regulation or Security Directive, obtained by 
DHS or DOT in carrying out aviation or maritime transportation security 
responsibilities, but only if the source of the information does not 
customarily disclose it to the public.
    (15) Research and development. Information obtained or developed in 
the conduct of research related to aviation or maritime transportation 
security activities, where such research is approved, accepted, funded, 
recommended, or directed by the DHS or DOT, including research results.
    (16) Other information. Any information not otherwise described in 
this section that TSA determines is SSI under 49 U.S.C. 114(s) or that 
the Secretary of DOT determines is SSI under 49 U.S.C. 40119. Upon the 
request of another Federal agency, the Secretary of DOT may designate as 
SSI information not otherwise described in this section.
    (c) Loss of SSI designation. The Secretary of DOT may determine in 
writing that information or records described in paragraph (b) of this 
section do not constitute SSI because they no longer meet the criteria 
set forth in paragraph (a) of this section.



Sec. 15.7  Covered persons.

    Persons subject to the requirements of part 15 are:
    (a) Each airport operator and aircraft operator subject to the 
requirements of Subchapter C of this title.
    (b) Each indirect air carrier, as defined in 49 CFR 1540.5.
    (c) Each owner, charterer, or operator of a vessel, including 
foreign vessel owners, charterers, and operators, required to have a 
security plan under Federal or International law.
    (d) Each owner or operator of a maritime facility required to have a 
security plan under the Maritime Transportation Security Act, (Pub. L. 
107-295), 46 U.S.C. 70101 et seq., 33 CFR part 6, or 33 U.S.C. 1221 et 
seq.
    (e) Each person performing the function of a computer reservation 
system or global distribution system for airline passenger information.
    (f) Each person participating in a national or area security 
committee established under 46 U.S.C. 70112, or a port security 
committee.
    (g) Each industry trade association that represents covered persons 
and has entered into a non-disclosure agreement with the DHS or DOT.
    (h) DHS and DOT.
    (i) Each person conducting research and development activities that 
relate to aviation or maritime transportation security and are approved, 
accepted, funded, recommended, or directed by DHS or DOT.
    (j) Each person who has access to SSI, as specified in Sec. 15.11.
    (k) Each person employed by, contracted to, or acting for a covered 
person, including a grantee of DHS or DOT, and including a person 
formerly in such position.
    (l) Each person for which a vulnerability assessment has been 
directed, created, held, funded, or approved by the DOT, DHS, or that 
has prepared a vulnerability assessment that will be provided to DOT or 
DHS in support of a Federal security program.
    (m) Each person receiving SSI under Sec. 1520.15(d) or (e).



Sec. 15.9  Restrictions on the disclosure of SSI.

    (a) Duty to protect information. A covered person must--
    (1) Take reasonable steps to safeguard SSI in that person's 
possession or control from unauthorized disclosure. When a person is not 
in physical possession of SSI, the person must store it a secure 
container, such as a locked desk or file cabinet or in a locked room.
    (2) Disclose, or otherwise provide access to, SSI only to covered 
persons who have a need to know, unless otherwise authorized in writing 
by TSA, the Coast Guard, or the Secretary of DOT.
    (3) Refer requests by other persons for SSI to TSA or the applicable 
component or agency within DOT or DHS.
    (4) Mark SSI as specified in Sec. 15.13.
    (5) Dispose of SSI as specified in Sec. 15.19.
    (b) Unmarked SSI. If a covered person receives a record containing 
SSI that is not marked as specified in Sec. 1520.13, the covered person 
must--

[[Page 114]]

    (1) Mark the record as specified in Sec. 15.13; and
    (2) Inform the sender of the record that the record must be marked 
as specified in Sec. 15.13.
    (c) Duty to report unauthorized disclosure. When a covered person 
becomes aware that SSI has been released to unauthorized persons, the 
covered person must promptly inform TSA or the applicable DOT or DHS 
component or agency.
    (d) Additional requirements for critical infrastructure information. 
In the case of information that is both SSI and has been designated as 
critical infrastructure information under section 214 of the Homeland 
Security Act, any covered person who is a Federal employee in possession 
of such information must comply with the disclosure restrictions and 
other requirements applicable to such information under section 214 and 
any implementing regulations.



Sec. 15.11  Persons with a need to know.

    (a) In general. A person has a need to know SSI in each of the 
following circumstances:
    (1) When the person requires access to specific SSI to carry out 
transportation security activities approved, accepted, funded, 
recommended, or directed by DHS or DOT.
    (2) When the person is in training to carry out transportation 
security activities approved, accepted, funded, recommended, or directed 
by DHS or DOT.
    (3) When the information is necessary for the person to supervise or 
otherwise manage individuals carrying out transportation security 
activities approved, accepted, funded, recommended, or directed by the 
DHS or DOT.
    (4) When the person needs the information to provide technical or 
legal advice to a covered person regarding transportation security 
requirements of Federal law.
    (5) When the person needs the information to represent a covered 
person in connection with any judicial or administrative proceeding 
regarding those requirements.
    (b) Federal employees, contractors, and grantees. (1) A Federal 
employee has a need to know SSI if access to the information is 
necessary for performance of the employee's official duties.
    (2) A person acting in the performance of a contract with or grant 
from DHS or DOT has a need to know SSI if access to the information is 
necessary to performance of the contract or grant.
    (c) Background check. The Secretary of DOT may make an individual's 
access to the SSI contingent upon satisfactory completion of a security 
background check and the imposition of procedures and requirements for 
safeguarding SSI that are satisfactory to the Secretary.
    (d) Need to know further limited by the DHS or DOT. For some 
specific SSI, DHS or DOT may make a finding that only specific persons 
or classes of persons have a need to know.

[69 FR 28078, May 18, 2004, as amended at 70 FR 1381, Jan. 7, 2005]



Sec. 15.13  Marking SSI.

    (a) Marking of paper records. In the case of paper records 
containing SSI, a covered person must mark the record by placing the 
protective marking conspicuously on the top, and the distribution 
limitation statement on the bottom, of--
    (1) The outside of any front and back cover, including a binder 
cover or folder, if the document has a front and back cover;
    (2) Any title page; and
    (3) Each page of the document.
    (b) Protective marking. The protective marking is: SENSITIVE 
SECURITY INFORMATION.
    (c) Distribution limitation statement. The distribution limitation 
statement is:

    WARNING: This record contains Sensitive Security Information that is 
controlled under 49 CFR parts 15 and 1520. No part of this record may be 
disclosed to persons without a ``need to know'', as defined in 49 CFR 
parts 15 and 1520, except with the written permission of the 
Administrator of the Transportation Security Administration or the 
Secretary of Transportation. Unauthorized release may result in civil 
penalty or other action. For U.S. government agencies, public disclosure 
is governed by 5 U.S.C. 552 and 49 CFR parts 15 and 1520.

    (d) Other types of records. In the case of non-paper records that 
contain SSI,

[[Page 115]]

including motion picture films, videotape recordings, audio recording, 
and electronic and magnetic records, a covered person must clearly and 
conspicuously mark the records with the protective marking and the 
distribution limitation statement such that the viewer or listener is 
reasonably likely to see or hear them when obtaining access to the 
contents of the record.



Sec. 15.15  SSI disclosed by DOT.

    (a) In general. Except as otherwise provided in this section, and 
notwithstanding the Freedom of Information Act (5 U.S.C. 552), the 
Privacy Act (5 U.S.C. 552a), and other laws, records containing SSI are 
not available for public inspection or copying, nor does DOT release 
such records to persons without a need to know.
    (b) Disclosure under the Freedom of Information Act and the Privacy 
Act. If a record contains both SSI and information that is not SSI, DOT, 
on a proper Freedom of Information Act or Privacy Act request, may 
disclose the record with the SSI redacted, provided the record is not 
otherwise exempt from disclosure under the Freedom of Information Act or 
Privacy Act.
    (c) Disclosures to committees of Congress and the General Accounting 
Office. Nothing in this part precludes DOT from disclosing SSI to a 
committee of Congress authorized to have the information or to the 
Comptroller General, or to any authorized representative of the 
Comptroller General.
    (d) Disclosure in enforcement proceedings--(1) In general. The 
Secretary of DOT may provide SSI to a person in the context of an 
administrative enforcement proceeding when, in the sole discretion of 
the Secretary, access to the SSI is necessary for the person to prepare 
a response to allegations contained in a legal enforcement action 
document issued by DOT.
    (2) Security background check. Prior to providing SSI to a person 
under paragraph (d)(1) of this section, the Secretary of DOT may require 
the individual or, in the case of an entity, the individuals 
representing the entity, and their counsel, to undergo and satisfy, in 
the judgment of the Secretary of DOT, a security background check.
    (e) Other conditional disclosure. The Secretary of DOT may authorize 
a conditional disclosure of specific records or information that 
constitute SSI upon the written determination by the Secretary that 
disclosure of such records or information, subject to such limitations 
and restrictions as the Secretary may prescribe, would not be 
detrimental to transportation safety.
    (f) Obligation to protect information. When an individual receives 
SSI pursuant to paragraph (d) or (e) of this section that individual 
becomes a covered person under Sec. 15.7 and is subject to the 
obligations of a covered person under this part.
    (g) No release under FOIA. When DOT discloses SSI pursuant to 
paragraphs (b) through (e) of this section, DOT makes the disclosure for 
the sole purpose described in that paragraph. Such disclosure is not a 
public release of information under the Freedom of Information Act.
    (h) Disclosure of Critical Infrastructure Information. Disclosure of 
information that is both SSI and has been designated as critical 
infrastructure information under section 214 of the Homeland Security 
Act is governed solely by the requirements of section 214 and any 
implementing regulations.



Sec. 15.17  Consequences of unauthorized disclosure of SSI.

    Violation of this part is grounds for a civil penalty and other 
enforcement or corrective action by DOT, and appropriate personnel 
actions for Federal employees. Corrective action may include issuance of 
an order requiring retrieval of SSI to remedy unauthorized disclosure or 
an order to cease future unauthorized disclosure.



Sec. 15.19  Destruction of SSI.

    (a) DOT. Subject to the requirements of the Federal Records Act (5 
U.S.C. 105), including the duty to preserve records containing 
documentation of a Federal agency's policies, decisions, and essential 
transactions, DOT destroys SSI when no longer needed to carry out the 
agency's function.
    (b) Other covered persons--(1) In general. A covered person must 
destroy SSI completely to preclude recognition or reconstruction of the 
information

[[Page 116]]

when the covered person no longer needs the SSI to carry out 
transportation security measures.
    (2) Exception. Paragraph (b)(1) of this section does not require a 
State or local government agency to destroy information that the agency 
is required to preserve under State or local law.



PART 17_INTERGOVERNMENTAL REVIEW OF DEPARTMENT OF TRANSPORTATION 
PROGRAMS AND ACTIVITIES--Table of Contents



Sec.
17.1 What is the purpose of these regulations?
17.2 What definitions apply to these regulations?
17.3 What programs and activities of the Department are subject to these 
          regulations?
17.4 [Reserved]
17.5 What is the Secretary's obligation with respect to Federal 
          interagency coordination?
17.6 What procedures apply to the selection of programs and activities 
          under these regulations?
17.7 How does the Secretary communicate with state and local officials 
          concerning the Department's programs and activities?
17.8 How does the secretary provide states an opportunity to comment on 
          proposed Federal financial assistance and direct Federal 
          development?
17.9 How does the Secretary receive and respond to comments?
17.10 How does the Secretary make efforts to accommodate 
          intergovernmental concerns?
17.11 What are the Secretary's obligations in interstate situations?
17.12 How may a state simplify, consolidate, or substitute federally 
          required state plans?
17.13 May the Secretary waive any provision of these regulations?

    Authority: Executive Order 12372, July 14, 1982 (47 FR 30959), as 
amended April 8, 1983 (48 FR 15887): sec. 401 of the Intergovernmental 
Cooperation Act of 1968, as amended (31 U.S.C. 6506); sec. 204 of the 
Demonstration Cities and Metropolitan Development Act of 1966, as 
amended (42 U.S.C. 3334).

    Source: 48 FR 29272, June 24, 1983, unless otherwise noted.



Sec. 17.1  What is the purpose of these regulations?

    (a) The regulations in this part implement Executive Order 12372, 
``Intergovernmental Review of Federal Programs,'' issued July 14, 1982, 
and amended on April 8, 1983. These regulations also implement 
applicable provisions of section 401 of the Intergovernmental 
Cooperation Act of 1968 and section 204 of the Demonstration Cities and 
Metropolitan Development Act of 1966.
    (b) These regulations are intended to foster an intergovernmental 
partnership and a strengthened Federalism by relying on state processes 
and on state, areawide, regional and local coordination for review of 
proposed Federal financial assistance and direct Federal development.
    (c) These regulations are intended to aid the internal management of 
the Department, and are not intended to create any right or benefit 
enforceable at law by a party against the Department or its officers.



Sec. 17.2  What definitions apply to these regulations?

    Department means the U.S. Department of Transportation.
    Order means Executive Order 12372, issued July 14, 1982, and amended 
April 8, 1983, and titled ``Intergovernmental Review of Federal 
Programs.''
    Secretary means the Secretary of the U.S. Department of 
Transportation or an official or employee of the Department acting for 
the Secretary under a delegation of authority.
    State means any of the 50 states, the District of Columbia, the 
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, Guam, American Samoa, the U.S. Virgin Islands, or the Trust 
Territory of the Pacific Islands.



Sec. 17.3  What programs and activities of the Department are subject 
to these regulations?

    The Secretary publishes in the Federal Register a list of the 
Department's programs and activities that are subject to these 
regulations and identifies which of these are subject to the 
requirements of section 204 of the Demonstration Cities and Metropolitan 
Development Act.

[[Page 117]]



Sec. 17.4  [Reserved]



Sec. 17.5  What is the Secretary's obligation with respect to Federal
interagency coordination?

    The Secretary, to the extent practicable, consults with and seeks 
advice from all other substantially affected Federal departments and 
agencies in an effort to assure full coordination between such agencies 
and the Department regarding programs and activities covered under these 
regulations.



Sec. 17.6  What procedures apply to the selection of programs and 
activities under these regulations?

    (a) A state may select any program or activity published in the 
Federal Register in accordance with Sec. 17.3 of this part for 
intergovernmental review under these regulations. Each state, before 
selecting programs and activities shall consult with local elected 
officials.
    (b) Each state that adopts a process shall notify the Secretary of 
the Department's programs and activities selected for that process.
    (c) A state may notify the Secretary of changes in its selections at 
any time. For each change, the state shall submit to the Secretary an 
assurance that the state has consulted with elected local elected 
officials regarding the change. The Department may establish deadlines 
by which states are required to inform the Secretary of changes in their 
program selections.
    (d) The Secretary uses a state's process as soon as feasible, 
depending on individual programs, and activities, after the Secretary is 
notified of its selections.



Sec. 17.7  How does the Secretary communicate with state and local 
officials concerning the Department's programs and activities?

    (a) For those programs and activities covered by a state process 
under Sec. 17.6, the Secretary, to the extent permitted by law:
    (1) Uses the state process to determine views of state and local 
elected officials; and,
    (2) Communicates with state and local elected officials, through the 
state process, as early in a program planning cycle as is reasonably 
feasible to explain specific plans and actions.
    (b) The Secretary provides notice to directly affected state, 
areawide, regional, and local entities in a state of proposed Federal 
financial assistance or direct Federal development if:
    (1) The state has not adopted a process under the Order; or
    (2) The assistance or development involves a program or activity not 
selected for the state process.


This notice may be made by publication in the Federal Register or other 
appropriate means, which the Department in its discretion deems 
appropriate.



Sec. 17.8  How does the Secretary provide states an opportunity to 
comment on proposed Federal financial assistance and direct Federal

development?

    (a) Except in unusual circumstances, the Secretary gives state 
processes or state, areawide, regional and local officials and entities 
at least:
    (1) [Reserved]
    (2) 60 days from the date established by the Secretary to comment on 
proposed direct Federal development or Federal financial assistance.
    (b) This section also applies to comments in cases in which the 
review, coordination, and communication with the Department have been 
delegated.
    (c) Applicants for programs and activities subject to section 204 of 
the Demonstration Cities and Metropolitan Act shall allow areawide 
agencies a 60-day opportunity for review and comment.



Sec. 17.9  How does the Secretary receive and respond to comments?

    (a) The Secretary follows the procedures in Sec. 17.10 if:
    (1) A state office or official is designated to act as a single 
point of contact between a state process and all federal agencies, and
    (2) That office or official transmits a state process recommendation 
for a program selected under Sec. 17.6.
    (b)(1) The single point of contact is not obligated to transmit 
comments from state, areawide, regional or local officials and entities 
where there is no state process recommendation.

[[Page 118]]

    (2) If a state process recommendation is transmitted by a single 
point of contact, all comments from state, areawide, regional, and local 
officials and entities that differ from it must also be transmitted.
    (c) If a state has not established a process, or is unable to submit 
a state process recommendation, state, areawide, regional and local 
officials and entities may submit comments either to the applicant or to 
the Department.
    (d) If a program or activity is not selected for a state process, 
state, areawide, regional and local officials and entities may submit 
comments either to the applicant or to the Department. In addition, if a 
state process recommendation for a nonselected program or activity is 
transmitted to the Department by the single point of contact, the 
Secretary follows the procedures of Sec. 17.10 of this part.
    (e) The Secretary considers comments which do not constitute a state 
process recommendation submitted under these regulations and for which 
the Secretary is not required to apply the procedures of Sec. 17.10 of 
this part, when such comments are provided by a single point of contact, 
by the applicant, or directly to the Department by a commenting party.



Sec. 17.10  How does the Secretary make efforts to accommodate 
intergovernmental concerns?

    (a) If a state process provides a state process recommendation to 
the Department through its single point of contact, the Secretary 
either:
    (1) Accepts the recommendation;
    (2) Reaches a mutually agreeable solution with the state process; or
    (3) Provides the single point of contact with a written explanation 
of the decision, in such form as the Secretary in his or her discretion 
deems appropriate. The Secretary may also supplement the written 
explanation by providing the explanation to the single point of contact 
by telephone, other telecommunication, or other means.
    (b) In any explanation under paragraph (a)(3) of this section, the 
Secretary informs the single point of contact that:
    (1) The Department will not implement its decision for at least ten 
days after the single point of contact receives the explanation; or
    (2) The Secretary has reviewed the decision and determined that, 
because of unusual circumstances, the waiting period of at least ten 
days is not feasible.
    (c) For purposes of computing the waiting period under paragraph 
(b)(1) of this section, a single point of contact is presumed to have 
received written notification 5 days after the date of mailing of such 
notification.



Sec. 17.11  What are the Secretary's obligations in interstate 
situations?

    (a) The Secretary is responsible for:
    (1) Identifying proposed federal financial assistance and direct 
federal development that have an impact on interstate areas;
    (2) Notifying appropriate officials and entities in states which 
have adopted a process and which select the Department's program or 
activity.
    (3) Making efforts to identify and notify the affected state, 
areawide, regional, and local officials and entities in those states 
that have not adopted a process under the Order or do not select the 
Department's program or activity;
    (4) Responding pursuant to Sec. 17.10 of this part if the Secretary 
receives a recommendation from a designated areawide agency transmitted 
by a single point of contact, in cases in which the review, 
coordination, and communication with the Department have been delegated.
    (b) The Secretary uses the procedures in Sec. 17.10 if a state 
process provides a state process recommendation to the Department 
through a single point of contact.



Sec. 17.12  How may a state simplify, consolidate, or substitute 
federally required state plans?

    (a) As used in this section:
    (1) Simplify means that a state may develop its own format, choose 
its own submission date, and select the planning period for a state 
plan.
    (2) Consolidate means that a state may meet statutory and regulatory 
requirements by combining two or more

[[Page 119]]

plans into one document and that the state can select the format, 
submission date, and planning period for the consolidated plan.
    (3) Substitute means that a state may use a plan or other document 
that it has developed for its own purposes to meet Federal requirements.
    (b) If not inconsistent with law, a state may decide to try to 
simplify, consolidate, or substitute federally required state plans 
without prior approval by the Secretary.
    (c) The Secretary reviews each state plan that a state has 
simplified, consolidated, or substituted and accepts the plan only if 
its contents meet federal requirements.



Sec. 17.13  May the Secretary waive any provision of these regulations?

    In an emergency, the Secretary may waive any provision of these 
regulations.



PART 18_UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE
AGREEMENTS TO STATE AND LOCAL GOVERNMENTS--Table of Contents



                            Subpart A_General

Sec.
18.1 Purpose and scope of this part.
18.2 Scope of subpart.
18.3 Definitions.
18.4 Applicability.
18.5 Effect on other issuances.
18.6 Additions and exceptions.

                    Subpart B_Pre-Award Requirements

18.10 Forms for applying for grants.
18.11 State plans.
18.12 Special grant or subgrant conditions for ``high risk'' grantees.

                    Subpart C_Post-Award Requirements

                        Financial Administration

18.20 Standards for financial management systems.
18.21 Payment.
18.22 Allowable costs.
18.23 Period of availability of funds.
18.24 Matching or cost sharing.
18.25 Program income.
18.26 Non-Federal audits.

                    Changes, Property, and Subawards

18.30 Changes.
18.31 Real property.
18.32 Equipment.
18.33 Supplies.
18.34 Copyrights.
18.35 Subawards to debarred and suspended parties.
18.36 Procurement.
18.37 Subgrants.

              Reports, Records, Retention, and Enforcement

18.40 Monitoring and reporting program performance.
18.41 Financial reporting.
18.42 Retention and access requirements for records.
18.43 Enforcement.
18.44 Termination for convenience.

                 Subpart D_After-The-Grant Requirements

18.50 Closeout.
18.51 Later disallowances and adjustments.
18.52 Collection of amounts due.

Subpart E--Entitlements [Reserved]

    Authority: 49 U.S.C. 322(a).

    Source: 53 FR 8086, 8087, Mar. 11, 1988, unless otherwise noted.



                            Subpart A_General



Sec. 18.1  Purpose and scope of this part.

    This part establishes uniform administrative rules for Federal 
grants and cooperative agreements and subawards to State, local and 
Indian tribal governments.



Sec. 18.2  Scope of subpart.

    This subpart contains general rules pertaining to this part and 
procedures for control of exceptions from this part.



Sec. 18.3  Definitions.

    As used in this part:
    Accrued expenditures mean the charges incurred by the grantee during 
a given period requiring the provision of funds for: (1) Goods and other 
tangible property received; (2) services performed by employees, 
contractors, subgrantees, subcontractors, and other payees; and (3) 
other amounts becoming owed under programs for which no current services 
or performance is required, such as annuities, insurance claims, and 
other benefit payments.
    Accrued income means the sum of: (1) Earnings during a given period 
from

[[Page 120]]

services performed by the grantee and goods and other tangible property 
delivered to purchasers, and (2) amounts becoming owed to the grantee 
for which no current services or performance is required by the grantee.
    Acquisition cost of an item of purchased equipment means the net 
invoice unit price of the property including the cost of modifications, 
attachments, accessories, or auxiliary apparatus necessary to make the 
property usable for the purpose for which it was acquired. Other charges 
such as the cost of installation, transportation, taxes, duty or 
protective in-transit insurance, shall be included or excluded from the 
unit acquisition cost in accordance with the grantee's regular 
accounting practices.
    Administrative requirements mean those matters common to grants in 
general, such as financial management, kinds and frequency of reports, 
and retention of records. These are distinguished from ``programmatic'' 
requirements, which concern matters that can be treated only on a 
program-by-program or grant-by-grant basis, such as kinds of activities 
that can be supported by grants under a particular program.
    Awarding agency means (1) with respect to a grant, the Federal 
agency, and (2) with respect to a subgrant, the party that awarded the 
subgrant.
    Cash contributions means the grantee's cash outlay, including the 
outlay of money contributed to the grantee or subgrantee by other public 
agencies and institutions, and private organizations and individuals. 
When authorized by Federal legislation, Federal funds received from 
other assistance agreements may be considered as grantee or subgrantee 
cash contributions.
    Contract means (except as used in the definitions for ``grant'' and 
``subgrant'' in this section and except where qualified by ``Federal'') 
a procurement contract under a grant or subgrant, and means a 
procurement subcontract under a contract.
    Cost sharing or matching means the value of the third party in-kind 
contributions and the portion of the costs of a federally assisted 
project or program not borne by the Federal Government.
    Cost-type contract means a contract or subcontract under a grant in 
which the contractor or subcontractor is paid on the basis of the costs 
it incurs, with or without a fee.
    Equipment means tangible, nonexpendable, personal property having a 
useful life of more than one year and an acquisition cost of $5,000 or 
more per unit. A grantee may use its own definition of equipment 
provided that such definition would at least include all equipment 
defined above.
    Expenditure report means: (1) For nonconstruction grants, the SF-269 
``Financial Status Report'' (or other equivalent report); (2) for 
construction grants, the SF-271 ``Outlay Report and Request for 
Reimbursement'' (or other equivalent report).
    Federally recognized Indian tribal government means the governing 
body or a governmental agency of any Indian tribe, band, nation, or 
other organized group or community (including any Native village as 
defined in section 3 of the Alaska Native Claims Settlement Act, 85 Stat 
688) certified by the Secretary of the Interior as eligible for the 
special programs and services provided by him through the Bureau of 
Indian Affairs.
    Government means a State or local government or a federally 
recognized Indian tribal government.
    Grant means an award of financial assistance, including cooperative 
agreements, in the form of money, or property in lieu of money, by the 
Federal Government to an eligible grantee. The term does not include 
technical assistance which provides services instead of money, or other 
assistance in the form of revenue sharing, loans, loan guarantees, 
interest subsidies, insurance, or direct appropriations. Also, the term 
does not include assistance, such as a fellowship or other lump sum 
award, which the grantee is not required to account for.
    Grantee means the government to which a grant is awarded and which 
is accountable for the use of the funds provided. The grantee is the 
entire legal entity even if only a particular component of the entity is 
designated in the grant award document.
    Local government means a county, municipality, city, town, township,

[[Page 121]]

local public authority (including any public and Indian housing agency 
under the United States Housing Act of 1937) school district, special 
district, intrastate district, council of governments (whether or not 
incorporated as a nonprofit corporation under state law), any other 
regional or interstate government entity, or any agency or 
instrumentality of a local government.
    Obligations means the amounts of orders placed, contracts and 
subgrants awarded, goods and services received, and similar transactions 
during a given period that will require payment by the grantee during 
the same or a future period.
    OMB means the United States Office of Management and Budget.
    Outlays (expenditures) mean charges made to the project or program. 
They may be reported on a cash or accrual basis. For reports prepared on 
a cash basis, outlays are the sum of actual cash disbursement for direct 
charges for goods and services, the amount of indirect expense incurred, 
the value of in-kind contributions applied, and the amount of cash 
advances and payments made to contractors and subgrantees. For reports 
prepared on an accrued expenditure basis, outlays are the sum of actual 
cash disbursements, the amount of indirect expense incurred, the value 
of inkind contributions applied, and the new increase (or decrease) in 
the amounts owed by the grantee for goods and other property received, 
for services performed by employees, contractors, subgrantees, 
subcontractors, and other payees, and other amounts becoming owed under 
programs for which no current services or performance are required, such 
as annuities, insurance claims, and other benefit payments.
    Percentage of completion method refers to a system under which 
payments are made for construction work according to the percentage of 
completion of the work, rather than to the grantee's cost incurred.
    Prior approval means documentation evidencing consent prior to 
incurring specific cost.
    Real property means land, including land improvements, structures 
and appurtenances thereto, excluding movable machinery and equipment.
    Share, when referring to the awarding agency's portion of real 
property, equipment or supplies, means the same percentage as the 
awarding agency's portion of the acquiring party's total costs under the 
grant to which the acquisition costs under the grant to which the 
acquisition cost of the property was charged. Only costs are to be 
counted--not the value of third-party in-kind contributions.
    State means any of the several States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, any territory or 
possession of the United States, or any agency or instrumentality of a 
State exclusive of local governments. The term does not include any 
public and Indian housing agency under United States Housing Act of 
1937.
    Subgrant means an award of financial assistance in the form of 
money, or property in lieu of money, made under a grant by a grantee to 
an eligible subgrantee. The term includes financial assistance when 
provided by contractual legal agreement, but does not include 
procurement purchases, nor does it include any form of assistance which 
is excluded from the definition of ``grant'' in this part.
    Subgrantee means the government or other legal entity to which a 
subgrant is awarded and which is accountable to the grantee for the use 
of the funds provided.
    Supplies means all tangible personal property other than 
``equipment'' as defined in this part.
    Suspension means depending on the context, either (1) temporary 
withdrawal of the authority to obligate grant funds pending corrective 
action by the grantee or subgrantee or a decision to terminate the 
grant, or (2) an action taken by a suspending official in accordance 
with agency regulations implementing E.O. 12549 to immediately exclude a 
person from participating in grant transactions for a period, pending 
completion of an investigation and such legal or debarment proceedings 
as may ensue.
    Termination means permanent withdrawal of the authority to obligate 
previously-awarded grant funds before that authority would otherwise 
expire.

[[Page 122]]

It also means the voluntary relinquishment of that authority by the 
grantee or subgrantee. ``Termination'' does not include: (1) Withdrawal 
of funds awarded on the basis of the grantee's underestimate of the 
unobligated balance in a prior period; (2) Withdrawal of the unobligated 
balance as of the expiration of a grant; (3) Refusal to extend a grant 
or award additional funds, to make a competing or noncompeting 
continuation, renewal, extension, or supplemental award; or (4) voiding 
of a grant upon determination that the award was obtained fraudulently, 
or was otherwise illegal or invalid from inception.
    Terms of a grant or subgrant mean all requirements of the grant or 
subgrant, whether in statute, regulations, or the award document.
    Third party in-kind contributions mean property or services which 
benefit a federally assisted project or program and which are 
contributed by non-Federal third parties without charge to the grantee, 
or a cost-type contractor under the grant agreement.
    Unliquidated obligations for reports prepared on a cash basis mean 
the amount of obligations incurred by the grantee that has not been 
paid. For reports prepared on an accrued expenditure basis, they 
represent the amount of obligations incurred by the grantee for which an 
outlay has not been recorded.
    Unobligated balance means the portion of the funds authorized by the 
Federal agency that has not been obligated by the grantee and is 
determined by deducting the cumulative obligations from the cumulative 
funds authorized.



Sec. 18.4  Applicability.

    (a) General. Subparts A through D of this part apply to all grants 
and subgrants to governments, except where inconsistent with Federal 
statutes or with regulations authorized in accordance with the exception 
provision of Sec. 18.6, or:
    (1) Grants and subgrants to State and local institutions of higher 
education or State and local hospitals.
    (2) The block grants authorized by the Omnibus Budget Reconciliation 
Act of 1981 (Community Services; Preventive Health and Health Services; 
Alcohol, Drug Abuse, and Mental Health Services; Maternal and Child 
Health Services; Social Services; Low-Income Home Energy Assistance; 
States' Program of Community Development Block Grants for Small Cities; 
and Elementary and Secondary Education other than programs administered 
by the Secretary of Education under title V, subtitle D, chapter 2, 
Section 583--the Secretary's discretionary grant program) and titles I-
III of the Job Training Partnership Act of 1982 and under the Public 
Health Services Act (Section 1921), Alcohol and Drug Abuse Treatment and 
Rehabilitation Block Grant and part C of title V, Mental Health Service 
for the Homeless Block Grant).
    (3) Entitlement grants to carry out the following programs of the 
Social Security Act:
    (i) Aid to Needy Families with Dependent Children (title IV-A of the 
Act, not including the Work Incentive Program (WIN) authorized by 
section 402(a)19(G); HHS grants for WIN are subject to this part);
    (ii) Child Support Enforcement and Establishment of Paternity (title 
IV-D of the Act);
    (iii) Foster Care and Adoption Assistance (title IV-E of the Act);
    (iv) Aid to the Aged, Blind, and Disabled (titles I, X, XIV, and 
XVI-AABD of the Act); and
    (v) Medical Assistance (Medicaid) (title XIX of the Act) not 
including the State Medicaid Fraud Control program authorized by section 
1903(a)(6)(B).
    (4) Entitlement grants under the following programs of The National 
School Lunch Act:
    (i) School Lunch (section 4 of the Act),
    (ii) Commodity Assistance (section 6 of the Act),
    (iii) Special Meal Assistance (section 11 of the Act),
    (iv) Summer Food Service for Children (section 13 of the Act), and
    (v) Child Care Food Program (section 17 of the Act).
    (5) Entitlement grants under the following programs of The Child 
Nutrition Act of 1966:
    (i) Special Milk (section 3 of the Act), and

[[Page 123]]

    (ii) School Breakfast (section 4 of the Act).
    (6) Entitlement grants for State Administrative expenses under The 
Food Stamp Act of 1977 (section 16 of the Act).
    (7) A grant for an experimental, pilot, or demonstration project 
that is also supported by a grant listed in paragraph (a)(3) of this 
section;
    (8) Grant funds awarded under subsection 412(e) of the Immigration 
and Nationality Act (8 U.S.C. 1522(e)) and subsection 501(a) of the 
Refugee Education Assistance Act of 1980 (Pub. L. 96-422, 94 Stat. 
1809), for cash assistance, medical assistance, and supplemental 
security income benefits to refugees and entrants and the administrative 
costs of providing the assistance and benefits;
    (9) Grants to local education agencies under 20 U.S.C. 236 through 
241-1(a), and 242 through 244 (portions of the Impact Aid program), 
except for 20 U.S.C. 238(d)(2)(c) and 240(f) (Entitlement Increase for 
Handicapped Children); and
    (10) Payments under the Veterans Administration's State Home Per 
Diem Program (38 U.S.C. 641(a)).
    (b) Entitlement programs. Entitlement programs enumerated above in 
Sec. 18.4(a) (3) through (8) are subject to subpart E.



Sec. 18.5  Effect on other issuances.

    All other grants administration provisions of codified program 
regulations, program manuals, handbooks and other nonregulatory 
materials which are inconsistent with this part are superseded, except 
to the extent they are required by statute, or authorized in accordance 
with the exception provision in Sec. 18.6.



Sec. 18.6  Additions and exceptions.

    (a) For classes of grants and grantees subject to this part, Federal 
agencies may not impose additional administrative requirements except in 
codified regulations published in the Federal Register.
    (b) Exceptions for classes of grants or grantees may be authorized 
only by OMB.
    (1) All Departmental requests for exceptions shall be processed 
through the Assistant Secretary of Administration.
    (2) [Reserved]
    (c) Exceptions on a case-by-case basis and for subgrantees may be 
authorized by the affected Federal agencies.
    (1) All case-by-case exceptions may be authorized by the affected 
operating administrations or departmental offices, with the concurrence 
of the Assistant Secretary for Administration.
    (2) [Reserved]

[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 60 FR 19646, Apr. 19, 
1995]



                    Subpart B_Pre-Award Requirements



Sec. 18.10  Forms for applying for grants.

    (a) Scope. (1) This section prescribes forms and instructions to be 
used by governmental organizations (except hospitals and institutions of 
higher education operated by a government) in applying for grants. This 
section is not applicable, however, to formula grant programs which do 
not require applicants to apply for funds on a project basis.
    (2) This section applies only to applications to Federal agencies 
for grants, and is not required to be applied by grantees in dealing 
with applicants for subgrants. However, grantees are encouraged to avoid 
more detailed or burdensome application requirements for subgrants.
    (3) Forms and procedures for Federal Highway Administration (FHWA) 
projects are contained in 23 CFR part 630, subpart B, 23 CFR part 420, 
subpart A, and 49 CFR part 450.
    (b) Authorized forms and instructions for governmental 
organizations. (1) In applying for grants, applicants shall only use 
standard application forms or those prescribed by the granting agency 
with the approval of OMB under the Paperwork Reduction Act of 1980.
    (2) Applicants are not required to submit more than the original and 
two copies of preapplications or applications.
    (3) Applicants must follow all applicable instructions that bear OMB 
clearance numbers. Federal agencies may specify and describe the 
programs, functions, or activities that will be used to plan, budget, 
and evaluate the work under a grant. Other supplementary instructions 
may be issued

[[Page 124]]

only with the approval of OMB to the extent required under the Paperwork 
Reduction Act of 1980. For any standard form, except the SF-424 
facesheet, Federal agencies may shade out or instruct the applicant to 
disregard any line item that is not needed.
    (4) When a grantee applies for additional funding (such as a 
continuation or supplemental award) or amends a previously submitted 
application, only the affected pages need be submitted. Previously 
submitted pages with information that is still current need not be 
resubmitted.

[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8086, Mar. 11, 
1988]



Sec. 18.11  State plans.

    (a) Scope. The statutes for some programs require States to submit 
plans before receiving grants. Under regulations implementing Executive 
Order 12372, ``Intergovernmental Review of Federal Programs,'' States 
are allowed to simplify, consolidate and substitute plans. This section 
contains additional provisions for plans that are subject to regulations 
implementing the Executive order.
    (b) Requirements. A State need meet only Federal administrative or 
programmatic requirements for a plan that are in statutes or codified 
regulations.
    (c) Assurances. In each plan the State will include an assurance 
that the State shall comply with all applicable Federal statutes and 
regulations in effect with respect to the periods for which it receives 
grant funding. For this assurance and other assurances required in the 
plan, the State may:
    (1) Cite by number the statutory or regulatory provisions requiring 
the assurances and affirm that it gives the assurances required by those 
provisions,
    (2) Repeat the assurance language in the statutes or regulations, or
    (3) Develop its own language to the extent permitted by law.
    (d) Amendments. A State will amend a plan whenever necessary to 
reflect: (1) New or revised Federal statutes or regulations or (2) a 
material change in any State law, organization, policy, or State agency 
operation. The State will obtain approval for the amendment and its 
effective date but need submit for approval only the amended portions of 
the plan.



Sec. 18.12  Special grant or subgrant conditions for ``high-risk'' 
grantees.

    (a) A grantee or subgrantee may be considered ``high risk'' if an 
awarding agency determines that a grantee or subgrantee:
    (1) Has a history of unsatisfactory performance, or
    (2) Is not financially stable, or
    (3) Has a management system which does not meet the management 
standards set forth in this part, or
    (4) Has not conformed to terms and conditions of previous awards, or
    (5) Is otherwise not responsible; and if the awarding agency 
determines that an award will be made, special conditions and/or 
restrictions shall correspond to the high risk condition and shall be 
included in the award.
    (b) Special conditions or restrictions may include:
    (1) Payment on a reimbursement basis;
    (2) Withholding authority to proceed to the next phase until receipt 
of evidence of acceptable performance within a given funding period;
    (3) Requiring additional, more detailed financial reports;
    (4) Additional project monitoring;
    (5) Requiring the grante or subgrantee to obtain technical or 
management assistance; or
    (6) Establishing additional prior approvals.
    (c) If an awarding agency decides to impose such conditions, the 
awarding official will notify the grantee or subgrantee as early as 
possible, in writing, of:
    (1) The nature of the special conditions/restrictions;
    (2) The reason(s) for imposing them;
    (3) The corrective actions which must be taken before they will be 
removed and the time allowed for completing the corrective actions; and
    (4) The method of requesting reconsideration of the conditions/
restrictions imposed.

[[Page 125]]



                    Subpart C_Post-Award Requirements

                        Financial Administration



Sec. 18.20  Standards for financial management systems.

    (a) A State must expand and account for grant funds in accordance 
with State laws and procedures for expending and accounting for its own 
funds. Fiscal control and accounting procedures of the State, as well as 
its subgrantees and cost-type contractors, must be sufficient to--
    (1) Permit preparation of reports required by this part and the 
statutes authorizing the grant, and
    (2) Permit the tracing of funds to a level of expenditures adequate 
to establish that such funds have not been used in violation of the 
restrictions and prohibitions of applicable statutes.
    (b) The financial management systems of other grantees and 
subgrantees must meet the following standards:
    (1) Financial reporting. Accurate, current, and complete disclosure 
of the financial results of financially assisted activities must be made 
in accordance with the financial reporting requirements of the grant or 
subgrant.
    (2) Accounting records. Grantees and subgrantees must maintain 
records which adequately identify the source and application of funds 
provided for financially-assisted activities. These records must contain 
information pertaining to grant or subgrant awards and authorizations, 
obligations, unobligated balances, assets, liabilities, outlays or 
expenditures, and income.
    (3) Internal control. Effective control and accountability must be 
maintained for all grant and subgrant cash, real and personal property, 
and other assets. Grantees and subgrantees must adequately safeguard all 
such property and must assure that it is used solely for authorized 
purposes.
    (4) Budget control. Actual expenditures or outlays must be compared 
with budgeted amounts for each grant or subgrant. Financial information 
must be related to performance or productivity data, including the 
development of unit cost information whenever appropriate or 
specifically required in the grant or subgrant agreement. If unit cost 
data are required, estimates based on available documentation will be 
accepted whenever possible.
    (5) Allowable cost. Applicable OMB cost principles, agency program 
regulations, and the terms of grant and subgrant agreements will be 
followed in determining the reasonableness, allowability, and 
allocability of costs.
    (6) Source documentation. Accounting records must be supported by 
such source documentation as cancelled checks, paid bills, payrolls, 
time and attendance records, contract and subgrant award documents, etc.
    (7) Cash management. Procedures for minimizing the time elapsing 
between the transfer of funds from the U.S. Treasury and disbursement by 
grantees and subgrantees must be followed whenever advance payment 
procedures are used. Grantees must establish reasonable procedures to 
ensure the receipt of reports on subgrantees' cash balances and cash 
disbursements in sufficient time to enable them to prepare complete and 
accurate cash transactions reports to the awarding agency. When advances 
are made by letter-of-credit or electronic transfer of funds methods, 
the grantee must make drawdowns as close as possible to the time of 
making disbursements. Grantees must monitor cash drawdowns by their 
subgrantees to assure that they conform substantially to the same 
standards of timing and amount as apply to advances to the grantees.
    (c) An awarding agency may review the adequacy of the financial 
management system of any applicant for financial assistance as part of a 
preaward review or at any time subsequent to award.
    (d) Certain Urban Mass Transportation Administration (UMTA) grantees 
shall comply with the requirements of section 15 of the Urban Mass 
Transportation (UMT) Act of 1964, as amended, as implemented by 49 CFR 
part 630, regarding a uniform system of accounts and records and a 
uniform reporting system for certain grantees.

[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8086, Mar. 11, 
1988]

[[Page 126]]



Sec. 18.21  Payment.

    (a) Scope. This section prescribes the basic standard and the 
methods under which a Federal agency will make payments to grantees, and 
grantees will make payments to subgrantees and contractors.
    (b) Basic standard. Methods and procedures for payment shall 
minimize the time elapsing between the transfer of funds and 
disbursement by the grantee or subgrantee, in accordance with Treasury 
regulations at 31 CFR part 205.
    (c) Advances. Grantees and subgrantees shall be paid in advance, 
provided they maintain or demonstrate the willingness and ability to 
maintain procedures to minimize the time elapsing between the transfer 
of the funds and their disbursement by the grantee or subgrantee.
    (d) Reimbursement. Reimbursement shall be the preferred method when 
the requirements in paragraph (c) of this section are not met. Grantees 
and subgrantees may also be paid by reimbursement for any construction 
grant. Except as otherwise specified in regulation, Federal agencies 
shall not use the percentage of completion method to pay construction 
grants. The grantee or subgrantee may use that method to pay its 
construction contractor, and if it does, the awarding agency's payments 
to the grantee or subgrantee will be based on the grantee's or 
subgrantee's actual rate of disbursement.
    (e) Working capital advances. If a grantee cannot meet the criteria 
for advance payments described in paragraph (c) of this section, and the 
Federal agency has determined that reimbursement is not feasible because 
the grantee lacks sufficient working capital, the awarding agency may 
provide cash or a working capital advance basis. Under this procedure 
the awarding agency shall advance cash to the grantee to cover its 
estimated disbursement needs for an initial period generally geared to 
the grantee's disbursing cycle. Thereafter, the awarding agency shall 
reimburse the grantee for its actual cash disbursements. The working 
capital advance method of payment shall not be used by grantees or 
subgrantees if the reason for using such method is the unwillingness or 
inability of the grantee to provide timely advances to the subgrantee to 
meet the subgrantee's actual cash disbursements.
    (f) Effect of program income, refunds, and audit recoveries on 
payment. (1) Grantees and subgrantees shall disburse repayments to and 
interest earned on a revolving fund before requesting additional cash 
payments for the same activity.
    (2) Except as provided in paragraph (f)(1) of this section, grantees 
and subgrantees shall disburse program income, rebates, refunds, 
contract settlements, audit recoveries and interest earned on such funds 
before requesting additional cash payments.
    (g) Withholding payments. (1) Unless otherwise required by Federal 
statute, awarding agencies shall not withhold payments for proper 
charges incurred by grantees or subgrantees unless--
    (i) The grantee or subgrantee has failed to comply with grant award 
conditions or
    (ii) The grantee or subgrantee is indebted to the United States.
    (2) Cash withheld for failure to comply with grant award condition, 
but without suspension of the grant, shall be released to the grantee 
upon subsequent compliance. When a grant is suspended, payment 
adjustments will be made in accordance with Sec. 18.43(c).
    (3) A Federal agency shall not make payment to grantees for amounts 
that are withheld by grantees or subgrantees from payment to contractors 
to assure satisfactory completion of work. Payments shall be made by the 
Federal agency when the grantees or subgrantees actually disburse the 
withheld funds to the contractors or to escrow accounts established to 
assure satisfactory completion of work.
    (h) Cash depositories. (1) Consistent with the national goal of 
expanding the opportunities for minority business enterprises, grantees 
and subgrantees are encouraged to use minority banks (a bank which is 
owned at least 50 percent by minority group members). A list of minority 
owned banks can be obtained from the Minority Business Development 
Agency, Department of Commerce, Washington, DC 20230.
    (2) A grantee or subgrantee shall maintain a separate bank account 
only

[[Page 127]]

when required by Federal-State agreement.
    (i) Interest earned on advances. Except for interest earned on 
advances of funds exempt under the Intergovernmental Cooperation Act (31 
U.S.C. 6501 et seq.) and the Indian Self-Determination Act (23 U.S.C. 
450), grantees and subgrantees shall promptly, but at least quarterly, 
remit interest earned on advances to the Federal agency. The grantee or 
subgrantee may keep interest amounts up to $100 per year for 
administrative expenses.
    (j) 23 U.S.C. 121 limits payments to States for highway construction 
projects to the Federal share of the costs of construction incurred to 
date, plus the Federal share of the value of stockpiled materials.
    (k) Section 404 of the Surface Transportation Assistance Act of 1982 
directs the Secretary to reimburse States for the Federal share of costs 
incurred.

[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8086, Mar. 11, 
1988]



Sec. 18.22  Allowable costs.

    (a) Limitation on use of funds. Grant funds may be used only for:
    (1) The allowable costs of the grantees, subgrantees and cost-type 
contractors, including allowable costs in the form of payments to fixed-
price contractors; and
    (2) Reasonable fees or profit to cost-type contractors but not any 
fee or profit (or other increment above allowable costs) to the grantee 
or subgrantee.
    (b) Applicable cost principles. For each kind of organization, there 
is a set of Federal principles for determining allowable costs. 
Allowable costs will be determined in accordance with the cost 
principles applicable to the organization incurring the costs. The 
following chart lists the kinds of organizations and the applicable cost 
principles.

------------------------------------------------------------------------
            For the costs of a                 Use the principles in--
------------------------------------------------------------------------
State, local or federal-recognized Indian   2 CFR part 225.
 tribal government.
Private nonprofit organization other than   2 CFR part 230.
 an (1) Institution of higher education,
 (2) hospital, or (3) organization named
 in 2 CFR part 230, Appendix C, as not
 subject to that part.
Institutions of Higher Education..........  2 CFR part 220.
For-profit organizations other than a       48 CFR part 31. Contract
 hospital, commercial organization or a      Cost Principles and
 non-profit organization listed in 2 CFR     Procedures, or uniform cost
 part 230, Appendix C, as not subject to     accounting standards that
 that part.                                  comply with cost principles
                                             acceptable to the Federal
                                             agency.
------------------------------------------------------------------------

    (c) The overhead cost principles of OMB Circular A-87 shall not 
apply to State highway agencies for FHWA funded grants.
    (d) Sections 3(1) and 9(p) of the UMT Act of 1964, as amended, 
authorize the Secretary to include in the net project cost eligible for 
Federal assistance, the amount of interest earned and payable on bonds 
issued by the State or local public body to the extent that the proceeds 
of such bonds have actually been expended in carrying out such project 
or portion thereof. Limitations are established in sections 3 and 9 of 
the UMT Act of 1964, as amended.
    (e) Section 9 of the UMT Act of 1964, as amended, authorizes grants 
to finance the leasing of facilities and equipment for use in mass 
transportation services provided leasing is more cost effective than 
acquisition or construction.

[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8086, Mar. 11, 
1988, 76 FR 61598, Oct. 5, 2011]



Sec. 18.23  Period of availability of funds.

    (a) General. Where a funding period is specified, a grantee may 
charge to the award only costs resulting from obligations of the funding 
period unless carryover of unobligated balances is permitted, in which 
case the carryover balances may be charged for costs resulting from 
obligations of the subsequent funding period.
    (b) Liquidation of obligations. A grantee must liquidate all 
obligations incurred under the award not later than 90 days after the 
end of the funding period (or as specified in a program regulation) to 
coincide with the submission of the annual Financial Status Report (SF-
269). The Federal agency may extend this deadline at the request of the 
grantee.

[[Page 128]]



Sec. 18.24  Matching or cost sharing.

    (a) Basic rule: Costs and contributions acceptable. With the 
qualifications and exceptions listed in paragraph (b) of this section, a 
matching or cost sharing requirement may be satisfied by either or both 
of the following:
    (1) Allowable costs incurred by the grantee, subgrantee or a cost-
type contractor under the assistance agreement. This includes allowable 
costs borne by non-Federal grants or by others cash donations from non-
Federal third parties.
    (2) The value of third party in-kind contributions applicable to the 
period to which the cost sharing or matching requirements applies.
    (b) Qualifications and exceptions--(1) Costs borne by other Federal 
grant agreements. Except as provided by Federal statute, a cost sharing 
or matching requirement may not be met by costs borne by another Federal 
grant. This prohibition does not apply to income earned by a grantee or 
subgrantee from a contract awarded under another Federal grant.
    (2) General revenue sharing. For the purpose of this section, 
general revenue sharing funds distributed under 31 U.S.C. 6702 are not 
considered Federal grant funds.
    (3) Cost or contributions counted towards other Federal costs-
sharing requirements. Neither costs nor the values of third party in-
kind contributions may count towards satisfying a cost sharing or 
matching requirement of a grant agreement if they have been or will be 
counted towards satisfying a cost sharing or matching requirement of 
another Federal grant agreement, a Federal procurement contract, or any 
other award of Federal funds.
    (4) Costs financed by program income. Costs financed by program 
income, as defined in Sec. 18.25, shall not count towards satisfying a 
cost sharing or matching requirement unless they are expressly permitted 
in the terms of the assistance agreement. (This use of general program 
income is described in Sec. 18.25(g).)
    (5) Services or property financed by income earned by contractors. 
Contractors under a grant may earn income from the activities carried 
out under the contract in addition to the amounts earned from the party 
awarding the contract. No costs of services or property supported by 
this income may count toward satisfying a cost sharing or matching 
requirement unless other provisions of the grant agreement expressly 
permit this kind of income to be used to meet the requirement.
    (6) Records. Costs and third party in-kind contributions counting 
towards satisfying a cost sharing or matching requirement must be 
verifiable from the records of grantees and subgrantee or cost-type 
contractors. These records must show how the value placed on third party 
in-kind contributions was derived. To the extent feasible, volunteer 
services will be supported by the same methods that the organization 
uses to support the allocability of regular personnel costs.
    (7) Special standards for third party in-kind contributions. (i) 
Third party in-kind contributions count towards satisfying a cost 
sharing or matching requirement only where, if the party receiving the 
contributions were to pay for them, the payments would be allowable 
costs.
    (ii) Some third party in-kind contributions are goods and services 
that, if the grantee, subgrantee, or contractor receiving the 
contribution had to pay for them, the payments would have been an 
indirect costs. Costs sharing or matching credit for such contributions 
shall be given only if the grantee, subgrantee, or contractor has 
established, along with its regular indirect cost rate, a special rate 
for allocating to individual projects or programs the value of the 
contributions.
    (iii) A third party in-kind contribution to a fixed-price contract 
may count towards satisfying a cost sharing or matching requirement only 
if it results in:
    (A) An increase in the services or property provided under the 
contract (without additional cost to the grantee or subgrantee) or
    (B) A cost savings to the grantee or subgrantee.
    (iv) The values placed on third party in-kind contributions for cost 
sharing or matching purposes will conform to the rules in the succeeding 
sections of this part. If a third party in-kind contribution is a type 
not treated in those

[[Page 129]]

sections, the value placed upon it shall be fair and reasonable.
    (8) 23 U.S.C. 121(a) permits reimbursement for actual construction 
cost incurred by States for highway construction projects. Except for 
private donations of right-of-way, contributions and donations shall not 
be considered State costs, and shall not be allowable for matching 
purposes for highway construction contracts. 23 U.S.C. 323 permits 
private donations of right-of-way to be used for a State's matching 
share, and establishes procedures for determining the fair market value 
of such donated right-of-way.
    (9) Section 4(a) of the UMT Act of 1964, as amended, provides that 
the Federal grant for any project to be assisted under section 3 of the 
UMT Act of 1964, as amended, shall be in an amount equal to 75 percent 
of the net project costs. Net project cost is defined as that portion of 
the cost of the project which cannot be reasonably financed from 
revenues.
    (10) Section 18(e) of the UMT Act of 1964, as amended, limits the 
Federal share to 80 percent of the net cost of construction, as 
determined by the Secretary of Transportation. The Federal share for the 
payment of subsidies for operating expenses, as defined by the 
Secretary, shall not exceed 50 percent of the net cost of such operating 
expense projects.
    (c) Valuation of donated services--(1) Volunteer services. Unpaid 
services provided to a grantee or subgrantee by individuals will be 
valued at rates consistent with those ordinarily paid for similar work 
in the grantee's or subgrantee's organization. If the grantee or 
subgrantee does not have employees performing similar work, the rates 
will be consistent with those ordinarily paid by other employers for 
similar work in the same labor market. In either case, a reasonable 
amount for fringe benefits may be included in the valuation.
    (2) Employees of other organizations. When an employer other than a 
grantee, subgrantee, or cost-type contractor furnishes free of charge 
the services of an employee in the employee's normal line of work, the 
services will be valued at the employee's regular rate of pay exclusive 
of the employee's fringe benefits and overhead costs. If the services 
are in a different line of work, paragraph (c)(1) of this section 
applies.
    (3) Section 5(g) of the Department of Transportation Act (49 U.S.C. 
1654(g)) limits in-kind service contributions under the local Rail 
Service Assistance Program to ``the cash equivalent of State salaries 
for State public employees working in the State rail assistance program, 
but not including overhead and general administrative costs.''
    (d) Valuation of third party donated supplies and loaned equipment 
or space. (1) If a third party donates supplies, the contribution will 
be valued at the market value of the supplies at the time of donation.
    (2) If a third party donates the use of equipment or space in a 
building but retains title, the contribution will be valued at the fair 
rental rate of the equipment or space.
    (e) Valuation of third party donated equipment, buildings, and land. 
If a third party donates equipment, buildings, or land, and title passes 
to a grantee or subgrantee, the treatment of the donated property will 
depend upon the purpose of the grant or subgrant, as follows:
    (1) Awards for capital expenditures. If the purpose of the grant or 
subgrant is to assist the grantee or subgrantee in the acquisition of 
property, the market value of that property at the time of donation may 
be counted as cost sharing or matching,
    (2) Other awards. If assisting in the acquisition of property is not 
the purpose of the grant or subgrant, paragraphs (e)(2) (i) and (ii) of 
this section apply:
    (i) If approval is obtained from the awarding agency, the market 
value at the time of donation of the donated equipment or buildings and 
the fair rental rate of the donated land may be counted as cost sharing 
or matching. In the case of a subgrant, the terms of the grant agreement 
may require that the approval be obtained from the Federal agency as 
well as the grantee. In all cases, the approval may be given only if a 
purchase of the equipment or rental of the land would be approved as an 
allowable direct cost. If any part of the donated property was acquired

[[Page 130]]

with Federal funds, only the non-federal share of the property may be 
counted as cost-sharing or matching.
    (ii) If approval is not obtained under paragraph (e)(2)(i) of this 
section, no amount may be counted for donated land, and only 
depreciation or use allowances may be counted for donated equipment and 
buildings. The depreciation or use allowances for this property are not 
treated as third party in-kind contributions. Instead, they are treated 
as costs incurred by the grantee or subgrantee. They are computed and 
allocated (usually as indirect costs) in accordance with the cost 
principles specified in Sec. 18.22, in the same way as depreciation or 
use allowances for purchased equipment and buildings. The amount of 
depreciation or use allowances for donated equipment and buildings is 
based on the property's market value at the time it was donated.
    (f) Valuation of grantee or subgrantee donated real property for 
construction/acquisition. If a grantee or subgrantee donates real 
property for a construction or facilities acquisition project, the 
current market value of that property may be counted as cost sharing or 
matching. If any part of the donated property was acquired with Federal 
funds, only the non-federal share of the property may be counted as cost 
sharing or matching.
    (g) Appraisal of real property. In some cases under paragraphs (d), 
(e) and (f) of this section, it will be necessary to establish the 
market value of land or a building or the fair rental rate of land or of 
space in a building. In these cases, the Federal agency may require the 
market value or fair rental value be set by an independent appraiser, 
and that the value or rate be certified by the grantee. This requirement 
will also be imposed by the grantee on subgrantees.

[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8086, Mar. 11, 
1988]



Sec. 18.25  Program income.

    (a) General. Grantees are encouraged to earn income to defray 
program costs. Program income includes income from fees for services 
performed, from the use or rental of real or personal property acquired 
with grant funds, from the sale of commodities or items fabricated under 
a grant agreement, and from payments of principal and interest on loans 
made with grant funds. Except as otherwise provided in regulations of 
the Federal agency, program income does not include interest on grant 
funds, rebates, credits, discounts, refunds, etc. and interest earned on 
any of them.
    (b) Definition of program income. Program income means gross income 
received by the grantee or subgrantee directly generated by a grant 
supported activity, or earned only as a result of the grant agreement 
during the grant period. ``During the grant period'' is the time between 
the effective date of the award and the ending date of the award 
reflected in the final financial report.
    (c) Cost of generating program income. If authorized by Federal 
regulations or the grant agreement, costs incident to the generation of 
program income may be deducted from gross income to determine program 
income.
    (d) Governmental revenues. Taxes, special assessments, levies, 
fines, and other such revenues raised by a grantee or subgrantee are not 
program income unless the revenues are specifically identified in the 
grant agreement or Federal agency regulations as program income.
    (e) Royalties. Income from royalties and license fees for 
copyrighted material, patents, and inventions developed by a grantee or 
subgrantee is program income only if the revenues are specifically 
identified in the grant agreement or Federal agency regulations as 
program income. (See Sec. 18.34.)
    (f) Property. Proceeds from the sale of real property or equipment 
will be handled in accordance with the requirements of Sec. Sec. 18.31 
and 18.32.
    (g) Use of program income. Program income shall be deducted from 
outlays which may be both Federal and non-Federal as described below, 
unless the Federal agency regulations or the grant agreement specify 
another alternative (or a combination of the alternatives). In 
specifying alternatives, the Federal agency may distinguish between 
income earned by the grantee and income earned by subgrantees and 
between the sources, kinds, or amounts of income. When Federal agencies 
authorize the alternatives in paragraphs

[[Page 131]]

(g) (2) and (3) of this section, program income in excess of any limits 
stipulated shall also be deducted from outlays.
    (1) Deduction. Ordinarily program income shall be deducted from 
total allowable costs to determine the net allowable costs. Program 
income shall be used for current costs unless the Federal agency 
authorizes otherwise. Program income which the grantee did not 
anticipate at the time of the award shall be used to reduce the Federal 
agency and grantee contributions rather than to increase the funds 
committed to the project.
    (2) Addition. When authorized, program income may be added to the 
funds committed to the grant agreement by the Federal agency and the 
grantee. The program income shall be used for the purposes and under the 
conditions of the grant agreement.
    (3) Cost sharing or matching. When authorized, program income may be 
used to meet the cost sharing or matching requirement of the grant 
agreement. The amount of the Federal grant award remains the same.
    (4) Section 3(a)(1)(D) of the UMT Act of 1964, as amended, provides 
that the Secretary shall establish requirements for the use of income 
derived from appreciated land values for certain UMTA grants. Specific 
requirements shall be contained in grant agreements.
    (5) UMTA grantees may retain program income for allowable capital or 
operating expenses.
    (6) For grants awarded under section 9 of the UMT Act of 1964, as 
amended, any revenues received from the sale of advertising and 
concessions in excess of fiscal year 1985 levels shall be excluded from 
program income.
    (7) 23 U.S.C. 156 requires that States shall charge fair market 
value for the sale, lease, or use of right-of-way airspace for non-
transportation purposes and that such income shall be used for projects 
eligible under 23 U.S.C.
    (h) Income after the award period. There are no Federal requirements 
governing the disposition of program income earned after the end of the 
award period (i.e., until the ending date of the final financial report, 
see paragraph (a) of this section), unless the terms of the agreement or 
the Federal agency regulations provide otherwise.

[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8087, Mar. 11, 
1988]



Sec. 18.26  Non-Federal audits.

    (a) Basic rule. Grantees and subgrantees are responsible for 
obtaining audits in accordance with the Single Audit Act Amendments of 
1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, ``Audits of 
States, Local Governments, and Non-Profit Organizations.'' The audits 
shall be made by an independent auditor in accordance with generally 
accepted government auditing standards covering financial audits.
    (b) Subgrantees. State or local governments, as those terms are 
defined for purposes of the Single Audit Act Amendments of 1996, that 
provide Federal awards to a subgrantee, which expends $300,000 or more 
(or other amount as specified by OMB) in Federal awards in a fiscal 
year, shall:
    (1) Determine whether State or local subgrantees have met the audit 
requirements of the Act and whether subgrantees covered by OMB Circular 
A-110, ``Uniform Administrative Requirements for Grants and Agreements 
with Institutions of Higher Education, Hospitals, and Other Non-Profit 
Organizations,'' have met the audit requirements of the Act. Commercial 
contractors (private for-profit and private and governmental 
organizations) providing goods and services to State and local 
governments are not required to have a single audit performed. State and 
local governments should use their own procedures to ensure that the 
contractor has complied with laws and regulations affecting the 
expenditure of Federal funds;
    (2) Determine whether the subgrantee spent Federal assistance funds 
provided in accordance with applicable laws and regulations. This may be 
accomplished by reviewing an audit of the subgrantee made in accordance 
with the Act, Circular A-110, or through other means (e.g., program 
reviews) if the subgrantee has not had such an audit;
    (3) Ensure that appropriate corrective action is taken within six 
months

[[Page 132]]

after receipt of the audit report in instance of noncompliance with 
Federal laws and regulations;
    (4) Consider whether subgrantee audits necessitate adjustment of the 
grantee's own records; and
    (5) Require each subgrantee to permit independent auditors to have 
access to the records and financial statements.
    (c) Auditor selection. In arranging for audit services, Sec. 18.36 
shall be followed.

[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 61 FR 21387, May 10, 
1996; 62 FR 45939, 45947, Aug. 29, 1997]

                    Changes, Property, and Subawards



Sec. 18.30  Changes.

    (a) General. Grantees and subgrantees are permitted to rebudget 
within the approved direct cost budget to meet unanticipated 
requirements and may make limited program changes to the approved 
project. However, unless waived by the awarding agency, certain types of 
post-award changes in budgets and projects shall require the prior 
written approval of the awarding agency.
    (b) Relation to cost principles. The applicable cost principles (see 
Sec. 18.22) contain requirements for prior approval of certain types of 
costs. Except where waived, those requirements apply to all grants and 
subgrants even if paragraphs (c) through (f) of this section do not.
    (c) Budget changes--(1) Nonconstruction projects. Except as stated 
in other regulations or an award document, grantees or subgrantees shall 
obtain the prior approval of the awarding agency whenever any of the 
following changes is anticipated under a nonconstruction award:
    (i) Any revision which would result in the need for additional 
funding.
    (ii) Unless waived by the awarding agency, cumulative transfers 
among direct cost categories, or, if applicable, among separately 
budgeted programs, projects, functions, or activities which exceed or 
are expected to exceed ten percent of the current total approved budget, 
whenever the awarding agency's share exceeds $100,000.
    (iii) Transfer of funds allotted for training allowances (i.e., from 
direct payments to trainees to other expense categories).
    (2) Construction projects. Grantees and subgrantees shall obtain 
prior written approval for any budget revision which would result in the 
need for additional funds.
    (3) Combined construction and nonconstruction projects. When a grant 
or subgrant provides funding for both construction and nonconstruction 
activities, the grantee or subgrantee must obtain prior written approval 
from the awarding agency before making any fund or budget transfer from 
nonconstruction to construction or vice versa.
    (d) Programmatic changes. Grantees or subgrantees must obtain the 
prior approval of the awarding agency whenever any of the following 
actions is anticipated:
    (1) Any revision of the scope or objectives of the project 
(regardless of whether there is an associated budget revision requiring 
prior approval).
    (2) Need to extend the period of availability of funds.
    (3) Changes in key persons in cases where specified in an 
application or a grant award. In research projects, a change in the 
project director or principal investigator shall always require approval 
unless waived by the awarding agency.
    (4) Under nonconstruction projects, contracting out, subgranting (if 
authorized by law) or otherwise obtaining the services of a third party 
to perform activities which are central to the purposes of the award. 
This approval requirement is in addition to the approval requirements of 
Sec. 18.36 but does not apply to the procurement of equipment, 
supplies, and general support services.
    (e) Additional prior approval requirements. The awarding agency may 
not require prior approval for any budget revision which is not 
described in paragraph (c) of this section.
    (f) Requesting prior approval. (1) A request for prior approval of 
any budget revision will be in the same budget formal the grantee used 
in its application and shall be accompanied by a narrative justification 
for the proposed revision.

[[Page 133]]

    (2) A request for a prior approval under the applicable Federal cost 
principles (see Sec. 18.22) may be made by letter.
    (3) A request by a subgrantee for prior approval will be addressed 
in writing to the grantee. The grantee will promptly review such request 
and shall approve or disapprove the request in writing. A grantee will 
not approve any budget or project revision which is inconsistent with 
the purpose or terms and conditions of the Federal grant to the grantee. 
If the revision, requested by the subgrantee would result in a change to 
the grantee's approved project which requires Federal prior approval, 
the grantee will obtain the Federal agency's approval before approving 
the subgrantee's request.



Sec. 18.31  Real property.

    (a) Title. Subject to the obligations and conditions set forth in 
this section, title to real property acquired under a grant or subgrant 
will vest upon acquisition in the grantee or subgrantee respectively.
    (b) Use. Except as otherwise provided by Federal statutes, real 
property will be used for the originally authorized purposes as long as 
needed for that purposes, and the grantee or subgrantee shall not 
dispose of or encumber its title or other interests.
    (c) Disposition. When real property is no longer needed for the 
originally authorized purpose, the grantee or subgrantee will request 
disposition instructions from the awarding agency. The instructions will 
provide for one of the following alternatives:
    (1) Retention of title. Retain title after compensating the awarding 
agency. The amount paid to the awarding agency will be computed by 
applying the awarding agency's percentage of participation in the cost 
of the original purchase to the fair market value of the property. 
However, in those situations where a grantee or subgrantee is disposing 
of real property acquired with grant funds and acquiring replacement 
real property under the same program, the net proceeds from the 
disposition may be used as an offset to the cost of the replacement 
property.
    (2) Sale of property. Sell the property and compensate the awarding 
agency. The amount due to the awarding agency will be calculated by 
applying the awarding agency's percentage of participation in the cost 
of the original purchase to the proceeds of the sale after deduction of 
any actual and reasonable selling and fixing-up expenses. If the grant 
is still active, the net proceeds from sale may be offset against the 
original cost of the property. When a grantee or subgrantee is directed 
to sell property, sales procedures shall be followed that provide for 
competition to the extent practicable and result in the highest possible 
return.
    (3) Transfer of title. Transfer title to the awarding agency or to a 
third-party designated/approved by the awarding agency. The grantee or 
subgrantee shall be paid an amount calculated by applying the grantee or 
subgrantee's percentage of participation in the purchase of the real 
property to the current fair market value of the property.
    (d) If the conditions in 23 U.S.C. 103(e) (5), (6), or (7), as 
appropriate, are met and approval is given by the Secretary, States 
shall not be required to repay the Highway Trust Fund for the cost of 
right-of-way and other items when certain segments of the Interstate 
System are withdrawn.

[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8087, Mar. 11, 
1988]



Sec. 18.32  Equipment.

    (a) Title. Subject to the obligations and conditions set forth in 
this section, title to equipment acquired under a grant or subgrant will 
vest upon acquisition in the grantee or subgrantee respectively.
    (b) States. A State will use, manage, and dispose of equipment 
acquired under a grant by the State in accordance with State laws and 
procedures. Other grantees and subgrantees will follow paragraphs (c) 
through (e) of this section.
    (c) Use. (1) Equipment shall be used by the grantee or subgrantee in 
the program or project for which it was acquired as long as needed, 
whether or not the project or program continues to be supported by 
Federal funds. When no longer needed for the original program or 
project, the equipment may be used in other activities currently or

[[Page 134]]

previously supported by a Federal agency.
    (2) The grantee or subgrantee shall also make equipment available 
for use on other projects or programs currently or previously supported 
by the Federal Government, providing such use will not interfere with 
the work on the projects or program for which it was originally 
acquired. First preference for other use shall be given to other 
programs or projects supported by the awarding agency. User fees should 
be considered if appropriate.
    (3) Notwithstanding the encouragement in Sec. 18.25(a) to earn 
program income, the grantee or subgrantee must not use equipment 
acquired with grant funds to provide services for a fee to compete 
unfairly with private companies that provide equivalent services, unless 
specifically permitted or contemplated by Federal statute.
    (4) When acquiring replacement equipment, the grantee or subgrantee 
may use the equipment to be replaced as a trade-in or sell the property 
and use the proceeds to offset the cost of the replacement property, 
subject to the approval of the awarding agency.
    (d) Management requirements. Procedures for managing equipment 
(including replacement equipment), whether acquired in whole or in part 
with grant funds, until disposition takes place will, as a minimum, meet 
the following requirements:
    (1) Property records must be maintained that include a description 
of the property, a serial number or other identification number, the 
source of property, who holds title, the acquisition date, and cost of 
the property, percentage of Federal participation in the cost of the 
property, the location, use and condition of the property, and any 
ultimate disposition data including the date of disposal and sale price 
of the property.
    (2) A physical inventory of the property must be taken and the 
results reconciled with the property records at least once every two 
years.
    (3) A control system must be developed to ensure adequate safeguards 
to prevent loss, damage, or theft of the property. Any loss, damage, or 
theft shall be investigated.
    (4) Adequate maintenance procedures must be developed to keep the 
property in good condition.
    (5) If the grantee or subgrantee is authorized or required to sell 
the property, proper sales procedures must be established to ensure the 
highest possible return.
    (e) Disposition. When original or replacement equipment acquired 
under a grant or subgrant is no longer needed for the original project 
or program or for other activities currently or previously supported by 
a Federal agency, disposition of the equipment will be made as follows:
    (1) Items of equipment with a current per-unit fair market value of 
less than $5,000 may be retained, sold or otherwise disposed of with no 
further obligation to the awarding agency.
    (2) Items of equipment with a current per unit fair market value in 
excess of $5,000 may be retained or sold and the awarding agency shall 
have a right to an amount calculated by multiplying the current market 
value or proceeds from sale by the awarding agency's share of the 
equipment.
    (3) In cases where a grantee or subgrantee fails to take appropriate 
disposition actions, the awarding agency may direct the grantee or 
subgrantee to take excess and disposition actions.
    (f) Federal equipment. In the event a grantee or subgrantee is 
provided federally-owned equipment:
    (1) Title will remain vested in the Federal Government.
    (2) Grantees or subgrantees will manage the equipment in accordance 
with Federal agency rules and procedures, and submit an annual inventory 
listing.
    (3) When the equipment is no longer needed, the grantee or 
subgrantee will request disposition instructions from the Federal 
agency.
    (g) Right to transfer title. The Federal awarding agency may reserve 
the right to transfer title to the Federal Government or a third part 
named by the awarding agency when such a third party is otherwise 
eligible under existing statutes. Such transfers shall be subject to the 
following standards:
    (1) The property shall be identified in the grant or otherwise made 
known to the grantee in writing.

[[Page 135]]

    (2) The Federal awarding agency shall issue disposition instruction 
within 120 calendar days after the end of the Federal support of the 
project for which it was acquired. If the Federal awarding agency fails 
to issue disposition instructions within the 120 calendar-day period the 
grantee shall follow Sec. 18.32(e).
    (3) When title to equipment is transferred, the grantee shall be 
paid an amount calculated by applying the percentage of participation in 
the purchase to the current fair market value of the property.



Sec. 18.33  Supplies.

    (a) Title. Title to supplies acquired under a grant or subgrant will 
vest, upon acquisition, in the grantee or subgrantee respectively.
    (b) Disposition. If there is a residual inventory of unused supplies 
exceeding $5,000 in total aggregate fair market value upon termination 
or completion of the award, and if the supplies are not needed for any 
other federally sponsored programs or projects, the grantee or 
subgrantee shall compensate the awarding agency for its share.



Sec. 18.34  Copyrights.

    The Federal awarding agency reserves a royalty-free, nonexclusive, 
and irrevocable license to reproduce, publish or otherwise use, and to 
authorize others to use, for Federal Government purposes:
    (a) The copyright in any work developed under a grant, subgrant, or 
contract under a grant or subgrant; and
    (b) Any rights of copyright to which a grantee, subgrantee or a 
contractor purchases ownership with grant support.



Sec. 18.35  Subawards to debarred and suspended parties.

    Grantees and subgrantees must not make any award or permit any award 
(subgrant or contract) at any tier to any party which is debarred or 
suspended or is otherwise excluded from or ineligible for participation 
in Federal assistance programs under Executive Order 12549, ``Debarment 
and Suspension.''



Sec. 18.36  Procurement.

    (a) States. When procuring property and services under a grant, a 
State will follow the same policies and procedures it uses for 
procurements from its non-Federal funds. The State will ensure that 
every purchase order or other contract includes any clauses required by 
Federal statutes and executive orders and their implementing 
regulations. Other grantees and subgrantees will follow paragraphs (b) 
through (i) in this section.
    (b) Procurement standards. (1) Grantees and subgrantees will use 
their own procurement procedures which reflect applicable State and 
local laws and regulations, provided that the procurements conform to 
applicable Federal law and the standards identified in this section.
    (2) Grantees and subgrantees will maintain a contract administration 
system which ensures that contractors perform in accordance with the 
terms, conditions, and specifications of their contracts or purchase 
orders.
    (3) Grantees and subgrantees will maintain a written code of 
standards of conduct governing the performance of their employees 
engaged in the award and administration of contracts. No employee, 
officer or agent of the grantee or subgrantee shall participate in 
selection, or in the award or administration of a contract supported by 
Federal funds if a conflict of interest, real or apparent, would be 
involved. Such a conflict would arise when:
    (i) The employee, officer or agent,
    (ii) Any member of his immediate family,
    (iii) His or her partner, or
    (iv) An organization which employs, or is about to employ, any of 
the above, has a financial or other interest in the firm selected for 
award. The grantee's or subgrantee's officers, employees or agents will 
neither solicit nor accept gratuities, favors or anything of monetary 
value from contractors, potential contractors, or parties to 
subagreements. Grantee and subgrantees may set minimum rules where the 
financial interest is not substantial or the gift is an unsolicited item 
of nominal intrinsic value. To the extent permitted by State or local 
law or regulations, such standards or conduct

[[Page 136]]

will provide for penalties, sanctions, or other disciplinary actions for 
violations of such standards by the grantee's and subgrantee's officers, 
employees, or agents, or by contractors or their agents. The awarding 
agency may in regulation provide additional prohibitions relative to 
real, apparent, or potential conflicts of interest.
    (4) Grantee and subgrantee procedures will provide for a review of 
proposed procurements to avoid purchase of unnecessary or duplicative 
items. Consideration should be given to consolidating or breaking out 
procurements to obtain a more economical purchase. Where appropriate, an 
analysis will be made of lease versus purchase alternatives, and any 
other appropriate analysis to determine the most economical approach.
    (5) To foster greater economy and efficiency, grantees and 
subgrantees are encouraged to enter into State and local 
intergovernmental agreements for procurement or use of common goods and 
services.
    (6) Grantees and subgrantees are encouraged to use Federal excess 
and surplus property in lieu of purchasing new equipment and property 
whenever such use is feasible and reduces project costs.
    (7) Grantees and subgrantees are encouraged to use value engineering 
clauses in contracts for construction projects of sufficient size to 
offer reasonable opportunities for cost reductions. Value engineering is 
a systematic and creative anaylsis of each contract item or task to 
ensure that its essential function is provided at the overall lower 
cost.
    (8) Grantees and subgrantees will make awards only to responsible 
contractors possessing the ability to perform successfully under the 
terms and conditions of a proposed procurement. Consideration will be 
given to such matters as contractor integrity, compliance with public 
policy, record of past performance, and financial and technical 
resources.
    (9) Grantees and subgrantees will maintain records sufficient to 
detail the significant history of a procurement. These records will 
include, but are not necessarily limited to the following: rationale for 
the method of procurement, selection of contract type, contractor 
selection or rejection, and the basis for the contract price.
    (10) Grantees and subgrantees will use time and material type 
contracts only--
    (i) After a determination that no other contract is suitable, and
    (ii) If the contract includes a ceiling price that the contractor 
exceeds at its own risk.
    (11) Grantees and subgrantees alone will be responsible, in 
accordance with good administrative practice and sound business 
judgment, for the settlement of all contractual and administrative 
issues arising out of procurements. These issues include, but are not 
limited to source evaluation, protests, disputes, and claims. These 
standards do not relieve the grantee or subgrantee of any contractual 
responsibilities under its contracts. Federal agencies will not 
substitute their judgment for that of the grantee or subgrantee unless 
the matter is primarily a Federal concern. Violations of law will be 
referred to the local, State, or Federal authority having proper 
jurisdiction.
    (12) Grantees and subgrantees will have protest procedures to handle 
and resolve disputes relating to their procurements and shall in all 
instances disclose information regarding the protest to the awarding 
agency. A protestor must exhaust all administrative remedies with the 
grantee and subgrantee before pursuing a protest with the Federal 
agency. Reviews of protests by the Federal agency will be limited to:
    (i) Violations of Federal law or regulations and the standards of 
this section (violations of State or local law will be under the 
jurisdiction of State or local authorities) and
    (ii) Violations of the grantee's or subgrantee's protest procedures 
for failure to review a complaint or protest. Protests received by the 
Federal agency other than those specified above will be referred to the 
grantee or subgrantee.
    (c) Competition. (1) All procurement transactions will be conducted 
in a manner providing full and open competition consistent with the 
standards of Sec. 18.36. Some of the situations considered to be 
restrictive of competition include but are not limited to:

[[Page 137]]

    (i) Placing unreasonable requirements on firms in order for them to 
qualify to do business,
    (ii) Requiring unnecessary experience and excessive bonding,
    (iii) Noncompetitive pricing practices between firms or between 
affiliated companies,
    (iv) Noncompetitive awards to consultants that are on retainer 
contracts,
    (v) Organizational conflicts of interest,
    (vi) Specifying only a ``brand name'' product instead of allowing 
``an equal'' product to be offered and describing the performance of 
other relevant requirements of the procurement, and
    (vii) Any arbitrary action in the procurement process.
    (2) Grantees and subgrantees will conduct procurements in a manner 
that prohibits the use of statutorily or administratively imposed in-
State or local geographical preferences in the evaluation of bids or 
proposals, except in those cases where applicable Federal statutes 
expressly mandate or encourage geographic preference. Nothing in this 
section preempts State licensing laws. When contracting for 
architectural and engineering (A/E) services, geographic location may be 
a selection criteria provided its application leaves an appropriate 
number of qualified firms, given the nature and size of the project, to 
compete for the contract.
    (3) Grantees will have written selection procedures for procurement 
transactions. These procedures will ensure that all solicitations:
    (i) Incorporate a clear and accurate description of the technical 
requirements for the material, product, or service to be procured. Such 
description shall not, in competitive procurements, contain features 
which unduly restrict competition. The description may include a 
statement of the qualitative nature of the material, product or service 
to be procured, and when necessary, shall set forth those minimum 
essential characteristics and standards to which it must conform if it 
is to satisfy its intended use. Detailed product specifications should 
be avoided if at all possible. When it is impractical or uneconomical to 
make a clear and accurate description of the technical requirements, a 
``brand name or equal'' description may be used as a means to define the 
performance or other salient requirements of a procurement. The specific 
features of the named brand which must be met by offerors shall be 
clearly stated; and
    (ii) Identify all requirements which the offerors must fulfill and 
all other factors to be used in evaluating bids or proposals.
    (4) Grantees and subgrantees will ensure that all prequalified lists 
of persons, firms, or products which are used in acquiring goods and 
services are current and include enough qualified sources to ensure 
maximum open and free competition. Also, grantees and subgrantees will 
not preclude potential bidders from qualifying during the solicitation 
period.
    (d) Methods of procurement to be followed--(1) Procurement by small 
purchase procedures. Small purchase procedures are those relatively 
simple and informal procurement methods for securing services, supplies, 
or other property that do not cost more than the simplified acquisition 
threshold fixed at 41 U.S.C. 403(11) (currently set at $100,000). If 
small purchase procedures are used, price or rate quotations shall be 
obtained from an adequate number of qualified sources.
    (2) Procurement by sealed bids (formal advertising). Bids are 
publicly solicited and a firm-fixed-price contract (lump sum or unit 
price) is awarded to the responsible bidder whose bid, conforming with 
all the material terms and conditions of the invitation for bids, is the 
lowest in price. The sealed bid method is the preferred method for 
procuring construction, if the conditions in Sec. 18.36(d)(2)(i) apply.
    (i) In order for sealed bidding to be feasible, the following 
conditions should be present:
    (A) A complete, adequate, and realistic specification or purchase 
description is available;
    (B) Two or more responsible bidders are willing and able to compete 
effectively and for the business; and
    (C) The procurement lends itself to a firm fixed price contract and 
the selection of the successful bidder can be made principally on the 
basis of price.
    (ii) If sealed bids are used, the following requirements apply:

[[Page 138]]

    (A) The invitation for bids will be publicly advertised and bids 
shall be solicited from an adequate number of known suppliers, providing 
them sufficient time prior to the date set for opening the bids;
    (B) The invitation for bids, which will include any specifications 
and pertinent attachments, shall define the items or services in order 
for the bidder to properly respond;
    (C) All bids will be publicly opened at the time and place 
prescribed in the invitation for bids;
    (D) A firm fixed-price contract award will be made in writing to the 
lowest responsive and responsible bidder. Where specified in bidding 
documents, factors such as discounts, transportation cost, and life 
cycle costs shall be considered in determining which bid is lowest. 
Payment discounts will only be used to determine the low bid when prior 
experience indicates that such discounts are usually taken advantage of; 
and
    (E) Any or all bids may be rejected if there is a sound documented 
reason.
    (3) Procurement by competitive proposals. The technique of 
competitive proposals is normally conducted with more than one source 
submitting an offer, and either a fixed-price or cost-reimbursement type 
contract is awarded. It is generally used when conditions are not 
appropriate for the use of sealed bids. If this method is used, the 
following requirements apply:
    (i) Requests for proposals will be publicized and identify all 
evaluation factors and their relative importance. Any response to 
publicized requests for proposals shall be honored to the maximum extent 
practical;
    (ii) Proposals will be solicited from an adequate number of 
qualified sources;
    (iii) Grantees and subgrantees will have a method for conducting 
technical evaluations of the proposals received and for selecting 
awardees;
    (iv) Awards will be made to the responsible firm whose proposal is 
most advantageous to the program, with price and other factors 
considered; and
    (v) Grantees and subgrantees may use competitive proposal procedures 
for qualifications-based procurement of architectural/engineering (A/E) 
professional services whereby competitors' qualifications are evaluated 
and the most qualified competitor is selected, subject to negotiation of 
fair and reasonable compensation. The method, where price is not used as 
a selection factor, can only be used in procurement of A/E professional 
services. It cannot be used to purchase other types of services though 
A/E firms are a potential source to perform the proposed effort.
    (4) Procurement by noncompetitive proposals is procurement through 
solicitation of a proposal from only one source, or after solicitation 
of a number of sources, competition is determined inadequate.
    (i) Procurement by noncompetitive proposals may be used only when 
the award of a contract is infeasible under small purchase procedures, 
sealed bids or competitive proposals and one of the following 
circumstances applies:
    (A) The item is available only from a single source;
    (B) The public exigency or emergency for the requirement will not 
permit a delay resulting from competitive solicitation;
    (C) The awarding agency authorizes noncompetitive proposals; or
    (D) After solicitation of a number of sources, competition is 
determined inadequate.
    (ii) Cost analysis, i.e., verifying the proposed cost data, the 
projections of the data, and the evaluation of the specific elements of 
costs and profits, is required.
    (iii) Grantees and subgrantees may be required to submit the 
proposed procurement to the awarding agency for pre-award review in 
accordance with paragraph (g) of this section.
    (e) Contracting with small and minority firms, women's business 
enterprise and labor surplus area firms. (1) The grantee and subgrantee 
will take all necessary affirmative steps to assure that minority firms, 
women's business enterprises, and labor surplus area firms are used when 
possible.
    (2) Affirmative steps shall include:
    (i) Placing qualified small and minority businesses and women's 
business enterprises on solicitation lists;

[[Page 139]]

    (ii) Assuring that small and minority businesses, and women's 
business enterprises are solicited whenever they are potential sources;
    (iii) Dividing total requirements, when economically feasible, into 
smaller tasks or quantities to permit maximum participation by small and 
minority business, and women's business enterprises;
    (iv) Establishing delivery schedules, where the requirement permits, 
which encourage participation by small and minority business, and 
women's business enterprises;
    (v) Using the services and assistance of the Small Business 
Administration, and the Minority Business Development Agency of the 
Department of Commerce; and
    (vi) Requiring the prime contractor, if subcontracts are to be let, 
to take the affirmative steps listed in paragraphs (e)(2) (i) through 
(v) of this section.
    (f) Contract cost and price. (1) Grantees and subgrantees must 
perform a cost or price analysis in connection with every procurement 
action including contract modifications. The method and degree of 
analysis is dependent on the facts surrounding the particular 
procurement situation, but as a starting point, grantees must make 
independent estimates before receiving bids or proposals. A cost 
analysis must be performed when the offeror is required to submit the 
elements of his estimated cost, e.g., under professional, consulting, 
and architectural engineering services contracts. A cost analysis will 
be necessary when adequate price competition is lacking, and for sole 
source procurements, including contract modifications or change orders, 
unless price resonableness can be established on the basis of a catalog 
or market price of a commercial product sold in substantial quantities 
to the general public or based on prices set by law or regulation. A 
price analysis will be used in all other instances to determine the 
reasonableness of the proposed contract price.
    (2) Grantees and subgrantees will negotiate profit as a separate 
element of the price for each contract in which there is no price 
competition and in all cases where cost analysis is performed. To 
establish a fair and reasonable profit, consideration will be given to 
the complexity of the work to be performed, the risk borne by the 
contractor, the contractor's investment, the amount of subcontracting, 
the quality of its record of past performance, and industry profit rates 
in the surrounding geographical area for similar work.
    (3) Costs or prices based on estimated costs for contracts under 
grants will be allowable only to the extent that costs incurred or cost 
estimates included in negotiated prices are consistent with Federal cost 
principles (see Sec. 18.22). Grantees may reference their own cost 
principles that comply with the applicable Federal cost principles.
    (4) The cost plus a percentage of cost and percentage of 
construction cost methods of contracting shall not be used.
    (g) Awarding agency review. (1) Grantees and subgrantees must make 
available, upon request of the awarding agency, technical specifications 
on proposed procurements where the awarding agency believes such review 
is needed to ensure that the item and/or service specified is the one 
being proposed for purchase. This review generally will take place prior 
to the time the specification is incorporated into a solicitation 
document. However, if the grantee or subgrantee desires to have the 
review accomplished after a solicitation has been developed, the 
awarding agency may still review the specifications, with such review 
usually limited to the technical aspects of the proposed purchase.
    (2) Grantees and subgrantees must on request make available for 
awarding agency pre-award review procurement documents, such as requests 
for proposals or invitations for bids, independent cost estimates, etc. 
when:
    (i) A grantee's or subgrantee's procurement procedures or operation 
fails to comply with the procurement standards in this section; or
    (ii) The procurement is expected to exceed the simplified 
acquisition threshold and is to be awarded without competition or only 
one bid or offer is received in response to a solicitation; or

[[Page 140]]

    (iii) The procurement, which is expected to exceed the simplified 
acquisition threshold, specifies a ``brand name'' product; or
    (iv) The proposed award is more than the simplified acquisition 
threshold and is to be awarded to other than the apparent low bidder 
under a sealed bid procurement; or
    (v) A proposed contract modification changes the scope of a contract 
or increases the contract amount by more than the simplified acquisition 
threshold.
    (3) A grantee or subgrantee will be exempt from the pre-award review 
in paragraph (g)(2) of this section if the awarding agency determines 
that its procurement systems comply with the standards of this section.
    (i) A grantee or subgrantee may request that its procurement system 
be reviewed by the awarding agency to determine whether its system meets 
these standards in order for its system to be certified. Generally, 
these reviews shall occur where there is a continuous high-dollar 
funding, and third-party contracts are awarded on a regular basis.
    (ii) A grantee or subgrantee may self-certify its procurement 
system. Such self-certification shall not limit the awarding agency's 
right to survey the system. Under a self-certification procedure, 
awarding agencies may wish to rely on written assurances from the 
grantee or subgrantee that it is complying with these standards. A 
grantee or subgrantee will cite specific procedures, regulations, 
standards, etc., as being in compliance with these requirements and have 
its system available for review.
    (h) Bonding requirements. For construction or facility improvement 
contracts or subcontracts exceeding the simplified acquisition 
threshold, the awarding agency may accept the bonding policy and 
requirements of the grantee or subgrantee provided the awarding agency 
has made a determination that the awarding agency's interest is 
adequately protected. If such a determination has not been made, the 
minimum requirements shall be as follows:
    (1) A bid guarantee from each bidder equivalent to five percent of 
the bid price. The ``bid guarantee'' shall consist of a firm commitment 
such as a bid bond, certified check, or other negotiable instrument 
accompanying a bid as assurance that the bidder will, upon acceptance of 
his bid, execute such contractual documents as may be required within 
the time specified.
    (2) A performance bond on the part of the contractor for 100 percent 
of the contract price. A ``performance bond'' is one executed in 
connection with a contract to secure fulfillment of all the contractor's 
obligations under such contract.
    (3) A payment bond on the part of the contractor for 100 percent of 
the contract price. A ``payment bond'' is one executed in connection 
with a contract to assure payment as required by law of all persons 
supplying labor and material in the execution of the work provided for 
in the contract.
    (i) Contract provisions. A grantee's and subgrantee's contracts must 
contain provisions in paragraph (i) of this section. Federal agencies 
are permitted to require changes, remedies, changed conditions, access 
and records retention, suspension of work, and other clauses approved by 
the Office of Federal Procurement Policy.
    (1) Administrative, contractual, or legal remedies in instances 
where contractors violate or breach contract terms, and provide for such 
sanctions and penalties as may be appropriate. (Contracts more than the 
simplified acquisition threshold)
    (2) Termination for cause and for convenience by the grantee or 
subgrantee including the manner by which it will be effected and the 
basis for settlement. (All contracts in excess of $10,000)
    (3) Compliance with Executive Order 11246 of September 24, 1965, 
entitled ``Equal Employment Opportunity,'' as amended by Executive Order 
11375 of October 13, 1967, and as supplemented in Department of Labor 
regulations (41 CFR chapter 60). (All construction contracts awarded in 
excess of $10,000 by grantees and their contractors or subgrantees)
    (4) Compliance with the Copeland ``Anti-Kickback'' Act (18 U.S.C. 
874) as supplemented in Department of Labor

[[Page 141]]

regulations (29 CFR part 3). (All contracts and subgrants for 
construction or repair)
    (5) Compliance with the Davis-Bacon Act (40 U.S.C. 276a to 276a-7) 
as supplemented by Department of Labor regulations (29 CFR part 5). 
(Construction contracts in excess of $2000 awarded by grantees and 
subgrantees when required by Federal grant program legislation)
    (6) Compliance with Sections 103 and 107 of the Contract Work Hours 
and Safety Standards Act (40 U.S.C. 327-330) as supplemented by 
Department of Labor regulations (29 CFR part 5). (Construction contracts 
awarded by grantees and subgrantees in excess of $2000, and in excess of 
$2500 for other contracts which involve the employment of mechanics or 
laborers)
    (7) Notice of awarding agency requirements and regulations 
pertaining to reporting.
    (8) Notice of awarding agency requirements and regulations 
pertaining to patent rights with respect to any discovery or invention 
which arises or is developed in the course of or under such contract.
    (9) Awarding agency requirements and regulations pertaining to 
copyrights and rights in data.
    (10) Access by the grantee, the subgrantee, the Federal grantor 
agency, the Comptroller General of the United States, or any of their 
duly authorized representatives to any books, documents, papers, and 
records of the contractor which are directly pertinent to that specific 
contract for the purpose of making audit, examination, excerpts, and 
transcriptions.
    (11) Retention of all required records for three years after 
grantees or subgrantees make final payments and all other pending 
matters are closed.
    (12) Compliance with all applicable standards, orders, or 
requirements issued under section 306 of the Clean Air Act (42 U.S.C. 
1857(h)), section 508 of the Clean Water Act (33 U.S.C. 1368), Executive 
Order 11738, and Environmental Protection Agency regulations (40 CFR 
part 15). (Contracts, subcontracts, and subgrants of amounts in excess 
of $100,000)
    (13) Mandatory standards and policies relating to energy efficiency 
which are contained in the state energy conservation plan issued in 
compliance with the Energy Policy and Conservation Act (Pub. L. 94-163, 
89 Stat. 871).
    (j) 23 U.S.C. 112(a) directs the Secretary to require recipients of 
highway construction grants to use bidding methods that are ``effective 
in securing competition.'' Detailed construction contracting procedures 
are contained in 23 CFR part 635, subpart A.
    (k) Section 3(a)(2)(C) of the UMT Act of 1964, as amended, prohibits 
the use of grant or loan funds to support procurements utilizing 
exclusionary or discriminatory specifications.
    (l) 46 U.S.C. 1241(b)(1) and 46 CFR part 381 impose cargo preference 
requirements on the shipment of foreign made goods.
    (m) Section 165 of the Surface Transportation Assistance Act of 
1982, 49 U.S.C. 1601, section 337 of the Surface Transportation and 
Uniform Relocation Assistance Act of 1987, and 49 CFR parts 660 and 661 
impose Buy America provisions on the procurement of foreign products and 
materials.
    (n) Section 105(f) of the Surface Transportation Assistance Act of 
1982, section 106(c) of the Surface Transportation and Uniform 
Relocation Assistance Act of 1987, and 49 CFR part 23 impose 
requirements for the participation of disadvantaged business 
enterprises.
    (o) Section 308 of the Surface Transportation Assistance Act of 
1982, 49 U.S.C. 1068(b)(2), authorizes the use of competitive 
negotiation for the purchase of rolling stock as appropriate.
    (p) 23 U.S.C. 112(b) provides for an exemption to competitive 
bidding requirements for highway construction contracts in emergency 
situations.
    (q) 23 U.S.C. 112 requires concurrence by the Secretary before 
highway construction contracts can be awarded, except for projects 
authorized under the provisions of 23 U.S.C. 17l.
    (r) 23 U.S.C. 112(e) requires standardized contract clauses 
concerning site conditions, suspension or work, and material changes in 
the scope of the work for highway construction contracts.
    (s) 23 U.S.C. 140(b) authorizes the preferential employment of 
Indians on Indian Reservation road projects and contracts.

[[Page 142]]

    (t) FHWA, UMTA, and Federal Aviation Administration (FAA) grantees 
and subgrantees shall extend the use of qualifications-based (e.g., 
architectural and engineering services) contract selection procedures to 
certain other related areas and shall award such contracts in the same 
manner as Federal contracts for architectural and engineering services 
are negotiated under Title IX of the Federal Property and Administrative 
Services Act of 1949, or equivalent State (or airport sponsor for FAA) 
qualifications-based requirements. For FHWA and UMTA programs, this 
provision applies except to the extent that a State adopts or has 
adopted by statute a formal procedure for the procurement of such 
services.

[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8087, Mar. 11, 
1988; 60 FR 19639, 19647, Apr. 19, 1995]



Sec. 18.37  Subgrants.

    (a) States. States shall follow state law and procedures when 
awarding and administering subgrants (whether on a cost reimbursement or 
fixed amount basis) of financial assistance to local and Indian tribal 
governments. States shall:
    (1) Ensure that every subgrant includes any clauses required by 
Federal statute and executive orders and their implementing regulations;
    (2) Ensure that subgrantees are aware of requirements imposed upon 
them by Federal statute and regulation;
    (3) Ensure that a provision for compliance with Sec. 18.42 is 
placed in every cost reimbursement subgrant; and
    (4) Conform any advances of grant funds to subgrantees substantially 
to the same standards of timing and amount that apply to cash advances 
by Federal agencies.
    (b) All other grantees. All other grantees shall follow the 
provisions of this part which are applicable to awarding agencies when 
awarding and administering subgrants (whether on a cost reimbursement or 
fixed amount basis) of financial assistance to local and Indian tribal 
governments. Grantees shall:
    (1) Ensure that every subgrant includes a provision for compliance 
with this part;
    (2) Ensure that every subgrant includes any clauses required by 
Federal statute and executive orders and their implementing regulations; 
and
    (3) Ensure that subgrantees are aware of requirements imposed upon 
them by Federal statutes and regulations.
    (c) Exceptions. By their own terms, certain provisions of this part 
do not apply to the award and administration of subgrants:
    (1) Section 18.10;
    (2) Section 18.11;
    (3) The letter-of-credit procedures specified in Treasury 
Regulations at 31 CFR part 205, cited in Sec. 18.21; and
    (4) Section 18.50.

              Reports, Records, Retention, and Enforcement



Sec. 18.40  Monitoring and reporting program performance.

    (a) Monitoring by grantees. Grantees are responsible for managing 
the day-to-day operations of grant and subgrant supported activities. 
Grantees must monitor grant and subgrant supported activities to assure 
compliance with applicable Federal requirements and that performance 
goals are being achieved. Grantee monitoring must cover each program, 
function or activity.
    (b) Nonconstruction performance reports. The Federal agency may, if 
it decides that performance information available from subsequent 
applications contains sufficient information to meet its programmatic 
needs, require the grantee to submit a performance report only upon 
expiration or termination of grant support. Unless waived by the Federal 
agency this report will be due on the same date as the final Financial 
Status Report.
    (1) Grantees shall submit annual performance reports unless the 
awarding agency requires quarterly or semi-annual reports. However, 
performance reports will not be required more frequently than quarterly. 
Annual reports shall be due 90 days after the grant year, quarterly or 
semi-annual reports shall be due 30 days after the reporting period. The 
final performance report will be due 90 days after the expiration or 
termination of grant support. If a

[[Page 143]]

justified request is submitted by a grantee, the Federal agency may 
extend the due date for any performance report. Additionally, 
requirements for unnecessary performance reports may be waived by the 
Federal agency.
    (2) Performance reports will contain, for each grant, brief 
information on the following:
    (i) A comparison of actual accomplishments to the objectives 
established for the period. Where the output of the project can be 
quantified, a computation of the cost per unit of output may be required 
if that information will be useful.
    (ii) The reasons for slippage if established objectives were not 
met.
    (iii) Additional pertinent information including, when appropriate, 
analysis and explanation of cost overruns or high unit costs.
    (3) Grantees will not be required to submit more than the original 
and two copies of performance reports.
    (4) Grantees will adhere to the standards in this section in 
prescribing performance reporting requirements for subgrantees.
    (c) Construction performance reports. For the most part, on-site 
technical inspections and certified percentage-of-completion data are 
relied on heavily by Federal agencies to monitor progress under 
construction grants and subgrants. The Federal agency will require 
additional formal performance reports only when considered necessary, 
and never more frequently than quarterly.
    (1) Section 12(h) of the UMT Act of 1964, as amended, requires pre-
award testing of new buses models.
    (2) [Reserved]
    (d) Significant developments. Events may occur between the scheduled 
performance reporting dates which have significant impact upon the grant 
or subgrant supported activity. In such cases, the grantee must inform 
the Federal agency as soon as the following types of conditions become 
known:
    (1) Problems, delays, or adverse conditions which will materially 
impair the ability to meet the objective of the award. This disclosure 
must include a statement of the action taken, or contemplated, and any 
assistance needed to resolve the situation.
    (2) Favorable developments which enable meeting time schedules and 
objectives sooner or at less cost than anticipated or producing more 
beneficial results than originally planned.
    (e) Federal agencies may make site visits as warranted by program 
needs.
    (f) Waivers, extensions. (1) Federal agencies may waive any 
performance report required by this part if not needed.
    (2) The grantee may waive any performance report from a subgrantee 
when not needed. The grantee may extend the due date for any performance 
report from a subgrantee if the grantee will still be able to meet its 
performance reporting obligations to the Federal agency.

[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8087, Mar. 11, 
1988]



Sec. 18.41  Financial reporting.

    (a) General. (1) Except as provided in paragraphs (a) (2) and (5) of 
this section, grantees will use only the forms specified in paragraphs 
(a) through (e) of this section, and such supplementary or other forms 
as may from time to time be authorized by OMB, for:
    (i) Submitting financial reports to Federal agencies, or
    (ii) Requesting advances or reimbursements when letters of credit 
are not used.
    (2) Grantees need not apply the forms prescribed in this section in 
dealing with their subgrantees. However, grantees shall not impose more 
burdensome requirements on subgrantees.
    (3) Grantees shall follow all applicable standard and supplemental 
Federal agency instructions approved by OMB to the extent required under 
the Paperwork Reduction Act of 1980 for use in connection with forms 
specified in paragraphs (b) through (e) of this section. Federal 
agencies may issue substantive supplementary instructions only with the 
approval of OMB. Federal agencies may shade out or instruct the grantee 
to disregard any line item that the Federal agency finds unnecessary for 
its decisionmaking purposes.
    (4) Grantees will not be required to submit more than the original 
and two copies of forms required under this part.

[[Page 144]]

    (5) Federal agencies may provide computer outputs to grantees to 
expedite or contribute to the accuracy of reporting. Federal agencies 
may accept the required information from grantees in machine usable 
format or computer printouts instead of prescribed forms.
    (6) Federal agencies may waive any report required by this section 
if not needed.
    (7) Federal agencies may extend the due date of any financial report 
upon receiving a justified request from a grantee.
    (b) Financial Status Report--(1) Form. Grantees will use Standard 
Form 269 or 269A, Financial Status Report, to report the status of funds 
for all nonconstruction grants and for construction grants when required 
in accordance with Sec. 18.41(e)(2)(iii).
    (2) Accounting basis. Each grantee will report program outlays and 
program income on a cash or accrual basis as prescribed by the awarding 
agency. If the Federal agency requires accrual information and the 
grantee's accounting records are not normally kept on the accural basis, 
the grantee shall not be required to convert its accounting system but 
shall develop such accrual information through and analysis of the 
documentation on hand.
    (3) Frequency. The Federal agency may prescribe the frequency of the 
report for each project or program. However, the report will not be 
required more frequently than quarterly. If the Federal agency does not 
specify the frequency of the report, it will be submitted annually. A 
final report will be required upon expiration or termination of grant 
support.
    (4) Due date. When reports are required on a quarterly or semiannual 
basis, they will be due 30 days after the reporting period. When 
required on an annual basis, they will be due 90 days after the grant 
year. Final reports will be due 90 days after the expiration or 
termination of grant support.
    (c) Federal Cash Transactions Report--(1) Form. (i) For grants paid 
by letter or credit, Treasury check advances or electronic transfer of 
funds, the grantee will submit the Standard Form 272, Federal Cash 
Transactions Report, and when necessary, its continuation sheet, 
Standard Form 272a, unless the terms of the award exempt the grantee 
from this requirement.
    (ii) These reports will be used by the Federal agency to monitor 
cash advanced to grantees and to obtain disbursement or outlay 
information for each grant from grantees. The format of the report may 
be adapted as appropriate when reporting is to be accomplished with the 
assistance of automatic data processing equipment provided that the 
information to be submitted is not changed in substance.
    (2) Forecasts of Federal cash requirements. Forecasts of Federal 
cash requirements may be required in the ``Remarks'' section of the 
report.
    (3) Cash in hands of subgrantees. When considered necessary and 
feasible by the Federal agency, grantees may be required to report the 
amount of cash advances in excess of three days needs in the hands of 
their subgrantees or contractors and to provide short narrative 
explanations of actions taken by the grantee to reduce the excess 
balances.
    (4) Frequency and due date. Grantees must submit the report no later 
than 15 working days following the end of each quarter. However, where 
an advance either by letter of credit or electronic transfer of funds is 
authorized at an annualized rate of one million dollars or more, the 
Federal agency may require the report to be submitted within 15 working 
days following the end of each month.
    (d) Request for advance or reimbursement--(1) Advance payments. 
Requests for Treasury check advance payments will be submitted on 
Standard Form 270, Request for Advance or Reimbursement. (This form will 
not be used for drawdowns under a letter of credit, electronic funds 
transfer or when Treasury check advance payments are made to the grantee 
automatically on a predetermined basis.)
    (2) Reimbursements. Requests for reimbursement under nonconstruction 
grants will also be submitted on Standard Form 270. (For reimbursement 
requests under construction grants, see paragraph (e)(1) of this 
section.)
    (3) The frequency for submitting payment requests is treated in 
Sec. 18.41(b)(3).
    (e) Outlay report and request for reimbursement for construction 
programs--(1)

[[Page 145]]

Grants that support construction activities paid by reimbursement 
method. (i) Requests for reimbursement under construction grants will be 
submitted on Standard Form 271, Outlay Report and Request for 
Reimbursement for Construction Programs. Federal agencies may, however, 
prescribe the Request for Advance or Reimbursement form, specified in 
Sec. 18.41(d), instead of this form.
    (ii) The frequency for submitting reimbursement requests is treated 
in Sec. 18.41(b)(3).
    (2) Grants that support construction activities paid by letter of 
credit, electronic funds transfer or Treasury check advance. (i) When a 
construction grant is paid by letter of credit, electronic funds 
transfer or Treasury check advances, the grantee will report its outlays 
to the Federal agency using Standard Form 271, Outlay Report and Request 
for Reimbursement for Construction Programs. The Federal agency will 
provide any necessary special instruction. However, frequency and due 
date shall be governed by Sec. 18.41(b) (3) and (4).
    (ii) When a construction grant is paid by Treasury check advances 
based on periodic requests from the grantee, the advances will be 
requested on the form specified in Sec. 18.41(d).
    (iii) The Federal agency may substitute the Financial Status Report 
specified in Sec. 18.41(b) for the Outlay Report and Request for 
Reimbursement for Construction Programs.
    (3) Accounting basis. The accounting basis for the Outlay Report and 
Request for Reimbursement for Construction Programs shall be governed by 
Sec. 18.41(b)(2).
    (f) Notwithstanding the provisions of paragraphs (a)(1) of this 
section, recipients of FHWA and National Highway Traffic Safety 
Administration (NHTSA) grants shall use FHWA, NHTSA or State financial 
reports.

[53 FR 8086 and 8087, Mar. 11, 1988, as amended at 53 FR 8087, Mar. 11, 
1988]



Sec. 18.42  Retention and access requirements for records.

    (a) Applicability. (1) This section applies to all financial and 
programmatic records, supporting documents, statistical records, and 
other records of grantees or subgrantees which are:
    (i) Required to be maintained by the terms of this part, program 
regulations or the grant agreement, or
    (ii) Otherwise reasonably considered as pertinent to program 
regulations or the grant agreement.
    (2) This section does not apply to records maintained by contractors 
or subcontractors. For a requirement to place a provision concerning 
records in certain kinds of contracts, see Sec. 18.36(i)(10).
    (b) Length of retention period. (1) Except as otherwise provided, 
records must be retained for three years from the starting date 
specified in paragraph (c) of this section.
    (2) If any litigation, claim, negotiation, audit or other action 
involving the records has been started before the expiration of the 3-
year period, the records must be retained until completion of the action 
and resolution of all issues which arise from it, or until the end of 
the regular 3-year period, whichever is later.
    (3) To avoid duplicate recordkeeping, awarding agencies may make 
special arrangements with grantees and subgrantees to retain any records 
which are continuously needed for joint use. The awarding agency will 
request transfer of records to its custody when it determines that the 
records possess long-term retention value. When the records are 
transferred to or maintained by the Federal agency, the 3-year retention 
requirement is not applicable to the grantee or subgrantee.
    (c) Starting date of retention period--(1) General. When grant 
support is continued or renewed at annual or other intervals, the 
retention period for the records of each funding period starts on the 
day the grantee or subgrantee submits to the awarding agency its single 
or last expenditure report for that period. However, if grant support is 
continued or renewed quarterly, the retention period for each year's 
records starts on the day the grantee submits its expenditure report for 
the last quarter of the Federal fiscal year. In all other cases, the 
retention period starts on the day the grantee submits its

[[Page 146]]

final expenditure report. If an expenditure report has been waived, the 
retention period starts on the day the report would have been due.
    (2) Real property and equipment records. The retention period for 
real property and equipment records starts from the date of the 
disposition or replacement or transfer at the direction of the awarding 
agency.
    (3) Records for income transactions after grant or subgrant support. 
In some cases grantees must report income after the period of grant 
support. Where there is such a requirement, the retention period for the 
records pertaining to the earning of the income starts from the end of 
the grantee's fiscal year in which the income is earned.
    (4) Indirect cost rate proposals, cost allocations plans, etc. This 
paragraph applies to the following types of documents, and their 
supporting records: indirect cost rate computations or proposals, cost 
allocation plans, and any similar accounting computations of the rate at 
which a particular group of costs is chargeable (such as computer usage 
chargeback rates or composite fringe benefit rates).
    (i) If submitted for negotiation. If the proposal, plan, or other 
computation is required to be submitted to the Federal Government (or to 
the grantee) to form the basis for negotiation of the rate, then the 3-
year retention period for its supporting records starts from the date of 
such submission.
    (ii) If not submitted for negotiation. If the proposal, plan, or 
other computation is not required to be submitted to the Federal 
Government (or to the grantee) for negotiation purposes, then the 3-year 
retention period for the proposal plan, or computation and its 
supporting records starts from theend of the fiscal year (or other 
accounting period) covered by the proposal, plan, or other computation.
    (d) Substitution of microfilm. Copies made by microfilming, 
photocopying, or similar methods may be substituted for the original 
records.
    (e) Access to records--(1) Records of grantees and subgrantees. The 
awarding agency and the Comptroller General of the United States, or any 
of their authorized representatives, shall have the right of access to 
any pertinent books, documents, papers, or other records of grantees and 
subgrantees which are pertinent to the grant, in order to make audits, 
examinations, excerpts, and transcripts.
    (2) Expiration of right of access. The right of access in this 
section must not be limited to the required retention period but shall 
last as long as the records are retained.
    (f) Restrictions on public access. The Federal Freedom of 
Information Act (5 U.S.C. 552) does not apply to records unless required 
by Federal, State, or local law, grantees and subgrantees are not 
required to permit public access to their records.



Sec. 18.43  Enforcement.

    (a) Remedies for noncompliance. If a grantee or subgrantee 
materially fails to comply with any term of an award, whether stated in 
a Federal statute or regulation, an assurance, in a State plan or 
application, a notice of award, or elsewhere, the awarding agency may 
take one or more of the following actions, as appropriate in the 
circumstances:
    (1) Temporarily withhold cash payments pending correction of the 
deficiency by the grantee or subgrantee or more severe enforcement 
action by the awarding agency,
    (2) Disallow (that is, deny both use of funds and matching credit 
for) all or part of the cost of the activity or action not in 
compliance,
    (3) Wholly or partly suspend or terminate the current award for the 
grantee's or subgrantee's program,
    (4) Withhold further awards for the program, or
    (5) Take other remedies that may be legally available.
    (b) Hearings, appeals. In taking an enforcement action, the awarding 
agency will provide the grantee or subgrantee an opportunity for such 
hearing, appeal, or other administrative proceeding to which the grantee 
or subgrantee is entitled under any statute or regulation applicable to 
the action involved.
    (c) Effects of suspension and termination. Costs of grantee or 
subgrantee resulting from obligations incurred by the grantee or 
subgrantee during a suspension or after termination of an

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award are not allowable unless the awarding agency expressly authorizes 
them in the notice of suspension or termination or subsequently. Other 
grantee or subgrantee costs during suspension or after termination which 
are necessary and not reasonably avoidable are allowable if:
    (1) The costs result from obligations which were properly incurred 
by the grantee or subgrantee before the effective date of suspension or 
termination, are not in anticipation of it, and, in the case of a 
termination, are noncancellable, and,
    (2) The costs would be allowable if the award were not suspended or 
expired normally at the end of the funding period in which the 
termination takes effect.
    (d) Relationship to debarment and suspension. The enforcement 
remedies identified in this section, including suspension and 
termination, do not preclude grantee or subgrantee from being subject to 
``Debarment and Suspension'' under E.O. 12549 (see Sec. 18.35).



Sec. 18.44  Termination for convenience.

    Except as provided in Sec. 18.43 awards may be terminated in whole 
or in part only as follows:
    (a) By the awarding agency with the consent of the grantee or 
subgrantee in which case the two parties shall agree upon the 
termination conditions, including the effective date and in the case of 
partial termination, the portion to be terminated, or
    (b) By the grantee or subgrantee upon written notification to the 
awarding agency, setting forth the reasons for such termination, the 
effective date, and in the case of partial termination, the portion to 
be terminated. However, if, in the case of a partial termination, the 
awarding agency determines that the remaining portion of the award will 
not accomplish the purposes for which the award was made, the awarding 
agency may terminate the award in its entirety under either Sec. 18.43 
or paragraph (a) of this section.



                 Subpart D_After-The-Grant Requirements



Sec. 18.50  Closeout.

    (a) General. The Federal agency will close out the award when it 
determines that all applicable administrative actions and all required 
work of the grant has been completed.
    (b) Reports. Within 90 days after the expiration or termination of 
the grant, the grantee must submit all financial, performance, and other 
reports required as a condition of the grant. Upon request by the 
grantee, Federal agencies may extend this timeframe. These may include 
but are not limited to:
    (1) Final performance or progress report.
    (2) Financial Status Report (SF 269) or Outlay Report and Request 
for Reimbursement for Construction Programs (SF-271) (as applicable).
    (3) Final request for payment (SF-270) (if applicable).
    (4) Invention disclosure (if applicable).
    (5) Federally-owned property report:

In accordance with Sec. 18.32(f), a grantee must submit an inventory of 
all federally owned property (as distinct from property acquired with 
grant funds) for which it is accountable and request disposition 
instructions from the Federal agency of property no longer needed.
    (c) Cost adjustment. The Federal agency will, within 90 days after 
receipt of reports in paragraph (b) of this section, make upward or 
downward adjustments to the allowable costs.
    (d) Cash adjustments. (1) The Federal agency will make prompt 
payment to the grantee for allowable reimbursable costs.
    (2) The grantee must immediately refund to the Federal agency any 
balance of unobligated (unencumbered) cash advanced that is not 
authorized to be retained for use on other grants.



Sec. 18.51  Later disallowances and adjustments.

    The closeout of a grant does not affect:
    (a) The Federal agency's right to disallow costs and recover funds 
on the basis of a later audit or other review;

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    (b) The grantee's obligation to return any funds due as a result of 
later refunds, corrections, or other transactions;
    (c) Records retention as required in Sec. 18.42;
    (d) Property management requirements in Sec. Sec. 18.31 and 18.32; 
and
    (e) Audit requirements in Sec. 18.26.



Sec. 18.52  Collection of amounts due.

    (a) Any funds paid to a grantee in excess of the amount to which the 
grantee is finally determined to be entitled under the terms of the 
award constitute a debt to the Federal Government. If not paid within a 
reasonable period after demand, the Federal agency may reduce the debt 
by:
    (1) Making an adminstrative offset against other requests for 
reimbursements,
    (2) Withholding advance payments otherwise due to the grantee, or
    (3) Other action permitted by law.
    (b) Except where otherwise provided by statutes or regulations, the 
Federal agency will charge interest on an overdue debt in accordance 
with the Federal Claims Collection Standards (4 CFR Ch. II). The date 
from which interest is computed is not extended by litigation or the 
filing of any form of appeal.

Subpart E--Entitlements [Reserved]



PART 19_UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS 
WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT

ORGANIZATIONS--Table of Contents



                            Subpart A_General

Sec.
19.1 Purpose.
19.2 Definitions.
19.3 Effect on other issuances.
19.4 Deviations.
19.5 Subawards.
19.6 Availability of material referenced in this part.

                    Subpart B_Pre-Award Requirements

19.10 Purpose.
19.11 Pre-award policies.
19.12 Forms for applying for Federal assistance.
19.13 Debarment and suspension.
19.14 Special award conditions.
19.15 Metric system of measurement.
19.16 Resource Conservation and Recovery Act.
19.17 Certifications and representations.

                    Subpart C_Post-Award Requirements

                    Financial and Program Management

19.20 Purpose of financial and program management.
19.21 Standards for financial management systems.
19.22 Payment.
19.23 Cost sharing or matching.
19.24 Program income.
19.25 Revision of budget and program plans.
19.26 Non-Federal audits.
19.27 Allowable costs.
19.28 Period of availability of funds.

                           Property Standards

19.30 Purpose of property standards.
19.31 Insurance coverage.
19.32 Real property.
19.33 Federally-owned and exempt property.
19.34 Equipment.
19.35 Supplies and other expendable property.
19.36 Intangible property.
19.37 Property trust relationship.

                          Procurement Standards

19.40 Purpose of procurement standards.
19.41 Recipient responsibilities.
19.42 Codes of conduct.
19.43 Competition.
19.44 Procurement procedures.
19.45 Cost and price analysis.
19.46 Procurement records.
19.47 Contract administration.
19.48 Contract provisions.

                           Reports and Records

19.50 Purpose of reports and records.
19.51 Monitoring and reporting program performance.
19.52 Financial reporting.
19.53 Retention and access requirements for records.

                       Termination and Enforcement

19.60 Purpose of termination and enforcement.
19.61 Termination.
19.62 Enforcement.

                 Subpart D_After-the-Award Requirements

19.70 Purpose.
19.71 Closeout procedures.
19.72 Subsequent adjustments and continuing responsibilities.

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19.73 Collection of amounts due.

Appendix A to Part 19--Contract Provisions

    Authority: 49 U.S.C. 322(a).

    Source: 59 FR 15639, Apr. 4, 1994, unless otherwise noted.



                            Subpart A_General



Sec. 19.1  Purpose.

    This part establishes uniform administrative requirements for 
Federal grants and agreements awarded to institutions of higher 
education, hospitals, and other non-profit organizations. Federal 
awarding agencies shall not impose additional or inconsistent 
requirements, except as provided in Sec. Sec. 19.4 and 19.14 or unless 
specifically required by Federal statute or executive order. Non-profit 
organizations that implement Federal programs for the States are also 
subject to State requirements.



Sec. 19.2  Definitions.

    (a) Accrued expenditures means the charges incurred by the recipient 
during a given period requiring the provision of funds for:
    (1) Goods and other tangible property received;
    (2) Services performed by employees, contractors, subrecipients, and 
other payees; and,
    (3) Other amounts becoming owed under programs for which no current 
services or performance is required.
    (b) Accrued income means the sum of: (1) Earnings during a given 
period from:
    (i) Services performed by the recipient, and
    (ii) Goods and other tangible property delivered to purchasers; and
    (2) Amounts becoming owed to the recipient for which no current 
services or performance is required by the recipient.
    (c) Acquisition cost of equipment means the net invoice price of the 
equipment, including the cost of modifications, attachments, 
accessories, or auxiliary apparatus necessary to make the property 
usable for the purpose for which it was acquired. Other charges, such as 
the cost of installation, transportation, taxes, duty or protective in-
transit insurance, shall be included or excluded from the unit 
acquisition cost in accordance with the recipient's regular accounting 
practices.
    (d) Advance means a payment made by Treasury check or other 
appropriate payment mechanism to a recipient upon its request either 
before outlays are made by the recipient or through the use of 
predetermined payment schedules.
    (e) Award means financial assistance that provides support or 
stimulation to accomplish a public purpose. Awards include grants and 
other agreements in the form of money or property in lieu of money, by 
the Federal Government to an eligible recipient. The term does not 
include: Technical assistance, which provides services instead of money; 
other assistance in the form of loans, loan guarantees, interest 
subsidies, or insurance; direct payments of any kind to individuals; 
and, contracts which are required to be entered into and administered 
under procurement laws and regulations.
    (f) Cash contributions means the recipient's cash outlay, including 
the outlay of money contributed to the recipient by third parties.
    (g) Closeout means the process by which a Federal awarding agency 
determines that all applicable administrative actions and all required 
work of the award have been completed by the recipient and Federal 
awarding agency.
    (h) Contract means a procurement contract under an award or 
subaward, and a procurement subcontract under a recipient's or 
subrecipient's contract.
    (i) Cost sharing or matching means that portion of project or 
program costs not borne by the Federal Government.
    (j) Date of completion means the date on which all work under an 
award is completed or the date on the award document, or any supplement 
or amendment thereto, on which Federal sponsorship ends.
    (k) Disallowed costs means those charges to an award that the 
Federal awarding agency determines to be unallowable, in accordance with 
the applicable Federal cost principles or other terms and conditions 
contained in the award.

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    (l) Equipment means tangible nonexpendable personal property 
including exempt property charged directly to the award having a useful 
life of more than one year and an acquisition cost of $5,000 or more per 
unit. However, consistent with recipient policy, lower limits may be 
established.
    (m) Excess property means property under the control of any Federal 
awarding agency that, as determined by the head thereof, is no longer 
required for its needs or the discharge of its responsibilities.
    (n) Exempt property means tangible personal property acquired in 
whole or in part with Federal funds, where the Federal awarding agency 
has statutory authority to vest title in the recipient without further 
obligation to the Federal Government. An example of exempt property 
authority is contained in the Federal Grant and Cooperative Agreement 
Act (31 U.S.C. 6306), for property acquired under an award to conduct 
basic or applied research by a non-profit institution of higher 
education or non-profit organization whose principal purpose is 
conducting scientific research.
    (o) Federal awarding agency means the Federal agency that provides 
an award to the recipient. Except for the specific review requirements 
for deviations in Sec. 19.4, for Department of Transportation (DOT) 
awards, it means the DOT operating administration or departmental office 
that made the award.
    (p) Federal funds authorized means the total amount of Federal funds 
obligated by the Federal Government for use by the recipient. This 
amount may include any authorized carryover of unobligated funds from 
prior funding periods when permitted by agency regulations or agency 
implementing instructions.
    (q) Federal share of real property, equipment, or supplies means 
that percentage of the property's acquisition costs and any improvement 
expenditures paid with Federal funds.
    (r) Funding period means the period of time when Federal funding is 
available for obligation by the recipient.
    (s) Intangible property and debt instruments means, but is not 
limited to, trademarks, copyrights, patents and patent applications and 
such property as loans, notes and other debt instruments, lease 
agreements, stock and other instruments of property ownership, whether 
considered tangible or intangible.
    (t) Obligations means the amounts of orders placed, contracts and 
grants awarded, services received and similar transactions during a 
given period that require payment by the recipient during the same or a 
future period.
    (u) Outlays or expenditures means charges made to the project or 
program. They may be reported on a cash or accrual basis. For reports 
prepared on a cash basis, outlays are the sum of cash disbursements for 
direct charges for goods and services, the amount of indirect expense 
charged, the value of third party in-kind contributions applied and the 
amount of cash advances and payments made to subrecipients. For reports 
prepared on an accrual basis, outlays are the sum of cash disbursements 
for direct charges for goods and services, the amount of indirect 
expense incurred, the value of in-kind contributions applied, and the 
net increase (or decrease) in the amounts owed by the recipient for 
goods and other property received, for services performed by employees, 
contractors, subrecipients and other payees and other amounts becoming 
owed under programs for which no current services or performance are 
required.
    (v) Personal property means property of any kind except real 
property. It may be tangible, having physical existence, or intangible, 
having no physical existence, such as copyrights, patents, or 
securities.
    (w) Prior approval means written approval by an authorized official 
evidencing prior consent.
    (x) Program income means gross income earned by the recipient that 
is directly generated by a supported activity or earned as a result of 
the award (see exclusions in Sec. Sec. 19.24 (e) and (h)). Program 
income includes, but is not limited to, income from fees for services 
performed, the use or rental of real or personal property acquired under 
federally-funded projects, the sale of commodities or items fabricated 
under an award, license fees and royalties on patents and copyrights, 
and interest on

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loans made with award funds. Interest earned on advances of Federal 
funds is not program income. Except as otherwise provided in Federal 
awarding agency regulations or the terms and conditions of the award, 
program income does not include the receipt of principal on loans, 
rebates, credits, discounts, etc., or interest earned on any of them.
    (y) Project costs means all allowable costs, as set forth in the 
applicable Federal cost principles, incurred by a recipient and the 
value of the contributions made by third parties in accomplishing the 
objectives of the award during the project period.
    (z) Project period means the period established in the award 
document during which Federal sponsorship begins and ends.
    (aa) Property means, unless otherwise stated, real property, 
equipment, intangible property and debt instruments.
    (bb) Real property means land, including land improvements, 
structures and appurtenances thereto, but excludes movable machinery and 
equipment.
    (cc) Recipient means an organization receiving financial assistance 
directly from Federal awarding agencies to carry out a project or 
program. The term includes public and private institutions of higher 
education, public and private hospitals, and other quasi-public and 
private non-profit organizations such as, but not limited to, community 
action agencies, research institutes, educational associations, and 
health centers. The term may include commercial organizations, foreign 
or international organizations (such as agencies of the United Nations) 
which are recipients, subrecipients, or contractors or subcontractors of 
recipients or subrecipients at the discretion of the Federal awarding 
agency. The term does not include government-owned contractor-operated 
facilities or research centers providing continued support for mission-
oriented, large-scale programs that are government-owned or controlled, 
or are designated as federally-funded research and development centers.
    (dd) Research and development means all research activities, both 
basic and applied, and all development activities that are supported at 
universities, colleges, and other non-profit institutions. ``Research'' 
is defined as a systematic study directed toward fuller scientific 
knowledge or understanding of the subject studied. ``Development'' is 
the systematic use of knowledge and understanding gained from research 
directed toward the production of useful materials, devices, systems, or 
methods, including design and development of prototypes and processes. 
The term research also includes activities involving the training of 
individuals in research techniques where such activities utilize the 
same facilities as other research and development activities and where 
such activities are not included in the instruction function.
    (ee) Small awards means a grant or cooperative agreement not 
exceeding the small purchase threshold fixed at 41 U.S.C. 403(11) 
(currently $25,000).
    (ff) Subaward means an award of financial assistance in the form of 
money, or property in lieu of money, made under an award by a recipient 
to an eligible subrecipient or by a subrecipient to a lower tier 
subrecipient. The term includes financial assistance when provided by 
any legal agreement, even if the agreement is called a contract, but 
does not include procurement of goods and services nor does it include 
any form of assistance which is excluded from the definition of 
``award'' in paragraph (e) of this section.
    (gg) Subrecipient means the legal entity to which a subaward is made 
and which is accountable to the recipient for the use of the funds 
provided. The term may include foreign or international organizations 
(such as agencies of the United Nations) at the discretion of the 
Federal awarding agency.
    (hh) Supplies means all personal property excluding equipment, 
intangible property, and debt instruments as defined in this section, 
and inventions of a contractor conceived or first actually reduced to 
practice in the performance of work under a funding agreement (``subject 
inventions''), as defined in 37 CFR part 401, ``Rights to Inventions 
Made by Nonprofit Organizations and

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Small Business Firms Under Government Grants, Contracts, and Cooperative 
Agreements.''
    (ii) Suspension means an action by a Federal awarding agency that 
temporarily withdraws Federal sponsorship under an award, pending 
corrective action by the recipient or pending a decision to terminate 
the award by the Federal awarding agency. Suspension of an award is a 
separate action from suspension under Federal agency regulations 
implementing E.O.s 12549 and 12689, ``Debarment and Suspension.''
    (jj) Termination means the cancellation of Federal sponsorship, in 
whole or in part, under an agreement at any time prior to the date of 
completion.
    (kk) Third party in-kind contributions means the value of non-cash 
contributions provided by non-Federal third parties. Third party in-kind 
contributions may be in the form of real property, equipment, supplies 
and other expendable property, and the value of goods and services 
directly benefiting and specifically identifiable to the project or 
program.
    (ll) Unliquidated obligations, for financial reports prepared on a 
cash basis, means the amount of obligations incurred by the recipient 
that have not been paid. For reports prepared on an accrued expenditure 
basis, they represent the amount of obligations incurred by the 
recipient for which an outlay has not been recorded.
    (mm) Unobligated balance means the portion of the funds authorized 
by the Federal awarding agency that has not been obligated by the 
recipient and is determined by deducting the cumulative obligations from 
the cumulative funds authorized.
    (nn) Unrecovered indirect cost means the difference between the 
amount awarded and the amount which could have been awarded under the 
recipient's approved negotiated indirect cost rate.
    (oo) Working capital advance means a procedure whereby funds are 
advanced to the recipient to cover its estimated disbursement needs for 
a given initial period.



Sec. 19.3  Effect on other issuances.

    For awards subject to this part, all administrative requirements of 
codified program regulations, program manuals, handbooks and other non-
regulatory materials which are inconsistent with the requirements of 
this part are superseded, except to the extent they are required by 
statute, or authorized in accordance with the deviations provision in 
Sec. 19.4.



Sec. 19.4  Deviations.

    The Office of Management and Budget (OMB) may grant exceptions for 
classes of grants or recipients subject to the requirements of this part 
when exceptions are not prohibited by statute. However, in the interest 
of maximum uniformity, exceptions from the requirements of this part 
shall be permitted only in unusual circumstances. Federal awarding 
agencies may apply more restrictive requirements to a class of 
recipients when approved by OMB. All requests for class deviations shall 
be processed through the Assistant Secretary for Administration. Federal 
awarding agencies may apply less restrictive requirements when awarding 
small awards, except for those requirements which are statutory, subject 
to the concurrence of the Assistant Secretary for Administration. 
Exceptions on a case-by-case basis may also be made by Federal awarding 
agencies, with the concurrence of the Assistant Secretary for 
Administration to ensure conformance with Department of Transportation 
grant administration policies.



Sec. 19.5  Subawards.

    Unless sections of this part specifically exclude subrecipients from 
coverage, the provisions of this part shall be applied to subrecipients 
performing work under awards if such subrecipients are institutions of 
higher education, hospitals or other non-profit organizations. State and 
local government subrecipients are subject to the provisions of 49 CFR 
part 18, ``Uniform Administrative Requirements for Grants and 
Cooperative Agreements to State and Local Governments.''



Sec. 19.6  Availability of material referenced in this part.

    (a) Copies of Federal Transit Administration (FTA) documents 
identified in this part may be obtained by calling

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the FTA Administrative Services Division at (202) 366-4865.
    (b) Copies of Federal Aviation Administration (FAA) documents 
identified in this part may be obtained by calling the FAA Program 
Guidance Branch at (202) 267-3831.



                    Subpart B_Pre-Award Requirements



Sec. 19.10  Purpose.

    Sections 19.11 through 19.17 prescribes forms and instructions and 
other pre-award matters to be used in applying for Federal awards.



Sec. 19.11  Pre-award policies.

    (a) Use of grants and cooperative agreements, and contracts. In each 
instance, the Federal awarding agency shall decide on the appropriate 
award instrument (i.e., grant, cooperative agreement, or contract). The 
Federal Grant and Cooperative Agreement Act (31 U.S.C. 6301-08) governs 
the use of grants, cooperative agreements and contracts. A grant or 
cooperative agreement shall be used only when the principal purpose of a 
transaction is to accomplish a public purpose of support or stimulation 
authorized by Federal statute. The statutory criterion for choosing 
between grants and cooperative agreements is that for the latter, 
``substantial involvement is expected between the executive agency and 
the State, local government, or other recipient when carrying out the 
activity contemplated in the agreement.'' Contracts shall be used when 
the principal purpose is acquisition of property or services for the 
direct benefit or use of the Federal Government.
    (b) Public notice and priority setting. Federal awarding agencies 
shall notify the public of its intended funding priorities for 
discretionary grant programs, unless funding priorities are established 
by Federal statute.



Sec. 19.12  Forms for applying for Federal assistance.

    (a) Federal awarding agencies shall comply with the applicable 
report clearance requirements of 5 CFR part 1320, ``Controlling 
Paperwork Burdens on the Public,'' with regard to all forms used by the 
Federal awarding agency in place of or as a supplement to the Standard 
Form 424 (SF-424) series.
    (b) Applicants shall use the SF-424 series or those forms and 
instructions prescribed by the Federal awarding agency.
    (c) For Federal programs covered by E.O. 12372, ``Intergovernmental 
Review of Federal Programs,'' as implemented at 49 CFR part 17, 
Intergovernmental review of Department of Transportation programs and 
activities, the applicant shall complete the appropriate sections of the 
SF-424 (Application for Federal Assistance) indicating whether the 
application was subject to review by the State Single Point of Contact 
(SPOC). The name and address of the SPOC for a particular State can be 
obtained from the Federal awarding agency or the Catalog of Federal 
Domestic Assistance. The SPOC shall advise the applicant whether the 
program for which application is made has been selected by that State 
for review.
    (d) Federal awarding agencies that do not use the SF-424 form should 
indicate whether the application is subject to review by the State under 
E.O. 12372.



Sec. 19.13  Debarment and suspension.

    Federal awarding agencies and recipients shall comply with the 
nonprocurement debarment and suspension rule, 49 CFR part 29, 
``Governmentwide Debarment and Suspension (Nonprocurement) and 
Governmentwide Requirements for Drug-Free Workplace (Grants),'' 
implementing E.O.s 12549 and 12689, ``Debarment and Suspension.'' This 
rule restricts subawards and contracts with certain parties that are 
debarred, suspended or otherwise excluded from or ineligible for 
participation in Federal assistance programs or activities.



Sec. 19.14  Special award conditions.

    (a) Federal awarding agencies may impose additional requirements as 
needed, if an applicant or recipient:
    (1) Has a history of poor performance,
    (2) Is not financially stable,
    (3) Has a management system that does not meet the standards 
prescribed in this part,
    (4) Has not conformed to the terms and conditions of a previous 
award, or

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    (5) Is not otherwise responsible.
    (b) Additional requirements may only be imposed provided that such 
applicant or recipient is notified in writing as to:
    (1) The nature of the additional requirements,
    (2) The reason why the additional requirements are being imposed,
    (3) The nature of the corrective action needed,
    (4) The time allowed for completing the corrective actions, and
    (5) The method for requesting reconsideration of the additional 
requirements imposed.
    (c) A copy of such notices shall be sent to the Assistant Secretary 
for Administration. Any special conditions shall be promptly removed 
once the conditions that prompted them have been corrected.



Sec. 19.15  Metric system of measurement.

    The Metric Conversion Act, as amended by the Omnibus Trade and 
Competitiveness Act (15 U.S.C. 205), declares that the metric system is 
the preferred measurement system for U.S. trade and commerce. The Act 
requires each Federal agency to establish a date or dates in 
consultation with the Secretary of Commerce, when the metric system of 
measurement will be used in the agency's procurements, grants, and other 
business-related activities. Metric implementation may take longer where 
the use of the system is initially impractical or likely to cause 
significant inefficiencies in the accomplishment of federally-funded 
activities. Federal awarding agencies shall follow the provisions of 
E.O. 12770, ``Metric Usage in Federal Government Programs.''



Sec. 19.16  Resource Conservation and Recovery Act.

    Under the Act, any State agency or agency of a political subdivision 
of a State which is using appropriated Federal funds must comply with 
section 6002. Section 6002 requires that preference be given in 
procurement programs to the purchase of specific products containing 
recycled materials identified in guidelines developed by the 
Environmental Protection Agency (EPA) (40 CFR parts 247-254). 
Accordingly, State and local institutions of higher education, 
hospitals, and non-profit organizations that receive direct Federal 
awards or other Federal funds shall give preference in their procurement 
programs funded with Federal funds to the purchase of recycled products 
pursuant to the EPA guidelines.



Sec. 19.17  Certifications and representations.

    Unless prohibited by statute or codified regulation, each Federal 
awarding agency is authorized and encouraged to allow recipients to 
submit certifications and representations required by statute, executive 
order, or regulation on an annual basis, if the recipients have ongoing 
and continuing relationships with the agency. Annual certifications and 
representations shall be signed by responsible officials with the 
authority to ensure recipients' compliance with the pertinent 
requirements.



                    Subpart C_Post-Award Requirements

                    Financial and Program Management



Sec. 19.20  Purpose of financial and program management.

    Sections 19.21 through 19.28 prescribe standards for financial 
management systems, methods for making payments and rules for: 
satisfying cost sharing and matching requirements, accounting for 
program income, budget revision approvals, making audits, determining 
allowability of cost, and establishing fund availability.



Sec. 19.21  Standards for financial management systems.

    (a) Federal awarding agencies shall require recipients to relate 
financial data to performance data and develop unit cost information 
whenever practical.
    (b) Recipients' financial management systems shall provide for the 
following.
    (1) Accurate, current and complete disclosure of the financial 
results of each federally-sponsored project or program in accordance 
with the reporting requirements set forth in Sec. 19.52. If a Federal 
awarding agency requires reporting on an accrual basis from a recipient 
that maintains its records on

[[Page 155]]

other than an accrual basis, the recipient shall not be required to 
establish an accrual accounting system. These recipients may develop 
such accrual data for its reports on the basis of an analysis of the 
documentation on hand.
    (2) Records that identify adequately the source and application of 
funds for federally-sponsored activities. These records shall contain 
information pertaining to Federal awards, authorizations, obligations, 
unobligated balances, assets, outlays, income and interest.
    (3) Effective control over and accountability for all funds, 
property and other assets. Recipients shall adequately safeguard all 
such assets and assure they are used solely for authorized purposes.
    (4) Comparison of outlays with budget amounts for each award. 
Whenever appropriate, financial information should be related to 
performance and unit cost data.
    (5) Written procedures to minimize the time elapsing between the 
transfer of funds to the recipient from the U.S. Treasury and the 
issuance or redemption of checks, warrants or payments by other means 
for program purposes by the recipient. To the extent that the provisions 
of the Cash Management Improvement Act (CMIA) (Pub. L. 101-453) govern, 
payment methods of State agencies, instrumentalities, and fiscal agents 
shall be consistent with CMIA Treasury-State Agreements or the CMIA 
default procedures codified at 31 CFR part 205, ``Withdrawal of Cash 
from the Treasury for Advances under Federal Grant and Other Programs.''
    (6) Written procedures for determining the reasonableness, 
allocability and allowability of costs in accordance with the provisions 
of the applicable Federal cost principles and the terms and conditions 
of the award.
    (7) Accounting records including cost accounting records that are 
supported by source documentation.
    (c) Where the Federal Government guarantees or insures the repayment 
of money borrowed by the recipient, the Federal awarding agency, at its 
discretion, may require adequate bonding and insurance if the bonding 
and insurance requirements of the recipient are not deemed adequate to 
protect the interest of the Federal Government.
    (d) The Federal awarding agency may require adequate fidelity bond 
coverage where the recipient lacks sufficient coverage to protect the 
Federal Government's interest.
    (e) Where bonds are required in the situations described above, the 
bonds shall be obtained from companies holding certificates of authority 
as acceptable sureties, as prescribed in 31 CFR part 223, ``Surety 
Companies Doing Business with the United States.''



Sec. 19.22  Payment.

    (a) Payment methods shall minimize the time elapsing between the 
transfer of funds from the United States Treasury and the issuance or 
redemption of checks, warrants, or payment by other means by the 
recipients. Payment methods of State agencies or instrumentalities shall 
be consistent with Treasury-State CMIA agreements or default procedures 
codified at 31 CFR part 205.
    (b)(1) Recipients are to be paid in advance, provided they maintain 
or demonstrate the willingness to maintain:
    (i) Written procedures that minimize the time elapsing between the 
transfer of funds and disbursement by the recipient, and
    (ii) Financial management systems that meet the standards for fund 
control and accountability as established in section Sec. 19.21.
    (2) Cash advances to a recipient organization shall be limited to 
the minimum amounts needed and be timed to be in accordance with the 
actual, immediate cash requirements of the recipient organization in 
carrying out the purpose of the approved program or project. The timing 
and amount of cash advances shall be as close as is administratively 
feasible to the actual disbursements by the recipient organization for 
direct program or project costs and the proportionate share of any 
allowable indirect costs.
    (c) Whenever possible, advances shall be consolidated to cover 
anticipated cash needs for all awards made by the Federal awarding 
agency to the recipient.

[[Page 156]]

    (1) Advance payment mechanisms include, but are not limited to, 
Treasury check and electronic funds transfer.
    (2) Advance payment mechanisms are subject to 31 CFR part 205.
    (3) Recipients shall be authorized to submit requests for advances 
and reimbursements at least monthly when electronic fund transfers are 
not used.
    (d) Requests for Treasury check advance payment shall be submitted 
on SF-270, ``Request for Advance or Reimbursement,'' or other forms as 
may be authorized by OMB. This form is not to be used when Treasury 
check advance payments are made to the recipient automatically through 
the use of a predetermined payment schedule or if precluded by special 
Federal awarding agency instructions for electronic funds transfer.
    (e) Reimbursement is the preferred method when the requirements in 
paragraph (b) cannot be met. Federal awarding agencies may also use this 
method on any construction agreement, or if the major portion of the 
construction project is accomplished through private market financing or 
Federal loans, and the Federal assistance constitutes a minor portion of 
the project.
    (1) When the reimbursement method is used, the Federal awarding 
agency shall make payment within 30 days after receipt of the billing, 
unless the billing is improper.
    (2) Recipients shall be authorized to submit request for 
reimbursement at least monthly when electronic funds transfers are not 
used.
    (f) If a recipient cannot meet the criteria for advance payments and 
the Federal awarding agency has determined that reimbursement is not 
feasible because the recipient lacks sufficient working capital, the 
Federal awarding agency may provide cash on a working capital advance 
basis. Under this procedure, the Federal awarding agency shall advance 
cash to the recipient to cover its estimated disbursement needs for an 
initial period generally geared to the awardee's disbursing cycle. 
Thereafter, the Federal awarding agency shall reimburse the recipient 
for its actual cash disbursements. The working capital advance method of 
payment shall not be used for recipients unwilling or unable to provide 
timely advances to their subrecipient to meet the subrecipient's actual 
cash disbursements.
    (g) To the extent available, recipients shall disburse funds 
available from repayments to and interest earned on a revolving fund, 
program income, rebates, refunds, contract settlements, audit recoveries 
and interest earned on such funds before requesting additional cash 
payments.
    (h) Unless otherwise required by statute, Federal awarding agencies 
shall not withhold payments for proper charges made by recipients at any 
time during the project period unless the conditions in paragraphs 
(h)(1) or (2) of this section apply.
    (1) A recipient has failed to comply with the project objectives, 
the terms and conditions of the award, or Federal reporting 
requirements.
    (2) The recipient or subrecipient is delinquent in a debt to the 
United States as defined in OMB Circular A-129, ``Managing Federal 
Credit Programs.'' Under such conditions, the Federal awarding agency 
may, upon reasonable notice, inform the recipient that payments shall 
not be made for obligations incurred after a specified date until the 
conditions are corrected or the indebtedness to the Federal Government 
is liquidated.
    (i) Standards governing the use of banks and other institutions as 
depositories of funds advanced under awards are as follows.
    (1) Except for situations described in paragraph (i)(2) of this 
section, Federal awarding agencies shall not require separate depository 
accounts for funds provided to a recipient or establish any eligibility 
requirements for depositories for funds provided to a recipient. 
However, recipients must be able to account for the receipt, obligation 
and expenditure of funds.
    (2) Advances of Federal funds shall be deposited and maintained in 
insured accounts whenever possible.
    (j) Consistent with the national goal of expanding the opportunities 
for women-owned and minority-owned business enterprises, recipients 
shall be encouraged to use women-owned and minority-owned banks (a bank 
which is

[[Page 157]]

owned at least 50 percent by women or minority group members).
    (k) Recipients shall maintain advances of Federal funds in interest 
bearing accounts, unless the conditions in paragraphs (k)(1), (2) or (3) 
of this section apply.
    (1) The recipient receives less than $120,000 in Federal awards per 
year.
    (2) The best reasonably available interest bearing account would not 
be expected to earn interest in excess of $250 per year on Federal cash 
balances.
    (3) The depository would require an average or minimum balance so 
high that it would not be feasible within the expected Federal and non-
Federal cash resources.
    (l) For those entities where CMIA and its implementing regulations 
do not apply, interest earned on Federal advances deposited in interest 
bearing accounts shall be remitted annually to Department of Health and 
Human Services, Payment Management System, P.O. Box 6021, Rockville, MD 
20852. Interest amounts up to $250 per year may be retained by the 
recipient for administrative expense. In keeping with Electric Funds 
Transfer rules, (31 CFR part 206), interest should be remitted to the 
HHS Payment Management System through an electric medium such as the 
FEDWIRE Deposit system. Recipients which do not have this capability 
should use a check. State universities and hospitals shall comply with 
CMIA, as it pertains to interest. If an entity subject to CMIA uses its 
own funds to pay pre-award costs for discretionary awards without prior 
written approval from the Federal awarding agency, it waives its right 
to recover the interest under CMIA.
    (m) Except as noted elsewhere in this part, only the following forms 
shall be authorized for the recipients in requesting advances and 
reimbursements. Federal agencies shall not require more than an original 
and two copies of these forms.
    (1) SF-270, Request for Advance or Reimbursement. Each Federal 
awarding agency shall adopt the SF-270 as a standard form for all 
nonconstruction programs when electronic funds transfer or predetermined 
advance methods are not used. Federal awarding agencies, however, have 
the option of using this form for construction programs in lieu of the 
SF-271, ``Outlay Report and Request for Reimbursement for Construction 
Programs.''
    (2) SF-271, Outlay Report and Request for Reimbursement for 
Construction Programs. Each Federal awarding agency shall adopt the SF-
271 as the standard form to be used for requesting reimbursement for 
construction programs. However, a Federal awarding agency may substitute 
the SF-270 when the Federal awarding agency determines that it provides 
adequate information to meet Federal needs.



Sec. 19.23  Cost sharing or matching.

    (a) All contributions, including cash and third party in-kind, shall 
be accepted as part of the recipient's cost sharing or matching when 
such contributions meet all of the following criteria.
    (1) Are verifiable from the recipient's records.
    (2) Are not included as contributions for any other federally-
assisted project or program.
    (3) Are necessary and reasonable for proper and efficient 
accomplishment of project or program objectives.
    (4) Are allowable under the applicable cost principles.
    (5) Are not paid by the Federal Government under another award, 
except where authorized by Federal statute to be used for cost sharing 
or matching.
    (6) Are provided for in the approved budget when required by the 
Federal awarding agency.
    (7) Conform to other provisions of this part, as applicable.
    (b) Unrecovered indirect costs may be included as part of cost 
sharing or matching only with the prior approval of the Federal awarding 
agency.
    (c) Values for recipient contributions of services and property 
shall be established in accordance with the applicable cost principles. 
If a Federal awarding agency authorizes recipients to donate buildings 
or land for construction/facilities acquisition projects or long-term 
use, the value of the donated property for cost sharing or matching 
shall be the lesser of (1) or (2).
    (1) The certified value of the remaining life of the property 
recorded in the

[[Page 158]]

recipient's accounting records at the time of donation.
    (2) The current fair market value. However, when there is sufficient 
justification, the Federal awarding agency may approve the use of the 
current fair market value of the donated property, even if it exceeds 
the certified value at the time of donation to the project.
    (d) Volunteer services furnished by professional and technical 
personnel, consultants, and other skilled and unskilled labor may be 
counted as cost sharing or matching if the service is an integral and 
necessary part of an approved project or program. Rates for volunteer 
services shall be consistent with those paid for similar work in the 
recipient's organization. In those instances in which the required 
skills are not found in the recipient organization, rates shall be 
consistent with those paid for similar work in the labor market in which 
the recipient competes for the kind of services involved. In either 
case, paid fringe benefits that are reasonable, allowable, and allocable 
may be included in the valuation.
    (e) When an employer other than the recipient furnishes the services 
of an employee, these services shall be valued at the employee's regular 
rate of pay (plus an amount of fringe benefits that are reasonable, 
allowable, and allocable, but exclusive of overhead costs), provided 
these services are in the same skill for which the employee is normally 
paid.
    (f) Donated supplies may include such items as expendable equipment, 
office supplies, laboratory supplies or workshop and classroom supplies. 
Value assessed to donated supplies included in the cost sharing or 
matching share shall be reasonable and shall not exceed the fair market 
value of the property at the time of the donation.
    (g) The method used for determining cost sharing or matching for 
donated equipment, buildings and land for which title passes to the 
recipient may differ according to the purpose of the award, if the 
conditions in paragraph (g)(1) or (2) of this section apply.
    (1) If the purpose of the award is to assist the recipient in the 
acquisition of equipment, buildings or land, the total value of the 
donated property may be claimed as cost sharing or matching.
    (2) If the purpose of the award is to support activities that 
require the use of equipment, buildings or land, normally only 
depreciation or use charges for equipment and buildings may be made. 
However, the full value of equipment or other capital assets and fair 
rental charges for land may be allowed, provided that the Federal 
awarding agency has approved the charges.
    (h) The value of donated property shall be determined in accordance 
with the usual accounting policies of the recipient, with the following 
qualifications.
    (1) The value of donated land and buildings shall not exceed its 
fair market value at the time of donation to the recipient as 
established by an independent appraiser (e.g., certified real property 
appraiser or General Services Administration representative) and 
certified by a responsible official of the recipient.
    (2) The value of donated equipment shall not exceed the fair market 
value of equipment of the same age and condition at the time of 
donation.
    (3) The value of donated space shall not exceed the fair rental 
value of comparable space as established by an independent appraisal of 
comparable space and facilities in a privately-owned building in the 
same locality.
    (4) The value of loaned equipment shall not exceed its fair rental 
value.
    (5) The following requirements pertain to the recipient's supporting 
records for in-kind contributions from third parties.
    (i) Volunteer services shall be documented and, to the extent 
feasible, supported by the same methods used by the recipient for its 
own employees.
    (ii) The basis for determining the valuation for personal service, 
material, equipment, buildings and land shall be documented.
    (iii) Section 18(e) of the Federal Transit Act, as amended, (49 
U.S.C. app. 1614(e)) provides that the Federal share for operating 
assistance shall not exceed 50 percent of the net cost. At least 50 
percent of the remainder (the local share) must be derived from sources 
other than Federal funds or revenues of the system; and up to half

[[Page 159]]

of the local share may be derived from other Federal funds. For purposes 
of determining local share for section 18 operating assistance, the term 
``Federal funds or revenues'' does not include funds received pursuant 
to a service agreement with a State or local service agency or a private 
social service organization. Nonregulatory guidance is contained in FTA 
Circular 9040.1B, section 18 Program Guidance and Grant Application 
Instructions, Chapter III, section 7.



Sec. 19.24  Program income.

    (a) Federal awarding agencies shall apply the standards set forth in 
this section in requiring recipient organizations to account for program 
income related to projects financed in whole or in part with Federal 
funds.
    (b) Except as provided in paragraph (h) of this section, program 
income earned during the project period shall be retained by the 
recipient and, in accordance with Federal awarding agency regulations or 
the terms and conditions of the award, shall be used in one or more of 
the ways listed in the following.
    (1) Added to funds committed to the project by the Federal awarding 
agency and recipient and used to further eligible project or program 
objectives.
    (2) Used to finance the non-Federal share of the project or program.
    (3) Deducted from the total project or program allowable cost in 
determining the net allowable costs on which the Federal share of costs 
is based.
    (c) When an agency authorizes the disposition of program income as 
described in paragraph (b)(1) or (b)(2) of this section, program income 
in excess of any limits stipulated shall be used in accordance with 
paragraph (b)(3) of this section.
    (d) In the event that the Federal awarding agency does not specify 
in its regulations or the terms and conditions of the award how program 
income is to be used, paragraph (b)(3) of this section shall apply 
automatically to all projects or programs except research. For awards 
that support research, paragraph (b)(1) of this section shall apply 
automatically unless the awarding agency indicates in the terms and 
conditions another alternative on the award or the recipient is subject 
to special award conditions, as indicated in Sec. 19.14.
    (e) Unless Federal awarding agency regulations or the terms and 
conditions of the award provide otherwise, recipients shall have no 
obligation to the Federal Government regarding program income earned 
after the end of the project period.
    (f) If authorized by Federal awarding agency regulations or the 
terms and conditions of the award, costs incident to the generation of 
program income may be deducted from gross income to determine program 
income, provided these costs have not been charged to the award.
    (g) Proceeds from the sale of property shall be handled in 
accordance with the requirements of the Property Standards (See 
Sec. Sec. 19.30 through 19.37).
    (h) Unless Federal awarding agency regulations or the terms and 
condition of the award provide otherwise, recipients shall have no 
obligation to the Federal Government with respect to program income 
earned from license fees and royalties for copyrighted material, 
patents, patent applications, trademarks, and inventions produced under 
an award. However, Patent and Trademark Amendments (35 U.S.C. 18) apply 
to inventions made under an experimental, developmental, or research 
award.
    (i) Section 4(a) of the Federal Transit Act, as amended, (49 U.S.C. 
app. 1603(a)) allows FTA recipients to retain program income for 
allowable capital or operating expenses, but program income may not be 
used to refund or reduce the local share of a grant. The section 16 and 
18 programs, however, operate differently. Under the special authority 
to set appropriate terms and conditions for the section 16(b)(2) 
program, program income in the form of contract service revenue may be 
used as local share without a proportionate reduction in the Federal 
share. Similarly, section 18 allows the use of program income in the 
form of contract service revenue as local share without requiring a 
proportionate reduction in the Federal share. Grantees must account for 
program income in their accounting systems, which are subject to audit. 
The accounting system must be

[[Page 160]]

capable of identifying program income and the purpose for which it was 
used. Nonregulatory guidance is contained in FTA notice N 5.5005.1, 
Guidance on Program Income and Sales Proceeds.



Sec. 19.25  Revision of budget and program plans.

    (a) The budget plan is the financial expression of the project or 
program as approved during the award process. It may include either the 
Federal and non-Federal share, or only the Federal share, depending upon 
Federal awarding agency requirements. It shall be related to performance 
for program evaluation purposes whenever appropriate.
    (b) Recipients are required to report deviations from budget and 
program plans, and request prior approvals for budget and program plan 
revisions, in accordance with this section.
    (c) For nonconstruction awards, recipients shall request prior 
approvals from Federal awarding agencies for one or more of the 
following program or budget related reasons.
    (1) Change in the scope or the objective of the project or program 
(even if there is no associated budget revision requiring prior written 
approval).
    (2) Change in a key person specified in the application or award 
document.
    (3) The absence for more than three months, or a 25 percent 
reduction in time devoted to the project, by the approved project 
director or principal investigator.
    (4) The need for additional Federal funding.
    (5) The transfer of amounts budgeted for indirect costs to absorb 
increases in direct costs, or vice versa, if approval is required by the 
Federal awarding agency.
    (6) The inclusion, unless waived by the Federal awarding agency, of 
costs that require prior approval in accordance with OMB Circular A-21, 
``Cost Principles for Institutions of Higher Education,'' OMB Circular 
A-122, ``Cost Principles for Non-Profit Organizations,'' or 45 CFR part 
74 Appendix E, ``Principles for Determining Costs Applicable to Research 
and Development under Grants and Contracts with Hospitals,'' or 48 CFR 
part 31, ``Contract Cost Principles and Procedures,'' as applicable.
    (7) The transfer of funds allotted for training allowances (direct 
payment to trainees) to other categories of expense.
    (8) Unless described in the application and funded in the approved 
awards, the subaward, transfer or contracting out of any work under an 
award. This provision does not apply to the purchase of supplies, 
material, equipment or general support services.
    (d) No other prior approval requirements for specific items may be 
imposed unless a deviation has been approved by OMB.
    (e) Except for requirements listed in paragraphs (c)(1) and (c)(4) 
of this section, Federal awarding agencies are authorized, at their 
option, to waive cost-related and administrative prior written approvals 
required by this part and OMB Circulars A-21 and A-122. Such waivers may 
include authorizing recipients to do any one or more of the following:
    (1) Incur pre-award costs 90 calendar days prior to award or more 
than 90 calendar days with the prior approval of the Federal awarding 
agency. All pre-award costs are incurred at the recipient's risk (i.e., 
the Federal awarding agency is under no obligation to reimburse such 
costs if for any reason the recipient does not receive an award or if 
the award is less than anticipated and inadequate to cover such costs).
    (2) Initiate a one-time extension of the expiration date of the 
award of up to 12 months unless one or more of the following conditions 
apply. For one-time extensions, the recipient must notify the Federal 
awarding agency in writing with the supporting reasons and revised 
expiration date at least 10 days before the expiration date specified in 
the award. This one-time extension may not be exercised merely for the 
purpose of using unobligated balances.
    (i) The terms and conditions of award prohibit the extension.
    (ii) The extension requires additional Federal funds.
    (iii) The extension involves any change in the approved objectives 
or scope of the project.
    (3) Carry forward unobligated balances to subsequent funding 
periods.

[[Page 161]]

    (4) For awards that support research, unless the Federal awarding 
agency provides otherwise in the award or in the agency's regulations, 
the prior approval requirements described in paragraph (e) of this 
section are automatically waived (i.e., recipients need not obtain such 
prior approvals) unless one of the conditions included in paragraph 
(e)(2) of this section applies.
    (f) The Federal awarding agency may, at its option, restrict the 
transfer of funds among direct cost categories or programs, functions 
and activities for awards in which the Federal share of the project 
exceeds $100,000 and the cumulative amount of such transfers exceeds or 
is expected to exceed 10 percent of the total budget as last approved by 
the Federal awarding agency. No Federal awarding agency shall permit a 
transfer that would cause any Federal appropriation or part thereof to 
be used for purposes other than those consistent with the original 
intent of the appropriation.
    (g) All other changes to nonconstruction budgets, except for the 
changes described in paragraph (j) of this section, do not require prior 
approval.
    (h) For construction awards, recipients shall request prior written 
approval promptly from Federal awarding agencies for budget revisions 
whenever the conditions in paragraphs (h) (1), (2) or (3) of this 
section apply.
    (1) The revision results from changes in the scope or the objective 
of the project or program.
    (2) The need arises for additional Federal funds to complete the 
project.
    (3) A revision is desired which involves specific costs for which 
prior written approval requirements may be imposed consistent with 
applicable OMB cost principles listed in Sec. 19.27.
    (i) No other prior approval requirements for specific items may be 
imposed unless a deviation has been approved by OMB.
    (j) When a Federal awarding agency makes an award that provides 
support for both construction and nonconstruction work, the Federal 
awarding agency may require the recipient to request prior approval from 
the Federal awarding agency before making any fund or budget transfers 
between the two types of work supported.
    (k) For both construction and nonconstruction awards, Federal 
awarding agencies shall require recipients to notify the Federal 
awarding agency in writing promptly whenever the amount of Federal 
authorized funds is expected to exceed the needs of the recipient for 
the project period by more than $5,000 or five percent of the Federal 
award, whichever is greater. This notification shall not be required if 
an application for additional funding is submitted for a continuation 
award.
    (l) When requesting approval for budget revisions, recipients shall 
use the budget forms that were used in the application unless the 
Federal awarding agency indicates a letter of request suffices.
    (m) Within 30 calendar days from the date of receipt of the request 
for budget revisions, Federal awarding agencies shall review the request 
and notify the recipient whether the budget revisions have been 
approved. If the revision is still under consideration at the end of 30 
calendar days, the Federal awarding agency shall inform the recipient in 
writing of the date when the recipient may expect the decision.



Sec. 19.26  Non-Federal audits.

    (a) Recipients and subrecipients that are institutions of higher 
education or other non-profit organizations (including hospitals) shall 
be subject to the audit requirements contained in the Single Audit Act 
Amendments of 1996 (31 U.S.C. 7501-7507) and revised OMB Circular A-133, 
``Audits of States, Local Governments, and Non-Profit Organizations.''
    (b) State and local governments shall be subject to the audit 
requirements contained in the Single Audit Act Amendments of 1996 (31 
U.S.C. 7501-7507) and revised OMB Circular A-133, ``Audits of States, 
Local Governments, and Non-Profit Organizations.''
    (c) For-profit hospitals not covered by the audit provisions of 
revised OMB Circular A-133 shall be subject to the audit requirements of 
the Federal awarding agencies.
    (d) Commercial organizations shall be subject to the audit 
requirements of the Federal awarding agency or the

[[Page 162]]

prime recipient as incorporated into the award document.

[59 FR 15639, Apr. 4, 1994, as amended at 62 FR 45939, 45947, Aug. 29, 
1997]



Sec. 19.27  Allowable costs.

    (a) Limitation on use of funds. Grant funds may be used only for:
    (1) The allowable costs of the grantees, subgrantees and cost-type 
contractors, including allowable costs in the form of payments to fixed-
price contractors; and
    (2) Reasonable fees or profit to cost-type contractors but not any 
fee or profit (or other increment above allowable costs) to the grantee 
or subgrantee.
    (b) Applicable cost principles. For each kind of recipient, there is 
a set of Federal principles for determining allowable costs. 
Allowability of costs shall be determined according to the cost 
principles applicable to the entity organization incurring the costs. 
The following chart lists the kinds of organization and the applicable 
cost principles:

------------------------------------------------------------------------
           For the costs of a                Use the principles in--
------------------------------------------------------------------------
State, local or federal-recognized       2 CFR part 225.
 Indian tribal government.
Private nonprofit organization other     2 CFR part 230.
 than an (1) Institution of higher
 education, (2) hospital, or (3)
 organization named in 2 CFR part 230,
 Appendix C, as not subject to that
 circular.
Institutions of Higher Education.......  2 CFR part 220.
Hospitals..............................  45 CFR part 74, Appendix E,
                                          ``Principles for Determining
                                          Costs Applicable to Research
                                          and Development under Grants
                                          and Contracts with
                                          Hospitals.''
For-profit organizations other than a    48 CFR part 31. Contract Cost
 hospital, commercial organization or a   Principles and Procedures, or
 non-profit organization listed in 2      uniform cost accounting
 CFR part 230, Appendix C, as not         standards that comply with
 subject to that part.                    cost principles acceptable to
                                          the Federal agency.
------------------------------------------------------------------------


[76 FR 61598, Oct. 5, 2011]



Sec. 19.28  Period of availability of funds.

    Where a funding period is specified, a recipient may charge to the 
grant only allowable costs resulting from obligations incurred during 
the funding period and any pre-award costs authorized by the Federal 
awarding agency.

                           Property Standards



Sec. 19.30  Purpose of property standards.

    (a) Sections 19.31 through 19.37 set forth uniform standards 
governing management and disposition of property furnished by the 
Federal Government whose cost was charged to a project supported by a 
Federal award. Federal awarding agencies shall require recipients to 
observe these standards under awards and shall not impose additional 
requirements, unless specifically required by Federal statute. The 
recipient may use its own property management standards and procedures 
provided it observes the provisions of Sec. Sec. 19.31 through 19.37.
    (b) Transfer of capital assets. Section 12(k) of the Federal Transit 
Act, as amended, (49 U.S.C. app. 1608(k)) allows the transfer without 
compensation of real property (including land) and equipment acquired 
under the Act for another public purpose under certain conditions. 
Procedures to allow these transfers have not been issued.



Sec. 19.31  Insurance coverage.

    Recipients shall, at a minimum, provide the equivalent insurance 
coverage for real property and equipment acquired with Federal funds as 
provided to property owned by the recipient. Federally-owned property 
need not be insured unless required by the terms and conditions of the 
award.



Sec. 19.32  Real property.

    Each Federal awarding agency shall prescribe requirements for 
recipients concerning the use and disposition of real property acquired 
in whole or in part under awards. Unless otherwise provided by statute, 
such requirements, at a minimum, shall contain the following.
    (a) Title to real property shall vest in the recipient subject to 
the condition that the recipient shall use the real property for the 
authorized purpose of

[[Page 163]]

the project as long as it is needed and shall not encumber the property 
without approval of the Federal awarding agency.
    (b) The recipient shall obtain written approval by the Federal 
awarding agency for the use of real property in other federally-
sponsored projects when the recipient determines that the property is no 
longer needed for the purpose of the original project. Use in other 
projects shall be limited to those under federally-sponsored projects 
(i.e., awards) or programs that have purposes consistent with those 
authorized for support by the Department of Transportation.
    (c) When the real property is no longer needed as provided in 
paragraphs (a) and (b) of this section, the recipient shall request 
disposition instructions from the Federal awarding agency or its 
successor Federal awarding agency. The Federal awarding agency shall 
observe one or more of the following disposition instructions.
    (1) The recipient may be permitted to retain title without further 
obligation to the Federal Government after it compensates the Federal 
Government for that percentage of the current fair market value of the 
property attributable to the Federal participation in the project.
    (2) The recipient may be directed to sell the property under 
guidelines provided by the Federal awarding agency and pay the Federal 
Government for that percentage of the current fair market value of the 
property attributable to the Federal participation in the project (after 
deducting actual and reasonable selling and fix-up expenses, if any, 
from the sales proceeds). When the recipient is authorized or required 
to sell the property, proper sales procedures shall be established that 
provide for competition to the extent practicable and result in the 
highest possible return.
    (3) The recipient may be directed to transfer title to the property 
to the Federal Government or to an eligible third party provided that, 
in such cases, the recipient shall be entitled to compensation for its 
attributable percentage of the current fair market value of the 
property.



Sec. 19.33  Federally-owned and exempt property.

    (a) Federally-owned property. (1) Title to federally-owned property 
remains vested in the Federal Government. Recipients shall submit 
annually an inventory listing of federally-owned property in their 
custody to the Federal awarding agency. Upon completion of the award or 
when the property is no longer needed, the recipient shall report the 
property to the Federal awarding agency for further Federal agency 
utilization.
    (2) If the Federal awarding agency has no further need for the 
property, it shall be declared excess and reported to the General 
Services Administration, unless the Federal awarding agency has 
statutory authority to dispose of the property by alternative methods 
(e.g., the authority provided by the Federal Technology Transfer Act (15 
U.S.C. 3710(I)) to donate research equipment to educational and non-
profit organizations in accordance with E.O. 12821, ``Improving 
Mathematics and Science Education in Support of the National Education 
Goals.'') Appropriate instructions shall be issued to the recipient by 
the Federal awarding agency.
    (b) Exempt property. When statutory authority exists, the Federal 
awarding agency has the option to vest title to property acquired with 
Federal funds in the recipient without further obligation to the Federal 
Government and under conditions the Federal awarding agency considers 
appropriate. Such property is ``exempt property.'' Should a Federal 
awarding agency not establish conditions, title to exempt property upon 
acquisition shall vest in the recipient without further obligation to 
the Federal Government.



Sec. 19.34  Equipment.

    (a) Title to equipment acquired by a recipient with Federal funds 
shall vest in the recipient, subject to conditions of this section.
    (b) The recipient shall not use equipment acquired with Federal 
funds to provide services to non-Federal outside organizations for a fee 
that is less than private companies charge for equivalent services, 
unless specifically authorized by Federal statute, for as long

[[Page 164]]

as the Federal Government retains an interest in the equipment.
    (c) The recipient shall use the equipment in the project or program 
for which it was acquired as long as needed, whether or not the project 
or program continues to be supported by Federal funds and shall not 
encumber the property without approval of the Federal awarding agency. 
When no longer needed for the original project or program, the recipient 
shall use the equipment in connection with its other federally-sponsored 
activities, in the following order of priority:
    (1) Activities sponsored by the Federal awarding agency which funded 
the original project, then
    (2) Activities sponsored by other Federal awarding agencies.
    (d) During the time that equipment is used on the project or program 
for which it was acquired, the recipient shall make it available for use 
on other projects or programs if such other use will not interfere with 
the work on the project or program for which the equipment was 
originally acquired. First preference for such other use shall be given 
to other projects or programs sponsored by the Federal awarding agency 
that financed the equipment; second preference shall be given to 
projects or programs sponsored by other Federal awarding agencies. If 
the equipment is owned by the Federal Government, use on other 
activities not sponsored by the Federal Government shall be permissible 
if authorized by the Federal awarding agency. User charges shall be 
treated as program income.
    (e) When acquiring replacement equipment, the recipient may use the 
equipment to be replaced as trade-in or sell the equipment and use the 
proceeds to offset the costs of the replacement equipment subject to the 
approval of the Federal awarding agency.
    (f) The recipient's property management standards for equipment 
acquired with Federal funds and federally-owned equipment shall include 
all of the following.
    (1) Equipment records shall be maintained accurately and shall 
include the following information.
    (i) A description of the equipment.
    (ii) Manufacturer's serial number, model number, Federal stock 
number, national stock number, or other identification number.
    (iii) Source of the equipment, including the award number.
    (iv) Whether title vests in the recipient or the Federal Government.
    (v) Acquisition date (or date received, if the equipment was 
furnished by the Federal Government) and cost.
    (vi) Information from which one can calculate the percentage of 
Federal participation in the cost of the equipment (not applicable to 
equipment furnished by the Federal Government).
    (vii) Location and condition of the equipment and the date the 
information was reported.
    (viii) Unit acquisition cost.
    (ix) Ultimate disposition data, including date of disposal and sales 
price or the method used to determine current fair market value where a 
recipient compensates the Federal awarding agency for its share.
    (2) Equipment owned by the Federal Government shall be identified to 
indicate Federal ownership.
    (3) A physical inventory of equipment shall be taken and the results 
reconciled with the equipment records at least once every two years. Any 
differences between quantities determined by the physical inspection and 
those shown in the accounting records shall be investigated to determine 
the causes of the difference. The recipient shall, in connection with 
the inventory, verify the existence, current utilization, and continued 
need for the equipment.
    (4) A control system shall be in effect to insure adequate 
safeguards to prevent loss, damage, or theft of the equipment. Any loss, 
damage, or theft of equipment shall be investigated and fully 
documented; if the equipment was owned by the Federal Government, the 
recipient shall promptly notify the Federal awarding agency.
    (5) Adequate maintenance procedures shall be implemented to keep the 
equipment in good condition.
    (6) Where the recipient is authorized or required to sell the 
equipment, proper sales procedures shall be established which provide 
for competition to the

[[Page 165]]

extent practicable and result in the highest possible return.
    (g) When the recipient no longer needs the equipment, the equipment 
may be used for other activities in accordance with the following 
standards. For equipment with a current per unit fair market value of 
$5,000 or more, the recipient may retain the equipment for other uses 
provided that compensation is made to the original Federal awarding 
agency or its successor. The amount of compensation shall be computed by 
applying the percentage of Federal participation in the cost of the 
original project or program to the current fair market value of the 
equipment. If the recipient has no need for the equipment, the recipient 
shall request disposition instructions from the Federal awarding agency. 
The Federal awarding agency shall determine whether the equipment can be 
used to meet the agency's requirements. If no requirement exists within 
that agency, the availability of the equipment shall be reported to the 
General Services Administration by the Federal awarding agency to 
determine whether a requirement for the equipment exists in other 
Federal agencies. The Federal awarding agency shall issue instructions 
to the recipient no later than 120 calendar days after the recipient's 
request and the following procedures shall govern.
    (1) If so instructed or if disposition instructions are not issued 
within 120 calendar days after the recipient's request, the recipient 
shall sell the equipment and reimburse the Federal awarding agency an 
amount computed by applying to the sales proceeds the percentage of 
Federal participation in the cost of the original project or program. 
However, the recipient shall be permitted to deduct and retain from the 
Federal share $500 or ten percent of the proceeds, whichever is less, 
for the recipient's selling and handling expenses.
    (2) If the recipient is instructed to ship the equipment elsewhere, 
the recipient shall be reimbursed by the Federal Government by an amount 
which is computed by applying the percentage of the recipient's 
participation in the cost of the original project or program to the 
current fair market value of the equipment, plus any reasonable shipping 
or interim storage costs incurred.
    (3) If the recipient is instructed to otherwise dispose of the 
equipment, the recipient shall be reimbursed by the Federal awarding 
agency for such costs incurred in its disposition.
    (4) The Federal awarding agency may reserve the right to transfer 
the title to the Federal Government or to a third party named by the 
Federal Government when such third party is otherwise eligible under 
existing statutes. Such transfer shall be subject to the following 
standards.
    (i) The equipment shall be appropriately identified in the award or 
otherwise made known to the recipient in writing.
    (ii) The Federal awarding agency shall issue disposition 
instructions within 120 calendar days after receipt of a final 
inventory. The final inventory shall list all equipment acquired with 
grant funds and federally-owned equipment. If the Federal awarding 
agency fails to issue disposition instructions within the 120 calendar 
day period, the recipient shall apply the standards of this section, as 
appropriate.
    (iii) When the Federal awarding agency exercises its right to take 
title, the equipment shall be subject to the provisions for federally-
owned equipment.



Sec. 19.35  Supplies and other expendable property.

    (a) Title to supplies and other expendable property shall vest in 
the recipient upon acquisition. If there is a residual inventory of 
unused supplies exceeding $5000 in total aggregate value upon 
termination or completion of the project or program and the supplies are 
not needed for any other federally-sponsored project or program, the 
recipient shall retain the supplies for use on non-Federal sponsored 
activities or sell them, but shall, in either case, compensate the 
Federal Government for its share. The amount of compensation shall be 
computed in the same manner as for equipment.
    (b) The recipient shall not use supplies acquired with Federal funds 
to provide services to non-Federal outside organizations for a fee that 
is less than

[[Page 166]]

private companies charge for equivalent services, unless specifically 
authorized by Federal statute as long as the Federal Government retains 
an interest in the supplies.



Sec. 19.36  Intangible property.

    (a) The recipient may copyright any work that is subject to 
copyright and was developed, or for which ownership was purchased, under 
an award. The Federal awarding agency(ies) reserve a royalty-free, 
nonexclusive and irrevocable right to reproduce, publish, or otherwise 
use the work for Federal purposes, and to authorize others to do so.
    (b) Recipients are subject to applicable regulations governing 
patents and inventions, including government-wide regulations issued by 
the Department of Commerce at 37 CFR part 401, ``Rights to Inventions 
Made by Nonprofit Organizations and Small Business Firms Under 
Government Grants, Contracts and Cooperative Agreements.''
    (c) The Federal Government has the right to:
    (1) Obtain, reproduce, publish or otherwise use the data first 
produced under an award; and
    (2) Authorize others to receive, reproduce, publish, or otherwise 
use such data for Federal purposes.
    (d)(1) In addition, in response to a Freedom of Information Act 
(FOIA) request for research data relating to published research findings 
produced under an award that were used by the Federal Government in 
developing an agency action that has the force and effect of law, the 
Federal awarding agency shall request, and the recipient shall provide, 
within a reasonable time, the research data so that they can be made 
available to the public through the procedures established under the 
FOIA. If the Federal awarding agency obtains the research data solely in 
response to a FOIA request, the agency may charge the requester a 
reasonable fee equaling the full incremental cost of obtaining the 
research data. This fee should reflect costs incurred by the agency, the 
recipient, and applicable subrecipients. This fee is in addition to any 
fees the agency may assess under the FOIA (5 U.S.C. 552(a)(4)(A)).
    (2) The following definitions apply for purposes of this paragraph 
(d):
    (i) Research data is defined as the recorded factual material 
commonly accepted in the scientific community as necessary to validate 
research findings, but not any of the following: preliminary analyses, 
drafts of scientific papers, plans for future research, peer reviews, or 
communications with colleagues. This ``recorded'' material excludes 
physical objects (e.g., laboratory samples). Research data also do not 
include:
    (A) Trade secrets, commercial information, materials necessary to be 
held confidential by a researcher until they are published, or similar 
information which is protected under law; and
    (B) Personnel and medical information and similar information the 
disclosure of which would constitute a clearly unwarranted invasion of 
personal privacy, such as information that could be used to identify a 
particular person in a research study.
    (ii) Published is defined as either when:
    (A) Research findings are published in a peer-reviewed scientific or 
technical journal; or
    (B) A Federal agency publicly and officially cites the research 
findings in support of an agency action that has the force and effect of 
law.
    (iii) Used by the Federal Government in developing an agency action 
that has the force and effect of law is defined as when an agency 
publicly and officially cites the research findings in support of an 
agency action that has the force and effect of law.
    (e) Title to intangible property and debt instruments acquired under 
an award or subaward vests upon acquisition in the recipient. The 
recipient shall use that property for the originally-authorized purpose, 
and the recipient shall not encumber the property without approval of 
the Federal awarding agency. When no longer needed for the originally 
authorized purpose, disposition of the intangible property shall occur 
in accordance with the provisions of paragraph Sec. 19.34(g).

[59 FR 15639, Apr. 4, 1994, as amended at 65 FR 14407, 14419, Mar. 16, 
2000]

[[Page 167]]



Sec. 19.37  Property trust relationship.

    Real property, equipment, intangible property and debt instruments 
that are acquired or improved with Federal funds shall be held in trust 
by the recipient as trustee for the beneficiaries of the project or 
program under which the property was acquired or improved. Agencies may 
require recipients to record liens or other appropriate notices of 
record to indicate that personal or real property has been acquired or 
improved with Federal funds and that use and disposition conditions 
apply to the property.

                          Procurement Standards



Sec. 19.40  Purpose of procurement standards.

    Sections 19.41 through 19.48 set forth standards for use by 
recipients in establishing procedures for the procurement of supplies 
and other expendable property, equipment, real property and other 
services with Federal funds. These standards are furnished to ensure 
that such materials and services are obtained in an effective manner and 
in compliance with the provisions of applicable Federal statutes and 
executive orders. No additional procurement standards or requirements 
shall be imposed by the Federal awarding agencies upon recipients, 
unless specifically required by Federal statute or executive order or 
approved by OMB.



Sec. 19.41  Recipient responsibilities.

    The standards contained in this section do not relieve the recipient 
of the contractual responsibilities arising under its contract(s). The 
recipient is the responsible authority, without recourse to the Federal 
awarding agency, regarding the settlement and satisfaction of all 
contractual and administrative issues arising out of procurements 
entered into in support of an award or other agreement. This includes 
disputes, claims, protests of award, source evaluation or other matters 
of a contractual nature. Matters concerning violation of statute are to 
be referred to such Federal, State or local authority as may have proper 
jurisdiction.



Sec. 19.42  Codes of conduct.

    The recipient shall maintain written standards of conduct governing 
the performance of its employees engaged in the award and administration 
of contracts. No employee, officer, or agent shall participate in the 
selection, award, or administration of a contract supported by Federal 
funds if a real or apparent conflict of interest would be involved. Such 
a conflict would arise when the employee, officer, or agent, any member 
of his or her immediate family, his or her partner, or an organization 
which employs or is about to employ any of the parties indicated herein, 
has a financial or other interest in the firm selected for an award. The 
officers, employees, and agents of the recipient shall neither solicit 
nor accept gratuities, favors, or anything of monetary value from 
contractors, or parties to subagreements. However, recipients may set 
standards for situations in which the financial interest is not 
substantial or the gift is an unsolicited item of nominal value. The 
standards of conduct shall provide for disciplinary actions to be 
applied for violations of such standards by officers, employees, or 
agents of the recipient.



Sec. 19.43  Competition.

    All procurement transactions shall be conducted in a manner to 
provide, to the maximum extent practical, open and free competition. The 
recipient shall be alert to organizational conflicts of interest as well 
as noncompetitive practices among contractors that may restrict or 
eliminate competition or otherwise restrain trade. In order to ensure 
objective contractor performance and eliminate unfair competitive 
advantage, contractors that develop or draft specifications, 
requirements, statements of work, invitations for bids and/or requests 
for proposals shall be excluded from competing for such procurements. 
Awards shall be made to the bidder or offeror whose bid or offer is 
responsive to the solicitation and is most advantageous to the 
recipient, price, quality and other factors considered. Solicitations 
shall clearly set forth all requirements that the bidder or offeror 
shall fulfill in order for the

[[Page 168]]

bid or offer to be evaluated by the recipient. Any and all bids or 
offers may be rejected when it is in the recipient's interest to do so.



Sec. 19.44  Procurement procedures.

    (a) All recipients shall establish written procurement procedures. 
These procedures shall provide for, at a minimum, that the conditions in 
paragraphs (a)(1), (2) and (3) of this section apply.
    (1) Recipients avoid purchasing unnecessary items.
    (2) Where appropriate, an analysis is made of lease and purchase 
alternatives to determine which would be the most economical and 
practical procurement for the Federal Government.
    (3) Solicitations for goods and services provide for all of the 
following:
    (i) A clear and accurate description of the technical requirements 
for the material, product or service to be procured. In competitive 
procurements, such a description shall not contain features which unduly 
restrict competition.
    (ii) Requirements which the bidder/offeror must fulfill and all 
other factors to be used in evaluating bids or proposals.
    (iii) A description, whenever practicable, of technical requirements 
in terms of functions to be performed or performance required, including 
the range of acceptable characteristics or minimum acceptable standards.
    (iv) The specific features of ``brand name or equal'' descriptions 
that bidders are required to meet when such items are included in the 
solicitation.
    (v) The acceptance, to the extent practicable and economically 
feasible, of products and services dimensioned in the metric system of 
measurement.
    (vi) Preference, to the extent practicable and economically 
feasible, for products and services that conserve natural resources and 
protect the environment and are energy efficient.
    (b) Positive efforts shall be made by recipients to utilize small 
businesses, minority-owned firms, and women's business enterprises, 
whenever possible. Recipients of Federal awards shall take all of the 
following steps to further this goal.
    (1) Ensure that small businesses, minority-owned firms, and women's 
business enterprises are used to the fullest extent practicable.
    (2) Make information on forthcoming opportunities available and 
arrange timeframes for purchases and contracts to encourage and 
facilitate participation by small businesses, minority-owned firms, and 
women's business enterprises.
    (3) Consider in the contract process whether firms competing for 
larger contracts intend to subcontract with small businesses, minority-
owned firms, and women's business enterprises.
    (4) Encourage contracting with consortiums of small businesses, 
minority-owned firms and women's business enterprises when a contract is 
too large for one of these firms to handle individually.
    (5) Use the services and assistance, as appropriate, of such 
organizations as the Small Business Administration and the Department of 
Commerce's Minority Business Development Agency in the solicitation and 
utilization of small businesses, minority-owned firms, and women's 
business enterprises.
    (c) The type of procuring instruments used (e.g., fixed price 
contracts, cost reimbursable contracts, purchase orders, and incentive 
contracts) shall be determined by the recipient but shall be appropriate 
for the particular procurement and for promoting the best interest of 
the program or project involved. The ``cost-plus-a-percentage-of-cost'' 
or ``percentage of construction cost'' methods of contracting shall not 
be used.
    (d) Contracts shall be made only with responsible contractors who 
possess the potential ability to perform successfully under the terms 
and conditions of the proposed procurement. Consideration shall be given 
to such matters as contractor integrity, record of past performance, 
financial and technical resources or accessibility to other necessary 
resources. In certain circumstances, contracts with certain parties are 
restricted by 49 CFR part 29, the implementation of E.O.'s 12549 and 
12689, ``Debarment and Suspension.''

[[Page 169]]

    (e) Recipients shall, on request, make available for the Federal 
awarding agency, pre-award review and procurement documents, such as 
request for proposals or invitations for bids, independent cost 
estimates, etc., when any of the following conditions apply.
    (1) A recipient's procurement procedures or operation fails to 
comply with the procurement standards in this part.
    (2) The procurement is expected to exceed the small purchase 
threshold fixed at 41 U.S.C. 403 (11) (currently $25,000) and is to be 
awarded without competition or only one bid or offer is received in 
response to a solicitation.
    (3) The procurement, which is expected to exceed the small purchase 
threshold, specifies a ``brand name'' product.
    (4) The proposed award over the small purchase threshold is to be 
awarded to other than the apparent low bidder under a sealed bid 
procurement.
    (5) A proposed contract modification changes the scope of a contract 
or increases the contract amount by more than the amount of the small 
purchase threshold.
    (f) Additional procurement procedures.
    (1) Section 165 of the STAA of 1982, as amended; section 337 of the 
Surface Transportation and Uniform Relocation Assistance Act (STURAA) of 
1987, 49 U.S.C. 1601, section 1048 of the Intermodal Surface 
Transportation Efficiency Act of 1991, and section 9129 of the Aviation 
Safety and Capacity Expansion Act of 1990, 49 U.S.C. app. 2226, impose 
Buy America requirements on the procurement of foreign products and 
materials by all recipients of FHWA, FTA, and Federal Aviation 
Administration (FAA) funds. Procedures are contained in 49 CFR part 660, 
Buy America Requirements and part 661, Buy America Requirements--STAA of 
1982. In addition, for FTA recipients, nonregulatory guidance is 
contained in FTA Circular 4220.1B, Third Party Contracting Guidelines, 
Chapter I, section 11. Non-regulatory guidance for FAA programs is 
contained in FAA Order 5100.38A and special conditions in grant awards.
    (2) Section 511(a)(16) of the Airport and Airway Improvement Act of 
1982, 49 U.S.C. app. 2210, requires FAA recipients and subrecipients to 
extend the use of qualifications-based (e.g., architectural and 
engineering services) contract selection procedures to certain other 
related areas and to award such contracts in the same manner as Federal 
contracts for architectural and engineering services are negotiated 
under Title IX of the 1949 Federal Property and Administrative Services 
Act, or equivalent airport sponsor qualifications based requirements. 
Non-regulatory guidance for FAA programs is contained in FAA Order 
5100.38A and special conditions in grant awards.
    (3) Section 3(a)(2)(C) of the Federal Transit Act, as amended, (49 
U.S.C. app. 1602(a)(2)(C)) prohibits the use of grant or loan funds to 
support procurements utilizing exclusionary or discriminatory 
specifications. Nonregulatory guidance is contained in FTA Circular 
4220.1B, Third Party Contracting Guidelines, Chapter I, section 15 and 
Attachment A.
    (4) Section 1241(b)(1) of 46 U.S.C. and 46 CFR part 381, Cargo 
Preference--U.S. Flag Vessels impose cargo preference requirements on 
the shipment of foreign made goods for FTA recipients. Nonregulatory 
guidance is contained in FTA Circular 4220.1B, Third Party Contracting 
Guidelines, Chapter I, section 10.



Sec. 19.45  Cost and price analysis.

    Some form of cost or price analysis shall be made and documented in 
the procurement files in connection with every procurement action. Price 
analysis may be accomplished in various ways, including the comparison 
of price quotations submitted, market prices and similar indicia, 
together with discounts. Cost analysis is the review and evaluation of 
each element of cost to determine reasonableness, allocability and 
allowability.



Sec. 19.46  Procurement records.

    Procurement records and files for purchases in excess of the small 
purchase threshold shall include the following at a minimum:
    (a) Basis for contractor selection,
    (b) Justification for lack of competition when competitive bids or 
offers are not obtained, and

[[Page 170]]

    (c) Basis for award cost or price.



Sec. 19.47  Contract administration.

    A system for contract administration shall be maintained to ensure 
contractor conformance with the terms, conditions and specifications of 
the contract and to ensure adequate and timely follow up of all 
purchases. Recipients shall evaluate contractor performance and 
document, as appropriate, whether contractors have met the terms, 
conditions, and specifications of the contract.



Sec. 19.48  Contract provisions.

    The recipient shall include, in addition to provisions to define a 
sound and complete agreement, the following provisions in all contracts. 
The following provisions shall also be applied to subcontracts.
    (a) Contracts in excess of the small purchase threshold shall 
contain contractual provisions or conditions that allow for 
administrative, contractual, or legal remedies in instances in which a 
contractor violates or breaches the contract terms, and provide for such 
remedial actions as may be appropriate.
    (b) All contracts in excess of the small purchase threshold shall 
contain suitable provisions for termination by the recipient, including 
the manner by which termination shall be effected and the basis for 
settlement. In addition, such contracts shall describe conditions under 
which the contract may be terminated for default as well as conditions 
where the contract may be terminated because of circumstances beyond the 
control of the contractor.
    (c) Except as otherwise required by statute, an award that requires 
the contracting (or subcontracting) for construction or facility 
improvements shall provide for the recipient to follow its own 
requirements relating to bid guarantees, performance bonds, and payment 
bonds unless the construction contract or subcontract exceeds $100,000. 
For those contracts or subcontracts exceeding $100,000, the Federal 
awarding agency may accept the bonding policy and requirements of the 
recipient, provided the Federal awarding agency has made a determination 
that the Federal Government's interest is adequately protected. If such 
a determination has not been made, the minimum requirements shall be as 
follows:
    (1) A bid guarantee from each bidder equivalent to five percent of 
the bid price. The ``bid guarantee'' shall consist of a firm commitment 
such as a bid bond, certified check, or other negotiable instrument 
accompanying a bid as assurance that the bidder shall, upon acceptance 
of his bid, execute such contractual documents as may be required within 
the time specified.
    (2) A performance bond on the part of the contractor for 100 percent 
of the contract price. A ``performance bond'' is one executed in 
connection with a contract to secure fulfillment of all the contractor's 
obligations under such contract.
    (3) A payment bond on the part of the contractor for 100 percent of 
the contract price. A ``payment bond'' is one executed in connection 
with a contract to assure payment as required by statute of all persons 
supplying labor and material in the execution of the work provided for 
in the contract.
    (4) Where bonds are required in the situations described herein, the 
bonds shall be obtained from companies holding certificates of authority 
as acceptable sureties pursuant to 31 CFR part 223, ``Surety Companies 
Doing Business with the United States.''
    (d) All negotiated contracts (except those for less than the small 
purchase threshold) awarded by recipients shall include a provision to 
the effect that the recipient, the Federal awarding agency, the 
Comptroller General of the United States, or any of their duly 
authorized representatives, shall have access to any books, documents, 
papers and records of the contractor which are directly pertinent to a 
specific program for the purpose of making audits, examinations, 
excerpts and transcriptions.
    (e) All contracts, including small purchases, awarded by recipients 
and their contractors shall contain the procurement provisions of 
appendix A to this part, as applicable.

[[Page 171]]

                           Reports and Records



Sec. 19.50  Purpose of reports and records.

    Sections 19.51 through 19.53 set forth the procedures for monitoring 
and reporting on the recipient's financial and program performance and 
the necessary standard reporting forms. They also set forth record 
retention requirements.



Sec. 19.51  Monitoring and reporting program performance.

    (a) Recipients are responsible for managing and monitoring each 
project, program, subaward, function or activity supported by the award. 
Recipients shall monitor subawards to ensure subrecipients have met the 
audit requirements as delineated in Sec. 19.26.
    (b) The Federal awarding agency shall prescribe the frequency with 
which the performance reports shall be submitted. Except as provided in 
Sec. 19.51(f), performance reports shall not be required more 
frequently than quarterly or, less frequently than annually. Annual 
reports shall be due 90 calendar days after the grant year; quarterly or 
semi-annual reports shall be due 30 days after the reporting period. The 
Federal awarding agency may require annual reports before the 
anniversary dates of multiple year awards in lieu of these requirements. 
The final performance reports are due 90 calendar days after the 
expiration or termination of the award.
    (c) If inappropriate, a final technical or performance report shall 
not be required after completion of the project.
    (d) When required, performance reports shall generally contain, for 
each award, brief information on each of the following:
    (1) A comparison of actual accomplishments with the goals and 
objectives established for the period, the findings of the investigator, 
or both. Whenever appropriate and the output of programs or projects can 
be readily quantified, such quantitative data should be related to cost 
data for computation of unit costs.
    (2) Reasons why established goals were not met, if appropriate.
    (3) Other pertinent information including, when appropriate, 
analysis and explanation of cost overruns or high unit costs.
    (e) Recipients shall not be required to submit more than the 
original and two copies of performance reports.
    (f) Recipients shall immediately notify the Federal awarding agency 
of developments that have a significant impact on the award-supported 
activities. Also, notification shall be given in the case of problems, 
delays, or adverse conditions which materially impair the ability to 
meet the objectives of the award. This notification shall include a 
statement of the action taken or contemplated, and any assistance needed 
to resolve the situation.
    (g) Federal awarding agencies may make site visits, as needed.
    (h) Federal awarding agencies shall comply with clearance 
requirements of 5 CFR part 1320 when requesting performance data from 
recipients.



Sec. 19.52  Financial reporting.

    (a) The following forms or such other forms as may be approved by 
OMB are authorized for obtaining financial information from recipients.
    (1) SF-269 or SF-269A, Financial Status Report.
    (i) Each Federal awarding agency shall require recipients to use the 
SF-269 or SF-269A to report the status of funds for all nonconstruction 
projects or programs. A Federal awarding agency may, however, have the 
option of not requiring the SF-269 or SF-269A when the SF-270, Request 
for Advance or Reimbursement, or SF-272, Report of Federal Cash 
Transactions, is determined to provide adequate information to meet its 
needs, except that a final SF-269 or SF-269A shall be required at the 
completion of the project when the SF-270 is used only for advances.
    (ii) The Federal awarding agency shall prescribe whether the report 
shall be on a cash or accrual basis. If the Federal awarding agency 
requires accrual information and the recipient's accounting records are 
not normally kept on the accrual basis, the recipient shall not be 
required to convert its accounting system, but shall develop such 
accrual information through best estimates based on an analysis of the 
documentation on hand.

[[Page 172]]

    (iii) The Federal awarding agency shall determine the frequency of 
the Financial Status Report for each project or program, considering the 
size and complexity of the particular project or program. However, the 
report shall not be required more frequently than quarterly or less 
frequently than annually. A final report shall be required at the 
completion of the agreement.
    (iv) The Federal awarding agency shall require recipients to submit 
the SF-269 or SF-269A (an original and no more than two copies) no later 
than 30 days after the end of each specified reporting period for 
quarterly and semi-annual reports, and 90 calendar days for annual and 
final reports. Extensions of reporting due dates may be approved by the 
Federal awarding agency upon request of the recipient.
    (2) SF-272, Report of Federal Cash Transactions.
    (i) When funds are advanced to recipients the Federal awarding 
agency shall require each recipient to submit the SF-272 and, when 
necessary, its continuation sheet, SF-272a. The Federal awarding agency 
shall use this report to monitor cash advanced to recipients and to 
obtain disbursement information for each agreement with the recipients.
    (ii) Federal awarding agencies may require forecasts of Federal cash 
requirements in the ``Remarks'' section of the report.
    (iii) When practical and deemed necessary, Federal awarding agencies 
may require recipients to report in the ``Remarks'' section the amount 
of cash advances received in excess of three days. Recipients shall 
provide short narrative explanations of actions taken to reduce the 
excess balances.
    (iv) Recipients shall be required to submit not more than the 
original and two copies of the SF-272 15 calendar days following the end 
of each quarter. The Federal awarding agencies may require a monthly 
report from those recipients receiving advances totaling $1 million or 
more per year.
    (v) Federal awarding agencies may waive the requirement for 
submission of the SF-272 for any one of the following reasons:
    (A) When monthly advances do not exceed $25,000 per recipient, 
provided that such advances are monitored through other forms contained 
in this section;
    (B) If, in the Federal awarding agency's opinion, the recipient's 
accounting controls are adequate to minimize excessive Federal advances; 
or,
    (C) When the electronic payment mechanisms provide adequate data.
    (b) When the Federal awarding agency needs additional information or 
more frequent reports, the following shall be observed.
    (1) When additional information is needed to comply with legislative 
requirements, Federal awarding agencies shall issue instructions to 
require recipients to submit such information under the ``Remarks'' 
section of the reports.
    (2) When a Federal awarding agency determines that a recipient's 
accounting system does not meet the standards in Sec. 19.21, additional 
pertinent information to further monitor awards may be obtained upon 
written notice to the recipient until such time as the system is brought 
up to standard. The Federal awarding agency, in obtaining this 
information, shall comply with report clearance requirements of 5 CFR 
part 1320.
    (3) Federal awarding agencies are encouraged to shade out any line 
item on any report if not necessary.
    (4) Federal awarding agencies may accept the identical information 
from the recipients in machine readable format or computer printouts or 
electronic outputs in lieu of prescribed formats.
    (5) Federal awarding agencies may provide computer or electronic 
outputs to recipients when such expedites or contributes to the accuracy 
of reporting.



Sec. 19.53  Retention and access requirements for records.

    (a) This section sets forth requirements for record retention and 
access to records for awards to recipients. Federal awarding agencies 
shall not impose any other record retention or access requirements upon 
recipients.
    (b) Financial records, supporting documents, statistical records, 
and all

[[Page 173]]

other records pertinent to an award shall be retained for a period of 
three years from the date of submission of the final expenditure report 
or, for awards that are renewed quarterly or annually, from the date of 
the submission of the quarterly or annual financial report, as 
authorized by the Federal awarding agency. The only exceptions are the 
following.
    (1) If any litigation, claim, or audit is started before the 
expiration of the 3-year period, the records shall be retained until all 
litigation, claims or audit findings involving the records have been 
resolved and final action taken.
    (2) Records for real property and equipment acquired with Federal 
funds shall be retained for 3 years after final disposition.
    (3) When records are transferred to or maintained by the Federal 
awarding agency, the 3-year retention requirement is not applicable to 
the recipient.
    (4) Indirect cost rate proposals, cost allocations plans, etc. as 
specified in paragraph Sec. 19.53(g).
    (c) Copies of original records may be substituted for the original 
records if authorized by the Federal awarding agency.
    (d) The Federal awarding agency shall request transfer of certain 
records to its custody from recipients when it determines that the 
records possess long term retention value. However, in order to avoid 
duplicate recordkeeping, a Federal awarding agency may make arrangements 
for recipients to retain any records that are continuously needed for 
joint use.
    (e) The Federal awarding agency, the Inspector General, Comptroller 
General of the United States, or any of their duly authorized 
representatives, have the right of timely and unrestricted access to any 
books, documents, papers, or other records of recipients that are 
pertinent to the awards, in order to make audits, examinations, 
excerpts, transcripts and copies of such documents. This right also 
includes timely and reasonable access to a recipient's personnel for the 
purpose of interview and discussion related to such documents. The 
rights of access in this paragraph are not limited to the required 
retention period, but shall last as long as records are retained.
    (f) Unless required by statute, no Federal awarding agency shall 
place restrictions on recipients that limit public access to the records 
of recipients that are pertinent to an award, except when the Federal 
awarding agency can demonstrate that such records shall be kept 
confidential and would have been exempted from disclosure pursuant to 
the Freedom of Information Act (5 U.S.C. 552) if the records had 
belonged to the Federal awarding agency.
    (g) Indirect cost rate proposals, cost allocations plans, etc. 
Paragraphs (g)(1) and (g)(2) of this section apply to the following 
types of documents, and their supporting records: Indirect cost rate 
computations or proposals, cost allocation plans, and any similar 
accounting computations of the rate at which a particular group of costs 
is chargeable (such as computer usage chargeback rates or composite 
fringe benefit rates).
    (1) If submitted for negotiation. If the recipient submits to the 
Federal awarding agency or the subrecipient submits to the recipient the 
proposal, plan, or other computation to form the basis for negotiation 
of the rate, then the 3-year retention period for its supporting records 
starts on the date of such submission.
    (2) If not submitted for negotiation. If the recipient is not 
required to submit to the Federal awarding agency or the subrecipient is 
not required to submit to the recipient the proposal, plan, or other 
computation for negotiation purposes, then the 3-year retention period 
for the proposal, plan, or other computation and its supporting records 
starts at the end of the fiscal year (or other accounting period) 
covered by the proposal, plan, or other computation.

                       Termination and Enforcement



Sec. 19.60  Purpose of termination and enforcement.

    Sections 19.61 and 19.62 set forth uniform suspension, termination 
and enforcement procedures.

[[Page 174]]



Sec. 19.61  Termination.

    (a) Awards may be terminated in whole or in part only if the 
conditions in paragraph (a) (1), (2) or (3) of this section apply.
    (1) By the Federal awarding agency, if a recipient materially fails 
to comply with the terms and conditions of an award.
    (2) By the Federal awarding agency with the consent of the 
recipient, in which case the two parties shall agree upon the 
termination conditions, including the effective date and, in the case of 
partial termination, the portion to be terminated.
    (3) By the recipient upon sending to the Federal awarding agency 
written notification setting forth the reasons for such termination, the 
effective date, and, in the case of partial termination, the portion to 
be terminated. However, if the Federal awarding agency determines in the 
case of partial termination that the reduced or modified portion of the 
grant will not accomplish the purposes for which the grant was made, it 
may terminate the grant in its entirety under either paragraph (a) (1) 
or (2) of this section.
    (b) If costs are allowed under an award, the responsibilities of the 
recipient referred to in Sec. 19.71(a), including those for property 
management as applicable, shall be considered in the termination of the 
award, and provision shall be made for continuing responsibilities of 
the recipient after termination, as appropriate.



Sec. 19.62  Enforcement.

    (a) Remedies for noncompliance. If a recipient materially fails to 
comply with the terms and conditions of an award, whether stated in a 
Federal statute, regulation, assurance, application, or notice of award, 
the Federal awarding agency may, in addition to imposing any of the 
special conditions outlined in Sec. 19.14, take one or more of the 
following actions, as appropriate in the circumstances.
    (1) Temporarily withhold cash payments pending correction of the 
deficiency by the recipient or more severe enforcement action by the 
Federal awarding agency.
    (2) Disallow (that is, deny both use of funds and any applicable 
matching credit for) all or part of the cost of the activity or action 
not in compliance.
    (3) Wholly or partly suspend or terminate the current award.
    (4) Withhold further awards for the project or program.
    (5) Take other remedies that may be legally available.
    (b) Hearings and appeals. In taking an enforcement action, the 
awarding agency shall provide the recipient an opportunity for hearing, 
appeal, or other administrative proceeding to which the recipient is 
entitled under any statute or regulation applicable to the action 
involved.
    (c) Effects of suspension and termination. Costs of a recipient 
resulting from obligations incurred by the recipient during a suspension 
or after termination of an award are not allowable unless the awarding 
agency expressly authorizes them in the notice of suspension or 
termination or subsequently. Other recipient costs during suspension or 
after termination which are necessary and not reasonably avoidable are 
allowable if the conditions in paragraph (c) (1) or (2) of this section 
apply.
    (1) The costs result from obligations which were properly incurred 
by the recipient before the effective date of suspension or termination, 
are not in anticipation of it, and in the case of a termination, are 
noncancellable.
    (2) The costs would be allowable if the award were not suspended or 
expired normally at the end of the funding period in which the 
termination takes effect.
    (d) Relationship to debarment and suspension. The enforcement 
remedies identified in this section, including suspension and 
termination, do not preclude a recipient from being subject to debarment 
and suspension under E.O.s 12549 and 12689 and 49 CFR part 29 (see Sec. 
19.13).



                 Subpart D_After-the-Award Requirements



Sec. 19.70  Purpose.

    Sections 19.71 through 19.73 contain closeout procedures and other 
procedures for subsequent disallowances and adjustments.

[[Page 175]]



Sec. 19.71  Closeout procedures.

    (a) Recipients shall submit, within 90 calendar days after the date 
of completion of the award, all financial, performance, and other 
reports as required by the terms and conditions of the award. The 
Federal awarding agency may approve extensions when requested by the 
recipient.
    (b) Unless the Federal awarding agency authorizes an extension, a 
recipient shall liquidate all obligations incurred under the award not 
later than 90 calendar days after the funding period or the date of 
completion as specified in the terms and conditions of the award or in 
agency implementing instructions.
    (c) The Federal awarding agency shall make prompt payments to a 
recipient for allowable reimbursable costs under the award being closed 
out.
    (d) The recipient shall promptly refund any balances of unobligated 
cash that the Federal awarding agency has advanced or paid and that is 
not authorized to be retained by the recipient for use in other 
projects. OMB Circular A-129 governs unreturned amounts that become 
delinquent debts.
    (e) When authorized by the terms and conditions of the award, the 
Federal awarding agency shall make a settlement for any upward or 
downward adjustments to the Federal share of costs after closeout 
reports are received.
    (f) The recipient shall account for any real and personal property 
acquired with Federal funds or received from the Federal Government in 
accordance with Sec. Sec. 19.31 through 19.37.
    (g) In the event a final audit has not been performed prior to the 
closeout of an award, the Federal awarding agency shall retain the right 
to recover an appropriate amount after fully considering the 
recommendations on disallowed costs resulting from the final audit.



Sec. 19.72  Subsequent adjustments and continuing responsibilities.

    (a) The closeout of an award does not affect any of the following.
    (1) The right of the Federal awarding agency to disallow costs and 
recover funds on the basis of a later audit or other review.
    (2) The obligation of the recipient to return any funds due as a 
result of later refunds, corrections, or other transactions.
    (3) Audit requirements in Sec. 19.26.
    (4) Property management requirements in Sec. Sec. 19.31 through 
19.37.
    (5) Records retention as required in Sec. 19.53.
    (b) After closeout of an award, a relationship created under an 
award may be modified or ended in whole or in part with the consent of 
the Federal awarding agency and the recipient, provided the 
responsibilities of the recipient referred to in Sec. 19.73(a), 
including those for property management as applicable, are considered 
and provisions made for continuing responsibilities of the recipient, as 
appropriate.



Sec. 19.73  Collection of amounts due.

    (a) Any funds paid to a recipient in excess of the amount to which 
the recipient is finally determined to be entitled under the terms and 
conditions of the award constitute a debt to the Federal Government. If 
not paid within a reasonable period after the demand for payment, the 
Federal awarding agency may reduce the debt by the provisions of 
paragraph (a) (1), (2) or (3) of this section.
    (1) Making an administrative offset against other requests for 
reimbursements.
    (2) Withholding advance payments otherwise due to the recipient.
    (3) Taking other action permitted by statute.
    (b) Except as otherwise provided by law, the Federal awarding agency 
shall charge interest on an overdue debt in accordance with 4 CFR 
chapter II, ``Federal Claims Collection Standards.''



             Sec. Appendix A to Part 19--Contract Provisions

    All contracts, awarded by a recipient including small purchases, 
shall contain the following provisions as applicable:
    1. Equal Employment Opportunity--All contracts shall contain a 
provision requiring compliance with E.O. 11246, ``Equal Employment 
Opportunity,'' as amended by E.O. 11375, ``Amending Executive Order 
11246 Relating to Equal Employment Opportunity,'' and as supplemented by 
regulations at 41 CFR part 60, ``Office of Federal Contract

[[Page 176]]

Compliance Programs, Equal Employment Opportunity, Department of 
Labor.''
    2. Copeland ``Anti-Kickback'' Act (18 U.S.C. 874 and 40 U.S.C. 
276c)--All contracts and subgrants in excess of $2,000 for construction 
or repair awarded by recipients and subrecipients shall include a 
provision for compliance with the Copeland ``Anti-Kickback'' Act (18 
U.S.C. 874), as supplemented by Department of Labor regulations (29 CFR 
part 3, ``Contractors and Subcontractors on Public Building or Public 
Work Financed in Whole or in part by Loans or Grants from the United 
States''). The Act provides that each contractor or subrecipient shall 
be prohibited from inducing, by any means, any person employed in the 
construction, completion, or repair of public work, to give up any part 
of the compensation to which he is otherwise entitled. The recipient 
shall report all suspected or reported violations to the Federal 
awarding agency.
    3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a-7)--When 
required by Federal program legislation, all construction contracts 
awarded by the recipients and subrecipients of more than $2000 shall 
include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 
276a to a(7) and as supplemented by Department of Labor regulations (29 
CFR part 5, ``Labor Standards Provisions Applicable to Contracts 
Governing Federally Financed and Assisted Construction''). Under this 
Act, contractors shall be required to pay wages to laborers and 
mechanics at a rate not less than the minimum wages specified in a wage 
determination made by the Secretary of Labor. In addition, contractors 
shall be required to pay wages not less than once a week. The recipient 
shall place a copy of the current prevailing wage determination issued 
by the Department of Labor in each solicitation and the award of a 
contract shall be conditioned upon the acceptance of the wage 
determination. The recipient shall report all suspected or reported 
violations to the Federal awarding agency.
    4. Contract Work Hours and Safety Standards Act (40 U.S.C. 327-
333)--Where applicable, all contracts awarded by recipients in excess of 
$2,000 for construction contracts and in excess of $2,500 for other 
contracts that involve the employment of mechanics or laborers shall 
include a provision for compliance with sections 102 and 107 of the 
Contract Work Hours and Safety Standards Act (40 U.S.C. 327-333), as 
supplemented by Department of Labor regulations (29 CFR part 5). Under 
section 102 of the Act, each contractor shall be required to compute the 
wages of every mechanic and laborer on the basis of a standard work week 
of 40 hours. Work in excess of the standard work week is permissible 
provided that the worker is compensated at a rate of not less than 1\1/
2\ times the basic rate of pay for all hours worked in excess of 40 
hours in the work week. Section 107 of the Act is applicable to 
construction work and provides that no laborer or mechanic shall be 
required to work in surroundings or under working conditions which are 
unsanitary, hazardous or dangerous. These requirements do not apply to 
the purchases of supplies or materials or articles ordinarily available 
on the open market, or contracts for transportation or transmission of 
intelligence.
    5. Rights to Inventions Made Under a Contract or Agreement--
Contracts or agreements for the performance of experimental, 
developmental, or research work shall provide for the rights of the 
Federal Government and the recipient in any resulting invention in 
accordance with 37 CFR part 401, ``Rights to Inventions Made by 
Nonprofit Organizations and Small Business Firms Under Government 
Grants, Contracts and Cooperative Agreements,'' and any implementing 
regulations issued by the awarding agency.
    6. Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water 
Pollution Control Act (33 U.S.C. 1251 et seq.), as amended--Contracts 
and subgrants of amounts in excess of $100,000 shall contain a provision 
that requires the recipient to agree to comply with all applicable 
standards, orders or regulations issued pursuant to the Clean Air Act 
(42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act as 
amended (33 U.S.C. 1251 et seq.). Violations shall be reported to the 
Federal awarding agency and the Regional Office of the Environmental 
Protection Agency (EPA).
    7. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)--Contractors who 
apply or bid for an award of $100,000 or more shall file the 
certification required by 49 CFR part 20, ``New Restrictions on 
Lobbying.'' Each tier certifies to the tier above that it will not and 
has not used Federal appropriated funds to pay any person or 
organization for influencing or attempting to influence an officer or 
employee of any agency, a member of Congress, officer or employee of 
Congress, or an employee of a member of Congress in connection with 
obtaining any Federal contract, grant or any other award covered by 31 
U.S.C. 1352. Each tier shall also disclose any lobbying with non-Federal 
funds that takes place in connection with obtaining any Federal award. 
Such disclosures are forwarded from tier to tier up to the recipient.
    8. Debarment and Suspension (E.O.s 12549 and 12689)--No contract 
shall be made to parties listed on the General Services Administration's 
List of Parties Excluded from Federal Procurement or Nonprocurement 
Programs in accordance with E.O.s 12549 and 12689, ``Debarment and 
Suspension'' and 49 CFR part 29. This list contains the names of parties 
debarred, suspended, or otherwise excluded by agencies, and contractors 
declared ineligible under statutory or regulatory authority other than 
E.O. 12549. Contractors with awards that exceed the small purchase

[[Page 177]]

threshold shall provide the required certification regarding its 
exclusion status and that of its principal employees.



PART 20_NEW RESTRICTIONS ON LOBBYING--Table of Contents



                            Subpart A_General

Sec.
20.100 Conditions on use of funds.
20.105 Definitions.
20.110 Certification and disclosure.

                  Subpart B_Activities by Own Employees

20.200 Agency and legislative liaison.
20.205 Professional and technical services.
20.210 Reporting.

            Subpart C_Activities by Other Than Own Employees

20.300 Professional and technical services.

                   Subpart D_Penalties and Enforcement

20.400 Penalties.
20.405 Penalty procedures.
20.410 Enforcement.

                          Subpart E_Exemptions

20.500 Secretary of Defense.

                        Subpart F_Agency Reports

20.600 Semi-annual compilation.
20.605 Inspector General report.

Appendix A to Part 20--Certification Regarding Lobbying
Appendix B to Part 20--Disclosure Form To Report Lobbying

    Authority: Sec. 319, Public Law 101-121 (31 U.S.C. 1352); 49 U.S.C. 
322(a).

    Source: 55 FR 6737, 6756, Feb. 26, 1990, unless otherwise noted.

    Cross Reference: See also Office of Management and Budget notice 
published at 54 FR 52306, December 20, 1989.



                            Subpart A_General



Sec. 20.100  Conditions on use of funds.

    (a) No appropriated funds may be expended by the recipient of a 
Federal contract, grant, loan, or cooperative ageement to pay any person 
for influencing or attempting to influence an officer or employee of any 
agency, a Member of Congress, an officer or employee of Congress, or an 
employee of a Member of Congress in connection with any of the following 
covered Federal actions: the awarding of any Federal contract, the 
making of any Federal grant, the making of any Federal loan, the 
entering into of any cooperative agreement, and the extension, 
continuation, renewal, amendment, or modification of any Federal 
contract, grant, loan, or cooperative agreement.
    (b) Each person who requests or receives from an agency a Federal 
contract, grant, loan, or cooperative agreement shall file with that 
agency a certification, set forth in appendix A, that the person has not 
made, and will not make, any payment prohibited by paragraph (a) of this 
section.
    (c) Each person who requests or receives from an agency a Federal 
contract, grant, loan, or a cooperative agreement shall file with that 
agency a disclosure form, set forth in appendix B, if such person has 
made or has agreed to make any payment using nonappropriated funds (to 
include profits from any covered Federal action), which would be 
prohibited under paragraph (a) of this section if paid for with 
appropriated funds.
    (d) Each person who requests or receives from an agency a commitment 
providing for the United States to insure or guarantee a loan shall file 
with that agency a statement, set forth in appendix A, whether that 
person has made or has agreed to make any payment to influence or 
attempt to influence an officer or employee of any agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with that loan insurance or guarantee.
    (e) Each person who requests or receives from an agency a commitment 
providing for the United States to insure or guarantee a loan shall file 
with that agency a disclosure form, set forth in appendix B, if that 
person has made or has agreed to make any payment to influence or 
attempt to influence an officer or employee of any agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with that loan insurance or guarantee.



Sec. 20.105  Definitions.

    For purposes of this part:

[[Page 178]]

    (a) Agency, as defined in 5 U.S.C. 552(f), includes Federal 
executive departments and agencies as well as independent regulatory 
commissions and Government corporations, as defined in 31 U.S.C. 
9101(1).
    (b) Covered Federal action means any of the following Federal 
actions:
    (1) The awarding of any Federal contract;
    (2) The making of any Federal grant;
    (3) The making of any Federal loan;
    (4) The entering into of any cooperative agreement; and,
    (5) The extension, continuation, renewal, amendment, or modification 
of any Federal contract, grant, loan, or cooperative agreement.

Covered Federal action does not include receiving from an agency a 
commitment providing for the United States to insure or guarantee a 
loan. Loan guarantees and loan insurance are addressed independently 
within this part.
    (c) Federal contract means an acquisition contract awarded by an 
agency, including those subject to the Federal Acquisition Regulation 
(FAR), and any other acquisition contract for real or personal property 
or services not subject to the FAR.
    (d) Federal cooperative agreement means a cooperative agreement 
entered into by an agency.
    (e) Federal grant means an award of financial assistance in the form 
of money, or property in lieu of money, by the Federal Government or a 
direct appropriation made by law to any person. The term does not 
include technical assistance which provides services instead of money, 
or other assistance in the form of revenue sharing, loans, loan 
guarantees, loan insurance, interest subsidies, insurance, or direct 
United States cash assistance to an individual.
    (f) Federal loan means a loan made by an agency. The term does not 
include loan guarantee or loan insurance.
    (g) Indian tribe and tribal organization have the meaning provided 
in section 4 of the Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450B). Alaskan Natives are included under the definitions 
of Indian tribes in that Act.
    (h) Influencing or attempting to influence means making, with the 
intent to influence, any communication to or appearance before an 
officer or employee or any agency, a Member of Congress, an officer or 
employee of Congress, or an employee of a Member of Congress in 
connection with any covered Federal action.
    (i) Loan guarantee and loan insurance means an agency's guarantee or 
insurance of a loan made by a person.
    (j) Local government means a unit of government in a State and, if 
chartered, established, or otherwise recognized by a State for the 
performance of a governmental duty, including a local public authority, 
a special district, an intrastate district, a council of governments, a 
sponsor group representative organization, and any other instrumentality 
of a local government.
    (k) Officer or employee of an agency includes the following 
individuals who are employed by an agency:
    (1) An individual who is appointed to a position in the Government 
under title 5, U.S. Code, including a position under a temporary 
appointment;
    (2) A member of the uniformed services as defined in section 101(3), 
title 37, U.S. Code;
    (3) A special Government employee as defined in section 202, title 
18, U.S. Code; and,
    (4) An individual who is a member of a Federal advisory committee, 
as defined by the Federal Advisory Committee Act, title 5, U.S. Code 
appendix 2.
    (l) Person means an individual, corporation, company, association, 
authority, firm, partnership, society, State, and local government, 
regardless of whether such entity is operated for profit or not for 
profit. This term excludes an Indian tribe, tribal organization, or any 
other Indian organization with respect to expenditures specifically 
permitted by other Federal law.
    (m) Reasonable compensation means, with respect to a regularly 
employed officer or employee of any person, compensation that is 
consistent with the normal compensation for such officer

[[Page 179]]

or employee for work that is not furnished to, not funded by, or not 
furnished in cooperation with the Federal Government.
    (n) Reasonable payment means, with respect to perfessional and other 
technical services, a payment in an amount that is consistent with the 
amount normally paid for such services in the private sector.
    (o) Recipient includes all contractors, subcontractors at any tier, 
and subgrantees at any tier of the recipient of funds received in 
connection with a Federal contract, grant, loan, or cooperative 
agreement. The term excludes an Indian tribe, tribal organization, or 
any other Indian organization with respect to expenditures specifically 
permitted by other Federal law.
    (p) Regularly employed means, with respect to an officer or employee 
of a person requesting or receiving a Federal contract, grant, loan, or 
cooperative agreement or a commitment providing for the United States to 
insure or guarantee a loan, an officer or employee who is employed by 
such person for at least 130 working days within one year immediately 
preceding the date of the submission that initiates agency consideration 
of such person for receipt of such contract, grant, loan, cooperative 
agreement, loan insurance commitment, or loan guarantee commitment. An 
officer or employee who is employed by such person for less than 130 
working days within one year immediately preceding the date of the 
submission that initiates agency consideration of such person shall be 
considered to be regularly employed as soon as he or she is employed by 
such person for 130 working days.
    (q) State means a State of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, a territory or possession of 
the United States, an agency or instrumentality of a State, and a multi-
State, regional, or interstate entity having governmental duties and 
powers.



Sec. 20.110  Certification and disclosure.

    (a) Each person shall file a certification, and a disclosure form, 
if required, with each submission that initiates agency consideration of 
such person for:
    (1) Award of a Federal contract, grant, or cooperative agreement 
exceeding $100,000; or
    (2) An award of a Federal loan or a commitment providing for the 
United States to insure or guarantee a loan exceeding $150,000.
    (b) Each person shall file a certification, and a disclosure form, 
if required, upon receipt by such person of:
    (1) A Federal contract, grant, or cooperative agreement exceeding 
$100,000; or
    (2) A Federal loan or a commitment providing for the United States 
to insure or guarantee a loan exceeding $150,000,

Unless such person previously filed a certification, and a disclosure 
form, if required, under paragraph (a) of this section.
    (c) Each person shall file a disclosure form at the end of each 
calendar quarter in which there occurs any event that requires 
disclosure or that materially affects the accuracy of the information 
contained in any disclosure form previously filed by such person under 
paragraphs (a) or (b) of this section. An event that materially affects 
the accuracy of the information reported includes:
    (1) A cumulative increase of $25,000 or more in the amount paid or 
expected to be paid for influencing or attempting to influence a covered 
Federal action; or
    (2) A change in the person(s) or individual(s) influencing or 
attempting to influence a covered Federal action; or,
    (3) A change in the officer(s), employee(s), or Member(s) contacted 
to influence or attempt to influence a covered Federal action.
    (d) Any person who requests or receives from a person referred to in 
paragraphs (a) or (b) of this section:
    (1) A subcontract exceeding $100,000 at any tier under a Federal 
contract;
    (2) A subgrant, contract, or subcontract exceeding $100,000 at any 
tier under a Federal grant;
    (3) A contract or subcontract exceeding $100,000 at any tier under a 
Federal loan exceeding $150,000; or,
    (4) A contract or subcontract exceeding $100,000 at any tier under a 
Federal cooperative agreement,

[[Page 180]]


Shall file a certification, and a disclosure form, if required, to the 
next tier above.
    (e) All disclosure forms, but not certifications, shall be forwarded 
from tier to tier until received by the person referred to in paragraphs 
(a) or (b) of this section. That person shall forward all disclosure 
forms to the agency.
    (f) Any certification or disclosure form filed under paragraph (e) 
of this section shall be treated as a material representation of fact 
upon which all receiving tiers shall rely. All liability arising from an 
erroneous representation shall be borne solely by the tier filing that 
representation and shall not be shared by any tier to which the 
erroneous representation is forwarded. Submitting an erroneous 
certification or disclosure constitutes a failure to file the required 
certification or disclosure, respectively. If a person fails to file a 
required certification or disclosure, the United States may pursue all 
available remedies, including those authorized by section 1352, title 
31, U.S. Code.
    (g) For awards and commitments in process prior to December 23, 
1989, but not made before that date, certifications shall be required at 
award or commitment, covering activities occurring between December 23, 
1989, and the date of award or commitment. However, for awards and 
commitments in process prior to the December 23, 1989 effective date of 
these provisions, but not made before December 23, 1989, disclosure 
forms shall not be required at time of award or commitment but shall be 
filed within 30 days.
    (h) No reporting is required for an activity paid for with 
appropriated funds if that activity is allowable under either subpart B 
or C.



                  Subpart B_Activities by Own Employees



Sec. 20.200  Agency and legislative liaison.

    (a) The prohibition on the use of appropriated funds, in Sec. 
20.100 (a), does not apply in the case of a payment of reasonable 
compensation made to an officer or employee of a person requesting or 
receiving a Federal contract, grant, loan, or cooperative agreement if 
the payment is for agency and legislative liaison activities not 
directly related to a covered Federal action.
    (b) For purposes of paragraph (a) of this section, providing any 
information specifically requested by an agency or Congress is allowable 
at any time.
    (c) For purposes of paragraph (a) of this section, the following 
agency and legislative liaison activities are allowable at any time only 
where they are not related to a specific solicitation for any covered 
Federal action:
    (1) Discussing with an agency (including individual demonstrations) 
the qualities and characteristics of the person's products or services, 
conditions or terms of sale, and service capabilities; and,
    (2) Technical discussions and other activities regarding the 
application or adaptation of the person's products or services for an 
agency's use.
    (d) For purposes of paragraph (a) of this section, the following 
agencies and legislative liaison activities are allowable only where 
they are prior to formal solicitation of any covered Federal action:
    (1) Providing any information not specifically requested but 
necessary for an agency to make an informed decision about initiation of 
a covered Federal action;
    (2) Technical discussions regarding the preparation of an 
unsolicited proposal prior to its official submission; and,
    (3) Capability presentations by persons seeking awards from an 
agency pursuant to the provisions of the Small Business Act, as amended 
by Public Law 95-507 and other subsequent amendments.
    (e) Only those activities expressly authorized by this section are 
allowable under this section.



Sec. 20.205  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec. 
20.100 (a), does not apply in the case of a payment of reasonable 
compensation made to an officer or employee of a person requesting or 
receiving a Federal contract, grant, loan, or cooperative agreement or 
an extension, continuation, renewal,

[[Page 181]]

amendment, or modification of a Federal contract, grant, loan, or 
cooperative agreement if payment is for professional or technical 
services rendered directly in the preparation, submission, or 
negotiation of any bid, proposal, or application for that Federal 
contract, grant, loan, or cooperative agreement or for meeting 
requirements imposed by or pursuant to law as a condition for receiving 
that Federal contract, grant, loan, or cooperative agreement.
    (b) For purposes of paragraph (a) of this section, ``professional 
and technical services'' shall be limited to advice and analysis 
directly applying any professional or technical discipline. For example, 
drafting of a legal document accompanying a bid or proposal by a lawyer 
is allowable. Similarly, technical advice provided by an engineer on the 
performance or operational capability of a piece of equipment rendered 
directly in the negotiation of a contract is allowable. However, 
communications with the intent to influence made by a professional (such 
as a licensed lawyer) or a technical person (such as a licensed 
accountant) are not allowable under this section unless they provide 
advice and analysis directly applying their professional or technical 
expertise and unless the advice or analysis is rendered directly and 
solely in the preparation, submission or negotiation of a covered 
Federal action. Thus, for example, communications with the intent to 
influence made by a lawyer that do not provide legal advice or analysis 
directly and solely related to the legal aspects of his or her client's 
proposal, but generally advocate one proposal over another are not 
allowable under this section because the lawyer is not providing 
professional legal services. Similarly, communications with the intent 
to influence made by an engineer providing an engineering analysis prior 
to the preparation or submission of a bid or proposal are not allowable 
under this section since the engineer is providing technical services 
but not directly in the preparation, submission or negotiation of a 
covered Federal action.
    (c) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation, or reasonably expected to be required by law or regulation, 
and any other requirements in the actual award documents.
    (d) Only those services expressly authorized by this section are 
allowable under this section.



Sec. 20.210  Reporting.

    No reporting is required with respect to payments of reasonable 
compensation made to regularly employed officers or employees of a 
person.



            Subpart C_Activities by Other Than Own Employees



Sec. 20.300  Professional and technical services.

    (a) The prohibition on the use of appropriated funds, in Sec. 
20.100 (a), does not apply in the case of any reasonable payment to a 
person, other than an officer or employee of a person requesting or 
receiving a covered Federal action, if the payment is for professional 
or technical services rendered directly in the preparation, submission, 
or negotiation of any bid, proposal, or application for that Federal 
contract, grant, loan, or cooperative agreement or for meeting 
requirements imposed by or pursuant to law as a condition for receiving 
that Federal contract, grant, loan, or cooperative agreement.
    (b) The reporting requirements in Sec. 20.110 (a) and (b) regarding 
filing a disclosure form by each person, if required, shall not apply 
with respect to professional or technical services rendered directly in 
the preparation, submission, or negotiation of any commitment providing 
for the United States to insure or guarantee a loan.
    (c) For purposes of paragraph (a) of this section, ``professional 
and technical services'' shall be limited to advice and analysis 
directly applying any professional or technical discipline. For example, 
drafting or a legal document accompanying a bid or proposal by a lawyer 
is allowable. Similarly, technical advice provided by an engineer on the 
performance or operational capability of a piece of equipment rendered 
directly in the negotiation of a

[[Page 182]]

contract is allowable. However, communications with the intent to 
influence made by a professional (such as a licensed lawyer) or a 
technical person (such as a licensed accountant) are not allowable under 
this section unless they provide advice and analysis directly applying 
their professional or technical expertise and unless the advice or 
analysis is rendered directly and solely in the preparation, submission 
or negotiation of a covered Federal action. Thus, for example, 
communications with the intent to influence made by a lawyer that do not 
provide legal advice or analysis directly and solely related to the 
legal aspects of his or her client's proposal, but generally advocate 
one proposal over another are not allowable under this section because 
the lawyer is not providing professional legal services. Similarly, 
communications with the intent to influence made by an engineer 
providing an engineering analysis prior to the preparation or submission 
of a bid or proposal are not allowable under this section since the 
engineer is providing technical services but not directly in the 
preparation, submission or negotiation of a covered Federal action.
    (d) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation, or reasonably expected to be required by law or regulation, 
and any other requirements in the actual award documents.
    (e) Persons other than officers or employees of a person requesting 
or receiving a covered Federal action include consultants and trade 
associations.
    (f) Only those services expressly authorized by this section are 
allowable under this section.



                   Subpart D_Penalties and Enforcement



Sec. 20.400  Penalties.

    (a) Any person who makes an expenditure prohibited herein shall be 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each such expenditure.
    (b) Any person who fails to file or amend the disclosure form (see 
appendix B) to be filed or amended if required herein, shall be subject 
to a civil penalty of not less than $10,000 and not more than $100,000 
for each such failure.
    (c) A filing or amended filing on or after the date on which an 
administrative action for the imposition of a civil penalty is commenced 
does not prevent the imposition of such civil penalty for a failure 
occurring before that date. An administrative action is commenced with 
respect to a failure when an investigating official determines in 
writing to commence an investigation of an allegation of such failure.
    (d) In determining whether to impose a civil penalty, and the amount 
of any such penalty, by reason of a violation by any person, the agency 
shall consider the nature, circumstances, extent, and gravity of the 
violation, the effect on the ability of such person to continue in 
business, any prior violations by such person, the degree of culpability 
of such person, the ability of the person to pay the penalty, and such 
other matters as may be appropriate.
    (e) First offenders under paragraphs (a) or (b) of this section 
shall be subject to a civil penalty of $10,000, absent aggravating 
circumstances. Second and subsequent offenses by persons shall be 
subject to an appropriate civil penalty between $10,000 and $100,000, as 
determined by the agency head or his or her designee.
    (f) An imposition of a civil penalty under this section does not 
prevent the United States from seeking any other remedy that may apply 
to the same conduct that is the basis for the imposition of such civil 
penalty.



Sec. 20.405  Penalty procedures.

    Agencies shall impose and collect civil penalties pursuant to the 
provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C. 
sections 3803 (except subsection (c)), 3804, 3805, 3806, 3807, 3808, and 
3812, insofar as these provisions are not inconsistent with the 
requirements herein.



Sec. 20.410  Enforcement.

    The head of each agency shall take such actions as are necessary to 
ensure

[[Page 183]]

that the provisions herein are vigorously implemented and enforced in 
that agency.



                          Subpart E_Exemptions



Sec. 20.500  Secretary of Defense.

    (a) The Secretary of Defense may exempt, on a case-by-case basis, a 
covered Federal action from the prohibition whenever the Secretary 
determines, in writing, that such an exemption is in the national 
interest. The Secretary shall transmit a copy of each such written 
exemption to Congress immediately after making such a determination.
    (b) The Department of Defense may issue supplemental regulations to 
implement paragraph (a) of this section.



                        Subpart F_Agency Reports



Sec. 20.600  Semi-annual compilation.

    (a) The head of each agency shall collect and compile the disclosure 
reports (see appendix B) and, on May 31 and November 30 of each year, 
submit to the Secretary of the Senate and the Clerk of the House of 
Representatives a report containing a compilation of the information 
contained in the disclosure reports received during the six-month period 
ending on March 31 or September 30, respectively, of that year.
    (b) The report, including the compilation, shall be available for 
public inspection 30 days after receipt of the report by the Secretary 
and the Clerk.
    (c) Information that involves intelligence matters shall be reported 
only to the Select Committee on Intelligence of the Senate, the 
Permanent Select Committee on Intelligence of the House of 
Representatives, and the Committees on Appropriations of the Senate and 
the House of Representatives in accordance with procedures agreed to by 
such committees. Such information shall not be available for public 
inspection.
    (d) Information that is classified under Executive Order 12356 or 
any successor order shall be reported only to the Committee on Foreign 
Relations of the Senate and the Committee on Foreign Affairs of the 
House of Representatives or the Committees on Armed Services of the 
Senate and the House of Representatives (whichever such committees have 
jurisdiction of matters involving such information) and to the 
Committees on Appropriations of the Senate and the House of 
Representatives in accordance with procedures agreed to by such 
committees. Such information shall not be available for public 
inspection.
    (e) The first semi-annual compilation shall be submitted on May 31, 
1990, and shall contain a compilation of the disclosure reports received 
from December 23, 1989 to March 31, 1990.
    (f) Major agencies, designated by the Office of Management and 
Budget (OMB), are required to provide machine-readable compilations to 
the Secretary of the Senate and the Clerk of the House of 
Representatives no later than with the compilations due on May 31, 1991. 
OMB shall provide detailed specifications in a memorandum to these 
agencies.
    (g) Non-major agencies are requested to provide machine-readable 
compilations to the Secretary of the Senate and the Clerk of the House 
of Representatives.
    (h) Agencies shall keep the originals of all disclosure reports in 
the official files of the agency.



Sec. 20.605  Inspector General report.

    (a) The Inspector General, or other official as specified in 
paragraph (b) of this section, of each agency shall prepare and submit 
to Congress each year, commencing with submission of the President's 
Budget in 1991, an evaluation of the compliance of that agency with, and 
the effectiveness of, the requirements herein. The evaluation may 
include any recommended changes that may be necessary to strengthen or 
improve the requirements.
    (b) In the case of an agency that does not have an Inspector 
General, the agency official comparable to an Inspector General shall 
prepare and submit the annual report, or, if there is no such comparable 
official, the head of the agency shall prepare and submit the annual 
report.
    (c) The annual report shall be submitted at the same time the agency 
submits its annual budget justifications to Congress.

[[Page 184]]

    (d) The annual report shall include the following: All alleged 
violations relating to the agency's covered Federal actions during the 
year covered by the report, the actions taken by the head of the agency 
in the year covered by the report with respect to those alleged 
violations and alleged violations in previous years, and the amounts of 
civil penalties imposed by the agency in the year covered by the report.



      Sec. Appendix A to Part 20--Certification Regarding Lobbying

 Certification for Contracts, Grants, Loans, and Cooperative Agreements

    The undersigned certifies, to the best of his or her knowledge and 
belief, that:
    (1) No Federal appropriated funds have been paid or will be paid, by 
or on behalf of the undersigned, to any person for influencing or 
attempting to influence an officer or employee of an agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with the awarding of any Federal contract, the 
making of any Federal grant, the making of any Federal loan, the 
entering into of any cooperative agreement, and the extension, 
continuation, renewal, amendment, or modification of any Federal 
contract, grant, loan, or cooperative agreement.
    (2) If any funds other than Federal appropriated funds have been 
paid or will be paid to any person for influencing or attempting to 
influence an officer or employee of any agency, a Member of Congress, an 
officer or employee of Congress, or an employee of a Member of Congress 
in connection with this Federal contract, grant, loan, or cooperative 
agreement, the undersigned shall complete and submit Standard Form-LLL, 
``Disclosure Form to Report Lobbying,'' in accordance with its 
instructions.
    (3) The undersigned shall require that the language of this 
certification be included in the award documents for all subawards at 
all tiers (including subcontracts, subgrants, and contracts under 
grants, loans, and cooperative agreements) and that all subrecipients 
shall certify and disclose accordingly.
    This certification is a material representation of fact upon which 
reliance was placed when this transaction was made or entered into. 
Submission of this certification is a prerequisite for making or 
entering into this transaction imposed by section 1352, title 31, U.S. 
Code. Any person who fails to file the required certification shall be 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each such failure.

            Statement for Loan Guarantees and Loan Insurance

    The undersigned states, to the best of his or her knowledge and 
belief, that:
    If any funds have been paid or will be paid to any person for 
influencing or attempting to influence an officer or employee of any 
agency, a Member of Congress, an officer or employee of Congress, or an 
employee of a Member of Congress in connection with this commitment 
providing for the United States to insure or guarantee a loan, the 
undersigned shall complete and submit Standard Form-LLL, ``Disclosure 
Form to Report Lobbying,'' in accordance with its instructions.
    Submission of this statement is a prerequisite for making or 
entering into this transaction imposed by section 1352, title 31, U.S. 
Code. Any person who fails to file the required statement shall be 
subject to a civil penalty of not less than $10,000 and not more than 
$100,000 for each such failure.

[[Page 185]]



     Sec. Appendix B to Part 20--Disclosure Form To Report Lobbying
[GRAPHIC] [TIFF OMITTED] TC02FE91.097


[[Page 186]]


[GRAPHIC] [TIFF OMITTED] TC02FE91.098


[[Page 187]]


[GRAPHIC] [TIFF OMITTED] TC02FE91.099


[[Page 188]]





PART 21_NONDISCRIMINATION IN FEDERALLY-ASSISTED PROGRAMS OF THE 
DEPARTMENT OF TRANSPORTATION_EFFECTUATION OF TITLE VI OF THE CIVIL 

RIGHTS ACT OF 1964--Table of Contents



Sec.
21.1 Purpose.
21.3 Application of this part.
21.5 Discrimination prohibited.
21.7 Assurances required.
21.9 Compliance information.
21.11 Conduct of investigations.
21.13 Procedure for effecting compliance.
21.15 Hearings.
21.17 Decisions and notices.
21.19 Judicial review.
21.21 Effect on other regulations, forms, and instructions.
21.23 Definitions.

Appendix A to Part 21--Activities to Which This Part Applies
Appendix B to Part 21--Activities to Which This Part Applies When a 
          Primary Objective of the Federal Financial Assistance Is To 
          Provide Employment
Appendix C to Part 21--Application of Part 21 to Certain Federal 
          Financial Assistance of the Department of Transportation

    Authority: 42 U.S.C. 2000d-2000d-7.

    Source: 35 FR 10080, June 18, 1970, unless otherwise noted.



Sec. 21.1  Purpose.

    The purpose of this part is to effectuate the provisions of title VI 
of the Civil Rights Act of 1964 (hereafter referred to as the Act) to 
the end that no person in the United States shall, on the grounds of 
race, color, or national origin, be excluded from participation in, be 
denied the benefits of, or be otherwise subjected to discrimination 
under any program or activity receiving Federal financial assistance 
from the Department of Transportation.



Sec. 21.3  Application of this part.

    (a) This part applies to any program for which Federal financial 
assistance is authorized under a law administered by the Department, 
including the types of Federal financial assistance listed in appendix A 
to this part. It also applies to money paid, property transferred, or 
other Federal financial assistance extended after the effective date of 
this part pursuant to an application approved before that effective 
date. This part does not apply to:
    (1) Any Federal financial assistance by way of insurance or guaranty 
contracts;
    (2) Money paid, property transferred, or other assistance extended 
before the effective date of this part, except where such assistance was 
subject to the title VI regulations of any agency whose responsibilities 
are now exercised by this Department;
    (3) Any assistance to any individual who is the ultimate 
beneficiary; or
    (4) Any employment practice, under any such program, of any 
employer, employment agency, or labor organization, except to the extent 
described in Sec. 21.5(c).

The fact that a type of Federal financial assistance is not listed in 
appendix A to this part shall not mean, if title VI of the Act is 
otherwise applicable, that a program is not covered. Other types of 
Federal financial assistance under statutes now in force or hereinafter 
enacted may be added to appendix A to this part.
    (b) In any program receiving Federal financial assistance in the 
form, or for the acquisition, of real property or an interest in real 
property, to the extent that rights to space on, over, or under any such 
property are included as part of the program receiving that assistance, 
the nondiscrimination requirement of this part shall extend to any 
facility located wholly or in part in that space.

[35 FR 10080, June 18, 1970, as amended at 68 FR 51389, Aug. 26, 2003]



Sec. 21.5  Discrimination prohibited.

    (a) General. No person in the United States shall, on the grounds of 
race, color, or national origin be excluded from participation in, be 
denied the benefits of, or be otherwise subjected to discrimination 
under, any program to which this part applies.
    (b) Specific discriminatory actions prohibited:
    (1) A recipient to which this part applies may not, directly or 
through contractual or other arrangements, on the grounds of race, 
color, or national origin.

[[Page 189]]

    (i) Deny a person any service, financial aid, or other benefit 
provided under the program;
    (ii) Provide any service, financial aid, or other benefit to a 
person which is different, or is provided in a different manner, from 
that provided to others under the program;
    (iii) Subject a person to segregation or separate treatment in any 
matter related to his receipt of any service, financial aid, or other 
benefit under the program;
    (iv) Restrict a person in any way in the enjoyment of any advantage 
or privilege enjoyed by others receiving any service, financial aid, or 
other benefit under the program;
    (v) Treat a person differently from others in determining whether he 
satisfies any admission, enrollment, quota, eligibility, membership, or 
other requirement or condition which persons must meet in order to be 
provided any service, financial aid, or other benefit provided under the 
program;
    (vi) Deny a person an opportunity to participate in the program 
through the provision of services or otherwise or afford him an 
opportunity to do so which is different from that afforded others under 
the program; or
    (vii) Deny a person the opportunity to participate as a member of a 
planning, advisory, or similar body which is an integral part of the 
program.
    (2) A recipient, in determining the types of services, financial 
aid, or other benefits, or facilities which will be provided under any 
such program, or the class of person to whom, or the situations in 
which, such services, financial aid, other benefits, or facilities will 
be provided under any such program, or the class of persons to be 
afforded an opportunity to participate in any such program; may not, 
directly or through contractual or other arrangements, utilize criteria 
or methods of administration which have the effect of subjecting persons 
to discrimination because of their race, color, or national origin, or 
have the effect of defeating or substantially impairing accomplishment 
of the objectives of the program with respect to individuals of a 
particular race, color, or national origin.
    (3) In determining the site or location of facilities, a recipient 
or applicant may not make selections with the purpose or effect of 
excluding persons from, denying them the benefits of, or subjecting them 
to discrimination under any program to which this regulation applies, on 
the grounds of race, color, or national origin; or with the purpose or 
effect of defeating or substantially impairing the accomplishment of the 
objectives of the Act or this part.
    (4) As used in this section the services, financial aid, or other 
benefits provided under a program receiving Federal financial assistance 
include any service, financial aid, or other benefit provided in or 
through a facility provided with the aid of Federal financial 
assistance.
    (5) The enumeration of specific forms of prohibited discrimination 
in this paragraph does not limit the generality of the prohibition in 
paragraph (a) of this section.
    (6) Examples demonstrating the application of the provisions of this 
section to certain types of Federal financial assistance administered by 
the Department of Transportation are contained in appendix C of this 
part.
    (7) This part does not prohibit the consideration of race, color, or 
national origin if the purpose and effect are to remove or overcome the 
consequences of practices or impediments which have restricted the 
availability of, or participation in, the program or activity receiving 
Federal financial assistance, on the grounds of race, color, or national 
origin. Where prior discriminatory practice or usage tends, on the 
grounds of race, color, or national origin to exclude individuals from 
participation in, to deny them the benefits of, or to subject them to 
discrimination under any program or activity to which this part applies, 
the applicant or recipient must take affirmative action to remove or 
overcome the effects of the prior discriminatory practice or usage. Even 
in the absence of prior discriminatory practice or usage, a recipient in 
administering a program or activity to which this part applies, is 
expected to take affirmative action to assure that no person is excluded 
from participation in or denied the benefits of the program or activity 
on the

[[Page 190]]

grounds of race, color, or national origin.
    (c) Employment practices:
    (1) Where a primary objective of the Federal financial assistance to 
a program to which this part applies is to provide employment, a 
recipient or other party subject to this part shall not, directly or 
through contractual or other arrangements, subject a person to 
discrimination on the ground of race, color, or national origin in its 
employment practices under such program (including recruitment or 
recruitment advertising, hiring, firing, upgrading, promotion, demotion, 
transfer, layoff, termination, rates of pay or other forms of 
compensation or benefits, selection for training or apprenticeship, use 
of facilities, and treatment of employees). Such recipient shall take 
affirmative action to insure that applicants are employed, and employees 
are treated during employment, without regard to their race, color, or 
national origin. The requirements applicable to construction employment 
under any such program shall be those specified in or pursuant to Part 
III of Executive Order 11246 or any Executive order which supersedes it.
    (2) Federal financial assistance to programs under laws funded or 
administered by the Department which have as a primary objective the 
providing of employment include those set forth in appendix B to this 
part.
    (3) Where a primary objective of the Federal financial assistance is 
not to provide employment, but discrimination on the grounds of race, 
color, or national origin in the employment practices of the recipient 
or other persons subject to the regulation tends, on the grounds of 
race, color, or national origin, to exclude individuals from 
participation in, to deny them the benefits of, or to subject them to 
discrimination under any program to which this regulation applies, the 
provisions of paragraph (c)(1) of this section shall apply to the 
employment practices of the recipient or other persons subject to the 
regulation, to the extent necessary to assure equality of opportunity 
to, and nondiscriminatory treatment of, beneficiaries.
    (d) A recipient may not make a selection of a site or location of a 
facility if the purpose of that selection, or its effect when made, is 
to exclude individuals from participation in, to deny them the benefits 
of, or to subject them to discrimination under any program or activity 
to which this rule applies, on the grounds of race, color, or national 
origin; or if the purpose is to, or its effect when made will, 
substantially impair the accomplishment of the objectives of this part.

[35 FR 10080, June 18, 1970, as amended by Amdt. 72-2, 38 FR 17997, July 
5, 1973; 68 FR 51389, Aug. 26, 2003]



Sec. 21.7  Assurances required.

    (a) General. (1) Every application for Federal financial assistance 
to which this part applies, except an application to which paragraph (b) 
of this section applies, and every application for Federal financial 
assistance to provide a facility shall, as a condition to its approval 
and the extension of any Federal financial assistance pursuant to the 
application, contain or be accompanied by, an assurance that the program 
will be conducted or the facility operated in compliance with all 
requirements imposed by or pursuant to this part. Every awardof Federal 
financial assistance shall require the submission of such an assurance. 
In the case where the Federal financial assistance is to provide or is 
in the form of personal property, or real property or interest therein 
or structures thereon, the assurance shall obligate the recipient, or, 
in the case of a subsequent transfer, the transferee, for the period 
during which the property is used for a purpose for which the Federal 
financial assistance is extended or for another purpose involving the 
provision of similar services or benefits, or for as long as the 
recipient retains ownership or possession of the property, whichever is 
longer. In all other cases the assurance shall obligate the recipient 
for the period during which Federal financial assistance is extended to 
the program. The Secretary shall specify the form of the foregoing 
assurances, and the extent to which like assurances will be required of 
subgrantees, contractors and subcontractors, transferees, successors in 
interest, and other

[[Page 191]]

participants. Any such assurance shall include provisions which give the 
United States a right to seek its judicial enforcement.
    (2) In the case where Federal financial assistance is provided in 
the form of a transfer of real property, structures, or improvements 
thereon, or interest therein, from the Federal Government, the 
instrument effecting or recording the transfer shall contain a covenant 
running with the land assuring nondiscrimination for the period during 
which the real property is used for a purpose for which the Federal 
financial assistance is extended or for another purpose involving the 
provision of similar services or benefits. Where no transfer of property 
or interest therein from the Federal Government is involved, but 
property is acquired or improved with Federal financial assistance, the 
recipient shall agree to include such covenant in any subsequent 
transfer of such property. When the property is obtained from the 
Federal Government, such covenant may also include a condition coupled 
with a right to be reserved by the Department to revert title to the 
property in the event of a breach of the covenant where, in the 
discretion of the Secretary, such a condition and right of reverter is 
appropriate to the statute under which the real property is obtained and 
to the nature of the grant and the grantee. In such event if a 
transferee of real property proposes to mortgage or otherwise encumber 
the real property as security for financing construction of new, or 
improvement of existing, facilities on such property for the purposes 
for which the property was transferred, the Secretary may agree, upon 
request of the transferee and if necessary to accomplish such financing, 
and upon such conditions as he deems appropriate, to subordinate such 
right of reversion to the lien of such mortgage or other encumbrance.
    (b) Continuing Federal financial assistance. Every application by a 
State or a State agency for continuing Federal financial assistance to 
which this part applies (including the types of Federal financial 
assistance listed in appendix A to this part) shall as a condition to 
its approval and the extension of any Federal financial assistance 
pursuant to the application: (1) Contain or be accompanied by a 
statement that the program is (or, in the case of a new program, will 
be) conducted in compliance with all requirements imposed by or pursuant 
to this part, and (2) provide or be accompanied by provision for such 
methods of administration for the program as are found by the Secretary 
to give reasonable guarantee that the applicant and all recipients of 
Federal financial assistance under such program will comply with all 
requirements imposed by or pursuant to this part.

[35 FR 10080, June 18, 1970, as amended at 68 FR 51389, Aug. 26, 2003]



Sec. 21.9  Compliance information.

    (a) Cooperation and assistance. The Secretary shall to the fullest 
extent practicable seek the cooperation of recipients in obtaining 
compliance with this part and shall provide assistance and guidance to 
recipients to help them comply voluntarily with this part.
    (b) Compliance reports. Each recipient shall keep such records and 
submit to the Secretary timely, complete, and accurate compliance 
reports at such times, and in such form and containing such information, 
as the Secretary may determine to be necessary to enable him to 
ascertain whether the recipient has complied or is complying with this 
part. In the case in which a primary recipient extends Federal financial 
assistance to any other recipient, such other recipient shall also 
submit such compliance reports to the primary recipient as may be 
necessary to enable the primary recipient to carry out its obligations 
under this part. In general recipients should have available for the 
Secretary racial and ethnic data showing the extent to which members of 
minority groups are beneficiaries of programs receiving Federal 
financial assistance.
    (c) Access to sources of information. Each recipient shall permit 
access by the Secretary during normal business hours to such of its 
books, records, accounts, and other sources of information, and its 
facilities as may be pertinent to ascertain compliance with this part. 
Where any information required

[[Page 192]]

of a recipient is in the exclusive possession of any other agency, 
institution, or person and this agency, institution, or person fails or 
refuses to furnish this information, the recipient shall so certify in 
its report and shall set forth what efforts it has made to obtain the 
information.
    (d) Information to beneficiaries and participants. Each recipient 
shall make available to participants, beneficiaries, and other 
interested persons such information regarding the provisions of this 
part and its applicability to the program for which the recipient 
receives Federal financial assistance, and make such information 
available to them in such manner, as the Secretary finds necessary to 
apprise such persons of the protections against discrimination assured 
them by the Act and this part.

[35 FR 10080, June 18, 1970, as amended by Amdt. 72-2, 38 FR 17997, July 
5, 1973; 68 FR 51389, Aug. 26, 2003]



Sec. 21.11  Conduct of investigations.

    (a) Periodic compliance reviews. The Secretary shall from time to 
time review the practices of recipients to determine whether they are 
complying with this part.
    (b) Complaints. Any person who believes himself or any specific 
class of persons to be subjected to discrimination prohibited by this 
part may by himself or by a representative file with the Secretary a 
written complaint. A complaint must be filed not later than 180 days 
after the date of the alleged discrimination, unless the time for filing 
is extended by the Secretary.
    (c) Investigations. The Secretary will make a prompt investigation 
whenever a compliance review, report, complaint, or any other 
information indicates a possible failure to comply with this part. The 
investigation will include, where appropriate, a review of the pertinent 
practices and policies of the recipient, the circumstances under which 
the possible noncompliance with this part occurred, and other factors 
relevant to a determination as to whether the recipient has failed to 
comply with this part.
    (d) Resolution of matters. (1) If an investigation pursuant to 
paragraph (c) of this section indicates a failure to comply with this 
part, the Secretary will so inform the recipient and the matter will be 
resolved by informal means whenever possible. If it has been determined 
that the matter cannot be resolved by informal means, action will be 
taken as provided for in Sec. 21.13.
    (2) If an investigation does not warrant action pursuant to 
paragraph (d)(1) of this section the Secretary will so inform the 
recipient and the complainant, if any, in writing.
    (e) Intimidatory or retaliatory acts prohibited. No recipient or 
other person shall intimidate, threaten, coerce, or discriminate against 
any individual for the purpose of interfering with any right or 
privilege secured by section 601 of the Act or this part, or because he 
has made a complaint, testified, assisted, or participated in any manner 
in an investigation, proceeding, or hearing under this part. The 
identity of complainants shall be kept confidential except to the extent 
necessary to carry out the purposes of this part, including the conduct 
of any investigation, hearing, or judicial proceeding arising 
thereunder.

[35 FR 10080, June 18, 1970, as amended by Amdt. 72-2, 38 FR 17997, July 
5, 1973]



Sec. 21.13  Procedure for effecting compliance.

    (a) General. If there appears to be a failure or threatened failure 
to comply with this part, and if the noncompliance or threatened 
noncompliance cannot be corrected by informal means, compliance with 
this part may be effected by the suspension or termination of or refusal 
to grant or to continue Federal financial assistance or by any other 
means authorized by law. Such other means may include, but are not 
limited to: (1) A reference to the Department of Justice with a 
recommendation that appropriate proceedings be brought to enforce any 
rights of the United States under any law of the United States 
(including other titles of the Act), or any assurance or other 
contractual undertaking, and (2) any applicable proceeding under State 
or local law.
    (b) Noncompliance with Sec. 21.7. If an applicant fails or refuses 
to furnish an assurance required under Sec. 21.7 or otherwise fails or 
refuses to comply with a

[[Page 193]]

requirement imposed by or pursuant to that section, Federal financial 
assistance may be refused in accordance with the procedures of paragraph 
(c) of this section. The Department shall not be required to provide 
assistance in such a case during the pendency of the administrative 
proceedings under such paragraph. However, subject to Sec. 21.21, the 
Department shall continue assistance during the pendency of such 
proceedings where such assistance is due and payable pursuant to an 
application approved prior to the effective date of this part.
    (c) Termination of or refusal to grant or to continue Federal 
financial assistance. No order suspending, terminating, or refusing to 
grant or continue Federal financial assistance shall become effective 
until:
    (1) The Secretary has advised the applicant or recipient of his 
failure to comply and has determined that compliance cannot be secured 
by voluntary means;
    (2) There has been an express finding on the record, after 
opportunity for hearing, of a failure by the applicant or recipient to 
comply with a requirement imposed by or pursuant to this part;
    (3) The action has been approved by the Secretary pursuant to Sec. 
21.17(e); and
    (4) The expiration of 30 days after the Secretary has filed with the 
committee of the House and the committee of the Senate having 
legislative jurisdiction over the program involved, a full written 
report of the circumstances and the grounds for such action.

Any action to suspend or terminate or to refuse to grant or to continue 
Federal financial assistance shall be limited to the particular 
political entity, or part thereof, or other applicant or recipient as to 
whom such a finding has been made and shall be limited in its effect to 
the particular program, or part thereof, in which such noncompliance has 
been so found.
    (d) Other means authorized by law. No action to effect compliance 
with title VI of the Act by any other means authorized by law shall be 
taken by this Department until:
    (1) The Secretary has determined that compliance cannot be secured 
by voluntary means;
    (2) The recipient or other person has been notified of its failure 
to comply and of the action to be taken to effect compliance; and
    (3) The expiration of at least 10 days from the mailing of such 
notice to the recipient or other person. During this period of at least 
10 days, additional efforts shall be made to persuade the recipient or 
other person to comply with the regulation and to take such corrective 
action as may be appropriate.



Sec. 21.15  Hearings.

    (a) Opportunity for hearing. Whenever an opportunity for a hearing 
is required by Sec. 21.13(c), reasonable notice shall be given by 
registered or certified mail, return receipt requested, to the affected 
applicant or recipient. This notice shall advise the applicant or 
recipient of the action proposed to be taken, the specific provision 
under which the proposed action against it is to be taken, and the 
matters of fact or law asserted as the basis for this action, and 
either: (1) Fix a date not less than 20 days after the date of such 
notice within which the applicant or recipient may request of the 
Secretary that the matter be scheduled for hearing or (2) advise the 
applicant or recipient that the matter in question has been set down for 
hearing at a stated place and time. The time and place so fixed shall be 
reasonable and shall be subject to change for cause. The complainant, if 
any, shall be advised of the time and place of the hearing. An applicant 
or recipient may waive a hearing and submit written information and 
argument for the record. The failure of an applicant or recipient to 
request a hearing under this paragraph or to appear at a hearing for 
which a date has been set shall be deemed to be a waiver of the right to 
a hearing under section 602 of the Act and Sec. 21.13(c) and consent to 
the making of a decision on the basis of such information as is 
available.
    (b) Time and place of hearing. Hearings shall be held at the offices 
of the Department in Washington, D.C., at a time fixed by the Secretary 
unless he determines that the convenience of the applicant or recipient 
or of the Department requires that another place be selected. Hearings 
shall be held before

[[Page 194]]

the Secretary, or at his discretion, before a hearing examiner appointed 
in accordance with section 3105 of title 5, United States Code, or 
detailed under section 3344 of title 5, United States Code.
    (c) Right to counsel. In all proceedings under this section, the 
applicant or recipient and the Department shall have the right to be 
represented by counsel.
    (d) Procedures, evidence, and record. (1) The hearing, decision, and 
any administrative review thereof shall be conducted in conformity with 
sections 554 through 557 of title 5, United States Code, and in 
accordance with such rules of procedure as are proper (and not 
inconsistent with this section) relating to the conduct of the hearing, 
giving of notices subsequent to those provided for in paragraph (a) of 
this section, taking of testimony, exhibits, arguments and briefs, 
requests for findings, and other related matters. Both the Department 
and the applicant or recipient shall be entitled to introduce all 
relevant evidence on the issues as stated in the notice for hearing or 
as determined by the officer conducting the hearing at the outset of or 
during the hearing.
    (2) Technical rules of evidence do not apply to hearings conducted 
pursuant to this part, but rules or principles designed to assure 
production of the most credible evidence available and to subject 
testimony to test by cross-examination shall be applied where reasonably 
necessary by the officer conducting the hearing. The hearing officer may 
exclude irrelevant, immaterial, or unduly repetitious evidence. All 
documents and other evidence offered or taken for the record shall be 
open to examination by the parties and opportunity shall be given to 
refute facts and arguments advanced on either side of the issues. A 
transcript shall be made of the oral evidence except to the extent the 
substance thereof is stipulated for the record. All decisions shall be 
based upon the hearing record and written findings shall be made.
    (e) Consolidated or joint hearings. In cases in which the same or 
related facts are asserted to constitute noncompliance with this part 
with respect to two or more Federal statutes, authorities, or other 
means by which Federal financial assistance is extended and to which 
this part applies, or noncompliance with this part and the regulations 
of one or more other Federal departments or agencies issued under title 
VI of the Act, the Secretary may, by agreement with such other 
departments or agencies, where applicable, provide for the conduct of 
consolidated or joint hearings, and for the application to such hearings 
of rules or procedures not inconsistent with this part. Final decisions 
in such cases, insofar as this regulation is concerned, shall be made in 
accordance with Sec. 21.17.

[35 FR 10080, June 18, 1970, as amended at 68 FR 51389, Aug. 26, 2003]



Sec. 21.17  Decisions and notices.

    (a) Procedure on decisions by hearing examiner. If the hearing is 
held by a hearing examiner, the hearing examiner shall either make an 
initial decision, if so authorized, or certify the entire record 
including his recommended findings and proposed decision to the 
Secretary for a final decision, and a copy of such initial decision or 
certification shall be mailed to the applicant or recipient. Where the 
initial decision is made by the hearing examiner the applicant or 
recipient may, within 30 days after the mailing of such notice of 
initial decision, file with the Secretary his exceptions to the initial 
decision, with his reasons therefor. In the absence of exceptions, the 
Secretary may, on his own motion, within 45 days after the initial 
decision, serve on the applicant or recipient a notice that he will 
review the decision. Upon the filing of such exceptions or of notice of 
review, the Secretary shall review the initial decision and issue his 
own decision thereon including the reasons therefor. In the absence of 
either exceptions or a notice of review the initial decision shall, 
subject to paragraph (e) of this section, constitute the final decision 
of the Secretary.
    (b) Decisions on record or review by the Secretary. Whenever a 
record is certified to the Secretary for decision or he reviews the 
decision of a hearing examiner pursuant to paragraph (a) of this 
section, or whenever the Secretary conducts the hearing, the applicant 
or

[[Page 195]]

recipient shall be given reasonable opportunity to file with him briefs 
or other written statements of its contentions, and a written copy of 
the final decision of the Secretary shall be sent to the applicant or 
recipient and to the complainant, if any.
    (c) Decisions on record where a hearing is waived. Whenever a 
hearing is waived pursuant to Sec. 21.15, a decision shall be made by 
the Secretary on the record and a written copy of such decision shall be 
sent to the applicant or recipient, and to the complainant, if any.
    (d) Rulings required. Each decision of a hearing examiner or the 
Secretary shall set forth his ruling on each finding, conclusion, or 
exception presented, and shall identify the requirement or requirements 
imposed by or pursuant to this part with which it is found that the 
applicant or recipient has failed to comply.
    (e) Approval by Secretary. Any final decision by an official of the 
Department, other than the Secretary personally, which provides for the 
suspension or termination of, or the refusal to grant or continue 
Federal financial assistance, or the imposition of any other sanction 
available under this part or the Act, shall promptly be transmitted to 
the Secretary personally, who may approve such decision, may vacate it, 
or remit or mitigate any sanction imposed.
    (f) Content of orders. The final decision may provide for suspension 
or termination of, or refusal to grant or continue Federal financial 
assistance, in whole or in part, to which this regulation applies, and 
may contain such terms, conditions, and other provisions as are 
consistent with and will effectuate the purposes of the Act and this 
part, including provisions designed to assure that no Federal financial 
assistance to which this regulation applies will thereafter be extended 
to the applicant or recipient determined by such decision to be in 
default in its performance of an assurance given by it pursuant to this 
part, or to have otherwise failed to comply with this part, unless and 
until it corrects its noncompliance and satisfies the Secretary that it 
will fully comply with this part.
    (g) Post termination proceedings. (1) An applicant or recipient 
adversely affected by an order issued under paragraph (f) of this 
section shall be restored to full eligibility to receive Federal 
financial assistance if it satisfies the terms and conditions of that 
order for such eligibility or if it brings itself into compliance with 
this part and provides reasonable assurance that it will fully comply 
with this part.
    (2) Any applicant or recipient adversely affected by an order 
entered pursuant to paragraph (f) of this section may at any time 
request the Secretary to restore fully its eligibility to receive 
Federal financial assistance. Any such request shall be supported by 
information showing that the applicant or recipient has met the 
requirements of paragraph (g)(1) of this section. If the Secretary 
determines that those requirements have been satisfied, he shall restore 
such eligibility.
    (3) If the Secretary denies any such request, the applicant or 
recipient may submit a request for a hearing in writing, specifying who 
it believes such official to have been in error. It shall thereupon be 
given an expeditious hearing, with a decision on the record in 
accordance with rules or procedures issued by the Secretary. The 
applicant or recipient will be restored to such eligibility if it proves 
at such a hearing that it satisfied the requirements of paragraph (g)(1) 
of this section.

While proceedings under this paragraph are pending, the sanctions 
imposed by the order issued under paragraph (f) of this section shall 
remain in effect.

[35 FR 10080, June 18, 1970, as amended at 68 FR 51389, Aug. 26, 2003]



Sec. 21.19  Judicial review.

    Action taken pursuant to section 602 of the Act is subject to 
judicial review as provided in section 603 of the Act.



Sec. 21.21  Effect on other regulations, forms, and instructions.

    (a) Effect on other regulations. All regulations, orders, or like 
directions issued before the effective date of this part by any officer 
of the Department which impose requirements designed to prohibit any 
discrimination against individuals on the grounds of race, color, or 
national origin under any program to which this part applies, and which

[[Page 196]]

authorize the suspension or termination of or refusal to grant or to 
continue Federal financial assistance to any applicant for a recipient 
of such assistance for failure to comply with such requirements, are 
hereby superseded to the extent that such discrimination is prohibited 
by this part, except that nothing in this part may be considered to 
relieve any person of any obligation assumed or imposed under any such 
superseded regulation, order, instruction, or like direction before the 
effective date of this part. Nothing in this part, however, supersedes 
any of the following (including future amendments thereof): (1) 
Executive Order 11246 (3 CFR, 1965 Supp., p. 167) and regulations issued 
thereunder or (2) any other orders, regulations, or instructions, 
insofar as such orders, regulations, or instructions prohibit 
discrimination on the ground of race, color, or national origin in any 
program or situation to which this part is inapplicable, or prohibit 
discrimination on any other ground.
    (b) Forms and instructions. The Secretary shall issue and promptly 
make available to all interested persons forms and detailed instructions 
and procedures for effectuating this part as applied to programs to 
which this part applies and for which he is responsible.
    (c) Supervision and coordination. The Secretary may from time to 
time assign to officials of the Department, or to officials of other 
departments or agencies of the Government with the consent of such 
departments or agencies, responsibilities in connection with the 
effectuation of the purposes of title VI of the Act and this part (other 
than responsibility for final decision as provided in Sec. 21.17), 
including the achievement of effective coordination and maximum 
uniformity within the Department and within the Executive Branch of the 
Government in the application of title VI and this part to similar 
programs and in similar situations. Any action taken, determination made 
or requirement imposed by an official of another department or agency 
acting pursuant to an assignment of responsibility under this paragraph 
shall have the same effect as though such action had been taken by the 
Secretary of this Department.

[35 FR 10080, June 18, 1970, as amended at 68 FR 51389, Aug. 26, 2003]



Sec. 21.23  Definitions.

    Unless the context requires otherwise, as used in this part:
    (a) Applicant means a person who submits an application, request, or 
plan required to be approved by the Secretary, or by a primary 
recipient, as a condition to eligibility for Federal financial 
assistance, and ``application'' means such an application, request, or 
plan.
    (b) Facility includes all or any part of structures, equipment, or 
other real or personal property or interests therein, and the provision 
of facilities includes the construction, expansion, renovation, 
remodeling, alteration or acquisition of facilities.
    (c) Federal financial assistance includes:
    (1) Grants and loans of Federal funds;
    (2) The grant or donation of Federal property and interests in 
property;
    (3) The detail of Federal personnel;
    (4) The sale and lease of, and the permission to use (on other than 
a casual or transient basis), Federal property or any interest in such 
property without consideration or at a nominal consideration, or at a 
consideration which is reduced for the purpose of assisting the 
recipient, or in recognition of the public interest to be served by such 
sale or lease to the recipient; and
    (5) Any Federal agreement, arrangement, or other contract which has 
as one of its purposes the provision of assistance.
    (d) Primary recipient means any recipient that is authorized or 
required to extend Federal financial assistance to another recipient.
    (e) Program or activity and program mean all of the operations of 
any entity described in paragraphs (e)(1) through (4) of this section, 
any part of which is extended Federal financial assistance:
    (1)(i) A department, agency, special purpose district, or other 
instrumentality of a State or of a local government; or

[[Page 197]]

    (ii) The entity of such State or local government that distributes 
such assistance and each such department or agency (and each other State 
or local government entity) to which the assistance is extended, in the 
case of assistance to a State or local government;
    (2)(i) A college, university, or other postsecondary institution, or 
a public system of higher education; or
    (ii) A local educational agency (as defined in 20 U.S.C. 7801), 
system of vocational education, or other school system;
    (3)(i) An entire corporation, partnership, or other private 
organization, or an entire sole proprietorship--
    (A) If assistance is extended to such corporation, partnership, 
private organization, or sole proprietorship as a whole; or
    (B) Which is principally engaged in the business of providing 
education, health care, housing, social services, or parks and 
recreation; or
    (ii) The entire plant or other comparable, geographically separate 
facility to which Federal financial assistance is extended, in the case 
of any other corporation, partnership, private organization, or sole 
proprietorship; or
    (4) Any other entity which is established by two or more of the 
entities described in paragraph (e)(1), (2), or (3) of this section.
    (f) Recipient may mean any State, territory, possession, the 
District of Columbia, or Puerto Rico, or any political subdivision 
thereof, or instrumentality thereof, any public or private agency, 
institution, or organization, or other entity, or any individual, in any 
State, territory, possession, the District of Columbia, or Puerto Rico, 
to whom Federal financial assistance is extended, directly or through 
another recipient, including any successor, assignee, or transferee 
thereof, but such term does not include any ultimate beneficiary.
    (g) Secretary means the Secretary of Transportation or, except in 
Sec. 21.17 (e), any person to whom he has delegated his authority in 
the matter concerned.

[35 FR 10080, June 18, 1970, as amended at 68 FR 51389, Aug. 26, 2003]



    Sec. Appendix A to Part 21--Activities to Which This Part Applies

    1. Use of grants made in connection with Federal-aid highway systems 
(23 U.S.C. 101 et seq.).
    2. Use of grants made in connection with the Highway Safety Act of 
1966 (23 U.S.C. 401 et seq.).
    3. Use of grants in connection with the National Traffic and Motor 
Vehicle Safety Act of 1966 (15 U.S.C. 1391-1409, 1421-1425).
    4. Lease of real property and the grant of permits, licenses, 
easements and rights-of-way covering real property under control of the 
Coast Guard (14 U.S.C. 93 (n) and (o)).
    5. Utilization of Coast Guard personnel and facilities by any State, 
territory, possession, or political subdivision thereof (14 U.S.C. 
141(a)).
    6. Use of Coast Guard personnel for duty in connection with maritime 
instruction and training by the States, territories, and Puerto Rico (14 
U.S.C. 148).
    7. Use of obsolete and other Coast Guard material by sea scout 
service of Boy Scouts of America, any incorporated unit of the Coast 
Guard auxiliary, and public body or private organization not organized 
for profit (14 U.S.C. 641(a)).
    8. U.S. Coast Guard Auxiliary Program (14 U.S.C. 821-832).
    9. Use of grants for the support of basic scientific research by 
nonprofit institutions of higher education and nonprofit organizations 
whose primary purpose is conduct of scientific research (42 U.S.C. 
1891).
    10. Use of grants made in connection with the Federal-aid Airport 
Program (secs. 1-15 and 17-20 of the Federal Airport Act, 49 U.S.C. 
1101-1114, 1116-1120).
    11. Use of U.S. land acquired for public airports under:
    a. Section 16 of the Federal Airport Act, 49 U.S.C. 1115; and
    b. Surplus Property Act (sec. 13(g) of the Surplus Property Act of 
1944, 50 U.S.C. App. 1622(g), and sec. 3 of the Act of Oct. 1, 1949, 50 
U.S.C. App. 1622b).
    12. Activities carried out in connection with the Aviation Education 
Program of the Federal Aviation Administration under sections 305, 311, 
and 313(a) of the Federal Aviation Act of 1958, as amended (49 U.S.C. 
1346, 1352, and 1354(a)).
    13. Use of grants and loans made in connection with Urban Mass 
Transportation Capital Facilities Grant and Loan Program--Urban Mass 
Transportation Act of 1964, as amended (49 U.S.C. 1602).
    14. Use of grants made in connection with Urban Mass Transportation 
Research and Demonstration Grant Program--Urban Mass Transportation Act 
of 1964, as amended (49 U.S.C. 1605).

[[Page 198]]

    15. Use of grants made in connection with Urban Mass Transportation 
Technical Studies Grant Program--Urban Mass Transportation Act of 1964, 
as amended (49 U.S.C. 1607a).
    16. Use of grants made in connection with Urban Mass Transportation 
Managerial Training Grant Program--Urban Mass Transportation Act of 
1964, as amended (49 U.S.C. 1607b).
    17. Use of grants made in connection with Urban Mass Transportation 
Grants for Research and Training Programs in Institutions of Higher 
Learning--Urban Mass Transportation Act of 1964, as amended (49 U.S.C. 
1607c).
    18. Use of grants made in connection with the High Speed Ground 
Transportation Act, as amended (49 U.S.C. 631-642).



Sec. Appendix B to Part 21--Activities to Which This Part Applies When a 
  Primary Objective of the Federal Financial Assistance Is To Provide 
                               Employment

    1. Appalachia Regional Development Act of 1965 (40 U.S.C. App. 1 et 
seq.).



 Sec. Appendix C to Part 21--Application of Part 21 to Certain Federal 
        Financial Assistance of the Department of Transportation

            Nondiscrimination on Federally Assisted Projects

    (a) Examples. The following examples, without being exhaustive, 
illustrate the application of the nondiscrimination provisions of this 
part on projects receiving Federal financial assistance under the 
programs of certain Department of Transportation operating 
administrations:
    (1) Federal Aviation Administration. (i) The airport sponsor or any 
of his lessees, concessionaires, or contractors may not differentiate 
between members of the public because of race, color, or national origin 
in furnishing, or admitting to, waiting rooms, passenger holding areas, 
aircraft tiedown areas, restaurant facilities, restrooms, or facilities 
operated under the compatible land use concept.
    (ii) The airport sponsor and any of his lessees, concessionaires, or 
contractors must offer to all members of the public the same degree and 
type of service without regard to race, color, or national origin. This 
rule applies to fixed base operators, restaurants, snack bars, gift 
shops, ticket counters, baggage handlers, car rental agencies, 
limousines and taxis franchised by the airport sponsor, insurance 
underwriters, and other businesses catering to the public at the 
airport.
    (iii) An aircraft operator may not be required to park his aircraft 
at a location that is less protected, or less accessible from the 
terminal facilities, than locations offered to others, because of his 
race, color, or national origin.
    (iv) The pilot of an aircraft may not be required to help more 
extensively in fueling operations, and may not be offered less 
incidental service (such as windshield wiping), than other pilots, 
because of his race, color, or national origin.
    (v) No pilot or crewmember eligible for access to a pilot's lounge 
or to unofficial communication facilities such as a UNICOM frequency may 
be restricted in that access because of his race, color, or national 
origin.
    (vi) Access to facilities maintained at the airport by air carriers 
or commercial operators for holders of first-class transportation 
tickets or frequent users of the carrier's or operator's services may 
not be restricted on the basis of race, color, or national origin.
    (vii) Passengers and crewmembers seeking ground transportation from 
the airport may not be assigned to different vehicles, or delayed or 
embarrassed in assignment to vehicles, by the airport sponsor or his 
lessees, concessionaires, or contractors, because of race, color, or 
national origin.
    (viii) Where there are two or more sites having equal potential to 
serve the aeronautical needs of the area, the airport sponsor shall 
select the site least likely to adversely affect existing communities. 
Such site selection shall not be made on the basis of race, color, or 
national origin.
    (ix) Employment at obligated airports, including employment by 
tenants and concessionaires shall be available to all regardless of 
race, creed, color, sex, or national origin. The sponsor shall 
coordinate his airport plan with his local transit authority and the 
Urban Mass Transportation Administration to assure public 
transportation, convenient to the disadvantaged areas of nearby 
communities to enhance employment opportunities for the disadvantaged 
and minority population.
    (x) The sponsor shall assure that the minority business community in 
his area is advised of the opportunities offered by airport concessions, 
and that bids are solicited from such qualified minority firms, and 
awards made without regard to race, color, or national origin.
    (2) Federal Highway Administration. (i) The State, acting through 
its highway department, may not discriminate in its selection and 
retention of contractors, including without limitation, those whose 
services are retained for, or incidental to, construction, planning, 
research, highway safety, engineering, property management, and fee 
contracts and other commitments with person for services and expenses 
incidental to the acquisition of right-of-way.

[[Page 199]]

    (ii) The State may not discriminate against eligible persons in 
making relocation payments and in providing relocation advisory 
assistance where relocation is necessitated by highway right-of-way 
acquisitions.
    (iii) Federal-aid contractors may not discriminate in their 
selection and retention of first-tier subcontractors, and first-tier 
subcontractors may not discriminate in their selection and retention of 
second-tier subcontractors, who participate in Federal-aid highway 
construction, acquisition of right-of-way and related projects, 
including those who supply materials and lease equipment.
    (iv) The State may not discriminate against the traveling public and 
business users of the federally assisted highway in their access to and 
use of the facilities and services provided for public accommodations 
(such as eating, sleeping, rest, recreation, and vehicle servicing) 
constructed on, over or under the right-of-way of such highways.
    (v) Neither the State, any other persons subject to this part, nor 
its contractors and subcontractors may discriminate in their employment 
practices in connection with highway construction projects or other 
projects assisted by the Federal Highway Administration.
    (vi) The State shall not locate or design a highway in such a manner 
as to require, on the basis of race, color, or national origin, the 
relocation of any persons.
    (vii) The State shall not locate, design, or construct a highway in 
such a manner as to deny reasonable access to, and use thereof, to any 
persons on the basis of race, color, or national origin.
    (3) Urban Mass Transportation Administration. (i) Any person who is, 
or seeks to be, a patron of any public vehicle which is operated as a 
part of, or in conjunction with, a project shall be given the same 
access, seating, and other treatment with regard to the use of such 
vehicle as other persons without regard to their race, color, or 
national origin.
    (ii) No person who is, or seeks to be, an employee of the project 
sponsor or lessees, concessionaires, contractors, licensees, or any 
organization furnishing public transportation service as a part of, or 
in conjunction with, the project shall be treated less favorably than 
any other employee or applicant with regard to hiring, dismissal, 
advancement, wages, or any other conditions and benefits of employment, 
on the basis of race, color, or national origin.
    (iii) No person or group of persons shall be discriminated against 
with regard to the routing, scheduling, or quality of service of 
transportation service furnished as a part of the project on the basis 
of race, color, or national origin. Frequency of service, age and 
quality of vehicles assigned to routes, quality of stations serving 
different routes, and location of routes may not be determined on the 
basis of race, color, or national origin.
    (iv) The location of projects requiring land acquisition and the 
displacement of persons from their residences and businesses may not be 
determined on the basis of race, color, or national origin.
    (b) Obligations of the airport operator--(1) Tenants, contractors, 
and concessionaires. Each airport operator shall require each tenant, 
contractor, and concessionaire who provides any activity, service, or 
facility at the airport under lease, contract with, or franchise from 
the airport, to covenant in a form specified by the Administrator, 
Federal Aviation Administration, that he will comply with the 
nondiscrimination requirements of this part.
    (2) Notification of beneficiaries. The airport operator shall: (i) 
Make a copy of this part available at his office for inspection during 
normal working hours by any person asking for it, and (ii) conspicuously 
display a sign, or signs, furnished by the FAA, in the main public area 
or areas of the airport, stating that discrimination based on race, 
color, or national origin is prohibited on the airport.
    (3) Reports. Each airport owner subject to this part shall, within 
15 days after he receives it, forward to the Area Manager of the FAA 
Area in which the airport is located a copy of each written complaint 
charging discrimination because of race, color, or national origin by 
any person subject to this part, together with a statement describing 
all actions taken to resolve the matter, and the results thereof. Each 
airport operator shall submit to the area manager of the FAA area in 
which the airport is located a report for the preceding year on the date 
and in a form prescribed by the Federal Aviation Administrator.

[35 FR 10080, June 18, 1970, as amended by Amdt. 21-1, 38 FR 5875, Mar. 
5, 1973; Amdt. 21-3, 40 FR 14318, Mar. 31, 1975]



PART 22_SHORT-TERM LENDING PROGRAM (STLP)--Table of Contents



                            Subpart A	General

22.1 Purpose.
22.3 Definitions.

                Subpart B_Policies applying to STLP loans

22.11 Eligibility criteria.
22.13 Loan terms and conditions.
22.15 Delinquency on Federal, State, and Municipal debt.
22.17 Compliance with child support obligations.
22.19 Credit criteria.

[[Page 200]]

                     Subpart C_Participating Lenders

22.21 Participation criteria.
22.23 Agreements.
22.25 Lender deliverables and delivery schedule.
22.27 Eligible reimbursements to participating lenders.
22.29 DOT access to participating lender files.
22.31 Suspension or revocation of eligibility to participate.
22.33 Termination of participation in the STLP.

                   Subpart D_Loan Application Process

22.41 Application procedures.
22.43 Approvals and denials.
22.45 Allowable fees to borrowers.

                      Subpart E_Loan Administration

22.51 Loan closings.
22.53 Loan monitoring & Servicing requirements.
22.57 Loan reporting requirements.
22.59 Loan modifications.
22.61 Loan guarantee extensions.
22.63 Loan close outs.
22.65 Subordination.
22.67 Delinquent loans and loan defaults.
22.69 Claims process.

    Authority: 49 U.S.C. 332.

    Source: 75 FR 19290, Apr. 14, 2010, unless otherwise noted.



                            Subpart A_General



Sec. 22.1  Purpose.

    The purpose of the DOT OSDBU STLP is to provide financial assistance 
in the form of short-term loans from Participating Lenders that are 
guaranteed by DOT OSDBU, to DBEs and SDBs for the execution of DOT 
funded and supported transportation-related contracts.



Sec. 22.3  Definitions.

    As used in this part:
    Accounts receivable means monies that are due to the borrower for 
work performed or services rendered under a contract, subcontract, or 
purchase order.
    Activation date means the date that the STLP loan is established on 
the Participating Lender's books and recorded as an open loan. It is 
also the date that the borrower can begin to drawn funds from the line 
of credit. Activation date is also the date in which the DOT OSDBU 
guarantee becomes effective.
    Assigned contract means the transportation-related contract(s), 
subcontract(s), and/or purchase order(s) that has been pledged as 
collateral to a STLP loan and perfected through an assignment form 
executed by all appropriate parties.
    Borrower is the obligor of a DOT OSDBU guaranteed loan.
    Cooperative agreement is the written agreement between DOT OSDBU and 
a Participating Lender that outlines the terms and conditions under 
which the lender may submit eligible loan requests to DOT OSDBU for 
consideration of its loan guarantee. The cooperative agreement further 
outlines the responsibilities and requirements of the lender in order to 
participate in the STLP.
    Director means Director, Office of Small and Disadvantaged Business 
Utilization, U.S. Department of Transportation.
    Disadvantaged business enterprise or DBE means a business that is 
certified as such by a recipient of DOT financial assistance as provided 
in 49 CFR part 23 or 49 CFR part 26.
    Guarantee agreement means DOT OSDBU's written agreement with a 
Participating Lender that provides the terms and conditions under which 
DOT OSDBU will guarantee a STLP loan. It is not a contract to make a 
direct loan to the borrower.
    Loan guarantee means the agreement of DOT OSDBU to issue a guarantee 
of payment of a specified portion of an approved STLP loan to the 
Participating Lender, under DOT OSDBU stated terms and conditions, in 
the event that the borrower defaults on the loan.
    Loan purpose means the approved uses for STLP loan proceeds. That 
is, only for short-term working capital needs related to the direct 
costs of an eligible transportation-related contract.
    Other eligible certifications mean the following certifications 
obtained by a borrower through the U.S. Small Business Administration 
(SBA): Small Disadvantaged Business (SDB); Section 8(a) Program 
participant; HUBZONE Empowerment Contracting Program;

[[Page 201]]

and Service-Disabled Veteran Program (SDV).
    Participating Lender (PL) is a bank or other lending institution 
that has agreed to the terms of a cooperative agreement and has been 
formally accepted into the STLP by DOT OSDBU.
    Small and disadvantaged business (SDB) includes 8(a); small 
disadvantaged business; women-owned business, HubZone, and service-
disabled veteran-owned business.
    Socially and economically disadvantaged individual has the same 
meaning as stated in 49 CFR 26.5.
    Technical assistance means service provided by the Participating 
Lender to the DBE or SDB that will enable the DBE or SDB to become more 
capable of managing its transportation-related contracts. Technical 
assistance can be provided by collaborating with agencies that offer 
small business management counseling such as the SBA, the U. S. 
Department of Commerce's Minority Business Development Centers (MBDCs), 
the Service Corps of Retired Executives (SCORE), Procurement Technical 
Assistance Centers (PTACs), and Small Business Development Centers 
(SBDCs).
    Transportation-related contract means a contract, subcontract, or 
purchase order, at any tier, for the maintenance, rehabilitation, 
restructuring, improvement, or revitalization of any of the nation's 
modes of transportation that receive DOT funding.
    Work-out means a plan that offers options to avoid loan default or 
collateral foreclosure and/or liquidation that is intended to resolve 
delinquent loans or loans in imminent default, which may include, but 
not limited to: deferring or forgiving principal or interest, reducing 
the borrower's interest rate, extending the loan maturity and the 
government guarantee to the Participating Lender, or postponing 
collection action.



                Subpart B_Policies Applying to STLP Loans



Sec. 22.11  Eligibility criteria.

    (a) Eligible Borrower. To be eligible to apply for a STLP loan 
guarantee, a borrower must meet the following requirements:
    (1) Be a for-profit entity;
    (2) Have an eligible transportation-related contract;
    (3) Demonstrate an eligible use for the desired credit;
    (4) Be an established business with experience in the transportation 
industry and trade for which the STLP loan is sought;
    (5) Be certified as a DBE or have another eligible certification 
issued by the SBA; and
    (6) Be current on all federal, state, and local tax liabilities.
    (b) Eligible Transportation-Related Contract. Any fully-executed 
transportation-related contract, subcontract, or purchase order held 
directly with DOT or with grantees and recipients receiving federal 
funding from DOT for the maintenance, rehabilitation, restructuring, 
improvement or revitalization of any of the nation's modes of 
transportation shall be considered an eligible contract.
    (c) Eligibility Period. A borrower is eligible for participation in 
the STLP for a period up to a total of five (5) years. The STLP renewal 
is not automatic. The borrower has to demonstrate its continued 
eligibility and creditworthiness for STLP and must submit a complete 
application package.
    (1) The continued eligibility of any borrower who would exceed the 
period limit in paragraph (c) of this section will be determined on a 
case-by-case basis by the OSDBU Director and is subject to the following 
provisions:
    (i) The STLP loan guarantee may be reduced; and
    (ii) The STLP loan interest rate may be increased.
    (2) Should any borrower currently in the STLP become ineligible per 
paragraph (a) of this section during the term of a STLP loan, the 
failure to comply with a specific requirement must be brought to the 
immediate attention of all remaining parties.
    (3) Borrower ineligibility may result in a termination of the 
current guarantee.



Sec. 22.13  Loan terms and conditions.

    (a) Amount. The maximum face amount for an individual STLP loan may 
not exceed seven hundred and fifty thousand ($750,000) dollars, unless 
the

[[Page 202]]

requested increased amount is authorized by the OSDBU Director.
    (b) Interest Rates. All STLP loans shall have a variable interest 
rate.
    (1) Initial Interest Rate. The base rate guideline for STLP loans is 
the prime rate in effect on the first business day of the month in which 
the STLP loan guarantee is approved by DOT OSDBU. The prime rate is the 
rate printed in a national financial newspaper published each business 
day. The Participating Lender may increase the base rate by the maximum 
allowable percentage points currently allowed by STLP policies and 
procedures and as communicated in subsequent DOT OSDBU notices.
    (2) Frequency of Change. The first change may occur on the first 
calendar day of the month following the initial loan disbursement, using 
the above base rate in effect on the first business day of the month. 
Subsequent interest rate changes may occur no more than monthly.
    (c) Loan Structure and Term. A STLP loan shall be set up as a 
revolving line of credit. The line permits the borrower to request 
principal advances, pay them back, and then re-borrow, not to exceed the 
face value of the line of credit. Participating Lenders are required to 
provide DOT OSDBU written notification of the activation date of each 
line of credit under the STLP. The term of the Federal guarantee of the 
line of credit commences on the activation date.
    (d) Repayment. Interest payments must be made monthly. The principal 
of the loan is repaid as payment from approved accounts receivable are 
received by the Participating Lender through a joint payee check system. 
The assigned contract supporting the STLP loan is the primary source of 
repayment.
    (e) Use of Loan Proceeds. STLP loans must be used to finance short-
term working capital needs, specifically direct costs generated by the 
assigned contract. Proceeds may not be used for the following purposes:
    (1) For long term working capital;
    (2) To repay delinquent State or Federal withholding taxes, local 
taxes, sales taxes or similar funds that should be held in trust or 
escrow; and/or
    (3) To provide funds for the distribution or payment to the owners, 
partners or shareholders of the business; and/or
    (4) To retire short or long-term debt.
    (f) Non-compliance by the DBE in using the STLP loan for purposes 
not consistent with these regulations will result in a non-renewal of 
the STLP loan and in forfeiture of the STLP loan guarantee to the PL on 
any ineligible principal advances requested by the borrower and made by 
the PL.
    (g) Disbursements. STLP funds may only be released to an eligible 
borrower upon the submission and verification of a valid written 
accounts receivable invoice, showing labor and/or materials amounts due 
for completed work on the contract. The Participating Lender must verify 
the accuracy of the invoice with the paying transportation government 
agency, if the borrower is a prime contractor, and/or with the prime 
contractor, if the borrower is a subcontractor. This verification must 
be obtained by the Participating Lender prior to advancing funds. No 
more than 85% of an approved accounts receivable invoice shall be 
advanced to the borrower by the Participating Lender.
    (1) Processing time. Disbursement of STLP funds to the borrower 
should be accomplished within three (3) business days of an accounts 
receivable invoice approval by the paying agency and/or prime 
contractor.
    (2) Electronic funds transfer. If the disbursement of STLP funds is 
being sent to the borrower through a local Participating Lender, the 
disbursement should be made by electronic funds transfer with the 
preferred method of payment being the Automated Clearing House (ACH) 
system.
    (3) Wire transfers. Wire transfers can be used if the ACH system is 
not available or if a same day disbursement is required.
    (4) Joint payee check system. A two-party payee check system is 
required in which the Participating Lender and the borrower will be the 
co-payees of any checks paid to the borrower for performance under the 
assigned contract. Alternative payment methods must have prior written 
approval by DOT OSDBU.

[[Page 203]]

    (h) Personal Guarantees. Individuals who own at least a 20% 
ownership interest in the borrower shall personally guarantee the STLP 
loan. DOT OSDBU, in its discretion and in consulting with the 
Participating Lender, may require other appropriate guarantees for the 
loan as well.
    (i) Collateral. All advances under the STLP loan must be secured, at 
a minimum, by the assignment of the proceeds due under the 
transportation-related contract(s) being funded with loan proceeds (the 
Assigned Contract). The Participating Lender must have first lien 
position on the Accounts Receivable generated by the Assigned Contract. 
The Participating Lender and/or DOT OSDBU may request additional 
collateral on any loan request or loan guarantee request in order to 
mitigate the credit risk and reduce potential defaults and loan losses.
    (j) Key Person Life Insurance. The assignment of existing life 
insurance policies of personal guarantors or other individuals critical 
to the borrower's operations may be required by the Participating Lender 
and/or DOT OSDBU in certain instances; and it is encouraged for those 
business applicants that do not have a management succession plan 
clearly in place or where a personal guarantee provides nominal 
financial strength to the credit.



Sec. 22.15  Delinquency on Federal, State, or Municipality Debt.

    (a) The borrower must not be delinquent on any Federal, State, or 
municipality debt, including tax debts. Further, none of the principals 
and/or owners of the borrower can be delinquent on any Federal, State, 
or municipality debt, including personal tax debt. The borrower must 
acknowledge its status in writing as part of any STLP loan guarantee 
application. Participating Lenders and the DOT OSDBU must verify the 
borrower's status through the use of business and personal credit 
reports, as well as other appropriate Federal and State databases.
    (b) If any delinquencies are determined during the application 
process, consideration of the request must be suspended until the 
delinquency is satisfactorily resolved, as determined and approved by 
the Director. If the delinquency cannot be resolved within a reasonable 
amount of time, the loan request must be declined.



Sec. 22.17  Compliance with child support obligations.

    Any holder of 50% or more of the ownership interest in the recipient 
of a STLP Loan must certify that he or she is not more than 60 days 
delinquent on any obligation to pay child support arising under:
    (a) An administrative order;
    (b) A court order;
    (c) A repayment agreement between the holder and a custodial parent; 
or
    (d) A repayment agreement between the holder and a State agency 
providing child support enforcement services.



Sec. 22.19  Credit criteria.

    An applicant for a STLP loan must be creditworthy and demonstrate an 
ability to repay the loan as well as satisfactory handling of the 
repayment of past and current debts. The Participating Lender and DOT 
OSDBU shall consider:
    (a) Character, reputation, and credit history of the applicant, its 
principals and owners, and all other guarantors;
    (b) Experience and depth of key management in the industry;
    (c) Financial strength of the business;
    (d) Past earnings, projected earnings and cash flow, and work in 
progress;
    (e) Ability to repay the loan;
    (f) Sufficient equity to operate on a sound financial basis; and
    (g) Capacity to perform under the transportation-related 
contract(s).



                     Subpart C_Participating Lenders



Sec. 22.21  Participation criteria.

    A lender who participates in the STLP must meet the following 
criteria:
    (a) It must operate as a lending institution certified by the 
Federal Deposit Insurance Corporation (FDIC), Federal Reserve Board, 
Office of the Comptroller of the Currency, Office of Thrift Supervision, 
Community Development

[[Page 204]]

Corporation (CDC), or Community Development Financial Institution 
(CDFI), for at least five (5) years;
    (b) It must demonstrate a philosophy and history of lending to 
small, disadvantaged and women-owned businesses in their communities. 
Information will be requested by the Director on the number of short-
term loans made to companies listed in paragraph (a)(5) of Sec. 22.11. 
The Participating Lender shall submit information showing its efforts in 
relationship to its overall portfolio;
    (c) It must demonstrate experience in administering monitored lines 
of credit, such as construction loans, accounts receivable financing, 
and/or contract financing for at least two years. Such experience should 
be held by any Participating Lender representative managing, reviewing 
or authorizing STLP loan portfolios;
    (d) It must have at least two (2) years experience with other 
federal government lending programs such as U.S. Small Business 
Administration (SBA), Agriculture Rural Development, Bureau of Indian 
Affairs (BIA), Economic Development Administration (EDA), Department of 
Housing and Urban Development (HUD), Export Import Bank of the United 
States and/or state loan programs.
    (e) It must have at least a satisfactory or better Community 
Reinvestment Act (CRA) rating;
    (f) It must designate a Participating Lender representative to 
effectively administer the STLP loan portfolio;
    (g) It must have the ability to evaluate, process, close, disburse, 
service and liquidate STLP loans;
    (h) It must demonstrate the ability to implement, monitor and manage 
a two-party payee check system, in which the Participating Lender and 
borrower are joint payees of any checks paid to the borrower for 
performance under the assigned contract(s);
    (i) It must not currently be debarred or suspended from 
participation in a government contract or delinquent on a government 
debt. The Participating lender must submit a current form DOT F 2309-1 
Certification Regarding Debarment, Suspension. The certification form is 
available at http://www.osdbu.dot.gov/financial/docs/Cert--Debarment--
DOT--F--2309-1.pdf.
    (j) It must be a drug-free workplace. The Participating Lender must 
execute current form DOT F 2307-1 Drug-Free Workplace Act Certification 
For A Grantee Other Than An Individual. The certification form is 
available at http://www.osdbu.dot.gov/financial/docs/Cert--Drug-Free--
DOT--F--2307-1.pdf.; and
    (k) It must certify that no Federal funds will be utilized for 
lobbying by executing a current form DOT F 2308-1 Certificate Regarding 
Lobbying For Contracts, Grants, Loans, and Cooperative Agreements in 
compliance with section 1352, title 21, of the U.S. Code. The 
certification form is available at http://www.osdbu.dot.gov/financial/
docs/Cert--Lobbying--DOT--F--2308-1.pdf.



Sec. 22.23  Agreements.

    (a) DOT OSDBU may enter into a cooperative agreement with a lender 
that meets the criteria defined in Sec. 22.21 in order for the lender 
to become a Participating Lender in the STLP. Such an agreement does not 
obligate DOT OSDBU to participate in any specific proposed loan that a 
lender may submit. The existence of a cooperative agreement does not 
limit the rights of DOT OSDBU to deny a specific loan or establish 
general policies. The current cooperative agreement is available at 
http://www.osdbu.dot.gov/financial/docs/Coop--Agreement.pdf.
    (b) The cooperative agreement is generally for a minimum period of 
twenty-four (24) months. DOT OSDBU will consider the cooperative 
agreement for renewal at the end of the designated term. If a 
cooperative agreement has expired, no further applications for the STLP 
shall be submitted to DOT OSDBU by the Participating Lender until a new 
cooperative agreement is executed by both parties.
    (c) Unless instructed otherwise by DOT OSDBU, after the expiration 
of the cooperative agreement, the Participating Lender will complete the 
documentation of any loans which have been given final DOT OSDBU 
approval prior to expiration of the cooperative agreement.

[[Page 205]]

    (d) Following the expiration of the cooperative agreement, the 
Participating Lender may, subject to the written concurrence of DOT 
OSDBU, sell its STLP loans to another bank or to another Participating 
Lender that assumes the original rights and responsibilities to fund, 
service and collect the loan or loans.



Sec. 22.25  Lender deliverables and delivery schedule.

    All Participating Lenders must adhere to certain required periodic 
reports, submissions, and other actions that are outlined in the 
cooperative agreement and the loan guarantee agreements, as well as to 
the required due dates to DOT OSDBU.



Sec. 22.27  Eligible reimbursements to participating lenders.

    Participating Lenders will be reimbursed by DOT OSDBU for reasonable 
expenses and costs that are incurred in the processing, administration, 
and monitoring of a STLP loan. The Participating Lender will be 
reimbursed as follows:
    (a) Processing/Underwriting Fee. A fee, as specified in the 
cooperative agreement will be reimbursed by DOT OSDBU, with a minimum 
fee of not less than one thousand ($1,000), per approved STLP loan 
guarantee, provided that DOT OSDBU receives proper notification of the 
activation date of the STLP loan.
    (b) Additional Administrative Fee: For total loan amounts of 
$150,000.00 or less, the Participating Lender can request an additional 
one-half (\1/2\) percent administrative fee for the increased loan 
monitoring and administrative assistance required to process the loan. 
The request must be supported with the information specified in the 
cooperative agreement.
    (c) Travel Expenses. For any pre-approved travel expenses, the 
Participating Lender will be reimbursed for certain costs, provided that 
paragraphs (c)(1) and (2) of this section are met:
    (1) A written request for travel, along with a statement of the 
purpose of the travel and proposed cost estimate, is submitted for DOT 
OSDBU for its approval no less than ten (10) business days prior to 
travel; and
    (2) A travel invoice accompanied by a written report explaining the 
findings of the travel is submitted to DOT OSDBU no later than thirty 
(30) days following the approved travel. Payment or reimbursement for 
travel shall be in accordance with the Joint Travel Regulations, Federal 
Travel Regulations and DOD FAR 31.205.46.
    (d) Attorney Fees. Legal fees incurred by the PL may be eligible for 
reimbursement. Prior written approval from DOT OSDBU is required. 
Attorney fees will be reimbursed on a pro-rata basis in proportion to 
the percentage of the government loan guarantee in relation to the total 
loan amount.



Sec. 22.29  DOT access to participating lenders files.

    A Participating Lender must allow the authorized representatives of 
DOT OSDBU, as well as representatives of the Office of Inspector General 
(OIG) and General Accountability Office (GAO), access to its STLP loan 
files to review, inspect, and copy all records and documents pertaining 
to DOT OSDBU guaranteed loans. Record retention of all relevant 
documents and other materials is specified in the cooperative agreement 
between DOT OSDBU and the Participating Lender.



Sec. 22.31  Suspension or revocation of eligibility to participate.

    (a) DOT OSDBU may suspend or revoke the eligibility of a 
Participating Lender to participate in the STLP by giving written notice 
in accordance with the terms and conditions cited in the cooperative 
agreement. Such notice may be given because of a violation of DOT OSDBU 
regulations; a breach of any agreement with DOT OSDBU; a change of 
circumstance resulting in the Participating Lender's inability to meet 
operational requirements; or a failure to engage in prudent lending 
practices. A suspension or revocation will not invalidate a loan 
guarantee previously approved by DOT OSDBU, providing that the specific 
loan was handled in accordance with its guarantee agreement, the 
cooperative agreement and/or these regulations.
    (b) The written notice to suspend or revoke participation in the 
STLP will

[[Page 206]]

specify the corrective actions that the Participating Lender must take, 
as well as the time period allowed for cure, prior to DOT OSDBU 
considering a termination of the cooperative agreement.



Sec. 22.33  Termination of participation in the STLP.

    (a) DOT OSDBU Termination for Convenience. DOT OSDBU may terminate a 
cooperative agreement for the convenience of the government, and without 
cause, upon prior written notice of thirty (30) days of its intent to 
terminate. Upon termination, DOT OSDBU shall remain liable on the pro-
rata share of the loan guarantee(s) received by the PL which received 
the Director's final approval, prior to the effective date of 
termination.
    (b) Participating Lender's Termination. The Participating Lender may 
terminate a cooperative agreement with written notice of sixty (60) days 
to DOT OSDBU of its intent to terminate. Upon termination, DOT OSDBU 
shall remain liable on the pro-rata share of the loan guarantee(s) 
received by the Participating Lender which received the Director's final 
approval, prior to the effective date of termination of the cooperative 
agreement.
    (c) DOT OSDBU Termination for Cause. DOT OSDBU may terminate a 
cooperative agreement, in whole or in part, at any time before the 
expiration of the term of the cooperative agreement or the expiration of 
any renewal term of the cooperative agreement, and without allowing any 
cure period as described in this section, if it determines that the 
Participating Lender failed to comply with any terms and conditions of 
its cooperative agreement and such failure cannot be reasonably 
addressed. DOT OSDBU shall promptly notify the Participating Lender in 
writing of this determination and the reasons for the termination, 
together with the effective date of termination.
    (d) DOT OSDBU may also terminate for cause any cooperative agreement 
with a Participating Lender that fails to comply with the corrective 
actions requested in a written notice of suspension of revocation within 
the specified cure period, in accordance with the terms and conditions 
further described in the cooperative agreement.



                   Subpart D_Loan Application Process



Sec. 22.41  Application procedures.

    (a) A STLP loan guarantee request application package shall consist 
of the DOT OSDBU Application for Loan Guarantee and supporting 
documentation as outlined below at paragraph (b) of this section. The 
application may be obtained directly from the office of DOT OSDBU, from 
a current Participating Lender, or online from the agency's Web site, 
currently at http://osdbu.dot.gov/documents/pdf/stlp/stlpapp.pdf.
    (b) Supporting documentation may include, but is not limited to, the 
following items: Business, trade or job performance reference letters; 
current DBE or SDB eligibility certification letters and/or affidavit; 
signed and dated borrower certification that all federal, state and 
local taxes are current; business tax returns; business financial 
statements; personal income tax returns; personal financial statements; 
schedule of work in progress; signed and dated copy of transportation-
related contracts; business debt schedule; income and cash flow 
projections; and evidence of bonding and insurance. It also includes, 
from the Participating Lender, the lender's internal credit approval 
memo and analysis and other third-party credit verifications obtained.
    (c) Application packages are submitted directly to a Participating 
Lender, which will perform its own credit review. The Participating 
Lender must initially approve or decline the loan based upon its 
internal analysis of the request. Loans approved by the Participating 
Lender are then forwarded to DOT OSDBU for its STLP eligibility review, 
independent credit review, and for presentation to the DOT OSDBU Loan 
Committee. All loan approvals shall require the final approval of the 
Director, or the Director's designee, for the issuance of a Government 
Loan Guarantee.

[[Page 207]]



Sec. 22.43  Approval or denial.

    If a loan guarantee is approved by DOT OSDBU, a Guarantee Agreement, 
form DOT F 2314-1, will be issued to the Participating Lender. If a loan 
guarantee is declined by the Participating Lender, the Participating 
Lender is responsible for communicating the reasons for the decline to 
the applicant. The Participating Lender must notify the applicant, in 
writing, of the reasons for the decline; and a copy of this notification 
must be sent to DOT OSDBU. If a loan guarantee is declined by the DOT 
OSDBU, DOT OSDBU will be responsible for communicating the reasons for 
the decline to the applicant. The form is available at http://
www.osdbu.dot.gov/financial/docs/Loan--Guarantee--DOT--F--2314-1.pdf.



Sec. 22.45  Allowable fees to borrowers.

    (a) Application Fees. The Participating Lender may charge the 
applicant a non-refundable loan application fee, as determined from time 
to time by DOT OSDBU, for each STLP loan application processed, whether 
a new loan request or a renewal request.
    (b) Reasonable Closing Expenses. Provided the Participating Lender 
charges similar fees to its non-STLP borrowers, the Participating Lender 
may collect reasonable closing expenses from the borrower, provided that 
full disclosure of such fees is made to the borrower prior to the loan 
closing date. These expenses include necessary out-of-pocket expenses to 
third parties such as filing and recordation fees, as well as loan 
closing document preparation fees.



                      Subpart E-Loan Administration



Sec. 22.51  Loan closings.

    (a) The Participating Lender must promptly close all STLP loans in 
accordance with the terms and conditions approved by DOT OSDBU in its 
Guarantee Agreement. The Participating Lender must report circumstances 
concerning any STLP loans not closed within a reasonable time period 
after DOT OSDBU approval.
    (b) The Participating Lender uses its own internal loan closing 
documents and must use standard banking practices and procedures to 
ensure proper execution of the debt and perfection of the collateral. 
The Participating Lender must forward copies of all executed closing 
documents and filings to DOT OSDBU within the time period specified in 
the cooperative agreement.



Sec. 22.53  Loan monitoring and servicing requirements.

    The Participating Lender must review STLP principal advance 
requests, process loan disbursements, and payments, and maintain contact 
with the borrower during the term of the loan. The Participating Lender 
must monitor the progress of the project being financed and the 
borrower's continued compliance with the terms and conditions of the 
loan. The Participating Lender must promptly report any material adverse 
change in the financial condition or business operations of the borrower 
to DOT OSDBU.



Sec. 22.57  Loan reporting requirements.

    The STLP is subject to the requirements of the Federal Credit Reform 
Act of 1990 (FCRA) that includes certain budgeting and accounting 
requirements for Federal credit programs. To fulfill the requirements of 
FCRA, the Participating Lender must provide DOT OSDBU prompt written 
notification of the activation date by the time period specified in the 
cooperative agreement. The Participating Lender must submit to OSDBU a 
form DOT F 2303-1 Bank Verification Loan Activation Form that indicates 
the date in which the loan has been activated/funded. The form is 
available at http://www.osdbu.dot.gov/financial/docs/Loan--Activation--
DOT--F--2303-1.pdf. The Participating Lender must also provide DOT OSDBU 
prompt written notification of the date the loan is repaid and closed. 
The Participating Lender must submit to OSDBU a form DOT F 2304-1 Bank 
Acknowledgement Loan Close-Out Form upon full repayment of the STLP 
loan, or upon expiration of the loan guarantee. The form is available at 
http://www.osdbu.dot.gov/financial/docs/Loan--Close-Out--DOT--F--2304-
1.pdf. To fulfill this requirement, the Participating Lender must also 
submit a monthly report to the DOT OSDBU detailing the previous

[[Page 208]]

month's activity for their STLP loans. The Participating Lender must 
submit form DOT F 2306-1 Pending Loan Status Report and form DOT F 2305-
1 Guaranty Loan Status Report. These forms are available at http://
www.osdbu.dot.gov/financial/docs/Pending--Loan--DOT--F--2306-1.xls and 
http://www.osdbu.dot.gov/financial/docs/Guaranty--Loan--DOT--F--2305-
1.xls respectively.



Sec. 22.59  Loan modifications.

    Any modification to the terms of the DOT OSDBU guarantee agreement 
must have prior written approval of the Director, and executed in 
writing as an Addendum to the original guarantee agreement.



Sec. 22.61  Loan guarantee extensions.

    An extension of the original loan guarantee may be requested, in 
writing, by the Participating Lender. The Participating lender must 
submit to OSDBU a form DOT F 2310-1 to request an extension of the 
original loan guarantee for a maximum period of ninety (90) days. The 
form is available at http://www.osdbu.dot.gov/financial/docs/Loan--
Extension--DOT--F--2310-1.pdf. The request must comply with the terms 
and conditions described in the guarantee agreement and with the STLP 
policies and procedures. All extension requests must be approved by the 
Director.



Sec. 22.63  Loan close outs.

    Upon full repayment of the STLP loan, or upon expiration of the loan 
guarantee, the Participating Lender must submit to OSDBU a form DOT F 
2304-1 Bank Acknowledgement Loan Close-Out Form. The form is available 
at http://www.osdbu.dot.gov/financial/docs/Loan--Close-Out--DOT--F--
2304-1.pdf.



Sec. 22.65  Subordination.

    DOT OSDBU must not be placed in a subordinate position to any other 
debt.



Sec. 22.67  Delinquent loans and loan defaults.

    (a) The Participating Lender must bring to the immediate attention 
of the Director any delinquent STLP loans. The Participating Lender and 
DOT OSDBU are jointly responsible for establishing collection procedures 
and must exercise due diligence with respect to collection of delinquent 
debt. The Participating Lender is responsible for initiating actions to 
recover such debt. DOT OSDBU must approve any compromise of a claim, 
resolution of a dispute, suspension or termination of collection action, 
or referral for litigation. A work-out solution will only be considered 
if it is expected to minimize the cost to the federal government in 
resolving repayment delinquencies and/or loan default. They must only be 
used when the borrower is likely to be able to repay the loan under the 
terms of the work-out, and if the cost of establishing the work-out plan 
is less than the costs of loan default and/or foreclosure.
    (b) In an appropriate situation, DOT OSDBU may authorize the 
Participating Lender to undertake legal action deemed necessary to 
collect delinquent loans and DOT will reimburse the Participating Lender 
on a pro rata basis in proportion to the loan guarantee percentage for 
the associated fees and costs, with prior authorization from the 
Director. Penalties and late fees are not eligible for reimbursement. 
Any legal action undertaken by the Participating Lender without OSDBU 
authorization will not be eligible for a pro rata basis reimbursement of 
the associated fees and costs. Net recoveries applicable to accrued 
interest must be applied on a pro rata basis in proportion to the 
formula used during the term of the loan.



Sec. 22.69  Claim process.

    After reasonable efforts have been exhausted to collect on a 
delinquent debt, the Participating Lender may demand in writing that DOT 
OSDBU honor its loan guarantee, provided however that the maximum 
liability of DOT OSDBU shall not at any time exceed the guaranteed 
amount. The borrower must be in default for no less than thirty (30) 
days, and the Participating Lender must have made written demand for 
payment from the borrower, in accordance with the guarantee agreement.

[[Page 209]]



PART 23_PARTICIPATION OF DISADVANTAGED BUSINESS ENTERPRISE IN AIRPORT 
CONCESSIONS--Table of Contents



                            Subpart A_General

Sec.
23.1 What are the objectives of this part?
23.3 What do the terms used in this part mean?
23.5 To whom does this part apply?
23.7 Program reviews.
23.9 What are the nondiscrimination and assurance requirements of this 
          part for recipients?
23.11 What compliance and enforcement provisions are used under this 
          part?
23.13 How does the Department issue guidance, interpretations, 
          exemptions, and waivers pertaining to this part?

                        Subpart B_ACDBE programs

23.21 Who must submit an ACDBE program to FAA, and when?
23.23 What administrative provisions must be in a recipient's ACDBE 
          program?
23.25 What measures must recipients include in their ACDBE programs to 
          ensure nondiscriminatory participation of ACDBEs in 
          concessions?
23.27 What information does a recipient have to retain and report about 
          implementation of its ACDBE program?
23.29 What monitoring and compliance procedures must recipients follow?

                    Subpart C_Certification of ACDBEs

23.31 What certification standards and procedures do recipients use to 
          certify ACDBEs?
23.33 What size standards do recipients use to determine the eligibility 
          of ACDBEs?
23.35 What is the personal net worth standard for disadvantaged owners 
          of ACDBEs?
23.37 Are firms certified under 49 CFR part 26 eligible to participate 
          as ACDBEs?
23.39 What other certification requirements apply in the case of ACDBEs?

            Subpart D_Goals, Good Faith Efforts, and Counting

23.41 What is the basic overall goal requirement for recipients?
23.43 What are the consultation requirements in the development of 
          recipients' overall goals?
23.45 What are the requirements for submitting overall goal information 
          to the FAA?
23.47 What is the base for a recipient's goals for concessions other 
          than car rentals?
23.49 What is the base for a recipient's goals for car rentals?
23.51 How are a recipient's overall goals expressed and calculated?
23.53 How do car rental companies count ACDBE participation toward their 
          goals?
23.55 How do recipients count ACDBE participation toward goals for items 
          other than car rentals?
23.57 What happens if a recipient falls short of meeting its overall 
          goals?
23.59 What is the role of the statutory 10 percent goal in the ACDBE 
          program?
23.61 Can recipients use quotas or set-asides as part of their ACDBE 
          programs?

                       Subpart E_Other Provisions

23.71 Does a recipient have to change existing concession agreements?
23.73 What requirements apply to privately-owned or leased terminal 
          buildings?
23.75 Can recipients enter into long-term, exclusive agreements with 
          concessionaires?
23.77 Does this part preempt local requirements?
23.79 Does this part permit recipients to use local geographic 
          preferences?

Appendix A to Part 23--Uniform Report of ACDBE Participation

    Authority: 49 U.S.C. 47107; 42 U.S.C. 2000d; 49 U.S.C. 322; 
Executive Order 12138.

    Source: 70 FR 14508, Mar. 22, 2005, unless otherwise noted.



                            Subpart A_General



Sec. 23.1  What are the objectives of this part?

    This part seeks to achieve several objectives:
    (a) To ensure nondiscrimination in the award and administration of 
opportunities for concessions by airports receiving DOT financial 
assistance;
    (b) To create a level playing field on which ACDBEs can compete 
fairly for opportunities for concessions;
    (c) To ensure that the Department's ACDBE program is narrowly 
tailored in accordance with applicable law;
    (d) To ensure that only firms that fully meet this part's 
eligibility standards are permitted to participate as ACDBEs;
    (e) To help remove barriers to the participation of ACDBEs in 
opportunities for concessions at airports receiving DOT financial 
assistance; and

[[Page 210]]

    (f) To provide appropriate flexibility to airports receiving DOT 
financial assistance in establishing and providing opportunities for 
ACDBEs.



Sec. 23.3  What do the terms used in this part mean?

    Administrator means the Administrator of the Federal Aviation 
Administration (FAA).
    Affiliation has the same meaning the term has in the Small Business 
Administration (SBA) regulations, 13 CFR part 121, except that the 
provisions of SBA regulations concerning affiliation in the context of 
joint ventures (13 CFR Sec. 121.103(f)) do not apply to this part.
    (1) Except as otherwise provided in 13 CFR part 121, concerns are 
affiliates of each other when, either directly or indirectly:
    (i) One concern controls or has the power to control the other; or
    (ii) A third party or parties controls or has the power to control 
both; or
    (iii) An identity of interest between or among parties exists such 
that affiliation may be found.
    (2) In determining whether affiliation exists, it is necessary to 
consider all appropriate factors, including common ownership, common 
management, and contractual relationships. Affiliates must be considered 
together in determining whether a concern meets small business size 
criteria and the statutory cap on the participation of firms in the 
ACDBE program.
    Airport Concession Disadvantaged Business Enterprise (ACDBE) means a 
concession that is a for-profit small business concern--
    (1) That is at least 51 percent owned by one or more individuals who 
are both socially and economically disadvantaged or, in the case of a 
corporation, in which 51 percent of the stock is owned by one or more 
such individuals; and
    (2) Whose management and daily business operations are controlled by 
one or more of the socially and economically disadvantaged individuals 
who own it.
    Alaska Native Corporation (ANC) means any Regional Corporation, 
Village Corporation, Urban Corporation, or Group Corporation organized 
under the laws of the State of Alaska in accordance with the Alaska 
Native Claims Settlement Act (43 U.S.C. 1601 et seq.)
    Car dealership means an establishment primarily engaged in the 
retail sale of new and/or used automobiles. Car dealerships frequently 
maintain repair departments and carry stocks of replacement parts, 
tires, batteries, and automotive accessories. Such establishments also 
frequently sell pickup trucks and vans at retail. In the standard 
industrial classification system, car dealerships are categorized in 
NAICS code 441110.
    Concession means one or more of the types of for-profit businesses 
listed in paragraph (1) or (2) of this definition:
    (1) A business, located on an airport subject to this part, that is 
engaged in the sale of consumer goods or services to the public under an 
agreement with the recipient, another concessionaire, or the owner or 
lessee of a terminal, if other than the recipient.
    (2) A business conducting one or more of the following covered 
activities, even if it does not maintain an office, store, or other 
business location on an airport subject to this part, as long as the 
activities take place on the airport: Management contracts and 
subcontracts, a web-based or other electronic business in a terminal or 
which passengers can access at the terminal, an advertising business 
that provides advertising displays or messages to the public on the 
airport, or a business that provides goods and services to 
concessionaires.

    Example to paragraph (2): A supplier of goods or a management 
contractor maintains its office or primary place of business off the 
airport. However the supplier provides goods to a retail establishment 
in the airport; or the management contractor operates the parking 
facility on the airport. These businesses are considered concessions for 
purposes of this part.

    (3) For purposes of this subpart, a business is not considered to be 
``located on the airport'' solely because it picks up and/or delivers 
customers under a permit, license, or other agreement. For example, 
providers of taxi, limousine, car rental, or hotel services are not 
considered to be located on the airport just because they send shuttles

[[Page 211]]

onto airport grounds to pick up passengers or drop them off. A business 
is considered to be ``located on the airport,'' however, if it has an 
on-airport facility. Such facilities include in the case of a taxi 
operator, a dispatcher; in the case of a limousine, a booth selling 
tickets to the public; in the case of a car rental company, a counter at 
which its services are sold to the public or a ready return facility; 
and in the case of a hotel operator, a hotel located anywhere on airport 
property.
    (4) Any business meeting the definition of concession is covered by 
this subpart, regardless of the name given to the agreement with the 
recipient, concessionaire, or airport terminal owner or lessee. A 
concession may be operated under various types of agreements, including 
but not limited to the following:
    (i) Leases.
    (ii) Subleases.
    (iii) Permits.
    (iv) Contracts or subcontracts.
    (v) Other instruments or arrangements.
    (5) The conduct of an aeronautical activity is not considered a 
concession for purposes of this subpart. Aeronautical activities include 
scheduled and non-scheduled air carriers, air taxis, air charters, and 
air couriers, in their normal passenger or freight carrying capacities; 
fixed base operators; flight schools; recreational service providers 
(e.g., sky-diving, parachute-jumping, flying guides); and air tour 
services.
    (6) Other examples of entities that do not meet the definition of a 
concession include flight kitchens and in-flight caterers servicing air 
carriers, government agencies, industrial plants, farm leases, 
individuals leasing hangar space, custodial and security contracts, 
telephone and electric service to the airport facility, holding 
companies, and skycap services under contract with an air carrier or 
airport.
    Concessionaire means a firm that owns and controls a concession or a 
portion of a concession.
    Department (DOT) means the U.S. Department of Transportation, 
including the Office of the Secretary and the Federal Aviation 
Administration (FAA).
    Direct ownership arrangement means a joint venture, partnership, 
sublease, licensee, franchise, or other arrangement in which a firm owns 
and controls a concession.
    Good faith efforts means efforts to achieve an ACDBE goal or other 
requirement of this part that, by their scope, intensity, and 
appropriateness to the objective, can reasonably be expected to meet the 
program requirement.
    Immediate family member means father, mother, husband, wife, son, 
daughter, brother, sister, grandmother, grandfather, grandson, 
granddaughter, mother-in-law, father-in-law, brother-in-law, sister-in-
law, or registered domestic partner.
    Indian tribe means any Indian tribe, band, nation, or other 
organized group or community of Indians, including any ANC, which is 
recognized as eligible for the special programs and services provided by 
the United States to Indians because of their status as Indians, or is 
recognized as such by the State in which the tribe, band, nation, group, 
or community resides. See definition of ``tribally-owned concern'' in 
this section.
    Joint venture means an association of an ACDBE firm and one or more 
other firms to carry out a single, for-profit business enterprise, for 
which the parties combine their property, capital, efforts, skills and 
knowledge, and in which the ACDBE is responsible for a distinct, clearly 
defined portion of the work of the contract and whose shares in the 
capital contribution, control, management, risks, and profits of the 
joint venture are commensurate with its ownership interest. Joint 
venture entities are not certified as ACDBEs.
    Large hub primary airport means a commercial service airport that 
has a number of passenger boardings equal to at least one percent of all 
passenger boardings in the United States.
    Management contract or subcontract means an agreement with a 
recipient or another management contractor under which a firm directs or 
operates one or more business activities, the assets of which are owned, 
leased, or otherwise controlled by the recipient. The managing agent 
generally receives, as

[[Page 212]]

compensation, a flat fee or a percentage of the gross receipts or profit 
from the business activity. For purposes of this subpart, the business 
activity operated or directed by the managing agent must be other than 
an aeronautical activity, be located at an airport subject to this 
subpart, and be engaged in the sale of consumer goods or provision of 
services to the public.
    Material amendment means a significant change to the basic rights or 
obligations of the parties to a concession agreement. Examples of 
material amendments include an extension to the term not provided for in 
the original agreement or a substantial increase in the scope of the 
concession privilege. Examples of nonmaterial amendments include a 
change in the name of the concessionaire or a change to the payment due 
dates.
    Medium hub primary airport means a commercial service airport that 
has a number of passenger boardings equal to at least 0.25 percent of 
all passenger boardings in the United States but less than one percent 
of such passenger boardings.
    Native Hawaiian means any individual whose ancestors were natives, 
prior to 1778, of the area that now comprises the State of Hawaii.
    Native Hawaiian Organization means any community service 
organization serving Native Hawaiians in the State of Hawaii that is a 
not-for-profit organization chartered by the State of Hawaii, and is 
controlled by Native Hawaiians
    Noncompliance means that a recipient has not correctly implemented 
the requirements of this part.
    Nonhub primary airport means a commercial service airport that has 
more than 10,000 passenger boardings each year but less than 0.05 
percent of all passenger boardings in the United States.
    Part 26 means 49 CFR part 26, the Department of Transportation's 
disadvantaged business enterprise regulation for DOT-assisted contracts.
    Personal net worth means the net value of the assets of an 
individual remaining after total liabilities are deducted. An 
individual's personal net worth (PNW) does not include the following:
    (1) The individual's ownership interest in an ACDBE firm or a firm 
that is applying for ACDBE certification; (2) The individual's equity in 
his or her primary place of residence; and (3) Other assets that the 
individual can document are necessary to obtain financing or a franchise 
agreement for the initiation or expansion of his or her ACDBE firm (or 
have in fact been encumbered to support existing financing for the 
individual's ACDBE business) to a maximum of $3 million. The 
effectiveness of this paragraph (3) of this definition is suspended with 
respect to any application for ACDBE certification made or any financing 
or franchise agreement obtained after June 20, 2012.
    Primary airport means a commercial service airport that the 
Secretary determines to have more than 10,000 passengers enplaned 
annually.
    Primary industry classification means the North American Industrial 
Classification System (NAICS) code designation that best describes the 
primary business of a firm. The NAICS Manual is available through the 
National Technical Information Service (NTIS) of the U.S. Department of 
Commerce (Springfield, VA, 22261). NTIS also makes materials available 
through its Web site (http://www.ntis.gov/naics).
    Primary recipient means a recipient to which DOT financial 
assistance is extended through the programs of the FAA and which passes 
some or all of it on to another recipient.
    Principal place of business means the business location where the 
individuals who manage the firm's day-to-day operations spend most 
working hours and where top management's business records are kept. If 
the offices from which management is directed and where business records 
are kept are in different locations, the recipient will determine the 
principal place of business for ACDBE program purposes.
    Race-conscious means a measure or program that is focused 
specifically on assisting only ACDBEs, including women-owned ACDBEs. For 
the purposes of this part, race-conscious measures include gender-
conscious measures.
    Race-neutral means a measure or program that is, or can be, used to 
assist

[[Page 213]]

all small businesses, without making distinctions or classifications on 
the basis of race or gender.
    Secretary means the Secretary of Transportation or his/her designee.
    Set-aside means a contracting practice restricting eligibility for 
the competitive award of a contract solely to ACDBE firms.
    Small Business Administration or SBA means the United States Small 
Business Administration.
    Small business concern means a for profit business that does not 
exceed the size standards of Sec. 23.33 of this part.
    Small hub airport means a publicly owned commercial service airport 
that has a number of passenger boardings equal to at least 0.05 percent 
of all passenger boardings in the United States but less than 0.25 
percent of such passenger boardings.
    Socially and economically disadvantaged individual means any 
individual who is a citizen (or lawfully admitted permanent resident) of 
the United States and who is--
    (1) Any individual determined by a recipient to be a socially and 
economically disadvantaged individual on a case-by-case basis.
    (2) Any individual in the following groups, members of which are 
rebuttably presumed to be socially and economically disadvantaged:
    (i) ``Black Americans,'' which includes persons having origins in 
any of the Black racial groups of Africa;
    (ii) ``Hispanic Americans,'' which includes persons of Mexican, 
Puerto Rican, Cuban, Dominican, Central or South American, or other 
Spanish or Portuguese culture or origin, regardless of race;
    (iii) ``Native Americans,'' which includes persons who are American 
Indians, Eskimos, Aleuts, or Native Hawaiians;
    (iv) ``Asian-Pacific Americans,'' which includes persons whose 
origins are from Japan, China, Taiwan, Korea, Burma (Myanmar), Vietnam, 
Laos, Cambodia (Kampuchea), Thailand, Malaysia, Indonesia, the 
Philippines, Brunei, Samoa, Guam, the U.S. Trust Territories of the 
Pacific Islands (Republic of Palau), the Commonwealth of the Northern 
Marianas Islands, Macao, Fiji, Tonga, Kiribati, Juvalu, Nauru, Federated 
States of Micronesia, or Hong Kong;
    (v) ``Subcontinent Asian Americans,'' which includes persons whose 
origins are from India, Pakistan, Bangladesh, Bhutan, the Maldives 
Islands, Nepal or Sri Lanka;
    (vi) Women;
    (vii) Any additional groups whose members are designated as socially 
and economically disadvantaged by the SBA, at such time as the SBA 
designation becomes effective.
    Recipient means any entity, public or private, to which DOT 
financial assistance is extended, whether directly or through another 
recipient, through the programs of the FAA.
    Tribally-owned concern means any concern at least 51 percent owned 
by an Indian tribe as defined in this section.
    You refers to a recipient, unless a statement in the text of this 
part or the context requires otherwise (i.e., ``You must do XYZ'' means 
that recipients must do XYZ).

[70 FR 14508, Mar. 22, 2005, as amended at 72 FR 15616, Apr. 2, 2007; 77 
FR 36931, June 20, 2012]



Sec. 23.5  To whom does this part apply?

    If you are a recipient that has received a grant for airport 
development at any time after January 1988 that was authorized under 
Title 49 of the United States Code, this part applies to you.



Sec. 23.7  Program reviews.

    In 2010, and thereafter at the discretion of the Secretary, the 
Department will initiate a review of the ACDBE program to determine 
what, if any, modifications should be made to this part.

[75 FR 16358, Apr. 1, 2010]



Sec. 23.9  What are the nondiscrimination and assurance requirements of
this part for recipients?

    (a) As a recipient, you must meet the non-discrimination 
requirements provided in part 26, Sec. 26.7 with respect to the award 
and performance of any concession agreement, management contract or 
subcontract, purchase or lease agreement, or other agreement covered by 
this subpart.

[[Page 214]]

    (b) You must also take all necessary and reasonable steps to ensure 
nondiscrimination in the award and administration of contracts and 
agreements covered by this part.
    (c) You must include the following assurances in all concession 
agreements and management contracts you execute with any firm after 
April 21, 2005:
    (1) ``This agreement is subject to the requirements of the U.S. 
Department of Transportation's regulations, 49 CFR part 23. The 
concessionaire or contractor agrees that it will not discriminate 
against any business owner because of the owner's race, color, national 
origin, or sex in connection with the award or performance of any 
concession agreement, management contract, or subcontract, purchase or 
lease agreement, or other agreement covered by 49 CFR part 23.
    (2) ``The concessionaire or contractor agrees to include the above 
statements in any subsequent concession agreement or contract covered by 
49 CFR part 23, that it enters and cause those businesses to similarly 
include the statements in further agreements.''



Sec. 23.11  What compliance and enforcement provisions are used under 
this part?

    The compliance and enforcement provisions of part 26 (Sec. Sec. 
26.101 and 26.105 through 26.109) apply to this part in the same way 
that they apply to FAA recipients and programs under part 26.

[70 FR 14508, Mar. 22, 2005, as amended at 72 FR 15616, Apr. 2, 2007]



Sec. 23.13  How does the Department issue guidance, interpretations, 
exemptions, and waivers pertaining to this part?

    (a) Only guidance and interpretations (including interpretations set 
forth in certification appeal decisions) consistent with this part 23 
and issued after April 21, 2005, express the official positions and 
views of the Department of Transportation or the Federal Aviation 
Administration.
    (b) The Secretary of Transportation, Office of the Secretary of 
Transportation, and the FAA may issue written interpretations of or 
written guidance concerning this part. Written interpretations and 
guidance are valid, and express the official positions and views of the 
Department of Transportation or the FAA, only if they are issued over 
the signature of the Secretary of Transportation or if they contain the 
following statement:

    The General Counsel of the Department of Transportation has reviewed 
this document and approved it as consistent with the language and intent 
of 49 CFR part 23.

    (c) You may apply for an exemption from any provision of this part. 
To apply, you must request the exemption in writing from the Office of 
the Secretary of Transportation or the FAA. The Secretary will grant the 
request only if it documents special or exceptional circumstances, not 
likely to be generally applicable, and not contemplated in connection 
with the rulemaking that established this part, that make your 
compliance with a specific provision of this part impractical. You must 
agree to take any steps that the Department specifies to comply with the 
intent of the provision from which an exemption is granted. The 
Secretary will issue a written response to all exemption requests.
    (d) You can apply for a waiver of any provision of subpart B or D of 
this part including, but not limited to, any provisions regarding 
administrative requirements, overall goals, contract goals or good faith 
efforts. Program waivers are for the purpose of authorizing you to 
operate an ACDBE program that achieves the objectives of this part by 
means that may differ from one or more of the requirements of subpart B 
or D of this part. To receive a program waiver, you must follow these 
procedures:
    (1) You must apply through the FAA. The application must include a 
specific program proposal and address how you will meet the criteria of 
paragraph (d)(2) of this section. Before submitting your application, 
you must have had public participation in developing your proposal, 
including consultation with the ACDBE community and at least one public 
hearing. Your application must include a summary of the public 
participation process and the information gathered through it.
    (2) Your application must show that--

[[Page 215]]

    (i) There is a reasonable basis to conclude that you could achieve a 
level of ACDBE participation consistent with the objectives of this part 
using different or innovative means other than those that are provided 
in subpart B or D of this part;
    (ii) Conditions at your airport are appropriate for implementing the 
proposal;
    (iii) Your proposal would prevent discrimination against any 
individual or group in access to concession opportunities or other 
benefits of the program; and
    (iv) Your proposal is consistent with applicable law and FAA program 
requirements.
    (3) The FAA Administrator has the authority to approve your 
application. If the Administrator grants your application, you may 
administer your ACDBE program as provided in your proposal, subject to 
the following conditions:
    (i) ACDBE eligibility is determined as provided in subpart C of this 
part, and ACDBE participation is counted as provided in Sec. Sec. 23.53 
through 23.55.
    (ii) Your level of ACDBE participation continues to be consistent 
with the objectives of this part;
    (iii) There is a reasonable limitation on the duration of the your 
modified program; and
    (iv) Any other conditions the Administrator makes on the grant of 
the waiver.
    (4) The Administrator may end a program waiver at any time and 
require you to comply with this part's provisions. The Administrator may 
also extend the waiver, if he or she determines that all requirements of 
this section continue to be met. Any such extension shall be for no 
longer than period originally set for the duration of the program 
waiver.

[70 FR 14508, Mar. 22, 2005, as amended at 72 FR 15616, Apr. 2, 2007]



                        Subpart B_ACDBE Programs



Sec. 23.21  Who must submit an ACDBE program to FAA, and when?

    (a) Except as provided in paragraph (e) of this section, if you are 
a primary airport that has or was required to have a concessions DBE 
program prior to April 21, 2005, you must submit a revisesd ACDBE 
program meeting the requirements of this part to the appropriate FAA 
regional office for approval.
    (1) You must submit this revised program on the same schedule 
provided for your first submission of overall goals in Sec. 23.45(a) of 
this part.
    (2) Timely submission and FAA approval of your revised ACDBE program 
is a condition of eligibility for FAA financial assistance.
    (3) Until your new ACDBE program is submitted and approved, you must 
continue to implement your concessions DBE program that was in effect 
before the effective date of this amendment to part 23, except with 
respect to any provision that is contrary to this part.
    (b) If you are a primary airport that does not now have a DBE 
concessions program, and you apply for a grant of FAA funds for airport 
planning and development under 49 U.S.C. 47107 et seq., you must submit 
an ACDBE program to the FAA at the time of your application. Timely 
submission and FAA approval of your ACDBE program are conditions of 
eligibility for FAA financial assistance.
    (c) If you are the owner of more than one airport that is required 
to have an ACDBE program, you may implement one plan for all your 
locations. If you do so, you must establish a separate ACDBE goal for 
each location.
    (d) If you make any significant changes to your ACDBE program at any 
time, you must provide the amended program to the FAA for approval 
before implementing the changes.
    (e) If you are a non-primary airport, non-commercial service 
airport, a general aviation airport, reliever airport, or any other 
airport that does not have scheduled commercial service, you are not 
required to have an ACDBE program. However, you must take appropriate 
outreach steps to encourage available ACDBEs to participate as 
concessionaires whenever there is a concession opportunity.



Sec. 23.23  What administrative provisions must be in a recipient's 
ACDBE program?

    (a) If, as a recipient that must have an ACDBE program, the program 
must

[[Page 216]]

include provisions for a policy statement, liaison officer, and 
directory, as provided in part 26, Sec. Sec. 26.23, 26.25, and 26.31, 
as well as certification of ACDBEs as provided by Subpart C of this 
part. You must include a statement in your program committing you to 
operating your ACDBE program in a nondiscriminatory manner.
    (b) You may combine your provisions for implementing these 
requirements under this part and part 26 (e.g., a single policy 
statement can cover both Federally-assisted airport contracts and 
concessions; the same individual can act as the liaison officer for both 
part 23 and part 26 matters).



Sec. 23.25  What measures must recipients include in their ACDBE 
programs to ensure nondiscriminatory participation of ACDBEs in 

concessions?

    (a) You must include in your ACDBE program a narrative description 
of the types of measures you intend to make to ensure nondiscriminatory 
participation of ACDBEs in concession and other covered activities.
    (b) Your ACDBE program must provide for setting goals consistent 
with the requirements of Subpart D of this part.
    (c) Your ACDBE program must provide for seeking ACDBE participation 
in all types of concession activities, rather than concentrating 
participation in one category or a few categories to the exclusion of 
others.
    (d) Your ACDBE program must include race-neutral measures that you 
will take. You must maximize the use of race-neutral measures, obtaining 
as much as possible of the ACDBE participation needed to meet overall 
goals through such measures. These are responsibilities that you 
directly undertake as a recipient, in addition to the efforts that 
concessionaires make, to obtain ACDBE participation. The following are 
examples of race-neutral measures you can implement:
    (1) Locating and identifying ACDBEs and other small businesses who 
may be interested in participating as concessionaires under this part;
    (2) Notifying ACDBEs of concession opportunities and encouraging 
them to compete, when appropriate;
    (3) When practical, structuring concession activities so as to 
encourage and facilitate the participation of ACDBEs
    (4) Providing technical assistance to ACDBEs in overcoming 
limitations, such as inability to obtain bonding or financing;
    (5) Ensuring that competitors for concession opportunities are 
informed during pre-solicitation meetings about how the recipient's 
ACDBE program will affect the procurement process;
    (6) Providing information concerning the availability of ACDBE firms 
to competitors to assist them in obtaining ACDBE participation; and
    (7) Establishing a business development program (see part 26, Sec. 
26.35); technical assistance program; or taking other steps to foster 
ACDBE participation in concessions.
    (e) Your ACDBE program must also provide for the use of race-
conscious measures when race-neutral measures, standing alone, are not 
projected to be sufficient to meet an overall goal. The following are 
examples of race-conscious measures you can implement:
    (1) Establishing concession-specific goals for particular concession 
opportunities.
    (i) If the objective of the concession-specific goal is to obtain 
ACDBE participation through a direct ownership arrangement with a ACDBE, 
calculate the goal as a percentage of the total estimated annual gross 
receipts from the concession.
    (ii) If the goal applies to purchases and/or leases of goods and 
services, calculate the goal by dividing the estimated dollar value of 
such purchases and/or leases from ACDBEs by the total estimated dollar 
value of all purchases to be made by the concessionaire.
    (iii) To be eligible to be awarded the concession, competitors must 
make good faith efforts to meet this goal. A competitor may do so either 
by obtaining enough ACDBE participation to meet the goal or by 
documenting that it made sufficient good faith efforts to do so.
    (iv) The administrative procedures applicable to contract goals in 
part 26, Sec. 26.51-53, apply with respect to concession-specific 
goals.

[[Page 217]]

    (2) Negotiation with a potential concessionaire to include ACDBE 
participation, through direct ownership arrangements or measures, in the 
operation of the concession.
    (3) With the prior approval of FAA, other methods that take a 
competitor's ability to provide ACDBE participation into account in 
awarding a concession.
    (f) Your ACDBE program must require businesses subject to ACDBE 
goals at the airport (except car rental companies) to make good faith 
efforts to explore all available options to meet goals, to the maximum 
extent practicable, through direct ownership arrangements with DBEs.
    (g) As provided in Sec. 23.61 of this part, you must not use set-
asides and quotas as means of obtaining ACDBE participation.



Sec. 23.27  What information does a recipient have to retain and report
about implementation of its ACDBE program?

    (a) As a recipient, you must retain sufficient basic information 
about your program implementation, your certification of ACDBEs, and the 
award and performance of agreements and contracts to enable the FAA to 
determine your compliance with this part. You must retain this data for 
a minimum of three years following the end of the concession agreement 
or other covered contract.
    (b) Beginning March 1, 2006, you must submit an annual report on 
ACDBE participation using the form found in appendix A to this part. You 
must submit the report to the appropriate FAA Regional Civil Rights 
Office.



Sec. 23.29  What monitoring and compliance procedures must recipients
follow?

    As a recipient, you must implement appropriate mechanisms to ensure 
compliance with the requirements of this part by all participants in the 
program. You must include in your concession program the specific 
provisions to be inserted into concession agreements and management 
contracts setting forth the enforcement mechanisms and other means you 
use to ensure compliance. These provisions must include a monitoring and 
enforcement mechanism to verify that the work committed to ACDBEs is 
actually performed by the ACDBEs. This mechanism must include a written 
certification that you have reviewed records of all contracts, leases, 
joint venture agreements, or other concession-related agreements and 
monitored the work on-site at your airport for this purpose. The 
monitoring to which this paragraph refers may be conducted in 
conjunction with monitoring of concession performance for other 
purposes.

[77 FR 36931, June 20, 2012]



            Subpart C_Certification and Eligibility of ACDBEs



Sec. 23.31  What certification standards and procedures do recipients 
use to certify ACDBEs?

    (a) As a recipient, you must use, except as provided in this 
subpart, the procedures and standards of part 26, Sec. Sec. 26.61-91 
for certification of ACDBEs to participate in your concessions program. 
Your ACDBE program must incorporate the use of these standards and 
procedures and must provide that certification decisions for ACDBEs will 
be made by the Unified Certification Program (UCP) in your state (see 
part 26, Sec. 26.81).
    (b) The UCP's directory of eligible DBEs must specify whether a firm 
is certified as a DBE for purposes of part 26, an ACDBE for purposes of 
part 23, or both.
    (c) As an airport or UCP, you must review the eligibility of 
currently certified ACDBE firms to make sure that they meet the 
eligibility standards of this part.
    (1) You must complete these reviews as soon as possible, but in no 
case later than April 21, 2006 or three years from the anniversary date 
of each firm's most recent certification, whichever is later.
    (2) You must direct all currently certified ACDBEs to submit to you 
by April 21, 2006, a personal net worth statement, a certification of 
disadvantage, and an affidavit of no change.

[[Page 218]]



Sec. 23.33  What size standards do recipients use to determine the
eligibility of ACDBEs?

    (a) As a recipient, you must, except as provided in paragraph (b) of 
this section, treat a firm as a small business eligible to be certified 
as an ACDBE if its gross receipts, averaged over the firm's previous 
three fiscal years, do not exceed $56.42 million.
    (b) The following types of businesses have size standards that 
differ from the standard set forth in paragraph (a) of this section:
    (1) Banks and financial institutions: $1 billion in assets;
    (2) Car rental companies: $75.23 million average annual gross 
receipts over the firm's three previous fiscal years, as adjusted by the 
Department for inflation every two years from April 3, 2009.
    (3) Pay telephones: 1,500 employees;
    (4) Automobile dealers: 350 employees.
    (c) The Department adjusts the numbers in paragraphs (a) and (b)(2) 
of this section using the Department of Commerce price deflators for 
purchases by State and local governments as the basis for this 
adjustment. The Department publishes a Federal Register document 
informing the public of each adjustment.

[77 FR 36931, June 20, 2012]



Sec. 23.35  What is the personal net worth standard for disadvantaged
owners of ACDBEs?

    The personal net worth standard used in determining eligibility for 
purposes of this part is $1.32 million. Any individual who has a 
personal net worth exceeding this amount is not a socially and 
economically disadvantaged individual for purposes of this part, even if 
the individual is a member of a group otherwise presumed to be 
disadvantaged.

[70 FR 14508, Mar. 22, 2005, as amended at 77 FR 36931, June 20, 2012]



Sec. 23.37  Are firms certified under 49 CFR part 26 eligible to 
participate as ACDBEs?

    (a) You must presume that a firm that is certified as a DBE under 
part 26 is eligible to participate as an ACDBE. By meeting the size, 
disadvantage (including personal net worth), ownership and control 
standards of part 26, the firm will have also met the eligibility 
standards for part 23.
    (b) However, before certifying such a firm, you must ensure that the 
disadvantaged owners of a DBE certified under part 26 are able to 
control the firm with respect to its activity in the concessions 
program. In addition, you are not required to certify a part 26 DBE as a 
part 23 ACDBE if the firm does not do work relevant to the airport's 
concessions program.



Sec. 23.39  What other certification requirements apply in the case of 
ACDBEs?

    (a) The provisions of part 26, Sec. Sec. 26.83 (c)(2) through 
(c)(6) do not apply to certifications for purposes of this part. 
Instead, in determining whether a firm is an eligible ACDBE, you must 
take the following steps:
    (1) Obtain the resumes or work histories of the principal owners of 
the firm and personally interview these individuals;
    (2) Analyze the ownership of stock of the firm, if it is a 
corporation;
    (3) Analyze the bonding and financial capacity of the firm;
    (4) Determine the work history of the firm, including any concession 
contracts or other contracts it may have received;
    (5) Obtain or compile a list of the licenses of the firm and its key 
personnel to perform the concession contracts or other contracts it 
wishes to receive;
    (6) Obtain a statement from the firm of the type(s) of concession(s) 
it prefers to operate or the type(s) of other contract(s) it prefers to 
perform.
    (b) In reviewing the affidavit required by part 26, Sec. 26.83(j), 
you must ensure that the ACDBE firm meets the applicable size standard 
in Sec. 23.33.
    (c) For purposes of this part, the term prime contractor in part 26, 
Sec. 26.87(i) includes a firm holding a prime contract with an airport 
concessionaire to provide goods or services to the concessionaire or a 
firm holding a prime concession agreement with a recipient.
    (d) With respect to firms owned by Alaska Native Corporations 
(ANCs), the provisions of part 26, Sec. 26.73(i) do

[[Page 219]]

not apply under this part. The eligibility of ANC-owned firms for 
purposes of this part is governed by Sec. 26.73(h).
    (e) When you remove a concessionaire's eligibility after the 
concessionaire has entered a concession agreement, because the firm 
exceeded the small business size standard or because an owner has 
exceeded the personal net worth standard, and the firm in all other 
respects remains an eligible DBE, you may continue to count the 
concessionaire's participation toward DBE goals during the remainder of 
the current concession agreement. However, you must not count the 
concessionaire's participation toward DBE goals beyond the termination 
date for the concession agreement in effect at the time of the 
decertification (e.g., in a case where the agreement is renewed or 
extended, or an option for continued participation beyond the current 
term of the agreement is exercised).
    (f) When UCPs are established in a state (see part 26, Sec. 26.81), 
the UCP, rather than individual recipients, certifies firms for the 
ACDBE concession program.
    (g) You must use the Uniform Application Form found in appendix F to 
part 26. However, you must instruct applicants to take the following 
additional steps:
    (1) In the space available in section 2(B)(7) of the form, the 
applicant must state that it is applying for certification as an ACDBE.
    (2) With respect to section 4(C) of the form, the applicant must 
provide information on an attached page concerning the address/location, 
ownership/lease status, current value of property or lease, and fees/
lease payments paid to the airport.
    (3) The applicant need not complete section 4(I) and (J). However, 
the applicant must provide information on an attached page concerning 
any other airport concession businesses the applicant firm or any 
affiliate owns and/or operates, including name, location, type of 
concession, and start date of concession.
    (h) Car rental companies and private terminal owners or lessees are 
not authorized to certify firms as ACDBEs. As a car rental company or 
private terminal owner or lessee, you must obtain ACDBE participation 
from firms which a recipient or UCPs have certified as ACDBEs.
    (i) You must use the certification standards of this part to 
determine the ACDBE eligibility of firms that provide goods and services 
to concessionaires.



            Subpart D_Goals, Good Faith Efforts, and Counting



Sec. 23.41  What is the basic overall goal requirement for recipients?

    (a) If you are a recipient who must implement an ACDBE program, you 
must, except as provided in paragraph (b) of this section, establish two 
separate overall ACDBE goals. The first is for car rentals; the second 
is for concessions other than car rentals.
    (b) If your annual car rental concession revenues, averaged over the 
three-years preceding the date on which you are required to submit 
overall goals, do not exceed $200,000, you are not required to submit a 
car rental overall goal. If your annual revenues for concessions other 
than car rentals, averaged over the three years preceding the date on 
which you are required to submit overall goals, do not exceed $200,000, 
you are not required to submit a non-car rental overall goal.
    (c) Each overall goal must cover a three-year period. You must 
review your goals annually to make sure they continue to fit your 
circumstances appropriately. You must report to the FAA any significant 
adjustments that you make to your goal in the time before your next 
scheduled submission.
    (d) Your goals established under this part must provide for 
participation by all certified ACDBEs and may not be subdivided into 
group-specific goals.
    (e) If you fail to establish and implement goals as provided in this 
section, you are not in compliance with this part. If you establish and 
implement goals in a way different from that provided in this part, you 
are not in compliance with this part. If you fail to comply with this 
requirement, you are not eligible to receive FAA financial assistance.

[[Page 220]]



Sec. 23.43  What are the consultation requirements in the development of
recipients' overall goals?

    (a) As a recipient, you must consult with stakeholders before 
submitting your overall goals to FAA.
    (b) Stakeholders with whom you must consult include, but are not 
limited to, minority and women's business groups, community 
organizations, trade associations representing concessionaires currently 
located at the airport, as well as existing concessionaires themselves, 
and other officials or organizations which could be expected to have 
information concerning the availability of disadvantaged businesses, the 
effects of discrimination on opportunities for ACDBEs, and the 
recipient's efforts to increase participation of ACDBEs.



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

    (a) You must submit your overall goals to the appropriate FAA 
Regional Civil Rights Office for approval. Your first set of overall 
goals meeting the requirements of this subpart are due on the following 
schedule:
    (1) If you are a large or medium hub primary airport on April 21, 
2005, by January 1, 2006. You must make your next submissions by October 
1, 2008.
    (2) If you are a small hub primary airport on April 21, 2005, by 
October 1, 2006.
    (3) If you are a nonhub primary airport on April 21, 2005, by 
October 1, 2007.
    (b) You must then submit new goals every three years after the date 
that applies to you.
    (c) Timely submission and FAA approval of your overall goals is a 
condition of eligibility for FAA financial assistance.
    (d) In the time before you make your first submission under 
paragraph (a) of this section, you must continue to use the overall 
goals that have been approved by the FAA before the effective date of 
this part.
    (e) Your overall goal submission must include a description of the 
method used to calculate your goals and the data you relied on. You must 
``show your work'' to enable the FAA to understand how you concluded 
your goals were appropriate. This means that you must provide to the FAA 
the data, calculations, assumptions, and reasoning used in establishing 
your goals.
    (f) Your submission must include your projection of the portions of 
your overall goals you propose to meet through use of race-neutral and 
race-conscious means, respectively, and the basis for making this 
projection (see Sec. 23.51(d)(5))
    (g) FAA may approve or disapprove the way you calculated your goal, 
including your race-neutral/race-conscious ``split,'' as part of its 
review of your plan or goal submission. Except as provided in paragraph 
(h) of this section, the FAA does not approve or disapprove the goal 
itself (i.e., the number).
    (h) If the FAA determines that your goals have not been correctly 
calculated or the justification is inadequate, the FAA may, after 
consulting with you, adjust your overall goal or race-conscious/race-
neutral ``split.'' The adjusted goal represents the FAA's determination 
of an appropriate overall goal for ACDBE participation in the 
recipient's concession program, based on relevant data and analysis. The 
adjusted goal is binding on you.
    (i) If a new concession opportunity, the estimated average annual 
gross revenues of which are anticipated to be $200,000 or greater, 
arises at a time that falls between normal submission dates for overall 
goals, you must submit an appropriate adjustment to your overall goal to 
the FAA for approval no later than 90 days before issuing the 
solicitation for the new concession opportunity.

[70 FR 14508, Mar. 22, 2005, as amended at 77 FR 36931, June 20, 2012]



Sec. 23.47  What is the base for a recipient's goal for concessions
other than car rentals?

    (a) As a recipient, the base for your goal includes the total gross 
receipts of concessions, except as otherwise provided in this section.
    (b) This base does not include the gross receipts of car rental 
operations.
    (c) The dollar amount of a management contract or subcontract with a 
non-ACDBE and the gross receipts of

[[Page 221]]

business activities to which a management or subcontract with a non-
ACDBE pertains are not added to this base.
    (d) This base does not include any portion of a firm's estimated 
gross receipts that will not be generated from a concession.

    Example to paragraph (d): A firm operates a restaurant in the 
airport terminal which serves the traveling public and under the same 
lease agreement, provides in-flight catering service to air carriers. 
The projected gross receipts from the restaurant are included in the 
overall goal calculation, while the gross receipts to be earned by the 
in-flight catering services are not.



Sec. 23.49  What is the base for a recipient's goal for car rentals?

    Except in the case where you use the alternative goal approach of 
Sec. 23.51(c)(5)(ii), the base for your goal is the total gross 
receipts of car rental operations at your airport. You do not include 
gross receipts of other concessions in this base.



Sec. 23.51  How are a recipient's overall goals expressed and calculated?

    (a) Your objective in setting a goal is to estimate the percentage 
of the base calculated under Sec. Sec. 23.47-23.49 that would be 
performed by ACDBEs in the absence of discrimination and its effects.
    (1) This percentage is the estimated ACDBE participation that would 
occur if there were a ``level playing field'' for firms to work as 
concessionaires for your airport.
    (2) In conducting this goal setting process, you are determining the 
extent, if any, to which the firms in your market area have suffered 
discrimination or its effects in connection with concession 
opportunities or related business opportunities.
    (3) You must complete the goal-setting process separately for each 
of the two overall goals identified in Sec. 23.41 of this part.
    (b)(1) Each overall concessions goal must be based on demonstrable 
evidence of the availability of ready, willing and able ACDBEs relative 
to all businesses ready, willing and able to participate in your ACDBE 
program (hereafter, the ``relative availability of ACDBEs'').
    (2) You cannot simply rely on the 10 percent national aspirational 
goal, your previous overall goal, or past ACDBE participation rates in 
your program without reference to the relative availability of ACDBEs in 
your market.
    (3) Your market area is defined by the geographical area in which 
the substantial majority of firms which seek to do concessions business 
with the airport are located and the geographical area in which the 
firms which receive the substantial majority of concessions-related 
revenues are located. Your market area may be different for different 
types of concessions.
    (c) Step 1. You must begin your goal setting process by determining 
a base figure for the relative availability of ACDBEs. The following are 
examples of approaches that you may take toward determining a base 
figure. These examples are provided as a starting point for your goal 
setting process. Any percentage figure derived from one of these 
examples should be considered a basis from which you begin when 
examining the evidence available to you. These examples are not intended 
as an exhaustive list. Other methods or combinations of methods to 
determine a base figure may be used, subject to approval by the FAA.
    (1) Use DBE Directories and Census Bureau Data. Determine the number 
of ready, willing and able ACDBEs in your market area from your ACDBE 
directory. Using the Census Bureau's County Business Pattern (CBP) data 
base, determine the number of all ready, willing and able businesses 
available in your market area that perform work in the same NAICS codes. 
(Information about the CBP data base may be obtained from the Census 
Bureau at their Web site, http://www.census.gov/epcd/cbp/view/
cbpview.html.) Divide the number of ACDBEs by the number of all 
businesses to derive a base figure for the relative availability of 
ACDBEs in your market area.
    (2) Use an Active Participants List. Determine the number of ACDBEs 
that have participated or attempted to participate in your airport 
concessions program in previous years. Determine the number of all 
businesses that have

[[Page 222]]

participated or attempted to participate in your airport concession 
program in previous years. Divide the number of ACDBEs who have 
participated or attempted to participate by the number for all 
businesses to derive a base figure for the relative availability of 
ACDBEs in your market area.
    (3) Use data from a disparity study. Use a percentage figure derived 
from data in a valid, applicable disparity study.
    (4) Use the goal of another recipient. If another airport or other 
DOT recipient in the same, or substantially similar, market has set an 
overall goal in compliance with this rule, you may use that goal as a 
base figure for your goal.
    (5) Alternative methods. (i) You may use other methods to determine 
a base figure for your overall goal. Any methodology you choose must be 
based on demonstrable evidence of local market conditions and be 
designed to ultimately attain a goal that is rationally related to the 
relative availability of ACDBEs in your market area.
    (ii) In the case of a car rental goal, where it appears that all or 
most of the goal is likely to be met through the purchases by car rental 
companies of vehicles or other goods or services from ACDBEs, one 
permissible alternative is to structure the goal entirely in terms of 
purchases of goods and services. In this case, you would calculate your 
car rental overall goal by dividing the estimated dollar value of such 
purchases from ACDBEs by the total estimated dollar value of all 
purchases to be made by car rental companies.
    (d) Step 2. Once you have calculated a base figure, you must examine 
all relevant evidence reasonably available in your jurisdiction to 
determine what adjustment, if any, is needed to the base figure in order 
to arrive at your overall goal.
    (1) There are many types of evidence that must be considered when 
adjusting the base figure. These include, but are not limited to:
    (i) The current capacity of ACDBEs to perform work in your 
concessions program, as measured by the volume of work ACDBEs have 
performed in recent years; and
    (ii) Evidence from disparity studies conducted anywhere within your 
jurisdiction, to the extent it is not already accounted for in your base 
figure.
    (2) If your base figure is the goal of another recipient, you must 
adjust it for differences in your market area and your concessions 
program.
    (3) If available, you must consider evidence from related fields 
that affect the opportunities for ACDBEs to form, grow and compete. 
These include, but are not limited to:
    (i) Statistical disparities in the ability of ACDBEs to get the 
financing, bonding and insurance required to participate in your 
program;
    (ii) Data on employment, self-employment, education, training and 
union apprenticeship programs, to the extent you can relate it to the 
opportunities for ACDBEs to perform in your program.
    (4) If you attempt to make an adjustment to your base figure to 
account for the continuing effects of past discrimination, or the 
effects of an ongoing ACDBE program, the adjustment must be based on 
demonstrable evidence that is logically and directly related to the 
effect for which the adjustment is sought.
    (5) Among the information you submit with your overall goal (see 
23.45(e)), you must include description of the methodology you used to 
establish the goal, including your base figure and the evidence with 
which it was calculated, as well as the adjustments you made to the base 
figure and the evidence relied on for the adjustments. You should also 
include a summary listing of the relevant available evidence in your 
jurisdiction and an explanation of how you used that evidence to adjust 
your base figure. You must also include your projection of the portions 
of the overall goal you expect to meet through race-neutral and race-
conscious measures, respectively (see Sec. Sec. 26.51(c)).
    (e) You are not required to obtain prior FAA concurrence with your 
overall goal (i.e., with the number itself). However, if the FAA's 
review suggests that your overall goal has not been correctly 
calculated, or that your method for calculating goals is inadequate, the 
FAA may, after consulting with you, adjust your overall goal or

[[Page 223]]

require that you do so. The adjusted overall goal is binding on you.
    (f) If you need additional time to collect data or take other steps 
to develop an approach to setting overall goals, you may request the 
approval of the FAA Administrator for an interim goal and/or goal-
setting mechanism. Such a mechanism must:
    (1) Reflect the relative availability of ACDBEs in your local market 
area to the maximum extent feasible given the data available to you; and
    (2) Avoid imposing undue burdens on non-ACDBEs.



Sec. 23.53  How do car rental companies count ACDBE participation
toward their goals?

    (a) As a car rental company, you may, in meeting the goal the 
airport has set for you, include purchases or leases of vehicles from 
any vendor that is a certified ACDBE.
    (b) As a car rental company, if you choose to meet the goal the 
airport has set for you by including purchases or leases of vehicles 
from an ACDBE vendor, you must also submit to the recipient 
documentation of the good faith efforts you have made to obtain ACDBE 
participation from other ACDBE providers of goods and services.
    (c) While this part does not require you to obtain ACDBE 
participation through direct ownership arrangements, you may count such 
participation toward the goal the airport has set for you.
    (d) The following special rules apply to counting participation 
related to car rental operations:
    (1) Count the entire amount of the cost charged by an ACDBE for 
repairing vehicles, provided that it is reasonable and not excessive as 
compared with fees customarily allowed for similar services.
    (2) Count the entire amount of the fee or commission charged by a 
ACDBE to manage a car rental concession under an agreement with the 
concessionaire toward ACDBE goals, provided that it is reasonable and 
not excessive as compared with fees customarily allowed for similar 
services.
    (3) Do not count any portion of a fee paid by a manufacturer to a 
car dealership for reimbursement of work performed under the 
manufacturer's warranty.
    (e) For other goods and services, count participation toward ACDBE 
goals as provided in part 26, Sec. 26.55 and Sec. 23.55 of this part. 
In the event of any conflict between these two sections, Sec. 23.55 
controls.
    (f) If you have a national or regional contract, count a pro-rated 
share of the amount of that contract toward the goals of each airport 
covered by the contract. Use the proportion of your applicable gross 
receipts as the basis for making this pro-rated assignment of ACDBE 
participation.

    Example to paragraph (f): Car Rental Company X signs a regional 
contract with an ACDBE car dealer to supply cars to all five airports in 
a state. The five airports each account for 20 percent of X's gross 
receipts in the state. Twenty percent of the value of the cars purchased 
through the ACDBE car dealer would count toward the goal of each 
airport.



Sec. 23.55  How do recipients count ACDBE participation toward goals 
for items other than car rentals?

    (a) You count only ACDBE participation that results from a 
commercially useful function. For purposes of this part, the term 
commercially useful function has the same meaning as in part 26, Sec. 
26.55(c), except that the requirements of Sec. 26.55(c)(3) do not apply 
to concessions.
    (b) Count the total dollar value of gross receipts an ACDBE earns 
under a concession agreement and the total dollar value of a management 
contract or subcontract with an ACDBE toward the goal. However, if the 
ACDBE enters into a subconcession agreement or subcontract with a non-
ACDBE, do not count any of the gross receipts earned by the non-ACDBE.
    (c) When an ACDBE performs as a subconcessionaire or subcontractor 
for a non-ACDBE, count only the portion of the gross receipts earned by 
the ACDBE under its subagreement.
    (d) When an ACDBE performs as a participant in a joint venture, 
count a portion of the gross receipts equal to the distinct, clearly 
defined portion of the work of the concession that the ACDBE performs 
with its own forces toward ACDBE goals.

[[Page 224]]

    (e) Count the entire amount of fees or commissions charged by an 
ACDBE firm for a bona fide service, provided that, as the recipient, you 
determine this amount to be reasonable and not excessive as compared 
with fees customarily allowed for similar services. Such services may 
include, but are not limited to, professional, technical, consultant, 
legal, security systems, advertising, building cleaning and maintenance, 
computer programming, or managerial.
    (f) Count 100 percent of the cost of goods obtained from an ACDBE 
manufacturer. For purposes of this part, the term manufacturer has the 
same meaning as in part 26, Sec. 26.55(e)(1)(ii).
    (g) Count 100 percent of the cost of goods purchased or leased from 
a ACDBE regular dealer. For purposes of this part, the term ``regular 
dealer'' has the same meaning as in part 26, Sec. 26.55(e)(2)(ii).
    (h) Count credit toward ACDBE goals for goods purchased from an 
ACDBE which is neither a manufacturer nor a regular dealer as follows:
    (1) Count the entire amount of fees or commissions charged for 
assistance in the procurement of the goods, provided that this amount is 
reasonable and not excessive as compared with fees customarily allowed 
for similar services. Do not count any portion of the cost of the goods 
themselves.
    (2) Count the entire amount of fees or transportation charges for 
the delivery of goods required for a concession, provided that this 
amount is reasonable and not excessive as compared with fees customarily 
allowed for similar services. Do not count any portion of the cost of 
goods themselves.
    (i) If a firm has not been certified as an ACDBE in accordance with 
the standards in this part, do not count the firm's participation toward 
ACDBE goals.
    (j) Do not count the work performed or gross receipts earned by a 
firm after its eligibility has been removed toward ACDBE goals. However, 
if an ACDBE firm certified on April 21, 2005 is decertified because one 
or more of its disadvantaged owners do not meet the personal net worth 
criterion or the firm exceeds business size standards of this part 
during the performance of a contract or other agreement, the firm's 
participation may continue to be counted toward ACDBE goals for the 
remainder of the term of the contract or other agreement (but not 
extensions or renewals of such contracts or agreements).
    (k) Do not count costs incurred in connection with the renovation, 
repair, or construction of a concession facility (sometimes referred to 
as the ``build-out'').
    (l) Do not count the ACDBE participation of car rental companies 
toward your ACDBE achievements toward this goal.



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

    (a) You cannot be penalized, or treated by the Department as being 
in noncompliance with this part, simply because your ACDBE participation 
falls short of your overall goals. You can be penalized or treated as 
being in noncompliance only if you have failed to administer your ACDBE 
program in good faith.
    (b) If the awards and commitments shown on your Uniform Report of 
ACDBE Participation (found in Appendix A to this Part) at the end of any 
fiscal year are less than the overall goal applicable to that fiscal 
year, you must do the following in order to be regarded by the 
Department as implementing your ACDBE program in good faith:
    (1) Analyze in detail the reasons for the difference between the 
overall goal and your awards and commitments in that fiscal year;
    (2) Establish specific steps and milestones to correct the problems 
you have identified in your analysis and to enable you to meet fully 
your goal for the new fiscal year;
    (3) (i) If you are a CORE 30 airport or other airport designated by 
the FAA, you must submit, within 90 days of the end of the fiscal year, 
the analysis and corrective actions developed under paragraphs (b)(1) 
and (2) of this section to the FAA for approval. If the FAA approves the 
report, you will be regarded as complying with the requirements of this 
section for the remainder of the fiscal year.

[[Page 225]]

    (ii) As an airport not meeting the criteria of paragraph (b)(3)(i) 
of this section, you must retain analysis and corrective actions in your 
records for three years and make it available to the FAA, on request, 
for their review.
    (4) The FAA may impose conditions on the recipient as part of its 
approval of the recipient's analysis and corrective actions including, 
but not limited to, modifications to your overall goal methodology, 
changes in your race-conscious/race-neutral split, or the introduction 
of additional race-neutral or race-conscious measures.
    (5) You may be regarded as being in noncompliance with this part, 
and therefore subject to the remedies in Sec. 23.11 of this part and 
other applicable regulations, for failing to implement your ACDBE 
program in good faith if any of the following things occur:
    (i) You do not submit your analysis and corrective actions to FAA in 
a timely manner as required under paragraph (b)(3) of this section;
    (ii) FAA disapproves your analysis or corrective actions; or
    (iii) You do not fully implement:
    (A) The corrective actions to which you have committed, or
    (B) Conditions that FAA has imposed following review of your 
analysis and corrective actions.
    (c) If information coming to the attention of FAA demonstrates that 
current trends make it unlikely that you, as an airport, will achieve 
ACDBE awards and commitments that would be necessary to allow you to 
meet your overall goal at the end of the fiscal year, FAA may require 
you to make further good faith efforts, such as modifying your race-
conscious/race-neutral split or introducing additional race-neutral or 
race-conscious measures for the remainder of the fiscal year.

[70 FR 14508, Mar. 22, 2005, as amended at 77 FR 36931, June 20, 2012]



Sec. 23.59  What is the role of the statutory 10 percent goal in the 
ACDBE program?

    (a) The statute authorizing the ACDBE program provides that, except 
to the extent the Secretary determines otherwise, not less than 10 
percent of concession businesses are to be ACDBEs.
    (b) This 10 percent goal is an aspirational goal at the national 
level, which the Department uses as a tool in evaluating and monitoring 
DBEs' opportunities to participate in airport concessions.
    (c) The national 10 percent aspirational goal does not authorize or 
require recipients to set overall or concession-specific goals at the 10 
percent level, or any other particular level, or to take any special 
administrative steps if their goals are above or below 10 percent.



Sec. 23.61  Can recipients use quotas or set-asides as part of their
ACDBE programs?

    You must not use quotas or set-asides for ACDBE participation in 
your program.



                       Subpart E_Other Provisions



Sec. 23.71  Does a recipient have to change existing concession 
agreements?

    Nothing in this part requires you to modify or abrogate an existing 
concession agreement (one executed before April 21, 2005) during its 
term. When an extension or option to renew such an agreement is 
exercised, or when a material amendment is made, you must assess 
potential for ACDBE participation and may, if permitted by the 
agreement, use any means authorized by this part to obtain a modified 
amount of ACDBE participation in the renewed or amended agreement.



Sec. 23.73  What requirements apply to privately-owned or leased 
terminal buildings?

    (a) If you are a recipient who is required to implement an ACDBE 
program on whose airport there is a privately-owned or leased terminal 
building that has concessions, or any portion of such a building, this 
section applies to you.
    (b) You must pass through the applicable requirements of this part 
to the private terminal owner or lessee via your agreement with the 
owner or lessee or by other means. You must ensure that the terminal 
owner or lessee

[[Page 226]]

complies with the requirements of this part.
    (c) If your airport is a primary airport, you must obtain from the 
terminal owner or lessee the goals and other elements of the ACDBE 
program required under this part. You must incorporate this information 
into your concession plan and submit it to the FAA in accordance with 
this part.
    (d) If the terminal building is at a non-primary commercial service 
airport or general aviation airport or reliever airport, you must ensure 
that the owner complies with the requirements in Sec. 23.21(e).



Sec. 23.75  Can recipients enter into long-term, exclusive agreements 
with concessionaires?

    (a) Except as provided in paragraph (b) of this section, you must 
not enter into long-term, exclusive agreements for concessions. For 
purposes of this section, a long-term agreement is one having a term 
longer than five years.
    (b) You may enter into a long-term, exclusive concession agreement 
only under the following conditions:
    (1) Special local circumstances exist that make it important to 
enter such agreement, and
    (2) The responsible FAA regional office approves your plan for 
meeting the standards of paragraph (c) of this section.
    (c) In order to obtain FAA approval of a long-term-exclusive 
concession agreement, you must submit the following information to the 
FAA regional office:
    (1) A description of the special local circumstances that warrant a 
long-term, exclusive agreement.
    (2) A copy of the draft and final leasing and subleasing or other 
agreements. This long-term, exclusive agreement must provide that:
    (i) A number of ACDBEs that reasonably reflects their availability 
in your market area, in the absence of discrimination, to do the types 
of work required will participate as concessionaires throughout the term 
of the agreement and account for at a percentage of the estimated annual 
gross receipts equivalent to a level set in accordance with Sec. Sec. 
23.47 through 23.49 of this part.
    (ii) You will review the extent of ACDBE participation before the 
exercise of each renewal option to consider whether an increase or 
decrease in ACDBE participation is warranted.
    (iii) An ACDBE concessionaire that is unable to perform successfully 
will be replaced by another ACDBE concessionaire, if the remaining term 
of the agreement makes this feasible. In the event that such action is 
not feasible, you will require the concessionaire to make good faith 
efforts during the remaining term of the agreement to encourage ACDBEs 
to compete for the purchases and/or leases of goods and services to be 
made by the concessionaire.
    (3) Assurances that any ACDBE participant will be in an acceptable 
form, such as a sublease, joint venture, or partnership.
    (4) Documentation that ACDBE participants are properly certified.
    (5) A description of the type of business or businesses to be 
operated (e.g., location, storage and delivery space, ``back-of-the-
house facilities'' such as kitchens, window display space, advertising 
space, and other amenities that will increase the ACDBE's chance to 
succeed).
    (6) Information on the investment required on the part of the ACDBE 
and any unusual management or financial arrangements between the prime 
concessionaire and ACDBE.
    (7) Information on the estimated gross receipts and net profit to be 
earned by the ACDBE.



Sec. 23.77  Does this part preempt local requirements?

    (a) In the event that a State or local law, regulation, or policy 
differs from the requirements of this part, the recipient must, as a 
condition of remaining eligible to receive Federal financial assistance 
from the DOT, take such steps as may be necessary to comply with the 
requirements of this part.
    (b) You must clearly identify any State or local law, regulation, or 
policy pertaining to minority, women's, or disadvantaged business 
enterprise concerning airport concessions that adds to, goes beyond, or 
imposes more stringent requirements than the provisions of this part. 
FAA will determine

[[Page 227]]

whether such a law, regulation, or policy conflicts with this part, in 
which case the requirements of this part will govern.
    (c) If not deemed in conflict by the FAA, you must write and 
administer such a State or local law, policy, or regulation separately 
from the ACDBE program.
    (d) You must provide copies of any such provisions and the legal 
authority supporting them to the FAA with your ACDBE program submission. 
FAA will not approve an ACDBE program if there are such provisions that 
conflict with the provisions of this part.
    (e) However, nothing in this part preempts any State or local law, 
regulation, or policy enacted by the governing body of a recipient, or 
the authority of any State or local government or recipient to adopt or 
enforce any law, regulation, or policy relating to ACDBEs, as long as 
the law, regulation, or policy does not conflict with this part.



Sec. 23.79  Does this part permit recipients to use local geographic 
preferences?

    No. As a recipient you must not use a local geographic preference. 
For purposes of this section, a local geographic preference is any 
requirement that gives an ACDBE located in one place (e.g., your local 
area) an advantage over ACDBEs from other places in obtaining business 
as, or with, a concession at your airport.



    Sec. Appendix A to Part 23--Uniform Report of ACDBE Participation

         Instructions for Uniform Report of ACDBE Participation

    1. Insert name of airport receiving FAA financial assistance and AIP 
number.
    2. Provide the name and contact information (phone, fax, e-mail) for 
the person FAA should contact with questions about the report.
    3a. Provide the annual reporting period to which the report pertains 
(e.g., October 2005-September 2006).
    3b. Provide the date on which the report is submitted to FAA.
    4. This block and blocks 5 and 6 concern non-car rental goals and 
participation only. In this block, provide the overall non-car rental 
percentage goal and the race-conscious (RC) and race-neutral (RN) 
components of it. The RC and RN percentages should add up to the overall 
percentage goal.
    5. For purposes of this block and blocks 6, 8, and 9, the 
participation categories listed at the left of the block are the 
following: ``Prime Concessions'' are concessions who have a direct 
relationship with the airport (e.g., a company who has a lease agreement 
directly with the airport to operate a concession). A ``subconcession'' 
is a firm that has a sublease or other agreement with a prime 
concessionaire, rather than with the airport itself, to operate a 
concession at the airport. A ``management contract'' is an agreement 
between the airport and a firm to manage a portion of the airport's 
facilities or operations (e.g., manage the parking facilities). ``Goods/
services'' refers to those goods and services purchased by the airport 
itself or by concessionaires and management contractors from certified 
DBEs.
    Block 5 concerns all non-car rental concession activity covered by 
49 CFR part 23 during the reporting period, both new or continuing.
    In Column A, enter the total concession gross revenues for 
concessionaires (prime and sub) and purchases of goods and services 
(ACDBE and non-ACDBE combined) at the airport. In Column B, enter the 
number of lease agreements, contracts, etc. in effect or taking place 
during the reporting period in each participation category for all 
concessionaires and purchases of goods and services (ACDBE and non-ACDBE 
combined).
    Because, by statute, non-ACDBE management contracts do not count as 
part of the base for ACDBE goals, the cells for total management 
contract participation and ACDBE participation as a percentage of total 
management contracting dollars are not intended to be filled in blocks 
5, 6, 8, and 9.
    In Column C, enter the total gross revenues in each participation 
category (ACDBEs) only. In Column D, enter the number of lease 
agreements, contracts, etc., in effect or entered into during the 
reporting period in each participation category for all concessionaires 
and purchases of goods and services (ACDBEs only).
    Columns E and F are subsets of Column C: break out the total gross 
revenues listed in Column C into the portions that are attributable to 
race-conscious and race-neutral measures, respectively. Column G is a 
percentage calculation. It answers the question, what percentage of the 
numbers in Column A is represented by the corresponding numbers in 
Column C?
    6. The numbers in this Block concern only new non-car rental 
concession opportunities that arose during the current reporting period. 
In other words, the information requested in Block 6 is a subset of that 
requested in Block 5. Otherwise, this Block is filled out in the same 
way as Block 5.

[[Page 228]]

    7. Blocks 7-9 concern car rental goals and participation. In Block 
7, provide the overall car rental percentage goal and the race-conscious 
(RC) and race-neutral (RN) components of it. The RC and RN percentages 
should add up to the overall percentage goal.
    8. Block 8 is parallel to Block 5, except that it is for car 
rentals. The instructions for filling it out are the same as for Block 
5.
    9. Block 9 is parallel to Block 6, except that it is for car 
rentals. The information requested in Block 9 is a subset of that 
requested in Block 8. The instructions for filling it out are the same 
as for Block 6.
    10. Block 10 instructs recipients to bring forward the cumulative 
ACDBE participation figures from Blocks 5 and 8, breaking down these 
figures by race and gender categories. Participation by non-minority 
women-owned firms should be listed in the ``non-minority women'' column. 
Participation by firms owned by minority women should be listed in the 
appropriate minority group column. The ``other'' column should be used 
to reflect participation by individuals who are not a member of a 
presumptively disadvantaged group who have been found disadvantaged on a 
case-by-case basis.
    11. This block instructs recipients to attach five information items 
for each ACDBE firm participating in its program during the reporting 
period. If the firm's participation numbers are reflected in Blocks 5-6 
and/or 8-9, the requested information about that firm should be attached 
in response to this item.

                  Uniform Report of ACDBE Participation

    1. Name of Recipient and AIP Number:
    2. Contact Information:
    3a. Reporting Period:
    3b. Date of Report:
    4. Current Non-Car Rental ACDBE Goal: Race Conscious Goal ----% Race 
Neutral Goal ----% Overall Goal ----%

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     A Total      B Total    C Total to  D Total to    E RC to     F RN to      G % of
         5. Non-car rental Cumulative ACDBE participation            dollars       number      ACDBEs      ACDBEs      ACDBEs      ACDBEs     dollars to
                                                                    (everyone)   (everyone)   (dollars)   (number)    (dollars)   (dollars)     ACDBEs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Prime Concessions................................................
Subconcessions...................................................
Management Contracts.............................................     XXXXXXX      XXXXXXX   ..........  ..........  ..........  ..........      XXXXXX
Goods/Services...................................................
    Totals.......................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     A Total      B Total    C Total to  D Total to    E RC to     F RN to      G % of
      6. Non-Car rental New ACDBE participation this period          dollars       number      ACDBEs      ACDBEs      ACDBEs      ACDBEs     dollars to
                                                                    (everyone)   (everyone)   (dollars)   (number)    (dollars)   (dollars)     ACDBEs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Prime Concessions................................................
Subconcessions...................................................
Management Contracts.............................................     XXXXXXX      XXXXXXX   ..........  ..........  ..........      XXXXXX  ...........
Goods/Services...................................................
    Totals.......................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------

    7. Current Car Rental ACDBE Goal: Race Conscious Goal ----% Race 
Neutral Goal ----% Overall Goal ----%

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     A Total      B Total    C Total to  D Total to    E RC to     F RN to      G % of
           8. Car rental Cumulative ACDBE participation              dollars       number      ACDBEs      ACDBEs      ACDBEs      ACDBEs     dollars to
                                                                    (everyone)   (everyone)   (dollars)   (number)    (dollars)   (dollars)     ACDBEs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Prime Concessions................................................
Subconcessions...................................................
Goods/Services...................................................
    Totals.......................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     A Total      B Total    C Total to  D Total to    E RC to     F RN to      G % of
        9. Car rental New ACDBE participation this period            dollars       number      ACDBEs      ACDBEs      ACDBEs      ACDBEs     dollars to
                                                                    (everyone)   (everyone)   (dollars)   (number)    (dollars)   (dollars)     ACDBEs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Prime Concessions................................................
Subconcessions...................................................
Goods/Services...................................................
    Totals.......................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 229]]


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  C Asian-    D Asian-                 F Non-
  10. Cumulative ACDBE participation by race/gender      A Black     B Hispanic    Pacific     Indian     E Native    minority     G Other     H Totals
                                                        Americans    Americans    Americans   Americans   Americans     Women
--------------------------------------------------------------------------------------------------------------------------------------------------------
Car Rental...........................................
Non-Car Rental.......................................
    Totals...........................................
--------------------------------------------------------------------------------------------------------------------------------------------------------

    11. On an attachment, list the following information for each ACDBE 
firm participating in your program during the period of this report: (1) 
Firm name; (2) Type of business; (3) Beginning and expiration dates of 
agreement, including options to renew; (4) Dates that material 
amendments have been or will be made to agreement (if known); (5) 
Estimated gross receipts for the firm during this reporting period.



PART 24_UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION FOR 
FEDERAL AND FEDERALLY-ASSISTED PROGRAMS--Table of Contents



                            Subpart A_General

Sec.
24.1 Purpose.
24.2 Definitions and acronyms.
24.3 No duplication of payments.
24.4 Assurances, monitoring and corrective action.
24.5 Manner of notices.
24.6 Administration of jointly-funded projects.
24.7 Federal Agency waiver of regulations.
24.8 Compliance with other laws and regulations.
24.9 Recordkeeping and reports.
24.10 Appeals.

                   Subpart B_Real Property Acquisition

24.101 Applicability of acquisition requirements.
24.102 Basic acquisition policies.
24.103 Criteria for appraisals.
24.104 Review of appraisals.
24.105 Acquisition of tenant-owned improvements.
24.106 Expenses incidental to transfer of title to the Agency.
24.107 Certain litigation expenses.
24.108 Donations.

                Subpart C_General Relocation Requirements

24.201 Purpose.
24.202 Applicability.
24.203 Relocation notices.
24.204 Availability of comparable replacement dwelling before 
          displacement.
24.205 Relocation planning, advisory services, and coordination.
24.206 Eviction for cause.
24.207 General requirements claims for relocation payments.
24.208 Aliens not lawfully present in the United States.
24.209 Relocation payments not considered as income.

           Subpart D_Payments for Moving and Related Expenses

24.301 Payment for actual reasonable moving and related expenses.
24.302 Fixed payment for moving expenses--residential moves.
24.303 Related nonresidential eligible expenses.
24.304 Reestablishment expenses--nonresidential moves.
24.305 Fixed payment for moving expenses--nonresidential moves.
24.306 Discretionary utility relocation payments.

                 Subpart E_Replacement Housing Payments

24.401 Replacement housing payment for 180-day homeowner-occupants.
24.402 Replacement housing payment for 90-day occupants.
24.403 Additional rules governing replacement housing payments.
24.404 Replacement housing of last resort.

                         Subpart F_Mobile Homes

24.501 Applicability.
24.502 Replacement housing payment for 180-day mobile homeowner 
          displaced from a mobile home, and/or from the acquired mobile 
          home site.
24.503 Replacement housing payment for 90-day mobile home occupants.

                         Subpart G_Certification

24.601 Purpose.
24.602 Certification application.
24.603 Monitoring and corrective action.

Appendix A to Part 24--Additional Information
Appendix B to Part 24--Statistical Report Form


[[Page 230]]


    Authority: 42 U.S.C. 4601 et seq.; 49 CFR 1.48(cc).

    Source: 70 FR 611, Jan. 4, 2005, unless otherwise noted.



                            Subpart A_General



Sec. 24.1  Purpose.

    The purpose of this part is to promulgate rules to implement the 
Uniform Relocation Assistance and Real Property Acquisition Policies Act 
of 1970, as amended (42 U.S.C. 4601 et seq.) (Uniform Act), in 
accordance with the following objectives:
    (a) To ensure that owners of real property to be acquired for 
Federal and federally-assisted projects are treated fairly and 
consistently, to encourage and expedite acquisition by agreements with 
such owners, to minimize litigation and relieve congestion in the 
courts, and to promote public confidence in Federal and federally-
assisted land acquisition programs;
    (b) To ensure that persons displaced as a direct result of Federal 
or federally-assisted projects are treated fairly, consistently, and 
equitably so that such displaced persons will not suffer 
disproportionate injuries as a result of projects designed for the 
benefit of the public as a whole; and
    (c) To ensure that Agencies implement these regulations in a manner 
that is efficient and cost effective.



Sec. 24.2  Definitions and acronyms.

    (a) Definitions. Unless otherwise noted, the following terms used in 
this part shall be understood as defined in this section:
    (1) Agency. The term Agency means the Federal Agency, State, State 
Agency, or person that acquires real property or displaces a person.
    (i) Acquiring Agency. The term acquiring Agency means a State 
Agency, as defined in paragraph (a)(1)(iv) of this section, which has 
the authority to acquire property by eminent domain under State law, and 
a State Agency or person which does not have such authority.
    (ii) Displacing Agency. The term displacing Agency means any Federal 
Agency carrying out a program or project, and any State, State Agency, 
or person carrying out a program or project with Federal financial 
assistance, which causes a person to be a displaced person.
    (iii) Federal Agency. The term Federal Agency means any department, 
Agency, or instrumentality in the executive branch of the government, 
any wholly owned government corporation, the Architect of the Capitol, 
the Federal Reserve Banks and branches thereof, and any person who has 
the authority to acquire property by eminent domain under Federal law.
    (iv) State Agency. The term State Agency means any department, 
Agency or instrumentality of a State or of a political subdivision of a 
State, any department, Agency, or instrumentality of two or more States 
or of two or more political subdivisions of a State or States, and any 
person who has the authority to acquire property by eminent domain under 
State law.
    (2) Alien not lawfully present in the United States. The phrase 
``alien not lawfully present in the United States'' means an alien who 
is not ``lawfully present'' in the United States as defined in 8 CFR 
103.12 and includes:
    (i) An alien present in the United States who has not been admitted 
or paroled into the United States pursuant to the Immigration and 
Nationality Act (8 U.S.C. 1101 et seq.) and whose stay in the United 
States has not been authorized by the United States Attorney General; 
and,
    (ii) An alien who is present in the United States after the 
expiration of the period of stay authorized by the United States 
Attorney General or who otherwise violates the terms and conditions of 
admission, parole or authorization to stay in the United States.
    (3) Appraisal. The term appraisal means a written statement 
independently and impartially prepared by a qualified appraiser setting 
forth an opinion of defined value of an adequately described property as 
of a specific date, supported by the presentation and analysis of 
relevant market information.
    (4) Business. The term business means any lawful activity, except a 
farm operation, that is conducted:
    (i) Primarily for the purchase, sale, lease and/or rental of 
personal and/or

[[Page 231]]

real property, and/or for the manufacture, processing, and/or marketing 
of products, commodities, and/or any other personal property;
    (ii) Primarily for the sale of services to the public;
    (iii) Primarily for outdoor advertising display purposes, when the 
display must be moved as a result of the project; or
    (iv) By a nonprofit organization that has established its nonprofit 
status under applicable Federal or State law.
    (5) Citizen. The term citizen for purposes of this part includes 
both citizens of the United States and noncitizen nationals.
    (6) Comparable replacement dwelling. The term comparable replacement 
dwelling means a dwelling which is:
    (i) Decent, safe and sanitary as described in paragraph 24.2(a)(8) 
of this section;
    (ii) Functionally equivalent to the displacement dwelling. The term 
functionally equivalent means that it performs the same function, and 
provides the same utility. While a comparable replacement dwelling need 
not possess every feature of the displacement dwelling, the principal 
features must be present. Generally, functional equivalency is an 
objective standard, reflecting the range of purposes for which the 
various physical features of a dwelling may be used. However, in 
determining whether a replacement dwelling is functionally equivalent to 
the displacement dwelling, the Agency may consider reasonable trade-offs 
for specific features when the replacement unit is equal to or better 
than the displacement dwelling (See appendix A, Sec. 24.2(a)(6));
    (iii) Adequate in size to accommodate the occupants;
    (iv) In an area not subject to unreasonable adverse environmental 
conditions;
    (v) In a location generally not less desirable than the location of 
the displaced person's dwelling with respect to public utilities and 
commercial and public facilities, and reasonably accessible to the 
person's place of employment;
    (vi) On a site that is typical in size for residential development 
with normal site improvements, including customary landscaping. The site 
need not include special improvements such as outbuildings, swimming 
pools, or greenhouses. (See also Sec. 24.403(a)(2));
    (vii) Currently available to the displaced person on the private 
market except as provided in paragraph (a)(6)(ix) of this section (See 
appendix A, Sec. 24.2(a)(6)(vii)); and
    (viii) Within the financial means of the displaced person:
    (A) A replacement dwelling purchased by a homeowner in occupancy at 
the displacement dwelling for at least 180 days prior to initiation of 
negotiations (180-day homeowner) is considered to be within the 
homeowner's financial means if the homeowner will receive the full price 
differential as described in Sec. 24.401(c), all increased mortgage 
interest costs as described at Sec. 24.401(d) and all incidental 
expenses as described at Sec. 24.401(e), plus any additional amount 
required to be paid under Sec. 24.404, Replacement housing of last 
resort.
    (B) A replacement dwelling rented by an eligible displaced person is 
considered to be within his or her financial means if, after receiving 
rental assistance under this part, the person's monthly rent and 
estimated average monthly utility costs for the replacement dwelling do 
not exceed the person's base monthly rental for the displacement 
dwelling as described at Sec. 24.402(b)(2).
    (C) For a displaced person who is not eligible to receive a 
replacement housing payment because of the person's failure to meet 
length-of-occupancy requirements, comparable replacement rental housing 
is considered to be within the person's financial means if an Agency 
pays that portion of the monthly housing costs of a replacement dwelling 
which exceeds the person's base monthly rent for the displacement 
dwelling as described in Sec. 24.402(b)(2). Such rental assistance must 
be paid under Sec. 24.404, Replacement housing of last resort.
    (ix) For a person receiving government housing assistance before 
displacement, a dwelling that may reflect similar government housing 
assistance. In such cases any requirements of the

[[Page 232]]

government housing assistance program relating to the size of the 
replacement dwelling shall apply. (See appendix A, Sec. 
24.2(a)(6)(ix).)
    (7) Contribute materially. The term contribute materially means that 
during the 2 taxable years prior to the taxable year in which 
displacement occurs, or during such other period as the Agency 
determines to be more equitable, a business or farm operation:
    (i) Had average annual gross receipts of at least $5,000; or
    (ii) Had average annual net earnings of at least $1,000; or
    (iii) Contributed at least 33\1/3\ percent of the owner's or 
operator's average annual gross income from all sources.
    (iv) If the application of the above criteria creates an inequity or 
hardship in any given case, the Agency may approve the use of other 
criteria as determined appropriate.
    (8) Decent, safe, and sanitary dwelling. The term decent, safe, and 
sanitary dwelling means a dwelling which meets local housing and 
occupancy codes. However, any of the following standards which are not 
met by the local code shall apply unless waived for good cause by the 
Federal Agency funding the project. The dwelling shall:
    (i) Be structurally sound, weather tight, and in good repair;
    (ii) Contain a safe electrical wiring system adequate for lighting 
and other devices;
    (iii) Contain a heating system capable of sustaining a healthful 
temperature (of approximately 70 degrees) for a displaced person, except 
in those areas where local climatic conditions do not require such a 
system;
    (iv) Be adequate in size with respect to the number of rooms and 
area of living space needed to accommodate the displaced person. The 
number of persons occupying each habitable room used for sleeping 
purposes shall not exceed that permitted by local housing codes or, in 
the absence of local codes, the policies of the displacing Agency. In 
addition, the displacing Agency shall follow the requirements for 
separate bedrooms for children of the opposite gender included in local 
housing codes or in the absence of local codes, the policies of such 
Agencies;
    (v) There shall be a separate, well lighted and ventilated bathroom 
that provides privacy to the user and contains a sink, bathtub or shower 
stall, and a toilet, all in good working order and properly connected to 
appropriate sources of water and to a sewage drainage system. In the 
case of a housekeeping dwelling, there shall be a kitchen area that 
contains a fully usable sink, properly connected to potable hot and cold 
water and to a sewage drainage system, and adequate space and utility 
service connections for a stove and refrigerator;
    (vi) Contains unobstructed egress to safe, open space at ground 
level; and
    (vii) For a displaced person with a disability, be free of any 
barriers which would preclude reasonable ingress, egress, or use of the 
dwelling by such displaced person. (See appendix A, Sec. 
24.2(a)(8)(vii).)
    (9) Displaced person. (i) General. The term displaced person means, 
except as provided in paragraph (a)(9)(ii) of this section, any person 
who moves from the real property or moves his or her personal property 
from the real property. (This includes a person who occupies the real 
property prior to its acquisition, but who does not meet the length of 
occupancy requirements of the Uniform Act as described at Sec. 
24.401(a) and Sec. 24.402(a)):
    (A) As a direct result of a written notice of intent to acquire (see 
Sec. 24.203(d)), the initiation of negotiations for, or the acquisition 
of, such real property in whole or in part for a project;
    (B) As a direct result of rehabilitation or demolition for a 
project; or
    (C) As a direct result of a written notice of intent to acquire, or 
the acquisition, rehabilitation or demolition of, in whole or in part, 
other real property on which the person conducts a business or farm 
operation, for a project. However, eligibility for such person under 
this paragraph applies only for purposes of obtaining relocation 
assistance advisory services under Sec. 24.205(c), and moving expenses 
under Sec. 24.301, Sec. 24.302 or Sec. 24.303.
    (ii) Persons not displaced. The following is a nonexclusive listing 
of persons who do not qualify as displaced persons under this part:

[[Page 233]]

    (A) A person who moves before the initiation of negotiations (see 
Sec. 24.403(d)), unless the Agency determines that the person was 
displaced as a direct result of the program or project;
    (B) A person who initially enters into occupancy of the property 
after the date of its acquisition for the project;
    (C) A person who has occupied the property for the purpose of 
obtaining assistance under the Uniform Act;
    (D) A person who is not required to relocate permanently as a direct 
result of a project. Such determination shall be made by the Agency in 
accordance with any guidelines established by the Federal Agency funding 
the project (See appendix A, Sec. 24.2(a)(9)(ii)(D));
    (E) An owner-occupant who moves as a result of an acquisition of 
real property as described in Sec. Sec. 24.101(a)(2) or 24.101(b)(1) or 
(2), or as a result of the rehabilitation or demolition of the real 
property. (However, the displacement of a tenant as a direct result of 
any acquisition, rehabilitation or demolition for a Federal or 
federally-assisted project is subject to this part.);
    (F) A person whom the Agency determines is not displaced as a direct 
result of a partial acquisition;
    (G) A person who, after receiving a notice of relocation eligibility 
(described at Sec. 24.203(b)), is notified in writing that he or she 
will not be displaced for a project. Such written notification shall not 
be issued unless the person has not moved and the Agency agrees to 
reimburse the person for any expenses incurred to satisfy any binding 
contractual relocation obligations entered into after the effective date 
of the notice of relocation eligibility;
    (H) An owner-occupant who conveys his or her property, as described 
in Sec. Sec. 24.101(a)(2) or 24.101(b)(1) or (2), after being informed 
in writing that if a mutually satisfactory agreement on terms of the 
conveyance cannot be reached, the Agency will not acquire the property. 
In such cases, however, any resulting displacement of a tenant is 
subject to the regulations in this part;
    (I) A person who retains the right of use and occupancy of the real 
property for life following its acquisition by the Agency;
    (J) An owner who retains the right of use and occupancy of the real 
property for a fixed term after its acquisition by the Department of the 
Interior under Pub. L. 93-477, Appropriations for National Park System, 
or Pub. L. 93-303, Land and Water Conservation Fund, except that such 
owner remains a displaced person for purposes of subpart D of this part;
    (K) A person who is determined to be in unlawful occupancy prior to 
or after the initiation of negotiations, or a person who has been 
evicted for cause, under applicable law, as provided for in Sec. 
24.206. However, advisory assistance may be provided to unlawful 
occupants at the option of the Agency in order to facilitate the 
project;
    (L) A person who is not lawfully present in the United States and 
who has been determined to be ineligible for relocation assistance in 
accordance with Sec. 24.208; or
    (M) Tenants required to move as a result of the sale of their 
dwelling to a person using downpayment assistance provided under the 
American Dream Downpayment Initiative (ADDI) authorized by section 102 
of the American Dream Downpayment Act (Pub. L. 108-186; codified at 42 
U.S.C. 12821).
    (10) Dwelling. The term dwelling means the place of permanent or 
customary and usual residence of a person, according to local custom or 
law, including a single family house; a single family unit in a two-
family, multi-family, or multi-purpose property; a unit of a condominium 
or cooperative housing project; a non-housekeeping unit; a mobile home; 
or any other residential unit.
    (11) Dwelling site. The term dwelling site means a land area that is 
typical in size for similar dwellings located in the same neighborhood 
or rural area. (See appendix A, Sec. 24.2(a)(11).)
    (12) Farm operation. The term farm operation means any activity 
conducted solely or primarily for the production of one or more 
agricultural products or commodities, including timber, for sale or home 
use, and customarily producing such products or commodities in 
sufficient quantity to be capable of contributing materially to the 
operator's support.

[[Page 234]]

    (13) Federal financial assistance. The term Federal financial 
assistance means a grant, loan, or contribution provided by the United 
States, except any Federal guarantee or insurance and any interest 
reduction payment to an individual in connection with the purchase and 
occupancy of a residence by that individual.
    (14) Household income. The term household income means total gross 
income received for a 12 month period from all sources (earned and 
unearned) including, but not limited to wages, salary, child support, 
alimony, unemployment benefits, workers compensation, social security, 
or the net income from a business. It does not include income received 
or earned by dependent children and full time students under 18 years of 
age. (See appendix A, Sec. 24.2(a)(14) for examples of exclusions to 
income.)
    (15) Initiation of negotiations. Unless a different action is 
specified in applicable Federal program regulations, the term initiation 
of negotiations means the following:
    (i) Whenever the displacement results from the acquisition of the 
real property by a Federal Agency or State Agency, the initiation of 
negotiations means the delivery of the initial written offer of just 
compensation by the Agency to the owner or the owner's representative to 
purchase the real property for the project. However, if the Federal 
Agency or State Agency issues a notice of its intent to acquire the real 
property, and a person moves after that notice, but before delivery of 
the initial written purchase offer, the initiation of negotiations means 
the actual move of the person from the property.
    (ii) Whenever the displacement is caused by rehabilitation, 
demolition or privately undertaken acquisition of the real property (and 
there is no related acquisition by a Federal Agency or a State Agency), 
the initiation of negotiations means the notice to the person that he or 
she will be displaced by the project or, if there is no notice, the 
actual move of the person from the property.
    (iii) In the case of a permanent relocation to protect the public 
health and welfare, under the Comprehensive Environmental Response 
Compensation and Liability Act of 1980 (Pub. L. 96-510, or Superfund) 
(CERCLA) the initiation of negotiations means the formal announcement of 
such relocation or the Federal or federally-coordinated health advisory 
where the Federal Government later decides to conduct a permanent 
relocation.
    (iv) In the case of permanent relocation of a tenant as a result of 
an acquisition of real property described in Sec. 24.101(b)(1) through 
(5), the initiation of negotiations means the actions described in Sec. 
24.2(a)(15)(i) and (ii), except that such initiation of negotiations 
does not become effective, for purposes of establishing eligibility for 
relocation assistance for such tenants under this part, until there is a 
written agreement between the Agency and the owner to purchase the real 
property. (See appendix A, Sec. 24.2(a)(15)(iv)).
    (16) Lead Agency. The term Lead Agency means the Department of 
Transportation acting through the Federal Highway Administration.
    (17) Mobile home. The term mobile home includes manufactured homes 
and recreational vehicles used as residences. (See appendix A, Sec. 
24.2(a)(17)).
    (18) Mortgage. The term mortgage means such classes of liens as are 
commonly given to secure advances on, or the unpaid purchase price of, 
real property, under the laws of the State in which the real property is 
located, together with the credit instruments, if any, secured thereby.
    (19) Nonprofit organization. The term nonprofit organization means 
an organization that is incorporated under the applicable laws of a 
State as a nonprofit organization, and exempt from paying Federal income 
taxes under section 501 of the Internal Revenue Code (26 U.S.C. 501).
    (20) Owner of a dwelling. The term owner of a dwelling means a 
person who is considered to have met the requirement to own a dwelling 
if the person purchases or holds any of the following interests in real 
property:
    (i) Fee title, a life estate, a land contract, a 99 year lease, or a 
lease including any options for extension with at least 50 years to run 
from the date of acquisition; or

[[Page 235]]

    (ii) An interest in a cooperative housing project which includes the 
right to occupy a dwelling; or
    (iii) A contract to purchase any of the interests or estates 
described in Sec. 24.2(a)(1)(i) or (ii) of this section; or
    (iv) Any other interest, including a partial interest, which in the 
judgment of the Agency warrants consideration as ownership.
    (21) Person. The term person means any individual, family, 
partnership, corporation, or association.
    (22) Program or project. The phrase program or project means any 
activity or series of activities undertaken by a Federal Agency or with 
Federal financial assistance received or anticipated in any phase of an 
undertaking in accordance with the Federal funding Agency guidelines.
    (23) Salvage value. The term salvage value means the probable sale 
price of an item offered for sale to knowledgeable buyers with the 
requirement that it be removed from the property at a buyer's expense 
(i.e., not eligible for relocation assistance). This includes items for 
re-use as well as items with components that can be re-used or recycled 
when there is no reasonable prospect for sale except on this basis.
    (24) Small business. A small business is a business having not more 
than 500 employees working at the site being acquired or displaced by a 
program or project, which site is the location of economic activity. 
Sites occupied solely by outdoor advertising signs, displays, or devices 
do not qualify as a business for purposes of Sec. 24.304.
    (25) State. Any of the several States of the United States or the 
District of Columbia, the Commonwealth of Puerto Rico, any territory or 
possession of the United States, or a political subdivision of any of 
these jurisdictions.
    (26) Tenant. The term tenant means a person who has the temporary 
use and occupancy of real property owned by another.
    (27) Uneconomic remnant. The term uneconomic remnant means a parcel 
of real property in which the owner is left with an interest after the 
partial acquisition of the owner's property, and which the Agency has 
determined has little or no value or utility to the owner.
    (28) Uniform Act. The term Uniform Act means the Uniform Relocation 
Assistance and Real Property Acquisition Policies Act of 1970 (Pub. L. 
91-646, 84 Stat. 1894; 42 U.S.C. 4601 et seq.), and amendments thereto.
    (29) Unlawful occupant. A person who occupies without property 
right, title or payment of rent or a person legally evicted, with no 
legal rights to occupy a property under State law. An Agency, at its 
discretion, may consider such person to be in lawful occupancy.
    (30) Utility costs. The term utility costs means expenses for 
electricity, gas, other heating and cooking fuels, water and sewer.
    (31) Utility facility. The term utility facility means any electric, 
gas, water, steam power, or materials transmission or distribution 
system; any transportation system; any communications system, including 
cable television; and any fixtures, equipment, or other property 
associated with the operation, maintenance, or repair of any such 
system. A utility facility may be publicly, privately, or cooperatively 
owned.
    (32) Utility relocation. The term utility relocation means the 
adjustment of a utility facility required by the program or project 
undertaken by the displacing Agency. It includes removing and 
reinstalling the facility, including necessary temporary facilities; 
acquiring necessary right-of-way on a new location; moving, rearranging 
or changing the type of existing facilities; and taking any necessary 
safety and protective measures. It shall also mean constructing a 
replacement facility that has the functional equivalency of the existing 
facility and is necessary for the continued operation of the utility 
service, the project economy, or sequence of project construction.
    (33) Waiver valuation. The term waiver valuation means the valuation 
process used and the product produced when the Agency determines that an 
appraisal is not required, pursuant to Sec. 24.102(c)(2) appraisal 
waiver provisions.
    (b) Acronyms. The following acronyms are commonly used in the 
implementation of programs subject to this regulation:

[[Page 236]]

    (1) BCIS. Bureau of Citizenship and Immigration Service.
    (2) FEMA. Federal Emergency Management Agency.
    (3) FHA. Federal Housing Administration.
    (4) FHWA. Federal Highway Administration.
    (5) FIRREA. Financial Institutions Reform, Recovery, and Enforcement 
Act of 1989.
    (6) HLR. Housing of last resort.
    (7) HUD. U.S. Department of Housing and Urban Development.
    (8) MIDP. Mortgage interest differential payment.
    (9) RHP. Replacement housing payment.
    (10) STURAA. Surface Transportation and Uniform Relocation Act 
Amendments of 1987.
    (11) URA. Uniform Relocation Assistance and Real Property 
Acquisition Policies Act of 1970.
    (12) USDOT. U.S. Department of Transportation.
    (13) USPAP. Uniform Standards of Professional Appraisal Practice.



Sec. 24.3  No duplication of payments.

    No person shall receive any payment under this part if that person 
receives a payment under Federal, State, local law, or insurance 
proceeds which is determined by the Agency to have the same purpose and 
effect as such payment under this part. (See appendix A, Sec. 24.3).



Sec. 24.4  Assurances, monitoring and corrective action.

    (a) Assurances. (1) Before a Federal Agency may approve any grant 
to, or contract, or agreement with, a State Agency under which Federal 
financial assistance will be made available for a project which results 
in real property acquisition or displacement that is subject to the 
Uniform Act, the State Agency must provide appropriate assurances that 
it will comply with the Uniform Act and this part. A displacing Agency's 
assurances shall be in accordance with section 210 of the Uniform Act. 
An acquiring Agency's assurances shall be in accordance with section 305 
of the Uniform Act and must contain specific reference to any State law 
which the Agency believes provides an exception to Sec. Sec. 301 or 302 
of the Uniform Act. If, in the judgment of the Federal Agency, Uniform 
Act compliance will be served, a State Agency may provide these 
assurances at one time to cover all subsequent federally-assisted 
programs or projects. An Agency, which both acquires real property and 
displaces persons, may combine its section 210 and section 305 
assurances in one document.
    (2) If a Federal Agency or State Agency provides Federal financial 
assistance to a ``person'' causing displacement, such Federal or State 
Agency is responsible for ensuring compliance with the requirements of 
this part, notwithstanding the person's contractual obligation to the 
grantee to comply.
    (3) As an alternative to the assurance requirement described in 
paragraph (a)(1) of this section, a Federal Agency may provide Federal 
financial assistance to a State Agency after it has accepted a 
certification by such State Agency in accordance with the requirements 
in subpart G of this part.
    (b) Monitoring and corrective action. The Federal Agency will 
monitor compliance with this part, and the State Agency shall take 
whatever corrective action is necessary to comply with the Uniform Act 
and this part. The Federal Agency may also apply sanctions in accordance 
with applicable program regulations. (Also see Sec. 24.603, of this 
part).
    (c) Prevention of fraud, waste, and mismanagement. The Agency shall 
take appropriate measures to carry out this part in a manner that 
minimizes fraud, waste, and mismanagement.



Sec. 24.5  Manner of notices.

    Each notice which the Agency is required to provide to a property 
owner or occupant under this part, except the notice described at Sec. 
24.102(b), shall be personally served or sent by certified or registered 
first-class mail, return receipt requested, and documented in Agency 
files. Each notice shall be written in plain, understandable language. 
Persons who are unable to read and understand the notice must be 
provided with appropriate translation and counseling. Each notice shall 
indicate the name and telephone number of a person

[[Page 237]]

who may be contacted for answers to questions or other needed help.



Sec. 24.6  Administration of jointly-funded projects.

    Whenever two or more Federal Agencies provide financial assistance 
to an Agency or Agencies, other than a Federal Agency, to carry out 
functionally or geographically related activities, which will result in 
the acquisition of property or the displacement of a person, the Federal 
Agencies may by agreement designate one such Agency as the cognizant 
Federal Agency. In the unlikely event that agreement among the Agencies 
cannot be reached as to which Agency shall be the cognizant Federal 
Agency, then the Lead Agency shall designate one of such Agencies to 
assume the cognizant role. At a minimum, the agreement shall set forth 
the federally-assisted activities which are subject to its terms and 
cite any policies and procedures, in addition to this part, that are 
applicable to the activities under the agreement. Under the agreement, 
the cognizant Federal Agency shall assure that the project is in 
compliance with the provisions of the Uniform Act and this part. All 
federally-assisted activities under the agreement shall be deemed a 
project for the purposes of this part.



Sec. 24.7  Federal Agency waiver of regulations.

    The Federal Agency funding the project may waive any requirement in 
this part not required by law if it determines that the waiver does not 
reduce any assistance or protection provided to an owner or displaced 
person under this part. Any request for a waiver shall be justified on a 
case-by-case basis.



Sec. 24.8  Compliance with other laws and regulations.

    The implementation of this part must be in compliance with other 
applicable Federal laws and implementing regulations, including, but not 
limited to, the following:
    (a) Section I of the Civil Rights Act of 1866 (42 U.S.C. 1982 et 
seq.).
    (b) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et 
seq.).
    (c) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 3601 et 
seq.), as amended.
    (d) The National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
seq.).
    (e) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 790 et 
seq.).
    (f) The Flood Disaster Protection Act of 1973 (Pub. L. 93-234).
    (g) The Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.).
    (h) Executive Order 11063--Equal Opportunity and Housing, as amended 
by Executive Order 12892.
    (i) Executive Order 11246--Equal Employment Opportunity, as amended.
    (j) Executive Order 11625--Minority Business Enterprise.
    (k) Executive Orders 11988--Floodplain Management, and 11990--
Protection of Wetlands.
    (l) Executive Order 12250--Leadership and Coordination of Non-
Discrimination Laws.
    (m) Executive Order 12630--Governmental Actions and Interference 
with Constitutionally Protected Property Rights.
    (n) Robert T. Stafford Disaster Relief and Emergency Assistance Act, 
as amended (42 U.S.C. 5121 et seq.).
    (o) Executive Order 12892--Leadership and Coordination of Fair 
Housing in Federal Programs: Affirmatively Furthering Fair Housing 
(January 17, 1994).



Sec. 24.9  Recordkeeping and reports.

    (a) Records. The Agency shall maintain adequate records of its 
acquisition and displacement activities in sufficient detail to 
demonstrate compliance with this part. These records shall be retained 
for at least 3 years after each owner of a property and each person 
displaced from the property receives the final payment to which he or 
she is entitled under this part, or in accordance with the applicable 
regulations of the Federal funding Agency, whichever is later.
    (b) Confidentiality of records. Records maintained by an Agency in 
accordance with this part are confidential regarding their use as public 
information, unless applicable law provides otherwise.
    (c) Reports. The Agency shall submit a report of its real property 
acquisition and displacement activities under this

[[Page 238]]

part if required by the Federal Agency funding the project. A report 
will not be required more frequently than every 3 years, or as the 
Uniform Act provides, unless the Federal funding Agency shows good 
cause. The report shall be prepared and submitted using the format 
contained in appendix B of this part.



Sec. 24.10  Appeals.

    (a) General. The Agency shall promptly review appeals in accordance 
with the requirements of applicable law and this part.
    (b) Actions which may be appealed. Any aggrieved person may file a 
written appeal with the Agency in any case in which the person believes 
that the Agency has failed to properly consider the person's application 
for assistance under this part. Such assistance may include, but is not 
limited to, the person's eligibility for, or the amount of, a payment 
required under Sec. 24.106 or Sec. 24.107, or a relocation payment 
required under this part. The Agency shall consider a written appeal 
regardless of form.
    (c) Time limit for initiating appeal. The Agency may set a 
reasonable time limit for a person to file an appeal. The time limit 
shall not be less than 60 days after the person receives written 
notification of the Agency's determination on the person's claim.
    (d) Right to representation. A person has a right to be represented 
by legal counsel or other representative in connection with his or her 
appeal, but solely at the person's own expense.
    (e) Review of files by person making appeal. The Agency shall permit 
a person to inspect and copy all materials pertinent to his or her 
appeal, except materials which are classified as confidential by the 
Agency. The Agency may, however, impose reasonable conditions on the 
person's right to inspect, consistent with applicable laws.
    (f) Scope of review of appeal. In deciding an appeal, the Agency 
shall consider all pertinent justification and other material submitted 
by the person, and all other available information that is needed to 
ensure a fair and full review of the appeal.
    (g) Determination and notification after appeal. Promptly after 
receipt of all information submitted by a person in support of an 
appeal, the Agency shall make a written determination on the appeal, 
including an explanation of the basis on which the decision was made, 
and furnish the person a copy. If the full relief requested is not 
granted, the Agency shall advise the person of his or her right to seek 
judicial review of the Agency decision.
    (h) Agency official to review appeal. The Agency official conducting 
the review of the appeal shall be either the head of the Agency or his 
or her authorized designee. However, the official shall not have been 
directly involved in the action appealed.



                   Subpart B_Real Property Acquisition



Sec. 24.101  Applicability of acquisition requirements.

    (a) Direct Federal program or project. (1) The requirements of this 
subpart apply to any acquisition of real property for a direct Federal 
program or project, except acquisition for a program or project that is 
undertaken by the Tennessee Valley Authority or the Rural Utilities 
Service. (See appendix A, Sec. 24.101(a).)
    (2) If a Federal Agency (except for the Tennessee Valley Authority 
or the Rural Utilities Service) will not acquire a property because 
negotiations fail to result in an agreement, the owner of the property 
shall be so informed in writing. Owners of such properties are not 
displaced persons, (see Sec. Sec. 24.2(a)(9)(ii)(E) or (H)), and as 
such, are not entitled to relocation assistance benefits. However, 
tenants on such properties may be eligible for relocation assistance 
benefits. (See Sec. 24.2(a)(9)).
    (b) Programs and projects receiving Federal financial assistance. 
The requirements of this subpart apply to any acquisition of real 
property for programs and projects where there is Federal financial 
assistance in any part of project costs except for the acquisitions 
described in paragraphs (b)(1) through (5) of this section. The 
relocation assistance provisions in this part are applicable to any 
tenants that must move as a result of an acquisition described in 
paragraphs (b)(1) through

[[Page 239]]

(5) of this section. Such tenants are considered displaced persons. (See 
Sec. 24.2(a)(9).)
    (1) The requirements of Subpart B do not apply to acquisitions that 
meet all of the following conditions in paragraphs (b)(1)(i) through 
(iv):
    (i) No specific site or property needs to be acquired, although the 
Agency may limit its search for alternative sites to a general 
geographic area. Where an Agency wishes to purchase more than one site 
within a general geographic area on this basis, all owners are to be 
treated similarly. (See appendix A, Sec. 24.101(b)(1)(i).)
    (ii) The property to be acquired is not part of an intended, 
planned, or designated project area where all or substantially all of 
the property within the area is to be acquired within specific time 
limits.
    (iii) The Agency will not acquire the property if negotiations fail 
to result in an amicable agreement, and the owner is so informed in 
writing.
    (iv) The Agency will inform the owner in writing of what it believes 
to be the market value of the property. (See appendix A, Sec. 
24.101(b)(1)(iv) and (2)(ii).)
    (2) Acquisitions for programs or projects undertaken by an Agency or 
person that receives Federal financial assistance but does not have 
authority to acquire property by eminent domain, provided that such 
Agency or person shall:
    (i) Prior to making an offer for the property, clearly advise the 
owner that it is unable to acquire the property if negotiations fail to 
result in an agreement; and
    (ii) Inform the owner in writing of what it believes to be the 
market value of the property. (See appendix A, Sec. 24.101(b)(1)(iv) 
and (2)(ii).)
    (3) The acquisition of real property from a Federal Agency, State, 
or State Agency, if the Agency desiring to make the purchase does not 
have authority to acquire the property through condemnation.
    (4) The acquisition of real property by a cooperative from a person 
who, as a condition of membership in the cooperative, has agreed to 
provide without charge any real property that is needed by the 
cooperative.
    (5) Acquisition for a program or project that receives Federal 
financial assistance from the Tennessee Valley Authority or the Rural 
Utilities Service.
    (c) Less-than-full-fee interest in real property. (1) The provisions 
of this subpart apply when acquiring fee title subject to retention of a 
life estate or a life use; to acquisition by leasing where the lease 
term, including option(s) for extension, is 50 years or more; and to the 
acquisition of permanent and/or temporary easements necessary for the 
project. However, the Agency may apply these regulations to any less-
than-full-fee acquisition that, in its judgment, should be covered.
    (2) The provisions of this subpart do not apply to temporary 
easements or permits needed solely to perform work intended exclusively 
for the benefit of the property owner, which work may not be done if 
agreement cannot be reached.
    (d) Federally-assisted projects. For projects receiving Federal 
financial assistance, the provisions of Sec. Sec. 24.102, 24.103, 
24.104, and 24.105 apply to the greatest extent practicable under State 
law. (See Sec. 24.4(a).)



Sec. 24.102  Basic acquisition policies.

    (a) Expeditious acquisition. The Agency shall make every reasonable 
effort to acquire the real property expeditiously by negotiation.
    (b) Notice to owner. As soon as feasible, the Agency shall notify 
the owner in writing of the Agency's interest in acquiring the real 
property and the basic protections provided to the owner by law and this 
part. (See Sec. 24.203.)
    (c) Appraisal, waiver thereof, and invitation to owner. (1) Before 
the initiation of negotiations the real property to be acquired shall be 
appraised, except as provided in Sec. 24.102 (c)(2), and the owner, or 
the owner's designated representative, shall be given an opportunity to 
accompany the appraiser during the appraiser's inspection of the 
property.
    (2) An appraisal is not required if:
    (i) The owner is donating the property and releases the Agency from 
its obligation to appraise the property; or

[[Page 240]]

    (ii) The Agency determines that an appraisal is unnecessary because 
the valuation problem is uncomplicated and the anticipated value of the 
proposed acquisition is estimated at $10,000 or less, based on a review 
of available data.
    (A) When an appraisal is determined to be unnecessary, the Agency 
shall prepare a waiver valuation.
    (B) The person performing the waiver valuation must have sufficient 
understanding of the local real estate market to be qualified to make 
the waiver valuation.
    (C) The Federal Agency funding the project may approve exceeding the 
$10,000 threshold, up to a maximum of $25,000, if the Agency acquiring 
the real property offers the property owner the option of having the 
Agency appraise the property. If the property owner elects to have the 
Agency appraise the property, the Agency shall obtain an appraisal and 
not use procedures described in this paragraph. (See appendix A, Sec. 
24.102(c)(2).)
    (d) Establishment and offer of just compensation. Before the 
initiation of negotiations, the Agency shall establish an amount which 
it believes is just compensation for the real property. The amount shall 
not be less than the approved appraisal of the fair market value of the 
property, taking into account the value of allowable damages or benefits 
to any remaining property. An Agency official must establish the amount 
believed to be just compensation. (See Sec. 24.104.) Promptly 
thereafter, the Agency shall make a written offer to the owner to 
acquire the property for the full amount believed to be just 
compensation. (See appendix A, Sec. 24.102(d).)
    (e) Summary statement. Along with the initial written purchase 
offer, the owner shall be given a written statement of the basis for the 
offer of just compensation, which shall include:
    (1) A statement of the amount offered as just compensation. In the 
case of a partial acquisition, the compensation for the real property to 
be acquired and the compensation for damages, if any, to the remaining 
real property shall be separately stated.
    (2) A description and location identification of the real property 
and the interest in the real property to be acquired.
    (3) An identification of the buildings, structures, and other 
improvements (including removable building equipment and trade fixtures) 
which are included as part of the offer of just compensation. Where 
appropriate, the statement shall identify any other separately held 
ownership interest in the property, e.g., a tenant-owned improvement, 
and indicate that such interest is not covered by this offer.
    (f) Basic negotiation procedures. The Agency shall make all 
reasonable efforts to contact the owner or the owner's representative 
and discuss its offer to purchase the property, including the basis for 
the offer of just compensation and explain its acquisition policies and 
procedures, including its payment of incidental expenses in accordance 
with Sec. 24.106. The owner shall be given reasonable opportunity to 
consider the offer and present material which the owner believes is 
relevant to determining the value of the property and to suggest 
modification in the proposed terms and conditions of the purchase. The 
Agency shall consider the owner's presentation. (See appendix A, Sec. 
24.102(f).)
    (g) Updating offer of just compensation. If the information 
presented by the owner, or a material change in the character or 
condition of the property, indicates the need for new appraisal 
information, or if a significant delay has occurred since the time of 
the appraisal(s) of the property, the Agency shall have the appraisal(s) 
updated or obtain a new appraisal(s). If the latest appraisal 
information indicates that a change in the purchase offer is warranted, 
the Agency shall promptly reestablish just compensation and offer that 
amount to the owner in writing.
    (h) Coercive action. The Agency shall not advance the time of 
condemnation, or defer negotiations or condemnation or the deposit of 
funds with the court, or take any other coercive action in order to 
induce an agreement on the price to be paid for the property.
    (i) Administrative settlement. The purchase price for the property 
may exceed the amount offered as just compensation when reasonable 
efforts to negotiate an agreement at that

[[Page 241]]

amount have failed and an authorized Agency official approves such 
administrative settlement as being reasonable, prudent, and in the 
public interest. When Federal funds pay for or participate in 
acquisition costs, a written justification shall be prepared, which 
states what available information, including trial risks, supports such 
a settlement. (See appendix A, Sec. 24.102(i).)
    (j) Payment before taking possession. Before requiring the owner to 
surrender possession of the real property, the Agency shall pay the 
agreed purchase price to the owner, or in the case of a condemnation, 
deposit with the court, for the benefit of the owner, an amount not less 
than the Agency's approved appraisal of the fair market value of such 
property, or the court award of compensation in the condemnation 
proceeding for the property. In exceptional circumstances, with the 
prior approval of the owner, the Agency may obtain a right-of-entry for 
construction purposes before making payment available to an owner. (See 
appendix A, Sec. 24.102(j).)
    (k) Uneconomic remnant. If the acquisition of only a portion of a 
property would leave the owner with an uneconomic remnant, the Agency 
shall offer to acquire the uneconomic remnant along with the portion of 
the property needed for the project. (See Sec. 24.2(a)(27).)
    (l) Inverse condemnation. If the Agency intends to acquire any 
interest in real property by exercise of the power of eminent domain, it 
shall institute formal condemnation proceedings and not intentionally 
make it necessary for the owner to institute legal proceedings to prove 
the fact of the taking of the real property.
    (m) Fair rental. If the Agency permits a former owner or tenant to 
occupy the real property after acquisition for a short term, or a period 
subject to termination by the Agency on short notice, the rent shall not 
exceed the fair market rent for such occupancy. (See appendix A, Sec. 
24.102(m).)
    (n) Conflict of interest. (1) The appraiser, review appraiser or 
person performing the waiver valuation shall not have any interest, 
direct or indirect, in the real property being valued for the Agency.
    Compensation for making an appraisal or waiver valuation shall not 
be based on the amount of the valuation estimate.
    (2) No person shall attempt to unduly influence or coerce an 
appraiser, review appraiser, or waiver valuation preparer regarding any 
valuation or other aspect of an appraisal, review or waiver valuation. 
Persons functioning as negotiators may not supervise or formally 
evaluate the performance of any appraiser or review appraiser performing 
appraisal or appraisal review work, except that, for a program or 
project receiving Federal financial assistance, the Federal funding 
Agency may waive this requirement if it determines it would create a 
hardship for the Agency.
    (3) An appraiser, review appraiser, or waiver valuation preparer 
making an appraisal, appraisal review or waiver valuation may be 
authorized by the Agency to act as a negotiator for real property for 
which that person has made an appraisal, appraisal review or waiver 
valuation only if the offer to acquire the property is $10,000, or less. 
(See appendix A, Sec. 24.102(n).)

[70 FR 611, Jan. 4, 2005, as amended at 70 FR 22611, May 2, 2005]



Sec. 24.103  Criteria for appraisals.

    (a) Appraisal requirements. This section sets forth the requirements 
for real property acquisition appraisals for Federal and federally-
assisted programs. Appraisals are to be prepared according to these 
requirements, which are intended to be consistent with the Uniform 
Standards of Professional Appraisal Practice (USPAP). \1\ (See appendix 
A, Sec. 24.103(a).) The Agency may have appraisal requirements that 
supplement these requirements, including, to the extent appropriate, the 
Uniform

[[Page 242]]

Appraisal Standards for Federal Land Acquisition (UASFLA). \2\
---------------------------------------------------------------------------

    \1\ Uniform Standards of Professional Appraisal Practice (USPAP). 
Published by The Appraisal Foundation, a nonprofit educational 
organization. Copies may be ordered from The Appraisal Foundation at the 
following URL: http://www.appraisalfoundation.org/htm/USPAP2004/toc.htm.
    \2\ The ``Uniform Appraisal Standards for Federal Land 
Acquisitions'' is published by the Interagency Land Acquisition 
Conference. It is a compendium of Federal eminent domain appraisal law, 
both case and statute, regulations and practices. It is available at 
http://www.usdoj.gov/enrd/land-ack/toc.htm or in soft cover format from 
the Appraisal Institute at http://www.appraisalinstitute.org/econom/
publications/Default.asp and select ``Legal/Regulatory'' or call 888-
570-4545.
---------------------------------------------------------------------------

    (1) The Agency acquiring real property has a legitimate role in 
contributing to the appraisal process, especially in developing the 
scope of work and defining the appraisal problem. The scope of work and 
development of an appraisal under these requirements depends on the 
complexity of the appraisal problem.
    (2) The Agency has the responsibility to assure that the appraisals 
it obtains are relevant to its program needs, reflect established and 
commonly accepted Federal and federally-assisted program appraisal 
practice, and as a minimum, complies with the definition of appraisal in 
Sec. 24.2(a)(3) and the five following requirements: (See appendix A, 
Sec. Sec. 24.103 and 24.103(a).)
    (i) An adequate description of the physical characteristics of the 
property being appraised (and, in the case of a partial acquisition, an 
adequate description of the remaining property), including items 
identified as personal property, a statement of the known and observed 
encumbrances, if any, title information, location, zoning, present use, 
an analysis of highest and best use, and at least a 5-year sales history 
of the property. (See appendix A, Sec. 24.103(a)(1).)
    (ii) All relevant and reliable approaches to value consistent with 
established Federal and federally-assisted program appraisal practices. 
If the appraiser uses more than one approach, there shall be an analysis 
and reconciliation of approaches to value used that is sufficient to 
support the appraiser's opinion of value. (See appendix A, Sec. 
24.103(a).)
    (iii) A description of comparable sales, including a description of 
all relevant physical, legal, and economic factors such as parties to 
the transaction, source and method of financing, and verification by a 
party involved in the transaction.
    (iv) A statement of the value of the real property to be acquired 
and, for a partial acquisition, a statement of the value of the damages 
and benefits, if any, to the remaining real property, where appropriate.
    (v) The effective date of valuation, date of appraisal, signature, 
and certification of the appraiser.
    (b) Influence of the project on just compensation. The appraiser 
shall disregard any decrease or increase in the fair market value of the 
real property caused by the project for which the property is to be 
acquired, or by the likelihood that the property would be acquired for 
the project, other than that due to physical deterioration within the 
reasonable control of the owner. (See appendix A, Sec. 24.103(b).)
    (c) Owner retention of improvements. If the owner of a real property 
improvement is permitted to retain it for removal from the project site, 
the amount to be offered for the interest in the real property to be 
acquired shall be not less than the difference between the amount 
determined to be just compensation for the owner's entire interest in 
the real property and the salvage value (defined at Sec. 24.2(a)(24)) 
of the retained improvement.
    (d) Qualifications of appraisers and review appraisers. (1) The 
Agency shall establish criteria for determining the minimum 
qualifications and competency of appraisers and review appraisers. 
Qualifications shall be consistent with the scope of work for the 
assignment. The Agency shall review the experience, education, training, 
certification/licensing, designation(s) and other qualifications of 
appraisers, and review appraisers, and use only those determined by the 
Agency to be qualified. (See appendix A, Sec. 24.103(d)(1).)
    (2) If the Agency uses a contract (fee) appraiser to perform the 
appraisal, such appraiser shall be State licensed or certified in 
accordance with title XI of the Financial Institutions Reform,

[[Page 243]]

Recovery, and Enforcement Act of 1989 (FIRREA) (12 U.S.C. 3331 et seq.).

[70 FR 611, Jan. 4, 2005, as amended at 70 FR 22611, May 2, 2005]



Sec. 24.104  Review of appraisals.

    The Agency shall have an appraisal review process and, at a minimum:
    (a) A qualified review appraiser (see Sec. 24.103(d)(1) and 
appendix A, Sec. 24.104) shall examine the presentation and analysis of 
market information in all appraisals to assure that they meet the 
definition of appraisal found in 49 CFR 24.2(a)(3), appraisal 
requirements found in 49 CFR 24.103 and other applicable requirements, 
including, to the extent appropriate, the UASFLA, and support the 
appraiser's opinion of value. The level of review analysis depends on 
the complexity of the appraisal problem. As needed, the review appraiser 
shall, prior to acceptance, seek necessary corrections or revisions. The 
review appraiser shall identify each appraisal report as recommended (as 
the basis for the establishment of the amount believed to be just 
compensation), accepted (meets all requirements, but not selected as 
recommended or approved), or not accepted. If authorized by the Agency 
to do so, the staff review appraiser shall also approve the appraisal 
(as the basis for the establishment of the amount believed to be just 
compensation), and, if also authorized to do so, develop and report the 
amount believed to be just compensation. (See appendix A, Sec. 
24.104(a).)
    (b) If the review appraiser is unable to recommend (or approve) an 
appraisal as an adequate basis for the establishment of the offer of 
just compensation, and it is determined by the acquiring Agency that it 
is not practical to obtain an additional appraisal, the review appraiser 
may, as part of the review, present and analyze market information in 
conformance with Sec. 24.103 to support a recommended (or approved) 
value. (See appendix A, Sec. 24.104(b).)
    (c) The review appraiser shall prepare a written report that 
identifies the appraisal reports reviewed and documents the findings and 
conclusions arrived at during the review of the appraisal(s). Any 
damages or benefits to any remaining property shall be identified in the 
review appraiser's report. The review appraiser shall also prepare a 
signed certification that states the parameters of the review. The 
certification shall state the approved value, and, if the review 
appraiser is authorized to do so, the amount believed to be just 
compensation for the acquisition. (See appendix A, Sec. 24.104(c).)



Sec. 24.105  Acquisition of tenant-owned improvements.

    (a) Acquisition of improvements. When acquiring any interest in real 
property, the Agency shall offer to acquire at least an equal interest 
in all buildings, structures, or other improvements located upon the 
real property to be acquired, which it requires to be removed or which 
it determines will be adversely affected by the use to which such real 
property will be put. This shall include any improvement of a tenant-
owner who has the right or obligation to remove the improvement at the 
expiration of the lease term.
    (b) Improvements considered to be real property. Any building, 
structure, or other improvement, which would be considered to be real 
property if owned by the owner of the real property on which it is 
located, shall be considered to be real property for purposes of this 
subpart.
    (c) Appraisal and Establishment of Just Compensation for a Tenant-
Owned Improvement. Just compensation for a tenant-owned improvement is 
the amount which the improvement contributes to the fair market value of 
the whole property, or its salvage value, whichever is greater. (Salvage 
value is defined at Sec. 24.2(a)(23).)
    (d) Special conditions for tenant-owned improvements. No payment 
shall be made to a tenant-owner for any real property improvement 
unless:
    (1) The tenant-owner, in consideration for the payment, assigns, 
transfers, and releases to the Agency all of the tenant-owner's right, 
title, and interest in the improvement;
    (2) The owner of the real property on which the improvement is 
located disclaims all interest in the improvement; and
    (3) The payment does not result in the duplication of any 
compensation otherwise authorized by law.

[[Page 244]]

    (e) Alternative compensation. Nothing in this subpart shall be 
construed to deprive the tenant-owner of any right to reject payment 
under this subpart and to obtain payment for such property interests in 
accordance with other applicable law.

[70 FR 611, Jan. 4, 2005, as amended at 70 FR 22611, May 2, 2005]



Sec. 24.106  Expenses incidental to transfer of title to the Agency.

    (a) The owner of the real property shall be reimbursed for all 
reasonable expenses the owner necessarily incurred for:
    (1) Recording fees, transfer taxes, documentary stamps, evidence of 
title, boundary surveys, legal descriptions of the real property, and 
similar expenses incidental to conveying the real property to the 
Agency. However, the Agency is not required to pay costs solely required 
to perfect the owner's title to the real property;
    (2) Penalty costs and other charges for prepayment of any 
preexisting recorded mortgage entered into in good faith encumbering the 
real property; and
    (3) The pro rata portion of any prepaid real property taxes which 
are allocable to the period after the Agency obtains title to the 
property or effective possession of it, whichever is earlier.
    (b) Whenever feasible, the Agency shall pay these costs directly to 
the billing agent so that the owner will not have to pay such costs and 
then seek reimbursement from the Agency.



Sec. 24.107  Certain litigation expenses.

    The owner of the real property shall be reimbursed for any 
reasonable expenses, including reasonable attorney, appraisal, and 
engineering fees, which the owner actually incurred because of a 
condemnation proceeding, if:
    (a) The final judgment of the court is that the Agency cannot 
acquire the real property by condemnation;
    (b) The condemnation proceeding is abandoned by the Agency other 
than under an agreed-upon settlement; or
    (c) The court having jurisdiction renders a judgment in favor of the 
owner in an inverse condemnation proceeding or the Agency effects a 
settlement of such proceeding.



Sec. 24.108  Donations.

    An owner whose real property is being acquired may, after being 
fully informed by the Agency of the right to receive just compensation 
for such property, donate such property or any part thereof, any 
interest therein, or any compensation paid therefore, to the Agency as 
such owner shall determine. The Agency is responsible for ensuring that 
an appraisal of the real property is obtained unless the owner releases 
the Agency from such obligation, except as provided in Sec. 
24.102(c)(2).



                Subpart C_General Relocation Requirements



Sec. 24.201  Purpose.

    This subpart prescribes general requirements governing the provision 
of relocation payments and other relocation assistance in this part.



Sec. 24.202  Applicability.

    These requirements apply to the relocation of any displaced person 
as defined at Sec. 24.2(a)(9). Any person who qualifies as a displaced 
person must be fully informed of his or her rights and entitlements to 
relocation assistance and payments provided by the Uniform Act and this 
regulation. (See appendix A, Sec. 24.202.)



Sec. 24.203  Relocation notices.

    (a) General information notice. As soon as feasible, a person 
scheduled to be displaced shall be furnished with a general written 
description of the displacing Agency's relocation program which does at 
least the following:
    (1) Informs the person that he or she may be displaced for the 
project and generally describes the relocation payment(s) for which the 
person may be eligible, the basic conditions of eligibility, and the 
procedures for obtaining the payment(s);
    (2) Informs the displaced person that he or she will be given 
reasonable relocation advisory services, including referrals to 
replacement properties, help in filing payment claims, and other

[[Page 245]]

necessary assistance to help the displaced person successfully relocate;
    (3) Informs the displaced person that he or she will not be required 
to move without at least 90 days advance written notice (see paragraph 
(c) of this section), and informs any person to be displaced from a 
dwelling that he or she cannot be required to move permanently unless at 
least one comparable replacement dwelling has been made available;
    (4) Informs the displaced person that any person who is an alien not 
lawfully present in the United States is ineligible for relocation 
advisory services and relocation payments, unless such ineligibility 
would result in exceptional and extremely unusual hardship to a 
qualifying spouse, parent, or child, as defined in Sec. 24.208(h); and
    (5) Describes the displaced person's right to appeal the Agency's 
determination as to a person's application for assistance for which a 
person may be eligible under this part.
    (b) Notice of relocation eligibility. Eligibility for relocation 
assistance shall begin on the date of a notice of intent to acquire 
(described in Sec. 24.203(d)), the initiation of negotiations (defined 
in Sec. 24.2(a)(15)), or actual acquisition, whichever occurs first. 
When this occurs, the Agency shall promptly notify all occupants in 
writing of their eligibility for applicable relocation assistance.
    (c) Ninety-day notice--(1) General. No lawful occupant shall be 
required to move unless he or she has received at least 90 days advance 
written notice of the earliest date by which he or she may be required 
to move.
    (2) Timing of notice. The displacing Agency may issue the notice 90 
days or earlier before it expects the person to be displaced.
    (3) Content of notice. The 90-day notice shall either state a 
specific date as the earliest date by which the occupant may be required 
to move, or state that the occupant will receive a further notice 
indicating, at least 30 days in advance, the specific date by which he 
or she must move. If the 90-day notice is issued before a comparable 
replacement dwelling is made available, the notice must state clearly 
that the occupant will not have to move earlier than 90 days after such 
a dwelling is made available. (See Sec. 24.204(a).)
    (4) Urgent need. In unusual circumstances, an occupant may be 
required to vacate the property on less than 90 days advance written 
notice if the displacing Agency determines that a 90-day notice is 
impracticable, such as when the person's continued occupancy of the 
property would constitute a substantial danger to health or safety. A 
copy of the Agency's determination shall be included in the applicable 
case file.
    (d) Notice of intent to acquire. A notice of intent to acquire is a 
displacing Agency's written communication that is provided to a person 
to be displaced, including those to be displaced by rehabilitation or 
demolition activities from property acquired prior to the commitment of 
Federal financial assistance to the activity, which clearly sets forth 
that the Agency intends to acquire the property. A notice of intent to 
acquire establishes eligibility for relocation assistance prior to the 
initiation of negotiations and/or prior to the commitment of Federal 
financial assistance. (See Sec. 24.2(a)(9)(i)(A).)



Sec. 24.204  Availability of comparable replacement dwelling before 
displacement.

    (a) General. No person to be displaced shall be required to move 
from his or her dwelling unless at least one comparable replacement 
dwelling (defined at Sec. 24.2 (a)(6)) has been made available to the 
person. When possible, three or more comparable replacement dwellings 
shall be made available. A comparable replacement dwelling will be 
considered to have been made available to a person, if:
    (1) The person is informed of its location;
    (2) The person has sufficient time to negotiate and enter into a 
purchase agreement or lease for the property; and
    (3) Subject to reasonable safeguards, the person is assured of 
receiving the relocation assistance and acquisition payment to which the 
person is entitled in sufficient time to complete the purchase or lease 
of the property.
    (b) Circumstances permitting waiver. The Federal Agency funding the

[[Page 246]]

project may grant a waiver of the policy in paragraph (a) of this 
section in any case where it is demonstrated that a person must move 
because of:
    (1) A major disaster as defined in section 102 of the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act, as amended (42 
U.S.C. 5122);
    (2) A presidentially declared national emergency; or
    (3) Another emergency which requires immediate vacation of the real 
property, such as when continued occupancy of the displacement dwelling 
constitutes a substantial danger to the health or safety of the 
occupants or the public.
    (c) Basic conditions of emergency move. Whenever a person to be 
displaced is required to relocate from the displacement dwelling for a 
temporary period because of an emergency as described in paragraph (b) 
of this section, the Agency shall:
    (1) Take whatever steps are necessary to assure that the person is 
temporarily relocated to a decent, safe, and sanitary dwelling;
    (2) Pay the actual reasonable out-of-pocket moving expenses and any 
reasonable increase in rent and utility costs incurred in connection 
with the temporary relocation; and
    (3) Make available to the displaced person as soon as feasible, at 
least one comparable replacement dwelling. (For purposes of filing a 
claim and meeting the eligibility requirements for a relocation payment, 
the date of displacement is the date the person moves from the 
temporarily occupied dwelling.)



Sec. 24.205  Relocation planning, advisory services, and coordination.

    (a) Relocation planning. During the early stages of development, an 
Agency shall plan Federal and federally-assisted programs or projects in 
such a manner that recognizes the problems associated with the 
displacement of individuals, families, businesses, farms, and nonprofit 
organizations and develop solutions to minimize the adverse impacts of 
displacement. Such planning, where appropriate, shall precede any action 
by an Agency which will cause displacement, and should be scoped to the 
complexity and nature of the anticipated displacing activity including 
an evaluation of program resources available to carry out timely and 
orderly relocations. Planning may involve a relocation survey or study, 
which may include the following:
    (1) An estimate of the number of households to be displaced 
including information such as owner/tenant status, estimated value and 
rental rates of properties to be acquired, family characteristics, and 
special consideration of the impacts on minorities, the elderly, large 
families, and persons with disabilities when applicable.
    (2) An estimate of the number of comparable replacement dwellings in 
the area (including price ranges and rental rates) that are expected to 
be available to fulfill the needs of those households displaced. When an 
adequate supply of comparable housing is not expected to be available, 
the Agency should consider housing of last resort actions.
    (3) An estimate of the number, type and size of the businesses, 
farms, and nonprofit organizations to be displaced and the approximate 
number of employees that may be affected.
    (4) An estimate of the availability of replacement business sites. 
When an adequate supply of replacement business sites is not expected to 
be available, the impacts of displacing the businesses should be 
considered and addressed. Planning for displaced businesses which are 
reasonably expected to involve complex or lengthy moving processes or 
small businesses with limited financial resources and/or few alternative 
relocation sites should include an analysis of business moving problems.
    (5) Consideration of any special relocation advisory services that 
may be necessary from the displacing Agency and other cooperating 
Agencies.
    (b) Loans for planning and preliminary expenses. In the event that 
an Agency elects to consider using the duplicative provision in section 
215 of the Uniform Act which permits the use of project funds for loans 
to cover planning and other preliminary expenses for the development of 
additional housing, the Lead Agency will establish criteria and 
procedures for such use upon the request of the Federal Agency funding 
the program or project.

[[Page 247]]

    (c) Relocation assistance advisory services--(1) General. The Agency 
shall carry out a relocation assistance advisory program which satisfies 
the requirements of Title VI of the Civil Rights Act of 1964 (42 U.S.C. 
2000d et seq.), Title VIII of the Civil Rights Act of 1968 (42 U.S.C. 
3601 et seq.), and Executive Order 11063 (27 FR 11527, November 24, 
1962), and offer the services described in paragraph (c)(2) of this 
section. If the Agency determines that a person occupying property 
adjacent to the real property acquired for the project is caused 
substantial economic injury because of such acquisition, it may offer 
advisory services to such person.
    (2) Services to be provided. The advisory program shall include such 
measures, facilities, and services as may be necessary or appropriate in 
order to:
    (i) Determine, for nonresidential (businesses, farm and nonprofit 
organizations) displacements, the relocation needs and preferences of 
each business (farm and nonprofit organization) to be displaced and 
explain the relocation payments and other assistance for which the 
business may be eligible, the related eligibility requirements, and the 
procedures for obtaining such assistance. This shall include a personal 
interview with each business. At a minimum, interviews with displaced 
business owners and operators should include the following items:
    (A) The business's replacement site requirements, current lease 
terms and other contractual obligations and the financial capacity of 
the business to accomplish the move.
    (B) Determination of the need for outside specialists in accordance 
with Sec. 24.301(g)(12) that will be required to assist in planning the 
move, assistance in the actual move, and in the reinstallation of 
machinery and/or other personal property.
    (C) For businesses, an identification and resolution of personalty/
realty issues. Every effort must be made to identify and resolve realty/
personalty issues prior to, or at the time of, the appraisal of the 
property.
    (D) An estimate of the time required for the business to vacate the 
site.
    (E) An estimate of the anticipated difficulty in locating a 
replacement property.
    (F) An identification of any advance relocation payments required 
for the move, and the Agency's legal capacity to provide them.
    (ii) Determine, for residential displacements, the relocation needs 
and preferences of each person to be displaced and explain the 
relocation payments and other assistance for which the person may be 
eligible, the related eligibility requirements, and the procedures for 
obtaining such assistance. This shall include a personal interview with 
each residential displaced person.
    (A) Provide current and continuing information on the availability, 
purchase prices, and rental costs of comparable replacement dwellings, 
and explain that the person cannot be required to move unless at least 
one comparable replacement dwelling is made available as set forth in 
Sec. 24.204(a).
    (B) As soon as feasible, the Agency shall inform the person in 
writing of the specific comparable replacement dwelling and the price or 
rent used for establishing the upper limit of the replacement housing 
payment (see Sec. 24.403 (a) and (b)) and the basis for the 
determination, so that the person is aware of the maximum replacement 
housing payment for which he or she may qualify.
    (C) Where feasible, housing shall be inspected prior to being made 
available to assure that it meets applicable standards. (See Sec. 
24.2(a)(8).) If such an inspection is not made, the Agency shall notify 
the person to be displaced that a replacement housing payment may not be 
made unless the replacement dwelling is subsequently inspected and 
determined to be decent, safe, and sanitary.
    (D) Whenever possible, minority persons shall be given reasonable 
opportunities to relocate to decent, safe, and sanitary replacement 
dwellings, not located in an area of minority concentration, that are 
within their financial means. This policy, however, does not require an 
Agency to provide a person a larger payment than is necessary to enable 
a person to relocate to a comparable replacement dwelling. (See appendix 
A, Sec. 24.205(c)(2)(ii)(D).)

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    (E) The Agency shall offer all persons transportation to inspect 
housing to which they are referred.
    (F) Any displaced person that may be eligible for government housing 
assistance at the replacement dwelling shall be advised of any 
requirements of such government housing assistance program that would 
limit the size of the replacement dwelling (see Sec. 24.2(a)(6)(ix)), 
as well as of the long term nature of such rent subsidy, and the limited 
(42 month) duration of the relocation rental assistance payment.
    (iii) Provide, for nonresidential moves, current and continuing 
information on the availability, purchase prices, and rental costs of 
suitable commercial and farm properties and locations. Assist any person 
displaced from a business or farm operation to obtain and become 
established in a suitable replacement location.
    (iv) Minimize hardships to persons in adjusting to relocation by 
providing counseling, advice as to other sources of assistance that may 
be available, and such other help as may be appropriate.
    (v) Supply persons to be displaced with appropriate information 
concerning Federal and State housing programs, disaster loan and other 
programs administered by the Small Business Administration, and other 
Federal and State programs offering assistance to displaced persons, and 
technical help to persons applying for such assistance.
    (d) Coordination of relocation activities. Relocation activities 
shall be coordinated with project work and other displacement-causing 
activities to ensure that, to the extent feasible, persons displaced 
receive consistent treatment and the duplication of functions is 
minimized. (See Sec. 24.6.)
    (e) Any person who occupies property acquired by an Agency, when 
such occupancy began subsequent to the acquisition of the property, and 
the occupancy is permitted by a short term rental agreement or an 
agreement subject to termination when the property is needed for a 
program or project, shall be eligible for advisory services, as 
determined by the Agency.



Sec. 24.206  Eviction for cause.

    (a) Eviction for cause must conform to applicable State and local 
law. Any person who occupies the real property and is not in unlawful 
occupancy on the date of the initiation of negotiations, is presumed to 
be entitled to relocation payments and other assistance set forth in 
this part unless the Agency determines that:
    (1) The person received an eviction notice prior to the initiation 
of negotiations and, as a result of that notice is later evicted; or
    (2) The person is evicted after the initiation of negotiations for 
serious or repeated violation of material terms of the lease or 
occupancy agreement; and
    (3) In either case the eviction was not undertaken for the purpose 
of evading the obligation to make available the payments and other 
assistance set forth in this part.
    (b) For purposes of determining eligibility for relocation payments, 
the date of displacement is the date the person moves, or if later, the 
date a comparable replacement dwelling is made available. This section 
applies only to persons who would otherwise have been displaced by the 
project. (See appendix A, Sec. 24.206.)



Sec. 24.207  General requirements--claims for relocation payments.

    (a) Documentation. Any claim for a relocation payment shall be 
supported by such documentation as may be reasonably required to support 
expenses incurred, such as bills, certified prices, appraisals, or other 
evidence of such expenses. A displaced person must be provided 
reasonable assistance necessary to complete and file any required claim 
for payment.
    (b) Expeditious payments. The Agency shall review claims in an 
expeditious manner. The claimant shall be promptly notified as to any 
additional documentation that is required to support the claim. Payment 
for a claim shall be made as soon as feasible following receipt of 
sufficient documentation to support the claim.
    (c) Advanced payments. If a person demonstrates the need for an 
advanced relocation payment in order to avoid or reduce a hardship, the 
Agency shall issue the payment, subject to such

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safeguards as are appropriate to ensure that the objective of the 
payment is accomplished.
    (d) Time for filing. (1) All claims for a relocation payment shall 
be filed with the Agency no later than 18 months after:
    (i) For tenants, the date of displacement.
    (ii) For owners, the date of displacement or the date of the final 
payment for the acquisition of the real property, whichever is later.
    (2) The Agency shall waive this time period for good cause.
    (e) Notice of denial of claim. If the Agency disapproves all or part 
of a payment claimed or refuses to consider the claim on its merits 
because of untimely filing or other grounds, it shall promptly notify 
the claimant in writing of its determination, the basis for its 
determination, and the procedures for appealing that determination.
    (f) No waiver of relocation assistance. A displacing Agency shall 
not propose or request that a displaced person waive his or her rights 
or entitlements to relocation assistance and benefits provided by the 
Uniform Act and this regulation.
    (g) Expenditure of payments. Payments, provided pursuant to this 
part, shall not be considered to constitute Federal financial 
assistance. Accordingly, this part does not apply to the expenditure of 
such payments by, or for, a displaced person.



Sec. 24.208  Aliens not lawfully present in the United States.

    (a) Each person seeking relocation payments or relocation advisory 
assistance shall, as a condition of eligibility, certify:
    (1) In the case of an individual, that he or she is either a citizen 
or national of the United States, or an alien who is lawfully present in 
the United States.
    (2) In the case of a family, that each family member is either a 
citizen or national of the United States, or an alien who is lawfully 
present in the United States. The certification may be made by the head 
of the household on behalf of other family members.
    (3) In the case of an unincorporated business, farm, or nonprofit 
organization, that each owner is either a citizen or national of the 
United States, or an alien who is lawfully present in the United States. 
The certification may be made by the principal owner, manager, or 
operating officer on behalf of other persons with an ownership interest.
    (4) In the case of an incorporated business, farm, or nonprofit 
organization, that the corporation is authorized to conduct business 
within the United States.
    (b) The certification provided pursuant to paragraphs (a)(1), 
(a)(2), and (a)(3) of this section shall indicate whether such person is 
either a citizen or national of the United States, or an alien who is 
lawfully present in the United States. Requirements concerning the 
certification in addition to those contained in this rule shall be 
within the discretion of the Federal funding Agency and, within those 
parameters, that of the displacing Agency.
    (c) In computing relocation payments under the Uniform Act, if any 
member(s) of a household or owner(s) of an unincorporated business, 
farm, or nonprofit organization is (are) determined to be ineligible 
because of a failure to be legally present in the United States, no 
relocation payments may be made to him or her. Any payment(s) for which 
such household, unincorporated business, farm, or nonprofit organization 
would otherwise be eligible shall be computed for the household, based 
on the number of eligible household members and for the unincorporated 
business, farm, or nonprofit organization, based on the ratio of 
ownership between eligible and ineligible owners.
    (d) The displacing Agency shall consider the certification provided 
pursuant to paragraph (a) of this section to be valid, unless the 
displacing Agency determines in accordance with paragraph (f) of this 
section that it is invalid based on a review of an alien's documentation 
or other information that the Agency considers reliable and appropriate.
    (e) Any review by the displacing Agency of the certifications 
provided

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pursuant to paragraph (a) of this section shall be conducted in a 
nondiscriminatory fashion. Each displacing Agency will apply the same 
standard of review to all such certifications it receives, except that 
such standard may be revised periodically.
    (f) If, based on a review of an alien's documentation or other 
credible evidence, a displacing Agency has reason to believe that a 
person's certification is invalid (for example a document reviewed does 
not on its face reasonably appear to be genuine), and that, as a result, 
such person may be an alien not lawfully present in the United States, 
it shall obtain the following information before making a final 
determination:
    (1) If the Agency has reason to believe that the certification of a 
person who has certified that he or she is an alien lawfully present in 
the United States is invalid, the displacing Agency shall obtain 
verification of the alien's status from the local Bureau of Citizenship 
and Immigration Service (BCIS) Office. A list of local BCIS offices is 
available at http://www.uscis.gov/graphics/fieldoffices/alphaa.htm. Any 
request for BCIS verification shall include the alien's full name, date 
of birth and alien number, and a copy of the alien's documentation. (If 
an Agency is unable to contact the BCIS, it may contact the FHWA in 
Washington, DC, Office of Real Estate Services or Office of Chief 
Counsel for a referral to the BCIS.)
    (2) If the Agency has reason to believe that the certification of a 
person who has certified that he or she is a citizen or national is 
invalid, the displacing Agency shall request evidence of United States 
citizenship or nationality from such person and, if considered 
necessary, verify the accuracy of such evidence with the issuer.
    (g) No relocation payments or relocation advisory assistance shall 
be provided to a person who has not provided the certification described 
in this section or who has been determined to be not lawfully present in 
the United States, unless such person can demonstrate to the displacing 
Agency's satisfaction that the denial of relocation assistance will 
result in an exceptional and extremely unusual hardship to such person's 
spouse, parent, or child who is a citizen of the United States, or is an 
alien lawfully admitted for permanent residence in the United States.
    (h) For purposes of paragraph (g) of this section, ``exceptional and 
extremely unusual hardship'' to such spouse, parent, or child of the 
person not lawfully present in the United States means that the denial 
of relocation payments and advisory assistance to such person will 
directly result in:
    (1) A significant and demonstrable adverse impact on the health or 
safety of such spouse, parent, or child;
    (2) A significant and demonstrable adverse impact on the continued 
existence of the family unit of which such spouse, parent, or child is a 
member; or
    (3) Any other impact that the displacing Agency determines will have 
a significant and demonstrable adverse impact on such spouse, parent, or 
child.
    (i) The certification referred to in paragraph (a) of this section 
may be included as part of the claim for relocation payments described 
in Sec. 24.207 of this part.

(Approved by the Office of Management and Budget under control number 
2105-0508)



Sec. 24.209  Relocation payments not considered as income.

    No relocation payment received by a displaced person under this part 
shall be considered as income for the purpose of the Internal Revenue 
Code of 1954, which has been redesignated as the Internal Revenue Code 
of 1986 (Title 26, U.S. Code), or for the purpose of determining the 
eligibility or the extent of eligibility of any person for assistance 
under the Social Security Act (42 U.S. Code 301 et seq.) or any other 
Federal law, except for any Federal law providing low-income housing 
assistance.



           Subpart D_Payments for Moving and Related Expenses



Sec. 24.301  Payment for actual reasonable moving and related expenses.

    (a) General. (1) Any owner-occupant or tenant who qualifies as a 
displaced person (defined at Sec. 24.2(a)(9)) and who

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moves from a dwelling (including a mobile home) or who moves from a 
business, farm or nonprofit organization is entitled to payment of his 
or her actual moving and related expenses, as the Agency determines to 
be reasonable and necessary.
    (2) A non-occupant owner of a rented mobile home is eligible for 
actual cost reimbursement under Sec. 24.301 to relocate the mobile 
home. If the mobile home is not acquired as real estate, but the 
homeowner-occupant obtains a replacement housing payment under one of 
the circumstances described at Sec. 24.502(a)(3), the home-owner 
occupant is not eligible for payment for moving the mobile home, but may 
be eligible for a payment for moving personal property from the mobile 
home.
    (b) Moves from a dwelling. A displaced person's actual, reasonable 
and necessary moving expenses for moving personal property from a 
dwelling may be determined based on the cost of one, or a combination of 
the following methods: (Eligible expenses for moves from a dwelling 
include the expenses described in paragraphs (g)(1) through (g)(7) of 
this section. Self-moves based on the lower of two bids or estimates are 
not eligible for reimbursement under this section.)
    (1) Commercial move--moves performed by a professional mover.
    (2) Self-move--moves that may be performed by the displaced person 
in one or a combination of the following methods:
    (i) Fixed Residential Moving Cost Schedule. (Described in Sec. 
24.302.)
    (ii) Actual cost move. Supported by receipted bills for labor and 
equipment. Hourly labor rates should not exceed the cost paid by a 
commercial mover. Equipment rental fees should be based on the actual 
cost of renting the equipment but not exceed the cost paid by a 
commercial mover.
    (c) Moves from a mobile home. A displaced person's actual, 
reasonable and necessary moving expenses for moving personal property 
from a mobile home may be determined based on the cost of one, or a 
combination of the following methods: (self-moves based on the lower of 
two bids or estimates are not eligible for reimbursement under this 
section. Eligible expenses for moves from a mobile home include those 
expenses described in paragraphs (g)(1) through (g)(7) of this section. 
In addition to the items in paragraph (a) of this section, the owner-
occupant of a mobile home that is moved as personal property and used as 
the person's replacement dwelling, is also eligible for the moving 
expenses described in paragraphs (g)(8) through (g)(10) of this 
section.)
    (1) Commercial move--moves performed by a professional mover.
    (2) Self-move--moves that may be performed by the displaced person 
in one or a combination of the following methods:
    (i) Fixed Residential Moving Cost Schedule. (Described in Sec. 
24.302.)
    (ii) Actual cost move. Supported by receipted bills for labor and 
equipment. Hourly labor rates should not exceed the cost paid by a 
commercial mover. Equipment rental fees should be based on the actual 
cost of renting the equipment but not exceed the cost paid by a 
commercial mover.
    (d) Moves from a business, farm or nonprofit organization. Personal 
property as determined by an inventory from a business, farm or 
nonprofit organization may be moved by one or a combination of the 
following methods: (Eligible expenses for moves from a business, farm or 
nonprofit organization include those expenses described in paragraphs 
(g)(1) through (g)(7) of this section and paragraphs (g)(11) through 
(g)(18) of this section and Sec. 24.303.)
    (1) Commercial move. Based on the lower of two bids or estimates 
prepared by a commercial mover. At the Agency's discretion, payment for 
a low cost or uncomplicated move may be based on a single bid or 
estimate.
    (2) Self-move. A self-move payment may be based on one or a 
combination of the following:
    (i) The lower of two bids or estimates prepared by a commercial 
mover or qualified Agency staff person. At the Agency's discretion, 
payment for a low cost or uncomplicated move may be based on a single 
bid or estimate; or
    (ii) Supported by receipted bills for labor and equipment. Hourly 
labor rates should not exceed the rates paid by a commercial mover to 
employees performing the same activity and,

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equipment rental fees should be based on the actual rental cost of the 
equipment but not to exceed the cost paid by a commercial mover.
    (e) Personal property only. Eligible expenses for a person who is 
required to move personal property from real property but is not 
required to move from a dwelling (including a mobile home), business, 
farm or nonprofit organization include those expenses described in 
paragraphs (g)(1) through (g)(7) and (g)(18) of this section. (See 
appendix A, Sec. 24.301(e).)
    (f) Advertising signs. The amount of a payment for direct loss of an 
advertising sign, which is personal property shall be the lesser of:
    (1) The depreciated reproduction cost of the sign, as determined by 
the Agency, less the proceeds from its sale; or
    (2) The estimated cost of moving the sign, but with no allowance for 
storage.
    (g) Eligible actual moving expenses. (1) Transportation of the 
displaced person and personal property. Transportation costs for a 
distance beyond 50 miles are not eligible, unless the Agency determines 
that relocation beyond 50 miles is justified.
    (2) Packing, crating, unpacking, and uncrating of the personal 
property.
    (3) Disconnecting, dismantling, removing, reassembling, and 
reinstalling relocated household appliances and other personal property. 
For businesses, farms or nonprofit organizations this includes 
machinery, equipment, substitute personal property, and connections to 
utilities available within the building; it also includes modifications 
to the personal property, including those mandated by Federal, State or 
local law, code or ordinance, necessary to adapt it to the replacement 
structure, the replacement site, or the utilities at the replacement 
site, and modifications necessary to adapt the utilities at the 
replacement site to the personal property.
    (4) Storage of the personal property for a period not to exceed 12 
months, unless the Agency determines that a longer period is necessary.
    (5) Insurance for the replacement value of the property in 
connection with the move and necessary storage.
    (6) The replacement value of property lost, stolen, or damaged in 
the process of moving (not through the fault or negligence of the 
displaced person, his or her agent, or employee) where insurance 
covering such loss, theft, or damage is not reasonably available.
    (7) Other moving-related expenses that are not listed as ineligible 
under Sec. 24.301(h), as the Agency determines to be reasonable and 
necessary.
    (8) The reasonable cost of disassembling, moving, and reassembling 
any appurtenances attached to a mobile home, such as porches, decks, 
skirting, and awnings, which were not acquired, anchoring of the unit, 
and utility ``hookup'' charges.
    (9) The reasonable cost of repairs and/or modifications so that a 
mobile home can be moved and/or made decent, safe, and sanitary.
    (10) The cost of a nonrefundable mobile home park entrance fee, to 
the extent it does not exceed the fee at a comparable mobile home park, 
if the person is displaced from a mobile home park or the Agency 
determines that payment of the fee is necessary to effect relocation.
    (11) Any license, permit, fees or certification required of the 
displaced person at the replacement location. However, the payment may 
be based on the remaining useful life of the existing license, permit, 
fees or certification.
    (12) Professional services as the Agency determines to be actual, 
reasonable and necessary for:
    (i) Planning the move of the personal property;
    (ii) Moving the personal property; and
    (iii) Installing the relocated personal property at the replacement 
location.
    (13) Relettering signs and replacing stationery on hand at the time 
of displacement that are made obsolete as a result of the move.
    (14) Actual direct loss of tangible personal property incurred as a 
result of