Direct Grant Programs, 69145-69148 [E7-23817]
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Federal Register / Vol. 72, No. 235 / Friday, December 7, 2007 / Rules and Regulations
Regulatory Fairness Boards. The
Ombudsman evaluates these actions
annually and rates each agency’s
responsiveness to small business. If you
wish to comment on actions by
employees of the Coast Guard, call 1–
888–REG–FAIR (1–888–734–3247). The
Coast Guard will not retaliate against
small entities that question or complain
about the rule or any policy or action of
the Coast Guard.
Collection of Information
This rule calls for no new collection
of information under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501–
3520).
Federalism
A rule has implications for federalism
under Executive Order 13132,
Federalism, if it has a substantial direct
effect on State or local governments and
would either preempt State law or
impose a substantial direct cost of
compliance on them. We have analyzed
this rule under that Order and have
determined that it does not have
implications for federalism.
Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act
of 1995 (2 U.S.C. 1531–1538) requires
Federal agencies to assess the effects of
their discretionary regulatory actions. In
particular, the Act addresses actions
that may result in the expenditure by a
State, local, or tribal government, in the
aggregate, or by the private sector of
$100,000,000 or more in any one year.
Though this rule will not result in such
an expenditure, we do discuss the
effects of this rule elsewhere in this
preamble.
Taking of Private Property
This rule will not affect a taking of
private property or otherwise have
taking implications under Executive
Order 12630, Governmental Actions and
Interference with Constitutionally
Protected Property Rights.
Civil Justice Reform
This rule meets applicable standards
in sections 3(a) and 3(b)(2) of Executive
Order 12988, Civil Justice Reform, to
minimize litigation, eliminate
ambiguity, and reduce burden.
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Protection of Children
We have analyzed this rule under
Executive Order 13045, Protection of
Children from Environmental Health
Risks and Safety Risks. This rule is not
an economically significant rule and
would not create an environmental risk
to health or risk to safety that might
disproportionately affect children.
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Indian Tribal Governments
This rule does not have tribal
implications under Executive Order
13175, Consultation and Coordination
with Indian Tribal Governments,
because it does not have a substantial
direct effect on one or more Indian
tribes, on the relationship between the
Federal Government and Indian tribes,
or on the distribution of power and
responsibilities between the Federal
Government and Indian tribes.
Energy Effects
We have analyzed this rule under
Executive Order 13211, Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use. We have
determined that it is not a ‘‘significant
energy action’’ under that order because
it is not a ‘‘significant regulatory action’’
under Executive Order 12866 and is not
likely to have a significant adverse effect
on the supply, distribution, or use of
energy. The Administrator of the Office
of Information and Regulatory Affairs
has not designated it as a significant
energy action. Therefore, it does not
require a Statement of Energy Effects
under Executive Order 13211.
Technical Standards
The National Technology Transfer
and Advancement Act (NTTAA) (15
U.S.C. 272 note) directs agencies to use
voluntary consensus standards in their
regulatory activities unless the agency
provides Congress, through the Office of
Management and Budget, with an
explanation of why using these
standards would be inconsistent with
applicable law or otherwise impractical.
Voluntary consensus standards are
technical standards (e.g., specifications
of materials, performance, design, or
operation; test methods; sampling
procedures; and related management
systems practices) that are developed or
adopted by voluntary consensus
standards bodies.
This rule does not use technical
standards. Therefore, we did not
consider the use of voluntary consensus
standards.
Environment
We have analyzed this rule under
Commandant Instruction M16475.lD
which guides the Coast Guard in
complying with the National
Environmental Policy Act of 1969
(NEPA) (42 U.S.C. 4321–4370f), and
have concluded that there are no factors
in this case that would limit the use of
a categorical exclusion under section
2.B.2 of the Instruction. Therefore, this
rule is categorically excluded, under
figure 2–1, paragraph (32)(e), of the
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Instruction, from further environmental
documentation.
List of Subjects in 33 CFR Part 117
Bridges.
For the reasons discussed in the
preamble, the Coast Guard amends 33
CFR part 117 as follows:
I
PART 117—DRAWBRIDGE
OPERATION REGULATIONS
1. The authority citation for part 117
continues to read as follows:
I
Authority: 33 U.S.C. 499; 33 CFR 1.05–1(g);
Department of Homeland Security Delegation
No. 0170.1
2. From 7 a.m. on December 7, 2007,
through sunset on April 30, 2008,
§ 117.261(qq) is suspended and
§ 117.261(uu) is added to read as
follows:
I
§ 117.261
Atlantic Intracoastal Waterway.
*
*
*
*
*
(uu) Jewfish Creek Bridge, mile 1134,
Key Largo. The draw shall open on
signal, except that from 7 a.m. to sunset,
the bridge shall open on the hour and
half-hour.
*
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Dated: November 23, 2007.
William Lee,
Capt. USCG, District Commander, Seventh
Coast Guard District, Acting.
[FR Doc. E7–23600 Filed 12–6–07; 8:45 am]
BILLING CODE 4910–15–P
DEPARTMENT OF EDUCATION
34 CFR Part 75
RIN 1890–AA15
[Docket ID ED–2007–OCFO–0132]
Direct Grant Programs
Office of the Chief Financial
Officer, Department of Education.
ACTION: Final regulations.
AGENCY:
SUMMARY: The Secretary amends the
Department’s regulations governing the
determination and recovery of indirect
costs by grantees. These amendments
address procedural aspects related to
the establishment of temporary indirect
cost rates, specify the temporary rate
that will apply to grants generally, and
clarify how indirect costs are
determined for a group of applicants
that apply for a single training grant.
DATES: These regulations are effective
January 7, 2008.
FOR FURTHER INFORMATION CONTACT:
Richard Mueller, U.S. Department of
Education, 830 First Street, NE., room
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21C7, Washington, DC 20202–4450.
Telephone: (202) 377–3838 or via the
Internet: Richard.Mueller@ed.gov.
If you use a telecommunications
device for the deaf (TDD), you may call
the Federal Relay Service (FRS) at 1–
800–877–8339.
Individuals with disabilities may
obtain this document in an alternative
format (e.g., Braille, large print,
audiotape, or computer diskette) on
request to the contact person listed
under FOR FURTHER INFORMATION
CONTACT.
SUPPLEMENTARY INFORMATION: On May
24, 2007, the Secretary published a
notice of proposed rulemaking (NPRM)
for these amendments in the Federal
Register (72 FR 29097). In the preamble
to the NPRM, the Secretary discussed on
pages 29098 and 29099 the major
changes proposed to the current
regulations. These changes are
summarized as follows:
• Amending § 75.560(c) and (d) to
specify the procedures used to establish
a temporary indirect cost rate for any
grantee that does not have a federally
recognized indirect cost rate.
• Amending § 75.562(c) to clarify that
a grantee cannot include the amount of
a sub-award 1 that exceeds $25,000 in
the modified total direct cost base used
to determine and charge its indirect cost
rate.
• Amending § 75.564(e) to clarify the
determination of indirect costs for a
training grant in the context of a grant
to a group of organizations that apply
together for a grant under the
procedures in §§ 75.127 through 75.129.
These final regulations provide a
temporary indirect cost rate to a grantee
that does not have a federally
recognized indirect cost rate on the date
the Department awards its first grant.
The temporary rate for such a grantee
will be 10 percent of the direct salaries
and wages of the project. These
regulations permit the use of a
temporary indirect cost rate under the
grant award for the first 90 days after the
date the Department issues the Grant
Award Notification. A grantee may
continue to charge indirect costs at the
temporary rate after the first 90 days if
the grantee submits a formal indirect
cost proposal to its cognizant agency
within those 90 days. If, after the 90-day
period, a grantee has not submitted an
indirect cost proposal to its cognizant
1 The term ‘‘sub-award,’’ as used in the final
regulations, covers both subgrants and contracts
made under a grant. However, as explained in the
NPRM, because virtually all of the Department’s
discretionary grant programs do not authorize
grantees to award subgrants, we describe the effect
of the final regulations only on contracts awarded
by grantees.
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agency, it must stop using the temporary
rate. After that period, the grantee will
not be allowed to charge any indirect
costs to its grant until it obtains a
federally recognized indirect cost rate
from its cognizant agency.
These regulations make the
Department’s practice consistent with
the practice of other Federal agencies
and reduce the number of improper
payments that result when applicants
budget indirect costs that are greater
than the actual indirect costs the
applicant can expect to recover under
Federal cost principles. As explained in
the NPRM, under the Department’s prior
practice, new grantees of the
Department were not recovering any
indirect costs until they negotiated an
indirect cost rate with their cognizant
agencies. These regulations now enable
a new grantee to recover indirect costs
at the temporary rate until it negotiates
a rate with its cognizant agency or for
90 days if it does not submit its indirect
cost rate proposal to its cognizant
agency within the 90-day period.
The regulations also clarify how the
modified total direct cost base is
determined when a grant is subject to
the eight percent indirect cost rate
limitation for training grants and specify
how to treat sub-awards (contracts) if
the indirect cost rate is applied to a
grant made to a group under the
procedures in §§ 75.127 through 75.129.
Analysis of Comments and Changes
In the NPRM we invited comments on
the proposed regulations. We did not
receive any comments. There are no
substantive differences between the
NPRM and these final regulations.
However, we have reviewed the
regulations since publication of the
NPRM and have made the following
technical changes:
• We revised § 75.560(d)(3)(i) by
deleting the words ‘‘after the date the
indirect cost proposal was submitted to
the cognizant agency’’ because this
description of the period during which
a grantee may recover costs at the
negotiated rate is stated in paragraph
(d)(3). The revised paragraph (d)(3)(i)
simply states that the total amount of
funds recovered by the grantee under
the federally recognized indirect cost
rate is reduced by the amount of
indirect costs ‘‘previously recovered
under the temporary indirect cost rate.’’
We believe these changes make the
paragraph easier to understand.
• We added a note following
§ 75.562(c)(1) to clarify that, for any
grantee that did not have a federally
recognized indirect cost rate on the date
its training grant was awarded, the
indirect costs recovered under the
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training grant limitation in
§ 75.562(c)(1) are also subject to the
limitations in § 75.560(d)(3).
Also, as a result of our internal
review, we have concluded that changes
similar to those reflected in these final
regulations also should be made to 34
CFR part 76, which applies to Stateadministered programs of the
Department. Therefore, soon we intend
to propose changes to part 76 that are
consistent with the changes in these
regulations.
Transition Issues
Because the regulations authorizing a
specified temporary indirect cost rate
confer a benefit on new grantees, the
Secretary has discretion to apply the
regulations to grants made before the
effective date of these regulations.
Under the final regulations, a grantee
must submit a formal indirect cost
proposal to its cognizant agency within
90 days after the date the Department
issues the Grant Award Notification
(GAN). However, we are aware that
some new grantees are currently in the
first budget period of their grants and do
not have Federally recognized indirect
cost rates. These grantees would benefit
from being able to use the temporary
indirect cost rate as soon as these
regulations become effective in 30 days.
Accordingly, any grantee that was or is
issued a GAN before these regulations
become effective on January 7, 2008, is
in the first budget period of its grant,
and did not have a federally recognized
indirect cost rate on the date the GAN
was issued, may begin using the
temporary indirect cost rate starting on
the effective date of these regulations
and will have until April 7, 2008 (90
days after the effective date of these
final regulations) to submit a formal
indirect cost proposal to its cognizant
agency. If a grantee submits an indirect
cost proposal within the 90 days after
the regulations become effective, it may
continue charging at the temporary rate
until it obtains a federally recognized
indirect cost rate. The Secretary takes
this action so that new grantees may
benefit from these amendments as soon
as possible.
Finally, § 75.562(c)(2) requires
grantees to exclude all contract costs in
excess of $25,000 from the base used to
calculate the total indirect cost recovery
under a training grant. This exclusion
will apply to the first training grant
(new or continuation) made to a grantee
after the date these regulations become
effective.
Executive Order 12866
We have reviewed these final
regulations in accordance with
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Federal Register / Vol. 72, No. 235 / Friday, December 7, 2007 / Rules and Regulations
Executive Order 12866. Under the terms
of the order we have assessed the
potential costs and benefits of this
regulatory action.
The potential costs associated with
the final regulations are those resulting
from statutory requirements and those
we have determined to be necessary for
administering the Department’s Direct
Grant programs effectively and
efficiently.
In assessing the potential costs and
benefits—both quantitative and
qualitative—of this regulatory action,
we have determined that the benefits
would justify the costs.
Summary of potential costs and
benefits.
These regulations impose no
additional burdens on applicants for
discretionary grants or recipients of
those grants. The regulations merely
specify the rate at which grantees can
recover indirect costs during a
temporary period when the grantee does
not have an indirect cost rate recognized
by the Federal Government and
establish procedural requirements
regarding temporary indirect cost rates.
While these final regulations prohibit a
grantee from recovering indirect costs if
the grantee has not submitted its
indirect cost proposal within the 90
days after the date the Department
issues the GAN, the burden and timing
of submitting an indirect cost rate
proposal under the procedures in the
Federal cost principles do not change at
all.
Based on the response to the NPRM
and on our review, we have determined
that these final regulations do not
require transmission of information that
any other agency or authority of the
United States gathers or makes
available.
Electronic Access to This Document
You may view this document, as well
as all other Department of Education
documents published in the Federal
Register, in text or Adobe Portable
Document Format (PDF) on the Internet
at the following site: https://www.ed.gov/
news/fedregister.
To use PDF you must have Adobe
Acrobat Reader, which is available free
at this site. If you have questions about
using PDF, call the U.S. Government
Printing Office (GPO), toll free, at 1–
888–293–6498; or in the Washington,
DC, area at (202) 512–1530.
Note: The official version of this document
is the document published in the Federal
Register. Free Internet access to the official
edition of the Federal Register and the Code
of Federal Regulations is available on GPO
Access at: https://www.gpoaccess.gov/nara/
index.html.
(Catalog of Federal Domestic Assistance
Number does not apply.)
List of Subjects in 34 CFR Part 75
Administrative practice and
procedure, Education Department, Grant
programs—education, Grant
administration, Performance reports,
Reporting and recordkeeping
requirements, Unobligated funds.
Dated: December 4, 2007.
Margaret Spellings,
Secretary of Education.
Intergovernmental Review
These regulations affect Direct Grant
programs of the Department that are
subject to Executive Order 12372 and
the regulations in 34 CFR part 79. One
of the objectives of the Executive order
is to foster an intergovernmental
partnership and to strengthen
federalism. The Executive order relies
on processes developed by State and
local governments for coordination and
review of proposed Federal financial
assistance.
This document provides early
notification of our specific plans and
actions for these programs.
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Paperwork Reduction Act of 1995
These regulations do not contain any
information collection requirements.
I
Assessment of Educational Impact
In the NPRM we requested comments
on whether the proposed regulations
would require transmission of
information that any other agency or
authority of the United States gathers or
makes available.
§ 75.560 General indirect cost rates;
exceptions.
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For the reasons discussed in the
preamble, the Secretary amends part 75
of title 34 of the Code of Federal
Regulations as follows:
PART 75—DIRECT GRANT
PROGRAMS
1. The authority citation for part 75
continues to read as follows:
I
Authority: 20 U.S.C. 1221e–3 and 3474,
unless otherwise noted.
2. Section 75.560 is amended by
revising paragraphs (b) and (c),
redesignating paragraph (d) as
paragraph (e), and adding a new
paragraph (d) to read as follows:
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(b) A grantee must have obtained a
current indirect cost rate agreement
from its cognizant agency, to charge
indirect costs to a grant. To obtain an
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69147
indirect cost rate, a grantee must submit
an indirect cost proposal to its cognizant
agency within 90 days after the date the
Department issues the Grant Award
Notification (GAN).
(c) If a grantee does not have a
federally recognized indirect cost rate
agreement, the Secretary may permit the
grantee to charge its grant for indirect
costs at a temporary rate of 10 percent
of budgeted direct salaries and wages.
(d)(1) If a grantee fails to submit an
indirect cost rate proposal to its
cognizant agency within the required 90
days, the grantee may not charge
indirect costs to its grant from the end
of the 90-day period until it obtains a
federally recognized indirect cost rate
agreement applicable to the grant.
(2) If the Secretary determines that
exceptional circumstances warrant
continuation of a temporary indirect
cost rate, the Secretary may authorize
the grantee to continue charging indirect
costs to its grant at the temporary rate
specified in paragraph (c) of this section
even though the grantee has not
submitted its indirect cost rate proposal
within the 90-day period.
(3) Once a grantee obtains a federally
recognized indirect cost rate that is
applicable to the affected grant, the
grantee may use that indirect cost rate
to claim indirect cost reimbursement for
expenditures made on or after the date
the grantee submitted its indirect cost
proposal to its cognizant agency or the
start of the project period, whichever is
later. However, this authority is subject
to the following limitations:
(i) The total amount of funds
recovered by the grantee under the
federally recognized indirect cost rate is
reduced by the amount of indirect costs
previously recovered under the
temporary indirect cost rate.
(ii) The grantee must obtain prior
approval from the Secretary to shift
direct costs to indirect costs in order to
recover indirect costs at a higher
negotiated indirect cost rate.
(iii) The grantee may not request
additional funds to recover indirect
costs that it cannot recover by shifting
direct costs to indirect costs.
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I 3. Section 75.562 is amended by
revising paragraph (c) to read as follows:
§ 75.562 Indirect cost rates for educational
training projects.
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(c)(1) Indirect cost reimbursement on
a training grant is limited to the
recipient’s actual indirect costs, as
determined in its negotiated indirect
cost rate agreement, or eight percent of
a modified total direct cost base,
whichever amount is less.
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Note to paragraph (c)(1): If the grantee did
not have a federally recognized indirect cost
rate agreement on the date the training grant
was awarded, indirect cost recovery is also
limited to the amount authorized under
§ 75.560(d)(3).
(2) For the purposes of this section, a
modified total direct cost base consists
of total direct costs minus the following:
(i) The amount of each sub-award in
excess of $25,000.
(ii) Stipends.
(iii) Tuition and related fees.
(iv) Equipment, as defined in 34 CFR
74.2 and 80.3, as applicable.
Note to paragraph (c)(2)(iv): If the grantee
has established a threshold for equipment
that is lower than $5,000 for other purposes,
it must use that threshold to exclude
equipment under the modified total direct
cost base for the purposes of this section.
(3) The eight percent indirect cost
reimbursement limit specified in
paragraph (c)(1) of this section also
applies to sub-awards that fund training,
as determined by the Secretary under
paragraph (b) of this section.
(4) The eight percent limit does not
apply to agencies of State or local
governments, including federally
recognized Indian tribal governments, as
defined in 34 CFR 80.3.
(5) Indirect costs in excess of the eight
percent limit may not be charged
directly, used to satisfy matching or
cost-sharing requirements, or charged to
another Federal award.
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4. Section 75.564 is amended by
revising paragraph (e) to read as follows:
I
§ 75.564
Reimbursement of indirect costs.
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(e)(1) Indirect costs for a group of
eligible parties (See §§ 75.127 through
75.129) are limited to the amount
derived by applying the rate of the
applicant, or a restricted rate when
applicable, to the direct cost base for the
grant in keeping with the terms of the
applicant’s federally recognized indirect
cost rate agreement.
(2) If a group of eligible parties
applies for a training grant under the
group application procedures in
§§ 75.127 through 75.129, the grant
funds allocated among the members of
the group are not considered sub-awards
for the purposes of applying the indirect
cost rate in § 75.562(c).
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[FR Doc. E7–23817 Filed 12–6–07; 8:45 am]
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ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R04–OAR–2007–1059–200748a; FRL–
8503–1]
Approval and Promulgation of
Implementation Plans Georgia:
Enhanced Inspection and Maintenance
Plan
Environmental Protection
Agency (EPA).
ACTION: Direct final rule.
AGENCY:
SUMMARY: EPA is approving revisions to
the Georgia State Implementation Plan
(SIP), submitted by the Georgia
Department of Natural Resources (GA
DNR), through the Georgia
Environmental Protection Division (GA
EPD), on September 26, 2007. The
revisions include modifications to
Georgia’s Air Quality Rules found at
Chapter 391–3–20–.21, pertaining to
rules for Enhanced Inspection and
Maintenance (I/M). Enhanced I/M was
required for 1-hour nonattainment areas
classified as serious and above, under
the Clean Air Act (CAA) as amended in
1990. The I/M program is a way to
ensure that vehicles are maintained
properly and verify that the emission
control system is operating correctly, in
order to reduce vehicle-related
emissions. This action is being taken
pursuant to section 110 of the CAA.
DATES: This direct final rule is effective
February 5, 2008 without further notice,
unless EPA receives adverse comment
by January 7, 2008. If adverse comment
is received, EPA will publish a timely
withdrawal of the direct final rule in the
Federal Register and inform the public
that the rule will not take effect.
ADDRESSES: Submit your comments,
identified by Docket ID Number, ‘‘EPA–
R04–OAR–2007–1059,’’ by one of the
following methods:
1. www.regulations.gov: Follow the
on-line instructions for submitting
comments.
2. E-mail: harder.stacy@epa.gov.
3. Fax: 404–562–9019.
4. Mail: ‘‘EPA–R04–OAR–2007–
1059,’’ Regulatory Development Section,
Air Planning Branch, Air, Pesticides and
Toxics Management Division, U.S.
Environmental Protection Agency,
Region 4, 61 Forsyth Street, SW.,
Atlanta, Georgia 30303–8960.
5. Hand Delivery or Courier: Stacy
Harder, Regulatory Development
Section, Air Planning Branch, Air,
Pesticides and Toxics Management
Division, U.S. Environmental Protection
Agency, Region 4, 61 Forsyth Street,
SW., Atlanta, Georgia 30303–8960. Such
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deliveries are only accepted during the
Regional Office’s normal hours of
operation. The Regional Office’s official
hours of business are Monday through
Friday, 8:30 a.m. to 4:30 p.m., excluding
federal holidays.
Instructions: Direct your comments to
Docket ID Number, ‘‘EPA–R04–OAR–
2007–1059.’’ EPA’s policy is that all
comments received will be included in
the public docket without change and
may be made available online at
www.regulations.gov, including any
personal information provided, unless
the comment includes information
claimed to be Confidential Business
Information (CBI) or other information
whose disclosure is restricted by statute.
Do not submit through
www.regulations.gov or e-mail,
information that you consider to be CBI
or otherwise protected. The
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means EPA will not know your identity
or contact information unless you
provide it in the body of your comment.
If you send an e-mail comment directly
to EPA without going through
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address will be automatically captured
and included as part of the comment
that is placed in the public docket and
made available on the Internet. If you
submit an electronic comment, EPA
recommends that you include your
name and other contact information in
the body of your comment and with any
disk or CD–ROM you submit. If EPA
cannot read your comment due to
technical difficulties and cannot contact
you for clarification, EPA may not be
able to consider your comment.
Electronic files should avoid the use of
special characters, any form of
encryption, and be free of any defects or
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about EPA’s public docket visit the EPA
Docket Center homepage at https://
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Docket: All documents in the
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listed in the index, some information is
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materials are available either
electronically in www.regulations.gov or
in hard copy at the Regulatory
Development Section, Air Planning
Branch, Air, Pesticides and Toxics
Management Division, U.S.
Environmental Protection Agency,
Region 4, 61 Forsyth Street, SW.,
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]]>Agencies
[Federal Register Volume 72, Number 235 (Friday, December 7, 2007)]
[Rules and Regulations]
[Pages 69145-69148]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-23817]
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DEPARTMENT OF EDUCATION
34 CFR Part 75
RIN 1890-AA15
[Docket ID ED-2007-OCFO-0132]
Direct Grant Programs
AGENCY: Office of the Chief Financial Officer, Department of Education.
ACTION: Final regulations.
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SUMMARY: The Secretary amends the Department's regulations governing
the determination and recovery of indirect costs by grantees. These
amendments address procedural aspects related to the establishment of
temporary indirect cost rates, specify the temporary rate that will
apply to grants generally, and clarify how indirect costs are
determined for a group of applicants that apply for a single training
grant.
DATES: These regulations are effective January 7, 2008.
FOR FURTHER INFORMATION CONTACT: Richard Mueller, U.S. Department of
Education, 830 First Street, NE., room
[[Page 69146]]
21C7, Washington, DC 20202-4450. Telephone: (202) 377-3838 or via the
Internet: Richard.Mueller@ed.gov.
If you use a telecommunications device for the deaf (TDD), you may
call the Federal Relay Service (FRS) at 1-800-877-8339.
Individuals with disabilities may obtain this document in an
alternative format (e.g., Braille, large print, audiotape, or computer
diskette) on request to the contact person listed under FOR FURTHER
INFORMATION CONTACT.
SUPPLEMENTARY INFORMATION: On May 24, 2007, the Secretary published a
notice of proposed rulemaking (NPRM) for these amendments in the
Federal Register (72 FR 29097). In the preamble to the NPRM, the
Secretary discussed on pages 29098 and 29099 the major changes proposed
to the current regulations. These changes are summarized as follows:
Amending Sec. 75.560(c) and (d) to specify the procedures
used to establish a temporary indirect cost rate for any grantee that
does not have a federally recognized indirect cost rate.
Amending Sec. 75.562(c) to clarify that a grantee cannot
include the amount of a sub-award \1\ that exceeds $25,000 in the
modified total direct cost base used to determine and charge its
indirect cost rate.
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\1\ The term ``sub-award,'' as used in the final regulations,
covers both subgrants and contracts made under a grant. However, as
explained in the NPRM, because virtually all of the Department's
discretionary grant programs do not authorize grantees to award
subgrants, we describe the effect of the final regulations only on
contracts awarded by grantees.
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Amending Sec. 75.564(e) to clarify the determination of
indirect costs for a training grant in the context of a grant to a
group of organizations that apply together for a grant under the
procedures in Sec. Sec. 75.127 through 75.129.
These final regulations provide a temporary indirect cost rate to a
grantee that does not have a federally recognized indirect cost rate on
the date the Department awards its first grant. The temporary rate for
such a grantee will be 10 percent of the direct salaries and wages of
the project. These regulations permit the use of a temporary indirect
cost rate under the grant award for the first 90 days after the date
the Department issues the Grant Award Notification. A grantee may
continue to charge indirect costs at the temporary rate after the first
90 days if the grantee submits a formal indirect cost proposal to its
cognizant agency within those 90 days. If, after the 90-day period, a
grantee has not submitted an indirect cost proposal to its cognizant
agency, it must stop using the temporary rate. After that period, the
grantee will not be allowed to charge any indirect costs to its grant
until it obtains a federally recognized indirect cost rate from its
cognizant agency.
These regulations make the Department's practice consistent with
the practice of other Federal agencies and reduce the number of
improper payments that result when applicants budget indirect costs
that are greater than the actual indirect costs the applicant can
expect to recover under Federal cost principles. As explained in the
NPRM, under the Department's prior practice, new grantees of the
Department were not recovering any indirect costs until they negotiated
an indirect cost rate with their cognizant agencies. These regulations
now enable a new grantee to recover indirect costs at the temporary
rate until it negotiates a rate with its cognizant agency or for 90
days if it does not submit its indirect cost rate proposal to its
cognizant agency within the 90-day period.
The regulations also clarify how the modified total direct cost
base is determined when a grant is subject to the eight percent
indirect cost rate limitation for training grants and specify how to
treat sub-awards (contracts) if the indirect cost rate is applied to a
grant made to a group under the procedures in Sec. Sec. 75.127 through
75.129.
Analysis of Comments and Changes
In the NPRM we invited comments on the proposed regulations. We did
not receive any comments. There are no substantive differences between
the NPRM and these final regulations. However, we have reviewed the
regulations since publication of the NPRM and have made the following
technical changes:
We revised Sec. 75.560(d)(3)(i) by deleting the words
``after the date the indirect cost proposal was submitted to the
cognizant agency'' because this description of the period during which
a grantee may recover costs at the negotiated rate is stated in
paragraph (d)(3). The revised paragraph (d)(3)(i) simply states that
the total amount of funds recovered by the grantee under the federally
recognized indirect cost rate is reduced by the amount of indirect
costs ``previously recovered under the temporary indirect cost rate.''
We believe these changes make the paragraph easier to understand.
We added a note following Sec. 75.562(c)(1) to clarify
that, for any grantee that did not have a federally recognized indirect
cost rate on the date its training grant was awarded, the indirect
costs recovered under the training grant limitation in Sec.
75.562(c)(1) are also subject to the limitations in Sec. 75.560(d)(3).
Also, as a result of our internal review, we have concluded that
changes similar to those reflected in these final regulations also
should be made to 34 CFR part 76, which applies to State-administered
programs of the Department. Therefore, soon we intend to propose
changes to part 76 that are consistent with the changes in these
regulations.
Transition Issues
Because the regulations authorizing a specified temporary indirect
cost rate confer a benefit on new grantees, the Secretary has
discretion to apply the regulations to grants made before the effective
date of these regulations. Under the final regulations, a grantee must
submit a formal indirect cost proposal to its cognizant agency within
90 days after the date the Department issues the Grant Award
Notification (GAN). However, we are aware that some new grantees are
currently in the first budget period of their grants and do not have
Federally recognized indirect cost rates. These grantees would benefit
from being able to use the temporary indirect cost rate as soon as
these regulations become effective in 30 days. Accordingly, any grantee
that was or is issued a GAN before these regulations become effective
on January 7, 2008, is in the first budget period of its grant, and did
not have a federally recognized indirect cost rate on the date the GAN
was issued, may begin using the temporary indirect cost rate starting
on the effective date of these regulations and will have until April 7,
2008 (90 days after the effective date of these final regulations) to
submit a formal indirect cost proposal to its cognizant agency. If a
grantee submits an indirect cost proposal within the 90 days after the
regulations become effective, it may continue charging at the temporary
rate until it obtains a federally recognized indirect cost rate. The
Secretary takes this action so that new grantees may benefit from these
amendments as soon as possible.
Finally, Sec. 75.562(c)(2) requires grantees to exclude all
contract costs in excess of $25,000 from the base used to calculate the
total indirect cost recovery under a training grant. This exclusion
will apply to the first training grant (new or continuation) made to a
grantee after the date these regulations become effective.
Executive Order 12866
We have reviewed these final regulations in accordance with
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Executive Order 12866. Under the terms of the order we have assessed
the potential costs and benefits of this regulatory action.
The potential costs associated with the final regulations are those
resulting from statutory requirements and those we have determined to
be necessary for administering the Department's Direct Grant programs
effectively and efficiently.
In assessing the potential costs and benefits--both quantitative
and qualitative--of this regulatory action, we have determined that the
benefits would justify the costs.
Summary of potential costs and benefits.
These regulations impose no additional burdens on applicants for
discretionary grants or recipients of those grants. The regulations
merely specify the rate at which grantees can recover indirect costs
during a temporary period when the grantee does not have an indirect
cost rate recognized by the Federal Government and establish procedural
requirements regarding temporary indirect cost rates. While these final
regulations prohibit a grantee from recovering indirect costs if the
grantee has not submitted its indirect cost proposal within the 90 days
after the date the Department issues the GAN, the burden and timing of
submitting an indirect cost rate proposal under the procedures in the
Federal cost principles do not change at all.
Paperwork Reduction Act of 1995
These regulations do not contain any information collection
requirements.
Intergovernmental Review
These regulations affect Direct Grant programs of the Department
that are subject to Executive Order 12372 and the regulations in 34 CFR
part 79. One of the objectives of the Executive order is to foster an
intergovernmental partnership and to strengthen federalism. The
Executive order relies on processes developed by State and local
governments for coordination and review of proposed Federal financial
assistance.
This document provides early notification of our specific plans and
actions for these programs.
Assessment of Educational Impact
In the NPRM we requested comments on whether the proposed
regulations would require transmission of information that any other
agency or authority of the United States gathers or makes available.
Based on the response to the NPRM and on our review, we have
determined that these final regulations do not require transmission of
information that any other agency or authority of the United States
gathers or makes available.
Electronic Access to This Document
You may view this document, as well as all other Department of
Education documents published in the Federal Register, in text or Adobe
Portable Document Format (PDF) on the Internet at the following site:
https://www.ed.gov/news/fedregister.
To use PDF you must have Adobe Acrobat Reader, which is available
free at this site. If you have questions about using PDF, call the U.S.
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in
the Washington, DC, area at (202) 512-1530.
Note: The official version of this document is the document
published in the Federal Register. Free Internet access to the
official edition of the Federal Register and the Code of Federal
Regulations is available on GPO Access at: https://www.gpoaccess.gov/
nara/.
(Catalog of Federal Domestic Assistance Number does not apply.)
List of Subjects in 34 CFR Part 75
Administrative practice and procedure, Education Department, Grant
programs--education, Grant administration, Performance reports,
Reporting and recordkeeping requirements, Unobligated funds.
Dated: December 4, 2007.
Margaret Spellings,
Secretary of Education.
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For the reasons discussed in the preamble, the Secretary amends part 75
of title 34 of the Code of Federal Regulations as follows:
PART 75--DIRECT GRANT PROGRAMS
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1. The authority citation for part 75 continues to read as follows:
Authority: 20 U.S.C. 1221e-3 and 3474, unless otherwise noted.
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2. Section 75.560 is amended by revising paragraphs (b) and (c),
redesignating paragraph (d) as paragraph (e), and adding a new
paragraph (d) to read as follows:
Sec. 75.560 General indirect cost rates; exceptions.
* * * * *
(b) A grantee must have obtained a current indirect cost rate
agreement from its cognizant agency, to charge indirect costs to a
grant. To obtain an indirect cost rate, a grantee must submit an
indirect cost proposal to its cognizant agency within 90 days after the
date the Department issues the Grant Award Notification (GAN).
(c) If a grantee does not have a federally recognized indirect cost
rate agreement, the Secretary may permit the grantee to charge its
grant for indirect costs at a temporary rate of 10 percent of budgeted
direct salaries and wages.
(d)(1) If a grantee fails to submit an indirect cost rate proposal
to its cognizant agency within the required 90 days, the grantee may
not charge indirect costs to its grant from the end of the 90-day
period until it obtains a federally recognized indirect cost rate
agreement applicable to the grant.
(2) If the Secretary determines that exceptional circumstances
warrant continuation of a temporary indirect cost rate, the Secretary
may authorize the grantee to continue charging indirect costs to its
grant at the temporary rate specified in paragraph (c) of this section
even though the grantee has not submitted its indirect cost rate
proposal within the 90-day period.
(3) Once a grantee obtains a federally recognized indirect cost
rate that is applicable to the affected grant, the grantee may use that
indirect cost rate to claim indirect cost reimbursement for
expenditures made on or after the date the grantee submitted its
indirect cost proposal to its cognizant agency or the start of the
project period, whichever is later. However, this authority is subject
to the following limitations:
(i) The total amount of funds recovered by the grantee under the
federally recognized indirect cost rate is reduced by the amount of
indirect costs previously recovered under the temporary indirect cost
rate.
(ii) The grantee must obtain prior approval from the Secretary to
shift direct costs to indirect costs in order to recover indirect costs
at a higher negotiated indirect cost rate.
(iii) The grantee may not request additional funds to recover
indirect costs that it cannot recover by shifting direct costs to
indirect costs.
* * * * *
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3. Section 75.562 is amended by revising paragraph (c) to read as
follows:
Sec. 75.562 Indirect cost rates for educational training projects.
* * * * *
(c)(1) Indirect cost reimbursement on a training grant is limited
to the recipient's actual indirect costs, as determined in its
negotiated indirect cost rate agreement, or eight percent of a modified
total direct cost base, whichever amount is less.
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Note to paragraph (c)(1): If the grantee did not have a
federally recognized indirect cost rate agreement on the date the
training grant was awarded, indirect cost recovery is also limited
to the amount authorized under Sec. 75.560(d)(3).
(2) For the purposes of this section, a modified total direct cost
base consists of total direct costs minus the following:
(i) The amount of each sub-award in excess of $25,000.
(ii) Stipends.
(iii) Tuition and related fees.
(iv) Equipment, as defined in 34 CFR 74.2 and 80.3, as applicable.
Note to paragraph (c)(2)(iv): If the grantee has established a
threshold for equipment that is lower than $5,000 for other
purposes, it must use that threshold to exclude equipment under the
modified total direct cost base for the purposes of this section.
(3) The eight percent indirect cost reimbursement limit specified
in paragraph (c)(1) of this section also applies to sub-awards that
fund training, as determined by the Secretary under paragraph (b) of
this section.
(4) The eight percent limit does not apply to agencies of State or
local governments, including federally recognized Indian tribal
governments, as defined in 34 CFR 80.3.
(5) Indirect costs in excess of the eight percent limit may not be
charged directly, used to satisfy matching or cost-sharing
requirements, or charged to another Federal award.
* * * * *
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4. Section 75.564 is amended by revising paragraph (e) to read as
follows:
Sec. 75.564 Reimbursement of indirect costs.
* * * * *
(e)(1) Indirect costs for a group of eligible parties (See
Sec. Sec. 75.127 through 75.129) are limited to the amount derived by
applying the rate of the applicant, or a restricted rate when
applicable, to the direct cost base for the grant in keeping with the
terms of the applicant's federally recognized indirect cost rate
agreement.
(2) If a group of eligible parties applies for a training grant
under the group application procedures in Sec. Sec. 75.127 through
75.129, the grant funds allocated among the members of the group are
not considered sub-awards for the purposes of applying the indirect
cost rate in Sec. 75.562(c).
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[FR Doc. E7-23817 Filed 12-6-07; 8:45 am]
BILLING CODE 4000-01-P
