Office of the Assistant Secretary for Financial Resources; Health and Human Services Grants Regulation, 63831-63836 [2019-24385]

Agencies

• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 84, Number 223 (Tuesday, November 19, 2019)]
[Proposed Rules]
[Pages 63831-63836]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24385]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 75

RIN 0991-AC16


Office of the Assistant Secretary for Financial Resources; Health 
and Human Services Grants Regulation

AGENCY: Division of Grants, Office of Grants Policy, Oversight, and 
Evaluation, Office of the Assistant Secretary for Financial Resources, 
Department of Health and Human Services.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This is a notice of proposed rulemaking to repromulgate or 
revise certain regulatory provisions of the Department of Health and 
Human Services, Uniform Administrative Requirements, Cost Principles, 
and Audit Requirements for HHS Awards.

DATES: Comments must be submitted on or before December 19, 2019.

ADDRESSES: Comments must be identified by RIN 0991-AC16. Because of 
staff and resource limitations, comments must be submitted 
electronically to www.regulations.gov. Follow the ``Submit a comment'' 
instructions.
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including personally identifiable or confidential business information 
that is included in a comment. Before or after the close of the comment 
period, the Department of Health and Human Services will post all 
comments that were received before the end of the comment period on 
www.regulations.gov. Follow the search instructions on that website to 
view the public comments.

FOR FURTHER INFORMATION CONTACT: Richard Brundage at (202) 401-6107.

SUPPLEMENTARY INFORMATION: This is a notice of proposed rulemaking by 
which the Department proposes to repromulgate provisions of 45 CFR part 
75 that were set forth in a final rule published in the Federal 
Register at 81 FR 89393 (Dec. 12, 2016) (Final Rule). The Department, 
in a document published in this edition of the Federal Register, 
publishes its decision to exercise its enforcement discretion to not 
enforce the regulatory provisions adopted or amended by the Final Rule 
due to HHS's serious concerns about compliance with certain 
requirements of the Regulatory Flexibility Act, 5 U.S.C. 601-12. In 
this document, the Department proposes to repromulgate some of the 
provisions of the Final Rule, not to repromulgate others, and to 
replace or modify certain provisions that were included in the Final 
Rule with other provisions.

I. Background

    On December 26, 2013, the Office of Management and Budget (OMB) 
issued the Uniform Administrative Requirements, Cost Principles, and 
Audit Requirements for Federal Awards (UAR or uniform regulations) that 
``set standard requirements for financial management of Federal awards 
across the entire federal government.'' 78 FR 78590 (Dec. 26, 2013). On 
December 19, 2014, the Department, in conjunction

[[Page 63832]]

with OMB and other federal award-making agencies, issued an interim 
final rule to implement the UAR. Federal Awarding Agency Regulatory 
Implementation of Office of Management and Budget's Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards; Final Rule, 79 FR 75867 (Dec. 19, 2014).
    On July 13, 2016, the Department issued a notice of proposed 
rulemaking (``NPRM''), proposing additional changes to its 
implementation of the UAR. 81 FR 45270 (July 13, 2016). That rule 
proposed changes to:
     Sec.  75.102, concerning requirements related to the 
Indian Self Determination and Education Assistance Act (ISDEAA);
     Sec.  75.300, concerning certain public policy 
requirements and Supreme Court cases, and Sec.  75.101, concerning the 
applicability of those provisions to the Temporary Assistance for Needy 
Families Program (Title IV-A of the Social Security Act, 42 U.S.C. 601-
19);
     Sec.  75.305, concerning the applicability to states of 
certain payment provisions;
     Sec.  75.365, concerning certain restrictions on public 
access to records;
     Sec.  75.414, concerning indirect cost rates for certain 
grants; and
     Sec.  75.477, concerning shared responsibility payments 
and payments for failure to offer health coverage to employees.
    On December 12, 2016, the Department finalized all of these 
provisions without substantive change, except that the Department 
explained it was choosing not to finalize the proposed change to Sec.  
75.102 at that time.\1\ (81 FR 89393) The Final Rule went into 
effective on January 11, 2017.
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    \1\ The Final Rule also made a technical change not set forth in 
the proposed rule, amending Sec.  [thinsp]75.110(a) by removing 
``75.355'' and adding, in its place, ``75.335.''
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    In a document published elsewhere in this edition of the Federal 
Register, the Department explains that HHS is exercising enforcement 
discretion regarding compliance with the Final Rule, due to serious 
concerns about the Final Rule's compliance with the requirements of the 
Regulatory Flexibility Act, 5 U.S.C. 601-12. With respect to the Final 
Rule, the Department is concerned about whether it provided a 
sufficient rationale and certification that the rule would not have a 
significant economic impact on a substantial number of small 
entities,\2\ or a sufficient final regulatory flexibility analysis at 
the time of publication of the Final Rule in the Federal Register. As a 
result, the Department is choosing not to enforce the provisions of the 
Final Rule. See 5 U.S.C. 608(b) and 611. However, merely because a 
regulation is not being enforced does not mean that it has been 
repealed or replaced. The Final Rule still appears in the Code of 
Federal Regulations. Therefore, this NPRM should be properly viewed as 
a proposal to modify or to repeal certain provisions in the Final Rule.
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    \2\ To the extent that the Department believed that the Final 
Rule did not have a significant economic impact on a substantial 
number of small entities, the certification and statement with the 
factual basis for such certification was also not provided to the 
Chief Counsel for Advocacy of the Small Business Administration, 
contrary to the requirements of the Regulatory Flexibility Act. See 
5 U.S.C. 605(b).
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II. Summary of the Notice of Proposed Rulemaking

    The Department proposes to repromulgate some (but not all) of the 
regulatory provisions included in the Final Rule and to issue new and 
amended provisions.

A. Technical Correction, Sec.  75.110

    The Department is proposing to retain, without change, Sec.  
75.110, as it corrected a typographical error in the pre-2017 rule.

B. Statutory and National Policy Requirements, Sec.  75.300, and 
Related Provisions at Sec.  75.101

    The Department is modifying Sec.  75.300 and proposing not to 
retain Sec.  75.101(f) from the Final Rule. This is because the 
Department has faced several complaints, requests for exceptions, and 
lawsuits concerning Sec.  75.300(c) and (d). The Department is also 
currently preliminarily enjoined from enforcing Sec.  75.300(c) in the 
State of Michigan as to a particular subgrantee's protected speech and 
religious exercise. See Buck v. Gordon, No. 1:19-cv-286 (W.D. Mich. 
Sept. 26, 2019) (ECF No. 70) (``Defendant Azar shall not take any 
enforcement action against the State under 45 CFR 75.300(c) based upon 
[plaintiff's] protected religious exercise. . . .''). Some non-Federal 
entities have expressed concerns that requiring compliance with certain 
non-statutory requirements of those paragraphs violates the Religious 
Freedom Restoration Act (RFRA), 42 U.S.C. 2000bb, et seq., or the U.S. 
Constitution, exceeds the Department's statutory authority, or reduces 
the effectiveness of programs, for example, by reducing foster care 
placements in the Title IV-E program of HHS's Administration for 
Children and Families. The existence of these complaints and legal 
actions indicates that Sec.  75.300(c) and (d) imposed regulatory 
burden and created a lack of predictability and stability for the 
Department and stakeholders with respect to these provisions' viability 
and enforcement.
    Some members of the public have submitted comments to the 
Department citing possible burdens created by paragraphs (c) and (d) as 
they were included in the Final Rule.\3\ To date, the Department has 
granted, pursuant to 45 CFR 75.102(b), one request for an exception to 
the application of the religious nondiscrimination requirement of Sec.  
75.300(c).\4\ That grant of an exception has been challenged under the 
Administrative Procedure Act. Some Federal grantees have stated that 
they will require their subgrantees to comply with the non-statutory 
requirements of Sec.  75.300(c) and (d), even if it means some 
subgrantees with religious objections will leave the program(s) and 
cease providing services rather than comply. The Department believes 
that such an outcome would likely reduce the effectiveness of programs 
funded by federal grants by reducing the number of entities available 
to provide services under these programs. The Department is also aware 
that certain grantees and subgrantees that may cease providing services 
if forced to comply with Sec.  75.300(c) and (d) are providing a 
substantial percentage of services pursuant to some Department-funded 
programs and are effective partners of federal and state government in 
providing such services.
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    \3\ See https://www.regulations.gov/docketBrowser?rpp=25&so=DESC&sb=commentDueDate&po=0&s=75.300&dct=PS&D=HHS-OS-2017-0002.
    \4\ That waiver is available on the State of South Carolina's 
website at https://governor.sc.gov/sites/default/files/Documents/newsroom/HHS%20Response%20Letter%20to%20McMaster.pdf.
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    The Department accordingly proposes that Sec.  75.300 include 
different provisions in paragraphs (c) and (d) than those that were 
included in the Final Rule. The Department takes this action as an 
exercise of its discretion to establish requirements for its grant 
programs and to establish enforcement priorities with respect to those 
programs.
    This document proposes that paragraph (c) state, ``It is a public 
policy requirement of HHS that no person otherwise eligible will be 
excluded from participation in, denied the benefits of, or subjected to 
discrimination in the administration of HHS programs and services, to 
the extent doing so is prohibited by federal statute.''

[[Page 63833]]

    The Department considers this proposed language for paragraph (c) 
appropriate because it affirms that HHS grants programs will be 
administered consistent with the Federal statutes that govern the 
programs, including the nondiscrimination statutes that Congress has 
adopted and made applicable to the Department's programs, RFRA, and 
with all applicable Supreme Court decisions. The proposed language 
would provide guidance for compliance when non-statutory public policy 
requirements conflict with statutory requirements (e.g., RFRA). Section 
75.300(a) does not, on its face and standing alone, provide a clear 
pathway for compliance in such situations. The adoption of regulatory 
language that makes compliance more predictable and simpler for federal 
grant recipients is generally consistent with the concept of 
controlling regulatory costs and relieving regulatory burdens. Exec. 
Order No. 13771, 82 FR 9339 (Feb. 3, 2017).
    This document also proposes that paragraph (d) state, ``HHS will 
follow all applicable Supreme Court decisions in administering its 
award programs.''
    Paragraph (d) as included in the Final Rule specified two Supreme 
Court decisions. But the Department is committed to complying not just 
with those decisions, but with all applicable Supreme Court decisions 
and all applicable court orders. Because Federal courts issue new 
decisions daily, and courts often adjust, clarify, expand upon, or 
narrow prior holdings, the Department believes that, if its Department-
wide regulations include general provisions addressing compliance with 
Supreme Court decisions, the regulations should do so without singling 
out specific cases, since it is not possible to list every applicable 
case, nor to change the regulations each time new decisions are 
issued.\5\
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    \5\ In this regard, the Department distinguishes between the 
regulations it promulgates that are generally applicable to all of 
the Department's activities, such as all of its grants and grant-
making programs, and regulations that are promulgated to implement a 
particular program--and between Supreme Court decisions that are 
generally applicable to the federal government and those that 
specifically address and bind the Department (or a component of the 
Department) with respect to a specific program.
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    In light of the considerations discussed above, the Department 
proposes to modify paragraphs (c) and (d) to require compliance with 
all applicable nondiscrimination statutes and Supreme Court decisions. 
The Department believes the proposed language of paragraphs (c) and (d) 
would allow its programs to comply with all applicable laws and court 
decisions, to minimize disputes and litigation, and to remove 
regulatory barriers. OMB's UAR, at 2 CFR 200.300, does not impose 
specific public policy requirements beyond U.S. statutory requirements. 
The Department considers it appropriate for paragraph (c) to similarly 
focus on statutory requirements and for paragraph (d) to inform 
grantees that the Department complies with applicable Supreme Court 
decisions in administering its grant programs.
    The Department does not propose to include paragraph (f) in Sec.  
75.101, which was included in the Final Rule to ensure that the 
specific statutory requirements of the Temporary Assistance for Needy 
Families Program (Title IV-A of the Social Security Act, 42 U.S.C. 601-
619) governed applicable grants. This language would not be necessary 
under the proposed language of Sec.  75.300(c), because the latter 
would already be limited to applicable statutory nondiscrimination 
requirements.

C. Payment, Sec.  75.305

    The Department is proposing to repromulgate 45 CFR 75.305 as it 
currently appears in the Code of Federal Regulations. Because the 
language prior to the Final Rule applied the provisions of Treasury-
State Cash Management Improvement Act agreements and default procedures 
codified at 31 CFR part 205 and TM 4A-2000, and such agreements may not 
contain specific provisions addressed by Sec.  75.305, the Department 
seeks to modify the language to ensure clarity. In doing so, to the 
extent that the governing provisions are silent as to the payment 
provisions described in the UAR, there should be no effect on states, 
as they had been subject to these same provisions pursuant to 45 CFR 
92.21. However, the Department proposes the clarification so that all 
states are aware of the necessity to, for example, expend refunds and 
rebates prior to drawing down additional grant funds.

D. Restrictions on Public Access to Records, Sec.  75.365

    The Department proposes to repromulgate 45 CFR 75.365 as it 
currently appears in the Code of Federal Regulations. That section 
clarifies the limits on the restrictions that can be placed on 
nonfederal entities that limit public access to records pertinent to 
certain federal awards. That section also implements Executive Order 
13,642 (May 9, 2013), and corresponding law. See, e.g., https://www.federalregister.gov/documents/2013/05/14/2013-11533/making-open-and-machine-readable-the-new-default-for-government-information, and 
Departments of Labor, Health, and Human Services, and Education 
Appropriations Act of 2014, Public Law 113-76, Div. H, Sec. 527 
(requiring ``each Federal agency, or in the case of an agency with 
multiple bureaus, each bureau (or operating division) funded under this 
Act that has research and development expenditures in excess of 
$100,000,000 per year [to] develop a Federal research public access 
policy''). Although this language was not included in subsequent 
appropriations acts, the Department considers it an appropriate 
exercise of agency discretion and implementation of the Executive 
Order. The proposed language would codify permissive authority for the 
Department's awarding agencies to require public access to manuscripts, 
publications, and data produced under an award, consistent with 
applicable law. The Department recognizes that this provision could be 
interpreted as having a financial impact on small entities. These 
requirements, however, have been operational since the publication of 
the Final Rule, and therefore grantees would not need to make any 
changes to their current practice in response to this rulemaking. As a 
result, this portion of this rulemaking, if finalized, would have no 
impact other than informing the public of the Department's stance on 
public access to manuscripts, publications, and data produced under 
awards.

E. Indirect (Facilities & Administration) Costs, Sec.  75.414

    The Department is proposing to repromulgate language from the Final 
Rule amending 45 CFR 75.414(c) as it currently appears in the Code of 
Federal Regulations. That provision restricted indirect cost rates for 
certain grants. It is long-standing HHS policy to restrict training 
grants to a maximum eight percent indirect cost rate. In addition to 
proposing to implement this limit for training grants, the Department 
proposes to impose this same limitation on foreign organizations and 
foreign public entities, which typically do not negotiate indirect cost 
rates, and to add clarifying language to Sec.  75.414(f), which would 
permit an entity that had never received an indirect cost rate to 
charge a de minimis rate of ten percent, in order to ensure that the 
two provisions do not conflict. In this proposed rule, the American 
University, Beirut, and the World Health Organization are exempted 
specifically from the indirect-cost-rate limitation because they are 
eligible for negotiated facilities and administration (F&A) cost

[[Page 63834]]

reimbursement. This proposed restriction on indirect costs, as 
indicated by 45 CFR 75.101, would flow down to subawards and 
subrecipients. The Department recognizes that this provision could be 
interpreted as having a financial impact on small entities. These 
limits, however, have been operational since the publication of the 
Final Rule, and therefore grantees would not need to make any changes 
to their current practice in response to this rulemaking. As a result, 
this portion of this rulemaking, if finalized, would have no impact 
other than informing the public of the Department's stance on indirect 
cost rates for certain grants.

F. Payments for Failure To Offer Health Coverage to Employees, Sec.  
75.477

    The Department proposes to repromulgate language from the Final 
Rule specifying a selected item of cost for codification in the cost 
principles as 45 CFR 75.477, regarding shared responsibility payments 
by employers. The Department does not, however, propose to repromulgate 
a related provision from the Final Rule concerning shared 
responsibility payments for individuals.
    In 2013, the Department announced in a program policy document that 
any payments or assessments imposed on an individual or individuals 
pursuant to 26 U.S.C. 5000A(b) as a result of any failure to maintain 
minimum essential coverage as required by 26 U.S.C. 5000A(a) were not 
allowable costs under a particular grant program. See HAB Policy Notice 
13-04, at 2-3. Consistent with that policy, in 2016 in the Final Rule, 
45 CFR 75.477, the Department excluded as allowable expense under a 
grant both payments imposed on an individual or individuals pursuant to 
26 U.S.C. 5000A(b) and payments imposed on employers that fail to offer 
health coverage to their employees pursuant to 26 U.S.C. 4980H.
    Congress subsequently reduced to $0 the penalties or assessments 
imposed on individuals as a result of their failure to maintain minimum 
essential coverage, effective after December 31, 2018. Public Law 115-
97, 131 Stat. 2092 (Dec. 22, 2017). Accordingly, the Department does 
not propose to repromulgate the provision from the Final Rule, at Sec.  
75.477(a), excluding such payments or assessments as allowable costs 
under an HHS grant. Given that the penalty imposed on individuals for 
failure to maintain minimum essential coverage was reduced to $0, 
effective after December 31, 2018, and it is possible that some 
individuals are still making such payments for tax year 2018, the 
Department seeks comment on whether to repromulgate the provision, with 
a sunset date to ensure that the cost of the individual penalty is 
excluded from allowable costs for tax years when such penalties could 
be imposed.
    The Department does propose to repromulgate language from the Final 
Rule excluding, from allowable costs under an HHS grant, employer 
payments for failure to offer health coverage to employees as required 
by 26 U.S.C. 4980H. The Internal Revenue Service began to enforce the 
Internal Revenue Code provision in 2017, after the issuance of the 
Final Rule. The Department recognizes that the HHS regulatory 
provision--excluding such employer shared responsibility payments from 
allowable costs under HHS grants--could be interpreted as having a 
financial impact on small entities. These requirements, however, have 
been operational since the publication of the Final Rule, and therefore 
grantees would not need to make any changes to their current practice 
in response to this rulemaking. As a result, this portion of this 
rulemaking, if finalized, would have no impact other than informing the 
public of the Department's stance on financing shared responsibility 
payments using grant funding.

III. Request for Comment

    The Department seeks comment on this proposed rule, including its 
likely impacts as compared to the previous Final Rule. The Department 
is particularly interested in comments relating to the comparative 
effects and impact of its own enforcement discretion, specifically were 
the previous Final rule to be fully enforced, as well as whether HHS 
were to fully exercise its enforcement discretion regarding the Final 
Rule.

IV. Regulatory Impact Analysis

    The Department has examined the impacts of the proposed rule as 
required under Executive Order 12866 on Regulatory Planning and Review 
(Sept. 30, 1993), Executive Order 13563 on Improving Regulation and 
Regulatory Review (Jan. 18, 2011), Executive Order 13771 on Reducing 
Regulation and Controlling Regulatory Costs (Jan. 30, 2017), the 
Regulatory Flexibility Act (September 19, 1980, Pub. L. 96-354, 5 
U.S.C. 601-612), section 202 of the Unfunded Mandates Reform Act of 
1995 (Mar. 22, 1995, Pub. L. 104-04), Executive Order 13132 on 
Federalism (Aug. 4, 1999), the Congressional Review Act (5 U.S.C. 
804(2)), the Assessment of Federal Regulation and Policies on Families, 
and the Paperwork Reduction Act of 1995.

Executive Orders 12866 and 13563 Determination

    Pursuant to Executive Order 12866, the Department has designated 
this final rule to be economically non-significant. This rulemaking has 
been designated as a ``significant regulatory action'' under section 
3(f) of Executive Order 12866. Accordingly, the rule has been reviewed 
by the Office of Management and Budget. Similarly, under Executive 
Order 13563, this proposed rule harmonizes and streamlines rules, and 
promotes flexibility by removing unnecessary burdens.

Executive Order 13771

    The White House issued Executive Order 13771 on Reducing Regulation 
and Controlling Regulatory Costs on January 30, 2017. Section 2(a) of 
Executive Order 13771 requires an agency, unless prohibited by law, to 
identify at least two existing regulations to be repealed when the 
agency publicly proposes for notice and comment or otherwise 
promulgates a new regulation. In furtherance of this requirement, 
section 2(c) of Executive Order 13771 requires that the new incremental 
costs associated with new regulations shall, to the extent permitted by 
law, be offset by the elimination of existing costs associated with at 
least two prior regulations. This rulemaking, while significant under 
Executive Order 12866, will impose de minimis costs and therefore is 
not anticipated to be a regulatory or deregulatory action under 
Executive Order 13771. Public comments will inform the ultimate 
designation of this proposed rule.

Regulatory Flexibility Act

    The Department has examined the economic implications of this 
proposed rule as required by the Regulatory Flexibility Act (RFA) (5 
U.S.C. 601-612). The RFA requires an agency to describe the impact of a 
proposed rulemaking on small entities by providing an initial 
regulatory flexibility analysis unless the agency expects that the 
proposed rule will not have a significant impact on a substantial 
number of small entities, provides a factual basis for this 
determination, and proposes to certify the statement. 5 U.S.C. 603(a), 
605(b). If an agency must provide an initial regulatory flexibility 
analysis, this analysis must address the consideration of regulatory 
options that would lessen the economic effect of the rule on small 
entities. For purposes of the RFA, small entities include small 
businesses, nonprofit organizations, and small governmental 
jurisdictions. HHS considers a rule to have a significant

[[Page 63835]]

impact on a substantial number of small entities if it has at least a 
three percent impact on revenue on at least five percent of small 
entities. As discussed, the proposed rule would
     Require grantees to comply with applicable federal 
statutory nondiscrimination provisions.
     Provide that HHS complies with applicable Supreme Court 
decisions in administering its grant programs.
     Not re-impose the exclusion from allowable costs of the 
now-repealed tax imposed on individuals for failure to maintain minimum 
essential coverage.
     Otherwise re-promulgate the provisions of the Final Rule.
    Affected small entities include all small entities which may apply 
for HHS grants; these small entities operate in a wide range of 
sections involved in the delivery of health and human services. 
Grantees are required to comply with applicable federal statutory 
nondiscrimination provisions by operation of such laws and pursuant to 
45 CFR 75.300(a); HHS is required to comply with applicable Supreme 
Court decisions. Thus, there would be no economic impact associated 
with proposed sections 75.300(c) and (d). Since the individual tax for 
failure to comply with the individual mandate has been reduced to $0, 
there would be no economic impact associated with not proposing to re-
impose an allowable costs exclusion for such payments. Moreover, the 
provisions of the proposed rule have been operational since the 
publication of the Final Rule, and therefore grantees, including small 
entities, would not need to make any changes to their current practice 
in response to this rulemaking. Thus, the Department anticipates that 
this rulemaking, if finalized, would have no impact beyond providing 
information to the public. The Department anticipates that this 
information will allow affected entities to better deploy resources in 
line with established requirements for HHS grantees. As a result, HHS 
has determined, and the Secretary certifies, that this proposed rule 
will not have a significant impact on the operations of a substantial 
number of small entities.
    The Department seeks comment on this analysis of the impact of the 
proposed rule on small entities, and the assumptions that underlie this 
analysis.

Unfunded Mandates Reform Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded 
Mandates Act) (2 U.S.C. 1532) requires that covered agencies prepare a 
budgetary impact statement before promulgating a rule that includes any 
Federal mandate that may result in the expenditure by State, local, and 
tribal governments, in the aggregate, or by the private sector, of $100 
million in 1995 dollars, updated annually for inflation. Currently, 
that threshold is approximately $154 million. If a budgetary impact 
statement is required, section 205 of the Unfunded Mandates Act also 
requires covered agencies to identify and consider a reasonable number 
of regulatory alternatives before promulgating a rule. The Department 
has determined that this proposed rule will not result in expenditures 
by State, local, and tribal governments, or by the private sector, of 
$154 million or more in any one year. Accordingly, the Department has 
not prepared a budgetary impact statement or specifically addressed the 
regulatory alternatives considered.

Executive Order 13132--Federalism

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a rule that imposes substantial 
direct requirement costs on State and local governments or has 
federalism implications. The Department has determined that this 
proposed rule does not impose such costs or have any Federalism 
implications.

Congressional Review Act

    The Congressional Review Act defines a ``major rule'' as ``any rule 
that the Administrator of the Office of Information and Regulatory 
Affairs (OIRA) of the Office of Management and Budget finds has 
resulted in or is likely to result in--(A) an annual effect on the 
economy of $100,000,000 or more; (B) a major increase in costs or 
prices for consumers, individual industries, federal, State, or local 
government agencies, or geographic regions; or (C) significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based enterprises to 
compete with foreign-based enterprises in domestic and export 
markets.'' 5 U.S.C. 804(2). The Department has determined that this 
proposed rule is not likely to result in an annual effect of 
$100,000,000 or more and is not otherwise a major rule for purposes of 
the Congressional Review Act.

Assessment of Federal Regulation and Policies on Families

    Section 654 of the Treasury and General Government Appropriations 
Act of 1999 requires Federal departments and agencies to determine 
whether a proposed policy or regulation could affect family well-being. 
If the determination is affirmative, then the Department or agency must 
prepare an impact assessment to address criteria specified in the law. 
The Department has determined that these proposed regulations will not 
have an impact on family well-being, as defined in the Act.

Paperwork Reduction Act of 1995

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
ch. 3506; 5 CFR part 1320 appendix A.1), the Department has reviewed 
this proposed rule and has determined that there are no new collections 
of information contained therein.

List of Subjects in 45 CFR Part 75

    Accounting, Administrative practice and procedure, Cost principles, 
Grant programs, Grant programs--health, Grants administration, 
Hospitals, Nonprofit organizations reporting and recordkeeping 
requirements, and State and local governments.

Proposed Rule

    For the reasons set forth in the preamble, the Department of Health 
and Human Services proposes to amend part 75 of title 45 of the Code of 
Federal Regulations as follows:

PART 75--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND 
AUDIT REQUIREMENTS FOR HHS AWARDS

0
1. The authority citation for 45 CFR part 75 continues to read as 
follows:

    Authority: 5 U.S.C. 301.


Sec.  75.101  [Amended]

0
2. Amend Sec.  75.101 by removing and reserving paragraph (f).
0
3. Amend Sec.  75.300 by revising paragraphs (c) and (d) to read as 
follows:


Sec.  75.300  Statutory and national policy requirements.

* * * * *
    (c) It is a public policy requirement of HHS that no person 
otherwise eligible will be excluded from participation in, denied the 
benefits of, or subjected to discrimination in the administration of 
HHS programs and services, to the extent doing so is prohibited by 
federal statute.
    (d) HHS will follow all applicable Supreme Court decisions in 
administering its award programs.
0
4. In Sec.  75.305, revise paragraph (a) to read as follows:


Sec.  75.305  Payment.

    (a)(1) For States, payments are governed by Treasury-State CMIA 
agreements and default procedures codified at 31 CFR part 205 and TFM

[[Page 63836]]

4A-2000 Overall Disbursing Rules for All Federal Agencies.
    (2) To the extent that Treasury-State CMIA agreements and default 
procedures do not address expenditure of program income, rebates, 
refunds, contract settlements, audit recoveries and interest earned on 
such funds, such funds must be expended before requesting additional 
cash payments.
* * * * *
0
5. Revise Sec.  75.365 to read as follows:


Sec.  75.365  Restrictions on public access to records.

    Consistent with Sec.  [thinsp]75.322, HHS awarding agencies may 
require recipients to permit public access to manuscripts, 
publications, and data produced under an award. However, no HHS 
awarding agency may place restrictions on the non-Federal entity that 
limits public access to the records of the non-Federal entity pertinent 
to a Federal award identified in Sec. Sec.  [thinsp]75.361 through 
75.364, except for protected personally identifiable information (PII) 
or when the HHS awarding agency can demonstrate that such records will 
be kept confidential and would have been exempted from disclosure 
pursuant to the Freedom of Information Act (5 U.S.C. 552) (FOIA) or 
controlled unclassified information pursuant to Executive Order 13556 
if the records had belonged to the HHS awarding agency. The FOIA does 
not apply to those records that remain under a non-Federal entity's 
control except as required under Sec.  [thinsp]75.322. Unless required 
by Federal, State, local, or tribal statute, non-Federal entities are 
not required to permit public access to their records identified in 
Sec. Sec.  [thinsp]75.361 through 75.364. The non-Federal entity's 
records provided to a Federal agency generally will be subject to FOIA 
and applicable exemptions.
0
6. In Sec.  75.414, revise paragraphs (c)(1)(i) through (iii) and the 
first sentence of paragraph (f) to read as follows:


Sec.  75.414  Indirect (F&A) costs.

* * * * *
    (c) * * *
    (1) * * *
    (i) Indirect costs on training grants are limited to a fixed rate 
of eight percent of MTDC exclusive of tuition and related fees, direct 
expenditures for equipment, and subawards in excess of $25,000;
    (ii) Indirect costs on grants awarded to foreign organizations and 
foreign public entities and performed fully outside of the territorial 
limits of the U.S. may be paid to support the costs of compliance with 
federal requirements at a fixed rate of eight percent of MTDC exclusive 
of tuition and related fees, direct expenditures for equipment, and 
subawards in excess of $25,000; and,
    (iii) Negotiated indirect costs may be paid to the American 
University, Beirut, and the World Health Organization.
* * * * *
    (f) In addition to the procedures outlined in the appendices in 
paragraph (e) of this section, any non-Federal entity that has never 
received a negotiated indirect cost rate, except for those non-Federal 
entities described in paragraphs (c)(1)(i) and (ii) and section 
(D)(1)(b) of appendix VII to this part, may elect to charge a de 
minimis rate of 10% of modified total direct costs (MTDC) which may be 
used indefinitely. * * *
* * * * *
0
7. Revise Sec.  75.477 to read as follows:


Sec.  75.477  Payments for failure to offer health coverage to 
employees.

    Any payments or assessments imposed on an employer pursuant to 26 
U.S.C. 4980H as a result of the employer's failure to offer to its 
full-time employees (and their dependents) the opportunity to enroll in 
minimum essential coverage under an eligible employer-sponsored plan 
are not allowable expenses under Federal awards from an HHS awarding 
agency.

    Dated: November 1, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2019-24385 Filed 11-18-19; 8:45 am]
BILLING CODE 4150-24-P