81_FR_45404 81 FR 45270 - Health and Human Services Grants Regulation

81 FR 45270 - Health and Human Services Grants Regulation

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Federal Register Volume 81, Issue 134 (July 13, 2016)

Page Range45270-45273
FR Document2016-15014

This notice of proposed rulemaking (NPRM) proposes changes to the Department of Health and Human Services' (HHS) adoption of the Office of Management and Budget's (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (``Uniform Administrative Requirements'') published on December 19, 2014 (79 FR 75871) and the technical amendments published by HHS on January 20, 2016 (81 FR 3004). HHS codified the OMB language, with noted modifications as explained in the preamble to the December promulgation, in 45 CFR part 75. The HHS-specific modifications to the Uniform Administrative Requirements adopted prior regulatory language that was not in conflict with OMB's language, and provided additional guidance to the regulated community. Unlike all of the other modifications to the Uniform Administrative Requirements, these proposed changes, although based on existing law or HHS policy, were not previously codified in regulation. This NPRM seeks comments on these important proposed regulatory changes.

Federal Register, Volume 81 Issue 134 (Wednesday, July 13, 2016)
[Federal Register Volume 81, Number 134 (Wednesday, July 13, 2016)]
[Proposed Rules]
[Pages 45270-45273]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-15014]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Part 75

RIN 0991-AC06


Health and Human Services Grants Regulation

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

ACTION: Notice of proposed rulemaking.

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

SUMMARY: This notice of proposed rulemaking (NPRM) proposes changes to 
the Department of Health and Human Services' (HHS) adoption of the 
Office of Management and Budget's (OMB) Uniform Administrative 
Requirements, Cost Principles, and Audit Requirements for Federal 
Awards (``Uniform Administrative Requirements'') published on December 
19, 2014 (79 FR 75871) and the technical amendments published by HHS on 
January 20, 2016 (81 FR 3004). HHS codified the OMB language, with 
noted modifications as explained in the preamble to the December 
promulgation, in 45 CFR part 75. The HHS-specific modifications to the 
Uniform Administrative Requirements adopted prior regulatory language 
that was not in conflict with OMB's language, and provided additional 
guidance to the regulated community. Unlike all of the other 
modifications to the Uniform Administrative Requirements, these 
proposed changes, although based on existing law or HHS policy, were 
not previously codified in regulation. This NPRM seeks comments on 
these important proposed regulatory changes.

DATES: To be assured consideration, comments must be received at the 
address provided below, no later than 5 p.m. on August 12, 2016.

ADDRESSES: In commenting, please refer to file code 0991-AC06. Because 
of staff and resource limitations, comments must be submitted 
electronically to www.regulations.gov. Follow the ``Submit a comment'' 
instructions.

FOR FURTHER INFORMATION CONTACT: Dr. Audrey Clarke at HHS at 202-720-
1908.

SUPPLEMENTARY INFORMATION: 
    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. We post all comments received before the 
end of the comment period on the following Web site as soon as possible 
after they have been received: http://regulations.gov. Follow the 
search instructions on that Web site to view the public comments.

Background

    This NPRM proposes changes to the HHS's adoption of the Uniform 
Administrative Requirements, Cost Principles, and Audit Requirements 
for Federal Awards published on December 19, 2014 (79 FR 75871) and the 
technical amendments published by HHS on January 20, 2016 (81 FR 3004). 
HHS codified the OMB language, with noted modifications, in 45 CFR part 
75. Unlike all of the other modifications to the Uniform Administrative 
Requirements, these proposed changes, although based on existing law or 
HHS policy, were not previously codified in regulation. This NPRM seeks 
comments for these important regulatory changes.
    In order to give full effect to other important government-wide 
initiatives, HHS is proposing further amendments at this time, which 
HHS intends to finalize as soon as possible. HHS proposes several 
additional changes to the codification of 2 CFR part 200 in 45 CFR part 
75. First, HHS proposes to add language to 45 CFR 75.102, clarifying 
that the audit requirements and cost principles applicable to contracts 
and compacts awarded pursuant to the Indian Self Determination and 
Education Assistance Act (ISDEAA) are

[[Page 45271]]

governed by subparts E and F including Sec.  75.505 Sanctions, 
enforceable through Sec.  75.371 Remedies for noncompliance, and that 
certain other sections and subparts of these regulations do not apply 
to ISDEAA contracts and compacts.
    Notably, the ISDEAA itself specifies that contracts and compacts 
awarded pursuant to the ISDEAA are subject to the Single Audit Act and 
OMB Circulars A-133, A-87, and A-122 and that ISDEAA contracts are not 
subject to federal grant and cooperative agreement requirements. 25 
U.S.C. 450c(f), 458aaa-5(c). In order to clarify how the Uniform 
Administrative Requirements interact with the prior-enacted Federal 
statute, and to minimize confusion regarding applicability, HHS has 
determined that this clarification is required. This will additionally 
ensure that Indian tribes and tribal organizations are fully apprised 
of their rights and responsibilities. Although HHS considers this 
amendment to be a requirement of existing statute and regulation, HHS 
proposes this change with notice and an opportunity for comment to 
ensure that the regulated community is aware of this clarification.
    In addition, HHS proposes to add language to clarify the meaning of 
disallowed cost as used in 25 U.S.C. 450j-1(f) to reflect that the 
meaning must adhere to the audit requirements of 45 CFR part 75, 
subpart F. Because subpart F applies to ISDEAA contracts and compacts, 
and the ISDEAA contains a stringent time limitation on certain claims 
pursuant to the Single Audit Act Amendments of 1996 (31 U.S.C. 7501-
7507), HHS proposes to clarify that the scope of the time limitation 
applies only to cost disallowances arising under such Act, and not to 
other claims or disallowances identified through other audits or 
investigations. Without the addition of this clarifying language a 
different interpretation of the time limitation (which has been adopted 
in a few isolated judicial and administrative cases) would place 
additional administrative burdens on the Indian Health Service and 
entities holding ISDEAA contracts and compacts by compelling the 
government and the entities to perform burdensome and intrusive program 
compliance reviews in addition to the annual single audit required by 
the Single Audit Act. HHS believes the proposed language avoids 
imposing unreasonable burdens on the government and tribes and limits 
the need for yearly program compliance reviews.
    Second, HHS proposes two changes to 45 CFR 75.300. First, HHS is 
codifying a prohibition in the provision of services of discrimination 
on the basis of age, disability, sex, race, color, national origin, 
religion, sexual orientation, or gender identity. This provision 
codifies for all HHS service grants what is already applicable for all 
HHS service contracts, as required by the HHS Acquisition Regulation 
(HHSAR) 352.237-74. The HHSAR provision makes explicit HHS's non-
discrimination policy when obligating appropriations for solicitations, 
contracts and orders that deliver service under HHS's programs directly 
to the public. In order to ensure that this same provision applies 
equally to grants, HHS proposes an addition to make this explicit in 
the grants context.
    This provision does not apply to funding under the Temporary 
Assistance for Needy Families Program (TANF) (title IV-A of the Social 
Security Act, 42, U.S.C. 601-619). The TANF statute, 42 U.S.C. 608(d), 
already identifies the nondiscrimination provisions that can be applied 
to TANF.
    In addition, HHS is codifying its implementation of the decisions 
in U.S. v. Windsor, 570 U.S. __(2013), 133 S.Ct. 2675 and Obergefell v. 
Hodges, 576 U.S. __(2015), 135 S.Ct. 2584. The HHS codification of its 
interpretation of these Supreme Court decisions ensures that same-sex 
spouses, marriages, and households are treated the same as opposite-sex 
spouses, marriages, and households in terms of determining beneficiary 
eligibility or participation in grant-related activities.
    Because these two codifications are being proposed for consistency 
with law and current HHS policy, HHS believes that they are non-
controversial, but nonetheless requests public comment. Third, HHS is 
proposing to clarify the language currently codified in 45 CFR part 75 
regarding the applicability to states of certain payment provisions. 
Because the current language applies 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 45 CFR 75.305, HHS 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 Uniform Administrative Requirements, there should be 
no effect on states, as they had been subject to these same provisions 
pursuant to 45 CFR 92.21. However, HHS 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.
    Fourth, HHS is proposing to amend 45 CFR 75.365, related to 
restrictions on public access to records, in order to implement the 
President's Executive Order 13,642 (May 9, 2013), and corresponding 
law. See, e.g., http://www.whitehouse.gov/the-press-office/2013/05/09/executive-order-making-open-and-machine-readable-new-default-government-, and Departments of Labor, Health and Human Services, and 
Education, and Related Agencies Appropriations Act of 2014, Public Law 
113-76, Div. H, Sec. 527. HHS proposes to codify permissive authority 
for HHS awarding agencies to require public access to manuscripts, 
publications, and data produced under an award, consistent with 
applicable law.
    Fifth, HHS is proposing to amend 45 CFR 75.414(c) to add a 
provision to restrict indirect cost rates for certain grants. It is 
long-standing HHS policy to restrict training grants to a maximum eight 
percent indirect cost rate. HHS proposes additionally to impose this 
same limitation on foreign organizations and foreign public entities, 
which typically do not negotiate indirect cost rates. In the proposed 
rule, 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 reimbursement. This restriction on indirect costs, as 
indicated by 45 CFR 75.101, flows down to subawards and subrecipients.
    Finally, HHS proposes a new selected item of cost for codification 
in the cost principles as 45 CFR 75.477, regarding shared 
responsibility payments. As HHS has already announced in policy for the 
Ryan White HIV/AIDS Program, 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), are not allowable costs under a grant. See HAB Policy 
Notice 13-04, at 2-3; http://hab.hrsa.gov/manageyourgrant/pinspals/pcn1304privateinsurance.pdf. Because this is a sound public policy 
requirement for all grants, not just the Ryan White HIV/AIDS Program 
grants, HHS proposes to codify this provision in the Uniform 
Administrative Requirements. Furthermore, HHS proposes to adopt the 
same stance with regard to payments for failure to offer health 
coverage to employees. Because the provision codified at 26 U.S.C. 
4980H has not yet been enforced against any employers, HHS has not had 
the need previously to announce a stance on this issue. HHS does so 
now, and seeks comments from the public.

[[Page 45272]]

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Ch. 3506; 5 CFR 1320 Appendix A.1), HHS reviewed this NPRM and 
determined that there are no new collections of information contained 
therein.

Regulatory Flexibility Act

    The Regulatory Flexibility Act requires that an agency provide a 
final regulatory flexibility analysis or to certify that the rule will 
not have a significant economic impact on a substantial number of small 
entities. This NPRM aligns 45 CFR part 75 with various regulatory and 
statutory provisions, implements Supreme Court decisions, and codifies 
long-standing policies thus clarifying and enhancing the provisions in 
HHS's interim final guidance issued December 19, 2014, and amended on 
January 20, 2016. In order to ensure that the public receives the most 
value, it is essential that HHS grant programs function as effectively 
and efficiently as possible, and that there is a high level of 
accountability to prevent waste, fraud, and abuse. The proposed 
additions provide enhanced direction for the public and will not have a 
significant economic impact beyond HHS's current regulations.

Executive Order 12866 Determination

    Pursuant to Executive Order 12866, HHS has designated this NPRM to 
be economically non-significant. This rule is not being treated as a 
``significant regulatory action'' under section 3(f) of Executive Order 
12866. Accordingly, the rule has not been reviewed by the Office of 
Management and Budget.

Unfunded Mandates Reform Act of 1995 Determination

    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 or more in any one year. 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. HHS has determined 
that this NPRM will not result in expenditures by State, local, and 
tribal governments, or by the private sector, of $100 million or more 
in any one year. Accordingly, HHS has not prepared a budgetary impact 
statement or specifically addressed the regulatory alternatives 
considered.

Executive Order 13132 Determination

    HHS has determined that this NPRM does not have any Federalism 
implications, as required by Executive Order 13132.

Sylvia M. Burwell,
Secretary, Department of Health and Human Services.

List of Subjects in 45 CFR Part 75

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

    For the reasons set forth in the preamble, part 75 of title 45 of 
the Code of Federal Regulations is proposed to be amended as follows:

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

    Authority: 5 U.S.C. 301.

0
2. Amend Sec.  75.101 by adding paragraph (f) to read as follows:


Sec.  75.101  Applicability.

* * * * *
    (f) Section 75.300(c) does not apply to the Temporary Assistance 
for Needy Families Program (title IV-A of the Social Security Act, 42 
U.S.C. 601-619).
0
3. Amend Sec.  75.102 by adding paragraph (e) to read as follows:


Sec.  75.102  Exceptions.

* * * * *
    (e)(1) Indian tribes and tribal organizations carrying out a 
compact or contract under the ISDEAA must comply with Subpart E, Cost 
Principles, and Subpart F, Audit Requirements, including Sec.  75.505 
Sanctions, enforceable through Sec.  75.371 Remedies for noncompliance. 
References to cost principles and audit requirements in the ISDEAA and 
its implementing regulations, including OMB Circulars A-87, A-122, and 
A-133 (which were superseded by 2 CFR 200), shall be deemed to be 
references to subparts E and F. Except for statutorily mandated grants 
added to a funding agreement in accordance with 42 CFR part 137, 
subpart F, certain sections of this part, applicable to grants and 
cooperative agreements, do not apply to ISDEAA contracts and compacts, 
including 45 CFR 75.111, 75.112, and 75.113 and subparts C and D.
    (2) Cost disallowances to which the limitation on remedies under 25 
U.S.C. 450j-1(f) applies shall include only disallowed costs that are 
identified through a Single Agency Audit conducted pursuant to the 
Single Audit Act and subject to the requirements of subpart F, and 
shall not include claims or disallowances identified through other 
audits or investigations.
0
4. Amend Sec.  75.300 by adding 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 based on non-merit factors such as age, 
disability, sex, race, color, national origin, religion, gender 
identity, or sexual orientation. Recipients must comply with this 
public policy requirement in the administration of programs supported 
by HHS awards.
    (d) In accordance with the Supreme Court decisions in United States 
v. Windsor and in Obergefell v. Hodges, all recipients must treat as 
valid the marriages of same-sex couples. This does not apply to 
registered domestic partnerships, civil unions or similar formal 
relationships recognized under state law as something other than a 
marriage.
0
5. Revise Sec.  75.305(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 
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
6. Revise Sec.  75.365 to read as follows:


Sec.  75.365  Restrictions on public access to records.

    Consistent with section 75.322 of this part, 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 
limit public access to the records of the non-Federal entity pertinent 
to a Federal award identified

[[Page 45273]]

in sections 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) or controlled unclassified information pursuant to 
Executive Order 13556 if the records had belonged to the HHS awarding 
agency. The Freedom of Information Act (5 U.S.C. 552) (FOIA) does not 
apply to those records that remain under a non-Federal entity's control 
except as required under Sec.  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 sections 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
7. In Sec.  75.414(c)(1) add paragraphs (c)(1)(i) through (iii):


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.
* * * * *
0
8. Add Sec.  75.477 to read as follows:


Sec.  75.477  Shared responsibility payments.

    (a) Payments for failure to maintain minimum essential health 
coverage. 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) are not allowable expenses under Federal awards from an HHS 
awarding agency.
    (b) 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.

[FR Doc. 2016-15014 Filed 7-12-16; 8:45 am]
 BILLING CODE 4150-24-P



                                                    45270                    Federal Register / Vol. 81, No. 134 / Wednesday, July 13, 2016 / Proposed Rules

                                                    explain why such standards should be                       (5) * * *                                           guidance to the regulated community.
                                                    used in this proposed action.                              (i) Location: 32°36.280′ N., 79°43.662′             Unlike all of the other modifications to
                                                                                                             W.; 32°21.514′ N., 79°46.576′ W.;                     the Uniform Administrative
                                                    j. Executive Order 12898: Federal
                                                                                                             32°20.515′ N., 79°45.068′ W.; 32°20.515′              Requirements, these proposed changes,
                                                    Actions To Address Environmental
                                                                                                             N., 79°42.152′ W.                                     although based on existing law or HHS
                                                    Justice in Minority Populations and Low
                                                                                                               (ii) Size: Approximately 7.4 square                 policy, were not previously codified in
                                                    Income Populations
                                                                                                             nautical miles in size.                               regulation. This NPRM seeks comments
                                                       Executive Order 12898 (59 FR 7629)                      (iii) Depth: Ranges from                            on these important proposed regulatory
                                                    establishes federal executive policy on                  approximately 30 to 45 feet (9 to 13.5                changes.
                                                    environmental justice. Its main                          meters).                                              DATES: To be assured consideration,
                                                    provision directs federal agencies, to the               *      *     *    *     *                             comments must be received at the
                                                    greatest extent practicable and                            (vi) Restrictions: (A) Disposal shall be            address provided below, no later than 5
                                                    permitted by law, to make                                limited to dredged material from the                  p.m. on August 12, 2016.
                                                    environmental justice part of their                      Charleston, South Carolina, area;                     ADDRESSES: In commenting, please refer
                                                    mission by identifying and addressing,                     (B) Disposal shall be limited to                    to file code 0991–AC06. Because of staff
                                                    as appropriate, disproportionately high                  dredged material determined to be                     and resource limitations, comments
                                                    and adverse human health or                              suitable for ocean disposal according to              must be submitted electronically to
                                                    environmental effects of their programs,                 40 CFR 227.13;                                        www.regulations.gov. Follow the
                                                    policies, and activities on minority                       (C) Disposal shall be managed by the                ‘‘Submit a comment’’ instructions.
                                                    populations and low-income                               restrictions and requirements contained               FOR FURTHER INFORMATION CONTACT: Dr.
                                                    populations in the United States. The                    in the currently-approved Site
                                                    EPA determined that this proposed rule                                                                         Audrey Clarke at HHS at 202–720–1908.
                                                                                                             Management and Monitoring Plan                        SUPPLEMENTARY INFORMATION:
                                                    will not have disproportionately high                    (SMMP);
                                                    and adverse human health or                                                                                       Inspection of Public Comments: All
                                                                                                               (D) Monitoring, as specified in the                 comments received before the close of
                                                    environmental effects on minority or                     SMMP, is required.
                                                    low-income populations because it does                                                                         the comment period are available for
                                                    not affect the level of protection                       *      *     *    *     *                             viewing by the public, including
                                                    provided to human health or the
                                                                                                             [FR Doc. 2016–16584 Filed 7–12–16; 8:45 am]           personally identifiable or confidential
                                                    environment. The EPA has assessed the                    BILLING CODE 6560–50–P                                business information that is included in
                                                    overall protectiveness of modifying the                                                                        a comment. We post all comments
                                                    Charleston ODMDS against the criteria                                                                          received before the end of the comment
                                                    established pursuant to the MPRSA to                     DEPARTMENT OF HEALTH AND                              period on the following Web site as
                                                    ensure that any adverse impact to the                    HUMAN SERVICES                                        soon as possible after they have been
                                                    environment will be mitigated to the                                                                           received: http://regulations.gov. Follow
                                                                                                             45 CFR Part 75                                        the search instructions on that Web site
                                                    greatest extent practicable. We welcome
                                                    comments on this proposed action                         RIN 0991–AC06
                                                                                                                                                                   to view the public comments.
                                                    related to this Executive Order.                                                                               Background
                                                                                                             Health and Human Services Grants
                                                    List of Subjects in 40 CFR Part 228                      Regulation                                               This NPRM proposes changes to the
                                                      Environmental protection, Water                                                                              HHS’s adoption of the Uniform
                                                    pollution control.                                       AGENCY:  Department of Health and                     Administrative Requirements, Cost
                                                                                                             Human Services; Office of the Assistant               Principles, and Audit Requirements for
                                                      Authority: This action is issued under the             Secretary for Financial Resources,                    Federal Awards published on December
                                                    authority of Section 102 of the Marine
                                                                                                             Division of Grants, Office of Grants                  19, 2014 (79 FR 75871) and the
                                                    Protection, Research, and Sanctuaries Act, as
                                                    amended, 33 U.S.C. 1401, 1411, 1412.                     Policy, Oversight, and Evaluation.                    technical amendments published by
                                                                                                             ACTION: Notice of proposed rulemaking.                HHS on January 20, 2016 (81 FR 3004).
                                                      Dated: June 22, 2016.                                                                                        HHS codified the OMB language, with
                                                    Heather McTeer Toney,                                    SUMMARY:   This notice of proposed                    noted modifications, in 45 CFR part 75.
                                                    Regional Administrator, Region 4.                        rulemaking (NPRM) proposes changes to                 Unlike all of the other modifications to
                                                      For the reasons set out in the                         the Department of Health and Human                    the Uniform Administrative
                                                    preamble, the EPA proposes to amend                      Services’ (HHS) adoption of the Office                Requirements, these proposed changes,
                                                    chapter I, title 40 of the Code of Federal               of Management and Budget’s (OMB)                      although based on existing law or HHS
                                                    Register as follows:                                     Uniform Administrative Requirements,                  policy, were not previously codified in
                                                                                                             Cost Principles, and Audit                            regulation. This NPRM seeks comments
                                                    PART 228—CRITERIA FOR THE                                Requirements for Federal Awards                       for these important regulatory changes.
                                                    MANAGEMENT OF DISPOSAL SITES                             (‘‘Uniform Administrative                                In order to give full effect to other
                                                    FOR OCEAN DUMPING                                        Requirements’’) published on December                 important government-wide initiatives,
                                                                                                             19, 2014 (79 FR 75871) and the                        HHS is proposing further amendments
                                                    ■ 1. The authority citation for part 228                 technical amendments published by                     at this time, which HHS intends to
                                                    continues to read as follows:                            HHS on January 20, 2016 (81 FR 3004).                 finalize as soon as possible. HHS
                                                        Authority: 33 U.S.C. 1412 and 1418.                  HHS codified the OMB language, with                   proposes several additional changes to
jstallworth on DSK7TPTVN1PROD with PROPOSALS




                                                    ■ 2. Section 228.15 is amended by                        noted modifications as explained in the               the codification of 2 CFR part 200 in 45
                                                    revising paragraphs (h)(5)(i) through (iii)              preamble to the December                              CFR part 75. First, HHS proposes to add
                                                    and (vi) to read as follows:                             promulgation, in 45 CFR part 75. The                  language to 45 CFR 75.102, clarifying
                                                                                                             HHS-specific modifications to the                     that the audit requirements and cost
                                                    § 228.15 Dumping sites designated on a                   Uniform Administrative Requirements                   principles applicable to contracts and
                                                    final basis.                                             adopted prior regulatory language that                compacts awarded pursuant to the
                                                    *       *    *       *       *                           was not in conflict with OMB’s                        Indian Self Determination and
                                                        (h) * * *                                            language, and provided additional                     Education Assistance Act (ISDEAA) are


                                               VerDate Sep<11>2014   12:59 Jul 12, 2016   Jkt 238001   PO 00000   Frm 00022   Fmt 4702   Sfmt 4702   E:\FR\FM\13JYP1.SGM   13JYP1


                                                                           Federal Register / Vol. 81, No. 134 / Wednesday, July 13, 2016 / Proposed Rules                                           45271

                                                    governed by subparts E and F including                   services of discrimination on the basis                  Fourth, HHS is proposing to amend
                                                    § 75.505 Sanctions, enforceable through                  of age, disability, sex, race, color,                 45 CFR 75.365, related to restrictions on
                                                    § 75.371 Remedies for noncompliance,                     national origin, religion, sexual                     public access to records, in order to
                                                    and that certain other sections and                      orientation, or gender identity. This                 implement the President’s Executive
                                                    subparts of these regulations do not                     provision codifies for all HHS service                Order 13,642 (May 9, 2013), and
                                                    apply to ISDEAA contracts and                            grants what is already applicable for all             corresponding law. See, e.g., http://
                                                    compacts.                                                HHS service contracts, as required by                 www.whitehouse.gov/the-press-office/
                                                       Notably, the ISDEAA itself specifies                  the HHS Acquisition Regulation                        2013/05/09/executive-order-making-
                                                    that contracts and compacts awarded                      (HHSAR) 352.237–74. The HHSAR                         open-and-machine-readable-new-defaul
                                                    pursuant to the ISDEAA are subject to                    provision makes explicit HHS’s non-                   t-government-, and Departments of
                                                    the Single Audit Act and OMB Circulars                   discrimination policy when obligating                 Labor, Health and Human Services, and
                                                    A–133, A–87, and A–122 and that                          appropriations for solicitations,                     Education, and Related Agencies
                                                    ISDEAA contracts are not subject to                      contracts and orders that deliver service             Appropriations Act of 2014, Public Law
                                                    federal grant and cooperative agreement                  under HHS’s programs directly to the                  113–76, Div. H, Sec. 527. HHS proposes
                                                    requirements. 25 U.S.C. 450c(f), 458aaa–                 public. In order to ensure that this same             to codify permissive authority for HHS
                                                    5(c). In order to clarify how the Uniform                provision applies equally to grants, HHS              awarding agencies to require public
                                                    Administrative Requirements interact                     proposes an addition to make this                     access to manuscripts, publications, and
                                                    with the prior-enacted Federal statute,                  explicit in the grants context.                       data produced under an award,
                                                    and to minimize confusion regarding                         This provision does not apply to                   consistent with applicable law.
                                                    applicability, HHS has determined that                   funding under the Temporary                              Fifth, HHS is proposing to amend 45
                                                    this clarification is required. This will                Assistance for Needy Families Program                 CFR 75.414(c) to add a provision to
                                                    additionally ensure that Indian tribes                   (TANF) (title IV–A of the Social                      restrict indirect cost rates for certain
                                                    and tribal organizations are fully                       Security Act, 42, U.S.C. 601–619). The                grants. It is long-standing HHS policy to
                                                    apprised of their rights and                             TANF statute, 42 U.S.C. 608(d), already               restrict training grants to a maximum
                                                    responsibilities. Although HHS                           identifies the nondiscrimination                      eight percent indirect cost rate. HHS
                                                    considers this amendment to be a                         provisions that can be applied to TANF.               proposes additionally to impose this
                                                    requirement of existing statute and                         In addition, HHS is codifying its                  same limitation on foreign organizations
                                                    regulation, HHS proposes this change                     implementation of the decisions in U.S.               and foreign public entities, which
                                                    with notice and an opportunity for                       v. Windsor, 570 U.S. ll(2013), 133                    typically do not negotiate indirect cost
                                                    comment to ensure that the regulated                     S.Ct. 2675 and Obergefell v. Hodges, 576              rates. In the proposed rule, American
                                                    community is aware of this clarification.                U.S. ll(2015), 135 S.Ct. 2584. The                    University, Beirut, and the World
                                                       In addition, HHS proposes to add                      HHS codification of its interpretation of             Health Organization are exempted
                                                    language to clarify the meaning of                       these Supreme Court decisions ensures                 specifically from the indirect cost rate
                                                    disallowed cost as used in 25 U.S.C.                     that same-sex spouses, marriages, and                 limitation because they are eligible for
                                                    450j–1(f) to reflect that the meaning                    households are treated the same as                    negotiated facilities and administration
                                                    must adhere to the audit requirements                    opposite-sex spouses, marriages, and                  (F&A) cost reimbursement. This
                                                    of 45 CFR part 75, subpart F. Because                    households in terms of determining                    restriction on indirect costs, as
                                                    subpart F applies to ISDEAA contracts                    beneficiary eligibility or participation in           indicated by 45 CFR 75.101, flows down
                                                    and compacts, and the ISDEAA contains                    grant-related activities.                             to subawards and subrecipients.
                                                    a stringent time limitation on certain                      Because these two codifications are                   Finally, HHS proposes a new selected
                                                    claims pursuant to the Single Audit Act                  being proposed for consistency with law               item of cost for codification in the cost
                                                    Amendments of 1996 (31 U.S.C. 7501–                      and current HHS policy, HHS believes                  principles as 45 CFR 75.477, regarding
                                                    7507), HHS proposes to clarify that the                  that they are non-controversial, but                  shared responsibility payments. As HHS
                                                    scope of the time limitation applies only                nonetheless requests public comment.                  has already announced in policy for the
                                                    to cost disallowances arising under such                 Third, HHS is proposing to clarify the                Ryan White HIV/AIDS Program, any
                                                    Act, and not to other claims or                          language currently codified in 45 CFR                 payments or assessments imposed on an
                                                    disallowances identified through other                   part 75 regarding the applicability to                individual or individuals pursuant to 26
                                                    audits or investigations. Without the                    states of certain payment provisions.                 U.S.C. 5000A(b) as a result of any failure
                                                    addition of this clarifying language a                   Because the current language applies                  to maintain minimum essential coverage
                                                    different interpretation of the time                     the provisions of Treasury—State Cash                 as required by 26 U.S.C. 5000A(a), are
                                                    limitation (which has been adopted in a                  Management Improvement Act                            not allowable costs under a grant. See
                                                    few isolated judicial and administrative                 agreements and default procedures                     HAB Policy Notice 13–04, at 2–3; http://
                                                    cases) would place additional                            codified at 31 CFR part 205 and TM 4A–                hab.hrsa.gov/manageyourgrant/
                                                    administrative burdens on the Indian                     2000, and such agreements may not                     pinspals/pcn1304privateinsurance.pdf.
                                                    Health Service and entities holding                      contain specific provisions addressed by              Because this is a sound public policy
                                                    ISDEAA contracts and compacts by                         45 CFR 75.305, HHS seeks to modify the                requirement for all grants, not just the
                                                    compelling the government and the                        language to ensure clarity. In doing so,              Ryan White HIV/AIDS Program grants,
                                                    entities to perform burdensome and                       to the extent that the governing                      HHS proposes to codify this provision
                                                    intrusive program compliance reviews                     provisions are silent as to the payment               in the Uniform Administrative
                                                    in addition to the annual single audit                   provisions described in the Uniform                   Requirements. Furthermore, HHS
                                                    required by the Single Audit Act. HHS                    Administrative Requirements, there                    proposes to adopt the same stance with
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                                                    believes the proposed language avoids                    should be no effect on states, as they                regard to payments for failure to offer
                                                    imposing unreasonable burdens on the                     had been subject to these same                        health coverage to employees. Because
                                                    government and tribes and limits the                     provisions pursuant to 45 CFR 92.21.                  the provision codified at 26 U.S.C.
                                                    need for yearly program compliance                       However, HHS proposes the                             4980H has not yet been enforced against
                                                    reviews.                                                 clarification so that all states are aware            any employers, HHS has not had the
                                                       Second, HHS proposes two changes to                   of the necessity to, for example, expend              need previously to announce a stance
                                                    45 CFR 75.300. First, HHS is codifying                   refunds and rebates prior to drawing                  on this issue. HHS does so now, and
                                                    a prohibition in the provision of                        down additional grant funds.                          seeks comments from the public.


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                                                    45272                  Federal Register / Vol. 81, No. 134 / Wednesday, July 13, 2016 / Proposed Rules

                                                    Paperwork Reduction Act                                  statement or specifically addressed the                disallowed costs that are identified
                                                      In accordance with the Paperwork                       regulatory alternatives considered.                    through a Single Agency Audit
                                                    Reduction Act of 1995 (44 U.S.C. Ch.                                                                            conducted pursuant to the Single Audit
                                                                                                             Executive Order 13132 Determination
                                                    3506; 5 CFR 1320 Appendix A.1), HHS                                                                             Act and subject to the requirements of
                                                                                                               HHS has determined that this NPRM                    subpart F, and shall not include claims
                                                    reviewed this NPRM and determined
                                                                                                             does not have any Federalism                           or disallowances identified through
                                                    that there are no new collections of
                                                                                                             implications, as required by Executive                 other audits or investigations.
                                                    information contained therein.
                                                                                                             Order 13132.                                           ■ 4. Amend § 75.300 by adding
                                                    Regulatory Flexibility Act                                                                                      paragraphs (c) and (d) to read as follows:
                                                                                                             Sylvia M. Burwell,
                                                       The Regulatory Flexibility Act                        Secretary, Department of Health and Human              § 75.300 Statutory and national policy
                                                    requires that an agency provide a final                  Services.                                              requirements.
                                                    regulatory flexibility analysis or to
                                                    certify that the rule will not have a                    List of Subjects in 45 CFR Part 75                     *     *       *    *     *
                                                    significant economic impact on a                                                                                  (c) It is a public policy requirement of
                                                                                                               Accounting, Administrative practice
                                                    substantial number of small entities.                                                                           HHS that no person otherwise eligible
                                                                                                             and procedure, Cost principles, Grant
                                                    This NPRM aligns 45 CFR part 75 with                                                                            will be excluded from participation in,
                                                                                                             programs, Grant programs—health,
                                                    various regulatory and statutory                                                                                denied the benefits of, or subjected to
                                                                                                             Grants administration, Hospitals,
                                                    provisions, implements Supreme Court                                                                            discrimination in the administration of
                                                                                                             Indians, Nonprofit organizations
                                                    decisions, and codifies long-standing                                                                           HHS programs and services based on
                                                                                                             reporting and recordkeeping
                                                    policies thus clarifying and enhancing                                                                          non-merit factors such as age, disability,
                                                                                                             requirements, and State and local
                                                    the provisions in HHS’s interim final                                                                           sex, race, color, national origin, religion,
                                                                                                             governments.
                                                    guidance issued December 19, 2014, and                                                                          gender identity, or sexual orientation.
                                                                                                               For the reasons set forth in the                     Recipients must comply with this
                                                    amended on January 20, 2016. In order                    preamble, part 75 of title 45 of the Code
                                                    to ensure that the public receives the                                                                          public policy requirement in the
                                                                                                             of Federal Regulations is proposed to be               administration of programs supported
                                                    most value, it is essential that HHS grant               amended as follows:
                                                    programs function as effectively and                                                                            by HHS awards.
                                                                                                             ■ 1. The authority citation for 45 CFR                   (d) In accordance with the Supreme
                                                    efficiently as possible, and that there is               part 75 continues to read as follows:
                                                    a high level of accountability to prevent                                                                       Court decisions in United States v.
                                                    waste, fraud, and abuse. The proposed                         Authority: 5 U.S.C. 301.                          Windsor and in Obergefell v. Hodges, all
                                                    additions provide enhanced direction                     ■ 2. Amend § 75.101 by adding                          recipients must treat as valid the
                                                    for the public and will not have a                       paragraph (f) to read as follows:                      marriages of same-sex couples. This
                                                    significant economic impact beyond                                                                              does not apply to registered domestic
                                                    HHS’s current regulations.                               § 75.101     Applicability.                            partnerships, civil unions or similar
                                                                                                             *     *     *    *     *                               formal relationships recognized under
                                                    Executive Order 12866 Determination                        (f) Section 75.300(c) does not apply to              state law as something other than a
                                                       Pursuant to Executive Order 12866,                    the Temporary Assistance for Needy                     marriage.
                                                    HHS has designated this NPRM to be                       Families Program (title IV–A of the                    ■ 5. Revise § 75.305(a) to read as
                                                    economically non-significant. This rule                  Social Security Act, 42 U.S.C. 601–619).               follows:
                                                    is not being treated as a ‘‘significant                  ■ 3. Amend § 75.102 by adding
                                                                                                             paragraph (e) to read as follows:                      § 75.305    Payment.
                                                    regulatory action’’ under section 3(f) of
                                                    Executive Order 12866. Accordingly,                                                                               (a)(1) For states, payments are
                                                                                                             § 75.102     Exceptions.                               governed by Treasury-State CMIA
                                                    the rule has not been reviewed by the
                                                    Office of Management and Budget.                         *     *     *     *     *                              agreements and default procedures
                                                                                                               (e)(1) Indian tribes and tribal                      codified at 31 CFR part 205 and TFM
                                                    Unfunded Mandates Reform Act of                          organizations carrying out a compact or                4A–2000 Overall Disbursing Rules for
                                                    1995 Determination                                       contract under the ISDEAA must                         All Federal Agencies.
                                                       Section 202 of the Unfunded                           comply with Subpart E, Cost Principles,                  (2) To the extent that Treasury-State
                                                    Mandates Reform Act of 1995                              and Subpart F, Audit Requirements,                     CMIA agreements and default
                                                    (Unfunded Mandates Act) (2 U.S.C.                        including § 75.505 Sanctions,                          procedures do not address expenditure
                                                    1532) requires that covered agencies                     enforceable through § 75.371 Remedies                  of program income, rebates, refunds,
                                                    prepare a budgetary impact statement                     for noncompliance. References to cost                  contract settlements, audit recoveries
                                                    before promulgating a rule that includes                 principles and audit requirements in the               and interest earned on such funds, such
                                                    any Federal mandate that may result in                   ISDEAA and its implementing                            funds must be expended before
                                                    the expenditure by State, local, and                     regulations, including OMB Circulars                   requesting additional cash payments.
                                                    tribal governments, in the aggregate, or                 A–87, A–122, and A–133 (which were                     *     *     *     *     *
                                                    by the private sector, of $100 million or                superseded by 2 CFR 200), shall be                     ■ 6. Revise § 75.365 to read as follows:
                                                    more in any one year. If a budgetary                     deemed to be references to subparts E
                                                    impact statement is required, section                    and F. Except for statutorily mandated                 § 75.365 Restrictions on public access to
                                                    205 of the Unfunded Mandates Act also                    grants added to a funding agreement in                 records.
                                                    requires covered agencies to identify                    accordance with 42 CFR part 137,                         Consistent with section 75.322 of this
                                                    and consider a reasonable number of                      subpart F, certain sections of this part,              part, HHS awarding agencies may
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                                                    regulatory alternatives before                           applicable to grants and cooperative                   require recipients to permit public
                                                    promulgating a rule. HHS has                             agreements, do not apply to ISDEAA                     access to manuscripts, publications, and
                                                    determined that this NPRM will not                       contracts and compacts, including 45                   data produced under an award.
                                                    result in expenditures by State, local,                  CFR 75.111, 75.112, and 75.113 and                     However, no HHS awarding agency may
                                                    and tribal governments, or by the                        subparts C and D.                                      place restrictions on the non-Federal
                                                    private sector, of $100 million or more                    (2) Cost disallowances to which the                  entity that limit public access to the
                                                    in any one year. Accordingly, HHS has                    limitation on remedies under 25 U.S.C.                 records of the non-Federal entity
                                                    not prepared a budgetary impact                          450j–1(f) applies shall include only                   pertinent to a Federal award identified


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                                                                           Federal Register / Vol. 81, No. 134 / Wednesday, July 13, 2016 / Proposed Rules                                                 45273

                                                    in sections 75.361 through 75.364,                       ■ 7. In § 75.414(c)(1) add paragraphs                 ■   8. Add § 75.477 to read as follows:
                                                    except for protected personally                          (c)(1)(i) through (iii):
                                                                                                                                                                   § 75.477    Shared responsibility payments.
                                                    identifiable information (PII) or when
                                                                                                             § 75.414   Indirect (F&A) costs.                         (a) Payments for failure to maintain
                                                    the HHS awarding agency can
                                                    demonstrate that such records will be                    *      *    *      *     *                            minimum essential health coverage.
                                                    kept confidential and would have been                      (c)(1) * * *                                        Any payments or assessments imposed
                                                    exempted from disclosure pursuant to                       (i) indirect costs on training grants are           on an individual or individuals
                                                                                                             limited to a fixed rate of eight percent              pursuant to 26 U.S.C. 5000A(b) as a
                                                    the Freedom of Information Act (5
                                                                                                             of MTDC exclusive of tuition and                      result of any failure to maintain
                                                    U.S.C. 552) or controlled unclassified
                                                                                                             related fees, direct expenditures for                 minimum essential coverage as required
                                                    information pursuant to Executive
                                                                                                             equipment, and subawards in excess of                 by 26 U.S.C. 5000A(a) are not allowable
                                                    Order 13556 if the records had belonged                                                                        expenses under Federal awards from an
                                                                                                             $25,000;
                                                    to the HHS awarding agency. The                                                                                HHS awarding agency.
                                                                                                               (ii) indirect costs on grants awarded to
                                                    Freedom of Information Act (5 U.S.C.                     foreign organizations and foreign public                 (b) Payments for failure to offer health
                                                    552) (FOIA) does not apply to those                      entities and performed fully outside of               coverage to employees. Any payments
                                                    records that remain under a non-Federal                  the territorial limits of the U.S. may be             or assessments imposed on an employer
                                                    entity’s control except as required under                paid to support the costs of compliance               pursuant to 26 U.S.C. 4980H as a result
                                                    § 75.322. Unless required by Federal,                    with federal requirements at a fixed rate             of the employer’s failure to offer to its
                                                    state, local, or tribal statute, non-Federal             of eight percent of MTDC exclusive of                 full-time employees (and their
                                                    entities are not required to permit                      tuition and related fees, direct                      dependents) the opportunity to enroll in
                                                    public access to their records identified                expenditures for equipment, and                       minimum essential coverage under an
                                                    in sections 75.361 through 75.364. The                   subawards in excess of $25,000; and,                  eligible employer-sponsored plan are
                                                    non-Federal entity’s records provided to                   (iii) negotiated indirect costs may be              not allowable expenses under Federal
                                                    a Federal agency generally will be                       paid to the American University, Beirut,              awards from an HHS awarding agency.
                                                    subject to FOIA and applicable                           and the World Health Organization.                    [FR Doc. 2016–15014 Filed 7–12–16; 8:45 am]
                                                    exemptions.                                              *      *    *      *     *                            BILLING CODE 4150–24–P
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Document Created: 2016-07-13 01:44:12
Document Modified: 2016-07-13 01:44:12
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionNotice of proposed rulemaking.
DatesTo be assured consideration, comments must be received at the
ContactDr. Audrey Clarke at HHS at 202-720- 1908.
FR Citation81 FR 45270 
RIN Number0991-AC06
CFR AssociatedAccounting; Administrative Practice and Procedure; Cost Principles; Grant Programs; Grant Programs-Health; Grants Administration; Hospitals; Indians; Nonprofit Organizations Reporting and Recordkeeping Requirements and State and Local Governments

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