New Special Experimental Project (SEP-16) To Evaluate Proposals for Delegation of Certain Program-Wide FHWA Responsibilities to States

Brandye L. Hendrickson
Federal Highway Administration
20 September 2018

[Federal Register Volume 83, Number 183 (Thursday, September 20, 2018)]
[Notices]
[Pages 47674-47676]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20347]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration


New Special Experimental Project (SEP-16) To Evaluate Proposals 
for Delegation of Certain Program-Wide FHWA Responsibilities to States

AGENCY: Federal Highway Administration (FHWA), U.S Department of 
Transportation (DOT).

ACTION: Notice.

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SUMMARY: The FHWA is establishing a new Special Experimental Project 
(SEP-16) to test and evaluate the delegation of program-level 
responsibilities of the Federal-aid highway program (FAHP) to States, 
including the appropriate steps States should take to request to 
exercise delegated authority. The FHWA anticipates there is interest in 
State assumption of program-level actions for approval of design 
standards, noise policies, preventative maintenance programs, and real 
property acquisitions and disposals. The term ``program-level actions'' 
in this context means decisions that apply generally to projects in a 
State and broadly affect the implementation of the Federal-aid highway 
program in the State, but excludes Federal decisions relating to 
eligibility, obligation, reimbursement, authorization, and compliance.

DATES: This new SEP-16 project is being initiated on September 20, 
2018.

FOR FURTHER INFORMATION CONTACT: For technical information: Cindi Ptak, 
Office of Innovative Program Delivery (HIN), (202) 366-8408; for legal 
information: Janet Myers, Office of the Chief Counsel (HCC), (202) 366-
2019, 1200 New Jersey Avenue SE, Washington, DC 20590. Office hours are 
from 8:00 a.m. to 4:30 p.m., ET, Monday through Friday, except Federal 
holidays.

SUPPLEMENTARY INFORMATION: 

Electronic Access

    An electronic copy of this notice may be downloaded from the 
Federal Register's home page at: http://www.archives.gov; the 
Government Publishing Office's database at: https://www.gpo.gov/fdsys/; 
or the specific docket page at: www.regulations.gov.

Background

    The Fixing America's Surface Transportation (FAST) Act (Pub. L. 
114-94) builds on the authorities and requirements in earlier 
legislation to promote the transition from FHWA project-level ``full-
oversight'' of the FAHP to a risk-based approach to FHWA oversight 
activities. The FHWA's use of a risk-based approach to stewardship and 
oversight is intended to optimize the successful delivery of projects 
and to ensure compliance with Federal requirements by focusing FHWA 
resources most efficiently and effectively.
    Unless authorized by law, FHWA may not delegate or assign its 
decision-making responsibilities to a State department of 
transportation (State DOT). Section 106(c) of Title 23, United States 
Code (U.S.C.), authorizes States to assume project responsibilities for 
design, plans, specifications, estimates, contract awards, and 
inspections for

[[Page 47675]]

projects that receive funding under Title 23, U.S.C., and are on the 
National Highway System (NHS), including projects on the Interstate 
System. The States may assume these responsibilities unless FHWA, 
acting under a delegation of authority from the Secretary, determines 
that the assumption is not appropriate (23 U.S.C. 106(c)(1)). For non-
NHS projects, States must assume such responsibilities (23 U.S.C. 
106(c)(2)).
    Section 1316(a) of the FAST Act directs the Secretary of 
Transportation to use the authority under 23 U.S.C. 106(c) to the 
maximum extent practicable to allow a State to assume the 
responsibilities described in 23 U.S.C. 106(c) on both a project-
specific and a programmatic basis. Section 1316 of the FAST Act seeks 
to expand the use of the 23 U.S.C. 106(c) authority for State 
assumption of responsibilities. State assumption of certain 
responsibilities is part of the transition to risk-based oversight of 
the FAHP. To implement section 1316 of the FAST Act, FHWA published a 
Federal Register notice soliciting feedback from States and other 
stakeholders on additional project-level authorities to assume under 
Title 23.\1\ The responses received indicated an interest in State 
assumption of program-level actions for approval of design standards, 
noise policies, preventative maintenance programs, and utility 
procedures, as well as some areas of real estate acquisition. Some 
responses requested authority in areas that FHWA has determined already 
are within the 23 U.S.C. 106(c) assumption authority.
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    \1\ 81 FR 59715 (August 30, 2016).
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    The FHWA is initiating a new SEP-16 pursuant to authority granted 
to the Secretary in 23 U.S.C. 502(b) to evaluate potential effects of 
State assumption of program-level FAHP responsibilities that are not 
currently assumable. The experimental authority may be used to test 
deviations from Title 23 statutory, regulatory, or policy provisions, 
provided that the experimental features are consistent with the overall 
purpose and intent of the underlying statute, regulation, or policy 
being tested. Actions explicitly prohibited by statute cannot be the 
subject of a SEP-16 experiment. The experiment must be consistent with 
other Federal laws that apply to Title 23 funded activities. For 
example, the recording statute, 31 U.S.C. 1501, and the Antideficiency 
Act (31 U.S.C. 1341(a)(1)(A)), vest the responsibility to record 
obligations of the Federal Government with the Federal agency 
responsible for administering the Federal assistance program. The FHWA 
is establishing this SEP-16 to consider program-level authorities (as 
opposed to project-level actions) States may want to assume. The term 
``program-level authority'' in this context means decisions that apply 
generally to projects in a State and broadly affect the Federal-aid 
system in the State, but excludes Federal decisions relating to 
eligibility, obligation, reimbursement, authorization, and compliance.
    This SEP-16 is intended to allow States to propose the assumption 
of Title 23 program-level responsibilities provided they can 
demonstrate they have, or can reasonably put in place, the necessary 
laws, regulations, controls, and resources to take on the Federal role. 
Because States already have experience with project-level assumptions 
under 23 U.S.C. 106(c), FHWA anticipates initially receiving proposals 
for program-level authority affecting these types of areas.
    This SEP-16 will allow FHWA to understand the implications of 
delegation of program-wide decisions in various program areas. The 
lessons learned from SEP-16 will aid FHWA in developing comprehensive 
policies and inform stakeholders if the delegation of specific program-
level authorities, or other discretionary authorities established in 
Title 23, is appropriate.
    To facilitate public access to SEP-16 information, all SEP-16 
proposals, workplans, and reports will be posted on a public facing 
website.

Solicitation of Letters of Interest

    This notice announces SEP-16 and requests Letters of Interest. 
Entities eligible to submit letters (``Applicants'') are State DOTs as 
defined in 23 U.S.C. 101. Letters of Interest, which should be 
submitted to the appropriate FHWA Division Office, initiate the 
application process described below. The Letter of Interest should 
include a high-level description of the Applicant's proposal, reasons 
for wanting to assume the program-level authority, and the anticipated 
resulting improvements to program delivery. Ideally, the Applicant will 
quantify the resulting improvements in terms of project time and/or 
cost savings. The Applicant should include enough detail to allow FHWA 
to determine how the proposal deviates from current law (including 
regulations) and practice, and how the actions covered by the proposal 
are addressed in current policy. The Letter of Interest should 
reference the Title 23 program and the specific legal authority(ies) 
being requested for delegation. Further, the Applicant should provide 
specific examples that demonstrate experience with project-level 
delegation in the affected program area(s), if applicable, as well as 
the level of collaboration conducted so far with relevant FHWA Division 
or Program Offices about the proposal.

Application Process

    The application process is three-tiered with each step developing 
more specifics of the proposed program-level assumption(s) for FHWA 
consideration and feedback. The FHWA will evaluate each step to 
determine whether a proposal falls within the scope of section 502(b) 
and is appropriate for this experimental process before inviting and 
working with an Applicant to proceed to the next step for more detailed 
proposal development.
    The first step in the application process is the Letter of Interest 
described above. The FHWA will acknowledge receipt of the Letter of 
Interest and provide an anticipated timeframe for initially evaluating 
the proposal and providing a formal response. After review of the 
proposal, FHWA will provide a formal response that will either request 
the Applicant to proceed with submitting a Concept Paper, or provide 
FHWA's explanation for not advancing the proposal.
    If a Concept Paper is requested, the Applicant should submit to the 
appropriate FHWA Division Office a narrative further detailing the 
Applicant's proposal. This Concept Paper should not exceed 5 pages and 
be formatted single-spaced, using a standard 12-point font with 1-inch 
margins. Charts, tables, and other items may also be submitted as 
attachments to supplement the narrative and do not count toward the 
five-page limit. The Concept Paper should demonstrate that the State 
has the necessary laws, regulations, controls, and resources in place 
to assume the Federal role for the program-level responsibilities 
requested. If applicable, the Applicant may use experience with 
assumption of project-level authorities to demonstrate readiness to 
assume program-level responsibilities. If any necessary piece is 
missing, the Applicant should outline a plan and timeline anticipated 
to put pieces in place. In addition, the Concept Paper should detail 
supporting analysis for the anticipated program delivery improvements 
and consider a risk assessment of the expected impact the assumption of 
authority may have on the State's program--specifically on resources, 
processes, and stakeholders--and include measures the State would use 
to ensure the responsibilities are carried out in accordance with 
Federal requirements. The Concept Paper

[[Page 47676]]

should also summarize any preparation the Applicant may need to make if 
the experiment is approved and the time necessary for that preparation 
(e.g., provide training for staff; make needed changes to procedures, 
organization charts, etc.). The FHWA will evaluate the Concept Paper, 
and either request the Applicant to proceed to the Detailed Proposal 
stage, or provide an explanation for not advancing the request.
    Since the requirements for the Detailed Proposal will vary 
depending on the complexity of the proposed program assumption and the 
results of FHWA's evaluation of the Concept Paper, the appropriate FHWA 
Division will coordinate with the Applicant in preparing the Detailed 
Proposal. At a minimum, the Applicant's Detailed Proposal should: (1) 
Propose a duration for conducting the experiment, including a timeline 
for any transition activities; (2) identify key personnel and contacts 
with proposed roles and responsibilities; and (3) recommend an 
Evaluation Plan with reporting mechanisms, performance measures, goals, 
and other evaluation criteria, and frequency of reviews. To provide 
consistency among the SEP-16 experiments, FHWA will provide the 
Applicant certain performance measures and evaluation criteria common 
to all SEP-16 Evaluation Plans.
    Should FHWA decide to proceed with the experiment, FHWA and the 
Applicant will enter into a memorandum of understanding and develop a 
workplan for the experiment.

Conclusion

    The FHWA is committed to continuing its transition to a risk-based 
approach to stewardship and oversight of the FAHP. To this end, SEP-16 
is designed to provide FHWA with a better understanding of the 
implications of allowing States to assume program-level authorities in 
various program areas. This notice announces the SEP-16 and identifies 
the process for States to apply to assume program-level 
responsibilities for the FAHP in their States.

(Authority: 23 U.S.C. 315 and 502).

    Issued in Washington, DC, on September 11, 2018.
Brandye L. Hendrickson,
Deputy Administrator, Federal Highway Administration.
[FR Doc. 2018-20347 Filed 9-19-18; 8:45 am]
 BILLING CODE 4910-22-P