U.S. Department of Transportation
Federal Highway Administration
1200 New Jersey Avenue, SE
Washington, DC 20590
202-366-4000


Skip to content U.S. Department of Transportation/Federal Highway AdministrationU.S. Department of Transportation/Federal Highway Administration

Home / Resources / Legislation, Regulations and Guidance / Directives and Memorandum / Notices

Notice
Subject
ALLOCATION OF FISCAL YEAR (FY) 2001 FUNDS FOR HIGHWAY USE TAX EVASION PROJECTS
Classification Code Date Office of Primary Interest
N 4510.448 November 22, 2000 HPTS

EXPIRATION DATE: June 30, 2001

  1. What is the purpose of this Notice? This Notice allocates funds to the States for highway use tax evasion projects authorized for FY 2001 pursuant to Title 23, U.S.C. Section 143 and Section 1101 of the Transportation Equity Act for the 21st Century (TEA-21) (Pub. L. 105-178), and provides obligation authority for these funds. See Attachment 1.

  2. What is the availability of these funds?

    1. The funds resulting from this allocation, as shown in Attachment 2, are available, up to the limitation amount, for obligation until June 30, 2001, at which time any amounts not obligated will be withdrawn. The funds are being made available to the States that have expended and billed the Federal Highway Administration (FHWA) for all but 1 year's allocation of Tax Evasion Project funds, $100,000 for task force lead States, and $50,000 for the member States.

    2. Obligation authority is provided for 100 percent of the amount allocated to the States by this Notice. The obligation authority being distributed by this Notice is to support the obligation of "nonformula" funds. Division Administrators should ensure that this obligation authority is included in any required notification of the status of funds obligated in FY 2001.

    3. The Federal share for projects authorized with these funds is 100 percent.

    4. The program code for these funds is Q96, and the project prefix is TCP.

  3. What is the authority for these funds? Section 1101(a)(14) of TEA-21 authorized $5,000,000 to be obligated for Highway Use Tax Evasion Projects under 23 U.S.C. Section 143 for FY 2001. Most of the funds authorized are reserved for the Internal Revenue Service (IRS) for the development and operation of an automated fuel tracking system. The balance of the funds is being allocated to the States, primarily to support continued participation in regional motor fuel tax enforcement task forces.

  4. What is the background concerning these funds? Nine regional motor fuel tax enforcement task forces have been created under the coordination and leadership of the IRS District Offices and State revenue agencies in the lead States of California, Florida, Indiana, Massachusetts, Nebraska, New Jersey, North Carolina, Oregon, and Texas. FHWA Notice N 4510.427 allocated FY 2000 funds at $30,088 to the lead States and $15,044 to other States that had expended and billed FHWA for all but 1 year's allocation of prior funds. All States receiving FY 2000 funds under this Act obligated these available funds by September 30, 2000.

  5. What are the project requirements?

    1. All FY 2001 funds allocated with this Notice shall be identified under program code Q96 and will follow the same Form FHWA-37 reporting procedures previously established for appropriation code 94C in the February 7, 1991, memorandum to the Chief of the Program Analysis Division, subject: "FMIS Manual Prepublication Notification." Funds are available at 100 percent Federal share to the State agency responsible for enforcement of motor fuel taxes. However, as specified in 23 U.S.C. 143(b)(5), States wishing to receive funds for tax evasion projects must certify that the aggregate expenditure of funds of the State, exclusive of Federal funds, for motor fuel tax enforcement activities will be maintained at a level that does not fall below the average level of such expenditures for the last 2 fiscal years. To receive funding under this program, the State revenue agency responsible for enforcing State motor fuel taxes shall comply with the procedures established for this program published in the Federal Register, dated October 9, 1998, (Attachment 3). This includes signing the Memorandum of Understanding agreeing to participate in at least one of the regional motor fuel tax enforcement task forces, preparing a project budget, complying with intergovernmental review requirements, and signing the Project Agreement.

    2. Payments to the States will follow normal Federal-aid procedures. These projects will use normal accounting codes for State projects, that is, object code 4105.

  6. What action is required? The Division Administrator may approve projects by signing the Project Agreement, Form FHWA-1548, Rev. 8/25/99 (Attachment 4), for those States that have not received tax compliance funds under TEA-21. States that have already signed a Project Agreement to include project funds in FYs 1998, 1999, or 2000, allocated by FHWA Notices N 4501.401, N 4510.414, or N 4510.427, respectively, shall sign the revised Amended Project Agreement, Form FHWA-1549, Rev. 11/25/98 (Attachment 5). In each case, one copy, with original signatures, shall be returned to the State, and one copy, with original signatures, shall be retained in the Division Office. The period of performance may also be extended, as needed, when the State and Division Offices sign the Amended Project Agreement.

Signature of Kenneth R. Wykle
Kenneth R. Wykle
Federal Highway Administrator

Related Sites:
TEA-21
www.access.gpo.gov/nara/publaw/105publ.html
Federal Register
www.access.gpo.gov/su_docs/aces/aces140.html


Attachment 1

An Act [Pub.L. No. 105-178, signed June 9, 1998]
/Amendments in the TEA 21 Restoration Act [Pub.L.No. 105-206, Signed 7-22-98]/

To authorize funds for Federal-aid highways, highway safety programs, and transit programs, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Transportation Equity Act for the 21st Century'.

...

SEC. 1101. AUTHORIZATION OF APPROPRIATIONS.

(a) IN GENERAL- The following sums are authorized to be appropriated out of the Highway Trust Fund (other than the Mass Transit Account):

...

(14) HIGHWAY USE TAX EVASION PROJECTS- For highway use tax evasion projects under section 143 of such title /$10,000,000 for fiscal year 1998/ $5,000,000 for each of fiscal years 1998 /1999/ through 2003.

...

SEC. 1114. HIGHWAY USE TAX EVASION PROJECTS.

(a) IN GENERAL- Section 143 of title 23, United States Code, is amended to read as follows:

`Sec. 143. Highway use tax evasion projects

`(a) STATE DEFINED- In this section, the term `State' means the 50 States and the District of Columbia.

`(b) PROJECTS-

`(1) IN GENERAL- The Secretary shall carry out highway use tax evasion projects in accordance with this subsection.

`(2) ALLOCATION OF FUNDS- Funds made available to carry out this section may be allocated to the Internal Revenue Service and the States at the discretion of the Secretary.

`(3) CONDITIONS ON FUNDS ALLOCATED TO INTERNAL REVENUE SERVICE - The Secretary shall not impose any condition on the use of funds allocated to the Internal Revenue Service under this subsection.

`(4) LIMITATION ON USE OF FUNDS- Funds made available to carry out this section shall be used only--

`(A) to expand efforts to enhance motor fuel tax enforcement;

`(B) to fund additional Internal Revenue Service staff, but only to carry out functions described in this paragraph;

`(C) to supplement motor fuel tax examinations and criminal investigations;

`(D) to develop automated data processing tools to monitor motor fuel production and sales;

`(E) to evaluate and implement registration and reporting requirements for motor fuel taxpayers;

`(F) to reimburse State expenses that supplement existing fuel tax compliance efforts; and

`(G) to analyze and implement programs to reduce tax evasion associated with other highway use taxes.

`(5) MAINTENANCE OF EFFORT- The Secretary may not make an allocation to a State under this subsection for a fiscal year unless the State certifies that the aggregate expenditure of funds of the State, exclusive of Federal funds, for motor fuel tax enforcement activities will be maintained at a level that does not fall below the average level of such expenditure for the preceding 2 fiscal years of the State.

`(6) FEDERAL SHARE- The Federal share of the cost of a project carried out under this subsection shall be 100 percent.

`(7) PERIOD OF AVAILABILITY- Funds authorized to carry out this section shall remain available for obligation for a period of 3 years after the last day of the fiscal year for which the funds are authorized.

`(8) USE OF SURFACE TRANSPORTATION PROGRAM FUNDING- In addition to funds made available to carry out this section, a State may expend up to 1/4 of 1 percent of the funds apportioned to the State for a fiscal year under section 104(b)(3) on initiatives to halt the evasion of payment of motor fuel taxes.

`(c) EXCISE FUEL REPORTING SYSTEM-

`(1) IN GENERAL- Not later than April 1/August 1/, 1998, the Secretary shall enter into a memorandum of understanding with the Commissioner of the Internal Revenue Service for the purposes of the development and maintenance by the Internal Revenue Service of an excise fuel reporting system (in this subsection referred to as the `system').

`(2) ELEMENTS OF MEMORANDUM OF UNDERSTANDING- The memorandum of understanding shall provide that--

`(A) the Internal Revenue Service shall develop and maintain the system through contracts;

`(B) the system shall be under the control of the Internal Revenue Service; and

`(C) the system shall be made available for use by appropriate State and Federal revenue, tax, and law enforcement authorities, subject to section 6103 of the Internal Revenue Code of 1986.

`(3) FUNDING /PRIORITY/- Of the amounts made available to carry out this section for each of fiscal years 1998 through 2003, /and prior to funding any other activity under this section,/ the Secretary shall make available sufficient funds to the Internal Revenue Service to establish and operate an automated fuel reporting system.'.

(b) CONFORMING AMENDMENTS-

(1) The analysis for chapter 1 of such title is amended by striking the item relating to section 143 and inserting the following:

`143. Highway use tax evasion projects.'.

(2) Section 1040 of the Intermodal Surface Transportation Efficiency Act of 1991 (23 U.S.C. 101 note; 105 Stat. 1992) is repealed.

(3) Section 8002 of the Intermodal Surface Transportation Efficiency Act of 1991 (23 U.S.C. 101 note; 105 Stat. 2203) is amended--

(A) in the first sentence of subsection (g) by striking`section 1040 of this Act' and inserting `section 143 of title 23, United States Code,'; and

(B) by striking subsection (h).


Attachment 2

U.S. DEPARTMENT OF TRANSPORTATION

FEDERAL HIGHWAY ADMINISTRATION

ALLOCATION OF FUNDS FOR HIGHWAY USE TAX EVASION

PROJECTS FOR FISCAL YEAR 2001

 
 

STATE

FY 2001
OBLIGATION

ALLOCATION
LIMITATION

 
         
 

ARIZONA

$12,707

$12,707

 
 

CALIFORNIA

$25,414

$25,414

 
 

COLORADO

$12,707

$12,707

 
 

CONNECTICUT

$12,707

$12,707

 
 

DELAWARE

$12,707

$12,707

 
 

IDAHO

$12,707

$12,707

 
 

INDIANA

$25,414

$25,414

 
 

IOWA

$12,707

$12,707

 
 

KANSAS

$12,707

$12,707

 
 

KENTUCKY

$12,707

$12,707

 
 

LOUISIANA

$12,707

$12,707

 
 

MAINE

$12,707

$12,707

 
 

MARYLAND

$12,707

$12,707

 
 

MASSACHUSETTS

$25,414

$25,414

 
 

MISSOURI

$12,707

$12,707

 
 

MONTANA

$12,707

$12,707

 
 

NEBRASKA

$25,414

$25,414

 
 

NEVADA

$12,707

$12,707

 
 

NEW JERSEY

$25,414

$25,414

 
 

NEW MEXICO

$12,707

$12,707

 
 

NEW YORK

$12,707

$12,707

 
 

NORTH CAROLINA

$25,414

$25,414

 
 

PENNSYLVANIA

$12,707

$12,707

 
 

RHODE ISLAND

$12,707

$12,707

 
 

SOUTH CAROLINA

$12,707

$12,707

 
 

TENNESSEE

$12,707

$12,707

 
 

TEXAS

$25,414

$25,414

 
 

UTAH

$12,707

$12,707

 
 

VERMONT

$12,707

$12,707

 
 

VIRGINIA

$12,707

$12,707

 
 

WASHINGTON

$12,707

$12,707

 
 

WEST VIRGINIA

$12,707

$12,707

 
 

WISCONSIN

$12,707

$12,707

 
 

WYOMING

$12,707

$12,707

 
 

TOTAL (CODE Q96)

$520,987

$520,987

 

Attachment 3

Federal Register: October 9, 1998 (Volume 63, Number 196)
Notices
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09oc98-200]

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration
[FHWA Docket No. FHWA 98-4262]

Transportation Equity Act for the 21st Century; Implementation Procedures for the Approval and Administration of Projects To Reduce the Evasion of Motor Fuel and Other Highway Use Taxes AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice; request for comments.

SUMMARY: Over the years, funds have been authorized by the Congress for use by the States and the Internal Revenue Service (IRS) to reduce the evasion of motor fuel and highway use taxes. This document sets forth revised procedures, pursuant to sections 1101 and 1114 of the Transportation Equity Act for the 21st Century (TEA-21) (Pub. L. 105-178, 112 Stat. 107), for allocating these funds to the States and the IRS and provides implementation guidance for the approval and administration of such projects under 23 U.S.C. 143. The FHWA seeks public comment from all interested parties regarding the revised funding allocation and administrative procedures described in this notice. The procedures described in this notice may be modified based on the comments received.

DATES: Comments must be received on or before November 23, 1998.

ADDRESSES: Your signed, written comments must refer to the docket number appearing at the top of this document and you must submit the comments to the Docket Clerk, U.S. DOT Dockets, Room PL-401, 400 Seventh Street, SW., Washington, DC 20590-0001. All comments received will be available for examination at the above address between 10 a.m. and 5 p.m., e.t., Monday through Friday, except Federal holidays. Those desiring notification of receipt of comments must include a self-addressed, stamped envelope or postcard.

FOR FURTHER INFORMATION CONTACT:

Mr. Stephen J. Baluch
Office of Policy Development
202-366-0570 or

Mr. Wilbert Baccus
Office of the Chief Counsel
202-366-0780

Federal Highway Administration
400 Seventh Street, SW.
Washington, D.C. 20590.

Office hours are from 7:45 a.m. to 4:15 p.m., e.t., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

Internet users can access all comments received by the U.S. DOT Dockets, Room PL-401, by using the universal resource locator (URL):http://dms.dot.gov. It is available 24 hours each day, 365 days each year. Please follow the instructions online for more information and help.

An electronic copy of this document may be downloaded using a modem and suitable communications software from the Government Printing Office's Electronic Bulletin Board Service at (202)512-1661. Internet users may reach the Federal Register's home page at: http//www.nara.gov/fedreg and the Government Printing Office's database at: http//www.access.gpo.gov/nara.

Background

Sections 1101 and 1114 of the TEA-21 authorize funding for highway use tax evasion projects under 23 U.S.C 143. This notice sets forth certain procedures for allocating those funds to the States and provides guidance for the approval and administration of projects to reduce the evasion of motor fuel and other highway use taxes. Funding authorized for highway use tax evasion projects includes $10 million for fiscal year (FY) 1998 and $5 million per year for FY 1999 through 2003, and up to one-fourth of 1 percent of funds apportioned to the States for the Surface Transportation Program (STP) for ``initiatives to halt the evasion of payment of motor fuel taxes'' (23 U.S.C. 143(b)(8)).

In accordance with 23 U.S.C. 143(c), the major part of the funding authorized in section 1101(a)(14) of TEA-21 for highway use tax evasion projects will be provided to the IRS for the development and maintenance of an automated fuel reporting system. The Federal Highway Administrator, as delegated by the Secretary of Transportation (Secretary), and the Commissioner of the IRS have approved a Memorandum of Understanding (MOU) for the purposes of implementing this system. A copy of the MOU is provided as an attachment to this notice. The MOU establishes the funding to be provided to the IRS. As long as the IRS has met the funding needs to establish and operate the automated fuel reporting system, pursuant to the Secretary's authority under 23 U.S.C. 143(b)(2), the IRS may use a portion of the funds for continuation of the IRS examination and criminal investigation activities of the Joint Federal/State Motor Fuel Tax Compliance Project (or Joint Compliance Project), previously funded under the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), Public Law 102-240, 105 Stat. 1914, or for any other activity specified in 23 U.S.C. 143(b).

All funds not provided to the IRS will be allocated to the States for efforts to reduce the evasion of highway use taxes, including continued participation in regional motor fuel tax enforcement task forces. Nine such task forces have been organized since 1991 covering all States, under the coordination and leadership of the IRS district offices and State revenue agencies in the nine lead States (California, Florida, Indiana, Massachusetts, North Carolina, Nebraska, New Jersey, Oregon, and Texas).

The FHWA intends to distribute the available funds so as to provide, if possible, at least half of the annual funding allocation that was provided under the ISTEA, that is, $50,000 for lead States and $25,000 for all other States and the District of Columbia. In each fiscal year, allocations would be made only to States that have expended and billed the FHWA for all but 1 year's amount of obligated funds. In order for sufficient funds to be available to meet this target allocation, the following actions are recommended:

  1. State revenue agencies are encouraged to extend the completion date for current projects utilizing unexpended funds (the FHWA will grant reasonable extensions of time up to December 2003 for current projects);
  2. States should submit timely reimbursement vouchers so the FHWA can track the balance of unexpended funds for use in making annual allocations; and
  3. Funds not obligated by June 30 would not be restored in future years.

The reduced allocations to the States will not be sufficient to fully fund some of the expenditure items previously budgeted, such as, auditor and investigator salaries, equipment purchases, and

computerization initiatives. Funding for such items would have to be provided from the one-fourth percent allowable use of STP funds by mutual agreement between the State transportation and revenue agencies. But in any event, the $5 million total available for distribution to the States for FYs 1999-2003 should, by judicious use of remaining unexpended funds and careful allocation to meet State needs, provide sufficient minimum funding for all States to continue participation in the activities of the Joint Compliance Project.

Steering Committee

At the outset of the Joint Compliance Project in 1990, a Steering Committee was formed to lend guidance to the regional task forces, serve as a clearinghouse for exchanging information among the task forces, recommend strategies for expanding the project, review progress, and resolve differences among project participants. The FHWA plans to continue using the Steering Committee, with at least one meeting each year, to assist the States, the IRS, and the task forces in adapting to the changing funding situation under TEA-21. Lead States should continue to designate a representative and alternate to serve on the Steering Committee. In addition, under the MOU to be signed between the IRS and the FHWA, the IRS has proposed forming a work group comprised of State, industry, and Federal agency participants that will develop and monitor an implementation plan for the automated fuel reporting system.

Project Requirements

The following requirements apply to highway use tax evasion projects funded from allocated funds under section 1101(b)(14) or from STP funds:

  1. Obligation authority--
    1. Allocated funds--Obligation authority will be provided when funds are allocated by an FHWA Notice. The funds allocated to a State shall remain available to the State revenue agency responsible for motor fuel tax enforcement for obligation until June 30 of each fiscal year, at which time any unobligated funds will be withdrawn.
    2. STP funds--Funds are available for obligation at the request of the State highway agency for the period specified in the law, i.e., for a period of up to 3 years following the year authorized. Funds obligated shall be included within the obligation limitation distributed to the State by the FHWA.
  2. Federal share (allocated funds and STP funds)-- As provided in 23 U.S.C. 143(b)(6), funds are available at 100 percent Federal share.
  3. Maintenance of effort certification--
    1. Allocated funds--As specified in 23 U.S.C. 143(b), States wishing to receive allocations for tax evasion projects must certify that the aggregate expenditure of funds of the State, exclusive of Federal funds, for motor fuel tax enforcement activities will be maintained at a level which does not fall below the average level of such expenditures for its last 2 fiscal years.
    2. STP funds--Maintenance of effort certification is not required.
  4. Task force participation--
    1. Allocated funds--To receive allocations under this program, the State revenue agency responsible for enforcement of State motor fuel taxes shall sign the Memorandum of Understanding agreeing to participate in at least one of the regional task forces. States may join one or more task forces to best meet their needs for coordinated fuel tax enforcement.
    2. STP funds--Signing the Memorandum of Understanding for participation in a regional task force is not required.
  5. Project agreement--
    1. Allocated funds--The State revenue agency shall sign two copies of the Project Agreement (FHWA-1548 as amended after July 1, 1998).
    2. STP funds--The State highway agency shall sign the Project Agreement (PR-2). (A copy of the Project Agreement forms (FHWA-1548 and PR-2) may be obtained from the contacts listed in this notice.)
  6. Project eligibility--
    1. Allocated funds--Funds are available for projects to reduce evasion of motor fuel and other highway use taxes.
    2. STP funds--Funds are available for ``initiatives to halt the evasion of payment of motor fuel taxes'' (emphasis added) as specified in 23 U.S.C. 143(b)(8).
  7. Allowable costs (allocated funds and STP funds)--An estimate of costs by category of expenditure shall be attached to the Project Agreement. Allowable costs shall be determined in accordance with the Office of Management and Budget Circular A-87, ``Cost Principles for State, Local and Indian Tribal Governments.'' With respect to travel costs, the FHWA project funds may be used:
    1. To reimburse State travel costs for motor fuel tax examination and criminal investigation training;
    2. For participation at regional task force meetings and other task force activities, such as, joint audits and investigations;
    3. For participation in International Fuel Tax Agreement audit and enforcement committee activities;
    4. For participation at meetings of the work group for the automated fuel reporting system;
    5. For other cooperative State efforts to foster motor fuel tax compliance, such as, the meetings of the Uniformity Committee and the annual and regional Federation of Tax Administrators motor fuel conferences;
    6. For participation of lead State representatives at Steering Committee meetings; and
    7. For participation of representatives from other States at Steering Committee meetings when requested by the Steering Committee or to participate in other special activities arranged by the Steering Committee.
  8. Intergovernmental review (allocated funds and STP funds)--The State shall comply with the intergovernmental review requirements of 49 CFR part 17 according to the procedures established by the State.
  9. Environmental impacts (allocated funds and STP funds)--With respect to environmental impact and related procedures (23 CFR 771), projects are considered to be a categorical exclusion under 23 CFR 771.117(c)(1).
  10. Compliance with planning requirements-- Highway use tax evasion projects are deemed to be part of the long range plans discussed in 23 U.S.C. 134 and 135 with respect to enforcement of any highway user taxes the revenues from which are used to finance the implementation of projects in the plan. Projects should be included in the Transportation Improvement Program (TIP) as follows:
    1. Allocated funds--Since funds are allocated to State revenue agencies only for the purpose of fuel tax evasion project activities, projects are not required to be listed in the TIP discussed in 23 U.S.C. 134 and 135.
    2. STP funds--Highway use tax evasion projects carried out by State agencies shall be included in the transportation improvement program (TIP) described in 23 U.S.C. 135. Highway use tax evasion projects carried out by local government agencies within the boundaries of metropolitan areas shall be included in the metropolitan TIP described in 23 U.S.C. 134.
  11. Project approval (allocated funds and STP funds)--The State shall request FHWA approval for projects by submitting a letter to the FHWA Division Administrator in the State requesting funds for the project along with the following items:
    1. Evidence of completion of the intergovernmental review requirements;
    2. The cost estimate by expenditure category; and
    3. A signed original copy of the Project Agreement.
  12. Project modifications (allocated funds and STP funds)--The State shall request in writing the FHWA's approval of the following items as necessary:
    1. Revised budget whenever the estimate for a single cost category changes by more than 10 percent of the total agreement amount, i.e., $5,000 for a $50,000 project;
    2. Proposal for procurement of professional services, including identification of the contractor and estimated cost, when the estimated cost exceeds $10,000;
    3. Extension of project completion date and reasons for the extension; and
    4. Additional funding if required to complete the project.
  13. Progress reports (allocated funds and STP funds)--Annual narrative and expenditure reports are required to document progress. The report forms covering motor fuel tax examinations/audits, criminal investigations, and roadside fuel checks are optional.
  14. Audits (allocated funds and STP funds)--The State shall arrange for audits when required by 49 CFR part 90.
  15. Reimbursement--
    1. Allocated funds--State revenue agencies may continue to submit vouchers (PR-20) to the Division Administrator for payment.
    2. STP funds--The State transportation agency would submit vouchers for payment as part of the current billing process, and the State transportation agency would make interagency fund transfers to other State (or local) agencies carrying out project activities.

Effective Date

The procedures described in this notice are effective on the date of publication, and may be modified by a subsequent notice based on the comments received.

Request for Comments

The FHWA is requesting public comment from all interested parties concerning the funding allocation, the administrative procedures described in this notice, or on any suggestions to enhance motor fuel tax compliance under this program.

Comments should be submitted to the docket by the deadline indicated in the DATES caption. All comments received before the close of business on the comment closing date indicated above will be considered and will be available for examination in the docket room at the above address. Comments received after the comment closing date will be filed in the docket and will be considered to the extent practicable. In addition to late comments, the FHWA will also continue to file in the docket relevant information that becomes available after the comment closing date, and interested persons should continue to examine the docket for new material.

Authority: 23 U.S.C. 315; secs. 1101 and 1114, Pub. L. 105-178, 112 Stat. 107(1998); and 49 CFR 1.48)

Issued on: October 2, 1998.
Kenneth R. Wykle,
Federal Highway Administration, Administrator.

Memorandum of Understanding Between the U.S. Department of Transportation (DOT) and the Internal Revenue Service (IRS)

Purpose: The purpose of this Memorandum of Understanding (MOU) is to implement the provisions of 23 United States Code (U.S.C.)143, relating to highway use tax evasion projects, in particular the requirement for the development and maintenance for an excise fuel reporting system.

Background: On June 9, 1998, the President signed the Transportation Equity Act for the 21st Century (TEA-21), Public Law 105-178, authorizing highway, highway safety, transit, and other surface transportation programs for the next 6 years. TEA-21, as amended, builds on the initiatives established in the Intermodal Surface Transportation Efficiency Act of 1991, and combines the continuation and improvement of current programs with new initiatives to meet America's needs through efficient and flexible transportation. A key part of funding these highway improvements is the collection of Federal and State revenues used for this purpose.

Recognizing the need to ensure compliance for revenue collection, section 1114 of TEA-21, amended 23 U.S.C. 143 to require that the Secretary of Transportation (hereinafter referred to as the ``Secretary'') shall carry out highway use tax evasion projects in accordance with the provisions therein. Section 143 provides that the funds made available to carry out highway use tax evasion projects may be allocated to the IRS and the States, and that the Secretary shall not impose any condition on the use of funds allocated to the IRS under this subsection.

Title 23, U.S.C. Section 143, further limits the use of funds, provides for the establishment and operation of an automated fuel reporting system, provides for a funding priority, and a MOU between the Secretary and IRS for the purposes of the development and maintenance by the IRS of an excise fuel reporting system.

Wherefore, the DOT and the IRS agree that:

I. Automated Excise Fuel Reporting System (the System) a.k.a. Excise Fuel Information Reporting System (EXFIRS)

(A) The IRS shall develop and maintain the system through contracts.

(1) The IRS believes that a participative process with all stakeholders is the best method to use in the design and development of ExFIRS. By October 1, 1998, the IRS will form a workgroup with participants representing industry, States, the Federal Highway Administration (FHWA), and the IRS. The workgroup will be headed by the IRS Director, Excise Taxes, and will develop an implementation plan to provide for a basic automated excise fuel reporting system, and for enhancements that will best serve the stakeholders, including industry, the States, the FHWA, other government agencies, the IRS, etc.

(2) Workgroup members will determine the system needs and assist the IRS in assembling an implementation plan for use in contracting.

(3)The IRS will use the most expeditious method to obtain qualified contractors to complete the project.

(4)The implementation plan will be a living document. The plan will be monitored by the workgroup on an ongoing basis with revisions to the content, scope, timing, as needed.

(B)The system shall be under the control of the IRS.

(C)To allow for a transition of funding for the States, the IRS projects that the following funding can be made available to the States for motor fuel compliance projects:

FY99

$1,500,000

FY00 1,250,000
FY01 1,000,000
FY02 750,000
FY03 500,000
Total 5,000,000

(D) The system shall be made available for use by appropriate State and Federal revenue, tax, and law enforcement authorities, subject to section 6103 of the Internal Revenue Code of 1986.

II. Limitation on Use of Funds

Funds made available to carry out highway use tax evasion projects shall be used only:

(A) to expand efforts to enhance motor fuel tax enforcement;

(B) to fund additional IRS staff, but only to carry out functions described in this paragraph;

(C) to supplement motor fuel tax examinations and criminal investigations;

(D) to develop automated data processing tools to monitor motor fuel production and sales;

(E) to evaluate and implement registration and reporting requirements for motor fuel taxpayers;

(F) to reimburse State expenses that supplement existing fuel tax compliance efforts; and

(G) to analyze and implement programs to reduce tax evasion associated with other highway use taxes.

III. Funding Availability and Priority

(A) The Secretary shall, by Reimbursable Agreement, provide available funding to the IRS for the automated fuel reporting system and for highway use tax evasion projects as described in 23 U.S.C. 143.

(B) The Secretary shall make available sufficient funds for each of fiscal years 1998 through 2003 to the IRS to establish and operate an automated fuel reporting system as its first priority.

IV. Oversight

The FHWA Director, Office of Policy Development, and the IRS Director, Specialty Taxes, will review the development and implementation of highway use tax evasion project activity.

Dated: September 3, 1998
Kenneth R. Wykle,
Administrator, Federal Highway Administration.

Dated: September 10, 1998.
Charles O. Rossotti,
Commissioner, Internal Revenue Service.


Attachment 4 (This attachment also available in PDF format (38 KB). Download the Adobe Acrobat Reader if necessary.)

PROJECT AGREEMENT FOR THE JOINT
FEDERAL/STATE MOTOR FUEL TAX COMPLIANCE PROJECT

Between the Federal Highway Administration, hereinafter referred to as the FHWA, and the _______________________,

acting through its motor fuel tax enforcement agency as a [ ]  Lead/ [ ]  Participating State, hereinafter referred to as the

State.

Performance:______________________________________ through _________________________________

Project Agreement Amount:  ($ ______________________________________________________________________ )

______________________________________                             Federal Highway Administration

State Agency

________________________________________                                 ______________________________________
Address (Principal place of workfor this agreement)                            Address

________________________________________                                 ______________________________________
City, State, ZIP                                                                                City, State, ZIP

________________________________________                                 ______________________________________
Authorized Representative                                                                 Name

______________________________________                                     Division Administrator
Title

I hereby certify that the aggregate expenditure of funds of the State, exclusive of the Federal funds provided under this agreement, for motor fuel tax enforcement activities will be maintained at a level which does not fall below the average level of such expenditure for its last 2 fiscal years.

________________________________________                                 ______________________________________

Signature                                                  Date                                Signature                                                Date


Table of Contents

I. AUTHORITY AND PURPOSE

II. OBJECTIVE

III. STATEMENT OF WORK

IV. ALLOWABLE COST AND PAYMENT

V. SUBMISSION OF REPORTS

General Provisions                                                                                           

1 . DEFINITIONS

2. REGULATION REQUIREMENTS

3. AUDITS

4. MODIFICATIONS

5. SUBCONTRACTS FOR PROFESSIONAL SERVICES

6. STANDARDS FOR FINANCIAL MANAGEMENT SYSTEMS

7. RETENTION AND ACCESS REQUIREMENTS FOR RECORDS

8. EQUIPMENT

9. DEBARMENT CERTIFICATION

10. MINORITY BUSINESS ENTERPRISE REQUIREMENTS

11. SUSPENSION OR TERMINATION FOR CAUSE

12. TERMINATION REVIEW PROCEDURE

13. TERMINATION BY MUTUAL AGREEMENT

14. AGREEMENT CLOSEOUT AND COLLECTION OF AMOUNTS DUE

15. NONDISCRIMINATION

16. MANDATORY ENERGY EFFICIENCY STANDARDS

17. CERTIFICATION REGARDING A DRUG-FREE WORKPLACE      

18. LIMITATION ON THE USE OF FUNDS FOR LOBBYING

19. CLEAN AIR AND WATER REQUIREMENTS

Attachment 1 - Budget

ARTICLE I - AUTHORITY AND PURPOSE

Pursuant to section 143(a) of Title 23 of the U.S. Code and section 1101 (a)(14) of the Transportation Equity Act for the 21st Century (Pub. L. No. 105-178), the State and the FHWA enter into this grant agreement to enhance compliance with and collection of highway use taxes.

ARTICLE 11 - OBJECTIVE

The objective of this grant agreement is to increase the amount of revenue available for highway programs by using Highway Trust Fund tax receipts, administered by the FHWA, to expand highway use tax compliance efforts by the Internal Revenue Service (IRS) and the States, with emphasis on motor fuel taxes. This will be achieved by:

ARTICLE III - STATEMENT OF WORK

The State agrees to use funds made available under this agreement for the following activities:

1) expand efforts to enhance motor fuel tax enforcement,

2) supplement motor fuel tax examinations and criminal investigations,

3) develop automated data processing tools to monitor motor fuel production and sales,

4) evaluate and implement registration and reporting requirements for motor fuel taxpayers, and

5) analyze and implement programs to reduce tax evasion associated with other highway use taxes.

The work to be accomplished under this agreement shall be known as the Joint Federal/State Motor Fuel Tax Compliance Project.

The lead State will serve as the central contact point, within its region of the United States, for this project. The lead State will (1) provide central support staff for the formation of a regional task force; (2) coordinate the individual State and IRS activities; (3) coordinate and submit plans and reports prepared by the individual States; and (4) coordinate all activities which relate to the common concerns of participating States and the IRS.

The participating States will provide a liaison to participate on at least one of the regional task forces. The participating States will: (1) provide staff to participate in meetings and other task force activities; (2) coordinate motor fuel tax enforcement activities with other regional task force members; and (3) prepare and submit reports on the State's motor fuel tax enforcement activities.

ARTICLE IV - ALLOWABLE COST AND PAYMENT

The FHWA shall reimburse the State for allowable costs incurred in carrying out the work described in Article III, up to the project agreement amount shown on the signature page of this agreement. The State shall submit requests for reimbursement on Form PR-20, "Voucher for Work Performed under Provisions of the Federal-Aid and Federal Highway Acts, as amended." A progress voucher represents a claim for costs incurred in a specific period during the progress of the project. In preparing a progress voucher, all eligible costs shall be included, provided that a recorded liability exists or a cash disbursement has been made. A final voucher represents the final claim, submitted by the State for a single completed project accepted by the FHWA. The State shall promptly submit its final claim following termination of the period of performance. A summary of project costs, classified by expenditure type, shall accompany the final voucher.

Allowable costs shall be determined in accordance with the Office of Management and Budget (OMB) Circular A-87, "Cost Principles for State and Local Governments." All allowable items of cost as listed in Attachment B to Circular A-87, are eligible for reimbursement under this agreement. The budget of estimated costs by expenditure category is included as Attachment 1 to this agreement. Signature of this agreement by the FHWA shall constitute grantor agency approval for cost items included in the attached budget.

ARTICLE V - SUBMISSION OF REPORTS

An annual report shall be submitted no later than 60 days after the end of each Federal fiscal year ending on September 30. The annual report shall include a narrative report of accomplishments and an expenditure summary. The report may be supplemented at the option of the State with data summaries submitted on the reporting forms provided by the FHWA. The final performance and financial summary report (if this agreement is not continued) shall be submitted by the State no later than 60 days after the termination of the period of performance. The final report shall include a discussion of the accomplishments of the project, an expenditure summary by cost category, and a summary of any audit findings or plans to address the audit requirements of Article 3 of the General Provisions. One copy of all reports shall be provided to the regional task force and to the FHWA division office. The lead State shall provide copies of the reports to the project Steering Committee in care of the FHWA, Office of Transportation Policy Studies (HPTS), Washington, D.C. 20590.

GENERAL PROVISIONS

The following General Provisions apply to all FHWA grant agreements for the Joint Federal/State Motor Fuel Tax Compliance Project.

1. DEFINITIONS

  1. FHWA - The Federal Highway Administration.
  2. FHWA Division Office - The office of the FHWA located in each State, which is responsible for the administration of the Federal-Aid Highway Program within that State.
  3. IRS - The Internal Revenue Service.
  4. Memorandum of Understanding (MOU) - The document between the IRS and the States which will stand as the overall controlling document for States that wish to participate in the Joint Federal/State Motor Fuel Tax Compliance Project. By signing the MOU, States agree to work on this project and to join in the activities of the Regional Task Force.
  5. Steering Committee - The Committee established to coordinate activities of the Joint Federal/State Motor Fuel Tax Compliance Project. The Committee will oversee project activities, monitor results, and provide progress reports to Federal executive agencies and the Congress. The Committee consists of representatives of the FHWA, IRS, and the Lead States.
  6. Lead State - The State designated to coordinate the activities of the Joint Federal/State Motor Fuel Tax Compliance Project within its region of the United States.
  7. Participating State - A State which has signed an MOU, and thereby agrees to participate in the Joint Federal/State Motor Fuel Tax Compliance Project as a member of a regional task force.
  8. Regional Task Force - A multi-State task force consisting of representatives of the Lead State, participating States, and the IRS district offices, organized to share information and coordinate regional efforts to enhance motor fuel tax compliance.
  9. Equipment - Tangible non-expendable personal property having a useful life or more than one year and an acquisition cost of $5,000 or more per unit.
  10. OMB - Office of Management and Budget.
  11. DOT - The U.S. Department of Transportation.

2. REGULATION REQUIREMENTS

The State hereby assures and certifies that it will comply with the Federal statutes and regulations cited in this Agreement and 49 C.F.R. Part 18, Uniform Administrative Requirements for Grants and Cooperative Agreements, as they relate to the acceptance and use of Federal funds for this project. The project funded under this agreement is considered to be a categorical exclusion under 23 C.F.R. 771.117(c)(1).

3. AUDITS

 The State shall comply with the audit requirements of 49 C.F.R. Part 90.

4. MODIFICATIONS

This agreement may be amended at any time by a written modification properly executed by both the State and the FHWA. In accordance with 49 C.F.R. 18.30, the State shall request a budget modification whenever a new cost category is added or the anticipated expenditures for a single cost category are expected to change by an amount greater than 10 percent of the total amount of the agreement. The State must obtain the prior approval of the FHWA whenever any of the following actions is anticipated: (1) Revision of the scope or objectives of the project. (2) Extension of the period of performance. (3) Contracting out, or otherwise obtaining the services of a third party, to perform activities which are central to the purposes of the agreement.

5. SUBCONTRACTS FOR PROFESSIONAL SERVICES

  1. Prior written approval shall be obtained from the FHWA before any of the work or other substantive project effort is subcontracted or otherwise transferred.
  1. In accordance with 49 C.F.R. 18.36(a), when procuring professional services necessary for the implementation of this agreement, the State will follow the same policies and procedures it uses for procurements from its non-Federal funds. The State will ensure that every contract includes any clauses required by Federal statutes and executive orders and their implementing regulations.

6. STANDARDS FOR FINANCIAL MANAGEMENT SYSTEMS

In accordance with 49 C.F.R. 18.20, the State must expend and account for funds under this agreement in accordance with State laws and procedures for expending and accounting for its own funds. Fiscal control and accounting procedures of the State, as well as its cost-type contractors and subcontractors, must be sufficient to permit preparation of financial reports of project expenditures, as required by this agreement, and to permit the tracing of funds to a level of expenditures adequate to establish that such funds have not been used in violation of the prohibitions and restrictions of this agreement.

7. RETENTION AND ACCESS REQUIREMENTS FOR RECORDS

  1. In accordance with 49 C.F.R. 18.42(b), financial and programmatic records, supporting documents, statistical records, and other records pertinent to this agreement shall be maintained by the State for a period of 3 years from the date of submission of the annual (or final) expenditure report to the FHWA, with the following exceptions:

(1) If any litigation, claim, negotiation, audit, or other action involving the records has been started before the expiration of the 3-year period, the records must be retained until completion of the action and resolution of all issues which arise from it, or until the end of the regular 3-year period, whichever is later. (2) When the records are transferred to or maintained by the FHWA, the 3-year retention requirement is not applicable to the State with respect to those records.

8. EQUIPMENT

As provided in 49 C.F.R. 18.32, the State shall use, manage, and dispose of equipment acquired under this agreement in accordance with State laws and procedures.

9. DEPARMENT CERTIFICATION

  1. In accordance with 49 C.F.R. 29.510, the State certifies to the best of its knowledge and belief, that it and its principals:

(1) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any Federal department or agency; (2) Have not within a 3-year period preceding this agreement been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; (3) Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State, or local) with commission of any of the offenses enumerated in paragraph (2) of this certification; and (4) Have not within a 3-year period preceding this agreement had one or more public transactions (Federal, State, or local) terminate for cause or default.

10. MINORITY BUSINESS ENTERPRISE REQUIREMENTS

  1. In accordance with 49 C.F.R. 23.43, the State hereby agrees to abide by the following statements and agrees that these statements shall be included in all subsequent agreements between the State and any contractors or subcontractors under this agreement:

 (1) Policy. It is the policy of the DOT that minority and disadvantaged business enterprises (MBE's and DBE's) as defined in 49 C.F.R. Part 23 shall have the maximum opportunity to participate in the performance of contracts financed in whole or in part with Federal funds under this agreement. Consequently, the MBE and DBE requirements of 49 C.F.R. Part 23 apply to this agreement. (2) MBE/DBE Obligation. The State or its contractor agrees to ensure that minority and disadvantaged business enterprises as defined in 49 C.F.R. Part 23 have the maximum opportunity to participate in the performance o ' f contracts and subcontracts financed in whole or in part with Federal funds provided under this agreement. In this regard, the State or contractors shall take all necessary and reasonable steps in accordance with 49 C.F.R. Part 23 to ensure that minority and disadvantaged business enterprises have the maximum opportunity to compete for and perform contracts. The State and its contractors shall not discriminate on the basis of race, color, national origin, handicap, religion, age, or sex, as provided in Federal and State law, in the award and

11. SUSPENSION OR TERMINATION FOR CAUSE

  1. In accordance with 49 C.F.R. 18.43, when it has been determined by the FHWA that the State has materially failed to comply with the terms and conditions of this agreement, the FHWA may:

(1) Temporarily withhold cash payments pending correction of the deficiency by the State or more severe enforcement action by the FHWA, (2) Disallow all or part of the cost of the activity or action not in compliance, (3) Wholly or partly suspend or terminate the agreement for cause, (4) Withhold further awards for the program.

  1. In the event the deficiency is not corrected to the satisfaction of the FHWA, the FHWA may issue a notice of termination, in the same manner as described in paragraph d. above. The notice of termination will establish the reasons for the action and its effective date.
  1. If this agreement is suspended or terminated pursuant to this clause, costs resulting from obligations incurred by the State during the period of suspension or after termination will not be allowable unless the FHWA expressly authorizes them in the notice of suspension or termination or by subsequent correspondence. Other State costs during suspension or after termination which are necessary and not reasonably avoidable are allowable if:

(1) The costs result from obligations which were properly incurred by the State before the effective date of suspension or termination, are not in anticipation of it, and, in the case of termination, are noncancelable, and; (2) The costs would be allowable if the agreement were not suspended or terminated.

12. TERMINATION REVIEW PROCEDURE

  1. Any request for review of a notice of termination shall be addressed to the FHWA Division Office. It must be postmarked no later than 30 days after the receipt of such notice.
  1. The request for review must contain a full statement of the State's position and the pertinent facts and reasons in support of such position.
  1. The FHWA will acknowledge receipt of the request for review and appoint a review committee consisting of a minimum of three persons, none of whom may be either from the FHWA program office providing funding for the project or from the FHWA office that is responsible for monitoring the administrative aspects of the agreement.
  1. The termination review committee will request the FWHA official who issued the notice of termination to provide copies of all pertinent background materials and documents. It may, at its discretion, invite representatives of the State, FHWA program, and/or administrative office, to discuss pertinent issues and to submit additional information as it deems necessary. The chairperson of the review committee will ensure that all review activities or proceedings are documented.
  1. Based on its review, the committee will prepare its recommendations to the FHWA official who issued the notice of termination who will advise the parties concerned of the final administrative decision.

13. TERMINATION BY MUTUAL AGREEMENT

  1. Circumstances may arise in which either the FHWA or the State wishes to terminate this agreement in whole or in part. If both parties agree that continuation of the project would not produce results commensurate with further expenditure of funds or for any other reason, the agreement may be terminated by mutual consent in accordance with 49 C.F.R. 18.44.

  2. If either party wishes to terminate this agreement, written notification shall be given to the other party, setting forth the reasons for such termination.

  3. Within 30 days after receipt of a request from either party for termination by mutual agreement, the other party will provide an appropriate written response. The two parties shall agree upon the termination conditions, including the effective date, and, in the case of partial termination, the portion to be terminated. The State shall not incur new obligations for the terminated portion after the effective date and shall cancel as many outstanding obligations as possible. Allowable costs shall include the noncancelable obligations properly incurred by the State prior to termination. In the event of disagreement between the parties, the FHWA will make a final determination subject to the review procedures described in Article 12 entitled "Termination Review Procedure."

 14. AGREEMENT CLOSEOUT AND COLLECTION OF AMOUNTS DUE

  1. In accordance with 49 C.F.R. 18.50, the FHWA will close out this agreement when it determines that all administrative actions and all required work of this agreement have been completed.
  1. As provided in 49 C.F.R. 18.51, the closeout of this agreement does not affect: (1) The FHWA's right to disallow costs and recover funds on the basis of a later audit or other review; (2) The State's obligation to return any funds due as a result of later refunds, corrections, or other transactions; (3) Records retention as required by Article 7 above; (4) Audit requirements of Article 3 above.
  1. In accordance with 49 C.F.R. 18.52, any funds paid to the State in excess of the amount to which it is finally determined to be entitled under the terms of this agreement shall constitute a debt to the Federal Government and shall be paid within a reasonable period of time to the FHWA.

15. NONDISCRIMINATION

The State hereby agrees that, as a condition of receiving any Federal financial assistance from the DOT, it will comply with Title VI of the Civil Rights Act of 1964 (78 Stat. 252, 42 U.S.C. 2000d), related nondiscrimination statutes (i.e., 23 U.S.C. 324, Section 504 of the Rehabilitation Act of 1973 as amended, and the Age Discrimination Act of 1975), and applicable regulatory requirements to the end that no person in the United States shall, on the grounds of race, color, national origin, sex, handicap, or age be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under any program or activity for which the State receives Federal financial assistance. The specific requirements of the DOT Standard Civil Rights assurances (required by 49 C.F.R. 21.7 and 27.9) are incorporated in this agreement.

16. MANDATORY ENERGY EFFICIENCY STANDARDS

The State and its contractors under this agreement shall comply with mandatory standards and policies relating to energy efficiency which are contained in the State energy conservation plan issued in compliance with the Energy Policy and Conservation Act (P.L. 94-163).

17. CERTIFICATION REGARDING A DRUG-FREE WORKPLACE

  1. Definitions. As used in this certification, "Controlled substance" means a controlled substance in Schedules I through V of the Controlled Substances Act (21 U.S.C. 812) and as further defined in regulation at 21 C.F.R. 1308.11-1308.15; "Conviction" means a finding of guilt (including a plea of nolo contendere) or imposition of sentence, or both, by any judicial body charged with the responsibility to determine violations of the Federal or State criminal drug statutes; "Criminal drug statute" means a Federal or non-Federal criminal statute involving the manufacture, distribution, dispensing, use, or possession of any controlled substance; "Employee" means the employee of the State directly engaged in the performance of work under this agreement, including: (1) all "direct charge" employees; (2) all "indirect charge" employees unless their impact or involvement is insignificant to the performance of the grant; and (3) temporary personnel and consultants who are directly engaged in the performance of work under this agreement and who are on the State's payroll. This definition does not include workers not on the payroll of the State (e.g., volunteers, even if used to meet a matching requirement; consultants or independent contractors not on the State's payroll; or employees of subrecipients or subcontractors in covered workplaces).

  2. If the State has not certified by an annual certification as provided in 49 C.F.R. 29.6309(c) with respect to the State employees engaged in the performance of work under this agreement, then the State hereby certifies that it will or will continue to provide a drug-free workplace by:

     (1) Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance is prohibited in the State's workplace and specifying the actions that will be taken again employees for violation of such prohibition; (2) Establishing an ongoing drug-free awareness program to inform employees about--

     (1) The dangers of drug abuse in the workplace; (ii) The State's policy of maintaining a drug-free workplace; (iii) The available drug counseling, rehabilitation, and employee assistance programs; and (iv) The penalties that may be imposed upon employees for drug abuse violation occurring in the workplace. (3) Making it a requirement that each employee to be engaged in the performance of this agreement be given a copy of the statement required by paragraph (1); (4) Notifying the employee in the statement required by paragraph (1), that, as a condition of employment under this agreement, the employee will-- (1) Abide by the term of the statement; and (ii) Notify the employer in writing of his or her conviction for a violation of a criminal drug statute in the workplace no later than five calendar days after such conviction;

     (5) Notifying the FHWA in writing, within ten calendar days after receiving notice under subparagraph (4) (ii) from an employee or otherwise receiving actual notice of such conviction. Employers of convicted employees must provide notice, including position title, to every grant officer or other designee on whose grant activity the convicted employee was working, unless the Federal agency has designated a central point for the receipt of such notices. Notice shall include the identification number(s) of each affected grant;

     (6) Taking one of the following actions, within 30 calendar days of receiving notice under subparagraph (4) (ii), with respect to any employee who is so convicted-­ (1) Taking appropriate personnel action against such an employee, up to and including termination; consistent with the requirements of the Rehabilitation Act of 1973, as amended; or (ii) Requiring such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency;

    (7) Making a good faith effort to continue to maintain a drug-free workplace through implementation of paragraphs (1) through (6).

  3. The principal place of performance of work in connection with this agreement is the address shown on the signature page. The list identifying any other workplaces involved in the performance of work under this agreement shall be kept on file with the State and be made available for Federal inspection upon request.

18. LIMITATION ON THE USE OF FUNDS FOR LOBBYING (AGREEMENTS OVER $100,000)

  1. The person signing this agreement on behalf of the State certifies to the best of his or her knowledge and belief that: No Federal appropriated funds have been paid or will be paid, by or on behalf of the State, to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. (2) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any Federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the State shall complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions. (3) The State shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subgrants, and contracts and subcontracts under grants, subgrants, loans, and cooperative agreements) which exceed $100,000, and that all such subrecipients shall certify and disclose accordingly.

  2. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S.C. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.

19. CLEAN AIR AND WATER REQUIREMENTS (AGREEMENTS OVER $100,000)

  1. The State agrees to comply with all applicable standards, orders, or requirements issued under Section 306 of the Clean Air Act (42 U.S.C. 7606), Section 508 of the Clean Water Act (33 U.S.C. 1368), Executive Order 11738, and the Environmental Protection Agency regulations (40 C.F.R. Part 15).

  2. The State stipulates that any facility to be utilized in performance under or to benefit from agreement is not listed on the Environmental Protection Agency List of Violating Facilities issued pursuant to the requirements of the Clear Air Act, as amended, and the Federal Water Pollution Control Act, as amended. c. The State agrees that it will include this provision in any contract for professional services under this agreement which exceeds $100,000.

Attachment 5 (This attachment also available in PDF format (9 KB). Download the Adobe Acrobat Reader if necessary.)

Project Number: TCP (                   )

AMENDED PROJECT AGREEMENT FOR THE JOINT
FEDERAL/STATE MOTOR FUEL TAX COMPLIANCE PROJECT

Between the Federal Highway Administration, hereinafter referred to as the FHWA, and the                                                        ,

acting through its motor fuel tax enforcement agency as a [   ]Lead/[   ] Participating State, hereinafter referred to as the

State.

Prior Agreement Amount:                                                                                 dollars ($ _________________________)

Additional Federal Funds:                                                                    dollars ($ _________________________)

Total Agreement Amount:                                                                                 dollars ($ _________________________)

Period of Performance is extended through: _________________________________________________________________

________________________________________                                Federal Highway Administration
State Agency

____________________________________________                           ____________________________________________
Address (Principal place of work for this agreement)                            Address

____________________________________________                           _____________________________________________
City, State, ZIP                                                                                City, State, ZIP

___________________________________________                            ______________________________________________
Authorized Representative                                                                Name

________________________________________                                Division Administrator
Title

I hereby certify that the aggregate expenditure of funds of the State, exclusive of the Federal funds provided under this agreement, for motor fuel tax enforcement activities will be maintained at a level which does not fall below the average level of such expenditure for its last 2 fiscal years.

_________________________________________                                _________________________________________
Signature                   Date                               Signature                                                    Date

All of the provisions of the original Project Agreement in Sections 1. through V. and the General Provisions numbered 1. through 19. remain in effect.

Attachment I -- Budget Revised November 25, 1998

FHWA-1549 (11-98)

List of Provisions from the original Grant Agreement:

I. AUTHORITY AND PURPOSE

II. OBJECTIVE

III. STATEMENT OF WORK

IV. ALLOWABLE COST AND PAYMENT

V. SUBMISSION OF REPORT

General Provisions

1. DEFINITIONS

2. REGULATION REQUIREMENTS

3. AUDITS

4. MODIFICATIONS

5. SUBCONTRACTS FOR PROFESSIONAL SERVICES

6. STANDARDS FOR FINANCIAL REQUIREMENTS

7. RETENTION AND ACCESS REQUIREMENTS FOR RECORDS

8. EQUIPMENT

9. DEBARMENT CERTIFICATION

10. MINORITY BUSINESS ENTERPRISE REQUIREMENTS

11. SUSPENSION OR TERMINATION FOR CAUSE

12. TERMINATION REVIEW PROCEDURE

13. TERMINATION BY MUTUAL AGREEMENT

14. AGREEMENT CLOSE OUT AND COLLECTION OF AMOUNTS DUE

15. NONDISCRIMINATION

16. MANDATORY ENERGY EFFICIENCY STANDARDS

17. CERTIFICATION REGARDING A DRUG-FREE WORKPLACE

18. LIMITATION ON THE USE OF FUNDS FOR LOBBYING

19. CLEAN AIR AND WATER REQUIREMENTS

Federal Highway Administration | 1200 New Jersey Avenue, SE | Washington, DC 20590 | 202-366-4000