§ 140.807 Reimbursable costs.

(a) Federal funds may be used to reimburse an SHA for the following types of project-related third party contract audit costs:

(1) Salaries and wages paid to an SHA's personnel,

(2) Fringe benefits directly applicable to such reimbursable salaries and wages, and

(3) Travel and transportation expenses.

(b) Audit charges by licensed or certified public accounting firms are reimbursable provided that the audit contract has been approved by the Federal Highway Administration (FHWA) Division Administrator.

(c) Expenses incurred under interagency audit service arrangements with other Federal agencies are reimbursable.

Subpart I-Reimbursement for Railroad Work

AUTHORITY: 23 U.S.C. 315; 49 CFR 1.48. SOURCE: 40 FR 16057, Apr. 9, 1975, unless otherwise noted.

§ 140.900 Purpose.

The purpose of this subpart is to prescribe policies and procedures on reimbursement to the States for railroad work done on projects undertaken pursuant to the provisions of 23 CFR, Part 646, Subpart B.

§ 140.902 Applicability.

This subpart, and all references hereinafter made to "projects," applies to Federal-aid projects involving railroad facilities, including projects for the elimination of hazards of railroad-highway crossings, and other projects which use railroad properties or which involve adjustments required by highway construction to either railroad facilities or facilities that are jointly owned or used by railroad and utility companies.

§ 140.904 Reimbursement basis.

(a) General. On projects involving the elimination of hazards of railroadhighway crossings, and on other projects where a railroad company is not obligated to move or to change its

facilities at its own expense, reimbursement will be made for the costs incurred in making changes to railroad facilities, required in connection with a Federal-aid highway project, as hereinafter provided.

(b) Eligibility. To be eligible, the costs must be:

(1) For work which is included in an approved program,

(2) Incurred subsequent to the date of authorization by the Federal Highway Administration (FHWA),

(3) Incurred in accordance with the provisions of 23 CFR, Part 646, Subpart B, and

(4) Properly attributable to the project.

§ 140.906 Labor costs.

(a) General. (1) Salaries and wages, at actual or average rates, and related expenses paid by a company to individuals, for the time they are working on the project, are reimbursable when supported by adequate records. This shall include labor costs associated with preliminary engineering, construction engineering, right-of-way, and force account construction.

(2) Salaries and expenses paid to individuals who are normally part of the overhead organization of the company may be reimbursed for the time they are working directly on the project, such as for accounting and bill preparation, when supported by adequate records and when the work performed by such individuals is essential to the project and could not have been accomplished as economically by employees outside the overhead organization.

(3) Amounts paid to engineers, architects and others for services directly related to projects may be reimbursed.

(b) Labor surcharges. (1) Labor surcharges include workmen's compensation insurance, public liability and property damage insurance, and such fringe benefits as the company has established for the benefit of its employees. The cost of labor surcharges will be reimbursed either at actual cost to the company or at the rates established by agreement between FHWA and the Association of American Rail

roads (AAR). (See Appendix A for rates.)

(2) Where the company is a self insurer there may be reimbursement either at rates shown in Appendix A, or at experience rates properly developed from actual costs, not to exceed the rates of a regular insurance company for the class of employment covered.

§ 140.908 Materials and supplies.

(a) Procurement. Materials and supplies, if available, are to be furnished from company stock, except they may be obtained from other sources near the project site when available at less cost. Where not available from company stock, they may be purchased either under competitive bids or existing continuing contracts, under which the lowest available prices are developed. Minor quantities and proprietary products are excluded from these requirements. The

company

shall not be required to change its existing standards for materials used in permanent changes to its facilities.

(b) Costs. (1) Materials and supplies furnished from company stock shall be billed at current stock price of such new or used material at time of issue.

(2) Materials and supplies not furnished from company stock shall be billed at actual costs to the company delivered to the point of entry on the railroad company's line nearest the source of procurement.

(3) A reasonable cost of plant inspection and testing may be included in the costs of materials and supplies where such expense has been incurred. The computation of actual costs of materials and supplies shall include the deduction of all offered discounts, rebates and allowances.

(c) Materials recovered. (1) Materials recovered from temporary use and accepted for reuse by the company shall be credited to the project at prices charged to the job, less a consideration for loss in service life at 10 percent for rails, angle bars, tie plates and metal turnout materials and 15 percent for all other materials. Materials recovered from the permanent facility of the company that are accepted by the company for return to stock shall be

credited to the project at current stock prices of such used material.

(2) Materials recovered and not accepted for reuse by the company, if determined to have a net sale value, shall be sold by the State or railroad following an opportunity for State inspection and appropriate solicitation for bids, to the highest bidder; or if the company practices a system of periodic disposal by sale, credit to the project shall be at the going prices supported by the records of the company. Where applicable, credit for materials recovered from the permanent facility in length or quantities in excess of that being placed should be reduced to reflect any increased cost of railroad operation resulting from the adjustment.

(d) Removal costs. Federal participation in the costs of removing, salvaging, transporting, and handling recovered materials will be limited to the value of materials recovered, except where FHWA approves additional measures for restoration of affected areas as required by the physical construction or by reason of safety or aesthetics.

(e) Handling costs. The actual and direct costs of handling and loading out of materials and supplies at and from company stores or material yards and of unloading and handling of recovered materials accepted by the company at its stores or material yards, are reimbursable. At the option of the company, 5 percent of the amounts billed for the materials and supplies which are issued from company stores and material yards will be reimbursable in lieu of actual costs.

(f) Credit losses. On projects where a company actually suffers loss by application of credits, the company shall have the opportunity of submitting a detailed statement of such loss as a basis for further adjustment.

§ 140.910 Equipment.

(a) Company owned equipment. Cost of company owned equipment may be reimbursed for the average or actual cost of operation, light and running repairs, and depreciation. At the option of the company, reimbursement for equipment cost may be made

at the rates and under the conditions set forth in circulars issued by the General Managers Associations of Chicago and New York. Reimbursement for company owned vehicles may be made at average or actual costs or at rates of recorded use per mile established by agreement between FHWA and AAR. (See Appendix A.)

(b) Other equipment. Where company owned equipment is not available, reimbursement will be limited to the amount of rental paid (1) to the lowest qualified bidder, (2) under existing continuing contracts at reasonable cost, or (3) as an exception, by negotiation where (1) and (2) are impractical due to project location or schedule.

§ 140.912 Transportation.

(a) Employees. The company's cost of necessary employee transportation and subsistence directly attributable to the project, which is consistent with overall policy of the company, is reimbursable.

(b) Materials, supplies and equipment. The most economical movement of materials, supplies and equipment to the project and necessary return to storage, including the associated costs of loading and unloading equipment, is reimbursable. Transportation by a railroad company over its own lines in a revenue train is reimbursable at rates which do not exceed ten mills a ton-mile or the published tariff rate, whichever is the lesser. No charge will be made for transportation by work train other than the operating expenses of the work train. When it is more practicable or more economical to move equipment on its own wheels, reimbursement may be made at a rate of twenty cents a car-mile haul for heavy construction equipment such as pile drivers or locomotive cranes; and six cents a car-mile haul for other equipment.

§ 140.914 Credits for improvements.

(a) Credit shall be made to the project for additions or improvements which provide for higher quality or increased service capability of the operating facility and which are provided solely for the benefit of the company. (b) Where buildings and other depreciable structures of a company

which are integral to operation of rail traffic must be replaced, credit shall be made to the project as set forth in 23 CFR 646.216(c)(2).

(c) No credit is required for additions or improvements which are:

(1) Necessitated by the requirements of the highway project.

(2) Replacements which, although not identical, are of equivalent standard.

(3) Replacements of devices or materials no longer regularly manufactured and the next highest grade or size is used.

(4) Required by governmental and appropriate regulatory commission requirements.

The cost of essential protective services which, in the opinion of a railroad company, are required to ensure safety to railroad operations during certain periods of the construction of a project, is reimbursable provided an item for such services is incorporated in the State-railroad agreement or in a work order issued by the State and approved by FHWA.

§ 140.918 Maintenance and extended construction.

The cost of maintenance and extended construction is reimbursable to the extent provided for in 23 CFR 646.216(f)(4), and where included in the State-Railroad Agreement or otherwise approved by the State and FHWA.

§ 140.920 Lump sum payments.

Where approved by FHWA, pursuant to 23 CFR 646.216(d)(3), reimbursement may be made as a lump sum payment, in lieu of actual costs. § 140.922 Billings.

(a) After the executed State-Railroad Agreement has been approved by FHWA, the company may be reimbursed on progress billings of incurred costs. Costs for materials stockpiled at the project site or specifically purchased and delivered to the company for use on the project may be reimbursed on progress billings following approval of the executed State-Rail

road Agreement or the written agreement under 23 CFR 646.218(c).

(b) The company shall provide one final and complete billing of all incurred costs, or of the agreed-to lump sum, at the earliest practicable date. The final billing to FHWA shall include a State certification that the work is complete, acceptable and in accordance with the terms of the agreement.

(c) All company cost records and accounts relating to the project are subject to audit by representatives of the State and/or the Federal Government for a period of three years from the date final payment has been received by the company.

(d) A railroad company must advise the State promptly of any outstanding obligation of the State's contractor for services furnished by the company such as protective services.

[40 FR 16057, Apr. 9, 1975, as amended at 40 FR 29712, July 15, 1975]

APPENDIX A-RATES FOR LABOR SURCHARGES

I. Labor surcharges established by agreement between Federal Highway Administration and Association of American Railroads.

Calendar year

The cost of vacation pay or allowances earned by all classes of railroad employees is reimbursable at the rate of 7.25 percent, applied to total salaries and wages paid and claimed. The cost of paid holidays of railroad employees is reimbursable at the rate of 3.50 percent, applied only to total salaries and wages paid and claimed for the non-operating group of railroad employees.

The cost of Workmen's Compensation Self-Insurance is reimbursable at the rate of 3 percent, applied to total salaries and wages paid and claimed, inclusive of vacation pay and allowance. The cost of Public Liability and Property Damages Self-Insurance is reimbursable at the rate of 1 percent, applied to total salaries and wages paid and claimed inclusive of vacation pay and allowances.

The cost of payroll taxes paid by a railroad for regular retirement benefits (including Medicare) and unemployment insurance is reimbursable at the full legal rate on compensation of employees up to stated monthly limits, including cost of vacation pay or allowances and holiday pay. As an alternative, at the election of the railroad, a rate of 4 percent less than the full legal rate may be applied to total salaries and wages paid and claimed, including cost of vacation pay or allowances and holiday pay.

Following are the rates and limitations determined under applicable legislation, together with the alternate lesser rates:

§ 160.101 Purpose.

The purpose of this subpart is to prescribe the procedures for transfer of fiscal year 1976 and prior fiscal year funds under subsections 104 (c) and (d) of Title 23, United States Code, as amended by section 111 of the Federal-Aid Highway Act of 1973 and subsection 113(b) of the Federal-Aid Highway Act of 1976.

§ 160.103 Requirements and conditions.

(a) Total transfers between apportionments may not increase or decrease the original apportionment by more than 40 per centum.

(b) Funds transferred to any apportionment are to be expended under the provisions of law governing the expenditure of the apportionment to which the transfer is made.

(c) Funds obligated are not eligible for transfer.

(d) Transfers are to be approved by the Governor of the State as being in the public interest and submitted by the State highway department to the Division Administrator. Requests for transfer of funds apportioned in accordance with 23 U.S.C. 104(b)(6) and allocated to any urbanized area of 200,000 population or more under 23 U.S.C. 150 shall also be approved by the local officials of such urbanized area. "Local officials of such urbanized area" means the principal elected officials of general purpose local governments acting through the metropolitan planning organization (MPO) designated by the Governor in accordance with 23 CFR 450, Subpart A.

[41 FR 54169, Dec. 13, 1976, as amended at 42 FR 41279, Aug. 16, 1977; 46 FR 21156, Apr. 9, 1981]