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Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Rules and Regulations indirect cost rate to charge a de minimis rate of ten percent, in order to ensure that the two provisions do not conflict.33 Additionally, the American University, Beirut, and the World Health Organization are exempted specifically from the indirect-cost-rate limitation because they are eligible for negotiated facilities and administration F&A cost reimbursement. This restriction on indirect costs, as indicated by 45 CFR 75.101, would flow down to subawards and subrecipients.
The Department received no comments on this provision.
In repromulgating the provision, the Department makes several minor technical corrections to the language, replacing training grants with Federal awards for training in paragraph c1i; replacing grants awarded with Federal awards and deleting an and in subparagraph c1ii; and adding in this section after paragraphs c1i and ii in paragraph f.

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Section 75.477, Allowability of Costs Pursuant to Affordable Care Act Provisions The Department proposed to repromulgate only part of current 75.477, providing for the exclusion, from allowable costs, of any payments imposed on employers for failure to offer employees and their dependents the opportunity to enroll in minimum essential coverage. It did not propose to repromulgate the exclusion, from allowable costs, of any penalties imposed on individuals for failure to maintain minimum essential coverage because Congress reduced to zero the penalties imposed on individuals as a result of their failure to maintain such coverage, effective after December 31, 2018. The Department has since learned that payments of the tax penalties assessed for failure to comply with the individual shared responsibility prior to 2019 may continue, whether as the result of later filing, IRS administrative or appeals processes, or litigation in the Tax Court, the Court of Federal Claims, or the District Courts. As a result, the Department repromulgates 75.477, with changes. As proposed, the Department repromulgates, without change from the proposed rule, the provision addressing tax penalties for failure to comply with the employer shared responsibility provisions. That provision makes clear that employers may not claim as allowable costs any 33 OMB has proposed to change this in its current rulemaking on 2 CFR part 200. Should OMB
finalize the rule as proposed, the Department would implement as appropriate.

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payments imposed under 26 U.S.C.
4980H for failure to offer employees and their dependents the opportunity to enroll in minimum essential coverage. However, because of the possibility that individuals may still be responsible for payments of the tax penalties assessed for failure to comply with the individual shared responsibility prior to 2019, the Department repromulgates the provision excluding such payments from allowable costs, but only with respect to payments incurred as a result of the failure to maintain minimum essential coverage prior to January 1, 2019, the date on which the individual tax penalty was reduced to zero.
As with the 2016 promulgation of this provision, the Department received no comments on this section.
V. Regulatory Impact Analysis The Department has examined the impacts of this final rule as required by Executive Order 12866 on Regulatory Planning and Review, 58 FR 51735 Oct.
4, 1993; Executive Order 13563 on Improving Regulation and Regulatory Review, 76 FR 3821 Jan. 21, 2011;
Executive Order 13771 on Reducing Regulation and Controlling Costs, 82 FR
9339 Jan. 30, 2017; the Regulatory Flexibility Act Pub. L. 96354, 94 Stat.
1164 Sept. 19, 1980 and Executive Order 13272 on Proper Consideration of Small Entities in Agency Rulemaking, 67 FR 53461 Aug. 16, 2002; section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 1044, 109 Stat.
48 Mar. 22, 1995; Executive Order 13132 on Federalism, 64 FR 43255 Aug.
4, 1999; Executive Order 13175 on Tribal Consultation, 65 FR 67249 Nov.
6, 2000; the Congressional Review Act Pub. L. 104121, sec. 251, 110 Stat. 847
Mar. 29, 1996; section 654 of the Treasury and General Government Appropriations Act of 1999; and the Paperwork Reduction Act of 1995, 44
U.S.C. 3501, et seq.
Executive Order 12866 and Related Executive Orders on Regulatory Review Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits including potential economic, environmental, public health and safety effects; distributive impacts;
and equity. Executive Order 13563 is supplemental to Executive Order 12866
and reaffirms the principles, structures, and definitions governing regulatory review established there.
As explained in the proposed rule and in this final rule, the Office of
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Management and Budget OMB has determined this rule is not economically significant in that it will not have an annual effect on the economy of greater than $100 million dollars in one year.
However, because the Department determined that this rule is a significant regulatory action under Executive Order 12866, 3f4, in as much as it raises novel legal or policy issues that arise out of legal mandates, the Presidents priorities, or the principles set forth in an Executive Order, the Office of Management and Budget has reviewed it. Under Executive Order 13563, this rule harmonizes and streamlines rules, and promotes flexibility by removing unnecessary burdens.
Summary of and Need for Final Rule As the Department noted in the proposed rule, after promulgation of the 2016 Rule, non-Federal entities, including States and other grant recipients and subrecipients raised concerns about 75.300c and d, contending that the requiring compliance with certain of the nonstatutory requirements would violate RFRA or the U.S. Constitution, exceed the Departments statutory authority, or reduce the effectiveness of the Departments programs. As a result of the Departments consideration of these issues, it believes that this final rule is needed for a number of reasons, including:
To restore the Congressionally established balance with respect to nondiscrimination requirements.
Congress carefully balanced the rights, obligations, and goals involved in various Federal grant programs when it decided which nondiscrimination provisions to make applicable to such programs. The 2016 Rule made a number of nondiscrimination requirements, including certain nonstatutory nondiscrimination requirements, applicable to all grantees in all Departmental grant programs, regardless of whether Congress had made such requirements applicable to the grantees in particular Departmental programs. Because Congress carefully balanced competing interests, rights, and obligation, the Department believes that it is appropriate to impose only those nondiscrimination requirements required by the Constitution and the federal statutes that are applicable to the grantees.
To avoid RFRA issues. The imposition of certain nonstatutory nondiscrimination requirements on certain faith-based organizations as recipients or subrecipients in the Departments programs would likely
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