[Title 7 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2000 Edition]
[From the U.S. Government Printing Office]




F8091
ï¿½1ï¿½I017 
I03Part 2000 to end 
I34Revised as of January 1, 2000 
I02Agriculture 
I09I10Containing a Codification of documents of general applicability and future effect
I11As of January 1, 2000
I11T3With Ancillaries

I20Published by: 
I20Office of the Federal Register 
I20National Archives and Records 
I20Administration
I21A Special Edition of the Federal Register

F80927I97?
ï¿½?iiï¿½I25Q99Q99Q99Q84I25U.S. GOVERNMENT PRINTING OFFICE 
I25WASHINGTON : 2000 
I96
I26For sale by U.S. Government Printing Office
I26Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402ï¿½099328

F80928
ï¿½iiiï¿½I01Table of Contents 
I05T3Page 


I40Explanation 
I41vi

Q10I42Title 7: 

I44Subtitle B_Regulations of the Department of Agriculture (Continued): 

I45Chapter XVIII_Rural Housing Service, Rural Business-Cooperative Service, Rural Utilities Service, and Farm Service Agency, Department of Agriculture (Continued)
I415 
I45Chapter XXVI_Office of Inspector General, Department of Agriculture
I4123
I45Chapter XXVII_Office of Information Resources Management, Department of Agriculture
I4131
I45Chapter XXVIII_Office of Operations, Department of Agriculture
I4137
I45Chapter XXIX_Office of Energy, Department of Agriculture
I4145

I45Chapter XXX_Office of the Chief Financial Officer, Department of Agriculture
I4153

I45Chapter XXXI_Office of Environmental Quality, Department of Agriculture
I41217

I45Chapter XXXII_Office of Procurement and Property Management, Department of Agriculture
I41225

I45Chapter XXXIII_Office of Transportation, Department of Agriculture
I41231
I45Chapter XXXIV_Cooperative State Research, Education, and Extension Service, Department of Agriculture
I41245
I45Chapter XXXV_Rural Housing Service, Department of Agriculture
I41363
ï¿½ivï¿½I45Chapter XXXVI_National Agricultural Statistics Service, Department of Agriculture
I41463
I45Chapter XXXVII_Economic Research Service, Department of Agriculture
I41469
I45Chapter XXXVIII_World Agricultural Outlook Board, Department of Agriculture
I41475
I45xlChapter XLI_[Reserved]
I45Chapter XLII_Rural Business-Cooperative Service and Rural Utilities Service, Department of Agriculture
I41481

I42Finding Aids: 
I43Table of CFR Titles and Chapters
I41561
I43Alphabetical List of Agencies Appearing in the CFR
I41579
I43List of CFR Sections Affected
I41589

F80927
ï¿½vï¿½I11Q99Q17I55I56Cite this Code:T1CFRG1T3
I56To cite the regulations in this volume use title, part and section number. Thus, T1 7 CFR 2003.1G1T3 refers to title 7, part 2003, section 1.I55



F80087
ï¿½viï¿½I06G4T1Explanation
S8092I11The Code of Federal Regulations is a codification of the general and permanent rules published in the Federal Register by the Executive departments and agencies of the Federal Government. The Code is divided into 50 titles which represent broad areas subject to Federal regulation. Each title is divided into chapters which usually bear the name of the issuing agency. Each chapter is further subdivided into parts covering specific regulatory areas. 
I11Each volume of the Code is revised at least once each calendar year and issued on a quarterly basis approximately as follows: 
Q02
I37Title 1 through Title 16 Las of January 1 
I37Title 17 through Title 27 Las of April 1 
I37Title 28 through Title 41 Las of July 1 
I37Title 42 through Title 50 Las of October 1 
Q02I11The appropriate revision date is printed on the cover of each volume. 

Q02I10LEGAL STATUS 
Q02I11The contents of the Federal Register are required to be judicially noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie evidence of the text of the original documents (44 U.S.C. 1510). 

Q02I10HOW TO USE THE CODE OF FEDERAL REGULATIONS 
Q02I11The Code of Federal Regulations is kept up to date by the individual issues of the Federal Register. These two publications must be used together to determine the latest version of any given rule. 
I11To determine whether a Code volume has been amended since its revision date (in this case, January 1, 2000), consult the ``List of CFR Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative List of Parts Affected,'' which appears in the Reader Aids section of the daily Federal Register. These two lists will identify the Federal Register page number of the latest amendment of any given rule. 

Q02I10EFFECTIVE AND EXPIRATION DATES 
Q02I11Each volume of the Code contains amendments published in the Federal Register since the last revision of that volume of the Code. Source citations for the regulations are referred to by volume number and page number of the Federal Register and date of publication. Publication dates and effective dates are usually not the same and care must be exercised by the user in determining the actual effective date. In instances where the effective date is beyond the cut-off date for the Code a note has been inserted to reflect the future effective date. In those instances where a regulation published in the Federal Register states a date certain for expiration, an appropriate note will be inserted following the text.

Q02I10OMB CONTROL NUMBERS
Q02I11The Paperwork Reduction Act of 1980 (Pub. L. 96ï¿½09511) requires Federal agencies to display an OMB control number with their information collection request. ï¿½viiï¿½Many agencies have begun publishing numerous OMB control numbers as amendments to existing regulations in the CFR. These OMB numbers are placed as close as possible to the applicable recordkeeping or reporting requirements. 

Q02I10OBSOLETE PROVISIONS 
Q02I11Provisions that become obsolete before the revision date stated on the cover of each volume are not carried. Code users may find the text of provisions in effect on a given date in the past by using the appropriate numerical list of sections affected. For the period before January 1, 1986, consult either the List of CFR Sections Affected, 1949ï¿½091963, 1964ï¿½091972, or 1973ï¿½091985, published in seven separate volumes. For the period beginning January 1, 1986, a ``List of CFR Sections Affected'' is published at the end of each CFR volume. 

Q02I10CFR INDEXES AND TABULAR GUIDES 
Q02I11A subject index to the Code of Federal Regulations is contained in a separate volume, revised annually as of January 1, entitled CFR T4Index and Finding Aids.G1T1 This volume contains the Parallel Table of Statutory Authorities and Agency Rules (Table I). A list of CFR titles, chapters, and parts and an alphabetical list of agencies publishing in the CFR are also included in this volume. 
I11An index to the text of ``Title 3_The President'' is carried within that volume.
I11The Federal Register Index is issued monthly in cumulative form. This index is based on a consolidation of the ``Contents'' entries in the daily Federal Register. 
I11A List of CFR Sections Affected (LSA) is published monthly, keyed to the revision dates of the 50 CFR titles. 

Q02I10REPUBLICATION OF MATERIAL
Q02I11There are no restrictions on the republication of material appearing in the Code of Federal Regulations.

Q02I10INQUIRIES 
Q02I11For a legal interpretation or explanation of any regulation in this volume, contact the issuing agency. The issuing agency's name appears at the top of oddï¿½09numbered pages.
I11For inquiries concerning CFR reference assistance, call 202ï¿½09523ï¿½095227 or write to the Director, Office of the Federal Register, National Archives and Records Administration, Washington, DC 20408 or eï¿½09mail [email protected]. 

Q02I10SALES
Q02I11The Government Printing Office (GPO) processes all sales and distribution of the CFR. For payment by credit card, call 202ï¿½09512ï¿½091800, Mï¿½09F 8 a.m. to 4 p.m. e.s.t. or fax your order to 202ï¿½09512ï¿½092233, 24 hours a day. For payment by check, write to the Superintendent of Documents, Attn: New Orders, P.O. Box 371954, Pittsburgh, PA 15250ï¿½097954. For GPO Customer Service call 202ï¿½09512ï¿½091803. 



Q02I10ELECTRONIC SERVICES
Q02I11The full text of the Code of Federal Regulations, the LSA (List of CFR Sections Affected), The United States Government Manual, the Federal Register, Public Laws, Weekly Compilation of Presidential Documents and the Privacy Act Compilation are available in electronic format at www.access.gpo.gov/nara (``GPO Access''). For more information, contact Electronic Information Dissemination Services, U.S. Government Printing Office. Phone 202ï¿½09512ï¿½091530, or 888ï¿½09293ï¿½096498 (tollï¿½09free). Eï¿½09mail, [email protected].

ï¿½viiiï¿½I11The Office of the Federal Register also offers a free service on the National Archives and Records Administration's (NARA) World Wide Web site for public law numbers, Federal Register finding aids, and related information.  Connect to NARA's web site at www.nara.gov/fedreg. The NARA site also contains links to GPO Access.



I16Raymond A. Mosley,
I17Director, 
I18Office of the Federal Register. 
I19January 1, 2000.







F80928
ï¿½ixï¿½I02THIS TITLE 
I11Title 7_T4AgricultureG1T1 is composed of fifteen volumes. The parts in these volumes are arranged in the following order: parts 1ï¿½0926, 27ï¿½0952, 53ï¿½09209, 210ï¿½09299, 300ï¿½09399, 400ï¿½09699, 700ï¿½09899, 900ï¿½09999, 1000ï¿½091199, 1200ï¿½091599, 1600ï¿½091899, 1900ï¿½091939, 1940ï¿½091949, 1950ï¿½091999, and part 2000 to end. The contents of these volumes represent all current regulations codified under this title of the CFR as of January 1, 2000. 

Q06I11The Food and Nutrition Service current regulations in the volume containing parts 210ï¿½09299, include the Child Nutrition Programs and the Food Stamp Program. The regulations of the Federal Crop Insurance Corporation are found in the volume containing parts 400ï¿½09699.

Q06I11All marketing agreements and orders for fruits, vegetables and nuts appear in the one volume containing parts 900ï¿½09999. All marketing agreements and orders for milk appear in the volume containing parts 1000ï¿½091199. Part 900_General Regulations is carried as a note in the volume containing parts 1000ï¿½091199, as a convenience to the user.

Q06I11Redesignation tables appear in the Finding Aids section of the volumes containing parts 210ï¿½09299 and parts 1600ï¿½091899. 

Q06I11For this volume, Cheryl E. Sirofchuck was Chief Editor. The Code of Federal Regulations publication program is under the direction of Frances D. McDonald, assisted by Alomha S. Morris. 










ï¿½xï¿½gs,ic,w348,d532,r1I92CFRORDR.FRM



F8008I327 CFR Ch. XVIII (1ï¿½091ï¿½0900 Edition)
I33RHS, RBS, RUS, FSA, USDA
ï¿½1ï¿½I01Title 7_Agriculture 
I08(This book contains part 2000 to End)I03
I55T4SUBTITLE B_Regulations of the Department of Agriculture_G1T1Continued 
I88Part
Q08I50T4chapter xviii_G1T1Rural Housing Service, Rural Business-Cooperative Service, Rural Utilities Service, and Farm Service Agency, Department of Agriculture (Continued)
I592003
Q04I50T4chapter xxvi_G1T1Office of Inspector General, Department of Agriculture 
I592610 
Q04I50T4chapter xxvii_G1T1Office of Information Resources Management, Department of Agriculture 
I592700 
Q04I50T4chapter xxviii_G1T1Office of Operations, Department of Agriculture
I592810
Q04I50T4chapter xxix_G1T1Office of Energy, Department of Agriculture
I592900

Q04I50T4chapter xxx_G1T1Office of the Chief Financial Officer, Department of Agriculture
I593010

Q04I50T4chapter xxxi_G1T1Office of Environmental Quality, Department of Agriculture
I593100

Q04I50T4chapter xxxii_G1T1Office of Procurement and Property Management, Department of Agriculture
I593200


Q04I50T4chapter xxxiii_G1T1Office of Transportation, Department of Agriculture
I593300

Q04I50T4chapter xxxiv_G1T1Cooperative State Research, Education, and Extension Service, Department of Agriculture
I593400

Q04I50T4chapter xxxv_G1T1Rural Housing Service, Department of Agriculture
I593550

Q04I50T4chapter xxxvi_G1T1National Agricultural Statistics Service, Department of Agriculture
I593600

Q04I50T4chapter xxxvii_G1T1Economic Research Service, Department of Agriculture
I593700
ï¿½2ï¿½Q04I50T4chapter xxxviii_G1T1World Agricultural Outlook Board, Department of Agriculture
I593800
I65T4chapter xli_G1T1[Reserved]
Q04I50T4chapter xlii_G1T1Rural Business-Cooperative Service and Rural Utilities Service, Department of Agriculture
I594274
F8008I327 CFR Ch. XVIII (1ï¿½091ï¿½0900 Edition)
I33RHS, RBS, RUS, FSA, USDA

ï¿½3ï¿½I02Subtitle B_Regulations of the Department of Agriculture_(Continued) 

F8008I327 CFR Ch. XVIII (1ï¿½091ï¿½0900 Edition)
I33RHS, RBS, RUS, FSA, USDA


ï¿½5ï¿½I04CHAPTER XVIII_RURAL HOUSING SERVICE, RURAL BUSINESS-COOPERATIVE SERVICE, RURAL UTILITIES SERVICE, AND FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE (Continued)  
I03
Q06Q04I21T5Editorial Note: T1Nomenclature changes to chapter XVIII appear at 59 FR 66443, Dec. 27, 1994; 61 FR 1109, Jan. 16, 1996; and 61 FR 2899, Jan. 30, 1996.
I327 CFR Ch. XVIII (1ï¿½091ï¿½0900 Edition)
I33RHS, RBS, RUS, FSA, USDA
I05SUBCHAPTER I_ADMINISTRATIVE REGULATIONS 
I87Part
I88Page
I482003
I49Organization
I597
I482018
I49General
I5917
I482045
I49General
I5919


F80103
ï¿½7ï¿½I327 CFR Ch. XVIII (1ï¿½091ï¿½0900 Edition)
I33RHS, RBS, RUS, FSA, USDA
I05SUBCHAPTER I_ADMINISTRATIVE REGULATIONS 
S8010
I95Pt. 2003
I52PART 2003_ORGANIZATION


I86Subpart A_Functional Organization of the Rural Development Mission Area
S8006I18Sec.
S8010I262003.1Definitions.
I262003.2General.
I262003.3ï¿½092003.4[Reserved]
I262003.5Headquarters organization.
I262003.6Office of the Under Secretary.
I262003.7ï¿½092003.9[Reserved]
I262003.10Rural Development State Offices.
I262003.11ï¿½092003.13[Reserved]
I262003.14Field Offices.
I262003.15ï¿½092003.16[Reserved]
I262003.17Availability of information.
I262003.18Functional organization of RHS.
I262003.19ï¿½092003.21[Reserved]
I262003.22Functional organization of RUS.
I262003.23ï¿½092003.25[Reserved]
I262003.26Functional organization of RBS.
I262003.27ï¿½092003.50[Reserved]







Q04I21T5Authority: T15 U.S.C. 301; 7 U.S.C. 6941; and 7 CFR 2.17.


Q04I21T5Source: T162 FR 67259, Dec. 24, 1997, unless otherwise noted.



I56Subpart A_Functional Organization of the Rural Development Mission Area




I80ï¿½1A2003.1
I89Definitions.
I11T3EEOG1T1_the Equal Employment Opportunity Act of 1972, 42 U.S.C. ï¿½1A2000e T3et seq.G1T1
I11T3O&MG1T1_Operations and Management.
I11T3P&PG1T1_Policy and Planning.
I11T3RBSG1T1_Rural Business-Cooperative Development Service, USDA, or any successor agency.
I11T3RHSG1T1_Rural Housing Service, USDA, or any successor agency.
I11T3RTBG1T1_Rural Telephone Bank authorized by 7 U.S.C. 944.
I11T3Rural DevelopmentG1T1_Rural Development mission area of USDA.
I11T3RUSG1T1_Rural Utilities Service, USDA, or any successor agency.
I11T3SecretaryG1T1_the Secretary of USDA.
I11T3USDAG1T1_the United States Department of Agriculture.


I80ï¿½1A2003.2
I89General.
I11The Rural Development mission area of the Department of Agriculture was established as a result of the Department of Agriculture Reorganization Act of 1994, Title II of Pub.L. 103ï¿½09354. Rural Development's basic organization consists of Headquarters in Washington, D.C. and 47 State Offices. Headquarters maintains overall planning, coordination, and control of Rural Development agency programs. Administrators head RHS, RBS, and RUS under the direction of the Under Secretary for Rural Development. State Directors head the State Offices and are directly responsible to the Under Secretary for the execution of all Rural Development agency programs within the boundaries of their states.


I80ï¿½1A2003.3ï¿½092003.4
I89[Reserved]


I80ï¿½1A2003.5
I89Headquarters organization.
I11(a) The Rural Development Headquarters is comprised of:
I11(1) The Office of the Under Secretary;
I11(2) Two Deputy Under Secretaries; and,
I11(3) Three Administrators and their staffs.
I11(b) The Rural Development Headquarters is located at 1400 Independence Avenue, SW., Washington, DC. 20250ï¿½090700


I80ï¿½1A2003.6
I89Office of the Under Secretary.
I11In accordance with 7 CFR ï¿½1A2.17 the Secretary has delegated to the Under Secretary, Rural Development, authority to manage and administer programs and support functions of the Rural Development mission area.
I11(a) T3Office of the Deputy Under Secretary for P&P.G1T1 This office is headed by the Deputy Under Secretary for P&P. The Under Secretary, Rural Development, has delegated to the Deputy Under Secretary for P&P, responsibility for formulation and development of short-and long-range rural development policies of the Department in accordance with 7 CFR ï¿½1A2.45. The Deputy Under Secretary for P&P reports directly to the Under Secretary, Rural Development, and provides guidance and supervision for research, policy analysis and development, strategic planning, partnerships and special initiatives. For budget and accounting ï¿½8ï¿½purposes, all of the staff offices under the Deputy Under Secretary for P&P are housed in RBS.
I11(1) The Budget Analysis Division assesses potential impacts of alternative policies on the mission area's programs and operations and develops recommendations for change. The units are headed by the Chief Budget Officer, who individually serves as the top policy advisor to the Under Secretary and Deputy Under Secretary on all matters relating to mission area budget policy.
I11(2) The Research, Analysis and Information Division analyzes information on rural conditions and the strategies and techniques for promoting rural development. The division performs, or arranges to have conducted, short-term and major research studies needed to formulate policy.
I11(3) The Reinvention and Capacity Building Division coordinates the mission area's strategic planning initiatives, both at the National level and in the State Offices. The division assists the Rural Development agencies in their implementation of the Government Performance and Results Act (GPRA) and special initiatives of the Administration, USDA, and the Office of the Under Secretary.
I11(4) The Rural Initiatives and Partnership Division manages the mission area's involvement and coordination with other Federal and state departments and agencies to assess rural issues and develop model partnerships and initiatives to achieve shared rural development goals. The division is responsible for managing the National Rural Development Partnership and providing support and oversight of 37 State Rural Development Councils.
I11(b) T3Office of the Deputy Under Secretary for O&M.G1T1 In accordance with 7 CFR 2.45, the Under Secretary, Rural Development, has delegated to the Deputy Under Secretary for O&M responsibility for providing leadership in planning, developing, and administering overall administrative management program policies and operational activities of the Rural Development mission area. The Deputy Under Secretary for O&M reports directly to the Under Secretary, Rural Development.
I11(1) T3Office of the Deputy Administrator for O&M.G1T1 Headed by the Deputy Administrator for O&M, this office reports directly to the Deputy Under Secretary for O&M, and is responsible for directing and coordinating the consolidated administrative and financial management functions for Rural Development. This office provides overall guidance and supervision for budget and financial management, human resources management and personnel services, administrative and procurement services, information resources management and automated data systems. For budget and accounting purposes, all of the staff offices under the Deputy Administrator for O&M are housed in RHS.
I11(i) T3Office of the Controller.G1T1 Headed by the Chief Financial Officer, this office supports the Deputy Administrator for O&M in executing Rural Development requirements related to compliance with the Chief Financial Officers Act of 1990 and provides leadership, coordination, and oversight of all financial management matters and financial execution of the budget for the Rural Development agencies. This office also has full responsibility for Rural Development agencies' accounting, financial, reporting, and internal controls. The office provides direct oversight to the Headquarters Budget Division, Financial Management Division, and the Office of the Assistant Controller, located in St. Louis, Missouri.
I11(ii) T3Office of Assistant Administrator for Procurement and Administrative Services.G1T1 Headed by the Assistant Administrator for Procurement and Administrative Services, this office is responsible to the Deputy Administrator for O&M for overseeing the Procurement Management Division, the Property and Supply Management Division, and the Support Services Division:
I11(A) The Procurement Management Division is responsible for developing, implementing, and interpreting procurement and contracting policies for the Rural Development mission area. Major functions include planning outreach efforts and goals for small and disadvantaged businesses, providing staff assistance reviews in State and Local Offices, administering the Contracting Officer Professionalism Warrant program for Rural Development ï¿½9ï¿½agencies, and coordinating the development of Rural Development's acquisition plans.
I11(B) The Property and Supply Management Division is responsible for developing office space acquisition and utilization policies, providing training to field office leasing officers, administering the Leasing Officer Warrant program, assuring accessibility compliance in Rural Development's work sites, administering Rural Development's Physical Security program, and establishing and providing oversight to the worksite Energy Conservation program. This office operates a nationwide supply warehousing and distribution program, and oversees a nationwide Personal Property Management and Utilization Program, manages the U.S. Department of Agriculture (USDA) Excess Personal Property Program for field level activities, and provides direct support services to Rural Development's St. Louis facilities.
I11(C) The Support Services Division has responsibility for designing, developing, administering, and controlling Rural Development's directives management and issuance system, coordinating Rural Development's Regulatory Agenda and Regulatory Program submissions to USDA and OMB, serving as T4Federal RegisterG1T1 liaison, and analyzing and coordinating regulatory work plans for the Under Secretary. This office submits Paperwork Reduction Act public burden clearances to OMB, administers all printing programs, manages Rural Development travel policies and programs, and manages Freedom of Information Act, Privacy Act and Tort Claims programs.
I11(iii) T3Office of Information Resources Management (IRM).G1T1 Headed by the Chief Information Officer, this office is responsible to the Deputy Administrator for O&M for developing Rural Development's IRM policies, regulations, standards and guidelines. This office provides overall leadership and direction to activities assigned to the following four major divisions:
I11(A) The Customer Services Division is responsible for direct customer and technical support (hardware and software).
I11(B) The Management Services Division coordinates all IRM acquisition, budget, and policy and planning activities in support of Rural Development automation.
I11(C) The Information Technology Division provides support technical services in the areas of data administration, system integrity management, research and development, and telecommunications.
I11(D) The Systems Services Division is responsible for planning, directing, and controlling activities related to Rural Development's Automated Information Systems.
I11(iv) T3Office of the Assistant Administrator for Human Resources.G1T1 Headed by the Assistant Administrator for Human Resources, this office is responsible to the Deputy Administrator for O&M for the overall development, implementation, and management, of personnel and human resources support services for Rural Development. The office provides direction to the Headquarters Personnel Services, Human Resources Training and Mission Area Personnel Services Division, and Labor Relations Staff offices. The office is also responsible for the establishment of recruitment, retention, and development policies and programs supporting workforce diversity and affirmative action.
I11(2) T3Office of Civil Rights Staff.G1T1 Headed by a staff director, this staff has primary responsibility for providing leadership and administration of the Civil Rights Program for the Rural Development mission area. The staff conducts on-site reviews of borrowers and beneficiaries of Federal financial assistance to ensure compliance with Titles VI and VII of the Civil Rights Act of 1964, as amended, Title VIII of the Civil Rights Act of 1968, as amended, Section 504 of the Rehabilitation Act, the Americans with Disabilities Act, and prepares compliance reports. The staff conducts and evaluates Title VII compliance visits to insure that EEO programs are adequately implemented. In addition, the office develops, monitors, and evaluates Affirmative Employment programs for minorities, women and persons with disabilities, and coordinates and conducts community outreach activities at historically black colleges and universities. It also has oversight of special emphasis programs ï¿½10ï¿½such as the Federal Women's Program, Hispanic Emphasis Program, and Black Emphasis Program. The staff director reports directly to the Deputy Under Secretary for O&M.
I11(3) T3Office of Communications.G1T1 Headed by a director who reports directly to the Deputy Under Secretary for O&M, this office has primary responsibility for tracking legislation and development and institution of policies to provide public communication and information services related to the Rural Development. The office maintains a constituent data base and conducts minority outreach efforts and administers a public information and media center responsible for media inquiries, news releases, program announcements, media advisories, and information retrieval. This office also serves as a liaison with Office of Congressional Relations (OCR), Office of the General Counsel (OGC), and other Departmental units involved in Congressional relations and public information. This office drafts testimony, prepares witnesses, and provides staff for hearings and markups. In addition, the office briefs Congressional members and staff on the Rural Development matters, coordinates Rural Development's legislative activities with other USDA agencies and OMB and develops and implements legislative strategy. The staff also coordinates development and production of brochures, press releases, and other public information materials.


I80ï¿½1A2003.7ï¿½092003.9
I89[Reserved]


I80ï¿½1A2003.10
I89Rural Development State Offices.

I11(a) Headed by State Directors, State Offices report directly to the Under Secretary, Rural Development, and are responsible to the three Rural Development agency Administrators for carrying out agency program operations at the State level, ensuring adherence to program plans approved for the State by the Under Secretary, and rendering staff advisory and manpower support to Area and Local offices. The Rural Development State Directors, for budget and accounting purposes, are housed in the RHS agency.
I11(b) Program Directors within the State Office provide oversight and leadership on major program functions. Major program functions include: Single Family and Multi-Family Housing loans and grants, Community Facility, Water and Waste Disposal, Business and Cooperative, and the Empowerment Zones and Enterprise Communities (EZ/EC) programs.
I11(c) The USDA Rural Development State Office locations are as follows:

c2,L2,tp0,i1,s25,r25 I95  h1State h1Location
j
I01Alabama DMontgomery, AL
I01Alaska  DPalmer, AK
I01Arizona  DPhoenix, AZ
I01Arkansas  DLittle Rock, AR
I01California  DWoodland, CA
I01Colorado  DLakewood, CO
I01Delaware  DCamden, DE
I01Florida  DGainesville, FL
I01Georgia  DAthens, GA
I01Hawaii  DHilo, HI
I01Idaho  DBoise, ID
I01Illinois  DChampaign, IL
I01Indiana  DIndianapolis, IN
I01Iowa  DDes Moines, IA
I01Kansas  DTopeka, KS
I01Kentucky  DLexington, KY
I01Louisiana  DAlexandria, LA
I01Maine  DBangor, ME
I01Massachusetts  DAmherst, MA
I01Michigan  DEast Lansing, MI
I01Minnesota  DSt. Paul, MN
I01Mississippi  DJackson, MS
I01Missouri  DColumbia, MO
I01Montana  DBozeman, MT
I01Nebraska  DLincoln, NE
I01Nevada  DCarson City, NV
I01New Jersey  DMt. Holly, NJ
I01New Mexico  DAlbuquerque, NM
I01New York  DSyracuse, NY
I01North Carolina  DRaleigh, NC
I01North Dakota  DBismarck, ND
I01Ohio  DColumbus, OH
I01Oklahoma  DStillwater, OK
I01Oregon  DPortland, OR
I01Pennsylvania  DHarrisburg, PA
I01Puerto Rico  DHato Rey, PR
I01South Carolina  DColumbia, SC
I01South Dakota  DHuron, SD
I01Tennessee  DNashville, TN
I01Texas  DTemple, TX

I01Utah  DSalt Lake City, UT

I01Vermont  DMontpelier, VT
I01Virginia  DRichmond, VA
I01Washington  DOlympia, WA
I01West Virginia  DCharleston, WV
I01Wisconsin DStevens Point, WI
I01Wyoming DCasper, WY

e


Q04I20[62 FR 67259, Dec. 24, 1997; 63 FR 3256, Jan. 22, 1998]





I80ï¿½1A2003.11ï¿½092003.13
I89[Reserved]



I80ï¿½1A2003.14
I89Field Offices.
I11Rural Development field offices report to their respective State Director ï¿½11ï¿½and State Office Program Directors. State Directors may organizationally structure their offices based on the program workloads within their respective State. Field offices generally are patterned in a three or two tier program delivery structure. In a three tier system, Local offices report to an Area office, that reports to the State Office. In a two tier system, a ``Local'' or ``Area'' office reports to the State Office. Locations and telephone numbers of Area and Local Offices may be obtained from the appropriate Rural Development State Office.


I80ï¿½1A2003.15ï¿½092003.16
I89[Reserved]


I80ï¿½1A2003.17
I89Availability of information.
I11Information concerning Rural Development programs and agencies may be obtained from the Office of Communications, Rural Development, U. S. Department of Agriculture, STOP 0705, 1400 Independence Avenue SW., Washington, DC 20250ï¿½090705.


I80ï¿½1A2003.18
I89Functional organization of RHS.

I11(a) T3GeneralG1T1. The Secretary established RHS pursuant to ï¿½1A233 of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6943).

I11(b) T3Office of the AdministratorG1T1. According to 7 CFR 2.49, the Administrator has responsibility for implementing programs aimed at delivering loans and grant assistance to rural Americans and their communities in obtaining adequate and affordable housing and community facilities, in accordance with Title V of the Housing Act of 1949 (42 U.S.C. 1471 T3et seq.G1T1) and the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 T3et seq.G1T1).
I11(1) T3Legislative Affairs Staff.G1T1 The duties and responsibilities of this staff have now been aligned under the Office of Communication, headed by a director who reports directly to the Under Secretary for O&M. The Office of Communication is responsible for providing and carrying out legislative, public communication, and information services for the Rural Development mission area.
I11(2) T3Office of Program Support Staff.G1T1 The Program Support Staff is headed by a staff director who is responsible to the Administrator for monitoring managerial and technical effectiveness of RHS programs. The staff coordinates review and analysis of legislation, Executive Orders, OMB circulars, and Department regulations for their impact on Agency programs. The staff develops, implements, and reports on architectural and environmental policies, in cooperation with the Department. Staff responsibilities also include managing RHS's Hazardous Waste Management Fund, coordinating the Debarment and Suspension process for RHS, tracking the use of Program Loan Cost Expense funds, and maintaining the RHS Internet ``Home Page.''
I11(3) T3Office of Deputy Administrator, Single Family Housing.G1T1 Headed by the Deputy Administrator, Single Family Housing, this office is responsible to the Administrator for the development and implementation of RHS's Single Family Housing programs, which extend supervised housing credit to rural people of limited resources, for adequate, modest, decent, safe, and sanitary homes. The office is responsible for administering and managing sections 502 and 504 Rural Housing direct and guaranteed loan and grant programs, Rural Housing and Self-Help Site loans, the Self-Help Technical Assistance grant program, Housing Application Packaging and Technical and Supervisory Assistance grants, and Home Improvement and Repaid loans and grants. The office directs the following three divisions: Single Family Housing Processing Division, Single Family Housing Servicing and Property Management Division, and Single Family Housing Centralized Servicing Center in St. Louis, Mo.
I11(i) T3Office of Single Family Housing Processing Division.G1T1 Headed by a division director, this division is responsible for development and nationwide implementation of policies on processing Single Family Housing direct and guaranteed program loans. In addition, the division provides direction on the following: the Rural Housing Targeted Area Set-Aside program, debarments, payment assistance, title clearance and loan closing, site/subdivision development, Deferred Mortgage Payment Program; construction ï¿½12ï¿½defects, credit reports, appraisals, Manufactured Housing, coordinated assessment reviews, Home Buyer's Counseling/Education Program, and allocation of loan and grant program funds.
I11(ii) T3Office of Single Family Housing Servicing and Property Management Division.G1T1 Headed by a division director, this division is responsible for the development and implementation of nationwide policies for servicing RHS's multi-billion dollar portfolio of Single Family Housing loans, and managing and selling Single Family Housing inventory properties. The division also conducts state program evaluations, identifies program weaknesses, makes recommendations for improvements, and identifies corrective actions.
I11(iii) T3Office of Single Family Housing Centralized Servicing Center (CSC)_St. Louis, Missouri.G1T1 Headed by a director, CSC is responsible for centrally servicing RHS's multi-billion dollar portfolio of Single Family Housing loans. CSC provides interest credit or payment assistance renewals, performs escrow activities for real estate taxes and property hazard insurance, oversees collection of loan payments, and grants interest credit, payment assistance, and moratoria.
I11(4) T3Office of the Deputy Administrator, Multi-Family Housing Division.G1T1 Headed by the Deputy Administrator, Multi-Family Housing, this office is responsible for the development and nationwide implementation of RHS's Multi-Family Housing programs, which extend supervised housing credit to rural residents an opportunity to have decent, safe, and sanitary rental housing. The following programs are administered and managed by this office: Section 515 Rural Rental Housing, Rural Cooperative and Congregate Housing Programs, Section 521 Rental Assistance, Farm Labor Housing loan and grant programs, Housing Preservation Grants, rural housing vouchers, and Housing Application Packaging Grants. This office directs the following two divisions:
I11(i) T3Multi-Family Housing Processing Division.G1T1 Headed by a division director, this division is responsible for the development and nationwide implementation of policies on processing Multi-Family Housing program loans. The division manages the following program areas: elderly and family rental housing, Farm Labor Housing loans and grants, outreach contacts, congregate facilities, Housing Preservation Grants, cooperative housing, rural housing vouchers, appraisals, Congregate Housing Services Grants, Rental Assistance, Housing Application Packaging Grants, targeted area and nonprofit set asides, Multi-Family Housing suspensions and debarments, title clearance and loan closing, allocation and monitoring of loan and grant funds, adverse decisions and appeals, commercial credit reports, individual credit reports, and, site development.
I11(ii) T3Multi-Family Housing Portfolio Management Division.G1T1 Headed by a division director, this division is responsible for the development and institution of policies on the management and servicing of the nationwide Multi-Family Housing programs. The Division implements current and long range plans for servicing Rural Rental Housing loans, Labor Housing loans and grants, and Rental Assistance or similar tenant subsidies.


I11(5) T3Office of the Deputy Administrator, Community Programs.G1T1 Headed by the Deputy Administrator, Community Programs, this office is responsible for overseeing the administration and management of Community Facilities loans and grants to hospitals and nursing homes, police and fire stations, libraries, schools, adult and child care centers, etc. The office monitors and evaluates the administration of loan and grant programs on a nationwide basis and provides guidance and direction for community programs through two divisions, Community Programs Loan Processing Division and Servicing and Special Authorities Division.

I11(i) T3Community Programs Loan Processing Division.G1T1 Headed by a director, this division is responsible for the overall administration, policy development, fund distribution, and processing of Community Facilities loans and grants  and other loan and grant programs assigned to the Division.


I11(ii) T3Servicing and Special Authorities Division.G1T1 Headed by a division director, this division is responsible for the overall administration, policy development, and servicing of the Community ï¿½13ï¿½Facilities loan and grant programs. The division conducts program evaluations, identifies program weaknesses, makes recommendations for improvements, and identifies corrective actions. The division also administers and services Nonprofit National Corporation loans and grants.

Q04I20[62 FR 67259, Dec. 24, 1997, as amended at 64 FR 32388, June 17, 1999]




I80ï¿½1A2003.19ï¿½092003.21
I89[Reserved]


I80ï¿½1A2003.22
I89Functional organization of RUS.
I11(a) T3General.G1T1 The Secretary established RUS pursuant to ï¿½1A232 of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6942).
I11(b) T3Office of the Administrator.G1T1 According to 7 CFR 2.47, the Administrator has responsibility for managing and administering the programs and support functions of RUS to provide financial and technical support for rural infrastructure to include electrification, clean drinking water, telecommunications, and water disposal systems, pursuant to the Consolidated Farm and Rural Development Act, as amended (7 U.S.C. 1921 T3et seq.G1T1), and the Rural Electrification Act of 1936, as amended (7 U.S.C. 901 T3et seq.G1T1). The office develops and implements strategic plans concerning the Rural Electrification Act of 1936, as amended. The Administrator serves as Governor of the Rural Telephone Bank (RTB) with a 13-member board of directors, and exercises and performs all functions, powers, and duties of the RTB in accordance with 7 U.S.C. 944.
I11(1) T3Borrower and Program Support Services.G1T1 Borrower and Program Support Services consist of the three following staffs which are responsible to the Administrator for planning and carrying out a variety of program and administrative services in support of all RUS programs, and providing expert advice and coordination for the Administrator:
I11(i) T3Administrative Liaison Staff.G1T1 Headed by a staff director, this staff advises the Administrator on management issues and policies relating to human resources, EEO, labor-management partnership, administrative services, travel management, automated information systems, and administrative budgeting and funds control.
I11(ii) T3Program Accounting Services Division.G1T1 Headed by a division director, this division develops and evaluates the accounting systems and procedures of Electric, Telecommunications, and Water and Wastewater borrowers; assures that accounting policies, systems, and procedures meet regulatory, Departmental, General Accounting Office, OMB, and Treasury Department requirements; examines borrowers' records and operations, and reviews expenditures of loans and other funds; develops audit requirements; and approves Certified Public Accountants to perform audits of borrowers.
I11(iii) T3Program and Financial Services Staff.G1T1 Headed by a staff director, this staff evaluates the financial conditions of troubled borrowers, negotiates settlements of delinquent loans, and makes recommendations to program Assistant Administrators on ways to improve the financial health of borrowers.
I11(2) T3Office of Assistant Administrator_Electric Program.G1T1 Headed by the Assistant Administrator_Electric Program, this office is responsible to the Administrator for directing and coordinating the Rural Electrification program of RUS nationwide. This office develops, maintains, and implements regulations and program procedures on processing and approving loans and loan-related activities for rural electric borrowers. The office directs the following three divisions:
I11(i) T3Electric Regional Divisions.G1T1 Headed by division directors, these two divisions are responsible for administering the Rural Electrification program in specific geographic areas and serving as the single point of contact for all distribution borrowers. The divisions provide guidance to borrowers on RUS loan policies and procedures, maintain oversight of borrower rate actions, and make recommendations to the Administrator on borrower applications for RUS financing. The divisions also assure that power plant, distribution, and transmission systems and facilities are designed and constructed in accordance with the terms of the loan and proper engineering practices and specifications.
ï¿½14ï¿½I11(ii) T3Power Supply Division.G1T1 Headed by a division director, this division is responsible for administering the Rural Electrification program responsibilities with regard to power supply borrowers nationwide and serves as primary point of contact between RUS and all such borrowers. The division develops and maintains a loan processing program for Rural Electrification Act purposes, and develops and administers engineering and construction policies related to planning, design, construction, operation, and maintenance for power supply borrowers.
I11(iii) T3Electric Staff Division.G1T1 Headed by a division director, this division is responsible for engineering activities related to the design, construction, and technical operations and maintenance of power plants; distribution of power; and transmission systems and facilities, including load management and communications. The division develops criteria and techniques for evaluating the financing and performance of electric borrowers and forecasting borrowers' future power needs; and maintains financial expertise on the distribution and power supply loan program, and retail and wholesale rates.
I11(3) T3Office of Assistant Administrator_Telecommunications Program.G1T1 Headed by the Assistant Administrator_Telecommunications Program, this office is responsible to the Administrator for directing and coordinating the National Rural Telecommunications, Distance Learning, and Telemedicine programs of RUS. The Assistant Administrator, Telecommunications Program, serves as Assistant Governor of the RTB and is responsible for the day-to-day activities of the RTB. The office develops, maintains, and implements regulations and program procedures on the processing and approval of grants, loans, and loan-related activities for all rural telecommunications borrowers and grant recipients. The office directs the following three divisions:
I11(i) T3Telecommunications Standards Division.G1T1 Headed by a division director, this division is responsible for engineering staff activities related to the design, construction, and technical operation and maintenance of rural telecommunications systems and facilities. The office develops engineering practices, policies, and technical data related to borrowers' telecommunications systems; and evaluates the application of new communications network technology, including distance learning and telemedicine, to rural telecommunications systems.
I11(ii) T3Advanced Telecommunications Services Staff.G1T1 Headed by a staff director, this staff primarily serves the Assistant Administrator, Telecommunications Program in the role of the Assistant Governor of the RTB. The office performs analyses and makes recommendations to the AAT on issues raised by the RTB Governor, Board of Directors, or RTB borrowers. This staff maintains official records for the RTB Board and prepares minutes of RTB Board meetings. The staff director serves as the Assistant Secretary to the RTB. The staff performs the calculations necessary to determine the cost of money rate to RTB borrowers and recommends and develops program- wide procedures for loan and grant programs. The office is responsible for the Telecommunications Program's home page on the Internet.
I11(iii) T3Telecommunications Area Offices.G1T1 Headed by area directors, these four offices are responsible for administering the Telecommunications, Distance Learning, and Telemedicine programs for specific geographic areas, and serving as the single point of contact for all program applicants and borrowers within their respective areas. The offices provide guidance to applicants and borrowers on RUS and RTB loan policies and procedures, and make recommendations to the Administrator on applications for loans, guarantees, and grants. The offices assure that borrower systems and facilities are designed and constructed in accordance with the terms of the loan, acceptable engineering practices and specifications, and acceptable loan security standards.
I11(4) T3Office of the Assistant Administrator_Water and Environmental Programs.G1T1 Headed by the Assistant Administrator, Water and Environmental Programs, this office is responsible to the Administrator for directing and coordinating a nationwide Water and ï¿½15ï¿½Waste Disposal Program for RUS as authorized under Section 306 of the Consolidated Farm and Rural Development Act, as amended (7 U.S.C. 1926). The office oversees administration of RUS policies on making and servicing loans and grants for water and waste facilities in rural America, and the development of engineering policies, and practices related to the construction and operation of community water and waste disposal systems. This office is responsible for development and coordination of environmental programs with regard to the Water and Waste Disposal Program and directs the following two divisions:
I11(i) T3Water Programs Division.G1T1 Headed by the division director, this division is responsible for administering the Water and Waste Disposal loan and grant making and servicing and special authorities activities nationwide. This office also makes allocation of loan and grant funds to field offices and manages National Office reserves.
I11(ii) T3Engineering and Environmental Staff.G1T1 Headed by a staff director, this staff is responsible for engineering activities at all stages of program implementation, including: review of preliminary engineering plans and specifications, procurement practices, contract awards, construction monitoring, and system operation and maintenance. The staff also develops Agency engineering practices, policies, and technical data related to the construction and operation of community water and waste disposal systems. The staff is responsible for coordinating environmental policy and providing technical support in areas such as: hazardous waste, debarment and suspension, flood insurance, drug free workplace requirements, and computer program software.


I80ï¿½1A2003.23ï¿½092003.25
I89[Reserved]


I80ï¿½1A2003.26
I89Functional organization of RBS.
I11(a) T3General.G1T1 The Secretary established RBS pursuant to ï¿½1A234 of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6944).
I11(b) T3Office of the Administrator.G1T1 According to 7 CFR 2.48, the Administrator is responsible for managing and administering the programs and support functions of RBS to provide assistance to disadvantaged communities through grants and loans and technical assistance to businesses and communities for rural citizens and cooperatives, pursuant to the following authorities: the Rural Electrification Act of 1936, as amended (7 U.S.C. 940c and 950aa T3et seq.G1T1), the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 T3et seq.G1T1), the Cooperative Marketing Act of 1926 (7 U.S.C. 451ï¿½09457), the Agricultural Marketing Act of 1946 (7 U.S.C. 1621ï¿½091627), and the Food Security Act of 1985 (7 U.S.C. 1932). These grants, loans, and technical assistance improve community welfare by enhancing organizational and management skills, developing effective economic strategies, and expanding markets for a wide range of rural products and services.
I11(1) T3Resources Coordination Staff.G1T1 Headed by the staff director, this staff is responsible to the Administrator for preparing legislative initiatives and modifications for program enhancement. The staff monitors legislative and regulatory proposals that potentially impact RBS functions. The staff serves as liaison on budgetary and financial management matters between RBS staff and the Office of the Controller, and assists the Administrator in presenting and supporting RBS's budget and program plans. The staff also advises the Administrator and RBS officials on management issues and policies related to: human resources, labor relations, civil rights, EEO, space, equipment, travel, Senior Executive Service and Schedule C activities, contracting, automated information systems, and accounting. The staff provides analysis and recommendations on the effectiveness of administrative and management activities, and performs liaison functions between RBS and the Office of the Deputy Under Secretary for O&M on a wide variety of administrative functions.
I11(2) T3Office of the Deputy Administrator, Business Programs.G1T1 Headed by the Deputy Administrator, Business Programs, this office is responsible to the Administrator for overseeing and coordinating the Business and Industry Guaranteed and Direct Loan programs, Intermediary Relending Program ï¿½16ï¿½loans, Rural Business Enterprise grants, Rural Business Opportunity grants, Rural Economic Development loan and grant programs, and the Rural Venture Capital Demonstration Program. The office participates in policy planning, and program development and evaluation. It also directs the following three divisions:
I11(i) T3Processing Division.G1T1 Headed by the division director, this division is responsible for developing and maintaining loan processing regulations, and directs the processing and approval of guaranteed and direct business and industry loans, and the Rural Venture Capital Demonstration Program. It provides technical assistance to field employees and borrowers on loan processing and develops approval criteria and performance standards for loans. The division recommends plans, programs, and activities related to business loan programs and provides environmental guidance and support.
I11(ii) T3Servicing Division.G1T1 Headed by the division director, this office is responsible for developing and maintaining servicing regulations. It directs and provides technical assistance to field employees and borrowers on servicing business loans and grants. The division reviews large, complex, or potentially controversial loan and grant dockets related to loan servicing and recommends servicing plans, programs, and activities related to business loan and grant programs.
I11(iii) T3Specialty Lenders Division.G1T1 Headed by the division director, this office is responsible for directing and developing and maintaining regulations concerning the processing and approval of Intermediary Relending loans, Rural Business Enterprise grants, Rural Business Opportunity grants, and Rural Economic Development loan and grant programs. The division provides technical assistance to field employees and borrowers on loan and grant processing and other activities. It also develops approval criteria and performance standards and recommends plans, programs, and activities related to business loan and grant programs.
I11(3) T3Office of the Deputy Administrator, Cooperative Services Programs.G1T1 Headed by the Deputy Administrator, Cooperative Services Programs, this office is responsible to the Administrator for providing service to cooperative associations by administering a program of research and analysis of economic, social, legal, financial, and other related issues concerning cooperatives. The office administers programs to assist cooperatives in the organization and management of their associations and a program for economic research and analysis of the marketing aspects of cooperatives. The division administers and monitors activities of the National Sheep Industry Improvement Center and the Appropriate Technology Transfer to Rural Areas Program, and the Rural Cooperative Development Grant Program. The office directs the following three divisions:
I11(i) T3Cooperative Marketing Division.G1T1 Headed by the division director, this division is responsible for participating in the formulation of National policies and procedures on cooperative marketing. The division conducts research and analysis and gives technical assistance to farmer cooperatives on cooperative marketing of certain crops, livestock, aquaculture, forestry, poultry, semen, milk, and dairy products to improve their market performance and economic position.
I11(ii) T3Cooperative Development Division.G1T1 Headed by the division director, this division is responsible for participating in the formulation of National policies and procedures on cooperative development. The office conducts evaluations and analysis of proposed new cooperatives to develop plans for implementing feasible operations, and advises and assists rural resident groups and developing cooperatives in implementing sound business plans for new cooperatives. It provides research, analysis, and technical assistance to rural residents on cooperative development initiatives and strategies to improve economic conditions through cooperative efforts.
I11(iii) T3Cooperative Resource Management Division.G1T1 Headed by the division director, this division is responsible for participating in the formulating of National policies and procedures on cooperative resource management. The division conducts research and analysis and gives technical assistance to cooperatives on their overall structure, ï¿½17ï¿½strategic management and planning, financial issues, and operational characteristics to improve their use of resources, financial policies, and ability to adapt to market conditions. The division conducts research and analysis of policy, taxation, Federal laws, State statutes, and common laws that apply to cooperative incorporation, structure, and operation to assist cooperatives in meeting legal requirements.
I11(4) T3Office of the Deputy Administrator, Community Development.G1T1 Headed by the Deputy Administrator, Community Development, this office is responsible to the Under Secretary, Rural Development, for coordinating and overseeing all functions in the Community Outreach and Empowerment Program areas. The office assists in providing leadership and coordination to National and local rural economic and community development efforts. For appropriation and accounting purposes, this office is located under RBS. The office directs the following two divisions:
I11(i) T3Empowerment Program Division.G1T1 Headed by the division director, this division is responsible for formulating policies and developing plans, standards, procedures, and schedules for accomplishing RBS activities related to ``community empowerment programs'', including EZ/EC, AmeriCorps, and other initiatives. The office develops informational materials and provides technical advice and services to support States on community empowerment programs. It also generates information about rural conditions and strategies and techniques for promoting rural economic development for community empowerment programs.
I11(ii) T3Community Outreach Division.G1T1 Headed by the division director, this division is responsible for designing and overseeing overall systems and developing resources to support State and community level implementation activities for RBS programs. The office designs program delivery systems and tools, removes impediments to effective community-level action, supports field offices with specialized skills, and establishes partnerships with National organizations with grass-roots membership to assure that programs and initiatives are designed and implemented in a way that empowers communities. It develops methods for working with rural business intermediaries to assist them in providing technical assistance to new, small business, and provides Internet-based services to 1890 Land-grant universities, EZ/EC, and AmeriCorps volunteers, linking RBS information support to communities with high levels of need.
I11(5) T3Alternative Agricultural Research and Commercialization Corporation.G1T1 Headed by a director, this Corporation is responsible for providing and monitoring financial assistance for the development and commercialization of new nonfood and nonfeed products from agricultural and forestry commodities in accordance with 7 U.S.C. 5901 T3et seq.G1T1 The Corporation acts as a catalyst in forming private and public partnerships and promotes new uses of agricultural materials. It expands market opportunities for U.S. farmers through development of value-added industrial products and promotes environmentally friendly products. For budget and accounting purposes, this office is assigned to RBS. The director of the Corporation is responsible to the Office of the Secretary.


I80ï¿½1A2003.27ï¿½092003.50
I89[Reserved]





I95Pt. 2018
I52PART 2018_GENERAL
S8006I86Subparts Aï¿½09E[Reserved]
S8010
I86Subpart F_Availability of Information
S8006I18Sec. 
S8010I262018.251General statement. 
I262018.252Public inspection and copying. 
I262018.253Indexes. 
I262018.254Requests for records. 
I262018.255Appeals. 
I262018.256ï¿½092018.300[Reserved] 

Q04I21T5Authority:  T15 U.S.C. 552.
S8006I56Subparts Aï¿½09E[Reserved]
S8010
I56Subpart F_Availability of Information 
Q04I21T5Source:  T161 FR 32645, June 25, 1996, unless otherwise noted.

ï¿½18ï¿½I80ï¿½1A2018.251
I89General statement. 
I11In keeping with the spirit of the Freedom of Information Act (FOIA), the policy of Rural Development and its component agencies, Rural Housing Service (RHS), Rural Utilities Service (RUS), and Rural Business-Cooperative Service (RBS), governing access to information is one of nearly total availability, limited only by the countervailing policies recognized by the FOIA. 

I80ï¿½1A2018.252
I89Public inspection and copying. 
I11Facilities for inspection and copying are provided by the Freedom of Information Officer (FOIO) in the National Office, by the State Director in each State Office, by the Rural Development Manager (formerly, District Director) in each District Office, and by the Community Development Manager (formerly, County Supervisor) in each County Office. A person requesting information may inspect such materials and, upon payment of applicable fees, obtain copies. Material may be reviewed during regular business hours. If any of the Rural Development materials requested are not located at the office to which the request was made, the request will be referred to the office where such materials are available. 

I80ï¿½1A2018.253
I89Indexes. 
I11Since Rural Development does not maintain any materials to which 5 U.S.C. 552(a)(2) applies, it maintains no indexes. 

I80ï¿½1A2018.254
I89Requests for records. 
I11Requests for records are to be submitted in accordance with 7 CFR 1.3 and may be made to the appropriate Community Development Manager, Rural Development Manager, State Administrative Management Program Director (formerly, State Administrative Officer), State Director, Freedom of Information/Privacy Act Specialist, or Freedom of Information Officer. The last two positions are located in the Rural Development Support Services Division, Washington, DC 20250. The phrase ``FOIA REQUEST'' should appear on the outside of the envelope in capital letters. The FOIA requests under the Farm Credit Programs (formally FmHA Farmer Programs) should be forwarded to the Farm Service Agency (FSA), Freedom of Information Officer, Room 3624, South Agriculture Building, 14th & Independence Avenue, SW., Washington, DC 20250ï¿½090506. Requests should be as specific as possible in describing the records being requested. The FOIO, Freedom of Information/Privacy Act Specialist, each State Administrative Management Program Director, each State Director, each Rural Development Manager, and each Community Development Manager are delegated authority to act respectively at the national, state, district, or county level on behalf of Rural Development to: 
I11(a) Deny requests for records determined to be exempt under one or more provisions of 5 U.S.C. 552(b); 
I11(b) Make discretionary releases (unless prohibited by other authority) of such records when it is determined that the public interests in disclosure outweigh the public and/or private ones in withholding; and 
I11(c) Reduce or waive fees to be charged where determined to be appropriate. 

I80ï¿½1A2018.255
I89Appeals. 
I11If all or any part of an initial request is denied, it may be appealed in accordance with 7 CFR 1.7 to that particular Agency possessing the documents. Please select the appropriate Agency to forward your FOIA appeal from the following addresses: Administrator, Rural Housing Service, Room 5014, AG Box 0701, 14th & Independence Avenue, SW._South Building, Washington, DC 20250ï¿½090701; Administrator, Rural Business-Cooperative Service, Room 5045, AG Box 3201, 14th & Independence Avenue, SW._South Building, Washington, DC 20250ï¿½093201 and Administrator, Rural Utilities Service, Room 4501, AG Box 1510, 14th & Independence Avenue, SW._South Building, Washington, DC 20250ï¿½091510. The phrase ``FOIA APPEAL'' should appear on the front of the envelope in capital letters. 

ï¿½19ï¿½I80ï¿½1A2018.256ï¿½092018.300
I89[Reserved] 

I95Pt. 2045
I52PART 2045_GENERAL
S8006I86Subparts Aï¿½09II[Reserved]
S8010
I86Subpart JJ_Rural Development_Utilization of Gratuitous Services
S8006I18Sec.
S8010I262045.1751General.
I262045.1752Policy.
I262045.1753Authority to accept gratuitous services.
I262045.1754Scope of gratuitous services performed.
I262045.1755Preparation and disposition of agreement forms.
I262045.1756Records and reports.
Q02I26T5T4Exhibit A to Subpart JJ_Agreement FormG1T5


Q04I21T5Authority:  T17 U.S.C. 1989; 42 U.S.C. 1480; delegation of authority by the Secretary of Agriculture, 7 CFR 2.23; delegation of authority by the Assistant Secretary for Rural Development, 7 CFR 2.70.
Q04I21T5Source:  T143 FR 3694, Jan. 27, 1978, unless otherwise noted. 
S8006I56Subparts Aï¿½09II[Reserved] 
S8010
I56Subpart JJ_Rural Development_Utilization of Gratuitous Services

I80ï¿½1A2045.1751
I89General.
I11Section 331(b) of the Consolidated Farm and Rural Development Act (Pub. L. 92ï¿½09419), and section 506(a) of the Housing Act of 1949, empower the Secretary of Agriculture to accept and utilize voluntary and uncompensated services in carrying out the provisions of the above cited Acts. The Secretary has delegated those authorities to the Administrator of the Farmers Home Administration (FmHA) or its successor agency under Public Law 103ï¿½09354 in 7 CFR 2.70(a) (1) and (2).

I80ï¿½1A2045.1752
I89Policy.
I11Voluntary and uncompensated (gratuitous) services may be accepted with the consent of the agency concerned, from the following sources under the conditions set forth in Exhibit A, ``Agreement for Utilization of Employee of T3(Enter Official Title of Governing Body or Other Authorized Organization)G1T1 By the Farmers Home Administration or its successor agency under Public Law 103ï¿½09354'' (Agreement Form).
I11(a) Any agency of State government or of any territory or political subdivision.
I11(b) Non-profit, educational, and charitable organizations, provided that no partisan, political, or profit motive is involved either explicitly or implicitly.

I80ï¿½1A2045.1753
I89Authority to accept gratuitous services.
I11(a) State Directors, Director, Personnel Division, and Director, Finance Office, are hereby authorized to accept and utilize gratuitous services offered by the governmental agencies listed in ï¿½1A2045.1752(a).
I11(b) An offer received by an FmHA or its successor agency under Public Law 103ï¿½09354 State or County Office from a source listed in ï¿½1A2045.1752(b) shall be transmitted to the National Office, Attention: Director, Personnel Division, for decision. The offer will be accompanied by copies of the Articles of Incorporation and By-laws (if the organization is incorporated), a statement that the organization accepts the conditions set forth in the Agreement Form, and evidence that the organization is financially able to meet the required fiscal obligations of the agreement. 

I80ï¿½1A2045.1754
I89Scope of gratuitous services performed.
I11(a) Gratuitous services accepted in accordance with this subpart may be utilized to perform any function performed by regular FmHA or its successor agency under Public Law 103ï¿½09354 employees (excluding Committee members). Such services must not result in the displacement of employees. Most of the gratuitous services should be performed at the County Office level and conform to a standard FmHA or its successor agency under Public Law 103ï¿½09354 position description. A nonstandard position description may be developed and used, depending on current agency needs in a particular office and gratuitous skills available.
I11(b) Orientation and other training will be provided by FmHA or its successor agency under Public Law 103ï¿½09354 so that gratuitous services may be performed in accordance with current FmHA or its successor agency under Public Law 103ï¿½09354 procedure.
ï¿½20ï¿½I11(c) Persons performing authorized gratuitous services will be held to the same standard as regular FmHA or its successor agency under Public Law 103ï¿½09354 employees performing similar duties. The issuance of, and accountability for, identification cards and clearance of employee accountability will be as prescribed in FmHA or its successor agency under Public Law 103ï¿½09354 Instruction 2024ï¿½09B which is available in all FmHA or its successor agency under Public Law 103ï¿½09354 Offices. Such persons, except Construction Inspectors may, when under direct supervision of County Supervisors, act as Collection Officers and be allowed to use receipt books in accordance with FmHA or its successor agency under Public Law 103ï¿½09354 Instructions 2024ï¿½09C and 451.2 (part 1862 of this chapter and other applicable regulations available in all FmHA or its successor agency under Public Law 103ï¿½09354 Offices).

I80ï¿½1A2045.1755
I89Preparation and disposition of agreement forms.
I11(a) Agreements to accept and utilize gratuitous services must be identical to the attached Exhibit A (Agreement Form) with such exceptions as may be authorized by the Office of the General Counsel, Department of Agriculture.
I11(b) Two copies of each signed Agreement Form will be forwarded to the Personnel Division. One copy will be retained in the State or Finance Office.

I80ï¿½1A2045.1756
I89Records and reports.
I11The FmHA or its successor agency under Public Law 103ï¿½09354 official signing the Agreement Form will maintain records to show the names, duty assignments, time worked and work locations of all persons performing gratuitous services. Copies of time reports submitted to the persons' employers should suffice. These records will be necessary to respond to occasional requests for reports on the acceptance and utilization of gratuitous services in the FmHA or its successor agency under Public Law 103ï¿½09354.
I95Pt. 2045, Subpt. JJ, Exh. A

I81Exhibit A to Subpart JJ_Agreement Form

I74for utilization of employees of (official title of governing body or other authorized organization, i.e., pickens county, ala., board of commissioners)
I74by the Farmers Home Administration or its successor agency under Public Law 103ï¿½09354
I211. This Agreement, date G7T2XG1T1G7T2XG1T1G7T2XG1T1 between, G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1, a (political subdivision), (educational), (charitable), (or nonprofit) an organization of the State ofG7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1(hereinafter called the Agency) and the United States of America acting through Farmers Home Administration or its successor agency under Public Law 103ï¿½09354, U.S. Department of Agriculture (hereinafter called the Administration) is entered into for the purpose of permitting certain employees of the Agency (hereinafter called the Agency employees) to assist in the Administration's effort to provide agricultural, housing and other assistance for rural people of the State ofG7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1in accordance with Section 331(b) of the Consolidated Farm and Rural Development Act and Section 506(a), Title V of the Housing Act of 1949.
I212. The Administration certifies that it is empowered by the current Federal laws cited above, and related rules and regulations, to accept personnel assistance from the Agency as provided in paragraphs 4 and 5 below; and that the work assigned to Agency employees will be useful, in the public interest, could not otherwise be provided, and will not result in the displacement of employed workers.
I213. The Agency certifies that it has the authority under the laws of the State ofG7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1to enter into this Agreeement and to provide the services agreed upon in the manner provided for.
I214. The Administration hereby supplies the Agency with a narrative description which is made a part of this Agreement as Attachment ``A,'' explicitly setting forth the duties, knowledge, skills, and abilities to be required of Agency employees.
I215. The Administration agrees to:
I21(a) Provide training for and responsible supervision of qualified and acceptable Agency employees in accordance with Attachment ``A.''
I21(b) Provide work within the State ofG7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1for qualified and acceptable Agency employees for periods not to exceed eight hours per day and 40 hours per week.
ï¿½21ï¿½I21(c) Provide the office space, tools, equipment, and supplies to be used by Agency employees in performing work for the Administration.
I21(d) Report in the Agency, as required, the time worked by and work accomplishments of Agency employees.
I21(e) Consult with the Agency, as necessary, on situations involving delinquency, misconduct, neglect of work, and apparent conflicts of interest of Agency employees.
I21(f) Reimburse Agency employees for proper and reasonable travel and per diem expenses incurred in performing official duties for the Administration, in accordance with Administration travel regulations.
I21(g) Consider Agency employees to be Federal employees for the purposes of the Federal Employees Compensation Act (5 U.S.C. 8101) and of the Federal Tort Claims Act (28 U.S.C. 2671ï¿½092680).
I216. The Agency agrees to:
I21(a) Not discriminate against any employee or applicant for employment because of race, color, religion, sex, age, marital status, physical handicap, or national origin. The Agency will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, age, marital status, physical handicap, or national origin. Such action shall include, but not be limited to, the following Employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training including apprenticeship. The Agency will post in conspicuous places, available to employees and appliants for employment, notices setting forth the provisions of this nondiscriminating clause.
I21(b) Obtain fingerprints, police records, and work qualifications checks on potential assignees, and divulge the results to the Administration or permit the Administration to obtain this information.
I21(c) Assign only Agency employees who are acceptable to the Administration in terms of meeting the same ability and suitability standards which are applied to Federal employment.
I21(d) Pay all salaries and other expenses of Agency employees and comply with Federal, State, and local minimum wage statutes. No monies will be paid by the Administration under this agreement, either to the Agency or its employees.
I21(e) Consider any Tort claims by third parties under applicable laws and regulations.
I21(f) Reassign or terminate the assignment of Agency employees upon request of the Administration.
I217. The Agency and the Administration mutually understand and agree that the reasons for determining that an Agency employee is unacceptable or unsuitable for initial or continued assignment to Administration work may include but shall not be limited to the following:
I21(a) Practicing or appearing to practice discrimination for reasons of race, color, religion, sex, age, marital status, physical handicap, or national origin.
I21(b) Being or becoming involved in real or apparent conflicts of interest, such as, engaging directly or indirectly in business transactions with Administration applicants or borrowers, or using or appearing to use the Administration work assignment for private gain.
I21(c) Engaging in or having engaged in criminal, dishonest, or immoral conduct, or conducting himself in a manner which might embarrass or cause criticism of the Administration.
I21(d) Being absent from duty without authorization.
I21(e) Engaging in partisan political activity prohibited to Federal employees doing similar work.
I21(f) Lack of work.
I21(g) Inability of the employee to perform the duties of the assignment.
I218. The term of this Agreement shall commence on the date thereof. It shall end onG7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1G7T2XG1T1, unless extended by mutual agreement, or unless terminated earlier by at least (30) days advanced written notice by either party to the other.
I219. The Agency and the Administration respectively certify, each for itself, that its officer signing this Agreement is duly authorized thereto.
I74(Enter Official Title of Agency, i.e., City Council, Modesto, Calif.)
I74BY
I74Chairman, City Council,
I74Modesto, Calif.
I74FARMERS HOME
I74ADMINISTRATION or its successor agency under Public Law T1103ï¿½09354G1T5
I74BY
I74FmHA or its successor agency under Public Law T1103ï¿½09354G1T5T4 State Director for ()G1T5



F8008I327 CFR Ch. XXVI (1ï¿½091ï¿½0900 Edition)
I33Office of Inspector General, USDA


ï¿½23ï¿½I04CHAPTER XXVI_OFFICE OF INSPECTOR GENERAL, 
I04DEPARTMENT OF AGRICULTURE 
I03
I87Part
I88Page
I482610
I49Organization, functions, and delegations of authority
I5925
I482620
I49Availability of information to the public
I5928


F80103I327 CFR Ch. XXVI (1ï¿½091ï¿½0900 Edition)
I33Office of Inspector General, USDA

ï¿½25ï¿½I95Pt. 2610
I52PART 2610_ORGANIZATION, FUNCTIONS, AND DELEGATIONS OF AUTHORITY
S8006I18Sec.
S8010I262610.1General statement.
I262610.2Headquarters organization.
I262610.3Regional organization.
I262610.4Requests for service.
I262610.5Delegations of authority.

Q04I21T5Authority:  T15 U.S.C. 301 and 552, Pub. L. 95ï¿½09452, 5 U.S.C. App., and Pub. L. 97ï¿½0998, 7 U.S.C. 2270.
Q04I21T5Source:  T160 FR 52840, Oct. 11, 1995, unless otherwise noted.

I80ï¿½1A2610.1 
I89General statement.
I11(a) The Inspector General Act of 1978 as amended, Pub. L. 95ï¿½09452, 5 U.S.C. App., establishes an Office of Inspector General (OIG) in the U.S. Department of Agriculture (USDA) and transfers to it the functions, powers, and duties of offices referred to in the Department as the ``Office of Investigation'' and the ``Office of Audit,'' previously assigned to the OIG created by the Secretary's Memoranda 1915 and 1727, dated March 23, 1977, and October 5, 1977, respectively. Under this Act, OIG is established as an independent and objective unit, headed by the Inspector General (IG), who is appointed by the President and reports to and is under the general supervision of the Secretary.
I11(b) The mission of OIG is to provide policy direction; to conduct, supervise, and coordinate audits and investigations of USDA programs and operations to determine efficiency and effectiveness; to prevent and detect fraud and abuse in such programs and operations; and to keep the Secretary and the Congress informed of problems and deficiencies relative to the programs and operations.
I11(c) The Secretary has made the following delegations of authority to the IG (7 CFR 2.33):
I11(1) Advise the Secretary and General Officers in the planning, development, and execution of Department policies and programs.
I11(2) Provide for the personal security of the Secretary and Deputy Secretary.
I11(3) Serve as liaison official for the Department for all audits of USDA performed by the General Accounting Office.
I11(4) In addition to the above delegations of authority, the IG, under the general supervision of the secretary, has specific duties, responsibilities, and authorities pursuant to the Act, including:
I11(i) Conduct and supervise audits and investigations relating to programs and operations of the Department.
I11(ii) Provide leadership, coordination, and policy recommendations to promote economy, efficiency, and effectiveness, and to prevent and detect fraud and abuse in the administration of the Department's program and operations.
I11(iii) Keep the Secretary and the congress fully and currently informed about problems and deficiencies and the necessity for and progress of corrective actions in the administration of the Department's programs and operations.
I11(iv) Make such investigations and reports relating to the administration of programs and operations of the Department as are in the judgment of the IG, necessary or desirable.
I11(v) Review existing and proposed legislation and regulations and make recommendations to the Secretary and the Congress on the impact such laws or regulations will have on the economy and efficiency of program administration or in the prevention and detection of fraud and abuse in the programs and operations of the Department.
I11(vi) Have access to all records, reports, audits, reviews, documents, papers, recommendations, or other material available to the Department which relate to programs and operations for which the IG has responsibility.
I11(vii) Report expeditiously to the Attorney General any matter where there are reasonable grounds to believe there has been a violation of Federal criminal law.
I11(viii) Issue subpoenas to other than Federal agencies for the production of information, documents, reports, answers, records, accounts, papers, and other data and documentary evidence necessary in the performance of functions assigned by the Act.
I11(ix) Receive and investigate complaints or information from any Department employee concerning possible ï¿½26ï¿½violations of laws, rules or regulations, or mismanagement, gross waste of funds, abuse of authority, or substantial and specific dangers to the public health and safety.
I11(x) Select, appoint, and employ necessary officers and employees in OIG in accordance with laws and regulations governing the civil service, including an Assistant Inspector General for Auditing and an Assistant Inspector General for Investigations.

I11(xi) Obtain services as authorized by Section 3109 of Title 5, United States Code.
I11(xii) Enter into contracts and other arrangements for audits, inspections, studies, analyses, and other services with public agencies and private persons, and make such payments as may be necessary to carry out the provisions of the Act to the extent and in such amounts as may be provided in an appropriation act.
I11(d) The IG, under the Agriculture and Food Act of 1981, Pub. L. 97ï¿½0998, 7 U.S.C. 2270, and pursuant to rules issued by the Secretary in 7 CFR part 1a, has the authority to:
I11(1) Designate employees of the Office of Inspector General who investigate alleged or suspected felony criminal violations of statutes administered by the Secretary of Agriculture or any agency of USDA, when engaged in the performance of official duties to:
I11(i) Execute and serve a warrant for an arrest, for the search of premises, or the seizure of evidence when issued under authority of the United States upon probable cause to believe that such a violation has been committed;
I11(ii) Make an arrest without a warrant for any such violation if such violation is committed or if the employee has probable cause to believe that such violation is being committed in his/her presence; and
I11(iii) Carry a firearm.
I11(2) Issue directives and take the actions prescribed by the Secretary's rules.

I80ï¿½1A2610.2 
I89Headquarters organization.
I11(a) The OIG has a headquarters office in Washington, DC, and regional offices throughout the United States. The headquarters office consists of the immediate office of the IG and three operational units.
I11(b) T3Operational units.G1T1 (1) The Assistant Inspector General for Policy Development and Resources Management (AIG/PD&RM) formulates OIG policies and procedures; develops, administers and directs comprehensive programs for the management, budget, financial, personnel, systems improvement, and information activities and operations of OIG; and is responsible for OIG automated date processing (ADP) and OIG information management systems. The staff maintains OIG's directives system; Departmental Regulations and Federal Register issuances; administers the Freedom of Information and Privacy Acts, which includes requests received from the Congress, other Federal agencies, intergovernmental organizations, the news media, and the public; and provides for the administration of an OIG EEO program, including affirmative action. The immediate office of the AIG/PD&RM and two divisions carry out these functions.
I11(2) The Assistant Inspector General for Audit (AIG/A) carries out the OIG's domestic and foreign audit operations through a headquarters office, a Financial Management and ADP Audit Operations staff located in Kansas City, Missouri, and six regional offices shown in ï¿½1A2610.3(a). The staff provides a continual audit review of ADP security throughout USDA. Auditing officials conduct operational liaison on audit matters; schedule and conduct audits; release audit reports to management; follow agency action to assure that audit reports have been properly acted upon through review of Department management follow up system; monitor the quality of OIG audit reports; and coordinate activities with the Assistant inspector General (AIG) for Investigations. The staff also provides an integrated approach to fraud prevention and detection and management improvement in USDA programs and operations; reviews Department legislation and regulations through the involvement and cooperation of the Department's principal officers and program managers; coordinates analyses and reports on the conduct of fraud ï¿½27ï¿½vulnerability assessments; and recommends policies and provides technical assistance for investigative and audit operations. The Auditing headquarters office consists of the immediate office of the AIG/A and four staff divisions.
I11(3) The Assistant Inspector General for Investigations (AIG/I) carries out the OIG's domestic and foreign investigative operations through a headquarters office and the seven regional offices shown in ï¿½1A2610.3(b). Investigations officials conduct operational and intelligence liaison on investigative matters with the FBI, Secret Service, Internal Revenue Service (IRS), Interpol, and other Federal and State law enforcement organizations; determine the need for investigative action; conduct investigations; prepare factual reports of investigative findings; refer reports for appropriate administrative or legal action; followup on agency actions to assure that OIG investigative reports have been properly acted upon; monitor the quality of investigative reports; and coordinate activities with the AIG/A. The staff also conducts special investigations of major programs, operations, and high level officials; provides for the protection of the Secretary and Deputy Secretary; receives and processes employee complaints concerning possible violations of laws, rules, regulations or mismanagement. The Investigations headquarters office consists of the immediate office of the AIG/I and three staff divisions.

I80ï¿½1A2610.3 
I89Regional organization.
I11(a) Each Regional Inspector General for Audit (RIG/A) is responsible to the IG and to the AIG/A for supervising the performance of all OIG auditing activities relating to the Department's domestic and foreign programs and operations within an assigned geographic area. The addresses and telephone numbers of the six Audit Regional Offices and the territories served are as follows:

I74Audit Region, Address, Telephone Number, and Territory
I25Northeast Region, ATTN: Suite 5D06, 4700 River Road, Unit 151, Riverdale, Maryland 20737ï¿½091237, (301) 734ï¿½098763; Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Virgin Islands, Vermont, Virginia, and West Virginia.
I25Southeast Region, 401 W. Peachtree Street NW., Room 2328, Atlanta, Georgia 30365ï¿½093520, (404) 730ï¿½093210; Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee.
I25Midwest Region, 111 N. Canal Street, Suite 1130, Chicago, Illinois 60606ï¿½097295, (312) 353ï¿½091352; Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin.
I25Southwest Region, 101 South Main, Room 324, Temple, Texas 76501, (817) 774ï¿½091430; Arkansas, Louisiana, New Mexico, Oklahoma, and Texas.
I25Great Plains Region, 9435 Holmes, Room 233, Kansas City, Missouri 64131, Mailing address: PO Box 293, Kansas City, Missouri 64141, (816) 926ï¿½097667; Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, North Dakota, South Dakota, Wyoming, and Utah.
I25Western Region, 600 Harrison Street, Suite 225, San Francisco, California 94107, (415) 744ï¿½092851; Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Territory of Guam, Trust Territories of the Pacific, and Washington.
Q04
I11(b) Each RIG/I is responsible to the IG and to the AIG/I for supervising the performance of all OIG investigative activities relating to the Department's domestic and foreign programs and operations within an assigned geographic area. The addresses and telephone numbers of the seven Investigations Regional Offices and the territories served are as follows: 

I74Investigations Region, Address, Telephone Number, and Territory 
I26North Atlantic Region, 26 Federal Plaza, Room 1409, New York, New York 10278, (212) 264ï¿½098400; Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Puerto Rico, Rhode Island, Vermont, and Virgin Islands. 
I26Northeast Region, ATTN: Suite 5D06, 4700 River Road, Unit 151, Riverdale, Maryland 20737ï¿½091237, (301) 734ï¿½098850; Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, and West Virginia. 
I26Southeast Region, 401 W. Peachtree Street NW., Room 2329, Atlanta, Georgia 30365ï¿½093520, (404) 730ï¿½092170; Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee. 
I26Midwest Region, 111 N. Canal Street, Suite 1130, Chicago, Illinois 60606ï¿½097295, (312) 353ï¿½091358; Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin. 
I26Southwest Region, 101 South Main, Room 311, Temple, Texas 76501, (817) 774ï¿½091351; ï¿½28ï¿½Arkansas, Louisiana, New Mexico, Oklahoma, and Texas. 
I26Great Plains Region, 9435 Holmes, Room 210, Kansas City, Missouri 64131, Mailing address: PO Box 293, Kansas City, Missouri 64141, (816) 926ï¿½097606: Colorado, Iowa, Kansas, Missouri, Montana, Nebraska, North Dakota, South Dakota, Wyoming, and Utah. 
I26Western Region, 600 Harrison Street, Room 225, San Francisco, California 94107, (415) 744ï¿½092887; Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Territory of Guam, Trust Territories of the Pacific, and Washington. 


I80ï¿½1A2610.4
I89Requests for service. 
I11(a) Heads of USDA agencies will direct requests for audit or investigative service to the AIG/A, AIG/I, RIG/A, RIG/I, or to other OIG audit or investigation officials responsible for providing service of the type desired in the geographical area where service is desired. 
I11(b) Agency officials or other employees may, at any time, direct to the personal attention of the IG any audit or investigation matter that warrants such attention. 
I11(c) Other persons may address their communications regarding audit or investigative matters to: The Inspector General, U.S. Department of Agriculture, Ag Box 2301, Washington, DC 20250. Additionally, persons may call or write the hotline office at 202ï¿½09690ï¿½091622, 1ï¿½09800ï¿½09424ï¿½099121, TDD 202ï¿½09690ï¿½091202, or Office of Inspector General, PO Box 23399, Washington, DC 20026. Bribes involving USDA programs may be reported using the 24 hour bribery hotline number at 202 720ï¿½097257. 

I80ï¿½1A2610.5
I89Delegations of authority. 
I11(a) AIG's listed in ï¿½1A2610.2; and RIG's listed in ï¿½1A2610.3, are authorized to take whatever actions are necessary to carry out their assigned functions. This authority may be redelegated. 
I11(b) The IG reserves the right to establish audit and investigation policies, program, procedures, and standards; to allocate appropriated funds; to determine audit and investigative jurisdiction; and to exercise any of the powers or functions or perform any of the duties referenced in the above delegation. 

I95Pt. 2620
I52PART 2620_AVAILABILITY OF INFORMATION TO THE PUBLIC
S8006I18Sec.
S8010I262620.1General statement.
I262620.2Public inspection and copying.
I262620.3Requests.
I262620.4Denials.
I262620.5Appeals.

Q04I21T5Authority:  T15 U.S.C. 301 and 552; 5 U.S.C. App.
Q04I21T5Source:  T160 FR 52842, Oct. 11, 1995, unless otherwise noted.

I80ï¿½1A2620.1
I89General statement.
I11This part is issued in accordance with, and subject to, the regulations of the Secretary of Agriculture ï¿½1A1.1 through ï¿½1A1.23 (and appendix A of subpart A of part 1) of this title, implementing the Freedom of Information Act, 5 U.S.C. 552, and governs the availability of records of the Office of Inspector General (OIG) to the public upon request.

I80ï¿½1A2620.2
I89Public inspection and copying.
I115 U.S.C. 522(a)(2) requires that certain materials be made available for public inspection and copying, and that a current index of these materials be published quarterly or otherwise made available. OIG does not maintain any materials within the scope of these requirements.

I80ï¿½1A2620.3
I89Requests.
I11(a) Requests for OIG records shall be in writing in accordance with ï¿½1A1.6(a) of this title and addressed to the Assistant Inspector General for Policy Development and Resources Management (AIG/PD&RM), Office of Inspector General, U.S. Department of Agriculture, Ag Box 2310, Washington, DC 20250. The above official is hereby delegated authority to make determinations regarding such requests in accordance with ï¿½1A1.3(a)(3) of this title.
I11(b) Requests should be reasonably specific in identifying the record requested and should include the name, address, and telephone number of the requester.
I11(c) Available records may be inspected and copied in the office of the AIG/PD&RM, from 8 a.m. to 4:30 p.m. local time on regular working days or may be obtained by mail. Copies will ï¿½29ï¿½be provided upon payment of applicable fees, unless waived or reduced, in accordance with the Department's fee schedule as set forth in appendix A of subpart A of part 1 of this title.

I80ï¿½1A2620.4
I89Denials.
I11If the AIG/PD&RM determines that a requested record is exempt from mandatory disclosure and that discretionary release would be improper, the AIG/PD&RM shall give written notice of denial in accordance with ï¿½1A1.8(a) of this title.

I80ï¿½1A2620.5
I89Appeals.
I11The denial of a requested record may be appealed in accordance with ï¿½1A1.6(e) of this title. Appeals shall be addressed to the Inspector General, U.S. Department of Agriculture, Ag Box 2301, Washington, DC 20250. The Inspector General will give prompt notice of the determination concerning an appeal in accordance with ï¿½1A1.8(d) of this title.



F8008I327 CFR Ch. XXVII (1ï¿½091ï¿½0900 Edition)
I33Off. of Info. Resources Mgt., USDA


ï¿½31ï¿½I04CHAPTER XXVII_OFFICE OF INFORMATION RESOURCES MANAGEMENT, DEPARTMENT OF AGRICULTURE
I03
Q12 
I87Part
I88Page
I482700 
I49Organization and functions 
I5933
I482710 
I49Availability of information to the public 
I5933


F80103I327 CFR Ch. XXVII (1ï¿½091ï¿½0900 Edition)
I33Off. of Info. Resources Mgt., USDA

ï¿½33ï¿½I95Pt. 2700

I52PART 2700_ORGANIZATION AND FUNCTIONS
S8006I18Sec.
S8010I262700.1General statement.
I262700.2Organization.
I262700.3Functions.

Q04I21T5Authority:  T15 U.S.C. 301, 552; 7 CFR 2.81.
Q04I21T5Source:  T147 FR 39128, Sept. 7, 1982, unless otherwise noted.

I80ï¿½1A2700.1
I89General statement.
I11This part is issued in accordance with 5 U.S.C. 552(a) to provide guidance for the general public as to the organization and functions of the Office of Information Resources Management.

I80ï¿½1A2700.2
I89Organization.
I11The Office of Information Resources Management (OIRM) was established on January 12, 1982. Delegations of authority to the Director, OIRM appear at 7 CFR 2.81. The organization is comprised of five headquarters divisions, an administrative staff and three computer centers to serve the Department. The organization is headed by the Director or, in the Director's absence, by the Deputy Director or, in the absence of both, by the Director's desginee.

I80ï¿½1A2700.3
I89Functions.
I11(a) T3Director.G1T1 Provides executive direction for OIRM. Develops and recommends Departmental information resources management principles, policies, and objectives; develops and disseminates Departmental information resources management standards, guidelines, rules, and regulations necessary to implement approved principles, policies, and programs; designs, develops, implements, and revises systems, processes, work methods, and techniques to improve the management of information resources and the operational effectiveness of the Department; provides telecommunications and automated data processing services to the Department's agencies and staff offices.
I11(b) T3Deputy Director.G1T1 Assists the Director and, in the absence of the Director, serves as the Acting Director.
I11(c) T3Administrative Management Staff.G1T1 Provides support for agency management regarding budget, accounting, personnel, and other administrative matters.
I11(d) T3Planning Division.G1T1 Defines, develops, guides, and administers the Department's long-range planning process for information resources.
I11(e) T3Information Management Division.G1T1 Develops policy, standards and guidelines for collection, protection, access, use and management of information.
I11(f) T3Review and Evaluation Division.G1T1 Reviews and evaluates information resources programs and activities of Department agencies and staff offices for conformance with plans, policies, and standards.
I11(g) T3Agency Technical Services Division.G1T1 Advises and consults with and assists Department agencies and staff offices on activities related to the development and implementation of automated information systems.
I11(h) T3Operations and Telecommunications Division.G1T1 Coordinates the development and implementation of programs for ADP and telecommunications resource planning within Departmental computer centers and the National Finance Center, and for the acquisition and use of Department-wide telecommunications facilities and services.
I11(i) T3Departmental Computer Centers.G1T1 The following centers provide ADP facilities and services to agencies and staff offices of the Department.
I11(1) Washington Computer Center, 14th and Independence Ave., SW., Rm. Sï¿½09107ï¿½09South, Washington, DC 20250.
I11(2) Fort Collins Computer Center, 3825 E. Mulberry Street (P.O. Box 1206), Fort Collins, CO 80524.
I11(3) Kansas City Computer Center, 8930 Ward Parkway (P.O. Box 205), Kansas City, MO 64141. 

I95Pt. 2710
I52PART 2710_AVAILABILITY OF INFORMATION TO THE PUBLIC
S8006I18Sec.
S8010I262710.1General statement.
I262710.2Public inspection and copying.
I262710.3Indexes.
I262710.4Initial request for records.
I262710.5Appeals.
Q02I26T5T4Appendix A to PartG1T5 2710T4_List of AddressesG1T5

Q04I21T5Authority:  T15 U.S.C. 301, 552; 7 CFR 1.1ï¿½091.16.
Q04I21T5Source:  T147 FR 39129, Sept. 7, 1982, unless otherwise noted.

ï¿½34ï¿½I80ï¿½1A2710.1
I89General statement.
I11This part is issued in accordance with 7 CFR 1.4 of the U.S. Department of Agriculture regulations governing the availability of records (7 CFR 1.1ï¿½091.16 and Appendix A) under the Freedom of Information Act (5 U.S.C. 552). The Department's regulations, as supplemented by the regulations in this part, provide guidance for any person wishing to request records from the Office of Information Resources Management (OIRM).

I80ï¿½1A2710.2
I89Public inspection and copying.
I11(a) T3Background.G1T1 5 U.S.C. 552(a)(2) required that each agency make certain kinds of records available for public inspection and copying.
I11(b) T3Procedure.G1T1 Persons wishing to gain access to OIRM records should contact the Information Access & Disclosure Officer by writing to the address shown in 2710.4(b)(2).

I80ï¿½1A2710.3
I89Indexes.
I11(a) T3Background.G1T1 5 U.S.C. 552(a)(2) also required that each agency maintain and make available for public inspection and copying current indexes providing identifying information for the public with regard to any records which are made available for public inspection and copying.
I11(b) T3Procedure.G1T1 Persons wishing to get an index may contact the division or center that maintains the records. Publication of these indexes as a separate document is unnecessary and impractical.

I80ï¿½1A2710.4
I89Initial request for records.
I11(a) T3Background.G1T1 The Information Access and Disclosure Officer is authorized to:
I11(1) Grant or deny requests for OIRM records.
I11(2) Make discretionary releases of OIRM records when it is determined that the public interests in disclosure outweigh the public and/or private ones in withholding.
I11(3) Reduce or waive fees to be charged where determined to be appropriate.
I11(b) T3Procedure.G1T1 Persons wishing to request records from the Office of Information Resources Management may do so as follows:
I11(1) T3How.G1T1 Submit each initial request for OIRM records as prescribed in 7 CFR 1.3(a).
I11(2) T3Where.G1T1 Submit each initial request to the Information Access and Disclosure Officer, Office of Information Resources Management, USDA, 14th and Independence Ave., SW., Room 407ï¿½09W, Washington, DC 20250.

I80ï¿½1A2710.5
I89Appeals.
I11T3Procedure.G1T1 Any person whose initial request is denied in whole or in part may appeal that denial, in accordance with 7 CFR 1.3(e) and 1.7, to the Director, Office of Information Resources Management, by sending the appeal to the Information Access and Disclosure Officer, Office of Information Resources Management, USDA, 14th and Independence Ave., SW., Room 407ï¿½09W, Washington, DC 20250. The Director, Office of Information Resources Management, will make the determination on the appeal.
S8002
I95Pt. 2710, App. A
I85Appendix A to Part T12710G1T5T4_List of AddressesG1T5

I73Section 1. General
I21This list provides the titles and mailing addresses of officials who have custody of OIRM records. This list also identifies the normal working hours, Monday through Friday, excluding holidays, during which public inspection and copying of certain kinds of records, and indexes to those records, is permitted.
I73Section 2. List of Addresses
I25Director, Office of Information Resources Management, 14th and Independence Ave., SW., Rm. 113ï¿½09W, Washington, DC 20250; Hours: 8:30 a.m.ï¿½095:00 p.m.
I25Chief, Planning Division, OIRM, 14th and Independence Ave., SW., Rm. 446ï¿½09W, Washington, DC 20250; Hours: 8:30 a.m.ï¿½095:00 p.m.
I25Chief, Review and Evaluation Division, OIRM, 14th and Independence Ave., SW., Rm. 442ï¿½09W, Washington, DC 20250; Hours: 8:30 a.m.ï¿½095:00 p.m.
I25Chief, Agency Technical Services Division, OIRM, 14th and Independence Ave., SW., Rm. 416ï¿½09W, Washington, DC 20250; Hours: 8:30 a.m.ï¿½095:00 p.m.
I25Chief, Operations and Telecommunications Division, OIRM, 14th and Independence Ave., SW., Rm. 419ï¿½09W, Washington, DC 20250; Hours: 8:30 a.m.ï¿½095:00 p.m.
I25Chief, Information Management Division, OIRM, 14th and Independence Ave., SW., Rm. 404ï¿½09W, Washington, DC 20250; Hours: 8:30 a.m.ï¿½095:00 p.m.
ï¿½35ï¿½I25Chief, St. Louis Computer Center, OIRM, 1520 Market Street, Rm. 3441, St. Louis, MO 63101; Hours: 8:00 a.m.ï¿½094:40 p.m.
I25Director, Kansas City Computer Center, OIRM, 8930 Ward Parkway, (P.O. Box 205), Kansas City, MO 64141; Hours: 8:00 a.m.ï¿½094:45 p.m.
I25Director, Fort Collins Computer Center, OIRM, 3825 E. Mulberry Street, (P.O. Box 1206), Fort Collins, CO 80521; Hours: 8:00 a.m.ï¿½094:30 p.m. 
I25Director, Washington Computer Center, OIRM, 14th and Independence Ave., SW., Rm. Sï¿½09107ï¿½09S, Washington, DC 20250; Hours: 8:30 a.m.ï¿½095:00 p.m. 
I25Information Access and Disclosure Officer, OIRM, 14th and Independence Ave., SW., Rm. 407ï¿½09W, Washington, DC 20250; Hours: 8:30 a.m.ï¿½095:00 p.m.
S8010
F8008I327 CFR Ch. XXVIII (1ï¿½091ï¿½0900 Edition)
I33Office of Operations, USDA


ï¿½37ï¿½I04CHAPTER XXVIII_OFFICE OF OPERATIONS,
I04DEPARTMENT OF AGRICULTURE
I03
I87Part
I88Page
I482810
I49Organization and functions_Office of Operations
I5939
I482811
I49Availability of information to the public
I5939
I482812
I49Department of Agriculture guidelines for the donation of excess research equipment under 15 U.S.C. 3710(i)
I5941


F80103I327 CFR Ch. XXVIII (1ï¿½091ï¿½0900 Edition)
I33Office of Operations, USDA

ï¿½39ï¿½I95Pt. 2810
I52PART 2810_ORGANIZATION AND FUNCTIONS_OFFICE OF OPERATIONS
S8006I18Sec.
S8010I262810.1General statement.
I262810.2Organization.
I262810.3Functions.

Q04I21T5Authority:  T15 U.S.C. 301 and 552; 7 CFR 2.76.
Q04I21T5Source:  T154 FR 52013, Dec. 20, 1989, unless otherwise noted.

I80ï¿½1A2810.1
I89General statement.
I11This part is issued in accordance with 5 U.S.C. 552(a) to provide guidance for the general public as to Office of Operations (OO) organization and functions.

I80ï¿½1A2810.2
I89Organization.
I11The Office of Operations (OO) was established January 12, 1982. Delegations of authority to the Director, OO, appear at 7 CFR 2.76. The organization is comprised of six divisions and one staff located at Department headquarters. Description of the functions of these organizational units are in the following section. The organization is headed by a Director.

I80ï¿½1A2810.3
I89Functions.
I11(a) T3Director.G1T1 Provides executive direction for OO. Develops and promulgates overall policies and provides general direction, leadership, oversight, and coordination of USDA management of procurement, real and personal property activities, mail and copier management. Provides executive services to the Office of the Secretary and operates activities providing consolidated USDA administrative functions and services.
I11(b) T3Deputy Director.G1T1 Assists the Director, and in the absence of the Director, serves as Acting Director.
I11(c) T3Administrative Unit.G1T1 Provides support for agency management regarding budget, accounting, personnel, and other administrative matters.
I11(d) T3Executive Services Division.G1T1 Provides executive services to the Office of the Secretary in travel arrangements, supplies, furnishings, communications, equipment, and records. Operates the central USDA DC imprest fund.
I11(e) T3Facilities Management Division.G1T1 Operates and maintains the USDA DC headquarters building complex, including headquarters parking. Oversees management and operation of USDA buildings nationwide, and provides DC area labor services.
I11(f) T3Mail and Reproduction Management Division.G1T1 Oversees USDA mail, copier, and duplicating programs. Operates DC area central activities in these areas.
I11(g) T3Personal Property Management Division.G1T1 Oversees USDA supply, motor vehicle, and personal property programs. Operates centralized warehouse and property rehabilitation facilities.
I11(h) T3Procurement Division.G1T1 Oversees USDA procurement programs. Operates centralized purchasing operations for ADP and Washington area activities.
I11(i) T3Real Property Management Division.G1T1 Oversees USDA real property management programs.


I95Pt. 2811
I52PART 2811_AVAILABILITY OF INFORMATION TO THE PUBLIC
S8006I18Sec.
S8010I262811.1General statement.
I262811.2Public inspection and copying.
I262811.3Indexes.
I262811.4Initial requests for records.
I262811.5Appeals.
I262811.6Fee schedule.
Q02I26T5T4Appendix A to PartG1T5 2811T4_List of AddressesG1T5

Q04I21T5Authority:  T15 U.S.C. 301 and 552 (as amended); 7 CFR 1.3. 
Q04I21T5Source:  T154 FR 52014, Dec. 20, 1989, unless otherwise noted.

I80ï¿½1A2811.1
I89General statement.
I11This part is issued in accordance with 7 CFR 1.3 of the Department of Agriculture regulations governing the availability of records (7 CFR 1.1ï¿½091.23 and Appendix A) under the Freedom of Information Act (FOIA), 5 U.S.C. 552. The Department's regulations, as supplemented by the regulations in this part, provide guidance for any person wishing to request records from Office of Operations.

I80ï¿½1A2811.2
I89Public inspection and copying.
I11(a) T3Background.G1T1 5 U.S.C. 552(a)(2) requires that each agency maintain and make available for public inspection and copying certain kinds of records.
ï¿½40ï¿½I11(b) T3Procedure.G1T1 To gain access to OO records that are available for public inspection, contact the division that maintains them. See Appendix A, List of Addresses, for the location and hours of operation.

I80ï¿½1A2811.3
I89Indexes.
I11(a) T3Background.G1T1 15 U.S.C. 552(a)(2) also requires that each agency maintain and make available for public inspection and copying current indexes provided identifying information for the public with regard to any records which are made available for public inspection and copying. OO does not maintain any materials within the scope of these requirements.

I80ï¿½1A2811.4
I89Initial requests for records.
I11(a) T3Background.G1T1 The head of each OO division, each OO contracting officer, each OO leasing officer, and the OO FOIA officer is authorized to:
I11(1) Grant or deny requests for OO records.
I11(2) Make discretionary release of OO records when it is determined that the public interest in disclosure outweighs the public and/or private ones in withholding.
I11(3) Reduce or waive fees to be charged where determined to be appropriate.
I11(4) Refer a request to the OO FOIA Officer for determination. 
I11(b) T3Procedures.G1T1 Persons wishing to request records from the Office of Operations may do so as follows:
I11(1) How. Submit each initial request for OO records as prescribed in 7 CFR 1.6.
I11(2) Where. Submit each initial request to the head of the unit that maintains the records. See Appendix A, List of Addresses. Contact the FOIA Officer for guidance as needed. Or, submit the request to the FOIA Officer for forwarding to the proper officials: FOIA Officer, Office of Operations, USDA, Room 134ï¿½09W Administration Building, 14th & Independence Avenue SW., Washington, DC 20250.

I80ï¿½1A2811.5
I89Appeals.
I11T3Procedure.G1T1 Any person whose initial request is denied in whole or in part may appeal that denial, in accordance with 7 CFR 1.6(e) and 1.8, to the Director, Office of Operations, USDA, Room 113ï¿½09W Administration Building, 14th & Independence Avenue SW., Washington, DC 20250.

I80ï¿½1A2811.6
I89Fee schedule.
I11Department regulations provide for a schedule of reasonable standard charges for document search and duplication. See 7 CFR 1.2(b). Fees to be charged are set forth in 7 CFR part 1, subpart A, appendix A.
S8002
I95Pt. 2811, App. A
I85Appendix A to Part T12811G1T5T4_List of AddressesG1T5
I71T3Section 1.G1T1 General
I21This list provides the titles and mailing address of officials who have custody of OO records. The normal working hours of these offices are 8:30 a.m. to 5:00 p.m., Monday through Friday, exclusing holidays, during which public inspection and copying of certain kinds of records is permitted.
I74T3Section 2.G1T5 List of Addresses
I21All of the following addresses are located at 14th Street and Independence Avenue, Washington, DC. Address mail as follows:
Q02
I25Director, Office of Operations, USDA, Room 113ï¿½09W Administration Building, Washington, DC 20250.
I25FOIA Officer, Office of Operations, USDA, Room 134ï¿½09W Administration Building, Washington, DC 20250.
I25Chief, Administrative Unit, Office of Operations, USDA, Room 134ï¿½09W, Washington, DC 20250.
I25Chief, Executive Services Division, Office of Operations, USDA, Room 10ï¿½09A, Administration Building, Washington, DC 20250.
I25Chief, Facilities Management Division, Office of Operations, USDA, Room Sï¿½09313 South Building, Washington, DC 20250.
I25Chief, Mail and Reproduction Management Division, Office of Operations, USDA, Room 1540 South Building, Washington, DC 20250.
I25Chief, Personal Property Management Division, Office of Operations, USDA Room 1524 South Building, Washington, DC 20250.
I25Chief, Procurement Division, Office of Operations, USDA, Room 1550 South Building, Washington, DC 20250.
I25Chief, Real Property Management Division, Office of Operations, USDA, Room 1566, South Building, Washington, DC 20250.
S8010
ï¿½41ï¿½I95Pt. 2812
I52PART 2812_DEPARTMENT OF AGRICULTURE GUIDELINES FOR THE DONATION OF EXCESS RESEARCH EQUIPMENT UNDER 15 U.S.C. 3710(i)
S8006I18Sec.
S8010I262812.1Purpose.
I262812.2Eligibility.
I262812.3Definitions.
I262812.4Procedures.
I262812.5Restrictions.
I262812.6Title.
I262812.7Costs.
I262812.8Accountability and recordkeeping.
I262812.9Disposal.
I262812.10Liabilities and losses.
Q02I26T5T4Appendix A to PartG1T5 2812_T4Gift/Acceptance Agreement: Educational Institution or NonProfit Organization and the United States Department of AgricultureG1T5 

Q04I21T5Authority: T15 U.S.C. 301.
Q04I21T5Source: T160 FR 34456, July 3, 1995, unless otherwise noted.

I80ï¿½1A2812.1 
I89Purpose.
I11This part sets forth the procedures to be utilized by USDA agencies and laboratories in the donation of excess research equipment to educational institutions and non-profit organizations for the conduct of technical and scientific education and research activities as authorized by 15 U.S.C. 3710(i). Title to excess research equipment donated pursuant to 15 U.S.C. 3710(i), shall pass to the donee.

I80ï¿½1A2812.2 
I89Eligibility.
I11Eligible organizations are educational institutions or non-profit organizations involved in the conduct of technical and scientific educational and research activities.

I80ï¿½1A2812.3
I89Definitions.
I11(a) T3Cannibalization.G1T1 The dismantling of equipment for parts to repair or enhance other equipment. The residual is reported for disposal. Cannibalization is only authorized if the property value is greater when cannibalized than retention in the original condition.
I11(b) T3Education-related Federal equipment.G1T1 Equipment that is appropriate for educational purposes.
I11(c) T3Excess personal property.G1T1 Items of personal property no longer required by the controlling Federal agency. 
I11(d) T3Research equipment.G1T1 Federal property determined to be essential to conduct scientific or technical educational research.
I11(e) T3Technical and scientific education and research activities.G1T1 Non-profit tax exempt public educational institutions or government sponsored research organizations which serve to conduct technical and scientific education and research.

I80ï¿½1A2812.4
I89Procedures.
I11(a) Prior to receipt of excess personal property/equipment under this part, the donee shall enter into a gift/acceptance agreement with the donor agency. A copy of that agreement is attached as appendix A to this part.
I11(b) Each agency head will designate in writing an authorized official to approve donations of excess property/equipment under this part.
I11(c) Property targeted for donation under this part will first be screened as excess by USDA agencies through the Departmental Excess Personal Property Coordinator (DEPPC) using the PMIS/PROP system.
I11(d) Upon reporting property for excess screening, if the pertinent USDA agency has an eligible organization in mind for donation under this part, enter ``P.L. 102ï¿½09245'' in the note field. The property will remain in the excess system approximately 30ï¿½0945 days and, if no agency in USDA requests it during the excess cycle, DEPPC will send the agency a copy of the excess report stamped ``DONATION AUTHORITY TO THE HOLDING AGENCY IN ACCORDANCE WITH P.L. 102ï¿½09245.''
I11(e) Donations under this Part will be accomplished by preparing a Standard Form (SF) 122, ``Transfer Order-Excess Personal Property'' and a written justification statement (submitted by the recipient) explaining why the property is needed.
I11(f) The SFï¿½09122 should be signed by both an authorized official of the agency and the Agency Property Management Officer. The following information should also be provided.
Q02
I11(1) Name and address of Donee Institution (Ship to)
ï¿½42ï¿½I11(2) Agency name and address (holding Agency)
I11(3) Location of property
I11(4) Shipping instructions (Donee contact person)
I11(5) Complete description of property, including acquisition amount, serial no., condition code, quantity, and agency order no.
I11(6) This statement needs to be added following property descriptions. ``The property requested hereon is certified to be used for the conduct of technical and scientific education and research activities. This donation is pursuant to the provisions of Pub. L. 102ï¿½09245.''
Q02
I11(g) Once the excess personal property/equipment is physically received, the donee is required to immediately return a copy of the SFï¿½09122 to the donating agency indicating receipt of requested items. Cancellations should be reported to DEPPC so the property can be reported to the General Services Administration (GSA).
I21T5Note: T1The USDA agency shall send an informational copy of the transaction to GSA.

I80ï¿½1A2812.5 
I89Restrictions.
I11(a) The authorized official (see ï¿½1A2812.4(b)) will approve the donation of excess personal property/equipment in the following groups to educational institutions or nonprofit organizations for the conduct of technical and scientific educational and research activities.
c2,L2,i1,s25,r100  I95T4Eligible Groups
h1FSC group  h1Name
j
I0119DShips, Small Craft, Pontoons, and Floating Docks.
I0123DVehicles, Trailers and Cycles.
I0124DTractors.
I0137DAgricultural Machinery and Equipment.
I0143DPumps, Compressors.
I0148DValves.
I0158DCommunication, Detection, and Coherent Radiation Equipment.
I0159DElectrical and Electronic Equipment Components.
I0165DMedical, Dental, and Veterinary Equipment and Supplies.
I0166DInstruments and Laboratory Equipment.
I0167DPhotographic Equipment.
I0168DChemicals and Chemical Products.
I0170DGeneral Purpose Automatic Data Processing Equipment, Software Supplies, and Support Equipment.
I0174DOffice Machines and Visible Record Equipment.
e


I21T5Note: T1Requests for items in FSC Groups or Classes other than the above should be referred to the agency head for consideration and approval.
I11(b) Excess personal property/equipment may be donated for cannibalization purposes, provided the donee submits a supporting statement which clearly indicates that cannibalizing the requested property for secondary use has greater potential benefit than utilization of the item in its existing form.

I80ï¿½1A2812.6 
I89Title.
I11Title to excess personal property/equipment donated under this Part will automatically pass to the donee once the sponsoring agency receives the SFï¿½09122 indicating that the donee has received the property.

I80ï¿½1A2812.7 
I89Costs.
I11Donated excess personal property/equipment is free of charge. However, the donee must pay all costs associated with packaging and transportation, unless the sponsoring agency has made other arrangements. The donee should specify the method of shipment.

I80ï¿½1A2812.8 
I89Accountability and recordkeeping.
I11USDA requires that property requested by a donee be placed into use by the donee within a year of receipt and used for at least 1 year thereafter. Donees must maintain accountable records for such property during this time period.

I80ï¿½1A2812.9 
I89Disposal.
I11When the property is no longer needed by the donee, it may be used in support of other Federal projects or sold and the proceeds used for technical and scientific education and research activities.

I80ï¿½1A2812.10 
I89Liabilities and losses.
I11USDA assumes no liability with respect to accidents, bodily injury, illness, or any other damages or loss related to excess personal property/equipment donated under this part. The donee is advised to insure or otherwise protect itself and others as appropriate.
S8002
ï¿½43ï¿½I95Pt. 2812, App. A
I85Appendix A to Part T12812_G1T5T4Gift/Acceptance Agreement: Educational Institution or NonProfit Organization and the United States Department of AgricultureG1T5
I21Gift/Acceptance Agreement (Agreement) between (USDA Agency) and (Educational Institution or NonProfit Organizations).
I21(1) T3Purpose.G1T1 The purpose of the Agreement is to establish a relationship between the U.S. Department of Agriculture (USDA Agency) and (Educational Institution or NonProfit Organization) concerning the transfer of excess research equipment to this educational institution or nonprofit organization for the conduct of technical and scientific education and research activities. Title of ownership transfers to the recipient.
I21(2) T3Authority.G1T1 Pub. L. 102ï¿½09245, Sec. 303, amended, Section 11 of the Stevenson-Wydler Technology Innovation Act of 1980, by adding subsection (i), Research Equipment, which provides that ``the Director of the laboratory, or the head of any Federal agency or department, may give research equipment that is excess to the needs of the laboratory, agency, or department to an educational institution or non-profit organization for the conduct of technical and scientific education and research activities.''
I21(3) T3Objectives and program elements.G1T1 This Agreement is intended to provide a mechanism for the transfer of excess research equipment from USDA to the (Educational Institution or Nonprofit Organization) in accordance with the procedures set out in the regulations implementing Pub. L. 102ï¿½09245.
I21(4) T3Management.G1T1 In order to enable close collaboration, it is agreed that the (Educational Institution or NonProfit Organization) will provide to (USDA Agency) an annual inventory listing of property acquired under Pub. L. 102ï¿½09245.
I21The (USDA Agency) and (Educational Institution or NonProfit Organization) will each identify a coordinator to implement this Agreement. These coordinators shall meet when necessary to review new Federal property regulations.
I21The coordinators shall seek to resolve any disputes concerning the Agreement through good faith discussions.
I21(5) T3Effective date and revision or termination.G1T1 The Agreement shall enter into effect upon signature and shall remain in effect for 3 years. It may be extended or amended by written agreement of the parties at any time prior to its expiration or termination. The Agreement may be terminated at any time upon 60 days written notice by either party to the other. The termination of the Agreement shall not affect the validity of any property transactions under the Agreement which were initiated prior to such termination.
I73Property Coordinators
I21The property coordinators for this Agreement are:
Q02
I77Name
S8003I20(Educational Institution/NonProfit Organization)
S8002Q02
I77
S8003I20(Complete Address and Phone Number)
S8002Q02
I77Name
S8003I20(USDA Coordinator)
S8002Q02
I77
S8003I20(Complete Address and Phone Number)
S8002Q02
S8003I20Approved:
S8002Q02
I77
S8003I20(Educational Institution/NonProfit Organization)
S8002Q02
I77
S8003I20Date
S8002Q02
I77
S8003I20(USDA Agency Head)
S8002Q02
I77
S8003I20Date
S8010
F8008I327 CFR Ch. XXIX (1ï¿½091ï¿½0900 Edition)
I33Office of Energy, USDA


ï¿½45ï¿½I04CHAPTER XXIX_OFFICE OF ENERGY,
I04DEPARTMENT OF AGRICULTURE
I03
I87Part
I88Page
I482900
I49Essential agricultural uses and volumetric requirements_Natural Gas Policy Act
I5947
I482901
I49Administrative procedures for adjustments of natural gas curtailment priority
I5948



F80103I327 CFR Ch. XXIX (1ï¿½091ï¿½0900 Edition)
I33Office of Energy, USDA

ï¿½47ï¿½I95Pt. 2900
I52PART 2900_ESSENTIAL AGRICULTURAL USES AND VOLUMETRIC REQUIREMENTS_NATURAL GAS POLICY ACT
S8006I18Sec.
S8010I262900.1General.
I262900.2Definitions.
I262900.3Essential agricultural uses.
I262900.4Natural gas requirements.
I262900.6Effective date.

Q04I21T5Authority:  T1Pub. L. 95ï¿½09621, Nov. 9, 1978.
Q04I21T5Source:  T144 FR 28786, May 17, 1979, unless otherwise noted.

I80ï¿½1A2900.1
I89General. 
I11Section 401(c) of the Natural Gas Policy Act of 1978 (NGPA) requires the Secretary of Agriculture to determine the essential uses of natural gas, and to certify to the Secretary of Energy and the Federal Energy Regulatory Commission (FERC) the natural gas requirements, expressed either as volumes or percentages of use, of persons, or classes thereof, for essential agricultural uses in order to meet requirements of full food and fiber production. This rule covers establishments performing functions classed as essential agricultural uses whose natural gas supplies are distributed through the interstate pipeline systems even though such establishments may receive such gas directly from an intrastate pipeline or local distribution company. The rule provides to the Secretary of Energy (for purposes of Section 401(a) of the NGPA) and to the Federal Energy Regulatory Commission the following certifications: 
I11(a) Essential agricultural T3usesG1T1 of natural gas, expressed as classes of establishments that use gas for essential agricultural purposes; and 
I11(b) Essential agricultural current T3requirementsG1T1 of natural gas, expressed as percentages of use. 

I80ï¿½1A2900.2
I89Definitions. 
I11(a) T3Full food and fiber productionG1T1 means the entire output of food and fiber produced for the domestic market, and for export, for building of reserves, and crops for soil building or conservation. This term also includes the processing of food and fiber into stable and storable products, and the maintenance of food quality after processing. 
I11(b) T3EstablishmentG1T1 means an economic unit, generally at a single physical location where business is conducted or where service or industrial operations are performed (for example, a factory, mill, store, mine, farm, sales office, or warehouse). (Note: This is the same definition used in the Standard Industrial Classification Manual, 1972 edition). 
I11(c) T3Essential Agricultural Use EstablishmentG1T1 means any Establishment, or the portion of an Establishment, which performs (or has the capability to perform) activities specified in ï¿½1A2900.3. 
I11(d) T3Current Natural Gas RequirementsG1T1 means the amount of natural gas required by an Essential Agricultural Use Establishment to perform the activities devoted to full food and fiber production. 
Q04
S8003I20(Pub. L. 95ï¿½09621, Nov. 8, 1979, 92 Stat. 3350, 15 U.S.C. 3301 T3et seq.G1T1)
S8010
Q04I20[44 FR 28786, May 17, 1979, as amended at 46 FR 47216, Sept. 25, 1981]

I80ï¿½1A2900.3 
I89Essential agricultural uses. 
I11For purposes of Section 401(c) of the NGPA the following classes or portions of classes are certified as essential agricultural uses in order to meet the requirements of full food and fiber production: 

I82Essential Agricultural Uses 
I73Industry SIC No. and Industry Description 
I74Food and Natural Fiber Production
I2101Agricultural Production_Crops 
I2102Agricultural Production_Livestock Excluding 0272_Horses and Other Equines, and Nonfood Portions of 0279_Animal Specialties, Not Elsewhere Classified. 
I210723Crop Preparation Services for Market, Except Cotton Ginning (see fiber processing). 
I214971Irrigation Systems. 
I74Fertilizer and Agricultural Chemicals 
I74(Process and Feedstock Use Only) 
I211474Potash, Soda, and Borate Materials. 
I211475Phosphate Rock. 
I211477Sulfur. 
I212819Industrial Inorganic Chemicals, n.e.c. (Agricultural related only). 
I212865Cyclic Crudes and Cyclic Intermediates, Dyes and Organic Pigments (Agricutural related only). 
ï¿½48ï¿½I212869Industrial Organic Chemicals, n.e.c. (Agricutural related only). 
I21287Agricultural Chemicals. 
I212899Chemicals and Chemical Preparations, n.e.c. (Salt_Feed grade only). 
I213274Lime (Agricultural lime only). 
I74Food and Natural Fiber Processing-Food 
I2120Food and Kindred Products Except 2047Dog, Cat and Other Pet Food, and 2048Prepared Feeds and Feed Ingredients for Animals and Fowls, Not Elsewhere Classified. 
I212869Industrial Organic Chemicals (Monosodium Glutamate, Food-grade Citric Acid and Food-grade Enzymes only). 
I212899Chemicals and Chemical Preparations, n.e.c. (Salt for food use only).I74Animal Feeds, and Food 
I71(Process and Feedstock Use Only)
I212047Dog, Cat and Other Pet Food. 
I212048Prepared Feeds and Feed Ingredients for Animals and Fowls, Not Elsewhere Classified. 
I74Natural Fiber 
I210724Cotton Ginning. 
I212141Tobacco Stemming and Redrying. 
I212299Textile Goods, n.e.c. (wool tops, combing and converting). 
I213111Leather Tanning and Finishing. 
I74Food Quality Maintenance_Food Packaging 
I212641Paper Coating and Glazing (food related only). 
I212643Bags, Except Textile (food related only). 
I212645Die Cut Paper and Paperboard (food related only). 
I212646Pressed and Molded Pulp Goods (food related only). 
I212649Converted Paper Products (food related only). 
I212651Folding Paperboard Boxes (food related only). 
I212653Corrugated and Solid Fiber Boxes (food related only). 
I212654Sanitary Food Containers. 
I212655Fiber Cans, Tubes, Drums, and Similar Products (food related only). 
I213079Miscellaneous Plastic Products (food related only). 
I213221Glass Containers (food related only). 
I213411Metal Cans (food related only). 
I213412Metal Shipping Barrels, Drums, Kegs, and Pails (food related only).
I213466Metal Crowns and Closures (Food Related Only).
I213497Metal Foil and Leaf (food related only). 
I21Petroleum wax, synthetic petroleum wax and polyethylene wax (food grade only) as food containers. 
I74Marketing and Distribution 
I214221Farm Product Warehousing and Storage. 
I214222Refrigerated Warehousing. 
I21514Groceries and Related Products. 
I215153Farm Product Raw Materials_Grain. 
I2154Food Stores. 
I74Energy Production 
I21(1) Agricultural production on set-aside acreage or acreage diverted from the production of a commodity (as provided under the Agricultural Act of 1949) to be devoted to the production of any commodity for conversion into alcohol or hydrocarbons for use as motor fuel or other fuels; 
I21(2) Sugar refining for production of alcohol; and 
I21(3) Distillation of fuel-grade alcohol from food grains and other biomass by facilities in existence on June 30, 1980 which do not have the installed capability to burn coal lawfully, for a period ending June 29, 1985.
Q02
S8003I20(Pub. L. 95ï¿½09621, Nov. 8, 1978, 92 Stat. 3350; 15 U.S.C. 3301 T3et seq.G1T1) 
S8010
Q04I20[44 FR 28786, May 17, 1979, as amended at 45 FR 5298, Jan. 23, 1980; 45 FR 45887, 45888, July 8, 1980; 45 FR 50550, July 30, 1980; 47 FR 25320, June 11, 1982; 48 FR 43670, Sept. 26, 1983; 49 FR 37733, Sept. 26, 1984]

I80ï¿½1A2900.4 
I89Natural gas requirements. 
I11For purposes of Section 401(c), NGPA, the natural gas requirements for each Essential Agricultural Use Establishment, whether such Essential Agricultural Use Establishment is in existence on the effective date of this rule or comes into existence thereafter, are certified to be 100 percent of Current Natural Gas Requirements. 

I80ï¿½1A2900.6 
I89Effective date. 
I11This rule shall become effective on May 14, 1979. 

I95Pt. 2901
I52PART 2901_ADMINISTRATIVE PROCEDURES FOR ADJUSTMENTS OF NATURAL GAS CURTAILMENT PRIORITY
S8006I18Sec.
S8010I262901.1Purpose and scope.
I262901.2Definitions.
I262901.3Oral presentation.
I262901.4Interpretations.
I262901.5Modifications and rescissions.
I262901.6Exceptions and exemptions.
I262901.7Review of denials.
I262901.8Judicial review.
I262901.9Effective date.

Q04
ï¿½49ï¿½I21T5Authority:  T1Secs. 502, 507. Pub. L. 95ï¿½09621, 92 Stat. 3397, 3405, Nov. 9, 1978.
Q04I21T5Source:  T144 FR 55803, Sept. 28, 1979, unless otherwise noted.

I80ï¿½1A2901.1
I89Purpose and scope.
I11The purpose of this part 2901 is to provide procedures for the making of certain adjustments to the Secretary of Agriculture's Essential Agricultural Uses and Requirements regulations in accordance with section 502(c) of the Natural Gas Policy Act of 1978, in order to prevent special hardship, inequity, or an unfair distribution of burdens. The procedures in this part 2901 apply to any person seeking an interpretation of, modification of, rescission of, exception of, or exemption from the Essential Agricultural Uses and Requirements regulations in part 2900 of this chapter. 

I80ï¿½1A2901.2 
I89Definitions.
I11(a) T3PersonG1T1 means any individual, firm, sole proprietorship, partnership, association, company, joint venture or corporation.
I11(b) T3DirectorG1T1 means the Director of the Office of Energy, U.S. Department of Agriculture.
I11(c) T3SecretaryG1T1 means the Secretary of the U.S. Department of Agriculture.
I11(d) T3AdjustmentG1T1 means an interpretation, modification, rescission of, exception to or exemption from the Essential Agricultural Uses and Requirements regulations, part 2900 of this chapter. 
I11(e) T3NGPAG1T1 means the Natural Gas Policy Act of 1978, Pub. L. 95ï¿½09621.
I11(f) T3PetitionerG1T1 means any person seeking an adjustment under this part 2901.

I80ï¿½1A2901.3 
I89Oral presentation.
I11Any person seeking an adjustment under this part 2901 shall be given an opportunity to make an oral presentation of data, views and arguments in support of the request for an adjustment, provided that a request to make an oral presentation is submitted in writing with the request for the adjustment. An official of the Department of Agriculture shall preside at such oral presentation.

I80ï¿½1A2901.4 
I89Interpretations.
I11(a) T3Request for an interpretation.G1T1 (1) Any person seeking an interpretation of the Essential Agricultural Uses and Requirements regulations in part 2900 shall file a formal written request with the Director. The request should contain a full and complete statement of all relevant facts pertaining to the circumstances, act or transaction that is the subject of the request and to the action sought, and should state the special hardship, inequity, or unfair distribution of burdens that will be prevented by the interpretation sought and why the interpretation is consistent with the purposes of NGPA. The Director shall publish a notice in the T4Federal RegisterG1T1 advising the public that a request for an interpretation has been received and that written comments will be accepted with respect thereto, if received within 20 days of the notice. The T4Federal RegisterG1T1 notice will provide that copies of the request for interpretation from which confidential information has been deleted in accordance with paragraph (a)(2) of this section may be obtained from the petitioner.
I11(2) If the petitioner wishes to claim confidential treatment for any information contained in the request or other documents submitted under this part 2901, such person shall file together with the document a second copy of the document from which has been deleted the information for which such person wishes to claim confidential treatment. The petitioner shall indicate in the original document that it is confidential or contains confidential information and may file a statement specifying the justification for non-disclosure of the information for which non-disclosure is sought. The Director shall consider such requests, and subject to the Freedom of Information Act, 5 U.S.C. 552 and other applicable laws and regulations, shall treat such information as confidential.
I11(b) T3Investigations.G1T1 The Director may initiate an investigation of any statement in a request and utilize in his evaluation any relevant facts obtained in such investigation. The Director may accept submissions from third persons relevant to any request for interpretation provided that the petitioner ï¿½50ï¿½is afforded an opportunity to respond to all such submissions. In evaluating a request for interpretation, the Director may consider any other source of information.
I11(c) T3Applicability.G1T1 Any interpretation issued hereunder shall be issued on the basis of the information provided on the request, as supplemented by other information brought to the attention of the Director during the consideration of the request. The interpretation shall, therefore, depend for its authority on the accuracy of the factual statement and may be relied upon only to the extent that the facts of the actual situation correspond to those upon which the interpretation was based. 
I11(d) T3Issuance of an interpretation.G1T1 Upon consideration of the request for interpretation and other relevant information received or obtained by the Director, the Director may issue a written interpretation. A copy of the written interpretation shall be provided to FERC and the Secretary of Energy. Notice of the issuance of the written interpretation shall be published in the T4Federal Register.G1T1 The granting of a request for issuance of an interpretation shall be considered final agency action for purposes of judicial review under ï¿½1A2901.8.
I11(e) T3Denial of an interpretation.G1T1 An interpretation shall be considered denied for purpose of review of such denial under ï¿½1A2901.7 only if:
I11(1) The Director notifies the petitioner in writing that the request is denied and that an interpretation will not be issued; or
I11(2) The Director does not respond to a request for an interpretation, by (i) issuing an interpretation, or (ii) giving notice of when an interpretation will be issued within 45 days of the date of receipt of the request, or within such extended time as the Director may prescribe by written notice within the 45-day period.
I11(f) For purposes of this part 2901 the word T3interpretationG1T1 shall not be deemed to include a simple clarification of an actual or purported ambiguity in part 2900. The Director reserves the right to determine whether a request involves simple clarification and shall advise the requester of his decision.

I80ï¿½1A2901.5
I89Modifications and rescissions.
I11(a) T3Request for modification or rescission.G1T1 (1) Any person seeking a modification or a rescission of the Essential Agricultural Uses and Requirements regulations of part 2900 shall file a formal written request with the Director. The request shall contain a full and complete statement of all relevant facts pertaining to the circumstance, act or transaction that is the subject of the request and to the action sought. The request should state the special hardship, inequity or unfair distribution of burdens that will be prevented by making the modification or rescission.
I11(2) If the petitioner wishes to claim confidential treatment for any information contained in the request or other documents submitted under this part 2901, such person shall file together with the document a second copy of the document from which has been deleted the information for which such person wishes to claim confidential treatment. The petitioner shall indicate in the original document that it is confidential or contains confidential information and may file a statement specifying the justification for non-disclosure of the information for which non-disclosure is sought. The Director shall consider such requests, and subject to the Freedom of Information Act, 5 U.S.C. 552 and other applicable laws and regulations, shall treat such information as confidential.
I11(3) The request shall be filed as a petition for rulemaking and treated in accordance with the procedures, as applicable, of 7 CFR part 1, subpart B.
I11(b) T3Institution of rulemaking.G1T1 Upon consideration of the request for modification or rescission and other relevant information received or obtained by the Director, the Director may institute rulemaking proceedings in accordance with the Administrative Procedures Act 5 U.S.C. 551 T3et seq.G1T1 and applicable regulations. 
I11(c) T3Denial of a modification or rescission.G1T1 If the Director (1) denies the request for modification or rescission in writing by notifying the petitioner that he does not intend to institute rulemaking proceedings as proposed and stating the reasons therefor, or (2) does not respond to a request for a ï¿½51ï¿½modification or rescission in accordance with paragraph (b) of this section or (3) notifies the petitioner in writing that the matter is under continuing consideration and that no decision can be made at that time because of the inadequacy of available information, changing circumstances or other reasons as set forth therein, within 45 days of the date of the receipt thereof, or within such extended time as the Director may prescribe by written notice within that 45-day period, the request shall be considered denied for the purpose of review of such denial under ï¿½1A2901.7. 

I80ï¿½1A2901.6
I89Exceptions and exemptions.
I11(a) T3Request for exception or exemption.G1T1 (1) Any person seeking an exception or exemption from the Essential Agricultural Uses and Requirements regulations in part 2900 shall file a formal written request with the Director. The request shall contain a full and complete statement of all relevant facts pertaining to the circumstance, act, or transaction that is the subject of the request and to the action sought. The request should state the special hardship, inequity or unfair distribution of burdens that will be prevented by making the exception or exemption. The Director shall publish a notice in the T4Federal RegisterG1T1 advising the public that a request for an exception or exemption has been received and that written comments will be accepted with respect thereto if received within 20 days of the notice. The T4Federal RegisterG1T1 notice will provide that copies of the request from which confidential information has been deleted in accordance with paragraph (a)(2) of this section may be obtained from the petitioner. The Petitioner shall be afforded an opportunity to respond to such submissions.
I11(2) If the petitioner wishes to claim confidential treatment for any information contained in the request or other documents submitted under this part 2901, such person shall file together with the document a second copy of the document from which has been deleted the information for which such person wishes to claim confidential treatment. The petitioner shall indicate in the original document that it is confidential or contains confidential information and may file a statement specifying the justification for non-disclosure of the information for which non-disclosure is sought. The Director shall consider such requests, and subject to the Freedom of Information Act, 5 U.S.C. 552 and other applicable laws and regulations, shall treat such information as confidential.
I11(b) T3Decision and order.G1T1 Upon consideration of the request for an exception or exemption and other relevant information received or obtained during the proceedings, the Director shall issue an order granting or denying the request. The Director shall publish a notice in the T4Federal RegisterG1T1 of the issuance of a decision and order on the request. The granting of a request for an exception or exemption shall be considered final agency action for purposes of judicial review under ï¿½1A2901.8.
I11(c) T3Denial of an exception or exemption.G1T1 A request for an exception or exemption shall be considered denied for purposes of review of such denial under ï¿½1A2901.7 only if: 
I11(1) The Director has notified the petitioner in writing that the request is denied under paragraph (b) of this section; or
I11(2) The Director does not respond to a request for an exception or exemption by (i) granting the request for an exception or exemption under paragraph (b) of this section or (ii) giving notice of when a decision will be made within 45 days of the receipt of the request, or with such extended time as the Director may prescribe by written notice within the 45-day period.

I80ï¿½1A2901.7
I89Review of denials.
I11(a) T3Request for review.G1T1 (1) Any person aggrieved or adversely affected by a denial of a request for any interpretation under ï¿½1A2901.4 may request a review of the denial by the Secretary, within 30 days from the date of the denial.
I11(2) Any person aggrieved or adversely affected by a denial of a request for a modification or rescission under ï¿½1A2901.5, may request a review of the denial by the Secretary within 30 days from the date of the denial.
I11(3) Any person aggrieved or adversely affected by a denial of a request for an exception or an exemption under ï¿½52ï¿½ï¿½1A2901.6, may request a review of the denial by the Secretary within 30 days from the date of the denial. 
I11(b) T3Procedures.G1T1 Any request for review under ï¿½1A2901.7(a) shall be in writing and shall set forth the specific ground upon which the request is based. There is no final agency action for purposes of judicial review under ï¿½1A2901.8 until that request has been acted upon. If the request for review has not been acted upon within 30 days after it is received, the request shall be deemed to have been denied. That denial shall then constitute final agency action for the purpose of judicial review under ï¿½1A2901.8.

I80ï¿½1A2901.8
I89Judicial review.
I11Any person aggrieved or adversely affected by a final agency action taken on a request for an adjustment under this section may obtain judicial review in accordance with section 506 of the Natural Gas Policy Act of 1978.

I80ï¿½1A2901.9
I89Effective date.
I11This rule shall become effective on October 29, 1979. 



F8008I327 CFR Ch. XXX (1ï¿½091ï¿½0900 Edition)
I33Office of Chief Financial Officer, USDA


ï¿½53ï¿½I04CHAPTER XXX_OFFICE OF 
I04THE CHIEF FINANCIAL OFFICER, 
I04DEPARTMENT OF AGRICULTURE
I03
I87Part
I88Page
I483010
I46[Reserved]
Q02
I483011
I49Availability of information to the public
I5955
I483015
I49Uniform Federal assistance regulations
I5956
I483016
I49Uniform administrative requirements for grants and cooperative agreements to State and local governments
I59106
I483017
I49Governmentwide debarment and suspension (nonprocurement) and governmentwide requirements for drugï¿½09free workplace (grants)
I59133
I483018
I49New restrictions on lobbying
I59155
I483019
I49Uniform administrative requirements for grants and agreements with institutions of higher education, hospitals, and other non-profit organizations
I59167
I483052
I49Audits of States, local governments, and non-profit organizations
I59194

F80103I327 CFR Ch. XXX (1ï¿½091ï¿½0900 Edition)
I33Office of Chief Financial Officer, USDA

ï¿½55ï¿½I52PART 3011_AVAILABILITY OF INFORMATION TO THE PUBLIC
S8006I18Sec.
S8010I263011.1General statement.
I263011.2Public inspection and copying.
I263011.3Indexes.
I263011.4Initial requests for records.
I263011.5Appeals.
I263011.6Fee schedule.

Q04I21T5Authority:  T15 U.S.C. 301 and 522; 7 CFR 1.3.
Q04I21T5Source:  T154 FR 51869, Dec. 19, 1989, unless otherwise noted.

I80ï¿½1A3011.1 
I89General statement.
I11This part is issued in accordance with 7 CFR 1.3 of the Department of Agriculture regulations governing the availability of records (7 CFR 1.1_1.23 and Appendix A) under the Freedom of Information Act (5 U.S.C. 552, as amended). These regulations supplement the Department's regulations by providing guidance for any person wishing to request records from the Office of Finance and Management (OFM).

I80ï¿½1A3011.2 
I89Public inspection and copying.
I11(a) T3Background.G1T1 5 U.S.C. 552(a)(2) requires each agency to maintain and make available for public inspection and copying certain kinds of records.
I11(b) T3Procedure.G1T1 To gain access to OFM records that are available for public inspection, contact the Freedom of Information Act Officer by writing to the address shown in ï¿½1A3011.4(b) of this title.


I80ï¿½1A3011.3
I89Indexes.
I115 U.S.C. 552(a)(2) also requires that each agency maintain and make available for public inspection and copying current indexes providing identifying information for the public with regard to any records which are made available for public inspection and copying. OFM does not maintain any materials within the scope of these requirements.

I80ï¿½1A3011.4
I89Initial requests for records.
I11(a) T3Background.G1T1 The Freedom of Information Act Officer is authorized to: 
I11(1) Grant or deny requests for OFM records,
I11(2) Make discretionary release of OFM records when the benefit to the public in releasing the document outweighs any harm likely to result from disclosure,
I11(3) Reduce or waive fees to be charged where determined to be appropriate.
I11(b) T3Procedures.G1T1 This part provides the titles and mailing address of officials who are authorized to release records to the public. The normal working hours of these offices are 8:30 a.m. to 5:00 p.m., local time, Monday through Friday, excluding holidays, during which public inspection and copying of certain kinds of records is permitted. Persons wishing to request records from the Office of Finance and Management may do so by submitting each initial written request for OFM records to the appropriate OFM official shown below:
I11(1) For records held at the Washington, DC Headquarters units, submit initial requests to the Freedom of Information Act Officer, Office of Finance and Management, USDA, 14th and Independence Ave., SW., Room 117ï¿½09W, Administration Building, Washington, DC 20250ï¿½099000.
I11(2) For records held at the National Finance Center in New Orleans, Louisiana, submit initial requests to the Freedom of Information Act Officer, National Finance Center, OFM, USDA, 13800 Old Gentilly Road, Building 350, (P.O. Box 60,000, New Orleans, LA 70160), New Orleans, Louisiana 70129.
Q02I10If the requester is unable to determine the official to whom the request should be addressed, it should be submitted to the Headquarters Freedom of Information Act Officer who will refer such requests to the appropriate officials.

I80ï¿½1A3011.5
I89Appeals.
I11Any person whose initial request is denied in whole or in part may appeal that denial, in accordance with 7 CFR 1.6(e) and 1.8, to the Director, Office of Finance and Management, USDA, Room 117ï¿½09W, Administration Building, 14th and Independence Ave., Washington, DC 20250ï¿½099000.

I80ï¿½1A3011.6
I89Fee schedule.
I11Departmental regulations provide for a schedule of reasonable standard charges for document search and duplication. See 7 CFR 1.2(b). Fees to be charged are set forth in 7 CFR part 1, subpart A, Appendix A.


ï¿½56ï¿½I95Pt. 3015
I52PART 3015_UNIFORM FEDERAL ASSISTANCE REGULATIONS 


I86Subpart A_General
S8006I18Sec. 
S8010I263015.1Purpose and scope of this part. 
I263015.2Applicability. 
I263015.3Conflicting policies and deviations. 
I263015.4Special restrictive terms. 

I86Subpart B_Cash Depositories 
I263015.10Physical segregation and eligibility. 
I263015.11Separate bank accounts. 
I263015.12Moneys advanced to recipients. 
I263015.13Minority and women-owned banks. 

I86Subpart C_Bonding and Insurance 
I263015.15General. 
I263015.16Construction and facility improvement. 
I263015.17Fidelity bonds. 
I263015.18Source of bonds. 

I86Subpart D_Record Retention and Access Requirements 
I263015.20Applicability. 
I263015.21Retention period. 
I263015.22Starting date of retention period. 
I263015.23Microfilm. 
I263015.24Access to records. 
I263015.25Restrictions to public access. 

I86Subpart E_Waiver of ``Single'' State Agency Requirements 
I263015.30Waiver of ``single'' State agency requirements. 

I86Subpart F_Grant Related Income 
I263015.40Scope. 
I263015.41General program income. 
I263015.42Proceeds from sale of real property and from sale of equipment and supplies acquired for use. 
I263015.43Royalties and other income earned from a copyrighted work. 
I263015.44Royalties or equivalent income earned from patents or from inventions. 
I263015.45Other program income. 
I263015.46Interest earned on advances of grant funds. 

I86Subpart G_Cost-Sharing or Matching 
I263015.50Scope. 
I263015.51Acceptable contributions and costs. 
I263015.52Qualifications and exceptions. 
I263015.53Valuation of donated services. 
I263015.54Valuation of donated supplies and loaned equipment or space. 
I263015.55Valuation of donated equipment, buildings, and land. 
I263015.56Appraisal of real property. 

I86Subpart H_Standards for Financial Management Systems 
I263015.60Scope. 
I263015.61Financial management standards. 
S8006I86Subpart I[Reserved] 
S8010
I86Subpart J_Financial Reporting Requirements 
I263015.80Scope and applicability. 
I263015.81General. 
I263015.82Financial status report. 
I263015.83Federal cash transactions report. 
I263015.84Request for advance or reimbursement. 
I263015.85Outlay report and request for reimbursement for construction programs. 

I86Subpart K_Monitoring and Reporting Program Performance 
I263015.90Scope. 
I263015.91Monitoring by recipients. 
I263015.92Performance reports. 
I263015.93Significant developments. 
I263015.94Site visits. 
I263015.95Waivers, extensions and enforcement actions. 

I86Subpart L_Payment Requirements
I263015.100Scope.
I263015.101General.
I263015.102Payment methods.
I263015.103Withholding payments.
I263015.104Requesting advances or reimbursements.
I263015.105Payments to subrecipients.

I86Subpart M_Programmatic Changes and Budget Revisions
I263015.110Scope and applicability.
I263015.111Cost principles.
I263015.112Approval procedures.
I263015.113Programmatic changes.
I263015.114Budgets_general.
I263015.115Budget revisions.
I263015.116Construction and nonconstruction work under the same grant, subgrant, or cooperative agreement.

I86Subpart N_Grant and Subgrant Closeout, Suspension and Termination
I263015.120Closeout.
I263015.121Amounts payable to the Federal government.
I263015.122Violation of terms.
I263015.123Suspension.
I263015.124Termination.
I263015.125Applicability to subgrants.
S8006I86Subparts Oï¿½09P [Reserved]
S8010
ï¿½57ï¿½I86Subpart Q_Application for Federal Assistance
I263015.150Scope and applicability.
I263015.151Authorized forms.
I263015.152Preapplication for Federal assistance.
I263015.153Notice of preapplication review action.
I263015.154Application for Federal assistance (nonconstruction programs).
I263015.155Application for Federal assistance (construction programs).
I263015.156Application for Federal assistance (short form).
I263015.157Authorized form for nongovernmental organizations.
I263015.158Competition in the awarding of discretionary grants and cooperative agreements. 

I86Subpart R_Property
I263015.160Scope and applicability.
I263015.161Additional requirements.
I263015.162Title to real property, equipment and supplies.
I263015.163Real property.
I263015.164Statutory exemptions for equipment and supplies.
I263015.165Rights to require transfer of equipment.
I263015.166Use of equipment.
I263015.167Replacement of equipment.
I263015.168Disposal of equipment.
I263015.169Equipment management requirements.
I263015.170Damage, loss, or theft of equipment.
I263015.171Unused supplies.
I263015.172Federal share of real property, equipment, and supplies.
I263015.173Using or returning the Federal share.
I263015.174Subrecipient's share.
I263015.175Intangible personal property.

I86Subpart S_Procurement
I263015.180Scope and applicability.
I263015.181Standards of conduct.
I263015.182Open and free competition.
I263015.183Access to contractor records.
I263015.184Equal employment opportunity.

I86Subpart T_Cost Principles
I263015.190Scope.
I263015.191Governments.
I263015.192Institutions of higher education.
I263015.193Other non-profit organizations.
I263015.194For-profit organizations.
I263015.195Subgrants and cost-type contracts.
I263015.196Costs allowable with approval.

I86Subpart U_Miscellaneous
I263015.200Acknowledgement of support on publications and audiovisuals.
I263015.201Use of consultants.
I263015.202Limits on total payments to the recipient.
I263015.203[Reserved]
I263015.204T4Federal RegisterG1T1 publications.
I263015.205General provisions for grants and cooperative agreements with institutions of higher education, other nonprofit organizations, and hospitals. 

I86Subpart V_Intergovernmental Review of Department of Agriculture Programs and Activities
I263015.300Purpose.
I263015.301Definitions.
I263015.302Applicability.
I263015.303Secretary's general responsibilities.
I263015.304Federal interagency coordination.
I263015.305State selection of programs and activities.
I263015.306Communication with State and local elected officials.
I263015.307State comments on proposed Federal financial assistance and direct Federal development.
I263015.308Processing comments.
I263015.309Accommodation of intergovernmental concerns.
I263015.310Interstate situations.
I263015.311Simplification, consolidation, or substitution of State plans.
I263015.312Waivers.
Q02I26T5T4Appendix A to PartG1T5 3015T4_DefinitionsG1T5
I26T5T4Appendix B to PartG1T5 3015T4_OMB Circular Aï¿½09G1T5128, T4``Audits of State and Local Governments''G1T5

Q04I21T5Authority:  T15 U.S.C. 301, Subpart I, 31 U.S.C. 7505, unless otherwise noted.
Q04I21T5Source:  T146 FR 55639, Nov. 10, 1981, unless otherwise noted. 

I56Subpart A_General 


I80ï¿½1A3015.1
I89Purpose and scope of this part. 

I11(a)(1) This part establishes USDA-wide uniform requirements for the administration of open-ended entitlement grants and specifies the set of principles for determining allowable costs under USDA grants and cooperative agreements to State and local governments, universities, non-profit and for-profit organizations as set forth in OMB Circulars Aï¿½0987, Aï¿½0921, Aï¿½09122, and 48 CFR 31.2, respectively. This Part also contains the general provisions that ï¿½58ï¿½apply to all grants and cooperative agreements made by USDA.

I11(2) Additionally, this part establishes intergovernmental review provisions required by Executive Order 12372 for any programs listed in the T4Federal RegisterG1T1 as covered, and policy on competition in awarding discretionary grants and cooperative agreements. 


I11(3) Rules for nonentitlement grants and cooperative agreements to State and local governments are found in part 3016. 
I11(4) Rules for nonentitlement grants and cooperative agreements to institutions of higher education, hospitals, and other non-profit organizations are found in part 3019.
I11(b) These rules supersede and take precedence over any individual USDA agency regulations and directives dealing with the administration of grants and cooperative agreements to the extent such regulations and directives are inconsistent with this part, unless such inconsistency is based on a statutory provision or an exception has been obtained from OMB. (See ï¿½1A3015.3.) Definitions for the terms used in this part are set forth in Appendix A. Definitions for the implementation of standard audit requirements for State and local governments and Indian Tribal governments are contained in Subpart I_Audits. 
I11(c) The purpose of this part is to simplify, standardize, and improve the administration of USDA grants and cooperative agreements. 
I11(d) Responsibility for developing and interpreting the material for this part and in keeping it up-to-date is assigned to the Office of the Deputy Director, Finance, a component of the Office of Operations and Finance (O&F), which reports to the Assistant Secretary for Administration. 


Q04I20[46 FR 55639, Nov. 10, 1981, as amended at 53 FR 8043, Mar. 11, 1988; 60 FR 44124, Aug. 24, 1995; 62 FR 45949, Aug. 29, 1997]


I80ï¿½1A3015.2
I89Applicability. 
I11(a) T3Grants and cooperative agreements.G1T1 This part applies to USDA grants and cooperative agreements. For each substantive provision in this part, either the words of the provision itself or other words in the same subpart tell whether the provision applies to subgrants. Exemptions to this part may be applicable to certain kinds of recipients. (See paragraph (d) of this section.) 
I11(b) T3Terminology applicable to this part.G1T1 This part's substantive rules are the same for grants and cooperative agreements. Many of the rules are also the same for subgrants. Therefore, certain simplified terminology is used in the text. Specifically in all portions of this part: 
I11(1) Each provision that applies to T3grantsG1T1 also applies to T3cooperative agreements,G1T1 even though the latter term does not appear in the provisions. 
I11(2) Each provision that applies to T3recipients of grantsG1T1 applies to T3recipients of cooperative agreements,G1T1 even though the latter term does not appear in the provision. 
I11(3) The term T3recipientG1T1 refers equally to recipients of grants and recipients of cooperative agreements. 
I11(4) The term T3awarding agencyG1T1 refers equally to a USDA agency that awards a grant and to one that awards a cooperative agreement. 
I11(5) The term T3subgrantG1T1 refers equally to certain awards under grants and to the same kinds of awards under cooperative agreements. 
I11(c) T3Public institutions of higher education and hospitals.G1T1 Grants, cooperative agreements and subgrants awarded to institutions of higher education and hospitals operated by a government are subject only to the provisions of this part that apply to non-governmental organizations.
I11(d) T3Recipients to which this part does not automatically apply.G1T1 This part does not automatically apply to the kinds of recipients listed below unless other conditions set forth in the grant, cooperative agreement, subgrant, or specific subpart in this part make all or specified portions apply: 
I11(1) Foreign governments or organizations, 
I11(2) International organizations, such as the United Nations,
I11(3) Agencies or instrumentalities of the Federal government, and 
I11(4) Individuals.
I11(5) State and local governments, except open-ended entitlements to State and local governments. 
ï¿½59ï¿½I11(6) Institutions of higher education, hospitals and other non-profit organizations except open-ended entitlements to those entities.
I11(e) T3Collaborative arrangements.G1T1 (1) Where permitted by the terms of the award, a recipient may enter into collaborative arrangements with other organizations to jointly carry out activities with grant or cooperative agreement funds. In this kind of situation, the arrangement between the recipient and each collaborating organization is subject to the rules in this part that apply to subgrants awarded by the recipients. (See the example shown in ï¿½1A3015.195.)
I11(2) This paragraph (e) does not apply to arrangements where the organizations receive an award jointly. In this case, they are not a recipient and subrecipient but, as the award notice states, joint recipients.
Q04I20[46 FR 55639, Nov. 10, 1981, as amended at 53 FR 8044, Mar. 11, 1988; 60 FR 44124, Aug. 24, 1995]

I80ï¿½1A3015.3 
I89Conflicting policies and deviations. 
I11(a) T3Statutory provisions.G1T1 Federal statutes that apply to some USDA grant programs may contain provisions that conflict with this part. Those statutory provisions take precedence over this part. 
I11(b) T3Nonstatutory provisions.G1T1 USDA awarding agencies occasionally develop grant provisions that are inconsistent with this part. USDA attempts to keep these provisions to a minimum by internal procedures that require these provisions to be justified to appropriate officials of USDA and OMB. If the conflicting provisions are of long-term and general applicability, O&F may require that the awarding agency (1) publish the conflicting provision as a notice in the T4Federal RegisterG1T1 and (2) give the public an opportunity to comment before making the regulations final. 
I11(c) T3Nonstatutory provisions-subgrants.G1T1 If a provision of a subgrant conflicts with this part, the recipient is considered as violating the provisions of the grant, unless the subgrant provision is authorized in writing, by the awarding agency. 
I11(d) T3OMB exceptions.G1T1 In some cases, OMB grants exceptions from the requirements of the Circulars, when permissible under existing laws. In those instances where a program receives an exception to a particular provision of a Circular, the exception takes precedence over this part. 

I80ï¿½1A3015.4
I89Special restrictive terms. 
I11(a) Occasionally an awarding agency, or a recipient awarding a subgrant, may find that a particular recipient: 
I11(1) Is financially unstable, 
I11(2) Has a history of poor performance, or 
I11(3) Has a management system that does not meet the standards in this part.
Q02I10In these cases the awarding agency may impose special conditions that are more restrictive than otherwise permitted by this part. If so, the awarding agency must tell the recipient in writing why it is imposing the special conditions and what corrective action is needed. 
I11(b) At the time an awarding agency imposes a special grant condition under paragraph (a) of this section, the awarding agency, through O&F, shall notify OMB and other interested parties. 
I11(c) At the time a recipient imposes a special restrictive subgrant condition under paragraph (a) of this section, it must notify the awarding agency, giving full particulars. The awarding agency, through O&F, shall then notify OMB and other interested parties. 
I11(d) A special restrictive grant or subgrant condition under paragraph (a) of this section is considered consistent with this part. 

I56Subpart B_Cash Depositories 

I80ï¿½1A3015.10
I89Physical segregation and eligibility. 
I11Except as provided in ï¿½1A3015.11, awarding agencies shall not impose grant or subgrant conditions which: 
I11(a) Require the recipient to use a separate bank account for the deposit of grant or subgrant funds, or 
I11(b) Establish any eligibility requirements for banks or other financial institutions in which recipients deposit grant or subgrant funds. 

ï¿½60ï¿½I80ï¿½1A3015.11
I89Separate bank accounts. 
I11A separate bank account shall be required when applicable letter of credit agreements provide that funds will not be drawn until the recipient's checks are presented to the bank for payment. 

I80ï¿½1A3015.12
I89Moneys advanced to recipients. 
I11Any moneys advanced to recipients which are subject to the control or regulation of the United States or any of its officers, agents, or employees (public moneys as defined in Treasury Circular 176, as amended), must be deposited in a bank with Federal Deposit Insurance Corporation (FDIC) insurance coverage and the balance exceeding the FDIC coverage must be collaterally secured. 

I80ï¿½1A3015.13
I89Minority and women-owned banks. 
I11Consistent with the national goal of expanding opportunities for minority business enterprises, recipients, and subrecipients are encouraged to use minority and women-owned banks. Upon request, awarding agencies will furnish a listing of minority and women-owned banks to recipients. 

I56Subpart C_Bonding and Insurance 

I80ï¿½1A3015.15
I89General. 
I11In administering grants, subgrants, and cooperative agreements, recipients shall observe their regular requirements and practices with respect to bonding and insurance. No additional bonding and insurance requirements, including fidelity bonds, shall be imposed by the provisions of the grant, subgrant, or cooperative agreement except as provided in ï¿½1A3015.16 through 3015.18. 

I80ï¿½1A3015.16
I89Construction and facility improvement. 
I11(a) T3Scope.G1T1 This section covers requirements for bid guarantees, performance bonds, and payment bonds when the recipients will contract or subcontract for construction or facility improvement (including alterations and renovations of real property) under a grant or subgrant. 
I11(b) T3Bids and contracts or subcontracts of $100,000 or less.G1T1 Unless otherwise required by law, the recipients shall follow its own requirements and practices relating to bid guarantees, performance bonds, and payment bonds. 
I11(c) T3Bids and contracts or subcontracts exceeding $100,000.G1T1 Unless otherwise required by law, the recipient may follow its own regular policy and requirements if the USDA awarding agency has decided that the Federal government's interest will be adequately protected. If this decision has not been made, the minimum requirements shall be as follows: 
I11(1) A bid guarantee from each bidder equivalent to 5 percent of the bid price; 
I11(2) A performance bond on the part of the contractor for 100 percent of the contract price; and 
I11(3) A payment bond on the part of the contractor for 100 percent of the contract price.

I80ï¿½1A3015.17
I89Fidelity bonds.
I11(a) If the recipient is not a unit of government, the awarding agency may require the recipient to carry adequate fidelity bond coverage where the absence of coverage for the grant-supported activity is considered as created an unacceptable risk.
I11(b) If the subrecipient is not a unit of government, the awarding agency or the recipient may require that the subrecipient carry adequate fidelity bond coverage where the absence of coverage for the subgrant-supported activity is considered as creating an unacceptable risk.

I80ï¿½1A3015.18
I89Source of bonds.
I11Any bonds required under ï¿½1A3015.16(c) (1) through (3) or ï¿½1A3015.17 shall be obtained from companies holding certificates of authority as acceptable sureties (31 CFR part 223). A list of these companies is published annually by the Department of the Treasury in its Circular 570. 

I56Subpart D_Record Retention and Access Requirements

I80ï¿½1A3015.20
I89Applicability.
I11(a) This subpart applies to all financial records, supporting documents, ï¿½61ï¿½statistical records and other records of recipients, which are:
I11(1) Required to be maintained by the provisions of a USDA grant or cooperative agreement, or
I11(2) Otherwise reasonably considered as pertinent to a USDA grant or cooperative agreement.
I11(b) This subpart does not apply to the records of contractors and subcontractors under grants, subgrants and cooperative agreements. For a requirement to place a provision concerning these records in certain kinds of contracts, see Subpart S of this part.

I80ï¿½1A3015.21
I89Retention period.
I11(a) Except as provided in paragraphs (b) and (c) of this section, records shall be kept for 3 years from the starting date specified in ï¿½1A3015.22.
I11(b) If any litigation, claim, negotiation, audit or other action involving the records has been started before the end of the 3-year period, the records shall be kept until all issues are resolved, or until the end of the regular 3-year period, whichever is later.
I11(c) In order to avoid dual recordkeeping, awarding agencies may make special arrangements for recipients to keep any records which are continuously needed for joint use. The awarding agency shall request a recipient to transfer records to its custody when the awarding agency decides that the records possess long-term retention value. When the records are transferred to or maintained by the awarding agency the 3-year retention requirement shall not apply to the recipient.
I11(d) Records for nonexpendable property acquired in whole or in part, with Federal funds shall be retained for three years after its final disposition.

I80ï¿½1A3015.22
I89Starting date of retention period.
I11(a) T3General.G1T1 The retention period starts from the date of the submission of the final expenditure report or, where USDA grant support is continued or renewed at annual or other intervals, the 3-year retention period for the records of each funding period starts on the day the recipient submits to USDA its annual or final expenditure report for that period. If an expenditure report has been waived, the 3-year retention period starts on the day the report would have been due. Exceptions to this paragraph are contained in paragraphs (b) through (d) of this section.
I11(b) T3Equipment records.G1T1 The 3-year retention period for the equipment records required by Subpart R starts from the date of the equipment's disposition, replacement, or transfer at the direction of the awarding agency.
I11(c) T3Records for income transactions after grant or subgrant support.G1T1 (1) In cases where USDA requires that program income (as defined in Appendix A) be applied to costs incurred after expiration or termination of grant or subgrant support, the 3-year retention period for these cost records starts from the end of the recipient's fiscal year in which the costs are incurred.
I11(2) Where USDA requires the disposition of copyright royalties or other program income earned after expiration or termination of grant or subgrant support, the 3-year retention period for those income records starts from the end of the recipient's fiscal year in which the income was earned. (See Subpart F, ï¿½1A3015.44.)
I11(d) T3Indirect cost rate proposals, cost allocation plans, etc._G1T1(1) T3Applicability.G1T1 This paragraph applies to the following types of documents and their supporting records:
I11(i) Indirect cost rate computations or proposals;
I11(ii) Cost allocation plans; and
I11(iii) Any similar accounting computations of the rate at which a particular group of costs is chargeable (such as computer usage chargeback rates or composite fringe benefit rates).
I11(2) T3If submitted for negotiation.G1T1 If the Federal government requires submission of the proposal; plan, or other computation for negotiation of the rate chargeable for particular costs, then the 3-year retention period for the plan, proposal or other computation and the supporting records starts from the date of such submission.
I11(3) T3If not submitted for negotiation.G1T1 If the Federal government does not require submission of the proposal, plan, or other computation for negotiation of the rate chargeable for particular costs, then the 3-year retention period ï¿½62ï¿½for the proposal, plan, or other computation and the supporting records starts from the end of the fiscal year covered by such proposal, plan, or other computation.

I80ï¿½1A3015.23
I89Microfilm.
I11Copies made by microfilming, photocopying, or similar methods may be substituted for the original records.

I80ï¿½1A3015.24
I89Access to records.
I11(a) T3Records of recipients.G1T1 USDA and the Comptroller General of the United States, or any of their authorized representatives, shall have the right of access to any books, documents, papers, or other records of the recipient which are pertinent in a specific USDA award in order to make audit, examination, excerpts, and transcripts.
I11(b) T3Records of subrecipients.G1T1 USDA and the Comptroller General of the United States, and the recipient, or any of their authorized representatives, shall have the right of access to any books, documents, papers, or other records of the subrecipient which are pertinent to a specific USDA grant or cooperative agreement, in order to make audit, examination, excerpts, and transcripts.
I11(c) T3Expiration of right of access.G1T1 The rights of access in this section shall not be limited to the required retention period but shall last as long as the records are kept.

I80ï¿½1A3015.25
I89Restrictions to public access.
I11Unless required by law, no awarding agency shall impose grant or subgrant conditions which limit public access to records covered by this subpart, except when the awarding agency determines that such records must be kept confidential and would have been excepted from disclosure pursuant to USDA's ``Freedom of Information'' regulations if the records had belonged to USDA (7 CFR 1.1ï¿½091.16). 

I56Subpart E_Waiver of ``Single'' State Agency Requirements

I80ï¿½1A3015.30
I89Waiver of ``single'' State agency requirements.
I11Section 204 of the Intergovernmental Cooperation Act of 1968 authorizes Federal agencies to waive ``single'' State agency requirements on request of the Governor or other duly constituted State authorities.
I11(a) T3Approval authority.G1T1 The awarding agency has approval authority for waiver requests, and shall handle them as quickly as feasible. Approval should be given whenever possible.
I11(b) T3Refusal procedures.G1T1 When it is necessary to refuse a request for waiver of the ``single'' State agency requirements under section 204, the awarding agency shall, through O&F, advise OMB that the request cannot be granted. Such advice should indicate the reasons for the denial of the request. Notification, through O&F, to OMB shall occur prior to informing the State of the refusal.

I56Subpart F_Grant Related Income

I80ï¿½1A3015.40
I89Scope.
I11This subpart contains policies and requirements related to program income and interest and other investment income earned on advances of grant funds. Appendix A defines the term ``program income.'' There are five categories of program income covered in this subpart. Each is treated in a separate section. The categories are:
I11(a) General program income;
I11(b) Proceeds from sale of real property and from sale of equipment and supplies acquired for use;
I11(c) Royalties and other income earned from a copyrighted work;
I11(d) Royalties or equivalent income earned from patents or inventions; and
I11(e) Income after the period of grant or subgrant support not otherwise treated.

I80ï¿½1A3015.41
I89General program income.
I11(a) T3Applicability.G1T1 This section applies to ``general program income'' as defined in Appendix A.
I11(b) T3Use.G1T1 (1) General program income shall be retained by the recipient and used in accordance with one or a combination of the alternatives in paragraphs (c), (d), and (e) of this section, as follows: The alternative in paragraph (c) may always be used by recipients and must be used if neither of the other two alternatives is permitted by the provisions of the grant award. The alternatives in paragraph (d) or (e) of ï¿½63ï¿½this section may be used only if expressly permitted by the provisions of the grant award. In specifying alternatives that may be used, the provisions of the grant award may distinguish between income earned by the recipient and income earned by subrecipients and between the sources, kinds, or amounts of income.
I11(2) The provisions of a subgrant award may restrict the use of general program income earned by the subrecipient to only one or some of the alternatives permitted by the provisions of the grant, but the alternative in paragraph (c) of this section shall always be permitted.
I11(c) T3Deduction alternative.G1T1 (1) Under this alternative, the income is used for allowable costs of the project or program. If there is a cost-sharing or matching requirement, costs supported by the income may not count toward satisfying that requirement. Therefore, the maximum percentage of Federal cost-sharing is applied to the net amount determined by deducting the income from total allowable costs and third party in-kind contributions. The income shall be used for current costs unless the awarding agency authorizes the income to be used in a later period.
I11(2) To illustrate this alternative, assume a project in which the recipient incurs $100,000 of allowable costs and receives no third party in-kind contributions. If the recipient earns $10,000 in general program income and this alternative applies, that $10,000 must be deducted from the $100,000 before applying the maximum percentage of Federal cost-sharing. If that percentage is 90 percent, the most that could be paid to the recipient would therefore be $81,000 (90 percent times $90,000).
I11(d) T3Cost-sharing or matching alternative.G1T1 (1) Under this alternative, the income is used for allowable costs of the project or program but, in this case, the costs supported by the income may count toward satisfying a cost-sharing or matching requirement. Therefore, the maximum percentage of Federal cost-sharing is applied to total allowable costs and third party in-kind contributions. The income shall be used for current costs unless the awarding agency authorizes its use in a later period.
I11(2) To illustrate this alternative, assume the same situation as in paragraph (c)(2) of this section. Under this alternative, the 90 percent maximum percentage of Federal cost-sharing would be applied to the full $100,000, and $90,000 could therefore be paid to the recipient.
I11(e) T3Additional costs alternative.G1T1 Under this alternative, the income is used for costs which are in addition to the allowable costs of the project or program but which nevertheless further the objectives of the Federal statute under which the grant was made. Provided that the costs supported by the income further the broad objectives of that statute, they need not be of a kind that would be permissible as charges to Federal funds. Examples of purposes for which the income may be used are:
I11(1) Expanding the project or program.
I11(2) Continuing the project or program after grant or subgrant support ends.
I11(3) Supporting other projects or programs that further the broad objectives of the statute.
I11(4) Obtaining equipment or other assets needed for the project or program or for other activities that further the statute's objectives.

I80ï¿½1A3015.42
I89Proceeds from sale of real property and from sale of equipment and supplies acquired for use.
I11The following kinds of program income shall be governed by Subpart R of this part:
I11(a) Proceeds from the sale of real property purchased or constructed under a grant or subgrant.
I11(b) Proceeds from the sale of equipment and supplies created or purchased under a grant or subgrant and intended primarily for use in the grant or subgrant-supported project or program rather than for sale or rental.

I80ï¿½1A3015.43
I89Royalties and other income earned from a copyrighted work.
I11(a) This section applies to royalties, license fees, and other income earned by a recipient from a copyrighted work developed under the grant or subgrant. Income of that kind is covered by this ï¿½64ï¿½section whether a third party or the recipient acts as the publisher, seller, exhibitor, or performer of the copyrighted work. In some cases the recipient incurs costs to earn the income but does not charge these costs to USDA grant funds, to required cost-sharing or matching funds, or to other program income. Costs of that kind may be deducted from the gross income in order to determine how much must be treated as program income.
I11(b) The provisions of the grant award govern the disposition of income subject to this section. If the provisions of the grant award do not treat this kind of income, there are no USDA requirements governing its disposition. A recipient is not prohibited from imposing requirements of its own on the disposition of this kind of income which is earned by its subrecipients provided those requirements are in addition to, and not inconsistent with, any requirements imposed by the provisions of the grant award.

I80ï¿½1A3015.44
I89Royalties or equivalent income earned from patents or from inventions.
I11Disposition of royalties or equivalent income earned on patents or inventions arising out of activities assisted by a grant or subgrant shall be governed by the provisions of the grant or subgrant agreement. If the agreement does not provide for the disposition of the royalties or equivalent income, the disposition shall be in accordance with the recipient's own policies. 

I80ï¿½1A3015.45
I89Other program income.
I11(a) This section applies to program income not treated elsewhere in this part which subsequently results from an activity supported by a grant or subgrant but which does not accrue until after the period of grant or subgrant support. An example is proceeds from the sale or rental of a residual inventory of merchandise created or purchased by a grant-supported workshop during the period of support.
I11(b) The provisions of the grant award govern the disposition of income subject to this section. If the provisions do not treat this kind of income, there are no USDA requirements governing its disposition. A recipient may impose requirements of its own on the disposition of this kind of income which is earned by its subrecipients provided those requirements are in addition to and not inconsistent with any requirements imposed by the provisions of the grant award. 

I80ï¿½1A3015.46
I89Interest earned on advances of grant funds.
I11(a) Except when exempted by Federal statute (see paragraph (b) of this section for the principal exemption), recipients shall remit to the Federal government any interest or other investment income earned on advances of USDA grant funds. This includes any interest or investment income earned by subrecipients and cost-type contractors on advances to them that result from advances of USDA grant funds to the recipient. Unless the recipient receives other instructions from the responsible USDA awarding agency, the recipient shall remit the amount due by check or money order payable to the awarding agency. This requirement may not be administratively waived.
I11(b) In accordance with the Intergovernmental Cooperation Act of 1968 (42 U.S.C. 4213), States, as defined in the Act, shall not be accountable to the Federal government for interest or investment income earned by the State itself, or by its subrecipents, where this income is attributable to grants-in-aid, as defined in the Act.\1\T1N

I28NG2T11G1T1ï¿½1A``State'' is defined in the Act to include any agency or instrumentality of a State, and the definition does not exclude a hospital or institution of higher education which is such an agency or instrumentality. ``Grant-in-aid'' is defined in the Act to exclude payments under research and development contracts or grants which are awarded directly and on similar terms to all qualifying organizations, whether public or private. (42 U.S.C. 4201)

I11(c) Recipients are cautioned that they are subject to the provisions of Subpart L for minimizing the time between the transfer of advances and their disbursement. Those provisions apply even if there is no accountability to the Federal government for interest or other investment income earned on the advances.

ï¿½65ï¿½I56Subpart G_Cost-Sharing or Matching

I80ï¿½1A3015.50
I89Scope.
I11This subpart contains rules reflecting Federal requirements for cost-sharing or matching. These rules apply whether cost-sharing or matching is required by Federal statute, awarding agency regulations, or by other provisions established by the specific grant agreement.

I80ï¿½1A3015.51
I89Acceptable contributions and costs.
I11A cost-sharing or a matching requirement may be satisfied after qualifications and exceptions are met in ï¿½1A3015.52 and by satisfying either or both of the following:
I11(a) Allowable costs incurred by the recipient or by any subrecipient under the grant or subgrant. This includes allowable costs supported by non-Federal grants or by cash donations from non-Federal third parties. Allowable costs shall be determined in accordance with the cost principles set forth in Subpart T.
I11(b) The value of third party in-kind contributions applicable to the same period when a cost-sharing or matching requirement applies. 

I80ï¿½1A3015.52
I89Qualifications and exceptions.
I11(a) T3Costs supported by other Federal grants.G1T1 (1) A cost-sharing or a matching requirement shall not be met by costs supported by another Federal grant, except as provided by Federal statute. This exception however, does not apply to costs supported by general program income earned from a contract awarded under another Federal grant.
I11(2) For the purpose of this part, funds provided under General or Countercyclical Revenue Sharing Programs (31 U.S.C. 1221 T3et seq.G1T1 and 42 U.S.C. 6721 T3et seq.G1T1) are not considered Federal grants. Therefore, allowable costs supported by these funds may be used to satisfy a cost-sharing or a matching requirement.
I11(b) T3Costs or contributions applied towards other Federal cost-sharing requirements.G1T1 Recipient costs or the value of third party in-kind contributions shall not count towards satisfying a cost-sharing or matching requirement of a USDA grant if they are or will be counted towards satisfying a cost-sharing or matching requirement of another Federal grant, a Federal procurement contract, or any other award of Federal funds.
I11(c) T3Costs financed by general program income.G1T1 Costs financed by general program income as defined in Appendix A shall not count towards satisfying a cost-sharing or matching requirement of a USDA grant supporting the activity unless the provisions of the grant award expressly permit the income to be used for cost-sharing or matching purposes. (This is the alternative for use of general program income described in ï¿½1A3015.41).
I11(d) T3Services or property financed by income earned by contractors.G1T1 Contractors under a grant or subgrant may earn income from the activities carried out under the contract in addition to the amounts earned from the party awarding the contract. No costs of services or property supported by this income may count toward satisfying a cost-sharing or matching requirement unless other provisions of the grant award expressly permit this kind of income to be used to meet the requirement.
I11(e) T3Records.G1T1 In order to count cost and third party in-kind contributions towards satisfying a cost-sharing or a matching requirement, there must be verification and accurate documentation from the records of recipients or cost-type contractors. These records shall show how the value placed on third party in-kind contributions was decided. Special standards and procedures for calculating these contributions are discussed in paragraph (f) of this section. Volunteer services, to the extent possible, shall be supported by the same pay procedures and rates employed by the organization when paying for similar work performed by its personnel.
I11(f) T3Special standards for third party in-kind contributions_G1T1(1) T3Contributions to recipients or cost-type contractors.G1T1 A third party in-kind contribution to a recipient or cost-type contractor may count towards satisfying a cost-sharing or matching requirement only where, if the recipient or cost-type contractor ï¿½66ï¿½were to pay for it, the payment would be an allowable cost.
I11(2) T3Contributions to fixed-price contractors.G1T1 A third party in-kind contribution to a fixed-price contractor may count towards satisfying a cost-sharing or matching requirement only if it results in:
I11(i) An increase in the services or property provided under the contract (without additional cost to the recipient or subrecipient), or
I11(ii) A cost savings to the recipient or subrecipient.

I80ï¿½1A3015.53
I89Valuation of donated services.
I11(a) T3Volunteer services.G1T1 Unpaid services provided to a recipient by an individual shall be valued at rates consistent with the rates normally paid for similar work in the recipient organization. If there is no similar work in the recipient organization, the rate of pay for volunteer services should be consistent with those regular rates paid for similar work in the same labor market. In either case, a reasonable amount for fringe benefits may be included in the valuation.
I11(b) T3Employees of other organizations.G1T1 When an employer, other than a recipient or cost-type contractor, furnishes the services of an employee without cost to perform the employee's normal line of work, the services shall be valued at the employee's regular rate of pay, exclusive of the employer's fringe benefits and overhead cost. If the services are in a different line of work, paragraph (a) of this section shall apply.

I80ï¿½1A3015.54
I89Valuation of donated supplies and loaned equipment or space.
I11(a) If a third party donates supplies, the contributions shall not exceed the cost of the supplies to the donor or the market value of the supplies, at the time of the donation, whichever is less.
I11(b) If a third party donates the use of equipment or space in a building but retains the title, the contribution shall be valued at the fair rental rate of the equipment or space.

I80ï¿½1A3015.55
I89Valuation of donated equipment, buildings, and land.
I11When a third party donates equipment, buildings or land, and the title is given to the recipient, the treatment of this donated property shall depend upon the purpose of the grant or subgrant as follows:
I11(a) T3Awards for capital expenditures.G1T1 If the purpose of the grant or subgrant is to assist the recipient in acquiring property, such as equipment, buildings, and land, then the market value of that property at the time of donation may be counted as cost-sharing or matching.
I11(b) T3Other awards.G1T1 If the nature of the grant or subgrant is not for the purpose of acquiring property, the following rules shall apply:
I11(1) If approval is obtained from the awarding agency, the market value at the time of donation of the equipment or buildings and the fair rental rate of the donated land may be counted as cost-sharing or matching. In the case of a subgrant, the provisions of the USDA grant should require that the approval be obtained from the awarding agency as well as the recipient. In all cases, the approval may be given only if a purchase of the equipment or rental of the land would be approved as an allowable direct cost.
I11(2) If approval is not obtained under paragraph (b)(1) of this section, no amount shall be counted for donated land. Instead, only depreciation or use allowances may be counted for donated equipment and buildings and treated as costs incurred by the recipient. They are computed and allocated (usually as indirect costs) in accordance with the cost principles specified in Subpart T of this part. They will thus be handled in the same way as depreciation or use allowances for purchased equipment and buildings. The amount of depreciation or use allowances for donated equipment and buildings is based on the property's market value at the time it was donated.

I80ï¿½1A3015.56
I89Appraisal of real property.
I11In some cases, it will be necessary to establish the market value of land or a building or the fair rental rate of land or of space in a building. In these cases, the awarding agency must require that ï¿½67ï¿½the market value or fair rental rate be set by an independent appraiser (or by a representative of the U.S. General Services Administration, if available) and that the value or rate be certified by a responsible official of the party to which the property or its use is donated. This requirement must also be imposed by the recipient on subgrants.

I56Subpart H_Standards for Financial Management Systems

I80ï¿½1A3015.60
I89Scope.
I11This subpart contains standards for financial management systems of recipients. No additional financial management standards or requirements shall be imposed by awarding agencies. Awarding agencies will, however, provide recipients with suggestions and assistance on establishing or improving financial management systems when such assistance is needed or requested.

I80ï¿½1A3015.61
I89Financial management standards.
I11The following standards shall be met by recipients and subrecipients in managing their financial management system.
I11(a) T3Financial reporting.G1T1 Complete, accurate, and current disclosure of the financial results of each USDA sponsored project or program shall be made in accordance with the financial reporting requirements set forth in the grant or subgrant. When a USDA awarding agency requires reporting on an accrual basis, the recipient shall not be required to establish an accrual accounting system, but shall develop such accrual data for its reports on the basis of an analysis of the documentation on hand.
I11(b) T3Accounting records.G1T1 The source and application of funds shall be readily identified by the continuous maintenance of updated records. Records, as such, shall contain information pertaining to grant or subgrant awards, authorizations, obligations, unobligated balances, assets, outlays, and income. When the recipient is a governmental entity, the records shall also contain liabilities.
I11(c) T3Internal control.G1T1 Effective control over and accountability for all USDA grant or subgrant funds, real and personal property assets shall be maintained. Recipients shall adequately safeguard all such property and shall ensure that it is used solely for authorized purposes. In cases where projects are not 100 percent Federally funded, recipients must have effective internal controls to assure that expenditures financed with Federal funds are properly chargeable to the grant supported project.
I11(d) T3Budgetary control.G1T1 The actual and budgeted amounts for each grant or subgrant shall be compared. If appropriate, or required by the awarding agency, financial information shall be related to performance and unit cost data. When unit cost data is required, estimates based on available documentation may be accepted whenever possible.
I11(e) T3Advance payments.G1T1 There shall be specific procedures established to minimize the time elapsing between the advance of Federal grant or subgrant funds and their subsequent disbursement by the recipient. When advances are made by a letter of credit method, the recipients shall make drawdowns as close as possible to the time of making the disbursements. This same procedure shall be followed by recipients who advance cash to subrecipients to ensure that timely fiscal transactions and reporting requirements are conducted.
I11(f) T3Allowable costs.G1T1 Established procedures shall be used for determining the reasonableness, allowability, and allocability of costs in accordance with the cost principles prescribed by Subpart T of this part and the provisions of the grant award.
I11(g) T3Source documentation.G1T1 Accounting records shall be supported by source documentation. These documentations include, but are not limited to, cancelled checks, paid bills, payrolls, contract and subgrant award documents.
I11(h) T3Audit resolution.G1T1 A systematic method shall be employed by each recipient to assure timely and appropriate resolution of audit findings and recommendations. 

S8006I56Subpart I[Reserved]
S8010
ï¿½68ï¿½I56Subpart J_Financial Reporting Requirements

I80ï¿½1A3015.80 
I89Scope and applicability.
I11(a) This subpart prescribes requirements and forms for recipients to report financial information to USDA and to request grant payments when a letter of credit is not used.
I11(b) This subpart need not be applied by recipients in dealing with their subrecipients. Recipients are encouraged not to impose on subrecipients more burdensome requirements than USDA imposes on them.

I80ï¿½1A3015.81 
I89General.
I11(a) Except as provided in paragraphs (d) and (e) of this section, recipients shall use only the forms specified in ï¿½1A3015.82 through 3015.85, and such other forms as may be authorized by OMB for: 
I11(1) Submitting grant financial reports to awarding agencies, or 
I11(2) Requesting grant payments when letters of credit or automatic prescheduled Treasury check advances are not used.
I11(b) Recipients shall follow all applicable standard instructions issued by OMB for use in connection with the forms specified in ï¿½1A3015.82 through 3015.85. Awarding agencies may not issue substantive supplementary instructions that are inconsistent with this subpart or impose additional requirements on recipients without the approval of O&F and OMB. However, awarding agencies may shade out or instruct the recipient to disregard any line item that the awarding agency finds unnecessary for its decision-making purposes.
I11(c) Recipients shall not be required to submit more than one original and two copies of the forms required under this subpart. 
I11(d) Awarding agencies may provide computer outputs to recipients to expedite or contribute to the accuracy of reporting. Awarding agencies may accept the required information from recipients in machine readable form or computer printouts instead of prescribed formats.
I11(e) When an awarding agency determines that a recipient's accounting system does not meet the standards for financial management systems contained in Subpart H of this part, it may require more frequent financial reports or more detail (or both) upon written notice to the recipient (without regard to ï¿½1A3015.4) until such time as the standards are met. 
I11(f) Awarding agencies may waive any report required by this subpart, if not needed.
I11(g) Awarding agencies may extend the due date for any financial report upon receiving a justified request from the recipient. The recipient should not wait until the due date if an extension is to be requested, but should submit the request as soon as the need becomes known. Failure by a recipient to submit a report by its due date may result in severe enforcement actions by USDA. These may include withholding of further grant payments, suspension or termination of the grant, etc. Therefore recipients are urged to submit reports on time.

I80ï¿½1A3015.82
I89Financial status report.
I11(a) T3Form.G1T1 Recipients shall use Standard Form 269, Financial Status Report, to report the status of funds for all nonconstruction projects or programs.
I11(b) T3Accounting basis.G1T1 Unless specified in the provisions of the grant or subgrant each recipient shall report program outlays and program income on the same accounting basis, i.e., cash or accrual, which it uses in its accounting system.
I11(c) T3Frequency.G1T1 The awarding agency may prescribe the frequency of the report for each project or program. However, the report shall not be required more frequently than quarterly except as provided in ï¿½1A3015.4, 3015.81(e), or by statute. If the awarding agency does not specify the frequency of the report, it shall be submitted annually. Upon expiration or termination of the grant or cooperative agreement, if a period of time remains not covered by a periodic report (i.e., a quarterly, semi-annual or annual report), a final report shall be required.
I11(d) T3Due date.G1T1 When reports are required on a quarterly or semiannual basis, they shall be due 30 days after the reporting period. When required on an annual basis, they shall be due 90 days after the end of the grant or ï¿½69ï¿½agreement period. In addition, final reports as defined in ï¿½1A3015.82(c) shall be due 90 days after the expiration or termination of grant or agreement support, except in those instances where an extension has been granted.
I11(e) T3Final reports.G1T1 (1) Final reports (i.e., the last report submitted) must not show any unpaid obligations.
I11(2) If the recipient will still have unpaid obligations when the final report is due, the recipient shall submit a provisional final report (showing the unpaid obligations) by the due date, and a true final report when all obligations have been paid. When submitting a provisional final report, the recipient shall tell the awarding agency when it expects to submit a true final report.
I11(3) As provided in ï¿½1A3015.81(f), awarding agencies may waive provisional final reports.

I80ï¿½1A3015.83
I89Federal cash transactions report.
I11(a) T3Form.G1T1 (1) For grants or cooperative agreements paid by letters of credit (or Treasury check advances) through any USDA payment office, the recipient shall submit to USDA a Standard Form 272, Federal Cash Transactions Report, and, when necessary, its continuation sheet, SFï¿½09272a. Recipients under the Regional Disbursing Office (RDO) system shall not be required to submit a SFï¿½09272. For these recipients, awarding agencies shall use information contained in the Request for Payment to monitor recipient cash balances and to get disbursement information.
I11(2) The SFï¿½09272 will be used by USDA to monitor cash advanced to recipients and to obtain disbursement or outlay information from recipients for each grant or cooperative agreement. The format of the report may be adapted, as appropriate, when reporting is to be accomplished with the assistance of automatic data processing equipment, provided that the identical information is submitted.
I11(b) T3Forecasts of Federal cash requirements.G1T1 Awarding agencies may require that forecasts of Federal cash requirements be provided in the ``Remarks'' section of the report.
I11(c) T3Cash in hands of subrecipients or contractors.G1T1 When considered necessary and feasible by the responsible USDA awarding agency, recipients may be required to:
I11(1) Show in the ``Remarks'' section of the report the amount of cash advances exceeding three days needs in the hands of their subrecipients or contractors, and 
I11(2) Provide short narrative explanations or actions taken by the recipient to reduce such excess balances.
I11(d) T3Frequency and due date.G1T1 Recipients shall submit the report no later than 15 working days following the end of each quarter. However, the USDA payment office may require recipients receiving advances of one million dollars or more per year to submit a report within 15 working days following the end of each month. Awarding agencies may waive the requirement for submission of the SFï¿½09272 when monthly advances do not exceed $10,000 per recipient, provided that such advances are monitored through other forms contained in this subpart, or if, in the awarding agency's opinion, the recipient's accounting controls are adequate to minimize excessive Federal advances.

I80ï¿½1A3015.84
I89Request for advance or reimbursement.
I11(a) T3Advance payments.G1T1 Recipients of nonconstruction grants or cooperative agreements shall request Treasury check advance payments on Standard Form 270, Request for Advance or Reimbursement. This form is not used for letter of credit drawdowns or predetermined automatic advance payments.
I11(b) T3Reimbursements.G1T1 Recipients of nonconstruction grants or cooperative agreements shall request reimbursement on Standard Form 270, Request for Advance or Reimbursement (for reimbursement request under construction grants or cooperative agreements, see ï¿½1A3015.85).
I11(c) The frequency for submitting payment requests on SFï¿½09270 is treated in ï¿½1A3015.104.

I80ï¿½1A3015.85
I89Outlay report and request for reimbursement for construction programs.
I11(a) T3Construction grants paid by reimbursement method.G1T1 (1) Requests for reimbursement under construction grants shall be submitted on Standard Form ï¿½70ï¿½271, Outlay Report and Request for Reimbursement for Construction Programs. Awarding agencies may, however, prescribe the Request for Advance or Reimbursement form specified in ï¿½1A3015.84 instead of this form.
I11(2) The frequency for submitting reimbursement requests is treated in ï¿½1A3015.104.
I11(b) T3Construction grants paid by letter of credit or Treasury check advance.G1T1 (1) When a construction grant or a cooperative agreement is paid by letter of credit or Treasury check advances, the recipient shall report its outlays to the awarding agency using Standard Form 271, Outlay Report and Request for Reimbursement for Construction Programs. The awarding agency will provide any necessary special instructions. However, frequency and due date shall be governed by ï¿½1A3015.82 (c) and (d).
I11(2) When a construction grant or cooperative agreement is paid by Treasury check advances based on periodic requests from the recipient, the advances shall be requested on the form specified in ï¿½1A3015.84.
I11(3) The awarding agency may substitute the Financial Status Report specified in ï¿½1A3015.82 for the Outlay Report and Request for Reimbursement.
I11(c) T3Accounting basis.G1T1 The accounting basis for the Outlay Report and Request for Reimbursement for Construction Programs shall be governed by ï¿½1A3015.82(b).

I56Subpart K_Monitoring and Reporting Program Performance

I80ï¿½1A3015.90
I89Scope.
I11This subpart establishes procedures for monitoring and reporting program performance of recipients. These procedures place responsibility on recipients to manage the day-to-day operations of their grant and subgrant supported activities.

I80ï¿½1A3015.91
I89Monitoring by recipients.
I11Recipients shall monitor the performance of grant and subgrant-supported activities to assure that performance goals are being achieved. Recipient monitoring shall cover each program, function, or activity.

I80ï¿½1A3015.92
I89Performance reports.
I11(a) T3Nonconstruction.G1T1 The awarding agency shall, if it decides that performance information available from subsequent applications contains sufficient information to meet its programmatic needs, require the recipient to submit a performance report only upon expiration or termination of grant support. Unless waived by the awarding agency this report will be due on the same date as the final Financial Status Report (as provided in ï¿½1A3015.82 (d) and (e)).
I11(1) Recipients shall submit annual peformance reports unless the awarding agency requires quarterly or semi-annual reports or unless covered under paragraph (a) of this section. Annual reports shall be due 90 days after the grant year; quarterly or semi-annual reports shall be due 30 days after the reporting period. The final performance report shall be due 90 days after the expiration or termination of grant support. If a justified request is submitted by a recipient, the awarding agency may extend the due date for any performance report. Additionally, requirements for unnecessary performance reports may be waived by the awarding agency.
I11(2) Performance reports shall contain, for each grant, brief information on the following:
I11(i) A comparison of actual accomplishments to the goals established for the period. Where the output of the project can be readily expressed in numbers, a computation of the cost per unit of output may be required if that information will be useful.
I11(ii) The reasons for slippage if established goals were not met.
I11(iii) Additional pertinent information including, when appropriate, analysis and explanation of cost overruns or high unit costs.
I11(3) Recipients shall not be required to submit more than the original and two copies of performance reports.
I11(4) Recipients shall adhere to the standards in paragraph (a) of this section in prescribing performance reporting requirements for subrecipients.
I11(b) T3Construction.G1T1 For the most part, on-site technical inspections and certified percentage-of-completion data ï¿½71ï¿½are relied on heavily by awarding agencies to monitor progress under construction grants and subgrants. The awarding agency shall require additional formal performance reports only when considered necessary, and never more frequently than quarterly.

I80ï¿½1A3015.93
I89Significant developments.
I11Events may occur between the scheduled performance reporting dates which have significant impact upon the grant or subgrant supported activity. In such cases, the recipient shall inform the awarding agency as soon as the following types of conditions become known:
I11(a) Problems, delays, or adverse conditions which will materially impair the ability to meet the objective of the award. This disclosure shall include a statement of the action taken, or contemplated, and any assistance needed to resolve the situation.
I11(b) Favorable developments which enable meeting time schedules and goals sooner or at less cost than anticipated or producing more beneficial results than originally planned.

I80ï¿½1A3015.94
I89Site visits.
I11The awarding agency shall make site visits as frequently as practicable to:
I11(a) Review program accomplishments and manage control systems.
I11(b) Provide such technical assistance as may be required.

I80ï¿½1A3015.95
I89Waivers, extensions and enforcement actions.
I11(a) T3Reports from recipients.G1T1 USDA may waive any performance report required by this subpart if not needed.
I11(b) T3Reports from subrecipients.G1T1 The recipient may waive any performance report from a subrecipient when not needed. The recipient may extend the due date for any performance report from a subrecipient if the recipient will still be able to meet its performance reporting obligations to the USDA awarding agency.

I56Subpart L_Payment Requirements

I80ï¿½1A3015.100
I89Scope.
I11This subpart prescribes the basic standards and methods under which a USDA awarding agency will make grant payments to recipients, and recipients will make subgrant payments to their subrecipients.

I80ï¿½1A3015.101
I89General.
I11Methods and procedures for making payments to recipients shall minimize the time elapsing between the transfer of funds and the recipient's disbursements.

I80ï¿½1A3015.102
I89Payment methods.
I11(a) T3Non-construction.G1T1 (1) Letters of credit will be used to pay USDA recipients when all the following conditions exist:
I11(i) There is or will be a continuing relationship between the recipient and the USDA awarding agency for at least a 12 month period and the total amount of advances to be received within that period from the awarding agency is $120,000 or more per year.
I11(ii) The recipient has established or demonstrated to the USDA awarding agency the willingness and ability to establish procedures that will minimize the time elapsing between the transfer of funds from the Treasury and their disbursement by the recipient.
I11(iii) The recipient's financial management system meets the standards for fund control and accountability prescribed in Subpart H of this part.
I11(2) Advances by Treasury check will be used, in accordance with Treasury Circular No. 1075, when the recipient does not meet the requirements in paragraph (a)(1)(i) of this section but does meet the requirements in paragraphs (a)(1) (ii) and (iii) of this section.
I11(3) Reimbursement by Treasury check shall be the preferred method when the recipient does not meet the requirements specified in either paragraph (a)(1)(ii) or paragraph (a)(1)(iii) of this section. This method may also be used when USDA financial assistance makes up only a minor portion of the program and where the major portion of the program is accomplished through private financing or Federal loans.
I11(b) T3Construction.G1T1 (1) Reimbursement by Treasury check shall be the preferred method when the recipient does not meet the requirements specified in ï¿½72ï¿½ï¿½1A3015.102(a)(1) (ii) or (iii), and may be used for any USDA construction grant unless USDA has entered into an agreement with the recipient to use a letter of credit for all USDA grants, including construction grants.
I11(2) When the reimbursement by Treasury check method is not used, ï¿½1A3015.102(a) (1) and (2) shall apply to the construction grants. Implementing procedures under ï¿½1A3015.102(a) (1) and (2) will be the same for construction grants as for nonconstruction grants awarded to the same recipient, insofar as possible.
I11(3) USDA awarding agencies will not use the percentage-of-completion method to pay its construction grants. The recipient may use that method to pay its construction contractor, but if it does, USDA payments to the recipient will nevertheless be based on the recipient's actual rate of disbursements.

I80ï¿½1A3015.103
I89Withholding payments.
I11(a) Unless otherwise required by Federal statute, payments for proper charges incurred by recipients will not be withheld at any time during the grant period unless (1) the recipient has failed to comply with the program objectives, grant award conditions, or Federal reporting requirements, or (2) the recipient is indebted to the United States and collection of the indebtedness will not impair accomplishment of the objectives of any grant program sponsored by the United States, or (3) the grant is suspended pursuant to Subpart N of this part.
I11(b) Payments withheld for failure of a recipient to comply with reporting requirements, but without suspension of the grant, will be released to the recipient upon subsequent compliance. When a grant is suspended, payment adjustments will be made in accordance with Subpart N of this part. When a debt is to be collected, USDA awarding agencies may withhold payments or require appropriate accounting adjustments to recorded cash balances for which the recipient is accountable to the Federal government, in order to liquidate the indebtedness.

I80ï¿½1A3015.104
I89Requesting advances or reimbursements.
I11(a) T3Advances.G1T1 If advance payments are by Treasury check and are not prescheduled, the recipient shall submit its payment requests at least monthly. Less frequent requests are not permitted for they result in advances covering excessive periods of time. Recipient requests for advances shall not be made in excess of the Federal share of reasonable estimates of outlays for the month covered. These estimates shall be made on a cash basis, even if the recipient uses an accrual accounting system.
I11(b) T3Reimbursements.G1T1 If payments are made through reimbursement or by Treasury check:
I11(1) Requests for reimbursements may be submitted monthly or more frequently if authorized to do so by the awarding agency. Ordinarily, payment will be made within 30 days after receipt of a proper request for reimbursement.
I11(2) The recipient shall not request reimbursement for the Federal share of amounts withheld from contractors to ensure satisfactory completion of work until after it makes those payments.
I11(c) T3Forms.G1T1 The forms for requesting advances or reimbursements are identified in Subpart J of this part.

I80ï¿½1A3015.105
I89Payments to subrecipients.
I11Recipients shall observe the requirements of this subpart in making (or withholding) payments to subrecipients, with the following exceptions:
I11(a) Advance payment by Treasury check may be used instead of letter of credit;
I11(b) The forms specified in Subpart J of this part for requesting advances and reimbursements are not required to be used by subrecipients; and
I11(c) The reimbursement by check method may be used to pay any construction subgrant.

I56Subpart M_Programmatic Changes and Budget Revisions

I80ï¿½1A3015.110
I89Scope and applicability.
I11(a) T3Scope.G1T1 This subpart deals with prior approval requirements for post-ï¿½73ï¿½award programmatic changes and budget revisions by recipients.
I11(b) T3Exemption of mandatory or formula grants.G1T1 Sections 3015.113 through 3015.115 do not apply to programmatic changes or budget revisions made by recipients under State plans or other grants which the awarding agency is required by law to award if the applicant meets all applicable requirements for entitlement.
I11(c) T3Exemption of certain subgrants.G1T1 Sections 3015.113 through 3015.115 do not apply to subgrants from States to their local governments under a mandatory or formula grant, if the local government is not required to apply for the subgrant on a project basis. Generally, such exempt subgrants will occur under a State plan which provides for local administration of a State-wide program under State supervision.

I80ï¿½1A3015.111 
I89Cost principles.
I11(a) The cost principles prescribed by subpart T of this part require prior approval of certain types of costs. Except when waived, those prior approval requirements apply to all grants and subgrants, whether or not ï¿½1A3015.113 through 3015.115 apply.
I11(b) Procedures for prior approvals required by the cost principles are in ï¿½1A3015.196. Procedures for prior approvals required by this subpart are in ï¿½1A3015.112.

I80ï¿½1A3015.112 
I89Approval procedures.
I11(a) T3For grants or cooperative agreements.G1T1 When requesting a prior approval required by this subpart, recipients shall address their requests to the responsible official of the awarding agency. Approvals shall not be valid unless they are in writing and signed by either the responsible officer, the head of the awarding agency, or the head of the awarding agency's regional office.
I11(b) T3For subgrants.G1T1 Recipients shall be responsible for reviewing requests from their subrecipients for the approvals required by this subpart and for giving or denying the approval. A recipient shall not approve any action which is inconsistent with the purpose or terms of the Federal grant or cooperative agreement. If an action by a subrecipient will result in a change in the overall grant project or budget requiring approval from the awarding agency, the recipient shall obtain that approval before giving its approval to the subrecipient. Approvals shall not be valid unless they are in writing and signed by an authorized official of the recipient organization.
I11(c) T3Timing.G1T1 Within 30 days from the date of receipt of a request for approval, the approval authority shall review the request and notify the recipient of its decision. If the request for approval is still under consideration at the end of 30 days, the approval authority shall inform the recipient in writing as to when to expect the decision.

I80ï¿½1A3015.113 
I89Programmatic changes.
I11(a) T3Scope.G1T1 This section contains requirements for prior approval of departures, other than budget revisions, from approved project plans. In addition to the requirements in this section, awarding agencies may require prior approval for other kinds of programmatic changes to an approved cooperative agreement, grant, or subgrant project.
I11(b) T3Changes to project scope or objectives.G1T1 The recipient shall obtain prior approval for any change to the scope or objectives of the approved project. (For construction projects, any material change in approved space utilization or functional layout shall be considered a change in scope).
I11(c) T3Changes in key people.G1T1 This section applies to grants, subgrants, and cooperative agreements for research. This section does not apply to other types of grants, subgrants, or cooperative agreements unless other terms of the award make it apply. The recipient shall obtain prior approval:
I11(1) To continue the project during any continuous period of more than three months without the active direction of an approved project director or principal investigator;
I11(2) For its selection of a replacement for the project director of principal investigator;
I11(3) For its selection of a replacement for any other persons named and expressly designated as key project people in the grant, subgrant, or cooperative agreement award document; or
ï¿½74ï¿½I11(4) To permit the project director or principal investigator (or anyone covered by paragraph (c)(3) of this section) to devote substantially less effort to the project than was anticipated when the award was made.
I11(d) T3Transferring work and providing financial assistance to others.G1T1 Recipients shall obtain prior approval for transferring to another party the actual performance of the substantive programmatic work, and for providing any form of financial assistance to another party.
I11(e) T3Audiovisual activities.G1T1 (1) Except to the extent explicitly included in the project plan approved at the time of award, using grant support for any of the following requires prior approval: 
I11(i) Producing an audiovisual.
I11(ii) Buying ownership of any of the rights in the work embodied in the audiovisual. (This does not apply to merely buying a license in any of the rights. For the remainder of this section, buying ownership of the rights is referred to simply as buying or purchasing an audiovisual).
I11(iii) Presenting or distributing to the general public an audiovisual that was produced or bought with grant support. 
I11(2) Prior approval is not required for:
I11(i) Any audiovisual activity under a subgrant.
I11(ii) Any audiovisual whose direct production or purchase cost to the recipient is $5,000 or less.
I11(iii) The production or purchase of an audiovisual as a research instrument or for documenting experimentation or findings, if the audiovisual is not intended for presentation or distribution to the general public.
I11(3) Following are examples of presentation or distribution of an audiovisual to the general public.
I11(i) Broadcast on commercial, cable, or educational television, or radio.
I11(ii) Showing in commercial motion picture theaters.
I11(iii) Showing in public places such as airports, waiting rooms, bus or railroad depots, and vacation resorts.
I11(iv) Showing to civic associations, schools (except when used as a teaching tool in a classroom setting), clubs, fraternal organizations, or similar lay groups. 

I80ï¿½1A3015.114 
I89Budgets_general.
I11(a) T3Research and non-research project budgets.G1T1 For research and non-research projects which involve cost-sharing or matching, approved budgets shall ordinarily consist of a single set of figures covering total project cost (the sum of the awarding agency's share and the recipient's share). However, the awarding agency may specify that the recipient's share not be included in the approved budget. In no case, however, shall the approved budget be in the form of a separate set of figures for each share.
I11(b) T3Subdivision by programmatic segments.G1T1 Some grants, subgrants, and cooperative agreements contain two or more programmatic segments (such as discrete programs, projects, functions, or types of activities). In these cases, the awarding agency may require that the approved budget be subdivided to show the anticipated cost of each programmatic segment.

I80ï¿½1A3015.115
I89Budget revisions.
I11(a) T3Nonconstruction projects.G1T1 (1) Except as provided in paragraph (a)(2) of this section, the recipient of a grant, subgrant, or cooperative agreement having an approved budget shall obtain prior approval for any budget revision which will:
I11(i) Involve transfer of amounts budgeted for indirect costs to absorb increases in direct costs, or
I11(ii) Involve transfer of amounts previously budgeted for training allowances (direct payments to trainees), or
I11(iii) Result in a need for the award of additional funds, e.g., an increase in the base upon which indirect costs are calculated which will increase allocable indirect costs and result in a claim for a supplementary award.
I11(2) Any or all of the prior approval requirements in paragraph (a) of this section may be waived by the awarding agency.
I11(3) Except as provided in ï¿½1A3015.116 other budget changes under nonconstruction grants do not require approval.
I11(b) T3Construction projects.G1T1 Unless provided otherwise by the terms of the grant, subgrant, or cooperative agreement, revisions to construction project budgets do not require approval. 

ï¿½75ï¿½I80ï¿½1A3015.116
I89Construction and nonconstruction work under the same grant, subgrant, or cooperative agreement.
I11When a grant, subgrant, or cooperative agreement provides support for both construction and nonconstruction work, the awarding agency may require prior approval for any fund or budget transfers between the two types of work. 

I56Subpart N_Grant and Subgrant Closeout, Suspension and Termination

I80ï¿½1A3015.120
I89Closeout.
I11(a) Each grant or subgrant shall be closed out as soon as possible after expiration or notice of termination.
I11(b) The following shall apply when closing out USDA grants:
I11(1) Upon request from the recipient, any allowable reimbursable cost not covered by previous payments shall be promptly paid by USDA.
I11(2) Any unobligated balance of cash advanced to the recipient shall be immediately refunded to the awarding agency or managed in accordance with USDA instructions.
I11(3) Within a maximum period of 90 days following the date of expiration or termination of a grant, all financial performance and related reports required by the terms of the agreement shall be submitted to the awarding agency by the recipient. USDA reserves the option of extending the due date for any report and may waive any report that it considers to be unnecessary.
I11(4) The provisions formally expressed and agreed to within the grant arrangement shall dictate the settlement of any upward or downward adjustments of the Federal share of costs.
I11(c)(1) A grant closeout shall not affect the retention period for, or Federal rights of access to, grant records. (See Subpart D of this part).
I11(2) The closeout of a grant does not affect the recipient's responsibilities regarding property under Subpart R of this part or with respect to any program income the recipient is still accountable for under Subpart F of this part.
I11(3) Final audits (See Attachment L, Circular Aï¿½09102 and Attachment K of Circular Aï¿½09110) are not a required part of the grant or subgrant closeout procedures. Normally, a final audit should not be needed unless there are problems with a grant or subgrant that require audit attention. If a USDA agency considers a final audit to be necessary, it shall contact the OIG Region within which the recipient or subrecipient is located and inform OIG of the situation. OIG shall be responsible for assuring that necessary final audits are performed and for any necessary coodination with other Federal cognizant audit agencies, recipients or State and local auditors. Audits performed in accordance with Subpart I may serve as final audits providing such audits meet the needs of the requesting agency. 
I11(4) If a grant is closed out without audit, the awarding agency reserves the right to disallow and recover an appropriate amount after fully considering any recommended disallowances resulting from an audit which may be conducted later.

I80ï¿½1A3015.121
I89Amounts payable to the Federal government.
I11The following outstanding sums for each grant shall be considered as a debt or debts owed by the recipient to the Federal government. They shall, if not paid upon demand, be subject to recovery by the awarding agency from the recipient or its successor or assignees by set off or other action provided by law:
I11(a) Any grant funds paid to the recipient by the Federal government which exceed the amount the recipient is finally determined to be entitled to under the provisions of the grant award;
I11(b) Any interest or other investment income earned on advances of grant funds which is due the Federal government; 
I11(c) Any royalties or other special classes of program income which, under the provisions of the grant award, are required to be returned to the Federal government;
I11(d) Any amount the Federal government is entitled to under Subpart R of this part; and 
ï¿½76ï¿½I11(e) Under the provisions of the grant award, any other amounts finally determined to be due to the Federal government.

I80ï¿½1A3015.122
I89Violation of terms.
I11(a) Whenever it is determined that the recipient has materially failed to comply with the provisons of the grant award, the awarding agency may suspend or terminate, in accordance with ï¿½1A3015.123 and 3015.124, any grant in whole, or in part, at any time before the date of completion, or take such other remedies as may be legally available and appropriate.
I11(b) A grant may be suspended or terminated in the current period for failure to submit a report still due from a prior period. This action is applicable when a project or program is supported over two or more funding periods.

I80ï¿½1A3015.123
I89Suspension.
I11(a) When a recipient has materially failed to comply with the provisions prescribed in the grant agreement, the awarding agency may, after reasonable notice to the recipient, suspend the grant in whole or in part. A suspension notice shall be issued by the awarding agency stating the reasons for the suspension, any corrective action required of the recipient, and the effective date. Suspension may go into effect immediately if the awarding agency deems it necessary to protect its interest and if a delayed effective date would be unreasonable considering the awarding agency's responsibilities to protect the Federal government's interest. Suspension shall remain in effect until the recipient has taken corrective action satisfactory to the awarding agency, or given evidence that such corrective action will be taken, or until the awarding agency terminates the grant.
I11(b) Unless specifically authorized by the awarding agency in the notice of suspension or subsequently expressed in an amendment to it, new obligations incurred by the recipient during the suspension period shall not be allowed. Necessary and otherwise allowable costs which the recipient could not reasonably avoid during the suspension period will be allowed, if they result from obligations properly incurred by the recipient before the effective date of the suspension and not in anticipation of suspension or termination. If the awarding agency approves, third party in-kind contributions applicable to the suspension period may be allowed in satisfaction of cost-sharing or matching requirements.
I11(c) During the suspension period, appropriate adjustments to payments under the suspended grant will be made by not giving credit to the recipient for disbursements made in payment of unauthorized obligations incurred during the suspension period or by withholding subsequent payments.

I80ï¿½1A3015.124
I89Termination.
I11(a) T3Termination for cause.G1T1 The awarding agency may terminate any grant or other agreement in whole, or in part, at any time before the date of expiration, whenever it is determined that the recipient has materially failed to comply with the conditions of the agreement. The awarding agency shall promptly notify the recipient in writing of the determination and reasons for the termination, together with the effective date.
I11(b) T3Termination by mutual agreement.G1T1 Except as provided in paragraph (a) of this section, grants may be terminated in whole, or in part, only as follows:
I11(1) When the awarding agency and recipient agree upon the termination conditions, including the effective date and, in the case of partial termination, the portion to be terminated.
I11(2) By written notification by the recipient to the awarding agency setting forth the reasons for termination, the effective date, and in the case of partial termination, the portion to be terminated. In the case of a partial termination, if the awarding agency decides that the remaining portion of the grant will not accomplish the purposes for which the grant was made, the awarding agency may terminate the award in its entirety under either paragraph (a) or paragraph (b)(1) of this section.
I11(c) T3Termination settlements.G1T1 Upon termination of a grant, the recipient shall not incur any new obligations for the terminated portion of the agreement after the effective date, and shall cancel as many outstanding obligations as ï¿½77ï¿½possible. The awarding agency, however, shall allow full credit to the recipient for the Federal share of the non-cancellable obligations properly incurred by the recipient prior to termination.

I80ï¿½1A3015.125
I89Applicability to subgrants.
I11Recipient subgrants shall be subjected to the same standards regarding closeout, suspension, and termination of subgrants as prescribed in this subpart for awarding agencies.
S8006I56Subparts Oï¿½09P [Reserved]
S8010
I56Subpart Q_Application for Federal Assistance

I80ï¿½1A3015.150
I89Scope and applicability.
I11(a) This subpart prescribes forms and instructions to be used by governmental organizations (except hospitals, non-profit organizations, and institutions of higher education operated by a government) in applying to USDA for discretionary grants. This subpart is not applicable, however, to mandatory or formula grants or programs which do not require applicants to apply to USDA for funds on a project basis.
I11(b) This subpart permits awarding agencies to prescribe the form of applications by nongovernmental organizations (including hospitals, non-profit organizations and institutions of higher education operated by a government), but prescribes the use of a standard facesheet for certain of these applications.
I11(c) This subpart applies only to applications for grants or cooperative agreements and is not required to be applied by recipients in dealing with applicants for subgrants. However, recipients are encouraged not to adopt more detailed or burdensome application requirements for subgrants.
I11(d) This subpart also prescribes standards for competition to be used by USDA agencies in awarding discretionary cooperative agreements and grants. (This subpart is not applicable to cooperative agreements awarded pursuant to the provisions of sections 1472(b) and 1473C of the National Agricultural Research, Extension and Teaching Policy Act of 1977, as amended.) 
Q04I20[46 FR 55639, Nov. 10, 1981, as amended at 51 FR 17172, May 9, 1986]

I80ï¿½1A3015.151
I89Authorized forms. 
I11(a) Sections 3015.152 through 3015.156 specify the forms that governmental organizations shall use to apply to USDA for a discretionary grant.
I11(b) Governments need not submit more than the original and two copies of application forms. When less will suffice, the awarding agency shall notify potential applicants.
I11(c) When a government agency amends a previously submitted application or applies for additional funding (such as a continuation or supplemental award) only the facesheet and any other affected pages are required to be submitted. Previously submitted pages whose information is still current may be resubmitted, but are not required to be resubmitted.

I80ï¿½1A3015.152
I89Preapplication for Federal assistance.
I11(a) When a government submits a preapplication, it shall use the Preapplication for Federal Assistance form prescribed by Circular Aï¿½09102. The purposes of these preapplications shall be to:
I11(1) Establish communication between the potential applicant and the awarding agency;
I11(2) Determine the potential applicant's eligibility;
I11(3) Identify projects which have little or no chance for Federal funding before applicants incur significant costs for preparing an application.
I11(b) Preapplication is always required if the potential applicant is a government and the proposed project (1) is for construction, land acquisition, or land development, and (2) would require more than $100,000 of Federal funding. If these conditions are not present, potential applicants need not submit preapplications unless required to do so by the awarding agency. Any government may submit a preapplication even when not required.

ï¿½78ï¿½I80ï¿½1A3015.153
I89Notice of preapplication review action.
I11Awarding agencies shall inform governmental applicants of the results of their review of preapplications by using the Notice of Preapplication Review Action form prescribed by Circular Aï¿½09102. If the review cannot be completed within 45 days, the awarding agency shall inform the applicant, in writing, when it will complete the review.

I80ï¿½1A3015.154
I89Application for Federal assistance (nonconstruction programs).
I11Governments shall use the Application for Federal Assistance (Nonconstruction Programs) form prescribed by OMB Circular Aï¿½09102 in applying for discretionary grants unless a form specified in ï¿½1A3015.155 or ï¿½1A3015.156 is to be used.

I80ï¿½1A3015.155
I89Application for Federal assistance (construction programs). 
I11Governments shall use the Application for Federal Assistance (for Construction Programs) form prescribed by Circular Aï¿½09102 in applying for any grant whose purpose is solely or primarily construction, land acquisition, or land development.

I80ï¿½1A3015.156
I89Application for Federal assistance (short form). 
I11Governments shall use the Application for Federal Assistance (Short Form) form prescribed by Circular Aï¿½09102 in applying for any single-purpose, one-time grant of less than $10,000 not requiring Circular Aï¿½0995 clearinghouse review, an environmental impact statement, or the relocation of persons, businesses, or farms. Awarding agencies may, at their discretion, authorize or require this form for applications for larger amounts.

I80ï¿½1A3015.157
I89Authorized form for nongovernmental organizations.
I11Nongovernmental organizations shall use application forms prescribed by the awarding agency. The facesheet of these applications shall be Standard Form 424.

I80ï¿½1A3015.158
I89Competition in the awarding of discretionary grants and cooperative agreements. 
I11(a) T3Standards for competition.G1T1 Except as provided in paragraph (d) of this section, awarding agencies shall enter into discretionary grants and cooperative agreements only after competition. An awarding agency's competitive award process shall adhere to the following standards: 
I11(1) Potential applicants must be invited to submit proposals through publications such as the T4Federal Register,G1T1 professional trade journals, agency or program handbooks, the Catalog of Federal Domestic Assistance, or any other appropriate means of solicitation. In so doing, awarding agencies should consider the broadest dissemination of project solicitations in order to reach the highest number of potential applicants. 
I11(2) Proposals are to be evaluated objectively by independent reviewers in accordance with written criteria set forth by the awarding agency. Reviewers should make written comments, as appropriate, on each application. Independent reviewers may be from the private sector, another agency, or within the awarding agency, as long as they do not include anyone who has approval authority for the applications being reviewed or anyone who might appear to have a conflict of interest in the role of reviewer of applications. A conflict of interest might arise when the reviewer or the reviewer's immediate family members have been associated with the applicant or applicant organization within the past two years as an owner, partner, officer, director, employee, or consultant; has any financial interest in the applicant or applicant organization; or is negotiating for, or has any arrangement, concerning prospective employment. 
I11(3) An unsolicited application, which is not unique and innovative, shall be competed under the project solicitation it comes closest to fitting. Awarding agency officials will determine the solicitation under which the application is to be evaluated. When the awarding agency official decides that the unsolicited application does not fall under a recent, current, or planned solicitation, a noncompetitive award ï¿½79ï¿½may be made, if appropriate to do so under the criteria of this section. Otherwise, the application should be returned to the applicant. 
I11(b) T3Project solicitations.G1T1 A project solicitation by the awarding agency shall include or reference the following, as appropriate: 
I11(1) A description of the eligible activities which the awarding agency proposes to support and the program priorities; 
I11(2) Eligible applicants; 
I11(3) The dates and amounts of funds expected to be available for awards; 
I11(4) Evaluation criteria and weights, if appropriate, assigned to each; 
I11(5) Methods for evaluating and ranking applications; 
I11(6) Name and address where proposals should be mailed and submission deadline(s); 
I11(7) Any required forms and how to obtain them; 
I11(8) Applicable cost principles and administrative requirements; 
I11(9) Type of funding instrument intended to be used (grant or cooperative agreement); and 
I11(10) The T3Catalog of Federal Domestic AssistanceG1T1 number and title. 
I11(c) T3Approval of applications.G1T1 The final decision to award is at the discretion of the awarding/approving official in each agency. The awarding/approving official shall consider the ranking, comments, and recommendations from the independent review group, and any other pertinent information before deciding which applications to approve and their order of approval. Any appeals by applicants regarding the award decision shall be handled by the awarding agency using existing agency appeal procedures or good administrative practice and sound business judgment. 
I11(d) T3Exceptions.G1T1 The awarding/approving official may make a determination in writing that competition is not deemed appropriate for a particular transaction. Such determination shall be limited to transactions where it can be adequately justified that a noncompetitive award is in the best interest of the Government and necessary to the accomplishment of the goals of the program. Reasons for considering noncompetitive awards may include, but are not necessarily limited to, the following: 
I11(1) Nonmonetary awards of property or services; 
I11(2) Awards of less than $75,000; 
I11(3) Awards to fund continuing work already started under a previous award; 
I11(4) Awards which cannot be delayed due to an emergency or a substantial danger to health or safety; 
I11(5) Awards when it is impracticable to secure competition; or 
I11(6) Awards to fund unique and innovative unsolicited applications. 
Q04I20[51 FR 17172, May 9, 1986]

I56Subpart R_Property

I80ï¿½1A3015.160 
I89Scope and applicability.
I11(a) Except as explained in paragraphs (c), (d), and (e) of this section, this subpart applies to real property, equipment (including ADP) and supplies whose acquisition is supported by a grant.
I11(b) Also contained in this subpart are standards covering inventions, patents, and copyrights arising out of activities supported by a grant.
I11(c) This subpart does not apply to:
I11(1) Property for which only depreciation or use allowances are charged;
I11(2) Property donated entirely as a third party in-kind contribution; or
I11(3) Equipment or supplies acquired primarily for sale or rental, rather than for use.
I11(d) This subpart applies to equipment or supplies acquired by a contractor under a grant or subgrant only if, by terms of the contract, title vests in the recipient or subrecipient.
I11(e) For research grants that are subject to an institutional cost-sharing agreement, real property, equipment, and supplies shall be subject to this subpart only if at least some part of the acquisition cost is supported as a direct cost by Federal grant funds.

I80ï¿½1A3015.161 
I89Additional requirements.
I11Provided they observe the requirements of this subpart, recipients may follow their own property management policies and procedures. Unless specifically required by Federal statutes or Executive Orders, awarding agencies ï¿½80ï¿½may not impose on recipients property requirements (including property reporting requirements) not authorized by this subpart.

I80ï¿½1A3015.162 
I89Title to real property, equipment and supplies.
I11Subject to the obligations and conditions specified in this subpart, title to real property, equipment, and supplies acquired under a grant or subgrant shall vest, upon acquisition, in the recipient or subrecipient, respectively. In certain cases, money due the Federal government upon disposition of real property may be authorized to be used for allowable costs rather than paid to USDA. (See ï¿½1A3015.173.)

I80ï¿½1A3015.163 
I89Real property.
I11Except as stated otherwise by Federal statutes, real property applicable to this subpart shall be subject to the following requirements, in addition to any other requirements imposed by the provisions of the grant award:
I11(a) T3Use.G1T1 The property shall be used for the originally authorized purpose as long as needed for that purpose. When no longer so needed, the awarding agency may approve the use of the property for other purposes. These uses shall be limited to:
I11(1) Projects or programs supported by other Federal grants or assistance agreements.
I11(2) Activities not supported by other Federal grants or assistance agreements but having purposes consistent with those of the legislation under which the original grant was made.
I11(b) T3Transfer of title.G1T1 In accordance with paragraph (a) of this section, approval may be requested from the awarding agency to transfer title to an eligible third party for continued use for authorized purposes. If approval is permissible under Federal statutes, and is given, the terms of the transfer shall provide that the transferee shall assume all the rights and obligations of the transferor set forth in this subpart or in other terms of the grant or subgrant.
I11(c) T3Disposition.G1T1 When the real property is no longer to be used as provided in paragraphs (a) and (b) of this section, the disposition instructions of the awarding agency shall be followed. Those instructions will provide for one of the following alternatives:
I11(1) The property shall be sold and the Federal government shall have a right to an amount computed by multiplying the Federal share of the property times the proceeds from sale (after deducting actual and reasonable selling and fix-up expenses, if any, from the sales proceeds). Proper sales procedures shall be followed which provide for competition to the extent practicable and result in the highest possible return.
I11(2) The recipient shall have the option either of selling the property in accordance with paragraph (c)(1) of this section or of retaining title. If title is retained, the Federal government shall have a right to an amount computed by multiplying the market value of the property by the Federal share of the property.
I11(3) The recipient shall transfer the title to either the Federal government or an eligible non-Federal party named by the awarding agency. The recipient shall be entitled to be paid an amount computed by multiplying the market value of the property by the non-Federal share of the property. In cases where the property belonged to a subrecipient, see ï¿½1A3015.172 for the subrecipient's share.

I80ï¿½1A3015.164
I89Statutory exemptions for equipment and supplies.
I11(a) In certain circumstances some Federal statutes permit title to equipment or supplies acquired with grant funds to vest in the recipient without further obligation to the Federal government or on such terms and conditions set forth in the grant award, as deemed appropriate. The Federal Grant and Cooperative Agreement Act of 1977, Pub. L. 95ï¿½09224, is an example of such a statute. It provides this authority for equipment and supplies purchased with the funds of grants (and Federal contracts and cooperative agreements) for the conduct of basic or applied scientific research at non-profit institutions of higher education or at non-profit organizations whose primary purpose is the conduct of scientific research.
I11(b) If equipment is subject to a statute of the kind described in paragraph (a) of this section, it shall be exempt ï¿½81ï¿½from the requirements in the remaining sections of this subpart. However, when an equipment item has a unit acquisition cost of $1,000 or more, it shall be subject to ï¿½1A3015.165 concerning rights to require transfer, and, while subject to such a right, to the rules on replacement in ï¿½1A3015.167.
I11(c) If supplies are subject to a statute of the kind described in paragraph (a) of this section, they shall be exempt from all provisions of the remainder of this subpart which would otherwise apply.

I80ï¿½1A3015.165
I89Rights to require transfer of equipment.
I11(a) T3USDA right.G1T1 The awarding agency shall have the right to require the transfer of equipment (including title) for items of equipment having a unit cost of $1,000 or more to the Federal government or to an eligible non-Federal party named by the awarding agency. Normally, USDA agencies will only exercise this right if the project or program for which the equipment was acquired is transferred from one recipient to another. The following conditions shall govern this right:
I11(1) The property shall be appropriately identified in the grant award.
I11(2) In order for the awarding agency to exercise the right, disposition instructions must be issued no later than 120 days after the end of USDA grant support for the project or program for which the equipment was acquired. Furthermore:
I11(i) If the equipment is eligible for the exemptions in ï¿½1A3015.164 and ceases to be needed for the project or program for which it was acquired while the project or program is still being performed by the recipient, the disposition instructions must have been received by the recipient while the equipment was still needed for that project or program.
I11(ii) If the equipment is not eligible for those exemptions, disposition instructions must have been received by the recipient before other permissible disposition of the equipment took place in accordance with ï¿½1A3015.168.
I11(3) If the right is exercised, the recipient shall be entitled to be paid any reasonable, resulting shipping or storage costs incurred, plus an amount computed by multiplying the market value of the equipment by the non-Federal share of the equipment.
I11(b) T3Right of parties awarding subgrants.G1T1 A recipient may reserve for itself, when awarding a subgrant, rights similar to those found in paragraph (a) of this section which covers items of equipment having a unit acquisition cost of $1,000 or more which are acquired under that subgrant. Without the approval of the awarding agency, the right may be exercised only if the project or program for which the equipment was acquired is transferred to another subrecipient and only for the purpose of transferring the equipment to the new subrecipient for continued use in the project or program.
I11(c) T3Equipment lists.G1T1 If at any time an awarding agency is considering exercising its right to require transfer of equipment, it may require the recipient to furnish it with a list of all items of equipment that are subject to the right. As such, the awarding agency will decide which items, if any, should be transferred.

I80ï¿½1A3015.166
I89Use of equipment.
I11(a) T3Basic rule.G1T1 Whenever the equipment is not transferred under the provisions set forth in ï¿½1A3015.165, it shall be used by the recipient in the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds. When the equipment is no longer needed for the original project or program the recipient shall use the equipment, if needed, in other projects or programs currently or previously funded by the Federal government, in the following order of priority:
I11(1) Projects or programs currently or previously funded by the same USDA awarding agency.
I11(2) Projects or programs currently or previously funded by any USDA awarding agency.
I11(3) Projects or programs currently or previously funded by other Federal agencies.
I11(b) T3Shared use.G1T1 When equipment is used less than full time in the original project or program, the recipient shall make it available for use in other ï¿½82ï¿½projects or programs currently or previously funded by the Federal government. Provided, such other use will not interfere with the work on the original project or program. First preference for such use, however, shall be given to other projects or programs funded by the same USDA awarding agency.
I11(c) T3Use by other recipients.G1T1 When the recipient can no longer use the equipment as required by paragraph (a) of this section, it may voluntarily make the equipment available for use on projects or programs currently or previously funded by the Federal government which the recipient is supporting through subgrants or through non-Federal grants. A subrecipient may also voluntarily make the equipment available for use in projects or programs currently or previously funded by the Federal government which are being conducted or supported by the recipient.
I11(d) T3Other uses.G1T1 Unless the awarding agency provides otherwise, while equipment is being used as described in the preceding paragraphs of this section, it may also be used part-time for other purposes. The use as described in the previous paragraphs, however, shall be given priority over other uses.

I80ï¿½1A3015.167 
I89Replacement of equipment.
I11(a) If needed, equipment may be exchanged for replacement equipment. Replacement of equipment may be done either through trade-in or through sale and application of the proceeds to the acquisition cost of replacement equipment. In either case, the transaction must be one which a prudent person would make in like circumstances.
I11(b) If an additional outlay to acquire the replacement equipment is charged as a direct cost to either Federal funds or required cost-sharing or matching under a Federal award, the replacement equipment shall be subject to whatever property requirements or exemptions are applicable to that award. If the award is a grant from USDA, the full acquisition cost of the replacement equipment shall determine which provisions of this subpart apply.
I11(c) For any replacement not covered by paragraph (b) of this section, the provisions of this subpart applicable to the equipment replaced shall carry over to the replacement equipment. None of the provisions of this subpart shall carry over if (1) the Federal share of the equipment replaced was 10 percent or less or (2) the product of that share times the amount received for trade-in or sale is $100 or less. 

I80ï¿½1A3015.168 
I89Disposal of equipment.
I11When original or replacement equipment is no longer to be used in projects or programs currently or previously sponsored by the Federal government, disposal of the equipment shall be made as follows:
I11(a) Equipment with a unit acquisition cost of less than $1,000 may be sold, retained or otherwise disposed of with no further obligation to the Federal government.
I11(b) All other equipment may be retained or sold. The Federal government shall have a right to an amount calculated by multiplying the current market value or proceeds from sale by the Federal share of the equipment (see ï¿½1A3015.172). If part of the Federal share of the equipment came from an award under which the exemptions in ï¿½1A3015.164 were applicable, the amount due shall be reduced pro rata. In any case, if the equipment is sold, $100 or 10 percent of the total sales proceeds, whichever is greater, may be deducted and retained from the amount otherwise due for selling and handling expenses. If the recipient's project or program for which or under which the equipment was acquired is still receiving grant support from the same Federal program and if the awarding agency approves, the net amount due may be used for allowable costs of that project or program. Otherwise, the net amount must be returned to the awarding agency by check or money order. 

I80ï¿½1A3015.169 
I89Equipment management requirements.
I11Recipient procedures for managing equipment shall, as a minimum, meet the following requirements (including replacement equipment) until such actions as transfer, replacement or disposal takes place:
I11(a) Property records shall be maintained accurately. (Subpart D of this ï¿½83ï¿½part contains retention and access requirements for these records.) The records shall include for each item of equipment the following:
I11(1) A description of the equipment including manufacturer's serial numbers.
I11(2) An identification number, such as the manufacturer's serial number.
I11(3) Identification of the grant under which the recipient acquired the equipment.
I11(4) The information needed to calculate the Federal share of the equipment (see ï¿½1A3015.172).
I11(5) Acquisition date and unit acquisition cost.
I11(6) Location, use and condition of the equipment and the date the information was reported.
I11(7) All pertinent information on the ultimate transfer, replacement, or disposal of the equipment.
I11(b) Every two years, at a minimum, a physical inventory shall be conducted and the results reconciled with the property records to verify the existence, current utilization, and continued need for the equipment. Any discrepancies between quantities determined by the physical inspection and those shown in the accounting records shall be investigated to determine the causes of the differences.
I11(c) In order to insure adequate safeguards to prevent loss, damage or theft of equipment, a control system shall be used. Any loss, damage or theft of equipment shall be investigated and fully documented. The awarding agency may require a report of the circumstances involving the loss, damage, or theft of equipment.
I11(d) In order to keep the equipment in good condition, adequate maintenance procedures shall be implemented.
I11(e) Where equipment is to be sold and the Federal government is to have a right to part or all of the proceeds, selling procedures shall be established which will provide for competition to the extent practicable and result in the highest possible return.

I80ï¿½1A3015.170
I89Damage, loss, or theft of equipment.
I11(a) T3Applicability.G1T1 This section applies to equipment with a unit acquisition cost of $1,000 or more that, before disposal (see ï¿½1A3015.168), is damaged beyond repair, lost, or stolen.
I11(b) T3Recipient at fault_G1T1(1) T3Applicability.G1T1 This paragraph applies if:
I11(i) At the time of the damage, loss, or theft, the recipient does not have a control system in effect as required by ï¿½1A3015.169, and
I11(ii) The damage, loss, or theft is not due to an act of God.
I11(2) T3Equipment replaced.G1T1 If the equipment is replaced, the replacement is governed by ï¿½1A3015.167. When that happens, the market value of the original equipment at the time it was damaged, lost, or stolen is used instead of the amount received for trade-in or sale.
I11(3) T3Equipment not replaced.G1T1 If the equipment is not replaced, the Federal government has a right to an amount calculated by multiplying the Federal share in the equipment by its market value at the time of damage, loss, or theft. The amount is reduced pro rata if part of the Federal share of the equipment comes from an award under which the exemption in ï¿½1A3015.164 applied.
I11(4) T3Other remedies.G1T1 The provisions in this paragraph (b) are in addition to other remedies available to the awarding agency if a recipient acquires equipment with grant support but fails to establish the control system required by ï¿½1A3015.169.
I11(c) T3Recipient not at fault_G1T1(1) T3Applicability.G1T1 This paragraph applies if:
I11(i) At the time of the damage, loss, or theft, the recipient does have a control system in effect as required by ï¿½1A3015.169(c) or
I11(ii) The damage, loss, or theft is due to an act of God.
I11(2) T3Recipient not compensated.G1T1 If the recipient is not compensated for the damage, loss, or theft, through insurance or some other means, there is no obligation to USDA for the equipment.
I11(3) T3Recipient compensated.G1T1 If the recipient is compensated for the damage, loss, or theft and replaces the equipment, ï¿½1A3015.167 applies to the replacement equipment. If the recipient is compensated but does not replace the equipment, ï¿½1A3015.168 applies as though the recipient had sold the equipment. (All of ï¿½1A3015.168 applies including the rule permitting the amount due the Federal government to be reduced by 10 ï¿½84ï¿½percent of the proceeds or $100, whichever is greater.) The amount received for trade-in or sale is considered the lesser of (i) the amount of compensation or (ii) the market value of the equipment at the time it was damaged, lost, or stolen.
I11(d) T3Waivers.G1T1 The awarding agency may waive in whole or in part any provision of this section. 

I80ï¿½1A3015.171
I89Unused supplies.
I11(a) If unused supplies exceeding $1,000 in total aggregate market value are left over upon termination or expiration of the grant or subgrant for which they were acquired and the supplies are not needed for any project or program currently or previously funded by the Federal government, the grant shall be credited by an amount computed by multiplying the Federal share of the supplies times the current market value or, if the supplies are sold, the proceeds from sale. If the supplies are sold, 10 percent of the proceeds may be deducted and retained from the credit, for selling and handling expenses.
I11(b) For possible exemptions from this section, see ï¿½1A3015.164.

I80ï¿½1A3015.172
I89Federal share of real property, equipment, and supplies. 
I11This subpart contains principles necessary to determine the Federal (or non-Federal) share of real property, equipment or supplies.
I11(a) T3General.G1T1 (1) Except as explained in the following paragraphs of this section, the Federal share of the property shall be the same percentage as the Federal share of the acquiring party's total cost under the grant during the grant or subgrant year (or other funding period) to which the acquisition cost of the property was charged. For this purpose, ``costs under the grant'' means allowable costs which are either supported by the grant or counted toward satisfying a cost-sharing or matching requirement of the grant.
I11(2) If the property is acquired by a subrecipient, the Federal share of the subrecipient's costs under the grant and hence of the property shall be calculated by multiplying the Federal share of the recipient's costs by the latter's share of the subrecipient's costs. (For example, if the Federal share of the recipient's costs is 50 percent and the subgrant bears only 50 percent of a subrecipient's costs, then the Federal share of that subrecipient's costs (and of the property acquired by that subrecipient) is 25 percent.)
I11(3) The provisions of some grant awards set different maximum percentages of Federal financial participation for different categories of costs. In these cases, for the purposes of this section, the costs in each category are considered as costs under a separate grant. If two categories have the same maximum percentage of Federal participation and costs in one category are permitted to count toward satisfying a cost-sharing or matching requirement of the other, they are a single category for the purposes of this rule. Also, all categories with a 100 percent rate are considered a single category for the purposes of this rule.
I11(b) T3Property acquired only partly under a grant.G1T1 (1) Sometimes only a part of the acquisition cost of an item of property is supported as a direct cost by the grant or counted as a direct cost towards a cost-sharing or matching requirement. Occasionally, the amount paid for the property is only a part of its value. The remainder is donated as an in-kind contribution by the party that provided the property.
I11(2) To determine the Federal share of such property, first calculate the Federal share of the acquiring party's total costs under the grant as explained in paragraph (a) of this section. Next multiply that share by the percentage of the property's acquisition cost (or its market value, if the item was partly donated) which was supported as a direct cost by the grant or counted as a direct cost towards a cost-sharing or matching requirement.
I11(c) T3Replacement equipment.G1T1 To calculate the Federal share of replacement equipment the following procedures shall be followed:
I11(1) T3Step 1:G1T1 Determine the Federal share (percentage) of the equipment replaced.
I11(2) T3Step 2:G1T1 Determine the percentage of the replacement equipment's costs that was covered by the amount received for trade-in or the sale proceeds from the equipment replaced.
ï¿½85ï¿½I11(3) T3Step 3:G1T1 Multiply the step 1 percentage by the step 2 percentage.
I11(4) T3Step 4:G1T1 If an additional outlay for the replacement equipment was charged as a direct cost either to USDA grant funds or to required cost-sharing or matching funds, calculate the Federal share attributable to that additional outlay as explained in paragraph (b)(2) of this section. Add that additional percentage to the step 3 percentage.

I80ï¿½1A3015.173
I89Using or returning the Federal share.
I11(a) This section applies when, under ï¿½1A3015.163, 3015.168 or 3015.170, the Federal government has a right to an amount of money upon disposal or loss, theft, or damage of property.
I11(b) If the recipient's project or program for which the property was acquired is still receiving grant support from the same Federal program, the awarding agency may authorize use of the net money due for allowable costs of that project or program.
I11(c) Otherwise, the net amount must be returned to the awarding agency by check or money order.

I80ï¿½1A3015.174
I89Subrecipient's share.
I11Where this subpart requires a sharing of the market value or sale proceeds of property acquired under a subgrant, the non-Federal share shall be proportionally divided between the recipient and the subrecipient. The subrecipient shall be entitled to the amount it would have received or retained if the award to it had been made directly by the Federal government. The remainder of the non-Federal share shall belong to the recipient.

I80ï¿½1A3015.175 
I89Intangible personal property.
I11(a) T3Inventions and Patents.G1T1 (1) If the recipient is a small business or nonprofit organization (including universities and other institutions of higher education), the allocation of rights in inventions produced under a grant or cooperative agreement shall be determined in accordance with the provisions of sections 200 through 206 of Pub. L. 96ï¿½09517 (35 U.S.C. 200ï¿½09206) and OMB Circular Aï¿½09124.
I11(2) For all other recipients, the allocation of rights in inventions shall be determined in accordance with the ``Government Patent Policy'' (President's Memorandum for Heads of Executive Departments and Agencies, February 18, 1983) and OMB Circular Aï¿½09124.
I11(b) T3Copyrights_G1T1(1) T3Applicability.G1T1 This section applies to the copyright in any original work of authorship prepared with grant support. Additionally, if ownership of a copyright or of any of the exclusive rights comprising a copyright are purchased with grant support, this section applies to the purchased copyright or rights.
I11(2) T3Basic rules.G1T1 (i) USDA reserves a royalty-free, nonexclusive, and irrevocable license to exercise, and to authorize others to exercise, the rights for Federal Government purposes. Subject to this license, the owner is free to exercise, preserve, or transfer all its rights. The recipient shall ensure that no agreement is entered into for transferring the rights which would conflict with the nonexclusive license of USDA.
I11(ii) One way that USDA may exercise its nonexclusive license is to authorize exercise of the rights in another project or activity that receives or has received grant support from the Federal Government.
I11(iii) A recipient awarding a subgrant is allowed to impose subgrant terms reserving a nonexclusive license for itself, similar to the one reserved by this section for USDA, with respect to any copyright or rights subject to this section that arise under the subgrant.
Q04I20[48 FR 35875, Aug. 8, 1983] 

I56Subpart S_Procurement

I80ï¿½1A3015.180
I89Scope and applicability.
I11(a) This subpart contains information for complying with Attachment 0, ``Procurement Standards'', of OMB Circulars Aï¿½09102 and Aï¿½09110. Circular Aï¿½09102 covers grant and cooperative agreement programs with State and local governments and Indian Tribal governments. Circular Aï¿½09110 covers grant and cooperative agreement programs with institutions of higher education, hospitals, and other nonprofit organizations. Copies of both Circulars may be obtained from O&F.
ï¿½86ï¿½I11(b) This subpart applies to recipient procurements (by purchase, rental, or barter) of supplies, equipment, and services (including construction).
I11(c) This subpart applies only to procurements that are supported in whole or in part by a grant or cooperative agreement.
I11(d) This subpart does not apply to procurements of land, existing land improvements or structures, or any other existing real property.
I11(e) The Attachment 0 of Circulars Aï¿½09102 and Aï¿½09110 apply to procurements under subgrants as well as grants.

I80ï¿½1A3015.181
I89Standards of conduct.
I11(a) Recipients shall maintain a written code or standards of conduct governing the performance of their officers, employees or agents engaged in awarding and administering contracts supported by Federal funds:
I11(1) No employee, officer or agent shall participate in the selection, award, or administration of contracts using Federal funds where to his knowledge, such employee, officer or agent or his immediate family, partners or organizations has a financial interest in, is negotiating with, or has any arrangements concerning prospective employment with the proposed contractor.
I11(2) The recipient's officers, employees or agents shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or proposed contractors.
I11(3) Provisions shall be made for disciplinary actions against the recipient's officers, employees, or agents or by contractors or their agents violating the standards of conduct.
I11(b) Awarding agencies may review the written standards of conduct to determine if they meet the minimum standards of Attachment 0 of OMB Circulars Aï¿½09110 and Aï¿½09102. Recipients will be notified of deficiencies and make corrective action.

I80ï¿½1A3015.182
I89Open and free competition.
I11All procurement transactions, regardless of whether by sealed bids or by negotiation and without regard to dollar value shall be conducted in a manner that provides maximum open and free competition.

I80ï¿½1A3015.183
I89Access to contractor records.
I11The Attachment 0 requires recipients to include in specified kinds of contracts a provision for access to the contractor's records by the recipient and the Federal government. The following applies to the provision:
I11(a) The provision must require the contractor to place the same provision in any subcontract which would have to have the provision were it awarded by the recipient.
I11(b) The provision must require retention of records for three years after final payment is made under the contract or subcontract and all pending matters are closed. The provision must also require that, if any audit, litigation, or other action involving the records is started before the end of the three year period, the records must be retained until all issues arising out of the action are resolved or until the end of the three year period, whichever is later.
I11(c) In contracts and subcontracts under a subgrant, the provision must require that access to the records be provided to the recipient as well as the subrecipient and the Federal government.

I80ï¿½1A3015.184
I89Equal employment opportunity.
I11(a) The Attachment 0 requires recipients to include in contracts in excess of $10,000 a provision requiring compliance with Executive Order 11246, concerning equal employment opportunity as amended by Executive Order 11375, and as supplemented in Department of Labor regulations (41 CFR Chapter 60).
I11(b) If construction is to be assisted by a grant or subgrant, the Executive Order and the Department of Labor supplementing regulations apply, unless an exemption is granted by or under those regulations. Recipients shall observe all applicable requirements of the Order and regulations and include in their nonexempt construction contracts the specific clauses prescribed by 41 CFR 60ï¿½091.4(b) and, if applicable, 41 CFR 60ï¿½094.3.

ï¿½87ï¿½I56Subpart T_Cost Principles

I80ï¿½1A3015.190
I89Scope.
I11This subpart makes the allowable costs incurred by the recipient the maximum amount of money a recipient is entitled to receive from USDA. In addition, this subpart identifies the principles to be used in determining allowable costs. These cost principles shall apply to transactions and activities conducted under grants, subgrants, cooperative agreements, cost-type contracts and cost-type subcontracts under grants.
I11(a) T3Allowable costs.G1T1 Grant funds may be used only for allowable costs of the activities for which the grant was awarded. This means that the total amount of money that the recipient is entitled to receive from USDA may not exceed the allowable costs incurred by the recipient for those activities.
I11(b) The following rules apply in computing maximum allowable costs:
I11(1) T3Third party in-kind contributions.G1T1 Because they are not allowable costs of the party that receives them, the value of third party in-kind contributions received may not be included in determining maximum allowable costs. However, as provided in Subpart G of this part, third party in-kind contributions may count towards satisfying a cost-sharing or matching requirement of the Federal grant.
I11(2) T3Costs supported by another grant.G1T1 Allowable costs incurred by the recipient and supported by another Federal grant (or by a non-Federal grant) awarded to the recipient may not be included in determining maximum allowable costs. The basic intent of this rule is to prevent double compensation. It does not, however, prevent proration of costs that are allowable under two or more awards.
I11(3) T3Costs used to match another Federal grant.G1T1 A cost that the recipient uses to meet a cost-sharing or matching requirement of one Federal grant may not count towards determining maximum allowable costs under another Federal grant, unless specifically authorized by a Federal statute.
I11(4) T3Costs supported by general program income.G1T1 A grant may not pay for a cost which is supported by general program income earned by the recipient or by a subrecipient under the grant. Therefore, these costs may not be included in determining maximum allowable costs. 
I11(5) T3Use of money due Federal government.G1T1 In accordance with ï¿½1A3015.173, an awarding agency, under certain circumstances, may authorize a recipient to use certain money due the Federal government for allowable costs of the project or programs, instead of returning the money to the Federal Government. Costs supported by the money may not be included as part of the maximum allowable costs charged to USDA.
I11(6) T3Subgrant and contract costs.G1T1 The recipient's allowable costs include allowable outlays, if any, to its subrecipients and contractors. If the recipient pays a subrecipient more than the allowable costs incurred by the subrecipient, the excess is not an allowable cost of the recipient and may not be included as part of the maximum allowable costs charged to USDA. However, for cost-type contracts a reasonable fee or profit paid by the recipient to the contractor, in addition to the contractor's allowable costs, may be included in this maximum unless prohibited by the provisions of the grant award.

I80ï¿½1A3015.191
I89Governments.
I11(a) OMB Circular No. Aï¿½0987, and any subsequent amendments to this Circular published in the T4Federal RegisterG1T1 by OMB, shall be used in determining the allowable costs of activities conducted by governments.
I11(b) Additional amendments to the Circular, unless otherwise prescribed by OMB, shall go into effect at the start of a government's first fiscal year following the amendment's publication in the T4Federal Register.G1T1

I80ï¿½1A3015.192
I89Institutions of higher education.
I11(a) OMB Circular No. Aï¿½0921, including any amendments to the Circular published in the T4Federal RegisterG1T1 by OMB, shall be used in determining the allowable costs of activities conducted by institutions of higher education (other than for-profit institutions).
I11(b) Additional amendments to the Circular, unless otherwise prescribed by OMB, shall go into effect at the start of an institution's first fiscal ï¿½88ï¿½year following the amendment's publication in the T4Federal Register.G1T1

I80ï¿½1A3015.193
I89Other non-profit organizations.
I11(a) OMB Circular No. Aï¿½09122, including any subsequent amendments to the Circulars published in the T4Federal RegisterG1T1 by OMB, shall be used in determining the allowable costs of activities conducted by nonprofit organizations under grants, cooperative agreements, cost reimbursement contracts, and other contracts in which costs are used in pricing, administration, or settlement. It does not apply to colleges or universities which are covered by Circular Aï¿½0921; State, local and federally recognized Indian Tribal governments which are covered by Circular Aï¿½0987, or hospitals.
I11(b) Future amendments to the Circular, unless otherwise prescribed by OMB, shall go into effect at the time the initial award is made to the recipient.

I80ï¿½1A3015.194 
I89For-profit organizations.
I11The principles to be used when determining the allowable costs of activities conducted by for-profit organizations are contained in the Federal Acquisition Regulation at 48 CFR Subpart 31.2. Exception: Independent research and development costs including any indirect costs allocable to them are unallowable. Independent research and development are defined in the Federal Acquisition Regulation at 48 CFR 31.205ï¿½0918.
Q04I20[60 FR 44124, Aug. 24, 1995]

I80ï¿½1A3015.195
I89Subgrants and cost-type contracts.
I11USDA cost principles applicable to a cost-type contractor or a subrecipient will not necessarily be the same as those applicable to the recipient. For example, where a State government awards a subrecipient or cost-type contract to an institution of higher education, OMB Circular Aï¿½0921 would apply to the costs incurred by the institution of higher education even though OMB Circular Aï¿½0987 would apply to the costs incurred by the State.

I80ï¿½1A3015.196
I89Costs allowable with approval.
I11Each set of cost principles specifically identifies certain costs that, in order to be allowable, must be approved by the awarding agency. Other costs do not require approval. The following procedures govern approval of these costs:
I11(a) When costs are allocated in accordance with a government-wide cost allocation plan or when treated as indirect costs, acceptance of the costs as part of the indirect cost rate or cost allocation plan shall constitute approval.
I11(b)(1) All direct costs must be approved in advance by the awarding agency.
I11(2) When costs are specified in the budget, approval of the budget shall constitute approval of the cost.
I11(3) Specific prior approval in writing from the awarding agency is required if the costs are not specified in the budget, or if there is no approved budget. For this purpose the prior approval procedures of Subpart M shall be followed, except that, for formula or mandatory grants, the awarding agency's written approval may be signed by any authorized official of the awarding agency.
I11(c) The awarding agency may waive or conditionally waive the requirement for its approval of the costs. A waiver, as such, shall be applicable only to the requirement for approval. If it is determined, by audit or otherwise, that the costs do not meet other requirements or tests for allowability specified by the applicable cost principles, such as reasonableness and necessity, the costs may be disallowed.
I11(d) In the case of subgrants and cost-type contracts, no approval shall be given which is inconsistent with the purpose or the provisions of the Federal grant. 

I56Subpart U_Miscellaneous 

I80ï¿½1A3015.200
I89Acknowledgement of support on publications and audiovisuals. 
I11(a) T3Definitions.G1T1 Appendix A defines ``audiovisual,'' ``production of an audiovisual,'' and ``publication.'' 
ï¿½89ï¿½I11(b) T3Publications.G1T1 Recipients shall have an acknowledgement of awarding agency support placed on any publications written or published with grant support and, if feasible, on any publication reporting the results of, or describing, a grant-supported activity. 
I11(c) T3Audiovisuals.G1T1 Recipients shall have an acknowledgement of awarding agency support placed on any audiovisual which is produced with grant support and which has a direct production cost to the recipient of over $5,000. Unless the other provisions of the grant award make it apply, this requirement does not apply to: 
I11(1) Audiovisuals produced under mandatory or formula grants or under subgrants. 
I11(2) Audiovisuals produced as research instruments or for documenting experimentation or findings and not intended for presentation or distribution to the general public. 
I11(d) T3Waivers.G1T1 Awarding agencies may waive any requirement of this section. 

I80ï¿½1A3015.201
I89Use of consultants. 
I11(a) T3Definition.G1T1 Appendix A defines ``consultant.'' 
I11(b) T3Applicability.G1T1 This section applies only to the use of consultants whose fees are supported by a grant, subgrant, or cost-type contract. 
I11(c) T3Basic policy_G1T1(1) T3Prior approval.G1T1 Awarding agencies shall not require prior approval for the use of consultants. 
I11(2) T3Exceptions.G1T1 (i) In unusual cases, using a consultant may constitute a transfer of substantive programmatic work, which requires prior approval under discretionary grants. 
I11(ii) Consulting fees paid by an organization to its own employees require prior approval. 
I11(d) T3Use of an organization's own employees_G1T1(1) T3Faculty members of education institutions.G1T1 Charges representing extra compensation (above base salary) paid by an educational institution to a salaried member of its faculty for consulting work are allowable only in unusual cases, and only if both of the following conditions exist: 
I11(i) The consultation is across departmental lines or involves a separate or remote operation; and 
I11(ii) The work performed by the consultant is in addition to his or her regular departmental load. 
I11(2) T3All other cases.G1T1 In all other cases, consulting fees paid in addition to salary by recipients or cost-type contractors to people who are also their employees may be supported by a grant, subgrant, or cost-type contract only in unusual cases, and only if all of the following three conditions exist: 
I11(i) The policies of the recipient or contractor permit such consulting fee payments to its own employees regardless of whether Federal grant funds are involved; 
I11(ii) The work involved is clearly outside the scope of the person's salaried employment; and 
I11(iii) It would be inappropriate or not feasible to compensate for the additional work by paying additional salary to the employee. 
I11(3) T3Requirement for approval.G1T1 Consulting fees paid under this section must have a specific prior approval in writing from the Head of the recipient or contractor or from his or her designated representative. If the recipient or contractor is a government, the approval may be given by the Head (or a designated representative of the Head) of the government agency which is primarily responsible for administering or carrying out the project or program. If the designated representative is personally involved in the project or program under consideration, the approval may be given only by the Head. If the Head is personally involved in the project or program under consideration, prior approval from the awarding agency is required. Such prior approval must include a determination that the applicable requirements in paragraph (d) (1) or (2) of this section are present. 
I11(e) T3Documentation standards.G1T1 (1) Charges for consulting payments must be supported in the records of the recipient or cost-type contractor by an invoice from the consultant and a copy of the written report (if a report is appropriate) or other documented evidence of the work performed from the consultant. 
I11(2) If any of the following information is not shown on the invoice and/or ï¿½90ï¿½report from the consultant, the information must be shown in a memorandum or other document prepared by the recipient or contractor for its files, or noted in handwriting on the consultant's invoice by the recipient or contractor. The memorandum, other document, or handwritten notation must be signed by an official of the recipient or contractor and show: 
I11(i) The name of the consultant; 
I11(ii) The nature of the services provided (such as statistical analysis of data, participation on project advisory committee, or specified medical services to eligible beneficiaries); 
I11(iii) The relevance of the services to the project or program, if not apparent from the nature of the services; and 
I11(iv) Whichever of the following is applicable: 
I11(A) (If the fee was based on a rate per day or hours worked) the rate and the dates and/or hours worked; 
I11(B) (If the fee was based on a rate per unit of service provided, such as the number of patients examined by a physician) the rate, the number of units of service provided, and the beginning and ending dates of the overall period of service; or
I11(C) (If the fee was determined on some other basis) the basis for determining the fee and the beginning and ending dates of the period in which services were provided. 

I80ï¿½1A3015.202
I89Limits on total payments to the recipient.
I11(a) This section summarizes the four most widely applicable limits on the total amount of money the recipient is entitled to receive from USDA as a result of a grant. It is permissible for the terms of a grant to provide one or more additional limits. 
I11(b) For each grant, the lowest of the applicable limits is the one that governs the final settlement upon expiration or termination of the grant. 
I11(c) The following two limits apply to every grant: 
I11(1) The amount of Federal funds authorized. 
I11(2) The Federal share of the allowable costs incurred by the recipient. 
I11(d) Grants that require a specified percentage of cost-sharing or matching are subject to the limit described in Subpart G. 
I11(e) For each budget period of an incrementally funded discretionary grant, the Federal share of that period's approved budget is a limit.

I80ï¿½1A3015.203
I89[Reserved] 

I80ï¿½1A3015.204
I89Federal Register publications.
I11(a) T3Program regulations.G1T1 Most grant programs have program-specific regulations, which are published in the T4Federal RegisterG1T1 and codified in the T3Code of Federal Regulations.G1T1 In some cases the program-specific regulations are promulgated in the form of agency directives or manuals which may be obtained from the awarding agency.
I11(b) T3Program announcements.G1T1 For each program, the awarding agency may publish in the T4Federal RegisterG1T1 one or more program announcements. Program announcements invite applications for one or more stated program objectives. They include at least the following information:
I11(1) An estimate of how much money will be available for competing awards, and the expected size of the awards, broken down by subprogram or priority area when appropriate;
I11(2) Who is eligible;
I11(3) How to obtain application kits;
I11(4) Where to submit applications; and
I11(5) The deadline for submitting applications.
I11(c) T3Cooperative agreements.G1T1 If any or all of the awards are likely to be cooperative agreements rather than grants, the program announcement so states. In that case, if feasible, the program announcement also describes the anticipated substantial Federal involvement in performance. (This paragraph does not prevent the award of cooperative agreements under a program announcement that mentioned only grants. Nor does it prevent the award of grants under a program announcement that mentioned only cooperative agreements.)
I11(d) T3Evaluation criteria.G1T1 The awarding agency publishes its criteria for evaluating grant applications either in the program regulations or the program announcement. If the criteria are not all equal in importance, their relative ï¿½91ï¿½weights are also published. The criteria cover at least the following factors (except where the nature of the eligible projects makes one or more of these factors irrelevant):
I11(1) How well qualified the project's personnel will be;
I11(2) The adequacy of the applicant's facilities and resources;
I11(3) The adequacy of the project plan or methodology;
I11(4) The cost-effectiveness of the project; and
I11(5) How closely the project objectives fit the objectives for which applications were invited.
I11(e) T3Funding priorities.G1T1 If the awarding agency will give priority to one or more particular kinds of projects, the priority (and how it will be applied in deciding which applications to fund) is described in the program announcement.
I11(f) T3Competing continuations vs. ``new'' projects.G1T1 If the awarding agency will give a preference to competing continuation applications over applications for projects not already receiving support under the program, or vice versa, the preference is described in the program announcement.
I11(g) T3Programs with few potential applicants.G1T1 In some programs the number of potential applicants is relatively small. (For example, in some programs only the States are eligible.) In these situations the awarding agency may send a copy of the program announcement directly to every potential applicant instead of publishing it in the T4Federal Register.G1T1
I11(h) T3Register_Other information which is available.G1T1 In addition to the items specified above, each awarding Agency makes available to the public the following information and materials for each program:
I11(1) A copy of, or reference to, the authorizing statutes for the program;
I11(2) All guidelines of general applicability for administration of the program;
I11(3) A description of the procedures the awarding agency will use for evaluating applications; and
I11(4) Any other information that the awarding agency believes will be helpful.
I11(i) T3Consulting with applicants.G1T1 Each awarding agency publishes as much information as practicable to reduce the need for consultation by applicants. If the awarding agency does provide consultation, its staff members try to give consistent interpretations and fair treatment to all requestors.

I80ï¿½1A3015.205
I89General provisions for grants and cooperative agreements with institutions of higher education, other nonprofit organizations, and hospitals.
I11(a) T3Scope.G1T1 This section sets forth general provisions which apply, in whole or in part, to grants and cooperative agreements awarded by USDA to institutions of higher education, other nonprofit organizations, and hospitals. (General provisions applicable to grants and cooperative agreements with State and local governments are set forth in the Office of Management and Budget (OMB) Circular Aï¿½09102, Attachment M and are made a condition of each grant or cooperative agreement awarded to such recipients). Any statutory provisions that apply to the particular agreement at hand, that are not included herein, shall be made a part of the award document. All administrative requirements contained in subparts A through U of 7 CFR part 3015 shall apply, as appropriate.
I11(b) T3Assurances and compliance.G1T1 It shall be a condition of every USDA grant or cooperative agreement awarded to institutions of higher education, other nonprofit organizations and hospitals that the recipient assure and certify compliance with the following general requirements to the extent applicable:
I11(1) It will comply with the following provisions regarding the rights and welfare of human subjects:
I11(i) The recipient organization is responsible for safeguarding the rights and welfare of any human subjects involved in research, development, and related activities supported by this agreement. The recipient organization may conduct research involving human subjects only as described in the proposal and as approved by the recipient organization's cognizant Institutional Review Board. Prior to conducting such research, the recipient organization shall obtain and document a legally sufficient informed consent from ï¿½92ï¿½each human subject involved. No such informed consent shall include any exculpatory language through which the subject is made to waiver, or to appear to waiver, any of his or her legal rights, including any release of the recipient organization or its agents from liability for negligence.
I11(ii) The recipient organization agrees to comply with U.S. Department of Health and Human Services' regulations regarding human subjects, appearing in 45 CFR part 46 (as amended).
I11(iii) It will comply with USDA policy which is to assure that the risks do not outweigh either potential benefits to the subjects or the expected value of the knowledge sought.
I11(iv) Selection of subjects or groups of subjects shall be made without regard to sex, race, color, religion, or national origin unless these characteristics are factors to be studied.
I11(2) It will comply with the Animal Welfare Act, as amended, 7 U.S.C. 2131, T3et seq.,G1T1 and the regulations promulgated thereunder by the Secretary of Agriculture (9 CFR, Subchapter A) pertaining to the care, handling, and treatment of warm-blooded animals held or used for research, teaching, or other activities supported by Federal funds. Recipient organizations may request registration of facilities and a current listing of licensed dealers from the Regional Office of the Animal and Plant Health Inspection Service (APHIS), USDA, for the Region in which their facility is located. The location of the appropriate APHIS Regional Office, as well as information concerning this requirement, may be obtained by contacting the Senior Staff Officer, Animal Care Staff, USDA/APHIS, Federal Center Building, Hyattsville, Maryland 20782.
I11(3) It will assume primary responsibility for implementing proper conduct or recombinant DNA research and it will comply with the national Institute of Health Guidelines for Recombinant DNA Research, as revised.
I11(4) It will comply with Section 5 of the International Air Transportation Fair Competitive Practices Act of 1974, 49 U.S.C. 1517, which requires:
I11(i) Any air transportation to, from, between, or within a country, other than the U.S., of persons or property, the expense of which will be assisted by USDA funding, to be performed on a U.S.-flag carrier if service provided by such carrier is ``available.''
I11(ii) For the purposes of this requirement:
I11(A) Passenger or freight service by a certificated air carrier is considered ``available'' even though:
I11(T31G1T1) Comparable or a different kind of service by a noncertificated air carrier costs less; or
I11(T32G1T1) Service by a noncertificated air carrier can be paid for in excess foreign currency; or
I11(T33G1T1) Service by a noncertificated air carrier is preferred by the recipient organization contractor or traveler needing air transportation.
I11(B) Passenger service by a certificated air carrier is considered to be ``unavailable'':
I11(T31G1T1) When the traveler, while enroute, has to wait six hours or more for an available U.S. carrier; or
I11(T32G1T1) When any flight by a U.S. carrier interrupted by a stop anticipated to be six hours or more for refueling, reloading repairs, etc., and no other flight by a U.S. carrier is available during the six-hour period; or 
I11(T33G1T1) When the flight by a U.S. carrier takes 12 or more hours longer than a foreign carrier.
I11(5) It possesses legal authority to enter into the agreement; that a resolution, motion or similar action has been duly adopted or passed as an official act of its governing body, authorizing the acceptance of the agreement including all understandings and assurances contained therein and directing and authorizing the person identified as the official representative of the recipient organization to act in connection with the agreement and to provide such additional information as may be required.
I11(6) It will comply with Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d, and in accordance with Title VI of that Act, no person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity ï¿½93ï¿½for which the recipient receives Federal financial assistance and will immediately take any measures necessary to effectuate this agreement.
I11(7) It will establish safeguards to prohibit employees from using their positions for a purpose that is or gives the appearance of being motivated by a desire for private gain for themselves or others, particularly those with whom they have family, business, or other ties.
I11(8) It will give USDA, the awarding agency or the Comptroller General, through any authorized representative, access to and the right to examine all records, books, papers or documents related to the award.
I11(9) It will comply with all requirements imposed by the awarding agency concerning special requirements of law, program requirements, and other administrative requirements.
I11(10) It will insure that the facilities under its ownership, lease or supervision which shall be utilized in the accomplishment of the project are not listed on the Environmental Protection Agency's (EPA) list of violating facilities and that it will notify the awarding agency of the receipt of any communication from the Director of the EPA, Office of Federal Activities, indicating that a facility to be utilized in the project is under consideration for listing by the EPA.
I11(11) It will comply with the flood insurance purchase requirements of the National Flood Insurance Act of 1968, as amended, and the Flood Disaster Protection Act of 1973, 42 U.S.C. 4001ï¿½094127. Section 102(a) requires, on and after March 2, 1975, the purchase of flood insurance in communities where such insurance is available as a condition for construction or acquisition purposes for use in any area that has been identified by the Secretary of the Department of Housing and Urban Development as an area having special flood hazards.
I11(12) It will assist the awarding agency in its compliance with Section 106 of the National Historic Preservation Act of 1966, 16 U.S.C. 470, Executive Order 11593, and the Archaeological and Historic Preservation Act of 1974, 16 U.S.C. 496aï¿½091, T3et. seq.,G1T1 by (i) consulting with the State Historic Preservation Officer on the conduct of investigations, as necessary, to identify properties listed in or eligible for inclusion in the National Register of Historic Places that are subject to adverse effects (see 36 CFR 800.8) by the activity, and notifying the awarding agency of the existence of any such properties, and by (ii) complying with all requirements established by the awarding agency to avoid or mitigate adverse effects upon such properties.
I11(13) It will comply with Title IX of the Education Amendments of 1972, 20 U.S.C. 1681, T3et. seq.,G1T1 which prohibits discrimination on the basis of sex in Federally assisted education programs.
I11(14) It will comply with Section 504 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. 794. Section 504 provides that no otherwise qualified handicapped individual shall solely by reason of his handicap, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.
I11(15) It will comply with the Age Discrimination Act of 1975, 42 U.S.C. 6101ï¿½096107, which prohibits unreasonable discrimination based on age, in programs or activities receiving Federal financial assistance.
I11(16) It is in compliance with the Clean Air Act of 1970, 42 U.S.C. 7401 T3et seq.,G1T1 which requires federally assisted activities to be in conformance with State (Clean Air) Implementation Plan.
I11(17) It will establish safeguards to ensure that USDA funds are properly spent. In particular, except nonprofit organizations which are subject to the lobbying provisions of paragraph B.21. of OMB Circular Aï¿½09122, it will assure that funds are not used for partisan or political activity purposes.
I11(c) USDA awarding agencies shall obtain the required assurances and certifications by including the following clause in each grant or cooperative agreement awarded to institutions of higher education, other nonprofit organizations and hospitals:
Q04
I21As a condition of this grant or cooperative agreement, the recipient assures and certifies that it is in compliance with and will comply in the course of the agreement with all applicable laws, regulations, Executive ï¿½94ï¿½Orders and other generally applicable requirements, including those set out in 7 CFR 3015.205(b), which hereby are incorporated in this agreement by reference, and such other statutory provisions as are specifically set forth herein.
Q04I20[48 FR 27222, June 14, 1983, as amended at 49 FR 38534, Oct. 1, 1984] 

I56Subpart V_Intergovernmental Review of Department of Agriculture Programs and Activities
Q04I21T5Authority:  T1E. O. 12372, July 14, 1982 (47 FR 30959), as amended Apr. 8, 1983 (48 FR 15887): Sec. 401 of the Intergovernmental Cooperation Act of 1968, as amended (31 U.S.C. 6506); sec. 204 of the Demonstration Cities and Metropolitan Development Act of 1966, as amended (42 U.S.C. 3334).
Q04I21T5Source:  T148 FR 29112, June 24, 1983, unless otherwise noted.

I80ï¿½1A3015.300 
I89Purpose.
I11(a) The regulations in this part implement Executive Order 12372, ``Intergovernmental Review of Federal Programs'', issued July 14, 1982, and amended on April 8, 1983. These regulations also implement applicable provisions of section 401 of the Intergovernmental Cooperation Act of 1968 and section 204 of the Demonstration Cities and Metropolitan Development Act of 1966.
I11(b) These regulations are intended to foster an intergovernmental partnership and a strengthened Federalism by relying on State processes and on State, arewide, regional and local coordination for review of proposed Federal financial assistance and direct Federal development.
I11(c) The regulations are intended to aid the internal management of the Department, and are not intended to create any right or benefit enforceable at law by a party against the Department or its officers.

I80ï¿½1A3015.301 
I89Definitions.
I11T3DepartmentG1T1 means the U.S. Department of Agriculture.
I11T3OrderG1T1 means Executive Order 12372, issued July 14, 1982, and amended April 8, 1983, and titled T3Intergovernmental Review of Federal Programs.G1T1
I11T3SecretaryG1T1 means the Secretary of the U.S. Department of Agriculture or an official or employee of the Department acting for the Secretary under a delegation of authority.
I11T3StateG1T1 means any of the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, the U.S. Virgin Island, or the Trust Territory of the Pacific Islands.

I80ï¿½1A3015.302 
I89Applicability.
I11The Secretary publishes in the T4Federal RegisterG1T1 a list of the Department's programs and activities that are subject to these regulations and identifies which of these are subject to the requirements of section 204 of the Demonstration Cities and Metropolitan Development Act.

I80ï¿½1A3015.303 
I89Secretary's general responsibilities.
I11(a) The Secretary provides opportunities for consultation by elected officials of those State and local governments that would provide the non-Federal funds for, or that would be directly affected by, proposed Federal financial assistance from, or direct Federal development by, the Department.
I11(b) If a State adopts a process under the Order to review and coordinate proposed Federal financial assistance and direct Federal development, the Secretary, to the extent permitted by law:
I11(1) Uses the State process to determine official views of State and local elected officials;
I11(2) Communicates with State and local elected officials as early in a program planning cycle as is reasonably feasible to explain specific plans and actions;
I11(3) Makes efforts to accommodate State and local elected officials' concerns with proposed Federal financial assistance and direct Federal development that are communicated through the State process;
I11(4) Allows the States to simplify and consolidate existing Federally required State plan submissions;
I11(5) Where State planning and budgeting systems are sufficient and where ï¿½95ï¿½permitted by law, encourages the substitution of State plans for Federally required State plans;
I11(6) Seeks the coordination of views of affected State and local elected officials in one State with those of another State when proposed Federal financial assistance or direct Federal development has an impact on interstate metropolitan urban centers or other interstate areas; and 
I11(7) Supports State and local governments by discouraging the reauthorization or creation of any planning organization which is Federally-funded, which has a limited purpose, and which is not adequately representative of, or accountable to, State or local elected officials.

I80ï¿½1A3015.304 
I89Federal interagency coordination.
I11The Secretary, to the extent practicable, consults with and seeks advice from all other substantially affected Federal departments and agencies in an effort to assure full coordination between such agencies and the Department regarding programs and activities covered under these regulations.

I80ï¿½1A3015.305 
I89State selection of programs and activities.
I11(a) A State may select any program or activity published in the T4Federal RegisterG1T1 in accordance with ï¿½1A3015.302 of this subpart for intergovernmental review under these regulations. Each State, before selecting programs and activities, shall consult with local elected officials.
I11(b) Each State that adopts a process shall notify the secretary of the Department's programs and activities selected for that process.
I11(c) A State may notify the Secretary of changes in its selections at any time. For each change, the State shall submit to the Secretary an assurance that the State has consulted with elected local officials regarding the change. The Department may establish deadlines by which States are required to inform the Secretary of changes in their program selections.
I11(d) The Secretary uses a State's process as soon as feasible, depending on individual programs and activities, after the Secretary is notified of its selections.

I80ï¿½1A3015.306 
I89Communication with State and local elected officials.
I11(a) The Secretary provides notice to directly affected State, areawide, regional, and local entities in a State of proposed Federal financial asssistance or direct Federal development if:
I11(1) The State has not adopted a process under the Order; or
I11(2) The assistance or development involves a program or an activity that is not covered under the State process.
I11(b) This notice may be made by publication in the T4Federal RegisterG1T1 or other appropriate means, which the Department in its discretion deems appropriate.
I11(c) In order to facilitate communication with State and local officials the Secretary has established an office within the Department to receive all communications pertinent to this Order. All communications should be sent to the Office of Finance and Management, Room 143ï¿½09W, Administration Building, Washington, DC 20250, Attention: E.O. 12372.

I80ï¿½1A3015.307 
I89State comments on proposed Federal financial assistance and direct Federal development.
I11(a) Except in unusual circumstances, the Secretary gives State processes or directly affected State, areawide, regional, and local officials and entities:
I11(1) At least 30 days from the date established by the Secretary to comment on proposed Federal financial assistance in the form of noncompeting continuation awards; and
I11(2) At least 60 days from the date established by the Secretary to comment on proposed direct Federal development or Federal financial assistance other than noncompeting continuation awards.
I11(b) This section also applies to comments in cases in which the review, coordination and communication with the Department have been delegated.
I11(c) Applicants for programs and activities subject to section 204 of the Demonstration Cities and Metropolitan Development Act shall allow areawide agencies a 60-day opportunity for review and comment.

ï¿½96ï¿½I80ï¿½1A3015.308 
I89Processing comments.
I11(a) The Secretary follows the procedures in ï¿½1A3015.309 if:
I11(1) A State office or official is designated to act as a single point of contact between a State process and all Federal agencies; and
I11(2) That office or official transmits a State process recommendation for a program selected under ï¿½1A3015.305.
I11(b)(1) The single point of contact is not obligated to transmit comments form State, areawide, regional or local officials and entities where there is no State process recommendation.
I11(2) If a State process recommendation is transmitted by a single point of contact, all comments from State, areawide, regional, and local officials and entities that differ from it must also be transmitted.
I11(c) If a State has not established a process, or is unable to submit a State process recommendation, State, areawide, regional and local officials and entities may submit comments either to the applicant or to the Department.
I11(d) If a program or activity is not selected by a State process, State, areawide, regional and local officials and entities may submit comments either to the applicant or to the Department. In addition, if a State process recommendation for a non-selected program or activity is transmitted to the Department by the single point of contact, the Secretary follows the procedures of ï¿½1A3015.309 of this subpart.
I11(e) The Secretary considers comments which do not constitute a State process recommendation submitted under these regulations and for which the Secretary is not required to apply the procedures of ï¿½1A3015.309 of this subpart, when such comments are provided by a single point of contact by the applicant, or directly to the Department by a commenting party.

I80ï¿½1A3015.309 
I89Accommodation of intergovernmental concerns.
I11(a) If a State process provides a State process recommendation to the Department through its single point of contact, the Secretary either_
I11(1) Accepts the recommendations;
I11(2) Reaches a mutually agreeable solution with the State process; or
I11(3) Provides the single point of contact with a written explanation of the decision, as the Secretary in his or her discretion deems appropriate. The Secretary may also supplement the written explanation by also providing the explanation to the single point of contact by telephone, other telecommunication, or other means.
I11(b) In any explanation under paragraph (a)(3) of this section, the Secretary informs the single point of contact that:
I11(1) The Department will not implement its decision for at least ten days after the single point of contact receives the explanation; or
I11(2) The Secretary has reviewed the decision and determined that, because of unusual circumstances, the waiting period of at least ten days is not feasible.
I11(c) For purposes of computing the waiting period under paragraph (b)(1) of this section, a single point of contact is presumed to have received written notification five days after the date of mailing of such notification.

I80ï¿½1A3015.310 
I89Interstate situations.
I11(a) The Secretary is responsible for:
I11(1) Identifying proposed Federal financial assistance and direct Federal development that have an impact on interstate areas;
I11(2) Notifying appropriate officials in States which have adopted a process and which selected the Department's program or activity;
I11(3) Making efforts to identify and notify the affected State, areawide, regional, and local officials and entities in those States that have not adopted a process under the Order or do not select the Department's program or activity; and
I11(4) Responding, pursuant to ï¿½1A3015.309 of this subpart, if the Secretary receives a recommendation from a designated areawide agency transmitted by a single point of contact, in cases in which the review, coordination, and communication with the Department have been delegated.
I11(b) The Secretary uses the procedures in ï¿½1A3015.309 if a State process provides a State process recommendation to the Department through a single point of contact.

ï¿½97ï¿½I80ï¿½1A3015.311 
I89Simplification, consolidation, or substitution of State plans.
I11(a) As used in this section:
I11(1) T3SimplifyG1T1 means that a State may develop its own format, choose its own submission date, and select the planning period for a State plan.
I11(2) T3ConsolidateG1T1 means that a State may meet statutory and regulatory requirements by combining two or more plans into one document and that the State can select the format, submission date, the planning period for the consolidated plan.
I11(3) T3SubstituteG1T1 means that a State may use a plan or other document that it has developed for its own purposes to meet Federal requirements.
I11(b) If not inconsistent with law, a State may decide to try to simplify, consolidate, or substitute Federally required State plans without prior approval by the Secretary.
I11(c) The Secretary reviews each State plan a State has simplified, consolidated or substituted and accepts the plan only if its contents meet Federal requirements.

I80ï¿½1A3015.312 
I89Waivers.
I11In an emergency, the Secretary may waive any provision of these regulations. 
S8002
I95Pt. 3015, App. A
I85Appendix A to Part T13015G1T5T4_DefinitionsG1T5
I21Section IT3``Grant'' and ``Cooperative Agreement''G1T1
Q02
I21(a) ``Grant'' unless qualified by ``non-Federal'' means an award by the Federal government of money, property instead of money, services, or anything of value, to the State or other recipient, with the following characteristics:
I21(1) The principal purpose of the award is to accomplish a public purpose of support or stimulation authorized by Federal statute, rather than acquisition, by purchase, lease, or barter, of property or services for the direct benefit or use of the Federal government; and
I21(2) At the time the award is made, no substantial involvement is anticipated between the executive agency, acting for the Federal government, and the State or local government or other recipient during performance of the contemplated activity.
I21(b) ``Cooperative agreement'' has the same meaning as ``grant,'' except that, at the time a cooperative agreement is awarded, substantial involvement is anticipated between the executive agency, acting for the Federal government, and the State or local government or other recipient during performance of the contemplated activity.
I21(c) ``Grants'' and ``cooperative agreements'' do not include technical assistance, which provides services instead of money; revenue sharing; loans; loan guarantees; capital contributions to loan funds; interest subsidies; insurance; or direct appropriations. (See the definition of ``Non-Federal grant'' in Section II of this appendix.)
Q02
I21Section IIT3Other Definitions.G1T1
Q02
I21``Acquisition'' of property includes purchase, construction, or fabrication of property. It does not include rental of property or alterations and renovations of real property.
I21``Acquisition cost'' of an item of purchased equipment means the net invoice price of the equipment. It includes the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the equipment useable for the purpose for which it was acquired. Other charges, such as the cost of installation, transportation, taxes, duty, or protective in-transit insurance shall be included in or excluded from the unit acquisition cost in accordance with the regular accounting practices of the organization purchasing the equipment.
I21If an item of equipment is acquired by trading in another item and paying an additional amount, ``acquisition cost'' means the amount received for trade-in plus the additional outlay. (See the definition of ``amount received for trade-in.'')
I21For purposes of the rules on equipment and supplies, ``acquisition cost'' of a copy of a work of authorship (such as a book, print of a motion picture, or tape of a television program) refers to the cost of fabricating or purchasing the individual copy, considered as a material object. It does not include the cost of developing, or acquiring rights to, the work embodied in the copy.
I21``Advance by Treasury check'' is a payment made by a Treasury check to a recipient of a grant or cooperative agreement, before payments are made by the recipient of the grant or cooperative agreement. Advances by Treasury check are based on either a periodic request from the recipient or a predetermined payment schedule.
I21``Amount received for trade-in'' of an item of equipment traded in for replacement equipment means the amount that would have been paid for the replacement equipment without a trade-in, minus the amount paid with the trade-in. The term refers to the actual difference, not necessarily the trade-in value, shown on an invoice. For example, suppose that a recipient can buy a new machine for $5,000 in cash. The recipient actually buys this machine by trading in a used machine and paying $3,000 in cash. In this case, the amount received for trade-in ï¿½98ï¿½would be $2,000 ($5,000 minus $3,000) regardless of the trade-in allowance shown on the invoice.
I21``Approved budget'' means a budget (including any revised budget) which has been approved in writing by the awarding agency. (See the definition of ``budget.'')
I21``Audiovisual'' means a product containing visual imagery or sound or both. Examples of audiovisuals are motion pictures, live or prerecorded radio or television programs, slide shows, filmstrips, audio recordings, and multimedia presentations.
I21``Awarding agency'' means (1) for grants and cooperative agreements, the USDA agency making the award, and (2) for subgrants, the recipient.
I21``Bid guarantee'' means a firm commitment such as a bid bond, certified check, or other negotiable instrument, accompanying a bid as assurance that the bidder will, if its bid is accepted, execute the required contractual documents within the time specified.
I21``Budget'' means the recipient's financial expenditure plan approved by the awarding agency to carry out the purposes of the Federally-supported project. The budget is comprised of both the Federal share and any non-Federal share of such plan and any subsequent authorized rebudgeting of funds.
I21For those programs that do not involve Federal approval of the non-Federal share of costs, such as research grants, the term ``budget'' means the financial expenditure plan approved by the awarding agency including any subsequent authorized rebudgeting of funds, for the use of Federal funds only. Any expenditures charged to an approved budget consisting of Federal and non-Federal shares are deemed to be supported by the grant in the same proportion as the percentage of Federal/non-Federal participation in the overall budget.
I21``Budget period'' means the period specified in the grant or cooperative agreement during which Federal funds awarded are authorized to be expended, obligated, or firmly committed by the recipient for the purposes specified in the agreement.
I21``Closeout'' of a grant or cooperative agreement means the process by which an awarding agency determines that all applicable administrative actions and all required work of the grant or cooperative agreement have been completed by the recipient and the awarding agency.
I21``Consultant'' means a person who gives advice or services for a fee, but not as an employee. The term includes guest speakers when not acting as employees of the party that engages them. Note that in unusual cases it is possible for a person to be both an employee and a consultant at the same time. (See ï¿½1A3015.201.)
I21``Contract'' means a procurement contract awarded under a grant, cooperative agreement, or subgrant; and ``subcontract'' means a procurement subcontract under such a contract. Procurement contracts and subcontracts are ones which place the parties in a buyer-seller relationship, regardless of the label used by the parties to describe the relationship (e.g., purchase-of-service agreement). The terms ``contract'' and ``subcontract'' do not include any agreements between organizational components of the same legal entity, even if one of the components provides property or services to or for the other. (See definitions of ``subgrant,'' ``cost-type contract,'' and ``fixed price contract.'')
I21``Cost-sharing'' and ``matching'' each mean the value of third party in-kind contributions plus that portion of the allowable costs of recipients not supported by the Federal Government. (The terms ``cost-sharing'' and ``matching,'' in this part, are synonymous.)
I21``Cost-type contract'' means a contract or subcontract in which the contractor or subcontractor is paid on the basis of the costs it incurs. The term includes cost-plus-fixed-fee contracts and subcontracts. (However, the term does not include any subcontracts under a ``fixed-price contract.'')
I21``Discretionary'' grants and cooperative agreements are ones which a Federal statute authorizes but does not require USDA to award.
I21``Equipment'' means an article of tangible personal property that has a useful life of more than two years and acquisition cost of $500 or more. Any recipient may use its own definition of equipment if its definition would at least include all items of equipment as defined here.
I21``Expenditure report'' means (1) for nonconstruction awards, the ``Financial Status Report'' (or other equivalent report); (2) for construction awards, the ``Outlay Report and Request for Reimbursement for Construction Programs'' (or other equivalent report).
I21``Federal funds authorized'' means the total amount of Federal funds obligated by the Federal Government for use by the recipient. This amount is a limit on the total amount of money that the recipient is entitled to receive from the Federal Government as a result of the award. In addition to this limit, there are other limits. Refer to ï¿½1A3015.202 for a summary of these.
I21``Federally recognized Indian Tribal government'' means the governing body or a governmental agency of any Indian tribe, band, nation, or other organized group or community (including any Native village as defined in section 3 of the Alaska Native Claims Settlement Act, 85 Stat. 688) certified by the Secretary of the Interior as eligible for the special programs and services provided by him or her through the Bureau of Indian Affairs.
I21``Fidelity bond'' means a bond indemnifying the recipient against losses resulting ï¿½99ï¿½from the fraud or lack of integrity, honesty or fidelity of one or more employees, officers or other persons holding a position of trust.
I21``Fixed-price contract'' means any contract except a cost-type contract. The term includes firm-fixed price contracts. It also includes contracts under which the contractor is paid at a fixed rate per unit of service or unit of labor time. (See the definitions of ``contract'' and ``cost-type contract.'')
I21``General program income'' means all program income except the special categories treated in ï¿½1A3015.43 through 3015.46. The term ``general program income'' is limited to amounts that accrue to a recipient of grant or cooperative agreement during the period of Federally assisted support, or to a subrecipient during the period of sub-award support.
I21``Local government'' means a local unit of government including specifically, a county, municipality, city, town, township, local public authority, school district, special district, intra-state district, council of governments (whether or not incorporated as a nonprofit corporation under State law), sponsor or sponsoring local organization of a watershed project (as defined in 7 CFR 620.2, 40 FR 12472, March 19, 1974), any other regional or interstate government entity, or any agency or instrumentality of a local government.
I21``Mandatory'' or ``formula'' grants and cooperative agreements are ones which a Federal statute requires USDA to award if the applicant meets specified conditions.
I21``Non-Federal grant'' means an award of financial assistance in the form of money which includes no Federal funds, and for which the recipient must account to the donor on an actual cost basis. The term does not include any award that would be excluded from the definitions of ``grant'' and ``cooperative agreement'' if it were made by the Federal government.
I21``Obligations'' means the amounts of orders placed, contracts and subgrants awarded, services received, and similar transactions during a given period, which will require payment during the same or future period.
I21``O&F'' means the Office of Operations and Finance, which is an organizational component in USDA reporting to the Assistant Secretary for Administration.
I21``OMB'' means the Office of Management and Budget in the Executive Office of the President.
I21``Outlays'' means charges made to the grant project or program. Outlays may be reported on a cash or accrual basis.
I21``Payment bond'' means a bond executed in connection with a contract, to assure payment as required by law of all persons supplying labor and materials in the execution of the work provided in the contract.
I21``Percentage-of-completion method'' refers to a system under which payments are made for construction work according to the percentage of completion of the work, instead of the recipient's rate of disbursements.
I21``Performance bond'' means a bond executed in connection with a contract to secure fulfillment of all the contractor's obligations under the contract.
I21``Personal property'' means property of any kind except real property. It may be tangible_having physical existence, or intangible_having no physical existence, such as patents, inventions, and copyrights.
I21``Production of an audiovisual'' means any of the steps that lead to a finished audiovisual, including design, layout, script-writing, filming, editing, fabrication, sound recording, or taping. The term does not include the placing of captions for the hearing impaired on films or videotapes not originally produced for use with the hearing impaired.
I21``Program income'' means gross income earned by a recipient from activities supported by a grant or cooperative agreement. (See definition of ``supported by a grant or cooperative agreement.'') It includes but is not limited to income in the form of fees for services performed during the life of the grant, cooperative agreement, or subgrant, proceeds from sale of tangible personal or real property, usage or rental fees, and patent or copyright royalties. If income meets this definition, it shall be considered program income regardless of the method used to calculate the amount paid to the recipient whether, for example, by a cost-reimbursement method or fixed price arrangement. Nor will the income's classification as program income be affected by the fact that the recipient earns it from a procurement contract awarded to the recipient (1) by the Federal government or (2) by another recipient acting under another Federal grant, cooperative agreement, or subgrant.
Q02
S8003I20The following are not considered program income:
S8002I21(1) ``Revenues'' raised by a government recipient under its governing powers, such as taxes, special assessments, levies, and fines. (However, the receipt and expenditure of these revenues shall be recorded as a part of the transactions of the Federally-assisted project or program when the revenues are specifically earmarked for the project in accordance with the terms of the grant, cooperative agreement, or subgrant.)
I21(2) Tuition and related fees received by an institution of higher education for a regularly offered course taught by an employee performing under a grant, cooperative agreement, or subgrant.
I21(3) Income earned by contractors or subcontractors.
I21(4) Internal reimbursements or transfers of funds between organizational components of the same legal entity (e.g., between agencies of the same government).
I21(5) Third party in-kind contributions.
ï¿½100ï¿½I21(6) Gifts or financial assistance from another source, such as (i) a non-Federal grant, (ii) another Federal grant, and (iii) charitable contributions (whether or not for a restricted purpose), and
I21(7) Interest or other investment income earned from investing advances of Federal cash. (This kind of income is treated in ï¿½1A3015.46.)
I21``Project period'' means the total time for which the recipient's project or program is approved for support including any extensions. Project periods may consist of one or more budget periods.
I21``Publication'' means a published book, periodical, pamphlet, brochure, flier, or similar item. It does not include any audiovisuals.
I21``Real property'' means land, land improvements, structures, and things attached to them so as to become a part of them. Movable machinery and other kinds of equipment are not real property. If a question comes up about whether certain property should be classified as real property, the law of the State or foreign country in which the property is located governs.
I21``Recipient'' means a State or local government, Federally recognized Indian Tribe, university, non-profit, for profit, or other organization that is a recipient of grants or cooperative agreements from a USDA agency.
I21``Replacement equipment'' means property acquired to take the place of other equipment. To qualify as replacement equipment, it must serve the same function as the equipment replaced and must be of the same nature or character, although not necessarily the same model, grade, or quality.
I21``State'' means any of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory, possession, or trust territory of the United States, or any agency or instrumentality of a State. The term does not include local governments.
I21``Subgrant'' means an award of money, or property instead of money, which:
I21(1) Is made under a grant or cooperative agreement by the recipient of the grant or cooperative agreement; and
I21(2) Is made principally to accomplish a purpose of support of stimulation rather than to establish a buyer-seller relationship between the two parties.
I21Any award which meets that definition is a subgrant even if the parties to the award use some other label such as ``grant,'' ``agreement,'' ``cooperative agreement,'' ``contract,'' ``allotment,'' or ``delegation agreement.'' Also, if the award meets that definition, it is a subgrant whether or not the awarding agency is expected to be substantially involved in its performance. However, the term ``subgrant'' does not include any type of assistance which is excluded from the definitions of ``grant'' and ``cooperative agreement'' by Section I(c) of this Appendix.
I21``Supplies'' means all tangible personal property other than equipment.
I21``Supported by a grant or cooperative agreement,'' as applied to a cost or an activity, means that the cost or the cost of the activity is entirely or partly (1) treated as a direct cost under a grant, cooperative agreement, subgrant, or cost-type contract, and (2) either supported by Federal funds or counted towards a Federal cost-sharing or matching requirement.
I21``Suspension'' of an award means temporary withdrawal of the recipient's authority to obligate the funds awarded pending corrective action by the recipient or a decision to terminate the award.
I21``Termination'' of an award means permanent withdrawal of the recipient's authority to obligate previously awarded funds before that authority would otherwise expire. It also means the voluntary relinquishment of that authority by the recipient.
I21``Termination'' does not include:
I21(a) Withdrawal of the unobligated balance upon expiration of award;
I21(b) Refusal by the awarding agency to extend an award or to award additional funds (such as refusal to make a competing or noncompeting continuation, renewal, extension, or supplemental award);
I21(c) Annulment, i.e., voiding of an award upon determination that the award was obtained fraudulently or was otherwise illegal or invalid from inception;
I21(d) Withdrawal of surplus Federal funds from a discretionary grant or any analogous withdrawal of funds by a recipient from a subrecipient; or
I21(e) Withdrawal from a mandatory or formula grant of surplus Federal funds authorized which the recipient will not obligate during the fiscal year, or any analogous withdrawal of funds by a recipient from a subrecipient.
I21``Terms'' of a grant, cooperative agreement, subgrant, or contract means all rights and duties created by the award, whether stated in statute, this part or other regulations, the award document itself, or any other document.
I21``Third party'' means, with respect to a grant or cooperative agreement, any entity except (1) the Federal government, (2) the recipient of the cooperative agreement, and (3) subrecipients under that grant or cooperative agreement. Note that contractors of recipients are third parties under this definition, although subrecipients are not.
I21``Third party in-kind contributions'' means property or services benefiting the federally assisted project or program which are contributed by third parties without charge. Note that the term does not include any costs incurred by the recipient or subrecipient.
I21``Unliquidated obligations,'' means, for financial reports prepared on a cash basis, the ï¿½101ï¿½amount of obligations incurred by the recipient that has not been paid. For reports prepared on an accrued expenditure basis, they are the amount of obligations incurred by the recipient for which an outlay has not been recorded.
I21``Unobligated balance'' is the portion of Federal funds authorized which has not been obligated by the recipient. It is calculated by subtracting the Federal share of the recipient's cumulative obligations from the cumulative Federal funds authorized.
S8002
I95Pt. 3015, App. B
I85Appendix B to Part T13015G1T5T4_OMB Circular Aï¿½09G1T5G1T5128G1T5T4, ``Audits of State and Local Governments''G1T5
I74Executive Office of the President
I73Office of Management and Budget
I71Circular No. Aï¿½09128
I71April 12, 1984
I26To the Heads of Executive Departments and Establishments.
I26Subject: Audits of State and Local Governments.
Q04
I211. T3Purpose.G1T1 G1T1This Circular is issued pursuant to the Single Audit Act of 1984, Pub. L. 98ï¿½09502. It establishes audit requirements for State and local governments that receive Federal aid, and defines Federal responsibilities for implementing and monitoring those requirements.G1T1
I212. T3Supersession.G1T1 G1T1The Circular supersedes Attachment P, ``Audit Requirements,'' of Circular Aï¿½09102, ``Uniform requirements for grants to State and local governments.''G1T1
I213. T3Background.G1T1 G1T1The Single Audit Act builds upon earlier efforts to improve audits of Federal aid programs. The Act requires State or local governments that receive $100,000 or more a year in Federal funds to have an audit made for that year. Section 7505 of the Act requires the Director of the Office of Management and Budget to prescribe policies, procedures and guidelines to implement the Act. It specifies that the Director shall designate ``cognizant'' Federal agencies, determine criteria for making appropriate charges to Federal programs for the cost of audits, and provide procedures to assure that small firms or firms owned and controlled by disadvantaged individuals have the opportunity to participate in contracts for single audits.G1T1
I214. T3Policy.G1T1 G1T1The Single Audit Act requires the following:G1T1
I21a. State or local governments that receive $100,000 or more a year in Federal financial assistance shall have an audit made in accordance with this Circular.
I21b. State or local governments that receive between $25,000 and $100,000 a year shall have an audit made in accordance with this Circular, or in accordance with Federal laws and regulations governing the programs they participate in.
I21c. State or local governments that receive less than $25,000 a year shall be exempt from compliance with the Act and other Federal audit requirements. These State and local governments shall be governed by audit requirements prescribed by State or local law or regulation.
I21d. Nothing in this paragraph exempts State or local governments from maintaining records of Federal financial assistance or from providing access to such records to Federal agencies, as provided for in Federal law or in Circular Aï¿½09102, ``Uniform requirements for grants to State or local governments.''
I215. T3Definitions.G1T1 G1T1For the purposes of this Circular the following definitions from the Single Audit Act apply:G1T1
I21a. T3Cognizant agencyG1T1 means the Federal agency assigned by the Office of Management and Budget to carry out the responsibilities described in paragraph 11 of this Circular.
I21b. T3Federal financial assistanceG1T1 means assistance provided by a Federal agency in the form of grants, contracts, cooperative agreements, loans, loan guarantees, property, interest subsidies, insurance, or direct appropriations, but does not include direct Federal cash assistance to individuals. It includes awards received directly from Federal agencies, or indirectly through other units of State and local governments.
I21c. T3Federal agencyG1T1 has the same meaning as the term `agency' in section 551(1) of Title 5, United States Code.
I21d. T3Generally accepted accounting principlesG1T1 has the meaning specified in the generally accepted government auditing standards.
I21e. T3Generally accepted government auditing standardsG1T1 means the T3Standards For Audit of Government Organizations, Programs, Activities, and Functions,G1T1 G1T1developed by the Comptroller General, dated February 27, 1981.G1T1
I21f. T3Independent auditorG1T1 means:
I21(1) A State or local government auditor who meets the independence standards specified in generally accepted government auditing standards; or
I21(2) A public accountant who meets such independence standards.
I21g. T3Internal controlsG1T1 means the plan of organization and methods and procedures adopted by management to ensure that:
I21(1) Resource use is consistent with laws, regulations, and policies;
I21(2) Resources are safeguarded against waste, loss, and misuse; and
I21(3) Reliable data are obtained, maintained, and fairly disclosed in reports.
I21h. T3Indian tribeG1T1 means any Indian tribe, band, nations, or other organized group or community, including any Alaskan Native village or regional or village corporations (as defined in, or established under, the Alaskan ï¿½102ï¿½Native Claims Settlement Act) that is recognized by the United States as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.
I21i. T3Local governmentG1T1 means any unit of local government within a State, including a county, a borough, municipalitity, city, town, township, parish, local public authority, special district, school district, intrastate district, council of governments, and any other instrumentality of local government.
I21j. T3Major Federal Assistance Program,G1T1 as defined by Pub. L 98ï¿½09502, is described in the Attachment to this Circular.
I21k. T3Public accountantsG1T1 means those individuals who meet the qualification standards included in generally accepted government auditing standards for personnel performing government audits.
I21l. T3StateG1T1 means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam American Samoa, the Commonwealth of the Northern Mariana Islands, and the Trust Territory of the Pacific Islands, any instrumentality thereof, and any multi-State, regional, or interstate entity that has governmental functions and any Indian tribe.
I21m. T3SubrecipientG1T1 means any person or government department, agency, or establishment that receives Federal financial assistance to carry out a program through a State or local government, but does not include an individual that is a beneficiary of such a program. A subrecipient may also be a direct recipient of Federal financial assistance.
I216. T3Scope of audit.G1T1 G1T1The Single Audit Act provides that:G1T1
I21a. The audit shall be made by an independent auditor in accordance with generally accepted government auditing standards covering financial and compliance audits.
I21b. The audit shall cover the entire operations of a State or local government or, at the option of that government, it may cover departments, agencies or establishments that received, expended, or otherwise administered Federal financial assistance during the year. However, if a State or local government receives $25,000 or more in General Revenue Sharing Funds in a fiscal year, it shall have an audit of its entire operations. A series of audits of individual departments, agencies, and establishments for the same fiscal year may be considered a single audit.
I21c. Public hospitals and public colleges and universities may be excluded from State and local audits and the requirements of this Circular. However, if such entities are excluded, audits of these entities shall be made in accordance with statutory requirements and the provisions of Circular Aï¿½09110, T3Uniform requirements for grants to universities, hospitals, and other nonprofit organizations.G1T1
I21d. The auditor shall determine whether:
I21(1) The financial statements of the government, department, agency or establishment present fairly its financial position and the results of its financial operations in accordance with generally accepted accounting principles;
I21(2) The organization has internal accounting and other control systems to provide reasonable assurance that it is managing Federal financial assistance programs in compliance with applicable laws and regulations; and
I21(3) The organization has complied with laws and regulations that may have material effect on its financial statements and on each major Federal assistance program.
I217. T3Frequency of audit.G1T1 Audits shall be made annually unless the State or local government has, by January 1, 1987, a constitutional or statutory requirement for less frequent audits. For those governments, the cognizant agency shall permit biennial audits, covering both years, if the government so requests. It shall also honor requests for biennial audits by governments that have an administrative policy calling for audits less frequent than annual, but only for fiscal years beginning before January 1, 1987.
I218. T3Internal control and compliance reviews.G1T1 The Single Audit Act requires that the independent auditor determine and report on whether the organization has internal control systems to provide reasonable assurance that it is managing Federal assistance programs in compliance with applicable laws and regulations.
I21a. T3Internal control review.G1T1 In order to provide this assurance the auditor must make a study and evaluation of internal control systems used in administering Federal assistance programs. The study and evaluation must be made whether or not the auditor intends to place reliance on such systems. As part of this review, the auditor shall:
I21(1) Test whether these internal control systems are functioning in accordance with prescribed procedures.
I21(2) Examine the recipient's system for monitoring subrecipients and obtaining and acting on subrecipient audit reports.
I21b. T3Compliance review.G1T1 The law also requires the auditor to determine whether the organization has complied with laws and regulations that may have a material effect on each major Federal assistance program.
I21(1) In order to determine which major programs are to be tested for compliance, State and local governments shall identify in their accounts all Federal funds received and expended and the programs under which they were received. This shall include funds received directly from Federal agencies and through other State and local governments.
ï¿½103ï¿½I21(2) The review must include the selection and testing of a representative number of charges from each major Federal assistance program. The selection and testing of transactions shall be based on the auditor's professional judgment considering such factors as the amount of expenditures for the program and the individual awards; the newness of the program or changes in its conditions; prior experience with the program, particularly as revealed in audits and other evaluations (e.g., inspections, program reviews); the extent to which the program is carried out through subrecipients; the extent to which the program contracts for goods or services; the level to which the program is already subject to program reviews of other forms of independent oversight; the adequacy of the controls for ensuring compliance; the expectation of adherence or lack of adherence to the applicable laws and regulations; and the potential impact of adverse findings.
I21(a) In making the test of transactions, the auditor shall determine whether:

Q02
I26_The amounts reported as expenditures were for allowable services, and
I26_The records show that those who received services or benefits were eligible to receive them.

Q02
I21(b) In addition to transaction testing, the auditor shall determine whether:

Q02
I26_Matching requirements, levels of effort and earmarking limitations were met,
I26_Federal financial reports and claims for advances and reimbursements contain information that is supported by the books and records from which the basic financial statements have been prepared, and
I26_Amounts claimed or used for matching were determined in accordance with OMB Circular Aï¿½0987, ``Cost principles for State and local governments,'' and Attachment F of Circular Aï¿½09102, ``Uniform requirements for grants to State and local governments.''

Q02
I21(c) The principal compliance requirements of the largest Federal aid programs may be ascertained by referring to the T3Compliance Supplement for Single Audits of State and Local Governments,G1T1 issued by OMB and available from the Government Printing Office. For those programs not covered in the Compliance Supplement, the auditor may ascertain compliance requirements by researching the statutes, regulations, and agreements governing individual programs.
I21(3) Transactions related to other Federal assistance programs that are selected in connection with examinations of financial statements and evaluations of internal controls shall be tested for compliance with Federal laws and regulations that apply to such transactions.
I219. T3Subrecipients.G1T1 State or local governments that receive Federal financial assistance and provide $25,000 or more of it in a fiscal year to a subrecipient shall:
I21a. Determine whether State or local subrecipients have met the audit requirements of this Circular and whether subrecipients covered by Circular Aï¿½09110, ``Uniform requirements for grants to universities, hospitals, and other nonprofit organizations,'' have met that requirement;
I21b. Determine whether the subrecipient spent Federal assistance funds provided in accordance with applicable laws and regulations. This may be accomplished by reviewing an audit of the subrecipient made in accordance with this Circular, Circular Aï¿½09110, or through other means (e.g., program reviews) if the subrecipient has not yet had such an audit;
I21c. Ensure that appropriate corrective action is taken within six months after receipt of the audit report in instances of noncompliance with Federal laws and regulations;
I21d. Consider whether subrecipient audits necessitate adjustment of the recipient's own records; and
I21e. Require each subrecipient to permit independent auditors to have access to the records and financial statements as necessary to comply with this Circular.
I2110. T3Relation to other audit requirements.G1T1 The Single Audit Act provides that an audit made in accordance with this Circular shall be in lieu of any financial or financial compliance audit required under individual Federal assistance programs. To the extent that a single audit provides Federal agencies with information and assurances they need to carry out their overall responsibilities, they shall rely upon and use such information. However, a Federal agency shall make any additional audits which are necessary to carry out its responsibilities under Federal law and regulation. Any additional Federal audit effort shall be planned and carried out in such a way as to avoid duplication. 
I21a. The provisions of this Circular do not limit the authority of Federal agencies to make, or contract for audits and evaluations of Federal financial assistance programs, nor do they limit the authority of any Federal agency Inspector General or other Federal audit official. 
I21b. The provisions of this Circular do not authorize any State or local government or subrecipient thereof to constrain Federal agencies, in any manner, from carrying out additional audits. 
I21c. A Federal agency that makes or contracts for audits in addition to the audits made by recipients pursuant to this Circular shall, consistent with other applicable laws and regulations, arrange for funding the cost of such additional audits. Such additional audits include economy and efficiency audits, program results audits, and program evaluations. 
ï¿½104ï¿½I2111. T3Cognizant agency responsibilities.G1T1 The Single Audit Act provides for cognizant Federal agencies to oversee the implementation of this Circular. 
I21a. The Office of Management and Budget will assign cognizant agencies for States and their subdivisions and larger local governments and their subdivisions. Other Federal agencies may participate with an assigned cognizant agency, in order to fulfill the cognizance responsibilities. Smaller governments not assigned a cognizant agency will be under the general oversight of the Federal agency that provides them the most funds whether directly or indirectly. 
I21b. A cognizant agency shall have the following responsibilities: 
I21(1) Ensure that audits are made and reports are received in a timely manner and in accordance with the requirements of this Circular. 
I21(2) Provide technical advice and liaison to State and local governments and independent auditors. 
I21(3) Obtain or make quality control reviews of selected audits made by non-Federal audit organizations, and provide the results, when appropriate, to other interested organizations. 
I21(4) Promptly inform other affected Federal agencies and appropriate Federal law enforcement officials of any reported illegal acts or irregularities. They should also inform State or local law enforcement and prosecuting authorities, if not advised by the recipient, of any violation of law within their jurisdiction. 
I21(5) Advise the recipient of audits that have been found not to have met the requirements set forth in this Circular. In such instances, the recipient will be expected to work with the auditor to take corrective action. If corrective action is not taken, the cognizant agency shall notify the recipient and Federal awarding agencies of the facts and make recommendations for followup action. Major inadequacies or repetitive substandard performance of independent auditors shall be referred to appropriate professional bodies for disciplinary action. 
I21(6) Coordinate, to the extent practicable, audits made by or for Federal agencies that are in addition to the audits made pursuant to this Circular; so that the additional audits build upon such audits. 
I21(7) Oversee the resolution of audit findings that affect the programs of more than one agency. 
I2112. T3Illegal acts or irregularities.G1T1 If the auditor becomes aware of illegal acts or other irregularities, prompt notice shall be given to recipient management officials above the level of involvement. (See also paragraph 13(a)(3) below for the auditor's reporting responsibilities.) The recipient, in turn, shall promptly notify the cognizant agency of the illegal acts or irregularities and of proposed and actual actions, if any. Illegal acts and irregularities include such matters as conflicts of interest, falsification of records or reports, and misappropriations of funds or other assets. 
I2113. T3Audit Reports.G1T1 Audit reports must be prepared at the completion of the audit. Reports serve many needs of State and local governments as well as meeting the requirements of the Single Audit Act. 
I21a. The audit report shall state that the audit was made in accordance with the provisions of this Circular. The report shall be made up of at least:
I21(1) The auditor's report on financial statements and on a schedule of Federal assistance; the financial statements; and a schedule of Federal assistance, showing the total expenditures for each Federal assistance program as identified in the T3Catalog of Federal Domestic Assistance.G1T1 Federal programs or grants that have not been assigned a catalog number shall be identified under the caption ``other Federal assistance.'' 
I21(2) The auditor's report on the study and evaluation of internal control systems must identify the organization's significant internal accounting controls, and those controls designed to provide reasonable assurance that Federal programs are being managed in compliance with laws and regulations. It must also identify the controls that were evaluated, the controls that were not evaluated, and the material weaknesses identified as a result of the evaluation. 
I21(3) The auditor's report on compliance containing: 
I26_A statement of positive assurance with respect to those items tested for compliance, including compliance with law and regulations pertaining to financial reports and claims for advances and reimbursements;
I26_Negative assurance on those items not tested; 
I26_A summary of all instances of noncompliance; and 
I26_An identification of total amounts questioned, if any, for each Federal assistance award, as a result of noncompliance.
Q02
I21b. The three parts of the audit report may be bound into a single report, or presented at the same time as separate documents. 
I21c. All fraud abuse, or illegal acts or indications of such acts, including all questioned costs found as the result of these acts that auditors become aware of, should normally be covered in a separate written report submitted in accordance with paragraph 13f. 
I21d. In addition to the audit report, the recipient shall provide comments on the findings and recommendations in the report, including a plan for corrective action taken or planned and comments on the status of corrective action taken on prior findings. If corrective action is not necessary, a statement ï¿½105ï¿½describing the reason it is not should accompany the audit report. 
I21e. The reports shall be made available by the State or local government for public inspection within 30 days after the completion of the audit. 
I21f. In accordance with generally accepted government audit standards, reports shall be submitted by the auditor to the organization audited and to those requiring or arranging for the audit. In addition, the recipient shall submit copies of the reports to each Federal department or agency that provided Federal assistance funds to the recipient. Subrecipients shall submit copies to recipients that provided them Federal assistance funds. The reports shall be sent within 30 days after the completion of the audit, but no later than one year after the end of the audit period unless a longer period is agreed to with the cognizant agency.
I21g. Recipients of more than $100,000 in Federal funds shall submit one copy of the audit report within 30 days after issuance to a central clearinghouse to be designated by the Office of Management and Budget. The clearinghouse will keep completed audits on file and follow up with State and local governments that have not submitted required audit reports.
I21h. Recipients shall keep audit reports on file for three years from their issuance.
I2114. T3Audit Resolution.G1T1 As provided in paragraph 11, the cognizant agency shall be responsible for monitoring the resolution of audit findings that affect the programs of more than one Federal agency. Resolution of findings that relate to the programs of a single Federal agency will be the responsibility of the recipient and that agency. Alternate arrangements may be made on case-by-case basis by a case-by-case basis by agreement among the agenices concerned.
I21Resolution shall be made within six months after receipt of the report by the Federal departments and agencies. Corrective action should proceed as rapidly as possible.
I2115. T3Audit workpapers and reports.G1T1 Workpapers and reports shall be retained for a minimum of three years from the date of the audit report, unless the auditor is notified in writing by the cognizant agency to extend the retention period. Audit workpapers shall be made available upon request to the cognizant agency or its designee or the General Accounting Office, at the completion of the audit.
I2116. T3Audit Costs.G1T1 The cost of audits made in accordance with the provisions of this Circular are allowable charges to Federal assistance programs.
I21a. The charges may be considered a direct cost or an allocated indirect cost, determined in accordance with the provision of Circular Aï¿½0987, ``Cost principles for State and local governments.''
I21b. Generally, the percentage of costs charged to Federal assistance programs for a single audit shall not exceed the percentage that Federal funds expended represent of total funds expended by the recipient during the fiscal year. The percentage may be exceeded, however, if appropriate documentation demonstrates higher actual cost.
I2117. T3Sanctions.G1T1 The Single Audit Act provides that no cost may be charged to Federal assistance programs for audits required by the Act that are not made in accordance with this Circular. In cases of continued inability or unwillingness to have a proper audit, Federal agencies must consider other appropropriate sanctions including:
Q02
I26_Withholding a percentage of assistance payments until the audit is completed satisfactorily,
I26_Withholding or disallowing overhead costs, and 
I26_Suspending the Federal assistance agreement until the audit is made.

Q02
I2118. T3Auditor Selection.G1T1 In arranging for audit services State and local governments shall follow the procurement standards prescribed by Attachment O of Circular Aï¿½09102, ``Uniform requirements for grants to State and local governments.'' The standards provide that while recipients are encouraged to enter into intergovernmental agreements for audit and other services, analysis should be made to determine whether it would be more economical to purchase the services from private firms. In instances where use of such intergovernmental agreements are required by State statutes (e.g., audit services) these statutes will take precedence.
I2119. T3Small and Minority Audit Firms.G1T1 Small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals shall have the maximum practicable opportunity to participate in contracts awarded to fulfill the requirements of this Circular. Recipients of Federal assistance shall take the following steps to further this goal:
I21a. Assure that small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals are used to the fullest extent practicable.
I21b. Make information on forthcoming opportunities available and arrange timeframes for the audit so as to encourage and facilitate participation by small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals.
I21c. Consider in the contract process whether firms competing for large audits intend to subcontract with small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals.
I21d. Encourage contracting with small audit firms or audit firms owned and controlled by ï¿½106ï¿½socially and economically disadvantaged individuals which have traditionally audited government programs and, in such cases where this is not possible, assure that these firms are given consideration for audit subcontracting opportunities.
I21e. Encourage contracting with consortiums of small audit firms as described in paragraph (a) above when a contract is too large for an individual small audit firm or audit firm owned and controlled by socially and economically disadvantaged individuals.
I21f. Use the services and assistance, as appropriate, of such organizations as the Small Business Administration in the solicitation and utilization of small audit firms or audit firms owned and controlled by socially and economically disadvantaged individuals.
I2120. T3Reporting.G1T1 Each Federal agency will report to the Director of OMB on or before March 1, 1987, and annually thereafter on the effectiveness of State and local governments in carrying out the provisions of this Circular. The report must identify each State or local government or Indian tribe that, in the opinion of the agency, is failing to comply with the Circular.
I2121. T3Regulations.G1T1 Each Federal agency shall include the provisions of this Circular in its regulations implementing the Single Audit Act.
I2122. T3Effective date.G1T1 This Circular is effective upon publication and shall apply to fiscal years of State and local governments that begin after December 31, 1984. Earlier implementation is encouraged. However, until it is implemented, the audit provisions of Attachment P to Circular Aï¿½09102 shall continue to be observed.
I2123. T3Inquiries.G1T1 All questions or inquiries should be addressed to Financial Management Division, Office of Management and Budget, telephone number 202/395ï¿½093993.
I2124. T3Sunset review date.G1T1 This Circular shall have an independent policy review to ascertain its effectiveness three years from the date of issuance.
Q02
S8003I20David A. Stockman,
S8002I21Director.
I73Definition of Major Program as Provided in Pub. L. 98ï¿½09502
I21``Major Federal Assistance Program,'' for State and local governments having Federal assistance expenditures between $100,000 and $100,000,000, means any program for which Federal expenditures during the applicable year exceed the larger of $300,000, or 3 percent of such total expenditures.
I21Where total expenditures of Federal assistance exceed $100,000,000, the following criteria apply:
c3,L1,tp0,i1,xls50,r40,10 I95   h1Total expenditures of Federal financial assistance for all programs h2More than h2But less than h1Major federal assistance program means any program that exceeds
j
I01$100 million D$1 billion D$3 million
I011 billion D2 billion D4 million
I012 billion D3 billion D7 million
I013 billion D4 billion D10 million
I014 billion D5 billion D13 million
I015 billion D6 billion D16 million
I016 billion D7 billion D19 million
I01Over 7 billion D D20 million
e


Q04I20[50 FR 28763, July 16, 1985] 
S8010
I95Pt. 3016
I52PART 3016_UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND COOPERATIVE AGREEMENTS TO STATE AND LOCAL GOVERNMENTS 


I86Subpart A_General
S8006I18Sec. 
S8010I263016.1Purpose and scope of this part. 
I263016.2Scope of subpart. 
I263016.3Definitions. 
I263016.4Applicability. 
I263016.5Effect on other issuances. 
I263016.6Additions and exceptions. 

I86Subpart B_Pre-Award Requirements 
I263016.10Forms for applying for grants. 
I263016.11State plans. 
I263016.12Special grant or subgrant conditions for ``high-risk'' grantees. 

I86Subpart C_Post-Award Requirements 
I74Financial Administration 
I263016.20Standards for financial management systems. 
I263016.21Payment. 
I263016.22Allowable costs. 
I263016.23Period of availability of funds. 
I263016.24Matching or cost sharing. 
I263016.25Program income. 
I263016.26Non-Federal audit. 
I74Changes, Property, and Subawards 
I263016.30Changes. 
I263016.31Real property. 
I263016.32Equipment. 
I263016.33Supplies. 
I263016.34Copyrights. 
I263016.35Subawards to debarred and suspended parties. 
I263016.36Procurement. 
I263016.37Subgrants. 
ï¿½107ï¿½I74Reports, Records, Retention, and Enforcement 
I263016.40Monitoring and reporting program performance. 
I263016.41Financial reporting. 
I263016.42Retention and access requirements for records. 
I263016.43Enforcement. 
I263016.44Termination for convenience. 

I86Subpart D_After-the-Grant Requirements 
I263016.50Closeout. 
I263016.51Later disallowances and adjustments. 
I263016.52Collection of amounts due. 
S8006I86Subpart E_Entitlement [Reserved]
S8010
Q04I21T5Authority:  T15 U.S.C. 301. 
Q04I21T5Source:  T153 FR 8044, 8087, Mar. 11, 1988, unless otherwise noted.
Q04I21T5Editorial Note: T1For additional information, see related documents published at 49 FR 24958, June 18, 1984, 52 FR 20178, May 29, 1987, and 53 FR 8028, March 11, 1988.

I56Subpart A_General

I80ï¿½1A3016.1
I89Purpose and scope of this part.
I11This part establishes uniform administrative rules for Federal grants and cooperative agreements and subawards to State, local and Indian tribal governments.

I80ï¿½1A3016.2
I89Scope of subpart.
I11This subpart contains general rules pertaining to this part and procedures for control of exceptions from this part.

I80ï¿½1A3016.3
I89Definitions.
I11As used in this part:
I11T3Accrued expendituresG1T1 mean the charges incurred by the grantee during a given period requiring the provision of funds for: (1) Goods and other tangible property received; (2) services performed by employees, contractors, subgrantees, subcontractors, and other payees; and (3) other amounts becoming owed under programs for which no current services or performance is required, such as annuities, insurance claims, and other benefit payments.
I11T3Accrued incomeG1T1 means the sum of: (1) Earnings during a given period from services performed by the grantee and goods and other tangible property delivered to purchasers, and (2) amounts becoming owed to the grantee for which no current services or performance is required by the grantee.
I11T3Acquisition costG1T1 of an item of purchased equipment means the net invoice unit price of the property including the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the property usable for the purpose for which it was acquired. Other charges such as the cost of installation, transportation, taxes, duty or protective in-transit insurance, shall be included or excluded from the unit acquisition cost in accordance with the grantee's regular accounting practices.
I11T3AdministrativeG1T1 requirements mean those matters common to grants in general, such as financial management, kinds and frequency of reports, and retention of records. These are distinguished from T3programmaticG1T1 requirements, which concern matters that can be treated only on a program-by-program or grant-by-grant basis, such as kinds of activities that can be supported by grants under a particular program.
I11T3Awarding agencyG1T1 means (1) with respect to a grant, the Federal agency, and (2) with respect to a subgrant, the party that awarded the subgrant.
I11T3Cash contributionsG1T1 means the grantee's cash outlay, including the outlay of money contributed to the grantee or subgrantee by other public agencies and institutions, and private organizations and individuals. When authorized by Federal legislation, Federal funds received from other assistance agreements may be considered as grantee or subgrantee cash contributions.
I11T3ContractG1T1 means (except as used in the definitions for T3grantG1T1 and T3subgrantG1T1 in this section and except where qualified by T3FederalG1T1) a procurement contract under a grant or subgrant, and means a procurement subcontract under a contract.
I11T3Cost sharing or matchingG1T1 means the value of the third party in-kind contributions and the portion of the costs of a federally assisted project or program not borne by the Federal Government.
ï¿½108ï¿½I11T3Cost-type contractG1T1 means a contract or subcontract under a grant in which the contractor or subcontractor is paid on the basis of the costs it incurs, with or without a fee.
I11T3EquipmentG1T1 means tangible, nonexpendable, personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. A grantee may use its own definition of equipment provided that such definition would at least include all equipment defined above.
I11T3Expenditure reportG1T1 means: (1) For nonconstruction grants, the SFï¿½09269 T3Financial Status ReportG1T1 (or other equivalent report); (2) for construction grants, the SFï¿½09271 T3Outlay Report and Request for ReimbursementG1T1 (or other equivalent report).
I11T3Federally recognized Indian tribal governmentG1T1 means the governing body or a governmental agency of any Indian tribe, band, nation, or other organized group or community (including any Native village as defined in section 3 of the Alaska Native Claims Settlement Act, 85 Stat 688) certified by the Secretary of the Interior as eligible for the special programs and services provided by him through the Bureau of Indian Affairs.
I11T3GovernmentG1T1 means a State or local government or a federally recognized Indian tribal government.
I11T3GrantG1T1 means an award of financial assistance, including cooperative agreements, in the form of money, or property in lieu of money, by the Federal Government to an eligible grantee. The term does not include technical assistance which provides services instead of money, or other assistance in the form of revenue sharing, loans, loan guarantees, interest subsidies, insurance, or direct appropriations. Also, the term does not include assistance, such as a fellowship or other lump sum award, which the grantee is not required to account for.
I11T3GranteeG1T1 means the government to which a grant is awarded and which is accountable for the use of the funds provided. The grantee is the entire legal entity even if only a particular component of the entity is designated in the grant award document.
I11T3Local governmentG1T1 means a county, municipality, city, town, township, local public authority (including any public and Indian housing agency under the United States Housing Act of 1937) school district, special district, intrastate district, council of governments (whether or not incorporated as a nonprofit corporation under state law), any other regional or interstate government entity, or any agency or instrumentality of a local government.
I11T3ObligationsG1T1 means the amounts of orders placed, contracts and subgrants awarded, goods and services received, and similar transactions during a given period that will require payment by the grantee during the same or a future period.
I11T3OMBG1T1 means the United States Office of Management and Budget.
I11T3OutlaysG1T1 (expenditures) mean charges made to the project or program. They may be reported on a cash or accrual basis. For reports prepared on a cash basis, outlays are the sum of actual cash disbursement for direct charges for goods and services, the amount of indirect expense incurred, the value of in-kind contributions applied, and the amount of cash advances and payments made to contractors and subgrantees. For reports prepared on an accrued expenditure basis, outlays are the sum of actual cash disbursements, the amount of indirect expense incurred, the value of inkind contributions applied, and the new increase (or decrease) in the amounts owed by the grantee for goods and other property received, for services performed by employees, contractors, subgrantees, subcontractors, and other payees, and other amounts becoming owed under programs for which no current services or performance are required, such as annuities, insurance claims, and other benefit payments.
I11T3Percentage of completion methodG1T1 refers to a system under which payments are made for construction work according to the percentage of completion of the work, rather than to the grantee's cost incurred.
I11T3Prior approvalG1T1 means documentation evidencing consent prior to incurring specific cost.
I11T3Real propertyG1T1 means land, including land improvements, structures and appurtenances thereto, excluding movable machinery and equipment.
ï¿½109ï¿½I11T3ShareG1T1, when referring to the awarding agency's portion of real property, equipment or supplies, means the same percentage as the awarding agency's portion of the acquiring party's total costs under the grant to which the acquisition costs under the grant to which the acquisition cost of the property was charged. Only costs are to be counted_not the value of third-party in-kind contributions.
I11T3StateG1T1 means any of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency or instrumentality of a State exclusive of local governments. The term does not include any public and Indian housing agency under United States Housing Act of 1937.
I11T3SubgrantG1T1 means an award of financial assistance in the form of money, or property in lieu of money, made under a grant by a grantee to an eligible subgrantee. The term includes financial assistance when provided by contractual legal agreement, but does not include procurement purchases, nor does it include any form of assistance which is excluded from the definition of T3grantG1T1 in this part.
I11T3SubgranteeG1T1 means the government or other legal entity to which a subgrant is awarded and which is accountable to the grantee for the use of the funds provided.
I11T3SuppliesG1T1 means all tangible personal property other than T3equipmentG1T1 as defined in this part.
I11T3SuspensionG1T1 means depending on the context, either (1) temporary withdrawal of the authority to obligate grant funds pending corrective action by the grantee or subgrantee or a decision to terminate the grant, or (2) an action taken by a suspending official in accordance with agency regulations implementing E.O. 12549 to immediately exclude a person from participating in grant transactions for a period, pending completion of an investigation and such legal or debarment proceedings as may ensue.
I11T3TerminationG1T1 means permanent withdrawal of the authority to obligate previously-awarded grant funds before that authority would otherwise expire. It also means the voluntary relinquishment of that authority by the grantee or subgrantee. T3TerminationG1T1 does not include: (1) Withdrawal of funds awarded on the basis of the grantee's underestimate of the unobligated balance in a prior period; (2) Withdrawal of the unobligated balance as of the expiration of a grant; (3) Refusal to extend a grant or award additional funds, to make a competing or noncompeting continuation, renewal, extension, or supplemental award; or (4) voiding of a grant upon determination that the award was obtained fraudulently, or was otherwise illegal or invalid from inception.
I11T3Terms of a grant or subgrantG1T1 mean all requirements of the grant or subgrant, whether in statute, regulations, or the award document.
I11T3Third party in-kind contributionsG1T1 mean property or services which benefit a federally assisted project or program and which are contributed by non-Federal third parties without charge to the grantee, or a cost-type contractor under the grant agreement.
I11T3Unliquidated obligationsG1T1 for reports prepared on a cash basis mean the amount of obligations incurred by the grantee that has not been paid. For reports prepared on an accrued expenditure basis, they represent the amount of obligations incurred by the grantee for which an outlay has not been recorded.
I11T3Unobligated balanceG1T1 means the portion of the funds authorized by the Federal agency that has not been obligated by the grantee and is determined by deducting the cumulative obligations from the cumulative funds authorized.

I80ï¿½1A3016.4
I89Applicability.
I11(a) T3General.G1T1 Subparts Aï¿½09D of this part apply to all grants and subgrants to governments, except where inconsistent with Federal statutes or with regulations authorized in accordance with the exception provision of ï¿½1A3016.6, or:
I11(1) Grants and subgrants to State and local institutions of higher education or State and local hospitals.
I11(2) The block grants authorized by the Omnibus Budget Reconciliation Act of 1981 (Community Services; Preventive Health and Health Services; Alcohol, Drug Abuse, and Mental Health ï¿½110ï¿½Services; Maternal and Child Health Services; Social Services; Low-Income Home Energy Assistance; States' Program of Community Development Block Grants for Small Cities; and Elementary and Secondary Education other than programs administered by the Secretary of Education under Title V, Subtitle D, Chapter 2, Section 583_the Secretary's discretionary grant program) and Titles Iï¿½09III of the Job Training Partnership Act of 1982 and under the Public Health Services Act (Section 1921), Alcohol and Drug Abuse Treatment and Rehabilitation Block Grant and Part C of Title V, Mental Health Service for the Homeless Block Grant).
I11(3) Entitlement grants to carry out the following programs of the Social Security Act:
I11(i) Aid to Needy Families with Dependent Children (Title IVï¿½09A of the Act, not including the Work Incentive Program (WIN) authorized by section 402(a)19(G); HHS grants for WIN are subject to this part);
I11(ii) Child Support Enforcement and Establishment of Paternity (Title IVï¿½09D of the Act);
I11(iii) Foster Care and Adoption Assistance (Title IVï¿½09E of the Act);
I11(iv) Aid to the Aged, Blind, and Disabled (Titles I, X, XIV, and XVIï¿½09AABD of the Act); and
I11(v) Medical Assistance (Medicaid) (Title XIX of the Act) not including the State Medicaid Fraud Control program authorized by section 1903(a)(6)(B).
I11(4) Entitlement grants under the following programs of The National School Lunch Act:
I11(i) School Lunch (section 4 of the Act),
I11(ii) Commodity Assistance (section 6 of the Act),
I11(iii) Special Meal Assistance (section 11 of the Act),
I11(iv) Summer Food Service for Children (section 13 of the Act), and
I11(v) Child Care Food Program (section 17 of the Act).
I11(5) Entitlement grants under the following programs of The Child Nutrition Act of 1966:
I11(i) Special Milk (section 3 of the Act), and
I11(ii) School Breakfast (section 4 of the Act).
I11(6) Entitlement grants for State Administrative expenses under The Food Stamp Act of 1977 (section 16 of the Act).
I11(7) A grant for an experimental, pilot, or demonstration project that is also supported by a grant listed in paragraph (a)(3) of this section; 
I11(8) Grant funds awarded under subsection 412(e) of the Immigration and Nationality Act (8 U.S.C. 1522(e)) and subsection 501(a) of the Refugee Education Assistance Act of 1980 (Pub. L. 96ï¿½09422, 94 Stat. 1809), for cash assistance, medical assistance, and supplemental security income benefits to refugees and entrants and the administrative costs of providing the assistance and benefits; 
I11(9) Grants to local education agencies under 20 U.S.C. 236 through 241ï¿½091(a), and 242 through 244 (portions of the Impact Aid program), except for 20 U.S.C. 238(d)(2)(c) and 240(f) (Entitlement Increase for Handicapped Children); and 
I11(10) Payments under the Veterans Administration's State Home Per Diem Program (38 U.S.C. 641(a)).
I11(b) T3Entitlement programs.G1T1 Entitlement programs enumerated above in ï¿½1A3016.4(a) (3)ï¿½09(8) are subject to Subpart E.

I80ï¿½1A3016.5
I89Effect on other issuances. 
I11All other grants administration provisions of codified program regulations, program manuals, handbooks and other nonregulatory materials which are inconsistent with this part are superseded, except to the extent they are required by statute, or authorized in accordance with the exception provision in ï¿½1A3016.6.

I80ï¿½1A3016.6
I89Additions and exceptions.
I11(a) For classes of grants and grantees subject to this part, Federal agencies may not impose additional administrative requirements except in codified regulations published in the T4Federal RegisterG1T1. 
I11(b) Exceptions for classes of grants or grantees may be authorized only by OMB. 
I11(c) Exceptions on a case-by-case basis and for subgrantees may be authorized by the affected Federal agencies. 

ï¿½111ï¿½I56Subpart B_Pre-Award Requirements 

I80ï¿½1A3016.10
I89Forms for applying for grants. 
I11(a) T3Scope.G1T1 (1) This section prescribes forms and instructions to be used by governmental organizations (except hospitals and institutions of higher education operated by a government) in applying for grants. This section is not applicable, however, to formula grant programs which do not require applicants to apply for funds on a project basis. 
I11(2) This section applies only to applications to Federal agencies for grants, and is not required to be applied by grantees in dealing with applicants for subgrants. However, grantees are encouraged to avoid more detailed or burdensome application requirements for subgrants. 
I11(b) T3Authorized forms and instructions for governmental organizations.G1T1 (1) In applying for grants, applicants shall only use standard application forms or those prescribed by the granting agency with the approval of OMB under the Paperwork Reduction Act of 1980. 
I11(2) Applicants are not required to submit more than the original and two copies of preapplications or applications. 
I11(3) Applicants must follow all applicable instructions that bear OMB clearance numbers. Federal agencies may specify and describe the programs, functions, or activities that will be used to plan, budget, and evaluate the work under a grant. Other supplementary instructions may be issued only with the approval of OMB to the extent required under the Paperwork Reduction Act of 1980. For any standard form, except the SFï¿½09424 facesheet, Federal agencies may shade out or instruct the applicant to disregard any line item that is not needed. 
I11(4) When a grantee applies for additional funding (such as a continuation or supplemental award) or amends a previously submitted application, only the affected pages need be submitted. Previously submitted pages with information that is still current need not be resubmitted. 

I80ï¿½1A3016.11
I89State plans.
I11(a) T3Scope.G1T1 The statutes for some programs require States to submit plans before receiving grants. Under regulations implementing Executive Order 12372, ``Intergovernmental Review of Federal Programs,'' States are allowed to simplify, consolidate and substitute plans. This section contains additional provisions for plans that are subject to regulations implementing the Executive Order.
I11(b) T3Requirements.G1T1 A State need meet only Federal administrative or programmatic requirements for a plan that are in statutes or codified regulations.
I11(c) T3Assurances.G1T1 In each plan the State will include an assurance that the State shall comply with all applicable Federal statutes and regulations in effect with respect to the periods for which it receives grant funding. For this assurance and other assurances required in the plan, the State may:
I11(1) Cite by number the statutory or regulatory provisions requiring the assurances and affirm that it gives the assurances required by those provisions,
I11(2) Repeat the assurance language in the statutes or regulations, or
I11(3) Develop its own language to the extent permitted by law.
I11(d) T3Amendments.G1T1 A State will amend a plan whenever necessary to reflect:
I11(1) New or revised Federal statutes or regulations or
I11(2) A material change in any State law, organization, policy, or State agency operation. The State will obtain approval for the amendment and its effective date but need submit for approval only the amended portions of the plan.

I80ï¿½1A3016.12
I89Special grant or subgrant conditions for ``high-risk'' grantees.
I11(a) A grantee or subgrantee may be considered ``high risk'' if an awarding agency determines that a grantee or subgrantee:
I11(1) Has a history of unsatisfactory performance, or
I11(2) Is not financially stable, or
I11(3) Has a management system which does not meet the management standards set forth in this part, or 
ï¿½112ï¿½I11(4) Has not conformed to terms and conditions of previous awards, or
I11(5) Is otherwise not responsible; and if the awarding agency determines that an award will be made, special conditions and/or restrictions shall correspond to the high risk condition and shall be included in the award.
I11(b) Special conditions or restrictions may include:
I11(1) Payment on a reimbursement basis;
I11(2) Withholding authority to proceed to the next phase until receipt of evidence of acceptable performance within a given funding period;
I11(3) Requiring additional, more detailed financial reports;
I11(4) Additional project monitoring;
I11(5) Requiring the grantee or subgrantee to obtain technical or management assistance; or 
I11(6) Establishing additional prior approvals.
I11(c) If an awarding agency decides to impose such conditions, the awarding official will notify the grantee or subgrantee as early as possible, in writing, of:
I11(1) The nature of the special conditions/restrictions;
I11(2) The reason(s) for imposing them;
I11(3) The corrective actions which must be taken before they will be removed and the time allowed for completing the corrective actions; and
I11(4) The method of requesting reconsideration of the conditions/restrictions imposed.

I56Subpart C_Post-Award Requirements
I84Financial Administration

I80ï¿½1A3016.20
I89Standards for financial management systems.
I11(a) A State must expand and account for grant funds 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 subgrantees and cost-type contractors, must be sufficient to_
I11(1) Permit preparation of reports required by this part and the statutes authorizing the grant, and 
I11(2) Permit the tracing of funds to a level of expenditures adequate to establish that such funds have not been used in violation of the restrictions and prohibitions of applicable statutes.
I11(b) The financial management systems of other grantees and subgrantees must meet the following standards:
I11(1) T3Financial reporting.G1T1 Accurate, current, and complete disclosure of the financial results of financially assisted activities must be made in accordance with the financial reporting requirements of the grant or subgrant.
I11(2) T3Accounting records.G1T1 Grantees and subgrantees must maintain records which adequately identify the source and application of funds provided for financially-assisted activities. These records must contain information pertaining to grant or subgrant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or expenditures, and income.
I11(3) T3Internal control.G1T1 Effective control and accountability must be maintained for all grant and subgrant cash, real and personal property, and other assets. Grantees and subgrantees must adequately safeguard all such property and must assure that it is used solely for authorized purposes.
I11(4) T3Budget control.G1T1 Actual expenditures or outlays must be compared with budgeted amounts for each grant or subgrant. Financial information must be related to performance or productivity data, including the development of unit cost information whenever appropriate or specifically required in the grant or subgrant agreement. If unit cost data are required, estimates based on available documentation will be accepted whenever possible.
I11(5) T3Allowable cost.G1T1 Applicable OMB cost principles, agency program regulations, and the terms of grant and subgrant agreements will be followed in determining the reasonableness, allowability, and allocability of costs.
I11(6) T3Source documentation.G1T1 Accounting records must be supported by such source documentation as cancelled checks, paid bills, payrolls, time and attendance records, contract and subgrant award documents, etc.
I11(7) T3Cash management.G1T1 Procedures for minimizing the time elapsing between ï¿½113ï¿½the transfer of funds from the U.S. Treasury and disbursement by grantees and subgrantees must be followed whenever advance payment procedures are used. Grantees must establish reasonable procedures to ensure the receipt of reports on subgrantees' cash balances and cash disbursements in sufficient time to enable them to prepare complete and accurate cash transactions reports to the awarding agency. When advances are made by letter-of-credit or electronic transfer of funds methods, the grantee must make drawdowns as close as possible to the time of making disbursements. Grantees must monitor cash drawdowns by their subgrantees to assure that they conform substantially to the same standards of timing and amount as apply to advances to the grantees.
I11(c) An awarding agency may review the adequacy of the financial management system of any applicant for financial assistance as part of a preaward review or at any time subsequent to award.

I80ï¿½1A3016.21 
I89Payment. 
I11(a) T3Scope.G1T1 This section prescribes the basic standard and the methods under which a Federal agency will make payments to grantees, and grantees will make payments to subgrantees and contractors. 
I11(b) T3Basic standard.G1T1 Methods and procedures for payment shall minimize the time elapsing between the transfer of funds and disbursement by the grantee or subgrantee, in accordance with Treasury regulations at 31 CFR part 205. 
I11(c) T3Advances.G1T1 Grantees and subgrantees shall be paid in advance, provided they maintain or demonstrate the willingness and ability to maintain procedures to minimize the time elapsing between the transfer of the funds and their disbursement by the grantee or subgrantee. 
I11(d) T3Reimbursement.G1T1 Reimbursement shall be the preferred method when the requirements in paragraph (c) of this section are not met. Grantees and subgrantees may also be paid by reimbursement for any construction grant. Except as otherwise specified in regulation, Federal agencies shall not use the percentage of completion method to pay construction grants. The grantee or subgrantee may use that method to pay its construction contractor, and if it does, the awarding agency's payments to the grantee or subgrantee will be based on the grantee's or subgrantee's actual rate of disbursement. 
I11(e) T3Working capital advances.G1T1 If a grantee cannot meet the criteria for advance payments described in paragraph (c) of this section, and the Federal agency has determined that reimbursement is not feasible because the grantee lacks sufficient working capital, the awarding agency may provide cash or a working capital advance basis. Under this procedure the awarding agency shall advance cash to the grantee to cover its estimated disbursement needs for an initial period generally geared to the grantee's disbursing cycle. Thereafter, the awarding agency shall reimburse the grantee for its actual cash disbursements. The working capital advance method of payment shall not be used by grantees or subgrantees if the reason for using such method is the unwillingness or inability of the grantee to provide timely advances to the subgrantee to meet the subgrantee's actual cash disbursements. 
I11(f) T3Effect of program income, refunds, and audit recoveries on payment.G1T1 (1) Grantees and subgrantees shall disburse repayments to and interest earned on a revolving fund before requesting additional cash payments for the same activity. 
I11(2) Except as provided in paragraph (f)(1) of this section, grantees and subgrantees shall disburse program income, rebates, refunds, contract settlements, audit recoveries and interest earned on such funds before requesting additional cash payments. 
I11(g) T3Withholding payments.G1T1 (1) Unless otherwise required by Federal statute, awarding agencies shall not withhold payments for proper charges incurred by grantees or subgrantees unless_ 
I11(i) The grantee or subgrantee has failed to comply with grant award conditions or 
I11(ii) The grantee or subgrantee is indebted to the United States. 
I11(2) Cash withheld for failure to comply with grant award condition, but without suspension of the grant, shall ï¿½114ï¿½be released to the grantee upon subsequent compliance. When a grant is suspended, payment adjustments will be made in accordance with ï¿½1A3016.43(c). 
I11(3) A Federal agency shall not make payment to grantees for amounts that are withheld by grantees or subgrantees from payment to contractors to assure satisfactory completion of work. Payments shall be made by the Federal agency when the grantees or subgrantees actually disburse the withheld funds to the contractors or to escrow accounts established to assure satisfactory completion of work. 
I11(h) T3Cash depositories.G1T1 (1) Consistent with the national goal of expanding the opportunities for minority business enterprises, grantees and subgrantees are encouraged to use minority banks (a bank which is owned at least 50 percent by minority group members). A list of minority owned banks can be obtained from the Minority Business Development Agency, Department of Commerce, Washington, DC 20230. 
I11(2) A grantee or subgrantee shall maintain a separate bank account only when required by Federal-State agreement. 
I11(i) T3Interest earned on advances.G1T1 Except for interest earned on advances of funds exempt under the Intergovernmental Cooperation Act (31 U.S.C. 6501 T3et seq.G1T1) and the Indian Self-Determination Act (23 U.S.C. 450), grantees and subgrantees shall promptly, but at least quarterly, remit interest earned on advances to the Federal agency. The grantee or subgrantee may keep interest amounts up to $100 per year for administrative expenses. 

I80ï¿½1A3016.22 
I89Allowable costs.
I11(a) T3Limitation on use of funds.G1T1 Grant funds may be used only for:
I11(1) The allowable costs of the grantees, subgrantees and cost-type contractors, including allowable costs in the form of payments to fixed-price contractors; and
I11(2) Reasonable fees or profit to cost-type contractors but not any fee or profit (or other increment above allowable costs) to the grantee or subgrantee.
I11(b) T3Applicable cost principles.G1T1 For each kind of organization, there is a set of Federal principles for determining allowable costs. Allowable costs will be determined in accordance with the cost principles applicable to the organization incurring the costs. The following chart lists the kinds of organizations and the applicable cost principles.
c2,L2,tp0,i1,s25,r25 I95   h1For the costs of a_ h1Use the principles in_
j
I01State, local or Indian tribal governmentDOMB Circular Aï¿½0987.
I01Private nonprofit organization other than an (1) institution of higher education, (2) hospital, or (3) organization named in OMB Circular Aï¿½09122 as not subject to that circularDOMB Circular Aï¿½09122.
I01Educational institutions.DOMB Circular Aï¿½0921.
I01For-profit organization other than a hospital and an organization named in OMB Circular Aï¿½09122 as not subject to that circularD48 CFR part 31. Contract Cost Principles and Procedures, or uniform cost accounting standards that comply with cost principles acceptable to the Federal agency.
e



I80ï¿½1A3016.23 
I89Period of availability of funds.
I11(a) T3General.G1T1 Where a funding period is specified, a grantee may charge to the award only costs resulting from obligations of the funding period unless carryover of unobligated balances is permitted, in which case the carryover balances may be charged for costs resulting from obligations of the subsequent funding period.
I11(b) T3Liquidation of obligations.G1T1 A grantee must liquidate all obligations incurred under the award not later than 90 days after the end of the funding period (or as specified in a program regulation) to coincide with the submission of the annual Financial Status Report (SFï¿½09269). The Federal agency may extend this deadline at the request of the grantee.

I80ï¿½1A3016.24 
I89Matching or cost sharing.
I11(a) T3Basic rule: Costs and contributions acceptable.G1T1 With the qualifications and exceptions listed in paragraph (b) of this section, a matching or cost sharing requirement may be satisfied by either or both of the following:
I11(1) Allowable costs incurred by the grantee, subgrantee or a cost-type contractor under the assistance agreement. This includes allowable costs borne by non-Federal grants or by others cash donations from non-Federal third parties.
ï¿½115ï¿½I11(2) The value of third party in-kind contributions applicable to the period to which the cost sharing or matching requirements applies.
I11(b) T3Qualifications and exceptionsG1T1_(1) T3Costs borne by other Federal grant agreements.G1T1 Except as provided by Federal statute, a cost sharing or matching requirement may not be met by costs borne by another Federal grant. This prohibition does not apply to income earned by a grantee or subgrantee from a contract awarded under another Federal grant.
I11(2) T3General revenue sharing.G1T1 For the purpose of this section, general revenue sharing funds distributed under 31 U.S.C. 6702 are not considered Federal grant funds.
I11(3) T3Cost or contributions counted towards other Federal costs-sharing requirements.G1T1 Neither costs nor the values of third party in-kind contributions may count towards satisfying a cost sharing or matching requirement of a grant agreement if they have been or will be counted towards satisfying a cost sharing or matching requirement of another Federal grant agreement, a Federal procurement contract, or any other award of Federal funds.
I11(4) T3Costs financed by program income.G1T1 Costs financed by program income, as defined in ï¿½1A3016.25, shall not count towards satisfying a cost sharing or matching requirement unless they are expressly permitted in the terms of the assistance agreement. (This use of general program income is described in ï¿½1A3016.25(g).)
I11(5) T3Services or property financed by income earned by contractors.G1T1 Contractors under a grant may earn income from the activities carried out under the contract in addition to the amounts earned from the party awarding the contract. No costs of services or property supported by this income may count toward satisfying a cost sharing or matching requirement unless other provisions of the grant agreement expressly permit this kind of income to be used to meet the requirement.
I11(6) T3Records.G1T1 Costs and third party in-kind contributions counting towards satisfying a cost sharing or matching requirement must be verifiable from the records of grantees and subgrantee or cost-type contractors. These records must show how the value placed on third party in-kind contributions was derived. To the extent feasible, volunteer services will be supported by the same methods that the organization uses to support the allocability of regular personnel costs.
I11(7) T3Special standards for third party in-kind contributions.G1T1 (i) Third party in-kind contributions count towards satisfying a cost sharing or matching requirement only where, if the party receiving the contributions were to pay for them, the payments would be allowable costs.
I11(ii) Some third party in-kind contributions are goods and services that, if the grantee, subgrantee, or contractor receiving the contribution had to pay for them, the payments would have been an indirect costs. Costs sharing or matching credit for such contributions shall be given only if the grantee, subgrantee, or contractor has established, along with its regular indirect cost rate, a special rate for allocating to individual projects or programs the value of the contributions.
I11(iii) A third party in-kind contribution to a fixed-price contract may count towards satisfying a cost sharing or matching requirement only if it results in:
I11(A) An increase in the services or property provided under the contract (without additional cost to the grantee or subgrantee) or
I11(B) A cost savings to the grantee or subgrantee.
I11(iv) The values placed on third party in-kind contributions for cost sharing or matching purposes will conform to the rules in the succeeding sections of this part. If a third party in-kind contribution is a type not treated in those sections, the value placed upon it shall be fair and reasonable.
I11(c) T3Valuation of donated servicesG1T1_(1) T3Volunteer services.G1T1 Unpaid services provided to a grantee or subgrantee by individuals will be valued at rates consistent with those ordinarily paid for similar work in the grantee's or subgrantee's organization. If the grantee or subgrantee does not have employees performing similar work, the rates will be consistent with those ordinarily paid by other employers for similar ï¿½116ï¿½work in the same labor market. In either case, a reasonable amount for fringe benefits may be included in the valuation.
I11(2) T3Employees of other organizations.G1T1 When an employer other than a grantee, subgrantee, or cost-type contractor furnishes free of charge the services of an employee in the employee's normal line of work, the services will be valued at the employee's regular rate of pay exclusive of the employee's fringe benefits and overhead costs. If the services are in a different line of work, paragraph (c)(1) of this section applies.
I11(d) T3Valuation of third party donated supplies and loaned equipment or space.G1T1 (1) If a third party donates supplies, the contribution will be valued at the market value of the supplies at the time of donation.
I11(2) If a third party donates the use of equipment or space in a building but retains title, the contribution will be valued at the fair rental rate of the equipment or space.
I11(e) T3Valuation of third party donated equipment, buildings, and land.G1T1 If a third party donates equipment, buildings, or land, and title passes to a grantee or subgrantee, the treatment of the donated property will depend upon the purpose of the grant or subgrant, as follows:
I11(1) T3Awards for capital expenditures.G1T1 If the purpose of the grant or subgrant is to assist the grantee or subgrantee in the acquisition of property, the market value of that property at the time of donation may be counted as cost sharing or matching,
I11(2) T3Other awards.G1T1 If assisting in the acquisition of property is not the purpose of the grant or subgrant, paragraphs (e)(2) (i) and (ii) of this section apply:
I11(i) If approval is obtained from the awarding agency, the market value at the time of donation of the donated equipment or buildings and the fair rental rate of the donated land may be counted as cost sharing or matching. In the case of a subgrant, the terms of the grant agreement may require that the approval be obtained from the Federal agency as well as the grantee. In all cases, the approval may be given only if a purchase of the equipment or rental of the land would be approved as an allowable direct cost. If any part of the donated property was acquired with Federal funds, only the non-federal share of the property may be counted as cost-sharing or matching.
I11(ii) If approval is not obtained under paragraph (e)(2)(i) of this section, no amount may be counted for donated land, and only depreciation or use allowances may be counted for donated equipment and buildings. The depreciation or use allowances for this property are not treated as third party in-kind contributions. Instead, they are treated as costs incurred by the grantee or subgrantee. They are computed and allocated (usually as indirect costs) in accordance with the cost principles specified in ï¿½1A3016.22, in the same way as depreciation or use allowances for purchased equipment and buildings. The amount of depreciation or use allowances for donated equipment and buildings is based on the property's market value at the time it was donated.
I11(f) T3Valuation of grantee or subgrantee donated real property for construction/acquisition.G1T1 If a grantee or subgrantee donates real property for a construction or facilities acquisition project, the current market value of that property may be counted as cost sharing or matching. If any part of the donated property was acquired with Federal funds, only the non-federal share of the property may be counted as cost sharing or matching.
I11(g) T3Appraisal of real property.G1T1 In some cases under paragraphs (d), (e) and (f) of this section, it will be necessary to establish the market value of land or a building or the fair rental rate of land or of space in a building. In these cases, the Federal agency may require the market value or fair rental value be set by an independent appraiser, and that the value or rate be certified by the grantee. This requirement will also be imposed by the grantee on subgrantees.

I80ï¿½1A3016.25 
I89Program income. 
I11(a) T3General.G1T1 Grantees are encouraged to earn income to defray program costs. Program income includes income from fees for services performed, from the use or rental of real or personal property acquired with grant funds, from the sale of commodities or items fabricated under a grant agreement, ï¿½117ï¿½and from payments of principal and interest on loans made with grant funds. Except as otherwise provided in regulations of the Federal agency, program income does not include interest on grant funds, rebates, credits, discounts, refunds, etc. and interest earned on any of them. 
I11(b) T3Definition of program income.G1T1 Program income means gross income received by the grantee or subgrantee directly generated by a grant supported activity, or earned only as a result of the grant agreement during the grant period. ``During the grant period'' is the time between the effective date of the award and the ending date of the award reflected in the final financial report. 
I11(c) T3Cost of generating program income.G1T1 If authorized by Federal regulations or the grant agreement, costs incident to the generation of program income may be deducted from gross income to determine program income. 
I11(d) T3Governmental revenues.G1T1 Taxes, special assessments, levies, fines, and other such revenues raised by a grantee or subgrantee are not program income unless the revenues are specifically identified in the grant agreement or Federal agency regulations as program income. 
I11(e) T3Royalties.G1T1 Income from royalties and license fees for copyrighted material, patents, and inventions developed by a grantee or subgrantee is program income only if the revenues are specifically identified in the grant agreement or Federal agency regulations as program income. (See ï¿½1A3016.34.) 
I11(f) T3Property.G1T1 Proceeds from the sale of real property or equipment will be handled in accordance with the requirements of ï¿½1A3016.31 and 3016.32. 
I11(g) T3Use of program income.G1T1 Program income shall be deducted from outlays which may be both Federal and non-Federal as described below, unless the Federal agency regulations or the grant agreement specify another alternative (or a combination of the alternatives). In specifying alternatives, the Federal agency may distinguish between income earned by the grantee and income earned by subgrantees and between the sources, kinds, or amounts of income. When Federal agencies authorize the alternatives in paragraphs (g) (2) and (3) of this section, program income in excess of any limits stipulated shall also be deducted from outlays. 
I11(1) T3Deduction.G1T1 Ordinarily program income shall be deducted from total allowable costs to determine the net allowable costs. Program income shall be used for current costs unless the Federal agency authorizes otherwise. Program income which the grantee did not anticipate at the time of the award shall be used to reduce the Federal agency and grantee contributions rather than to increase the funds committed to the project. 
I11(2) T3Addition.G1T1 When authorized, program income may be added to the funds committed to the grant agreement by the Federal agency and the grantee. The program income shall be used for the purposes and under the conditions of the grant agreement. 
I11(3) T3Cost sharing or matching.G1T1 When authorized, program income may be used to meet the cost sharing or matching requirement of the grant agreement. The amount of the Federal grant award remains the same. 
I11(h) T3Income after the award period.G1T1 There are no Federal requirements governing the disposition of program income earned after the end of the award period (i.e., until the ending date of the final financial report, see paragraph (a) of this section), unless the terms of the agreement or the Federal agency regulations provide otherwise.


I80ï¿½1A3016.26 
I89Non-Federal audit. 


I11(a) T3Basic rule.G1T1 Grantees and subgrantees are responsible for obtaining audits in accordance with the Single Audit Act Amendments of 1996 (31 U.S.C. 7501ï¿½097507) and revised OMB Circular Aï¿½09133, ``Audits of States, Local Governments, and Non-Profit Organizations.'' The audits shall be made by an independent auditor in accordance with generally accepted government auditing standards covering financial audits.

I11(1) In USDA, revised OMB Circular Aï¿½09133 is implemented in 7 CFR part 3052, ``Audits of States, Local Governments, and Non-Profit Organizations.''

I11(2) [Reserved]


I11(b) T3Subgrantees.G1T1 State or local governments, as those terms are defined for ï¿½118ï¿½purposes of the Single Audit Act Amendments of 1996, that provide Federal awards to a subgrantee, which expends $300,000 or more (or other amount as specified by OMB) in Federal awards in a fiscal year, shall:

I11(1) Determine whether State or local subgrantees have met the audit requirements of the Act and whether subgrantees covered by OMB Circular Aï¿½09110, ``Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations,'' have met the audit requirements of the Act. Commercial contractors (private for-profit and private and governmental organizations) providing goods and services to State and local governments are not required to have a single audit performed. State and local governments should use their own procedures to ensure that the contractor has complied with laws and regulations affecting the expenditure of Federal funds;


I11(2) Determine whether the subgrantee spent Federal assistance funds provided in accordance with applicable laws and regulations. This may be accomplished by reviewing an audit of the subgrantee made in accordance with the Act, Circular Aï¿½09110, or through other means (e.g., program reviews) if the subgrantee has not had such an audit; 
I11(3) Ensure that appropriate corrective action is taken within six months after receipt of the audit report in instance of noncompliance with Federal laws and regulations; 
I11(4) Consider whether subgrantee audits necessitate adjustment of the grantee's own records; and 
I11(5) Require each subgrantee to permit independent auditors to have access to the records and financial statements. 
I11(c) T3Auditor selection.G1T1 In arranging for audit services, ï¿½1A3016.36 shall be followed.

Q04I20[53 FR 8044, 8087, Mar. 11, 1988, as amended at 62 FR 45939, Aug. 29, 1997]


I84Changes, Property, and Subawards

I80ï¿½1A3016.30
I89Changes.
I11(a) T3GeneralG1T1. Grantees and subgrantees are permitted to rebudget within the approved direct cost budget to meet unanticipated requirements and may make limited program changes to the approved project. However, unless waived by the awarding agency, certain types of post-award changes in budgets and projects shall require the prior written approval of the awarding agency.
I11(b) T3Relation to cost principles.G1T1 The applicable cost principles (see ï¿½1A3016.22) contain requirements for prior approval of certain types of costs. Except where waived, those requirements apply to all grants and subgrants even if paragraphs (c) through (f) of this section do not.
I11(c) T3Budget changes.G1T1 (1) T3Nonconstruction projects.G1T1 Except as stated in other regulations or an award document, grantees or subgrantees shall obtain the prior approval of the awarding agency whenever any of the following changes is anticipated under a nonconstruction award:
I11(i) Any revision which would result in the need for additional funding. 
I11(ii) Unless waived by the awarding agency, cumulative transfers among direct cost categories, or, if applicable, among separately budgeted programs, projects, functions, or activities which exceed or are expected to exceed ten percent of the current total approved budget, whenever the awarding agency's share exceeds $100,000.
I11(iii) Transfer of funds allotted for training allowances (i.e., from direct payments to trainees to other expense categories).
I11(2) T3Construction projects.G1T1 Grantees and subgrantees shall obtain prior written approval for any budget revision which would result in the need for additional funds.
I11(3) T3Combined construction and nonconstruction projects.G1T1 When a grant or subgrant provides funding for both construction and nonconstruction activities, the grantee or subgrantee must obtain prior written approval from the awarding agency before making any fund or budget transfer from nonconstruction to construction or vice versa.
I11(d) T3Programmatic changes.G1T1 Grantees or subgrantees must obtain the prior approval of the awarding agency whenever any of the following actions is anticipated:
ï¿½119ï¿½I11(1) Any revision of the scope or objectives of the project (regardless of whether there is an associated budget revision requiring prior approval).
I11(2) Need to extend the period of availability of funds.
I11(3) Changes in key persons in cases where specified in an application or a grant award. In research projects, a change in the project director or principal investigator shall always require approval unless waived by the awarding agency. 
I11(4) Under nonconstruction projects, contracting out, subgranting (if authorized by law) or otherwise obtaining the services of a third party to perform activities which are central to the purposes of the award. This approval requirement is in addition to the approval requirements of ï¿½1A3016.36 but does not apply to the procurement of equipment, supplies, and general support services.
I11(e) T3Additional prior approval requirements.G1T1 The awarding agency may not require prior approval for any budget revision which is not described in paragraph (c) of this section.
I11(f) T3Requesting prior approval.G1T1 (1) A request for prior approval of any budget revision will be in the same budget formal the grantee used in its application and shall be accompanied by a narrative justification for the proposed revision.
I11(2) A request for a prior approval under the applicable Federal cost principles (see ï¿½1A3016.22) may be made by letter.
I11(3) A request by a subgrantee for prior approval will be addressed in writing to the grantee. The grantee will promptly review such request and shall approve or disapprove the request in writing. A grantee will not approve any budget or project revision which is inconsistent with the purpose or terms and conditions of the Federal grant to the grantee. If the revision, requested by the subgrantee would result in a change to the grantee's approved project which requires Federal prior approval, the grantee will obtain the Federal agency's approval before approving the subgrantee's request.

I80ï¿½1A3016.31
I89Real property.
I11(a) T3Title.G1T1 Subject to the obligations and conditions set forth in this section, title to real property acquired under a grant or subgrant will vest upon acquisition in the grantee or subgrantee respectively.
I11(b) T3Use.G1T1 Except as otherwise provided by Federal statutes, real property will be used for the originally authorized purposes as long as needed for that purposes, and the grantee or subgrantee shall not dispose of or encumber its title or other interests.
I11(c) T3Disposition.G1T1 When real property is no longer needed for the originally authorized purpose, the grantee or subgrantee will request disposition instructions from the awarding agency. The instructions will provide for one of the following alternatives:
I11(1) T3Retention of title.G1T1 Retain title after compensating the awarding agency. The amount paid to the awarding agency will be computed by applying the awarding agency's percentage of participation in the cost of the original purchase to the fair market value of the property. However, in those situations where a grantee or subgrantee is disposing of real property acquired with grant funds and acquiring replacement real property under the same program, the net proceeds from the disposition may be used as an offset to the cost of the replacement property.
I11(2) T3Sale of property.G1T1 Sell the property and compensate the awarding agency. The amount due to the awarding agency will be calculated by applying the awarding agency's percentage of participation in the cost of the original purchase to the proceeds of the sale after deduction of any actual and reasonable selling and fixing-up expenses. If the grant is still active, the net proceeds from sale may be offset against the original cost of the property. When a grantee or subgrantee is directed to sell property, sales procedures shall be followed that provide for competition to the extent practicable and result in the highest possible return.
I11(3) T3Transfer of title.G1T1 Transfer title to the awarding agency or to a third-party designated/approved by the ï¿½120ï¿½awarding agency. The grantee or subgrantee shall be paid an amount calculated by applying the grantee or subgrantee's percentage of participation in the purchase of the real property to the current fair market value of the property.

I80ï¿½1A3016.32
I89Equipment.
I11(a) T3Title.G1T1 Subject to the obligations and conditions set forth in this section, title to equipment acquired under a grant or subgrant will vest upon acquisition in the grantee or subgrantee respectively.
I11(b) T3States.G1T1 A State will use, manage, and dispose of equipment acquired under a grant by the State in accordance with State laws and procedures. Other grantees and subgrantees will follow paragraphs (c) through (e) of this section.
I11(c) T3Use.G1T1 (1) Equipment shall be used by the grantee or subgrantee in the program or project for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds. When no longer needed for the original program or project, the equipment may be used in other activities currently or previously supported by a Federal agency.
I11(2) The grantee or subgrantee shall also make equipment available for use on other projects or programs currently or previously supported by the Federal Government, providing such use will not interfere with the work on the projects or program for which it was originally acquired. First preference for other use shall be given to other programs or projects supported by the awarding agency. User fees should be considered if appropriate.
I11(3) Notwithstanding the encouragement in ï¿½1A3016.25(a) to earn program income, the grantee or subgrantee must not use equipment acquired with grant funds to provide services for a fee to compete unfairly with private companies that provide equivalent services, unless specifically permitted or contemplated by Federal statute.
I11(4) When acquiring replacement equipment, the grantee or subgrantee may use the equipment to be replaced as a trade-in or sell the property and use the proceeds to offset the cost of the replacement property, subject to the approval of the awarding agency.
I11(d) T3Management requirements.G1T1 Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part with grant funds, until disposition takes place will, as a minimum, meet the following requirements:
I11(1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property.
I11(2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years.
I11(3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft shall be investigated.
I11(4) Adequate maintenance procedures must be developed to keep the property in good condition.
I11(5) If the grantee or subgrantee is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return.
I11(e) T3Disposition.G1T1 When original or replacement equipment acquired under a grant or subgrant is no longer needed for the original project or program or for other activities currently or previously supported by a Federal agency, disposition of the equipment will be made as follows:
I11(1) Items of equipment with a current per-unit fair market value of less than $5,000 may be retained, sold or otherwise disposed of with no further obligation to the awarding agency.
I11(2) Items of equipment with a current per unit fair market value in excess of $5,000 may be retained or sold and the awarding agency shall have a right to an amount calculated by multiplying the current market value or proceeds from sale by the awarding agency's share of the equipment.
ï¿½121ï¿½I11(3) In cases where a grantee or subgrantee fails to take appropriate disposition actions, the awarding agency may direct the grantee or subgrantee to take excess and disposition actions.
I11(f) T3Federal equipment.G1T1 In the event a grantee or subgrantee is provided federally-owned equipment:
I11(1) Title will remain vested in the Federal Government.
I11(2) Grantees or subgrantees will manage the equipment in accordance with Federal agency rules and procedures, and submit an annual inventory listing.
I11(3) When the equipment is no longer needed, the grantee or subgrantee will request disposition instructions from the Federal agency.
I11(g) T3Right to transfer title.G1T1 The Federal awarding agency may reserve the right to transfer title to the Federal Government or a third part named by the awarding agency when such a third party is otherwise eligible under existing statutes. Such transfers shall be subject to the following standards:
I11(1) The property shall be identified in the grant or otherwise made known to the grantee in writing.
I11(2) The Federal awarding agency shall issue disposition instruction within 120 calendar days after the end of the Federal support of the project for which it was acquired. If the Federal awarding agency fails to issue disposition instructions within the 120 calendar-day period the grantee shall follow ï¿½1A3016.32(e).
I11(3) When title to equipment is transferred, the grantee shall be paid an amount calculated by applying the percentage of participation in the purchase to the current fair market value of the property.

I80ï¿½1A3016.33
I89Supplies.
I11(a) T3Title.G1T1 Title to supplies acquired under a grant or subgrant will vest, upon acquisition, in the grantee or subgrantee respectively.
I11(b) T3Disposition.G1T1 If there is a residual inventory of unused supplies exceeding $5,000 in total aggregate fair market value upon termination or completion of the award, and if the supplies are not needed for any other federally sponsored programs or projects, the grantee or subgrantee shall compensate the awarding agency for its share.

I80ï¿½1A3016.34
I89Copyrights.
I11The Federal awarding agency reserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish or otherwise use, and to authorize others to use, for Federal Government purposes:
I11(a) The copyright in any work developed under a grant, subgrant, or contract under a grant or subgrant; and
I11(b) Any rights of copyright to which a grantee, subgrantee or a contractor purchases ownership with grant support.

I80ï¿½1A3016.35
I89Subawards to debarred and suspended parties.
I11Grantees and subgrantees must not make any award or permit any award (subgrant or contract) at any tier to any party which is debarred or suspended or is otherwise excluded from or ineligible for participation in Federal assistance programs under Executive Order 12549, ``Debarment and Suspension.''

I80ï¿½1A3016.36
I89Procurement.
I11(a) T3States.G1T1 When procuring property and services under a grant, a State will follow the same policies and procedures it uses for procurements from its non-Federal funds. The State will ensure that every purchase order or other contract includes any clauses required by Federal statutes and executive orders and their implementing regulations. Other grantees and subgrantees will follow paragraphs (b) through (i) in this section.
I11(b) T3Procurement standards.G1T1 (1) Grantees and subgrantees will use their own procurement procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this section.
I11(2) Grantees and subgrantees will maintain a contract administration system which ensures that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.
I11(3) Grantees and subgrantees will maintain a written code of standards of ï¿½122ï¿½conduct governing the performance of their employees engaged in the award and administration of contracts. No employee, officer or agent of the grantee or subgrantee shall participate in selection, or in the award or administration of a contract supported by Federal funds if a conflict of interest, real or apparent, would be involved. Such a conflict would arise when:
I11(i) The employee, officer or agent, 
I11(ii) Any member of his immediate family,
I11(iii) His or her partner, or 
I11(iv) An organization which employs, or is about to employ, any of the above, has a financial or other interest in the firm selected for award. The grantee's or subgrantee's officers, employees or agents will neither solicit nor accept gratuities, favors or anything of monetary value from contractors, potential contractors, or parties to subagreements. Grantee and subgrantees may set minimum rules where the financial interest is not substantial or the gift is an unsolicited item of nominal intrinsic value. To the extent permitted by State or local law or regulations, such standards or conduct will provide for penalties, sanctions, or other disciplinary actions for violations of such standards by the grantee's and subgrantee's officers, employees, or agents, or by contractors or their agents. The awarding agency may in regulation provide additional prohibitions relative to real, apparent, or potential conflicts of interest.
I11(4) Grantee and subgrantee procedures will provide for a review of proposed procurements to avoid purchase of unnecessary or duplicative items. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach.
I11(5) To foster greater economy and efficiency, grantees and subgrantees are encouraged to enter into State and local intergovernmental agreements for procurement or use of common goods and services.
I11(6) Grantees and subgrantees are encouraged to use Federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs.
I11(7) Grantees and subgrantees are encouraged to use value engineering clauses in contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions. Value engineering is a systematic and creative analysis of each contract item or task to ensure that its essential function is provided at the overall lower cost.
I11(8) Grantees and subgrantees will make awards only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.
I11(9) Grantees and subgrantees will maintain records sufficient to detail the significant history of a procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.
I11(10) Grantees and subgrantees will use time and material type contracts only_
I11(i) After a determination that no other contract is suitable, and 
I11(ii) If the contract includes a ceiling price that the contractor exceeds at its own risk.
I11(11) Grantees and subgrantees alone will be responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but are not limited to source evaluation, protests, disputes, and claims. These standards do not relieve the grantee or subgrantee of any contractual responsibilities under its contracts. Federal agencies will not substitute their judgment for that of the grantee or subgrantee unless the matter is primarily a Federal concern. Violations of law will be referred to the local, State, or Federal authority having proper jurisdiction. 
ï¿½123ï¿½I11(12) Grantees and subgrantees will have protest procedures to handle and resolve disputes relating to their procurements and shall in all instances disclose information regarding the protest to the awarding agency. A protestor must exhaust all administrative remedies with the grantee and subgrantee before pursuing a protest with the Federal agency. Reviews of protests by the Federal agency will be limited to: 
I11(i) Violations of Federal law or regulations and the standards of this section (violations of State or local law will be under the jurisdiction of State or local authorities) and 
I11(ii) Violations of the grantee's or subgrantee's protest procedures for failure to review a complaint or protest. Protests received by the Federal agency other than those specified above will be referred to the grantee or subgrantee. 
I11(c) T3CompetitionG1T1. (1) All procurement transactions will be conducted in a manner providing full and open competition consistent with the standards of ï¿½1A3016.36. Some of the situations considered to be restrictive of competition include but are not limited to: 
I11(i) Placing unreasonable requirements on firms in order for them to qualify to do business, 
I11(ii) Requiring unnecessary experience and excessive bonding, 
I11(iii) Noncompetitive pricing practices between firms or between affiliated companies, 
I11(iv) Noncompetitive awards to consultants that are on retainer contracts, 
I11(v) Organizational conflicts of interest, 
I11(vi) Specifying only a ``brand name'' product instead of allowing ``an equal'' product to be offered and describing the performance of other relevant requirements of the procurement, and 
I11(vii) Any arbitrary action in the procurement process. 
I11(2) Grantees and subgrantees will conduct procurements in a manner that prohibits the use of statutorily or administratively imposed in-State or local geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts State licensing laws. When contracting for architectural and engineering (A/E) services, geographic location may be a selection criteria provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract. 
I11(3) Grantees will have written selection procedures for procurement transactions. These procedures will ensure that all solicitations: 
I11(i) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description shall not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured, and when necessary, shall set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a ``brand name or equal'' description may be used as a means to define the performance or other salient requirements of a procurement. The specific features of the named brand which must be met by offerors shall be clearly stated; and 
I11(ii) Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals. 
I11(4) Grantees and subgrantees will ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, grantees and subgrantees will not preclude potential bidders from qualifying during the solicitation period. 
I11(d) T3Methods of procurement to be followed.G1T1 (1) Procurement by T3small purchase proceduresG1T1. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the simplified acquisition threshold fixed at 41 U.S.C. 403(11) (currently set at ï¿½124ï¿½$100,000). If small purchase procedures are used, price or rate quotations shall be obtained from an adequate number of qualified sources. 
I11(2) Procurement by T3sealed bidsG1T1 (formal advertising). Bids are publicly solicited and a firm-fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bid method is the preferred method for procuring construction, if the conditions in ï¿½1A3016.36(d)(2)(i) apply. 
I11(i) In order for sealed bidding to be feasible, the following conditions should be present: 
I11(A) A complete, adequate, and realistic specification or purchase description is available; 
I11(B) Two or more responsible bidders are willing and able to compete effectively and for the business; and 
I11(C) The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price. 
I11(ii) If sealed bids are used, the following requirements apply: 
I11(A) The invitation for bids will be publicly advertised and bids shall be solicited from an adequate number of known suppliers, providing them sufficient time prior to the date set for opening the bids; 
I11(B) The invitation for bids, which will include any specifications and pertinent attachments, shall define the items or services in order for the bidder to properly respond; 
I11(C) All bids will be publicly opened at the time and place prescribed in the invitation for bids; 
I11(D) A firm fixed-price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs shall be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and 
I11(E) Any or all bids may be rejected if there is a sound documented reason. 
I11(3) Procurement by T3competitive proposals.G1T1 The technique of competitive proposals is normally conducted with more than one source submitting an offer, and either a fixed-price or cost-reimbursement type contract is awarded. It is generally used when conditions are not appropriate for the use of sealed bids. If this method is used, the following requirements apply: 
I11(i) Requests for proposals will be publicized and identify all evaluation factors and their relative importance. Any response to publicized requests for proposals shall be honored to the maximum extent practical; 
I11(ii) Proposals will be solicited from an adequate number of qualified sources; 
I11(iii) Grantees and subgrantees will have a method for conducting technical evaluations of the proposals received and for selecting awardees; 
I11(iv) Awards will be made to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered; and 
I11(v) Grantees and subgrantees may use competitive proposal procedures for qualifications-based procurement of architectural/engineering (A/E) professional services whereby competitors' qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method, where price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be used to purchase other types of services though A/E firms are a potential source to perform the proposed effort. 
I11(4) Procurement by T3noncompetitive proposalsG1T1 is procurement through solicitation of a proposal from only one source, or after solicitation of a number of sources, competition is determined inadequate. 
I11(i) Procurement by noncompetitive proposals may be used only when the award of a contract is infeasible under small purchase procedures, sealed bids or competitive proposals and one of the following circumstances applies: 
I11(A) The item is available only from a single source; 
I11(B) The public exigency or emergency for the requirement will not permit a ï¿½125ï¿½delay resulting from competitive solicitation; 
I11(C) The awarding agency authorizes noncompetitive proposals; or 
I11(D) After solicitation of a number of sources, competition is determined inadequate. 
I11(ii) Cost analysis, i.e., verifying the proposed cost data, the projections of the data, and the evaluation of the specific elements of costs and profits, is required. 
I11(iii) Grantees and subgrantees may be required to submit the proposed procurement to the awarding agency for pre-award review in accordance with paragraph (g) of this section. 
I11(e) T3Contracting with small and minority firms, women's business enterprise and labor surplus area firms.G1T1 (1) The grantee and subgrantee will take all necessary affirmative steps to assure that minority firms, women's business enterprises, and labor surplus area firms are used when possible.
I11(2) Affirmative steps shall include:
I11(i) Placing qualified small and minority businesses and women's business enterprises on solicitation lists;
I11(ii) Assuring that small and minority businesses, and women's business enterprises are solicited whenever they are potential sources;
I11(iii) Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority business, and women's business enterprises;
I11(iv) Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority business, and women's business enterprises;
I11(v) Using the services and assistance of the Small Business Administration, and the Minority Business Development Agency of the Department of Commerce; and
I11(vi) Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps listed in paragraphs (e)(2) (i) through (v) of this section.
I11(f) T3Contract cost and price.G1T1 (1) Grantees and subgrantees must perform a cost or price analysis in connection with every procurement action including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, grantees must make independent estimates before receiving bids or proposals. A cost analysis must be performed when the offeror is required to submit the elements of his estimated cost, e.g., under professional, consulting, and architectural engineering services contracts. A cost analysis will be necessary when adequate price competition is lacking, and for sole source procurements, including contract modifications or change orders, unless price reasonableness can be established on the basis of a catalog or market price of a commercial product sold in substantial quantities to the general public or based on prices set by law or regulation. A price analysis will be used in all other instances to determine the reasonableness of the proposed contract price.
I11(2) Grantees and subgrantees will negotiate profit as a separate element of the price for each contract in which there is no price competition and in all cases where cost analysis is performed. To establish a fair and reasonable profit, consideration will be given to the complexity of the work to be performed, the risk borne by the contractor, the contractor's investment, the amount of subcontracting, the quality of its record of past performance, and industry profit rates in the surrounding geographical area for similar work.
I11(3) Costs or prices based on estimated costs for contracts under grants will be allowable only to the extent that costs incurred or cost estimates included in negotiated prices are consistent with Federal cost principles (see ï¿½1A3016.22). Grantees may reference their own cost principles that comply with the applicable Federal cost principles.
I11(4) The cost plus a percentage of cost and percentage of construction cost methods of contracting shall not be used.
I11(g) T3Awarding agency review.G1T1 (1) Grantees and subgrantees must make available, upon request of the awarding agency, technical specifications on proposed procurements where the awarding agency believes such review is needed to ensure that the item and/or ï¿½126ï¿½service specified is the one being proposed for purchase. This review generally will take place prior to the time the specification is incorporated into a solicitation document. However, if the grantee or subgrantee desires to have the review accomplished after a solicitation has been developed, the awarding agency may still review the specifications, with such review usually limited to the technical aspects of the proposed purchase. 
I11(2) Grantees and subgrantees must on request make available for awarding agency pre-award review procurement documents, such as requests for proposals or invitations for bids, independent cost estimates, etc. when: 
I11(i) A grantee's or subgrantee's procurement procedures or operation fails to comply with the procurement standards in this section; or 
I11(ii) The procurement is expected to exceed the simplified acquisition threshold and is to be awarded without competition or only one bid or offer is received in response to a solicitation; or 
I11(iii) The procurement, which is expected to exceed the simplified acquisition threshold, specifies a ``brand name'' product; or 
I11(iv) The proposed award is more than the simplified acquisition threshold and is to be awarded to other than the apparent low bidder under a sealed bid procurement; or 
I11(v) A proposed contract modification changes the scope of a contract or increases the contract amount by more than the simplified acquisition threshold. 
I11(3) A grantee or subgrantee will be exempt from the pre-award review in paragraph (g)(2) of this section if the awarding agency determines that its procurement systems comply with the standards of this section. 
I11(i) A grantee or subgrantee may request that its procurement system be reviewed by the awarding agency to determine whether its system meets these standards in order for its system to be certified. Generally, these reviews shall occur where there is a continuous high-dollar funding, and third-party contracts are awarded on a regular basis. 
I11(ii) A grantee or subgrantee may self-certify its procurement system. Such self-certification shall not limit the awarding agency's right to survey the system. Under a self-certification procedure, awarding agencies may wish to rely on written assurances from the grantee or subgrantee that it is complying with these standards. A grantee or subgrantee will cite specific procedures, regulations, standards, etc., as being in compliance with these requirements and have its system available for review. 
I11(h) T3Bonding requirements.G1T1 For construction or facility improvement contracts or subcontracts exceeding the simplified acquisition threshold, the awarding agency may accept the bonding policy and requirements of the grantee or subgrantee provided the awarding agency has made a determination that the awarding agency's interest is adequately protected. If such a determination has not been made, the minimum requirements shall be as follows: 
I11(1) T3A bid guarantee from each bidder equivalent to five percent of the bid price.G1T1 The ``bid guarantee'' shall consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of his bid, execute such contractual documents as may be required within the time specified. 
I11(2) T3A performance bond on the part of the contractor for 100 percent of the contract price.G1T1 A ``performance bond'' is one executed in connection with a contract to secure fulfillment of all the contractor's obligations under such contract. 
I11(3) T3A payment bond on the part of the contractor for 100 percent of the contract price.G1T1 A ``payment bond'' is one executed in connection with a contract to assure payment as required by law of all persons supplying labor and material in the execution of the work provided for in the contract. 
I11(i) T3Contract provisions.G1T1 A grantee's and subgrantee's contracts must contain provisions in paragraph (i) of this section. Federal agencies are permitted to require changes, remedies, changed conditions, access and records retention, suspension of work, and other ï¿½127ï¿½clauses approved by the Office of Federal Procurement Policy. 
I11(1) Administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms, and provide for such sanctions and penalties as may be appropriate. (Contracts more than the simplified acquisition threshold) 
I11(2) Termination for cause and for convenience by the grantee or subgrantee including the manner by which it will be effected and the basis for settlement. (All contracts in excess of $10,000) 
I11(3) Compliance with Executive Order 11246 of September 24, 1965, entitled ``Equal Employment Opportunity,'' as amended by Executive Order 11375 of October 13, 1967, and as supplemented in Department of Labor regulations (41 CFR chapter 60). (All construction contracts awarded in excess of $10,000 by grantees and their contractors or subgrantees) 
I11(4) Compliance with the Copeland ``Anti-Kickback'' Act (18 U.S.C. 874) as supplemented in Department of Labor regulations (29 CFR Part 3). (All contracts and subgrants for construction or repair) 
I11(5) Compliance with the Davis-Bacon Act (40 U.S.C. 276a to 276aï¿½097) as supplemented by Department of Labor regulations (29 CFR Part 5). (Construction contracts in excess of $2000 awarded by grantees and subgrantees when required by Federal grant program legislation) 
I11(6) Compliance with Sections 103 and 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327ï¿½09330) as supplemented by Department of Labor regulations (29 CFR Part 5). (Construction contracts awarded by grantees and subgrantees in excess of $2000, and in excess of $2500 for other contracts which involve the employment of mechanics or laborers) 
I11(7) Notice of awarding agency requirements and regulations pertaining to reporting. 
I11(8) Notice of awarding agency requirements and regulations pertaining to patent rights with respect to any discovery or invention which arises or is developed in the course of or under such contract. 
I11(9) Awarding agency requirements and regulations pertaining to copyrights and rights in data. 
I11(10) Access by the grantee, the subgrantee, the Federal grantor agency, the Comptroller General of the United States, or any of their duly authorized representatives to any books, documents, papers, and records of the contractor which are directly pertinent to that specific contract for the purpose of making audit, examination, excerpts, and transcriptions. 
I11(11) Retention of all required records for three years after grantees or subgrantees make final payments and all other pending matters are closed. 
I11(12) Compliance with all applicable standards, orders, or requirements issued under section 306 of the Clean Air Act (42 U.S.C. 1857(h)), section 508 of the Clean Water Act (33 U.S.C. 1368), Executive Order 11738, and Environmental Protection Agency regulations (40 CFR part 15). (Contracts, subcontracts, and subgrants of amounts in excess of $100,000) 
I11(13) 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 (Pub. L. 94ï¿½09163, 89 Stat. 871). 
Q04I20[53 FR 8044, 8087, Mar. 11, 1988, as amended at 60 FR 19639, 19641, Apr. 19, 1995]

I80ï¿½1A3016.37
I89Subgrants.
I11(a) T3States.G1T1 States shall follow state law and procedures when awarding and administering subgrants (whether on a cost reimbursement or fixed amount basis) of financial assistance to local and Indian tribal governments. States shall:
I11(1) Ensure that every subgrant includes any clauses required by Federal statute and executive orders and their implementing regulations;
I11(2) Ensure that subgrantees are aware of requirements imposed upon them by Federal statute and regulation;
I11(3) Ensure that a provision for compliance with ï¿½1A3016.42 is placed in every cost reimbursement subgrant; and
I11(4) Conform any advances of grant funds to subgrantees substantially to the same standards of timing and ï¿½128ï¿½amount that apply to cash advances by Federal agencies.
I11(b) T3All other grantees.G1T1 All other grantees shall follow the provisions of this part which are applicable to awarding agencies when awarding and administering subgrants (whether on a cost reimbursement or fixed amount basis) of financial assistance to local and Indian tribal governments. Grantees shall:
I11(1) Ensure that every subgrant includes a provision for compliance with this part;
I11(2) Ensure that every subgrant includes any clauses required by Federal statute and executive orders and their implementing regulations; and
I11(3) Ensure that subgrantees are aware of requirements imposed upon them by Federal statutes and regulations.
I11(c) T3Exceptions.G1T1 By their own terms, certain provisions of this part do not apply to the award and administration of subgrants:
I11(1) Section 3016.10;
I11(2) Section 3016.11;
I11(3) The letter-of-credit procedures specified in Treasury Regulations at 31 CFR part 205, cited in ï¿½1A3016.21; and
I11(4) Section 3016.50.
I84Reports, Records, Retention, and Enforcement

I80ï¿½1A3016.40
I89Monitoring and reporting program performance.
I11(a) T3Monitoring by grantees.G1T1 Grantees are responsible for managing the day-to-day operations of grant and subgrant supported activities. Grantees must monitor grant and subgrant supported activities to assure compliance with applicable Federal requirements and that performance goals are being achieved. Grantee monitoring must cover each program, function or activity.
I11(b) T3Nonconstruction performance reports.G1T1 The Federal agency may, if it decides that performance information available from subsequent applications contains sufficient information to meet its programmatic needs, require the grantee to submit a performance report only upon expiration or termination of grant support. Unless waived by the Federal agency this report will be due on the same date as the final Financial Status Report.
I11(1) Grantees shall submit annual performance reports unless the awarding agency requires quarterly or semi-annual reports. However, performance reports will not be required more frequently than quarterly. Annual reports shall be due 90 days after the grant year, quarterly or semi-annual reports shall be due 30 days after the reporting period. The final performance report will be due 90 days after the expiration or termination of grant support. If a justified request is submitted by a grantee, the Federal agency may extend the due date for any performance report. Additionally, requirements for unnecessary performance reports may be waived by the Federal agency.
I11(2) Performance reports will contain, for each grant, brief information on the following:
I11(i) A comparison of actual accomplishments to the objectives established for the period. Where the output of the project can be quantified, a computation of the cost per unit of output may be required if that information will be useful.
I11(ii) The reasons for slippage if established objectives were not met.
I11(iii) Additional pertinent information including, when appropriate, analysis and explanation of cost overruns or high unit costs.
I11(3) Grantees will not be required to submit more than the original and two copies of performance reports.
I11(4) Grantees will adhere to the standards in this section in prescribing performance reporting requirements for subgrantees.
I11(c) T3Construction performance reports.G1T1 For the most part, on-site technical inspections and certified percentage-of-completion data are relied on heavily by Federal agencies to monitor progress under construction grants and subgrants. The Federal agency will require additional formal performance reports only when considered necessary, and never more frequently than quarterly.
I11(d) T3Significant developments.G1T1 Events may occur between the scheduled performance reporting dates which have significant impact upon the grant or subgrant supported activity. In such ï¿½129ï¿½cases, the grantee must inform the Federal agency as soon as the following types of conditions become known:
I11(1) Problems, delays, or adverse conditions which will materially impair the ability to meet the objective of the award. This disclosure must include a statement of the action taken, or contemplated, and any assistance needed to resolve the situation.
I11(2) Favorable developments which enable meeting time schedules and objectives sooner or at less cost than anticipated or producing more beneficial results than originally planned.
I11(e) Federal agencies may make site visits as warranted by program needs.
I11(f) T3Waivers, extensions.G1T1 (1) Federal agencies may waive any performance report required by this part if not needed.
I11(2) The grantee may waive any performance report from a subgrantee when not needed. The grantee may extend the due date for any performance report from a subgrantee if the grantee will still be able to meet its performance reporting obligations to the Federal agency. 

I80ï¿½1A3016.41
I89Financial reporting.
I11(a) T3General.G1T1 (1) Except as provided in paragraphs (a) (2) and (5) of this section, grantees will use only the forms specified in paragraphs (a) through (e) of this section, and such supplementary or other forms as may from time to time be authorized by OMB, for:
I11(i) Submitting financial reports to Federal agencies, or
I11(ii) Requesting advances or reimbursements when letters of credit are not used.
I11(2) Grantees need not apply the forms prescribed in this section in dealing with their subgrantees. However, grantees shall not impose more burdensome requirements on subgrantees.
I11(3) Grantees shall follow all applicable standard and supplemental Federal agency instructions approved by OMB to the extent required under the Paperwork Reduction Act of 1980 for use in connection with forms specified in paragraphs (b) through (e) of this section. Federal agencies may issue substantive supplementary instructions only with the approval of OMB. Federal agencies may shade out or instruct the grantee to disregard any line item that the Federal agency finds unnecessary for its decisionmaking purposes. 
I11(4) Grantees will not be required to submit more than the original and two copies of forms required under this part. 
I11(5) Federal agencies may provide computer outputs to grantees to expedite or contribute to the accuracy of reporting. Federal agencies may accept the required information from grantees in machine usable format or computer printouts instead of prescribed forms. 
I11(6) Federal agencies may waive any report required by this section if not needed. 
I11(7) Federal agencies may extend the due date of any financial report upon receiving a justified request from a grantee. 
I11(b) T3Financial Status ReportG1T1_(1) T3Form.G1T1 Grantees will use Standard Form 269 or 269A, Financial Status Report, to report the status of funds for all nonconstruction grants and for construction grants when required in accordance with paragraph ï¿½1A3016.41(e)(2)(iii) of this section. 
I11(2) T3Accounting basis.G1T1 Each grantee will report program outlays and program income on a cash or accrual basis as prescribed by the awarding agency. If the Federal agency requires accrual information and the grantee's accounting records are not normally kept on the accural basis, the grantee shall not be required to convert its accounting system but shall develop such accrual information through and analysis of the documentation on hand. 
I11(3) T3Frequency.G1T1 The Federal agency may prescribe the frequency of the report for each project or program. However, the report will not be required more frequently than quarterly. If the Federal agency does not specify the frequency of the report, it will be submitted annually. A final report will be required upon expiration or termination of grant support. 
I11(4) T3Due date.G1T1 When reports are required on a quarterly or semiannual basis, they will be due 30 days after the reporting period. When required on an annual basis, they will be due 90 days after the grant year. Final reports will ï¿½130ï¿½be due 90 days after the expiration or termination of grant support. 
I11(c) T3Federal Cash Transactions ReportG1T1_(1) T3Form.G1T1 (i) For grants paid by letter or credit, Treasury check advances or electronic transfer of funds, the grantee will submit the Standard Form 272, Federal Cash Transactions Report, and when necessary, its continuation sheet, Standard Form 272a, unless the terms of the award exempt the grantee from this requirement. 
I11(ii) These reports will be used by the Federal agency to monitor cash advanced to grantees and to obtain disbursement or outlay information for each grant from grantees. The format of the report may be adapted as appropriate when reporting is to be accomplished with the assistance of automatic data processing equipment provided that the information to be submitted is not changed in substance. 
I11(2) T3Forecasts of Federal cash requirements.G1T1 Forecasts of Federal cash requirements may be required in the ``Remarks'' section of the report. 
I11(3) T3Cash in hands of subgrantees.G1T1 When considered necessary and feasible by the Federal agency, grantees may be required to report the amount of cash advances in excess of three days' needs in the hands of their subgrantees or contractors and to provide short narrative explanations of actions taken by the grantee to reduce the excess balances. 
I11(4) T3Frequency and due date.G1T1 Grantees must submit the report no later than 15 working days following the end of each quarter. However, where an advance either by letter of credit or electronic transfer of funds is authorized at an annualized rate of one million dollars or more, the Federal agency may require the report to be submitted within 15 working days following the end of each month. 
I11(d) T3Request for advance or reimbursementG1T1_(1) T3Advance payments.G1T1 Requests for Treasury check advance payments will be submitted on Standard Form 270, Request for Advance or Reimbursement. (This form will not be used for drawdowns under a letter of credit, electronic funds transfer or when Treasury check advance payments are made to the grantee automatically on a predetermined basis.) 
I11(2) T3Reimbursements.G1T1 Requests for reimbursement under nonconstruction grants will also be submitted on Standard Form 270. (For reimbursement requests under construction grants, see paragraph (e)(1) of this section.) 
I11(3) The frequency for submitting payment requests is treated in ï¿½1A3016.41(b)(3). 
I11(e) T3Outlay report and request for reimbursement for construction programs.G1T1 (1) Grants that support construction activities paid by reimbursement method.
I11(i) Requests for reimbursement under construction grants will be submitted on Standard Form 271, Outlay Report and Request for Reimbursement for Construction Programs. Federal agencies may, however, prescribe the Request for Advance or Reimbursement form, specified in ï¿½1A3016.41(d), instead of this form. 
I11(ii) The frequency for submitting reimbursement requests is treated in ï¿½1A3016.41(b)(3). 
I11(2) Grants that support construction activities paid by letter of credit, electronic funds transfer or Treasury check advance. 
I11(i) When a construction grant is paid by letter of credit, electronic funds transfer or Treasury check advances, the grantee will report its outlays to the Federal agency using Standard Form 271, Outlay Report and Request for Reimbursement for Construction Programs. The Federal agency will provide any necessary special instruction. However, frequency and due date shall be governed by ï¿½1A3016.41(b) (3) and (4). 
I11(ii) When a construction grant is paid by Treasury check advances based on periodic requests from the grantee, the advances will be requested on the form specified in ï¿½1A3016.41(d). 
I11(iii) The Federal agency may substitute the Financial Status Report specified in ï¿½1A3016.41(b) for the Outlay Report and Request for Reimbursement for Construction Programs. 
I11(3) T3Accounting basis.G1T1 The accounting basis for the Outlay Report and Request for Reimbursement for Construction Programs shall be governed by ï¿½1A3016.41(b)(2). 

ï¿½131ï¿½I80ï¿½1A3016.42 
I89Retention and access requirements for records. 
I11(a) T3Applicability.G1T1 (1) This section applies to all financial and programmatic records, supporting documents, statistical records, and other records of grantees or subgrantees which are: 
I11(i) Required to be maintained by the terms of this part, program regulations or the grant agreement, or 
I11(ii) Otherwise reasonably considered as pertinent to program regulations or the grant agreement. 
I11(2) This section does not apply to records maintained by contractors or subcontractors. For a requirement to place a provision concerning records in certain kinds of contracts, see ï¿½1A3016.36(i)(10). 
I11(b) T3Length of retention period.G1T1 (1) Except as otherwise provided, records must be retained for three years from the starting date specified in paragraph (c) of this section. 
I11(2) 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. 
I11(3) To avoid duplicate recordkeeping, awarding agencies may make special arrangements with grantees and subgrantees to retain any records which are continuously needed for joint use. The awarding agency will request transfer of records to its custody when it determines that the records possess long-term retention value. When the records are transferred to or maintained by the Federal agency, the 3-year retention requirement is not applicable to the grantee or subgrantee. 
I11(c) T3Starting date of retention periodG1T1_(1) T3General.G1T1 When grant support is continued or renewed at annual or other intervals, the retention period for the records of each funding period starts on the day the grantee or subgrantee submits to the awarding agency its single or last expenditure report for that period. However, if grant support is continued or renewed quarterly, the retention period for each year's records starts on the day the grantee submits its expenditure report for the last quarter of the Federal fiscal year. In all other cases, the retention period starts on the day the grantee submits its final expenditure report. If an expenditure report has been waived, the retention period starts on the day the report would have been due. 
I11(2) T3Real property and equipment records.G1T1 The retention period for real property and equipment records starts from the date of the disposition or replacement or transfer at the direction of the awarding agency. 
I11(3) T3Records for income transactions after grant or subgrant support.G1T1 In some cases grantees must report income after the period of grant support. Where there is such a requirement, the retention period for the records pertaining to the earning of the income starts from the end of the grantee's fiscal year in which the income is earned. 
I11(4) T3Indirect cost rate proposals, cost allocations plans, etc.G1T1 This paragraph applies to the following types of documents, and their supporting records: indirect cost rate computations or proposals, cost allocation plans, and any similar accounting computations of the rate at which a particular group of costs is chargeable (such as computer usage chargeback rates or composite fringe benefit rates). 
I11(i) T3If submitted for negotiation.G1T1 If the proposal, plan, or other computation is required to be submitted to the Federal Government (or to the grantee) to form the basis for negotiation of the rate, then the 3-year retention period for its supporting records starts from the date of such submission. 
I11(ii) T3If not submitted for negotiation.G1T1 If the proposal, plan, or other computation is not required to be submitted to the Federal Government (or to the grantee) for negotiation purposes, then the 3-year retention period for the proposal plan, or computation and its supporting records starts from end of the fiscal year (or other accounting period) covered by the proposal, plan, or other computation. 
I11(d) T3Substitution of microfilm.G1T1 Copies made by microfilming, photocopying, or similar methods may be substituted for the original records. 
I11(e) T3Access to records_G1T1(1) T3Records of grantees and subgrantees.G1T1 The awarding agency and the Comptroller General of ï¿½132ï¿½the United States, or any of their authorized representatives, shall have the right of access to any pertinent books, documents, papers, or other records of grantees and subgrantees which are pertinent to the grant, in order to make audits, examinations, excerpts, and transcripts. 
I11(2) T3Expiration of right of access.G1T1 The rights of access in this section must not be limited to the required retention period but shall last as long as the records are retained. 
I11(f) T3Restrictions on public access.G1T1 The Federal Freedom of Information Act (5 U.S.C. 552) does not apply to records Unless required by Federal, State, or local law, grantees and subgrantees are not required to permit public access to their records. 

I80ï¿½1A3016.43 
I89Enforcement. 
I11(a) T3Remedies for noncompliance.G1T1 If a grantee or subgrantee materially fails to comply with any term of an award, whether stated in a Federal statute or regulation, an assurance, in a State plan or application, a notice of award, or elsewhere, the awarding agency may take one or more of the following actions, as appropriate in the circumstances: 
I11(1) Temporarily withhold cash payments pending correction of the deficiency by the grantee or subgrantee or more severe enforcement action by the awarding agency, 
I11(2) Disallow (that is, deny both use of funds and matching credit for) all or part of the cost of the activity or action not in compliance, 
I11(3) Wholly or partly suspend or terminate the current award for the grantee's or subgrantee's program, 
I11(4) Withhold further awards for the program, or 
I11(5) Take other remedies that may be legally available. 
I11(b) T3Hearings, appeals.G1T1 In taking an enforcement action, the awarding agency will provide the grantee or subgrantee an opportunity for such hearing, appeal, or other administrative proceeding to which the grantee or subgrantee is entitled under any statute or regulation applicable to the action involved. 
I11(c) T3Effects of suspension and termination.G1T1 Costs of grantee or subgrantee resulting from obligations incurred by the grantee or subgrantee during a suspension or after termination of an award are not allowable unless the awarding agency expressly authorizes them in the notice of suspension or termination or subsequently. Other grantee or subgrantee costs during suspension or after termination which are necessary and not reasonably avoidable are allowable if: 
I11(1) The costs result from obligations which were properly incurred by the grantee or subgrantee before the effective date of suspension or termination, are not in anticipation of it, and, in the case of a termination, are noncancellable, and, 
I11(2) The costs would be allowable if the award were not suspended or expired normally at the end of the funding period in which the termination takes effect. 
I11(d) T3Relationship to Debarment and Suspension.G1T1 The enforcement remedies identified in this section, including suspension and termination, do not preclude grantee or subgrantee from being subject to ``Debarment and Suspension'' under E.O. 12549 (see ï¿½1A3016.35). 

I80ï¿½1A3016.44 
I89Termination for convenience. 
I11Except as provided in ï¿½1A3016.43 awards may be terminated in whole or in part only as follows: 
I11(a) By the awarding agency with the consent of the grantee or subgrantee in which case 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, or 
I11(b) By the grantee or subgrantee upon written notification to the awarding agency, setting forth the reasons for such termination, the effective date, and in the case of partial termination, the portion to be terminated. However, if, in the case of a partial termination, the awarding agency determines that the remaining portion of the award will not accomplish the purposes for which the award was made, the awarding agency may terminate the award in its entirety under either ï¿½1A3016.43 or paragraph (a) of this section. 

ï¿½133ï¿½I56Subpart D_After-the-Grant Requirements 

I80ï¿½1A3016.50 
I89Closeout. 
I11(a) T3General.G1T1 The Federal agency will close out the award when it determines that all applicable administrative actions and all required work of the grant has been completed. 
I11(b) T3Reports.G1T1 Within 90 days after the expiration or termination of the grant, the grantee must submit all financial, performance, and other reports required as a condition of the grant. Upon request by the grantee, Federal agencies may extend this timeframe. These may include but are not limited to: 
I11(1) Final performance or progress report. 
I11(2) Financial Status Report (SF 269) or Outlay Report and Request for Reimbursement for Construction Programs (SFï¿½09271) (as applicable.) 
I11(3) Final request for payment (SFï¿½09270) (if applicable). 
I11(4) Invention disclosure (if applicable). 
I11(5) Federally-owned property report:
Q02I10In accordance with ï¿½1A3016.32(f), a grantee must submit an inventory of all federally owned property (as distinct from property acquired with grant funds) for which it is accountable and request disposition instructions from the Federal agency of property no longer needed. 
I11(c) T3Cost adjustment.G1T1 The Federal agency will, within 90 days after receipt of reports in paragraph (b) of this section, make upward or downward adjustments to the allowable costs. 
I11(d) T3Cash adjustments.G1T1 (1) The Federal agency will make prompt payment to the grantee for allowable reimbursable costs. 
I11(2) The grantee must immediately refund to the Federal agency any balance of unobligated (unencumbered) cash advanced that is not authorized to be retained for use on other grants. 

I80ï¿½1A3016.51 
I89Later disallowances and adjustments. 
I11The closeout of a grant does not affect: 
I11(a) The Federal agency's right to disallow costs and recover funds on the basis of a later audit or other review; 
I11(b) The grantee's obligation to return any funds due as a result of later refunds, corrections, or other transactions; 
I11(c) Records retention as required in ï¿½1A3016.42;
I11(d) Property management requirements in ï¿½1A3016.31 and 3016.32; and
I11(e) Audit requirements in ï¿½1A3016.26.

I80ï¿½1A3016.52 
I89Collection of amounts due. 
I11(a) Any funds paid to a grantee in excess of the amount to which the grantee is finally determined to be entitled under the terms of the award constitute a debt to the Federal Government. If not paid within a reasonable period after demand, the Federal agency may reduce the debt by: 
I11(1) Making an adminstrative offset against other requests for reimbursements, 
I11(2) Withholding advance payments otherwise due to the grantee, or 
I11(3) Other action permitted by law. 
I11(b) Except where otherwise provided by statutes or regulations, the Federal agency will charge interest on an overdue debt in accordance with the Federal Claims Collection Standards (4 CFR Ch. II). The date from which interest is computed is not extended by litigation or the filing of any form of appeal. 
S8006I56Subpart E_Entitlement [Reserved] 
S8010
I95Pt. 3017
I52PART 3017_GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT) AND GOVERNMENTWIDE REQUIREMENTS FOR DRUGï¿½09FREE WORKPLACE (GRANTS)


I86Subpart A_General
S8006I18Sec.
S8010I263017.100Purpose.
I263017.105Definitions.
I263017.110Coverage.
I263017.115Policy.

I86Subpart B_Effect of Action
I263017.200Debarment or suspension.
I263017.205Ineligible persons.
I263017.210Voluntary exclusion.
I263017.215Exception provision.
I263017.220Continuation of covered transactions.
ï¿½134ï¿½I263017.225Failure to adhere to restrictions.

I86Subpart C_Debarment
I263017.300General.
I263017.305Causes for debarment.
I263017.310Procedures.
I263017.311Investigation and referral.
I263017.312Notice of proposed debarment.
I263017.313Opportunity to contest proposed debarment.
I263017.314Debarring official's decision.
I263017.315Settlement and voluntary exclusion.
I263017.320Period of debarment.
I263017.325Scope of debarment.

I86Subpart D_Suspension
I263017.400General.
I263017.405Causes for suspension.
I263017.410Procedures.
I263017.411Notice of suspension.
I263017.412Opportunity to contest suspension.
I263017.413Suspending official's decision.
I263017.415Period of suspension.
I263017.420Scope of suspension.

I86Subpart E_Responsibilities of GSA, Agency and Participants
I263017.500GSA responsibilities.
I263017.505USDA responsibilities.
I263017.510Participants' responsibilities.
I263017.515Appeal of debarment or suspension decisions.

I86Subpart F_Drug-Free Workplace Requirements (Grants) 
I263017.600Purpose. 
I263017.605Definitions. 
I263017.610Coverage. 
I263017.615Grounds for suspension of payments, suspension or termination of grants, or suspension or debarment. 
I263017.620Effect of violation. 
I263017.625Exception provision. 
I263017.630Certification requirements and procedures. 
I263017.635Reporting of and employee sanctions for convictions of criminal drug offenses. 
Q02I26T5T4Appendix A to PartG1T5 3017T4_Certification Regarding Debarment, Suspension, and Other Responsibility Matters_Primary Covered TransactionsG1T5
I26T5T4Appendix B to PartG1T5 3017T4_Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion_Lower Tier Covered TransactionsG1T5
I26T5T4Appendix C to PartG1T5 3017_T4Certification Regarding Drug-Free Workplace RequirementsG1T5 

Q04I21T5Authority:  T15 U.S.C. 301; 41 U.S.C. 701 T3et seq.G1T1; E.O. 12549, 51 FR 6370, 3 CFR, 1986 Comp., p. 189.
Q04I21T5Source:  T154 FR 4731, Jan. 30, 1989, unless otherwise noted.

Q04I21T5Cross Reference:  T1See also Office of Management and Budget notices published at 55 FR 21679, May 25, 1990, and 60 FR 33036, June 26, 1995.


I56Subpart A_General

I80ï¿½1A3017.100
I89Purpose.
I11(a) Executive Order (E.O.) 12549 provides that, to the extent permitted by law, Executive departments and agencies shall participate in a governmentwide system for nonprocurement debarment and suspension. A person who is debarred or suspended shall be excluded from Federal financial and nonfinancial assistance and benefits under Federal programs and activities. Debarment or suspension of a participant in a program by one agency shall have governmentwide effect. 
I11(b) These regulations implement section 3 of E.O. 12549 and the guidelines promulgated by the Office of Management and Budget under section 6 of the E.O. by:
I11(1) Prescribing the programs and activities that are covered by the governmentwide system; 
I11(2) Prescribing the governmentwide criteria and governmentwide minimum due process procedures that each agency shall use; 
I11(3) Providing for the listing of debarred and suspended participants, participants declared ineligible (see definition of ``ineligible'' in ï¿½1A3017.105), and participants who have voluntarily excluded themselves from participation in covered transactions; 
I11(4) Setting forth the consequences of a debarment, suspension, determination of ineligibility, or voluntary exclusion; and 
I11(5) Offering such other guidance as necessary for the effective implementation and administration of the governmentwide system. 
I11(c) These regulations also implement Executive Order 12689 (3 CFR, 1989 Comp., p. 235) and 31 U.S.C. 6101 note (Public Law 103ï¿½09355, sec. 2455, 108 Stat. 3327) by_
I11(1) Providing for the inclusion in the T3List of Parties Excluded from Federal Procurement and Nonprocurement ProgramsG1T1 all persons proposed for debarment, ï¿½135ï¿½debarred or suspended under the Federal Acquisition Regulation, 48 CFR Part 9, subpart 9.4; persons against which governmentwide exclusions have been entered under this part; and persons determined to be ineligible; and 
I11(2) Setting forth the consequences of a debarment, suspension, determination of ineligibility, or voluntary exclusion. 
I11(d) Although these regulations cover the listing of ineligible participants and the effect of such listing, they do not prescribe policies and procedures governing declarations of ineligibility.
Q04I20[60 FR 33040, 33043, June 26, 1995]



I80ï¿½1A3017.105
I89Definitions.

I11The following definitions apply to this part: 
I11T3Adequate evidence.G1T1 Information sufficient to support the reasonable belief that a particular act or omission has occurred.
I11T3Affiliate.G1T1 Persons are affiliates of each other if, directly or indirectly, either one controls or has the power to control the other, T3orG1T1, a third person controls or has the power to control both. Indicia of control include, but are not limited to: interlocking management or ownership, identity of interests among family members, shared facilities and equipment, common use of employees, or a business entity organized following the suspension or debarment of a person which has the same or similar management, ownership, or principal employees as the suspended, debarred, ineligible, or voluntarily excluded person. 
I11T3Agency.G1T1 Any executive department, military department or defense agency or other agency of the executive branch, excluding the independent regulatory agencies.
I11(1) A USDA agency, when used in the context of USDA internal procedures or requirements, is any organizational unit of the U.S. Department of Agriculture with authority delegated in 7 CFR part 2 to carry out primary covered transactions under USDA programs.
I11(2) [Reserved]
I11T3Appeals officer.G1T1 Any administrative law judge of the Office of Administrative Law Judges, Department of Agriculture.
I11T3Civil judgment.G1T1 The disposition of a civil action by any court of competent jurisdiction, whether entered by verdict, decision, settlement, stipulation, or otherwise creating a civil liability for the wrongful acts complained of; or a final determination of liability under the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801ï¿½0912). 
I11T3Conviction.G1T1 A judgment or conviction of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or a plea, including a plea of nolo contendere. 
I11T3Debarment.G1T1 An action taken by a debarring official in accordance with these regulations to exclude a person from participating in covered transactions. A person so excluded is ``debarred.'' 


I11T3Debarring official.G1T1 An official authorized to impose debarment. The debarring official is either: 

I11(1) The agency head, or 

I11(2) An official designated by the agency head. 

I11(i) In USDA, the authority to act as a debarring official is not delegated below the agency head, except that in the case of the Forest Service, the Chief may redelegate the authority to act as a debarring official to the Deputy Chief or an Associate Deputy Chief for the National Forest System.

I11(ii) [Reserved]

I11(3) In USDA, each Under Secretary, Assistant Secretary, or agency head who has been delegated authority in part 2 of this title to carry out a covered transaction is authorized to act as a debarring official in connection with such covered transaction.

I11T3Indictment.G1T1 Indictment for a criminal offense. An information or other filing by competent authority charging a criminal offense shall be given the same effect as an indictment. 
I11T3Ineligible.G1T1 Excluded from participation in Federal nonprocurement programs pursuant to a determination of ineligibility under statutory, executive order, or regulatory authority, other than Executive Order 12549 and its agency implementing regulations; for example, excluded pursuant to the Davis-Bacon Act and its implementing regulations, the equal employment opportunity acts and executive orders, or the environmental protection acts and ï¿½136ï¿½executive orders. A person is ineligible where the determination of ineligibility affects such person's eligibility to participate in more than one covered transaction. 
I11T3Legal proceedings.G1T1 Any criminal proceeding or any civil judicial proceeding to which the Federal Government or a State or local government or quasi-governmental authority is a party. The term includes appeals from such proceedings. 
I11T3List of Parties Excluded from Federal Procurement and Nonprocurement Programs.G1T1 A list compiled, maintained and distributed by the General Services Administration (GSA) containing the names and other information about persons who have been debarred, suspended, or voluntarily excluded under Executive Orders 12549 and 12689 and these regulations or 48 CFR part 9, subpart 9.4, persons who have been proposed for debarment under 48 CFR part 9, subpart 9.4, and those persons who have been determined to be ineligible. 
I11T3Notice.G1T1 A written communication served in person or sent by certified mail, return receipt requested, or its equivalent, to the last known address of a party, its identified counsel, its agent for service of process, or any partner, officer, director, owner, or joint venturer of the party. Notice, if undeliverable, shall be considered to have been received by the addressee five days after being properly sent to the last address known by the agency. 
I11T3Participant.G1T1 Any person who submits a proposal for, enters into, or reasonably may be expected to enter into a covered transaction. This term also includes any person who acts on behalf of or is authorized to commit a participant in a covered transaction as an agent or representative of another participant. 
I11T3Person.G1T1 Any individual, corporation, partnership, association, unit of government or legal entity, however organized, except: foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, and entities consisting wholly or partially of foreign governments or foreign governmental entities. 
I11T3Preponderance of the evidence.G1T1 Proof by information that, compared with that opposing it, leads to the conclusion that the fact at issue is more probably true than not. 
I11T3Principal.G1T1 Officer, director, owner, partner, key employee, or other person within a participant with primary management or supervisory responsibilities; or a person who has a critical influence on or substantive control over a covered transaction, whether or not employed by the participant. Persons who have a critical influence on or substantive control over a covered transaction are: 
I11(1) Principal investigators. 
I11(2) [Reserved]
I11T3Proposal.G1T1 A solicited or unsolicited bid, application, request, invitation to consider or similar communication by or on behalf of a person seeking to participate or to receive a benefit, directly or indirectly, in or under a covered transaction. 
I11T3Respondent.G1T1 A person against whom a debarment or suspension action has been initiated. 
I11T3State.G1T1 Any of the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency of a State, exclusive of institutions of higher education, hospitals, and units of local government. A State instrumentality will be considered part of the State government if it has a written determination from a State government that such State considers that instrumentality to be an agency of the State government. 

I11T3Suspending official.G1T1 An official authorized to impose suspension. The suspending official is either: 

I11(1) The agency head, or 

I11(2) An official designated by the agency head. 

I11(i) In USDA, the authority to act as a suspending official is not delegated below the agency head, except that in the case of the Forest Service, the Chief may redelegate the authority to act as a suspending official to the Deputy Chief or an Associate Deputy Chief for the National Forest System.

I11(ii) [Reserved]

I11(3) In USDA, each Under Secretary, Assistant Secretary, or agency head ï¿½137ï¿½who has been delegated authority in part 2 of this title to carry out a covered transaction is authorized to act as a suspending official in connection with such covered transaction.


I11T3Suspension.G1T1 An action taken by a suspending official in accordance with these regulations that immediately excludes a person from participating in covered transactions for a temporary period, pending completion of an investigation and such legal, debarment, or Program Fraud Civil Remedies Act proceedings as may ensue. A person so excluded is ``suspended.'' 
I11T3USDA.G1T1 U.S. Department of Agriculture.
I11T3Voluntary exclusion or voluntarily excluded.G1T1 A status of nonparticipation or limited participation in covered transactions assumed by a person pursuant to the terms of a settlement. 

Q04I20[54 FR 4731, Jan. 30, 1989, as amended at 60 FR 33040, 33043, June 26, 1995; 63 FR 27667, May 20, 1998]



I80ï¿½1A3017.110 
I89Coverage.
I11(a) These regulations apply to all persons who have participated, are currently participating or may reasonably be expected to participate in transactions under Federal nonprocurement programs. For purposes of these regulations such transactions will be referred to as ``covered transactions.'' 
I11(1) T3Covered transaction.G1T1 For purposes of these regulations, a covered transaction is a primary covered transaction or a lower tier covered transaction. Covered transactions at any tier need not involve the transfer of Federal funds. 
I11(i) T3Primary covered transaction.G1T1 Except as noted in paragraph (a)(2) of this section, a primary covered transaction is any nonprocurement transaction between an agency and a person, regardless of type, including: Grants, cooperative agreements, scholarships, fellowships, contracts of assistance, loans, loan guarantees, subsidies, insurance, payments for specified use, donation agreements and any other nonprocurement transactions between a Federal agency and a person. Primary covered transactions also include those transactions specially designated by the U.S. Department of Housing and Urban Development in such agency's regulations governing debarment and suspension. 
I11(ii) T3Lower tier covered transaction.G1T1 A lower tier covered transaction is: 
I11(A) Any transaction between a participant and a person other than a procurement contract for goods or services, regardless of type, under a primary covered transaction. 
I11(B) Any procurement contract for goods or services between a participant and a person, regardless of type, expected to equal or exceed the Federal procurement small purchase threshold fixed at 10 U.S.C. 2304(g) and 41 U.S.C. 253(g) (currently $25,000) under a primary covered transaction. 
I11(C) Any procurement contract for goods or services between a participant and a person under a covered transaction, regardless of amount, under which that person will have a critical influence on or substantive control over that covered transaction. Such persons are: 
I11(T31G1T1) Principal investigators. 
I11(T32G1T1) Providers of federally-required audit services. 
I11(2) T3Exceptions.G1T1 The following transactions are not covered: 
I11(i) Statutory entitlements or mandatory awards (but not subtier awards thereunder which are not themselves mandatory), including deposited funds insured by the Federal Government; 
I11(ii) Direct awards to foreign governments or public international organizations, or transactions with foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, entities consisting wholly or partially of foreign governments or foreign governmental entities; 
I11(iii) Benefits to an individual as a personal entitlement without regard to the individual's present responsibility (but benefits received in an individual's business capacity are not excepted); 
I11(iv) Federal employment; 
I11(v) Transactions pursuant to national or agency-recognized emergencies or disasters; 
I11(vi) Incidental benefits derived from ordinary governmental operations; and 
I11(vii) Other transactions where the application of these regulations would be prohibited by law. 
ï¿½138ï¿½I11(3) T3Department of Agriculture covered transactions.G1T1 (i) With respect to paragraph (a)(1) of this section, for USDA's export and foreign assistance programs, covered transactions will include only primary covered transactions. Any lower tier transactions with respect to UDSA's export and foreign assistance programs will not be considered lower tier covered transactions for the purposes of this part. The export or substitution of Federal timber governed by the Forest Resources Conservation and Shortage Relief Act of 1990, 16 U.S.C. 620 T3et seq.G1T1 (the ``Export Act''), is specifically excluded from the coverage of this rule. The Export Act provides separate statutory authority to debar persons engaged in both primary covered transactions and lower tier transactions.
I11(ii) With respect to paragraph (a)(1)(ii)(B) of this section, for USDA's domestic food assistance programs, only the initial such procurement contract and the first tier subcontract under that procurement contract shall be considered lower tier covered transactions.
I11(iii) With respect to paragraph (a)(2) of this section, the following USDA transactions also are not covered: transactions under programs which provide statutory entitlements and make available loans to individuals and entities in their capacity as producers of agricultural commodities; transactions under conservation programs; transactions under warehouse licensing programs; the receipt of licenses, permits, certificates, and indemnification under regulatory programs conducted in the interest of public health and safety and animal and plant health and safety; the receipt of official grading and inspection services, animal damage control services, public health and safety inspection services, and animal and plant health and safety inspection services; if the person is a State or local government, the provision of official grading and inspection services, animal damage control services, public health and safety inspection services, animal and plant health and safety inspection services; and permits, licenses, exchanges and other acquisitions of real property, rights of way, and easements under natural resource management programs.
I11(b) T3Relationship to other sections.G1T1 This section describes the types of transactions to which a debarment or suspension under the regulations will apply. Subpart B, ``Effect of Action,'' ï¿½1A3017.200, ``Debarment or suspension,'' sets forth the consequences of a debarment or suspension. Those consequences would obtain only with respect to participants and principals in the covered transactions and activities described in ï¿½1A3017.110(a). Sections 3017.325, ``Scope of debarment,'' and 3017.420, ``Scope of suspension,'' govern the extent to which a specific participant or organizational elements of a participant would be automatically included within a debarment or suspension action, and the conditions under which affiliates or persons associated with a participant may also be brought within the scope of the action. 
I11(c) T3Relationship to Federal procurement activities.G1T1 In accordance with E.O. 12689 and section 2455 of Public Law 103ï¿½09355, any debarment, suspension, proposed debarment or other governmentwide exclusion initiated under the Federal Acquisition Regulation (FAR) on or after August 25, 1995 shall be recognized by and effective for Executive Branch agencies and participants as an exclusion under this regulation. Similarly, any debarment, suspension or other governmentwide exclusion initiated under this regulation on or after August 25, 1995 shall be recognized by and effective for those agencies as a debarment or suspension under the FAR.
Q04I20[54 FR 4731, Jan. 30, 1989, as amended at 60 FR 33041, 33043, June 26, 1995; 61 FR 250, Jan. 4, 1996]

I80ï¿½1A3017.115 
I89Policy. 
I11(a) In order to protect the public interest, it is the policy of the Federal Government to conduct business only with responsible persons. Debarment and suspension are discretionary actions that, taken in accordance with Executive Order 12549 and these regulations, are appropriate means to implement this policy. 
I11(b) Debarment and suspension are serious actions which shall be used only in the public interest and for the Federal Government's protection and not ï¿½139ï¿½for purposes of punishment. Agencies may impose debarment or suspension for the causes and in accordance with the procedures set forth in these regulations. 
I11(c) When more than one agency has an interest in the proposed debarment or suspension of a person, consideration shall be given to designating one agency as the lead agency for making the decision. Agencies are encouraged to establish methods and procedures for coordinating their debarment or suspension actions. 
I11(d) In any case in which an administrative exclusion is considered under an authority other than this part, USDA will initiate, where appropriate, a debarment or suspension action under this part for the protection of the entire Federal Government.
Q04I20[54 FR 4731, Jan. 30, 1989, as amended at 61 FR 251, Jan. 4, 1996]

I56Subpart B_Effect of Action

I80ï¿½1A3017.200
I89Debarment or suspension.
I11(a) T3Primary covered transactions.G1T1 Except to the extent prohibited by law, persons who are debarred or suspended shall be excluded from primary covered transactions as either participants or principals throughout the Executive Branch of the Federal Government for the period of their debarment, suspension, or the period they are proposed for debarment under 48 CFR part 9, subpart 9.4. Accordingly, no agency shall enter into primary covered transactions with such excluded persons during such period, except as permitted pursuant to ï¿½1A3017.215. 
I11(b) T3Lower tier covered transactions.G1T1 Except to the extent prohibited by law, persons who have been proposed for debarment under 48 CFR part 9, subpart 9.4, debarred or suspended shall be excluded from participating as either participants or principals in all lower tier covered transactions (see ï¿½1A3017.110(a)(1)(ii)) for the period of their exclusion. 
I11(c) T3Exceptions.G1T1 Debarment or suspension does not affect a person's eligibility for_
I11(1) Statutory entitlements or mandatory awards (but not subtier awards thereunder which are not themselves mandatory), including deposited funds insured by the Federal Government; 
I11(2) Direct awards to foreign governments or public international organizations, or transactions with foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, and entities consisting wholly or partially of foreign governments or foreign governmental entities; 
I11(3) Benefits to an individual as a personal entitlement without regard to the individual's present responsibility (but benefits received in an individual's business capacity are not excepted); 
I11(4) Federal employment; 
I11(5) Transactions pursuant to national or agency-recognized emergencies or disasters; 
I11(6) Incidental benefits derived from ordinary governmental operations; and 
I11(7) Other transactions where the application of these regulations would be prohibited by law. 
I11(d) T3Department of Agriculture excepted transactions.G1T1 With respect to paragraph (c) of this section, the following USDA transactions also are excepted: transactions under programs which provide statutory entitlements and make available loans to individuals and entities in their capacity as producers of agricultural commodities; transations under conservation programs; transactions under warehouse licensing programs; the receipt of licenses, permits, certificates, and indemnification under regulatory programs conducted in the interest of public health and safety and animal and plant health and safety; the receipt of official grading and inspection services, animal damage control services, public health and safety inspection services, and animal and plant health and safety inspection services; if the person is a State or local government, the provision of official grading and inspection services, animal damage control services, public health and safety inspection services, and animal and plant health and safety inspection services; and permits, licenses, exchanges, and other acquisitions of real property, rights of way, and easements ï¿½140ï¿½under natural resource management programs.
Q04I20[60 FR 33041, 33043, June 26, 1995, as amended at 61 FR 251, Jan. 4, 1996]

I80ï¿½1A3017.205
I89Ineligible persons.
I11Persons who are ineligible, as defined in ï¿½1A3017.105(i), are excluded in accordance with the applicable statutory, executive order, or regulatory authority.

I80ï¿½1A3017.210
I89Voluntary exclusion.
I11Persons who accept voluntary exclusions under ï¿½1A3017.315 are excluded in accordance with the terms of their settlements. USDA shall, and participants may, contact the original action agency to ascertain the extent of the exclusion.

I80ï¿½1A3017.215
I89Exception provision.
I11USDA may grant an exception permitting a debarred, suspended, or voluntarily excluded person, or a person proposed for debarment under 48 CFR part 9, subpart 9.4, to participate in a particular covered transaction upon a written determination by the agency head or an authorized designee stating the reason(s) for deviating from the Presidential policy established by Executive Order 12549 and ï¿½1A3017.200. However, in accordance with the President's stated intention in the Executive Order, exceptions shall be granted only infrequently. Exceptions shall be reported in accordance with ï¿½1A3017.505(a). 
Q04I20[60 FR 33041, 33043, June 26, 1995]

I80ï¿½1A3017.220
I89Continuation of covered transactions.
I11(a) Notwithstanding the debarment, suspension, proposed debarment under 48 CFR part 9, subpart 9.4, determination of ineligibility, or voluntary exclusion of any person by an agency, agencies and participants may continue covered transactions in existence at the time the person was debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, declared ineligible, or voluntarily excluded. A decision as to the type of termination action, if any, to be taken should be made only after thorough review to ensure the propriety of the proposed action. 
I11(b) Agencies and participants shall not renew or extend covered transactions (other than no-cost time extensions) with any person who is debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, ineligible or voluntary excluded, except as provided in ï¿½1A3017.215. 
Q04I20[60 FR 33041, 33043, June 26, 1995]

I80ï¿½1A3017.225
I89Failure to adhere to restrictions.
I11(a) Except as permitted under ï¿½1A3017.215 or ï¿½1A3017.220, a participant shall not knowingly do business under a covered transaction with a person who is_
I11(1) Debarred or suspended; 
I11(2) Proposed for debarment under 48 CFR part 9, subpart 9.4; or 
I11(3) Ineligible for or voluntarily excluded from the covered transaction. 
I11(b) Violation of the restriction under paragraph (a) of this section may result in disallowance of costs, annulment or termination of award, issuance of a stop work order, debarment or suspension, or other remedies as appropriate. 
I11(c) A participant may rely upon the certification of a prospective participant in a lower tier covered transaction that it and its principals are not debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, ineligible, or voluntarily excluded from the covered transaction (See appendix B of these regulations), unless it knows that the certification is erroneous. An agency has the burden of proof that a participant did knowingly do business with a person that filed an erroneous certification. 
Q04I20[60 FR 33041, 33043, June 26, 1995]

I56Subpart C_Debarment

I80ï¿½1A3017.300
I89General.
I11The debarring official may debar a person for any of the causes in ï¿½1A3017.305, using procedures established in ï¿½1A3017.310 through ï¿½1A3017.314. The existence of a cause for debarment, however, does not necessarily require that the person be debarred; the seriousness of the person's acts or omissions and ï¿½141ï¿½any mitigating factors shall be considered in making any debarment decision.

I80ï¿½1A3017.305
I89Causes for debarment.
I11Debarment may be imposed in accordance with the provisions of ï¿½1A3017.300 through ï¿½1A3017.314 for:
I11(a) Conviction of or civil judgment for:
I11(1) Commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public or private agreement or transaction;
I11(2) Violation of Federal or State antitrust statutes, including those proscribing price fixing between competitors, allocation of customers between competitors, and bid rigging;
I11(3) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, making false claims, or obstruction of justice; or
I11(4) Commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects the present responsibility of a person.
I11(b) Violation of the terms of a public agreement or transaction so serious as to affect the integrity of an agency program, such as:
I11(1) A willful failure to perform in accordance with the terms of one or more public agreements or transactions;
I11(2) A history of failure to perform or of unsatisfactory performance of one or more public agreements or transactions; or
I11(3) A willful violation of a statutory or regulatory provision or requirement applicable to a public agreement or transaction.
I11(c) Any of the following causes: 
I11(1) A nonprocurement debarment by any Federal agency taken before March 1, 1989, the effective date of these regulations or a procurement debarment by any Federal agency taken pursuant to 48 CFR Subpart 9.4; 
I11(2) Knowingly doing business with a debarred, suspended, ineligible, or voluntarily excluded person, in connection with a covered transaction, except as permitted in ï¿½1A3017.215 or ï¿½1A3017.220;
I11(3) Failure to pay a single substantial debt, or a number of outstanding debts (including disallowed costs and overpayments, but not including sums owed the Federal Government under the Internal Revenue Code) owed to any Federal agency or instrumentality, provided the debt is uncontested by the debtor or, if contested, provided that the debtor's legal and administrative remedies have been exhausted; 
I11(4) Violation of a material provision of a voluntary exclusion agreement entered into under ï¿½1A3017.315 or of any settlement of a debarment or suspension action; or 
I11(5) Violation of any requirement of Subpart F of this part, relating to providing a drug-free workplace, as set forth in ï¿½1A3017.615 of this part.
I11(d) Any other cause of so serious or compelling a nature that it affects the present responsibility of a person.
Q04I20[54 FR 4731, Jan. 30, 1989, as amended at 54 FR 4952, Jan. 31, 1989]

I80ï¿½1A3017.310
I89Procedures. 
I11USDA shall process debarment actions as informally as practicable, consistent with the principles of fundamental fairness, using the procedures in ï¿½1A3017.311 through 3017.314. 

I80ï¿½1A3017.311
I89Investigation and referral.
I11Information concerning the existence of a cause for debarment from any source shall be promptly reported, investigated, and referred, when appropriate, to the debarring official for consideration. After consideration, the debarring official may issue a notice of proposed debarment.
I11(a) The decision to utilize agency personnel, the Office of Inspector General (OIG), or other appropriate resources to conduct the investigation and develop the documentation required by paragraph (b) of this section is the responsibility of the agency possessing the information.
I11(b) Basic documentation shall be developed that includes but is not limited to:
I11(1) The name of the specific respondent(s) against whom the action is being proposed or taken;
I11(2) The reason(s) for proposing the debarment;
ï¿½142ï¿½I11(3) The specific cause(s) for debarment from ï¿½1A3017.305;
I11(4) A short narrative stating the facts and/or describing other evidence supporting the reason(s) for the need to debar;
I11(5) The recommended time period for the debarment;
I11(6) The potential effect and/or consequences that the debarment will have on the respondent(s);
I11(7) Copies of any relevant support documentation identified under this section.
I11(c) The debarring official shall be responsible for deciding whether or not to proceed with the action.
I11(d) The Office of the General Counsel (OGC) is responsible for:
I11(1) Reviewing the documentation and notices for legal sufficiency, and
I11(2) Providing any necessary coordination with the Department of Justice (DOJ).
Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4732, Jan. 30, 1989]

I80ï¿½1A3017.312
I89Notice of proposed debarment.
I11A debarment proceeding shall be initiated by notice to the respondent advising:
I11(a) That debarment is being considered; 
I11(1) Information on the specific debarment action proposed must be given.
I11(b) Of the reasons for the proposed debarment in terms sufficient to put the respondent on notice of the conduct or transaction(s) upon which it is based; 
I11(c) Of the cause(s) relied upon under ï¿½1A3017.305 for proposing debarment; 
I11(d) Of the provisions of ï¿½1A3017.311 through 3017.314, and any other USDA procedures, if applicable, governing debarment decisionmaking; and 
I11(e) Of the potential effect of a debarment.
Q02I10In USDA, the notice to the respondent shall be signed by the debarring official and transmitted by certified mail, return receipt requested. OGC will be consulted on all proposed debarment actions prior to the notice being sent to the respondent.
Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4732, Jan. 30, 1989]

I80ï¿½1A3017.313
I89Opportunity to contest proposed debarment.
I11(a) T3Submission in opposition.G1T1 Within 30 days after receipt of the notice of proposed debarment, the respondent may submit, in person, in writing, or through a representative, information and argument in opposition to the proposed debarment. 
I11(b) T3Additional proceedings as to disputed material facts.G1T1 (1) In actions not based upon a conviction or civil judgment, if the debarring official finds that the respondent's submission in opposition raises a genuine dispute over facts material to the proposed debarment, respondent(s) shall be afforded an opportunity to appear with a representative, submit documentary evidence, present witnesses, and confront any witness the agency presents. 
I11(2) A transcribed record of any additional proceedings shall be made available at cost to the respondent, upon request, unless the respondent and the agency, by mutual agreement, waive the requirement for a transcript.

I80ï¿½1A3017.314
I89Debarring official's decision.
I11(a) T3No additional proceedings necessary.G1T1 In actions based upon a conviction or civil judgment, or in which there is no genuine dispute over material facts, the debarring official shall make a decision on the basis of all the information in the administrative record, including any submission made by the respondent. The decision shall be made within 45 days after receipt of any information and argument submitted by the respondent, unless the debarring official extends this period for good cause.
I11(1) In USDA debarment actions where respondent(s) fail(s) to timely provide any submission in opposition, the action will be considered decided.
I11(b) T3Additional proceedings necessary.G1T1 (1) In actions in which additional proceedings are necessary to determine disputed material facts, written findings of fact shall be prepared. The debarring official shall base the decision on the facts as found, together with any information and argument submitted by the respondent and any other information in the administrative record. 
ï¿½143ï¿½I11(2) The debarring official may refer disputed material facts to another official for findings of fact. The debarring official may reject any such findings, in whole or in part, only after specifically determining them to be arbitrary and capricious or clearly erroneous. 
I11(3) The debarring official's decision shall be made after the conclusion of the proceedings with respect to disputed facts. 
I11(c)(1) T3Standard of proof.G1T1 In any debarment action, the cause for debarment must be established by a preponderance of the evidence. Where the proposed debarment is based upon a conviction or civil judgment, the standard shall be deemed to have been met. 
I11(2) T3Burden of proof.G1T1 The burden of proof is on the agency proposing debarment. 
I11(d) T3Notice of debarring official's decision.G1T1 (1) If the debarring official decides to impose debarment, the respondent shall be given prompt notice: 
I11(i) Referring to the notice of proposed debarment; 
I11(ii) Specifying the reasons for debarment; 
I11(iii) Stating the period of debarment, including effective dates; and 
I11(iv) Advising that the debarment is effective for covered transactions throughout the executive branch of the Federal Government unless an agency head or an authorized designee makes the determination referred to in ï¿½1A3017.215. 
I11(2) If the debarring official decides not to impose debarment, the respondent shall be given prompt notice of that decision. A decision not to impose debarment shall be without prejudice to a subsequent imposition of debarment by any other agency.
I11(3) In USDA, the notice to the respondent shall be in writing, signed by the debarring official, and transmitted by certified mail, return receipt requested. The OGC will be consulted on all debarment actions prior to the notice being sent to the respondent.
Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4732, Jan. 30, 1989]

I80ï¿½1A3017.315
I89Settlement and voluntary exclusion. 
I11(a) When in the best interest of the Government, USDA may, at any time, settle a debarment or suspension action. 
I11(b) If a participant and the agency agree to a voluntary exclusion of the participant, such voluntary exclusion shall be entered on the Nonprocurement List (see Subpart E).

I80ï¿½1A3017.320 
I89Period of debarment. 
I11(a) Debarment shall be for a period commensurate with the seriousness of the cause(s). If a suspension precedes a debarment, the suspension period shall be considered in determining the debarment period. 
I11(1) Debarment for causes other than those related to a violation of the requirements of Subpart F of this part generally should not exceed three years. Where circumstances warrant, a longer period of debarment may be imposed. 
I11(2) In the case of a debarment for a violation of the requirements of Subpart F of this part (T3seeG1T1 3017.305(c)(5)), the period of debarment shall not exceed five years.
I11(b) The debarring official may extend an existing debarment for an additional period, if that official determines that an extension is necessary to protect the public interest. 
Q02I10However, a debarment may not be extended solely on the basis of the facts and circumstances upon which the initial debarment action was based. If debarment for an additional period is determined to be necessary, the procedures of ï¿½1A3017.311 through 3017.314 shall be followed to extend the debarment.
I11(c) The respondent may request the debarring official to reverse the debarment decision or to reduce the period or scope of debarment. Such a request shall be in writing and supported by documentation. The debarring official may grant such a request for reasons including, but not limited to: 
I11(1) Newly discovered material evidence; 
I11(2) Reversal of the conviction or civil judgment upon which the debarment was based; 
I11(3) Bona fide change in ownership or management; 
I11(4) Elimination or other causes for which the debarment was imposed; or 
ï¿½144ï¿½I11(5) Other reasons the debarring official deems appropriate.
Q04I20[54 FR 4731, Jan. 30, 1989, as amended at 54 FR 4952, Jan. 31, 1989]

I80ï¿½1A3017.325
I89Scope of debarment. 
I11(a) T3Scope in general.G1T1 (1) Debarment of a person under these regulations constitutes debarment of all its divisions and other organizational elements from all covered transactions, unless the debarment decision is limited by its terms to one or more specifically identified individuals, divisions or other organizational elements or to specific types of transactions. 
I11(2) The debarment action may include any affiliate of the participant that is specifically named and given notice of the proposed debarment and an opportunity to respond (see ï¿½1A3017.311 through 3017.314). 
I11(b) T3Imputing conduct.G1T1 For purposes of determining the scope of debarment, conduct may be imputed as follows: 
I11(1) T3Conduct imputed to participant.G1T1 The fraudulent, criminal or other seriously improper conduct of any officer, director, shareholder, partner, employee, or other individual associated with a participant may be imputed to the participant when the conduct occurred in connection with the individual's performance of duties for or on behalf of the participant, or with the participant's knowledge, approval, or acquiescence. The participant's acceptance of the benefits derived from the conduct shall be evidence of such knowledge, approval, or acquiescence.
I11(2) T3Conduct imputed to individuals associated with participant.G1T1 The fraudulent, criminal, or other seriously improper conduct of a participant may be imputed to any officer, director, shareholder, partner, employee, or other individual associated with the participant who participated in, knew of, or had reason to know of the participant's conduct. 
I11(3) T3Conduct of one participant imputed to other participants in a joint venture.G1T1 The fraudulent, criminal, or other seriously improper conduct of one participant in a joint venture, grant pursuant to a joint application, or similar arrangement or with the knowledge, approval, or acquiescence of these participants. Acceptance of the benefits derived from the conduct shall be evidence of such knowledge, approval, or acquiescence.

I56Subpart D_Suspension

I80ï¿½1A3017.400
I89General.
I11(a) The suspending official may suspend a person from any of the causes in ï¿½1A3017.405 using procedures established in ï¿½1A3017.410 through 3017.413. 
I11(b) Suspension is a serious action to be imposed only when:
I11(1) There exists adequate evidence of one or more of the causes set out in ï¿½1A3017.405, and 
I11(2) Immediate action is necessary to protect the public interest. 
I11(c) In assessing the adequacy of the evidence, the agency should consider how much information is available, how credible it is given the circumstances, whether or not important allegations are corroborated, and what inferences can reasonably be drawn as a result. This assessment should include an examination of basic documents such as grants, cooperative agreements, loan authorizations, and contracts. 

I80ï¿½1A3017.405
I89Causes for suspension.
I11(a) Suspension may be imposed in accordanceï¿½1Awith the provisions of ï¿½1A3017.400 through 3017.413 upon adequate evidence: 
I11(1) To suspect the commission of an offense listed in ï¿½1A3017.305(a); or 
I11(2) That a cause for debarment under ï¿½1A3017.305 may exist. 
I11(b) Indictment shall constitute adequate evidence for purposes of suspension actions. 

I80ï¿½1A3017.410
I89Procedures.
I11(a) T3Investigation and referral.G1T1 Information concerning the existence of a cause for suspension from any source shall be promptly reported, investigated, and referred, when appropriate, to the suspending official for consideration. After consideration, the suspending official may issue a notice of suspension. 
I11(1) The decision to utilize agency personnel, OIG or other appropriate resources to conduct the investigation ï¿½145ï¿½and develop the documentation required by paragraph (a)(2) of this section is the responsibility of the agency possessing the information. 
I11(2) Basic documentation shall be developed that includes but is not limited to: 
I11(i) The name of the specific respondent(s) against whom the suspension is to be taken; 
I11(ii) The reason(s) for proposing the suspension;
I11(iii) The specific cause(s) for suspension from ï¿½1A3017.405; 
I11(iv) A short narrative stating the facts and/or describing other evidence supporting the reason(s) for the suspension; 
I11(v) The recommended time period for the suspension; 
I11(vi) The potential effect and/or consequences that the suspension will have on the respondent(s); 
I11(vii) Copies of any relevant support documentation identified under this section.
I11(3) The suspending official shall be responsible for deciding whether or not to proceed with the suspension.
I11(4) OGC is responsible for:
I11(i) Reviewing the documentation and notice for legal sufficiency, and 
I11(ii) Providing any necessary coordination with DOJ.
I11(b) T3Decisionmaking process.G1T1 USDA shall process suspension actions as informally as practicable, consistent with principles of fundamental fairness, using the procedures in ï¿½1A3017.411 through ï¿½1A3017.413.
Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4732, Jan. 30, 1989]

I80ï¿½1A3017.411
I89Notice of suspension. 
I11When a respondent is suspended, notice shall immediately be given:
I11(a) That suspension has been imposed; 
I11(b) That the suspension is based on an indictment, conviction, or other adequate evidence that the respondent has committed irregularities seriously reflecting on the propriety of further Federal Government dealings with the respondent;
I11(c) Describing any such irregularities in terms sufficient to put the respondent on notice without disclosing the Federal Government's evidence; 
I11(d) Of the cause(s) relied upon under ï¿½1A3017.405 for imposing suspension;
I11(e) That the suspension is for a temporary period pending the completion of an investigation or ensuing legal, debarment, or Program Fraud Civil Remedies Act proceedings; 
I11(f) Of the provisions of ï¿½1A3017.411 through ï¿½1A3017.413 and any other USDA procedures, if applicable, governing suspension decisionmaking; and 
I11(g) Of the effect of the suspension.
Q02I10In USDA, the notice to the respondent shall be signed by the suspending official and transmitted by certified mail, return receipt requested. OGC will be consulted on all proposed suspension actions prior to the notice being sent to the respondent.
Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4732, Jan. 30, 1989]

I80ï¿½1A3017.412
I89Opportunity to contest suspension. 
I11(a) T3Submission in opposition.G1T1 Within 30 days after receipt of the notice of suspension, the respondent may submit, in person, in writing, or through a representative, information and argument in opposition to the suspension. 
I11(b) T3Additional proceedings as to disputed material facts.G1T1 (1) If the suspending official finds that the respondent's submission in opposition raises a genuine dispute over facts material to the suspension, respondent(s) shall be afforded an opportunity to appear with a representative, submit documentary evidence, present witnesses, and confront any witness the agency presents, unless: 
I11(i) The action is based on an indictment, conviction or civil judgment, or 
I11(ii) A determination is made, on the basis of Department of Justice advice, that the substantial interests of the Federal Government in pending or contemplated legal proceedings based on the same facts as the suspension would be prejudiced. 
I11(A) In USDA, such determination shall be made by the suspending official, after coordination with OGC.
I11(B) In USDA, the suspending official shall continue the suspension only if he/she determines, after consultation with OGC, that there is enough evidence to proceed without using the ï¿½146ï¿½facts that DOJ has advised would prejudice the contemplated legal proceedings. If there is not such evidence, the suspension shall be terminated immediately without prejudice.
I11(2) A transcribed record of any additional proceedings shall be prepared and made available at cost to the respondent, upon request, unless the respondent and the agency, by mutual agreement, waive the requirement for a transcript.
Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4732, Jan. 30, 1989]

I80ï¿½1A3017.413
I89Suspending official's decision.
I11The suspending official may modify or terminate the suspension (for example, see ï¿½1A3017.320(c) for reasons for reducing the period or scope of debarment) or may leave it in force. However, a decision to modify or terminate the suspension shall be without prejudice to the subsequent imposition of suspension by any other agency or debarment by any agency. The decision shall be rendered in accordance with the following provisions:
I11(a) T3No additional proceedings necessary.G1T1 In actions: based on an indictment, conviction, or civil judgment; in which there is no genuine dispute over material facts; or in which additional proceedings to determine disputed material facts have been denied on the basis of Department of Justice advice, the suspending official shall make a decision on the basis of all the information in the administrative record, including any submission made by the respondent. The decision shall be made within 45 days after receipt of any information and argument submitted by the respondent, unless the suspending official extends this period for good cause.
I11(1) In USDA, the suspending official shall terminate the suspension immediately when additional proceedings to determine disputed facts have been denied on the basis of DOJ advice. The agency, however, reserves the right to proceed with the suspension when DOJ completes its legal proceedings or is satisfied that the suspension no longer will prejudice DOJ's proceedings.
I11(2) In USDA suspension actions, where the respondent(s) fail(s) to timely provide any submission in opposition, the action will be considered decided.
I11(b) T3Additional proceedings necessary.G1T1 (1) In actions in which additional proceedings are necessary to determine disputed material facts, written findings of fact shall be prepared. The suspending official shall base the decision on the facts as found, together with any information and argument submitted by the respondent and any other information in the administrative record. 
I11(2) The suspending official may refer matters involving disputed material facts to another official for findings of fact. The suspending official may reject any such findings, in whole or in part, only after specificially determining them to be arbitrary or capricious or clearly erroneous. 
I11(c) T3Notice of suspending official's decision.G1T1 Prompt written notice of the suspending official's decision shall be sent to the respondent.
I11(1) In USDA, the notice to the respondent shall be signed by the suspending official and transmitted by certified mail, return receipt requested. OGC will be consulted on all proposed suspension actions prior to the notice being sent to the respondent. The notice shall include the following:
I11(i) Reference to the previously issued notice of suspension;
I11(ii) The reason(s) for the action taken in this notice. 
I11(iii) The effective date(s) of the suspension taken in this notice and, where appropriate, the period of the suspension; 
I11(iv) Advice that the suspension is effective for covered transactions throughout the executive branch of the Federal Government unless an agency head or a designee authorized by an agency head makes a determination referred to in ï¿½1A3017.215.

I11(b) [Reserved]


Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4732, Jan. 30, 1989]

I80ï¿½1A3017.415
I89Period of suspension. 
I11(a) Suspension shall be for a temporary period pending the completion of an investigation or ensuring legal, debarment, or Program Fraud Civil ï¿½147ï¿½Remedies Act proceedings, unless terminated sooner by the suspending official or as provided in paragraph (b) of this section. 
I11(b) If legal or administrative proceedings are not initiated within 12 months after the date of the suspension notice, the suspension shall be terminated unless an Assistant Attorney General or United States Attorney requests its extension in writing, in which case it may be extended for an additional six months. In no event may a suspension extend beyond 18 months, unless such proceedings have been initiated within that period.
I11(c) The suspending official shall notify the Department of Justice of an impending termination of a suspension, at least 30 days before the 12-month period expires, to give that Department an opportunity to request an extension.
I11(1) The suspending official shall notify OGC which will notify DOJ of the impending termination of a suspension.

I11(2) [Reserved]

Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4733, Jan. 30, 1989]

I80ï¿½1A3017.420
I89Scope of suspension.
I11The scope of a suspension is the same as the scope of a debarment (see ï¿½1A3017.325), except that the procedures of ï¿½1A3017.410 through 3017.413 shall be used in imposing a suspension. 

I56Subpart E_Responsibilities of GSA, Agency and Participants

I80ï¿½1A3017.500
I89GSA responsibilities.
I11(a) In accordance with the OMB guidelines, GSA shall compile, maintain, and distribute a list of all persons who have been debarred, suspended, or voluntarily excluded by agencies under Executive Order 12549 and these regulations, and those who have been determined to be ineligible.
I11(b) At a minimum, this list shall indicate:
I11(1) The names and addresses of all debarred, suspended, ineligible, and voluntarily excluded persons, in alphabetical order, with cross-references when more than one name is involved in a single action;
I11(2) The type of action;
I11(3) The cause for the action;
I11(4) The scope of the action;
I11(5) Any termination date for each listing; and 
I11(6) The agency and name and telephone number of the agency point of contact for the action.

I80ï¿½1A3017.505
I89USDA responsibilities.
I11(a) The agency shall provide GSA with current information concerning debarments, suspensions, determinations of ineligibility, and voluntary exclusions it has taken. Until February 18, 1989, the agency shall also provide GSA and OMB with information concerning all transactions in which USDA has granted exceptions under ï¿½1A3017.215 permitting participation by debarred, suspended, or voluntarily excluded persons.
I11(b) Unless an alternative schedule is agreed to by GSA, the agency shall advise GSA of the information set forth in ï¿½1A3017.500(b) and of the exceptions granted under ï¿½1A3017.215 within five working days after taking such actions.
I11(1) Each communication with GSA regarding additions, deletions, or changes to the Nonprocurement List shall be in writing.

I11(2) [Reserved]

I11(c) The agency shall direct inquiries concerning listed persons to the agency that took the action.
I11(d) Agency officials shall check the Nonprocurement List before entering covered transactions to determine whether a participant in a primary transaction is debarred, suspended, ineligible, or voluntarily excluded (Tel. ï¿½1B).
I11(e) Agency officials shall check the Nonprocurement List before approving principals or lower tier participants where agency approval of the principal or lower tier participant is required under the terms of the transaction, to determine whether such principals or participants are debarred, suspended, ineligible, or voluntarily excluded.
I11(f) USDA agencies shall provide the Office of Finance and Management (OFM) with a copy of any information provided to GSA pursuant to this section. 
I11(g) USDA agencies shall notify GSA and OFM, in writing, of debarment or ï¿½148ï¿½suspension decisions overturned on appeal under ï¿½1A3017.515.
Q04I20[54 FR 4722 and 4731, Jan. 30, 1989, as amended at 54 FR 4733, Jan. 30, 1989]

I80ï¿½1A3017.510
I89Participants' responsibilities.
I11(a) T3Certification by participants in primary covered transactions.G1T1 Each participant shall submit the certification in Appendix A to this Part for it and its principals at the time the participant submits its proposal in connection with a primary covered transaction, except that States need only complete such certification as to their principals. Participants may decide the method and frequency by which they determine the eligibility of their principals. In addition, each participant may, but is not required to, check the Nonprocurement List for its principals (Tel. ï¿½1B). Adverse information on the certification will not necessarily result in denial of participation. However, the certification, and any additional information pertaining to the certification submitted by the participant, shall be considered in the administration of covered transactions.
I11(b) T3Certification by participants in lower tier covered transactions.G1T1 (1) Each participant shall require participants in lower tier covered transactions to include the certification in Appendix B to this part for it and its principals in any proposal submitted in connection with such lower tier covered transactions.
I11(2) A participant may rely upon the certification of a prospective participant in a lower tier covered transaction that it and its principals are not debarred, suspended, ineligible, or voluntarily excluded from the covered transaction by any Federal agency, unless it knows that the certification is erroneous. Participants may decide the method and frequency by which they determine the eligibility of their principals. In addition, a participant may, but is not required to, check the Nonprocurement List for its principals and for participants (Tel. ï¿½1B).
I11(c) T3Changed circumstances regarding certification.G1T1 A participant shall provide immediate written notice to USDA if at any time the participant learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances. Participants in lower tier covered transactions shall provide the same updated notice to the participant to which it submitted its proposal.

I80ï¿½1A3017.515
I89Appeal of debarment or suspension decisions.
I11(a) If a decision to debar or suspend is made by a debarring or suspending official under ï¿½1A3017.314 or ï¿½1A3017.413, the respondent may appeal the decision to the Office of Administrative Law Judges (OALJ) by filing the appeal, in writing, to the Hearing Clerk, OALJ, United States Department of Agriculture, Washington, DC 20250. The appeal must be filed within 30 days of receiving the decision and it must specify the basis of the appeal. The decision of a debarring or suspending official under ï¿½1A3017.314 or ï¿½1A3017.413 may be vacated by the assigned appeals officer if the officer determines that the decision is: 
I11(1) Not in accordance with law; 
I11(2) Not based on the applicable standard of evidence; or 
I11(3) Arbitrary and capricious and an abuse of discretion. 
I11(b) The appeals officer will base his/her decision solely upon the administrative record. 
I11(c) Within 90 days of the date the appeal is filed with USDA's OALJ Hearing Clerk, the appeals officer will notify, in writing, the respondent(s) and the debarring or suspending official, who took the action being appealed, of his/her decision in the appeal. The notice must specify the reason(s) for the decision made by the appeals officer.
I11(d) The appeals officer's decision is final and is not appealable within USDA.
Q04I20[54 FR 4733, Jan. 30, 1989]

I56Subpart F_Drug-Free Workplace Requirements (Grants)
Q04I21T5Source:  T155 FR 21688, 21691, May 25, 1990, unless otherwise noted.

I80ï¿½1A3017.600
I89Purpose. 
I11(a) The purpose of this subpart is to carry out the Drug-Free Workplace Act of 1988 by requiring that_
ï¿½149ï¿½I11(1) A grantee, other than an individual, shall certify to the agency that it will provide a drug-free workplace; 
I11(2) A grantee who is an individual shall certify to the agency that, as a condition of the grant, he or she will not engage in the unlawful manufacture, distribution, dispensing, possession or use of a controlled substance in conducting any activity with the grant. 
I11(b) Requirements implementing the Drug-Free Workplace Act of 1988 for contractors with the agency are found at 48 CFR subparts 9.4, 23.5, and 52.2. 

I80ï¿½1A3017.605 
I89Definitions. 
I11(a) Except as amended in this section, the definitions of ï¿½1A3017.105 apply to this subpart.
I11(b) For purposes of this subpart_
I11(1) T3Controlled substanceG1T1 means a controlled substance in schedules I through V of the Controlled Substances Act (21 U.S.C. 812), and as further defined by regulation at 21 CFR 1308.11 through 1308.15; 
I11(2) T3ConvictionG1T1 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; 
I11(3) T3Criminal drug statuteG1T1 means a Federal or non-Federal criminal statute involving the manufacture, distribution, dispensing, use, or possession of any controlled substance; 
I11(4) T3Drug-free workplaceG1T1 means a site for the performance of work done in connection with a specific grant at which employees of the grantee are prohibited from engaging in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance; 
I11(5) T3EmployeeG1T1 means the employee of a grantee directly engaged in the performance of work under the grant, including: 
I11(i) All T3direct chargeG1T1 employees; 
I11(ii) All T3indirect chargeG1T1 employees, unless their impact or involvement is insignificant to the performance of the grant; and, 
I11(iii) Temporary personnel and consultants who are directly engaged in the performance of work under the grant and who are on the grantee's payroll. 
Q02I10This definition does not include workers not on the payroll of the grantee (e.g., volunteers, even if used to meet a matching requirement; consultants or independent contractors not on the payroll; or employees of subrecipients or subcontractors in covered workplaces); 
I11(6) T3Federal agencyG1T1 or T3agencyG1T1 means any United States executive department, military department, government corporation, government controlled corporation, any other establishment in the executive branch (including the Executive Office of the President), or any independent regulatory agency; 
I11(7) T3GrantG1T1 means an award of financial assistance, including a cooperative agreement, in the form of money, or property in lieu of money, by a Federal agency directly to a grantee. The term grant includes block grant and entitlement grant programs, whether or not exempted from coverage under the grants management government-wide common rule on uniform administrative requirements for grants and cooperative agreements. The term does not include technical assistance that provides services instead of money, or other assistance in the form of loans, loan guarantees, interest subsidies, insurance, or direct appropriations; or any veterans' benefits to individuals, i.e., any benefit to veterans, their families, or survivors by virtue of the service of a veteran in the Armed Forces of the United States; 
I11(8) T3GranteeG1T1 means a person who applies for or receives a grant directly from a Federal agency (except another Federal agency); 
I11(9) T3IndividualG1T1 means a natural person; 
I11(10) T3StateG1T1 means any of the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency of a State, exclusive of institutions of higher education, hospitals, and units of local government. A State instrumentality will be considered part of the State government if it has a written ï¿½150ï¿½determination from a State government that such State considers the instrumentality to be an agency of the State government. 

I80ï¿½1A3017.610
I89Coverage. 
I11(a) This subpart applies to any grantee of the agency. 
I11(b) This subpart applies to any grant, except where application of this subpart would be inconsistent with the international obligations of the United States or the laws or regulations of a foreign government. A determination of such inconsistency may be made only by the agency head or his/her designee. 
I11(c) The provisions of subparts A, B, C, D and E of this part apply to matters covered by this subpart, except where specifically modified by this subpart. In the event of any conflict between provisions of this subpart and other provisions of this part, the provisions of this subpart are deemed to control with respect to the implementation of drug-free workplace requirements concerning grants. 

I80ï¿½1A3017.615
I89Grounds for suspension of payments, suspension or termination of grants, or suspension or debarment.
I11A grantee shall be deemed in violation of the requirements of this subpart if the agency head or his or her official designee determines, in writing, that_ 
I11(a) The grantee has made a false certification under ï¿½1A3017.630; 
I11(b) With respect to a grantee other than an individual_ 
I11(1) The grantee has violated the certification by failing to carry out the requirements of paragraphs (A)(a)ï¿½09(g) and/or (B) of the certification (Alternate I to Appendix C) or 
I11(2) Such a number of employees of the grantee have been convicted of violations of criminal drug statutes for violations occurring in the workplace as to indicate that the grantee has failed to make a good faith effort to provide a drug-free workplace. 
I11(c) With respect to a grantee who is an individual_
I11(1) The grantee has violated the certification by failing to carry out its requirements (Alternate II to Appendix C); or 
I11(2) The grantee is convicted of a criminal drug offense resulting from a violation occurring during the conduct of any grant activity. 

I80ï¿½1A3017.620
I89Effect of violation. 
I11(a) In the event of a violation of this subpart as provided in ï¿½1A3017.615, and in accordance with applicable law, the grantee shall be subject to one or more of the following actions: 
I11(1) Suspension of payments under the grant; 
I11(2) Suspension or termination of the grant; and 
I11(3) Suspension or debarment of the grantee under the provisions of this part. 
I11(b) Upon issuance of any final decision under this part requiring debarment of a grantee, the debarred grantee shall be ineligible for award of any grant from any Federal agency for a period specified in the decision, not to exceed five years (T3seeG1T1 ï¿½1A3017.320(a)(2) of this part). 

I80ï¿½1A3017.625
I89Exception provision. 
I11The agency head may waive with respect to a particular grant, in writing, a suspension of payments under a grant, suspension or termination of a grant, or suspension or debarment of a grantee if the agency head determines that such a waiver would be in the public interest. This exception authority cannot be delegated to any other official. 

I80ï¿½1A3017.630
I89Certification requirements and procedures. 
I11(a)(1) As a prior condition of being awarded a grant, each grantee shall make the appropriate certification to the Federal agency providing the grant, as provided in Appendix C to this part. 
I11(2) Grantees are not required to make a certification in order to continue receiving funds under a grant awarded before March 18, 1989, or under a no-cost time extension of such a grant. However, the grantee shall make a one-time drug-free workplace certification for a non-automatic continuation of such a grant made on or after March 18, 1989. 
ï¿½151ï¿½I11(b) Except as provided in this section, all grantees shall make the required certification for each grant. For mandatory formula grants and entitlements that have no application process, grantees shall submit a one-time certification in order to continue receiving awards. 
I11(c) A grantee that is a State may elect to make one certification in each Federal fiscal year. States that previously submitted an annual certification are not required to make a certification for Fiscal Year 1990 until June 30, 1990. Except as provided in paragraph (d) of this section, this certification shall cover all grants to all State agencies from any Federal agency. The State shall retain the original of this statewide certification in its Governor's office and, prior to grant award, shall ensure that a copy is submitted individually with respect to each grant, unless the Federal agency has designated a central location for submission. 
I11(d)(1) The Governor of a State may exclude certain State agencies from the statewide certification and authorize these agencies to submit their own certifications to Federal agencies. The statewide certification shall name any State agencies so excluded. 
I11(2) A State agency to which the statewide certification does not apply, or a State agency in a State that does not have a statewide certification, may elect to make one certification in each Federal fiscal year. State agencies that previously submitted a State agency certification are not required to make a certification for Fiscal Year 1990 until June 30, 1990. The State agency shall retain the original of this State agency-wide certification in its central office and, prior to grant award, shall ensure that a copy is submitted individually with respect to each grant, unless the Federal agency designates a central location for submission. 
I11(3) When the work of a grant is done by more than one State agency, the certification of the State agency directly receiving the grant shall be deemed to certify compliance for all workplaces, including those located in other State agencies. 
I11(e)(1) For a grant of less than 30 days performance duration, grantees shall have this policy statement and program in place as soon as possible, but in any case by a date prior to the date on which performance is expected to be completed. 
I11(2) For a grant of 30 days or more performance duration, grantees shall have this policy statement and program in place within 30 days after award. 
I11(3) Where extraordinary circumstances warrant for a specific grant, the grant officer may determine a different date on which the policy statement and program shall be in place. 

I80ï¿½1A3017.635
I89Reporting of and employee sanctions for convictions of criminal drug offenses. 
I11(a) When a grantee other than an individual is notified that an employee has been convicted for a violation of a criminal drug statute occurring in the workplace, it shall take the following actions: 
I11(1) Within 10 calendar days of receiving notice of the conviction, the grantee shall provide written notice, including the convicted employee's position title, to every grant officer, or other designee on whose grant activity the convicted employee was working, unless a Federal agency has designated a central point for the receipt of such notifications. Notification shall include the identification number(s) for each of the Federal agency's affected grants. 
I11(2) Within 30 calendar days of receiving notice of the conviction, the grantee shall do the following with respect to the employee who was convicted. 
I11(i) Take appropriate personnel action against the employee, up to and including termination, consistent with requirements of the Rehabilitation Act of 1973, as amended; or 
I11(ii) Require the 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. 
I11(b) A grantee who is an individual who is convicted for a violation of a criminal drug statute occurring during the conduct of any grant activity shall ï¿½152ï¿½report the conviction, in writing, within 10 calendar days, to his or her Federal agency grant officer, or other designee, unless the Federal agency has designated a central point for the receipt of such notices. Notification shall include the identification number(s) for each of the Federal agency's affected grants. 
Q04I20(Approved by the Office of Management and Budget under control number 0991ï¿½090002)
S8002
I95Pt. 3017, App. A
I85Appendix A to Part T13017_G1T5T4Certification Regarding Debarment, Suspension, and Other Responsibility Matters_Primary Covered TransactionsG1T5
I71Instructions for Certification

I211. By signing and submitting this proposal, the prospective primary participant is providing the certification set out below. 
I212. The inability of a person to provide the certification required below will not necessarily result in denial of participation in this covered transaction. The prospective participant shall submit an explanation of why it cannot provide the certification set out below. The certification or explanation will be considered in connection with the department or agency's determination whether to enter into this transaction. However, failure of the prospective primary participant to furnish a certification or an explanation shall disqualify such person from participation in this transaction. 
I213. The certification in this clause is a material representation of fact upon which reliance was placed when the department or agency determined to enter into this transaction. If it is later determined that the prospective primary participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the department or agency may terminate this transaction for cause or default. 
I214. The prospective primary participant shall provide immediate written notice to the department or agency to which this proposal is submitted if at any time the prospective primary participant learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances. 
I215. The terms T3covered transaction, debarred, suspended, ineligible, lower tier covered transaction, participant, person, primary covered transaction, principal, proposal, and voluntarily excludedG1T1, as used in this clause, have the meanings set out in the Definitions and Coverage sections of the rules implementing Executive Order 12549. You may contact the department or agency to which this proposal is being submitted for assistance in obtaining a copy of those regulations. 
I216. The prospective primary participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency entering into this transaction. 
I217. The prospective primary participant further agrees by submitting this proposal that it will include the clause titled ``Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transaction,'' provided by the department or agency entering into this covered transaction, without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions. 
I218. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. A participant may decide the method and frequency by which it determines the eligibility of its principals. Each participant may, but is not required to, check the List of Parties Excluded from Federal Procurement and Nonprocurement Programs. 
I219. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. 
I2110. Except for transactions authorized under paragraph 6 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency may terminate this transaction for cause or default. 
ï¿½153ï¿½I73Certification Regarding Debarment, Suspension, and Other Responsibility Matters_Primary Covered Transactions 
I21(1) The prospective primary participant certifies to the best of its knowledge and belief, that it and its principals: 
I21(a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded by any Federal department or agency; 
I21(b) Have not within a three-year period preceding this proposal 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; 
I21(c) 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 (1)(b) of this certification; and 
I21(d) Have not within a three-year period preceding this application/proposal had one or more public transactions (Federal, State or local) terminated for cause or default. 
I21(2) Where the prospective primary participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal.
Q04I20[60 FR 33042, 33043, June 26, 1995]
S8002
I95Pt. 3017, App. B
I85Appendix B to Part T13017_G1T5T4Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion_Lower Tier Covered TransactionsG1T5 
I71Instructions for Certification
I211. By signing and submitting this proposal, the prospective lower tier participant is providing the certification set out below. 
I212. The certification in this clause is a material representation of fact upon which reliance was placed when this transaction was entered into. If it is later determined that the prospective lower tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government the department or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment. 
I213. The prospective lower tier participant shall provide immediate written notice to the person to which this proposal is submitted if at any time the prospective lower tier participant learns that its certification was erroneous when submitted or had become erroneous by reason of changed circumstances. 
I214. The terms T3covered transaction, debarred, suspended, ineligible, lower tier covered transaction, participant, person, primary covered transaction, principal, proposal,G1T1 and T3voluntarily excluded,G1T1 as used in this clause, have the meaning set out in the Definitions and Coverage sections of rules implementing Executive Order 12549. You may contact the person to which this proposal is submitted for assistance in obtaining a copy of those regulations. 
I215. The prospective lower tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the department or agency with which this transaction originated. 
I216. The prospective lower tier participant further agrees by submitting this proposal that it will include this clause titled ``Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Lower Tier Covered Transaction,'' without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions. 
I217. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 CFR part 9, subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded from covered transactions, unless it knows that the certification is erroneous. A participant may decide the method and frequency by which it determines the eligibility of its principals. Each participant may, but is not required to, check the List of Parties Excluded from Federal Procurement and Nonprocurement Programs. 
I218. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. 
I219. Except for transactions authorized under paragraph 5 of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 CFR part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded ï¿½154ï¿½from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies, including suspension and/or debarment. 
I73Certification Regarding Debarment, Suspension, Ineligibility an Voluntary Exclusion_Lower Tier Covered Transactions 
I21(1) The prospective lower tier participant certifies, by submission of this proposal, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. 
I21(2) Where the prospective lower tier participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal.
Q04I20[60 FR 33042, 33043, June 26, 1995]
S8002
I95Pt. 3017, App. C
I85Appendix C to Part T13017_G1T5T4Certification Regarding Drug-Free Workplace RequirementsG1T5 
I73Instructions for Certification
I211. By signing and/or submitting this application or grant agreement, the grantee is providing the certification set out below. 
I212. The certification set out below is a material representation of fact upon which reliance is placed when the agency awards the grant. If it is later determined that the grantee knowingly rendered a false certification, or otherwise violates the requirements of the Drug-Free Workplace Act, the agency, in addition to any other remedies available to the Federal Government, may take action authorized under the Drug-Free Workplace Act. 
I213. For grantees other than individuals, Alternate I applies. 
I214. For grantees who are individuals, Alternate II applies. 
I215. Workplaces under grants, for grantees other than individuals, need not be identified on the certification. If known, they may be identified in the grant application. If the grantee does not identify the workplaces at the time of application, or upon award, if there is no application, the grantee must keep the identity of the workplace(s) on file in its office and make the information available for Federal inspection. Failure to identify all known workplaces constitutes a violation of the grantee's drug-free workplace requirements. 
I216. Workplace identifications must include the actual address of buildings (or parts of buildings) or other sites where work under the grant takes place. Categorical descriptions may be used (e.g., all vehicles of a mass transit authority or State highway department while in operation, State employees in each local unemployment office, performers in concert halls or radio studios). 
I217. If the workplace identified to the agency changes during the performance of the grant, the grantee shall inform the agency of the change(s), if it previously identified the workplaces in question (see paragraph five). 
I218. Definitions of terms in the Nonprocurement Suspension and Debarment common rule and Drug-Free Workplace common rule apply to this certification. Grantees' attention is called, in particular, to the following definitions from these rules: 
I21T3Controlled substanceG1T1 means a controlled substance in Schedules I through V of the Controlled Substances Act (21 U.S.C. 812) and as further defined by regulation (21 CFR 1308.11 through 1308.15); 
I21T3ConvictionG1T1 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; 
I21T3Criminal drug statuteG1T1 means a Federal or non-Federal criminal statute involving the manufacture, distribution, dispensing, use, or possession of any controlled substance; 
I21T3EmployeeG1T1 means the employee of a grantee directly engaged in the performance of work under a grant, including: (i) All T3direct chargeG1T1 employees; (ii) All T3indirect chargeG1T1 employees unless their impact or involvement is insignificant to the performance of the grant; and, (iii) Temporary personnel and consultants who are directly engaged in the performance of work under the grant and who are on the grantee's payroll. This definition does not include workers not on the payroll of the grantee (e.g., volunteers, even if used to meet a matching requirement; consultants or independent contractors not on the grantee's payroll; or employees of subrecipients or subcontractors in covered workplaces). 
I73Certification Regarding Drug-Free Workplace Requirements 
I74T3Alternate I.G1T5 (Grantees Other Than Individuals) 
I21A. The grantee certifies that it will or will continue to provide a drug-free workplace by: 
I21(a) Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance is prohibited in the grantee's workplace and specifying the actions that will be taken against employees for violation of such prohibition; 
I21(b) Establishing an ongoing drug-free awareness program to inform employees about_
I21(1) The dangers of drug abuse in the workplace; 
ï¿½155ï¿½I21(2) The grantee's policy of maintaining a drug-free workplace; 
I21(3) Any available drug counseling, rehabilitation, and employee assistance programs; and 
I21(4) The penalties that may be imposed upon employees for drug abuse violations occurring in the workplace; 
I21(c) Making it a requirement that each employee to be engaged in the performance of the grant be given a copy of the statement required by paragraph (a); 
I21(d) Notifying the employee in the statement required by paragraph (a) that, as a condition of employment under the grant, the employee will_ 
I21(1) Abide by the terms of the statement; and 
I21(2) Notify the employer in writing of his or her conviction for a violation of a criminal drug statute occurring in the workplace no later than five calendar days after such conviction; 
I21(e) Notifying the agency in writing, within ten calendar days after receiving notice under paragraph (d)(2) 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; 
I21(f) Taking one of the following actions, within 30 calendar days of receiving notice under paragraph (d)(2), with respect to any employee who is so convicted_ 
I21(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 
I21(2) 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; 
I21(g) Making a good faith effort to continue to maintain a drug-free workplace through implementation of paragraphs (a), (b), (c), (d), (e) and (f). 
I21B. The grantee may insert in the space provided below the site(s) for the performance of work done in connection with the specific grant:
Q02
I25Place of Performance (Street address, city, county, state, zip code)
I77
I77
I77
Q02
S8003I20Check } if there are workplaces on file that are not identified here. 
S8002I74T3Alternate II.G1T5 (Grantees Who Are Individuals) 
I21(a) The grantee certifies that, as a condition of the grant, he or she will not engage in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance in conducting any activity with the grant; 
I21(b) If convicted of a criminal drug offense resulting from a violation occurring during the conduct of any grant activity, he or she will report the conviction, in writing, within 10 calendar days of the conviction, to every grant officer or other designee, unless the Federal agency designates a central point for the receipt of such notices. When notice is made to such a central point, it shall include the identification number(s) of each affected grant. Q04I20[55 FR 21690, 21691, May 25, 1990]
S8010
I95Pt. 3018
I52PART 3018_NEW RESTRICTIONS ON LOBBYING


I86Subpart A_General
S8006I18Sec.
S8010I263018.100Conditions on use of funds.
I263018.105Definitions.
I263018.110Certification and disclosure.

I86Subpart B_Activities by Own Employees
I263018.200Agency and legislative liaison.
I263018.205Professional and technical services. 
I263018.210Reporting.

I86Subpart C_Activities by Other Than Own Employees
I263018.300Professional and technical services.

I86Subpart D_Penalties and Enforcement
I263018.400Penalties.
I263018.405Penalty procedures.
I263018.410Enforcement.

I86Subpart E_Exemptions
I263018.500Secretary of Defense.

I86Subpart F_Agency Reports
I263018.600Semi-annual compilation.
I263018.605Inspector General report.
Q02I26T5T4Appendix A to PartG1T5 3018_T4Certification Regarding LobbyingG1T5
I26T5T4Appendix B to PartG1T5 3018_T4Disclosure Form to Report LobbyingG1T5

Q04I21T5Authority:  T1Sec. 319, Pub. L. 101ï¿½09121 (31 U.S.C. 1352); 5 U.S.C. 301.
Q04I21T5Source:  T155 FR 6737 and 6746, Feb. 26, 1990.

ï¿½156ï¿½Q04I21T5Cross Reference:  T1See also Office of Management and Budget notice published at 54 FR 52306, December 20, 1989.


I56Subpart A_General 

I80ï¿½1A3018.100
I89Conditions on use of funds.
I11(a) No appropriated funds may be expended by the recipient of a Federal contract, grant, loan, or cooperative ageement to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any of the following covered Federal actions: 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.
I11(b) Each person who requests or receives from an agency a Federal contract, grant, loan, or cooperative agreement shall file with that agency a certification, set forth in Appendix A, that the person has not made, and will not make, any payment prohibited by paragraph (a) of this section.
I11(c) Each person who requests or receives from an agency a Federal contract, grant, loan, or a cooperative agreement shall file with that agency a disclosure form, set forth in Appendix B, if such person has made or has agreed to make any payment using nonappropriated funds (to include profits from any covered Federal action), which would be prohibited under paragraph (a) of this section if paid for with appropriated funds.
I11(d) Each person who requests or receives from an agency a commitment providing for the United States to insure or guarantee a loan shall file with that agency a statement, set forth in Appendix A, whether that person has made or has agreed to make any payment to influence or attempt to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with that loan insurance or guarantee.
I11(e) Each person who requests or receives from an agency a commitment providing for the United States to insure or guarantee a loan shall file with that agency a disclosure form, set forth in Appendix B, if that person has made or has agreed to make any payment to influence or attempt to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with that loan insurance or guarantee.

I80ï¿½1A3018.105
I89Definitions.
I11For purposes of this part:
I11(a) T3Agency,G1T1 as defined in 5 U.S.C. 552(f), includes Federal executive departments and agencies as well as independent regulatory commissions and Government corporations, as defined in 31 U.S.C. 9101(1).
I11(b) T3Covered Federal actionG1T1 means any of the following Federal actions:
I11(1) The awarding of any Federal contract;
I11(2) The making of any Federal grant;
I11(3) The making of any Federal loan;
I11(4) The entering into of any cooperative agreement; and,
I11(5) The extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.
Q02I10Covered Federal action does not include receiving from an agency a commitment providing for the United States to insure or guarantee a loan. Loan guarantees and loan insurance are addressed independently within this part.
I11(c) T3Federal contractG1T1 means an acquisition contract awarded by an agency, including those subject to the Federal Acquisition Regulation (FAR), and any other acquisition contract for real or personal property or services not subject to the FAR.
I11(d) T3Federal cooperative agreementG1T1 means a cooperative agreement entered into by an agency.
I11(e) T3Federal grantG1T1 means an award of financial assistance in the form of money, or property in lieu of money, by the Federal Government or a direct ï¿½157ï¿½appropriation made by law to any person. The term does not include technical assistance which provides services instead of money, or other assistance in the form of revenue sharing, loans, loan guarantees, loan insurance, interest subsidies, insurance, or direct United States cash assistance to an individual.
I11(f) T3Federal loanG1T1 means a loan made by an agency. The term does not include loan guarantee or loan insurance.
I11(g) T3Indian tribeG1T1 and T3tribal organizationG1T1 have the meaning provided in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450B). Alaskan Natives are included under the definitions of Indian tribes in that Act.
I11(h) T3Influencing or attempting to influenceG1T1 means making, with the intent to influence, any communication to or appearance before an officer or employee or any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any covered Federal action.
I11(i) T3Loan guaranteeG1T1 and T3loan insuranceG1T1 means an agency's guarantee or insurance of a loan made by a person.
I11(j) T3Local governmentG1T1 means a unit of government in a State and, if chartered, established, or otherwise recognized by a State for the performance of a governmental duty, including a local public authority, a special district, an intrastate district, a council of governments, a sponsor group representative organization, and any other instrumentality of a local government.
I11(k) T3Officer or employee of an agencyG1T1 includes the following individuals who are employed by an agency:
I11(1) An individual who is appointed to a position in the Government under title 5, U.S. Code, including a position under a temporary appointment;
I11(2) A member of the uniformed services as defined in section 101(3), title 37, U.S. Code; 
I11(3) A special Government employee as defined in section 202, title 18, U.S. Code; and,
I11(4) An individual who is a member of a Federal advisory committee, as defined by the Federal Advisory Committee Act, title 5, U.S. Code appendix 2.
I11(l) T3PersonG1T1 means an individual, corporation, company, association, authority, firm, partnership, society, State, and local government, regardless of whether such entity is operated for profit or not for profit. This term excludes an Indian tribe, tribal organization, or any other Indian organization with respect to expenditures specifically permitted by other Federal law.
I11(m) T3Reasonable compensationG1T1 means, with respect to a regularly employed officer or employee of any person, compensation that is consistent with the normal compensation for such officer or employee for work that is not furnished to, not funded by, or not furnished in cooperation with the Federal Government. 
I11(n) T3Reasonable paymentG1T1 means, with respect to perfessional and other technical services, a payment in an amount that is consistent with the amount normally paid for such services in the private sector.
I11(o) T3RecipientG1T1 includes all contractors, subcontractors at any tier, and subgrantees at any tier of the recipient of funds received in connection with a Federal contract, grant, loan, or cooperative agreement. The term excludes an Indian tribe, tribal organization, or any other Indian organization with respect to expenditures specifically permitted by other Federal law. 
I11(p) T3Regularly employedG1T1 means, with respect to an officer or employee of a person requesting or receiving a Federal contract, grant, loan, or cooperative agreement or a commitment providing for the United States to insure or guarantee a loan, an officer or employee who is employed by such person for at least 130 working days within one year immediately preceding the date of the submission that initiates agency consideration of such person for receipt of such contract, grant, loan, cooperative agreement, loan insurance commitment, or loan guarantee commitment. An officer or employee who is employed by such person for less than 130 working days within one year immediately preceding the date of the submission that initiates agency consideration of such person shall be considered to be regularly employed as ï¿½158ï¿½soon as he or she is employed by such person for 130 working days. 
I11(q) T3StateG1T1 means a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, a territory or possession of the United States, an agency or instrumentality of a State, and a multi-State, regional, or interstate entity having governmental duties and powers. 

I80ï¿½1A3018.110
I89Certification and disclosure.
I11(a) Each person shall file a certification, and a disclosure form, if required, with each submission that initiates agency consideration of such person for: 
I11(1) Award of a Federal contract, grant, or cooperative agreement exceeding $100,000; or 
I11(2) An award of a Federal loan or a commitment providing for the United States to insure or guarantee a loan exceeding $150,000. 
I11(b) Each person shall file a certification, and a disclosure form, if required, upon receipt by such person of: 
I11(1) A Federal contract, grant, or cooperative agreement exceeding $100,000; or 
I11(2) A Federal loan or a commitment providing for the United States to insure or guarantee a loan exceeding $150,000,
Q02I10Unless such person previously filed a certification, and a disclosure form, if required, under paragraph (a) of this section. 
I11(c) Each person shall file a disclosure form at the end of each calendar quarter in which there occurs any event that requires disclosure or that materially affects the accuracy of the information contained in any disclosure form previously filed by such person under paragraphs (a) or (b) of this section. An event that materially affects the accuracy of the information reported includes: 
I11(1) A cumulative increase of $25,000 or more in the amount paid or expected to be paid for influencing or attempting to influence a covered Federal action; or 
I11(2) A change in the person(s) or individual(s) influencing or attempting to influence a covered Federal action; or, 
I11(3) A change in the officer(s), employee(s), or Member(s) contacted to influence or attempt to influence a covered Federal action. 
I11(d) Any person who requests or receives from a person referred to in paragraphs (a) or (b) of this section: 
I11(1) A subcontract exceeding $100,000 at any tier under a Federal contract; 
I11(2) A subgrant, contract, or subcontract exceeding $100,000 at any tier under a Federal grant; 
I11(3) A contract or subcontract exceeding $100,000 at any tier under a Federal loan exceeding $150,000; or, 
I11(4) A contract or subcontract exceeding $100,000 at any tier under a Federal cooperative agreement,
Q02I10Shall file a certification, and a disclosure form, if required, to the next tier above.
I11(e) All disclosure forms, but not certifications, shall be forwarded from tier to tier until received by the person referred to in paragraphs (a) or (b) of this section. That person shall forward all disclosure forms to the agency.
I11(f) Any certification or disclosure form filed under paragraph (e) of this section shall be treated as a material representation of fact upon which all receiving tiers shall rely. All liability arising from an erroneous representation shall be borne solely by the tier filing that representation and shall not be shared by any tier to which the erroneous representation is forwarded. Submitting an erroneous certification or disclosure constitutes a failure to file the required certification or disclosure, respectively. If a person fails to file a required certification or disclosure, the United States may pursue all available remedies, including those authorized by section 1352, title 31, U.S. Code.
I11(g) For awards and commitments in process prior to December 23, 1989, but not made before that date, certifications shall be required at award or commitment, covering activities occurring between December 23, 1989, and the date of award or commitment. However, for awards and commitments in process prior to the December 23, 1989 effective date of these provisions, but not made before December 23, 1989, disclosure forms shall not be required at time of award or commitment but shall be filed within 30 days.
ï¿½159ï¿½I11(h) No reporting is required for an activity paid for with appropriated funds if that activity is allowable under either Subpart B or C.

I56Subpart B_Activities by Own Employees

I80ï¿½1A3018.200 
I89Agency and legislative liaison.
I11(a) The prohibition on the use of appropriated funds, in ï¿½1A3018.100 (a), does not apply in the case of a payment of reasonable compensation made to an officer or employee of a person requesting or receiving a Federal contract, grant, loan, or cooperative agreement if the payment is for agency and legislative liaison activities not directly related to a covered Federal action.
I11(b) For purposes of paragraph (a) of this section, providing any information specifically requested by an agency or Congress is allowable at any time.
I11(c) For purposes of paragraph (a) of this section, the following agency and legislative liaison activities are allowable at any time only where they are not related to a specific solicitation for any covered Federal action:
I11(1) Discussing with an agency (including individual demonstrations) the qualities and characteristics of the person's products or services, conditions or terms of sale, and service capabilities; and, 
I11(2) Technical discussions and other activities regarding the application or adaptation of the person's products or services for an agency's use.
I11(d) For purposes of paragraph (a) of this section, the following agencies and legislative liaison activities are allowable only where they are prior to formal solicitation of any covered Federal action:
I11(1) Providing any information not specifically requested but necessary for an agency to make an informed decision about initiation of a covered Federal action; 
I11(2) Technical discussions regarding the preparation of an unsolicited proposal prior to its official submission; and, 
I11(3) Capability presentations by persons seeking awards from an agency pursuant to the provisions of the Small Business Act, as amended by Public Law 95ï¿½09507 and other subsequent amendments. 
I11(e) Only those activities expressly authorized by this section are allowable under this section.

I80ï¿½1A3018.205 
I89Professional and technical services.
I11(a) The prohibition on the use of appropriated funds, in ï¿½1A3018.100 (a), does not apply in the case of a payment of reasonable compensation made to an officer or employee of a person requesting or receiving a Federal contract, grant, loan, or cooperative agreement or an extension, continuation, renewal, amendment, or modification of a Federal contract, grant, loan, or cooperative agreement if payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for that Federal contract, grant, loan, or cooperative agreement or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal contract, grant, loan, or cooperative agreement. 
I11(b) For purposes of paragraph (a) of this section, ``professional and technical services'' shall be limited to advice and analysis directly applying any professional or technical discipline. For example, drafting of a legal document accompanying a bid or proposal by a lawyer is allowable. Similarly, technical advice provided by an engineer on the performance or operational capability of a piece of equipment rendered directly in the negotiation of a contract is allowable. However, communications with the intent to influence made by a professional (such as a licensed lawyer) or a technical person (such as a licensed accountant) are not allowable under this section unless they provide advice and analysis directly applying their professional or technical expertise and unless the advice or analysis is rendered directly and solely in the preparation, submission or negotiation of a covered Federal action. Thus, for example, communications with the intent to influence made by a lawyer that do not provide legal advice or analysis directly and solely related to the legal aspects of ï¿½160ï¿½his or her client's proposal, but generally advocate one proposal over another are not allowable under this section because the lawyer is not providing professional legal services. Similarly, communications with the intent to influence made by an engineer providing an engineering analysis prior to the preparation or submission of a bid or proposal are not allowable under this section since the engineer is providing technical services but not directly in the preparation, submission or negotiation of a covered Federal action.
I11(c) Requirements imposed by or pursuant to law as a condition for receiving a covered Federal award include those required by law or regulation, or reasonably expected to be required by law or regulation, and any other requirements in the actual award documents.
I11(d) Only those services expressly authorized by this section are allowable under this section.

I80ï¿½1A3018.210
I89Reporting.
I11No reporting is required with respect to payments of reasonable compensation made to regularly employed officers or employees of a person. 

I56Subpart C_Activities by Other Than Own Employees

I80ï¿½1A3018.300
I89Professional and technical services.
I11(a) The prohibition on the use of appropriated funds, in ï¿½1A3018.100 (a), does not apply in the case of any reasonable payment to a person, other than an officer or employee of a person requesting or receiving a covered Federal action, if the payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for that Federal contract, grant, loan, or cooperative agreement or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal contract, grant, loan, or cooperative agreement.
I11(b) The reporting requirements in ï¿½1A3018.110 (a) and (b) regarding filing a disclosure form by each person, if required, shall not apply with respect to professional or technical services rendered directly in the preparation, submission, or negotiation of any commitment providing for the United States to insure or guarantee a loan.
I11(c) For purposes of paragraph (a) of this section, ``professional and technical services'' shall be limited to advice and analysis directly applying any professional or technical discipline. For example, drafting or a legal document accompanying a bid or proposal by a lawyer is allowable. Similarly, technical advice provided by an engineer on the performance or operational capability of a piece of equipment rendered directly in the negotiation of a contract is allowable. However, communications with the intent to influence made by a professional (such as a licensed lawyer) or a technical person (such as a licensed accountant) are not allowable under this section unless they provide advice and analysis directly applying their professional or technical expertise and unless the advice or analysis is rendered directly and solely in the preparation, submission or negotiation of a covered Federal action. Thus, for example, communications with the intent to influence made by a lawyer that do not provide legal advice or analysis directly and solely related to the legal aspects of his or her client's proposal, but generally advocate one proposal over another are not allowable under this section because the lawyer is not providing professional legal services. Similarly, communications with the intent to influence made by an engineer providing an engineering analysis prior to the preparation or submission of a bid or proposal are not allowable under this section since the engineer is providing technical services but not directly in the preparation, submission or negotiation of a covered Federal action.
I11(d) Requirements imposed by or pursuant to law as a condition for receiving a covered Federal award include those required by law or regulation, or reasonably expected to be required by law or regulation, and any other requirements in the actual award documents.
ï¿½161ï¿½I11(e) Persons other than officers or employees of a person requesting or receiving a covered Federal action include consultants and trade associations.
I11(f) Only those services expressly authorized by this section are allowable under this section.

I56Subpart D_Penalties and Enforcement

I80ï¿½1A3018.400
I89Penalties.
I11(a) Any person who makes an expenditure prohibited herein shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such expenditure.
I11(b) Any person who fails to file or amend the disclosure form (see Appendix B) to be filed or amended if required herein, shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.
I11(c) A filing or amended filing on or after the date on which an administrative action for the imposition of a civil penalty is commenced does not prevent the imposition of such civil penalty for a failure occurring before that date. An administrative action is commenced with respect to a failure when an investigating official determines in writing to commence an investigation of an allegation of such failure.
I11(d) In determining whether to impose a civil penalty, and the amount of any such penalty, by reason of a violation by any person, the agency shall consider the nature, circumstances, extent, and gravity of the violation, the effect on the ability of such person to continue in business, any prior violations by such person, the degree of culpability of such person, the ability of the person to pay the penalty, and such other matters as may be appropriate.
I11(e) First offenders under paragraphs (a) or (b) of this section shall be subject to a civil penalty of $10,000, absent aggravating circumstances. Second and subsequent offenses by persons shall be subject to an appropriate civil penalty between $10,000 and $100,000, as determined by the agency head or his or her designee.
I11(f) An imposition of a civil penalty under this section does not prevent the United States from seeking any other remedy that may apply to the same conduct that is the basis for the imposition of such civil penalty.

I80ï¿½1A3018.405 
I89Penalty procedures.
I11Agencies shall impose and collect civil penalties pursuant to the provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C. sections 3803 (except subsection (c)), 3804, 3805, 3806, 3807, 3808, and 3812, insofar as these provisions are not inconsistent with the requirements herein.

I80ï¿½1A3018.410 
I89Enforcement.
I11The head of each agency shall take such actions as are necessary to ensure that the provisions herein are vigorously implemented and enforced in that agency.

I56Subpart E_Exemptions

I80ï¿½1A3018.500 
I89Secretary of Defense.
I11(a) The Secretary of Defense may exempt, on a case-by-case basis, a covered Federal action from the prohibition whenever the Secretary determines, in writing, that such an exemption is in the national interest. The Secretary shall transmit a copy of each such written exemption to Congress immediately after making such a determination.
I11(b) The Department of Defense may issue supplemental regulations to implement paragraph (a) of this section.

I56Subpart F_Agency Reports

I80ï¿½1A3018.600 
I89Semi-annual compilation.
I11(a) The head of each agency shall collect and compile the disclosure reports (see appendix B) and, on May 31 and November 30 of each year, submit to the Secretary of the Senate and the Clerk of the House of Representatives a report containing a compilation of the information contained in the disclosure reports received during the six-month period ending on March 31 or September 30, respectively, of that year.
I11(b) The report, including the compilation, shall be available for public inspection 30 days after receipt of the report by the Secretary and the Clerk.
ï¿½162ï¿½I11(c) Information that involves intelligence matters shall be reported only to the Select Committee on Intelligence of the Senate, the Permanent Select Committee on Intelligence of the House of Representatives, and the Committees on Appropriations of the Senate and the House of Representatives in accordance with procedures agreed to by such committees. Such information shall not be available for public inspection.
I11(d) Information that is classified under Executive Order 12356 or any successor order shall be reported only to the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives or the Committees on Armed Services of the Senate and the House of Representatives (whichever such committees have jurisdiction of matters involving such information) and to the Committees on Appropriations of the Senate and the House of Representatives in accordance with procedures agreed to by such committees. Such information shall not be available for public inspection.
I11(e) The first semi-annual compilation shall be submitted on May 31, 1990, and shall contain a compilation of the disclosure reports received from December 23, 1989 to March 31, 1990.
I11(f) Major agencies, designated by the Office of Management and Budget (OMB), are required to provide machine-readable compilations to the Secretary of the Senate and the Clerk of the House of Representatives no later than with the compilations due on May 31, 1991. OMB shall provide detailed specifications in a memorandum to these agencies.
I11(g) Non-major agencies are requested to provide machine-readable compilations to the Secretary of the Senate and the Clerk of the House of Representatives.
I11(h) Agencies shall keep the originals of all disclosure reports in the official files of the agency.

I80ï¿½1A3018.605 
I89Inspector General report.
I11(a) The Inspector General, or other official as specified in paragraph (b) of this section, of each agency shall prepare and submit to Congress each year, commencing with submission of the President's Budget in 1991, an evaluation of the compliance of that agency with, and the effectiveness of, the requirements herein. The evaluation may include any recommended changes that may be necessary to strengthen or improve the requirements.
I11(b) In the case of an agency that does not have an Inspector General, the agency official comparable to an Inspector General shall prepare and submit the annual report, or, if there is no such comparable official, the head of the agency shall prepare and submit the annual report.
I11(c) The annual report shall be submitted at the same time the agency submits its annual budget justifications to Congress.
I11(d) The annual report shall include the following: All alleged violations relating to the agency's covered Federal actions during the year covered by the report, the actions taken by the head of the agency in the year covered by the report with respect to those alleged violations and alleged violations in previous years, and the amounts of civil penalties imposed by the agency in the year covered by the report.
S8002
I95Pt. 3018, App. A
I85Appendix A to Part T13018_G1T5T4Certification Regarding LobbyingG1T5
I73Certification for Contracts, Grants, Loans, and Cooperative Agreements
I21The undersigned certifies, to the best of his or her knowledge and belief, that:
I21(1) No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of an 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.
I21(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 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 undersigned shall complete ï¿½163ï¿½and submit Standard Formï¿½09LLL, ``Disclosure Form to Report Lobbying,'' in accordance with its instructions.
I21(3) The undersigned shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly.
I21This 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. Code. 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.
I73Statement for Loan Guarantees and Loan Insurance
I21The undersigned states, to the best of his or her knowledge and belief, that:
I21If any funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this commitment providing for the United States to insure or guarantee a loan, the undersigned shall complete and submit Standard Formï¿½09LLL, ``Disclosure Form to Report Lobbying,'' in accordance with its instructions.
I21Submission of this statement is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required statement shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.
A
S8002
ï¿½164ï¿½I95Pt. 3018, App. B
S8006I24Appendix B to Part 3018_Disclosure Form to Report Lobbying
S8006
gs,ic,w348,d470,r1I95G:\GRAPHICS\EC13SE91.000
S8010
A
S8006
ï¿½165ï¿½gs,ic,w348,d448,r1I95G:\GRAPHICS\EC13SE91.001
S8010
A
S8006
ï¿½166ï¿½gs,ic,w348,d470,r1I95G:\GRAPHICS\EC13SE91.002
S8010
A

ï¿½167ï¿½I95Pt. 3019
I52PART 3019_UNIFORM ADMINISTRATIVE REQUIREMENTS FOR GRANTS AND AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION, HOSPITALS, AND OTHER NON-PROFIT ORGANIZATIONS


I86Subpart A_General
S8006I18Sec.
S8010I263019.1Purpose.
I263019.2Definitions.
I263019.3Effect on other issuances.
I263019.4Deviations.
I263019.5Subawards.

I86Subpart B_Pre-Award Requirements
I263019.10Purpose.
I263019.11Pre-award policies.
I263019.12Forms for applying for Federal assistance.
I263019.13Debarment and suspension.
I263019.14Special award conditions.
I263019.15Metric system of measurement.
I263019.16Resource Conservation and Recovery Act.
I263019.17Certifications and representations.

I86Subpart C_Post-Award Requirements
I74Financial and Program Management
I263019.20Purpose of financial and program management.
I263019.21Standards for financial management systems.
I263019.22Payment.
I263019.23Cost sharing or matching.
I263019.24Program income.
I263019.25Revision of budget and program plans.
I263019.26Non-Federal audits.
I263019.27Allowable costs.
I263019.28Period of availability of funds.
I74Property Standards
I263019.30Purpose of property standards.
I263019.31Insurance coverage.
I263019.32Real property.
I263019.33Federally-owned and exempt property.
I263019.34Equipment.
I263019.35Supplies and other expendable property.
I263019.36Intangible property.
I263019.37Property trust relationship.
I74Procurement Standards
I263019.40Purpose of procurement standards.
I263019.41Recipient responsibilities.
I263019.42Codes of conduct.
I263019.43Competition.
I263019.44Procurement procedures.
I263019.45Cost and price analysis.
I263019.46Procurement records.
I263019.47Contract administration.
I263019.48Contract provisions.
I74Reports and Records
I263019.50Purpose of reports and records.
I263019.51Monitoring and reporting program performance.
I263019.52Financial reporting.
I263019.53Retention and access requirements for records.
I74Termination and Enforcement
I263019.60Purpose of termination and enforcement.
I263019.61Termination.
I263019.62Enforcement.

I86Subpart D_After-the-Award Requirements
I263019.70Purpose.
I263019.71Closeout procedures.
I263019.72Subsequent adjustments and continuing responsibilities.
I263019.73Collection of amounts due.
Q02I26T5T4Appendix A to PartG1T5 3019_T4Contract ProvisionsG1T5

Q04I21T5Authority:  T15 U.S.C. 301.
Q04I21T5Source:  T160 FR 44124, Aug. 24, 1995, unless otherwise noted.

I56Subpart A_General

I80ï¿½1A3019.1
I89Purpose.
I11This part establishes uniform administrative requirements for Federal grants and agreements awarded to institutions of higher education, hospitals, and other non-profit organizations. Federal awarding agencies shall not impose additional or inconsistent requirements, except as provided in ï¿½1A3019.4, and 3019.14 or unless specifically required by Federal statute or executive order. Non-profit organizations that implement Federal programs for the States are also subject to State requirements.

I80ï¿½1A3019.2
I89Definitions.
I11(a) T3Accrued expendituresG1T1 means the charges incurred by the recipient during a given period requiring the provision of funds for:
I11(1) Goods and other tangible property received;
I11(2) Services performed by employees, contractors, subrecipients, and other payees; and

I11(3) Other amounts becoming owed under programs for which no current services or performance is required.
ï¿½168ï¿½I11(b) T3Accrued incomeG1T1 means the sum of:
I11(1) Earnings during a given period from:
I11(i) Services performed by the recipient, and 
I11(ii) Goods and other tangible property delivered to purchasers, and
I11(2) Amounts becoming owed to the recipient for which no current services or performance is required by the recipient.
I11(c) T3Acquisition cost of equipmentG1T1 means the net invoice price of the equipment, including the cost of modifications, attachments, accessories, or auxiliary apparatus necessary to make the property usable for the purpose for which it was acquired. Other charges, such as the cost of installation, transportation, taxes, duty or protective in-transit insurance, shall be included or excluded from the unit acquisition cost in accordance with the recipient's regular accounting practices.
I11(d) T3AdvanceG1T1 means a payment made by Treasury check or other appropriate payment mechanism to a recipient upon its request either before outlays are made by the recipient or through the use of predetermined payment schedules.
I11(e) T3AwardG1T1 means financial assistance that provides support or stimulation to accomplish a public purpose. Awards include grants and other agreements in the form of money or property in lieu of money, by the Federal Government to an eligible recipient. The term does not include: technical assistance, which provides services instead of money; other assistance in the form of loans, loan guarantees, interest subsidies, or insurance; direct payments of any kind to individuals; contracts which are required to be entered into and administered under procurement laws and regulations; and those agreements that are entered into under the authorities provided by sections 1472(b), 1473A, and 1473C of the National Research Extension, and Teaching Policy Act of 1977 (as amended by the Food Security Act (7 U.S.C. 3318, 3319a and 3319c.) and subsequent authorizations. The term also does not include entitlement grants and subgrants under the National School Lunch Act:
I11(1) School Lunch (section 4 of the Act), 
I11(2) Commodity Assistance (section 6 of the Act),
I11(3) Special Meal Assistance (section 11 of the Act),
I11(4) Summer Food Service for Children (section 13 of the Act), and,
I11(5) Child and Adult Care Food Program (section 17 of the Act), and entitlements grants and subgrants under the following programs of the Child Nutrition Act of 1966:
I11(i) Special Milk (section 3 of the Act), and,
I11(ii) School Breakfast (section 4 of the Act).
I11(f) T3Cash contributionsG1T1 means the recipient's cash outlay, including the outlay of money contributed to the recipient by third parties.
I11(g) T3CloseoutG1T1 means the process by which a Federal awarding agency determines that all applicable administrative actions and all required work of the award have been completed by the recipient and Federal awarding agency.
I11(h) T3ContractG1T1 means a procurement contract under an award or subaward, and a procurement subcontract under a recipient's or subrecipient's contract.
I11(i) T3Cost sharing or matchingG1T1 means that portion of project or program costs not borne by the Federal Government.
I11(j) T3Date of completionG1T1 means the date on which all work under an award is completed or the date on the award document, or any supplement or amendment thereto, on which Federal sponsorship ends.
I11(k) T3Disallowed costsG1T1 means those charges to an award that the Federal awarding agency determines to be unallowable, in accordance with the applicable Federal cost principles or other terms and conditions contained in the award.
I11(l) T3EquipmentG1T1 means tangible nonexpendable personal property including exempt property charged directly to the award having a useful life of more than one year and an acquisition cost of $5000 or more per unit. However, consistent with recipient policy, lower limits may be established.
I11(m) T3Excess propertyG1T1 means property under the control of any Federal awarding agency that, as determined ï¿½169ï¿½by the head thereof, is no longer required for its needs or the discharge of its responsibilities.
I11(n) T3Exempt propertyG1T1 means tangible personal property acquired in whole or in part with Federal funds, where the Federal awarding agency has statutory authority to vest title in the recipient without further obligation to the Federal Government. An example of exempt property authority is contained in the Federal Grant and Cooperative Agreement Act (31 U.S.C. 6306), for property acquired under an award to conduct basic or applied research by a non-profit institution of higher education or non-profit organization whose principal purpose is conducting scientific research.
I11(o) T3Federal awarding agencyG1T1 means the U.S. Department of Agriculture (USDA) or any subagency of the U.S. Department of Agriculture that provides an award to the recipient.
I11(p) T3Federal funds authorizedG1T1 means the total amount of Federal funds obligated by the Federal Government for use by the recipient. This amount may include any authorized carryover of unobligated funds from prior funding periods when permitted by agency regulations or agency implementing instructions.
I11(q) T3Federal shareG1T1 of real property, equipment, or supplies means that percentage of the property's acquisition costs and any improvement expenditures paid with Federal funds.
I11(r) T3Funding periodG1T1 means the period of time when Federal funding is available for obligation by the recipient.
I11(s) T3Intangible property and debt instrumentsG1T1 means, but is not limited to, trademarks, copyrights, patents and patent applications and such property as loans, notes and other debt instruments, lease agreements, stock and other instruments of property ownership, whether considered tangible or intangible.
I11(t) T3ObligationsG1T1 means the amounts of orders placed, contracts and grants awarded, services received and similar transactions during a given period that require payment by the recipient during the same or a future period.
I11(u) T3Outlays or expendituresG1T1 means charges made to the project or program. They may be reported on a cash or accrual basis. For reports prepared on a cash basis, outlays are the sum of cash disbursements for direct charges for goods and services, the amount of indirect expense charged, the value of third party in-kind contributions applied and the amount of cash advances and payments made to subrecipients. For reports prepared on an accrual basis, outlays are the sum of cash disbursements for direct charges for goods and services, the amount of indirect expense incurred, the value of in-kind contributions applied, and the net increase (or decrease) in the amounts owed by the recipient for goods and other property received, for services performed by employees, contractors, subrecipients and other payees and other amounts becoming owed under programs for which no current services or performance are required.
I11(v) T3Personal propertyG1T1 means property of any kind except real property. It may be tangible, having physical existence, or intangible, having no physical existence, such as copyrights, patents, or securities.
I11(w) T3Prior approvalG1T1 means written approval by an authorized official evidencing prior consent.
I11(x) T3Program incomeG1T1 means gross income earned by the recipient that is directly generated by a supported activity or earned as a result of the award (see exclusions in ï¿½1A3019.24 (e) and (h)). Program income includes, but is not limited to, income from fees for services performed, the use or rental of real or personal property acquired under federally-funded projects, the sale of commodities or items fabricated under an award, license fees and royalties on patents and copyrights, and interest on loans made with award funds. Interest earned on advances of Federal funds is not program income. Except as otherwise provided in Federal awarding agency regulations or the terms and conditions of the award, program income does not include the receipt of principal on loans, rebates, credits, discounts, etc., or interest earned on any of them.
I11(y) T3Project costsG1T1 means all allowable costs, as set forth in the applicable Federal cost principles, incurred by a ï¿½170ï¿½recipient and the value of the contributions made by third parties in accomplishing the objectives of the award during the project period.
I11(z) T3Project periodG1T1 means the period established in the award document during which Federal sponsorship begins and ends.
I11(aa) T3PropertyG1T1 means, unless otherwise stated, real property, equipment, intangible property and debt instruments.
I11(bb) T3Real propertyG1T1 means land, including land improvements, structures and appurtenances thereto, but excludes movable machinery and equipment.
I11(cc) T3RecipientG1T1 means an organization receiving financial assistance directly from Federal awarding agencies to carry out a project or program. The term includes public and private institutions of higher education, public and private hospitals, and other quasi-public and private non-profit organizations such as, but not limited to, community action agencies, research institutes, educational associations, and health centers. The term may include commercial organizations, foreign or international organizations (such as agencies of the United Nations) which are recipients, subrecipients, or contractors or subcontractors of recipients or subrecipients at the discretion of the Federal awarding agency. The term does not include government-owned contractor-operated facilities or research centers providing continued support for mission-oriented, large-scale programs that are government-owned or controlled, or are designated as federally-funded research and development centers.
I11(dd) T3Research and developmentG1T1 means all research activities, both basic and applied, and all development activities that are supported at universities, colleges, and other non-profit institutions. ``Research'' is defined as a systematic study directed toward fuller scientific knowledge or understanding of the subject studied. ``Development'' is the systematic use of knowledge and understanding gained from research directed toward the production of useful materials, devices, systems, or methods, including design and development of prototypes and processes. The term research also includes activities involving the training of individuals in research techniques where such activities utilize the same facilities as other research and development activities and where such activities are not included in the instruction function.
I11(ee) T3Small awardsG1T1 means a grant or cooperative agreement not exceeding the small purchase threshold fixed at 41 U.S.C. 403(11) (currently $25,000).
I11(ff) T3SubawardG1T1 means an award of financial assistance in the form of money, or property in lieu of money, made under an award by a recipient to an eligible subrecipient or by a subrecipient to a lower tier subrecipient. The term includes financial assistance when provided by any legal agreement, even if the agreement is called a contract, but does not include procurement of goods and services nor does it include any form of assistance which is excluded from the definition of ``award'' in paragraph (e) of this section.
I11(gg) T3SubrecipientG1T1 means the legal entity to which a subaward is made and which is accountable to the recipient for the use of the funds provided. The term may include foreign or international organizations (such as agencies of the United Nations) at the discretion of the Federal awarding agency.
I11(hh) T3SuppliesG1T1 means all personal property excluding equipment, intangible property, and debt instruments as defined in this section, and inventions of a contractor conceived or first actually reduced to practice in the performance of work under a funding agreement (``subject inventions''), as defined in 37 CFR part 401, ``Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts, and Cooperative Agreements.''
I11(ii) T3SuspensionG1T1 means an action by a Federal awarding agency that temporarily withdraws Federal sponsorship under an award, pending corrective action by the recipient or pending a decision to terminate the award by the Federal awarding agency. Suspension of an award is a separate action from suspension under Federal agency regulations implementing E.O.s 12549 and 12689, ``Debarment and Suspension.''
ï¿½171ï¿½I11(jj) T3TerminationG1T1 means the cancellation of Federal sponsorship, in whole or in part, under an agreement at any time prior to the date of completion.
I11(kk) T3Third party in-kind contributionsG1T1 means the value of non-cash contributions provided by non-Federal third parties. Third party in-kind contributions may be in the form of real property, equipment, supplies and other expendable property, and the value of goods and services directly benefiting and specifically identifiable to the project or program.
I11(ll) T3Unliquidated obligationsG1T1, for financial reports prepared on a cash basis, means the amount of obligations incurred by the recipient that have not been paid. For reports prepared on an accrued expenditure basis, they represent the amount of obligations incurred by the recipient for which an outlay has not been recorded.
I11(mm) T3Unobligated balanceG1T1 means the portion of the funds authorized by the Federal awarding agency that has not been obligated by the recipient and is determined by deducting the cumulative obligations from the cumulative funds authorized.
I11(nn) T3Unrecovered indirect costG1T1 means the difference between the amount awarded and the amount which could have been awarded under the recipient's approved negotiated indirect cost rate.
I11(oo) T3Working capital advanceG1T1 means a procedure where by funds are advanced to the recipient to cover its estimated disbursement needs for a given initial period.

I80ï¿½1A3019.3
I89Effect on other issuances.
I11For awards subject to this part, all administrative requirements of codified program regulations, program manuals, handbooks and other nonregulatory materials which are inconsistent with the requirements of this part shall be superseded, except to the extent they are required by statute, or authorized in accordance with the deviations provision in ï¿½1A3019.4.

I80ï¿½1A3019.4
I89Deviations.
I11The Office of Management and Budget (OMB) may grant exceptions for classes of grants or recipients subject to the requirements of this part when exceptions are not prohibited by statute. However, in the interest of maximum uniformity, exceptions from the requirements of this part shall be permitted only in unusual circumstances. Federal awarding agencies may apply more restrictive requirements to a class of recipients when approved by OMB. Federal awarding agencies may apply less restrictive requirements when awarding small awards, except for those requirements which are statutory. Exceptions on a case-by-case basis may also be made by Federal awarding agencies.

I80ï¿½1A3019.5
I89Subawards.
I11Unless sections of this part specifically exclude subrecipients from coverage, the provisions of this part shall be applied to subrecipients performing work under awards if such subrecipients are institutions of higher education, hospitals or other non-profit organizations. State and local government subrecipients are subject to the provisions of regulations implementing the grants management common rule, ``Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Government,'' codified at 7 CFR part 3016.

I56Subpart B_Pre-Award Requirements

I80ï¿½1A3019.10
I89Purpose.
I11Sections 3019.11 through 3019.17 prescribe forms and instructions and other pre-award matters to be used in applying for Federal awards. 

I80ï¿½1A3019.11
I89Pre-award policies.
I11(a) T3Use of grants and cooperative agreements, and contracts.G1T1 In each instance, the Federal awarding agency shall decide on the appropriate award instrument (i.e., grant, cooperative agreement, or contract). The Federal Grant and Cooperative Agreement Act (31 U.S.C. 6301ï¿½0908) governs the use of grants, cooperative agreements and contracts. A grant or cooperative agreement shall be used only when the principal purpose of a transaction is to accomplish a public purpose of support or stimulation authorized by Federal statute. The statutory criterion for ï¿½172ï¿½choosing between grants and cooperative agreements is that for the latter, ``substantial involvement is expected between the executive agency and the State, local government, or other recipient when carrying out the activity contemplated in the agreement.'' Contracts shall be used when the principal purpose is acquisition of property or services for the direct benefit or use of the Federal Government.
I11(b) T3Public notice and priority setting.G1T1 Federal awarding agencies shall notify the public of its intended funding priorities for discretionary grant programs, unless funding priorities are established by Federal statute.

I80ï¿½1A3019.12
I89Forms for applying for Federal assistance.
I11(a) Federal awarding agencies shall comply with the applicable report clearance requirements of 5 CFR part 1320, ``Controlling Paperwork Burdens on the Public,'' with regard to all forms used by the Federal awarding agency in place of or as a supplement to the Standard Form 424 (SFï¿½09424) series.
I11(b) Applicants shall use the SFï¿½09424 series or those forms and instructions prescribed by the Federal awarding agency.
I11(c) For Federal programs covered by E.O. 12372, ``Intergovernmental Review of Federal Programs,'' the applicant shall complete the appropriate sections of the SFï¿½09424 (Application for Federal Assistance) indicating whether the application was subject to review by the State Single Point of Contact (SPOC). The name and address of the SPOC for a particular State can be obtained from the Federal awarding agency or the Catalog of Federal Domestic Assistance. The SPOC shall advise the applicant whether the program for which application is made has been selected by that State for review. The U.S. Department of Agriculture procedures implementing E.O. 12372 are found at CFR part 3015.
I11(d) Federal awarding agencies that do not use the SFï¿½09424 form should indicate whether the application is subject to review by the State under E.O. 12372.

I80ï¿½1A3019.13
I89Debarment and suspension.
I11Federal awarding agencies and recipients shall comply with the nonprocurement debarment and suspension common rule implementing E.O.s 12549 and 12669, ``Debarment and Suspension,'' codified at 7 CFR 3017. This common rule restricts subawards and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.

I80ï¿½1A3019.14
I89Special award conditions.
I11If an applicant or recipient.
I11(a) Has a history of poor performance,
I11(b) Is not financially stable,
I11(c) Has a management system that does not meet the standards prescribed in this part,
I11(d) Has not conformed to the terms and conditions of a previous award, or
I11(e) Is not otherwise responsible,
Q02I10Federal awarding agencies may impose additional requirements as needed, provided that such applicant or recipient is notified in writing as to: the nature of the additional requirements, the reason why the additional requirements are being imposed, the nature of the corrective action needed, the time allowed for completing the corrective actions, and the method for requesting reconsideration of the additional requirements imposed. Any special conditions shall be promptly removed once the conditions that prompted them have been corrected.

I80ï¿½1A3019.15
I89Metric system of measurement.
I11The Metric Conversion Act, as amended by the Omnibus Trade and Competitiveness Act (15 U.S.C. 205) declares that the metric system is the preferred measurement system for U.S. trade and commerce. The Act requires each Federal agency to establish a date or dates in consultation with the Secretary of Commerce, when the metric system of measurement will be used in the agency's procurements, grants, and other business-related activities. Metric implementation may take longer where the use of the system is initially ï¿½173ï¿½impractical or likely to cause significant inefficiencies in the accomplishment of federally-funded activities. Federal awarding agencies shall follow the provisions of E.O. 12770, ``Metric Usage in Federal Government Programs.''

I80ï¿½1A3019.16
I89Resource Conservation and Recovery Act.
I11Under the Resource Conservation and Recovery Act (RCRA) (Pub. L. 94ï¿½09580 codified at 42 U.S.C. 6962), any State agency or agency of a political subdivision of a State which is using appropriated Federal funds must comply with section 6002. Section 6002 requires that preference be given in procurement programs to the purchase of specific products containing recycled materials identified in guidelines developed by the Environmental Protection Agency (EPA) (40 CFR parts 247ï¿½09254). Accordingly, State and local institutions of higher education, hospitals, and non-profit organizations that receive direct Federal awards or other Federal funds shall give preference in their procurement programs funded with Federal funds to the purchase of recycled products pursuant to the EPA guidelines.

I80ï¿½1A3019.17
I89Certifications and representations.
I11Unless prohibited by statute or codified regulation, each Federal awarding agency is authorized and encouraged to allow recipients to submit certifications and representations required by statute, executive order, or regulation on an annual basis, if the recipients have ongoing and continuing relationships with the agency. Annual certifications and representations shall be signed by responsible officials with the authority to ensure recipients' compliance with the pertinent requirements.

I56Subpart C_Post-Award Requirements
I84Financial and Program Management

I80ï¿½1A3019.20 
I89Purpose of financial and program management.
I11Sections 3019.21 through 3019.28 prescribe standards for financial management systems, methods for making payments and rules for: satisfying cost sharing and matching requirements, accounting for program income, budget revision approvals, making audits, determining allowability of cost, and establishing fund availability.

I80ï¿½1A3019.21 
I89Standards for financial management systems.
I11(a) Federal awarding agencies shall require recipients to relate financial data to performance data and develop unit cost information whenever practical.
I11(b) Recipients' financial management systems shall provide for the following.
I11(1) Accurate, current and complete disclosure of the financial results of each federally-sponsored project or program in accordance with the reporting requirements set forth in ï¿½1A3019.52. If a Federal awarding agency requires reporting on an accrual basis from a recipient that maintains its records on other than an accrual basis, the recipient shall not be required to establish an accrual accounting system. These recipients may develop such accrual data for its reports on the basis of an analysis of the documentation on hand.
I11(2) Records that identify adequately the source and application of funds for federally-sponsored activities. These records shall contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, outlays, income and interest.
I11(3) Effective control over and accountability for all funds, property and other assets. Recipients shall adequately safeguard all such assets and assure they are used solely for authorized purposes.
I11(4) Comparison of outlays with budget amounts for each award. Whenever appropriate, financial information should be related to performance and unit cost data.
I11(5) Written procedures to minimize the time elapsing between the transfer of funds to the recipient from the U.S. Treasury and the issuance or redemption of checks, warrants or payments by other means for program purposes by the recipient. To the extent that the provisions of the Cash Management Improvement Act (CMIA) (Pub. L. 101ï¿½09453) govern, payment methods of State ï¿½174ï¿½agencies, instrumentalities, and fiscal agents shall be consistent with CMIA Treasury-State Agreements or the CMIA default procedures codified at 31 CFR part 205, ``Withdrawal of Cash From the Treasury for Advances Under Federal Grant and Other Programs.''
I11(6) Written procedures for determining the reasonableness, allocability and allowability of costs in accordance with the provisions of the applicable Federal cost principles and the terms and conditions of the award.
I11(7) Accounting records including cost accounting records that are supported by source documentation.
I11(c) Where the Federal Government guarantees or insures the repayment of money borrowed by the recipient, the Federal USDA awarding agency, at its discretion, may require adequate bonding and insurance if the bonding and insurance requirements of the recipient are not deemed adequate to protect the interest of the Federal Government.
I11(d) The Federal awarding agency may require adequate fidelity bond coverage where the recipient lacks sufficient coverage to protect the Federal Government's interest.
I11(e) Where bonds are required in the situations described in paragraphs (c) and (d) of this section, the bonds shall be obtained from companies holding certificates of authority as acceptable sureties, as prescribed in 31 CFR part 223, ``Surety Companies Doing Business With the United States.''

I80ï¿½1A3019.22 
I89Payment.
I11(a) Payment methods shall minimize the time elapsing between the transfer of funds from the United States Treasury and the issuance or redemption of checks, warrants, or payment by other means by the recipients. Payment methods of State agencies or instrumentalities shall be consistent with Treasury-State CMIA agreements or default procedures codified at 31 CFR part 205.
I11(b) Recipients are to be paid in advance, provided they maintain or demonstrate the willingness to maintain: written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient, and financial management systems that meet the standards for fund control and accountability as established in ï¿½1A3019.21. Cash advances to a recipient organization shall be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the recipient organization in carrying out the purpose of the approved program or project. The timing and amount of cash advances shall be as close as is administratively feasible to the actual disbursements by the recipient organization for direct program or project costs and the proportionate share of any allowable indirect costs.
I11(c) Whenever possible, advances shall be consolidated to cover anticipated cash needs for all awards made by the Federal awarding agency to the recipient.
I11(1) Advance payment mechanisms include, but are not limited to, Treasury check and electronic funds transfer.
I11(2) Advance payment mechanisms are subject to 31 CFR part 205.
I11(3) Recipients shall be authorized to submit requests for advances and reimbursements at least monthly when electronic fund transfers are not used.
I11(d) Requests for Treasury check advance payment shall be submitted on SFï¿½09270, ``Request for Advance or Reimbursement,'' or other forms as may be authorized by OMB. This form is not to be used when Treasury check advance payments are made to the recipient automatically through the use of a predetermined payment schedule or if precluded by special Federal awarding agency instructions for electronic funds transfer.
I11(e) Reimbursement is the preferred method when the requirements in paragraph (b) of this section cannot be met. Federal awarding agencies may also use this method on any construction agreement, or if the major portion of the construction project is accomplished through private market financing or Federal loans, and the Federal assistance constitutes a minor portion of the project.
I11(1) When the reimbursement method is used, the Federal awarding agency shall make payment within 30 days after receipt of the billing, unless the billing is improper.
ï¿½175ï¿½I11(2) Recipients shall be authorized to submit request for reimbursement at least monthly when electronic funds transfers are not used.
I11(f) If a recipient cannot meet the criteria for advance payments and the Federal awarding agency has determined that reimbursement is not feasible because the recipient lacks sufficient working capital, the Federal awarding agency may provide cash on a working capital advance basis. Under this procedure, the Federal awarding agency shall advance cash to the recipient to cover its estimated disbursement needs for an initial period generally geared to the awardee's disbursing cycle. Thereafter, the Federal awarding agency shall reimburse the recipient for its actual cash disbursements. The working capital advance method of payment shall not be used for recipients unwilling or unable to provide timely advances to their subrecipient to meet the subrecipient's actual cash disbursements.
I11(g) To the extent available, recipients shall disburse funds from repayments to and interest earned on a revolving fund, program income, rebates, refunds, contract settlements, audit recoveries and interest earned on such funds before requesting additional cash payments.
I11(h) Unless otherwise required by statute, Federal awarding agencies shall not withhold payments for proper charges made by recipients at any time during the project period unless paragraphs (h)(1) and (h)(2) of this section apply.
I11(1) A recipient has failed to comply with the project objectives, the terms and conditions of the award, or Federal reporting requirements.
I11(2) The recipient or subrecipient is delinquent in a debt to the Untied States as defined in OMB Circular Aï¿½09129, ``Managing Federal Credit Programs.''
I11(3) Under such conditions, the Federal awarding agency may, upon reasonable notice, inform the recipient that payments shall not be made for obligations incurred after a specified date until the conditions are corrected or the indebtedness to the Federal Government is liquidated.
I11(i) Standards governing the use of banks and other institutions as depositories of funds advanced under awards are as follows.
I11(1) Except for situations described in paragraph (i)(2) of this section, Federal awarding agencies shall not require separate depository accounts for funds provided to a recipient or establish any eligibility requirements for depositories for funds provided to a recipient. However, recipients must be able to account for the receipt, obligation and expenditure of funds.
I11(2) Advances of Federal funds shall be deposited and maintained in insured accounts whenever possible.
I11(j) Consistent with the national goal of expanding the opportunities for women-owned and minority-owned business enterprises, recipients shall be encouraged to use women-owned and minority-owned banks (a bank which is owned at least 50 percent by women or minority group members).
I11(k) Recipients shall maintain advances of Federal funds in interest bearing accounts, unless paragraphs (k)(1), (k)(2) or (k)(3) of this section apply.
I11(1) The recipient receives less than $120,000 in Federal awards per year.
I11(2) The best reasonably available interest bearing account would not be expected to earn interest in excess of $250 per year on Federal cash balances.
I11(3) The depository would require an average or minimum balance so high that it would not be feasible within the expected Federal and non-Federal cash resources.
I11(l) For those entities where CMIA and its implementing regulations do not apply, interest earned on Federal advances deposited in interest bearing accounts shall be remitted annually to Department of Health and Human Services, Payment Management System, P.O. Box 6021, Rockville, MD 20852. Interest amounts up to $250 per year may be retained by the recipient for administrative expense. In keeping with the Electronic Funds Transfer rules, (31 CFR Part 206), interest should be remitted to the HHS Payment Management System through an electronic medium such as the FEDWIRE Deposit system. Recipients which do not have this capability should use a check. ï¿½176ï¿½State universities and hospitals shall comply with CMIA, as it pertains to interest. If an entity subject to CMIA uses its own funds to pay pre-award costs for discretionary awards without prior written approval from the Federal awarding agency, it waives its right to recover the interest under CMIA.
I11(m) Except as noted elsewhere in this part, only the following forms shall be authorized for the recipients in requesting advances and reimbursements. Federal agencies shall not require more than an original and two copies of these forms.
I11(1) SFï¿½09270, Request for Advance or Reimbursement. Each Federal awarding agency shall adopt the SFï¿½09270 as a standard form for all nonconstruction programs when electronic funds transfer or predetermined advance methods are not used. Federal awarding agencies, however, have the option of using this form for construction programs in lieu of the SFï¿½09271, ``Outlay Report and Request for Reimbursement for Construction Programs.''
I11(2) SFï¿½09271, Outlay Report and Request for Reimbursement for Construction Programs. Each Federal awarding agency shall adopt the SFï¿½09271 as the standard form to be used for requesting reimbursement for construction programs. However, a Federal awarding agency may substitute the SFï¿½09270 when the Federal awarding agency determines that it provides adequate information to meet Federal needs.

I80ï¿½1A3019.23 
I89Cost sharing or matching.
I11(a) All contributions, including cash and third party in-kind, shall be accepted as part of the recipient's cost sharing or matching when such contributions meet all of the following criteria.
I11(1) Are verifiable from the recipient's records.
I11(2) Are not included as contributions for any other federally-assisted project or program.
I11(3) Are necessary and reasonable for proper and efficient accomplishment of project or program objectives.
I11(4) Are allowable under the applicable costs principles.
I11(5) Are not paid by the Federal Government under another award, except where authorized by Federal statute to be used for cost sharing or matching.
I11(6) Are provided for in the approved budget when required by the Federal awarding agency.
I11(7) Conform to other provisions of this part, as applicable.
I11(b) Unrecovered indirect costs may be included as part of cost sharing or matching only with the prior approval of the Federal awarding agency.
I11(c) Values for recipient contributions of services and property shall be established in accordance with the applicable cost principles. If a Federal awarding agency authorizes recipients to donate buildings or land for construction/facilities acquisition projects or long-term use, the value of the donated property for cost sharing or matching shall be the lesser of paragraphs (c)(1) or (c)(2) of this section.
I11(1) The certified value of the remaining life of the property recorded in the recipient's accounting records at the time of donation.
I11(2) The current fair market value. However, when there is sufficient justification, the Federal awarding agency may approve the use of the current fair market value of the donated property, even if it exceeds the certified value at the time of donation to the project.
I11(d) Volunteer services furnished by professional and technical personnel, consultants, and other skilled and unskilled labor may be counted as cost sharing or matching if the service is an integral and necessary part of an approved project or program. Rates for volunteer services shall be consistent with those paid for similar work in the recipient's organization. In those instances in which the required skills are not found in the recipient organization, rates shall be consistent with those paid for similar work in the labor market in which the recipient competes for the kind of services involved. In either case, paid fringe benefits that are reasonable, allowable, and allocable may be included in the valuation.
I11(e) When an employer other than the recipient furnishes the services of an employee, these services shall be valued at the employee's regular rate of pay (plus an amount of fringe benefits ï¿½177ï¿½that are reasonable, allowable, and allocable, but exclusive of overhead costs), provided these services are in the same skill for which the employee is normally paid.
I11(f) Donated supplies may include such items as expendable equipment, office supplies, laboratory supplies or workshop and classroom supplies. Value assessed to donated supplies included in the cost sharing or matching share shall be reasonable and shall not exceed the fair market value of the property at the time of the donation.
I11(g) The method used for determining cost sharing or matching for donated equipment, buildings and land for which title passes to the recipient may differ according to the purpose of the award, if paragraphs (g)(1) or (g)(2) of this section apply.
I11(1) If the purpose of the award is to assist the recipient in the acquisition of equipment, buildings or land, the total value of the donated property may be claimed as cost sharing or matching.
I11(2) If the purpose of the award is to support activities that require the use of equipment, buildings or land, normally only depreciation or use charges for equipment and buildings may be made. However, the full value of equipment or other capital assets and fair rental charges for land may be allowed, provided that the Federal awarding agency has approved the charges.
I11(h) The value of donated property shall be determined in accordance with the usual accounting policies of the recipient, with the following qualifications.
I11(1) The value of donated land and buildings shall not exceed its fair market value at the time of donation to the recipient as established by an independent appraiser (e.g., certified real property appraiser or General Services Administration representative) and certified by a responsible official of the recipient.
I11(2) The value of donated equipment shall not exceed the fair market value of equipment of the same age and condition at the time of donation.
I11(3) The value of donated space shall not exceed the fair rental value of comparable space as established by an independent appraisal of comparable space and facilities in a privately-owned building in the same locality.
I11(4) The value of loaned equipment shall not exceed its fair rental value.
I11(5) The following requirements pertain to the recipient's supporting records for in-kind contributions from third parties.
I11(i) Volunteer services shall be documented and, to the extent feasible, supported by the same methods used by the recipient for its own employees.
I11(ii) The basis for determining the valuation of personal service, material, equipment, buildings and land shall be documented.

I80ï¿½1A3019.24 
I89Program income.
I11(a) Federal awarding agencies shall apply the standards set forth in this section in requiring recipient organizations to account for program income related to projects financed in whole or in part with Federal funds.
I11(b) Except as provided in paragraph (h) of this section, program income earned during the project period shall be retained by the recipient and, in accordance with Federal awarding agency regulations or the terms and conditions of the award, shall be used in one or more of the ways listed in the following.
I11(1) Added to funds committed to the project by the Federal awarding agency and recipient and used to further eligible project or program objectives.
I11(2) Used to finance the non-Federal share of the project or program.
I11(3) Deducted from the total project or program allowable cost in determining the net allowable costs on which the Federal share of costs is based.
I11(c) When an agency authorizes the disposition of program income as described in paragraphs (b)(1) or (b)(2) of this section, program income in excess of any limits stipulated shall be used in accordance with paragraph (b)(3) of this section.
I11(d) In the event that the Federal awarding agency does not specify in its regulations or the terms and conditions of the award how program income is to be used, paragraph (b)(3) of this section shall apply automatically to all projects or programs except research. For awards that support research, paragraph (b)(1) of this section ï¿½178ï¿½shall apply automatically unless the awarding agency indicates in the terms and conditions another alternative on the award or the recipient is subject to special award conditions, as indicated in ï¿½1A3019.14.
I11(e) Unless Federal awarding agency regulations or the terms and conditions of the award provide otherwise, recipients shall have no obligation to the Federal Government regarding program income earned after the end of the project period.
I11(f) If authorized by Federal awarding agency regulations or the terms and conditions of the award, costs incident to the generation of program income may be deducted from gross income to determine program income, provided these costs have not been charged to the award.
I11(g) Proceeds from the sale of property shall be handled in accordance with the requirements of the Property Standards (See ï¿½1A3019.30 through 3019.37).
I11(h) Unless Federal awarding agency regulations or the terms and condition of the award provide otherwise, recipients shall have no obligation to the Federal Government with respect to program income earned from license fees and royalties for copyrighted material, patents, patent applications, trademarks, and inventions produced under an award. However, Patent and Trademark Amendments (35 U.S.C. 18) apply to inventions made under an experimental, developmental, or research award.

I80ï¿½1A3019.25
I89Revision of budget and program plans.
I11(a) The budget plan is the financial expression of the project or program as approved during the award process. It may include either the Federal and non-Federal share, or only the Federal share, depending upon Federal awarding agency requirements. It shall be related to performance for program evaluation purposes whenever appropriate.
I11(b) Recipients are required to report deviations from budget and program plans, and request prior approvals for budget and program plan revisions, in accordance with this section.
I11(c) For nonconstruction awards, recipients shall request prior approvals from Federal awarding agencies for one or more of the following program or budget related reasons.
I11(1) Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval).
I11(2) Change in a key person specified in the application or award document.
I11(3) The absence for more than three months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator.
I11(4) The need for additional Federal funding.
I11(5) The transfer of amounts budgeted for indirect costs to absorb increases in direct costs, or vice versa, if approval is required by the Federal awarding agency.
I11(6) The inclusion, unless waived by the Federal awarding agency, of costs that require prior approval in accordance with OMB Circular Aï¿½0921, ``Cost Principles for Institutions of Higher Education,'' OMB Circular Aï¿½09122, ``Cost Principles for Non-Profit Organizations,'' or 45 CFR part 74 Appendix E, ``Principles for Determining Costs Applicable to Research and Development under Grants and Contracts with Hospitals,'' or 48 CFR part 31, ``Contract Cost Principles and Procedures,'' as applicable.
I11(7) The transfer of funds allotted for training allowances (direct payment to trainees) to other categories of expense.
I11(8) Unless described in the application and funded in the approved awards, the subaward, transfer or contracting out of any work under an award. This provision does not apply to the purchase of supplies, material, equipment or general support services.
I11(d) No other prior approval requirements for specific items may be imposed unless a deviation has been approved by OMB.
I11(e) Except for requirements listed in paragraphs (c)(1) and (c)(4) of this section, Federal awarding agencies are authorized, at their option, to waive cost-related and administrative prior written approvals required by this part and OMB Circulars Aï¿½0921 and Aï¿½09122. Such waivers may include authorizing recipients to do any one or more of the following.
ï¿½179ï¿½I11(1) Incur pre-award costs 90 calendar days prior to award or more than 90 calendar days with the prior approval of the Federal awarding agency. All pre-award costs are incurred at the recipient's risk (i.e., the Federal awarding agency is under no obligation to reimburse such costs if for any reason the recipient does not receive an award or if the award is less than anticipated and inadequate to cover such costs).
I11(2) Initiate a one-time extension of the expiration date of the award of up to 12 months unless one or more of the following conditions apply. For one-time extensions, the recipient must notify the Federal awarding agency in writing with the supporting reasons and revised expiration date at least 10 days before the expiration date specified in the award. This one-time extension may not be exercised merely for the purpose of using unobligated balances.
I11(i) The terms and conditions of award prohibit the extension.
I11(ii) The extension requires additional Federal funds.
I11(iii) The extension involves any change in the approved objectives or scope of the project.
I11(3) Carry forward unobligated balances to subsequent funding periods.
I11(4) For awards that support research, unless the Federal awarding agency provides otherwise in the award or in the agency's regulations, the prior approval requirements described in this paragraph (e) are automatically waived (i.e., recipients need not obtain such prior approvals) unless one of the conditions included in paragraph (e)(2) of this section applies.
I11(f) The Federal awarding agency may, at its option, restrict the transfer of funds among direct cost categories or programs, functions and activities for awards in which the Federal share of the project exceeds $100,000 and the cumulative amount of such transfers exceeds or is expected to exceed 10 percent of the total budget as last approved by the Federal awarding agency. No Federal awarding agency shall permit a transfer that would cause any Federal appropriation or part thereof to be used for purposes other than those consistent with the original intent of the appropriation.
I11(g) All other changes to nonconstruction budgets, except for the changes described in paragraph (j) of this section, do not require prior approval.
I11(h) For construction awards, recipients shall request prior written approval promptly from Federal awarding agencies for budget revisions whenever paragraphs (h)(1), (h)(2) or (h)(3) of this section apply.
I11(1) The revision results from changes in the scope or the objective of the project or program.
I11(2) The need arises for additional Federal funds to complete the project.
I11(3) A revision is desired which involves specific costs for which prior written approval requirements may be imposed consistent with applicable OMB cost principles listed in ï¿½1A3019.27.
I11(i) No other prior approval requirements for specific items may be imposed unless a deviation has been approved by OMB.
I11(j) When a Federal awarding agency makes an award that provides support for both construction and nonconstruction work, the Federal awarding agency may require the recipient to request prior approval from the Federal awarding agency before making any fund or budget transfers between the two types of work supported.
I11(k) For both construction and nonconstruction awards, Federal awarding agencies shall require recipients to notify the Federal awarding agency in writing promptly whenever the amount of Federal authorized funds is expected to exceed the needs of the recipient for the project period by more than $5000 or five percent of the Federal award, whichever is greater. This notification shall not be required if an application for additional funding is submitted for a continuation award.
I11(l) When requesting approval for budget revisions, recipients shall use the budget forms that were used in the application unless the Federal awarding agency indicates a letter of request suffices.
I11(m) Within 30 calendar days from the date of receipt of the request for budget revisions, Federal awarding agencies shall review the request and notify the recipient whether the budget revisions have been approved. If the revision is still under consideration at the end of ï¿½180ï¿½30 calendar days, the Federal awarding agency shall inform the recipient in writing of the date when the recipient may expect the decision.



I80ï¿½1A3019.26
I89Non-Federal audits.


I11(a) Recipients and subrecipients that are institutions of higher education or other non-profit organizations (including hospitals) shall be subject to the audit requirements contained in the Single Audit Act Amendments of 1996 (31 U.S.C. 7501ï¿½097507) and revised OMB Circular Aï¿½09133, ``Audits of States, Local Governments, and Non-Profit Organizations.''

I11(b) State and local governments shall be subject to the audit requirements contained in the Single Audit Act Amendments of 1996 (31 U.S.C. 7501ï¿½097507) and revised OMB Circular Aï¿½09133, ``Audits of States, Local Governments, and Non-Profit Organizations.''

I11(c) For-profit hospitals not covered by the audit provisions of revised OMB Circular Aï¿½09133 shall be subject to the audit requirements of the Federal awarding agencies.


I11(d) Commercial organizations shall be subject to the audit requirements of the Federal awarding agency or the prime recipient as incorporated into the award document.


I11(e) In USDA, revised OMB Circular Aï¿½09133 is implemented in 7 CFR part 3052, ``Audits of States, Local Governments, and Non-Profit Organizations.''

Q04I20[60 FR 44124, Aug. 24, 1995, as amended at 62 FR 45939, Aug. 29, 1997]



I80ï¿½1A3019.27
I89Allowable costs.
I11For each kind of recipient, there is a set of Federal principles for determining allowable costs. Allowability of costs shall be determined in accordance with the cost principles applicable to the entity incurring the costs. Thus, allowability of costs incurred by State, local or federally-recognized Indian tribal governments is determined in accordance with the provisions of OMB Circular Aï¿½0987, ``Cost Principles for State and Local Governments.'' The allowability of costs incurred by non-profit organizations is determined in accordance with the provisions of OMB Circular Aï¿½09122, ``Cost Principles for Non-Profit Organizations.'' The allowability of costs incurred by institutions of higher education is determined in accordance with the provisions of OMB Circular Aï¿½0921, ``Cost Principles for Educational Institutions.'' The allowability of costs incurred by hospitals is determined in accordance with the provisions of Appendix E of 45 CFR part 74, ``Principles for Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals.'' The allowability of costs incurred by commercial organizations and those non-profit organizations listed in Attachment C to Circular Aï¿½09122 is determined in accordance with the provisions of the Federal Acquisition Regulation (FAR) at 48 CFR part 31.

I80ï¿½1A3019.28
I89Period of availability of funds.
I11Where a funding period is specified, a recipient may charge to the grant only allowable costs resulting from obligations incurred during the funding period and any pre-award costs authorized by the Federal awarding agency.
I84Property Standards

I80ï¿½1A3019.30
I89Purpose of property standards.
I11Sections 3019.31 through 3019.37 set forth uniform standards governing management and disposition of property furnished by the Federal Government whose cost was charged to a project supported by a Federal award. Federal awarding agencies shall require recipients to observe these standards under awards and shall not impose additional requirements, unless specifically required by Federal statute. The recipient may use its own property management standards and procedures provided it observes the provisions of ï¿½1A3019.31 through 3019.37.

I80ï¿½1A3019.31
I89Insurance coverage.
I11Recipients shall, at a minimum, provide the equivalent insurance coverage for real property and equipment acquired with Federal funds as provided to property owned by the recipient. Federally-owned property need not be insured unless required by the terms and conditions of the award.

ï¿½181ï¿½I80ï¿½1A3019.32
I89Real property.
I11Each Federal awarding agency shall prescribe requirements for recipients concerning the use and disposition of real property acquired in whole or in part under awards. Unless otherwise provided by statute, such requirements, at a minimum, shall contain the following.
I11(a) Title to real property shall vest in the recipient subject to the condition that the recipient shall use the real property for the authorized purpose of the project as long as it is needed and shall not encumber the property without approval of the Federal awarding agency.
I11(b) The recipient shall obtain written approval by the Federal awarding agency for the use of real property in other federally-sponsored projects when the recipient determines that the property is no longer needed for the purpose of the original project. Use in other projects shall be limited to those under federally-sponsored projects (i.e., awards) or programs that have purposes consistent with those authorized for support by the Federal awarding agency.
I11(c) When the real property is no longer needed as provided in paragraphs (a) and (b), the recipient shall request disposition instructions from the Federal awarding agency or its successor Federal awarding agency. The Federal awarding agency shall observe one or more of the following disposition instructions.
I11(1) The recipient may be permitted to retain title without further obligation to the Federal Government after it compensates the Federal Government for that percentage of the current fair market value of the property attributable to the Federal participation in the project.
I11(2) The recipient may be directed to sell the property under guidelines provided by the Federal awarding agency and pay the Federal Government for that percentage of the current fair market value of the property attributable to the Federal participation in the project (after deducting actual and reasonable selling and fix-up expenses, if any, from the sales proceeds). When the recipient is authorized or required to sell the property, proper sales procedures shall be established that provide for competition to the extent practicable and result in the highest possible return.
I11(3) The recipient may be directed to transfer title to the property to the Federal Government or to an eligible third party provided that, in such cases, the recipient shall be entitled to compensation for its attributable percentage of the current fair market value of the property.

I80ï¿½1A3019.33 
I89Federally-owned and exempt property.
I11(a) T3Federally-owned property.G1T1 (1) Title to federally-owned property remains vested in the Federal Government. Recipients shall submit annually an inventory listing of federally-owned property in their custody to the Federal awarding agency. Upon completion of the award or when the property is no longer needed, the recipient shall report the property to the Federal awarding agency for further Federal agency utilization.
I11(2) If the Federal awarding agency has no further need for the property, it shall be declared excess and reported to the General Services Administration, unless the Federal awarding agency has statutory authority to dispose of the property by alternative methods (e.g., the authority provided by the Federal Technology Transfer Act (15 U.S.C. 3710(I)) to donate research equipment to educational and non-profit organizations in accordance with E.O. 12821, ``Improving Mathematics and Science Education in Support of the National Education Goals''). Appropriate instructions shall be issued to the recipient by the Federal awarding agency.
I11(b) T3Exempt property.G1T1 When statutory authority exists, the Federal awarding agency has the option to vest title to property acquired with Federal funds in the recipient without further obligation to the Federal Government and under conditions the Federal awarding agency considers appropriate. Such property is ``exempt property.'' Should a Federal awarding agency not establish conditions, title to exempt property upon acquisition shall vest in the recipient without further obligation to the Federal Government.

ï¿½182ï¿½I80ï¿½1A3019.34 
I89Equipment.
I11(a) Title to equipment acquired by a recipient with Federal funds shall vest in the recipient, subject to conditions of this section.
I11(b) The recipient shall not use equipment acquired with Federal funds to provide services to non-Federal outside organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statute, for as long as the Federal Government retains an interest in the equipment.
I11(c) The recipient shall use the equipment in the project or program for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds and shall not encumber the property without approval of the Federal awarding agency. When no longer needed for the original project or program, the recipient shall use the equipment in connection with its other federally-sponsored activities, in the following order of priority:
I11(1) Activities sponsored by the Federal awarding agency which funded the original project, then
I11(2) Activities sponsored by other Federal awarding agencies.
I11(d) During the time that equipment is used on the project or program for which it was acquired, the recipient shall make it available for use on other projects or programs if such other use will not interfere with the work on the project or program for which the equipment was originally acquired. First preference for such other use shall be given to other projects or programs sponsored by the Federal awarding agency that financed the equipment; second preference shall be given to projects or programs sponsored by other Federal awarding agencies. If the equipment is owned by the Federal Government, use on other activities not sponsored by the Federal Government shall be permissible if authorized by the Federal awarding agency. User charges shall be treated as program income.
I11(e) When acquiring replacement equipment, the recipient may use the equipment to be replaced as trade-in or sell the equipment and use the proceeds to offset the costs of the replacement equipment subject to the approval of the Federal awarding agency.
I11(f) The recipient's property management standards for equipment acquired with Federal funds and federally-owned equipment shall include all of the following.
I11(1) Equipment records shall be maintained accurately and shall include the following information.
I11(i) A description of the equipment.
I11(ii) Manufacturer's serial number, model number, Federal stock number, national stock number, or other identification number.
I11(iii) Source of the equipment, including the award number.
I11(iv) Whether title vests in the recipient or the Federal Government.
I11(v) Acquisition date (or date received, if the equipment was furnished by the Federal Government) and cost.
I11(vi) Information from which one can calculate the percentage of Federal participation in the cost of the equipment (not applicable to equipment furnished by the Federal Government).
I11(vii) Location and condition of the equipment and the date the information was reported.
I11(viii) Unit acquisition cost.
I11(ix) Ultimate disposition data, including date of disposal and sales price or the method used to determine current fair market value where a recipient compensates the Federal awarding agency for its share.
I11(2) Equipment owned by the Federal Government shall be identified to indicate Federal ownership.
I11(3) A physical inventory of equipment shall be taken and the results reconciled with the equipment records at least once every two years. Any differences between quantities determined by the physical inspection and those shown in the accounting records shall be investigated to determine the causes of the difference. The recipient shall, in connection with the inventory, verify the existence, current utilization, and continued need for the equipment.
I11(4) A control system shall be in effect to ensure adequate safeguards to prevent loss, damage, or theft of the equipment. Any loss, damage, or theft of equipment shall be investigated and fully documented; if the equipment was ï¿½183ï¿½owned by the Federal Government, the recipient shall promptly notify the Federal awarding agency.
I11(5) Adequate maintenance procedures shall be implemented to keep the equipment in good condition.
I11(6) Where the recipient is authorized or required to sell the equipment, proper sales procedures shall be established which provide for competition to the extent practicable and result in the highest possible return.
I11(g) When the recipient no longer needs the equipment, the equipment may be used for other activities in accordance with the following standards. For equipment with a current per unit fair market value of $5000 or more, the recipient may retain the equipment for other uses provided that compensation is made to the original Federal awarding agency or its successor. The amount of compensation shall be computed by applying the percentage of Federal participation in the cost of the original project or program to the current fair market value of the equipment. If the recipient has no need for the equipment, the recipient shall request disposition instructions from the Federal awarding agency. The Federal awarding agency shall determine whether the equipment can be used to meet the agency's requirements. If no requirement exists within that agency, the availability of the equipment shall be reported to the General Services Administration by the Federal awarding agency to determine whether a requirement for the equipment exists in other Federal agencies. The Federal awarding agency shall issue instructions to the recipient no later than 120 calendar days after the recipient's request and the following procedures shall govern.
I11(1) If so instructed or if disposition instructions are not issued within 120 calendar days after the recipient's request, the recipient shall sell the equipment and reimburse the Federal awarding agency an amount computed by applying to the sales proceeds the percentage of Federal participation in the cost of the original project or program. However, the recipient shall be permitted to deduct and retain from the Federal share $500 or ten percent of the proceeds, whichever is less, for the recipient's selling and handling expenses.
I11(2) If the recipient is instructed to ship the equipment elsewhere, the recipient shall be reimbursed by the Federal Government by an amount which is computed by applying the percentage of the recipient's participation in the cost of the original project or program to the current fair market value of the equipment, plus any reasonable shipping or interim storage costs incurred.
I11(3) If the recipient is instructed to otherwise dispose of the equipment, the recipient shall be reimbursed by the Federal awarding agency for such costs incurred in its disposition. 
I11(4) The Federal awarding agency may reserve the right to transfer the title to the Federal Government or to a third party named by the Federal Government when such third party is otherwise eligible under existing statutes. Such transfer shall be subject to the following standards.
I11(i) The equipment shall be appropriately identified in the award or otherwise made known to the recipient in writing.
I11(ii) The Federal awarding agency shall issue disposition instructions within 120 calendar days after receipt of a final inventory. The final inventory shall list all equipment acquired with grant funds and federally-owned equipment. If the Federal awarding agency fails to issue disposition instructions within the 120 calendar day period, the recipient shall apply the standards of this section, as appropriate.
I11(iii) When the Federal awarding agency exercises its right to take title, the equipment shall be subject to the provisions for federally-owned equipment.

I80ï¿½1A3019.35 
I89Supplies and other expendable property.
I11(a) Title to supplies and other expendable property shall vest in the recipient upon acquisition. If there is a residual inventory of unused supplies exceeding $5000 in total aggregate value upon termination or completion of the project or program and the supplies are not needed for any other federally-sponsored project or program, ï¿½184ï¿½the recipient shall retain the supplies for use on non-Federal sponsored activities or sell them, but shall, in either case, compensate the Federal Government for its share. The amount of compensation shall be computed in the same manner as for equipment. 
I11(b) The recipient shall not use supplies acquired with Federal funds to provide services to non-Federal outside organizations for a fee that is less than private companies charge for equivalent services, unless specifically authorized by Federal statute as long as the Federal Government retains an interest in the supplies.

I80ï¿½1A3019.36 
I89Intangible property.
I11(a) The recipient may copyright any work that is subject to copyright and was developed, or for which ownership was purchased, under an award. The Federal awarding agency(ies) reserve a royalty-free, nonexclusive and irrevocable right to reproduce, publish, or otherwise use the work for Federal purposes, and to authorize others to do so.
I11(b) Recipients are subject to applicable regulations governing patents and inventions, including government-wide regulations issued by the Department of Commerce at 37 CFR part 401, ``Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements.''
I11(c) Unless waived by the Federal awarding agency, the Federal Government has the right to:
I11(1) Obtain, reproduce, publish or otherwise use the date first produced under an award, and 
I11(2) Authorize others to receive, reproduce, publish, or otherwise use such data for Federal purposes.
I11(d) Title to intangible property and debt instruments acquired under an award or subaward vests upon acquisition in the recipient. The recipient shall use that property for the originally-authorized purpose, and the recipient shall not encumber the property without approval of the Federal awarding agency. When no longer needed for the originally authorized purpose, disposition of the intangible property shall occur in accordance with the provisions of ï¿½1A3019.34(g).

I80ï¿½1A3019.37 
I89Property trust relationship.
I11Real property, equipment, intangible property and debt instruments that are acquired or improved with Federal funds shall be held in trust by the recipient as trustee for the beneficiaries of the project or program under which the property was acquired or improved. Agencies may require recipients to record liens or other appropriate notices of record to indicate that personal or real property has been acquired or improved with Federal funds and that use and disposition conditions apply to the property.
I84Procurement Standards

I80ï¿½1A3019.40 
I89Purpose of procurement standards.
I11Sections 3019.41 through 3019.48 set forth standards for use by recipients in establishing procedures for the procurement of supplies and other expendable property, equipment, real property and other services with Federal funds. These standards are furnished to ensure that such materials and services are obtained in an effective manner and in compliance with the provisions of applicable Federal statutes and executive orders. No additional procurement standards or requirements shall be imposed by the Federal awarding agencies upon recipients, unless specifically required by Federal statute or executive order or approved by OMB.

I80ï¿½1A3019.41 
I89Recipient responsibilities.
I11The standards contained in this section do not relieve the recipient of the contractual responsibilities arising under its contract(s). The recipient is the responsible authority, without recourse to the Federal awarding agency, regarding the settlement and satisfaction of all contractual and administrative issues arising out of procurements entered into in support of an award or other agreement. This includes disputes, claims, protests of award, source evaluation or other matters of a contractual nature. Matters concerning violation of statute are to be referred to such Federal, State or local authority as may have proper jurisdiction. 

ï¿½185ï¿½I80ï¿½1A3019.42 
I89Codes of conduct.
I11The recipient shall maintain written standards of conduct governing the performance of its employees engaged in the award and administration of contracts. No employee, officer, or agent shall participate in the selection, award, or administration of a contract supported by Federal funds if a real or apparent conflict of interest would be involved. Such a conflict would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in the firm selected for an award. The officers, employees, and agents of the recipient shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors, or parties to subagreements. However, recipients may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct shall provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the recipient.

I80ï¿½1A3019.43 
I89Competition.
I11All procurement transactions shall be conducted in a manner to provide, to the maximum extent practical, open and free competition. The recipient shall be alert to organizational conflicts of interests as well as noncompetitive practices among contractors that may restrict or eliminate competition or otherwise restrain trade. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, invitations for bids and/or requests for proposals shall be excluded from competing for such procurements. Awards shall be made to the bidder or offeror whose bid or offer is responsive to the solicitation and is most advantageous to the recipient, price, quality and other factors considered. Solicitations shall clearly set forth all requirements that the bidder or offeror shall fulfill in order for the bid or offer to be evaluated by the recipient. Any and all bids or offers may be rejected when it is in the recipient's interest to do so.

I80ï¿½1A3019.44 
I89Procurement procedures.
I11(a) All recipients shall establish written procurement procedures. These procedures shall provide for, at a minimum, that paragraphs (a)(1), (a)(2), and (a)(3) of this section apply.
I11(1) Recipients avoid purchasing unnecessary items.
I11(2) Where appropriate, an analysis is made of lease and purchase alternatives to determine which would be the most economical and practical procurement for the Federal Government.
I11(3) Solicitations for goods and services provide for all of the following:
I11(i) A clear and accurate description of the technical requirements for the material, product or service to be procured. In competitive procurements, such a description shall not contain features which unduly restrict competition.
I11(ii) Requirements which the bidder/offeror must fulfill and all other factors to be used in evaluating bids or proposals.
I11(iii) A description, whenever practicable, of technical requirements in terms of functions to be performed or performance required, including the range of acceptable characteristics or minimum acceptable standards.
I11(iv) The specific features of ``brand name or equal'' descriptions that bidders are required to meet when such items are included in the solicitation.
I11(v) The acceptance, to the extent practicable and economically feasible, of products and services dimensioned in the metric system of measurement.
I11(vi) Preference, to the extent practicable and economically feasible, for products and services that conserve natural resources and protect the environment and are energy efficient.
I11(b) Positive efforts shall be made by recipients to utilize small businesses, minority-owned firms, and women's business enterprises, whenever possible. Recipients of Federal awards shall take all of the following steps to further this goal.
ï¿½186ï¿½I11(1) Ensure that small businesses, minority-owned firms, and women's business enterprises are used to the fullest extent practicable.
I11(2) Make information on forthcoming opportunities available and arrange time frames for purchases and contracts to encourage and facilitate participation by small businesses, minority-owned firms, and women's business enterprises.
I11(3) Consider in the contract process whether firms competing for larger contracts intend to subcontract with small businesses, minority-owned firms, and women's business enterprises.
I11(4) Encourage contracting with consortiums of small businesses, minority-owned firms and women's business enterprises when a contract is too large for one of these firms to handle individually.
I11(5) Use the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Department of Commerce's Minority Business Development Agency in the solicitation and utilization of small businesses, minority-owned firms and women's business enterprises.
I11(c) The type of procuring instruments used (e.g., fixed price contracts, cost reimbursable contracts, purchase orders, and incentive contracts) shall be determined by the recipient but shall be appropriate for the particular procurement and for promoting the best interest of the program or project involved. The ``cost-plus-a-percentage-of-cost'' or ``percentage of construction cost'' methods of contracting shall not be used.
I11(d) Contracts shall be made only with responsible contractors who possess the potential ability to perform successfully under the term and conditions of the proposed procurement. Consideration shall be given to such matters as contractor integrity, record of past performance, financial and technical resources or accessibility to other necessary resources. In certain circumstances, contracts with certain parties are restricted by agencies' implementation of E.O.s 12549 and 12689, ``Debarment and Suspension.''
I11(e) Recipients shall, on request, make available for the Federal awarding agency, pre-award review and procurement documents, such as request for proposals or invitations for bids, independent cost estimates, etc., when any of the following conditions apply.
I11(1) A recipient's procurement procedures or operation fails to comply with the procurement standards in the Federal awarding agency's implementation of this part.
I11(2) The procurement is expected to exceed the small purchase threshold fixed at 41 U.S.C. 403(11) (currently $25,000) and is to be awarded without competition or only one bid or offer is received in response to a solicitation.
I11(3) The procurement, which is expected to exceed the small purchase threshold, specifies a ``brand name'' product.
I11(4) The proposed award over the small purchase threshold is to be awarded to other than the apparent low bidder under a sealed bid procurement.
I11(5) A proposed contract modification changes the scope of a contract or increases the contract amount by more than the amount of the small purchase threshold.

I80ï¿½1A3019.45
I89Cost and price analysis.
I11Some form of cost or price analysis shall be made and documented in the procurement files in connection with every procurement action. Price analysis may be accomplished in various ways, including the comparison of price quotations submitted, market prices and similar indicia, together with discounts. Cost analysis is the review and evaluation of each element of cost to determine reasonableness, allocability and allowability.

I80ï¿½1A3019.46
I89Procurement records.
I11Procurement records and files for purchases in excess of the small purchase threshold shall include the following at a minimum:
I11(a) Basis for contractor selection,
I11(b) Justification for lack of competition bids or offers are not obtained, and
I11(c) Basis for award cost or price.

I80ï¿½1A3019.47
I89Contract administration.
I11A system for contract administration shall be maintained to ensure contractor conformance with the terms, ï¿½187ï¿½conditions and specifications of the contract and to ensure adequate and timely follow up of all purchases. Recipients shall evaluate contractor performance and document, as appropriate, whether contractors have met the terms, conditions and specifications of the contract.

I80ï¿½1A3019.48
I89Contract provisions.
I11The recipient shall include, in addition to provisions to define a sound and complete agreement, the following provisions in all contracts. The following provisions shall also be applied to subcontracts.
I11(a) Contracts in excess of the small purchase threshold shall contain contractual provisions or conditions that allow for administrative, contractual, or legal remedies in instances in which a contractor violates or breaches the contract terms, and provide for such remedial actions as may be appropriate.
I11(b) All contracts in excess of the small purchase threshold shall contain suitable provisions for termination by the recipient, including the manner by which termination shall be effected and the basis for settlement. In addition, such contracts shall describe conditions under which the contract may be terminated for default as well as conditions where the contract may be terminated because of circumstances beyond the control of the contractor.
I11(c) Except as otherwise required by statute, an award that requires the contracting (or subcontracting) for construction or facility improvements shall provide for the recipient to follow its own requirements relating to bid guarantees, performance bonds, and payment bonds unless the construction contract or subcontract exceeds $100,00. For those contracts or subcontracts exceeding $100,000, the Federal awarding agency may accept the bonding policy and requirements of the recipient, provided the Federal awarding agency has made a determination that the Federal Government's interest is adequately protected. If such a determination has not been made, the minimum requirements shall be as follows.
I11(1) A bid guarantee from each bidder equivalent to five percent of the bid price. The ``bid guarantee'' shall consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder shall, upon acceptance of his bid, execute such contractual documents as may be required within the time specified.
I11(2) A performance bond on the part of the contractor for 100 percent of the contract price. A ``performance bond'' is one executed in connection with a contract to secure fulfillment of all the contractor's obligations under such contract.
I11(3) A payment bond on the part of the contractor for 100 percent of the contract price. A ``payment bond'' is one executed in connection with a contract to assure payment as required by statute of all persons supplying labor and material in the execution of the work provided for in the contract.
I11(4) Where bonds are required in the situations described herein, the bonds shall be obtained from companies holding certificates of authority as acceptable sureties pursuant to 31 CFR part 223, ``Surety Companies Doing Business with the United States.''
I11(d) All negotiated contracts (except those for less than the small purchase threshold) awarded by recipients shall include a provision to the effect that the recipient, the Federal awarding agency, the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any books, documents, papers and records of the contractor which are directly pertinent to a specific program for the purpose of making audits, examinations, excerpts and transcriptions.
I11(e) All contracts, including small purchases, awarded by recipients and their contractors shall contain the procurement provisions of Appendix A to this part, as applicable.
I84Reports and Records 

I80ï¿½1A3019.50 
I89Purpose of reports and records. 
I11Sections 3019.51 through 3019.53 set forth the procedures for monitoring and reporting on the recipient's financial and program performance and the necessary standard reporting forms. ï¿½188ï¿½They also set forth record retention requirements.

I80ï¿½1A3019.51 
I89Monitoring and reporting program performance.
I11(a) Recipients are responsible for managing and monitoring each project, program, subaward, function or activity supported by the award. Recipients shall monitor subawards to ensure subrecipients have met the audit requirements as delineated in Section 3019.26.
I11(b) The Federal awarding agency shall prescribe the frequency with which the performance reports shall be submitted. Except as provided in paragraph (f) of this section, performance reports shall not be required more frequently than quarterly or, less frequently than annually. Annual reports shall be due 90 calendar days after the grant year; quarterly or semi-annual reports shall be due 30 days after the reporting period. The Federal awarding agency may require annual reports before the anniversary dates of multiple years awards in lieu of these requirements. The final performance reports are due 90 calendar days after the expiration or termination of the award.
I11(c) If inappropriate, a final technical or performance report shall not be required after completion of the project.
I11(d) When required, performance reports shall generally contain, for each award, brief information on each of the following.
I11(1) A comparison of actual accomplishments with the goals and objectives established for the period, the findings of the investigator, or both. Whenever appropriate and the output of programs or projects can be readily quantified, such quantitative data should be related to cost data for computation of unit costs. 
I11(2) Reasons why established goals were not met, if appropriate.
I11(3) Other pertinent information including, when appropriate, analysis and explanation of cost overruns or high unit costs.
I11(e) Recipients shall not be required to submit more than the original and two copies of performance reports.
I11(f) Recipients shall immediately notify the Federal awarding agency of developments that have a significant impact on the award-supported activities. Also, notification shall be given in the case of problems, delays, or adverse conditions which materially impair the ability to meet the objectives of the award. This notification shall include a statement of the action taken or contemplated, and any assistance needed to resolve the situation.
I11(g) Federal awarding agencies may make site visits, as needed.
I11(h) Federal awarding agencies shall comply with clearance requirements of 5 CFR part 1320 when requesting performance data from recipients.

I80ï¿½1A3019.52
I89Financial reporting. 
I11(a) The following forms or such other forms as may be approved by OMB are authorized for obtaining financial information from recipients.
I11(1) SFï¿½09269 or SFï¿½09269A, Financial Status Report.
I11(i) Each Federal awarding agency shall require recipients to use the SFï¿½09269 or SFï¿½09269A to report the status of funds for all nonconstruction projects or programs. A Federal awarding agency may, however, have the option of not requiring the SFï¿½09269 or SFï¿½09269A when the SFï¿½09270, Request for Advance or Reimbursement, or SFï¿½09272, Report of Federal Cash Transactions, is determined to provided adequate information to meet its needs, except that a final SFï¿½09269 or SFï¿½09269A shall be required at the completion of the project when the SFï¿½09270 is used only for advances.
I11(ii) The Federal awarding agency shall prescribe whether the report shall be on a cash or accrual basis. If the Federal awarding agency requires accrual information and the recipient's accounting records are not normally kept on the accrual basis, the recipient shall not be required to convert its accounting system, but shall develop such accrual information through best estimates based on an analysis of the documentation on hand.
I11(iii) The Federal awarding agency shall determine the frequency of the Financial Status Report for each project or program, considering the size and complexity of the particular project or program. However, the report shall not be required more frequently than quarterly or less frequently than annually. A final report ï¿½189ï¿½shall be required at the completion of the agreement.
I11(iv) The Federal awarding agency shall require recipients to submit the SFï¿½09269 or SFï¿½09269A (an original and no more than two copies no later than 30 days after the end of each specified reporting period for quarterly and semi- 
Q02I10annual reports, and 90 calendar days for annual and final reports. Extensions of reporting due dates may be approved by the Federal awarding agency upon request of the recipient.
I11(2) SFï¿½09272, Report of Federal Cash Transactions.
I11(i) When funds are advanced to recipients the Federal awarding agency shall require each recipient to submit the SFï¿½09272 and, when necessary, its continuation sheet, SFï¿½09272a. The Federal awarding agency shall use this report to monitor cash advanced to recipients and to obtain disbursement information for each agreement with the recipients.
I11(ii) Federal awarding agencies may require forecasts of Federal cash requirements in the ``Remarks'' section of the report.
I11(iii) When practical and deemed necessary, Federal awarding agencies may require recipients to report in the ``Remarks'' section the amount of cash advances received in excess of three days. Recipients shall provide short narrative explanations of actions taken to reduce the excess balances.
I11(iv) Recipients shall be required to submit not more than the original and two copies of the SFï¿½09272 15 calendar days following the end of each quarter. The Federal awarding agencies may require a monthly report from those recipients receiving advances totaling $1 million or more per year.
I11(v) Federal awarding agencies may waive the requirement for submission of the SFï¿½09272 for any one of the following reasons:
I11(A) When monthly advances do not exceed $25,000 per recipient, provided that such advances are monitored through other forms contained in this section;
I11(B) If, in the Federal awarding agency's opinion, the recipient's accounting controls are adequate to minimize excessive Federal advances; or
I11(C) When the electronic payment mechanisms provide adequate data.
I11(b) When the Federal awarding agency needs additional information or more frequent reports, the following shall be observed.
I11(1) When additional information is needed to comply with legislative requirements, Federal awarding agencies shall issue instructions to require recipients to submit such information under the ``Remarks'' section of the reports.
I11(2) When a Federal awarding agency determines that a recipient's accounting system does not meet the standards in ï¿½1A3019.21, additional pertinent information to further monitor awards may be obtained upon written notice to the recipient until such time as the system is brought up to standard. The Federal awarding agency, in obtaining this information, shall comply with report clearance requirements of 5 CFR part 1320.
I11(3) Federal awarding agencies are encouraged to shade out any line item on any report if not necessary.
I11(4) Federal awarding agencies may accept the identical information from the recipients in machine readable format or computer printouts or electronic outputs in lieu of prescribed formats.
I11(5) Federal awarding agencies may provide computer or electronic outputs to recipients when such expedites or contributes to the accuracy of reporting.

I80ï¿½1A3019.53 
I89Retention and access requirements for records.
I11(a) This section sets forth requirements for record retention and access to records for awards to recipients. Federal awarding agencies shall not impose any other record retention or access requirements upon recipients. 
I11(b) Financial records, supporting documents, statistical records, and all other records pertinent to an award shall be retained for a period of three years from the date of submission of the final expenditure report or, for awards that are renewed quarterly or ï¿½190ï¿½annually, from the date of the submission of the quarterly or annual financial report, as authorized by the Federal awarding agency. The only exceptions are the following.
I11(1) If any litigation, claim, or audit is started before the expiration of the 3-year period, the records shall be retained until all litigation, claims or audit findings involving the records have been resolved and final action taken.
I11(2) Records for real property and equipment acquired with Federal funds shall be retained for 3 years after final disposition.
I11(3) When records are transferred to or maintained by the Federal awarding agency, the 3-year retention requirement is not applicable to the recipient.
I11(4) Indirect cost rate proposals, cost allocations plans, etc. as specified in paragraph (g) of this section.
I11(c) Copies of original records may be substituted for the original records if authorized by the Federal awarding agency.
I11(d) The Federal awarding agency shall request transfer of certain records to its custody from recipients when it determines that the records possess long term retention value. However, in order to avoid duplicate recordkeeping, a Federal awarding agency may make arrangements for recipients to retain any records that are continuously needed for joint use.
I11(e) The Federal awarding agency, the Inspector General, Comptroller General of the United States, or any of their duly authorized representatives, have the right of timely and unrestricted access to any books, documents, papers, or other records of recipients that are pertinent to the awards, in order to make audits, examinations, excerpts, transcripts and copies of such documents. This right also includes timely and reasonable access to a recipient's personnel for the purpose of interview and discussion related to such documents. The rights of access in this paragraph are not limited to the required retention period, but shall last as long as records are retained.
I11(f) Unless required by statute, no Federal awarding agency shall place restrictions on receipts that limit public access to the records of recipients that are pertinent to an award, except when the Federal awarding agency can demonstrate that such records shall be kept confidential and would have been exempted from disclosure pursuant to the Freedom of Information Act (5 U.S.C. 552) if the records had belonged to the Federal awarding agency.
I11(g) Indirect cost rate proposals, cost allocations plans, etc. Paragraphs (g)(1) and (g)(2) of this section apply to the following types of documents, and their supporting records: indirect cost rate computations or proposals, cost allocation plans, and any similar accounting computations of the rate at which a particular group of costs is chargeable (such as computer usage chargeback rates or composite fringe benefit rates).
I11(1) If submitted for negotiation. If the recipient submits to the Federal awarding agency or the subrecipient submits to the recipient the proposal, plan, or other computation to form the basis for negotiation of the rate, then the 3-year retention period for its supporting records starts on the date of such submission.
I11(2) If not submitted for negotiation. If the recipient is not required to submit to the Federal awarding agency or the subrecipient is not required to submit to the recipient the proposal, plan, or other computation for negotiation purposes, then the 3-year retention period for the proposal, plan, or other computation and its supporting records starts at the end of the fiscal year (or other accounting period) covered by the proposal, plan, or other computation.
I84Termination and Enforcement

I80ï¿½1A3019.60 
I89Purpose of termination and enforcement.
I11Sections 3019.61 and 3019.62 set forth uniform suspension, termination and enforcement procedures.

I80ï¿½1A3019.61 
I89Termination.
I11(a) Awards may be terminated in whole or in part only if paragraphs (a)(1), (a)(2) or (a)(3) of this section apply.
ï¿½191ï¿½I11(1) By the Federal awarding agency, if a recipient materially fails to comply with the terms and conditions of an award.
I11(2) By the Federal awarding agency with the consent of the recipient, in which case 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.
I11(3) By the recipient upon sending to the Federal awarding agency written notification setting forth the reasons for such termination, the effective date, and, in the case of partial termination, the portion to be terminated. However, if the Federal awarding agency determines in the case of partial termination that the reduced or modified portion of the grant will not accomplish the purposes for which the grant was made, it may terminate the grant in its entirety under either paragraphs (a)(1) or (2) of this section.
I11(b) If costs are allowed under an award, the responsibilities of the recipient referred to in ï¿½1A3019.71(a), including those for property management as applicable, shall be considered in the termination of the award, and provision shall be made for continuing responsibilities of the recipient after termination, as appropriate.

I80ï¿½1A3019.62 
I89Enforcement.
I11(a) T3Remedies for noncompliance.G1T1 If a recipient materially fails to comply with the terms and conditions of an award, whether stated in a Federal statute, regulation, assurance, application, or notice of award, the Federal awarding agency may, in addition to imposing any of the special conditions outlined in ï¿½1A3019.14, take one or more of the following actions, as appropriate in the circumstances.
I11(1) Temporarily withhold cash payments pending correction of the deficiency by the recipient or more severe enforcement action by the Federal awarding agency.
I11(2) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance.
I11(3) Wholly or partly suspend or terminate the current award.
I11(4) Withhold further awards for the project or program.
I11(5) Take other remedies that may be legally available.
I11(b) T3Hearings and appeals.G1T1 In taking an enforcement action, the awarding agency shall provide the recipient an opportunity for hearing, appeal, or other administrative proceeding to which the recipient is entitled under any statute or regulation applicable to the action involved.
I11(c) T3Effects of suspension and termination.G1T1 Costs of a recipient resulting from obligations incurred by the recipient during a suspension or after termination of an award are not allowable unless the awarding agency expressly authorizes them in the notice of suspension of termination or subsequently. Other recipient costs during suspension or after termination which are necessary and not reasonably avoidable are allowable if paragraphs (c)(1) and (c)(2) of this section apply.
I11(1) The costs result from obligations which were properly incurred by the recipient before the effective date of suspension or termination, are not in anticipation of it, and in the case of a termination, are noncancellable.
I11(2) The costs would be allowable if the award were not suspended or expired normally at the end of the funding period in which the termination takes effect.
I11(d) T3Relationship to debarment and suspension.G1T1 The enforcement remedies identified in this section, including suspension and termination, do not preclude a recipient from being subject to debarment and suspension under E.O.s 12549 and 12689 and the Federal awarding agency implementing regulations (see ï¿½1A3019.13).

I56Subpart D_After-the-Award Requirements

I80ï¿½1A3019.70 
I89Purpose.
I11Sections 3019.71 through 3019.73 contain closeout procedures and other procedures for subsequent disallowances and adjustments.

ï¿½192ï¿½I80ï¿½1A3019.71 
I89Closeout procedures.
I11(a) Recipients shall submit, within 90 calendar days after the date of completion of the award, all financial, performance, and other reports as required by the terms and conditions of the award. The Federal awarding agency may approve extensions when requested by the recipient.
I11(b) Unless the Federal awarding agency authorizes an extension, a recipient shall liquidate all obligations incurred under the award not later than 90 calendar days after the funding period or the date of completion as specified in the terms and conditions of the award or in agency implementing instructions.
I11(c) The Federal awarding agency shall make prompt payments to a recipient for allowable reimbursable costs under the award being closed out.
I11(d) The recipient shall promptly refund any balances of unobligated cash that the Federal awarding agency has advanced or paid and that is not authorized to be retained by the recipient for use in other projects. OMB Circular Aï¿½09129 governs unreturned amounts that become delinquent debts.
I11(e) When authorized by the terms and conditions of the award, the Federal awarding agency shall make a settlement for any upward or downward adjustments to the Federal share of costs after closeout reports are received.
I11(f) The recipient shall account for any real and personal property acquired with Federal funds or received from the Federal Government in accordance with ï¿½1A3019.31 through 3019.37.
I11(g) In the event a final audit has not been performed prior to the closeout of an award, the Federal awarding agency shall retain the right to recover an appropriate amount after fully considering the recommendations on disallowed costs resulting from the final audit.

I80ï¿½1A3019.72 
I89Subsequent adjustments and continuing responsibilities.
I11(a) The closeout of an award does not affect any of the following.
I11(1) The right of the Federal awarding agency to disallow costs and recover funds on the basis of a later audit or other review.
I11(2) The obligation of the recipient to return any funds due as a result of later refunds, corrections, or other transactions.
I11(3) Audit requirements in ï¿½1A3019.26.
I11(4) Property management requirements in ï¿½1A3019.31 through 3019.37.
I11(5) Records retention as required in ï¿½1A3019.53.
I11(b) After closeout of an award, a relationship created under an award may be modified or ended in whole or in part with the consent of the Federal awarding agency and the recipient, provided the responsibilities of the recipient referred to in ï¿½1A3019.73(a), including those for property management as applicable, are considered and provisions made for continuing responsibilities of the recipient, as appropriate.

I80ï¿½1A3019.73 
I89Collection of amounts due.
I11(a) Any funds paid to a recipient in excess of the amount to which the recipient is finally determined to be entitled under the terms and conditions of the award constitute a debt to the Federal Government. If not paid within a reasonable period after the demand for payment, the Federal awarding agency may reduce the debt by:
I11(1) Making an administrative offset against other requests for reimbursements.
I11(2) Withholding advance payments otherwise due to the recipient.
I11(3) Taking other action permitted by statute.
I11(b) Except as otherwise provided by law, the Federal awarding agency shall charge interest on an overdue debt in accordance with 4 CFR Chapter II, ``Federal Claims Collection Standards.''
S8002
I95Pt. 3019, App. A
I85Appendix A to Part T13019_G1T5T4Contract ProvisionsG1T5
I21All contracts, awarded by a recipient including small purchases, shall contain the following provisions as applicable:
I211. T3Equal Employment OpportunityG1T1_All contracts shall contain a provision requiring compliance with E.O. 11246, ``Equal Employment Opportunity,'' as amended by E.O. 11375, ``Amending Executive Order 11246 Relating to Equal Employment Opportunity,'' and as supplemented by regulations at 41 CFR part 60, ``Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor.''
ï¿½193ï¿½I212. T3Copeland ``Anti-Kickback'' Act (18 U.S.C. 874 and 40 U.S.C. 276c)G1T1_All contracts and subgrants in excess of $2000 for construction or repair awarded by recipients and subrecipients shall include a provision for compliance with the Copeland ``Anti-Kickback'' Act (18 U.S.C. 874), as supplemented by Department of Labor regulations (29 CFR part 3, ``Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States''). The Act provides that each contractor or subrecipient shall be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he is otherwise entitled. The recipient shall report all suspected or reported violations to the Federal awarding agency.
I213. T3Davis-Bacon Act, as amended (40 U.S.C. 276a to aï¿½097)G1T1_When required by Federal program legislation, all construction contracts awarded by the recipients and subrecipients of more than $2000 shall include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 276a to aï¿½097) and as supplemented by Department of Labor regulations (29 CFR part 5, ``Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction''). Under this Act, contractors shall be required to pay wages to laborers and mechanics at a rate not less than the minimum wages specified in a wage determination made by the Secretary of Labor. In addition, contractors shall be required to pay wages not less than once a week. The recipient shall place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation and the award of a contract shall be conditioned upon the acceptance of the wage determination. The recipient shall report all suspected or reported violations to the Federal awarding agency.
I214. T3Contract Work Hours and Safety Standards Act (40 U.S.C. 327ï¿½09333)G1T1_Where applicable, all contracts awarded by recipients in excess of $2000 for construction contracts and in excess of $2500 for other contracts that involve the employment of mechanics or laborers shall include a provision for compliance with Sections 102 and 107 of the Contract Work Hours and Safety Standards Act (40 U.S.C. 327ï¿½09333), as supplemented by Department of Labor regulations (29 CFR part 5). Under Section 102 of the Act, each contractor shall be required to compute the wages of every mechanic and laborer on the basis of a standard work week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than 1\1/2\ times the basic rate of pay for all hours worked in excess of 40 hours in the work week. Section 107 of the Act is applicable to construction work and provides that no laborer or mechanic shall be required to work in surroundings or under working conditions which are unsanitary, hazardous or dangerous. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.
I215. T3Rights to Inventions Made Under a Contract or AgreementG1T1_Contracts or agreements for the performance of experimental, developmental, or research work shall provide for the rights of the Federal Government and the recipient in any resulting invention in accordance with 37 CFR part 401, ``Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements,'' and any implementing regulations issued by the awarding agency.
I216. T3Clean Air Act (42 U.S.C. 7401 et. seq.) and the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.G1T1), as amended_Contracts and subgrants of amounts in excess of $100,000 shall contain a provision that requires the recipient to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401 T3et seq.G1T1) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251 T3et seq.G1T1). Violations shall be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency (EPA).
I217. T3Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)G1T1_Contractors who apply or bid for an award of $100,000 or more shall file the required certification. Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award covered by 31 U.S.C. 1352. Each tier shall also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up to the recipient.
I218. T3Debarment and Suspension (E.O.s 12549 and 12689)G1T1_All parties doing business with the Department of Agriculture should consult the Department's regulations for debarment and suspension found at 7 CFR 3017. No contract shall be made to parties listed on the General Services Administration's List of Parties Excluded from Federal Procurement or Nonprocurement Programs in accordance with E.O.s 12549 and 12689, ``Debarment and Suspension.'' This list contains the names of parties debarred, suspended, or otherwise excluded by agencies, and contractors declared ineligible under statutory or regulatory authority other than E.O. 12549. Contractors with awards that exceed the small ï¿½194ï¿½purchase threshold shall provide the required certification regarding its exclusion status and that of its principal employees.

S8010
I95Pt. 3052
I52PART 3052_AUDITS OF STATES, LOCAL GOVERNMENTS, AND NON-PROFIT ORGANIZATIONS 


I86Subpart A_General 
S8006I18Sec. 
S8010I263052.100Purpose. 
I263052.105Definitions. 

I86Subpart B_Audits 

I263052.200Audit requirements. 
I263052.205Basis for determining Federal awards expended. 
I263052.210Subrecipient and vendor determinations. 
I263052.215Relation to other audit requirements. 
I263052.220Frequency of audits. 
I263052.225Sanctions. 
I263052.230Audit costs. 
I263052.235Program-specific audits. 

I86Subpart C_Auditees 

I263052.300Auditee responsibilities. 
I263052.305Auditor selection. 
I263052.310Financial statements. 
I263052.315Audit findings follow-up. 
I263052.320Report submission. 

I86Subpart D_Federal Agencies and Pass-Through Entities

I263052.400Responsibilities.
I263052.405Management decision.

I86Subpart E_Auditors 

I263052.500Scope of audit.
I263052.505Audit reporting.
I263052.510Audit findings.
I263052.515Audit working papers.
I263052.520Major program determination.
I263052.525Criteria for Federal program risk.
I263052.530Criteria for a low-risk auditee. 


Q04I21T5Authority:  T15 U.S.C. 301

Q04I21T5Source: T162 FR 45949, Aug. 29, 1997, unless otherwise noted.



I56Subpart A_General


I80ï¿½1A3052.100
I89Purpose.
I11This part sets forth standards for obtaining consistency and uniformity among Federal agencies for the audit of non-Federal entities expending Federal awards.


I80ï¿½1A3052.105
I89Definitions.
I11T3Audit findingG1T1 means deficiencies which the auditor is required by ï¿½1A3052.510(a) to report in the schedule of findings and questioned costs.
I11T3AuditeeG1T1 means any non-Federal entity that expends Federal awards which must be audited under this part.
I11T3AuditorG1T1 means an auditor, that is a public accountant or a Federal, State or local government audit organization, which meets the general standards specified in generally accepted government auditing standards (GAGAS). The term auditor does not include internal auditors of non-profit organizations.
I11T3CFDA numberG1T1 means the number assigned to a Federal program in the Catalog of Federal Domestic Assistance (CFDA).
I11T3Cluster of programsG1T1 means a grouping of closely related programs that share common compliance requirements. The types of clusters of programs are research and development (R&D), student financial aid (SFA), and other clusters. ``Other clusters'' are as defined by the Office of Management and Budget (OMB) in the compliance supplement or as designated by a State for Federal awards the State provides to its subrecipients that meet the definition of a cluster of programs. When designating an ``other cluster,'' a State shall identify the Federal awards included in the cluster and advise the subrecipients of compliance requirements applicable to the cluster, consistent with ï¿½1A3052.400(d)(1) and ï¿½1A3052.400(d)(2), respectively. A cluster of programs shall be considered as one program for determining major programs, as described in ï¿½1A3052.520, and, with the exception of R&D as described in ï¿½1A3052.200(c), whether a program-specific audit may be elected.
I11T3Cognizant agency for auditG1T1 means the Federal agency designated to carry out the responsibilities described in ï¿½1A3052.400(a).
I11T3Compliance supplementG1T1 refers to the Circular Aï¿½09133 Compliance Supplement, included as Appendix B to Circular Aï¿½09133, or such documents as OMB or its designee may issue to replace it. This document is available from the ï¿½195ï¿½Government Printing Office, Superintendent of Documents, Washington, DC 20402ï¿½099325.
I11T3Corrective actionG1T1 means action taken by the auditee that:
I11(1) Corrects identified deficiencies;
I11(2) Produces recommended improvements; or
I11(3) Demonstrates that audit findings are either invalid or do not warrant auditee action.
I11T3Federal agencyG1T1 has the same meaning as the term agency in Section 551(1) of title 5, United States Code.
I11T3Federal awardG1T1 means Federal financial assistance and Federal cost-reimbursement contracts that non-Federal entities receive directly from Federal awarding agencies or indirectly from pass-through entities. It does not include procurement contracts, under grants or contracts, used to buy goods or services from vendors. Any audits of such vendors shall be covered by the terms and conditions of the contract. Contracts to operate Federal Government owned, contractor operated facilities (GOCOs) are excluded from the requirements of this part.
I11T3Federal awarding agencyG1T1 means the Federal agency that provides an award directly to the recipient.
I11T3Federal financial assistanceG1T1 means assistance that non-Federal entities receive or administer in the form of grants, loans, loan guarantees, property (including donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, and other assistance, but does not include amounts received as reimbursement for services rendered to individuals as described in ï¿½1A3052.205(h) and ï¿½1A3052.205(i).
I11T3Federal programG1T1 means:

I11(1) All Federal awards to a non-Federal entity assigned a single number in the CFDA.
I11(2) When no CFDA number is assigned, all Federal awards from the same agency made for the same purpose should be combined and considered one program.
I11(3) Notwithstanding paragraphs (1) and (2) of this definition, a cluster of programs. The types of clusters of programs are:
I11(i) Research and development (R&D);
I11(ii) Student financial aid (SFA); and
I11(iii) ``Other clusters,'' as described in the definition of cluster of programs in this section.
I11T3GAGASG1T1 means generally accepted government auditing standards issued by the Comptroller General of the United States, which are applicable to financial audits.
I11T3Generally accepted accounting principlesG1T1 has the meaning specified in generally accepted auditing standards issued by the American Institute of Certified Public Accountants (AICPA).
I11T3Indian tribeG1T1 means any Indian tribe, band, nation, or other organized group or community, including any Alaskan Native village or regional or village corporation (as defined in, or established under, the Alaskan Native Claims Settlement Act) that is recognized by the United States as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.
I11T3Internal controlG1T1 means a process, effected by an entity's management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:
I11(1) Effectiveness and efficiency of operations;
I11(2) Reliability of financial reporting; and
I11(3) Compliance with applicable laws and regulations.
I11T3Internal control pertaining to the compliance requirements for Federal programsG1T1 (Internal control over Federal programs) means a process_effected by an entity's management and other personnel_designed to provide reasonable assurance regarding the achievement of the following objectives for Federal programs:
I11(1) Transactions are properly recorded and accounted for to:
I11(i) Permit the preparation of reliable financial statements and Federal reports;
I11(ii) Maintain accountability over assets; and
I11(iii) Demonstrate compliance with laws, regulations, and other compliance requirements;
I11(2) Transactions are executed in compliance with:
I11(i) Laws, regulations, and the provisions of contracts or grant agreements ï¿½196ï¿½that could have a direct and material effect on a Federal program; and
I11(ii) Any other laws and regulations that are identified in the compliance supplement; and
I11(3) Funds, property, and other assets are safeguarded against loss from unauthorized use or disposition.
I11T3LoanG1T1 means a Federal loan or loan guarantee received or administered by a non-Federal entity.
I11T3Local governmentG1T1 means any unit of local government within a State, including a county, borough, municipality, city, town, township, parish, local public authority, special district, school district, intrastate district, council of governments, and any other instrumentality of local government.
I11T3Major programG1T1 means a Federal program determined by the auditor to be a major program in accordance with ï¿½1A3052.520 or a program identified as a major program by a Federal agency or pass-through entity in accordance with ï¿½1A3052.215(c).
I11T3Management decisionG1T1 means the evaluation by the Federal awarding agency or pass-through entity of the audit findings and corrective action plan and the issuance of a written decision as to what corrective action is necessary.
I11T3Non-Federal entityG1T1 means a State, local government, or non-profit organization.
I11T3Non-profit organizationG1T1 means:
I11(1) any corporation, trust, association, cooperative, or other organization that:
I11(i) Is operated primarily for scientific, educational, service, charitable, or similar purposes in the public interest;
I11(ii) Is not organized primarily for profit; and
I11(iii) Uses its net proceeds to maintain, improve, or expand its operations; and  
I11(2) The term non-profit organization includes non-profit institutions of higher education and hospitals.  
I11T3OMBG1T1 means the Executive Office of the President, Office of Management and Budget.  
I11T3Oversight agency for auditG1T1 means the Federal awarding agency that provides the predominant amount of direct funding to a recipient not assigned a cognizant agency for audit. When there is no direct funding, the Federal agency with the predominant indirect funding shall assume the oversight responsibilities. The duties of the oversight agency for audit are described in ï¿½1A3052.400(b).  
I11T3Pass-through entityG1T1 means a non-Federal entity that provides a Federal award to a subrecipient to carry out a Federal program.  
I11T3Program-specific auditG1T1 means an audit of one Federal program as provided for in ï¿½1A3052.200(c) and ï¿½1A3052.235.  
I11T3Questioned costG1T1 means a cost that is questioned by the auditor because of an audit finding:  
I11(1) Which resulted from a violation or possible violation of a provision of a law, regulation, contract, grant, cooperative agreement, or other agreement or document governing the use of Federal funds, including funds used to match Federal funds;  
I11(2) Where the costs, at the time of the audit, are not supported by adequate documentation; or  
I11(3) Where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances.  
I11T3RecipientG1T1 means a non-Federal entity that expends Federal awards received directly from a Federal awarding agency to carry out a Federal program.  
I11T3Research and developmentG1T1 (R&D) means all research activities, both basic and applied, and all development activities that are performed by a non-Federal entity. Research is defined as a systematic study directed toward fuller scientific knowledge or understanding of the subject studied. The term research also includes activities involving the training of individuals in research techniques where such activities utilize the same facilities as other research and development activities and where such activities are not included in the instruction function. Development is the systematic use of knowledge and understanding gained from research directed toward the production of useful materials, devices, systems, or methods, including design and development of prototypes and processes.  
I11T3Single auditG1T1 means an audit which includes both the entity's financial statements and the Federal awards as described in ï¿½1A3052.500.  
ï¿½197ï¿½I11T3StateG1T1 means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and the Trust Territory of the Pacific Islands, any instrumentality thereof, any multi-State, regional, or interstate entity which has governmental functions, and any Indian tribe as defined in this section.  
I11T3Student Financial Aid (SFA)G1T1 includes those programs of general student assistance, such as those authorized by Title IV of the Higher Education Act of 1965, as amended, (20 U.S.C. 1070 et seq.) which is administered by the U.S. Department of Education, and similar programs provided by other Federal agencies. It does not include programs which provide fellowships or similar Federal awards to students on a competitive basis, or for specified studies or research.  
I11T3SubrecipientG1T1 means a non-Federal entity that expends Federal awards received from a pass-through entity to carry out a Federal program, but does not include an individual that is a beneficiary of such a program. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency. Guidance on distinguishing between a subrecipient and a vendor is provided in ï¿½1A3052.210.  
I11T3Types of compliance requirementsG1T1 refers to the types of compliance requirements listed in the compliance supplement. Examples include: activities allowed or unallowed; allowable costs/cost principles; cash management; eligibility; matching, level of effort, earmarking; and, reporting.  
I11T3VendorG1T1 means a dealer, distributor, merchant, or other seller providing goods or services that are required for the conduct of a Federal program. These goods or services may be for an organization's own use or for the use of beneficiaries of the Federal program. Additional guidance on distinguishing between a subrecipient and a vendor is provided in ï¿½1A3052.210.  
I56Subpart B_Audits  


I80ï¿½1A3052.200 
I89Audit requirements.  
I11(a) T3Audit required.G1T1 Non-Federal entities that expend $300,000 or more in a year in Federal awards shall have a single or program-specific audit conducted for that year in accordance with the provisions of this part. Guidance on determining Federal awards expended is provided in ï¿½1A3052.205. 
I11(b) T3Single audit.G1T1 Non-Federal entities that expend $300,000 or more in a year in Federal awards shall have a single audit conducted in accordance with ï¿½1A3052.500 except when they elect to have a program-specific audit conducted in accordance with paragraph (c) of this section.  
I11(c) T3Program-specific audit election.G1T1 When an auditee expends Federal awards under only one Federal program (excluding R&D) and the Federal program's laws, regulations, or grant agreements do not require a financial statement audit of the auditee, the auditee may elect to have a program-specific audit conducted in accordance with ï¿½1A3052.235. A program-specific audit may not be elected for R&D unless all of the Federal awards expended were received from the same Federal agency, or the same Federal agency and the same pass-through entity, and that Federal agency, or pass-through entity in the case of a subrecipient, approves in advance a program-specific audit.  
I11(d) T3Exemption when Federal awards expended are less than $300,000.G1T1 Non-Federal entities that expend less than $300,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in ï¿½1A3052.215(a), but records must be available for review or audit by appropriate officials of the Federal agency, pass-through entity, and General Accounting Office (GAO).  
I11(e) T3Federally Funded Research and Development Centers (FFRDC).G1T1 Management of an auditee that owns or operates a FFRDC may elect to treat the FFRDC as a separate entity for purposes of this part.  


ï¿½198ï¿½I80ï¿½1A3052.205 
I89Basis for determining Federal awards expended.  
I11(a) T3Determining Federal awards expended.G1T1 The determination of when an award is expended should be based on when the activity related to the award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with laws, regulations, and the provisions of contracts or grant agreements, such as: expenditure/expense transactions associated with grants, cost-reimbursement contracts, cooperative agreements, and direct appropriations; the disbursement of funds passed through to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or consumption of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and, the period when insurance is in force.  
I11(b) T3Loan and loan guarantees (loans).G1T1 Since the Federal Government is at risk for loans until the debt is repaid, the following guidelines shall be used to calculate the value of Federal awards expended under loan programs, except as noted in paragraphs (c) and (d) of this section:  
I11(1) Value of new loans made or received during the fiscal year; plus  
I11(2) Balance of loans from previous years for which the Federal Government imposes continuing compliance requirements; plus  
I11(3) Any interest subsidy, cash, or administrative cost allowance received.  
I11(c) T3Loan and loan guarantees (loans) at institutions of higher education.G1T1 When loans are made to students of an institution of higher education but the institution does not make the loans, then only the value of loans made during the year shall be considered Federal awards expended in that year. The balance of loans for previous years is not included as Federal awards expended because the lender accounts for the prior balances.  
I11(d) T3Prior loan and loan guarantees (loans).G1T1 Loans, the proceeds of which were received and expended in prior-years, are not considered Federal awards expended under this part when the laws, regulations, and the provisions of contracts or grant agreements pertaining to such loans impose no continuing compliance requirements other than to repay the loans.  
I11(e) T3Endowment funds.G1T1 The cumulative balance of Federal awards for endowment funds which are federally restricted are considered awards expended in each year in which the funds are still restricted. 

I11(f) T3Free rent.G1T1 Free rent received by itself is not considered a Federal award expended under this part. However, free rent received as part of an award to carry out a Federal program shall be included in determining Federal awards expended and subject to audit under this part. 
I11(g) T3Valuing non-cash assistance.G1T1 Federal non-cash assistance, such as free rent, food stamps, food commodities, donated property, or donated surplus property, shall be valued at fair market value at the time of receipt or the assessed value provided by the Federal agency. 
I11(h) T3Medicare.G1T1 Medicare payments to a non-Federal entity for providing patient care services to Medicare eligible individuals are not considered Federal awards expended under this part. 
I11(i) T3Medicaid.G1T1 Medicaid payments to a subrecipient for providing patient care services to Medicaid eligible individuals are not considered Federal awards expended under this part unless a State requires the funds to be treated as Federal awards expended because reimbursement is on a cost-reimbursement basis. 
I11(j) T3Certain loans provided by the National Credit Union Administration.G1T1 For purposes of this part, loans made from the National Credit Union Share Insurance Fund and the Central Liquidity Facility that are funded by contributions from insured institutions are not considered Federal awards expended. 


I80ï¿½1A3052.210 
I89Subrecipient and vendor determinations. 
I11(a) T3General.G1T1 An auditee may be a recipient, a subrecipient, and a vendor. Federal awards expended as a recipient or a subrecipient would be subject to audit under this part. The payments received for goods or services provided as a vendor would not be considered ï¿½199ï¿½Federal awards. The guidance in paragraphs (b) and (c) of this section should be considered in determining whether payments constitute a Federal award or a payment for goods and services. 
I11(b) T3Federal award.G1T1 Characteristics indicative of a Federal award received by a subrecipient are when the organization: 
I11(1) Determines who is eligible to receive what Federal financial assistance; 
I11(2) Has its performance measured against whether the objectives of the Federal program are met; 
I11(3) Has responsibility for programmatic decision making; 
I11(4) Has responsibility for adherence to applicable Federal program compliance requirements; and 
I11(5) Uses the Federal funds to carry out a program of the organization as compared to providing goods or services for a program of the pass-through entity. 
I11(c) T3Payment for goods and services.G1T1 Characteristics indicative of a payment for goods and services received by a vendor are when the organization: 
I11(1) Provides the goods and services within normal business operations; 
I11(2) Provides similar goods or services to many different purchasers; 
I11(3) Operates in a competitive environment; 
I11(4) Provides goods or services that are ancillary to the operation of the Federal program; and 
I11(5) Is not subject to compliance requirements of the Federal program. 
I11(d) T3Use of judgment in making determination.G1T1 There may be unusual circumstances or exceptions to the listed characteristics. In making the determination of whether a subrecipient or vendor relationship exists, the substance of the relationship is more important than the form of the agreement. It is not expected that all of the characteristics will be present and judgment should be used in determining whether an entity is a subrecipient or vendor. 
I11(e) T3For-profit subrecipient.G1T1 Since this part does not apply to for-profit subrecipients, the pass-through entity is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients. The contract with the for-profit subrecipient should describe applicable compliance requirements and the for-profit subrecipient's compliance responsibility. Methods to ensure compliance for Federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the contract, and post-award audits. 
I11(f) T3Compliance responsibility for vendors.G1T1 In most cases, the auditee's compliance responsibility for vendors is only to ensure that the procurement, receipt, and payment for goods and services comply with laws, regulations, and the provisions of contracts or grant agreements. Program compliance requirements normally do not pass through to vendors. However, the auditee is responsible for ensuring compliance for vendor transactions which are structured such that the vendor is responsible for program compliance or the vendor's records must be reviewed to determine program compliance. Also, when these vendor transactions relate to a major program, the scope of the audit shall include determining whether these transactions are in compliance with laws, regulations, and the provisions of contracts or grant agreements. 



I80ï¿½1A3052.215 
I89Relation to other audit requirements. 
I11(a) T3Audit under this part in lieu of other audits.G1T1 An audit made in accordance with this part shall be in lieu of any financial audit required under individual Federal awards. To the extent this audit meets a Federal agency's needs, it shall rely upon and use such audits. The provisions of this part neither limit the authority of Federal agencies, including their Inspectors General, or GAO to conduct or arrange for additional audits (e.g., financial audits, performance audits, evaluations, inspections, or reviews) nor authorize any auditee to constrain Federal agencies from carrying out additional audits. Any additional audits shall be planned and performed in such a way as to build upon work performed by other auditors. 
I11(b) T3Federal agency to pay for additional audits.G1T1 A Federal agency that conducts or contracts for additional audits shall, consistent with other applicable laws ï¿½200ï¿½and regulations, arrange for funding the full cost of such additional audits. 
I11(c) T3Request for a program to be audited as a major program.G1T1 A Federal agency may request an auditee to have a particular Federal program audited as a major program in lieu of the Federal agency conducting or arranging for the additional audits. To allow for planning, such requests should be made at least 180 days prior to the end of the fiscal year to be audited. The auditee, after consultation with its auditor, should promptly respond to such request by informing the Federal agency whether the program would otherwise be audited as a major program using the risk-based audit approach described in ï¿½1A3052.520 and, if not, the estimated incremental cost. The Federal agency shall then promptly confirm to the auditee whether it wants the program audited as a major program. If the program is to be audited as a major program based upon this Federal agency request, and the Federal agency agrees to pay the full incremental costs, then the auditee shall have the program audited as a major program. A pass-through entity may use the provisions of this paragraph for a subrecipient. 


I80ï¿½1A3052.220 
I89Frequency of audits. 
I11Except for the provisions for biennial audits provided in paragraphs (a) and (b) of this section, audits required by this part shall be performed annually. Any biennial audit shall cover both years within the biennial period. 
I11(a) A State or local government that is required by constitution or statute, in effect on January 1, 1987, to undergo its audits less frequently than annually, is permitted to undergo its audits pursuant to this part biennially. This requirement must still be in effect for the biennial period under audit. 
I11(b) Any non-profit organization that had biennial audits for all biennial periods ending between July 1, 1992, and January 1, 1995, is permitted to undergo its audits pursuant to this part biennially. 


I80ï¿½1A3052.225 
I89Sanctions.  
I11No audit costs may be charged to Federal awards when audits required by this part have not been made or have been made but not in accordance with this part. In cases of continued inability or unwillingness to have an audit conducted in accordance with this part, Federal agencies and pass-through entities shall take appropriate action using sanctions such as:  
I11(a) Withholding a percentage of Federal awards until the audit is completed satisfactorily;  
I11(b) Withholding or disallowing overhead costs;  
I11(c) Suspending Federal awards until the audit is conducted; or  
I11(d) Terminating the Federal award.  


I80ï¿½1A3052.230 
I89Audit costs.  
I11(a) T3Allowable costs.G1T1 Unless prohibited by law, the cost of audits made in accordance with the provisions of this part are allowable charges to Federal awards. The charges may be considered a direct cost or an allocated indirect cost, as determined in accordance with the provisions of applicable OMB cost principles circulars, the Federal Acquisition Regulation (FAR) (48 CFR parts 30 and 31), or other applicable cost principles or regulations.  
I11(b) T3Unallowable costs.G1T1 A non-Federal entity shall not charge the following to a Federal award:  
I11(1) The cost of any audit under the Single Audit Act Amendments of 1996 (31 U.S.C. 7501 T3et seq.G1T1) not conducted in accordance with this part.  
I11(2) The cost of auditing a non-Federal entity which has Federal awards expended of less than $300,000 per year and is thereby exempted under ï¿½1A3052.200(d) from having an audit conducted under this part. However, this does not prohibit a pass-through entity from charging Federal awards for the cost of limited scope audits to monitor its subrecipients in accordance with ï¿½1A3052.400(d)(3), provided the subrecipient does not have a single audit. For purposes of this part, limited scope audits only include agreed-upon procedures engagements conducted in accordance with either the AICPA's generally accepted auditing standards or attestation standards, that are paid for and arranged by a pass-through entity and address only one or more of the following types of compliance requirements: activities allowed or unallowed; ï¿½201ï¿½allowable costs/cost principles; eligibility; matching, level of effort, earmarking; and, reporting.  


I80ï¿½1A3052.235 
I89Program-specific audits.  
I11(a) T3Program-specific audit guide available.G1T1 In many cases, a program-specific audit guide will be available to provide specific guidance to the auditor with respect to internal control, compliance requirements, suggested audit procedures, and audit reporting requirements. The auditor should contact the Office of Inspector General of the Federal agency to determine whether such a guide is available. When a current program-specific audit guide is available, the auditor shall follow GAGAS and the guide when performing a program-specific audit.  
I11(b) T3Program-specific audit guide not available.G1T1 (1) When a program-specific audit guide is not available, the auditee and auditor shall have basically the same responsibilities for the Federal program as they would have for an audit of a major program in a single audit.  
I11(2) The auditee shall prepare the financial statement(s) for the Federal program that includes, at a minimum, a schedule of expenditures of Federal awards for the program and notes that describe the significant accounting policies used in preparing the schedule, a summary schedule of prior audit findings consistent with the requirements of ï¿½1A3052.315(b), and a corrective action plan consistent with the requirements of ï¿½1A3052.315(c). 
I11(3) The auditor shall:  
I11(i) Perform an audit of the financial statement(s) for the Federal program in accordance with GAGAS; 
I11(ii) Obtain an understanding of internal control and perform tests of internal control over the Federal program consistent with the requirements of ï¿½1A3052.500(c) for a major program;  
I11(iii) Perform procedures to determine whether the auditee has complied with laws, regulations, and the provisions of contracts or grant agreements that could have a direct and material effect on the Federal program consistent with the requirements of ï¿½1A3052.500(d) for a major program; and  
I11(iv) Follow up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee, and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding in accordance with the requirements of ï¿½1A3052.500(e).  
I11(4) The auditor's report(s) may be in the form of either combined or separate reports and may be organized differently from the manner presented in this section. The auditor's report(s) shall state that the audit was conducted in accordance with this part and include the following:  
I11(i) An opinion (or disclaimer of opinion) as to whether the financial statement(s) of the Federal program is presented fairly in all material respects in conformity with the stated accounting policies;  
I11(ii) A report on internal control related to the Federal program, which shall describe the scope of testing of internal control and the results of the tests;  
I11(iii) A report on compliance which includes an opinion (or disclaimer of opinion) as to whether the auditee complied with laws, regulations, and the provisions of contracts or grant agreements which could have a direct and material effect on the Federal program; and  
I11(iv) A schedule of findings and questioned costs for the Federal program that includes a summary of the auditor's results relative to the Federal program in a format consistent with ï¿½1A3052.505(d)(1) and findings and questioned costs consistent with the requirements of ï¿½1A3052.505(d)(3).  
I11(c) T3Report submission for program-specific audits.G1T1 (1) The audit shall be completed and the reporting required by paragraph (c)(2) or (c)(3) of this section submitted within the earlier of 30 days after receipt of the auditor's report(s), or nine months after the end of the audit period, unless a longer period is agreed to in advance by the Federal agency that provided the funding or a different period is specified in a program-specific audit guide. (However, for fiscal years beginning on or before June 30, 1988, the audit shall be completed and the required reporting shall ï¿½202ï¿½be submitted within the earlier of 30 days after receipt of the auditor's report(s), or 13 months after the end of the audit period, unless a different period is specified in a program-specific audit guide.) Unless restricted by law or regulation, the auditee shall make report copies available for public inspection.  
I11(2) When a program-specific audit guide is available, the auditee shall submit to the Federal clearinghouse designated by OMB the data collection form prepared in accordance with ï¿½1A3052.320(b), as applicable to a program-specific audit, and the reporting required by the program-specific audit guide to be retained as an archival copy. Also, the auditee shall submit to the Federal awarding agency or pass-through entity the reporting required by the program-specific audit guide.  
I11(3) When a program-specific audit guide is not available, the reporting package for a program-specific audit shall consist of the financial statement(s) of the Federal program, a summary schedule of prior audit findings, and a corrective action plan as described in paragraph (b)(2) of this section, and the auditor's report(s) described in paragraph (b)(4) of this section. The data collection form prepared in accordance with ï¿½1A3052.320(b), as applicable to a program-specific audit, and one copy of this reporting package shall be submitted to the Federal clearinghouse designated by OMB to be retained as an archival copy. Also, when the schedule of findings and questioned costs disclosed audit findings or the summary schedule of prior audit findings reported the status of any audit findings, the auditee shall submit one copy of the reporting package to the Federal clearinghouse on behalf of the Federal awarding agency, or directly to the pass-through entity in the case of a subrecipient. Instead of submitting the reporting package to the pass-through entity, when a subrecipient is not required to submit a reporting package to the pass-through entity, the subrecipient shall provide written notification to the pass-through entity, consistent with the requirements of ï¿½1A3052.320(e)(2). A subrecipient may submit a copy of the reporting package to the pass-through entity to comply with this notification requirement.  
I11(d) T3Other sections of this part may apply.G1T1 Program-specific audits are subject to ï¿½1A3052.100 through ï¿½1A3052.215(b), ï¿½1A3052.220 through ï¿½1A3052.230, ï¿½1A3052.300 through ï¿½1A3052.305, ï¿½1A3052.315, ï¿½1A3052.320(f) through ï¿½1A3052.320(j), ï¿½1A3052.400 through ï¿½1A3052.405, ï¿½1A3052.510 through ï¿½1A3052.515, and other referenced provisions of this part unless contrary to the provisions of this section, a program-specific audit guide, or program laws and regulations. 
I56Subpart C_Auditees  


I80ï¿½1A3052.300
I89Auditee responsibilities.  
I11The auditee shall:  
I11(a) Identify, in its accounts, all Federal awards received and expended and the Federal programs under which they were received. Federal program and award identification shall include, as applicable, the CFDA title and number, award number and year, name of the Federal agency, and name of the pass-through entity.  
I11(b) Maintain internal control over Federal programs that provides reasonable assurance that the auditee is managing Federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its Federal programs.  
I11(c) Comply with laws, regulations, and the provisions of contracts or grant agreements related to each of its Federal programs.  
I11(d) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with ï¿½1A3052.310.  
I11(e) Ensure that the audits required by this part are properly performed and submitted when due. When extensions to the report submission due date required by ï¿½1A3052.320(a) are granted by the cognizant or oversight agency for audit, promptly notify the Federal clearinghouse designated by OMB and each pass-through entity providing Federal awards of the extension.  
I11(f) Follow up and take corrective action on audit findings, including preparation of a summary schedule of prior audit findings and a corrective action ï¿½203ï¿½plan in accordance with ï¿½1A3052.315(b) and ï¿½1A3052.315(c), respectively.  


I80ï¿½1A3052.305
I89Auditor selection.  
I11(a) T3Auditor procurement.G1T1 In procuring audit services, auditees shall follow the procurement standards prescribed by the Grants Management Common Rule (hereinafter referred to as the ``Aï¿½09102 Common Rule'') 7 CFR Part 3016, Circular Aï¿½09110, ``Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations,'' or the FAR (48 CFR part 42), as applicable (OMB Circulars are available from the Office of Administration, Publications Office, Room 2200, New Executive Office Building, Washington, DC 20503). Whenever possible, auditees shall make positive efforts to utilize small businesses, minority-owned firms, and women's business enterprises, in procuring audit services as stated in the Aï¿½09102 Common Rule, OMB Circular Aï¿½09110, or the FAR (48 CFR part 42), as applicable. In requesting proposals for audit services, the objectives and scope of the audit should be made clear. Factors to be considered in evaluating each proposal for audit services include the responsiveness to the request for proposal, relevant experience, availability of staff with professional qualifications and technical abilities, the results of external quality control reviews, and price.  
I11(b) T3Restriction on auditor preparing indirect cost proposals.G1T1 An auditor who prepares the indirect cost proposal or cost allocation plan may not also be selected to perform the audit required by this part when the indirect costs recovered by the auditee during the prior year exceeded $1 million. This restriction applies to the base year used in the preparation of the indirect cost proposal or cost allocation plan and any subsequent years in which the resulting indirect cost agreement or cost allocation plan is used to recover costs. To minimize any disruption in existing contracts for audit services, this paragraph applies to audits of fiscal years beginning after June 30, 1998.  
I11(c) T3Use of Federal auditors.G1T1 Federal auditors may perform all or part of the work required under this part if they comply fully with the requirements of this part.  


I80ï¿½1A3052.310
I89Financial statements.  
I11(a) T3Financial statements.G1T1 The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The financial statements shall be for the same organizational unit and fiscal year that is chosen to meet the requirements of this part. However, organization-wide financial statements may also include departments, agencies, and other organizational units that have separate audits in accordance with ï¿½1A3052.500(a) and prepare separate financial statements.  
I11(b) T3Schedule of expenditures of Federal awards.G1T1 The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple award years, the auditee may list the amount of Federal awards expended for each award year separately. At a minimum, the schedule shall:  
I11(1) List individual Federal programs by Federal agency. For Federal programs included in a cluster of programs, list individual Federal programs within a cluster of programs. For R&D, total Federal awards expended shall be shown either by individual award or by Federal agency and major subdivision within the Federal agency. For example, the National Institutes of Health is a major subdivision in the Department of Health and Human Services. 
I11(2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity shall be included.  
I11(3) Provide total Federal awards expended for each individual Federal program and the CFDA number or other identifying number when the CFDA information is not available.  
ï¿½204ï¿½I11(4) Include notes that describe the significant accounting policies used in preparing the schedule.  
I11(5) To the extent practical, pass-through entities should identify in the schedule the total amount provided to subrecipients from each Federal program.  
I11(6) Include, in either the schedule or a note to the schedule, the value of the Federal awards expended in the form of non-cash assistance, the amount of insurance in effect during the year, and loans or loan guarantees outstanding at year end. While not required, it is preferable to present this information in the schedule.  


I80ï¿½1A3052.315
I89Audit findings follow-up.  
I11(a) T3General.G1T1 The auditee is responsible for follow-up and corrective action on all audit findings. As part of this responsibility, the auditee shall prepare a summary schedule of prior audit findings. The auditee shall also prepare a corrective action plan for current year audit findings. The summary schedule of prior audit findings and the corrective action plan shall include the reference numbers the auditor assigns to audit findings under ï¿½1A3052.510(c). Since the summary schedule may include audit findings from multiple years, it shall include the fiscal year in which the finding initially occurred.  
I11(b) T3Summary schedule of prior audit findings.G1T1 The summary schedule of prior audit findings shall report the status of all audit findings included in the prior audit's schedule of findings and questioned costs relative to Federal awards. The summary schedule shall also include audit findings reported in the prior audit's summary schedule of prior audit findings except audit findings listed as corrected in accordance with paragraph (b)(1) of this section, or no longer valid or not warranting further action in accordance with paragraph (b)(4) of this section.  
I11(1) When audit findings were fully corrected, the summary schedule need only list the audit findings and state that corrective action was taken.  
I11(2) When audit findings were not corrected or were only partially corrected, the summary schedule shall describe the planned corrective action as well as any partial corrective action taken.  
I11(3) When corrective action taken is significantly different from corrective action previously reported in a corrective action plan or in the Federal agency's or pass-through entity's management decision, the summary schedule shall provide an explanation.  
I11(4) When the auditee believes the audit findings are no longer valid or do not warrant further action, the reasons for this position shall be described in the summary schedule. A valid reason for considering an audit finding as not warranting further action is that all of the following have occurred:  
I11(i) Two years have passed since the audit report in which the finding occurred was submitted to the Federal clearinghouse;  
I11(ii) The Federal agency or pass-through entity is not currently following up with the auditee on the audit finding; and  
I11(iii) A management decision was not issued.  
I11(c) T3Corrective action plan.G1T1 At the completion of the audit, the auditee shall prepare a corrective action plan to address each audit finding included in the current year auditor's reports. The corrective action plan shall provide the name(s) of the contact person(s) responsible for corrective action, the corrective action planned, and the anticipated completion date. If the auditee does not agree with the audit findings or believes corrective action is not required, then the corrective action plan shall include an explanation and specific reasons. 



I80ï¿½1A3052.320 
I89Report submission. 
I11(a) T3General.G1T1 The audit shall be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section shall be submitted within the earlier of 30 days after receipt of the auditor's report(s), or nine months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audit. (However, for fiscal years beginning on or before June 30, 1998, the audit shall be completed and the data collection form and reporting package shall be submitted within the earlier of 30 days after receipt of the auditor's report(s), ï¿½205ï¿½or 13 months after the end of the audit period.) Unless restricted by law or regulation, the auditee shall make copies available for public inspection. 
I11(b) T3Data collection.G1T1 (1) The auditee shall submit a data collection form which states whether the audit was completed in accordance with this part and provides information about the auditee, its Federal programs, and the results of the audit. The form shall be approved by OMB, available from the Federal clearinghouse designated by OMB, and include data elements similar to those presented in this paragraph. A senior level representative of the auditee (e.g., State controller, director of finance, chief executive officer, or chief financial officer) shall sign a statement to be included as part of the form certifying that: the auditee complied with the requirements of this part, the form was prepared in accordance with this part (and the instructions accompanying the form), and the information included in the form, in its entirety, are accurate and complete. 
I11(2) The data collection form shall include the following data elements: 
I11(i) The type of report the auditor issued on the financial statements of the auditee (i.e., unqualified opinion, qualified opinion, adverse opinion, or disclaimer of opinion). 
I11(ii) Where applicable, a statement that reportable conditions in internal control were disclosed by the audit of the financial statements and whether any such conditions were material weaknesses. 
I11(iii) A statement as to whether the audit disclosed any noncompliance which is material to the financial statements of the auditee. 
I11(iv) Where applicable, a statement that reportable conditions in internal control over major programs were disclosed by the audit and whether any such conditions were material weaknesses. 
I11(v) The type of report the auditor issued on compliance for major programs (i.e., unqualified opinion, qualified opinion, adverse opinion, or disclaimer of opinion). 
I11(vi) A list of the Federal awarding agencies which will receive a copy of the reporting package pursuant to ï¿½1A3052.320(d)(2) of OMB Circular Aï¿½09133. 
I11(vii) A yes or no statement as to whether the auditee qualified as a low-risk auditee under ï¿½1A3052.530 of OMB Circular Aï¿½09133. 
I11(viii) The dollar threshold used to distinguish between Type A and Type B programs as defined in ï¿½1A3052.520(b) of OMB Circular Aï¿½09133. 
I11(ix) The Catalog of Federal Domestic Assistance (CFDA) number for each Federal program, as applicable. 
I11(x) The name of each Federal program and identification of each major program. Individual programs within a cluster of programs should be listed in the same level of detail as they are listed in the schedule of expenditures of Federal awards. 
I11(xi) The amount of expenditures in the schedule of expenditures of Federal awards associated with each Federal program. 
I11(xii) For each Federal program, a yes or no statement as to whether there are audit findings in each of the following types of compliance requirements and the total amount of any questioned costs: 

I11(A) Activities allowed or unallowed. 
I11(B) Allowable costs/cost principles. 
I11(C) Cash management. 
I11(D) Davis-Bacon Act. 
I11(E) Eligibility. 
I11(F) Equipment and real property management. 
I11(G) Matching, level of effort, earmarking. 
I11(H) Period of availability of Federal funds. 
I11(I) Procurement and suspension and debarment. 
I11(J) Program income. 
I11(K) Real property acquisition and relocation assistance. 
I11(L) Reporting. 
I11(M) Subrecipient monitoring. 
I11(N) Special tests and provisions. 
I11(xiii) Auditee Name, Employer Identification Number(s), Name and Title of Certifying Official, Telephone Number, Signature, and Date. 
I11(xiv) Auditor Name, Name and Title of Contact Person, Auditor Address, Auditor Telephone Number, Signature, and Date. 
I11(xv) Whether the auditee has either a cognizant or oversight agency for audit. 
ï¿½206ï¿½I11(xvi) The name of the cognizant or oversight agency for audit determined in accordance with ï¿½1A3052.400(a) and ï¿½1A3052.400(b), respectively. 
I11(3) Using the information included in the reporting package described in paragraph (c) of this section, the auditor shall complete the applicable sections of the form. The auditor shall sign a statement to be included as part of the data collection form that indicates, at a minimum, the source of the information included in the form, the auditor's responsibility for the information, that the form is not a substitute for the reporting package described in paragraph (c) of this section, and that the content of the form is limited to the data elements prescribed by OMB. 
I11(c) T3Reporting package.G1T1 The reporting package shall include the: 
I11(1) Financial statements and schedule of expenditures of Federal awards discussed in ï¿½1A3052.310(a) and ï¿½1A3052.310(b), respectively; 
I11(2) Summary schedule of prior audit findings discussed in ï¿½1A3052.315(b); 
I11(3) Auditor's report(s) discussed in ï¿½1A3052.505; and 
I11(4) Corrective action plan discussed in ï¿½1A3052.315(c). 
I11(d) T3Submission to clearinghouse.G1T1 All auditees shall submit to the Federal clearinghouse designated by OMB the data collection form described in paragraph (b) of this section and one copy of the reporting package described in paragraph (c) of this section for: 
I11(1) The Federal clearinghouse to retain as an archival copy; and 
I11(2) Each Federal awarding agency when the schedule of findings and questioned costs disclosed audit findings relating to Federal awards that the Federal awarding agency provided directly or the summary schedule of prior audit findings reported the status of any audit findings relating to Federal awards that the Federal awarding agency provided directly. 
I11(e) T3Additional submission by subrecipients.G1T1 (1) In addition to the requirements discussed in paragraph (d) of this section, auditees that are also subrecipients shall submit to each pass-through entity one copy of the reporting package described in paragraph (c) of this section for each pass-through entity when the schedule of findings and questioned costs disclosed audit findings relating to Federal awards that the pass-through entity provided or the summary schedule of prior audit findings reported the status of any audit findings relating to Federal awards that the pass-through entity provided. 

I11(2) Instead of submitting the reporting package to a pass-through entity, when a subrecipient is not required to submit a reporting package to a pass-through entity pursuant to paragraph (e)(1) of this section, the subrecipient shall provide written notification to the pass-through entity that: an audit of the subrecipient was conducted in accordance with this part (including the period covered by the audit and the name, amount, and CFDA number of the Federal award(s) provided by the pass-through entity); the schedule of findings and questioned costs disclosed no audit findings relating to the Federal award(s) that the pass-through entity provided; and, the summary schedule of prior audit findings did not report on the status of any audit findings relating to the Federal award(s) that the pass-through entity provided. A subrecipient may submit a copy of the reporting package described in paragraph (c) of this section to a pass-through entity to comply with this notification requirement.  
I11(f) T3Requests for report copies.G1T1 In response to requests by a Federal agency or pass-through entity, auditees shall submit the appropriate copies of the reporting package described in paragraph (c) of this section and, if requested, a copy of any management letters issued by the auditor.  
I11(g) T3Report retention requirements.G1T1 Auditees shall keep one copy of the data collection form described in paragraph (b) of this section and one copy of the reporting package described in paragraph (c) of this section on file for three years from the date of submission to the Federal clearinghouse designated by OMB. Pass-through entities shall keep subrecipients' submissions on file for three years from date of receipt.  
I11(h) T3Clearinghouse responsibilities.G1T1 The Federal clearinghouse designated by OMB shall distribute the reporting ï¿½207ï¿½packages received in accordance with paragraph (d)(2) of this section and ï¿½1A3052.235(c)(3) to applicable Federal awarding agencies, maintain a data base of completed audits, provide appropriate information to Federal agencies, and follow up with known auditees which have not submitted the required data collection forms and reporting packages.  
I11(i) T3Clearinghouse address.G1T1 The address of the Federal clearinghouse currently designated by OMB is Federal Audit Clearinghouse, Bureau of the Census, 1201 E. 10th Street, Jeffersonville, IN 47132.  
I11(j) T3Electronic filing.G1T1 Nothing in this part shall preclude electronic submissions to the Federal clearinghouse in such manner as may be approved by OMB. With OMB approval, the Federal clearinghouse may pilot test methods of electronic submissions.  
I56Subpart D_Federal Agencies and Pass-Through Entities  


I80ï¿½1A3052.400 
I89Responsibilities.  
I11(a) T3Cognizant agency for audit responsibilities.G1T1 Recipients expending more than $25 million a year in Federal awards shall have a cognizant agency for audit. The designated cognizant agency for audit shall be the Federal awarding agency that provides the predominant amount of direct funding to a recipient unless OMB makes a specific cognizant agency for audit assignment. To provide for continuity of cognizance, the determination of the predominant amount of direct funding shall be based upon direct Federal awards expended in the recipient's fiscal years ending in 1995, 2000, 2005, and every fifth year thereafter. For example, audit cognizance for periods ending in 1997 through 2000 will be determined based on Federal awards expended in 1995. (However, for States and local governments that expend more than $25 million a year in Federal awards and have previously assigned cognizant agencies for audit, the requirements of this paragraph are not effective until fiscal years beginning after June 30, 2000.) Notwithstanding the manner in which audit cognizance is determined, a Federal awarding agency with cognizance for an auditee may reassign cognizance to another Federal awarding agency which provides substantial direct funding and agrees to be the cognizant agency for audit. Within 30 days after any reassignment, both the old and the new cognizant agency for audit shall notify the auditee, and, if known, the auditor of the reassignment. The cognizant agency for audit shall:  
I11(1) Provide technical audit advice and liaison to auditees and auditors.  
I11(2) Consider auditee requests for extensions to the report submission due date required by ï¿½1A3052.320(a). The cognizant agency for audit may grant extensions for good cause.  
I11(3) Obtain or conduct quality control reviews of selected audits made by non-Federal auditors, and provide the results, when appropriate, to other interested organizations.  
I11(4) Promptly inform other affected Federal agencies and appropriate Federal law enforcement officials of any direct reporting by the auditee or its auditor of irregularities or illegal acts, as required by GAGAS or laws and regulations. 
I11(5) Advise the auditor and, where appropriate, the auditee of any deficiencies found in the audits when the deficiencies require corrective action by the auditor. When advised of deficiencies, the auditee shall work with the auditor to take corrective action. If corrective action is not taken, the cognizant agency for audit shall notify the auditor, the auditee, and applicable Federal awarding agencies and pass-through entities of the facts and make recommendations for follow-up action. Major inadequacies or repetitive substandard performance by auditors shall be referred to appropriate State licensing agencies and professional bodies for disciplinary action.  
I11(6) Coordinate, to the extent practical, audits or reviews made by or for Federal agencies that are in addition to the audits made pursuant to this part, so that the additional audits or reviews build upon audits performed in accordance with this part.  
I11(7) Coordinate a management decision for audit findings that affect the Federal programs of more than one agency.  
I11(8) Coordinate the audit work and reporting responsibilities among auditors ï¿½208ï¿½to achieve the most cost-effective audit.  
I11(9) For biennial audits permitted under ï¿½1A3052.220, consider auditee requests to qualify as a low-risk auditee under ï¿½1A3052.530(a).  
I11(b) T3Oversight agency for audit responsibilities.G1T1 An auditee which does not have a designated cognizant agency for audit will be under the general oversight of the Federal agency determined in accordance with ï¿½1A3052.105. The oversight agency for audit:  
I11(1) Shall provide technical advice to auditees and auditors as requested.  
I11(2) May assume all or some of the responsibilities normally performed by a cognizant agency for audit.  
I11(c) T3Federal awarding agency responsibilities.G1T1 The Federal awarding agency shall perform the following for the Federal awards it makes:  
I11(1) Identify Federal awards made by informing each recipient of the CFDA title and number, award name and number, award year, and if the award is for R&D. When some of this information is not available, the Federal agency shall provide information necessary to clearly describe the Federal award.  
I11(2) Advise recipients of requirements imposed on them by Federal laws, regulations, and the provisions of contracts or grant agreements.  
I11(3) Ensure that audits are completed and reports are received in a timely manner and in accordance with the requirements of this part.  
I11(4) Provide technical advice and counsel to auditees and auditors as requested.  
I11(5) Issue a management decision on audit findings within six months after receipt of the audit report and ensure that the recipient takes appropriate and timely corrective action.  
I11(6) Assign a person responsible for providing annual updates of the compliance supplement to OMB.  
I11(d) T3Pass-through entity responsibilities.G1T1 A pass-through entity shall perform the following for the Federal awards it makes:  
I11(1) Identify Federal awards made by informing each subrecipient of CFDA title and number, award name and number, award year, if the award is R&D, and name of Federal agency. When some of this information is not available, the pass-through entity shall provide the best information available to describe the Federal award.  
I11(2) Advise subrecipients of requirements imposed on them by Federal laws, regulations, and the provisions of contracts or grant agreements as well as any supplemental requirements imposed by the pass-through entity.  
I11(3) Monitor the activities of subrecipients as necessary to ensure that Federal awards are used for authorized purposes in compliance with laws, regulations, and the provisions of contracts or grant agreements and that performance goals are achieved.  
I11(4) Ensure that subrecipients expending $300,000 or more in Federal awards during the subrecipient's fiscal year have met the audit requirements of this part for that fiscal year.  
I11(5) Issue a management decision on audit findings within six months after receipt of the subrecipient's audit report and ensure that the subrecipient takes appropriate and timely corrective action.  
I11(6) Consider whether subrecipient audits necessitate adjustment of the pass-through entity's own records.  
I11(7) Require each subrecipient to permit the pass-through entity and auditors to have access to the records and financial statements as necessary for the pass-through entity to comply with this part.  


I80ï¿½1A3052.405 
I89Management decision. 
I11(a) T3General.G1T1 The management decision shall clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. If the auditee has not completed corrective action, a timetable for follow-up should be given. Prior to issuing the management decision, the Federal agency or pass-through entity may request additional information or documentation from the auditee, including a request for auditor assurance related to the documentation, as a way of mitigating disallowed costs. The management decision should describe any appeal process available to the auditee.  
I11(b) T3Federal agency.G1T1 As provided in ï¿½1A3052.400(a)(7), the cognizant agency for ï¿½209ï¿½audit shall be responsible for coordinating a management decision for audit findings that affect the programs of more than one Federal agency. As provided in ï¿½1A3052.400(c)(5), a Federal awarding agency is responsible for issuing a management decision for findings that relate to Federal awards it makes to recipients. Alternate arrangements may be made on a case-by-case basis by agreement among the Federal agencies concerned.  
I11(c) T3Pass-through entity.G1T1 As provided in ï¿½1A3052.400(d)(5), the pass-through entity shall be responsible for making the management decision for audit findings that relate to Federal awards it makes to subrecipients.  
I11(d) T3Time requirements.G1T1 The entity responsible for making the management decision shall do so within six months of receipt of the audit report. Corrective action should be initiated within six months after receipt of the audit report and proceed as rapidly as possible.  
I11(e) T3Reference numbers.G1T1 Management decisions shall include the reference numbers the auditor assigned to each audit finding in accordance with ï¿½1A3052.510(c).  
I56Subpart E_Auditors  


I80ï¿½1A3052.500 
I89Scope of audit.  
I11(a) T3General.G1T1 The audit shall be conducted in accordance with GAGAS. The audit shall cover the entire operations of the auditee; or, at the option of the auditee, such audit shall include a series of audits that cover departments, agencies, and other organizational units which expended or otherwise administered Federal awards during such fiscal year, provided that each such audit shall encompass the financial statements and schedule of expenditures of Federal awards for each such department, agency, and other organizational unit, which shall be considered to be a non-Federal entity. The financial statements and schedule of expenditures of Federal awards shall be for the same fiscal year.  
I11(b) T3Financial statements.G1T1 The auditor shall determine whether the financial statements of the auditee are presented fairly in all material respects in conformity with generally accepted accounting principles. The auditor shall also determine whether the schedule of expenditures of Federal awards is presented fairly in all material respects in relation to the auditee's financial statements taken as a whole.  
I11(c) T3Internal control.G1T1 (1) In addition to the requirements of GAGAS, the auditor shall perform procedures to obtain an understanding of internal control over Federal programs sufficient to plan the audit to support a low assessed level of control risk for major programs.  
I11(2) Except as provided in paragraph (c)(3) of this section, the auditor shall:  
I11(i) Plan the testing of internal control over major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program; and  
I11(ii) Perform testing of internal control as planned in paragraph (c)(2)(i) of this section.  
I11(3) When internal control over some or all of the compliance requirements for a major program are likely to be ineffective in preventing or detecting noncompliance, the planning and performing of testing described in paragraph (c)(2) of this section are not required for those compliance requirements. However, the auditor shall report a reportable condition (including whether any such condition is a material weakness) in accordance with ï¿½1A3052.510, assess the related control risk at the maximum, and consider whether additional compliance tests are required because of ineffective internal control.  
I11(d) T3Compliance.G1T1 (1) In addition to the requirements of GAGAS, the auditor shall determine whether the auditee has complied with laws, regulations, and the provisions of contracts or grant agreements that may have a direct and material effect on each of its major programs. 
I11(2) The principal compliance requirements applicable to most Federal programs and the compliance requirements of the largest Federal programs are included in the compliance supplement.  
I11(3) For the compliance requirements related to Federal programs contained in the compliance supplement, an audit ï¿½210ï¿½of these compliance requirements will meet the requirements of this part. Where there have been changes to the compliance requirements and the changes are not reflected in the compliance supplement, the auditor shall determine the current compliance requirements and modify the audit procedures accordingly. For those Federal programs not covered in the compliance supplement, the auditor should use the types of compliance requirements contained in the compliance supplement as guidance for identifying the types of compliance requirements to test, and determine the requirements governing the Federal program by reviewing the provisions of contracts and grant agreements and the laws and regulations referred to in such contracts and grant agreements.  
I11(4) The compliance testing shall include tests of transactions and such other auditing procedures necessary to provide the auditor sufficient evidence to support an opinion on compliance.  
I11(e) T3Audit follow-up.G1T1 The auditor shall follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with ï¿½1A3052.315(b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding. The auditor shall perform audit follow-up procedures regardless of whether a prior audit finding relates to a major program in the current year.  
I11(f) T3Data collection form.G1T1 As required in ï¿½1A3052.320(b)(3), the auditor shall complete and sign specified sections of the data collection form.  


I80ï¿½1A3052.505 
I89Audit reporting.  
I11The auditor's report(s) may be in the form of either combined or separate reports and may be organized differently from the manner presented in this section. The auditor's report(s) shall state that the audit was conducted in accordance with this part and include the following:  
I11(a) An opinion (or disclaimer of opinion) as to whether the financial statements are presented fairly in all material respects in conformity with generally accepted accounting principles and an opinion (or disclaimer of opinion) as to whether the schedule of expenditures of Federal awards is presented fairly in all material respects in relation to the financial statements taken as a whole.  
I11(b) A report on internal control related to the financial statements and major programs. This report shall describe the scope of testing of internal control and the results of the tests, and, where applicable, refer to the separate schedule of findings and questioned costs described in paragraph (d) of this section.  
I11(c) A report on compliance with laws, regulations, and the provisions of contracts or grant agreements, noncompliance with which could have a material effect on the financial statements. This report shall also include an opinion (or disclaimer of opinion) as to whether the auditee complied with laws, regulations, and the provisions of contracts or grant agreements which could have a direct and material effect on each major program, and, where applicable, refer to the separate schedule of findings and questioned costs described in paragraph (d) of this section. 

I11(d) A schedule of findings and questioned costs which shall include the following three components:  
I11(1) A summary of the auditor's results which shall include:  
I11(i) The type of report the auditor issued on the financial statements of the auditee (i.e., unqualified opinion, qualified opinion, adverse opinion, or disclaimer of opinion);  
I11(ii) Where applicable, a statement that reportable conditions in internal control were disclosed by the audit of the financial statements and whether any such conditions were material weaknesses;  
I11(iii) A statement as to whether the audit disclosed any noncompliance which is material to the financial statements of the auditee;  
I11(iv) Where applicable, a statement that reportable conditions in internal control over major programs were disclosed by the audit and whether any such conditions were material weaknesses;  
ï¿½211ï¿½I11(v) The type of report the auditor issued on compliance for major programs (i.e., unqualified opinion, qualified opinion, adverse opinion, or disclaimer of opinion);  
I11(vi) A statement as to whether the audit disclosed any audit findings which the auditor is required to report under ï¿½1A3052.510(a);  
I11(vii) An identification of major programs; 
I11(viii) The dollar threshold used to distinguish between Type A and Type B programs, as described in ï¿½1A3052.520(b); and  
I11(ix) A statement as to whether the auditee qualified as a low-risk auditee under ï¿½1A3052.530.  
I11(2) Findings relating to the financial statements which are required to be reported in accordance with GAGAS.  
I11(3) Findings and questioned costs for Federal awards which shall include audit findings as defined in ï¿½1A3052.510(a).  
I11(i) Audit findings (e.g., internal control findings, compliance findings, questioned costs, or fraud) which relate to the same issue should be presented as a single audit finding. Where practical, audit findings should be organized by Federal agency or pass-through entity.  
I11(ii) Audit findings which relate to both the financial statements and Federal awards, as reported under paragraphs (d)(2) and (d)(3) of this section, respectively, should be reported in both sections of the schedule. However, the reporting in one section of the schedule may be in summary form with a reference to a detailed reporting in the other section of the schedule.  


I80ï¿½1A3052.510 
I89Audit findings.  
I11(a) T3Audit findings reported.G1T1 The auditor shall report the following as audit findings in a schedule of findings and questioned costs:  
I11(1) Reportable conditions in internal control over major programs. The auditor's determination of whether a deficiency in internal control is a reportable condition for the purpose of reporting an audit finding is in relation to a type of compliance requirement for a major program or an audit objective identified in the compliance supplement. The auditor shall identify reportable conditions which are individually or cumulatively material weaknesses.  
I11(2) Material noncompliance with the provisions of laws, regulations, contracts, or grant agreements related to a major program. The auditor's determination of whether a noncompliance with the provisions of laws, regulations, contracts, or grant agreements is material for the purpose of reporting an audit finding is in relation to a type of compliance requirement for a major program or an audit objective identified in the compliance supplement.  
I11(3) Known questioned costs which are greater than $10,000 for a type of compliance requirement for a major program. Known questioned costs are those specifically identified by the auditor. In evaluating the effect of questioned costs on the opinion on compliance, the auditor considers the best estimate of total costs questioned (likely questioned costs), not just the questioned costs specifically identified (known questioned costs). The auditor shall also report known questioned costs when likely questioned costs are greater than $10,000 for a type of compliance requirement for a major program. In reporting questioned costs, the auditor shall include information to provide proper perspective for judging the prevalence and consequences of the questioned costs.  
I11(4) Known questioned costs which are greater than $10,000 for a Federal program which is not audited as a major program. Except for audit follow-up, the auditor is not required under this part to perform audit procedures for such a Federal program; therefore, the auditor will normally not find questioned costs for a program which is not audited as a major program. However, if the auditor does become aware of questioned costs for a Federal program which is not audited as a major program (e.g., as part of audit follow-up or other audit procedures) and the known questioned costs are greater than $10,000, then the auditor shall report this as an audit finding. 
I11(5) The circumstances concerning why the auditor's report on compliance for major programs is other than an unqualified opinion, unless such circumstances are otherwise reported as ï¿½212ï¿½audit findings in the schedule of findings and questioned costs for Federal awards.  
I11(6) Known fraud affecting a Federal award, unless such fraud is otherwise reported as an audit finding in the schedule of findings and questioned costs for Federal awards. This paragraph does not require the auditor to make an additional reporting when the auditor confirms that the fraud was reported outside of the auditor's reports under the direct reporting requirements of GAGAS.  
I11(7) Instances where the results of audit follow-up procedures disclosed that the summary schedule of prior audit findings prepared by the auditee in accordance with ï¿½1A3052.315(b) materially misrepresents the status of any prior audit finding.  
I11(b) T3Audit finding detail.G1T1 Audit findings shall be presented in sufficient detail for the auditee to prepare a corrective action plan and take corrective action and for Federal agencies and pass-through entities to arrive at a management decision. The following specific information shall be included, as applicable, in audit findings:  
I11(1) Federal program and specific Federal award identification including the CFDA title and number, Federal award number and year, name of Federal agency, and name of the applicable pass-through entity. When information, such as the CFDA title and number or Federal award number, is not available, the auditor shall provide the best information available to describe the Federal award.  
I11(2) The criteria or specific requirement upon which the audit finding is based, including statutory, regulatory, or other citation.  
I11(3) The condition found, including facts that support the deficiency identified in the audit finding.  
I11(4) Identification of questioned costs and how they were computed.  
I11(5) Information to provide proper perspective for judging the prevalence and consequences of the audit findings, such as whether the audit findings represent an isolated instance or a systemic problem. Where appropriate, instances identified shall be related to the universe and the number of cases examined and be quantified in terms of dollar value.  
I11(6) The possible asserted effect to provide sufficient information to the auditee and Federal agency, or pass-through entity in the case of a subrecipient, to permit them to determine the cause and effect to facilitate prompt and proper corrective action.  
I11(7) Recommendations to prevent future occurrences of the deficiency identified in the audit finding.  
I11(8) Views of responsible officials of the auditee when there is disagreement with the audit findings, to the extent practical.  
I11(c) T3Reference numbers.G1T1 Each audit finding in the schedule of findings and questioned costs shall include a reference number to allow for easy referencing of the audit findings during follow-up.  


I80ï¿½1A3052.515 
I89Audit working papers.  
I11(a) T3Retention of working papers.G1T1 The auditor shall retain working papers and reports for a minimum of three years after the date of issuance of the auditor's report(s) to the auditee, unless the auditor is notified in writing by the cognizant agency for audit, oversight agency for audit, or pass-through entity to extend the retention period. When the auditor is aware that the Federal awarding agency, pass-through entity, or auditee is contesting an audit finding, the auditor shall contact the parties contesting the audit finding for guidance prior to destruction of the working papers and reports.  
I11(b) T3Access to working papers.G1T1 Audit working papers shall be made available upon request to the cognizant or oversight agency for audit or its designee, a Federal agency providing direct or indirect funding, or GAO at the completion of the audit, as part of a quality review, to resolve audit findings, or to carry out oversight responsibilities consistent with the purposes of this part. Access to working papers includes the right of Federal agencies to obtain copies of working papers, as is reasonable and necessary.  


ï¿½213ï¿½I80ï¿½1A3052.520 
I89Major program determination.  
I11(a) T3General.G1T1 The auditor shall use a risk-based approach to determine which Federal programs are major programs. This risk-based approach shall include consideration of: Current and prior audit experience, oversight by Federal agencies and pass-through entities, and the inherent risk of the Federal program. The process in paragraphs (b) through (I) of this section shall be followed. 

I11(b) T3Step 1.G1T1 (1) The auditor shall identify the larger Federal programs, which shall be labeled Type A programs. Type A programs are defined as Federal programs with Federal awards expended during the audit period exceeding the larger of: 
I11(i) $300,000 or three percent (.03) of total Federal awards expended in the case of an auditee for which total Federal awards expended equal or exceed $300,000 but are less than or equal to $100 million.  
I11(ii) $3 million or three-tenths of one percent (.003) of total Federal awards expended in the case of an auditee for which total Federal awards expended exceed $100 million but are less than or equal to $10 billion.  
I11(iii) $30 million or 15 hundredths of one percent (.0015) of total Federal awards expended in the case of an auditee for which total Federal awards expended exceed $10 billion.  
I11(2) Federal programs not labeled Type A under paragraph (b)(1) of this section shall be labeled Type B programs.  
I11(3) The inclusion of large loan and loan guarantees (loans) should not result in the exclusion of other programs as Type A programs. When a Federal program providing loans significantly affects the number or size of Type A programs, the auditor shall consider this Federal program as a Type A program and exclude its values in determining other Type A programs. 
I11(4) For biennial audits permitted under ï¿½1A3052.220, the determination of Type A and Type B programs shall be based upon the Federal awards expended during the two-year period.  
I11(c) T3Step 2.G1T1 (1) The auditor shall identify Type A programs which are low-risk. For a Type A program to be considered low-risk, it shall have been audited as a major program in at least one of the two most recent audit periods (in the most recent audit period in the case of a biennial audit), and, in the most recent audit period, it shall have had no audit findings under ï¿½1A3052.510(a). However, the auditor may use judgment and consider that audit findings from questioned costs under ï¿½1A3052.510(a)(3) and ï¿½1A3052.510(a)(4), fraud under ï¿½1A3052.510(a)(6), and audit follow-up for the summary schedule of prior audit findings under ï¿½1A3052.510(a)(7) do not preclude the Type A program from being low-risk. The auditor shall consider: the criteria in ï¿½1A3052.525(c), ï¿½1A3052.525(d)(1), ï¿½1A3052.525(d)(2), and ï¿½1A3052.525(d)(3); the results of audit follow-up; whether any changes in personnel or systems affecting a Type A program have significantly increased risk; and apply professional judgment in determining whether a Type A program is low-risk.  
I11(2) Notwithstanding paragraph (c)(1) of this section, OMB may approve a Federal awarding agency's request that a Type A program at certain recipients may not be considered low-risk. For example, it may be necessary for a large Type A program to be audited as major each year at particular recipients to allow the Federal agency to comply with the Government Management Reform Act of 1994 (31 U.S.C. 3515). The Federal agency shall notify the recipient and, if known, the auditor at least 180 days prior to the end of the fiscal year to be audited of OMB's approval.  
I11(d) T3Step 3.G1T1 (1) The auditor shall identify Type B programs which are high-risk using professional judgment and the criteria in ï¿½1A3052.525. However, should the auditor select Option 2 under Step 4 (paragraph (e)(2)(i)(B) of this section), the auditor is not required to identify more high-risk Type B programs than the number of low-risk Type A programs. Except for known reportable conditions in internal control or compliance problems as discussed in ï¿½1A3052.525(b)(1), ï¿½1A3052.525(b)(2), and ï¿½1A3052.525(c)(1), a single criteria in ï¿½1A3052.525 would seldom cause a Type B program to be considered high-risk.  
I11(2) The auditor is not expected to perform risk assessments on relatively ï¿½214ï¿½small Federal programs. Therefore, the auditor is only required to perform risk assessments on Type B programs that exceed the larger of:  
I11(i) $100,000 or three-tenths of one percent (.003) of total Federal awards expended when the auditee has less than or equal to $100 million in total Federal awards expended.  
I11(ii) $300,000 or three-hundredths of one percent (.0003) of total Federal awards expended when the auditee has more than $100 million in total Federal awards expended. 
I11(e) T3Step 4.G1T1 At a minimum, the auditor shall audit all of the following as major programs: 
I11(1) All Type A programs, except the auditor may exclude any Type A programs identified as low-risk under Step 2 (paragraph (c)(1) of this section). 
I11(2)(i) High-risk Type B programs as identified under either of the following two options:  
I11(A) T3Option 1.G1T1 At least one half of the Type B programs identified as high-risk under Step 3 (paragraph (d) of this section), except this paragraph (e)(2)(i)(A) does not require the auditor to audit more high-risk Type B programs than the number of low-risk Type A programs identified as low-risk under Step 2.  
I11(B) T3Option 2.G1T1 One high-risk Type B program for each Type A program identified as low-risk under Step 2.  
I11(ii) When identifying which high-risk Type B programs to audit as major under either Option 1 or 2 in paragraph (e)(2)(i) (A) or (B), the auditor is encouraged to use an approach which provides an opportunity for different high-risk Type B programs to be audited as major over a period of time.  
I11(3) Such additional programs as may be necessary to comply with the percentage of coverage rule discussed in paragraph (f) of this section. This paragraph (e)(3) may require the auditor to audit more programs as major than the number of Type A programs.  
I11(f) T3Percentage of coverage rule.G1T1 The auditor shall audit as major programs Federal programs with Federal awards expended that, in the aggregate, encompass at least 50 percent of total Federal awards expended. If the auditee meets the criteria in ï¿½1A3052.530 for a low-risk auditee, the auditor need only audit as major programs Federal programs with Federal awards expended that, in the aggregate, encompass at least 25 percent of total Federal awards expended.  
I11(g) T3Documentation of risk.G1T1 The auditor shall document in the working papers the risk analysis process used in determining major programs.  
I11(h) T3Auditor's judgment.G1T1 When the major program determination was performed and documented in accordance with this part, the auditor's judgment in applying the risk-based approach to determine major programs shall be presumed correct. Challenges by Federal agencies and pass-through entities shall only be for clearly improper use of the guidance in this part. However, Federal agencies and pass-through entities may provide auditors guidance about the risk of a particular Federal program and the auditor shall consider this guidance in determining major programs in audits not yet completed.  
I11(i) T3Deviation from use of risk criteria.G1T1 For first-year audits, the auditor may elect to determine major programs as all Type A programs plus any Type B programs as necessary to meet the percentage of coverage rule discussed in paragraph (f) of this section. Under this option, the auditor would not be required to perform the procedures discussed in paragraphs (c), (d), and (e) of this section.  
I11(1) A first-year audit is the first year the entity is audited under this part or the first year of a change of auditors.  
I11(2) To ensure that a frequent change of auditors would not preclude audit of high-risk Type B programs, this election for first-year audits may not be used by an auditee more than once in every three years.  


I80ï¿½1A3052.525 
I89Criteria for Federal program risk.  
I11(a) T3General.G1T1 The auditor's determination should be based on an overall evaluation of the risk of noncompliance occurring which could be material to the Federal program. The auditor shall use auditor judgment and consider criteria, such as described in paragraphs (b), (c), and (d) of this section, to identify risk in Federal programs. Also, as part of the risk analysis, the auditor may wish to discuss a particular Federal program ï¿½215ï¿½with auditee management and the Federal agency or pass-through entity.  
I11(b) T3Current and prior audit experience.G1T1 (1) Weaknesses in internal control over Federal programs would indicate higher risk. Consideration should be given to the control environment over Federal programs and such factors as the expectation of management's adherence to applicable laws and regulations and the provisions of contracts and grant agreements and the competence and experience of personnel who administer the Federal programs. 
I11(i) A Federal program administered under multiple internal control structures may have higher risk. When assessing risk in a large single audit, the auditor shall consider whether weaknesses are isolated in a single operating unit (e.g., one college campus) or pervasive throughout the entity.  
I11(ii) When significant parts of a Federal program are passed through to subrecipients, a weak system for monitoring subrecipients would indicate higher risk.  
I11(iii) The extent to which computer processing is used to administer Federal programs, as well as the complexity of that processing, should be considered by the auditor in assessing risk. New and recently modified computer systems may also indicate risk.  
I11(2) Prior audit findings would indicate higher risk, particularly when the situations identified in the audit findings could have a significant impact on a Federal program or have not been corrected.  
I11(3) Federal programs not recently audited as major programs may be of higher risk than Federal programs recently audited as major programs without audit findings.  
I11(c) T3Oversight exercised by Federal agencies and pass-through entities.G1T1 (1) Oversight exercised by Federal agencies or pass-through entities could indicate risk. For example, recent monitoring or other reviews performed by an oversight entity which disclosed no significant problems would indicate lower risk. However, monitoring which disclosed significant problems would indicate higher risk.  
I11(2) Federal agencies, with the concurrence of OMB, may identify Federal programs which are higher risk. OMB plans to provide this identification in the compliance supplement.  
I11(d) T3Inherent risk of the Federal program.G1T1 (1) The nature of a Federal program may indicate risk. Consideration should be given to the complexity of the program and the extent to which the Federal program contracts for goods and services. For example, Federal programs that disburse funds through third party contracts or have eligibility criteria may be of higher risk. Federal programs primarily involving staff payroll costs may have a high-risk for time and effort reporting, but otherwise be at low-risk.  
I11(2) The phase of a Federal program in its life cycle at the Federal agency may indicate risk. For example, a new Federal program with new or interim regulations may have higher risk than an established program with time-tested regulations. Also, significant changes in Federal programs, laws, regulations, or the provisions of contracts or grant agreements may increase risk.  
I11(3) The phase of a Federal program in its life cycle at the auditee may indicate risk. For example, during the first and last years that an auditee participates in a Federal program, the risk may be higher due to start-up or closeout of program activities and staff.  
I11(4) Type B programs with larger Federal awards expended would be of higher risk than programs with substantially smaller Federal awards expended.  


I80ï¿½1A3052.530 
I89Criteria for a low-risk auditee.  
I11An auditee which meets all of the following conditions for each of the preceding two years (or, in the case of biennial audits, preceding two audit periods) shall qualify as a low-risk auditee and be eligible for reduced audit coverage in accordance with ï¿½1A3052.520:  
I11(a) Single audits were performed on an annual basis in accordance with the provisions of this part. A non-Federal entity that has biennial audits does not qualify as a low-risk auditee, unless agreed to in advance by the cognizant or oversight agency for audit.  
I11(b) The auditor's opinions on the financial statements and the schedule of expenditures of Federal awards were unqualified. However, the cognizant or ï¿½216ï¿½oversight agency for audit may judge that an opinion qualification does not affect the management of Federal awards and provide a waiver.  
I11(c) There were no deficiencies in internal control which were identified as material weaknesses under the requirements of GAGAS. However, the cognizant or oversight agency for audit may judge that any identified material weaknesses do not affect the management of Federal awards and provide a waiver.  
I11(d) None of the Federal programs had audit findings from any of the following in either of the preceding two years (or, in the case of biennial audits, preceding two audit periods) in which they were classified as Type A programs:  
I11(1) Internal control deficiencies which were identified as material weaknesses;  
I11(2) Noncompliance with the provisions of laws, regulations, contracts, or grant agreements which have a material effect on the Type A program; or  
I11(3) Known or likely questioned costs that exceed five percent of the total Federal awards expended for a Type A program during the year.




F8008I327 CFR Ch. XXXI (1ï¿½091ï¿½0900 Edition)
I33Office of Environmental Quality, USDA


ï¿½217ï¿½I04CHAPTER XXXI_OFFICE OF ENVIRONMENTAL QUALITY, DEPARTMENT OF AGRICULTURE
I03
I87Part
I88Page
I483100
I49Cultural and environmental quality
I59219



F80103I327 CFR Ch. XXXI (1ï¿½091ï¿½0900 Edition)
I33Office of Environmental Quality, USDA

ï¿½219ï¿½I95Pt. 3100
I52PART 3100_CULTURAL AND ENVIRONMENTAL QUALITY
S8006I86Subparts Aï¿½09B [Reserved]
S8010
I86Subpart C_Enhancement, Protection, and Management of the Cultural Environment
S8006I18Sec. 
S8010I263100.40Purpose. 
I263100.41Authorities. 
I263100.42Definitions. 
I263100.43Policy. 
I263100.44Implementation. 
I263100.45Direction to agencies. 
I263100.46Responsibilities of the Department of Agriculture. 
S8006I56Subparts Aï¿½09B [Reserved]
S8010
I56Subpart C_Enhancement, Protection, and Management of the Cultural Environment
Q04I21T5Authority:  T1Sec. 106, National Historic Preservation Act, as amended (16 U.S.C. 470f); National Environmental Policy Act, as amended (42 U.S.C. 4321 T3et seq.G1T1); E.O. 11593, 36 FR 8921, May 13, 1971.
Q04I21T5Source:  T144 FR 66181, Nov. 19, 1979, unless otherwise noted. 

I80ï¿½1A3100.40
I89Purpose.
I11(a) This subpart establishes USDA policy regarding the enhancement, protection, and management of the cultural environment.
I11(b) This subpart establishes procedures for implementing Executive Order 11593, and regulations promulgated by the Advisory Council on Historic Preservation (ACHP) ``Protection of Historical and Cultural Properties'' in 36 CFR part 800 as required by ï¿½1A800.10 of those regulations.
I11(c) Direction is provided to the agencies of USDA for protection of the cultural environment.

I80ï¿½1A3100.41
I89Authorities.
I11These regulations are based upon and implement the following laws, regulations, and Presidential directives:
I11(a) T3Antiquities Act of 1906G1T1 (Pub. L. 59ï¿½09209; 34 Stat. 225; 16 U.S.C. 431 T3et seq.G1T1) which provides for the protection of historic or prehistoric remains or any object of antiquity on Federal lands; establishes criminal sanctions for unauthorized destruction or appropriation of antiquities; and authorizes scientific investigation of antiquities on Federal lands, subject to permit and regulations. Paleontological resources also are considered to fall within the authority of this Act.
I11(b) T3Historic Sites Act of 1935G1T1 (Pub. L. 74ï¿½09292; 49 Stat. 666; 16 U.S.C. 461 T3et seq.G1T1) which authorizes the establishment of National Historic Sites and otherwise authorizes the preservation of properties of national historical or archeological significance; authorizes the designation of National Historic Landmarks; establishes criminal sanctions for violation of regulations pursuant to the Act; authorizes interagency, intergovernmental, and interdisciplinary efforts for the preservation of cultural resources; and other provisions.
I11(c) T3Reservoir Salvage Act of 1960G1T1 (Pub. L. 86ï¿½09521; 74 Stat. 220; 16 U.S.C. 469ï¿½09469c.) which provides for the recovery and preservation of historical and archeological data, including relics and specimens, that might be lost or destroyed as a result of the construction of dams, reservoirs, and attendant facilities and activities.
I11(d) T3The National Historic Preservation Act of 1966G1T1 as amended (16 U.S.C. 470), which establishes positive national policy for the preservation of the cultural environment, and sets forth a mandate for protection in section 106. The purpose of section 106 is to protect properties on or eligible for the National Register of Historic Places through review and comment by the ACHP of Federal undertakings that affect such properties. Properties are listed on the National Register or declared eligible for listing by the Secretary of the Interior. As developed through the ACHP's regulations, section 106 establishes a public interest process in which the Federal agency proposing an undertaking, the State Historic Preservation Officer, the ACHP, interested organizations and individuals participate. The process is designed to insure that properties, impacts on them, and effects to them are identified, and that alternatives to avoid or mitigate an adverse effect on property eligible for the National Register are adequately considered in the planning process.
I11(e) T3The National Environmental Policy Act of 1969G1T1 (NEPA) (Pub. L. 91ï¿½09190; 83 ï¿½220ï¿½Stat. 852; 42 U.S.C. 4321 T3et seq.G1T1) which declares that it is the policy of the Federal Government to preserve important historic, cultural, and natural aspects of our national heritage. Compliance with NEPA requires consideration of all environmental concerns during project planning and execution.
I11(f) T3Executive Order 11593, ``Protection and Enhancement of the Cultural Environment'',G1T1 which gives the Federal Government the responsibility for stewardship of our nation's heritage resources and charges Federal agencies with the task of inventorying historic and prehistoric sites on their lands. E.O. 11593 also charges agencies with the task of identifying and nominating all historic properties under their jurisdiction, and exercising caution to insure that they are not transferred, sold, demolished, or substantially altered.
I11(g) T3Historical and Archeological Data Preservation Act of 1974.G1T1 (Pub. L. 93ï¿½09291; 88 Stat. 174.) which amends the Reservoir Salvage Act of 1960 to extend its provisions beyond the construction of dams to any alteration of the terrain caused as a result of any Federal construction project or federally licensed activity or program. In addition, the Act provides a mechanism for funding the protection of historical and archeological data.
I11(h) T3Presidential memorandum of July 12, 1978, ``Environmental Quality and Water Resource Management''G1T1 which directs the ACHP to publish final regulations, implementing section 106 of the National Historic Preservation Act (NHPA), and further directs each agency with water and related land resources responsibilities to publish procedures implementing those regulations.
I11(i) T336 CFR part 800,G1T1 ``Protection of Historic and Cultural Properties'' which establishes procedures for the implementation of section 106 of the NHPA, and directs publication of agency implementing procedures.
I11(j) T3Land use policy of the USDA (Secretary's Memorandum No. 1827 Revised, with Supplement)G1T1 which establishes a commitment by the Department to the preservation of farms, rural communities, and rural landscapes.
I11(k) T3Public Buildings Cooperative Use Act of 1976 (40 U.S.C. 611) and Executive Order 12072 (Federal Space Management).G1T1 The Act encourages adaptive use of historic buildings as administrative facilities for Federal agencies and activities; the Executive Order directs Federal agencies to locate administrative and other facilities in central business districts.
I11(l) T3American Indian Religious Freedom Act of 1978 (42 U.S.C. 1996)G1T1 which declares it to be the policy of the United States to protect and preserve for American Indians their inherent right of freedom to believe, express, and exercise the traditional religions of the American Indian, Eskimo, Aleut, and Native Hawaiians.

I80ï¿½1A3100.42
I89Definitions.
I11All definitions are those which appear in 36 CFR part 800. In addition, the following apply in this rule:
I11T3Cultural resources (heritage resources)G1T1 are the remains or records of districts, sites, structures, buildings, networks, neighborhoods, objects, and events from the past. They may be historic, prehistoric, archeological, or architectural in nature. Cultural resources are an irreplaceable and nonrenewable aspect of our national heritage.
I11T3Cultural environmentG1T1 is that portion of the environment which includes reminders of the rich historic and prehistoric past of our nation.

I80ï¿½1A3100.43
I89Policy.
I11(a) The nonrenewable cultural environment of our country constitutes a valuable and treasured portion of the national heritage of the American people. The Department of Agriculture is committed to the management_identification, protection, preservation, interpretation, evaluation and nomination_of our prehistoric and historic cultural resources for the benefit of all people of this and future generations.
I11(b) The Department supports the cultural resource goals expressed in Federal legislation. Executive orders, and regulations.
I11(c) The Department supports the preservation and protection of farms, rural landscapes, and rural communities.
I11(d) The Department is committed to consideration of the needs of American ï¿½221ï¿½Indians, Eskimo, Aleut, and Native Hawaiians in the practice of their traditional religions. 
I11(e) The Department will aggressively implement these policies to meet goals for the positive management of the cultural environment.

I80ï¿½1A3100.44
I89Implementation.
I11(a) It is the intent of the Department to carry out its program of management of the cultural environment in the most effective and efficient manner possible. Implementation must consider natural resource utilization, must exemplify good government, and must constitute a noninflationary approach which makes the best use of tax dollars.
I11(b) The commitment to cultural resource protection is vital. That commitment will be balanced with the multiple departmental goals of food and fiber production, environmental protection, natural resource and energy conservation, and rural development. It is essential that all of these be managed to reduce conflicts between programs. Positive management of the cultural environment can contribute to achieving better land use, protection of rural communities and farm lands, conservation of energy, and more efficient use of resources.
I11(c) In reaching decisions, the long-term needs of society and the irreversible nature of an action must be considered. The Department must act to preserve future options; loss of important cultural resources must be avoided except in the face of overriding national interest where there are no reasonable alternatives.
I11(d) To assure the protection of Native American religious practices, traditional religious leaders and other native leaders (or their representatives) should be consulted about potential conflict areas in the management of the cultural environment and the means to reduce or eliminate such conflicts.

I80ï¿½1A3100.45
I89Direction to agencies.
I11(a) Each agency of the Department shall consult with OEQ to determine whether its programs and activities may affect the cultural environment. Then, if needed, the agency, in consultation with the OEQ, shall develop its own specific procedures for implementing section 106 of the National Historic Preservation Act, Executive Order 11593, the regulations of the ACHP (36 CFR part 800), the American Indian Religious Freedom Act of 1978 and other relevant legislation and regulations in accordance with the agency's programs, mission and authorities. Such implementing procedures shall be published as proposed and final procedures in the T4Federal Register,G1T1 and must be consistent with the requirements of 36 CFR part 800 and this subpart. Where applicable, each agency's procedures must contain mechanisms to insure:
I11(1) Compliance with section 106 of NHPA and mitigation of adverse effects to cultural properties on or eligible for the National Register of Historic Places;
I11(2) Clear definition of the kind and variety of sites and properties which should be managed;
I11(3) Development of a long-term program of management of the cultural environment on lands administered by USDA as well as direction for project-specific protection;
I11(4) Identification of all properties listed on or eligible for listing in the National Register that may be affected directly or indirectly by a proposed activity;
I11(5) Location, identification and nomination to the Register of all sites, buildings, objects, districts, neighborhoods, and networks under its management which appear to qualify (in compliance with E.O. 11593);
I11(6) The exercise of caution to assure that properties managed by USDA which may qualify for nomination are not transferred, sold, demolished, or substantially altered;
I11(7) Early consultation with, and involvement of, the State Historic Preservation Officer(s), the ACHP, Native American traditional religious leaders and appropriate tribal leaders, and others with appropriate interests or expertise;
I11(8) Early notification to insure substantive and meaningful involvement by the public in the agency's decisionmaking process as it relates to the cultural environment;
ï¿½222ï¿½I11(9) Identification and consideration of alternatives to a proposed undertaking that would mitigate or minimize adverse effects to a property identified under paragraph (a)(4) of this section;
I11(10) Funding of mitigation measures where required to minimize the potential for adverse effects on the cultural environment. Funds for mitigation shall be available and shall be spent when needed during the life of the project to mitigate the expected loss; and
I11(11) Development of plans to provide for the management, protection, maintenance and/or restoration of Register sites under its management.
I11(b) Each agency of the Department which conducts programs or activities that may have an effect on the cultural environment shall recruit, place, develop, or otherwise have available, professional expertise in anthropology, archeology, history, historic preservation, historic architecture, and/or cultural resource management (depending upon specific need). Such arrangements may include internal hiring, Intergovernmental Personnel Act assignments, memoranda of agreement with other agencies or Departments, or other mechanisms which insure a professionally directed program. Agencies should use Department of the Interior professional standards (36 CFR 61.5) as guidelines to insure Departmentwide competence and consistency.
I11(c) Compliance with cultural resource legislation is the responsibility of each individual agency. Consideration of cultural resource values must begin during the earliest planning stages of any undertaking. 
I11(d) Agency heads shall insure that cultural resource management activities meet professional standards as promulgated by the Department of the Interior (e.g., 36 CFR parts 60, 63, 66, 1208). 
I11(e) Cultural resource review requirements and compliance with section 106 of NHPA and Executive Order 11593 shall be integrated and run concurrently, rather than consecutively, with the other environmental considerations under NEPA regulations. As such, direct and indirect impacts on cultural resources must be addressed in the environmental assessment for every agency undertaking. In meeting these requirements, agencies shall be guided by regulations implementing the procedural provisions of NEPA (40 CFR parts 1500ï¿½091508) and Department of Agriculture regulations (7 CFR part 3100, subpart B). 
I11(f) Each agency shall work closely with the appropriate State Historic Preservation Officer(s) in their preparation of State plans, determination of inventory needs, and collection of data relevant to general plans or specific undertakings in carrying out mutual cultural resource responsibilities. 
I11(g) Each agency shall, to the maximum extent possible, use existing historic structures for administrative purposes in compliance with Public Buildings Cooperative Use Act of 1976 and Executive Order 12072, ``Federal Space Management''. 
I11(h) Each agency should consult with Native American traditional religious leaders or their representatives and other native leaders in the development and implementation of cultural resource programs which may affect their religious customs and practices. 

I80ï¿½1A3100.46 
I89Responsibilities of the Department of Agriculture. 
I11(a) Within the Department, the responsibility for the protection of the cultural environment is assigned to the Office of Environmental Quality (OEQ). The Office is responsible for reviewing the development and implementation of agency procedures and insuring Departmental commitment to cultural resource goals. 
I11(b) The Director of the OEQ is the Secretary's Designee to the ACHP. 
I11(c) In order to carry out cultural resource responsibilities, there will be professional expertise within the OEQ to advise agencies, aid the Department in meeting its cultural resource management goals, and to insure that all Departmental and agency undertakings comply with applicable cultural resource protection legislation and regulations. 
I11(d) The OEQ will be involved in individual compliance cases only where resolution cannot be reached at the agency level. Prior to the decision to refer a matter to the full Council of the ï¿½223ï¿½ACHP, the OEQ will review the case and make recommendations to the Secretary regarding the position of the Department. The agency also will consult with the OEQ before reaching a final decision in response to the Council's comments. Copies of correspondence relevant to compliance with Section 106 shall be made available to OEQ.






F8008I327 CFR Ch. XXXII (1ï¿½091ï¿½0900 Edition)
I33Office of Procurement and Property Management, USDA


ï¿½225ï¿½I04CHAPTER XXXII_OFFICE OF PROCUREMENT AND PROPERTY MANAGEMENT, DEPARTMENT OF AGRICULTURE 
I03
I87Part
I88Page


I483200
I49Department of Agriculture guidelines for the acquisition and transfer of excess personal property
I59227

Q02
I483201ï¿½093299
I46[Reserved]





F80103I327 CFR Ch. XXXII (1ï¿½091ï¿½0900 Edition)
I33Office of Procurement and Property Management, USDA

ï¿½227ï¿½I95Pt. 3200
I52PART 3200_DEPARTMENT OF AGRICULTURE GUIDELINES FOR THE ACQUISITION AND TRANSFER OF EXCESS PERSONAL PROPERTY
S8006I18Sec.
S8010I263200.1Purpose.
I263200.2Eligibility.
I263200.3Definitions.
I263200.4Procedures.
I263200.5Dollar limitation.
I263200.6Restrictions.
I263200.7Title.
I263200.8Costs.
I263200.9Accountability and record keeping.
I263200.10Disposal.
I263200.11Liabilities and losses.


Q04I21T5Authority: T15 U.S.C. 301; 7 U.S.C. 2206a.

Q04I21T5Source: T163 FR 57234, Oct. 27, 1998, unless otherwise noted.




I80ï¿½1A3200.1
I89Purpose.
I11This Part sets forth the procedures to be utilized by Department of Agriculture (USDA) in the acquisition and transfer of excess property to the 1890 Land Grant Institutions (including Tuskegee University), 1994 Land Grant Institutions, and the Hispanic-Serving Institutions in support of research, educational, technical, and scientific activities or for related programs as authorized by 7 U.S.C. 2206a. Title to the personal property shall pass to the institution.


I80ï¿½1A3200.2
I89Eligibility.
I11Institutions that are eligible to receive Federal excess personal property pursuant to the provisions of this part are the 1890 Land Grant Institutions (including Tuskegee University), 1994 Land Grant Institutions, and the Hispanic-Serving Institutions conducting research, educational, technical, and scientific activities or related programs.


I80ï¿½1A3200.3
I89Definitions.
I11(a) T31890 Land grant institutionsG1T1_any college or university eligible to receive funds under the Act of August 30, 1890 (7 U.S.C. 321 et.seq.), including Tuskegee University.
I11(b) T31994 Land grant institutionsG1T1_any of the tribal colleges or universities as defined in section 532 of the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note).
I11(c) T3Hispanic-serving institutionsG1T1_institutions of higher education as defined in section 316(b) of the Higher Education Act of 1965 (20 U.S.C. 1059c (b)).
I11(d) T3Property management officerG1T1_is an authorized USDA or institution official responsible for property management.
I11(e) T3ScreenerG1T1_is an individual designated by an eligible institution and authorized by the General Services Administration (GSA) to visit property sites for the purpose of inspecting personal property intended for use by the institution.
I11(f) T3Excess personal propertyG1T1_is any personal property under the control of a Federal agency that is no longer needed.
I11(g) T3CannibalizationG1T1_is the dismantling of equipment for parts to repair or enhance other equipment.


I80ï¿½1A3200.4
I89Procedures.
I11(a) To receive information concerning the availability of Federal excess personal property, an eligible institution's property management officer may contact their regional GSA, Area Utilization Officer. All property management officers of eligible institutions will be placed on the USDA mailing list for information on the availability of property. USDA excess property will first be screened by USDA agencies through the Departmental Excess Personal Property Coordinator (DEPPC) using the PMIS/PROP system.
I11(b) Excess property selected by screeners of eligible institutions should be inspected whenever possible, or the holding agency should be contacted to verify the condition of the items, because interpretation of condition codes varies among Federal agencies.
I11(c) If the condition of the item is acceptable, the institution should ``freeze'' (reserve) items by calling the appropriate GSA office or USDA Departmental Excess Personal Property Coordinator (DEPPC). Since GSA may have several ``freezes'' on a piece of equipment, it is critical that the paperwork be submitted as soon as possible. Further, while transfers of excess personal property normally will be approved by GSA on a first-come-first-serve basis, consideration will be given ï¿½228ï¿½to such factors as national defense requirements, emergency needs, preclusion of new procurement, energy conservation, equitable distribution, and retention of title in the Government.
I11(d) Eligible institutions may submit property requests by mail or fax on a Standard Form 122, ``Transfer Order Excess Personal Property,'' with a written justification statement (submitted by the recipient) explaining how the property will be used for research, educational, technical, or scientific activity or for related programs.
I11(e) The SFï¿½09122 should be signed by the eligible institution's property management officer or authorized designee.
I11(1) The following information should also be provided:
I11(i) Date prepared.
I11(ii) GSA/DEPPC address.
I11(iii) Ordering Agency and address.
I11(iv) Holding Agency and address.
I11(v) Name and address of Institution.
I11(vi) Location of property.
I11(vii) Shipping instruction (including institution contact person and phone number).
I11(viii) Complete description of property including original acquisition cost, serial number, condition code, and quantity.


I11(2) This statement needs to be added following the property description but does not serve as a justification statement:

Q04



I21The property requested hereon is certified to be used in support of research, educational, technical, and scientific activities or for related programs. This transfer is requested pursuant to the provisions of section 923 of Pub. L. 104ï¿½09127 (7 U.S.C. 2206a).

Q04

I11(f) The SFï¿½09122 should be forwarded to USDA for approval and signature by an authorized USDA official. As confirmation of approval, the eligible institution's property management officer will receive a stamped copy of the SFï¿½09122. If the request is disapproved, it will be returned to the property management officer of the eligible institution with an appropriate explanation. All USDA approved SFï¿½09122's will be forwarded to DEPPC or the appropriate GSA office for final approval.
I11(g) Once the excess personal property is physically received, the institution is required to immediately return a copy of the SFï¿½09122 to USDA indicating receipt of requested items. Cancellations should also be reported to USDA.

Q04

I21T5Note: T1USDA shall send an informational copy of all SFï¿½09122's transactions to GSA.


I80ï¿½1A3200.5
I89Dollar limitation.
I11There is no dollar limitation on excess personal property obtained under these procedures.


I80ï¿½1A3200.6
I89Restrictions.
I11(a) The authorized USDA official will approve the transfer of excess personal property in the following groups for the 1890 Land Grant Institutions (including Tuskegee University), 1994 Land Grant Institutions and the Hispanic-Serving Institutions in support of research, educational, technical, and scientific activities or for related programs:

c2,L2,i1,xs48,r25  I95T4Eligible Federal Supply Code Groups
h1FSC group h1Name
j
I0112 DFire Control Equipment.
I0119DShips, Small Crafts, Pontoons, and Floating Docks.
I0122DRailway Equipment.
I0123DVehicles, Motor Vehicles, Trailers and Cycles.
I0124DTractors.
I0126DTires and Tubes.
I0128DEngines, Turbines and Components.
I0129DEngine Accessories.
I0130DMechanical Power Transmission Equipment.
I0131DBearings.
I0132DWoodworking Machinery and Equipment.
I0134DMetal Working Machinery.
I0135DService and Trade Equipment.
I0136DSpecial Industry Machinery.
I0137DAgricultural Machinery and Equipment.
I0138DConstruction, Mining, Excavating, and Highway Maintenance Equipment.
I0139DMaterial Handling Equipment.
I0140DRope, Cable, Chain, and Fittings.
I0141DRefrigeration, Air Conditioning and Air Circulating Equipment.
I0142DFire Fighting, Rescue, and Safety Equipment.
I0143DPumps, Compressors.
I0144DFurnace, Steam Plant, and Drying.
I0145DPlumbing, Heating, and Sanitation Equipment; and Nuclear Reactors.
I0146DWater Purification and Sewage Treatment Equipment.
I0147DPipe, Tubing, Hose, and Fittings.
I0149DMaintenance and Repair Shop Equipment.
I0151DHand Tools.
I0152DMeasuring Tools.
I0153DHardware and Abrasives.
I0154DPrefabricated Structures and Scaffolding.
I0155DLumber, Millwork, Plywood, and Veneer.
I0156DConstruction and Building Materials.
ï¿½229ï¿½I0158DCommunication, Detection, and Coherent Radiation Equipment.
I0159DElectrical and Electronic Equipment Components.
I0160DFiber Optics Materials, Components, Assemblies, and Accessories.
I0161DElectric Wire, and Power and Distribution Equipment.
I0162DLighting Fixtures and Lamps.
I0163DAlarm, Signal, and Security Detection Systems.
I0165DMedical, Dental, and Veterinary Equipment and Supplies.
I0166DInstruments and Laboratory Equipment.
I0167DPhotographic Equipment.
I0169DTraining Aids and Devices.
I0170DGeneral Purposes Automatic Data Processing Equipment (Including Firmware) Software, and Support Equipment.
I0171DFurniture.
I0172DHousehold and Commercial Furnishings and Appliances.
I0173DFood Preparation and Serving Equipment.
I0174DOffice Machines, Text Processing Systems and Visible Record Equipment.
I0175DOffice Supplies and Devices.
I0176DBooks, Maps, and Other Publications.
I0177DMusical Instruments, Phonographs, and Home-type Radios.
I0178DRecreational and Athletic Equipment.
I0179DCleaning Equipment and Supplies.
I0180DBrushes, Paints, Sealers, and Adhesives.
I0181DContainers, Packaging and Packing Supplies.
I0183DTextiles, Leather, Furs, Apparel and Shoe Findings, Tents, and Flags.
I0184DClothing, Individual Equipment and Insignia.
I0185DToiletries.
I0187DAgricultural Supplies.
I0188DLive Animals.
I0191DFuels, Lubricants, Oils and Waxes.
I0193DNonmetallic Fabricated Materials.
I0194DNonmetallic Crude Materials.
I0195DMetal Bars, Sheets, and Shapes.
I0196DOres, Minerals and their Primary Products.
I0199DMiscellaneous.

e


Q04
I21T5Note to paragraph T1(a): Requests for items in Federal Supply Code Groups other than those listed in this paragraph shall be referred to the Director of OPPM for consideration and approval.

I11(b) Excess personal property may be transferred for the purpose of cannibalization, provided the eligible institution submits a supporting statement which clearly indicates that cannibalizing the requested property for secondary use has greater benefit than utilization of the item in its existing form.
I11(c) Use of the procedures in this part for the purpose of stockpiling of excess personal property for future cannibalization is prohibited. Transfer requests for the purpose of cannibalization will be considered, but are normally subordinate to requests for complete items.


I80ï¿½1A3200.7
I89Title.
I11Title to excess personal property obtained under Part 3200 will automatically pass to the 1890 Land Grant Institutions (including Tuskegee University), 1994 Land Grant Institutions, and the Hispanic-Serving Institutions once USDA receives the SFï¿½09122 indicating that the institution has received the property. Note: When competing Federal claims are made for particular items of excess personal property held by agencies other than USDA, with or without payment of reimbursement, GSA will give preference to the Federal agency that will retain title in the Government.


I80ï¿½1A3200.8
I89Costs.
I11Excess personal property obtained under this part is provided free of charge. However, the institution must pay all costs associated with packaging and transportation. The institution should specify the method of shipment on the SFï¿½09122.


I80ï¿½1A3200.9
I89Accountability and record keeping.
I11USDA requires that Federal excess personal property received by an eligible institution pursuant to this part shall be placed into use for a research, educational, technical, or scientific activity, or for a related purpose, within 1 year of receipt of the property, and used for such purpose for at least 1 year thereafter. The institution's property management officer must establish and maintain accountable records identifying the property's location, description, utilization and value. To ensure that the excess personal property is being used for its intended purpose under this part, compliance reviews will be conducted by an authorized representative of USDA. The review will include site visit inspections of the property and the accountability and record keeping systems.


ï¿½230ï¿½I80ï¿½1A3200.10
I89Disposal.
I11When the property is no longer needed by the institution, it may be used in support of other Federal projects or sold, and the proceeds used for research, educational, technical, and scientific activities, or for related programs of the recipient institution.


I80ï¿½1A3200.11
I89Liabilities and losses.
I11USDA assumes no liability with respect to accidents, bodily injury, illness, or any other damages or loss related to excess personal property transferred under this part.
S8006I53PARTS 3201ï¿½093299[RESERVED]
S8010
F8008I327 CFR Ch. XXXIII (1ï¿½091ï¿½0900 Edition)
I33Office of Transportation, USDA


ï¿½231ï¿½I04CHAPTER XXXIII_OFFICE OF TRANSPORTATION, DEPARTMENT OF AGRICULTURE 
I03
I87Part
I88Page
I483300
I49Agreement on the international carriage of perishable foodstuffs and on the special equipment to be used for such carriage (ATP); inspection, testing, and certification of special equipment
I59233
Q02
I483305
I46[Reserved]


F80103I327 CFR Ch. XXXIII (1ï¿½091ï¿½0900 Edition)
I33Office of Transportation, USDA
ï¿½233ï¿½I95Pt. 3300
I52PART 3300_AGREEMENT ON THE INTERNATIONAL CARRIAGE OF PERISHABLE FOODSTUFFS AND ON THE SPECIAL EQUIPMENT TO BE USED FOR SUCH CARRIAGE (ATP); INSPECTION, TESTING, AND CERTIFICATION OF SPECIAL EQUIPMENT 


I86Subpart A_Introduction
S8006I18Sec. 
S8010I263300.1Scope of authority and purpose.
I263300.4Definitions. 

I86Subpart B_Procedures for Testing of Equipment 
I263300.7General. 
I263300.10Measurement of the K-coefficient of an insulated body. 
I263300.13Determination of the efficiency of the thermal appliances as installed in the insulated body. 

I86Subpart C_Approval of Testing Stations 
I263300.16General. 
I263300.19Application for approval. 
I263300.22Response to application for approval. 
I263300.25Application for renewal of approval. 
I263300.28Response to application for renewal of approval. 
I263300.31Termination of approval. 

I86Subpart D_Procedures for Separate Testing of Mechanical Refrigerating Appliances 
I263300.34General. 
I263300.37Testing of a mechanical refrigerating appliance. 

I86Subpart E_Approval of Testing Laboratories 
I263300.40General. 
I263300.43Application for approval. 
I263300.46Response to application for approval. 
I263300.49Application for renewal of approval. 
I263300.52Response to application for renewal of approval. 
I263300.55Termination of approval. 

I86Subpart F_Certification of New Equipment 
I263300.58General. 
I263300.61Testing and verification requirements. 
I263300.64Application for certificate for new equipment produced or assembled in the United States or in a foreign country which is not a contracting party to the ATP. 
I263300.67Application for certificate for new equipment produced or assembled in a foreign country which is a contracting party to the ATP. 
I263300.70Issuance of certificate. 
I263300.73Period of validity of certificates. 

I86Subpart G_Certification of Equipment in Service 
I263300.76General. 
I263300.79Application for certificate. 
I263300.82Issuance of certificate. 
I263300.85Period of validity of certificates. 

I86Subpart H_Other Provisions 
I263300.88Fees for U.S. ATP certificates. 
I263300.91List of approved testing stations, approved testing laboratories, and fees for certificates. 
I263300.94Appeals.

Q04I21T5Authority:  T1Sec. 4, Pub. L. 97ï¿½09325, International Carriage of Perishable Foodstuffs Act (7 U.S.C. 4403). 
Q04I21T5Source:  T151 FR 33879, Sept. 24, 1986, unless otherwise noted.

I56Subpart A_Introduction 

I80ï¿½1A3300.1
I89Scope of authority and purpose. 
I11The International Carriage of Perishable Foodstuffs Act assigns to the Secretary of Agriculture the responsibility for implementation of the Agreement on the International Carriage of Perishable Foodstuffs and on the Special Equipment to be Used for Such Carriage (ATP). The purpose of this rule is to establish procedures for the inspection, testing, and certification of insulated, refrigerated, mechanically refrigerated, and heated transport equipment in accordance with the Act and the standards specified in the Agreement. In the process, the intent is to utilize existing industry organizations and facilities for testing and inspection of equipment. The Secretary is the sole authority to issue certificates of compliance. 

I80ï¿½1A3300.4
I89Definitions. 
I11T3AdministratorG1T1 means the Administrator, Office of Transportation, U.S. Department of Agriculture, whose address is: 1405 Auditors Building, 201 14th Street, SW., Washington, DC 20250. 
ï¿½234ï¿½I11T3ATPG1T1 means the Agreement on the International Carriage of Perishable Foodstuffs and on the Special Equipment to be Used for Such Carriage (ATP), and the annexes and appendices thereto, done at Geneva, September 1, 1970, under the auspices of the Economic Commission for Europe, and any subsequent amendments thereto.\1\N 

I28N\1\ï¿½1AA copy of the agreement can be obtained by request to the ATP Manager, Office of Transportation, U.S. Department of Agriculture, 1405 Auditors Building, 201 14th Street, SW., Washington, DC 20250. 

I11T3ATP managerG1T1 means the person designated by the Administrator to manage the program established by this rule, whose address is: ATP Manager, Office of Transportation, U.S Department of Agriculture, 1405 Auditors Building, 201 14th Street, SW., Washington, DC 20250. 
I11T3Contracting partyG1T1 means a country which is signatory to the ATP. 
I11T3Domestic ownerG1T1 means an organization incorporated or chartered under the laws of, and with principal office in, the United States, and to which one of the following applies: 
I11(a) The organization owns and operates the equipment directly. 
I11(b) The organization owns and operates the equipment through a wholly owned subsidiary in a foreign country. 
I11(c) The organization is a lessee or bailee of the equipment, and a written lease or bailment provides that the organization is responsible for any inspection, testing, and certification of the equipment with respect to the ATP rule. 
I11T3EquipmentG1T1 means the special transport equipment that meets the definitions and standards set forth in ATP, Annex 1, including, but not limited to, railcars, trucks, trailers, semitrailers, and intermodal freight containers that have an insulated body only, or an insulated body equipped with a refrigerating, mechanically refrigerating, or heating appliance. 
I11T3Equipment manufacturerG1T1 means an organization which producers or assembles the complete unit of equipment, that is, the insulated body with the thermal appliance installed. 
I11T3Foreign ownerG1T1 means an organization registered under the laws of, or with principal office in, a country outside the United States, and which owns or operates the equipment. 
I11T3Foreign-ATP certificateG1T1 means a certificate issued by a foreign country which is a contracting party to the ATP, attesting that the equipment listed in the certificate complies with pertinent standards in the ATP. 
I11T3Identical mechanical refrigerating applianceG1T1 means an appliance which is of the same model number and design as the reference mechanical refrigerating appliance. 
I11T3Insulated bodyG1T1 means the six-sided structural component of equipment, consisting of insulated doors, sidewalls, roof, floor, and endwall, inside which perishable foodstuffs are carried. 
I11T3International carriageG1T1 means transportation of perishable foodstuffs if such foodstuffs are loaded in equipment or the equipment containing them is loaded onto a rail or road vehicle, in the territory of any country and such foodstuffs are, or the equipment containing them is, unloaded in the territory of another country that is a contracting party, where such transportation is by: 
I11(a) Rail, 
I11(b) Road, 
I11(c) Any combination of rail and road, or 
I11(d) Any sea crossing of less than one hundred and fifty kilometers, if preceded or followed by one or more land journeys as referred to in clauses (a), (b), and (c) of this definition, and the perishable foodstuffs are shipped in the same equipment used for such land journeys without transloading of such foodstuffs. 
Q02I10In the case of any transportation that involves one or more sea crossings other than as specified in clause (d) of this definition, each land journey shall be considered separately. 
I11T3New equipmentG1T1 means equipment produced or assembled on or after the effective date of this rule. 
I11T3Perishable foodstuffsG1T1 means the quick deep-frozen and frozen food products listed in Annex 2, and the chilled food products listed in Annex 3 to the ATP. 
I11T3Reference equipmentG1T1 means a unit of equipment which has passed a test in an approved testing station, and can thereby serve as a basis for certification of related serially-produced equipment. 
ï¿½235ï¿½I11T3Reference insulated bodyG1T1 means an insulated body which has passed a test in an approved testing station for measurement of the K-coefficient of the body, and can thereby serve as the basis for approval of serially-produced bodies in the case in which the body and the mechanical refrigerating appliance of the equipment are tested separately. 
I11T3Reference mechanical refrigerating applianceG1T1 means an appliance which has passed a test in an approved testing laboratory, and can thereby serve as the basis for approval of identical mechanical refrigerating appliances in the case in which the appliance and the insulated body of the equipment are tested separately. 
I11T3Serially-produced bodiesG1T1 means insulated bodies which meet the definition in ATP, Annex 1 Appendix 1, paragraph 2(c)(i). 
I11T3Serially-produced equipmentG1T1 means equipment of a specific type (container, semi-trailer, trailer, truck, or container), which meets the definition in ATP, Annex 1, Appendix 1, paragraphs 2(c), (i), (ii), (iii), and (iv). 
I11T3Thermal applianceG1T1 means the refrigerating, mechanical refrigerating, or heating appliance which is installed in the insulated body of the equipment. 
I11T3United StatesG1T1 means the fifty States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands of the United States, the Commonwealth of the Northern Mariana Islands, and any other territory or possession of the United States. 
I11T3U.S. ATP certificateG1T1 means a certificate issued by the U.S. Department of Agriculture, attesting that the equipment listed in the certificate complies with pertinent standards in the ATP.
I11T3U.S. ATP testing laboratoryG1T1 means a facility in the United States which has been approved by the Administrator to conduct tests of mechanical refrigerating appliances. 
I11T3U.S. ATP testing stationG1T1 means a facility in the United States which has been approved by the Administrator to conduct tests of equipment. 

I56Subpart B_Procedures for Testing of Equipment 

I80ï¿½1A3300.7 
I89General. 
I11Testing of equipment according to the ATP is basically done in two phases: 
I11(a) Measurement of the insulating capacity, that is, the K-coefficient, of the insulated body. 
I11(b) Determination of the efficiency of the thermal appliance as installed in the insulated body. In the case of mechanically refrigerated equipment, the mechanical refrigerating appliance may be tested separate from the body. 

I80ï¿½1A3300.10 
I89Measurement of the K-coefficient of an insulated body. 
I11The K-coefficient shall be measured according to the procedures in ATP, Annex 1, Appendix 2, paragraphs 1ï¿½0928, and the following shall apply:
I11(a) The internal heating method shall be used. 
I11(b) In ATP, Annex 1, Appendix 2, paragraph 8, last line, ``about +20 G6T1ï¿½G1T1C for the mean temperature of the walls of the body shall be interpreted to mean between +19 G6T1ï¿½G1T1C (+66 G6T1ï¿½G1T1F) and 21 G6T1ï¿½G1T1C (+70 G6T1ï¿½G1T1F).
I11(c) A report of each test shall be completed on a form corresponding to the pertinent test report model prescribed in ATP, Annex 1, Appendix 2. Report forms may be obtained by a request to the ATP manager. 

I80ï¿½1A3300.13 
I89Determination of the efficiency of the thermal appliances as installed in the insulated body. 
I11In determining the efficiency of a thermal appliance with respect to maintaining a prescribed temperature inside the body, the procedures in ATP, Annex 1, Appendix 2, paragraphs 31ï¿½0940 and 43ï¿½0947 shall be used. A report of each test shall be completed on a form corresponding to the pertinent test report model prescribed in ATP, Annex 1, Appendix 2. Report forms may be obtained by a request to the ATP manager.

ï¿½236ï¿½I56Subpart C_Approval of Testing Stations 

I80ï¿½1A3300.16 
I89General. 
I11Any public or private organization incorporated or chartered under the laws of, and with principal office in, the United States may apply to have one or more of its facilities in the United States designated as a U.S. ATP testing station. 

I80ï¿½1A3300.19 
I89Application for approval. 
I11An application by an officer of the organization shall be submitted to the Administrator for each facility for which approval is sought. Copies of the Form, Application for Approval as a U.S. ATP Testing Station, may be obtained by a request to the ATP manager. The following information must be supplied in the application: 
I11(a) A statement that the organization is incorporated or chartered under the laws of, and that it has its principal office in, the United States, including the name, address, and telephone number of the principal office. 
I11(b) The address and telephone number of the testing station, and name and title of person in charge of the station. 
I11(c) A summary of experience at the facility which would indicate the capability to conduct tests of equipment according to Supart B of this rule. 
I11(d) A general description of the station, including drawings on letter size (8 \1/2\ ï¿½0A 11 inches) paper to show the floor plan and cross-sections of the test chamber, basic dimensions, location of heat exchangers and instruments, and any other pertinent information. 
I11(e) An indication of which of the following types of equipment, as defined in ATP, Annex 1, that the station is capable of testing: intermodal freight containers, semi-trailers, trailers, railcars, and trucks. 
I11(f) A statement that the ATP manager or other representative of the Administrator may, before a decision is made concerning the application, observe a test at the station of a Class ``C'' mechanically refrigerated container or semi-trailer, with Class ``C'' being defined as in ATP, Annex 1, paragraph 3.
I11(g) A statement that the station will be open to public use, that is, to manufacturers and owners of equipment which may apply to have equipment tested. 
I11(h) A statement that the fees to be charged by the organization for testing will be reasonable with respect to costs involved, and that such fees will be payable directly to the organization by those who seek testing of their equipment. 
I11(i) A statement that the station will maintain records of basic data developed in each test conducted under this rule, such records to be available for review by the ATP manager or other representative of the Administrator upon request. The record for each test shall be maintained for a period of three years.
I11(j) A statement that the organization will advise the ATP manager as soon as practicable of its intent to conduct a test under this rule and that it will, as soon as possible, advise when a firm test date has been set so that the ATP manager or other representative of the Administrator may observe the test. 
I11(k) A statement that the organization will send to the ATP manager a copy of each test report for equipment tested at the station according to this rule, within 30 days after completion of the test. 
I11(l) A statement that, should any significant change occur in the facility with respect to structure or test equipment as a result of redesign or other cause during the period of approval, the organization will so advise the ATP manager within 30 days after such change. 
I11(m) Any other pertinent information. 

I80ï¿½1A3300.22 
I89Response to application for approval.
I11The Administrator will, within 30 days of receipt of the application and any relevant information required, advise the applicant whether or not the facility is approved as a testing station. Approval is for a 5-year period. 

I80ï¿½1A3300.25 
I89Application for renewal of approval. 
I11If an organization wishes to have an approval renewed at the end of a 5-year ï¿½237ï¿½period, it shall submit a request for renewal to the Administrator 90 days before expiration of the existing approval. The request for renewal shall contain the same type of information as required in the original application, that is, the information called for in ï¿½1A3300.19 of subpart C. 

I80ï¿½1A3300.28 
I89Response to application for renewal of approval. 
I11The Administrator will, within 30 days of receipt of application and any relevant information required, advise the applicant whether or not approval is renewed. A renewal is good for 5 years. 

I80ï¿½1A3300.31 
I89Termination of approval. 
I11An approved testing station may at any time withdraw as an approved testing station by written notice to the Administrator. Similarly, the Administrator may suspend or terminate for cause the approved status of a testing station by written notice to the organization, setting forth the reasons for such action. Examples of causes for suspension or termination of approval of a testing station would be a change in equipment or operations at the station which would render the station incapable of performing tests according to the standards in the ATP, or noncompliance of the station with pertinent portions of this rule. 

I56Subpart D_Procedures for Separate Testing of Mechanical Refrigerating Appliances 

I80ï¿½1A3300.34 
I89General. 
I11ATP, Annex 1, Appendix 2, paragraph 41, provides that approval of mechanically refrigerated equipment may be done on the basis of separate testing of the mechanical refrigerating appliance. 

I80ï¿½1A3300.37 
I89Testing of a mechanical refrigerating appliance.
I11For separate testing of a mechanical refrigerating appliance, the following shall pertain: 
I11(a) The calibrated-box method shall be used, as set forth in ARI Standard 1110, Standard for Mechanical Refrigeration Units, of the Air-Conditioning and Refrigeration Institute. 
I11(b) The appliance shall be rated according to the class, or classes, of service for which the appliance is intended, with classes being defined as in ATP, Annex 1, paragraph 3. 
I11(c) A report of each test shall be completed on a form corresponding to the pertinent test report model prescribed in ATP, Annex 1, Appendix 2. Report forms may be obtained by a request to the ATP manager. 

I56Subpart E_Approval of Testing Laboratories

I80ï¿½1A3300.40 
I89General. 
I11Any public or private organization incorporated or chartered under the laws of, and with principal office in, the United States may apply to have one or more of its facilities in the United States designated as a U.S. ATP testing laboratory.

I80ï¿½1A3300.43 
I89Application for approval. 
I11An application by an officer of the organization shall be submitted to the Administrator for each facility for which approval is sought. Copies of the Form, Application for Approval as a U.S. ATP Testing Laboratory, may be obtained by a request to the ATP manager. The following information must be supplied in the application:
I11(a) A statement that the organization is incorporated or chartered under the laws of, and that it has its principal office in, the United States, including the address and telephone number of the principal office.
I11(b) The address and telephone number of the testing laboratory, and name and title of person in charge of the laboratory.
I11(c) A summary of the experience at the facility which would indicate a capability to conduct tests of mechanical refrigerating appliances according to subpart D of this rule.
I11(d) A general description of the laboratory, including drawings on letter size (8\1/2\ ï¿½0A 11 inches) paper to show the floor plan and cross-section of the test chamber, basic dimensions, location of heat exchangers and instruments, and any other pertinent information.
I11(e) A statement that the ATP manager or other representative of the Administrator may, before a decision is ï¿½238ï¿½made concerning the application, observe a test at the laboratory of a mechanical refrigerating appliance for a Class ``C'' mechanically refrigerated container or trailer, with Class ``C'' as defined in ATP, Annex 1, paragraph 3.
I11(f) A statement that the laboratory will maintain records of basic data developed in each test conducted under this rule, such records to be available for review by the ATP manager or other representative of the Administrator, upon request. The record for each test shall be maintained for a period of three years.
I11(g) A statement that the organization will advise the ATP manager as soon as practicable of its intent to conduct a test under this rule and that it will, as soon as possible, advise when a firm test has been set so that the ATP manager or other representative of the Administrator may observe the test.
I11(h) A statement that the organization will send to the ATP manager a copy of each test report for an appliance tested at the laboratory according to this rule, within 30 days after completion of the test.
I11(i) A statement that, should any significant change occur in the facility with respect to structure or test equipment as a result of redesign or other cause during the period of approval, the organization will so advise the ATP manager within 30 days after such change.
I11(j) Any other pertinent information.

I80ï¿½1A3300.46 
I89Response to application for approval.
I11The Administrator will, within 30 days of receipt of an application and any relevant information required, advise the applicant whether or not the facility is approved as a testing laboratory. Approval is for a 5-year period from date of approval.

I80ï¿½1A3300.49 
I89Application for renewal of approval.
I11If an organization wishes to have an approval renewed at the end of a 5-year period, it shall submit a request for renewal to the Administrator 90 days before expiration of the existing approval. The request for renewal shall contain the same type of information as required in the original application, that is, the information called for in ï¿½1A3300.43 of subpart E.

I80ï¿½1A3300.52 
I89Response to application for renewal of approval.
I11The Administrator will, within 30 days of receipt of application and any relevant information required, advise the applicant whether or not approval is renewed. A renewal extends the period of approval for 5 years.

I80ï¿½1A3300.55 
I89Termination of approval. 
I11An approved testing laboratory may at any time withdraw as an approved testing laboratory by written notice to the Administrator. Similarly, the Administrator may suspend or terminate for cause the approved status of a testing laboratory by written notice to the organization, setting forth the reasons for such action. Examples of causes for suspension or termination of approval would be a change in equipment or operations at the laboratory which would render it incapable of performing tests according to the standards in the ATP, or noncompliance of the laboratory with pertinent portions of this rule. 

I56Subpart F_Certification of New Equipment 

I80ï¿½1A3300.58 
I89General. 
I11The following shall apply for certification of new equipment: 
I11(a) Domestic owners are eligible to receive U.S. ATP certificates for equipment produced or assembled in the United States or in a foreign country. 
I11(b) Foreign owners are eligible to receive U.S. ATP certificates only for equipment produced or assembled in the United States. 
I11(c) For equipment manufactured (i.e., produced or assembled) in the United States: 
I11(1) When the complete unit of equipment is tested, the test shall be performed in a U.S. ATP testing station.
I11(2) When the mechanical refrigerating appliance and the insulated body are tested separately, such tests shall be performed in approved testing facilities in the United States or in test facilities located in, and approved by, a foreign country which is a Contracting Party. 
ï¿½239ï¿½I11(d) For equipment manufactured in a foreign country which is a Contracting Party, a domestic owner may receive a U.S. ATP certiticate in exchange for the Foreign-ATP certificate issued by the country of manufacture.
I11(e) For equipment manufactured in a foreign country which is not a Contracting Party, tests shall be performed in approved testing facilities in the United States or in facilities located in and approved by a foreign country which is a Contracting Party.
I11(f) In accordance with ATP, Annex 1, Appendix 1, paragraphs 2(a) and (d), the validity of a test report for a reference equipment shall expire at the end of a period of 3 years or at the end of the manufacture of 1,000 units of serially-produced equipment, whichever occurs first.
I11(g) The validity of a test report for a reference mechanical refrigerating appliance shall expire at the end of a period of three years, or at the end of the manufacture of 1,000 identical mechanical refrigerating appliances, whichever occurs first.
I11(h) The validity of a test report for a reference insulated body shall expire at the end of a period of three years, or at the end of the manufacture of 1,000 serially-produced bodies, whichever occurs first.
I11(i) Serially-produced equipment shall be produced or assembled by the same manufacturer and at the same manufacturing plant as the reference equipment.
I11(j) Identical mechanical refrigerating appliances shall be manufactured by the same manufacturer and at the same manufacturing plant as the reference mechanical refrigerating appliance.
I11(k) Serially-produced bodies shall be manufactured by the same manufacturer and at the same manufacturing plant as the reference insulated body.
I11(l) Equipment manufacturers shall notify the ATP manager 30 days before start of manufacture so that the ATP manager or other representative of the Administrator may observe the manufacturing operation. 
I11(m) Owners who receive a U.S. ATP certificate have the responsibility to manitain the equipment in good repair and operating condition with the understanding that the certificate is valid only so long as:
I11(1) The insulated body and the thermal appliance are maintained in good condition; 
I11(2) No material alteration is made to the thermal appliance which decreases its refrigerating capacity, and; 
I11(3) If the thermal appliance is replaced, it is replaced by an appliance of equal or greater refrigerating capacity. 

I80ï¿½1A3300.61
I89Testing and verification requirements. 
I11In accordance with ATP, Annex 1, Appendix 1, paragraphs 1, 1(a), 2(a), 2(b), 2(c) and 3, and Appendix 2, paragraph 41, certification of new equipment is based upon the following: 
I11(a) For a unit of equipment, a test of the equipment in an approved testing station. 
I11(b) For serially-produced equipment: 
I11(1) A test of one unit of equipment in an approved testing station, such unit to serve as the reference equipment. 
I11(2) Verification that production of other units of equipment is in conformity with the reference equipment. 
I11(c) For mechanically refrigerated equipment, certification may be based upon a separate test of the mechanical refrigerating appliance and a separate test of the insulated body. 

I80ï¿½1A3300.64
I89Application for certificate for new equipment produced or assembled in the United States or in a foreign country which is not a contracting party to the ATP. 
I11Application for certification shall be submitted to the ATP manager by an officer in the organization of the owner of the equipment. In the case of equipment manufactured in the United States, application may be made by an officer in the organization of the equipment manufacturer, acting on behalf of the owner. Copies of the Form, Application for U.S. ATP Certificate for New Equipment Produced or Assembled in the United States or in a Foreign Country Which is not a Contracting Party to the ATP, may be obtained by a request to the ATP manager. The following information must be supplied in the application: 
I11(a) A statement whether the owner is a domestic owner or a foreign owner, with the name, address and telephone ï¿½240ï¿½number of its principal office, and the name and title of person to contact. 
I11(b) If the operator of the equipment is different from the owner, the name and address of the operator. 
I11(c) Type of equipment (intermodal freight container, semi-trailer, trailer, railcar, or truck). 
I11(d) Total number of units of equipment. 
I11(e) Definition and distinguishing mark of the equipment for which certification is sought, referring to ATP, Annex 1, paragraph 3 and Appendix 4. 
I11(f) Name, address, and telephone number of the principal office of the equipment manufacturer, and name and title of the person to contact. 
I11(g) Name and address of the plant at which the equipment was manufactured. 
I11(h) In the case of a unit of equipment (i.e., the insulated body with its mechanical refrigerating appliance installed) that has been tested to serve as the reference equipment for serially-produced equipment: 
I11(1) The original or certified true copy of the test report for the reference equipment. 
I11(2) For the serially-produced equipment: 
I11(i) The manufacturer's make and model number for the equipment, including a brief description of the equipment and enclosure of any brochure on the equipment which might be available. 
I11(ii) The basis upon which the equipment meets the definition of serially-produced equipment, with respect to the reference equipment. 
I11(iii) A statement that the equipment was manufactured at the same plant at which the reference equipment was manufactured. 
I11(iv) A statement that production of the equipment was in conformity with the reference equipment.
I11(i) In the case where the mechanical refrigerating appliance and the insulated body have been tested separately:
I11(1) For the reference mechanical refrigerating appliance:
I11(i) The original or certified true copy of the test report.
I11(ii) From the test report, the effective refrigerating capacity, W, in watts, of the appliance at an outside temperature of +30 G6T1ï¿½G1T1C and the inside temperature (T3seeG1T1 ATP, Annex 1, paragraph 3 and Appendix 4) for the class of equipment for which certification is sought. ``W'' must be equal to, or greater than, the increased heat transfer rate, HG5T2iG1T1, for the reference insulated body. See paragraph (3)(iii) below.
I11(2) For the identical mechanical refrigerating appliances:
I11(i) Name and address of the plant at which the identical appliances and reference appliance were manufactured.
I11(ii) The manufacturer's make, model number, and a brief description of the appliances with enclosure of any brochure on the appliances which might be available.
I11(iii) A statement that the appliances meet the definition of identical mechanical refrigerating appliances.
I11(3) For the reference insulated body:
I11(i) The original or certified true copy of the test report.
I11(ii) The total heat transfer rate of the body, HG5T2tG1T1=Sï¿½0AKï¿½0AG6T1DG1T1 T, in watts, where: ``S'' is the mean surface area of the body, from the test report; ``K'' is the heat transfer coefficient of the body, from the test report; and, ``G6T1DG1T1 T'' is the difference in degrees Kelvin between an outside temperature of +30 G6T1ï¿½G1T1C and the inside temperature for the class of equipment for which certification is sought.
I11(iii) The increased beat transfer rate, HG5T2iG1T1, obtained by multiplying the total heat transfer rate HG5T2tG1T1, by the factor of 1.75.
I11(4) For the serially-produced insulated bodies:
I11(i) Name and address of the plant at which the serially-produced bodies and reference body were manufactured.
I11(ii) The manufacturer's make, model number, and a brief description of the bodies, with any brochure on the bodies which might be available.
I11(iii) The basis upon which the bodies meet the definition of serially-produced bodies, with respect to the reference insulated body.
I11(iv) A statement that production of the bodies was in conformity with the reference insulated body.
I11(j) Information on the equipment after manufacture:
ï¿½241ï¿½I11(1) A statement that each mechanical refrigerating appliance, after it was installed in the body, was operated and thoroughly checked and that each appliance functioned properly.
I11(2) A statement that each body and each appliance has affixed to it a manufacturer's plate or other means of identification which shows the items of information required by ATP, Annex 1, paragraph 6.
I11(3) A statement that each unit of equipment, before it is put into service, will have affixed to it a certification plate and distinguishing mark as specified in ATP, Annex 1, Appendix 1, paragraphs 4 and 5, and Appendixes 3 and 4.
I11(4) A list showing, for each unit of equipment, the serial number of the body and the corresponding owner's equipment identification number.

I80ï¿½1A3300.67 
I89Application for certificate for new equipment produced or assembled in a foreign country which is a contracting party to the ATP. 
I11An application for certification of equipment shall be submitted to the ATP manager by an officer in the organization of the owner of the equipment. Copies of the Form, Application for U.S. ATP Certificate for New Equipment Produced or Assembled in a Foreign Country Which is a Contracting Party, may be obtained by a request to the ATP manager. The following information must be submitted in the application: 
I11(a) A statement that the owner is a domestic owner, with the name, address and telephone number of its principal office, and the name and title of the person to contact. 
I11(b) If the operator of the equipment is different from the owner, the name and address of the operator. 
I11(c) The type of equipment (intermodal freight container, trailer, semi-trailer, railcar, or truck.) 
I11(d) Total number of units of equipment. 
I11(e) Definition of the equipment for which certification is sought, referring to ATP, Annex 1, paragraph 3, and Appendix 4. 
I11(f) Name, address, and telephone number of the manufacturer of the equipment, and the name and title of the person to contact. 
I11(g) The manufacturer's make and model number for the equipment, including a brief description of the equipment and any brochure on the equipment which might be available. 
I11(h) The original or certified true copy of the test report for the reference equipment. 
I11(i) The original or certified true copy of the Foreign-ATP certificate issued for the equipment. 
I11(j) A statement that each unit of equipment, before it is put into service, will have affixed to it a certification plate and distinguishing mark as specified in ATP, Annex 1, Appendix 1, paragraphs 4 and 5, and Appendixes 3 and 4. 
I11(k) A list showing, for each unit of equipment, the serial number of the body and the corresponding owner's equipment identification number. 

I80ï¿½1A3300.70 
I89Issuance of certificate. 
I11The ATP manager will evaluate the documents received and, for equipment deemed qualified, will issue a U.S. ATP certificate to the applicant within 30 days of the receipt of an application and any relevant information required. The certificate will be in the format prescribed in ATP, Annex 1, Appendix 3. For equipment deemed not qualified, the applicant will be advised of the reasons for non-qualification within 30 days of the receipt of an application and any relevant information required. 

I80ï¿½1A3300.73 
I89Period of validity of certificates. 
I11In accordance with ATP, Annex 1, Appendix 1, paragraphs 1(a) and 1(b), certificates issued for new equipment are valid for a period of 6 years from date of issue. 

I56Subpart G_Certification of Equipment in Service 

I80ï¿½1A3300.76 
I89General. 
I11Only domestic owners are eligible to receive U.S. ATP certificates for equipment in service, with certification based upon the following: 
I11(a) For equipment which has not previously been certified: 
I11(1) For each unit of equipment, a test in a U.S. ATP testing station or in a testing station located in and approved by a country which is a Contracting ï¿½242ï¿½Party, to measure the K-coefficient of the insulated body and the efficiency of the thermal appliance in accordance with ï¿½1A3300.10 and ï¿½1A3300.13 of this rule. 
I11(2) If the equipment consists of serially-produced equipment manufactured by a particular equipment manufacturer, and belonging to one owner, certification may be based upon the following: 
I11(i) A test of 1 percent of the units of equipment as prescribed in preceding paragraph (a)(1) of this section, the units tested to serve as reference equipment.
I11(ii) An inspection of each unit of equipment, using the procedures set forth in ATP, Annex 1, Appendix 2, paragraphs 29 and 49. The inspections shall be performed by one of the following, at the choice of the owner: 
I11(A) Persons in the owner's organization whom the owner deems qualified to perform inspections, or; 
I11(B) By an independent inspection agency which the owner deems competent to perform inspections. Fees charged by such inspection agency shall be payable directly to the agency by the owner. 
I11(iii) A report of each inspection shall be completed on a form corresponding to the pertinent test report model in ATP, Annex 1, Appendix 2. Report forms may be obtained by a request to the ATP manager. 
I11(b) For renewal of a U.S. ATP certificate which is nearing its expiration date, any of the following three procedures: 
I11(1) For each unit of equipment, a test as prescribed in preceding paragraph (a)(1) of this section, or; 
I11(2) If the equipment is serially-produced by a particular manufacturer and belongs to one owner, test and inspection of the equipment according to the procedures prescribed in preceding paragraphs (a)(2)(i), (ii), and (iii) of this section, or; 
I11(3) An inspection of each unit of equipment as prescribed in paragraphs (a)(2)(ii) and (iii) of this section. 
I11(c) For equipment which is currently certified according to a U.S. ATP certificate, and which has been transferred from one domestic owner to another, the new owner may obtain a U.S. ATP certificate by submitting the original or certified true copy of the certificate issued to the previous owner, and by performing an inspection and submitting an inspection report for each unit of equipment. 
I11(d) For equipment which is currently certified according to a Foreign-ATP certificate, and which has been transferred from a foreign owner to a domestic owner, the domestic owner may obtain a U.S. ATP certificate by submitting the original or certified true copy of the test report for the reference equipment and the original or certified true copy of the foreign certificate, and by performing an inspection and submitting an inspection report for each unit of equipment. 
I11(e) Owners who receive a U.S. ATP certificate have the responsibility to maintain equipment in good repair and operating condition with the understanding that the certificate is valid only so long as: 
I11(1) The insulated body and the thermal appliance are maintained in good condition; 
I11(2) No material alteration is made to the thermal appliance which decreases its refrigeration capacity, and; 
I11(3) If the thermal appliance is replaced, it is replaced by an appliance of equal or greater refrigerating capacity. 

I80ï¿½1A3300.79 
I89Application for certificate. 
I11An application shall be submitted to the ATP manager by an officer in the organization of the owner of the equipment. Copies of the Form, Application for U.S. ATP Certificate for Equipment in Service, may be obtained by a request to the ATP manager. The following information is requested in the application: 
I11(a) A statement that the owner is a domestic owner, with the name, address, and telephone number of its principal office, and name and title of person to contact. 
I11(b) If the operator of the equipment is different from the owner, the name and address of the operator. 
I11(c) The type of equipment (intermodal freight container, trailer, semi-trailer, railcar, or truck). 
I11(d) The total number of units of equipment. 
ï¿½243ï¿½I11(e) The definition of the equipment for which certification is sought, referring to ATP, Annex 1, paragraph 3 and Appendix 4. 
I11(f) For equipment which has not been previously certified, one of the following:
I11(1) For each unit of equipment, the original or certified true copy of the test report, or; 
I11(2) If the equipment is serially-produced by one manufacturer: 
I11(i) Name of manufacturer. 
I11(ii) The original or certified true copy of the test report(s) of 1 percent of the equipment which was tested to serve as reference equipment. 
I11(iii) A report of inspection for each unit of equipment. 
I11(g) For renewal of a U.S. ATP Certificate which is nearing its expiration date: 
I11(1) The original or certified true copy of that certificate, and; 
I11(2) One of the following, (i) (ii), or (iii): 
I11(i) For each unit of equipment, the original or certified true copy of the test report. 
I11(ii) If the equipment is serially-produced by one manufacturer: 
I11(A) Name of manufacturer. 
I11(B) The original or certified true copy of the test report(s) of 1 percent of the equipment which was tested to serve as reference equipment. 
I11(C) A report of inspection from each unit of equipment. 
I11(iii) A report of inspection for each unit of equipment. 
I11(h) For equipment which is currently certified according to a U.S. ATP certificate, and which has been transferred from one domestic owner to another: 
I11(1) The original or certified true copy of that certificate. 
I11(2) A report of inspection for each unit of equipment. 
I11(i) For equipment which is currently certified according to a Foreign-ATP certificate, and which has been transferred from a foreign owner to a domestic owner: 
I11(1) The original or certified true copy of the test report for the reference equipment. 
I11(2) The original or certified true copy of the Foreign-ATP certificate. 
I11(3) A report of inspection for each unit of equipment. 
I11(j) A statement that each unit of equipment has, or will have, affixed to it a certification plate and distinguishing mark as prescribed in ATP, Annex 1, Appendix 1, paragraphs 4 and 5, and Appendices 3 and 4. 
I11(k) A list showing, for each unit of equipment, the serial number of the body and the corresponding owner's equipment identification number. 

I80ï¿½1A3300.82
I89Issuance of certificate. 
I11The ATP manager will evaluate documents received and, for equipment deemed qualified, will issue a U.S. ATP certificate to the applicant within 30 days of receipt of the application and any relevant information required. The certificate will be in the format prescribed in ATP, Annex 1, Appendix 3. For equipment deemed not qualified, the applicant will be advised of reasons for non-qualification within 30 days of receipt of an application and any relevant information required. 

I80ï¿½1A3300.85
I89Period of validity of certificates. 
I11In accordance with ATP, Annex 1, Appendix 1, paragraphs 1(b), and Appendix 2, paragraphs 29(c) and 49(b) and (d), considered in combination, certificates will be valid for periods as follows: 
I11(a) For equipment which passes a test, 6 years. 
I11(b) For serially-produced equipment of which 1 percent have passed a test, and all units have been inspected and passed such inspection, 6 years. 
I11(c) For renewal of a U.S. ATP certificate which is nearing its expiration date, where the equipment has passed an inspection but has not been tested, 3 years. 
I11(d) For equipment currently certified according to a U.S. ATP certificate, where the equipment has been transferred from one domestic owner to another and the equipment has passed an inspection, 3 years or the date of expiration of the current U.S. ATP certificate, whichever gives the later expiration date on the new U.S. ATP certificate. 
ï¿½244ï¿½I11(e) For equipment currently certified according to a Foreign-ATP certificate, where the equipment has been transferred from a foreign owner to a domestic owner and the equipment has passed an inspection, 3 years or the date of expiration of the foreign certificate, whichever gives the later expiration date on the newly issued U.S. ATP certificate. 

I56Subpart H_Other Provisions 

I80ï¿½1A3300.88 
I89Fees for U.S. ATP certificates. 
I11The fee schedule for issuance of U.S. ATP certificates by the U.S. Department of Agriculture will be calculated according to the criteria in Circular Aï¿½0925ï¿½1A\2\N, issued by the Office of Management and Budget. Fees may be revised as required on an annual basis. 

I28N\2\ï¿½1AA copy of Circular Aï¿½0925 can be obtained by a request to the Office of Management and Budget (OMB), 17th Street and Pennsylvania Avenue, NW., Washington, DC 20503. 


I80ï¿½1A3300.91
I89List of approved testing stations, approved testing laboratories, and fees for certificates. 
I11A current list of U.S. ATP testing stations, U.S. ATP testing laboratories, and fees for issuance of U.S. ATP certificates may be obtained by request to the ATP manager. 

I80ï¿½1A3300.94 
I89Appeals. 
I11Any organization aggrieved by an action in connection with this rule may obtain a review of such action by submitting pertinent information by letter to the Administrator. The decision of the Administrator is the final agency action. 
S8006I53PART 3305[RESERVED]
S8010
F8008I327 CFR Ch. XXXIV (1ï¿½091ï¿½0900 Edition)
I33Coop. State Research, Education, and Extension Ser., USDA


ï¿½245ï¿½I04CHAPTER XXXIV_COOPERATIVE STATE RESEARCH, EDUCATION, AND EXTENSION SERVICE, DEPARTMENT OF AGRICULTURE
I03
Q06Q04I21T5Editorial Note: T1Nomenclature changes to chapter XXXIV appear at 59 FR 68073, Dec. 30, 1994.
I87Part
I88Page

I483400
I49Special Research Grants Program 
I59247
I483401
I49Rangeland Research Grants Program
I59257
I483402
I49Food and Agricultural Sciences National Needs Graduate Fellowship Grants Program
I59267
I483403
I49Small Business Innovation Research Grants Program
I59277
I483404
I49Public information
I59287
I483405
I49Higher Education Challenge Grants Program  
I59287

I483406
I491890 Institution Capacity Building Grants Program  
I59304


I483407
I49Implementation of National Environmental Policy Act
I59334
I483411
I49National Research Initiative Competitive Grants Program
I59338
I483415
I49Biotechnology Risk Assessment Research Grants Program
I59351


F80103I327 CFR Ch. XXXIV (1ï¿½091ï¿½0900 Edition)
I33Coop. State Research, Education, and Extension Ser., USDA
ï¿½247ï¿½I95Pt. 3400

I52PART 3400_SPECIAL RESEARCH GRANTS PROGRAM


I86Subpart A_General
S8006I18Sec.
S8010I263400.1Applicability of regulations.
I263400.2Definitions.
I263400.3Eligibility requirements.
I263400.4How to apply for a grant.
I263400.5Evaluation and disposition of applications.
I263400.6Grant awards.
I263400.7Use of funds; changes.
I263400.8Other Federal statutes and regulations that apply.
I263400.9Other conditions.


I86Subpart B_Scientific Peer Review of Research Grant Applications
I263400.10Establishment and operation of peer review groups.
I263400.11Composition of peer review groups.
I263400.12Conflicts of interest.
I263400.13Availability of information.
I263400.14Proposal review.
I263400.15Review criteria.



I86Subpart C_Peer and Merit Review Arranged by Grantees

I263400.20Grantee review prior to award.
I263400.21Scientific peer review for research activities.
I263400.22Merit review for education and extension activities.


I86Subpart D_Annual Reports

I263400.23Annual reports.



Q04I21T5Authority: T17 U.S.C. 450i(c).

Q04I21T5Source: T156 FR 58147, Nov 15, 1991, unless otherwise noted.



I56Subpart A_General



I80ï¿½1A3400.1
I89Applicability of regulations.

I11(a) The regulations of this part apply to special research grants awarded under the authority of subsection (c) of the Competitive, Special, and Facilities Research Grant Act, as amended (7 U.S.C. 450i (c)), to facilitate or expand promising breakthroughs in areas of the food and agricultural sciences of importance to the United States. Subparts A and B, excepting this section, apply only to special research grants awarded under subsection (c)(1)(A). Subpart C, Peer and Merit Review Arranged by Grantees, and Subpart D, Annual Reports, apply to all grants awarded under subsection (c).
I11(b) Each year the Administrator of CSREES shall determine and announce through publication of a Notice in such publications as the T4Federal RegisterG1T1, professional trade journals, agency or program handbooks, the Catalog of Federal Domestic Assistance, or any other appropriate means, research program areas for which proposals will be solicited competitively, to the extent that funds are available.
I11(c) The regulations of this part do not apply to research, extension or education grants awarded by the Department of Agriculture under any other authority.

Q04I20[64 FR 34103, June 24, 1999]




I80ï¿½1A3400.2
I89Definitions.
I11As used in this part:
I11(a) T3AdministratorG1T1 means the Administrator of the Cooperative State Research, Education, and Extension Service (CSREES) and any other officer or employee of the Department of Agriculture to whom the authority involved may be delegated.
I11(b) T3DepartmentG1T1 means the Department of Agriculture.
I11(c) T3Principal investigatorG1T1 means a single individual designated by the grantee in the grant application and approved by the Administrator who is responsible for the scientific and technical direction of the project.
I11(d) T3GranteeG1T1 means the entity designated in the grant award document as the responsible legal entity to whom a grant is awarded under this part.
I11(e) T3Research project grantG1T1 means the award by the Administrator of funds to a grantee to assist in meeting the costs of conducting, for the benefit of the public, an identified project which is intended and designed to establish, discover, elucidate, or confirm information or the underlying mechanisms relating to a research program area identified in the annual solicitation of applications.
I11(f) T3ProjectG1T1 means the particular activity within the scope of one or more of the research program areas identified in the annual solicitation of applications, which is supported by a grant award under this part.
ï¿½248ï¿½I11(g) T3Project periodG1T1 means the total length of time that is approved by the Administrator for conducting the research project as outlined in an approved grant application.
I11(h) T3Budget periodG1T1 means the interval of time (usually 12 months) into which the project period is divided for budgetary and reporting purposes.
I11(i) T3Awarding officialG1T1 means the Administrator and any other officer or employee of the Department to whom the authority to issue or modify research project grant instruments has been delegated.
I11(j) T3Peer review groupG1T1 means an assembled group of experts or consultants qualified by training and experience in particular scientific or technical fields to give expert advice, in accordance with the provisions of this part, on the scientific and technical merit of grant applications in those fields.
I11(k) T3Ad hoc reviewersG1T1 means experts or consultants qualified by training and experience in particular scientific or technical fields to render special expert advice, whose written evaluations of grant applications are designed to complement the expertise of the peer review group, in accordance with the provisions of this part, on the scientific or technical merit of grant applications in those fields.
I11(l) T3ResearchG1T1 means any systematic study directed toward new or fuller knowledge and understanding of the subject studied.
I11(m) T3MethodologyG1T1 means the project approach to be followed and the resources needed to carry out the project.

I80ï¿½1A3400.3
I89Eligibility requirements.
I11(a) Except where otherwise prohibited by law, any State agricultural experiment station, all colleges and universities, other research institutions and organizations, Federal agencies, private organizations or corporations, and individuals, shall be eligible to apply for and to receive a special research project grant under this part, provided that the applicant qualifies as a responsible grantee under the criteria set forth in paragraph (b) of this section.
I11(b) To qualify as responsible, an applicant must meet the following standards as they relate to a particular project:
I11(1) Have adequate financial resources for performance, the necessary experience, organizational and technical qualifications, and facilities, or a firm commitment, arrangement, or ability to obtain such (including proposed subagreements);
I11(2) Be able to comply with the proposed or required completion schedule for the project;
I11(3) Have a satisfactory record of integrity, judgment, and performance, including, in particular, any prior performance under grants and contracts from the Federal Government;
I11(4) Have an adequate financial management system and audit procedure which provides efficient and effective accountability and control of all property, funds, and other assets; and
I11(5) Be otherwise qualified and eligible to receive a research project grant under applicable laws and regulations.
I11(c) Any applicant who is determined to be not responsible will be notified in writing of such findings and the basis therefor.

I80ï¿½1A3400.4
I89How to apply for a grant.
I11(a) A request for proposals will be prepared and announced through publications such as the T4Federal RegisterG1T1, professional trade journals, agency or program handbooks, the Catalog of Federal Domestic Assistance, or any other appropriate means of solicitation, as early as practicable each fiscal year. It will contain information sufficient to enable all eligible applicants to prepare special research grant proposals and will be as complete as possible with respect to:

I11(1) Descriptions of specific research program areas which the Department proposes to support during the fiscal year involved, including anticipated funds to be awarded;
I11(2) Deadline dates for having proposal packages postmarked;
I11(3) Name and address where proposals should be mailed;
I11(4) Number of copies to be submitted;
I11(5) Forms required to be used when submitting proposals; and
I11(6) Special requirements.
I11(b) T3Grant Application Kit.G1T1 A Grant Application Kit will be made available to ï¿½249ï¿½any potential grant applicant who requests a copy. This kit contains required forms, certifications, and instructions applicable to the submission of grant proposals.
I11(c) T3Format for research grant proposals.G1T1 Unless otherwise stated in the specific program solicitation, the following applies:
I11(1) T3Grant Application.G1T1 All research grant proposals submitted by eligible applicants should contain a Grant Application form, which must be signed by the proposing principal investigator(s) and endorsed by the cognizant authorized organizational representative who possesses the necessary authority to commit the applicant's time and other relevant resources.
I11(2) T3Title of Project.G1T1 The title of the project must be brief (80-character maximum), yet represent the major thrust of the research. This title will be used to provide information to the Congress and other interested parties who may be unfamiliar with scientific terms; therefore, highly technical words or phraseology should be avoided where possible. In addition, phrases such as ``investigation of'' or ``research on'' should not be used.
I11(3) T3Objectives.G1T1 Clear, concise, complete, enumerated, and logically arranged statement(s) of the specific aims of the research must be included in all proposals.
I11(4) T3Procedures.G1T1 The procedures or methodology to be applied to the proposed research plan should be explicitly stated. This section should include but not necessarily be limited to:
I11(i) A description of the proposed investigations and/or experiments in the sequence in which it is planned to carry them out;
I11(ii) Techniques to be employed, including their feasibility;
I11(iii) Kinds of results expected;
I11(iv) Means by which data will be analyzed or interpreted;
I11(v) Pitfalls which might be encountered; and
I11(vi) Limitations to proposed procedures.
I11(5) T3Justification.G1T1 This section should describe:
I11(i) The importance of the problem to the needs of the Department and to the Nation, including estimates of the magnitude of the problem.
I11(ii) The importance of starting the work during the current fiscal year, and
I11(iii) Reasons for having the work performed by the proposing organization.
I11(6) T3Literature review.G1T1 A summary of pertinent publications with emphasis on their relationship to the research should be provided and should include all important and recent publications. The citations should be accurate, complete, written in acceptable journal format, and be appended to the proposal.
I11(7) T3Current research.G1T1 The relevancy of the proposed research to ongoing and, as yet, unpublished research of both the applicant and any other institutions should be described.
I11(8) T3Facilities and equipment.G1T1 All facilities, including laboratories, which are available for use or assignment to the proposed research project during the requested period of support, should be reported and described. Any materials, procedures, situations, or activities, whether or not directly related to a particular phase of the proposed research, and which may be hazardous to personnel, must be fully explained, along with an outline of precautions to be exercised. All items of major instrumentation available for use or assignment to the proposed research project during the requested period of support should be itemized. In addition, items of nonexpendable equipment needed to conduct and bring the proposed project to a successful conclusion should be listed.
I11(9) T3Collaborative arrangements.G1T1 If the proposed project requires collaboration with other research scientists, corporations, organizations, agencies, or entities, such collaboration must be fully explained and justified. Evidence should be provided to assure peer reviewers that the collaborators involved agree with the arrangements. It should be specifically indicated whether or not such collaborative arrangements have the potential for any conflict(s) of interest. Proposals which indicate collaborative involvement must state which proposer is to receive any resulting grant award, since only one eligible applicant, as provided in ï¿½1A3400.3 of this ï¿½250ï¿½part, may be the recipient of a research project grant under one proposal.
I11(10) T3Research timetable.G1T1 The applicant should outline all important research phases as a function of time, year by year.
I11(11) T3Personnel support.G1T1 All personnel who will be involved in the research effort must be clearly identified. For each scientist involved, the following should be included:
I11(i) An estimate of the time commitments necessary;
I11(ii) Vitae of the principal investigator(s), senior associate(s), and other professional personnel to assist reviewers in evaluating the competence and experience of the project staff. This section should include curricula vitae of T3allG1T1 key persons who will work on the proposed research project, whether or not Federal funds are sought for their support. The vitae are to be no more than two pages each in length, excluding publications listings; and
I11(iii) A chronological listing of the most representative publications during the past five years shall be provided for each professional project member for whom a curriculum vitae appears under this section. Authors should be listed in the same order as they appear on each paper cited, along with the title and complete reference as these usually appear in journals.
I11(12) T3Budget.G1T1 A detailed budget is required for each year of requested support. In addition, a summary budget is required detailing requested support for the overall project period. A copy of the form which must be used for this purpose, along with instructions for completion, is included in the Grant Application Kit identified under ï¿½1A3400.4(b) of this part and may be reproduced as needed by applicants. Funds may be requested under any of the categories listed, provided that the item or service for which support is requested is allowable under applicable Federal cost principles and can be identified as necessary for successful conduct of the proposed research project. No funds will be awarded for the renovation or refurbishment of research spaces; purchases or installation of fixed equipment in such spaces; or for the planning, repair, rehabilitation, acquisition, or construction of a building or facility. All research project grants awarded under this part shall be issued without regard to matching funds or cost sharing.
I11(13) T3Research involving special considerations.G1T1 A number of situations encountered in the conduct of research require special information and supporting documentation before funding can be approved for the project. If such situations are anticipated, the proposal must so indicate. It is expected that a significant number of special research grant proposals will involve the following:
I11(i) T3Recombinant DNA molecules.G1T1 All key personnel identified in a proposal and all endorsing officials of a proposed performing entity are required to comply with the guidelines established by the National Institutes of Health entitled, ``Guidelines for Research Involving Recombinant DNA Molecules,'' as revised. The Grant Application Kit, identified above in ï¿½1A3400.4(b), contains forms which are suitable for such certification of compliance.
I11(ii) T3Human subjects at risk.G1T1 Responsibility for safeguarding the rights and welfare of human subjects used in any research project supported with grant funds provided by the Department rests with the performing entity. Regulations have been issued by the Department under 7 CFR Part 1c, Protection of Human Subjects. In the event that a project involving human subjects at risk is recommended for award, the applicant will be required to submit a statement certifying that the research plan has been reviewed and approved by the Institutional Review Board at the proposing organization or institution. The Grant Application Kit, identified above in ï¿½1A3400.4(b), contains forms which are suitable for such certification. 
I11(iii) T3Laboratory animal care.G1T1 The responsibility for the humane care and treatment of any laboratory animal, which has the same meaning as ``animal'' in section 2(g) of the Animal Welfare Act of 1966, as amended (7 U.S.C. 2132(g)), used in any research project supported with Special Research Grants Program funds rests with the performing organization. In this regard, all key personnel identified in a proposal and all endorsing officials of ï¿½251ï¿½the proposed performing entity are required to comply with applicable provisions of the Animal Welfare Act of 1966, as amended (7 U.S.C. 2131 T3et. seq.G1T1) and the regulation promulgated thereunder by the Secretary of Agriculture in 9 CFR parts 1, 2, 3, and 4. In the event that a project involving the use of a laboratory animal is recommended for award, the applicant will be required to submit a statement certifying such compliance. The Grant Application Kit, identified above in ï¿½1A3400.4(b), contains forms which are suitable of such certification.
I11(14) T3Current and pending support.G1T1 All proposals must list any other current public or private research support, in addition to the proposed project, to which key personnel listed in the proposal under consideration have committed portions of their time, whether or not salary support for the person(s) involved is included in the budgets of the various projects. This section must also contain analogous information for all projects underway and for pending research proposals which are currently being considered by, or which will be submitted in the near future to, other possible sponsors, including other Departmental programs or agencies. Concurrent submission of identical or similar projects to other possible sponsors will not prejudice its review or evaluation by the Administrator or experts or consultants engaged by the Administrator for this purpose. The Grant Application Kit, identified above in ï¿½1A3400.4(b), contains a form which is suitable for listing current and pending support.
I11(15) T3Additions to project description.G1T1 Each project description is expected by the Administrator, members of peer review groups, and the relevant program staff to be complete in itself. However, in those instances in which the inclusion of additional information is necessary, the number of copies submitted should match the number of copies of the application requested in the annual solicitation of proposals as indicated in ï¿½1A3400.4(a)(4). Each set of such materials must be identified with the title of the research project as it appears in the Grant Application and the name(s) of the principal investigator(s). Examples of additional materials may include photographs which do not reproduce well, reprints, and other pertinent materials which are deemed to be unsuitable for inclusion in the proposal.
I11(16) T3Organizational management information.G1T1 Specific management information relating to an applicant shall be submitted on a one-time basis prior to the award of a research project grant identified under this part if such information has not been provided previously under this or another program for which the sponsoring agency is responsible. Copies of forms recommended for use in fulfilling the requirements contained in this section will be provided by the agency specified in this part once a research project grant has been recommended for funding. 

I80ï¿½1A3400.5
I89Evaluation and disposition of applications.
I11(a) T3Evaluation.G1T1 All proposals received from eligible applicants in accordance with eligible research problem or program areas and deadlines established in the applicable request for proposals shall be evaluated by the Administrator through such officers, employees, and others as the Administrator determines are uniquely qualified in the areas of research represented by particular projects. To assist in equitably and objectively evaluating proposals and to obtain the best possible balance of viewpoints, the Administrator shall solicit the advice of peer scientists, T3ad hocG1T1 reviewers, or others who are recognized specialists in the research program areas covered by the applications received and whose general roles are defined in ï¿½1A3400.2(j) and 3400.2(k). Specific evaluations will be based upon the criteria established in subpart B ï¿½1A3400.15, unless CSREES determines that different criteria are necessary for the proper evaluation of proposals in one or more specific program areas, and announces such criteria and their relative importance in the annual program solicitation. The overriding purpose of such evaluations is to provide information upon which the Administrator can make informed judgments in selecting proposals for ultimate support. Incomplete, unclear, or poorly organized applications will work to the detriment of applicants during ï¿½252ï¿½the peer evaluation process. To ensure a comprehensive evaluation, all applications should be written with the care and thoroughness accorded papers for publication.
I11(b) T3Disposition.G1T1 On the basis of the Administrator's evaluation of an application in accordance with paragraph (a) of this section, the Administrator will 
I11(1) Approve support using currently available funds, 
I11(2) Defer support due to lack of funds or a need for further evaluations, or 
I11(3) Disapprove support for the proposed project in whole or in part.
Q02I10With respect to approved projects, the Administrator will determine the project period (subject to extension as provided in ï¿½1A3400.7(c)) during which the project may be supported. Any deferral or disapproval of an application will not preclude its reconsideration or a reapplication during subsequent fiscal years.

I80ï¿½1A3400.6
I89Grant awards.
I11(a) T3General.G1T1 Within the limit of funds available for such purpose, the awarding official shall make research project grants to those responsible, eligible applicants whose proposals are judged most meritorious in the announced program areas under the evaluation criteria and procedures set forth in this part. The date specified by the Administrator as the beginning of the project period shall be no later than September 30 of the Federal fiscal year in which the project is approved for support and funds are appropriated for such purpose, unless otherwise permitted by law. All funds granted under this part shall be expended solely for the purpose for which the funds are granted in accordance with the approved application and budget, the regulations of this part, the terms and conditions of the award, the applicable Federal cost principles, and the Department's ``Uniform Federal Assistance Regulations'' (part 3015 of this title).
I11(b) T3Grant award document and notice of grant award_G1T1(1) T3Grant award document.G1T1 The grant award document shall include at a minimum the following: 
I11(i) Legal name and address of performing organization or institution to whom the Administrator has awarded a special research project grant under the terms of this part;
I11(ii) Title of project;
I11(iii) Name(s) and address(es) of principal investigator(s) chosen to direct and control approved activities;
I11(iv) Identifying grant number assigned by the Department; 
I11(v) Project period, which specifies how long the Department intends to support the effort without requiring recompetition for funds;
I11(vi) Total amount of Departmental financial assistance approved by the Administrator during the project period;
I11(vii) Legal authority(ies) under which the research project grant is awarded to accomplish the purpose of the law;
I11(viii) Approved budget plan for categorizing allocable project funds to accomplish the stated purpose of the research project grant award; and
I11(ix) Other information or provisions deemed necessary by the Department to carry out its granting activities or to accomplish the purpose of a particular research project grant.
I11(2) T3Notice of grant award.G1T1 The notice of grant award, in the form of a letter, will be prepared and will provide pertinent instructions or information to the grantee that is not included in the grant award document.
I11(c) T3Categories of grant instruments.G1T1 The major categories of grant instruments shall be as follows:
I11(1) T3Standard grant.G1T1 This is a grant instrument by which the Department agrees to support a specified level of research effort for a predetermined project period without the announced intention of providing additional support at a future date. This type of research project grant is approved on the basis of peer review and recommendation and is funded for the entire project period at the time of award.
I11(2) T3Renewal grant.G1T1 This is a document by which the Department agrees to provide additional funding under a standard grant as specified in paragraph (c)(1) of this section for a project period beyond that approved in an original or amended award, provided that the cumulative period does not exceed the statutory limitation. When a renewal application is submitted, it should include a summary of progress ï¿½253ï¿½to date under the previous grant instrument. Such a renewal shall be based upon new application, T3de novoG1T1 peer review and staff evaluation, new recommendation and approval, and a new award instrument.
I11(3) T3Continuation grant.G1T1 This is a grant instrument by which the Department agrees to support a specified level of effort for a predetermined period of time with a statement of intention to provide additional support at a future date, provided that performance has been satisfactory, appropriations are available for this purpose, and continued support would be in the best interests of the Federal Government and the public. It involves a long-term research project that is considered by peer reviewers and Departmental officers to have an unusually high degree of scientific merit, the results of which are expected to have a significant impact on the food and agricultural sciences, and it supports the efforts of experienced scientists with records of outstanding research accomplishments. This kind of document will normally be awarded for an initial one-year period and any subsequent continuation research project grants will also be awarded in one-year increments. The award of a continuation research project grant to fund an initial or succeeding budget period does not constitute an obligation to fund any subsequent budget period. A grantee must submit a separate application for continued support for each subsequent fiscal year. Requests for such continued support must be submitted in duplicate at least three months prior to the expiration date of the budget period currently being funded. Such requests must include: an interim progress report detailing all work performed to date; a Grant Application; a proposed budget for the ensuing period, including an estimate of funds anticipated to remain unobligated at the end of the current budget period; and current information regarding other extramural support for senior personnel. Decisions regarding continued support and the actual funding levels of such support in future years will usually be made administratively after consideration of such factors as the grantee's progress and management practices and within the context of available funds. Since initial peer reviews were based upon the full term and scope of the original special research grant application, additional evaluations of this type generally are not required prior to successive years' support. However, in unusual cases (e.g., when the nature of the project or key personnel change or when the amount of future support requested substantially exceeds the grant application originally reviewed and approved), additional reviews may be required prior to approving continued funding.
I11(4) T3Supplemental grant.G1T1 This is an instrument by which the Department agrees to provide small amounts of additional funding under a standard, renewal, or continuation grant as specified in paragraphs (c)(1), (c)(2), and (c)(3) of this section and may involve a short-term (usually six months or less) extension of the project period beyond that approved in an original or amended award, but in no case may the cumulative period of the project, including short term extensions, exceed the statutory time limitation. A supplement is awarded only if required to assure adequate completion of the original scope of work and if there is sufficient justification of need to warrant such action. A request of this nature normally does not require additional peer review.
I11(d) T3Obligation of the Federal Government.G1T1 Neither the approval of any application nor the award of any research project grant shall commit or obligate the United States in any way to make any renewal, supplemental, continuation, or other award with respect to any approved application or portion of an approved application. 



I80ï¿½1A3400.7 
I89Use of funds; changes.

I11(a) T3Delegation of fiscal responsibility.G1T1 The grantee may not delegate or transfer in whole or in part, to another person, institution, or organization the responsibility for use or expenditure of grant funds.
I11(b) T3Change in project plans.G1T1 (1) The permissible changes by the grantee, principal investigator(s), or other key project personnel in the approved research project grant shall be limited to changes in methodology, techniques, or ï¿½254ï¿½other aspects of the project to expedite achievement of the projects' approved goals. If the grantee or the principal investigator(s) is uncertain as to whether a change complies with this provision, the question must be referred to the Administrator for a final determination.
I11(2) Changes in approved goals, or objectives, shall be requested by the grantee and approved in writing by the Department prior to effecting such changes. In no event shall requests for such changes be approved which are outside the scope of the original approved project.
I11(3) Changes in approved project leadership or the replacement or reassignment of other key project personnel shall be requested by the grantee and approved in writing by the Department prior to effecting such changes.
I11(4) Transfers of actual performance of the substantive programmatic work in whole or in part and provisions for payment of funds, whether or not Federal funds are involved, shall be requested by the grantee and approved in writing by the Department prior to effecting such changes, except as may be allowed in the terms and conditions of the grant award.


I11(c) T3Changes in project period.G1T1 The project period determined pursuant to ï¿½1A3400.5(b) may be extended by the Administrator without additional financial support for such additional period(s) as the Administrator determines may be necessary to complete or fulfill the purposes of an approved project. Any extension, when combined with the originally approved or amended project period shall not exceed three (3) years (the limitation established by statute) and shall be further conditioned upon prior request by the grantee and approval in writing by the Department, unless prescribed otherwise in the terms and conditions of a grant award.


I11(d) T3Changes in approved budget.G1T1 The terms and conditions of a grant will prescribe circumstances under which written Departmental approval will be requested and obtained prior to instituting changes in an approved budget.

Q04I20[56 FR 58147, Nov 15, 1991, as amended at 64 FR 34103, June 24, 1999]





I80ï¿½1A3400.8 
I89Other Federal statutes and regulations that apply.
I11Several other Federal statutes and/or regulations apply to grant proposals considered for review or to research project grants awarded under this part. These include but are not limited to:

Q04
I217 CFR Part 1c_USDA implementation of the Federal Policy for the Protection of Human Subjects.
I217 CFR 1.1_USDA implementation of Freedom of Information Act.
I217 CFR Part 3_USDA implementation of OMB Circular Aï¿½09129 regarding debt collection.
I217. CFR Part 15, Subpart A_USDA implementation of Title VI of the Civil Rights Act of 1964.
I217 CFR Part 3015_USDA Uniform Federal Assistance Regulations, implementing OMB directives (i.e., Circular Nos. Aï¿½09110, Aï¿½0921, and Aï¿½09122) and incorporating provisions of 31 U.S.C. 6301ï¿½096308 (formerly, the Federal Grant and Cooperative Agreement Act of 1977, Pub. L. 95ï¿½09224), as well as general policy requirements applicable to recipients of Departmental financial assistance.
I217 CFR Part 3016_USDA Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments, implementing OMB directives (i.e., Circular Nos. Aï¿½09102 and Aï¿½0987).
I217 CFR Part 3017, as amended_USDA implementation of Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants).
I217 CFR Part 3018_USDA implementation of New Restrictions on Lobbying. Imposes new prohibitions and requirements for disclosure and certification related to lobbying on recipients of Federal contracts, grants, cooperative agreements, and loans.
I217 CFR Part 3407_CSREES procedures to implement the National Environmental Policy Act.
I2129 U.S.C. 794, section 504_Rehabilitation Act of 1973, and 7 CFR part 15B (USDA implementation of statute), prohibiting discrimination based upon physical or mental handicap in Federally assisted programs.
I2135 U.S.C. 200 T3et seq.G1T1_Bayh-Dole Act, controlling allocation of rights to inventions made by employees of small business firms and domestic nonprofit organizations, including universities, in Federally assisted programs (implementing regulations are contained in 37 CFR part 401).

I80ï¿½1A3400.9 
I89Other conditions.
I11The Administrator may, with respect to any research project grant or to any class of awards, impose additional conditions prior to or at the time of any ï¿½255ï¿½award when, in the Administrator's judgment, such conditions are necessary to assure or protect advancement of the approved project, the interests of the public, or the conservation of grant funds.

I56Subpart B_Scientific Peer Review of Research Grant Applications

I80ï¿½1A3400.10 
I89Establishment and operation of peer review groups.
I11Subject to ï¿½1A3400.5, the Administrator will adopt procedures for the conduct of peer reviews and the formulation of recommendations under ï¿½1A3400.14.

I80ï¿½1A3400.11 
I89Composition of peer review groups.
I11(a) Peer review group members will be selected based upon their training and experience in relevant scientific or technical fields, taking into account the following factors:
I11(1) The level of formal scientific or technical education by the individual;
I11(2) The extent to which the individual has engaged in relevant research, the capacities in which the individual has done so (e.g., principal investigator, assistant), and the quality of such research;
I11(3) Professional recognition as reflected by awards and other honors received from scientific and professional organizations outside of the Department;
I11(4) The need of the group to include within its membership experts from various areas of specialization within relevant scientific or technical fields;
I11(5) The need of the group to include within its membership experts from a variety of organizational types (e.g., universities, industry, private consultant(s)) and geographic locations; and
I11(6) The need of the group to maintain a balanced membership, e.g., minority and female representation and an equitable age distribution.

I11(b) [Reserved]



I80ï¿½1A3400.12 
I89Conflicts of interest.
I11Members of peer review groups covered by this part are subject to relevant provisions contained in Title 18 of the United States Code relating to criminal activity, Department regulations governing employee responsibilities and conduct (part O of this title), and Executive Order 11222, as amended.

I80ï¿½1A3400.13 
I89Availability of information.
I11Information regarding the peer review process will be made available to the extent permitted under the Freedom of Information Act (5 U.S.C. 552), the Privacy Act (5 U.S.C. 552a), and implementing Departmental regulations (part 1 of this title).

I80ï¿½1A3400.14 
I89Proposal review.
I11(a) All research grant applications will be acknowledged. Prior to technical examination, a preliminary review will be made for responsiveness to the request for proposals (e.g., relationship of application to research program area). Proposals which do not fall within the guidelines as stated in the annual request for proposals will be eliminated from competition and will be returned to the applicant. Proposals whose budgets exceed the maximum allowable amount for a particular program area as announced in the request for proposals may be considered as lying outside the guidelines.
I11(b) All applications will be carefully reviewed by the Administrator, qualified officers or employees of the Department, the respective peer review group, and T3ad hocG1T1 reviewers, as required. Written comments will be solicited from T3ad hocG1T1 reviewers when required, and individual written comments and in-depth discussions will be provided by peer review group members prior to recommending applications for funding. Applications will be ranked and support levels recommended within the limitation of total available funding for each research program area as announced in the applicable request for proposals.
I11(c) No awarding official will make a research project grant based upon an application covered by this part unless the application has been reviewed by a peer review group and/or T3ad hocG1T1 reviewers in accordance with the provisions of this part and said reviewers have made recommendations concerning the scientific merit of such application.
I11(d) Except to the extent otherwise provided by law, such recommendations are advisory only and are not ï¿½256ï¿½binding on program officers or on the awarding official.

I80ï¿½1A3400.15
I89Review criteria.
I11(a) Subject to the varying conditions and needs of States, Federal funded agricultural research supported under these provisions shall be designed to, among other things, accomplish one or more of the following purposes:
I11(1) Continue to satisfy human food and fiber needs;
I11(2) Enhance the long-term viability and competitiveness of the food production and agricultural system of the United States within the global economy;
I11(3) Expand economic opportunities in rural America and enhance the quality of life for farmers, rural citizens, and society as a whole;
I11(4) Improve the productivity of the American agricultural system and develop new agricultural crops and new uses for agricultural commodities;
I11(5) Develop information and systems to enhance the environment and the natural resource base upon which a sustainable agricultural economy depends; or
I11(6) Enhance human health.
Q02I10In carrying out its review under ï¿½1A3400.14, the peer review group will use the following form upon which the evaluation criteria to be used are enumerated, unless pursuant to ï¿½1A3400.5(a), different evaluation criteria are specified in the annual solicitation of proposals for a particular program.

I71Peer Panel Scoring Form
I77Proposal Identification No. 
Q02
I77Institution and Project Title
I71I. Basic Requirement:
I21Proposal falls within guidelines? G7T2XXXXXG1T1 Yes G7T2XXXXXG1T1 No. If no, explain why proposal does not meet guidelines under comment section of this form.
I71II. Selection Criteria:
c5,L2,tp0,i1,s25,5,6,6,5 I95   h1 h1Score 1ï¿½0910 h1Weight factor h1Score X weight factor h1Comments
j
I011. Overall scientific and technical quality of proposalDD10DD
I012. Scientific and technical quality of the approachDD10DD
I013. Relevance and importance of proposed research to solution of specific areas of inquiryDD6DD
I014. Feasibility of attaining objectives; adequacy of professional training and experience, facilities and equipmentDD5DD
e


I77Score
Q02
I77Summary Comments
Q04
I11(b) Proposals satisfactorily meeting the guidelines will be evaluated and scored by the peer review panel for each criterion utilizing a scale of 1 through 10. A score of one (1) will be considered low and a score of ten (10) will be considered high for each selection criterion. A weighted factor is used for each criterion. 



I56Subpart C_Peer and Merit Review Arranged by Grantees

Q04I21T5Source: T164 FR 34104, June 24, 1999, unless otherwise noted.



I80ï¿½1A3400.20
I89Grantee review prior to award.

I11(a) T3Review requirement.G1T1 Prior to the award of a standard or continuation grant by CSREES, any proposed project shall have undergone a review arranged by the grantee as specified in this subpart. For research projects, such review must be a scientific peer review conducted in accordance with ï¿½1A3400.21. For education and extension projects, such review must be a merit review conducted in accordance with ï¿½1A3400.22.

I11(b) T3Credible and independent.G1T1 Review arranged by the grantee must provide for a credible and independent assessment of the proposed project. A credible review is one that provides an appraisal of technical quality and relevance sufficient for an organizational representative to make an informed judgment as to whether the proposal is appropriate for submission for Federal support. To provide for an independent review, such review may include USDA employees, but should not be conducted solely by USDA employees.
ï¿½257ï¿½I11(c) T3Notice of completion and retention of records.G1T1 A notice of completion of review shall be conveyed in writing to CSREES either as part of the submitted proposal or prior to the issuance of an award, at the option of CSREES. The written notice constitutes certification by the applicant that a review in compliance with these regulations has occurred. Applicants are not required to submit results of the review to CSREES; however, proper documentation of the review process and results should be retained by the applicant.
I11(d) T3Renewal and supplemental grants.G1T1 Review by the grantee is not automatically required for renewal or supplemental grants as defined in ï¿½1A3400.6. A subsequent grant award will require a new review if, according to CSREES, either the funded project has changed significantly, other scientific discoveries have affected the project, or the need for the project has changed. Note that a new review is necessary when applying for another standard or continuation grant after expiration of the grant term.



I80ï¿½1A3400.21
I89Scientific peer review for research activities.

I11Scientific peer review is an evaluation of a proposed project for technical quality and relevance to regional or national goals performed by experts with the scientific knowledge and technical skills to conduct the proposed research work. Peer reviewers may be selected from an applicant organization or from outside the organization, but shall not include principals, collaborators or others involved in the preparation of the application under review.


I80ï¿½1A3400.22
I89Merit review for education and extension activities.
I11Merit review is an evaluation of a proposed project or elements of a proposed program whereby the technical quality and relevance to regional or national goals are assessed. The merit review shall be performed by peers and other individuals with expertise appropriate to evaluate the proposed project. Merit reviewers may not include principals, collaborators or others involved in the preparation of the application under review.





I56Subpart D_Annual Reports


I80ï¿½1A3400.23
I89Annual reports.

I11(a) T3Reporting requirement.G1T1 The recipient shall submit an annual report describing the results of the research, extension, or education activity and the merit of the results.
I11(b) T3Report type and content.G1T1 Unless otherwise stipulated, grant recipients will have met the reporting requirement under this subpart by complying with the reporting requirements as set forth in the terms and conditions of the grant at the time of award. 

Q04I20[64 FR 34104, June 24, 1999]





I95Pt. 3401
I52PART 3401_RANGELAND RESEARCH GRANTS PROGRAM


I86Subpart A_General
S8006I18Sec.
S8010I263401.1Applicability of regulations of this part.
I263401.2Definitions.
I263401.3Eligibility requirements.
I263401.4Matching funds requirement.
I263401.5Indirect costs and tuition remission costs.
I263401.6How to apply for a grant.
I263401.7Evaluation and disposition of applications.
I263401.8Grant awards.
I263401.9Use of funds; changes.
I263401.10Other Federal statutes and regulations that apply.
I263401.11Other conditions.

I86Subpart B_Scientific Peer Review of Research Applications for Funding
I263401.12Establishment and operation of peer review groups.
I263401.13Composition of peer review groups.
I263401.14Conflicts of interest.
I263401.15Availability of information.
I263401.16Proposal review.
I263401.17Review criteria.

Q04I21T5Authority:  T1Section 1470 of the National Agricultural Research, Extension and Teaching Policy Act of 1977 (7 U.S.C. 3316).
Q04I21T5Source:  T161 FR 27753, May 31, 1996, unless otherwise noted.

I56Subpart A_General

I80ï¿½1A3401.1
I89Applicability of regulations of this part.
I11(a) The regulations of this part apply to rangeland research grants awarded ï¿½258ï¿½under the authority of section 1480 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C. 3333) to land-grant colleges and universities, State agricultural experiment stations, and colleges, universities, and Federal laboratories having a demonstrable capacity in rangeland research, as determined by the Secretary, to carry out rangeland research. The Administrator of the Cooperative State Research, Education, and Extension Service (CSREES) shall determine and announce, through publication each year of a Notice in the T4Federal RegisterG1T1, professional trade journals, agency or program handbooks, the catalog of Federal Domestic Assistance or any other appropriate means, research program areas for which proposals will be solicited, to the extent that funds are available.
I11(b) The regulations of this part do not apply to research grants awarded by the Department of Agriculture under any other authority.

I80ï¿½1A3401.2
I89Definitions.
I11As used in this part:
I11(a) T3AdministratorG1T1 means the Administrator of CSREES and any other officer or employee of the Department of Agriculture to whom the authority involved may be delegated.
I11(b) T3DepartmentG1T1 means the Department of Agriculture.
I11(c) T3Principal investigatorG1T1 means a single individual designated by the grantee in the application for funding and approved by the Administrator who is responsible for the scientific and technical direction of the project.
I11(d) T3GranteeG1T1 means the entity designated in the grant award document as the responsible legal entity to whom a grant is awarded under this part.
I11(e) T3Research project grantG1T1 means the award by the Administrator of funds to a grantee to assist in meeting the costs of conducting, for the benefit of the public, an identified project which is intended and designed to establish, discover, elucidate, or confirm information or the underlying mechanisms relating to a research program area identified in the annual solicitation of applications.
I11(f) T3ProjectG1T1 means the particular activity within the scope of one or more of the research program areas identified in the annual solicitation of applications, which is supported by a grant award under this part.
I11(g) T3Project periodG1T1 means the total length of time that is approved by the Administrator for conducting the research project as outlined in an approved application for funding.
I11(h) T3Budget periodG1T1 means the interval of time (usually 12 months) into which the project period is divided for budgetary and reporting purposes.
I11(i) T3Awarding officialG1T1 means the Administrator and any other officer or employee of the Department to whom the authority to issue or modify research project grant instruments has been delegated.
I11(j) T3Peer review groupG1T1 means an assembled group of experts or consultants qualified by training or experience in particular scientific or technical fields to give expert advice, in accordance with the provisions of this part, on the scientific and technical merit of applications for funding in those fields.
I11(k) T3Ad hoc reviewersG1T1 means experts or consultants qualified by training or experience in particular scientific or technical fields to render special expert advice, whose written evaluations of applications for funding are designed to complement the expertise of the peer review group, in accordance with the provisions of this part, on the scientific or technical merit of applications for Funding in those fields.
I11(l) T3ResearchG1T1 means any systematic study directed toward new or fuller knowledge and understanding of the subject studied.
I11(m) T3MethodologyG1T1 means the project approach to be followed and the resources needed to carry out the project.

I80ï¿½1A3401.3
I89Eligibility requirements.
I11(a) Except where otherwise prohibited by law, any land-grant college and university, State agricultural experiment station, and college, university, and Federal laboratory having a demonstrable capacity in rangeland research, as determined by the Secretary, shall be eligible to apply for and to receive a project grant under ï¿½259ï¿½this part, provided that the applicant qualifies as a responsible grantee under the criteria set forth in paragraph (b) of this section.
I11(b) To qualify as responsible, an applicant must meet the following standards as they relate to a particular project:
I11(1) Have adequate financial resources for performance, the necessary experience, organizational and technical qualifications, and facilities, or a firm commitment, arrangement, or ability to obtain such (including proposed subagreements);
I11(2) Be able to comply with the proposed or required completion schedule for the project;
I11(3) Have a satisfactory record of integrity, judgment, and performance, including, in particular, any prior performance under grants and contracts from the Federal government;
I11(4) Have an adequate financial management system and audit procedure which provides efficient and effective accountability and control of all property, funds, and other assets; and
I11(5) Be otherwise qualified and eligible to receive a research project grant under applicable laws and regulations.
I11(c) Any applicant who is determined to be not responsible will be notified in writing of such findings and the basis therefor.

I80ï¿½1A3401.4 
I89Matching funds requirement.
I11In accordance with section 1480 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C. 3333), except in the case of Federal laboratories, each grant recipient must match the Federal funds expended on a research project based on a formula of 50 percent Federal and 50 percent non-Federal funding.

I80ï¿½1A3401.5 
I89Indirect costs and tuition remission costs.
I11Pursuant to section 1473 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C. 3319), funds made available under this program to recipients other than Federal laboratories shall not be subject to reduction for indirect costs or tuition remission costs. Since indirect costs and tuition remission costs, except in the case of Federal laboratories, are not allowable costs for purposes of this program, such costs may not be used to satisfy the matching requirement set forth in ï¿½1A3401.4.

I80ï¿½1A3401.6 
I89How to apply for a grant.
I11(a) T3General.G1T1 After consultation with the Rangeland Research Advisory Board, established pursuant to section 1482 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C. 3335), a request for proposals will be prepared and announced through publications such as the T4Federal Register,G1T1 professional trade journals, agency or program handbooks, the Catalog of Federal Domestic Assistance, or any other appropriate means of solicitation, as early as practicable each fiscal year. It will contain information sufficient to enable all eligible applicants to prepare rangeland research grant proposals and will be as complete as possible with respect to:
I11(1) Descriptions of specific research program areas which the Department proposes to support during the fiscal year involved, including anticipated funds to be awarded;
I11(2) Deadline dates for having proposal packages postmarked;
I11(3) Name and address where proposals should be mailed;
I11(4) Number of copies to be submitted;
I11(5) Forms required to be used when submitting proposals; and
I11(6) Special requirements.
I11(b) T3Application kitG1T1. An Application Kit will be made available to any potential grant applicant who requests a copy. This kit contains required forms, certifications, and instructions applicable to the submission of grant proposals.
I11(c) T3Format for research grant proposalsG1T1. Unless otherwise stated in the specific program solicitation, the following format applies:
I11(1) T3Application for fundingG1T1. All research grant proposals submitted by eligible applicants should contain an Application for Funding form, which must ï¿½260ï¿½be signed by the proposing principal investigator(s) and endorsed by the cognizant authorized organizational representative who possesses the necessary authority to commit the applicant's time and other relevant resources.
I11(2) T3Title of projectG1T1. The title of the project must be brief (80-character maximum), yet represent the major thrust of the research. This title will be used to provide information to the Congress and other interested parties who may be unfamiliar with scientific terms; therefore, highly technical words or phraseology should be avoided where possible. In addition, phrases such as ``investigation of'' or ``research on'' should not be used.
I11(3) T3ObjectivesG1T1. Clear, concise, complete, enumerated, and logically arranged statement(s) of the specific aims of the research must be included in all proposals.
I11(4) T3ProceduresG1T1. The procedures of methodology to be applied to the proposed research plan should be stated explicitly. This section should include but not necessarily be limited to:
I11(i) A description of the proposed investigations and/or experiments in the sequence in which it is planned to carry them out;
I11(ii) Techniques to be employed, including their feasibility;
I11(iii) Kinds of results expected;
I11(iv) Means by which data will be analyzed or interpreted;
I11(v) Pitfalls which might be encountered; and
I11(vi) Limitations to proposed procedures.
I11(5) T3JustificationG1T1. This section of the grant proposal should describe:
I11(i) The importance of the problem to the needs of the Department and to the Nation, including estimates of the magnitude of the problem;
I11(ii) The importance of starting the work during the current fiscal year; and
I11(iii) Reasons for having the work performed by the proposing organization.
I11(6) T3Literature reviewG1T1. A summary of pertinent publications with emphasis on their relationship to the research should be provided and should include all important and recent publications. The citations should be accurate, complete, written in acceptable journal format, and be appended to the proposal.
I11(7) T3Current researchG1T1. The relevancy of the proposed research to ongoing and, as yet, unpublished research of both the applicant and any other institutions should be described.
I11(8) T3Facilities and equipment.G1T1 All facilities, including laboratories, that are available for use or assignment to the proposed research project during the requested period of support, should be reported and described. Any materials, procedures, situations, or activities, whether or nor directly related to a particular phase of the proposed research, and which may be hazardous to personnel, must be explained fully, along with an outline of precautions to be exercised. All items of major instrumentation available for use or assignment to the proposed research project during the requested period of support should be itemized. In addition, items of nonexpendable equipment needed to conduct and bring the proposed project to a successful conclusion should be listed.
I11(9) T3Collaborative arrangements.G1T1 If the proposed project requires collaboration with other research scientists, corporations, organizations, agencies, or entities, such collaboration must be explained fully and justified. Evidence should be provided to assure peer reviewers that the collaborators involved agree with the arrangements. It should be specifically indicated whether or not such collaborative arrangements have the potential for any conflict(s) of interest. Proposals which indicate collaborative involvements must state which applicant is to receive any resulting grant award, since only one eligible applicant, as provided in ï¿½1A3401.3 may be the recipient of a research project grant under one proposal.
I11(10) T3Research timetable.G1T1 The applicant should outline all important research phases as a function of time, year by year.
I11(11) T3Personnel support.G1T1 All personnel who will be involved in the research effort must be identified clearly. For each scientist involved, the following should be included:
I11(i) An estimate of the time commitments necessary;
ï¿½261ï¿½I11(ii) Vitae of the principal investigator(s), senior associate(s), and other professional personnel to assist reviewers in evaluating the competence and experience of the project staff. This section should include curricula vitae of T3allG1T1 key persons who will work on the proposed research project, whether or not Federal funds are sought for their support. The vitae are to be no more than two pages each in length, excluding publication listings; and
I11(iii) A chronological listing of the most representative publications during the past five years shall be provided for each professional project member of whom a curriculum vitae appears under this section. Authors should be listed in the same order as they appear on each paper cited, along with the title and complete reference as these usually appear in journals.
I11(12) T3Budget.G1T1 A detailed budget is required for each year of requested support. In addition, a summary budget is required detailing requested support for the overall project period. A copy of the form which must be used for this purpose, along with instructions for completion, is included in the Application Kit identified under ï¿½1A3401.6(b) and may be reproduced as needed by applicants. Funds may be requested under any of the categories listed, provided that the item or service for which support is requested is allowable under applicable Federal cost principles and can be identified as necessary for successful conduct of the proposed research project. As stated in ï¿½1A3401.4 each grant recipient must match the Federal funds expended on a research project based on a formula of 50 percent Federal and 50 percent non-Federal funding. As stated in ï¿½1A3401.5, indirect costs and tuition remission costs are not allowable costs for purposes of this program and , thus, may not be used to satisfy the matching requirement set forth in ï¿½1A3401.4.
I11(13) T3Research involving special considerations.G1T1 A number of situations encountered in the conduct of research require special information and supporting documentation before funding can be approved for the project. If such situations are anticipated, the proposal must so indicate. It is expected that a significant number of rangeland grant proposals will involve the following:
I11(i) T3Recombinant DNA molecules.G1T1 All key personnel identified in a proposal and all endorsing officials of a proposed performing entity are required to comply with the guidelines establishing by the National Institutes of Health entitled, ``Guidelines for Research Involving Recombinant DNA Molecules,'' as revised. The Application Kit, identified above in ï¿½1A3401.6(b), contains a form which is suitable for such certification of compliance. In the event a project involving recombinant DNA and RNA molecules results in a grant award, the Institutional Biosafety Committee must approve the research before CSREES funds will be released.
I11(ii) T3Human subjects at risk.G1T1 Responsibility for safeguarding the rights and welfare of human subjects used in any research project supported with grant funds provided by the Department rests with the performing entity. Regulations have been issued by the Department under 7 CFR part 1c, Protection of Human Subjects. In the event that a project involving human subjects at risk is recommended for award, the applicant will be required to submit a statement certifying that the research plan has been reviewed and approved by the Institutional Review Board at the proposing organization or institution. The Application Kit, identified above in ï¿½1A3401.6(b), contains a form which is suitable for such certification. In the event a project involving human subjects results in a grant award, funds will be released only after the Institutional Committee has approved the project.
I11(iii) T3Laboratory animal care.G1T1 The responsibility for the humane care and treatment of any laboratory animal, which has the same meaning as ``animal'' in section 2(g) of the Animal Welfare Act of 1966, as amended (7 U.S.C. 2132(g)), used in any research project supported with Rangeland Research Grant Program funds rests with the performing organization. In this regard, all key personnel identified in a proposal and all endorsing officials of the proposed performing entity are required to comply with the applicable provisions of the Animal Welfare Act of 1966, as amended (7 U.S.C. 2131 T3et seq.G1T1) ï¿½262ï¿½and the regulations promulgated thereunder by the Secretary of Agriculture in 9 CFR parts 1, 2, 3, and 4. In the event that a project involving the use of a laboratory animal is recommended for award, the applicant will be required to submit a statement certifying such compliance. The Application Kit, identified above in ï¿½1A3401.6(b), contains a form which is suitable for such certification. In the event a project involving the use of living vertebrate animals results in a grant award, funds will be released only after the Institutional Animal Care and Use Committee has approved the project.
I11(14) T3Current and pending support.G1T1 All proposals must list any other current public or private research support, in addition to the proposed project, to which key personnel listed in the proposal under consideration have committed portions of their time, whether or not salary support for the person(s) involved is included in the budgets of the various projects. This section must also contain analogous information for all projects underway and for pending research proposals which are currently being considered by, or which will be submitted in the near future to, other possible sponsors, including other Departmental programs or agencies. Concurrent submission of identical or similar projects to other possible sponsors will not prejudice its review or evaluation by the Administrator or experts or consultants engaged by the Administrator for this purpose. The Application Kit, identified above in ï¿½1A3401.6(b), contains a form which is suitable for listing current and pending support.
I11(15) T3Additions to project description.G1T1 Each project description is expected by the Administrator, members of peer review groups, and the relevant program staff to be complete in itself. However, in those instances in which the inclusion of additional information is necessary, the number of copies submitted should match the number of copies of the application requested in the annual solicitation of proposals as indicated in ï¿½1A3401.6(a)(4). Each set of such materials must be identified with the title of the research project as it appears in the Application for Funding and the name(s) of the principal investigator(s). Examples of additional materials may include photographs which do not reproduce well, reprints, and other pertinent materials which are deemed to be unsuitable for inclusion in the proposal.
I11(16) T3National Environmental Policy Act.G1T1 As outlined in CSREES's implementing regulations of the National Environmental Policy Act of 1969 (NEPA) at 7 CFR part 3407, environmental data or documentation for the proposed project is to be provided to CSREES in order to assist CSREES in carrying out its responsibilities under NEPA. These responsibilities include determining whether the project requires an Environmental Assessment or an Environmental Impact Statement or whether it can be excluded from this requirement on the basis of several categorical exclusions listed in 7 CFR part 3407. In this regard, the applicant should review the categories defined for exclusion to ascertain whether the proposed project may fall within one or more of the exclusions, and should indicate if it does so on the National Environmental Policy Act Exclusions Form (Form CSREES_1234) provided in the Application Kit. Even though the applicant considers that a proposed project may fall within a categorical exclusion, CSREES may determine that an Environmental Assessment or an Environmental Impact Statement is necessary for a proposed project should substantial controversy on environmental grounds exist or if other extraordinary conditions or circumstances are present that may cause such activity to have a significant environmental effect.
I11(17) T3Organizational management information.G1T1 Specific management information relating to an applicant shall be submitted on an T3one-time basis prior to the award of a research project grantG1T1 identified under this part if such information has not been provided previously under this or another program for which the sponsoring agency is responsible. Copies of forms recommended for use in fulfilling the requirements contained in this section will be provided by the agency specified in this part once a research project grant has been recommended for funding.

ï¿½263ï¿½I80ï¿½1A3401.7
I89Evaluation and disposition of applications.
I11(a) T3Evaluation.G1T1 All proposals received from eligible applicants in accordance with eligible research problem or program areas and deadlines established in the applicable request for proposals shall be evaluated by the Administrator through such officers, employees, and others as the Administrator determines are particularly qualified in the areas of research represented by particular projects. To assist in equitably and objectively evaluating proposals and to obtain the best possible balance of viewpoints, the Administrator may solicit the advice of peer scientists, T3ad hocG1T1 reviewers, or others who are recognized specialists in the research program areas covered by the applications received. Specific evaluations will be based upon the criteria established in subpart B of this part, ï¿½1A3401.17, unless CSREES determines that different criteria are necessary for the proper evaluation of proposals in one or more specific program areas, and announces such criteria and their relative importance in the annual program solicitation. The overriding purpose of such evaluations is to provide information upon which the Administrator can make informed judgments in selecting proposals for ultimate support. Incomplete, unclear, or poorly organized applications will work to the detriment of applicants during the peer evaluation process. To ensure a comprehensive evaluation, all applications should be written with the care and thoroughness accorded papers for publication.
I11(b) T3Disposition.G1T1 On the basis of the Administrator's evaluation of an application in accordance with paragraph (a) of this section, the Administrator will approve using currently available funds, defer support due to lack of funds or a need for further evaluations, or disapprove support for the proposed project in whole or in part. With respect to approved projects, the Administrator will determine the project period (subject to extension as provided in ï¿½1A3401.9(c)) during which the project may be supported. Any deferral or disapproval of an application will not preclude its reconsideration or a reapplication during subsequent fiscal years.

I80ï¿½1A3401.8
I89Grant awards.
I11(a) T3General.G1T1 Within the limit of funds available for such purpose, the awarding official shall make research project grants to those responsible, eligible applicants whose proposals are judged most meritorious in the announced program areas under the evaluation criteria and procedures set forth in this part. The date specified by the Administrator as the beginning of the project period shall be no later than September 30 of the Federal fiscal year in which the project is approved for support and funds are appropriated for such purpose, unless otherwise permitted by law. All funds granted under this part shall be expended solely for the purpose for which the funds are granted in accordance with the approved application and budget, the regulations of this part, the terms and conditions of the award, the applicable Federal cost principles, and the Department's ``Uniform Federal Assistance Regulations'' (parts 3015 and 3019 of this title).
I11(b) T3Grant award document and notice of grant awardG1T1_(1) T3Grant award documents.G1T1 The grant award document shall include at a minimum the following:
I11(i) Legal name and address of performing organization or institution to whom the Administrator has awarded a rangeland research project grant under the terms of this part;
I11(ii) Title of project;
I11(iii) Name(s) and address(es) of principal investigator(s) chosen to direct and control approved activities; 
I11(iv) Identifying grant number assigned by the Department;
I11(v) Project period, which specifies how long the Department intends to support the effort without requiring recompetition for funds;
I11(vi) Total amount of Departmental financial assistance approved by the Administrator during the project period;
I11(vii) Legal authority(ies) under which the research project grant is awarded to accomplish the purpose of the law; 
I11(viii) Approved budget plan for categorizing allocable project funds to accomplish the stated purpose of the research project grant award; and
ï¿½264ï¿½I11(ix) Other information or provisions deemed necessary by the Department to carry out its granting activities or to accomplish the purpose of a particular research project grant.
I11(2) T3Notice of grant award.G1T1 The notice of grant award, in the form of a letter, will be prepared and will provide pertinent instructions or information to the grantee that is not included in the grant award document.
I11(c) T3Categories of grant instruments.G1T1 The major categories of grant instruments by which the Department may provide support are as follows:
I11(1) T3Standard grant.G1T1 This is a grant instrument by which the Department agrees to support a specified level of research effort for a predetermined project period without the announced intention of providing additional support at a future date. This type of research project grant is approved on the basis of peer review and recommendation and is funded for the entire project period at the time of award.
I11(2) T3Renewal grant.G1T1 This is a document by which the Department agrees to provide additional funding under a standard grant as specified in paragraph (c)(1) of this section for a project period beyond that approved in an original or amended award, provided that the cumulative period does not exceed the statutory limitation. When a renewal application is submitted, it should include a summary of progress to date under the previous grant instrument. Such a renewal shall be based upon new application, T3de novoG1T1 peer review and staff evaluation, new recommendation and approval, and a new award instrument.
I11(3) T3Continuation grant.G1T1 This is a grant instrument by which the Department agrees to support a specified level of effort for a predetermined period of time with a statement of intention to provide additional support at a future date, provided that performance has been satisfactory, appropriations are available for this purpose, and continued support would be in the best interests of the Federal government and the public. It involves a long-term research project that is considered by peer reviewers and Departmental officers to have an unusually high degree of scientific merit, the results of which are expected to have a significant impact on the productivity of the Nation's rangelands, and it supports the efforts of experienced scientists with records of outstanding research accomplishments. This kind of document normally will be awarded for an initial one-year period and any subsequent continuation research project grants also will be awarded in one-year increments, but in no case may the cumulative period of the project exceed the statutory limit. The award of a continuation research project grant to fund an initial or succeeding budget period does not constitute an obligation to fund any subsequent budget period. A grantee must submit a separate application for continued support for each subsequent fiscal year. Requests for such continued support must be submitted in duplicate at least three months prior to the expiration date of the budget period currently being funded. Such requests must include: an interim progress report detailing all work performed to date; an Application for Funding; a proposed budget for the enuring period, including an estimate of funds anticipated to remain unobligated at the end of the current budget period; and current information regarding other extramural support for senior personnel. Decisions regarding continued support and the actual funding levels of such support in future years usually will be made administratively after consideration of such factors as the grantee's progress and management practices and within the context of available funds. Since initial peer reviews were based upon the full term and scope of the original rangeland research application for funding, additional evaluations of this type generally are not required prior to successive years' support. However, in unusual cases (e.g., when the nature of the project or key personnel change or when the amount of future support requested substantially exceeds the application for funding originally reviewed and approved), additional reviews may be required prior to approval of continued funding.
I11(4) T3Supplemental grant.G1T1 This is an instrument by which the Department ï¿½265ï¿½agrees to provide small amounts of additional funding under a standard, renewal, or continuation grant as specified in paragraphs (c)(1), (c)(2), and (c)(3) of this section and may involve a short-term (usually six months or less) extension of the project period beyond that approved in an original or amended award, but in no case may the cumulative period of the project, including short term extensions, exceed the statutory time limitation. A supplement is awarded only if required to assure adequate completion of the original scope of work and if there is sufficient justification of need to warrant such action. A request of this nature normally does not require additional peer review.
I11(d) T3Obligation of the Federal government.G1T1 Neither the approval of any application nor the award of any research project grant shall commit or obligate the United States in any way to make any renewal, supplemental, continuation, or other award with respect to any approved application or portion of an approved application.

I80ï¿½1A3401.9
I89Use of funds; changes.
I11(a) T3Delegation of fiscal responsibility.G1T1 The grantee may not delegate or transfer in whole or in part, to another person, institution, or organization the responsibility for use or expenditure of grant funds.
I11(b) T3Change in project plans.G1T1 (1) The permissible changes by the grantee, principal investigator(s), or other key project personnel in the approved research project grant shall be limited to changes in methodology, techniques, or other aspects of the project to expedite achievement of the projects' approved goals. If the grantee or the principal investigator(s) is uncertain as to whether a change complies with this provision, the question shall be referred to the Administrator for a final determination.
I11(2) Changes in approved goals, or objectives, shall be requested by the grantee and approved in writing by the Department prior to effecting such changes. In no event shall requests for such changes be approved which are outside the scope of the original approved project.
I11(3) Changes in approved project leadership or the replacement or reassignment of other key project personnel shall be requested by the grantee and approved in writing by the Department prior to effecting such changes.
I11(4) Transfers of actual performance of the substantive programmatic work in whole or in part and provisions for payment of funds, whether or not Federal funds are involved, shall be requested by the grantee and approved in writing by the Department prior to effecting such changes, except as may be allowed in the terms and conditions of a grant award.
I11(c) T3Changes in project period.G1T1 The project period determined pursuant to ï¿½1A3401.7(b) may be extended by the Administrator without additional financial support, for such additional period(s) as the Administrator determines may be necessary to complete, or fulfill the purposes of, an approved project. Any extension, when combined with the originally approved or amended project period, shall be conditioned upon prior request by the grantee and approval in writing by the Department, unless prescribed otherwise in the terms and conditions of a grant award.
I11(d) T3Changes in approved budget.G1T1 The terms and conditions of a grant will prescribe circumstances under which written Departmental approval will be requested and obtained prior to instituting changes in an approved budget.

I80ï¿½1A3401.10
I89Other Federal statutes and regulations that apply.
I11Several other Federal statutes and/or regulations apply to grant proposals considered for review or to research project grants awarded under this part. These include but are not limited to:

Q04
I217 CFR Part 1c_USDA implementation of the Federal Policy for the Protection of Human Subjects;
I217 CFR Part 1.1_USDA implementation of Freedom of Information Act:
I217 CFR Part 3_USDA implementation of OMB Circular Aï¿½09129 regarding debt collection;
I217 CFR Part 15, Subpart A_USDA implementation of Title VI of the Civil Rights Act of 1964;
I217 CFR Part 3015_USDA Uniform Federal Assistance Regulations, implementing OMB directives (i.e., Circular Nos. Aï¿½09110, Aï¿½0921, and Aï¿½09122) and incorporating provisions of 31 ï¿½266ï¿½U.S.C. 6301ï¿½096308 (formerly, the Federal Grant and Cooperative Agreement Act of 1977), as well as general policy requirements applicable to recipients of Departmental financial assistance;
I217 CFR Part 3017, as amended_USDA implementation of Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants); 
I217 CFR Part 3018_USDA implementation of New Restrictions on Lobbying. Imposes new prohibitions and requirements for disclosure and certification related to lobbying on recipients of Federal contracts, grants, cooperative agreements, and loans;
I217 CFR Part 3019_USDA Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-profit Organizations;
I217 CFR Part 3051_Audits of Institutions of Higher Education and Other Nonprofit Institutions;
I217 CFR Part 3407_CSREES procedures to implement the National Environmental Policy Act;
I2129 U.S.C. 794 (section 504, Rehabilitation Act of 1973) and 7 CFR Part 15B (USDA implementation of statute)_prohibiting discrimination based upon physical or mental handicap in Federally assisted programs; and
I2135 U.S.C. 200 T3et seq.G1T1_Bayh-Dole Act, controlling allocation of rights to inventions made by employees of small business firms and domestic nonprofit organizations, including universities, in Federally assisted programs (implementing regulations are contained in 37 CFR part 401).

I80ï¿½1A3401.11
I89Other conditions.
I11The Administrator may, with respect to any research project grant or to any class of awards, impose additional conditions prior to or at the time of any award when, in the Administrator's judgment, such conditions are necessary to assure or protect advancement of the approved project, the interests of the public, or the conservation of grant funds.

I56Subpart B_Scientific Peer Review of Research Applications for Funding

I80ï¿½1A3401.12
I89Establishment and operation of peer review groups.
I11Subject to ï¿½1A3401.7, the Administrator will adopt procedures for the conduct of peer reviews and the formulation of recommendations under ï¿½1A3401.16.

I80ï¿½1A3401.13
I89Composition of peer review groups.
I11Peer review group members will be selected based upon their training or experience in relevant scientific or technical fields, taking into account the following factors:
I11(a) The level of formal scientific or technical education by the individual;
I11(b) The extent to which the individual has engaged in relevant research, the capacities in which the individual has done so (e.g., principal investigator, assistant), and the quality of such research;
I11(c) Professional recognition as reflected by awards and other honors received from scientific and professional organizations outside of the Department;
I11(d) The need of the group to include within its membership experts from various areas of specialization within relevant scientific or technical fields;
I11(e) The need of the group to include within its membership experts from a variety of organizational types (e.g., universities, industry, private consultant(s)) and geographic locations; and 
I11(f) The need of the group to maintain a balanced membership, e.g., minority and female representation and an equitable age distribution.

I80ï¿½1A3401.14
I89Conflicts of interest.
I11Members of peer review groups covered by this part are subject to relevant provisions contained in Title 18 of the United States Code relating to criminal activity, Department regulations governing employee responsibilities and conduct (part 0 of this title), and Executive Order 11222 (3 CFR, 1964ï¿½091965 Comp., p. 306), as amended.

I80ï¿½1A3401.15
I89Availability of information.
I11Information regarding the peer review process will be made available to the extent permitted under the Freedom of Information Act (5 U.S.C. 552), the Privacy Act (5 U.S.C. 552a.), and implementing Departmental regulations (part 1 of this title).

I80ï¿½1A3401.16
I89Proposal review.
I11(a) All research Applications for Funding will be acknowledged. Prior to technical examination, a preliminary review will be made for responsiveness ï¿½267ï¿½to the request for proposals (e.g., relationship of application to research program area). Proposals that do not fall within the guidelines as stated in the annual request for proposals will be eliminated from competition and will be returned to the applicant. Proposals whose budgets exceed the maximum allowable amount for a particular program area as announced in the request for proposals may be considered as lying outside the guidelines.
I11(b) All applications will be reviewed carefully by the Administrator, qualified officers or employees of the Department, the respective merit review panel, and ad hoc reviewers, as required. Written comments will be solicited from ad hoc reviewers, when required, and individual written comments and in-depth discussions will be provided by peer review group members prior to recommending applications for funding. Applications will be ranked and support levels recommended within the limitation of total available funding for each research program area as announced in the applicable request for proposals.
I11(c) Except to the extent otherwise provided by law, such recommendations are advisory only and are not binding on program officers or on the awarding official.

I80ï¿½1A3401.17 
I89Review criteria.
I11(a) Federally funded research supported under these provisions shall be designed to, among other things, accomplish one or more of the following purposes:
I11(1) Improve management of rangelands as an integrated system and/or watershed;
I11(2) Remedy unstable or unsatisfactory rangeland conditions;
I11(3) Increase revegetation and/or rehabilitation of rangelands;
I11(4) Examine the health of rangelands; and
I11(5) Define economic parameters associated with rangelands.
I11(b) In carrying out its review under ï¿½1A3401.16, the peer review panel will use the following form upon which the evaluation criteria to be used are enumerated, unless, pursuant to ï¿½1A3401.7(a), different evaluation criteria are specified in the annual solicitation of proposals for a particular program:




I71Peer Panel Scoring Form

I77Proposal Identification No.

Q02

I77Institution and Project Title

I71I. Basic Requirement:

I21Proposal falls within guidelines? G7T2XXXXXG1T1 Yes G7T2XXXXXG1T1 No. If no, explain why proposal does not meet guidelines under comment section of this form.


I71II. Selection Criteria:

c5,L2,tp0,i1,s25,5,6,6,5 I95   h1  h1Score 1ï¿½0910  h1Weight factor  h1Score X weight factor  h1Comments   
j
I011. Overall scientific and technical quality of proposalDD10DD

I012. Scientific and technical quality of the approachDD10DD

I013. Relevance and importance of proposed research to solution of specific areas of inquiryDD6DD

I014. Feasibility of attaining objectives; adequacy of professional training and experience, facilities and equipmentDD5DD 

e


I77Score
Q02

I77Summary Comments
Q04



I11(c) Proposals satisfactorily meeting the guidelines will be evaluated and scored by the peer review panel for each criterion utilizing a scale of 1 through 10. A score of one (1) will be considered low and a score of ten (10) will be considered high for each selection criterion. A weighted factor is used for each criterion. 

I95Pt. 3402
I52PART 3402_FOOD AND AGRICULTURAL SCIENCES NATIONAL NEEDS GRADUATE FELLOWSHIP GRANTS PROGRAM


I86Subpart A_General Introduction
S8006I18Sec.
S8010I263402.1Applicability of regulations.
I263402.2Definitions.
I263402.3Institutional eligibility.

I86Subpart B_Program Description
I263402.4Food and agricultural sciences areas targeted for national needs graduate fellowship grants support.
ï¿½268ï¿½I263402.5Overview of National Needs Graduate Fellowship Grants Program.
I263402.6Fellowship appointments.
I263402.7Fellowship activities.
I263402.8Financial provisions.

I86Subpart C_Preparation of a Proposal
I263402.9Application package.
I263402.10Proposal cover page.
I263402.11National need summary.
I263402.12National need narrative.
I263402.13Budget.
I263402.14Faculty vitae.
I263402.15Appendix.

I86Subpart D_Submission of a Proposal
I263402.16Intent to submit a proposal.
I263402.17Where to submit a proposal.

I86Subpart E_Proposal Review and Evaluation
I263402.18Proposal review.
I263402.19Evaluation criteria.

I86Subpart F_Supplementary Information
I263402.20Terms and conditions of grant awards.
I263402.21Grant awards.
I263402.22Other Federal statutes and regulations that apply.
I263402.23Confidential aspects of proposals and awards.
I263402.24Access to peer review information.
I263402.25Documentation of progress on funded projects.
I263402.26Evaluation of program.

Q04I21T5Authority:  T17 U.S.C. 3316.
Q04I21T5Source:  T159 FR 68073, Dec. 30, 1994, unless otherwise noted.

I56Subpart A_General Introduction

I80ï¿½1A3402.1 
I89Applicability of regulations.
I11(a) The regulations of this part apply to competitive grants awarded under the provisions of section 1417(b)(6) of the National Agricultural Research, Extension and Teaching Policy Act of 1977, as amended, 7 U.S.C. 3152(b)(6). This statute designates the U.S. Department of Agriculture (USDA) as the lead Federal agency for agricultural research, extension, and teaching in the food and agricultural sciences. It authorizes the Secretary of Agriculture, who has delegated the authority to the Cooperative State Research, Education, and Extension Service (CSREES), to make competitive grants to land-grant colleges and universities, colleges and universities having significant minority enrollments and a demonstrable capacity to carry out the teaching of food and agricultural sciences, and to other colleges and universities having a demonstrable capacity to carry out the teaching of food and agricultural sciences, to administer and conduct graduate fellowship programs to help meet the Nation's needs for development of scientific and professional expertise in the food and agricultural sciences. The fellowships are intended to encourage outstanding students to pursue and complete graduate degrees in the areas of food and agricultural sciences designated by CSREES through the Office of Higher Education Programs (HEP) as national needs.
I11(b) The regulations of this part do not apply to grants awarded by the Department of Agriculture under any other authority.

I80ï¿½1A3402.2 
I89Definitions.
I11As used in this part:
I11T3Citizen or national of the United StatesG1T1 means
I11(1) A citizen or native resident of a State; or,
I11(2) A person defined in the Immigration and Nationality Act, 8 U.S.C. 1101(a)(22), who, though not a citizen of the United States, owes permanent allegiance to the United States.
I11T3College and universityG1T1 means an educational institution in any State which
I11(1) Admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate,
I11(2) Is legally authorized within such State to provide a program of education beyond secondary education,
I11(3) Provides an educational program for which a bachelor's degree or any other higher degree is awarded,
I11(4) Is a public or other nonprofit institution, and
I11(5) Is accredited by a nationally recognized accrediting agency or association.
I11T3Food and agricultural sciencesG1T1 means basic, applied, and developmental research, extension, and teaching activities in the food, agricultural, renewable natural resources, forestry, and ï¿½269ï¿½physical and social sciences in the broadest sense of these terms including but not limited to research, extension and teaching activities concerned with the production, processing, marketing, distribution, conservation, consumption, research, and development of food and agriculturally related products and services, inclusive of programs in agriculture, natural resources, aquaculture, forestry, veterinary medicine, home economics, rural development, and closely allied fields.
I11T3Graduate degreeG1T1 means a Master's or doctoral degree.
I11T3StateG1T1 means any one of the fifty States, the Commonwealth of Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Marianas, the Trust Territory of the Pacific Islands, the Virgin Islands of the United States, and the District of Columbia.
I11T3Teaching activitiesG1T1 means formal classroom instruction, laboratory instruction, and practicum experience specific to the food and agricultural sciences and matters relating thereto conducted by colleges and universities offering baccalaureate or higher degrees.

I80ï¿½1A3402.3 
I89Institutional eligibility.
I11Proposals may be submitted by land-grant colleges and universities, by colleges and universities having significant minority enrollments and a demonstrable capacity to carry out the teaching of food and agricultural sciences, and by other colleges and universities having a demonstrable capacity to carry out the teaching of food and agricultural sciences. All applicants should be institutions that confer a graduate degree in at least one area of the food and agricultural sciences targeted for national needs fellowships, that have a significant ongoing commitment to the food and agricultural sciences generally, and that have a significant ongoing commitment to the specific subject area for which a grant application is made. It is the objective to award grants to colleges and universities which have notable teaching and research competencies in the food and agricultural sciences. The grants are specifically intended to support fellowship programs that encourage outstanding students to pursue and complete a graduate degree at such institutions in an area of the food and agricultural sciences for which there is a national need for the development of scientific and professional expertise. Therefore, institutions which currently have excellent programs of graduate study and research in the food and agricultural sciences dealing with targeted national needs are particularly encouraged to apply.

I56Subpart B_Program Description

I80ï¿½1A3402.4 
I89Food and agricultural sciences areas targeted for national needs graduate fellowship grants support.
I11Areas of the food and agricultural sciences appropriate for fellowship grant applications are those in which developing shortages of expertise have been determined and targeted by HEP for national needs fellowship grant support. When funds are available and HEP determines that a new competition is warranted, the specific areas and funds per area will be identified in a T4Federal RegisterG1T1 notice announcing the program and soliciting program applications.

I80ï¿½1A3402.5 
I89Overview of National Needs Graduate Fellowship Grants Program.
I11(a) The program will provide funds for a limited number of grants to support fixed graduate student stipends and fixed cost-of-education institutional allowances. These grants will be awarded competitively to eligible institutions. In order to encourage the development of special activities that are expected to contribute to Fellows' advanced degree objectives, the program will also provide competitive, special international study or thesis/dissertation research travel allowances for a limited number of USDA Graduate Fellows.
I11(b) Based on the amount of funds appropriated in any fiscal year, HEP will determine:
I11(1) Whether new competitions for graduate fellowships and/or special international study or thesis/dissertation research travel allowances will be held during that fiscal year;
ï¿½270ï¿½I11(2) The graduate degree level(s) to be supported_Master's and/or doctoral;
I11(3) The proportion of appropriations to be targeted for the fellowship stipends for each respective graduate degree level supported;
I11(4) The proportion of appropriations to be targeted for the cost-of-education institutional allowances for each respective graduate degree level supported;
I11(5) The proportion of appropriations to be targeted for the special international study or thesis/dissertation research travel allowances for each respective graduate degree level supported;
I11(6) The allowable stipend amount for each respective graduate degree level supported, the cost-of-education institutional allowance for each respective graduate degree level supported, and the maximum funds available for each special international study or thesis/dissertation research travel allowance for each respective graduate degree level supported; and
I11(7) The maximum total funds that may be awarded to an institution under the program in a given fiscal year.
I11(c) HEP will also determine:
I11(1) The maximum number of national needs areas for which funding may be requested in a single proposal;
I11(2) The degree levels for which funding may be requested in a single proposal;
I11(3) The minimum and maximum number of fellowships for which an institution may apply in a single proposal; and
I11(4) The limits on the total number of proposals that can be submitted by an institution, college, school, or other administrative unit. 
I11(d) All of these determinations will be published as a part of the program announcement in the T4Federal RegisterG1T1.
I11(e) For each USDA Graduate Fellow who desires to be considered for a special international study or thesis/dissertation research travel allowance, the project director must apply to HEP for a supplemental grant in accordance with instructions published in the program announcement in the T4Federal RegisterG1T1. Each application must include an ``Application for Funding'' (Form CSRSï¿½09661) and a ``Budget'' (Form CSRSï¿½0955).
I11(1) To provide HEP with sufficient information upon which to evaluate the merits of the requests for a special international study or thesis/dissertation research travel allowance, each application for a supplemental grant must contain a narrative which provides the following:
I11(i) The specific destination(s) and duration of the travel;
I11(ii) The specific study or thesis/dissertation research activities in which the Fellow will be engaged;
I11(iii) How the international experience will contribute to the Fellow's program of study;
I11(iv) A budget narrative specifying and justifying the dollar amount requested for the travel;
I11(v) Summary credentials of the faculty or other professionals with whom the Fellow will be working during the international experience (summary credentials must not exceed three pages per person; ``Summary Vita_Teaching Proposal'' (Form CSRSï¿½09708) may be used for this purpose);
I11(vi) A letter from the dean of the Fellow's college or equivalent administrative unit supporting the Fellow's travel request and certifying that the travel experience will not jeopardize the Fellow's satisfactory programs toward degree completion; and
I11(vii) A letter from the fellowship grant project director certifying the Fellow's eligibility, the accuracy of the Fellow's travel request, and the relevance of the travel to the Fellow's advanced degree objectives.
I11(2) The narrative portion of the application must not exceed 10 pages, excluding the summary vita/vitae.
I11(f) All complete requests will be evaluated by professional staff from USDA or other Federal agencies, as appropriate. Evaluation criteria will be published in the program announcement in the T4Federal RegisterG1T1. Awards will be made to the extent possible based on availability of funds.
I11(g) Any current fellow with sufficient time to complete the international experience before the termination date of ï¿½271ï¿½the grant under which he/she is supported is eligible for a special international study or thesis/dissertation research travel allowance. Before the international study or thesis/dissertation research travel may commence, a Fellow must have completed one academic year of full-time study, as defined by the institution, under the fellowship appointment and arrangements must have been formalized for the Fellow to study and/or conduct research in the foreign location(s).

I80ï¿½1A3402.6
I89Fellowship appointments.
I11(a)(1) Fellows must be identified and fellowships must be awarded within 15 months of the effective date of a grant. Institutions failing to meet this deadline will be required to refund monies associated with any unawarded fellowship(s). Fellowship appointments may be held only by persons who enroll and pursue full-time study in a graduate degree program in the national need area and at the degree level supported by the grant.
I11(2) In addition, fellows:
I11(i) must be newly recruited;
I11(ii) must not have been enrolled previously in the academic program at the same degree level; 
I11(iii) must be citizens of nationals of the United States as determined in accordance with Federal law; and
I11(iv) must have strong interest, as judged by the institution, in pursuing a degree in a targeted national need area and in preparing for a career as a food or agricultural scientist or professional.
I11(3) It will be the responsibility of the grantee institution to award fellowships to students of superior academic ability.
I11(4) A doctoral Fellow who maintains satisfactory progress in his or her course of study is eligible for support for a maximum of 36 months within a 45-month period. Master's level Fellows, maintaining satisfactory progress, are eligible for support for a maximum of 24 months during a 33-month period. However, it is the intent of this program that Fellows pursue full-time uninterrupted study or thesis/dissertation research, including time spent pursuing USDA-funded special international study or thesis/dissertation research activities. For Fellows requiring additional time to complete a degree, it is expected that the institution will endeavor to continue supporting individuals originally appointed to fellowships through such other institutional means as teaching assistantships and research assistantships. For Fellows who complete the program of study early (less than 24 hours for Master's degree or 36 months for doctoral degree), the institution must refund any unexpended monies to the granting agency.
I11(b) Within the framework of the regulations in this part, all decisions with respect to the appointment of Fellows will be made by the institution. However, institutions are urged to take maximum advantage of opportunities for awarding fellowships to members of underrepresented groups at the graduate level in the food and agricultural sciences, particularly minorities and women. Throughout a Fellow's tenure, the institution should satisfy itself that the Fellow is making satisfactory academic progress, and carrying out, or planning to carry out, national needs related research. If an institution finds it necessary to terminate support of a Fellow for insufficient academic progress or by decision on the part of the Fellow, the Fellow becomes ineligible for future assistance under the program. If a Fellow finds it necessary to interrupt his or her program of study because of health, personal reasons, outside employment, or acceptance of an assistantship, the institution must reserve the funds for the purpose of allowing the Fellow to resume funded study any time within a 9-month period. However, a Fellow who finds it necessary to interrupt his or her program of study more than one time cannot exceed a total of 9 months' cumulative leave status without forfeiting eligibility. For fellowships terminated because of insufficient academic progress, a decision on the part of the Fellow, or reserved due to an interrupted program of study but not resumed within the required time period, unexpended monies must be refunded. Institutions may not use unexpended monies associated with a terminated fellowship to recruit and support a ``replacement'' Fellow.
ï¿½272ï¿½I11(c) Only Fellows enrolled in Master's programs of study may be supported under a Master's fellowship grant. Only Fellows enrolled in doctoral programs of study may be supported under a doctoral fellowship grant.

I80ï¿½1A3402.7 
I89Fellowship activities.
I11A Fellow must be enrolled as a full-time graduate student, as defined by the institution, at all times during the tenure of the fellowship in the national need area and at the degree level supported by the grant. This includes the time used for special international study or thesis/dissertation research if the international travel is funded through a special international study or thesis/dissertation research travel allowance under this grant program. However, the normal requirement of formal registration during part of this tenure may be waived if permitted by the policy of the fellowship institution, provided that the fellow is making satisfactory progress toward degree completion and remains engaged in appropriate full-time fellowship activities such as thesis/dissertation research. Fellows in academic institutions are not entitled to vacations as such. They are entitled to the short normal student holidays observed by the institution. The time between academic semesters or quarters is to be utilized as an active part of the grant period. During the period of support, a Fellow may not accept employment by the institution or any other agency. However, a grant supporting research costs of the Fellow is acceptable, exclusive of salary or wages and fringe benefits for the Fellow.

I80ï¿½1A3402.8 
I89Financial provisions.
I11The basis fellowship stipend, cost-of-education institutional allowance, and special international study or thesis/dissertation research travel allowance that may be paid from grant funds will be determined by HEP contingent upon appropriations. The amount of the stipend, cost-of-education institution allowance, and special international study or thesis/dissertation research travel allowance will be cited in the program announcement in the T4Federal RegisterG1T1. An institution may elect to apply the cost-of-education institutional allowance to a Fellow's tuition and fees; however, such is not required. The allowance also may be used by an institution to defray other program expenses (e.g., recruitment, travel, publications, or salaries of project personnel). Tuition and fees are the responsibility of the Fellow unless an institution elects to use its cost-of-education institutional allowance for this purpose or elects to pay such costs out of other non-USDA monies. No dependency allowances are provided for Fellows. Stipend payments and special international study or thesis/dissertation research travel allowances will be made to Fellows by the institution, according to standard institutional procedures for fellowships and assistantships.

I56Subpart C_Preparation of a Proposal

I80ï¿½1A3402.9 
I89Application package.
I11An application package will be made available to any potential grant applicant upon request. This package will include all necessary forms and instructions to apply for a grant under this program. The package also includes the regulatory provisions applicable to the program.

I80ï¿½1A3402.10 
I89Proposal cover page.
I11The Proposal Cover Page, Form CSRS 701, must be completed in its entirety including all authorizing signatures. One copy of each grant application must contain the original pen-and-ink signature of:
I11(a) The Project Director(s); 
I11(b) The Authorized Certifying Representative for the college or equivalent administrative unit; and 
I11(c) The Authorized Certifying Representative for the institution.

I80ï¿½1A3402.11 
I89National need summary.
I11Using the National Need Summary, Form CSRSï¿½09702, applicants must summarize the proposed graduate program of study and the academic and research strengths of the institution in the national need area for which funding is requested. To the extent possible, applicants should emphasize the uniqueness of the proposed graduate program ï¿½273ï¿½of study. The summary should not include any reference to the specific number of fellowships requested. The information on the summary page will be used in assigning the most appropriate panelists to review a proposal. If a proposal is supported, this page may be used in program publications.

I80ï¿½1A3402.12 
I89National need narrative.
I11A narrative for the national need area should be written in five sections limited to no more than 20 pages, and preceded by a table of contents. The table of contents is not considered part of the 20-page limitation. The narrative should be typed on one side of the page only, using a font no smaller than 12 point, and double-spaced. The five sections to be included in the narrative are as follows:
Q04
I21Sec. 1. In this section, applicants should establish clearly that the proposed program of study and research will result in the development of outstanding expertise in the national need area for which funding is requested and will do so in a reasonable period of time. Applicants should present a detailed description of the proposed graduate program of study and research. This section of the narrative should contain, but need not be limited to, the following components:
I21(a) The plan should specifically address the course work which Fellows will be required to take rather than the overall spectrum of departmental offerings. Identify courses, summarize content, and discuss sequencing. Explain how course work will relate to Fellows' research.
I21(b) Identify and describe areas of research that Fellows will be encouraged to engage in via a thesis or dissertation.
I21(c) Discuss graduate program examination requirements, such as a proficiency or qualifying examination, a comprehensive examination, and an oral examination.
I21(d) Include a projected timetable for completing the proposed graduate program of study and research.
I21(e) If admission to a proposed doctoral program does not require a Master's degree, discuss how institutional procedures allow for the bypass of a Master's degree.
I21Sec. 2. In this section, applicants should highlight thoroughly any special features of the graduate program such as the extent to which it will involve an inter-disciplinary, multi-disciplinary, or cross-disciplinary approach resulting in the development of expertise transcending a single discipline. Applicants should also discuss any other special features such as development of an unusual collateral specialization in a related discipline, experiential learning opportunities such as practicums or internships, unique mentoring programs, seminars, or a multi-university collaborative approach.
I21Sec. 3. In this section, applicants should substantiate clearly the institution's position that it presently provides a major, productive, and recognized program of graduate study and research at the level(s) of study in the area of national need in which selected Fellows would be engaged. Applicants should include evidence of the quality of existing academic attributes and resources of the institution such as teaching and research faculty, instructional and research instrumentation and facilities, library resources, computing resources, and other such indicators of academic quality. Also, applicants should discuss the extent to which graduate students have access to such institutional resources.
I21Sec. 4. In this section, applicants should document thoroughly the institution's plans and procedures for managing fellowship appointments. Applicants should explain in-depth the plan for recruiting academically outstanding Fellows and procedures for selecting Fellows of superior quality who appear to be highly motivated to prepare for and pursue a career as a food or agricultural scientist or professional. In addition, applicants should cite specific plans for advising and guiding Fellows through a program of study, as well as any special programs or activities that will be offered to enrich the Fellows' graduate study. Particular attention should be given to the plans and procedures for recruiting and retaining members of underrepresented groups.
I21Sec. 5. In this section, applicants should include important supplementary summary data for the institution relevant to the national need area for which funding is requested. Examples of appropriate data are indices of student quality, enrollments and degrees awarded for recent years, placement of graduates, facilities, faculty research support, and publications of previous graduate students. To the extent possible, applicants should present the supplementary summary data in tabular form.

I80ï¿½1A3402.13 
I89Budget.
I11Applicants must prepare the Proposal Budget, Form CSRSï¿½09703, identifying all costs associated with the proposal. Instructions for completing the ``Proposal Budget'' are provided on the form. Pagination for the budget page should be continuous following the national need narrative and so indicated in the table of contents.

ï¿½274ï¿½I80ï¿½1A3402.14 
I89Faculty vitae.
I11This section should include a Summary Vita, Form CSRSï¿½09708, for each faculty member contributing significantly to institutional competence at the level of graduate study for the national area addressed in the proposal. Applicants should arrange the faculty vitae with the project director(s) first, followed by the remaining faculty, in alphabetical order. Pagination for the faculty vitae should be continuous following the budget page and so indicated in the table of contents.

I80ï¿½1A3402.15 
I89Appendix.
I11Any additional supporting information deemed essential for clarifying and/or strengthening the proposal should be included in an Appendix and referenced in the national need narrative. To the extent possible, applicants should present supporting information included in the Appendix in tabular form. Pagination for the Appendix should be continuous following the faculty vitae and so indicated in the table of contents.

I56Subpart D_Submission of a Proposal

I80ï¿½1A3402.16 
I89Intent to submit a proposal.
I11To assist HEP in preparing for review of fellowship proposals, institutions planning to submit proposals for fellowships may be requested to complete and return an Intent to Submit a Proposal form (Form CSRSï¿½09706). When required, applicants should complete and return one form for each proposal they anticipate submitting. Sending this form does not commit an institution to any course of action. The program announcement published in the T4Federal RegisterG1T1 will delineate if, when, and where the Intent to Submit a Proposal Forms should be sent.

I80ï¿½1A3402.17 
I89Where to submit a proposal.
I11The program announcement published in the T4Federal RegisterG1T1 will delineate the date for submission of proposals and the number of proposal copies required to apply for a grant. In addition, the program announcement will provide the address to which the proposal, its accompanying duplicate copies, and the institution's latest graduate catalog should be mailed.

I56Subpart E_Proposal Review and Evaluation

I80ï¿½1A3402.18 
I89Proposal review.
I11The proposal evaluation process includes both USDA internal staff review and merit evaluation by panels of scientists, educators, industrialists, and Government officials who are highly qualified to render expert advice in the targeted areas. The goal of the process of selection and structuring of evaluation panels is to provide optimum expertise and objective judgment in the evaluation of proposals specific to a particular area of national need.

I80ï¿½1A3402.19 
I89Evaluation criteria.
I11Proposals addressing a particular national need area at a particular degree level will be evaluated in competition with other proposals addressing the same national need area at the same degree level. Both USDA internal staff and the panelists will evaluate proposals primarily on the basis of the following criteria:
c2,L2,tp0,i1,s200,xs48 I95   h1Evaluation criterion  h1Weight 
j
I01a. The degree to which the proposal establishes clearly that the proposed program of graduate study will result in the development of outstanding scientific/professional expertise related to the national need area and will do so in a reasonable period of time D30 points.
I01b. The degree to which the proposal highlights thoroughly any special features such as an inter-disciplinary, multi-disciplinary, or cross-disciplinary approach, an unusual collateral specialization in a related discipline, experiential learning opportunities, unique mentoring programs, seminars, or a multi-university collaborative approach D10 points.
I01c. The degree to which the proposal substantiates clearly that the institution's faculty, facilities and equipment, instructional support resources, and other academic attributes are excellent for providing outstanding graduate study and research at the forefront of science and technology related to the chosen area of national need D20 points.
I01d. The degree to which the institution's plans and procedures for recruiting and selecting academically outstanding Fellows and for advising and guiding Fellows through a program of study reflect excellence as documented in the proposal D20 points.
ï¿½275ï¿½I01e. The degree to which supplementary summary data substantiate program quality in the targeted national need area D10 points.
I01f. The quality of the proposal as reflected by its substantive content, organization, clarity, and accuracy D10 points.
e


I11Additional or amended evaluation criteria and new point weightings may be cited in the program announcement published in the T4Federal RegisterG1T1.

I56Subpart F_Supplementary Information

I80ï¿½1A3402.20 
I89Terms and conditions of grant awards.
I11Within the limit of funds available for such purpose, the awarding official shall make project grants to those responsible, eligible applicants whose proposals are judged most meritorious in the announced program areas under the evaluation criteria and procedures set forth in this part. The beginning of the project period shall be no later than September 30 of the Federal fiscal year in which the project is approved for support. All funds granted under this part shall be expended solely for the purpose for which the funds are granted in accordance with the approved application and budget, the regulations of this part, the terms and conditions of the award, the applicable Federal cost principles, and the Department's Uniform Federal Assistance Regulations (7 CFR Part 3015).

I80ï¿½1A3402.21 
I89Grant awards.
I11(a) The grant award document shall include, at a minimum, the following:
I11(1) Legal name and address of performing organization.
I11(2) Title of project.
I11(3) Name(s) and address(es) of Project Director(s).
I11(4) Identifying grant number assigned by the Department.
I11(5) Project period, which specifies how long the Department intends to support the effort without requiring reapplication for funds.
I11(6) Total amount of Federal financial assistance approved during the project period.
I11(7) Legal authority under which the grant is awarded.
I11(8) Approved budget plan for categorizing allocable project funds to accomplish the stated purpose of the grant award.
I11(9) Other information or provisions deemed necessary by the Department to carry out its granting activities or to accomplish the purpose of this particular project grant.
I11(b) The notice of grant award, in the form of a letter, will provide pertinent instructions and information to the grantee that are not included in the grant award document described above.
I11(c) The major types of grant instruments shall be as follows:
I11(1) New grant. This is a grant instrument by which HEP agrees to support a specified number of graduate Fellows at a specific institution via funds for fixed graduate student stipends and fixed cost-of-education institutional allowances. This type of grant is approved on the basis of peer review recommendation.
I11(2) Supplemental grant. This is an instrument by which HEP agrees to provide additional funding under a new grant as specified in paragraph (c)(1) of this section to provide special international study or thesis/dissertation research travel allowances for graduate Fellows. This type of grant will not require additional peer review.

I80ï¿½1A3402.22
I89Other Federal statutes and regulations that apply.
I11Several other Federal regulations or statutes apply to project grants awarded under this part. These include but are not limited to: 

Q04
I217 CFR Part 1.1_USDA implementation of the Freedom of Information Act.
I217 CFR Part 3_USDA implementation of OMB Circular No. Aï¿½09129 regarding debt collection.
I217 CFR Part 15, Subpart A_USDA implementation of Title IV of the Civil Rights Act of 1964.
I217 CFR Part 3015_USDA Uniform Federal Assistance Regulations, as amended, implementing OMB directives (i.e., Circular Nos. ï¿½276ï¿½Aï¿½09110 and Aï¿½0921), as well as general policy requirements applicable to recipients of Departmental financial assistance.
I217 CFR Part 3017, as amended_USDA implementation of Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants), as amended.
I217 CFR Part 3018_USDA implementation of New Restrictions on Lobbying. Imposes new prohibitions and requirements for disclosure and certification related to lobbying on recipients of Federal contracts, grants, cooperative agreements, and loans.
I217 CFR Part 3051_USDA implementation of OMB Circular No. Aï¿½09133 regarding audits of institutions of higher education and other nonprofit institutions.
I217 CFR Part 3407_CSREES implementation of the National Environmental Policy Act.
I2129 U.S.C. 794, Section 504_Rehabilitation Act of 1973, and 7 CFR Part 15b (USDA implementation of statute), prohibiting discrimination based upon physical or mental handicap in Federally assisted programs.
I2135 U.S.C. 200 T3et seq.G1T1_Bayh-Dole Act, controlling allocation of rights to inventions made by employees of small business firms and domestic nonprofit organizations, including universities, in Federally assisted programs (implementing regulations are contained in 37 CFR Part 401).


I80ï¿½1A3402.23
I89Confidential aspects of proposals and awards.
I11When a proposal results in a grant, it becomes a part of the record of the Agency's transactions, available to the public upon specific request. Information that the Agency and the grantee mutually agree to be of a privileged nature will be held in confidence to the extent permitted by law. Therefore, any information that the applicant wishes to have considered as privileged should be clearly marked as such and sent in a separate statement, two copies of which should accompany the proposal. The original copy of a proposal that does not result in a grant will be retained by the Agency for a period of one year. Other copies will be destroyed. Such a proposal will be released only with the consent of the applicant or to the extent required by law. A proposal may be withdrawn at any time prior to the final action thereon.

I80ï¿½1A3402.24 
I89Access to peer review information.
I11After final decisions have been announced, HEP will, upon request, inform the project director of the reasons for its decision on a proposal. Verbatim copies of summary reviews, not including the identity of the reviewers, will be made available to respective project directors upon specific request.

I80ï¿½1A3402.25 
I89Documentation of progress on funded projects.
I11(a) A Fellowship Appointment Documentation form (Form CSRSï¿½09707) is included in the application package. Upon request by HEP, project directors awarded grants under the program will be required to complete and submit this form. Follow-up progress reports will focus on assessing continuing progress of Fellows through their graduate programs of study (including activities supported by any special international study or thesis/dissertation research allowance) and on institution adherence to program guidelines.
I11(b) A Graduate Fellow Exit Report (Form CSRSï¿½09709) is included in the application package. This form should be completed and submitted to HEP by the project director for each Fellow supported by a grant as soon as a Fellow either: graduates; is officially terminated from the fellowship or the academic program due to unsatisfactory academic progress; or voluntarily withdraws from the fellowship or the academic program. If a Fellow has not completed all degree requirements at the end of the five-year grant duration, HEP may request a preliminary exit report. In such a case, a final exit report will be required at a later date. When a final exit report for each Fellow supported by a grant has been accepted by USDA, the grantee institution will have satisfied the requirement of a final performance report for the grant. Additional follow-up reports to track the Fellows' career patterns may be requested.
I11(c) A Final Report must be completed and returned within 90 days after the expiration date of the project. The Final Report must be submitted to the program contact person and must contain proper data and information as specified in the ``Special Terms and Conditions'' of the award. Generally, the Final Report should include a summary of: recruitment strategies that were effective; successful mentoring ï¿½277ï¿½procedures or activities; enrichment activities the fellows were afforded; barriers faced in recruiting and graduating fellows; and the impact of the fellowship grant on the overall quality of the educational programs of the institution.

I80ï¿½1A3402.26 
I89Evaluation of program.
I11Grantees should be aware that HEP may, as a part of its own program evaluation activities, carry out in-depth evaluations of assisted activities through independent third parties. Thus, grantees should be prepared to cooperate with evaluators retained by HEP to analyze both the institutional context and the impact of any supported project.



I95Pt. 3403
I52PART 3403_SMALL BUSINESS INNOVATION RESEARCH GRANTS PROGRAM



I86Subpart A_General Information
S8006I18Sec.
S8010I263403.1Applicability of regulations.
I263403.2Definitions.
I263403.3Eligibility requirements.

I86Subpart B_Program Description
I263403.4Three-phase program.

I86Subpart C_Preparation and Submission of Proposals
I263403.5Requests for proposals
I263403.6General content of proposals.
I263403.7Proposal format for phase I applications.
I263403.8Proposal format for phase II applications.
I263403.9Submission of proposals.

I86Subpart D_Proposal Review and Evaluation
I263403.10Proposal review
I263403.11Availability of information.

I86Subpart E_Supplementary Information
I263403.12Terms and conditions of grant awards
I263403.13Notice of grant awards.
I263403.14Use of funds; changes.
I263403.15Other Federal statutes and regulations that apply.
I263403.16Other conditions.


Q04I21T5Authority:  T115 U.S.C. 638.

Q04I21T5Source: T162 FR 26168, May 12, 1997, unless otherwise noted.




I56Subpart A_General Information


I80ï¿½1A3403.1
I89Applicability of regulations.
I11(a) The regulations of this part apply to small business innovation research grants awarded under the general authority of section 630 of the Act making appropriations for Agriculture, Rural Development, and Related Agencies' programs for fiscal year ending September 30, 1987, and for other purposes, as made applicable by section 101(a) of Public Law 99ï¿½09591, 100 Stat. 3341, and the provisions of the Small Business Innovation Development Act of 1982, as amended (15 U.S.C. 638). The Small Business Innovation Development Act of 1982, as amended, mandates that each Federal agency with an annual extramural budget for research or research and development in excess of $100 million participate in a Small Business Innovation Research (SBIR) program by reserving a statutory percentage of its annual extramural budget for award to small business concerns for research or research and development in order to stimulate technological innovation, use small business to meet Federal research and development needs, increase private sector commercialization of innovations derived from Federal research and development, and foster and encourage the participation of socially and economically disadvantaged small business concerns and women-owned small business concerns in technological innovation. The U.S. Department of Agriculture (USDA) will participate in this program through the issuance of competitive research grants which will be administered by the Office of Competitive Research Grants and Awards Management, Cooperative State Research, Education, and Extension Service (CSREES).
I11(b) The regulations of this part do not apply to research grants awarded by the Department of Agriculture under any other authority.


I80ï¿½1A3403.2
I89Definitions.

I11As used in this part:
I11T3Ad hoc reviewersG1T1 means experts or consultants, qualified by training and ï¿½278ï¿½experience in particular scientific or technical fields to render expert advice on the scientific or technical merit of grant applications in those fields, who review on an individual basis one or several of the eligible proposals submitted to this program in their area of expertise and who submit to the Department written evaluations of such proposals.
I11T3Awarding officialG1T1 means any officer or employee of the Department who has the authority to issue or modify research project grant instruments on behalf of the Department.
I11T3Budget periodG1T1 means the interval of time into which the project period is divided for budgetary and reporting purposes.
I11T3CommercializationG1T1 means the process of developing markets and producing and delivering products or services for sale (whether by the originating party or by others); as used here, commercialization includes both government and commercial markets.
I11T3DepartmentG1T1 means the Department of Agriculture.
I11T3Funding agreementG1T1 is any contract, grant, or cooperative agreement entered into between any Federal agency and any small business concern for the performance of experimental, developmental, or research work funded in whole or in part by the Federal Government.
I11T3GranteeG1T1 means the small business concern designated in the grant award document as the responsible legal entity to whom a grant is awarded under this part.
I11T3Peer review groupG1T1 means experts or consultants, qualified by training and experience in particular scientific or technical fields to give expert advice on the scientific and technical merit of grant applications in those fields, who assemble as a group to discuss and evaluate all of the eligible proposals submitted to this program in their area of expertise.
I11T3Principal investigatorG1T1 means a single individual designated by the grantee in the grant application and approved by the Department who is responsible for the scientific or technical direction of the project. Therefore, the individual should have a scientific and technical background.
I11T3Program solicitationG1T1 is a formal request for proposals whereby an agency notifies the small business community of its research or research and development needs and interests in selected areas and invites proposals from small business concerns in response to those needs.
I11T3ProjectG1T1 means the particular activity within the scope of one of the research topic areas identified in the annual solicitation of applications, which is supported by a grant award under this part.
I11T3Project periodG1T1 means the total length of time that is approved by the Department for conducting the research project as outlined in an approved grant application.
I11T3Research or research and development (R&D)G1T1 means any activity which is:
I11(1) A systematic, intensive study directed toward greater knowledge or understanding of the subject studied;
I11(2) A systematic study directed specifically toward applying new knowledge to meet a recognized need; or
I11(3) A systematic application of knowledge toward the production of useful materials, devices, and systems or methods, including design, development, and improvement of prototypes and new processes to meet specific requirements.
I11T3Research project grantG1T1 means the award by the Department of funds to a grantee to assist in meeting the costs of conducting for the benefit of the public an identified project which is intended and designed to establish, discover, elucidate, or confirm information or the underlying mechanisms relating to a research topic area identified in the annual solicitation of applications.
I11T3Small business concernG1T1 means a concern which at the time of award of phase I and phase II funding agreements meets the following criteria:
I11(1) Is organized for profit, independently owned or operated, is not dominant in the field in which it is proposing, has its principal place of business located in the United States, has a number of employees not exceeding 500 (full-time, part-time, temporary, or other) in all affiliated concerns owned or controlled by a single parent concern, and meets the other regulatory ï¿½279ï¿½requirements outlined in 13 CFR Part 121. Business concerns, other than licensed investment companies, or State development companies qualifying under the Small Business Investment Act of 1958, 15 U.S.C. 661, T3et seq.G1T1, are affiliates of one another when directly or indirectly one concern controls or has the power to control the other or third parties (or party) control or have the power to control both. Control can be exercised through common ownership, common management, and contractual relationships. The term ``affiliates'' is defined in greater detail in 13 CFR 121.401(a) through (m). The term ``number of employees'' is defined in 13 CFR 121.407. Business concerns include, but are not limited to, any individual, partnership, corporation, joint venture, association, or cooperative.
I11(2) Is at least 51 percent owned, or in the case of a publicly owned business at least 51 percent of its voting stock is owned, by United States citizens or lawfully admitted permanent resident aliens.
I11T3Socially and economically disadvantaged individualG1T1 is a member of any of the following groups: Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian Americans, other groups designated from time to time by the Small Business Administration (SBA) to be socially disadvantaged, or any other individual found to be socially and economically disadvantaged by the SBA pursuant to section 8(a) of the Small Business Act, 15 U.S.C. 637(a).
I11T3Socially and economically disadvantaged small business concernG1T1 is one that is:
I11(1) At least 51 percent owned by
I11(i) An Indian tribe or a native Hawaiian organization, or
I11(ii) One or more socially and economically disadvantaged individuals; and
I11(2) Whose management and daily business operations are controlled by one or more socially and economically disadvantaged individuals.
I11T3SubcontractG1T1 is any agreement, other than one involving an employer-employee relationship, entered into by a Federal Government funding agreement awardee requesting supplies or services required solely for the performance of the funding agreement.
I11T3United StatesG1T1 means the fifty States, the territories and possessions of the United States, the Commonwealth of Puerto Rico, the Trust Territory of the Pacific Islands, and the District of Columbia.
I11T3Women-owned small business concernG1T1 means a small business concern that is at least 51 percent owned by a woman or women who also control and operate it. ``Control'' as used in this context means exercising the power to make policy decisions. ``Operate'' as used in this context means being actively involved in the day-to-day management of the concern.



I80ï¿½1A3403.3
I89Eligibility requirements.
I11(a) T3Eligibility of organization.G1T1 (1) Each organization submitting a proposal must qualify as a small business concern for research purposes, as defined in ï¿½1A3403.2. Joint ventures and limited partnerships are eligible to apply for and to receive research grants under this program, provided that the entity created qualifies as a small business concern in accordance with section 2(3) of the Small Business Act (15 U.S.C. 632) and as defined in ï¿½1A3403.2. For both phase I and phase II the research must be performed in the United States.
I11(2) A minimum of two-thirds of the research or analytical work, as determined by budget expenditures, must be performed by the proposing organization under phase I grants. For phase II awards, a minimum of one-half of the research or analytical effort must be conducted by the proposing organization. The space used by the SBIR awardee to conduct the research must be space over which it has exclusive control for the period of the grant.
I11(b) T3Eligibility of principal investigator.G1T1 (1) It is strongly suggested that the individual responsible for the scientific or technical direction of the project be designated as the principal investigator. In addition, the primary employment of the principal investigator must be with the proposing small business concern at the time of award and during the conduct of the proposed research. Primary employment means that more than one-half of the principal investigator's time is spent in the ï¿½280ï¿½employ of the small business concern. Primary employment with the small business applicant precludes full-time employment with another organization.
I11(2) If the proposed principal investigator is employed by another organization (e.g., university or another company) at the time of submission of the application, documentation must be submitted with the proposal from the principal investigator's current employer verifying that, in the event of an SBIR award, he/she will become a less-than half-time employee of such organization and will remain so for the duration of the SBIR project.
I56Subpart B_Program Description


I80ï¿½1A3403.4
I89Three-phase program.
I11The Small Business Innovation Research Grants Program will be carried out in three separate phases described in this section. The first two phases are designed to assist USDA in meeting its research and development objectives and will be supported with SBIR funds. The purpose of the third phase is to pursue the commercial applications or objectives of the research carried out in phases I and II through the use of private or Federal non-SBIR funds.

I11(a) Phase I is the initial stage in which the scientific and technical merit and feasibility of an idea related to one of the research areas described in the program solicitation is evaluated, normally for a period not to exceed 6 months. In special cases, however, where a proposed research project requires more than 6 months to complete, a longer grant period may be considered. A proposer of a phase I project with an anticipated duration beyond 6 months should specify the length and duration in the proposal at the time of its submission to USDA in order for it to be considered at the time of award. (See ï¿½1A3403.14(c) for changes in project period subsequent to award).
I11(b) Phase II is the principal research or research and development effort in which the results from Phase I are expanded upon and further pursued, normally for a period not to exceed 24 months. Only those small businesses previously receiving phase I awards are eligible to submit phase II proposals. For each phase I project funded the awardee may apply for a phase II award only once. Phase I awardees who for valid reasons cannot apply for phase II support in the next fiscal year funding cycle may apply for support not later than the second fiscal year funding cycle.
I11(c) Phase III is to stimulate technological innovation and the national return on investment from research through the pursuit of commercial objectives resulting from the work supported by SBIR funding carried out in phases I and II. This portion of the project is performed by the small business concern and privately funded or Federally funded by a non-SBIR source through the use of a follow-on funding commitment. A follow-on funding commitment is an agreement between the small business concern and a provider of follow-on capital for a specified amount of funds to be made available to the small business concern for further development of their effort upon achieving certain mutually agreed upon technical objectives during phase II.
I56Subpart C_Preparation and Submission of Proposals


I80ï¿½1A3403.5
I89Requests for proposals.
I11(a) T3Phase I.G1T1 A program solicitation requesting phase I proposals will be prepared each fiscal year in which funds are made available for this purpose. The solicitation will contain information sufficient to enable eligible applicants to prepare grant proposals and will include descriptions of specific research topic areas which the Department will support during the fiscal year involved, forms to be completed and submitted with proposals, and special requirements. A notice will be published in the T4Federal RegisterG1T1 informing the public of the availability of the program solicitation.
I11(b) T3Phase II.G1T1 For each fiscal year in which funds are made available for this purpose, the Department will send a letter requesting phase II proposals from the phase I grantees eligible to apply for phase II funding in that fiscal year. The letter will be accompanied by ï¿½281ï¿½the solicitation which contains information sufficient to enable eligible applicants to prepare grant proposals and includes forms to be submitted with proposals as well as special requirements.


I80ï¿½1A3403.6
I89General content of proposals.
I11(a) The proposed research must be responsive to one of the USDA program interests stated in the research topic descriptions of the program solicitation.
I11(b) Proposals must cover only scientific/technological research activities. A small business concern must not propose product development, technical assistance, demonstration projects, classified research, or patent applications. Many of the research projects supported by the SBIR program lead to the development of new products based upon the research results obtained during the project. However, projects that seek funding solely for product development where no research is involved, i.e. the funds are needed to permit the development of a project based on previously completed research, will not be accepted. Literature surveys should be conducted prior to preparing proposals for submission and must not be proposed as a part of the SBIR phase I or phase II effort. Proposals principally for the development of proven concepts toward commercialization or for market research should not be submitted since such efforts are considered the responsibility of the private sector and therefore are not supported by USDA.
I11(c) A proposal must be limited to only one topic. The same proposal may not be submitted under more than one topic. However, an organization may submit separate proposals on the same topic. Where similar research is discussed under more than one topic, the proposer should choose that topic whose description appears most relevant to the proposer's research concept. Duplicate proposals will be returned to the applicant without review.
I11(d) The limitation on the length of phase I and phase II proposals, text instructions, and the formatting instructions will be identified in the annual solicitation.


I80ï¿½1A3403.7
I89Proposal format for phase I applications.
I11(a) The following items relate to phase I applications. Further instructions or descriptions for these items as well as any additional items to be included will be provided in the annual solicitation, as necessary.
I11(1) T3Proposal cover sheet.G1T1 Photocopy and complete Form CSREESï¿½09667 in the program solicitation. The original of the proposal cover sheet must at a minimum contain the pen-and-ink signatures of the proposed principal investigator(s) and the authorized organizational official.
I11(2) T3Project summary.G1T1 Photocopy and complete Form CSREESï¿½09668 in the program solicitation. The technical abstract should include a brief description of the problem or opportunity, project objectives, and a description of the effort. Anticipated results and potential commercial applications of the proposed research also should be summarized in the space provided. Keywords, to be provided in the last block on the page, should characterize the most important aspects of the project. The project summary of successful proposals may be published by USDA and, therefore, should not contain proprietary information.
I11(3) T3Technical content.G1T1 The main body of the proposal should include:
I11(i) Identification and significance of the problem or opportunity.
I11(ii) Background and rationale.
I11(iii) Relationship with future research or research and development.
I11(iv) Phase I technical objectives.
I11(v) Phase I work plan.
I11(vi) Related research or research and development.
I11(4) T3Key personnel and bibliography.G1T1 Identify key personnel involved in the effort, including information on their directly related education and experience.
I11(5) T3Facilities and equipment.G1T1 Describe the types, location, and availability of instrumentation and physical facilities necessary to carry out the work proposed. Items of equipment to be purchased must be fully justified under this section.
I11(6) T3Consultants.G1T1 Involvement of university or other consultants in the planning and research stages of the ï¿½282ï¿½project is permitted and may be particularly helpful to small firms which have not previously received Federal research awards. If such involvement is intended, it should be described in detail.
I11(7) T3Potential post application.G1T1 Briefly describe:
I11(i) Whether and by what means the proposed research appears to have potential commercial application;
I11(ii) Whether and by what means the proposed research appears to have potential use by the Federal Government; and
I11(iii) Whether and by what means the proposed research will satisfy the public interest.
I11(8) T3Current and pending support.G1T1 If a proposal, substantially the same as the one being submitted, has been previously funded or is currently funded, pending, or about to be submitted to another Federal agency or to USDA in a separate action, the proposer must provide the following information:
I11(i) Name and address of the agency(s) to which a proposal was submitted, or will be submitted, or from which an award is expected or has been received.
I11(ii) Date of actual or anticipated proposal submission or date of award, as appropriate.
I11(iii) Title of proposal or award, identifying number assigned by the agency involved, and the date of program solicitation under which the proposal was submitted or the award was received.
I11(iv) Applicable research topic area for each proposal submitted or award received.
I11(v) Title of research project.
I11(vi) Name and title of principal investigator for each proposal submitted or award received. USDA will not make awards that duplicate research funded (or to be funded) by other Federal agencies.
I11(9) T3Cost breakdown on proposal budget.G1T1 Photocopy and complete the budget form in the program solicitation only for the phase under which you are currently applying. (An applicant for phase I funding should not submit both phase I and II budgets.)
I11(10) T3Research involving special considerations.G1T1 If the proposed research will involve recombinant DNA molecules, human subjects at risk, or laboratory animal care, the proposal must so indicate and include an assurance statement (Form CSREESï¿½09662) as the last page of the proposal. The original of the assurance statement must at a minimum contain the pen-and-ink signature of the authorized organizational official. In order to complete the assurance statement, the proposer may be required to have the research plan reviewed and approved by an appropriate ``Institutional Review Board'' (IRB) prior to commencing actual substantive work. If an IRB review is required, USDA will not release funds for an award until proper documentation of the IRB approval is submitted to and accepted by USDA. It is suggested that proposers contact local universities, colleges, or nonprofit research organizations which have established such reviewing mechanisms to have this service performed.
I11(11) T3Proprietary information.G1T1 (i) If a proposal contains proprietary information that constitutes a trade secret, proprietary commercial or financial information, confidential personal information, or data affecting the national security, it will be treated in confidence to the extent permitted by law, provided the information is clearly marked by the proposer with the term ``confidential proprietary information'' and provided the following legend appears in the designated area at the bottom of the proposal cover sheet (Form CSREESï¿½09667):

Q04


I21T3The following pages (specify) contain proprietary information which (name of proposing organization) requests not be released to persons outside the Government, except for purposes of evaluation.G1T1

Q04
I11(ii) USDA by law is required to make the final decision as to whether the information is required to be kept in confidence. Information contained in unsuccessful proposals will remain the property of the proposer. However, USDA will retain for one year one file copy of all proposals received; extra copies will be destroyed. Public release of information for any proposal submitted will be subject to existing statutory and regulatory requirements. Any proposal which is funded will be considered an integral part of the award and normally will be made available to the public upon request except ï¿½283ï¿½for designated proprietary information that is determined by USDA to be proprietary information.
I11(iii) The inclusion of proprietary information is discouraged unless it is necessary for the proper evaluation of the proposal. If proprietary information is to be included, it should be limited, set apart from other text on a separate page, and keyed to the text by numbers. It should be confined to a few critical technical items which, if disclosed, could jeopardize the obtaining of foreign or domestic patents. Trade secrets, salaries, or other information which could jeopardize commercial competitiveness should be similarly keyed and presented on a separate page. Proposals or reports which attempt to restrict dissemination of large amounts of information may be found unacceptable by USDA. Any other legend than that listed in paragraph (a)(11)(i) of this section may be unacceptable to USDA and may constitute grounds for return of the proposal without further consideration. Without assuming any liability for inadvertent disclosure, USDA will limit dissemination of such information to its employees and, where necessary for the evaluation of the proposal, to outside reviewers on a confidential basis.
I11(12) T3Rights in data developed under SBIR funding agreement.G1T1 The SBIR legislation provides for ``retention of rights in data generated in the performance of the contract by the small business concern.''
I11(i) The legislative history clarifies that the intent of the statute is to provide authority for the participating agency to protect technical data generated under the funding agreement, and to refrain from disclosing such data to competitors of the small business concern or from using the information to produce future technical procurement specifications that could harm the small business concern that discovered and developed the innovation until the small business concern has a reasonable chance to seek patent protection, if appropriate.
I11(ii) Therefore, except for program evaluation, participating agencies shall protect such technical data for a period of not less than T34 yearsG1T1 from the completion of the project from which the data were generated unless the agencies obtain permission to disclose such data from the contractor or grantee. The government shall retain a royalty-free license for government use of any technical data delivered under an SBIR funding agreement whether patented or not.
I11(13) T3Organizational management information.G1T1 Before the award of an SBIR funding agreement, USDA requires the submission of certain organizational management, personnel and financial information to assure the responsibility of the proposer. This information is not required unless a project is recommended for funding, and then it is submitted on a one-time basis only. However, new information should be submitted if a small business concern has undergone significant changes in organization, personnel, finance, or policies including those relating to civil rights.
I11(b) [Reserved]


I80ï¿½1A3403.8
I89Proposal format for phase II applications.
I11(a) The following items relate to phase II applications. Further instructions or descriptions for these items as well as any additional items to be included will be identified in the annual solicitation, as necessary.
I11(1) T3Proposal cover sheet.G1T1 Follow instructions found in ï¿½1A3403.7(a)(1).
I11(2) T3Project summary.G1T1 Follow instructions found in ï¿½1A3403.7(a)(2).
I11(3) T3Phase I results.G1T1 The proposal should contain an extensive section that lists the phase I objectives and makes detailed presentation of the phase I results. This section should establish the degree to which phase I objectives were met and feasibility of the proposed research project was established.
I11(4) T3Proposal.G1T1 Since phase II is the principal research and development effort, proposals should be more comprehensive than those submitted under phase I. However, the outline contained in ï¿½1A3403.7(a)(3) should be followed, tailoring the information requested to the phase II project.
I11(5) T3Cost breakdown on proposal budget.G1T1 For phase II, a detailed budget is required for each year of requested support. In addition, a summary budget is ï¿½284ï¿½required detailing the requested support for the overall project period.
I11(6) T3Organizational management information.G1T1 Each phase II awardee will be asked to submit an updated statement of financial condition (such as the latest audit report, financial statements or balance sheet).
I11(7) T3Follow-on funding commitment.G1T1 If the proposer has obtained a contingent commitment for phase III follow-on funding, it should be forwarded with the phase II application.
I11(8) T3Documentation of multiple phase II awards.G1T1 (i) An applicant that submits a proposal for a funding agreement for phase I and has received more than 15 phase II awards during the preceding 5 fiscal years, must document the extent to which it was able to secure phase III funding to develop concepts resulting from previous phase II awards. This documentation should include the name of the awarding agency, date of award, funding agreement number, topic or subtopic title, amount and date of phase II funding and commercialization status for each phase II award.
I11(ii) USDA shall collect and retain the information submitted under paragraph (a)(8)(i) of this section at least until the General Accounting Office submits the report required under section 106 of the Small Business Research and Development Enhancement Act of 1992.
I11(b) [Reserved]


I80ï¿½1A3403.9
I89Submission of proposals.
I11The program solicitation for phase I proposals and the letter requesting phase II proposals will provide the deadline date for submitting proposals, the number of copies to be submitted, and the address where proposals should be mailed or delivered.
I56Subpart D_Proposal Review and Evaluation


I80ï¿½1A3403.10
I89Proposal review.
I11(a) All research grant applications will be acknowledged.
I11(b) Phase I and phase II proposals will be judged competitively in a two-stage process, based primarily upon scientific or technical merit. First, each proposal will be screened by USDA scientists to ensure that it is responsive to stated requirements contained in the program solicitation. Proposals found to be responsive will be technically evaluated by peer scientists knowledgeable in the appropriate scientific field using the criteria identified in the annual solicitation, as appropriate. Proposals found to be nonresponsive will be returned to the proposing firm without review.
I11(c) Both internal and external peer reviewers may be used during the technical evaluation stage of this process. Selections will be made from among recognized specialists who are uniquely qualified by training and experience in their respective fields to render expert advice on the merit of proposals received. It is anticipated that such experts will include those located in universities, Government, and non-profit research organizations. If possible, USDA intends that peer review groups shall be balanced with minority and female representation and with an equitable age distribution.
I11(d) Technical reviewers will base their conclusions and recommendations on information contained in the phase I or phase II proposal. It cannot be assumed that reviewers are acquainted with any experiments referred to within a proposal, with key individuals, or with the firm itself. Therefore, the proposal should be self-contained and written with the care and thoroughness accorded papers for publication.
I11(e) Final decisions will be made by USDA based upon the ratings assigned by reviewers and consideration of other factors, including the potential commercial application, possible duplication of other research, any critical USDA requirements, and budget limitation. In addition, the follow-on funding commitment will be a consideration for phase II proposals. In the event that two or more phase II proposals are of approximately equal technical merit, the follow-on funding commitment for continued development in phase III will be an important consideration. The value of the commitment will depend upon the degree of commitment made by non-Federal investors, with the maximum value resulting ï¿½285ï¿½from a signed agreement with reasonable terms for an amount at least equal to the funding requested from USDA in phase II.


I80ï¿½1A3403.11
I89Availability of information.
I11Information regarding the peer review process will be made available to the extent permitted under the Freedom of Information Act (5 U.S.C. 552), the Privacy Act (5 U.S.C. 552a), the SBIR Policy Directive, and implementing Departmental and other Federal regulations. Implementing Departmental regulations are found at 7 CFR part 1.
I56Subpart E_Supplementary Information


I80ï¿½1A3403.12
I89Terms and conditions of grant awards.
I11Within the limit of funds available for such purpose, the awarding official shall make research project grants to those responsible, eligible applicants whose proposals are judged most meritorious in the announced program areas under the evaluation criteria and procedures set forth in the annual solicitation. The beginning of the project period shall be no later than September 30 of the Federal fiscal year in which the project is approved for support. All funds granted under this part shall be expended solely for the purpose for which the funds are granted in accordance with the approved application and budget, the regulations of this part, the terms and conditions of the award, the Federal Acquisition Regulation (48 CFR part 31), and the Department's Uniform Federal Assistance Regulations (7 CFR part 3015).


I80ï¿½1A3403.13
I89 Notice of grant awards.
I11(a) The grant award document shall include, at a minimum, the following:
I11(1) Legal name and address of performing organization.
I11(2) Title of project.
I11(3) Name(s) and address(es) of the Principal Investigator(s).
I11(4) Identifying grant number assigned by the Department.
I11(5) Project period, which specifies how long the Department intends to support the effort.
I11(6) Total amount of Federal financial assistance approved for the project period.
I11(7) Legal authorities under which the grant is awarded.
I11(8) Approved budget plan for categorizing project funds to accomplish the stated purpose of the grant award.
I11(9) Other information or provisions deemed necessary by the Department to carry out its granting activities or to accomplish the purpose of a particular research project grant.
I11(b) The notice of grant award, in the form of a letter, will provide pertinent instructions and information to the grantee which are not included in the grant award document described in paragraph (a) of this section.


I80ï¿½1A3403.14
I89Use of funds; changes.
I11(a) T3Delegation of fiscal responsibility.G1T1 The grantee may not in whole or in part delegate or transfer to another person, institution, or organization the responsibility for use or expenditure of grant funds.
I11(b) T3Change in project plans.G1T1 (1) The permissible changes by the grantee, principal investigator(s), or other key project personnel in the approved research project grant shall be limited to changes in methodology, techniques, or other aspects of the project to expedite achievement of the project's approved goals. If the grantee and/or the principal investigator(s) are uncertain as to whether a change complies with this paragraph, the question must be referred to the Authorized Departmental Officer (ADO) for a final determination.
I11(2) Changes in approved goals, or objectives, shall be requested by the grantee and approved in writing by the ADO prior to effecting such changes. In no event shall requests for such changes be approved which are outside the scope of the original approved project.
I11(3) Changes in approved project leadership or the replacement or reassignment of other key project personnel shall be requested by the grantee and approved in writing by the ADO prior to effecting such changes.
I11(4) Transfers of actual performance of the substantive programmatic work in ï¿½286ï¿½whole or in part and provisions for payment of funds, whether or not Federal funds are involved, shall be requested by the grantee and approved in writing by the ADO prior to effecting such transfers.
I11(c) T3Changes in project period.G1T1 The project period may be extended by the ADO to complete or fulfill the purposes of an approved project provided Federal funds remain. The extension shall be conditioned upon a prior request by the grantee and approval in writing by the ADO. In such cases the extension will not normally exceed 12 months, the phase I award will still be limited to the approved award amount, and the submission of a Phase II proposal will be delayed by one year. The extension allows the grantee to continue expending the remaining Federal funds for the intended purpose over the extension period. In instances where no Federal funds remain, it is unnecessary to approve an extension since the purpose of the extension is to continue using Federal funds. The grantee may opt to continue the Phase I project after the grant's termination and closeout, however, the grantee would have to do so without additional Federal funds. In the latter case, no communication with USDA is necessary. However, the maximum delay for submission of a Phase II proposal remains as specified in ï¿½1A3403.4(b).
I11(d) T3Changes in approved budget.G1T1 Changes in an approved budget shall be requested by the grantee and approved in writing by the ADO prior to instituting such changes if the revision will:
I11(1) Involve transfers of amounts budgeted for indirect costs to absorb an increase in direct costs;
I11(2) Involve transfers of amounts budgeted for direct costs to accommodate changes in indirect cost rates negotiated during a budget period and not approved when a grant was awarded;
I11(3) Result in a need or claim for the award of additional funds; or
I11(4) Involve transfers or expenditures of amounts requiring prior approval as set forth in the Departmental regulations or in the grant award.


I80ï¿½1A3403.15
I89Other Federal statutes and regulations that apply.
I11Several other Federal statutes and/or regulations apply to grant proposals considered for review or to research project grants awarded under this part. These include but are not limited to:

Q04


I217 CFR Part 1_USDA implementation of Freedom of Information Act.
I217 CFR Part 1c_USDA implementation of the Federal Policy for the Protection of Human Subjects;
I217 CFR Part 3_USDA implementation of OMB Circular Aï¿½09129, Managing Federal Credit Programs.
I217 CFR Part 15, Subpart A_USDA implementation of Title VI of the Civil Rights Act of 1964, as amended.
I217 CFR Part 3015_USDA Uniform Federal Assistance Regulations, implementing OMB directives where applicable (i.e., Circular Nos. Aï¿½09102, Aï¿½09110, Aï¿½0987, Aï¿½0921, and Aï¿½09122) and incorporating the Federal Grant and Cooperative Agreement Act of 1977, Pub. L. 95ï¿½09224), as well as general policy requirements applicable to recipients of Departmental financial assistance.
I217 CFR Part 3017, as amended_USDA implementation of Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-free Workplace (Grants), as amended.
I217 CFR Part 3018_USDA implementation of New Restrictions on Lobbying. Imposes new prohibitions and requirements for disclosure and certification related to lobbying on recipients of Federal contracts, grants, cooperative agreements, and loans.
I217 CFR Part 3407_CSREES procedures to implement the National Environmental Policy Act;
I219 CFR Parts 1, 2, 3, and 4_USDA implementation of the Act of August 24, 1966, Public Law 89ï¿½09544, as amended (commonly known as the Laboratory Animal Welfare Act).
I2148 CFR Part 31_Contract Cost Principles and Procedures of the Federal Acquisition Regulation.
I2129 U.S.C. 794, section 504_Rehabiliation Act of 1973, and 7 CFR Part 15B (USDA implementation of statute), prohibiting discrimination based upon physical or mental handicap in Federally assisted programs.
I2135 U.S.C. 200 T3et seq._G1T1Bayh-Dole Act, controlling allocation of rights to inventions made by employees of small business firms and domestic nonprofit organizations, including universities, in Federally assisted programs (implementing regulations are contained in 37 CFR Part 401). 


ï¿½287ï¿½I80ï¿½1A3403.16
I89Other conditions.
I11The Department may, with respect to any research project grant, impose additional conditions prior to or at the time of any award when, in the Department's judgment, such conditions are necessary to assure or protect advancement of the approved project, the interests of the public, or the conservation of grant funds.






I95Pt. 3404
I52PART 3404_PUBLIC INFORMATION

q02
S8006I18Sec.
S8010I263404.1General statement.
I263404.2Public inspection, copying, and indexing.
I263404.3Requests for records.
I263404.4Denials.
I263404.5Appeals.

Q04I21T5Authority:  T15 U.S.C. 301, 552; 7 CFR part 1, subpart A.
Q04I21T5Source:  T160 FR 66862, Dec. 27, 1995, unless otherwise noted.

I80ï¿½1A3404.1 
I89General statement.
I11This part is issued in accordance with the regulations of the Secretary of Agriculture in part 1, subpart A of this title, implementing the Freedom of Information Act (FOIA) (5 U.S.C. 552). The Secretary's regulations, as implemented by the regulations in this part, govern the availability of records of the Cooperative State Research, Education, and Extension Service to the public.

I80ï¿½1A3404.2 
I89Public inspection, copying, and indexing.
I115 U.S.C. 552(a)(2) requires that certain materials be made available for public inspection and copying and that a current index of these materials be published quarterly or otherwise be made available. Members of the public may request access to such materials maintained by CSREES at the following office: Information Staff, Agricultural Research Service, USDA, 6303 Ivy Lane, Room 456, Greenbelt, MD 20770; Telephone (301) 344ï¿½092207. Office hours are 8:00 a.m. to 4:30 p.m.

I80ï¿½1A3404.3 
I89Requests for records.
I11Requests for records of CSREES under 5 U.S.C. 552(a)(3) shall be made in accordance with ï¿½1A1.6 of this title and submitted to the FOIA Coordinator at the following address: Information Staff, Agricultural Research Service, USDA, 6303 Ivy Lane, Room 456, Greenbelt, MD 20770; Telephone (301) 344ï¿½092207; Facsimile (301) 344ï¿½092325; TDD (301) 344ï¿½092435. The FOIA Coordinator is delegated authority to make determinations regarding such requests in accordance with ï¿½1A1.3(a)(3) of this title.

I80ï¿½1A3404.4 
I89Denials.
I11If the FOIA Coordinator determines that a requested record is exempt from mandatory disclosure and that discretionary release would be improper, the FOIA Coordinator shall give written notice of denial in accordance with ï¿½1A1.8(a) of this title.

I80ï¿½1A3404.5 
I89Appeals.
I11Any person whose request is denied shall have the right to appeal such denial. Appeals shall be made in accordance with ï¿½1A1.6(e) of this title and should be addressed as follows: Administrator, Cooperative State Research, Education, and Extension Service, U.S. Department of Agriculture, Washington, DC 20250.

S8010





I95Pt. 3405
I52PART 3405_HIGHER EDUCATION CHALLENGE GRANTS PROGRAM  
I86Subpart A_General Information  
S8006I18Sec.  
S8010I263405.1Applicability of regulations.  
I263405.2Definitions.  
I263405.3Institutional eligibility.

I86Subpart B_Program Description

I263405.4Purpose of the program.  
I263405.5Matching funds.  
I263405.6Scope of program.  
I263405.7Joint project proposals.  
I263405.8Complementary project proposals.  
I263405.9Use of funds for facilities.

I86Subpart C_Preparation of a Proposal

I263405.10Program application materials.  
I263405.11Content of a proposal.

I86Subpart D_Submission of a Proposal 

I263405.12Intent to submit a proposal.  
I263405.13When and where to submit a proposal.

ï¿½288ï¿½I86Subpart E_Proposal Review and Evaluation 

I263405.14Proposal review.  
I263405.15Evaluation criteria.
I86Subpart F_Supplementary Information 

I263405.16Access to peer review information.  
I263405.17Grant awards.  
I263405.18Use of funds; changes.  
I263405.19Monitoring progress of funded projects.  
I263405.20Other Federal statutes and regulations that apply.  
I263405.21Confidential aspects of proposals and awards.  
I263405.22Evaluation of program.



Q04I21T5Authority:  T1Sec. 1470, National Agricultural Research, Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C. 3316).   

Q04I21T5Source: T162 FR 39317, July 22, 1997, unless otherwise noted.





I56Subpart A_General Information  


I80ï¿½1A3405.1 
I89Applicability of regulations.  
I11(a) The regulations of this part only apply to competitive Higher Education Challenge Grants awarded under the provisions of section 1417(b)(1) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977, as amended (NARETPA)(7 U.S.C. 3152(b)(1)), to strengthen institutional capacities, including curriculum, faculty, scientific instrumentation, instruction delivery systems, and student recruitment and retention. Section 1405 of NARETPA (7 U.S.C. 3121) designates the U.S. Department of Agriculture (USDA) as the lead Federal agency for agricultural research, extension, and teaching in the food and agricultural sciences. Section 1417 of NARETPA (7 U.S.C. 3152) authorizes the Secretary of Agriculture, who has delegated the authority to the Administrator of the Cooperative State Research, Education, and Extension Service (CSREES), to make competitive grants to land-grant colleges and universities, to colleges and universities having significant minority enrollments and a demonstrable capacity to carry out the teaching of food and agricultural sciences, and to other colleges and universities having a demonstrable capacity to carry out the teaching of food and agricultural sciences, for a period not to exceed 5 years, to administer and conduct programs to respond to identified State, regional, national, or international educational needs in the food and agricultural sciences.  
I11(b) To the extent that funds are available, each year CSREES will publish a T4Federal RegisterG1T1 notice announcing the program and soliciting grant applications.  
I11(c)(1) Based on the amount of funds appropriated in any fiscal year, CSREES will determine and cite in the program announcement:  
I11(i) The targeted need area(s) to be supported or, if the entire scope of a particular targeted need area is not to be supported, the specific special interest(s) within that targeted need area to be supported;  
I11(ii) The degree level(s) to be supported;  
I11(iii) The maximum project period a proposal may request;  
I11(iv) The maximum amount of funds that may be requested by an institution under a regular, complementary, or joint project proposal; and  
I11(v) The maximum total funds that may be awarded to an institution under the program in a given fiscal year, including how funds awarded for complementary and for joint project proposals will be counted toward the institutional maximum.  
I11(2) The program announcement will also specify the deadline date for proposal submission, the number of copies of each proposal that must be submitted, the address to which a proposal must be submitted, and whether or not Form CSREESï¿½09711, ``Intent to Submit a Proposal,'' is requested.  
I11(d)(1) If it is deemed by CSREES that, for a given fiscal year, additional determinations are necessary, each, as relevant, will be stated in the program announcement. Such determinations may include:  
I11(i) Limits on the subject matter/emphasis areas to be supported;  
I11(ii) The maximum number of proposals that may be submitted on behalf of the same school, college, or equivalent administrative unit within an institution;  
I11(iii) The maximum total number of proposals that may be submitted by an institution;  
ï¿½289ï¿½I11(iv) The minimum project period a proposal may request;  
I11(v) The minimum amount of funds that may be requested by an institution under a regular, complementary, or joint project proposal;  
I11(vi) The proportion of the appropriation reserved for, or available to, regular, complementary, and joint project proposals;  
I11(vii) The proportion of the appropriation reserved for, or available to, projects in each announced targeted need area; 
I11(viii) The proportion of the appropriation reserved for, or available to, each subject matter/emphasis area;  
I11(ix) The maximum number of grants that may be awarded to an institution under the program in a given fiscal year; and  
I11(x) Limits on the use of grant funds for travel or to purchase equipment, if any.  

I11(2) The program announcement also will contain any other limitations deemed necessary by CSREES for proper conduct of the program in the applicable year.  
I11(e) The regulations of this part do not apply to grants awarded by the Department of Agriculture under any other authority.  


I80ï¿½1A3405.2 
I89Definitions.  
I11As used in this part:  
I11(a) T3Authorized departmental officerG1T1 means the Secretary or any employee of the Department who has the authority to issue or modify grant instruments on behalf of the Secretary.  
I11(b) T3Authorized organizational representativeG1T1 means the president of the institution or the official, designated by the president of the institution, who has the authority to commit the resources of the institution.  
I11(c) T3Budget periodG1T1 means the interval of time (usually 12 months) into which the project period is divided for budgetary and reporting purposes.  
I11(d) T3Cash contributionsG1T1 means the applicant's cash outlay, including the outlay of money contributed to the applicant by non-Federal third parties.  
I11(e) T3Citizen or national of the United States means:G1T1 
I11(1) A citizen or native resident of a State; or,
I11(2) A person defined in the Immigration and Nationality Act, 8 U.S.C. 1101(a)(22), who, though not a citizen of the United States, owes permanent allegiance to the United States.  
I11(f) T3CollegeG1T1 or T3UniversityG1T1 means an educational institution in any State which:  
I11(1) Admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate;  
I11(2) Is legally authorized within such State to provide a program of education beyond secondary education;  
I11(3) Provides an educational program for which a baccalaureate degree or any other higher degree is awarded;  
I11(4) Is a public or other nonprofit institution; and  
I11(5) Is accredited by a nationally recognized accrediting agency or association.  
I11(g) T3Complementary project proposalG1T1 means a proposal for a project which involves coordination with one or more other projects for which funding was awarded under this program in a previous fiscal year, or for which funding is requested under this program in the current fiscal year.  
I11(h) T3DepartmentG1T1 or T3USDAG1T1 means the United States Department of Agriculture.  
I11(i) T3Eligible institutionG1T1 means a land-grant or other U.S. college or university offering a baccalaureate or first professional degree in at least one discipline or area of the food and agricultural sciences. The definition includes a research foundation maintained by an eligible college or university.  
I11(j) T3Eligible participantG1T1 means, for purposes of ï¿½1A3405.6(b), Faculty Preparation and Enhancement for Teaching, and ï¿½1A3405.6(f), Student Recruitment and Retention, an individual who: Is a citizen or national of the United States, as defined in ï¿½1A3405.2(e); or is a citizen of the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau. Where eligibility is claimed under ï¿½1A3405.2(e)(2), documentary evidence from the Immigration and Naturalization Service as to such eligibility must be made available to CSREES upon request.  
ï¿½290ï¿½I11(k) T3Food and agricultural sciencesG1T1 means basic, applied, and developmental research, extension, and teaching activities in the food, agricultural, renewable natural resources, forestry, and physical and social sciences, in the broadest sense of these terms, including but not limited to, activities concerned with the production, processing, marketing, distribution, conservation, consumption, research, and development of food and agriculturally related products and services, and inclusive of programs in agriculture, natural resources, aquaculture, forestry, veterinary medicine, home economics, rural development, and closely allied disciplines.  

I11(l) T3GranteeG1T1 means the eligible institution designated in the grant award document as the responsible legal entity to which a grant is awarded.  
I11(m) T3Joint project proposalG1T1 means a proposal for a project, which will involve the applicant institution and two or more other colleges, universities, community colleges, junior colleges, or other institutions, each of which will assume a major role in the conduct of the proposed project, and for which the applicant institution will transfer at least one-half of the awarded funds to the other institutions participating in the project. Only the applicant institution must meet the definition of ``eligible institution'' as specified in ï¿½1A3405.2(i); the other institutions participating in a joint project proposal are not required to meet the definition of ``eligible institution'' as specified in ï¿½1A3405.2(i), nor required to meet the definition of ``college'' or ``university'' as specified in ï¿½1A3405.2(f).  
I11(n) T3Land-grant colleges and universitiesG1T1 means those institutions eligible to receive funds under the Act of July 2, 1862 (12 Stat. 503ï¿½09505, as amended; 7 U.S.C. 301ï¿½09305, 307 and 308), or the Act of August 30, 1890 (26 Stat. 417ï¿½09419, as amended; 7 U.S.C. 321ï¿½09326 and 328), including Tuskegee University.  
I11(o) T3MatchingG1T1 or T3Cost-sharingG1T1 means that portion of project costs not borne by the Federal Government, including the value of in-kind contributions.  
I11(p) T3Peer review panelG1T1 means a group of experts or consultants, qualified by training and experience in particular fields of science, education, or technology to give expert advice on the merit of grant applications in such fields, who evaluate eligible proposals submitted to this program in their personal area(s) of expertise.  
I11(q) T3Prior approvalG1T1 means written approval evidencing prior consent by an authorized departmental officer as defined in ï¿½1A3405.2(a) of this part.  
I11(r) T3ProjectG1T1 means the particular activity within the scope of one or more of the targeted areas supported by a grant awarded under this program.  
I11(s) T3Project directorG1T1 means the single individual designated by the grantee in the grant application and approved by the Secretary who is responsible for the direction and management of the project.  
I11(t) T3Project periodG1T1 means the period, as stated in the award document and modifications thereto, if any, during which Federal sponsorship begins and ends.  
I11(u) T3SecretaryG1T1 means the Secretary of Agriculture and any other officer or employee of the Department of Agriculture to whom the authority involved may be delegated.  
I11(v) T3StateG1T1 means any one of the fifty States, the Commonwealth of Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Marianas, the Virgin Islands of the United States, and the District of Columbia.  
I11(w) T3TeachingG1T1 means formal classroom instruction, laboratory instruction, and practicum experience in the food and agricultural sciences and matters related thereto (such as faculty development, student recruitment and services, curriculum development, instructional materials and equipment, and innovative teaching methodologies) conducted by colleges and universities offering baccalaureate or higher degrees.  
I11(x) T3Third party in-kind contributionsG1T1 means non-cash contributions of property or services provided by non-Federal third parties, including real property, equipment, supplies and other expendable property, directly benefiting and specifically identifiable to a funded project or program.  
I11(y) T3United StatesG1T1 means the several States, the territories and possessions ï¿½291ï¿½of the United States, the Commonwealth of Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Marianas, the Virgin Islands of the United States, and the District of Columbia.  


I80ï¿½1A3405.3 
I89Institutional eligibility.  

I11Proposals may be submitted by land-grant and other U.S. colleges and universities offering a baccalaureate or first professional degree in at least one discipline or area of the food and agricultural sciences. Each applicant must have a demonstrable capacity for, and a significant ongoing commitment to, the teaching of food and agricultural sciences generally and to the specific need and/or subject area(s) for which a grant is requested. Awards may be made only to eligible institutions as defined in ï¿½1A3405.2(i).  

I56Subpart B_Program Description  


I80ï¿½1A3405.4
I89Purpose of the program.  
I11The Department of Agriculture is designated as the lead Federal agency for higher education in the food and agricultural sciences. In this context, CSREES has specific responsibility to initiate and support projects to strengthen college and university teaching programs in the food and agricultural sciences. One national initiative for carrying out this responsibility is the competitive Higher Education Challenge Grants Program. A primary goal of the program is to attract and ensure a continual flow of outstanding students into food and agricultural sciences higher education programs and to provide them with an education of the highest quality available anywhere in the world and which reflects the unique needs of the Nation. It is designed to stimulate and enable colleges and universities to provide the quality of education necessary to produce baccalaureate or higher degree level graduates capable of strengthening the Nation's food and agricultural scientific and professional work force. It is intended that projects supported by the program will:  
I11(a) Address a State, regional, national, or international educational need;  
I11(b) Involve a creative or nontraditional approach toward addressing that need which can serve as a model to others;  
I11(c) Encourage and facilitate better working relationships in the university science and education community, as well as between universities and the private sector, to enhance program quality and supplement available resources; and  
I11(d) Result in benefits which will likely transcend the project duration and USDA support.  


I80ï¿½1A3405.5
I89Matching funds.  
I11Each application must provide for matching support from a non-Federal source. CSREES will cite in the program announcement the required percentage of institutional cost sharing.  


I80ï¿½1A3405.6
I89Scope of program.  
I11This program supports projects related to strengthening undergraduate or graduate teaching programs as specified in the annual program announcement. Only proposals addressing one or more of the specific targeted need areas(s) identified in the program announcement will be funded. Proposals may focus on any subject matter area(s) in the food and agricultural sciences unless limited by determinations as specified in the annual program announcement. A proposal may address a single targeted need area or multiple targeted need areas, and may be focused on a single subject matter area or multiple subject matter areas, in any combination (e.g., curriculum development in horticulture; curriculum development, faculty enhancement, and student experiential learning in animal science; faculty enhancement in food science and agribusiness management; or instruction delivery systems and student experiential learning in plant science, horticulture, and entomology). Targeted need areas will consist of one or more of the following:  
I11(a) T3Curricula design and materials development.G1T1 (1) The purpose of this initiative is to promote new and improved curricula and materials to increase the quality of, and continuously renew, the Nation's academic programs in the food and agricultural sciences. The ï¿½292ï¿½overall objective is to stimulate the development and facilitate the use of exemplary education models and materials that incorporate the most recent advances in subject matter, research on teaching and learning theory, and instructional technology. Proposals may emphasize: the development of courses of study, degree programs, and instructional materials; the use of new approaches to the study of traditional subjects; or the introduction of new subjects, or new applications of knowledge, pertaining to the food and agricultural sciences.  

I11(2) Examples include, but are not limited to, curricula and materials that promote:  
I11(i) Raising the level of scholastic achievement of the Nation's graduates in the food and agricultural sciences.  
I11(ii) Addressing the special needs of particular groups of students, such as minorities, gifted and talented, or those with educational backgrounds that warrant enrichment.  
I11(iii) Using alternative instructional strategies or methodologies, including computer-assisted instruction or simulation modeling, media programs that reach large audiences efficiently and effectively, activities that provide hands-on learning experiences, and educational programs that extend learning beyond the classroom.  
I11(iv) Using sound pedagogy, particularly with regard to recent research on how to motivate students to learn, retain, apply, and transfer knowledge, skills, and competencies.  
I11(v) Building student competencies to integrate and synthesize knowledge from several disciplines.  
I11(b) T3Faculty preparation and enhancement for teaching.G1T1 (1) The purpose of this initiative is to advance faculty development in the areas of teaching competency, subject matter expertise, or student recruitment and advising skills. Teachers are central to education. They serve as models, motivators, and mentors_the catalysts of the learning process. Moreover, teachers are agents for developing, replicating, and exchanging effective teaching materials and methods. For these reasons, education can be strengthened only when teachers are adequately prepared, highly motivated, and appropriately recognized and rewarded.  
I11(2) Each faculty recipient of support for developmental activities under ï¿½1A3405.6(b) must be an ``eligible participant'' as defined in ï¿½1A3405.2(j) of this part.  
I11(3) Examples of developmental activities include, but are not limited to, those which enable teaching faculty to:  
I11(i) Gain experience with recent developments or innovative technology relevant to their teaching responsibilities.  
I11(ii) Work under the guidance and direction of experts who have substantial expertise in an area related to the developmental goals of the project.  
I11(iii) Work with scientists or professionals in government, industry, or other colleges or universities to learn new applications in a field.  
I11(iv) Obtain personal experience working with new ideas and techniques.  
I11(v) Expand competence with new methods of information delivery, such as computer-assisted or televised instruction.  
I11(vi) Increase understanding of the special needs of non-traditional students or students from groups that are underrepresented in the food and agricultural sciences workforce.  
I11(c) T3Instruction delivery systems.G1T1 (1) The purpose of this initiative is to encourage the use of alternative methods of delivering instruction to enhance the quality, effectiveness, and cost efficiency of teaching programs. The importance of this initiative is evidenced by advances in educational research which have substantiated the theory that differences in the learning styles of students often require alternative instructional methodologies. Also, the rising costs of higher education strongly suggest that colleges and universities undertake more efforts of a collaborative nature in order to deliver instruction which maximizes program quality and reduces unnecessary duplication. At the same time, advancements in knowledge and technology continue to introduce new subject matter areas which warrant consideration and implementation of innovative instruction techniques, methodologies, and delivery systems.  

ï¿½293ï¿½I11(2) Examples include, but are not limited to:
I11(i) Use of computers.
I11(ii) Teleconferencing.
I11(iii) Networking via satellite communications.
I11(iv) Regionalization of academic programs.
I11(v) Mobile classrooms and laboratories.
I11(vi) Individualized learning centers.
I11(vii) Symposia, forums, regional or national workshops, etc.
I11(d) T3Scientific instrumentation for teaching.G1T1 (1) The purpose of this initiative is to provide students in science-oriented courses the necessary experience with suitable, up-to-date equipment in order to involve them in work central to scientific understanding and progress. This program initiative will support the acquisition of instructional laboratory and classroom equipment to assure the achievement and maintenance of outstanding food and agricultural sciences higher education programs. A proposal may request support for acquiring new, state-of-the-art instructional scientific equipment, upgrading existing equipment, or replacing non-functional or clearly obsolete equipment.
I11(2) Examples include, but are not limited to:
I11(i) Rental or purchase of modern instruments to improve student learning experiences in courses, laboratories, and field work.
I11(ii) Development of new ways of using instrumentation to extend instructional capabilities.
I11(iii) Establishment of equipment-sharing capability via consortia or centers that develop innovative opportunities, such as mobile laboratories or satellite access to industry or government laboratories.
I11(e) T3Student experiential learning.G1T1 (1) The purpose of this initiative is to further the development of student scientific and professional competencies through experiential learning programs which provide students with opportunities to solve complex problems in the context of real-world situations. Effective experiential learning is essential in preparing future graduates to advance knowledge and technology, enhance quality of life, conserve resources, and revitalize the Nation's economic competitiveness. Such experiential learning opportunities are most effective when they serve to advance decision-making and communication skills as well as technological expertise.
I11(2) Examples include, but are not limited to, projects which:
I11(i) Provide opportunities for students to participate in research projects, either as a part of an ongoing research project or in a project designed especially for this program.
I11(ii) Provide opportunities for students to complete apprenticeships, internships, or similar participatory learning experiences.
I11(iii) Expand and enrich courses which are of a practicum nature.
I11(iv) Provide career mentoring experiences that link students with outstanding professionals.
I11(f) T3Student recruitment and retention.G1T1 (1) The purpose of this initiative is to strengthen student recruitment and retention programs in order to promote the future strength of the Nation's scientific and professional work force. The Nation's economic competitiveness and quality of life rest upon the availability of a cadre of outstanding research scientists, university faculty, and other professionals in the food and agricultural sciences. A substantial need exists to supplement efforts to attract increased numbers of academically outstanding students to prepare for careers as food and agricultural scientists and professionals. It is particularly important to augment the racial, ethnic, and gender diversity of the student body in order to promote a robust exchange of ideas and a more effective use of the full breadth of the Nation's intellectual resources.

I11(2) Each student recipient of monetary support for education costs or developmental purposes under ï¿½1A3405.6(f) must be enrolled at an eligible institution and meet the requirement of an ``eligible participant'' as defined in ï¿½1A3405.2(j) of this part.
I11(3) Examples include, but are not limited to:
I11(i) Special outreach programs for elementary and secondary students as well as parents, counselors, and the general public to broaden awareness of ï¿½294ï¿½the extensive nature and diversity of career opportunities for graduates in the food and agricultural sciences.
I11(ii) Special activities and materials to establish more effective linkages with high school science classes.
I11(iii) Unique or innovative student recruitment activities, materials, and personnel.
I11(iv) Special retention programs to assure student progression through and completion of an educational program.
I11(v) Development and dissemination of stimulating career information materials.
I11(vi) Use of regional or national media to promote food and agricultural sciences higher education.
I11(vii) Providing financial incentives to enable and encourage students to pursue and complete an undergraduate or graduate degree in an area of the food and agricultural sciences. 
I11(viii) Special recruitment programs to increase the participation of students from non-traditional or underrepresented groups in courses of study in the food and agricultural sciences.


I80ï¿½1A3405.7 
I89Joint project proposals.
I11Applicants are encouraged to submit joint project proposals as defined in ï¿½1A3405.2(m), which address regional or national problems and which will result overall in strengthening higher education in the food and agricultural sciences. The goals of such joint initiatives should include maximizing the use of limited resources by generating a critical mass of expertise and activity focused on a targeted need area(s), increasing cost-effectiveness through achieving economies of scale, strengthening the scope and quality of a project's impact, and promoting coalition building likely to transcend the project's lifetime and lead to future ventures.


I80ï¿½1A3405.8 
I89Complementary project proposals.
I11Institutions may submit proposals that are complementary in nature as defined in ï¿½1A3405.2(g). Such complementary project proposals may be submitted by the same or by different eligible institutions.


I80ï¿½1A3405.9 
I89Use of funds for facilities.
I11Under the Higher Education Challenge Grants Program, the use of grant funds to plan, acquire, or construct a building or facility is not allowed. With prior approval, in accordance with the cost principles set forth in OMB Circular No. Aï¿½0921, some grant funds may be used for minor alterations, renovations, or repairs deemed necessary to retrofit existing teaching spaces in order to carry out a funded project. However, requests to use grant funds for such purposes must demonstrate that the alterations, renovations, or repairs are incidental to the major purpose for which a grant is made.
I56Subpart C_Preparation of a Proposal


I80ï¿½1A3405.10 
I89Program application materials.
I11Program application materials in an application package will be made available to eligible institutions upon request. These materials include the program announcement, the administrative provisions for the program, and the forms needed to prepare and submit grant applications under the program.


I80ï¿½1A3405.11 
I89Content of a proposal.
I11(a) T3Proposal cover page.G1T1 (1) Form CSREESï¿½09712, ``Higher Education Proposal Cover Page,'' must be completed in its entirety. Note that providing a Social Security Number is voluntary, but is an integral part of the CSREES information system and will assist in the processing of the proposal.

I11(2) One copy of the Form CSREESï¿½09712 must contain the pen-and-ink signatures of the Project Director(s) and authorized organizational representative for the applicant institution.  
I11(3) The title of the project shown on the ``Higher Education Proposal Cover Page'' must be brief (80-character maximum) yet represent the major thrust of the project. This information will be used by the Department to provide information to the Congress and other interested parties.  
I11(4) In block 7. of Form CSREESï¿½09712, enter ``Higher Education Challenge Grants Program.''  
ï¿½295ï¿½I11(5) In block 8.a. of Form CSREESï¿½09712, enter ``Teaching.'' In block 8.b. identify the code for the targeted need area(s) as found on the reverse of the form. If a proposal focuses on multiple targeted need areas, enter each code associated with the project and place an asterisk (*) immediately following the code for the primary targeted need area. In block 8.c. identify the major area(s) of emphasis as found on the reverse of the form. If a proposal focuses on multiple areas of emphasis, enter each code associated with the project. This information will be used by program staff for the proper assignment of proposals to peer reviewers.  
I11(6) In block 9. of Form CSREESï¿½09712, indicate if the proposal is a complementary project proposal or a joint project proposal as defined in ï¿½1A3405.2(g) and ï¿½1A3405.2(m), respectively, of this part. If it is not a complementary project proposal or a joint project proposal, identify it as a regular project proposal.  
I11(7) In block 13. of Form CSREESï¿½09712, indicate if the proposal is a new, first-time submission or if the proposal is a resubmission of a proposal that has been submitted to, but not funded under, the Higher Education Challenge Grants Program in a previous competition.  
I11(b)T3 Table of contents.G1T1 For ease in locating information, each proposal must contain a detailed table of contents just after the Proposal Cover Page. The Table of Contents should include page numbers for each component of the proposal. Pagination should begin immediately following the Table of Contents.  
I11(c)T3 Project summary.G1T1 (1) A Project Summary should immediately follow the Table of Contents. The information provided in the Project Summary may be used by the program staff for a variety of purposes, including the proper assignment of proposals to peer reviewers and providing information to peer reviewers prior to the peer panel meeting. The name of the institution, the targeted need area(s), and the title of the proposal must be identified exactly as shown on the ``Higher Education Proposal Cover Page.''  
I11(2) If the proposal is a complementary project proposal, as defined in ï¿½1A3405.2(g) of this part, indicate such and identify the other complementary project(s) by citing the name of the submitting institution, the title of the project, the project director, and the grant number (if funded in a previous year) exactly as shown on the cover page of the complementary project so that appropriate consideration can be given to the interrelatedness of the proposals in the evaluation process.  
I11(3) If the proposal is a joint project proposal, as defined in ï¿½1A3405.2(m) of this part, indicate such and identify the other participating institutions and the key faculty member or other individual responsible for coordinating the project at each institution.  
I11(4) The Project Summary should be a concise description of the proposed activity suitable for publication by the Department to inform the general public about awards under the program. The text must not exceed one page, single-spaced. The Project Summary should be a self-contained description of the activity which would result if the proposal is funded by USDA. It should include: The objectives of the project; a synopsis of the plan of operation; a description of how the project will strengthen higher education in the food and agricultural sciences in the United States; and the plans for disseminating project results. The Project Summary should be written so that a technically literate reader can evaluate the use of Federal funds in support of the project.  

I11(d) T3Resubmission of a proposalG1T1_(1)T3 Resubmission of previously unfunded proposals.G1T1 If a proposal has been submitted previously, but was not funded, such should be indicated in block 13. on Form CSREESï¿½09712, ``Higher Education Proposal Cover Page,'' and the following information should be included in the proposal: The fiscal year(s) in which the proposal was submitted previously; a summary of the peer reviewers' comments; and how these comments have been addressed in the current proposal, including the page numbers in the current proposal where the peer reviewers' comments have been addressed. This information may be provided as a section of the proposal following the Project Summary and preceding the proposal narrative or it ï¿½296ï¿½may be placed in the Appendix (see ï¿½1A3405.11(i)). In either case, the location of this information should be indicated in the Table of Contents. Further, when possible, the information should be presented in tabular format. Applicants who choose to resubmit proposals that were previously submitted, but not funded, should note that resubmitted proposals must compete equally with newly submitted proposals. Submitting a proposal that has been revised based on a previous peer review panel's critique of the proposal does not guarantee the success of the resubmitted proposal.  
I11(2) T3Resubmission of previously funded proposals.G1T1 The Higher Education Challenge Grants Program is not designed to support activities that essentially are repetitive in nature over multiple grant awards. Project directors who have had their projects funded previously are discouraged from resubmitting relatively identical proposals for further funding. Proposals that are sequential continuations or new stages of previously funded Challenge Grants Program projects must compete with first-time proposals. Therefore, project directors should thoroughly demonstrate how the project proposed in the current application expands substantially upon a previously funded project (i.e., demonstrate how the new project will advance the former project to the next level of attainment or will achieve expanded goals). The proposal must also show the degree to which the new phase promotes innovativeness and creativity beyond the scope of the previously funded project.  
I11(e)T3 Narrative of a proposal.G1T1 The narrative portion of the proposal is limited to 20 pages in length. The one-page Project Summary is not included in the 20-page limitation. The narrative must be typed on one side of the page only, using a font no smaller than 12 point, and double-spaced. All margins must be at least one inch. All pages following the Table of Contents must be paginated. It should be noted that peer reviewers will not be required to read beyond 20 pages of the narrative to evaluate the proposal. The narrative should contain the following sections:  
I11(1) T3Potential for advancing the quality of educationG1T1_(i)T3 Impact.G1T1  (A) Identify the targeted need area(s).  
I11(B) Clearly state the specific instructional problem or opportunity to be addressed.  
I11(C) Describe how and by whom the focus and scope of the project were determined. Summarize the body of knowledge which substantiates the need for the proposed project.  
I11(D) Describe ongoing or recently completed significant activities related to the proposed project for which previous funding was received under this program.  
I11(E) Discuss how the project will be of value at the State, regional, national, or international level(s).  
I11(F) Discuss how the benefits to be derived from the project will transcend the applicant institution or the grant period. Also discuss the probabilities of the project being adapted by other institutions. For example, can the project serve as a model for others?  
I11(ii) T3Continuation plans.G1T1 Discuss the likelihood of, or plans for, continuation or expansion of the project beyond USDA support. For example, does the institution's long-range budget or academic plan provide for the realistic continuation or expansion of the initiative undertaken by this project after the end of the grant period, are plans for eventual self-support built into the project, are plans being made to institutionalize the program if it meets with success, and are there indications of other continuing non-Federal support?  
I11(iii)T3 Innovation.G1T1 Describe the degree to which the proposal reflects an innovative or non-traditional approach to solving a higher education problem or strengthening the quality of higher education in the food and agricultural sciences.  
I11(iv)T3 Products and results.G1T1 Explain the expected products and results and their potential impact on strengthening food and agricultural sciences higher education in the United States.  
I11(2)T3 Overall approach and cooperative linkagesG1T1_(i) T3Proposed approachG1T1_(A)T3 Objectives.G1T1 Cite and discuss the specific objectives to be accomplished under the project.  
ï¿½297ï¿½I11(B)T3 Plan of operation.G1T1 (T31G1T1) Describe procedures for accomplishing the objectives of the project.  

I11(T32G1T1) Describe plans for management of the project to ensure its proper and efficient administration.  
I11(T33G1T1) Describe the way in which resources and personnel will be used to conduct the project.  
I11(C) T3Timetable.G1T1 Provide a timetable for conducting the project. Identify all important project milestones and dates as they relate to project start-up, execution, evaluation, dissemination, and close-out.  
I11(ii) T3Evaluation plans.G1T1 (A) Provide a plan for evaluating the accomplishment of stated objectives during the conduct of the project. Indicate the criteria, and corresponding weight of each, to be used in the evaluation process, describe any data to be collected and analyzed, and explain the methodology that will be used to determine the extent to which the needs underlying the project are met.  
I11(B) Provide a plan for evaluating the effectiveness of the end results upon conclusion of the project. Include the same kinds of information requested in ï¿½1A3405.11(e)(2)(ii)(A).  
I11(iii) T3Dissemination plans.G1T1 Discuss plans to disseminate project results and products. Identify target audiences and explain methods of communication.  
I11(iv) T3Partnerships and collaborative efforts.G1T1 (A) Explain how the project will maximize partnership ventures and collaborative efforts to strengthen food and agricultural sciences higher education (e.g., involvement of faculty in related disciplines at the same institution, joint projects with other colleges or universities, or cooperative activities with business or industry). Also explain how it will stimulate academia, the States, or the private sector to join with the Federal partner in enhancing food and agricultural sciences higher education.  
I11(B) Provide evidence, via letters from the parties involved, that arrangements necessary for collaborative partnerships or joint initiatives have been discussed and realistically can be expected to come to fruition, or actually have been finalized contingent on an award under this program. Letters must be signed by an official who has the authority to commit the resources of the organization. Such letters should be referenced in the plan of operation, but the actual letters should be included in the Appendix section of the proposal. Any potential conflict(s) of interest that might result from the proposed collaborative arrangements must be discussed in detail.  
I11(3) T3Institutional commitment and resourcesG1T1_(i) T3Institutional commitment.G1T1 Discuss the institution's commitment to the project. For example, substantiate that the institution attributes a high priority to the project, discuss how the project will contribute to the achievement of the institution's long-term (five-to ten-year) goals, explain how the project will help satisfy the institution's high-priority objectives, or show how this project is linked to and supported by the institution's strategic plan.  
I11(ii) T3Institutional resources.G1T1 Document the commitment of institutional resources to the project, and show that the institutional resources to be made available to the project, when combined with the support requested from USDA, will be adequate to carry out the activities of the project. Discuss institutional facilities, equipment, computer services, and other appropriate resources available to the project.  
I11(f) T3Key personnel.G1T1 A Form CSREESï¿½09708, ``Summary Vita_Teaching Proposal,'' should be included for each key person associated with the project.  
I11(g) T3Budget and cost-effectivenessG1T1_(1) T3Budget form.G1T1 (i) Prepare Form CSREESï¿½09713, ``Higher Education Budget,'' in accordance with instructions provided with the form. Proposals may request support for a period to be identified in each year's program announcement. A budget form is required for each year of requested support. In addition, a summary budget is required detailing the requested total support for the overall project period. Form CSREESï¿½09713 may be reproduced as needed by proposers. Funds may be requested under any of the categories listed on the form, provided that the ï¿½298ï¿½item or service for which support is requested is allowable under the authorizing legislation, the applicable Federal cost principles, and these administrative provisions, and can be justified as necessary for the successful conduct of the proposed project.  
I11(ii) The approved negotiated instruction rate or the rate allowed by law should be used when computing indirect costs. If a reduced rate of indirect costs is voluntarily requested from USDA, the remaining allowable indirect costs may be used as matching funds.  
I11(2) T3Matching funds.G1T1 When documenting matching contributions, use the following guidelines:  
I11(i) When preparing the column of Form CSREESï¿½09713 entitled ``Applicant Contributions To Matching Funds,'' only those costs to be contributed by the applicant for the purposes of matching should be shown. The total amount of this column should be indicated in item M.  
I11(ii) In item N of Form CSREESï¿½09713, show a total dollar amount for Cash Contributions from both the applicant and any third parties; also show a total dollar amount (based on current fair market value) for Non-cash Contributions from both the applicant and any third parties.  

I11(iii) To be counted toward the matching requirements stated in ï¿½1A3405.5 of this part, proposals must include written verification of any actual commitments of matching support (including both cash and non-cash contributions) from third parties. Written verification means_  
I11(A) For any third party cash contributions, a separate pledge agreement for each donation, signed by the authorized organizational representative(s) of the donor organization and the applicant institution, which must include: 
I11(T31G1T1) The name, address, and telephone number of the donor;
I11(T32G1T1) The name of the applicant institution;
I11(T33G1T1) The title of the project for which the donation is made;
I11(T34G1T1) The dollar amount of the cash donation; and
I11(T35G1T1) A statement that the donor will pay the cash contribution during the grant period; and  
I11(B) For any third party non-cash contributions, a separate pledge agreement for each contribution, signed by the authorized organizational representative(s) of the donor organization and the applicant institution, which must include:
I11(T31G1T1) The name, address, and telephone number of the donor;
I11(T32G1T1) The name of the applicant institution;
I11(T33G1T1) The title of the project for which the donation is made;
I11(T34G1T1) A good faith estimate of the current fair market value of the non-cash contribution; and
I11(T35G1T1) A statement that the donor will make the contribution during the grant period.  
I11(iv) All pledge agreements referenced in ï¿½1A3405.11(g)(2)(iii) (A) and (B) must be placed in the proposal immediately following Form CSREESï¿½09713. The sources and amounts of all matching support from outside the applicant institution should be summarized in the Budget Narrative section of the proposal.  
I11(v) Applicants should refer to OMB Circulars Aï¿½09110, ``Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals and Other Non-profit Organizations,'' and Aï¿½0921, ``Cost Principles for Educational Institutions,'' for further guidance and other requirements relating to matching and allowable costs.  
I11(3) T3Chart on shared budget for joint project proposal.G1T1 For a joint project proposal, a plan must be provided indicating how funds will be distributed to the participating institutions. The budget section of a joint project proposal should include a chart indicating: The names of the participating institutions; the amount of funds to be disbursed to those institutions; and the way in which such funds will be used in accordance with items A through L of Form CSREESï¿½09713, ``Higher Education Budget.'' If a proposal is not for a joint project, such a chart is not required.  
I11(4) T3Budget narrative.G1T1 (i) Discuss how the budget specifically supports the proposed project activities. Explain how such budget items as professional ï¿½299ï¿½or technical staff, travel, equipment, etc., are essential to achieving project objectives.  
I11(ii) Justify that the total budget, including funds requested from USDA and any matching support provided, will be adequate to carry out the activities of the project. Provide a summary of sources and amounts of all third party matching support.  
I11(iii) Justify the project's cost-effectiveness. Show how the project maximizes the use of limited resources, optimizes educational value for the dollar, achieves economies of scale, or leverages additional funds. For example, discuss how the project has the potential to generate a critical mass of expertise and activity focused on a targeted need area, or to promote coalition building that could lead to future ventures.  
I11(iv) Include the percentage of time key personnel will work on the project, both during the academic year and summer. When salaries of university personnel will be paid by a combination of USDA and institutional funds, the total compensation must not exceed the faculty member's regular annual compensation. In addition, the total commitment of time devoted to the project, when combined with time for teaching and research duties, other sponsored agreements, and other employment obligations to the institution, must not exceed 100 percent of the normal workload for which the employee is compensated, in accordance with established university policies and applicable Federal cost principles.  
I11(v) If the proposal addresses more than one targeted need area (e.g., student experiential learning and instruction delivery systems), estimate the proportion of the funds requested from USDA that will support each respective targeted need area.  
I11(h) T3Current and pending support.G1T1 Each applicant must complete Form CSREESï¿½09663, ``Current and Pending Support,'' identifying any other current public- or private-sponsored projects, in addition to the proposed project, to which key personnel listed in the proposal under consideration have committed portions of their time, whether or not salary support for the person(s) involved is included in the budgets of the various projects. This information should also be provided for any pending proposals which are currently being considered by, or which will be submitted in the near future to other possible sponsors, including other USDA programs or agencies. Concurrent submission of identical or similar projects to other possible sponsors will not prejudice the review or evaluation of a project under this program.  

I11(i) T3Appendix.G1T1 Each project narrative is expected to be complete in itself and to meet the 20-page limitation. Inclusion of material in an Appendix should not be used to circumvent the 20-page limitation of the proposal narrative. However, in those instances where inclusion of supplemental information is necessary to guarantee the peer review panel's complete understanding of a proposal or to illustrate the integrity of the design or a main thesis of the proposal, such information may be included in an Appendix. Examples of supplemental material are photographs, journal reprints, brochures and other pertinent materials which are deemed to be illustrative of major points in the narrative but unsuitable for inclusion in the proposal narrative itself. Information on previously submitted proposals may also be presented in the Appendix (refer to ï¿½1A3405.11(d)). When possible, information in the Appendix should be presented in tabular format. A complete set of the Appendix material must be attached to each copy of the grant application submitted. The Appendix must be identified with the title of the project as it appears on Form CSREESï¿½09712 of the proposal and the name(s) of the project director(s). The Appendix must be referenced in the proposal narrative.  
I56Subpart D_Submission of a Proposal  


I80ï¿½1A3405.12 
I89Intent to submit a proposal.  
I11To assist CSREES in preparing for the review of proposals, institutions planning to submit proposals may be requested to complete Form CSREESï¿½09711, ``Intent to Submit a Proposal,'' provided in the application package. CSREES will determine each year if Intent to Submit a Proposal forms will ï¿½300ï¿½be requested and provide such information in the program announcement. If Intent to Submit a Proposal forms are required, one form should be completed and returned for each proposal an institution anticipates submitting. Submitting this form does not commit an institution to any course of action, nor does failure to send this form prohibit an institution from submitting a proposal.  


I80ï¿½1A3405.13 
I89When and where to submit a proposal.  
I11The program announcement will provide the deadline date for submitting a proposal, the number of copies of each proposal that must be submitted, and the address to which proposals must be submitted.  
I56Subpart E_Proposal Review and Evaluation  


I80ï¿½1A3405.14 
I89Proposal review.  
I11The proposal evaluation process includes both internal staff review and merit evaluation by peer review panels comprised of scientists, educators, business representatives, and Government officials. Peer review panels will be selected and structured to provide optimum expertise and objective judgment in the evaluation of proposals.  


I80ï¿½1A3405.15 
I89Evaluation criteria.  
I11The maximum score a proposal can receive is 200 points. Unless otherwise stated in the annual solicitation published in the T4Federal RegisterG1T1, the peer review panel will consider the following criteria and weights to evaluate proposals submitted:  


c2,L2,tp0,i1,s200,xs48 I95  h1Evaluation Criterion h1Weight   
j
I22(a) T3Potential for advancing the quality of education:G3T1  

I13This criterion is used to assess the likelihood that the project will have a substantial impact upon and advance the quality of food and agricultural sciences higher education by strengthening institutional capacities through promoting education reform to meet clearly delineated needs.  

I05(1) Impact_Does the project address a targeted need area(s)? Is the problem or opportunity clearly documented? Does the project address a State, regional, national, or international problem or opportunity? Will the benefits to be derived from the project transcend the applicant institution and/or the grant period? Is it probable that other institutions will adapt this project for their own use? Can the project serve as a model for others? D20 points.

I05(2) Continuation plans_Are there plans for continuation or expansion of the project beyond USDA support? Are there indications of external, non-Federal support? Are there realistic plans for making the project self-supporting?  D10 points.

I05(3) Innovation_Are significant aspects of the project based on an innovative or a non-traditional approach toward solving a higher education problem or strengthening the quality of higher education in the food and agricultural sciences? If successful, is the project likely to lead to education reform? D20 points.

I05(4) Products and results_Are the expected products and results of the project clearly explained? Do they have the potential to strengthen food and agricultural sciences higher education? Are the products likely to be of high quality? Will the project contribute to a better understanding of or improvement in the quality, distribution, effectiveness, or racial, ethnic, or gender diversity of the Nation's food and agricultural scientific and professional expertise base?  D20 points.

I22(b) T3Overall approach and cooperative linkages:G3T1  

I13This criterion relates to the soundness of the proposed approach and the quality of the partnerships likely to evolve as a result of the project.  

I05(1) Proposed approach_Do the objectives and plan of operation appear to be sound and appropriate relative to the targeted need area(s) and the impact anticipated? Are the procedures managerially, educationally, and/or scientifically sound? Is the overall plan integrated with or does it expand upon other major efforts to improve the quality of food and agricultural sciences higher education? Does the timetable appear to be readily achievable? D20 points.

I05(2) Evaluation_Are the evaluation plans adequate and reasonable? Do they allow for continuous and/or frequent feedback during the life of the project? Are the individuals involved in project evaluation skilled in evaluation strategies and procedures? Can they provide an objective evaluation? Do evaluation plans facilitate the measurement of project progress and outcomes? D10 points.

I05(3) Dissemination_Does the proposed project include clearly outlined and realistic mechanisms that will lead to widespread dissemination of project results, including national electronic communication systems, publications, presentations at professional conferences, and/or use by faculty development or research/teaching skills workshops D10 points.

I05(4) Partnerships and collaborative efforts_Will the project expand partnership ventures among disciplines at a university, between colleges and universities, or with the private sector? Will the project lead to long-term relationships or cooperative partnerships that are likely to enhance program quality or supplement resources available to food and agricultural sciences higher education? D20 points.

I22(c) T3Institutional commitment and resources:

ï¿½301ï¿½
I13This criterion relates to the institution's commitment to the project and the adequacy of institutional resources available to carry out the project.  

I05(1) Institutional commitment_Is there evidence to substantiate that the institution attributes a high-priority to the project, that the project is linked to the achievement of the institution's long-term goals, that it will help satisfy the institution's high-priority objectives, or that the project is supported by the institution's strategic plans? D10 points.

I05(2) Institutional resources_Will the  project have adequate support to carry out the proposed activities? Will the project have reasonable access to needed resources such as instructional instrumentation, facilities, computer services, library and other instruction support resources? D10 points.

I22(d) T3Key personnel:G3T1 D20 points.  

I13This criterion relates to the number and qualifications of the key persons who will carry out the project. Are designated project personnel qualified to carry out a successful project? Are there sufficient numbers of personnel associated with the project to achieve the stated objectives and the anticipated outcomes?  

I22(e) T3Budget and cost-effectiveness:

I13This criterion relates to the extent to which the total budget adequately supports the project and is cost-effective.  

I05(1) Budget_Is the budget request justifiable? Are costs reasonable and necessary? Will the total budget be adequate to carry out project activities? Are the source(s) and amount(s) of non-Federal matching support clearly identified and appropriately documented? For a joint project proposal, is the shared budget explained clearly and in sufficient detail? D10 points.

I05(2) Cost-effectiveness_Is the proposed project cost-effective? Does it demonstrate a creative use of limited resources, maximize educational value per dollar of USDA support, achieve economies of scale, leverage additional funds or have the potential to do so, focus expertise and activity on a targeted need area, or promote coalition building for current or future ventures? D10 points.

I22(f) T3Overall quality of proposal:G3T1 D10 points.  

I13This criterion relates to the degree to which the proposal complies with the application guidelines and is of high quality. Is the proposal enhanced by its adherence to instructions (table of contents, organization, pagination, margin and font size, the 20-page limitation, appendices, etc.); accuracy of forms; clarity of budget narrative; well prepared vitae for all key personnel associated with the project; and presentation (are ideas effectively presented, clearly articulated, and thoroughly explained, etc.)?  

e
S8010

I56Subpart F_Supplementary Information


I80ï¿½1A3405.16 
I89Access to peer review information.
I11After final decisions have been announced, CSREES will, upon request, inform the project director of the reasons for its decision on a proposal. Verbatim copies of summary reviews, not including the identity of the peer reviewers, will be made available to respective project directors upon specific request.


I80ï¿½1A3405.17 
I89Grant awards.
I11(a) T3General.G1T1 Within the limit of funds available for such purpose, the authorized departmental officer shall make project grants to those responsible, eligible applicants whose proposals are judged most meritorious in the announced targeted need areas under the evaluation criteria and procedures set forth in this part. The beginning of the project period shall be no later than September 30 of the Federal fiscal year in which the project is approved for support. All funds granted under this part shall be expended solely for the purpose for which the funds are granted in accordance with the approved application and budget, the regulations of this part, the terms and conditions of the award, the applicable Federal cost principles, and the Department's Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations (7 CFR part 3019).
I11(b) T3Organizational management information.G1T1 Specific management information relating to a proposing institution shall be submitted on a one-time basis prior to the award of a project grant identified under this part if such information has not been provided previously under this or another program for which the sponsoring agency is responsible. Copies of the forms used to fulfill this requirement will be sent to the proposing institution by the sponsoring agency as part of the pre-award process.
I11(c) T3Notice of grant award.G1T1 The grant award document shall include at a minimum the following:
I11(1) Legal name and address of performing organization.
I11(2) Title of project.
ï¿½302ï¿½I11(3) Name(s) and address(es) of project director(s).
I11(4) Identifying grant number assigned by the Department.
I11(5) Project period, which specifies how long the Department intends to support the effort without requiring reapplication for funds.
I11(6) Total amount of Federal financial assistance approved during the project period.
I11(7) Legal authority(ies) under which the grant is awarded.
I11(8) Approved budget plan for categorizing allocable project funds to accomplish the stated purpose of the grant award.

I11(9) Other information or provisions deemed necessary by the Department to carry out its granting activities or to accomplish the purpose of this particular project grant.
I11(d) T3Obligation of the Federal Government.G1T1 Neither the approval of any application nor the award of any project grant shall legally commit or obligate CSREES or the United States to provide further support of a project or any portion thereof.


I80ï¿½1A3405.18 
I89Use of funds; changes.
I11(a) T3Delegation of fiscal responsibility.G1T1 The grantee may not in whole or in part delegate or transfer to another person, institution, or organization the responsibility for use or expenditure of grant funds.
I11(b) T3Change in project plans.G1T1 (1) The permissible changes by the grantee, project director(s), or other key project personnel in the approved project grant shall be limited to changes in methodology, techniques, or other aspects of the project to expedite achievement of the project's approved goals. If the grantee or the project director(s) are uncertain as to whether a change complies with this provision, the question must be referred to the Department for a final determination.
I11(2) Changes in approved goals, or objectives, shall be requested by the grantee and approved in writing by the authorized departmental officer prior to effecting such changes. In no event shall requests for such changes be approved that are outside the scope of the approved project.
I11(3) Changes in approved project leadership or the replacement or reassignment of other key project personnel shall be requested by the grantee and approved in writing by the authorized departmental officer prior to effecting such changes.
I11(4) Transfers of actual performance of the substantive programmatic work in whole or in part and provisions for payment of funds, whether or not Federal funds are involved, shall be requested by the grantee and approved in writing by the authorized departmental officer prior to effecting such transfers.
I11(c) T3Changes in project period.G1T1 The project period may be extended by the authorized departmental officer without additional financial support for such additional period(s) as the authorized departmental officer determines may be necessary to complete or fulfill the purposes of an approved project. However, due to statutory restriction, no grant may be extended beyond five years from the original start date of the grant, or pre-award date, if applicable. Grant extensions shall be conditioned upon prior request by the grantee and approval in writing by the authorized departmental officer, unless prescribed otherwise in the terms and conditions of a grant.

I11(d) T3Changes in approved budget.G1T1 Changes in an approved budget shall be requested by the grantee and approved in writing by the authorized departmental officer prior to instituting such changes if the revision will:
I11(1) Involve transfers of amounts budgeted for indirect costs to absorb an increase in direct costs;
I11(2) Involve transfers of amounts budgeted for direct costs to accommodate changes in indirect cost rates negotiated during a budget period and not approved when a grant was awarded; or
I11(3) Involve transfers or expenditures of amounts requiring prior approval as set forth in the applicable Federal cost principles, Departmental regulations, or in the grant award.


I80ï¿½1A3405.19 
I89Monitoring progress of funded projects.
I11(a) During the tenure of a grant, project directors must attend at least one national project directors meeting, ï¿½303ï¿½if offered, in Washington, DC or any other announced location. The purpose of the meeting will be to discuss project and grant management opportunities for collaborative efforts, future directions for education reform, and opportunities to enhance dissemination of exemplary end products/results.
I11(b) An Annual Performance Report must be submitted to the USDA program contact person within 90 days after the completion of the first year of the project and annually thereafter during the life of the grant. Generally, the Annual Performance Reports should include a summary of the overall progress toward project objectives, current problems or unusual developments, the next year's activities, and any other information that is pertinent to the ongoing project or which may be specified in the terms and conditions of the award.
I11(c) A Final Performance Report must be submitted to the USDA program contact person within 90 days after the expiration date of the project. The expiration date is specified in the award documents and modifications thereto, if any. Generally, the Final Performance Report should be a summary of the completed project, including: A review of project objectives and accomplishments; a description of any products and outcomes resulting from the project; activities undertaken to disseminate products and outcomes; partnerships and collaborative ventures that resulted from the project; future initiatives that are planned as a result of the project; the impact of the project on the project director(s), the institution, and the food and agricultural sciences higher education system; and data on project personnel and beneficiaries. The Final Performance Report should be accompanied by samples or copies of any products or publications resulting from or developed by the project. The Final Performance Report must also contain any other information which may be specified in the terms and conditions of the award.


I80ï¿½1A3405.20 
I89Other Federal statutes and regulations that apply.
I11Several other Federal statutes and regulations apply to grant proposals considered for review and to project grants awarded under this part. These include but are not limited to:

Q04



I217 CFR Part 1, Subpart A_USDA implementation of Freedom of Information Act.
I217 CFR Part 3_USDA implementation of OMB Circular No. Aï¿½09129 regarding debt collection.
I217 CFR Part 15, Subpart A_USDA implementation of Title VI of the Civil Rights Act of 1964, as amended.
I217 CFR Part 3015_USDA Uniform Federal Assistance Regulations, implementing OMB directives (i.e., Circular Nos. Aï¿½0921 and Aï¿½09122) and incorporating provisions of 31 U.S.C. 6301ï¿½096308 (formerly the Federal Grant and Cooperative Agreement Act of 1977, Pub. L. 95ï¿½09224), as well as general policy requirements applicable to recipients of Departmental financial assistance.
I217 CFR Part 3017, as amended_Governmentwide Debarment and Suspension (Nonprocurement); Governmentwide Requirements for Drug-Free Workplace (Grants), implementing Executive Order 12549 on debarment and suspension and the Drug-Free Workplace Act of 1988 (41 U.S.C. 701).

I217 CFR Part 3018_Restrictions on Lobbying, prohibiting the use of appropriated funds to influence Congress or a Federal agency in connection with the making of any Federal grant and other Federal contracting and financial transactions.  
I217 CFR Part 3019_USDA implementation of OMB Circular Aï¿½09110, Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations.  
I217 CFR Part 3051_USDA implementation of OMB Circular No. Aï¿½09133 regarding audits of institutions of higher education and other nonprofit institutions.  
I2129 U.S.C. 794, section 504_Rehabilitation Act of 1973, and 7 CFR part 15B (USDA implementation of statute), prohibiting discrimination based upon physical or mental handicap in Federally assisted programs. 
I2135 U.S.C. 200 T3et seq.G1T1_Bayh-Dole Act, controlling allocation of rights to inventions made by employees of small business firms and domestic nonprofit organizations, including universities, in Federally assisted programs (implementing regulations are contained in 37 CFR part 401). 



I80ï¿½1A3405.21 
I89Confidential aspects of proposals and awards.  
I11When a proposal results in a grant, it becomes a part of the record of the Agency's transactions, available to the public upon specific request. Information that the Secretary determines to be of a privileged nature will be held in confidence to the extent permitted by 
ï¿½304ï¿½law. Therefore, any information that the applicant wishes to have considered as privileged should be clearly marked as such and sent in a separate statement, two copies of which should accompany the proposal. The original copy of a proposal that does not result in a grant will be retained by the Agency for a period of one year. Other copies will be destroyed. Such a proposal will be released only with the consent of the applicant or to the extent required by law. A proposal may be withdrawn at any time prior to the final action thereon.  


I80ï¿½1A3405.22 
I89Evaluation of program.  
I11Grantees should be aware that CSREES may, as a part of its own program evaluation activities, carry out in-depth evaluations of assisted activities. Thus, grantees should be prepared to cooperate with CSREES personnel, or persons retained by CSREES, evaluating the institutional context and the impact of any supported project. Grantees may be asked to provide general information on any students and faculty supported, in whole or in part, by a grant awarded under this program; information that may be requested includes, but is not limited to, standardized academic achievement test scores, grade point average, academic standing, career patterns, age, race/ethnicity, gender, citizenship, and disability.


I95Pt. 3406
I52PART 3406_1890 INSTITUTION CAPACITY BUILDING GRANTS PROGRAM  
I86Subpart A_General Information  
S8006I18Sec.
S8010I263406.1Applicability of regulations.  
I263406.2Definitions.  
I263406.3Institutional eligibility.

I86Subpart B_Program Description

I263406.4Purpose of the program.  
I263406.5Matching support.  
I263406.6USDA agency cooperator requirement.  
I263406.7General scope of program.  
I263406.8Joint project proposals.  
I263406.9Complementary project proposals.  
I263406.10Use of funds for facilities. 
I86Subpart C_Preparation of a Teaching Proposal

I263406.11Scope of a teaching proposal.  
I263406.12Program application materials_teaching.  
I263406.13Content of a teaching proposal.

I86Subpart D_Review and Evaluation of a Teaching Proposal

I263406.14Proposal review_teaching.  
I263406.15Evaluation criteria for teaching proposals.

I86Subpart E_Preparation of a Research Proposal

I263406.16Scope of a research proposal.  
I263406.17Program application materials_research.  
I263406.18Content of a research proposal.

I86Subpart F_Review and Evaluation of a Research Proposal

I263406.19Proposal review_research.  
I263406.20Evaluation criteria for research proposals.
I86Subpart G_Submission of a Teaching or Research Proposal

I263406.21Intent to submit a proposal.  
I263406.22When and where to submit a proposal.
I86Subpart H_Supplementary Information 

I263406.23Access to peer review information.  
I263406.24Grant awards.  
I263406.25Use of funds; changes.  
I263406.26Monitoring progress of funded projects.  
I263406.27Other Federal statutes and regulations that apply.  
I263406.28Confidential aspects of proposals and awards.  
I263406.29Evaluation of program.


Q04I21T5Authority:  T1Sec. 1470, National Agricultural Research, Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C. 3316).   

Q04I21T5Source: T162 FR 39331, July 22, 1997, unless otherwise noted.



I56Subpart A_General Information  


I80ï¿½1A3406.1 
I89Applicability of regulations.  
I11(a) The regulations of this part apply only to capacity building grants awarded to the 1890 land-grant institutions and Tuskegee University under the provisions of section 1417(b)(4) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977, 
ï¿½305ï¿½ 
as amended (NARETPA) (7 U.S.C. 3152(b)(4)) and pursuant to annual appropriations made available specifically for an 1890 capacity building program. Section 1417(b)(4) authorizes the Secretary of Agriculture, who has delegated the authority to the Administrator of the Cooperative State Research, Education, and Extension Service (CSREES), to make competitive grants to land-grant colleges and universities, to colleges and universities having significant minority enrollments and a demonstrable capacity to carry out the teaching of food and agricultural sciences, and to other colleges and universities having a demonstrable capacity to carry out the teaching of food and agricultural sciences, for a period not to exceed 5 years, to design and implement food and agricultural programs to build teaching and research capacity at colleges and universities having significant minority enrollments. Based on and subject to the express provisions of the annual appropriations act, only 1890 land-grant institutions and Tuskegee University are eligible for this grants program.  
I11(b) To the extent that funds are available, each year CSREES will publish a T4Federal RegisterG1T1 notice announcing the program and soliciting grant applications.  
I11(c)(1) Based on the amount of funds appropriated in any fiscal year, CSREES will determine and cite in the program announcement:  
I11(i) The program area(s) to be supported (teaching, research, or both); 
I11(ii) The proportion of the appropriation reserved for, or available to, teaching projects and research projects; 
I11(iii) The targeted need area(s) in teaching and in research to be supported; 
I11(iv) The degree level(s) to be supported; 
I11(v) The maximum project period a proposal may request; 
I11(vi) The maximum amount of funds that may be requested by an institution under a regular, complementary, or joint project proposal; and  
I11(vii) The maximum total funds that may be awarded to an institution under the program in a given fiscal year, including how funds awarded for complementary and for joint projects will be counted toward the institutional maximum.  
I11(2) The program announcement will also specify the deadline date for proposal submission, the number of copies of each proposal that must be submitted, the address to which a proposal must be submitted, and whether or not Form CSREESï¿½09711, ``Intent to Submit a Proposal,'' is requested.  
I11(d)(1) If it is deemed by CSREES that, for a given fiscal year, additional determinations are necessary, each, as relevant, will be stated in the program announcement. Such determinations may include:  
I11(i) Limits on the subject matter/emphasis areas to be supported; 
I11(ii) The maximum number of proposals that may be submitted on behalf of the same school, college, or equivalent administrative unit within an institution; 
I11(iii) The maximum total number of proposals that may be submitted by an institution; 
I11(iv) The maximum number of proposals that may be submitted by an individual in any one targeted need area; 
I11(v) The minimum project period a proposal may request; 
I11(vi) The minimum amount of funds that may be requested by an institution under a regular, complementary, or joint project proposal; 
I11(vii) The proportion of the appropriation reserved for, or available to, regular, complementary, and joint project proposals; 
I11(viii) The proportion of the appropriation reserved for, or available to, projects in each announced targeted need area; 
I11(ix) The proportion of the appropriation reserved for, or available to, each subject matter/emphasis area; 
I11(x) The maximum number of grants that may be awarded to an institution under the program in a given fiscal year, including how grants awarded for complementary and joint projects will be counted toward the institutional maximum; and  
I11(xi) Limits on the use of grant funds for travel or to purchase equipment, if any. 
I11(2) The program announcement also will contain any other limitations ï¿½306ï¿½deemed necessary by CSREES for proper conduct of the program in the applicable year.  
I11(e) The regulations of this part prescribe that this is a competitive program; it is possible that an institution may not receive any grant awards in a particular year.  
I11(f) The regulations of this part do not apply to grants for other purposes awarded by the Department of Agriculture under section 1417 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C. 3152) or any other authority.  


I80ï¿½1A3406.2 
I89Definitions.  
I11As used in this part:  
I11T3Authorized departmental officerG1T1 means the Secretary or any employee of the Department who has the authority to issue or modify grant instruments on behalf of the Secretary.  
I11T3Authorized organizational representativeG1T1 means the president of the 1890 Institution or the official, designated by the president of the institution, who has the authority to commit the resources of the institution.  
I11T3Budget periodG1T1 means the interval of time (usually 12 months) into which the project period is divided for budgetary and reporting purposes.  
I11T3Cash contributionsG1T1 means the applicant's cash outlay, including the outlay of money contributed to the applicant by non-Federal third parties.  
I11T3Citizen or national of the United StatesG1T1 means: 
I11(1) A citizen or native resident of a State; or, 
I11(2) a person defined in the Immigration and Nationality Act, 8 U.S.C. 1101(a)(22), who, though not a citizen of the United States, owes permanent allegiance to the United States.  
I11T3CollegeG1T1 or T3UniversityG1T1 means an educational institution in any State which:  
I11(1) Admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate; 
I11(2) Is legally authorized within such State to provide a program of education beyond secondary education; 
I11(3) Provides an educational program for which a baccalaureate degree or any other higher degree is awarded; 
I11(4) Is a public or other nonprofit institution; and  
I11(5) Is accredited by a nationally recognized accrediting agency or association.  
I11T3Complementary project proposalG1T1 means a proposal for a project which involves coordination with one or more other projects for which funding was awarded under this program in a previous fiscal year, or for which funding is requested under this program in the current fiscal year.  
I11T3Cost-sharingG1T1 or T3MatchingG1T1 means that portion of project costs not borne by the Federal Government, including the value of in-kind contributions.  
I11T3DepartmentG1T1 or T3USDAG1T1 means the United States Department of Agriculture.  
I11T31890 InstitutionG1T1 or T31890 land-grant institutionG1T1 or T31890 colleges and universitiesG1T1 means one of those institutions eligible to receive funds under the Act of August 30, 1890 (26 Stat. 417ï¿½09419, as amended; 7 U.S.C. 321ï¿½09326 and 328), or a research foundation maintained by such institution, that are the intended recipients of funds under programs established in Subtitle G of the National Agricultural Research, Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C. 3221 T3et seq.G1T1), including Tuskegee University.  
I11T3Eligible participantG1T1 means, for purposes of ï¿½1A3406.11(b), Faculty Preparation and Enhancement for Teaching, and ï¿½1A3406.11(f), Student Recruitment and Retention, an individual who: 
I11(1) Is a citizen or national of the United States, as defined in this section; or 
I11(2) Is a citizen of the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau. Where eligibility is claimed under paragraph (2) of the definition of ``citizen or national of the United States'' as specified in this section, documentary evidence from the Immigration and Naturalization Service as to such eligibility must be made available to CSREES upon request.  

ï¿½307ï¿½I11T3Food and agricultural sciencesG1T1 means basic, applied, and developmental research, extension, and teaching activities in the food, agricultural, renewable natural resources, forestry, and physical and social sciences, in the broadest sense of these terms, including but not limited to, activities concerned with the production, processing, marketing, distribution, conservation, consumption, research, and development of food and agriculturally related products and services, and inclusive of programs in agriculture, natural resources, aquaculture, forestry, veterinary medicine, home economics, rural development, and closely allied disciplines.  
I11T3GranteeG1T1 means the 1890 Institution designated in the grant award document as the responsible legal entity to which a grant is awarded.  
I11T3Joint project proposalG1T1 means a proposal for a project, which will involve the applicant 1890 Institution and two or more other colleges, universities, community colleges, junior colleges, or other institutions, each of which will assume a major role in the conduct of the proposed project, and for which the applicant institution will transfer at least one-half of the awarded funds to the other institutions participating in the project. Only the applicant institution must meet the definition of ``1890 Institution'' as specified in this section; the other institutions participating in a joint project proposal are not required to meet the definition of ``1890 Institution'' as specified in this section, nor required to meet the definition of ``college'' or ``university'' as specified in this section.  
I11T3Peer review panelG1T1 means a group of experts or consultants, qualified by training and experience in particular fields of science, education, or technology to give expert advice on the merit of grant applications in such fields, who evaluate eligible proposals submitted to this program in their personal area(s) of expertise.  
I11T3Principal investigator/project directorG1T1 means the single individual designated by the grantee in the grant application and approved by the Secretary who is responsible for the direction and management of the project.  
I11T3Prior approvalG1T1 means written approval evidencing prior consent by an ``authorized departmental officer'' as defined in this section.  
I11T3ProjectG1T1 means the particular teaching or research activity within the scope of one or more of the targeted areas supported by a grant awarded under this program.  
I11T3Project periodG1T1 means the period, as stated in the award document and modifications thereto, if any, during which Federal sponsorship begins and ends.  
I11T3ResearchG1T1 means any systematic inquiry directed toward new or fuller knowledge and understanding of the subject studied.  
I11T3Research capacityG1T1 means the quality and depth of an institution's research infrastructure as evidenced by its: faculty expertise in the natural or social sciences, scientific and technical resources, research environment, library resources, and organizational structures and reward systems for attracting and retaining first-rate research faculty or students at the graduate and post-doctorate levels.  
I11T3Research project grantG1T1 means a grant in support of a project that addresses one or more of the targeted need areas or specific subject matter/emphasis areas identified in the annual program announcement related to strengthening research programs including, but not limited to, such initiatives as: Studies and experimentation in food and agricultural sciences, centralized research support systems, technology delivery systems, and other creative projects designed to provide needed enhancement of the Nation's food and agricultural research system.  
I11T3SecretaryG1T1 means the Secretary of Agriculture and any other officer or employee of the Department of Agriculture to whom the authority involved may be delegated.  
I11T3StateG1T1 means any one of the fifty States, the Commonwealth of Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Marianas, the Virgin Islands of the United States, and the District of Columbia.  
I11T3TeachingG1T1 means formal classroom instruction, laboratory instruction, and practicum experience in the food and ï¿½308ï¿½agricultural sciences and matters related thereto (such as faculty development, student recruitment and services, curriculum development, instructional materials and equipment, and innovative teaching methodologies) conducted by colleges and universities offering baccalaureate or higher degrees.  

I11T3Teaching capacityG1T1 means the quality and depth of an institution's academic programs infrastructure as evidenced by its: Curriculum, teaching faculty, instructional delivery systems, student experiential learning opportunities, scientific instrumentation for teaching, library resources, academic standing and racial, ethnic, or gender diversity of its faculty and student body as well as faculty and student recruitment and retention programs provided by a college or university in order to achieve maximum results in the development of scientific and professional expertise for the Nation's food and agricultural system.  
I11T3Teaching project grantG1T1 means a grant in support of a project that addresses one or more of the targeted need areas or specific subject matter/emphasis areas identified in the annual program announcement related to strengthening teaching programs including, but not limited to, such initiatives as: Curricula design and materials development, faculty preparation and enhancement for teaching, instruction delivery systems, scientific instrumentation for teaching, student experiential learning, and student recruitment and retention.  
I11T3Third party in-kind contributionsG1T1 means non-cash contributions of property or services provided by non-Federal third parties, including real property, equipment, supplies and other expendable property, directly benefiting and specifically identifiable to a funded project or program.  
I11T3USDA agency cooperatorG1T1 means any agency or office of the Department which has reviewed and endorsed an applicant's request for support, and indicates a willingness to make available non-monetary resources or technical assistance throughout the life of a project to ensure the accomplishment of the objectives of a grant awarded under this program.  


I80ï¿½1A3406.3 
I89Institutional eligibility.  
I11Proposals may be submitted by any of the 16 historically black 1890 land-grant institutions and Tuskegee University. The 1890 land-grant institutions are: Alabama A&M University; University of Arkansas_Pine Bluff; Delaware State University; Florida A&M University; Fort Valley State College; Kentucky State University; Southern University and A&M College; University of Maryland_Eastern Shore; Alcorn State University; Lincoln University; North Carolina A&T State University; Langston University; South Carolina State University; Tennessee State University; Prairie View A&M University; and Virginia State University. An institution eligible to receive an award under this program includes a research foundation maintained by an 1890 land-grant institution or Tuskegee University.  
I56Subpart B_Program Description  


I80ï¿½1A3406.4 
I89Purpose of the program.  
I11(a) The Department of Agriculture and the Nation depend upon sound programs in the food and agricultural sciences at the Nation's colleges and universities to produce well trained professionals for careers in the food and agricultural sciences. The capacity of institutions to offer suitable programs in the food and agricultural sciences to meet the Nation's need for a well trained work force in the food and agricultural sciences is a proper concern for the Department.  
I11(b) Historically, the Department has had a close relationship with the 1890 colleges and universities, including Tuskegee University. Through its role as administrator of the Second Morrill Act, the Department has borne the responsibility for helping these institutions develop to their fullest potential in order to meet the needs of students and the needs of the Nation.  
I11(c) The institutional capacity building grants program is intended to stimulate development of quality education and research programs at these institutions in order that they may better assist the Department, on behalf of the Nation, in its mission of providing a ï¿½309ï¿½professional work force in the food and agricultural sciences.  
I11(d) This program is designed specifically to build the institutional teaching and research capacities of the 1890 land-grant institutions through cooperative programs with Federal and non-Federal entities. The program is competitive among the 1890 Institutions and encourages matching funds on the part of the States, private organizations, and other non-Federal entities to encourage expanded linkages with 1890 Institutions as performers of research and education, and as developers of scientific and professional talent for the United States food and agricultural system. In addition, through this program, CSREES will strive to increase the overall pool of qualified job applicants from underrepresented groups in order to make significant progress toward achieving the objectives of work force diversity within the Federal Government, particularly the U.S. Department of Agriculture.  


I80ï¿½1A3406.5 
I89Matching support.  

I11The Department strongly encourages and may require non-Federal matching support for this program. In the annual program solicitation, CSREES will announce any incentives that may be offered to applicants for committing their own institutional resources or securing third party contributions in support of capacity building projects. CSREES may also announce any required fixed dollar amount or percentage of institutional cost sharing, if applicable.


I80ï¿½1A3406.6 
I89USDA agency cooperator requirement.
I11(a) Each application must provide documentation that at least one USDA agency or office has agreed to cooperate with the applicant institution on the proposed project. The documentation should describe the expected benefits of the partnership venture for the USDA agency and for the 1890 Institution, and describe the partnership effort between USDA and the 1890 Institution in regard to the proposed project. Such USDA agency cooperation may include, but is not limited to, assisting the applicant institution with proposal development, identifying possible sources of matching funds, securing resources, implementing funded projects, providing technical assistance and expertise throughout the life of the project, participating in project evaluation, and disseminating project results.
I11(b) The designated CSREES agency contact can provide suggestions to institutions seeking to secure a USDA agency cooperator on a particular proposal.
I11(c) USDA 1890 Liaison Officers, and other USDA employees serving on the campuses of the 1890 colleges and universities, may assist with proposal development and project execution to satisfy the cooperator requirement, in whole or in part, but may not serve as project directors or principal investigators.
I11(d) Any USDA office responsible for administering a competitive or formula grants program specifically targeted to 1890 Institutions may not be a cooperator for this program.


I80ï¿½1A3406.7 
I89General scope of program.
I11This program supports both teaching project grants and research project grants. Such grants are intended to strengthen the teaching and research capabilities of applicant institutions. Each 1890 Institution may submit one or more grant applications for either category of grants (as allowed by the annual program notice). However, each application must be limited to either a teaching project grant proposal or a research project grant proposal.


I80ï¿½1A3406.8 
I89Joint project proposals.
I11Applicants are encouraged to submit joint project proposals as defined in ï¿½1A3406.2, which address regional or national problems and which will result overall in strengthening the 1890 university system. The goals of such joint initiatives should include maximizing the use of limited resources by generating a critical mass of expertise and activity focused on a targeted need area(s), increasing cost-effectiveness through achieving economies of scale, strengthening the scope and quality of a project's impact, and promoting coalition building likely to transcend the project's lifetime and lead to future ventures.


ï¿½310ï¿½I80ï¿½1A3406.9 
I89Complementary project proposals.
I11Institutions may submit proposals that are complementary in nature as defined in ï¿½1A3406.2. Such complementary project proposals may be submitted by the same or by different eligible institutions.


I80ï¿½1A3406.10 
I89Use of funds for facilities.
I11Under the 1890 Institution Capacity Building Grants Program, the use of grant funds to plan, acquire, or construct a building or facility is not allowed. With prior approval, in accordance with the cost principles set forth in OMB Circular No. Aï¿½0921, some grant funds may be used for minor alterations, renovations, or repairs deemed necessary to retrofit existing teaching or research spaces in order to carry out a funded project. However, requests to use grant funds for such purposes must demonstrate that the alterations, renovations, or repairs are incidental to the major purpose for which a grant is made.
I56Subpart C_Preparation of a Teaching Proposal


I80ï¿½1A3406.11 
I89Scope of a teaching proposal.

I11The teaching component of the program will support the targeted need area(s) related to strengthening teaching programs as specified in the annual program announcement. Proposals may focus on any subject matter area(s) in the food and agricultural sciences unless limited by determinations as specified in the annual program announcement. A proposal may address a single targeted need area or multiple targeted need areas, and may be focused on a single subject matter area or multiple subject matter areas, in any combination (e.g., curriculum development in horticulture; curriculum development, faculty enhancement, and student experiential learning in animal science; faculty enhancement in food science and agribusiness management; or instruction delivery systems and student experiential learning in plant science, horticulture, and entomology). Applicants are also encouraged to include a library enhancement component related to the teaching project in their proposals. A proposal may be directed toward the undergraduate or graduate level of study as specified in the annual program announcement. Targeted need areas for teaching programs will consist of one or more of the following:
I11(a) T3Curricula design and materials development.G1T1 (1) The purpose of this need area is to promote new and improved curricula and materials to increase the quality of, and continuously renew, the Nation's academic programs in the food and agricultural sciences. The overall objective is to stimulate the development and facilitate the use of exemplary education models and materials that incorporate the most recent advances in subject matter, research on teaching and learning theory, and instructional technology. Proposals may emphasize: The development of courses of study, degree programs, and instructional materials; the use of new approaches to the study of traditional subjects; or the introduction of new subjects, or new applications of knowledge, pertaining to the food and agricultural sciences.
I11(2) Examples include, but are not limited to, curricula and materials that promote:
I11(i) Raising the level of scholastic achievement of the Nation's graduates in the food and agricultural sciences.
I11(ii) Addressing the special needs of particular groups of students, such as minorities, gifted and talented, or those with educational backgrounds that warrant enrichment.
I11(iii) Using alternative instructional strategies or methodologies, including computer-assisted instruction or simulation modeling, media programs that reach large audiences efficiently and effectively, activities that provide hands-on learning experiences, and educational programs that extend learning beyond the classroom.
I11(iv) Using sound pedagogy, particularly with regard to recent research on how to motivate students to learn, retain, apply, and transfer knowledge, skills, and competencies.
I11(v) Building student competencies to integrate and synthesize knowledge from several disciplines.
I11(b) T3Faculty preparation and enhancement for teaching.G1T1 (1) The purpose of ï¿½311ï¿½this need area is to advance faculty development in the areas of teaching competency, subject matter expertise, or student recruitment and advising skills. Teachers are central to education. They serve as models, motivators, and mentors_the catalysts of the learning process. Moreover, teachers are agents for developing, replicating, and exchanging effective teaching materials and methods. For these reasons, education can be strengthened only when teachers are adequately prepared, highly motivated, and appropriately recognized and rewarded.
I11(2) Each faculty recipient of support for developmental activities under ï¿½1A3406.11(b) must be an ``eligible participant'' as defined in ï¿½1A3406.2 of this part.
I11(3) Examples of developmental activities include, but are not limited to, those which enable teaching faculty to:
I11(i) Gain experience with recent developments or innovative technology relevant to their teaching responsibilities.

I11(ii) Work under the guidance and direction of experts who have substantial expertise in an area related to the developmental goals of the project.  
I11(iii) Work with scientists or professionals in government, industry, or other colleges or universities to learn new applications in a field.  
I11(iv) Obtain personal experience working with new ideas and techniques.  
I11(v) Expand competence with new methods of information delivery, such as computer-assisted or televised instruction.  
I11(c) T3Instruction delivery systems.G1T1 (1) The purpose of this need area is to encourage the use of alternative methods of delivering instruction to enhance the quality, effectiveness, and cost efficiency of teaching programs. The importance of this initiative is evidenced by advances in educational research which have substantiated the theory that differences in the learning styles of students often require alternative instructional methodologies. Also, the rising costs of higher education strongly suggest that colleges and universities undertake more efforts of a collaborative nature in order to deliver instruction which maximizes program quality and reduces unnecessary duplication. At the same time, advancements in knowledge and technology continue to introduce new subject matter areas which warrant consideration and implementation of innovative instruction techniques, methodologies, and delivery systems.  
I11(2) Examples include, but are not limited to:  
I11(i) Use of computers.  
I11(ii) Teleconferencing.  
I11(iii) Networking via satellite communications.  
I11(iv) Regionalization of academic programs.  
I11(v) Mobile classrooms and laboratories.  
I11(vi) Individualized learning centers.  
I11(vii) Symposia, forums, regional or national workshops, etc.  
I11(d) T3Scientific Instrumentation for teaching.G1T1 (1) The purpose of this need area is to provide students in science-oriented courses the necessary experience with suitable, up-to-date equipment in order to involve them in work central to scientific understanding and progress. This program initiative will support the acquisition of instructional laboratory and classroom equipment to assure the achievement and maintenance of outstanding food and agricultural sciences higher education programs. A proposal may request support for acquiring new, state-of-the-art instructional scientific equipment, upgrading existing equipment, or replacing non-functional or clearly obsolete equipment.  
I11(2) Examples include, but are not limited to:  
I11(i) Rental or purchase of modern instruments to improve student learning experiences in courses, laboratories, and field work.  
I11(ii) Development of new ways of using instrumentation to extend instructional capabilities.  
I11(iii) Establishment of equipment-sharing capability via consortia or centers that develop innovative opportunities, such as mobile laboratories or satellite access to industry or government laboratories.  
I11(e) T3Student experiential learning.G1T1 (1) The purpose of this need area is to further the development of student scientific and professional competencies through experiential learning programs ï¿½312ï¿½which provide students with opportunities to solve complex problems in the context of real-world situations. Effective experiential learning is essential in preparing future graduates to advance knowledge and technology, enhance quality of life, conserve resources, and revitalize the Nation's economic competitiveness. Such experiential learning opportunities are most effective when they serve to advance decision-making and communication skills as well as technological expertise.  
I11(2) Examples include, but are not limited to, projects which:  
I11(i) Provide opportunities for students to participate in research projects, either as a part of an ongoing research project or in a project designed especially for this program.  
I11(ii) Provide opportunities for students to complete apprenticeships, internships, or similar participatory learning experiences.  
I11(iii) Expand and enrich courses which are of a practicum nature.  
I11(iv) Provide career mentoring experiences that link students with outstanding professionals.  
I11(f) T3Student recruitment and retention.G1T1 (1) The purpose of this need area is to strengthen student recruitment and retention programs in order to promote the future strength of the Nation's scientific and professional work force. The Nation's economic competitiveness and quality of life rest upon the availability of a cadre of outstanding research scientists, university faculty, and other professionals in the food and agricultural sciences. A substantial need exists to supplement efforts to attract increased numbers of academically outstanding students to prepare for careers as food and agricultural scientists and professionals. It is particularly important to augment the racial, ethnic, and gender diversity of the student body in order to promote a robust exchange of ideas and a more effective use of the full breadth of the Nation's intellectual resources.  

I11(2) Each student recipient of monetary support for education costs or developmental purposes under ï¿½1A3406.11(f) must be enrolled at an eligible institution and meet the requirement of an ``eligible participant'' as defined in ï¿½1A3406.2 of this part.  
I11(3) Examples include, but are not limited to:  
I11(i) Special outreach programs for elementary and secondary students as well as parents, counselors, and the general public to broaden awareness of the extensive nature and diversity of career opportunities for graduates in the food and agricultural sciences.  
I11(ii) Special activities and materials to establish more effective linkages with high school science classes.  
I11(iii) Unique or innovative student recruitment activities, materials, and personnel.  
I11(iv) Special retention programs to assure student progression through and completion of an educational program.  
I11(v) Development and dissemination of stimulating career information materials.  
I11(vi) Use of regional or national media to promote food and agricultural sciences higher education.  
I11(vii) Providing financial incentives to enable and encourage students to pursue and complete an undergraduate or graduate degree in an area of the food and agricultural sciences.  


I80ï¿½1A3406.12 
I89Program application materials_teaching.  
I11Program application materials in an application package will be made available to eligible institutions upon request. These materials include the program announcement, the administrative provisions for the program, and the forms needed to prepare and submit teaching grant applications under the program.  


I80ï¿½1A3406.13 
I89Content of a teaching proposal.  
I11(a) T3Proposal cover page.G1T1 (1) Form CSREESï¿½09712, ``Higher Education Proposal Cover Page,'' must be completed in its entirety. Note that providing a Social Security Number is voluntary, but is an integral part of the CSREES information system and will assist in the processing of the proposal.  
I11(2) One copy of the Form CSREESï¿½09712 must contain the pen-and-ink signatures of the project director(s) and authorized organizational representative for the applicant institution.  
ï¿½313ï¿½I11(3) The title of the teaching project shown on the ``Higher Education Proposal Cover Page'' must be brief (80-character maximum) yet represent the major thrust of the project. This information will be used by the Department to provide information to the Congress and other interested parties.  
I11(4) In block 7. of Form CSREESï¿½09712, enter ``1890 Institution Capacity Building Grants Program.''  
I11(5) In block 8.a. of Form CSREESï¿½09712, enter ``Teaching.'' In block 8.b. identify the code for the targeted need area(s) as found on the reverse of the form. If a proposal focuses on multiple targeted need areas, enter each code associated with the project. In block 8.c. identify the major area(s) of emphasis as found on the reverse of the form. If a proposal focuses on multiple areas of emphasis, enter each code associated with the project; however, limit the selection to three areas. This information will be used by program staff for the proper assignment of proposals to reviewers.  
I11(6) In block 9. of Form CSREESï¿½09712, indicate if the proposal is a complementary project proposal or a joint project proposal as defined in ï¿½1A3406.2 of this part. If it is not a complementary project proposal or a joint project proposal, identify it as a regular project proposal.  
I11(7) In block 13. of Form CSREESï¿½09712, indicate if the proposal is a new, first-time submission or if the proposal is a resubmission of a proposal that has been submitted to, but not funded under, the 1890 Institution Capacity Building Grants Program in a previous competition.  
I11(b) T3Table of contents.G1T1 For ease in locating information, each proposal must contain a detailed table of contents just after the Proposal Cover Page. The Table of Contents should include page numbers for each component of the proposal. Pagination should begin immediately following the summary documentation of USDA agency cooperation.  
I11(c) T3USDA agency cooperator.G1T1 To be considered for funding, each proposal must include documentation of cooperation with at least one USDA agency or office. If multiple agencies are involved as cooperators, documentation must be included from each agency. When documenting cooperative arrangements, the following guidelines should be used:  
I11(1) A summary of the cooperative arrangements must immediately follow the Table of Contents. This summary should:  
I11(i) Bear the signatures of the Agency Head (or his/her designated authorized representative) and the university project director; 
I11(ii) Indicate the agency's willingness to commit support for the project; 
I11(iii) Identify the person(s) at the USDA agency who will serve as the liaison or technical contact for the project; 
I11(iv) Describe the degree and nature of the USDA agency's involvement in the proposed project, as outlined in ï¿½1A3406.6(a) of this part, including its role in: 

I11(A) Identifying the need for the project; 
I11(B) Developing a conceptual approach; 
I11(C) Assisting with project design; 
I11(D) Identifying and securing needed agency or other resources (e.g., personnel, grants/contracts; in-kind support, etc.); 
I11(E) Developing the project budget; 
I11(F) Promoting partnerships with other institutions to carry out the project; 
I11(G) Helping the institution launch and manage the project; 
I11(H) Providing technical assistance and expertise; 
I11(I) Providing consultation through site visits, E-mail, conference calls, and faxes; 
I11(J) Participating in project evaluation and dissemination of final project results; and 
I11(K) Seeking other innovative ways to ensure the success of the project and advance the needs of the institution or the agency; and 
I11(v) Describe the expected benefits of the partnership venture for the USDA agency and for the 1890 Institution. 
I11(2) A detailed discussion of these partnership arrangements should be provided in the narrative portion of the proposal, as outlined in paragraph (f)(2)(iv)(C) of this section. 
ï¿½314ï¿½I11(3) Additional documentation, including letters of support or cooperation, may be provided in the Appendix. 
I11(d) T3Project summaryG1T1. (1) A Project Summary should immediately follow the summary documentation of USDA agency cooperation section. The information provided in the Project Summary will be used by the program staff for a variety of purposes, including the proper assignment of proposals to reviewers and providing information to reviewers prior to the peer panel meeting. The name of the institution, the targeted need area(s), and the title of the proposal must be identified exactly as shown on the ``Higher Education Proposal Cover Page.'' 
I11(2) If the proposal is a complementary project proposal, as defined in ï¿½1A3406.2 of this part, indicate such and identify the other complementary project(s) by citing the name of the submitting institution, the title of the project, the project director, and the grant number (if funded in a previous year) exactly as shown on the cover page of the complementary project so that appropriate consideration can be given to the interrelatedness of the proposals in the evaluation process. 
I11(3) If the proposal is a joint project proposal, as defined in ï¿½1A3406.2 of this part, indicate such and identify the other participating institutions and the key faculty member or other individual responsible for coordinating the project at each institution. 
I11(4) The Project Summary should be a concise description of the proposed activity suitable for publication by the Department to inform the general public about awards under the program. The text must not exceed one page, single-spaced. The Project Summary should be a self-contained description of the activity which would result if the proposal is funded by USDA. It should include: The objectives of the project; a synopsis of the plan of operation; a statement of how the project will enhance the teaching capacity of the institution; a description of how the project will strengthen higher education in the food and agricultural sciences in the United States; a description of the partnership efforts between, and the expected benefits for, the USDA agency cooperator(s) and the 1890 Institution; and the plans for disseminating project results. The Project Summary should be written so that a technically literate reader can evaluate the use of Federal funds in support of the project. 
I11(e) T3Resubmission of a proposalG1T1_(1) T3Resubmission of previously unfunded proposalsG1T1. (i) If a proposal has been submitted previously, but was not funded, such should be indicated in block 13. on Form CSREESï¿½09712, ``Higher Education Proposal Cover Page,'' and the following information should be included in the proposal: 
I11(A) The fiscal year(s) in which the proposal was submitted previously; 
I11(B) A summary of the peer reviewers' comments; and 
I11(C) How these comments have been addressed in the current proposal, including the page numbers in the current proposal where the peer reviewers' comments have been addressed. 

I11(ii) This information may be provided as a section of the proposal following the Project Summary and preceding the proposal narrative or it may be placed in the Appendix (see paragraph (j) of this section). In either case, the location of this information should be indicated in the Table of Contents, and the fact that the proposal is a resubmitted proposal should be stated in the proposal narrative. Further, when possible, the information should be presented in tabular format. Applicants who choose to resubmit proposals that were previously submitted, but not funded, should note that resubmitted proposals must compete equally with newly submitted proposals. Submitting a proposal that has been revised based on a previous peer review panel's critique of the proposal does not guarantee the success of the resubmitted proposal. 
I11(2) T3Resubmission of previously funded proposalsG1T1. Recognizing that capacity building is a long-term ongoing process, the 1890 Institution Capacity Building Grants Program is interested in funding subsequent phases of previously funded projects in order to build institutional capacity, and institutions are encouraged to build on a theme over several grant awards. However, proposals that are sequential continuations or new stages of previously ï¿½315ï¿½funded Capacity Building Grants must compete with first-time proposals. Therefore, project directors should thoroughly demonstrate how the project proposed in the current application expands substantially upon a previously funded project (i.e., demonstrate how the new project will advance the former project to the next level of attainment or will achieve expanded goals). The proposal must also show the degree to which the new phase promotes innovativeness and creativity beyond the scope of the previously funded project. Please note that the 1890 Institution Capacity Building Grants Program is not designed to support activities that are essentially repetitive in nature over multiple grant awards. Project directors who have had their projects funded previously are discouraged from resubmitting relatively identical proposals for further funding. 
I11(f) T3Narrative of a teaching proposalG1T1. The narrative portion of the proposal is limited to 20 pages in length. The one-page Project Summary is not included in the 20-page limitation. The narrative must be typed on one side of the page only, using a font no smaller than 12 point, and double-spaced. All margins must be at least one inch. All pages following the summary documentation of USDA agency cooperation must be paginated. It should be noted that peer reviewers will not be required to read beyond 20 pages of the narrative to evaluate the proposal. The narrative should contain the following sections: 
I11(1) T3Potential for advancing the quality of educationG1T1_(i) T3Impact.G1T1 (A) Identify the targeted need area(s). 
I11(B) Clearly state the specific instructional problem or opportunity to be addressed. 
I11(C) Describe how and by whom the focus and scope of the project were determined. Summarize the body of knowledge which substantiates the need for the proposed project. 
I11(D) Describe ongoing or recently completed significant activities related to the proposed project for which previous funding was received under this program. 
I11(E) Discuss how the project will be of value at the State, regional, national, or international level(s). 
I11(F) Discuss how the benefits to be derived from the project will transcend the proposing institution or the grant period. Also discuss the probabilities of its adaptation by other institutions. For example, can the project serve as a model for others? 
I11(ii) T3Continuation plans.G1T1 Discuss the likelihood of, or plans for, continuation or expansion of the project beyond USDA support. For example, does the institution's long-range budget or academic plan provide for the realistic continuation or expansion of the initiative undertaken by this project after the end of the grant period, are plans for eventual self-support built into the project, are plans being made to institutionalize the program if it meets with success, and are there indications of other continuing non-Federal support? 
I11(iii) T3InnovationG1T1. Describe the degree to which the proposal reflects an innovative or non-traditional approach to solving a higher education problem or strengthening the quality of higher education in the food and agricultural sciences. 
I11(iv) T3Products and resultsG1T1. Explain the kinds of results and products expected and their impact on strengthening food and agricultural sciences higher education in the United States, including attracting academically outstanding students and increasing the ethnic, racial, and gender diversity of the Nation's food and agricultural scientific and professional expertise base. 
I11(2) T3Overall approach and cooperative linkagesG1T1_(i) T3Proposed approachG1T1_(A) T3ObjectivesG1T1. Cite and discuss the specific objectives to be accomplished under the project. 
I11(B) T3Plan of operationG1T1. (T31G1T1) Describe procedures for accomplishing the objectives of the project. 
I11(T32G1T1) Describe plans for management of the project to enhance its proper and efficient administration. 

I11(T33G1T1) Describe the way in which resources and personnel will be used to conduct the project.  
I11(C) T3Timetable.G1T1 Provide a timetable for conducting the project. Identify all important project milestones and dates as ï¿½316ï¿½they relate to project start-up, execution, dissemination, evaluation, and close-out.  
I11(ii) T3Evaluation plans.G1T1 (A) Provide a plan for evaluating the accomplishment of stated objectives during the conduct of the project. Indicate the criteria, and corresponding weight of each, to be used in the evaluation process, describe any data to be collected and analyzed, and explain the methodology that will be used to determine the extent to which the needs underlying the project are met. 
I11(B) Provide a plan for evaluating the effectiveness of the end results upon conclusion of the project. Include the same kinds of information requested in paragraph (f) (2)(ii)(A) of this section.  
I11(iii) T3Dissemination plans.G1T1 Discuss plans to disseminate project results and products. Identify target audiences and explain methods of communication. 
I11(iv) T3Partnerships and collaborative efforts.G1T1 (A) Explain how the project will maximize partnership ventures and collaborative efforts to strengthen food and agricultural sciences higher education (e.g., involvement of faculty in related disciplines at the same institution, joint projects with other colleges or universities, or cooperative activities with business or industry). Also explain how it will stimulate academia, the States, or the private sector to join with the Federal partner in enhancing food and agricultural sciences higher education.  
I11(B) Provide evidence, via letters from the parties involved, that arrangements necessary for collaborative partnerships or joint initiatives have been discussed and realistically can be expected to come to fruition, or actually have been finalized contingent on an award under this program. Letters must be signed by an official who has the authority to commit the resources of the organization. Such letters should be referenced in the plan of operation, but the actual letters should be included in the Appendix section of the proposal. Any potential conflict(s) of interest that might result from the proposed collaborative arrangements must be discussed in detail. Proposals which indicate joint projects with other institutions must state which proposer is to receive any resulting grant award, since only one submitting institution can be the recipient of a project grant under one proposal.  
I11(C) Explain how the project will create a new or enhance an existing partnership between the USDA agency cooperator(s) and the 1890 Institution(s). This section should expand upon the summary information provided in the documentation of USDA agency cooperation section, as outlined in paragraph (c)(1) of this section. This is particularly important because the focal point of attention in the peer review process is the proposal narrative. Therefore, a comprehensive discussion of the partnership effort between USDA and the 1890 Institution should be provided.  
I11(3) T3Institutional capacity buildingG1T1_(i) T3Institutional enhancement.G1T1 Explain how the proposed project will strengthen the teaching capacity, as defined in ï¿½1A3406.2 of this part, of the applicant institution and, if applicable, any other institutions assuming a major role in the conduct of the project. For example, describe how the proposed project is intended to strengthen the institution's academic infrastructure by expanding the current faculty's expertise base, advancing the scholarly quality of the institution's academic programs, enriching the racial, ethnic, or gender diversity of the student body, helping the institution establish itself as a center of excellence in a particular field of education, helping the institution maintain or acquire state-of-the-art scientific instrumentation or library collections for teaching, or enabling the institution to provide more meaningful student experiential learning opportunities.  

I11(ii) T3Institutional commitmentG1T1. (A) Discuss the institution's commitment to the project and its successful completion. Provide, as relevant, appropriate documentation in the Appendix. Substantiate that the institution attributes a high priority to the project.  
I11(B) Discuss how the project will contribute to the achievement of the institution's long-term (five- to ten-year) goals and how the project will help satisfy the institution's high-priority objectives. Show how this project is ï¿½317ï¿½linked to and supported by the institution's strategic plan.  
I11(C) Discuss the commitment of institutional resources to the project. Show that the institutional resources to be made available to the project will be adequate, when combined with the support requested from USDA, to carry out the activities of the project and represent a sound commitment by the institution. Discuss institutional facilities, equipment, computer services, and other appropriate resources available to the project.  
I11(g) T3Key personnel.G1T1 A Form CSREESï¿½09708, ``Summary Vita_Teaching Proposal,'' should be included for each key person associated with the project.  
I11(h) T3Budget and cost-effectivenessG1T1_(1) T3Budget form.G1T1 (i) Prepare Form CSREESï¿½09713, ``Higher Education Budget,'' in accordance with instructions provided with the form. Proposals may request support for a period to be identified in each year's program announcement. A budget form is required for each year of requested support. In addition, a summary budget is required detailing the requested total support for the overall project period. Form CSREESï¿½09713 may be reproduced as needed by proposers. Funds may be requested under any of the categories listed on the form, provided that the item or service for which support is requested is allowable under the authorizing legislation, the applicable Federal cost principles, the administrative provisions in this part, and can be justified as necessary for the successful conduct of the proposed project.  
I11(ii) The approved negotiated instruction rate or the maximum rate allowed by law should be used when computing indirect costs. If a reduced rate of indirect costs is voluntarily requested from USDA, the remaining allowable indirect costs may be used as matching funds.  
I11(2) T3Matching funds.G1T1 When documenting matching contributions, use the following guidelines:  
I11(i) When preparing the column entitled ``Applicant Contributions To Matching Funds'' of Form CSREESï¿½09713, only those costs to be contributed by the applicant for the purposes of matching should be shown. The total amount of this column should be indicated in item M.  
I11(ii) In item N of Form CSREESï¿½09713, show a total dollar amount for Cash Contributions from both the applicant and any third parties; also show a total dollar amount (based on current fair market value) for Non-cash Contributions from both the applicant and any third parties.  
I11(iii) To qualify for any incentive benefits stemming from matching support or to satisfy any cost sharing requirements, proposals must include written verification of any actual commitments of matching support (including both cash and non-cash contributions) from third parties. Written verification means_ 
I11(A) For any third party cash contributions, a separate pledge agreement for each donation, signed by the authorized organizational representative(s) of the donor organization (or by the donor if the gift is from an individual) and the applicant institution, which must include: 
I11(T31G1T1) The name, address, and telephone number of the donor; 
I11(T32G1T1) The name of the applicant institution; 
I11(T33G1T1) The title of the project for which the donation is made; 
I11(T34G1T1) The dollar amount of the cash donation; and 
I11(T35G1T1) A statement that the donor will pay the cash contribution during the grant period; and  
I11(B) For any third party non-cash contributions, a separate pledge agreement for each contribution, signed by the authorized organizational representative(s) of the donor organization (or by the donor if the gift is from an individual) and the applicant institution, which must include: 
I11(T31G1T1) The name, address, and telephone number of the donor; 
I11(T32G1T1) The name of the applicant institution; 
I11(T33G1T1) The title of the project for which the donation is made; 
I11(T34G1T1) A good faith estimate of the current fair market value of the non-cash contribution; and 
I11(T35G1T1) A statement that the donor will make the contribution during the grant period.  
ï¿½318ï¿½I11(iv) All pledge agreements must be placed in the proposal immediately following Form CSREESï¿½09713. The sources and amounts of all matching support from outside the applicant institution should be summarized in the Budget Narrative section of the proposal.  
I11(v) Applicants should refer to OMB Circulars Aï¿½09110, ``Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals and Other Non-profit Organizations,'' and Aï¿½0921, ``Cost Principles for Educational Institutions,'' for further guidance and other requirements relating to matching and allowable costs.  
I11(3) T3Chart on shared budget for joint project proposal.G1T1 (i) For a joint project proposal, a plan must be provided indicating how funds will be distributed to the participating institutions. The budget section of a joint project proposal should include a chart indicating: 

I11(A) The names of the participating institutions; 
I11(B) the amount of funds to be disbursed to those institutions; and 
I11(C) the way in which such funds will be used in accordance with items A through L of Form CSREESï¿½09713, ``Higher Education Budget.''  
I11(ii) If a proposal is not for a joint project, such a chart is not required.  
I11(4) T3Budget narrative.G1T1 (i) Discuss how the budget specifically supports the proposed project activities. Explain how each budget item (such as salaries and wages for professional and technical staff, student stipends/scholarships, travel, equipment, etc.) is essential to achieving project objectives.  
I11(ii) Justify that the total budget, including funds requested from USDA and any matching support provided, will be adequate to carry out the activities of the project. Provide a summary of sources and amounts of all third party matching support.  
I11(iii) Justify the project's cost-effectiveness. Show how the project maximizes the use of limited resources, optimizes educational value for the dollar, achieves economies of scale, or leverages additional funds. For example, discuss how the project has the potential to generate a critical mass of expertise and activity focused on a targeted need area or promote coalition building that could lead to future ventures.  
I11(iv) Include the percentage of time key personnel will work on the project, both during the academic year and summer. When salaries of university project personnel will be paid by a combination of USDA and institutional funds, the total compensation must not exceed the faculty member's regular annual compensation. In addition, the total commitment of time devoted to the project, when combined with time for teaching and research duties, other sponsored agreements, and other employment obligations to the institution, must not exceed 100 percent of the normal workload for which the employee is compensated, in accordance with established university policies and applicable Federal cost principles.  
I11(v) If the proposal addresses more than one targeted need area (e.g., student experiential learning and instruction delivery systems), estimate the proportion of the funds requested from USDA that will support each respective targeted need area.  
I11(i) T3Current and pending support.G1T1 Each applicant must complete Form CSREESï¿½09663, ``Current and Pending Support,'' identifying any other current public- or private-sponsored projects, in addition to the proposed project, to which key personnel listed in the proposal under consideration have committed portions of their time, whether or not salary support for the person(s) involved is included in the budgets of the various projects. This information should also be provided for any pending proposals which are currently being considered by, or which will be submitted in the near future to, other possible sponsors, including other USDA programs or agencies. Concurrent submission of identical or similar projects to other possible sponsors will not prejudice the review or evaluation of a project under this program.  
I11(j) T3Appendix.G1T1 Each project narrative is expected to be complete in itself and to meet the 20-page limitation. Inclusion of material in an Appendix should not be used to circumvent the 20-page limitation of the proposal narrative. However, in those instances where inclusion of supplemental information is ï¿½319ï¿½necessary to guarantee the peer review panel's complete understanding of a proposal or to illustrate the integrity of the design or a main thesis of the proposal, such information may be included in an Appendix. Examples of supplemental material are photographs, journal reprints, brochures and other pertinent materials which are deemed to be illustrative of major points in the narrative but unsuitable for inclusion in the proposal narrative itself. Information on previously submitted proposals may also be presented in the Appendix (refer to paragraph(e) of this section). When possible, information in the Appendix should be presented in tabular format. A complete set of the Appendix material must be attached to each copy of the grant application submitted. The Appendix must be identified with the title of the project as it appears on Form CSREESï¿½09712 of the proposal and the name(s) of the project director(s). The Appendix must be referenced in the proposal narrative.  
I56Subpart D_Review and Evaluation of a Teaching Proposal  


I80ï¿½1A3406.14 
I89Proposal review_teaching.  
I11The proposal evaluation process includes both internal staff review and merit evaluation by peer review panels comprised of scientists, educators, business representatives, and Government officials who are highly qualified to render expert advice in the areas supported. Peer review panels will be selected and structured to provide optimum expertise and objective judgment in the evaluation of proposals.  


I80ï¿½1A3406.15 
I89Evaluation criteria for teaching proposals.  
I11The maximum score a teaching proposal can receive is 150 points. Unless otherwise stated in the annual solicitation published in the T4Federal RegisterG1T1, the peer review panel will consider the following criteria and weights to evaluate proposals submitted:

c2,L2,tp0,i1,s200,xls48 I95  h1Evaluation criterion  h1Weight     
j
I22(a) Potential for advancing the quality of education:  

I13This criterion is used to assess the likelihood that the project will have a substantial impact upon and advance the quality of food and agricultural sciences higher education by strengthening institutional capacities through promoting education reform to meet clearly delineated needs.  

I05xl(1) Impact_Does the project address a targeted need area(s)? Is the problem or opportunity clearly documented? Does the project address a State, regional, national, or international problem or opportunity? Will the benefits to be derived from the project transcend the applicant institution or the grant period? Is it probable that other institutions will adapt this project for their own use? Can the project serve as a model for others? D15 points. 

I05xl(2) Continuation plans_Are there plans for continuation or expansion of the project beyond USDA support with the use of institutional funds? Are there indications of external, non-Federal support? Are there realistic plans for making the project self-supporting? D10 points. 

I05xl(3) Innovation_Are significant aspects of the project based on an innovative or a non-traditional approach toward solving a higher education problem or strengthening the quality of higher education in the food and agricultural sciences? If successful, is the project likely to lead to education reform? D10 points. 

I05xl(4) Products and results_Are the expected products and results of the project clearly defined and likely to be of high quality? Will project results be of an unusual or unique nature? Will the project contribute to a better understanding of or an improvement in the quality, distribution, or effectiveness of the Nation's food and agricultural scientific and professional expertise base, such as increasing the participation of women and minorities? D15 points.  

I22(b) Overall approach and cooperative linkages:  

I13This criterion relates to the soundness of the proposed approach and the quality of the partnerships likely to evolve as a result of the project.  

I05xl(1) Proposed approach_Do the objectives and plan of operation appear to be sound and appropriate relative to the targeted need area(s) and the impact anticipated? Are the procedures managerially, educationally, and scientifically sound? Is the overall plan integrated with or does it expand upon other major efforts to improve the quality of food and agricultural sciences higher education? Does the timetable appear to be readily achievable? D15 points.  

I05xl(2) Evaluation_Are the evaluation plans adequate and reasonable? Do they allow for continuous or frequent feedback during the life of the project? Are the individuals involved in project evaluation skilled in evaluation strategies and procedures? Can they provide an objective evaluation? Do evaluation plans facilitate the measurement of project progress and outcomes? D5 points. 

I05xl(3) Dissemination_Does the proposed project include clearly outlined and realistic mechanisms that will lead to widespread dissemination of project results, including national electronic communication systems, publications, presentations at professional conferences, or use by faculty development or research/teaching skills workshops? D5 points. 

ï¿½320ï¿½I05xl(4) Partnerships and collaborative efforts_Does the project have significant potential for advancing cooperative ventures between the applicant institution and a USDA agency? Does the project workplan include an effective role for the cooperating USDA agency(s)? Will the project expand partnership ventures among disciplines at a university, between colleges and universities, or with the private sector? Will the project lead to long-term relationships or cooperative partnerships that are likely to enhance program quality or supplement resources available to food and agricultural sciences higher education? D15 points.  

I22(c) Institutional capacity building:  

I13This criterion relates to the degree to which the project will strengthen the teaching capacity of the applicant institution. In the case of a joint project proposal, it relates to the degree to which the project will strengthen the teaching capacity of the applicant institution and that of any other institution assuming a major role in the conduct of the project.  

I05xl(1) Institutional enhancement_Will the project help the institution to: Expand the current faculty's expertise base; attract, hire, and retain outstanding teaching faculty; advance and strengthen the scholarly quality of the institution's academic programs; enrich the racial, ethnic, or gender diversity of the faculty and student body; recruit students with higher grade point averages, higher standardized test scores, and those who are more committed to graduation; become a center of excellence in a particular field of education and bring it greater academic recognition; attract outside resources for academic programs; maintain or acquire state-of-the-art scientific instrumentation or library collections for teaching; or provide more meaningful student experiential learning opportunities? D15 points.  

I05xl(2) Institutional commitment_Is there evidence to substantiate that the institution attributes a high-priority to the project, that the project is linked to the achievement of the institution's long-term goals, that it will help satisfy the institution's high-priority objectives, or that the project is supported by the institution's strategic plans? Will the project have reasonable access to needed resources such as instructional instrumentation, facilities, computer services, library and other instruction support resources? D15 points. 

I01xl(d) Personnel Resources: This criterion relates to the number and qualifications of the key persons who will carry out the project. Are designated project personnel qualified to carry out a successful project? Are there sufficient numbers of personnel associated with the project to achieve the stated objectives and the anticipated outcomes? D10 points.  

I22(e) Budget and cost-effectiveness:  

I13This criterion relates to the extent to which the total budget adequately supports the project and is cost-effective.  

I05xl(1) Budget_Is the budget request justifiable? Are costs reasonable and necessary? Will the total budget be adequate to carry out project activities? Are the source(s) and amount(s) of non-Federal matching support clearly identified and appropriately documented? For a joint project proposal, is the shared budget explained clearly and in sufficient detail? D10 points. 

I05xl(2) Cost-effectiveness_Is the proposed project cost-effective? Does it demonstrate a creative use of limited resources, maximize educational value per dollar of USDA support, achieve economies of scale, leverage additional funds or have the potential to do so, focus expertise and activity on a targeted need area, or promote coalition building for current or future ventures? D5 points. 

I01xl(f) Overall quality of proposal: This criterion relates to the degree to which the proposal complies with the application guidelines and is of high quality. Is the proposal enhanced by its adherence to instructions (table of contents, organization, pagination, margin and font size, the 20-page limitation, appendices, etc.); accuracy of forms; clarity of budget narrative; well prepared vitae for all key personnel associated with the project; and presentation (are ideas effectively presented, clearly articulated, and thoroughly explained, etc.)? D5 points.  

e


I56Subpart E_Preparation of a Research Proposal


I80ï¿½1A3406.16 
I89Scope of a research proposal.
I11The research component of the program will support projects that address high-priority research initiatives in areas such as those illustrated in this section where there is a present or anticipated need for increased knowledge or capabilities or in which it is feasible for applicants to develop programs recognized for their excellence. Applicants are also encouraged to include in their proposals a library enhancement component related to the initiative(s) for which they have prepared their proposals.
I11(a) T3Studies and experimentation in food and agricultural sciences.G1T1 (1) The purpose of this initiative is to advance the body of knowledge in those basic and applied natural and social sciences that comprise the food and agricultural sciences.
I11(2) Examples include, but are not limited to:
I11(i) Conduct plant or animal breeding programs to develop better crops, forests, or livestock (e.g., more disease resistant, more productive, yielding higher quality products).
ï¿½321ï¿½I11(ii) Conceive, design, and evaluate new bioprocessing techniques for eliminating undesirable constituents from or adding desirable ones to food products.
I11(iii) Propose and evaluate ways to enhance utilization of the capabilities and resources of food and agricultural institutions to promote rural development (e.g., exploitation of new technologies by small rural businesses).
I11(iv) Identify control factors influencing consumer demand for agricultural products.
I11(v) Analyze social, economic, and physiological aspects of nutrition, housing, and life-style choices, and of community strategies for meeting the changing needs of different population groups.
I11(vi) Other high-priority areas such as human nutrition, sustainable agriculture, biotechnology, agribusiness management and marketing, and aquaculture.
I11(b) T3Centralized research support systems.G1T1 (1) The purpose of this initiative is to establish centralized support systems to meet national needs or serve regions or clientele that cannot otherwise afford or have ready access to the support in question, or to provide such support more economically thereby freeing up resources for other research uses.
I11(2) Examples include, but are not limited to:
I11(i) Storage, maintenance, characterization, evaluation and enhancement of germplasm for use by animal and plant breeders, including those using the techniques of biotechnology.
I11(ii) Computerized data banks of important scientific information (e.g., epidemiological, demographic, nutrition, weather, economic, crop yields, etc.).
I11(iii) Expert service centers for sophisticated and highly specialized methodologies (e.g., evaluation of organoleptic and nutritional quality of foods, toxicology, taxonomic identifications, consumer preferences, demographics, etc.).
I11(c) T3Technology delivery systems.G1T1 (1) The purpose of this initiative is to promote innovations and improvements in the delivery of benefits of food and agricultural sciences to producers and consumers, particularly those who are currently disproportionately low in receipt of such benefits.
I11(2) Examples include, but are not limited to:
I11(i) Computer-based decision support systems to assist small-scale farmers to take advantage of relevant technologies, programs, policies, etc.
I11(ii) Efficacious delivery systems for nutrition information or for resource management assistance for low-income families and individuals.
I11(d) T3Other creative proposals.G1T1 The purpose of this initiative is to encourage other creative proposals, outside the areas previously outlined, that are designed to provide needed enhancement of the Nation's food and agricultural research system.


I80ï¿½1A3406.17 
I89Program application materials_research.
I11Program application materials in an application package will be made available to eligible institutions upon request. These materials include the program announcement, the administrative provisions for the program, and the forms needed to prepare and submit research grant applications under the program.



I80ï¿½1A3406.18 
I89Content of a research proposal.
I11(a) T3Proposal cover page.G1T1 (1) Form CSREESï¿½09712, ``Higher Education Proposal Cover Page,'' must be completed in its entirety. Note that providing a Social Security Number is voluntary, but is an integral part of the CSREES information system and will assist in the processing of the proposal.
I11(2) One copy of Form CSREESï¿½09712 must contain the pen-and-ink signatures of the principal investigator(s) and Authorized Organizational Representative for the applicant institution.
I11(3) The title of the research project shown on the ``Higher Education Proposal Cover Page'' must be brief (80-character maximum) yet represent the major thrust of the project. This information will be used by the Department to provide information to the Congress and other interested parties.
I11(4) In block 7. of Form CSREESï¿½09712, enter ``Capacity Building Grants Program.''
ï¿½322ï¿½I11(5) In block 8.a. of Form CSREESï¿½09712, enter ``Research.'' In block 8.b. identify the code of the targeted need area(s) as found on the reverse of the form. If a proposal focuses on multiple targeted need areas, enter each code associated with the project. In block 8.c. identify the major area(s) of emphasis as found on the reverse of the form. If a proposal focuses on multiple areas of emphasis, enter each code associated with the project; however, please limit your selection to three areas. This information will be used by the program staff for the proper assignment of proposals to reviewers.
I11(6) In block 9. of Form CSREESï¿½09712, indicate if the proposal is a complementary project proposal or joint project proposal as defined in ï¿½1A3406.2 of this part. If it is not a complementary project proposal or a joint project proposal, identify it as a regular proposal.
I11(7) In block 13. of Form CSREESï¿½09712, indicate if the proposal is a new, first-time submission or if the proposal is a resubmission of a proposal that has been submitted to, but not funded under the 1890 Institution Capacity Building Grants Program in a previous competition.
I11(b) T3Table of contents.G1T1 For ease of locating information, each proposal must contain a detailed table of contents just after the Proposal Cover Page. The Table of Contents should include page numbers for each component of the proposal. Pagination should begin immediately following the summary documentation of USDA agency cooperation.
I11(c) T3USDA agency cooperator.G1T1 To be considered for funding, each proposal must include documentation of cooperation with at least one USDA agency or office. If multiple agencies are involved as cooperators, documentation must be included from each agency. When documenting cooperative arrangements, the following guidelines should be used:
I11(1) A summary of the cooperative arrangements must immediately follow the Table of Contents. This summary should:
I11(i) Bear the signatures of the Agency Head (or his/her designated authorized representative) and the university project director;
I11(ii) Indicate the agency's willingness to commit support for the project;
I11(iii) Identify the person(s) at the USDA agency who will serve as the liaison or technical contact for the project;
I11(iv) Describe the degree and nature of the USDA agency's involvement in the proposed project, as outlined in ï¿½1A3406.6(a) of this part, including its role in:
I11(A) Identifying the need for the project;
I11(B) Developing a conceptual approach;
I11(C) Assisting with project design;
I11(D) Identifying and securing needed agency or other resources (e.g., personnel, grants/contracts; in-kind support, etc.);
I11(E) Developing the project budget;
I11(F) Promoting partnerships with other institutions to carry out the project;
I11(G) Helping the institution launch and manage the project;
I11(H) Providing technical assistance and expertise;
I11(I) Providing consultation through site visits, E-mail, conference calls, and faxes;
I11(J) Participating in project evaluation and dissemination of final project results; and
I11(K) Seeking other innovative ways to ensure the success of the project and advance the needs of the institution or the agency; and
I11(v) Describe the expected benefits of the partnership venture for the USDA agency and for the 1890 Institution.
I11(2) A detailed discussion of these partnership arrangements should be provided in the narrative portion of the proposal, as outlined in paragraph (f)(2)(iv)(C) of this section.
I11(3) Additional documentation, including letters of support or cooperation, may be provided in the Appendix.
I11(d) T3Project summary.G1T1 (1) A Project Summary should immediately follow the summary documentation of USDA agency cooperation. The information provided in the Project Summary will be used by the program staff for a variety of purposes, including the proper assignment of proposals to peer reviewers and providing information to peer ï¿½323ï¿½reviewers prior to the peer panel meeting. The name of the institution, the targeted need area(s), and the title of the proposal must be identified exactly as shown on the ``Higher Education Proposal Cover Page.''

I11(2) If the proposal is a complementary project proposal, as defined in ï¿½1A3406.2 of this part, clearly state this fact and identify the other complementary project(s) by citing the name of the submitting institution, the title of the project, the principal investigator, and the grant number (if funded in a previous year) exactly as shown on the cover page of the complementary project so that appropriate consideration can be given to the interrelatedness of the proposals in the evaluation process.  
I11(3) If the proposal is a joint project proposal, as defined in ï¿½1A3406.2 of this part, indicate such and identify the other participating institutions and the key person responsible for coordinating the project at each institution.  
I11(4) The Project Summary should be a concise description of the proposed activity suitable for publication by the Department to inform the general public about awards under the program. The text should not exceed one page, single-spaced. The Project Summary should be a self-contained description of the activity which would result if the proposal is funded by USDA. It should include: The objective of the project, a synopsis of the plan of operation, a statement of how the project will enhance the research capacity of the institution, a description of how the project will enhance research in the food and agricultural sciences, and a description of the partnership efforts between, and the expected benefits for, the USDA agency cooperator(s) and the 1890 Institution and the plans for disseminating project results. The Project Summary should be written so that a technically literate reader can evaluate the use of Federal funds in support of the project.  
I11(e) T3Resubmission of a proposalG1T1_(1) T3Resubmission of previously unfunded proposals.G1T1 (i) If the proposal has been submitted previously, but was not funded, such should be indicated in block 13. on Form CSREESï¿½09712, ``Higher Education Proposal Cover Page,'' and the following information should be included in the proposal: 
I11(A) The fiscal year(s) in which the proposal was submitted previously; 
I11(B) A summary of the peer reviewers' comments; and 
I11(C) How these comments have been addressed in the current proposal, including the page numbers in the current proposal where the peer reviewers' comments have been addressed.  
I11(ii) This information may be provided as a section of the proposal following the Project Summary and preceding the proposal narrative or it may be placed in the Appendix (see paragraph (j) of this section). In either case, the location of this information should be indicated in the Table of Contents, and the fact that the proposal is a resubmitted proposal should be stated in the proposal narrative. Further, when possible, the information should be presented in a tabular format. Applicants who choose to resubmit proposals that were previously submitted, but not funded, should note that resubmitted proposals must compete equally with newly submitted proposals. Submitting a proposal that has been revised based on a previous peer review panel's critique of the proposal does not guarantee the success of the resubmitted proposal.  
I11(2) T3Resubmission of previously funded proposals.G1T1 Recognizing that capacity building is a long-term ongoing process, the 1890 Institution Capacity Building Grants Program is interested in funding subsequent phases of previously funded projects in order to build institutional capacity, and institutions are encouraged to build on a theme over several grant awards. However, proposals that are sequential continuations or new stages of previously funded Capacity Building Grants must compete with first-time proposals. Therefore, principal investigators should thoroughly demonstrate how the project proposed in the current application expands substantially upon a previously funded project (i.e., demonstrate how the new project will advance the former project to the next level of attainment or will achieve expanded goals). The proposal must also show the degree to which the new ï¿½324ï¿½phase promotes innovativeness and creativity beyond the scope of the previously funded project. Please note that the 1890 Institution Capacity Building Grants Program is not designed to support activities that are essentially repetitive in nature over multiple grant awards. Principal investigators who have had their projects funded previously are discouraged from resubmitting relatively identical proposals for future funding. 
I11(f) T3Narrative of a research proposal.G1T1 The narrative portion of the proposal is limited to 20 pages in length. The one-page Project Summary is not included in the 20-page limitation. The narrative must be typed on one side of the page only, using a font no smaller than 12 point, and double-spaced. All margins must be at least one inch. All pages following the summary documentation of USDA agency cooperation must be paginated. It should be noted that peer reviewers will not be required to read beyond 20 pages of the narrative to evaluate the proposal. The narrative should contain the following sections:  
I11(1) T3Significance of the problemG1T1_(i) T3ImpactG1T1_(A) T3Identification of the problem or opportunity.G1T1 Clearly identify the specific problem or opportunity to be addressed and present any research questions or hypotheses to be examined.  

I11(B) T3Rationale.G1T1 Provide a rationale for the proposed approach to the problem or opportunity and indicate the part that the proposed project will play in advancing food and agricultural research and knowledge. Discuss how the project will be of value and importance at the State, regional, national, or international level(s). Also discuss how the benefits to be derived from the project will transcend the proposing institution or the grant period.  
I11(C) T3Literature review.G1T1 Include a comprehensive summary of the pertinent scientific literature. Citations may be footnoted to a bibliography in the Appendix. Citations should be accurate, complete, and adhere to an acceptable journal format. Explain how such knowledge (or previous findings) is related to the proposed project.  
I11(D) T3Current research and related activities.G1T1 Describe the relevancy of the proposed project to current research or significant research support activities at the proposing institution and any other institution participating in the project, including research which may be as yet unpublished.  
I11(ii) T3Continuation plans.G1T1 Discuss the likelihood or plans for continuation or expansion of the project beyond USDA support. Discuss, as applicable, how the institution's long-range budget, and administrative and academic plans, provide for the realistic continuation or expansion of the line of research or research support activity undertaken by this project after the end of the grant period. For example, are there plans for securing non-Federal support for the project? Is there any potential for income from patents, technology transfer or university-business enterprises resulting from the project? Also discuss the probabilities of the proposed activity or line of inquiry being pursued by researchers at other institutions.  
I11(iii) T3Innovation.G1T1 Describe the degree to which the proposal reflects an innovative or non-traditional approach to a food and agricultural research initiative.  
I11(iv) T3Products and results.G1T1 Explain the kinds of products and results expected and their impact on strengthening food and agricultural sciences higher education in the United States, including attracting academically outstanding students or increasing the ethnic, racial, and gender diversity of the Nation's food and agricultural scientific and professional expertise base.  
I11(2) T3Overall approach and cooperative linkagesG1T1_(i) T3ApproachG1T1_(A) T3Objectives.G1T1 Cite and discuss the specific objectives to be accomplished under the project.  
I11(B) T3Plan of operation.G1T1 The procedures or methodologies to be applied to the proposed project should be explicitly stated. This section should include, but not necessarily be limited to a description of:  
I11(T31G1T1) The proposed investigations, experiments, or research support enhancements in the sequence in which they will be carried out.  
I11(T32G1T1) Procedures and techniques to be employed, including their feasibility.  
I11(T33G1T1) Means by which data will be collected and analyzed.  
ï¿½325ï¿½I11(T34G1T1) Pitfalls that might be encountered.  
I11(T35G1T1) Limitations to proposed procedures.  
I11(C) T3Timetable.G1T1 Provide a timetable for execution of the project. Identify all important research milestones and dates as they relate to project start-up, execution, dissemination, evaluation, and close-out.  
I11(ii) T3Evaluation plans.G1T1 (A) Provide a plan for evaluating the accomplishment of stated objectives during the conduct of the project. Indicate the criteria, and corresponding weight of each, to be used in the evaluation process, describe any performance data to be collected and analyzed, and explain the methodologies that will be used to determine the extent to which the needs underlying the project are being met.  

I11(B) Provide a plan for evaluating the effectiveness of the end results upon conclusion of the project. Include the same kinds of information requested in paragraph (f)(2)(ii)(A) of this section. 
I11(iii) Dissemination plans. Provide plans for disseminating project results and products including the possibilities for publications. Identify target audiences and explain methods of communication. 
I11(iv) T3Partnerships and collaborative efforts.G1T1 (A) Explain how the project will maximize partnership ventures and collaborative efforts to strengthen food and agricultural sciences higher education (e.g., involvement of faculty in related disciplines at the same institution, joint projects with other colleges or universities, or cooperative activities with business or industry). Also explain how it will stimulate academia, the States, or the private sector to join with the Federal partner in enhancing food and agricultural sciences higher education. 
I11(B) Provide evidence, via letters from the parties involved, that arrangements necessary for collaborative partnerships or joint initiatives have been discussed and realistically can be expected to come to fruition, or actually have been finalized contingent on an award under this program. Letters must be signed by an official who has the authority to commit the resources of the organization. Such letters should be referenced in the plan of operation, but the actual letters should be included in the Appendix section of the proposal. Any potential conflict(s) of interest that might result from the proposed collaborative arrangements must be discussed in detail. Proposals which indicate joint projects with other institutions must state which proposer is to receive any resulting grant award, since only one submitting institution can be the recipient of a project grant under one proposal. 
I11(C) Explain how the project will create a new or enhance an existing partnership between the USDA agency cooperator(s) and the 1890 Institution(s). This section should expand upon the summary information provided in the documentation of USDA agency cooperation section, as outlined in paragraph (c)(1) of this section. This is particularly important because the focal point of attention in the peer review process is the proposal narrative. Therefore, a comprehensive discussion of the partnership effort between USDA and the 1890 Institution should be provided. 
I11(3) T3Institutional capacity buildingG1T1_(i) T3Institutional enhancement.G1T1 Explain how the proposed project will strengthen the research capacity, as defined in ï¿½1A3406.2 of this part, of the applicant institution and, if applicable, any other institutions assuming a major role in the conduct of the project. For example, describe how the proposed project is intended to strengthen the institution's research infrastructure by advancing the expertise of the current faculty in the natural or social sciences; providing a better research environment, state-of-the-art equipment, or supplies; enhancing library collections; or enabling the institution to provide efficacious organizational structures and reward systems to attract and retain first-rate research faculty and students_particularly those from underrepresented groups. 
I11(ii) T3Institutional commitment.G1T1 (A) Discuss the institution's commitment to the project and its successful completion. Provide, as relevant, appropriate documentation in the Appendix. Substantiate that the institution attributes a high priority to the project. 
ï¿½326ï¿½I11(B) Discuss how the project will contribute to the achievement of the institution's long-term (five- to ten-year) goals and how the project will help satisfy the institution's high-priority objectives. Show how this project is linked to and supported by the institution's strategic plan. 
I11(C) Discuss the commitment of institutional resources to the project. Show that the institutional resources to be made available to the project will be adequate, when combined with the support requested from USDA, to carry out the activities of the project and represent a sound commitment by the institution. Discuss institutional facilities, equipment, computer services, and other appropriate resources available to the project. 
I11(g) T3Key personnel.G1T1 A Form CSREESï¿½09710, ``Summary Vita_Research Proposal,'' should be included for each key person associated with the project. 
I11(h) T3Budget and cost-effectivenessG1T1_(1) T3Budget form.G1T1 (i) Prepare Form CSREESï¿½09713, ``Higher Education Budget,'' in accordance with instructions provided with the form. Proposals may request support for a period to be identified in each year's program announcement. A budget form is required for each year of requested support. In addition, a summary budget is required detailing the requested total support for the overall project period. Form CSREESï¿½09713 may be reproduced as needed by proposers. Funds may be requested under any of the categories listed on the form, provided that the item or service for which support is requested is allowable under the authorizing legislation, the applicable Federal cost principles, the administrative provisions in this part, and can be justified as necessary for the successful conduct of the proposed project. 

I11(ii) The approved negotiated research rate or the maximum rate allowed by law should be used when computing indirect costs. If a reduced rate of indirect costs is voluntarily requested from USDA, the remaining allowable indirect costs may be used as matching funds. In the event that a proposal reflects an incorrect indirect cost rate and is recommended for funding, the correct rate will be applied to the approved budget in the grant award. 
I11(2) T3Matching funds.G1T1 When documenting matching contributions, use the following guidelines: 
I11(i) When preparing the column entitled ``Applicant Contributions To Matching Funds'' of Form CSREESï¿½09713, only those costs to be contributed by the applicant for the purposes of matching should be shown. The total amount of this column should be indicated in item M. 
I11(ii) In item N of Form CSREESï¿½09713, show a total dollar amount for Cash Contributions from both the applicant and any third parties; also show a total dollar amount (based on current fair market value) for Non-cash Contributions from both the applicant and any third parties. 
I11(iii) To qualify for any incentive benefits stemming from matching support or to satisfy any cost sharing requirements, proposals must include written verification of any actual commitments of matching support (including both cash and non-cash contributions) from third parties. Written verification means_ 
I11(A) For any third party cash contributions, a separate pledge agreement for each donation, signed by the authorized organizational representative(s) of the donor organization (or by the donor if the gift is from an individual) and the applicant institution, which must include: 
I11(T31G1T1) The name, address, and telephone number of the donor; 
I11(T32G1T1) The name of the applicant institution; 
I11(T33G1T1) The title of the project for which the donation is made; 
I11(T34G1T1) The dollar amount of the cash donation; and 
I11(T35G1T1) A statement that the donor will pay the cash contribution during the grant period; and 
I11(B) For any third party non-cash contributions, a separate pledge agreement for each contribution, signed by the authorized organizational representative(s) of the donor organization (or by the donor if the gift is from an individual) and the applicant institution, which must include: 
I11(T31G1T1) The name, address, and telephone number of the donor; 
I11(T32G1T1) The name of the applicant institution; 
ï¿½327ï¿½I11(T33G1T1) The title of the project for which the donation is made; 
I11(T34G1T1) A good faith estimate of the current fair market value of the non-cash contribution; and 
I11(T35G1T1) A statement that the donor will make the contribution during the grant period. 
I11(iv) All pledge agreements must be placed in the proposal immediately following Form CSREESï¿½09713. The sources and amounts of all matching support from outside the applicant institution should be summarized in the Budget Narrative section of the proposal. 
I11(v) Applicants should refer to OMB Circulars Aï¿½09110, ``Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals and Other Non-profit Organizations,'' and Aï¿½0921, ``Cost Principles for Educational Institutions,'' for further guidance and other requirements relating to matching and allowable costs. 
I11(3) T3Chart on shared budget for joint project proposal.G1T1 (i) For a joint project proposal, a plan must be provided indicating how funds will be distributed to the participating institutions. The budget section of a joint project proposal should include a chart indicating: 
I11(A) The names of the participating institutions; 
I11(B) the amount of funds to be disbursed to those institutions; and 
I11(C) the way in which such funds will be used in accordance with items A through L of Form CSREESï¿½09713, ``Higher Education Budget.'' 
I11(ii) If a proposal is not for a joint project, such a chart is not required. 
I11(4) T3Budget narrative.G1T1 (i) Discuss how the budget specifically supports the proposed project activities. Explain how each budget item (such as salaries and wages for professional and technical staff, student workers, travel, equipment, etc.) is essential to achieving project objectives. 
I11(ii) Justify that the total budget, including funds requested from USDA and any matching support provided, will be adequate to carry out the activities of the project. Provide a summary of sources and amounts of all third party matching support. 
I11(iii) Justify the project's cost-effectiveness. Show how the project maximizes the use of limited resources, optimizes research value for the dollar, achieves economies of scale, or leverages additional funds. For example, discuss how the project has the potential to generate a critical mass of expertise and activity focused on a high-priority research initiative(s) or promote coalition building that could lead to future ventures. 
I11(iv) Include the percentage of time key personnel will work on the project, both during the academic year and summer. When salaries of university project personnel will be paid by a combination of USDA and institutional funds, the total compensation must not exceed the faculty member's regular annual compensation. In addition, the total commitment of time devoted to the project, when combined with time for teaching and research duties, other sponsored agreements, and other employment obligations to the institution, must not exceed 100 percent of the normal workload for which the employee is compensated, in accordance with established university policies and applicable Federal cost principles. 

I11(v) If the proposal addresses more than one targeted need area, estimate the proportion of the funds requested from USDA that will support each respective targeted need area.  
I11(i) T3Current and pending support.G1T1 Each applicant must complete Form CSREESï¿½09663, ``Current and Pending Support,'' identifying any other current public- or private-sponsored projects, in addition to the proposed project, to which key personnel listed in the proposal under consideration have committed portions of their time, whether or not salary support for the person(s) involved is included in the budgets of the various projects. This information should also be provided for any pending proposals which are currently being considered by, or which will be submitted in the near future to, other possible sponsors, including other USDA programs or agencies. Concurrent submission of identical or similar projects to other possible sponsors will not prejudice the review or evaluation of a project under this program.  
I11(j) T3Appendix.G1T1 Each project narrative is expected to be complete in itself and ï¿½328ï¿½to meet the 20-page limitation. Inclusion of material in the Appendix should not be used to circumvent the 20-page limitation of the proposal narrative. However, in those instances where inclusion of supplemental information is necessary to guarantee the peer review panel's complete understanding of a proposal or to illustrate the integrity of the design or a main thesis of the proposal, such information may be included in the Appendix. Examples of supplemental material are photographs, journal reprints, brochures and other pertinent materials which are deemed to be illustrative of major points in the narrative but unsuitable for inclusion in the proposal narrative itself. Information on previously submitted proposals may also be presented in the Appendix (refer to paragraph (e) of this section). When possible, information in the Appendix should be presented in tabular format. A complete set of the Appendix material must be attached to each copy of the grant application submitted. The Appendix must be identified with the title of the project as it appears on Form CSREESï¿½09712 of the proposal and the name(s) of the principal investigator(s). The Appendix must be referenced in the proposal narrative.  
I11(k) T3Special considerations.G1T1 A number of situations encountered in the conduct of research require special information or supporting documentation before funding can be approved for the project. If such situations are anticipated, proposals must so indicate via completion of Form CSREESï¿½09662, ``Assurance Statement(s).'' It is expected that some applications submitted in response to these guidelines will involve the following:  
I11(1) T3Recombinant DNA research.G1T1 All key personnel identified in the proposal and all endorsing officials of the proposing organization are required to comply with the guidelines established by the National Institutes of Health entitled ``Guidelines for Research Involving Recombinant DNA Molecules,'' as revised. All applicants proposing to use recombinant DNA techniques must so indicate by checking the appropriate box on Form CSREESï¿½09712, ``Higher Education Proposal Cover Page,'' and by completing the applicable section of Form CSREESï¿½09662. In the event a project involving recombinant DNA or RNA molecules results in a grant award, the Institutional Biosafety Committee of the proposing institution must approve the research plan before CSREES will release grant funds.  
I11(2) T3Protection of human subjects.G1T1 Responsibility for safeguarding the rights and welfare of human subjects used in any grant project supported with funds provided by CSREES rests with the performing organization. Guidance on this is contained in Department of Agriculture regulations under 7 CFR part 1c. All applicants who propose to use human subjects for experimental purposes must indicate their intention by checking the appropriate block on Form CSREESï¿½09712, ``Higher Education Proposal Cover Page,'' and by completing the appropriate portion of Form CSREESï¿½09662. In the event a project involving human subjects results in a grant award, the Institutional Review Board of the proposing institution must approve the research plan before CSREES will release grant funds.  

I11(3) T3Laboratory animal care.G1T1 Responsibility for the humane care and treatment of laboratory animals used in any grant project supported with funds provided by CSREES rests with the performing organization. All key project personnel and all endorsing officials of the proposing organization are required to comply with the Animal Welfare Act of 1966, as amended (7 U.S.C. 2131 T3et seq.G1T1), and the regulations promulgated thereunder by the Secretary of Agriculture in 9 CFR parts 1, 2, 3, and 4 pertaining to the care, handling, and treatment of laboratory animals. All applicants proposing a project which involves the use of laboratory animals must indicate their intention by checking the appropriate block on Form CSREESï¿½09712, ``Higher Education Proposal Cover Page,'' and by completing the appropriate portion of Form CSREESï¿½09662. In the event a project involving the use of living vertebrate animals results in a grant award, the Institutional Animal Care and Use Committee of the proposing institution must approve the research plan before CSREES will release grant funds.  
ï¿½329ï¿½I11(l) T3Compliance with the National Environmental Policy Act (NEPA).G1T1 As outlined in 7 CFR Part 3407 (the Cooperative State Research, Education, and Extension Service regulations implementing NEPA), the environmental data for any proposed project is to be provided to CSREES so that CSREES may determine whether any further action is needed. In some cases, however, the preparation of environmental data may not be required. Certain categories of actions are excluded from the requirements of NEPA.  
I11(1) T3NEPA determination.G1T1 In order for CSREES to determine whether any further action is needed with respect to NEPA, pertinent information regarding the possible environmental impacts of a particular project is necessary; therefore, Form CSREESï¿½091234, ``NEPA Exclusions Form,''ust be included in the proposal indicating whether the applicant is of the opinion that the project falls within a categorical exclusion and the reasons therefor. If it is the applicant's opinion that the proposed project falls within the categorical exclusions, the specific exclusion must be identified. Form CSREESï¿½091234 and any supporting documentation should be placed at the end of the proposal and identified in the Table of Contents.  
I11(2) T3Exceptions to categorical exclusions.G1T1 Even though a project may fall within the categorical exclusions, CSREES may determine that an Environmental Assessment or an Environmental Impact Statement is necessary for an activity, if substantial controversy on environmental grounds exists or if other extraordinary conditions or circumstances are present which may cause such activity to have a significant environmental effect.  
I56Subpart F_Review and Evaluation of a Research Proposal 


I80ï¿½1A3406.19 
I89Proposal review_research.  
I11The proposal evaluation process includes both internal staff review and merit evaluation by peer review panels comprised of scientists, educators, business representatives, and Government officials who are highly qualified to render expert advice in the areas supported. Peer review panels will be selected and structured to provide optimum expertise and objective judgment in the evaluation of proposals.  


I80ï¿½1A3406.20 
I89Evaluation criteria for research proposals.  
I11The maximum score a research proposal can receive is 150 points. Unless otherwise stated in the annual solicitation published in the T4Federal RegisterG1T1, the peer review panel will consider the following criteria and weights to evaluate proposals submitted:  


c2,L2,tp0,i1,s200,xs48 I95  h1Evaluation criterion h1Weight   
j
I22(a) Significance of the problem:  

I13This criterion is used to assess the likelihood that the project will advance or have a substantial impact upon the body of knowledge constituting the natural and social sciences undergirding the agricultural, natural resources, and food systems.  

I05xl(1) Impact_Is the problem or opportunity to be addressed by the proposed project clearly identified, outlined, and delineated? Are research questions or hypotheses precisely stated? Is the project likely to further advance food and agricultural research and knowledge? Does the project have potential for augmenting the food and agricultural scientific knowledge base? Does the project address a State, regional, national, or international problem(s)? Will the benefits to be derived from the project transcend the applicant institution or the grant period? D15 points. 

I05xl(2) Continuation plans_Are there plans for continuation or expansion of the project beyond USDA support? Are there plans for continuing this line of research or research support activity with the use of institutional funds after the end of the grant? Are there indications of external, non-Federal support? Are there realistic plans for making the project self-supporting? What is the potential for royalty or patent income, technology transfer or university-business enterprises? What are the probabilities of the proposed activity or line of inquiry being pursued by researchers at other institutions? D10 points. 

I05xl(3) Innovation_Are significant aspects of the project based on an innovative or a non-traditional approach? Does the project reflect creative thinking? To what degree does the venture reflect a unique approach that is new to the applicant institution or new to the entire field of study? D10 points. 

I05xl(4) Products and results_Are the expected products and results of the project clearly outlined and likely to be of high quality? Will project results be of an unusual or unique nature? Will the project contribute to a better understanding of or an improvement in the quality, distribution, or effectiveness of the Nation's food and agricultural scientific and professional expertise base, such as increasing the participation of women and minorities? D15 points. 

I22xl(b) Overall approach and cooperative linkages:

ï¿½330ï¿½I13This criterion relates to the soundness of the proposed approach and the quality of the partnerships likely to evolve as a result of the project.  

I05xl(1) Proposed approach_Do the objectives and plan of operation appear to be sound and appropriate relative to the proposed initiative(s) and the impact anticipated? Is the proposed sequence of work appropriate? Does the proposed approach reflect sound knowledge of current theory and practice and awareness of previous or ongoing related research? If the proposed project is a continuation of a current line of study or currently funded project, does the proposal include sufficient preliminary data from the previous research or research support activity? Does the proposed project flow logically from the findings of the previous stage of study? Are the procedures scientifically and managerially sound? Are potential pitfalls and limitations clearly identified? Are contingency plans delineated? Does the timetable appear to be readily achievable? D5 points. 

I05xl(2) Evaluation_Are the evaluation plans adequate and reasonable? Do they allow for continuous or frequent feedback during the life of the project? Are the individuals involved in project evaluation skilled in evaluation strategies and procedures? Can they provide an objective evaluation? Do evaluation plans facilitate the measurement of project progress and outcomes? D5 points 

I05xl(3) Dissemination_Does the proposed project include clearly outlined and realistic mechanisms that will lead to widespread dissemination of project results, including national electronic communication systems, publications and presentations at professional society meetings? D5 points. 

I05xl(4) Partnerships and collaborative efforts_Does the project have significant potential for advancing cooperative ventures between the applicant institution and a USDA agency? Does the project workplan include an effective role for the cooperating USDA agency(s)? Will the project encourage and facilitate better working relationships in the university science community, as well as between universities and the public or private sector? Does the project encourage appropriate multi-disciplinary collaboration? Will the project lead to long-term relationships or cooperative partnerships that are likely to enhance research quality or supplement available resources? D15 points. 

I22(c) Institutional capacity building:  

I13This criterion relates to the degree to which the project will strengthen the research capacity of the applicant institution. In the case of a joint project proposal, it relates to the degree to which the project will strengthen the research capacity of the applicant institution and that of any other institution assuming a major role in the conduct of the project.  

I05xl(1) Institutional enhancement_Will the project help the institution to advance the expertise of current faculty in the natural or social sciences; provide a better research environment, state-of-the-art equipment, or supplies; enhance library collections related to the area of research; or enable the institution to provide efficacious organizational structures and reward systems to attract, hire and retain first-rate research faculty and students_particularly those from underrepresented groups? D15 points. 

I05xl(2) Institutional commitment_Is there evidence to substantiate that the institution attributes a high-priority to the project, that the project is linked to the achievement of the institution's long-term goals, that it will help satisfy the institution's high-priority objectives, or that the project is supported by the institution's strategic plans? Will the project have reasonable access to needed resources such as scientific instrumentation, facilities, computer services, library and other research support resources? D15 points. 

I01(d) Personnel Resources D10 Points  

I13This criterion relates to the number and qualifications of the key persons who will carry out the project. Are designated project personnel qualified to carry out a successful project? Are there sufficient numbers of personnel associated with the project to achieve the stated objectives and the anticipated outcomes? Will the project help develop the expertise of young scientists at the doctoral or post-doctorate level?  

I22(e) Budget and cost-effectiveness: 

I13This criterion relates to the extent to which the total budget adequately supports the project and is cost-effective.  

I05xl(1) Budget_Is the budget request justifiable? Are costs reasonable and necessary? Will the total budget be adequate to carry out project activities? Are the source(s) and amount(s) of non-Federal matching support clearly identified and appropriately documented? For a joint project proposal, is the shared budget explained clearly and in sufficient detail? D10 points. 

I05xl(2) Cost-effectiveness_Is the proposed project cost-effective? Does it demonstrate a creative use of limited resources, maximize research value per dollar of USDA support, achieve economies of scale, leverage additional funds or have the potential to do so, focus expertise and activity on a high-priority research initiative(s), or promote coalition building for current or future ventures? D5 points. 

I01(f) Overall quality of proposal D5 points  

I13This criterion relates to the degree to which the proposal complies with the application guidelines and is of high quality. Is the proposal enhanced by its adherence to instructions (table of contents, organization, pagination, margin and font size, the 20-page limitation, appendices, etc.); accuracy of forms; clarity of budget narrative; well prepared vitae for all key personnel associated with the project; and presentation (are ideas effectively presented, clearly articulated, thoroughly explained, etc.)? 

e


ï¿½331ï¿½I56Subpart G_Submission of a Teaching or Research Proposal  


I80ï¿½1A3406.21 
I89Intent to submit a proposal.  
I11To assist CSREES in preparing for the review of proposals, institutions planning to submit proposals may be requested to complete Form CSREESï¿½09711, ``Intent to Submit a Proposal,'' provided in the application package. CSREES will determine each year if Intent to Submit a Proposal forms will be requested and provide such information in the program announcement. If Intent to Submit a Proposal forms are required, one form should be completed and returned for each proposal an institution anticipates submitting. Submitting this form does not commit an institution to any course of action, nor does failure to send this form prohibit an institution from submitting a proposal.  


I80ï¿½1A3406.22 
I89When and where to submit a proposal.  
I11The program announcement will provide the deadline date for submitting a proposal, the number of copies of each proposal that must be submitted, and the address to which proposals must be submitted.  
I56Subpart H_Supplementary Information  


I80ï¿½1A3406.23 
I89Access to peer review information.  
I11After final decisions have been announced, CSREES will, upon request, inform the principal investigator/project director of the reasons for its decision on a proposal. Verbatim copies of summary reviews, not including the identity of the peer reviewers, will be made available to the respective principal investigator/project directors upon specific request.  


I80ï¿½1A3406.24 
I89Grant awards.  
I11(a) T3General.G1T1 Within the limit of funds available for such purpose, the authorized departmental officer shall make project grants to those responsible, eligible applicants whose proposals are judged most meritorious in the announced targeted need areas under the evaluation criteria and procedures set forth in this part. The beginning of the project period shall be no later than September 30 of the Federal fiscal year in which the project is approved for support. All funds granted under this part shall be expended solely for the purpose for which the funds are granted in accordance with the approved application and budget, the regulations of this part, the terms and conditions of the award, the applicable Federal cost principles, and the Department's Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations (7 CFR part 3019).  
I11(b) T3Organizational management information.G1T1 Specific management information relating to a proposing institution shall be submitted on a one-time basis prior to the award of a project grant identified under this part if such information has not been provided previously under this or another program for which the sponsoring agency is responsible. Copies of forms used to fulfill this requirement will be sent to the proposing institution by the sponsoring agency as part of the pre-award process.  
I11(c) T3Notice of grant award.G1T1 The grant award document shall include at a minimum the following:  
I11(1) Legal name and address of performing organization.  
I11(2) Title of project.  
I11(3) Name(s) and address(es) of principal investigator(s)/project director(s).  
I11(4) Identifying grant number assigned by the Department.  
I11(5) Project period, which specifies how long the Department intends to support the effort without requiring reapplication for funds.  

I11(6) Total amount of Federal financial assistance approved during the project period.  
I11(7) Legal authority(ies) under which the grant is awarded.  
I11(8) Approved budget plan for categorizing allocable project funds to accomplish the stated purpose of the grant award.  
I11(9) Other information or provisions deemed necessary by the Department to carry out its granting activities or to accomplish the purpose of this particular project grant.  
ï¿½332ï¿½I11(d) T3Obligation of the Federal Government.G1T1 Neither the approval of any application nor the award of any project grant shall legally commit or obligate CSREES or the United States to provide further support of a project or any portion thereof.  


I80ï¿½1A3406.25 
I89Use of funds; changes.  
I11(a) T3Delegation of fiscal responsibility.G1T1 The grantee may not in whole or in part delegate or transfer to another person, institution, or organization the responsibility for use or expenditure of grant funds.  
I11(b) T3Change in project plans.G1T1 (1) The permissible changes by the grantee, principal investigator(s)/project director(s), or other key project personnel in the approved project grant shall be limited to changes in methodology, techniques, or other aspects of the project to expedite achievement of the project's approved goals. If the grantee or the principal investigator(s)/project director(s) are uncertain as to whether a change complies with this provision, the question must be referred to the Department for a final determination.  
I11(2) Changes in approved goals, or objectives, shall be requested by the grantee and approved in writing by the authorized departmental officer prior to effecting such changes. In no event shall requests for such changes be approved which are outside the scope of the approved project.  
I11(3) Changes in approved project leadership or the replacement or reassignment of other key project personnel shall be requested by the grantee and approved in writing by the authorized departmental officer prior to effecting such changes.  
I11(4) Transfers of actual performance of the substantive programmatic work in whole or in part and provisions for payment of funds, whether or not Federal funds are involved, shall be requested by the grantee and approved in writing by the authorized departmental officer prior to effecting such transfers.  
I11(c) T3Changes in project period.G1T1 The project period may be extended by the authorized departmental officer without additional financial support for such additional period(s) as the authorized departmental officer determines may be necessary to complete or fulfill the purposes of an approved project. However, due to statutory restriction, no grant may be extended beyond five years from the original start date of the grant. Grant extensions shall be conditioned upon prior request by the grantee and approval in writing by the authorized departmental officer, unless prescribed otherwise in the terms and conditions of a grant.  
I11(d) T3Changes in approved budget.G1T1 Changes in an approved budget must be requested by the grantee and approved in writing by the authorized departmental officer prior to instituting such changes if the revision will:  
I11(1) Involve transfers of amounts budgeted for indirect costs to absorb an increase in direct costs;
I11(2) Involve transfers of amounts budgeted for direct costs to accommodate changes in indirect cost rates negotiated during a budget period and not approved when a grant was awarded; or  
I11(3) Involve transfers or expenditures of amounts requiring prior approval as set forth in the applicable Federal cost principles, Departmental regulations, or in the grant award.  


I80ï¿½1A3406.26 
I89Monitoring progress of funded projects.  
I11(a) During the tenure of a grant, principal investigators/project directors must attend at least one national principal investigators/project directors meeting, if offered, in Washington, DC or any other announced location. The purpose of the meeting will be to discuss project and grant management, opportunities for collaborative efforts, future directions for education reform, research project management, advancing a field of science, and opportunities to enhance dissemination of exemplary end products/results.  
I11(b) An Annual Performance Report must be submitted to the USDA program contact person within 90 days after the completion of the first year of the project and annually thereafter during the life of the grant. Generally, the Annual Performance Reports should include a summary of the overall progress toward project objectives, current problems or unusual developments, the next year's planned activities, and any other information that is ï¿½333ï¿½pertinent to the ongoing project or which may be specified in the terms and conditions of the award. These reports are in addition to the annual Current Research Information System (CRIS) reports required for all research grants under the award's ``Special Terms and Conditions.''  

I11(c) A Final Performance Report must be submitted to the USDA program contact person within 90 days after the expiration date of the project. The expiration date is specified in the award documents and modifications thereto, if any. Generally, the Final Performance Report should be a summary of the completed project, including: A review of project objectives and accomplishments; a description of any products and outcomes resulting from the project; activities undertaken to disseminate products and outcomes; partnerships and collaborative ventures that resulted from the project; future initiatives that are planned as a result of the project; the impact of the project on the principal investigator(s)/project director(s), the institution, and the food and agricultural sciences higher education system; and data on project personnel and beneficiaries. The Final Performance Report should be accompanied by samples or copies of any products or publications resulting from or developed by the project. The Final Performance Report must also contain any other information which may be specified in the terms and conditions of the award.  


I80ï¿½1A3406.27 
I89Other Federal statutes and regulations that apply.  
I11Several other Federal statutes and regulations apply to grant proposals considered for review and to project grants awarded under this part. These include but are not limited to: 

Q04


I217 CFR Part 1, Subpart A_USDA implementation of Freedom of Information Act.  
I217 CFR Part 3_USDA implementation of OMB Circular No. Aï¿½09129 regarding debt collection.  
I217 CFR Part 15, Subpart A_USDA implementation of Title VI of the Civil Rights Act of 1964, as amended.  
I217 CFR Part 3015_USDA Uniform Federal Assistance Regulations, implementing OMB directives (i.e., Circular Nos. Aï¿½0921 and Aï¿½09122) and incorporating provisions of 31 U.S.C. 6301ï¿½096308 (the Federal Grant and Cooperative Agreement Act of 1977, Pub. L. 95ï¿½09224), as well as general policy requirements applicable to recipients of Departmental financial assistance.  
I217 CFR Part 3017_Governmentwide Debarment and Suspension (Nonprocurement); Governmentwide Requirements for Drug-Free Workplace (Grants), implementing Executive Order 12549 on debarment and suspension and the Drug-Free Workplace Act of 1988 (41 U.S.C. 701).  
I217 CFR Part 3018_Restrictions on Lobbying, prohibiting the use of appropriated funds to influence Congress or a Federal agency in connection with the making of any Federal grant and other Federal contracting and financial transactions.  
I217 CFR Part 3019_USDA implementation of OMB Circular Aï¿½09110, Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations.  
I217 CFR Part 3051_Audits of Institutions of Higher Education and other Nonprofit Institutions.  
I2129 U.S.C. 794, section 504_Rehabilitation Act of 1973, and 7 CFR Part 15b (USDA implementation of statute), prohibiting discrimination based upon physical or mental handicap in Federally assisted programs. 
I2135 U.S.C. 200 T3et seq.G1T1_Bayh-Dole Act, controlling allocation of rights to inventions made by employees of small business firms and domestic nonprofit organizations, including universities, in Federally assisted programs (implementing regulations are contained in 37 CFR part 401).  


I80ï¿½1A3406.28 
I89Confidential aspects of proposals and awards.  
I11When a proposal results in a grant, it becomes a part of the record of the Agency's transactions, available to the public upon specific request. Information that the Secretary determines to be of a privileged nature will be held in confidence to the extent permitted by law. Therefore, any information that the applicant wishes to have considered as privileged should be clearly marked as such and sent in a separate statement, two copies of which should accompany the proposal. The original copy of a proposal that does not result in a grant will be retained by the Agency for a period of one year. Other copies will be destroyed. Such a proposal will be released only with the consent of the applicant or to the extent required by law. A proposal may be withdrawn at any time prior to the final action thereon.  


ï¿½334ï¿½I80ï¿½1A3406.29 
I89Evaluation of program.  
I11Grantees should be aware that CSREES may, as a part of its own program evaluation activities, carry out in-depth evaluations of assisted activities. Thus, grantees should be prepared to cooperate with CSREES personnel, or persons retained by CSREES, evaluating the institutional context and the impact of any supported project. Grantees may be asked to provide general information on any students and faculty supported, in whole or in part, by a grant awarded under this program; information that may be requested includes, but is not limited to, standardized academic achievement test scores, grade point average, academic standing, career patterns, age, race/ethnicity, gender, citizenship, and disability.  







I95Pt. 3407
I52PART 3407_IMPLEMENTATION OF NATIONAL ENVIRONMENTAL POLICY ACT
S8006I18Sec.
S8010I263407.1Background and purpose.
I263407.2Definitions.
I263407.3Policy.
I263407.4Responsibilities.
I263407.5Classes of action.
I263407.6Categorical exclusions.
I263407.7Actions normally requiring an environmental assessment.
I263407.8Actions normally requiring an environmental impact statement.
I263407.9Use of environmental documents in decisionmaking.
I263407.10Preparation of environmental assessments.
I263407.11Preparation of environmental impact statements.

Q04I21T5Authority:  T1National Environmental Policy Act of 1969, as amended, 42 U.S.C. 4321 T3et seqG1T1.; E.O. 11514, 34 FR 4247, as amended by E.O. 11991, 42 FR 26927; E.O. 12144, 44 FR 11957; 5 U.S.C. 301; 40 CFR parts 1500ï¿½091508; and 7 CFR part 1b.
Q04I21T5Source:  T156 FR 49245, Sept. 27, 1991, unless otherwise noted.

I80ï¿½1A3407.1 
I89Background and purpose.
I11(a) The National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 4321 T3et seq.G1T1) establishes national policies and goals for the protection of the human environment. Section 102(2) of NEPA directs all Federal agencies to give appropriate consideration to the environmental consequences of proposed actions in their decisionmaking and to prepare detailed environmental statements on major Federal actions significantly affecting the quality of the human environment.
I11(b) The purpose of this regulation is to supplement the regulations for implementation of NEPA established by the Council on Environmental Quality (CEQ) and codified at 40 CFR parts 1500ï¿½091508, as adopted by USDA in 7 CFR part 1b.
I11(c) Unless otherwise noted, parenthetical citations throughout this part refer to the CEQ regulations.

I80ï¿½1A3407.2 
I89Definitions.
I11(a) T3Authorized Departmental OfficerG1T1 means the CSREES official, acting within the scope of delegated authority, who is responsible for awarding and administering project grants on behalf of USDA and for carrying out NEPA responsibilities as outlined in ï¿½1A3407.4(d) of this part. The Authorized Departmental Officer's responsibilities do not include the review, approval, management, or similar activity relating to programs or projects funded by CSREES on the basis of statutory formula and also do not include parallel responsibilities relating to the management or administration of cooperative agreements awarded by CSREES.
I11(b) Other terms used in this regulation have the same meaning as they have in the CEQ regulations.

I80ï¿½1A3407.3 
I89Policy.
I11(a) It is CSREES policy to comply with the provisions of NEPA and related laws and policies and with the implementing regulations cited in ï¿½1A3407.1(b) of this part.
I11(b) Environmental documents should be concise, written in plain language, and address the issues pertinent to the decision being made.
I11(c) Environmental documents may be substituted for or combined with other reports which serve to facilitate decisionmaking (40 CFR 1506.4).
I11(d) CSREES personnel will cooperate with other Federal and State agencies or units thereof, as well as with grantees, contractors, and other cooperating individuals or entities undertaking activities funded or recommended for ï¿½335ï¿½funding by CSREES to assure that NEPA considerations are addressed early in the planning process to avoid delays and conflicts (40 CFR 1501.2).
I11(e) CSREES reserves the right to require project participants outside of CSREES to furnish environmental data or documentation to assist CSREES in carrying out its responsibilities under NEPA. When an applicant, grantee, or other cooperating individual or organization is required to submit environmental data to CSREES, including preparation of an environmental assessment (EA), or when a contractor hired by a grantee or other cooperating party prepares environmental data or documentation, CSREES shall provide advance instructions to the applicant, grantee, or other cooperator relating to the preparation and submission of the required information. All information supplied by external project participants shall be subject to verification by CSREES (40 CFR 1506.5).
I11(f) When possible, costs of analyses and development of required environmental documents shall be planned for during the budgetary process relating to the plan or program. Where the nature of particular program agreements (e.g., grants, cooperative agreements, formula projects) are determined by CSREES to require environmental documentation, the cost of preparing such documentation and of reasonable mitigation efforts shall be considered allowable costs and may be charged to the project as a portion of the Federal or the non-Federal share of project costs. However, CSREES funds above those authorized for the program award will not be made available to recipients to cover such costs.
I11(g) Final environmental documents, decision notices, and records of decision shall be available to the public for review. There shall be an early and open process for determining the scope of issues to be addressed during environmental analysis (40 CFR 1501.7).
I11(h) The concept of tiering to eliminate repetitive discussions applicable to EISs (40 CFR part 1502) is applicable to EAs also.
I11(i) CSREES officials may adopt an existing Federal EA or EIS when a proposed action is substantially the same as the action for which an existing EA or EIS was prepared (40 CFR 1506.3), provided that the EA or EIS or portion thereof meets the standards for an adequate EA or EIS under these regulations.
I11(j) Existing environmental documents may be incorporated by reference to reduce the bulk of an EA or EIS (40 CFR 1502.21).
I11(k) After prior consultation with the Council on Environmental Quality, CSREES personnel may, in emergency situations, implement alternative arrangements for compliance with these procedures in accordance with 40 CFR 1506.11.

I80ï¿½1A3407.4 
I89Responsibilities.
I11The CSREES officials identified below are responsibe for carrying out the provisions of NEPA as indicated:
I11(a) T3Administrator.G1T1 The Administrator is responsible for providing leadership, formulating agency policies and procedures to implement NEPA, and making available necessary resources to ensure that NEPA goals are met.
I11(b) T3Associate Administrators and Deputy Administrators.G1T1 Associate Administrators and Deputy Administrators are responsible for:
I11(1) Ensuring that eligible institutions under CSREES formula grant programs are notified of agency environmental requirements before projects to be funded with formula funds are submitted to CSREES for approval;
I11(2) Assuring that adequate consideration is given to environmental effects of proposed actions during programmatic planning and decisionmaking processes for grants, cooperative agreements, and formula projects;
I11(3) Ensuring that environmental information is reviewed and that required documentation is developed in a timely and satisfactory manner for grants, cooperative agreements, and formula projects; and
I11(4) Approving courses of action within the range of alternatives presented including, as appropriate, approval or recommendation of EAs and EISs for grants, cooperative agreements, and formula projects.
I11(c) T3Program Managers.G1T1 CSREES Program Managers are responsible for:
I11(1) Preparing EISs when required;
ï¿½336ï¿½I11(2) Reviewing and making recommendations relating to environmental documentation submitted by project recipients;
I11(3) Recommending and implementing courses of action within the range of alternatives presented; and
I11(4) Monitoring results.
I11(d) T3Authorized Departmental Officer.G1T1 The Authorized Departmental Officer is responsible for:
I11(1) Ensuring that eligible applicants under CSREES' project grant programs are notified of agency environmental requirements in advance of proposal preparation;
I11(2) Providing terms and conditions of grant award for adequate environmental documentation; and
I11(3) Authorizing the commencement of approved project activities.

I21T5Note: T1Where agency environmental requirements are set forth in program regulations, solicitations of applications, program guidelines, or other documents that apprise applicants of environmental requirements, the requirement for advance notification to potential applicants shall be satisfied.


I80ï¿½1A3407.5 
I89Classes of action.
I11The following describes typical classes of action associated with CSREES programs and related activities:
I11(a) Actions which normally do not require the preparation of an EA or an EIS are those actions which ordinarily do not have significant individual or cumulative effect on the quality of the human environment. These include those activities described in ï¿½1A3407.6 (a)(1) and (a)(2) of this part.
I11(b) Actions normally requiring an EA, but not necessarily an EIS, are those projects in which at least some level of uncertainty exists regarding individual or cumulative effects on the quality of the human environment. Such actions generally include those identified in ï¿½1A3407.6(b) and 3407.7 of this part.
I11(c) Actions normally requiring an EIS are projects which are determined to have a significant impact on the quality of the human environment or which will be performed under extraordinary circumstances. These types of actions are identified in ï¿½1A3407.6(b) and 3407.8 of this part.

I80ï¿½1A3407.6 
I89Categorical exclusions.
I11(a) All CSREES actions will be analyzed by the appropriate CSREES official specified in ï¿½1A3407.4(c) to determine whether the project under consideration will have a significant environmental effect prior to recommending to the official responsible for approving a formula project in the case of formula grants, or the official responsible for awarding a grant or cooperative agreement in the case of a grant or cooperative agreement that the action be undertaken. Unless otherwise determined to be necessary under the provisions of paragraph (b) of this section, however, the preparation of an EA or EIS is not required for the following categories of actions:
I11(1) T3Department of Agriculture Categorical Exclusions (7 CFR 1b.3).G1T1 (i) Policy development, planning and implementation which are related to routine activities such as personnel, organizational changes, or similar administrative functions; 
I11(ii) Activities which deal solely with the functions of programs, such as program budget proposals, disbursement, and transfer or reprogramming of funds; 
I11(iii) Inventories, research activities and studies, such as resource inventories and routine data collection when such actions are clearly limited in context and intensity; 
I11(iv) Educational and informational programs and activities; 
I11(v) Civil and criminal law enforcement and investigative activities; 
I11(vi) Activities which are advisory and consultative to other agencies and public and private entities; and 
I11(vii) Activities related to trade representation and market development activities abroad. 
I11(2) T3CSREES categorical exclusions.G1T1 Based on previous experience, the following categories of CSREES actions are excluded because they have been found to have limited scope and intensity and to have no significant individual or cumulative impacts on the quality of the human environment: 
I11(i) The following categories of research programs or projects of limited size and magnitude or with only short-term effects on the environment: 
ï¿½337ï¿½I11(A) Research conducted within any laboratory, greenhouse, or other contained facility where research practices and safeguards prevent environmental impacts; 
I11(B) Surveys, inventories, and similar studies that have limited context and minimal intensity in terms of changes in the environment; and 
I11(C) Testing outside of the laboratory, such as in small isolated field plots, which involves the routine use of familiar chemicals or biological materials. 
I11(ii) Routine renovation, rehabilitation, or revitalization of physical facilities, including the acquisition and installation of equipment, where such activity is limited in scope and intensity. 
I11(b) Exceptions to categorical exclusions. Notwithstanding paragraph (a) of this section, an EA or EIS shall be prepared for an activity which is normally within the purview of categorical exclusion where it is determined by CSREES that substantial controversy on environmental grounds exists or that other extraordinary conditions or circumstances are present which may cause such activity to have a significant environmental effect. 

I80ï¿½1A3407.7 
I89Actions normally requiring an environmental assessment. 
I11The following actions normally will require an EA: 
I11(a) Programs supported in whole or in part by CSREES which may result in a particular technology's moving from the field evaluation stage to large-scale demonstration or simulated commercial phase. 
I11(b) Field work that is expected to have an effect on the human environment such as large-scale excavations or the use of explosives. 
I11(c) Projects for the construction or renovation of physical facilities, unless categorically excluded under ï¿½1A3407.6(a)(2)(ii). 
I11(d) Activities specified in ï¿½1A3407.6(b). 

I80ï¿½1A3407.8 
I89Actions normally requiring an environmental impact statement. 
I11An EIS normally will be required for major actions where it is determined by CSREES that such activity will significantly affect the quality of the human environment, including those specified in ï¿½1A3407.6(b). 

I80ï¿½1A3407.9 
I89Use of environmental documents in decisionmaking. 
I11In carrying out agency responsibilities under NEPA, CSREES officials shall: 
I11(a) Consider all relevant environmental documents in evaluating programs, proposals, or projects for final agency action.
I11(b) Make all relevant final environmental documents, comments, and responses part of the record in rulemaking and adjudicatory proceedings.
I11(c) Ensure that all relevant final environmental documents, comments, and responses are submitted to CSREES in a timely fashion, are subjected to normal agency review processes, and are made a part of the official record.
I11(d) Consider only those alternatives encompassed by the range of alternatives discussed in the relevant environmental documents when evaluating plans, programs, or proposals for agency action.

I80ï¿½1A3407.10 
I89Preparation of environmental assessments.
I11(a) T3Format and content.G1T1 An EA may be prepared in any format provided that it covers, in a logical and succinct fashion, the information necessary for determining whether a proposed CSREES action may have a significant environmental impact and thus warrant preparation of an EIS. The information must include brief discussions on the need for the project, alternatives to the proposed action, environmental impacts of the proposed action and alternatives, and a listing of agencies and persons consulted (40 CFR 1508.9). Where possible, EAs should be limited to 10ï¿½0915 pages. NOTE: It is the scope and complexity of the environmental issues, rather than the size of the project, that should be used to determine the length of the EA
I11(b) T3Supplements to environmental assessments.G1T1 Where substantial changes occur in a project or activity for which an EA has been prepared and it is determined by a responsible CSREES official specified in ï¿½1A3407.4(b) that the ï¿½338ï¿½changes are pertinent to environmental concerns, a supplement to the EA may be required. Supplements to EAs shall be evaluated and processed as stated in paragraph (c) of this section.
I11(c) T3Decision notice.G1T1 Upon completion of an EA and any supplement thereto, the responsible CSREES official will evaluate the information it contains, determine whether an EIS is required or whether no significant environmental impact is likely to occur, and will document the decision and the reasons upon which it is based (40 CFR 1508.13). The EA shall be available to the public. 

I80ï¿½1A3407.11 
I89Preparation of environmental impact statements.
I11(a) T3Actions involving more than one agency.G1T1 If more than one Federal agency participates in a program activity, a lead agency shall be selected in accordance with 40 CFR 1501.5(c). The lead agency, in full cooperation with all participating agencies, shall assume responsibility for involving the public as required in 40 CFR 1501.4(b) and shall prepare the EIS or shall cause the EIS to be prepared as provided in 40 CFR 1501.5.
I11(b) T3Notice of intent.G1T1 If a responsible CSREES official designated in ï¿½1A3407.4(b) of this part recommends the preparation of an EIS, the public shall be apprised of the decision. This notice shall be prepared according to 40 CFR 1508.2.
I11(c) T3Draft and Final EIS.G1T1 The process of preparing the draft and final EIS, as well as the format of the document, shall comply with the provisions of 40 CFR parts 1502ï¿½091506.
I11(d) T3Supplemental statements.G1T1 Where substantial changes occur or new information becomes available under a project or activity for which an EIS or draft EIS has been prepared and it is determined by a responsible CSREES official specified in ï¿½1A3407.4(b) that the changes are pertinent to environmental concerns, a supplement to the EIS or draft EIS may be required. The supplement shall be evaluated and processed in accordance with 40 CFR 1502.9(c).
I11(e) T3Decisionmaking and implementation.G1T1 A responsible CSREES official designated in ï¿½1A3407.4(b) may make a decision no sooner than thirty days after the notice of availability of the final EIS has been published in the T4Federal RegisterG1T1 by the Environmental Protection Agency (40 CFR 1506.10). The decision will be documented in a record of decision as required by 40 CFR 1505.2, and monitoring and mitigation activities will be implemented as required by 40 CFR 1505.3.

I95Pt. 3411
I52PART 3411_NATIONAL RESEARCH INITIATIVE COMPETITIVE GRANTS PROGRAM


I86Subpart A_General
S8006I18Sec.
S8010I263411.1Applicability of regulations.
I263411.2Definitions.
I263411.3Eligibility requirements.
I263411.4How to apply for a grant.
I263411.5Evaluation and disposition of applications.
I263411.6Grant awards.
I263411.7Use of funds; changes.
I263411.8Other Federal statutes and regulations that apply.
I263411.9Other conditions.

I86Subpart B_Scientific Peer Review of Research Grant Applications
I263411.10Establishment and operation of peer review groups.
I263411.11Composition of peer review groups.
I263411.12Conflicts of interest.
I263411.13Availability of information.
I263411.14Proposal review.
I263411.15Evaluation factors.

Q04I21T5Authority:  T1Sec. 2(i) of the Act of August 4, 1965, as amended (7 U.S.C. 450i(i)).
Q04I21T5Source:  T156 FR 57952, Nov. 14, 1991, unless otherwise noted. Redesignated at 60 FR 63368, Dec. 8, 1995. 

I56Subpart A_General 

I80ï¿½1A3411.1 
I89Applicability of regulations. 
I11(a) The regulations of this part apply to competitive research grants awarded under the authority of section 2(b) of the Act of August 4, 1965, as amended by section 1615 of the Food, Agriculture, Conservation, and Trade Act of 1990 (FACT Act), (7 U.S.C. 450i(b)), for the support of research to further the programs of the Department of Agriculture and to improve research capabilities in the agricultural, food, and ï¿½339ï¿½environmental sciences in the following categories: Single investigators or coinvestigators in the same disciplines; teams of researchers from different disciplines; multidisciplinary teams for long-term applied research problems; multidisciplinary teams whose research has the eventual goal of technology transfer; institutions for improvement of research, development, technology transfer and education capacity through the acquisition of special research equipment and improvement of teaching and education, including fellowships; single investigators or coinvestigators who are beginning their research careers; and, faculty of small and mid-sized institutions not previously successful in obtaining competitive grants under this subsection. The National Research Initiative Competitive Grants Program (NRICGP) Board of Directors was established by the Assistant Secretary for Science and Education to advise the Assistant Secretary on policy issues concerning NRICGP. The Board is comprised of the Assistant Secretary for Science and Education; the Administrators of the Cooperative State Research Service, the Agricultural Research Service, the Extension Service, and the Economic Research Service; the Deputy Chief for Research of the Forest Service; the Chief Scientist of the NRICGP; and the Director of the National Agricultural Library. Any determinations made by the Joint Council on Food and Agricultural Sciences, including recommendations made by the Agricultural Science and Technology Review Board, and the National Agricultural Research and Extension Users Advisory Board, will be taken into consideration by the Board in recommending policies and priorities for the NRICGP. The advice of other individuals is also encouraged; that advice also is provided to the Board of Directors. The Administrator of CSRS shall determine and announce, through publication of a Notice in such publications as the T4Federal RegisterG1T1, professional trade journals, agency or program handbooks, the Catalog of Federal Domestic Assistance, or any other appropriate means, high-priority research areas and categories to improve research capabilities for which proposals will be solicited and the extent that funds are available therefor. 
I11(b) The regulations of this part do not apply to grants awarded by the Department of Agriculture under any other authority.
Q04I20[56 FR 57952, Nov. 14, 1991. Redesignated and amended at 60 FR 63368, 63369, Dec. 8, 1995]

I80ï¿½1A3411.2 
I89Definitions.
I11As used in this part and in annual program solicitations issued pursuant to this part:
I11(a) T3AdministratorG1T1 means the Administrator of the Cooperative State Research Service (CSRS) and any other officer or employee of the Department of Agriculture to whom the authority involved may be delegated.
I11(b) T3DepartmentG1T1 means the Department of Agriculture.
I11(c) T3Principal investigatorG1T1 means a single individual who is responsible for the scientific and technical direction of the project, as designated by the grantee in the grant application and approved by the Administrator.
I11(d) T3GranteeG1T1 means the entity designated in the grant award document as the responsible legal entity to whom a grant is awarded under this part.
I11(e) T3GrantG1T1 means the award by the Administrator of funds to a grantee to assist in meeting the costs of conducting, for the benefit of the public, an identified project which is intended and designed to establish, discover, elucidate, or confirm information or the underlying mechanisms relating to a research program area identified in the program solicitation; it also means the award by the Administrator of funds to a grantee to strengthen its research capabilities relating to a research program area identified in the program solicitation;
I11(f) T3ProjectG1T1 means the particular activity within the scope of one or more of the research program areas or the categories to improve research capabilities identified in the program solicitation that is supported by a grant under this part.
I11(g) T3Project periodG1T1 means the total time approved by the Administrator for conducting the proposed project as outlined in an approved grant application.
ï¿½340ï¿½I11(h) T3Budget periodG1T1 means the interval of time (usually 12 months) into which the project period is divided for budgetary and reporting purposes.
I11(i) T3Awarding officialG1T1 means the Administrator and any other officer or employee of the Department to whom the authority to issue or modify grant instruments has been delegated.
I11(j) T3Peer review groupG1T1 means an assembled group of experts or consultants qualified by training and experience to give expert advice on the scientific and technical merit of grant applications or the relevance of those applications to one or more of the research purposes as contained in ï¿½1A3411.15 of this part.
I11(k) T3Ad hoc reviewersG1T1 means experts or consultant qualified by training and experience to render special expert advice, through written evaluations, on the scientific and technical merit of grant applications or the relevance of those applications to one or more of the research purposes contained in ï¿½1A3411.15 of this part.
I11(l) T3ResearchG1T1 means any systematic study directed toward new or fuller knowledge and understanding of the subject studied.
I11(1) T3Fundamental research,G1T1 as referred to annually in the program solicitation, means research that tests scientific hypotheses and provides basic knowledge which allows advances in applied research and from which major conceptual breakthroughs are expected to occur.
I11(2) T3Mission-linked research,G1T1 as referred to annually in the program solicitation, means research on specifically identified agricultural problems which, through a continuum of efforts, provides information and technology that may be transferred to users and may relate to a product, practice, or process.
I11(3) T3Multidisciplinary research,G1T1 as referred to annually in the program solicitation, means research in which investigators from two or more disciplines are collaborating closely. These collaborations, where appropriate, may integrate the biological, physical, chemical, or social sciences.
I11(m) T3MethodologyG1T1 means the project approach to be followed and the resources needed to carry out the project. 
I11(n) T3Small and mid-sized institutionG1T1 means an academic institution with a total enrollment of 15,000 or less. An institution in this instance is an organization that possesses a significant degree of academic and administrative autonomy, as specified in the annual program solicitation.
I11(o) T3USDAï¿½09EPSCoR States (Experimental Program for Stimulating Competitive Research)G1T1 means States which have had a funding level from the USDA NRICGP no higher than the 38th percentile of all States, based on a three-year rolling average, and all United States territories and possessions. A list of eligible States is published annually in the program solicitation.
Q04I20[56 FR 57952, Nov. 14, 1991. Redesignated and amended at 60 FR 63368, 63369, Dec. 8, 1995; 61 FR 45319, Aug. 29, 1996]

I80ï¿½1A3411.3 
I89Eligibility requirements.
I11(a) Except where otherwise prohibited by law, State agricultural experiment stations, all colleges and universities, other research institutions and organizations, Federal agencies, private organizations or corporations, and individuals, shall be eligible to apply for and to receive a competitive grant award under this part, provided that the applicant qualifies as a responsible grantee under the criteria set forth in paragraph (b) of this section.
I11(b) To qualify as responsible, an applicant must meet the following standards as they relate to a particular project:
I11(1) Adequate financial resources for performance, the necessary experience, organizational and technical qualifications, and facilities, or a firm commitment, arrangement, or ability to obtain some (including by proposed subagreements);
I11(2) Ability to comply with the proposed or required completion schedule for the project;
I11(3) Satisfactory record of integrity, judgment, and performance, including, in particular, any prior performance under grants and contracts from the Federal government;
I11(4) Adequate financial management system and audit procedures that provide efficient and effective accountability and control of all funds, property, and other assets; and
ï¿½341ï¿½I11(5) Otherwise qualified and eligible to receive a grant under the applicable laws and regulations; eligibility for specific program areas or categories of competitive grants to improve research capabilities will be outlined in the program solicitation.
I11(c) Any applicant who is determined to be not responsible will be notified in writing of such finding and the basis therefor.
I11(d) T3Agricultural Research Enhancement Awards.G1T1 In addition to paragraphs (a), (b), and (c) of this section, the following eligibility requirements apply to Agricultural Research Enhancement Awards (Program reserves the right to specify funding limitations and administrative requirements each year in the program solicitation):
I11(1) T3Postdoctoral Fellowships.G1T1 In accordance with Section 2(b)(3)(D) of the Act of August 4, 1965, as amended, individuals who have recently received or will soon received their doctoral degree may submit proposals for postdoctoral fellowships. The following eligibility requirements apply:
I11(i) The doctoral degree of the applicant must be received not earlier than January 1 of the fiscal year three years prior to the submission of the proposal and not later than June 15 of the fiscal year during which the proposal is submitted;
I11(ii) The individual must be a citizen of the United States; and 
I11(iii) The proposal must contain:
I11(A) documentation that arrangements have been made with an established investigator to serve as mentor;
I11(B) documentation that arrangements have been made for the necessary facilities, space, and materials for conduct of the research; and 
I11(C) documentation from the host institution's authorized organizational representative indicating that the host institution concurs with these arrangements.
I11(2) T3New Investigator Awards.G1T1 Pursuant to Section 2(b)(3)(E) of the Act of August 4, 1965, as amended, investigators or co-investigators who are beginning their research careers, do not have an extensive research publication record, and have less than 5 years of post-graduate, career-track research experience may submit proposals as new investigators. Applicants may not have received competitively-awarded Federal research funds beyond the level of pre- or postdoctoral research awards.
I11(3) T3Strengthening Awards.G1T1 Applicants that are eligible for any grant under this part may also be eligible for Equipment Grants, Research Career Enhancement Awards, Seed Grants, and Strengthening Standard Research Project Awards pursuant to Sections 2(b)(3) (D) and (F) of the Act of August 4, 1965, as amended, subject to the following limitations on such eligibility:
I11(i) T3Equipment Grants.G1T1 The following organizations are ineligible to apply for Equipment grants:
I11(A) Institutions which are among the top 100 universities and colleges for receiving Federal funds for science and engineering research as specified in the annual program solicitation; or
I11(B) non-degree granting institutions.
I11(ii) T3Research Career Enhancement Awards, Seed Grants, and Strengthening Standard Research Project Awards.G1T1 The following eligibility requirements apply to Research Career Enhancement Awards, Seed Grants, and Strengthening Standard Research Project Awards:
I11(A) No investigator listed on the Application For Funding (Form CSRSï¿½09661) may have received a USDA NRICGP competitive research grant within the last five years as evidenced by an investigator listing on a prior Form CSRSï¿½09661 (an investigator may have received a Seed Grant, Research Career Enhancement Award, Equipment Grant, or Postdoctoral Fellowship and still be eligible to receive a Strengthening Standard Research Project Award);
I11(B) All investigators listed on the Application For Funding (Form CSRSï¿½09661) must be from a small or mid-sized institution that is not among the top 100 universities and colleges for receiving Federal funds for science and engineering research as specified in the annual program solicitation or must be from an institution located in a USDAï¿½09EPSCoR state; and
I11(C) Every investigator listed on the Application For Funding (Form CSRSï¿½09ï¿½342ï¿½661) must have an appointment at a degree granting institution.
Q04I20[56 FR 57952, Nov. 14, 1991. Redesignated and amended at 60 FR 63368, 63369, Dec. 8, 1995]

I80ï¿½1A3411.4 
I89How to apply for a grant.
I11(a) A program solicitation will be prepared and announced through publications such as the T4Federal RegisterG1T1, professional trade journals, agency or program handbooks, the Catalog of Federal Domestic Assistance, or any other appropriate means, as early as practicable each fiscal year. It will contain information sufficient to enable all eligible applicants to prepare competitive grant proposals and will be as complete as possible with respect to:
I11(1) Descriptions of the specific research areas and the categories of competitive grants to improve research capabilities that the Department proposes to support during the fiscal year involved, including anticipated funds to be awarded;
I11(2) Eligibility requirements;
I11(3) Obtaining application kits;
I11(4) Deadline dates for postmarking proposal packages;
I11(5) Name and mailing address to send proposals;
I11(6) Number of copies to submit;
I11(7) Special requirements.
I11(b) T3NRICGP Application Kit.G1T1 A NRICGP Application Kit will be made available to any potential grant applicant who requests a copy. This kit contains required forms, certifications, and instructions applicable to the submission of grant proposals.
I11(c) T3Format for grant proposals.G1T1 Specific instructions regarding page length, type of print, size of paper, and order of assembly, etc., of proposals will be provided in the program solicitation. However, unless otherwise stated in the program solicitation, the following general format applies:
I11(1) T3Application for Funding form.G1T1 All grant proposals submitted by eligible applicants should contain an Application for Funding form, which must be signed by the proposing principal investigator(s) and endorsed by the cognizant authorized organizational representative who possesses the necessary authority to commit the applicant's time and other relevant resources. Investigators who do not sign the cover sheet will not be listed on the grant document in the event an award is made. The title of the proposal must be brief (80-character maximum), yet represent the major thrust of the project. Because this title will be used to provide information to those who may not be familiar with the proposed project, highly technical words or phraseology should be avoided where possible. In addition, phrases such as ``investigation of'' or ``research on'' should not be used.
I11(2) T3Project Summary.G1T1 Each proposal must contain a project summary. This summary is not intended for the general reader; consequently, it may contain technical language comprehensible by persons in disciplines relating to the food and agricultural sciences. The project summary should be a self-contained, specific description of the activity to be undertaken and should focus on:
I11(i) Overall project goal(s) and supporting objectives;
I11(ii) Plans to accomplish project goal(s); and
I11(iii) Relevance of the project to potential long-range improvements in and sustainability of United States agriculture or to one or more of the research purposes contained in ï¿½1A3411.15 of this part.
I11(3) T3Project Description.G1T1 The specific aims of the project must be included in all proposals. The text of the project description may not exceed 15 single or double-spaced pages and must contain the following components:
I11(i) T3Introduction.G1T1 A clear statement of the long-term goal(s) and supporting objectives of the proposed project should preface the project description. The most significant published work in the field under consideration, including the work of key project personnel on the current application, should be reviewed. The current status of research in the particular field of sciences also should be described. All work cited, including that of key personnel, should be referenced.
I11(ii) T3Progress Report.G1T1 If the proposal is a renewal of an existing project supported under this program (or its predecessor), include a clearly marked performance report describing results to ï¿½343ï¿½date from the previous award. This section should contain the following information:
I11(A) A comparison of actual accomplishments with the goals established for the previous award;
I11(B) The reasons established goals were not met, if applicable; and
I11(C) A listing of any publications resulting from the award. Copies of reprints or preprints may be appended to the proposal if desired.
I11(iii) T3Rationale and Significance.G1T1 Present concisely the rationale behind the proposed project. The objectives' specific relationship to potential long-range improvements in and sustainability of United States agriculture or relevance to one or more of the research purposes contained in ï¿½1A3411.15 of this part should be shown clearly. Any novel ideas or contributions that the proposed project offers also should be discussed in this section.
I11(iv) T3Experimental Plan.G1T1 The hypotheses or questions being asked and the methodology to be applied to the proposed project should be stated explicitly. Specifically, this section must include:
I11(A) A description of the investigations and/or experiments proposed and the sequence in which the investigations or experiments are to be performed;
I11(B) Techniques to be used in carrying out the proposed project, including the feasibility of the techniques;
I11(C) Results expected;
I11(D) Means by which experimental data will be analyzed or interpreted;
I11(E) Means of applying results or accomplishing technology transfer, where appropriate;
I11(F) Pitfalls that may be encountered;
I11(G) Limitations to proposed procedures; and
I11(H) A tentative schedule for conducting major steps involved in these investigations and/or experiments.
Q02I10In describing the experimental plan, the applicant must explain fully any materials, procedures, situations, or activities that may be hazardous to personnel (whether or not they are directly related to a particular phase of the proposed project), along with an outline of precautions to be exercised to avoid or mitigate the effects of such hazards.
I11(4) T3Facilities and equipment.G1T1 All facilities and major items of equipment that are available for use or assignment to the proposed project during the requested period of support should be described. In addition, requested items of nonexpendable equipment necessary to conduct and successfully conclude the proposed project should be listed (including dollar amounts), and, if funds are requested for their acquisition, justified on a separate sheet of paper and attached to the budget.
I11(5) T3Collaborative arrangements.G1T1 If the nature of the proposed project requires collaboration or subcontractual arrangements with other research scientists, corporations, organizations, agencies, or entities, the applicant must identify the collaborator(s) and provide a full explanation of the nature of the collaboration. Evidence (i.e., letters of intent) should be provided to assure peer reviewers that the collaborators involved have agreed to render this service. In addition, the proposal must indicate whether or not such collaborative arrangement(s) have the potential for conflicts of interest.
I11(6) T3References to Project Descriptions.G1T1 All references cited should be complete, including titles, and should conform to an accepted journal format.
I11(7) T3Personnel support.G1T1 To assist peer reviewers in assessing the competence and experience of the proposed project staff, all personnel who will be involved in the proposed project must be identified clearly. For each principal investigator involved, and for all senior associates and other professional personnel who expect to work on the project, whether or not funds are sought for their support, the following should be included:
I11(i) An estimate of the time commitments necessary;
I11(ii) Curriculum vitae. The curriculum vitae should be limited to a presentation of academic and research credentials, e.g., educational, employment and professional history, and honors and awards. Unless pertinent to the project, to personal status, or to the status of the organization, meetings attended, seminars given, or personal data such as birth date, marital status, ï¿½344ï¿½or community activities should not be included. The vitae shall be no more than two pages each in length, excluding publications listings; and 
I11(iii) Publication List(s). A chronological list of all publications in refereed journals during the past five years, including those in press, must be provided for each professional project member for whom a curriculum vitae is provided. Also list other non-refereed technical publications that have relevance to the proposed project. Authors should be listed in the same order as they appear on each paper cited, along with the title and complete reference as these usually appear in journals.
I11(8) T3Budget.G1T1 A detailed budget is required for each year of requested support. In addition, a summary budget is required detailing requested support for the overall project period. A copy of the form which must be used for this purpose, along with instructions for completion, is included in the NRICGP Application Kit identified under ï¿½1A3411.4(b) of the part and may be reproduced as needed by applicants. Funds may be requested under any of the categories listed, provided that the item or service for which support is requested may be identified as necessary for successful conduct of the proposed project, is allowable under applicable Federal cost principles, and is not prohibited under any applicable Federal statute or regulation. It should be noted, for example, that section 2(b)(7) of the Act of August 4, 1965, as amended, prohibits the use of funds under this program for the renovation or refurbishment of research spaces, purchases or installation of fixed equipment in such spaces, or for the planning, repair, rehabilitation, acquisition, or construction of a building or facility. Also, section 2(b)(8) of the Act of August 4, 1965, as amended, requires that all grants, except equipment grants authorized by section 2(b)(3)(D) of the same Act, awarded under this part, shall be used without regard to matching funds or cost sharing. Equipment grants may not exceed 50 percent of the cost of the equipment to be acquired. equipment grant funds also may not be used for installation, maintenance, warranty, or insurance expenses. Indirect costs are not permitted on equipment grants.
I11(9) T3Research involving special considerations.G1T1 A number of situations encountered in the conduct of research require special information and supporting documentation before funding can be approved for the project. If any such situation is anticipated, the proposal must so indicate. It is expected that a significant number of proposals will involve the following:
I11(i) T3Recombinant DNA and RNA molecules.G1T1 All key personnel identified in a proposal and all endorsing officials of a proposed performing entity are required to comply with the guidelines established by the National Institutes of Health entitled, ``Guidelines for Research Involving Recombinant DNA Molecules,'' as revised. The NRICGP Application Kit, identified above in ï¿½1A3411.4(b), contains forms which are suitable for such certification of compliance. In the event a project involving recombinant DNA and RNA molecules results in a grant award, a qualified Institutional Biosafety Committee must approve the research before CSREES funds will be released.
I11(ii) T3Human subjects at risk.G1T1 Applicable regulations which implement the Federal Policy for the Protection of Human Subjects have been issued by the Department under 7 CFR part 1c, Protection of Human Subjects. Responsibility for safeguarding the rights and welfare of human subjects used in any proposed project supported with grant funds provided by the Department rests with the performing entity. The applicant must submit a statement certifying that the project plan has been reviewed and approved by the Institutional Committee at the proposing organization or institution. The NRICGP Application Kit, identified above in ï¿½1A3411.4(b), contains a form which is suitable for such certification. In the event a project involving human subjects results in a grant award, funds will be released only after a qualified Institutional Committee has approved the project.
I11(iii) T3Experimental vertebrate animal care.G1T1 The responsibility for the humane care and treatment of any experimental vertebrate animal, which has ï¿½345ï¿½the same meaning as ``animal'' in section 2(g) of the Animal Welfare Act of 1966, as amended (7 U.S.C. 2132(g)), used in any project supported with NRICGP funds rests with the performing organization. In this regard, all key personnel associated with any supported project and all endorsing officials of the proposed performing entity are required to comply with applicable provisions of the Animal Welfare Act of 1966, as amended (7 U.S.C. 2131 T3et seq.G1T1) and the regulations promulgated thereunder by the Secretary of Agriculture in 9 CFR parts 1, 2, 3, and 4. In this regard, the applicant must submit a statement certifying that the proposed project is in compliance with the aforementioned regulations, and that the proposed project is either under review by or has been reviewed and approved by an Institutional Animal Care and Use Committee. The NRICGP Application Kit, identified above in ï¿½1A3411.4(b), contains a form which is suitable for such certification. In the event a project involving the use of living vertebrate animals results in a grant award, funds will be released only after a qualified Institutional Animal Care and Use Committee has approved the project.
I11(10) T3Current and pending support.G1T1 All proposals must list any other current public or private research support (including in-house support) to which key personnel identified in the proposal have committed portions of their time, whether or not salary support for the person(s) involved is included in the budget. Analogous information must be provided for any pending proposals that are being considered by, or that will be submitted in the near future to, other possible sponsors, including other USDA programs or agencies. Concurrent submission of identical or similar proposals to other possible sponsors will not prejudice proposal review or evaluation by the Administrator or experts or consultants engaged by the Administrator for this purpose. However, a proposal that duplicates or overlaps substantially with a proposal already reviewed and funded (or that will be funded) by another organization or agency will not be funded under this program. The Grant Application Kit, identified above in ï¿½1A3411.4(b), contains a form which is suitable for listing current and pending support.
I11(11) T3Additions to project description.G1T1 Each project description is expected by the Administrator, the members of peer review groups, and the relevant program staff to be complete. However, if the inclusion of additional information is necessary to ensure the equitable evaluation of the proposal (e.g., photographs which do not reproduce well, reprints, and other pertinent materials which are deemed to be unsuitable for inclusion in the text of the proposal), the number of copies submitted should match the number of copies of the application requested in the program solicitation. Each set of such materials must be identified with the name of the submitting organization, and the name(s) of the principal investigator(s). Information may not be appended to a proposal to circumvent page limitations prescribed for the project description. Extraneous materials will not be used during the peer review process.
I11(12) T3Organizational management information.G1T1 Specific management information relating to an applicant shall be submitted on a one-time basis prior to the award of a grant identified under this part if such information has not been provided previously under this or another program for which the sponsoring agency is responsible. Copies of forms recommended for use in fulfilling the requirements contained in this section will be provided by the agency specified in this part once a grant has been recommended for funding.
I11(13) T3National Environmental Policy Act.G1T1 As outlined in CSREES's implementing regulations of the National Environmental Policy Act of 1969 (NEPA) at 7 CFR Part 3407, environmental data or documentation for the proposed project is to be provided to CSREES in order to assist CSREES in carrying out its responsibilities under NEPA. These responsibilities include determining whether the project requires an Environmental Assessment or an Environmental Impact Statement or whether it can be excluded from this requirement on the basis of several categorical exclusions listed in 7 CFR Part 3407. In this regard, the applicant should review the categories defined ï¿½346ï¿½for exclusion to ascertain whether the proposed project may fall within one or more of the exclusions, and should indicate if it does so on the National Environmental Policy Act Exclusions Form (Form CSRSï¿½091234) provided in the NRICGP Application Kit.
I11(14) Even though the applicant considers that a proposed project may fall within a categorical exclusion, CSREES may determine that an Environmental Assessment or an Environmental Impact Statement is necessary for a proposed project should substantial controversy on environmental grounds exist or if other extraordinary conditions or circumstances are present that may cause such activity to have a significant environmental effect.
Q04I20[56 FR 57952, Nov. 14, 1991. Redesignated and amended at 60 FR 63368, 63369, Dec. 8, 1995; 61 FR 45319, Aug. 29, 1996]

I80ï¿½1A3411.5 
I89Evaluation and disposition of applications.
I11(a) T3Evaluation.G1T1 All proposals received from eligible applicants and postmarked in accordance with deadlines established in the annual program solicitation shall be evaluated by the Administrator through such officers, employees, and others as the Administrator determines are uniquely qualified in the areas represented by particular projects. To assist in equitably and objectively evaluating proposals and to obtain the best possible balance of viewpoints, the Administrator shall solicit the advice of peer scientists, T3ad hocG1T1 reviewers, and/or others who are recognized specialists in the areas covered by the applications received and whose general roles are defined in ï¿½1A3411.2(j) and 3411.2(k). Specific evaluations will be based upon the criteria established in subpart B, ï¿½1A3411.15, unless CSRS determines that different criteria are necessary for the proper evaluation of proposals in one or more specific program areas, or for specific types of projects to be supported, and announces such criteria and their relative importance in the annual program solicitation. The overriding purpose of these evaluations is to provide information upon which the Administrator may make informed judgments in selecting proposals for ultimate support. Incomplete, unclear, or poorly organized applications will work to the detriment of applicants during the peer evaluation process. To ensure a comprehensive evaluation, all applications should be written with the care and thoroughness accorded papers for publication.
I11(b) T3Disposition.G1T1 On the basis of the Administrator's evaluation of an application in accordance with paragraph (a) of this section, the Administrator will (1) approve support using currently available funds, (2) defer support due to lack of funds or a need for further evaluations, or (3) disapprove support for the proposed project in whole or in part. With respect to approved projects, the Administrator will determine the project period (subject to extension as provided in ï¿½1A3411.7(c)) during which the project may be supported. Any deferral or disapproval of an application will not preclude its reconsideration or a reapplication during subsequent fiscal years.
Q04I20[56 FR 57952, Nov. 14, 1991. Redesignated at 60 FR 63368, Dec. 8, 1995, as amended at 61 FR 45319, Aug. 29, 1996]

I80ï¿½1A3411.6 
I89Grant awards.
I11(a) T3General.G1T1 Within the limit of funds available for such purpose, the awarding official shall make grants to those responsible, eligible applicants whose proposals are judged most meritorious in the announced program areas under the evaluation criteria and procedures set forth in this part. The date specified by the Administrator as the beginning of the project period shall be no later than September 30 of the Federal fiscal year in which the project is approved for support and funds are appropriated for such purpose, unless otherwise permitted by law. All funds granted under this part shall be expended solely for the purpose for which the funds are granted in accordance with the approved application and budget, the regulations of this part, the terms and conditions of the award, the applicable Federal cost principles, and the Department's ``Uniform Federal Assistance Regulations'' (part 3015 of this title) and the Department's ``Uniform Administrative Requirements for Grants and Cooperative Agreements to ï¿½347ï¿½State and Local Governments'' (part 3016 of this title).
I11(b) T3Grant award document and notice of grant awardG1T1_(1) T3Grant award document.G1T1 The grant award document shall include at a minimum the following:
I11(i) Legal name and address of performing organization or institution to whom the Administrator has awarded a competitive grant under the terms of this part;
I11(ii) Title of project;
I11(iii) Name(s) and address(es) of principal investigator(s) chosen to direct and control approved activities;
I11(iv) Identifying grant number assigned by the Department;
I11(v) Project period, specifying the amount of time the Department intends to support the project without requiring recompetition for funds;
I11(vi) Total amount of Departmental financial assistance approved by the Administrator during the project period;
I11(vii) Legal authority(ies) under which the grant is awarded;
I11(viii) Approved budget plan for categorizing allocable project funds to accomplish the stated purpose of the grant award; and
I11(ix) Other information or provisions deemed necessary by the Department to carry out its granting activities or to accomplish the purpose of a particular grant.
I11(2) T3Notice of grant award.G1T1 The notice of grant award, in the form of a letter, will be prepared and will provide pertinent instructions or information to the grantee that is not included in the grant award document.
I11(c) T3Types of grant instruments.G1T1 The major types of grant instruments shall be as follows:
I11(1) T3New grant.G1T1 This is a grant instrument by which the Department agrees to support a specified level of effort for a project that generally has not been supported previously under this program. This type of grant is approved on the basis of peer review recommendation.
I11(2) T3Renewal grant.G1T1 This is a grant instrument by which the Department agrees to provide additional funding for a project period beyond that approved in an original or amended award, provided that the cumulative period does not exceed the statutory limitation. When a renewal application is submitted, it should include a summary of progress to date from the previous granting period. A renewal grant shall be based upon new application, T3de novoG1T1 peer review and staff evaluation, new recommendation and approval, and a new award instrument.
I11(3) T3Supplemental grant.G1T1 This is an instrument by which the Department agrees to provide small amounts of additional funding under a new or renewal grant as specified in paragraphs (c)(1) and (c)(2) of this section and may involve a short-term (usually six months or less) extension of the project period beyond that approved in an original or amended award, but in no case may the cumulative period for the project exceed the statutory limitation. A supplement is awarded only if required to assure adequate completion of the original scope of work and if there is sufficient justification to warrant such action. A request of this nature normally will not require additional peer review.
I11(d) T3Funding mechanisms.G1T1 The two mechanisms by which new, renewal, and supplemental grants shall be awarded are as follows:
I11(1) T3Standard grant.G1T1 This is a funding mechanism whereby the Department agrees to support a specified level of effort for a predetermined time period without the announced intention of providing additional support at a future date.
I11(2) T3Continuation grant.G1T1 This is a funding mechanism whereby the Department agrees to support a specified level of effort for a predetermined period of time with a statement of intention to provide additional support at a future date, provided that performance has been satisfactory, appropriations are available for this purpose, and continued support would be in the best interests of the Federal government and the public. This kind of mechanism normally will be awarded for an initial one-year period, and any subsequent continuation project grants will also be awarded in one-year increments. The award of a continuation project grant to fund an initial or succeeding budget ï¿½348ï¿½period does not constitute an obligation to fund any subsequent budget period. Unless prescribed otherwise by CSRS, a grantee must submit a separate application for continued support for each subsequent fiscal year. Requests for such continued support must be submitted in duplicate at least three months prior to the expiration date of the budget period currently being funded. Decisions regarding continued support and the actual funding levels of such support in future years usually will be made administratively after consideration of such factors as the grantee's progress and management practices and the availability of funds. Since initial peer reviews are based upon the full term and scope of the original special grant application, additional evaluations of this type generally are not required prior to successive years' support. However, in unusual cases (e.g., when the nature of the project or key personnel change or when the amount of future support requested substantially exceeds the grant application originally reviewed and approved), additional reviews may be required prior to approving continued funding.
I11(e) T3Obligation of the Federal Government.G1T1 Neither the approval of any application nor the award of any project grant shall commit or obligate the United States in any way to make any renewal, supplemental, continuation, or other award with respect to any approved application or portion of an approved application.
I11(f) T3Current Research Information Service (CRIS).G1T1 For each project funded, CRIS Form ADï¿½09416, ``Research Work Unit/Project Description-Research Resume'' and CRIS Form ADï¿½09417, ``Research Work Unit/Project Description-Classification of Research'' and specific instructions for their completion will be sent to the grantee for completion and return. Grant funds will not be released until the completed forms are received in CSREES.
Q04I20[56 FR 57952, Nov. 14, 1991. Redesignated and amended at 60 FR 63368, 63370, Dec. 8, 1995]

I80ï¿½1A3411.7
I89Use of funds; changes.
I11(a) T3Delegation of fiscal responsibility.G1T1 The grantee may not, in whole or in part, delegate or transfer to another person, institution, or organization the responsibility for use or expenditure of grant funds.
I11(b) T3Change in project plans.G1T1 (1) The permissible changes by the grantee, principal investigator(s), or other key project personnel in the approved grant shall be limited to changes in methodology, techniques, or other aspects of the project to expedite achievement of the project's approved goals. If the grantee and/or the principal investigator(s) is uncertain whether a particular change complies with this provision, the question must be referred to the Administrator for a final determination.
I11(2) Changes in approved goals, or objectives, shall be requested by the grantee and approved in writing by the Department prior to effecting such changes. Normally, no requests for such changes that are outside the scope of the original approved project will be approved.
I11(3) Changes in approved project leadership or the replacement or reassignment of other key project personnel shall be requested by the grantee and approved in writing by the Department prior to effecting such changes.
I11(4) Transfers of actual performance of the substantive programmatic work in whole or in part and provisions for payment of funds, whether or not Federal funds are involved, shall be requested by the grantee and approved in writing by the Department prior to effecting such changes, except as may be allowed in the terms and conditions of a grant award.
I11(c) T3Changes in project period.G1T1 The project period determined pursuant to ï¿½1A3411.5(b) may be extended by the Administrator without additional financial support, for such additional period(s) as the Administrator determines may be necessary to complete, or fulfill the purposes of, an approved project. Any extension, when combined with the originally approved or amended project period, shall not exceed five (5) years (the limitation established by statute) and shall be further conditioned upon prior request by the grantee and approval in writing by the Department, except as may be allowed in the terms and conditions of a grant award.
ï¿½349ï¿½I11(d) T3Changes in approved budget.G1T1 The terms and conditions of a grant will prescribe circumstances under which written Departmental approval must be requested and obtained prior to instituting changes in an approved budget.
Q04I20[56 FR 57952, Nov. 14, 1991. Redesignated at 60 FR 63368, Dec. 8, 1995, as amended at 61 FR 45319, Aug. 29, 1996]

I80ï¿½1A3411.8
I89Other Federal statutes and regulations that apply.
I11Several other Federal statutes and/or regulations apply to grant proposals considered for review or to grants awarded under this part. These include but are not limited to:

Q04
I217 CFR 1.1_USDA implementation of Freedom of Information Act;
I217 CFR part 1c_USDA implementation of the Federal Policy for the Protection of Human Subjects;
I217 CFR part 15, subpart A_USDA implementation of title VI of the Civil Rights Act of 1964;
I217 CFR part 3_USDA implementation of OMB Circular Aï¿½09129 regarding debt collection;
I217 CFR part 3015_USDA Uniform Federal Assistance Regulations, implementing OMB directives (i.e., Circular Nos. Aï¿½09110, Aï¿½0921, and Aï¿½09122) and incorporating provisions of 31 U.S.C. 6301ï¿½096308 (formerly, the Federal Grant and Cooperative Agreement Act of 1977, Public Law No. 95ï¿½09224), as well as general policy requirements applicable to recipients of Departmental financial assistance;
I217 CFR part 3016_USDA Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (i.e., Circular Nos. Aï¿½09102 and Aï¿½0987);
I217 CFR part 3017_USDA implementation of Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants);
I217 CFR part 3018_USDA implementation of New Restrictions on Lobbying. Imposes new prohibitions and requirements for disclosure and certification related to lobbying on recipients of Federal contracts, grants, cooperative agreements, and loans;
I217 CFR part 3051_Audits of Institutions of Higher Education and Other Nonprofit Institutions.
I217 CFR part 3407_CSRS procedures to implement the National Environmental Policy Act;
I2129 U.S.C. 794, section 504_ Rehabilitation Act of 1973, and 7 CFR part 15B (USDA implementation of statute), prohibiting discrimination based upon physical or mental handicap in Federally assisted programs;
I2135 U.S.C. 200 T3et. seq.G1T1_Bayh-Dole Act, controlling allocation of rights to inventions made by employees of small business firms and domestic nonprofit organizations, including universities, in Federally assisted programs (implementing regulations are contained in 37 CFR part 401).
Q04I20[56 FR 57952, Nov. 14, 1991. Redesignated and amended at 60 FR 63368, 63370, Dec. 8, 1995]

I80ï¿½1A3411.9
I89Other conditions.
I11The Administrator may, with respect to any grant or to any class of awards, impose additional conditions prior to or at the time of any award when, in the Administrator's judgment, such conditions are necessary to assure or protect advancement of the approved project, the interests of the public, or the conservation of grant funds.

I56Subpart B_Scientific Peer Review of Research Grant Applications

I80ï¿½1A3411.10
I89Establishment and operation of peer review groups.
I11Subject to ï¿½1A3411.5, the Administrator shall adopt procedures for the conduct of peer reviews and the formulation of recommendations under ï¿½1A3411.14. Peer reviews of all responsive applications will be made by assembled groups of reviewers and/or by written comments solicited from T3ad hocG1T1 reviewers.
Q04I20[56 FR 57952, Nov. 14, 1991. Redesignated at 60 FR 63368, Dec. 8, 1995, as amended at 61 FR 45319, Aug. 29, 1996]

I80ï¿½1A3411.11
I89Composition of peer review groups.
I11(a) Peer review group members and T3ad hocG1T1 reviewers will be selected based upon their training and experience in relevant scientific or technical fields, taking into account the following factors:
I11(1) The level of formal scientific or technical education and other relevant experience of the individual and the extent to which an individual is engaged in relevant research and other relevant activities;
I11(2) The need to include as peer reviewers experts from various areas of specialization within relevant scientific or technical fields;
ï¿½350ï¿½I11(3) The need to include as peer reviewers experts from a variety of organizational types (e.g., universities, industry, private consultant(s)) and geographic locations; and
I11(4) The need to maintain a balanced composition of peer review groups related to minority and female representation and an equitable age distribution.

I11(b) [Reserved]


I80ï¿½1A3411.12
I89Conflicts of interest.
I11(a) Members of peer review groups covered by this part are subject to relevant provisions contained in title 18 of the United States Code relating to criminal activity, Departmental regulations governing employee responsibilities and conduct (part 0 of this title), and Executive Order 11222, as amended.
I11(b) Reviewers may not review proposals submitted by institutions or other entities with which they have an affiliation or in which they have an interest. For the purposes of determining whether such a conflict exists, an institution shall be considered as an organization if it possesses a significant degree of academic and administrative autonomy, as specified in the annual program solicitation.
Q04I20[56 FR 57952, Nov. 14, 1991. Redesignated and amended at 60 FR 63368, 63370, Dec. 8, 1995]

I80ï¿½1A3411.13
I89Availability of information.
I11Information regarding the peer review process will be made available to the extent permitted under the Freedom of Information Act (5 U.S.C. 552), the Privacy Act (5 U.S.C. 552a.), and Departmental implementing regulations (part 1 of this title).

I80ï¿½1A3411.14
I89Proposal review.
I11(a) All grant applications will be acknowledged. Prior to technical examination, a preliminary review will be made for responsiveness to the program solicitation (e.g., relationship of application to announced program area). Proposals which do not fall within the guidelines as stated in the program solicitation will be eliminated from competition and will be returned to the applicant.
I11(b) All applications will be carefully reviewed by the Administrator, qualified officers or employees of the Department, the respective peer review group, and T3ad hocG1T1 reviewers, as required. Written comments will be solicited from T3ad hocG1T1 reviewers when required, and individual written comments and indepth discussions will be provided by peer review group members prior to recommending applications for funding. Applications will be ranked and support levels recommended with the limitation of total available funding for each research program area as announced in the program solicitation.
I11(c) No awarding official will make a grant based upon an application covered by this part unless the application has been reviewed by a peer review group and/or T3ad hocG1T1 reviewers in accordance with the provisions of this part and said reviewers have made recommendations concerning the merit of such application.
I11(d) Except to the extent otherwise provided by law, such recommendations are advisory only and are not binding on program officers or on the awarding official.

I80ï¿½1A3411.15
I89Evaluation factors.
I11Subject to the varying conditions and needs of States, Federally funded agricultural research supported under this program shall be designed to, among other things, accomplish one or more of the following purposes: Continue to satisfy human food and fiber needs; enhance the long-term viability and competitiveness of the food production and agricultural system of the United States within the global economy; expand economic opportunities in rural America and enhance the quality of life for farmers, rural citizens, and society as a whole; improve the productivity of the American Agricultural system and develop new agricultural crops and new uses for agricultural commodities; develop information and systems to enhance the environment and the natural resource base upon which a sustainable agricultural economy depends; or enhance human health. Therefore, in carrying out its review under ï¿½1A3411.14, the peer review group shall take into account the following factors unless, pursuant to ï¿½1A3411.5(a), different evaluation criteria ï¿½351ï¿½are specified in the program solicitation:
I11(a) Scientific merit of the proposal.
I11(1) Conceptual adequacy of hypothesis;
I11(2) Clarity and delineation of objectives;
I11(3) Adequacy of the description of the undertaking and suitability and feasibility of methodology;
I11(4) Demonstration of feasibility through preliminary data;
I11(5) Probability of success of project; and
I11(6) Novelty, uniqueness and originality.
I11(b) Qualifications of proposed project personnel and adequacy of facilities.
I11(1) Training and demonstrated awareness of previous and alternative approaches to the problem identified in the proposal, and performance record and/or potential for future accomplishments;
I11(2) Time allocated for systematic attainment of objectives;
I11(3) Institutional experience and competence in subject area; and 
I11(4) Adequacy of available or obtainable support personnel, facilities, and instrumentation.
I11(c) Relevance of project to long-range improvements in and sustainability of United States agriculture or to one or more of the research purposes outlined in the first paragraph of this section.
I11(1) Scientific contribution of research in leading to important discoveries or significant breakthroughs in announced program areas; and
I11(2) Relevance of the research to agricultural, environmental, or social needs. 
Q04I20[56 FR 57952, Nov. 14, 1991. Redesignated at 60 FR 63368, Dec. 8, 1995, as amended at 61 FR 45319, Aug. 29, 1996]

I95Pt. 3415
I52PART 3415_BIOTECHNOLOGY RISK ASSESSMENT RESEARCH GRANTS PROGRAM 


I86Subpart A_General
S8006I18Sec.
S8010I263415.1Applicability of regulations.
I263415.2Definitions.
I263415.3Eligibility requirements.
I263415.4How to apply for a grant.
I263415.5Evaluation and disposition of applications.
I263415.6Grant awards.
I263415.7Use of funds; changes.
I263415.8Other Federal statutes and regulations that apply.
I263415.9Other conditions.

I86Subpart B_Scientific Peer Review of Research Grant Applications
I263415.10Establishment and operation of peer review groups.
I263415.11Composition of peer review groups.
I263415.12Conflicts of interest.
I263415.13Availability of information.
I263415.14Proposal review.
I263415.15Evaluation factors.

Q04I21T5Authority:  T15 U.S.C. 301 and 7 U.S.C. 5921.
Q04I21T5Source:  T158 FR 65647, Dec. 15, 1993, unless otherwise noted.

I56Subpart A_General

I80ï¿½1A3415.1
I89Applicability of regulations.
I11(a) The regulations of this part apply to research grants awarded under the authority of section 1668 of the Food, Agriculture, Conservation, and Trade Act of 1990, (7 U.S.C. 5921). Grants awarded under this section will support biotechnology risk assessment research to help address concerns about the effects of introducing certain biotechnology products into the environment and to help regulators develop policies concerning the introduction of such products. Taking into consideration any determinations made through consultations with such entities as the Animal and Plant Health Inspection Service, the Forest Service, the Environmental Protection Agency, the Office of Agricultural Biotechnology, and the Agricultural Biotechnology Research Advisory Committee, the Administrators of CSREES and ARS shall determine and announce, through publication of a Notice in such publications as the T4Federal RegisterG1T1, professional trade journals, agency or program handbooks, the Catalog of Federal Domestic Assistance, or any other appropriate means, specific areas of research for which preproposals or proposals will be solicited and the extent that funds are available therefor.
I11(b) The regulations of this part do not apply to grants awarded by the Department of Agriculture under any other authority.

ï¿½352ï¿½I80ï¿½1A3415.2
I89Definitions.
I11As used in this part:
I11(a) T3Ad hoc reviewersG1T1 means experts or consultants qualified by training and experience in particular scientific or technical fields to render special expert advice, through written evaluations of grant applications, in accordance with the provisions of this part, on the scientific or technical merit of grant applications in those fields.
I11(b) T3AdministratorG1T1 means the Administrator of the Cooperative State Research, Education, and Extension Service (CSREES) and/or the Administrator of the Agricultural Research Service (ARS) and any other officer or employee of the Department of Agriculture to whom the authority involved may be delegated.
I11(c) T3Awarding officialG1T1 means the Administrator and any other officer or employee of the Department to whom the authority to issue or modify grant instruments has been delegated.
I11(d) T3BiotechnologyG1T1 means any technique that uses living organisms (or parts of organisms) to make or modify products, to improve plants or animals, or to develop microorganisms for specific use. The development of materials that mimic molecular structures or functions of living systems is included.
I11(e) T3Budget periodG1T1 means the interval of time (usually 12 months) into which the project period is divided for budgetary and reporting purposes.
I11(f) T3DepartmentG1T1 means the Department of Agriculture.
I11(g) T3GrantG1T1 means the award by the Administrator of funds to a grantee to assist in meeting the costs of conducting, for the benefit of the public, an identified project which is intended and designed to establish, discover, elucidate, or confirm information or the underlying mechanisms relating to a research program area identified in program solicitation.
I11(h) T3GranteeG1T1 means the entity designated in the grant award document as the responsible legal entity to whom a grant is awarded under this part.
I11(i) T3Peer review groupG1T1 means an assembled group of experts or consultants qualified by training and experience in particular scientific or technical fields to give expert advice, in accordance with the provisions of this part, on the scientific and technical merit of grant applications in those fields.
I11(j) T3Principal investigatorG1T1 means a single individual who is responsible for the scientific and technical direction of the project, as designated by the grantee in the grant application and approved by the Administrator.
I11(k) T3ProjectG1T1 means the particular activity within the scope of one or more of the research program areas identified in the annual program solicitation that is supported by a grant under this part.
I11(l) T3Project periodG1T1 means the total time approved by the Administrator for conducting the proposed project as outlined in an approved grant application.
I11(m) T3ResearchG1T1 means any systematic study directed toward new or fuller knowledge and understanding of the subject studied.
I11(n) T3MethodologyG1T1 means the project approach to be followed to carry out the project.

I80ï¿½1A3415.3 
I89Eligibility requirements.
I11(a) Except where otherwise prohibited by law, any public or private research or educational institution or organization shall be eligible to apply for and to receive a grant award under this part, provided that the applicant qualifies as a responsible grantee under the criteria set forth in paragraph (b) of this section.
I11(b) To qualify as responsible, an applicant must meet the following standards as they relate to a particular project:
I11(1) Adequate financial resources for performance, the necessary experience, organizational and technical qualifications, and facilities, or a firm commitment, arrangement, or ability to obtain same (including by proposed subagreements);
I11(2) Ability to comply with the proposed or required completion schedule for the project;
I11(3) Satisfactory record of integrity, judgment, and performance, including, in particular, any prior performance under grants or contracts from the Federal government;
ï¿½353ï¿½I11(4) Adequate financial management system and audit procedures that provide efficient and effective accountability and control of all funds, property, and other assets; and
I11(5) Otherwise be qualified and eligible to receive a grant under the applicable laws and regulations.
I11(c) Any applicant who is determined to be not responsible will be notified in writing of such finding and the basis therefor.

I80ï¿½1A3415.4
I89How to apply for a grant.
I11(a) A program solicitation will be prepared and announced through publications such as the T4Federal Register,G1T1 professional trade journals, agency or program handbooks, the Catalog of Federal Domestic Assistance, or any other appropriate means, as early as practicable each fiscal year.
Q02I10The Department may elect to solicit preproposals each fiscal year in order to eliminate from consideration proposed research that does not address narrowly focused program objectives. A preproposal will be limited in length (in comparison to a full proposal) to alleviate waste of time and effort by applicants in the preparation of proposals and USDA staff in the review of proposals. If the Department solicits preproposals through publication of the annual program solicitation, the Department does not anticipate publishing a subsequent solicitation for full proposals. Applicants submitting preproposals deemed appropriate to the objectives of this program as set out in the annual solicitation will be requested to submit full proposals; the full proposals will then be evaluated in accordance with ï¿½1A3415.5 through ï¿½1A3415.15 of this part.
Q02I10The annual program solicitation will contain information sufficient to enable applicants to prepare preproposals or full proposals under this program and will be as complete as possible with respect to:
I11(1) Descriptions of the specific research areas that the Department proposes to support during the fiscal year involved, including anticipated funds to be awarded;
I11(2) Eligibility requirements;
I11(3) Obtaining application kits;
I11(4) Deadline dates for submission of preproposal or proposal packages;
I11(5) Name and mailing address to send preproposals or proposals;
I11(6) Number of copies to submit; and
I11(7) Special requirements.
I11(b) T3Application Kit.G1T1 An Application Kit will be made available to any potential grant applicant who requests a copy. This kit contains required forms, certifications, and instructions applicable to the submission of grant preproposals or proposals.
I11(c) T3Format for preproposals.G1T1 As stated above, the Department may elect to solicit preproposals under this program. Unless otherwise indicated by the Department in the annual program solicitation, the following general format applies for the preparation of preproposals:
I11(1) T3``Application for Funding (Form CSREESï¿½09661)''.G1T1 All preproposals submitted by eligible applicants should contain an ``Application for Funding'', Form CSREESï¿½09661, which must be signed by the proposing principal investigator(s) and endorsed by the cognizant authorized organizational representative who possesses the necessary authority to commit the applicant's time and other relevant resources. The title of the proposal must be brief (80-character maximum), yet represent the major thrust of the project. Because this title will be used to provide information to those who may not be familiar with the proposed project, highly technical words or phraseology should be avoided where possible. In addition, phrases such as ``investigation of'' and ``research on'' should not be used.
I11(2) T3Project summary.G1T1 Each preproposal must contain a project summary, the text of which may not exceed three (3) single- or double-spaced pages. The Department reserves the option of not forwarding for further consideration a preproposal in which the project summary page limit is exceeded. The project summary is not intended for the general reader; consequently, it may contain technical language comprehensible primarily by persons in disciplines relating to the food and agricultural sciences. The project summary ï¿½354ï¿½should be a self-contained specific description of the activity to be undertaken and should focus on:
I11(i) Overall project goal(s) and supporting objectives;
I11(ii) Plans to accomplish project goal(s); and
I11(iii) Relevance or significance of the project to United States agriculture.
I11(3) T3Budget.G1T1 A budget detailing requested support for the proposed project period must be included in each preproposal. A copy of the form which must be used for this purpose, along with instructions for completion, is included in the Application Kit identified under ï¿½1A3415.4(b) of this part and may be reproduced as needed by applicants. Funds may be requested under any of the categories listed on the budget form, provided that the item or service for which support is requested may be identified as necessary for successful conduct of the proposed project, is allowable under applicable Federal cost principles, and is not prohibited under any applicable Federal statute.
I11(4) T3Special requirements.G1T1 (i) The annual program solicitation will describe any special preproposal submission requirements, such as paper size or type pitch to be used in the preparation of preproposals. The solicitation will also describe special program requirements, such as conference attendance or electronic project reporting, for which applicants may allocate funds when preparing proposed budgets.
I11(ii) By signing the ``Application for Funding'' identified under ï¿½1A3415.4(c)(1) in its submission of a preproposal, the applicant is certifying compliance with the restrictions on the use of appropriated funds for lobbying set out in 7 CFR part 3018.
I11(5) T3Evaluation of preproposals.G1T1 Preproposals shall be evaluated to determine whether the substance of the proposed project is appropriate to the objectives of this program as set out in the annual program solicitation. Subsequently, the Administrator shall request full proposals from those applicants proposing projects deemed appropriate to the objectives of this program as set out in the annual program solicitation. Such proposals shall conform to the format for full proposals set out below and shall be evaluated in accordance with ï¿½1A3415.5 through ï¿½1A3415.15 of this part.
I11(d) T3Format for full proposals.G1T1 Unless otherwise indicated by the Department in the annual program solicitation, the following general format applies for the preparation of full proposals under this program:
I11(1) T3``Application for Funding'' (Form CSREESï¿½09661).G1T1 All full proposals submitted by eligible applicants should contain an Application for Funding'', Form CSREESï¿½09661, which must be signed by the proposed principal investigator(s) and endorsed by the cognizant authorized organizational representative who possesses the necessary authority to commit the applicant's time and other relevant resources. Investigators who do not sign the full proposal cover sheet will not be listed on the grant document in the event an award is made. The title of the proposal must be brief (80-character maximum), yet represent The major emphasis of the project. Because this title will be used to provide information to those who may not be familiar with the proposed project, highly technical words or phraseology should be avoided where possible. In addition, phrases such as ``investigation of'' or ``research on'' should not be used.
I11(2) T3Project summary.G1T1 Each full proposal must contain a project summary, the length of which may not exceed three (3) single- or double-spaced pages. This summary is not intended for the general reader; consequently, it may contain technical language comprehensible primarily by persons in disciplines relating to the food and agricultural sciences. The project summary should be a self-contained, specific description of the activity to be undertaken and should focus on:
I11(i) Overall project goal(s) and supporting objectives;
I11(ii) Plans to accomplish project goal(s); and
I11(iii) Relevance or significance of the project to United States agriculture.
I11(3) T3Project description.G1T1 The specific aims of the project must be included in all proposals. The text of the project description may not exceed 15 single- ï¿½355ï¿½or double-spaced pages. The Department reserves the option of not forwarding for further consideration proposals in which the project description exceeds this page limit. The project description must contain the following components:
I11(i) T3Introduction.G1T1 A clear statement of the long-term goal(s) and supporting objectives of the proposed project should preface the project description. The most significant published work in the field under consideration, including the work of key project personnel on the current application, should be reviewed. The current status of research in the particular scientific field also should be described. All work cited, including that of key personnel, should be referenced.
I11(ii) T3Progress report.G1T1 If the proposal is a renewal of an existing project supported under this program, include a clearly marked performance report describing results to date from the previous award. This section should contain the following information:
I11(A) A comparison of actual accomplishments with the goals established for the previous award;
I11(B) The reasons established goals were not met, if applicable; and
I11(C) A listing of any publications resulting from the award. Copies of reprints or preprints may be appended to the proposal if desired.
I11(4) T3Rationale and significance.G1T1 Present concisely the rationale behind the proposed project. The objectives' specific relationship and relevance to the area in which an application is submitted and the objectives' specific relationship and relevance to potential regulatory issues of United States biotechnology research should be shown clearly. Any novel ideas or contributions that the proposed project offers also should be discussed in this section.
I11(5) T3Experimental plan.G1T1 The hypotheses or questions being asked and the methodology to be applied to the proposed project should be stated explicitly. Specifically, this section must include:
I11(i) A description of the investigations and/or experiments proposed and the sequence in which the investigations or experiments are to be performed;
I11(ii) Techniques to be used in carrying out the proposed project, including the feasibility of the techniques;
I11(iii) Results expected;
I11(iv) Means by which experimental data will be analyzed or interpreted;
I11(v) Pitfalls that may be encountered;
I11(vi) Limitations to proposed procedures; and
I11(vii) Tentative schedule for conducting major steps involved in these investigations and/or experiments.
Q02I10In describing the experimental plan, the applicant must explain fully any materials, procedures, situations, or activities that may be hazardous to personnel (whether or not they are directly related to a particular phase of the proposed project), along with an outline of precautions to be exercised to avoid or mitigate the effects of such hazards.
I11(6) T3Facilities and equipment.G1T1 All facilities and major items of equipment that are available for use or assignment to the proposed research project during the requested period of support should be described. In addition, items of nonexpendable equipment necessary to conduct and successfully conclude the proposed project should be listed.
I11(7) T3Collaborative arrangements.G1T1 If the nature of the proposed project requires collaboration or subcontractual arrangements with other research scientists, corporations, organizations, agencies, or entities, the applicant must identify the collaborator(s) and provide a full explanation of the nature of the collaboration. Evidence (i.e., letters of intent) should be provided to assure peer reviewers that the collaborators involved have agreed to render this service. In addition, the proposal must indicate whether or not such a collaborative arrangement(s) has the potential for conflict(s) of interest.
I11(8) T3Personnel support.G1T1 To assist peer reviewers in assessing the competence and experience of the proposed project staff, key personnel who will be involved in the proposed project must be identified clearly. For each principal investigator involved, and for all senior associates and other professional personnel who expect to work on the project, whether or not funds are sought for their support, the following should be included:
ï¿½356ï¿½I11(i) An estimate of the time commitments necessary;
I11(ii) Curriculum vitae. The curriculum vitae should be limited to a presentation of academic and research credentials, e.g., educational, employment and professional history, and honors and awards. Unless pertinent to the project, to personal status, or to the status of the organization, meetings attended, seminars given, or personal data such as birth date, marital status, or community activities should not be included. The vitae shall be no more than two pages each in length, excluding the publication lists. The Department reserves the option of not forwarding for further consideration a proposal in which each vitae exceeds the two-page limit; and
I11(iii) Publication List(s). A chronological list of all publications in referred journals during the past five years, including those in press, must be provided for each professional project member for whom a curriculum vitae is provided. Authors should be listed in the same order as they appear on each paper cited, along with the title and complete reference as these items usually appear in journals.
I11(9) T3Budget.G1T1 A detailed budget is required for each year of requested support. In addition, a summary budget is required detailing requested support for the overall project period. A copy of the form which must be used for this purpose, Form CSREESï¿½0955, along with instructions for completion, is included in the Application Kit identified under ï¿½1A3415.4(b) of this part and may be reproduced as needed by applicants. Funds may be requested under any of the categories listed, provided that the item or service for which support is requested may be identified as necessary for successful conduct of the proposed project, is allowable under applicable Federal cost principles, and is not prohibited under any applicable Federal statute.
I11(10) T3Research involving special considerations.G1T1 A number of situations encountered in the conduct of research require special information and supporting documentation before funding can be approved for the project. If any such situation is anticipated, the proposal must so indicate. It is expected that a significant number of proposals will involve the following:
I11(i) T3Recombinant DNA and RNA molecules.G1T1 All key personnel identified in a proposal and all endorsing officials of a proposed performing entity are required to comply with the guidelines established by the National Institutes of Health entitled, ``Guidelines for Research Involving Recombinant DNA Molecules,'' as revised. The Application Kit, identified above in ï¿½1A3415.4(b), contains a form which is suitable for such certification of compliance (Form CSREESï¿½09662).
I11(ii) T3Human subjects at risk.G1T1 Responsibility for safeguarding the rights and welfare of human subjects used in any proposed project supported with grant funds provided by the Department rests with the performing entity. Regulations have been issued by the Department under 7 CFR Part 1c, Protection of Human Subjects. In the event that a project involving human subjects at risk is recommended for award, the applicant will be required to submit a statement certifying that the project plan has been reviewed and approved by the Institutional Review Board at the proposing organization or institution. The Application Kit, identified above in ï¿½1A3415.4(b), contains a form which is suitable for such certification (Form CSREESï¿½09662).
I11(iii) T3Experimental vertebrate animal care.G1T1 The responsibility for the humane care and treatment of any experimental vertebrate animal, which has the same meaning as ``animal'' in section 2(g) of the Animal Welfare Act of 1966, as amended (7 U.S.C. 2132(g)), used in any project supported with grant funds rests with the performing organization. In this regard, all key personnel associated with any supported project and all endorsing officials of the proposed performing entity are required to comply with the applicable provisions of the Animal Welfare Act of 1966, as amended (7 U.S.C. 2131 T3et seq.G1T1) and the regulations promulgated thereunder by the Secretary of Agriculture in 9 CFR parts 1, 2, 3, and 4. The applicant must submit a statement certifying that the proposed project is in compliance with the aforementioned regulations, and that the proposed project is either under review by or has been reviewed ï¿½357ï¿½and approved by an Institutional Animal Care and Use Committee. The Application Kit, identified above in ï¿½1A3415.4(b), contains a form which is suitable for such certification (Form CSREESï¿½09662).
I11(11) T3Current and pending support.G1T1 All proposals must list any other current public or private research support (including in-house support) to which key personnel identified in the proposal have committed portions of their time, whether or not salary support for the person(s) involved is included in the budget. Analogous information must be provided for any pending proposals that are being considered by, or that will be submitted in the near future to, other possible sponsors, including other USDA programs or agencies. Concurrent submission of identical or similar proposals to other possible sponsors will not prejudice proposal review or evaluation by the Administrator or experts or consultants engaged by the Administrator for this purpose. However, a proposal that duplicates or overlaps substantially with a proposal already reviewed and funded (or that will be funded) by another organization or agency will not be funded under this program. The Application Kit, identified above in ï¿½1A3415.4(b), contains a form which is suitable for listing current and pending support (Form CSREESï¿½09663).
I11(12) T3Additions to project description.G1T1 Each project description is expected by the Administrator, the members of peer review groups, and the relevant program staff to be complete while meeting the page limit established in ï¿½1A3415.4(d)(3). However, if the inclusion of additional information is necessary to ensure the equitable evaluation of the proposal (e.g., photographs that do not reproduce well, reprints, and other pertinent materials that are deemed to be unsuitable for inclusion in the text of the proposal), the number of copies submitted should match the number of copies of the application requested in the program solicitation. Each set of such materials must be identified with the name of the submitting organization, and the name(s) of the principal investigator(s). Information may not be appended to a proposal to circumvent page limitations prescribed for the project description. Extraneous materials will not be used during the peer review process.
I11(13) T3Organizational management information.G1T1 Specific management information relating to an applicant shall be submitted on a one-time basis prior to the award of a grant identified under this Part if such information has not been provided previously under this or another program for which the sponsoring agency is responsible. The Department will contact an applicant to request organizational management information once a proposal has been recommended for funding.

I80ï¿½1A3415.5
I89Evaluation and disposition of applications.
I11(a) T3Evaluation.G1T1 All proposals received from eligible applicants and submitted in accordance with deadlines established in the annual program solicitation shall be evaluated by the Administrator through such officers, employees, and others as the Administrator determines are uniquely qualified in the areas of research represented by particular projects. To assist in equitably and objectively evaluating proposals and to obtain the best possible balance of viewpoints, the Administrator shall solicit the advice of peer scientists, T3ad hocG1T1 reviewers, or others who are recognized specialists in the areas covered by the applications received and whose general roles are defined in ï¿½1A3415.2. Specific evaluations will be based upon the criteria established in subpart B, ï¿½1A3415.15, unless CSREES and/or ARS determine that different criteria are necessary for the proper evaluation of proposals in one or more specific program areas, or for specific types of projects to be supported, and announces such criteria and their relative importance in the annual program solicitation. The overriding purpose of these evaluations is to provide information upon which the Administrator may make an informed judgment in selecting proposals for support. Incomplete, unclear, or poorly organized applications will work to the detriment of applicants during the peer evaluation process. To ensure a comprehensive evaluation, all applications should be written with the care and ï¿½358ï¿½thoroughness accorded papers for publication.
I11(b) T3Disposition.G1T1 On the basis of the Administrator's evaluation of an application in accordance with paragraph (a) of this section, the Administrator will (1) approve support using currently available funds, (2) defer support due to lack of funds or a need for further evaluation, or (3) disapprove support for the proposed project in whole or in part. With respect to approved projects, the Administrator will determine the project period (subject to extension as provided in ï¿½1A3415.7(c)) during which the project may be supported. Any deferral or disapproval of an application will not preclude its reconsideration or a reapplication during subsequent fiscal years.

I80ï¿½1A3415.6
I89Grant awards.
I11(a) T3General.G1T1 Within the limit of funds available for such purpose, the awarding official of CSREES or ARS shall make grants to those responsible, eligible applicants whose proposals are judged most meritorious in the announced program areas under the evaluation criteria and procedures set forth in this part. The date specified by the Administrator as the effective date of the grant shall be no later than September 30 of the Federal fiscal year in which the project is approved for support and funds are appropriated for such purpose, unless otherwise permitted by law. It should be noted that the project need not be initiated on the grant effective date, but as soon thereafter as practicable so that project goals may be attained within the funded project period. All funds granted by CSREES or ARS under this Part shall be expended solely for the purpose for which the funds are granted in accordance with the approved application and budget, the regulations of this part, the terms and conditions of the award, the applicable Federal cost principles, and the Department's assistance regulations (part 3015 and part 3016 of this title).
I11(b) T3Grant award document and notice of grant awardG1T1_(1) T3Grant award document.G1T1 The grant award document shall include at a minimum the following:
I11(i) Legal name and address of performing organization or institution to whom the Administrator has awarded a grant under the terms of this Part;
I11(ii) Title of project;
I11(iii) Name(s) and address(es) of principal investigator(s) chosen to direct and control approved activities;
I11(iv) Identifying grant number assigned by the Department;
I11(v) Project period, specifying the amount of time the Department intends to support the project without requiring recompetition for funds;
I11(vi) Total amount of Departmental financial assistance approved by the Administrator during the project period;
I11(vii) Legal authority(ies) under which the grant is awarded;
I11(viii) Approved budget plan for categorizing allocable project funds to accomplish the stated purpose of the grant award; and
I11(ix) Other information or provisions deemed necessary by CSREES or ARS to carry out their respective granting activities or to accomplish the purpose of a particular grant.
I11(2) T3Notice of grant award.G1T1 The notice of grant award, in the form of a letter, will be prepared and will provide pertinent instructions or information to the grantee that is not included in the grant award document.
I11(c) T3Types of grant instruments.G1T1 The major types of grant instruments shall be as follows:
I11(1) T3New grant.G1T1 This is a grant instrument by which CSREES or ARS agrees to support a specified level of effort for a project that generally has not been supported previously under this program. This type of grant is approved on the basis of peer review recommendation.
I11(2) T3Renewal grant.G1T1 This is a grant instrument by which CSREES or ARS agrees to provide additional funding for a project period beyond that approved in an original or amended award. When a renewal application is submitted, it should include a summary of progress to date from the previous granting period. A renewal grant shall be based upon new application, T3de novoG1T1 peer review and staff evaluation, new recommendation and approval, and a new award action reflecting that the grant has been renewed.
ï¿½359ï¿½I11(3) T3Supplemental grant.G1T1 This is an instrument by which CSREES or ARS agrees to provide small amounts of additional funding under a new or renewal grant as specified in paragraphs (c)(1) and (c)(2) of this section and may involve a short-term (usually six months or less) extension of the project period beyond that approved in an original or amended award. A supplement is awarded only if required to assure adequate completion of the original scope of work and if there is sufficient justification to warrant such action. A request of this nature normally will not require additional peer review.
I11(d) T3Funding mechanisms.G1T1 The two mechanisms by which CSREES or ARS may elect to award new, renewal, and supplemental grants are as follows:
I11(1) T3Standard grant.G1T1 This is a funding mechanism whereby CSREES or ARS agrees to support a specified level of effort for a predetermined time period without the announced intention of providing additional support at a future date.
I11(2) T3Continuation grant.G1T1 This is a funding mechanism whereby CSREES or ARS agrees to support a specified level of effort for a predetermined period of time with a statement of intention to provide additional support at a future date, provided that performance has been satisfactory, appropriations are available for this purpose, and continued support would be in the best interests of the Federal government and the public. This kind of mechanism normally will be awarded for an initial one-year period, and any subsequent continuation project grants also will be awarded in one-year increments. The award of a continuation project grant to fund an initial or succeeding budget period does not constitute an obligation to fund any subsequent budget period. Unless prescribed otherwise by CSREES or ARS, a grantee must subject a separate application for continued support for each subsequent fiscal year. Requests for such continued support must be submitted in duplicate at least three months prior to the expiration date of the budget period currently being funded. Decisions regarding continued support and the actual funding levels of such support in future years usually will be made administratively after consideration of such factors as the grantee's progress and management practices and the availability of funds. Since initial peer reviews are based upon the full term and scope of the original grant application, additional evaluations of this type generally are not required prior to successive years' support. However, in unusual cases (e.g., when the nature of the project or key personnel change or when the amount of future support requested substantially exceeds the grant application originally reviewed and approved), additional reviews may be required prior to approving continued funding.
I11(e) T3Obligation of the Federal Government.G1T1 Neither the approval of any application nor the award of any project grant commits or obligates the United States in any way to make any renewal, supplemental, continuation, or other award with respect to any approved application or portion thereof.

I80ï¿½1A3415.7
I89Use of funds; changes.
I11(a) T3Delegation of fiscal responsibility.G1T1 The grantee may not in whole or in part delegate or transfer to another person, institution, or organization the responsibility for use or expenditure of grant funds.
I11(b) T3Change in project plans.G1T1 (1) The permissible changes by the grantee, principal investigator(s), or other key project personnel in the approved grant shall be limited to changes in methodology, techniques, or other aspects of the project to expedite achievement of the project's approved goals. If the grantee or the principal investigator(s) is uncertain whether a particular change complies with this provision, the question must be referred to the awarding official of CSREES or ARS, as appropriate, for a final determination.
I11(2) Changes in approved goals, or objectives, shall be requested by the grantee and approved in writing by the awarding official of CSREES or ARS, as appropriate, prior to effecting such changes. Normally, no requests for such changes that are outside the scope of the original approved project will be approved.
ï¿½360ï¿½I11(3) Changes in approved project leadership or the replacement or reassignment of other key project personnel shall be requested by the grantee and approved in writing by the awarding official of CSREES or ARS, as appropriate, prior to effecting such changes.
I11(4) Transfers of actual performance of the substantive programmatic work in whole or in part and provisions for payment of funds, whether or not Federal funds are involved, shall be requested by the grantee and approved in writing by the awarding official of CSREES or ARS, as appropriate, prior to effecting such changes, unless prescribed otherwise in the terms and conditions of a grant.
I11(c) T3Changes in project period.G1T1 The project period determined pursuant to ï¿½1A3415.5(b) may be extended by the awarding official of CSREES or ARS, as appropriate, without additional financial support, for such additional period(s) as the appropriate awarding official determines may be necessary to complete, or fulfill the purposes of, an approved project. Any extension of time shall be conditioned upon prior request by the grantee and approval in writing by the appropriate awarding official, unless prescribed otherwise in the terms and conditions of a grant.
I11(d) T3Changes in approved budget.G1T1 The terms and conditions of a grant will prescribe the circumstances under which written approval must be requested and obtained from the awarding official of CSREES or ARS, as appropriate, prior to instituting changes in an approved budget.

I80ï¿½1A3415.8
I89Other Federal statutes and regulations that apply.
I11Several other Federal statutes and regulations apply to grant preproposals or proposals considered for review or to grants awarded under this part. These include but are not limited to:

Q04



I217 CFR 1.1_USDA implementation of the Freedom of Information Act;
I217 CFR Part 1c_USDA implementation of the Federal Policy for the Protection of Human Subjects;
I217 CFR Part 3_USDA implementation of OMB Circular Aï¿½09129 regarding debt collection;
I217 CFR Part 15, Subpart A_USDA implementation of title VI of the Civil Rights Act of 1964; 
I217 CFR Part 520_ARS implementation of the National Environmental Policy Act;
I217 CFR Part 3015_USDA Uniform Federal Assistance Regulations, implementing OMB directives (i.e., Circular Nos. Aï¿½09110, Aï¿½0921, and Aï¿½09122) and incorporating provisions of 31 U.S.C. 6301ï¿½096308 (formerly, the Federal Grant and Cooperative Agreement Act of 1977, Pub. L. 95ï¿½09224), as well as general policy requirements applicable to recipients of Departmental financial assistance;
I217 CFR Part 3016_USDA Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments;
I217 CFR Part 3017, as amended_USDA implementation of Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants); 
I217 CFR Part 3018_USDA implementation of New Restrictions on Lobbying. Imposes new prohibitions and requirements for disclosure and certification related to lobbying on recipients of Federal contracts, grants, cooperative agreements, and loans;
I217 CFR Part 3051_Audits of Institutions of Higher Education and Other Nonprofit Institutions;
I217 CFR Part 3407_CSREES implementation of the National Environmental Policy Act;
I2129 U.S.C. 794, section 504_Rehabilitation Act of 1973, and 7 CFR Part 15B (USDA implementation of the statute), prohibiting discrimination based upon physical or mental handicap in Federally assisted programs;
I2135 U.S.C. 200 T3et seq.G1T1_Bayh-Dole Act, controlling allocation of rights to inventions made by employees of small business firms and domestic nonprofit organizations, including universities, in Federally assisted programs (implementing regulations are contained in 37 CFR part 401).





I80ï¿½1A3415.9 
I89Other conditions.
I11The Administrator may elect to use a portion of available funding each fiscal year to support an Annual Conference, the purpose of which will be to bring together scientists and regulatory officials relevant to this program. At the Annual Conference, the participants may offer individual opinions regarding research needs, update information and discuss progress, or may offer individual opinions on areas of risk assessment research appropriate to agricultural biotechnology. The annual program solicitation will indicate whether funds are available to support an Annual Conference and, if so, will include instructions on the preparation and submission of proposals requesting funds from the Department for support ï¿½361ï¿½of an Annual Conference. The Department may also elect to require principal investigators whose research is funded under this program to attend an Annual Conference and to present data on the results of their research efforts. Should attendance at an Annual Conference be required, the annual program solicitation will so indicate, and principal investigators may include attendance costs in their proposed budgets. 
I11The Administrator may, with respect to any grant or to any class of awards, impose additional conditions prior to or at the time of any award when, in the Administrator's judgment, such conditions are necessary to ensure or protect advancement of the approved project, the interests of the public, or the conservation of grant funds.

I56Subpart B_Scientific Peer Review of Research Grant Applications 

I80ï¿½1A3415.10 
I89Establishment and operation of peer review groups.
I11Subject to ï¿½1A3415.5, the Administrator shall adopt procedures for the conduct of peer reviews and the formulation of recommendations under ï¿½1A3415.14.

I80ï¿½1A3415.11 
I89Composition of peer review groups.
I11(a) Peer review group members and T3ad hocG1T1 reviewers will be selected based upon their training and experience in relevant scientific or technical fields, taking into account the following factors:
I11(1) The level of formal scientific or technical education by the individual and the extent to which an individual is engaged in relevant research activities;
I11(2) The need to include as peer reviewers experts from various areas of specialization within relevant scientific or technical fields;
I11(3) The need to include as peer reviewers experts from a variety of organizational types (e.g., universities, Federal laboratories, industry, private consultant(s), Federal and State regulatory agencies, environmental organizations) and geographic locations; and 
I11(4) The need to maintain a balanced composition of peer review groups related to minority and female representation and an equitable age distribution.

I11(b) [Reserved]


I80ï¿½1A3415.12 
I89Conflicts of interest.
I11Members of peer review groups covered by this part are subject to relevant provisions contained in title 18 of the United States Code relating to criminal activity, Departmental regulations governing employee responsibilities and conduct (part O of this title), and Executive Order No. 11222, as amended.

I80ï¿½1A3415.13 
I89Availability of information.
I11Information regarding the peer review process will be made available to the extent permitted under the Freedom of Information Act (5 U.S.C. 552), the Privacy Act (5 U.S.C. 552a.), and implementing Departmental regulations (part 1 of this title).

I80ï¿½1A3415.14 
I89Proposal review.
I11(a) All grant applications will be acknowledged. Prior to technical examination, a preliminary review will be made for responsiveness to the program solicitation (e.g., relationship of application to announced program area). Proposals that do not fall within the guidelines as stated in the program solicitation will be eliminated from competition and will be returned to the applicant.
I11(b) All applications will be carefully reviewed by the Administrator, qualified officers or employees of the Department, the respective peer review group, and T3ad hocG1T1 reviewers, as required. Written comments will be solicited from T3ad hocG1T1 reviewers when required, and individual written comments and in-depth discussions will be provided by peer review group members prior to recommending applications for funding. Applications will be ranked and support levels recommended within the limitation of total available funding for each research program area as announced in the program solicitation.
I11(c) No awarding official will make a grant based upon an application covered by this part unless the application has been reviewed in accordance with the provisions of this part and unless said reviewers have made recommendations concerning the scientific merit ï¿½362ï¿½and relevance to the program of such application.
I11(d) Except to the extent otherwise provided by law, such recommendations are advisory only and are not binding on program officers or on the awarding officials of CSREES and ARS.

I80ï¿½1A3415.15
I89Evaluation factors.
I11In carrying out its review under ï¿½1A3415.14, the peer review group will take into account the following factors unless, pursuant to ï¿½1A3415.5(a), different evaluation criteria are specified in the annual program solicitation:
I11(a) Scientific merit of the proposal.
I11(1) Conceptual adequacy of hypothesis;
I11(2) Clarity and delineation of objectives;
I11(3) Adequacy of the description of the undertaking and suitability and feasibility of methodology;
I11(4) Demonstration of feasibility through preliminary data;
I11(5) Probability of success of project;
I11(6) Novelty, uniqueness and originality; and
I11(7) Appropriateness to regulation of biotechnology and risk assessment.
I11(b) Qualifications of proposed project personnel and adequacy of facilities.
I11(1) Training and demonstrated awareness of previous and alternative approaches to the problem identified in the proposal, and performance record and/or potential for future accomplishments;
I11(2) Time allocated for systematic attainment of objectives;
I11(3) Institutional experience and competence in subject area; and
I11(4) Adequacy of available or obtainable support personnel, facilities, and instrumentation.
I11(c) Relevance of project to solving biotechnology regulatory uncertainty for United States agriculture.
I11(1) Scientific contribution of research in leading to important discoveries or significant breakthroughs in announced program areas; and
I11(2) Relevance of the risk assessment research to agriculture and environmental regulations.


F8008I327 CFR Ch. XXXV (1ï¿½091ï¿½0900 Edition)
I33Rural Housing Service, USDA


ï¿½363ï¿½I04CHAPTER XXXV_RURAL HOUSING SERVICE, DEPARTMENT OF AGRICULTURE
I03
I87Part
I88Page

I483550
I49Direct single family housing loans and grants
I59365

I483565
I49Guaranteed Rural Rental Housing Program
I59405


I483570
I49Community programs
I59428


I483575
I49General
I59438






F80103I327 CFR Ch. XXXV (1ï¿½091ï¿½0900 Edition)
I33Rural Housing Service, USDA
ï¿½365ï¿½I95Pt. 3550

I52PART 3550_DIRECT SINGLE FAMILY HOUSING LOANS AND GRANTS 


I86Subpart A_General
S8006I18Sec. 
S8010I263550.1Applicability. 
I263550.2Purpose. 
I263550.3Civil rights. 
I263550.4Reviews and appeals. 
I263550.5Environmental requirements. 
I263550.6State law or State supplement. 
I263550.7Demonstration programs. 
I263550.8Exception authority. 
I263550.9Conflict of interest. 
I263550.10Definitions. 
I263550.11ï¿½093550.49[Reserved] 
I263550.50OMB control number. 

I86Subpart B_Section 502 Origination 
I263550.51Program objectives. 
I263550.52Loan purposes. 
I263550.53Eligibility requirements. 
I263550.54Calculation of income and assets. 
I263550.55Applications. 
I263550.56Site requirements. 
I263550.57Dwelling requirements. 
I263550.58Ownership requirements. 
I263550.59Security requirements. 
I263550.60Escrow account. 
I263550.61Insurance. 
I263550.62Appraisals. 
I263550.63Maximum loan amount. 
I263550.64Down payment. 
I263550.65[Reserved] 
I263550.66Interest rate. 
I263550.67Repayment period. 
I263550.68Payment subsidies. 
I263550.69Deferred mortgage payments. 
I263550.70Conditional commitments. 
I263550.71Special requirements for condominiums. 
I263550.72Community land trusts. 
I263550.73Manufactured homes. 
I263550.74Nonprogram loans. 
I263550.75ï¿½093550.99[Reserved] 
I263550.100OMB control number. 

I86Subpart C_Section 504 Origination 
I263550.101Program objectives. 
I263550.102Grant and loan purposes. 
I263550.103Eligibility requirements. 
I263550.104Applications. 
I263550.105Site requirements. 
I263550.106Dwelling requirements. 
I263550.107Ownership requirements. 
I263550.108Security requirements (loans only). 
I263550.109Escrow account (loans only). 
I263550.110Insurance (loans only). 
I263550.111Appraisals (loans only). 
I263550.112Maximum loan and grant. 
I263550.113Rates and terms (loans only). 
I263550.114Repayment agreement (grants only). 
I263550.115ï¿½093550.149[Reserved] 
I263550.150OMB control number. 

I86Subpart D_Regular Servicing 
I263550.151Servicing goals. 
I263550.152Loan payments. 
I263550.153Fees. 
I263550.154Inspections. 
I263550.155Escrow account. 
I263550.156Borrower obligations. 
I263550.157Payment subsidy. 
I263550.158Active military duty. 
I263550.159Borrower actions requiring RHS approval. 
I263550.160Refinancing with private credit. 
I263550.161Final payment. 
I263550.162Recapture. 
I263550.163Transfer of security and assumption of indebtedness. 
I263550.164Unauthorized assistance. 
I263550.165ï¿½093550.199[Reserved] 
I263550.200OMB control number. 

I86Subpart E_Special Servicing 
I263550.201Purpose of special servicing actions. 
I263550.202Past due accounts. 
I263550.203General servicing actions. 
I263550.204Payment assistance. 
I263550.205Delinquency workout agreements. 
I263550.206Protective advances. 
I263550.207Payment moratorium. 
I263550.208Reamortization using promissory note interest rate. 
I263550.209[Reserved] 
I263550.210Offsets. 
I263550.211Liquidation. 
I263550.212ï¿½093550.249[Reserved] 
I263550.250OMB control number. 

I86Subpart F_Post-Servicing Actions 
I263550.251Property management and disposition. 
I263550.252Debt settlement policies. 
I263550.253Settlement of a debt by compromise or adjustment. 
I263550.254ï¿½093550.299[Reserved] 
I263550.300OMB control number. 

Q04I21T5Authority:  T15 U.S.C. 301; 42 U.S.C. 1480.
Q04I21T5Source:  T161 FR 59779, Nov. 22, 1996, unless otherwise noted.

I56Subpart A_General 

I80ï¿½1A3550.1 
I89Applicability. 
I11This part sets forth policies for the direct single family housing loan programs operated by the Rural Housing Service (RHS) of the U.S. Department of Agriculture (USDA). It addresses the requirements of sections 502 and 504 of the Housing Act of 1949, as amended, and includes policies regarding both ï¿½366ï¿½loan and grant origination and servicing. Procedures for implementing these regulations can be found in program handbooks, available in any Rural Development office. Any provision on the expenditure of funds under this part is contingent upon the availability of funds. 

I80ï¿½1A3550.2 
I89Purpose. 
I11The purpose of the direct RHS single family housing loan programs is to provide low- and very low-income people who will live in rural areas with an opportunity to own adequate but modest, decent, safe, and sanitary dwellings and related facilities. The section 502 program offers persons who do not currently own adequate housing, and who cannot obtain other credit, the opportunity to acquire, build, rehabilitate, improve, or relocate dwellings in rural areas. The section 504 program offers loans to very low-income homeowners who cannot obtain other credit to repair or rehabilitate their properties. The section 504 program also offers grants to homeowners age 62 or older who cannot obtain a loan to correct health and safety hazards or to make the unit accessible to household members with disabilities. 

I80ï¿½1A3550.3 
I89Civil rights. 
I11RHS will administer its programs fairly, and in accordance with both the letter and the spirit of all equal opportunity and fair housing legislation and applicable executive orders. Loans, grants, services, and benefits provided under this part shall not be denied to any person based on race, color, national origin, sex, religion, marital status, familial status, age, physical or mental disability, receipt of income from public assistance, or because the applicant has, in good faith, exercised any right under the Consumer Credit Protection Act (15 U.S.C. 1601 T3et seq.G1T1). All activities under this part shall be accomplished in accordance with the Fair Housing Act (42 U.S.C. 3601ï¿½093620), Executive Order 11246, and Executive Order 11063, as amended by Executive Order 12259, as applicable. The civil rights compliance requirements for RHS are in 7 CFR part 1901, subpart E. 

I80ï¿½1A3550.4 
I89Reviews and appeals. 
I11Whenever RHS makes a decision that is adverse to a participant, RHS will provide the participant with written notice of such adverse decision and the participant's rights to a USDA National Appeals Division hearing in accordance with 7 CFR part 11. Any adverse decision, whether appealable or non-appealable may be reviewed by the next-level RHS supervisor. 

I80ï¿½1A3550.5 
I89Environmental requirements. 
I11(a) T3Policy.G1T1 RHS will consider environmental quality as equal with economic, social, and other relevant factors in program development and decision-making processes. RHS will take into account potential environmental impacts of proposed projects by working with RHS applicants, other federal agencies, Indian tribes, State and local governments, and interested citizens and organizations in order to formulate actions that advance the program's goals in a manner that will protect, enhance, and restore environmental quality. 
I11(b) T3Regulatory references.G1T1 Processing and servicing actions under this part will be done in accordance with the requirements provided in 7 CFR part 1940, subpart G which addresses environmental requirements and 7 CFR part 1924, subpart A, which addresses lead-based paint. 

I80ï¿½1A3550.6 
I89State law or State supplement. 
I11State and local laws and regulations, and the laws of federally recognized Indian tribes, may affect RHS implementation of certain provisions of this regulation, for example, with respect to the treatment of liens, construction, or environmental policies. Supplemental guidance may be issued in the case of any conflict or significant differences. 

I80ï¿½1A3550.7 
I89Demonstration programs. 
I11From time to time, RHS may authorize limited demonstration programs. The purpose of these demonstration programs is to test new approaches to offering housing under the statutory authority granted to the Secretary. Therefore, such demonstration programs may not be consistent with some of the provisions contained in ï¿½367ï¿½this part. However, any program requirements that are statutory will remain in effect. Demonstration programs will be clearly identified as such. 

I80ï¿½1A3550.8 
I89Exception authority. 
I11An RHS official may request, and the Administrator or designee may make, an exception to any requirement or provision of this part or address any omission of this part that is consistent with the applicable statute if the Administrator determines that application of the requirement or provision, or failure to take action in the case of an omission, would adversely affect the Government's interest. 

I80ï¿½1A3550.9 
I89Conflict of interest. 
I11(a) T3Objective.G1T1 It is the objective of RHS to maintain the highest standards of honesty, integrity, and impartiality by employees. To reduce the potential for employee conflict of interest, all processing, approval, servicing, or review activity will be conducted in accordance with 7 CFR part 1900, subpart D by RHS employees who: 
I11(1) Are not themselves the applicant or borrower; 
I11(2) Are not members of the family or close known relatives of the applicant or borrower; 
I11(3) Do not have an immediate working relationship with the applicant or borrower, the employee related to the applicant or borrower, or the employee who would normally conduct the activity; or 
I11(4) Do not have a business or close personal association with the applicant or borrower. 
I11(b) T3Applicant or borrower responsibility.G1T1 The applicant or borrower must disclose any known relationship or association with an RHS employee when such information is requested. 
I11(c) T3RHS employee responsibility.G1T1 An RHS employee must disclose any known relationship or association with a recipient, regardless of whether the relationship or association is known to others. RHS employees or members of their families may not purchase a Real Estate Owned (REO) property, security property from a borrower, or security property at a foreclosure sale. Loan closing agents who have been involved with a particular property, as well as members of their families, are also precluded from purchasing such properties. 
Q04I20[61 FR 59779, Nov. 22, 1996; 61 FR 65266, Dec. 11, 1996]

I80ï¿½1A3550.10 
I89Definitions. 
I11T3Acceleration.G1T1 Demand for immediate repayment of the entire balance of a debt if the security instruments are breached. 
I11T3Adjusted income.G1T1 Used to determine whether an applicant is income-eligible. Adjusted income provides for deductions to account for varying household circumstances and expenses. See ï¿½1A3550.54 for a complete description of adjusted income. 
I11T3Adjustment.G1T1 An agreement to release a debtor from liability generally upon receipt of an initial lump sum representing the maximum amount the debtor can afford to pay and periodic additional payments over a period of up to 5 years. 
I11T3Amortized payment.G1T1 Equal monthly payments under a fully amortized mortgage loan that provides for the scheduled payment of interest and principal over the term of the loan. 
I11T3Applicant.G1T1 An adult member of the household who will be responsible for repayment of the loan. 
I11T3Assumption.G1T1 The procedure whereby the transferee becomes liable for all or part of the debt of the transferor. 
I11T3Borrower.G1T1 A recipient who is indebted under the section 502 or 504 programs. 
I11T3Cancellation.G1T1 A decision to cease collection activities and release the debtor from personal liability for any remaining amounts owed. 
I11T3Compromise.G1T1 An agreement to release a debtor from liability upon receipt of a specified lump sum that is less than the total amount due. 
I11T3Conditional commitment.G1T1 A determination that a proposed dwelling will qualify as a program-eligible property. The conditional commitment does not reserve funds, nor does it ensure that a program-eligible applicant will be available to buy the dwelling. 
I11T3Cosigner.G1T1 An individual or an entity that joins in the execution of a promissory note to compensate for any deficiency in the applicant's repayment ability. The cosigner becomes jointly ï¿½368ï¿½liable to comply with the terms of the promissory note in the event of the borrower's default, but is not entitled to any interest in the security or borrower rights. 
I11T3Cross-collateralized loan.G1T1 A situation in which a single property secures both RHS and Farm Service Agency loans. 
I11T3Custodial property.G1T1 Borrower-owned real property that serves as security for a loan that has been taken into possession by the Agency to protect the Government's interest. 
I11T3Daily simple interest.G1T1 A method of establishing borrower payments based on daily interest charged on the outstanding principal balance of the loan. Principal is reduced by the amount of payment in excess of the accrued interest. 
I11T3Dealer-contractor.G1T1 A person, firm, partnership, or corporation in the business of selling and servicing manufactured homes and developing sites for manufactured homes. A person, firm, partnership, or corporation not capable of providing the complete service is not eligible to be a dealer-contractor. 
I11T3Debt instrument.G1T1 A collective term encompassing obligating documents for a loan, including any applicable promissory note, assumption agreement, or grant agreement. 
I11T3Deferred mortgage payments.G1T1 A subsidy available to eligible, very low-income borrowers of up to 25 percent of their principal and interest payments at 1 percent for up to 15 years. The deferred amounts are subject to recapture on sale or nonoccupancy. 
I11T3Deficient housing.G1T1 A dwelling that lacks complete plumbing; lacks adequate heating; is dilapidated or structurally unsound; has an overcrowding situation that will be corrected with loan funds; or that is otherwise uninhabitable, unsafe, or poses a health or environmental threat to the occupant or others. 
I11T3Elderly family.G1T1 An elderly family consists of one of the following: 
I11(1) A person who is the head, spouse, or sole member of a family and who is 62 years of age or older, or who is disabled, and is an applicant or borrower; 
I11(2) Two or more persons who are living together, at least 1 of whom is age 62 or older, or disabled, and who is an applicant or borrower; or 
I11(3) In the case of a family where the deceased borrower or spouse was at least 62 years old or disabled, the surviving household member shall continue to be classified as an elderly family for the purpose of determining adjusted income, even though the surviving members may not meet the definition of elderly family on their own, T3provided:G1T1 
I11(i) They occupied the dwelling with the deceased family member at the time of the death; 
I11(ii) If one of the surviving family members is the spouse of the deceased family member, the family shall be classified as an elderly family only until the remarriage of the surviving spouse; and 
I11(iii) At the time of the death of the deceased family member, the dwelling was financed under title V of the Housing Act of 1949, as amended. 
I11T3Escrow account.G1T1 An account to which the borrower contributes monthly payments to cover the anticipated costs of real estate taxes, hazard and flood insurance premiums, and other related costs. 
I11T3Existing dwelling or unit.G1T1 A dwelling that is more than 1 year old, or less than 1 year old and covered by an approved 10-year warranty plan. 
I11T3False information.G1T1 Information that the recipient knew was incorrect or should have known was incorrect that was provided or omitted for the purposes of obtaining assistance for which the recipient was not eligible. 
I11T3Full-time student.G1T1 A person who carries at least the minimum number of credit hours considered to be full-time by college or vocational school in which the person is enrolled. 
I11T3Hazard.G1T1 A condition of the property that jeopardizes the health or safety of the occupants or members of the community, that does not make it unfit for habitation. (See also the definition of major hazard in this section.) 
I11T3Household.G1T1 All persons expected to be living in the dwelling, except for live-in aids, foster children, and foster adults. 
I11T3Housing Act of 1949, as amended.G1T1 The Act which provides the authority for the direct single family housing programs. It is codified at 42 U.S.C. 1471 T3et seq.G1T1 
ï¿½369ï¿½I11T3HUD.G1T1 The U.S. Department of Housing and Urban Development. 
I11T3Inaccurate information.G1T1 Incorrect information inadvertently provided, used, or omitted without the intent to obtain benefits for which the recipient was not eligible. 
I11T3Indian reservation.G1T1 All land located within the limits of any Indian reservation under the jurisdiction of the United States notwithstanding the issuance of any patent and including rights-of-way running through the reservation; trust or restricted land located within the boundaries of a former reservation of a federally recognized Indian tribe in the State of Oklahoma; or all Indian allotments, the titles to which have not been extinguished, if such allotments are subject to the jurisdiction of a federally recognized Indian tribe. 
I11T3Interest credit.G1T1 A payment subsidy available to certain eligible section 502 borrowers that reduces the effective interest rate of a loan (see 3550.68(d)). Borrowers receiving interest credit will continue to receive it on all current and future loans for as long as they remain eligible for and continue to receive a subsidy. Borrowers who cease to be eligible for interest credit can never receive interest credit again, but may receive payment assistance if they again qualify for a payment subsidy. 
I11T3Junior lien.G1T1 A security instrument or a judgment against the security property to which the RHS debt instrument is superior. 
I11T3Legal alien.G1T1 For the purposes of this part, legal alien refers to any person lawfully admitted to the country who meets the criteria in section 214 of the Housing and Community Development Act of 1980, 42 U.S.C. 1436a. 
I11T3Leveraged loan.G1T1 A loan or grant to an Agency borrower from a non-RHS source for the same property, closed simultaneously with an RHS loan. 
I11T3Live-in aide.G1T1 A person who lives with an elderly or disabled person and is essential to that person's care and well-being, not obligated for the person's support, and would not be living in the unit except to provide the support services. 
I11T3Low income.G1T1 An adjusted income that is greater than the HUD established very low-income limit, but that does not exceed the HUD established low-income limit (generally 80 percent of median income adjusted for household size) for the county or Metropolitan Statistical Area where the property is or will be located. 
I11T3Major hazard.G1T1 A condition so severe that it makes the property unfit for habitation. (See also the definition of hazard in this section.) 
I11T3Manufactured home.G1T1 A structure that is built to Federally Manufactured Home Construction and Safety Standard and RHS Thermal Performance Standards. It is transportable in 1 or more sections, which in the traveling mode is 10-body feet (3.048 meters) or more in width, and when erected on site is 400 or more square feet (37.16 square meters), and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities. It is designed and constructed for permanent occupancy by a single family and contains permanent eating, cooking, sleeping, and sanitary facilities. The plumbing, heating, and electrical systems are contained in the structure. A permanent foundation is required. 
I11T3Market value.G1T1 The value of the property as determined by a current appraisal, RHS may authorize the use of a Broker's Price Opinion or similar instrument to determine market value in limited servicing situations. 
I11T3Mobile home.G1T1 A manufactured unit often referred to as a ``trailer,'' designed to be used as a dwelling, but built prior to the enactment of the Housing and Community Development Act of 1980 (Pub. L. 96ï¿½09399) enacted October 8, 1980. 
I11T3Moderate income.G1T1 An adjusted income that is greater than the low-income limit, but that does not exceed the HUD established low-income limit by more than $5,500. 
I11T3Modest housing.G1T1 A property that is considered modest for the area, with a cost that does not exceed the applicable limit established under section 203(b) of the National Housing Act (12 U.S.C. 1709) (unless an exception is approved by RHS). In addition, the property must not be designed for income-producing activities nor have an in-ground swimming pool. 
ï¿½370ï¿½I11T3Modular or panelized home.G1T1 Housing, constructed of one or more factory-built sections or panels, which, when completed, meets or exceeds the requirements of the recognized development standards (model building codes) for site built housing, and which is designed to be permanently connected to a site-built foundation. 
I11T3Moratorium.G1T1 A period of up to 2 years during which scheduled payments are not required, but are subject to repayment at a later date. 
I11T3Mortgage.G1T1 A form of security instrument or consensual lien on real property including a real estate mortgage or a deed of trust. 
I11T3Net family assets.G1T1 The value of assets available to a household that could be used towards housing costs. Net family assets are considered in the calculation of annual income and are used to determine whether the household must make additional cash contributions to improve or purchase the property. 
I11T3Net recovery value.G1T1 The market value of the security property minus anticipated expenses of liquidation, acquisition, and sale as determined by RHS. 
I11T3New dwelling.G1T1 A dwelling that is to be constructed, or an already-existing dwelling that is less than 1 year old and is not covered by an approved 10-year warranty plan. 
I11T3Nonprogram (NP) interest rate.G1T1 The interest rate offered by RHS for loans made on NP terms. 
I11T3NP property.G1T1 Property that does not meet the program eligibility requirements outlined in ï¿½1A3550.56 and 3550.57. 
I11T3NP terms.G1T1 Credit terms available from RHS when the applicant or property is not program-eligible. 
I11T3Offset.G1T1 Deductions to pay a debt owed to RHS from a borrower's retirement benefits, salary, income tax refund, or payments from other federal agencies to the borrower. Deductions from retirement benefits and salary generally apply only to current and former federal employees. 
I11T3Participant.G1T1 For the purpose of reviews and appeals, a participant is any individual or entity who has applied for, or whose right to participate in or receive a payment, loan, or other benefit is affected by an RHS decision. 
I11T3Payment assistance.G1T1 A payment subsidy available to eligible section 502 borrowers that reduces the effective interest rate of a loan (see ï¿½1A3550.68(c)). Borrowers eligible for a payment subsidy receive payment assistance unless they are currently eligible for and receive interest credit. 
I11T3Payment subsidy.G1T1 A general term for subsidies which reduce the borrower's scheduled payment. It refers to either payment assistance or interest credit. 
I11T3Person with disability.G1T1 Any person who has a physical or mental impairment that substantially limits one or more major life activities, including functions such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning and working, has a record of such an impairment, or is regarded as having such an impairment. 
I11T3PITI ratio.G1T1 The amount paid by the borrower for principal, interest, taxes, and insurance (PITI), divided by repayment income. 
I11T3Principal reduction attributed to subsidy (PRAS).G1T1 Accelerated principal reduction that can occur when a borrower receives a reduced interest rate through a payment subsidy. 
I11T3Prior lien.G1T1 A security instrument or a judgment against the security property that is superior to the RHS debt instrument. 
I11T3Program-eligible applicant.G1T1 Any applicant meeting the eligibility requirements described in ï¿½1A3550.53. 
I11T3Program-eligible property.G1T1 A property eligible to be financed under this part, as determined by the criteria listed in ï¿½1A3550.56 through 3550.59. 
I11T3Program terms.G1T1 Credit terms that are available only to program-eligible applicants for program-eligible properties. 
I11T3Property.G1T1 The land, dwelling, and related facilities for which the applicant will use RHS assistance. 
I11T3Protective advances.G1T1 Costs incurred by the Agency to protect the security interest of the Government that are charged to the borrower's account. 
I11T3Real estate taxes.G1T1 Taxes and the annual portion of assessments estimated to be due and payable on the property, reduced by any available tax exemption. 
I11T3Recapture amount.G1T1 An amount of subsidy to be repaid by the borrower upon ï¿½371ï¿½disposition or nonoccupancy of the property. 
I11T3Recipient.G1T1 Any applicant, borrower, or grant recipient who applies for or receives assistance under the section 502 or 504 programs. 
I11T3REO.G1T1 The acronym for ``Real Estate Owned.'' It refers to property for which RHS holds title. 
I11T3Repayment income.G1T1 Used to determine whether an applicant has the ability to make monthly loan payments. Repayment income includes amounts excluded for the purpose of determining adjusted income. See ï¿½1A3550.54 for a complete description. 
I11T3RHS.G1T1 The Rural Housing Service of the U.S. Department of Agriculture, or its successor agency, formerly the Rural Housing and Community Development Service (RHCDS), a successor agency to the Farmers Home Administration (FmHA). 
I11T3RHS employee.G1T1 Any employee of RHS, or any employee of the Rural Development mission area who carries out grant or loan origination or servicing functions for the section 502 or 504 programs. 
I11T3RHS interest rate.G1T1 The unsubsidized interest rate offered by RHS for loans made on program terms. 
I11T3Rural area.G1T1 A rural area is: 
I11(1) Open country which is not part of or associated with an urban area. 
I11(2) Any town, village, city, or place, including the immediate adjacent densely settled area, which is not part of or associated with an urban area and which: 
I11(i) Has a population not in excess of 10,000 if it is rural in character; or 
I11(ii) Has a population in excess of 10,000 but not in excess of 20,000, is not contained within a Metropolitan Statistical Area, and has a serious lack of mortgage credit for low- and moderate-income households as determined by the Secretary of Agriculture and the Secretary of HUD. 
I11(3) An area classified as a rural area prior to October 1, 1990, (even if within a Metropolitan Statistical Area), with a population exceeding 10,000, but not in excess of 25,000, which is rural in character, and has a serious lack of mortgage credit for low- and moderate-income families. This is effective through receipt of census data for the year 2000. 
I11T3Rural Development.G1T1 A mission area within USDA which includes RHS, Rural Utilities Service (RUS), and Rural Business-Cooperative Service (RBS). 
I11T3Scheduled payment.G1T1 The monthly or annual installment on a promissory note plus escrow (if required), as modified by any payment subsidy agreement, delinquency workout agreement, other documented agreements between RHS and the borrower, or protective advances. 
I11T3Secured loan.G1T1 A loan that is collateralized by property so that in the event of a default on the loan, the property may be sold to satisfy the debt. 
I11T3Security property.G1T1 All the property that serves as collateral for an RHS loan. 
I11T3Subsidy.G1T1 Interest credit, payment assistance, or deferred mortgage assistance received by a borrower under the section 502 or 504 programs. 
I11T3Total debt ratio.G1T1 The amount paid by the borrower for PITI and any recurring monthly debt, divided by repayment income. 
I11T3Unauthorized assistance.G1T1 Any loan, payment subsidy, deferred mortgage payment, or grant for which there was no regulatory authorization or for which the recipient was not eligible. 
I11T3U.S. citizen.G1T1 An individual who resides as a citizen in any of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Marianas, the Federated States of Micronesia, the Republic of Palau, or the Republic of the Marshall Islands. 
I11T3USDA.G1T1 The United States Department of Agriculture. 
I11T3Unsecured loan.G1T1 A loan evidenced only by the borrower's promissory note. 
I11T3Value appreciation.G1T1 The current market value of the property minus: the balance due prior lienholders, the unpaid balance of the RHS debt, unreimbursed closing costs (if any), principal reduction, the original equity (if any) of the borrower, and the value added by capital improvements. 
ï¿½372ï¿½I11T3Very low-income.G1T1 An adjusted income that does not exceed the HUD- established very low-income limit (generally 50 percent of median income adjusted for household size) for the county or the Metropolitan Statistical Area where the property is or will be located. 
I11T3Veterans preference.G1T1 A preference extended to any person applying for a loan or grant under this part who served on active duty and has been discharged or released from the active forces on conditions other than dishonorable from the United States Army, Navy, Air Force, Marine Corps, or Coast Guard. The preference applies to the serviceperson, or the family of a deceased serviceperson who died in service before the termination of such war or such period or era. The applicable timeframes are: 
I11(1) During the period of April 6, 1917, through March 31, 1921; 
I11(2) During the period of December 7, 1941, through December 31, 1946; 
I11(3) During the period of June 27, 1950, through January 31, 1955; 
I11(4) For a period of more than 180 days, any part of which occurred after January 31, 1955, but on or before May 7, 1975; or
I11(5) During the period beginning August 2, 1990, and ending the date prescribed by Presidential Proclamation or law. 
Q04I20[61 FR 59779, Nov. 22, 1996; 61 FR 65266, Dec. 11, 1996]

I80ï¿½1A3550.11ï¿½093550.49
I89[Reserved] 

I80ï¿½1A3550.50 
I89OMB control number. 
I11The information collection requirements contained in this regulation have been approved by the Office of Management and Budget (OMB) and have been assigned OMB control number 0575ï¿½090166. Public reporting burden for this collection of information is estimated to vary from 5 minutes to 3 hours per response, with an average of 1\1/2\ hours per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to the Department of Agriculture, Clearance Officer, STOP 7602, 1400 Independence Ave, SW., Washington, DC 20250ï¿½097602. You are not required to respond to this collection of information unless it displays a currently valid OMB control number. 

I56Subpart B_Section 502 Origination 

I80ï¿½1A3550.51 
I89Program objectives. 
I11Section 502 of the Housing Act of 1949, as amended authorizes the Rural Housing Service (RHS) to provide financing to help low- and very low-income persons who cannot obtain credit from other sources obtain adequate housing in rural areas. Resources for the section 502 program are limited, and therefore, applicants are required to use section 502 funds in conjunction with funding or financing from other sources, if feasible. Sections 3550.52 through 3550.73 set forth the requirements for originating loans on program terms. Section 3550.74 describes the differences for originating loans on nonprogram (NP) terms. 

I80ï¿½1A3550.52 
I89Loan purposes. 
I11Section 502 funds may be used to buy, build, rehabilitate, improve, or relocate an eligible dwelling and provide related facilities for use by the borrower as a permanent residence. In limited circumstances section 502 funds may be used to refinance existing debt. 
I11(a) T3Purchases from existing RHS borrowers.G1T1 To purchase a property currently financed by an RHS loan, the new borrower must assume the existing RHS indebtedness. Section 502 funds may be used to provide additional financing or make repairs. Loan funds also may be used to permit a remaining borrower to purchase the equity of a departing co-borrower. 
I11(b) T3Refinancing non-RHS loans.G1T1 Debt from an existing non-RHS loan may be refinanced if the existing debt is secured by a lien against the property, RHS will have a first lien position on the security property after refinancing, and: 
I11(1) In the case of loans for existing dwellings, if: 
ï¿½373ï¿½I11(i) Due to circumstances beyond the applicant's control, the applicant is in danger of losing the property; and 
I11(ii) The debt is over $5,000 and was incurred for eligible program purposes prior to loan application or was a protective advance made by the mortgagee for items covered by the loan to be refinanced, including accrued interest, insurance premiums, real estate tax advances, or preliminary foreclosure costs. 
I11(2) In the case of loans for a building site without a dwelling, if: 
I11(i) The debt to be refinanced was incurred for the sole purpose of purchasing the site;
I11(ii) The applicant is unable to acquire adequate housing without refinancing; and 
I11(iii) The RHS loan will include funds to construct an appropriate dwelling on the site for the applicant's use. 
I11(3) Debts incurred after the date of RHS loan application but before closing may be refinanced if the costs are incurred for eligible loan purposes and any construction work conforms to the standards specified in this part. 
I11(c) T3Refinancing RHS debt.G1T1 Under limited circumstances, an existing RHS loan may be refinanced in accordance with ï¿½1A3550.204 to allow the borrower to receive payment assistance. 
I11(d) T3Eligible costs.G1T1 Improvements financed with loan funds must be on land which, after closing, is part of the security property. In addition to acquisition, construction, repairs, or the cost of relocating a dwelling, loan funds may be used to pay for: 
I11(1) Reasonable expenses related to obtaining the loan, including legal, architectural and engineering, technical, title clearance, and loan closing fees; and appraisal, surveying, environmental, tax monitoring, and other technical services; and personal liability insurance fees for Mutual Self-Help borrowers. 
I11(2) The cost of providing special design features or equipment when necessary because of a physical disability of the applicant or a member of the household. 
I11(3) Reasonable connection fees, assessments, or the pro rata installment costs for utilities such as water, sewer, electricity, and gas for which the borrower is liable and which are not paid from other funds. 
I11(4) Reasonable and customary lender charges and fees if the RHS loan is being made in combination with a leveraged loan. 
I11(5) Real estate taxes that are due and payable on the property at the time of closing and for the establishment of escrow accounts for real estate taxes, hazard and flood insurance premiums, and related costs. 
I11(6) Fees to public and private nonprofit organizations that are tax exempt under the Internal Revenue Code for the development and packaging of loan applications, except for loans related to the purchase of an RHS Real Estate Owned (REO) property. 
I11(7) Purchasing and installing essential equipment in the dwelling, including ranges, refrigerators, washers or dryers, if these items are normally sold with dwellings in the area and if the purchase of these items is not the primary purpose of the loans. 
I11(8) Purchasing and installing approved energy savings measures and approved furnaces and space heaters that use fuel that is commonly used, economical, and dependably available. 
I11(9) Providing site preparation, including grading, foundation plantings, seeding or sodding, trees, walks, yard fences, and driveways to a building site. 
I11(e) T3Loan restrictions.G1T1 Loan funds may not be used to: 
I11(1) Purchase an existing manufactured home, or for any other purposes prohibited in ï¿½1A3550.73(b). 
I11(2) Purchase or improve income-producing land or buildings to be used principally for income-producing purposes. 
I11(3) Pay fees, commissions, or charges to for-profit entities related to loan packaging or referral of prospective applicants to RHS. 

I80ï¿½1A3550.53
I89Eligibility requirements. 
I11(a) T3Income eligibility.G1T1 At the time of loan approval, the household's adjusted income must not exceed the applicable low-income limit for the area, and at closing, must not exceed the applicable moderate-income limit for the area (see ï¿½1A3550.544). 
ï¿½374ï¿½I11(b) T3Citizenship status.G1T1 The applicant must be a United States citizen or a noncitizen who qualifies as a legal alien as defined in ï¿½1A3550.10. 
I11(c) T3Primary residence.G1T1 Applicants must agree to and have the ability to occupy the dwelling on a permanent basis. 
I11(1) Because of the probability of transfer, loans will not be approved for military personnel on active duty unless the applicant will be discharged within a reasonable period of time. 
I11(2) Because of the probability of moves after graduation, loans will not be approved for a full-time student unless the applicant intends to make the home a permanent residence and there are reasonable prospects that employment will be available in the area after graduation. 
I11(3) If the home is being constructed or renovated an adult member of the household must be available to make inspections and authorize progress payments as the dwelling is being constructed. 
I11(d) T3Eligibility of current homeowners.G1T1 Current homeowners are not eligible for initial loans except as follows: 
I11(1) Current homeowners may receive RHS loan funds to: 
I11(i) Refinance an existing loan under the conditions outlined in ï¿½1A3550.52(b); 
I11(ii) Purchase a new dwelling if the current dwelling is deficient housing as defined in ï¿½1A3550.10; or 
I11(iii) Make necessary repairs to the property which is financed with an affordable non- RHS loan. 
I11(2) Current homeowners with an RHS loan may receive a subsequent loan. 
I11(e) T3Legal capacity.G1T1 Applicants must have the legal capacity to incur the loan obligation, or have a court appointed guardian or conservator who is empowered to obligate the applicant in real estate matters. 
I11(f) T3Suspension or debarment.G1T1 Applications from applicants who have been suspended or debarred from participation in federal programs will be handled in accordance with 7 CFR part 3017. 
I11(g) T3Repayment ability.G1T1 Applicants must demonstrate adequate repayment ability. 
I11(1) A very low-income applicant is considered to have repayment ability when the monthly amount required for payment of principal, interest, taxes, and insurance (PITI) does not exceed 29 percent of the applicant's repayment income, and the monthly amount required to pay PITI plus recurring monthly debts does not exceed 41 percent of the applicant's repayment income. 
I11(2) A low-income applicant is considered to have repayment ability when the monthly amount required for payment of PITI does not exceed 33 percent of the applicant's repayment income, and the monthly amount required to pay PITI plus recurring monthly debts does not exceed 41 percent of repayment income. 
I11(3) Repayment ratios may exceed the percentages specified in paragraphs (g)(1) and (g)(2) of this section if the applicant has demonstrated an ability to meet higher debt obligations, or if RHS determines, based on other compensating factors, that the household has a higher repayment ability. 
I11(4) If an applicant does not meet the repayment ability requirements, the applicant can have another party join the application as a cosigner. 
I11(5) If an applicant does not meet the repayment ability requirements, the applicant can have other household members join the application. 
I11(h) T3Credit qualifications.G1T1 Applicants must be unable to secure the necessary credit from other sources on terms and conditions that the applicant could reasonably be expected to fulfill. Applicants must have a credit history that indicates reasonable ability and willingness to meet debt obligations. An applicant with an outstanding judgment obtained by the United States in a federal court, other than the United States Tax Court, is not eligible for a loan or grant from RHS. 
I11(1) Indicators of unacceptable credit include: 
I11(i) Incidents of more than 2 debt payments more than 30 days late within the last 12 months. 
I11(ii) A foreclosure which has been completed within the last 36 months. 
I11(iii) An outstanding Internal Revenue Service tax lien or any other outstanding tax liens with no satisfactory arrangement for payment. 
ï¿½375ï¿½I11(iv) A court-created or court-affirmed obligation or judgment caused by nonpayment that is currently outstanding or has been outstanding within the last 12 months, except for those excluded in paragraphs (h)(2)(i) and (h)(2)(ii) of this section. 
I11(v) Two or more rent payments paid 30 or more days late within the last 2 years. If the applicant has experienced no other credit problems in the past 2 years, only 1 year of rent history will be evaluated. Rent payment history requirements may be waived if the RHS loan will reduce shelter costs significantly and contribute to an improved repayment ability. 
I11(vi) Outstanding collection accounts with a record of irregular payment with no satisfactory arrangements for repayment, or collection accounts that were paid in full within the last 6 months. 
I11(vii) Non-agency debts written off within the last 36 months unless paid in full at least 12 months ago. 
I11(viii) Agency debts that were debt settled, or are being considered for debt settlement. 
I11(ix) Delinquency on a federal debt. 
I11(2) The following will not be considered indicators of unacceptable credit: 
I11(i) A bankruptcy in which debts were discharged more than 36 months prior to the date of application or where an applicant successfully completed a bankruptcy debt restructuring plan and has demonstrated a willingness to meeting obligations when due for the 12 months prior to the date of application. 
I11(ii) A judgment satisfied more than 12 months before the date of application. 
I11(3) When an application is rejected because of unacceptable credit, the applicant will be informed of the reason and source of information. 

I80ï¿½1A3550.54
I89Calculation of income and assets. 
I11(a) T3Repayment income.G1T1 Repayment income is the annual amount of income from all sources that are expected to be received by those household members who are parties to the promissory note, except for any student financial aid received by these household members for tuition, fees, books, equipment, materials, and transportation. Repayment income is used to determine the household's ability to repay a loan. 
I11(b) T3Annual income.G1T1 Annual income is the income of all household members from all sources except those listed in (b)(1) through (b)(12) of this section: 
I11(1) Earned income of persons under the age of 18 unless they are a borrower or a spouse of a member of the household;
I11(2) Payments received for the care of foster children or foster adults;
I11(3) Amounts granted for or in reimbursement of the cost of medical expenses; 
I11(4) Earnings of each full-time student 18 years of age or older, except the head of household or spouse, that are in excess of any amount determined pursuant to section 501(b)(5) of the Housing Act of 1949, as amended;
I11(5) Temporary, nonrecurring, or sporadic income (including gifts);
I11(6) Lump sum additions to family assets such as inheritances; capital gains; insurance payments under health, accident, or worker's compensation policies; settlements for personal or property losses; and deferred periodic payments of supplemental security income and Social Security benefits received in a lump sum;
I11(7) Any earned income tax credit;
I11(8) Adoption assistance in excess of any amount determined pursuant to section 501(b)(5) of the Housing Act of 1949, as amended;
I11(9) Amounts received by the family in the form of refunds or rebates under State or local law for property taxes paid on the dwelling;
I11(10) Amounts paid by a State agency to a family with a developmentally disabled family member living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member at home;
I11(11) The full amount of any student financial aid; and 
I11(12) Any other revenue exempted by a Federal statute; a list of which is available from any Rural Development office. 
I11(c) T3Adjusted income.G1T1 Adjusted income is used to determine program eligibility for sections 502 and 504 and the amount of payment subsidy for which ï¿½376ï¿½the household qualifies under section 502. Adjusted income is annual income as defined in paragraph (b) of this section less any of the following deductions for which the household is eligible. 
I11(1) For each family member, except the head of household or spouse, who is under 18 years of age, 18 years of age or older with a disability, or a full-time student, the amount determined pursuant to section 501(b)(5) of the Housing Act of 1949, as amended. 
I11(2) A deduction of reasonable expenses for the care of minor 12 years of age or under that: 
I11(i) Enable a family member to work or to further a member's education;
I11(ii) Are not reimbursed or paid by another source; and 
I11(iii) In the case of expenses to enable a family member to work do not exceed the amount of income earned by the family member enabled to work. 
I11(3) Expenses related to the care of household members with disabilities that: 
I11(i) Enable a family member to work;
I11(ii) Are not reimbursed from insurance or another source; and 
I11(iii) Are in excess of three percent of the household's annual income. 
I11(4) For any elderly family, a deduction in the amount determined pursuant to section 501(b)(5) of the Housing Act of 1949, as amended. 
I11(5) For elderly households only, a deduction for household medical expenses that are not reimbursed from insurance or another source and which in combination with any expenses related to the care of household members with disabilities described in paragraph (c)(3) of this section, are in excess of three percent of the household's annual income. 
I11(d) T3Net family assets.G1T1 Income from net family assets must be included in the calculation of annual and repayment income. Net family assets also are considered in determining whether a down payment is required. 
I11(1) Net family assets include the cash value of: 
I11(i) Equity in real property, other than the dwelling or site;
I11(ii) Cash on hand and funds in savings or checking accounts; 
I11(iii) Amounts in trust accounts that are available to the household; 
I11(iv) Stocks, bonds, and other forms of capital investments including life insurance policies and retirement plans that are accessible to the applicant without retiring or terminating employment; 
I11(v) Lump sum receipts such as lottery winnings, capital gains, inheritances; 
I11(vi) Personal property held as an investment; and 
I11(vii) Any value, in excess of the consideration received, for any business or household assets disposed for less than fair market value during the 2 years preceding the income determination. The value of assets disposed of for less than fair market value shall not be considered if they were disposed of as a result of foreclosure or bankruptcy or a divorce or separation settlement. 
I11(2) Net family assets do not include: 
I11(i) Interest in American Indian trust land; 
I11(ii) Cash on hand which will be used to reduce the amount of the loan; 
I11(iii) The value of necessary items of personal property; 
I11(iv) Assets that are part of the business, trade, or farming operation of any member of the household who is actively engaged in such operation; 
I11(v) The value of an irrevocable trust fund or any other trust over which no member of the household has control. 

I80ï¿½1A3550.55
I89Applications.
I11(a) T3Application submissions.G1T1 All persons applying for RHS loans must file a complete written application in a format specified by RHS. Applications will be accepted even when funds are not available. 
I11(b) T3Application processing.G1T1 (1) Incomplete applications will be returned to the applicant specifying in writing the additional information that is needed to make the application complete. 
I11(2) An applicant may voluntarily withdraw an application at any time. 
I11(3) RHS may periodically request in writing that applicants reconfirm their interest in obtaining a loan. RHS may withdraw the application of any applicant who does not respond within the specified timeframe. 
ï¿½377ï¿½I11(4) Applicants who are eligible will be notified in writing. If additional information becomes available that indicates that the original eligibility determination may have been incorrect, or that circumstances have changed, RHS may reconsider the application and the applicant may be required to submit additional information. 
I11(5) Applicants who are ineligible will be notified in writing and provided with the specific reasons for the rejection. 
I11(c) T3Selection for processing.G1T1 When funding is not sufficient to serve all program-eligible applicants, applications will be selected for processing using the funding priorities specified in this paragraph. Within priority categories, applications will be processed in the order that the completed applications are received. In the case of applications with equivalent priority status that are received on the same day, preference will be extended to applicants qualifying for a veterans preference. After selection for processing, loans are funded on a first-come, first-served basis. 
I11(1) First priority will be given to existing customers who request subsequent loans to correct health and safety hazards. 
I11(2) Second priority will be given to loans related to the sale of an REO property or the transfer of an exisiting RHS financed property. 
I11(3) Third priority will be given to applicants facing housing related hardships including applicants who have been living in deficient housing for more than 6 months, current homeowners in danger of losing a property through foreclosure, and other circumstances determined by RHS on a case-by-case basis to constitute a hardship. 
I11(4) Fourth priority will be given to applicants seeking, loans for the construction of dwellings in an RHS-approved Mutual Self-Help project or loans that will leverage funding or financing from other sources. 
I11(5) Applications from applicants who do not qualify for priority consideration in paragraphs (c)(1), (c)(2), (c)(3), or (c)(4) of this section will be selected for processing after all applications with priority status have been processed. 
I11(d) T3Applicant timeframe.G1T1 RHS will specify a reasonable timeframe within which eligible applicants selected for processing must provide the information needed to underwrite the loan. 

I80ï¿½1A3550.56
I89Site requirements. 
I11(a) T3Rural areas.G1T1 Loans may be made only in rural areas designated by RHS. If an area designation is changed to non-rural: 
I11(1) New conditional commitments will be made and existing conditional commitments will be honored only in conjunction with an applicant for a section 502 loan who applied for assistance before the area designation changed. 
I11(2) REO property sales and transfers with assumption may be processed. 
I11(3) Subsequent loans may be made either in conjunction with a transfer with assumption of an RHS loan or to repair properties that have RHS loans. 
I11(b) T3Site standards.G1T1 Sites must be developed in accordance with 7 CFR part 1924, subpart C and any applicable standards imposed by a State or local government. 
I11(1) The site must not be large enough to subdivide into more than one site under existing local zoning ordinances;
I11(2) The site must not include farm service buildings, though small outbuildings such as a storage shed may be included; and
I11(3) The value of the site must not exceed 30 percent of the as improved market value of the property. The State Director may waive the 30 percent requirement in high cost areas where other lenders permit a higher percentage. 

I80ï¿½1A3550.57
I89Dwelling requirements. 
I11(a) T3Modest dwelling.G1T1 The property must be one that is considered modest for the area, must not be designed for income providing purposes, must not have an in-ground pool or have a cost in excess of the section 203(b) limit of the National Housing Act unless RHS authorizes an exception: 
I11(1) T3Area-wide exception.G1T1 Area-wide exceptions may be granted when RHS determines that the section 203(b) limit is ï¿½378ï¿½too low to enable applicants to purchase adequate housing. 
I11(2) T3Individual exceptions.G1T1 Individual exceptions may be granted to accommodate the specific needs of an applicant, such as to serve exceptionally large households or to provide reasonable accommodation for a household member with a disability. Any additional loan amount approved must not exceed the amount required to address the specific need. 
I11(b) T3New dwellings.G1T1 Construction must meet the requirements in 7 CFR part 1924, subpart A. 
I11(c) T3Existing dwellings.G1T1 Existing dwellings must be structurally sound; functionally adequate; in good repair, or to be placed in good repair with loan funds; have adequate electrical, heating, plumbing, water, and wastewater disposal systems; be free of termites and other wood damaging pests and organisms; and meet the thermal performance requirements for existing dwellings of 7 CFR part 1924, subpart A. 

I80ï¿½1A3550.58 
I89Ownership requirements. 
I11After the loan is closed, the borrower must have an acceptable interest in the property as evidenced by one of the following. 
I11(a) T3Fee-simple ownership.G1T1 Acceptable fee-simple ownership is evidenced by a fully marketable title with a deed vesting a fee-simple interest in the property to the borrower. 
I11(b) T3Secure leasehold interest.G1T1 A written lease is required. To be acceptable, a leasehold interest must have an unexpired term that is at least 150 percent of the term of the mortgage, unless the loan is guaranteed, in which case the unexpired term of the lease must be at least 2 years longer than the loan term. In no case may the unexpired term be less than 25 years. 
I11(c) T3Life estate interest.G1T1 To be acceptable a life estate interest must provide the borrower with rights of present possession, control, and beneficial use of the property. Generally, persons with any remainder interests must be signatories to the mortgage. All of the remainder interests need not be included in the mortgage to the extent that one or more of the persons holding remainder interests are not legally competent (and there is no representative who can legally consent to the mortgage), cannot be located, or if the remainder interests are divided among such a large number of people that it is not practical to obtain the signatures of all of the remainder interests. In such cases, the loan may not exceed the value of the property interests owned by the persons executing the mortgage. 
I11(d) T3Undivided interest.G1T1 All legally competent co-owners will be required to sign the mortgage. When one or more of the co-owners are not legally competent (and there is no representative who can legally consent to the mortgage), cannot be located, or the ownership interests are divided among so large a number of co- owners that it is not practical for all of their interests to be mortgaged, their interests not exceeding 50 percent may be excluded from the security requirements. In such cases, the loan may not exceed the value of the property interests owned by the persons executing the mortgage. 
I11(e) T3Possessory rights.G1T1 Acceptable forms of ownership include possessory rights on an American Indian reservation or State-owned land and the interest of an American Indian in land held in severalty under trust patents or deeds containing restrictions against alienation, provided that land in trust or restricted status will remain in trust or restricted status. 

I80ï¿½1A3550.59 
I89Security requirements. 
I11Before approving any loan, RHS will impose requirements to secure its interests. 
I11(a) T3Adequate security.G1T1 A loan will be considered adequately secured only when all of the following requirements are met: 
I11(1) RHS obtains at closing a mortgage on all ownership interests in the security property or the requirements of ï¿½1A3550.58 are satisfied. 
I11(2) No liens prior to the RHS mortgage exist at the time of closing and no junior liens are likely to be taken immediately subsequent to or at the time of closing, unless the other liens are taken as part of a leveraging strategy or the RHS loan is essential for repairs and the senior lien secures an affordable non-RHS loan. Liens junior to the ï¿½379ï¿½RHS lien may be allowed at loan closing if the junior lien will not interfere with the purpose or repayment of the RHS loan and the total value of all liens on the property is less than or equal to the property's market value. 
I11(3) The provisions of 7 CFR part 1927, subpart B regarding title clearance and the use of legal services have been followed. 
I11(4) Existing and proposed property improvements are totally on the site and do not encroach on adjoining property. 
I11(b) T3Guaranteed payment.G1T1 Mortgage insurance guaranteeing payment from a Government agency or Indian tribe is adequate security. 

I80ï¿½1A3550.60 
I89Escrow account. 
I11RHS may require that customers deposit into an escrow account amounts necessary to ensure that the account will contain sufficient funds to pay real estate taxes, hazard and flood insurance premiums, and other related costs when they are due in accordance with the Real Estate Settlement and Procedures Act of 1974 (RESPA) (12 U.S.C. 2601, T3et seq.G1T1) and section 501(e) of the Housing Act of 1949, as amended. 

I80ï¿½1A3550.61 
I89Insurance. 
I11(a) T3Customer responsibility.G1T1 Until the loan is paid in full the customer must furnish and continually maintain hazard and flood insurance on property securing RHS loans, with companies, in amounts, and on terms and conditions acceptable to RHS. Customers who are required to have insurance may be required to escrow funds to ensure payment. All policies must have a ``loss payable clause'' payable to RHS to protect the Government's interest. 
I11(b) T3Amount.G1T1 Essential buildings must be insured in an amount at least equal to the balance of the secured debts. 
I11(c) T3Flood insurance.G1T1 Flood insurance must be obtained and maintained for the life of the loan for all property located in a Special Flood Hazard Area (SFHA) as determined by the Federal Emergency Management Agency (FEMA). RHS actions will be consistent with 7 CFR part 1806, subpart B which addressed flood insurance requirements. If flood insurance through FEMA's National Flood Insurance Program is not available in an SFHA, the property is not eligible for federal financial assistance. 
I11(d) T3Losses.G1T1 (1) Loss deductible clauses may not exceed $250 or 1 percent of the insurance coverage, whichever is greater. The deductible for any 1 building may not exceed $750. 
I11(2) Customers must immediately notify RHS of any loss or damage to insured property and collect the amount of the loss from the insurance company. 
I11(3) Depending on the amount of the loss, RHS may require that loss payments be supervised. All repairs and replacements done by or under the direction of the borrower, or by contract, will be planned, performed, inspected, and paid for in accordance with 7 CFR part 1924, subpart A. 
I11(4) When insurance funds remain after all repairs, replacements, and other authorized disbursements have been made, the funds will be applied in the following order: 
I11(i) Prior liens, including delinquent property taxes. 
I11(ii) Past-due amounts. 
I11(iii) Protective advances due. 
I11(iv) Released to the customer if the RHS debt is adequately secured. 
I11(5) If a loss occurs when insurance is not in force, the borrower is responsible for making the needed repairs or replacements and ensuring that the insurance is reinstated on the property. 
I11(6) If the borrower is not financially able to make the repairs, RHS may take one of the following actions: 
I11(i) Make a subsequent loan for repairs. 
I11(ii) Subordinate the RHS lien to permit the borrower to obtain funds for needed repairs from another source. 
I11(iii) Permit the borrower to obtain funds secured by a junior lien from another source. 
I11(iv) Make a protective advance to protect the Government's interest. 
I11(v) Accelerate the account. 

I80ï¿½1A3550.62 
I89Appraisals. 
I11(a) T3Requirement.G1T1 An appraisal is required when the debt to be secured exceeds $15,000 or whenever RHS determines that it is necessary to establish the adequacy of the security. Appraisals must be made in accordance with ï¿½380ï¿½the Uniform Standards of Professional Appraisal Practices. When other real estate is taken as additional security, it will be appraised if it represents a substantial portion of the security for the loan. 
I11(b) T3Fees.G1T1 RHS will charge a fee for each loan application that requires an appraisal, except the appraisal fee is not required on appraisals done for subsequent loans needed to make minimal, essential repairs or in cases where another party provides an appraisal which is acceptable to RHS. Fees collected in connection with a dwelling constructed under an approved conditional commitment will be paid to the contractor at closing to offset the cost of the real estate appraisal that is included in the conditional commitment fee. 

I80ï¿½1A3550.63 
I89Maximum loan amount. 
I11Total secured indebtedness must not exceed the section 203(b) or market value limitations specified in paragraphs (a) and (b) of this section. In addition, the borrower may also finance the amount of the RHS appraisal and tax monitoring fee and the amount required to establish an escrow account for taxes and insurance over and above the limitations specified below. This section does not apply to NP loans. 
I11(a) T3Section 203(b) limitation.G1T1 The section 203(b) limitation is the amount established by 203(b) of the National Housing Act, unless RHS authorizes an exception, as described in ï¿½1A3550.57(a) of this subpart. 
I11(b) T3Market value limitation.G1T1 (1) The market value limitation is 100 percent of market value for existing housing and for new dwellings for which RHS will receive adequate documentation of construction quality and the source of such documentation is acceptable to RHS. 
I11(2) The market value limitation is 90 percent of market value for new dwellings for which adequate documentation of construction quality is not available. 
I11(3) The market value limitation can be increased by: 
I11(i) Up to one percent, if RHS makes a subsequent loan for closing costs only, in conjunction with the sale of an REO property or an assumption. 
I11(ii) The amount necessary to make a subsequent loan for repairs necessary to protect the Government's interest, and reasonable closing costs. 
I11(iii) The amount necessary to refinance an existing borrower's RHS loans, plus closing costs associated with the new loan. 
Q04I20[61 FR 59779, Nov. 22, 1996; 61 FR 65266, Dec. 11, 1996]

I80ï¿½1A3550.64 
I89Down payment. 
I11Elderly families must use any net family assets in excess of $10,000 towards a down payment on the property. Non-elderly families must use net family assets in excess of $7,500 towards a down payment on the property. Applicants may contribute assets in addition to the required down payment to further reduce the amount to be financed. 

I80ï¿½1A3550.65
I89[Reserved] 

I80ï¿½1A3550.66 
I89Interest rate. 
I11Loans will be written using the applicable RHS or NP interest rate in effect at loan approval or loan closing, whichever is lower. Information about current interest rates is available in any Rural Development office. 

I80ï¿½1A3550.67 
I89Repayment period. 
I11Loans will be scheduled for repayment over a period that does not exceed the expected useful life of the property as a dwelling. The loan repayment period will not exceed: 
I11(a) Thirty-three years in all cases except as noted in paragraphs (b), (c), and (d) of this section. 
I11(b) Thirty-eight years: 
I11(1) For initial loans, or subsequent loans made in conjunction with an assumption, if the applicant's adjusted income does not exceed 60 percent of the area adjusted median income and the longer term is necessary to show repayment ability. 
I11(2) For subsequent loans not made in conjunction with an assumption if the applicant's initial loan was for a period of 38 years, the applicant's adjusted income at the time the subsequent loan is approved does not exceed 60 percent of area adjusted median income, and the longer terms is necessary to show repayment ability. 
ï¿½381ï¿½I11(c) Ten years for loans not exceeding $2,500. 
I11(d) Thirty years for manufactured homes. 

I80ï¿½1A3550.68 
I89Payment subsidies. 
I11RHS administers two types of payment subsidies: payment assistance and interest credit. Payment subsidies are subject to recapture when the borrower transfers title or ceases to occupy the property. 
I11(a) T3Eligibility for payment subsidy.G1T1 (1) Applicants or borrowers who receive loans on program terms are eligible to receive payment subsidy if they personally occupy the property and have adjusted income at or below the applicable moderate-income limit. 
I11(2) Borrowers with loans approved before August 1, 1968, are not eligible for payment assistance, even if they assumed the loan after that date. 
I11(3) Payment assistance may be granted for initial loans or subsequent loans made in conjunction with an assumption only if the term of the loan is at least 25 years or more. 
I11(4) Payment assistance may be granted for subsequent loan not made in conjunction with an assumption if the initial loan was for a term of 25 years or more. 
I11(b) T3Determining type of payment subsidy.G1T1 A borrower currently receiving interest credit will continue to receive it for the initial loan and for any subsequent loan for as long as the borrower is eligible for and remains on interest credit. A borrower who has never received interest credit, or who has stopped receiving interest credit and at a later date again qualifies for a payment subsidy, will receive payment assistance. 
I11(c) T3Calculation of payment assistance.G1T1 The amount of payment assistance granted is the difference between the installment due on the promissory note and the greater of the payment amortized at the equivalent interest rate or the payment calculated based on the required floor payment. In leveraging situations, the equivalent interest rate will be used. 
I11(1) The floor payment is a minimum percentage of adjusted income that the borrower must pay for PITI: 
I11(i) Very low-income borrowers must pay a minimum of 22 percent of adjusted income; 
I11(ii) Low-income borrowers with adjusted income below 65 percent of area adjusted median income must pay a minimum of 24 percent of adjusted income; and 
I11(iii) Low-income borrowers with adjusted incomes between 65 and 80 percent of area adjusted median income must pay a minimum of 26 percent of adjusted income. 
I11(2) The equivalent interest rate is determined by a comparison of the borrower's adjusted income to the adjusted median income for the area in which the security property is located. The following chart is used to determine the equivalent interest rate paid by applicants eligible for payment assistance. 
c3,L1,xls34,r25,8  I95T4Percentage of Median Income and the Equivalent Interest Rate
h1When the applicants adjusted income is_  h2Equal to or more than  h2But less than  h2Then the equivalent interest rate isï¿½1A\1\  
j
I0100% D50.01% of adjusted median income D1 
I0150.01% D55% of adjusted median income D2 
I0155% D60% of adjusted median income D3 
I0160% D65% of adjusted median income D4 
I0165% D70% of adjusted median income D5 
I0170% D75% of adjusted median income D6 
I0175% D80.01% of adjusted median income D6.5 
I0180.01% D90% of adjusted median income D7.5 
I0190% D100% of adjusted median income D8.5 
I01100% D110% of adjusted median income D9 
I01110% Dor more than median income D9.5 
f\1\ï¿½1AOr note rate, whichever is less; in no case will the equivalent interest rate be less than one percent. 
e


I11(d) T3Calculation of interest credit.G1T1 The amount of interest credit granted is the difference between the sum of the annual installments due at the promissory note interest rate and the greater of: 
I11(1) Twenty percent of the borrower's adjusted income less the cost of real estate taxes and insurance; or 
I11(2) The amount the borrower would pay if the loan were amortized at an interest rate of one percent. 
I11(e) T3Annual review.G1T1 The borrower's income will be reviewed annually to determine whether the borrower is eligible for continued payment subsidy. The ï¿½382ï¿½borrower must notify RHS whenever an adult member of the household changes or obtains employment, there is a change in household composition, or if income increases by at least 10 percent so that RHS can determine whether a review of the borrowers circumstances is required. 

I80ï¿½1A3550.69 
I89Deferred mortgage payments. 
I11For qualified borrowers, RHS may defer up to 25 percent of the monthly principal and interest payment at 1 percent for up to 15 years. This assistance may be granted only at initial loan closing and is reviewed annually. Deferred mortgage payments are subject to recapture when the borrower transfers title or ceases to occupy the property. 
I11(a) T3Eligibility.G1T1 In order to qualify for deferred mortgage payments, all of the following must be true: 
I11(1) The applicants adjusted income at the time of initial loan approval does not exceed the applicable very low-income limits. 
I11(2) The loan term is 38 years, or 30 years for a manufactured home. 
I11(3) The applicant's payments for principal and interest, calculated at a one percent interest rate for the maximum allowable term, plus estimated costs for taxes and insurance exceeds: 
I11(i) For applicants receiving payment assistance, 29 percent of the applicants repayment income by more than $10 per month; or 
I11(ii) For applicants receiving interest credit, 20 percent of adjusted income by more than $10 per month. 
I11(b) T3Amount and terms.G1T1 (1) The amount of the mortgage payment to be deferred will be the difference between the applicants payment for principal and interest, calculated at one percent interest for the maximum allowable term, plus estimated costs for taxes and insurance and: 
I11(i) For applicants receiving payment assistance, 29 percent of the applicants repayment income. 
I11(ii) For applicants receiving interest credit, 20 percent of adjusted income. 
I11(2) Deferred mortgage payment agreements will be effective for a 12-month period. 
I11(3) Deferred mortgage assistance may be continued for up to 15 years after loan closing. Once a borrower becomes ineligible for deferred mortgage assistance, the borrower can never again receive deferred mortgage assistance. 
I11(c) T3Annual review.G1T1 The borrower's income, taxes, and insurance will be reviewed annually to determine eligibility for continued deferred mortgage assistance. The borrower must notify RHS whenever an adult member of the household changes or obtains employment or if income increases by at least 10 percent so that RHS can determine whether a review of the borrower's circumstances is required. 

I80ï¿½1A3550.70
I89Conditional commitments. 
I11A conditional commitment is a determination by RHS that a dwelling be offered for sale will be acceptable for purchase by a qualified RHS loan applicant if it is built or rehabilitated in accordance with RHS-approved plans, specifications, and regulations and priced within the lessor of the property's appraised value or the applicable HUD section 203(b) limit. The conditional commitment does not reserve funds, does not guarantee funding, and does not ensure that an eligible loan applicant will be available to buy the dwelling. 
I11(a) T3Eligibility.G1T1 To be eligible to request a conditional commitment, the builder, dealer-contractor, or seller must: 
I11(1) Have an adequate ownership interest in the property, as defined in ï¿½1A3550.58, prior to the beginning of any planned construction; 
I11(2) Have the experience and ability to complete any proposed work in a competent and professional manner; 
I11(3) Have the legal capacity to enter into the required agreements; 
I11(4) Be financially responsible and have the ability to finance or obtain financing for any proposed construction or rehabilitation; and 
I11(5) Comply with the requirements of 7 CFR part 1901, subpart E and all applicable laws, regulations, and Executive Orders relating to equal opportunity. Anyone who receives 5 or more conditional commitments during a 12-month period must obtain RHS approval of an affirmative marketing plan. 
ï¿½383ï¿½I11(b) T3Limitations.G1T1 Conditional commitments for new or substantially rehabilitated dwellings will not be issued after construction has started. RHS may limit the total number of conditional commitments issued in any locality based on market demand. 
I11(c) T3Commitment period.G1T1 A conditional commitment will be valid for 12 months from the date of issuance. The commitment may be extended for up to an additional 6 months if there are unexpected delays in construction caused by such factors as bad weather, materials shortages, or marketing difficulties. Conditional commitments may be canceled if construction does not begin within 60 days after the commitment is issued. 
I11(d) T3Conditional commitments involving packaging of applications.G1T1 A conditional commitment may be made to a seller, builder, or dealer-contractor who packages an RHS loan application for a prospective purchaser. In cases where the dwelling is to be constructed for sale to a specific eligible applicant, all of the following conditions must be met: 
I11(1) The conditional commitment will not be approved until the applicant's loan has been approved; 
I11(2) Construction will not begin until loan funds are obligated for the loan. Exceptions may be made when it appears likely that funding will be forthcoming and as long as the RHS lien priority is not jeopardized. The sales agreement must indicate that the loan has been approved but not funded and must provide that if the loan is not closed within 90 days of the date of approval, the contractor may terminate the sales agreement and sell the property to another party. If the sales agreement is terminated, the conditional commitment will be honored for another eligible loan applicant for the remaining period of the commitment; and 
I11(3) The RHS loan will be closed only after the dwelling is constructed or the required rehabilitation completed and final inspection has been made. 
I11(e) T3Fees.G1T1 An application for a conditional commitment must include payment of the conditional commitment fee. The fee will be refunded if for any reason preliminary inspection of the property or investigation of the conditional commitment applicant indicates that a conditional commitment will not be issued. Application fees will not be refunded for any property on which the required appraisal has been made. 
I11(f) T3Failure of conditional commitment applicant or dwelling to qualify.G1T1 The conditional commitment applicant will be informed if the conditional commitment is denied. Conditional commitments will be canceled if the property does not meet program requirements. 
I11(g) T3Changes in plans, specifications, or commitment price.G1T1 The holder of the conditional commitment must request approval for changes in plans, specifications, and commitment price. RHS may approve the changes if the following requirements are met: 
I11(1) The property price does not exceed the maximum loan limit and increases in costs are due to factors beyond the control of the commitment holder; and
I11(2) The requested changes are justifiable and appropriate. 
I11(h) T3Builder's warranty.G1T1 The builder or seller, as appropriate, must execute either an RHS-approved ``Builder's Warranty,'' or provide a 10-year insured warranty when construction is completed or the loan is closed. 

I80ï¿½1A3550.71
I89Special requirements for condominiums. 
I11RHS loans may be made for condominium units under the following conditions: 
I11(a) The unit is in a project approved or accepted by U.S. Department of Housing and Urban Development (HUD), the Federal National Mortgage Association (Fannie Mae), or the Federal Home Loan Mortgage Corporation (Freddie Mac). 
I11(b) The condominium project complies with the requirements of the condominium enabling statute and all other applicable laws. Any right of first refusal in the condominium documents will not impair the rights of RHS to: 
I11(1) Foreclose or take title to a condominium unit pursuant to the remedies in the mortgage; 
I11(2) Accept a deed in lieu of foreclosure in the event of default by a mortgagor; and 
ï¿½384ï¿½I11(3) Sell or lease a unit acquired by RHS. 
I11(c) If RHS obtains title to a condominium unit pursuant to the remedies in its mortgage or through foreclosure, RHS will not be liable for more than 6 months of the unit's unpaid regularly budgeted dues or charges accrued before acquisition of the title to the unit by RHS. The homeowners association's lien priority may include costs of collecting unpaid dues. 
I11(d) In case of condemnation or substantial loss to the units or common elements of the condominium project, unless at least two-thirds of the first mortgagees or unit owners of the individual condominium units have given their consent, the homeowners association may not: 
I11(1) By act or omission seek to abandon or terminate the condominium project; 
I11(2) Change the pro rata interest or obligations of any condominium unit in order to levy assessments or charges, allocate distribution of hazard insurance proceeds or condemnation awards, or determine the pro rata share of ownership of each condominium unit in the common elements; 
I11(3) Partition or subdivide any condominium unit; 
I11(4) Seek to abandon, partition, subdivide, encumber, sell, or transfer the common elements by act or omission (the granting of easements for public utilities or other public purposes consistent with the intended use of the common elements by the condominium project is not a transfer within the meaning of this clause); or 
I11(5) Use hazard insurance proceeds for losses to any condominium property (whether units or common elements) for other than the repair, replacement, or reconstruction of the condominium property. 
I11(e) All taxes, assessments, and charges that may become liens prior to the first mortgage under local law relate only to the individual condominium units and not to the condominium project as a whole. 
I11(f) No provision of the condominium documents gives a condominium unit owner or any other party priority over any rights of RHS as first or second mortgagee of the condominium unit pursuant to its mortgage in the case of a payment to the unit owner of insurance proceeds or condemnation awards for losses to or taking of condominium units or common elements. 
I11(g) If the condominium project is on a leasehold the underlying lease provides adequate security of tenure as described in ï¿½1A3550.58(b). 
I11(h) At least 70 percent of the units have been sold. Multiple purchases of condominium units by one owner are counted as one sale when determining if the sales requirement has been met. 
I11(i) No more than 15 percent of the unit owners are more than 1 month delinquent in payment of homeowners association dues or assessments at the time the RHS loan is closed. 

I80ï¿½1A3550.72
I89Community land trusts. 
I11Eligible dwellings located on land owned by a community land trust may be financed if: 
I11(a) The loan meets all the requirements of this subpart; and 
I11(b) Any restrictions, imposed by the community land trust on the property or applicant are: 
I11(1) Reviewed and accepted by RHS before loan closing; and 
I11(2) Automatically and permanently terminated upon foreclosure or acceptance by RHS of a deed in lieu of foreclosure. 

I80ï¿½1A3550.73
I89Manufactured homes. 
I11With the exception of the restrictions and additional requirements contained in this section, section 502 loans on manufactured homes are subject to the same conditions as all other section 502 loans. 
I11(a) T3Eligible costs.G1T1 In addition to the eligible costs described in ï¿½1A3550.52(d), RHS may finance the following activities related to manufactured homes when a real estate mortgage covers both the unit and the site: 
I11(1) Purchase of an eligible unit, transportation, and set-up costs, and purchase of an eligible site if not already owned by the applicant; 
I11(2) Site development work in accordance with 7 CFR part 1924, subpart A: 
I11(3) Subsequent loans in conjunction with an assumption or sale of an REO property; or 
ï¿½385ï¿½I11(4) Subsequent loans for repairs of units financed under section 502. 
I11(b) T3Loan restrictions.G1T1 In addition to the loan restrictions described in ï¿½1A3550.52(e), RHS may not use loan funds to finance: 
I11(1) An existing unit and site unless it is already financed with a section 502 loan or is an RHS REO property. 
I11(2) The purchase of a site without also financing the unit. 
I11(3) Alteration or remodeling of the unit when the initial loan is made. 
I11(4) Furniture, including movable articles of personal property such as drapes, beds, bedding, chairs, sofas, divans, lamps, tables, televisions, radios, stereo sets, and other similar items of personal property. Furniture does not include wall-to-wall carpeting, refrigerators, ovens, ranges, washing machines, clothes dryers, heating or cooling equipment, or other similar items. 
I11(c) T3Dealer-contractors.G1T1 No loans will be made on a manufactured home sold by any entity that is not an approved dealer-contractor that will provide complete sales, service, and site development services. 
I11(d) T3Loan term.G1T1 The maximum term of a loan on a manufactured home is 30 years. 
I11(e) T3Construction and development.G1T1 Unit construction, site development and set-up must conform to the Federal Manufactured Home Construction and Safety Standards (FMHCSS) and 7 CFR part 1924, subpart A. Development under the Mutual Self-Help and borrower construction methods is not permitted for manufactured homes. 
I11(f) T3Contract requirements.G1T1 The dealer-contractor must sign a construction contract, as specified in 7 CFR 1924.6 which will cover both the unit and site development work. The use of multi-contracts is prohibited. A dealer-contractor may use subcontractors if the dealer-contractor is solely responsible for all work under the contract. Payment for all work will be in accordance with 7 CFR part 1924, subpart A, except no payment will be made for materials or property stored on site (e.g., payment for a unit will be made only after it is permanently attached to the foundation). 
I11(g) T3Lien release requirements.G1T1 All persons furnishing materials or labor in connection with the contract except the manufacturer of the unit must sign a Release by Claimants document, as specified in 7 CFR part 1924, subpart A. The manufacturer of the unit must furnish an executed manufacturer's certificate of origin to verify that the unit is free and clear of all legal encumbrances. 
I11(h) T3Warranty requirements.G1T1 The dealer-contractor must provide a warranty in accordance with the provisions of 7 CFR 1924.12. The warranty must identify the unit by serial number. The dealer-contractor must certify that the unit substantially complies with the plans and specifications and the manufactured home has sustained no hidden damage during transportation and, if manufactured in separate sections, that the sections were properly joined and sealed according to the manufacturer's specifications. The dealer-contractor will also furnish the applicant with a copy of all manufacturer's warranties. 

I80ï¿½1A3550.74 
I89Nonprogram loans. 
I11NP terms may be extended to applicants who do not qualify for program credit, or for properties that do not qualify as program properties, when it is in the best interest of the Government. NP loans are originated and serviced according to the requirements for program loans except as indicated in this section. 
I11(a) T3Purpose.G1T1 NP terms may be offered to expedite: 
I11(1) Sale of an REO property. 
I11(2) Assumption of an existing program loan on new rates and terms. If additional funds are required to purchase the property, the applicant must obtain them from another source. 
I11(3) Conversion of a program loan that has received unauthorized assistance. 
I11(4) Continuation of a loan on a portion of a security property when the remainder is being transferred and the RHS debt is not paid in full. 
I11(b) T3Terms.G1T1 (1) Rate and term: 
I11(i) For an applicant who intends to occupy the property, the term will not exceed 30 years. 
I11(ii) For other applicants, the term will not exceed 10 years. If more favorable terms are necessary to facilitate the sale, the loan may be amortized ï¿½386ï¿½over a period of up to 20 years with payment in full due not later than 10 years from the date of closing. 
I11(iii) An applicant with an NP loan under paragraph (b)(1)(i) of this section who wishes to retain the property and purchase a new property with RHS credit must purchase the second property according to the terms of paragraph (b)(1)(ii) of this section, even if the new property will serve as the applicant's principal residence. 
I11(2) NP loans are written at the NP interest rate in effect at the time of loan approval. 
I11(3) NP borrowers are not eligible for payment assistance or a moratorium. 
I11(c) T3Additional requirements.G1T1 (1) NP applicants other than public bodies and nonprofit organizations must pay a nonrefundable application fee. 
I11(2) NP applicants must make a down payment based upon the purchase price and whether the applicant intends to personally occupy the property or use it for other purposes. 
I11(3) NP applicants cannot finance loan closing costs or escrow, tax service, or appraisal fees. 
I11(d) T3Reduced restrictions.G1T1 (1) NP applicants need not be unable to obtain other credit in order to receive an NP loan and are not required to refinance with private credit when they are able to do so. 
I11(2) NP applicants are not required to occupy the property. 
I11(3) NP applicants are not subject to leasing restrictions. 
I11(e) T3Waiver of costs.G1T1 When the purpose of the loan is the conversion of a program loan that has received unauthorized assistance or continuation of a loan on a portion of a security property when the remainder is being transferred, the application fee, appraisal fee, and down payment may be waived. 

I80ï¿½1A3550.75ï¿½093550.99
I89[Reserved] 

I80ï¿½1A3550.100 
I89OMB control number. 
I11The information collection requirements contained in this regulation have been approved by the Office of Management and Budget (OMB) and have been assigned OMB control number 0575ï¿½090166. Public reporting burden for this collection of information is estimated to vary from 5 minutes to 3 hours per response, with an average of 1\1/2\ hours per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comment regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to the Department of Agriculture, Clearance Officer, STOP 7602, 1400 Independence Avenue, SW., Washington, DC 20250ï¿½090762. You are not required to respond to this collection of information unless it displays a currently valid OMB control number. 

I56Subpart C_Section 504 Origination 

I80ï¿½1A3550.101 
I89Program objectives. 
I11This subpart sets forth policies for administering loans and grants under section 504(a) of title V of the Housing Act of 1949, as amended. Section 504 loans and grants are intended to help very low-income owner-occupants in rural areas repair their properties. 

I80ï¿½1A3550.102 
I89Grant and loan purposes. 
I11(a) T3Grant funds.G1T1 Grant funds may be used only to pay costs for repairs and improvements that will remove identified health and safety hazards or to repair or remodel dwellings to make them accessible and useable for household members with disabilities. Unused grant funds must be returned to the Rural Housing Service (RHS). 
I11(b) T3Loan funds.G1T1 Loan funds may be used to make general repairs and improvements to properties or to remove health and safety hazards, as long as the dwelling remains modest in size and design. 
I11(c) T3Eligibility of mobile and manufactured homes.G1T1 Repairs necessary to remove health and safety hazards may be made to mobile or manufactured homes provided: 
I11(1) The applicant owns the home and site and has occupied the home prior to filing an application with RHS; and 
I11(2) The mobile or manufactured home is on a permanent foundation or will be put on a permanent foundation with section 504 funds. 
ï¿½387ï¿½I11(d) T3Eligible costs.G1T1 In addition to construction costs to make necessary repairs and improvements, loan and grant funds may be used for: 
I11(1) Reasonable expenses related to obtaining the loan or grant, including legal, architectural and engineering, title clearance, and loan closing fees; and appraisal, surveying, environmental, tax monitoring, and other technical services. 
I11(2) The cost of providing special design features or equipment when necessary because of a physical disability of the applicant or a member of the household. 
I11(3) Reasonable connection fees, assessments, or the pro rata installation costs for utilities such as water, sewer, electricity, and gas for which the borrower is liable and which are not paid from other funds. 
I11(4) Real estate taxes that are due and payable on the property at the time of closing and for the establishment of escrow accounts for real estate taxes, hazard and flood insurance premiums, and related costs. 
I11(5) Fees to public and private nonprofit organizations that are tax exempt under the Internal Revenue Code for the development and packaging of applications. 
I11(e) T3Restrictions on uses of loan or grant funds.G1T1 Section 504 funds may not be used to: 
I11(1) Assist in the construction of a new dwelling. 
I11(2) Make repairs to a dwelling in such poor condition that when the repairs are completed, the dwelling will continue to have major hazards. 
I11(3) Move a mobile home or manufactured home from one site to another. 
I11(4) Pay for off-site improvements except for the necessary installation and assessment costs for utilities. 
I11(5) Refinance any debt or obligation of the applicant incurred before the date of application, except for the installation and assessment costs of utilities. 
I11(6) Pay fees, commission, or charges to for-profit entities related to loan packaging or referral of prospective applicants to RHS. 

I80ï¿½1A3550.103 
I89Eligibility requirements. 
I11To be eligible, applicants must meet the following requirements: 
I11(a) T3Owner-occupant.G1T1 Applicants must own, as described in ï¿½1A3550.107, and occupy the dwelling. 
I11(b) T3Age (grant only).G1T1 To be eligible for grant assistance, an applicant must be 62 years of age or older at the time of application. 
I11(c) T3Income eligibility.G1T1 At the time of loan or grant approval, the household's adjusted income must not exceed the applicable very low-income limit. Section 3550.54 provides a detailed discussion of the calculation of adjusted income. 
I11(d) T3Citizenship status.G1T1 The applicant must be a U.S. citizen or a non-citizen who qualifies as a legal alien, as defined in ï¿½1A3550.10. 
I11(e) T3Need and use of personal resources.G1T1 Applicants must be unable to obtain financial assistance at reasonable terms and conditions from non-RHS credit or grant sources and lack the personal resources to meet their needs. In cases where the household is experiencing medical expenses in excess of three percent of the household's income, this requirement may be waived or modified. Elderly families must use any net family assets in excess of $10,000 to reduce their section 504 request. Non-elderly families must use any net family assets in excess of $7,500 to reduce their section 504 request. Applicants may contribute assets in excess of the aforementioned amounts to further reduce their request for assistance. The definition of assets for this purpose is net family assets as described in ï¿½1A3550.54 of subpart B of this part, less the value of the dwelling and a minimum adequate site. 
I11(f) T3Legal capacity.G1T1 The applicant must have the legal capacity to incur the loan obligation or have a court appointed guardian or conservator who is empowered to obligate the applicant in real estate matters. 
I11(g) T3Suspension or debarment.G1T1 Applications from applicants who have been suspended or debarred from participation in federal programs will be handled in accordance with FmHA Instruction 1940ï¿½09M (available in any Rural Development office). 
ï¿½388ï¿½I11(h) T3Repayment ability (loans only).G1T1 Applicants must demonstrate adequate repayment ability as supported by a budget. 
I11(1) If an applicant does not meet the repayment ability requirements, the applicant can have another party join the application as a cosigner. 
I11(2) If an applicant does not meet the repayment ability requirements, the applicant can have other household members join the application. 
I11(i) T3Credit qualifications.G1T1 Applicants must be unable to secure the necessary credit from other sources under terms and conditions that the applicant could reasonably be expected to fulfill. Loan applicants must have a credit history that indicates reasonable ability and willingness to meet debt obligations. An applicant with an outstanding judgment obtained by the United States in a federal court, other than the United States Tax Court, is not eligible for a loan or grant from RHS. 
I11(1) Indicators of unacceptable credit include: 
I11(i) Repeated incidents of 2 debt payments being more than 30 days late within the last 12 months that indicate an unwillingness to meet financial obligations when due. 
I11(ii) Loss of security due to a foreclosure if the foreclosure has been completed within the last 36 months. 
I11(iii) An outstanding Internal Revenue Service tax lien or any other outstanding tax liens with no satisfactory arrangement for payment. 
I11(iv) A court-created or court-affirmed obligation or judgment caused by nonpayment that is currently outstanding or has been outstanding within the last 12 months, except for those excluded by paragraphs (i)(2)(ii) and (i)(2)(iii) of this section. 
I11(v) Outstanding collection accounts with a record of irregular payment with no satisfactory arrangements for repayment, or collection accounts that were paid in full within the last 6 months. 
I11(vi) Non-agency debts written off within the last 36 months or paid in full at least 12 months ago. 
I11(vii) Agency debts that were debt settled, or are being considered for debt settlement. 
I11(viii) Delinquency on a federal debt. 
I11(2) The following will not be considered indicators of unacceptable credit: 
I11(i) A bankruptcy in which debts were discharged more than 36 months prior to the date of application or where an applicant successfully completed a bankruptcy debt restructuring plan and has demonstrated a willingness to meet obligations when due for the 12 months prior to the date of application. 
I11(ii) A non-foreclosure judgment satisfied more than 12 months before the date of application. 
I11(3) When an application is rejected because of unacceptable credit, the applicant will be informed of the reason and source of information. 

I80ï¿½1A3550.104
I89Applications. 
I11(a) T3Application submissions.G1T1 All persons applying for section 504 loans or grants must file a complete written application in a format specified by RHS. Applications will be accepted even when funds are not available. 
I11(b) T3Application processing.G1T1 (1) Incomplete applications will be returned to the applicant specifying in writing the additional information that is needed to make the application complete. 
I11(2) An applicant may voluntarily withdraw an application at any time. 
I11(3) RHS may periodically request in writing that applicants reconfirm their interest in obtaining a loan or grant. RHS may withdraw the application of any applicant who does not respond within the specified timeframe. 
I11(4) Applicants who are eligible will be notified in writing. If additional information becomes available that indicates that the original eligibility determination may have been in error or that circumstances have changed, RHS may reconsider the application and the applicant may be required to submit additional information. 
I11(5) Applicants who are ineligible will be notified in writing and provided with the specific reasons for the rejection. 
I11(c) T3Processing priorities.G1T1 When funding is not sufficient to serve all eligible applicants, applications for assistance to remove health and safety hazards will receive priority for funding. In the case of applications with equivalent priority status that are received on the same ï¿½389ï¿½day, preference will be extended to applicants qualifying for a veterans preference. After selection for processing, requests for assistance are funded on a first-come, first-served basis. 

I80ï¿½1A3550.105
I89Site requirements. 
I11(a) T3Rural areas.G1T1 Loans may be made only in rural areas designated by RHS. If an area designation is changed to nonrural an existing RHS borrower may receive 504 assistance. 
I11(b) T3Not subdividable.G1T1 The site must not be large enough to subdivide into more than one site under existing local zoning ordinances. 

I80ï¿½1A3550.106
I89Dwelling requirements. 
I11(a) T3Modest dwelling.G1T1 The property must be one that is considered modest for the area, must not be designed for income producing purposes, have an in-ground pool, or have a value in excess of the 203(b) limits of the National Housing Act. 
I11(b) T3Post-repair condition.G1T1 Dwellings repaired with section 504 funds need not be brought to the agency development standards or thermal performance standards of 7 CFR part 1924, subpart A, nor must all existing hazards be removed. However, the dwelling may not continue to have major health or safety hazards. 
I11(c) T3Construction standards.G1T1 All work must be completed in accordance with local construction codes and standards. When potentially hazardous equipment or materials are being installed, all materials and installations must be in accordance with the applicable standards in 7 CFR part 1924, subpart A. 

I80ï¿½1A3550.107
I89Ownership requirements. 
I11The applicant must have an acceptable ownership interest in the property as evidenced by one of the following: 
I11(a) T3Full fee ownership.G1T1 Acceptable full fee ownership is evidenced by a fully marketable title with a deed vesting a fee interest in the property to the applicant. 
I11(b) T3Secure leasehold interest.G1T1 A written lease is required. For loans, the unexpired portion of the lease must not be less than 2 years beyond the term of the promissory note. For grants, the remaining lease period must be at least 5 years. A leasehold for mutual help housing financed by U.S. Department of Housing and Urban Development (HUD) on Indian lands requires no minimum lease period and constitutes acceptable ownership. 
I11(c) T3Life estate interest.G1T1 To be acceptable, a life estate interest must provide the applicant with rights of present possession, control, and beneficial use of the property. For secured loans, generally persons with any remainder interests must be signatories to the mortgage. All of the remainder interests need not be included in the mortgage to the extent that one or more of the persons holding remainder interests are not legally competent (and there is no representative who can legally consent to the mortgage), cannot be located, or if the remainder interests are divided among such a large number of people that it is not practical to obtain the signatures of all of the remainder interests. In such cases, the loan may not exceed the value of the property interests owned by the persons executing the mortgage. 
I11(d) T3Undivided interest.G1T1 An undivided interest is acceptable if there is no reason to believe that the applicant's position as an owner-occupant will be jeopardized as a result of the improvements to be made, and: 
I11(1) In the case of unsecured loans or grants, if any co-owners living or planning to live in the dwelling sign the repayment agreement. 
I11(2) In the case of a secured loan, when one or more of the co-owners are not legally competent (and there is no representative who can legally consent to the mortgage), cannot be located, or the ownership interests are divided among so large a number of co-owners that it is not practical for all of their interests to be mortgaged, their interests not exceeding 50 percent may be excluded from the security requirements. In such cases, the loan may not exceed the value of the property interests owned by the persons executing the mortgage. 
I11(e) T3Possessory rights.G1T1 Acceptable forms of ownership include possessory right on an American Indian reservation or State-owned land and the interest of an American Indian in land held severalty under trust patents or deeds containing ï¿½390ï¿½restrictions against alienation, provided that land in trust or restricted status will remain in trust or restricted status. 
I11(f) T3Land purchase contract.G1T1 A land purchase contract is acceptable if the applicant is current on all payments, and there is a reasonable likelihood that the applicant will be able to continue meeting the financial obligations of the contract. 
I11(g) T3Alternative evidence of ownership.G1T1 If evidence, as described in paragraphs (a) through (e) of this section, is not available, RHS may accept any of the following as evidence of ownership: 
I11(1) Records of the local taxing authority that show the applicant as owner and that demonstrate that real estate taxes for the property are paid by the applicant. 
I11(2) Affidavits by others in the community stating that the applicant has occupied the property as the apparent owner for a period of not less than 10 years, and is generally believed to be the owner. 
I11(3) Any instrument, whether or not recorded, which is commonly accepted as evidence of ownership. 

I80ï¿½1A3550.108
I89Security requirements (loans only). 
I11When the total section 504 indebtedness is $2,500 or more, the property will be secured by a mortgage on the property, leasehold interest, or land purchase contract. 
I11(a) RHS does not require a first lien position, but the total of all debts on the secured property may not exceed the value of the security, except by the amount of any required contributions to an escrow account for taxes and insurance and any required appraisal fee. 
I11(b) Title clearance and the use of legal services generally must be conducted in accordance with 7 CFR part 1927, subpart B. These requirements need not be followed for: 
I11(1) Loans where the total RHS indebtedness is $7,500 or less; or 
I11(2) Subsequent loans made for minimal essential repairs necessary to protect the Government's interest. 

I80ï¿½1A3550.109
I89Escrow account (loans only). 
I11RHS may require that borrowers deposit into an escrow account amounts necessary to ensure that the account will contain sufficient funds to pay real estate taxes, hazard and flood insurance premiums, and other related costs when they are due in accordance with the Real Estate Settlement and Procedures Act of 1974 (RESPA) and section 501(e) of the Housing Act of 1949, as amended. 

I80ï¿½1A3550.110
I89Insurance (loans only). 
I11(a) T3Borrower responsibility.G1T1 Until the loan is paid in full, any borrower with a secured indebtedness in excess of $15,000 must furnish and continually maintain hazard insurance on the security property, with companies, in amounts, and on terms and conditions acceptable to RHS and include a ``loss payable clause'' payable to RHS to protect the Government's interest. 
I11(b) T3Amount.G1T1 Essential buildings must be insured in an amount at least equal to the balance of the secured debts. 
I11(c) T3Flood insurance.G1T1 Flood insurance must be obtained and maintained for the life of the loan for all property located in Special Flood Hazard Areas (SFHA) as determined by the Federal Emergency Management Agency (FEMA). RHS actions will be consistent with 7 CFR part 1806, subpart B which addresses flood insurance requirements. If flood insurance through FEMA's National Flood Insurance Program is not available in a SFHA, the property is not eligible for federal financial assistance. 
I11(d) T3Losses.G1T1 (1) Loss deductible clauses may not exceed $250 or 1 percent of the insurance coverage, whichever is greater. The deductible for any 1 building may not exceed $750. 
I11(2) Borrowers must immediately notify RHS of any loss or damage to insured property and collect the amount of the loss from the insurance company. 
I11(3) RHS may require that loss payments be supervised. All repairs and replacements done by or under the direction of the borrower, or by contract, will be planned, performed, inspected, and paid for in accordance with 7 CFR part 1924, subpart A. 
I11(4) When insurance funds remain after all repairs, replacements, and other authorized disbursements have ï¿½391ï¿½been made, the funds will be applied in the following order: 
I11(i) Prior liens, including delinquent property taxes. 
I11(ii) Delinquency on the account. 
I11(iii) Advances due for recoverable cost items. 
I11(iv) Released to the borrower if the RHS debt is adequately secured. 
I11(5) If a loss occurs when insurance is not in force, the borrower is responsible for making the needed repairs or replacements and ensuring that the insurance is reinstated on the property. 
I11(6) If the borrower is not financially able to make the repairs, RHS may take one of the following actions: 
I11(i) Make a subsequent loan for repairs. 
I11(ii) Subordinate the RHS lien to permit the borrower to obtain funds for needed repairs from another source. 
I11(iii) Permit the borrower to obtain funds secured by a junior lien from another source. 
I11(iv) Make a protective advance to protect the Government's interest. 
I11(v) Accelerate the account and demand payment in full. 

I80ï¿½1A3550.111 
I89Appraisals (loans only). 
I11An appraisal is required when the section 504 debt to be secured exceeds $15,000 or whenever RHS determines that it is necessary to establish the adequacy of the security. RHS may charge an appraisal fee. Appraisals must be made in accordance with the Uniform Standards of Professional Appraisal Practices. When other real estate is taken as additional security it will be appraised if it represents a substantial portion of the security for the loan. 

I80ï¿½1A3550.112 
I89Maximum loan and grant. 
I11(a) T3Maximum loan permitted.G1T1 The sum of all outstanding section 504 loans to 1 borrower or on 1 dwelling may not exceed $20,000. 
I11(1) Transferees who have assumed a section 504 loan and wish to obtain a subsequent section 504 loan are limited to the difference between the unpaid principal balance of the debt assumed and $20,000. 
I11(2) For a secured loan, the total of all debts on the secured property may not exceed the value of the security, except by the amount of any required appraisal and tax monitoring fees, and the contributions to an escrow account for taxes and insurance. 
I11(b) T3Maximum loan based upon ability to pay.G1T1 The maximum loan is limited to the principal balance that can be supported given the amount the applicant has available, as determined by RHS, to repay a loan at 1 percent interest with a 20-year term. 
I11(c) T3Maximum grant.G1T1 The lifetime total of the grant assistance to any recipient is $7,500. No grant can be awarded unless the maximum level of loans, as supported by a budget, have been obtained. 

I80ï¿½1A3550.113 
I89Rates and terms (loans only). 
I11(a) T3Interest rate.G1T1 The interest rate for all section 504 loans will be 1 percent. 
I11(b) T3Loan term.G1T1 The repayment period for the loan should generally be as short as possible based on the applicant's repayment ability, and may never exceed 20 years; however loans made in combination with grants must have a term of 20 years. 

I80ï¿½1A3550.114 
I89Repayment agreement (grants only). 
I11Grant recipients are required to sign a repayment agreement which specifies that the full amount of the grant must be repaid if the property is sold in less than 3 years from the date the grant was approved. 

I80ï¿½1A3550.115ï¿½093550.149
I89[Reserved] 

I80ï¿½1A3550.150 
I89OMB control number. 
I11The information collection requirements contained in this regulation have been approved by the Office of Management and Budget (OMB) and have been assigned OMB control number 0575ï¿½090166. Public reporting burden for this collection of information is estimated to vary from 5 minutes to 3 hours per response, with an average of 1\1/2\ hours per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comment regarding this burden estimate or any other aspect of this collection of information, ï¿½392ï¿½including suggestions for reducing this burden to the Department of Agriculture, Clearance Officer, STOP 7602, 1400 Independence Avenue, SW., Washington, DC 20250ï¿½090762. You are not required to respond to this collection of information unless it displays a currently valid OMB control number. 

I56Subpart D_Regular Servicing 

I80ï¿½1A3550.151 
I89Servicing goals. 
I11This subpart sets forth the Rural Housing Service (RHS) policies for managing the repayment of loans made under sections 502 and 504 of the Housing Act of 1949, as amended. 

I80ï¿½1A3550.152 
I89Loan payments. 
I11(a) T3Payment terms.G1T1 Unless the loan documents specify other loan repayment terms, borrowers are required to make monthly payments. Borrowers with existing loans specifying annual payments may request conversion to monthly payments, and must convert to a monthly payment schedule before any subsequent loan or new payment assistance is approved. Suitable forms of payment are: check, money order, or bank draft. Borrowers who make cash payments will be assessed a fee to cover the cost of conversion to a money order. 
I11(b) T3Application of payments.G1T1 If a borrower makes less than the scheduled payment, the payment is held in suspense and is not applied to the borrower's account. When subsequent payments are received in an amount sufficient to equal a scheduled payment, the amount will be applied in the following order: 
I11(1) Protective advances charged to the account. 
I11(2) Accrued interest due. 
I11(3) Principal due. 
I11(4) Escrow for taxes and insurance. 
I11(c) T3Multiple loans.G1T1 When a borrower with multiple loans for the same property makes less than the scheduled payment on all loans, the payment will be applied to the oldest loan and then in declining order of age. Future remittances will be applied beginning with the oldest unpaid installment. 
I11(d) T3Application of excess payments.G1T1 Borrowers can elect to make payments in excess of the scheduled amount to be applied to principal, provided there are no outstanding fees. 

I80ï¿½1A3550.153 
I89Fees. 
I11RHS may assess reasonable fees including a tax service fee, fees for late payments, and fees for checks returned for insufficient funds. 

I80ï¿½1A3550.154 
I89Inspections. 
I11RHS or its agent may make reasonable entries upon and inspections of any property used as security for an RHS loan as necessary to protect the interest of the Government. RHS will give the borrower notice at the time of or prior to an inspection. 

I80ï¿½1A3550.155 
I89Escrow account. 
I11Escrow accounts will be administered in accordance with RESPA and section 501(e) of the Housing Act of 1949, as amended. 
I11(a) Upon creation of the escrow account, RHS may require borrowers to deposit funds sufficient to pay taxes and insurance premiums applicable to the mortgage for the period since the last payments were made and to fund a cushion as permitted by RESPA. 
I11(b) Borrowers may elect to escrow at any time during the terms of the loan if the outstanding RHS loan balance is over $2,500. 
I11(c) RHS may require borrowers to escrow in conjunction with any special servicing action. 

I80ï¿½1A3550.156 
I89Borrower obligations. 
I11(a) After receiving a loan from RHS, borrowers are expected to meet a variety of obligations outlined in the loan documents. In addition to making timely payments, these obligations include: 
I11(1) Maintaining the security property; and 
I11(2) Maintaining an adequately funded escrow account, or paying real estate taxes, hazard and flood insurance, and other related costs when due. 
I11(b) If a borrower fails to fulfill these obligations, RHS may obtain the needed service and charge the cost to the borrowers account. 

ï¿½393ï¿½I80ï¿½1A3550.157 
I89Payment subsidy. 
I11(a) T3Borrowers currently receiving payment subsidy.G1T1 (1) RHS will review annually each borrower's eligibility for continued payment subsidy and determine the appropriate level of assistance. To be eligible for payment subsidy renewal, the borrower must also occupy the property. 
I11(2) If the renewal is not completed before the expiration date of the existing agreement, the effective date of the renewal will be either the expiration date of the previous agreement if RHS error caused the delay, or the next due date after the renewal is approved in all other cases. 
I11(3) The borrower must notify RHS whenever an adult member of the household becomes employed or changes employment, there is a change in household composition, or if income increases by at least 10 percent. The household may also report decreases in income. If the change in the household's income will cause the payment for principal and interest to change by at least 10 percent, the household's payment subsidy may be adjusted for a new 12-month period. The new agreement will be effective the due date following the date the borrower's information is verified by RHS. 
I11(b) T3Borrowers not currently receiving payment subsidy.G1T1 Payment assistance may be granted to borrowers not currently receiving payment subsidy whose loans were approved on or after August 1, 1968, whose income does not exceed the applicable low-income limit for the area, are personally occupying the RHS financed property, and who meet the requirements of ï¿½1A3550.53(b), (e), and (f). In general, to receive payment assistance the term of the loan at closing must have been at least 25 years. If an account has been reamortized and the initial term of the loan was at least 25 years, payment assistance may be granted even though the term of the reamortized loan is less than 25 years. Payment assistance may be granted on a subsequent loan for repairs with a term of less than 25 years. 
I11(c) T3Cancellation of payment subsidy.G1T1 RHS will cancel a payment subsidy if the borrower does not occupy the property, has sold or transferred title to the property, or is no longer eligible for payment subsidy. 

I80ï¿½1A3550.158 
I89Active military duty. 
I11The Soldiers and Sailors Relief Act requires that the interest rate charged a borrower who enters full-time active military duty after a loan is closed not exceed six percent. Active military duty does not include participation in a military reserve or the National Guard unless the borrower is called to active duty. 
I11(a) T3Amount of assistance.G1T1 If a borrower qualifies for payment subsidy after reduction of the interest rate to six percent, the amount of payment subsidy received during the period of active military duty will be the difference between the amount due at the subsidized rate for principal and interest and the amount due at a six percent interest rate. The six percent interest rate will be effective with the first payment due after RHS confirms the active military status of the borrower. 
I11(b) T3Change of active military status.G1T1 The borrower must notify RHS when he or she is no longer on active military duty. RHS will cancel the six percent interest rate and resume use of the promissory note interest rate. A new payment subsidy agreement may be processed if the borrower is eligible. 

I80ï¿½1A3550.159 
I89Borrower actions requiring RHS approval. 
I11(a) T3Mineral leases.G1T1 Borrowers who wish to lease mineral rights to a security property must request authorization from RHS. RHS may consent to the lease of mineral rights and subordinate its liens to the lessee's rights and interests in the mineral activity if the security property will remain suitable as a residence and the Government's security interest will not be adversely affected. Subordination of RHS loans to a mineral lease does not entitle the leaseholder to any proceeds from the sale of the security property. 
I11(1) If the proposed activity is likely to decrease the value of the security property, RHS may consent to the lease only if the borrower assigns 100 percent of the income from the lease to RHS to be applied to reduce principal and the rent to be paid is at least equal ï¿½394ï¿½to the estimated decrease in the market value of the security. 
I11(2) If the proposed activity is not likely to decrease the value of the security property, RHS may consent to the lease if the borrower agrees to use any damage compensation received from the lessee to repair damage to the site or dwelling, or to assign it to RHS to be applied to reduce principal. 
I11(b) T3Subordination.G1T1 RHS may subordinate its interests to permit a borrower to defer recapture amounts and refinance the loan, or to obtain a subsequent loan with private credit. 
I11(1) When it is in the best interest of the Government, subordination will be permitted if: 
I11(i) The other lender will verify that the funds will be used for purposes for which an RHS loan could be made; 
I11(ii) The prior lien debt will be on terms and conditions that the borrower can reasonably be expected to meet without jeopardizing repayment of the RHS indebtedness;
I11(iii) Any proposed development will be planned and performed in accordance with 7 CFR part 1924, subpart A or directed by the other lender in a manner which is consistent with that subpart; and 
I11(iv) An agreement is obtained in writing from the prior lienholder providing that at least 30 days prior written notice will be given to RHS before action to foreclose on the prior lien is initiated. 
I11(2) The total amount of debt permitted when RHS subordinates its interests depends on whether the borrower pays off the RHS loan. 
I11(i) For situations in which the borrower is obtaining a subsequent loan from another source and will not pay off the RHS debt, the prior lien debt plus the unpaid balance of all RHS loans, exclusive of recapture, will not exceed the market value of the security. 
I11(ii) For situations in which RHS is subordinating only a deferred recapture amount, the prior lien debt plus the deferred recapture amount will not exceed the market value of the security. 
I11(c) T3Partial release of security.G1T1 RHS may consent to transactions affecting the security, such as sale or exchange of security property or granting of a right-of-way across the security property, and grant a partial release provided: 
I11(1) The compensation is: 
I11(i) For sale of the security property, cash in an amount equal to the value of the security being disposed of or rights granted. 
I11(ii) For exchange of security property, another parcel of property acquired in exchange with value equal to or greater than that being disposed of. 
I11(iii) For granting an easement or right-of-way, benefits derived that are equal to or greater than the value of the security property being disposed of. 
I11(2) An appraisal must be conducted if the latest appraisal is more than 1 year old or if it does not reflect market value and the amount of consideration exceeds $5,000. The appraisal fee will be charged to the borrower. 
I11(3) The security property, after the transaction is completed, will be an adequate but modest, decent, safe, and sanitary dwelling and related facilities. 
I11(4) Repayment of the RHS debt will not be jeopardized. 
I11(5) If applicable, the environmental requirements of 7 CFR part 1940, subpart G are met. 
I11(6) When exchange of all or part of the security is involved, title clearance is obtained before release of the existing security. 
I11(7) Proceeds from the sale of a portion of the security property, granting an easement or right-of-way, damage compensation, and all similar transactions requiring RHS consent, will be used in the following order: 
I11(i) To pay customary and reasonable costs related to the transaction that must be paid by the borrower. 
I11(ii) To be applied on a prior lien debt, if any. 
I11(iii) To be applied to RHS indebtedness or used for improvements to the security property in keeping with purposes and limitations applicable for use of RHS loan funds. Proposed development will be planned and performed in accordance with 7 CFR part 1924, subpart A and supervised to ensure that the proceeds are used as planned. 
I11(d) T3Lease of security property.G1T1 A borrower must notify RHS if they lease the property. If the lease is for a term ï¿½395ï¿½of more than 3 years or contains an option to purchase, RHS may liquidate the loan. During the period of any lease, the borrower is not eligible for a payment subsidy or special servicing benefits. 

I80ï¿½1A3550.160 
I89Refinancing with private credit. 
I11(a) T3Objective.G1T1 RHS direct loan programs are not intended to supplant or compete with private credit sources. Therefore, borrowers are required to refinance RHS loans with private credit sources when RHS determines that the borrower meets RHS criteria. 
I11(b) T3Criteria for refinancing with private credit.G1T1 Borrowers must refinance with private credit when RHS determines that the borrower has the ability to obtain other credit at reasonable rates and terms based on their income, assets, and credit history. Reasonable rates and terms are those commercial rates and terms that borrowers are expected to meet when borrowing for similar purposes. Differences in interest rates and terms between RHS and other lenders will not be an acceptable reason for a borrower to fail to refinance with private credit if the available rates and terms are within the borrower's ability to pay. 
I11(c) T3Notice of requirement to refinance with private credit.G1T1 The financial status of all borrowers may be reviewed periodically to determine their ability to refinance with private credit. A borrower's financial status may be reviewed at any time if information becomes available to RHS that indicates that the borrower's circumstances have changed. 
I11(1) A borrower undergoing review is required to supply, within 30 days of a request from RHS, sufficient financial information to enable RHS to determine the borrowers ability to refinance with private credit. Foreclosure action may be initiated against any borrower who fails to respond. 
I11(2) When RHS determines that a borrower has the ability to refinance with private credit, the borrower will be required to refinance within 90 days. 
I11(3) Within 30 days after being notified of the requirement to refinance with private credit, a borrower may contest the RHS decision and provide additional financial information to document an inability to refinance with private credit. 
I11(d) T3Failure to refinance with private credit.G1T1 (1) If the borrower is unable to secure private credit, the borrower must submit written statements and documentation to RHS showing: 
I11(i) The lenders contacted. 
I11(ii) The amount of the loan requested by the borrower and the amount, if any, offered by the lenders. 
I11(iii) The rates and terms offered by the lenders or the specific reasons why other credit is not available. 
I11(iv) The information provided by the borrower to the lenders regarding the purpose of the loan. 
I11(2) If RHS determines that the borrower's submission does not demonstrate the borrower's inability to refinance with private credit, or if the borrower fails to submit the required information, foreclosure may be initiated. 
I11(e) T3Subordination of recapture amount.G1T1 RHS may subordinate its interest in any deferred recapture amount to permit a borrower to refinance with private credit. The amount to which the RHS debt will be subordinated may include: 
I11(1) The amount required to repay the RHS debt, exclusive of recapture;
I11(2) Reasonable closing costs;
I11(3) Up to one percent of the loan amount for loan servicing costs, if required by the lender; and 
I11(4) The cost of any necessary repairs or improvements to the security property. 
I11(f) T3Application for additional credit.G1T1 A borrower who has been asked to refinance with private credit will not be considered for additional credit until the refinancing issue is resolved unless such additional credit is necessary to protect the Government's interest. 

I80ï¿½1A3550.161 
I89Final payment. 
I11(a) T3Payment in full.G1T1 Full payment of a borrower's account includes repayment of principal and outstanding interest, unauthorized assistance, recapture amounts, and charges made to the borrower's account. Any supervised funds ï¿½396ï¿½or funds remaining in a borrower's escrow account will be applied to the borrower's account or returned to the borrower. 
I11(b) T3Release of security instruments.G1T1 RHS may release security instruments when full payment of all amounts owed has been received and verified. If RHS and the borrower agree to settle the account for less than the full amount owed, the security instruments may be released when all agreed-upon amounts are received and verified. Security instruments will not be released until any deferred recapture amount has been paid in full. 
I11(c) T3Payoff statements.G1T1 At the borrower's request, RHS will provide a written statement indicating the amount required to pay the account in full. RHS may charge a fee for statements for the same account if more than 2 statements are requested in any 30 day period. 
I11(d) T3Suitable forms of payment.G1T1 Suitable forms of payment are: check, money order, or bank draft. Borrowers who make cash payments will be assessed a fee to cover conversion to a money order. 
I11(e) T3Recording costs.G1T1 Recording costs for the release of the mortgage will be the responsibility of the borrower, except where State law requires the mortgagee to record or file the satisfaction. 

I80ï¿½1A3550.162 
I89Recapture. 
I11(a) T3Recapture policy.G1T1 Borrowers with loans approved or assumed on or after October 1, 1979, will be required to repay subsidy amounts received through payment subsidy or deferred mortgage assistance. Amounts to be recaptured are due and payable when the borrower transfers title or ceases to occupy the property. 
I11(b) T3Amount to be recaptured.G1T1 (1) The maximum amount to be recaptured is the amount of principal reduction attributed to subsidy and the lesser of: 
I11(i) The amount of subsidy received; or 
I11(ii) 50 percent of the value appreciation. 
I11(2) The value appreciation of a property with a cross-collateralized loan is based on the market value of the dwelling; and if located on a farm, the dwelling and a minimum adequate site. 
I11(3) Interest reduced from the promissory note rate to six percent under the Soldiers and Sailors Relief Act is not subject to recapture. 
I11(c) T3Option to defer payment of recapture amounts.G1T1 (1) Borrowers may defer payment of recapture amounts if the loan is repaid, the title does not transfer, and the borrower continues to occupy the property. 
I11(2) The RHS mortgage securing the deferred recapture amount may be subordinated to permit refinancing if the RHS mortgage will be adequately secured. 
I11(3) Borrowers eligible to defer recapture may receive a discount on the recapture amount due if the recapture amount is paid along with the final payment, or in the case of a final installment, within 60 days of the date RHS notifies the borrower that recapture may be due. 
I11(d) T3Borrower ceases to occupy the property.G1T1 When a borrower ceases to occupy a property: 
I11(1) The borrower may pay the recapture amount in full or reamortize the existing loan to include the recapture amount. 
I11(2) If the borrower does not pay the recapture amount or consent to reamortization within 30 days, RHS may proceed with foreclosure. 
I11(e) T3Assumed loans.G1T1 (1) When a loan subject to recapture is assumed under new rates and terms, the recapture amount may be paid in full by the seller or included in the principal amount assumed by the buyer. 
I11(2) When a loan is assumed under the terms of the promissory note, recapture amounts will not be due. When the new borrower transfers title or ceases to occupy the property, all subsidy subject to recapture before and after the assumption is due. 
I11(3) When a borrower has deferred payment of recapture amounts, the deferred recapture amount may be included in the principal amount of the new loan. 

ï¿½397ï¿½I80ï¿½1A3550.163 
I89Transfer of security and assumption of indebtedness. 
I11(a) T3General policy.G1T1 RHS mortgages contain due-on-sale clauses that generally require RHS consent before title to a security property can be transferred with an assumption of the indebtedness. If it is in the best interest of the Government, RHS will approve the transfer of title and assumption of indebtedness on program or nonprogram (NP) terms, depending on the transferee's eligibility and the property's characteristics. 
I11(b) T3RHS approval of assumptions.G1T1 (1) A borrower with a loan on program terms who wishes to transfer a security property restricted by a due-on-sale clause to a purchaser who wishes to assume the debt must receive prior authorization from RHS. If RHS authorizes the transfer and assumption, the account will be serviced in the purchaser's name and the purchaser will be liable for the loan under the terms of the security instrument. 
I11(2) If a borrower sells a security property with a due-on-sale clause without obtaining RHS authorization, RHS will not approve assumption of the indebtedness, and the loan will be liquidated unless RHS determines that it is in the Government's best interest to continue the loan. If RHS decides to continue the loan, the account will be serviced in the original borrower's name and the original borrower will remain liable for the loan under the terms of the security instrument. 
I11(c) T3Exceptions to due-on-sale clauses.G1T1 (1) Due-on-sale clauses are not triggered by the following types of transfers: 
I11(i) A transfer from the borrower to a spouse or children not resulting from the death of the borrower. 
I11(ii) A transfer to a relative, joint tenant, or tenant by the entirety resulting from the death of the borrower. 
I11(iii) A transfer to a spouse or ex-spouse resulting from a divorce decree, legal separation agreement, or property settlement agreement. 
I11(iv) A transfer to a person other than a deceased borrower's spouse who wishes to assume the loan for the benefit of persons who were dependent on the deceased borrower at the time of death, if the dwelling will be occupied by one or more persons who were dependent on the borrower at the time of death, and there is a reasonable prospect of repayment. 
I11(v) A transfer into an inter vivos trust in which the borrower does not transfer rights of occupancy in the property. 
I11(2) A transferee who obtains property through one of the types of transfer listed in paragraph (c)(1) of this section: 
I11(i) Is not required to assume the loan, and RHS is not permitted to liquidate the loan, if the transferee continues to make scheduled payments and meet all other obligations of the loan. A transferee who does not assume the loan is not eligible for payment assistance or a moratorium. 
I11(ii) May assume the loan on the rates and terms contained in the promissory note, with no down payment. If the account is past due at the time an assumption is executed, the account may be brought current by using any of the servicing methods discussed in subpart E of this part. 
I11(iii) May assume the loan under new rates and terms if the transferee applies and is program-eligible. 
I11(3) Any subsequent transfer of title, except upon death of the inheritor or between inheritors to consolidate title, will be treated as a sale. 
I11(d) T3Requirements for an assumption.G1T1 (1) Loans secured by program-eligible properties to be assumed by program-eligible purchasers may be assumed on program terms. Loans secured by nonprogram properties and loans to be assumed by purchasers who are not eligible for program terms may be assumed on NP terms. 
I11(2) The amount the transferee will assume will be either the current market value less any prior liens and any required down payment, or the indebtedness, whichever is less. 
I11(3) For loans assumed on program terms, the interest rate charged by RHS will be the rate in effect at loan approval or loan closing, whichever is lower. For loans assumed on nonprogram terms, the interest rate will be the rate in effect at the time of loan approval. 
I11(4) If additional financing is required to purchase the property or to make ï¿½398ï¿½repairs, RHS may approve a subsequent loan under subparts B or C of this part. 
I11(5) If an appraisal is required for an assumption on new terms, the purchaser is responsible for the appraisal fee. 
I11(6) If all or a portion of the borrower's account balance is assumed, the borrower and cosigner, if any, will be released from liability on the amount of the indebtedness assumed. If an account balance remains after the assumption, RHS may pursue debt settlement in accordance with subpart F of this part. 
I11(7) Unless it is in the Government's best interest, RHS will not approve an assumption of a secured loan if the seller fails to repay any unsecured RHS loan. 
I11(8) If a loan is secured by a property with a dwelling situated on more than a minimum adequate site and the excess property cannot be sold separately as a minimum adequate site for another dwelling, RHS may approve a transfer of the entire property. If the excess property can be sold separately as a minimum adequate site, RHS will approve assumption of only the dwelling and the minimum adequate site. If the value of the dwelling on the minimum adequate site is less than the amount of the outstanding RHS debt, the remaining debt will be secured by the excess property. The outstanding debt will be converted to an NP loan and reamortized over a period not to exceed 10 years or the final due date of the original promissory note, whichever is sooner. 

I80ï¿½1A3550.164
I89Unauthorized assistance. 
I11(a) T3Definition.G1T1 Unauthorized assistance includes any loan, payment subsidy, deferred mortgage payment, or grant for which the recipient was not eligible. 
I11(b) T3Unauthorized assistance due to false information.G1T1 (1) False information includes information that the recipient knew was incorrect or should have known was incorrect that was provided or omitted for the purposes of obtaining assistance for which the recipient was not eligible. 
I11(2) If the recipient receives an unauthorized loan due to false information, RHS will adjust the account using the NP interest rate that was in effect when the loan was approved. The recipient must pay the account in full within 30 days. 
I11(3) If the recipient receives unauthorized subsidy due to false information, RHS will require the recipient to repay it within 30 days. The account cannot be reamortized to include the unauthorized subsidy. If the recipient repays the unauthorized subsidy, the loan may be continued. 
I11(c) T3Unauthorized assistance due to inaccurate information.G1T1 (1) Inaccurate information includes incorrect information inadvertently provided, used, or omitted without the intent to obtain benefits for which the recipient was not eligible. 
I11(2) RHS will permit a recipient who receives an unauthorized loan due to inaccurate information to retain the loan under the following conditions. 
I11(i) If the inaccurate information was related to the purpose of the loan or the recipient's eligibility, with the exception of income, or the income used was incorrect, but the recipient still qualified as income-eligible, RHS will allow the recipient to continue the loan on existing terms. 
I11(ii) If a section 502 recipient's income was above the moderate-income level, RHS will convert the loan to an NP loan, using the nonprogram interest rate in effect on the date the loan was approved. 
I11(iii) If a section 504 recipient's income was above the very low-income level, RHS will apply the applicable 502 or nonprogram interest rate in effect on the date the loan was approved. 
I11(iv) If an incorrect interest rate was used, RHS will adjust the account using the correct interest rate. 
I11(3) If the recipient receives unauthorized subsidy due to inaccurate information, RHS will require the recipient to repay it within 30 days. If the recipient cannot repay it within 30 days, the account may be reamortized. If the recipient repays the unauthorized subsidy or reamortizes the loan, the loan may be continued. 
I11(d) T3Unauthorized grants.G1T1 Recipients may either repay the unauthorized assistance in a lump sum or execute a promissory note, regardless of whether the unauthorized assistance was due to ï¿½399ï¿½false or inaccurate information. RHS may seek a judgment if the recipient refuses to repay the unauthorized assistance. 
I11(e) T3Account servicing.G1T1 RHS will adjust all accounts retroactively to establish the amount of unauthorized assistance. If the recipient does not repay the unauthorized assistance within 30 days, RHS may accelerate the loan. If the unauthorized assistance is due to inaccurate information and the recipient is unable to repay within 30 days, RHS may reamortize the loan. 
I11(f) T3Accounts with no security.G1T1 If an unauthorized loan or grant is unsecured, RHS may seek the best mortgage obtainable. 

I80ï¿½1A3550.165ï¿½093550.199
I89[Reserved] 

I80ï¿½1A3550.200
I89OMB control number. 
I11The information collection requirements contained in this regulation have been approved by the Office of Management and Budget (OMB) and have been assigned OMB control number 0575ï¿½090166. Public reporting burden for this collection of information is estimated to vary from 5 minutes to 3 hours per response, with an average of 1\1/2\ hours per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to the Department of Agriculture, Clearance Officer, STOP 7602, 1400 Independence Avenue, SW., Washington, DC 20250ï¿½097602. You are not required to respond to this collection of information unless it displays a currently valid OMB control number. 

I56Subpart E_Special Servicing 

I80ï¿½1A3550.201
I89Purpose of special servicing actions. 
I11The Rural Housing Service (RHS) may approve special servicing actions to reduce the number of borrower failures that result in liquidation. Borrowers who have difficulty keeping their accounts current may be eligible for one or more available servicing options including: payment assistance; delinquency workout agreements that temporarily modify payment terms; protective advances of funds for taxes, insurance, and other approved costs; payment moratoriums; and reamortization of the loan. 

I80ï¿½1A3550.202
I89Past due accounts. 
I11An account is past due if the scheduled payment is not received by the due date, or as authorized by State law. 
I11(a) T3Late fee.G1T1 A late fee will be assessed if the full scheduled payment is not received by the 15th day after the due date. 
I11(b) T3LiquidationG1T1_(1) T3For borrowers with monthly payments.G1T1 The account may be accelerated without further servicing when at least 3 scheduled payments are past due or an amount equal to at least 2 scheduled payments is past due for at least 3 consecutive months. In such cases RHS may pursue voluntary liquidation and foreclosure. 
I11(2) T3For borrowers with annual payments.G1T1 The account may be accelerated without further servicing when at least \3/12\ of 1 scheduled payment has not been received by its due date. In such cases, RHS may pursue voluntary liquidation and foreclosure. 

I80ï¿½1A3550.203
I89General servicing actions. 
I11Whenever any of the servicing actions described in this subpart result in reamortization of the account RHS may: 
I11(a) Require a borrower who currently makes annual payments, but receives a monthly income, to convert to monthly payments. 
I11(b) Require the creation and funding of an escrow account for real estate taxes and insurance, if one does not already exist for any borrower with monthly payments. 
I11(c) Convert the method of calculating interest for any account being charged daily simple interest to an amortized payment schedule. 

I80ï¿½1A3550.204
I89Payment assistance. 
I11Borrowers who are eligible may be offered payment assistance in accordance with subpart B of this part. Borrowers who are not eligible for payment assistance because the loan was approved ï¿½400ï¿½before August 1, 1968, or the loan was made on above-moderate or nonprogram (NP) terms, may refinance the loan in order to obtain payment assistance if: 
I11(a) The borrower is eligible to receive a loan with payment assistance;
I11(b) Due to circumstances beyond the borrower's control, the borrower is in danger of losing the property; and 
I11(c) The property is program-eligible. 

I80ï¿½1A3550.205
I89Delinquency workout agreements. 
I11Borrowers with past due accounts may be offered the opportunity to avoid liquidation by entering into a delinquency workout agreement that specifies a plan for bringing the account current. To receive a delinquency workout agreement, the following requirements apply: 
I11(a) A borrower who is able to do so will be required to pay the past-due amount in a single payment. 
I11(b) A borrower who is unable to pay the past-due amount in a single payment must pay monthly all scheduled payments plus an agreed upon additional amount that brings the account current within 2 years or the remaining term of the loan, whichever is shorter. 
I11(c) If a borrower becomes more than 30 days past due under the terms of a delinquency workout agreement, RHS may cancel the agreement. 

I80ï¿½1A3550.206
I89Protective advances. 
I11RHS may pay for fees or services and charge the cost against the borrower's account to protect the Governments interest. 
I11(a) T3Advances for taxes and insurance.G1T1 RHS may advance funds to pay real estate taxes, hazard and flood insurance premiums, and other related costs, as well as amounts needed to fund the current escrow cycle. 
I11(b) T3Advances for costs other than taxes and insurance.G1T1 Protective advances for costs other than taxes and insurance, such as emergency repairs, will be made only if the borrower cannot obtain a subsequent loan. 
I11(c) T3Repayment arrangements.G1T1 (1) Advances for borrowers with multiple loans will be charged against the largest loan. 
I11(2) Amounts advanced will be due with the next scheduled payment. RHS may schedule repayment consistent with the borrowers ability to repay or reamortize the loan. 
I11(3) Advances will bear interest at the promissory note rate of the loan to which the advance was charged. 

I80ï¿½1A3550.207
I89Payment moratorium. 
I11RHS may defer a borrowers scheduled payments for up to 2 years. NP borrowers are not eligible for a payment moratorium. 
I11(a) T3Borrower eligibility.G1T1 For a borrower to be eligible for a moratorium, all of the following conditions must be met: 
I11(1) Due to circumstances beyond the borrower's control, the borrower is temporarily unable to continue making scheduled payments because: 
I11(i) The borrower's repayment income fell by at least 20 percent within the past 12 months; 
I11(ii) The borrower must pay unexpected and unreimbursed expenses resulting from the illness, injury, or death of the borrower or a family member; or 
I11(iii) The borrower must pay unexpected and unreimbursed expenses resulting from damage to the security property in cases where adequate hazard insurance was not available or was prohibitively expensive. 
I11(2) The borrower occupies the dwelling, unless RHS determines that it is uninhabitable. 
I11(3) The borrower's account is not currently accelerated. 
I11(b) T3Reviews of borrower eligibility.G1T1 (1) Periodically RHS may require the borrower to submit financial information to demonstrate that the moratorium should be continued. The moratorium may be canceled if: 
I11(i) The borrower does not respond to a request for financial information;
I11(ii) RHS receives information indicating that the moratorium is no longer required; or 
I11(iii) In the case of a moratorium granted to pay unexpected or unreimbursed expenses, the borrower cannot show that an amount at least equal to the deferred payments has been applied toward the expenses. 
I11(2) At least 30 days before the moratorium is scheduled to expire, RHS will ï¿½401ï¿½require the borrower to provide financial information needed to determine whether the borrower is able to resume making scheduled payments. 
I11(c) T3Resumption of scheduled payments.G1T1 When the borrower is able to resume scheduled payments, the loan will be reamortized to include the amount deferred during the moratorium and the borrower will be required to escrow. If the new monthly payment, after consideration of the maximum amount of payment subsidy available to the borrower, exceeds the borrower's repayment ability, all or part of the interest that has accrued during the moratorium may be forgiven. 
I11(d) T3Borrowers unable to resume scheduled payments.G1T1 If even after all appropriate servicing actions have been taken the borrower is unable to resume making scheduled payments after 2 consecutive years of being on a moratorium, the account will be liquidated. 

I80ï¿½1A3550.208
I89Reamortization using promissory note interest rate. 
I11Reamortization using the promissory note interest rate may be authorized when RHS determines that reamortization is required to enable the borrower to meet scheduled obligations, and only if the Government's lien priority is not adversely affected. 
I11(a) T3Permitted uses.G1T1 Reamortization at the promissory note interest rate may be used to accomplish a variety of servicing actions, including to: 
I11(1) Repay unauthorized assistance due to inaccurate information. 
I11(2) Repay principal and interest accrued and advances made during a moratorium. 
I11(3) Bring current an account under a delinquency workout agreement after the borrower has demonstrated the willingness and ability to meet the terms of the loan and delinquency workout agreement and reamortization is in the borrower's and Government's best interests. 
I11(4) Bring a delinquent account current in the case of an assumption where the due on sale clause is not triggered as described in ï¿½1A3550.163(c). 
I11(5) Cover the remaining debt when a portion of the security property is being transferred but the acquisition price does not cover the outstanding debt. The remaining balance will be reamortized for a period not to exceed 10 years or the final due date of the note being reamortized, whichever is sooner. 
I11(b) T3Payment term of reamortized loan.G1T1 Except as noted in paragraph (a)(6) of this section, the term of the reamortized loan may be extended to the maximum term for which the borrower was eligible at the time the loan was originally made, less the number of years the loan has been outstanding. In all cases, the term must not exceed the remaining security life of the property. 

I80ï¿½1A3550.209
I89[Reserved] 

I80ï¿½1A3550.210
I89Offsets. 
I11Any money that is or may become payable from the United States to an RHS borrower may be subject to administrative, salary, or Internal Revenue Service (IRS) offsets for the collection of a debt owed to RHS. 
I11(a) T3IRS offset.G1T1 RHS may take action to effect offset of claims due RHS against tax refunds due to RHS debtors under 26 U.S.C. 6402, in accordance with the provisions of 31 U.S.C. 3720A and 26 CFR 301.6402ï¿½096. 
I11(b) T3Salary offset.G1T1 Offset of claims due to RHS may be collected pursuant to the salary offset provisions in 7 CFR part 3, subpart C for a federal employee or other persons covered in that subpart. 
I11(c) T3Administrative offset.G1T1 RHS may take action to effect administrative offset to recover delinquent claims due to it in accordance with the procedures in 7 CFR part 3, subpart B. 
I11(d) T3Offset by other federal agencies.G1T1 Escrow funds and loan and grant funds held or payable by RHS are not subject to offset by other federal agencies. 

I80ï¿½1A3550.211
I89Liquidation. 
I11(a) T3Policy.G1T1 When RHS determines that a borrower is unable or unwilling to meet loan obligations, RHS may accelerate the loan and, if necessary, acquire the security property. The borrower is responsible for all expenses associated with liquidation and acquisition. If the account is satisfied in full, the borrower will be released from liability. If the account is not satisfied in full, RHS may pursue any deficiency ï¿½402ï¿½unless the borrower received a moratorium at any time during the life of the loan and faithfully tried to repay the loan. 
I11(b) T3Tribal allotted or trust land.G1T1 Liquidations involving a security interest in tribal allotted or trust land shall only be pursued after offering to transfer the account to an eligible tribal member, the tribe, or the Indian Housing Authority. Forced liquidation of RHS security interests in Indian trust lands or on tribal allotted land will be recommended only after the State Director has determined it is in the best interest of the Government. 
I11(c) T3Acceleration and foreclosure.G1T1 If RHS determines that foreclosure is in the best interest of the Government, RHS will send an acceleration notice to each borrower and any cosigner. If the borrower does not pay the full account balance and meet the other terms of the loan within 30 days of acceleration, RHS may foreclose. RHS will not accept partial payment of an accelerated loan unless required to accept the payment by State law. 
I11(d) T3Voluntary liquidation.G1T1 Borrowers may voluntarily liquidate through: 
I11(1) T3Refinancing or sale.G1T1 The borrower may refinance or sell the security property for at least net recovery value and apply the proceeds to the account. 
I11(2) T3Deed in lieu of foreclosure.G1T1 RHS may accept a deed in lieu of foreclosure to convey title to the security property only after the debt has been accelerated and when it is in the Government's best interest. 
I11(3) T3Offer by third party.G1T1 If a junior lienholder or cosigner makes an offer in the amount of at least the net recovery value, RHS may assign the note and mortgage. 
I11(e) T3Bankruptcy.G1T1 (1) When a petition in bankruptcy is filed by a borrower after acceleration, collection actions and foreclosure actions are suspended in accordance with the provisions of the Bankruptcy Code. 
I11(2) RHS may accept conveyance of security property by the trustee in bankruptcy if the Bankruptcy Court has approved the transaction, RHS determines the conveyance is in the best interest of the Government, and RHS will acquire title free of all liens and encumbrances except RHS liens. 
I11(3) Whenever possible in a Chapter 7 Bankruptcy, a reaffirmation agreement will be signed by the borrower and approved by the court prior to discharge, if RHS decides to continue with the borrower. 
I11(f) T3Junior lienholder foreclosure.G1T1 When a junior lienholder foreclosure does not result in payment in full of the RHS debt but the property is sold subject to the RHS lien, RHS may liquidate the account unless the new owner is eligible to assume the RHS debt and actually assumes the RHS debt. 
I11(g) T3Payment subsidy.G1T1 If the borrower is receiving payment subsidy, the payment subsidy agreement will not be canceled when the debt is accelerated, but will not be renewed unless the account is reinstated. 
I11(h) T3Eligibility for special servicing actions.G1T1 A borrower is not eligible for special servicing actions once the account has been accelerated. 
I11(i) T3Reporting.G1T1 RHS may report to IRS and credit reporting agencies any debt settled through liquidation. 

I80ï¿½1A3550.212ï¿½093550.249
I89[Reserved] 

I80ï¿½1A3550.250
I89OMB control number. 
I11The information collection requirements contained in this regulation have been approved by the Office of Management and Budget (OMB) and have been assigned OMB control number 0575ï¿½090166. Public reporting burden for this collection of information is estimated to vary from 5 minutes to 3 hours per response, with an average of 1\1/2\ hours per response, including time for reviewing insurrections, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to the Department of Agriculture, Clearance Officer, STOP 7602, 1400 Independence Avenue, SW., Washington, DC 20250ï¿½097602. You are not required to respond to this collection of information unless it displays a currently valid OMB control number. 

ï¿½403ï¿½I56Subpart F_Post-Servicing Actions 

I80ï¿½1A3550.251
I89Property management and disposition. 
I11(a) T3Policy.G1T1 Rural Housing Service (RHS) will manage custodial property and Real Estate Owned (REO) property to protect the Government's interest, and may dispose of REO property through direct sales, sealed bid, or auction. RHS will follow affirmative fair housing marketing policies. 
I11(b) T3Custodial property.G1T1 RHS may take custodial possession of security property that has been abandoned, or for other reasons necessary to protect the Government's security. After taking custodial possession of a security property, RHS may maintain and repair the security property as needed to protect the Government's interest, pay required real estate taxes and assessments, and secure personal property left on the premises. Expenses will be charged to the borrower's account. Custodial property may be leased when it is in the Government's best interest and in such cases the borrower's account will be credited for income from the security property. 
I11(c) T3REO propertyG1T1_(1) T3Classification.G1T1 When RHS takes title to a security property, it is classified as either program or nonprogram (NP) property. An REO property that is eligible for financing under the section 502 program, or which could reasonably be repaired to be eligible, is classified as program property. An REO property that cannot reasonably be repaired to be eligible as section 502 property, and property that has been improved to a point that it will no longer qualify as modest under section 502, is classified as NP property. 
I11(2) T3Disclosing decent, safe, and sanitary defects.G1T1 When RHS determines that an REO property to be sold is not decent, safe, and sanitary, or does not meet cost-effective energy conservation standards, it will disclose the reasons why. The deed by which such an REO property is conveyed will contain a covenant restricting it from residential use until it is decent, safe, and sanitary and meets the RHS cost-effective energy conservation standards. RHS will also notify any potential purchaser of any known lead-based paint hazards. 
I11(3) T3Property on Indian tribal allotted or trust land.G1T1 REO property which is located on Indian tribal allotted or trust land, will be sold or otherwise disposed of only to a member of the particular tribe having jurisdiction over the allotted or tribal land, to the tribe, or to an Indian housing authority serving the tribe on a first-come, first-served basis. 
I11(4) T3Reservation of program REO properties.G1T1 (i) Program REO properties are reserved for program-eligible applicants and nonprofit organizations or public bodies providing transitional housing during the first 60 days after the date of the first notice of sale, and during the first 30 days following any reduction in price or any other change in credit terms or other sale terms. After the expiration of a reservation period, program REO properties can be bought by any buyer. 
I11(ii) An offer on a program REO property from a buyer who does not qualify for a section 502 program loan may be submitted during a reservation period, but is considered to have been received on the day after the reservation period ends. 
I11(iii) No offer is considered until 3 business days after the date the property is offered for sale. An offer received during the 3-day holding period is not considered until the 4th day, and is evaluated with any other offers actually received on the 4th day. 
I11(5) T3Priority of offers received the same day.G1T1 (i) Offers received on the same business day are selected in the following order: 
I11(A) Offers from program-eligible applicants, with a request for credit on program terms. All offers are evaluated as if they were submitted at the listed price, regardless of the offering price. 
I11(B) Offers from nonprofits or public bodies for conversion to use as transitional housing or for other special purposes as specified in paragraph (d)(4) of this section. 
I11(C) Cash offers, from highest to lowest. 
I11(D) NP credit offers, from highest to lowest. 
I11(ii) Acceptable offers of equal priority received on the same business day are selected by lot. 
ï¿½404ï¿½I11(iii) REO properties are not held off the market pending the outcome of an appeal of RHS rejection of a request for financing. 
I11(6) T3Sale by sealed bid or auction.G1T1 RHS may authorize the sale of an REO property by sealed bid or public auction when it is in the best interest of the Government. RHS will publicly solicit requests for sealed bids and publicize auctions. If a successful bidder is unable to settle the transaction under the terms of the offer, except for the financing contingency, any required bid deposit may be retained by RHS. If the highest bid is lower than the minimum acceptable bid established by RHS, or if no acceptable bids are received, RHS may negotiate a sale without further public notice. 
I11(d) T3Special purposes.G1T1 (1) REO property may be purchased for conversion to multiple family housing. 
I11(2) When a nonprofit organization or public body notifies RHS in writing of its intent to buy an REO property to provide transitional housing for the homeless, RHS may withdraw the property from the market for up to 30 days to give the entity an opportunity to execute a purchase contract. The listed price may be discounted for offers on a nonprogram REO property at any time, and on a program REO property after the 60-day reservation period. No down payment is required, and the loan term will be for a maximum of 30 years. Until RHS executes a sales agreement, an offer from a program-eligible applicant will receive priority, regardless of a nonprofit's interest in purchasing the REO property for use as transitional housing. 
I11(3) NP properties may be leased to a nonprofit organization or public body to provide transitional housing for the homeless at an annual cost of one dollar. When an REO property is to be leased as transitional housing, RHS will make repairs needed to put the property in decent, safe, and sanitary condition. The lessee is responsible for all future repairs and maintenance. 
I11(4) REO property may be sold under special provisions to nonprofit organizations or public bodies for the purpose of providing affordable housing to very low- and low-income families. 

I80ï¿½1A3550.252 
I89Debt settlement policies. 
I11(a) T3Applicability.G1T1 Debt settlement procedures may be initiated to collect any amounts due to RHS including: 
I11(1) Balances remaining on loan accounts after all liquidation proceeds or credits have been applied; 
I11(2) Subsidy recapture or grant amounts due; and 
I11(3) Unauthorized assistance due. 
I11(b) T3Judgment.G1T1 RHS may seek a judgment whenever a judgment might enable RHS to collect all or a significant portion of an amount owed. 
I11(c) T3Multiple loans.G1T1 RHS does not settle debts for one loan while other RHS loans on the same security property remain active. 
I11(d) T3Cosigners and claims against estates.G1T1 RHS may use any and all remedies available under law to collect from any cosigner and from a deceased borrower's estate. 
I11(e) T3Reporting.G1T1 RHS will report to the Internal Revenue Service and credit reporting agencies any debt settled through cancellation, compromise, or adjustment. 
I11(f) T3Settlement during legal or investigative action.G1T1 Cases that are under investigation for fiscal irregularity or have been referred to the Office of the Inspector General, the Office of the General Counsel, or the U.S. Attorney will not be considered for debt settlement until final action by the investigating or prosecuting entity has been taken. 
I11(g) T3Offsets.G1T1 RHS may request offsets as described in ï¿½1A3550.210 to collect amounts owed. 
I11(h) T3Escrow funds.G1T1 At liquidation all funds held in escrow or unapplied funds will be applied against the debt. 

I80ï¿½1A3550.253 
I89Settlement of a debt by compromise or adjustment. 
I11Compromise or adjustment offers may be initiated by the debtor or by RHS. RHS will approve only those compromises and adjustments that are in the best interest of the Government. 
I11(a) T3Compromise.G1T1 A compromise is an agreement by RHS to release a debtor from liability upon receipt of a specified lump sum that is less than the total amount due. 
I11(b) T3Adjustments.G1T1 An adjustment is an agreement by RHS to release a debtor from liability generally upon receipt of ï¿½405ï¿½an initial lump sum representing the maximum amount the debtor can afford to pay and periodic additional payments over a period of up to 5 years. 
I11(c) T3Timing of offers.G1T1 (1) For a settlement offer to be considered, secured debts must be fully matured under the terms of the debt instrument or must have been accelerated by RHS. 
I11(2) Unsecured debts owed after the sale of the security property may be proposed for compromise or adjustment at any time. Debts that were never secured may be proposed for compromise or adjustment when they are due and payable. 
I11(d) T3Retention of security property.G1T1 The debtor may retain the security property if the compromise payment is at least equal to the net recovery value, and it is in the best interest of the Government to allow the debtor to retain the security property. 

I80ï¿½1A3550.254ï¿½093550.299
I89[Reserved] 

I80ï¿½1A3550.300 
I89OMB control number. 
I11The information collection requirements contained in this regulation have been approved by the Office of Management and Budget (OMB) and have been assigned OMB control number 0575ï¿½090166. Public reporting burden for this collection of information is estimated to vary from 5 minutes to 3 hours per response, with an average of 1\1/2\ hours per response, including time for review instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to the Department of Agriculture, Clearance Officer, STOP 7602, 1400 Independence Avenue, SW., Washington, DC 20250ï¿½097602.










I95Pt. 3565
I52PART 3565_GUARANTEED RURAL RENTAL HOUSING PROGRAM



I86Subpart A_General Provisions
S8006I18Sec.
S8010I263565.1Purpose.
I263565.2Applicability and authority.
I263565.3Definitions.
I263565.4Availability of assistance.
I263565.5Ranking and selection criteria.

I263565.6Inclusion of tax-exempt debt.

I263565.7Agency environmental requirements.

I263565.8Civil rights compliance.

I263565.9Compliance with federal requirements.
I263565.10Conflict of interest.
I263565.11ï¿½093565.12[Reserved]
I263565.13Exception authority.
I263565.14Review and appeals.
I263565.15Oversight and monitoring.
I263565.16[Reserved]
I263565.17Demonstration programs.
I263565.18ï¿½093565.49[Reserved]
I263565.50OMB control number.
I86Subpart B_Guarantee Requirements
I263565.51Eligible loans and advances.
I263565.52Extent of the guarantee.
I263565.53Guarantee fees.
I263565.54Transferability of the guarantee.
I263565.55Participation loans.
I263565.56Suspension or termination of loan guarantee agreement.
I263565.57Modification, extension, reinstatement of loan guarantee.
I263565.58ï¿½093565.99[Reserved]
I263565.100OMB control number.
I86Subpart C_Lender Requirements
I263565.101Responsibility of lenders.
I263565.102Lender eligibility.
I263565.103Approval requirements.
I263565.104Application requirements.
I263565.105Lender compliance.
I263565.106Construction lender requirements.
I263565.107[Reserved]
I263565.108Responsibility for actions of agents and mortgage brokers.
I263565.109Minimum loan prohibition.
I263565.110Insolvency of lender.
I263565.111Lobbying activities.
I263565.112ï¿½093565.149[Reserved]
I263565.150OMB control number.
I86Subpart D_Borrower Eligibility Requirements
I263565.151Eligible borrowers.
I263565.152Control of land.
I263565.153Experience and capacity of borrower.
I263565.154Previous participation in state and federal programs.
I263565.155Identity of interest.
I263565.156Certification of compliance with federal, state, and local laws and with Agency requirements.

I263565.157ï¿½093565.199[Reserved]
I263565.200OMB control number.
I86Subpart E_Loan Requirements
I263565.201General.
I263565.202Tenant eligibility.
I263565.203Restrictions on rents.
ï¿½406ï¿½I263565.204Maximum loan amount.
I263565.205Eligible uses of loan proceeds.
I263565.206Ineligible uses of loan proceeds.
I263565.207Form of lien.
I263565.208Maximum loan term.
I263565.209Loan amortization.
I263565.210Maximum interest rate.
I263565.211Interest credit.
I263565.212Multiple guaranteed loans.
I263565.213Geographic distribution.
I263565.214Release of liability.
I263565.215Special conditions.
I263565.216ï¿½093565.249[Reserved]
I263565.250OMB control number.
I86Subpart F_Property Requirements
I263565.251Eligible property.
I263565.252Housing types.
I263565.253Form of ownership.
I263565.254Property standards.
I263565.255Environmental requirements.
I263565.256Architectural services.
I263565.257Procurement actions.
I263565.258ï¿½093565.299[Reserved]
I263565.300OMB control number.
I86Subpart G_Processing Requirements
I263565.301Loan standards.
I263565.302Allowable fees.
I263565.303Issuance of loan guarantee.
I263565.304Lender loan processing responsibilities.
I263565.305Mortgage and closing requirements.
I263565.306ï¿½093565.349[Reserved]
I263565.350OMB control number.
I86Subpart H_Project Management
I263565.351Project management.
I263565.352Preservation of affordable housing.
I263565.353Affirmative fair housing marketing.
I263565.354Fair housing accommodations.
I263565.355Changes in ownership.
I263565.356ï¿½093565.399[Reserved]
I263565.400OMB control number.
I86Subpart I_Servicing Requirements
I263565.401Servicing objectives.
I263565.402Servicing responsibilities.
I263565.403Special servicing.
I263565.404Transfer of mortgage servicing.
I263565.405ï¿½093565.449[Reserved]
I263565.450OMB control number.
I86Subpart J_Assignment, Conveyance, and Claims
I263565.451Preclaim requirements.
I263565.452Decision to liquidate.
I263565.453Disposition of the property.
I263565.454[Reserved]
I263565.455Alternative disposition methods.
I263565.456Filing a claim.
I263565.457Determination of claim amount.
I263565.458Withdrawal of claim.
I263565.459ï¿½093565.499[Reserved]
I263565.500OMB control number.


Q04I21T5Authority:  T15 U.S.C. 301; 7 U.S.C. 1989; 42 U.S.C. 1480.

Q04I21T5Source: T163 FR 39458, July 22, 1998, unless otherwise noted.


I56Subpart A_General Provisions


I80ï¿½1A3565.1
I89Purpose.
I11The purpose of the Guaranteed Rural Rental Housing Program (GRRHP) is to increase the supply of affordable rural rental housing, through the use of loan guarantees that encourage partnerships between the Rural Housing Service, private lenders and public agencies.


I80ï¿½1A3565.2
I89Applicability and authority.
I11The regulation prescribes the policies, authorizations, and procedures for the guarantee of multifamily loans under section 538 of the Housing Act of 1949.


I80ï¿½1A3565.3
I89Definitions.
I11T3Administrator.G1T1 The Administrator of the Rural Housing Service, or his or her designee.
I11T3Agency.G1T1 The Rural Housing Service, or a successor agency.
I11T3Allowable claim amount.G1T1 The total losses incurred by the lender, as calculated pursuant to subpart J of this part.
I11T3Applicable Federal Rate (AFR).G1T1 The interest rate set by the federal government for federal financing programs pursuant to section 42 of the Internal Revenue Code.
I11T3Approved lender.G1T1 An eligible lender who has been authorized by the Agency to originate and service guaranteed multifamily loans under the program.
I11T3Assignment.G1T1 The delivery by a lender to the Agency of the note and any other security instruments securing the guaranteed loan; and any and all liens, interest, or claims the lender may have against the borrower.
I11T3Assistance.G1T1 Financial assistance in the form of a loan guarantee or interest credit received from the Agency.
I11T3Borrower.G1T1 The individuals or entities responsible for repaying the loans.
I11T3Claim.G1T1 The presentation to the Agency of a demand for payment for losses ï¿½407ï¿½incurred on a loan guaranteed under the program.
I11T3Combination construction and permanent loan.G1T1 The Agency may guarantee a construction contract which has credit enhancements to protect the Government's interest. The construction guarantee will be converted to a permanent guarantee when construction is completed and the requirements contained in the conditional commitment are met.
I11T3Conditional commitment.G1T1 The written commitment by the Agency to guarantee a loan subject to the stated terms and conditions.
I11T3Correspondent relationship.G1T1 A contractual relationship between an approved lender and a non-approved lender or mortgage broker in which the correspondent performs certain origination, underwriting or servicing functions for the approved lender.
I11T3Default.G1T1 Failure by a borrower to meet any obligation or term of a loan, grant, or regulatory agreement, or any program requirement.
I11T3Delinquency.G1T1 Failure to make a timely payment under the terms of the promissory note or regulatory agreement.
I11T3Department of Housing and Urban Development (HUD).G1T1 A federal agency which may be a partner in some of the Agency guarantees.

I11T3Due diligence.G1T1 The process of evaluating real estate in the context of a real estate transaction for the presence of contamination from release of hazardous substances, petroleum products, or other environmental hazards and determining what effect, if any, the contamination has on the regulatory status or security value of the property.
I11T3Eligible borrower.G1T1 A borrower who meets the requirements of subpart D of this part.
I11T3Eligible lender.G1T1 A lender who meets the requirements of subpart C of this part or any successor regulation.
I11T3Eligible loan.G1T1 A loan that meets the requirements of subpart E of this part or any successor regulation.
I11T3Eligible rural area.G1T1 An eligible rural area is an area which meets the requirements of part 3550 of this chapter or any successor regulation.
I11T3Fannie Mae.G1T1 A Federally chartered, publicly owned enterprise created by Congress to purchase, sell or otherwise facilitate the purchase or sale of mortgages in the secondary mortgage market.
I11T3Federal Home Loan Bank System.G1T1 A system of member savings and loans, banks and other lenders whose primary business is the making of housing loans.
I11T3Final claim payment.G1T1 The amount due to the lender (or the Agency) after disposition of the collateral is complete and the proceeds from liquidation, as well as any other claim payments, are applied against the allowable claim amount.
I11T3Foreclosure.G1T1 The process by which the ownership interest of a borrower in a mortgaged property is extinguished and the security is liquidated with the proceeds applied to the loan.
I11T3Freddie Mac.G1T1 A Federally chartered, publicly owned enterprise created to purchase, sell or otherwise facilitate the purchase or sale of mortgages in the secondary mortgage market.
I11T3GRRHP.G1T1 Guaranteed Rural Rental Housing Program.
I11T3Guarantee fees.G1T1 The fees paid by the lender to the Agency for the loan guarantee.
I11(1) An initial guarantee fee is due at the time the guarantee is issued.
I11(2) An annual guarantee fee is due at the beginning of each year that the guarantee remains in effect.
I11T3Guaranteed loan.G1T1 Any loan for which the Agency provides a loan guarantee.
I11T3Housing Finance Agency (HFA).G1T1 A state or local government instrumentality authorized to issue housing bonds or otherwise provide financing for housing. Identity of interest. With respect to a project, an actual or apparent financial interest of any type, that exists or will exist among the borrower, contractor, lender, syndicator, management agent, suppliers of materials or services, including professional services, or vendors (including servicing and property disposal), in any combination of relationships which may result in an actual or perceived conflict of interest
I11T3Income eligibility.G1T1 A determination that the income of a tenant at initial occupancy does not exceed 115 percent of the area median income as such area ï¿½408ï¿½median income is defined by HUD or a successor agency.
I11T3Interest credit.G1T1 A subsidy available to eligible borrowers that reduces the effective interest rate of the loan to the AFR.
I11T3Land lease.G1T1 A written agreement between a landowner and a borrower for the possession and use of real property for a specified period of time.
I11T3Lease.G1T1 A contract containing the rights and obligations of a tenant or cooperative member and a borrower, including the amount of the monthly occupancy charge and other terms under which the tenant will occupy the housing.
I11T3Lender.G1T1 A bank or other financial institution, including a housing finance agency, that originates or services the guaranteed loan.
I11T3Lender agreement.G1T1 The written agreement between the Agency and the lender containing the requirements the lender must meet on a continuing basis to participate in the program.
I11T3Loan.G1T1 A mechanism by which a lender funds the acquisition and development of a multifamily project. A loan in this context is secured by a mortgage executed by the lender and borrower.
I11T3Loan guarantee.G1T1 A pledge to pay part of the loss incurred by a lender in the event of default by the borrower.
I11T3Loan guarantee agreement.G1T1 The written agreement between the Agency and the lender containing the terms and conditions of the guarantee with respect to an individual loan.
I11T3Loan participation.G1T1 A loan made by more than one lender wherein each lender funds an individual portion of the loan.
I11T3Loan-to-value ratio.G1T1 The amount of the loan divided by the appraised market value of the project.
I11T3Maximum guarantee payment.G1T1 The maximum payment by the Agency under the guarantee agreement computed by applying the guarantee percentage times the allowable claim amount, but not to exceed original principal amount.
I11T3Mortgage.G1T1 A written instrument evidencing or creating a lien against real property for the purpose of providing collateral to secure the repayment of a loan. For program purposes, this may include a deed of trust or any similar document.
I11T3Multifamily project.G1T1 A project designed with five or more living units.
I11T3NOFA.G1T1 A ``Notice of Funding Availability'' published in the T4Federal RegisterG1T1 to inform interested parties of the availability of assistance and other non-regulatory matters pertinent to the program.
I11T3Non-monetary default.G1T1 A default that does not involve the payment of money.
I11T3Note.G1T1 Any note, bond, assumption agreement, or other evidence of indebtedness pertaining to a guaranteed loan.

I11T3Office of Inspector General (OIG).G1T1 The agency of USDA established under the Inspector General Act.
I11T3Payment effective date.G1T1 For the month payment is due, the day of the month on which payment will be effectively applied to the account by the lender, regardless of the date payment is received.
I11T3Permanent loan.G1T1 A loan that becomes effective upon Agency acceptance of a lender certification of an acceptable minimum level of occupancy.
I11T3Prepayment.G1T1 The payment of the outstanding balance on a loan prior to the note's maturity date.
I11T3Project.G1T1 The total number of rental housing units and related facilities subject to a guaranteed loan that are operated under one management plan and one Regulatory Agreement.
I11T3Program requirements.G1T1 Any requirements contained in any loan document, guarantee agreement, statute, regulation, handbook, or administrative notice.
I11T3Promissory note.G1T1 See ``Note''.
I11T3Qualified alien.G1T1 For the purposes of this part, qualified alien refers to any person lawfully admitted into the country who meets the criteria of 42 U.S.C. 1436a.
I11T3Real estate owned.G1T1 Denotes real estate that has been acquired by the lender or the Agency (often known as ``inventory property'').
I11T3Recourse.G1T1 The lender's right to seek satisfaction from the borrower's personal financial resources or other resources for monetary default.
I11T3Regulatory agreement.G1T1 The agreement that establishes the relationship among the Agency, the lender, and the ï¿½409ï¿½borrower; and contains the borrower's responsibilities with respect to all aspects of the management and operation of the project.
I11T3RHS.G1T1 The Rural Housing Service within the Rural Development mission area, or a successor agency, which administers section 538 guarantees.
I11T3Rural area.G1T1 A geographic area as defined in section 520 of the Housing Act of 1949.
I11T3Rural Development.G1T1 A mission area within USDA which includes RHS, Rural Utilities Service, and Rural Business-Cooperative Service.
I11T3Servicing.G1T1 The broad scope of activities undertaken to manage the performance of a loan throughout its term and to assure compliance with the program requirements.
I11T3Single asset ownership.G1T1 A borrower who owns only one project.
I11T3Surplus cash.G1T1 The borrower's remaining funds at the project's fiscal year end, after making all required payments, excluding required reserves and escrows.
I11T3Tenant.G1T1 The individual that holds the right to occupy a unit in accordance with the terms of a lease executed with the project owner.
I11T3U.S. citizen.G1T1 An individual who resides as a citizen in any of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Marinas, the Federated States of Micronesia, the Republic of Palau, or the Republic of the Marshall Islands.
I11T3USDA.G1T1 The United States Department of Agriculture.


I80ï¿½1A3565.4
I89Availability of assistance.
I11The Agency's authority to enter into commitments, guarantee loans, or provide interest credits is limited to the extent that appropriations are available to cover the cost of the assistance. The Agency will publish a NOFA in the T4Federal RegisterG1T1 to notify interested parties of the availability of assistance.


I80ï¿½1A3565.5
I89Ranking and selection criteria.

I11(a) T3Threshold criteria.G1T1 Applications for loan guarantee submitted by lenders must include a loan request for a project that meets all of the following threshold criteria:
I11(1) The project must involve an owner and a development team with qualifications and experience sufficient to carry out development, management, and ownership responsibilities, and the owner and development team must not be under investigation or suspension from any government programs;
I11(2) The project must involve the financing of a property located in an eligible rural area;
I11(3) Demonstrate a readiness, for the project to proceed, including submission of a complete application for a loan guarantee and evidence of financing;
I11(4) Demonstrate market and financial feasibility; and
I11(5) Include evidence that the credit risk is reasonable, taking into account conventional lending practices, and factors related to concentration of risk in a given market and with a given borrower.

I11(b) T3Priority projects.G1T1 Priority will be given to projects: in smaller rural communities, in the most needy communities having the highest percentage of leveraging, having the lowest interest rate, having the highest ratio of 3ï¿½095 bedroom units to total units, or located in Empowerment Zones/Enterprise Communities or on tribal lands. In addition, the Agency may, at its sole discretion, set aside assistance for or rank projects that meet important program goals. Assistance will include both loan guarantees and interest credits. Priority projects must compete for set-aside funds. The Agency will announce any assistance set aside and selection criteria in the NOFA.

Q04I20[63 FR 39458, July 22, 1998, as amended at 64 FR 32371, June 16, 1999]







I80ï¿½1A3565.6
I89Inclusion of tax-exempt debt.

I11Tax-exempt financing can be used a source of capital for the guaranteed loan.

Q04I20[64 FR 32371, June 16, 1999]




I80ï¿½1A3565.7
I89Agency environmental requirements.
I11The Agency will take into account potential environmental impacts of ï¿½410ï¿½proposed projects by working with applicants, other federal agencies, Indian tribes, State and local governments, and interested citizens and organizations in order to formulate actions that advance the program goals in a manner that will protect, enhance, and restore environmental quality. Actions taken by the Agency under this subpart are subject to an environmental review conducted in accordance with the requirements of 7 CFR part 1940, subpart G or any successor regulations.



I80ï¿½1A3565.8
I89Civil rights compliance.

I11(a) All actions taken by the Agency, or on behalf of the Agency, by a lender will be conducted without regard to race, color, religion, national origin, sex, marital status, age, income from public assistance or having exercised their right under the Consumer Credit Protection Act, and in accordance with the Equal Credit Opportunity Act (ECOA).
I11(b) Any action related to the sale, rental or advertising of dwellings; in the provision of brokerage services; or in making available residential real estate transactions involving Agency assistance, must be in accordance with the Fair Housing Act, which prohibits discrimination on the basis of race, color, religion, sex, national origin, familial status or handicap. It is unlawful for a lender or borrower participating in the program to:

I11(1) Refuse to make accommodations in rules, policies, practices, or services if such accommodations are necessary to provide a person with a disability an opportunity to use or continue to use a dwelling unit and all public and common use areas; and
I11(2) Refuse to allow an individual with a disability to make reasonable modifications to a unit at his or her expense, if such modifications may be necessary to afford the individual full enjoyment of the unit.
I11(c) Any resident or prospective resident seeking occupancy or use of a unit, property or related facility for which a loan guarantee has been provided, and who believes that he or she is being discriminated against may file a complaint with the lender, the Agency or the Department of Housing and Urban Development. A written complaint should be sent to the Secretary of Agriculture or of the Department of Housing and Urban Development in Washington, DC.
I11(d) Lenders and borrowers that fail to comply with the requirements of title VIII of the Civil Rights Act of 1968, as amended (the Fair Housing Act), are liable for those sanctions authorized by law.
I11(e) For guaranteed loans with ``interest credit,'' the following additional civil rights laws will apply and be enforced by the agency delivering this guarantee program: title VI of the Civil Rights Act of 1964, section 504 of the Rehabilitation Act of 1973, the Americans with Disabilities Act, Age Discrimination Act of 1975, and title IX of the Education Amendments of 1972.
I11(f) In accordance with title VI, borrowers will be subjected to compliance reviews for projects that receive interest credit.

Q04I20[64 FR 32371, June 16, 1999]



I80ï¿½1A3565.9
I89Compliance with federal requirements.

I11The Agency and the lender are responsible for ensuring that the application is in compliance with all applicable federal requirements, including the following specific statutory requirements:
I11(a) T3Intergovernmental review.G1T1 7 CFR part 3015, subpart V, ``Intergovernmental Review of Department of Agriculture Programs and Activities'', or successor regulation, including the Agency supplemental administrative instruction, RD Instruction 1940ï¿½09J (available in any Rural Development Office).
I11(b) T3National flood insurance.G1T1 The National Flood Insurance Act of 1968, as amended by the Flood Disaster Protection Act of 1973; the National Flood Insurance Reform Act of 1994; and 7 CFR part 1806, subpart B, or successor regulation.
I11(c) T3Clean Air Act and Water Pollution Control Act Requirements.G1T1 For any contract, all applicable standards, orders or requirements issued under section 306 of the Clean Air Act; section 508 of the Clean Water Act; Executive Order 11738; and EPA regulations at part 32, of title 40.
ï¿½411ï¿½I11(d) T3Historic preservation requirements.G1T1 The provisions of 7 CFR part 1901, subpart F or successor regulation.




I11(e) T3Lead-based paint requirements.G1T1 The provisions of 7 CFR part 1924, subpart A, or successor regulation.

Q04I20[63 FR 39458, July 22, 1998, as amended at 64 FR 32372, June 16, 1999]



I80ï¿½1A3565.10
I89Conflict of interest.
I11(a) T3Objective.G1T1 It is the objective within the Rural Development mission area to maintain the highest standards of honesty, integrity, and impartiality by employees.
I11(b) T3Rural Development requirement.G1T1 To reduce the potential for employee conflict of interest, all Rural Development activities will be conducted in accordance with 7 CFR part 1900, subpart D, or successor regulation by Rural Development employees who:
I11(1) Are not themselves a beneficiary;
I11(2) Are not family members or known relatives of any beneficiary; and
I11(3) Do not have any business or personal relationship with any beneficiary or any employee of a beneficiary.
I11(c) T3Rural Development employee responsibility.G1T1 Rural Development employees must disclose any known relationship or association with a lender or borrower or their agents, regardless of whether the relationship or association is known to others. Rural Development employees or members of their families may not purchase a Real Estate Owned property, security property from a borrower, or security property at a foreclosure sale.
I11(d) T3Loan closing agent responsibility.G1T1 Loan closing agents (or members of their families) who have been involved with a particular property are precluded from purchasing such properties.
I11(e) T3Lender and borrower responsibility.G1T1 Lenders, borrowers, and their agents must identify any known relationship or association with a Rural Development employee.


I80ï¿½1A3565.11ï¿½093565.12
I89[Reserved]



I80ï¿½1A3565.13
I89Exception authority.

I11An Agency official may request and the Administrator or designee may make an exception to any requirement or provision, or address any omission of this part, if the Administrator determines that application of the requirement or provision, or failure to take action, would adversely affect the government's interest or the program objectives, and provided that such an exception is not inconsistent with any applicable law or statutory requirement.

Q04I20[64 FR 32372, June 16, 1999]




I80ï¿½1A3565.14
I89Review and appeals.
I11Whenever RHS makes a decision that is adverse to a lender or a borrower, RHS will provide written notice of such adverse decision and of the right to a USDA National Appeals Division hearing in accordance with 7 CFR part 11 or successor regulations. The lender or borrower may request an informal review with the decision maker and the use of available alternative dispute resolution or mediation programs as a means of resolution of the adverse decision. Any adverse decision, whether appealable or non-appealable may also be reviewed by the next level RHS supervisor. Adverse decisions affecting project tenants or applicants for tenancy will be handled in accordance with 7 CFR part 1944, subpart L or successor regulations.


I80ï¿½1A3565.15
I89Oversight and monitoring.
I11The lender, borrower, and all parties involved in any manner with any guarantee under this program must cooperate fully with all oversight and monitoring efforts of the Agency, Office of Inspector General, the U.S. General Accounting Office, and the U.S. Department of Justice or their representatives including making available any records concerning this transaction. This includes the annual eligibility audit and any other oversight or monitoring activities. If the Agency implements a requirement for an electronic transfer of information, the lender and borrower must cooperate fully.


I80ï¿½1A3565.16
I89[Reserved]


I80ï¿½1A3565.17
I89Demonstration programs.
I11To test ways to expand the availability or enhance the effectiveness of the guarantee program, or for similar purposes, the Agency may, from time ï¿½412ï¿½to time, propose demonstration programs that use loan guarantees or interest credit. Toward this end, the Agency may enter into special partnerships with lenders, financial intermediaries, or others to carry out one or more elements of a demonstration program. Demonstration programs will be publicized by notices in the T4Federal RegisterG1T1.


I80ï¿½1A3565.18ï¿½093565.49
I89[Reserved]


I80ï¿½1A3565.50
I89OMB control number.
I11According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575ï¿½090174.

I56Subpart B_Guarantee Requirements


I80ï¿½1A3565.51
I89Eligible loans and advances.
I11Upon approval of an application from an approved lender, the Agency will commit to providing a guarantee for a permanent loan or a combination construction and permanent loan, subject to the availability of funds. The Agency will not guarantee a construction loan that is not a combination construction and permanent loan.


I80ï¿½1A3565.52
I89Extent of the guarantee.

I11A guarantee of a permanent loan will be made once the project has attained a minimum level of acceptable occupancy as determined by the lender with Agency concurrence. The required occupancy level must be reached before the commitment for a loan guarantee, including any extensions, expires. For combination construction and permanent loans, the Agency will guarantee advances during the construction loan period (which can not exceed 24 months). The guarantee of construction loan advances will convert to a permanent loan guarantee once the required level of occupancy has been reached.

I11(a) T3Maximum guarantee amount.G1T1 The maximum guarantee for a permanent loan will be 90 percent of the unpaid principal and interest of the loan. The Agency liability under any guarantee will decrease or increase, in proportion to any increase or decrease in the amount of the unpaid portion of the loan, up to the maximum amount specified in the guarantee document. The Agency will guarantee construction contracts not to exceed 90 percent of the work in place which have credit enhancements to protect the Government's guarantee. Acceptable credit enhancements include:
I11(1) Surety bonding or performance and payment bonding are the preferred credit enhancement;
I11(2) An irrevocable letter of credit acceptable to the Agency; and
I11(3) A pledge by the lender of acceptable collateral.
I11(b) T3Lesser guarantee amount.G1T1 The Agency may provide a lesser guarantee based upon its evaluation of the credit quality of the loan.
I11(c) T3Cancellation or reduction to the guarantee amount.G1T1 In cases of fraud, misrepresentation, abuse, negligence, or failure to follow the terms of the guarantee or the note, the Agency may cancel the guarantee.

Q04I20[63 FR 39458, July 22, 1998, as amended at 64 FR 32372, June 16, 1999]



I80ï¿½1A3565.53
I89Guarantee fees.

I11As a condition of receiving a loan guarantee, the Agency will charge the following guarantee fees to the lender.

I11(a) T3Initial guarantee fee.G1T1 The Agency will charge an initial guarantee fee equal to one percent of the guarantee amount. For purposes of calculating this fee, the guarantee amount is the product of the percentage of the guarantee times the initial principal amount of the guaranteed loan.


I11(b) T3Annual guarantee fee.G1T1 An annual guarantee fee of at least 50 basis points (one-half percent) of the outstanding principal amount of the loan will be charged each year or portion of a year that the guarantee is in effect. This fee will be collected on January 1, of each calendar year.

I11(c) T3Surcharge for guarantees on construction advances.G1T1 The Agency may, at its sole discretion, charge an additional fee on the portion of the loan advanced during construction. This fee will be ï¿½413ï¿½charged in advance at the start of construction and will be announced in NOFA before loan approval.

Q04I20[63 FR 39458, July 22, 1998, as amended at 64 FR 32372, June 16, 1999]



I80ï¿½1A3565.54
I89Transferability of the guarantee.
I11A lender must receive the Agency's approval prior to any sale or transfer of the loan guarantee.


I80ï¿½1A3565.55
I89Participation loans.
I11Loans involving multiple lenders are eligible for a guarantee when one of the lenders is an approved lender and agrees to act as the lead lender with responsibility for the loan under the loan guarantee agreement.


I80ï¿½1A3565.56
I89Suspension or termination of loan guarantee agreement.
I11A guarantee agreement will terminate when one of the following actions occurs: (In accordance with subpart H of this part, use restrictions on the property will remain if the following actions take place prior to the term of the loan and RHS determines the restrictions apply.)
I11(a) T3Voluntary termination.G1T1 A lender and borrower voluntarily request the termination of the loan guarantee.
I11(b) T3Agency withdrawal of guarantee.G1T1 The Agency withdraws the loan guarantee in the event of fraud, misrepresentation, abuse, negligence, or failure to meet the program requirements.
I11(c) T3Mortgage pay-off.G1T1 The loan is paid.
I11(d) T3Settlement of claim.G1T1 Final settlement of the claim.


I80ï¿½1A3565.57
I89Modification, extension, reinstatement of loan guarantee.
I11To protect its interest or further the objectives of the program, the Agency may, at its sole discretion, modify, extend, or reinstate a loan guarantee. In making this decision the Agency will consider potential losses under the program, impact on the tenants and the public reaction that may be received regarding the action. Further, the Agency may authorize a guarantee on a new loan that is originated as a part of a workout agreement.


I80ï¿½1A3565.58ï¿½093565.99
I89[Reserved]


I80ï¿½1A3565.100
I89OMB control number.
I11According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575ï¿½090174.
I56Subpart C_Lender Requirements


I80ï¿½1A3565.101
I89Responsibility of lenders.
I11A participating lender must originate and service a guaranteed loan in accordance with the regulation and program requirements throughout the life of a loan or guarantee, whichever is less. When it is in the best interests of the Agency, the Agency may permit the transfer of servicing from the originating lender to a servicer.


I80ï¿½1A3565.102
I89Lender eligibility.
I11An eligible lender must be a licensed business entity or HFA in good standing in the state or states where it conducts business; be approved by the Agency; and meet at least one of the criteria contained below. Lenders who are not eligible may participate in the program if they maintain a correspondent relationship with a lender who is eligible. An eligible lender must:
I11(a) Meet the qualifications of, and be approved by, the Secretary of HUD to make multifamily housing loans that are to be insured under the National Housing Act;
I11(b) Meet the qualifications and be approved by Fannie Mae or Freddie Mac to make multifamily housing loans that are to be sold to such corporations;
I11(c) Be a state or local HFA, or a member of the Federal Home Loan Bank system, with a demonstrated ability to underwrite, originate, process, close, service, manage, and dispose of multifamily housing loans in a prudent manner;

I11(d) Be a lender who meets the requirements for Agency approval contained in this subpart and has a demonstrated ability to underwrite, originate, process, close, service, manage, ï¿½414ï¿½and dispose of multifamily housing loans in a prudent manner; or
I11(e) Be a lender who meets the following requirements in addition to the other requirements of this subpart and of subpart I of this part:
I11(1) Have qualified staff to perform multifamily housing servicing and asset management;
I11(2) Have facilities and systems that support servicing and asset management functions; and
I11(3) Have documented procedures for carrying out servicing and asset management responsibilities.


I80ï¿½1A3565.103
I89Approval requirements.

I11The Agency will establish and maintain a ``list of approved lenders''. To be an approved lender, eligible lenders must meet the following requirements and maintain them on a continuing basis at a level consistent with the nature and size of their portfolio of guaranteed loans.
I11(a) T3Commitment.G1T1 A lender must have a commitment for a guaranteed loan or an agreement to purchase a guaranteed loan.
I11(b) T3Audited statement.G1T1 A lender must provide the Agency with an annual audited financial statement conducted in accordance with generally accepted government auditing standards.
I11(c) T3Previous participation.G1T1 A lender may not be delinquent on a federal debt or have an outstanding finding of deficiency in a federal housing program.

I11(d) T3Ongoing requirements.G1T1 A lender must meet the following requirements at initial application and on a continuing basis thereafter:
I11(1) Overall financial strength, including capital, liquidity, and loan loss reserves, to have an acceptable level of financial soundness as determined by a lender rating service (such as Sheshunoff, Inc.); or to be an approved Fannie Mae, Freddie Mac or HUD Federal Housing Administration multifamily lender; or, if a state housing finance agency, to have a top tier rating by a rating agency (such as Standard and Poor's Corporation);
I11(2) Bonding and insurance to cover business related losses, including directors and officers insurance, business income loss insurance, and bonding to secure cash management operations;
I11(3) A minimum of two years experience in originating and servicing multifamily loans;
I11(4) A positive record of past performance when participating in RHS or other federal loan programs;
I11(5) Adequate staffing and training to perform the program obligations; the head underwriter must have 3 years of experience and all staff must receive annual multifamily training;
I11(6) Demonstrated overall financial stability of the business over the past five years;
I11(7) Evidence of reasonable and prudent business practices for management of the program; and
I11(8) No negative information on Dunn & Bradstreet or similar type report.

I11(9) The lender must certify that they have computer systems that comply with year 2000 technology.


Q04I20[63 FR 39458, July 22, 1998, as amended at 64 FR 32372, June 16, 1999]




I80ï¿½1A3565.104
I89Application requirements.
I11Eligible lenders must submit a lender approval application, in a format prescribed by the Agency. The lender approval application submission must occur at the time the lender submits its first application for a loan guarantee, or its first application to purchase a guaranteed loan. The application must include documentation of lender compliance with ï¿½1A3565.103. A non-refundable application fee will be charged for each review of a lender's application. The amount of the fee will be announced in NOFA.


I80ï¿½1A3565.105
I89Lender compliance.
I11A lender will remain an approved lender unless terminated by the Agency. To maintain approval, the lender must comply with the following requirements.
I11(a) Maintain eligibility in accordance with ï¿½1Aï¿½1A3565.102 and 3565.103;
I11(b) Comply with all applicable statutes, regulations, and procedures;
I11(c) Inform the Agency of any material change in the lender's staffing, policies and procedures, or corporate structure;
I11(d) Cooperate fully with all program or Agency monitoring and auditing ï¿½415ï¿½policies and procedures, including the Agency's annual audit of approved lenders; and
I11(e) Maintain active participation in the multifamily guaranteed loan program by initiating a new loan guarantee or holding a loan guaranteed under this program.


I80ï¿½1A3565.106
I89Construction lender requirements.
I11A lender making a construction loan, as part of a combination construction and permanent loan, must demonstrate an ability to originate and service construction loans, in addition to meeting the other requirements of this subpart.


I80ï¿½1A3565.107
I89[Reserved].


I80ï¿½1A3565.108
I89Responsibility for actions of agents and mortgage brokers.
I11An approved lender is responsible for the actions of its agents and mortgage brokers.


I80ï¿½1A3565.109
I89Minimum loan prohibition.
I11A lender must not establish a minimum loan amount for loans under this program.


I80ï¿½1A3565.110
I89Insolvency of lender.
I11The Agency may require a lender to transfer a guaranteed loan or loans to another approved lender prior to a determination of insolvency by the lender. If the lender fails to transfer a loan when required, the guarantee will be considered null and void.


I80ï¿½1A3565.111
I89Lobbying activities.
I11An approved lender must comply with RD Instruction 1940-Q (available in any Rural Development Office) regarding lobbying activities.



I80ï¿½1A3565.112ï¿½093565.149
I89[Reserved]


I80ï¿½1A3565.150
I89OMB control number.
I11According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575ï¿½090174.
I56Subpart D_Borrower Eligibility Requirements


I80ï¿½1A3565.151
I89Eligible borrowers.
I11Guaranteed loans must be made to an eligible borrower whose intention is to provide and maintain rural rental housing. The ownership entity must be a valid entity in good standing under the laws of the jurisdiction in which it is organized. Eligible borrowers shall include individuals, corporations, state or local public agencies or an instrumentality thereof, partnerships, limited liability companies, trusts, Indian tribes, or any organization deemed eligible by the Agency. Eligible borrowers must be U.S. citizens or permanent legal residents; a U.S. owned corporation, or a limited liability company, or partnership in which the principals are U.S. citizens or permanent legal residents.


I80ï¿½1A3565.152
I89Control of land.
I11At time of application, the lender must have evidence of site control by the borrower (option to purchase, lease, deed or other evidence acceptable to the Agency). At the time of loan closing, the lender's closing docket must provide documentary evidence that the borrower owns or has a long-term lease on the land on which the housing is or will be located. The form of ownership or the leasehold agreement must meet Agency requirements. Notwithstanding any investment in the site, the site may not be accepted based on the Agency's environmental assessment.


I80ï¿½1A3565.153
I89Experience and capacity of borrower.
I11At the time of application, the lender must certify that the borrower:
I11(a) Has the ability and experience to construct or rehabilitate multifamily housing that meets the requirements established by the Agency, the lender and the loan agreement;
I11(b) Has the legal and financial capacity to meet all of the obligations of the loan; and
I11(c) Has the ability and experience to meet the property management requirements established by the Agency, the lender, and the loan agreement.


ï¿½416ï¿½I80ï¿½1A3565.154
I89Previous participation in state and federal programs.
I11Loans to borrowers who are delinquent on a federal debt may not be guaranteed. Furthermore, borrowers or principals thereof who have defaulted on state or local government loans will not be eligible for a guarantee unless the Agency determines that the default was beyond the borrower's control, and that the identifiable reasons for the default no longer exist. At the time of application, the lender must obtain from the borrower a certification that the borrower is not under any state or federal order suspending or debarring participation in state or federal loan programs and that the borrower is not delinquent on any non-tax obligation to the United States.


I80ï¿½1A3565.155
I89Identity of interest.
I11At the time of application, the lender must certify that it has disclosed any and all identity of interest relationships and preexisting conditions with respect to its relationships and that of the borrower, or that no identity of interest relationships exists. Identity of interest relationships include any financial or other relationship that exists or will exist between a lender, borrower, management agent, supplier, or any agent of any of these entities, that could influence, give the appearance of influencing or have the potential to influence the actions of the parties in carrying out their responsibilities under the program. Disclosure will be in a form and manner established by the Agency.


I80ï¿½1A3565.156
I89Certification of compliance with federal, state, and local laws and with Agency requirements.
I11At the time of application, the lender must obtain from the borrower a certification of compliance with all applicable federal, state, and local laws, and with Agency requirements regarding discrimination and equal opportunity in housing, including title VIII of the Civil Rights Act of 1968, and the Fair Housing Amendments Act of 1988. The borrower must also certify that it is not the subject of any federal, state, or local sanction or punitive action.


I80ï¿½1A3565.157ï¿½093565.199
I89[Reserved]


I80ï¿½1A3565.200
I89OMB control number.
I11According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575ï¿½090174.
I56Subpart E_Loan Requirements


I80ï¿½1A3565.201
I89General.
I11To be eligible for a guarantee, a loan must comply with the provisions of this subpart and be originated by an approved lender.


I80ï¿½1A3565.202
I89Tenant eligibility.
I11(a) T3Limits on income of tenants.G1T1 The housing units subject to a guaranteed loan must be available for occupancy only by low or moderate-income families or individuals whose incomes at the time of initial occupancy do not exceed 115 percent of the area median income. After initial occupancy, a tenant's income may exceed these limits.
I11(b) T3Citizenship status.G1T1 A tenant must be a United States citizen or a noncitizen who is a qualified alien as defined in ï¿½1A3565.3.


I80ï¿½1A3565.203
I89Restrictions on rents.
I11The rent for any individual housing unit, including any tenant-paid utilities, must not exceed an amount equal to 30 percent of 115 percent of area median income, adjusted for family size. In addition, on an annual basis, the average rent for a project, taking into account all individual unit rents, must not exceed 30 percent of 100 percent of area median income, adjusted for family size.



I80ï¿½1A3565.204
I89Maximum loan amount.
I11(a) T3Section 207(c) limits and exceptions.G1T1 For that part of the property that is attributable to dwelling use, the principal obligation of each guaranteed loan must not exceed the applicable maximum per-unit limitations under section 207(c) of the National Housing Act.
ï¿½417ï¿½I11(b) T3Loan-to-value limits.G1T1 (1) In the case of a borrower that is a nonprofit organization or an agency or body of any State, local or tribal government, each guaranteed loan must involve a principal obligation that does not exceed the lesser of 97 percent of:
I11(i) The development costs of the housing and related facilities, or
I11(ii) The lender's determination of value not to exceed the appraised value of the housing and facilities.
I11(2) In the case of a borrower that is a for-profit entity or other entity not referred to in paragraph (b)(1) of this section, each guaranteed loan must involve a principal obligation that does not exceed the lesser of 90 percent of:
I11(i) The development costs of the housing and related facilities, or
I11(ii) The lender's determination of value not to exceed the appraised value of the housing and facilities.
I11(3) To protect the interest of the Agency or to further the objectives of the program, the Agency may establish lower loan-to-value limits or further restrict the statutory maximum limits based upon its evaluation of the credit quality of the loan.
I11(c) T3Necessary assistance review.G1T1 (1) A lender requesting a loan guarantee must review all loans to determine the appropriate amount of assistance necessary to complete and maintain the project. The lender shall recommend to the Agency an adjustment in the loan amount if appropriate as a result of this review.
I11(2) Where the project financing combines a guaranteed loan with Low-Income Housing Tax Credits or other Federal assistance, the project must conform to the policies regarding necessary assistance in 7 CFR part 1944, subpart E or successor provision.


I80ï¿½1A3565.205
I89Eligible uses of loan proceeds.
I11Eligible uses of loan proceeds must conform with standards and conditions for housing and facilities contained in 7 CFR part 1924, subpart A or successor provision, except that the Agency, at its sole discretion, may approve, in advance, a higher level of amenities, construction, and fees for projects proposed for a guaranteed loan provided the costs and features are reasonable and customary for similar housing in the market area.
I11(a) T3Use of loan proceeds.G1T1 The proceeds of a guaranteed loan may be used for the following purposes relating to the project.
I11(1) New construction costs of the project;
I11(2) Moderate or substantial rehabilitation of buildings and acquisition costs when related to the rehabilitation of a building as described in paragraph (b) of this section;
I11(3) Acquisition of existing buildings, when approved by the Agency, for projects that serve a special housing need;
I11(4) Acquisition and improvement of land on which housing will be located;
I11(5) Development of on-site and off-site improvements essential to the use of the property;
I11(6) Development of related facilities such as community space, recreation, storage or maintenance structures, except that any high cost recreational facility, such as swimming pools and exercise clubs or similar facilities, must be specifically approved in advance by the Agency;
I11(7) Construction of on-site management or maintenance offices and living quarters for operating personnel for the property being financed;
I11(8) Purchase and installation of appliances and certain approved decorating items, such as window blinds, shades, or wallpaper;
I11(9) Development of the surrounding grounds, including parking, signs, landscaping and fencing;
I11(10) Costs associated with commercial space provided that:
I11(i) The project is designed primarily for residential use;
I11(ii) The commercial use consists of essential tenant service type facilities, such as laundry rooms, that are not otherwise conveniently available;
I11(iii) The commercial space does not exceed 10 percent of the gross floor area of the residential units and common areas, unless a higher level is specifically approved in writing by the Agency; and
I11(iv) The commercial activity is compatible with the use of the project and that the income is not more than 10 ï¿½418ï¿½percent of the total annual operating income of the project.
I11(11) Costs for feasibility determination, loan application fees, appraisals, environmental documentation, professional fees or other fees determined by the Agency to be necessary to the development of the project;
I11(12) Technical assistance to and by non-profit entities to assist in the formation, development, and packaging of a project, or formation or incorporation of a borrower entity;
I11(13) Education programs for a board of directors, both before and after incorporation of a cooperative that will serve as the borrower;
I11(14) Construction interest accrued on the construction loan;
I11(15) Relocation assistance in the case of rehabilitation projects;
I11(16) Developers' fees; and
I11(17) Repaying applicant debts in the following cases:
I11(i) When the Agency authorizes in writing in advance the use of loan funds to pay debts for work, materials, land purchase, or other fees and charges before the loan is closed; or
I11(ii) When the Agency concurs in writing with a determination by the lender that costs for work, fees and charges incurred prior to loan application are integral to development of the guarantee application and project.
I11(b) T3Rehabilitation requirements.G1T1 Rehabilitation work must be classified as either moderate or substantial as defined in exhibit K of 7 CFR part 1924, subpart A or a successor document. In all cases, the building or project must be structurally sound, and improvements must be necessary to meet the requirements of decent, safe, and sanitary living units. Applications must include a structural analysis, along with plans and specifications describing the type and amount of planned rehabilitation. The project as rehabilitated must meet the applicable development standards contained in 7 CFR part 1924, subpart A or a successor regulation, as well as any applicable historic preservation requirements. All proposed rehabilitation projects are subject to an environmental review completed in accordance with 7 CFR part 1940, subpart G or a successor regulation.


I80ï¿½1A3565.206
I89Ineligible uses of loan proceeds.
I11Loan proceeds must not be used for the following:
I11(a) Specialized equipment for training and therapy;
I11(b) Housing in military impact areas;

I11(c) Housing that serves primarily temporary and transient residents;
I11(d) Nursing homes, special care facilities and institutional type homes that require licensing as a medical care facility;
I11(e) Operating capital for central dining facilities or for any items not affixed to the real estate, such as special portable equipment, furnishings, kitchen ware, dining ware, eating utensils, movable tables and chairs, etc.;
I11(f) Payment of fees, salaries and commissions or compensation to borrowers (except developers' fees); or
I11(g) Refinancing of an outstanding debt, except in the case of an existing guaranteed loan where the Agency determines that the refinancing is in the government's interest or furthers the objectives of the program. The term and amount of any loan for refinancing must not exceed the maximum loan amount or term limits.


I80ï¿½1A3565.207
I89Form of lien.
I11The loan originated by the lender for a guarantee must be secured by a first lien against the property.


I80ï¿½1A3565.208
I89Maximum loan term.
I11(a) T3Statutory term limit.G1T1 The lender may set the term of the loan, but in no instance may the term of a guaranteed loan exceed the lesser of 40 years or the remaining economic life of the project.
I11(b) T3Prepayment of loans.G1T1 A guaranteed loan may be prepaid in whole or in part at the determination of the lender, and upon the lender's written notice to the Agency at least 30 days prior to the expected date of prepayment. The Agency will not pay any lockout or prepayment penalty assessed by the lender. The lender must certify the following in the notice of prepayment:
I11(1) The lease documents used by the borrower or its agent prohibit the abrogation of tenant leases in the event of prepayment; and
ï¿½419ï¿½I11(2) The borrower has notified tenants of the request to prepay the loan, including notice of the prohibition against abrogation of the lease and the policy and procedure for handling complaints regarding compliance with the long-term use restriction as contained in subpart H of this part.


I80ï¿½1A3565.209
I89Loan amortization.
I11Each guaranteed loan must contain provisions for the complete amortization of the loan by periodic payments. The Agency will not guarantee a loan that comes due before expiration of its full amortization period, such as a balloon loan.


I80ï¿½1A3565.210
I89Maximum interest rate.
I11The interest rate for a guaranteed loan must not exceed the maximum allowable rate specified by the Agency in NOFA. Such rate must be fixed over the term of the loan.


I80ï¿½1A3565.211
I89Interest credit.
I11(a) T3Limitation.G1T1 For at least 20 percent of the loans made during each fiscal year, the Agency will provide assistance in the form of interest credit, to the extent necessary to reduce the agreed-upon rate of interest to the AFR as such term is used in section 42(I)(2)(D) of the Internal Revenue Code of 1986, 26 U.S.C. 7805, ï¿½1A1.42ï¿½091T.
I11(b) T3Selection criteria.G1T1 The Agency will select projects to receive interest credits using any of such criteria as the Agency may establish for priority projects as contained in subpart A of this part.


I80ï¿½1A3565.212
I89Multiple guaranteed loans.
I11The Agency may guarantee more than one loan on any project if all guaranteed loans, in the aggregate, comply with these regulations, including without limitation:
I11(a) In the aggregate, loans do not exceed the maximum guaranteed loan amount and loan-to-value limits, as contained in ï¿½1A3565.204;
I11(b) In the aggregate, loans are all to be secured equally by a first lien as the Agency may, at its sole discretion, determine necessary to ensure repayment of the loans; and
I11(c) If different lenders originate the loans, each lender has executed an intercreditor agreement in form and substance acceptable to the Agency; and
I11(d) The loans do no contain tax exempt financing.


I80ï¿½1A3565.213
I89Geographic distribution.
I11The Agency may refuse to guarantee a loan in an area where there is undue risk due to a concentration in the market of properties subject to a Agency guaranteed loan. The Agency will consider the credit quality of the loan and overall market conditions in making a determination of undue risk. If any of the Agency guaranteed loans in the market are experiencing vacancy rates in excess of 15% and the vacancy is due to market conditions, the Agency will invoke this provision and not guarantee the loan.


I80ï¿½1A3565.214
I89Release of liability.
I11Notwithstanding the transfer of the property for which the loan was made, borrowers may not be relieved of liability for a guaranteed loan if any portion of the principal or interest or any protective advance made on behalf of the borrower is outstanding.


I80ï¿½1A3565.215
I89Special conditions.
I11(a) T3Use of third party funds.G1T1 As a condition of receiving a guaranteed loan, the Agency, or the lender if designated by the Agency, must review the terms and conditions of any secondary financing or funding of projects, including loans, capital grants or rental assistance.
I11(b) T3Recourse.G1T1 If required by the lender, loans guaranteed under this program may be made on a recourse or nonrecourse basis, or with any personal or special borrower guarantees on collateralization.


I80ï¿½1A3565.216ï¿½093565.249
I89[Reserved]


I80ï¿½1A3565.250
I89OMB control number.
I11According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575ï¿½090174.

ï¿½420ï¿½I56Subpart F_Property Requirements


I80ï¿½1A3565.251
I89Eligible property.
I11To be eligible for a guaranteed loan, a property must be used primarily for residential dwelling purposes and must meet the following requirements or the requirements of this subpart:
I11(a) T3Property location.G1T1 All the property must be located in a rural area.
I11(b) T3Minimum size of development.G1T1 The property must consist of at least five rental dwelling units.
I11(c) T3Non-contiguous sites.G1T1 For a loan secured by two or more non-contiguous parcels of land, all sites must meet each of the following requirements:
I11(1) Located in one market area;
I11(2) Managed under one management plan with one loan agreement or resolution for all of the sites; and
I11(3) Consist of single asset ownership.

I11(d) T3Compliance with statutes.G1T1 All properties must comply with the applicable requirements in section 504 of the Rehabilitation Act of 1973, the Fair Housing Act, the Americans with Disabilities Act, and other applicable statutes.


I80ï¿½1A3565.252
I89Housing types.
I11The property may include new construction or substantially rehabilitated existing structures. The units may be attached, detached, semi-detached, row houses, modular or manufactured houses, or multifamily structures. Manufactured housing must meet Agency requirements contained in 7 CFR part 1924, subpart A or a successor regulation. The Agency proposes to guarantee proposals for new construction or acquisition with rehabilitation of at least $15,000 per unit. The portion of the guaranteed funds for acquisition with rehabilitation is limited to 25 percent of the program authority.


I80ï¿½1A3565.253
I89Form of ownership.
I11The property must be owned in fee simple or be subject to a ground lease or other legal right in land acceptable to the Agency.


I80ï¿½1A3565.254
I89Property standards.
I11(a)T3 Housing quality and site and neighborhood standards.G1T1 The property must meet the site and neighborhood requirements established by the state or locality, and those standards contained under 7 CFR part 1924, subparts A and C or any successor regulations.
I11(b) T3Third party assessments.G1T1 As part of the application for a guaranteed loan, the lender must provide documentation of qualified third parties' assessments of the property's physical condition and any environmental conditions or hazards which may have a bearing on the market value of the property. These assessments must include:
I11(1) An acceptable property appraisal.
I11(2) A Phase I Environmental Site Assessment (American Society of Testing and Materials).
I11(3) A Standard Flood Hazard Determination.
I11(4) In the case of the purchase of an existing structure, rehabilitation or refinancing, a physical needs assessment.


I80ï¿½1A3565.255
I89Environmental requirements.
I11Under the National Environmental Policy Act, the Agency is required to assess the potential impact of the proposed actions on protected environmental resources. Measures to avoid or at least mitigate adverse impacts to protected resources may require a change in site or project design. A site will not be approved until the Agency has completed the environmental review in accordance with 7 CFR part 1940, subpart G or successor regulation.


I80ï¿½1A3565.256
I89Architectural services.
I11Architectural services must be provided for the project in accordance with 7 CFR part 1924, subpart A or successor regulation, including plan certifications.


I80ï¿½1A3565.257
I89Procurement actions.
I11All construction procurement actions, whether by sealed bid or by negotiation, must be conducted in a manner that provides maximum open and free competition.


I80ï¿½1A3565.258ï¿½093565.299
I89[Reserved]


I80ï¿½1A3565.300
I89OMB control number.
I11According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control ï¿½421ï¿½number. The valid OMB control number for this information collection is 0575ï¿½090174.
I56Subpart G_Processing Requirements


I80ï¿½1A3565.301
I89Loan standards.
I11An approved lender must originate and underwrite the loan and appraise the subject property in accordance with prudent lending practices and Agency criteria addressing the following factors:
I11(a) Borrower qualifications and creditworthiness;
I11(b) Property, vacancy, market vacancy or collection loss;
I11(c) Rental concessions and rent levels;
I11(d) Tenant demand and housing supply;
I11(e) Property operating and maintenance expense;
I11(f) Property requirements as contained in subpart F of this part;
I11(g) Debt coverage ratio;
I11(h) Operating and long-term capital requirements;
I11(i) Loan-to-value ratio;
I11(j) Return on borrower equity; and
I11(k) Estimated long-term marketability of the project.


I80ï¿½1A3565.302
I89Allowable fees.
I11(a) T3Lender fees.G1T1 The lender is authorized to charge reasonable and necessary fees in connection with a borrower's application for a guaranteed loan.
I11(b) T3Agency fees.G1T1 The Agency will charge one or more types of fees deemed appropriate as reimbursement for reasonable and necessary costs incurred in connection with applications received from lenders for monitoring or annual renewal fees. These fees will be published in NOFA. Agency fees may include, but are not limited to the following:
I11(1) T3Site assessment and market analysis or preliminary feasibility fee.G1T1 A fee for review of an application for a determination of preliminary feasibility.
I11(2) T3Application fee.G1T1 A fee submitted in conjunction with the application for a loan guarantee.
I11(3) T3Inspection fee.G1T1 A fee for inspection of the property in conjunction with a loan guarantee.
I11(4) T3Transfer fee.G1T1 A fee in connection with a request for approval of a transfer of physical assets or a change in the composition of the ownership entity.
I11(5) T3Extension or reopening fees.G1T1 A fee to extend the guarantee commitment or to reopen an application when a commitment has expired.


I80ï¿½1A3565.303
I89Issuance of loan guarantee.

I11(a) T3Preliminary feasibility review.G1T1 During the initial processing of a loan, the lender may request a preliminary feasibility review by the Agency when required loan documentation is submitted.
I11(b) T3Conditional commitment to guarantee a loan.G1T1 The Agency will issue a conditional commitment to guarantee a loan. This commitment will be good for such time frame as the Agency deems appropriate based on project requirements. The commitment to guarantee a loan, will specify any conditions necessary to obtain a determination by the Agency that all program requirements have been met. A conditional commitment can be issued, subject to the availability of funds, T3afterG1T1:
I11(1) Completion by the Agency of an environmental review in accordance with 7 CFR part 1940, subpart G or successor regulation, and the National Environmental Policy Act; and
I11(2) Selection of the proposed project for funding by the Agency in accordance with ranking and selection criteria.

I11(c) T3Guarantee during construction.G1T1 For combination construction and permanent loans, the Agency will issue an initial guarantee to an approved construction lender.
I11(1) This guarantee will be subject to the limits contained in subpart B of this part and in the loan closing documentation.
I11(2) In all cases, the lender must obtain a payment and performance bond covering contract work or acceptable credit enhancement as discussed in ï¿½1A3565.52(a).
I11(3) The lender must verify amounts expended prior to each payment for completed work and certify that an independent inspector has inspected ï¿½422ï¿½the property and found it to be in conformance with Agency standards. The lender must provide verification that all subcontractors have been paid and no liens have been filed against the property.

I11(d) T3Permanent loan guarantee.G1T1 The guarantee on the permanent loan will be issued once the following items have been submitted to and approved by the Agency.

I11(1) An updated appraisal of the project as built;
I11(2) A certificate of substantial completion;
I11(3) A certificate of occupancy or similar evidence of local approval ;
I11(4) A final inspection conducted by a qualified Agency representative;
I11(5) A final cost certification in a form acceptable to the Agency;
I11(6) A submission to the Agency of the complete closing docket;
I11(7) A certification by the lender that the project has reached an acceptable minimum level occupancy;

I11(8) An executed regulatory agreement.


I11(9) The Lender certifies that it has approved the borrower's management plan and assures that the borrower is in compliance with Agency standards regarding property management, contained in subparts E and F of this part;
I11(10) Necessary information to complete an updated necessary assistance review by the Agency; and
I11(11) Compliance with all conditions contained in the conditional commitment for guarantee.
I11(e) T3Modification of guarantee amount after commitment.G1T1 The Agency may modify the guarantee amount or decline to issue a loan guarantee when a lender fails to honor obligations or to fulfill representations made under the guarantee commitment.

Q04I20[63 FR 39458, July 22, 1998, as amended at 64 FR 32372, June 16, 1999]



I80ï¿½1A3565.304
I89Lender loan processing responsibilities.
I11(a) T3Application.G1T1 The lender will be responsible for submitting an application for a loan guarantee in a format prescribed by the Agency. Lenders may submit an application at the feasibility stage or when they request a conditional commitment.
I11(b) T3Project servicing, management and disposition.G1T1 Unless otherwise permitted by the Agency, the originating lender must perform all loan functions during the period of the guarantee. These functions include servicing, asset management, and, if necessary, property disposition. The lender must maintain and service the loan in accordance with the provisions of subpart I of this part and Agency servicing procedures.


I80ï¿½1A3565.305
I89Mortgage and closing requirements.
I11It is the lender's responsibility to ensure that the loan closing statement and required loan documents are in a form acceptable to the Agency and included in the closing docket. The lender is responsible for resolving any underwriting and loan closing deficiencies that are found. The Agency's review of the lender's loan closing documentation does not constitute a waiver of fraud, misrepresentation, or failure of judgment by the lender.


I80ï¿½1A3565.306ï¿½093565.349
I89[Reserved]


I80ï¿½1A3565.350
I89OMB control number.
I11According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575ï¿½090174.
I56Subpart H_Project Management


I80ï¿½1A3565.351
I89Project management.


I11As a condition of the guarantee, the lender is to obtain borrower certification that the project is in compliance with local, state, federal laws and program requirements.


I11(a) T3Regulatory agreement.G1T1 A regulatory agreement between the borrower and lender must be executed at the time of loan closing and contain the following covenants:


I11(1) That it is binding upon the borrower and any of its successors and assigns, as well as upon the lender and any of its successors and assigns, for the duration of the guaranteed loan;
I11(2) That the borrower makes all payments due under the note and to the required escrow and reserve accounts;
ï¿½423ï¿½I11(3) That the borrower maintains the project as affordable housing in accordance with the purposes and for the duration defined in the statute;
I11(4) That the borrower maintains the project in good physical and financial condition at all times;
I11(5) That the borrower obtains and maintains property insurance and any other insurance coverage required to protect the security;
I11(6) That the borrower maintains complete project books and financial records, and provides the Agency and the lender with an annual audited financial statement after the end of each fiscal year;
I11(7) That the borrower makes project books and records available for review by the Office of Inspector General, Rural Development staff, General Accounting Office, and the Department of Justice, or their representatives or successors upon appropriate notification;
I11(8) That the borrower prepares and complies with the Affirmative Fair Housing Marketing Plan and all other Fair Housing requirements;
I11(9) That the borrower operates as a single asset ownership entity, unless otherwise approved by the Agency;
I11(10) That the borrower complies with applicable federal, state and local laws; and
I11(11) That the borrower provides management satisfactory to the lender and to the Agency and complies with an approved management plan for the project.
I11(b)T3 Management plan.G1T1 The lender must approve the borrower's management plan and assure that the borrower is in compliance with Agency standards regarding property management, including the requirements contained in subparts E and F of this part.
I11(c) T3Tenant protection and grievance procedures.G1T1 Tenants in properties subject to a guaranteed loan are entitled to the grievance and appeal rights contained in 7 CFR part 1944, subpart L or successor regulation. The borrower must inform tenants in writing of these rights.
I11(d) T3Financial management_G1T1(1) T3Borrower reporting requirements.G1T1 At a minimum, the lender must obtain, on an annual basis, an audited annual financial statement conducted in accordance with generally accepted government auditing standards.

I11(2) T3Lender reporting requirements.G1T1 The lender must review the financial reports to assure that the property is in sound fiscal condition and the borrower is in compliance with financial requirements. The lender must report findings to the Agency as follows:
I11(i) T3Annual reports.G1T1 The lender must submit to the Agency a copy of the annual financial audit of the project and must report on the nature and status of any findings. To the extent that outstanding findings or issues remain, the lender must submit to the Agency a copy of a plan of action for any unresolved findings.
I11(ii) T3Monthly reports.G1T1 The lender must submit monthly reports to the Agency on all loans that are either in default, delinquent, or not in compliance with program requirements. This report must provide information on the financial condition of each loan, the physical condition of the property, the amount of delinquency, any other non-compliance with program requirements and the proposed actions and timetable to resolve the delinquency, default or non-compliance.
I11(3) T3Reserve releases.G1T1 The lender is responsible for approving or disapproving all borrower requests for release of funds from the reserve and escrow accounts. Security deposit accounts will not be considered a reserve or escrow account.
I11(4) T3Insurance requirements.G1T1 At loan closing, the borrower will provide the lender with documentary evidence that Agency insurance requirements have been met. The borrower must maintain insurance in accordance with Agency requirements until the loan is repaid and the lender must be named as the insurance policy's beneficiary. The lender must obtain insurance on the secured property if the borrower is unable or unwilling to do so and charge the cost as an advance.
I11(5) T3Distribution of surplus cash.G1T1 Prior to the distribution of surplus cash to the owner, the lender must certify that the property is in good financial and physical condition and in compliance with the regulatory agreement. Such compliance includes payment of outstanding obligations, debt service, and ï¿½424ï¿½required funding of reserve and escrow accounts.
I11(e) T3Physical maintenance.G1T1 The lender must annually inspect the property to ensure that it is in compliance with state and local codes and program requirements. The lender must certify to the Agency that a property is in such compliance, or report to the Agency on any non-compliance items and proposed actions and timetable for resolution. Failure to provide responsive corrective action can result in reduction or cancellation of the guarantee by the Agency.

Q04I20[63 FR 39458, July 22, 1998, as amended at 64 FR 32372, June 16, 1999]





I80ï¿½1A3565.352
I89Preservation of affordable housing.
I11(a) T3Original purpose.G1T1 During the period of the guarantee, owners are prohibited from using the housing or related facilities for any purpose other than an approved program purpose.
I11(b) T3Use restriction.G1T1 For the original term of the guaranteed loan, the housing must remain available for occupancy by low and moderate income households, in accordance with subpart E of this part. This requirement will be included in a deed restriction or other instrument acceptable to the Agency. The restriction will apply unless the housing is acquired by foreclosure or an instrument in lieu of foreclosure, or the Agency waives the applicability of this requirement after determining that each of the following three circumstances exist.
I11(1) There is no longer a need for low-and moderate-income housing in the market area in which the housing is located;
I11(2) Housing opportunities for low-income households and minorities will not be reduced as a result of the waiver; and
I11(3) Additional federal assistance will not be necessary as a result of the waiver.


I80ï¿½1A3565.353
I89Affirmative fair housing marketing.
I11As a condition of the guarantee, the lender must ensure that the lender and borrower are in compliance with the approved Affirmative Fair Housing Marketing Plan. This plan must be reviewed annually by the lender to ensure that the borrower remains in compliance and to recommend modifications, as necessary.


I80ï¿½1A3565.354
I89Fair housing accommodations.
I11The lender must ensure that the borrower is in compliance with the applicable fair housing laws in the development of the property, the selection of applicants for housing, and ongoing management. See subpart A of this part.


I80ï¿½1A3565.355
I89Changes in ownership.
I11Any change in ownership, in whole or in part, must be approved by the lender and the Agency before such change takes effect.


I80ï¿½1A3565.356ï¿½093565.399
I89[Reserved]


I80ï¿½1A3565.400
I89OMB control number.
I11According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575ï¿½090174.
I56Subpart I_Servicing Requirements


I80ï¿½1A3565.401
I89Servicing objectives.
I11The participating lender is responsible for servicing the guaranteed loan throughout the term of the loan or guarantee, whichever is less. In all cases, the lender remains responsible for liquidation of the property in accordance with the Loan Note Agreement, unless otherwise determined by the Agency. A lender-servicing plan must be designed and implemented to achieve the following objectives.
I11(a) To preserve the value of the loan and the real estate;
I11(b) To avoid a loss to the lender or the Agency and to limit exposure to potential loss;
I11(c) To protect the interests of the tenants; and
I11(d) To further program objectives.


ï¿½425ï¿½I80ï¿½1A3565.402
I89Servicing responsibilities.
I11The lender must service the loan in accordance with this subpart and perform the services contained in this section in a reasonable and prudent manner. The lender is responsible for the actions of its agents and representatives.

I11(a) T3Funds management.G1T1 The lender must have a funds management system to receive and process borrower payments, including the following.
I11(1) All principal and interest (P&I) funds and guarantee fees collected and deposited into the appropriate custodial accounts.
I11(2) Payments to custodial escrow accounts for taxes and insurance premiums, assessments that might impair the security (such as ground rent), and reserve accounts for repair and capital improvement of the property.
I11(b) T3Asset management.G1T1 The lender must ensure that the property securing the guaranteed loan remains in good physical and financial condition, in accordance with project management requirements contained in subpart H of this part.
I11(c) T3Management of delinquencies and defaults.G1T1 Each month the lender must report to the Agency any delinquencies and defaults in accordance with subpart H of this part.


I80ï¿½1A3565.403
I89Special servicing.
I11Special servicing must be initiated when regular servicing actions are insufficient to resolve borrower default or property deficiencies.
I11(a) T3Responsibility of lender.G1T1 It is the lender's responsibility during special servicing to make a special effort to ensure that maintenance of the property meets Agency requirements and the tenants' rights are protected, until such time that the property is liquidated by the lender, the loan is paid in full, or the loan is assigned to the Agency. The lender must update the Agency monthly until the default is cured or a claim is filed. The lender must maintain adequate records of any and all efforts to cure the default or to foreclose.
I11(b) T3Initiating special servicing.G1T1 When special servicing is initiated, the lender must submit for Agency review a special servicing plan that includes proposed actions to cure the deficiencies and a timeframe for completion. The special servicing plan will specify the proposed terms of any workout agreement recommended by the lender. The lender must obtain Agency approval of the terms of any workout agreement with the borrower. The workout agreement may include a loan modification, transfer of physical assets, or partial payment of claim and reamortization of the loan. Failure to comply with terms contained in the executed workout agreement will be considered a default of the guaranteed loan.
I11(1) T3Loan modification.G1T1 The borrower and lender may agree to a loan modification when such action will improve the financial viability of the project and its operations, and when a circumstance exists that is beyond the borrower's control. The Agency must approve in advance any loan modification that extends the life of the loan or requires an increase in the amount of the guarantee. All changes must be within the requirements of section 538 of the Housing Act of 1949.
I11(2) T3Change in ownership and transfer of physical assets.G1T1 A default or delinquency may be resolved by a change of the ownership entity in whole or in part. The Agency must approve all changes in ownership prior to the effective date of the transfer, and may require additional resources from the lender or borrower to resolve project deficiencies. A change in the ownership entity, including a transfer of physical assets, will not relieve the original borrower of liability for the loan, pursuant to the provisions regarding release of liability contained in subpart E of this part.
I11(3) T3Partial payment of claims.G1T1 The lender may request a partial payment of claim as a result of a loss experienced by the lender as a means to work out a troubled loan. The Agency will accept such claim if it determines that it is in the best interest of the government. In applying the partial payment, the lender must assign the obligation covered by the partial payment to the Agency, and, if required by the Agency, reamortize the obligation using the amount of the remaining obligation over an agreed-upon term.
ï¿½426ï¿½I11(c) T3Claims processing.G1T1 In the event of a loss, the lender must submit claims under the guarantee in accordance with subpart J of this part. Prior to submitting a claim, the lender must exhaust all possibilities of collection on the loan.
I11(d) T3Displacement prevention.G1T1 The actions of the lender must not harm the property's tenants through displacement.


I80ï¿½1A3565.404
I89Transfer of mortgage servicing.
I11Transfer of servicing is prohibited unless the Agency determines that circumstances warrant such action, the proposed lender is an eligible lender approved by the Agency, and the transfer of servicing is approved by the Agency in advance.


I80ï¿½1A3565.405ï¿½093565.449
I89[Reserved]


I80ï¿½1A3565.450
I89OMB control number.
I11According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575ï¿½090174.
I56Subpart J_Assignment, Conveyance, and Claims


I80ï¿½1A3565.451
I89Preclaim requirements.
I11(a) T3Lender certifications.G1T1 After borrower default and before filing a claim or assignment of the loan to the Agency, the lender must make every reasonable and prudent effort to resolve the default. The lender must provide the Agency with an accounting of all proposed and actual actions taken to cure the default. The lender must certify that all reasonable efforts to cure the default have been exhausted. Where the lender fails to comply with the terms of the loan guarantee agreement and the corresponding regulations and guidance with regard to liquidating the property, the Agency, at its option, may take possession of the security collateral and dispose of the property.
I11(b) T3Due diligence by lender.G1T1 For all loan servicing actions where a market, net recovery or liquidation value determination is required, guaranteed lenders shall perform due diligence in conjunction with the appraisal and submit it to the Agency for review. The Phase I Environmental Site Assessment published by the American Society of Testing and Materials is considered an acceptable format for due diligence.
I11(c) T3Environmental review.G1T1 The Agency is required to complete an environmental review under the National Environmental Policy Act, in accordance with 7 CFR part 1940, subpart G or a successor regulation, prior to disposition of inventory property, if title is held by the Agency, and prior to any authorization to the guaranteed lender to foreclose and dispose of property, and for any other servicing action requiring Agency approval or consent.


I80ï¿½1A3565.452
I89Decision to liquidate.
I11A decision to liquidate shall be made when it is determined that the default cannot be cured through actions contained in ï¿½1A3565.403 of subpart I or it has been determined that it is in the best interest of the Agency and the lender to liquidate.


I80ï¿½1A3565.453
I89Disposition of the property.
I11(a) T3Liquidation plan.G1T1 The lender will, within 30 days after a decision to liquidate, submit to the Agency in writing its proposed detailed plan of liquidation. Upon approval by the Agency of the liquidation plan, the lender will proceed to liquidate. At a minimum, this plan must contain the following information:
I11(1) Such proof as the Agency requires to establish the lender's ownership of the guaranteed loan promissory note and related security instruments and a copy of the payment ledger if available which reflects the current loan balance and accrued interest to date and the method of computing the interest.
I11(2) A full and complete list of all collateral including any personal and corporate guarantees.

I11(3) The recommended liquidation methods for making the maximum collection possible on the indebtedness and the justification for such methods, including recommended actions for:
I11(i) Acquiring and disposing of all collateral;
I11(ii) Collecting from guarantors;
ï¿½427ï¿½I11(iii) Obtaining an appraisal of the collateral;
I11(iv) Setting the proposed date of foreclosure; and
I11(v) Setting the proposed date of liquidation.
I11(4) Necessary steps for protection of the tenants and preservation of the collateral.
I11(5) Copies of the borrower's latest available financial statements.
I11(6) Copies of the guarantor's latest available financial statements.
I11(7) An itemized list of estimated liquidation expenses expected to be incurred along with justification for each expense.
I11(8) A schedule to periodically report to the Agency on the progress of liquidation.
I11(9) Estimated protective advance amounts with justification.
I11(b) T3Filing an estimated loss claim.G1T1 Upon Agency concurrence in the liquidation plan and when the lender owns any or all of the guaranteed portion of the loan, the Agency may, in accordance with program guidance, pay an estimated loss payment based on an Agency determined percentage of the approved estimate of the loss. The estimated loss payment will be based in the liquidation value of the collateral. If such payment is made, it will be applied to the outstanding principal balance owed on the guaranteed debt. The lender will discontinue interest accrual on the defaulted loan in accordance with Agency procedures.
I11(c) T3Property disposition.G1T1 Once the liquidation plan has Agency approval, the lender must make every effort to liquidate the property in a manner that will yield the highest market value consistent with the protections afforded to tenants contained in 7 CFR part 1944, subpart L or successor regulation. This liquidation process must be completed within 9 months from the lender's decision to liquidate, unless otherwise approved by the Agency.
I11(d) T3Transmitting payments and proceeds to the Agency.G1T1 When the Agency is the holder of a portion of the guaranteed loan, the lender will transmit to the Agency its pro rata share of any payments received from the borrower, liquidation, or other proceeds.


I80ï¿½1A3565.454
I89[Reserved]


I80ï¿½1A3565.455
I89Alternative disposition methods.
I11The Agency, in its sole discretion, may choose to obtain an assignment of the loan from the lender or conveyance of title obtained by the lender through foreclosure or a deed-in-lieu of foreclosure.
I11(a) T3Assignment.G1T1 In the case of an assignment of the loan, the assignment of the security instruments or the security must be in written and recordable form. Completion of the assignment will occur once the following transactions are completed to the Agency's satisfaction.
I11(1) Conveyance to the Agency of all the lender's rights and interests arising under the loan.
I11(2) Assignment to the Agency of all claims against the borrower or others arising out of the loan transactions, including:
I11(i) All collateral agreements affecting financing, construction, use or operation of the property; and
I11(ii) All insurance or surety bonds, or other guarantees, and all claims under them.
I11(3) Certification that the collateral has been evaluated for the presence of contamination from the release of hazardous substances, petroleum products or other environmental hazards which may adversely impact the market value of the property and the results of that evaluation.
I11(b) T3Conveyance of title.G1T1 In the case of a conveyance of title to the property, the lender must inform the Agency in advance of how it plans to acquire title and a timetable for doing so. The Agency will accept the conveyance upon receipt of an assignment to the Agency of all claims of the lender against the property and assignment of the lender's rights to any operating funds and any reserves or escrows established for the maintenance of the property or the payment of property taxes and insurance.


I80ï¿½1A3565.456
I89Filing a claim.
I11Once the lender has disposed of the property or the Agency has agreed to accept an assignment of the loan or conveyance of title to the property, the ï¿½428ï¿½lender may file a claim for the guaranteed portion of allowable losses. All claim amounts must be calculated in accordance with this subpart and be approved by the Agency.


I80ï¿½1A3565.457
I89Determination of claim amount.
I11(a) T3Maximum guarantee payment.G1T1 The maximum guarantee payment will not exceed the amount of guarantee percentage as contained in the guarantee agreement (but in no event more than 90%) times the allowable loss amount.
I11(b) T3Date of loss.G1T1 The date of loss is the earliest of the date on which the property is foreclosed or acquired or the proposed date of foreclosure or acquisition in the liquidation plan, unless an alternative date is approved by the Agency. Where the Agency chooses to accept an assignment of the loan or conveyance of title, the date of loss will be the date on which the Agency accepts assignment of the loan or conveyance of title.
I11(c) T3Allowable claim amount.G1T1 The allowable claim amount must be calculated by:
I11(1) Adding to the unpaid principal and interest on the date of loss, an amount approved by the Agency for payments made by the lender for amounts due and owing on the property, including:
I11(i) Property taxes and other protective advances as approved by the Agency;

I11(ii) Water and sewer charges and other special assessments that are liens prior to the guaranteed loan;
I11(iii) Insurance on the property;
I11(iv) Loan guarantee fees paid after default; and
I11(v) Reasonable liquidation expenses.
I11(2) And by deducting the following items:
I11(i) Any amount received by the lender on the account of the guaranteed loan after the date of default;
I11(ii) Any net income received by the lender from the secured property after the date of default; and
I11(iii) Any cash items retained by the lender, except any amount representing a balance of the guaranteed loan not advanced to the borrower. Any loan amount not advanced will be applied by the lender to reduce the outstanding principal on the loan.
I11(d) T3Lender certification.G1T1 The lender must certify that all possibilities of collection have been exhausted and that all of the items specified in paragraph (c) of this section have been identified and reported to the Agency as a condition for payment of claim.


I80ï¿½1A3565.458
I89Withdrawal of claim.
I11If the lender provides timely written notice to the Agency of withdrawal of the claim, the guarantee will continue as if the default had not occurred if the borrower cures the default prior to foreclosure or prior to acceptance of a deed-in-lieu of foreclosure.


I80ï¿½1A3565.459ï¿½093565.499
I89[Reserved]


I80ï¿½1A3565.500
I89OMB control number.
I11According to the Paperwork Reduction Act of 1995, no party is required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0575ï¿½090174.






I95Pt. 3570
I52PART 3570_COMMUNITY PROGRAMS
S8006I86Subpart A[Reserved]
S8010I86Subpart B_Community Facilities Grant Program
S8006I18Sec.
S8010I263570.51General.
I263570.52Purpose.
I263570.53Definitions.
I263570.54ï¿½093570.60[Reserved]
I263570.61Eligibility for grant assistance.
I263570.62Use of grant funds.
I263570.63Grant limitations.
I263570.64Applications determined ineligible.
I263570.65Processing preapplications and applications.
I263570.66Determining the maximum grant assistance.
I263570.67Project selection priorities.
I263570.68Selection process.
I263570.69Environmental review, intergovernmental review, and public notification.
I263570.70Other considerations.
I263570.71ï¿½093570.74[Reserved]
I263570.75Grantee contracts.
I263570.76Planning, bidding, contracting, and construction.
I263570.77ï¿½093570.79[Reserved]
I263570.80Grant closing and delivery of funds.
ï¿½429ï¿½I263570.81ï¿½093570.82[Reserved]
I263570.83Audits.
I263570.84Grant servicing.
I263570.85Programmatic changes.
I263570.86[Reserved]
I263570.87Grant suspension, termination, and cancellation.
I263570.88Management assistance.
I263570.89[Reserved]
I263570.90Exception authority.
I263570.91Regulations.
I263570.92[Reserved]
I263570.93Regional Commission grants.
I263570.94ï¿½093570.99[Reserved]
I263570.100OMB control number.



Q04I21T5Authority:  T15 U.S.C. 301; 7 U.S.C. 1989. 

Q04I21T5Source: T162 FR 16469, Apr. 7, 1997, unless otherwise noted.
S8006I56Subpart A[Reserved]
S8010I56Subpart B_Community Facilities Grant Program

Q04I21T5Source: T164 FR 32388, June 17, 1999, unless otherwise noted.



I80ï¿½1A3570.51
I89General.
I11(a) This subpart contains Rural Housing Service (RHS) policies and authorizations and establishes procedures for making essential Community Facilities Grants (CFG) authorized under section 306(a)(19) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)(19)).
I11(b) Funds allocated for use in accordance with this subpart are also to be considered for use by federally recognized Indian tribes within a State regardless of whether State development strategies include Indian reservations within the State's boundaries. Indian tribes must have equal opportunity along with other rural residents to participate in the benefits of this program.
I11(c) Federal statutes provide for extending RHS financial assistance without regard to race, color, religion, sex, national origin, age, disability, and marital or familial status. To file a complaint, write the Secretary of Agriculture, U.S. Department of Agriculture, Washington DC 20250, or call 1ï¿½09800ï¿½09245ï¿½096340 (voice) or (202) 730ï¿½091127 (TDD). Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720ï¿½092600 (voice and TDD).
I11(d) Any processing or servicing activity conducted pursuant to this subpart involving authorized assistance to Agency employees, members of their families, close relatives, or business or close personal associates is subject to the provisions of 7 CFR part 1900, subpart D. Applications for assistance are required to identify any relationship or association with an RHS employee.
I11(e) Copies of all forms referenced in this subpart are available in the Agency's National Office or any Rural Development field office.
I11(f) An outstanding judgment obtained against an applicant by the United States in a Federal Court (other than in the United States Tax Court), shall cause the applicant to be ineligible to receive any grant or loan until the judgment is paid in full or otherwise satisfied. Grant funds may not be used to satisfy the judgment.
I11(g) Grants made under this subpart will be administered under, and are subject to, 7 CFR parts 3015, 3016, or 3019, as appropriate.
I11(h) The income data used to determine median household income must be that which accurately reflects the income of the population to be served by the proposed facility. The median household income of the service area and the nonmetropolitan median household income for the State will be determined using income data from the most recent decennial Census of the United States. If there is reason to believe that the census data is not an accurate representation of the median household income within the area to be served, this will be documented and the applicant may furnish, or the Agency may obtain, additional information regarding such median household income. Information will consist of reliable data from local, regional, State, or Federal sources or from a survey conducted by a reliable impartial source.
I11(i) CFG funds can be used for up to 75 percent of the cost to develop the facility, notwithstanding that other contributions may be from other Federal sources.


ï¿½430ï¿½I80ï¿½1A3570.52
I89Purpose.
I11The purpose of CFG program is to assist in the development of essential community facilities in rural areas. The Agency will authorize grant funds on a graduated basis. Eligible applicants located in smaller communities with lower populations and lower median household incomes may receive a higher percentage of grant funds. The amount of CFG funds provided for a facility shall not exceed 75 percent of the cost of developing the facility.


I80ï¿½1A3570.53
I89Definitions.
I11T3Agency.G1T1 The Rural Housing Service (RHS), an agency of the U.S. Department of Agriculture, or a successor agency.
I11T3Approval official.G1T1 An official who has been delegated loan or grant approval authorities within applicable programs, subject to certain dollar limitations.
I11T3CF.G1T1 Community Facilities.
I11T3CFG.G1T1 Community Facilities Grant.
I11T3Essential community facilities.G1T1 Those public improvements requisite to the beneficial and orderly development of a community that is operated on a nonprofit basis. (See ï¿½1A3570.62(a)(1)). An essential community facility must:
I11(1) Serve a function customarily provided by a local unit of government;
I11(2) Be a public improvement needed for the orderly development of a rural community;
I11(3) Not include private affairs or commercial or business undertakings (except for limited authority for industrial parks) unless it is a minor part of the total facility;
I11(4) Be within the area of jurisdiction or operation for the public bodies eligible to receive assistance or a similar local rural service area of a not-for-profit corporation; and
I11(5) Be located in a rural area.
I11T3Facility.G1T1 The physical structure financed by the Agency or the resulting service provided to rural residents.
I11T3Grantee.G1T1 An entity with whom the Agency has entered into a grant agreement under this program.
I11T3Instructions.G1T1 Agency internal procedures available in any Rural Development office and variously referred to as Rural Development Instructions, RD Instructions.
I11T3Minor part.G1T1 No more than 15 percent of the total floor space of the proposed facility.
I11T3Nonprofit corporations.G1T1 Any corporation that is not organized or maintained for the making of a profit and that meets the eligibility requirements for RHS financial assistance in accordance with ï¿½1A3570.61(a)(2).
I11T3Processing office.G1T1 The office designated by the State program official to accept and process applications for CF projects.
I11T3Project cost.G1T1 The cost of completing the proposed facility. (Facilities previously constructed will not be considered in determining project costs.) Total project cost will include only those costs eligible for CFG assistance.
I11T3Poverty line.G1T1 The level of income for a family of four as defined by section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)).
I11T3Public body.G1T1 Any State, county, city, township, incorporated town or village, borough, authority, district, economic development authority, or federally recognized Indian tribe in rural areas.
I11T3Reasonable rates and terms.G1T1 The rates and terms customarily charged public and nonprofit type borrowers in similar circumstances in the ordinary course of business and subject to Agency review.
I11T3RHS.G1T1 The Rural Housing Service, an agency of the United States Department of Agriculture, or a successor agency.
I11T3Rural and rural area.G1T1 For fiscal year 1999, the terms ``rural'' and ``rural area'' include a city or town with a population of 20,000 or less inhabitants according to the latest decennial census of the United States. There is no limitation placed on population in open rural areas. After fiscal year 1999, the terms ``rural'' and ``rural area'' include a city, town, or unincorporated area that has a population of 50,000 inhabitants or less, other than an urbanized area immediately adjacent to a city, town, or unincorporated area that has a population in excess of 50,000 inhabitants.
I11T3Rural Development.G1T1 A mission area within USDA which includes Rural Housing Service, Rural Utilities Service, and Rural Business-Cooperative Service.
ï¿½431ï¿½I11T3RUS.G1T1 The Rural Utilities Service, an agency of USDA or a successor agency.
I11T3Service area.G1T1 The area reasonably expected to be served by the facility.
I11T3State.G1T1 The term ``State'' means each of the 50 States, the Commonwealth of Puerto Rico, Guam, the Virgin Islands of the United States, American Samoa, the Commonwealth of the Northern Mariana Islands, the Marshall Islands, the Republic of Palau, and the Federated States of Micronesia.
I11T3State Director.G1T1 The term ``State Director'' means, with respect to a State, the Director of the Rural Development State Office.
I11T3State nonmetropolitan median household income.G1T1 The median household income of all rural areas of a State as reported by the U.S. Census Bureau.
I11T3State strategic plan.G1T1 A plan developed by each State for Rural Development initiatives and the type of assistance required. Plans shall identify goals, methods, and benchmarks for measuring success.


I80ï¿½1A3570.54ï¿½093570.60
I89[Reserved]


I80ï¿½1A3570.61
I89Eligibility for grant assistance
I11The essential community facility must primarily serve rural areas, be located in a rural area, and the median household income of the population to be served by the proposed facility must be below the higher of the poverty line or the eligible percentage (60, 70, 80, or 90) of the State nonmetropolitan median household income (see ï¿½1A3570.63(b)).
I11(a) T3Eligible applicant.G1T1 An applicant must be a:
I11(1) Public body, such as a municipality, county, district, authority, or other political subdivision of a State;
I11(2) Nonprofit corporation or association. Applicants, other than nonprofit utility applicants, must have significant ties with the local rural community. Such ties are necessary to ensure to the greatest extent possible that a facility under private control will carry out a public purpose and continue to primarily serve rural areas. Ties may be evidenced by items such as:
I11(i) Association with, or controlled by, a local public body or bodies, or broadly based ownership and control by members of the community; or
I11(ii) Substantial public funding through taxes, revenue bonds, or other local government sources or substantial voluntary community funding, such as would be obtained through a community-wide funding campaign.
I11(3) Federally recognized Indian tribe in a rural area.
I11(b) T3Eligible facilities.G1T1 Essential community facilities must be:
I11(1) Located in rural areas, except for utility-type services, such as telecommunications or hydroelectric, serving both rural and non-rural areas. In such cases, RHS funds may be used to finance only that portion serving rural areas, regardless of facility location.
I11(2) Necessary for orderly community development and consistent with the State Strategic Plan.
I11(c) T3Credit elsewhere.G1T1 The approval official must determine that the applicant is unable to finance the proposed project from its own resources, or through commercial credit at reasonable rates and terms, or other funding sources without grant assistance under this subpart. The applicant must certify to such status in writing.
I11(d) T3Economic feasibility.G1T1 All projects financed under the provisions of this section must be based on satisfactory sources of revenues as outlined in 7 CFR 1942.17(h) and 1942.116. The amount of CFG assistance must be the minimum amount sufficient for feasibility which will provide for facility operation and maintenance, reasonable reserves, and debt repayment. The applicant's available excess funds must be used to supplement eligible project costs.
I11(e) T3Legal authority and responsibility.G1T1 Each applicant must have, or will obtain, prior to the grant award, the legal authority necessary to own, construct, operate, and maintain the proposed facility. The applicant shall be responsible for operating, maintaining, and managing the facility and providing for its continued availability and use at reasonable rates and terms. This responsibility shall be the applicant's even though the facility may be operated, maintained, or managed by a third party under contract or management agreement. If an applicant does ï¿½432ï¿½not have the authority to borrow funds, but owns, operates, and maintains the facility, the applicant is eligible for CFG funds.
I11(f) T3Facilities for public use.G1T1 All facilities shall be for the benefit of the public at large without discrimination as to race, color, religion, sex, national origin, disability, and marital or familial status.


I80ï¿½1A3570.62
I89Use of grant funds.

I11Grants of up to 75 percent of the cost of developing essential community facilities may be used to supplement financial assistance authorized in accordance with 7 CFR parts 1942, subparts A and C, and 3575, subpart A. Eligible CFG purposes are those listed in paragraphs (a), (b), (c), and (d) of this section. Funding for the balance of the project may consist of other CF financial assistance, applicant contributions, or loans and grants from other sources. CFGs may be used to:
I11(a) Construct, enlarge, extend, or otherwise improve essential community facilities providing essential service primarily to rural residents and rural businesses. Rural businesses include facilities such as educational and other publicly owned facilities.
I11(1) ``Essential community facilities'' are those public improvements requisite to the beneficial and orderly development of a community operated on a nonprofit basis including, but not limited to:
I11(i) Fire, rescue, and public safety;
I11(ii) Health services;
I11(iii) Community, social, or cultural services;
I11(iv) Transportation facilities such as streets, roads, and bridges;
I11(v) Hydroelectric generating facilities and related connecting systems and appurtenances, when not eligible for RUS financing;
I11(vi) Telecommunications equipment as it relates to medical and educational telecommunications links;
I11(vii) Supplemental and supporting structures for other rural electrification or telephone systems (including facilities such as headquarters and office buildings, storage facilities, and maintenance shops) when not eligible for RUS financing;
I11(viii) Natural gas distribution systems; and
I11(ix) Industrial park sites, but only to the extent of land acquisition and necessary site preparation, including access ways and utility extensions to and throughout the site. Funds may not be used in connection with industrial parks to finance on-site utility systems, or business and industrial buildings.
I11(2) ``Otherwise improve'' includes, but is not limited to, the following:
I11(i) The purchase of major equipment (such as solid waste collection trucks, telecommunication equipment, necessary maintenance equipment, fire service equipment, X-ray machines) which will in themselves provide an essential service to rural residents; and
I11(ii) The purchase of existing facilities when it is necessary either to improve or to prevent a loss of service.
I11(b) Construct or relocate public buildings, roads, bridges, fences, or utilities and to make other public improvements necessary to the successful operation or protection of facilities authorized in paragraph (a) of this section.
I11(c) Relocate private buildings, roads, bridges, fences, or utilities, and other private improvements necessary to the successful operation or protection of facilities authorized in paragraph (a) of this section.
I11(d) Pay the following expenses, but only when such expenses are a necessary part of a project to finance facilities authorized in paragraphs (a), (b), and (c) of this section:
I11(1) Reasonable fees and costs such as legal, engineering, architectural, fiscal advisory, recording, environmental impact analyses, archeological surveys and possible salvage or other mitigation measures, planning, establishing or acquiring rights.
I11(2) Costs of acquiring interest in land; rights, such as water rights, leases, permits, and rights-of-way; and other evidence of land or water control necessary for development of the facility.
I11(3) Purchasing or renting equipment necessary to install, maintain, extend, protect, operate, or utilize facilities.

ï¿½433ï¿½I11(4) Obligations for construction incurred before grant approval. Construction work should not be started and obligations for such work or materials should not be incurred before the grant is approved. However, if there are compelling reasons for proceeding with construction before grant approval, applicants may request Agency approval to pay such obligations. Such requests may be approved if the Agency determines that:

I11(i) Compelling reasons exist for incurring obligations before grant approval;
I11(ii) The obligations will be incurred for authorized grant purposes;
I11(iii) Contract documents have been approved by the Agency;
I11(iv) All environmental requirements applicable to the Agency and the applicant have been met; and
I11(v) The applicant has the legal authority to incur the obligations at the time proposed, and payment of the debts will remove any basis for any mechanic's, material, or other liens that may attach to the security property.

Q02I10The Agency may authorize payment of such obligations at the time of grant closing. The Agency's authorization to pay such obligations, however, is on the condition that it is not committed to make the grant; it assumes no responsibility for any obligations incurred by the applicant; and the applicant must subsequently meet all grant approval requirements. The applicant's request and the Agency's authorization for paying such obligations shall be in writing.


I80ï¿½1A3570.63
I89Grant limitations.
I11(a) Grant funds may not be used to:
I11(1) Pay initial operating expenses or annual recurring costs, including purchases or rentals that are generally considered to be operating and maintenance expenses (unless a CF loan is part of the funding package);
I11(2) Construct or repair electric generating plants, electric transmission lines, or gas distribution lines to provide services for commercial sale;
I11(3) Refinance existing indebtedness;
I11(4) Pay interest;
I11(5) Pay for facilities located in nonrural areas, except as noted in ï¿½1A3570.61(b)(1).
I11(6) Pay any costs of a project when the median household income of the population to be served by the proposed facility is above the higher of the poverty line or eligible percent (60, 70, 80, or 90) of the State nonmetropolitan median household income (see ï¿½1A3570.63(b));
I11(7) Pay project costs when other loan funding for the project is not at reasonable rates and terms;
I11(8) Pay an amount greater than 75 percent of the cost to develop the facility;
I11(9) Pay costs to construct facilities to be used for commercial rental unless it is a minor part of the total facility;
I11(10) Construct facilities primarily for the purpose of housing State, Federal, or quasi-Federal agencies; and
I11(11) Pay for any purposes restricted by 7 CFR 1942.17(d)(2).
I11(b) Grant assistance will be provided on a graduated scale with smaller communities with the lowest median household incomes being eligible for projects with a higher proportion of grant funds. Grant assistance is limited to the following percentages of eligible project costs:
I11(1) 75 percent when the proposed project is:
I11(i) Located in a rural community having a population of 5,000 or less; and
I11(ii) The median household income of the population to be served by the proposed facility is below the higher of the poverty line or 60 percent of the State nonmetropolitan median household income.
I11(2) 55 percent when the proposed project is:
I11(i) Located in a rural community having a population of 12,000 or less; and
I11(ii) The median household income of the population to be served by the proposed facility is below the higher of the poverty line or 70 percent of the State nonmetropolitan median household income.
I11(3) 35 percent when the proposed project is:
I11(i) Located in a rural community having a population of 20,000 or less; and
I11(ii) The median household income of the population to be served by the proposed facility is below the higher of the ï¿½434ï¿½poverty line or 80 percent of the State nonmetropolitan median household income.
I11(4) 15 percent when the proposed project is:
I11(i) Located in a rural community having a population of 50,000 or less; and
I11(ii) The median household income of the population to be served by the proposed facility is below the higher of the poverty line or 90 percent of the State nonmetropolitan median household income.
I11(5) Grant assistance cannot exceed the applicable percentages contained in this section and may be further limited due to availability of funds or by the maximum grant assistance allowable determined in accordance with ï¿½1A3570.66.


I80ï¿½1A3570.64
I89Applications determined ineligible.
I11If, at any time, an application is determined ineligible, the processing office will notify the applicant in writing of the reasons. The applicant will be advised that it may appeal the decision. (See 7 CFR part 11.)


I80ï¿½1A3570.65
I89Processing preapplications and applications.
I11For combination proposals for loan and grant funds, only one preapplication package and one application package should be prepared and submitted. Preapplications and applications for grants will be developed in accordance with applicable portions of 7 CFR 1942.2, 1942.104, and 3575.52.
I11(a) T3Preapplications.G1T1 Applicants will file an original and one copy of ``Application for Federal Assistance (For Construction),'' with the appropriate Agency office. This form is available in all Agency offices. The preapplication and supporting documentation are used to determine applicant eligibility and priority for funding.
I11(1) All preapplications shall be accompanied by:
I11(i) Evidence of applicant's legal existence and authority; and
I11(ii) Appropriate clearinghouse agency comments.
I11(b) T3Application processing.G1T1 Upon notification on ``Notice of Preapplication Review Action'' that the applicant is eligible for CFG funding, the applicant will be provided forms and instructions for filing a complete application. The forms required for a complete application, including the following, will be submitted to the processing office by the applicant:
I11(1) Updated ``Application for Federal Assistance (For Construction).''
I11(2) Financial feasibility report.
I11(c) T3Discontinuing the processing of the application.G1T1 If the applicant fails to submit the application and related material by the date shown on ``Notice of Preapplication Review Action'' (normally 60 days from the date of this form), the Agency will discontinue consideration of the application.


I80ï¿½1A3570.66
I89Determining the maximum grant assistance.
I11(a) T3Responsibility.G1T1 State Directors are responsible for determining the applicant's eligibility for grant assistance.
I11(b) T3Maximum grant assistance.G1T1 Grant assistance cannot exceed the lower of:
I11(1) Qualifying percentage of eligible project cost determined in accordance with ï¿½1A3570.63(b);
I11(2) Minimum amount sufficient to provide for economic feasibility as determined in accordance with ï¿½1A3570.61(d); or
I11(3) Either 50 percent of the annual State allocation or $50,000, whichever is greater, unless an exception is made by the RHS Administrator in accordance with ï¿½1A3570.90.


I80ï¿½1A3570.67
I89Project selection priorities.
I11Applications are scored on a priority basis. Points will be distributed as follows:
I11(a) T3Population priorities.G1T1 The proposed project is located in a rural community having a population of:
I11(1) 5,000 or less_30 points;
I11(2) Between 5,001 and 12,000, inclusive_20 points;
I11(3) Between 12,001 and 20,000, inclusive_10 points; or
I11(4) Between 20,001 and 50,000, inclusive, when applicable_5 points.
I11(b) T3Income priorities.G1T1 The median household income of the population to be served by the proposed project is below the higher of the poverty line or:
I11(1) 60 percent of the State nonmetropolitan median household income_30 points;
ï¿½435ï¿½I11(2) 70 percent of the State nonmetropolitan median household income_20 points;
I11(3) 80 percent of the State nonmetropolitan median household income_10 points; or
I11(4) 90 percent of the State nonmetropolitan median household income_5 points.
I11(c) T3Other priorities.G1T1 Points will be assigned for one or more of the following initiatives:
I11(1) Project is consistent with, and is reflected in, the State Strategic Plan_10 points;
I11(2) Project is for health care_10 points; or
I11(3) Project is for public safety_10 points.
I11(d) T3DiscretionaryG1T1. (1) The State Director may assign up to 15 points to a project in addition to those that may be scored under paragraphs (a) through (c) of this section. These points are to address unforeseen exigencies or emergencies, such as the loss of a community facility due to an accident or natural disaster or the loss of joint financing if Agency funds are not committed in a timely fashion. In addition, the points will be awarded to projects benefiting from the leveraging of funds in order to improve compatibility and coordination between the Agency and other agencies' selection systems and for those projects that are the most cost effective.
I11(2) In selecting projects for funding at the National Office level, additional points will be awarded based on the priority assigned to the project by the State Office. These points will be awarded in the manner shown below. Only the three highest priority projects for a State will be awarded points. The Administrator may assign up to 30 additional points to account for geographic distribution of funds, emergency conditions caused by economic problems, natural disasters, or leveraging of funds.

c2,L2,tp0,s25,10 I95  h1Priority h1Points
j
I011 D5
I012 D3
I013 D1 e




I80ï¿½1A3570.68
I89Selection process.
I11Each request for grant assistance will be carefully scored and prioritized to determine which projects should be selected for further development and funding.
I11(a) T3Selection of applications for further processingG1T1. The approval official will, subject to paragraph (b) of this section, authorize grants for those eligible preapplications with the highest priority score. When selecting projects, the following circumstances must be considered:
I11(1) Scoring of project and scores of other applications on hand;
I11(2) Funds available in the State allocation; and
I11(3) If other Community Facilities financial assistance is needed for the project, the availability of other funding sources.
I11(b) T3Lower scoring projectsG1T1. (1) In cases when preliminary cost estimates indicate that an eligible, high-scoring application is not feasible, or would require grant assistance exceeding 50 percent of a State's current annual allocation, or an amount greater than that remaining in the State's allocation, the approval official may instead select the next lower-scoring application for further processing provided the high-scoring applicant is notified of this action and given an opportunity to review the proposal and resubmit it prior to selection of the next application.
I11(2) If it is found that there is no effective way to reduce costs, the approval official, after consultation with the applicant, may request an additional allocation of funds from the National office.


I80ï¿½1A3570.69
I89Environmental review, intergovernmental review, and public notification.
I11All grants awarded under this subpart, including grant-only awards, are subject to the environmental requirements of 7 CFR part 1940, subpart G, to the intergovernmental review requirements of RD Instruction 1940ï¿½09J (available in any Rural Development office), and the public information process in 7 CFR 1942.17(j)(9).


ï¿½436ï¿½I80ï¿½1A3570.70
I89Other considerations.
I11Each application must contain the comments, necessary certifications, and recommendations of appropriate Federal or State regulatory or other agency or institution having expertise in the planning, operation, and management of similar facilities as required by 7 CFR parts 1942, subparts A and C, and 3575, subpart A. Proposals for facilities financed in whole or in part with Agency funds will be coordinated with appropriate Federal, State, and local agencies as required by the following:
I11(a) Grants under this subpart are subject to the provisions of 7 CFR 1942.17(k) which include title VI of the Civil Rights Act of 1964, section 504 of the Rehabilitation Act of 1973, Americans with Disability Act of 1990, and the regulations issued thereto. Certain housing-related projects, such as nursing homes, group homes, or assisted-living facilities, must comply with the requirements of the Fair Housing Act.
I11(b) Governmentwide debarment and suspension (nonprocurement) and requirements for drug-free workplace are applicable to CFG and grantees. See 7 CFR part 3017 and RD Instruction 1940ï¿½09M (available in any Rural Development office) for further guidance.
I11(c) Restrictions on lobbying. Grantees must comply with the lobbying restrictions set forth in 7 CFR part 3018.
I11(d) Civil Rights Impact Analysis, RD Instruction 2006ï¿½09P (available in any Rural Development office), and ``Civil Rights Impact Analysis Certification.''


I80ï¿½1A3570.71ï¿½093570.74
I89[Reserved]


I80ï¿½1A3570.75
I89Grantee contracts.
I11The requirements of 7 CFR 1942.4, 1942.17(e), 1942.17(l), 1942.118, and 1942.119 will be applicable when agreements between grantees and third parties are involved.


I80ï¿½1A3570.76
I89Planning, bidding, contracting, and construction.
I11Planning, bidding, contracting, and construction will be handled in accordance with 7 CFR 1942.9, 1942.18, and 1942.126.


I80ï¿½1A3570.77ï¿½093570.79
I89[Reserved]


I80ï¿½1A3570.80
I89Grant closing and delivery of funds.
I11(a) ``Community Facilities Grant Agreement'' will be used as the grant agreement between the Agency and the grantee and will be signed by the grantee before grant funds are advanced.
I11(b) Approval officials may require applicants to record liens or other appropriate notices of record to indicate that personal or real property has been acquired or improved with Federal grant funds and that use and disposition conditions apply to the property as provided by 7 CFR parts 3015, 3016, or 3019, as subsequently modified.
I11(c) Agency grant funds will be disbursed and monitored in accordance with 7 CFR 1942.17(p), 1942.123, and 1942.127.
I11(d) Grant funds will not be disbursed until they are actually needed by the applicant and all borrower, Agency, or other funds are expended, except when:
I11(1) Interim financing of the total estimated amount of loan funds needed during construction is arranged,
I11(2) All interim funds have been disbursed, and
I11(3) Agency grant funds are needed before RHS or other loans can be closed.
I11(e) If grant funds are available from other agencies and are transferred for disbursement by RHS, these grant funds will be disbursed in accordance with the agreement governing such other agencies' participation in the project.


I80ï¿½1A3570.81ï¿½093570.82
I89[Reserved]


I80ï¿½1A3570.83
I89Audits.
I11(a) Audits will be conducted in accordance with 7 CFR 1942.17(q)(4), except as provided in this section.
I11(b) Grantees who are not required to submit an audit report will, within 60 days following the end of the fiscal year in which any grant funds were expended, furnish RHS with annual financial statements, consisting of a verification of the organization's balance sheet and statement of income and expense report signed by an appropriate official of the organization or ï¿½437ï¿½other documentation as determined appropriate by the approval official.


I80ï¿½1A3570.84
I89Grant servicing.
I11Grants will be serviced in accordance with 7 CFR part 1951, subparts E and O.


I80ï¿½1A3570.85
I89Programmatic changes.
I11The grantee shall obtain prior Agency approval for any change to the objectives of the approved project. (For construction projects, a material change in approved space utilization or functional layout shall be considered such a change.) Failure to obtain prior approval of changes to the approved project or budget may result in suspension, refund, or termination of grant funds.


I80ï¿½1A3570.86
I89[Reserved]


I80ï¿½1A3570.87
I89Grant suspension, termination, and cancellation.
I11Grants may be suspended or terminated for cause or convenience in accordance with 7 CFR parts 3015, 3016, or 3019, as applicable.


I80ï¿½1A3570.88
I89Management assistance.
I11Grant recipients will be supervised to the extent necessary to ensure that facilities are constructed in accordance with approved plans and specifications and to ensure that funds are expended for approved purposes.


I80ï¿½1A3570.89
I89[Reserved]


I80ï¿½1A3570.90
I89Exception authority.
I11An RHS official may request, and the Administrator or designee may make, in individual cases, an exception to any requirement or provision of this subpart or address any omission of this subpart if the Administrator determines that application of the requirement or provision, or failure to take action in the case of an omission, would adversely affect the Government's interest.


I80ï¿½1A3570.91
I89Regulations.
I11Grants under this part will be in accordance with 7 CFR parts 3015, 3016, or 3019, as applicable, and any conflicts between those parts and this part will be resolved in favor of applicable 7 CFR parts 3015, 3016, or 3019.


I80ï¿½1A3570.92
I89[Reserved]


I80ï¿½1A3570.93
I89Regional Commission grants.
I11(a) Grants are sometimes made by Federal Regional Commissions (designated under Title V of the Public Works and Economic Development Act of 1965) for projects eligible for RHS assistance. RHS has agreed to administer such funds in a manner similar to administering RHS assistance.
I11(b) The transfer of funds from a Federal Regional Commission to RHS will be based on specific applications determined to be eligible for an authorized purpose in accordance with the requirements of RHS and the Federal Regional Commission.
I11(c) The Appalachian Regional Commission (ARC) is authorized under the Appalachian Regional Development Act of 1965 to serve the Appalachian region. ARC grants are handled in accordance with the ARC Agreement which applies to all ARC grants administered by Rural Development. Therefore, a separate Project Management Agreement between RHS and ARC is not needed for each ARC grant.
I11(d) Grants by other Federal Regional Commissions are handled in accordance with a separate Project Management Agreement between the respective Federal Regional Commission and RHS for each Commission grant or class of grants administered by RHS.
I11(e) When the Agency has funds in the project, no charge will be made for administering Federal Regional Commission grant funds.
I11(f) When RHS has no loan or grant funds in the project, an administrative charge will be made pursuant to the Economy Act (31 U.S.C. 1535).


I80ï¿½1A3570.94ï¿½093570.99
I89[Reserved]


I80ï¿½1A3570.100
I89OMB control number.
I11The information collection requirements contained in this regulation have been approved by the Office of Management and Budget (OMB) and have been assigned OMB control number 0575ï¿½090173. You are not required to respond to this collection of information unless it displays a valid OMB control number.










ï¿½438ï¿½I95Pt. 3575
I52PART 3575_GENERAL



I86Subpart A_Community Programs Guaranteed Loans
S8006I18Sec.
S8010I263575.1General.
I263575.2Definitions.
I263575.3Full faith and credit.
I263575.4Conditions of guarantee.
I263575.5ï¿½093575.7[Reserved]
I263575.8Access to lender's records.
I263575.9Environmental requirements.
I263575.10ï¿½093575.11[Reserved]
I263575.12Inspections.
I263575.13Appeals.
I263575.14ï¿½093575.16[Reserved]
I263575.17Exception authority.
I263575.18ï¿½093575.19[Reserved]
I263575.20Eligibility.
I263575.21ï¿½093575.23[Reserved]
I263575.24Eligible loan purposes.
I263575.25Ineligible loan purposes.
I263575.26[Reserved]
I263575.27Eligible lenders.
I263575.28Transfer of lenders or borrowers (prior to issuance of Loan Note Guarantee).
I263575.29Fees and charges by lender.
I263575.30Loan guarantee limitations.
I263575.31ï¿½093575.32[Reserved]
I263575.33Interest rates.
I263575.34Terms of loan repayment.
I263575.35ï¿½093575.36[Reserved]
I263575.37Insurance and fidelity bonds.
I263575.38ï¿½093575.39[Reserved]
I263575.40Equal opportunity and Fair Housing Act requirements.
I263575.41[Reserved]
I263575.42Design and construction requirements.
I263575.43Other Federal, State, and local requirements.
I263575.44ï¿½093575.46[Reserved]
I263575.47Economic feasibility requirements.
I263575.48Security.
I263575.49ï¿½093575.51[Reserved]
I263575.52Processing.
I263575.53Evaluation of application.
I263575.54ï¿½093575.58[Reserved]
I263575.59Review of requirements.
I263575.60ï¿½093575.62[Reserved]
I263575.63Conditions precedent to issuance of the Loan Note Guarantee.
I263575.64Issuance of Lender's Agreement, Loan Note Guarantee, and Assignment Guarantee Agreement.
I263575.65Lender's sale or assignment of the guaranteed portion of loan.
I263575.66ï¿½093575.68[Reserved]
I263575.69Loan servicing.
I263575.70ï¿½093575.72[Reserved]
I263575.73Replacement of loss, theft, destruction, mutilation, or defacement of Loan Note Guarantee or Assignment Guarantee Agreement.
I263575.74[Reserved]
I263575.75Defaults by borrower.
I263575.76ï¿½093575.77[Reserved]
I263575.78Repurchase of loan.
I263575.79[Reserved]
I263575.80Interest rate changes after loan closing.
I263575.81Liquidation.
I263575.82[Reserved]
I263575.83Protective advances.
I263575.84Additional loans or advances.
I263575.85Bankruptcy.
I263575.86ï¿½093575.87[Reserved]
I263575.88Transfer and assumptions.
I263575.89Mergers.
I263575.90Disposition of acquired property.
I263575.91ï¿½093575.93[Reserved]
I263575.94Determination and payment of loss.
I263575.95Future recovery.
I263575.96Termination of Loan Note Guarantee.
I263575.97ï¿½093575.99[Reserved]
I263575.100OMB control number.
S8006I86Subpart B[Reserved]
S8010

Q04I21T5Authority: T15 U.S.C. 301, 7 U.S.C. 1989.

Q04I21T5Source: T164 FR 28337, May 26, 1999, unless otherwise noted.



I56Subpart A_Community Programs Guaranteed Loans


I80ï¿½1A3575.1
I89General.
I11(a) This subpart contains the regulations for Community Programs loans guaranteed by the Agency and applies to lenders, holders, borrowers, and other parties involved in making, guaranteeing, holding, servicing, or liquidating such loans.
I11(b) The purpose of the Community Programs guaranteed loan program is to improve, develop, or finance essential community facilities in rural areas.   This purpose is achieved through bolstering the existing private credit structure through the guarantee of quality loans which will provide lasting community benefits.


I80ï¿½1A3575.2
I89Definitions.
I11The following general definitions are applicable to the terms used in this subpart:
I11T3Agency.G1T1 The Rural Housing Service which is within the Rural Development mission area of the United States Department of Agriculture or its successor agencies with authority delegated by the Secretary of Agriculture ï¿½439ï¿½to administer the Community Facilities programs.
I11T3Application.G1T1 An Agency prescribed form to request an Agency guarantee (available in any Agency office).
I11T3Arm's length transaction.G1T1 The sale, release, or disposition of assets in which the title to the property passes to a ready, willing, and able third party who is not affiliated with, or related to, and has no security, monetary, or stockholder interest in the borrower or transferor at the time of the transaction.
I11T3Assignment Guarantee Agreement.G1T1 The signed agreement among the Agency, the lender, and the holder setting forth the terms and conditions of an assignment of the guaranteed portion of a loan or any part thereof (available in any Agency office).
I11T3Borrower.G1T1 The entity that borrows money from the lender.
I11T3Collateral.G1T1 Property pledged to secure the guaranteed loan.
I11T3Community facility (essential).G1T1 The term ``facility'' as used in this subpart refers to both the physical structure financed and the resulting service provided to rural residents. An essential community facility must:
I11(1) Be a function customarily provided by a local unit of government;
I11(2) Be a public improvement needed for the orderly development of a rural community;
I11(3) Not include private affairs or commercial or business undertakings (except for limited authority for industrial parks);
I11(4) Be within the area of jurisdiction or operation for eligible public bodies or a similar local rural service area of a not-for-profit corporation; and
I11(5) Be located in a rural area.
I11T3Conditional Commitment for Guarantee.G1T1 The Agency's written statement to the lender that the material submitted is approved subject to the completion of all conditions and requirements contained in the commitment (available in any Agency office).
I11T3Guaranteed loan.G1T1 A loan made and serviced by a lender for which the Agency and lender have entered into a Lender's Agreement and for which the Agency has issued a Loan Note Guarantee.
I11T3Holder.G1T1 The person or entity (other than the lender) who holds all or a part of the guaranteed portion of the loan with no servicing responsibilities. When the lender assigns part or all of the guaranteed portion of the loan to an assignee, the assignee becomes a holder when the Assignment Guarantee Agreement is signed by all parties.
I11T3Immediate family.G1T1 Individuals who are closely related by blood or by marriage, or within the same household, such as a spouse, parent, child, brother, sister, aunt, uncle, grandparent, grandchild, niece, or nephew.
I11T3In-house expenses.G1T1 In-house expenses include, but are not limited to, employees' salaries, staff lawyers, travel, and overhead.
I11T3Insurance.G1T1 Fire, windstorm, lightning, hail, explosion, riot, civil commotion, aircraft, vehicles, smoke, builder's risk, liability, property damage, flood or mudslide, worker's compensation, fidelity bond, malpractice, or any similar insurance that is available and needed to protect the security or that is required by law.
I11T3Joint financing.G1T1 Two or more lenders (or any combination of lenders and other financial sources) making separate relatively contemporaneous loans to supply the funds required by one borrower. For example, such joint financing may consist of the Agency's financial assistance with the Economic Development Administration, Department of Housing and Urban Development (HUD), or other Federal and State agencies, and private and quasi-public financial institutions.
I11T3Lender.G1T1 The person or organization making and responsible for servicing the loan. The lender is also referred to in this subpart as the applicant who is requesting a guarantee during the preapplication and application stage of processing.
I11T3Lender's Agreement.G1T1 The signed agreement between the Agency and the lender containing the lender's responsibilities when the Loan Note Guarantee is issued (available in any Agency office).
I11T3Loan classification system.G1T1 The process by which loans are examined and categorized by degree of potential loss in the event of default.
ï¿½440ï¿½I11T3Loan Note Guarantee.G1T1 The signed commitment issued by the Agency containing the terms and conditions of the guarantee of an identified loan (available in any Agency office).
I11T3Market value.G1T1 The amount for which property would sell for its highest and best use at a voluntary sale in an arm's length transaction.

I11T3Note.G1T1 An evidence of debt. In those instances where the Agency guarantees a bond issue, ``note'' shall also be construed to include a bond or other evidence of indebtedness, as appropriate.

I11T3Participation.G1T1 Sale of an interest in a loan in which the lender retains the note, collateral securing the note, and all responsibility for loan servicing and liquidation.

I11T3Principals of borrowers.G1T1 The owners, officers, directors, entities, and supervisors directly involved in the operation and management of the borrower.
I11T3Problem loan.G1T1 A loan which is not complying with its terms and conditions.
I11T3Protective advances.G1T1 Advances made by the lender for the purpose of preserving and protecting the collateral where the debtor has failed to, and will not or cannot, meet obligations to protect or preserve collateral.
I11T3Public body.G1T1 A municipality, county, or other political subdivision of a State, special purpose district, an Indian tribe on a Federal or State reservation, or another federally recognized Indian tribe.
I11T3Report of loss.G1T1 A form used by lenders when reporting a loss under an Agency guarantee (available in any Agency office).
I11T3Rural and rural area.G1T1 (1) For fiscal year 1999, the terms ``rural'' and ``rural area'' mean a city, town, or unincorporated area with 20,000 inhabitants or less according to the latest decennnial census.
I11(2) For later fiscal years, the terms ``rural'' and ``rural area'' mean a city, town, or unincorporated area that has a population of 50,000 inhabitants or less according to the latest decennial census of the United States, other than an urbanized area immediately adjacent to a city, town, or unincorporated area that has a population in excess of 50,000 inhabitants.
I11T3Service area.G1T1 The area reasonably expected to be served by the facility being financed by the guaranteed loan.
I11T3State.G1T1 Any of the 50 States, the Commonwealth of Puerto Rico, the Virgin Islands of the United States, Guam, American Samoa, Commonwealth of the Northern Mariana Islands, Republic of the Marshall Islands, Republic of Palau, and the Federated States of Micronesia.
I11T3State Bond Banks and State Bond Pools.G1T1 An entity authorized by the State to issue State debt instruments and utilize the funds received to finance essential community facilities.
I11T3State Director.G1T1 The Rural Development State Director or the staff member who has been delegated authority to perform action on behalf of the State Director.
I11T3Substantive change.G1T1 Any change in the purpose of the loan or any change in the financial condition of the borrower or the collateral which would jeopardize the performance of the loan.
I11T3Transfer and assumption.G1T1 The conveyance by a debtor to an assuming party of the assets, collateral, and liabilities of the loan in return for the assuming party's binding promise to pay the outstanding debt.


I80ï¿½1A3575.3
I89Full faith and credit.
I11The Loan Note Guarantee constitutes an obligation supported by the full faith and credit of the United States and is not contestable except for fraud or misrepresentation (including negligent misrepresentation) of which the lender or holder has actual knowledge, participates in, or condones. A note which provides for the payment of interest on interest shall not be guaranteed and any Loan Note Guarantee or Assignment Guarantee Agreement attached to, or relating to, a note which provides for payment of interest on interest is void. The Loan Note Guarantee will not be enforceable by the lender to the extent any loss is occasioned by violation of usury laws, negligent servicing, or failure to obtain the required security regardless of the time at which the Agency acquires knowledge of the foregoing. Any losses occasioned will not be enforceable by the lender to the extent that loan funds are used for purposes other than ï¿½441ï¿½those specifically approved by the Agency in its Conditional Commitment for Guarantee. Negligent servicing is defined as the failure to perform those services which a reasonably prudent lender would perform in servicing its own portfolio of loans that are not guaranteed. The term includes not only the concept of a failure to act, but also not acting in a timely manner, acting in a manner contrary to the manner in which a reasonably prudent lender would act up to the time of loan maturity, or until a final loss is paid. The Loan Note Guarantee or Assignment Guarantee Agreement in the hands of a holder shall not cover interest accruing 90 days after the holder has demanded repurchase by the lender, nor shall the Loan Note Guarantee or Assignment Guarantee Agreement in the hands of a holder cover interest accruing 90 days after the lender or Agency has requested the holder to surrender the evidence of debt for repurchase.


I80ï¿½1A3575.4
I89Conditions of guarantee.
I11A loan guarantee under this part will be evidenced by a Loan Note  Guarantee issued by the Agency. Each lender will also execute a Lender's  Agreement.
I11(a) The entire loan will be secured by the same security with equal lien priority for the guaranteed and non-guaranteed portions of the loan. The non-guaranteed portion of the loan will not be paid first nor given any preference or priority over the guaranteed portion.
I11(b) The lender will be responsible for servicing the entire loan and will remain mortgagee or secured party of record notwithstanding the fact that another party may hold a portion of the loan.
I11(c) When a guaranteed portion of a loan is sold to a holder, the holder shall have all rights of the lender under the Loan Note Guarantee to the extent of the portion purchased. The lender will remain bound by all the obligations under the Loan Note Guarantee, Lender's Agreement, and Agency program regulations. If the Agency makes a payment to a holder, then the lender must reimburse the Agency.
I11(d) A lender will receive all payments of principal and interest on the account of the entire loan and will promptly remit to each holder a pro rata share, less any lender servicing fee.
I11(e) The lender may retain all of the unguaranteed portion of the loan or may sell part of the unguaranteed portion of the loan through participation.  However, the lender is required to retain 5 percent of the loan amount from the unguaranteed portion in their portfolio.


I80ï¿½1A3575.5ï¿½093575.7
I89[Reserved]


I80ï¿½1A3575.8
I89Access to lender's records.
I11Upon request by the Agency, the lender will permit representatives of the Agency (or other agencies of the U.S. Department of Agriculture authorized by that Department or the U.S. Government) to inspect and make copies of any of the records of the lender pertaining to the guaranteed loans. Such inspection and copying may be made during regular office hours of the lender or at any other time the lender and the Agency agree upon.


I80ï¿½1A3575.9
I89Environmental requirements.
I11Requirements for an environmental review or mitigation actions are contained in part 1940, subpart G, of this title. The lender must assist the Agency to ensure that the lender's applicant complies with any mitigation measures required by the Agency's environmental review for the purpose of avoiding or reducing adverse environmental impacts of construction or operation of the facility financed with the guaranteed loan. This assistance includes ensuring that the lender's applicant is to take no actions (for example, initiation of construction) or incur any obligations with respect to their proposed undertaking that would either limit the range of alternatives to be considered during the Agency's environmental review process or which would have an adverse effect on the environment. If construction is started prior to completion of the environmental review and the Agency is deprived of its opportunity to fulfill its obligation to comply with applicable environmental requirements, the application for financial assistance may be denied. Satisfactory completion of the environmental review process must occur prior to ï¿½442ï¿½Agency approval of the applicant's request or any commitment of Agency resources.


I80ï¿½1A3575.10ï¿½093575.11
I89[Reserved]


I80ï¿½1A3575.12
I89Inspections.
I11The lender will notify the Agency of any scheduled field inspections during construction and after issuance of the Loan Note Guarantee. The Agency may attend such field inspections. Any inspections or review conducted by the Agency, including those with the lender, are for the benefit of the Agency only and not for the benefit of other parties of interest. Agency inspections do not relieve any parties of interest of their responsibilities to conduct necessary inspections.


I80ï¿½1A3575.13
I89Appeals.
I11Only the borrower, lender, or holder can appeal an Agency decision. In cases where the Agency has denied or reduced the amount of final loss payment to the lender, the adverse decision may be appealed only by the lender. A decision by a lender adverse to the interest of the borrower is not a decision by the Agency, whether or not concurred in by the Agency. Appeals will be handled in accordance with the regulations of the National Appeals Division, U.S. Department of Agriculture, published at 7 CFR part 11.


I80ï¿½1A3575.14ï¿½093575.16
I89[Reserved]


I80ï¿½1A3575.17
I89Exception authority.
I11The Administrator may, in individual cases, make an exception to any requirement or provision of this subpart or address any omission of this subpart provided the Administrator determines that application of the requirement or provision, or failure to take action in the case of an omission, would adversely affect the Government's financial interest. Requests for exceptions must be in writing by the State Director.


I80ï¿½1A3575.18ï¿½093575.19
I89[Reserved]


I80ï¿½1A3575.20
I89Eligibility.
I11(a) T3Availability of credit from other sources.G1T1 The Agency must determine that the borrower is unable to obtain the required credit without the loan guarantee from private, commercial, or cooperative sources at reasonable rates and terms for loans for similar purposes and periods of time. This determination shall become a part of the Agency casefile. The Agency must also determine if an outstanding judgment obtained by the United States in a Federal Court (other than the U.S. Tax Court) has been entered against the borrower or if the borrower has an outstanding delinquent debt with any Federal agency. Such judgment or delinquency shall cause the potential borrower to be ineligible to receive a loan guarantee until the judgment is paid in full or otherwise satisfied or the delinquency is cured.
I11(b) T3Legal authority and responsibility.G1T1 (1) Each borrower must have, or will obtain, the legal authority necessary to construct, operate, and maintain the proposed facility and services. They must also have legal authority for obtaining security and repaying the proposed loan.
I11(2) The borrower shall be responsible for operating, maintaining, and managing the facility and services, and providing for the continued availability and use of the facility and services at reasonable rates and terms.
I11(i) These responsibilities must be exercised by the borrower even though the facility may be operated, maintained, or managed by a third party under contract, management agreement, or written lease.
I11(ii) Leases may only be used when this is the only feasible way to provide the service, is the customary practice to provide such service in the State, and must provide for the borrower's management control of the facility.
I11(iii) Contracts, management agreements, or leases must not contain options or other provisions for transfer of ownership.
I11(3) The lender is responsible for reviewing any contracts, management agreements, or leases to determine that they will not adversely impact the borrower's repayment ability or the security value of the guaranteed loan.
I11(c) T3Borrower.G1T1 (1) A public body such as a municipality, county, district, authority, or other political subdivision of a State located in a rural area.
ï¿½443ï¿½I11(2) An organization operated on a not-for-profit basis such as an association, cooperative, or private corporation. For-profit corporations operated as not-for-profit corporations are eligible borrowers as long as they operate as a not-for-profit corporation for the duration of their guaranteed loans. Single member corporations or corporations owned or substantially controlled by other corporations or associations are not eligible organizations. Before a loan is made to a borrower other than a public body, the articles of incorporation or the loan agreement will include a condition similar to the following:
Q04


I21If the corporation dissolves or ceases to perform the community facility objectives and functions, the board of directors shall distribute all business property and assets to one or more nonprofit corporations or public bodies. This distribution must be approved by 75 percent of the users or members and must serve the public welfare of the community. The assets may not be distributed to any members, directors, stockholders, or others having financial or managerial interest in the corporation. Nothing herein shall prohibit the corporation from paying its debts.

Q04
I11(3) A private nonprofit essential community facility (other than utilities) must have significant ties with the local rural community. Such ties are necessary to ensure to the greatest extent possible that a facility under private control will carry out a public purpose and continue to primarily serve rural areas. Ties may be evidenced by items such as:
I11(i) Association with, or controlled by, a local public body or bodies or broadly based ownership and controlled by members of the community.
I11(ii) Substantial public funding through taxes, revenue bonds, or other local government sources, or substantial voluntary community funding such as would be obtained through a community-wide funding campaign.
I11(4) Indian tribes on Federal and State reservations and other federally recognized Indian tribes.
I11(d) T3Facility location.G1T1 Facilities must be located in rural areas, except:
I11(1) For utility services such as natural gas or hydroelectric serving both rural and non-rural areas. In such cases, Agency funds may be used to finance only that portion serving rural areas, regardless of facility location.
I11(2) Telecommunication projects. The part of the facility located in a non-rural area must be necessary to provide the essential services to rural areas.
I11(e) T3Facilities for public use.G1T1 All facilities financed under the provisions of this subpart shall be for public purposes.
I11(1) Facilities will be installed to serve any user within the service area who desires service and can be feasibly and legally served.
I11(2) In no case will boundaries for the proposed service area be chosen in such a way that any user or area will be excluded because of race, color, religion, sex, marital status, age, disability, or national origin. This does not preclude:
I11(i) Financing or constructing projects in phases when it is not practical to finance or construct the entire project at one time, and
I11(ii) Financing or constructing facilities where it is not economically feasible to serve the entire area, provided economic feasibility is determined on the basis of the entire system or facility and not by considering the cost of separate extensions to, or parts thereof. Additionally, the borrower must publicly announce a plan for extending service to areas not initially receiving service. Also, the borrower must provide written notice to potential users located in the areas not to be initially served.
I11(3) The lender will determine that, when feasible and legally possible, inequities within the proposed project's service area for the same type service proposed (i.e., gas distribution system) will be remedied by the owner on, or before, completion of the project. Inequities are defined as unjustified variations in availability, adequacy, or quality of service. User rate schedules for portions of existing systems or facilities that were developed under different financing, rates, terms, or conditions do not necessarily constitute inequities.


I80ï¿½1A3575.21ï¿½093575.23
I89[Reserved]


I80ï¿½1A3575.24
I89Eligible loan purposes.
I11(a) Funds may be used to construct, enlarge, extend, or otherwise improve ï¿½444ï¿½other essential community facilities providing essential service primarily to rural residents and rural businesses.
I11(1) Essential community facilities include, but are not limited to:
I11(i) Fire, rescue, and public safety,
I11(ii) Health services,
I11(iii) Community, social, or cultural services,
I11(iv) Transportation facilities such as streets, roads, and bridges,
I11(v) Telecommunication equipment,
I11(vi) Hydroelectric generating facilities and related connecting systems and appurtenances only when not eligible for financing under the authorities of the Rural Utilities Service. Funds may not be used to finance other types of electrical generating or transmitting facilities,
I11(vii) Supplemental and supporting structures for other rural electrification or telephone systems (including facilities such as headquarters and office buildings, storage facilities, and maintenance shops) only when not eligible for financing under the authorities of the Rural Utilities Service,
I11(viii) Natural gas distribution systems,
I11(ix) Industrial park sites (but only to the extent of land acquisition and necessary site preparation) including access ways and utility extensions to and throughout the site. Funds may not be used in connection with industrial parks to finance on-site utility systems or business and industrial buildings, and
I11(x) Recreational facilities.
I11(2) Otherwise improve includes, but is not limited to, the following:
I11(i) The purchase of major equipment (such as telecommunication equipment and X-ray machines) which will in themselves provide an essential service to rural residents,
I11(ii) The purchase of existing facilities, when necessary, either to improve or to prevent a loss of service, and
I11(iii) Payment of tap fees and other utility connection charges as provided in utility purchase contracts.
I11(b) Funds also may be used:
I11(1) To construct or relocate public buildings, roads, bridges, fences, or utilities and to make other public improvements necessary to the successful operation or protection of facilities authorized by paragraph (a) of this section.
I11(2) To relocate private buildings, roads, bridges, fences, or utilities, and other private improvements necessary to the successful operation or protection of facilities authorized in paragraph (a) of this section.
I11(3) To pay the following expenses (but only when such expenses are a necessary part of a loan to finance facilities authorized in paragraph (a) of this section):
I11(i) Reasonable fees and costs such as origination fee, loan guarantee fee, legal, engineering, architectural, fiscal advisory, recording, environmental impact analyses, archaeological surveys, possible salvage or other mitigation measures, planning and establishing or acquiring rights.
I11(ii) Interest on loans until the facility is self-supporting, but not for more than 2 years unless a longer period is approved by the Agency; interest on loans secured by general obligation bonds until tax revenues are available for payment, but not for more than 2 years unless a longer period is approved by the Agency's National Office; and interest on interim financing.
I11(iii) Costs of acquiring interest in land; rights such as water rights, leases, permits, rights-of-way, and other evidence of land or water control necessary for development of the facility.
I11(iv) Purchasing or renting equipment necessary to install, maintain, extend, protect, operate, or utilize facilities.
I11(v) Initial operating expenses for a period ordinarily not exceeding 1 year when the borrower is unable to pay such expenses.
I11(vi) Refinancing debts incurred by, or on behalf of, a community when all of the following conditions exist:
I11(A) The debts being refinanced are less than 50 percent of the total loan,
I11(B) The debts were incurred for the facility or service being financed or any part thereof (such as interim financing, construction expenses, etc.), and
I11(C) Arrangements cannot be made with the creditors to extend or modify the terms of the debts so that a sound basis will exist for making a loan.
ï¿½445ï¿½I11(4) To pay obligations for construction incurred prior to filing a preapplication and application with the Agency. Construction work must not be started (and obligations for such work or materials must not be incurred) before the Conditional Commitment for Guarantee is issued. If there are compelling reasons for proceeding with construction before the Conditional Commitment for Guarantee is issued, lenders may request Agency approval to pay such obligations and not jeopardize a guarantee from the Agency. Such request must comply with the following:
I11(i) Provide conclusive evidence that the contract was entered into without intent to circumvent the Agency regulations. However, the Agency is not required or obligated to pay a loss unless a written guarantee is issued,
I11(ii) Modify the outstanding contract to conform with the provisions of this subpart. Where this is not possible, modifications will be made to the extent practicable and, as a minimum, the contract must comply with all State and local laws and regulations as well as statutory requirements and executive orders related to the Agency financing. When construction is complete and it is impracticable to modify the contract, the borrower and lender must provide the certification required by paragraph (b)(4)(iii) of this section,
I11(iii) Provide a certification by an engineer or architect that any construction performed complies fully with the plans and specifications, and
I11(iv) The borrower and the contractor must have complied with all statutory and executive order requirements related to Agency financing for construction already performed even though the requirements may not have been included in the contract documents.


I80ï¿½1A3575.25
I89Ineligible loan purposes.
I11Loan funds may not be used to finance:
I11(a) Properties to be used for commercial rental when the borrower has no control over tenants and services offered except for industrial-site infrastructure development,
I11(b) Facilities primarily for the purpose of housing Federal or State agencies,
I11(c) Community antenna television services or facilities,
I11(d) Telephone systems,
I11(e) Facilities which are not modest in size, design, and cost,
I11(f) Finder's and packager's fees,
I11(g) Projects located within the Coastal Barriers Resource System that do not qualify for an exception as defined in section 6 of the Coastal Barriers Resource Act, 16 U.S.C. 3501 T3et seq.G1T1 (available in any Agency office),
I11(h) New combined sanitary and storm water sewer facilities, or
I11(i) Projects that are located in a special flood or mudslide hazard area as designated by the Federal Emergency Management Agency in a community that is not participating in the National Flood Insurance Program.


I80ï¿½1A3575.26
I89[Reserved]


I80ï¿½1A3575.27
I89Eligible lenders.
I11(a) T3Eligible lenders.G1T1 Eligible lenders (as defined in this section) may participate in the loan guarantee program. These lenders must be subject to credit examination and supervision by an appropriate agency of the United States or a State that supervises and regulates credit institutions. A lender must have the capability to adequately service loans for which a guarantee is requested. Eligible lenders are:
I11(1) Any Federal or State chartered bank or savings and loan association;
I11(2) Any mortgage company that is a part of a bank holding company;
I11(3) Bank for Cooperatives, National Rural Utilities Cooperative Finance Corporation, Farm Credit Bank of the Federal Land Bank, or other Farm Credit System institution with direct lending authority authorized to make loans of the type guaranteed by this subpart;
I11(4) An insurance company regulated by a State or National insurance regulatory agency;
I11(5) State Bond Banks or State Bond Pools; and
I11(6) Other lenders that possess the legal powers necessary and incidental to making and servicing guaranteed loans involving community development-type projects. These lenders must also be subject to credit examination ï¿½446ï¿½and supervision by either an appropriate agency of the United States or a State that supervises and regulates credit institutions and provide documentation acceptable to the Agency that they have the ability to service the loan. Lenders under this category must be approved by the National Office prior to the issuance of the loan guarantee.
I11(b) T3Conflict of interest.G1T1 When the lender's officers, stockholders, directors, or partners (including their immediate families) or the borrower, its officers, stockholders, directors, or partners (including their immediate families) own, or have management responsibilities in each other, the lender must disclose such business or ownership relationships. The Agency will determine if such relationships are likely to result in a conflict of interest. This does not preclude lender officials from being on the borrower's board of directors.


I80ï¿½1A3575.28
I89Transfer of lenders or borrowers (prior to issuance of Loan Note Guarantee).
I11(a) Prior to issuance of the loan guarantee, the Agency may approve the transfer of an outstanding Conditional Commitment for Guarantee from the present lender to a new eligible lender, provided:
I11(1) The former lender states in writing why it does not wish to continue to be the lender for this project;
I11(2) No substantive changes in ownership or control of the borrower has occurred;
I11(3) No substantive changes in the borrower's written plan, scope of work, or changes in the purpose or intent of the project has occurred; and
I11(4) No substantive changes in the loan agreement or Conditional Commitment for Guarantee are required.
I11(b) The substitute lender must execute a new application for loan and guarantee (available in any Agency office).
I11(c) If approved, the Agency will issue a letter of amendment to the original Conditional Commitment for Guarantee reflecting the new lender who will acknowledge acceptance of the offer in writing.
I11(d) Once the Conditional Commitment for Guarantee is issued, the Agency will not approve any substitution of borrowers, including changes in the form of the legal entity. Exceptions to a change in the legal entity may be requested when the original borrower is replaced with substantially the same individuals or officers with the same interest as originally approved.


I80ï¿½1A3575.29
I89Fees and charges by lender.
I11(a) T3Routine charges and fees.G1T1 The lender may establish the charges and fees for the loan, provided they do not exceed those charged other borrowers for similar types of transactions. ``Similar types of transactions'' mean those transactions involving the same type of loan for which a non-guaranteed loan borrower would be assessed charges and fees.
I11(b) T3Late payment fees.G1T1 Late payment charges will not be covered by the Loan Note Guarantee. Such charges may not be added to the principal and interest due under any guaranteed note. Late payment charges may be made only if:
I11(1) They are routinely made by the lender in all types of loan transactions;
I11(2) Payment has not been received within the customary timeframe allowed by the lender; or
I11(3) The lender agrees with the borrower, in writing, that the rate or method of calculating the late payment charges will not be changed to increase charges while the Loan Note Guarantee is in effect.
I11(c) T3Guarantee fees.G1T1 The guaranteed loan fee will be the applicable guarantee fee rate multiplied by the principal loan amount multiplied by the percent of guarantee. The one-time guarantee fee is paid when the Loan Note Guarantee is issued.
I11(1) The fee will be paid to the Agency by the lender and is nonreturnable. The lender may pass the fee to the borrower.
I11(2) The guarantee fee rates are available in any Agency office.


I80ï¿½1A3575.30
I89Loan guarantee limitations.
I11The percentage of guarantee, up to the maximum allowed by this section, is a matter for negotiation between the lender and the Agency.
ï¿½447ï¿½I11(a) The maximum guarantee is 90 percent of eligible loss.
I11(b) The lender will retain a minimum of 5 percent of the total loan amount. The retained amount must be from the unguaranteed portion of the loan and cannot be participated to another lender.


I80ï¿½1A3575.31ï¿½093575.32
I89[Reserved]


I80ï¿½1A3575.33
I89Interest rates.
I11(a) T3General.G1T1 Rates will be negotiated between the lender and the borrower.
I11They may be either fixed or variable rates. Interest rates will be those rates customarily charged borrowers in similar circumstances in the ordinary course of business and are subject to Agency review and approval.
I11(b) T3Variable rate publication.G1T1 A variable interest rate must be tied to a base rate published periodically in a recognized national or regional financial publication specifically agreed to by the lender and borrower. Such an agreement must be documented in the borrower or lender loan agreement.
I11(1) Interest rate caps and incremental adjustment limitations will also be negotiated between the lender and the borrower. Notice of any interest rate change proposed by the lender should allow a sufficient time period for the borrower to obtain any required State or other regulatory approval and to implement any user rate adjustments necessary as a result of the interest rate change. The intervals between interest rate adjustments will be specified in the loan agreement (but not more often than quarterly).
I11(2) The lender must incorporate within the variable rate note, the provision for adjustment of payments coincident with an interest rate adjustment. This will ensure the outstanding principal balance is properly amortized within the prescribed loan maturity and eliminate the possibility of a balloon payment at the end of the loan.
I11(c) T3Changes.G1T1 Any change in the interest rate between the date of issuance of the Conditional Commitment for Guarantee and before the issuance of the Loan Note Guarantee must be approved by the Agency. Approval of such change will be shown as an amendment to the Conditional Commitment for Guarantee.
I11(d) T3Different rates on guaranteed and unguaranteed portion of the loan.G1T1 It is permissible to have one interest rate on the guaranteed portion of the loan and another interest rate on the unguaranteed portion of the loan, provided the lender and borrower agree, and:
I11(1) The rate on the unguaranteed portion does not exceed that currently being charged on loans for similar purposes to borrowers under similar circumstances; and,
I11(2) The rate on the guaranteed portion of the loan will not exceed the rate on the unguaranteed portion. This requirement does not apply when the unguaranteed rate is variable and the guaranteed portion is fixed.
I11(e) T3Multi-rates.G1T1 When multi-rates are used, the lender will provide the Agency with the overall effective interest rate for the entire loan. Multi-rate loans may be either fixed, variable, or a combination of fixed and variable. When a combination of fixed and variable interest rates are used, the interest rate for the unguaranteed portion will not be lower than the guaranteed portion of the loan.


I80ï¿½1A3575.34
I89Terms of loan repayment.
I11(a) T3General.G1T1 Principal and interest on the loan will be due and payable as provided in the note except, any interest accrued as the result of the borrower's default on the guaranteed loan over and above that which would have accrued at the note rate on the guaranteed loan will not be guaranteed by the Agency. The lender will structure repayments as established in the loan agreement between the lender and borrower. Ordinarily, such installments will be scheduled for payment as agreed upon by the lender and borrower on terms that reasonably ensure repayment of the loan. However, the first installment to include a repayment of principal may be scheduled for payment after the project is operable and has begun to generate income. Such installment must be due and payable within 3 years from the date of the note and at least annually thereafter. Interest will be due at least annually from the date of the note. Monthly ï¿½448ï¿½payments will be required except for borrowers with income limited to less frequent intervals.
I11(b) T3Term length.G1T1 The maximum time allowable for final maturity for a guaranteed CP loan will be limited to the useful life of the facility, not to exceed 40 years.
I11(c) T3Balloon payments.G1T1 The principal balance should be properly amortized within the prescribed loan maturity. Balloon payments at the end of the loan are prohibited.


I80ï¿½1A3575.35ï¿½093575.36
I89[Reserved]


I80ï¿½1A3575.37
I89Insurance and fidelity bonds.
I11The lender must provide evidence that the borrower has adequate insurance and fidelity bond coverage by loan closing or start of construction, whichever occurs first. Adequate coverage must be maintained for the life of the loan and is subject to Agency review and approval.


I80ï¿½1A3575.38ï¿½093575.39
I89[Reserved]


I80ï¿½1A3575.40
I89Equal opportunity and Fair Housing Act requirements.
I11(a) T3Equal Credit Opportunity Act.G1T1 The lender will comply with the requirements of title V of the Equal Credit Opportunity Act (15 U.S.C. 1691 T3et seq.G1T1). (See the Federal Reserve Board Regulation, 12 CFR part 202.)
I11(b) T3Fair Housing Act.G1T1 Certain housing-related projects such as nursing homes, group homes, or assisted-living facilities must comply with the requirements of the Fair Housing Act (42 U.S.C. 3601 T3et seq.G1T1). This includes completion of an Affirmative Fair Housing Marketing Plan and compliance with the Housing and Urban Development accessibility guidelines except for areas open to the public which are covered by the Americans with Disabilities Act (42 U.S.C. 12181 T3et seq.G1T1). The lender will determine that the borrower has a valid plan in effect at all times.


I80ï¿½1A3575.41
I89[Reserved]


I80ï¿½1A3575.42
I89Design and construction requirements.
I11The lender will provide the Agency with a written certification at the end of construction that all funds were utilized for authorized purposes. The borrower and the lender will authorize designs and plans based upon the preliminary architectural and engineering reports or plans approved by the lender and concurred in by the Agency. The borrower will take into consideration any lender or Agency comments when the facility is being designed.
I11(a) T3Architectural and engineering practices.G1T1 All project facilities must be designed utilizing accepted architectural and engineering practices and must conform to applicable Federal, State, and local codes and requirements. The lender must ensure that the planned project will be completed within the available funds and, once completed, will be suitable for the borrower's needs.
I11(b) T3Construction monitoring.G1T1 The lender will monitor the progress of construction and undertake the reviews and inspections necessary to ensure that construction proceeds in accordance with the approved plans, specifications, and contract documents and that funds are used for eligible project costs. The lender must expeditiously report any problems in project development to the Agency.
I11(c) T3Equal employment opportunities.G1T1 For all construction contracts in excess of $10,000, the contractor must comply with Executive Order 11246 entitled ``Equal Employment Opportunity'' as amended and as supplemented by applicable Department of Labor regulations (41 CFR part 60ï¿½091). The borrower and lender are responsible for ensuring that the contractor complies with these requirements.
I11(d) T3Americans with Disabilities Act.G1T1 Community Facilities loans which involve the construction of, or addition to, facilities that accommodate the public and commercial facilities as defined by the Americans with Disabilities Act (42 U.S.C. 12181_T3et seq.G1T1) must comply with that Act. The lender and borrower are responsible for compliance.


I80ï¿½1A3575.43
I89Other Federal, State, and local requirements.
I11In addition to the specific requirements of this subpart and beginning on the date of issuance of the Loan Note ï¿½449ï¿½Guarantee, proposals for facilities financed in whole or in part with a loan guaranteed by the Agency will be coordinated with all appropriate Federal, State, and local agencies. Borrowers and lenders will be required to comply with any Federal, State, or local laws or regulatory commission rules which are in existence and which affect the project including, but not limited to:
I11(a) Organization and authority to design, construct, develop, operate, and maintain the proposed facilities;
I11(b) Borrowing money, giving security, and raising revenues for repayment;
I11(c) Land use zoning;
I11(d) Health, safety, and sanitation standards; and
I11(e) Protection of the environment and consumer affairs.


I80ï¿½1A3575.44ï¿½093575.46
I89[Reserved]


I80ï¿½1A3575.47
I89Economic feasibility requirements.
I11All projects financed under the provisions of this section must be based on taxes, assessments, revenues, fees, or other sources of revenues in an amount sufficient to provide for facility operation and maintenance, a reasonable reserve, and debt payment. Other sources of revenue or guarantors are particularly important in considering the feasibility of recreation-type loans. The lender is responsible for determining the credit quality and economic feasibility of the proposed loan and must address all elements of the credit quality in a written financial feasibility analysis which includes adequacy of equity, cash flow, security, history, and management capabilities. Financial feasibility reports must take into consideration any interest rate adjustment which may be instituted under the terms of the note. The lender's financial credit analysis may also serve as the feasibility analysis when sufficient evidence is included to determine economic feasibility as well as financial viability.
I11(a) T3Financial feasibility.G1T1 The borrower, lender, or other qualified entity must prepare the financial feasibility analysis (suggested financial feasibility guidelines are available in any Agency office) in the following instances:
I11(1) Facilities primarily used for fire and rescue services;
I11(2) Facilities that are not dependent on facility revenues for debt payment;
I11(3) Loans of less than $500,000; or
I11(4) Projects in which the borrower has operated similar facilities on a financially successful basis.
I11(b) T3Utility projects.G1T1 The borrower's consulting engineer may complete the financial feasibility analysis for utility systems.
I11(c) T3Other community facilities.G1T1 Financial feasibility reports for all other facilities must be prepared by a qualified entity not having a direct interest in the management of the facility. The lender may prepare the feasibility study if qualified staff is available.
I11(d) T3Exceptions.G1T1 The Agency loan approval official may exempt the lender from the requirement for an independent financial feasibility report (when requested by the borrower and the lender) provided the approval official determines that the financial feasibility analysis prepared by the borrower fairly represents the financial feasibility of the facility and the financial feasibility analysis contains an accurate projection of the usage, revenues, and expenses of the facility.
I11(e) T3Insufficient information.G1T1 When the lender or Agency has insufficient information to determine the borrower's repayment ability, an independent feasibility analysis is required.


I80ï¿½1A3575.48
I89Security.
I11(a) T3Lender responsibility.G1T1 The lender is responsible for obtaining and maintaining proper and adequate security to protect the interest of the lender, the holder, and the Government.
I11(b) T3Type of security.G1T1 Security must be of such a nature that repayment of the loan is reasonably ensured when considered with the integrity and ability of project management, soundness of the project, and the borrower's prospective earnings. The security may include, but is not limited to, the following: General obligation bonds, revenue bonds, pledge of taxes or assessments, assignment of facility revenue, land, easements, rights-of-way, water rights, buildings, machinery, equipment, accounts receivable, contracts, ï¿½450ï¿½cash, or other accounts or assignments of leases or leasehold interest.
I11(c) T3Separate security.G1T1 All security must secure the entire loan. The lender will not take separate security to secure only the unguaranteed portion of the loan. The lender will not require compensating balances or certificates of deposit as a means of eliminating the lender's exposure on the unguaranteed portion of the loan.


I80ï¿½1A3575.49ï¿½093575.51
I89[Reserved]


I80ï¿½1A3575.52
I89Processing.
I11(a) T3Preapplications.G1T1 (1) The preapplication package must be submitted either alone or the necessary information may be submitted simultaneously with the application. The preapplication package will contain:
I11(i) An Application for Federal Assistance on a form provided by the Agency (available in any Agency office);
I11(ii) State intergovernmental or other type review comments and recommendations for the borrower's project (clearinghouse comments, if applicable);
I11(iii) Supporting documentation necessary to make an eligibility determination such as financial statements, audits, copies of organizational documents, existing debt instruments, etc.; and
I11(iv) Documentation of lender eligibility in accordance with ï¿½1A3575.27.
I11(2) If the Agency determines that the project may meet requirements and is likely to be funded, the lender must submit a complete application if it has not previously submitted one. The Agency must do an environmental review before further processing will be completed.
I11(b) T3Applications.G1T1 Contents of application package:
I11(1) Application for Loan and Guarantee on a form prescribed by the Agency (available in any Agency office);
I11(2) Proposed loan agreement;
I11(3) Request for Environmental Information (available in any Agency office);
I11(4) Preliminary architectural or engineering report;
I11(5) Cost estimates;
I11(6) Appraisal reports (as appropriate);
I11(7) Credit reports;
I11(8) Financial feasibility analysis and report; and
I11(9) Any additional information required.


I80ï¿½1A3575.53
I89Evaluation of application.
I11If the Agency determines that the borrower is eligible, the proposed loan is for an eligible purpose, there is reasonable assurance of repayment ability, sufficient collateral and equity exists, the proposed loan complies with all applicable statutes and regulations, the environmental review is complete and considered in determining compliance, and adequate funds are available, the Agency will provide the lender and the borrower with the Conditional Commitment for Guarantee, listing all conditions for the guarantee. Applicable requirements will include the following:
I11(a) Approved use of guaranteed loan funds (source and use of funds);
I11(b) Rates and terms of the loan;
I11(c) Scheduling of payments;
I11(d) Number of customers;
I11(e) Security and lien priority;
I11(f) Appraisals;
I11(g) Insurance and bonding;
I11(h) Financial reporting;
I11(i) Equal opportunity and nondiscrimination;
I11(j) Environment or mitigation;
I11(k) Americans with Disabilities Act;
I11(l) By-laws and articles of incorporation changes; and
I11(m) Other requirements necessary to protect the Government.


I80ï¿½1A3575.54ï¿½093575.58
I89[Reserved]


I80ï¿½1A3575.59
I89Review of requirements.
I11(a) T3Lender and borrower.G1T1 The lender and borrower must complete and sign the Acceptance of Conditions and return a copy to the Agency as soon as possible. Notwithstanding the preceding sentence, if certain conditions cannot be met, the lender and borrower may propose alternate conditions for Agency consideration.
I11(b) T3Cancellation.G1T1 If the lender decides at any time after receiving a Conditional Commitment for Guarantee that it no longer wants a guarantee, the lender must immediately advise the Agency of the cancellation.
ï¿½451ï¿½I11(c) T3Modifications.G1T1 The lender agrees that once the Conditional Commitment for Guarantee is issued and accepted by the lender and borrower, it will not be modified as to the scope of the project, overall facility concept, project purpose, use of proceeds, or other terms and conditions.


I80ï¿½1A3575.60ï¿½093575.62
I89[Reserved]


I80ï¿½1A3575.63
I89Conditions precedent to issuance of the Loan Note Guarantee.
I11The Loan Note Guarantee will not be issued until:
I11(a) The lender certifies that:
I11(1) No changes have been made in the lender's loan conditions and requirements since the issuance of the Conditional Commitment for Guarantee except those approved in the interim by the Agency in writing.
I11(2) All planned property acquisition has been completed and all development has been substantially completed in accordance with plans, specifications, and applicable building codes. No costs have exceeded the amounts approved by the lender and the Agency.
I11(3) Required insurance is in effect.
I11(4) All equal opportunity and Fair Housing Plan requirements have been met.
I11(5) The loan has been properly closed and the required security instruments have been obtained on any after-acquired property that cannot be covered initially under State statutory provisions.
I11(6) The borrower has marketable title to the collateral then owned by the borrower, subject to the instrument securing the loan to be guaranteed and subject to any other exceptions approved, in writing, by the Agency.
I11(7) When required, the entire amount of the loan for working capital has been disbursed except in cases where the Agency has approved disbursement over an extended time.
I11(8) All other requirements of the Conditional Commitment for Guarantee have been met.
I11(9) Lien priorities are consistent with requirements of the Conditional Commitment for Guarantee.
I11(10) The loan proceeds have been disbursed for purposes and in amounts consistent with the Conditional Commitment for Guarantee and as specified on the application for the guaranteed loan. A copy of a detailed statement by the lender detailing the use of loan funds will be attached to support this certification.
I11(11) There has been no substantive adverse change in the borrower's financial condition nor any other adverse change in the borrower during the period of time from the Agency's issuance of the Conditional Commitment for Guarantee to issuance of the Loan Note Guarantee. The lender's certification must address all adverse changes of the borrower and the guarantors. For purposes of this paragraph, the term borrower includes any parent, affiliate, or subsidiary of the borrower.
I11(12) All Federal, State, and local design and construction requirements have been met.
I11(13) The lender understands and will meet the requirements of the Debt Collection Act (chapter 37 of title 31 of the United States Code).
I11(14) The lender would not make the loan without an Agency guarantee.
I11(b) The lender has executed and delivered the Lender's Agreement and closing report for the guaranteed loan along with the appropriate guarantee fee.
I11(c) The lender has advised the Agency of plans to sell or assign any part of the loan as provided in the Lender's Agreement.
I11(d) Where applicable, the lender must certify that the borrower has obtained:
I11(1) A legal opinion relative to the title to rights-of-way and easements. Lenders are responsible for ensuring that borrowers have obtained valid, continuous, and adequate rights-of-way and easements needed for the construction, operation, and maintenance of a facility.
I11(2) A title opinion or title insurance showing ownership of the land and all mortgages or other lien defects, restrictions, or encumbrances, if any. It is the responsibility of the lender to ensure that the borrower has obtained and recorded such releases, consents, or subordinations to such property rights from holders of outstanding liens or other instruments as may be necessary for the construction, operation, and maintenance of the facility ï¿½452ï¿½and to provide the required security. For example, when a site is for major structures for utility-type facilities (such as a gas distribution system) and the lender and borrower are able to obtain only a right-of-way or easement on such a site rather than a fee simple title, such a title opinion must be requested.
I11(e) For loans exceeding $150,000, the lender has certified its compliance with the Anti-Lobby Act (18 U.S.C. 1913). Also, if any funds have been, or will be, paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this commitment providing for the United States to guarantee a loan, the lender shall completely disclose such lobbying activities in accordance with 31 U.S.C. 1352.
I11(f) If the Loan Note Guarantee cannot be issued before the Conditional Commitment expires, the lender must submit a written request for an extension of the expiration date. The lender must document and certify to paragraph (a)(1) and (a)(11) of this section specifically identifying any modifications.
I11(g) Coincident with, or immediately after, loan closing, the lender will contact the Agency and provide those documents and certifications required in this section. For loans to public bodies, lenders may require an opinion from recognized bond counsel regarding the adequacy of the preparation and issuance of the debt instruments. Only when the Agency is satisfied that all conditions for the guarantee have been met will the Loan Note Guarantee be executed.


I80ï¿½1A3575.64
I89Issuance of Lender's Agreement, Loan Note Guarantee, and Assignment Guarantee Agreement.
I11(a) T3Lender's Agreement.G1T1 If the Agency finds that all requirements have been met, the lender and the Agency will execute the Lender's Agreement. The original will be retained by the Agency and a signed duplicate original will be retained by the lender. A separate Lender's Agreement must be executed for each loan to be guaranteed by the Agency.
I11(b) T3Loan Note Guarantee.G1T1 (1) Upon receipt of the executed Lender's Agreement and after all requirements have been met, the Agency will execute the Loan Note Guarantee. All originals of the Loan Note Guarantee will be provided to the lender and attached to the note.
I11(2) If the lender has selected the multi-note system, a Loan Note Guarantee will be prepared and attached to each note the borrower issues. All the notes will be listed on the Loan Note Guarantee. Not more than ten notes will be issued for the guaranteed portion (unless the Agency and borrower agree otherwise) and one note issued for the unguaranteed portion.
I11(c) T3Assignment of guarantee.G1T1 In the event the lender assigns the guaranteed portion of the loan to a holder, the lender, holder, and Agency will execute an Agency prescribed Assignment Guarantee Agreement.
I11(d) T3Failure to meet conditions.G1T1 If the Agency determines that it cannot execute the Loan Note Guarantee because all requirements have not been met, the lender will have a reasonable period within which to satisfy the objections. If the lender satisfies the objections within the time allowed, the guarantee will be issued.
I11(e) T3Loan closing report.G1T1 The lender will prepare and deliver a guaranteed loan closing report for each loan to be guaranteed and a guarantee fee to the Agency in return for the Loan Note Guarantee.


I80ï¿½1A3575.65
I89Lender's sale or assignment of the guaranteed portion of loan.
I11The lender may retain all of the guaranteed loan. The lender must not sell or participate any amount of the guaranteed or non-guaranteed portion of the loan to the borrower or to members of the borrower's immediate families, the borrower's officers, directors, stockholders, other owners, or a subsidiary or affiliate. Disposition of the guaranteed portion of a loan may not be made prior to full disbursement, completion of construction, and acquisition of real estate and equipment without the prior written approval of the Agency. If the lender desires to ï¿½453ï¿½market all or part of the guaranteed portion of the loan at, or subsequent to, loan closing, the loan must not be in default.
I11(a) T3Assignment.G1T1 Any sale or assignment by the lender of the guaranteed portion of the loan must be accomplished in accordance with the conditions in the Lender's Agreement.
I11(b) T3Participation.G1T1 The lender may obtain participation in the loan under its normal operating procedures.
I11(c) T3Minimum retention.G1T1 The lender is required to hold in its own portfolio or retain a minimum of 5 percent of the total loan amount. This amount must be of the non-guaranteed portion of the loan and cannot be participated to another. The lender may sell the remaining amount of the non-guaranteed portion of the loan only through participation.


I80ï¿½1A3575.66ï¿½093575.68
I89[Reserved]


I80ï¿½1A3575.69
I89Loan servicing.
I11(a) T3Lender responsibilities.G1T1 The lender is responsible for servicing the entire loan in accordance with the lender's loan agreement. The unguaranteed portion of the loan will not be paid first nor given any preference or priority over the guaranteed portion of the loan. The lender is responsible for taking all servicing actions that a prudent lender would perform in servicing a portfolio of loans that are not guaranteed. This responsibility includes, but is not limited to, the collection of payments; obtaining compliance with the covenants and provisions in the note, loan agreement, security instrument, or any supplemental agreements; obtaining and analyzing financial statements; verifying the payment of taxes and insurance premiums; and maintaining liens on collateral. The lender must notify the Agency of any violation of the loan agreement with the borrower within 30 days of such violation.
I11(b) T3Financial reports.G1T1 The lender must obtain the financial statements required by the Loan Agreement. The lender must submit the borrower's annual financial statements to the Agency within 120 days of the end of the borrower's fiscal year. The lender must analyze the financial statements and provide the Agency with a written summary of the lender's analysis and conclusions, including trends, strengths, weaknesses, extraordinary transactions, and other indications of the financial condition of the borrower. Additionally, when applicable, the lender will require an audit in accordance with Office of Management and Budget (OMB) circulars (available in any Agency office).
I11(c) T3Delinquent loans.G1T1 The lender will service delinquent loans in accordance with the Lender's Agreement and reasonable and prudent lending standards.
I11(d) T3Loan balances.G1T1 The lender must report to the Agency the outstanding principal and interest balance on each guaranteed loan semiannually.
I11(e) T3Collateral inspections.G1T1 The lender will inspect the collateral as often as necessary to properly service the loan.


I80ï¿½1A3575.70ï¿½093575.72
I89[Reserved]


I80ï¿½1A3575.73
I89Replacement of loss, theft, destruction, mutilation, or defacement of Loan Note Guarantee or Assignment Guarantee Agreement.
I11(a) T3Replacement of Loan Note Guarantee.G1T1 The Agency may issue a replacement Loan Note Guarantee or Assignment Guarantee Agreement which may have been lost, stolen, destroyed, mutilated, or defaced to the lender or holder upon receipt of a certificate of loss and an indemnity bond in accordance with this section.
I11(b) T3Lender responsibilities.G1T1 When a Loan Note Guarantee or Assignment Guarantee Agreement is lost, stolen, destroyed, mutilated, or defaced while in the custody of the lender or holder, the lender will coordinate the activities of the party who seeks the replacement documents and will submit the required documents to the Agency for processing. The requirements for replacement are as follows:
I11(1) A certificate of loss properly notarized which includes:
I11(i) Legal name and present address of either the lender or the holder who is requesting the replacement forms;
I11(ii) Legal name and address of the lender of record;
I11(iii) Capacity of person certifying;
I11(iv) Full identification of the Loan Note Guarantee or Assignment Guarantee Agreement, including the name ï¿½454ï¿½of the borrower, Agency case number, date of the Loan Note Guarantee, Assignment Guarantee Agreement, face amount of the evidence of debt purchased, date of evidence of debt, present balance of the loan, percentages of guarantee and, if Assignment Guarantee Agreement, the original named holder and the percentage of the guaranteed portion of the loan assigned to that holder. Any existing parts of the document to be replaced must be attached to the certificate;
I11(v) A full statement of circumstances of the loss, theft, or destruction of the Loan Note Guarantee or Assignment Guarantee Agreement; and
I11(vi) The holder shall present evidence demonstrating current ownership of the Loan Note Guarantee and Note or Assignment Guarantee Agreement. If the present holder is not the same as the original holder, a copy of the endorsement of each successive holder in the chain of transfer from the initial holder to present holder must be included. If copies of the endorsement cannot be obtained, best available records of transfer must be presented to the Agency (e.g., order confirmation, canceled checks, etc.).
I11(2) An indemnity bond acceptable to the Agency shall accompany the request for replacement except when the holder is the United States, a Federal Reserve Bank, a Federal Government corporation, a State or Territory, or the District of Columbia.
I11(3) All indemnity bonds must be issued and payable to the United States of America. The bond shall be in an amount not less than the unpaid principal and interest. The bond shall hold the Government harmless against any claim or demand which might arise or against any damage, loss, costs, or expenses which might be sustained or incurred by reasons of the loss or replacement of the instruments.


I80ï¿½1A3575.74
I89[Reserved]


I80ï¿½1A3575.75
I89Defaults by borrower.
I11(a) T3Lender notification to Agency.G1T1 The lender must notify the Agency when a borrower is 30 days past due on a payment, has not met its responsibilities of providing the required financial statements, or is otherwise in default. The lender will continue to keep the Agency informed on a bimonthly basis until such time as the loan is no longer in default. If a monetary default exceeds 60 days, the lender will arrange a meeting with the borrower to resolve the default. The lender will provide a summary of the meeting and any decisions or actions agreed upon.
I11(b) T3Servicing options.G1T1 In considering servicing options, the prospects for providing a permanent cure without adversely affecting the risks to the Agency and the lender must be the paramount objective. Temporary curative actions (such as payment deferments or collateral subordination) must strengthen the loan and be in the best financial interest of the lender and the Agency. Some of these actions may require concurrence of the holder.
I11(c) T3Multi-note.G1T1 If the loan was closed with the multi-note option, the lender may need to possess all notes to take some servicing actions. In those situations when the Agency is holder of some of the notes, the Agency may endorse the notes back to the lender, provided a proper receipt is received from the lender which defines the reason for the transfer. Under no circumstances will the Agency endorse the original Loan Note Guarantee to the lender.


I80ï¿½1A3575.76ï¿½093575.77
I89[Reserved]


I80ï¿½1A3575.78
I89Repurchase of loan.
I11(a) T3Repurchase by lender.G1T1 The lender has the option to repurchase the loan from a holder within 30 days of written demand from the holder when the borrower is in default not less than 60 days on payment. The repurchase will be for an amount equal to the unpaid guaranteed portion of principal and accrued interest less the lender's servicing fee. The guarantee does not cover the note interest to the holder on the guaranteed loan accruing after 90 days from the date of the demand letter to the lender. The holder will concurrently send a copy of the demand to the Agency. The lender will accept an assignment without recourse from the holder upon repurchase. The lender is encouraged to repurchase the loan to facilitate the accounting of funds, resolve the problem, and permit the borrower to cure the default, where reasonable. ï¿½455ï¿½The lender will notify the holder and the Agency of its decision within 30 days of receipt of demand from the holder.
I11(b) T3Agency repurchase.G1T1 (1) If the lender does not repurchase as provided in paragraph (a) of this section, the Agency will purchase from the holder the unpaid principal balance of the guaranteed portion together with accrued interest to date of repurchase (less the lender's servicing fee) within 30 days after written demand to the Agency. The guarantee will not cover the note interest to the holder on the guaranteed loan accruing after 90 days from the date of the original demand letter. The lender shall not charge the Agency any servicing fees nor are any such fees collectible from the Agency.
I11(2) The holder's demand to the Agency must include a copy of the written demand made upon the lender. The holder or duly authorized agent must also include evidence of the right to require payment from the Agency. Such evidence will consist of either the original of the Loan Note Guarantee properly endorsed to the Agency or the original of the Assignment Guarantee Agreement properly assigned to the Agency without recourse including all rights, title, and interest in the loan. The Agency will be subrogated to all rights of the holder. The holder must include in the demand the amount due including unpaid principal, unpaid interest to date of demand, and interest subsequently accruing from the date of demand to the proposed payment date. Unless otherwise agreed to by the Agency, such proposed payment will not be later than 30 days from the date of demand.
I11(3) The lender must promptly provide the Agency with the information necessary for the Agency's determination of the appropriate amount due the holder upon the Agency's notification to the lender of the holder's demand for payment. This information must be certified by an authorized officer of the lender. Any discrepancy between the amount claimed by the holder and the information submitted by the lender must be resolved before payment will be approved. The Agency will notify both parties and such conflict will suspend the running of the 30-day payment requirement.
I11(4) Any purchase by the Agency does not change, alter, or modify any of the lender's obligations to the Agency arising from the loan or guarantee nor does it waive any of the Agency's rights against the lender. The Agency may set off against the lender all rights inuring to the Agency as the holder of the instrument against the Agency's obligation to the lender under the Loan Note Guarantee.
I11(c) T3Repurchase for servicing.G1T1 When the lender determines that repurchase of the guaranteed portion of the loan is necessary to service the loan, the holder must sell the guaranteed portion to the lender for the unpaid principal and interest balance (less the lender's servicing fee). The guarantee does not cover interest accruing after 90 days from the date the lender's or Agency's letter requesting the holder to tender its guaranteed portion. The lender must not repurchase from the holder for arbitrage purposes to further its own financial gain. Any repurchase must be made only after the lender obtains the Agency written approval. If the lender does not repurchase the portion from the holder, the Agency may, at its option, purchase such guaranteed portion for servicing purposes.


I80ï¿½1A3575.79
I89[Reserved]


I80ï¿½1A3575.80
I89Interest rate changes after loan closing.
I11(a) T3General.G1T1 Subject to the restrictions below, the borrower, lender, and holder (if any) may collectively effect a permanent reduction in the interest rate on the guaranteed loan at any time during the life of the loan on written agreement by all of the applicable parties. After such a permanent reduction, the Loan Note Guarantee will only cover losses of interest at the reduced interest rate. The Agency must be notified by the lender, in writing, within 10 calendar days of the change. When the Agency is a holder, it will concur only when it is demonstrated that the change is more viable than liquidation and that the Government's financial interests are not adversely affected. Factors which will be considered in making such determination are ï¿½456ï¿½the Government's cost of borrowing money and the project's enhancement of rural development. The monetary recovery must be greater than the liquidation recovery, and a financial feasibility analysis must show the project's continued viability.
I11(1) Fixed rates cannot be changed to variable rates to reduce the interest rate to the borrower unless the variable rate has a ceiling which is less than the original fixed rate.
I11(2) Variable rates can be changed to a lower fixed rate. In a final loss settlement when qualifying rate changes are made with the required written agreements and notification, the interest will be calculated for the periods the given rates were in effect. The lender must maintain records which adequately document the accrued interest claimed.
I11(3) The lender is responsible for the legal documentation of interest rate changes. However, the lender may not issue a new note.
I11(b) T3Increases.G1T1 No increases in interest rates will be permitted under the loan guarantee except the normal fluctuations in approved variable interest rate loans.


I80ï¿½1A3575.81
I89Liquidation.
I11Liquidation will occur when the lender concludes that liquidation of the guaranteed loan is necessary because of default or third party actions that the borrower cannot, or will not, cure or eliminate within a reasonable period of time and the Agency concurs with the lender; or the Agency, at any time, independently concludes that liquidation is necessary. The lender will proceed as expeditiously as possible, including giving any notices or taking any legal actions required by the security instruments.
I11(a) T3General.G1T1 If a lender has made a loan guaranteed by the Agency under previous regulations, the lender has the option to liquidate the loan under the provisions of this subpart or under the provisions of previous regulations. The lender will notify the Agency in writing within 10 days after its decision to liquidate, which regulatory provisions it chooses to use. The lender may not choose some provisions of one regulation and other provisions of the other regulation.
I11(b) T3Acquiring property titles.G1T1 If a lender acquires title to property, the Agency may elect to permit the lender the option of calculating the final loss settlement using the net proceeds received at the time of the ultimate disposition of the property. The lender must submit to the Agency a written request to use this option within 15 days of acquiring title and the Agency must agree, in writing, prior to the lender submitting any request for estimated loss payment.
I11(c) T3Liquidation plan.G1T1 The lender will (within 30 days after a decision to liquidate) submit to the Agency, in writing, a proposed, detailed liquidation plan. Upon approval by the Agency of the liquidation plan, the lender will commence liquidation. The lender's liquidation plan must include, but is not limited to, the following:
I11(1) Such proof as the Agency requires to establish the lender's ownership of the guaranteed loan notes and related security instruments, a copy of the payment ledger or other documentation which reflects the outstanding loan balance and accrued interest to date, and the method of computing the interest;
I11(2) A complete list of collateral;
I11(3) The recommended liquidation methods for making the maximum collection possible on the indebtedness and the justification for such methods, including the recommended action for acquiring and disposing of all collateral;
I11(4) Necessary steps for preservation of the collateral;
I11(5) Copies of the borrower's latest available financial statements;
I11(6) An itemized list of estimated liquidation expenses expected to be incurred and justification for each expense;
I11(7) A schedule to periodically report to the Agency on the progress of the liquidation;
I11(8) Estimated protective advance amounts with justification;
I11(9) Proposed protective bid amounts on collateral to be sold at auction and a discussion of how the amounts were determined;
ï¿½457ï¿½I11(10) If a voluntary conveyance is considered, the proposed amount to be credited to the guaranteed debt;
I11(11) Legal opinions, as needed; and
I11(12) If the outstanding balance of principal and interest is less than $250,000, the lender will obtain an estimate of fair market and potential liquidation value of the collateral. If the outstanding balance of principal and interest is $250,000 or more, the lender will obtain an independent appraisal report on all collateral securing the loan which will reflect the fair market value and potential liquidation value. The independent appraiser's fee will be shared equally by the Agency and the lender.
I11(d) T3Partial liquidation plan.G1T1 If actions are necessary to immediately preserve and protect the collateral, a partial liquidation plan may be submitted and, when approved, must be followed by a complete liquidation plan prepared by the lender.
I11(e) T3Disposition of collateral.G1T1 Disposition of collateral acquired by the lender must be approved, in writing, by the Agency when:
I11(1) The lender's cost to acquire the collateral of a borrower exceeds the potential recovery value of the security and the lender proposes abandoning the collateral in lieu of liquidation; or
I11(2) The acquired collateral is to be sold to the borrower, borrower's stockholders or officers, or the lender or lender's stockholders or officers.
I11(f) T3Agency liquidation.G1T1 The Agency will liquidate at its option only when it is a holder and there is reason to believe the lender is not likely to initiate liquidation efforts that will result in maximum recovery. When the Agency liquidates, reasonable liquidation expenses will be assessed against the proceeds derived from the sale of the collateral.
I11(g) T3Final loss payment.G1T1 Final loss payments will be made only after all collateral has been properly accounted for and liquidation expenses are determined to be reasonable and within approved limits. Any estimated loss payments made to the lender will be credited against the final loss on the guaranteed loan. The amount of an estimated loss payment must be credited as a deduction from the principal balance of the loan.


I80ï¿½1A3575.82
I89[Reserved]


I80ï¿½1A3575.83
I89Protective advances.
I11Protective advances can only be added to the loan account for purposes of requirements to preserve the value of the security. Protective advances constitute an indebtedness of the borrower to the lender and must be secured by collateral to the same extent as principal and interest. Protective advances include, but are not limited to, advances made for taxes, annual assessments, ground rent, hazard and flood insurance premiums affecting the collateral (including any other expenses necessary to protect the collateral). Attorney fees are not a protective advance.
I11(a) T3Agency approval.G1T1 The Agency must approve, in writing, all protective advances on loans within its loan approval authority which exceed a total cumulative advance amount of $5,000 to the same borrower. Protective advances must be reasonable when associated with the value of the collateral being preserved.
I11(b) T3Preserving collateral.G1T1 When considering protective advances, sound judgment must be exercised in determining that the additional funds advanced will actually preserve collateral and recovery is actually enhanced by making the advance.


I80ï¿½1A3575.84
I89Additional loans or advances.
I11The lender will not make additional expenditures or new loans to the borrower without first obtaining the written approval of the Agency even though such expenditures or loans will not be guaranteed.


I80ï¿½1A3575.85
I89Bankruptcy.
I11(a) T3Calculating losses.G1T1 Report of Loss form (available in any Agency office) will be used for calculating estimated and final loss determinations.
I11(b) T3Lender responsibility.G1T1 The lender is responsible for protecting the guaranteed loan debt and all the collateral securing it in bankruptcy proceedings. These responsibilities include, but are not limited to, the following:
ï¿½458ï¿½I11(1) Filing a proof of claim, where necessary, and all necessary papers and pleadings;
I11(2) Attending and, where necessary, participating in meetings of the creditors and all court proceedings;
I11(3) Immediately seeking adequate protection of the collateral if it is subject to being used by the trustee in bankruptcy or the debtor in possession;
I11(4) Where appropriate, seeking involuntary conversion of a pending chapter 11 case to a liquidation proceeding or seeking dismissal of the proceedings; and
I11(5) Keeping the Agency adequately and regularly informed, in writing, of all aspects of the proceedings.
I11(c) T3Appraisals.G1T1 In a chapter 9 or chapter 11 reorganization, the lender must obtain an independent appraisal of the collateral if the Agency believes an independent appraisal is necessary. The Agency and the lender will share the appraisal fee equally.
I11(d) T3Liquidation expenses.G1T1 Only expenses authorized by the court of chapter 11 reorganizations, or chapters 11 or 7 liquidation (unless the liquidation is by the lender), may be deducted from the collateral proceeds.
I11(e) T3Repurchase from the holder.G1T1 The Agency or the lender, with the approval of the Agency, may initiate the repurchase of the unpaid guaranteed portion of the loan from the holder. If the lender is the holder, an estimated loss payment may be filed at the initiation of a chapter 7 proceeding or after a chapter 11 proceeding becomes a liquidation proceeding. Any loss payment on loans in bankruptcy must be approved by the Agency.
I11(f) T3Chapter 11 bankruptcy.G1T1 If a borrower has filed for protection under chapter 11 of the United States Code for a reorganization (but not chapter 13) and all or a portion of the debt has been discharged, the lender may request an estimated loss payment of the guaranteed portion of the accrued interest and principal discharged by the court. If the court approves revisions to the chapter 11 reorganization plan, subsequent estimated loss payments may be requested in accordance with the court approved changes. Once the reorganization plan has been satisfactorily completed, the lender is responsible for submitting the documentation necessary for the Agency to review and adjust the estimated loss claim to reflect any actual discharge of principal and interest and to reimburse the lender for any court ordered interest-rate reduction under the terms of the reorganization plan.
I11(g) T3Agency approval of estimated liquidation expenses.G1T1 The Agency must approve, in advance and in writing, the lender's estimated liquidation expenses of collateral in a liquidation if the liquidation is performed by the lender. These expenses must be reasonable and customary and not include in-house expenses of the lender.
I11(h) T3Reconciliation.G1T1 In the event that the estimated loss payment exceeds the actual loss, the lender will reimburse the Agency the amount in excess of the actual loss plus interest at the note rate from the date of the estimated loss payment.


I80ï¿½1A3575.86ï¿½093575.87
I89[Reserved]


I80ï¿½1A3575.88
I89Transfers and assumptions.
I11(a) T3General.G1T1 For all transfers and assumptions, the lender must concur in the plans for disposition of funds in the transferor's debt service, reserve, and operation and maintenance account. The Agency will approve, in writing, transfers and assumptions of loans to transferees who will continue the original purpose of the guaranteed loan subject to the following applicable provisions:
I11(1) When the transaction is to a member of the borrower's organization, it will be at an amount which will not result in a loss to the lender.
I11(2) Transfers to eligible borrowers will receive preference if recovery to the lender from the sale price is not less than it would be if the transfer was to an ineligible borrower.
I11(3) The present borrower is unable or unwilling to accomplish the objectives of the guaranteed loan, and the transfer will be to the lender's and Agency's advantage.
I11(4) The transferee will assume an amount at least equal to either the present market value or the debt, whichever is less.
ï¿½459ï¿½I11(b) T3Transfers to an eligible borrower.G1T1 (1) The total indebtedness may be transferred to an eligible borrower on the same terms.
I11(2) The total indebtedness may be transferred to another eligible borrower on different terms not to exceed those terms for which an initial guaranteed loan can be made.
I11(3) Less than the total indebtedness may be transferred to another eligible borrower on the same or different terms and the pro rata share of any eligible loss paid to the lender.
I11(4) A guaranteed loan for which the transferee is eligible may be made in connection with a transfer subject to the policies and procedures governing the type of loan being made.
I11(5) If the transferor is to receive a payment for the equity, the total debt must be assumed.
I11(c) T3Ineligible borrower.G1T1 Transfers to ineligible borrowers are considered only when needed as a method for servicing problem cases when an eligible transferee is not available. Transfers should not be considered as a means by which members can obtain equity or as a method of providing a source of easy credit for purchasers. Transfers must meet the following requirements:
I11(1) All transfers to ineligible borrowers will include a one-time nonrefundable transfer fee to the Agency of no more than one percent. Transfer fees will be collected, and payments applied, in accordance with paragraph (d) of this section.
I11(2) For all loans covered by this subpart, the Agency may approve a transfer of indebtedness to, and assumption of, a loan by a transferee who does not meet the eligibility requirements for the kind of loan being assumed when the ineligible borrower will:
I11(i) Make a significant down payment, and
I11(ii) Agree to pay the remaining balance within not more than 15 years. Installments will be at least equal to the amount amortized over a period not greater than the remaining life of the debt being transferred, and the balance will be due the fifteenth year.
I11(3) Interest rates to ineligible transferees will be the rate specified in the note of the transferor or the rates customarily charged borrowers in similar circumstances in the ordinary course of business and are subject to Agency review and approval. The rates may be either fixed or variable.
I11(i) Transferees must have the ability to repay as determined by the lender the debt according to the Assumption Agreement and must have the legal authority to enter into the contract. The transferee will submit a current balance sheet to the lender. The lender will obtain and analyze the credit history of the transferee.
I11(ii) The transferor may receive equity payments only when the full amount of the debt is assumed. However, equity payments will not be made on more favorable terms than those on which the balance of the debt will be paid.
I11(d) T3Transfer fees.G1T1 Transfer fees are a one-time nonrefundable cost to be collected by the lender at the time of application or proposal.
I11(1) The transfer fees will be a standard fee plus the cost of the appraisal.
I11(2) The lender will collect and submit the fee to the Agency.
I11(3) The Agency may waive the transfer fee if it determines that such waiver is in the best interest of the Agency.
I11(e) T3Processing transfers and assumptions.G1T1 (1) In any transfer and assumption case, the transferor (including any guarantor) may be released from liability by the lender only with prior Agency written concurrence and only when the value of the collateral being transferred is at least equal to the amount of the loan, or part of the loan, being assumed. If the transfer is for less than the entire debt:
I11(i) The Agency must determine that the transferor and any guarantor have no reasonable debt-paying ability considering their assets and income at the time of transfer, and
I11(ii) The lender must certify that the transferor has cooperated in good faith, used due diligence to maintain the collateral against loss, and has otherwise fulfilled all of the regulations of this subpart to the best of the borrower's ability.
I11(2) The lender will make, in all cases, a complete credit analysis to determine viability of the project (subject to the Agency review and approval) including any requirement for deposit in ï¿½460ï¿½an escrow account as security to meet the determined equity requirements for the project.
I11(3) The lender will confirm that the transaction can be properly transferred and the conveyance instruments will be filed, registered, or recorded as appropriate and legally permissible.
I11(4) The assumption will be made on the lender's form of Assumption Agreement and will contain the Agency case number of the transferor and transferee.
I11(5) Loan terms cannot be changed by the Assumption Agreement unless previously approved in writing by the Agency with the concurrence of holder and the transferor (including guarantor if it has not been released from personal liability). Any new loan terms cannot exceed those authorized in this subpart. The lender's request will be supported by:
I11(i) An explanation of the reasons for the proposed change in the loan terms, and
I11(ii) Certification that the lien position securing the guaranteed loan will be maintained or improved, and proper hazard insurance will be continued in effect.
I11(6) In the case of a transfer and assumption, it is the lender's responsibility to see that all such transfers and assumptions will be noted on all originals of the Loan Note Guarantee. The lender will provide the Agency a copy of the Transfer and Assumption Agreement.
I11(7) If a loss should occur upon a complete transfer of assets and assumption for less than the full amount of the debt and the transferor-debtor (including personal guarantor) is released from personal liability (as provided in paragraph (e) of this section), the lender (if holding the guaranteed portion) may file an estimated Report of Loss to recover their pro rata share of the actual loss at that time. Approved protective advances and accrued interest made during the arrangement of a transfer and assumption, if not assumed by the transferee, will be entered on the estimated Report of Loss.


I80ï¿½1A3575.89
I89Mergers.
I11(a) T3General.G1T1 The Agency may approve mergers or consolidations (herein referred to as ``mergers'') when the resulting organization will be eligible for an Agency guaranteed loan and assumes all the liabilities and acquires all the assets of the merged borrower. Mergers may be approved when:
I11(1) The merger is in the best interest of the Government and the merging borrower;
I11(2) The resulting borrower can meet all required conditions as contained in specific loan note agreements; and
I11(3) All property can be legally transferred to the resulting borrower.
I11(b) T3Distinguishing mergers from transfers and assumptions.G1T1 Mergers occur when one entity combines with another entity in such a way that the first entity ceases to exist as a separate entity while the other continues. In a consolidation, two or more entities combine to form a new, consolidated entity with the original entity ceasing to exist. Such transactions must be distinguished from transfers and assumptions in which a transferor will not necessarily go out of existence, and the transferee will not always take all the transferor's assets nor assume all the transferor's liabilities.


I80ï¿½1A3575.90
I89Disposition of acquired property.
I11(a) T3General.G1T1 When the lender acquires title to the collateral and the final loss claim is not paid until final disposition, the lender must proceed as quickly as possible to develop a plan to fully protect the collateral, and the lender must dispose of the collateral without delay.
I11(b) T3Re-title collateral.G1T1 Any collateral accepted by the lender T3must notG1T1 be titled in the Agency's name in whole or in part. The Agency's position is that of a guarantor relating to losses, not a lender.
I11(c) T3Collateral preservation.G1T1 After acquiring the collateral, the lender must protect the collateral from deterioration (weather, vandalism, etc.). Hazard insurance in an amount necessary to cover the fair market value of the collateral must be maintained.
I11(d) T3Collateral sale.G1T1 (1) The lender will prepare and submit to the Agency a plan on the best method of sale, keeping in mind any prospective purchasers. The Agency must approve the ï¿½461ï¿½plan in writing. If an existing approved liquidation plan addresses the disposition of acquired property, no further review is required unless modification of the plan is needed.
I11(2) Anytime there is a case when the conversion of collateral to cash can reasonably be expected to result in a negative net recovery amount, abandonment of the collateral should be considered. The Agency must approve abandonment in writing.


I80ï¿½1A3575.91ï¿½093575.93
I89[Reserved]


I80ï¿½1A3575.94
I89Determination and payment of loss.
I11In all liquidation cases, final settlement will be made with the lender after the collateral is liquidated. The Agency will have the right to recover losses paid under the guarantee from any liable party.
I11(a) T3General.G1T1 If the lender takes title to collateral, any loss will be based on the collateral value at the time the lender obtains title.
I11(b) T3Loss calculations.G1T1 The Report of Loss form (available in any Agency office) will be used for calculations of all estimated and final loss determinations. Estimated loss payments may only be approved after the lender has submitted a liquidation plan approved by the Agency.
I11(c) T3Estimated loss payments.G1T1 When the lender is conducting the liquidation and owns any of the guaranteed portion of the loan, it may request an estimated loss payment by submitting an estimate of loss that will occur in connection with liquidation of the loan. An estimated loss payment may be approved after the Agency has approved the liquidation plan.
I11(1) The lender will prepare and submit a Report of Loss using the appraised value in lieu of amount received from sale of collateral.
I11(2) The estimated loss payment shall be calculated as of the date of such payment. The total amount of the loss payment remitted by the Agency will be applied by the lender on the guaranteed portion of the loan debt. Such application does not release the borrower from liability. At the time of final loss settlement, the lender may notify the borrower that the loss payment has been so applied.
I11(3) After liquidation has been completed, a final Report of Loss will be submitted by the lender to the Agency.
I11(d) T3Final report of loss.G1T1 In all cases, a final Report of Loss must be submitted to the Agency. Before Agency approval of any final loss report, the lender must account for all funds obtained, disposition of the collateral, all costs incurred, and any other information necessary for the successful completion of liquidation. Upon receipt of the final accounting and Report of Loss, the Agency may conduct an may audit and will determine the final loss. The lender will make its records available to, and otherwise assist, the Agency in making any audit it requires of the Report of Loss. The documentation accompanying the Report of Loss must support the loss claimed.
I11(1) The lender must document and show that all of the collateral has been accounted for and properly liquidated and that liquidation proceeds have been properly accounted for and applied correctly on the loan. The Agency must be satisfied that the lender has accomplished this in the manner contained herein and that the lender has maximized the collections in conducting the liquidation.
I11(2) The lender must show a breakdown on any protective advance amount as to the payee, purpose of the expenditure, date paid, evidence that the amount expended was proper, and that the amount was actually paid.
I11(3) The lender must show a breakdown of liquidation expenses as to the payee, purpose of the expenditure, date paid, evidence that the amount expended was proper, and that the amount was actually paid.
I11(4) Accrued interest should be supported by attachments showing how the amount was accrued by the lender. A copy of the promissory note and ledger will be attached. If the interest rate was a variable rate, the lender must include documentation of changes in the selected base rate and when the changes in the loan rate became effective.
I11(e) T3Liquidation income.G1T1 Any net rental or other income that has been received ï¿½462ï¿½by the lender from the collateral will be applied on the guaranteed loan debt.
I11(f) T3Liquidation costs.G1T1 Certain reasonable liquidation costs will be allowed during the liquidation process. The liquidation costs must be submitted as a part of the liquidation plan. Such costs will be deducted from gross proceeds received from the disposition of collateral unless the costs have been previously determined by the lender (with Agency concurrence) to be protective advances. If changed circumstances after submission of the liquidation plan require a revision of liquidation costs, the lender will obtain the Agency's written concurrence prior to proceeding with the proposed changes. No in-house expenses of the lender will be allowed.
I11(g) T3Protective advance losses.G1T1 In those instances where the lender made authorized protective advances, the lender may claim recovery for the guaranteed portion of any loss of monies advanced as well as interest resulting from such protective advances. These claims shall be included in the final Report of Loss.
I11(h) T3Final loss approval.G1T1 After the final Report of Loss has been tentatively approved:
I11(1) If the actual loss is greater than any estimated loss payment, such loss will be paid by the Agency;
I11(2) If the actual loss is less than any estimated loss payment, the lender will reimburse the Agency;
I11(3) If the Agency conducted the liquidation, it will provide an accounting to the lender and will pay the lender in accordance with the Loan Note Guarantee.
I11(i) T3Loss limits.G1T1 The amount payable by the Agency to the lender cannot exceed the limits contained in the Loan Note Guarantee. If the Agency conducts the liquidation, loss occasioned by accruing interest will be covered by the guarantee only to the date the Agency accepts this responsibility. When the liquidation is conducted by the lender, loss occasioned by accruing interest will be covered to the extent of the guarantee to the date of final settlement provided the lender proceeds expeditiously with the liquidation plan approved by the Agency.


I80ï¿½1A3575.95
I89Future recovery.
I11After a loan has been liquidated and a final loss has been paid by the Agency, any future funds which may be recovered by the lender will be pro-rated between the Agency and the lender in accordance with the guaranteed percentage even if the Loan Note Guarantee has been terminated.


I80ï¿½1A3575.96
I89Termination of Loan Note Guarantee.
I11The Loan Note Guarantee under this subpart will terminate automatically:
I11(a) Upon full payment of the guaranteed loan; or
I11(b) Upon full payment of any loss obligation or negotiated loss settlement except for future recovery provisions; or
I11(c) Upon written request from the lender to the Agency, provided that the lender holds all of the guaranteed portion and the original Loan Note Guarantee is returned to the Agency.


I80ï¿½1A3575.97ï¿½093575.99
I89[Reserved]


I80ï¿½1A3575.100
I89OMB control number.
I11The report and recordkeeping requirements contained in this regulation have been approved by the Office of Management and Budget and have been assigned OMB control number 0575ï¿½090137.
S8006I56Subpart B[Reserved]
S8010
F8008I327 CFR Ch. XXXVI (1ï¿½091ï¿½0900 Edition)
I33National Agriculutral Statistics Service, USDA 


ï¿½463ï¿½I04CHAPTER XXXVI_NATIONAL AGRICULTURAL STATISTICS SERVICE, DEPARTMENT OF AGRICULTURE
I03
I87Part
I88Page
I483600
I49Organization and functions
I59465
I483601
I49Availability of information to the public
I59467


F80103I327 CFR Ch. XXXVI (1ï¿½091ï¿½0900 Edition)
I33National Agriculutral Statistics Service, USDA 

ï¿½465ï¿½I95Pt. 3600
I52PART 3600_ORGANIZATION AND FUNCTIONS
S8006I18Sec.
S8010I263600.1General.
I263600.2Organization.
I263600.3Functions.
I263600.4Authority to act for the Administrator.
Q02I26T5T4Appendix A to PartG1T5 3600_T4List of State Statistical OfficesG1T5

Q04I21T5Authority:  T15 U.S.C. 301 and 552: and 7 CFR 2.85.
Q04I21T5Source:  T160 FR 57534, Nov. 16, 1995, unless otherwise noted.

I80ï¿½1A3600.1 
I89General.
I11The National Agricultural Statistics Service (NASS) was established on April 17, 1986, by Secretary's Memorandum 1020ï¿½0924, which renamed the Statistical Reporting Service concurrent with an internal restructuring. Primary NASS responsibilities are development and dissemination of national and State agricultural statistics, statistical research, and coordination of Department statistical programs.

I80ï¿½1A3600.2 
I89Organization.
I11The headquarters organization consists of: The Administrator and Associate Administrator; Deputy Administrator for Field Operations; Four Divisions: Estimates, Survey Management, Research, and Systems and Information; and the Agricultural Statistics Board. In the field, each of the 45 State Statistical Offices, serving the 50 States, is under a State Statistician.

I80ï¿½1A3600.3 
I89Functions.
I11(a) T3Administrator.G1T1 The Administrator is responsible for the formulation of current, intermediate, and long-range policies and plans to carry out a broad statistical program for the agricultural sector and Departmental functions and activities assigned to NASS. Specific functions are:
I11(1) Administering an agricultural statistics program which includes estimates of production, marketings, inventories, and selected economic characteristics of the U.S. agricultural and rural economy.
I11(2) Administering a methodological research program to improve agricultural data collection and processing, data management, estimation, and forecasting.
I11(3) Administering programs to conduct surveys for other agencies, improve statistics through statistical standards for the Department, and coordinate statistical methods and techniques within the Federal Government.
I11(4) Administering statistical programs jointly developed through cooperative agreements with State agencies, universities, private groups, and other Federal agencies.
I11(5) Administering selected international agricultural statistics programs which provide foreign technical assistance, training on statistical methodology for developing countries, and exchange of information.
I11(b) T3Associate AdministratorG1T1. The Associate Administrator is responsible for advising and counseling the Administrator and high-level policy officials on matters related to programs of NASS. Major functions include:

I11(1) Chairing Agricultural Statistics Board activities, designating Board membership, presiding at Board sessions, and formulating specific procedures.
I11(2) Chairing the NASS Strategic Planning Council which coordinates long-range planning, information resources management, and research reviews.
I11(3) Chairing the Resource Management Council which coordinates NASS hiring, promotion, and training activities.
I11(c) T3Deputy Administrator for Field Operations.G1T1 The Deputy Administrator manages and coordinates data collection and estimating programs carried out by State Statistical Offices. This includes supervision of statistical programs with cooperating State and private groups, universities, and other Federal agencies. Major functions include:
I11(1) Formulating policies and programs that relate to functions and responsibilities of State Statistical Offices.
ï¿½466ï¿½I11(2) Directing agricultural statistics programs established through cooperative agreements with State Departments of Agriculture, Land-Grant colleges and universities, or appropriate private organizations.
I11(3) Establishing and maintaining relationships with respondents, producers, commodity groups, data users, and other interested groups to gain cooperation in providing useful, timely, and reliable information.
I11(d) T3Director, Estimates Division.G1T1 The Director is responsible for NASS estimating and forecasting programs. Major functions include:
I11(1) Defining input and output requirements, estimators and variances to be utilized, statistical standards, editing and summarization requirements, and analytic procedures.
I11(2) Collaborating with the Chairperson of the Agricultural Statistics Board to establish the annual programs of statistical reports.
I11(3) Developing appropriate systems parameters; processing, summarizing, and presenting current survey and related historical data for Agricultural Statistics Board analysis; and preparing official estimates and forecasts.
I11(e) T3Director, Survey Management Division.G1T1 The Director is responsible for application of survey design and data collection methodologies to the agricultural statistics program. Major functions include:
I11(1) Constructing and maintaining appropriate sampling frames for agricultural and rural surveys.
I11(2) Designing, testing, and establishing survey techniques and standards, including sample design, sample selection, questionnaires, data collection methods, survey materials, and training methods for NASS.
I11(3) Reviewing specifications for special data collection activities for programs of other Federal or State agencies.
I11(f) T3Director, Research Division.G1T1 The Director is responsible for researching statistical methodology for survey design, data collection, processing, estimating, and forecasting. Major functions include:
I11(1) Conducting statistical research to develop new and improved sampling techniques, develop improved data collection methods, and identify methods of controlling sampling and nonsampling errors.
I11(2) Researching statistical computing methods and developing efficient uses of computer technology including telecommunications, networking, and other applications.
I11(3) Developing new statistical theory and models and solving statistical problems, including numerical methods involving advanced mathematical statistics.
I11(g) T3Director, Systems and Information Division.G1T1 The Director is responsible for NASS information management system and processing services. Specific functions are:
I11(1) Designing, maintaining, and providing access to an integrated and standardized information management system containing sampling frames, survey data, estimates, and administrative records utilized by NASS.
I11(2) Providing appropriate support for assisting users of the information management system through documentation, evaluation, training, and resolution of information management problems.
I11(3) Designing and issuing all reports releasing official State and national estimates and forecasts from NASS.
I11(h) T3Chairperson, Agricultural Statistics Board.G1T1 The Chairperson reviews, prepares, and issues on specific dates, following approval by the Secretary of Agriculture as provided by law (7 U.S.C. 411a) and Departmental Regulation, the official State and national estimates relating to crop production, livestock and livestock products, dairy and dairy products, poultry and poultry products, stocks of agricultural commodities, value of farm products, farm inputs, and other assigned agricultural aspects.

I80ï¿½1A3600.4 
I89Authority to act for the Administrator.
I11In the absence of the Administrator, the following officials are designated to serve as Acting Administrator in the order indicated:

Q02


I25Associate Administrator
I25Deputy Administrator for Field Operations
I25Director, Estimates Division
I25Director, Survey Management Division
I25Director, Systems and Information Division
I25Director, Research Division 
S8002
ï¿½467ï¿½I95Pt. 3600, App. A
I85Appendix A to Part T13600_G1T5T4List of State Statistical OfficesG1T5
I73Section 1. General
I21Information concerning NASS statistics programs and activities related to individual States may be obtained from the State Statistician, State Statistical Office, NASS, in the locations listed below.
I73Section 2. List of Addresses
I25Alabama, Sterling Centre, Suite 200, 4121 Carmichael Road, Montgomery, AL 36106ï¿½092872
I25Alaska, 809 South Chugach Street, Suite 4, Palmer, AK 99645
I25Arizona, 3003 North Central Avenue, Suite 950, Phoenix, AZ 85012
I25Arkansas, 3408 Federal Office Building, Little Rock, AR 72201
I25California, 1220 ``N'' Street, Room 243, Sacramento, CA 95814
I25Colorado, 645 Parfet Street, Suite Wï¿½09201, Lakewood, CO 80215ï¿½095517
I25Delaware, Delaware Department of Agriculture Building, 2320 South Dupont Highway, Dover, DE 19901
I25Florida, 1222 Woodward Street, Orlando, FL 32803
I25Georgia, Stephens Federal Building, Suite 320, Athens, GA 30613
I25Hawaii, State Department of Agriculture Building, 1428 South King Street, Honolulu, HI 96814
I25Idaho, 2224 Old Penitentiary Road, Boise, ID 83712
I25Illinois, Illinois Department of Agriculture Building, 801 Sangamon Avenue, Room 54, Springfield, IL 62702
I25Indiana, 1148 AGAD Building, Purdue University, Room 223, West Lafayette, IN 47907ï¿½091148
I25Iowa, 833 Federal Building, 210 Walnut Street, Des Moines, IA 50309
I25Kansas, 632 S.W. Van Buren, Room 200, Topeka, KS 66603
I25Kentucky, Gene Snyder & Courthouse Building, 601 W. Broadway, Room 645, Louisville, KY 40202
I25Louisiana, 5825 Florida Boulevard, Baton Rouge, LA 70806
I25Maryland, 50 Harry S Truman Parkway, Suite 202, Annapolis, MD 21401
I25Michigan, 201 Federal Building, Lansing, MI 48904
I25Minnesota, 8 East 4th Street, Suite 500, St. Paul, MN 55101
I25Mississippi, 121 North Jefferson Street, Jackson, MS 39201
I25Missouri, 601 Business Loop West, Suite 240, Columbia, MO 65203
I25Montana, Federal Building & U.S. Court House, Room 398, 301 S. Park Avenue, Helena, MT 59626
I25Nebraska, 100 Centennial Mall N., Room 273 Federal Building, Lincoln, NE 68508
I25Nevada, Max C. Fleischmann Agriculture Building, Room 232, University of Nevada, Reno, NV 89557
I25New Hampshire, 22 Bridge Street, Room 301, Concord, NH 03301
I25New Jersey, Health and Agriculture Building, Room 205, CNï¿½09330 New Warren Street, Trenton, NJ 08625
I25New Mexico, 2507 North Telshor Boulevard, Suite 4, Las Cruces, NM 88001
I25New York, Department of Agriculture & Markets, 1 Winners Circle, Albany, NY 12235
I25North Carolina, 2 W. Edenton Street, Raleigh, NC 27601ï¿½091085
I25North Dakota, 1250 Albrecht Boulevard, NDSU, Room 448, Fargo, ND 58105
I25Ohio, 200 N. High Street, New Federal Building, Room 608, Columbus, OH 43215
I25Oklahoma, 2800 North Lincoln Boulevard, Oklahoma City, OK 73105
I25Oregon, 1220 S.W. Third Avenue, Room 1735, Portland, OR 97204
I25Pennsylvania, 2301 N. Cameron Street, Room Gï¿½0919, Harrisburg, PA 17110
I25South Carolina, 1835 Assembly Street, Room 1008, Columbia, SC 29201
I25South Dakota, 3528 S. Western Avenue, Sioux Falls, SD 57117
I25Tennessee, 440 Hogan Road, Holeman Office Building, Ellington Agricultural Center, Nashville, TN 37220ï¿½091626
I25Texas, 300 E. 8th Street, Federal Building, Room 504, Austin, TX 78701
I25Utah, 176 N. 2200 West_Suite 260, Salt Lake City, UT 84116
I25Virginia, 1100 Bank Street, Room 706, Richmond, VA 23219
I25Washington, 1111 Washington Street, SE, Olympia, WA 98504
I25West Virginia, 1900 Kanawha Boulevard E, Charleston, WV 25305
I25Wisconsin, 2811 Agriculture Drive, Madison, WI 53704
I25Wyoming, 504 W. 17th Street, Suite 250, Cheyenne, WY 82001
S8010
I95Pt. 3601
I52PART 3601_AVAILABILITY OF INFORMATION TO THE PUBLIC
S8006I18Sec.
S8010I263601.1General.
I263601.2Public inspection, copying, and indexing.
I263601.3Requests for records.
I263601.4Denials.
I263601.5Appeals.
I263601.6Requests for published data and information.

Q04I21T5Authority:  T15 U.S.C. 301 and 552; 7 CFR 1.1ï¿½091.23 and Appendix A.
Q04I21T5Source:  T152 FR 2669, Jan. 26, 1987, unless otherwise noted.

ï¿½468ï¿½I80ï¿½1A3601.1
I89General.
I11This part is issued in accordance with the regulations of the Secretary of Agriculture in ï¿½1A1.1 through 1.23 of this title and Appendix A thereto, implementing the Freedom of Information Act (5 U.S.C. 552), and governs the availability of records of the National Agricultural Statistics Service (NASS) to the public.
Q04I20[52 FR 2669, Jan 26, 1987, as amended at 53 FR 11640, Apr. 8, 1988]

I80ï¿½1A3601.2
I89Public inspection, copying, and indexing.
I115 U.S.C. 552(a)(2) requires that certain materials be made available for public inspection and copying and that a current index of these materials be published quarterly or otherwise be made available. NASS does not maintain any materials within the scope of these requirements.

I80ï¿½1A3601.3
I89Requests for records.
I11Requests for records of NASS shall be made in accordance with ï¿½1A1.6 (a) and (b) of this title and addressed to: FOIA Coordinator, Agricultural Research Service, USDA, 6303 Ivy Lane, Room 456, Greenbelt, MD 20770; Telephone (301) 344ï¿½092207, Facsimile (301) 344ï¿½092325, TDD (301) 344ï¿½092435. The FOIA Coordinator is delegated authority to make determinations regarding such requests in accordance with ï¿½1A1.3(a)(3) of this title.
Q04I20[60 FR 57536, Nov. 16, 1995]

I80ï¿½1A3601.4
I89Denials.
I11If the FOIA Coordinator determines that a requested record is exempt from mandatory disclosure and that discretionary release would be improper, the FOIA Coordinator shall give written notice of denial in accordance with ï¿½1A1.8(a) of this title.
Q04I20[60 FR 57536, Nov. 16, 1995]

I80ï¿½1A3601.5
I89Appeals.
I11Any person whose request is denied shall have the right to appeal such denial. Appeals shall be made in accordance with ï¿½1A1.6(e) of this title and addressed to the Administrator, National Agricultural Statistics Service, U.S. Department of Agriculture, Washington, DC 20250.

I80ï¿½1A3601.6
I89Requests for published data and information.
I11Information on published data and subscription rates is available from the Secretary, Agricultural Statistics Board, National Agricultural Statistics Service, U.S. Department of Agriculture, Washington, DC 20250. In the field, published data and subscription forms are available from the State Statistician at each State Statistical Office. Addresses of State Statistical Offices are listed in appendix A to part 3600 of this title.
Q04I20[52 FR 2667, Jan. 26, 1987, as amended at 53 FR 11640, Apr. 8, 1988]



F8008I327 CFR Ch. XXXVII (1ï¿½091ï¿½0900 Edition)
I33Economic Research Service, USDA


ï¿½469ï¿½I04CHAPTER XXXVII_ECONOMIC RESEARCH SERVICE, DEPARTMENT OF AGRICULTURE
I03
Q04
I87Part
I88Page
I483700
I49Organization and functions
I59471
I483701
I49Public information
I59473



F80103I327 CFR Ch. XXXVII (1ï¿½091ï¿½0900 Edition)
I33Economic Research Service, USDA

ï¿½471ï¿½I95Pt. 3700
I52PART 3700_ORGANIZATION AND FUNCTIONS
S8006I18Sec.
S8010I263700.1General.
I263700.2Organization.
I263700.3Functions.
I263700.4Authority to act for the Administrator.

Q04I21T5Authority:  T15 U.S.C. 301 and 552, and 7 CFR 2.67.
Q04I21T5Source:  T161 FR 1827, Jan. 24, 1996, unless otherwise noted.


I80ï¿½1A3700.1
I89General.
I11The Economic Research Service (ERS), originally established in 1961 under the authority of the Agricultural Marketing Act of 1946 (7 U.S.C. 1621ï¿½091627), was reestablished as an agency of the U.S. Department of Agriculture of September 30, 1981 (46 FR 47747), in response to Secretary's Memorandum 1000ï¿½091 of June 17, 1981, entitled ``Reorganization of Department.'' The mission of ERS is to provide economic and other social science information and analysis for pubic and private decisions on agriculture, food, natural resources, and rural America. Its primary customers are USDA policy officials and program administrators, the Office of the While House, Congress, and environmental, consumer, and rural public interest groups, including farm groups and industry.

I80ï¿½1A3700.2 
I89Organization.
I11ERS maintains its offices at 1301 New York Avenue, NW., Washington, DC 20005ï¿½094788. The organization consists of:
I11(a) The Administrator;
I11(b) Associate Administrator;
I11(c) Five Divisions; Commercial Agriculture Division, Food and Consumer Economics Division, Information Services Division, Natural Resources and Environment Division, and Rural Economy Division; and
I11(d) Office of Energy and New Uses.



I80ï¿½1A3700.3 
I89Functions.

I11(a) T3Administrator and Associate Administrator.G1T1 The Administrator and Associate Administrator are responsible for developing and implementing policies and plans in support of a program of economic and social science research, analysis, and data dissemination. General functions are: Conducting research and staff analysis, and developing short to long-term outlook analysis and economic indicators.
I11(b) T3Director, Commercial Agriculture Division.G1T1 The Director, Commercial Agriculture Division, is responsible for conducting a program of economic research; economic intelligence gathering, analysis, and reporting; and data development and dissemination on economic conditions, U.S. and foreign policies, and agriculture production, trade, and marketing. General functions are:
I11(1) Developing and monitoring current intelligence and indicators on domestic and international agricultural markets and related farm and trade developments and short to long-term forecasts of domestic and world agricultural markets.
I11(2) Assessing the technological, economic, and institutional forces influencing U.S. and world agricultural markets.
I11(3) Conducting special analyses of U.S. and world agricultural markets for policy officials to assist in policy development and the operation of USDA programs.
I11(4) Collecting necessary information and performing international, national, and regional macroeconomics analysis to estimate the effects of macro economic trends and events in the global economy on the American farm sector.
I11(c) T3Director, Food and Consumer Economic Division.G1T1 The Director, Food and Consumer Economic Division, is responsible for providing economic research, monitoring and statistical indicators, and staff and the policy analysis of consumer and food marketing issues, including: Consumption determinants and trends; consumer demand for food quality, safety, and nutrition; food security; market competition; vertical coordination; nutrition education and food assistance programs; and food safety regulation. General functions are:
I11(1) Analyzing consumer behavior and food choices, including research regarding the socio-demographic and economic determinants of food and nutrient consumption; consumer valuation ï¿½472ï¿½of quality, safety, and nutrition characteristics; and the role of information in determining food choices.
I11(2) Examining food assistance and nutrition programs, nutritional adequacy of diets, and food security, including costs and benefits of food assistance and nutrition programs, program and policy alternatives, the extent and social cost of good insecurity, and the role of food assistance in meeting larger goals of welfare programs.
I11(3) Analyzing the food processing and distribution sector, including the ability of the sector to meet changing consumer demand; the effect of government market interventions to facilitate that response; and the effect of government interventions and rapid changes in the sector on consumer and producer welfare.
I11(4) Analyzing food safety issues, including consumer benefits from risk reduction, production tradeoffs in reducing hazards, impact of proposed regulations and international harmonization, and policy alternatives.
I11(5) Developing and monitoring indicators of individual, household, and market level food consumption, expenditures, and nutrients; food marketing costs, marketing margins, and farm-retail price spreads; and food safety hazards, their effects, and mitigation.
I11(d)  T3Director, Information Services Division.G1T1 The Director, Information Services Division, is responsible for managing and directing agencywide information technology, communications, and administrative activities in support of the economic research and analysis mission of ERS. General functions are:
I11(1) Developing and managing information technology infrastructure and training.
I11(2) Developing and managing communications, publication, and dissemination programs, policies, and procedures.
I11(3) Providing operations and management services, including liaison with the ARS's Administrative and Financial Management unit.
I11(e) T3Director, Natural Resources and Environment Division.G1T1 The Director, Natural Resources and Environment Division, is responsible for providing economic research, monitoring and statistical indicators, and staff and policy analysis of agricultural resource and environment issues including the relationship between agriculture_its practices, technologies, policies, and resource use_and the environment, including effects on the sustainability of the natural resource base, preservation of species and genetic diversity, and environmental quality. General functions are:
I11(1) Developing and disseminating data for assessing the use of agricultural resources and technologies by agricultural producers. These data include use and ownership of land, use of agricultural chemicals and equipment, and water use.
I11(2) Evaluating the implications of alternative agricultural and resource conservation policies and programs on commodity prices, consumer welfare, competitiveness, and long-range maintenance of agricultural land and water resources.
I11(3) Analyzing the costs, benefits, and distributional impacts of alternative policies to reduce environmental and health risk externalities associated with agriculture.
I11(4) Monitoring and analyzing the uses and conditions of the nation's water resources and the economic consequences of agricultural and environmental policies affecting water supply, use, and quality.
I11(5) Analyzing the impacts of national and global developments and domestic and international policies on the use and value of land, water, capital assets, and other agricultural production decisions.
I11(6) Assessing the possible impacts of proposed or anticipated domestic policy and program changes on agricultural production decisions.
I11(7) Assessing the effects of technology on input use and markets and evaluating the factors affecting input productivity and technology adoption.
I11(8) Analyzing the implications of global environmental change and sustainable development for U.S. agriculture.

I11(f) T3Director, Rural Economy Division.G1T1 The Director, Rural Economy Division, is responsible for conducting a program of economic and social science research ï¿½473ï¿½and analysis on national rural and agricultural conditions and trends, and identifying and assessing the potential impact of public and private sector actions and policies that affect rural areas and the agricultural sector. General functions are:
I11(1) Analyzing and reporting on current economic and demographic issues facing rural areas and agricultural, especially how changes in the national and global economies affect rural areas and the agriculture sector.
I11(2) Determining the effects of economic, social, and governmental events and actions on the demand for and supply of rural local government services, the quality of such services, and the relationships between local services and the viability of rural communities.
I11(3) Developing and disseminating information on current trends in the non-metropolitan and farm populations, the number, location and characteristics of such people, and the factors associated with these trends.
I11(4) Developing estimates and analyzing labor force trends in rural labor markets, including analyses of unemployment and employment by industry and occupational groups, including farm labor.
I11(5) Developing data on the income situation of rural people and evaluating the effectiveness of alternative public policies and programs in improving incomes of rural people, especially people in disadvantaged groups.
I11(6) Monitoring information on and analyzing the development of rural portions of geographic regions of the United States, including changes in industry mix, impacts of energy costs, credit availability, and other economic activities.
I11(7) Analyzing and reporting on developments in rural and agricultural financial markets and in Federal tax laws, and their consequences for agriculture and rural economies.
I11(8) Collecting and disseminating financial information on farms and farm enterprises, and developing techniques necessary to measure and describe the financial condition of the agriculture sector and its components.

Q04I20[61 FR 1827, Jan. 24, 1996, as amended at 64 FR 40736, July 28, 1999]





I80ï¿½1A3700.4
I89Authority to act for the Administrator.
I11In the absence of the Administrator, the following officials are designated to serve as Acting Administrator in the order indicated:

Q04
I25Associate Administrator
I25Director, Commercial Agriculture Division
I25Director, Food and Consumer Economics Division
I25Director, Natural Resources and Environment Division
I25Director, Rural Economy Division
I25Director, Information Services Division
I25Director, Office of Energy and New Uses
Q04


I95Pt. 3701
I52PART 3701_PUBLIC INFORMATION
S8006I18Sec.
S8010I263701.1General statement.
I263702.2Public inspection, copying, and indexing.
I263701.3Request for records.
I262701.4Denials.
I263701.5Appeals.
I263701.6Requests for published data and information.

Q04I21T5Authority:  T15 U.S.C. 301 and 552; 7 CFR part 1, subpart A.
Q04I21T5Source:  T160 FR 66862, Dec. 27, 1995, unless otherwise noted.

I80ï¿½1A3701.1 
I89General statement.
I11This part is issued in accordance with the regulations of the Secretary of Agriculture in part 1, subpart A of this title, implementing the Freedom of Information Act (FOIA) (5 U.S.C. 552). The Secretary's regulations, as implemented by the regulations in this part, govern the availability of records of the Economic Research Service (ERS) to the public.

I80ï¿½1A3701.2 
I89Public inspection, copying, and indexing.
I115 U.S.C. 552(a)(2) requires that certain materials be made available for public inspection and copying and that a current index of these materials be published quarterly or otherwise be made available. Members of the public may request access to such materials maintained by ERS at the following office: Information Staff, Agricultural Research Service, USDA, 6303 Ivy Lane, Room 456, Greenbelt, MD 20770; Telephone (301) 344ï¿½092207. Office Hours are 8:00 a.m. to 4:30 p.m.

ï¿½474ï¿½I80ï¿½1A3701.3 
I89Request for records.
I11Requests for records of ERS shall be made in accordance with ï¿½1A1.6 (a) and (b) of this title and submitted to the FOIA Coordinator, Agricultural Research Service, USDA, 6303 Ivy Lane, Room 456, Greenbelt, MD 20770; Telephone (301) 344ï¿½092207, Facsimile (301) 344ï¿½092325, TDD (301) 344ï¿½092425. The FOIA Coordinator is delegated authority to make determinations regarding such requests in accordance with ï¿½1A1.3(a)(3) of this title.

I80ï¿½1A3701.4 
I89Denials.
I11If the FOIA Coordinator determines that a requested record is exempt from mandatory disclosure and that discretionary release would be improper, the FOIA Coordinator shall give written notice of denial in accordance with ï¿½1A1.8(a) of this title.

I80ï¿½1A3701.5 
I89Appeals.
I11Any person whose request is denied shall have the right to appeal such denial. Appeals shall be made in accordance with Section 1.6(e) of this title and should be addressed as follows: Administrator, Economic Research Service, U.S. Department of Agriculture, Washington, DC 20250.

I80ï¿½1A3701.6 
I89Requests for published data and information.
I11Information on published data from ERS programs is contained in the ERS ``Reports'' newsletter, available without cost from the Economic Research Service, Information Center, U.S. Department of Agriculture, 1301 New York Avenue, NW., Washington, DC 20005.


F8008I327 CFR Ch. XXXVIII (1ï¿½091ï¿½0900 Edition)
I33World Agricultural Outlook Board, USDA


ï¿½475ï¿½I04CHAPTER XXXVIII_WORLD AGRICULTURAL OUTLOOK BOARD, DEPARTMENT OF AGRICULTURE
I03
Q04
I87Part
I88Page
I483800
I49Organization and functions
I59477
I483801
I49Availability of information to the public
I59477



F80103I327 CFR Ch. XXXVIII (1ï¿½091ï¿½0900 Edition)
I33World Agricultural Outlook Board, USDA

ï¿½477ï¿½I95Pt. 3800
I52PART 3800_ORGANIZATION AND FUNCTIONS
S8006I18Sec.
S8010I263800.1General.
I263800.2Organization.
I263800.3Functions.
I263800.4Authority to act for the Chairperson. 

Q04I21T5Authority:  T15 U.S.C. 301 and 552, and 7 CFR 2.86, except as otherwise stated.
Q04I21T5Source:  T153 FR 5358, Feb. 24, 1988, unless otherwise noted.

I80ï¿½1A3800.1 
I89General.
I11The World Agricultural Outlook Board (WAOB) was established on June 3, 1977, by Secretary's Memorandum 1920, entitled ``World Food and Agricultural Outlook and Situation Board.'' The primary responsibility of WAOB is to coordinate and review all commodity and aggregate agricultural and food data and analyses used to develop outlook and situation material within the Department of Agriculture. 

I80ï¿½1A3800.2 
I89Organization. 
I11The central and only office of WAOB is located in Washington, DC, and consists of the Chairperson, Deputy Chairperson, and supporting staff. 

I80ï¿½1A3800.3
I89Functions.
I11The WAOB has four major areas of responsibility:
I11(a) T3Agricultural outlook and situation.G1T1 (1) Coordinate and review all crop and commodity data used to develop outlook and situation material within the Department of Agriculture.
I11(2) Oversee and clear for consistency of analytical assumptions and results, all estimates and analyses which significantly relate to international and domestic commodity supply and demand. This includes such estimates and analyses prepared for public distribution by the Foreign Agricultural Service, the Economic Research Service, or by any other agency or office of the Department.
I11(3) Participate in planning and developing research programs relating to improving the Department's forecasting and estimating capabilities.
I11(4) Provide liaison between the Department and Commodity Futures Trading Commission to assure that the futures market serves the best interest of agriculture and the public.
I11(5) Plan and participate in Departmental, interdepartmental, regional and international outlook conferences and briefings, to maintain an awareness of current and upcoming economic issues significant to the food and agricultural system.
I11(b) T3Interagency commodity estimates.G1T1 (1) Establish Interagency Commodity Estimates Committees to bring together estimates and analyses from supporting agencies and to develop official estimates of supply, utilization, and prices for commodities.
I11(2) Review for consistency of analytical assumptions and results, all proposed decisions made by the Interagency Commodity Estimates Committee prior to any release outside the Department.
I11(c) T3Weather and climate.G1T1 (1) Serve as a focal point within the Department for coordination of weather, climate, and related crop monitoring activities.
I11(d) T3Remote sensing.G1T1 (1) Provide technical assistance, coordination, and guidance to Department agencies in planning, developing, and carrying out satellite remote sensing activities to assure full consideration and evaluation of advanced technology.
I11(2) Coordinate administrative, management, and budget information relating to Department's remote sensing activities.

I80ï¿½1A3800.4
I89Authority to act for the Chairperson.
I11When the Chairperson is absent or temporarily unavailable, the Deputy Chairperson is authorized to act for the Chairperson.


I95Pt. 3801
I52PART 3801_AVAILABILITY OF INFORMATION TO THE PUBLIC
S8006I18Sec.
S8010I263801.1General.
I263801.2Public inspection, copying, and indexing.
I263801.3Requests for records.
I263801.4Denials.
I263801.5Appeals.
I263801.6Requests for published data and information.

Q04I21T5Authority:  T15 U.S.C. 301 and 552; 7 CFR 1.1ï¿½091.23 and Appendix A.

ï¿½478ï¿½Q04I21T5Source: T1 53 FR 5358, Feb. 24, 1988, unless otherwise noted.

I80ï¿½1A3801.1
I89General.
I11This part is issued in accordance with the regulations of the Secretary of Agriculture in ï¿½1A1.1ï¿½091.23 of this title and Appendix A thereto, implementing the Freedom of Information Act (FOIA) (5 U.S.C. 552), and governs the availability of records of the World Agricultural Outlook Board (WAOB) to the public.

I80ï¿½1A3801.2
I89Public inspection, copying, and indexing.
I115 U.S.C. 552(a)(2) requires that certain materials be made available for public inspection and copying and that a current index of these materials be published quarterly or otherwise be made available. WAOB does not maintain any materials within the scope of these requirements.

I80ï¿½1A3801.3
I89Requests for records.
I11Requests for records of WAOB shall be made in accordance with 1.6 (a) and (b) of this title and addressed to: Economics Agencies FOIA Officer, Economics Management Staff, USDA, Room 4310, South Building, 12th and Independence Avenue SW., Washington, DC 20250. This official is delegated authority to make determinations regarding such requests in accordance with ï¿½1A1.3(a)(3) of this title.

I80ï¿½1A3801.4
I89Denials.
I11If the Economics Agencies FOIA Officer determines that a requested record is exempt from mandatory disclosure and that discretionary release would be improper, the Economics Agencies FOIA Officer shall give written notice of denial in accordance with ï¿½1A1.8(a) of this title. 

I80ï¿½1A3801.5
I89Appeals.
I11Any person whose request is denied shall have the right to appeal such denial. Appeals shall be in accordance with ï¿½1A1.6(e) of this title and addressed to the Chairperson, World Agricultural Outlook Board, U.S. Department of Agriculture, Washington, DC 20250.

I80ï¿½1A3801.6
I89Requests for published data and information.
I11Information on published data, subscription rates, and all WAOB programs is available from the Chairperson, World Agricultural Outlook Board, U.S. Department of Agriculture, Washington, DC 20250.
ï¿½479ï¿½
F8008I04CHAPTER XLI_[RESERVED]


F8008I327 CFR Ch. XLII (1ï¿½091ï¿½0900 Edition)
I33RBS and RUS, USDA



ï¿½481ï¿½I04CHAPTER XLII_RURAL BUSINESS-COOPERATIVE SERVICE AND RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
I03
Q06Q04I21T5Editorial Note: T1Nomenclature changes to chapter XLII appear at 61 FR 3782, Feb. 2, 1996. 
Q04
I87Part
I88Page


I484274
I49Direct and insured loanmaking
I59483



I484279
I49Guaranteed loanmaking 
I59500

I484284
I49Grants
I59525

I484285
I49Cooperative agreements
I59539
I484287
I49Servicing 
I59547



F80103I327 CFR Ch. XLII (1ï¿½091ï¿½0900 Edition)
I33RBS and RUS, USDA

ï¿½483ï¿½I95Pt. 4274
I52PART 4274_DIRECT AND INSURED LOANMAKING
S8006I86Subparts Aï¿½09C[Reserved]
S8010I86Subpart D_Intermediary Relending Program (IRP)
S8006I18Sec.
S8010I264274.301Introduction.
I264274.302Definitions and abbreviations.
I264274.303ï¿½094274.306[Reserved]
I264274.307Eligibility requirements_Intermediary.
I264274.308Eligibility requirements_Ultimate recipients.
I264274.309ï¿½094274.313[Reserved]
I264274.314Loan purposes.
I264274.315ï¿½094274.318[Reserved]
I264274.319Ineligible loan purposes.
I264274.320Loan terms.
I264274.321ï¿½094274.324[Reserved]
I264274.325Interest rates.
I264274.326Security.
I264274.327ï¿½094274.330[Reserved]
I264274.331Loan limits.
I264274.332Post award requirements.
I264274.333ï¿½094274.336[Reserved]
I264274.337Other regulatory requirements.
I264274.338Loan agreements between the Agency and the intermediary.
I264274.339ï¿½094274.342[Reserved]
I264274.343Application.
I264274.344Filing and processing applications for loans.
I264274.345ï¿½094274.349[Reserved]
I264274.350Letter of conditions.
I264274.351ï¿½094274.354[Reserved]
I264274.355Loan approval and obligating funds.
I264274.356Loan closing.
I264274.357ï¿½094274.360[Reserved]
I264274.361Requests to make loans to ultimate recipients.
I264274.362ï¿½094274.372[Reserved]
I264274.373Appeals.
I264274.374ï¿½094274.380[Reserved]
I264274.381Exception authority.
I264274.382ï¿½094274.399[Reserved]
I264274.400OMB control number.

Q04I21T5Authority: T15 U.S.C. 301; 7 U.S.C. 1932 note; 7 U.S.C. 1989.

Q04I21T5Source: T163 FR 6053, Feb. 6, 1998, unless otherwise noted.
S8006I56Subparts Aï¿½09C[Reserved]
S8010I56Subpart D_Intermediary Relending Program (IRP)


I80ï¿½1A4274.301
I89Introduction.
I11(a) This subpart contains regulations for loans made by the Agency to eligible intermediaries and applies to borrowers and other parties involved in making such loans. The provisions of this subpart supersede conflicting provisions of any other subpart. The servicing and liquidation of such loans will be in accordance with part 1951, subpart R, of this title.
I11(b) The purpose of the program is to alleviate poverty and increase economic activity and employment in rural communities, especially disadvantaged and remote communities, through financing targeted primarily towards smaller and emerging businesses, in partnership with other public and private resources, and in accordance with State and regional strategy based on identified community needs. This purpose is achieved through loans made to intermediaries that establish programs for the purpose of providing loans to ultimate recipients for business facilities and community developments in a rural area.
I11(c) Proposed intermediaries are required to identify any known relationship or association with a USDA Rural Development employee. Any processing or servicing Agency activity conducted pursuant to this subpart involving authorized assistance to United States Department of Agriculture (USDA) Rural Development employees, members of their families, close relatives, or business or close personal associates, is subject to the provisions of subpart D of part 1900 of this chapter.
I11(d) Copies of all forms, regulations, and Agency procedures referenced in this subpart are available in the National Office or any Rural Development State Office.


I80ï¿½1A4274.302
I89Definitions and abbreviations.
I11(a) T3General definitions.G1T1 The following definitions are applicable to the terms used in this subpart:
I11T3Agency.G1T1 The Federal agency within the USDA with responsibility assigned by the Secretary of Agriculture to administer IRP. At the time of publication of this rule, that Agency was the Rural Business-Cooperative Service (RBS).
I11T3Agency IRP loan funds.G1T1 Cash proceeds of a loan obtained from the Agency through IRP, including the portion of ï¿½484ï¿½an IRP revolving fund directly provided by the Agency IRP loan. Agency IRP loan funds are Federal funds.
I11T3Agricultural production or agriculture production.G1T1 The cultivation, production, growing, raising, feeding, housing, breeding, hatching, or managing of crops, plants, animals, or birds, either for fiber, food for human consumption, or livestock feed.
I11T3Initial Agency IRP loan.G1T1 The first IRP loan made by the Agency to an intermediary.
I11T3Intermediary.G1T1 The entity requesting or receiving Agency IRP loan funds for establishing a revolving fund and relending to ultimate recipients.
I11T3IRP revolving fund.G1T1 A group of assets, obtained through or related to an Agency IRP loan and recorded by the intermediary in a bookkeeping account or set of accounts and accounted for, along with related liabilities, revenues, and expenses, as an entity or enterprise separate from the intermediary's other assets and financial activities.
I11T3Principals of intermediary.G1T1 Members, officers, directors, and other individuals or entities directly involved in the operation and management (including setting policy) of an intermediary.
I11T3Processing office or officer.G1T1 The processing office for an IRP application is the office within the Agency administrative organization with assigned authority and responsibility to process the application. The processing office is the primary contact for the proposed intermediary and maintains the official application case file. The processing officer for an application is the person in charge of the processing office. The processing officer is responsible for ensuring that all regulations and Agency procedures are complied with in regard to applications under the office's jurisdiction.
I11T3Revolved funds.G1T1 The cash portion of an IRP revolving fund that is not composed of Agency loan funds, including funds that are repayments of Agency IRP loans and including fees and interest collected on such loans. Revolved funds shall not be considered Federal funds.
I11T3Rural area.G1T1 All territory of a State that is not within the outer boundary of any city having a population of 25,000 or more, according to the latest decennial census.
I11T3Servicing office or officer.G1T1 The servicing office for an IRP loan is the office within the Agency administrative organization with assigned authority and responsibility to service the loan. The servicing office is the primary contact for the borrower and maintains the official case file after the loan is closed. The servicing officer for a loan is the person in charge of the servicing office. The servicing officer is responsible for ensuring that all regulations and Agency procedures are complied with in regard to loans under the office's jurisdiction.
I11T3State.G1T1 Any of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands of the United States, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands.
I11T3Subsequent IRP loan.G1T1 An IRP loan from the Agency to an intermediary that has received one or more IRP loans previously.
I11T3Technical assistance.G1T1 A function performed for the benefit of an ultimate recipient or proposed ultimate recipient, which is a problem solving activity. The Agency will determine whether a specific activity qualifies as technical assistance.
I11T3Ultimate recipient.G1T1 An entity or individual that receives a loan from an intermediary's IRP revolving fund.
I11T3Underrepresented group.G1T1 U.S. citizens with identifiable common characteristics, that have not received IRP assistance or have received a lower percentage of total IRP dollars than the percentage they represent of the general population.
I11T3United States.G1T1 The 50 States of the United States of America, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands of the United States, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands.
I11(b) T3Abbreviations.G1T1 The following are applicable to this subpart:

Q02
ï¿½485ï¿½I15B&I_Business and Industry
I15IRP_Intermediary Relending Program
I15OGC_Office of the General Counsel
I15OIG_Office of Inspector General
I15OMB_Office of Management and Budget
I15RBS_Rural Business-Cooperative Service, or any successor agency
I15RDLF_Rural Development Loan Fund
I15USDA_United States Department of Agriculture


I80ï¿½1A4274.303ï¿½094274.306
I89[Reserved]


I80ï¿½1A4274.307
I89Eligibility requirements_Intermediary.
I11(a) The types of entities which may become intermediaries are:
I11(1) Private nonprofit corporations.
I11(2) T3Public agenciesG1T1_Any State or local government, or any branch or agency of such government having authority to act on behalf of that government, borrow funds, and engage in activities eligible for funding under this subpart.
I11(3) T3Indian groupsG1T1_Indian tribes on a Federal or State reservation or other federally recognized tribal groups.
I11(4) T3CooperativesG1T1_Incorporated associations, at least 51 percent of whose members are rural residents, whose members have one vote each, and which conduct, for the mutual benefit of their members, such operations as producing, purchasing, marketing, processing, or other activities aimed at improving the income of their members as producers or their purchasing power as consumers.
I11(b) The intermediary must:
I11(1) Have the legal authority necessary for carrying out the proposed loan purposes and for obtaining, giving security for, and repaying the proposed loan.
I11(2) Have a proven record of successfully assisting rural business and industry, or, for intermediaries that propose to finance community development, a proven record of successfully assisting rural community development projects of the type planned.
I11(i) Except as provided in paragraph (b)(2)(ii) of this section, such record will include recent experience in loan making and servicing with loans that are similar in nature to those proposed for the IRP and a delinquency and loss rate acceptable to the Agency.
I11(ii) The Agency may approve an exception to the requirement for loan making and servicing experience provided:
I11(A) The proposed intermediary has a proven record of successfully assisting (other than through lending) rural business and industry or rural community development projects of the type planned; and
I11(B) The proposed intermediary will, before the loan is closed, bring individuals with loan making and servicing experience and expertise into the operation of the IRP revolving fund.
I11(3) Have the services of a staff with loan making and servicing expertise acceptable to the Agency.
I11(4) Have capitalization acceptable to the Agency.
I11(c) No loans will be extended to an intermediary unless:
I11(1) There is adequate assurance of repayment of the loan based on the fiscal and managerial capabilities of the proposed intermediary.
I11(2) The loan is not otherwise available on reasonable (T3i.e.,G1T1 usual and customary) rates and terms from private sources or other Federal, State, or local programs.
I11(3) The amount of the loan, together with other funds available, is adequate to assure completion of the project or achieve the purposes for which the loan is made.
I11(d) At least 51 percent of the outstanding interest or membership in any nonpublic body intermediary must be composed of citizens of the United States or individuals who reside in the United States after being legally admitted for permanent residence.
I11(e) Any delinquent debt to the Federal Government by the intermediary or any principal of the intermediary shall cause the intermediary to be ineligible to receive any IRP loan. Agency loan funds may not be used to satisfy the debt.


I80ï¿½1A4274.308
I89Eligibility requirements_Ultimate recipients.
I11(a) Ultimate recipients may be individuals, public or private organizations, or other legal entities, with authority to incur the debt and carry out the purpose of the loan.
ï¿½486ï¿½I11(b) To be eligible to receive loans from the IRP revolving loan fund, ultimate recipients;
I11(1) Must be citizens of the United States or reside in the United States after being legally admitted for permanent residence. In the case of an organization, at least 51 percent of the outstanding membership or ownership must be either citizens of the United States or residents of the United States after being legally admitted for permanent residence.
I11(2) Must be located in a rural area of a State.
I11(3) Must be unable to finance the proposed project from its own resources or through commercial credit or other Federal, State, or local programs at reasonable rates and terms.
I11(4) Must, along with its principal officers (including their immediate family), hold no legal or financial interest or influence in the intermediary. Also, the intermediary and its principal officers (including immediate family) must hold no legal or financial interest or influence in the ultimate recipient. However, this paragraph shall not prevent an intermediary that is organized as a cooperative from making a loan to one of its members.
I11(c) Any delinquent debt to the Federal Government by the ultimate recipient or any of its principals shall cause the proposed ultimate recipient to be ineligible to receive a loan from Agency IRP loan funds. Agency IRP loan funds may not be used to satisfy the delinquency.


I80ï¿½1A4274.309ï¿½094274.313
I89[Reserved]


I80ï¿½1A4274.314
I89Loan purposes.
I11(a) T3Intermediaries.G1T1 Agency IRP loan funds must be placed in the intermediary's IRP revolving fund and used by the intermediary to provide direct loans to eligible ultimate recipients.
I11(b) T3Ultimate recipients.G1T1 Loans from the intermediary to the ultimate recipient using the IRP revolving fund must be for community development projects, the establishment of new businesses, expansion of existing businesses, creation of employment opportunities, or saving existing jobs. Such loans may include, but are not limited to:
I11(1) Business and industrial acquisitions when the loan will keep the business from closing, prevent the loss of employment opportunities, or provide expanded job opportunities.
I11(2) Business construction, conversion, enlargement, repair, modernization, or development.
I11(3) Purchase and development of land, easements, rights-of-way, buildings, facilities, leases, or materials.
I11(4) Purchase of equipment, leasehold improvements, machinery, or supplies.
I11(5) Pollution control and abatement.
I11(6) Transportation services.
I11(7) Start-up operating costs and working capital.
I11(8) Interest (including interest on interim financing) during the period before the facility becomes income producing, but not to exceed 3 years.
I11(9) Feasibility studies.
I11(10) Debt refinancing.
I11(i) A complete review will be made by the intermediary to determine whether the loan will restructure debts on a schedule that will allow the ultimate recipient to operate successfully and pay off the loan rather than merely take over an unsound loan. The intermediary will obtain the proposed ultimate recipient's complete debt schedule which should agree with the proposed ultimate recipient's latest balance sheet; and
I11(ii) Refinancing debts may be allowed only when it is determined by the intermediary that the project is viable and refinancing is necessary to create new or save existing jobs or create or continue a needed service; and
I11(iii) On any request for refinancing of existing secured loans, the intermediary is required, at a minimum, to obtain the previously held collateral as security for the loans and must not pay off a creditor in excess of the value of the collateral. Additional collateral will be required when the refinancing of unsecured loans is unavoidable to accomplish the necessary strengthening of the ultimate recipient's position.
I11(11) Reasonable fees and charges only as specifically listed in this paragraph. Authorized fees include loan packaging fees, environmental data collection fees, management consultant fees, and ï¿½487ï¿½other fees for services rendered by professionals. Professionals are generally persons licensed by States or accreditation associations, such as engineers, architects, lawyers, accountants, and appraisers. The maximum amount of fee will be what is reasonable and customary in the community or region where the project is located. Any such fees are to be fully documented and justified.
I11(12) Hotels, motels, tourist homes, bed and breakfast establishments, convention centers, and other tourist and recreational facilities except as prohibited by ï¿½1A4274.319.
I11(13) Educational institutions.
I11(14) Revolving lines of credit: T3Provided,G1T1 
I11(i) The portion of the intermediary's total IRP revolving fund that is committed to or in use for revolving lines of credit will not exceed 25 percent at any time;
I11(ii) All ultimate recipients receiving revolving lines of credit will be required to reduce the outstanding balance of the revolving line of credit to zero at least one time each year;
I11(iii) All revolving lines of credit will be approved by the intermediary for a specific maximum amount and for a specific maximum time period, not to exceed two years;
I11(iv) The intermediary will provide a detailed description, which will be incorporated into the intermediary's work plan and be subject to Agency approval, of how the revolving lines of credit will be operated and managed. The description will include evidence that the intermediary has an adequate system for:
I11(A) Interest calculations on varying balances, and
I11(B) Monitoring and control of the ultimate recipients' cash, inventory, and accounts receivable; and
I11(v) If, at any time, the Agency determines that an intermediary's operation of revolving lines of credit is causing excessive risk of loss for the intermediary or the Government, the Agency may terminate the intermediary's authority to use the IRP revolving fund for revolving lines of credit. Such termination will be by written notice and will prevent the intermediary from approving any new lines of credit or extending any existing revolving lines of credit beyond the effective date of termination contained in the notice.


I80ï¿½1A4274.315ï¿½094274.318
I89[Reserved]


I80ï¿½1A4274.319
I89Ineligible loan purposes.
I11Agency IRP loan funds may not be used for payment of the intermediary's administrative costs or expenses. The IRP revolving fund may not be used for:
I11(a) Assistance in excess of what is needed to accomplish the purpose of the ultimate recipient's project .

I11(b) Distribution or payment to the owner, partners, shareholders, or beneficiaries of the ultimate recipient or members of their families when such persons will retain any portion of their equity in the ultimate recipient.
I11(c) Charitable institutions that would not have revenue from sales or fees to support the operation and repay the loan, churches, organizations affiliated with or sponsored by churches, and fraternal organizations.
I11(d) Assistance to government employees, military personnel, or principals or employees of the intermediary or organizations for which such persons are directors or officers or in which they have ownership of 20 percent or more.
I11(e) A loan to an ultimate recipient which has an application pending with or a loan outstanding from another intermediary involving an IRP revolving fund if the total IRP loans would exceed the limits established in ï¿½1A4274.331(b).
I11(f) Agricultural production.
I11(g) The transfer of ownership unless the loan will keep the business from closing, or prevent the loss of employment opportunities in the area, or provide expanded job opportunities.
I11(h) Community antenna television services or facilities.
I11(i) Any illegal activity.
I11(j) Any project that is in violation of either a Federal, State, or local environmental protection law or regulation or an enforceable land use restriction unless the assistance given will result in curing or removing the violation.
I11(k) Lending and investment institutions and insurance companies.
ï¿½488ï¿½I11(l) Golf courses, race tracks, or gambling facilities.


I80ï¿½1A4274.320
I89Loan terms.
I11(a) No loan to an intermediary shall be extended for a period exceeding 30 years. Interest and principal payments will be scheduled at least annually. The initial principal payment may be deferred (during the period before the facility becomes income producing) by the Agency, but not more than 3 years.
I11(b) Loans made by an intermediary to an ultimate recipient from the IRP revolving fund will be scheduled for repayment over a term negotiated by the intermediary and ultimate recipient. The term must be reasonable and prudent considering the purpose of the loan, expected repayment ability of the ultimate recipient, and the useful life of collateral, and must be within any limits established by the intermediary's work plan.


I80ï¿½1A4274.321ï¿½094274.324
I89[Reserved]


I80ï¿½1A4274.325
I89Interest rates.
I11(a) Loans made by the Agency pursuant to this subpart shall bear interest at a fixed rate of 1 percent per annum over the term of the loan.
I11(b) Interest rates charged by intermediaries to ultimate recipients on loans from the IRP revolving fund shall be negotiated by the intermediary and ultimate recipient. The rate must be within limits established by the intermediary's work plan approved by the Agency. The rate should normally be the lowest rate sufficient to cover the loan's proportional share of the IRP revolving fund's debt service costs, reserve for bad debts, and administrative costs.


I80ï¿½1A4274.326
I89Security.
I11(a) T3Intermediaries.G1T1 Security for all loans to intermediaries must be such that the repayment of the loan is reasonably assured, when considered along with the intermediary's financial condition, work plan, and management ability. It is the responsibility of the intermediary to make loans to ultimate recipients in such a manner that will fully protect the interests of the intermediary and the Government.
I11(1) Security for such loans may include, but is not limited to:
I11(i) Any realty, personalty, or intangible capable of being mortgaged, pledged, or otherwise encumbered by the intermediary in favor of the Agency; and
I11(ii) Any realty, personalty, or intangible capable of being mortgaged, pledged, or otherwise encumbered by an ultimate recipient in favor of the Agency.
I11(2) Initial security will consist of a pledge by the intermediary of all assets now in or hereafter placed in the IRP revolving fund, including cash and investments, notes receivable from ultimate recipients, and the intermediary's security interest in collateral pledged by ultimate recipients. Except for good cause shown, the Agency will not obtain assignments of specific assets at the time a loan is made to an intermediary or ultimate recipient. The intermediary will covenant that, in the event the intermediary's financial condition deteriorates or the intermediary takes action detrimental to prudent fund operation or fails to take action required of a prudent lender, the intermediary will provide additional security, execute any additional documents, and undertake any reasonable acts the Agency may request to protect the Agency's interest or to perfect a security interest in any asset, including physical delivery of assets and specific assignments to the Agency. All debt instruments and collateral documents used by an intermediary in connection with loans to ultimate recipients must be assignable.

I11(b) T3Ultimate recipients.G1T1 Security for a loan from an intermediary's IRP revolving fund to an ultimate recipient will be negotiated between the intermediary and ultimate recipient, within the general security policies established by the intermediary and approved by the Agency.


I80ï¿½1A4274.327ï¿½094274.330
I89[Reserved]


I80ï¿½1A4274.331
I89Loan limits.
I11(a) T3Intermediary.G1T1 (1) No loan to an intermediary will exceed the maximum amount the intermediary can reasonably be expected to lend to eligible ultimate recipients, in an effective and ï¿½489ï¿½sound manner, within 1 year after loan closing.
I11(2) The initial Agency IRP loan as defined in ï¿½1A4274.302(a) will not exceed $2 million.
I11(3) Intermediaries that have received one or more IRP loans may apply for and be considered for subsequent IRP loans provided:
I11(i) At least 80 percent of the Agency IRP loan funds approved for the intermediary have been disbursed to eligible ultimate recipients;
I11(ii) The intermediary is promptly relending all collections from loans made from its IRP revolving fund in excess of what is needed for required debt service, reasonable administrative costs approved by the Agency, and a reasonable reserve for debt service and uncollectable accounts;
I11(iii) The outstanding loans of the intermediary's IRP revolving fund are generally sound; and
I11(iv) The intermediary is in compliance with all applicable regulations and its loan agreements with the Agency.
I11(4) Subsequent loans will not exceed $1 million each and not more than one loan will be approved for an intermediary in any one fiscal year.
I11(5) Total outstanding IRP indebtedness of an intermediary to the Agency will not exceed $15 million at any time.
I11(b) T3Ultimate recipients.G1T1 Loans from intermediaries to ultimate recipients using the IRP revolving fund must not exceed the lesser of:
I11(1) $250,000; or
I11(2) Seventy five percent of the total cost of the ultimate recipient's project for which the loan is being made.
I11(c) T3Portfolio.G1T1 No more than 25 percent of an IRP loan approved may be used for loans to ultimate recipients that exceed $150,000. This limit does not apply to revolved funds.


I80ï¿½1A4274.332
I89Post award requirements.
I11(a) T3Applicability.G1T1 Intermediaries receiving loans under this program shall be governed by these regulations, the loan agreement, the approved work plan, security interests, and any other conditions which the Agency may impose in making a loan. Whenever this subpart imposes a requirement on loans made from the ``IRP revolving fund,'' such requirement shall apply to all loans made by an intermediary to an ultimate recipient from the intermediary's IRP revolving fund for as long as any portion of the intermediary's IRP loan from the Agency remains unpaid. Whenever this subpart imposes a requirement on loans made by intermediaries from ``Agency IRP loan funds,'' without specific reference to the IRP revolving fund, such requirement shall apply only to loans made by an intermediary using Agency IRP loan funds, and will not apply to loans made from revolved funds.
I11(b) T3Maintenance of IRP revolving fund.G1T1 For as long as any part of an IRP loan to an intermediary remains unpaid, the intermediary must maintain the IRP revolving fund. All Agency IRP loan funds received by an intermediary must be deposited into an IRP revolving fund. The intermediary may transfer additional assets into the IRP revolving fund. All cash of the IRP revolving fund shall be deposited in a separate bank account or accounts. No other funds of the intermediary will be commingled with such money. All moneys deposited in such bank account or accounts shall be money of the IRP revolving fund. Loans to ultimate recipients are advanced from the IRP revolving fund. The receivables created by making loans to ultimate recipients, the intermediary's security interest in collateral pledged by ultimate recipients, collections on the receivables, interest, fees, and any other income or assets derived from the operation of the IRP revolving fund are a part of the IRP revolving fund.
I11(1) The portion of the IRP revolving fund that consists of Agency IRP loan funds, on a last-in-first-out basis, may only be used for making loans in accordance with ï¿½1A4274.314 of this subpart. The portion of the IRP revolving fund which consists of revolved funds may be used for debt service, reasonable administrative costs, or reserves in accordance with this section, or for making additional loans.
I11(2) The intermediary must submit an annual budget of proposed administrative costs for Agency approval. The amount removed from the IRP revolving fund for administrative costs in ï¿½490ï¿½any year must be reasonable, must not exceed the actual cost of operating the IRP revolving fund, including loan servicing and providing technical assistance, and must not exceed the amount approved by the Agency in the intermediary's annual budget.
I11(3) A reasonable amount of revolved funds must be used to create a reserve for bad debts. Reserves must be accumulated over a period of years. The total amount should not exceed maximum expected losses, considering the quality of the intermediary's portfolio of loans. Unless the intermediary provides loss and delinquency records that, in the opinion of the Agency, justifies different amounts, a reserve for bad debts of 6 percent of outstanding loans must be accumulated over 3 years and then maintained.
I11(4) Any cash in the IRP revolving fund from any source that is not needed for debt service, approved administrative costs, or reasonable reserves must be available for additional loans to ultimate recipients.
I11(5) All reserves and other cash in the IRP revolving loan fund not immediately needed for loans to ultimate recipients or other authorized uses will be deposited in accounts in banks or other financial institutions. Such accounts will be fully covered by Federal deposit insurance or fully collateralized with U.S. Government obligations, and must be interest bearing. Any interest earned thereon remains a part of the IRP revolving fund.
I11(6) If an intermediary receives more than one IRP loan, it need not establish and maintain a separate IRP revolving loan fund for each loan; it may combine them and maintain only one IRP revolving fund, unless the Agency requires separate IRP revolving funds because there are significant differences in the loan purposes, work plans, loan agreements, or requirements for the loans. The Agency may allow loans with different requirements to be combined into one IRP revolving fund if the intermediary agrees in writing to operate the combined revolving funds in accordance with the most stringent requirements as required by the Agency.


I80ï¿½1A4274.333ï¿½094274.336
I89[Reserved]


I80ï¿½1A4274.337
I89Other regulatory requirements.
I11(a) T3Intergovernmental consultation.G1T1 The IRP is subject to the provisions of Executive Order 12372 which requires intergovernmental consultation with State and local officials. The approval of a loan to an intermediary will be the subject of intergovernmental consultation. For each ultimate recipient to be assisted with a loan from Agency IRP loan funds and for which the State in which the ultimate recipient is to be located has elected to review the program under their intergovernmental review process, the State Single Point of Contact must be notified. Notification, in the form of a project description, must be initiated by the intermediary or the ultimate recipient. Any comments from the State must be included with the intermediary's request to use the Agency loan funds for the ultimate recipient. Prior to the Agency's decision on the request, compliance with the requirements of intergovernmental consultation must be demonstrated for each ultimate recipient. (See RD Instruction 1940-J (available in any Rural Development State Office)).
I11(b) T3Environmental requirements.G1T1 (1) Unless specifically modified by this section, the requirements of part 1940, subpart G, of this title apply to this subpart. Intermediaries and ultimate recipients must consider the potential environmental impacts of their projects at the earliest planning stages and develop plans to minimize the potential to adversely impact the environment. Both the intermediaries and the ultimate recipients must cooperate and furnish such information and assistance as the Agency needs to make any of its environmental determinations.
I11(2) For each application for a loan to an intermediary, the Agency will review the application, supporting materials, and any environmental information required from the intermediary and complete a Class II environmental assessment. This assessment will focus on the potential cumulative impacts of the projects as well as any environmental concerns or problems that are associated with individual projects ï¿½491ï¿½that can be identified at this time. Neither the completion of the environmental assessment nor the approval of the application is an Agency commitment to the use of loan funds for a specific project; therefore, no public notification requirements for a Class II assessment will apply to the application.
I11(3) For each proposed loan from an intermediary to an ultimate recipient using Agency IRP loan funds, the Agency will complete the environmental review required by part 1940, subpart G, of this title including public notification requirements. The results of this review will be used by the Agency in making its decision on concurrence in the proposed loan. The Agency will prepare an Environmental Impact Statement for any application for a loan from Agency IRP loan funds determined to have a significant effect on the quality of the human environment.
I11(c) T3Equal opportunity and nondiscrimination requirements.G1T1 (1) In accordance with title V of Pub. L. 93ï¿½09495, the Equal Credit Opportunity Act, and section 504 of the Rehabilitation Act for Federally Conducted Programs and Activities, neither the intermediary nor the Agency will discriminate against any employee, intermediary, or proposed ultimate recipient on the basis of sex, marital status, race, color, religion, national origin, age, physical or mental disability (provided the proposed intermediary or proposed ultimate recipient has the capacity to contract), because all or part of the proposed intermediary's or proposed ultimate recipient's income is derived from public assistance of any kind, or because the proposed intermediary or proposed ultimate recipient has in good faith exercised any right under the Consumer Credit Protection Act, with respect to any aspect of a credit transaction anytime Agency loan funds are involved.
I11(2) The regulations contained in subpart E of part 1901 of this title apply to this program.
I11(3) The Administrator will assure that equal opportunity and nondiscrimination requirements are met in accordance with the Equal Credit Opportunity Act, title VI of the Civil Rights Act of 1964, ``Nondiscrimination in Federally Assisted Programs,'' 42 U.S.C. 2000dï¿½094, Section 504 of the Rehabilitation Act for Federally Conducted Programs and Activities, the Age Discrimination Act of 1975, and the Americans With Disabilities Act.
I11(d) T3Seismic safety of new building construction.G1T1 (1) The Intermediary Relending Program is subject to the provisions of Executive Order 12699 that requires each Federal agency assisting in the financing, through Federal grants or loans, or guaranteeing the financing, through loan or mortgage insurance programs, of newly constructed buildings to assure appropriate consideration of seismic safety.
I11(2) All new buildings financed with Agency IRP loan funds shall be designed and constructed in accordance with the seismic provisions of one of the following model building codes or the latest edition of that code providing an equivalent level of safety to that contained in the latest edition of the National Earthquake Hazard Reduction Programs (NEHRP) Recommended Provisions for the Development of Seismic Regulations for New Building (NEHRP Provisions):
I11(i) 1991 International Conference of Building Officials (ICBO) Uniform Building Code;
I11(ii) 1993 Building Officials and Code Administrators International, Inc. (BOCA) National Building Code; or
I11(iii) 1992 Amendments to the Southern Building Code Congress International (SBCCI) Standard Building Code.
I11(3) The date, signature, and seal of a registered architect or engineer and the identification and date of the model building code on the plans and specifications shall be evidence of compliance with the seismic requirements of the appropriate code.


I80ï¿½1A4274.338
I89Loan agreements between the Agency and the intermediary.
I11A loan agreement or a supplement to a previous loan agreement must be executed by the intermediary and the Agency at loan closing for each loan. The loan agreement will be prepared by the Agency and reviewed by the intermediary prior to loan closing.
I11(a) The loan agreement will, as a minimum, set out:
I11(1) The amount of the loan;
ï¿½492ï¿½I11(2) The interest rate;
I11(3) The term and repayment schedule;
I11(4) T3The provisions for late charges.G1T1 The intermediary shall pay a late charge of 4 percent of the payment due if payment is not received within 15 calendar days following the due date. The late charge shall be considered unpaid if not received within 30 calendar days of the missed due date for which it was imposed. Any unpaid late charge shall be added to principal and be due as an extra payment at the end of the term. Acceptance of a late charge by the Agency does not constitute a waiver of default;
I11(5) T3The disbursement procedure.G1T1 Disbursement of loan funds by the Agency to the intermediary shall take place after the loan agreement and promissory note are executed, and any other conditions precedent to disbursement of funds are fully satisfied. For purposes of computing interest, the date of each draw down shall constitute the date the funds are advanced under the loan agreement;
I11(i) The intermediary may initially draw up to 25 percent of the loan funds. If the intermediary does not have loans to ultimate recipients ready to close sufficient to use the initial draw, the funds must be deposited in an interest bearing account in accordance with ï¿½1A4274.332(b)(5) until needed for such loans. The initial draw must be used for loans to ultimate recipients before any additional Agency IRP loan funds may be drawn by the intermediary. Any funds from the initial draw that have not been used for loans to ultimate recipients within 1 year from the date of the draw must be returned to the Agency as an extra payment on the loan. Agency IRP loan funds must not be used for administrative expenses;
I11(ii) After the initial draw of funds, an intermediary may draw down only such funds as are necessary to cover a 30-day period in implementing its approved work plan. Advances must be requested by the intermediary in writing;
I11(6) T3The provisions regarding default.G1T1 On the occurrence of any event of default, the Agency may declare all or any portion of the debt and interest to be immediately due and payable and may proceed to enforce its rights under the loan agreement or any other instruments securing or relating to the loan and in accordance with the applicable law and regulations. Any of the following may be regarded as an ``event of default'' in the sole discretion of the Agency:
I11(i) Failure of the intermediary to carry out the specific activities in its loan application as approved by the Agency or comply with the loan terms and conditions of the loan agreement, any applicable Federal or State laws, or with such USDA or Agency regulations as may become applicable;
I11(ii) Failure of the intermediary to pay within 15 calendar days of its due date any installment of principal or interest on its promissory note to the Agency;
I11(iii) The occurrence of;
I11(A) The intermediary becoming insolvent, or ceasing, being unable, or admitting in writing its inability to pay its debts as they mature, or making a general assignment for the benefit of, or entering into any composition or arrangement with creditors, or;
I11(B) Proceedings for the appointment of a receiver, trustee, or liquidator of the intermediary, or of a substantial part of its assets, being authorized or instituted by or against it;
I11(iv) Submission or making of any report, statement, warranty, or representation by the intermediary or agent on its behalf to USDA or the Agency in connection with the financial assistance awarded hereunder which is false, incomplete, or incorrect in any material respect; or
I11(v) Failure of the intermediary to remedy any material adverse change in its financial or other condition (such as the representational character of its board of directors or policymaking body) arising since the date of the Agency's award of assistance hereunder, which condition was an inducement to Agency's original award.
I11(7) T3The insurance requirements.G1T1 (i) Hazard insurance with a standard mortgage clause naming the intermediary as beneficiary will be required by the intermediary on every ultimate recipient's project funded from the IRP revolving fund in an amount that is at least the lesser of the depreciated replacement value of the property being ï¿½493ï¿½insured or the amount of the loan. Hazard insurance includes fire, windstorm, lightning, hail, business interruption, explosion, riot, civil commotion, aircraft, vehicle, marine, smoke, builder's risk, public liability, property damage, flood or mudslide, or any other hazard insurance that may be required to protect the security. The intermediary's interest in the insurance will be assigned to the Agency, upon the Agency's request, in the event of default by the intermediary.
I11(ii) Ordinarily, life insurance, which may be decreasing term insurance, is required for the principals and key employees of the ultimate recipient funded from the IRP revolving fund and will be assigned or pledged to the intermediary and subsequently, in the event of request by the Agency following default by the intermediary, to the Agency. A schedule of life insurance available for the benefit of the loan will be included as part of the application.
I11(iii) Workmen's compensation insurance on ultimate recipients is required in accordance with the State law.
I11(iv) T3Flood insurance.G1T1 The intermediary is responsible for determining if an ultimate recipient funded from the IRP revolving fund is located in a special flood or mudslide hazard area. If the ultimate recipient is in a flood or mudslide area, then flood or mudslide insurance must be provided in accordance with subpart B of part 1806 of this chapter.
I11(v) Intermediaries will provide fidelity bond coverage for all persons who have access to intermediary funds. Coverage may be provided either for all individual positions or persons, or through ``blanket'' coverage providing protection for all appropriate employees and officials. The Agency may also require the intermediary to carry other appropriate insurance, such as public liability, workers compensation, and property damage.
I11(A) The amount of fidelity bond coverage required by the Agency will normally approximate the total annual debt service requirements for the Agency loans;
I11(B) Other types of coverage may be considered acceptable if it is determined by the Agency that they fulfill essentially the same purpose as a fidelity bond;
I11(C) Intermediaries must provide evidence of adequate fidelity bond and other appropriate insurance coverage by loan closing. Adequate coverage in accordance with this section must then be maintained for the life of the loan. It is the responsibility of the intermediary to assure and provide evidence that adequate coverage is maintained. This may consist of a listing of policies and coverage amounts in reports required by paragraph (b)(4) of this section or other documentation.
I11(b) The intermediary will agree in the loan agreement:
I11(1) Not to make any changes in the intermediary's articles of incorporation, charter, or by-laws without the concurrence of the Agency;
I11(2) Not to make a loan commitment to an ultimate recipient to be funded from Agency IRP loan funds without first receiving the Agency's written concurrence;
I11(3) To maintain a separate ledger and segregated account for the IRP revolving fund;
I11(4) To Agency reporting requirements by providing:
I11(i) An annual audit;
I11(A) Dates of audit report period need not necessarily coincide with other reports on the IRP. Audit reports shall be due 90 days following the audit period. Audits must cover all of the intermediary's activities. Audits will be performed by an independent certified public accountant. An acceptable audit will be performed in accordance with Generally Accepted Government Auditing Standards and include such tests of the accounting records as the auditor considers necessary in order to express an opinion on the financial condition of the intermediary. The Agency does not require an unqualified audit opinion as a result of the audit. Compilations or reviews do not satisfy the audit requirement;
I11(B) It is not intended that audits required by this subpart be separate and apart from audits performed in accordance with State and local laws or for other purposes. To the extent feasible, the audit work should be done in connection with these audits. Intermediaries covered by OMB Circular Aï¿½09ï¿½494ï¿½128 or Aï¿½09133 should submit audits made in accordance with those circulars;
I11(ii) Quarterly or semiannual reports (due 30 days after the end of the period);
I11(A) Reports will be required quarterly during the first year after loan closing and, if all loan funds are not utilized during the first year, quarterly reports will be continued until at least 90 percent of the Agency IRP loan funds have been advanced to ultimate recipients. Thereafter, reports will be required semiannually. Also, the Agency may require quarterly reports if the intermediary becomes delinquent in repayment of its loan or otherwise fails to fully comply with the provisions of its work plan or Loan Agreement, or the Agency determines that the intermediary's IRP revolving fund is not adequately protected by the current sound worth and paying capacity of the ultimate recipients.
I11(B) These reports shall contain information only on the IRP revolving loan fund, or if other funds are included, the IRP loan program portion shall be segregated from the others; and in the case where the intermediary has more than one IRP revolving fund from the Agency a separate report shall be made for each of the IRP revolving funds.
I11(C) The reports will include, on a form provided by the Agency, information on the intermediary's lending activity, income and expenses, financial condition, and a summary of names and characteristics of the ultimate recipients the intermediary has financed.
I11(iii) Annual proposed budget for the following year; and
I11(iv) Other reports as the Agency may require from time to time.
I11(5) Before the first relending of Agency funds to an ultimate recipient, to obtain written Agency approval of;
I11(i) All forms to be used for relending purposes, including application forms, loan agreements, promissory notes, and security instruments;
I11(ii) Intermediary's policy with regard to the amount and form of security to be required;
I11(6) To obtain written approval of the Agency before making any significant changes in forms, security policy, or the work plan. The servicing officer may approve changes in forms, security policy, or work plans at any time upon a written request from the intermediary and determination by the Agency that the change will not jeopardize repayment of the loan or violate any requirement of this subpart or other Agency regulations. The intermediary must comply with the work plan approved by the Agency so long as any portion of the intermediary's IRP loan is outstanding;
I11(7) To secure the indebtedness by pledging the IRP revolving fund, including its portfolio of investments derived from the proceeds of the loan award, and pledging its real and personal property and other rights and interests as the Agency may require;
I11(8) In the event the intermediary's financial condition deteriorates or the intermediary takes action detrimental to prudent fund operation or fails to take action required of a prudent lender, to provide additional security, execute any additional documents, and undertake any reasonable acts the Agency may request, to protect the agency's interest or to perfect a security interest in any assets, including physical delivery of assets and specific assignments; and
I11(9) That if any part of the loan has not been used in accordance with the intermediary's work plan by a date three years from the date of the loan agreement, the Agency may cancel the approval of any funds not yet delivered to the intermediary and the intermediary will return, as an extra payment on the loan, any funds delivered to the intermediary that have not been used by the intermediary in accordance with the work plan. The Agency, at its sole discretion, may allow the intermediary additional time to use the loan funds by delaying cancellation of the funds by not more than 3 additional years. If any loan funds have not been used by 6 years from the date of the loan agreement, the approval will be canceled of any funds that have not been delivered to the intermediary and the intermediary will return, as an extra payment on the loan, any funds it has received and not used in accordance with the work plan. In accordance with the Intermediary Relending Program promissory note, regular loan payments will be based on the amount ï¿½495ï¿½of funds actually drawn by the intermediary.


I80ï¿½1A424.339ï¿½094274.342
I89[Reserved]


I80ï¿½1A4274.343
I89Application.
I11(a) The application will consist of:
I11(1) An application form provided by the Agency.
I11(2) A written work plan and other evidence the Agency requires to demonstrate the feasibility of the intermediary's program to meet the objectives of this program. The plan must, at a minimum:
I11(i) Document the intermediary's ability to administer IRP in accordance with the provisions of this subpart. In order to adequately demonstrate the ability to administer the program, the intermediary must provide a complete listing of all personnel responsible for administering this program along with a statement of their qualifications and experience. The personnel may be either members or employees of the intermediary's organization or contract personnel hired for this purpose. If the personnel are to be contracted for, the contract between the intermediary and the entity providing such service will be submitted for Agency review, and the terms of the contract and its duration must be sufficient to adequately service the Agency loan through to its ultimate conclusion. If the Agency determines the personnel lack the necessary expertise to administer the program, the loan request will not be approved;
I11(ii) Document the intermediary's ability to commit financial resources under the control of the intermediary to the establishment of IRP. This should include a statement of the sources of non-Agency funds for administration of the intermediary's operations and financial assistance for projects;
I11(iii) Demonstrate a need for loan funds. As a minimum, the intermediary should identify a sufficient number of proposed and known ultimate recipients it has on hand to justify Agency funding of its loan request, or include well developed targeting criteria for ultimate recipients consistent with the intermediary's mission and strategy for IRP, along with supporting statistical or narrative evidence that such prospective recipients exist in sufficient numbers to justify Agency funding of the loan request;
I11(iv) Include a list of proposed fees and other charges it will assess the ultimate recipients;
I11(v) Demonstrate to Agency satisfaction that the intermediary has secured commitments of significant financial support from public agencies and private organizations;
I11(vi) Provide evidence to Agency satisfaction that the intermediary has a proven record of obtaining private or philanthropic funds for the operation of similar programs to IRP;
I11(vii) Include the intermediary's plan (specific loan purposes) for relending the loan funds. The plan must be of sufficient detail to provide the Agency with a complete understanding of what the intermediary will accomplish by lending the funds to the ultimate recipient and the complete mechanics of how the funds will get from the intermediary to the ultimate recipient. The service area, eligibility criteria, loan purposes, fees, rates, terms, collateral requirements, limits, priorities, application process, method of disposition of the funds to the ultimate recipient, monitoring of the ultimate recipient's accomplishments, and reporting requirements by the ultimate recipient's management are some of the items that must be addressed by the intermediary's relending plan;
I11(viii) Provide a set of goals, strategies, and anticipated outcomes for the intermediary's program. Outcomes should be expressed in quantitative or observable terms such as jobs created for low income area residents or self empowerment opportunities funded, and should relate to the purpose of IRP (see ï¿½1A4274.301(b)); and
I11(ix) Provide specific information as to whether and how the intermediary will ensure that technical assistance is made available to ultimate recipients and potential ultimate recipients. Describe the qualifications of the technical assistance providers, the nature of technical assistance that will be available, and expected and committed sources of funding for technical assistance. If other than the intermediary ï¿½496ï¿½itself, describe the organizations providing such assistance and the arrangements between such organizations and the intermediary.
I11(3) Environmental information on a form provided by the Agency for all projects positively identified as proposed ultimate recipient loans that are Class I or Class II actions under subpart G of part 1940 of this title;
I11(4) Comments from the State Single Point of Contact, if the State has elected to review the program under Executive Order 12372;
I11(5) A T3pro formaG1T1 balance sheet at start-up and projected balance sheets for at least 3 additional years; financial statements for the last 3 years, or from inception of the operations of the intermediary if less than 3 years; and projected cash flow and earnings statements for at least 3 years supported by a list of assumptions showing the basis for the projections. The projected earnings statement and balance sheet must include one set of projections that shows the IRP revolving fund only and a separate set of projections that shows the proposed intermediary organization's total operations. Also, if principal repayment on the IRP loan will not be scheduled during the first 3 years, the projections for the IRP revolving fund must extend to include a year with a full annual installment on the IRP loan;
I11(6) A written agreement of the intermediary to the Agency audit requirements;
I11(7) An agreement on a form provided by the Agency assuring compliance with
I11Title VI of the Civil Rights Act of 1964;
I11(8) Complete organizational documents, including evidence of authority to conduct the proposed activities;
I11(9) Evidence that the loan is not available at reasonable rates and terms from private sources or other Federal, State, or local programs;
I11(10) Latest audit report, if available;
I11(11) A form provided by the Agency in which the applicant certifies its understanding of the Federal collection policies for consumer or commercial debts;
I11(12) A Department of Agriculture form containing a certification regarding debarment, suspension, and other responsibility matters for primary covered transactions; and
I11(13) A statement on a form provided by the Agency regarding lobbying, as required by 7 CFR part 3018.
I11(b) Applications from intermediaries that already have an active IRP loan may be streamlined as follows:
I11(1) The requirements of paragraphs (a)(6), (a)(8), and (a)(10) of this section may be omitted;
I11(2) A statement that the new loan would be operated in accordance with the work plan on file for the previous loan may be submitted in lieu of a new work plan; and
I11(3) The financial information required by paragraph (a)(5) of this section may be limited to projections for the proposed new IRP revolving loan fund.


I80ï¿½1A4274.344
I89Filing and processing applications for loans.
I11(a) T3Intermediaries' contactG1T1. Intermediaries desiring assistance under this subpart may file applications with the state office for the state in which the intermediary's headquarters is located. Intermediaries headquartered in the District of Columbia may file the application with the National Office, Rural Business-Cooperative Service, USDA, Specialty Lenders Division, STOP 1521, 1400 Independence Avenue SW, Washington, DC 20250ï¿½091521.
I11(b) T3Filing applicationsG1T1. Intermediaries must file the complete application, in one package. Applications received by the Agency will be reviewed and ranked quarterly and funded in the order of priority ranking. The Agency will retain unsuccessful applications for consideration in subsequent reviews, through a total of four quarterly reviews.
I11(c) T3Loan prioritiesG1T1. Priority consideration will be given to proposed intermediaries. Points will be allowed only for factors indicated by well documented, reasonable plans which, in the opinion of the Agency, provide assurance that the items have a high probability of being accomplished. The points awarded will be as specified in paragraphs (c)(1) through (c)(6) of this section. If an application does not fit one of the categories listed, it receives ï¿½497ï¿½no points for that paragraph or subparagraph.
I11(1) T3Other fundsG1T1. Points allowed under this paragraph are to be based on documented successful history or written evidence that the funds are available.
I11(i) The intermediary will obtain non-Federal loan or grant funds to pay part of the cost of the ultimate recipients' projects. The amount of funds from other sources will average:
I11(A) At least 10% but less than 25% of the total project cost_5 points;
I11(B) At least 25% but less than 50% of the total project cost_10 points; or
I11(C) 50% or more of the total project cost_15 points.
I11(ii) The intermediary will provide loans to the ultimate recipient from its own funds (not loan or grant) to pay part of the costs of the ultimate recipients' projects. The amount of non-Agency derived intermediary funds will average:
I11(A) At least 10% but less than 25% of the total project costs_5 points;
I11(B) At least 25% but less than 50% of total project costs_10 points; or
I11(C) 50% or more of total project costs_15 points.
I11(2) T3Employment.G1T1 For computations under this paragraph, income data should be from the latest decennial census of the United States, updated according to changes in the consumer price index. The poverty line used will be as defined in section 673 (2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)). Unemployment data used will be that published by the Bureau of Labor Statistics, U.S. Department of Labor.
I11(i) The median household income in the service area of the proposed intermediary equals the following percentage of the poverty line for a family of four:
I11(A) At least 150% but not more than 175%_5 points;
I11(B) At least 125% but less than 150%_10 points; or
I11(C) Below 125%_15 points.
I11(ii) The following percentage of the loans the intermediary makes from Agency IRP loan funds will be in counties with median household income below 80 percent of the statewide non-metropolitan median household income. (To receive priority points under this category, the intermediary must provide a list of counties in the service area that have qualifying income):
I11(A) At least 50% but less than 75%_5 points;
I11(B) At least 75% but less than 100%_10 points; or
I11(C) 100%_15 points.
I11(iii) The unemployment rate in the intermediary's service area equals the following percentage of the national unemployment rate:
I11(A) At least 100% but less than 125%_5 points;
I11(B) At least 125% but less 150%_10 points; or
I11(C) 150% or more_15 points.
I11(iv) The intermediary will require, as a condition of eligibility for a loan to an ultimate recipient from Agency IRP loan funds, that the ultimate recipient certify in writing that it will employ the following percentage of its workforce from members of families with income below the poverty line:
I11(A) At least 10% but less than 20% of the workforce_5 points;
I11(B) At least 20% but less than 30% of the workforce_10 points; or
I11(C) 30% of the workforce or more_15 points.
I11(v) The intermediary has a demonstrated record of providing assistance to members of underrepresented groups, has a realistic plan for targeting loans to members of underrepresented groups, and, based on the intermediary's record and plans, it is expected that the following percentages of its loans made from Agency IRP loan funds will be made to entities owned by members of underrepresented groups:
I11(A) At least 10% but less than 20%_5 points;
I11(B) At least 20% but less than 30%_10 points; or
I11(C) 30% or more_15 points.
I11(vi) The population of the service area according to the most recent decenial census was lower than that recorded by the previous decenial census by the following percentage:
I11(A) At least 10 percent but less than 20 percent_5 points;
I11(B) At least 20 percent but less than 30 percent_10 points; or
I11(C) 30 percent or more_15 points.
ï¿½498ï¿½I11(3) T3Intermediary contribution.G1T1 All assets of the IRP revolving fund will serve as security for the IRP loan, and the intermediary will contribute funds not derived from the Agency into the IRP revolving fund along with the proceeds of the IRP loan. The amount of non-Agency derived funds contributed to the IRP revolving fund will equal the following percentage of the Agency IRP loan:
I11(i) At least 5% but less than 15%_15 points;
I11(ii) At least 15% but less than 25%_30 points; or
I11(iii) 25% or more_50 points.
I11(4) T3Experience.G1T1 The intermediary has actual experience in making and servicing commercial loans, with a successful record, for the following number of full years:
I11(i) At least 1 but less than 3 years_5 points;
I11(ii) At least 3 but less than 5 years_10 points;
I11(iii) At least 5 but less than 10 years_20 points; or
I11(iv) 10 or more years_30 points.
I11(5) T3Community representation.G1T1 The service area is not more than 14 counties and the intermediary utilizes local opinions and experience by including community representatives on its board of directors or equivalent oversight board. For purposes of this section, community representatives are people, such as civic leaders, business representatives, or bankers, who reside in the service area and are not employees of the intermediary. Points will be assigned as follows:
I11(i) At least 10% but less than 40% of the board members are community representatives_5 points;
I11(ii) At least 40% but less than 75% of the board members are community representatives_10 points; or
I11(iii) At least 75% of the board members are community representatives_15 points.
I11(6) T3Administrative.G1T1 The Administrator may assign up to 35 additional points to an application to account for the following items not adequately covered by the other priority criteria set out in this section. The items that may be considered are the amount of funds requested in relation to the amount of need; a particularly successful business development record; a service area with no other IRP coverage; a service area with severe economic problems, such as communities that have remained persistently poor over the last 60 years or have experienced long-term population decline or job deterioration; a service area with emergency conditions caused by a natural disaster or loss of a major industry; a work plan that is in accord with a strategic plan, particularly a plan prepared as part of a request for an Empowerment Zone/Enterprise Community designation; or excellent utilization of a previous IRP loan.


I80ï¿½1A4274.345ï¿½094274.349
I89[Reserved]


I80ï¿½1A4274.350
I89Letter of conditions.
I11If the Agency is able to make the loan, it will provide the intermediary a letter of conditions listing all requirements for the loan. Immediately after reviewing the conditions and requirements in the letter of conditions, the intermediary should complete, sign and return the form provided by the Agency indicating the intermediary's intent to meet the conditions. If certain conditions cannot be met, the intermediary may propose alternate conditions to the Agency. The Agency loan approval official must concur with any changes made to the initially issued or proposed letter of conditions prior to acceptance.


I80ï¿½1A4274.351ï¿½094274.354
I89[Reserved]


I80ï¿½1A4274.355
I89Loan approval and obligating funds.
I11The loan will be considered approved on the date the signed copy of the obligation of funds document is mailed to the intermediary. The approving official may request an obligation of funds when available and according to the following:
I11(a) The obligation of funds document may be executed by the loan approving official providing the intermediary has the legal authority to contract for a loan and to enter into required agreements, and has signed the obligation of funds document.
I11(b) An obligation of funds established for an intermediary may be transferred to a different (substituted) intermediary provided:
ï¿½499ï¿½I11(1) The substituted intermediary is eligible to receive the assistance approved for the original intermediary;
I11(2) The substituted intermediary bears a close and genuine relationship to the original intermediary; and
I11(3) The need for and scope of the project and the purposes for which Agency IRP loan funds will be used remain substantially unchanged.


I80ï¿½1A4274.356
I89Loan closing.
I11(a) At loan closing, the intermediary must certify to the following:
I11(1) No major changes have been made in the work plan except those approved in the interim by the Agency.
I11(2) All requirements of the letter of conditions have been met.
I11(3) There has been no material change in the intermediary nor its financial condition since the issuance of the letter of conditions. If there have been changes, they must be explained. The changes may be waived, at the sole discretion of the Agency.
I11(4) That no claim or liens of laborers, materialmen, contractors, subcontractors, suppliers of machinery and equipment, or other parties are pending against the security of the intermediary, and that no suits are pending or threatened that would adversely affect the security of the intermediary when the security instruments are filed.
I11(b) The processing officer will approve only minor changes which do not materially affect the project, its capacity, employment, original projections, or credit factors. Changes in legal entities or where tax consideration are the reason for change will not be approved.


I80ï¿½1A4274.357ï¿½094274.360
I89[Reserved]


I80ï¿½1A4274.361
I89Requests to make loans to ultimate recipients.
I11(a) An intermediary may use revolved funds to make loans to ultimate recipients without obtaining prior Agency concurrence. When an intermediary proposes to use Agency IRP loan funds to make a loan to an ultimate recipient, and prior to final approval of such loan, Agency concurrence is required.
I11(b) A request for Agency concurrence in approval of a proposed loan to an ultimate recipient must include:
I11(1) Certification by the intermediary that;
I11(i) The proposed ultimate recipient is eligible for the loan;
I11(ii) The proposed loan is for eligible purposes;
I11(iii) The proposed loan complies with all applicable statutes and regulations;
I11(iv) The ultimate recipient is unable to finance the proposed project through commercial credit or other Federal, State, or local programs at reasonable rates and terms; and
I11(v) The intermediary and its principal officers (including immediate family) hold no legal or financial interest or influence in the ultimate recipient, and the ultimate recipient and its principal officers (including immediate family) hold no legal or financial interest or influence in the intermediary except the interest and influence of a cooperative member when the intermediary is a cooperative;
I11(2) For projects that meet the criteria for a Class I or Class II environmental assessment or environmental impact statement as provided in subpart G of part 1940 of this title, a completed and executed request for environmental information on a form provided by the Agency;
I11(3) All comments obtained in accordance with ï¿½1A4274.337(a), regarding intergovernmental consultation;
I11(4) Copies of sufficient material from the ultimate recipient's application and the intermediary's related files, to allow the Agency to determine the:
I11(i) Name and address of the ultimate recipient;
I11(ii) Loan purposes;
I11(iii) Interest rate and term;
I11(iv) Location, nature, and scope of the project being financed;
I11(v) Other funding included in the project; and
I11(vi) Nature and lien priority of the collateral.
I11(5) Such other information as the Agency may request on specific cases.


ï¿½500ï¿½I80ï¿½1A4274.362ï¿½094274.372
I89[Reserved]


I80ï¿½1A4274.373
I89Appeals.
I11Any appealable adverse decision made by the Agency which affects the intermediary may be appealed in accordance with USDA appeal regulations found at 7 CFR part 11.


I80ï¿½1A4274.374ï¿½094274.380
I89[Reserved]


I80ï¿½1A4274.381
I89Exception authority.
I11The Administrator may, in individual cases, grant an exception to any requirement or provision of this subpart which is not inconsistent with any applicable law, provided the Administrator determines that application of the requirement or provision would adversely affect USDA's interest.


I80ï¿½1A4274.382ï¿½094274.399
I89[Reserved]


I80ï¿½1A4274.400
I89OMB control number.
I11The reporting and recordkeeping requirements contained in this regulation have been approved by the Office of Management and Budget under the provisions of 44 U.S.C. chapter 35 and have been assigned OMB control number 0570ï¿½090021 in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507).





I95Pt. 4279
I52PART 4279_GUARANTEED LOANMAKING 


I86Subpart A_General
S8006I18Sec. 
S8010I264279.1Purpose. 
I264279.2Definitions and abbreviations.
I264279.3_4279.14[Reserved] 
I264279.15Exception authority. 
I264279.16Appeals. 
I264279.17_4279.28[Reserved] 
I264279.29Eligible lenders. 
I264279.30Lenders' functions and responsibilities. 
I264279.31_4279.42[Reserved] 
I264279.43Certified Lender Program. 
I264279.44Access to records. 
I264279.45_4279.57[Reserved] 
I264279.58Equal Credit Opportunity Act. 
I264279.59[Reserved] 
I264279.60Civil Rights Impact Analysis 
I264279.61_4279.70[Reserved] 
I264279.71Publicbodies and nonprofit corporations. 
I264279.72Conditions of guarantee. 
I264279.73_4279.74[Reserved] 
I264279.75Sale or assignment of guaranteed loan. 
I264279.76Participation. 
I264279.77Minimum retention. 
I264279.78Repurchase from holder. 
I264279.79_4279.83[Reserved] 
I264279.84Replacement of document. 
I264279.85_4279.99[Reserved] 
I264279.100OMB control number. 

I86Subpart B_Business and Industry Loans 
I264279.101Introduction. 
I264279.102Definitions. 
I264279.103Exception authority. 
I264279.104Appeals. 
I264279.105_4279.106[Reserved] 
I264279.107Guarantee fee. 
I264279.108Eligible borrowers. 
I264279.109_4279.112[Reserved] 
I264279.113Eligible loan purposes. 
I264279.114Ineligible purposes. 
I264279.115Prohibition under Agency programs. 
I264279.116_4279.118[Reserved] 
I264279.119Loan guarantee limits. 
I264279.120Fees and charges. 
I264279.121_4279.124[Reserved] 
I264279.125Interest rates. 
I264279.126Loan terms. 
I264279.127_4279.130[Reserved] 
I264279.131Credit quality. 
I264279.132_4279.136[Reserved] 
I264279.137Financial statements. 
I264279.138_4279.142[Reserved] 
I264279.143Insurance. 
I264279.144Appraisals. 
I264279.145_4279.148[Reserved] 
I264279.149Personal and corporate guarantees. 
I264279.150Feasibility studies. 
I264279.151_4279.154[Reserved] 
I264279.155Loan priorities. 
I264279.156Planning and performing development. 
I264279.157_4279.160[Reserved] 
I264279.161Filing preapplications and applications. 
I264279.162_4279.164[Reserved] 
I264279.165Evaluation of application. 
I264279.166_4279.172[Reserved] 
I264279.173Loan approval and obligating funds. 
I264279.174Transfer of lenders. 
I264279.175_4279.179[Reserved] 
I264279.180Changes in borrower. 
I264279.181Conditions precedent to issuance of Loan Note Guarantee. 
I264279.182_4279.185[Reserved] 
I264279.186Issuance of the guarantee. 
I264279.187Refusal to execute Loan Note Guarantee. 
I264279.188_4279.199[Reserved] 
I264279.200OMBcontrol number. 

Q04I21T5Authority:  T15 U.S.C. 301; 7 U.S.C. 1989.
Q04I21T5Source:  T161 FR 67633, Dec. 23, 1996, unless otherwise noted.

ï¿½501ï¿½I56Subpart A_General 

I80ï¿½1A4279.1 
I89Purpose. 
I11(a) This subpart contains general regulations for making and servicing Business and Industry (B&I) loans guaranteed by the Agency and applies to lenders, holders, borrowers and other parties involved in making, guaranteeing, holding, servicing, or liquidating such loans. 
I11(b) It is the responsibility of the lender to ascertain that all requirements for making, securing, servicing, and collecting the loan are complied with. 
I11(c) Copies of all forms, regulations, and Instructions referenced in this subpart are available in any Agency office. Whenever a form is designated in this subpart, that designation includes predecessor and successor forms, if applicable, as specified by the field or National Office. 

I80ï¿½1A4279.2 
I89Definitions and abbreviations. 
I11(a) T3DefinitionsG1T1. 

I11T3Agency.G1T1 The Rural Business-Cooperative Service or successor Agency assigned by the Secretary of Agriculture to administer the B&I program. References to the National Office, Finance Office, State Office or other Agency offices or officials should be read as prefaced by Agency or ``Rural Development'' as applicable. 
I11T3Arm's-length transaction.G1T1 The sale, release, or disposition of assets in which the title to the property passes to a ready, willing, and able disinterested third party that is not affiliated with or related to and has no security, monetary or stockholder interest in the borrower or transferor at the time of the transaction. 
I11T3Assignment Guarantee Agreement (Business and Industry).G1T1 Form 4279ï¿½096, the signed agreement among the Agency, the lender, and the holder containing the terms and conditions of an assignment of a guaranteed portion of a loan, using the single note system. 
I11T3Borrower.G1T1 All parties liable for the loan except for guarantors. 
I11T3Conditional Commitment (Business and Industry).G1T1 Form 4279ï¿½093, the Agency's notice to the lender that the loan guarantee it has requested is approved subject to the completion of all conditions and requirements set forth by the Agency. 
I11T3Deficiency balance.G1T1 The balance remaining on a loan after all collateral has been liquidated. 
I11T3Deficiency judgment.G1T1 A monetary judgment rendered by a court of competent jurisdiction after foreclosure and liquidation of all collateral securing the loan. 
I11T3Existing lender debt.G1T1 A debt not guaranteed by the Agency, but owed by a borrower to the same lender that is applying for or has received the Agency guarantee. 
I11T3Fair market value.G1T1 The price that could reasonably be expected for an asset in an arm's-length transaction between a willing buyer and a willing seller under ordinary economic and business conditions. 
I11T3Farmers Home Administration (FmHA).G1T1 The former agency of USDA that previously administered the programs of this Agency. Many Instructions and forms of FmHA are still applicable to Agency programs. 
I11T3Finance office.G1T1 The office which maintains the Agency financial accounting records located in St. Louis, Missouri. 
I11T3High-impact business.G1T1 A business that offers specialized products and services that permit high prices for the products produced, may have a strong presence in international market sales, may provide a market for existing local business products and services, and which is locally owned and managed. 
I11T3Holder.G1T1 A person or entity, other than the lender, who owns all or part of the guaranteed portion of the loan with no servicing responsibilities. When the single note option is used and the lender assigns a part of the guaranteed note to an assignee, the assignee becomes a holder only when the Agency receives notice and the transaction is completed through use of Form 4279ï¿½096 or predecessor form. 
I11T3Interim financing.G1T1 A temporary or short-term loan made with the clear intent that it will be repaid through another loan. Interim financing is frequently used to pay construction and other costs associated with a planned project, with permanent financing to be obtained after project completion. 
ï¿½502ï¿½I11T3Lender.G1T1 The organization making, servicing, and collecting the loan which is guaranteed under the provisions of the appropriate subpart. 
I11T3Lender's Agreement (Business and Industry).G1T1 Form 4279ï¿½094 or predecessor form between the Agency and the lender setting forth the lender's loan responsibilities when the Loan Note Guarantee is issued. 
I11T3Loan agreement.G1T1 The agreement between the borrower and lender containing the terms and conditions of the loan and the responsibilities of the borrower and lender. 
I11T3Loan Note Guarantee (Business and Industry).G1T1 Form 4279ï¿½095 or predecessor form issued and executed by the Agency containing the terms and conditions of the guarantee. 
I11T3Loan-to-value.G1T1 The ratio of the dollar amount of a loan to the dollar value of the collateral pledged as security for the loan. 
I11T3Natural resource value-added product.G1T1 Any naturally occurring product that is processed to add value to the product. For example, straw is processed into particle board. 
I11T3Negligent servicing.G1T1 The failure to perform those services which a reasonably prudent lender would perform in servicing (including liquidation of) its own portfolio of loans that are not guaranteed. The term includes not only the concept of a failure to act, but also not acting in a timely manner, or acting in a manner contrary to the manner in which a reasonably prudent lender would act. 
I11T3Parity.G1T1 A lien position whereby two or more lenders share a security interest of equal priority in collateral. In the event of default, each lender will be affected on a T3pro rataG1T1 basis. 
I11T3Participation.G1T1 Sale of an interest in a loan by the lender wherein the lender retains the note, collateral securing the note, and all responsibility for loan servicing and liquidation. 
I11T3Poor.G1T1 A community or area is considered poor if, based on the most recent decennial census data, either the county, city, or census tract where the community or area is located has a median household income at or below the poverty line for a family of four; has a median household income below the nonmetropolitan median household income for the State; or has a population of which 25 percent or more have income at or below the poverty line. 
I11T3Promissory note.G1T1 Evidence of debt. ``Note'' or ``Promissory note'' shall also be construed to include ``Bond'' or other evidence of debt where appropriate. 
I11T3Rural Development.G1T1 The Under Secretary for Rural Development has policy and operational oversight responsibilities for RHS, RBS, and RUS. 
I11T3Spreadsheet.G1T1 A table containing data from a series of financial statements of a business over a period of time. Financial statement analysis normally contains spreadsheets for balance sheet items and income statements and may include funds flow statement data and commonly used ratios. The spreadsheets enable a reviewer to easily scan the data, spot trends, and make comparisons. 
I11T3State.G1T1 Any of the 50 States, the Commonwealth of Puerto Rico, the Virgin Islands of the United States, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands. 
I11T3Subordination.G1T1 An agreement between the lender and borrower whereby lien priorities on certain assets pledged to secure payment of the guaranteed loan will be reduced to a position junior to, or on parity with, the lien position of another loan in order for the Agency borrower to obtain additional financing, not guaranteed by the Agency, from the lender or a third party. 
I11T3Veteran.G1T1 For the purposes of assigning priority points, a veteran is a person who is a veteran of any war, as defined in section 101(12) of title 38, United States Code. 
I11(b) T3Abbreviations.G1T1


Q02 


I25B&I_Business and Industry 
I25CF_Community Facilities 
I25CLP_Certified Lender Program 
I25FSA_Farm Service Agency 
I25FMI_Forms Manual Insert 
I25NAD_National Appeals Division 
I25OGC_Office of the General Counsel 
I25RBS_Rural Business-Cooperative Service 
I25RHS_Rural Housing Service 
I25RUS_Rural Utilities Service 
I25SBA_Small Business Administration 
I25USDA_United States Department of Agriculture 

ï¿½503ï¿½I80ï¿½1A4279.3_4279.14
I89[Reserved] 

I80ï¿½1A4279.15
I89Exception authority. 
I11The Administrator may, in individual cases, grant an exception to any requirement or provision of this subpart which is not inconsistent with any applicable law provided, the Administrator determines that application of the requirement or provision would adversely affect USDA's interest. 

I80ï¿½1A4279.16
I89Appeals. 
I11Only the borrower, lender, or holder can appeal an Agency decision made under this subpart. In cases where the Agency has denied or reduced the amount of final loss payment to the lender, the adverse decision may be appealed by the lender only. An adverse decision that only impacts the holder may be appealed by the holder only. A decision by a lender adverse to the interest of the borrower is not a decision by the Agency, whether or not concurred in by the Agency. Appeals will be handled in accordance with 7 CFR, part 11. Any party adversely affected by an Agency decision under this subpart may request a determination of appealability from the Director, National Appeals Division, USDA, within 30 days of the adverse decision. 

I80ï¿½1A4279.17_4279.28
I89[Reserved] 

I80ï¿½1A4279.29
I89Eligible lenders. 
I11(a) T3Traditional lenders.G1T1 An eligible lender is any Federal or State chartered bank, Farm Credit Bank, other Farm Credit System institution with direct lending authority, Bank for Cooperatives, Savings and Loan Association, or mortgage company that is part of a bank-holding company. These entities must be subject to credit examination and supervision by either an agency of the United States or a State. Eligible lenders may also include credit unions provided, they are subject to credit examination and supervision by either the National Credit Union Administration or a State agency, and insurance companies provided they are regulated by a State or National insurance regulatory agency. Eligible lenders include the National Rural Utilities Cooperative Finance Corporation. 
I11(b) T3Other lenders.G1T1 Rural Utilities Service borrowers and other lenders not meeting the criteria of paragraph (a) of this section may be considered by the Agency for eligibility to become a guaranteed lender provided, the Agency determines that they have the legal authority to operate a lending program and sufficient lending expertise and financial strength to operate a successful lending program. 
I11(1) Such a lender must: 
I11(i) Have a record of successfully making at least three commercial loans annually for at least the most recent 3 years, with delinquent loans not exceeding 10 percent of loans outstanding and historic losses not exceeding 10 percent of dollars loaned, or when the proposed lender can demonstrate that it has personnel with equivalent previous experience and where the commercial loan portfolio was of a similar quantity and quality; and 
I11(ii) Have tangible balance sheet equity of at least seven percent of tangible assets and sufficient funds available to disburse the guaranteed loans it proposes to approve within the first 6 months of being approved as a guaranteed lender. 
I11(2) A lender not eligible under paragraph (a) of this section that wishes consideration to become a guaranteed lender must submit a request in writing to the State Office for the State where the lender's lending and servicing activity takes place. The National Office will notify the prospective lender, through the State Director, whether the lender's request for eligibility is approved or rejected. If rejected, the reasons for the rejection will be indicated to the prospective lender in writing. The lender's written request must include: 
I11(i) Evidence showing that the lender has the necessary capital and resources to successfully meet its responsibilities. 
I11(ii) Copy of any license, charter, or other evidence of authority to engage in the proposed loanmaking and servicing activities. If licensing by the State is not required, an attorney's opinion to this effect must be submitted. 
I11(iii) Information on lending experience, including length of time in the ï¿½504ï¿½lending business; range and volume of lending and servicing activity; status of loan portfolio including delinquency rate, loss rate as a percentage of loan amounts, and other measures of success; experience of management and loan officers; audited financial statements not more than 1 year old; sources of funds for the proposed loans; office location and proposed lending area; and proposed rates and fees, including loan origination, loan preparation, and servicing fees. Such fees must not be greater than those charged by similarly located commercial lenders in the ordinary course of business. 
I11(iv) An estimate of the number and size of guaranteed loan applications the lender will develop. 
I11(c) T3Expertise.G1T1 Loan guarantees will only be approved for lenders with adequate experience and expertise to make, secure, service, and collect B&I loans. 

I80ï¿½1A4279.30
I89Lenders' functions and responsibilities. 
I11(a) T3General.G1T1 (1) Lenders have the primary responsibility for the successful delivery of the B&I loan program. All lenders obtaining or requesting a B&I loan guarantee are responsible for:
I11(i) Processing applications for guaranteed loans,
I11(ii) Developing and maintaining adequately documented loan files,
I11(iii) Recommending only loan proposals that are eligible and financially feasible, 
I11(iv) Obtaining valid evidence of debt and collateral in accordance with sound lending practices,
I11(v) Supervising construction
I11(vi) Distribution of loan funds,
I11(vii) Servicing guaranteed loans in a prudent manner, including liquidation if necessary,
I11(viii) Following Agency regulations, and
I11(ix) Obtaining Agency approvals or concurrence as required.
I11(2) This subpart, along with subpart B of this part and subpart B of part 4287 of this chapter, contain the regulations for this program, including the lenders' responsibilities. 
I11(b) T3Credit evaluation.G1T1 This is a key function of all lenders during the loan processing phase. The lender must analyze all credit factors associated with each proposed loan and apply its professional judgment to determine that the credit factors, considered in combination, ensure loan repayment. The lender must have an adequate underwriting process to ensure that loans are reviewed by other than the originating officer. There must be good credit documentation procedures. 
I11(c) T3Environmental responsibilities.G1T1 Lenders have a responsibility to become familiar with Federal environmental requirements; to consider, in consultation with the prospective borrower, the potential environmental impacts of their proposals at the earliest planning stages; and to develop proposals that minimize the potential to adversely impact the environment. Lenders must alert the Agency to any controversial environmental issues related to a proposed project or items that may require extensive environmental review. Lenders must help the borrower prepare Form FmHA 1940ï¿½0920, ``Request for Environmental Information'' (when required by subpart G of part 1940 of this title); assist in the collection of additional data when the Agency needs such data to complete its environmental review of the proposal; and assist in the resolution of environmental problems. 
I11(d) T3Loan closing.G1T1 The lender will conduct loan closings. 

I80ï¿½1A4279.31_4279.42
I89[Reserved] 

I80ï¿½1A4279.43
I89Certified Lender Program. 
I11(a) T3General.G1T1 This section provides policies and procedures for the Certified Lender Program (CLP) for loans guaranteed under this part. The objectives are to expedite loan approval, making, and servicing. 
I11(b) T3CLP eligibility criteria.G1T1 The lender must meet established eligibility criteria as follows: 
I11(1) Be an ``eligible lender'' as defined in 4279.29 of this subpart and authorized to do business in the State in which CLP status is desired. 
I11(2) Demonstrate to the Agency's satisfaction that it has a thorough knowledge of commercial lending. The lender will demonstrate such knowledge by providing a summary of its guaranteed ï¿½505ï¿½and unguaranteed business lending activity. At a minimum, the summary must include the dollar amount and number of loans in the lender's portfolio, unguaranteed and guaranteed by any Federal agency, with information on delinquencies and losses and, if applicable, the performance of the lender as a Small Business Administration (SBA) certified or preferred lender. A certified lender must be recognized throughout the State as a commercial lender and have a track record of successfully making at least five commercial loans per year for at least the most recent 5 years, with delinquent commercial loans outstanding not exceeding 6 percent of commercial loans outstanding and historic losses not exceeding 6 percent of dollars loaned, or it must demonstrate that it has personnel with equivalent previous experience where the commercial loan portfolio was of a similar quantity and quality. The lender will provide a written certification to this effect along with a statistical analysis of its commercial loan portfolio for the last 3 of its fiscal years. 
I11(3) The percentage of guarantee will not exceed 80 percent. 
I11(4) If the lender is a bank or savings and loan, it must have a financial strength rating in the upper half of possible ratings as reported by a lender rating service selected by the Agency. 
I11(5) Possess loan officers and other appropriate personnel who have received training conducted by the Agency. Additional training may be required if the lender's contact person changes or if the Agency determines further instruction is needed. 
I11(6) Have committed no action within the most recent 2 years prior to requesting CLP status which would be considered cause for revoking CLP status under paragraph (e) of this section. 
I11(c) T3CLP approval.G1T1 The Agency may grant CLP status for a period not to exceed 5 years by executing Form 4279ï¿½098, ``Certified Lender, Business and Industry Program,'' with the lender. CLP status will not apply to branches or suboffices of the lender unless so specified in the agreement. Such branches or suboffices may submit loans as regular lenders or apply for their own CLP status. Any lender who desires CLP status must prepare a written request to the State Director where it desires CLP status. The request must address each of the required criteria outlined in paragraph (b) of this section, except paragraph (b)(3), and should be accompanied by any other information the lender believes will be helpful. The request will also include Form 4279ï¿½098 completed and executed by the lender and an executed Lender's Agreement if it does not already have a valid Lender's Agreement on file with the Agency. Loans made by the lender and guaranteed by the Agency prior to the lender receiving CLP status shall continue to be governed by the forms and agreements executed between the lender and the Agency for those loans. 
I11(d) T3Renewal of CLP status.G1T1 Renewal of CLP status is not automatic. CLP status will lapse upon the expiration date of Form 4279ï¿½098 unless the lender obtains a renewal. A lender whose CLP status has lapsed may continue to submit loan guarantee requests as a regular lender. A new Form 4279ï¿½098 completed and executed by the lender must be provided, along with a written update of the eligibility criteria required by this section for CLP approval. This information must be supplied at least 60 days prior to the expiration of the existing agreement to be assured of uninterrupted status. The information must address how the lender is complying with each of the required criteria described in paragraph (b) of this section. It must include any proposed changes in the designated persons for processing guaranteed loans or operating methods used in processing and servicing Agency guaranteed loans. 
I11(e) T3Revocation of CLP status.G1T1 The lender's CLP status may be revoked at any time for cause. The debarment of a lender is an additional alternative the Agency may consider. A lender which has lost its CLP status, but has not been debarred and still meets the requirements of ï¿½1A4279.29 of this subpart may continue to submit loan guarantee requests as a regular lender. Cause for revoking CLP status includes: 
I11(1) Failure to maintain status as an eligible lender as set forth in ï¿½1A4279.29 of this subpart; 
I11(2) Knowingly submitting false information when requesting a guarantee or ï¿½506ï¿½basing a guarantee request on information known to be false or which the lender should have known to be false; 
I11(3) Making a guaranteed loan with deficiencies which may cause losses not to be covered by the Loan Note Guarantee; 
I11(4) Conviction for acts in connection with any loan transaction whether or not the loan was guaranteed by the Agency; 
I11(5) Violation of usury laws in connection with any loan guaranteed by the Agency; 
I11(6) Failure to obtain the required security for any loan guaranteed by the Agency; 
I11(7) Using loan funds guaranteed by the Agency for purposes other than those specifically approved by the Agency in the Conditional Commitment; 
I11(8) Violation of any term of the Lender's Agreement; 
I11(9) Failure to correct any cited deficiency in loan documents in a timely manner; 
I11(10) Failure to submit reports required by the Agency in a timely manner; 
I11(11) Failure to process Agency guaranteed loans in a reasonably prudent manner; 
I11(12) Failure to provide for adequate construction planning and monitoring in connection with any loan to ensure that the project will be completed with the available funds and, once completed, will be suitable for the borrower's needs; 
I11(13) Repetitive recommendations for guaranteed loans with marginal or substandard credit quality or that do not comply with Agency requirements; 
I11(14) Repetitive recommendations for servicing actions that do not comply with Agency requirements; 
I11(15) Negligent servicing; or 
I11(16) Failure to conduct any approved liquidation of a loan guaranteed by the Agency or its predecessors in a timely and effective manner and in accordance with the approved liquidation plan. 
I11(f) T3General loan processing and servicing guidelines.G1T1 All requests for guaranteed loans will be processed and serviced under subparts A and B of this part and subpart B of part 4287 of this chapter except as modified by this section. When determining whether or not to request a guarantee for a proposed loan, lenders must consider the priorities set forth in ï¿½1A279.155 of subpart B of this part. 
I11(1) Prior to processing an application, the CLP lender may give written notice to the State Director of its intention to submit an application. Upon receipt of such written notice, the Agency will notify the CLP lender whether or not there is sufficient guarantee authority for the loan. Such guarantee authority will be held for 30 days pending receipt of the application. If a complete application for which guarantee authority is being held is not received within 30 days of the notice of intent to file or is rejected, the guarantee authority for this application will no longer be held in reserve. Notwithstanding the preceding, no guarantee authority will be held in reserve the last 60 days of the Agency's fiscal year. 
I11(2) Refinancing of existing lender debt in accordance with ï¿½1A4279.113(q) of subpart B of this part will not be permitted without prior Agency approval. 
I11(3) CLP lenders will process all guaranteed loans as a ``complete application'' by obtaining and completing all items required by ï¿½1A4279.161(b) of subpart B of this part. The CLP lender must maintain all information required by ï¿½1A4279.161(b) in its loan file and determine that such material complies with all requirements. 
I11(4) CLP lenders will make all material relating to any guarantee application available to the Agency upon request. 
I11(5) At the time of the Agency's issuance of the Loan Note Guarantee, the CLP lender will provide the Agency with copies of the following documents: 
I11(i) Executed Loan Agreement; 
I11(ii) Executed Promissory Notes; and 
I11(iii) Executed security documents including personal and corporate guarantees. 
I11(g) T3Unique characteristics of the CLP.G1T1 A proposed loan by a CLP lender requires a review by the Agency of the information submitted by the lender, plus satisfactory completion of the environmental review process by the Agency. The Agency may rely on the lender's credit analysis. 
ï¿½507ï¿½I11(1) The following will constitute a complete application submitted by a CLP lender: 
I11(i) Form 4279ï¿½091, ``Application for Loan Guarantee (Business and Industry),'' (marked with the letters ``CLP'' at the top) completed in its entirety and executed by the borrower and CLP lender; 
I11(ii) Copy of the proposed Loan Agreement or a list of proposed requirements; 
I11(iii) Form FmHA 1940ï¿½0920, completed and signed, with attachments; 
I11(iv) The lender's complete written analysis of the proposal, including spreadsheets of the balance sheets and income statements for the 3 previous years (for existing businesses), pro forma balance sheet at startup, and 2 years projected yearend balance sheets and income statements, with appropriate ratios and comparisons with industry standards (such as Dun & Bradstreet or Robert Morris Associates). All data must be shown in total dollars and also in common size form, obtained by expressing all balance sheet items as a percentage of assets and all income and expense items as a percentage of sales. The lender's credit analysis must include the borrower's management, repayment ability including a cash flow analysis, history of debt repayment, necessity of any debt refinancing, and the credit reports of the borrower, its principals, and any parent, affiliate, or subsidiary; 
I11(v) Intergovernmental consultation comments in accordance with 7 CFR part 3015, subpart V; and 
I11(vi) If the loan will exceed $1 million and will increase direct employment by more than 50 employees, Form 4279ï¿½092, ``Certification of Non-Relocation and Market Capacity Information Report,'' must be completed by the lender. For such loans, the Agency will submit Form 4279ï¿½092 to the Department of Labor and obtain clearance before a Conditional Commitment may be issued. 
I11(2) The Agency will make the final credit decision based primarily on a review of the credit analysis submitted by the lender and approval of the Agency's completed environmental analysis, if required, except that refinancing of existing lender debt in accordance with ï¿½1A4279.113(q) of subpart B of this part will not be approved without a credit analysis by the Agency of the borrower's complete financial statements; and completion by the Agency of the environmental analysis. The Agency may request such additional information as it determines is needed to make a decision. 
I11(h) T3Lender loan servicing responsibilities.G1T1 CLP lenders will be fully responsible for all aspects of loan servicing and, if necessary, liquidation as described in subpart B of part 4287 of this chapter. 

I80ï¿½1A4279.44 
I89Access to records. 
I11The lender will permit representatives of the Agency (or other agencies of the United States) to inspect and make copies of any records of the lender pertaining to the Agency guaranteed loans during regular office hours of the lender or at any other time upon agreement between the lender and the Agency. 

I80ï¿½1A4279.45_4279.57
I89[Reserved] 

I80ï¿½1A4279.58 
I89Equal Credit Opportunity Act. 
I11In accordance with title V of Public Law 93ï¿½09495, the Equal Credit Opportunity Act, with respect to any aspect of a credit transaction, neither the lender nor the Agency will discriminate against any applicant on the basis of race, color, religion, national origin, sex, marital status or age (providing the applicant has the capacity to contract), or because all or part of the applicant's income derives from a public assistance program, or because the applicant has, in good faith, exercised any right under the Consumer Protection Act. The lender will comply with the requirements of the Equal Credit Opportunity Act as contained in the Federal Reserve Board's Regulation implementing that Act (see 12 CFR part 202). Such compliance will be accomplished prior to loan closing. 

I80ï¿½1A4279.59
I89[Reserved] 

I80ï¿½1A4279.60 
I89Civil Rights Impact Analysis 
I11The Agency is responsible for ensuring that all requirements of FmHA Instruction 2006ï¿½09P, ``Civil Rights Impact ï¿½508ï¿½Analysis'' are met and will complete the appropriate level of review in accordance with that instruction. 

I80ï¿½1A4279.61_4279.70
I89[Reserved] 

I80ï¿½1A4279.71 
I89Public bodies and nonprofit corporations. 
I11Any public body or nonprofit corporation that receives a guaranteed loan that meets the thresholds established by OMB Circulars Aï¿½09128 or Aï¿½09133 or successor regulations or circulars must provide an audit in accordance with the applicable circular or regulation for the fiscal year (of the borrower) in which the Loan Note Guarantee is issued. If the loan is for development or purchases made in a previous fiscal year through interim financing, an audit will also be provided for the fiscal year in which the development or purchases occurred. Any audit provided by a public body or nonprofit corporation in compliance with OMB Circulars Aï¿½09128 or Aï¿½09133 or their successors will be considered adequate to meet the audit requirements of the B&I program for that year. 

I80ï¿½1A4279.72 
I89Conditions of guarantee. 
I11A loan guarantee under this part will be evidenced by a Loan Note Guarantee issued by the Agency. Each lender will execute a Lender's Agreement. If a valid Lender's Agreement already exists, it is not necessary to execute a new Lender's Agreement with each loan guarantee. The provisions of this part and part 4287 of this chapter will apply to all outstanding guarantees. In the event of a conflict between the guarantee documents and these regulations as they exist at the time the documents are executed, the regulations will control. 
I11(a) T3Full faith and credit.G1T1 A guarantee under this part constitutes an obligation supported by the full faith and credit of the United States and is incontestable except for fraud or misrepresentation of which a lender or holder has actual knowledge at the time it becomes such lender or holder or which a lender or holder participates in or condones. The guarantee will be unenforceable to the extent that any loss is occasioned by a provision for interest on interest. In addition, the guarantee will be unenforceable by the lender to the extent any loss is occasioned by the violation of usury laws, negligent servicing, or failure to obtain the required security regardless of the time at which the Agency acquires knowledge thereof. Any losses occasioned will be unenforceable to the extent that loan funds are used for purposes other than those specifically approved by the Agency in its Conditional Commitment. The Agency will guarantee payment as follows: 
I11(1) To any holder, 100 percent of any loss sustained by the holder on the guaranteed portion of the loan and on interest due on such portion. 
I11(2) To the lender, the lesser of: 
I11(i) Any loss sustained by the lender on the guaranteed portion, including principal and interest evidenced by the notes or assumption agreements and secured advances for protection and preservation of collateral made with the Agency's authorization; or 
I11(ii) The guaranteed principal advanced to or assumed by the borrower and any interest due thereon. 
I11(b) T3Rights and liabilities.G1T1 When a guaranteed portion of a loan is sold to a holder, the holder shall succeed to all rights of the lender under the Loan Note Guarantee to the extent of the portion purchased. The lender will remain bound to all obligations under the Loan Note Guarantee, Lender's Agreement, and the Agency program regulations. A guarantee and right to require purchase will be directly enforceable by a holder notwithstanding any fraud or misrepresentation by the lender or any unenforceability of the guarantee by the lender, except for fraud or misrepresentation of which the holder had actual knowledge at the time it became the holder or in which the holder participates or condones. In the event of material fraud, negligence or misrepresentation by the lender or the lender's participation in or condoning of such material fraud, negligence or misrepresentation, the lender will be liable for payments made by the Agency to any holder. 
I11(c) T3Payments.G1T1 A lender will receive all payments of principal and interest on account of the entire loan and will promptly remit to the holder its T3pro ï¿½509ï¿½rataG1T1 share thereof, determined according to its respective interest in the loan, less only the lender's servicing fee. 

I80ï¿½1A4279.73_4279.74
I89[Reserved] 

I80ï¿½1A4279.75 
I89Sale or assignment of guaranteed loan. 
I11The lender may sell all or part of the guaranteed portion of the loan on the secondary market or retain the entire loan. The lender shall not sell or participate any amount of the guaranteed or unguaranteed portion of the loan to the borrower or members of the borrower's immediate families, officers, directors, stockholders, other owners, or a parent, subsidiary or affiliate. If the lender desires to market all or part of the guaranteed portion of the loan at or subsequent to loan closing, such loan must not be in default. Loans made with the proceeds of any obligation the interest on which is excludable from income under 26 U.S.C. 103 (interest on State and local banks) or any successor section will not be guaranteed. 
I11(a) T3Single note system.G1T1 The entire loan is evidenced by one note, and one Loan Note Guarantee is issued. The lender may assign all or part of the guaranteed portion of the loan to one or more holders by using the Agency's Assignment Guarantee Agreement. The holder, upon written notice to the lender and the Agency, may reassign the unpaid guaranteed portion of the loan sold under the Assignment Guarantee Agreement. Upon notification and completion of the assignment through the use of Form 4279ï¿½096, the assignee shall succeed to all rights and obligations of the holder thereunder. If this option is selected, the lender may not at a later date cause any additional notes to be issued. 
I11(b) T3Multinote system.G1T1 Under this option the lender may provide one note for the unguaranteed portion of the loan and no more than 10 notes for the guaranteed portion. When this option is selected by the lender, the holder will receive one of the borrower's executed notes and a Loan Note Guarantee. The Agency will issue a Loan Note Guarantee for each note, including the unguaranteed note, to be attached to the note. An Assignment Guarantee Agreement will not be used when the multinote option is utilized. 
I11(c) T3After loan closing.G1T1 If a loan is closed using the multinote option and at a later date additional notes are desired, the lender may cause a series of new notes, so that the total number of notes issued does not exceed the total number provided for in paragraph (b) of this section, to be issued as replacement for previously issued guaranteed notes, provided: 
I11(1) Written approval of the Agency is obtained; 
I11(2) The borrower agrees and executes the new notes; 
I11(3) The interest rate does not exceed the interest rate in effect when the loan was closed; 
I11(4) The maturity date of the loan is not changed; 
I11(5) The Agency will not bear or guarantee any expenses that may be incurred in reference to such reissuances of notes; 
I11(6) There is adequate collateral securing the notes; 
I11(7) No intervening liens have arisen or have been perfected and the secured lien priority is better or remains the same; and 
I11(8) All holders agree. 
I11(d) T3Termination of lender servicing fee.G1T1 The lender's servicing fee will stop when the Agency purchases the guaranteed portion of the loan from the secondary market. No such servicing fee may be charged to the Agency and all loan payments and collateral proceeds received will be applied first to the guaranteed loan and, when applied to the guaranteed loan, will be applied on a pro rata basis. 

I80ï¿½1A4279.76 
I89Participation. 
I11The lender may obtain participation in the loan under its normal operating procedures; however, the lender must retain title to the notes if any of them are unguaranteed and retain the lender's interest in the collateral. 

I80ï¿½1A4279.77 
I89Minimum retention. 
I11The lender is required to hold in its own portfolio a minimum of 5 percent of the total loan amount. The amount required to be maintained must be of the unguaranteed portion of the loan ï¿½510ï¿½and cannot be participated to another. The lender may sell the remaining amount of the unguaranteed portion of the loan only through participation. 

I80ï¿½1A4279.78 
I89Repurchase from holder. 
I11(a) T3Repurchase by lender.G1T1 A lender has the option to repurchase the unpaid guaranteed portion of the loan from a holder within 30 days of written demand by the holder when the borrower is in default not less than 60 days on principal or interest due on the loan; or the lender has failed to remit to the holder its pro rata share of any payment made by the borrower within 30 days of the lender's receipt thereof. The repurchase by the lender will be for an amount equal to the unpaid guaranteed portion of principal and accrued interest less the lender's servicing fee. The holder must concurrently send a copy of the demand letter to the Agency. The guarantee will not cover the note interest to the holder on the guaranteed loan accruing after 90 days from the date of the demand letter to the lender requesting the repurchase. The lender will accept an assignment without recourse from the holder upon repurchase. The lender is encouraged to repurchase the loan to facilitate the accounting of funds, resolve the problem, and prevent default, where and when reasonable. The lender will notify the holder and the Agency of its decision. 
I11(b) T3Agency purchase.G1T1 (1) If the lender does not repurchase the unpaid guaranteed portion of the loan as provided in paragraph (a) of this section, the Agency will purchase from the holder the unpaid principal balance of the guaranteed portion together with accrued interest to date of repurchase, less the lender's servicing fee, within 30 days after written demand to the Agency from the holder. (This is in addition to the copy of the written demand on the lender.) The guarantee will not cover the note interest to the holder on the guaranteed loan accruing after 90 days from the date of the original demand letter of the holder to the lender requesting the repurchase. 
I11(2) The holder's demand to the Agency must include a copy of the written demand made upon the lender. The holder must also include evidence of its right to require payment from the Agency. Such evidence will consist of either the original of the Loan Note Guarantee properly endorsed to the Agency or the original of the Assignment Guarantee Agreement properly assigned to the Agency without recourse including all rights, title, and interest in the loan. The holder must include in its demand the amount due including unpaid principal, unpaid interest to date of demand, and interest subsequently accruing from date of demand to proposed payment date. The Agency will be subrogated to all rights of the holder. 
I11(3) The Agency will notify the lender of its receipt of the holder's demand for payment. The lender must promptly provide the Agency with the information necessary for the Agency to determine the appropriate amount due the holder. Upon request by the Agency, the lender will furnish a current statement certified by an appropriate authorized officer of the lender of the unpaid principal and interest then owed by the borrower on the loan and the amount then owed to any holder. Any discrepancy between the amount claimed by the holder and the information submitted by the lender must be resolved between the lender and the holder before payment will be approved. Such conflict will suspend the running of the 30 day payment requirement. 
I11(4) Purchase by the Agency neither changes, alters, nor modifies any of the lender's obligations to the Agency arising from the loan or guarantee nor does it waive any of Agency's rights against the lender. The Agency will have the right to set-off against the lender all rights inuring to the Agency as the holder of the instrument against the Agency's obligation to the lender under the guarantee. 
I11(c) T3Repurchase for servicing.G1T1 If, in the opinion of the lender, repurchase of the guaranteed portion of the loan is necessary to adequately service the loan, the holder must sell the guaranteed portion of the loan to the lender for an amount equal to the unpaid principal and interest on such portion less the lender's servicing fee. The guarantee will not cover the note interest to the holder on the guaranteed loan accruing ï¿½511ï¿½after 90 days from the date of the demand letter of the lender or the Agency to the holder requesting the holder to tender its guaranteed portion. The lender must not repurchase from the holder for arbitrage or other purposes to further its own financial gain. Any repurchase must only be made after the lender obtains the Agency's written approval. If the lender does not repurchase the portion from the holder, the Agency may, at its option, purchase such guaranteed portion for servicing purposes. 

I80ï¿½1A4279.79_4279.83
I89[Reserved] 

I80ï¿½1A4279.84 
I89Replacement of document. 
I11(a) The Agency may issue a replacement Loan Note Guarantee or Assignment Guarantee Agreement which was lost, stolen, destroyed, mutilated, or defaced to the lender or holder upon receipt of an acceptable certificate of loss and an indemnity bond. 
I11(b) When a Loan Note Guarantee or Assignment Guarantee Agreement is lost, stolen, destroyed, mutilated, or defaced while in the custody of the lender or holder, the lender will coordinate the activities of the party who seeks the replacement documents and will submit the required documents to the Agency for processing. The requirements for replacement are as follows: 
I11(1) A certificate of loss, notarized and containing a jurat, which includes: 
I11(i) Name and address of owner; 
I11(ii) Name and address of the lender of record; 
I11(iii) Capacity of person certifying; 
I11(iv) Full identification of the Loan Note Guarantee or Assignment Guarantee Agreement including the name of the borrower, the Agency's case number, date of the Loan Note Guarantee or Assignment Guarantee Agreement, face amount of the evidence of debt purchased, date of evidence of debt, present balance of the loan, percentage of guarantee, and, if an Assignment Guarantee Agreement, the original named holder and the percentage of the guaranteed portion of the loan assigned to that holder. Any existing parts of the document to be replaced must be attached to the certificate; 
I11(v) A full statement of circumstances of the loss, theft, or destruction of the Loan Note Guarantee or Assignment Guarantee Agreement; and 
I11(vi) For the holder, evidence demonstrating current ownership of the Loan Note Guarantee and Note or the Assignment Guarantee Agreement. If the present holder is not the same as the original holder, a copy of the endorsement of each successive holder in the chain of transfer from the initial holder to present holder must be included if in existence. If copies of the endorsement cannot be obtained, best available records of transfer must be submitted to the Agency (e.g., order confirmation, canceled checks, etc.). 
I11(2) An indemnity bond acceptable to the Agency shall accompany the request for replacement except when the holder is the United States, a Federal Reserve Bank, a Federal corporation, a State or territory, or the District of Columbia. The bond shall be with surety except when the outstanding principal balance and accrued interest due the present holder is less than $1 million verified by the lender in writing in a letter of certification of balance due. The surety shall be a qualified surety company holding a certificate of authority from the Secretary of the Treasury and listed in Treasury Department Circular 580. 
I11(3) All indemnity bonds must be issued and payable to the United States of America acting through the USDA. The bond shall be in an amount not less than the unpaid principal and interest. The bond shall hold USDA harmless against any claim or demand which might arise or against any damage, loss, costs, or expenses which might be sustained or incurred by reasons of the loss or replacement of the instruments. 
I11(4) In those cases where the guaranteed loan was closed under the provision of the multinote system, the Agency will not attempt to obtain, or participate in the obtaining of, replacement notes from the borrower. It will be the responsibility of the holder to bear costs of note replacement if the borrower agrees to issue a replacement instrument. Should such note be replaced, the terms of the note cannot be changed. If the evidence of debt has been lost, stolen, destroyed, mutilated or defaced, such evidence of debt must ï¿½512ï¿½be replaced before the Agency will replace any instruments. 

I80ï¿½1A4279.85_4279.99
I89[Reserved] 

I80ï¿½1A4279.100 
I89OMB control number.
I11The information collection requirements contained in this regulation have been approved by OMB and have been assigned OMB control number 0575ï¿½090171. Public reporting burden for this collection of information is estimated to vary from 1 hour to 8 hours per response, with an average of 4 hours per response, including time for reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Department of Agriculture, Clearance Officer, OIRM, Stop 7630, Washington, D.C. 20250. You are not required to respond to this collection of information unless it displays a currently valid OMB control number. 

I56Subpart B_Business and Industry Loans 

I80ï¿½1A4279.101 
I89Introduction. 
I11(a) T3Content.G1T1 This subpart contains loan processing regulations for the Business and Industry (B&I) Guaranteed Loan Program. It is supplemented by subpart A of this part, which contains general guaranteed loan regulations, and subpart B of part 4287 of this chapter, which contains loan servicing regulations. 
I11(b) T3Purpose.G1T1 The purpose of the B&I Guaranteed Loan Program is to improve, develop, or finance business, industry, and employment and improve the economic and environmental climate in rural communities. This purpose is achieved by bolstering the existing private credit structure through the guarantee of quality loans which will provide lasting community benefits. It is not intended that the guarantee authority will be used for marginal or substandard loans or for relief of lenders having such loans. 
I11(c) T3Documents.G1T1 Copies of all forms, regulations, and Instructions referenced in this subpart are available in any Agency office. 

I80ï¿½1A4279.102 
I89Definitions. 
I11The definitions and abbreviations in ï¿½1A4279.2 of subpart A of this part are applicable to this subpart. 

I80ï¿½1A4279.103 
I89Exception authority. 
I11Section 4279.15 of subpart A of this part applies to this subpart. 

I80ï¿½1A4279.104 
I89Appeals. 
I11Section 4279.16 of subpart A of this part applies to this subpart. 

I80ï¿½1A4279.105_4279.106
I89[Reserved] 

I80ï¿½1A4279.107 
I89Guarantee fee. 
I11The guarantee fee will be paid to the Agency by the lender and is nonrefundable. The fee may be passed on to the borrower. Except as provided in this section, the guarantee fee will be 2 percent multiplied by the principal loan amount multiplied by the percent of guarantee and will be paid one time only at the time the Loan Note Guarantee is issued. 
I11(a) The guarantee fee may be reduced to 1 percent if the Agency determines that the business meets the following criteria: 
I11(1) High impact business development investment (It is the goal of this program to encourage high impact business investment in rural areas. The weight given to business investments will be in accordance with ï¿½1A4279.155(b)(5) of this subpart); and 
I11(2) The business is located in a community that is experiencing long term population decline and job deterioration; or 
I11(3) The business is located in a rural community that has remained persistently poor over the last 60 years; or 
I11(4) The business is located in a rural community that is experiencing trauma as a result of natural disaster or that is experiencing fundamental structural changes in its economic base. 
I11(b) Each fiscal year, the Agency shall establish a limit on the maximum portion of guarantee authority available for that fiscal year that may be used to guarantee loans with a guarantee fee of 1 percent. The limit will be announced by publishing a notice in the T4Federal RegisterG1T1. Once the limit has been ï¿½513ï¿½reached, the guarantee fee for all additional loans obligated during the remainder of that fiscal year will be 2 percent. 

I80ï¿½1A4279.108 
I89Eligible borrowers. 
I11(a) T3Type of entity.G1T1 A borrower may be a cooperative, corporation, partnership, or other legal entity organized and operated on a profit or nonprofit basis; an Indian tribe on a Federal or State reservation or other Federally recognized tribal group; a public body; or an individual. A borrower must be engaged in or proposing to engage in a business. Business may include manufacturing, wholesaling, retailing, providing services, or other activities that will: 
I11(1) Provide employment; 
I11(2) Improve the economic or environmental climate; 
I11(3) Promote the conservation, development, and use of water for aquaculture; or 
I11(4) Reduce reliance on nonrenewable energy resources by encouraging the development and construction of solar energy systems. 
I11(b) T3Citizenship.G1T1 Individual borrowers must be citizens of the United States (U.S.) or reside in the U.S. after being legally admitted for permanent residence. Citizens and residents of the Republic of Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands shall be considered U.S. citizens. Corporations or other nonpublic body organization-type borrowers must be at least 51 percent owned by persons who are either citizens of the U.S. or reside in the U.S. after being legally admitted for permanent residence. 
I11(c) T3Rural area.G1T1 The business financed with a B&I Guaranteed Loan must be located in a rural area. Loans to borrowers with facilities located in both urban and rural areas will be limited to the amount necessary to finance the facility located in the eligible rural area. 
I11(1) Rural areas include all territory of a State that is: 
I11(i) Not within the outer boundary of any city having a population of 50,000 or more; and 
I11(ii) Not within an area that is urbanized or urbanizing as defined in this section. 
I11(2) All density determinations will be made on the basis of minor civil divisions or census county divisions as used by the Bureau of the Census in the latest decennial census of the U.S. In making the density calculations, large nonresidential tracts devoted to urban land uses such as railroad yards, airports, industrial sites, parks, golf courses, cemeteries, office parks, shopping malls, or land set aside for such purposes will be excluded. 
I11(3) An urbanized area is an area immediately adjacent to a city with a population of 50,000 or more, that for general social and economic purposes forms a single community with such a city. An urbanizing area is an area immediately adjacent to a city with a population of 50,000 or more with a population density of more than 100 persons per square mile or is an area with a population density of less than 100 persons per square mile which appears likely, based on development and population trends, to become urbanized in the foreseeable future. The corporate status of an urbanized or urbanizing area is not material. An area located in recognizable open country or separated from any city of 50,000 or more population by recognizable open country or by a river, will be assumed to be not urbanized or urbanizing. 
I11(d) T3Other credit.G1T1 All applications for assistance will be accepted and processed without regard to the availability of credit from any other source. 

I80ï¿½1A4279.109_4279.112
I89[Reserved] 

I80ï¿½1A4279.113 
I89Eligible loan purposes. 
I11Loan purposes must be consistent with the general purpose contained in ï¿½1A4279.101 of this subpart. They include but are not limited to the following: 
I11(a) Business and industrial acquisitions when the loan will keep the business from closing, prevent the loss of employment opportunities, or provide expanded job opportunities. 
I11(b) Business conversion, enlargement, repair, modernization, or development. 
I11(c) Purchase and development of land, easements, rights-of-way, buildings, or facilities. 
ï¿½514ï¿½I11(d) Purchase of equipment, leasehold improvements, machinery, supplies, or inventory. 
I11(e) Pollution control and abatement. 
I11(f) Transportation services incidental to industrial development. 
I11(g) Startup costs and working capital. 
I11(h) Agricultural production, when not eligible for Farm Service Agency (FSA) farmer program assistance and when it is part of an integrated business also involved in the processing of agricultural products. 
I11(1) Examples of potentially eligible production include but are not limited to: An apple orchard in conjunction with a food processing plant; poultry buildings linked to a meat processing operation; or sugar beet production coupled with storage and processing. Any agricultural production considered for B&I financing must be owned, operated, and maintained by the business receiving the loan for which a guarantee is provided. Independent agricultural production operations, even if not eligible for FSA farmer programs assistance, are not eligible for the B&I program. 
I11(2) The agricultural-production portion of any loan will not exceed 50 percent of the total loan or $1 million, whichever is less. 
I11(i) Purchase of membership, stocks, bonds, or debentures necessary to obtain a loan from Farm Credit System institutions and other lenders provided that the purchase is required for all of their borrowers. Purchase of startup cooperative stock for family-sized farms where commodities are produced to be processed by the cooperative. 
I11(j) Aquaculture, including conservation, development, and utilization of water for aquaculture. 
I11(k) Commercial fishing. 
I11(l) Commercial nurseries engaged in the production of ornamental plants and trees and other nursery products such as bulbs, flowers, shrubbery, flower and vegetable seeds, sod, and the growing of plants from seed to the transplant stage. 
I11(m) Forestry, which includes businesses primarily engaged in the operation of timber tracts, tree farms, and forest nurseries and related activities such as reforestation. 
I11(n) The growing of mushrooms or hydroponics. 
I11(o) Interest (including interest on interim financing) during the period before the first principal payment becomes due or when the facility becomes income producing, whichever is earlier. 
I11(p) Feasibility studies. 
I11(q) To refinance outstanding debt when it is determined that the project is viable and refinancing is necessary to improve cash flow and create new or save existing jobs. Existing lender debt may be included provided that, at the time of application, the loan has been current for at least the past 12 months (unless such status is achieved by the lender forgiving the borrower's debt), the lender is providing better rates or terms, and the refinancing is a secondary part (less than 50 percent) of the overall loan. 
I11(r) Takeout of interim financing. Guaranteeing a loan after project completion to pay off a lender's interim loan will not be treated as debt refinancing provided that the lender submits a complete preapplication or application which proposes such interim financing prior to completing the interim loan. A lender that is considering an interim loan should be advised that the Agency assumes no responsibility or obligation for interim loans advanced prior to the Conditional Commitment being issued. 
I11(s) Fees and charges for professional services and routine lender fees. 
I11(t) Agency guarantee fee. 
I11(u) Tourist and recreation facilities, including hotels, motels, and bed and breakfast establishments, except as prohibited under ineligible purposes. 
I11(v) Educational or training facilities. 
I11(w) Community facility projects which are not listed as an ineligible loan purpose such as convention centers. 
I11(x) Constructing or equipping facilities for lease to private businesses engaged in commercial or industrial operations. 
I11(y) The financing of housing development sites provided that the community demonstrates a need for additional housing to prevent a loss of jobs in the area or to house families moving to the ï¿½515ï¿½area as a result of new employment opportunities. 
I11(z) Community antenna television services or facilities. 
I11(aa) Provide loan guarantees to assist industries adjusting to terminated Federal agricultural programs or increased foreign competition. 

I80ï¿½1A4279.114 
I89Ineligible purposes. 
I11(a) Distribution or payment to an individual owner, partner, stockholder, or beneficiary of the borrower or a close relative of such an individual when such individual will retain any portion of the ownership of the borrower. 
I11(b) Projects in excess of $1 million that would likely result in the transfer of jobs from one area to another and increase direct employment by more than 50 employees. 
I11(c) Projects in excess of $1 million that would increase direct employment by more than 50 employees, if the project would result in an increase in the production of goods for which there is not sufficient demand, or if the availability of services or facilities is insufficient to meet the needs of the business. 
I11(d) Charitable institutions, churches, or church-controlled or fraternal organizations. 
I11(e) Lending and investment institutions and insurance companies. 
I11(f) Assistance to Government employees and military personnel who are directors or officers or have a major ownership of 20 percent or more in the business. 
I11(g) Racetracks for the conduct of races by professional drivers, jockeys, etc., where individual prizes are awarded in the amount of $500 or more. 
I11(h) Any business that derives more than 10 percent of annual gross revenue from gambling activity. 
I11(i) Any illegal business activity. 
I11(j) Prostitution. 
I11(k) Any line of credit. 
I11(l) The guarantee of lease payments. 
I11(m) The guarantee of loans made by other Federal agencies. 
I11(n) Owner-occupied housing. Bed and breakfasts, storage facilities, et al, are allowed when the pro rata value of the owner's living quarters is deleted. 
I11(o) Projects that are eligible for the Rural Rental Housing and Rural Cooperative Housing loans under sections 515, 521, and 538 of the Housing Act of 1949, as amended. 
I11(p) Loans made with the proceeds of any obligation the interest on which is excludable from income under 26 U.S.C. 103 or a successor statute. Funds generated through the issuance of tax-exempt obligations may neither be used to purchase the guaranteed portion of any Agency guaranteed loan nor may an Agency guaranteed loan serve as collateral for a tax-exempt issue. The Agency may guarantee a loan for a project which involves tax-exempt financing only when the guaranteed loan funds are used to finance a part of the project that is separate and distinct from the part which is financed by the tax-exempt obligation, and the guaranteed loan has at least a parity security position with the tax-exempt obligation. 
I11(q) The guarantee of loans where there may be, directly or indirectly, a conflict of interest or an appearance of a conflict of interest involving any action by the Agency. 
I11(r) Golf courses. 

I80ï¿½1A4279.115 
I89Prohibition under Agency programs. 
I11No B&I loans guaranteed by the Agency will be conditioned on any requirement that the recipients of such assistance accept or receive electric service from any particular utility, supplier, or cooperative. 

I80ï¿½1A4279.116_4279.118
I89[Reserved] 

I80ï¿½1A4279.119 
I89Loan guarantee limits. 
I11(a) T3Loan amount.G1T1 The total amount of Agency loans to one borrower, including the guaranteed and unguaranteed portions, the outstanding principal and interest balance of any existing Agency guaranteed loans, and new loan request, must not exceed $10 million. The Administrator may, at the Administrator's discretion, grant an exception to the $10 million limit under the following circumstances: 
I11(1) The project to be financed is a high-priority project. Priority will be ï¿½516ï¿½determined in accordance with the criteria contained in ï¿½1A4279.155 of this subpart; 
I11(2) The lender must document to the satisfaction of the Agency that the loan will not be made and the project will not be completed if the guarantee is not approved; and 
I11(3) Under no circumstances will the total amount of guaranteed loans to one borrower, including the guaranteed and unguaranteed portions, the outstanding principal and interest balance of any existing Agency guaranteed loans, and new loan request, exceed $25 million; 
I11(4) The percentage of guarantee will not exceed 60 percent. No exception to this requirement will be approved under paragraph (b) of this section for loans exceeding $10 million; and 
I11(5) Any request for a guaranteed loan exceeding the $10 million limit must be submitted to the Agency in the form of a preapplication. The preapplication must be submitted to the National Office for review and concurrence before encouraging a full application. 
I11(b) T3Percent of guarantee.G1T1 The percentage of guarantee, up to the maximum allowed by this section, is a matter of negotiation between the lender and the Agency. The maximum percentage of guarantee is 80 percent for loans of $5 million or less, 70 percent for loans between $5 and $10 million, and 60 percent for loans exceeding $10 million. Notwithstanding the preceding, the Administrator may, at the Administrator's discretion, grant an exception allowing guarantees of up to 90 percent on loans of $10 million or less under the following circumstances: 
I11(1) The project to be financed is a high-priority project. Priority will be determined in accordance with the criteria contained in 4279.155 of this subpart; 
I11(2) The lender must document to the satisfaction of the Agency that the loan will not be made and the project will not be completed if the higher guarantee percentage is not approved; and 
I11(3) The State Director may grant an exception for loans of up to 90 percent on loans of $2 million or less subject to the State Director's delegated loan authority and meeting all of the conditions as set forth in this section. In cases where the State Director does not have the loan approval authority to approve a loan of $2 million or less or the proposed percentage, the case must be submitted to the National Office for review. 
I11(4) Each fiscal year, the Agency will establish a limit on the maximum portion of guarantee authority available for that fiscal year that may be used to guarantee loans with a guarantee percentage exceeding 80 percent. The limit will be announced by publishing a notice in the T4Federal RegisterG1T1. Once the limit has been reached, the guarantee percentage for all additional loans guaranteed during the remainder of that fiscal year will not exceed 80 percent. 

I80ï¿½1A4279.120 
I89Fees and charges. 
I11(a) T3Routine lender fees.G1T1 The lender may establish charges and fees for the loan provided they are similar to those normally charged other applicants for the same type of loan in the ordinary course of business. 
I11(b) T3Professional services.G1T1 Professional services are those rendered by entities generally licensed or certified by States or accreditation associations, such as architects, engineers, packagers, accountants, attorneys, or appraisers. The borrower may pay fees for professional services needed for planning and developing a project provided that the amounts are reasonable and customary in the area. Professional fees may be included as an eligible use of loan proceeds. 

I80ï¿½1A4279.121_4279.124
I89[Reserved] 

I80ï¿½1A4279.125 
I89Interest rates. 
I11The interest rate for the guaranteed loan will be negotiated between the lender and the applicant and may be either fixed or variable as long as it is a legal rate. Interest rates will not be more than those rates customarily charged borrowers in similar circumstances in the ordinary course of business and are subject to Agency review and approval. Lenders are encouraged to utilize the secondary market and pass interest-rate savings on to the borrower. 
ï¿½517ï¿½I11(a) A variable interest rate agreed to by the lender and borrower must be a rate that is tied to a base rate agreed to by the lender and the Agency. The variable interest rate may be adjusted at different intervals during the term of the loan, but the adjustments may not be more often than quarterly and must be specified in the Loan Agreement. The lender must incorporate, within the variable rate Promissory Note at loan closing, the provision for adjustment of payment installments coincident with an interest-rate adjustment. The lender will ensure that the outstanding principal balance is properly amortized within the prescribed loan maturity to eliminate the possibility of a balloon payment at the end of the loan. 
I11(b) Any change in the interest rate between the date of issuance of the Conditional Commitment and before the issuance of the Loan Note Guarantee must be approved in writing by the Agency approval official. Approval of such a change will be shown as an amendment to the Conditional Commitment. 
I11(c) It is permissible to have one interest rate on the guaranteed portion of the loan and another rate on the unguaranteed portion of the loan provided that the rate on the guaranteed portion does not exceed the rate on the unguaranteed portion. 
I11(d) A combination of fixed and variable rates will be allowed. 

I80ï¿½1A4279.126 
I89Loan terms. 
I11(a) The maximum repayment for loans on real estate will not exceed 30 years; machinery and equipment repayment will not exceed the useful life of the machinery and equipment purchased with loan funds or 15 years, whichever is less; and working capital repayment will not exceed 7 years. The term for a loan that is being refinanced may be based on the collateral the lender will take to secure the loan. 
I11(b) The first installment of principal and interest will, if possible, be scheduled for payment after the project is operational and has begun to generate income. However, the first full installment must be due and payable within 3 years from the date of the Promissory Note and be paid at least annually thereafter. Interest-only payments will be paid at least annually from the date of the note. 
I11(c) Only loans which require a periodic payment schedule which will retire the debt over the term of the loan without a balloon payment will be guaranteed. 
I11(d) A loan's maturity will take into consideration the use of proceeds, the useful life of assets being financed, and the borrower's ability to repay the loan. The lender may apply the maximum guidelines specified above only when the loan cannot be repaid over a shorter term. 
I11(e) All loans guaranteed through the B&I program must be sound, with reasonably assured repayment. 

I80ï¿½1A4279.127_4279.130
I89[Reserved] 

I80ï¿½1A4279.131 
I89Credit quality. 
I11The lender is primarily responsible for determining credit quality and must address all of the elements of credit quality in a written credit analysis including adequacy of equity, cash flow, collateral, history, management, and the current status of the industry for which credit is to be extended. 
I11(a) T3Cash flow.G1T1 All efforts will be made to structure or restructure debt so that the business has adequate debt coverage and the ability to accommodate expansion. 
I11(b) T3Collateral.G1T1 (1) Collateral must have documented value sufficient to protect the interest of the lender and the Agency and, except as set forth in paragraph (b)(2) of this section, the discounted collateral value will be at least equal to the loan amount. Lenders will discount collateral consistent with sound loan-to-value policy. 
I11(2) Some businesses are predominantly cash-flow oriented, and where cash flow and profitability are strong, loan-to-value coverage may be discounted accordingly. A loan primarily based on cash flow must be supported by a successful and documented financial history. 
I11(c) T3Industry.G1T1 Current status of the industry will be considered and businesses in areas of decline will be required to provide strong business plans which outline how they differ from the ï¿½518ï¿½current trends. The regulatory environment surrounding the particular business or industry will be considered. 
I11(d) T3Equity.G1T1 A minimum of 10 percent tangible balance sheet equity will be required for existing businesses at the time the Loan Note Guarantee is issued. A minimum of 20 percent tangible balance sheet equity will be required for new businesses at the time the Loan Note Guarantee is issued. Tangible balance sheet equity will be determined in accordance with Generally Accepted Accounting Principles. Modifications to the equity requirements may be granted by the Administrator or designee. For the Administrator to consider a reduction in the equity requirement, the borrower must furnish the following: 
I11(1) Collateralized personal and corporate guarantees, including any parent, subsidiary, or affiliated company, when feasible and legally permissible (in accordance with 4279.149 of this subpart), and 
I11(2) Pro forma and historical financial statements which indicate the business to be financed meets or exceeds the median quartile (as identified in Robert Morris Associates Annual Statement Studies or similar publication) for the current ratio, quick ratio, debt-to-worth ratio, debt coverage ratio, and working capital. 
I11(e) T3Lien priorities.G1T1 The entire loan will be secured by the same security with equal lien priority for the guaranteed and unguaranteed portions of the loan. The unguaranteed portion of the loan will neither be paid first nor given any preference or priority over the guaranteed portion. A parity or junior position may be considered provided that discounted collateral values are adequate to secure the loan in accordance with paragraph (b) of this section after considering prior liens. 
I11(f) T3Management.G1T1 A thorough review of key management personnel will be completed to ensure that the business has adequately trained and experienced managers. 

I80ï¿½1A4279.132_4279.136
I89[Reserved] 

I80ï¿½1A4279.137 
I89Financial statements. 
I11(a) The lender will determine the type and frequency of submission of financial statements by the borrower. At a minimum, annual financial statements prepared by an accountant in accordance with Generally Accepted Accounting Principles will be required. 
I11(b) If specific circumstances warrant and the proposed guaranteed loan will exceed $3 million, the Agency may require annual audited financial statements. For example, the need for audited financial statements will be carefully considered in connection with loans that depend heavily on inventory and accounts receivable for collateral. 

I80ï¿½1A4279.138_4279.142
I89[Reserved] 

I80ï¿½1A4279.143 
I89Insurance. 
I11(a) T3Hazard.G1T1 Hazard insurance with a standard mortgage clause naming the lender as beneficiary will be required on every loan in an amount that is at least the lesser of the depreciated replacement value of the collateral or the amount of the loan. Hazard insurance includes fire, windstorm, lightning, hail, explosion, riot, civil commotion, aircraft, vehicle, marine, smoke, builder's risk during construction by the business, and property damage. 
I11(b) T3Life.G1T1 The lender may require life insurance to insure against the risk of death of persons critical to the success of the business. When required, coverage will be in amounts necessary to provide for management succession or to protect the business. The cost of insurance and its effect on the applicant's working capital must be considered as well as the amount of existing insurance which could be assigned without requiring additional expense. 
I11(c) T3Worker compensation.G1T1 Worker compensation insurance is required in accordance with State law. 
I11(d) T3Flood.G1T1 National flood insurance is required in accordance with 7 CFR, part 1806, subpart B (FmHA Instruction 426.2, available in any field office or the National Office). 
I11(e) T3Other.G1T1 Public liability, business interruption, malpractice, and other insurance appropriate to the borrower's particular business and circumstances will be considered and required when needed to protect the interests of the borrower. 

ï¿½519ï¿½I80ï¿½1A4279.144 
I89Appraisals. 
I11Lenders will be responsible for ensuring that appraisal values adequately reflect the actual value of the collateral. All real property appraisals associated with Agency guaranteed loanmaking and servicing transactions will meet the requirements contained in the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) of 1989 and the appropriate guidelines contained in Standards 1 and 2 of the Uniform Standards of Professional Appraisal Practices (USPAP). All appraisals will include consideration of the potential effects from a release of hazardous substances or petroleum products or other environmental hazards on the market value of the collateral. For additional guidance and information concerning the completion of real property appraisals, refer to subpart A of part 1922 of this title and to ``Standard Practices for Environmental Site Assessments: Transaction Screen Questionnaire'' and ``Phase I Environmental Site Assessment,'' both published by the American Society of Testing and Materials. Chattels will be evaluated in accordance with normal banking practices and generally accepted methods of determining value. 

I80ï¿½1A4279.145_4279.148
I89[Reserved] 

I80ï¿½1A4279.149 
I89Personal and corporate guarantees. 
I11(a) Personal and corporate guarantees, when obtained, are part of the collateral for the loan. However, the value of such guarantee is not considered in determining whether a loan is adequately secured for loanmaking purposes. 
I11(b) Personal and corporate guarantees for those owning greater than 20 percent of the borrower will be required where legally permissible, except as provided for in this section. Guarantees of parent, subsidiaries, or affiliated companies and secured guarantees may also be required. 
I11(c) Exceptions to the requirements for personal guarantees must be requested by the lender and concurred in by the Agency approval official on a case-by- case basis. The lender must document that collateral, equity, cash flow, and profitability indicate an above average ability to repay the loan. 

I80ï¿½1A4279.150 
I89Feasibility studies. 
I11A feasibility study by a qualified independent consultant may be required by the Agency for start-up businesses or existing businesses when the project will significantly affect the borrower's operations. An acceptable feasibility study should include, but not be limited to, economic, market, technical, financial, and management feasibility.

I80ï¿½1A4279.151_4279.154
I89[Reserved] 

I80ï¿½1A4279.155 
I89Loan priorities. 
I11Applications and preapplications received by the Agency will be considered in the order received; however, for the purpose of assigning priorities as described in paragraph (b) of this section, the Agency will compare an application to other pending applications. 
I11(a) When applications on hand otherwise have equal priority, applications for loans from qualified veterans will have preference. 
I11(b) Priorities will be assigned by the Agency to eligible applications on the basis of a point system as contained in this section. The application and supporting information will be used to determine an eligible proposed project's priority for available guarantee authority. All lenders, including CLP lenders, will consider Agency priorities when choosing projects for guarantee. The lender will provide necessary information related to determining the score, as requested. 
I11(1) T3Population priority.G1T1 Projects located in an unincorporated area or in a city with under 25,000 population (10 points). 
I11(2) T3Community priority.G1T1 The priority score for community will be the total score for the following categories: 
I11(i) Located in an eligible area of long term population decline and job deterioration based on reliable statistical data (5 points). 
I11(ii) Located in a rural community that has remained persistently poor over the last 60 years (5 points). 
I11(iii) Located in a rural community that is experiencing trauma as a result ï¿½520ï¿½of natural disaster or experiencing fundamental structural changes in its economic base (5 points). 
I11(iv) Located in a city or county with an unemployment rate 125 percent of the statewide rate or greater (5 points). 
I11(3) T3Empowerment Zone/Enterprise Community (EZ/EC).G1T1 (i) Located in an EZ/EC designated area (10 points). 
I11(ii) Located in a designated Champion Community (5 points). A Champion Community is a community which developed a strategic plan to apply for an EZ/EC designation, but not selected as a designated EZ/EC Community. 
I11(4) T3Loan features.G1T1 The priority score for loan features will be the total score for the following categories: 
I11(i) Lender will price the loan at the Wall Street Journal published Prime Rate plus 1.5 percent or less (5 points). 
I11(ii) Lender will price the loan at the Wall Street Journal published Prime Rate plus 1 percent or less (5 points). 
I11(iii) The Agency guaranteed loan is less than 50 percent of project cost (5 points). 
I11(iv) Percentage of guarantee is 10 or more percentage points less than the maximum allowable for a loan of its size (5 points).
I11(5) T3High impact business investment priorities.G1T1 The priority score for high impact business investment will be the total score for the following three categories: 
I11(i) T3Industry.G1T1 The priority score for industry will be the total score for the following, except that the total score for industry cannot exceed 10 points. 
I11(A) Industry that has 20 percent or more of its sales in international markets (5 points). 
I11(B) Industry that is not already present in the community (5 points). 
I11(ii) T3Business.G1T1 The priority score for business will be the total score for the following: 
I11(A) Business that offers high value, specialized products and services that command high prices (2 points). 
I11(B) Business that provides an additional market for existing local business (3 points). 
I11(C) Business that is locally owned and managed (3 points). 
I11(D) Business that will produce a natural resource value-added product (2 points). 
I11(iii) T3Occupations.G1T1 The priority score for occupations will be the total score for the following, except that the total score for job quality cannot exceed 10 points: 
I11(A) Business that creates jobs with an average wage exceeding 125 percent of the Federal minimum wage (5 points). 
I11(B) Business that creates jobs with an average wage exceeding 150 percent of the Federal minimum wage (10 points). 
I11(6) T3Administrative points.G1T1 The State Director may assign up to 10 additional points to an application to account for such factors as statewide distribution of funds, natural or economic emergency conditions, or area economic development strategies. An explanation of the assigning of these points by the State Director will be appended to the calculation of the project score maintained in the case file. If an application is considered in the National Office, the Administrator may also assign up to an additional 10 points. The Administrator may assign the additional points to an application to account for items such as geographic distribution of funds and emergency conditions caused by economic problems or natural disasters. 

I80ï¿½1A4279.156
I89Planning and performing development. 
I11(a) T3Design policy.G1T1 The lender must ensure that all project facilities must be designed utilizing accepted architectural and engineering practices and must conform to applicable Federal, state, and local codes and requirements. The lender will also ensure that the project will be completed using the available funds and, once completed, will be used for its intended purpose and produce products in the quality and quantity proposed in the completed application approved by the Agency. 
I11(b) T3Project control.G1T1 The lender will monitor the progress of construction and undertake the reviews and inspections necessary to ensure that construction conforms with applicable Federal, state, and local code requirements; proceeds are used in accordance with the approved plans, specifications, and contract documents; and that ï¿½521ï¿½funds are used for eligible project costs. 
I11(c) T3Equal opportunity.G1T1 For all construction contracts in excess of $10,000, the contractor must comply with Executive Order 11246, entitled ``Equal Employment Opportunity,'' as amended by Executive Order 11375, and as supplemented by applicable Department of Labor regulations (41 CFR, part 60). The borrower and lender are responsible for ensuring that the contractor complies with these requirements. 
I11(d) T3Americans with Disabilities Act (ADA).G1T1 B&I Guaranteed Loans which involve the construction of or addition to facilities that accommodate the public and commercial facilities, as defined by the ADA, must comply with the ADA. The lender and borrower are responsible for compliance. 

I80ï¿½1A4279.157_4279.160
I89[Reserved] 

I80ï¿½1A4279.161
I89Filing preapplications and applications. 
I11Borrowers and lenders are encouraged to file preapplications and obtain Agency comments before completing an application. However, if they prefer, they may file a complete application as the first contact with the Agency. Neither preapplications nor applications will be accepted or processed unless a lender has agreed to finance the proposal. 
I11(a) T3Preapplications.G1T1 Lenders may file preapplications by submitting the following to the Agency: 
I11(1) A letter signed by the borrower and lender containing the following: 
I11(i) Borrower's name, organization type, address, contact person, and federal tax identification and telephone numbers. 
I11(ii) Amount of the loan request, percent of guarantee requested, and the proposed rates and terms. 
I11(iii) Name of the proposed lender, address, telephone number, contact person, and lender's Internal Revenue Service (IRS) identification number. 
I11(iv) Brief description of the project, products, services provided, and availability of raw materials and supplies. 
I11(v) Type and number of jobs created or saved. 
I11(vi) Amount of borrower's equity and a description of collateral, with estimated values, to be offered as security for the loan. 
I11(vii) If a corporate borrower, the names and addresses of the borrower's parent, affiliates, and subsidiary firms, if any, and a description of the relationship. 
I11(2) A completed Form 4279ï¿½092, ``Certification of Non-Relocation and Market Capacity Information Report,'' if the proposed loan is in excess of $1 million and will increase direct employment by more than 50 employees. 
I11(3) For existing businesses, a current balance sheet and a profit and loss statement not more than 90 days old and financial statements for the borrower and any parent, affiliates, and subsidiaries for at least the 3 most recent years. 
I11(4) For start-up businesses, a preliminary business plan must be provided. 
I11(b) T3Applications.G1T1 Except for CLP lenders, applications will be filed with the Agency by submitting the following information: (CLP applications will be completed in accordance with 4279.43(g)(1) but CLP lenders must have the material listed in this paragraph in their files.) 
I11(1) A completed Form 4279ï¿½091, ``Application for Loan Guarantee (Business and Industry)''. 
I11(2) The information required for filing a preapplication, as listed above, if not previously filed or if the information has changed. 
I11(3) Form FmHA 1940ï¿½0920, ``Request for Environmental Information,'' and attachments, unless the project is categorically excluded under Agency environmental regulations. 
I11(4) A personal credit report from an acceptable credit reporting company for a proprietor (owner), each partner, officer, director, key employee, and stockholder owning 20 percent or more interest in the applicant, except for those corporations listed on a major stock exchange. Credit reports are not required for elected and appointed officials when the applicant is a public body. 
I11(5) Intergovernmental consultation comments in accordance with 7 CFR, part 3015, subpart V. 
I11(6) Appraisals, accompanied by a copy of the appropriate environmental site assessment, if available. (Agency ï¿½522ï¿½approval in the form of a Conditional Commitment may be issued subject to receipt of adequate appraisals.) 
I11(7) For all businesses, a current (not more than 90 days old) balance sheet, a T3pro formaG1T1 balance sheet at startup, and projected balance sheets, income and expense statements, and cash flow statements for the next 2 years. Projections should be supported by a list of assumptions showing the basis for the projections. 
I11(8) Lender's complete written analysis, including spreadsheets of the balance sheets and income statements for the 3 previous years (for existing businesses), pro forma balance sheet at startup, and 2 years projected yearend balance sheets and income statements, with appropriate ratios and comparisons with industrial standards (such as Dun & Bradstreet or Robert Morris Associates). All data must be shown in total dollars and also in common size form, obtained by expressing all balance sheet items as a percentage of assets and all income and expense items as a percentage of sales. The lender's credit analysis must address the borrower's management, repayment ability including a cash-flow analysis, history of debt repayment, necessity of any debt refinancing, and the credit reports of the borrower, its principals, and any parent, affiliate, or subsidiary. 
I11(9) Commercial credit reports obtained by the lender on the borrower and any parent, affiliate, and subsidiary firms. 
I11(10) Current personal and corporate financial statements of any guarantors. 
I11(11) A proposed Loan Agreement or a sample Loan Agreement with an attached list of the proposed Loan Agreement provisions. The Loan Agreement must be executed by the lender and borrower before the Agency issues a Loan Note Guarantee. The following requirements must be addressed in the Loan Agreement: 
I11(i) Prohibition against assuming liabilities or obligations of others. 
I11(ii) Restriction on dividend payments. 
I11(iii) Limitation on the purchase or sale of equipment and fixed assets. 
I11(iv) Limitation on compensation of officers and owners. 
I11(v) Minimum working capital or current ratio requirement. 
I11(vi) Maximum debt-to-net worth ratio. 
I11(vii) Restrictions concerning consolidations, mergers, or other circumstances. 
I11(viii) Limitations on selling the business without the concurrence of the lender. 
I11(ix) Repayment and amortization of the loan. 
I11(x) List of collateral and lien priority for the loan including a list of persons and corporations guaranteeing the loan with a schedule for providing the lender with personal and corporate financial statements. Financial statements on the corporate and personal guarantors must be updated at least annually. 
I11(xi) Type and frequency of financial statements to be required for the duration of the loan. 
I11(xii) The final Loan Agreement between the lender and borrower will contain any additional requirements imposed by the Agency in its Conditional Commitment. 
I11(xiii) A section for the later insertion of any necessary measures by the borrower to avoid or reduce adverse environmental impacts from this proposal's construction or operation. Such measures, if necessary, will be determined by the Agency through the completion of the environmental review process. 
I11(12) A business plan, which includes, at a minimum, a description of the business and project, management experience, products and services, proposed use of funds, availability of labor, raw materials and supplies, and the names of any corporate parent, affiliates, and subsidiaries with a description of the relationship. Any or all of these requirements may be omitted if the information is included in a feasibility study. 
I11(13) Independent feasibility study, if required. 
I11(14) For companies listed on a major stock exchange or subject to the Securities and Exchange Commission (SEC) regulations, a copy of SEC Form 10ï¿½09K, ``Annual Report Pursuant to Section 13 or 15D of the Act of 1934.'' 
I11(15) For health care facilities, a certificate of need, if required by statute. 
ï¿½523ï¿½I11(16) A certification by the lender that it has completed a comprehensive analysis of the proposal, the applicant is eligible, the loan is for authorized purposes, and there is reasonable assurance of repayment ability based on the borrower's history, projections and equity, and the collateral to be obtained. 
I11(17) Any additional information required by the Agency. 

I80ï¿½1A4279.162_4279.164
I89[Reserved] 

I80ï¿½1A4279.165 
I89Evaluation of application. 
I11(a) T3General review.G1T1 The Agency will evaluate the application and make a determination whether the borrower is eligible, the proposed loan is for an eligible purpose, there is reasonable assurance of repayment ability, there is sufficient collateral and equity, and the proposed loan complies with all applicable statutes and regulations. If the Agency determines it is unable to guarantee the loan, the lender will be informed in writing. Such notification will include the reasons for denial of the guarantee. 
I11(b) T3Environmental requirements.G1T1 The environmental review process must be completed, in accordance with subpart G of part 1940 of this title, prior to the issuance of the Conditional Commitment, loan approval, or obligation of funds, whichever occurs first. 

I80ï¿½1A4279.166_4279.172
I89[Reserved] 

I80ï¿½1A4279.173 
I89Loan approval and obligating funds. 
I11(a) Upon approval of a loan guarantee, the Agency will issue a Conditional Commitment to the lender containing conditions under which a Loan Note Guarantee will be issued. 
I11(b) If certain conditions of the Conditional Commitment cannot be met, the lender and applicant may propose alternate conditions. Within the requirements of the applicable regulations and instructions and prudent lending practices, the Agency may negotiate with the lender and the applicant regarding any proposed changes to the Conditional Commitment. 

I80ï¿½1A4279.174 
I89Transfer of lenders. 
I11(a) The loan approval official may approve the substitution of a new eligible lender in place of a former lender who holds an outstanding Conditional Commitment when the Loan Note Guarantee has not yet been issued provided, that there are no changes in the borrower's ownership or control, loan purposes, or scope of project and loan conditions in the Conditional Commitment and the Loan Agreement remain the same. 
I11(b) The new lender's servicing capability, eligibility, and experience will be analyzed by the Agency prior to approval of the substitution. The original lender will provide the Agency with a letter stating the reasons it no longer desires to be a lender for the project. The substituted lender must execute a new part B of Form 4279ï¿½091. 

I80ï¿½1A4279.175_4279.179
I89[Reserved] 

I80ï¿½1A4279.180 
I89Changes in borrower. 
I11Any changes in borrower ownership or organization prior to the issuance of the Loan Note Guarantee must meet the eligibility requirements of the program and be approved by the Agency loan approval official. 

I80ï¿½1A4279.181 
I89Conditions precedent to issuance of Loan Note Guarantee. 
I11The Loan Note Guarantee will not be issued until the lender, including a CLP lender, certifies to the following: 
I11(a) No major changes have been made in the lender's loan conditions and requirements since the issuance of the Conditional Commitment, unless such changes have been approved by the Agency. 
I11(b) All planned property acquisition has been or will be completed, all development has been or will be substantially completed in accordance with plans and specifications, conforms with applicable Federal, state, and local codes, and costs have not exceeded the amount approved by the lender and the Agency. 
I11(c) Required hazard, flood, liability, worker compensation, and personal life insurance, when required, are in effect. 
I11(d) Truth-in-lending requirements have been met. 
I11(e) All equal credit opportunity requirements have been met.
I11(f) The loan has been properly closed, and the required security instruments ï¿½524ï¿½have been obtained or will be obtained on any acquired property that cannot be covered initially under State law. 
I11(g) The borrower has marketable title to the collateral then owned by the borrower, subject to the instrument securing the loan to be guaranteed and to any other exceptions approved in writing by the Agency. 
I11(h) When required, the entire amount of the loan for working capital has been disbursed except in cases where the Agency has approved disbursement over an extended period of time. 
I11(i) When required, personal, partnership, or corporate guarantees have been obtained. 
I11(j) All other requirements of the Conditional Commitment have been met. 
I11(k) Lien priorities are consistent with the requirements of the Conditional Commitment. No claims or liens of laborers, subcontractors, suppliers of machinery and equipment, or other parties have been or will be filed against the collateral and no suits are pending or threatened that would adversely affect the collateral when the security instruments are filed. 
I11(l) The loan proceeds have been or will be disbursed for purposes and in amounts consistent with the Conditional Commitment and Form 4279ï¿½091. A copy of the detailed loan settlement of the lender must be attached to support this certification. 
I11(m) There has been neither any material adverse change in the borrower's financial condition nor any other material adverse change in the borrower, for any reason, during the period of time from the Agency's issuance of the Conditional Commitment to issuance of the Loan Note Guarantee regardless of the cause or causes of the change and whether or not the change or causes of the change were within the lender's or borrower's control. The lender must address any assumptions or reservations in the requirement and must address all adverse changes of the borrower, any parent, affiliate, or subsidiary of the borrower, and guarantors. 
I11(n) None of the lender's officers, directors, stockholders, or other owners (except stockholders in an institution that has normal stockshare requirements for participation) has a substantial financial interest in the borrower and neither the borrower nor its officers, directors, stockholders, or other owners has a substantial financial interest in the lender. If the borrower is a member of the board of directors or an officer of a Farm Credit System (FCS) institution that is the lender, the lender will certify that an FCS institution on the next highest level will independently process the loan request and act as the lender's agent in servicing the account. 
I11(o) The Loan Agreement includes all measures identified in the Agency's environmental impact analysis for this proposal (measures with which the borrower must comply) for the purpose of avoiding or reducing adverse environmental impacts of the proposal's construction or operation. 

I80ï¿½1A4279.182_4279.185
I89[Reserved] 

I80ï¿½1A4279.186 
I89Issuance of the guarantee. 
I11(a) When loan closing plans are established, the lender will notify the Agency. Coincident with, or immediately after loan closing, the lender will provide the following to the Agency: 
I11(1) Lender's certifications as required by ï¿½1A4279.181. 
I11(2) Executed Lender's Agreement. 
I11(3) Form FmHA 1980ï¿½0919, ``Guaranteed Loan Closing Report,'' and appropriate guarantee fee. 
I11(b) When the Agency is satisfied that all conditions for the guarantee have been met, the Loan Note Guarantee and the following documents, as appropriate, will be issued: 
I11(1) T3Assignment Guarantee Agreement.G1T1 In the event the lender uses the single note option and assigns the guaranteed portion of the loan to a holder, the lender, holder, and the Agency will execute the Assignment Guarantee Agreement; and 
I11(2) T3Certificate of Incumbency.G1T1 If requested by the lender, the Agency will provide the lender with a certification on Form 4279ï¿½097, ``Certificate of Incumbency and Signature (Business and Industry),'' of the signature and title of the Agency official who signs the Loan Note Guarantee, Lender's Agreement, and Assignment Guarantee Agreement. 
ï¿½525ï¿½I11(c) The Agency may, at its discretion, request copies of loan documents for its file. 
I11(d) There may be instances when not all of the working capital has been disbursed, and it appears practical to disburse the balance over a period of time. The State Director, after review of a disbursement plan, may amend the Conditional Commitment in accordance with the disbursement plan and issue the guarantee. 

I80ï¿½1A4279.187 
I89Refusal to execute Loan Note Guarantee. 
I11If the Agency determines that it cannot execute the Loan Note Guarantee, the Agency will promptly inform the lender of the reasons and give the lender a reasonable period within which to satisfy the objections. If the lender requests additional time in writing and within the period allowed, the Agency may grant the request. If the lender satisfies the objections within the time allowed, the guarantee will be issued. 

I80ï¿½1A4279.188_4279.199
I89[Reserved] 

I80ï¿½1A4279.200 
I89OMB control number. 
I11The information collection requirements contained in this regulation have been approved by OMB and have been assigned OMB control number 0575ï¿½090170. Public reporting burden for this collection of information is estimated to vary from 30 minutes to 54 hours per response, with an average of 27 hours per response, including time for reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Department of Agriculture, Clearance Officer, OIRM, Stop 7630, Washington, DC 20250. You are not required to respond to this collection of information unless it displays a currently valid OMB control number.

I95Pt. 4284
I52PART 4284_GRANTS
S8006I86Subparts Aï¿½09E[Reserved]
S8010I86Subpart F_Rural Cooperative Development Grants  
S8006I18Sec.  
S8010I264284.501Purpose.  
I264284.502Policy.  
I264284.503[Reserved]  
I264284.504Definitions.  
I264284.505Applicant eligibility.  
I264284.506_4284.514[Reserved]  
I264284.515Grant purposes.  
I264284.516Ineligible grant purposes.  
I264284.517_4284.526[Reserved]  
I264284.527Other considerations.  
I264284.528Application processing.  
I264284.529_4284.539[Reserved]  
I264284.540Grant selection criteria.  
I264284.541Grant approval, fund obligation, grant closing, and third-party financial assistance.  
I264284.542_4284.556[Reserved]  
I264284.557Fund disbursement.  
I264284.558Reporting.  
I264284.559_4284.570[Reserved]  
I264284.571Audit requirements.  
I264284.572Grant servicing.  
I264284.573Programmatic changes.  
I264284.574Subsequent grants.  
I264284.575Grant suspension, termination, and cancellation.  
I264284.576_4284.586[Reserved]  
I264284.587Exception authority.  
I264284.588_4284.599[Reserved]  
I264284.600OMB control number.  


I86Subpart G_Rural Business Opportunity Grants

I264284.601Purpose.
I264284.602Policy.
I264284.603Definitions.
I264284.604ï¿½094284.619[Reserved]
I264284.620Applicant eligibility.
I264284.621Eligible grant purposes.
I264284.622ï¿½094284.628[Reserved]
I264284.629Ineligible grant purposes.
I264284.630Other considerations.
I264284.631ï¿½094284.637[Reserved]
I264284.638Application processing.
I264284.639Grant selection criteria.
I264284.640Appeals.
I264284.641ï¿½094284.646[Reserved]
I264284.647Grant approval and obligation of funds.
I264284.648Fund disbursement.
I264284.649ï¿½094284.655[Reserved]
I264284.656Reporting.
I264284.657Audit requirements.
I264284.658ï¿½094284.666[Reserved]
I264284.667Grant servicing.
I264284.668Programmatic changes.
I264284.669ï¿½094284.683[Reserved]
I264284.684Exception authority.
I264284.685ï¿½094284.698[Reserved]
I264284.699Member delegate clause.
I264284.700OMB control number.



Q04I21T5Authority: T15 U.S.C. 301 and 7 U.S.C. 1989.

Q04I21T5Source: T162 FR 42387, Aug. 7, 1997, unless otherwise noted.
S8006I56Subparts Aï¿½09E[Reserved]
S8010
ï¿½526ï¿½I56Subpart F_Rural Cooperative Development Grants  



I80ï¿½1A4284.501 
I89Purpose.  
I11(a) This subpart outlines the Rural Business-Cooperative Service's (RBS) policies and authorizations and contains procedures to provide grants for cooperative development in rural areas.  
I11(b) Grants will be made available to nonprofit corporations and institutions of higher education for the purpose of establishing and operating centers for rural cooperative development.  
I11(c) Copies of all forms and Instructions referenced in this subpart are available in the RBS National Office or any Rural Development State Office.  


I80ï¿½1A4284.502 
I89Policy.  
I11The grant program will be used to facilitate the creation or retention of jobs in rural areas through the development of new rural cooperatives, value-added processing, and rural businesses.  


I80ï¿½1A4284.503 
I89[Reserved]  


I80ï¿½1A4284.504 
I89Definitions.  
I11T3Agency_G1T1Rural Business-Cooperative Service (RBS) or a successor agency.  
I11T3Approval official_G1T1Any authorized agency official.  
I11T3Center_G1T1The entity established or operated by the grantee for rural cooperative development.  
I11T3Cooperative_G1T1A user-owned and controlled business from which benefits are derived and distributed equitably on the basis of use.  
I11T3Cooperative development_G1T1The startup, expansion, or operational improvement of a cooperative to promote development in rural areas of services and products, processes that can be used in the production of products, or enterprises that can add value to on-farm production through processing or marketing activities. Development activities may include, but are not limited to, technical assistance, research services, educational services, and advisory services. Operational improvement includes making the cooperative more efficient or better managed.  
I11T3Economic development_G1T1The growth of an area as evidenced by increases in total income, employment opportunities, decreased outmigration of populations, value of production, increased diversification of industry, higher labor force participation rates, increased duration of employment, higher wage levels, or gains in other measurements of economic activity, such as land values.  
I11T3Nonprofit institution_G1T1Any organization or institution, including an accredited institution of higher education, no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.  
I11T3Project_G1T1A planned undertaking by a center which utilizes the funds provided to it to promote economic development in rural areas through the creation and enhancement of cooperatives.  
I11T3Public body_G1T1Any state, county, city, township, incorporated town or village, borough, authority, district, economic development authority, or Indian tribe on federal or state reservations or other federally recognized Indian tribe in rural areas.  
I11T3RBS_G1T1The Rural Business-Cooperative Service, an agency of the United States Department of Agriculture, or a successor agency.  
I11T3Regionally operated_G1T1A regionally operated program includes programs that cover or are eligible to cover two or more counties.  
I11T3Rural and rural area_G1T1Includes all territory of a state that is not within the outer boundary of any city having a population of 50,000 or more and its immediately adjacent urbanized and urbanizing areas.  
I11T3Rural Development_G1T1Rural Development mission area.  
I11T3Servicing office_G1T1Any Rural Development State Office.  
I11T3State_G1T1Any of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands of the United States, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands.  
I11T3Subcenter_G1T1A unit of a center acting under the same direction as and having a purpose consistent with that of the center.  
ï¿½527ï¿½I11T3Urbanized area_G1T1An area immediately adjacent to a city having a population of 50,000 or more with a population density of more than 100 persons per square mile, as determined by the Secretary of Agriculture according to the latest decennial census of the United States which, for general social and economic purposes, constitutes a single community and has a boundary contiguous with that of the city. Such community may be incorporated or unincorporated to extend from the contiguous boundaries to recognizable open country, less densely settled areas, or natural boundaries such as forests or water. Minor open spaces such as airports, industrial sites, recreational facilities, or public parks shall be disregarded. Outer boundaries of an incorporated community extend at least to its legal boundaries. Cities which may have a contiguous border with another city, but are located across a river from such city, are recognized as a separate community. 

I11T3Urbanizing areaG1T1_A community with a population density of more than 100 persons per square mile, as determined by the Secretary of Agriculture according to the latest decennial census of the United States, which is not now, or within the foreseeable future not likely to be, clearly separate from and independent of a city of 50,000 or more population and its immediately adjacent urbanized areas. A community is considered ``separate'' when it is separated from the city and its immediately adjacent urbanized area by open country, less densely settled areas, or natural barriers such as forests or water. Minor open spaces such as airports, industrial sites, recreational facilities, or public parks shall not be considered as an area to determine if a community is separate. A community is considered ``independent'' when its social (T3e.g.,G1T1 government, educational, health, and recreational facilities) and economic structure (T3e.g.,G1T1 business, industry, tax base, and employment opportunities) are not primarily dependent on the city and its immediately adjacent urbanized areas.  


I80ï¿½1A4284.505 
I89Applicant eligibility.  
I11(a) Grants may be made to nonprofit corporations and institutions of higher education. Grants may not be made to public bodies.  
I11(b) An outstanding judgment obtained against an applicant by the United States in a Federal Court (other than in the United States Tax Court), which has been recorded, shall cause the applicant to be ineligible to receive any grant or loan until the judgment is paid in full or otherwise satisfied. RBS grant funds may not be used to satisfy the judgment.  


I80ï¿½1A4284.506_4284.514 
I89[Reserved]  


I80ï¿½1A4284.515 
I89Grant purposes.  
I11Grant funds may be used to pay up to 75 percent of the costs for carrying out relevant projects. Applicant's contribution may be in cash or in-kind contribution in accordance with parts 3015 and 3019 of this title and must be from nonfederal funds except that a loan from another federal source can be used for the applicant's contribution. Grant funds may be used for, but are not limited to, the following purposes:  
I11(a) Applied research, feasibility, environmental and other studies that may be useful to individuals, cooperatives, small businesses, and other similar entities in rural areas served by the center for the purpose of cooperative development.  
I11(b) Collection, interpretation, and dissemination of principles, facts, technical knowledge, or other information that may be useful to individuals, cooperatives, small businesses, and other similar entities in rural areas served by the center for the purpose of cooperative development.  
I11(c) Providing training and instruction for individuals, cooperatives, small businesses, and other similar entities in rural areas served by the center for the purpose of cooperative development.  
I11(d) Providing loans and grants to individuals, cooperatives, small businesses, and other similar entities in rural areas served by the center for the purpose of cooperative development in accordance with this subpart.  
I11(e) Providing technical assistance, research services, and advisory services to individuals, cooperatives, small businesses, and other similar entities in rural areas served by the center for ï¿½528ï¿½the purpose of cooperative development.  


I80ï¿½1A4284.516 
I89Ineligible grant purposes.  
I11Grant funds may not be used to:  
I11(a) Pay more than 75 percent of relevant project or administrative costs;  
I11(b) Duplicate current services or replace or substitute support previously provided;  
I11(c) Pay costs of preparing the grant application package;  
I11(d) Pay costs incurred prior to the effective date of the grant;  
I11(e) Pay for building construction, the purchase of real estate or vehicles, improving or renovating office space, or the repair or maintenance of privately-owned property; 

I11(f) Fund political activities; or  
I11(g) Pay for assistance to any private business enterprise which does not have at least 51 percent ownership by those who are either citizens of the United States or reside in the United States after being legally admitted for permanent residence.  


I80ï¿½1A4284.517_4284.526 
I89[Reserved]  


I80ï¿½1A4284.527 
I89Other considerations.  
I11(a) T3Civil rights compliance requirementsG1T1. All grants made under this subpart are subject to the requirements of title VI of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, and national origin as outlined in part 1901, subpart E of this title. In addition, the grants made under this subpart are subject to the requirements of section 504 of the Rehabilitation Act of 1973, as amended, which prohibits discrimination on the basis of disability; the requirements of the Age Discrimination Act of 1975, which prohibits discrimination on the basis of age; and title III of the Americans with Disabilities Act, which prohibits discrimination on the basis of disability by private entities in places of public accommodations.  
I11(b) T3Environmental requirementsG1T1_(1) T3General applicabilityG1T1. Unless specifically modified by this section, the requirements of part 1940, subpart G of this title apply to this subpart. For example, the Agency's general and specific environmental policies contained in ï¿½1A1940.303 and 1940.304 of this title must be complied with. Although the purpose of the grant program established by this subpart is to improve business, industry, and employment in rural areas, this purpose is to be achieved, to the extent practicable, without adversely affecting important environmental resources of rural areas such as important farmland and forest lands, prime rangelands, wetland, and flood plains. Prospective recipients of grants, therefore, must consider the potential environmental impacts of their applications at the earliest planning stages and develop plans and projects that minimize the potential to adversely impact on the environment.  
I11(2) T3Technical assistanceG1T1. An application for a project exclusively involving technical assistance is generally excluded from the environmental review process by ï¿½1A1940.310(e)(1) of this title. However, as further specified in ï¿½1A1940.333 of this title, the grantee of a technical assistance grant, in the process of providing technical assistance, must consider and generally document within their plans the potential environmental impacts of the plan and recommendations provided to the recipient of the technical assistance.  
I11(3) T3Applications for grants to provide other than technical assistance to third-party recipientsG1T1. As part of the preapplication, the applicant must provide a complete ``Request for Environmental Information,'' for each project specifically identified in its plan to provide other than technical assistance to third parties who will undertake eligible projects with such assistance. The Agency will review the preapplication, supporting materials, and the required ``Request for Environmental Information'' and assess the impact of the preapplication. This assessment will focus on the potential cumulative impacts of the projects as well as any environmental concerns or problems that are associated with individual projects that can be identified at this time from the information submitted. Because the Agency's approval of this type of grant application does not constitute a commitment to the use of grant funds for any identified third-party projects (see ï¿½1A4284.541), no public notification requirements will apply to the preapplication. After the ï¿½529ï¿½grant is approved, each third-party project to be assisted under the grant will undergo the applicable environmental review and public notification requirements in part 1940, subpart G of this title prior to the Agency providing its consent to the grantee to assist the third-party project. If the preapplication reflects only one project which is specifically identified as the third-party recipient for financial assistance, the Agency may proceed directly to the appropriate environmental assessment for the third-party recipient with public notification as required. The applicant must be advised that if the recipient or project changes after the grant is approved, the project to be assisted under the grant will undergo the applicable environmental review and public notification requirements.  
I11(c) T3Government-wide debarment and suspension (non-procurement) and requirements for drug-free workplaceG1T1. Persons who are disbarred or suspended are excluded from federal assistance and benefits including grants under this subpart. Grantees must certify that they will provide a drug-free workplace.  
I11(d) T3Restrictions on lobbyingG1T1. All grants must comply with the lobbying restrictions contained in part 3018 of this title.  
I11(e) T3Excess capacity or transfer of employmentG1T1. If a proposed project has financial assistance from all sources for more than $1 million and will increase direct employment by more than 50 employees, the applicant will be requested to provide written support for an Agency determination that the proposal will not result in a project which is calculated to, or likely to, result in the transfer of any employment or business activity from one area to another. This limitation will not prohibit assistance for the expansion of an existing business entity through the establishment of a new branch, affiliate, or subsidiary of such entity if the expansion will not result in an increase in the unemployment in the area of original location or in any other area where such entity conducts business operations.  
I11(f) T3Management assistanceG1T1. Grant recipients will be supervised, as necessary, to ensure that projects are completed in accordance with approved plans and specifications and that funds are expended for approved purposes. Grants made under this subpart will be administered under, and are subject to, parts 3015, 3017, 3019, and 3051 of this title, as appropriate, and established RBS guidelines.  
I11(g) T3Uniform Relocation Assistance and Real Property Acquisition Policies ActG1T1. All projects must comply with the requirements contained in part 21 of this title. 

I11(h) T3Flood or mudslide hazard area precautions.G1T1 If the grantee financed project is in a flood or mudslide area, flood or mudslide insurance must be obtained through the National Flood Insurance Program.  
I11(i) T3Termination of federal requirements.G1T1 Once the grantee has provided assistance with project loans in an amount equal to the grant provided by RBS, the requirements imposed on the grantee shall not be applicable to any new projects thereafter financed from the RCDG funds. Such new projects shall not be considered as being derived from federal funds. The purposes of such new projects, however, shall be consistent with these regulations.  
I11(j) T3Intergovernmental review.G1T1 Grant projects are subject to the provisions of Executive Order 12372 which requires intergovernmental consultation with state and local officials. A loan fund established in whole, or in part, with grant funds will also be considered a project for the purpose of intergovernmental review as well as the specific projects funded with grant funds from the RCDG funds. For each project to be assisted with a grant under this subpart and which the state has elected to review under their intergovernmental review process, the state point of contact must be notified. Notification, in the form of a project description, can be initiated by the grantee. Any comments from the state must be included with the grantee's request to use RBS grant funds for the specific project. Prior to the RBS decision on the request, compliance with requirements of intergovernmental consultation must be demonstrated for each project. ï¿½530ï¿½These requirements should be completed in accordance with ``Intergovernmental Review of Department of Agriculture Programs and Activities,'' part 3015, subpart V of this title.  


I804284.528 
I89Application processing.  
I11(a) T3Preapplications.G1T1 (1) Applicants will file an original and one copy of an ``Application for Federal Assistance (For Non-construction),'' with the appropriate Rural Development State Office.  
I11(2) All preapplications shall be accompanied by:  
I11(i) Evidence of applicant's legal existence and authority to perform the proposed activities under the grant.  
I11(ii) The latest financial information to show the applicant's financial capacity to carry out the project. At a minimum, the information should include a balance sheet and an income statement. A current audited report is preferred where one is reasonably obtainable.  
I11(iii) An estimated breakdown of total costs, including costs to be funded by the applicant or other identified sources. Certification must be provided from the applicant that its matching share to the project is available and will be used for the project. The matching share must meet the requirements of parts 3015 and 3019 of this title as applicable. Certifications from an authorized representative of each source of funds must be provided indicating that funds are available and will be used for the proposed project.  
I11(iv) A budget and description of the accounting system to be used.  
I11(v) The area to be served, identifying within that area each governmental unit (T3i.e.,G1T1 town, county, etc.) affected by the proposed project. Evidence of support and concurrence from each affected governmental unit must be provided by either a resolution or a written statement from the chief elected local official.  
I11(vi) A listing of cooperative businesses to be assisted or created.  
I11(vii) Applicant's experience with similar projects, including experience of key staff members and persons who will be providing the proposed services and managing the project. 
I11(viii) The number of months duration of the project and the estimated time it will take from grant approval to beginning of service.  
I11(ix) The method and rationale used to select the areas or businesses that will receive the service.  
I11(x) A brief description of how the work will be performed and whether organizational staff, consultants or contractors will be used.  
I11(xi) An evaluation method to be used by the applicant to determine if objectives of the proposed activity are being accomplished.  
I11(xii) A brief plan that contains the following provisions and describes how the applicant will meet these provisions:  
I11(A) A provision that substantiates how the applicant will effectively serve rural areas in the United States.  
I11(B) A provision that the primary objective of the applicant will be to improve the economic condition of rural areas by promoting development of new cooperatives or improvement of existing cooperatives.  
I11(C) Supporting data from established official independent sources along with any explanatory documentation.  
I11(D) A description of the activities that the applicant will carry out to accomplish such objective.  
I11(E) A description of the proposed activities to be funded under this subpart.  
I11(F) A description of the contributions that the applicant's proposed activities are likely to make to the improvement of the economic conditions of the rural areas served by the applicant. 

I11(G) Provisions that the applicant, in carrying out its activities, will seek, where appropriate, the advice, participation, expertise, and assistance of representatives of business, industry, educational institutions, the federal, state, and local governments.  
I11(H) Provisions that the applicant will consult with any college or university administering Extension Service programs and cooperate with such college or university in the coordination of the center's activities and programs.  
I11(I) Provisions that the applicant will take all practicable steps to develop continuing sources of financial support for the center, particularly from sources in the private sector.  
I11(J) Provisions for:  
ï¿½531ï¿½I11(T31G1T1) Monitoring and evaluating its activities; and  
I11(T32G1T1) Accounting for money received and expended by the applicant under this subpart.  
I11(K) Provisions that the applicant will provide for the optimal application of cooperative development in rural areas, especially those areas adversely affected by economic conditions, such that local economic conditions can be improved through cooperative development. 
I11(xiii) The agreement proposed to be used between the applicant and the ultimate recipients, if grant funds are to be used for the purpose of making loans or grants to individuals, cooperatives, small businesses, and other similar entities (ultimate recipients) in rural areas for eligible purposes under this subpart. This agreement should include the following:  
I11(A) An assurance that the responsibilities of the grantee, as a recipient of grant funds under this subpart, are passed on to the ultimate recipient and the ultimate recipient understands its responsibilities to comply with the requirements contained in this subpart and parts 3015 and 3019 of this title, as applicable.  
I11(B) Provisions that the ultimate recipient will comply with debarment and suspension requirements contained in part 3017 of this title and will execute a ``Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion_Lower Tier Covered Transactions.''  
I11(C) Provisions that the ultimate recipient will execute an ``Equal Opportunity Agreement,'' and an ``Assurance Agreement.''  
I11(D) Documentation that the ultimate recipient understands its responsibilities to the applicant.  
I11(E) Documentation that the applicant understands its responsibilities in monitoring the ultimate recipient's activities under the grant and the applicant's plan for such monitoring.  
I11(F) Documentation, when other references or sources of information are used, along with copies, if possible, that provides dates, addresses, page numbers and explanations of how interpretations are made to substantiate that such things as economically distressed conditions do exist.  
I11(G) Narrative addressing all items in 4284.540(a) of this subpart regarding grant selection criteria.  
I11(b) T3Applications.G1T1 Upon notification that the applicant has been selected for funding, the following will be submitted to Rural Development by the applicant:  
I11(1) Proposed scope of work, detailing the proposed activities to be accomplished and timeframes for completion of each activity.  
I11(2) Other information requested by RBS to make a grant award determination.  
I11(c) T3Applicant response.G1T1 If the applicant fails to submit the application and related material by the date shown on the invitation for applications, Rural Development may discontinue consideration of the preapplication.  


I80ï¿½1A4284.529_4284.539 
I89[Reserved]  


I80ï¿½1A4284.540 
I89Grant selection criteria.  
I11Grants will be awarded under this subpart on a competitive basis. The priorities described in this paragraph will be used by RBS to rate preapplications. RBS review of preapplications will include the complete preapplication package submitted to the Rural Development State Office. Points will be distributed according to ranking as compared with other preapplications on hand. All factors will receive equal weight with points awarded to each factor on a 5, 4, 3, 2, 1 basis depending on the applicant's ranking compared to other applicants.  
I11(a) Preference will be given to applications that:  
I11(1) Demonstrate a proven track record in administering a nationally coordinated, regionally or State-wide operated project;  
I11(2) Demonstrate previous expertise in providing technical assistance in rural areas;  
I11(3) Demonstrate the ability to assist in the retention of business, facilitate the establishment of cooperatives and new cooperative approaches, and generate employment opportunities that will improve the economic conditions of rural areas;  
ï¿½532ï¿½I11(4) Demonstrate the ability to create horizontal linkages among businesses within and among various sectors in rural areas of the United States and vertical linkages to domestic and international markets; 
I11(5) Commit to providing technical assistance and other services to underserved and economically distressed rural areas of the United States;  
I11(6) Commit to providing greater than a 25 percent matching contribution with private funds and in-kind contributions;  
I11(7) Evidence transferability or demonstration value to assist rural areas outside of project area; and  
I11(8) Demonstrate that any cooperative development activity is consistent with positive environmental stewardship.  
I11(b) Each preapplication for assistance will be carefully reviewed in accordance with the priorities established in this section. A priority rating will be assigned to each preapplication. Preapplications selected for funding will be based on the priority rating assigned each preapplication and the total funds available. All preapplications submitted for funding should contain sufficient information to permit RBS to complete a thorough priority rating.  


I80ï¿½1A4284.541
I89Grant approval, fund obligation, grant closing, and third-party financial assistance.  
I11The grantee will execute all documents required by RBS to make a grant under this subpart. By accepting the grant, the grantee agrees to comply with parts 3015 and 3019 of this title.  


I80ï¿½1A4284.542_4284.556
I89[Reserved]  


I80ï¿½1A4284.557
I89Fund disbursement.  
I11Grants will be disbursed as follows:  
I11(a) A ``Request for Advance or Reimbursement,'' will be completed by the applicant and submitted to Rural Development not more frequently than monthly. Payments will be made by electronic funds transfer pursuant to the Debt Collection Improvement Act of 1996 (Pub. L. 104ï¿½09134).  
I11(b) The grantee's share in the cost of the project will be disbursed in advance of grant funds or on a pro-rata distribution basis with grant funds during the disbursement period.  


I80ï¿½1A4284.558
I89Reporting.  
I11A ``Financial Status Report,'' and a project performance activity report will be required of all grantees on a quarterly calendar basis. A final project performance report will be required with the last ``Financial Status Report.'' The final report may serve as the last quarterly report. The final report must include a final evaluation of the project. Grantees must constantly monitor performance to ensure that time schedules are being met, projected work by time periods is being accomplished, and other performance objectives are being achieved. Grantees are to submit an original of each report to Rural Development. The project performance reports shall include, but not be limited to, the following:  
I11(a) A comparison of actual accomplishments to the objectives established for that period;  
I11(b) Reasons why established objectives (if any) were not met;  
I11(c) Problems, delays, or adverse conditions which will affect attainment of overall project objectives, prevent meeting time schedules or objectives, or preclude the attainment of particular project work elements during established time periods. This disclosure shall be accompanied by a statement of the action taken or planned to resolve the situation; and  
I11(d) Objectives and timetable established for the next reporting period.  


I80ï¿½1A4284.559_4284.570
I89[Reserved]  


I80ï¿½1A4284.571
I89Audit requirements.  
I11The grantee will provide an audit report in accordance with 1942.17 of this title. Audits must be prepared in accordance with general accounting principles and standards using the publication, ``Standards for Audit of Governmental Organizations, Programs, Activities and Functions.''  


I80ï¿½1A4284.572
I89Grant servicing.  
I11Grants will be serviced in accordance with part 1951, subpart E of this title.  


ï¿½533ï¿½I80ï¿½1A4284.573
I89Programmatic changes.  
I11The grantee shall obtain prior approval for any change to the scope or objectives of the approved project. Failure to obtain prior approval of changes to the scope or budget can result in suspension or termination of grant funds.  


I80ï¿½1A4284.574
I89Subsequent grants.  
I11Subsequent grants will be processed in accordance with the requirements contained in this subpart. Cooperative development projects receiving assistance under this program will be evaluated one year after assistance is received. If it is determined to be in the best interests of the program, preference may be given to a project or projects for an additional grant in the immediately succeeding year.  


I80ï¿½1A4284.575
I89Grant suspension, termination, and cancellation.  
I11Grants may be canceled by RBS by written notice. Grants may be suspended or terminated for cause or convenience in accordance with parts 3015 and 3019 of this title, as applicable.  


I80ï¿½1A4284.576_4284.586
I89[Reserved]  


I80ï¿½1A4284.587
I89Exception authority.  
I11The Administrator may, in individual cases, make an exception to any requirement or provision of this subpart, if the Administrator determines that application of the requirement or provision would adversely affect the Government's interest.  


I80ï¿½1A4284.588_4284.599
I89[Reserved]  


I80ï¿½1A4284.600
I89OMB control number.  
I11The information collection requirements contained in this regulation have been approved by the Office of Management and Budget (OMB) and have been assigned OMB control number 0570ï¿½090006. You are not required to respond to this collection of information unless it displays a valid OMB control number.  




I56Subpart G_Rural Business Opportunity Grants

Q04I21T5Source: T164 FR 71986, Dec. 23, 1999, unless otherwise noted.

Q04I21T5Effective Date Note: T1At 64 FR 71986, Dec. 23, 1999, subpart G, consisting of ï¿½1A4284.601 through 4284.700 was added to part 4284, effective Jan. 24, 2000. 



I80ï¿½1A4284.601
I89Purpose.
I11This subpart outlines Agency policies and authorizations and sets forth procedures for making grants to provide technical assistance for business development and conduct economic development planning in rural areas. The purpose of this program is to promote sustainable economic development in rural communities with exceptional needs by:
I11(a) Promoting economic development that is sustainable over the long term through local effort without subsidies or external support and that leads to improvements in quality as well as the quantity of economic activity in the community;
I11(b) Catalyzing economic development projects by providing critical investments that enable effective development projects to be undertaken by rural communities that, with the Rural Business Opportunity Grants (RBOG) assistance, will be able to identify their needs and take full advantage of available resources and opportunities;
I11(c) Focusing assistance on priority communities (defined in ï¿½1A4284.603); and
I11(d) Sponsoring economic development activities with significant potential to serve as examples of ``best practices'' that merit implementation in rural communities in similar circumstances.


I80ï¿½1A4284.602
I89Policy.
I11(a) The grant program will be used to assist in the economic development of rural areas.
I11(b) Funds allocated for use in accordance with this subpart are also to be considered for use by Indian tribes within the State regardless of whether State development strategies include ï¿½534ï¿½Indian reservations within the State's boundaries. Indians residing on such reservations must have equal opportunity, along with other rural residents, to participate in the benefits of these programs.



I80ï¿½1A4284.603
I89Definitions.
I11T3Agency.G1T1 The Federal agency within the United States Department of Agriculture (USDA) with responsibility assigned by the Secretary of Agriculture to administer the RBOG Program. At the time of publication, that agency is the Rural Business-Cooperative Service.
I11T3Best practice project.G1T1 An action that has potential applicability in other rural communities and which potentially has instructional value when shared with those communities.
I11T3Business support centers.G1T1 Centers established to provide assistance to businesses in such areas as counseling, business planning, training, management assistance, marketing information, and locating financing for business operations. The centers need not be located in a rural area, but must provide assistance to businesses located in rural areas.
I11T3Economic development.G1T1 The industrial, business and financial augmentation of an area as evidenced by increases in total income, employment opportunities, value of production, duration of employment, or diversification of industry, reduced outmigration, higher labor force participation rates or wage levels, or gains in other measurements of economic activity, such as land values.
I11T3Long-term.G1T1 The period of time covered by the three most recent decennial censuses of the United States to the present.
I11T3Planning.G1T1 A process to coordinate economic development activities, develop guides for action, or otherwise assist local community leaders in the economic development of rural areas.
I11T3Priority communities.G1T1 Communities targeted for Agency assistance as determined by the USDA Under Secretary for Rural Development. Priority communities are those that are experiencing trauma due to natural disasters or are undertaking or completing fundamental structural changes, have remained persistently poor, or have experienced long-term population decline or job deterioration.
I11T3Project.G1T1 The result of the use of grant funds provided under this subpart through technical assistance or planning relating to the economic development of a rural area.
I11T3Rural and rural area.G1T1 Any area of a State that is not within the boundaries of a city with a population in excess of 10,000 inhabitants, according to the latest decennial census of the United States.
I11T3State.G1T1 Any of the 50 States, the Commonwealth of Puerto Rico, the Virgin Islands of the United States, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands.
I11T3Sustainable development.G1T1 Development planned and designed to consider and balance environmental quality, economic needs, and social concerns.
I11T3Technical assistance.G1T1 A nonconstruction, problem solving activity performed for the benefit of a business or community to assist in the economic development of a rural area. The Agency will determine whether a specific activity qualifies as technical assistance.
I11T3United States.G1T1 The 50 States of the United States of America, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands of the United States, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands.


I80ï¿½1A4287.604ï¿½094287.619
I89[Reserved]


I80ï¿½1A4284.620
I89Applicant eligibility.
I11(a) Grants may be made to public bodies, nonprofit corporations, Indian tribes on Federal or State reservations and other Federally recognized tribal groups, and cooperatives with members that are primarily rural residents and that conduct activities for the mutual benefit of the members.
I11(b) Applicants must have sufficient financial strength and expertise in activities proposed in the application to ï¿½535ï¿½ensure accomplishment of the described activities and objectives.

I11(1) Financial strength will be analyzed by the Agency based on financial data provided in the application. The analysis will consider the applicant's tangible net worth, which must be positive, and whether the applicant has dependable sources of revenue or a successful history of raising revenue sufficient to meet cash requirements.
I11(2) Expertise will be analyzed by the Agency based on the applicant staff's training and experience in activities similar to those proposed in the application and, if consultants will be used, on the staff's experience in choosing and supervising consultants.
I11(c) Any delinquent debt to the Federal Government shall cause the applicant to be ineligible to receive any RBOG funds until the debt has been paid.


I80ï¿½1A4284.621
I89Eligible grant purposes.
I11(a) Grant funds may be used to assist in the economic development of rural areas by providing technical assistance for business development and economic development planning. Grant funds may be used for, but are not limited to, the following purposes:
I11(1) Identify and analyze business opportunities that will use local rural materials or human resources. This includes opportunities in export markets, as well as feasibility and business plan studies.
I11(2) Identify, train, and provide technical assistance to existing or prospective rural entrepreneurs and managers;
I11(3) Establish business support centers and otherwise assist in the creation of new rural businesses;
I11(4) Conduct local community or multi-county economic development planning;
I11(5) Establish centers for training, technology, and trade that will provide training to rural businesses in the utilization of interactive communications technologies to develop international trade opportunities and markets;
I11(6) Conduct leadership development training of existing or prospective rural entrepreneurs and managers; or
I11(7) Pay reasonable fees and charges for professional services necessary to conduct the technical assistance, training, or planning functions.
I11(b) Grants may be made only when there is a reasonable prospect that the project will result in the economic development of a rural area.
I11(c) Grants may be made only when the proposal includes a basis for determining the success or failure of the project and individual major elements of the project and outlines procedures that will be taken to assess the project's impact at its conclusion.
I11(d) Grants may be made only when the proposed project is consistent with local and area-wide strategic plans for community and economic development, coordinated with other economic development activities in the project area and consistent with any USDA Rural Development State Strategic Plan.
I11(e) A grant may be considered for the amount needed to assist with the completion of a proposed project, provided that the project can reasonably be expected to be completed within 2 full years after it is begun. If grant funds are requested to establish or assist with an activity of more than 2 years duration, the amount of a grant approved in any fiscal year will be limited to the amount needed to assist with no more than 1 full year of operation. Subsequent grant requests may be considered in subsequent years, if needed to continue the operation, but funding for 1 year provides no assurance of additional funding in subsequent years.


I80ï¿½1A4284.622ï¿½094287.628
I89[Reserved]


I80ï¿½1A4284.629
I89Ineligible grant purposes.
I11Grant funds may not be used to:
I11(a) Duplicate current services or replace or substitute support previously provided. If the current service is inadequate, however, grant funds may be used to expand the level of effort or services beyond what is currently being provided;
I11(b) Pay costs of preparing the application package for funding under this program;
I11(c) Pay costs of the project incurred prior to the effective date of the grant made under this subpart;
I11(d) Fund political activities;
ï¿½536ï¿½I11(e) Pay for assistance to any private business enterprise which does not have at least 51 percent ownership by those who are either citizens of the United States or reside in the United States after being legally admitted for permanent residence;
I11(f) Pay any judgment or debt owed to the United States; or
I11(g) Pay costs of real estate acquisition or development or building construction.


I80ï¿½1A4284.630
I89Other considerations.
I11(a) T3Civil rights compliance requirements.G1T1 All grants made under this subpart are subject to title VI of the Civil Rights Act of 1964 and part 1901, subpart E of this title.

I11(b) T3Environmental review.G1T1 All grants made under this subpart are subject to the requirements of subpart G of part 1940 of this title. Applications for technical assistance or planning projects are generally excluded from the environmental review process by ï¿½1A1940.333 of this title provided the assistance is not related to the development of a specific site. Applicants for grant funds must consider and document within their plans the important environmental factors within the planning area and the potential environmental impacts of the plan on the planning area, as well as the alternative planning strategies that were reviewed.
I11(c) T3Other USDA regulations.G1T1 This program is subject to the provisions of the following regulations, as applicable;
I11(1) 7 CFR part 3015, Uniform Federal Assistance Regulations;
I11(2) 7 CFR part 3016, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments;
I11(3) 7 CFR part 3017, Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants);
I11(4) 7 CFR part 3018, New Restrictions on Lobbying;
I11(5) 7 CFR part 3019, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations; and
I11(6) 7 CFR part 3052, Audits of States, Local Governments, and Non-profit Organizations.


I80ï¿½1A4284.631ï¿½094284.637
I89[Reserved]


I80ï¿½1A4284.638
I89Application processing.
I11(a) T3Applications.G1T1 (1) Applicants will file an original and one copy of ``Application For Federal Assistance (For Nonconstruction),'' with the Agency State Office (available in any Agency office).
I11(2) All applications shall be accompanied by:
I11(i) Copies of applicant's organizational documents showing the applicant's legal existence and authority to perform the activities under the grant;
I11(ii) A proposed scope of work, including a description of the proposed project, details of the proposed activities to be accomplished and timeframes for completion of each task, the number of months duration of the project, and the estimated time it will take from grant approval to beginning of project implementation;
I11(iii) A written narrative which includes, at a minimum, the following items:
I11(A) An explanation of why the project is needed, the benefits of the proposed project, and how the project meets the grant selection criteria;
I11(B) Area to be served, identifying each governmental unit, i.e., town, county, etc., to be affected by the project;
I11(C) Description of how the project will coordinate economic development activities with other economic development activities within the project area;
I11(D) Business to be assisted, if appropriate; economic development to be accomplished;
I11(E) An explanation of how the proposed project will result in increased or saved jobs in the area and the number of projected new and saved jobs;
I11(F) Description of the applicant's demonstrated capability and experience in providing the proposed project assistance or similar economic development activities, including experience of key staff members and persons who will be providing the proposed project activities and managing the project;

ï¿½537ï¿½I11(G) Method and rationale used to select the areas and businesses that will receive the service;
I11(H) Brief description of how the work will be performed including whether organizational staff or consultants or contractors will be used; and
I11(I) Other information the Agency may request to assist it in making a grant award determination.
I11(iv) The latest financial information to show the organization's financial capacity to carry out the proposed work. At a minimum, the information should include the most recent balance sheet and an income statement. A current audited report is required if available;
I11(v) An evaluation method to be used by the applicant to determine if objectives of the proposed activity are being accomplished; and
I11(vi) Intergovernmental review comments from the State Single Point of Contact, or evidence that the State has elected not to review the program under Executive Order 12372.
I11(b) T3Letter of conditions.G1T1 The Agency will notify the approved applicant in writing, setting out the conditions under which the grant will be made.
I11(c) T3Applicant's intent to meet conditions.G1T1 Upon reviewing the conditions and requirements in the letter of conditions, the applicant must complete, sign and return a ``Letter of Intent to Meet Conditions,'' to the Agency; or if certain conditions cannot be met, the applicant may propose alternate conditions to the Agency. The Agency must concur with any changes proposed to the letter of conditions by the applicant before the application will be further processed.


I80ï¿½1A4284.639
I89Grant selection criteria.
I11Agency officials will select projects to receive assistance under this program according to the following criteria:
I11(a) A score of 0 to 10 points will be awarded based on the Agency assessment of the extent to which economic development resulting from the proposed project will be sustainable over the long term by local efforts, without the need for continued subsidies by governments or other organizations outside the community.
I11(b) A score of 0 to 10 points will be awarded based on the Agency assessment of the extent to which the project should lead to improvements in the quality of economic activity within the community, such as higher wages, improved benefits, greater career potential, and the use of higher levels of skills than currently are typical within the economy.
I11(c) If the grant will fund a critical element of a larger program of economic development, without which the overall program either could not proceed or would be far less effective, or if the program to be assisted by the grant will also be partially funded from other sources, points will be awarded as follows based on the percentage of the cost of the overall program that will be funded by the grant.
I11(1) Less than 20 percent_30 points;
I11(2) 20 but less than 50 percent_20 points;
I11(3) 50 but less than 75 percent_10 points; or
I11(4) More than 75 percent_0 points.
I11(d) Points will be awarded for each of the following criteria met by the community or communities that will receive the primary benefit of the grant. However, regardless of the mathematical total of points indicated by paragraphs (d)(1) through (d)(5) of this section, total points awarded under paragraph (d) must not exceed 40.
I11(1) Experiencing trauma due to a major natural disaster that occurred not more than 3 years prior to the filing of the application for RBOG assistance_15 points;

I11(2) Undergoing fundamental structural change in the local economy, such as that caused by the closing or major downsizing of a military facility or other major employer not more than 3 years prior to the filing of the application for RBOG assistance_15 points;
I11(3) Has experienced long-term poverty_10 points;
I11(4) Has experienced long-term population decline_10 points; and
I11(5) Has experienced long-term job deterioration_10 points.
I11(e) A score of 0 to 10 points will be awarded based on the Agency determination of the extent of the project's usefulness as a new best practice as defined in ï¿½1A4284.603.
ï¿½538ï¿½I11(f) The State Director may assign up to 15 discretionary points to an application. If allocation of funds under National Office control is being considered, the Agency Administrator may assign up to 20 additional discretionary points. Assignment of discretionary points by either the State Director or the Agency Administrator must include a written justification. Permissible justifications are geographic distribution of funds, special importance for implementation of a strategic plan in partnership with other organizations, or extraordinary potential for success due to superior project plans or qualifications of the grantee.


I80ï¿½1A4284.640
I89Appeals.
I11Any appealable adverse decision made by the Agency may be appealed in accordance with USDA appeal regulations found at 7 CFR part 11. If the Agency makes a determination that a decision is not appealable, a request for a determination of appealability may be made to the National Appeals Staff.


I80ï¿½1A4284.641ï¿½094287.646
I89[Reserved]


I80ï¿½1A4284.647
I89Grant approval and obligation of funds.

I11(a) The following statement will be entered in the comment section of the Request For Obligation of Funds, which must be signed by the grantee:
Q04

I21The grantee certifies that it is in compliance with and will continue to comply with all applicable laws; regulations; Executive Orders; and other generally applicable requirements, including those contained in 7 CFR part 4284, subpart G, and 7 CFR parts 3015, 3016, 3017, 3018, 3019, and 3052 in effect on the date of grant approval; and the approved Letter of Conditions.


I11(b) [Reserved]




I80ï¿½1A4284.648
I89Fund disbursement.
I11The Agency will determine, based on 7 CFR parts 3015, 3016, and 3019, as applicable, whether disbursement of a grant will be by advance or reimbursement. A Request for Advance or Reimbursement, (available in any Agency office) must be completed by the grantee and submitted to the Agency no more often than monthly to request either advance or reimbursement of funds.


I80ï¿½1A4284.649ï¿½094284.655
I89[Reserved]


I80ï¿½1A4284.656
I89Reporting.
I11(a) A Financial Status Report (available in any Agency office) and a project performance activity report will be required of all grantees on a quarterly basis. The grantee will cause said program to be completed within the total sums available to it, including the grant, in accordance with the scope of work and any necessary modifications thereof prepared by grantee and approved by the Agency. A final project performance report will be required with the final Financial Status Report. The final report may serve as the last quarterly report. The final report must provide complete information regarding the jobs created and saved as a result of the grant. Grantees shall constantly monitor performance to ensure that time schedules are being met, projected work by time periods is being accomplished, and other performance objectives are being achieved. Grantees are to submit an original of each report to the Agency. The project performance reports shall include, but not be limited to, the following:
I11(1) A comparison of actual accomplishments to the objectives established for that period;

I11(2) Problems, delays, or adverse conditions, if any, which have affected or will affect attainment of overall project objectives, prevent meeting time schedules or objectives, or preclude the attainment of particular project work elements during established time periods. This disclosure shall be accompanied by a statement of the action taken or planned to resolve the situation; and
I11(3) Objectives and timetable established for the next reporting period.
I11(b) Within 1 year after the conclusion of the project, the grantee will provide a project evaluation report based on criteria developed in accordance with ï¿½1Aï¿½1A4284.621(c) and 4284.638(a)(2)(v).
I11(c) The Agency may also require grantees to prepare a report suitable for public distribution describing the accomplishments made through the use of the grant and, in the case where the grant funded the development or application of a ``best practice,'' to describe that ``best practice.''
ï¿½539ï¿½I11(d) The grantee will provide for Financial Management Systems which will include:
I11(1) Accurate, current, and complete disclosure of the financial result of each grant.
I11(2) Records which identify adequately the source and application of funds for grant-supporting activities, together with documentation to support the records. Those records shall contain information pertaining to grant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays, and income.
I11(3) Effective control over and accountability for all funds. Grantee shall adequately safeguard all such assets and shall assure that funds are used solely for authorized purposes.
I11(e) The grantee will retain financial records, supporting documents, statistical records, and all other records pertinent to the grant for a period of at least 3 years after grant closing except that the records shall be retained beyond the 3-year period if audit findings have not been resolved or if directed by the United States. Microfilm copies may be substituted in lieu of original records. The Agency and the Comptroller General of the United States, or any of their duly authorized representatives, shall have access to any books, documents, papers, and records of the grantee which are pertinent to the specific grant program for the purpose of making audit, examination, excerpts, and transcripts.


I80ï¿½1A4284.657
I89Audit requirements.
I11Grantees must provide an annual audit in accordance with 7 CFR part 3052. The audit requirements apply to the years in which grant funds are received and years in which work is accomplished that will be paid for with grant funds.


I80ï¿½1A4284.658ï¿½094284.666
I89[Reserved]


I80ï¿½1A4284.667
I89Grant servicing.
I11Grants will be serviced in accordance with part 1951, subparts E and O, of this title. Grantees will permit periodic inspection of the program operations by a representative of the Agency. All non-confidential information resulting from the Grantee's activities shall be made available to the general public on an equal basis.


I80ï¿½1A4284.668
I89Programmatic changes.
I11The Grantee shall obtain prior approval for any change to the scope or objectives of the approved project. Failure to obtain prior approval of changes to the scope of work or budget may result in suspension, termination, and recovery of grant funds.


I80ï¿½1A4284.669ï¿½094284.683
I89[Reserved]


I80ï¿½1A4284.684
I89Exception authority.
I11The Administrator may, in individual cases, grant an exception to any requirement or provision of this subpart provided the Administrator determines that application of the requirement or provision would adversely affect USDA's interest.


I80ï¿½1A4284.685ï¿½094284.698
I89[Reserved]


I80ï¿½1A4284.699
I89Member delegate clause.
I11No member of Congress shall be admitted to any share or part of this grant or any benefit that may arise therefrom; but this provision shall not be construed to bar as a contractor under the grant a publicly held corporation whose ownership might include a member of Congress.


I80ï¿½1A4284.700
I89OMB control number.
I11The reporting and recordkeeping requirements contained in this regulation have been approved by the Office of Management and Budget under the provisions of 44 U.S.C. chapter 35 and have been assigned OMB control number 0570ï¿½090024 in accordance with the Paperwork Reduction Act of 1995. You are not required to respond to this collection of information unless it displays a valid OMB control number. 










I95Pt. 4285
I52PART 4285_COOPERATIVE AGREEMENTS 


I86Subpart A_Federal-State Research on Cooperatives Program
S8006I18Sec. 
S8010I264285.1Objective. 
I264285.2Cooperative agreement purposes. 
I264285.3Definitions. 
I264285.4_4285.23[Reserved] 
I264285.24Eligibility. 
ï¿½540ï¿½I264285.25Authorized use of cooperative agreement funds. 
I264285.26_4285.45[Reserved] 
I264285.46Prohibited use of cooperative agreement funds. 
I264285.47Limitations. 
I264285.48_4285.57[Reserved] 
I264285.58How to apply for cooperative agreement funds. 
I264285.59_4285.68[Reserved] 
I264285.69Evaluation and disposition of applications. 
I264285.70Evaluation criteria. 
I264285.71_4285.80[Reserved] 
I264285.81Cooperative agreement awards. 
I264285.82Use of funds; changes. 
I264285.83_4285.92[Reserved] 
I264285.93Other Federal statutes and regulations that apply. 
I264285.94Other conditions. 
I264285.95_4285.99[Reserved] 
I264285.100OMB control number.

Q04I21T5Authority:  T17 U.S.C. 1623; Public Law 103ï¿½09111, 107 Stat. 1046; 7 U.S.C. 2201; USDA Secretary's Memorandum 1020ï¿½0939, dated September 30, 1993; and Public Law 103ï¿½09211, 108 Stat. 3. 
Q04I21T5Source:  T159 FR 38342, July 28, 1994, unless otherwise noted.

I56Subpart A_Federal-State Research on Cooperatives Program 

I80ï¿½1A4285.1 
I89Objective. 
I11This subpart sets forth the policies and procedures and delegates authority for providing Federal-State Research on Cooperatives cooperative agreement funds to finance programs of research on cooperatives as authorized under Section 204 (b) of the Agricultural Marketing Act of 1946 (7 U.S.C. 1623 (b)). The primary purpose of this matching fund program, via cooperative agreements, is to encourage State Departments of Agriculture and State Agricultural Experiment Stations in conducting research related to agricultural cooperatives. 

I80ï¿½1A4285.2 
I89Cooperative agreement purposes. 
I11Rural Development Administration (RDA) or its successor agency may enter into a cooperative agreement with a State agency to provide funds to the State agency to: 
I11(a) Conduct marketing research related to agricultural cooperatives. 
I11(b) Assist other organizations in conducting marketing research related to agricultural cooperatives. 

I80ï¿½1A4285.3 
I89Definitions. 
I11As used in this part: 
I11T3Agreement period.G1T1 The total period of time approved by the Assistant Administrator for Cooperative Services for conducting the proposed project as outlined in an approved application. The time period is normally no more than 3 years, renewable for cause not to exceed a total of 4 fiscal years. 
I11T3Agricultural products.G1T1 Agricultural products include agricultural, horticultural, viticultural, and dairy products, livestock and poultry, bees, forest products, fish and shellfish, and any products thereof, including processed or manufactured products, and any and all products raised or produced on farms and any processed or manufactured product thereof. 
I11T3Assistant Administrator for Cooperative Services.G1T1 The Assistant Administrator for Cooperative Services, Rural Development Administration or its successor agency, USDA or any authorized delegate. 
I11T3Awarding official.G1T1 The Assistant Administrator for Cooperative Services or authorized delegate. 
I11T3Cooperative agreement.G1T1 A legal instrument reflecting a relationship between the United States Government and a State where: 
I11(1) The principal purpose of the relationship is the transfer of money, property, services, or anything of value to the State agency to carry out research related to cooperatives; and 
I11(2) Substantial involvement is anticipated between RDA or its successor agency, acting for the Federal Government, and the State or other recipient during performance of the research in the agreement. 
I11T3Cooperator.G1T1 The State agency designated in the cooperative agreement award document as the responsible legal entity to whom a cooperative agreement is awarded under this part. 
I11T3Department.G1T1 The U.S. Department of Agriculture. 
I11T3Methodology.G1T1 The research approach to be followed to carry out the project. 
ï¿½541ï¿½I11T3Principal investigator.G1T1 A single individual who is responsible for the scientific and technical direction of the project, as designated by the cooperator in the cooperative agreement application and approved by the Assistant Administrator for Cooperative Services. 
I11T3Project.G1T1 The particular activity within the scope of one or more of the research program areas identified in the annual program solicitation that is supported by a cooperative agreement under this part. 
I11T3State agencies.G1T1 State agencies include, among others, State Agricultural Experiment Stations and State Departments of Agriculture in the 50 States, the Virgin Islands, and Guam, and other appropriate State agencies. Final determination of whether certain 1890 or 1862 Land Grant institutions qualify as state agencies will be determined on a case-by-case basis by the Office of the General Counsel (OGC), USDA. 

I80ï¿½1A4285.4_4285.23 
I89[Reserved] 

I80ï¿½1A4285.24 
I89Eligibility. 
I11To enter into a cooperative agreement for these funds, the applicant must: 
I11(a) Be a State Agency as defined in ï¿½1A4285.3 of this subpart; 
I11(b) Have the financial, legal, administrative, and actual capacity to assume and carry out the responsibilities imposed by the Agreement. To meet the requirement of actual capacity it must either: 
I11(1) Have necessary background and experience with proven ability to perform responsibly in the field of economic, business management, or other needed research area; or 
I11(2) Have the necessary administrative and supervisory controls in place to assure an agreed upon contracting organization has the proven ability to perform responsibly in the field of economic, business management, or other needed research area; 
I11(c) Legally obligate itself to administer cooperative agreement funds, provide adequate accounting of the expenditure of such funds, and comply with the cooperative agreement; 
I11(d) Provide at least 50 percent of the funds necessary to conduct the research from non-federal funds; and 
I11(e) Agree to conduct proposed research related to cooperatives and agricultural marketing. 

I80ï¿½1A4285.25 
I89Authorized use of cooperative agreement funds. 
I11Funds received for research under cooperative agreements in this program shall only be used for: 
I11(a) Payment of salaries and necessary employee benefits of personnel as agreed upon in the Cooperative Agreement. Included are salaries and benefits of State employees assigned full-time to one or more projects, or the percent of the salaries and benefits related to project work for State employees assigned part-time to research on one or more projects. Salaries and benefits include basic salary, other compensation such as holiday pay, sick or annual leave, and personnel benefits (quarters allowance, payments to other funds such as employees' life insurance, health benefits, retirement, Federal Insurance Contributions Act (FICA), accident compensation, and similar payments). For any of the benefit items when the State usually pays the employer share, Federal funds may be used to pay the proportionate share of such employer contributions. 
I11(b) Payment of necessary and reasonable office expenses such as office rental, office utilities, and office equipment rental. The purchase of office equipment is permissible when the cooperator determines it to be more economical than renting. However, as a general rule, these types of expenses would be classified as indirect costs in multiple funded organizations and would not be an allowable expense. Planned purchases of equipment costing more than $200 per unit must be approved by RDA or its successor agency. Equipment purchased becomes State property pursuant to the cooperative agreement. 
I11(c) Payment of necessary and reasonable costs of printing publications of research project results. However, all such publications should show the RDA or its successor agency as cooperator in the project and bear the following statement: ``State funds for this ï¿½542ï¿½project (publication) were matched with Federal funds under the Federal-State Research on Cooperatives Program of the U.S. Department of Agriculture, Rural Development Administration or its successor agency, Cooperative Services, as provided by the Agricultural Marketing Act of 1946 and (appropriate) fiscal year appropriations.'' 
I11(d) Purchase of office supplies (such as paper, pens, pencils, and trade magazines) and postage needed for project activities. 
I11(e) Payment of necessary and reasonable travel expenses. 

I80ï¿½1A4285.26_4285.45 
I89[Reserved] 

I80ï¿½1A4285.46 
I89Prohibited use of cooperative agreement funds. 
I11(a) The Agricultural Marketing Act prohibits the use of Federal funds to pay for newspaper or periodical space and radio and television time, either directly to the media or indirectly though an advertising agency or other firm. County and State fair exhibits, as well as commodity months and weeks, are also excluded as the research on cooperatives program activities. 
I11(b) Federal funds cannot be used to purchase products or samples of products to give away to the public. 
I11(c) Federal program funds cannot be used to purchase: 
I11(1) Promotional pieces such as point-of-sale materials, promotional kits, billboard space and signs, streamers, automobile stickers, table tents, and placemats; or 
I11(2) Promotion items of a personal gift nature. 
I11(d) Cooperative agreement funds cannot be used to conduct general publicity or information programs designed to build the image of the State's agriculture or of a particular State Department of Agriculture or Agricultural Experiment Station. 
I11(e) Project funds cannot be used to pay for the salary and travel of employees of cooperatives, trade associations, commodity groups, and other industry organizations, or of State personnel while engaged in managing market orders, cooperatives, or other group endeavors. 
I11(f) Commissioners, Directors, and Secretaries of State Departments of Agriculture, Agricultural Experiment Stations, and other State agencies cannot charge their salaries and travel to project funds, with the exception of travel to workshops or conferences devoted to the Federal-State Research On Cooperatives Program. 
I11(g) Funds made available for this program shall not be subject to reduction for indirect costs or for tuition remission. 

I80ï¿½1A4285.47 
I89Limitations. 
I11The amount of funds available for the cooperative agreements under this program is limited to the amount appropriated for the fiscal year. 

I80ï¿½1A4285.48_4285.57 
I89[Reserved] 

I80ï¿½1A4285.58 
I89How to apply for cooperative agreement funds. 
I11(a) A program solicitation will be prepared and announced through publications such as the T4Federal RegisterG1T1, professional trade journals, agency or program handbooks, and/or any other appropriate means, as early as practicable each fiscal year in which funds are appropriated for the program. 
I11(b) The annual program solicitation will contain information sufficient to enable all eligible applicants to prepare proposals including: 
I11(1) Desired research topics. The FYï¿½0994 solicitation will encourage studies: 
I11(i) To improve the efficiency and effectiveness of marketing of agricultural cooperatives; 
I11(ii) To measure the impact of rural cooperatives on the local economies; 
I11(iii) That help identify opportunities to develop cooperatives for new or alternative market uses of agricultural products; 
I11(iv) That help identify ways to develop agricultural marketing cooperatives; and
I11(v) Addressing other cooperative marketing objectives; 
I11(2) Explanation of eligibility requirements as outlined in ï¿½1A4285.24 of this subpart; 
I11(3) The notice of availability of application forms and instructions for submission of applications; 
I11(4) The notice of deadline dates for postmarking proposal packages. 
ï¿½543ï¿½I11(c) T3Format for proposals.G1T1 Unless otherwise indicated by the Department in the annual program solicitation, the following information must be submitted for the preparation of proposals under this program: 
I11(1) Form SFï¿½09424, ``Application for Federal Assistance.''
I11(2) Form SFï¿½09424A, ``Budget Information_Non-Construction Programs.''
I11(3) Form SFï¿½09424B, ``Assurances_Non-Construction Programs.''
I11(4) T3Statement of Work.G1T1 The application must include a narrative statement describing the nature of the proposed research. The Statement of Work must include at least the following:
I11(i) Title of the Project. The title of the proposal must be brief, yet represent the major thrust of the project.
I11(ii) Project Leaders. List the name(s) of the principal investigator(s). Minor collaborators or consultants should be so designated and not listed as principal investigators.
I11(iii) Need for the Project. A concisely worded rationale behind the proposed research must be presented. The need for the proposed research must be clearly related to marketing and to the needs of agricultural cooperatives.
I11(iv) Objectives of the project. The specific description of the overall project goal(s) and supporting objectives must be presented.
I11(v) Procedures for conducting the research. The hypotheses or questions being asked and the methodology being applied to the proposed project must be described. A description of any subcontracting arrangements that will be used for conducting the research must be included. A tentative schedule for conducting major steps involved in the investigation must also be included.
I11(vi) The expected output of the project. A description of how the results of the research will be disseminated should be presented. Responsibility for publishing any research reports or other types of output should also be identified.
I11(5) T3Collaborative arrangements.G1T1 If the nature of the proposed project requires collaboration or subcontractual arrangements with other research scientists, corporations, organizations, agencies, or entities, the applicant must identify the collaborator(s) and provide a full explanation of the nature of the collaboration. Evidence (T3i.e.G1T1, letters of intent) should be provided to assure reviewers that the collaborators involved have agreed to render this service. In addition, the proposal must indicate whether or not such a collaborative arrangement(s) has the potential for conflict(s) of interest.
I11(6) T3Personnel support.G1T1 To assist reviewers in assessing the competence and experience of the proposed project staff, key personnel who will be involved in the proposed project must be identified clearly. For each principal investigator involved, and for all senior associates and other professional personnel who expect to work on the project, whether or not funds are sought for their support, the following must be included:
I11(i) An estimate of the time commitments necessary;
I11(ii) Curriculum Vitae. The curriculum vitae should be limited to a presentation of academic and research credentials, T3e.g.,G1T1 educational, employment and professional history, and honors and awards. Unless pertinent to the project, it should not include meetings attended, seminars given, or personal data such as birth date, martial status, or community activities; and
I11(iii) Publication List(s). A chronological list of all publications in refereed journals during the past five years, including those in press, must be provided for each professional project member for whom a curriculum vitae is provided. Also list other non-refereed technical publications that have relevance to the proposed project. Authors should be listed in the same order as they appear on each paper cited, along with the title and complete reference as these usually appear in journals.

I80ï¿½1A4285.59_4285.68 
I89[Reserved]

I80ï¿½1A4285.69 
I89Evaluation and disposition of applications.
I11(a) T3Evaluation.G1T1 (1) All proposals received from eligible applicants and postmarked in accordance with deadlines established in the annual program solicitation shall be evaluated by the Assistant Administrator for Cooperative Services through an RDA or its ï¿½544ï¿½successor agency staff panel. The Assistant Administrator for Cooperative Services will select the evaluation panel from staff determined to be highly qualified in the subject matter areas that were emphasized in the current year's solicitation and from those with no potential conflict of interest with the applicants.
I11(2) Prior to technical examination, a preliminary review will be made for responsiveness to the program solicitation (T3e.g.,G1T1 relationship of proposal to research topic(s) listed in solicitation). Proposals that do not fall within the guidelines as stated in the program solicitation will be eliminated from competition and will be returned to the applicant.
I11(3) Proposals will be ranked based on evaluation criteria established in ï¿½1A4285.70 of this subpart, and financial support levels will be recommended to the Assistant Administrator for Cooperative Services by the panel within the limitation of the total funding available in the fiscal year. The purpose of these evaluations is to provide information upon which the Assistant Administrator for Cooperative Services may make informed judgments in selecting proposals. Such recommendations are advisory only and are not binding on the awarding official of RDA or its successor agency. To ensure a comprehensive evaluation, all applications should be written with the care and thoroughness accorded papers for publication.
I11(b) T3Disposition.G1T1 (1) On the basis of the Assistant Administrator for Cooperative Services's evaluation of an application in accordance with paragraph (a) of this section, the Assistant Administrator for Cooperative Services will either:
I11(i) Approve support using currently available funds;
I11(ii) Defer support due to lack of funds or need for further evaluation; or
I11(iii) Disapprove support for the proposed project in whole or in part.
I11(2) With respect to any approved project, the Assistant Administrator for Cooperative Services will determine the project period during which the project may be funded.
I11(3) Any deferral or disapproval of an application will not preclude its reconsideration or reapplication during subsequent fiscal years. However, applicants must reapply if reconsideration is desired.
I11(4) The Assistant Administrator for Cooperative Services will not make a cooperative agreement funding award, based upon an application covered by this part, unless the application has been properly reviewed in accordance with the provisions of this part and unless said reviewers have made recommendations concerning the scientific merit and relevance to the program of such application.

I80ï¿½1A4285.70 
I89Evaluation criteria.
I11(a) In evaluating the proposal, the RDA or its successor agency staff review panel and the awarding official will take into account the degree to which the proposal demonstrates the following:
I11(1) Focus on a practical solution to a significant problem involving one or more of the following on a cooperative business basis: the preparation for market, processing, packaging, handling, storing, transporting, distributing, or marketing of agricultural products. (35%)
I11(2) Adequacy, soundness, and appropriateness of the proposed approach to solve the identified problem. (30%)
I11(3) Feasibility and probability of success of project solving the problem. (10%)
I11(4) Qualifications, experience in related work, competence, and availability of project personnel to direct and carry out the project. (25%)
I11(b) In addition, the cost relative to the expected research results will be considered in determining the awarding of the agreements.

I80ï¿½1A4285.71_4285.80 
I89[Reserved]

I80ï¿½1A4285.81 
I89Cooperative agreement awards.
I11(a) T3General.G1T1 Within the limit of funds available for such purpose, the awarding official shall make awards for cooperative agreements to those applicants whose proposals are judged most meritorious in the announced program areas under the evaluation criteria and procedures set forth in this part. The ï¿½545ï¿½date specified by the Assistant Administrator for Cooperative Services as the beginning of the project period shall be no later than September 30 of the Federal fiscal year in which the project is approved and funds are appropriated for such purpose, unless otherwise permitted by law. All funds awarded under this part shall be expended solely in accordance with the methods identified in approved application and budget, the regulations of this part, the terms and conditions of the award, the applicable Federal cost principles, and the Department's ``Uniform Federal Assistance Regulations'' (part 3015 of this title) and the Department's ``Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments'' (part 3016 of this title).
I11(b) T3Cooperative agreement award document and notice of award.G1T1 (1) Cooperative agreement award document. The award document shall include at a minimum the following:
I11(i) Legal name and address of performing organization or institution to whom the Assistant Administrator for Cooperative Services has competitively awarded funds under the terms of this part;
I11(ii) Title of project;
I11(iii) Name(s) and address(es) of principal investigator(s) chosen to direct and control approved activities;
I11(iv) Identifying cooperative agreement number assigned by RDA or its successor agency;
I11(v) Project period, specifying the amount of time the Agency intends to support the project without requiring recompetition for funds;
I11(vi) Total amount of Agency financial assistance approved by the Assistant Administrator for Cooperative Services during the project period;
I11(vii) Legal authority(ies) under which the cooperative agreement is awarded;
I11(viii) Approved budget plan for categorizing allocable project funds to accomplish the stated purpose of the cooperative agreement award; and
I11(ix) Other information or provisions deemed necessary by RDA or its successor agency to carry out its agreement activities or to accomplish the purpose of a particular cooperative agreement.
I11(2) Notice of award. The notice of award of funds for the cooperative agreement will be in the form of a letter providing pertinent instructions or information to the cooperator.
I11(c) T3Types of cooperative agreement instruments.G1T1 The types of cooperative agreements shall be as follows:
I11(1) New agreement. This is an agreement instrument by which RDA or its successor agency agrees to support a specified level of effort for a project not supported previously under this program. This type of agreement is approved on the basis of an RDA or its successor agency Staff evaluation review and recommendation.
I11(2) Renewal agreement. This is an agreement instrument by which RDA or its successor agency agrees to provide additional funding for a project beyond the period approved in an original or amended agreement, provided that the cumulative period does not exceed the statutory limitation. When a renewal application is submitted, it must include a summary of progress to date from the previous agreement period. A renewal agreement shall be based upon new application, de novo review and staff evaluation, new recommendation and approval, and a new award instrument.
I11(3) Supplemental agreement. This is an instrument by which RDA or its successor agency agrees to provide small amounts of additional funding under a new or renewal cooperative agreement as specified in paragraphs (c)(1) and (c)(2) of this section and may involve a short-term (usually one year or less) extension of the project period beyond that approved in an original or amended award, but in no case may the cumulative period for the project exceed the statutory limitation. A supplement is awarded only if required to assure adequate completion of the original scope of work and if there is sufficient justification to warrant such action. A request of this nature will not require additional review.
I11(d) T3Obligation of the Federal Government.G1T1 The approval of any application or the award of any funds for a cooperative agreement shall not commit nor obligate the United States in any way to make any renewal, supplemental, ï¿½546ï¿½continuation, or other award with respect to any approved application or portion of an approved application.
I11(e) T3Obligation of the cooperator.G1T1 The cooperator shall be responsible for:
I11(1) Making a brief quarterly progress reports at the end of each December, March, June and September to the FSROC program staff for the duration of the research project;
I11(2) Presenting a final administrative report on the project at the end of the research project; and
I11(3) Preparing and publishing a report(s) of research findings for dissemination to interested producers, cooperatives, and agencies. Include recognition to financial and other assistance received from the FSROC program.

I80ï¿½1A4285.82 
I89Use of funds; changes.
I11(a) T3Delegation of fiscal responsibility.G1T1 The cooperator may not, in whole or in part, delegate or transfer to another person, institution, or organization the responsibility for use or expenditure of cooperative agreement funds.
I11(b) T3Change in project plans.G1T1 (1) The permissible changes by the cooperator, principal investigator(s), or other key project personnel in the approved cooperative agreement shall be limited to changes in methodology, techniques, or other aspects of the project to expedite achievement of the project's approved goals. If the cooperator and/or the principal investigator(s) is uncertain whether a particular change complies with this provision, the question must be referred to the Assistant Administrator for Cooperative Services for a final determination.
I11(2) Changes in approved goals, or objectives, shall be requested by cooperator and approved in writing by the Assistant Administrator for Cooperative Services, or authorized delegate, prior to effecting such changes. Normally, no requests for such changes outside the scope of the original approved project will be approved.
I11(3) Changes in approved project leadership or the replacement or realignment of other key project personnel shall be requested by the cooperator and approved in writing by the Assistant Administrator for Cooperative Services, or authorized delegate, prior to effecting such changes.
I11(4) Transfers of actual performance of the substantive programmatic work in whole or in part and provisions for payment of funds, whether or not Federal funds are involved, shall be requested by the cooperator and approved in writing by the Assistant Administrator for Cooperative Services, or authorized delegate, prior to effecting such changes, except as may be allowed in the terms and conditions of a cooperative agreement award.
I11(c) T3Changes in project period.G1T1 The project period determined pursuant to ï¿½1A4285.81(b) of this subpart may be extended by the Assistant Administrator for Cooperative Services without additional financial support, for such additional period(s) as the Assistant Administrator for Cooperative Services determines may be necessary to complete, or fulfill the purposes of, an approved project. Any extension, when combined with the originally approved or amended project period, shall not exceed four (4) years and shall be further conditioned upon prior request by the cooperator and approval in writing by the Assistant Administrator for Cooperative Services, or authorized delegate, except as may be allowed in the terms and conditions of a cooperative agreement award.
I11(d) T3Changes in approved budget.G1T1 The terms and conditions of a cooperative agreement will prescribe circumstances under which written Agency approval must be requested and obtained prior to instituting changes in an approved budget.

I80ï¿½1A4285.83_4285.92 
I89[Reserved]

I80ï¿½1A4285.93 
I89Other Federal statutes and regulations that apply.
I11Several other Federal statutes and regulations apply to cooperative agreement proposals considered for review or to agreements awarded under this part. These include but are not limited to: 
I11(a) 7 CFR Part 1, Subpart A_USDA implementation of the Freedom of Information Act; 
I11(b) 7 CFR Part 3_USDA implementation of OMB Circular Aï¿½09129 regarding debt collection; 
ï¿½547ï¿½I11(c) 7 CFR Part 15, Subpart A_USDA implementation of title VI of the Civil Rights Act of 1964 in order to assure nondiscrimination; 
I11(d) 7 CFR Part 1473_National Agricultural, Research, Extension, and Teaching Policy Act Amendments of 1981 if the project involves a college or university; 
I11(e) 7 CFR Part 3015_USDA Uniform Federal Assistance Regulations implementing OMB directives (i.e., Circular Nos. Aï¿½09110, Aï¿½0921, and Aï¿½09122) and incorporating provisions of 31 U.S.C. 6301ï¿½096308 (formerly, the Federal Grant and Cooperative Agreement Act of 1977, Pub. L. 95ï¿½09224, 92 Stat. 3), as well as general policy requirements applicable to recipients of Departmental financial assistance; 
I11(f) 7 CFR Part 3016_USDA Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments; 
I11(g) 7 CFR Part 3017_USDA implementation of Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants); 
I11(h) 7 CFR Part 3018_USDA implementation of New Restrictions on Lobbying. Imposes new prohibitions and requirements for disclosure and certification related to lobbying on recipients of Federal contracts, grants, cooperative agreements, and loans; 
I11(i) 7 CFR Part 3051_Audits of Institutions of Higher Education and Other Nonprofit Institutions; 
I11(j) 29 U.S.C. 794, section 504_Rehabilitation Act of 1973, and 7 CFR Part 15B prohibiting discrimination based upon physical or mental handicap in Federally assisted programs; 
I11(k) 35 U.S.C. 200 T3et seqG1T1._Bayh-Dole Act, controlling allocation of rights to inventions made by employees of small business firms and domestic nonprofit organizations, including universities, in Federally assisted programs (implementing regulations are contained in 37 CFR part 401). 

I80ï¿½1A4285.94 
I89Other conditions. 
I11T3Post-award requirements.G1T1 Upon awarding the cooperative agreement, the post-award requirements of subparts C and D of part 3016 of this title apply. 

I80ï¿½1A4285.95_4285.99 
I89[Reserved] 

I80ï¿½1A4285.100 
I89OMB control number. 
I11The reporting and recordkeeping requirements contained in this regulation have been approved by the Office of Management and Budget (OMB) and have been assigned OMB control number 0570ï¿½090005. Public reporting burden for this collection of information is estimated to vary from 10 minutes to 36 hours per response with an average of 3.48 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Department of Agriculture, Clearance Officer, OIRM, Ag Box 7630, Washington, DC 20250; and to the Office of Management and Budget, Paperwork Reduction Project (OMB #G1T1 0570ï¿½090005), Washington, DC 20503. 

I95Pt. 4287
I52PART 4287_SERVICING 
S8006I86Subpart A_[Reserved] 
S8010
I86Subpart B_Servicing Business and Industry Guaranteed Loans
S8006I18Sec. 
S8010I264287.101Introduction.
I264287.102Definitions.
I264287.103Exception authority.
I264287.104_4287.105[Reserved] 
I264287.106Appeals.
I264287.107Routine servicing.
I264287.108_4287.111[Reserved] 
I264287.112Interest rate adjustments.
I264287.113Release of collateral.
I264287.114_4287.122[Reserved] 
I264287.123Subordination of lien position.
I264287.124Alterations of loan instruments.
I264287.125_4287.133[Reserved] 
I264287.134Transfer and assumption.
I264287.135Substitution of lender.
I264287.136_4287.144[Reserved] 
I264287.145Default by borrower.
I264287.146_4287.155[Reserved] 
I264287.156Protective advances.
I264287.157Liquidation.
I264287.158Determination of loss and payment.
I264287.159_4287.168[Reserved] 
I264287.169Future recovery.
I264287.170Bankruptcy.
I264287.171_4287.179[Reserved] 
I264287.180Termination of guarantee.
I264287.181_4287.199[Reserved] 
ï¿½548ï¿½I264287.200OMB control number.

Q04I21T5Authority:  T15 U.S.C. 301; 7 U.S.C. 1989 
Q04I21T5Source:  T161 FR 67648, Dec. 23, 1996, unless otherwise noted.
S8006I56Subpart A[Reserved] 
S8010
I56Subpart B_Servicing Business and Industry Guaranteed Loans 

I80ï¿½1A4287.101 
I89Introduction. 
I11(a) This subpart supplements part 4279, subparts A and B, by providing additional requirements and instructions for servicing and liquidating all Business and Industry (B&I) Guaranteed Loans. This includes Drought and Disaster (D&D), Disaster Assistance for Rural Business Enterprises (DARBE), and Business and Industry Disaster (BID) loans. 
I11(b) The lender will be responsible for servicing the entire loan and will remain mortgagee and secured party of record notwithstanding the fact that another party may hold a portion of the loan. The entire loan will be secured by the same security with equal lien priority for the guaranteed and unguaranteed portions of the loan. The unguaranteed portion of a loan will neither be paid first nor given any preference or priority over the guaranteed portion of the loan. 
I11(c) Copies of all forms, regulations, and Instructions referenced in this subpart are available in any Agency office. Whenever a form is designated in this subpart, that designation includes predecessor and successor forms, if applicable, as specified by the field or National Office. 

I80ï¿½1A4287.102 
I89Definitions. 
I11The definitions and abbreviations contained in ï¿½1A4279.2 of subpart A of part 4279 of this chapter apply to this subpart. 

I80ï¿½1A4287.103 
I89Exception authority. 
I11Section 4279.15 of subpart A of part 4279 of this chapter applies to this subpart. 

I80ï¿½1A4287.104_4287.105
I89[Reserved] 

I80ï¿½1A4287.106 
I89Appeals. 
I11Section 4279.16 of subpart A of part 4279 of this chapter applies to this subpart. 

I80ï¿½1A4287.107 
I89Routine servicing. 
I11The lender is responsible for servicing the entire loan and for taking all servicing actions that a prudent lender would perform in servicing its own portfolio of loans that are not guaranteed. The Loan Note Guarantee is unenforceable by the lender to the extent any loss is occasioned by violation of usury laws, use of loan funds for unauthorized purposes, negligent servicing, or failure to obtain the required security interest regardless of the time at which the Agency acquires knowledge of the foregoing. This responsibility includes but is not limited to the collection of payments, obtaining compliance with the covenants and provisions in the Loan Agreement, obtaining and analyzing financial statements, checking on payment of taxes and insurance premiums, and maintaining liens on collateral. 
I11(a) T3Lender reports.G1T1 The lender must report the outstanding principal and interest balance on each guaranteed loan semiannually using Form FmHA 1980ï¿½0941, ``Guaranteed Loan Status Report.'' 
I11(b) T3Loan classification.G1T1 Within 90 days of receipt of the Loan Note Guarantee, the lender must notify the Agency of the loan's classification or rating under its regulatory standards. Should the classification be changed at a future time, the Agency must be notified immediately. 
I11(c) T3Agency and lender conference.G1T1 At the Agency's request, the lender will meet with the Agency to ascertain how the guaranteed loan is being serviced and that the conditions and covenants of the Loan Agreement are being enforced. 
I11(d) T3Financial reports.G1T1 The lender must obtain and forward to the Agency the financial statements required by the Loan Agreement. The lender must submit annual financial statements to the Agency within 120 days of the end of ï¿½549ï¿½the borrower's fiscal year. The lender must analyze the financial statements and provide the Agency with a written summary of the lender's analysis and conclusions, including trends, strengths, weaknesses, extraordinary transactions, and other indications of the financial condition of the borrower. Spreadsheets of the new financial statements must be included. 
I11(e) T3Additional expenditures.G1T1 The lender will not make additional loans to the borrower without first obtaining the prior written approval of the Agency, even though such loans will not be guaranteed. 

I80ï¿½1A4287.108_4287.111
I89[Reserved] 

I80ï¿½1A4287.112 
I89Interest rate adjustments. 
I11(a) T3Reductions.G1T1 The borrower, lender, and holder (if any) may collectively initiate a permanent or temporary reduction in the interest rate of the guaranteed loan at any time during the life of the loan upon written agreement among these parties. The Agency must be notified by the lender, in writing, within 10 calendar days of the change. If any of the guaranteed portion has been purchased by the Agency, then the Agency will affirm or reject interest rate change proposals in writing. The Agency will concur in such interest-rate changes only when it is demonstrated to the Agency that the change is a more viable alternative than initiating or proceeding with liquidation of the loan or continuing with the loan in its present state. 
I11(1) Fixed rates can be changed to variable rates to reduce the borrower's interest rate only when the variable rate has a ceiling which is less than or equal to the original fixed rate. 
I11(2) Variable rates can be changed to a fixed rate which is at or below the current variable rate. 
I11(3) The interest rates, after adjustments, must comply with the requirements for interest rates on new loans as established by ï¿½1A4279.125 of subpart B of part 4279 of this chapter. 
I11(4) The lender is responsible for the legal documentation of interest-rate changes by an endorsement or any other legally effective amendment to the promissory note; however, no new notes may be issued. Copies of all legal documents must be provided to the Agency. 
I11(b) T3Increases.G1T1 No increases in interest rates will be permitted except the normal fluctuations in approved variable interest rates unless a temporary interest-rate reduction had occurred. 

I80ï¿½1A4287.113 
I89Release of collateral. 
I11(a) All releases of collateral with a value exceeding $100,000 must be supported by a current appraisal on the collateral released. The appraisal will be at the expense of the borrower and must meet the requirements of ï¿½1A4279.144 of subpart B of part 4279 of this chapter. The remaining collateral must be sufficient to provide for repayment of the Agency's guaranteed loan. The Agency may, at its discretion, require an appraisal of the remaining collateral in cases where it is determined that the Agency may be adversely affected by the release of collateral. Sale or release of collateral must be based on an arm's-length transaction. 
I11(b) Within the parameters of paragraph (a) of this section, lenders may, over the life of the loan, release collateral (other than personal and corporate guarantees) with a cumulative value of up to 20 percent of the original loan amount without Agency concurrence if the proceeds generated are used to reduce the guaranteed loan or to buy replacement collateral. 
I11(c) Within the parameters of paragraph (a) of this section, release of collateral with a cumulative value in excess of 20 percent of the original loan or when the proceeds will not be used to reduce the guaranteed loan or to buy replacement collateral must be requested in writing by the lender and concurred in by the Agency in writing in advance of the release. A written evaluation will be completed by the lender to justify the release. 

I80ï¿½1A4287.114_4287.122
I89[Reserved] 

I80ï¿½1A4287.123 
I89Subordination of lien position. 
I11A subordination of the lender's lien position must be requested in writing by the lender and concurred in by the Agency in writing in advance of the subordination. The subordination must enhance the borrower's business and ï¿½550ï¿½the Agency's interest. After the subordination, collateral must be adequate to secure the loan. The lien to which the guaranteed loan is subordinated must be for a fixed dollar limit and fixed or limited term, after which the guaranteed loan lien priority will be restored. Subordination to a revolving line of credit will not exceed 1 year. There must be adequate consideration for the subordination. 

I80ï¿½1A4287.124 
I89Alterations of loan instruments. 
I11The lender shall neither alter nor approve any alterations of any loan instrument without the prior written approval of the Agency. 

I80ï¿½1A4287.125_4287.133
I89[Reserved] 

I80ï¿½1A4287.134 
I89Transfer and assumption. 
I11(a) T3Documentation of request.G1T1 All transfers and assumptions must be approved in writing by the Agency and must be to eligible applicants in accordance with subpart B of part 4279 of this chapter. An individual credit report must be provided for transferee proprietors, partners, officers, directors, and stockholders with 20 percent or more interest in the business, along with such other documentation as the Agency may request to determine eligibility. 
I11(b) T3Terms.G1T1 Loan terms must not be changed unless the change is approved in writing by the Agency with the concurrence of any holder and the transferor (including guarantors) if they have not been or will not be released from liability. Any new loan terms must be within the terms authorized by 4279.126 of subpart B of part 4279 of this chapter. The lender's request for approval of new loan terms will be supported by an explanation of the reasons for the proposed change in loan terms. 
I11(c) T3Release of liability.G1T1 The transferor, including any guarantor, may be released from liability only with prior Agency written concurrence and only when the value of the collateral being transferred is at least equal to the amount of the loan being assumed and is supported by a current appraisal and a current financial statement. The Agency will not pay for the appraisal. If the transfer is for less than the debt, the lender must demonstrate to the Agency that the transferor and guarantors have no reasonable debt-paying ability considering their assets and income in the foreseeable future. 
I11(d) T3Proceeds.G1T1 Any proceeds received from the sale of collateral before a transfer and assumption will be credited to the transferor's guaranteed loan debt in inverse order of maturity before the transfer and assumption are closed. 
I11(e) T3Additional loans.G1T1 Loans to provide additional funds in connection with a transfer and assumption must be considered as a new loan application under subpart B of part 4279 of this chapter. 
I11(f) T3Credit quality.G1T1 The lender must make a complete credit analysis which is subject to Agency review and approval. 
I11(g) T3Documents.G1T1 Prior to Agency approval, the lender must advise the Agency, in writing, that the transaction can be properly and legally transferred, and the conveyance instruments will be filed, registered, or recorded as appropriate. 
I11(1) The assumption will be done on the lender's form of assumption agreement and will contain the Agency case number of the transferor and transferee. The lender will provide the Agency with a copy of the transfer and assumption agreement. The lender must ensure that all transfers and assumptions are noted on all original Loan Note Guarantees. 
I11(2) A new Loan Agreement, consistent in principle with the original Loan Agreement, should be executed to establish the terms and conditions of the loan being assumed. An assumption agreement can be used to establish the loan covenants. 
I11(3) The lender will provide to the Agency a written certification that the transfer and assumption is valid, enforceable, and complies with all Agency regulations. 
I11(h) T3Loss resulting from transfer.G1T1 If a loss should occur upon consummation of a complete transfer and assumption for less than the full amount of the debt and the transferor (including personal guarantors) is released from liability, the lender, if it holds the guaranteed portion, may file an estimated report of loss to recover its T3pro rataG1T1 ï¿½551ï¿½share of the actual loss. If a holder owns any of the guaranteed portion, such portion must be repurchased by the lender or the Agency in accordance with 4279.78(c) of subpart A of part 4279 of this chapter. In completing the report of loss, the amount of the debt assumed will be entered as net collateral (recovery). Approved protective advances and accrued interest thereon made during the arrangement of a transfer and assumption will be included in the calculations. 
I11(i) T3Related party.G1T1 If the transferor and transferee are affiliated or related parties, any transfer and assumption must be for the full amount of the debt. 
I11(j) T3Payment requests.G1T1 Requests for a loan guarantee to provide equity for a transfer and assumption must be considered as a new loan under subpart B of part 4279 of this chapter. 
I11(k) T3Cash downpayment.G1T1 When the transferee will be making a cash downpayment as part of the transfer and assumption: 
I11(1) The lender must have an appropriate appraiser, acceptable to both the transferee and transferor and currently authorized to perform appraisals, determine the value of the collateral securing the loan. The appraisal fee and any other costs will not be paid by the Agency. 
I11(2) The market value of the collateral, plus any additional property the transferee proposes to offer as collateral, must be adequate to secure the balance of the guaranteed loans. 
I11(3) Cash downpayments may be paid directly to the transferor provided: 
I11(i) The lender recommends that the cash be released, and the Agency concurs prior to the transaction being completed. The lender may wish to require that an amount be retained for a defined period of time as a reserve against future defaults. Interest on such account may be paid periodically to the transferor or transferee as agreed; 
I11(ii) The lender determines that the transferee has the repayment ability to meet the obligations of the assumed guaranteed loan as well as any other indebtedness; 
I11(iii) Any payments by the transferee to the transferor will not suspend the transferee's obligations to continue to meet the guaranteed loan payments as they come due under the terms of the assumption; and 
I11(iv) The transferor agrees not to take any action against the transferee in connection with the assumption without prior written approval of the lender and the Agency. 

I80ï¿½1A4287.135
I89Substitution of lender. 
I11After the issuance of a Loan Note Guarantee, the lender shall not sell or transfer the entire loan without the prior written approval of the Agency. The Agency will not pay any loss or share in any costs (i.e., appraisal fees, environmental studies, or other costs associated with servicing or liquidating the loan) with a new lender unless a relationship is established through a substitution of lender in accordance with paragraph (a) of this section. This includes cases where the lender has failed and been taken over by a regulatory agency such as the Federal Deposit Insurance Corporation (FDIC) and the loan is subsequently sold to another lender. 
I11(a) The Agency may approve the substitution of a new lender if: 
I11(1) The proposed substitute lender: 
I11(i) Is an eligible lender in accordance with 4279.29 of subpart A of part 4279 of this chapter; 
I11(ii) Is able to service the loan in accordance with the original loan documents; and 
I11(iii) Agrees in writing to acquire title to the unguaranteed portion of the loan held by the original lender and assumes all original loan requirements, including liabilities and servicing responsibilities. 
I11(2) The substitution of the lender is requested in writing by the borrower, the proposed substitute lender, and the original lender if still in existence. 
I11(b) Where the lender has failed and been taken over by FDIC and the guaranteed loan is liquidated by FDIC rather than being sold to another lender, the Agency will pay losses and share in costs as if FDIC were an approved substitute lender. 

ï¿½552ï¿½I80ï¿½1A4287.136_4287.144
I89[Reserved] 

I80ï¿½1A4287.145
I89Default by borrower. 
I11(a) The lender must notify the Agency when a borrower is 30 days past due on a payment or is otherwise in default of the Loan Agreement. Form FmHA 1980ï¿½0944, ``Guaranteed Loan Borrower Default Status,'' will be used and the lender will continue to submit this form bimonthly until such time as the loan is no longer in default. If a monetary default exceeds 60 days, the lender will arrange a meeting with the Agency and the borrower to resolve the problem. 
I11(b) In considering options, the prospects for providing a permanent cure without adversely affecting the risk to the Agency and the lender is the paramount objective. 
I11(1) Curative actions include but are not limited to: 
I11(i) Deferment of principal (subject to rights of any holder); 
I11(ii) An additional unguaranteed loan by the lender to bring the account current; 
I11(iii) Reamortization of or rescheduling the payments on the loan (subject to rights of any holder); 
I11(iv) Transfer and assumption of the loan in accordance with ï¿½1A4287.134 of this subpart; 
I11(v) Reorganization; 
I11(vi) Liquidation; 
I11(vii) Subsequent loan guarantees; and 
I11(viii) Changes in interest rates with the Agency's, the lender's, and holder's approval, provided that the interest rate is adjusted proportionately between the guaranteed and unguaranteed portion of the loan and the type of rate remains the same. 
I11(2) In the event a deferment, rescheduling, reamortization, or moratorium is accomplished, it will be limited to the remaining life of the collateral or remaining limits as contained in ï¿½1A4279.126 of subpart B of part 4279 of this chapter, whichever is less. 

I80ï¿½1A4287.146_4287.155
I89[Reserved] 

I80ï¿½1A4287.156
I89Protective advances. 
I11Protective advances are advances made by the lender for the purpose of preserving and protecting the collateral where the debtor has failed to, will not, or cannot meet its obligations. Sound judgment must be exercised in determining that the protective advance preserves collateral and recovery is actually enhanced by making the advance. Protective advances will not be made in lieu of additional loans. 
I11(a) The maximum loss to be paid by the Agency will never exceed the original principal plus accrued interest regardless of any protective advances made. 
I11(b) Protective advances and interest thereon at the note rate will be guaranteed at the same percentage of loss as provided in the Loan Note Guarantee. 
I11(c) Protective advances must constitute an indebtedness of the borrower to the lender and be secured by the security instruments. Agency written authorization is required when cumulative protective advances exceed $5,000. 

I80ï¿½1A4287.157
I89Liquidation. 
I11In the event of one or more incidents of default or third party actions that the borrower cannot or will not cure or eliminate within a reasonable period of time, liquidation may be considered. If the lender concludes that liquidation is necessary, it must request the Agency's concurrence. The lender will liquidate the loan unless the Agency, at its option, carries out liquidation. When the decision to liquidate is made, if the loan has not already been repurchased, provisions will be made for repurchase in accordance with ï¿½1A4279.78 of subpart A of part 4279 of this chapter. 
I11(a) T3Decision to liquidate.G1T1 A decision to liquidate shall be made when it is determined that the default cannot be cured through actions contained in ï¿½1A4287.145 of this subpart or it has been determined that it is in the best interest of the Agency and the lender to liquidate. The decision to liquidate or continue with the borrower must be made as soon as possible when any of the following exist: 
I11(1) A loan has been delinquent 90 days and the lender and borrower have not been able to cure the delinquency through one of the actions contained in ï¿½1A4287.145 of this subpart. 
ï¿½553ï¿½I11(2) It has been determined that delaying liquidation will jeopardize full recovery on the loan. 
I11(3) The borrower or lender has been uncooperative in resolving the problem and the Agency or the lender has reason to believe the borrower is not acting in good faith, and it would enhance the position of the guarantee to liquidate immediately. 
I11(b) T3Liquidation by the Agency.G1T1 The Agency may require the lender to assign the security instruments to the Agency if the Agency, at its option, decides to liquidate the loan. When the Agency liquidates, reasonable liquidation expenses will be assessed against the proceeds derived from the sale of the collateral. Form FmHA 1980ï¿½0945, ``Notice of Liquidation Responsibility,'' will be forwarded to the Finance Office when the Agency liquidates the loan. 
I11(c) T3Submission of liquidation plan.G1T1 The lender will, within 30 days after a decision to liquidate, submit to the Agency in writing its proposed detailed method of liquidation. Upon approval by the Agency of the liquidation plan, the lender will commence liquidation. 
I11(d) T3Lender's liquidation plan.G1T1 The liquidation plan must include, but is not limited to, the following: 
I11(1) Such proof as the Agency requires to establish the lender's ownership of the guaranteed loan promissory note and related security instruments and a copy of the payment ledger if available which reflects the current loan balance and accrued interest to date and the method of computing the interest. 
I11(2) A full and complete list of all collateral including any personal and corporate guarantees. 
I11(3) The recommended liquidation methods for making the maximum collection possible on the indebtedness and the justification for such methods, including recommended action: 
I11(i) For acquiring and disposing of all collateral; and 
I11(ii) To collect from guarantors. 
I11(4) Necessary steps for preservation of the collateral. 
I11(5) Copies of the borrower's latest available financial statements. 
I11(6) Copies of the guarantor's latest available financial statements. 
I11(7) An itemized list of estimated liquidation expenses expected to be incurred along with justification for each expense. 
I11(8) A schedule to periodically report to the Agency on the progress of liquidation. 
I11(9) Estimated protective advance amounts with justification. 
I11(10) Proposed protective bid amounts on collateral to be sold at auction and a breakdown to show how the amounts were determined. 
I11(11) If a voluntary conveyance is considered, the proposed amount to be credited to the guaranteed debt. 
I11(12) Legal opinions, if needed. 
I11(13) If the outstanding balance of principal and accrued interest is less than $200,000, the lender will obtain an estimate of fair market and potential liquidation value of the collateral. If the outstanding balance of principal and accrued interest is $200,000 or more, the lender will obtain an independent appraisal report meeting the requirements of ï¿½1A4279.144 of subpartB of part 4279 of this chapter on all collateral securing the loan which will reflect the fair market value and potential liquidation value. In order to formulate a liquidation plan which maximizes recovery, collateral must be evaluated for the release of hazardous substances, petroleum products, or other environmental hazards which may adversely impact the market value of the collateral. The appraisal shall consider this aspect. The independent appraiser's fee, including the cost of the environmental site assessment, will be shared equally by the Agency and the lender. 
I11(e) T3Approval of liquidation plan.G1T1 The Agency will inform the lender in writing whether it concurs in the lender's liquidation plan. Should the Agency and the lender not agree on the liquidation plan, negotiations will take place between the Agency and the lender to resolve the disagreement. When the liquidation plan is approved by the Agency, the lender will proceed expeditiously with liquidation. 
I11(1) A transfer and assumption of the borrower's operation can be accomplished before or after the loan goes ï¿½554ï¿½into liquidation. However, if the collateral has been purchased through foreclosure or the borrower has conveyed title to the lender, no transfer and assumption is permitted. 
I11(2) A protective bid may be made by the lender, with prior Agency written approval, at a foreclosure sale to protect the lender's and the Agency's interest. The protective bid will not exceed the amount of the loan, including expenses of foreclosure, and should be based on the liquidation value considering estimated expenses for holding and reselling the property. These expenses include, but are not limited to, expenses for resale, interest accrual, length of time necessary for resale, maintenance, guard service, weatherization, and prior liens. 
I11(f) T3Acceleration.G1T1 The lender, or the Agency if it liquidates, will proceed to accelerate the indebtedness as expeditiously as possible when acceleration is necessary including giving any notices and taking any other legal actions required. A copy of the acceleration notice or other acceleration document will be sent to the Agency (or lender if the Agency liquidates). The guaranteed loan will be considered in liquidation once the loan has been accelerated and a demand for payment has been made upon the borrower. 
I11(g) T3Filing an estimated loss claim.G1T1 When the lender is conducting the liquidation and owns any or all of the guaranteed portion of the loan, the lender will file an estimated loss claim once a decision has been made to liquidate if the liquidation will exceed 90 days. The estimated loss payment will be based on the liquidation value of the collateral. For the purpose of reporting and loss claim computation, the lender will discontinue interest accrual on the defaulted loan in accordance with Agency procedures, and the loss claim will be promptly processed in accordance with applicable Agency regulations. 
I11(h) T3Accounting and reports.G1T1 When the lender conducts liquidation, it will account for funds during the period of liquidation and will provide the Agency with reports at least quarterly on the progress of liquidation including disposition of collateral, resulting costs, and additional procedures necessary for successful completion of the liquidation. 
I11(i) T3Transmitting payments and proceeds to the Agency.G1T1 When the Agency is the holder of a portion of the guaranteed loan, the lender will transmit to the Agency its T3pro rataG1T1 share of any payments received from the borrower; liquidation; or other proceeds using Form FmHA 1980ï¿½0943, ``Lender's Guaranteed Loan Payment to FmHA.'' 
I11(j) T3Abandonment of collateral.G1T1 There may be instances when the cost of liquidation would exceed the potential recovery value of the collection. The lender, with proper documentation and concurrence of the Agency, may abandon the collateral in lieu of liquidation. A proposed abandonment will be considered a servicing action requiring the appropriate environmental review by the Agency in accordance with subpart G of part 1940 of this title. Examples where abandonment may be considered include, but are not limited to: 
I11(1) The cost of liquidation is increased or the value of the collateral is decreased by environmental issues; 
I11(2) The collateral is functionally or economically obsolete; 
I11(3) There are superior liens held by other parties in excess of the value of the collateral; 
I11(4) The collateral has deteriorated; or 
I11(5) The collateral is specialized and there is little or no demand for it. 
I11(k) T3Disposition of personal or corporate guarantees.G1T1 The lender should take action to maximize recovery from all collateral, including personal and corporate guarantees. The lender will seek a deficiency judgment when there is a reasonable chance of future collection of the judgment. The lender must make a decision whether or not to seek a deficiency judgment when: 
I11(1) A borrower voluntarily liquidates the collateral, but the sale fails to pay the guaranteed indebtedness; 
I11(2) The collateral is voluntarily conveyed to the lender, but the borrower and personal and corporate guarantors are not released from liability; or 
I11(3) A liquidation plan is being developed for forced liquidation. 
I11(l) T3Compromise settlement.G1T1 A compromise settlement may be considered at any time. 
ï¿½555ï¿½I11(1) The lender and the Agency must receive complete financial information on all parties obligated for the loan and must be satisfied that the statements reflect the true and correct financial position of the debtor including all assets. Adequate consideration must be received before a release from liability is issued. Adequate consideration includes money, additional security, or other benefit to the goals and objectives of the Agency. 
I11(2) Before a personal guarantor can be released from liability, the following factors must be considered. 
I11(i) Cash, either lump sum or over a period of time, or other consideration offered by the guarantor; 
I11(ii) Age and health of the guarantor; 
I11(iii) Potential income of the guarantor; 
I11(iv) Inheritance prospects of the guarantor; 
I11(v) Availability of the guarantor's assets. 
I11(vi) Possibility that the guarantor's assets have been concealed or improperly transferred; and 
I11(vii) Effect of other guarantors on the loan. 
I11(3) Once the Agency and the lender agree on a reasonable amount that is fair and adequate, the lender can proceed to effect the settlement compromise. 
I11(4) A compromise will only be accepted if it is in the best interest of the Agency. 

I80ï¿½1A4287.158
I89Determination of loss and payment. 
I11In all liquidation cases, final settlement will be made with the lender after the collateral is liquidated, unless otherwise designated as a future recovery or after settlement and compromise of all parties has been completed. The Agency will have the right to recover losses paid under the guarantee from any party which may be liable. 
I11(a) T3Report of loss form.G1T1 Form FmHA 449ï¿½0930, ``Loan Note Guarantee Report of Loss,'' will be used for calculations of all estimated and final loss determinations. Estimated loss payments may only be approved by the Agency after the Agency has approved a liquidation plan. 
I11(b) T3Estimated loss.G1T1 In accordance with the requirements of ï¿½1A4287.157(g) of this subpart, an estimated loss claim based on liquidation appraisal value will be prepared and submitted by the lender. 
I11(1) The estimated loss payment shall be applied as of the date of such payment. The total amount of the loss payment remitted by the Agency will be applied by the lender on the guaranteed portion of the loan debt. Such application does not release the borrower from liability. 
I11(2) An estimated loss will be applied first to reduce the principal balance on the guaranteed loan and the balance, if any, to accrued interest. Interest accrual on the defaulted loan will be discontinued. 
I11(3) A protective advance claim will be paid only at the time of the final report of loss payment, except in certain transfer and assumption situations as specified in ï¿½1A4287.134 of this subpart. 
I11(c) T3Final loss.G1T1 Within 30 days after liquidation of all collateral, except for certain unsecured personal or corporate guarantees as provided for in this section, is completed, a final report of loss must be prepared and submitted by the lender to the Agency. The Agency will not guarantee interest beyond this 30-day period other than for the period of time it takes the Agency to process the loss claim. Before approval by the Agency of any final loss report, the lender must account for all funds during the period of liquidation, disposition of the collateral, all costs incurred, and any other information necessary for the successful completion of liquidation. Upon receipt of the final accounting and report of loss, the Agency may audit all applicable documentation to determine the final loss. The lender will make its records available and otherwise assist the Agency in making any investigation. The documentation accompanying the report of loss must support the amounts shown on Form FmHA 449ï¿½0930. 
I11(1) A determination must be made regarding the collectibility of unsecured personal and corporate guarantees. If reasonably possible, such guarantees should be promptly collected or otherwise disposed of in accordance with ï¿½1A4287.157(k) of this subpart prior to ï¿½556ï¿½completion of the final loss report. However, in the event that collection from the guarantors appears unlikely or will require a prolonged period of time, the report of loss will be filed when all other collateral has been liquidated, and unsecured personal or corporate guarantees will be treated as a future recovery with the net proceeds to be shared on a pro rata basis by the lender and the Agency. 
I11(2) The lender must document that all of the collateral has been accounted for and properly liquidated and that liquidation proceeds have been properly accounted for and applied correctly to the loan. 
I11(3) The lender will show a breakdown of any protective advance amount as to the payee, purpose of the expenditure, date paid, and evidence that the amount expended was proper and that payment was actually made. 
I11(4) The lender will show a breakdown of liquidation expenses as to the payee, purpose of the expenditure, date paid, and evidence that the amount expended was proper and that payment was actually made. Liquidation expenses are recoverable only from collateral proceeds. Attorney fees may be approved as liquidation expenses provided the fees are reasonable and cover legal issues pertaining to the liquidation that could not be properly handled by the lender and its in-house counsel. 
I11(5) Accrued interest will be supported by documentation as to how the amount was accrued. If the interest rate was a variable rate, the lender will include documentation of changes in both the selected base rate and the loan rate. 
I11(6) Loss payments will be paid by the Agency within 60 days after the review of the final loss report and accounting of the collateral. 
I11(d) T3Loss limit.G1T1 The amount payable by the Agency to the lender cannot exceed the limits set forth in the Loan Note Guarantee. 
I11(e) T3Rent.G1T1 Any net rental or other income that has been received by the lender from the collateral will be applied on the guaranteed loan debt. 
I11(f) T3Liquidation costs.G1T1 Liquidation costs will be deducted from the proceeds of the disposition of primary collateral. If changed circumstances after submission of the liquidation plan require a substantial revision of liquidation costs, the lender will procure the Agency's written concurrence prior to proceeding with the proposed changes. No in-house expenses of the lender will be allowed. In-house expenses include, but are not limited to, employee's salaries, staff lawyers, travel, and overhead. 
I11(g) T3Payment.G1T1 When the Agency finds the final report of loss to be proper in all respects, it will approve Form FmHA 449ï¿½0930 and proceed as follows: 
I11(1) If the loss is greater than any estimated loss payment, the Agency will pay the additional amount owed by the Agency to the lender. 
I11(2) If the loss is less than the estimated loss payment, the lender will reimburse the Agency for the overpayment plus interest at the note rate from the date of payment. 
I11(3) If the Agency has conducted the liquidation, it will pay the lender in accordance with the Loan Note Guarantee. 

I80ï¿½1A4287.159_4287.168
I89[Reserved] 

I80ï¿½1A4287.169
I89Future recovery. 
I11After a loan has been liquidated and a final loss has been paid by the Agency, any future funds which may be recovered by the lender will be pro rated between the Agency and the lender based on the original percentage of guarantee. 

I80ï¿½1A4287.170
I89Bankruptcy. 
I11The lender is responsible for protecting the guaranteed loan and all collateral securing the loan in bankruptcy proceedings. 
I11(a) T3Lender's responsibilities.G1T1 It is the lender's responsibility to protect the guaranteed loan debt and all of the collateral securing it in bankruptcy proceedings. These responsibilities include but are not limited to the following: 
I11(1) The lender will file a proof of claim where necessary and all the necessary papers and pleadings concerning the case. 
I11(2) The lender will attend and, where necessary, participate in meetings of the creditors and all court proceedings. 
I11(3) When permitted by the Bankruptcy Code, the lender will request ï¿½557ï¿½modification of any plan of reorganization whenever it appears that additional recoveries are likely. 
I11(4) The Agency will be kept adequately and regularly informed in writing of all aspects of the proceedings. 
I11(5) In a Chapter 11 reorganization, if an independent appraisal of collateral is necessary in the Agency's opinion, the Agency and the lender will share such appraisal fee equally. 
I11(b) T3Reports of loss during bankruptcy.G1T1 When the loan is involved in reorganization proceedings, payment of loss claims may be made as provided in this section. For a liquidation proceeding, only paragraphs (b)(3) and (5) of this section are applicable. 
I11(1) T3Estimated loss payments.G1T1 (i) If a borrower has filed for protection under Chapter 11 of the United States Code for a reorganization (but not Chapter 13) and all or a portion of the debt has been discharged, the lender will request an estimated loss payment of the guaranteed portion of the accrued interest and principal discharged by the court. Only one estimated loss payment is allowed during the reorganization. All subsequent claims of the lender during reorganization will be considered revisions to the initial estimated loss. A revised estimated loss payment may be processed by the Agency, at its option, in accordance with any court-approved changes in the reorganization plan. Once the reorganization plan has been completed, the lender is responsible for submitting the documentation necessary for the Agency to review and adjust the estimated loss claim to reflect any actual discharge of principal and interest and to reimburse the lender for any court-ordered interest-rate reduction under the terms of the reorganization plan. 
I11(ii) The lender will use Form FmHA 449ï¿½0930 to request an estimated loss payment and to revise any estimated loss payments during the course of the reorganization plan. The estimated loss claim, as well as any revisions to this claim, will be accompanied by documentation to support the claim. 
I11(iii) Upon completion of a reorganization plan, the lender will complete a Form FmHA 1980ï¿½0944 and forward this form to the Finance Office. 
I11(2) T3Interest loss payments.G1T1 (i) Interest losses sustained during the period of the reorganization plan will be processed in accordance with paragraph (b)(1) of this section. 
I11(ii) Interest losses sustained after the reorganization plan is completed will be processed annually when the lender sustains a loss as a result of a permanent interest rate reduction which extends beyond the period of the reorganization plan. 
I11(iii) If an estimated loss claim is paid during the operation of the Chapter 11 reorganization plan and the borrower repays in full the remaining balance without an additional loss sustained by the lender, a final report of loss is not necessary. 
I11(3) T3Final loss payments.G1T1 Final loss payments will be processed when the loan is liquidated. 
I11(4) T3Payment applicationG1T1. The lender must apply estimated loss payments first to the unsecured principal of the guaranteed portion of the debt and then to the unsecured interest of the guaranteed portion of the debt. In the event a bankruptcy court attempts to direct the payments to be applied in a different manner, the lender will immediately notify the Agency servicing office. 
I11(5) T3Overpayments.G1T1 Upon completion of the reorganization plan, the lender will provide the Agency with the documentation necessary to determine whether the estimated loss paid equals the actual loss sustained. If the actual loss sustained as a result of the reorganization is less than the estimated loss, the lender will reimburse the Agency for the overpayment plus interest at the note rate from the date of payment of the estimated loss. If the actual loss is greater than the estimated loss payment, the lender will submit a revised estimated loss in order to obtain payment of the additional amount owed by the Agency to the lender. 
I11(6) T3Protective advances.G1T1 If approved protective advances were made prior to the borrower having filed bankruptcy, these protective advances and accrued interest will be considered in the loss calculations. 
I11(c) T3Legal expenses during bankruptcy proceedings.G1T1 (1) When a bankruptcy proceeding results in a liquidation of the ï¿½558ï¿½borrower by a trustee, legal expenses will be handled as directed by the court. 
I11(2) Chapter 11 pertains to a reorganization of a business contemplating an ongoing business rather than a termination and dissolution of the business where legal protection is afforded to the business as defined under Chapter 11 of the Bankruptcy Code. Consequently, expenses incurred by the lender in a Chapter 11 reorganization can never be liquidation expenses unless the proceeding becomes a Chapter 11 liquidation. If the proceeding should become a Liquidating 11, reasonable and customary liquidation expenses may be deducted from proceeds of collateral as provided in the Lender's Agreement. Chapter 7 pertains to a liquidation of the borrower's assets. If, and when, liquidation of the borrower's assets under Chapter 7 is conducted by the bankruptcy trustee, then the lender cannot claim expenses. 

I80ï¿½1A4287.171_4287.179
I89[Reserved] 

I80ï¿½1A4287.180 
I89Termination of guarantee. 
I11A guarantee under this part will terminate automatically: 
I11(a) Upon full payment of the guaranteed loan;
I11(b) Upon full payment of any loss obligation; or
I11(c) Upon written notice from the lender to the Agency that the guarantee will terminate 30 days after the date of notice, provided that the lender holds all of the guaranteed portion and the Loan Note Guarantee is returned to the Agency to be canceled. 

I80ï¿½1A4287.181_4287.199
I89[Reserved] 

I80ï¿½1A4287.200 
I89OMB control number. 
I11The information collection requirements contained in this regulation have been approved by OMB and have been assigned OMB control number 0575ï¿½090168. Public reporting burden for this collection of information is estimated to vary from 15 minutes to 8 hours per response, with an average of 4 hours per response, including time for reviewing the collection of information. Send comments regarding this burden, estimate or any other aspect of this collection of information, including suggestions for reducing this burden to the Department of Agriculture, Clearance Officer, OIRM, Stop 7630, Washington, DC 20250. You are not required to respond to this collection of information unless it displays a currently valid OMB control number.


F8008
ï¿½559ï¿½I04FINDING AIDS
I03Q12I11A list of CFR titles, subtitles, chapters, subchapters and parts and an alphabetical list of agencies publishing in the CFR are included in the CFR Index and Finding Aids volume to the Code of Federal Regulations which is published separately and revised annually. 
Q06I11Table of CFR Titles and Chapters
I11Alphabetical List of Agencies Appearing in the CFR
I11List of CFR Sections Affected 
F8092
I24Chap.
ï¿½561ï¿½I52Table of CFR Titles and Chapters
I80(Revised as of January 1, 2000)
I53Title 1_General Provisions
I60II61Administrative Committee of the Federal Register (Parts 1ï¿½0949)
I60III61Office of the Federal Register (Parts 50ï¿½09299)
I60IVI61Miscellaneous Agencies (Parts 400ï¿½09500)
S8008I52Title 2 [Reserved]
Q04S8092I53Title 3_The President
I60II61Executive Office of the President (Parts 100ï¿½09199)
I53Title 4_Accounts
I60II61General Accounting Office (Parts 1ï¿½0999)
I60III61Federal Claims Collection Standards (General Accounting Office_Department of Justice) (Parts 100ï¿½09299)
I53Title 5_Administrative Personnel
I60II61Office of Personnel Management (Parts 1ï¿½091199)
I60III61Merit Systems Protection Board (Parts 1200ï¿½091299)
I60IIII61Office of Management and Budget (Parts 1300ï¿½091399)
I60VI61The International Organizations Employees Loyalty Board (Parts 1500ï¿½091599)
I60VII61Federal Retirement Thrift Investment Board (Parts 1600ï¿½091699)
I60VIII61Advisory Commission on Intergovernmental Relations (Parts 1700ï¿½091799)
I60VIIII61Office of Special Counsel (Parts 1800ï¿½091899)
I60IXI61Appalachian Regional Commission (Parts 1900ï¿½091999)
I60XII61Armed Forces Retirement Home (Part 2100)
I60XIVI61Federal Labor Relations Authority, General Counsel of the Federal Labor Relations Authority and Federal Service Impasses Panel (Parts 2400ï¿½092499)
I60XVI61Office of Administration, Executive Office of the President (Parts 2500ï¿½092599)
I60XVII61Office of Government Ethics (Parts 2600ï¿½092699)
I60XXII61Department of the Treasury (Parts 3100ï¿½093199)
I60XXIII61Federal Deposit Insurance Corporation (Part 3201)
ï¿½562ï¿½I60XXIIII61Department of Energy (Part 3301)
I60XXIVI61Federal Energy Regulatory Commission (Part 3401)
I60XXVI61Department of the Interior (Part 3501)
I60XXVII61Department of Defense (Part 3601)
I60XXVIIII61Department of Justice (Part 3801)
I60XXIXI61Federal Communications Commission (Parts 3900ï¿½093999)
I60XXXI61Farm Credit System Insurance Corporation (Parts 4000ï¿½094099)
I60XXXII61Farm Credit Administration (Parts 4100ï¿½094199)
I60XXXIIII61Overseas Private Investment Corporation (Part 4301)
I60XXXVI61Office of Personnel Management (Part 4501)
I60XLI61Interstate Commerce Commission (Part 5001)
I60XLII61Commodity Futures Trading Commission (Part 5101)
I60XLIII61Department of Labor (Part 5201)
I60XLIIII61National Science Foundation (Part 5301)
I60XLVI61Department of Health and Human Services (Part 5501)
I60XLVII61Postal Rate Commission (Part 5601)
I60XLVIII61Federal Trade Commission (Part 5701)
I60XLVIIII61Nuclear Regulatory Commission (Part 5801)
I60LI61Department of Transportation (Part 6001)
I60LIII61Export-Import Bank of the United States (Part 6201)
I60LIIII61Department of Education (Parts 6300ï¿½096399)
I60LIVI61Environmental Protection Agency (Part 6401)
I60LVIII61General Services Administration (Part 6701)
I60LVIIII61Board of Governors of the Federal Reserve System (Part 6801)
I60LIXI61National Aeronautics and Space Administration (Part 6901)
I60LXI61United States Postal Service (Part 7001)
I60LXII61National Labor Relations Board (Part 7101)
I60LXIII61Equal Employment Opportunity Commission (Part 7201)
I60LXIIII61Inter-American Foundation (Part 7301)
I60LXVI61Department of Housing and Urban Development (Part 7501)
I60LXVII61National Archives and Records Administration (Part 7601)
I60LXIXI61Tennessee Valley Authority (Part 7901)
I60LXXII61Consumer Product Safety Commission (Part 8101)
I60LXXIVI61Federal Mine Safety and Health Review Commission (Part 8401)
I60LXXVII61Federal Retirement Thrift Investment Board (Part 8601)
I60LXXVIII61Office of Management and Budget (Part 8701)
I53Title 6 [Reserved]
I60I61
I53Title 7_Agriculture
I62Subtitle A_Office of the Secretary of Agriculture (Parts 0ï¿½0926)
ï¿½563ï¿½I62Subtitle B_Regulations of the Department of Agriculture
I60II61Agricultural Marketing Service (Standards, Inspections, Marketing Practices), Department of Agriculture (Parts 27ï¿½09209)
I60III61Food and Nutrition Service, Department of Agriculture (Parts 210ï¿½09299)
I60IIII61Animal and Plant Health Inspection Service, Department of Agriculture (Parts 300ï¿½09399)
I60IVI61Federal Crop Insurance Corporation, Department of Agriculture (Parts 400ï¿½09499)
I60VI61Agricultural Research Service, Department of Agriculture (Parts 500ï¿½09599)
I60VII61Natural Resources Conservation Service, Department of Agriculture (Parts 600ï¿½09699)
I60VIII61Farm Service Agency, Department of Agriculture (Parts 700ï¿½09799)
I60VIIII61Grain Inspection, Packers and Stockyards Administration (Federal Grain Inspection Service), Department of Agriculture (Parts 800ï¿½09899)
I60IXI61Agricultural Marketing Service (Marketing Agreements and Orders; Fruits, Vegetables, Nuts), Department of Agriculture (Parts 900ï¿½09999)
I60XI61Agricultural Marketing Service (Marketing Agreements and Orders; Milk), Department of Agriculture (Parts 1000ï¿½091199)
I60XII61Agricultural Marketing Service (Marketing Agreements and Orders; Miscellaneous Commodities), Department of Agriculture (Parts 1200ï¿½091299)
I60XIIII61Northeast Dairy Compact Commission (Parts 1300ï¿½091399)
I60XIVI61Commodity Credit Corporation, Department of Agriculture (Parts 1400ï¿½091499)
I60XVI61Foreign Agricultural Service, Department of Agriculture (Parts 1500ï¿½091599)
I60XVII61Rural Telephone Bank, Department of Agriculture (Parts 1600ï¿½091699)
I60XVIII61Rural Utilities Service, Department of Agriculture (Parts 1700ï¿½091799)
I60XVIIII61Rural Housing Service, Rural Business-Cooperative Service, Rural Utilities Service, and Farm Service Agency, Department of Agriculture (Parts 1800ï¿½092099)
I60XXVII61Office of Inspector General, Department of Agriculture (Parts 2600ï¿½092699)
I60XXVIII61Office of Information Resources Management, Department of Agriculture (Parts 2700ï¿½092799)
I60XXVIIII61Office of Operations, Department of Agriculture (Parts 2800ï¿½092899)
I60XXIXI61Office of Energy, Department of Agriculture (Parts 2900ï¿½092999)
I60XXXI61Office of the Chief Financial Officer, Department of Agriculture (Parts 3000ï¿½093099)
I60XXXII61Office of Environmental Quality, Department of Agriculture (Parts 3100ï¿½093199)
I60XXXIII61Office of Procurement and Property Management, Department of Agriculture (Parts 3200ï¿½093299)
ï¿½564ï¿½I60XXXIIII61Office of Transportation, Department of Agriculture (Parts 3300ï¿½093399)
I60XXXIVI61Cooperative State Research, Education, and Extension Service, Department of Agriculture (Parts 3400ï¿½093499)
I60XXXVI61Rural Housing Service, Department of Agriculture (Parts 3500ï¿½093599)
I60XXXVII61National Agricultural Statistics Service, Department of Agriculture (Parts 3600ï¿½093699)
I60XXXVIII61Economic Research Service, Department of Agriculture (Parts 3700ï¿½093799)
I60XXXVIIII61World Agricultural Outlook Board, Department of Agriculture (Parts 3800ï¿½093899)
I60XLII61[Reserved]
I60XLIII61Rural Business-Cooperative Service and Rural Utilities Service, Department of Agriculture (Parts 4200ï¿½094299)
I53Title 8_Aliens and Nationality
I60II61Immigration and Naturalization Service, Department of Justice (Parts 1ï¿½09599)
I53Title 9_Animals and Animal Products
I60II61Animal and Plant Health Inspection Service, Department of Agriculture (Parts 1ï¿½09199)
I60III61Grain Inspection, Packers and Stockyards Administration (Packers and Stockyards Programs), Department of Agriculture (Parts 200ï¿½09299)
I60IIII61Food Safety and Inspection Service, Department of Agriculture (Parts 300ï¿½09599)
I53Title 10_Energy
I60II61Nuclear Regulatory Commission (Parts 0ï¿½09199)
I60III61Department of Energy (Parts 200ï¿½09699)
I60IIII61Department of Energy (Parts 700ï¿½09999)
I60XI61Department of Energy (General Provisions) (Parts 1000ï¿½091099)
I60XVIII61Defense Nuclear Facilities Safety Board (Parts 1700ï¿½091799)
I53Title 11_Federal Elections
I60II61Federal Election Commission (Parts 1ï¿½099099)
I53Title 12_Banks and Banking
I60II61Comptroller of the Currency, Department of the Treasury (Parts 1ï¿½09199)
I60III61Federal Reserve System (Parts 200ï¿½09299)
I60IIII61Federal Deposit Insurance Corporation (Parts 300ï¿½09399)
ï¿½565ï¿½I60IVI61Export-Import Bank of the United States (Parts 400ï¿½09499)
I60VI61Office of Thrift Supervision, Department of the Treasury (Parts 500ï¿½09599)
I60VII61Farm Credit Administration (Parts 600ï¿½09699)
I60VIII61National Credit Union Administration (Parts 700ï¿½09799)
I60VIIII61Federal Financing Bank (Parts 800ï¿½09899)
I60IXI61Federal Housing Finance Board (Parts 900ï¿½09999)
I60XII61Federal Financial Institutions Examination Council (Parts 1100ï¿½091199)
I60XIVI61Farm Credit System Insurance Corporation (Parts 1400ï¿½091499)
I60XVI61Department of the Treasury (Parts 1500ï¿½091599)
I60XVIII61Office of Federal Housing Enterprise Oversight, Department of Housing and Urban Development (Parts 1700ï¿½091799)
I60XVIIII61Community Development Financial Institutions Fund, Department of the Treasury (Parts 1800ï¿½091899)
I53Title 13_Business Credit and Assistance
I60II61Small Business Administration (Parts 1ï¿½09199)
I60IIII61Economic Development Administration, Department of Commerce (Parts 300ï¿½09399)
I60IVI61Emergency Steel Guarantee Loan Board (Parts 400ï¿½09499)
I60VI61Emergency Oil and Gas Guaranteed Loan Board (Parts 500ï¿½09599)
I53Title 14_Aeronautics and Space
I60II61Federal Aviation Administration, Department of Transportation (Parts 1ï¿½09199)
I60III61Office of the Secretary, Department of Transportation (Aviation Proceedings) (Parts 200ï¿½09399)
I60IIII61Commercial Space Transportation, Federal Aviation Administration, Department of Transportation (Parts 400ï¿½09499)
I60VI61National Aeronautics and Space Administration (Parts 1200ï¿½091299)
I53Title 15_Commerce and Foreign Trade
I62Subtitle A_Office of the Secretary of Commerce (Parts 0ï¿½0929)
I62Subtitle B_Regulations Relating to Commerce and Foreign Trade
I60II61Bureau of the Census, Department of Commerce (Parts 30ï¿½09199)
I60III61National Institute of Standards and Technology, Department of Commerce (Parts 200ï¿½09299)
I60IIII61International Trade Administration, Department of Commerce (Parts 300ï¿½09399)
I60IVI61Foreign-Trade Zones Board, Department of Commerce (Parts 400ï¿½09499)
ï¿½566ï¿½I60VIII61Bureau of Export Administration, Department of Commerce (Parts 700ï¿½09799)
I60VIIII61Bureau of Economic Analysis, Department of Commerce (Parts 800ï¿½09899)
I60IXI61National Oceanic and Atmospheric Administration, Department of Commerce (Parts 900ï¿½09999)
I60XII61Technology Administration, Department of Commerce (Parts 1100ï¿½091199)
I60XIIII61East-West Foreign Trade Board (Parts 1300ï¿½091399)
I60XIVI61Minority Business Development Agency (Parts 1400ï¿½091499)
I62Subtitle C_Regulations Relating to Foreign Trade Agreements
I60XXI61Office of the United States Trade Representative (Parts 2000ï¿½092099)
I62Subtitle D_Regulations Relating to Telecommunications and Information
I60XXIIII61National Telecommunications and Information Administration, Department of Commerce (Parts 2300ï¿½092399)
I53Title 16_Commercial Practices
I60II61Federal Trade Commission (Parts 0ï¿½09999)
I60III61Consumer Product Safety Commission (Parts 1000ï¿½091799)
I53Title 17_Commodity and Securities Exchanges
I60II61Commodity Futures Trading Commission (Parts 1ï¿½09199)
I60III61Securities and Exchange Commission (Parts 200ï¿½09399)
I60IVI61Department of the Treasury (Parts 400ï¿½09499)
I53Title 18_Conservation of Power and Water Resources
I60II61Federal Energy Regulatory Commission, Department of Energy (Parts 1ï¿½09399)
I60IIII61Delaware River Basin Commission (Parts 400ï¿½09499)
I60VII61Water Resources Council (Parts 700ï¿½09799)
I60VIIII61Susquehanna River Basin Commission (Parts 800ï¿½09899)
I60XIIII61Tennessee Valley Authority (Parts 1300ï¿½091399)
I53Title 19_Customs Duties
I60II61United States Customs Service, Department of the Treasury (Parts 1ï¿½09199)
I60III61United States International Trade Commission (Parts 200ï¿½09299)
I60IIII61International Trade Administration, Department of Commerce (Parts 300ï¿½09399)
ï¿½567ï¿½I53Title 20_Employees' Benefits
I60II61Office of Workers' Compensation Programs, Department of Labor (Parts 1ï¿½09199)
I60III61Railroad Retirement Board (Parts 200ï¿½09399)
I60IIII61Social Security Administration (Parts 400ï¿½09499)
I60IVI61Employees' Compensation Appeals Board, Department of Labor (Parts 500ï¿½09599)
I60VI61Employment and Training Administration, Department of Labor (Parts 600ï¿½09699)
I60VII61Employment Standards Administration, Department of Labor (Parts 700ï¿½09799)
I60VIII61Benefits Review Board, Department of Labor (Parts 800ï¿½09899)
I60VIIII61Joint Board for the Enrollment of Actuaries (Parts 900ï¿½09999)
I60IXI61Office of the Assistant Secretary for Veterans' Employment and Training, Department of Labor (Parts 1000ï¿½091099)
I53Title 21_Food and Drugs
I60II61Food and Drug Administration, Department of Health and Human Services (Parts 1ï¿½091299)
I60III61Drug Enforcement Administration, Department of Justice (Parts 1300ï¿½091399)
I60IIII61Office of National Drug Control Policy (Parts 1400ï¿½091499)
I53Title 22_Foreign Relations
I60II61Department of State (Parts 1ï¿½09199)
I60III61Agency for International Development (Parts 200ï¿½09299)
I60IIII61Peace Corps (Parts 300ï¿½09399)
I60IVI61International Joint Commission, United States and Canada (Parts 400ï¿½09499)
I60VI61Broadcasting Board of Governors (Parts 500ï¿½09599)
I60VIII61Overseas Private Investment Corporation (Parts 700ï¿½09799)
I60IXI61Foreign Service Grievance Board Regulations (Parts 900ï¿½09999)
I60XI61Inter-American Foundation (Parts 1000ï¿½091099)
I60XII61International Boundary and Water Commission, United States and Mexico, United States Section (Parts 1100ï¿½091199)
I60XIII61United States International Development Cooperation Agency (Parts 1200ï¿½091299)
I60XIIII61Board for International Broadcasting (Parts 1300ï¿½091399)
I60XIVI61Foreign Service Labor Relations Board; Federal Labor Relations Authority; General Counsel of the Federal Labor Relations Authority; and the Foreign Service Impasse Disputes Panel (Parts 1400ï¿½091499)
I60XVI61African Development Foundation (Parts 1500ï¿½091599)
I60XVII61Japan-United States Friendship Commission (Parts 1600ï¿½091699)
I60XVIII61United States Institute of Peace (Parts 1700ï¿½091799)
ï¿½568ï¿½I53Title 23_Highways
I60II61Federal Highway Administration, Department of Transportation (Parts 1ï¿½09999)
I60III61National Highway Traffic Safety Administration and Federal Highway Administration, Department of Transportation (Parts 1200ï¿½091299)
I60IIII61National Highway Traffic Safety Administration, Department of Transportation (Parts 1300ï¿½091399)
I53Title 24_Housing and Urban Development
I62Subtitle A_Office of the Secretary, Department of Housing and Urban Development (Parts 0ï¿½0999)
I62Subtitle B_Regulations Relating to Housing and Urban Development
I60II61Office of Assistant Secretary for Equal Opportunity, Department of Housing and Urban Development (Parts 100ï¿½09199)
I60III61Office of Assistant Secretary for Housing-Federal Housing Commissioner, Department of Housing and Urban Development (Parts 200ï¿½09299)
I60IIII61Government National Mortgage Association, Department of Housing and Urban Development (Parts 300ï¿½09399)
I60IVI61Office of Multifamily Housing Assistance Restructuring, Department of Housing and Urban Development (Parts 400ï¿½09499)
I60VI61Office of Assistant Secretary for Community Planning and Development, Department of Housing and Urban Development (Parts 500ï¿½09599)
I60VII61Office of Assistant Secretary for Community Planning and Development, Department of Housing and Urban Development (Parts 600ï¿½09699) [Reserved]
I60VIII61Office of the Secretary, Department of Housing and Urban Development (Housing Assistance Programs and Public and Indian Housing Programs) (Parts 700ï¿½09799)
I60VIIII61Office of the Assistant Secretary for Housing_Federal Housing Commissioner, Department of Housing and Urban Development (Section 8 Housing Assistance Programs, Section 202 Direct Loan Program, Section 202 Supportive Housing for the Elderly Program and Section 811 Supportive Housing for Persons With Disabilities Program) (Parts 800ï¿½09899)
I60IXI61Office of Assistant Secretary for Public and Indian Housing, Department of Housing and Urban Development (Parts 900ï¿½09999)
I60XI61Office of Assistant Secretary for Housing_Federal Housing Commissioner, Department of Housing and Urban Development (Interstate Land Sales Registration Program) (Parts 1700ï¿½091799)
I60XIII61Office of Inspector General, Department of Housing and Urban Development (Parts 2000ï¿½092099)
I60XXI61Office of Assistant Secretary for Housing_Federal Housing Commissioner, Department of Housing and Urban Development (Parts 3200ï¿½093899)
I60XXVI61Neighborhood Reinvestment Corporation (Parts 4100ï¿½094199)
ï¿½569ï¿½I53Title 25_Indians
I60II61Bureau of Indian Affairs, Department of the Interior (Parts 1ï¿½09299)
I60III61Indian Arts and Crafts Board, Department of the Interior (Parts 300ï¿½09399)
I60IIII61National Indian Gaming Commission, Department of the Interior (Parts 500ï¿½09599)
I60IVI61Office of Navajo and Hopi Indian Relocation (Parts 700ï¿½09799)
I60VI61Bureau of Indian Affairs, Department of the Interior, and Indian Health Service, Department of Health and Human Services (Part 900)
I60VII61Office of the Assistant Secretary-Indian Affairs, Department of the Interior (Part 1001)
I60VIII61Office of the Special Trustee for American Indians, Department of the Interior (Part 1200)
I53Title 26_Internal Revenue
I60II61Internal Revenue Service, Department of the Treasury (Parts 1ï¿½09799)
I53Title 27_Alcohol, Tobacco Products and Firearms
I60II61Bureau of Alcohol, Tobacco and Firearms, Department of the Treasury (Parts 1ï¿½09299)
I53Title 28_Judicial Administration
I60II61Department of Justice (Parts 0ï¿½09199)
I60IIII61Federal Prison Industries, Inc., Department of Justice (Parts 300ï¿½09399)
I60VI61Bureau of Prisons, Department of Justice (Parts 500ï¿½09599)
I60VII61Offices of Independent Counsel, Department of Justice (Parts 600ï¿½09699)
I60VIII61Office of Independent Counsel (Parts 700ï¿½09799)
I53Title 29_Labor
I62Subtitle A_Office of the Secretary of Labor (Parts 0ï¿½0999)
I62Subtitle B_Regulations Relating to Labor
I60II61National Labor Relations Board (Parts 100ï¿½09199)
I60III61Office  of Labor-Management Standards, Department of Labor (Parts 200ï¿½09299)
I60IIII61National Railroad Adjustment Board (Parts 300ï¿½09399)
I60IVI61Office of Labor-Management Standards, Department of Labor (Parts 400ï¿½09499)
I60VI61Wage and Hour Division, Department of Labor (Parts 500ï¿½09899)
I60IXI61Construction Industry Collective Bargaining Commission (Parts 900ï¿½09999)
I60XI61National Mediation Board (Parts 1200ï¿½091299)
ï¿½570ï¿½I60XIII61Federal Mediation and Conciliation Service (Parts 1400ï¿½091499)
I60XIVI61Equal Employment Opportunity Commission (Parts 1600ï¿½091699)
I60XVIII61Occupational Safety and Health Administration, Department of Labor (Parts 1900ï¿½091999)
I60XXI61Occupational Safety and Health Review Commission (Parts 2200ï¿½092499)
I60XXVI61Pension and Welfare Benefits Administration, Department of Labor (Parts 2500ï¿½092599)
I60XXVIII61Federal Mine Safety and Health Review Commission (Parts 2700ï¿½092799)
I60XLI61Pension Benefit Guaranty Corporation (Parts 4000ï¿½094999)
I53Title 30_Mineral Resources
I60II61Mine Safety and Health Administration, Department of Labor (Parts 1ï¿½09199)
I60III61Minerals Management Service, Department of the Interior (Parts 200ï¿½09299)
I60IIII61Board of Surface Mining and Reclamation Appeals, Department of the Interior (Parts 300ï¿½09399)
I60IVI61Geological Survey, Department of the Interior (Parts 400ï¿½09499)
I60VII61Bureau of Mines, Department of the Interior (Parts 600ï¿½09699)
I60VIII61Office of Surface Mining Reclamation and Enforcement, Department of the Interior (Parts 700ï¿½09999)
I53Title 31_Money and Finance: Treasury
I62Subtitle A_Office of the Secretary of the Treasury (Parts 0ï¿½0950)
I62Subtitle B_Regulations Relating to Money and Finance
I60II61Monetary Offices, Department of the Treasury (Parts 51ï¿½09199)
I60III61Fiscal Service, Department of the Treasury (Parts 200ï¿½09399)
I60IVI61Secret Service, Department of the Treasury (Parts 400ï¿½09499)
I60VI61Office of Foreign Assets Control, Department of the Treasury (Parts 500ï¿½09599)
I60VII61Bureau of Engraving and Printing, Department of the Treasury (Parts 600ï¿½09699)
I60VIII61Federal Law Enforcement Training Center, Department of the Treasury (Parts 700ï¿½09799)
I60VIIII61Office of International Investment, Department of the Treasury (Parts 800ï¿½09899)
I53Title 32_National Defense
I62Subtitle A_Department of Defense
I60II61Office of the Secretary of Defense (Parts 1ï¿½09399)
I60VI61Department of the Army (Parts 400ï¿½09699)
I60VII61Department of the Navy (Parts 700ï¿½09799)
ï¿½571ï¿½I60VIII61Department of the Air Force (Parts 800ï¿½091099)
I62Subtitle B_Other Regulations Relating to National Defense
I60XIII61Defense Logistics Agency (Parts 1200ï¿½091299)
I60XVII61Selective Service System (Parts 1600ï¿½091699)
I60XVIIII61National Counterintelligence Center (Parts 1800ï¿½091899)
I60XIXI61Central Intelligence Agency (Parts 1900ï¿½091999)
I60XXI61Information Security Oversight Office, National Archives and Records Administration (Parts 2000ï¿½092099)
I60XXII61National Security Council (Parts 2100ï¿½092199)
I60XXIVI61Office of Science and Technology Policy (Parts 2400ï¿½092499)
I60XXVIII61Office for Micronesian Status Negotiations (Parts 2700ï¿½092799)
I60XXVIIII61Office of the Vice President of the United States (Parts 2800ï¿½092899)
I60XXIXI61Presidential Commission on the Assignment of Women in the Armed Forces (Part 2900)
I53Title 33_Navigation and Navigable Waters
I60II61Coast Guard, Department of Transportation (Parts 1ï¿½09199)
I60III61Corps of Engineers, Department of the Army (Parts 200ï¿½09399)
I60IVI61Saint Lawrence Seaway Development Corporation, Department of Transportation (Parts 400ï¿½09499)
I53Title 34_Education
I62Subtitle A_Office of the Secretary, Department of Education (Parts 1ï¿½0999)
I62Subtitle B_Regulations of the Offices of the Department of Education
I60II61Office for Civil Rights, Department of Education (Parts 100ï¿½09199)
I60III61Office of Elementary and Secondary Education, Department of Education (Parts 200ï¿½09299)
I60IIII61Office of Special Education and Rehabilitative Services, Department of Education (Parts 300ï¿½09399)
I60IVI61Office of Vocational and Adult Education, Department of Education (Parts 400ï¿½09499)
I60VI61Office of Bilingual Education and Minority Languages Affairs, Department of Education (Parts 500ï¿½09599)
I60VII61Office of Postsecondary Education, Department of Education (Parts 600ï¿½09699)
I60VIII61Office of Educational Research and Improvement, Department of Education (Parts 700ï¿½09799)
I60XII61National Institute for Literacy (Parts 1100ï¿½091199)
I62Subtitle C_Regulations Relating to Education
I60XIII61National Council on Disability (Parts 1200ï¿½091299)
ï¿½572ï¿½I53Title 35_Panama Canal
I60II61Panama Canal Regulations (Parts 1ï¿½09299)
I53Title 36_Parks, Forests, and Public Property
I60II61National Park Service, Department of the Interior (Parts 1ï¿½09199)
I60III61Forest Service, Department of Agriculture (Parts 200ï¿½09299)
I60IIII61Corps of Engineers, Department of the Army (Parts 300ï¿½09399)
I60IVI61American Battle Monuments Commission (Parts 400ï¿½09499)
I60VI61Smithsonian Institution (Parts 500ï¿½09599)
I60VIII61Library of Congress (Parts 700ï¿½09799)
I60VIIII61Advisory Council on Historic Preservation (Parts 800ï¿½09899)
I60IXI61Pennsylvania Avenue Development Corporation (Parts 900ï¿½09999)
I60XI61Presidio Trust (Parts 1000ï¿½091099)
I60XII61Architectural and Transportation Barriers Compliance Board (Parts 1100ï¿½091199)
I60XIII61National Archives and Records Administration (Parts 1200ï¿½091299)
I60XIVI61Assassination Records Review Board (Parts 1400ï¿½091499)
I53Title 37_Patents, Trademarks, and Copyrights
I60II61Patent and Trademark Office, Department of Commerce (Parts 1ï¿½09199)
I60III61Copyright Office, Library of Congress (Parts 200ï¿½09299)
I60IVI61Assistant Secretary for Technology Policy, Department of Commerce (Parts 400ï¿½09499)
I60VI61Under Secretary for Technology, Department of Commerce (Parts 500ï¿½09599)
I53Title 38_Pensions, Bonuses, and Veterans' Relief
I60II61Department of Veterans Affairs (Parts 0ï¿½0999)
I53Title 39_Postal Service
I60II61United States Postal Service (Parts 1ï¿½09999)
I60IIII61Postal Rate Commission (Parts 3000ï¿½093099)
I53Title 40_Protection of Environment
I60II61Environmental Protection Agency (Parts 1ï¿½09799)
I60VI61Council on Environmental Quality (Parts 1500ï¿½091599)
I60VIII61Environmental Protection Agency and Department of Defense; Uniform National Discharge Standards for Vessels of the Armed Forces (Parts 1700ï¿½091799)
I53Title 41_Public Contracts and Property Management
I62Subtitle B_Other Provisions Relating to Public Contracts
ï¿½573ï¿½I6050I61Public Contracts, Department of Labor (Parts 50ï¿½091_50ï¿½09999)
I6051I61Committee for Purchase From People Who Are Blind or  Severely Disabled (Parts 51ï¿½091_51ï¿½0999)
I6060I61Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor (Parts 60ï¿½091_60ï¿½09999)
I6061I61Office of the Assistant Secretary for Veterans Employment and Training, Department of Labor (Parts 61ï¿½091_61ï¿½09999)
I62Subtitle C_Federal Property Management Regulations System
I60101I61Federal Property Management Regulations (Parts 101ï¿½091_101ï¿½0999)
I60102I61Federal Management Regulation (Parts 102ï¿½091_102ï¿½09299)
I60105I61General Services Administration (Parts 105ï¿½091_105ï¿½09999)
I60109I61Department of Energy Property Management Regulations (Parts 109ï¿½091_109ï¿½0999)
I60114I61Department of the Interior (Parts 114ï¿½091_114ï¿½0999)
I60115I61Environmental Protection Agency (Parts 115ï¿½091_115ï¿½0999)
I60128I61Department of Justice (Parts 128ï¿½091_128ï¿½0999)
I62Subtitle D_Other Provisions Relating to Property Management [Reserved]
I62Subtitle E_Federal Information Resources Management Regulations System
I60201I61Federal Information Resources Management Regulation (Parts 201ï¿½091_201ï¿½0999) [Reserved]
I62Subtitle F_Federal Travel Regulation System
I60300I61General (Parts 300ï¿½091_300.99)
I60301I61Temporary Duty (TDY) Travel Allowances (Parts 301ï¿½091_301ï¿½0999)
I60302I61Relocation Allowances (Parts 302ï¿½091_302ï¿½0999)
I60303I61Payment of Expenses Connected with the Death of Certain Employees (Part 303ï¿½0970)
I60304I61Payment from a Non-Federal Source for Travel Expenses (Parts 304ï¿½091_304ï¿½0999)
I53Title 42_Public Health
I60II61Public Health Service, Department of Health and Human Services (Parts 1ï¿½09199)
I60IVI61Health Care Financing Administration, Department of Health and Human Services (Parts 400ï¿½09499)
I60VI61Office of Inspector General-Health Care, Department of Health and Human Services (Parts 1000ï¿½091999)
I53Title 43_Public Lands: Interior
I62Subtitle A_Office of the Secretary of the Interior (Parts 1ï¿½09199)
I62Subtitle B_Regulations Relating to Public Lands
I60II61Bureau of Reclamation, Department of the Interior (Parts 200ï¿½09499)
ï¿½574ï¿½I60III61Bureau of Land Management, Department of the Interior (Parts 1000ï¿½099999)
I60IIII61Utah Reclamation Mitigation and Conservation Commission (Parts 10000ï¿½0910005)
I53Title 44_Emergency Management and Assistance
I60II61Federal Emergency Management Agency (Parts 0ï¿½09399)
I60IVI61Department of Commerce and Department of Transportation (Parts 400ï¿½09499)
I53Title 45_Public Welfare
I62Subtitle A_Department of Health and Human Services (Parts 1ï¿½09199)
I62Subtitle B_Regulations Relating to Public Welfare
I60III61Office of Family Assistance (Assistance Programs), Administration for Children and Families, Department of Health and Human Services (Parts 200ï¿½09299)
I60IIII61Office of Child Support Enforcement (Child Support Enforcement Program), Administration for Children and Families, Department of Health and Human Services (Parts 300ï¿½09399)
I60IVI61Office of Refugee Resettlement, Administration for Children and Families Department of Health and Human Services (Parts 400ï¿½09499)
I60VI61Foreign Claims Settlement Commission of the United States, Department of Justice (Parts 500ï¿½09599)
I60VII61National Science Foundation (Parts 600ï¿½09699)
I60VIII61Commission on Civil Rights (Parts 700ï¿½09799)
I60VIIII61Office of Personnel Management (Parts 800ï¿½09899)
I60XI61Office of Community Services, Administration for Children and Families, Department of Health and Human Services (Parts 1000ï¿½091099)
I60XII61National Foundation on the Arts and the Humanities (Parts 1100ï¿½091199)
I60XIII61Corporation for National and Community Service (Parts 1200ï¿½091299)
I60XIIII61Office of Human Development Services, Department of Health and Human Services (Parts 1300ï¿½091399)
I60XVII61Legal Services Corporation (Parts 1600ï¿½091699)
I60XVIII61National Commission on Libraries and Information Science (Parts 1700ï¿½091799)
I60XVIIII61Harry S. Truman Scholarship Foundation (Parts 1800ï¿½091899)
I60XXII61Commission on Fine Arts (Parts 2100ï¿½092199)
I60XXIIII61Arctic Research Commission (Part 2301)
I60XXIVI61James Madison Memorial Fellowship Foundation (Parts 2400ï¿½092499)
I60XXVI61Corporation for National and Community Service (Parts 2500ï¿½092599)
ï¿½575ï¿½I53Title 46_Shipping
I60II61Coast Guard, Department of Transportation (Parts 1ï¿½09199)
I60III61Maritime Administration, Department of Transportation (Parts 200ï¿½09399)
I60IIII61Coast Guard (Great Lakes Pilotage), Department of Transportation (Parts 400ï¿½09499)
I60IVI61Federal Maritime Commission (Parts 500ï¿½09599)
I53Title 47_Telecommunication
I60II61Federal Communications Commission (Parts 0ï¿½09199)
I60III61Office of Science and Technology Policy and National Security Council (Parts 200ï¿½09299)
I60IIII61National Telecommunications and Information Administration, Department of Commerce (Parts 300ï¿½09399)
I53Title 48_Federal Acquisition Regulations System
I601I61Federal Acquisition Regulation (Parts 1ï¿½0999)
I602I61Department of Defense (Parts 200ï¿½09299)
I603I61Department of Health and Human Services (Parts 300ï¿½09399)
I604I61Department of Agriculture (Parts 400ï¿½09499)
I605I61General Services Administration (Parts 500ï¿½09599)
I606I61Department of State (Parts 600ï¿½09699)
I607I61United States Agency for International Development (Parts 700ï¿½09799)
I608I61Department of Veterans Affairs (Parts 800ï¿½09899)
I609I61Department of Energy (Parts 900ï¿½09999)
I6010I61Department of the Treasury (Parts 1000ï¿½091099)
I6012I61Department of Transportation (Parts 1200ï¿½091299)
I6013I61Department of Commerce (Parts 1300ï¿½091399)
I6014I61Department of the Interior (Parts 1400ï¿½091499)
I6015I61Environmental Protection Agency (Parts 1500ï¿½091599)
I6016I61Office of Personnel Management Federal Employees Health Benefits Acquisition Regulation (Parts 1600ï¿½091699)
I6017I61Office of Personnel Management (Parts 1700ï¿½091799)
I6018I61National Aeronautics and Space Administration (Parts 1800ï¿½091899)
I6019I61Broadcasting Board of Governors (Parts 1900ï¿½091999)
I6020I61Nuclear Regulatory Commission (Parts 2000ï¿½092099)
I6021I61Office of Personnel Management, Federal Employees Group Life Insurance Federal Acquisition Regulation (Parts 2100ï¿½092199)
I6023I61Social Security Administration (Parts 2300ï¿½092399)
I6024I61Department of Housing and Urban Development (Parts 2400ï¿½092499)
I6025I61National Science Foundation (Parts 2500ï¿½092599)
I6028I61Department of Justice (Parts 2800ï¿½092899)
I6029I61Department of Labor (Parts 2900ï¿½092999)
I6034I61Department of Education Acquisition Regulation (Parts 3400ï¿½093499)
ï¿½576ï¿½I6035I61Panama Canal Commission (Parts 3500ï¿½093599)
I6044I61Federal Emergency Management Agency (Parts 4400ï¿½094499)
I6051I61Department of the Army Acquisition Regulations (Parts 5100ï¿½095199)
I6052I61Department of the Navy Acquisition Regulations (Parts 5200ï¿½095299)
I6053I61Department of the Air Force Federal Acquisition Regulation Supplement (Parts 5300ï¿½095399)
I6054I61Defense Logistics Agency, Department of Defense (Part 5452)
I6057I61African Development Foundation (Parts 5700ï¿½095799)
I6061I61General Services Administration Board of Contract Appeals (Parts 6100ï¿½096199)
I6063I61Department of Transportation Board of Contract Appeals (Parts 6300ï¿½096399)
I6099I61Cost Accounting Standards Board, Office of Federal Procurement Policy, Office of Management and Budget (Parts 9900ï¿½099999)
I53Title 49_Transportation
I62Subtitle A_Office of the Secretary of Transportation (Parts 1ï¿½0999)
I62Subtitle B_Other Regulations Relating to Transportation
I60II61Research and Special Programs Administration, Department of Transportation (Parts 100ï¿½09199)
I60III61Federal Railroad Administration, Department of Transportation (Parts 200ï¿½09299)
I60IIII61Federal Motor Carrier Safety Administration, Department of Transportation (Parts 300ï¿½09399)
I60IVI61Coast Guard, Department of Transportation (Parts 400ï¿½09499)
I60VI61National Highway Traffic Safety Administration, Department of Transportation (Parts 500ï¿½09599)
I60VII61Federal Transit Administration, Department of Transportation (Parts 600ï¿½09699)
I60VIII61National Railroad Passenger Corporation (AMTRAK) (Parts 700ï¿½09799)
I60VIIII61National Transportation Safety Board (Parts 800ï¿½09999)
I60XI61Surface Transportation Board, Department of Transportation (Parts 1000ï¿½091399)
I60XII61Bureau of Transportation Statistics, Department of Transportation (Parts 1400ï¿½091499)
I53Title 50_Wildlife and Fisheries
I60II61United States Fish and Wildlife Service, Department of the Interior (Parts 1ï¿½09199)
I60III61National Marine Fisheries Service, National Oceanic and Atmospheric Administration, Department of Commerce (Parts 200ï¿½09299)
ï¿½577ï¿½I60IIII61International Fishing and Related Activities (Parts 300ï¿½09399)
I60IVI61Joint Regulations (United States Fish and Wildlife Service, Department of the Interior and National Marine Fisheries Service, National Oceanic and Atmospheric Administration, Department of Commerce); Endangered Species Committee Regulations (Parts 400ï¿½09499)
I60VI61Marine Mammal Commission (Parts 500ï¿½09599)
I60VII61Fishery Conservation and Management, National Oceanic and Atmospheric Administration, Department of Commerce (Parts 600ï¿½09699)
I53CFR Index and Finding Aids
I61Subject/Agency Index
I61List of Agency Prepared Indexes
I61Parallel Tables of Statutory Authorities and Rules
I61List of CFR Titles, Chapters, Subchapters, and Parts
I61Alphabetical List of Agencies Appearing in the CFR


F8092
ï¿½579ï¿½I52Alphabetical List of Agencies Appearing in the CFR
I80(Revised as of January 1, 2000)

I81PAgency
I82CFR Title, Subtitle or Chapter
Q02I70Administrative Committee of the Federal Register
I721, I
I70Advanced Research Projects Agency
I7232, I
I70Advisory Commission on Intergovernmental Relations
I725, VII
I70Advisory Council on Historic Preservation
I7236, VIII
I70African Development Foundation
I7222, XV
I71Federal Acquisition Regulation
I7248, 57
I70Agency for International Development, United States
I7222, II
I71Federal Acquisition Regulation
I7248, 7
I70Agricultural Marketing Service
I727, I, IX, X, XI
I70Agricultural Research Service
I727, V
I70Agriculture Department
I71Agricultural Marketing Service
I727, I, IX, X, XI
I71Agricultural Research Service
I727, V
I71Animal and Plant Health Inspection Service
I727, III; 9, I
I71Chief Financial Officer, Office of
I727, XXX
I71Commodity Credit Corporation
I727, XIV
I71Cooperative State Research, Education, and Extension Service
I727, XXXIV
I71Economic Research Service
I727, XXXVII
I71Energy, Office of
I727, XXIX
I71Environmental Quality, Office of
I727, XXXI
I71Farm Service Agency
I727, VII, XVIII
I71Federal Acquisition Regulation
I7248, 4
I71Federal Crop Insurance Corporation
I727, IV
I71Food and Nutrition Service
I727, II
I71Food Safety and Inspection Service
I729, III
I71Foreign Agricultural Service
I727, XV
I71Forest Service
I7236, II
I71Grain Inspection, Packers and Stockyards Administration
I727, VIII; 9, II
I71Information Resources Management, Office of
I727, XXVII
I71Inspector General, Office of
I727, XXVI
I71National Agricultural Library
I727, XLI
I71National Agricultural Statistics Service
I727, XXXVI
I71Natural Resources Conservation Service
I727, VI
I71Operations, Office of
I727, XXVIII
I71Procurement and Property Management, Office of
I727, XXXII
I71Rural Business-Cooperative Service
I727, XVIII, XLII
I71Rural Development Administration
I727, XLII
I71Rural Housing Service
I727, XVIII, XXXV
I71Rural Telephone Bank
I727, XVI
I71Rural Utilities Service
I727, XVII, XVIII, XLII
I71Secretary of Agriculture, Office of
I727, Subtitle A
I71Transportation, Office of
I727, XXXIII
I71World Agricultural Outlook Board
I727, XXXVIII
I70Air Force Department
I7232, VII
I71Federal Acquisition Regulation Supplement
I7248, 53
I70Alcohol, Tobacco and Firearms, Bureau of
I7227, I
I70AMTRAK
I7249, VII
I70American Battle Monuments Commission
I7236, IV
I70American Indians, Office of the Special Trustee
I7225, VII
I70Animal and Plant Health Inspection Service
I727, III; 9, I
I70Appalachian Regional Commission
I725, IX
I70Architectural and Transportation Barriers Compliance Board
I7236, XI
ï¿½580ï¿½I70Arctic Research Commission
I7245, XXIII
I70Armed Forces Retirement Home
I725, XI
I70Army Department
I7232, V
I71Engineers, Corps of
I7233, II; 36, III
I71Federal Acquisition Regulation
I7248, 51
I70Assassination Records Review Board
I7236, XIV
I70Benefits Review Board
I7220, VII
I70Bilingual Education and Minority Languages Affairs, Office of
I7234, V
I70Blind or Severely Disabled, Committee for Purchase From People Who Are
I7241, 51
I70Board for International Broadcasting
I7222, XIII
I70Broadcasting Board of Governors
I7222, V
I71Federal Acquisition Regulation
I7248, 19
I70Census Bureau
I7215, I
I70Central Intelligence Agency
I7232, XIX
I70Chief Financial Officer, Office of
I727, XXX
I70Child Support Enforcement, Office of
I7245, III
I70Children and Families, Administration for
I7245, II, III, IV, X
I70Civil Rights, Commission on
I7245, VII
I70Civil Rights, Office for 
I7234, I
I70Coast Guard
I7233, I; 46, I; 49, IV
I70Coast Guard (Great Lakes Pilotage)
I7246, III
I70Commerce Department
I7244, IV
I71Census Bureau
I7215, I
I71Economic Affairs, Under Secretary
I7237, V
I71Economic Analysis, Bureau of
I7215, VIII
I71Economic Development Administration
I7213, III
I71Emergency Management and Assistance
I7244, IV
I71Export Administration, Bureau of
I7215, VII
I71Federal Acquisition Regulation
I7248, 13
I71Fishery Conservation and Management
I7250, VI
I71Foreign-Trade Zones Board
I7215, IV
I71International Trade Administration
I7215, III; 19, III
I71National Institute of Standards and Technology
I7215, II
I71National Marine Fisheries Service
I7250, II, IV, VI 
I71National Oceanic and Atmospheric Administration
I7215, IX; 50, II, III, IV, VI
I71National Telecommunications and Information Administration
I7215, XXIII; 47, III
I71National Weather Service
I7215, IX
I71Patent and Trademark Office
I7237, I
I71Productivity, Technology and Innovation, Assistant Secretary for
I7237, IV
I71Secretary of Commerce, Office of
I7215, Subtitle A
I71Technology, Under Secretary for
I7237, V
I71Technology Administration
I7215, XI
I71Technology Policy, Assistant Secretary for
I7237, IV
I70Commercial Space Transportation
I7214, III
I70Commodity Credit Corporation
I727, XIV
I70Commodity Futures Trading Commission
I725, XLI; 17, I
I70Community Planning and Development, Office of Assistant Secretary for
I7224, V, VI
I70Community Services, Office of
I7245, X
I70Comptroller of the Currency
I7212, I
I70Construction Industry Collective Bargaining Commission
I7229, IX
I70Consumer Product Safety Commission
I725, LXXI; 16, II
I70Cooperative State Research, Education, and Extension Service
I727, XXXIV
I70Copyright Office
I7237, II
I70Corporation for National and Community Service
I7245, XII, XXV
I70Cost Accounting Standards Board
I7248, 99
I70Council on Environmental Quality
I7240, V
I70Customs Service, United States
I7219, I
I70Defense Contract Audit Agency
I7232, I
I70Defense Department
I725, XXVI; 32, Subtitle A; 40, VII
I71Advanced Research Projects Agency
I7232, I
I71Air Force Department
I7232, VII
ï¿½581ï¿½I71Army Department
I7232, V; 33, II; 36, III, 48, 51
I71Defense Intelligence Agency
I7232, I
I71Defense Logistics Agency
I7232, I, XII; 48, 54
I71Engineers, Corps of
I7233, II; 36, III
I71Federal Acquisition Regulation
I7248, 2
I71National Imagery and Mapping Agency
I7232, I
I71Navy Department
I7232, VI; 48, 52
I71Secretary of Defense, Office of
I7232, I
I70Defense Contract Audit Agency
I7232, I
I70Defense Intelligence Agency
I7232, I
I70Defense Logistics Agency
I7232, XII; 48, 54
I70Defense Nuclear Facilities Safety Board
I7210, XVII
I70Delaware River Basin Commission
I7218, III
I70Drug Enforcement Administration
I7221, II
I70East-West Foreign Trade Board
I7215, XIII
I70Economic Affairs, Under Secretary
I7237, V
I70Economic Analysis, Bureau of
I7215, VIII
I70Economic Development Administration
I7213, III
I70Economic Research Service
I727, XXXVII
I70Education, Department of
I725, LIII
I71Bilingual Education and Minority Languages Affairs, Office of
I7234, V
I71Civil Rights, Office for
I7234, I
I71Educational Research and Improvement, Office of
I7234, VII
I71Elementary and Secondary Education, Office of
I7234, II
I71Federal Acquisition Regulation
I7248, 34
I71Postsecondary Education, Office of
I7234, VI
I71Secretary of Education, Office of
I7234, Subtitle A
I71Special Education and Rehabilitative Services, Office of
I7234, III
I71Vocational and Adult Education, Office of
I7234, IV
I70Educational Research and Improvement, Office of
I7234, VII
I70Elementary and Secondary Education, Office of
I7234, II
I70Emergency Oil and Gas Guaranteed Loan Board
I7213, V
I70Emergency Steel Guarantee Loan Board
I7213, IV
I70Employees' Compensation Appeals Board
I7220, IV
I70Employees Loyalty Board
I725, V
I70Employment and Training Administration
I7220, V
I70Employment Standards Administration
I7220, VI
I70Endangered Species Committee
I7250, IV
I70Energy, Department of
I725, XXIII; 10, II, III, X
I71Federal Acquisition Regulation
I7248, 9
I71Federal Energy Regulatory Commission
I725, XXIV; 18, I
I71Property Management Regulations
I7241, 109
I70Energy, Office of
I727, XXIX
I70Engineers, Corps of
I7233, II; 36, III
I70Engraving and Printing, Bureau of
I7231, VI
I70Environmental Protection Agency
I725, LIV; 40, I, VII
I71Federal Acquisition Regulation
I7248, 15
I71Property Management Regulations
I7241, 115
I70Environmental Quality, Office of
I727, XXXI
I70Equal Employment Opportunity Commission
I725, LXII; 29, XIV
I70Equal Opportunity, Office of Assistant Secretary for
I7224, I
I70Executive Office of the President
I723, I
I71Administration, Office of
I725, XV
I71Environmental Quality, Council on
I7240, V
I71Management and Budget, Office of
I7225, III, LXXVII; 48, 99
I71National Drug Control Policy, Office of
I7221, III
I71National Security Council
I7232, XXI; 47, 2
I71Presidential Documents
I723
I71Science and Technology Policy, Office of
I7232, XXIV; 47, II
I71Trade Representative, Office of the United States
I7215, XX
I70Export Administration, Bureau of
I7215, VII
I70Export-Import Bank of the United States
I725, LII; 12, IV
I70Family Assistance, Office of
I7245, II
I70Farm Credit Administration
I725, XXXI; 12, VI
I70Farm Credit System Insurance Corporation
I725, XXX; 12, XIV
ï¿½582ï¿½I70Farm Service Agency
I727, VII, XVIII
I70Federal Acquisition Regulation
I7248, 1
I70Federal Aviation Administration
I7214, I
I71Commercial Space Transportation
I7214, III
I70Federal Claims Collection Standards
I724, II
I70Federal Communications Commission
I725, XXIX; 47, I
I70Federal Contract Compliance Programs, Office of
I7241, 60
I70Federal Crop Insurance Corporation
I727, IV
I70Federal Deposit Insurance Corporation
I725, XXII; 12, III
I70Federal Election Commission
I7211, I
I70Federal Emergency Management Agency
I7244, I
I71Federal Acquisition Regulation
I7248, 44
I70Federal Employees Group Life Insurance Federal Acquisition Regulation
I7248, 21
I70Federal Employees Health Benefits Acquisition Regulation
I7248, 16
I70Federal Energy Regulatory Commission
I725, XXIV; 18, I
I70Federal Financial Institutions Examination Council
I7212, XI
I70Federal Financing Bank
I7212, VIII
I70Federal Highway Administration
I7223, I, II
I70Federal Home Loan Mortgage Corporation
I721, IV
I70Federal Housing Enterprise Oversight Office
I7212, XVII
I70Federal Housing Finance Board
I7212, IX
I70Federal Labor Relations Authority, and General Counsel of the Federal Labor Relations Authority
I725, XIV; 22, XIV
I70Federal Law Enforcement Training Center
I7231, VII
I70Federal Management Regulation
I7241, 102
I70Federal Maritime Commission
I7246, IV
I70Federal Mediation and Conciliation Service
I7229, XII
I70Federal Mine Safety and Health Review Commission
I725, LXXIV; 29, XXVII
I70Federal Motor Carrier Safety Administration
I7249, III
I70Federal Prison Industries, Inc.
I7228, III
I70Federal Procurement Policy Office
I7248, 99
I70Federal Property Management Regulations
I7241, 101
I70Federal Property Management Regulations System
I7241, Subtitle C
I70Federal Railroad Administration
I7249, II
I70Federal Register, Administrative Committee of
I721, I
I70Federal Register, Office of
I721, II
I70Federal Reserve System
I7212, II
I71Board of Governors
I725, LVIII
I70Federal Retirement Thrift Investment Board
I725, VI, LXXVI
I70Federal Service Impasses Panel
I725, XIV
I70Federal Trade Commission
I725, XLVII; 16, I
I70Federal Transit Administration
I7249, VI
I70Federal Travel Regulation System
I7241, Subtitle F
I70Fine Arts, Commission on
I7245, XXI
I70Fiscal Service
I7231, II
I70Fish and Wildlife Service, United States
I7250, I, IV
I70Fishery Conservation and Management
I7250, VI
I70Food and Drug Administration
I7221, I
I70Food and Nutrition Service
I727, II
I70Food Safety and Inspection Service
I729, III
I70Foreign Agricultural Service
I727, XV
I70Foreign Assets Control, Office of
I7231, V
I70Foreign Claims Settlement Commission of the United States
I7245, V
I70Foreign Service Grievance Board
I7222, IX
I70Foreign Service Impasse Disputes Panel
I7222, XIV
I70Foreign Service Labor Relations Board
I7222, XIV
I70Foreign-Trade Zones Board
I7215, IV
I70Forest Service
I7236, II
I70General Accounting Office
I724, I, II
I70General Services Administration
I725, LVII
I71Contract Appeals, Board of
I7248, 61
I71Federal Acquisition Regulation
I7248, 5
I71Federal Property Management Regulations System
I7241, 101, 102, 105
I71Federal Travel Regulation System
I7241, Subtitle F
I71General
I7241, 300
I71Payment From a Non-Federal Source for Travel Expenses
I7241, 304
ï¿½583ï¿½I71Payment of Expenses Connected With the Death of Certain Employees
I7241, 303
I71Relocation Allowances
I7241, 302
I71Temporary Duty (TDY) Travel Allowances
I7241, 301
I70Geological Survey
I7230, IV
I70Government Ethics, Office of
I725, XVI
I70Government National Mortgage Association
I7224, III
I70Grain Inspection, Packers and Stockyards Administration
I727, VIII; 9, II
I70Harry S. Truman Scholarship Foundation
I7245, XVIII
I70Health and Human Services, Department of
I725, XLV; 45, Subtitle A
I71Child Support Enforcement, Office of
I7245, III
I71Children and Families, Administration for
I7245, II, III, IV, X
I71Community Services, Office of
I7245, X
I71Family Assistance, Office of
I7245, II
I71Federal Acquisition Regulation
I7248, 3
I71Food and Drug Administration
I7221, I
I71Health Care Financing Administration
I7242, IV
I71Human Development Services, Office of
I7245, XIII
I71Indian Health Service
I7225, V
I71Inspector General (Health Care), Office of
I7242, V
I71Public Health Service
I7242, I
I71Refugee Resettlement, Office of
I7245, IV
I70Health Care Financing Administration
I7242, IV
I70Housing and Urban Development, Department of
I725, LXV; 24, Subtitle B
I71Community Planning and Development, Office of Assistant Secretary for
I7224, V, VI
I71Equal Opportunity, Office of Assistant Secretary for
I7224, I
I71Federal Acquisition Regulation
I7248, 24
I71Federal Housing Enterprise Oversight, Office of
I7212, XVII
I71Government National Mortgage Association
I7224, III
I71Housing_Federal Housing Commissioner, Office of Assistant Secretary for
I7224, II, VIII, X, XX
I71Inspector General, Office of
I7224, XII
I71Multifamily Housing Assistance Restructuring, Office of
I7224, IV
I71Public and Indian Housing, Office of Assistant Secretary for
I7224, IX
I71Secretary, Office of
I7224, Subtitle A, VII
I70Housing_Federal Housing Commissioner, Office of Assistant Secretary for
I7224, II, VIII, X, XX
I70Human Development Services, Office of
I7245, XIII
I70Immigration and Naturalization Service
I728, I
I70Independent Counsel, Office of
I7228, VII
I70Indian Affairs, Bureau of
I7225, I, V
I70Indian Affairs, Office of the Assistant Secretary
I7225, VI
I70Indian Arts and Crafts Board
I7225, II
I70Indian Health Service
I7225, V
I70Information Resources Management, Office of
I727, XXVII
I70Information Security Oversight Office, National Archives and Records Administration
I7232, XX
I70Inspector General
I71Agriculture Department
I727, XXVI
I71Health and Human Services Department
I7242, V
I71Housing and Urban Development Department
I7224, XII
I70Institute of Peace, United States
I7222, XVII
I70Inter-American Foundation
I725, LXIII; 22, X
I70Intergovernmental Relations, Advisory Commission on
I725, VII
I70Interior Department
I71American Indians, Office of the Special Trustee
I7225, VII
I71Endangered Species Committee
I7250, IV
I71Federal Acquisition Regulation
I7248, 14
I71Federal Property Management Regulations System
I7241, 114
I71Fish and Wildlife Service, United States
I7250, I, IV
I71Geological Survey
I7230, IV
I71Indian Affairs, Bureau of
I7225, I, V
I71Indian Affairs, Office of the Assistant Secretary
I7225, VI
I71Indian Arts and Crafts Board
I7225, II
I71Land Management, Bureau of
I7243, II
I71Minerals Management Service
I7230, II
ï¿½584ï¿½I71Mines, Bureau of
I7230, VI
I71National Indian Gaming Commission
I7225, III
I71National Park Service
I7236, I
I71Reclamation, Bureau of
I7243, I
I71Secretary of the Interior, Office of
I7243, Subtitle A
I71Surface Mining and Reclamation Appeals, Board of
I7230, III
I71Surface Mining Reclamation and Enforcement, Office of
I7230, VII
I70Internal Revenue Service
I7226, I
I70International Boundary and Water Commission, United States and Mexico, United States Section
I7222, XI
I70International Development, United States Agency for
I7222, II
I71Federal Acquisition Regulation
I7248, 7
I70International Development Cooperation Agency, United States
I7222, XII
I70International Fishing and Related Activities
I7250, III
I70International Investment, Office of
I7231, VIII
I70International Joint Commission, United States and Canada
I7222, IV
I70International Organizations Employees Loyalty Board
I725, V
I70International Trade Administration
I7215, III; 19, III
I70International Trade Commission, United States
I7219, II
I70Interstate Commerce Commission
I725, XL
I70James Madison Memorial Fellowship Foundation
I7245, XXIV
I70Japanï¿½09United States Friendship Commission
I7222, XVI
I70Joint Board for the Enrollment of Actuaries
I7220, VIII
I70Justice Department
I725, XXVIII; 28, I
I71Drug Enforcement Administration
I7221, II
I71Federal Acquisition Regulation
I7248, 28
I71Federal Claims Collection Standards
I724, II
I71Federal Prison Industries, Inc.
I7228, III
I71Foreign Claims Settlement Commission of the United States
I7245, V
I71Immigration and Naturalization Service
I728, I
I71Offices of Independent Counsel
I7228, VI
I71Prisons, Bureau of
I7228, V
I71Property Management Regulations
I7241, 128
I70Labor Department
I725, XLII
I71Benefits Review Board
I7220, VII
I71Employees' Compensation Appeals Board
I7220, IV
I71Employment and Training Administration
I7220, V
I71Employment Standards Administration
I7220, VI
I71Federal Acquisition Regulation
I7248, 29
I71Federal Contract Compliance Programs, Office of
I7241, 60
I71Federal Procurement Regulations System
I7241, 50
I71Labor-Management Standards, Office of
I7229, II, IV
I71Mine Safety and Health Administration
I7230, I
I71Occupational Safety and Health Administration
I7229, XVII
I71Pension and Welfare Benefits Administration
I7229, XXV
I71Public Contracts
I7241, 50
I71Secretary of Labor, Office of
I7229, Subtitle A
I71Veterans' Employment and Training, Office of the Assistant Secretary for
I7241, 61; 20, IX
I71Wage and Hour Division
I7229, V
I71Workers' Compensation Programs, Office of
I7220, I
I70Labor-Management Standards, Office of
I7229, II, IV
I70Land Management, Bureau of
I7243, II
I70Legal Services Corporation
I7245, XVI
I70Library of Congress
I7236, VII
I71Copyright Office
I7237, II
I70Management and Budget, Office of
I725, III, LXXVII; 48, 99
I70Marine Mammal Commission
I7250, V
I70Maritime Administration
I7246, II
I70Merit Systems Protection Board
I725, II
I70Micronesian Status Negotiations, Office for
I7232, XXVII
I70Mine Safety and Health Administration
I7230, I
I70Minerals Management Service
I7230, II
I70Mines, Bureau of
I7230, VI
I70Minority Business Development Agency
I7215, XIV
ï¿½585ï¿½I70Miscellaneous Agencies
I721, IV
I70Monetary Offices
I7231, I
I70Multifamily Housing Assistance Restructuring,  Office of
I7224, IV
I70National Aeronautics and Space Administration
I725, LIX; 14, V
I71Federal Acquisition Regulation
I7248, 18
I70National Agricultural Library
I727, XLI
I70National Agricultural Statistics Service
I727, XXXVI
I70National and Community Service, Corporation for
I7245, XII, XXV 
I70National Archives and Records Administration
I725, LXVI; 36, XII
I71Information Security Oversight Office
I7232, XX
I70National Bureau of Standards
I7215, II
I70National Capital Planning Commission
I721, IV
I70National Commission for Employment Policy
I721, IV
I70National Commission on Libraries and Information Science
I7245, XVII
I70National Council on Disability
I7234, XII
I70National Counterintelligence Center
I7232, XVIII
I70National Credit Union Administration
I7212, VII
I70National Drug Control Policy, Office of
I7221, III
I70National Foundation on the Arts and the Humanities
I7245, XI
I70National Highway Traffic Safety Administration
I7223, II, III; 49, V
I70National Imagery and Mapping Agency
I7232, I
I70National Indian Gaming Commission
I7225, III
I70National Institute for Literacy
I7234, XI
I70National Institute of Standards and Technology
I7215, II
I70National Labor Relations Board
I725, LXI; 29, I
I70National Marine Fisheries Service
I7250, II, IV, VI 
I70National Mediation Board
I7229, X
I70National Oceanic and Atmospheric Administration
I7215, IX; 50, II, III, IV, VI
I70National Park Service
I7236, I
I70National Railroad Adjustment Board
I7229, III
I70National Railroad Passenger Corporation (AMTRAK)
I7249, VII
I70National Science Foundation
I725, XLIII; 45, VI
I71Federal Acquisition Regulation
I7248, 25
I70National Security Council
I7232, XXI
I70National Security Council and Office of Science and Technology Policy
I7247, II
I70National Telecommunications and Information Administration
I7215, XXIII; 47, III
I70National Transportation Safety Board
I7249, VIII
I70National Weather Service
I7215, IX
I70Natural Resources Conservation Service
I727, VI
I70Navajo and Hopi Indian Relocation, Office of
I7225, IV
I70Navy Department
I7232, VI
I71Federal Acquisition Regulation
I7248, 52
I70Neighborhood Reinvestment Corporation
I7224, XXV
I70Northeast Dairy Compact Commission
I727, XIII
I70Nuclear Regulatory Commission
I725, XLVIII; 10, I
I71Federal Acquisition Regulation
I7248, 20
I70Occupational Safety and Health Administration
I7229, XVII
I70Occupational Safety and Health Review Commission
I7229, XX
I70Offices of Independent Counsel
I7228, VI
I70Operations Office
I727, XXVIII
I70Overseas Private Investment Corporation
I725, XXXIII; 22, VII
I70Panama Canal Commission
I7248, 35
I70Panama Canal Regulations
I7235, I
I70Patent and Trademark Office
I7237, I
I70Payment From a Non-Federal Source for Travel Expenses
I7241, 304
I70Payment of Expenses Connected With the Death of Certain Employees
I7241, 303
I70Peace Corps
I7222, III
I70Pennsylvania Avenue Development Corporation
I7236, IX
I70Pension and Welfare Benefits Administration
I7229, XXV
I70Pension Benefit Guaranty Corporation
I7229, XL
I70Personnel Management, Office of
I725, I, XXXV; 45, VIII
I71Federal Acquisition Regulation
I7248, 17
I71Federal Employees Group Life Insurance Federal Acquisition Regulation
I7248, 21
ï¿½586ï¿½I71Federal Employees Health Benefits Acquisition Regulation
I7248, 16
I70Postal Rate Commission
I725, XLVI; 39, III
I70Postal Service, United States
I725, LX; 39, I
I70Postsecondary Education, Office of
I7234, VI
I70President's Commission on White House Fellowships
I721, IV
I70Presidential Commission on the Assignment of Women in the Armed Forces
I7232, XXIX
I70Presidential Documents
I723
I70Presidio Trust
I7236, X
I70Prisons, Bureau of
I7228, V
I70Procurement and Property Management, Office of
I727, XXXII
I70Productivity, Technology and Innovation, Assistant Secretary
I7237, IV
I70Public Contracts, Department of Labor
I7241, 50
I70Public and Indian Housing, Office of Assistant Secretary for
I7224, IX
I70Public Health Service
I7242, I
I70Railroad Retirement Board
I7220, II
I70Reclamation, Bureau of
I7243, I
I70Refugee Resettlement, Office of
I7245, IV
I70Regional Action Planning Commissions
I7213, V
I70Relocation Allowances
I7241, 302
I70Research and Special Programs Administration
I7249, I
I70Rural Business-Cooperative Service
I727, XVIII, XLII
I70Rural Development Administration
I727, XLII
I70Rural Housing Service
I727, XVIII, XXXV
I70Rural Telephone Bank
I727, XVI
I70Rural Utilities Service
I727, XVII, XVIII, XLII
I70Saint Lawrence Seaway Development Corporation
I7233, IV
I70Science and Technology Policy, Office of
I7232, XXIV
I70Science and Technology Policy, Office of, and National Security Council
I7247, II
I70Secret Service
I7231, IV
I70Securities and Exchange Commission
I7217, II
I70Selective Service System
I7232, XVI
I70Small Business Administration
I7213, I
I70Smithsonian Institution
I7236, V
I70Social Security Administration
I7220, III; 48, 23
I70Soldiers' and Airmen's Home, United States
I725, XI
I70Special Counsel, Office of
I725, VIII
I70Special Education and Rehabilitative Services, Office of
I7234, III
I70State Department
I7222, I
I71Federal Acquisition Regulation
I7248, 6
I70Surface Mining and Reclamation Appeals, Board of
I7230, III
I70Surface Mining Reclamation and Enforcement, Office of
I7230, VII
I70Surface Transportation Board
I7249, X
I70Susquehanna River Basin Commission
I7218, VIII
I70Technology Administration
I7215, XI
I70Technology Policy, Assistant Secretary for
I7237, IV
I70Technology, Under Secretary for
I7237, V
I70Tennessee Valley Authority
I725, LXIX; 18, XIII
I70Thrift Supervision Office, Department of the Treasury
I7212, V
I70Trade Representative, United States, Office of
I7215, XX
I70Transportation, Department of
I725, L
I71Coast Guard
I7233, I; 46, I; 49, IV
I71Coast Guard (Great Lakes Pilotage)
I7246, III
I71Commercial Space Transportation
I7214, III
I71Contract Appeals, Board of
I7248, 63
I71Emergency Management and Assistance
I7244, IV
I71Federal Acquisition Regulation
I7248, 12
I71Federal Aviation Administration
I7214, I
I71Federal Highway Administration
I7223, I, II
I71Federal Motor Carrier Safety Administration
I7249, III
I71Federal Railroad Administration
I7249, II
I71Federal Transit Administration
I7249, VI
I71Maritime Administration
I7246, II
I71National Highway Traffic Safety Administration
I7223, II, III; 49, V
I71Research and Special Programs Administration
I7249, I
ï¿½587ï¿½I71Saint Lawrence Seaway Development Corporation
I7233, IV
I71Secretary of Transportation, Office of
I7214, II; 49, Subtitle A
I71Surface Transportation Board
I7249, X
I71Transportation Statistics Bureau
I7249, XI
I70Transportation, Office of
I727, XXXIII
I70Transportation Statistics Brureau
I7249, XI
I70Travel Allowances, Temporary Duty (TDY)
I7241, 301
I70Treasury Department
I725, XXI; 12, XV; 17, IV
I71Alcohol, Tobacco and Firearms, Bureau of
I7227, I
I71Community Development Financial Institutions Fund
I7212, XVIII
I71Comptroller of the Currency
I7212, I
I71Customs Service, United States
I7219, I
I71Engraving and Printing, Bureau of
I7231, VI
I71Federal Acquisition Regulation
I7248, 10
I71Federal Law Enforcement Training Center
I7231, VII
I71Fiscal Service
I7231, II
I71Foreign Assets Control, Office of
I7231, V
I71Internal Revenue Service
I7226, I
I71International Investment, Office of
I7231, VIII
I71Monetary Offices
I7231, I
I71Secret Service
I7231, IV
I71Secretary of the Treasury, Office of
I7231, Subtitle A
I71Thrift Supervision, Office of
I7212, V
I70Truman, Harry S. Scholarship Foundation
I7245, XVIII
I70United States and Canada, International Joint Commission
I7222, IV
I70United States and Mexico, International Boundary and Water Commission, United States Section
I7222, XI
I70Utah Reclamation Mitigation and Conservation Commission
I7243, III
I70Veterans Affairs Department
I7238, I
I71Federal Acquisition Regulation
I7248, 8
I70Veterans' Employment and Training, Office of the Assistant Secretary for
I7241, 61; 20, IX
I70Vice President of the United States, Office of
I7232, XXVIII
I70Vocational and Adult Education, Office of
I7234, IV
I70Wage and Hour Division
I7229, V
I70Water Resources Council
I7218, VI
I70Workers' Compensation Programs, Office of
I7220, I
I70World Agricultural Outlook Board
I727, XXXVIII


ï¿½589ï¿½F8060I327 CFR (1ï¿½091ï¿½0900 Edition)
I33List of CFR Sections Affected
I01List of CFR Sections Affected
I41All changes in this volume of the Code of Federal Regulations which were made by documents published in the T4Federal RegisterG1T1 since January 1, 1986, are enumerated in the following list. Entries indicate the nature of the changes effected. Pages numbers refer to T4Federal RegisterG1T1 pages. The user should consult the entries for chapters and parts as well as sections for revisions.
I41For the period before January 1, 1986, see the ``List of CFR Sections Affected, 1949ï¿½091963, 1964ï¿½091972, and 1973ï¿½091985'' published in seven separate volumes.

I501986 
I607 CFR 
I6151 FR 
I62Page 
I63Chapter XVIII 
I122003Authority citation revisedL34947
I122003.1_2003.5 (Subpart A)Exhibit A amendedL34947
I122054Added; interimL18764
I63Chapter XXII 
I122200RevisedL44265


I63Chapter XXX 

I123015.70_3015.77 (Subpart I)RevisedL1486


I123015.150(d) addedL17172
I123015.158AddedL17172

I123015Appendix B published at 50 FR 28763 confirmedL1486

I63Chapter XXXII 
I123201AddedL15288
I63Chapter XXXIII 
I12Chapter XXXIIIChapter establishedL33879
I123300AddedL33879
I63Chapter XXXIV 
I123401AddedL16152 

I501987 
I607 CFR 
I6152 FR 
I62Page 
I63Chapter XVIII 
I122054.1101_2054.1150 (Subpart W)RevisedL30893
I63Chapter XXXIII 
I123305AddedL43189
I63Chapter XXXIV 
I123402AddedL4713
I63Chapter XXXVI 
I12Chapter XXXVIChapter establishedL2667
I123600AddedL2667
I123601AddedL2669
I63Chapter XXXIX 
I12Chapter XXXIXChapter establishedL9798
I123900AddedL9798
I123901AddedL9798 

I501988 
I607 CFR 
I6153 FR 
I62Page 
I63Chapter XVIII 
I122003.1RevisedL20090
I122003.1_2003.5 (Subpart A)Exhibit A revisedL20090
I122054.1101_2054.1150 (Subpart W)RevisedL9604
I63Chapter XXVI 
I122620RevisedL16540
I63Chapter XXIX 
I122902AddedL4007
I122903AddedL4008
I63Chapter XXX 
I123015.1(a) revisedL8043
I123015.2(d) introductory text republished; (d)(5) addedL8044
I123016AddedL8044, 8087
I63Chapter XXXIV 
I123400.2(j) amendedL49641
ï¿½590ï¿½I123400.4(c) (9) through (15) redesignated as (c) (10) through (16); new (c)(9) and (13)(iii) added; new (a)(2), (b), (c)(1) heading and (2) revised; new (c) (11)(ii), (12), (13) (i) and (ii), (15), and (16) amendedL49641
I123400.7(d)(3) revisedL49642
I123400.8AmendedL49642
I123400.10RevisedL49642
I123400.15(a) table revisedL49642
I123403AddedL21966
I123404AddedL17914
I14Correctly designatedL34481
I63Chapter XXXVI 
I123600Authority citation revisedL11639
I123600.2Amended; (1), (2), (3), (4), and (5) redesignated as (a), (b), (c), (d), and (e)L11639
I123600.3(c)(4) (1), (2) and (3) and (d)(1) (1), (2), (3), (4) and (5) redesignated as (c)(4) (i), (ii) and (iii) and (d)(1) (i), (ii), (iii), (iv) and (v); (c)(4)(i), (f)(1)(iv) and (g) introductory text amendedL11639
I123600Appendix A amendedL11640
I123601Authority citation revisedL11640
I123601.1AmendedL11640
I123601.3AmendedL11640
I123601.4AmendedL11640
I123601.6AmendedL11640
I63Chapter XXXVII 
I12Chapter XXXVIIChapter establishedL32369
I123700AddedL32369
I123701AddedL32370
I63Chapter XXXVIII 
I12Chapter XXXVIIIChapter establishedL5358
I123800AddedL5358
I123801AddedL5358
I63Chapter XXXIX 
I123901Authority citation revisedL15547
I123901.1AmendedL15548
I123901.2AmendedL15548
I123901.3AmendedL15548
I123901.4AmendedL15548
I63Chapter XL 
I12Chapter XLChapter establishedL4108
I124000AddedL4108
I124001AddedL4109
I63Chapter XLI 
I12Chapter XLIChapter establishedL17915
I124100AddedL17915

I501989 
I607 CFR 
I6154 FR 
I62Page 
I63Chapter XVIII 
I122003Authority citation revisedL11, 42493
I122003.1_2003.5 (Subpart A)Exhibit A amendedL12, 42493
I63Chapter XXVIII 
I12Chapter XXVIIIChapter establishedL53312
I122810AddedL52013
I122811AddedL52014
I63Chapter XXX 
I12Chapter XXXHeading revisedL51868
I123010RevisedL51868
I123011AddedL51869
I123017AddedL4731
I14Heading and authority citation revisedL4952
I14Technical correctionL6364
I123017.105(c)(1), (g)(2)(i), (3), (t)(2)(i), (3), (w), and (x) addedL4731
I123017.110(a)(3) addedL4731
I123017.305(c) (3) and (4) amended; (c)(5) added; interimL4952
I123017.311(a) through (d) addedL4732
I123017.312(a)(1) and concluding text addedL4732
I123017.314(a)(1) and (d)(3) addedL4732
I123017.320(a) revised; interimL4952
I123017.410(a) (1) through (4) addedL4732
I123017.411Concluding text addedL4732
I123017.412(b)(1)(ii) (A) and (B) addedL4732
I123017.413(a) (1), (2), and (c)(1) addedL4732
I123017.415(c)(1) addedL4733
I123017.505(b)(1), (f), and (g) addedL4733
I123017.515AddedL4733
I123017.600_3017.630 (Subpart F)Added; interimL4952
I123017Appendix C added; interimL4952 

ï¿½591ï¿½I501990 
I607 CFR 
I6155 FR 
I62Page 
I63Chapter XXX 
I123017.600_3017.635 (Subpart F)Regulation at 54 FR 4952 confirmed; revisedL21688, 21691
I123017Appendix CRegulation at 54 FR 4952 confirmed; revisedL21690, 21691
I123018Added; interimL6737, 6746
I63Chapter XXXIV 
I123402.6(a) and (b) amendedL2214
I123402.12AmendedL2214
I123402.14AmendedL2215
I123402.15RevisedL2215
I123402.19Table amendedL2215
I123402.22AmendedL2215
I123402.25Existing text designated as (a); (b) addedL2215

I501991 
I607 CFR 
I6156 FR 
I62Page 
I63Chapter XVIII 
I122003.1_2003.5 (Subpart A)Exhibit A amendedL22629, 22630
I63Chapter XXIV 
I122400 (Chapter XXIV)RemovedL54532
I63Chapter XXXII 
I123200RevisedL57952
I63Chapter XXXIV 
I123400RevisedL58147
I123403RevisedL47882
I123407AddedL49245

I501992 
I607 CFR 
I6157 FR 
I62Page 
I63Chapter XVIII 
I122003.1_2003.5 (Subpart A)Exhibit A amendedL33101

I501993 
I607 CFR 
I6158 FR 
I62Page 
I63Chapter XVIII 
I122003.1_2003.50 (Subpart A)Exhibit A amended L5566
I14Regulation at 58 FR 5566 confirmedL42639
I63Chapter XXX 
I123015.77RemovedL41412
I123051AddedL41412
I63Chapter XXXIV 
I123401RevisedL21853
I123415AddedL65647
I63Chapter XLII 
I12ChapterXLII Established; interim L5566
I14Regulation at 58 FR 5566 confirmedL42639
I124284.401_4284.500 (Subpart E)AddedL5566
I124284.413(b), (d) introductory text and (6) amendedL42639
I124284.421(b)(6) addedL42639
I124284.441(b) introductory text revisedL42639
I124284.443AmendedL42639
I124284.401_4284.500 (Subpart E)Exhibit A corrected L12632
I14Exhibit A amendedL42640

I501994 
I607 CFR 
I6159 FR 
I62Page 
I63Chapter XVIII 
I12Chapter XVIIIHeading revised; nomenclature changeL66443
I122003.1_2003.5 (Subpart A)Exhibit A amended; interimL41389
I122018.254Introductory text revisedL3651
I63Chapter XXXIV
I12Chapter XXXIVHeading revised; nomenclature changeL68073
I123402RevisedL68073
I63Chapter XLII
I124284.501_4284.600 (Subpart F)Added; interimL41389
I124285AddedL38342

I501995 
I607 CFR 
I6160 FR 
I62Page 
I63Chapter XXVI
I122610RevisedL52840
I122620RevisedL52842
I63Chapter XXVIII
I122812AddedL34456
I63Chapter XXX
I123015.1(a)(1) revised; (a)(4) added; interimL44124
I123015.2(d)(6) added; interimL44124
I123015.194Revised; interimL44124
I123016.36(d), (g), (h) and (i) revisedL19639, 19641
ï¿½592ï¿½I123017.100RevisedL33040, 33043
I123017.105AmendedL33040, 33043
I123017.110(c) revisedL33041, 33043
I123017.200RevisedL33041, 33043
I123017.215RevisedL33041, 33043
I123017.220RevisedL33041, 33043
I123017.225RevisedL33041, 33043
I123017Appendixes A and B revisedL33042, 33043
I123019Added; interimL44124
I63Chapter XXXII
I12ChapterXXXII RemovedL63393
I123200Redesignated as 3411L63368
I63Chapter XXXIII
I123305RemovedL62975
I63Chapter XXXIV
I123404RevisedL66862
I123411Redesignated from 3200L63368
I14Authority citation revisedL63369
I123411.1(a) amendedL63369
I123411.2Introductory text revised; (l)(1), (2), (3), (n) and (o) addedL63369
I123411.3(d) addedL63369
I123411.4(b) introductory text, (c)(1), (4), (8), (9)(i), (ii) and (iii) amended; (c)(1) heading revised; (c)(13) and (14) addedL63369
I123411.6(f) addedL63370
I123411.8AmendedL63370
I123411.12Existing text designated as (a); (b) addedL63370
I63Chapter XXXVI
I123600RevisedL57534
I123601.3RevisedL57536
I123601.4RevisedL57536
I63Chapter XXXVII
I123701RevisedL66862
I63Chapter XLI
I124100RemovedL66062



I501996 
I607 CFR 
I6161 FR 
I62Page
I63Chapter XVIII
I12ChapterXVIII Heading revised; nomenclature changeL1109, 2899
I122003Authority citation revisedL3781
I122003.1_2003.5 (Subpart A)Exhibit A amendedL3782
I122018.251_2018.255 (Subpart F)RevisedL32645
I122054RemovedL21362
I63Chapter XXI
I12ChapterXXI RemovedL2898
I63Chapter XXII
I12ChapterXXII RemovedL2898
I63Chapter XXV
I12ChapterXXV RemovedL2898
I63Chapter XXIX
I122902RemovedL9901
I122903RemovedL4209
I63Chapter XXX
I123010RemovedL53608
I123017Authority citation revisedL250
I123017.110(a)(3) revisedL250
I123017.115(d) addedL251
I123017.200(d) addedL251
I63Chapter XXXIV
I123401RevisedL27753
I123403RevisedL25367
I123411.2(j) and (k) amendedL45319
I123411.4(c)(2)(iii), (3)(iii), (8), (9)(i), (ii), (iii) and (10) amendedL45319
I123411.5(a) and (b) amendedL45319
I123411.7(c) amendedL45319
I123411.10AmendedL45319
I123411.15AmendedL45319
I63Chapter XXXV
I12ChapterXXXV Established; interimL59779
I123550Technical correctionL63928
I123550.9(a) correctedL65266
I123550.10CorrectedL65266
I123550.63(a) correctedL65266
I63Chapter XXXVII
I123700RevisedL1827
I63Chapter XXXIX
I12ChapterXXXIX RemovedL68997
I63Chapter XL
I12Chapter XLRemovedL3788, 42371
I124000RemovedL42371
I124001RemovedL3788
I63Chapter XLII
I12ChapterXLII Heading revised; nomenclature changeL3782
I124279AddedL67633
I124284Authority citation revisedL3782
I124284.501_4284.600 (Subpart F)RevisedL3782
I124287AddedL67648






ï¿½593ï¿½I501997
I607 CFR
I6162 FR
I62Page

I63Chapter XVIII

I122003Authority citation revisedL16469, 67259

I122003.1_2003.5 (Subpart A)Exhibit A amended; interimL16469

I122003.1_2003.26 (Subpart A)RevisedL67259


I63Chapter XXX
I12ChapterXXX Heading revised; interimL45949
I123015.1(a)(2) revised; interimL45949
I123015.70_3015.77 (Subpart I)Removed; interimL45949
I123016.26(a), (b) introductory text and (1) revised; (a)(1) added; interimL45939
I123019.26(a), (b) and (c) revised; (e) added; interimL45939
I123051Removed; interimL45949
I123052Added; interimL45949

I63Chapter XXXIV

I123403RevisedL26168

I123405AddedL39317
I123406AddedL39331
I63Chapter XXXV
I123570Added; interimL16469
I63Chapter XLII
I124284.401_4284.500 (Subpart E)Redesignated as Part 1777L33473
I124284.501_4284.600 (Subpart F)RevisedL42387






I501998
I607 CFR
I6163 FR
I62Page

I63Chapter XVIII

I122003.10(c) table correctedL3256

I63Chapter XXX
I123017.105AmendedL27667

I63Chapter XXXII
I12ChapterXXXII AddedL57234

I63Chapter XXXV
I123550Comment period reopenedL29091
I123565Added; interimL39458

I63Chapter XLII
I124274AddedL6053







I501999
I607 CFR
I6164 FR
I62Page

I63Chapter XVIII

I122003Authority citation revisedL32388
I122003.18(b)(5)(i) amendedL32388

I63Chapter XXXIV
I123400Authority citation revisedL34103
I123400.1RevisedL34103
I123400.7(c) revisedL34103
I123400.20_3400.22 (Subpart C)AddedL34104
I123400.23 (Subpart D)AddedL34104

I63Chapter XXXV
I12ChapterXXXV CorrectedL56399
I123565Regulation at 63 FR 39458 confirmedL32371
I123565.5(b) revisedL32371
I123565.6RevisedL32371
I123565.8RevisedL32371
I123565.9(e) removed; (f) redesignated as (e)L32372
I123565.13RevisedL32372
I123565.52Introductory text amendedL32372
I123565.53(a) revised; (b) amendedL32372
I123565.103(d)(9) addedL32372
I123565.303(d)(8) amendedL32372
I123565.351Introductory text revised; (a) introductory text amendedL32372
I123570.51_3570.100 (Subpart B)RevisedL32388
I123575AddedL28337

I63Chapter XXXVII
I123700.3(g) removedL40736

I63Chapter XLII
I124284Authority citation revisedL71985
I124284.601_4284.700 (Subpart G)Added; eff. 1ï¿½0924ï¿½0900L71986
S8006I44G6T1ï¿½08

