[Federal Register Volume 59, Number 155 (Friday, August 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-19686]


[[Page Unknown]]

[Federal Register: August 12, 1994]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE
Farmers Home Administration

7 CFR Parts 1901, 1940, 1951, and 2003

Rural Development Administration

7 CFR Part 4284

RIN 0570-AA02

 

Rural Technology Development Grants

AGENCIES: Rural Development Administration and Farmers Home 
Administration, USDA.

ACTION: Interim final rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: The Rural Development Administration (RDA) promulgates a new 
regulation for Community Facility grants. The Farmers Home 
Administration (FmHA) amends its regulations that are utilized by RDA 
in administering Community Facility grants. This action complies with 
legislation which authorizes grants for establishing and operating 
centers for rural technology or cooperative development. The intended 
effect of this action is to publish regulations and application 
processing procedures to implement this new grant program to award 
fiscal year (FY) 1994 grants before the end of the FY.

DATES: These interim regulations are effective August 12, 1994. 
Comments should be in writing and received on or before October 11, 
1994.

ADDRESSES: Submit written comments in duplicate to the Office of the 
Chief, Regulations Analysis and Control Branch, FmHA, USDA, Room 6348, 
South Agriculture Building, 14th and Independence Avenue SW., 
Washington, DC 20250-0700. All written comments made pursuant to this 
notice will be available for public inspection during regular working 
hours at the above address.

FOR FURTHER INFORMATION CONTACT: Jennifer Barton, Loan Specialist, 
Community Facilities Division, Room 6304, South Agriculture Building, 
14th and Independence Avenue SW., Washington, DC 20250-0700, Telephone: 
(202) 720-1504.

SUPPLEMENTARY INFORMATION:

Cross References of Regulations

    The Rural Development Administration is a result of a 
reorganization of programs administered by Farmers Home Administration 
(FmHA) as required by section 364 of the Consolidated Farm and Rural 
Development Act (CONACT), as amended, (7 U.S.C. 2006f) and an order of 
the Secretary of Agriculture. Dual-references or cross-references to 
FmHA regulations are provided for by section 364.

Classification

    This interim rule has been determined to be significant/
economically significant and was reviewed by the Office of Management 
and Budget under Executive Order 12866.

Environmental Impact Statement

    This document has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program.'' RDA has determined that this 
action does not constitute a major Federal action significantly 
affecting the quality of the human environment, and in accordance with 
the National Environmental Policy Act of 1969, Pub. L. 91-190, an 
Environmental Impact Statement is not required.

Executive Order 12778

    This document has been reviewed in light of Executive Order (E.O.) 
12778 and meets the applicable standards provided in sections 2(a) and 
2(b)(2) of that E.O. Provisions within this part which are inconsistent 
with State law are controlling. All administrative remedies pursuant to 
7 C.F.R. part 1900, subpart B, must be exhausted prior to filing suit.

Intergovernmental Review

    This program is listed in the Catalog of Federal Domestic 
Assistance under number 10.771, Rural Technology Development Grants, 
and are subject to the provisions of Executive Order 12372 which 
requires intergovernmental consultation with State and local officials. 
RDA conducts intergovernmental consultation in the manner delineated in 
FmHA Instruction 1940-J.

Paperwork Reduction Act

    The information collection or recordkeeping requirements contained 
in these regulations have been approved by the Office of Management and 
Budget (OMB) under the provisions of 44 U.S.C. Chapter 35 and have been 
assigned OMB control numbers 0575-0018, 0575-0060, and 0570-0006 in 
accordance with the Paperwork Reduction Act of 1980. This interim final 
rule does not revise or impose any new information collection or 
recordkeeping requirement from those approved by OMB.

Justification for Interim Final Rule

    It is the policy of the Department that rules relating to public 
property, loans, grants, benefits, or contracts shall be published for 
public comment not withstanding the exemption of 5 U.S.C. 553 with 
respect to such rules. However, the Department is making this action 
effective immediately upon publication in the Federal Register without 
securing prior public comment.
    The purpose of this rule is to implement section 2347 of the Food, 
Agriculture, Conservation, and Trade Act of 1990 (Pub. L. 101-624) 
which amends Sec. 310B (f) through (h) (7U.S.C. 1932) of the CONACT. 
This statutory amendment created a new program for Rural Technology 
Grants. In FY 1993, $1 million was appropriated to this program as part 
of the Extension Service (ES) budget. Three proposals were selected for 
funding under ES administration. The program was transferred to RDA 
under a Memorandum of Understanding. ES received another appropriation 
in their budget in FY 1994 for $1.5 million. This amount has been 
transferred to RDA through an apportionment of funds. RDA is 
responsible for implementing this program for FY 1994.
    It has been determined that failure to implement the program will 
result in a substantial negative impact in the rural areas if grants 
from this program are not awarded from the appropriation for FY 1994. 
Because the appropriated funds for this program are not available past 
the end of FY 1994, it is essential that this authorization be 
implemented this year. RDA anticipates receiving a wide range of grant 
proposals as compared to the funding availability and expects the level 
of competition to be high. These regulations have a sunset provision of 
July 13, 1995.
    The economies of many rural areas have experienced significant 
stress as a result of relying primarily on the agricultural or natural 
resource-based industries to provide employment. As the result of 
improvements in efficiency and productivity or the decline in 
importance of those industries in certain areas, employment 
opportunities and the general economy of those areas have declined 
significantly. Therefore, immediate implementation of this program will 
provide $1.5 million for these needy areas.
    Since this is a new program, there is no historical data available 
to quantify benefits. However, the benefit to be derived from the 
program is the opportunity to create new investment and employment 
opportunities in rural areas based on new uses for agricultural or 
natural resources, thereby assisting in the diversification of rural 
economies, creating new employment opportunities, and simultaneously 
developing new markets for agricultural products and natural resources.
    The Interim Final Rule describes the procedures and practices for 
applying for and obtaining this grant assistance. The Agency, however, 
is providing for public comment in order for members of the public who 
wish to suggest alternative rule provisions or courses of action in 
implementing this program to have an opportunity to give RDA the 
benefit of their views. In the event that public comments are received, 
the Department will consider them, as appropriate, before further 
publishing of this rule.

Program Description

    Grants awarded under the Rural Technology Development Grant (RTDG) 
program will be to nonprofit institutions and public bodies to 
establish and operate centers for rural technology or cooperative 
development. The term ``nonprofit institution'' is defined by the 
CONACT, Sec. 310B(f)(4)(A) to mean ``* * * any 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.'' While this 
definition does not include public bodies, the reference to public 
bodies in Sec. 310B(f) of the CONACT does indicate congressional intent 
to make rural technology development grants available to public bodies. 
The term ``public body'' has been defined to mean any State, county, 
city, township, incorporated towns and villages, boroughs, authorities, 
districts, locally-based areawide economic development organizations, 
Indian tribes on Federal and State reservations, and other federally 
recognized Indian tribes in rural areas. Furthermore, the Agency 
believes public bodies should be eligible because they are eligible for 
other RDA programs and could reasonably be expected to operate such 
centers.
    The statute requires that these centers satisfy certain conditions 
in order to be eligible for grant funds. The primary objective of the 
program, established by CONACT Sec. 310B(f)(2)(B), is to improve the 
economic condition of rural areas by promoting the development (through 
technological innovation, cooperative development, and adaptation of 
existing technology) and commercialization of: (1) new services and 
products that can be produced or provided in rural areas, (2) new 
processes that can be utilized in the production of products in rural 
areas, and (3) new enterprises that can add value to on-farm production 
through processing or marketing. The intent of this law is to provide 
incentives to establish new businesses, implement advanced technologies 
for businesses presently in place, and create alternative agricultural 
enterprises to stimulate the farm economy in the rural areas.
    Definitions referenced in the interim rule generally are based on 
working definitions used by the Agency or other Federal agencies in 
similar grant programs and common usage of the terms. ``Cooperative 
development,'' however, was taken from the CONACT, Sec. 310B(f)(2)(B), 
and ``technology development'' was taken from the CONACT, Sec. 
310B(f)(2)(C)(vi). ``Rural and rural area,'' ``urbanized area,'' and 
``urbanizing area'' were taken from related RDA program regulations 
also under the authority of the CONACT, Sec. 310B. The term ``United 
States'' is defined in accordance with Sec. 310B(f)(4)(B) to mean the 
several States, the District of Columbia, the Commonwealth of Puerto 
Rico, the Virgin Islands, Guam, American Samoa, and the other 
territories and possessions of the United States.

Eligibility

    RTDGs may be made to nonprofit institutions and public bodies 
serving rural areas. Rural area determinations will be made to 
ascertain the eligibility of the applicant's proposed serving area. The 
procedure established in this rule to determine eligible grant areas is 
based on density requirements used by RDA in other grant programs.
    In accordance with the CONACT, Sec. 310B(h), grants may be used to 
pay only up to 75 percent of the administrative costs. The Agency has 
further determined that to better utilize limited funds available under 
the program and to leverage those funds to bring in other sources of 
funding for the projects, the maximum grant amount for each proposed 
project will not be more than 75 percent of the project costs. This 
requirement is considered necessary to stimulate other funding 
participation in economic development activities and allow program 
grant funds to reach a broader range of rural economic development 
efforts. The applicant must contribute at least 25 percent to the cost 
of the project and administrative costs. The applicant's contribution 
may be in cash or third-party in-kind contributions in accordance with 
7 CFR 3015, ``Uniform Federal Assistance Regulations,'' and 3016, 
``Uniform Administrative Requirements for Grants and Cooperative 
Agreements to State and Local Governments.'' Under 7 CFR 3015 and 3016, 
matching funds generally cannot come from another Federal grant 
program.
    No Federal funds for this program shall be granted to an applicant 
who has an outstanding delinquent Federal debt until the delinquent 
account has been paid in full, nor shall funds be granted to an 
applicant for which an outstanding judgment obtained by the United 
States in a Federal Court (other than in the United States Tax Court), 
which has been recorded, unless it has been paid in full or otherwise 
satisfied, as required by the Federal Debt Collection Act of 1990.
    Section 310B(d)(2) further prohibits financial assistance over $1 
million, or where direct employment is increased by more than 50 
employees, if: (1) it is likely to result in the transfer from one area 
to another any employment or business activity, unless it expands 
existing businesses or establishes a new location or; (2) it will 
increase the production or the availability of services or facilities 
in an area which will increase employment and have an adverse effect on 
existing competitors.

Application Process

    Applications to be submitted must include a clear statement of the 
goal(s) and objective(s) of the project and a plan which describes the 
proposed project as required by the CONACT, Sec. 310B (f)(2). Such plan 
must contain specific elements to be addressed which have been deemed 
necessary to carry out the intent of the program and will also serve as 
the basis for the selection criteria that will be used to evaluate the 
project.
    The program objectives and eligible grant purposes based on the 
statute are set forth in the interim rule. The Agency has expanded 
these eligible purposes to include equipment and materials necessary to 
carry out the objectives of the plan. This purpose is incidental and 
required to carry out the program's statutory objectives.
    Ineligible grant purposes identified in the interim rule are in 
accordance with 7 CFR 3015 and 3016 and are consistent with other RDA 
grant programs. In addition, RTDG funds may not be provided to support 
greater than 75 percent of eligible project costs or to pay for 
building construction, the purchase of real estate or vehicles, 
improving and/or renovation of office space, or repair or maintenance 
of privately-owned property. Due to the limited funding available, 
these limitations are necessary to benefit as many eligible projects as 
possible.
    Application requirements include submission of an SF-424, 
``Application for Federal Assistance,'' and other supporting 
documentation. The information required is consistent with RDA's other 
grant programs. The application process for RTDG funds is a two-stage 
process. Preapplications are submitted to determine applicant 
eligibility. Upon an eligibility determination, applications are 
submitted to process for competitive project selection. All supporting 
documentation required in connection with the preapplication/
application are necessary for RDA to determine if the applicant is 
eligible, if the proposed grant purposes are eligible, and to help the 
Agency select the best grant applications for funding. RDA is 
simultaneously publishing in this issue of the Federal Register a 
Notice (inviting applications) that contains more specific guidance on 
submission of applications for FY 1994.

Project Selection

    Section 310B(f)(3) of the CONACT limits the Agency's discretion in 
selecting eligible projects for funding. Grants shall be made on a 
competitive basis. Preferences will be given to support projects that 
most effectively improve business, industry, and employment in rural 
areas. Emphasis for project selection will be given to those projects 
that ``* * * contribute the most to the improvement of economic 
conditions of rural areas. * * *'' The Agency has interpreted this 
statutory phrase to establish preferences for projects that will create 
industries or agribusinesses, increase employment, stem the flow of 
outmigration, and increase the tax base in the areas to be served. The 
applicant must provide data to support these criteria for the most 
current full calendar year for which data is available and the 3 prior 
calendar years. This range of information should provide an accurate 
picture of the economic conditions of the rural areas to be served. The 
Agency is placing an emphasis on these criteria based on the purposes 
and objectives set forth in the statute. The actual number of proposals 
to receive funding will depend on the total number of applications 
received and the amount of grant funds requested. Projects will be 
selected based on a priority point system set out in the regulation. 
The point system emphasizes those factors given preference by statute. 
Points will be totalled and ranked with other applications. This 
selection method has been successful in other grant programs 
administered by the Agency and is considered the best method to use for 
this program.
    RDA monitors and evaluates each project it approves in accordance 
with 7 CFR 3015 and 3016. Monitoring typically involves site visits by 
RDA staff and designated evaluators, telephone conversations, and 
evaluation of the grantee's written activity reports. Activity reports 
are used to evaluate projects and must be in a measurable form. 
Termination of grant provisions are in accordance with 7 CFR 3015 and 
3016. These provisions are consistent with other RDA grant programs.

Miscellaneous

    Recipients and subrecipients are subject to all applicable Federal 
laws, Federal and USDA policies, regulations, and procedures applicable 
to Federal financial assistance. Requirements concerning civil rights, 
the environment, debarment and suspension, etc., have been listed in 
this rule. These restrictions are consistent with other RDA grant 
programs.

List of Subjects

7 CFR Part 1901

    Agriculture, Authority delegations, Civil rights, Compliance 
reviews, Fair housing, Minority groups.

7 CFR Part 1940

    Allocations, Administrative practice and procedure, Agriculture, 
Grant programs--Housing and community development, Loan programs--
Agriculture, Rural areas.

7 CFR Part 1951

    Account servicing, Grant programs--Housing and community 
development, Reporting requirements, Rural areas.

7 CFR Part 2003

    Organization and functions (Government agencies).

7 CFR Part 4284

    Business and industry; Grant programs--Housing and community 
development; Rural areas.

    Therefore, chapters XVIII and XLII, title 7, Code of Federal 
Regulations, are amended as follows:

PART 1901--PROGRAM-RELATED INSTRUCTIONS

    1. The authority citation for part 1901, subpart E, continues to 
read as follows:

    Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 40 U.S.C. 442; 5 
U.S.C. 301; 42 U.S.C. 2942; 7 C.F.R. 2.23; 7 CFR 2.70.

Subpart E--Civil Rights Compliance Requirements *C*

    2. Section 1901.204 is amended by adding a paragraph (a)(27) to 
read as follows:


Sec. 1901.204   Compliance reviews.

    (a) * * *
    (27) Rural Technology Development Grants in subpart F of part 4284 
of this title.
* * * * *

PART 1940--GENERAL

    3. The authority citation for part 1940 continues to read as 
follows:

    Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
2.23; 7 CFR 2.70.

Subpart L--Methodology and Formulas for Allocation of Loan and Grant 
Program Funds

    4. Section 1940.590 is amended by adding paragraph (j) to read as 
follows:


Sec. 1940.590  Community and Business Programs appropriations not 
allocated by State.

* * * * *
    (j) Rural Technology Development Grants. Control of funds will be 
retained in the National Office and allocated on a project case basis. 
Funds may be requested by sending in Exhibit C of subpart F of part 
4284 of this title (available in any FmHA State Office).

PART 1951--SERVICING AND COLLECTIONS

    5. The authority citation for part 1951 continues to read as 
follows:

    Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
2.23 and 7 CFR 2.70.

Subpart E--Servicing of Community and Insured Business Programs 
Loans and Grants


Sec. 1951.201   [Amended]

    6. Section 1951.201 is amended by removing the word ``and'' before 
the words ``Section 306C'' and by adding the words ``; and Rural 
Technology Development Grants in subpart F of part 4284 of this title'' 
after the words ``subpart E of part 4284 of this title''.

PART 2003--ORGANIZATION

    7. The authority citation for part 2003 continues to read as 
follows:

    Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; Public 
Law 100-82, 7 CFR 2.23 and 2.70.

Subpart A--Functional Organization of the Farmers Home 
Administration

    8. Exhibit A of subpart A, paragraph 2 under the heading of 07 02 
03 Assistant Administrator--Community and Business Programs is amended 
by adding the words ``rural technology development grants,'' after the 
words ``rural business enterprise/television demonstration grants.''

PART 4284--GRANTS

    9. The authority citation for part 4284 continues to read as 
follows:

    Authority: 7 U.S.C. 1989; 16 U.S.C. 1005; 5 U.S.C. 301; 7 CFR 
2.70.

Subpart F--Rural Technology Development Grants

    10. Subpart F of part 4284, consisting of Secs. 4284.501 through 
4284.600, is added to read as follows:

Subpart F--Rural Technology Development Grants

Table of Contents

Sec.
4284.501  Purpose.
4284.502  Policy.
4284.503  [Reserved]
4284.504  Definitions.
4284.505  Applicant eligibility.
4284.506-4284.514  [Reserved]
4284.515  Grant purposes.
4284.516  Ineligible grant purposes.
4284.517-4284.526  [Reserved]
4284.527  Other considerations.
4284.528  Application processing.
4284.529-4284.539  [Reserved]
4284.540  Grant selection criteria.
4284.541  Grant approval, fund obligation, grant closing, and third-
party financial assistance.
4284.542-4284.555  [Reserved]
4284.556  Docket preparation and Letter of Conditions.
4284.557  Fund disbursement.
4284.558  Reporting.
4284.559-4284.570  [Reserved]
4284.571  Audit requirements.
4284.572  Grant servicing.
4284.573  Programmatic changes.
4284.574  Subsequent grants.
4284.575  Grant suspension, termination, and cancellation.
4284.576-4284.586  [Reserved]
4284.587  Exception authority.
4284.588  Forms and exhibits.
4284.589-4284.599  [Reserved]
4284.600  OMB control number.

Exhibit A to Subpart F--Agreement of Administrative Requirements for 
Rural Technology Development Grants

Subpart F--Rural Technology Development Grants


Sec. 4284.501   Purpose.

    (a) This subpart outlines the Rural Development Administration's 
(RDA) policies and authorizations and sets forth procedures to provide 
grants for technology and cooperative development in rural areas. 
Grants will not be awarded under this subpart after July 13, 1995.
    (b) Grants for establishing and operating centers for rural 
technology or cooperative development will be for the primary purpose 
of improving the economic condition of rural areas by promoting the 
development (through technological innovation, cooperative development, 
and adaptation of existing technology) and commercialization of new 
services and products that can be produced or provided in rural areas; 
new processes that can be utilized in the production of products in 
rural areas; and new enterprises that can add value to on-farm 
production through processing or marketing.
    (c) Copies of all forms and Instructions referenced in this subpart 
are available in any Farmers Home Administration (FmHA) State Office.


Sec. 4284.502   Policy.

    (a) The grant program will be used to assist in the economic 
development of rural areas.
    (b) Funds allocated for use in accordance with this subpart are 
also to be considered for use by Native American tribes within the 
State regardless of whether State development strategies include Indian 
reservations within the State's boundaries. Native American tribes 
residing on such reservations must have equal opportunity along with 
other rural residents to participate in the benefits of these programs. 
This includes equal application of outreach activities of RDA servicing 
offices.


Sec. 4284.503   [Reserved]


Sec. 4284.504   Definitions.

    Approval official--Any authorized FmHA/RDA official.
    Cooperative--An association organized to provide a specific service 
with open membership, equality in ownership and control, limited return 
on members' capital, and equitable methods to distribute any excess 
earnings back to its members.
    Cooperative development--The startup or expansion of a cooperative 
which will promote the development of new services and products that 
can be produced or provided in rural areas, new processes that can be 
utilized in the production of products in rural areas, and/or new 
enterprises that can add value to on-farm production through processing 
or marketing.
    Economic development--The 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, and/or gains in 
other measurements of economic activity, such as land values.
    Nonprofit institutions--Any 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.
    Project--The undertaking for which funds will be used to develop or 
operate a technology and/or cooperative development center.
    Public body--Any State, county, city, township, incorporated towns 
and villages, boroughs, authorities, districts, locally-based areawide 
economic development organizations, and Indian tribes on Federal and 
State reservations, and other federally recognized Indian tribes in 
rural areas.
    Servicing office--Any FmHA State Office.
    Small business--A business which does not exceed the maximum number 
of employees or annual receipts allowed for a concern (including its 
affiliates) to be considered small according to the established size 
standards for Small Business Administration (SBA) assistance as set 
forth in 13 CFR, part 121. The business may be operated on a profit or 
nonprofit basis but must rely primarily on revenues of the business for 
operation.
    Technology--The application of science to industrial or commercial 
objectives. The entire body of methods and material used to achieve 
such objectives.
    Technology development--The creation of new technology or the use 
and application of existing technology to promote the development and 
commercialization of new products, new processes, and new services that 
can be produced or provided in rural areas.
    Rural and rural area--Includes all territory of a State, the 
Commonwealth of Puerto Rico, the Virgin Islands of the United States, 
Guam, American Samoa, or the Commonwealth of the Mariana Islands 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 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.
    Urbanized area--An area immediately adjacent to a city having a 
population of 50,000 or more 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 boundary(ies) 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 and are not 
otherwise considered a part of an urbanized or urbanizing area, as 
defined in this section, are not in a nonrural area.
    Urbanizing area--A community 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 from'' 
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 be 
disregarded. A community is considered ``independent of'' when its 
social and economic structure (e.g., government; educational, health, 
and recreational facilities; and business; industry, tax base, and 
employment opportunities) is not primarily dependent on the city and 
its immediately adjacent urbanized areas.


Sec. 4284.505   Applicant eligibility.

    (a) Grants may be made to public bodies or nonprofit institutions.
    (1) The approval official will proceed as follows in rural area 
determinations: When the approval official determines an area to be 
urbanized or urbanizing, he/she must then determine the population 
density per square mile. If the project otherwise appears to be 
eligible, the approval official will request the National Office to 
provide the correct density figure.
    (2) All such density determinations will be made on the basis of 
minor civil division or census county division as used by the Bureau of 
the Census. In making the density calculations, large nonresidential 
tracts devoted to urban land uses such as railroad yards, airports, 
industrial sites, parks, golf courses, and cemeteries or land set aside 
for such purposes will be excluded.
    (b) An outstanding judgement 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 judgement is paid in 
full or otherwise satisfied. RDA grant funds may not be used to satisfy 
the judgement. Questions about whether or not a judgement is still 
outstanding should be directed to the Office of the General Counsel 
(OGC).


Secs. 4284.506-4284.514  [Reserved]


Sec. 4284.515  Grant purposes.

    Grant funds may be used to pay up to 75 percent of the costs for 
establishing and/or operating centers for rural technology and/or 
cooperative development. Applicant's contribution may be in cash or 
third-party in-kind contribution in accordance with parts 3015 and 3016 
of this title. Grant funds may be used for, but are not limited to, the 
following purposes:
    (a) Technology research, investigations, and basic feasibility 
studies in any field or discipline for the purpose of generating 
principles, facts, technical knowledge, new technology, or other 
information that may be useful to rural industries, cooperatives, 
agribusinesses, and other persons or entities in rural areas served by 
such centers in the development and commercialization of new products, 
processes, or services.
    (b) The collection, interpretation, and dissemination of 
principles, facts, technical knowledge, new technology, or other 
information that may be useful to rural industries, cooperatives, 
agribusinesses, and other persons or entities in rural areas served by 
the center in the development and commercialization of new products, 
processes, or services.
    (c) Providing training and instruction for individuals residing in 
rural areas served by the center with respect to the development 
(through technological innovation, cooperative development, and 
adaptation of existing technology) and commercialization of new 
products, processes, or services.
    (d) Providing loans and grants to individuals, small businesses, 
and cooperatives in rural areas for purposes of generating, evaluating, 
developing and commercializing new products, processes, or services.
    (e) Providing technical assistance and advisory services to 
individuals, small businesses, cooperatives, and industries in rural 
areas served by the center for purposes of developing and 
commercializing new products, processes, or services.
    (f) Providing research and support to individuals, small 
businesses, cooperatives, and industries in rural areas served by the 
center for purposes of developing new agricultural enterprises to add 
value to on-farm production through processing or marketing.
    (g) Paying up to 75 percent of the administrative costs of the 
applicant in carrying out its projects.
    (h) Equipment and materials necessary to carry out other eligible 
grant purposes under this section.


Sec. 4284.516  Ineligible grant purposes.

    Grant funds may not be used to:
    (a) Pay more than 75 percent of a project cost.
    (b) Pay more than 75 percent of administrative costs.
    (c) Duplicate current services or replace or substitute support 
previously provided.
    (d) Pay costs of preparing the application package for funding 
under this program.
    (e) Pay costs incurred prior to the effective date of the grant 
made under this subpart.
    (f) Pay for building construction or the purchase of real estate or 
vehicles; improving and/or renovation of office space; or repair or 
maintenance of privately-owned property.
    (g) Fund political activities.
    (h) 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.


Secs. 4284.517-4284.526  [Reserved]


Sec. 4284.527  Other considerations.

    (a) Civil rights compliance requirements. 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 subpart E of part 1901 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 
which prohibits discrimination on the basis of handicap; 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, Pub. L. 101-336, which prohibits discrimination on 
the basis of disability by private entities in places of public 
accommodations.
    (b) Environmental requirements. (1) General applicability. Unless 
specifically modified by this section, the requirements of subpart G of 
part 1940 of this title apply to this subpart. RDA will give particular 
emphasis to ensuring compliance with the environmental policies 
contained in Secs. 1940.303 and 1940.304 of subpart G of part 1940 of 
this title. 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, 
wetlands, and floodplains. 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.
    (2) Technical assistance. An application for a technical assistance 
project is generally excluded from the environmental review process by 
Sec. 1940.333 of subpart G of part 1940 of this title. However, as 
further specified in that section, the grantee of a technical 
assistance grant, in the process of providing technical assistance, 
must consider the potential environmental impacts of the 
recommendations provided to the recipient of the technical assistance.
    (3) Applications for grants to provide financial assistance to 
third-party recipients. As part of the preapplication, the applicant 
must provide a complete Form FmHA 1940-20, ``Request for Environmental 
Information,'' for each project specifically identified in its plan to 
provide financial assistance to third parties who will undertake 
eligible projects with such assistance. RDA will review the 
preapplication, supporting materials, and any required Forms FmHA 1940-
20 and initiate a Class II assessment for the preapplication in 
accordance with Sec. 1940.318 of subpart G of part 1940 of this title. 
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 and that can be identified at this 
time from the information submitted. Because RDA's approval of this 
type of grant application does not constitute RDA's commitment to the 
use of grant funds for any identified third-party projects (see 
Sec. 4284.541 of this subpart), no public notification requirements for 
a Class II assessment will apply to the preapplication. After the grant 
is approved, each third-party project to be assisted under the grant 
will undergo the applicable environmental review and public 
notification requirements in subpart G of part 1940 of this title prior 
to RDA providing its consent to the grantee to assist the third-party 
project. If the preapplication reflects only one specific project which 
is specifically identified as the third-party recipient for financial 
assistance, RDA may perform the appropriate environmental assessment in 
accordance with the requirements of subpart G of part 1940 of this 
title and forego initiating a Class II assessment with no public 
notification. However, 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 in subpart G 
of part 1940 of this title.
    (c) Governmentwide debarment and suspension (nonprocurement) and 
requirements for drug-free workplace. All projects must comply with the 
requirements set forth in part 3017 of this title and FmHA Instruction 
1940-M (available in any FmHA State Office).
    (d) Restrictions on lobbying. All grants must comply with the 
lobbying restrictions set forth in part 3018 of this title.
    (e) Excess capacity or transfer of employment.
    (1) If a proposed grant is 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 RDA determination 
that the proposal will not result in a project which is calculated to, 
or likely to, result in:
    (i) The transfer of any employment or business activity from one 
area to another (this limitation shall 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 unless there is reason to believe that such 
expansion is being established with the intention of closing down the 
operations of the existing business entity in the area of its original 
location or in any other area where it conducts such operations), or
    (ii) An increase in the production of goods, materials, or 
commodities or the availability of services or facilities in the area 
when there is not sufficient demand for such goods, materials, 
commodities, services, or facilities to employ the efficient capacity 
of existing competitive commercial or industrial enterprises, unless 
such financial or other assistance will not have an adverse effect upon 
existing competitive enterprises in the area. The applicant's written 
support will consist of a resolution from the applicant and Form FmHA 
449-22, ``Certification of Non-Relocation and Market and Capacity 
Information Report,'' from each existing and future occupant of the 
site. The applicant may use Guide 2 of subpart G of part 1942 
(available in any FmHA State Office) as an example in preparing the 
resolution. Future occupants of the site must be certified by the 
Department of Labor (DOL) for a period of 3 years after the initial 
certification by DOL.
    (2) RDA will check each document for completeness and accuracy and 
submit nine copies of each to the National Office for forwarding to 
DOL.
    (3) Grants shall not be made if the Secretary of Labor certifies 
within 30 days after the matter has been submitted by the Secretary of 
Agriculture that the provisions of paragraph (e)(1) of this section 
have not been met. Information for obtaining this certification will be 
submitted, in writing, by the applicant to RDA. The information will be 
submitted to DOL by the RDA National Office. Grant approval may be 
given and funds may be obligated, subject to the DOL certification 
being received, provided RDA has made its own separate determinations 
of (e)(1) (i) and (ii) of this section when applicable.
    (f) Management assistance. 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, 3016, and 3017 of this title, as 
appropriate, and established RDA guidelines.
    (g) National Historic Preservation Act of 1966. All projects will 
be in compliance with the National Historic Preservation Act of 1966 in 
accordance with subpart F of part 1901 of this title.
    (h) Uniform Relocation Assistance and Real Property Acquisition 
Policies Act. All projects must comply with the requirements set forth 
in part 21 of this title.
    (i) Floodplains and wetlands. All projects must comply with 
Executive Order 11988, ``Floodplain Management,'' and Executive Order 
11990, ``Protection of Wetlands.''
    (j) Flood or mudslide hazard area precautions. If the grantee 
financed project is in a flood or mudslide area, flood or mudslide 
insurance must be provided.
    (k) Termination of Federal requirements. Once the grantee has 
provided assistance to projects from a revolving fund, in an amount 
equal to the grant provided by RDA, the requirements imposed on the 
grantee shall not be applicable to any new projects thereafter financed 
from the revolving funds. Such new projects shall not be considered as 
being derived from Federal funds.
    (l) Intergovernmental review. Grant projects are subject to the 
provisions of Executive Order 12372 which requires intergovernmental 
consultation with State and local officials. A revolving 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 
revolving loan project. For each project to be assisted with a grant 
under this subpart and for which the State has elected to review the 
project 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 RDA grant 
funds for the specific project. Prior to RDA's decision on the request, 
compliance with requirements of intergovernmental consultation must be 
demonstrated for each project. These requirements should be carried out 
in accordance with subpart V, ``Intergovernmental Review of Department 
of Agriculture Programs and Activities,'' of part 3015 of this title 
(see subpart J of part 1940 of this title, available in any FmHA State 
Office).


Sec. 4284.528  Application processing.

    (a) Preapplications. (1) Applicants will file an original and one 
copy of Standard Form (SF) 424.1, ``Application for Federal Assistance 
(For Non-construction),'' with the appropriate RDA office. This form is 
available in any FmHA State Office.
    (2) All preapplications shall be accompanied by:
    (i) Evidence of applicant's legal existence and authority to 
perform the proposed activities under the grant.
    (ii) Latest financial information to show the organization's 
financial capacity to carry out the proposed work. At a minimum, the 
information should include a balance sheet and an income statement. A 
current audit report is preferred where one is reasonably obtainable.
    (iii) Estimated breakdown of total costs, including costs to be 
funded by the applicant as well as other sources. Other sources should 
be identified. 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 3016 of this title. 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.
    (iv) Budget and description of the accounting system in place or 
proposed.
    (v) Area to be served, identifying each government unit, i.e., 
town, county, etc., if affected by the proposed project and evidence of 
support and concurrence in the proposed project from the affected local 
governmental bodies as evidenced by resolution or a written statement 
from the chief elected local official.
    (vi) The most current demographic information (and source) about 
the area to be served which includes information on the rural 
industries and agribusinesses in the area; unemployment rate; 
description of under employment in the area; information regarding 
outmigration of people, businesses and industries; and the per capita 
income of the area. The source of information and dates must be 
identified and must be from a recognized source such as Census data or 
State employment data.
    (vii) Businesses to be assisted.
    (viii) Applicant's experience, including experience of key staff 
members and person(s) who will be providing the proposed service(s) and 
managing the project.
    (ix) The number of months duration of the project or service and 
the estimated time it will take from grant approval to beginning of 
service.
    (x) Method and rationale used to select the areas/businesses that 
will receive the service.
    (xi) Brief description of how the work will be performed and 
whether organizational staff or consultants/contractors will be used.
    (xii) Evaluation method to be used by the applicant to determine if 
objectives of the proposed activity are being accomplished.
    (xiii) A brief plan which contains the following provisions and 
describes how the applicant will meet those provisions:
    (A) A provision that substantiates that the applicant will 
effectively serve rural areas in the United States.
    (B) A provision that the primary objective of the applicant will be 
to improve the economic condition of rural areas by promoting the 
development (through technological innovation, cooperative development, 
and adaptation of existing technology) and commercialization of:
    (1) New services and products that can be produced or provided in 
rural areas;
    (2) New processes that can be utilized in the production of 
products in rural areas; and
    (3) New enterprises that can add value to on-farm production 
through processing or marketing.
    (C) A description of the activities that the applicant will carry 
out to accomplish such objective.
    (D) A description of the proposed activities to be funded under 
this subpart.
    (E) 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.
    (F) 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 Government, and State and local governments.
    (G) 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.
    (H) 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.
    (I) Provisions for:
    (1) Monitoring and evaluating its activities; and
    (2) Accounting for money received and expended by the institution 
under this subpart.
    (J) Provisions that the applicant will provide for the optimal 
application of technology and cooperative development in rural areas, 
especially those areas adversely affected by adverse agricultural 
economic conditions, through the establishment of demonstration 
projects and subcenters for:
    (1) Rural technology development where the technology can be 
implemented by communities, community colleges, businesses, 
cooperatives, and other institutions; or
    (2) Cooperative development where such development can be 
implemented by cooperatives to improve local economic conditions.
    (xiv) If grant funds are to be used for the purpose of making loans 
and/or grants to eligible individuals, small businesses, or 
cooperatives (ultimate recipients) in rural areas for eligible purposes 
under this subpart, the applicant shall develop a plan which outlines 
the purpose and administration of the fund and include in the 
preapplication a copy of a proposed agreement to be used between the 
applicant and the ultimate recipient(s) which includes the following:
    (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 set forth in this 
subpart, including parts 3015 and 3016 of this title.
    (B) Provisions that the ultimate recipient will comply with 
debarment and suspension requirements contained in part 3017 of this 
title and will execute Form AD-1048, ``Certification Regarding 
Debarment, Suspension, Ineligibility and Voluntary Exclusion--Lower 
Tier Covered Transactions.''
    (C) Provisions that the ultimate recipient will execute Form FmHA 
400-4, ``Assurance Agreement.''
    (D) Clear documentation that the ultimate recipient understands its 
responsibilities to the applicant.
    (E) Clear 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.
    (F) Brief written narrative addressing all items in 
Sec. 4284.540(a) of this subpart, regarding grant selection criteria.
    (3) Upon receipt of a preapplication, RDA will:
    (i) Review and evaluate the preapplication and accompanying 
documents;
    (ii) Request from the OGC, a legal determination of the applicant's 
legal existence and authority to perform the proposed activity; and
    (iii) Respond to the applicant (usually within 45 days) using Form 
AD-622, ``Notice of Preapplication Review Action,'' indicating the 
action taken on the preapplication.
    (4) Applicants whose preapplications are found to be ineligible 
will be given notice by use of Form AD-622 and advised of their appeal 
rights under subpart B of part 1900 of this title.
    (5) If at any time prior to grant approval it is decided that 
favorable action will not be taken on a preapplication or application, 
the RDA will notify the applicant in writing of the reasons why the 
request was not favorably considered. The notification will advise the 
applicant of appeal rights under subpart B of part 1900 of this title.
    (6) Applicants eligible for funding within the available funds will 
be provided forms and instructions for filing a complete application. 
Applicants should be advised against incurring obligations which cannot 
be fulfilled without RDA funds.
    (b) Applications. Upon notification on Form AD-622 that the 
applicant is eligible for funding, the following will be submitted to 
the RDA by the applicant:
    (1) SF 424.1.
    (2) Proposed scope of work, detailing the proposed activities to be 
accomplished and timeframes for completion of each activity.
    (3) Proposed budget, including source and amount of applicant 
contribution and any other funding sources for the proposed project.
    (4) Other requested information needed by RDA to make a grant award 
determination.
    (c) Applicant response. If the applicant fails to submit the 
application and related material by the date shown on Form AD-622 
(normally 30 days from the date of Form AD-622), RDA may discontinue 
consideration of the application. Appeal rights will be given in 
accordance with subpart B of part 1900 of this title.


Secs. 4284.529-4284.539   [Reserved]


Sec. 4284.540   Grant selection criteria.

    Grants will be awarded under this subpart on a competitive basis. 
The priorities described below will be used by the RDA to rate 
preapplications and applications. Points will be distributed as 
indicated in paragraph (a) of this section. Points will be distributed 
according to ranking as compared with other preapplications/
applications on hand. A copy of the score sheet (available in any FmHA 
State Office) should be placed in the casefile for future reference.
    (a) The selection criteria are as follows:
    (1) Economic conditions. Preference will be given to proposed 
projects which will serve a rural area(s) that has few rural industries 
and agribusinesses; high levels of unemployment or underemployment; 
high rates of outmigration of people, businesses, and industries; and 
low levels of per capita income. RDA will consider data supporting 
these demographics from the United States Bureau of the Census or other 
reliable data from recognized local, regional, State or Federal sources 
or from surveys conducted by reliable, impartial sources. Outmigration 
of businesses and industries, for example, may be supported by county 
business patterns data available from the Bureau of the Census. Data to 
support all categories must be for the most current full calendar year 
for which the data is available and the 3 calendar years prior to that 
year. The competitive range for proposed projects is as follows:
    (i) Number of rural industries and agribusinesses in comparison 
with the population of the area(s) to be served: 1 or less per 5,000 
residents--25 points; 1 or less per 3,000 residents--15 points; or 1 or 
less per 1,000 residents--5 points.
    (ii) Unemployment rate in the area(s) to be served: Exceeds the 
State rate by 25 percent or more--15 points; or exceeds the State rate 
by less than 25 percent but more than 5 percent--10 points.
    (iii) Underemployment in the area(s) to be served exceeds the State 
rate of underemployment by 25 percent or more--20 points; exceeds the 
State rate by less than 25 percent--10 points; or is equal to or less 
than State rate--0 points.
    (iv) Outmigration of rural residents from the area(s) as evidenced 
by a population loss in the last full calendar year of at least 20 
percent--20 points.
    (v) Outmigration of business and industry and/or business and 
industry closures in the area(s) of at least 20 percent in the last 3 
years--20 points.
    (vi) Average per capita income of the area(s) is less than the 
State average by: 50 percent--25 points; or 25 percent--10 points.
    (2) Project proposal. The project proposal will contribute the most 
to the improvement of economic conditions of the rural area(s) by:
    (i) Creation of industries or agribusinesses in the area(s): 1 or 
more per 5,000 residents--20 points; 1 or more per 10,000 residents--10 
points; or 1 or more per 20,000 residents--5 points.
    (ii) Increasing employment by 10 percent or more--10 points.
    (iii) Stemming the flow of outmigration of people, businesses, or 
industries by 10 percent or more--10 points.
    (iv) Increasing the tax base of the area(s) by 2 percent or more--5 
points.
    (3) Applicant experience. The applicant demonstrates capability to 
transfer for practical application in rural areas the technology 
generated and demonstrates the ability to commercialize products, 
processes, services, and enterprises in rural areas--15 points.
    (b) Review of decision. Each application for assistance will be 
carefully reviewed in accordance with the priorities established in 
this section. A priority rating will be assigned to each application. 
Applications selected for funding will be based on the priority rating 
assigned each application and the total funds available. All 
applications submitted for funding should contain sufficient 
information to permit RDA to complete a thorough priority rating. When 
a determination is made that favorable action will not be taken on a 
preapplication or application, the applicant will be notified in 
writing of the reasons why the request was not favorably considered. 
The notification to the applicant will state that a review of this 
decision by RDA may be requested by the applicant in accordance with 
subpart B of part 1900 of this title.


Sec. 4284.541  Grant approval, fund obligation, grant closing, and 
third-party financial assistance.

    (a) [Reserved]
    (b) [Reserved]
    (c) A copy of the executed Form FmHA 1940-1, ``Request for 
Obligation of Funds,'' and the approved scope of work will be sent to 
the applicant on the obligation date. The grant will be considered 
closed on the obligation date. Exhibit A of this subpart, shall become 
a permanent part of Form FmHA 1940-1 when grant funds are involved, and 
the following paragraphs will appear in the comment section of that 
form as appropriate:
    (1) ``The grantee understands the requirements for receipt of funds 
under the Rural Technology Development Grant program. The grantee 
assures and certifies that it is in compliance with all applicable 
laws, regulations, Executive Orders, and other generally applicable 
requirements, including those set forth in exhibit A of subpart F of 
part 4284 of this chapter, 7 CFR parts 3015, 3016, 3017, and 3018 
(including revisions through ________________ (date of grant 
approval)); and the Letter of Conditions and the approved scope of 
work.''
    (2) For grants involving the establishment of a revolving loan 
program to benefit third parties, the following statement shall also be 
added to the comment section of Form FmHA 1940-1: ``The grantee 
furthermore agrees to use grant funds for the purposes outlined in the 
Scope of Work approved by RDA.''


Secs. 4284.542-4284.555  [Reserved]


Sec. 4284.556  Docket preparation and Letter of Conditions.

    (a) The following forms and documents will be part of the grant 
docket:
    (1) Form FmHA 400-4 for the applicant and recipients of the 
technical assistance or loans under a revolving loan fund.
    (2) Scope of work and budget prepared by the applicant.
    (3) Form FmHA 1940-1.
    (4) Resolution of the Board, if appropriate, approving the grant 
application.
    (5) Evidence of authority for individual, in the applicant's 
organization, to execute grant documents.
    (6) Evidence of fidelity bond coverage.
    (7) Form FmHA 1942-43, ``Project Summary--Community Facilities 
(Other Than Utility-Type Projects).''
    (8) Executed Forms AD-1047, ``Certification Regarding Debarment, 
Suspension, and Other Responsibility Matters--Primary Covered 
Transactions,'' and AD-1049, ``Certification Regarding Drug-Free 
Workplace Requirements (Grants) Alternative I--For Grantees Other Than 
Individuals.''
    (9) Executed certification in accordance with part 3018, appendix A 
of this title, that no Federal appropriated funds have been paid or 
will be paid for lobbying activities and Form LLL, ``Disclosure of 
Lobbying Activities.''
    (10) Proposed agreement between applicant and ultimate recipient as 
required in Sec. 4284.528(a)(2)(xiv) of this subpart (if applicable).
    (11) Class II Environmental Assessment (if applicable).
    (12) Finding of No Significant Impact (if applicable).
    (13) Form FmHA 400-8, ``Compliance Review (Nondiscrimination by 
Recipients of Financial Assistance through Farmers Home 
Administration.)''
    (b) The RDA representative will prepare a Letter of Conditions 
outlining the conditions under which the grant will be made. It will 
include those matters necessary to ensure that the proposed grant is 
completed in accordance with the terms of the scope of work and budget, 
that the grant funds are expended for authorized purposes, and that the 
requirements prescribed in parts 3015, 3016, 3017, and 3018 of this 
title are complied with. Each Letter of Conditions will contain the 
following paragraphs:
    (1) ``This letter establishes conditions which must be understood 
and agreed to by you before further consideration may be given to the 
application.''
    (2) ``This letter is not to be considered as grant approval nor as 
a representation as to the availability of funds. The docket may be 
completed on the basis of a grant not to exceed $________________ and a 
matching share by the applicant in the amount of $________________.''
    (3) ``Please complete and return the attached Form FmHA 1942-46, 
`Letter of Intent to Meet Conditions,' if you desire further 
consideration be given your application.''
    (4) ``You must certify that the activities provided under the grant 
will benefit a rural area.''
    (5) ``You must certify that at least 25 percent of the total funds 
for this project are provided as the grantee's share and meet the 
matching fund requirements of 7 CFR parts 3015 and 3016.''
    (6) ``You must certify that no Federal appropriated funds have been 
paid or will be paid for lobbying activities in accordance with 7 CFR 
part 3018, Appendix A, and execute Form LLL.''
    (7) ``You must execute Form AD-1047, `Certification Regarding 
Debarment, Suspension, and Other Responsibility Matters--Primary 
Covered Transactions,' to certify that your organization is not 
debarred or suspended from Government assistance. You also must obtain 
a certification on Form AD-1048, `Certification Regarding Debarment, 
Suspension, Ineligibility and Voluntary Exclusion--Lower Tier Covered 
Transactions,' from any person or entity you do business with as a 
result of this Government assistance that they are not debarred or 
suspended from Government assistance.''
    (8) ``You must execute Form AD-1049, `Certification Regarding Drug-
Free Workplace Requirements (Grants) Alternative I--For Grantees Other 
Than Individuals,' to certify that you will provide a drug-free 
awareness program for employees.''
    (9) ``You must 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 can result in suspension/
termination of grant funds.''
    (10) Other items in the Letter of Conditions should include those 
appropriate items relative to: maximum amount of grant; contributions; 
required project audit; evidence of compliance with all applicable 
Federal, State, and local requirements; closing instructions; DOL 
certifications; compliance with any required environmental mitigation 
measures; and other requirements.


Sec. 4284.557  Fund disbursement.

    Grantees will be reimbursed as follows:
    (a) An SF-270, ``Request for Advance or Reimbursement,'' will be 
completed by the applicant and submitted to RDA not more frequently 
than monthly.
    (b) Upon receipt of a properly completed SF-270, the funds will be 
requested through the field office terminal system. Ordinarily, payment 
will be made within 30 days after receipt of a proper request for 
reimbursement.
    (c) Grantees are encouraged to use minority banks (a bank which is 
owned by at least 50 percent minority group members) for the deposit 
and disbursement of funds. A list of minority owned banks can be 
obtained from the Office of Minority Business Enterprise, Department of 
Commerce, Washington, DC 20230.
    (d) 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. The grantee will not 
be permitted to provide its contribution at the end of the grant 
period.


Sec. 4284.558  Reporting.

    An SF-269, ``Financial Status Report,'' and a project performance 
activity report will be required of all grantees on a quarterly basis. 
A final project performance report will be required with the last SF-
269. The final report may serve as the last quarterly report. The final 
report must include a final evaluation of the project. 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 RDA. The project performance reports shall 
include, but not be limited to, the following:
    (a) A comparison of actual accomplishments to the objectives 
established for that period;
    (b) Reasons why established objectives were not met;
    (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
    (d) Objectives and timetable established for the next reporting 
period.


Secs. 4284.559-4284.570   [Reserved]


Sec. 4284.571   Audit requirements.

    The grantee will provide an audit report in accordance with subpart 
A of part 1942 of this title. The audit requirements only apply to the 
year(s) in which grant funds are received. Audits must be prepared in 
accordance with generally accepted Government auditing standards using 
the publication, ``Standards for Audit of Governmental Organizations, 
Programs, Activities and Functions.''


Sec. 4284.572   Grant servicing.

    Grants will be serviced in accordance with subpart E of part 1951 
of this title.


Sec. 4284.573   Programmatic changes.

    The 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/termination 
of grant funds.


Sec. 4284.574   Subsequent grants.

    Subsequent grants will be processed in accordance with the 
requirements set forth in this subpart.


Sec. 4284.575   Grant suspension, termination, and cancellation.

    Grants may be cancelled by RDA by use of Form FmHA 1940-10, 
``Cancellation of U.S. Treasury Check and/or Obligation.'' The RDA will 
notify the applicant, by letter, that the grant has been cancelled. A 
copy of the letter will be sent to the Regional Attorney, OGC, if the 
Regional Attorney has been involved. The applicant will be provided 
appeal rights, as appropriate, in accordance with subpart B of part 
1900 of this title. Grants may be suspended or terminated for cause or 
convenience, in accordance with parts 3015 and 3016 of this title.


Secs. 4284.576-4284.586   [Reserved]


Sec. 4284.587   Exception authority.

    The Administrator may, in individual cases, make an exception to 
any requirement or provision of this subpart which is not inconsistent 
with the authorizing statute, an applicable law, or a decision of the 
Comptroller General if the Administrator determines that application of 
the requirement or provision would adversely affect the Government's 
interest and shows how the adverse impact will be eliminated or 
minimized if the exception is made.


Sec. 4284.588   Forms and exhibits.

    Exhibits A and B and forms referenced (all available in any FmHA 
State Office) are for use in administering grants made under this 
subpart.


Secs. 4284.589-4284.599   [Reserved]


Sec. 4284.600   OMB control number.

    The 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 0570-0006. Public 
reporting burden for this collection of information is estimated to 
vary from 30 minutes to 8 hours per response, with an average of 1.85 
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 Department of Agriculture, Clearance Officer, OIRM, AG Box 
7630, Washington, D.C. 20250; and to the Office of Management and 
Budget, Paperwork Reduction Project (OMB #0570-0006), Washington, D.C. 
20503.

Exhibit A of Subpart F--Agreement of Administrative Requirements for 
Rural Technology Development Grants

    This exhibit contains information regarding the responsibilities of 
the grantee for receipt of grant funds under the Rural Technology 
Development Grant (RTDG) program. These requirements do not supersede 
the requirements for receipt of Federal funds as stated in 7 CFR parts 
3015 and 3016; however, specific areas related to the program are cited 
below.
    In consideration for the RTDG grant by RDA, grantee agrees to:
    1. Cause the RTDG program to be completed within the total sums 
available to it, including grant funds, in accordance with the scope of 
work and any necessary modifications thereof prepared by grantee and 
approved by grantor.
    2. Permit periodic inspection of the program operations by a 
representative of grantor.
    3. Make the program available to all persons in grantee's service 
area without regard to race, color, national origin, religion, sex, 
marital status, age, physical or mental handicap.
    4. Not use grant funds to replace any financial support previously 
provided or assured from any other source. The grantee agrees that the 
general level of expenditure by the grantee for the benefit of program 
area and/or program covered by this agreement shall be maintained and 
not reduced as a result of the Federal share funds received under this 
grant.
    5. Provide financial management systems which will include:
    (a) Accurate, current, and complete disclosure of the financial 
result of each grant.
    (b) Records which identify adequately the source and application of 
funds for grant-supporting activities. Those records shall contain 
information pertaining to grant awards and authorizations, obligations, 
unobligated balances, assets, liabilities, outlays, and income.
    (c) Effective control over and accountability for all funds. 
Grantee shall adequately safeguard all such assets and shall ensure 
that they are used solely for authorized purposes.
    (d) Accounting records supported by source documentation.
    6. 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. Microfilm copies may be substituted in lieu of original 
records. The grantor 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 
audits, examinations, excerpts, and transcripts.
    7. Provide an audit report prepared in accordance with generally 
accepted Government auditing standards using the publication, 
``Standards for Audit of Governmental Organizations, Programs, 
Activities and Functions.''
    8. Provide grantor with such periodic reports as it may require and 
permit periodic inspection of its operations by a designated 
representative of the grantor.
    9. Execute Form FmHA 400-4, ``Assurance Agreement,'' and any other 
agreements required by grantor to implement the civil rights 
requirements. If any such form has been executed by grantee as a result 
of a grant being made to grantee by grantor contemporaneously with the 
making of this grant, another form of the same type need not be 
executed in connection with this grant.
    10. That upon any default under its representations or agreements 
set forth in this instrument, grantee, at the option and the demand of 
grantor, will, to the extent legally permissible, repay to grantor 
forthwith the original principal amount of the grant stated herein 
above, with interest equal to the rate of interest paid on U.S. 26-week 
Treasury Bills adjusted quarterly from the date of the default. The 
provisions of this exhibit may be enforced by grantor at its option and 
without regard to prior waivers by it of previous defaults of grantee, 
by judicial proceedings to require specific performance of the terms of 
this exhibit, or by such other proceedings in the law or equity in 
either Federal or State courts as may be deemed necessary by grantor to 
assure compliance with the provisions of this exhibit and the laws and 
regulations under which this grant is made.
    11. That no 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.
    12. That all non-confidential information resulting from its 
activities shall be made available to the general public on an equal 
basis.
    13. That the purpose and scope of work for which this grant is made 
shall not duplicate programs for which monies have been received, are 
committed, or are applied to from other sources (public or private).
    14. That grantee shall relinquish any and all copyrights and/or 
privileges to the materials developed under this grant as published in 
whole or in part. The material shall contain a notice and be identified 
by language to the following effect: ``The material is the result of 
tax-supported research and as such is not copyrightable. It may be 
freely reprinted with the customary crediting of the source.''
    15. That the grantee shall abide by the policies promulgated in the 
USDA Uniform Assistance Regulations, 7 CFR Parts 3015 and 3016, which 
provides standards for use by grantee in establishing procedures for 
the procurement of supplies, equipment, and other services with Federal 
grant funds.
    16. Obtain prior approval from grantor for use of grant funds for 
uses or amounts not consistent with the approved scope of work and 
budget.
    17. That the grantee, except for States, will remit interest earned 
on grant funds deposited in an interest bearing account in accordance 
with the USDA Uniform Assistance Regulation, 7 CFR Parts 3015 and 3016.
    18. Grantee will comply with property management standards 
established by 7 CFR Parts 3015 and 3016 for personal property. 
``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. 
``Nonexpendable personal property'' means tangible personal property 
having a useful life of more than 1 year and an acquisition cost of 
$300 or more per unit. A grantee may use its own definition of 
nonexpendable personal property provided that such definition would at 
least include all tangible personal property as defined above. 
``Expendable personal property'' refers to all tangible personal 
property other than nonexpendable property. When nonexpendable property 
is acquired by a grantee with project funds, title shall not be taken 
by the Federal Government but shall be vested in the grantee subject to 
the following conditions.
    (a) Right to transfer title. For items of real or nonexpendable 
personal property having a unit acquisition cost of $1,000 or more, RDA 
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 reservation 
shall be subject to the following standards:
    (i) The property shall be appropriately identified in the grant or 
otherwise made known to the grantee in writing.
    (ii) RDA shall issue disposition instructions within 120 calendar 
days after the end of the Federal support of the project for which it 
was acquired. If RDA fails to issue disposition instructions within the 
120 calendar day period, the grantee shall apply the standards of 
paragraph 18. (b) of this exhibit.
    (iii) When RDA exercises its right to take title, the personal 
property shall be subject to the provisions for federally owned 
nonexpendable property discussed in paragraphs 18. (b) and (c) of this 
exhibit.
    (iv) When title is transferred either to the Federal Government or 
to a third party and the grantee is instructed to ship the property 
elsewhere, the grantee shall be reimbursed by the benefiting Federal 
agency with an amount which is computed by applying the percentage of 
the grantee's participation in the cost of the original grant project 
or program to the current fair market value of the property, plus any 
reasonable shipping or interim storage costs incurred.
    (b) Use of other nonexpendable personal property for which the 
grantee has title.
    (i) The grantee shall use the property 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 it is no 
longer needed for the original project or program, the grantee shall 
use the property in connection with its other federally sponsored 
activities, in the following order of priority:
    (1) Activities sponsored by RDA.
    (2) Activities sponsored by other Federal agencies.
    (ii) Shared use. During the time that nonexpendable personal 
property is held for use on the project or program for which it was 
acquired, the grantee 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 property was originally acquired. 
First preference for such other use shall be given to projects or 
programs sponsored by RDA; second preference shall be given to projects 
or programs sponsored by other Federal agencies. If the property is 
owned by the Federal Government, use for other activities not sponsored 
by the Federal Government shall be permissible if authorized by RDA. 
User charges should be considered, if appropriate.
    (c) Disposition of nonexpendable personal property. When the 
grantee no longer needs the property as provided in paragraph 18(b) of 
this exhibit, the property may be used for other activities in 
accordance with the following standards:
    (i) Personal property with a unit acquisition cost of less than 
$1,000. The grantee may use the property for other activities without 
reimbursement to the Federal Government or sell the property and retain 
the proceeds.
    (ii) Nonexpendable personal property with a unit acquisition cost 
of $1,000 or more. The grantee may retain the property for other use 
provided that compensation is made to RDA or its successor. The amounts 
of compensation shall be computed by applying the percentage of Federal 
participation in the cost of the original project or program to current 
fair market value of the property. If the grantee has no need for the 
property and the property has further use value, the grantee shall 
request disposition instructions from the original grantor agency.
    (iii) RDA shall determine whether the property can be used to meet 
the Agency's requirements. If no need exists within RDA, the General 
Services Administration Federal Property Management Regulations will be 
used by RDA to determine whether a need for the property exists in 
other Federal *agencies. RDA shall issue instructions to the grantee no 
later than 120 days after the grantee request and the following 
procedures shall govern:
    (1) If so instructed or if disposition instructions are not issued 
within 120 calendar days after the grantee's request, the grantee shall 
sell the property and reimburse RDA an amount computed by applying the 
percentage of the grantor participation in the grant program to the 
sales proceeds. However, the grantee shall be permitted to deduct and 
retain from the Federal share $100 or 10 percent of the proceeds, 
whichever is greater, for the grantee's selling and handling expenses.
    (2) If the grantee is instructed to dispose of the property other 
than as described in paragraphs 18. (b) and (c) of this exhibit, the 
grantee shall be reimbursed by RDA for such costs incurred in its 
disposition.
    (3) Property management standards for nonexpendable personal 
property. The grantee's property management standards for nonexpendable 
personal property shall include the following procedural requirements:
    (a) Property records shall be maintained accurately and shall 
include:
    (i) A description of the property.
    (ii) Manufacturer's serial number, model number, Federal stock 
number, National stock number, or other identification number.
    (iii) Sources of the property including grant or other agreement 
number.
    (iv) Whether title vests in the grantee or the Federal Government.
    (v) Acquisition date (or date received, if the property was 
furnished by the Federal Government) and costs.
    (vi) Percentage (at the end of the budget year) of Federal 
participation in the cost of the project or program for which the 
property was acquired. (Not applicable to property furnished by the 
Federal Government).
    (vii) Location, use, and condition of the property and the date the 
information was reported.
    (viii) Unit acquisition cost.
    (ix) Ultimate disposition data, including date of disposal and 
sales price or the method used to determine current fair market value 
where a grantee compensates the Federal agency for its share.
    (b) Property owned by the Federal Government must be marked to 
indicate Federal ownership.
    (c) A physical inventory of property shall be taken and the results 
reconciled with the property records at least once every 2 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 grantee shall, in 
connection with the inventory, verify the existence, current 
utilization, and continued need for the property.
    (d) A control system shall be in effect to ensure adequate 
safeguards to prevent loss, damage, or theft of the property. Any loss, 
damage, or the theft of nonexpendable property shall be investigated 
and fully documented; if the property was owned by the Federal 
Government, the grantee shall promptly notify RDA.
    (e) Adequate maintenance procedures shall be implemented to keep 
the property in good condition.
    (f) Where the grantee is authorized or required to sell the 
property, proper sales procedures shall be established which would 
provide for competition to the extent practicable and result in the 
highest possible return.
    (g) Expendable personal property shall vest in the grantee upon 
acquisition. If there is a residual inventory of such property 
exceeding $1,000 in total aggregate fair market value upon termination 
or completion of the grant and if the property is not needed for any 
other federally sponsored project or program, the grantee shall retain 
the property for use on nonfederally sponsored activities or sell it, 
but must in either case compensate the Federal Government for its 
share. The amount of compensation shall be computed in the same manner 
as nonexpendable personal property.
    This exhibit covers the following described personal property and 
any additional property acquired wholly or in part with grant funds 
(use continuation sheets as necessary):
    19. To the following termination provisions:
    (a) Termination for cause: The grantor agency may terminate any 
grant in whole, or in part, at any time before the date of completion, 
whenever it is determined that the grantee has failed to comply with 
the conditions of the grant. The grantor agency shall promptly notify 
the grantee in writing of the determination and the reasons for the 
termination, together with the effective date.
    (b) Termination for convenience: The grantor agency or grantee may 
terminate grants in whole, or in part, when both parties agree that the 
continuation of the program would not produce beneficial results 
commensurate with the further expenditure of funds. The two parties 
shall agree upon the termination conditions, including the effective 
date and, in the case of partial terminations, the portion to be 
terminated. The grantee shall not incur new obligations for the 
terminated portion after the effective date, and shall cancel as many 
outstanding obligations as possible. The grantor agency shall allow 
full credit to the grantee for the Federal share of the noncancelable 
obligations properly incurred by the grantee prior to termination.
    RDA agrees that it will:
    1. Assist grantee, within available appropriations, with such 
technical assistance as grantor deems appropriate in planning the 
program and coordinating the plan with local official comprehensive 
plans and with any State or area plans for the area in which the 
program is located.
    2. At its sole discretion, RDA may at any time give any consent, 
deferment, subordination, release, satisfaction, or termination of any 
or all of grantee's grant obligations, with or without valuable 
consideration, upon such terms and conditions as RDA may determine to 
be:
    (a) Advisable to further the purposes of the grant or to protect 
the Government's financial interest therein; and
    (b) Consistent with both the statutory purposes of the grant and 
the limitations of the statutory authority under which it is made.

----------------------------------------------------------------------
Name of Grantee

----------------------------------------------------------------------
Title

----------------------------------------------------------------------
Date

----------------------------------------------------------------------
RDA Approval Official

----------------------------------------------------------------------
Title

----------------------------------------------------------------------
Date

    Dated: August 4, 1994.
Bob J. Nash,
Under Secretary, Small Community and Rural Development.
[FR Doc. 94-19686 Filed 8-11-94; 8:45 am]
BILLING CODE 3410-07-P