[Federal Register Volume 62, Number 152 (Thursday, August 7, 1997)]
[Rules and Regulations]
[Pages 42385-42391]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20738]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 /
Rules and Regulations
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DEPARTMENT OF AGRICULTURE
Rural Housing Service
Rural Business-Cooperative Service
Rural Utilities Service
Farm Service Agency
7 CFR Parts 1901, 1951, and 4284
RIN 0570-AA20
Rural Cooperative Development Grants
AGENCIES: Rural Housing Service, Rural Business-Cooperative Service,
Rural Utilities Service, and Farm Service Agency, USDA.
ACTION: Final rule.
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SUMMARY: The Rural Business-Cooperative Service (RBS) revises its
regulations published previously under Rural Technology and Cooperative
Development Grants (RTCDG). This action is necessary to comply with the
Federal Agriculture Improvement and Reform Act of 1996 (the 1996 Act)
(Pub. L. 104-127), which removed ``technology'' from RTCDG, thereby
directing the focus of the program specifically to cooperative
development. The 1996 Act also clarified that public bodies were not
eligible applicants, and modified application requirements and
applicant selection criteria. This action will comply with legislation
which authorizes grants for establishing and operating centers for
rural cooperative development. Exhibit A will be removed since it
contains administrative material. The intended effect of this action is
to improve the economic condition of rural areas through cooperative
development.
EFFECTIVE DATE: August 7, 1997.
FOR FURTHER INFORMATION CONTACT: James E. Haskell, Assistant Deputy
Administrator, Cooperative Services, Rural Business-Cooperative
Service, U.S. Department of Agriculture, Stop 3250, Room 4016, South
Agriculture Building, 1400 Independence Avenue, SW., Washington, DC
20250. Telephone (202) 720-8460.
SUPPLEMENTARY INFORMATION:
Classification
We are issuing this final rule in conformance with Executive Order
12866. The Office of Management and Budget has determined that it is
not a ``significant regulatory action.''
Environmental Impact Statement
This document has been reviewed in accordance with 7 CFR part 1940,
subpart G, ``Environmental Program.'' RBS 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, Public Law 91-190, an
Environmental Impact Statement is not required.
Executive Order 12988
This final rule has been reviewed under Executive Order 12988,
Civil Justice Reform. In accordance with this rule: (1) All state and
local laws and regulations that are in conflict with this rule will be
preempted; (2) no retroactive effect will be given to this rule; and
(3) administrative proceedings in accordance with the regulations of
the Agency at 7 CFR part 11, must be exhausted before bringing suit in
court challenging action taken under this rule unless these regulations
specifically allow bringing suit at an earlier time.
Intergovernmental Review
This program is listed in the Catalog of Federal Domestic
Assistance under number 10.771 and is subject to the provisions of
Executive Order 12372, which requires intergovernmental consultation
with state and local officials. RBS has conducted intergovernmental
consultation in the manner delineated in RD Instruction 1940-J.
National Performance Review
This regulatory action is being taken as part of the National
Performance Review program to eliminate unnecessary regulations and
improve those that remain in force.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, RBS
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, or tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. When such a statement is needed for a rule, section 205 of
the UMRA generally requires RBS to identify and consider a reasonable
number of regulatory alternatives and adopt the least costly, more
cost-effective or least burdensome alternative that achieves the
objectives of the rule. This rule contains no Federal mandates (under
the regulatory provisions of Title II of the UMRA) for State, local,
and tribal governments or the private sector. Thus this rule is not
subject to the requirements of sections 202 and 205 of the UMRA.
Regulatory Flexibility Act
The undersigned has determined and certified by signature of this
document that this rule will not have a significant economic impact on
a substantial number of small entities since this rulemaking action
does not involve a new or expanded program. The removal of
``technology'' from RTCDG substantially narrows the scope of this
program. No provision of this rule requires action on the part of small
businesses not required of large businesses. This rule requires no
action on the part of any applicant not previously required by an
applicant. Therefore, a Regulatory Impact Analysis was not completed.
Paperwork Reduction Act
The information collection and recordkeeping requirements contained
in this regulation were previously approved by the Office of Management
and Budget (OMB) under the provisions of 44 U.S.C. chapter 35 and were
assigned OMB control number 0570-0006, in accordance with the Paperwork
Reduction Act of 1995. Under the Paperwork Reduction Act of 1995, no
[[Page 42386]]
persons are required to respond to a collection of information unless
it displays a valid OMB control number. The valid OMB control number
assigned to the collection of information in these final regulations is
displayed at the end of the affected section of the regulations. This
final rule does not impose any new information or recordkeeping
requirements from those approved by OMB.
Background
The RTCDG program was established by rule on August 12, 1994, (59
FR 41386-98) and was authorized by section 310B(f) through (h) of the
Consolidated Farm and Rural Development Act (7 U.S.C. Sec. 1932). The
1996 Act removed ``technology'' from RTCDG, thereby directing the focus
of the program specifically to cooperative development. The 1996 Act
also clarified that public bodies were not eligible applicants, and
modified application requirements and applicant selection criteria. The
primary objective of the Rural Cooperative Development Grant (RCDG)
program is to improve the economic condition of rural areas through
cooperative development. The program is administered through Rural
Development State Offices acting on behalf of RBS. RBS is one of the
successors of the Rural Development Administration pursuant to the
Department of Agriculture Reorganization Act of 1994 (Pub. L. 103-354).
Discussion of Public Comments
RBS published a proposed rule in the Federal Register on March 26,
1997, (62 FR 14354) and asked for comments on or before April 25, 1997.
The Agency received a total of eight comments. The commenters
represented the National Cooperative Business Association, Rocky
Mountain Farmers Union, North Dakota Association of Rural Electric
Cooperatives and North Dakota Association of Telephone Cooperatives,
the Federation of Southern Cooperatives/Land Assistance Fund (two
commenters), North Dakota State University, Washington State
University, and the North Dakota Farmers Union. One respondent did not
comment directly on the proposed rule but, instead strongly supported
the comments submitted by another commenter.
Six respondents were concerned about the definition of
``cooperative development'' under Sec. 4284.504 which includes the
language ``* * * promote the development of new services and products *
* * new processes * * * or new enterprises * * *'' The respondents felt
this definition should be clarified to indicate that the activities
undertaken by a cooperative need not be completely different from those
undertaken by other cooperatives. They also felt this definition should
more clearly define activities involved in cooperative development,
including technical assistance and development of business plans. The
agency agrees with these comments and has changed the definition of
``cooperative development'' accordingly.
Several respondents suggested that under Sec. 4284.516, which
provides that grant funds may not be used to duplicate current services
or replace or substitute support previously provided, may preclude
centers from working on projects already underway. The agency
understands and appreciates this concern and the fact that cooperative
development is a long term process. The intent of the wording in this
section is not to preclude centers from working on projects already
underway. The agency did not modify this section, but will remain
cognizant of the respondents' concern.
Most of the respondents felt the definition of ``project'' under
Sec. 4284.504 was ambiguous in drawing a distinction between what a
center is and what a project is. A few of these respondents suggested
that the definition should clarify that a center does projects and uses
federal funds to engage in those projects. The agency agrees, and has
modified the definition of ``project'' to provide that clarity. The
clarification is also used under Sec. 4284.527(e) to change from grant
to project.
Five respondents suggested that the provisions addressing grant
purposes under Sec. 4284.515 should be clarified to indicate that
eligible activities of centers assisted under the program must be
linked to the development of cooperatives. Four of these respondents
further suggested that each provision (a through e) should end with the
words ``for the purpose of cooperative development'' after the word
``center.'' While the agency feels the proposed rule is adequate in
focusing the program on cooperative development, it has modified
Sec. 4284.515 in the manner suggested.
The provision requiring applicants to file a ``Request for
Environmental Information'' under Sec. 4284.527(b)(3) for each project
identified in their plans that involve grants to provide financial
assistance to third-party recipients drew comments from six
respondents. They felt the provision was unduly burdensome for
applicants because cooperative development projects have potential
impacts in many areas so the cost of gathering such information to
complete this form would greatly exceed any possible benefits. The
agency feels the information contained in the ``Request for
Environmental Information'' is legally required and therefore
Sec. 4284.527(b)(3) has been retained in the final rule.
Six respondents felt the provision requiring applicants to collect
evidence of support from each affected governmental unit under the
preapplications portion of Sec. 4284.528(a)(2)(v) is unduly burdensome
for applicants. This rule was not amended because all affected
governmental bodies should be on record as supporting the project. The
time spent documenting this support will be worth the time spent in
order to avoid misunderstandings later.
Two respondents thought the selection criteria under Sec. 4284.540
were satisfactory. Other respondents did not comment on this section.
One respondent did not comment on any of the provisions in the
proposed rule, but instead requested information about the program.
The provision addressing subsequent grants under Sec. 4284.574
received comments from five respondents. Each suggested the provision
be clarified to state that a second application need not be filed for
assistance under the program to be awarded for the following year. The
agency did not modify this provision since it currently states that,
``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.''
A definition for ``regionally operated'' has been added and
definitions for ``Urbanized area'' and ``Urbanizing area'' have been
slightly modified to make them consistent with ``Rural and rural
area.''
Internal management procedures have been removed from the
regulations but will appear in internal agency instructions.
Pursuant to the Administrative Procedure Act, 5 U.S.C. 553, good
cause is found for making this final rule effective less than 30 days
after publication of this document in the Federal Register because the
appropriations allocated to the program must be expended before the end
of Fiscal Year 1997, and there is a critical need--recognized by both
the Executive and Legislative Branches--to immediately assist rural
America through the development of self-help cooperative organizations.
[[Page 42387]]
List of Subjects
7 CFR Part 1901
Civil rights, Compliance reviews, Fair housing, Minority groups.
7 CFR Part 1951
Account servicing, Grant programs--Housing and community
development, Reporting requirements, Rural areas.
7 CFR Part 4284
Business and industry, Grant programs--Housing and community
development, Rural areas.
Accordingly, 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: 5 U.S.C. 301, 7 U.S.C. 1989, 40 U.S.C. 442, 42 U.S.C.
1480, 42 U.S.C. 2942.
Subpart E--Civil Rights Compliance Requirements *C*
Sec. 1901.204 [Amended]
2. Section 1901.204 is amended in paragraph (a)(27) by removing the
words ``Technology and.''
PART 1951--SERVICING AND COLLECTIONS
3. The authority citation for part 1951 continues to read as
follows:
Authority: 5 U.S.C. 301, 7 U.S.C. 1989, 42 U.S.C. 1480.
Subpart E--[Revised]
4. The title of subpart E is amended by revising the word
``Insured'' to read ``Direct.''
Sec. 1951.201 [Amended]
5. Section 1951.201 is amended in the first sentence by revising
the word ``Insured'' to read ``Direct'' and by revising the words
``Rural Technology and'' to read ``Rural.''
PART 4284--GRANTS
6. The authority citation for part 4284 continues to read as
follows:
Authority: 5 U.S.C. 301, 7 U.S.C. 1989, 16 U.S.C. 1005.
Subpart F--Rural Cooperative Development Grants
7. Part 4284, subpart F is revised to read as follows:
Subpart F--Rural Cooperative 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--4284.556 [Reserved]
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--4284.599 [Reserved]
4284.600 OMB control number.
Subpart F--Rural Cooperative Development Grants
Sec. 4284.501 Purpose.
(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.
(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.
(c) Copies of all forms and Instructions referenced in this subpart
are available in the RBS National Office or any Rural Development State
Office.
Sec. 4284.502 Policy.
The 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.
Sec. 4284.503 [Reserved]
Sec. 4284.504 Definitions.
Agency--Rural Business-Cooperative Service (RBS) or a successor
agency.
Approval official--Any authorized agency official.
Center--The entity established or operated by the grantee for rural
cooperative development.
Cooperative--A user-owned and controlled business from which
benefits are derived and distributed equitably on the basis of use.
Cooperative development--The 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.
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, or gains in other
measurements of economic activity, such as land values.
Nonprofit institution--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--A 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.
Public body--Any 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.
RBS--The Rural Business-Cooperative Service, an agency of the
United States Department of Agriculture, or a successor agency.
Regionally operated--A regionally operated program includes
programs that cover or are eligible to cover two or more counties.
Rural and rural area--Includes 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.
Rural Development--Rural Development mission area.
Servicing office--Any Rural Development State Office.
State--Any of the 50 States, the District of Columbia, the
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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.
Subcenter--A unit of a center acting under the same direction as
and having a purpose consistent with that of the center.
Urbanized area--An 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.
Urbanizing area--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 (e.g., government, educational, health,
and recreational facilities) and economic structure (e.g., business,
industry, tax base, and employment opportunities) are not primarily
dependent on the city and its immediately adjacent urbanized areas.
Sec. 4284.505 Applicant eligibility.
(a) Grants may be made to nonprofit corporations and institutions
of higher education. Grants may not be made to public bodies.
(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.
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
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:
(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.
(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.
(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.
(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.
(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 the purpose of
cooperative development.
Sec. 4284.516 Ineligible grant purposes.
Grant funds may not be used to:
(a) Pay more than 75 percent of relevant project or administrative
costs;
(b) Duplicate current services or replace or substitute support
previously provided;
(c) Pay costs of preparing the grant application package;
(d) Pay costs incurred prior to the effective date of the grant;
(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;
(f) Fund political activities; or
(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.
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 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.
(b) Environmental requirements--(1) General applicability. 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
Secs. 1940.303 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.
[[Page 42389]]
(2) Technical assistance. An application for a project exclusively
involving technical assistance is generally excluded from the
environmental review process by Sec. 1940.310(e)(1) of this title.
However, as further specified in Sec. 1940.333 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.
(3) Applications for grants to provide other than technical
assistance to third-party recipients. 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 Sec. 4284.541), no public notification requirements 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
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.
(c) Government-wide debarment and suspension (non-procurement) and
requirements for drug-free workplace. 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.
(d) Restrictions on lobbying. All grants must comply with the
lobbying restrictions contained in part 3018 of this title.
(e) Excess capacity or transfer of employment. 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.
(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, 3017, 3019, and 3051 of this
title, as appropriate, and established RBS guidelines.
(g) Uniform Relocation Assistance and Real Property Acquisition
Policies Act. All projects must comply with the requirements contained
in part 21 of this title.
(h) Flood or mudslide hazard area precautions. 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.
(i) Termination of federal requirements. 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.
(j) Intergovernmental review. 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. These requirements should be
completed in accordance with ``Intergovernmental Review of Department
of Agriculture Programs and Activities,'' part 3015, subpart V of this
title.
Sec. 4284.528 Application processing.
(a) Preapplications. (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.
(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) 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.
(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.
(iv) a budget and description of the accounting system to be used.
(v) the area to be served, identifying within that area each
governmental unit (i.e., town, county, etc.) affected by the proposed
project. Evidence of support and concurrence from each affected
governmental unit must be provided by
[[Page 42390]]
either a resolution or a written statement from the chief elected local
official.
(vi) a listing of cooperative businesses to be assisted or created.
(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.
(viii) the number of months duration of the project and the
estimated time it will take from grant approval to beginning of
service.
(ix) the method and rationale used to select the areas or
businesses that will receive the service.
(x) a brief description of how the work will be performed and
whether organizational staff, consultants or contractors will be used.
(xi) an evaluation method to be used by the applicant to determine
if objectives of the proposed activity are being accomplished.
(xii) a brief plan that contains the following provisions and
describes how the applicant will meet these provisions:
(A) A provision that substantiates how 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
development of new cooperatives or improvement of existing
cooperatives.
(C) Supporting data from established official independent sources
along with any explanatory documentation.
(D) A description of the activities that the applicant will carry
out to accomplish such objective.
(E) A description of the proposed activities to be funded under
this subpart.
(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.
(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.
(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.
(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.
(J) Provisions for:
(1) monitoring and evaluating its activities; and
(2) accounting for money received and expended by the applicant
under this subpart.
(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.
(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:
(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.
(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.''
(C) Provisions that the ultimate recipient will execute an ``Equal
Opportunity Agreement,'' and an ``Assurance Agreement.''
(D) Documentation that the ultimate recipient understands its
responsibilities to the applicant.
(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.
(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.
(G) Narrative addressing all items in Sec. 4284.540(a) of this
subpart regarding grant selection criteria.
(b) Applications. Upon notification that the applicant has been
selected for funding, the following will be submitted to Rural
Development by the applicant:
(1) Proposed scope of work, detailing the proposed activities to be
accomplished and timeframes for completion of each activity.
(2) Other information requested by RBS 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 the invitation
for applications, Rural Development may discontinue consideration of
the preapplication.
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 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.
(a) Preference will be given to applications that:
(1) demonstrate a proven track record in administering a nationally
coordinated, regionally or State-wide operated project;
(2) demonstrate previous expertise in providing technical
assistance in rural areas;
(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;
(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;
(5) commit to providing technical assistance and other services to
underserved and economically distressed rural areas of the United
States;
(6) commit to providing greater than a 25 percent matching
contribution with private funds and in-kind contributions;
(7) evidence transferability or demonstration value to assist rural
areas outside of project area; and
(8) demonstrate that any cooperative development activity is
consistent with positive environmental stewardship.
(b) Each preapplication for assistance will be carefully reviewed
in accordance
[[Page 42391]]
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.
Sec. 4284.541 Grant approval, fund obligation, grant closing, and
third-party financial assistance.
The 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.
Secs. 4284.542-4284.556 [Reserved]
Sec. 4284.557 Fund disbursement.
Grants will be disbursed as follows:
(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. 104-
134).
(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.
Sec. 4284.558 Reporting.
A ``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:
(a) A comparison of actual accomplishments to the objectives
established for that period;
(b) Reasons why established objectives (if any) 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
Sec. 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.''
Sec. 4284.572 Grant servicing.
Grants will be serviced in accordance with part 1951, subpart E 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 or
termination of grant funds.
Sec. 4284.574 Subsequent grants.
Subsequent 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.
Sec. 4284.575 Grant suspension, termination, and cancellation.
Grants 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.
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, if the Administrator
determines that application of the requirement or provision would
adversely affect the Government's interest.
Secs. 4284.588-4284.599 [Reserved]
Sec. 4284.600 OMB control number.
The 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 0570-0006. You are not
required to respond to this collection of information unless it
displays a valid OMB control number.
Dated: July 30, 1997.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 97-20738 Filed 8-6-97; 8:45 am]
BILLING CODE 3410-XY-U