[Federal Register Volume 64, Number 117 (Friday, June 18, 1999)]
[Rules and Regulations]
[Pages 32974-32976]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15499]



[[Page 32973]]

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Part IV





Department of Commerce





_______________________________________________________________________



Economic Development Administration



_______________________________________________________________________



13 CFR Part 301



Revision to Implement Economic Development Reform Act of 1998--Grant 
Rate Eligibility; Disaster Assistance Based on High Unemployment; Final 
Rule

  Federal Register / Vol. 64, No. 117 / Friday, June 18, 1999 / Rules 
and Regulations  

[[Page 32974]]



DEPARTMENT OF COMMERCE

Economic Development Administration

13 CFR Part 301

[Docket No. 990106003-9157-02]
RIN 0610-AA56


Revision to Implement Economic Development Reform Act of 1998--
Grant Rate Eligibility: Disaster Assistance Based on High Unemployment

AGENCY: Economic Development Administration (EDA), Department of 
Commerce (DoC).

ACTION: Interim rule.

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

SUMMARY: The purpose of this interim-final rule is to further amend 
regulations of the Economic Development Administration (EDA) to 
implement the amendment to and replacement of the Public Works and 
Economic Development Act of 1965, as amended, by the Economic 
Development Reform Act of 1998 (PWEDA). This rule amends disaster grant 
rate eligibility requirements to correct currently listed grant rates 
and to add a new category of disaster grant rate eligibility. These 
changes are intended to more closely track the statutory language in 
PWEDA concerning supplemental appropriations, and to continue EDA's 
mission in providing disaster assistance under its regular program 
authorities. Changes are also being made so that grant rate eligibility 
for high unemployment is based on a stated percentage of the 
unemployment rate, similar to the grant rate eligibility based upon per 
capita income.

DATES: Effective date: June 18, 1999.
    Comment date: Comments are due on or before July 19, 1999. EDA 
intends to publish a final rule in the summer of 1999 and will consider 
comments received on this interim-final rule as well as those received 
in response to the interim-final rule, 64 FR 5347, February 3, 1999.

ADDRESSES: Send comments to Edward M. Levin, Chief Counsel, Economic 
Development Administration, U.S. Department of Commerce, Herbert C. 
Hoover Building, 1401 Constitution Avenue, NW, Room 7005, Washington, 
DC 20230.

FOR FURTHER INFORMATION CONTACT: Edward M. Levin, Chief Counsel, 
Telephone Number 202-482-4687, fax 202-482-5671, e-mail [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The Economic Development Administration (EDA) was reauthorized for 
a five year period by legislation enacted on November 13, 1998. 
Congress had not authorized the agency since 1982. This is a major 
legislative accomplishment, which will create stability and growth 
opportunities for EDA to better serve economically distressed 
communities across the country.
    EDA continues to take steps towards improving its program delivery, 
policies and procedures, and to be more responsive to those whom it 
serves. In step with the National Performance Review and Paperwork 
Reduction Act, EDA completely revised its regulations, (see 64 FR 5347, 
February 3, 1999) thereby creating fewer burdens on and making them 
more accessible to the public. This interim-final rule continues EDA's 
efforts in this regard by announcing an immediate response to comments 
received on EDA's disaster and unemployment grant rate eligibility 
requirements, prior to publication of EDA's final rule in the summer of 
1999.

Comments on the Interim-Final Rule

    Comments were requested on EDA's interim-final rule published at 64 
FR 5347, February 3, 1999. The sixty (60) day comment period ended on 
April 5, 1999. EDA inadvertently overlooked certain matters concerning 
grant rate eligibility criteria for disasters. EDA received public 
comments suggesting that relative distress, like that presented in the 
table for per capita income, should likewise be the criteria for 
unemployment distress.

Description of Major Changes

    EDA is amending its rules by revising 13 CFR 301.4(b) Grant Rates, 
by clarifying and modifying the paragraphs describing the maximum 
Federal grant rate eligibility of projects located in Federally-
declared disaster areas and for areas suffering from high unemployment 
distress.
    The current regulations purport to permit a 100 percent maximum 
grant rate for all projects located in Federally-declared disaster 
areas for which EDA receives an application for assistance within one 
year of the date of declaration, and for which the President 
established a rate of Federal participation, based on the public 
assistance grant rate of the Federal Emergency Management Agency (FEMA) 
for the disaster, of greater than 80 percent. That language is too 
broad, because the legislative authorization for 100 percent Federal 
grant rates is limited to (1) projects under part 308 (i.e., Economic 
Adjustment projects authorized by section 209 of PWEDA, (2) for which 
funds have been appropriated as authorized by section 703 of PWEDA, 
i.e., a supplemental appropriation. Moreover, while the result may be 
the same because the President establishes the FEMA grant rate, it 
would be more accurate to refer to ``Presidentially-declared'' rather 
than ``Federally-declared'' as the authority is limited to the Stafford 
Act, where the President makes the disaster declaration.
    The current regulations also provide for an 80 percent maximum 
grant rate for other projects located in Federally-declared disaster 
areas for which EDA receives an application for assistance within one 
year of the date of declaration. That language is also overbroad, 
because it does not limit grant rates in excess of 50 percent to 
situations (other than those authorized by section 703 of PWEDA) where 
the applicant cannot provide the required non-Federal share, as is 
required by section 205 of PWEDA.
    EDA is correcting the respective paragraphs, the second and fifth 
boxes of the table in Sec. 301.4(b), to reflect the statutory 
requirements.
    EDA has determined to modify the regulations by adding an 
additional paragraph to permit a maximum Federal grant rate of 80 
percent for projects in other Federally-declared disaster areas, when 
the Assistant Secretary determines that the applicant cannot provide 
the required non-Federal share because of the disaster's impact on the 
economic situation.
    In addition, EDA has determined that in some situations one year is 
an insufficient length of time after the declaration of disaster, for 
the receipt of an application for assistance. For instance, following 
the Midwest Floods of 1993, in many areas the floodwaters did not 
recede for many months. Therefore, in all three disaster grant rate 
paragraphs, an 18 month period is established for the filing of an 
application after the disaster declaration.
    The current regulations provide a two-part test for areas seeking a 
grant rate greater than 50 percent, based upon high unemployment; the 
area must meet both a relative standard--a percentage of the national 
average--and an absolute standard, a set unemployment rate. EDA 
received public comments suggesting that relative distress, like that 
presented in the table for per capita income, should likewise be the 
criteria for unemployment distress for fairness in determining distress 
factors. Therefore,

[[Page 32975]]

we have deleted references to unemployment rates of at least 11, 9 or 
7.5 percent so that unemployment distress will be based upon absolute 
percentages of the 24 month unemployment rate of at least 225, 180 or 
150 percent of the national average.
    The maximum grant rates themselves remain the same with the 
addition of new item (6).

Executive Order 12866 and 12875

    This interim-final rule in itself is not significant for purposes 
of E.O. 12866, Regulatory Planning and Review, though the underlying 
full regulation has been determined to be significant. In addition, it 
has been determined that, consistent with the requirements of E.O. 
12875, Enhancing Intergovernmental Partnership, this interim-final rule 
will not impose any unfunded mandates upon State, local, and tribal 
governments.

Regulatory Flexibility Act

    Since notice and an opportunity for comment are not required to be 
given for the rule under 5 U.S.C. 553 or any other law, under sections 
603(a) and 604(a) of the Regulatory Flexibility Act (5 U.S.C. 601-612) 
no initial or final Regulatory Flexibility Analysis is required, and 
none has been prepared.

Paperwork Reduction Act

    This interim-final rule modifying the maximum grant rate 
eligibility in 13 CFR 301.4(b) does not in itself affect information 
collection or recordkeeping requirements. Nevertheless, the underlying 
full regulation imposes new information collection or recordkeeping 
requirements under the Paperwork Reduction Act of 1980 (44 U.S.C. 
3501), as amended, and has been cleared under OMB's Emergency 
Clearances process under OMB approval numbers: 0610-0093; 0610-0094; 
0610-0095; 0610-0096 and will expire on July 31, 1999. To remain 
effective after such expiration date, EDA must receive OMB's final 
clearance and display a currently valid OMB control number. If such 
final clearance is not obtained after the expiration date of the 
Emergency Clearance so that a currently valid OMB control number is not 
displayed, applicants and recipients will not thereafter be required to 
submit information requested pursuant to this rule.
    The information is needed to determine eligibility of applicants 
and projects and to monitor projects for compliance with EDA's 
construction or Revolving Loan Fund requirements, as applicable. EDA 
then uses information obtained in these collections to help carry out 
its mission to aid economically distressed areas of the Nation. 
Responses to requests for information are necessary under Pub. Law 105-
393 for obtaining and for keeping benefits. The reporting burden for 
this collection is estimated to be approximately 7 burden hours for the 
Proposal; approximately 50 burden hours for the Application; 
approximately 18 burden hours for Requirements for Approved 
Construction Projects; approximately 240 burden hours for the CED 
Strategy Guidelines; and approximately 76 burden hours for the series 
of Guidelines for the Revolving Loan program, including the time for 
gathering and maintaining the data needed for completing and reviewing 
the collection of information. Comments were invited in 64 FR 5347, but 
no public comments were received on: (a) whether the collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information shall have practical 
utility; (b) the accuracy of the agency's estimate of the burden of the 
proposed collection of information; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (d) ways 
to minimize the burden of the collection of information on respondents, 
including through the use of automated collection techniques or other 
forms of information technology. Though the comment period has ended, 
comments regarding these burden estimates or any other aspects of the 
collection of information, including suggestions for reducing the 
burdens, should be forwarded to Edward M. Levin, Chief Counsel, 
Economic Development Administration, U.S. Department of Commerce, 
Herbert C. Hoover Building, 1401 Constitution Avenue, NW, Room 7005, 
Washington, DC 20230. Such comments, if any, will be reviewed and 
considered to the extent they are received before EDA begins the 
clearance and review process on the final rule.

Administrative Procedure Act and Regulatory Flexibility Act

Executive Order 12612 (Federalism Assessment)

    This action has been reviewed in accordance with the principles and 
criteria contained in E.O. 12612. It has been determined that this 
interim-final rule does not have significant Federalism implications to 
warrant a full Federalism Assessment under the principles and criteria 
contained in E.O. 12612.

List of Subjects in 13 CFR Part 301

    Community development; Grant programs; Indians.

    For the reasons set forth in the preamble, part 301 of 13 CFR 
Chapter III is amended to read as follows:

PART 301--GENERAL ELIGIBILITY AND GRANT RATE REQUIREMENTS

    1. The authority citation for part 301 continues to read as 
follows:

    Authority: 42 U.S.C. 3211; Department of Commerce Organization 
Order 10-4.

    2. Section 301.4(b) is revised to read as follows:


Sec. 301.4  Grant rates.

* * * * *
    (b) EDA may supplement the Federal share of a grant project where 
the applicant is able to demonstrate that the non-Federal share that 
would otherwise be required cannot be provided because of the overall 
economic situation. It is not necessary for an applicant to prove that 
it would be impossible to provide a full 50 percent non-Federal share, 
but it must show circumstances warranting any reduction. In determining 
whether to provide a Federal share greater than 50 percent for a 
project, EDA will give due consideration to the applicant's economic 
situation and the relative needs of the area. In the case of Indian 
tribes, EDA may reduce or waive the non-Federal share, and in other 
cases EDA may reduce the non-Federal share of the cost of the project 
below 50 percent, in accordance with the following table, showing the 
maximum Federal grant rate, including the supplement:

------------------------------------------------------------------------
                                                  Maximum grant rates
                   Projects                           (percentage)
------------------------------------------------------------------------
(1) Projects of Indian tribes where EDA has    100.
 made a determination to waive the non-
 Federal share of the cost of the project.

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(2) Projects under Part 308 located in         100.
 Presidentially-declared disaster areas for
 which EDA receives an application for
 assistance under a supplemental
 appropriation, within 18 months of the date
 of declaration, and for which the President
 established a rate of Federal participation,
 based on the public assistance grant rate of
 the Federal Emergency Management Agency
 (FEMA) for the disaster, of greater than 80
 percent.
(3) Projects of Indian tribes where EDA has    Less than 100.
 made a determination to reduce the non-
 Federal share of the cost of the project.
(4) Projects of States or political            Less than 100
 subdivisions of States that have exhausted
 their effective taxing and/or borrowing
 capacity, or nonprofit organizations that
 have exhausted their borrowing capacity.
(5) Projects under Part 308 located in         80.
 Presidentially-declared disaster areas for
 which EDA receives an application for
 assistance under a supplemental
 appropriation, within 18 months of the date
 of declaration.
(6) Projects located in Federally-declared     80.
 disaster areas, for which EDA receives an
 application for assistance within 18 months
 of the date of declaration, when the
 Assistant Secretary determines that the
 applicant cannot provide the required non-
 Federal share because of the disaster's
 impact on the economic situation.
(7) Projects located in eligible areas where:
    (i) The 24-month unemployment rate is at
     least 225% of the national average or
    (ii) The per capita income (PCI) is not    80
     more than 50% of the national average.
(8) Projects located in eligible areas that
 are not eligible for a higher rate, where:
    (i) The 24-month unemployment rate is at
     least 180% of the national average or
    (ii) The PCI is not more than 60% of the   70.
     national average.
(9) Projects located in eligible areas that
 are not eligible for a higher rate, where:
    (1) The 24-month unemployment rate is at
     least 150% of the national average or
    (2) The PCI is not more than 70% of the    60.
     national average.
(10) Projects in all other eligible areas....  50.
------------------------------------------------------------------------

* * * * *

    Dated: June 11, 1999.
Phillip A. Singerman,
Assistant Secretary, Economic Development Administration.
[FR Doc. 99-15499 Filed 6-17-99; 8:45 am]
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