[Federal Register Volume 65, Number 78 (Friday, April 21, 2000)]
[Rules and Regulations]
[Pages 21630-21632]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-9793]



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Part V





Department of Agriculture





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Cooperative State Research, Education, and Extension Service



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7 CFR Part 3419



Matching Funds Requirement for Formula Funds for Agricultural Research 
and Extension Activities at 1890 Land-Grant Institutions, Including 
Tuskegee University, and at the 1862 Land-Grant Institutions in Insular 
Areas; Final Rule

  Federal Register / Vol. 65, No. 78 / Friday, April 21, 2000 / Rules 
and Regulations  

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DEPARTMENT OF AGRICULTURE

Cooperative State Research, Education, and Extension Service

7 CFR Part 3419

RIN 0524-AA24


Matching Funds Requirement for Formula Funds for Agricultural 
Research and Extension Activities at 1890 Land-Grant Institutions, 
Including Tuskegee University, and at the 1862 Land-Grant Institutions 
in Insular Areas

AGENCY: Cooperative State Research, Education, and Extension Service, 
USDA.

ACTION: Final Rule.

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SUMMARY: The Cooperative State Research, Education, and Extension 
Service (CSREES) adds a new part 3419 to Title 7, Subtitle B, Chapter 
XXXIV of the Code of Federal Regulations, for the purpose of 
implementing new statutory matching requirements applicable to Federal 
agricultural research and extension formula funds for 1890 land-grant 
institutions, including Tuskegee University, and to the 1862 land-grant 
institutions in the Commonwealth of Puerto Rico and the insular areas 
of American Samoa, Guam, Micronesia, Northern Marianas, and the Virgin 
Islands.

EFFECTIVE DATE: April 21, 2000.

FOR FURTHER INFORMATION CONTACT: Dr. Edward M. Wilson, Deputy 
Administrator; Plant and Animal Systems; Cooperative State Research, 
Education, and Extension Service; U.S. Department of Agriculture; Mail 
Stop 2220; 1400 Independence Avenue, S.W.; Washington, D.C. 20250-2220; 
at 202-401-4329, 202-401-4888 (fax) or via electronic mail at 
[email protected].

SUPPLEMENTARY INFORMATION:   

Background and Purpose

    The Cooperative State Research, Education, and Extension Service 
(CSREES) adds a new part 3419 to Title 7, Subtitle B, Chapter XXXIV of 
the Code of Federal Regulations, for the purpose of implementing the 
new matching requirements for agricultural research and extension 
formula funds authorized for the 1890 land-grant institutions and 
Tuskegee University. Section 226 of the Agricultural Research, 
Extension, and Education Reform Act of 1998 (AREERA), Pub. L. 105-185, 
amends Subtitle G of the National Agricultural Research, Extension, and 
Teaching Policy Act of 1977 (NARETPA) by adding a new section 1449. 
This section requires matching funds from non-Federal sources for 
formula funds authorized under sections 1444 and 1445 of NARETPA for 
research and extension activities at the 1890 land-grant institutions 
and Tuskegee University.
    This rule will also implement the new matching requirements for the 
1862 land-grant institutions in the Commonwealth of Puerto Rico and the 
insular areas of American Samoa, Guam, Micronesia, Northern Marianas, 
and the Virgin Islands. Section 753(d) and (e) of the Agriculture, 
Rural Development, Food and Drug Administration, and Related Agencies 
Appropriations Act, 1999, enacted in Division A, section 101(a) of the 
Omnibus Consolidated and Emergency Supplemental Appropriations Act, 
1999, Pub. L. 105-277, 112 Stat. 2681-33 (1999 Agriculture 
Appropriations Act), amended section 3(d) of the Hatch Act of 1887 and 
section 3(e) of the Smith-Lever Act to subject the 1862 land-grant 
institutions in the Commonwealth of Puerto Rico, the Virgin Islands, 
and Guam to the same matching requirements as those applicable to an 
eligible institution under section 1449 of NARETPA. The amendments made 
by section 753 apply by operation of law to American Samoa, Micronesia, 
and Northern Marianas by virtue of section 1361(a) of Pub. L. 96-374, 
as amended by 9(c) of Pub. L. 99-396, which provides that any provision 
of law related to land-grant institutions in the Virgin Islands or Guam 
applies to the land-grant institutions in American Samoa, the Northern 
Marianas, and the former Trust Territory of the Pacific Islands, the 
land-grant institution of which is the College of Micronesia.
    Section 1449 requires that the State make available matching funds 
to an 1890 institution out of non-Federal funds. CSREES has determined 
that this does not necessarily limit the source of matching funds to 
those directly provided by the State as a part of its direct budget or 
appropriations process. Accordingly, CSREES has defined ``non-Federal 
sources'' to include direct State appropriations and any funds 
generated by the 1890 institution or by the 1862 institution in the 
Commonwealth of Puerto Rico or in an insular area and made available to 
the institution under other authority (other than authority to charge 
tuition and fees paid by students) provided by the State. This would 
include, for example, gift acceptance or user fee authority.

Public Comments and Changes to the Final Rule

    One comment was received from an 1862 land-grant institution in an 
insular area requesting clarification on three issues: (1) Whether an 
institution is eligible for any agricultural research and extension 
formula funds if the institution fails to provide the full matching 
requirement, (2) whether the institution must certify that the required 
matching funds are available prior to the actual distribution of funds, 
and (3) whether the definition of matching funds, which indicates that 
they are not only from non-Federal sources but also funds made 
available by the State government, precludes other sources of non-
Federal funds that are not from the State government.
    Each 1890 land-grant institution and each 1862 land-grant 
institution in insular areas and the Commonwealth of Puerto Rico will 
be entitled to their allocation of Federal agricultural research and 
extension formula funds less an amount equal to any required matching 
amount that the institution fails to provide. For example, the matching 
requirement in fiscal year (FY) 2000 shall equal not less than 30 
percent of the formula funds to be distributed. If an institution was 
entitled to $1,000,000 for extension but only matches 15 percent, then 
the $1,000,000 would be reduced by 15 percent and the institution would 
receive only $850,000. However, the maximum awarded by CSREES will be 
the amounts of the annual allocations as indicated on the CSREES-OD-
1088's, Distributions of Hatch Act Funds and Smith-Lever Act Funds.
    Each 1890 land-grant institution and each 1862 land-grant 
institution in insular areas and the Commonwealth of Puerto Rico must 
certify that the required matching funds are available prior to the 
actual distribution of any funds. CSREES has added section 3419.5, 
Certification of Matching Funds, to clarify that the annual 
certification of matching funds must be provided to CSREES prior to the 
distribution of formula funds. This section also provides that the 
eligible institutions may submit through July 1 of the fiscal year in 
which funds are appropriated any revisions to their annual 
certification of matching funds.
    As mentioned in the ``Background and Purpose'' section, CSREES has 
determined that the definition of matching funds does not necessarily 
limit the source of matching funds to those directly provided by the 
State as part of its direct budget or appropriations process. 
Accordingly,

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CSREES has defined ``non-Federal sources'' to include direct State 
appropriations and any funds generated by the 1890 land-grant 
institution or by the 1862 institution in the Commonwealth of Puerto 
Rico or in the insular areas and made available to the institution 
under other authority (other than authority to charge tuition and fees 
paid by students) provided by the State. This would include, for 
example, gift acceptance and user fee authority.

Classification

    This rule was reviewed under Executive Order 12866 and was 
determined to be nonsignificant as it will not create a serious 
inconsistency or otherwise interfere with an action planned by another 
agency; will not materially alter the budgetary impact of entitlement, 
grants, user fees, or loan programs, or the rights and obligations of 
the recipients thereof; and will not raise novel legal or policy issues 
arising out of legal mandates, the President's priorities, or 
principles set forth in this executive order. This rule will not have 
an annual effect on the economy of $100 million or more or adversely 
affect in a material way the economy, a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local, or tribal governments or communities.

Regulatory Flexibility Act

    The Department certifies that this rule will not have a significant 
impact on a substantial number of small entities as defined in the 
Regulatory Flexibility Act, Pub. L. No. 96-534 (5 U.S.C. 601 et seq.). 
Accordingly, a regulatory flexibility analysis is not required for this 
rule.

Catalog of Federal Domestic Assistance

    The programs affected by this rule are listed in the Catalog of 
Federal Domestic Assistance under No. 10.205, Payments to 1890 Land-
Grant Institutions and Tuskegee University, No. 10.500, Cooperative 
Extension Service, and No. 10.203, Payments to Agricultural Experiment 
Stations Under the Hatch Act.

Paperwork Reduction Act

    In accordance with the Office of Management and Budget (OMB) 
regulations (5 CFR Part 1320) which implement the Paperwork Reduction 
Act of 1995 (44 U.S.C. Chapter 35), the information collection and 
recordkeeping requirements that will be imposed in the implementation 
of this rule have been approved under OMB Document No. 0524-0038.

Report to Congress

    As required by 5 U.S.C. 801(a), CSREES submitted a report on this 
final rule to both Houses of Congress and the Comptroller General prior 
to publication.

List of Subjects in 7 CFR Part 3419

    Agricultural extension, Agricultural research, Colleges and 
universities.


    For reasons set forth in the preamble, Title 7, Subtitle B, Chapter 
XXXIV, of the Code of Federal Regulations is amnded by adding part 3419 
to read as follows:

PART 3419--MATCHING FUNDS REQUIREMENT FOR AGRICULTURAL RESEARCH AND 
EXTENSION FORMULA FUNDS AT 1890 LAND-GRANT INSTITUTIONS, INCLUDING 
TUSKEGEE UNIVERSITY, AND AT 1862 LAND-GRANT INSTITUTIONS IN INSULAR 
AREAS

Sec.
3419.1   Definitions.
3419.2   Matching funds.
3419.3   Determination of non-Federal sources of funds.
3419.4   Limited waiver authority.
3419.5   Certification of matching funds.
3419.6   Use of matching funds.
3419.7   Redistribution of funds.

    Authority: 5 U.S.C. 301, 7 U.S.C. 3222d; Sec. 753, Pub. L. No. 
105-277, 112 Stat. 2681-33.


Sec. 3419.1  Definitions.

    As used in this part:
    Eligible institution means a college or university eligible to 
receive funds under the Act of August 30, 1890 (7 U.S.C. 321 et seq.) 
(commonly known as the Second Morrill Act), including Tuskegee 
University, or a college or university designated under the Act of July 
2, 1862 (7 U.S.C. 301, et seq.) (commonly known as the First Morrill 
Act) and located in the Commonwealth of Puerto Rico and the insular 
areas of American Samoa, Guam, Micronesia, Northern Marianas, and the 
Virgin Islands.
    Formula funds means agricultural research funds provided to the 
eligible institutions under section 1445 of the National Agricultural 
Research, Extension, and Teaching Policy Act of 1977 (NARETPA), as 
amended, or under section 3 of the Hatch Act of 1887, 7 U.S.C. 361c, 
and agricultural extension funds provided to the eligible institutions 
under section 1444 of NARETPA or under sections 3(b) and (c) of the 
Smith-Lever Act, 7 U.S.C. 343(b) and (c).
    Matching funds means funds from non-Federal sources made available 
by the State to the eligible institutions:
    (a) For programs or activities that fall within the purposes of 
agricultural research and cooperative extension under sections 1444 and 
1445 of NARETPA, the Hatch Act of 1887, and the Smith-Lever Act; or
    (b) For qualifying educational activities. Matching funds means 
cash contributions and excludes in-kind matching contributions.
    Non-Federal sources means funds made available by the State to the 
eligible institution either through direct appropriation or under any 
authority (other than authority to charge tuition and fees paid by 
students) provided by a State to an eligible institution to raise 
revenue, such as gift acceptance authority or user fees.
    Qualifying educational activities means programs that address food 
and agricultural sciences components of an eligible institution.
    Secretary means the Secretary of Agriculture and any other officer 
or employee of the Department of Agriculture to whom the authority 
involved may be delegated.
    State means the government of any one of the fifty States, the 
Commonwealth of Puerto Rico, Guam, American Samoa, the Commonwealth of 
Northern Marianas, the Virgin Islands of the United States, the 
Republic of Palau, the Republic of the Marshall Islands, and the 
Federated States of Micronesia.


Sec. 3419.2  Matching funds.

    The distribution of formula funds shall be subject to the following 
matching requirements: (a) For fiscal year 2000, matching funds shall 
equal not less than 30 percent of the formula funds to be distributed 
to the eligible institution;
    (b) For fiscal year 2001, matching funds shall equal not less than 
45 percent of the formula funds to be distributed to the eligible 
institution; and
    (c) For fiscal year 2002 and each fiscal year thereafter, the 
matching funds shall equal not less than 50 percent of the formula 
funds to be distributed to the eligible institution.


Sec. 3419.3  Determination of non-federal sources of funds.

    Each eligible institution shall submit by September 30, 1999, a 
report describing for fiscal year 1999:
    (a) The sources of non-Federal funds made available to the eligible 
institutions for agricultural research, extension, and qualified 
educational activity to meet the matching requirements of section 1449 
of NARETPA, as amended; and
    (b) The amount of funds generally available from each source. This 
report

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for the fiscal year ending September 30, 1999, may also include a 
request for a waiver of the matching funds requirement for fiscal year 
2000.


Sec. 3419.4  Limited waiver authority.

    The Secretary may waive the matching funds requirement for fiscal 
year 2000 for an eligible institution of a State if the Secretary 
determines that, based on the report received under Sec. 3419.3, the 
State will be unlikely to satisfy the matching requirement. The 
criteria to waive the match in fiscal year 2000 may include:
    (a) Natural disaster, flood, fire, tornado, hurricane, or drought;
    (b) State and/or institution facing a financial crisis; or
    (c) Demonstration of a good faith effort to obtain funds. Approval 
or disapproval of the request for a waiver will be based on the report 
submitted under Sec. 3419.3. The Secretary may not waive the matching 
requirement for any fiscal year other than fiscal year 2000.


Sec. 3419.5  Certification of matching funds.

    Prior to the distribution of formula funds each fiscal year, each 
eligible institution must certify as to the availability of matching 
funds. Eligible institutions may revise their certification of matching 
funds through July 1 of the fiscal year in which funds are 
appropriated.


Sec. 3419.6  Use of matching funds.

    The required matching funds for the formula programs shall be used 
by an eligible institution for agricultural research and extension 
activities that have been approved in the plan of work required under 
sections 1444(d) and 1445(c) of the National Agricultural Research, 
Extension, and Teaching Policy Act of 1977, section 7 of the Hatch Act 
of 1887, section 4 of the Smith-Lever Act, or for approved qualifying 
education activities.


Sec. 3419.7  Redistribution of funds.

    All formula funds not matched and reported under Sec. 3419.5 by 
July 1 of each fiscal year will be reapportioned to the other eligible 
institutions who have satisfied their current fiscal year requirement 
for matching funds for the formula funds. Unmatched research and 
extension funds will be reapportioned in accordance with the research 
and extension statutory distribution formulas applicable to the 1890 
and 1862 land-grant institutions, respectively. Any redistribution of 
funds shall be subject to the same matching requirement under 
Sec. 3419.2.

    Done at Washington, D.C., this 13th day of April 2000.
Eileen Kennedy,
Deputy Under Secretary, Research, Education, and Economics.
[FR Doc. 00-9793 Filed 4-20-00; 8:45 am]
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