[Federal Register Volume 66, Number 95 (Wednesday, May 16, 2001)]
[Rules and Regulations]
[Pages 27013-27014]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-12249]



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 Rules and Regulations
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  Federal Register / Vol. 66, No. 95 / Wednesday, May 16, 2001 / Rules 
and Regulations  

[[Page 27013]]



DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service

7 CFR Part 1942

RIN 0570-AA32


Rural Business Enterprise Grants and Television Demonstration 
Grants

AGENCY: Rural Business-Cooperative Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: The Rural Business-Cooperative Service (RBS) is amending the 
Rural Business Enterprise Grant (RBEG) Program regulation by revising 
the definition of small and emerging private business enterprise. The 
current definition burdens the grantee by placing too many eligibility 
restrictions on the businesses to be assisted by the grantee. This 
amendment will ensure the grantee can assist small businesses in rural 
areas without eligibility restrictions for the use of technological 
innovations or commercialization of new products or processes.

DATES: Effective May 16, 2001. Comments must be received on or before 
July 16, 2001.
    Applicability Date: The small business definition change will be 
retroactive starting August 11, 1988.

ADDRESSES: Written comments may be submitted, in duplicate, to the 
Regulations and Paperwork Management Branch, Attention Cheryl Thompson, 
Rural Development, U.S. Department of Agriculture, STOP 0742, 1400 
Independence Avenue SW., Washington, DC 20250-0742. Comments may be 
submitted via the Internet by addressing them to [email protected] 
and must contain the word ``small'' in the subject. All written 
comments will be available for public inspection during normal working 
hours at 300 E Street, SW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Amy Cavanaugh, Rural Development 
Specialist, Specialty Lenders Division, Rural Business-Cooperative 
Service, U.S. Department of Agriculture, STOP 3225, 1400 Independence 
Ave. SW., Washington, DC 20250, Telephone (202) 690-2516. The TTD 
number is (800) 877-8339 or (202) 708-9300.

SUPPLEMENTARY INFORMATION:

Classification

    This rule has been determined to be non-significant and has not 
been reviewed by the Office of Management and Budget.

Programs Affected

    The Catalog of Federal Domestic Assistance number for the program 
impacted by this action is 10.769, Rural Development Grants.

Paperwork Reduction Act

    There are no reporting and recordkeeping requirements associated 
with this interim rule.

Intergovernmental Review

    The RBEG Program is subject to the provisions of Executive Order 
12372, which requires intergovernmental consultation with state and 
local officials. RBS will conduct intergovernmental consultation in the 
manner delineated in RD Instruction 1940-J, ``Intergovernmental Review 
of Rural Development Programs and Activities,'' and in 7 CFR part 3015, 
subpart V.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-
602), 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. New provisions included in this 
rule will not impact a substantial number of small entities to a 
greater extent than large entities. Therefore, a regulatory flexibility 
analysis was not performed.

Civil Justice Reform

    This interim 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) retroactive effect will be given to this rule starting 
August 11, 1988; 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 
those regulations specifically allow bringing suit at an earlier time.

Environmental Impact Statement

    This document has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program.'' RBS has determined that this 
proposed 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, 42 
U.S.C. 4321 et seq. an Environmental Impact Statement is not required.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. 
L. 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 
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 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 UMRA.

Background

    This regulatory package is an Agency initiative to make the RBEG 
Program more effective at stimulating economic development by reducing 
certain eligibility requirements for small and emerging private 
business enterprise (small business) located in rural areas.

[[Page 27014]]

There has been much confusion on the definition of small business since 
it was first published in the Federal Register, August 11, 1988. At 
that time, the RBEG Program was called the Industrial Development Grant 
Program. The name of the program was changed in 1992 and still 
contained the small business definition. The RBEG Program has been 
administered by two separate agencies since inception of the program. 
The Farmers Home Administration (FmHA) originally administered the RBEG 
Program. In 1996, it was transferred to RBS. FmHA misinterpreted the 
definition of small business in its regulations as only needing to meet 
the first two parts of the definition in order to be eligible for 
assistance and funded grants based on this misinterpretation. RBS has 
recently determined the FmHA interpretation is not consistent with the 
actual regulatory language. Therefore, the Agency wants to correct the 
definition language and make it retroactive starting August 11, 1988, 
so the reversed definition will be applicable to existing grants. 
Retroactive application of the definition will validate existing 
grants, which might not otherwise have been eligible under a strict 
application of the regulatory criteria defining a small business. This 
will ultimately streamline the regulation and reduce the burden to the 
applicant in meeting the restricted definition.

Discussion of Interim Final Rule

    It is the policy of this Department that rules relating to public 
property, loans, grants, benefits or contracts shall be published for 
comment notwithstanding the exemption of 5 U.S.C. 553 with respect to 
such rules. However, it would be contrary to the public interest to 
wait for public comment before implementing the revision to the small 
business definition. There is an immediate need to provide funds to the 
public to help alleviate the lack of money available for economic 
development in rural areas and to alleviate confusion caused by past 
misinterpretation and misapplication of regulatory requirements. Using 
the FmHA interpretation of the small business definition will allow 
more small businesses to stimulate the economy and provide jobs. 
Comments will be accepted for 60 days after publication of this interim 
final rule and will be considered in the development of the final rule.

List of Subjects in 7 CFR Part 1942

    Business and industry, Grant programs--Housing and community 
development, Industrial park, Rural areas.

    Therefore, chapter XVIII, title 7, Code of Federal Regulations, is 
amended as follows:

PART 1942--ASSOCIATIONS

    1. The authority citation for part 1942 is revised to read as 
follows:

    Authority: 5 U.S.C. 301, 7 U.S.C. 1932, 7 U.S.C. 1989, and 16 
U.S.C. 1005.

Subpart G--Rural Business Enterprise Grants and Television 
Demonstration Grants

    2. Section 1942.304 is amended by revising the definition of small 
and emerging private business enterprise to read as follows:


Sec. 1942.304  Definitions.

* * * * *
    Small and emerging private business enterprise. Any private 
business which will employ 50 or fewer new employees and has less than 
$1 million in projected gross revenues.
* * * * *

    Dated: May 9, 2001.
Dawn R. Riley,
Acting Deputy Under Secretary.
[FR Doc. 01-12249 Filed 5-15-01; 8:45 am]
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