[Federal Register Volume 67, Number 88 (Tuesday, May 7, 2002)]
[Proposed Rules]
[Pages 30631-30634]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11243]


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AGENCY FOR INTERNATIONAL DEVELOPMENT

22 CFR Part 203


Registration of U.S. Private Voluntary Organizations for Foreign 
Aid Programs

AGENCY: Agency for International Development (USAID).

ACTION: Proposed rule.

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SUMMARY: USAID proposes to amend its regulations by creating a less 
cumbersome and more streamlined registration process for private 
voluntary organizations (PVOs).

DATES: Please submit comments on or before July 8, 2002.

ADDRESSES: You may mail written comments concerning the proposed 
changes to Mary Newton, Registrar, USAID, Office of Private and 
Voluntary Cooperation, 1300 Pennsylvania Avenue, NW, Washington, DC, 
20523-7600. You may submit comments electronically to 
[email protected].

FOR FURTHER INFORMATION CONTACT: Mary Newton, Registrar, Office of 
Private and Voluntary Cooperation, telephone 202-712-4747; telefax 
(202) 216-3041; e-mail [email protected].

SUPPLEMENTARY INFORMATION:   

A. Explanation of Proposed Changes

    Following an extensive review of the registration process of U.S. 
private voluntary organizations (PVOs), we propose to amend the 
regulations to make the registration process less cumbersome and more 
streamlined for both applicants and the Agency. The major changes are 
as follows:
    1. Defined the term ``U.S. PVO'' in section 203.2 so that an 
organization can determine if it needs to be registered. An 
organization that meets the definition must be registered to be 
eligible for a subvention or to receive a USAID grant or cooperative 
agreement. If an organization does not meet the definition, it is not 
considered a PVO for purposes of registration.
    2. Combined two conditions regarding tax exemption and voluntary 
nature into one condition.
    3. Deleted references to other types of nonprofit organizations. 
Only 501(c)(3) organizations are considered PVOs. Organizations 
registered before these

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changes are implemented will remain in the USAID Registry of PVOs.
    4. Added requirement that the organization is incorporated at least 
18 months before applying.
    5. Separated conditions from documentation requirements for easier 
reference.
    6. Reduced the number of documents required for application from 18 
to 7 and for annual submission from 6 to 4.
    7. Added Condition No. 8 on U.S. national security issues.

B. Regulatory Analysis

    1. Executive Order 12866. USAID has determined that this regulation 
is not a significant regulatory action as defined in Executive Order 
12866 and, accordingly, this regulation has not been reviewed by the 
Office of Management and Budget.
    2. Regulatory Flexibility Act. It is hereby certified that this 
regulation will not have a significant economic impact on a substantial 
number of small entities. Accordingly, a Regulatory Flexibility 
Analysis is not required.
    3. Executive Order 13132. This regulation will not have a 
substantial direct effect on the states, on the relationship between 
the national government and the states, or on distribution of power and 
responsibilities among the various levels of government. Therefore, in 
accordance with Executive Order 13132, it is determined that this 
regulation does not have sufficient federalism implications to warrant 
the preparation of a Federalism Assessment.
    4. Unfunded Mandates Reform Act of 1995. This regulation will not 
result in the expenditure by state, local and tribal governments, in 
the aggregate, or by the private sector, of $100 million or more in any 
one-year, and it will not significantly or uniquely affect small 
governments. Therefore, no actions were deemed necessary under the 
provisions of the Unfunded Mandates Reform Act of 1995.
    5. Small Business Regulatory Enforcement Fairness Act of 1996. This 
rule is not a major rule as defined by section 251 of the Small 
Business Regulatory Enforcement Act. 5 U.S.C. 804. This rule will not 
result in an annual effect on the economy of $100 million or more; a 
major increase in costs or prices; or significant adverse effects on 
competition, employment, investment, productivity, innovation, or on 
the ability of United States-based companies to compete with foreign-
based companies in domestic or export markets.
    6. Executive Order 12988--Civil Justice Reform. USAID has conducted 
the reviews required by section 3 of Executive Order 12988 and has 
determined that, this rule meets the applicable standards in section 3 
to mitigate litigation, eliminate ambiguity and reduce burden.
    7. Paperwork Reduction Act. This rule does contain information 
collection requirements that require approval by the Office of 
Management and Budget under the Paperwork Reduction Act (44 U.S.C. 3507 
et seq.). We are in the process of obtaining the necessary approvals.

List of Subjects in 22 CFR Part 203

    Foreign aid, Nonprofit organizations.

    Accordingly, 22 CFR part 203 is proposed to be revised to read as 
follows:

PART 203--REGISTRATION OF U.S. PRIVATE VOLUNTARY ORGANIZATIONS 
(PVOs)

Sec.
203.1  Purpose.
203.2  Definitions.
203.3  Conditions of registration.
203.4  Documentation requirements for initial registration.
203.5  Annual documentation requirements.
203.6  Denial of registration, reconsideration and resubmission.
203.7  Termination of registration.
203.8  Access to records and communications.
208.9  Delegation of authority.

    Authority: 22 U.S.C. 2381.


Sec. 203.1  Purpose.

    (a) USAID registers U.S. PVOs for the following purposes:
    (1) Registration is a statutory condition of eligibility for U.S. 
PVOs for subventions.
    (2) Registration is a condition of eligibility for U.S PVOs for 
USAID grants and cooperative agreements.
    (3) Registration provides USAID with information for computing the 
amount of USAID funding made available to U.S PVOs.
    (4) Registration provides USAID with the information necessary to 
determine whether a PVO meets the statutory ``20 percent privateness 
test.'' The statue requires that a U.S. PVO must obtain at least 20 
percent of its financial support (cash) for its international 
activities from sources other than the U.S. Government to receive 
certain USAID grants and cooperative agreements. The privateness test 
is an eligibility criterion for PVO programs; it is not a condition for 
registration.
    (b) It is not the purpose of registration to allow registered U.S. 
PVOs to make, or enable to be made, any representation to the public 
concerning the meaning of being registered with USAID.
    (c) Registration does not bring an organization within the 
Ambassador's authority and responsibility for the security of U.S. 
Government operations and personnel abroad.


Sec. 203.2  Definitions.

    As used in this part:
    (a) Annual report means a yearly document that describes the PVO's 
program activities conducted during the same period as the audited 
financial statement.
    (b) FAA means the Foreign Assistance Act of 1961, as amended, 22 
U.S.C. 2151, et seq.
    (c) U. S. general public means U.S. citizens and U.S. 
nongovernmental organizations, e.g., private citizens, groups, 
foundations and corporations. U.S. general public does not include 
government agencies in the U.S. or abroad, or international 
organizations such as the United Nations, or non-U.S. citizens or 
institutions.
    (d) Headquarters means the principal executive office where legal, 
accounting, and administrative information may be accessed in the daily 
course of conducting business.
    (e) Public Law 480 means the Agricultural Trade Development and 
Assistance Act of 1954, as amended, 7 U.S.C. 1691 et seq.
    (f) Supporting Services mean the total of general and 
administration expenses plus fundraising and promotion expenses.
    (g) Subventions mean the payment of transportation charges under 
section 123(b) of the FAA, 22 U.S.C. 2151u(b); the sale of the services 
or commodities, e.g., excess property, under section 607(a) of the FAA, 
22 U.S.C. 2357(a); and the furnishing of agricultural commodities under 
section 202 of Public Law 480, 7 U.S.C. 1722.
    (h) USAID means U.S. Agency for International Development.
    (i) U.S. PVO means a private voluntary organization that
    (1) Is exempt from Federal income taxes under Section 501(c)(3) of 
the Internal Revenue Code (26 U.S.C. 501(c)(3));
    (2) Works in, or intends to work in, foreign development 
activities;
    (3) Receives some portion of its annual support from the private 
sector;
    (4) Receives voluntary contributions of money from the U.S. general 
public; and
    (5) Is not, for registration purposes, a university, college, 
accredited degree-granting institution of education, private 
foundation, hospital, organization engaged exclusively in research or

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scientific activities, church, or organization engaged exclusively in 
religious activities.


Sec. 203.3  Conditions of registration.

    There are eight conditions of registration `` the first four 
conditions define a PVO, and the last four conditions establish 
standards by which the PVO is evaluated. An applicant shall be 
registered with USAID as a U.S. PVO if USAID finds that the applicant 
has satisfied the following conditions:
    (a) Condition No. 1 (U.S.-based). Is U.S.-based in that it:
    (1) Is organized under the laws of the United States;
    (2) Has its headquarters in the United States; and
    (3) Has been incorporated for not less than 18 months.
    (b) Condition No. 2 (Private). Is not a governmental entity.
    (c) Condition No. 3 (Voluntary). Is a voluntary organization in 
that it:
    (1) Is a public charity and has tax exemption under section 
501(c)(3) of the Internal Revenue Code; and
    (2) Solicits and receives cash contributions from the U.S. general 
public.
    (d) Condition No. 4 (Overseas Activities). Conducts, or anticipates 
conducting, overseas activities that are consistent with the general 
purposes of the Foreign Assistance Act or Public Law 480, 7 U.S.C. 
1691.
    (e) Condition No. 5 (Financial Viability). That it:
    (1) Accounts for its funds in accordance with generally accepted 
accounting principles (GAAP);
    (2) Has a sound financial position; and
    (3) Makes its financial statements available to the public upon 
request.
    (f) Condition No. 6 (Board of Directors). Has a board of directors:
    (1) That meets at least annually;
    (2) Whose members serve without compensation or honorarium for such 
services; and
    (3) Whose majority is not composed of the PVO's officers or staff 
members.
    (g) Condition No. 7 (Program and Supporting Services). That it:
    (1) Expends and distributes its cash and gifts in-kind in 
accordance with the annual report of program activities; and
    (2) Does not expend more than 40 percent of total expenses on 
supporting services.
    (h) Condition No. 8 (General Eligibility). It is not:
    (1) Suspended or debarred by an agency of the United States 
Government;
    (2) Designated as a foreign terrorist organization by the Secretary 
of State pursuant to section 219 of the Immigration and Nationality 
Act, 8 U.S.C. 1189, as amended; or
    (3) The subject of a decision by the Department of State to the 
effect that registration or a financial relationship between USAID and 
the organization is contrary to the national defense, national 
security, or foreign policy interests of the United States.


Sec. 203.4  Documentation requirements for initial registration.

    (a) In order for USAID to determine if the applicant meets the 
conditions of registration, an applicant shall submit in duplicate to 
USAID, Office of Private and Voluntary Cooperation, 1300 Pennsylvania 
Avenue, NW, Washington, D.C., 20523-7600, the following documents with 
a cover letter stating the reason the organization is applying for 
registration, its agreement to the conditions of registration, and its 
agreement to provide such other information as USAID may reasonably 
require to determine that the applicant meets the conditions of 
registration. This information is required for the purpose of 
determining that the applicant meets the conditions of registration:
    (1) Articles of incorporation or charter on state letterhead with 
state seal and authorizing state official's signature;
    (2) Bylaws or other documents establishing corporate structure;
    (3) IRS Form 990 or 990-PF (for availability see 26 CFR 601.602) 
and a copy of IRS letter of tax exemption;
    (4) Audited financial statements (for the most recent fiscal year) 
and an Office of Management and Budget (OMB) Circular A-133 (for 
availability see 5 CFR 1310.3) audit, if applicable, prepared on an 
accrual basis in accordance with generally accepted accounting 
principles (GAAP) certified by an independent certified public 
accountant (CPA);
    (5) Annual report or similar document which describes overseas 
program activities and lists all board members;
    (6) USAID Form 1550-2 for the same reporting period as the 
financial statements; and
    (7) Classification list of activity sectors and countries.
    (b) In addition, each applicant shall submit such other information 
as USAID may reasonably require to determine whether the organization 
meets the conditions of registration.
    (c) USAID may revise this list of documents from time to time.
    (d) Other USAID officials may request the same or similar 
information at a later date for purposes of determining the PVO's 
eligibility for a particular grant of cooperative agreement.


Sec. 203.5  Annual documentation requirements.

    (a) In order to maintain its registration, each registered PVO 
shall submit annually, within 180 days after the close of its fiscal 
year, the following:
    (1) Audited financial statements for the registrant's most recent 
fiscal year and an OMB Circular A-133 audit, if applicable, prepared on 
an accrual basis in accordance with GAAP by an independent CPA;
    (2) Annual report or similar document describing overseas program 
activities and listing all board members;
    (3) USAID Form 1550-2 for the same reporting period as the 
financial statements; and
    (4) Classification listing of activity sectors and countries.
    (b) PVOs also must submit any amendments, if applicable, to their 
articles of incorporation, charter or bylaws and any changes in the 
organization's tax-exempt status.
    (c) In addition, each registrant shall submit such other 
information as USAID may reasonably require to determine that the 
organization continues to meet the conditions of registration.
    (d) USAID may revise this list of documents from time to time.


Sec. 203.6  Denial of registration, reconsideration and resubmission.

    (a) Notification of denial of registration. If USAID decides to 
deny an applicant registration, USAID will inform the applicant in 
writing of the denial with a specific statement of those conditions and 
documentation requirements of registration that the applicant has 
failed to satisfy.
    (b) Reconsideration. An applicant may, after receipt of a 
notification of denial of registration, resubmit its application for 
reconsideration within the timeframe as designated by USAID. USAID will 
inform, in writing, the applicant resubmitting its application of 
USAID's decision upon resubmission.
    (c) Resubmission. An applicant may at any time resubmit a new 
application for registration.


Sec. 203.7  Termination of registration.

    (a) USAID may terminate registration for any of the following 
reasons:
    (1) Relinquished voluntarily by the registrant upon written notice 
to USAID;
    (2) Terminated by USAID if registrant does not submit annual 
documentation within 180 days after its fiscal year end;
    (3) Terminated by USAID if registrant has no overseas expenditures 
within three consecutive years;

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    (4) Terminated by USAID for failure of the registrant to comply 
with conditions of registration;
    (5) Terminated by USAID if registrant uses promotional material or 
advertisement suggesting the fact of registration is an endorsement; or
    (6) Terminated by USAID if registrant refuses to transfer to USAID 
any records, documents, or information that are referred to in this 
regulation and are within registrant's control, or copies of such 
records or documents, within a reasonable time after requested by 
USAID.
    (b) Termination by USAID shall include prior written notice to the 
registrant of the grounds for the proposed termination and opportunity 
for the registrant to file a written statement within 30 days of 
receipt of the written notice as to why its registration should not be 
terminated. USAID will inform, in writing, registrant requesting such 
reconsideration of USAID's decision. In addition, USAID may, at its own 
discretion, reconsider a termination of registration at any time.


Sec. 203.8  Access to records and communications.

    (a) All records, reports, and other documents that are made 
available to USAID pursuant to this part shall be made available for 
public inspection and copying pursuant to the Freedom of Information 
Act and other applicable law.
    (b) All communications to applicants and registrants by USAID are 
made to the organization's principal executive office, not the 
organization's registered office or other address.


Sec. 203.9  Delegation of authority.

    The Assistant Administrator for the Bureau for Democracy, Conflict 
and Humanitarian Assistance is delegated by the Administrator the 
authority to administer the registration process, including the 
authority to waive, withdraw, or amend any or all of the provisions of 
the regulations in this part.

    Dated: April 30, 2002.
Karl Schwartz,
Chief, Information and Program Support Division, Office of Private and 
Voluntary Cooperation, Bureau for Democracy, Conflict and Humanitarian 
Assistance.
[FR Doc. 02-11243 Filed 5-6-02; 8:45 am]
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