[Federal Register Volume 67, Number 199 (Tuesday, October 15, 2002)]
[Rules and Regulations]
[Pages 63536-63537]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-26108]


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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: Final rule.

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SUMMARY: The Rural Business-Cooperative Service (RBS) adopts its 
interim rule published May 16, 2001 (66 FR 27013-27014), as a final 
rule without change. This action makes the revision to the definition 
of small and emerging private business enterprise final. The intended 
effect will ensure that grantees can assist small businesses in rural 
areas without eligibility restrictions for the use of technological 
innovations or commercialization of new products or processes.

EFFECTIVE DATE: October 15, 2002.

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 TDD 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 rule.

Intergovernmental Review

    The Rural Business Enterprise Grant (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 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

[[Page 63537]]

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 1 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.

Executive Order 13132

    It has been determined under Executive Order 13132, Federalism, 
that this rule does not have sufficient federalism implications to 
warrant the preparation of a Federalism Assessment. The provisions 
contained in this rule will not have a substantial direct effect on 
States or their political subdivisions or on the distribution of power 
and responsibilities among the various levels of government.

Background

    This regulatory package is an RBS initiative to make the RBEG 
Program more effective at stimulating economic development by reducing 
certain eligibility requirements for small and emerging private 
business enterprises (small business) located in rural areas. There has 
been much confusion on the definition of small business since it was 
first published in the Federal Register on 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 and emerging 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 and emerging 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 that the 
FmHA interpretation is not consistent with the actual regulatory 
language. Therefore, the Agency wants to correct the definition 
language and make it retroactive from August 11, 1988, so the revised 
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 Comments

    This rule was published in the Federal Register as an interim rule 
on May 16, 2001 (66 FR 27013-27014). There were five comments received 
regarding the small and emerging private business enterprise definition 
change. Three comments were actually requests for general program 
information. One comment concerned the need to do a survey to prove 
that those benefiting from the program were all low-income residents. 
There is no such regulatory requirement in the RBEG Program. This 
program directly benefits small businesses rather than residents. The 
last comment suggested that for-profit business enterprises be eligible 
to receive grant funds to do technical assistance services. The 
authorizing statute for the RBEG program, section 310B(c) of the 
Consolidated Farm and Rural Development Act, 7 U.S.C. 1932(c), only 
allows for private nonprofit corporations and public bodies, which 
includes Federally recognized Indian Tribes, to be eligible to receive 
grant funds. However, if a grantee does not have the expertise, it may 
contract with a for-profit business to provide the necessary technical 
assistance services to the benefiting small businesses.

List of Subjects in 7 CFR Part 1942

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

PART 1942--ASSOCIATIONS

    Accordingly, the interim rule amending 7 CFR part 1942 which was 
published May 16, 2001 (66 FR 27013-27014), is adopted as a final rule 
without change.

    Dated: October 4, 2002.
Thomas C. Dorr,
Under Secretary, Rural Development.
[FR Doc. 02-26108 Filed 10-11-02; 8:45 am]
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