[Federal Register Volume 67, Number 236 (Monday, December 9, 2002)]
[Notices]
[Pages 72904-72914]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-31056]


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

DEPARTMENT OF AGRICULTURE

Rural Utilities Service


Assistance to High Energy Cost Rural Communities

AGENCY: Rural Utilities Service, USDA.

ACTION: Notice of funding availability (NOFA).

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

SUMMARY: The Rural Utilities Service (RUS) of the United States 
Department of Agriculture (USDA) announces the availability of $14.9 
million in a new program of competitive grants to assist communities 
with extremely high energy costs. This grant program is authorized 
under section 19 of the Rural Electrification Act of 1936 (7 U.S.C. 
1918a). The grant funds may be used to acquire, construct, extend, 
upgrade, or otherwise improve energy generation, transmission, or 
distribution facilities serving communities in which the average 
residential expenditure for

[[Page 72905]]

home energy exceeds 275 percent of the national average. Eligible 
applicants include persons, States, political subdivisions of States, 
and other entities organized under State law. Federally-recognized 
Indian tribes and tribal entities are eligible applicants. This notice 
describes the eligibility and application requirements, the criteria 
that will be used by RUS to award funding and information on how to 
obtain application materials.

DATES: All applications must be postmarked or delivered to RUS no later 
than February 7, 2003.
    Applications will be accepted on publication of this notice.

ADDRESSES: Applications are to be submitted to the Rural Utilities 
Service, U.S. Department of Agriculture, 1400 Independence Avenue, SW, 
STOP 1522, Room 4034 South Building, Washington, DC 20250-1522. 
Applications should be marked ``Attention: High Energy Cost Community 
Grant Program.''

FOR FURTHER INFORMATION CONTACT: Karen Larsen, Management Analyst, U.S. 
Department of Agriculture, Rural Utilities Service, Electric Program, 
1400 Independence Avenue, SW, STOP 1560, Room 4037 South Building, 
Washington, DC 20250-1560. Telephone 202-720-9545, Fax 202-690-0717, 
email [email protected].

SUPPLEMENTARY INFORMATION:

Programs Affected

    This program is listed in the Catalog of Federal Domestic 
Assistance Programs (CFDA) as ``Assistance to High Energy Cost Rural 
Communities.'' The CFDA number assigned to this program is 10.859.

Executive Order 12372

    This program is not subject to the requirements of Executive Order 
12372, ``Intergovernmental Review of Federal Programs,'' as implemented 
under USDA's regulations at 7 CFR part 3015.

Information Collection and Recordkeeping Requirements

    Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) (the 
``Act''), OMB must approve all ``collections of information'' by RUS. 
The Act defines ``collection of information'' as a requirement for 
``answer to * * * identical reporting or recordkeeping requirements 
imposed on ten or more persons * * *.'' (44 U.S.C. 3502(3)(A).) RUS has 
determined that it is likely that fewer than ten applications will be 
received because of stringent eligibility requirements. Therefore, this 
NOFA does not involve the imposition of identical reporting and 
recordkeeping requirements on ten or more persons and does not require 
approval under the Act. If RUS receives ten or more applications in 
response to this NOFA, the Agency will submit a request for approval 
under the Paperwork Reduction Act.

Background

    RUS is making available $14.9 million in competitive grants through 
a new financial assistance program under the Rural Electrification Act 
of 1936 (7 U.S.C. 901 et seq.) (the ``RE Act''). Under section 19 of 
the RE Act (7 U.S.C. 918a), RUS is authorized to make grants to 
``acquire, construct, extend, upgrade, and otherwise improve energy 
generation, transmission, or distribution facilities'' serving 
communities in which the average residential expenditure for home 
energy is at least 275 percent of the national average residential 
expenditure for home energy.''
    The purpose of this new program is to provide financial assistance 
for a broad range of energy facilities, equipment and related 
activities to offset the impacts of extremely high residential energy 
costs on eligible communities. Grants funds may be used to ``acquire, 
construct, extend, upgrade and otherwise improve energy generation, 
transmission, or distribution facilities' serving extremely high energy 
cost communities. Eligible facilities include on-grid and off-grid 
renewable energy systems and implementation of cost-effective demand 
side management and energy conservation programs that benefit eligible 
communities.
    Eligible applicants include ``persons, States, political 
subdivisions of States, and other entities organized under the laws of 
States.'' Under section 13 of the RE Act (7 U.S.C. 913) ``the term 
person shall be deemed to mean any natural person, firm, corporation, 
or association.'' Indian tribes and tribal entities are eligible 
applicants and beneficiaries under this program.
    No cost sharing or matching funds are required as a condition of 
eligibility under this grant program. However, RUS will consider other 
financial resources available to the grantee and any voluntary 
commitment of matching funds or other contributions in assessing the 
grantee's capacity to carry out the grant program successfully and will 
award additional evaluation points to proposals that include such 
contributions.
    As a further condition of each grant, section 19(b)(2) of the RE 
Act requires that planning and administrative expenses may not exceed 4 
percent of the grant funds.
    This NOFA provides an overview of the grant program, eligibility 
and application requirements, and selection criteria. Applicants should 
consult the detailed grant Application Guide for additional information 
on application requirements and copies of all required forms and 
certifications. The Application Guide is available on the Internet from 
the RUS Web site at <http://www.usda.gov/rus/electric/hecgp/index.htm. The application guide may also be requested from 
the Agency contact listed above.

Definitions

    As used in this NOFA:
    Administrator means the Administrator of the RUS.
    Agency means the Rural Utilities Service.
    Application Guide means the Application Guide prepared by RUS for 
the High Energy Cost Grant program containing detailed instructions for 
determining eligibility and preparing grant applications, and copies of 
required forms, questionnaires, and model certifications.
    Census block means the smallest geographic entity for which the 
Census Bureau collects and tabulates decennial census information and 
which are defined by boundaries shown on census maps.
    Census designated place (CDP) means a statistical entity recognized 
by the U.S. Census comprising a dense concentration of population that 
is not within an incorporated place but is locally identified by a name 
and with boundaries defined on census maps.
    Extremely high energy costs means local community average 
residential energy costs that are at least 275 percent of one or more 
home energy cost benchmarks identified by RUS based on the national 
average residential energy expenditures as reported by the Energy 
Information Administration (EIA).
    Home energy means any energy source or fuel used by a household 
including electricity, natural gas, fuel oil, kerosene, liquefied 
petroleum gas (propane), other petroleum products, wood and other 
biomass fuels, coal, wind, and solar energy. Fuels used for subsistence 
activities in remote rural areas are also included. Other 
transportation fuel uses are not included, however.
    Home energy cost benchmarks means the criteria established by RUS 
for eligibility as an extremely high energy cost community. Home energy 
cost benchmarks are calculated for total annual household energy 
expenditures;

[[Page 72906]]

total annual expenditures for individual fuels; annual average per unit 
energy costs for primary home energy sources at 275 percent of EIA 
estimates of national average residential energy expenditure.
    Indian Tribe means a Federally recognized tribe as defined under 
section 4 of the Indian Self-Determination and Education Assistance Act 
(25 U.S.C. 450b) to include ``* * *any Indian tribe, band, nation, or 
other organized group or community, including any Alaska Native village 
or regional or village corporation as defined in or established 
pursuant to the Alaska Native Claims Settlement Act (85 Stat. 688) [43 
U.S.C. 1601 et seq.], which is recognized as eligible for the special 
programs and services provided by the United States to Indians because 
of their status as Indians.''
    Person means any natural person, firm, corporation, or association 
and for purposes of this notice, includes Indian tribes and tribal 
entities.
    Primary home energy source means the energy source that is used for 
space heating or cooling, water heating, cooking, and lighting. A 
household or community may have more than one primary home energy 
source.
    State rural development initiative means a rural economic 
development program funded by or carried out in cooperation with a 
State agency.
    Target area means the geographic area to be served by the grant.
    Target community means the unit or units of local government in 
which the target area is located.
    Tribal entity means a legal entity that is owned, controlled, 
sanctioned, or chartered by the recognized governing body of an Indian 
tribe as defined in this NOFA.

Award Information

    The total amount of funds available for grants under this notice is 
$14.9 million. The number of grants awarded under this NOFA will depend 
on the number of applications submitted, the amount of grant funds 
requested, and the quality and competitiveness of applications 
submitted.
    The funding instrument available under this NOFA will be a grant 
agreement. Grants awarded under this notice must comply with all 
applicable USDA and Federal regulations concerning financial 
assistance, with the terms of this notice, and with the requirements of 
section 19 of the RE Act. Grants made under this NOFA will be 
administered under and are subject to USDA financial assistance 
regulations at 7 CFR parts 3015, 3016, 3017, 3018, 3019, and 3052, as 
applicable. The maximum amount of grant assistance that will be 
considered for funding in a grant application under this notice is 
$5,000,000. The minimum amount of assistance for a grant application 
under this program is $75,000. The award period will generally be for 
36 months, however, longer periods may be approved depending on the 
project involved.
    All timely submitted and complete applications will be reviewed for 
eligibility and rated according to the criteria described in this NOFA. 
Applications will be ranked in order of their numerical scores on the 
rating criteria and forwarded to the RUS Administrator. The 
Administrator will review the rankings and the recommendations of the 
rating panels. The RUS Administrator will then fund grant applications 
in rank order.
    RUS reserves the right not to award any or all the funds made 
available under this notice, if in the sole opinion of the 
Administrator, the grant proposals submitted are not deemed feasible. 
RUS also reserves the right to partially fund grants if grant 
applications exceed the available funds. RUS will advise applicants if 
it cannot fully fund a grant request.

Eligible Projects

    Grantees must use grant funds to acquire, construct, extend, 
upgrade, or otherwise improve energy generation, transmission, or 
distribution facilities serving eligible communities. All energy 
generation, transmission, and distribution facilities, equipment, and 
associated services used to provide electricity, natural gas, home 
heating fuels, and other residential energy service are eligible. On-
grid and off-grid renewable energy projects, and energy efficiency, and 
energy conservation projects that serve eligible communities are 
included.
    Grants may cover up to the full costs of any eligible projects 
subject to the statutory condition that no more than 4 percent of grant 
funds may be used for the planning and administrative expenses of the 
grantee.
    The project must serve communities that meet the extremely high 
energy cost eligibility requirements described in this NOFA. The 
grantee must demonstrate that the proposed project will benefit 
eligible communities. Additional information on eligible activities is 
contained in the Application Guide.

Ineligible Grant Purposes

    Grant funds cannot be used for: preparation of the grant 
application, fuel purchases, routine maintenance or other operating 
costs, and purchase of equipment, structures, or real estate not 
directly associated with provision of residential energy services. In 
general, grant funds may not be used to support projects that primarily 
benefit areas outside of eligible target communities. However, grant 
funds may be used to finance an eligible target community's 
proportionate share of a larger energy project.
    Consistent with USDA policy, grant funds awarded under this program 
generally cannot be used to replace other USDA assistance or to 
refinance or repay outstanding RUS loans. Grant funds may, however, be 
used in combination with other USDA assistance programs including RUS 
loans. Grants may be applied toward grantee contributions under other 
USDA programs depending on the terms of those programs. For example, an 
applicant may propose to use grant funds to offset the costs of 
electric system improvements in extremely high cost areas and as a cost 
contribution as part of the utility's expansion of its distribution 
system financed in whole or part by an RUS electric loan. An applicant 
may propose to finance a portion of an energy project for an extremely 
high energy cost community through this grant program and secure the 
remaining project costs through a loan or loan guarantee or grant from 
RUS or other sources.
    Each grant applicant must demonstrate the economic and technical 
feasibility of its proposed project. Activities or equipment that would 
commonly be considered as research and development activities, or 
commercial demonstration projects for new energy technologies will not 
be considered as technologically feasible projects and would, thus, be 
ineligible grant purposes. However, grant funds may be used for 
projects that involve the innovative use or adaptation of energy-
related technologies that have been commercially proven.

Eligible Applicants

    Under Section 19 eligible applicants include ``persons, States, 
political subdivisions of States, and other entities organized under 
the laws of States'' (7 U.S.C. 918a). Under section 13 of the RE Act, 
the term ``person'' means ``any natural person, firm, corporation, or 
association'' (7 U.S.C. 913). Examples of eligible applicants include: 
for-profit and nonprofit organizations, including corporations, 
associations, partnerships (including limited liability partnerships), 
cooperatives, trusts, and sole proprietorships; State and local

[[Page 72907]]

governments, counties, cities, towns, boroughs, or other agencies or 
units of State or local governments; Indian tribes, other tribal 
entities, Alaska Native Corporations; and individuals.
    An individual is an eligible applicant under this program, however, 
the proposed grant project must provide community benefits and not be 
for the sole benefit of an individual applicant.
    All applicants must demonstrate the legal capacity to enter into a 
binding grant agreement with the Federal Government at the time of the 
award and to carry out the proposed grant funded project according to 
its terms.

Eligible Communities

    The grant project must benefit communities with extremely high 
energy costs. The RE Act defines an extremely high energy cost 
community as one in which ``the average residential expenditure for 
home energy is at least 275 percent of the national average residential 
expenditure for home energy'' as determined by the Energy Information 
Administration (EIA) using the most recent data available. 7 U.S.C. 
918a.
    The statutory requirement that community residential expenditures 
for home energy exceed 275 percent of national average establishes a 
very high threshold for eligibility under this program. RUS has 
calculated high energy cost benchmarks based on EIA national average 
home energy expenditure data. Communities must meet one or more high 
energy cost benchmarks to qualify as an eligible beneficiary of a grant 
under this program. Based on available published information on 
residential energy costs, RUS anticipates that only those communities 
with the highest energy costs across the country will qualify under 
this congressionally-mandated standard.
    The EIA's Residential Energy Consumption and Expenditure Surveys 
(RECS) and reports provide the baseline national average household 
energy costs that were used by RUS for establishing extremely high 
energy cost community eligibility criteria for this grant program. The 
RECS data base and reports provide national and regional information on 
residential energy use, expenditures, and housing characteristics. The 
latest available RECS home energy expenditure estimates are based on 
1997 survey data and are shown in Table 1.

    Table 1.--EIA Average Annual Household Energy Expenditures and RUS Extremely High Energy Cost Eligibility
                                               Criteria Benchmarks
----------------------------------------------------------------------------------------------------------------
                                            Average total                                 Extremely high energy
                 Fuel                        consumption            National average          cost benchmark
----------------------------------------------------------------------------------------------------------------
Average annual household expenditure:
    Electricity......................  10,219 kilowatt hours    $871 per year..........  $2,341 per year
                                        (kWh).
    Natural Gas......................  83 thousand cubic feet.  579 per year...........  1,547 per year
    Fuel Oil.........................  730 gallons............  714 per year...........  1,870 per year
    LPG/Propane......................  488 gallons............  500 per year...........  1,266 per year
        Total Household Energy Use...  101 million Btus.......  1,338 per year.........  3,613 per year
Annual average per unit residential
 energy costs:
    Electricity......................  .......................  0.085 per kWh..........  0.229 per kWh
    Natural Gas......................  .......................  6.96 per thousand cubic  18.78 per thousand
                                                                 feet.                    cubic feet
    Fuel Oil.........................  .......................  0.96 per gallon........  2.62 per gallon
    LPG/Propane......................  .......................  1.03 per gallon........  2.72 per gallon
        Total Household Energy cost    .......................  13.25 per million Btus.  36.10 per million Btus
         per Btus.
----------------------------------------------------------------------------------------------------------------
Sources: U.S. Department of Energy, Energy Information Administration, Residential Energy Consumption and
  Expenditure Surveys 1997. The RUS benchmarks calculations include adjustments to reflect the uncertainties
  inherent in EIA's statistical methodology for estimating home energy costs. The benchmarks are set based on
  the EIA's lower range estimates using the specified EIA methods.

    Extremely high energy costs in rural and remote communities 
typically result from a combination of factors. The most prevalent 
include high energy consumption, high per unit energy costs in local 
markets, limited availability of energy sources, extreme climate 
conditions, and housing characteristics. The relative impacts of these 
conditions exhibit regional and seasonal diversity. Market factors have 
created an additional complication in recent years as the prices of the 
major commercial residential energy sources--electricity, fuel oil, 
natural gas, and LPG/propane--have fluctuated dramatically in some 
areas.
    RUS has established community eligibility criteria based on EIA's 
estimates of national average residential energy expenditures. Table 1 
shows the national averages and RUS benchmark criteria for extremely 
high energy costs. The applicant must demonstrate that each community 
in the grant's proposed target area exceeds one or more of these high 
energy cost benchmarks to be eligible for assistance under this 
program.

RUS High Energy Cost Benchmarks.

    The benchmarks measure extremely high energy costs for residential 
consumers. These benchmarks were calculated using EIA's estimates of 
national average residential energy expenditures per household and by 
primary home energy source. The benchmarks recognize the diverse 
factors that contribute to extremely high home energy costs in rural 
communities. The benchmarks allow extremely high energy cost 
communities several alternatives for demonstrating eligibility. 
Communities may qualify based on: total annual household energy 
expenditures; total annual expenditures for commercially-supplied 
primary home energy sources, i.e., electricity, natural gas, oil, or 
propane; or average annual per unit home energy costs. By providing 
alternative measures for demonstrating eligibility, the benchmarks 
reduce the burden on potential applicants created by the limited public 
availability of comprehensive data on local community energy 
consumption and expenditures.
    RUS is adopting the following high energy cost benchmarks as 
eligibility criteria for competitive grant applications submitted in 
response to this NOFA. A target community or target area will qualify 
as an extremely high cost energy community if it meets

[[Page 72908]]

one or more of the energy cost benchmarks described below.
    1. Extremely High Average Annual Household Expenditure For Home 
Energy. The target area or community exceeds one or more of the 
following:
    [sbull] Average annual residential electricity expenditure of 
$2,341 per household;
    [sbull] Average annual residential natural gas expenditure of 
$1,547 per household;
    [sbull] Average annual residential expenditure on fuel oil of 
$1,870 per household;
    [sbull] Average annual residential expenditure on propane or 
liquefied petroleum gas (LPG) as a primary home energy source of $1,266 
per household; or
    [sbull] Average annual residential energy expenditure (for all non-
transportation uses) of $3,613 per household.
    2. Extremely High Average per unit energy costs. The average 
residential per unit cost for major commercial energy sources in the 
target area or community exceeds one or more of the following:
    [sbull] Annual average revenues per kilowatt hour for residential 
electricity customers of $0.229 per kilowatt hour (kWh);
    [sbull] Annual average residential natural gas price of $18.78 per 
thousand cubic feet;
    [sbull] Annual average residential fuel oil price of $2.62 per 
gallon;
    [sbull] Annual average residential price of propane or LPG as a 
primary home energy source of $2.72 per gallon; or
    [sbull] Total annual average residential energy cost on a Btu basis 
of $36.13 per million Btu.\1\
---------------------------------------------------------------------------

    \1\ Note: Btu is the abbreviation for British Thermal Unit, a 
standard energy measure. A Btu is the quantity of heat needed to 
raise the temperature of one pound of water 1 degree Fahrenheit at 
or near 39.2 degrees Fahrenheit. In estimating average household per 
unit energy cost on a Btu basis, the costs of different home energy 
sources are converted to a standard Btu basis. The Application Guide 
contains additional information on calculating per unit costs on a 
Btu basis for major home energy sources.
---------------------------------------------------------------------------

Supporting Energy Cost Data

    The applicant must include information that demonstrates its 
eligibility under the RUS high energy cost benchmarks for the target 
communities and the target areas. The applicant must supply 
documentation or references for its sources for actual or estimated 
home energy expenditures or equivalent measures to support eligibility. 
Generally, the applicant will be expected to use historical residential 
energy cost or expenditure information for the local energy provider 
serving the target community or target area to determine eligibility. 
Other potential sources of home energy related information include 
Federal and State agencies, local community energy providers such as 
electric and natural gas utilities and fuel dealers, and commercial 
publications. The Application Guide includes a list of EIA resources on 
residential energy consumption and costs that may be of assistance.
    The grant applicant must establish eligibility for each community 
in the project's target area. To determine eligibility, the applicant 
must identify each community included in whole or in part within the 
target areas and provide supporting actual or estimated energy 
expenditure data for each community. The smallest area that may be 
designated as a target area is a 2000 Census block. This minimum size 
is necessary to enable a determination of population size.
    Potential applicants can compare the RUS benchmark criteria to 
available information about local energy use and costs to determine 
their eligibility. Applicants should demonstrate their eligibility 
using historical energy use and cost information. Where such 
information is unavailable or does not adequately reflect the actual 
costs of supporting average home energy use in a local community, RUS 
will consider estimated commercial energy costs. The Application Guide 
includes examples of circumstances where estimated energy costs are 
used.
    EIA does not collect or maintain data on home energy expenditures 
in sufficient detail to identify specific rural localities as extremely 
high energy cost communities. Therefore, grant applicants will have to 
provide information on local community energy costs from other sources 
to support their applications.
    In many instances, historical community energy cost information can 
be obtained from a variety of public sources or from local utilities 
and other energy providers. For example, EIA publishes monthly and 
annual reports of residential prices by State and by service area for 
electric utilities and larger natural gas distribution companies. 
Average residential fuel oil and propane prices are reported regionally 
and for major cities by government and private publications. Many State 
agencies also compile and publish information on residential energy 
costs to support State programs.

Use of Estimated Home Energy Costs

    Where historical community energy cost data are incomplete or 
lacking or where community-wide data do not accurately reflect the 
costs of providing home energy services in the target area, the 
applicant may substitute estimates based on engineering standards. The 
estimates should use available community, local, or regional data on 
energy expenditures, consumption, housing characteristics and 
population. Estimates are also appropriate where the target area does 
not presently have centralized commercial energy services at a level 
that is comparable to other residential customers in the State or 
region. For example, local commercial energy cost information may not 
be available where the target area is without local electric service 
because of the high costs of connection. Engineering cost estimates 
reflecting the incremental costs of extending service could reasonably 
be used to establish eligibility for areas without grid-connected 
electric service. Estimates also may be appropriate where historical 
energy costs do not reflect the costs of providing a necessary upgrade 
or replacement of energy infrastructure to maintain or extend service 
that would raise costs above one or more of benchmarks.
    Information to support high energy cost eligibility is subject to 
independent review by RUS. Applications that contain information that 
is not reasonably based on credible sources of information and sound 
estimates will be rejected. Where appropriate, RUS may consult standard 
sources to confirm the reasonableness of information and estimates 
provided by applicants in determining eligibility, technical 
feasibility, and adequacy of proposed budget estimates.

Coordination With State Rural Development Initiatives

    USDA encourages the coordination of grant projects under this 
program with State rural development initiatives. There is no 
requirement that the grant proposal receive the concurrence or approval 
of State officials as a condition of eligibility under this program. 
RUS will, however, award additional priority points to proposals that 
are coordinated with and support rural development initiatives within a 
State. The Applicant should describe how the proposed project will 
support State rural development initiatives and provide documentation 
evidencing any concurrence or endorsement by State rural development 
officials.
    If an Applicant is an entity directly involved in rural development 
efforts, such as a State, local, or tribal rural development agency or 
a participant in an existing USDA Rural Development program, the 
Applicant may qualify for

[[Page 72909]]

additional points by describing how its proposed project supports its 
efforts.

How To Apply

    All applications must be prepared and submitted in compliance with 
this NOFA and the Application Guide. The Application Guide contains 
additional information on the grant program and sources of information 
for use in preparing applications and copies of the required 
application forms. The Guide may be downloaded from RUS Web site 
<http://www.usda.gov/rus/electric/hecgp/index.htm or 
requested from RUS.

How To Request An Application Package

    Application packages, including required forms, may be requested 
from: Karen Larsen, Management Analyst, U.S. Department of Agriculture, 
Rural Utilities Service, Electric Program, 1400 Independence Avenue, 
SW, STOP 1560, Room 4037 South Building, Washington, DC 20250-1560. 
Telephone 202-720-9545, Fax 202-690-0717, email [email protected].

What To Include In The Application

    Applicants should follow the directions in this notice and the 
Application Guide in preparing their applications. The completed 
application should be assembled in the order specified with all pages 
numbered sequentially or by section. The applicant must submit the 
following information for the application to be complete and considered 
for funding:
    Part A. A Completed SF 424, ``Application for Federal Assistance.'' 
This form must be signed by a person authorized to submit the proposal 
on behalf of the applicant.
    Part B. Grant Proposal. The grant proposal is a narrative 
description prepared by the applicant that establishes the applicant's 
eligibility, identifies the eligible extremely high energy cost 
communities to be served by the grant, and describes the proposed grant 
project, the potential benefits of the project, and a proposed budget. 
The grant proposal should contain the following sections in the order 
indicated.
    1. Executive Summary. The Executive Summary is a one to two page 
narrative summary that: (a) Identifies the applicant, project title, 
and the key contact person with telephone and fax numbers, mailing 
address and email address; (b) specifies the amount of grant funds 
requested; (c) provides a brief description of the proposed program 
including the eligible rural communities and residents to be served, 
activities and facilities to be financed, and how the grant project 
will offset or reduce the target community's extremely high energy 
costs; and (d) identifies the associated rural development initiative 
that the project supports. The Executive Summary should also indicate 
whether the applicant is claiming additional points under any of the 
criteria designated as USDA priorities under this NOFA.
    2. Table of Contents: The application package must include a table 
of contents immediately after the Executive Summary with page numbers 
for all required sections, forms, and appendices.
    3. Applicant Eligibility: This section includes a narrative 
statement that identifies the applicant and supporting evidence 
establishing that the applicant has or will have the legal authority to 
enter into a financial assistance relationship with the Federal 
Government. Examples of supporting evidence of applicant's legal 
existence and eligibility include: a reference to or copy of the 
relevant statute, regulation, executive order, or legal opinion 
authorizing a State, local, or tribal government program, articles of 
incorporation or certificates of incorporation for corporate 
applicants, partnership or trust agreements, board resolutions. 
Applicants must also be free of any debarment or other restriction on 
their ability to contract with the Federal Government.
    4. Community Eligibility: This section provides a narrative 
description of the community or communities to be served by the grant 
and supporting information to establish eligibility. The narrative must 
show that the proposed grant project's target area or areas are located 
in one or more communities where the average residential energy costs 
exceed one or more of the benchmark criteria for extremely high energy 
costs as described in this NOFA. The narrative should clearly identify 
the location and population of the areas to be aided by the grant 
project and their energy costs and the population of the local 
government division in which they are located. Local energy providers 
and sources of high energy cost data and estimates should be clearly 
identified. Neither the applicant nor the project must be physically 
located in the extremely high energy cost community, but the funded 
project must serve an eligible community.
    The population estimates should be based on the results of the 2000 
Census available from the U.S. Census Bureau. Additional information 
and exhibits supporting eligibility may include maps, summary tables, 
and references to statistical information from the U.S. Census, the 
Energy Information Administration, other Federal and State agencies, or 
private sources. The Application Guide includes additional information 
and sources that the applicant may find useful in establishing 
community eligibility.
    5. Coordination With State Rural Development Initiatives: In this 
section the applicant must describe how the proposed grant will be 
coordinated with rural development efforts. The Applicant should 
provide supporting references or documentation.
    6. Project Overview: This section includes the applicant's 
narrative overview of its proposed project. The narrative must address 
the following:
    a. Project Design: This section must provide a narrative 
description of the project including a proposed scope of work 
identifying major tasks and proposed schedules for task completion, a 
detailed description of the equipment, facilities and associated 
activities to be financed with grant funds, the location of the 
eligible extremely high energy cost communities to be served, and an 
estimate of the overall duration of the project. The Project Design 
description should be sufficiently detailed to support a finding of 
technical feasibility. Proposed projects involving construction, 
repair, replacement, or improvement of electric generation, 
transmission, and distribution facilities must generally be consistent 
with the standards and requirements for projects financed with RUS 
loans and loan guarantees as set forth in RUS Electric Program 
Regulations and Bulletins and may reference these requirements.
    b. Project Management: This section must provide a narrative 
describing the applicant's capabilities and project management plans. 
The description should address the applicant's organizational 
structure, method of funding, legal authority, key personnel, project 
management experience, staff resources, the goals and objectives of the 
program or business, and any related services provided to the project 
beneficiaries. A current financial statement and other supporting 
documentation may be referenced here and included under the 
Supplementary Material section. If the applicant proposes to use 
affiliated entities, contractors, or subcontractors to provide services 
funded under the grant, the applicant must describe the identities, 
relationship, qualifications, and experience of these affiliated 
entities. The experience and capabilities of these entities will be 
reviewed by the rating panel. If the applicant proposes to

[[Page 72910]]

secure equipment, design, construction, or other services from non-
affiliated entities, the applicant must briefly describe how it plans 
to procure and/or contract for such equipment or services. The 
Applicant should provide information that will support a finding that 
the combination of management team's experience, resources and project 
structure will enable successful completion of the project.
    c. Regulatory and other approvals: The applicant must identify any 
other regulatory or other approvals required by other Federal, State, 
local, or tribal agencies, or by private entities as a condition of 
financing that are necessary to carry out the proposed grant project 
and its estimated schedule for obtaining the necessary approvals.
    d. Benefits of the proposed project: The applicant should describe 
how the proposed project would benefit the target area and eligible 
communities. The description must specifically address how the project 
will improve energy generation, transmission, or distribution 
facilities serving the target area. The applicant should clearly 
identify how the project addresses the energy needs of the community 
and include appropriate measures of project success such as, for 
example, expected reductions in household or community energy costs, 
avoided cost increases, enhanced reliability, or economic or social 
benefits from improvements in energy services available to the target 
community. The applicant should include quantitative estimates of cost 
or energy savings and other benefits. The applicant should provide 
documentation or references to support its statements about cost-
effectiveness savings and improved services. The applicant should also 
describe how it plans to measure and monitor the effectiveness of the 
program in delivering its projected benefits.
    7. Proposed Project Budget: The applicant must submit a proposed 
budget for the grant program on SF 424A, ``Budget Information--Non-
Construction Programs'' or SF-424C, ``Standard Form for Budget 
Information-Construction Programs,'' as applicable. The budget must 
document that planned administrative and other expenses of the project 
sponsor will not total more than 4 percent of grant funds. The 
applicant must also identify the source and amount of any other 
contributions of funds or services that will be used to support the 
proposed project. This program does not require supplemental or 
matching funds for eligibility, however RUS will award additional 
rating points for programs that include a match of other funds or like-
kind contributions to support the project.
    8. Supplementary Material: The applicant may append any additional 
information relevant to the proposal or which may qualify the 
application for extra points under the evaluation criteria described in 
this NOFA.
    Part C. Additional Required Forms and Certifications: In order to 
establish compliance with other Federal requirements for financial 
assistance, the Applicant must execute and submit with the initial 
application the following forms and certifications:
    [sbull] SF 424B, ``Assurances--Non-Construction Programs'' or SF 
424D, ``Assurances--Construction Programs'' (as applicable).
    [sbull] SF LLL, ``Disclosure of Lobbying Activities.''
    [sbull] Drug-free Workplace Certification: Form AD-1049, 
``Certification Regarding Drug-free Workplace Requirements for Grantees 
other than Individuals;'' Form AD-1050, ``Certification Regarding Drug-
free Workplace Requirements for Individuals;'' or Form AD-1052, 
``Certification Regarding Drug-free Workplace Requirements, States and 
State Agencies.'' (State applicants that have already submitted this 
certification to USDA may reference their prior filing and need not 
submit a new certification.)
    [sbull] ``Certification Regarding Debarment, Suspension and Other 
Responsibility Matter--Primary Covered Transactions'' as required under 
7 CFR part 3017, Appendix A. Certifications for individuals, 
corporations, nonprofit entities, Indian tribes, partnerships.
    [sbull] Environmental Profile. The environmental profile included 
in the Application Guide solicits information about project 
characteristics and site-specific conditions that may involve 
environmental, historic preservation, and other resources. The profile 
will be used by RUS to identify selected projects that may require 
additional environmental reviews, assessments, or environmental impact 
statements before a final grant award may be approved. A copy of the 
environmental profile and instructions for completion are included in 
the Application Guide.

Submitting the Application

    Applicants must submit one original application that includes 
original signatures on all required forms and certifications and two 
copies. Applications should be submitted on 8\1/2\ by 11 inch white 
paper. Supplemental materials, such as maps, charts, plans, and 
photographs may exceed this size requirement.
    A completed application must contain all required parts in the 
order indicated in the above section on ``What to Include in the 
Application.'' The application package should be paginated either 
sequentially or by section.
    The completed application package and two copies must be delivered 
to RUS headquarters in Washington, DC at the address listed at the 
beginning of this notice using United States Mail, overnight delivery 
service, or by hand. At this time, RUS is not able to accept 
applications online, by email or fax. Applicants should be advised that 
regular mail deliveries to Federal Agencies, especially of oversized 
packages and envelopes, continues to be delayed because of increased 
security screening requirements. Applicants may wish to consider using 
Express Mail or a commercial overnight delivery service instead of 
regular mail. Applicants wishing to hand deliver or use courier 
services for delivery should contact the Agency representative in 
advance to arrange for building access. RUS advises applicants that 
because of intensified security procedures at government facilities 
that any electronic media included in an application package may be 
damaged during security screening. If an applicant wishes to submit 
such materials, they should contact the agency representative for 
additional information.

Deadline for Submission and Late Applications

    Applications must be postmarked or delivered to RUS by February 7, 
2003. RUS will begin accepting applications on the date of publication 
of this NOFA. RUS will accept for review all applications postmarked or 
delivered to RUS by this deadline. Late applications will not be 
considered and will be returned to the Applicant.

Disclosure of Information

    All material submitted by the applicant may be made available to 
the public in accordance with the Freedom of Information Act (5 U.S.C. 
552) and USDA's implementing regulations at 7 CFR Part 1.

Review of Applications

    All applications for grants must be delivered to RUS at the address 
listed above or postmarked no later than February 7, 2003 to be 
eligible for grant funding. After the deadline has passed, RUS will 
review each application to determine whether it is complete and meets 
all of the eligibility requirements described in this NOFA.

[[Page 72911]]

    After the application closing date, RUS will not consider any 
unsolicited information from the applicant. RUS may contact the 
applicant for additional information or to clarify statements in the 
application required to establish applicant or community eligibility 
and completeness. Only applications that are complete and meet the 
eligibility criteria will be considered. RUS will not accept or solicit 
any additional information relating to the technical merits and/or 
economic feasibility of the grant proposal after the application 
closing date.
    RUS may establish one or more rating panels to review and rate the 
grant applications. These panels may include persons not currently 
employed by USDA.
    The panel will evaluate and rate all complete applications that 
meet the eligibility requirements using the selection criteria and 
weights described in this NOFA. As part of the proposal review and 
ranking process, panel members may make comments and recommendations 
for appropriate conditions on grant awards to promote successful 
performance of the grant or to assure compliance with other Federal 
requirements. The decision to include panel recommendations on grant 
conditions in any grant award will be at the sole discretion of the 
Administrator.
    RUS will use the ratings and recommendations of the panel(s) to 
rank applicants against other applicants. The rankings and 
recommendations will then be forwarded to the Administrator for final 
review and selection.
    Decisions on grant awards will be made by the RUS Administrator 
based on the application, and the rankings and recommendations of the 
rating panel. The Administrator will fund grant requests in rank order 
to the extent of available funds

Selection Criteria and Weights

    RUS will use the selection criteria described in this NOFA to 
evaluate and rate applications and will award points up to the maximum 
number indicated under each criterion. Applicants should carefully read 
the information on the rating criteria in this NOFA and the Application 
Guide and address all criteria. The maximum number of points that can 
be awarded is 100 points. RUS will award up to 65 points for project 
design and technical merit criteria and up to 35 points based on 
priority criteria for project or community characteristics that support 
USDA Rural Development and RUS program priorities.

Project Design and Technical Merit Criteria

    Reviewers will consider the soundness of applicant's approach, the 
technical feasibility of the project, the adequacy of financial and 
other resources, the competence and experience of the applicant and its 
team, the project goals and objectives, and community needs and 
benefits. A total of 65 points may be awarded under these criteria.
    A. Comprehensiveness and feasibility of approach. (Up to 30 points) 
Raters will assess the technical and economic feasibility of the 
project and how well its goals and objectives address the challenges of 
the extremely high energy cost community. The panel will review the 
proposed design, construction, equipment, and materials for the 
community energy facilities in establishing technical feasibility. 
Reviewers may propose additional conditions on the grant award to 
assure that the project is technically sound. Reviewers will consider 
the adequacy of the applicant's budget and resources to carry out the 
project as proposed. Reviewers will also evaluate how the applicant 
proposes to manage available resources such as grant funds, income 
generated from the facilities, and any other financing sources to 
maintain and operate a financially viable project once the grant period 
has ended.
    B. Demonstrated experience. (Up to 10 points) Reviewers will 
consider whether the applicant and its project team have demonstrated 
experience in successfully administering and carrying out projects that 
are comparable to that proposed in the grant application. RUS supports 
and encourages emerging organizations that desire to develop the 
internal capacity to improve energy services in rural communities. In 
evaluating the capabilities of entities without extensive experience in 
carrying out such projects, RUS will consider the experience of the 
project team and the effectiveness of the program design in 
compensating for lack of extensive experience.
    C. Community Needs. (Up to 15 points) Reviewers will consider the 
applicant's identification and documentation of eligible communities, 
their populations, and the applicant's assessment of community energy 
needs to be addressed by the grant project. Information on the severity 
of physical and economic challenges affecting eligible communities will 
be considered. Reviewers will weigh: (1) The applicant's analysis of 
community energy challenges and (2) why the applicant's proposal 
presents a greater need for Federal assistance than other competing 
applications. In assessing the applicant's demonstration of community 
needs, the rating panel will consider information in the narrative 
proposal addressing:
    (a) the burden placed on the community and individual households by 
extremely high energy costs as evidenced by such quantitative measures 
as, for example, total energy expenditures, per unit energy costs, 
energy cost intensity for occupied space, or energy costs as a share of 
average household income, and persistence of extremely high energy 
costs compared to national or statewide averages.
    (b) the hardships created by limited access to reliable and 
affordable energy services; and
    (c) the availability of other resources to support or supplement 
the proposed grant funding.
    D. Project Evaluation Methods. (Up to 5 points) Reviewers will 
consider the applicant's plan to evaluate and report on the success and 
cost-effectiveness of financed activities and whether the results 
obtained will contribute to program improvements for the applicant or 
for other entities interested in similar programs.
    E. Coordination with Rural Development Initiatives. (Up to 5 
points) Raters will assess how effectively the proposed project is 
coordinated with State rural development initiatives and is consistent 
with and supports these efforts. RUS will consider the documentation 
for coordination efforts, community support, and State or local 
government recommendations. Applicants should identify the extent to 
which the project is dependent on or tied to other rural development 
initiatives, funding, and approvals.

Priority Criteria

    In addition to the points awarded for project design and technical 
merit, all proposals will be reviewed and awarded additional points 
based on certain characteristics of the project or the target 
community. USDA Rural Development policies generally encourage agencies 
to give priority in their programs to rural areas of greatest need and 
to support other Federal policy initiatives. In furtherance of these 
policies, RUS will award additional points to smaller communities and 
areas experiencing economic hardship, persistent poverty, or where 
community energy services are inadequate or the facilities present an 
imminent hazard to public health or safety. Priority points will also 
be awarded for proposals that include cost sharing, or that serve a 
Federally designated Empowerment

[[Page 72912]]

Zone or Enterprise Community (EZ/EC) or a USDA Champion Community. A 
maximum of 35 total points may be awarded under priority criteria.
    1. Economic Hardship. (Up to 10 points) The community experiences 
one or more economic hardship conditions that impair the ability of the 
community and/or its residents to provide basic energy services or to 
reduce or limit the costs of these services. Economic hardship will be 
assessed using either the objective measure of county median income 
under A below or subjectively under B based on the Applicant's 
description of the community's economic hardships and supporting 
materials. Applicants may elect either measure, but not both.
    A. Economically Distressed Communities (up to 10 points). The 
target community is an economically distressed county where the median 
household income is significantly below the State average. Points will 
be awarded based on the county percentage of State median household 
income according to the following:
    (1) Less than 70 percent of the State median household income--10 
points;
    (2) 70 to 80 percent of the State median household income--8 
points; or
    (3) 80 to 90 percent of the State median household income--5 
points;
    (4) 90 to 95 percent of the State median household income--2 points
    (5) over 95 percent of the State median household income--0 points
    Information on State and county median income is available online 
from the USDA Economic Research Service at http://www.ers.usda.gov/data/unemployment/.
    B. Other Economic Hardship (up to 10 points) The community suffers 
from other conditions creating a severe economic hardship that is 
adequately described and documented by the Applicant. Examples include 
but are not limited to natural disasters, financially distressed local 
industry, loss of major local employer, outmigration, or other 
condition adversely affecting the local economy, or contributing to 
unserved or underserved energy infrastructure needs that affect the 
economic health of the community.
    2. Persistent poverty community. (3 points) Persistent poverty 
counties are those where poverty continues to be a long-term problem. 
The Economic Research Service (ERS) of USDA has defined a persistent 
poverty county as a nonmetropolitan county in which more than 20 
percent of the population were below the poverty level in each of the 
last 4 census years. ERS has made a preliminary identification of over 
300 nonmetropolitan counties in which more than 20 percent of the 
population was below the poverty level in 1970, 1980, 1990, and 2000. A 
list of the ERS persistent poverty counties can be found in the online 
Application Guide http://www.usda.gov/rus/electric/hecgp/counties.htm 
or requested from the agency contact. In support of USDA policy, raters 
will award 3 points to any proposal in which the target area or project 
is located in a persistent poverty county.
    3. Rurality. ( Up to 12 points) Consistent with the USDA Rural 
Development policy to target resources to rural communities with 
significant needs and recognizing that smaller communities are often 
comparatively disadvantaged in seeking assistance, RUS reviewers will 
award additional points based on the rurality (as measured by 
population) of the target communities to be served with grant funds. 
Applications will be scored based on the population of the largest 
incorporated cities, towns, or villages, or census designated places 
included within the grant's proposed target area.
    If the largest target community within the proposed target area has 
a population of:
    (A) 2,500 or less--12 points;
    (B) Between 2,501 and 5,000, inclusive 10 points;
    (C) Between 5,001 and 10,000, inclusive 8 points;
    (D) Between 10,001 and 15,000, inclusive 5 points;
    (E) Between 15, 001 and 20,000, inclusive 2 points;
    (F) Above 20,000, 0 points.
    Applicants must use the latest available population figures from 
Census 2000 available at http://www.census.gov/main/www/cen2000.html 
for every incorporated city, town, or village, or Census designated 
place included in the target area.
    4. Unserved Energy Needs (2 points) Consistent with the purposes of 
the RE Act, projects that meet unserved or underserved energy needs 
will be eligible for 2 points. Examples of proposals that may qualify 
under this priority include projects that extend or improve electric or 
other energy services to communities and customers that do not have 
reliable centralized or commercial service or where many homes remain 
without such service because the costs are unaffordable.
    5. Imminent hazard (2 points) If the grant proposal involves a 
project to correct a condition posing an imminent hazard to public 
safety, welfare, the environment, or to a critical community or 
residential energy facility, raters may award 2 points. Examples 
include community energy facilities in immediate danger of failure 
because of deteriorated condition, capacity limitations, damage from 
natural disasters or accidents, or other conditions where failure would 
create a substantial threat to public health or safety, or to the 
environment.
    6. Cost Sharing (2 points) This grant program does not require any 
cost contribution. In addition to their assessment of the economic 
feasibility and sustainability of the project under the project 
evaluation factors above, raters may award 2 points for cost sharing. 
These points will be awarded when the proposal documents that 
supplemental contributions of funds, property, equipment, services, or 
other in kind contributions that support the project and demonstrate 
the applicant's and/or community's commitment to the project exceed 10 
percent of project costs.
    7. Empowerment Zone and Enterprise Community (EC/EZ) or Champion 
Community (up to 4 points) If the proposed project serves at least one 
community that is a Federally-identified Empowerment Zone and 
Enterprise Community (EC/EZ Community), 4 points will be awarded. The 
list of currently approved EC/EZ communities may be found at the EZ/EC 
Web site at: http://www.ezec.gov or may be requested from the agency 
contact.
    If the proposed project serves at least one community that is a 
USDA identified ``Champion Community,'' 2 points will be awarded. The 
list of currently approved USDA champion communities may be found at 
the EZ/EC Web site at: http://www.ezec.gov or may be requested from the 
agency contact.

Scoring and Ranking of Applications

    Following the evaluation and rating of individual applications 
under the above criteria, the rating panels will rank the applications 
in order according to their total scores. The scored and ranked 
applications and the raters' comments will then be forwarded to the 
Administrator for review and selection of grant awards.

Selection of Grant Awards and Notification of Applicants

    The RUS Administrator will review the rankings and recommendations 
of the applications provided by the rating panels for consistency with 
the requirements of this NOFA. The Administrator may return any 
application to the rating panel with written instruction for 
reconsideration if, in her sole discretion, she finds that the scoring 
of an application is

[[Page 72913]]

inconsistent with this NOFA and the directions provided to the rating 
panel.
    Following any adjustments to the project rankings as a result of 
reconsideration, the Administrator will select projects for funding in 
rank order. If funds remain after funding the highest ranking 
application, RUS may fund all or part of the next highest ranking 
application. RUS will advise an applicant if it cannot fully fund a 
grant request.
    The Administrator may decide based on the recommendations of the 
rating panel or in her sole discretion that a grant award may be made 
fully or partially contingent upon the applicant satisfying certain 
conditions or providing additional information and analyses. For 
example, RUS may defer approving a final award to a selected project--
such as projects requiring more extensive environmental review and 
mitigation, preparation of detailed site specific engineering studies 
and designs, or requiring local permitting, or availability of 
supplemental financing--until any additional conditions are satisfied. 
In the event that a selected applicant fails to comply with the 
additional conditions within the time set by RUS, the selection will be 
vacated and the next ranking project will be considered.
    If a selected applicant turns down a grant award offer, or fails to 
conclude a grant agreement acceptable to RUS, or to provide required 
information requested by RUS within the time period established in the 
notification of selection for grant award, the RUS Administrator may 
select for funding the next highest ranking application submitted in 
response to this NOFA. If funds remain after all selections have been 
made, remaining funds will be carried over and made available in future 
awards under the High Energy Cost Grant Programs.
    RUS will notify each Applicant in writing whether or not it has 
been selected for an award. RUS's written notice to a successful 
applicant of the amount of the grant award based on the approved 
application will constitute RUS's preliminary approval, subject to 
compliance with all post-selection requirements including but not 
limited to completion of any environmental reviews and negotiation and 
execution of a grant agreement satisfactory to RUS. Preliminary 
approval does not bind the Government to making a final grant award. 
Only a final grant award and agreement executed by the Administrator 
will constitute a binding obligation and commitment of Federal funds. 
Funds will not be awarded or disbursed until all requirements have been 
satisfied. RUS will advise selected applicants of additional 
requirements or conditions.

Adjustments to Funding

    RUS reserves the right to fund less than the full amount requested 
in a grant application to ensure the fair distribution of the funds and 
to ensure that the purposes of a specific program are met. RUS will not 
fund any portion of a grant request that is not eligible for funding 
under Federal statutory or regulatory requirements; that does not meet 
the requirements of this NOFA, or that may duplicate other RUS funded 
activities, including electric loans. Only the eligible portions of a 
successful grant application will be funded.
    Grant assistance cannot exceed the lower of:
    (a) The qualifying percentage of eligible project costs requested 
by the Applicant; or
    (b) The minimum amount sufficient to provide for the economic 
feasibility of the project as determined by RUS.

Other Grantee Requirements

    RUS will notify successful grantees of their selection. Successful 
applicants will be required to execute a grant agreement acceptable to 
RUS and complete additional grant forms and certifications required by 
USDA. The grantee will provide periodic financial and performance 
reports as required by RUS and submit a final project performance 
report. Depending on the nature of the activities proposed by the 
application, the grantee may be asked to provide information and 
certifications necessary for compliance with RUS environmental policy 
regulations and procedures at 7 CFR part 1794.
    RUS will require each successful applicant to agree to the specific 
terms of each grant agreement, a project budget, and other RUS 
requirements. In cases where RUS cannot successfully conclude 
negotiations with a selected applicant or a selected applicant fails to 
provide RUS with requested information within the time specified, an 
award will not be made to that applicant. The selection will be revoked 
and RUS may offer an award to the next highest ranking applicant, and 
proceed with negotiations with the next highest ranking applicant.

Environmental Review and Restriction on Certain Activities

    Grant awards are required to comply with 7 CFR part 1794, which 
sets forth RUS regulations implementing the National Environmental 
Policy Act (NEPA). Grantees must also agree to comply with any other 
Federal or State environmental laws and regulations applicable to the 
grant project.
    If the proposed grant project involves physical development 
activities or property acquisition, the Applicant is generally 
prohibited from acquiring, rehabilitating, converting, leasing, 
repairing or constructing property, or committing or expending RUS or 
non-RUS funds for proposed grant activities until RUS has completed any 
environmental review in accordance with 7 CFR part 1794 or determined 
that no environmental review is required. Successful applicants will be 
advised whether additional environmental review and requirements apply 
to their proposals.

Other Federal Requirements

    Other Federal statutes and regulations apply to grant applications 
and to grant awards. These include, but are not limited to, 
requirements under 7 CFR part 15, subpart A--Nondiscrimination in 
Federally Assisted Programs of the Department of Agriculture--
Effectuation of Title VI of the Civil Rights Act of 1964.
    Certain OMB circulars also apply to USDA grant programs and must be 
followed by a grantee under this program. The policies, guidance, and 
requirements of the following may apply to the award, acceptance and 
use of assistance under this program and to the remedies for 
noncompliance, except when inconsistent with the provisions of the 
Agriculture, Rural Development and Related Agencies Appropriations 
Acts, other Federal statutes or the provisions of this NOFA:
    OMB Circular No. A-87 (Cost Principles Applicable to Grants, 
Contracts and Other Agreements with State and Local Governments);
    [sbull] OMB Circular A-21 (Cost Principles for Education 
Institutions);
    [sbull] OMB Circular No. A-122 (Cost Principles for Nonprofit 
Organizations);
    [sbull] OMB Circular A-133 (Audits of States, Local Governments, 
and Non-Profit Organizations);
    [sbull] 7 CFR part 3015 (Uniform Federal Assistance Regulations);
    [sbull] 7 CFR part 3016 (Uniform Administrative Requirements for 
Grants and Cooperative Agreements to State, Local, and Federally 
recognized Indian tribal governments);
    [sbull] 7 CFR part 3017 (Governmentwide debarment and suspension 
(non-procurement) and governmentwide requirements for drug-free 
workplace (grants));
    [sbull] 7 CFR part 3018 (New restrictions on Lobbying);
    [sbull] 7 CFR part 3019 (Uniform administrative requirements for 
grants

[[Page 72914]]

and Agreements with Institutions of Higher Education, Hospitals, and 
other Non-Profit Organizations); and
    [sbull] 7 CFR part 3052 (Audits of States, local governments, and 
non-profit organizations).
    Compliance with additional OMB Circulars or government-wide 
regulations may be specified in the grant agreement.

    Dated: December 4, 2002.
Hilda Gay Legg,
Administrator, Rural Utilities Service.
[FR Doc. 02-31056 Filed 12-6-02; 8:45 am]
BILLING CODE 3410-15-P