[Federal Register Volume 69, Number 235 (Wednesday, December 8, 2004)]
[Rules and Regulations]
[Pages 70877-70883]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-26948]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1775

RIN 0572-AB75


Technical Assistance Grants

AGENCY: Rural Utilities Service, USDA.

ACTION: Final rule.

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SUMMARY: The Rural Utilities Service (RUS), an agency delivering the 
United States Department of Agriculture's Rural Development Utilities 
Programs, amends the regulation utilized to administer the technical 
assistance grant programs. This action is necessary to separate the 
technical assistance and training grant and solid waste management 
grant programs for clarification purposes, and to bring the regulation 
in line with revisions to OMB circulars. Additionally, it eliminates 
the requirement that applicants submit a pre-application when applying 
for grant funds. This action also transfers grant processing and 
servicing from the National Office to Rural Development State Offices. 
The intended effect is to separate the technical assistance and solid 
waste management programs and to reduce regulatory burdens on 
applicants.

DATES: This rule is effective January 7, 2005.

FOR FURTHER INFORMATION CONTACT: Stephen Saulnier, Loan Specialist, 
Water Programs Division, Rural Utilities Service, U.S. Department of 
Agriculture, 1400 Independence Avenue, SW., Room 2235-S, Stop 1570, 
Washington, DC 20250-1570. Telephone (202) 690-2526. E-Mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be not significant for the 
purposes of Executive Order 12866 and, therefore, has not been reviewed 
by the Office of Management and Budget (OMB).

Executive Order 12372

    This rule is excluded from the scope of Executive Order 12372, 
Intergovernmental Consultation, which may require consultation with 
State and local officials. See the final rule related notice titled, 
``Technical Assistance and Training Grants Program; Proposal to Exclude 
Program and Activity From Executive Order 12372,'' (53 FR 44505) which 
determined that the RUS grants were not covered by Executive Order 
12372.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. RUS has determined that this proposed rule meets the 
applicable standards provided in section 3 of the Executive Order. In 
addition, all State and local laws and regulations that are in conflict 
with this rule will be preempted; no retroactive effect will be given 
to the rule; and, in accordance with Section 212(e) of the Department 
of Agriculture Reorganization Act of 1994 (7 U.S.C section 6912(e)), 
administrative appeal procedures, if any are required, must be 
exhausted prior to initiating any action against the Department or its 
agencies.

Regulatory Flexibility Act Certification

    Under section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 
605(b)), RUS certifies that this rule will not have a significant 
economic impact on a substantial number of small entities. The 
amendments reflect only statutory changes that Congress has mandated 
and over which RUS has no discretion.

Information Collection and Recordkeeping Requirements

    The information collection and recordkeeping requirements contained 
in this rule have been cleared under OMB control number 0572-0112 in 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 
35).

National Environmental Policy Act Certification

    The Administrator of RUS has determined that this rule will not 
significantly affect the quality of the human environment as defined by 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). 
Therefore, this action does not require an environmental impact 
statement or assessment.

Catalog of Federal Domestic Assistance

    The programs described by this rule are listed in the Catalog of 
Federal Domestic Assistance Programs under numbers 10.761, Technical 
Assistance and Training Grants and 10.762, Solid Waste Management 
Grants. This catalog is available on a subscription basis from the 
Superintendent of Documents, the United States Government Printing 
Office, Washington, DC, 20402-9325, telephone number (202) 512-1800.

Unfunded Mandates

    This rule contains no Federal mandates (under the regulatory 
provision of Title II of the Unfunded Mandates Reform Act of 1995) for 
State, local, and tribal governments or the private sector. Thus this 
rule is not subject to the requirements of section 202 and 205 of the 
Unfunded Mandates Reform Act of 1995.

Background

    On November 2, 1987, the Farmers Home Administration (FmHA) 
(predecessor of RUS) published 7 CFR part 1942, subpart J, Technical 
Assistance and Training Grants, as a final rule in the Federal Register 
(52 FR 41950) implementing a new grant program. On February 5, 1992, 
FmHA published 7 CFR part 1942, subpart J, Technical Assistance and 
Training Grants, as a final rule in the Federal Register (57 FR 4357) 
revising the regulation to implement another new grant program. In 
1994, when RUS assumed the functions of the Water and Waste Disposal 
programs from the former FmHA and the Rural Development Administration 
(RDA), RUS changed the Technical Assistance

[[Page 70878]]

and Training (TAT) and Solid Waste Management (SWM) grants regulations 
from 7 CFR 1942, subpart J, to 7 CFR 1775. Based on changes in the OMB 
circulars affecting these programs and RUS's experience and review of 
its existing procedures, RUS has determined that several changes are 
necessary in order to operate the grant programs in a smooth, 
efficient, and effective manner.
    The existing 7 CFR part 1775 was designed to provide policy and 
procedures for RUS's technical assistance and training grants and solid 
waste management grants, in addition to RUS's internal administrative 
actions. There has been some confusion as to the basic differences in 
the programs, especially pertaining to eligibility. To avoid confusion 
and clarify eligibility requirements, objectives, and purposes, 
separate sections have been developed for each grant program.
    Unsuccessful applicants have often requested the basis upon which 
funding decisions were made. The existing regulation contains general 
statements describing the priority criteria used in making those 
decisions. The rule provides a more detailed description of the project 
priority criteria used in determining if an applicant is selected or 
not selected for funding.
    Over the years, the number of proposals for projects to be operated 
within a single State, especially in the Solid Waste Management Grants 
program, have drastically increased. Due to the requirements of the 
existing regulations, these projects are processed and serviced from 
the National Office. Experience has shown that these projects should be 
processed and serviced from the Rural Development State Offices because 
of their proximity to the project and the familiarity of field 
personnel with grantee organizations. RUS delegates approval authority 
to the State Directors for projects to be operated only within their 
States. Funding for these projects will be determined by the National 
Office on a competitive basis.
    The rule contains a variety of procedural changes from the 
provisions of the current regulation. Some of these revisions are minor 
or are merely intended to clarify existing RUS policy and procedure. 
Other revisions reflect fundamental changes to RUS' operation of the 
grant programs and are outlined below.
    For clarification purposes, RUS is defining the term ``technical 
assistance'' as it relates to eligibility of projects under both grant 
programs.
    The current regulation prohibits the use of grant funds for 
expenses incurred prior to grant approval. This rule allows applicants 
to incur grant-related expenses, however, RUS would not be obligated to 
reimburse these expenses if the grant is not approved or is 
insufficient to do so.
    To foster clarity, this rule includes an expanded explanation of 
the items needed to complete an application package and a more detailed 
description of the information required for priority consideration. The 
rule also expands the priority criteria to include the population of 
associations to be served, needs assessment, description of how the 
project will be implemented, hands-on assistance, evaluation 
methodology, and strategy for sustaining the project.
    The existing regulation requires fidelity bond coverage. This rule 
removes the requirement because coverage is not needed when grant funds 
are reimbursed for actual expenses.
    This rule requires grantees to obtain written permission from the 
approval official for changes in the project or changes of more than 10 
percent of the total budget. Permission must be obtained before changes 
are put into effect or funds spent.
    The rule allows grantees to submit financial statements in certain 
instances. The existing regulation does not offer any option other than 
submission of an audit.

Comments

    RUS published a proposed rulemaking in the Federal Register on 
January 22, 2004, at 69 FR 3030. RUS received no comments from the 
public, nor did RUS receive any comments from outside federal agencies. 
There are three minor administrative changes in the final regulation. 
First, in the definition of ``State'' in Sec.  1775.2 the words `` * * 
* the Western Pacific Territories, Marshall Islands, Federated States 
of Micronesia, Republic of Palau, * * * '' be replaced with `` * * * 
the Territory of Guam, the Commonwealth of the Northern Mariana 
Islands, the Republic of the Marshall Islands, the Federated States of 
Micronesia, the Republic of Palau, * * * ''.
    The second change pertains to Sec.  1775.12(a)(2), (3), and (4). 
The referenced paragraphs had the State Office notifying applicants not 
selected and the National Office notifying applicants selected for 
funding. In the final rule these provisions reflect that the National 
Office will inform the State Office of both selected and non-selected 
applicants and the State Office would then notify all applicants within 
their State of their status. Finally, RUS is adding information to 
Sec.  1775.10 to provide guidance to applicants on the availability of 
filing electronic applications for this program through Grants.gov. The 
RUS feels that this additional information is considered as Internal 
Agency Management and pursuant to 5 U.S.C. 553, notice of proposed rule 
making and opportunity for comment on this issue are not required.

List of Subjects in 7 CFR Part 1775

    Business and industry, Community development, Community facilities, 
Grant programs--housing and community development, Reporting and 
recordkeeping requirements, Rural areas, Waste treatment and disposal, 
Water supply, Watersheds.


0
For reasons set forth in the preamble, RUS amends 7 CFR chapter XVII of 
title 7 of the Code of Federal Regulations by revising part 1775 to 
read as follows:

PART 1775--TECHNICAL ASSISTANCE GRANTS

Subpart A--General Provisions
Sec.
1775.1 General.
1775.2 Definitions.
1775.3 Availability of forms and regulations.
1775.4 Allocation of funds.
1775.5 Limitations.
1775.6 Equal opportunity requirements.
1775.7 Environmental requirements.
1775.8 Other Federal Statutes.
1775.9 OMB control number.
Subpart B--Grant Application Processing
1775.10 Applications.
1775.11 Priority.
1775.12 Grant processing.
1775.13 Grant agreement.
1775.14-1775.17 [Reserved]
1775.18 Fund disbursement.
1775.19 Grant cancellation or major changes.
1775.20 Reporting.
1775.21 Audit or financial statements.
1775.22 [Reserved]
1775.23 Grant servicing.
1775.24 Delegation of authority.
1775.25-1775.30 [Reserved]
Subpart C--Technical Assistance and Training Grants
1775.31 Authorization.
1775.32 [Reserved]
1775.33 Objectives.
1775.34 Source of funds.
1775.35 Eligibility.
1775.36 Purpose.
1775.37 Allocation of funds.
1775.38-1775.60 [Reserved]
Subpart D--Solid Waste Management Grants
1775.61 Authorization.
1775.62 [Reserved]
1775.63 Objectives.

[[Page 70879]]

1775.64 [Reserved]
1775.65 Eligibility.
1775.66 Purpose.
1775.67 Allocation of funds.
1775.68 Exception authority.
1775.69-1775.99 [Reserved]

    Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.

Subpart A--General Provisions


Sec.  1775.1  General.

    This subpart sets forth the general policies and procedures for the 
Technical Assistance and Training and the Solid Waste Management Grant 
Programs. Any processing or servicing activity conducted pursuant to 
this part involving authorized assistance to Rural Development 
employees with Water and Environmental Program responsibility, members 
of their families, known close relatives, or business or close personal 
associates, is subject to the provisions of subpart D of part 1900 of 
this title. Applicants for this assistance are required to identify any 
known relationship or association with an RUS employee.


Sec.  1775.2  Definitions.

    The following definitions apply to subparts A through D of this 
part.
    Association. An entity, including a small city or town, that is 
eligible for RUS Water and Waste Disposal financial assistance in 
accordance with 7 CFR 1780.7 (a).
    Approval official. Any individual with administrative and legal 
responsibility for Rural Development programs.
    DUNS Number. Data Universal Numbering System number obtained from 
Dun and Bradstreet and used when applying for Federal grants or 
cooperative agreements. A DUNS number may be obtained at no cost, by 
calling 1-866-705-5711.
    Grant agreement. RUS Guide 1775-1. The agreement outlines the terms 
and conditions of the grant awards and establishes the guidelines for 
administering the grant awards.
    Grantee. The entity or organization receiving financial assistance 
directly from the RUS to carry out the project or program under these 
programs.
    Low Income. Median household income (MHI) below 100 percent of the 
statewide non-metropolitan median household income (SNMHI).
    Regional. A multi-State area or any multi-jurisdictional area 
within a State.
    Rural area. Any area not in a city or town with a population in 
excess of 10,000, according to the latest decennial census of the 
United States.
    RUS. The Rural Utilities Service, an Agency of the United States 
Department of Agriculture.
    Solid Waste Management. Refers to the operations, maintenance and 
the recycling of materials disposed of in landfills.
    State. Any of the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Territory of Guam, the Commonwealth of 
the Northern Mariana Islands, the Republic of the Marshall Islands, the 
Federated States of Micronesia, the Republic of Palau, and the U.S. 
Virgin Islands.
    Technical Assistance. Supervision, oversight, or training by an 
organization for the practical solution of a problem or need of an 
association as defined in this section.


Sec.  1775.3  Availability of forms and regulations.

    Information about the forms, instructions, regulations, bulletins, 
OMB Circulars, Treasury Circulars, standards, documents and 
publications cited in this part is available from any UDSA/Rural 
Development Office or the Rural Utilities Service, United States 
Department of Agriculture, Washington, DC 20250-1500.


Sec.  1775.4  Allocation of funds.

    The National Office of the Rural Utilities Service will administer 
grant funds and will allocate them on a competitive basis.


Sec.  1775.5  Limitations.

    Grant funds may not be used to:
    (a) Duplicate current services or replace or substitute support 
normally provided by other means, such as those performed by an 
association's consultant in developing a project, including 
feasibility, design, and cost estimates.
    (b) Fund political or lobbying activities.
    (c) Purchase real estate or vehicles, improve or renovate office 
space, or repair and maintain privately owned property.
    (d) Pay the costs for construction, improvement, rehabilitation, 
modification, or operation and maintenance of water, wastewater, and 
solid waste disposal facilities.
    (e) Construct or furnish a building.
    (f) Intervene in the Federal regulatory or adjudicatory 
proceedings.
    (g) Sue the Federal Government or any other government entities.
    (h) Pay for any other costs that are not allowable under OMB 
Circular A-87, OMB Circular A-110, OMB Circular A-102 or OMB Circular 
A-122.
    (i) Make contributions or donations to others.
    (j) Fund projects that duplicate technical assistance given to 
implement action plans under the National Forest-Dependent Rural 
Communities Economic Diversification Act of 1990 (7 U.S.C. 6613). 
Applicants cannot receive both grants made under this part and grants 
that the Forest Service makes to implement the action plans for five 
continuous years from the date of grant approval by the Forest Service.
    (1) The Forest Service helps rural communities that are dependent 
upon national forest resources diversify existing industries and 
economies. It establishes rural forestry and economic diversification 
action teams that prepare technical assistance plans for these rural 
communities to expand their local economies and reduce their dependence 
on national forest resources. The Forest Service provides assistance to 
implement the action plans through grants, loans, cooperative 
agreements, or contracts.
    (2) To avoid duplicate assistance, applicants must contact the 
Forest Service to find out if any geographical areas or local areas in 
a State have received grants for technical assistance to an 
economically disadvantaged community. These areas are defined as 
national forest-dependent communities under 7 U.S.C. 6612. Applicants 
will provide documentation to the Forest Service and Rural Utilities 
Service that they have contacted each agency.
    (k) To pay an outstanding judgment obtained by the United States in 
a Federal Court (other than in the United States Tax Court), which has 
been recorded. An applicant will be ineligible to receive a loan or 
grant until the judgment is paid in full or otherwise satisfied.
    (l) Recruit applications for the RUS's water and waste loan or any 
other loan or grant program. Grant funds cannot be used to create new 
business; however, they can be used to assist with application 
preparation.


Sec.  1775.6  Equal opportunity requirements.

    The policies and regulations contained in subpart E of part 1901 of 
this title apply to grants made under this part.


Sec.  1775.7  Environmental requirements.

    The policies and regulations contained in part 1794 of this title 
apply to grants made for the purposes in Sec. Sec.  1775.36 and 
1775.66.


Sec.  1775.8  Other Federal statutes.

    Other Federal statutes and regulations are applicable to grants 
awarded under

[[Page 70880]]

this part. These include but are not limited to:
    (a) 7 CFR part 1, subpart A--USDA implementation of Freedom of 
Information Act.
    (b) 7 CFR part 3--USDA implementation of OMB Circular No. A-129 
regarding debt collection.
    (c) 7 CFR part 15, subpart A--USDA implementation of Title VI of 
the Civil Rights Act of 1964, as amended.
    (d) 7 CFR part 1794, RUS Implementation of the National 
Environmental Policy Act.
    (e) 7 CFR part 1901, subpart E--Civil Rights Compliance 
Requirements.
    (f) 7 CFR part 3015--Uniform Federal Assistance Regulations.
    (g) 7 CFR part 3016--USDA Implementation of OMB Circular Nos. A-102 
and A-97, Uniform Administrative Requirements for Grants and 
Cooperative Agreements to State and Local Governments.
    (h) 7 CFR part 3017, as amended--Government-wide Debarment and 
Suspension (Non-procurement); Government-wide Requirements for Drug-
Free Workplace (Grants), implementing Executive Order 12549 on 
debarment and suspension and the Drug-Free Workplace Act of 1988 (41 
U.S.C. 701).
    (i) 7 CFR part 3018-- Restrictions on Lobbying, prohibiting the use 
of appropriated funds to influence Congress or a Federal agency in 
connection with the making of any Federal grant and other Federal 
contracting and financial transactions.
    (j) 7 CFR part 3019--USDA implementation of OMB Circular A-110, 
Uniform Administrative Requirements for Grants and Agreements With 
Institutions of Higher Education, Hospitals, and Other Nonprofit 
Organizations.
    (k) 7 CFR part 3052--USDA implementation of OMB Circular No. A-133 
regarding audits of institutions of higher education and other 
nonprofit institutions.
    (l) 29 U.S.C. 794, section 504--Rehabilitation Act of 1973, and 7 
CFR part 15B (USDA implementation of statute), prohibiting 
discrimination based upon physical or mental handicap in Federally 
assisted programs.


Sec.  1775.9  OMB control number.

    The information collection requirements contained in this part have 
been approved by the Office of Management and Budget and have been 
assigned OMB control number 0572-0112.

Subpart B--Grant Application Processing


Sec.  1775.10  Applications.

    (a) Filing period. Applications may be filed on or after October 1 
and must be received by close of business or postmarked by midnight 
December 31. If an application is received either before October 1 or 
after December 31, the receiving office will return it to the 
applicant.
    (b) Where to file. (1) An applicant will apply to the appropriate 
State Office of Rural Development if the project will serve a single 
state.
    (2) An applicant will apply to the National Office if the project 
will serve multiple states. The application must be submitted to the 
following address: Assistant Administrator, Water and Environmental 
Programs, Rural Utilities Service, Washington, DC 20250-1570.
    (3) Electronic applications will be accepted prior to the filing 
deadline through the Federal Government's eGrants Web site (Grants.gov) 
at http://www.grants.gov. Applicants should refer to instructions found 
on the Grants.gov Web site to submit an electronic application. A DUNS 
number and a Central Contractor Registry (CCR) registration is required 
prior to electronic submission. The sign-up procedures, required by 
Grants.gov, may take several business days to complete.
    (c) Application requirements. To file an application, an 
organization must provide their DUNS number. An organization may obtain 
a DUNS number from Dun and Bradstreet by calling (1-866-705-5711). To 
file a complete application, the following information should be 
submitted:
    (1) Standard Form 424, ``Application for Federal Assistance (For 
Non-Construction).''
    (2) Standard Form 424A & B, ``Budget Information--Non-Construction 
Programs.''
    (3) Form AD-1047, ``Certification Regarding Debarment, Suspension, 
and Other Responsibility Matters--Primary Covered Transaction.''
    (4) Form AD 1049, ``Certification Regarding Drug-Free Workplace 
Requirements (Grants) Alternative I--For Grantees Other Than 
Individuals.''
    (5) Form AD 1048, ``Certification Regarding Debarment.''
    (6) Attachment regarding assistance provided to Rural Development 
Employees as required by RD Instruction 1900-D.
    (7) Form RD 400-4, ``Assurance Agreement.''
    (8) Form RD 400-1, ``Equal Opportunity Agreement.''
    (9) Indirect Cost Rate Agreement (if applicable, applicant must 
include approved cost agreement rate schedule).
    (10) Statement of Compliance for Title VI of the Civil Rights Act 
of 1964.
    (11) SF LLL, ``Disclosure of Lobbying Activities'' (include only if 
grant is over $100,000).
    (12) Certification regarding Forest Service grant.
    (d) Supporting information. All applications shall be accompanied 
by:
    (1) Evidence of applicant's legal existence and authority in the 
form of:
    (i) Certified copies of current authorizing and organizational 
documents for new applicants or former grantees where changes were made 
since the last legal opinion was obtained in conjunction with receipt 
of an RUS grant, or, certification that no changes have been made in 
authorizing or organizing documents since receipt of last RUS grant by 
applicant.
    (ii) Current annual corporation report, Certificate of Good 
Standing, or statement they are not required.
    (iii) For public nonprofits, Certificate of Continued Status from 
local attorney (if applicable).
    (iv) Certified list of directors/officers with their respective 
terms.
    (2) Evidence of tax exempt status from the Internal Revenue Service 
(IRS), if applicable.
    (3) Narrative of applicant's experience in providing services 
similar to those proposed. Provide brief description of successfully 
completed projects including the need that was identified and 
objectives accomplished.
    (4) Latest financial information to show the applicant's financial 
capacity to carry out the proposed work. A current audit report is 
preferred, however applicants can submit a balance sheet and an income 
statement in lieu of an audit report.
    (5) List of proposed services to be provided.
    (6) Estimated breakdown of costs (direct and indirect) including 
those to be funded by grantee as well as other sources. Sufficient 
detail should be provided to permit the approval official to determine 
reasonableness, applicability, and allowability.
    (7) Evidence that a Financial Management System is in place or 
proposed.
    (8) Documentation on each of the priority ranking criteria listed 
in Sec.  1775.11 as follows:
    (i) List of the associations to be served and the State or States 
where assistance will be provided. Identify associations by name, or 
other characteristics such as size, income, location, and provide MHI 
and population.

[[Page 70881]]

    (ii) Description of the type of technical assistance and/or 
training to be provided and the tasks to be contracted.
    (iii) Description of how the project will be evaluated and provide 
clearly stated goals and the method proposed to measure the results 
that will be obtained.
    (iv) Documentation of need for proposed service. Provide detailed 
explanation of how the proposed services differ from other similar 
services being provided in the same area.
    (v) Personnel on staff or to be contracted to provide the service 
and their experience with similar projects.
    (vi) Statement indicating the number of months it takes to complete 
the project or service.
    (vii) Documentation on cost effectiveness of project. Provide the 
cost per association to be served or proposed cost of personnel to 
provide assistance.
    (viii) Other factors for consideration, such as emergency 
situation, training need identified, health or safety problems, 
geographic distribution, Rural Development Office recommendations, etc.


Sec.  1775.11  Priority.

    The application and supporting information will be used to 
determine the applicant's priority for available funds. All 
applications will be reviewed and scored for funding priority in 
accordance with RUS Guide 1775-2. Points will be given only for factors 
that are well documented in the application package and, in the opinion 
of the RUS, meet the objective outlined under each factor. The 
following is a listing of the criteria that will be used to select the 
applications that meet the objectives of the technical assistance 
program.
    (a) Projects proposing to give priority for available services to 
rural communities having a population less than 5,500 and/or below 
2,500.
    (b) Projects proposing to give priority for available services to 
low income communities.
    (c) Projects that will provide assistance in a multi-State area.
    (d) Points will be awarded for work plans that clearly describe the 
goals and objectives of the project, how they will be accomplished in 
targeted communities, and what measurement of accomplishment will be 
used.
    (e) Projects containing needs assessment (i.e. actual issue or 
problem being addressed) clearly defined and supported by data.
    (f) Projects containing evaluation methods that are specific to the 
activity, clearly defined, measurable, and with projected outcomes.
    (g) Applicants proposing to use at least 75 percent of the total 
grant amount for their own staff, or the staff of an affiliated 
organization to provide services for a project instead of contracting 
with an outside organization for the services.
    (h) Projects providing technical assistance/training that 
accomplish the objective within a 12-month or less timeframe.
    (i) Projects primarily providing ``hands on'' technical assistance 
and training, i.e., on-site assistance as opposed to preparation and 
distribution of printed material, to communities with existing water 
and waste systems which are experiencing operation and maintenance or 
management problems.
    (j) Cash or in kind support of project from non-federal sources.
    (k) Ability to demonstrate sustainability of project without 
Federal financial support.


Sec.  1775.12  Grant processing.

    (a) Single State applications. (1) Grant applications submitted at 
the State level will receive a letter acknowledging receipt and 
confirmation that all information required for a full application was 
included in the packet. The State will notify the applicant of missing 
information. The applicant will have 14 business days to respond.
    (2) The State Office will review applications for eligibility. 
Those applicants that are deemed ineligible will be notified. 
Applicants deemed eligible will be forwarded to the National Office for 
funding consideration.
    (3) The National Office will review all applications received from 
State Offices. Applications will compete on a priority basis and will 
be scored and ranked. The applications receiving the highest scores and 
subject to the availability of funds will be selected for final 
processing. The National Office will send these applications back to 
the State Office for processing. The State Office will notify the 
applicant(s) that they have been selected for funding.
    (4) Applicants not selected for funding due to low priority rating 
shall be notified by the State Office.
    (b) National and multi-State applications. (1) National and multi-
State applications submitted to the National Office will receive a 
letter acknowledging receipt and confirmation that all information 
required for a full application was included in the packet. The 
National Office shall notify the applicant of missing information. The 
applicant will have 14 business days to respond.
    (2) The National Office will review applications for eligibility. 
Those applications that are deemed ineligible will be notified. 
Applications deemed eligible will be reviewed and given a rating score. 
Applications receiving the highest scores will be grouped with those 
received from State Offices for funding consideration.
    (3) The National Office will review all applications received. 
Applications will compete on a priority basis and will be scored and 
ranked. The applications receiving the highest scores and subject to 
the availability of funds will be notified by the National Office that 
they have been selected for funding. The National Office shall conduct 
final processing of multi-State and national applications.
    (4) Multi-State and National applicants not selected for funding 
due to low priority rating will be notified by the National Office.
    (c) Low priority applications. Applications that cannot be funded 
in the fiscal year received will not be retained for consideration in 
the following fiscal year and will be handled as outlined in paragraph 
(a)(4) or (b)(4) of this section.


Sec.  1775.13  Grant agreement.

    Applicants selected for funding will complete a grant agreement, 
RUS Guide 1775-1, which outlines the terms and conditions of the grant 
award.


Sec. Sec.  1775.14-1775.17  [Reserved]


Sec.  1775.18  Fund disbursement.

    Grantees will be reimbursed as follows:
    (a) SF-270, ``Request for Advance or Reimbursement,'' will be 
completed by the grantee and submitted to either the State or National 
Office not more frequently than monthly.
    (b) Upon receipt of a properly completed SF-270, the funds will be 
requested through the field office terminal system. Ordinarily, payment 
will be made within 30 days after receipt of a proper request for 
reimbursement.
    (c) Grantees are encouraged to use women- and minority-owned banks 
(a bank which is owned at least 50 percent by women or minority group 
members) for the deposit and disbursement of funds.


Sec.  1775.19  Grant cancellation or major changes.

    Any change in the scope of the project, budget adjustments of more 
than 10 percent of the total budget, or any other significant change in 
the project must be reported to and approved by the approval official 
by

[[Page 70882]]

written amendment to RUS Guide 1775-1. Any change not approved may be 
cause for termination of the grant.


Sec.  1775.20  Reporting.

    (a) Grantees shall constantly monitor performance to ensure that 
time schedules are being met, projected work by time periods is being 
accomplished, and other performance objectives are being achieved.
    (b) SF-269, ``Financial Status Report (short form),'' and a project 
performance activity report will be required of all grantees on a 
quarterly basis, due 30 days after the end of each calendar quarter.
    (c) A final project performance report will be required with the 
last SF-269 due 90 days after the end of the last quarter in which the 
project is completed. The final report may serve as the last quarterly 
report.
    (d) All multi-State grantees are to submit an original of each 
report to the National Office. Grantees serving only one State are to 
submit an original of each report to the State Office. The project 
performance reports should detail, preferably in a narrative format, 
activities that have transpired for the specific time period and shall 
include, but not be limited to, the following:
    (1) A comparison of actual accomplishments to the objectives 
established for that period (i.e. number of meetings held, number of 
people contacted, results of activity);
    (2) Analysis of challenges or setbacks that occurred during the 
grant period;
    (3) Copies of fliers, news releases, news articles, announcements 
and other information used to promote services or projects;
    (4) Problems, delays, or adverse conditions which will affect 
attainment of overall project objectives, prevent meeting time 
schedules or objectives, or preclude the attainment of particular 
project work elements during established time periods. This disclosure 
shall be accompanied by a statement of the action taken or planned to 
resolve the situation; and
    (5) Activities planned for the next reporting period.


Sec.  1775.21  Audit or financial statements.

    The grantee will provide an audit report or financial statements as 
follows:
    (a) Grantees expending $500,000 or more Federal funds per fiscal 
year will submit an audit conducted in accordance with OMB Circular A-
133. The audit will be submitted within 9 months after the grantee's 
fiscal year. Additional audits may be required if the project period 
covers more than one fiscal year.
    (b) Grantees expending less than $500,000 will provide annual 
financial statements covering the grant period, consisting of the 
organization's statement of income and expense and balance sheet signed 
by an appropriate official of the organization. Financial statements 
will be submitted within 90 days after the grantee's fiscal year.


Sec.  1775.22  [Reserved]


Sec.  1775.23  Grant servicing.

    Grants will be serviced in accordance with RUS Guide 1775-1 and 
subpart E of part 1951 of this title. When grants are terminated for 
cause, 7 CFR part 11 will be followed.


Sec.  1775.24  Delegation of authority.

    The authority under this part is re-delegated to the Assistant 
Administrator, Water and Environmental Programs, except for the 
discretionary authority contained in Sec.  1775.34 and Sec.  1775.68. 
The Assistant Administrator, Water and Environmental Programs may re-
delegate the authority in this part.


Sec. Sec.  1775.25--1775.30  [Reserved]

Subpart C--Technical Assistance and Training Grants


Sec.  1775.31  Authorization.

    This subpart sets forth additional policies and procedures for 
making Technical Assistance and Training (TAT) grants authorized under 
Section 306(a)(14)(A) of the Consolidated Farm and Rural Development 
Act (CONACT) (7 U.S.C. 1921 et seq., as amended.


Sec.  1775.32  [Reserved]


Sec.  1775.33  Objectives.

    The objectives of the program are to:
    (a) Identify and evaluate solutions to water and waste problems in 
rural areas.
    (b) Assist applicants in preparing applications for water and waste 
disposal loans/grants.
    (c) Assist associations in improving operation and maintenance of 
existing water and waste facilities in rural areas.


Sec.  1775.34  Source of funds.

    Grants will be made from not less than 1 percent or not more than 3 
percent of any appropriations for grants under Section 306(a)(2) of the 
CONACT. Funds not obligated by September 1 of each fiscal year will be 
used for water and waste disposal grants made in accordance with part 
1780 of this chapter.


Sec.  1775.35  Eligibility.

    (a) Entities eligible for grants must be private nonprofit 
organizations with tax exempt status, designated by the Internal 
Revenue Service. A nonprofit organization is defined as any 
corporation, trust, association, cooperative, or other organization 
that:
    (1) Is operated primarily for scientific, education, service, 
charitable, or similar purposes in the public interest.
    (2) Is not organized primarily for profit.
    (3) Uses its net proceeds to maintain, improve, and/or expand its 
operations.
    (b) Entities must be legally established and located within a state 
as defined in Sec.  1775.2.
    (c) Organizations must be incorporated by December 31 of the year 
the application period occurs to be eligible for funds.
    (d) Private businesses, Federal agencies, public bodies, and 
individuals are ineligible for these grants.
    (e) Applicants must also have the proven ability, background, 
experience (as evidenced by the organization's satisfactory completion 
of project(s) similar to those proposed), legal authority, and actual 
capacity to provide technical assistance and/or training on a regional 
basis to associations as provided in Sec.  1775.33. To meet the 
requirement of actual capacity, an applicant must either:
    (1) Have the necessary resources to provide technical assistance 
and/or training to associations in rural areas through its staff, or
    (2) Be assisted by an affiliate or member organization which has 
such background and experience and which agrees, in writing, that it 
will provide the assistance, or
    (3) Contract with a nonaffiliated organization for not more than 49 
percent of the grant to provide the proposed assistance.


Sec.  1775.36  Purpose.

    Grants may be made to organizations as defined in Sec.  1775.35 to 
enable such organizations to assist associations to:
    (a) Identify and evaluate solutions to water problems of 
associations in rural areas relating to source, storage, treatment, 
and/or distribution.
    (b) Identify and evaluate solutions to waste problems of 
associations in rural areas relating to collection, treatment, and/or 
disposal.
    (c) Prepare water and/or waste disposal loan/grant applications.
    (d) Provide technical assistance/training to association personnel 
that will improve the management, operation, and maintenance of water 
and waste facilities.
    (e) Pay the expenses associated with providing the technical 
assistance and/or training authorized in paragraphs (a) through (d) of 
this section.

[[Page 70883]]

Sec.  1775.37  Allocation of funds.

    At least 10 percent of available funds will be used for funding 
single State projects based on the priority criteria.


Sec. Sec.  1775.38-1775.60  [Reserved]

Subpart D--Solid Waste Management Grants


Sec.  1775.61  Authorization.

    This subpart sets forth the policies and procedures for making 
Solid Waste Management (SWM) grants authorized under section 310B of 
the CONACT.


Sec.  1775.62  [Reserved]


Sec.  1775.63  Objectives.

    The objectives of the program are to:
    (a) Reduce or eliminate pollution of water resources, and
    (b) Improve planning and management of solid waste sites.


Sec.  1775.64  [Reserved]


Sec.  1775.65  Eligibility.

    (a) Entities eligible for grants must be either:
    (1) Private nonprofit organizations with tax exempt status 
designated by the Internal Revenue Service. A nonprofit organization is 
defined as any corporation, trust, association, cooperative, or other 
organization that:
    (i) Is operated primarily for scientific, education, service, 
charitable, or similar purposes in the public interest.
    (ii) Is not organized primarily for profit.
    (iii) Uses its net proceeds to maintain, improve, and/or expand its 
operations.
    (2) Public bodies.
    (3) Federally acknowledged or State-recognized Native American 
tribe or group.
    (4) Academic institutions.
    (b) Entities must be legally established and located within a state 
as defined in Sec.  1775.2.
    (c) Organizations must be incorporated by December 31 of the year 
the application period occurs to be eligible for funds.
    (d) Private businesses, Federal agencies, and individuals are 
ineligible for these grants.
    (e) Applicants must also have the proven ability; background; 
experience, as evidenced by the organization's satisfactory completion 
of project(s) similar to those proposed; legal authority; and actual 
capacity to provide technical assistance and/or training on a regional 
basis to associations as provided in Sec.  1775.63. To meet the 
requirement of actual capacity, an applicant must either:
    (1) Have the necessary resources to provide technical assistance 
and/or training to associations in rural areas through its staff, or
    (2) Be assisted by an affiliate or member organization which has 
such background and experience and which agrees, in writing, that it 
will provide the assistance, or
    (3) Contract with a nonaffiliated organization for not more than 49 
percent of the grant to provide the proposed assistance.


Sec.  1775.66  Purpose.

    Grants may be made to organizations as defined in Sec.  1775.65 to 
enable such organizations to assist associations to:
    (a) Provide technical assistance and/or training to reduce the 
solid waste stream through reduction, recycling, and reuse.
    (b) Provide training to enhance operator skills in maintaining and 
operating active landfills.
    (c) Provide technical assistance and/or training for operators of 
landfills which are closed or will be closed in the near future with 
the development/implementation of closure plans, future land use plans, 
safety and maintenance planning, and closure scheduling within permit 
requirements.
    (d) Evaluate current landfill conditions to determine the threats 
to water resources.
    (e) Pay the expenses associated with providing the technical 
assistance and/or training authorized in paragraphs (a) through (d) of 
this section.


Sec.  1775.67  Allocation of funds.

    The maximum amount for a single applicant for a Solid Waste 
Management project will be 25 percent of available grant funds.


Sec.  1775.68  Exception authority.

    The Administrator may, in individual cases, make an exception to 
any requirement or provision of this part which is not inconsistent 
with the authorizing statute or other applicable law and is determined 
to be in the Government's interest.


Sec. Sec.  1775.69-1775.99  [Reserved]

    Dated: November 24, 2004.
Hilda Gay Legg,
Administrator, Rural Utilities Service.
[FR Doc. 04-26948 Filed 12-7-04; 8:45 am]
BILLING CODE 3410-15-P