[Federal Register Volume 74, Number 58 (Friday, March 27, 2009)]
[Rules and Regulations]
[Pages 13313-13318]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-6816]



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  Federal Register / Vol. 74, No. 58 / Friday, March 27, 2009 / Rules 
and Regulations  

[[Page 13313]]



DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 1291

[Document Number AMS-FV-08-0057; FV-08-379]
RIN 0581-AC88


Specialty Crop Block Grant Program--Farm Bill

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: This rule finalizes regulations to administer the Specialty 
Crop Block Grant Program--Farm Bill (SCBGP-FB) to enhance the 
competitiveness of specialty crops. This action finalizes eligibility 
and application requirements and grant administration procedures for 
the SCBGP-FB consistent with the Food, Conservation, and Energy Act of 
2008 (Farm Bill) amendments to the Specialty Crops Competitiveness Act 
of 2004. This program is separate from the Specialty Crop Block Grant 
Program (SCBGP).

DATES: Effective March 30, 2009.

FOR FURTHER INFORMATION CONTACT: Trista Etzig, Fruit and Vegetable 
Programs, AMS, USDA, 1400 Independence Avenue, SW., Stop 0235, 
Washington, DC 20250-0235; Telephone: (202) 690-4942; Fax: (202) 720-
0016; or 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).

Public Law 104-4

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on state and local governments and 
the private sector. Under section 202 of the UMRA, the Agricultural 
Marketing Service (AMS) generally must prepare a written statement, 
including a cost benefit analysis, for proposed and final rules with 
``Federal mandates'' that may result in expenditures by state and local 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year (2 U.S.C. 1532). When such a statement 
is needed for a rule, section 205 of the UMRA generally requires 
federal agencies to identify and consider a reasonable number of 
regulatory alternatives and adopt the least costly, most cost 
effective, or least burdensome alternative that achieves the objectives 
of the rule (2 U.S.C. 1535).
    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) for state and local governments or 
the private sector of $100 million or more in any one year. Therefore, 
this rule is not subject to the requirements of sections 202 and 205 of 
the UMRA.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This action is not intended to have retroactive effect. 
This rule will not preempt any state or local laws, regulations or 
policies, unless they present an irreconcilable conflict with this 
rule. There are no administrative procedures which must be exhausted 
prior to any judicial challenge to the provisions of this rule.

Catalog of Federal Domestic Assistance

    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.170, Specialty Crop Block Grant Program--Farm 
Bill.

Executive Order 12372

    This program is subject to Executive Order 12372, which requires 
intergovernmental consultation with state and local officials (See 7 
CFR part 3015, subpart V).

Executive Order 12612

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

Regulatory Flexibility Act

    The AMS certifies that this rule will not have a significant impact 
on a substantial number of small entities as defined in the Regulatory 
Flexibility Act, Pub. L. 96-534, as amended (5 U.S.C. 601 et seq.). 
This rule only will impact state departments of agriculture that apply 
for grant funds. States, as defined under the SCBGP-FB, mean the fifty 
States, the District of Columbia, the Commonwealth of Puerto Rico, 
Guam, American Samoa, the U.S. Virgin Islands, and the Commonwealth of 
the Northern Mariana Islands. The States are not small entities under 
the Act.

Authority for a Specialty Crop Block Grant Program

    This program is intended to accomplish the goal of enhancing the 
competitiveness of specialty crops. The SCBGP-FB is authorized under 
section 101 of the Specialty Crops Competitiveness Act of 2004 (7 
U.S.C. 1621 note, amended under section 10109 of the Food, 
Conservation, and Energy Act of 2008, the Farm Bill). Section 10109 
directs the Secretary of Agriculture to make grants to states to be 
used by state departments of agriculture solely to enhance the 
competitiveness of specialty crops. This program is separate from the 
Specialty Crop Block Grant Program (SCBGP) found in 7 CFR part 1290.

Background

    The AMS Fruit and Vegetable Program intends to announce every 
fiscal year that applications may be submitted for participation in a 
``Specialty Crop Block Grant Program--Farm Bill'', which will be 
administered by personnel of AMS.
    Mandatory funding is expected to be made available to the Secretary 
of Agriculture to provide specialty crop block grants of $49 million 
for fiscal year 2009 and $55 million in each of

[[Page 13314]]

fiscal years 2010 through 2012, less USDA administrative costs. Each 
fiscal year, the AMS intends to publish a notice in the Federal 
Register announcing the program and soliciting grant applications. The 
notice will include the amount of grant funds available to each state 
and the application period.
    For each fiscal year, each state that submits an application that 
is reviewed and approved by AMS is to receive at least an amount that 
is equal to the higher of $100,000, or \1/3\ of 1 percent of the total 
amount of funding made available for that fiscal year to enhance the 
competitiveness of specialty crops. In addition, each state will 
receive an amount that represents the proportion of the value of 
specialty crop production in the state in relation to the national 
value of specialty crop production using the latest available complete 
specialty crop production data set in all states whose applications are 
accepted.
    All 50 States, the District of Columbia, the Commonwealth of Puerto 
Rico, Guam, American Samoa, the U.S. Virgin Islands, and the 
Commonwealth of the Northern Mariana Islands are eligible to 
participate. SCBGP-FB applications will be accepted from any state 
department of agriculture, that means the agency, commission, or 
department of a state government responsible for agriculture within the 
state.
    ``Specialty crops'' for the purpose of this rule, means fruits and 
vegetables, tree nuts, dried fruits, horticulture and nursery crops 
(including floriculture). The inclusion of horticulture means turfgrass 
sod is a covered commodity.
    Projects that support biobased products and bioenergy and energy 
programs, including biofuels and other alternative uses for 
agricultural and forestry commodities (development of biobased 
products) should see the USDA energy Web site at: http://www.usda.gov/rus/index2/0208/EnergyPrograms.htm for information on how to submit 
those projects for consideration to the energy programs supported by 
USDA. Also, agricultural cooperatives, producer networks, producer 
associations, local governments, nonprofit corporations, public health 
corporations, economic development corporations, regional farmers' 
market authorities and Tribal governments that are interested in 
submitting projects that support farmers' markets that do not solely 
enhance the competitiveness of eligible specialty crops should visit 
the Farmers' Market Promotion Program (FMPP) Web site at: http://www.ams.usda.gov/fmpp for information on how to submit those projects 
for consideration to FMPP.
    Section 1291.4 prescribes that grant funds shall be used solely to 
enhance the competitiveness of eligible specialty crops and benefit the 
specialty crop industry and/or the public. For a list of eligible 
specialty crops and ineligible commodities, please refer to the SCBGP 
Web site at http://www.ams.usda.gov/fv.
    Section 1291.6 prescribes application procedures that include a 
State plan to indicate how grant funds will be utilized solely to 
enhance the competitiveness of specialty crops. For examples on how to 
complete the application, please refer to the SCBGP-FB Web site at 
http://www.ams.usda.gov/fv.
    State departments of agriculture are required to describe their 
outreach efforts to specialty crop producers, including socially 
disadvantaged and beginning farmers, and describe their efforts to 
conduct a competitive process to ensure maximum public input and 
benefit.
    Section 1291.9 prescribes that states who do not apply for or do 
not request all available funding during the specified grant 
application period will forfeit all or that portion of available 
funding not requested for that application year. Funds not obligated 
will be allocated pro rata to the remaining states who applied during 
the specified grant application period to be solely expended on 
projects previously approved in their State plan.
    A technical correction was made to Sec.  1291.10(d) to add the 
SCBGP-FB to the statement that AMS, after reasonable notice to a State, 
and opportunity to be heard, finds that there has been a failure by the 
State to comply substantially with any provision or requirement of the 
State plan, AMS may disqualify, for one or more years, the State from 
receipt of future grants under the SCBGP or SCBGP-FB.
    An interim final rule was published in the Federal Register on 
September 4, 2008 (73 FR 51585). Interested persons were invited to 
submit written comments until November 3, 2008. During the comment 
period, five comments were received. Comments were received from 
specialty crop organizations, one state department of agriculture and a 
university. AMS has considered each comment timely submitted, and they 
are discussed below.

Summary of Comments Received

Completed Application

    One commenter suggested that the language in Sec.  1291.6(d)(1), 
``If outreach was performed to specialty crop producers, including 
socially disadvantaged and beginning farmers of specialty crops 
regarding the SCBGP-FB, provide a description of the affirmative steps 
taken to perform this outreach to these groups'' does not adequately 
comply with the statement in the Joint Explanatory Statement of the 
Committee of Conference on pages 239-240 (Farm Bill Managers report) 
requesting USDA to ``encourage each state making applications for 
funding under the Specialty Crop Block Grant Program to provide a 
written plan detailing the affirmative steps it will take to perform 
outreach to specialty crop producers in the development of the state's 
overall grant plan, including outreach to socially disadvantaged and 
beginning farmers of specialty crops.'' The commenter requests the 
language be revised to require an annual written plan and a 
demonstration of real, iterative progress in funding projects that 
benefit socially disadvantaged and beginning farmers of specialty 
crops. While AMS believes the language in the interim final rule 
adequately addresses the concerns raised in the Farm Bill Managers 
report, AMS has amended Sec.  1291.6(d)(1) to require the affirmative 
steps each state has made in conducting outreach to socially 
disadvantaged and beginning farmers including how the these groups were 
identified and the methods used to reach out to them. If steps were not 
taken to conduct outreach to these groups, provide a justification why 
not. In addition, definitions for both beginning farmers and socially 
disadvantaged farmers have been added to Sec.  1291.2.
    One commenter suggested the language in Sec.  1291.6(d)(1), 
``Indicate if a competitive process was used to solicit and evaluate 
grant proposals from all interested parties. If a competitive process 
was not used to solicit and evaluate grant proposals, explain why not'' 
does not meet the intent of the statement in the Farm Bill Managers 
report requesting USDA to ``encourage state departments of agriculture 
to develop their grant plans through a competitive process in order to 
ensure maximum public input and benefit.'' The commenter recommends the 
language be amended to include a clear, positive statement of the 
expectation that grants will generally be competitive, and that at a 
minimum, a competitive award should be made by a peer review panel that 
includes a full range of interested stakeholders and experts and that 
any exceptions to this should be explained in full. AMS has evaluated 
this comment and while this comment has merit, AMS believes that the 
states should have flexibility in

[[Page 13315]]

establishing processes for conducting fair and equitable reviews of 
grant proposals. Nonetheless, AMS is revising Sec.  1291.6(d)(1) to 
request a description of the fair and equitable grant proposal review 
process used by the state department of agriculture.
    One commenter requested that amendments be made to Sec.  1291.6 to 
comply with the Farm Bill Managers Report language urging the USDA to 
``encourage state departments of agriculture to develop their grant 
plans through a competitive process in order to ensure maximum public 
input and benefit. The Managers expect the Secretary to ensure that 
states conduct extensive outreach to interested parties through a 
transparent process of receiving and considering public comment so that 
grant applications are developed with proven and justified public 
support, particularly when developing applications for multistate 
projects.''
    The commenter recommended that states be required to describe the 
outreach conducted by the state to specialty crop stakeholders and 
specialty crop organizations to determine their priority needs and to 
solicit proposals; describe the criteria used by the state to evaluate 
the projects proposed for funding, including but not limited to how 
reviews are conducted; and provide a copy of the request for proposals 
issued in a competitive process or provide justification for not using 
a competitive process. These comments have merit and Sec.  1291.6(d)(1) 
has been revised to require states to identify the methods used to 
solicit proposals that meet specialty crop stakeholders needs and to 
request a description of the fair and equitable grant proposal review 
process. The commenter also recommended that states describe how the 
projects funded will enhance productivity and competitiveness of 
specialty crop agriculture in their state; and describe any 
stakeholders and organizations that proposed and/or supported funded 
projects. The State plan criteria described in Sec.  1291.6(d) requires 
states to describe how funds will be utilized to enhance the 
competitiveness of specialty crops and Sec.  1291.6(d)(9) requires 
states to describe how all grant partners commit to and work towards 
supporting the goals and outcomes of measures of the proposed projects. 
Accordingly, no changes have been made as a result of this comment.
    The commenter also recommended states delineate whether approved 
projects received additional funding from state resources. The 
Specialty Crops Competitiveness Act of 2004, as amended, does not 
contain a statutory provision for a matching requirement from the 
state. In addition, under Sec.  1291.5(c), grant funds shall supplement 
the expenditure of state funds in support of specialty crops grown in 
the state, rather than replace state funds. AMS includes this provision 
in the terms and conditions in each grant agreement and expects to 
focus on compliance by the states with this provision. Accordingly, no 
changes have been made as a result of this comment.
    The same commenter also requested that states describe ``to the 
extent possible, how the projects will leverage other public and 
private investments for maximum benefits.'' This comment has merit. AMS 
is amending Sec.  1291.6(d)(1) to require states to include in the 
description of the competitive grant process, the steps taken to 
receive and consider public comment to identify specialty crop 
stakeholders' priority needs in enhancing the competiveness of 
specialty crops and the process used to conduct a fair and equitable 
grant proposal review process. Therefore, in their grant application to 
AMS, the states will be responsible for including projects that provide 
maximum benefit to the specialty crop stakeholders based upon their 
competitive grant process.
    One commenter requested the states describe how funding is being 
used to strictly promote specialty crops as defined under the Act for 
projects directed at state marketing programs and to address the Farm 
Bill Managers report which stated that, ``The Managers expect the 
Secretary to carefully monitor the use of funds under grant awards to 
ensure that funds are promoting specialty crops as defined under the 
Specialty Crops Competitiveness Act of 2004 and are not being used in 
generically cross-marketing other commodities which fall under state 
marketing programs but are outside the scope of the Act's definition.'' 
This comment has merit and AMS has clarified Sec.  1291.4(a) to read, 
``To be eligible for a grant, the project(s) must solely enhance the 
competitiveness of U.S. grown or U.S. territory grown eligible 
specialty crops, in either domestic or foreign markets''. In addition, 
AMS clarified Sec.  1291.6(d)(3) to read, ``If funding is being 
directed at a state marketing program, describe how the state will 
ensure that funding is being used solely to enhance the competitiveness 
of specialty crops as defined under Sec.  1291.2(n).''
    One commenter recommended states identify if state property is 
purchased with grant funds. Under Sec.  1291.6(b), for each proposed 
project, states are required to submit form SF-424A, ``Budget 
Information--Non-Construction Programs'', which requires a state to 
specify dollar amounts for each budget category, including categories 
for types of property. In addition, under Sec.  1291.6(d)(7), states 
are required to provide for each project a detailed budget narrative 
providing sufficient information about the budget categories listed on 
the SF-424A to demonstrate that funds are being expended on eligible 
grant activities. Furthermore, AMS has amended Sec.  1291.5 to add that 
``capital expenditures for general purpose equipment, buildings, and 
land are unallowable as direct and indirect charges'' and that 
``capital expenditures for specialty purpose equipment are allowable as 
direct costs, provided that items with a unit cost of $5000 or more 
have the prior approval of AMS''. Section 1291.5 has also been amended 
to add that ``rental costs of buildings and equipment are allowable as 
direct costs in accordance with the cost principles in Subpart T of 7 
CFR 3015.'' Sec. 1291.2 has also been amended to add a definition for 
``capital expenditures'', ``equipment'', ``general purpose equipment'', 
and ``specialty purpose equipment''.
    One commenter recommended states describe how they are focusing on 
multi-state and regional projects to comply with the Farm Bill Managers 
Report language, ``The Managers therefore request that the Secretary 
encourage state departments of agriculture to submit grant plans that 
include multi-state and regional project proposals.'' AMS specifies 
that multi-state projects are eligible projects under Sec.  1291.4(d) 
and in the State plan under Sec.  1291.6(d)(10). In addition, we are 
revising Sec.  1291.6(d)(1) to reiterate that multi-state projects are 
eligible.

Eligible Grant Projects

    One commenter suggests the language in Sec.  1291.6(d)(1), 
``Identify if an award was made to either a socially disadvantaged or 
beginning farmer'' be changed to, ``Identify if an award was made to an 
association or organization to be used solely for the benefit of 
socially disadvantaged or beginning farmers'' to conform with the 
eligible grant project requirements under Sec.  1291.4(c). The language 
under Sec. 1291.4(c) does not restrict or limit awards to single 
individuals as subgrantees, but instead states they are eligible if 
they participate with a project partner to execute a project that 
benefits the specialty crop industry rather than a single individual. 
Accordingly, no

[[Page 13316]]

changes have been made as a result of this comment.
    One commenter requests further guidance from AMS on the eligibility 
of projects where a state department of agriculture proposes to make 
further awards of funding to subgrantees. AMS has revised Sec.  
1291.6(d)(1) to require state departments of agriculture to include in 
the description of the competitive grant process the steps taken to 
solicit proposals that meet specialty crops stakeholders needs.

Purpose and Scope

    One commenter recommended the inclusion of the following items to 
the definition of ``enhancing the competitiveness'' of specialty crops: 
value-added enterprises, entrepreneurship, local and regional food 
systems, value chain development, marketing infrastructure, consumer 
labeling, beginning farmers of specialty crops, socially disadvantaged 
farmers of specialty crops, preservation of farmland dedicated to 
specialty crop production, and extension. AMS has amended Sec.  1291.1 
to encourage states to develop projects pertaining to specific issues 
affecting the specialty crop industry.

Unobligated Funds

    One commenter requested the language stating unobligated funds will 
be allocated ``pro rata to the remaining states who applied during the 
specified grant application period to be solely expended on projects 
previously approved in their State plan'' be amended to take into 
consideration the Farm Bill Managers Report, which states that, ``The 
Managers also request the Secretary to give strong consideration to 
multi-state projects when reallocating unobligated block grant 
funding.'' The language in Sec.  1291.9(b) reflects the statutory 
language that appears in Sec. 10109(i) of the Food, Conservation, and 
Energy Act of 2008. If a state that previously submitted an approved 
multi-state project receives reallocated block grant funding, the state 
could give consideration to reallocating funds to that previously 
approved multi-state project, but not to any new multi-state projects. 
Accordingly, no changes are made as a result of this comment.

Review of Grant Applications

    One commenter requested further detail be provided in regard to 
what is expected in the grant application in relation to the language 
in Sec.  1291.7 that states, ``AMS may request the applicant provide 
additional information or clarification''. This section states grant 
applications will be reviewed and approved or rejected for conformance 
with Sec.  1291.6, a provision that contains details on what 
documentation should be included in the completed application. 
Accordingly, no changes are made as a result of this comment.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.), AMS submitted the information collection included in 
this rulemaking to the Office of Management and Budget (OMB) and 
obtained approval of the information collection under OMB number 0581-
0248.
    Comments were invited on the information collection in September 4, 
2008, interim final rule. The deadline for comments was November 3, 
2008. No comments were received on the information collection.
    The estimated one-time annual cost for all state departments of 
agriculture in providing information to the Specialty Crop Block Grant 
Program-Farm Bill is $37,097. This total has been estimated by 
multiplying 1,439 total burden hours by $25.78, an average of mean 
hourly earnings by state and local government white collar (excluding 
sales) employees. Data for computation of this hourly wage were 
obtained from the U.S. Department of Labor Statistic's publication 
``National Compensation Survey: Occupational Wages in the United 
States, June 2005'', published August 2006 (Bulletin 2581). This 
publication can also be found at the following Web site: http://www.bls.gov/ncs/ocs/sp/ncbl0832.pdf.

Effective Date

    Because the Farm Bill requires the Secretary of Agriculture to make 
available approximately $49 million in grant funds in fiscal year 2009, 
which ends September 30, 2009, pursuant to 5 U.S.C. 553, it is found, 
and determined, that good cause exists for not postponing the effective 
date of this final rule until 30 days after publication in the Federal 
Register.

List of Subjects in 7 CFR Part 1291

    Agriculture, Reporting and recordkeeping requirements, Specialty 
crop block grants.


0
Accordingly, the interim final rule adding 7 CFR part 1291 which was 
published at 73 FR 51585 on September 4, 2008, is adopted as a final 
rule with the following changes:

PART 1291--SPECIALTY CROP BLOCK GRANT PROGRAM--FARM BILL

0
1. The authority citation for part 1291 continues to read as follows:

    Authority: 7 U.S.C. 1621 note, as amended.


0
2. Revise Sec.  1291.1 to read as follows:


Sec.  1291.1  Purpose and scope.

    (a) Pursuant to the authority conferred by Section 101 of the 
Specialty Crops Competitiveness Act of 2004 (7 U.S.C. 1621 note), as 
amended by Section 10109 of the Food, Conservation, and Energy Act of 
2008, Public Law 110-246, AMS will make grants to states to enhance the 
competitiveness of specialty crops in accordance with the terms and 
conditions set forth herein and other applicable federal statutes and 
regulations, including, but not limited to, 7 CFR part 3015 and part 
3016.
    (b) AMS encourages states to develop projects solely to enhance the 
competitiveness of specialty crops pertaining to the following issues 
affecting the specialty crop industry: increasing child and adult 
nutrition knowledge and consumption of specialty crops; participation 
of industry representatives at meetings of international standard 
setting bodies in which the U.S. government participates; improving 
efficiency and reducing costs of distribution systems; assisting all 
entities in the specialty crop distribution chain in developing ``Good 
Agricultural Practices'', ``Good Handling Practices'', ``Good 
Manufacturing Practices'', and in cost-share arrangements for funding 
audits of such systems for small farmers, packers and processors; 
investing in specialty crop research, including organic research to 
focus on conservation and environmental outcomes; enhancing food 
safety; developing new and improved seed varieties and specialty crops; 
pest and disease control; and sustainability.

0
3. Revise Sec.  1291.2 to read as follows:


Sec.  1291.2  Definitions.

    (a) AMS means the Agricultural Marketing Service of the U.S. 
Department of Agriculture.
    (b) Application means the application for the Specialty Crop Block 
Grant Program--Farm Bill (SCBGP-FB).
    (c) Beginning farmer or rancher means an individual or entity who 
has not operated a farm or ranch for more than 10 years and 
substantially participates in the operation.
    (d) Capital expenditures means expenditures for the acquisition 
cost of capital assets (equipment, buildings,

[[Page 13317]]

land), or expenditures to make improvements to capital assets that 
materially increase their value or useful life. Acquisition cost means 
the cost of the asset including the cost to put it in place. 
Acquisition cost for equipment, for example, means the net invoice 
price of the equipment, including the cost of any modifications, 
attachments, accessories, or auxiliary apparatus necessary to make it 
usable for the purpose for which it is acquired. Ancillary charges, 
such as taxes, duty, protective in transit insurance, freight, and 
installation may be included in, or excluded from the acquisition cost 
in accordance with the governmental unit's regular accounting 
practices.
    (e) Equipment means an article of nonexpendable, tangible personal 
property having a useful life of more than one year and an acquisition 
cost which equals or exceeds the lesser of the capitalization level 
established by the governmental unit for financial statement purposes, 
or $5000.
    (f) General purpose equipment means equipment, which is not limited 
to research, scientific or other technical activities. Examples include 
office equipment and furnishings, telephone networks, information 
technology equipment and systems, reproduction and printing equipment, 
and motor vehicles.
    (g) Grant period means the period of time from when the grant 
agreement is signed to the completion of all SCBGP-FB projects 
submitted in the State plan.
    (h) Grantee means the government to which a grant is awarded and 
which is accountable for the use of the funds provided. The grantee is 
the entire legal entity even if only a particular component of the 
entity is designated in the grant agreement.
    (i) Indirect costs means those costs incurred for a common or joint 
purpose benefitting more than one cost objective, and not readily 
assignable to the cost objectives specifically benefitted, without 
effort disproportionate to the results achieved.
    (j) Outcome measure means an event or condition that is external to 
the project and that is of direct importance to the intended 
beneficiaries and/or the public.
    (k) Project means all proposed activities to be funded by the 
Specialty Crop Block Grant Program--Farm Bill.
    (l) Socially disadvantaged farmer or rancher means a farmer or 
rancher who is a member of a socially disadvantaged group. A ``Socially 
Disadvantaged Group'' is a group whose members have been subject to 
discrimination on the basis of race, color, national origin, age, 
disability, and where applicable, sex, marital status, familial status, 
parental status, religion, sexual orientation, genetic information, 
political beliefs, reprisal, or because all or a part of an 
individual's income is derived from any public assistance program.
    (m) Special purpose equipment means equipment which is used only 
for research, scientific, or other technical activities.
    (n) Specialty crop means fruits and vegetables, tree nuts, dried 
fruits, horticulture and nursery crops (including floriculture).
    (o) State means the fifty states, the District of Columbia, the 
Commonwealth of Puerto Rico, Guam, American Samoa, the United States 
Virgin Islands, and the Commonwealth of the Northern Mariana Islands.
    (p) State department of agriculture means the agency, commission, 
or department of a state government responsible for agriculture within 
the state.
    (q) Subgrantee means the government or other legal entity to which 
a subgrant is awarded and which is accountable to the grantee for the 
use of funds provided.

0
4. Revise paragraph (a) of Sec.  1291.4 to read as follows:


Sec.  1291.4  Eligible grant project.

    (a) To be eligible for a grant, the project(s) must solely enhance 
the competitiveness of U.S. grown or U.S. territory grown eligible 
specialty crops, in either domestic or foreign markets.
* * * * *

0
5. Add new paragraphs (e), (f), and (g) to Sec.  1291.5 to read as 
follows:


Sec.  1291.5  Restrictions and limitations on grant funds.

* * * * *
    (e) Capital expenditures for general purpose equipment, buildings, 
and land are unallowable as direct and indirect charges.
    (f) Capital expenditures for special purpose equipment are 
allowable as direct costs, provided that items with a unit cost of 
$5000 or more have the prior approval of AMS.
    (g) Rental costs of buildings and equipment are allowable as direct 
costs in accordance with the cost principles in subpart T of 7 CFR part 
3015.

0
6. Revise Sec.  1291.6 to read as follows:


Sec.  1291.6  Completed application.

    Completed applications shall be clear and succinct and shall 
include the following documentation satisfactory to AMS.
    (a) One SF-424 ``Application for Federal Assistance''.
    (b) SF-424A ``Budget Information--Non-Construction Programs'' 
showing the budget for each project.
    (c) One SF-424B ``Assurances--Non-Construction Program''.
    (d) Completed applications must also include one State plan to show 
how grant funds will be utilized solely to enhance the competitiveness 
of specialty crops. The State plan shall include the following:
    (1) Cover page and granting processes. Include the point of contact 
and lead agency for administering the plan. Provide a description of 
the affirmative steps taken to conduct outreach to socially 
disadvantaged farmers and beginning farmers. Describe how these groups 
were identified and the methods used to reach out to them. Identify if 
an award was made to either a socially disadvantaged farmer or a 
beginning farmer. If steps were not taken to conduct outreach to these 
groups, provide a justification for why not. Provide a description of 
the affirmative steps taken to conduct a competitive grant process. 
Include the steps taken to conduct outreach to specialty crop 
stakeholders to receive and consider public comment to identify their 
priority needs in enhancing the competiveness of specialty crops. 
Identify the methods used to solicit proposals that meet specialty crop 
stakeholders' needs, including any focus on multi-state projects. 
Include a description of the process used to review proposals in a fair 
and equitable manner. State departments of agriculture may also provide 
a copy of the issued request for proposals. If a competitive grant 
process was not used, provide a justification why not.
    (2) Project title and abstract. Include the title of the project 
and an abstract of 200 or fewer words for each project.
    (3) Project purpose. For each project, clearly state the purpose of 
the project. Describe the specific issue, problem, interest, or need to 
be addressed. Explain why the project is important and timely. If 
funding is being directed at a state marketing program, describe how 
the state will ensure that funding is being used solely to enhance the 
competitiveness of specialty crops as defined in Sec.  1291.2(n). If a 
project builds on a previous Specialty Crop Block Grant Program (SCBGP) 
or SCBGP-FB project, indicate clearly how the new project compliments 
previous work. For each project, indicate if the project will be or has 
been submitted to or funded by another Federal or State grant program.
    (4) Potential impact. Discuss the number of people or operations 
affected, the intended beneficiaries of each

[[Page 13318]]

project, and/or potential economic impact if such data are available 
and relevant to the project.
    (5) Expected measurable outcomes. For each project, describe at 
least one distinct, quantifiable, and measurable outcome-oriented 
objective that directly and meaningfully supports the project's 
purpose. The measurable outcome-oriented objective must define an event 
or condition that is external to the project and that is of direct 
importance to the intended beneficiaries and/or the public. Outcome 
measures may be long term that exceed the grant period. Describe how 
performance toward meeting outcomes will be monitored. For each 
project, include a performance-monitoring plan to describe the process 
of collecting and analyzing data to meet the outcome-oriented 
objectives.
    (6) Work plan. For each project, explain briefly the activities 
that will be performed to accomplish the objectives of the project. Be 
clear about who will do the work. Include appropriate time lines.
    (7) Budget narrative. The limit on indirect costs, not to exceed 10 
percent, will be published in a Federal Register notice each fiscal 
year. Provide a justification if indirect costs exceed 10 percent or 
exceed that fiscal year's limit as announced in the Federal Register. 
Provide in sufficient detail information about the budget categories 
listed on SF-424A for each project to demonstrate that grant funds are 
being expended on eligible grant activities that meet the purpose of 
the program.
    (8) Project oversight. Describe the oversight practices that 
provide sufficient knowledge of grant activities to ensure proper and 
efficient administration for each project.
    (9) Project commitment. Describe how all grant partners commit to 
and work toward the goals and outcome measures of each proposed 
project(s).
    (10) Multi-state projects. If the project is a multi-state project, 
describe how the states are going to collaborate effectively with 
related projects with one state assuming the coordinating role. 
Indicate the percent of the budget covered by each state.

0
7. Revise the last sentence of Sec.  1291.10(d) to read as follows:


Sec.  1291.10  Reporting and oversight requirements.

* * * * *
    (d) * * * If AMS, after reasonable notice to a State, and 
opportunity to be heard, finds that there has been a failure by the 
State to comply substantially with any provision or requirement of the 
State plan, AMS may disqualify, for one or more years, the State from 
receipt of future grants under the SCBGP or SCBGP-FB.
* * * * *

    Dated: March 23, 2009.
Robert C. Keeney,
Acting Associate Administrator.
[FR Doc. E9-6816 Filed 3-26-09; 8:45 am]
BILLING CODE 3410-02-P