[Federal Register Volume 80, Number 169 (Tuesday, September 1, 2015)]
[Rules and Regulations]
[Pages 52606-52614]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-21122]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1784

RIN 0572-AC28


Section 306D Water Systems for Rural and Native Villages in 
Alaska

AGENCY: Rural Utilities Service, USDA.

ACTION: Final rule.

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SUMMARY: The Rural Utilities Service (RUS), an Agency of the United 
States Department of Agriculture (USDA), is modifying its existing 
regulations to establish a separate regulation for making grants to 
rural or Native Alaskan Villages under the Rural Alaska Village Grant 
(RAVG) Program. The existing RAVG regulation will be relocated to its 
own section and modified to conform with streamlined processes 
established through a Memorandum of Understanding among USDA, RUS; The 
United States Department of Health and Human Services, Indian Health 
Service (IHS); The State of Alaska, Department of Environmental 
Conservation (DEC); and the Alaska Native Tribal Health Consortium 
(ANTHC). The grants will be provided directly to a rural or Native 
Alaskan Village or jointly with either DEC or ANTHC for the development 
and construction of water and wastewater systems to improve the health 
and sanitation conditions in those Villages through removal of dire 
sanitation conditions.

DATES: This rule is effective September 1, 2015.

FOR FURTHER INFORMATION CONTACT: Jacqueline M. Ponti-Lazaruk, Assistant 
Administrator, Water and Environmental Programs, Rural Utilities 
Service, Rural Development, U.S. Department of Agriculture, 1400 
Independence Avenue SW., STOP 1548, Room 5147, Washington, DC 20250-
1590. Telephone number: (202) 690-2670, Facsimile: (202) 720-0718.

SUPPLEMENTARY INFORMATION: 

Executive Order 12866

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

Executive Order 12988

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. RUS has determined that this rule meets the 
applicable standards provided in section 3 of that 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. 6912(e)), 
administrative appeal procedures must be exhausted before an action 
against the Department or its agencies may be initiated.

Regulatory Flexibility Act Certification

    Pursuant to 5 U.S.C. 553(a) (2), this final rule related to grants 
is exempt from the rulemaking requirements of the Administrative 
Procedure Act (5 U.S.C. 551 et seq.), including the requirement to 
provide prior notice and an opportunity for public comment. Because 
this rule is not subject to a requirement to provide prior notice and 
an opportunity for public comment pursuant to 5 U.S.C. 553, or any 
other law, the analytical requirements of the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.) are inapplicable.

Information Collection and Recordkeeping Requirements

    The information collection and recordkeeping requirements contained 
in this final rule are pending approval by OMB pursuant to the 
Paperwork Reduction Act 1995 (44 U.S.C. Chapter 35) under control 
number 0572-AC28 . The paperwork contained in this rule will not be 
effective until approved by OMB.

E-Government Act Compliance

    RUS is committed to the E-Government Act, which requires Government 
agencies in general to provide the public the option of submitting 
information or transacting business electronically to the maximum 
extent possible.

Catalog of Federal Domestic Assistance

    The program described by this final rule is listed in the Catalog 
of Federal Domestic Assistance Programs under number 10.760. This 
catalog is available electronically through the free CFDA Web site on 
the Internet at http://www.cfda.gov. The print edition may be purchased 
by calling the Superintendent of Documents at 202-512-1800 or toll free 
at 866-512-1800, or ordering it online at http://bookstore.gpo.gov.

Executive Order 12372

    All projects funded under this part are subject to Executive Order 
12372 (3 CFR, 1983 Comp., p. 197), which requires intergovernmental 
consultation with State and local officials. These requirements are set 
forth in U.S.

[[Page 52607]]

Department of Agriculture regulations 2 CFR part 415, subpart C, and RD 
Instruction 1940 J. In the case of grants made to DEC and ANTHC, DEC 
and ANTHC will certify that the requirements listed in paragraphs a-e 
are included in their agreements with the rural or native villages.
    Federally Recognized Tribes, however, are exempt from this process 
as set forth in the U.S. Department of Agriculture regulations 7 CFR 
1940.453(c) and RD Instruction 1940.J which addresses applications from 
Indian tribes. Specifically, applications from federally recognized 
Indian tribes are not subject to the requirements of this subpart. 
However, Indian tribes may voluntarily participate in the review system 
explained in this Subpart and are encouraged to do so. When a federally 
recognized Tribal Government has established a mechanism for 
coordinating the activities of Tribal departments, divisions, 
enterprises or entities, Rural Development will, on request of such 
Tribal Government transmitted through OMB, require that applications 
for assistance be subject to review by the Tribal coordinating 
mechanism as though it were a part of the consultation process under 
this Subpart.

Unfunded Mandates

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

National Environmental Policy Act Certification

    RUS has determined that this final 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.

Executive Order 13132, Federalism

    The policies contained in this final rule do not have any 
substantial direct effect on states, on the relationship between the 
national government and the states, or on the distribution of power and 
responsibilities among the various levels of government. Nor does this 
final rule impose substantial direct compliance costs on state and 
local governments. Therefore, consultation with the states is not 
required.

Executive Order 13175

    Executive Order 13175 imposes requirements on RUS in the 
development of regulatory policies that have tribal implications or 
preempt tribal laws. RUS has determined that this final rule has a 
substantial direct effect on one or more Indian tribe(s) or on either 
the relationship or the distribution of powers and responsibilities 
between the Federal Government and Indian tribes. Therefore, in 
anticipation of the publication of this final rule, RUS focused its 
quarterly Tribal Consultation webinar and teleconference process during 
the summer of 2013 on the Rural Alaska Village Grant program. A pre-
consultation briefing was held on June 20, 2013 to provide a thorough 
briefing of the Rural Alaska Village Grant program and the regulatory 
changes under consideration. This was followed by a Tribal Consultation 
webinar and teleconference on July 17, 2013. Input received by RUS 
through the Tribal Consultation process was considered alongside 
comments to the proposed rule and utilized in drafting the final rule. 
If a Tribe has questions about the Tribal Consultation process please 
contact Rural Development's Native American Coordinator at (720) 544-
2911 or [email protected].

Background

    The Rural Utilities Service, a Rural Development agency of the 
United States Department of Agriculture (RUS), works to improve the 
quality of life in rural America by providing investment capital, in 
the form of loans, loan guarantees, grants and technical assistance for 
the deployment of rural telecommunications, broadband, electric, water 
and environmental infrastructure. RUS loans, loan guarantee and grant 
programs act as a catalyst for economic and community development. By 
financing improvements to rural electric, water and waste, and 
telecommunications and broadband infrastructure, RUS plays a 
significant role in improving other measures of quality of life in 
rural America, including public health and safety, environmental 
protection, conservation, and cultural and historic preservation.

Comments

    RUS published a proposed rulemaking in the Federal Register on 
December 20, 2013 at 78 FR 77009 seeking comments on modification to an 
existing regulation and the establishment of a separate regulation for 
the RAVG program. The Agency received one comment from an outside 
Federal agency, the U.S. Army Corps of Engineers Alaska District 
Hydraulics Section, along with two public submissions from the Alaska 
Native Tribal Health Consortium (ANTHC) and the State of Alaska 
Department of Environmental Conservation (DEC) regarding the proposed 
rule. The commenters' responses are summarized below with the Agency's 
responses as follows:
    Issue 1: ANTHC and DEC stated that the definition of dire 
sanitation conditions is problematic and suggested modifying the 
existing definition because it does not allow identified deficiencies 
to be addressed until they have already undermined public health and 
until the deficiency is far more difficult and expensive to correct.
    Response: RUS agrees in part with the commenters and will modify 
parts 1 and 2 of the definition of dire sanitation conditions as 
presented by ANTHC in their comment submission. RUS is also adjusting 
part 3 of the definition so that it will allow an appropriate Federal 
agency (such as the Center for Disease Control) or a regulatory Agency 
of the State of Alaska to determine if the drinking water and/or sewer 
system does not meet regulatory requirements. RUS, however, disagrees 
with the proposed addition of a 4th part of the definition that would 
allow ``a professional engineer to determine if existing water and/or 
wastewater system components have exceeded their design life and 
replacements or upgrades are required to extend the service life to 
prevent loss of service or ability to meet regulatory or safety 
standards.'' The language as proposed would allow for any professional 
engineer, regardless of background, association, etc., to make a 
determination of need based on their personal assessment of a systems 
useful life. This approach would allow for inconsistencies in 
determinations and a potential for inaccurate prioritization of need. 
Allowing a professional engineer to determine whether a system has 
exceeded its useful life and is in need of repairs or replacement is 
not comparable to determining whether a dire sanitary need exists. 
Further, the commenters do not specify whether the professional 
engineer would be a private or public engineer. In the case of a 
private professional engineer, the Agency is concerned that there would 
be an incentive to prioritize the largest, most costly, projects to 
maximize revenues, rather than an unbiased prioritization of need. 
Section 306D of the Consolidated Farm and Rural Development Act 
authorizes the Secretary of Agriculture to ``make grants

[[Page 52608]]

to the State of Alaska for the benefit of rural or Native villages in 
Alaska to provide for the development and construction of water and 
wastewater systems to improve the health and sanitation conditions in 
those villages, and to prioritize the allocation of grants based on 
health and sanitation conditions.'' Given the limited grant funds 
available and the existing conditions in many native Alaskan villages, 
the Agency has determined that distinguishing between general lifecycle 
replacement need and dire sanitary need is necessary to ensure that 
funds are used for their highest purpose. As stated above, the Agency, 
upon consideration of the comments, will modify section three of the 
proposed definition of dire sanitary need to include language allowing 
appropriate Federal and State Agencies to assess the level of need. In 
doing so, the Agency expects that such qualified and appropriate 
agencies will make determinations based on standard evaluative 
processes. This approach will allow for more consistent determinations 
and meet the requirements of the statute.
    Issue 2: Sec.  1784.8(e) Eligibility--ANTHC and DEC request to 
delete some eligibility information as it relates to dire sanitation 
conditions.
    Response: RUS disagrees with deleting the information in Sec.  
1784.8(e) as it would be a disservice to the communities that face the 
highest health and safety issues related to inadequate sanitation 
services. The purpose of the language is to clearly identify the level 
of documentation needed by the Agency to make a proper determination of 
eligibility for funding. RUS has placed an emphasis on health and dire 
sanitation needs to ensure that federal funds are used appropriately. 
In cases where there is scientific evidence or reports with 
substantiated evidence of associated health issues, documentation may 
be accepted from an appropriate federal agency such as the Center for 
Disease Control. The Agency is also adding language to address the 
concern that other situations may exist beyond the definition of dire 
sanitary condition in this regulation that have a negative impact on 
the health or safety of an eligible community, Specifically, the Agency 
is adding paragraph (f) to Section 1784.8 to allow applicants to 
request a special review and eligibility determination in individual 
cases where a proposed project does not meet the definition of ``Dire 
sanitation condition'' in Sec.  1784.2, and where the applicant is able 
to satisfactorily demonstrate that a water or sewer system is deficient 
and negatively impacts the health or safety of the community. The 
decision to review an eligibility determination request and any 
determinations made subject to this paragraph will not be subject to 
administrative appeal.
    Through planning efforts, RUS will continue to work with ANTHC, 
DEC, and rural Alaskan communities to help plan sanitation projects. In 
the event that the project does not meet the dire sanitation condition 
definition, the planning documents created through a Predevelopment and 
Planning Grant, which is another grant program offered by RUS, can be 
utilized by the community to secure other funding through Rural 
Development's water and waste program or elsewhere. The dire sanitation 
eligibility criteria will apply to design and construction projects.
    Issue 3: Sec.  1784.10--Eligible Grant Purposes: There are three 
issues related to eligible grant purposes in which both ANTHC and DEC 
provided suggestions, which are as follows:
    Issue 3a. ANTHC suggests the proposed language for Reasonable Costs 
and Contingencies in Sec.  1784.10(b)(1) is misplaced and should be 
modified to include a specific reference to ``materials (including 
construction allowance) and freight.''
    Response: RUS agrees that the proposed language is misplaced and 
will relocate the language to Sec.  1784.10 (a). However, RUS disagrees 
with the modification of reasonable costs. The Agency is concerned that 
if reasonable costs including construction allowances were allowed, 
scarce grant funds may be used for excess parts and fewer grant funds 
would be available for actual construction of infrastructure in 
communities in great need. RUS will work with applicants as needed with 
regard to occasional breakage and/or defects of materials.
    Issue 3b. ANTHC suggests the proposed language for Training and 
Technical Assistance is not consistent with the Agriculture 
Appropriations Act and other documents.
    Response: RUS agrees that technical assistance funds may be 
provided to other entities as designated in the annual appropriations. 
RUS proposes to amend the language in Sec.  1784.10(b)(1)(iii) to align 
with the language in the Consolidated Appropriations Act, 2014.
    Issue 3c. ANTHC and DEC suggest the proposed rule limits 
installation of water and sanitation services to residential homes only 
and does not include public facilities except for those necessary for 
the successful operation and maintenance of the water and sanitation 
system. It is suggested that the rule be revised to allow funding for 
water and sewer connections for facilities that provide health and 
social services and public facilities such as schools, school housing, 
public safety offices, health care facilities, government offices, etc.
    Response: RUS disagrees with the proposed recommendations to modify 
the language in Sec.  1784.10(c)(1). While the authorizing statute 306D 
does not restrict RAVG funds to residential homes, it also makes no 
mention of offering these services to public facilities. RUS's 
interpretation of the statute's purpose is to provide infrastructure 
for water and wastewater systems and Alaskan village residents directly 
connected to those systems. The suggested facilities addressed by the 
commenters are, however, eligible under the Rural Development Community 
Facilities program whose eligibility includes public facilities. Refer 
to Community Facilities regulation Sec.  1942.17(d).
    Issue 4: Grantee Accounting Methods, Management Reporting and 
Audits--ANTHC finds the proposed language confusing.
    Response: RUS agrees that language in this section is confusing and 
will modify the language for simplicity.
    Issue 5: Exception Authority--ANTHC recommends this section be 
expanded to allow the RUS Administrator flexibility to consider using 
funds on a case-by-case basis for additional installations that will 
promote access to public health services and sustainability of the 
system; and also recommends that RUS consider a delegation of exception 
authority to the Rural Development Alaska State Director.
    Response: The request to broaden exception authority appears, from 
the comments filed, to be a vehicle to address concerns with what one 
or more commenters see as a too restrictive definition of dire sanitary 
need. As stated earlier, the definition of dire sanitary need will be 
modified in the final regulation to address comments filed and should 
allow sufficient room for professional assessment and determination of 
dire sanitary need. This will negate a need for expanded exception 
authority. RUS's Exception Authority has traditionally been reserved 
for the Administrator because such exceptions are rare and have great 
potential to more broadly impact programs. The Agency is not convinced 
by the commenters that codification of a specific delegation to a State 
Director is necessary.
    Issue 6: Compliance and Application Processing--There are three 
issues related to the compliance and

[[Page 52609]]

application process noted by ANTHC. They are as follows:
    Issue 6a: Revise Sec.  1784.18, Sec.  1784.20, and Sec.  1784.21--
ANTHC requests that Sec.  1784.18, Sec.  1784.20, and Sec.  1784.21 be 
revised to remove requirements that tribal applicants execute standard 
and other forms dealing with nondiscrimination requirements. It is also 
requested that Sec.  1784.21 be revised to eliminate the statement that 
all Rural Alaska Village grants are subject to USDA's civil rights 
regulations, particularly 7 CFR part 15 and 7 CFR part 1901, subpart E.
    Response: The forms required for RAVG applicants seek information 
that is required by the Agency for processing and/or by the Office of 
Management and Budget (OMB) for grant programs. The forms are utilized 
in all Agency water and waste disposal programs and are routinely 
completed by tribal applicants. The commenter has provided no 
compelling reason for a special exception for RAVG applicants.
    Issue 6b: Procurement by Applicants--ANTHC recommends modifying 
language in Sec.  1784.36 (a) to avoid confusion and to accommodate 
their current policies and procedures regarding contracting and 
procurement. In addition, ANTHC is concerned that language in this 
section might be applied to prevent consideration of other factors that 
contribute to system sustainability and costs at another level.
    Response: RUS agrees with the first recommendation made by ANTHC to 
revise the language of the proposed regulation with regard to 
procurement requirements Sec.  1784.36(a). The second sentence, 
``Procurement procedures shall not restrict or eliminate open and free 
competition'' will be removed. This requirement is already inherent in 
the statement that the State of Alaska, Department of Environmental 
Conservation (DEC) and ANTHC will base procurement procedures on OMB 
Uniform Administrative Requirements which specifically address open and 
free competition. We do not, however, concur in the addition of a 
separate requirement to consider system sustainability in selection of 
materials. Consideration of ``all materials normally suitable for the 
project based on sound engineering practices and project requirements'' 
is not intended to be exclusive and should not prevent consideration of 
other non-regulatory factors, such as sustainability as appropriate.
    Issue 6c. Information Collection and Record Keeping Requirements--
ANTHC is concerned that estimated burden hours are too low and should 
be significantly higher. Specifically, they estimate ``it takes 32 
hands on hours to complete the documents taking into account the time 
it takes to work with rural communities, to complete and execute 
documents that require information or a signature from them.'' They 
also state that many of the forms are redundant.
    Response: RUS disagrees and believes that ANTHC is misinterpreting 
burden estimates prepared by USDA in a separate information and 
collection package required under the Paperwork Reduction Act for this. 
ANTHC states in its comments that USDA's estimate of 2.5 hours is far 
too modest of an estimate for completion of required forms. The burden 
package developed for this regulation includes estimates for completion 
of each form or information requirement necessary to make application 
under the RAVG program. The aggregate burden is well above 2.5 hours.
    Issue 7: Floodplains/Subpart C, Sec.  1784.21(m) (Other 
Requirements)--Three commenters, ANTHC, DEC, and Ricky ``Lance'' 
Overstreet on behalf of US Army Corps of Engineers Alaska District 
Hydraulics Section, are concerned that specific language in this 
section will lead to narrow interpretations that could prevent the 
construction of water facilities, even where there is no undue threat 
of flooding.
    Response: Federal Emergency Management Agency (FEMA) flood 
insurance policy and guidance allows the use of information obtained 
through consultation with the community, or flooding sources (that) 
have been studied by other Federal, State, or local agencies. Some of 
these studies do not meet the National Flood Insurance Program (NFIP) 
standards for a Flood Insurance Study, but often contain valuable flood 
hazard information, which may be incorporated into the NFIP maps as 
approximate studies. Those types of studies typically cover developed 
or developing areas. They often contain flood elevation profiles that 
can be used as ``best available data'' for floodplain management 
purposes (FEMA NFIP training module, Unit 3 NFIP Flood Studies and 
Maps). RUS therefore concurs with the comment and will revise the rule 
text accordingly.
    Issue 8: Lead Agency Environmental Review--One commenter, ANTHC, 
suggests Sec.  1784.22 be clarified with regard to obligations under 
the National Historic Preservation Act and its regulations.
    Response: RUS agrees that Sec.  1784.22 needs to be clarified and 
corrected as it applies to Section 106 of the National Historic 
Preservation Act (NHPA) and the implementing regulation found in 36 CFR 
part 800. The Agency also acknowledges that there is not a ``RAVG 
Section 106 process'' as such, and reference to this will be deleted 
from the section text.

List of Subjects in 7 CFR Part 1780

    Agriculture, Community development, Community facilities, Reporting 
and recordkeeping requirements, Rural areas, Sewage disposal, Waste 
treatment and disposal, Water pollution control, Water supply, 
Watersheds.

    Therefore, for the reasons discussed in the preamble, RUS amends 
chapter XVII of Title 7 of the Code of Federal Regulations as follows:

PART 1780--WATER AND WASTE LOANS AND GRANTS

0
1. The authority citation for part 1780 continues to read as follows:

    Authority:  6 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005


Sec.  1780.49  [Removed and Reserved]

0
2. Remove and reserve Sec.  1780.49.

0
3. Add part 1784 to read as follows:
    September 1, 2015
    PART 1784--RURAL ALASKAN VILLAGE GRANTS
Subpart A--General Provisions
Sec.
1784.1 Purpose.
1784.2 Definitions.
1784.3 Objective.
1784.4-1784.7 [Reserved]
Subpart B--Grant Requirements
1784.8 Eligibility.
1784.9 Grant amount.
1784.10 Eligible grant purposes.
1784.11 Restrictions.
1784.12-1784.15 [Reserved]
Subpart C--Application Processing
1784.16 General.
1784.17 Application for Planning grants.
1784.18 Application for Pre-development grants.
1784.19 Application for Construction grants.
1784.20 Applications accepted from DEC or ANTHC.
1784.21 Other forms and certifications.
1784.22 Other requirements.
1784.23 Lead Agency Environmental Review.
1784.24-1784.25 [Reserved]
Subpart D--Grant Processing
1784.26 Planning, development, and procurement.
1784.27 Grant closing and disbursement of funds.
1784.28 Grantee accounting methods, management reporting, and 
audits.
1784.29 Grant servicing and accountability.
1784.30 Subsequent grants.

[[Page 52610]]

1784.31 Exception authority.
1784.32-1784.34 [Reserved]
Subpart E--Design, Procurement, Construction, and Inspection
1784.35 General.
1784.36 Procurement by applicants eligible under this part.
1784.37 Procurement of recovered materials.
1784.38-1784.99 [Reserved]

    Authority:  7 U.S.C. 1926d.

Subpart A--General Provisions


Sec.  1784.1  Purpose.

    This part sets forth the policies and procedures that will apply 
when the Rural Utilities Service (RUS) makes grants under the Rural 
Alaska Village Grant (RAVG) program (7 U.S.C. 1926d) to rural or native 
villages in Alaska. The grants will be provided directly to a rural or 
native village or jointly with either The State of Alaska, Department 
of Environmental Conservation (DEC) or The Alaska Native Tribal Health 
Consortium (ANTHC) for the benefit of rural or native villages in 
Alaska.


Sec.  1784.2  Definitions.

    The following definitions apply to subparts A through E of this 
part.
    ANTHC means the Alaska Native Tribal Health Consortium.
    CONACT means the Consolidated Farm and Rural Development Act.
    DEC means the State of Alaska, Department of Environmental 
Conservation.
    Dire sanitation conditions means:
    (1) Recurring instances of illness reasonably attributed to 
waterborne communicable disease have been documented or insufficient 
access to clean water creates a persistent threat of water-washed 
diseases; or
    (2) No community-wide water and sewer system exists and individual 
residents must haul water to or human waste from their homes and/or use 
pit privies; or
    (3) An appropriate federal agency (such as the Centers for Disease 
Control and Prevention) or regulatory Agency of the State of Alaska 
determines that the drinking water and/or sewer system does not meet 
current regulatory requirements.
    Grant recipient means an applicant that has been awarded a Rural 
Alaskan Village Grant under this part.
    IHS means the United States Department of Health and Human 
Services, Indian Health Service.
    Owner means Grant recipient.
    RAVG means Rural Alaskan Village Grant, a grant awarded by RUS, 
DEC, and/or ANTHC to a grant recipient under this part.
    Rural or Native Villages in Alaska means a rural community or 
Native village in Alaska which meets the definition of a village under 
State statutes and does not have a population in excess of 10,000 
inhabitants, according to the U.S. Census American Community Survey.
    RD means Rural Development, a federal agency mission area 
delivering the United States Department of Agriculture's programs to 
rural communities.
    Recipient community means a community that has been awarded a grant 
under this part.
    RUS means the Rural Utilities Service, a federal agency mission 
area delivering the United States Department of Agriculture's rural 
utilities programs.
    Short-lived assets means repair and replacement items expended each 
year that are not included in the annual Operational and Maintenance 
expenses as annual repair and maintenance.
    Statewide nonmetropolitan median household income (SNMHI) means the 
median household income of the State's nonmetropolitan counties and 
portions of metropolitan counties outside of cities, towns or places of 
50,000 or more population.
    USDA means the United States Department of Agriculture.
    VSW means Village Safe Water Program authorized under the Village 
Safe Water Act, Alaska Statute Title 46, Chapter 7 (AS 46.07).


Sec.  1784.3  Objective.

    The objective of the RAVG Program is to assist the residents of 
rural or native villages in Alaska to provide for the development and 
construction of water and wastewater systems to improve the health and 
sanitation conditions in those villages through removal of dire 
sanitation conditions.


Sec. Sec.  1784.4-1784.7   [Reserved]

Subpart B--Grant Requirements


Sec.  1784.8  Eligibility.

    (a) Grants may be made to the following eligible applicants:
    (1) A rural or native village in Alaska; or
    (2) DEC on behalf of one or more rural or native village in Alaska; 
or
    (3) ANTHC on behalf of one or more rural or native village in 
Alaska.
    (b) Grants made to DEC or ANTHC may be obligated through a master 
letter of conditions for more than one rural or native village in 
Alaska; however, DEC or ANTHC together with each individual rural or 
native village beneficiary shall execute a grant agreement on a project 
by project basis. Expenditures for projects will be based on specific 
scope and be requested on a project by project basis.
    (c) For grants proposed to be administered directly by a community, 
the responsibility to meet the requirements outlined in this part will 
be met by the community. RUS will be the lead agency on direct 
administration projects.
    (d) The median household income of the rural or native village 
cannot exceed 110 percent of the statewide nonmetropolitan household 
income (SNMHI), according to US Census American Community Survey. 
Alaska census communities considered to be high cost isolated areas or 
``off the road systems'' (i.e. communities that cannot be accessed by 
roads) may utilize up to 150 percent of SNMHI.
    (e) For design and construction projects: A dire sanitation 
condition as defined in Sec.  1784.2 must exist in the village served 
by the proposed project. For those projects identified under paragraphs 
(1) and (3) of the dire sanitation definition in Sec.  1784.2, a notice 
of violation, consent order or other regulatory action from the 
appropriate regulatory agency must be provided to document the dire 
sanitation condition. In cases where there is scientific evidence or 
reports with substantiated evidence of associated health issues, 
documentation may be accepted from an appropriate federal agency.
    (f) In individual cases where a proposed project does not meet the 
definition of ``Dire sanitation condition'' in Sec.  1784.2, an 
applicant may request a special review and eligibility determination 
from the RUS Administrator in cases where the applicant is able to 
satisfactorily demonstrate that a water or sewer system is deficient 
and negatively impacts the health or safety of the community. The 
decision to review an eligibility determination request and any 
determinations made subject to this paragraph are not subject to 
administrative appeal.
    (g) In order for an eligible applicant to receive a grant under the 
Rural Alaska Village Grant program, the State of Alaska shall provide 
25 percent in matching funds from non-Federal sources.
    (h) In processing grants through DEC and ANTHC, a public meeting 
must be held to inform the general public regarding the development of 
any proposed project. Documentation of the public meeting must be 
received with construction applications.
    (1) A notice of intent must be published in a newspaper of general

[[Page 52611]]

circulation in the proposed area to be served.
    (2) For projects where there are no newspapers of general 
circulation, a posting of the notice in a community building (post 
office, washeteria, clinic, etc.) frequented by village residents may 
be used to meet the requirement. This alternative form of notice has 
been authorized by the RUS Administrator.


Sec.  1784.9  Grant amount.

    Grants will be made for up to 75 percent of the project development 
and/or construction costs, which does not include project 
administrative costs. Pursuant to 7 U.S.C. 1926d, the State of Alaska 
shall provide 25 percent in matching funds from non-Federal sources.


Sec.  1784.10  Eligible grant purposes.

    Grant funds may be used for the following purposes:
    (a) To pay reasonable costs associated with providing potable water 
or waste disposal services to residents of rural or native villages in 
Alaska. Reasonable costs include construction, planning, pre-
development costs (including engineering, design, and rights-of-way 
establishment), and technical assistance as further defined below:
    (1) Planning. Grants can be made specifically for planning report 
costs (including Master Plans, Feasibility Studies, and Detection or 
Source Studies) associated with the prioritization process.
    (2) Pre-development. Grants can be made for pre-development costs 
such as preliminary engineering, environmental, application 
development, review and establishment of rights-of-way and easement, 
and full construction design for up to $1,000,000 for each eligible 
village. Prior to approving additional pre-development costs, a 
preliminary engineering report (PER) and/or approved PER like document, 
such as the Cooperative Project Agreement and supplemental documents 
from ANTHC and an environmental report shall be reviewed and concurred 
by RUS, DEC, ANTHC, and IHS.
    (3) Training and technical assistance. Grant funding for technical 
assistance and training will be available in accordance with Section 
306D of the Consolidated Farm and Rural Development Act (7 U.S.C. 
1926d) and appropriations current at the time of application. Grants 
for this purpose will be processed in accordance with 7 CFR part 1775.
    (b) To pay reasonable costs associated with the use of a recipient 
community's equipment during construction. (i.e. maintenance, minor 
repairs, and operational costs). A cost accounting system that is 
accurate to track expenses must be in place. Use of ANTHC or State of 
Alaska equipment fleet rental costs will also be eligible. RUS 
concurrence in the allocation method is required.
    (c) Individual installations. (1) Individual service installation 
relates to residential homes only and does not include public 
facilities or commercial facilities. The only exception to serving a 
public facility is when the facility is necessary for the successful 
operation and maintenance of the water or sanitation system (i.e. the 
facility utilized for accepting utility payments and/or holding public 
meetings for the utility system).
    (2) Individual home installations, including wells, septic system, 
flush tank and haul, in-house plumbing, etc., may be provided. The 
following guidelines must be followed for individual installations. A 
certification will be required with the application that provides 
documentation of the following:
    (i) The residents are unable to afford to make the improvements on 
their own.
    (ii) An agreement outlining the installation, operation, and 
maintenance of facilities must be in place.
    (iii) An adequate method for denying service in the event of non-
payment of user fees if such fees are required.
    (iv) All residents of the community are treated equally.
    (v) The improvements provided are reasonable and modest.
    (vi) Legal authority (i.e. easements) is obtained to construct 
these improvements.
    (vii) Documentation must be provided to RUS indicating the quantity 
and quality of the individual installations that may be developed; cost 
effectiveness of the individual facility compared with initial and long 
term user costs on a central system; health and pollution problems 
attributable to individual facilities; operational or management 
problems peculiar to individual installations; and permit of regulatory 
agency requirements.


Sec.  1784.11  Restrictions.

    Grant funds may not be used to:
    (a) Pay any annual recurring costs that are considered to be 
operational expenses of a facility.
    (b) Pay basic/rental fee or depreciation for the use of the 
recipient community's equipment.
    (c) Purchase existing systems.
    (d) Pay for items not associated with Rural Utilities Service's 
approved scope of work. This includes projects developed from other 
funding sources.
    (e) Except as provided in this part, finance any public or 
commercial facility.


Sec. Sec.  1784.12-1784.15  [Reserved]

Subpart C--Application Processing


Sec.  1784.16  General.

    (a) DEC and ANTHC utilize the National Indian Health Service, 
Sanitation Deficiency System (SDS) database as a comprehensive source 
of rural sanitation needs in Alaska. The database provides an inventory 
of the sanitation deficiencies including water, sewer, and solid waste 
facilities for existing homes. The sanitation deficiencies data are 
updated annually by DEC and ANTHC in consultation with the respective 
rural or native villages. The SDS system is utilized in the RAVG 
program to help prioritize applications under the Village Safe Water 
Program.
    (b) A prioritized list of projects will be developed each year by 
RUS, DEC, and ANTHC applying prioritization criteria to the sanitation 
needs database. Prioritization criteria established by the RUS, DEC, 
ANTHC, and IHS will be based, at a minimum, on relative health impacts, 
drinking water and wastewater regulatory requirements, the sanitation 
conditions in each community and project readiness. The VSW Program 
process and associated prioritization criteria will be used to 
prioritize projects and place them on a priority list. The process will 
be reviewed and approved by RUS, DEC, ANTHC, and IHS. Projects will be 
funded from the priority list as they meet established planning, 
design, and construction requirements, subject to available funding.


Sec.  1784.17  Application for Planning grants.

    (a) Entities identified in Sec.  1784.8 of this part may submit a 
completed Standard Form 424 to apply for funding to establish a 
Planning report for a rural or Native village.
    (b) Funding for planning grants will be allocated annually by RUS, 
DEC, and ANTHC according to the prioritization list described in Sec.  
1784.16(b) of this part.


Sec.  1784.18  Application for Pre-development grants.

    (a) Entities identified in Sec.  1784.8 of this part may submit a 
completed Standard Form 424, Standard Form 424A, and Standard Form 424B 
to apply for funding for pre-development costs. Pre-development costs 
are described in Sec.  1784.10 (a)(1)(iii) of this part.
    (b) Funding for pre-development grants will be allocated annually 
by

[[Page 52612]]

RUS, DEC, and ANTHC according to the prioritization list described in 
Sec.  1784.16(b) of this part.
    (c) Projects submitted for design only under the pre-development 
grant, must have RUS approval of a planning or pre-development report 
prior to consideration for funding.


Sec.  1784.19  Application for Construction grants.

    (a) An application for a construction grant shall include:
    (1) Completed Standard Form 424, Standard Form 424C and Standard 
Form 424D. Current versions of these forms may be found at Grants.gov.
    (2) Preliminary Engineering Report, Environmental Report, or 
approved PER like document, including ANTHC's Cooperative Project 
Agreement and associated supplemental attachments;
    (3) Population and median household income of the area to be 
served;
    (4) Description of the project; and
    (5) Approved business plan, including resolution adopting the plan, 
for the recipient community. The business plan will outline the 
proposed operation and management costs, rate structures, short-lived 
asset schedule and associated materials.
    (6) Projects submitted for construction must have RUS and ANTHC or 
DEC approval of a planning or pre-development report prior to 
consideration for funding.
    (b) Funding for construction grants will be allocated annually by 
RUS, DEC, and ANTHC according to the prioritization list described in 
Sec.  1784.16(b) of this part.


Sec.  1784.20  Applications accepted from DEC or ANTHC.

    (a) In cases where applications are accepted from DEC or ANTHC, one 
master application may be submitted covering all rural or native 
villages to be funded, however, each individual project will be broken 
out and (for construction grants) each will require its own PER, or 
PER-like document and Environmental Report.
    (b) Each project will be processed individually with individual 
grant agreements, as appropriate.
    (c) Expenditures for projects will be based on specific scope and 
be requested on a project by project basis.
    (d) Funding amounts, as indicated in each grant agreement and 
letter of conditions, will be for the approved scope of work.


Sec.  1784.21  Other forms and certifications.

    (a) Referenced bulletins, instructions and forms are for use in 
administering grants made under this part and are available from any 
USDA/Rural Development office or the Rural Utilities Service, U. S. 
Department of Agriculture, Washington, DC 20250-1500.
    (b) Applicants will be required to submit the following items to 
the processing office, upon notification from the processing office to 
proceed with further development of the full application:
    (1) Form RD 400-1, Equal Opportunity Agreement;
    (2) Form RD 400-4, Assurance Agreement;
    (3) Form AD 1047, Certification Regarding Debarment, Suspension and 
other Responsibility Matters;
    (4) Form AD 1048, Certification regarding Debarment, Suspension, 
Ineligibility and Voluntary Exclusion--Lower Tier Covered Transactions;
    (5) Form AD 1049, Certification regarding Drug-Free Workplace 
Requirements (Grants) Alternative I for Grantees Other Than 
Individuals;
    (6) RUS Form 266, Compliance Assurance form or written self-
certification statement--Civil Rights Compliance;
    (7) Standard Form LLL, Disclosure of Lobbying Activities;
    (8) RD Instruction 1940-Q, Exhibit A-1, Certifications for 
Contracts, Grants, and Loans (Regarding Lobbying); and
    (9) Certification regarding prohibited tying arrangements. 
Applicants that provide electric service must provide the Agency a 
certification that they will not require users of a water or waste 
facility financed under this part to accept electric service as a 
condition of receiving assistance.
    (c) In the case of grants made to DEC and ANTHC, DEC and ANTHC will 
certify that the above requirements are included in their agreements 
with the Villages. The certification and forms listed above must be 
provided from DEC and ANTHC on an annual basis for utilization in 
proposed applications.
    (d) When favorable action is not taken on an application, the 
applicant will be notified in writing by the Rural Development State 
Program Official of the reasons why the request was not favorably 
considered. Notification to the applicant will state that a review of 
this decision by the Agency may be requested by the applicant in 
accordance with 7 CFR part 11.
    (e) When favorable action is taken on an application, the applicant 
will be notified by a letter which establishes conditions that must be 
understood and agreed to before further consideration may be given to 
the application. In cases where a master application is submitted by 
DEC or ANTHC, the letter of conditions will include all projects, and 
their funding amounts, included in the master application on which 
favorable action will be taken. The letter of conditions does not 
constitute loan and/or grant approval, nor does it ensure that funds 
are or will be available for the project. The grant will be considered 
approved on the date a signed copy of Form RD 1940-1, Request for 
Obligation of Funds, is mailed to the applicant.


Sec.  1784.22  Other requirements.

    Other Federal statutes and regulations are applicable to grants 
awarded under 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) 2 CFR part 200--Uniform Guidance.
    (g) 2 CFR part 215--General Program Administrative Requirements.
    (h) 2 CFR part 418--New 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.
    (i) 2 CFR parts 400 and 415--USDA implementation of Uniform 
Administrative Requirements for Grants and Agreements with Institutions 
of Higher Education, Hospitals, and Other Nonprofit Organizations.
    (j) 2 CFR part 180, as adopted by USDA through 2 CFR 417, 
Government-wide Debarment and Suspension (Non-procurement); 2 CFR part 
182, as adopted by USDA through 2 CFR 421, Government-wide Requirements 
for Drug-Free Workplace (Federal Assistance), implementing Executive 
Order 12549 on debarment and suspension and the Drug-Free Workplace Act 
of 1988 (41 U.S.C. 701).
    (k) 2 CFR part 200, subpart F--USDA implementation of audit 
requirements for non-federal organizations.
    (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.
    (m) Floodplains. The agencies follow the eight-step decision-making 
process

[[Page 52613]]

referenced in Section 2(a) of Executive Order 11988, Floodplain 
Management, when undertaking actions located in floodplains. Pursuant 
to E. O. 11988, the IHS uses a Class Review process to exclude certain 
actions from further review under the eight-step process. For all 
actions that do not qualify for IHS Class Review, the eight-step 
process shall be completed. All practicable measures to minimize 
development in floodplains and reduce the risk to human safety, health, 
and welfare shall be followed, including elevating a new water or 
wastewater facility at least one foot above the base flood elevation as 
determined by the Army Corp of Engineers, other qualified survey, or 
best available data. Since they are considered ``critical facilities'' 
as defined by the Federal Emergency Management Agency (FEMA), water and 
wastewater facilities may be subject to more stringent standards such 
as relocation out of the floodplain, higher elevation, or other flood 
proofing measures. If an area has been designated a floodplain by FEMA 
Flood Insurance Rate Map (FIRM) coverage, flood insurance shall be 
required for facilities located in flood plains. If an area has no FEMA 
FIRM coverage the requirement to obtain flood insurance does not apply. 
If a community is located within a mapped FEMA Flood Insurance Rate Map 
(FIRM) 100-year floodplain, but is not a participating National Flood 
Insurance Program (NFIP) community member, then RUS may not fund the 
project according to 7 CFR 1806 Subpart B.
    (n) Project planning, including engineering and environmental 
reports, to the maximum extent feasible, must address all water and/or 
waste disposal needs for a community in a coordinated manner with other 
community development projects and take into consideration information 
presented in available community strategic and comprehensive plans. Any 
reports or designs completed with funds must be completed in accordance 
with sound engineering practices and USDA regulations, including RUS 
NEPA regulations at 7 CFR part 1794.


Sec.  1784.23  Lead Agency Environmental Review.

    (a) The Agency designated as the lead agency for the purposes of 
this grant program, will fulfill and agree to be responsible for 
complying with lead agency requirements for:
    (1) National Environmental Policy Act (NEPA) as outlined in 40 CFR 
1501.5, Lead agencies;
    (2) National Historic Preservation Act (NHPA) Section 106 review 
process as outlined in 36 CFR part 800.2(a)(2) Lead Federal agency; and
    (3) Section 7 of the Endangered Species Act as outlined in 50 CFR 
402.07, Designation of lead agency.
    (b) All environmental findings and determinations made by the lead 
agency represent those of the cooperating agencies and will be 
completed in accordance with the procedures outlined in this section.
    (c) RUS will, to the extent possible and in accordance with 40 CFR 
1506.2 and 7 CFR 1794.14, or successor regulation, actively participate 
with DEC, IHS, and ANTHC to cooperatively or jointly prepare 
environmental documents so that one document will comply with all 
applicable laws.
    (d) For projects administered by DEC and ANTHC, RUS agrees to 
participate as a cooperating agency in accordance with 40 CFR 1501.6 
and 7 CFR 1794.14 and relies upon those agencies' procedures for 
implementing NEPA as further described below.
    (e) The lead agency will indicate that RUS is a cooperating agency 
in all NEPA-related notices published for the proposed action.
    (f) A construction grant may not be approved until all 
environmental findings and determinations have been made according to 
the following:
    (1) Rural Development Lead Agency. If RUS is the lead agency the 
environmental review process, including all findings and 
determinations, will be completed in accordance with 7 CFR 1794.
    (2) DEC Lead Agency. In the event DEC is the lead agency, the 
environmental review process, including all findings and determinations 
will be completed in accordance with the environmental review process 
outlined in Appendix A to the June 15, 2011 MOU.
    (3) IHS Lead Agency. For projects administered by ANTHC, IHS will 
be the lead agency for the environmental review process, including all 
findings and determinations. The environmental review process, 
including all findings and determinations will be completed in 
accordance with the Department of Health and Human Services policies 
and procedures in General Administration Manual, Part 30, Council on 
Environmental Quality regulations at 40 CFR 1500-1508 and with 
procedures published by IHS in the Federal Register, Vol. 58, No.3, 
page 569, January 6, 1993. The ANTHC shall notify the funding agencies 
and the IHS if a change in the project or project scope occurs which 
could change any previously prepared environmental findings or 
determinations or could adversely impact the environment. In the event 
of an unanticipated discovery of a historic property or other 
environmental resource, the ANTHC shall stop construction activity in 
the area of the discovery and notify the appropriate authority and the 
IHS. Mitigation options resulting from unanticipated discoveries, 
including but not limited to changes in project scope or cancellation 
of the project will be evaluated by the funding agencies in 
collaboration with the ANTHC and IHS. If appropriate and necessary, 
mitigation plans will be negotiated and approved by all parties. When 
the funding agencies have approved a mitigation plan and IHS has 
reaffirmed its environmental review process, including all findings and 
determinations, the ANTHC will be authorized to initiate the agreed to 
mitigation plan. The IHS shall bear no mitigation costs as it is not a 
funding agency for projects under this part.
    (g) RUS will have an opportunity to review the IHS or DEC 
environmental review documents, including all findings and 
determinations to ensure consistency with this part and agency 
procedures. Where an Environmental Assessment (EA) or Environmental 
Impact Statement (EIS) is required by the lead agency's environmental 
policies and procedures, the lead agency will ensure that the scope and 
content of the EA or EIS satisfies the statutory and regulatory 
requirements applicable to RUS. Where an EA and EIS is not required 
under the applicable lead agency's procedures for implementing NEPA, 
the review by RUS will be limited to ensure that the applicable lead 
agency's procedures were followed.
    (h) The National Historic Preservation Act Section 106 review 
requirements completed for ANTHC administered projects will be carried 
out in accordance with the process described in Appendix B of the June 
15, 2011 MOU.


Sec. Sec.  1784.24-1784.25  [Reserved]

Subpart D--Grant Processing


Sec.  1784.26  Planning, development, and procurement.

    (a) If RUS is the lead agency and will provide oversight for the 
project, a certification should be obtained from the State agency, or 
the Environmental Protection Agency if the State does not have primacy, 
stating that the proposed improvements will be in compliance with 
requirements of the Safe Drinking Water Act and/or Clean Water Act and 
the applicable requirements of 2 CFR part 200 and 2 CFR part 400.

[[Page 52614]]

    (b) Applicants that will bid and construct a project in phases, 
must provide assurance that the full scope of each specific phase of 
the project will be functional. In the event that the actual cost is 
anticipated to exceed the funding originally allocated for the project, 
all potential options will be reviewed and considered, including but 
not limited to acquiring additional funds or a reduction in project 
scope. RUS, ANTHC, and VSW will ensure that all items that were funded 
and within the scope of the project, including all phases, are 
functional when all funds have been disbursed.


Sec.  1784.27  Grant closing and disbursement of Funds.

    (a) The Water and Waste Grant Agreement for rural and native 
villages in Alaska, or other approved form(s) will be executed by all 
applicants. To view all forms and agreements, refer to the USDA RUS 
Water and Environmental Programs Web site.
    (b) Grant funds will be distributed from the Treasury at the time 
they are actually needed by the applicant using multiple advances. 
Instructions regarding disbursement of funds can be found in the Letter 
of Conditions.
    (c) If there is a significant reduction in project costs, the 
applicant's funding needs will be reassessed. Decreases in RUS funds 
will be based on revised project costs and current number of users. 
Other factors, including RUS regulations used at the time of grant 
approval, will continue to be used as published at the time of grant 
approval. Obligated grant funds not needed to complete the proposed 
project will be deobligated. In such cases applicable forms, the letter 
of conditions, and other items will be revised.


Sec.  1784.28  Grantee accounting methods, management reporting, and 
audits.

    (a) All Agency grantees will follow the reporting requirements as 
outlined in 7 CFR 1782.
    (b) Other reporting requirements are as follows:
    (1) During the construction period, for the reporting of expenses 
incurred for projects under this part, the party responsible for the 
administration of the project will complete an audit report in 
accordance with Sec.  1782.10 (which includes GAGAS and 2 CFR part 200 
Subpart F ``Audit Requirements''). RUS may request a copy of this 
report.
    (2) After the construction period and for the life of the facility, 
the recipient community will be responsible to meet the requirements 
outlined in 2 CFR parts 200, 400, 415, 416, and 7 CFR part 1780.47 
paragraphs a through d. These requirements must be outlined in funding 
documents from RUS, ANTHC, and VSW and in agreements with the recipient 
communities. RUS may request this information for the life of the 
facility.
    (c) The requirements found in 2 CFR parts 200, 400, 415 and 416 
shall apply to all grants made under the RAVG program and shall be set 
forth in the respective grant agreement where required.


Sec.  1784.29  Grant servicing and accountability.

    (a) Grants will be serviced in accordance with 7 CFR part 1782.
    (b) RUS reserves the right to request and review project files from 
grantees at any time.
    (c) If at any time an application is determined ineligible, 7 CFR 
part 11 will be followed.


Sec.  1784.30  Subsequent grants.

    Subsequent grants will be processed in accordance with the 
requirements set forth in this part. The initial and subsequent grants 
made to complete a previously approved project must comply with the 
maximum grant requirements set forth inSec.  1784.8(f) of this part.


Sec.  1784.31  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 best interest.


Sec.  1784.32-1784.34  [Reserved]

Subpart E--Design, Procurement, Construction, and Inspection


Sec.  1784.35  General.

    This subpart is specifically designed for use by owners including 
the professional or technical consultants or agents who provide 
assistance and services such as engineering, environmental, inspection, 
financial, legal or other services related to planning, designing, 
bidding, contracting, and constructing water and waste disposal 
facilities. The selection of engineers for a project design shall be 
done by a request for proposals by the applicant. These procedures do 
not relieve the owner of the contractual obligations that arise from 
the procurement of these services. For this subpart, an owner is 
defined as the grant recipient.


Sec.  1784.36  Procurement by applicants eligible under this part

    (a) For applicants eligible under Sec.  1784.8(a)(2) and (3), 
contracting and procurement activities will follow DEC or ANTHC 
policies, procedures and methods which are based on and shall follow 
Uniform Administrative Requirements, Cost Principles, and Audit 
Requirements for Federal Awards (2 CFR part 200). In specifying 
materials, DEC and ANTHC will consider all materials normally suitable 
for the project based on sound engineering practices and project 
requirements.
    (b) Contracts for procurement must contain applicable contract 
provisions listed at Appendix II to 2 CFR part 200.
    (c) For grants proposed to be administered directly by applicants 
eligible under Sec.  1784.8(a)(1), the requirements outlined in 7 CFR 
part 1780, subpart C will be met by those eligible applicants with the 
exception of the following requirements:
    (1) Preliminary engineering reports and Environmental Reports 
(Sec.  1780.55). Refer to the requirements of this subpart and subpart 
C Sec.  1784.22(n).
    (2) Metering devices in Sec.  1780.57(m).
    (3) Utility Purchase Contracts in Sec.  1780.62.
    (4) Sewage treatment and bulk water sales contracts in Sec.  
1780.63.


Sec.  1784.37  Procurement of recovered materials.

    When a grant is made to the DEC, the state and its contractors must 
comply with section 6002 of the Solid Waste Disposal Act, as amended by 
the Resource Conservation and Recovery Act. The requirements of Section 
6002 include procuring only items designated in guidelines of the 
Environmental Protection Agency (EPA) at 40 CFR part 247 that contain 
the highest percentage of recovered materials practicable, consistent 
with maintaining a satisfactory level of competition, where the 
purchase price of the item exceeds $10,000 or the value of the quantity 
acquired during the preceding fiscal year exceeded $10,000; procuring 
solid waste management services in a manner that maximizes energy and 
resource recovery; and establishing an affirmative procurement program 
for procurement of recovered materials identified in the EPA 
guidelines.


Sec. Sec.  1784.38--1784.99  [Reserved].

    Dated: _July 28, 2015._
Brandon McBride,
Administrator, Rural Utilities Service.
[FR Doc. 2015-21122 Filed 8-31-15; 8:45 am]
BILLING CODE P