[Federal Register Volume 82, Number 7 (Wednesday, January 11, 2017)]
[Rules and Regulations]
[Pages 3131-3137]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00116]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 82, No. 7 / Wednesday, January 11, 2017 /
Rules and Regulations
[[Page 3131]]
DEPARTMENT OF COMMERCE
Economic Development Administration
13 CFR Part 312
[Docket No.: 160615526-6999-02]
RIN 0610-AA68
Regional Innovation Program
AGENCY: Economic Development Administration, U.S. Department of
Commerce.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Economic Development Administration (``EDA'' or ``the
Agency''), U.S. Department of Commerce (``DOC''), is issuing a Final
Rule implementing the Regional Innovation Program as authorized by
section 27 of the Stevenson-Wydler Technology Innovation Act of 1980,
as amended (``Stevenson-Wydler'' or the ``Act''). Through the Regional
Innovation Strategies Program (``RIS Program''), the centerpiece of the
Regional Innovation Program, EDA currently awards grants for capacity-
building programs that provide proof-of-concept and commercialization
assistance to innovators and entrepreneurs and for operational support
for organizations that provide essential early-stage funding to startup
companies. This Final Rule lays out the overarching regulatory
framework for the Regional Innovation Program and specifically focuses
on outlining the structure of the RIS Program.
On September 21, 2016, EDA published a Notice of Proposed
Rulemaking (``NPRM'') and received two public comments, one non-germane
and one substantive. The Final Rule responds to the substantive comment
by making two clarifying edits and one conforming edit to the section
regarding eligible RIS Program project activities. EDA also made one
technical correction, unrelated to the substantive comment, to the
general terms and conditions section relating to the RIS Program.
DATES: This Final Rule becomes effective on February 10, 2017.
ADDRESSES: EDA posted both public comments on the Federal Rulemaking
Portal, www.regulations.gov, without change.
FOR FURTHER INFORMATION CONTACT: Mara Quintero Campbell, Regional
Counsel, Office of the Chief Counsel, Economic Development
Administration, U.S. Department of Commerce, 1401 Constitution Avenue
NW., Suite 72023, Washington, DC 20230; telephone: (202) 482-9055.
SUPPLEMENTARY INFORMATION:
Background on Regional Innovation Program
History
In recent years, concerns about America's global competitiveness
led to calls for the Federal Government to more actively foster
innovation and better coordinate Federal support for scientific and
technological research and development, technology transfer, and
commercialization. In particular, without Federal support, local
communities struggled to effectively support the development of
regional innovation clusters (defined below), which research has shown
to be a significant catalyst of economic development. At the same time,
regional innovation was hampered by limited access to the capital
necessary to implement the innovative manufacturing technologies
required to compete in the twenty-first century global economy.
In response to these concerns and with a desire to maintain
America's role as a leader in innovation, Congress enacted section 27
of Stevenson-Wydler (``section 27'' or ``Regional Innovation Program'')
as part of the America Creating Opportunities to Meaningfully Promote
Excellence in Technology, Education, and Science Reauthorization Act of
2010, Public Law 111-358 (Jan. 4, 2011) (``COMPETES Act''). As
originally enacted by Congress, section 27 authorized the Secretary of
Commerce (``Secretary'') to ``establish a regional innovation program
to encourage and support the development of regional innovation
strategies, including regional innovation clusters and science and
research parks.'' In 2014, Congress enacted legislation that narrowed
the scope of the Regional Innovation Program. See Public Law 113-235
(Dec. 16, 2014). This legislative change is discussed more fully below.
The Regional Innovation Program now encompasses two complementary sub-
programs: The Regional Innovation Strategies Program (``RIS Program'')
set forth in section 27(b) of the Act, and the Regional Innovation
Research and Information Program (``RIRI Program'') set forth in
section 27(c) of the Act.
Given EDA's leadership in and support of innovation and
entrepreneurship as key elements of a robust economy, the Secretary
turned to EDA to develop and implement the Regional Innovation Program.
Established under the Public Works and Economic Development Act of
1965, as amended (42 U.S.C. 3121 et seq.) (``PWEDA''), EDA leads the
Federal economic development agenda by promoting innovation and
competitiveness, preparing American regions for growth and success in
the worldwide economy. EDA makes investments to facilitate job creation
for U.S. workers, increase private-sector investment, promote American
innovation, and accelerate long-term sustainable economic growth. EDA's
regulations, codified at 13 CFR parts 300 through 315, provide the
framework through which the Agency administers its economic development
assistance programs.
Structure
Through the RIS Program (section 27(b) of Stevenson-Wydler), the
core of the Regional Innovation Program, EDA competitively awards
grants to eligible applicants for activities related to the formation
and development of regional innovation clusters. 15 U.S.C. 3722(b).
Stevenson-Wydler defines a regional innovation cluster as ``a
geographically bounded network of similar, synergistic, or
complementary entities that--(A) are engaged in or with a particular
industry sector and its related sectors; (B) have active channels for
business transactions and communication; (C) share specialized
infrastructure, labor markets, and services; and (D) leverage the
region's unique competitive strengths to stimulate innovation and
create jobs.'' 15 U.S.C. 3722(f)(1).
[[Page 3132]]
The RIRI Program (section 27(c) of Stevenson-Wydler) is designed to
formulate and disseminate best practices for regional innovation
strategies, provide technical assistance for the development and
implementation of regional innovation strategies, support the
development of metrics to evaluate regional innovation strategies,
collect and publicize data on regional innovation cluster activity in
the United States, and fund competitive research grants to support the
goals of the RIRI Program.
This Final Rule (hereafter ``Rule'') focuses on the RIS Program
because EDA has not yet implemented the RIRI Program. However, these
regulations--and, in particular, the definition sections--are
structured to incorporate the RIRI Program into a future subpart C of
part 312 of title 13 of the Code of Federal Regulations once EDA
implements the RIRI Program.
EDA's economic development assistance programs under PWEDA and the
RIS Program seek to increase economic growth and resilience, enhance
prosperity, and improve quality of life, but they approach the goal
from different angles, as reflected in the enabling statutes and
regulations. For example, the focus of PWEDA's core programs is
increasing employment and private investment in economically distressed
regions. Funding generally is limited to regions that meet chronic high
unemployment or low per capita income criteria, and grant rates
increase with the level of economic distress up to a maximum of 100
percent in limited circumstances. Conversely, the RIS Program focuses
on encouraging scientific and technological innovation and
collaboration; it thus provides funding to a broader range of entities
and does not require applicants to demonstrate economic distress.
Moreover, it also is capped at a 50 percent grant rate.
In addition to awarding grants under the RIS and RIRI Programs, EDA
anticipates conducting at a future date COMPETES Act prize competitions
that support the goals and objectives of the Regional Innovation
Program. See 15 U.S.C. 3719.
Implementation
EDA publicly launched the RIS Program in September 2014 when it
announced the first round of competitions for funding under the
Program. The announcement of a Federal Funding Opportunity (``FFO'')
identified three separate competitions for a total of $15 million in
Federal funding: The i6 Challenge, Science and Research Park
Development Grants, and Seed Fund Support (``SFS'') Grants (formerly
known as Cluster Grants for Seed Capital Funds). The i6 Challenge,
first launched in 2010 as part of the multi-agency Startup America
Initiative, is designed to support the creation of programs for
innovation and entrepreneurship--specifically, the development,
creation, or expansion of proof-of-concept and commercialization
programs that increase the development of innovations, ideas,
intellectual property, and research into viable companies. Science and
Research Park Development Grants supported feasibility and planning
studies to create innovation hubs for driving the results of applied
research and development to the commercial marketplace by supporting
the entire product or process lifecycle from idea generation to
business creation. SFS Grants support activities related to the
feasibility, planning, formation, launch, or expansion of cluster-based
seed capital funds to assist innovation-based startups with high growth
potential. After considering 241 applications, in early 2015, EDA
awarded 17 i6 Grants, 12 Science and Research Park Development Grants,
and 9 SFS Grants to applicants throughout EDA's six regions.
In 2014, Congress amended the Regional Innovation Program in
section 705 of the Revitalize American Manufacturing and Innovation Act
of 2014, Public Law 113-235 (Dec. 16, 2014) (``RAMI''). Under RAMI,
Congress eliminated the provisions authorizing Science and Research
Park Development Grants and Loan Guarantees for Science Park
Infrastructure but did maintain eligibility for such parks to apply for
RIS Program awards. Accordingly, when EDA announced a second round of
RIS Program competitions in August 2015, it included $10 million in
Federal funding for i6 Challenge Grants and SFS Grants, and no longer
had a separate Science and Research Park Development Grant competition.
In addition, consistent with changes made by Congress in RAMI to
section 27(b)(7) of the Act, EDA implemented a targeted outreach
program to ensure that public and private sector entities in rural
communities were aware of the opportunity. After considering 168
applications for funding, EDA awarded 17 i6 Grants and 8 SFS Grants in
early 2016.
A third round of competitions for $15 million in funding for i6
Challenge Grants and SFS Grants was completed in November 2016. After
considering 215 applications for funding, EDA awarded 27 i6 Grants and
8 SFS Grants.
With EDA's RIS Program funding, successful applicants have
undertaken transformative projects such as the development of a
hardware entrepreneurship ecosystem, expansion of a seed capital fund
focused on commercializing water technology, and investigation of the
feasibility of constructing a test track for connected and autonomous
vehicles. Grant recipients are required to provide semi-annual reports,
using EDA-developed metrics that are consistent across grantees, that
EDA uses to evaluate the impact of the RIS Program.
Administration
Administration and management of the Regional Innovation Program is
an EDA-wide responsibility. The Regional Innovation Program (including
the RIS Program) is broadly overseen by the Office of Innovation and
Entrepreneurship (``OIE''), which was established by the Secretary
pursuant to section 25 of the Act. 15 U.S.C. 3720. Housed within EDA,
OIE works to foster a more innovative U.S. economy focused on turning
new ideas and inventions into products and technologies that spur job
growth and competitiveness while promoting economic development through
innovation and entrepreneurship. In addition, EDA's Deputy Assistant
Secretary for Regional Affairs has served as the Grants Officer for RIS
Program awards, with day-to-day administration of these awards being
handled by the Agency's regional offices.
The Final Rule
Because of the significant differences in EDA's authority under
PWEDA and Stevenson-Wydler, there is a need for a standalone regulatory
framework for the Regional Innovation Program. This Rule creates such a
framework. From the outset, the Rule makes it clear that the Regional
Innovation Program is made up of two sub-programs, the RIS and RIRI
Programs, administered by EDA. While focusing on the RIS Program given
that EDA has not yet implemented the RIRI Program, the Rule is designed
to accommodate future implementation of the RIRI Program by defining
terms applicable to the RIRI Program and reserving a subpart for future
implementing regulations.
The Rule establishes definitions applicable to the Regional
Innovation Program generally and a set of terms specific to the RIS
Program. In addition, the Rule describes the purpose and scope of the
RIS Program and delineates the eligible recipients, eligible program
activities, investment rate, matching share, application components,
[[Page 3133]]
application evaluation and selection criteria, and general terms and
conditions applicable to the RIS Program.
Public Comments and Summary of Changes to Final Rule
On September 21, 2016 EDA published an NPRM in the Federal Register
(81 FR 64805) requesting public comments on EDA's proposed regulations
for the Regional Innovation Program. The public comment period closed
on November 21, 2016. EDA received two public comments in response to
the NPRM. One comment was non-germane. The other, from a nonprofit
organization, was generally supportive of the Rule while raising five
specific issues, which are addressed below. EDA is also making one
technical correction to Section 312.12, unrelated to the substantive
comment, that is discussed in more detail below.
Issue One: Eligible Project Activities for the RIS Program
The commenter advocates for removing several items from the list of
``Eligible project activities'' under Section 312.7--namely, the
purchase of equipment (312.7(a)(9) of the NPRM), construction
(312.7(a)(10) of the NPRM), and other activities approved by the
Assistant Secretary (312.7(a)(11) of the NPRM). It suggests eliminating
equipment and construction funding to avoid compromising the core value
and unique nature of the RIS Program, or, in the alternative, it
recommends permitting the purchase of equipment with matching share but
not Federal funds. It similarly expresses concern that Section
312.7(a)(11) ``could be used to expand the program beyond the
legislation's intent.''
While EDA disagrees with the commenter's position that these
activities should be ineligible, EDA does acknowledge that some
clarification of eligible activities will be helpful in overcoming any
misperceptions that these regulations somehow dilute the essence of the
RIS Program or conflict with Congressional intent. In response to the
comment on equipment and construction, EDA is combining Sections
312.7(a)(9) and (10) into a new Section 312.7(a)(9) to make clear that
construction activities may be funded only as ancillary activities
necessary to permit the installation of equipment. The Rule further
removes ambiguity by expressly providing in new Section 312.7(a)(9)
that the purchase of equipment and its installation are allowable only
if necessary to support another eligible activity. Accordingly,
projects involving only the purchase and/or installation of equipment
will not be funded, keeping the core purposes of the RIS Program
intact. EDA is also modifying a cross-reference in Section 312.7(b)(3),
part of the list of ineligible activities, to account for the
consolidation of these sections.
Likewise, EDA is adding language to new Section 312.7(a)(10)
(312.7(a)(11) in the NPRM) to address the commenter's concern that this
provision has the potential to extend the RIS Program beyond what
Congress intended. Stevenson-Wydler clearly affords the Assistant
Secretary (through delegation from the Secretary) broad discretion to
add to the inventory of activities already authorized by the statute by
stating that ``[g]rants awarded under this subsection may be used for
activities determined appropriate by the Secretary'' and then
identifying a non-exhaustive list of some permissible activities. See
15 U.S.C. 3722(b)(2). However, EDA recognizes that the Assistant
Secretary's discretion is appropriately limited by the statutorily
established purpose of the RIS Program (``to encourage and support the
development of regional innovation strategies, including regional
innovation clusters'', see 15 U.S.C. 3722(a)). To emphasize this point,
EDA is modifying new Section 312.7(a)(10) by adding the phrase
``consistent with section 27(b) of Stevenson-Wydler'' to the end of the
paragraph.
Issue Two: Use of RIS Program Funds for Equity Investments
Referencing the NPRM preamble, the commenter agrees with EDA's
position that Stevenson-Wydler does not permit the use of RIS Program
funds or matching share for equity investments. However, the commenter
takes issue with EDA's statement that early-stage companies can access
other relevant Federal sources of investment capital, arguing that a
Federally-funded seed fund program does not exist but is needed and
would increase innovation and entrepreneurial activity.
While EDA appreciates the commenter's advocacy for Federal programs
that would directly provide investment capital, the commenter's
argument does not implicate the regulatory provision itself. For this
reason, as well as the commenter's acknowledgment that the provision is
consistent with Stevenson-Wydler, no change is being made in this Rule
regarding the prohibition on the use of RIS Program funds for equity
investments.
Issue Three: Application Components
The commenter also conveys its views on two aspects of Section
312.10. First, it suggests that the application components outlined in
Section 312.10 ``will help ensure applicants apply a broad strategic
framework to their cluster activities'' but nevertheless should not be
scoring criteria for the RIS Program. Second, the commenter states that
the nature of the workforce information requested in Section 312.10(e)
is unclear and recommends replacing EDA's proposed Section 312.10(e)
with ``the extent to which the regional innovation cluster is likely to
improve the training or employment opportunities of the regional
workforce''.
Regarding the commenter's first suggestion on scoring, section
27(b) of Stevenson-Wydler contains a list of required application
components for the RIS Program and Section 312.10 simply mirrors this
statutory scheme. See 15 U.S.C. 3722(b)(4)(B). As a result, all RIS
Program applications must as a threshold matter address these required
components to be complete. As the commenter itself implies, the
components are not merely ``technical'' requirements but are instead
clearly substantive, merits-based elements that are intended to be part
of EDA's evaluation of the applicant's competitiveness relative to
other applicants.
The commenter's second suggested modification is unduly narrow,
focusing this selection factor exclusively on how the regional
innovation cluster will improve workforce training or employment
opportunities while overlooking the statute's explicitly broad and
potentially multi-dimensional emphasis on the capacity of cluster
participants to access or contribute to a well-trained workforce. Put
another way, Section 312.10(e) parallels the statutory language,
providing unambiguous flexibility to the applicant to demonstrate the
extent and nature of the project's connection to and support of a well-
trained workforce, of which training and employment opportunities may
be a part. See 15 U.S.C. 3722(b)(4)(B)(iv).
In light of the above, the Rule leaves Section 312.10 unchanged
from the NPRM.
Issue Four: Administration and Management of RIS Program Awards
The commenter also suggests that stronger national-level
coordination of the RIS Program could provide greater value in terms of
increased opportunities ``to share best practices in seed fund and
cluster development across awardees and the innovation community as a
whole.''
[[Page 3134]]
EDA has no plans at this time to significantly change how it
administers and manages the Regional Innovation Program. Although the
Agency comprises a Washington, DC headquarters (``HQ'') office and six
regional offices, there is a unified EDA that leverages the strengths
and skills of all of its geographically-dispersed staff. As explained
above, the Regional Innovation Program is managed and overseen by OIE,
based out of HQ. The day-to-day administration of RIS Program grants is
handled by the regional offices, in close coordination with OIE. This
integrated approach effectively balances resource allocation with
program execution by providing a coordinated and responsive national
agenda. At the same time, this puts grant administration in the hands
of those who are the Agency's day-to-day grants experts and offers the
program's diverse stakeholders valuable points of contact in the field.
No change is being made to the regulations, as proposed, in response to
the commenter's recommendation.
Issue Five: Prize Competitions
Finally, the commenter seeks additional clarity on the Agency's
statement in the NPRM's preamble that EDA may in the future conduct
prize competitions that support the goals and objectives of the
Regional Innovation Program. The commenter notes that it strongly
believes that the current scale and structure of the RIS Program awards
is integral to the value of the program and should not change ``unless
the program scales toward its original conception as a $100 million
program.'' The commenter can, however, foresee a positive role for
prize competitions if the Agency were to use remaining portions of the
fiscal year's available funding on smaller projects that support
regional innovation clusters.
EDA agrees with the commenter that the RIS Program is primarily a
grant-making initiative. To allay any concerns, the Agency reiterates
that it does not anticipate making any immediate and significant
changes to the program's current funding model. The Agency, however, is
exploring the use of prize competitions at some point as a
complementary tool to respond to evolving regional innovation cluster
needs and support the overall objectives of the Regional Innovation
Program, particularly as it works to develop the RIRI Program. No
change to the proposed regulations is necessitated by this issue raised
by the commenter.
Additional Change Made to Final Rule
Unrelated to the substantive comment received, EDA is making one
technical correction in this Rule. In Section 312.12, EDA is adding 13
CFR 302.17, dealing with conflicts of interest, to the list of PWEDA
general terms and conditions that do not apply to the RIS Program. The
conflict of interest provision contained in 13 CFR 302.17 is specific
to the requirements of PWEDA and thus is inapplicable to the RIS
Program, which is instead based on the statutory requirements of
Stevenson-Wydler.
Classification
Prior notice and opportunity for public comment are not required
for rules concerning public property, loans, grants, benefits, and
contracts. 5 U.S.C. 553(a)(2). Because prior notice and an opportunity
for public comment are not required 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. Therefore, a regulatory
flexibility analysis has not been prepared.
Executive Orders No. 12866 and 13563
This Rule was drafted in accordance with Executive Orders 12866 and
13563. It was reviewed by the Office of Management and Budget
(``OMB''), which found that the Rule will be a ``significant regulatory
action'' as defined by Executive Orders 12866 and 13563.
Congressional Review Act
This Rule is not major under the Congressional Review Act (5 U.S.C.
801 et seq.).
Executive Order No. 13132
Executive Order 13132 requires agencies to develop an accountable
process to ensure ``meaningful and timely input by State and local
officials in the development of regulatory policies that have
federalism implications.'' ``Policies that have federalism
implications'' is defined in Executive Order 13132 to include
regulations that have ``substantial direct effects on the 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.'' It has been determined that this Rule does not contain
policies that have federalism implications.
Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.)
(``PRA'') requires that a Federal agency consider the impact of
paperwork and other information collection burdens imposed on the
public and, under the provisions of PRA section 3507(d), obtain
approval from OMB for each collection of information it conducts,
sponsors, or requires through regulations. Notwithstanding any other
provision of law, no person is required to respond to, nor shall any
person be subject to a penalty for failure to comply with, a collection
of information subject to the PRA unless that collection displays a
currently valid OMB Control Number. The Rule does not include a new
information collection requirement and will, thus, use the previously
approved Standard Form 424 family of forms to collect information
relevant to the grant applications.
The following table provides a complete list of the collections of
information (and corresponding OMB Control Numbers) set forth in this
Rule. These collections of information are necessary for the proper
performance and functions of EDA.
------------------------------------------------------------------------
Part or section of this Form/title/OMB
rule Nature of request control No.
------------------------------------------------------------------------
312.10..................... All Eligible Applicants SF-424 (4040-
must submit required 0004), SF-424A
application materials (4040-0006), SF-
using the Standard 424B (4040-0007).
Form 424 family of
forms.
------------------------------------------------------------------------
List of Subjects in 13 CFR Part 312
Application requirements, Cluster grants, Financial assistance,
Regional innovation, Regional innovation clusters, Regional Innovation
Program, Regional Innovation Research and Information Program, Regional
Innovation Strategies Program, Research.
Regulatory Text
For the reasons set forth in the preamble, EDA amends title 13,
chapter III of the Code of Federal Regulations by adding part 312 to
read as follows:
[[Page 3135]]
PART 312--REGIONAL INNOVATION PROGRAM
Subpart A--General Provisions
Sec.
312.1 Purpose and scope of the Regional Innovation Program.
312.2 General definitions from Public Works and Economic Development
Act regulations inapplicable to this part.
312.3 General definitions.
Subpart B--Regional Innovation Strategies Program
312.4 Purpose and scope of the Regional Innovation Strategies
Program.
312.5 Regional Innovation Strategies Program definitions.
312.6 Eligible recipients.
312.7 Eligible project activities.
312.8 Investment rates.
312.9 Matching share requirements.
312.10 Application components.
312.11 Application evaluation and selection criteria.
312.12 General terms and conditions for investment assistance.
Subpart C--Regional Innovation Research and Information Program
[Reserved]
312.13-312.17 [Reserved]
Authority: 15 U.S.C. 3701 et seq.; Department of Commerce
Organization Order 10-4.
Subpart A--General Provisions
Sec. 312.1 Purpose and scope of the Regional Innovation Program.
The purpose of the Regional Innovation Program is to encourage and
support the development of regional innovation strategies. The Regional
Innovation Program includes two sub-programs. One is focused on the
formation and development of regional innovation clusters and
implemented through the Regional Innovation Strategies Program. 15
U.S.C. 3722(b). The second program is focused on best practices,
metrics and the collection and dissemination of information related to
regional innovation strategies, achieved through the Regional
Innovation Research and Information Program. 15 U.S.C. 3722(c). The
Secretary has delegated to the Economic Development Administration the
authority to implement and administer the Regional Innovation Program.
Sec. 312.2 General definitions from Public Works and Economic
Development Act regulations inapplicable to this part.
The definitions contained in Sec. 300.3 of this chapter do not
apply to this part.
Sec. 312.3 General definitions.
As used in this part, the following terms shall have the following
meanings:
Act or Stevenson-Wydler means the Stevenson-Wydler Technology
Innovation Act of 1980, as amended (15 U.S.C. 3701 et seq.).
Assistant Secretary means the Assistant Secretary of Commerce for
Economic Development within the Department.
Department of Commerce, Department, or DOC means the U.S.
Department of Commerce.
Economic Development Organization means an organization whose
primary purpose is to support the economic development of a community
or region.
EDA means the Economic Development Administration within the
Department.
Eligible applicant means an entity qualified to be an eligible
recipient or its authorized representative.
Eligible recipient means a recipient that meets the requirements of
Sec. 312.6.
Equipment is defined at 2 CFR 200.33.
Federal agency means any executive agency as defined in 5 U.S.C.
105, and the military departments as defined in 5 U.S.C. 102, as well
as any agency of the legislative branch of the Federal Government.
Federal funding opportunity or FFO means an announcement that EDA
publishes during the fiscal year on a Federal Government grants
platform or on EDA's Internet Web site at http://www.eda.gov, https://www.eda.gov/oie/, or any successor Web site, that provides the funding
amounts, application and programmatic requirements, funding priorities,
special circumstances, and other information concerning a specific
competitive solicitation under EDA's Regional Innovation Program.
Federal interest is defined at 2 CFR 200.41, in accordance with 2
CFR 200.316.
Federal laboratory means any laboratory, any federally funded
research and development center, or any center established under
section 7 or section 9 of the Act that is owned, leased, or otherwise
used by a Federal agency and funded by the Federal Government, whether
operated by the government or by a contractor.
Grant means the financial assistance award of EDA funds to an
eligible recipient, under which the Eligible Recipient bears
responsibility for meeting a purpose or carrying out an activity
authorized under Stevenson-Wydler. See 31 U.S.C. 6304.
In-kind contribution(s) means non-cash contributions, which may
include contributions of space, Equipment, services, and assumptions of
debt that are fairly evaluated by EDA and that satisfy applicable
Federal Uniform Administrative Requirements and Cost Principles as set
out in 2 CFR part 200.
Indian tribe means an entity on the list of recognized tribes
published pursuant to the Federally Recognized Indian Tribe List Act of
1994, as amended (Pub. L. 103-454) (25 U.S.C. 479a et seq.), and any
Alaska Native Village or Regional Corporation (as defined in or
established under the Alaska Native Claims Settlement Act (43 U.S.C.
1601 et seq.)). This term includes the governing body of an Indian
tribe, nonprofit Indian corporation (restricted to Indians), Indian
authority, or other nonprofit Indian tribal organization or entity;
provided that the Indian tribal organization or entity is wholly owned
by, and established for the benefit of, the Indian tribe or Alaska
Native village.
Investment or Investment assistance means a grant entered into by
EDA and a recipient.
Investment rate means, as set forth in Sec. 312.8, the amount of
the EDA investment in a particular project expressed as a percentage of
the total project cost.
Matching share or Local share means the non-EDA funds and any in-
kind contribution(s) that are approved by EDA and provided by a
recipient or third party as a condition of an investment. The matching
share may include funds from another Federal agency only if authorized
by a statute that allows such use, which may be determined by EDA's
reasonable interpretation of such authority.
Nonprofit organization is defined at 2 CFR 200.70.
Office of Innovation and Entrepreneurship or OIE means the office
established by 15 U.S.C. 3720.
Project means the proposed or authorized activity (or activities),
the purpose of which fulfills EDA's mission and program requirements as
set forth in the Act and this part, and which may be funded in whole or
in part by EDA investment assistance.
Public-private partnership means a relationship formalized by
contractual agreement between a public agency and a private-sector
entity that reasonably defines the terms of collaboration in the
delivery and financing of a public project.
Real property means any land, whether raw or improved, and includes
structures, fixtures, appurtenances, and other permanent improvements,
excluding moveable machinery and equipment.
Recipient means an entity receiving EDA investment assistance,
including any successor to the entity approved by EDA in writing. If
investment assistance is awarded to more than one recipient under a
single award, the recipients are referred to as ``co-recipients'' and,
[[Page 3136]]
unless otherwise provided in the terms and conditions of the investment
assistance, each co-recipient is jointly and severally liable for
fulfilling the terms of the investment assistance.
Region or Regional means an economic unit of human, natural,
technological, capital, or other resources, defined geographically.
Geographic areas comprising a region need not be contiguous or defined
by political boundaries, but should constitute a cohesive area capable
of undertaking self-sustained economic development.
Regional innovation clusters or RICs means a geographically bounded
network of similar, synergistic, or complementary entities that are
engaged in or with a particular industry sector and its related
sectors; have active channels for business transactions and
communication; share specialized infrastructure, labor markets, and
services; and leverage the region's unique competitive strengths to
stimulate innovation and create jobs.
Regional Innovation Program means the program enacted by Stevenson-
Wydler at 15 U.S.C. 3722.
Regional Innovation Research and Information Program or RIRI
Program means the program authorized by 15 U.S.C. 3722(c).
Regional Innovation Strategies Program or RIS Program means the
cluster grant program authorized by 15 U.S.C. 3722(b).
Science or research park means a property-based venture that has:
Master-planned property and buildings designed primarily for private-
public research and development activities, high technology and
science-based companies, and research and development support services;
a contractual or operational relationship with one or more science- or
research-related institutions of higher education or governmental or
nonprofit research laboratories; a primary mission to promote research
and development through industry partnerships, assisting in the growth
of new ventures and promoting innovation-driven economic development; a
role in facilitating the transfer of technology and business skills
between researchers and industry teams; and a role in promoting
technology-led economic development for the community or region in
which the park is located.
Secretary means the Secretary of Commerce.
State means a State of the United States, the District of Columbia,
the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam,
American Samoa, the Commonwealth of the Northern Mariana Islands, or
any other territory or possession of the United States.
United States means all of the States.
Subpart B--Regional Innovation Strategies Program
Sec. 312.4 Purpose and scope of the Regional Innovation Strategies
Program.
Under the RIS Program, EDA makes grants on a competitive basis to
eligible applicants to foster connected, innovation-centric economic
regions that support commercialization and entrepreneurship. The grants
are intended to build public and private capacity to invent and improve
products and services and to bring those products and services to
market through a process often referred to as technology
commercialization, as demonstrated by methodologically sound metrics
for output and outcome.
Sec. 312.5 Regional Innovation Strategies Program definitions.
In addition to the defined terms set forth in subpart A of this
part, the following term applies specifically to the RIS Program:
Institution of higher education means:
(1) An educational institution in any State that--
(i) Admits as regular students only persons having a certificate of
graduation from a school providing secondary education, or the
recognized equivalent of such a certificate, or persons who meet the
requirements of 20 U.S.C. 1091(d);
(ii) Is legally authorized within such State to provide a program
of education beyond secondary education;
(iii) Provides an educational program for which the institution
awards a bachelor's degree or provides not less than a 2-year program
that is acceptable for full credit toward such a degree, or awards a
degree that is acceptable for admission to a graduate or professional
degree program, subject to review and approval by the Secretary of
Education; and
(iv) Is accredited by a nationally recognized accrediting agency or
association, or if not so accredited, is an institution that has been
granted preaccreditation status by such an agency or association that
has been recognized by the Secretary of Education for the granting of
preaccreditation status, and the Secretary of Education has determined
that there is satisfactory assurance that the institution will meet the
accreditation standards of such an agency or association within a
reasonable time.
(2) Additional institutions included. For purposes of this subpart,
the term Institution of higher education also includes--
(i) Any school that provides not less than a 1-year program of
training to prepare students for gainful employment in a recognized
occupation and that meets the provisions of paragraphs (1)(i), (ii),
and (iv) of this definition; and
(ii) An educational institution in any State that, in lieu of the
requirement in paragraph (1)(i) of this definition, admits as regular
students individuals--
(A) Who are beyond the age of compulsory school attendance in the
State in which the institution is located; or
(B) Who will be dually or concurrently enrolled in the institution
and a secondary school.
Sec. 312.6 Eligible recipients.
A recipient eligible for investment assistance includes:
(a) A State;
(b) An Indian tribe;
(c) A city or other political subdivision of a State;
(d) An entity that is a nonprofit organization and whose
application for funding under the RIS Program is supported by a State
or a political subdivision of a State;
(e) An entity that is an institution of higher education, a public-
private partnership, a science or research park, a Federal laboratory,
or an economic development organization or similar entity, and whose
application for funding under the RIS Program is supported by a State
or a political subdivision of a State; or
(f) A consortium of any of the entities described in paragraphs (a)
through (e) of this section.
Sec. 312.7 Eligible project activities.
(a) Activities eligible for a RIS Program grant include:
(1) Feasibility studies;
(2) Planning activities;
(3) Technical assistance;
(4) Developing or strengthening communication and collaboration
between and among participants of a regional innovation cluster;
(5) Attracting additional participants to a regional innovation
cluster;
(6) Facilitating market development of products and services of a
regional innovation cluster, including through demonstration,
deployment, technology transfer, and commercialization activities;
(7) Developing relationships between a regional innovation cluster
and entities or clusters in other regions;
(8) Interacting with the public and State and local governments to
meet the goals of the regional innovation cluster;
[[Page 3137]]
(9) Purchase of equipment and equipment-related modifications or
renovations of a facility, but only to the extent that such equipment
and any related modifications or renovations are used to support
another eligible activity as described in this section (the recipient
may be required to secure and record the Federal interest in the
equipment); and
(10) Any other activity determined appropriate by the Assistant
Secretary and consistent with section 27(b) of Stevenson-Wydler.
(b) An ineligible activity includes, but is not limited to:
(1) Use of Federal funds or matching share for equity investments;
(2) Acquisition or improvement of real property;
(3) Construction except to the extent provided in paragraph (a)(9)
of this section; and
(4) Lending programs, such as a direct loan program or capitalizing
a revolving loan fund.
Sec. 312.8 Investment rates.
(a) Minimum investment rate. There is no minimum investment rate
for a project.
(b) Maximum investment rate. The maximum investment rate for a
project shall not exceed 50 percent.
Sec. 312.9 Matching share requirements.
The required matching share of a project's eligible costs may
consist of cash or in-kind contribution(s) whose value can be readily
determined, verified, and justified. Applicants must show at the time
of application that the matching share is committed to the project,
will be available as needed, and is not or will not be conditioned or
encumbered in any way that would preclude its use consistent with the
requirements of the investment assistance. EDA shall determine at its
sole discretion whether the matching share documentation adequately
addresses the requirements of this section.
Sec. 312.10 Application components.
In addition to the criteria set forth in the FFO, to be considered
for a RIS Program grant, eligible applicants must provide the following
information:
(a) A description of the regional innovation cluster supported by
the proposed activity;
(b) The extent to which the regional innovation cluster is
supported by the private sector, State and local units of government,
and other relevant stakeholders;
(c) The methods that participants in the regional innovation
cluster will use to encourage and solicit participation by all types of
entities that might benefit from participation, including newly formed
entities and rival existing participants;
(d) The extent to which the regional innovation cluster is likely
to stimulate innovation and have a positive effect on regional economic
growth and development;
(e) The capacity of participants in the regional innovation cluster
to access, or contribute to, a well-trained workforce;
(f) The ability of participants in the regional innovation cluster
to attract additional funds to support the cluster with non-Federal
funds; and
(g) The likelihood that participants in the regional innovation
cluster will be able to sustain activities after the grant expires.
Sec. 312.11 Application evaluation and selection criteria.
(a) EDA will evaluate and select complete applications in
accordance with the evaluation criteria, funding priority
considerations, availability of funding, competitiveness of the
application, and requirements set forth in section 27(b) of Stevenson-
Wydler, the FFO, and other applicable Federal statutes and regulations.
All awards are subject to the availability of funds.
(b) EDA will endeavor to notify applicants as soon as practicable
regarding whether their applications are selected for funding.
(c) Stevenson-Wydler does not require nor does EDA provide an
appeal process for denial of applications for EDA investment
assistance.
Sec. 312.12 General terms and conditions for investment assistance.
RIS Program grants are subject to all requirements contained in
part 302 of this chapter, except Sec. Sec. 302.2, 302.3, 302.9,
302.10, and 302.17.
Subpart C--Regional Innovation Research and Information Program
[Reserved]
Sec. Sec. 312.13-312.17 [Reserved]
Dated: January 3, 2017.
Roy K.J. Williams,
Assistant Secretary for Economic Development.
[FR Doc. 2017-00116 Filed 1-10-17; 8:45 am]
BILLING CODE 3510-24-P