[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]



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  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,

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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;

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    (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