[Federal Register Volume 86, Number 113 (Tuesday, June 15, 2021)]
[Rules and Regulations]
[Pages 31585-31599]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-12334]



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 Rules and Regulations
                                                 Federal Register
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 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.
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 The Code of Federal Regulations is sold by the Superintendent of Documents. 
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  Federal Register / Vol. 86, No. 113 / Tuesday, June 15, 2021 / Rules 
and Regulations  

[[Page 31585]]



DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service

7 CFR Part 4284

[Docket No. RBS-21-BUSINESS-0007]
RIN 0570-AB06


Rural Innovation Stronger Economy (RISE) Grant Program

AGENCY: Rural Business-Cooperative Service, USDA.

ACTION: Final rule; request for comment.

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

SUMMARY: The Rural Business-Cooperative Service (RBCS), an agency of 
the Rural Development mission area within the U.S. Department of 
Agriculture (USDA), hereinafter referred to as the Agency, is issuing a 
final rule to establish the Rural Innovation Stronger Economy (RISE) 
program as authorized by Section 6424 of the Agriculture Improvement 
Act of 2018 (2018 Farm Bill) to improve the ability of distressed rural 
communities to create high-wage jobs, accelerate the formation of new 
businesses, and help rural communities identify and maximize local 
assets.

DATES: Effective date: This final rule is effective June 15, 2021.
    Comment date: This final rule is being issued to allow for 
immediate implementation of this program. Although this final rule is 
effective immediately, comments are solicited from interested members 
of the public on all aspects of the rule. These comments must be 
submitted electronically and received on or before August 16, 2021. The 
Agency will consider these comments and the need for making any 
revisions as a result of these comments.

ADDRESSES: Comments may be submitted on this rule using the following 
method: Comments may be submitted by going to the Federal eRulemaking 
Portal: Go to https:/www.regulations.gov and, in the ``Search 
Documents'' box, enter the Docket Number RBS-21-BUSINESS-0007 or the 
RIN # 0570-AB06, and click the ``Search'' button. To submit a comment, 
choose the ``Comment Now!'' button. Information on using 
Regulations.gov, including instructions for accessing documents, 
submitting comments, and viewing the docket after the close of the 
comment period, is available under the ``Help'' tab at the top of the 
Home page. Other Information: Additional information about Rural 
Development and its programs is available on the internet at http://www.rd.usda.gov.

FOR FURTHER INFORMATION CONTACT: Sami Zarour, Director, Program 
Management Division, Rural Business-Cooperative Service, U.S. 
Department of Agriculture, STOP 3225, 1400 Independence Avenue SW, 
Washington, DC 20250-3225; email: [email protected]; telephone (202) 
720-1400.

SUPPLEMENTARY INFORMATION:

Executive Order 12866, and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches to maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility.
    This final rule has been determined to be not-significant for 
purposes of Executive Order (E.O.) 12866 and therefore has not been 
reviewed by the Office of Management and Budget (OMB).

Executive Order 12988, Civil Justice Reform

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. In accordance with this rule: (1) Unless 
otherwise specifically provided, all State and local laws and 
regulations that conflict with this rule will be preempted; (2) no 
retroactive effect will be given to this rule unless specifically 
prescribed in the rule; and (3) administrative proceeding of the 
National Appeals Division of the Department of Agriculture (7 CFR part 
11) must be exhausted before bringing suit in court that challenges 
action taken under this rule.

Executive Order 12372, Intergovernmental Review

    This final rule is not subject to the requirements of Executive 
Order 12372, ``Intergovernmental Review of Federal Programs,'' as 
implemented under USDA's regulations at 2 CFR part 415, subpart C.

Executive Order 13132, Federalism

    The policies contained in this 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 states is not required.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    This executive order imposes requirements on the Agency in the 
development of regulatory policies that have tribal implications or 
preempt tribal laws. The Agency has determined that the rule does not 
have 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. 
Thus, this final rule is not subject to the requirements of Executive 
Order 13175. If tribal leaders are interested in consulting with the 
Agency on this rule, they are encouraged to contact USDA's Office of 
Tribal Relations or the Agency's Native American Coordinator at: 
[email protected] to request such a consultation.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) 
generally requires an agency to prepare a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements under the Administrative Procedure Act (``APA'') or any 
other statute. The Administrative Procedures Act exempts from notice 
and comment requirements rules ``relating to agency management or 
personnel or to public property, loans, grants, benefits,

[[Page 31586]]

or contracts'' (5 U.S.C. 553(a)(2)), so therefore an analysis has not 
been prepared for this rule.

National Environmental Policy Act

    In accordance with the National Environmental Policy Act of 1969, 
Public Law 91-190, this final rule has been reviewed in accordance with 
7 CFR part 1970 (``Environmental Policies and Procedures''). The Agency 
has determined that (i) this action meets the criteria established in 7 
CFR 1970.53(f); (ii) no extraordinary circumstances exist; and (iii) 
the action is not ``connected'' to other actions with potentially 
significant impacts, is not considered a ``cumulative action'' and is 
not precluded by 40 CFR 1506.1. Therefore, the Agency has determined 
that the action does not have a significant effect on the human 
environment, and therefore neither an Environmental Assessment nor an 
Environmental Impact Statement is required.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance (CFDA) number assigned 
to this program is 10.755, Rural Innovation Stronger Economy (RISE) 
Grant Program. The Catalog is available on the internet at https://sam.gov/content/assistance-listings. The Government Publishing Office 
(GPO) prints and sells the CFDA to interested buyers. For information 
about purchasing the Catalog of Federal Domestic Assistance from GPO, 
call the Superintendent of Documents at 202-512-1800 or toll free at 
866-512-1800, or access GPO's online bookstore at http://bookstore.gpo.gov.

E-Government Act Compliance

    Rural Development 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.

Civil Rights Impact Analysis

    Rural Development has reviewed this rule in accordance with USDA 
Regulation 4300-4, ``Civil Rights Impact Analysis,'' to identify any 
major civil rights impacts the rule might have on program participants 
on the basis of age, race, color, national origin, sex or disability. 
Based on the review and analysis of the rule and available data, it has 
been determined that the program purpose, application submission and 
eligibility criteria, or issuance of this Final Rule is not likely to 
negatively impact low and moderate-income populations, minority 
populations, women, Indian tribes or persons with disability, by virtue 
of their race, color, national origin, sex, age, disability, or marital 
or familial status.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
chapter 35), USDA requested that the Office of Management and Budget 
(OMB) conduct an emergency review of a new information collection that 
contains the Information Collection and Recordkeeping requirements 
contained in this notice by May 28, 2021. An emergency clearance 
approval for this information collection is due to the following 
conditions: (1) The time sensitive competitive solicitation application 
window; (2) the urgency to obligate funds prior to September 30, 2021; 
and (3) being able to effectively implement the program as quickly as 
possible to benefit rural communities.
    In addition to the emergency clearance, the regular clearance 
process is hereby being initiated to provide the public with the 
opportunity to comment under a full comment period, as the Agency 
intends to request regular approval from OMB for this information 
collection. Comments from the public on new, proposed, revised, and 
continuing collections of information help us assess the impact of our 
information collection requirements and minimize the public's reporting 
burden. Comments may be submitted regarding this information collection 
through the Federal eRulemaking Portal. Go to https://www.regulations.gov and, in the lower ``Search Regulations and Federal 
Actions'' box, select ``RBS'' from the agency drop-down menu, then 
click on ``Submit.'' In the Docket ID column, select Docket No. RBS-21-
CO-OP-0011 to submit or view public comments and to view supporting and 
related materials available electronically. Information on using 
Regulations.gov, including instructions for accessing documents, 
submitting comments, and viewing the docket after the close of the 
comment period, is available through the site's ``User Tips'' link. 
Comments on this information collection must be received by August 16, 
2021.
    Title: 7 CFR part 4284, subpart L, Rural Innovation Stronger 
Economy (RISE) Grant Program.
    OMB Control Number: 0570-0075.
    The following estimates are based on the average over the first 3 
years the program is in place.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 1.52 hours per response.
    Respondents: Institutions of higher education, private entities, 
governmental entities, nonprofits, Indian Tribes, district 
organizations.
    Estimated Number of Respondents: 10.
    Estimated Number of Responses per Respondent: 32.1.
    Estimated Number of Responses: 321.
    Estimated Total Annual Burden (hours) on Respondents: 486.5.
    Copies of this information collection may be obtained from Susan 
Woolard, Regulatory Division, Rural Development Innovation Center, U.S. 
Department of Agriculture, 1400 Independence Ave. SW, Stop 1522, 
Washington, DC 20250; telephone: 202-720-9631; email: 
[email protected]. All responses to this information collection 
and recordkeeping notice will be summarized and included in the request 
for OMB approval. All comments will also become a matter of public 
record.

USDA Non-Discrimination Policy

    In accordance with federal civil rights law and USDA civil rights 
regulations and policies, the USDA, its agencies, offices, and 
employees, and institutions participating in or administering USDA 
programs are prohibited from discriminating based on race, color, 
national origin, religion, sex, gender identity (including gender 
expression), sexual orientation, disability, age, marital status, 
family/parental status, income derived from a public assistance 
program, political beliefs, or reprisal or retaliation for prior civil 
rights activity, in any program or activity conducted or funded by USDA 
(not all bases apply to all programs). Remedies and complaint filing 
deadlines vary by program or incident.
    Persons with disabilities who require alternative means of 
communication for program information (e.g., Braille, large print, 
audiotape, American Sign Language, etc.) should contact the responsible 
Agency or USDA's TARGET Center at (202) 720-2600 (voice and TTY) or 
contact USDA through the Federal Relay Service at (800) 877-8339. 
Additionally, program information may be made available in languages 
other than English.
    To file a program discrimination complaint, complete the USDA 
Program Discrimination Complaint Form, AD-3027, found online at http://www.usda.gov/oascr/how-to-file-a-program-discrimination-complaint and 
at any USDA office or write a letter addressed to USDA and provide in 
the letter all of the information requested in the form. To request a 
copy of the complaint form, call (866) 632-9992. Submit your completed 
form or letter to

[[Page 31587]]

USDA by: (1) Mail: U.S. Department of Agriculture, Office of the 
Assistant Secretary for Civil Rights, 1400 Independence Avenue SW, 
Washington, DC 20250-9410; or (2) email: [email protected].
    USDA is an equal opportunity provider, employer, and lender.

Background

    Rural Development (RD) is a mission area within the United States 
Department of Agriculture (USDA) comprised of the Rural Utilities 
Service (RUS), Rural Housing Service (RHS) and Rural Business-
Cooperative Service (RBCS). RD's mission is to increase economic 
opportunity and improve the quality of life for all rural Americans. RD 
meets its mission by providing loans, loan guarantees, grants, and 
technical assistance through more than 40 programs aimed at creating 
and improving housing, businesses, and infrastructure throughout rural 
America.
    Consistent with the above mission, the Rural Innovation Stronger 
Economy (RISE) Grant Program is a newly authorized program enacted 
under the authority of Section 6424 of the Agriculture Improvement Act 
of 2018 (Pub. L. 115-34) (2018 Farm Bill) to help struggling 
communities by funding job accelerators in low-income rural 
communities. This action is intended to implement the provisions 
provided in Section 6424 of the 2018 Farm Bill by issuing a final rule. 
This final rule will describe the program purpose, the eligible uses of 
program funds, and entities eligible for assistance under the RISE 
Grant Program in alignment with the Farm Bill requirements. The new 
regulation will also include competitive grant scoring criteria and 
cost sharing requirements of the program, as well as administration and 
servicing of outstanding grants. The RISE Grant Program will meet a 
recognized need for federal interagency support of jobs accelerator 
partnerships for the fostering and promotion of private investment in 
an identified regional economy. The flexible use of funds by RISE grant 
recipients allows a region to identify and leverage its community 
assets to better assist new and existing industry clusters, including 
the use of broadband service for programs of the jobs accelerator. RISE 
will allow eligible entities to establish and operate innovation 
centers for job development through training and programming efforts 
that will improve the ability of rural communities to create high-wage 
jobs, accelerate the formation of rural businesses and strengthen 
regional economies.

Purpose of the Regulatory Action

    The purpose of this regulation is to implement Section 6424 of the 
2018 Farm Bill designed to meet a recognized need for federal 
interagency support of jobs accelerator partnerships for the fostering 
and promotion of private investment in an identified regional economy. 
The flexible use of funds by RISE grant recipients allows a region to 
identify and leverage its community assets to better assist new and 
existing industry clusters, including the use of broadband service for 
programs of the jobs accelerator.

Discussion of the Rule

    Many of the definitions used in this regulation are used in or are 
consistent with other Agency programs; however, the Agency calls 
attention to the following new definitions at Sec.  4284.1103: High-
wage job, industry cluster, jobs accelerator, lead applicant, region, 
rural and rural area, and rural jobs accelerator partnership. These 
definitions provide important information regarding project eligibility 
as well as requirements for the applicant's organizational structure.
    RISE grants are made for the benefit of rural jobs accelerator 
partnerships (partnership). These partnerships are working groups that 
consist of community and regional stakeholders whose focus is the needs 
of an identified industry cluster. Implementation and sustainability of 
the partnership is more likely with a broad coalition of stakeholders; 
to that end, the partnership must be made up of one or more 
representatives of the groups listed in Sec.  4284.1112(a). 
Additionally, all partnerships must have a lead applicant as described 
in Sec.  4284.1112(b). The lead applicant is responsible for the 
partnership, enters into the financial assistance agreement with the 
Agency, administers the grant proceeds and activities, and takes 
ownership of any assets purchased with grant funds. Only partnerships 
formed on or after December 20, 2018, are eligible for awards.
    The partnership and proposed project must serve a region as defined 
in Sec.  4284.1103 and discussed at Sec.  4284.1112(d). The partnership 
must ensure that the region is clearly defined and is of a size that 
enables collaboration among members while also containing critical 
elements of the industry cluster prioritized by the partnership. 
Eligibility under all other provisions of this part is negated if the 
lead applicant meets either provision in Sec.  4284.1109(a) or (b). The 
lead applicant will remain ineligible to receive funds until the 
disqualifying condition has been remedied.
    To ensure that all RISE funds are being used, in a timely manner, 
to provide the services for which they were awarded, the Agency 
implements, at Sec.  4284.1110(a), a satisfactory progress requirement. 
Lead applicants that have unexpended funding from previous RISE 
grant(s) must expend 50 percent or more of the previous RISE grant 
funds by the time the Agency makes an eligibility determination or the 
application will be deemed ineligible for that funding cycle.
    Eligible projects for the RISE grant program are those that 
accelerate the formation of new businesses with high-growth potential, 
improve the ability of distressed, rural communities to create high-
wage jobs, accelerate the formation of new businesses and strengthen 
regional economies. Projects must be identified at the time of 
application and fall into one of two categories: Construction or 
purchase of buildings or equipment; or project support. Construction or 
purchase is limited to buildings that will serve as innovation centers 
for jobs accelerator. Equipment purchases must be necessary to support 
the functions of the jobs accelerator. Specific information on 
construction and purchase is found at Sec.  4284.1113(a). It is noted 
again that any buildings or equipment purchased with RISE grant 
proceeds must be owned and controlled by the lead applicant. Support 
covers a broad range of activities but includes functions for the 
support of programs carried out at or in direct partnership with a jobs 
accelerator or in support of jobs accelerator initiatives. The Agency 
provides guidance on acceptable activities at Sec.  4284.1113(b). The 
Agency may, from time to time, revise the list of acceptable activities 
through a Federal Register notice.
    As detailed at Sec.  4284.1114, the Federal share of any activity 
under the RISE grant will be no more than 80 percent of eligible 
project costs. The non-Federal share is the responsibility of the 
applicant and may be in the form of third-party equity contributions, 
including donations and in-kind contributions of fairly valued goods or 
services. Evidence of the amount and source of the non-Federal funds 
must be provided at the time of application submittal with 
documentation that the required non-Federal funds have been received or 
remain committed prior to execution of the financial assistance 
agreement by the lead applicant. The match is based on eligible project 
costs as outlined at Sec.  4284.1114(c). Grants are further restricted 
at Sec.  4284.1114(a)(1) and (2) to a minimum request of not less

[[Page 31588]]

than $500,000 and a maximum request of not more than $2,000,000. 
Restrictions are also placed on indirect costs. Costs incurred by the 
applicant associated with administering the RISE grant are statutorily 
restricted to ten percent of the RISE grant amount.
    As the Agency wishes to encourage projects across a broad 
geographic area, applicants are limited to one application per funding 
cycle, unless otherwise notified in a Federal Register notice. The 
contents of a complete application may be found at Sec.  4284.1115(b). 
All items must be included or addressed for an application to be 
considered complete and to compete for funding. The items requested 
allow the Agency to complete an applicant and project eligibility 
determination, as well as determine project alignment with Agency 
priorities.
    Based upon comments received during the request for public comments 
period, the Agency added a review of concept proposal at Sec.  
4284.1115(a). Applicants may submit, not less than 60 days prior to the 
application submittal deadline, the items in Sec.  4284.1115(a)(1) 
through (4) for Agency review. The Agency will review the submitted 
items and provide feedback regarding any weaknesses and a letter of 
encouragement or discouragement. A letter of encouragement does not 
guarantee eligibility or funding. Similarly, a letter of discouragement 
does not preclude the applicant from submitting a complete application. 
If an applicant submits a review request and later submits a complete 
application, duplicative items do not have to be resubmitted; however, 
all information must be up-to-date and current.
    To ensure that projects begin providing the proposed services as 
quickly as possible and that all members of the partnership are ready 
to contribute to the success of the proposed project, the Agency at 
Sec.  4284.1115(b)(2)(x) requires that all applications include a 
readiness demonstration. The items identified in Sec.  
4284.1115(b)(2)(x)(A) through (E) not only provide the Agency evidence 
that the partnership is ready and able to begin the project but also 
allows the partnership to evaluate the ability of their members to 
provide the services necessary, create a marketing and reporting plan 
and finalize a timeline.
    Each complete and eligible application for the RISE program will be 
scored based on the priority scoring criteria found at Sec.  
4284.1117(a) through (g). Applications will, unless otherwise publicly 
announced, be reviewed, and scored by Agency personnel. The scoring 
criteria are designed to prioritize sustainable projects that best meet 
the program criteria set forth in the 2018 Farm Bill and this 
regulation. Scored applications will be ranked from highest to lowest 
score for funding consideration. Due to the variability of proposals 
from year to year, no minimum score for funding is provided. Regardless 
of a proposal's priority score or relative ranking, all funding 
decisions are subject to the availability of funds. Receipt of funds in 
one funding cycle does not guarantee priority or funding in future 
funding cycles.
    Information specific to the awarding of a grant is provided at 
Sec.  4284.1119. As noted previously, the lead applicant is responsible 
for the administration of the grant and will, if the application is 
selected for funding, be issued a letter of conditions by the Agency. 
The letter establishes conditions that the applicant must agree to 
prior to the obligation of funds. Acceptance of the conditions by the 
applicant does not constitute commitment or obligation of funds by the 
Agency. The applicant must not make any binding commitments until a 
financial assistance agreement has been fully executed and the 
applicant has been notified by the Agency of grant approval. The grant 
performance period for all grants award under this part is four years 
beginning on the date the financial assistance agreement was signed by 
the Agency. At the end of the four-year period any unspent grant funds 
are required to be returned to the Agency. If circumstances beyond the 
grantee's control occur, the Agency may, at its sole discretion, 
approve a one-time grant performance period extension. Any extension 
will be for a period not to exceed two years and must be requested by 
the grantee prior to the expiration of the grant performance period, as 
specified in the financial assistance agreement. Requests must describe 
the circumstances that prohibited the grantee from completing the 
project and show that an active jobs accelerator and related 
programming is established. Further discussion of times extensions can 
be found at Sec.  4284.1110(g)(1).

Discussion of Public Comments for Final Rule

    On July 22, 2020, the Agency published a request for comments in 
the Federal Register (85 FR 44273) to allow stakeholders a platform and 
sufficient time to provide formal comments on provisions of the Rural 
Innovation Stronger Economy (RISE) Grant Program. Eleven entities 
provided written comments during the formal comment period. The Agency 
also conducted listening sessions for interested stakeholders on July 
28, and July 30, 2020, regarding implementation of the Final Rule for 
the RISE program. A listening session was also held on July 21, 2020, 
to receive comments from Agency staff. The Agency reviewed and 
considered all comments that were received. The following discusses 
substantive comments and the Agency's response:
    Comment: Two commenters indicated that RISE should have a framework 
for an applicant providing components of the application, similar to 
the Department of Commerce's Economic Development Administration's 
(EDA) process for their programs, including a concept proposal to 
highlight their eligibility and scope of work.
    Response: The Agency considered this application framework and 
included the concept paper proposal suggestion in the application 
process.
    Comment: Two commenters provided suggestions for quantitative 
scoring including evaluation of market connections made, new regional 
programs and networks established. These scoring criteria indicate that 
there should be not only qualitative but quantitative factors when 
evaluating RISE applications.
    Response: The Agency used the comments to develop benchmarks of 
success in scoring criteria to make awards that will generate the 
intended program outcomes. The Agency considered this information and 
therefore included a requirement that project performance reports be 
provided twice a year, from the grantee, in order to monitor progress 
on the key metrics found in the scope of work.
    Comment: A commenter suggested scoring metrics ranging from 
innovation, scope and monetary impact of the project to private/public 
partnerships involved in the project was provided. The commenter 
discussed including scoring consideration for projects in federal 
Opportunity Zones.
    Response: The Agency considered various metrics from innovation to 
scope and monetary impact of the project as well as partnership 
analysis and included this in the scoring criteria. The Agency may 
include federal initiatives as a criterion under the Administrator 
section of scoring, which may be announced in the Federal Register in 
the Notice of Solicitation of Applications on an annual basis.
    Comment: A commenter suggested that the program provide more 
significant scoring and weighting for partnerships that evidence 
commitments to target low-income workers for workforce development 
activity. The commenter further

[[Page 31589]]

recommended that the Agency emphasize high impact metrics including 
creation and retention of high-wage jobs, private investment 
leveraging, businesses established or improved, new products or 
services commercialized, increased regional collaboration, the number 
and dollar amount of new loans, improvement of income of participating 
workers, sales of participating businesses, and the amount of training 
and education activities related to the innovation.
    Response: The Agency considered these items and many of these items 
were included in the application content and scoring. The Agency 
addressed grant monitoring metrics in the servicing section of the 
regulation. The Agency provided an analysis of the partnership's 
abilities in the application and scoring content of the regulation.
    Comment: Three commenters indicated that applicants should fully 
demonstrate commitment and sustainability of the project in their 
applications.
    Response: The Agency agrees with this comment and includes input on 
technology, scope, commitment, and sustainability of the project and 
incorporated these items not only in the application but also in the 
scoring criteria for the RISE program.
    Comment: One commenter discussed the applicant providing details of 
organization, governance, operations, and roles of partners in the 
partnership. One commenter discussed what the application should 
consist of including a definition of the consortium of entities, roles 
of each partner, business plan, description of the region in economic 
terms, activities to be performed by the partnership, how the 
partnership will collect metrics of performance on itself and a 
communication plan outlining how success stories and impacts will be 
outlined.
    Response: The Agency considered details of the partnership from 
organization to governance and included these components in the 
application requirements and scoring criteria.
    Comment: One commenter suggested the Agency evaluate proposals by 
different standards.
    Response: The Agency does not agree with using different standards 
for the evaluation of applications and will evaluate all proposals by 
the same scoring criteria.
    Comment: Two commenters discussed an assessment of the applicant's 
link with rural communities to markets, networks, industry clusters and 
other regional opportunities and assets plus the characteristics for 
regional readiness and success.
    Response: The Agency considered these comments to develop 
benchmarks of readiness and commitment to the identified region in 
scoring criteria to make awards that will generate the intended program 
outcomes.
    Comment: Several commenters suggested including a rating factor of 
the amount of previous partnership activities and resources that will 
be leveraged by the RISE grant activities and developing successful 
benchmarks ranging from quantifying prototypes, technology and jobs to 
markets criteria.
    Response: The Agency appreciates the suggested metrics and included 
many of these in the regulation and scoring criteria.
    Comment: Two commenters discussed measurement of outcome-based 
metrics including business, employment and wage growth and job training 
as well as patent applications in its grant monitoring. Several 
commenters indicated that grant servicing reports should be no more 
frequent than semi-annual due to the length of the grant period.
    Response: The Agency addressed grant monitoring metrics in the 
servicing section of the regulation. The Agency agrees and will monitor 
performance metrics and outcomes of grant funds on a semi-annual basis.
    Comment: Commenter discussed the statutory requirement of a 20 
percent cost match of the RISE Program and requested the Agency not to 
require the entire portion of the match to be demonstrated at the 
application stage, but instead to allow applicants to produce the 
remainder of any cost-share commitment up to a year after award.
    Response: The Agency is unable to consider an option to delay grant 
matching requirements due to statutory requirements of the RISE 
Program. The input of matching funds at grant origination demonstrates 
the applicant's commitment to the project.
    Comment: One commenter discussed the Agency extending past the ten 
percent restriction on indirect costs for awarded entities.
    Response: The ten percent limitation on indirect costs and 
administrative expenses is a statutory requirement and cannot be 
modified as suggested.
    Comment: One commenter discussed the ability of innovation centers 
to be virtual in lieu of having a physical building centered in one 
community.
    Response: A virtual option is allowable under RISE if a rural 
region is being served and all other eligible criteria are met. The 
Agency did clarify that the construction of an innovation center must 
be in a rural area only.
    Comment: One commenter suggested allowing grant funding to be spent 
on multiple activities including training and support of businesses, 
support research and development activities to develop markets, 
development of partnerships to deal with supply issues and obtaining 
resources for workforce development programs.
    Response: The Agency developed eligible project costs to cover 
multiple activities including the purchase and construction of an 
innovation center, costs directly related to the operations of an 
innovation center, costs directly associated with support programs to 
be carried out at or in direct partnership with job accelerators as 
well as other administrative costs providing the ability to cover 
training and development.
    Comment: One commenter suggested that the jobs accelerator be able 
to serve multiple communities with populations of 50,000 or less.
    Response: The Agency concurs with the comment regarding ability to 
serve multiple communities and has a statutory responsibility to ensure 
this.
    Comment: One commenter indicated the Agency should ensure a region 
is not too small.
    Response: The Agency addressed the definition of a region in the 
RISE regulation in compliance with the statutory requirements.

List of Subjects for 7 CFR Part 4284

    Community development, Cooperative development, Grant programs, 
Reporting and recordkeeping requirements.

    Accordingly, for reasons set forth in the preamble, Chapter XLII of 
Title 7 of the Code of Federal Regulations is amended as follows:

PART 4284--GRANTS

0
1. The authority citation for part 4284 continues to read as follows:

    Authority: 5 U.S.C. 301 and 7 U.S.C. 1989.


0
2. Add subpart L, consisting of Sec. Sec.  4284.1101 through 4264.1131, 
to read as follows:

Subpart L--Rural Innovation Stronger Economy (RISE) Grant Program

Sec.
4284.1101 Purpose.
4284.1102 Organization of subpart.
4284.1103 Definitions.
4284.1104 Exception authority.
4284.1105 Review or appeal rights.
4284.1106 Conflict of interest.
4284.1107 Statute and regulation references.

[[Page 31590]]

4284.1108 U.S. Department of Agriculture departmental regulations 
and laws that contain other compliance requirements
4284.1109 Ineligible applicants
4284.1110 General applicant, application, and funding provisions.
4284.1111 Notifications.
4284.1112 Rural jobs accelerator partnership eligibility.
4284.1113 Project eligibility.
4284.1114 RISE grant funding.
4284.1115 RISE grant applications--content.
4284.1116 [Reserved]
4284.1117 Scoring RISE grant applications.
4284.1118 Selecting RISE grant applications for award.
4284.1119 Awarding and administering RISE grants.
4284.1120 Servicing RISE grants.
4284.1121-4284.1130 [Reserved]
4284.1131 OMB control number.


Sec.  4284.1101   Purpose.

    This subpart contains the procedures and requirements for providing 
the following financial assistance under the Rural Innovation Stronger 
Economy (RISE) program:
    (a) Grants for the purpose of constructing, purchasing, or 
equipping a building to serve as an innovation center in order to 
establish job accelerators.
    (b) Grants for the purpose of establishing and supporting job 
accelerators and related programs.


Sec.  4284.1102   Organization of subpart.

    This subpart is organized into distinct sections as described in 
paragraphs (a) and (b) of this section.
    (a) Sections 4284.1103 through 4284.1111 discuss definitions; 
exception authority; review or appeal rights; conflict of interest; 
USDA departmental regulations; other applicable laws; ineligible 
applicants; general applicant, application, and funding provisions; and 
notifications, which are applicable to funding the program under this 
subpart.
    (b) Sections 4284.1112 and 4284.1113 discuss, respectively, 
applicant and project eligibility. Section 4284.1114 addresses funding 
provisions for these grants. Sections 4284.1115 through 4284.1120 
address grant application content and required documentation, scoring, 
selection, awarding and administering grant applications, and servicing 
of grant awards.


Sec.  4284.1103   Definitions.

    The following definitions are applicable to the terms used in this 
subpart.
    Administrator means the Administrator of Rural Business-Cooperative 
Service (RBCS) within the Rural Development mission area of the U.S. 
Department of Agriculture (USDA).
    Agency means RBCS or its successor agency assigned by the Secretary 
of Agriculture to administer the RISE grant program. References to the 
National Office, Finance Office, State Office, or other Agency offices 
or officials should be read as prefaced by ``Agency'' or ``Rural 
Development'' as applicable.
    Applicant means the lead applicant acting on behalf of a rural jobs 
accelerator partnership as stated in 4282.1112, that is seeking a RISE 
grant. The lead applicant will enter into a financial assistance 
agreement with the Agency, receive the RISE grant funding and take 
ownership of any assets purchased with grant funds.
    Broadband service. Defined within the meaning of Title VI of the 
Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.), broadband 
service means any technology identified by the Administrator as having 
the capacity to provide transmission facilities and capacity that 
enable the subscriber to receive a minimum level of broadband service. 
The minimum level of broadband service for the purpose of reviewing the 
application will be defined by the minimum transmission capacity that 
was required by Title VI of the Rural Electrification Act of 1936 (7 
U.S.C. 901 et seq.) at the time the application was received by the 
Agency.
    Complete application means an application that contains all parts 
necessary for the Agency to determine applicant and project 
eligibility, the financial feasibility and technical merit of the 
project, and contains sufficient information to determine a priority 
score for the application.
    Departmental regulations mean the regulations of the Agency's 
Office of Chief Financial Officer (or successor office) as codified in 
2 CFR chapter IV.
    District organization means an organization as defined in Section 
300.3 of Title 13, Code of Federal Regulations (or a successor 
regulation).
    Eligible project costs means the portion of total project costs 
approved by the Agency for projects that are eligible to be paid with 
RISE funds.
    Federal fiscal year (FY) means the 12-month period beginning 
October 1 of any given year and ending on September 30 of the following 
year; it is designated by the calendar year in which it ends.
    Financial assistance agreement means Form RD 4280-2, ``Rural 
Business-Cooperative Service Financial Assistance Agreement, or 
successor form and is an agreement between the Agency and the grantee 
setting forth the provisions under which the grant will be 
administered.
    High-wage job means a job that provides a wage that is greater than 
the median wage for the applicable region, as determined by the 
Department of Labor.
    Indian tribe means the term as defined in 25 U.S.C. 5304(e).
    Industry cluster means a broadly defined network of interconnected 
firms and supporting institutions in related industries that accelerate 
innovation, business formation, and job creation by taking advantage of 
assets and strengths of a region in the business environment.
    Innovation center means a cross-functional place for the planning 
and creation of new ideas and opportunities for individual and group 
collaboration that leads to supporting deployment of innovative 
processes, technologies, services and products for economic 
development. Innovation centers may be utilized for a wide array of 
purposes including short-term housing for business owners or workers; 
co-working space, which may include space for remote work; space for 
business utilization with a focus on entrepreneurs and small and 
disadvantaged businesses but may include collaboration with companies 
of all sizes; job training programs; and efforts to utilize the 
innovation center as part of the development of a community, among 
other uses deemed appropriate by the Agency.
    Institution of higher education means the term as defined in 20 
U.S.C. 1002(a).
    Instrumentality means an organization recognized, established, and 
controlled by a State, Tribal, or local government for a public purpose 
or to carry out special purposes.
    Jobs accelerator means a center or program located in or serving a 
rural low-income community that may provide co-working space, in-demand 
skills training, entrepreneurship and business support, and other 
initiatives as described in Part 4284.1113(b).
    Lead applicant means an entity as defined in Part 4284.1112(b) and 
is responsible for the rural jobs accelerator partnership plus 
administration of the grant proceeds and activities.
    Letter of conditions means a document prepared by the Agency 
establishing conditions that must be agreed to by the applicant before 
any obligation of grant funds can occur.
    Low income community means a community as defined in section 45D(e) 
of the Internal Revenue Code of 1986, and any amendments thereto.
    Matching funds means non-federal funds provided to meet the total 
eligible project costs that are not covered by the RISE grant proceeds.

[[Page 31591]]

    Person means an individual or an entity organized under the laws of 
a state or a Tribe.
    Region means an area identified by the applicant that meets the 
criteria of Sec.  4284.1112(d) with a population of 50,000 or fewer 
inhabitants, or for a region with a population of more than 50,000 
inhabitants, is comprised of rural areas and urbanized areas, if any, 
are the subject of a positive determination by the Under Secretary for 
Rural Development with respect to a rural-in-character petition, 
including such a petition submitted concurrently with the application 
of the partnership for a grant under this section.
    Rural and rural area means any area of a state not in a city or 
town that has a population of more than 50,000 inhabitants according to 
the latest decennial census of the United States and not in the 
urbanized area contiguous and adjacent to a city or town that has a 
population of more than 50,000 inhabitants. A rural and rural area 
shall be determined as defined in 7 U.S.C. 1991(a)(13).
    Rural in character means:
    (1) A determination that an area is ``rural in character'' will be 
made by the Under Secretary of Rural Development in compliance with 7 
U.S.C. 1991(a)(13)(D). The process to request a determination under 
this provision is outlined in this definition. Units of local 
government may petition the Under Secretary of Rural Development for a 
``rural in character'' designation by submitting a petition to the 
Administrator on behalf of the Under Secretary. The petition shall 
document why the petitioner believes the area is ``rural in character'' 
including, but not limited to, the area's population density, 
demographics, and topography and how the local economy is tied to a 
rural economic base. Upon receiving a petition, the Administrator will 
review its merits and consult with the applicable governor or leader in 
a similar position and request comments to be submitted within 5 
business days, unless such comments were submitted with the petition. 
The petition will be forwarded to the Under Secretary who will release 
to the public a notice of a petition filed by a unit of local 
government not later than 30 days after receipt of the petition by way 
of publication in a local newspaper and posting on the Agency's 
website. The Under Secretary will make a determination not less than 15 
days, but no more than 60 days, after the release of the notice. Upon a 
negative determination, the Under Secretary will provide to the 
petitioner an opportunity to appeal a determination to the Under 
Secretary, and the petitioner will have 10 business days to appeal the 
determination and provide further information for consideration. The 
Under Secretary will make a determination of the appeal in not less 
than 15 days, but no more than 30 days.
    (2) Rural Development State Directors may also initiate a request 
to the Under Secretary to determine if an area is ``rural in 
character.'' A written recommendation should be sent to the 
Administrator, on behalf of the Under Secretary, that documents how the 
area meets the statutory requirements and discusses why the State 
Director believes the area is ``rural in character'' including, but not 
limited to, the area's population density, demographics, topography, 
and how the local economy is tied to a rural economic base. Upon 
receipt of such a request, the Administrator will review the request 
for compliance with the ``rural in character'' provisions and make a 
recommendation to the Under Secretary. Provided a favorable 
determination is made, the Under Secretary will consult with the 
applicable governor or leader in a similar position and request 
comments within 10 business days, unless gubernatorial comments were 
submitted with the request. A public notice will be published by the 
State Office in a local newspaper and the request will be posted on the 
Agency's website. There is no appeal process for requests made on the 
initiative of the State Director.
    Rural jobs accelerator partnership means a partnership formed on or 
after December 20, 2018, which meets eligibility criteria found in 
Sec.  4284.1112.
    Secretary means the Secretary of Agriculture and, to the extent of 
delegated authorities, the Under Secretary for Rural Development.
    Small and disadvantaged business means a small business concern 
owned and controlled by socially and economically disadvantaged 
individuals as defined in Section 8(d)(3)(C) of the Small Business Act 
(15 U.S.C. 637(d)(3)(C)).
    Small business means:
    (1) An entity that meets Small Business Administration (SBA) size 
standards in accordance with 13 CFR part 121 and criteria of 13 CFR 
121.301 as applicable to financial assistance programs, including 
paragraph (i) or (ii) of this definition. The size of the concern alone 
and the size of the concern combined with other entity(ies) it controls 
or entity(ies) it is controlled by, must not exceed the size standard 
thresholds designated for the industry in which the concern alone or 
the concern and its controlling entity(ies), whichever is higher, is 
primarily engaged.
    (2) To be considered a small business, either of the following 
conditions must be met:
    (i) The concern's tangible net worth is not in excess of $15 
million and average net income (excluding carry-over losses) for the 
preceding two completed fiscal years is not in excess of $5.0 million; 
or
    (ii) The size of the concern does not exceed the SBA size standard 
thresholds designated for the industry in which it is primarily 
engaged, as measured by number of employees or annual receipts. 
Industry size standard designations to be utilized are listed in the 
SBA's table of size standards found in 13 CFR 121.201. Number of 
employees and annuals receipts are calculated as follows:
    (A) Number of employees is calculated as the average number of all 
individuals employed by a concern on a full-time, part-time, or other 
basis, based upon numbers of employees for each of the pay periods for 
the preceding completed 12 calendar months. If a concern has not been 
in business for 12 months, the average number of employees is used for 
each of the pay periods during which it has been in business.
    (B) Annual receipts are calculated as average total income plus 
cost of goods sold for the five most recent years. If a concern has 
been in operation for less than 60 months, average annual receipts for 
as long as the concern has been in operation are used.
    State means any of the 50 States of the United States, the 
Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American 
Samoa, the Commonwealth of the Northern Mariana Islands, the Republic 
of Palau, the Federated States of Micronesia, and the Republic of the 
Marshall Islands.
    Total project costs mean the sum of all costs associated with a 
completed project.


Sec.  4284.1104   Exception authority.

    The Administrator may, on a case-by-case basis, grant an exception 
to any requirement or provision of this subpart provided that such an 
exception is in the best financial interests of the Federal government. 
Exercise of this authority cannot conflict with applicable law.


Sec.  4284.1105   Review or appeal rights.

    Agency decisions that are adverse to the individual participant are 
appealable, while matters of general applicability are not subject to 
appeal; however, such decisions are reviewable for appealability by the 
National Appeals Division (NAD). All appeals

[[Page 31592]]

will be conducted by NAD and will be handled in accordance with 7 CFR 
part 11.


Sec.  4284.1106   Conflict of interest.

    (a) General. A situation in which a person has competing personal, 
professional, or financial interests that prevents the person from 
acting impartially.
    (b) Assistance to employees, relatives, and associates. The Agency 
will process any requests for assistance under this subpart in 
accordance with 7 CFR part 1900, subpart D.
    (c) Member/Delegate clause. No member of or delegate to Congress 
shall receive any share or part of this grant or any benefit that may 
arise therefrom; but this provision shall not be construed to bar, as a 
contractor under the grant, a publicly held corporation whose ownership 
might include a member of Congress.


Sec.  4284.1107   Statute and regulation references.

    All references to statutes and regulations are to include any and 
all successor statutes and regulations.


Sec.  4284.1108   U.S. Department of Agriculture departmental 
regulations and laws that contain other compliance requirements.

    (a) Departmental regulations. All projects funded under this 
subpart are subject to the provisions of the departmental regulations, 
as applicable, which are incorporated by reference herein.
    (b) Equal opportunity and nondiscrimination. The Agency will ensure 
that equal opportunity and nondiscrimination requirements are met in 
accordance with the Equal Credit Opportunity Act, 15 U.S.C. 1691 et 
seq. and 7 CFR part 15d, Nondiscrimination in Programs or Activities 
Conducted by the United States Department of Agriculture. The Agency 
will not discriminate against applicants on the basis of race, color, 
religion, national origin, sex, marital status, or age (provided that 
the applicant has the capacity to contract); because all or part of the 
applicant's income derives from any public assistance program; or 
because the applicant has in good faith exercised any right under the 
Consumer Credit Protection Act, 15 U.S.C. 1601 et seq.
    (c) Civil rights compliance. Recipients of grants must comply with 
the Americans with Disabilities Act of 1990, 42 U.S.C. 12101 et seq., 
Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d et seq., and 
Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794. This 
includes collection and maintenance of data on the race, sex, and 
national origin of the recipient's membership/ownership and employees. 
These data must be available to conduct compliance reviews in 
accordance with 7 CFR 1901.204.
    (1) Initial compliance reviews will be conducted by the Agency 
prior to funds being obligated.
    (2) Grants will require one subsequent compliance review following 
project completion. This will occur after the last disbursement of 
grant funds has been made.
    (d) Environmental analysis. 7 CFR part 1970 outlines environmental 
procedures and requirements for this subpart. Prospective applicants 
are advised to contact the Agency to determine environmental 
requirements as soon as practicable after they decide to pursue any 
form of financial assistance directly or indirectly available through 
the Agency. The applicant will be notified of all specific compliance 
requirements, including:
    (1) Any required environmental review must be completed by the 
Agency prior to the Agency obligating any funds or the applicant taking 
any action;
    (2) A site visit by the Agency may be scheduled, if necessary, to 
determine the scope of the review. An environmental review may include 
the publication of public notices, and consultation with State and 
Tribal Historic Preservation Offices and the U.S. Fish and Wildlife 
Service.
    (e) Discrimination complaints--(1) Who may file. Persons or a 
specific class of persons believing they have been subjected to 
discrimination prohibited by this section may file a complaint 
personally, or by an authorized representative with USDA, Director, 
Office of Adjudication, 1400 Independence Avenue SW, Washington, DC 
20250.
    (2) Time for filing. A complaint must be filed no later than 180 
days from the date of the alleged discrimination, unless a request for 
a waiver of the 180-day timeline is requested and the time for filing 
is extended by the designated officials of USDA or the Agency.
    (3) Filing a complaint. To file a program discrimination complaint, 
complete the USDA Program Discrimination Complaint Form, AD-3027, found 
online at https://www.usda.gov/oascr/how-to-file-a-program-discrimination-complaint and at any USDA office or write a letter 
addressed to USDA and provide in the letter all of the information 
requested in the form. To request a copy of the complaint form, call 
(866) 632-9992. Submit your completed form or letter to USDA by:
    (i) Mail: U.S. Department of Agriculture, Office of Adjudication, 
1400 Independence Avenue SW, Washington, DC 20250-9410;
    (ii) Fax: (202) 690-7442; or
    (iii) Email: [email protected].


Sec.  4284.1109   Ineligible applicants.

    Applicants will be ineligible to receive funds under this subpart 
as discussed in paragraphs (a) and (b) of this section.
    (a) If the applicant has an outstanding judgment obtained by the 
U.S. in a Federal Court (other than in the United States Tax Court), is 
delinquent in the payment of Federal income taxes, or is delinquent on 
a Federal debt, the applicant is not eligible to receive a grant until 
the judgment is paid in full or otherwise satisfied or the delinquency 
is resolved. The Agency will check the Do Not Pay System to verify this 
information.
    (b) If the applicant is debarred or suspended from receiving 
Federal assistance, the applicant is not eligible to receive a grant 
under this subpart. The Agency will check the System for Award 
Management (SAM) to determine if the applicant has been debarred or 
suspended.


Sec.  4284.1110   General applicant, application, and funding 
provisions.

    (a) Satisfactory progress. A lead applicant that has received one 
or more grants under this program must make satisfactory progress 
toward completion of any previously funded projects before the lead 
applicant will be considered for subsequent funding. Satisfactory 
progress is defined as 50% or greater of the previous RISE award being 
expended at the time the Agency makes its eligibility determination for 
a subsequent application.
    (b) Application submittal. Applications must be submitted in 
accordance with the provisions of this subpart unless otherwise 
specified in a Federal Register notice. Grant applications for 
financial assistance under this subpart may be submitted at any time 
with awards made annually based on the application's score and subject 
to available funding.
    (c) Limit on number of applications. An applicant can apply for and 
compete only one RISE project under this subpart per Federal fiscal 
year, unless otherwise noted in a Federal Register notice.
    (d) Application modification. Once submitted and prior to Agency 
award, if an applicant significantly modifies its application or scope 
of work, the application will be treated as a new

[[Page 31593]]

application. The submission date of record for such modified 
applications will be the date the Agency receives the modified 
application, and the application will be processed by the Agency as a 
new application under this subpart. Applications that are modified due 
only to partial funding being available for the selected award are not 
subject to this provision.
    (e) Incomplete applications. Applicants must submit a complete 
application in compliance with Sec.  4284.1115 in order to be 
considered for funding. If an application is incomplete, the Agency 
will identify those parts of the application that are incomplete and 
return the documents, with a written explanation, to the applicant for 
possible future resubmission. Upon receipt of a complete application by 
the appropriate Agency office, the Agency will complete its evaluation 
and will compete the application in accordance with the procedures 
specified in Sec.  4284.1118, as applicable.
    (f) Application withdrawal. During the period between the 
submission of an application and the execution of grant award documents 
for an application selected for funding, the applicant must notify the 
Agency, in writing, if the project is no longer viable or the applicant 
is no longer requesting financial assistance for the project. When an 
applicant withdrawal request is received by the Agency, the selection 
will be rescinded and/or the application withdrawn from further 
processing and funding consideration.
    (g) Time limit on use of grant funds. Except as provided in 
paragraph (g)(1) of this section, grant funds not expended within the 
initial grant term of 4 years from the date the financial assistance 
agreement was signed by the Agency will be returned to the Agency.
    (1) Time extensions. The Agency may extend the 4-year grant time 
limit if the Agency determines, at its sole discretion, that the 
grantee is unable to complete the project for reasons beyond the 
grantee's control and that the grantee has established an active jobs 
accelerator and related programming. Grantees must submit a request for 
the no-cost extension no later than 90 days before the expiration date 
of the Financial Assistance Agreement. This request must describe the 
extenuating circumstances that were beyond its control to complete the 
project for which the grant was awarded, elements of completion that 
are required and their timeframe, and why an approval is in the 
government's best interest. The Agency may extend the grant term up to 
an additional two-year period. Additional extensions will not be 
granted.
    (2) Return of funds to the Agency. Funds that exceed the amount the 
grantee is entitled to receive under the financial assistance agreement 
or that are remaining after grant closeout will be returned to the 
Agency.


Sec.  4284.1111   Notifications.

    (a) Eligibility. If an applicant or its project is determined by 
the Agency to be ineligible at any time, the Agency will inform the 
applicant, as applicable, in writing of the decision, reasons 
therefore, and any applicable appeal rights. No further processing of 
the application or disbursement of grant proceeds, if funds have been 
previously awarded, will occur.
    (b) Funding determinations. Each applicant, as applicable, will be 
notified of the Agency's funding decision on its application. If the 
Agency's decision is to not fund an application, the Agency will notify 
the applicant in writing including the reasons for the determination 
and any applicable appeal or review rights.


Sec.  4284.1112   Rural jobs accelerator partnership eligibility.

    A rural jobs accelerator partnership (Partnership) organizes key 
community and regional stakeholders into a working group that focuses 
on the shared goals and needs of the targeted industry cluster(s). To 
be eligible for a RISE grant under this subpart, the Partnership must 
be formed on or after December 20, 2018, and meet each of the criteria 
specified in paragraphs (a) through (d) of this section. The Agency 
will determine a Partnership's eligibility based on the criteria 
herein.
    (a) The Partnership must include one or more representatives of the 
following:
    (1) A State, Tribal or local government;
    (2) A State, Tribal, or local government entity;
    (3) A land-grant college or university or other institution of 
higher education, as defined in the Higher Education Act of 1965 (20 
U.S.C. 1001);
    (4) A rural non-profit cooperative; or
    (5) A private entity, which may include a business in an industry 
cluster, economic development or community development organization, 
financial institution including a community development financial 
institution, philanthropic organization or labor organization.
    (b) The Partnership must have a lead applicant represented by one 
of the following:
    (1) A district organization;
    (2) An Indian Tribe or a political subdivision of a Tribe, 
including a special purpose unit of a tribal government engaged in 
economic development activities, or a consortium of Indian Tribes;
    (3) A State or a political subdivision of a State, including a 
special purpose unit of a State or local government engaged in economic 
development activities, or a consortium of political subdivisions;
    (4) An institution of higher education (as defined in section 101 
of the Higher Education Act of 1965 (20 U.S.C. 1001)) or a consortium 
of institutions of higher education; or
    (5) A public or private nonprofit organization.
    (c) The Partnership and its project must serve a rural region, as 
defined.
    (d) The Partnership must clearly define the region that the 
partnership represents and ensure that the Region encompasses each of 
the following:
    (1) Is large enough to contain critical elements of the industry 
cluster prioritized by the partnership;
    (2) Is small enough to enable close collaboration among members of 
the partnership;
    (3) Includes a majority of communities that are located in the 
following:
    (i) A nonmetropolitan area that qualifies as a low-income 
community; and
    (ii) An area that has access to or has a plan to achieve broadband 
service, as defined; and
    (4) Has a population of 50,000 or fewer inhabitants or, for a 
region with a population of more than 50,000 inhabitants, is comprised 
of rural areas and urbanized areas, if any, are the subject of a 
positive determination by the Under Secretary for Rural Development 
with respect to a rural-in-character petition, including such a 
petition submitted concurrently with the application of the partnership 
for a grant under this section.
    (e) One or more members of the Partnership must be located in the 
targeted region. The Partnership may consist of industry entities and 
other partners outside of the targeted region.


Sec.  4284.1113   Project eligibility.

    For a project to be eligible to receive a RISE grant under this 
subpart, the proposed project must meet the requirements specified in 
paragraphs (a) through (e) of this section. The applicant project 
outcome must accelerate the formation of new businesses with high-
growth potential, improve the ability of rural businesses and 
distressed rural communities to create high-wage jobs, and strengthen 
rural regional economies by engaging in

[[Page 31594]]

one or more of the following eligible uses:
    (a) The construction or purchase of a building to serve as an 
innovation center located in a rural low-income community which 
establishes and/or supports a jobs accelerator and any equipment needs 
of the innovation center to support the jobs accelerator;
    (b) Be for the support of programs to be carried out at or in 
direct partnership with the jobs accelerator or in support of jobs 
accelerator initiatives including one or more of the following:
    (1) Linking rural communities and entrepreneurs to markets, 
networks, industry clusters, and other regional opportunities to 
support high-wage job creation, new business formation, business 
expansion, and economic growth of rural communities;
    (2) Integrating rural small businesses into a supply chain;
    (3) Creating or expanding commercialization activities for new 
business formation in rural areas;
    (4) Identifying and building assets in rural communities that are 
crucial to supporting regional economies;
    (5) Facilitating the repatriations of high-wage jobs to the United 
States;
    (6) Supporting the deployment of innovative processes, 
technologies, and products;
    (7) Enhancing the capacity of rural small businesses in regional 
industry clusters, including small and disadvantaged businesses;
    (8) Increasing United States exports and business interaction with 
international buyers and suppliers;
    (9) Developing the skills and expertise of local workforces, 
entrepreneurs, and institutional partners in the region to meet the 
needs of employers and prepare workers for high-wage jobs in the 
identified industry clusters, including the upskilling of incumbent 
workers;
    (10) Ensuring rural communities have the capacity and ability to 
carry out projects relating to housing, community facilities, 
infrastructure, or community and economic development to support 
regional industry cluster growth;
    (11) Any activities that the Agency may determine to be 
appropriate, as specified in a Federal Register notice.
    (c) Not more than 10 percent of a RISE grant awarded under this 
section shall be used for indirect costs of the applicant associated 
with administering the RISE grant. The Agency may increase this 
percentage as a documented exception on a case by case basis.
    (d) The innovation center may be physically located in a rural area 
as defined in Sec.  4284.1103 or in a non-rural area; as long as 
assistance being provided is to residents located in a rural area. The 
innovation center must be located in a rural low-income community if 
grant funds are used for the construction or purchase of an innovation 
center.
    (e) The applicant is cautioned against taking any actions or 
incurring any obligations prior to the Agency completing the 
environmental review that would either limit the range of alternatives 
to be considered or that would have an adverse effect on the 
environment, such as the initiation of construction. If the applicant 
takes any such actions or incurs any such obligations, it could result 
in project ineligibility. Projects involving the construction of an 
innovation center as an eligible purpose are subject to the 
environmental requirements of 7 CFR part 1970.


Sec.  4284.1114  RISE grant funding.

    (a) Grant amounts. The amount of grant funds that will be made 
available to a Partnership under this subpart will not exceed 80 
percent of eligible project costs. The Federal share of the cost of any 
activity carried out using a grant under this section shall not be 
greater than 80 percent.
    (1) Minimum request. Unless otherwise specified in a Federal 
Register notice, the minimum request for a RISE grant application is 
$500,000.
    (2) Maximum request. Unless otherwise specified in a Federal 
Register notice, the maximum request for a RISE grant application is 
$2,000,000.
    (b) Matching funds. The applicant is responsible for securing the 
matching funds for total eligible project costs that are not covered by 
grant funds. The non-Federal share of the total eligible project costs 
of any activity carried out using a grant under this section may be in 
the form of third-party equity contributions including donations and 
in-kind contributions of fairly-valued goods or services.
    (c) Eligible project costs. Eligible project costs are only those 
costs incurred after a complete application has been received by the 
Agency and are associated with the items identified in paragraphs 
(c)(1) through (6) of this section. The applicant is responsible for 
any expenses incurred in developing its application. Each item 
identified in paragraphs (c)(1) through (6) of this section is only an 
eligible project cost if it is directly related to, and its use and 
purpose is limited to the RISE grant project. Any building or equipment 
purchased with grant proceeds must be owned and controlled by the lead 
applicant. The following is a list of eligible project costs:
    (1) Costs directly related to the purchase or construction of an 
innovation center;
    (2) Costs directly related to operations of an innovation center 
including purchase of equipment, office supplies, and administrative 
costs including salaries directly related to the project;
    (3) Costs directly associated with support programs to be carried 
out at or in direct partnership with job accelerators;
    (4) Reasonable and customary travel expenses directly related to 
job accelerators and at rates in compliance with 2 CFR 200.474;
    (5) Utility costs, operating expenses of the innovation center and 
job accelerator programs and associated programs;
    (6) Administrative costs of the grantee will not exceed 10% of the 
grant amount for the duration of the project.
    (d) Ineligible project costs. Ineligible project costs and uses of 
funds for RISE projects include, but are not limited to:
    (1) Costs associated with preparation of an application package 
under this notice;
    (2) Costs incurred prior to Agency receipt of a complete 
application for the grant request made under a funding notice;
    (3) Funding of any political or lobbying activities;
    (4) Payment for assistance to any private business enterprise which 
does not create and/or support jobs in a rural area of the United 
States;
    (5) Payment of any judgment or debt owed to the United States;
    (6) Duplicate current services or substitute support previously 
provided. If the current service is inadequate, however, grant funds 
may be used to expand the level of effort or services beyond what is 
currently being provided;
    (7) To fund a part of a project that is dependent on other funding 
unless there is a firm commitment of the other funding to ensure 
completion of the project;
    (8) Pass through grants; and
    (9) costs associated with hemp production, unless a hemp producer 
has a valid license issued from an approved State, Tribal or Federal 
plan as per Section 10113 of the Agriculture Improvement Act of 2018, 
Public Law 115-334 (verification of valid hemp licenses will occur at 
the time of award).


Sec.  4284.1115   RISE grant applications--content.

    (a) A potential applicant for RISE may submit a concept proposal 
not less than

[[Page 31595]]

60 days in advance of the application submittal deadline as published 
in the Federal Register for review by the Agency. This concept proposal 
will be evaluated, and an encouragement or discouragement letter will 
be issued to the potential applicant. If a discouragement letter is 
issued, it will detail any weaknesses evaluated in the Agency's review, 
though a complete application may still be submitted prior to the 
application deadline. The concept proposal may be up to 10 pages in 
length using a minimum of 11-point font. The concept proposal should be 
in a narrative format and must include the following:
    (1) Partnership information including the members and structure of 
the Partnership, the date formalized, and the governance or leadership 
board. The information will identify the lead applicant and each 
partner's ties to the region, their roles in the delivery of the RISE 
program and any history of previous collaboration between partners. The 
amount and source of anticipated matching funds will also be provided.
    (2) Describe the geographic region to be served including the total 
population, economic characteristics of the region such as unemployment 
rates and income levels. Industry sectors, their status, size and 
economic contribution to the region and all communities including 
metropolitan statistical areas and nonmetro low income communities 
within the region should be identified. The availability and planned 
enhancements of broadband service and other assets of the region should 
also be identified. If the region to be served has a population of more 
than 50,000 inhabitants, the applicant must document why they believe 
the area is ``rural in character'' including, but not limited to, the 
area's population density, demographics, and topography and how the 
local economy is tied to a rural economic base.
    (3) Identify the industry cluster(s) that will be prioritized by 
the Partnership with information on the firms and support industries in 
those clusters. Describe the status of the industry (as emerging, 
existing, or declining) any existing interconnection and networks 
within the industry cluster and describe participation and scale of 
small and disadvantaged businesses within the industry cluster. 
Describe the opportunities or potential of industry growth in the 
region and competitive advantages of the region and industry cluster 
should be highlighted along with opportunities within the industry for 
the creation of or upgrading to high-wage jobs.
    (4) An executive summary, project plan and scope of work must be 
provided with the applicant's strategy, activities, budget, goals and 
objectives for the use of RISE funds. The applicant should also provide 
information on the sustainability of the partnership and jobs 
accelerator at the conclusion of the RISE grant period.
    (b) Unless otherwise specified in a Federal Register notice, 
applicants may only submit one RISE grant application each Federal 
fiscal year.
    (1) The lead applicant must be registered in the System for Award 
Management (SAM) and is responsible for submitting a complete 
application as specified in (b)(2)(i) through (b)(2)(xiv) of this 
section.
    (2) There are no specific limitations on the number of pages or 
other formatting requirements of an application. Applicants, who 
submitted a concept proposal to the Agency, will not need to resubmit 
the information found in (b)(2)(ix) below. The Agency will review and 
retain this information for application submittal. A complete 
application will consist of the following components unless otherwise 
specified in a Federal Register notice:
    (i) Form SF-424, ``Application for Federal Assistance;''
    (ii) Form SF-424A, ``Budget Information--Non-Construction 
Programs,'' if applicable;
    (iii) Form SF-424C, ``Budget Information--Construction Programs,'' 
if applicable;
    (iv) Form SF-424D, ``Assurances--Construction Programs,'' if 
applicable;
    (v) RD Form 400-1, ``Equal Opportunity Agreement,'' for 
construction projects only;
    (vi) Identify the ethnicity, race, and gender characteristics of 
the lead applicant's leadership. This information is optional and is 
not a required component for a complete application;
    (vii) Certification that the lead applicant is a legal entity in 
good standing (as applicable) and operating in accordance with the laws 
of the State(s) or Tribe where the applicant exists;
    (viii) The lead applicant must identify whether or not the lead 
applicant has a known relationship or association with an Agency 
employee and, if there is a known relationship, the lead applicant must 
identify each Agency employee with whom the lead applicant has a known 
relationship;
    (ix) All items required in paragraph (a) of this section must be 
provided with the application (applicants must provide updates, as 
appropriate, to any items previously submitted as a concept proposal 
under paragraph (a));
    (x) Readiness demonstration, which shall be comprised of the 
following items:
    (A) Description of readiness of all partners of the Partnership to 
contribute to the project including their ability to coordinate 
activities, finances and outcomes of the project.
    (B) Evidence of a formal agreement among partners of the 
Partnership for delivery of the RISE program.
    (C) Evidence of demonstrated readiness in administering the RISE 
grant, if awarded, including demonstration of potential success in 
establishment of a jobs accelerator project, which targets an industry 
cluster and the initiatives of the RISE grant. The application should 
indicate when activities related to the expected outcomes will 
commence.
    (D) Description of how the project will be marketed in the region 
and how the Partnership will capture any program impacts and success 
stories; and
    (E) Timeline describing the proposed tasks to be accomplished and 
the schedule for implementation of each task.
    (xi) Provide documentation on how the RISE project will impact the 
initiatives below, as applicable, including a brief description of how 
and when the initiative will be delivered:
    (A) Linking rural communities and entrepreneurs to markets, 
networks, industry clusters, and other regional opportunities to 
support high-wage job creation, new business formation, business 
expansion, and economic growth;
    (B) Integrating small businesses into a supply chain;
    (C) Creating or expanding commercialization activities for new 
business formation;
    (D) Identifying and building assets in rural communities that are 
crucial to supporting regional economies;
    (E) Facilitating the repatriation of high-wage jobs to the United 
States;
    (F) Supporting the deployment of innovative processes, 
technologies, and products;
    (G) Enhancing the capacity of small businesses in regional industry 
clusters, including small and disadvantaged businesses;
    (H) Increasing United States exports and business interaction with 
international buyers and suppliers;
    (I) Developing the skills and expertise of local workforces, 
entrepreneurs, and institutional partners to meet the needs of 
employers and prepare workers for high-wage jobs in the identified 
industry clusters, including the upskilling of incumbent workers;

[[Page 31596]]

    (J) Ensuring rural communities have the capacity and ability to 
carry out projects related to housing, community facilities, 
infrastructure, or community and economic development to support 
regional industry cluster growth;
    (xii) Potential to produce high-wage jobs and benefit rural small 
and disadvantaged businesses, including a description of the following:
    (A) Describe how the project will develop the skills and expertise 
of the local workforce, entrepreneurs and institutional partners to 
meet the needs of employers and prepare high-wage jobs in the targeted 
industry cluster(s), which may also include the upskilling of incumbent 
worker;
    (B) Demonstrate how the project will benefit the skills and 
expertise of small and disadvantaged businesses, as applicable;
    (C) Demonstrate any participation of higher education, applied 
research institutions, workforce development entities and community-
based organizations, that are willing to partner with the project to 
provide workers with skills relevant to the industry cluster needs of 
the region, with an emphasis on the use of on-the-job training, 
classroom occupational training or incumbent worker training, as 
applicable; and
    (D) Demonstrate any participation of investment organizations, 
venture development organizations, venture capital firms, revolving 
loan funders, angel investment groups, community lenders, community 
development financial institutions, rural business investment 
companies, small business companies (as defined in Section 103 of the 
Small Business Investment Act of 1958 (15 U.S.C. 662)), philanthropic 
organizations, and other institutions focused on expanding access to 
capital, are committed partners in the job accelerator partnership and 
willing to potentially invest in projects emerging from the jobs 
accelerator.
    (xiii) Describe the targeted region, including the following 
information:
    (A) Provide the latest Census Bureau information on the targeted 
region's median household income.
    (B) Provide the latest Census Bureau information on the targeted 
region's educational attainment, specifically the percentage of the 
population who hold a bachelor's degree.
    (C) Discuss how any direct career training will be provided to 
existing residents of the region (existing residents being those 
persons who live in the region at the time of application submission).
    (D) Discuss any local support for the RISE project.
    (E) Discuss the entrepreneurial commitment to the RISE project.
    (F) Discuss any innovative processes and technologies to be 
utilized in the targeted industry cluster(s) of the RISE project.
    (G) Discuss the initial and continuing capital investment in the 
RISE project.
    (H) Discuss any demand for regional and global markets of the 
product and/or service provided by the targeted industry cluster.
    (I) Discuss if the region contains any areas or communities that 
qualify for federal initiatives.
    (J) Elaborate on the current broadband service within the region 
and any plans to leverage the current broadband service or enhance 
broadband service in the region through the RISE project.
    (xiv) Financial information, including the following:
    (A) Identification of matching funds and other sources of funds for 
the project. Provide written commitments for matching funds and other 
sources of funds at the time the application is submitted.
    (B) Current financial statements and a narrative description 
demonstrating financial feasibility and sustainability of the project, 
all of which demonstrate sufficient resources and expertise to 
undertake and complete the project and how the project will be 
sustained following completion.
    (c) Upon receipt of a complete application, the Agency will 
determine if the applicant and project are eligible and whether the 
intended outcomes described meet the requirements of the RISE program. 
If the application is ineligible or not feasible, the Agency will 
inform the applicant in writing of the reasons for the Agency's 
determination and no further evaluation of the application will occur.


Sec.  4284.1116   [Reserved]


Sec.  4284.1117   Scoring RISE grant applications.

    The Agency will score each complete and eligible RISE application 
using the criteria specified in paragraphs (a) through (g) of this 
section, unless otherwise specified in a Federal Register notice, with 
a maximum score of 100 points possible. Points will be allowed only for 
factors indicated by well documented, reasonable plans which, in the 
opinion of the Agency, provide assurance that the items have a high 
probability of being accomplished. Points shall be awarded at the 
discretion of the Agency to scoring criteria with a minimum and maximum 
number of points available. Applicants that demonstrate the experience 
or ability to deliver the stated criteria will be awarded higher points 
in that criteria.
    (a) Demonstrated readiness. The Partnership demonstrated readiness 
in administering the RISE grant successfully and shows strong 
documentation indicating the potential for success in establishing a 
jobs accelerator project which targets an industry cluster and the 
initiative(s) of the RISE grant program. Points are awarded on a scale 
of 0 to 10 with a maximum of 10 points being awarded.
    (b) Targeted initiatives. A maximum of 15 points will be awarded 
for this criterion based on meeting the targeted initiatives as stated 
in Sec.  4284.1115(b)(2)(xi) with action narratives outlined in the 
application on how and when the initiatives will be delivered. More 
points will be awarded for reasonable initiatives that can be delivered 
within 12 months of the grant award and for those projects leveraging 
improvements in high-speed broadband service to the region.
    (c) Project support. Points will be awarded for the strength of 
local support of the RISE project and entrepreneurial commitment. A 
maximum of 15 points can be awarded for application materials that 
indicate the strength of support for the RISE project. Points will be 
awarded from the partnership's demonstration of its sources of funding, 
personnel and technical resources committed to the project, and a focus 
on the inclusion of institutional partners expanding access to capital 
and willingness to potentially invest in projects emerging from the 
jobs accelerator. Points shall also be awarded for demonstrated 
resources that will sustain the project beyond the term of the RISE 
grant period.
    (d) Targeted region. A maximum of 20 points will be awarded for 
this criterion based on the region's demographics according to the 
latest census information. The applicant must provide adequate 
documentation to the latest census information to receive points.
    (1) If the targeted region has a median household income of:
    (i) 50% or less of state median household income; 5 points will be 
awarded;
    (ii) Over 50% and up to 80% of state median household income; 3 
points will be awarded.
    (2) If the targeted region residents have the educational 
attainment of a bachelor's degree by:
    (i) 10% or less of the population; 5 points will be awarded;
    (ii) Over 10% and up to 30% of the population; 3 points will be 
awarded.

[[Page 31597]]

    (3) Existing residents of the targeted region will receive direct 
career training for new employment or upscaling to a high-wage job; 5 
points will be awarded.
    (4) If the identified region has fewer than 50,000 residents 
according to the most recent decennial census; 5 points will be 
awarded.
    (e) RISE grant funds requested. A maximum of 10 points will be 
awarded for this criterion if:
    (1) The RISE grant request is for $500,000 to $750,000; 10 points 
will be awarded.
    (2) The RISE grant request is for over $750,000 and up to 
$1,000,000; 5 points will be awarded.
    (f) Regional impact. Points are awarded on a scale of 0 to 5 points 
for each category, with a total maximum of 20 points being awarded for 
this criterion. To receive points, the applicant must provide 
documentation to warrant strength on the following criteria, with 
points awarded for each:
    (1) Targeted industry(ies) in the region is classified as an 
emerging industry;
    (2) Applicant demonstrates that the targeted industry(ies) in the 
region hold a competitive advantage or will enhance their competitive 
advantage through the RISE project;
    (3) Applicant demonstrates that industry provides significant 
support of regional assets, including broadband, and provides community 
and economic development support within the region;
    (4) The RISE project's forecasted outcomes align with RISE 
objectives; and
    (5) The RISE project will target support to existing industry(ies), 
whose significance in the region may be stagnant or on the decline but 
can be enhanced through the benefits of the RISE project.
    (g) Administrator points. A maximum of 10 points will be awarded, 
with justification, at the discretion of the Agency Administrator, as 
announced in a Federal Register notice.


Sec.  4284.1118   Selecting RISE grant applications for award.

    Unless otherwise provided for in a Federal Register notice, RISE 
grant applications will be evaluated, assigned priority points as 
described in Sec.  4284.1117 and ranked from highest to lowest score 
for funding consideration, subject to the availability of funding.


Sec.  4284.1119   Awarding and Administering RISE Grants.

    The Agency will award and administer RISE grants in accordance with 
departmental regulations and with the procedures and requirements 
specified in this part.
    (a) Bonding and insurance. The applicant must provide satisfactory 
evidence to the Agency that all officers of the applicant organization 
are authorized to receive and/or disburse Federal funds and are covered 
by such bonding and/or insurance requirements as are normally required 
by the applicant.
    (b) Letter of conditions. A letter of conditions will be prepared 
by the Agency, establishing conditions that must be agreed to by the 
applicant before any obligation of funds can occur. Upon reviewing the 
conditions and requirements in the letter of conditions, the applicant 
must complete, sign, and return the Form RD 1942-46, ``Letter of Intent 
to Meet Conditions,'' and Form RD 1940-1, ``Request for Obligation of 
Funds,'' to the Agency if it accepts the conditions of the grant; or if 
certain conditions cannot be met, the applicant may propose alternate 
conditions in writing to the Agency. The Agency must resolve or concur 
with any changes proposed by the applicant to the letter of conditions 
before the application will be further processed.
    (c) Evidence of matching funds. The applicant is responsible for 
providing documentation that the required matching funds for the 
project have been received or remain committed at the date a financial 
assistance agreement is executed with the Agency.
    (d) SAM requirements. Each applicant applying for grant funds 
(unless an exception, as outlined in 2 CFR 25.110(a) through (d), is 
approved by the Agency) is required to:
    (1) Be registered in SAM before submitting its application;
    (2) Provide a valid unique entity identifier in its application; 
and
    (3) Continue to maintain an active SAM registration with current 
information at all times during which it has an active Federal award or 
an application or plan under consideration by a Federal awarding 
agency.
    (e) Financial assistance agreement. Once the requirements specified 
in paragraphs (a) through (d) of this section have been met, the 
financial assistance agreement can be executed by the lead applicant 
and the Agency. The applicant must abide by all requirements contained 
in the financial assistance agreement, this subpart, and any other 
applicable Federal statutes or regulations. Failure to follow these 
requirements might result in termination of the grant and adoption of 
other available remedies.
    (f) Grant approval. The lead applicant will be sent an executed 
copy of the executed Form RD 1940-1, ``Obligation of Funds,'' and the 
financial assistance agreement.


Sec.  4284.1120   Servicing RISE grants.

    The Agency will service RISE grants in accordance with the 
requirements specified in departmental regulations, the financial 
assistance agreement, 7 CFR part 1951, subparts E and O, other than 7 
CFR 1951.709(d)(1)(i)(B)(iv), and the requirements in Sec.  4284.1120, 
except as specified in paragraphs (a) through (d) of this section.
    (a) Inspections. Grantees must permit periodic inspection of the 
project records and operations by a representative of the Agency.
    (b) Programmatic changes. Grantees may make changes to an approved 
project's costs, scope, contractor, or vendor subject to the provisions 
specified in paragraphs (b)(1) through (3) of this section. If the 
changes result in lowering the project's score to below what would have 
qualified the application for an award, the Agency will not approve the 
changes.
    (1) Prior Agency approval. The grantee must obtain prior Agency 
approval for any change to the scope, contractor, or vendor of the 
approved project. Changes in project cost will require Agency approval 
as outlined in paragraph (b)(1)(iii) of this section.
    (i) Grantees must submit requests for programmatic changes in 
writing to the Agency for Agency approval.
    (ii) Failure to obtain prior Agency approval of any such change 
could result in such remedies as suspension, termination, and recovery 
of grant funds.
    (iii) Prior Agency approval is required for all increases in 
project costs. Prior Agency approval is required for a decrease in 
project cost only if the decrease would have a negative effect on the 
long-term viability of the project. A decrease in project cost that 
does not have a negative impact on long-term viability requires Agency 
notification prior to disbursement of funds. If project costs decrease, 
the Agency will reduce the grant amount, if necessary, to maintain a 
maximum grant amount of no greater than 80 percent of total project 
activities as required in Sec.  4284.1114(a).
    (2) Changes in project cost or scope. If there is a significant 
change in project cost or any change in project scope, then the 
grantee's funding needs, eligibility, and scoring, as applicable, will 
be reassessed. Any decreases in Agency funds will be based on revised 
project costs and other factors, including Agency regulations used at 
the time of grant approval.

[[Page 31598]]

    (3) Change of contractor or vendor. When seeking a change, the 
grantee must submit a written request to the Agency for approval. The 
proposed new contractor or vendor must have qualifications and 
experience acceptable to the Agency. The written request must contain 
sufficient information to demonstrate to the Agency's satisfaction that 
such change maintains project integrity. If the Agency determines that 
project integrity continues to be demonstrated, the grantee will be 
allowed to make the change. If the Agency determines that project 
integrity is no longer demonstrated, the change will not be approved 
and the grantee has the following options:
    (i) Continue with the original contractor or vendor;
    (ii) Find another contractor or vendor that has qualifications and 
experience acceptable to the Agency to complete the project; or
    (iii) Terminate the grant by providing a written request to the 
Agency. No additional funding will be available from the Agency if 
costs for the project have increased. Any Agency decision will be 
provided in writing to the lead applicant.
    (c) Transfer of Applicant or Ownership. Any change to the jobs 
accelerator partnership prior to the obligation of funds must be 
approved by the Agency and will only be considered if the partnership 
entities are eligible in accordance with Sec.  4284.1112. After the 
project is obligated and operational, the applicant grantee may 
request, in writing, a transfer of the financial assistance agreement 
to another entity. Subject to Agency approval provided in writing, the 
financial assistance agreement may be transferred to another entity 
provided:
    (1) The entity is determined by the Agency to be an eligible lead 
applicant entity under this subpart; and
    (2) The scope of the project for which the Agency funds will be 
used remain unchanged.
    (d) Disposition of acquired property. Grantees must abide by the 
disposition of acquired asset requirements as outlined in 2 CFR part 
200 and departmental regulations.
    (e) Financial management system and records. The grantee must 
provide for financial management systems and maintain records as 
specified in paragraphs (e)(1) and (2) of this section.
    (1) Financial management system. The grantee will provide for a 
financial system that will include:
    (i) Accurate, current, and complete disclosure of the financial 
results of each grant;
    (ii) Records that identify adequately the source and application of 
funds for grant-supporting activities, together with documentation to 
support the records. Those records must contain information pertaining 
to grant awards and authorizations, obligations, unobligated balances, 
assets, liabilities, outlays, and income; and
    (iii) Effective control over and accountability for all funds. The 
grantee must adequately safeguard all such assets and must ensure that 
funds are used solely for authorized purposes.
    (2) Records. The grantee will retain financial records, supporting 
documents, statistical records, and all other records pertinent to the 
grant for a period of at least three (3) years after completion of the 
grant period, except that the records must be retained beyond the 3-
year period if audit findings have not been resolved or if directed by 
the United States. The Agency and the Comptroller General of the United 
States, or any of their duly authorized representatives, must have 
access to any books, documents, papers, and records of the grantee that 
are pertinent to the specific grant for the purpose of making audit, 
examination, excerpts, and transcripts.
    (f) Audit requirements. If applicable, grantees must provide an 
annual audit in accordance with 2 CFR part 200, subpart F. The Agency 
may exercise its right to do a program audit after the end of the 
project to ensure that all funding supported eligible project costs.
    (g) Grant disbursement. The Agency will determine, based on the 
applicable departmental regulations, whether disbursement of a grant 
will be by advance or reimbursement. Any funds disbursed in advance of 
the expense shall be used within three months and the financial need 
substantiated in writing by the grantee. Form SF-270 or Form SF-271 
must be completed by the grantee and submitted to the Agency no more 
often than monthly to request either an advance or reimbursement of 
funds.
    (h) Reporting Requirements. Financial and project performance 
reports must be provided by grantees and contain the information 
specified in paragraphs (h) (1) and (2) of this section.
    (1) Federal Financial Reports. Between grant approval and 
completion of project (i.e., construction), SF-425, ``Federal Financial 
Report'' will be required of all grantees as applicable on a semiannual 
basis. The grantee will complete the project within the total sums 
available to it, including the grant, in accordance with the scope of 
work and any necessary modifications thereof prepared by grantee and 
approved by the Agency.
    (2) Performance reports. Grantees shall submit a performance report 
semi-annually for the first two years, and then annually thereafter, 
with the first report submitted no later than six months after 
receiving a grant under this section. This report will include, but not 
be limited to, the following:
    (i) All activities funded with the grant funds;
    (ii) Evaluation of progress towards strategic initiatives 
identified in the application for the grant, including a discussion of 
any issues which may have occurred;
    (iii) Measurement of progress using performance measures during the 
project period, which may include the following:
    (A) High-wage jobs created;
    (B) High-wage jobs retained;
    (C) Private investment leveraged;
    (D) Businesses improved;
    (E) Businesses retained;
    (F) New business formations;
    (G) New products, prototypes and/or services commercialized;
    (H) Improvement of the value of existing products or services under 
development;
    (I) Regional collaboration as measured by the number of 
organizations actively engaged in the industry cluster and/or the 
number of symposia held by the industry cluster, including 
organizations that are not located in the immediate region defined by 
the partnership and/or the number of further cooperative agreements;
    (J) Number of educations and training activities relating to the 
innovation;
    (K) Number of innovative products, services and/or prototypes 
launched;
    (L) Number of jobs relocated from outside of the United States to 
the region;
    (M) Amount and number of new equity investments in industry cluster 
firms;
    (N) Amount and number of new loans to industry cluster firms;
    (O) Dollar increase in exports resulting from the project 
activities;
    (P) Percentage of employees for which training was provided;
    (Q) Improvement in sales of participating businesses;
    (R) Improvement in wages paid at participating businesses;
    (S) Improvement in income of participating workers;
    (T) Any measure determined appropriate by the Agency; and
    (U) Broadband development in the targeted region.
    (iv) Initiatives and timetable established for the next reporting 
period; and

[[Page 31599]]

    (v) Any additional information as found in the annual Federal 
Register notice.


Sec. Sec.  4284.1121--4284.1130   [Reserved]


Sec.  4284.1131  OMB control number.

    The information collection requirements in this subpart are 
approved by the Office of Management and Budget (OMB) and assigned OMB 
control number 0570-0075.

Mark Brodziski,
Acting Administrator, Rural Business-Cooperative Service.
[FR Doc. 2021-12334 Filed 6-14-21; 8:45 am]
BILLING CODE 3410-XY-P