[Federal Register Volume 88, Number 19 (Monday, January 30, 2023)]
[Rules and Regulations]
[Pages 5724-5727]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-01621]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1740

[RUS-22-Telecom-0056]
RIN 0572-AC62


Rural eConnectivity Program

AGENCY: Rural Utilities Service, USDA.

ACTION: Final rule; request for comments.

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SUMMARY: The Rural Utilities Service (RUS), a Rural Development agency 
of the United States Department of Agriculture (USDA), hereinafter 
referred to as ``RUS'' or ``the Agency'', is issuing a final rule with 
comment. The intent of the final rule is to make updates to the Rural 
eConnectivity Program (ReConnect Program) regulation to ensure that 
requirements are clear, accurate as presented and in compliance with 
Federal reporting requirements.

DATES: 
    Effective date: This final rule is effective May 1, 2023.
    Comment date: Comments due on or before March 31, 2023.

ADDRESSES: You may submit comments, identified by docket number RUS-22-
Telecom-0056 and Regulatory Information Number (RIN) number 0572-AC62 
through https://www.regulations.gov.
    Instructions: All submissions received must include the Agency name 
and docket number or RIN for this rulemaking. All comments received 
will be posted without change to https://www.regulations.gov, including 
any personal information provided.
    Docket: For access to the docket to read background documents or 
comments received, go to https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: For general inquiries, contact Laurel 
Leverrier, Assistant Administrator Telecommunications Program, Rural 
Utilities Service, U.S. Department of Agriculture (USDA), email: 
[email protected], telephone: (202) 720-9556.

SUPPLEMENTARY INFORMATION:

I. Background

    Rural Development is a mission area within USDA comprising the RUS, 
the Rural Housing Service, and the Rural Business-Cooperative Service. 
Rural Development's mission is to increase economic opportunity and 
improve the quality of life for all rural Americans. Rural Development 
meets its mission by providing loans, loan guarantees, grants, and 
technical assistance through numerous programs aimed at creating and 
improving infrastructure, housing, and business throughout rural 
America. The RUS loan, loan guarantee, and grant programs act as a 
catalyst for economic and community development. By financing 
improvements to rural electric, water and waste, and telecommunications 
and broadband infrastructure, RUS also plays a significant role in 
improving other measures of quality of life in rural America, including 
public health and safety, environmental protection and culture and 
historic preservation.
    The ReConnect Program provides loans, grants, and loan/grant 
combinations to facilitate broadband deployment in rural areas. In 
facilitating the expansion of broadband services and infrastructure, 
the program will fuel long-term rural economic development and 
opportunities in rural America. The final rule to establish and codify 
requirements for the ReConnect Program was published in the Federal 
Register on February 26, 2021 (86 FR 11603).
    The intent of these proposed changes is to remove outdated 
requirements, ensure that the requirements in the regulation are clear, 
accurate as presented and in compliance with federal reporting 
requirements. These changes will help provide clarity for the 
applicants as they prepare their applications for the ReConnect 
Program.

II. Summary of Changes to the Rule

    The changes made to 7 CFR part 1740 include:

[[Page 5725]]

    1. The definition of non-funded service area (NFSA) was updated in 
Sec.  1740.2 to include telecommunications as well as broadband as a 
type of service. The program requires applicants to report revenues for 
all types of data, video, and/or voice services that are offered in the 
NFSA, so updating the definition should make it clearer that the 
revenues reported should be inclusive of all services.
    2. Several sections were updated to clarify that non-federal 
entities identified under 2 CFR part 200 should submit a single audit 
for the previous year from the date the application is submitted while 
other entities will be required to submit a comparative audit. The 
language, as currently presented, does not make it clear that non-
federal entities, as defined under 2 CFR part 200, that are subject to 
the Single Audit Act are only required to provide one year of audited 
financial statements during the years when they have received more than 
$750,000 in federal assistance. The sections updated to be clear of the 
application of the Single Audit Act include:
    (a) Sections 1740.10(a) and 1740.60(d)(12), which was redesignated 
as (c)(12), were updated to remove the word ``comparative.''
    (b) Section 1740.63 was updated to add a new paragraph (a)(1) and 
revisions were made to paragraph (a)(2).
    (c) Section 1740.80 was updated to add a new paragraph (b) and 
revisions were made to the redesignated paragraph (c).
    (3. Section 1740.46 was amended to update the title from ``Buy 
American Requirement'' to ``The Buy American preference and the Buy 
American requirement'' and to better clarify and explain the Buy 
American provision requirements of the Infrastructure Investment and 
Jobs Act.
    4. Section 1740.60 was updated to remove paragraph (b) as this 
information is now considered obsolete in response to the 
governmentwide initiative to transition to a unique entity identifier 
(UEI) in lieu of a Dun and Bradstreet number. Paragraph (c), 
redesignated as paragraph (b), was updated to add the UEI language and 
to remove the requirement to provide a CAGE code.
    5. Section 1740.60(d)(19), redesignated as (c)(19), was updated to 
make it clear that applicants must have Tribal consent from the 
appropriate Tribal official if services are proposed on or over Tribal 
Land.

III. Executive Orders and Acts

Executive Order 12866, Regulatory Impact Analysis

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

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule, as defined by 5 U.S.C. 804(2).

Executive Order 12988, Civil Justice Reform

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. The Agency has determined that this rule meets the 
applicable standards provided in section 3 of the Executive Order. In 
addition, all state and local laws and regulations that conflict with 
this rule will be preempted. No retroactive effect will be given to 
this rule.

Executive Order 12372, Intergovernmental Consultation

    This rule is excluded from the scope of Executive Order 12372, 
Intergovernmental Consultation, which may require a consultation with 
State and local officials. See the final rule related notice entitled, 
``Department Programs and Activities Excluded from Executive Order 
12372'' (50 FR 47034) advising that RUS loans and loan guarantees were 
not covered by Executive Order 12372.

Regulatory Flexibility Act Certification

    RUS certifies that this rule will not have a significant economic 
impact on a substantial number of small entities, as defined in the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The RUS 
telecommunications program provides loans to borrowers at interest 
rates and on terms that are more favorable than those generally 
available from the private sector. RUS borrowers, as a result of 
obtaining federal financing, receive economic benefits that exceed any 
direct economic costs associated with complying with RUS regulations 
and requirements.

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.

Assistance Listing Number (Formally Known as Catalog of Federal 
Domestic Assistance)

    The Assistance Listing number assigned to the Rural e-Connectivity 
Pilot Program is 10.752. The Assistance Listings are available on the 
internet at https://sam.gov/.

Unfunded Mandates

    This rule contains no federal mandates (under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995) for 
state, local, and tribal governments or the private sector. Therefore, 
this rule is not subject to the requirements of Sec.  202 and 205 of 
the Unfunded Mandates Reform Act of 1995.

E-Government Act Compliance

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

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 
rule impose substantial direct compliance costs on state and local 
governments. Therefore, consultation with the states is not required.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    The final rule published February 26, 2021 (86 FR 11603) was 
reviewed in accordance with the requirements of Executive Order 13175, 
``Consultation and Coordination with Indian Tribal Governments.'' 
Executive Order 13175 requires federal agencies to consult and 
coordinate with tribes on a government-

[[Page 5726]]

to-government basis on policies that have tribal implications, 
including regulations, legislative comments or proposed legislation, 
and other policy statements or actions that have substantial direct 
effects on one or more Indian tribes, on the relationship between the 
Federal Government and Indian tribes or on the distribution of power 
and responsibilities between the Federal Government and Indian tribes.
    The amendments in this final rule documenting Tribal support 
consent and support of proposed projects serving Tribal lands were 
informed and drafted based on direct feedback from Tribal leaders 
during Tribal consultation hosted by USDA's Office of Tribal Relations 
and Rural Development in 2021 and 2022. These changes have also been 
incorporated into recent ReConnect funding announcements and the same 
provisions are now included in this final rule for consistency. If 
Tribal leaders are interested in additional consultation with RUS on 
these amendments, they are encouraged to contact USDA's Office of 
Tribal Relations or Rural Development's Tribal Coordinator at: 
[email protected] to request such a consultation.

Civil Rights Impact Analysis

    Rural Development, a mission area for which RUS is an agency, 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. After review and analysis 
of the rule and available data, it has been determined that based on 
the analysis of the program purpose, application submission and 
eligibility criteria, issuance of this Final Rule is not likely to 
adversely or disproportionately impact very low, 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. No major 
civil rights impact is likely to result from this rule.

Information Collection and Recordkeeping Requirements

    The Information Collection and Recordkeeping requirements contained 
in this rule have been approved by OMB under OMB Control Number 0572-
0152. This final rule contains no new reporting or recording keeping 
requirements.

List of Subjects in 7 CFR Part 1740

    Broadband, Community development, Grant programs-communications, 
Loan programs--communications, Rural areas, Telecommunications.

    Accordingly, for reasons set forth in the preamble, 7 CFR part 1740 
is amended to read as follows:

PART 1740--RURAL ECONNECTIVITY PROGRAM

0
1. The authority citation for part 1740 continues to read as follows:

    Authority:  7 U.S.C. 1981(b)(4), 7 U.S.C. 901 et seq., 7 U.S.C. 
950aaa et seq., and 7 U.S.C. 950cc.

Subpart A--General

0
2. Amend Sec.  1740.2 by revising the definition of ``Non-funded 
service area (NFSA)'' to read as follows:


Sec.  1740.2  Definitions.

* * * * *
    Non-funded service area (NFSA) means any area in which the 
applicant offers telecommunication/broadband service, or intends to 
offer telecommunication/broadband service, during the forecast period, 
but which is not part of its Proposed Funded Service Area.
* * * * *

Subpart B--Eligibility Requirements

0
3. Amend Sec.  1740.10 by revising paragraph (a) to read as follows:


Sec.  1740.10  Eligible projects.

* * * * *
    (a) Submit a complete application and provide all supporting 
documentation including unqualified, audited financial statements from 
the date the application is submitted as detailed in Sec.  1740.63.
* * * * *

Subpart D--Award Terms

0
4. Revise Sec.  1740.46 to read as follows:


Sec.  1740.46  The Buy American preference and the Buy American 
requirement. (Amended)

    The domestic content preference under this Program applies 
differently to two classes of awardees: those that are defined as Non-
Federal Entities under 2 CFR 200.1 and those that are not.
    (a) Non-Federal Entity awardees. Funding to Non-Federal Entities, 
defined pursuant to 2 CFR 200.1 as any State, local government, Indian 
Tribe, Institution of Higher Education, or nonprofit organization, 
shall be governed by the requirements of section 70914 of the Build 
America, Buy America Act (BABA) within the Infrastructure Investment 
and Jobs Act (IIJA).
    (b) All other awardees. Awardees shall use in connection with the 
expenditure of loan and grant funds only such unmanufactured articles, 
materials, and supplies, as have been mined or produced in the United 
States or in any eligible country, and only such manufactured articles, 
materials, and supplies as have been manufactured in the United States 
or in any eligible country, substantially all from articles, materials, 
or supplies mined, produced, or manufactured, as the case may be, in 
the United States or in any eligible country. For purposes of this 
section, an ``eligible country'' is any country that applies with 
respect to the United States an agreement ensuring reciprocal access 
for United States products and services and United States suppliers to 
the markets of that country, as determined by the United States Trade 
Representative. The Buy American regulations may be found at, and any 
requests for waiver must be submitted pursuant to, 7 CFR part 1787.

Subpart E--Application Submission and Evaluation

0
5. Amend Sec.  1740.60 by:
0
a. Removing paragraph (b);
0
b. Redesignating paragraph (c) as paragraph (b) and revising newly 
redesignated paragraph (b);
0
c. Redesignating paragraph (d) as paragraph (c) and revising newly 
redesignated paragraph (c)(12) and the first sentence of newly 
redesignated paragraph (c)(19) introductory text; and
0
d. Redesignating paragraph (e) as paragraph (d).
    The revisions read as follows:


Sec.  1740.60  Elements of a complete application.

* * * * *
    (b) System for Award Management (SAM). Prior to submitting an 
application, the applicant must register in SAM and also obtain a 
unique entity identifier (UEI) as part of the registration process. 
Applicants can register and obtain the UEI at https://www.sam.gov/content/home. SAM registration must be active with current data at all 
times, from the application review throughout the active Federal award 
funding period. To maintain active SAM registration, the applicant must 
review and update the information in the SAM database annually from the 
date of initial registration or from the date of the last update or 
renewal. The applicant must ensure that the

[[Page 5727]]

information in the database is current, accurate, and complete. The UEI 
of the applicant must be included in the application.
    (c) * * *
    (12) Unqualified, audited financial statements from the date the 
application is submitted as detailed in Sec.  1740.63;
* * * * *
    (19) If service is being proposed on or over Tribal Land, a Tribal 
Government Resolution of Consent from the Tribal Council of the Tribal 
Government with jurisdiction over the Tribal Lands at issue must be 
provided to show that they are in support of the project and will allow 
construction to take place on Tribal Land. * * *
* * * * *

0
6. Amend Sec.  1740.63 by:
0
a. Redesignating paragraphs (a)(2) through (5) as paragraphs (a)(3) 
through ((6).
0
b. Redesignating paragraph (a)(1) as paragraph (a)(2);
0
c. Adding a new paragraph (a)(1); and
0
d. Revising the first sentence of newly redesignated paragraph (a)(2).
    The addition and revision read as follows:


Sec.  1740.63  Financial information.

    (a) * * *
    (1) Applicants subject to 2 CFR part 200 must submit an audited 
financial statement for the previous year from the date the application 
is submitted. If an application is submitted and the most recent year-
end audit has not been completed, the applicant can use the previous 
audit that has been completed.
    (2) Applicants not subject to 2 CFR part 200 must submit 
unqualified, comparative, audited financial statements for the previous 
year from the date the application is submitted. * * *
* * * * *

Subpart F--Closing, Servicing, and Reporting

0
7. Amend Sec.  1740.80 by:
0
c. Redesignating paragraphs (c) through (g) as paragraphs (d) through 
(h);
0
b. Redesignating paragraph (b) as paragraph (c);
0
a. Adding a new paragraph (b); and
0
d. Revising the first sentence of newly redesignated paragraph (c).
    The addition and revision read as follows:


Sec.  1740.80  Accounting, monitoring, and reporting requirements.

* * * * *
    (b) Awardees subject to 2 CFR part 200 must submit annual audited 
financial statements along with a report on compliance and on internal 
control over financial reporting, in accordance with 2 CFR part 200, 
subpart F.
    (c) Awardees not subject to 2 CFR part 200 must submit annual 
comparable audited financial statements along with a report on 
compliance and on internal control over financial reporting in 
accordance with the requirements of 7 CFR part 1773 using the RUS' 
online reporting system.
* * * * *

Andrew Berke,
Administrator, Rural Utilities Service, Rural Development.
[FR Doc. 2023-01621 Filed 1-27-23; 8:45 am]
BILLING CODE 3410-15-P