Economic Development Administration Regulatory Revision

DEPARTMENT OF COMMERCE

Economic Development Administration

13 CFR Parts 300, 301, 302, 303, 304, 305, 306, 307, 308, 310, 311, and 314

[Docket No.: 110726429-1418-01]

RIN 0610-AA66

Economic Development Administration Regulatory Revision

AGENCY:

Economic Development Administration, U.S. Department of Commerce.

ACTION:

Notice of proposed rulemaking; request for public comment.

SUMMARY:

Through this notice of proposed rulemaking (“

NPRM

”), the Economic Development Administration (“

EDA

”), U.S. Department of Commerce (“

DOC

”), proposes and requests comments on updates to the agency's regulations implementing the Public Works and Economic Development Act of 1965, as amended (“

PWEDA

”). On February 1, 2011, EDA published a notice requesting comments on improving the regulations. A 70-day public comment period followed from February 1, 2011 through April 11, 2011, during which EDA received approximately 170 comments. In addition, EDA conducted an internal review of its regulations. This NPRM addresses and incorporates public comments and agency staff suggestions to present an updated set of proposed regulations that reflects the agency's current practices and policies in administering its economic development assistance programs. For convenience, the full text of EDA's regulations as amended is available on EDA's Web site at

http://www.eda.gov/.

DATES:

Written comments on this NPRM must be received by EDA's Office of Chief Counsel no later than 5 p.m. Eastern Time on February 6, 2012.

ADDRESSES:

Comments on the NPRM may be submitted through any of the following methods:

•

Federal eRulemaking Portal: http://www.regulations.gov.

Follow the instructions for submitting comments.

•

Agency Web Site: http://www.eda.gov/.

EDA has created an online feature for submitting comments. Follow the instructions at

http://www.eda.gov/.

•

Mail:

Economic Development Administration, Office of Chief Counsel, Suite D-100, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230. Please indicate “Comments on EDA's regulations” and Docket No. 110726429-1418-01 on the envelope.

FOR FURTHER INFORMATION CONTACT:

Jamie Lipsey, Attorney Advisor, Office of Chief Counsel, Economic Development Administration, U.S. Department of Commerce, Room D-100, 1401 Constitution Avenue NW., Washingtonm, DC 20230; telephone: (202) 482-4687.

SUPPLEMENTARY INFORMATION:

Background

EDA leads the Federal economic development agenda by making strategic grants-based investments. EDA's regulations, codified at 13 CFR chapter III, provide the framework through which the agency administers its economic development assistance programs. EDA's programs are built on two key pillars: innovation and regional collaboration. Innovation—the process by which individuals and organizations generate new ideas and put them into practice—is the foundation of American economic growth and national competitiveness. Innovation is the key element to creating new and better jobs and a resilient economy. Regional collaboration also is essential; and Regions that work together to leverage resources and build upon their unique comparative assets are better poised for economic success. This strategic framework builds on EDA's successful history of helping rural and urban communities leverage their unique assets by providing “bottom up” investments in infrastructure, planning, and technical assistance that promote regional collaboration, innovation, and regional innovation clusters. EDA's investments are designed to spur innovation and investment at the local level, by providing the tools and the flexibility to build the effective public-private partnerships required for long-term success.

EDA currently is updating the agency's regulations to ensure they reflect and incentivize innovation and collaboration and is committed to ensuring that public feedback helps shape the revised regulations. On February 1, 2011, pursuant to Executive Order 13563 “Improving Regulation and Regulatory Review”, EDA published a notice in the

Federal Register

(76 FR 5501) requesting public comments on how the agency's regulations can better facilitate more effective economic development assistance programs that advance an innovative economy. Under the February 1, 2011 notice, comments were due no later than March 9, 2011; however, EDA published a second notice (76 FR 12616) on March 8, 2011 to extend the comment deadline until April 11, 2011, allowing for a total comment period of 70 days. EDA received approximately 170 public comments from approximately 71 commenters. In addition, EDA conducted an internal review of its regulations and received approximately 55 suggestions from agency staff.

EDA now publishes this NPRM to incorporate and respond to both public and agency staff comments and suggestions and to propose a revised set of regulations that reflects EDA's current practices and policies in administering its economic development assistance programs. For the most part, comments received express opinions on 13 CFR parts 300 through 307 and 314. Capitalized terms used but not otherwise defined in this NPRM have the meanings ascribed to them in EDA's current regulations (

see, e.g.,

§§ 300.3, 303.2, 307.8, 313.2, 314.1, and 315.2). For convenience, the full text of EDA's regulations as amended is available on EDA's Web site at

http://www.eda.gov/.

Overview of Comments Received and Proposed Changes

EDA's goal is to help communities and Regions transform their economies towards economic prosperity through innovation, entrepreneurship, and public-private partnerships. Since February 1, 2011, EDA has taken a critical and comprehensive look-back at its regulations to reduce burdens by removing outmoded provisions and streamlining and clarifying requirements. EDA requested both public and internal comments on the regulations and has received a number of helpful suggestions that the agency believes make sense and should be put into practice. Therefore, through this NPRM, EDA proposes intelligent and intuitive revisions to provide additional flexibilities to the agency's stakeholders and support current best practices, while protecting taxpayer dollars and the Federal Interest in EDA-assisted property. These changes are designed to provide greater flexibility and local control to EDA's Recipients and to make the regulations easier to navigate and apply.

As a result of the regulatory revision effort, EDA plans to substantially improve its regulations by removing outdated provisions; streamlining burdensome or unnecessary requirements; and including provisions that increase flexibility, encourage creative collaboration and the effective leveraging of resources, and clarify agency requirements. Regulatory

provisions EDA proposes to remove include:

• Outmoded and overly prescriptive membership requirements related to Comprehensive Economic Development Strategy (“

CEDS”

) Strategy Committees and District Organization governing bodies to help ensure EDA's requirements adapt effectively to the unique qualities of all communities and Regions.

See

proposed revisions to §§ 303.6(b)(1) and 304.2(c)(2).

• The requirement that a disaster-related application must be submitted within 18 months of the relevant disaster declaration to receive a 100 percent grant rate. Applications still must be submitted in an efficient, timely manner, but EDA proposes to remove the regulatory deadline to provide additional flexibility in appropriate situations.

See

proposed revisions to Table 2 in § 301.4(b)(5).

• The unnecessary requirement that an RLF Recipient request EDA to subordinate its interest when seeking EDA's approval to sell or securitize an RLF portfolio.

See

proposed revisions to § 307.19.

Ways the regulations have been streamlined include:

• Modernizing the CEDS requirements from a laundry-list of items to four essential planning elements. EDA will provide further content information to stakeholders through the publication of updated CEDS guidelines, which will be grounded in best practices and developed in collaboration with our economic development and research partners. We expect these changes to enhance local control and allow EDA's planning partners to focus on strategies, performance, and outputs.

See

proposed revisions to § 303.7(b).

• Streamlining and clarifying EDA's Property release requirements.

See

proposed revisions to § 314.10.

Flexibility

has been infused throughout the regulations in a number of ways, including:

• Providing that EDA may provide a grant rate of up to 80 percent to incentivize projects that encourage broad, innovative Regional planning.

See

proposed revisions to Table 2 in § 301.4(b)(5).

• Removing unnecessary restrictions on the RLF program to enhance operations in uncertain economic conditions.

See

proposed revisions to §§ 307.17(b)(6) and 307.18(a)(1).

• Setting out EDA's flexibilities with respect to subordinating the agency's interest in Project Property and updating EDA's Property regulations to help Recipients better take advantage of financing tools widely available in today's market—including New Markets Tax Credit (“

NMTC”

) arrangements. These provisions provide flexibilities while protecting the Federal Interest.

See

proposed revisions to § 314.6.

• Setting out EDA's authority to accept an instrument other than a recorded statement to protect the Federal Interest under certain circumstances.

See

proposed revisions to § 314.8.

We have included and enhanced provisions to

facilitate coordination

and the

leveraging of Federal investments

through:

• The updated evaluation criteria, which incentivize the leveraging of resources and collaboration among all levels of government and the public and private sectors.

See

proposed revisions to § 301.8.

• The description of Infrastructure at § 301.11, which provides that EDA, through appropriate Federal Funding Opportunity (“

FFO”

) announcements, will advance interagency collaboration by funding Projects that demonstrate the leveraging of Federal, State, and other resources.

• Providing that EDA may provide a grant rate of up to 80 percent to incentivize Projects that demonstrate effective leveraging of other Federal Agency resources.

See

proposed revisions to Table 2 in § 301.4(b)(5).

• Providing that RLF Recipients may use any Federal loan to meet private leveraging requirements.

See

proposed revisions to § 307.15(d).

This NPRM also proposes a number of

clarifications

, including:

• A definition of

Regional Innovation Clusters

or

RICs

to define this important economic development strategy. See proposed revisions to § 300.3.

• Examples of innovation- and entrepreneurship-related infrastructure under the proposed description of “Infrastructure” at § 301.11.

• A description of EDA's improved grant review and selection process.

See

proposed revisions to § 301.7.

• Updates to the data requirements that Eligible Applicants follow to demonstrate economic distress to better reflect the types and content of available data sources.

See

proposed revisions to § 301.3(a)(4).

• A revised accountability provision, which clarifies EDA's performance expectations and reporting requirements.

See

proposed revisions to § 302.16.

• Adding subparts to EDA's regulations at part 303 to clarify the distinctions between EDA's Planning investments and reorganizing the RLF regulations under part 307 so that all RLF requirements are easy to find under “Subpart B—Revolving Loan Fund Program.”

• Clarifying EDA's Property regulations and adding helpful headings to help stakeholders navigate them.

See

proposed revisions to §§ 314.3, 314.6, and 314.7.

Although this is not strictly a regulatory issue, EDA currently is examining ways to streamline and rationalize its application requirements. EDA expects that its new application requirements will help applicants focus on the competitiveness of their proposed strategies and reduce the cost of applying for EDA assistance, while maintaining accountability for taxpayer dollars.

The following is a thematic summary of most comments received in response to the February 1, 2011 request for comments. A more detailed analysis is provided below under “Part-by-Part Analysis of Comments Received and Proposed Changes.”

Regional Innovation Clusters and Innovation and Entrepreneurship-Related Infrastructure

EDA received five comments suggesting that EDA provide a definition for the phrase “regional innovation cluster,” which is an economic development technique designed to spark job creation and help communities and Regions become more competitive in the global economy. This NPRM adds a definition of “

Regional Innovation Clusters

or

RICs”

in EDA's set of regulatory definitions at § 300.3. In addition, EDA has emphasized the importance of using projects and techniques that advance effective innovation ecosystems in Regions throughout the U.S. and help communities support promising entrepreneurs and small businesses. EDA proposes a new regulation at § 301.11 to provide some examples of innovation- and entrepreneurship-related infrastructure Projects. Further, this NPRM proposes to specify reserved part 311 as a holding place for any regulations that may be necessary to implement the America COMPETES Reauthorization Act of 2010 (Pub. L. 111-358). Please see the sections below titled “Part 300—General Information” and “Part 301—Eligibility, Investment Rate and Application Requirements” for more detailed information.

EDA's Distress Criteria and Match Requirements

EDA received several comments suggesting that EDA reform its Investment Rate framework. EDA understands that communities and Regions face challenging economic

conditions; however, it is the agency's experience that the current Investment Rate determination structure encourages communities to collaborate and prioritize their needs and appropriately marshals resources to distressed Regions. By ensuring that communities have “skin in the game,” EDA's Investment Rate framework reinforces the need for local buy-in and participation, which improves economic development outcomes. In addition, the current structure provides EDA with needed flexibility to appropriately increase the EDA share based on Special Need and distress considerations. Therefore, EDA does not propose adjusting its Investment Rate framework through this NPRM. However, this NPRM does provide for an Investment Rate of up to 80 percent to encourage Projects that involve broad Regional planning and coordination and for Projects that effectively leverage other Federal resources. In addition, this NPRM contains a number of provisions designed to smooth connections between EDA and other Federal Agencies to ensure that stakeholders can effectively leverage Federal resources; including specifying that any Federal loan may meet an RLF's private leveraging requirements. Please see the sections below titled “Part 301—Eligibility, Investment Rate and Application Requirements” and “Part 307—Economic Adjustment Assistance Investments” for more information.

Comprehensive Economic Development Strategies, Economic Development Districts, and EDA's Planning Program

EDA received a number of comments on the regulations governing its Planning program, the requirements of CEDS, and Economic Development Districts (“

EDDs”

). Several comments suggest that EDA provide additional flexibilities with respect to the composition of CEDS Strategy Committees and District Organizations' governing bodies. EDA agrees and proposes revisions to §§ 303.6(b)(1) and 304.2(c)(2) to shift the focus from membership requirements to performance and outcomes, by maintaining the requirement that Strategy Committees and District Organization governing bodies represent the main economic interests of the Region, but no longer require a majority or membership threshold from any type of economic stakeholder. EDA proposes new language to clarify that these organizations must demonstrate the capacity to effectively undertake planning processes and implement strategies, as applicable. EDA expects that these changes will provide communities and Regions the flexibility to establish planning organizations that reflect and work most effectively for their unique make-up and priorities. In accord with best practices, EDA expects that the private sector will be strongly represented on both Strategy Committees and District Organization governing bodies.

Several comments suggest that EDA simplify and streamline the content requirements of CEDS. EDA agrees with the commenters and proposes changes to § 303.7(b) to remove the “laundry list” elements of CEDS and replace them with four essential planning elements. EDA will publish CEDS guidelines that incorporate best practice recommendations of EDA's planning and research partners.

Commenters suggest increased coordination with District Organizations in a variety of ways. Some commenters suggest that EDA ensure that all implementation projects are tied to the CEDS, while others request that EDA require coordination between Eligible Applicants and the relevant District Organization. EDA values its relationship with its stakeholders, but does not make these changes because of the requirements of PWEDA. Under sections 201(b)(3) and 209(b)(2) of PWEDA (42 U.S.C. 3141 and 3149, respectively), all grants awarded under EDA's Public Works and Economic Adjustment Assistance programs must be consistent with a relevant CEDS. PWEDA does not impose this requirement upon its other programs. EDA strongly encourages collaboration and coordination amongst District Organizations and other stakeholders, but EDA is not authorized to impose such requirements. Please see the sections below titled “Part 303—Planning Investments and Comprehensive Economic Development Strategies” and “Part 304—Economic Development Districts” for more information.

Revolving Loan Fund Program

EDA received numerous comments on the agency's revolving loan fund (“

RLF”

) program, several of which recommend that EDA set a time limit for releasing the Federal Interest in RLF grants. EDA understands that some RLF awards have been operating for a considerable length of time, some for as many as three decades, but EDA currently is not authorized to release its interest in RLF awards. EDA continues to work to achieve the necessary authorities. In addition, commenters opine that the RLF program reporting requirements are too burdensome. The semi-annual reporting requirement for the RLF program is in place to address an audit report by the DOC's Office of Inspector General (“

OIG”

), which recommended that EDA undertake more rigorous oversight of the RLF program to ensure the financial integrity and sustainability of the program. Because the reporting requirements are designed to address past program issues and ensure the viability and transparency of the program, EDA declines to make wholesale changes, but intends to continue to improve the Recipient reporting system to make it more user-friendly. In addition, six comments suggest the establishment of an RLF task force to address program issues and improve communications between EDA and program stakeholders. EDA currently is in the process of establishing an internal RLF task force and expects it to begin meeting in the very near future. Please see the section below titled “Part 307—Economic Adjustment Assistance Investments” for more information.

Property Management Updates

EDA received several comments that offered ways to make the agency's Property management regulations more flexible and adaptive to today's economy. For example, some commenters suggest that EDA should subordinate its interest when a Project warrants, require a lien only on the value of the Federal Interest, and make necessary changes to facilitate the agency's participation in Projects involving NMTC arrangements and other types of financing. EDA agrees, and proposes clarifying changes to its encumbrances regulation at § 314.6 to set out EDA's subordination flexibilities. EDA also amends its recorded statement requirement at § 314.8 to allow EDA to accept alternative instruments to protect the Federal Interest in certain situations. Please see the section below titled “Part 314—Property” for more information.

Non-Regulatory Comments

EDA received a number of comments related to agency policy and process rather than EDA's regulations. For instance, several comments opined on the agency's mission and direction, two of which request that EDA continue to fund traditional infrastructure. One commenter specifically notes that EDA should fund infrastructure to help smaller communities connect more effectively to telecommunications networks and electric grids. On the other hand, another comment suggests that EDA allocate more funding to “programs and services that create jobs and less on infrastructure.” Whether the scope of work of an EDA Investment

includes basic infrastructure, such as road upgrades, or business incubation technical assistance, EDA's goals remains the same: advancing the community's or Region's economic development strategy and building the capacity to create and retain jobs. EDA funds a variety of Projects to provide a broad portfolio of assistance through which Eligible Applicants can strategically meet their needs. Another comment encourages EDA to “consider the funding of operations for business incubator projects for the start-up phase.” EDA generally avoids funding operations for Projects that provide business incubation, acceleration, and similar services because the agency expects Projects to be self-sustaining. To this end, proposed application requirements for Projects to construct a business, technology, or other type of incubator or accelerator, as set out in § 301.10(d) of this NPRM, are designed to help EDA ensure that these Investments will continue creating jobs once the Project period expires. However, EDA may consider an application that proposes certain eligible business incubation activities performed by an Eligible Recipient.

We received one comment noting a disconnect between EDA's encouragement of “public-private partnerships” and the agency's regulatory framework that “makes it hard to fund a project where a private entity expects to earn a profit.” EDA acknowledges that private sector profit is essential to sustained economic growth and job creation; however, profit for a particular entity cannot be an objective under the terms of an EDA award. EDA's goal is not to replace private sector investment, but to spark economic development Projects that would not happen otherwise by leveraging private investment more efficiently. EDA believes the public and private sectors must work together to achieve vibrant Regional economies and encourages appropriate partnerships through its evaluation criteria, which are proposed in this NPRM at § 301.8. However, such partnerships must meet EDA's conflicts-of-interest requirements as set out at § 302.17. See the discussion under “Part 302—General Terms and Conditions for Investment Assistance” for more information.

EDA also received two comments stating that EDA's “[f]ield representatives in the states are absolutely necessary.” EDA agrees, and the agency's Economic Development Representatives (“

EDRs”

) serve every State.

EDA received several comments on its award approval process. One commenter suggests that the agency “[s]treamline submittal and reporting procedures for smaller grants ($100,000 or less).” EDA understands the commenter's concern; however, EDA is responsible for ensuring all requirements are met and for tracking performance on all of its awards, and so must require certain submittals and reports to ensure Federal funds are used efficiently and effectively. However, as noted above, EDA is reviewing its application requirements to reduce burdens and ensure efficiency for all Eligible Applicants. Two commenters suggest that “the amount of time it takes to get an EDA grant approved” is excessive. EDA recently undertook a comprehensive effort to improve the agency's award selection processes to shorten the amount of time between application and final award approval, while maintaining EDA's excellent customer service. The new award selection process that went into effect on October 14, 2010, greatly enhances transparency and competitiveness and significantly reduces the time it takes for EDA to evaluate an application. EDA now considers applications in quarterly funding cycles. Applications still are accepted on an ongoing basis, but instead of funding Projects on a piecemeal basis, EDA now competitively evaluates all applications received during a particular funding cycle. As a result, Eligible Applicants that submit a complete application by a funding cycle deadline are notified of EDA's selection decision within 20 business days of the deadline.

Please see

EDA's Web site at

http://www.eda.gov/PDF/Process%20Improvement%20Nov%204,%202010%20Webinar.pdf

for more information on EDA's new award selection process.

EDA received one comment stating that the new award approval process “worked” to make EDA's “programs more user friendly and efficient.” However, EDA received another comment requesting that EDA “return to the rolling submission of grant requests.” The commenter suggests that the new process “fails communities” that seek to attract new businesses and prospects because such prospects are “unwilling to wait until the next submittal deadline to decide if a community can provide adequate water pressure or sewer capacity.” EDA's new process is designed to speed up the approval process and provide Eligible Applicants with feedback earlier. Under the new process, EDA still accepts applications on a rolling basis and generally provides feedback on an application within 15 business days of application receipt. Although EDA makes awards on a quarterly basis, those awards are made much more efficiently. EDA believes that the new process provides Eligible Applicants and their stakeholders increased certainty, but welcomes additional comments.

The commenter also suggests that the new process “favors mega-projects that would succeed without EDA's assistance.” While the new process is designed to be competitive, EDA is committed to helping distressed communities flourish, and is not interested in assisting Projects that would succeed in any case. In fact, one criterion on which EDA evaluates every application is the extent to which it assists economically distressed and underserved communities. Two commenters state that “EDA should not depend solely on a strict standard application and point grading system.” While EDA's staff works hard with communities as they develop their applications, evaluating submitted applications in a standard manner is the only way to achieve objective, data-driven results. Two commenters suggest that “[r]estricting projects to those that are shovel ready [is] likely to eliminate promising projects in need of some extra funding to become a reality.” EDA is committed to providing its limited resources to distressed communities so they can spark job creation and positive economic change as efficiently as possible. Waiting on projects that are not yet ready for implementation would be a disservice to communities across the U.S. EDA works closely with communities as they develop projects that are ready for consideration.

EDA received five comments requesting that EDA provide “conditional grants of funding using written documentation that lists the conditions and timeframe for meeting requirements * * *.” Through the new award selection process, EDA attempts to strike a balance between cost efficiency and certainty for Eligible Applicants. Under the new process, an Eligible Applicant that submits an application sufficiently in advance of a funding cycle deadline receives an initial project analysis on the application's fit with EDA's priorities using the evaluation criteria set out in the relevant FFO and completeness, which lets the Eligible Applicant know what additional materials must be submitted before a funding cycle deadline. EDA cannot make a conditional award before a complete application is received because it is very difficult to competitively evaluate such applications. EDA strongly encourages Eligible Applicants to work with EDA

staff as early as possible to help ensure successful outcomes. In addition, as noted above, EDA is reviewing its application requirements to streamline them and ensure they are efficient and cost-effective for communities.

EDA received one comment suggesting that the “very rigid legal interpretation of scope of work compliance * * * be relaxed” as “frequently innovation efficiencies emerge after project work has begun, but these efficiencies, and the related potential for over delivering the project are not allowed because they were not specifically identified in the original project scope of work.” EDA understands that new efficiencies and synergies may emerge as a Project moves forward, and EDA staff work closely with Recipients to ensure that useful changes to a Project's scope of work can be implemented. However, EDA must be careful to maintain the competitiveness and transparency of its grant process and ensure that any proposed changes do not affect the nature and justification of the Project as originally proposed.

EDA received one comment requesting that EDA no longer use

www.grants.gov

for application submissions. Application submission through

www.grants.gov

is a requirement across the Federal government and is designed to reduce paperwork, while making the application process simpler and more efficient. Numerous improvements have been made to

www.grants.gov

over the past several years, which have greatly improved system performance.

One commenter suggests that “EDA consider establishing a state-by-state grant formula.” EDA is uniquely effective because the agency can encourage Regional collaboration across State borders and work directly with communities in implementing economic development plans. EDA works closely with its State partners, and State coordination is required under EDA's “Inter-governmental review of projects” regulation (§ 302.9). Therefore, EDA has not revised its regulations based on this comment.

EDA received several comments on post-award issues. One commenter suggests that EDA measure jobs created using a count of “pay checks to people * * * instead of the constant debate of what a job is and is not.” EDA will consider the comment in developing performance measures; however often EDA is constrained by government-wide guidance and requirements with respect to performance measures, including how to count jobs. The agency received five comments requesting that it no longer collect information for individual background screenings using Form CD-346 (

Applicant for Funding Assistance

). EDA is required to perform this due diligence step in accordance with DOC policy, which recently was changed to require Form CD-346 from additional types of Eligible Applicants. EDA apologizes for any inconvenience, but is not authorized to change the requirement.

We received one comment suggesting that EDA had imposed “arbitrary caps on [facilities and administrative] F&A reimbursement” creating “a[n] unsustainable financial burden for research institutions.” The commenter particularly cites EDA's FY 2010 i6 Challenge competition, which resulted in six Economic Adjustment Assistance Investments under part 307. EDA is uncertain of the precise circumstances behind the comment, but in general, if facilities and administrative costs (also referred to as indirect costs) are included in a project budget, EDA may accept the Eligible Applicant's approved “Facilities and Administrative Cost Rate Agreement.” Nonetheless, EDA is responsible for taxpayer dollars and ensuring that Projects generate effective economic impacts. Every EDA Project represents an important opportunity to create jobs and improve the quality of life in Regions across the U.S; therefore, EDA looks carefully at Project budgets to maximize the use of funds for direct program costs and EDA staff may work with Recipients to negotiate effective budgets. Also, note that under the University Center program, § 306.6(d) requires that 80 percent of EDA funding be allocated to direct costs of Program delivery.

One commenter suggests that “it is important [for stakeholders] to have more dialogue with senior officials within the EDA so they can hear from the field, in addition to the internal management teams.” The commenter goes on to tell of an experience with “a very well structured round table with the Assistant Secretary” that was coordinated by EDA's Philadelphia regional office, and comments that “more of these need to occur.” EDA believes that stakeholder input and feedback is invaluable. Forums that facilitate dialogue between EDA's senior management and economic development practitioners in the field, including face-to-face meetings, teleconferences, and webinars, are a high priority and EDA coordinates as many as possible. Over the past year, each region held a conference to share innovative ideas and best practices. We hope to continue to offer these conferences as a venue to bring together practitioners, EDA staff and leadership, and experts to continue the important dialogue about how to continue to improve our nation's economy. Senior management from both Headquarters and the regional offices frequently are out in the field gathering information and requesting feedback and ideas. We welcome additional suggestions for useful dialogue opportunities.

Part-by-Part Analysis of Comments Received and Proposed Changes

Specifically, this NPRM proposes the following revisions to EDA's regulations:

Part 300—General Information

Part 300 of the regulations states EDA's mission and highlights the policies and practices that EDA employs in order to attract private capital investments and new and better jobs to those Regions experiencing substantial and persistent economic distress. EDA seeks to help Regions become more competitive in an innovative economy. To facilitate these goals, this NPRM introduces several new terms and revises existing terms to assist readers in better understanding EDA's requirements and ensure clarity, consistency, and technical precision.

EDA proposes revising § 300.1, which introduces EDA and sets out the agency's mission, by inserting the term “new and better jobs” in place of the phrase “higher-skill, higher-wage jobs.” The current use of the phrase “higher-skill, higher-wage jobs” may cause confusion and suggest that EDA is only interested in “high tech” jobs or jobs that require particular skill sets. The phrase “new and better” is qualitative enough to adapt to all communities. EDA also revises § 300.2, which provides information on EDA's Headquarters and regional offices, to replace the address “14th Street and Constitution Avenue NW.” with the more precise address “1401 Constitution Avenue NW.” in § 300.2(a). This NPRM revises the first sentence of § 300.2(b) to replace the phrase “Web site” with the word “Web site” for consistency with EDA's current convention, the word “notice” with “applicable announcement” to provide greater clarity on the type of funding announcement that EDA issues, and the word “published” with “issued” to better describe how EDA makes such announcements public. In addition, we propose removing the word “annually,” as EDA may issue several funding announcements throughout the year.

This NPRM proposes several clarifying revisions to the “Definitions” section of EDA's regulations at § 300.3.

First, EDA proposes revising the definitions of “

Cooperative Agreement

” and “

Grant

” in § 300.3 to specify that EDA may administer a cooperative agreement or a grant under a statute other than PWEDA. In both definitions, EDA removes the phrase “under PWEDA” and replaces the phrase “the activities contemplated in an agreement between the parties” with the phrase “a purpose or activity authorized under PWEDA or another statute” to provide greater clarity and improve sentence structure.

EDA proposes a minor change to the definition of “

Eligible Recipient

” to delete an unnecessary reference to “of part 306.” We also propose revising the definition of “

Federal Funding Opportunity

” or “

FFO,

” by replacing the phrase “the notice EDA publishes annually” with the phrase “an announcement EDA publishes during the fiscal year,” as EDA may issue several funding announcement throughout the fiscal year. In addition, for clarity, EDA proposes revising the first sentence of the definition by replacing the phrase “Web site” with “Web site” and the word “describes” with “provides;” adding the word “funding” before the word “amounts;” replacing the phrase “particular application procedures” with the phrase “application and programmatic requirements;” and replacing the phrase “special circumstances and other relevant information concerning EDA's Investment programs for the year” with the phrase “special circumstances, and other information concerning a specific competitive solicitation for EDA's economic development assistance programs.” EDA also corrects a grammatical error in the second sentence of the definition by replacing the phrase “EDA may also” with “EDA also may.”

EDA proposes minor punctuation and capitalization corrections to the definition of “

Federally Declared Disaster

” to remove the hyphens between “Federally” and “Declared” and “Presidentially” and “Declared” and to capitalize “Federally.” We also propose revising the definition of “

Indian Tribe

” to replace the phrase “any Indian tribe, band, nation, pueblo, or other organized group or community, including * * *” with the phrase “an entity on the list of recognized tribes published pursuant to the Federally Recognized Indian Tribe List Act of 1994 (Pub. L. 103-454) (25 U.S.C. 479a

et seq.

), as amended, and* * * ” This revision does not affect EDA's relationship with Indian Tribes in any way, but provides greater clarity and ensures the regulation comports with the definitions of other Federal Agencies, including the U.S. Department of the Interior. In addition, we propose removing an unnecessary reference to “an EDA” from the definition of “

Investment

” or “

Investment Assistance.

” We also propose replacing “costs” with the singular “cost” in the definition of “

Investment Rate.

”

With respect to the definition of “

Local Share

” or “

Matching Share,

” we received one comment requesting that EDA “allow for Federal funds that are designated to local state agencies, to be considered as eligible matching funds for EDA funding.” EDA is working to address this issue by ensuring that Federal Agency resources can be leveraged efficiently and effectively, but is not authorized to allow all Federal funds provided to States to be used as Matching Share because of the requirements of appropriations law. All Federal funds are appropriated for particular purposes, as mandated by Congress and set out in the relevant authorizing statute, appropriation, or other Congressional statement of intent. For another Federal Agency's funds to be used to match an EDA award, there must be such a statement of Congressional intent. In some cases Congress has indicated that other Federal funds may be used to meet EDA's match requirement. For instance, currently one of the uses to which Community Development Block Grant (“

CDBG

”) funds provided by the U.S. Department of Housing and Urban Development “

HUD

” may be put is “payment of the non-Federal share required in connection with a Federal grant-in-aid program” undertaken as part of HUD's Community Development program.

See

42 U.S.C. 5305(a)(9). In addition, section 205 of PWEDA (42 U.S.C. 3145) authorizes EDA to supplement a grant awarded under another designated Federal program. EDA must determine that Federal funds may be used as match for another Federal grant each time funds from another Federal Agency are requested to be all or a portion of the Matching Share, including when the Federal funds are made available to a State.

In addition, we received three comments regarding costs that may be considered as Local Share or Matching Share. Two suggest that EDA consider certain pre-award costs “to verify eligibility for EDA funds” as a portion of the Matching Share and the third comment sets out the commenter's own experience in which the agency did not allowed a particular Recipient to use purchased property as Matching Share. All costs under an award are determined in accordance with relevant Federal cost principles, as set out in the following Office of Management and Budget (“

OMB

”) Circulars: Circular No. A-122 titled “Cost Principles for Nonprofit Organizations” (2 CFR part 230); Circular No. A-21 titled “Cost Principles for Education Institutions” (2 CFR part 220); and Circular No. A-87 titled “Cost Principles for State, Local and Indian Tribal Governments” (2 CFR part 225). EDA, in its sole discretion, may accept certain eligible costs, including pre-award costs and Recipient-provided property, as Matching Share or reimburse them consistent with the EDA-approved Investment Rate. For pre-award costs related to contracts for goods and services to be used as Matching Share, such contracts must have been procured in accordance with Federal competitive procurement requirements as set out at 15 CFR 14.43 or 24.36, as applicable. EDA is uncertain of the precise circumstances behind the comment with respect to property used as Matching Share, but we encourage all Eligible Applicants to work with EDA staff early in the application process to ensure costs are allowable. We propose non-substantive revisions to the definition of “

Local Share

” or “

Matching Share

” to replace plural references with singular ones for better sentence structure. Accordingly, we replace “Recipients” with “a Recipient,” “third parties” with “third party,” and “other Federal agencies” with “another Federal agency.”

In the definition of “

Presidentially Declared Disaster,

” we correct a punctuation error by removing the hyphen between “Presidentially” and “Declared.” With respect to the definition of “

PWEDA,

” we propose removing the unnecessary phrase “including the comprehensive amendments made by the Economic Development Reauthorization Act of 2004 (Pub. L. 108-373, 118 Stat. 1756).”

EDA proposes removing the definition of “

Private Sector Representative

” to reflect proposed changes to the membership requirements applicable to CEDS Strategy Committees and District Organization governing bodies. Under current § 303.6(a), a CEDS Strategy Committee must include Private Sector Representatives as a majority of its membership and under § 304.2(c)(2), the governing body of a District Organization must include at least one Private Sector Representative. Under this NPRM, EDA proposes removing CEDS Strategy Committee and District Organization governing body membership threshold requirements; and proposes instead to focus on

program processes and outputs. Because the defined term “

Private Sector Representative

” is used largely in the context of these membership threshold requirements, EDA proposes to remove the definition.

See also

the proposed changes to parts 303 and 304.

EDA corrects a grammatical error in the third sentence of the definition of “

Region

” or “

Regional

” by replacing the phrase “may also” with “also may.”

In response to five comments the agency received that support a definition of regional innovation cluster, this NPRM includes a definition of “

Regional Innovation Clusters

” or “

RICs

” after the definition of “

Regional Commission

” in § 300.3. One comment requests EDA to ensure that the definition does not exclude communities that may lack the resources to form a RIC from partnering with communities that do have that capacity. Another comment notes that EDA should “make sure [the] reader understands the vertical integration of the cluster and [that] it is not just a conglomerate of like [North American Industry Classification System] NAICS [codes].” Other comments express concern regarding the implications of RICs, including two that question how RICs will work as a strategy for isolated communities “where the nearest town could be 90 to 167 miles away” and in communities that “are not accessible by roads and lack many essential infrastructure and program needs.” In addition, two comments warn that “[r]egionalism and collaboration are two words espoused at most conferences, however, there is a real need to look at these concepts and adjust as needed for particular projects” and that “while `regionalism' is the buzz word * * * revitalization and progress must begin locally before it ever reaches a regional stage.” One commenter goes on to note, “government funds should not be awarded unless there are identifiable [benchmarks] to incorporate these concepts.” Another comment states that “EDA should be willing to fund existing programs that have successful track records just as much as new programs with promising projections.”

EDA thanks the commenters for their thoughtful responses and will endeavor to ensure the proposed definition of RICs addresses these concerns. EDA is striving to create a highly flexible and inclusive RIC framework that works for all types of Regions. EDA recognizes that RIC participants can and should have strategic partnerships outside of the RIC's geographic Region and the definition emphasizes that a RIC can cross jurisdictional boundaries. EDA's RIC-based programs are designed to increase the capacity of distressed communities to establish a RIC and take advantage of the resources of existing RICs. Also, EDA has tried to craft the definition to emphasize vertical integration while remaining flexible by defining RICs as “networks of similar, synergistic, or complementary entities” that “have active channels for business transactions and communication.” EDA believes RICs can be integral to successful economic development strategies for many communities and continues to develop performance measures and goals to help assess the impact of RICs and build a portfolio of best practices. Also, RICs are just one strategy amongst EDA's array of policy and program options that can be tailored to meet communities' needs. Through the RIC framework, EDA will work closely to articulate a strategy that incorporates the attributes and challenges of all types of communities, from densely populated to very rural. We invite additional constructive comments on ways to improve the definition.

Last, EDA proposes revising the definition of “

Trade Act

” to include a reference to the statutory citation for the Trade Adjustment Assistance for Communities program. Therefore, in the definition of Trade Act, the phrase “chapters 3 and 5” is revised to read as “chapters 3, 4, and 5.” Finally, EDA adds the phrase “for purposes of EDA,” to clarify that the definition of “

Trade Act

” is specific to EDA and its programs.

Part 301—Eligibility, Investment Rate and Application Requirements

Part 301 sets forth eligibility criteria, the maximum allowable Investment Rates, and application requirements common to all PWEDA-enumerated programs (excluding Community Trade Adjustment Assistance at part 313 and Trade Adjustment Assistance for Firms (“

TAAF

”) at part 315). In general, subpart A of part 301 presents an overview of EDA's eligibility requirements; subpart B addresses applicant eligibility; subpart C addresses Regional economic distress level requirements; subpart D sets forth maximum allowable Investment Rates and Matching Share requirements; and subpart E addresses application requirements, as well as the evaluation criteria used by EDA in selecting Projects. EDA revises the table of contents of part 301 to include a reference to new § 301.11—Infrastructure, which is described below.

We propose clarifying changes to § 301.1 to simplify the provision and ensure it better reflects EDA's application process. We remove the phrase “an applicant and the Project proposed by the applicant must satisfy each of” so that the provision's introductory text simply and clearly reads “In order to receive EDA Investment Assistance, the following requirements must be met.” In addition, to better reflect EDA's application selection process, we propose relocating the phrase “EDA must select the Eligible Applicant's Project” from § 301.1(d) to new § 301.1(f) and rephrase it slightly to read “EDA must select the Eligible Applicant's proposed Project.”

EDA received one comment on the agency's economic distress level requirements, which are set out at § 301.3. The commenter expresses concern that one of the economic distress criteria to demonstrate eligibility for EDA's Public Works and Economic Adjustment Assistance programs may disproportionately exclude rural communities where “smaller job loss numbers become huge in today's economy.” The commenter urges “EDA to consider lowering the dislocation job requirement.” The regulation at § 301.3 tracks the requirements of section 301 of PWEDA (42 U.S.C. 3161), which requires that a Project be located in a Region that meets one or more of the following economic distress criteria in order to be eligible for EDA assistance:

• An unemployment rate that is, for the most recent 24-month period for which data are available, one percentage point greater than the national unemployment rate;

• Per capita income that is, for the most recent period for which data are available, 80 percent or less of the national average per capita income; or

• A “Special Need,” as determined by EDA.

EDA does not have the authority to adjust these requirements, but recognizes the devastation that loss of a significant number of jobs has on a smaller community. If a Region does not meet the statistical economic distress criteria set out by PWEDA, EDA may be authorized to provide assistance through its Special Need criteria as defined at § 300.3, which provide the flexibility to address a variety of sudden and severe economic dislocations.

In response to an internal comment from EDA staff, EDA proposes changes to § 301.3(a)(4) to reduce confusion regarding data sources for demonstrating economic distress. The proposed text recognizes that the U.S. Census Bureau's American Community Survey (“

ACS

”), which is EDA's default data source for determining distress

levels, does not include 24-month unemployment data. For clarity, EDA proposes to insert the heading

Data requirements to demonstrate economic distress levels

to § 301.3(a)(4). For distress levels based on per capita income, the regulation provides that EDA still will base its determination on ACS data, and EDA proposes making the first sentence of § 301.3(a)(4)(i) specific to per capita income by removing the reference to “the unemployment rate or * * *” EDA also relocates the clause that currently concludes the first sentence of § 301.3(a)4)(i), which sets out the requirement that data correspond to the geographic area upon which the Eligible Applicant is basing eligibility, to be the final sentence of the provision. EDA appropriately rephrases the sentence to remove the unnecessary word “either” so that the sentence begins “The required data must be for the Region * * *” The remainder of the sentence remains unchanged. EDA proposes a second sentence specific to distress levels based upon the unemployment rate that reads “For economic distress levels based upon the unemployment rate, EDA will base its determination upon the most recent data published by the Bureau of Labor Statistics (“

BLS

”), within the U.S. Department of Labor.” EDA proposes revising the sentence of the provision that currently begins “Where a recent ACS is not available,” by replacing that introductory phrase with a clarifying introductory clause that reads “For eligibility based upon either per capita income requirements or the unemployment rate, when the ACS or BLS data, as applicable, are not the most recent Federal data available.” The remainder of the sentence remains unchanged.

In addition to the changes to § 301.3(a)(4), EDA makes a non-substantive change to § 301.3(a)(1) to remove the parentheses from around the phrase “or more.” For clarity and better sentence structure in § 301.3(a)(2), EDA replaces the phrase “economic distress criteria of paragraph (a)(1) of this section” with “economic distress criteria described in paragraph (a)(1) of this section” and the phrase “is also” with “also is.” This NPRM also proposes removing repetitive numerical references by replacing “twenty-four (24) month” with “24-month” and “one (1)” with “one” in § 301.3(a)(1)(i); replacing “eighty (80)” with “80” in § 301.3(a)(1)(ii); and replacing “one (1)” with “one” in § 301.3(c)(1).

EDA received 17 comments regarding the agency's Investment Rate requirements, which are set out at § 301.4 and provide the framework for the proportion of total Project costs EDA may provide. In general, § 301.4 provides that an Eligible Applicant may be eligible for a 50 percent grant rate. Applicants experiencing relatively higher levels of distress or that are subject to a Special Need may be eligible for a higher grant rate, up to 80 percent.

See

§ 300.3 for the definition of “

Special Need.

” Several comments express concern regarding the 50 percent Investment Rate and suggest additional flexibilities to establish higher rates, particularly for EDA's Planning awards and Projects in distressed communities. In addition, one internal comment suggests that EDA establish standard Investment Rates for certain Recipients of Planning awards; specifically 75 percent for District Organizations and 100 percent for Indian Tribes.

The general Investment Rate requirements in § 301.4(b)(1) implement section 204 of PWEDA (42 U.S.C. 3144), which requires a 50 percent baseline share plus an additional amount up to 80 percent “based on the relative needs of the area.” EDA is not authorized to set particular Investment Rates for Planning awards, but the agency is authorized to provide higher maximum Investment Rates for all types of awards based on a Region's distress level, as set out in Table 1 of § 301.4(b)(1)(ii). In addition, in accordance with Table 2 in § 301.4(b)(5), EDA may establish an Investment Rate of up to 100 percent for special Projects, including Projects of Indian Tribes.

Two commenters suggest that EDA restore “EDA's local match rate requirements to the pre-2005 levels” and two commenters support EDA's inclusion of “the revised Federal-local cost share provisions included in S. 2778 by the U.S. Senate Committee on Environment and Public Works during the 111th Congress.” EDA understands that communities and Regions face challenging economic conditions; however, it is the agency's experience that the current Investment Rate determination structure encourages communities to collaborate and prioritize their needs and appropriately marshals resources to distressed Regions. By ensuring that communities have “skin in the game,” EDA's Investment Rate framework reinforces the need for local buy-in and participation, which improves economic development outcomes. In addition, the current structure provides EDA with needed flexibility to appropriately increase the EDA share based on Special Need and distress considerations. Therefore, EDA does not propose adjusting its Investment Rate framework through this NPRM. However, this NPRM does provide additional flexibilities for higher Investment Rates, specifically, up to 80 percent to encourage Projects that involve broad Regional planning and coordination, and Projects that effectively leverage other Federal resources. Also, this NPRM contains a number of provisions designed to smooth connections between EDA and other Federal Agencies to ensure that stakeholders can effectively leverage Federal resources; including specifying that any Federal loan may meet an RLF's private leveraging requirements.

In response to an internal comment, EDA proposes syntax changes to § 301.4(b)(1), which sets out the general requirements with regards to Investment Rates, to clarify that EDA's grant rates generally must be determined in accordance with Table 1 of § 301.4(b)(1)(ii). EDA proposes splitting the initial sentence of the provision into two clearer sentences. In the first sentence of the provision, EDA replaces the phrase “shall, after the application of Table 1” with the phrase “shall be determined in accordance with Table 1.” EDA proposes ending the sentence at the word “subsection.” To begin the second sentence of the provision, EDA proposes adding the phrase “The maximum EDA investment rate shall” before the clause that begins with the phrase “not exceed the sum of.” In addition, EDA removes use of the variables (x) and (y) in the second sentence for clarity. These revisions do not change EDA's current practice and only clarify the regulation to reflect the requirements of PWEDA. In addition, EDA proposes removing the second sentence of § 301.4(b)(3)(iii), to allow the Assistant Secretary to delegate authority to grant a waiver of the requirement that for Planning Investments under part 303, the Investment Rate shall be the maximum allowable under Table 1 of § 301.4(b)(1)(ii). In addition, in § 301.4(c), EDA replaces the phrase “Federal Funding Opportunity notices” with “Federal Funding Opportunity announcements” for increased clarity.

Six comments suggest that EDA use its grant rates “to re-establish Federal incentives for regional collaboration of local governments and other related entities through the national network of Economic Development Districts.” Regional collaboration in planning and implementing economic development projects is a key indicator of success, and EDA agrees that such efforts should be incentivized. Therefore, EDA revises Table 2 of § 301.4(b)(5) to authorize an Investment Rate of up to 80 percent for

Projects that involve broad Regional planning and coordination with other entities outside the Eligible Applicant's political jurisdiction or area of authority, under special circumstances as determined by EDA. In general, to demonstrate broad Regional planning and coordination, Eligible Applicants must demonstrate costs necessary for such efforts that would not ordinarily have been incurred in the course of their usual planning and Project efforts; for example, new maps and analyses because of the expanded Regional coverage. Also, EDA proposes revising Table 2 to incentivize Projects that effectively leverage other Federal Agency resources with a maximum grant rate of up to 80 percent. Note that EDA also incentivizes broad Regional collaboration through its evaluation criteria as set out at § 301.8.

Two comments recommend that EDA waive match for FEMA-declared disasters. EDA agrees that maximum flexibility is necessary in disaster situations, and therefore also amends Table 2 of § 301.4(b)(5) to clarify that EDA may provide up to a 100 percent grant rate when “EDA receives appropriations under section 703 of PWEDA (42 U.S.C. 3233),” which authorizes disaster economic recovery activities. EDA proposes a second revision to remove a deadline that applies to disaster applications. Under the current regulation, to be eligible for a 100 percent grant rate, an application for a Project to address a Presidentially Declared Disaster must be submitted within 18 months of the disaster declaration. EDA believes that the 18 month requirement may be unduly restrictive, and revises the provision to provide that EDA may provide a maximum Investment Rate of 100 percent for “Projects to address and implement post-disaster economic recovery efforts in Presidentially Declared Disaster areas in a timely manner.” EDA expects that communities will respond to disasters expeditiously, and the phrase “in a timely manner” gives EDA the flexibility to set time limits appropriate to a disaster scenario.

This NPRM proposes removing repetitive numerical references throughout § 301.4 by replacing “Fifty (50)” with “50” and “thirty (30)” with “30” in § 301.4(b)(1); “one (1)” with “one” in § 301.4(b)(1)(ii); all instances of “twenty-four (24) month” with “24-month” and “1 percentage point ” with “one percentage point” in Table 1 in (b)(1)(ii); “eighty (80)” with “80” in § 301.4(b)(2); “fifty (50)” with “50” in § 301.4(b)(3)(i); “eighty (80)” with “80” in § 301.4(b)(3)(ii), and “one hundred (100)” with “100” in § 301.4(b)(4).

We propose clarifying revisions to § 301.6, which sets out the requirements for EDA to provide assistance to supplement another Federal grant, to correct capitalization errors in the section heading so that it reads “Supplementary Investment Assistance” instead of “Supplementary investment assistance.” We also revise the beginning of the first sentence of § 301.6(a) to read “Pursuant to a request made by an Eligible Applicant, EDA Investment Assistance may supplement a grant” instead of “Pursuant to a request by an Eligible Applicant, EDA Investment Assistance may supplement grants” and replace the phrase “any Federal grant program” with “a Federal grant program” in the second sentence. We also revise the beginning of the first sentence of § 301.6(b) to read “For a Project that meets the economic distress criteria provided in § 301.3(a)” instead of “For Projects located in Regions meeting the criteria of § 301.3(a)” and remove the unnecessary reference to “EDA” immediately before the phrase “Investment Assistance.” For clarity, in the second sentence of § 301.6(b), we replace the phrase “the combination of EDA Investment and other Federal funds” with the phrase “the EDA Investment and other Federal funds together” and insert the word “that” after provided.

This NPRM revises and reformats § 301.7(a) for clarity and to reflect EDA's improved grant-making process under the agency's Public Works and Economic Adjustment Assistance programs, which is designed to provide greater transparency and faster feedback to Eligible Applicants. EDA continues to accept applications on a continuing basis, but in general competitively evaluates all applications received in quarterly funding cycles. Note that in cases of extremely urgent distress, EDA may evaluate and select an award outside of the usual funding cycles. Also, applications under EDA's Planning, Local Technical Assistance, University Center, and Research and Evaluation programs are not subject to the funding cycle deadlines. Therefore, EDA proposes revising the first sentence of the provision by removing the second use of the phrase “Investment Assistance” immediately preceding “application,” as it is unnecessary. EDA clarifies the second sentence of § 301.7(a) to specify that EDA's application, Form ED-900, is available electronically from

www.grants.gov

instead of on EDA's Web site. In addition, we revise the third sentence of the provision to add the introductory phrase “In general;” remove the words “competitive and” immediately before “continuing;” and replace the concluding phrase “to respond to market forces in Regional economies” with the clause “and competitively evaluates all applications received in quarterly funding cycles throughout the fiscal year.” For better sentence structure and to reduce confusion, we propose revising the fourth sentence of the provision so that it reads “Subject to the availability of funds, the timing in which EDA receives complete and competitive applications affects EDA's ability to participate in a given Project,” instead of “The timing with which competitive investment opportunities arise, as determined by the criteria set forth in § 301.8, paired with the availability of funds in a given fiscal year, will affect EDA's ability to participate in any given Project.” In the fifth sentence of the provision, EDA replaces the phrase “using the criteria set forth in § 301.8” with the phrase “in accord with the criteria set forth in the applicable FFO and in § 301.8” to clarify that a published FFO may contain specific evaluation criteria. In addition, in § 301.7(a)(1), EDA replaces the phrase “upon corrections” with “after corrections are made” for better sentence structure.

EDA revises § 301.8 to set out EDA's updated evaluation criteria. As set out in § 301.8(a) through (f), EDA will evaluate applications on the extent to which they:

• Ensure collaborative Regional innovation;

• Leverage public-private partnerships;

• Advance national strategic priorities;

• Enhance global competitiveness;

• Encourage environmentally sustainable development; and

• Support economically distressed and underserved communities.

EDA also proposes minor changes within the introductory text to § 301.8 to replace the phrase “EDA statutory and regulatory requirements” with “EDA's statutory and regulatory requirements” in the first sentence of the provision; replace “applicant” with “Eligible Applicant” in the second sentence; and add the introductory clause “In addition to criteria set out in the applicable FFO” and replace “one (1)” with “one” in the third sentence.

EDA received eight comments regarding the evaluation criteria. One comment requests “that EDA establish preferential selection criteria recognizing communities that are impacted by Defense Department actions such as base realignment and

closure (BRAC), specifically base closure and mission growth.” EDA does not enumerate this as an evaluation criterion because Projects involving communities impacted by military base closures or realignments, as well as defense contractor reductions-in-force and U.S. Department of Energy defense-related funding reductions, are considered under EDA's Special Need criterion for eligibility.

See also

the definition of “

Special Need

” as set out in § 300.3 and the distress requirements of § 301.3(a). The evaluation criteria are geared towards selecting applications that best demonstrate the ability to help the impacted community grow the local economy effectively, create new and better jobs, and coherently engage local partners.

A second comment suggests that EDA's evaluation criteria “should favor awards to regions with developing clusters that need help rather than rewarding established clusters that will continue to grow on their own.” EDA's proposed evaluation criteria incentivize RICs, and the agency's programs are designed to assist distressed communities; therefore, EDA anticipates helping Regions nurture developing clusters. Depending on the unique circumstances facing a Region, leveraging an established cluster may be the most effective strategy to aid a distressed Region. Another commenter requests that EDA not so heavily favor distressed communities in order to allow healthier communities to access its grant assistance. EDA's mission is to help distressed communities become competitive, productive, and strong; and Congress mandates that appropriated funds meet those goals. EDA encourages healthy communities to mentor and share best practices with distressed communities to help develop robust Regional economies across the U.S. In addition, EDA's Research and National Technical Assistance programs provide tools and resources that all types of communities are encouraged to access.

See http://www.eda.gov/Research/Research.xml

for more information.

Two comments suggest that EDA support sustainable development through “grant guidelines that reward communities for sustainable development strategies such as locating new development on previously developed land or close to existing activity centers and near transportation choices” and ensure that the agency's rules and regulations do not contribute to development sprawl. EDA encourages such Projects through the evaluation criterion (set out at § 301.8(e)) that highlights environmentally sustainable development, and an application that includes elements of place-based development may meet EDA's “sustainable development” evaluation criterion. EDA strongly encourages Projects that enhance the environment and advance economic development goals and welcomes comments that offer specific ways the agency can incentivize sustainable development practices.

Another commenter suggests that “EDA consider evaluating * * * projects * * * on the extent to which they engage the full spectrum of key participants,” and illustrates the point by citing research on the creation of innovation networks. EDA realizes that having the right stakeholders at the table is crucial to a coordinated, efficient economic development program, and through its evaluation criteria set out at § 301.8, EDA encourages collaborative Regional innovation and public-private partnerships. In addition, through the agency's initiatives to encourage commercialization and technology transfer, including the i6 Challenge competitions, EDA encourages partnerships that engage the full spectrum of necessary stakeholders, from research and development to marketing and commercialization.

Two comments suggest that EDA should not focus on Projects with indicia of success (i.e., high matching levels, clear leadership, etc.) to avoid “funding projects that do not need government assistance.” One of the commenters notes that “EDA should continue to make sure that projects have sound business plans for sustainability, but rural projects should not be held to the same economic thresholds for economic benefit because they do not have the population base and economy to support rural projects as urban projects do.” EDA is accountable for Federal funds, and to ensure that they go the furthest and provide the most benefit, EDA does assess the feasibility and job creation potential of Projects. However, EDA is sensitive to the unique economic condition of individual communities and Regions. While EDA ensures that Recipients are accountable for individual Project goals, EDA does not require any particular output or benefit threshold, and seeks to incentivize results that work for and are proportionate to each community.

See also

EDA's revised accountability provision at § 302.16.

EDA received one overarching comment requesting that the agency adopt and announce specific award and match amounts, eligible areas, and project types. PWEDA and the agency's implementing regulations provide an adaptable framework within which EDA helps communities assess their present economic environment, envision their future goals and develop economic development plans accordingly, and deploy resources appropriate to effect those plans. EDA's assistance also allows Regions to adapt to changing economic landscapes and needs. Adopting specific requirements would stymie EDA from meeting the current needs of distressed Regions and helping to implement the most effective economic development strategies. Therefore, EDA declines to make this change.

This NPRM proposes to amend § 301.9 to remove the phrase “for further consideration” in paragraph (a), which relates to a concept specific to EDA's application selection process that was in place prior to October 14, 2010. In addition, EDA proposes minor changes to replace the phrase “based on” with “in accord with” in § 301.9(a)(2) and rephrase § 301.9(b) to read “EDA will endeavor to notify applicants as soon as practicable regarding whether their applications are selected for funding” instead of “EDA will endeavor to notify applicants regarding whether their applications are selected as soon as practicable.”

EDA proposes removing the word “construction” from the first sentence of § 301.10(c). The use of “construction” is confusing as CEDS are required for all Projects under parts 305 and 307, including non-construction implementation Projects under part 307. Note that a CEDS is not a requirement for Strategy Grant Projects and a Project located in a Special Impact Area, as specified under § 301.10(c)(1) and (2). In addition, we propose minor changes to capitalize “Federal” in § 301.10(b) to adhere to the capitalization convention of the regulations, replace the word “of” with the phrase “stated in” in the third sentence of § 301.10(c), and replace “Projects” with “A Project” in § 301.10(c)(2). In response to an internal comment from EDA staff, EDA proposes amending § 301.10 by adding new paragraph (d) to clarify the application requirements for the construction of business, technology, or other types of incubators or accelerators. Because these types of construction Investments are designed to catalyze growth in innovative sectors, EDA proposes requiring a feasibility study to evaluate the need for the Project and an operational plan based on industry best practices to ensure the Project's longevity. EDA will provide additional information on these requirements in an applicable FFO. The information provided by such documents is crucial in helping EDA ensure that Federal

funds are put to their best use. The third sentence of new § 301.10(d) also provides that EDA may require a Recipient to demonstrate that a feasibility study has been conducted by an impartial third party, as determined by EDA.

This NPRM also adds a new section at § 301.11 to clarify that EDA funds a broad spectrum of construction and non-construction infrastructure to meet a community's strategic goals, from basic assets to innovation- and entrepreneurship-related infrastructure. Each EDA Investment is designed to meet a community where it is and help it reach its highest economic development potential. Paragraph (a) of the proposed provision provides some examples of innovation- and entrepreneurship-related infrastructure, including business incubation, business acceleration, venture development organizations, proof of concept centers, and technology transfer. Before this NPRM, these terms had not been delineated within the framework of EDA's regulations. Paragraph (b) of the proposed provision provides that EDA will seek to fund Projects that effectively leverage Federal resources and restates EDA's statutory restriction on providing funds to any for-profit entity. Proposed § 301.11 is intended to help clarify these terms and is not intended to be restrictive or exclusive.

Part 302—General Terms and Conditions for Investment Assistance

Part 302 sets forth the general terms and conditions for EDA Investment Assistance, including environmental reviews of Projects; relocation assistance and land acquisition requirements; inter-governmental review of Projects; and Recipients' reporting, recordkeeping, post-approval, and civil rights requirements.

EDA proposes a minor change to the third sentence of § 302.1 to clarify that environmental information may be obtained from the individual serving as the Environmental Officer in the appropriate regional office. EDA also capitalizes “Project” in the second sentence, and replaces the word “can” with “may” and removes “as” immediately before “listed” in the third sentence. We propose small changes to § 302.3 to replace the word “any” with “an” immediately preceding the phrase “EDA-administered program” in the first sentence of the provision and to remove the unnecessary phrase “but is not limited to” in the second sentence. We also propose removing the unnecessary phrases “but not limited to” from §§ 302.6 and 302.8. In addition, the agency proposes non-substantive changes to § 302.9(a), which sets out the requirements for inter-governmental reviews of Projects, to replace “fifteen (15)” with “15” in the first sentence of the provision and “Eligible Applicants” with “the Eligible Applicant” and “their” with “its” in the second sentence of the provision. In addition, EDA proposes to make the regulation easier to read by separately listing the documentation required when a Recipient either does or does not receive comments from an Authority as subsections (1) and (2) under paragraph (a). In § 302.9(b), EDA makes a grammatical correction by replacing the phrase “must also” with “also must.” EDA also proposes a minor change by replacing the phrase “Web site” with “website” in § 302.11.

This NPRM also proposes updating § 302.10, which implements section 606 of PWEDA (42 U.S.C. 3216) and sets out requirements regarding entities that expedite applications to EDA and restrictions on the employment of certain EDA employees by Eligible Applicants. Section 606(2) of PWEDA (42 U.S.C. 3216) sets out a post-employment restriction that requires “businesses” to refrain from offering employment to or employing certain EDA employees for a period of two years after an award of Investment Assistance. The purpose of the post-employment restriction is to prevent situations in which an Eligible Applicant uses or appears to use its employment practices to influence EDA and DOC employees with award decision-making authority. EDA recently made a policy decision to provide greater flexibility in the application of the post-employment restriction, specifically addressing Eligible Applicants where there is a greater chance of such undue influence. In general, such Eligible Applicants are smaller organizations or organizations that lack standard hiring procedures. Therefore, in the context of the post-employment restriction, EDA has determined that “businesses” means Eligible Applicants that are: (1) Non-profit organizations; (2) District Organizations of an EDA-designated EDD; and (3) for-profit organizations. In addition, EDA retains the flexibility to require another type of Eligible Applicant to execute an agreement to abide by the above-described post-employment restriction on a case-by-case basis; for example when an institution of higher education implements the EDA scope of work or activities related to the EDA scope of work through a separate non-profit organization.

EDA proposes revising § 302.10 to reflect its updated policies. Currently, both the expediter requirements and post-employment restriction are combined in § 302.10. EDA proposes to restructure the regulation so that § 302.10(a) incorporates the expediter requirements, which remain substantively unchanged, and § 302.10(b) incorporates the updated post-employment restriction. Accordingly, EDA revise the heading of § 302.10 to read “Attorneys' and consultants' fees, employment of expediters, and post-employment restriction” instead of “Attorneys' and consultants' fees; employment of expediters and administrative employees,” adds the heading

Employment of expediters

to revised § 302.10(a), and the heading

Post-employment restriction

to revised § 302.10(b). EDA makes minor clarifying corrections, replacing two instances of the word “applications” with “an application” or “the application,” as applicable, in the second sentence of proposed § 302.10(a) and removing two repetitive numerical references from proposed § 302.10(b), replacing “two-year (2)” with “two-year” and “one-year (1)” with “one-year.”

EDA received two comments requesting that EDA relax or waive the wage rate requirements of the Davis-Bacon Act (40 U.S.C. 3142

et seq.

), which apply to contractors and subcontractors performing on Federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works. The Davis-Bacon Act requires contractors and subcontractors to pay any laborers and mechanics employed under the contract (or subcontract) no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area. Section 602 of PWEDA (42 U.S.C. 3212) provides that Davis-Bacon applies to all “projects assisted by the Secretary under this Act.” Therefore, EDA cannot waive the wage rate requirements. Accordingly, the regulation at § 302.13 implements the Davis-Bacon requirement. EDA provides guidance and works closely with Recipients to ensure that the Davis-Bacon requirements and responsibilities are clear under the terms of an award of financial assistance.

This NPRM makes a clarifying revision to the heading of § 302.15 by inserting the word “made” immediately after the word “certifications.” This NPRM revises § 302.16 to set out EDA's accountability and performance expectations, along with its reporting

requirements. Accordingly, EDA revises the heading of the provision to read “Accountability” instead of “Reports by Recipients.” EDA also adds new paragraph (d) to clarify that EDA expects Recipients to use good faith efforts to meet Project goals and set out the consequences for failure to undertake such efforts. This provision is not punitive and is not intended to discourage accurate reporting; EDA understands that at times, circumstances beyond a Recipient's control will prevent the fulfillment of Project goals. Its purpose is to underscore the importance that a Recipient undertake the Project scope of work in good faith and with integrity. EDA works closely with its partners to make sure they have the tools and resources necessary to achieve the best economic outcomes possible. Also, EDA adds paragraph headings to § 302.16 to help the reader navigate the provision; specifically adding the header

General

to paragraph (a);

Data on Project effectiveness

to paragraph (b);

Reporting Project service benefits

to paragraph (c); and

Consequences for failure to undertake good faith efforts

to new paragraph (d). We propose removing a repetitive numerical reference in paragraph (a) by replacing “ten (10)” with “ten.” In the first sentence of paragraph (b) of the provision, EDA proposes adding the phrase “and meeting Project goals” immediately following the phrase “including alleviation of economic distress” with the parenthetical, inserting “as amended” following the reference to the Government Performance and Results Act of 1993 (“

GPRA

”), and adding a citation for the GPRA, specifically, Public Law 103-62.

EDA received three comments on the agency's conflicts-of-interest requirements, which are set out at § 302.17. Under EDA's policy, Eligible Applicants must avoid the appearance of or actual conflicts-of-interest, which generally exist when an Interested Party of a Recipient participates in a matter that has a direct and predictable effect on the Interested Party's personal or financial interests. EDA defines “

Interested Party

” as “any officer, employee or member of the board of directors or other governing board of the Recipient, including any other parties that advise, approve, recommend or otherwise participate in the business decisions of the Recipient, such as agents, advisors, consultants, attorneys, accountants or shareholders. An Interested Party also includes the Interested Party's Immediate Family and other persons directly connected to the Interested Party by law or through a business arrangement.”

See

§ 300.3. The comments suggest that EDA reevaluate and relax the conflicts-of-interest requirements. One commenter details how EDA's conflicts-of-interest policy impacted a Project and was particularly concerned with the “vague” standard of an apparent conflict-of-interest and how the requirement impacts the ability of small communities to attract “well-informed and motivated residents to run for locally elected offices.”

EDA's requirements comport with the requirements of other Federal Agencies, including DOC's requirements set out at 15 CFR 24.36(b) or 14.42, as applicable, and are designed to maintain public trust in the efficiency and effectiveness of the agency's grant assistance. EDA does not intend for its conflicts-of-interest policy to burden or penalize communities or to halt innovative economic development projects, but does believe that the policy is extremely important to the integrity and transparency of EDA's programs. EDA staff work closely with Eligible Applicants to identify conflicts-of-interest issues early on and develop solutions that will keep Projects on track. This NPRM does not propose substantive changes to § 302.17, but EDA welcomes constructive comments on ways to balance the agency's fiduciary and transparency responsibilities with the goal of implementing economic development projects. Note that this NPRM does make minor grammatical corrections by replacing “may also” with “also may” in the third sentence of § 302.17(a), replacing “shall also” with “also shall” in § 302.17 (b)(2), and removing “also” from § 302.17(c)(2). We replace “two (2)” with “two” in § 302.17(c)(3).

EDA received one comment that the agency's post-approval requirements regulation (§ 302.18) is confusing in that it does not specifically apply to all EDA awards. This NPRM proposes revising the regulation by removing paragraph (b), which applies only to EDA's Economic Adjustment Assistance Investments, in its entirety. We maintain paragraph (a) in substance, but remove the unnecessary lettered designation and revise the provision to clarify that post-approval requirements apply to all EDA awards. EDA also replaces the phrase “special terms” with “special award conditions” to comport with EDA's usual terminology.

EDA received an internal comment suggesting that EDA specify in the regulations that the requirements under the Americans with Disabilities Act (“

ADA

”) (42 U.S.C. 12101

et seq.

) apply to EDA Projects. The civil rights requirements applicable to Recipients and Other Parties are set out at § 302.20. Section 302.20 specifies that discrimination is prohibited by a Recipient or Other Party with respect to a Project receiving Investment Assistance under PWEDA or by an entity receiving Adjustment Assistance under the Trade Act, in accordance with a list of enumerated authorities. While EDA agrees that it should be clear that the ADA applies to EDA Projects, we note that the enumerated list set out at § 302.20 includes section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 794), which prohibits discrimination on the basis of disabilities. In addition, the requirements of the ADA are applicable to all EDA Recipients by virtue of the DOC's Financial Assistance Standard Terms and Conditions, which apply to all non-construction awards, and EDA's Standard Terms and Conditions for Construction Projects, which apply to all construction awards. Because discrimination on the basis of disability already is prohibited with respect to EDA Projects, we decline to make the change. EDA makes non-substantive changes in § 302.20(b)(1) by replacing “fifteen (15)” with “15,” making a minor grammatical correction by replacing “is also” with “also is,” and replacing the final usage of the term “Investment Assistance” immediately following the phrase “EDA's final disbursement of” with “award” for simplicity.

Part 303—Planning Investments and Comprehensive Economic Development Strategies

Part 303 sets forth regulations governing EDA's Planning program, through which the agency provides assistance to help Eligible Applicants create strategies or plans to stimulate and guide the economic development efforts of a community or Region. EDA has three distinct types of Planning Investments: (1) Partnership Planning; (2) State Planning; and (3) short-term Planning. Through EDA's Partnership Planning Investments, the agency facilitates the development, implementation, revision, or replacement of CEDS. EDA provides Partnership Planning awards to Planning Organizations (e.g., District Organizations) serving EDA-designated EDDs (as defined in § 300.3) throughout the U.S. The EDDs are recognized by the State(s) in which they reside as multi-jurisdictional councils of governments, regional commissions, or planning and development centers. Further information on EDDs may be found on EDA's Web site at

http://www.eda.gov/

PDF/EDD%20List_030410.pdf.

The Partnership Planning awards enable Planning Organizations to manage and coordinate the development and implementation of CEDS to address the unique needs of their respective Regions. The CEDS are central to EDA's economic development initiatives, and a proposed Project must be consistent with a relevant CEDS before EDA makes a competitive award under the Public Works or Economic Adjustment Assistance programs under parts 305 or 307. Finally, part 303 sets forth the requirements for State and short-term Planning Investments, which can help distressed Regions strategize to create and retain new and better jobs and respond quickly and effectively to sudden economic dislocations.

In response to a suggestion from EDA staff, this NPRM proposes adding subparts to part 303 to better organize and clarify the distinctions between EDA's Planning Investments. General requirements that apply to all Planning Investments are set out at §§ 303.1 thorough 303.5 and included under new “Subpart A—General.” Requirements specific to Partnership Planning Investments are set out at §§ 303.6 and 303.7 under new “Subpart B—Partnership Planning Assistance.” Similarly, requirements specific to State plans and short-term Planning Investments, §§ 303.8 and 303.9, respectively, are included under new “Subpart C—State and Short-Term Planning Assistance.”

This NPRM proposes revising the heading of § 303.1 from “Purpose and scope” to “Overview of EDA's Planning Program” to clarify the content of the provision. In the final sentence of the introductory text to § 303.1, EDA proposes to replace the phrase “Private Sector Representatives” with “the private sector.” As noted above under “Part 300—General Information” this NPRM proposes to remove “

Private Sector Representative

” as a defined term; however, EDA expects that the private sector will remain actively involved in Regions' planning processes. We also propose adding “non-profit organization” and “educational institutions” to the list of entities that EDA expects will be active participants in the planning process. EDA also proposes minor changes to § 303.1 to move the phrase “short-term Planning Investments” after “State plans” to comport with the order of the regulations, and to replace the phrase “higher-skill, higher-wage jobs” with “new and better jobs.” EDA capitalizes “Regional” in the second sentence for consistency in the use of defined terms. In § 303.3, EDA proposes minor textual changes to paragraph (a)(5) by replacing the phrase “higher-skill, higher wage” with “new and better” and to paragraph (c) by replacing “shall also” with “also shall.” In § 303.4(a), EDA proposes replacing the sentence “Planning Investments shall function in conjunction with any other available Federal, State or local planning assistance to ensure adequate and effective planning and economical use of funds” with “Planning Investments shall be coordinated with and effectively leverage any other available Federal, State, or local planning assistance and private sector investments” for better sentence structure and to emphasize the importance of public-private partnerships. EDA also removes a redundant numerical reference from § 303.4(c), replacing “thirty-six (36) month” with “36-month.”

As noted above, this NPRM proposes incorporating all Partnership Planning provisions under new “Subpart B—Partnership Planning Assistance” for increased clarity. Because the Partnership Planning Investments and CEDS process are closely linked, EDA proposes restructuring § 303.6, which currently sets out the process requirements for developing a CEDS, to incorporate a description of Partnership Planning along with the CEDS process requirements. Accordingly, this NPRM revises the heading of § 303.6 to read “Partnership Planning and the EDA-funded CEDS process” to better specify the intent of the provision. EDA proposes a description of Partnership Planning Investments at new § 303.6(a), which this NPRM titles

Partnership Planning overview,

and incorporates CEDS Strategy Committee and process requirements, which are currently set out under § 303.6(a) through (e), under § 303.6(b), which this NPRM titles

CEDS process.

EDA also appropriately renumbers proposed § 303.6(b). EDA proposes subparagraph headings within § 303.6(b) to serve as guideposts to help the reader more easily navigate the provision. Accordingly, headings to proposed § 303.6(b)(1) through (b)(5) are added to read as follows:

CEDS Strategy Committee, Public notice and comment, Reports and updates, Inadequate CEDS,

and

Regional Commission notification,

respectively.

EDA received five public comments suggesting that the agency provide increased flexibility with regard to the membership requirements of CEDS Strategy Committees, the requirements of which currently are set out at § 303.6(a) and that this NPRM proposes relocating to § 303.6(b)(1) as stated above. Currently, a CEDS Strategy Committee must represent the main economic interests of the Region, and must include Private Sector Representatives as a majority of its membership. For the CEDS process and the resulting strategy to be effective, the Strategy Committee must reflect all key stakeholders from across the Region. However, EDA wishes to provide flexibility for all types of communities and Regions, and therefore, under this NPRM, EDA proposes to maintain the requirement that a Strategy Committee represent the main economic interests of the Region, including the private sector, public officials, community leaders, private individuals, representatives of workforce development boards, institutions of higher education, and minority and labor groups, but no longer requires a majority or membership threshold from any type of economic stakeholder. In addition, EDA proposes to add the clause “and others who can contribute to and benefit from improved economic development in the Region” to revised § 303.6(b)(1) to address any stakeholders that EDA's list may miss. Although EDA proposes to remove the membership threshold, the capability of each Strategy Committee to undertake a Regional planning process remains of principal importance. Accordingly, EDA adds the sentence “In addition, the Strategy Committee must demonstrate the capacity to undertake a collaborative and effective planning process.” EDA will provide guidance to implement this requirement. EDA expects that every Strategy Committee will include strong private sector representation unless such representation is proscribed by State law.

One public comment and an internal comment from EDA staff suggest that EDA reform its regulations to “emphasize broader and ongoing multi-stakeholder input in the planning process.” The current public review and comment requirement, as set out at § 303.6(b)(2), requires simply that CEDS be made available to the public for comment for at least 30 days before submission to EDA. EDA believes that public input is crucial to a Regional planning process and agrees that the requirement should contain further details. EDA proposes revising the regulation to combine existing § 303.6(b)(1) and (b)(2) into revised § 303.6(b)(2), which sets out revised public comment requirements. Under the revised requirements, before submission of a CEDS to EDA, the Planning Organization must provide the public and appropriate governments and interest groups with adequate notice and opportunity to comment on

the CEDS. For maximum flexibility, EDA maintains the requirement that the comment period be for at least 30 days, but goes on to specify that the Planning Organization must make the CEDS available appropriately, electronically and otherwise, throughout the comment period. The Planning Organization also must make the CEDS available in hardcopy upon request. Finally, the provision states that EDA may require the Planning Organization to provide any comments received on the CEDS and demonstrate how the comments were resolved. The proposed regulation is designed to be flexible enough to work for all communities, while providing ample guidance to gather public input.

The remainder of the CEDS process requirements remain substantively the same, and are incorporated under § 303.6(b)(3)-(5). This NPRM also removes a repetitive numerical reference, replacing “five (5)” with “five” in proposed § 303.6(b)(3)(ii).

EDA proposes textual changes to the introductory text of § 303.7(b), which frames the process and participation expectations of CEDS and introduces the content requirements. EDA revises the heading of § 303.7(b) to read “

Strategy requirements”

instead of “

Technical requirements”

to emphasize that CEDS are strategy documents and replaces the word “continuing” with the phrase “comprehensive and continuous” in the first sentence of § 303.7(b)(1). EDA proposes a second sentence to EDA highlight that CEDS must be consistent with section 302 of PWEDA (42 U.S.C. 3162), which sets out the requirements for CEDS, and that CEDS must promote Regional economic resiliency and be unique and responsive to the relevant Region.

EDA received several comments, both public and internal, on the content requirements of CEDS, which currently are set out at § 303.7(b)(1)-(10). One commenter recommends that EDA “support regional and local planning and economic visioning efforts that take into account local and regional assets.” Another commenter suggests that EDA ensure the Planning program encourages “strategic doing” by “funding strategic planning activities that begin with an initial survey of regional assets, stakeholders, and opportunities and provide a framework for activities for ongoing networking and feedback.” EDA's Planning program and the requirements of CEDS accomplish those goals by creating an ongoing planning process that begins by evaluating current Regional baselines, setting a vision for competitiveness and innovation, and establishing a strategy tailored to reach the Region's goals.

Several comments suggest that the current CEDS content requirements are counterproductive in that they create “a situation in which the CEDS must be used as a place to dump data and becomes a lengthy narrative * * * of limited value to businesses and economic development practitioners” and that “plan writers spend most of their time trying to check off its boxes rather than focus on a plan that is truly relevant to the unique circumstances and assets of any given region.” The commenters suggest various ways to streamline CEDS, including four that suggest adopting the National Association of Development Organizations' (“

NADO”

) Peer Standards of Excellence. One of the comments suggests that the amount of background materials required in CEDS should be reduced to “[a]llow EDDs to focus CEDS on specific strategies (put the S back in CEDS), rather than a comprehensive narrative of the region.” EDA received several comments that focus on the “project list” aspect of CEDS in current § 303.7(b)(5), which requires that CEDS include “[a] section listing all suggested Projects and the projected numbers of jobs to be created as a result thereof.” Two comments request that EDA eliminate this requirement, suggesting that it encourages the making of project laundry lists instead of catalyzing strategic thinking. Four comments suggest that any required CEDS project list should be meaningful in the EDA selection process, and one comment recommends that any project not included in a CEDS should not be considered for funding by EDA. One comment states that “[o]nly in rare and unusual circumstances should projects not prioritized in the CEDS be supported without a full CEDS amendment including public review of project priorities.”

EDA agrees with its stakeholders that the list of CEDS requirements may be counterproductive for many Regions and therefore proposes significantly streamlining § 303.7(b) from ten detailed specifications to four essential planning elements set out at § 303.7(b)(1)(i) through (iv): (1) A summary of economic development conditions of the Region; (2) an in-depth analysis of economic and community strengths, weaknesses, opportunities, and threats (commonly known as a “

SWOT”

analysis); (3) strategies and an implementation plan to build upon the Region's strengths and opportunities and resolve the weaknesses and threats facing the Region, which should not be inconsistent with applicable State and local economic development or workforce development strategies; and (4) performance measures used to evaluate the Planning Organization's successful development and implementation of the CEDS. Lists of specific projects, including prioritized lists, will not be required in the CEDS, but may be used by the Planning Organization to illustrate the implementation of the CEDS. EDA neither encourages nor discourages such project lists in order to provide Planning Organizations the maximum flexibility to create strategies most suited to their Region.

EDA recognizes that economic development planning is a dynamic field and best practices are constantly evolving. Therefore, EDA will publish and periodically update specific CEDS content guidelines, which will be based on best practices developed in collaboration with the agency's cutting edge planning and economic development partners as well as on leading edge research. For example, EDA expects that the relevant guidelines will include NADO's Peer Standards of Excellence, which are strategic principles that ensure accountability and performance, while allowing for Regional flexibility and creativity. Transformative CEDS take the form of effective, agile strategies, not static lists of requirements and projects. The development and maintenance of a CEDS requires Planning Organizations to undertake an iterative process of gathering data and community input and adapting the strategy to the facts on the ground. EDA expects that these changes will ensure that CEDS remain relevant economic development strategies by allowing Planning Organizations to focus on inclusive planning processes and positive economic development results.

With respect to the comment suggesting that EDA implementation projects must be tied to the CEDS of EDDs, EDA already requires that Projects under the agency's Public Works and Economic Adjustment Assistance programs be consistent with a relevant CEDS, per the requirements of sections 201 and 209 of PWEDA (42 U.S.C. 3141 and 3149, respectively).

Other comments suggest discrete changes, including requiring an analysis of RICs in the CEDS document and modernizing “CEDS data sets * * * to include relevant 21st Century global knowledge economy indicators and measures at the regional level.” EDA thanks the commenters and expects that these comments will be addressed through the CEDS guidelines that EDA

publishes incorporating the best practices of its economic development and research partners.

EDA received two public comments and an internal comment regarding the agency's consideration of a CEDS developed independent of EDA assistance, as set out at § 303.7(c). EDA-funded CEDS must adhere to the requirements of § 303.7(b), but the agency may accept a non-EDA funded strategy as a CEDS at the agency's discretion. Both public and internal comments suggest that consistent requirements should apply to both EDA-funded and non-EDA funded CEDS. EDA is currently reviewing the issue, and expects to address the requirements of non-EDA funded CEDS in published CEDS guidelines.

As noted above, State and short-term Planning requirements are incorporated under new “Subpart C—State and Short-Term Planning Assistance.” In addition, this NPRM proposes minor changes to the first sentence of § 303.9(a), replacing the phrase “may also” with “also may,” for better sentence structure, and to § 303.9(b) to remove the unnecessary phrase “but are not limited to.”

In addition, EDA received two comments stating that “[d]ocumentation on how to prepare CEDS Updates, Government Performance and Results Act reports, and CEDS Annual Performance reports is ambiguous or unclear and results in a disparity among reports of EDDs.” Clearer guidance on what EDA expects in these documents is an identified need. Accordingly, EDA currently is evaluating its Planning program and expects to issue updated guidance in the near future.

Part 304—Economic Development Districts

Part 304 on Economic Development Districts, which also may be referred to as a “

District”

or an “

EDD”

in § 300.3, sets forth the Regional eligibility requirements that must be satisfied in order for EDA to consider a District Organization's request to designate a Region as an EDD, including submission of an EDA-approved CEDS, and the District Organization's formation and organizational requirements. This part also contains provisions relating to termination and performance evaluations of District Organizations.

EDA corrects a punctuation error in § 304.1(c) by adding a colon (“:”) at the end of the phrase “Has an EDA-approved CEDS that.” In addition, we remove a redundant numerical reference by replacing “one (1)” with “one” in § 304.1(a) and, for better sentence structure, replace “must also” with “also must” in § 304.2(c)(1) and “shall also” with “also shall” in § 304.2(c)(4)(i).

Section 304.2(c)(2) sets out the requirements for governing bodies (sometimes known as “policy boards”) of District Organizations. Currently, the governing body of a District Organization must be broadly representative of the principal economic interests of the Region and, unless prohibited by State or local law, must include:

• At least one Private Sector Representative;

• At least one or more Executive Directors of Chambers of Commerce, or representatives of institutions of post-secondary education, workforce development groups, or labor groups, all of which must comprise in the aggregate a minimum of 35 percent of the District Organization's governing body; and

• A simple majority of its membership who are elected officials and/or employees of a general purpose unit of State, local, or Indian tribal government who have been appointed to represent the government.

EDA received four public comments suggesting that the regulations should provide “[i]ncreased flexibility for governance structure and local control of EDD policy boards.” EDA agrees that District Organizations should be focused on implementing a dynamic and effective planning process for the Region instead of meeting and maintaining membership thresholds. Therefore, we propose revisions to § 304.2(c)(2) to remove the current membership thresholds, but maintain the requirement that governing bodies demonstrate that they are broadly representative of the principal economic interests of the Region, including the private sector, public officials, community leaders, representatives of workforce development boards, institutions of higher education, minority and labor groups, and private individuals. Although EDA proposes to remove the membership thresholds, the capability of each governing body to implement the relevant CEDS remains of principal importance. Accordingly, EDA adds the sentence “In addition, the governing body must demonstrate the capacity to implement the EDA-approved CEDS.” EDA will provide guidance to implement this requirement. EDA expects that every District Organization governing body will include strong private sector representation unless such representation is proscribed by State law.

EDA makes conforming changes to § 304.2(c)(2) to remove the provisions that allow the Assistant Secretary to waive the Private Sector Representative requirement upon a Region's showing of its inability to locate such a representative and the prohibition on the Assistant Secretary's delegation of this waiver authority.

Also with respect to District Organization governing body membership requirements, one commenter suggests that EDA “expand its list of representatives able to be members of an EDD Board to include Executive Directors of Economic Development Corporations in addition to Chambers of Commerce directors.” One internal comment suggests that EDA specify that the simple majority requirement can be met by special purpose as well as general purpose units of government and a second internal comment suggests that EDA reduce the 35 percent requirement to 25 percent to better fit with local board composition requirements. EDA agrees, but as EDA has revised the membership requirements of District Organization governing bodies to remove membership thresholds, these changes are no longer necessary.

In response to an internal comment, EDA revises § 304.2(c)(4) to require that governing bodies of District Organizations meet at least twice a year, instead of only once a year. EDA hopes that requiring at least two meetings a year will increase public participation in District Organization operations and help to provide increased insight into the importance of these organizations.

EDA corrects a typographical error in § 304.4(a)(3), replacing the phrase “on this chapter” with “of this chapter.” In addition, this NPRM removes redundant numerical references by replacing “sixty (60)” with “60” in § 304.3(b), two instances of “three (3)” with “three” in § 304.4(a), and “one (1)” with “one” in § 304.4(b).

EDA received six comments suggesting that the agency require greater coordination between Eligible Applicants and District Organizations. Commenters provide a variety of coordination recommendations; two suggest that EDA not fund projects that are not included in a CEDS, three suggest that EDA “require coordination with Districts for projects submitted by those outside the District but proposing activities that affect a District's communities,” and one suggests requiring a letter of consistency from the relevant District Organization for all projects. EDA strongly values its partnerships with District Organizations of EDDs. However, EDA does not make these changes because of the requirements of PWEDA. Under sections

201(b)(3) and 209(b) of PWEDA (42 U.S.C. 3141 and 3149, respectively), all grants awarded under EDA's Public Works and Economic Adjustment Assistance programs must be consistent with a relevant CEDS. PWEDA does not impose this requirement upon its other programs.

EDA received two comments that recommend restoring the 10 percent bonus for Eligible Applicants that demonstrate active participation with the relevant District Organization. The Economic Development Administration Reauthorization Act of 2004 (Pub. L. 108-373) removed former section 403 of PWEDA, which authorized up to a 10 percent “bonus” for certain Projects as an incentive for coordination with District Organizations. Because such use of appropriated funds is not authorized under PWEDA, EDA is unable to reinstate the bonus.

EDA also received two comments suggesting that the agency provide additional financial resources to District Organization planners and staff and provide “access to regularly scheduled professional development opportunities to [ensure] that their skill sets are at peak performance” and that they are the “best economic development professionals in a region.” One commenter suggests that EDA's University Center program be “encouraged to provide * * * professional development for District Organizations to improve and enhance their professional capacity.” EDA endeavors to fulfill the budget requirements and needs of all of its District Organizations across the U.S. The agency strongly encourages District Organization planners and staff to seek out and take advantage of professional development opportunities; and the agency strives to be a part of this by providing regional conferences and webinars throughout the year and by providing practitioner tools.

See http://www.eda.gov/Research/Research.xml.

In addition, EDA agrees that collaborations across programs are essential to leveraging constrained resources and continually seeks ways to ensure its programs coordinate effectively. For example, in EDA's FY 2011 University Center program competition, EDA specified that the agency encourages University Center Projects that “present a clear plan for collaborating with and assisting other EDA investment partners, recipients, and stakeholders, including EDA-funded Economic Development Districts” and Projects that “offer a full range of economic development research and technical assistance services to EDA regional partners (e.g., District Organizations * * *).”

See

section I.B. of EDA's FY 2011 University Center FFO dated March 31, 2011.

Finally, one comment suggests that District Organizations provide “grant-writing support” to rural regions and that EDA provide “additional resources to support this function” and an internal comment suggests that EDA “identify ways to compensate or provide financial incentives for District Organizations that help design and process successful EDA applications.” As noted above, EDA supports such collaborations and strives to provide the resources to make them happen.

Part 305—Public Works and Economic Development Investments

Part 305 provides information about EDA's Public Works and Economic Development Investments. Section 305.1 explains the purpose and scope of these Investments. Section 305.2 specifies the scope of activities eligible for consideration under a Public Works Investment and sets forth a list of determinations that EDA must reach in order to award a Public Works Investment. Specific application requirements are set forth in § 305.3, and § 305.4 provides the requirements for Public Works Investments awarded solely for design and engineering work.

EDA proposes a minor change to § 305.1 to replace the phrase “higher-skill, higher-wage job opportunities” with “new and better job opportunities” in the last sentence of the provision. EDA also replaces the phrase “the creation of new, or the retention of existing” with the phrase “to create new or retain existing” in the second sentence of the provision for better sentence structure. Section 305.2(c) sets out the requirement that not more than 15 percent of EDA's appropriations made available for Public Works Investments be used in any one State. We received an internal comment suggesting that EDA revise § 305.2(c) by replacing the phrase “Not more than fifteen (15) percent of the annual appropriations made available to EDA to fund Public Works Investments” with the phrase “Not more than fifteen (15) percent of EDA's

total

annual appropriations to fund Public Works Investments.” The comment raises the question of whether EDA's regular annual appropriations include special or supplemental appropriations that may be used for Public Works Investments. We have examined the law on this topic and, since an agency's annual appropriations include both regular annual and any special or supplemental appropriations, the requested change does not add anything to the phrase and therefore we decline to make it. However, EDA proposes non-substantive revisions to § 305.2(c) to remove repetitive numerical references, replacing “fifteen (15)” with “15” and “one (1)” with “one.”

Section 305.5 sets out the requirements for a request and EDA's determination that a District Organization may administer a Project on behalf of another Recipient. Section 305.5(b) provides that EDA may approve such a request either by approving the application in which the request is made or through a separate specific written approval. We received an internal comment suggesting that the reference to the separate specific written approval be removed; however, we decline to make the change as we believe the regulation is clear and that the additional language gives EDA's regional offices needed flexibility. In addition, we received two internal comments suggesting that the regulation be clarified with respect to whether competition is required when a District Organization administers a Project. PWEDA envisions a special role for District Organizations of EDDs as Regional economic development planners and leaders, and we believe the current regulations reflects that role. Therefore, we decline to make the change.

EDA received one public comment and an internal staff comment with respect to the alternate construction procurement methods set out at § 305.6(a). The commenters recommend that “construction management at risk” not be allowed as an alternate construction procurement method because such contracts are contrary to the Government-wide competitive procurement requirements (

see

DOC's regulations at 15 CFR 14.43 and 24.36, as applicable). We have considered the commenters' concern; but determined that EDA's regulation is consistent with DOC's requirements, which prescribe the procurement requirements applicable to Federal grant assistance, and decline to make the requested change. However, in response to another internal comment from EDA staff, we propose revising the first sentence of § 305.6(a) to clarify that use of an alternate procurement method is subject to EDA's approval by adding the phrase “shall seek EDA's prior written approval to” immediately following “Recipients.” EDA believes that this approval step will help ensure that Recipients follow correct procedures and that the maximum amount of Project costs are allowable under applicable regulations and Federal cost principles. Also, to provide additional clarity on the content

of the justification a Recipient must provide to use an alternate procurement method, we propose the clause “, including a brief analysis of the appropriateness and benefits of using the method to successfully execute the Project and the Recipient's experience in using the method” to § 305.6(a)(1). For better sentence structure, EDA replaces the introductory phrase “These methods include but are not limited to” with “These alternate methods may include” in the second sentence of § 305.6(a). In addition, in § 305.6(b), EDA proposes replacing the phrase “procurement standards” with “procedures and standards” for consistency with the content of the DOC regulations at 15 CFR parts 14 and 24.

EDA proposes revisions to § 305.8 to improve sentence construction by replacing “may also” with “also may” in the second sentence of § 305.8(a) and replacing “and/or” with “or” and “is also” with “also is” in § 305.8(c). In response to an internal comment from EDA staff, we propose to add a regulatory provision regarding procedures with respect to bid overrun, the omission of which appears to simply have been an oversight. Accordingly, we propose revising the heading of § 305.10, which currently only addresses construction contract bid underrun procedures, to read “Bid underrun and overrun.” We incorporate the existing provision regarding procedures in case of bid underrun under new paragraph (a), titled

Underrun.

We add a new paragraph (b) titled

Overrun

to set out EDA's procedures in case of an overrun at construction contract bid opening. In general, the proposed provision provides that in case of an overrun at the construction contract bid opening, the Recipient may take deductive alternatives if provided for in the bid documents, reject all bids and re-advertise, or augment the Matching Share. If the Recipient demonstrates to EDA's satisfaction that the above options are not feasible and the Project cannot be completed otherwise, the Recipient may submit a written request to EDA for additional funding, which will be at EDA's sole discretion and considered in accord with EDA's competitive process requirements. The new provision on bid overrun does not add to or change current requirements; it simply clarifies EDA's existing practice.

EDA received an internal comment suggesting that EDA specify that underrun amounts be transferred to the contingencies line item. EDA agrees that the current provision regarding bid underrun does not reflect EDA's procedures and revises proposed § 305.10(a) to provide that the Recipient must contact EDA immediately to determine correct procedures by replacing the phrase “the Recipient will notify EDA to determine whether Investment funds should be deobligated from the Project” with the phrase “the Recipient shall notify EDA immediately to determine relevant procedures.”

EDA received one comment requesting that EDA streamline its contract approval procedures, suggesting that the agency adopt a pre-approval system or “some dollar limit or some other threshold” that triggers EDA's review. Section 305.11 requires EDA to “determine that the award of all contracts necessary for design and construction of the Project facilities is in compliance with the terms and conditions of the Investment award in order for the costs to be eligible for EDA reimbursement.” EDA's contract review is intended to help Recipients navigate various Federal requirements, including DOC's regulations (

see

15 CFR parts 14 and 24, as applicable) and relevant OMB cost principles (

see

2 CFR parts 220, 225, and 230, as applicable), and help EDA determine whether it can reimburse specific Project costs. EDA's review is not intended to be burdensome and staff makes every effort to expedite the process. As the regulation is in the interest of both the agency and Recipients, EDA does not propose a substantive change.

Part 306—Training, Research and Technical Assistance

Part 306 sets out the requirements for EDA's Local and National Technical Assistance and Research Investments. Both Local and National Technical Assistance Investments help Recipients fill the knowledge and information gaps that may prevent leaders in the public and non-profit sectors in economically distressed Regions from making optimal decisions on local economic development issues. Through the Research program, EDA invests in research and technical assistance-related Projects to promote competitiveness and innovation in distressed rural and urban Regions.

EDA received two comments on part 306. One comment states that “[c]oordinated regional research networks can provide local political, economic development and business leaders with an understanding of the regional economic context in which they operate, set policy, attract investment and attract and retain jobs,” and suggests that “[r]esearch dollars ought to be invested in building coordinated broad-based regional efforts that provide for better dissemination and application of research findings to improve the life of Midwest residents and the competitiveness of Midwest employers.” EDA has invested extensively in RIC research and capacity building, including the

Know Your Region

project, which provides resources to help practitioners across the nation implement effective Regional economic development strategies. Please see the

Know Your Region

Web site at

http://www.knowyourregion.org/about

for more information.

See

EDA's Web site at

http://www.eda.gov/AboutEDA/RIC/

for more information on EDA's RIC efforts.

The second comment recommends that Technical Assistance program awards “be reserved for the EDDs to conduct feasibility studies, management and operation plans, and CEDS coordination to [ensure] that any investment targeted [at] RICs [includes] measures that will address the five core evaluation criteria of EDA and create value-added outcomes for the region.” An EDD is one of the Eligible Recipients listed in section 3 of PWEDA (42 U.S.C. 3122). EDA is not authorized to reserve Technical Assistance program funds for any particular group of Eligible Recipients. Therefore, we decline to make a change to the regulations; however, EDA continues to support District Organizations of EDDs in their efforts to advance new and established RICs.

We make several non-substantive changes to part 306, including rephrasing § 306.1(a) to read “Local and National Technical Assistance Investments may be awarded to” instead of “Local and National Technical Assistance Investments may.” In addition, we propose italicizing the parenthetical “(“

University Centers”

)” in the final sentence of § 306.4. This NPRM also removes repetitive numerical references from part 306 by replacing the phrase “twelve (12) to eighteen (18)” with “12 to 18” in § 306.3(a); “eighty (80)” with “80” in § 306.6(d); two instances of “three (3)” with “three” in § 306.7(a)(1); and “one (1)” with “one” in § 306.7(c). EDA proposes no other revisions to part 306.

Part 307—Economic Adjustment Assistance Investments

Part 307 sets out the requirements for awards under EDA's Economic Adjustment Assistance program, which can provide a wide-range of technical assistance, planning, and infrastructure assistance in Regions experiencing adverse economic changes that may occur suddenly or over time, including strategy development, infrastructure

construction, and revolving loan fund (“

RLF”

) capitalization. Subpart A of part 307 details the general requirements for Economic Adjustment Assistance awards, and subpart B sets out requirements specific to the RLF program.

Through this NPRM, EDA proposes reorganizing part 307 to help clarify award requirements and incorporate all RLF program requirements under subpart B, which EDA proposes renaming the “Revolving Loan Fund Program.” Currently, certain RLF application and post-approval requirements are set out under subpart A of part 307, which may make them difficult to locate. For example, RLF-specific application review requirements are set out at § 307.4(c)(2) and RLF post-approval requirements are set out under § 307.6(d), both of which currently are under subpart A. To eliminate confusion, this NPRM incorporates the RLF application review and post-approval requirements under new § 307.7 titled “Revolving Loan Fund award requirements” in subpart B. In addition, EDA proposes non-substantive changes by removing the unnecessary phrase “but not limited to” from the first sentence of § 307.1 and removing the hyphen from the phrase “Federally Declared Disasters” in § 307.1(b).

In EDA's interim final rule (“

IFR”

) published in the

Federal Register

on October 22, 2008 (73 FR 62858), EDA made revisions to clarify that it no longer allows RLF Recipients to use RLF Capital to guarantee loans. As stated in the 2008 IFR, while the authority for RLF Recipients to guarantee loans with RLF Capital has been used extremely infrequently throughout the four-decade history of the RLF program, EDA determined that loan guaranties are too risky and of limited utility, since, unlike Federal guaranties that are backed by the full faith and credit of the United States, RLF loan guaranties are backed only by the assets in the RLF. Therefore, in response to an internal comment from EDA staff, this NPRM proposes a minor revision to § 307.3(b)(2) to remove a reference to “loan guaranties” that was inadvertently missed in the last revision to the regulations.

Through the RLF program, EDA assists Regions affected by a variety of types of distress, including Regions that are Presidentially Declared Disaster areas, by supplying businesses and entrepreneurs with the gap financing necessary to start or expand their businesses. Currently, EDA's regulation at § 307.4(c)(2) specifies that EDA will review applications to capitalize or recapitalize an RLF to assess the need for a new or expanded public financing tool to enhance other business assistance programs and services targeting economic sectors and locations described in the CEDS. However, the provision fails to reference how EDA will assess RLF applications to address Presidentially Declared Disaster areas. Therefore, EDA proposes revisions to the text of new § 307.7(a)(1)(ii) to specify that EDA will review disaster-related RLF applications to assess the need to provide appropriate support for post-disaster economic recovery efforts in Presidentially Declared Disaster areas. In order to consolidate award requirements in a single section, this NPRM proposes relocating the remainder of text in connection with Economic Adjustment Assistance post-approval requirements, which currently are set out at § 307.6(a) through (c), to § 307.4(b) and (c) of subpart A, titled

Strategy Grants

and

Implementation Grants,

respectively. We also revise § 307.4(d) to refer the reader to § 307.7 for RLF award requirements and relocate the sentence specifying that funding priority considerations for Economic Adjustment Assistance may be set forth in an FFO from § 307.4(d) to § 307.4(a) and revise it to add a reference to RLF Grants. Note that these revisions do not change the requirements applicable to Economic Adjustment Assistance awards; they simply make part 307 easier to navigate. EDA also proposes conforming changes to the table of contents of part 307 to appropriately renumber the regulations affected by reorganizing part 307.

We received an internal comment suggesting that EDA replace the term “CEDS” with “strategy” throughout part 307. We decline to make the change because sections 209 and 302 of PWEDA (42 U.S.C. 3149 and 3162, respectively) refer to the requirement of a “comprehensive economic development strategy,” and we believe the current language is helpful in that it encourages the creation of CEDS, yet allows for alternatives when necessary.

EDA received an internal comment from EDA staff requesting that the “Application requirements” provision as set out at § 307.5 provide greater specificity in what is required in an application for Economic Adjustment Assistance. Section 307.5 provides guidance that follows the requirements of PWEDA and other regulations. Because of the flexibility inherent in the regulation and other tools available to provide specificity in application requirements, including FFOs, we decline to make the requested change. However, we welcome further constructive comments on needed adjustments.

We received another internal comment suggesting changes to § 307.4(c)(i), which states that EDA will review Economic Adjustment Assistance implementation applications to ensure the applicable CEDS meets the requirements of § 303.7. The suggested change appears to suggest that CEDS are not required for non-construction implementation grants. However, CEDS are required for all Economic Adjustment Assistance implementation grants, whether they are construction or non-construction, and therefore we decline to make the change.

EDA received an internal comment suggesting that § 307.6 should be revised and that subsections (a) and (c) should be removed as Economic Adjustment Assistance post-approval requirements are set out in current § 302.18. EDA believes that the cross-references in current § 307.6 provide useful information for the various types of Economic Adjustment Assistance Projects. In addition, this NPRM proposes changes to current § 302.18 to remove the specific reference to Economic Adjustment Assistance post-approval requirements, making the cross-references even more salient. However, as noted above, through this NPRM, we propose relocating the provisions of § 307.6 to relevant portions of part 307. Accordingly, the text of current § 307.6(a) is relocated to § 307.4(b); the text of current § 307.6(b) is relocated to § 307.4(c)(2); the text of current § 307.6(c) is relocated to § 307.4(c)(3); and the text of § 307.6(d) is relocated to redesignated § 307.7(b).

We propose revising the heading of “Subpart B—Special Requirements for Revolving Loan Funds and Use of Grant Funds” to read “Subpart B—Revolving Loan Fund Program” for simplicity and to comport with the convention of the subpart setting out requirements for the University Center program in part 306. This NPRM proposes redesignating current § 307.7 as § 307.6 and incorporating redesignated § 307.6 under Subpart B. EDA also makes a minor change to the first sentence of redesignated § 307.6 to improve sentence structure, replacing “may also” with “also may.” As noted above, EDA also proposes new § 307.7 to set out RLF award requirements under Subpart B.

In response to an internal comment, EDA also proposes amending § 307.9(a)(2) to clarify the existing requirement that the RLF Recipient is responsible for complying with applicable environmental laws as set out at § 307.10, which means the Recipient must adopt compliance

procedures and ensure that borrowers adhere to relevant environmental laws and regulations. In addition, in the second sentence of § 307.9(c)(2), EDA adds the word “consolidation” between the word “merger” and the phrase “or change in the EDA-approved lending area under § 307.18” to comport with the proposed revisions to § 307.18(b) to more precisely use the terms “consolidation” and “merger.” Note that these revisions do not add to or change existing requirements. EDA proposes minor, non-substantive changes to § 307.9(b)(2)(ii) by replacing “EDA policies and requirements” with “EDA's policies and requirements” and § 307.9(b)(3) by replacing “shall also” with “also shall” in the second sentence, § 307.9(c)(1) by replacing “five (5)” with “five,” § 307.10(a) by removing the unnecessary phrase “but not limited to” in the second sentence and replacing “must also” with “also must” in the third sentence, § 307.10(b) by adding the clarifying word “Accordingly,” to the beginning of the second sentence, § 307.11(b) and (e) by replacing three instances of “thirty (30)” with “30,” and to § 307.11(f)(2) by replacing “twenty (20)” with “20.” In addition, EDA corrects capitalization errors by revising the paragraph heading of § 307.11(d) to read

Interest-bearing account

instead of

Interest-bearing Account

and replacing “federal” with “Federal” in § 307.12(b). EDA also removes an unnecessary parenthetical reference to “(an “EDA funds account”)” in § 307.11(d), as that phrase is not used elsewhere in the regulations. In addition, EDA removes additional repetitive numerical references by replacing two instances of “six-month (6)” with “six-month” in § 307.12(a)(1) and (a)(2) and one instance of “three-year (3)” with “three-year” and two instances of “three (3) years” with “three years” in § 307.13(a), (b)(2), and (b)(3).

Nine comments express concern with EDA's RLF reporting requirements, which are set out at § 307.14. Most comments suggest that RLF reporting is overly burdensome and request that EDA “pursue some more flexible options to minimize the reporting burdens for RLF intermediaries with a proven track record.” EDA has made numerous improvements to the RLF program in response to the OIG's report titled

Aggressive EDA Leadership and Oversight Needed to Correct Persistent Problems in the RLF Program

(March 2007), including establishing a framework for ensuring compliance with RLF reporting requirements. In response to the OIG's recommendations, RLF Recipients must report to EDA on a semi-annual basis in order to maintain the proper operational and financial integrity of RLF awards established with assistance from EDA. In April 2010, EDA successfully launched the Revolving Loan Fund Management System (“

RLFMS”

), which is the agency's central electronic management system for the program. The RLFMS greatly enhances EDA's ability to manage the RLF program in a consistent, cohesive manner, and provides a medium for record-keeping and clear communication between agency staff and RLF Recipients. Semi-annual reports must be submitted electronically through RLFMS, which has significantly reduced paperwork and made reporting more efficient.

In addition, EDA has taken steps to make the RLF reporting form more effective and user-friendly. In June 2008, EDA issued the revised RLF semi-annual reporting form (Form ED-209) to replace the former semi-annual and annual reporting forms. Form ED-209 collects more useful information and has additional data fields to allow EDA to exercise more rigorous oversight of the RLF program. In the agency's IFR published in the

Federal Register

on October 22, 2008 (73 FR 62858), EDA noted that the new Form ED-209 will reduce the average paperwork burden for each RLF report from 12 hours to 2.9 hours. This significant decrease results from the elimination of duplicative fields and EDA's successful launch of RLFMS on April 1, 2010.

EDA received an internal comment from EDA staff suggesting that the agency no longer require submission of the RLF Income and Expense Statement (Form ED-209I), which is required of any RLF Recipient that uses either 50 percent or more (or more than $100,000) of RLF Income for administrative costs in a six-month Reporting Period.

See

§ 307.14(c). EDA surveyed agency staff members, and some reported that Form ED-209I is helpful as it does provide useful information and serves as an incentive for RLF Recipients to avoid high administrative costs. Therefore EDA declines to remove the requirement wholesale, but understands that in certain cases, particularly for RLFs that are smaller and may have relatively less RLF Income, proportionately higher administrative costs may be unavoidable. Therefore, EDA provides additional language to § 307.14(c) to provide that EDA may waive the requirement to submit Form ED-209I for small RLFs as determined by EDA. EDA expects to make such a determination on a case-by-case basis and will provide guidance on requesting a waiver. Because EDA recently changed the RLF reporting requirements to address management and oversight issues and to ensure the administrative integrity and sustainability of the RLF program, this NPRM does not make any further substantive changes to § 307.14. This NPRM does propose removing repetitive numerical references from § 307.14(c), replacing “fifty (50)” with “50” and “six-month (6)” with “six-month.”

In response to an EDA staff comment, EDA proposes a revision to § 307.15(b)(1), which sets out the requirement that an accountant certify to the adequacy of an RLF Recipient's accounting system before EDA can disburse funds. The current regulation requires that the certification be made by “an independent accountant familiar with the RLF Recipient's accounting system.” This provision has raised concerns in past programmatic audits, and therefore, this NPRM proposes new language to require that the certification be made by “a qualified independent accountant who preferably has audited the RLF Recipient in accordance with OMB Circular A-133 requirements.” EDA received another internal comment suggesting that the phrase “board of directors” should be changed to “Loan Administration Board” in § 307.15(b)(2)(iii) to comport with previous regulations, FFOs, and EDA-approved RLF Plans. We decline to make this change because the term “board of directors” as used in the regulations is a generic term used to refer to the body of elected or appointed members who jointly oversee the activities of the RLF. In practice, the body sometimes has a different name, such as board of trustees, board of governors, board of managers, or executive board.

An internal comment suggests revising § 307.15(d) to clarify that private investment is not limited to a 12-month period before loan approval. We note that the January 27, 2010 final rule (75 FR 4259 at 4261) added the phrase “within twelve (12) months of approval of an RLF loan” to § 307.15(d)(1) to clarify that RLF operators may count as private leveraging any funds invested from private sources within 12 months before or after the RLF loan is made, rather than just 12 months before the loan is made. We believe that this previous revision addresses any private leveraging undertaken short of the 12-month limit. Please also see the full discussion on the provision in the January 27, 2010 final rule.

In response to another internal comment, EDA proposes revising § 307.15(d)(1)(iii) to provide that any

Federally guaranteed loan may leverage an RLF portfolio by inserting the phrase “a Federal loan, including” in between “the guaranteed portions of” and “the U.S. Small Business Administration's.” This change provides Recipients with greater flexibility in meeting the RLF leveraging requirement with Federal resources. Currently, certain Small Business Administration (“

SBA”

) loans are the only Federal loans that may meet the leveraging requirement. In addition, we propose to reference U.S. Department of Agriculture loans as an example of a type of Federal loan that can be used as leverage, as many RLF stakeholders may have experience with such loans. EDA expects that these revisions will provide needed flexibility for RLF Recipients to meet RLF leveraging requirements in challenging economic conditions and will further incentivize the leveraging of Federal investments.

EDA also removes redundant numerical references by replacing “sixty (60)” with “60” in § 307.15(b)(1), two instances of “four (4)” with “four” in § 307.15(c)(1), “fourteen (14) with “14” and “ten (10)” with “ten” in § 307.15(c)(2), “twelve (12)” with “12” in § 307.15 (d)(1), and “ninety (90)” with “90” in § 307.15(d)(1)(iii).

EDA received an internal comment requesting the deletion of § 307.16(c)(1)(i), which sets out an exception to EDA's capitalization utilization standard of 75 percent of RLF Capital in the case of an RLF Recipient that anticipates making large loans relative to the size of its RLF Capital base. The commenter notes that the exception provision is incorrectly worded and should be removed “because it gives tacit approval to make loans in excess of 25 percent of the capital base to a single borrower.” Upon consideration, EDA agrees to remove the provision, as it is incorrectly phrased as an “exception.” The relevant RLF Plan sets out the minimum and maximum amounts that the RLF Recipient may loan, and the Recipient must request EDA's approval (with appropriate justification) for any deviation from the prescribed procedures and amounts contained in the Plan. Therefore, the provision in § 307.16(c)(1)(i) is a deviation from the rule, rather than an exception. In all cases, the Recipient must (a) adhere to prudent and appropriate underwriting standards and practices, and (b) seek EDA's approval for any variation below the capital utilization standard set of 75 percent. Accordingly, EDA will consider the qualitative aspects of a requested deviation. The capitalization utilization standard of 75 percent is EDA's required floor. Therefore, this NPRM proposes to remove § 307.16(c)(1)(i) and replace the phrase “The following exceptions apply:” in paragraph (c)(1) with the introductory phrase “except that” and the text of current § 307.16(c)(1)(ii). As the removal of § 307.16(c)(1)(i) makes a list unnecessary, EDA incorporates the contents of existing (c)(1)(ii) under (c)(1).

In response to an internal comment, EDA proposes a clarifying amendment in § 307.16(d)(1)(i) to replace the phrase “business plan” with the correct defined term “RLF Plan” and corrects a grammatical error by removing the unnecessary second use of the word “and” in the subparagraph. EDA also proposes removing redundant numerical references by replacing “three (3)” with “three” in the second sentence of § 307.16(a)(1), “forty-five (45)” with “45” in § 307.16(a)(2)(i), “seventy-five (75)” with “75” in § 307.16(c)(1), and “two (2)” with “two” in the first sentence of § 307.16(c)(2)(i). This NPRM also revises § 307.16(d)(1) to remove the unnecessary parenthetical phrase “(as defined in § 314.5 of this chapter),” as that phrase already appears in § 307.16(c)(2)(i).

Generally, RLF Capital cannot be used to refinance existing debt. However, under § 307.17(b)(6)(ii), EDA may allow the RLF Recipient to use RLF Capital to purchase the rights of a prior lien holder during a foreclosure action, if such action is necessary to prevent significant loss on an RLF loan. Currently, to make such use of RLF Capital, the RLF Recipient must demonstrate that there is a high probability that the sale of assets will result in compensation sufficient to cover the RLF's costs, plus a reasonable portion of the outstanding loan within 18 months of the refinancing. In response to a comment from EDA staff, this NPRM proposes a small change to § 307.17(b)(6)(ii) to provide greater flexibility in uncertain economic conditions by changing the 18-month time limit to “a reasonable time, as determined by EDA.” This NPRM also proposes to remove a repetitive numerical reference from § 307.17(c), replacing “three (3)” with “three” in the first sentence.

Also in response to an internal comment from EDA staff, this NPRM proposes revisions to § 307.18(a) to allow EDA to approve the addition of a new lending area (at the request of an RLF Recipient) before the full amount of the RLF Grant is disbursed to the Recipient. This change will provide EDA with needed flexibilities to respond to changing economic conditions and to quickly provide assistance in distressed areas. To effect this amendment, we remove § 307.18(a)(1)(i), which requires that “EDA shall have disbursed the full amount of its Investment Assistance to the RLF Recipient” before new lending areas may be added, and renumber the remainder of the subparagraph accordingly, redesignating subsections § 307.18(a)(1)(ii) through (vii) as § 307.17(a)(1)(i) through (vi).

Also, as all RLF loans must be in accordance with the relevant RLF Plan, we propose a clarifying change to remove the phrase “to implement and assist economic activity” from the first sentence of § 307.18(a)(1). EDA proposes minor changes to correct a capitalization error in the heading of § 307.18(a)(1), revising it to read

Addition of lending areas

instead of

Addition of Lending Areas;

remove the unnecessary phrase “an additional” from the second sentence of § 307.18(a)(1); replace the term “fulfill” with “meet” and the phrase “Economic Adjustment Investments” with “Economic Adjustment Assistance Investments” in redesignated § 307.18(a)(1)(i); and, at the suggestion of EDA staff, replace the term “RLF Grant award agreement” in redesignated § 307.18(a)(1)(v) with the term “financial assistance award” for increased clarity and consistency.

EDA received four comments suggesting that “EDA should use its existing authority to allow for shared management, marketing, and administration of RLFs for underperforming loan funds.” EDA believes these comments suggest allowing an RLF Recipient to contract with a third party to carry out certain tasks such as shared management, marketing, and administration of RLFs, or obtaining EDA's approval to merge an underperforming RLF award with another award to form a single RLF award. EDA currently may authorize both of these actions. If the RLF Recipient contracts with a third party to undertake these tasks, the contract must be procured in accordance with Federal competitive procurement requirements as set out at 15 CFR 14.43 or 24.36, as applicable. In addition, under § 307.18(b)(2), EDA may approve the merger of two or more RLF awards into a single RLF award. This authority can and has been used to address underperforming RLF awards. In addition, in response to an EDA staff comment, this NPRM proposes textual revisions to § 307.18(b) to more precisely use the terms “consolidation” and “merger.” For purposes of the RLF program, a “consolidation” under § 307.18(b)(1) occurs when a single RLF Recipient that has multiple RLF awards requests, and EDA approves, the

consolidation of the multiple awards into a single RLF. In contrast, a “merger” under § 307.18(b)(2) occurs when two or more RLF Recipients request, and EDA approves, the merger of their respective RLF awards to form a single RLF award. Accordingly, EDA revises the heading of § 307.18 to read “Addition of lending areas; consolidation and merger of RLFs” instead of “Addition of lending areas; merger of RLFs” and the heading of § 307.18(b) to read

Consolidation and merger of RLFs

instead of

Merger of RLFs.

In addition, EDA replaces “merger” with “consolidation” in § 307.18(b)(1)(ii) and (b)(1)(iii) and “consolidate” with “merge” in § 307.18(b)(2). These revisions do not change existing requirements; they merely clarify terminology. Finally, we propose removing repetitive numerical references, replacing “one (1)” with “one” and “two (2)” with “two” in both § 307.18(b)(1) and (b)(2).

Section 307.19 sets out the requirements for an RLF Recipient to sell or securitize RLF loans, which may be an important and efficient way of infusing an RLF with new RLF Capital. Under § 307.19, EDA may approve a Sale or Securitization of all or a portion of an RLF loan portfolio, provided that: (a) The RLF Recipient uses all proceeds from any Sale or Securitization to make additional RLF loans; (b) the RLF Recipient requests that EDA subordinate the agency's interest in all or a portion of the RLF loan portfolio to be sold or securitized; and (c) any Sale or Securitization in which an RLF Recipient may participate complies with the Securities Act of 1933, the Securities Exchange Act of 1934, and any rule or regulation made public by the Securities and Exchange Commission. EDA received an internal comment suggesting the deletion of § 307.19(b), which sets out the subordination request requirement. The comment notes that subordination of the agency's interest could “greatly affect the value of the portfolio, having an adverse consequence on the sale” of all or a portion of the RLF Recipient's RLF loan portfolio. In considering the comment and the provision, EDA notes that the agency's interest is in the proportional dollar amount of the RLF Capital base. EDA has no interest per se upon the conclusion of a Sale or Securitization, at which point its interest is limited to the cash proceeds received upon the Sale or Securitization, which the Recipient must use to make additional loans. Worded differently, EDA's interest in the RLF loan portfolio, in relation to the RLF Capital base, is alive only up to the point of a Sale or Securitization. If, after seeking EDA's approval, the Recipient sells a portion of its loan portfolio, there is no “interest” for EDA to subordinate. In all cases, EDA, considering the Recipient's request, will evaluate the provisions or conditions to the proposed Sale or Securitization vis-à-vis dictated conformance to standards and market practices. Accordingly, this NPRM eliminates paragraph (b) in § 307.19 and re-alphabetizes paragraphs (c) and (d) as (b) and (c), respectively. The commenter also suggests that EDA delete the reference to Securitizations in an effort to streamline the regulations. Although RLF portfolio Securitizations may not happen frequently, EDA declines to make this revision because the agency wishes to maintain maximum flexibility in an RLF Recipient's ability to raise additional RLF Capital.

Two internal comments suggest that EDA remove the references to specific situations that may result in partial liquidation or disallowance of a portion of an RLF Grant as set out at § 307.20(a)(1) through (5) and suspension or termination of an RLF Grant for cause as set out in § 307.21(a)(1)(i) through (x). EDA declines to make these changes as the agency believes it is important to specify circumstances that merit partial liquidation, disallowance, suspension, and termination and because the language addressing circumstances that may warrant termination for cause were added to the regulations through the October 22, 2008 IFR at the recommendation of the OIG (73 FR 62858). However, EDA proposes removing the unnecessary phrases “but are not limited to” from the final sentence of § 307.20(a) and “but not limited to” from § 307.21(a)(1). We also remove redundant numerical references in § 307.20, replacing “one hundred and twenty (120)” with “120” in § 307.20(a)(1), “twelve (12)” with “12” in § 307.20(a)(2), and “one (1)” with “one” in § 307.20(c)(3). EDA also proposes small changes by italicizing the acronym “

SEFA

” and capitalizing the first instance of “Federal” in § 307.21(a)(1)(viii).

EDA received nine comments requesting that EDA “fully defederalize RLFs within the constraints of the current law.” One commenter notes the success of specific RLF Grants in meeting program goals of job creation and investment leveraging and goes on to state “[t]he continued requirement by EDA regarding reporting and guidelines seems ludicrous given the excellent performance record.” EDA appreciates that some stakeholders may be frustrated with Federal requirements on RLF Grants that have been operating for several years, some for as many as three decades. EDA realizes the value of these grants and wishes to reduce burdens on the successful RLFs operating across the country; however, EDA currently is not authorized to release its Federal Interest in RLF awards. EDA's authority to release its interest after 20 years (section 601(d) of PWEDA, 42 U.S.C. 3211) applies to Real Property and tangible Personal Property only, and does not apply to RLF awards, which exist in theoretic perpetuity so long as borrowers repay loans and the RLF Recipient continues to makes new loans. Although EDA currently does not have authority to release its interest in RLF awards, EDA is engaged in an ongoing effort to revise its authorities to provide greater flexibility for RLF Recipients.

EDA received two comments stating that the requirements of “Davis-Bacon should not apply to borrowers of RLF dollars” because such loans are “not grant proceeds, and the company [or relevant borrower] must repay these loans with non-tax dollars.” The wage rate requirements under the Davis-Bacon Act (40 U.S.C. 3142

et seq.

) apply to contractors and subcontractors performing on Federally funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works. Under the Davis-Bacon Act, contractors and subcontractors must pay any laborers and mechanics employed under the contract (or subcontract) no less than the locally prevailing wages and fringe benefits for corresponding work on similar projects in the area. Section 602 of PWEDA (42 U.S.C. 3212) makes the Davis-Bacon wage requirements mandatory in all “projects assisted by the Secretary under [PWEDA].”

See also

§ 302.13. Therefore, Recipients and any RLF borrower, contractor, or subcontractor must comply with Davis-Bacon prevailing wage rate requirements where RLF funds under an EDA award are used for construction work.

EDA received six comments suggesting EDA establish “an RLF Advisory Committee of RLF practitioners to assist in the development of a more streamlined and user-friendly RLF reporting system and process.” EDA has identified the need to create an internal RLF task force to improve communications and resolve program issues, and currently is in the process of establishing one. EDA expects that the task force will consist of Headquarters staff and RLF

administrators from each of the agency's six regional offices.

Part 308—Performance Incentives

Part 308 sets out EDA's performance incentives for Recipients. When a Project is constructed under projected cost, EDA may allow the Recipient to use the excess funds to either increase the Investment Rate of the Project to the maximum percentage allowable under § 301.4 for which the Project was eligible at the time of the Investment award, or further improve the Project consistent with its purpose. The terms for performance awards under EDA's Public Works and Economic Adjustment Assistance programs are set out in § 308.2 and the terms for performance awards under EDA's Planning program are set out under § 308.3.

EDA did not receive any comments on part 308, but capitalizes “Federal” in § 308.3(a)(3) to adhere to the capitalization convention of the regulations and removes repetitive numerical references throughout the part by replacing use of “ten (10)” with “ten” in § 308.2(a), “one (1)” with “one” in § 308.2(b) and § 308.3(a)(2), “three (3)” with “three” in § 308.2(c), two references to “one-hundred (100)” with “100” in § 308.2(d) and § 308.3(b), and “five (5)” with “five” in § 308.3(a).

Part 309—Redistributions of Investment Assistance

Part 309 sets out EDA's policies regarding redistributing grant funds in the form of subgrants, loans, or other appropriate assistance. Information with respect to redistributions of Investment funds for Planning, Public Works, and Training, Research, and Technical Assistance Investments is presented in § 309.1. Specifically, § 309.1(a) provides that a Recipient under any program governed by parts 303, 305, and 306 may directly expend the Investment Assistance, or, with prior EDA approval, redistribute such funds in the form of a subgrant to another Eligible Recipient that qualifies for EDA Investment Assistance under the same program part as the Recipient. All subgrants must be subject to the same terms and conditions applicable to the Recipient under the original Investment award. Subsection 309.1(b) stipulates that Investment Assistance received under parts 303 or 305 may not be redistributed to a for-profit entity.

Section 309.2 addresses redistributions under part 307 for Economic Adjustment Assistance Investments. This section reads similarly to § 309.1. However, a Recipient under part 307 may redistribute Investment funds to another Eligible Recipient in the form of a grant or to a non-profit and private for-profit entity in the form of a loan or other appropriate assistance under subpart B of part 307. EDA did not receive any comments on and does not propose any revisions to part 309.

Part 310—Special Impact Areas

Part 310 implements section 214 of PWEDA (42 U.S.C. 3154), which authorizes the Assistant Secretary to waive the CEDS requirements of section 302 of PWEDA (42 U.S.C. 3162) for a Project that will fulfill a “pressing need” of the Region or prominently address or alleviate Regional underemployment or unemployment. Section 310.1 outlines the process for designating a Region as a Special Impact Area and § 310.2 defines what may be considered a pressing need. EDA did not receive any comments on part 310.

This NPRM proposes revising §§ 310.1 and 310.2(b) and (c) to replace “Recipient” with “Applicant,” in order to clarify that designations under part 310 occur at the application stage. In addition, this NPRM proposes minor, non-substantive changes to § 310(a)(6) to replace “Federally-Declared Disaster area” with “Federally Declared Disaster area” and § 310.2(b) to replace the percentage symbol (“%”) with the word “percent” for consistency with the rest of the regulations and to remove a repetitive numerical reference, replacing “twenty-four (24) month” with “24-month.”

Part 311—America COMPETES

EDA proposes revising the heading of reserved part 311 to read “America COMPETES” in preparation for any regulations necessary to implement the “America Competes Reauthorization Act of 2010” (“

COMPETES

”) (Pub. L. 111-358, January 4, 2011). EDA currently does not propose regulations to implement COMPETES.

Part 312—[Reserved]

Part 313—Community Trade Adjustment Assistance

Part 313 sets forth regulations to implement the Trade Adjustment Assistance for Communities program authorized under chapter 4 of title II of the Trade Act of 1974, as amended (19 U.S.C. 2371

et seq.

) EDA did not receive any comments on and does not propose any revisions to p

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