Rural Technology Development Grants

DEPARTMENT OF AGRICULTURE

Farmers Home Administration

7 CFR Parts 1901, 1940, 1951, and 2003

Rural Development Administration

7 CFR Part 4284

RIN 0570-AA02

Rural Technology Development Grants

AGENCIES: Rural Development Administration and Farmers Home

Administration, USDA.

ACTION: Interim final rule with request for comments.

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

SUMMARY: The Rural Development Administration (RDA) promulgates a new

regulation for Community Facility grants. The Farmers Home

Administration (FmHA) amends its regulations that are utilized by RDA

in administering Community Facility grants. This action complies with

legislation which authorizes grants for establishing and operating

centers for rural technology or cooperative development. The intended

effect of this action is to publish regulations and application

processing procedures to implement this new grant program to award

fiscal year (FY) 1994 grants before the end of the FY.

DATES: These interim regulations are effective August 12, 1994.

Comments should be in writing and received on or before October 11,

1994.

ADDRESSES: Submit written comments in duplicate to the Office of the

Chief, Regulations Analysis and Control Branch, FmHA, USDA, Room 6348,

South Agriculture Building, 14th and Independence Avenue SW.,

Washington, DC 20250-0700. All written comments made pursuant to this

notice will be available for public inspection during regular working

hours at the above address.

FOR FURTHER INFORMATION CONTACT: Jennifer Barton, Loan Specialist,

Community Facilities Division, Room 6304, South Agriculture Building,

14th and Independence Avenue SW., Washington, DC 20250-0700, Telephone:

(202) 720-1504.

SUPPLEMENTARY INFORMATION:

Cross References of Regulations

The Rural Development Administration is a result of a

reorganization of programs administered by Farmers Home Administration

(FmHA) as required by section 364 of the Consolidated Farm and Rural

Development Act (CONACT), as amended, (7 U.S.C. 2006f) and an order of

the Secretary of Agriculture. Dual-references or cross-references to

FmHA regulations are provided for by section 364.

Classification

This interim rule has been determined to be significant/

economically significant and was reviewed by the Office of Management

and Budget under Executive Order 12866.

Environmental Impact Statement

This document has been reviewed in accordance with 7 CFR part 1940,

subpart G, ``Environmental Program.'' RDA has determined that this

action does not constitute a major Federal action significantly

affecting the quality of the human environment, and in accordance with

the National Environmental Policy Act of 1969, Pub. L. 91-190, an

Environmental Impact Statement is not required.

Executive Order 12778

This document has been reviewed in light of Executive Order (E.O.)

12778 and meets the applicable standards provided in sections 2(a) and

2(b)(2) of that E.O. Provisions within this part which are inconsistent

with State law are controlling. All administrative remedies pursuant to

7 C.F.R. part 1900, subpart B, must be exhausted prior to filing suit.

Intergovernmental Review

This program is listed in the Catalog of Federal Domestic

Assistance under number 10.771, Rural Technology Development Grants,

and are subject to the provisions of Executive Order 12372 which

requires intergovernmental consultation with State and local officials.

RDA conducts intergovernmental consultation in the manner delineated in

FmHA Instruction 1940-J.

Paperwork Reduction Act

The information collection or recordkeeping requirements contained

in these regulations have been approved by the Office of Management and

Budget (OMB) under the provisions of 44 U.S.C. Chapter 35 and have been

assigned OMB control numbers 0575-0018, 0575-0060, and 0570-0006 in

accordance with the Paperwork Reduction Act of 1980. This interim final

rule does not revise or impose any new information collection or

recordkeeping requirement from those approved by OMB.

Justification for Interim Final Rule

It is the policy of the Department that rules relating to public

property, loans, grants, benefits, or contracts shall be published for

public comment not withstanding the exemption of 5 U.S.C. 553 with

respect to such rules. However, the Department is making this action

effective immediately upon publication in the Federal Register without

securing prior public comment.

The purpose of this rule is to implement section 2347 of the Food,

Agriculture, Conservation, and Trade Act of 1990 (Pub. L. 101-624)

which amends Sec. 310B (f) through (h) (7U.S.C. 1932) of the CONACT.

This statutory amendment created a new program for Rural Technology

Grants. In FY 1993, $1 million was appropriated to this program as part

of the Extension Service (ES) budget. Three proposals were selected for

funding under ES administration. The program was transferred to RDA

under a Memorandum of Understanding. ES received another appropriation

in their budget in FY 1994 for $1.5 million. This amount has been

transferred to RDA through an apportionment of funds. RDA is

responsible for implementing this program for FY 1994.

It has been determined that failure to implement the program will

result in a substantial negative impact in the rural areas if grants

from this program are not awarded from the appropriation for FY 1994.

Because the appropriated funds for this program are not available past

the end of FY 1994, it is essential that this authorization be

implemented this year. RDA anticipates receiving a wide range of grant

proposals as compared to the funding availability and expects the level

of competition to be high. These regulations have a sunset provision of

July 13, 1995.

The economies of many rural areas have experienced significant

stress as a result of relying primarily on the agricultural or natural

resource-based industries to provide employment. As the result of

improvements in efficiency and productivity or the decline in

importance of those industries in certain areas, employment

opportunities and the general economy of those areas have declined

significantly. Therefore, immediate implementation of this program will

provide $1.5 million for these needy areas.

Since this is a new program, there is no historical data available

to quantify benefits. However, the benefit to be derived from the

program is the opportunity to create new investment and employment

opportunities in rural areas based on new uses for agricultural or

natural resources, thereby assisting in the diversification of rural

economies, creating new employment opportunities, and simultaneously

developing new markets for agricultural products and natural resources.

The Interim Final Rule describes the procedures and practices for

applying for and obtaining this grant assistance. The Agency, however,

is providing for public comment in order for members of the public who

wish to suggest alternative rule provisions or courses of action in

implementing this program to have an opportunity to give RDA the

benefit of their views. In the event that public comments are received,

the Department will consider them, as appropriate, before further

publishing of this rule.

Program Description

Grants awarded under the Rural Technology Development Grant (RTDG)

program will be to nonprofit institutions and public bodies to

establish and operate centers for rural technology or cooperative

development. The term ``nonprofit institution'' is defined by the

CONACT, Sec. 310B(f)(4)(A) to mean ``* * * any organization or

institution, including an accredited institution of higher education,

no part of the net earnings of which inures, or may lawfully inure, to

the benefit of any private shareholder or individual.'' While this

definition does not include public bodies, the reference to public

bodies in Sec. 310B(f) of the CONACT does indicate congressional intent

to make rural technology development grants available to public bodies.

The term ``public body'' has been defined to mean any State, county,

city, township, incorporated towns and villages, boroughs, authorities,

districts, locally-based areawide economic development organizations,

Indian tribes on Federal and State reservations, and other federally

recognized Indian tribes in rural areas. Furthermore, the Agency

believes public bodies should be eligible because they are eligible for

other RDA programs and could reasonably be expected to operate such

centers.

The statute requires that these centers satisfy certain conditions

in order to be eligible for grant funds. The primary objective of the

program, established by CONACT Sec. 310B(f)(2)(B), is to improve the

economic condition of rural areas by promoting the development (through

technological innovation, cooperative development, and adaptation of

existing technology) and commercialization of: (1) new services and

products that can be produced or provided in rural areas, (2) new

processes that can be utilized in the production of products in rural

areas, and (3) new enterprises that can add value to on-farm production

through processing or marketing. The intent of this law is to provide

incentives to establish new businesses, implement advanced technologies

for businesses presently in place, and create alternative agricultural

enterprises to stimulate the farm economy in the rural areas.

Definitions referenced in the interim rule generally are based on

working definitions used by the Agency or other Federal agencies in

similar grant programs and common usage of the terms. ``Cooperative

development,'' however, was taken from the CONACT, Sec. 310B(f)(2)(B),

and ``technology development'' was taken from the CONACT, Sec.

310B(f)(2)(C)(vi). ``Rural and rural area,'' ``urbanized area,'' and

``urbanizing area'' were taken from related RDA program regulations

also under the authority of the CONACT, Sec. 310B. The term ``United

States'' is defined in accordance with Sec. 310B(f)(4)(B) to mean the

several States, the District of Columbia, the Commonwealth of Puerto

Rico, the Virgin Islands, Guam, American Samoa, and the other

territories and possessions of the United States.

Eligibility

RTDGs may be made to nonprofit institutions and public bodies

serving rural areas. Rural area determinations will be made to

ascertain the eligibility of the applicant's proposed serving area. The

procedure established in this rule to determine eligible grant areas is

based on density requirements used by RDA in other grant programs.

In accordance with the CONACT, Sec. 310B(h), grants may be used to

pay only up to 75 percent of the administrative costs. The Agency has

further determined that to better utilize limited funds available under

the program and to leverage those funds to bring in other sources of

funding for the projects, the maximum grant amount for each proposed

project will not be more than 75 percent of the project costs. This

requirement is considered necessary to stimulate other funding

participation in economic development activities and allow program

grant funds to reach a broader range of rural economic development

efforts. The applicant must contribute at least 25 percent to the cost

of the project and administrative costs. The applicant's contribution

may be in cash or third-party in-kind contributions in accordance with

7 CFR 3015, ``Uniform Federal Assistance Regulations,'' and 3016,

``Uniform Administrative Requirements for Grants and Cooperative

Agreements to State and Local Governments.'' Under 7 CFR 3015 and 3016,

matching funds generally cannot come from another Federal grant

program.

No Federal funds for this program shall be granted to an applicant

who has an outstanding delinquent Federal debt until the delinquent

account has been paid in full, nor shall funds be granted to an

applicant for which an outstanding judgment obtained by the United

States in a Federal Court (other than in the United States Tax Court),

which has been recorded, unless it has been paid in full or otherwise

satisfied, as required by the Federal Debt Collection Act of 1990.

Section 310B(d)(2) further prohibits financial assistance over $1

million, or where direct employment is increased by more than 50

employees, if: (1) it is likely to result in the transfer from one area

to another any employment or business activity, unless it expands

existing businesses or establishes a new location or; (2) it will

increase the production or the availability of services or facilities

in an area which will increase employment and have an adverse effect on

existing competitors.

Application Process

Applications to be submitted must include a clear statement of the

goal(s) and objective(s) of the project and a plan which describes the

proposed project as required by the CONACT, Sec. 310B (f)(2). Such plan

must contain specific elements to be addressed which have been deemed

necessary to carry out the intent of the program and will also serve as

the basis for the selection criteria that will be used to evaluate the

project.

The program objectives and eligible grant purposes based on the

statute are set forth in the interim rule. The Agency has expanded

these eligible purposes to include equipment and materials necessary to

carry out the objectives of the plan. This purpose is incidental and

required to carry out the program's statutory objectives.

Ineligible grant purposes identified in the interim rule are in

accordance with 7 CFR 3015 and 3016 and are consistent with other RDA

grant programs. In addition, RTDG funds may not be provided to support

greater than 75 percent of eligible project costs or to pay for

building construction, the purchase of real estate or vehicles,

improving and/or renovation of office space, or repair or maintenance

of privately-owned property. Due to the limited funding available,

these limitations are necessary to benefit as many eligible projects as

possible.

Application requirements include submission of an SF-424,

``Application for Federal Assistance,'' and other supporting

documentation. The information required is consistent with RDA's other

grant programs. The application process for RTDG funds is a two-stage

process. Preapplications are submitted to determine applicant

eligibility. Upon an eligibility determination, applications are

submitted to process for competitive project selection. All supporting

documentation required in connection with the preapplication/

application are necessary for RDA to determine if the applicant is

eligible, if the proposed grant purposes are eligible, and to help the

Agency select the best grant applications for funding. RDA is

simultaneously publishing in this issue of the Federal Register a

Notice (inviting applications) that contains more specific guidance on

submission of applications for FY 1994.

Project Selection

Section 310B(f)(3) of the CONACT limits the Agency's discretion in

selecting eligible projects for funding. Grants shall be made on a

competitive basis. Preferences will be given to support projects that

most effectively improve business, industry, and employment in rural

areas. Emphasis for project selection will be given to those projects

that ``* * * contribute the most to the improvement of economic

conditions of rural areas. * * *'' The Agency has interpreted this

statutory phrase to establish preferences for projects that will create

industries or agribusinesses, increase employment, stem the flow of

outmigration, and increase the tax base in the areas to be served. The

applicant must provide data to support these criteria for the most

current full calendar year for which data is available and the 3 prior

calendar years. This range of information should provide an accurate

picture of the economic conditions of the rural areas to be served. The

Agency is placing an emphasis on these criteria based on the purposes

and objectives set forth in the statute. The actual number of proposals

to receive funding will depend on the total number of applications

received and the amount of grant funds requested. Projects will be

selected based on a priority point system set out in the regulation.

The point system emphasizes those factors given preference by statute.

Points will be totalled and ranked with other applications. This

selection method has been successful in other grant programs

administered by the Agency and is considered the best method to use for

this program.

RDA monitors and evaluates each project it approves in accordance

with 7 CFR 3015 and 3016. Monitoring typically involves site visits by

RDA staff and designated evaluators, telephone conversations, and

evaluation of the grantee's written activity reports. Activity reports

are used to evaluate projects and must be in a measurable form.

Termination of grant provisions are in accordance with 7 CFR 3015 and

3016. These provisions are consistent with other RDA grant programs.

Miscellaneous

Recipients and subrecipients are subject to all applicable Federal

laws, Federal and USDA policies, regulations, and procedures applicable

to Federal financial assistance. Requirements concerning civil rights,

the environment, debarment and suspension, etc., have been listed in

this rule. These restrictions are consistent with other RDA grant

programs.

List of Subjects

7 CFR Part 1901

Agriculture, Authority delegations, Civil rights, Compliance

reviews, Fair housing, Minority groups.

7 CFR Part 1940

Allocations, Administrative practice and procedure, Agriculture,

Grant programs--Housing and community development, Loan programs--

Agriculture, Rural areas.

7 CFR Part 1951

Account servicing, Grant programs--Housing and community

development, Reporting requirements, Rural areas.

7 CFR Part 2003

Organization and functions (Government agencies).

7 CFR Part 4284

Business and industry; Grant programs--Housing and community

development; Rural areas.

Therefore, chapters XVIII and XLII, title 7, Code of Federal

Regulations, are amended as follows:

PART 1901--PROGRAM-RELATED INSTRUCTIONS

1. The authority citation for part 1901, subpart E, continues to

read as follows:

Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 40 U.S.C. 442; 5

U.S.C. 301; 42 U.S.C. 2942; 7 C.F.R. 2.23; 7 CFR 2.70.

Subpart E--Civil Rights Compliance Requirements *C*

2. Section 1901.204 is amended by adding a paragraph (a)(27) to

read as follows:

Sec. 1901.204 Compliance reviews.

(a) * * *

(27) Rural Technology Development Grants in subpart F of part 4284

of this title.

* * * * *

PART 1940--GENERAL

3. The authority citation for part 1940 continues to read as

follows:

Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR

2.23; 7 CFR 2.70.

Subpart L--Methodology and Formulas for Allocation of Loan and Grant

Program Funds

4. Section 1940.590 is amended by adding paragraph (j) to read as

follows:

Sec. 1940.590 Community and Business Programs appropriations not

allocated by State.

* * * * *

(j) Rural Technology Development Grants. Control of funds will be

retained in the National Office and allocated on a project case basis.

Funds may be requested by sending in Exhibit C of subpart F of part

4284 of this title (available in any FmHA State Office).

PART 1951--SERVICING AND COLLECTIONS

5. The authority citation for part 1951 continues to read as

follows:

Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR

2.23 and 7 CFR 2.70.

Subpart E--Servicing of Community and Insured Business Programs

Loans and Grants

Sec. 1951.201 [Amended]

6. Section 1951.201 is amended by removing the word ``and'' before

the words ``Section 306C'' and by adding the words ``; and Rural

Technology Development Grants in subpart F of part 4284 of this title''

after the words ``subpart E of part 4284 of this title''.

PART 2003--ORGANIZATION

7. The authority citation for part 2003 continues to read as

follows:

Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; Public

Law 100-82, 7 CFR 2.23 and 2.70.

Subpart A--Functional Organization of the Farmers Home

Administration

8. Exhibit A of subpart A, paragraph 2 under the heading of 07 02

03 Assistant Administrator--Community and Business Programs is amended

by adding the words ``rural technology development grants,'' after the

words ``rural business enterprise/television demonstration grants.''

PART 4284--GRANTS

9. The authority citation for part 4284 continues to read as

follows:

Authority: 7 U.S.C. 1989; 16 U.S.C. 1005; 5 U.S.C. 301; 7 CFR

2.70.

Subpart F--Rural Technology Development Grants

10. Subpart F of part 4284, consisting of Secs. 4284.501 through

4284.600, is added to read as follows:

Subpart F--Rural Technology Development Grants

Table of Contents

Sec.

4284.501 Purpose.

4284.502 Policy.

4284.503 [Reserved]

4284.504 Definitions.

4284.505 Applicant eligibility.

4284.506-4284.514 [Reserved]

4284.515 Grant purposes.

4284.516 Ineligible grant purposes.

4284.517-4284.526 [Reserved]

4284.527 Other considerations.

4284.528 Application processing.

4284.529-4284.539 [Reserved]

4284.540 Grant selection criteria.

4284.541 Grant approval, fund obligation, grant closing, and third-

party financial assistance.

4284.542-4284.555 [Reserved]

4284.556 Docket preparation and Letter of Conditions.

4284.557 Fund disbursement.

4284.558 Reporting.

4284.559-4284.570 [Reserved]

4284.571 Audit requirements.

4284.572 Grant servicing.

4284.573 Programmatic changes.

4284.574 Subsequent grants.

4284.575 Grant suspension, termination, and cancellation.

4284.576-4284.586 [Reserved]

4284.587 Exception authority.

4284.588 Forms and exhibits.

4284.589-4284.599 [Reserved]

4284.600 OMB control number.

Exhibit A to Subpart F--Agreement of Administrative Requirements for

Rural Technology Development Grants

Subpart F--Rural Technology Development Grants

Sec. 4284.501 Purpose.

(a) This subpart outlines the Rural Development Administration's

(RDA) policies and authorizations and sets forth procedures to provide

grants for technology and cooperative development in rural areas.

Grants will not be awarded under this subpart after July 13, 1995.

(b) Grants for establishing and operating centers for rural

technology or cooperative development will be for the primary purpose

of improving the economic condition of rural areas by promoting the

development (through technological innovation, cooperative development,

and adaptation of existing technology) and commercialization of new

services and products that can be produced or provided in rural areas;

new processes that can be utilized in the production of products in

rural areas; and new enterprises that can add value to on-farm

production through processing or marketing.

(c) Copies of all forms and Instructions referenced in this subpart

are available in any Farmers Home Administration (FmHA) State Office.

Sec. 4284.502 Policy.

(a) The grant program will be used to assist in the economic

development of rural areas.

(b) Funds allocated for use in accordance with this subpart are

also to be considered for use by Native American tribes within the

State regardless of whether State development strategies include Indian

reservations within the State's boundaries. Native American tribes

residing on such reservations must have equal opportunity along with

other rural residents to participate in the benefits of these programs.

This includes equal application of outreach activities of RDA servicing

offices.

Sec. 4284.503 [Reserved]

Sec. 4284.504 Definitions.

Approval official--Any authorized FmHA/RDA official.

Cooperative--An association organized to provide a specific service

with open membership, equality in ownership and control, limited return

on members' capital, and equitable methods to distribute any excess

earnings back to its members.

Cooperative development--The startup or expansion of a cooperative

which will promote the development of new services and products that

can be produced or provided in rural areas, new processes that can be

utilized in the production of products in rural areas, and/or new

enterprises that can add value to on-farm production through processing

or marketing.

Economic development--The growth of an area as evidenced by

increases in total income, employment opportunities, decreased

outmigration of populations, value of production, increased

diversification of industry, higher labor force participation rates,

increased duration of employment, higher wage levels, and/or gains in

other measurements of economic activity, such as land values.

Nonprofit institutions--Any organization or institution, including

an accredited institution of higher education, no part of the net

earnings of which inures, or may lawfully inure, to the benefit of any

private shareholder or individual.

Project--The undertaking for which funds will be used to develop or

operate a technology and/or cooperative development center.

Public body--Any State, county, city, township, incorporated towns

and villages, boroughs, authorities, districts, locally-based areawide

economic development organizations, and Indian tribes on Federal and

State reservations, and other federally recognized Indian tribes in

rural areas.

Servicing office--Any FmHA State Office.

Small business--A business which does not exceed the maximum number

of employees or annual receipts allowed for a concern (including its

affiliates) to be considered small according to the established size

standards for Small Business Administration (SBA) assistance as set

forth in 13 CFR, part 121. The business may be operated on a profit or

nonprofit basis but must rely primarily on revenues of the business for

operation.

Technology--The application of science to industrial or commercial

objectives. The entire body of methods and material used to achieve

such objectives.

Technology development--The creation of new technology or the use

and application of existing technology to promote the development and

commercialization of new products, new processes, and new services that

can be produced or provided in rural areas.

Rural and rural area--Includes all territory of a State, the

Commonwealth of Puerto Rico, the Virgin Islands of the United States,

Guam, American Samoa, or the Commonwealth of the Mariana Islands that

is not within the outer boundary of any city having a population of

50,000 or more and its immediately adjacent urbanized and urbanizing

areas with a population density of more than 100 persons per square

mile, as determined by the Secretary of Agriculture according to the

latest decennial census of the United States.

Urbanized area--An area immediately adjacent to a city having a

population of 50,000 or more which, for general social and economic

purposes, constitutes a single community and has a boundary contiguous

with that of the city. Such community may be incorporated or

unincorporated to extend from the contiguous boundary(ies) to

recognizable open country, less densely settled areas, or natural

boundaries such as forests or water. Minor open spaces such as

airports, industrial sites, recreational facilities, or public parks

shall be disregarded. Outer boundaries of an incorporated community

extend at least to its legal boundaries. Cities which may have a

contiguous border with another city, but are located across a river

from such city, are recognized as a separate community and are not

otherwise considered a part of an urbanized or urbanizing area, as

defined in this section, are not in a nonrural area.

Urbanizing area--A community which is not now, or within the

foreseeable future not likely to be, clearly separate from and

independent of a city of 50,000 or more population and its immediately

adjacent urbanized areas. A community is considered ``separate from''

when it is separated from the city and its immediately adjacent

urbanized area by open country, less densely settled areas, or natural

barriers such as forests or water. Minor open spaces such as airports,

industrial sites, recreational facilities, or public parks shall be

disregarded. A community is considered ``independent of'' when its

social and economic structure (e.g., government; educational, health,

and recreational facilities; and business; industry, tax base, and

employment opportunities) is not primarily dependent on the city and

its immediately adjacent urbanized areas.

Sec. 4284.505 Applicant eligibility.

(a) Grants may be made to public bodies or nonprofit institutions.

(1) The approval official will proceed as follows in rural area

determinations: When the approval official determines an area to be

urbanized or urbanizing, he/she must then determine the population

density per square mile. If the project otherwise appears to be

eligible, the approval official will request the National Office to

provide the correct density figure.

(2) All such density determinations will be made on the basis of

minor civil division or census county division as used by the Bureau of

the Census. In making the density calculations, large nonresidential

tracts devoted to urban land uses such as railroad yards, airports,

industrial sites, parks, golf courses, and cemeteries or land set aside

for such purposes will be excluded.

(b) An outstanding judgement obtained against an applicant by the

United States in a Federal Court (other than in the United States Tax

Court), which has been recorded, shall cause the applicant to be

ineligible to receive any grant or loan until the judgement is paid in

full or otherwise satisfied. RDA grant funds may not be used to satisfy

the judgement. Questions about whether or not a judgement is still

outstanding should be directed to the Office of the General Counsel

(OGC).

Secs. 4284.506-4284.514 [Reserved]

Sec. 4284.515 Grant purposes.

Grant funds may be used to pay up to 75 percent of the costs for

establishing and/or operating centers for rural technology and/or

cooperative development. Applicant's contribution may be in cash or

third-party in-kind contribution in accordance with parts 3015 and 3016

of this title. Grant funds may be used for, but are not limited to, the

following purposes:

(a) Technology research, investigations, and basic feasibility

studies in any field or discipline for the purpose of generating

principles, facts, technical knowledge, new technology, or other

information that may be useful to rural industries, cooperatives,

agribusinesses, and other persons or entities in rural areas served by

such centers in the development and commercialization of new products,

processes, or services.

(b) The collection, interpretation, and dissemination of

principles, facts, technical knowledge, new technology, or other

information that may be useful to rural industries, cooperatives,

agribusinesses, and other persons or entities in rural areas served by

the center in the development and commercialization of new products,

processes, or services.

(c) Providing training and instruction for individuals residing in

rural areas served by the center with respect to the development

(through technological innovation, cooperative development, and

adaptation of existing technology) and commercialization of new

products, processes, or services.

(d) Providing loans and grants to individuals, small businesses,

and cooperatives in rural areas for purposes of generating, evaluating,

developing and commercializing new products, processes, or services.

(e) Providing technical assistance and advisory services to

individuals, small businesses, cooperatives, and industries in rural

areas served by the center for purposes of developing and

commercializing new products, processes, or services.

(f) Providing research and support to individuals, small

businesses, cooperatives, and industries in rural areas served by the

center for purposes of developing new agricultural enterprises to add

value to on-farm production through processing or marketing.

(g) Paying up to 75 percent of the administrative costs of the

applicant in carrying out its projects.

(h) Equipment and materials necessary to carry out other eligible

grant purposes under this section.

Sec. 4284.516 Ineligible grant purposes.

Grant funds may not be used to:

(a) Pay more than 75 percent of a project cost.

(b) Pay more than 75 percent of administrative costs.

(c) Duplicate current services or replace or substitute support

previously provided.

(d) Pay costs of preparing the application package for funding

under this program.

(e) Pay costs incurred prior to the effective date of the grant

made under this subpart.

(f) Pay for building construction or the purchase of real estate or

vehicles; improving and/or renovation of office space; or repair or

maintenance of privately-owned property.

(g) Fund political activities.

(h) Pay for assistance to any private business enterprise which

does not have at least 51 percent ownership by those who are either

citizens of the United States or reside in the United States after

being legally admitted for permanent residence.

Secs. 4284.517-4284.526 [Reserved]

Sec. 4284.527 Other considerations.

(a) Civil rights compliance requirements. All grants made under

this subpart are subject to the requirements of Title VI of the Civil

Rights Act of 1964 which prohibits discrimination on the basis of race,

color, and national origin as outlined in subpart E of part 1901 of

this title. In addition, the grants made under this subpart are subject

to the requirements of section 504 of the Rehabilitation Act of 1973

which prohibits discrimination on the basis of handicap; the

requirements of the Age Discrimination Act of 1975 which prohibits

discrimination on the basis of age; and Title III of the Americans with

Disabilities Act, Pub. L. 101-336, which prohibits discrimination on

the basis of disability by private entities in places of public

accommodations.

(b) Environmental requirements. (1) General applicability. Unless

specifically modified by this section, the requirements of subpart G of

part 1940 of this title apply to this subpart. RDA will give particular

emphasis to ensuring compliance with the environmental policies

contained in Secs. 1940.303 and 1940.304 of subpart G of part 1940 of

this title. Although the purpose of the grant program established by

this subpart is to improve business, industry, and employment in rural

areas, this purpose is to be achieved, to the extent practicable,

without adversely affecting important environmental resources of rural

areas such as important farmland and forest lands, prime rangelands,

wetlands, and floodplains. Prospective recipients of grants, therefore,

must consider the potential environmental impacts of their applications

at the earliest planning stages and develop plans and projects that

minimize the potential to adversely impact on the environment.

(2) Technical assistance. An application for a technical assistance

project is generally excluded from the environmental review process by

Sec. 1940.333 of subpart G of part 1940 of this title. However, as

further specified in that section, the grantee of a technical

assistance grant, in the process of providing technical assistance,

must consider the potential environmental impacts of the

recommendations provided to the recipient of the technical assistance.

(3) Applications for grants to provide financial assistance to

third-party recipients. As part of the preapplication, the applicant

must provide a complete Form FmHA 1940-20, ``Request for Environmental

Information,'' for each project specifically identified in its plan to

provide financial assistance to third parties who will undertake

eligible projects with such assistance. RDA will review the

preapplication, supporting materials, and any required Forms FmHA 1940-

20 and initiate a Class II assessment for the preapplication in

accordance with Sec. 1940.318 of subpart G of part 1940 of this title.

This assessment will focus on the potential cumulative impacts of the

projects as well as any environmental concerns or problems that are

associated with individual projects and that can be identified at this

time from the information submitted. Because RDA's approval of this

type of grant application does not constitute RDA's commitment to the

use of grant funds for any identified third-party projects (see

Sec. 4284.541 of this subpart), no public notification requirements for

a Class II assessment will apply to the preapplication. After the grant

is approved, each third-party project to be assisted under the grant

will undergo the applicable environmental review and public

notification requirements in subpart G of part 1940 of this title prior

to RDA providing its consent to the grantee to assist the third-party

project. If the preapplication reflects only one specific project which

is specifically identified as the third-party recipient for financial

assistance, RDA may perform the appropriate environmental assessment in

accordance with the requirements of subpart G of part 1940 of this

title and forego initiating a Class II assessment with no public

notification. However, the applicant must be advised that if the

recipient or project changes after the grant is approved, the project

to be assisted under the grant will undergo the applicable

environmental review and public notification requirements in subpart G

of part 1940 of this title.

(c) Governmentwide debarment and suspension (nonprocurement) and

requirements for drug-free workplace. All projects must comply with the

requirements set forth in part 3017 of this title and FmHA Instruction

1940-M (available in any FmHA State Office).

(d) Restrictions on lobbying. All grants must comply with the

lobbying restrictions set forth in part 3018 of this title.

(e) Excess capacity or transfer of employment.

(1) If a proposed grant is for more than $1 million and will

increase direct employment by more than 50 employees, the applicant

will be requested to provide written support for an RDA determination

that the proposal will not result in a project which is calculated to,

or likely to, result in:

(i) The transfer of any employment or business activity from one

area to another (this limitation shall not prohibit assistance for the

expansion of an existing business entity through the establishment of a

new branch, affiliate, or subsidiary of such entity if the expansion

will not result in an increase in the unemployment in the area of

original location or in any other area where such entity conducts

business operations unless there is reason to believe that such

expansion is being established with the intention of closing down the

operations of the existing business entity in the area of its original

location or in any other area where it conducts such operations), or

(ii) An increase in the production of goods, materials, or

commodities or the availability of services or facilities in the area

when there is not sufficient demand for such goods, materials,

commodities, services, or facilities to employ the efficient capacity

of existing competitive commercial or industrial enterprises, unless

such financial or other assistance will not have an adverse effect upon

existing competitive enterprises in the area. The applicant's written

support will consist of a resolution from the applicant and Form FmHA

449-22, ``Certification of Non-Relocation and Market and Capacity

Information Report,'' from each existing and future occupant of the

site. The applicant may use Guide 2 of subpart G of part 1942

(available in any FmHA State Office) as an example in preparing the

resolution. Future occupants of the site must be certified by the

Department of Labor (DOL) for a period of 3 years after the initial

certification by DOL.

(2) RDA will check each document for completeness and accuracy and

submit nine copies of each to the National Office for forwarding to

DOL.

(3) Grants shall not be made if the Secretary of Labor certifies

within 30 days after the matter has been submitted by the Secretary of

Agriculture that the provisions of paragraph (e)(1) of this section

have not been met. Information for obtaining this certification will be

submitted, in writing, by the applicant to RDA. The information will be

submitted to DOL by the RDA National Office. Grant approval may be

given and funds may be obligated, subject to the DOL certification

being received, provided RDA has made its own separate determinations

of (e)(1) (i) and (ii) of this section when applicable.

(f) Management assistance. Grant recipients will be supervised, as

necessary, to ensure that projects are completed in accordance with

approved plans and specifications and that funds are expended for

approved purposes. Grants made under this subpart will be administered

under, and are subject to, parts 3015, 3016, and 3017 of this title, as

appropriate, and established RDA guidelines.

(g) National Historic Preservation Act of 1966. All projects will

be in compliance with the National Historic Preservation Act of 1966 in

accordance with subpart F of part 1901 of this title.

(h) Uniform Relocation Assistance and Real Property Acquisition

Policies Act. All projects must comply with the requirements set forth

in part 21 of this title.

(i) Floodplains and wetlands. All projects must comply with

Executive Order 11988, ``Floodplain Management,'' and Executive Order

11990, ``Protection of Wetlands.''

(j) Flood or mudslide hazard area precautions. If the grantee

financed project is in a flood or mudslide area, flood or mudslide

insurance must be provided.

(k) Termination of Federal requirements. Once the grantee has

provided assistance to projects from a revolving fund, in an amount

equal to the grant provided by RDA, the requirements imposed on the

grantee shall not be applicable to any new projects thereafter financed

from the revolving funds. Such new projects shall not be considered as

being derived from Federal funds.

(l) Intergovernmental review. Grant projects are subject to the

provisions of Executive Order 12372 which requires intergovernmental

consultation with State and local officials. A revolving fund

established in whole, or in part, with grant funds will also be

considered a project for the purpose of intergovernmental review as

well as the specific projects funded with grant funds from the

revolving loan project. For each project to be assisted with a grant

under this subpart and for which the State has elected to review the

project under their intergovernmental review process, the State Point

of Contact must be notified. Notification, in the form of a project

description, can be initiated by the grantee. Any comments from the

State must be included with the grantee's request to use RDA grant

funds for the specific project. Prior to RDA's decision on the request,

compliance with requirements of intergovernmental consultation must be

demonstrated for each project. These requirements should be carried out

in accordance with subpart V, ``Intergovernmental Review of Department

of Agriculture Programs and Activities,'' of part 3015 of this title

(see subpart J of part 1940 of this title, available in any FmHA State

Office).

Sec. 4284.528 Application processing.

(a) Preapplications. (1) Applicants will file an original and one

copy of Standard Form (SF) 424.1, ``Application for Federal Assistance

(For Non-construction),'' with the appropriate RDA office. This form is

available in any FmHA State Office.

(2) All preapplications shall be accompanied by:

(i) Evidence of applicant's legal existence and authority to

perform the proposed activities under the grant.

(ii) Latest financial information to show the organization's

financial capacity to carry out the proposed work. At a minimum, the

information should include a balance sheet and an income statement. A

current audit report is preferred where one is reasonably obtainable.

(iii) Estimated breakdown of total costs, including costs to be

funded by the applicant as well as other sources. Other sources should

be identified. Certification must be provided from the applicant that

its matching share to the project is available and will be used for the

project. The matching share must meet the requirements of parts 3015

and 3016 of this title. Certifications from an authorized

representative of each source of funds must be provided indicating that

funds are available and will be used for the proposed project.

(iv) Budget and description of the accounting system in place or

proposed.

(v) Area to be served, identifying each government unit, i.e.,

town, county, etc., if affected by the proposed project and evidence of

support and concurrence in the proposed project from the affected local

governmental bodies as evidenced by resolution or a written statement

from the chief elected local official.

(vi) The most current demographic information (and source) about

the area to be served which includes information on the rural

industries and agribusinesses in the area; unemployment rate;

description of under employment in the area; information regarding

outmigration of people, businesses and industries; and the per capita

income of the area. The source of information and dates must be

identified and must be from a recognized source such as Census data or

State employment data.

(vii) Businesses to be assisted.

(viii) Applicant's experience, including experience of key staff

members and person(s) who will be providing the proposed service(s) and

managing the project.

(ix) The number of months duration of the project or service and

the estimated time it will take from grant approval to beginning of

service.

(x) Method and rationale used to select the areas/businesses that

will receive the service.

(xi) Brief description of how the work will be performed and

whether organizational staff or consultants/contractors will be used.

(xii) Evaluation method to be used by the applicant to determine if

objectives of the proposed activity are being accomplished.

(xiii) A brief plan which contains the following provisions and

describes how the applicant will meet those provisions:

(A) A provision that substantiates that the applicant will

effectively serve rural areas in the United States.

(B) A provision that the primary objective of the applicant will be

to improve the economic condition of rural areas by promoting the

development (through technological innovation, cooperative development,

and adaptation of existing technology) and commercialization of:

(1) New services and products that can be produced or provided in

rural areas;

(2) New processes that can be utilized in the production of

products in rural areas; and

(3) New enterprises that can add value to on-farm production

through processing or marketing.

(C) A description of the activities that the applicant will carry

out to accomplish such objective.

(D) A description of the proposed activities to be funded under

this subpart.

(E) A description of the contributions that the applicant's

proposed activities are likely to make to the improvement of the

economic conditions of the rural areas served by the applicant.

(F) Provisions that the applicant, in carrying out its activities,

will seek, where appropriate, the advice, participation, expertise, and

assistance of representatives of business, industry, educational

institutions, the Federal Government, and State and local governments.

(G) Provisions that the applicant will consult with any college or

university administering Extension Service programs and cooperate with

such college or university in the coordination of the center's

activities and programs.

(H) Provisions that the applicant will take all practicable steps

to develop continuing sources of financial support for the center,

particularly from sources in the private sector.

(I) Provisions for:

(1) Monitoring and evaluating its activities; and

(2) Accounting for money received and expended by the institution

under this subpart.

(J) Provisions that the applicant will provide for the optimal

application of technology and cooperative development in rural areas,

especially those areas adversely affected by adverse agricultural

economic conditions, through the establishment of demonstration

projects and subcenters for:

(1) Rural technology development where the technology can be

implemented by communities, community colleges, businesses,

cooperatives, and other institutions; or

(2) Cooperative development where such development can be

implemented by cooperatives to improve local economic conditions.

(xiv) If grant funds are to be used for the purpose of making loans

and/or grants to eligible individuals, small businesses, or

cooperatives (ultimate recipients) in rural areas for eligible purposes

under this subpart, the applicant shall develop a plan which outlines

the purpose and administration of the fund and include in the

preapplication a copy of a proposed agreement to be used between the

applicant and the ultimate recipient(s) which includes the following:

(A) An assurance that the responsibilities of the grantee, as a

recipient of grant funds under this subpart, are passed on to the

ultimate recipient and the ultimate recipient understands its

responsibilities to comply with the requirements set forth in this

subpart, including parts 3015 and 3016 of this title.

(B) Provisions that the ultimate recipient will comply with

debarment and suspension requirements contained in part 3017 of this

title and will execute Form AD-1048, ``Certification Regarding

Debarment, Suspension, Ineligibility and Voluntary Exclusion--Lower

Tier Covered Transactions.''

(C) Provisions that the ultimate recipient will execute Form FmHA

400-4, ``Assurance Agreement.''

(D) Clear documentation that the ultimate recipient understands its

responsibilities to the applicant.

(E) Clear documentation that the applicant understands its

responsibilities in monitoring the ultimate recipient's activities

under the grant and the applicant's plan for such monitoring.

(F) Brief written narrative addressing all items in

Sec. 4284.540(a) of this subpart, regarding grant selection criteria.

(3) Upon receipt of a preapplication, RDA will:

(i) Review and evaluate the preapplication and accompanying

documents;

(ii) Request from the OGC, a legal determination of the applicant's

legal existence and authority to perform the proposed activity; and

(iii) Respond to the applicant (usually within 45 days) using Form

AD-622, ``Notice of Preapplication Review Action,'' indicating the

action taken on the preapplication.

(4) Applicants whose preapplications are found to be ineligible

will be given notice by use of Form AD-622 and advised of their appeal

rights under subpart B of part 1900 of this title.

(5) If at any time prior to grant approval it is decided that

favorable action will not be taken on a preapplication or application,

the RDA will notify the applicant in writing of the reasons why the

request was not favorably considered. The notification will advise the

applicant of appeal rights under subpart B of part 1900 of this title.

(6) Applicants eligible for funding within the available funds will

be provided forms and instructions for filing a complete application.

Applicants should be advised against incurring obligations which cannot

be fulfilled without RDA funds.

(b) Applications. Upon notification on Form AD-622 that the

applicant is eligible for funding, the following will be submitted to

the RDA by the applicant:

(1) SF 424.1.

(2) Proposed scope of work, detailing the proposed activities to be

accomplished and timeframes for completion of each activity.

(3) Proposed budget, including source and amount of applicant

contribution and any other funding sources for the proposed project.

(4) Other requested information needed by RDA to make a grant award

determination.

(c) Applicant response. If the applicant fails to submit the

application and related material by the date shown on Form AD-622

(normally 30 days from the date of Form AD-622), RDA may discontinue

consideration of the application. Appeal rights will be given in

accordance with subpart B of part 1900 of this title.

Secs. 4284.529-4284.539 [Reserved]

Sec. 4284.540 Grant selection criteria.

Grants will be awarded under this subpart on a competitive basis.

The priorities described below will be used by the RDA to rate

preapplications and applications. Points will be distributed as

indicated in paragraph (a) of this section. Points will be distributed

according to ranking as compared with other preapplications/

applications on hand. A copy of the score sheet (available in any FmHA

State Office) should be placed in the casefile for future reference.

(a) The selection criteria are as follows:

(1) Economic conditions. Preference will be given to proposed

projects which will serve a rural area(s) that has few rural industries

and agribusinesses; high levels of unemployment or underemployment;

high rates of outmigration of people, businesses, and industries; and

low levels of per capita income. RDA will consider data supporting

these demographics from the United States Bureau of the Census or other

reliable data from recognized local, regional, State or Federal sources

or from surveys conducted by reliable, impartial sources. Outmigration

of businesses and industries, for example, may be supported by county

business patterns data available from the Bureau of the Census. Data to

support all categories must be for the most current full calendar year

for which the data is available and the 3 calendar years prior to that

year. The competitive range for proposed projects is as follows:

(i) Number of rural industries and agribusinesses in comparison

with the population of the area(s) to be served: 1 or less per 5,000

residents--25 points; 1 or less per 3,000 residents--15 points; or 1 or

less per 1,000 residents--5 points.

(ii) Unemployment rate in the area(s) to be served: Exceeds the

State rate by 25 percent or more--15 points; or exceeds the State rate

by less than 25 percent but more than 5 percent--10 points.

(iii) Underemployment in the area(s) to be served exceeds the State

rate of underemployment by 25 percent or more--20 points; exceeds the

State rate by less than 25 percent--10 points; or is equal to or less

than State rate--0 points.

(iv) Outmigration of rural residents from the area(s) as evidenced

by a population loss in the last full calendar year of at least 20

percent--20 points.

(v) Outmigration of business and industry and/or business and

industry closures in the area(s) of at least 20 percent in the last 3

years--20 points.

(vi) Average per capita income of the area(s) is less than the

State average by: 50 percent--25 points; or 25 percent--10 points.

(2) Project proposal. The project proposal will contribute the most

to the improvement of economic conditions of the rural area(s) by:

(i) Creation of industries or agribusinesses in the area(s): 1 or

more per 5,000 residents--20 points; 1 or more per 10,000 residents--10

points; or 1 or more per 20,000 residents--5 points.

(ii) Increasing employment by 10 percent or more--10 points.

(iii) Stemming the flow of outmigration of people, businesses, or

industries by 10 percent or more--10 points.

(iv) Increasing the tax base of the area(s) by 2 percent or more--5

points.

(3) Applicant experience. The applicant demonstrates capability to

transfer for practical application in rural areas the technology

generated and demonstrates the ability to commercialize products,

processes, services, and enterprises in rural areas--15 points.

(b) Review of decision. Each application for assistance will be

carefully reviewed in accordance with the priorities established in

this section. A priority rating will be assigned to each application.

Applications selected for funding will be based on the priority rating

assigned each application and the total funds available. All

applications submitted for funding should contain sufficient

information to permit RDA to complete a thorough priority rating. When

a determination is made that favorable action will not be taken on a

preapplication or application, the applicant will be notified in

writing of the reasons why the request was not favorably considered.

The notification to the applicant will state that a review of this

decision by RDA may be requested by the applicant in accordance with

subpart B of part 1900 of this title.

Sec. 4284.541 Grant approval, fund obligation, grant closing, and

third-party financial assistance.

(a) [Reserved]

(b) [Reserved]

(c) A copy of the executed Form FmHA 1940-1, ``Request for

Obligation of Funds,'' and the approved scope of work will be sent to

the applicant on the obligation date. The grant will be considered

closed on the obligation date. Exhibit A of this subpart, shall become

a permanent part of Form FmHA 1940-1 when grant funds are involved, and

the following paragraphs will appear in the comment section of that

form as appropriate:

(1) ``The grantee understands the requirements for receipt of funds

under the Rural Technology Development Grant program. The grantee

assures and certifies that it is in compliance with all applicable

laws, regulations, Executive Orders, and other generally applicable

requirements, including those set forth in exhibit A of subpart F of

part 4284 of this chapter, 7 CFR parts 3015, 3016, 3017, and 3018

(including revisions through ________________ (date of grant

approval)); and the Letter of Conditions and the approved scope of

work.''

(2) For grants involving the establishment of a revolving loan

program to benefit third parties, the following statement shall also be

added to the comment section of Form FmHA 1940-1: ``The grantee

furthermore agrees to use grant funds for the purposes outlined in the

Scope of Work approved by RDA.''

Secs. 4284.542-4284.555 [Reserved]

Sec. 4284.556 Docket preparation and Letter of Conditions.

(a) The following forms and documents will be part of the grant

docket:

(1) Form FmHA 400-4 for the applicant and recipients of the

technical assistance or loans under a revolving loan fund.

(2) Scope of work and budget prepared by the applicant.

(3) Form FmHA 1940-1.

(4) Resolution of the Board, if appropriate, approving the grant

application.

(5) Evidence of authority for individual, in the applicant's

organization, to execute grant documents.

(6) Evidence of fidelity bond coverage.

(7) Form FmHA 1942-43, ``Project Summary--Community Facilities

(Other Than Utility-Type Projects).''

(8) Executed Forms AD-1047, ``Certification Regarding Debarment,

Suspension, and Other Responsibility Matters--Primary Covered

Transactions,'' and AD-1049, ``Certification Regarding Drug-Free

Workplace Requirements (Grants) Alternative I--For Grantees Other Than

Individuals.''

(9) Executed certification in accordance with part 3018, appendix A

of this title, that no Federal appropriated funds have been paid or

will be paid for lobbying activities and Form LLL, ``Disclosure of

Lobbying Activities.''

(10) Proposed agreement between applicant and ultimate recipient as

required in Sec. 4284.528(a)(2)(xiv) of this subpart (if applicable).

(11) Class II Environmental Assessment (if applicable).

(12) Finding of No Significant Impact (if applicable).

(13) Form FmHA 400-8, ``Compliance Review (Nondiscrimination by

Recipients of Financial Assistance through Farmers Home

Administration.)''

(b) The RDA representative will prepare a Letter of Conditions

outlining the conditions under which the grant will be made. It will

include those matters necessary to ensure that the proposed grant is

completed in accordance with the terms of the scope of work and budget,

that the grant funds are expended for authorized purposes, and that the

requirements prescribed in parts 3015, 3016, 3017, and 3018 of this

title are complied with. Each Letter of Conditions will contain the

following paragraphs:

(1) ``This letter establishes conditions which must be understood

and agreed to by you before further consideration may be given to the

application.''

(2) ``This letter is not to be considered as grant approval nor as

a representation as to the availability of funds. The docket may be

completed on the basis of a grant not to exceed $________________ and a

matching share by the applicant in the amount of $________________.''

(3) ``Please complete and return the attached Form FmHA 1942-46,

`Letter of Intent to Meet Conditions,' if you desire further

consideration be given your application.''

(4) ``You must certify that the activities provided under the grant

will benefit a rural area.''

(5) ``You must certify that at least 25 percent of the total funds

for this project are provided as the grantee's share and meet the

matching fund requirements of 7 CFR parts 3015 and 3016.''

(6) ``You must certify that no Federal appropriated funds have been

paid or will be paid for lobbying activities in accordance with 7 CFR

part 3018, Appendix A, and execute Form LLL.''

(7) ``You must execute Form AD-1047, `Certification Regarding

Debarment, Suspension, and Other Responsibility Matters--Primary

Covered Transactions,' to certify that your organization is not

debarred or suspended from Government assistance. You also must obtain

a certification on Form AD-1048, `Certification Regarding Debarment,

Suspension, Ineligibility and Voluntary Exclusion--Lower Tier Covered

Transactions,' from any person or entity you do business with as a

result of this Government assistance that they are not debarred or

suspended from Government assistance.''

(8) ``You must execute Form AD-1049, `Certification Regarding Drug-

Free Workplace Requirements (Grants) Alternative I--For Grantees Other

Than Individuals,' to certify that you will provide a drug-free

awareness program for employees.''

(9) ``You must obtain prior approval for any change to the scope or

objectives of the approved project. Failure to obtain prior approval of

changes to the scope of work or budget can result in suspension/

termination of grant funds.''

(10) Other items in the Letter of Conditions should include those

appropriate items relative to: maximum amount of grant; contributions;

required project audit; evidence of compliance with all applicable

Federal, State, and local requirements; closing instructions; DOL

certifications; compliance with any required environmental mitigation

measures; and other requirements.

Sec. 4284.557 Fund disbursement.

Grantees will be reimbursed as follows:

(a) An SF-270, ``Request for Advance or Reimbursement,'' will be

completed by the applicant and submitted to RDA not more frequently

than monthly.

(b) Upon receipt of a properly completed SF-270, the funds will be

requested through the field office terminal system. Ordinarily, payment

will be made within 30 days after receipt of a proper request for

reimbursement.

(c) Grantees are encouraged to use minority banks (a bank which is

owned by at least 50 percent minority group members) for the deposit

and disbursement of funds. A list of minority owned banks can be

obtained from the Office of Minority Business Enterprise, Department of

Commerce, Washington, DC 20230.

(d) The grantee's share in the cost of the project will be

disbursed in advance of grant funds or on a pro-rata distribution basis

with grant funds during the disbursement period. The grantee will not

be permitted to provide its contribution at the end of the grant

period.

Sec. 4284.558 Reporting.

An SF-269, ``Financial Status Report,'' and a project performance

activity report will be required of all grantees on a quarterly basis.

A final project performance report will be required with the last SF-

269. The final report may serve as the last quarterly report. The final

report must include a final evaluation of the project. Grantees shall

constantly monitor performance to ensure that time schedules are being

met, projected work by time periods is being accomplished, and other

performance objectives are being achieved. Grantees are to submit an

original of each report to RDA. The project performance reports shall

include, but not be limited to, the following:

(a) A comparison of actual accomplishments to the objectives

established for that period;

(b) Reasons why established objectives were not met;

(c) Problems, delays, or adverse conditions which will affect

attainment of overall project objectives, prevent meeting time

schedules or objectives, or preclude the attainment of particular

project work elements during established time periods. This disclosure

shall be accompanied by a statement of the action taken or planned to

resolve the situation; and

(d) Objectives and timetable established for the next reporting

period.

Secs. 4284.559-4284.570 [Reserved]

Sec. 4284.571 Audit requirements.

The grantee will provide an audit report in accordance with subpart

A of part 1942 of this title. The audit requirements only apply to the

year(s) in which grant funds are received. Audits must be prepared in

accordance with generally accepted Government auditing standards using

the publication, ``Standards for Audit of Governmental Organizations,

Programs, Activities and Functions.''

Sec. 4284.572 Grant servicing.

Grants will be serviced in accordance with subpart E of part 1951

of this title.

Sec. 4284.573 Programmatic changes.

The grantee shall obtain prior approval for any change to the scope

or objectives of the approved project. Failure to obtain prior approval

of changes to the scope or budget can result in suspension/termination

of grant funds.

Sec. 4284.574 Subsequent grants.

Subsequent grants will be processed in accordance with the

requirements set forth in this subpart.

Sec. 4284.575 Grant suspension, termination, and cancellation.

Grants may be cancelled by RDA by use of Form FmHA 1940-10,

``Cancellation of U.S. Treasury Check and/or Obligation.'' The RDA will

notify the applicant, by letter, that the grant has been cancelled. A

copy of the letter will be sent to the Regional Attorney, OGC, if the

Regional Attorney has been involved. The applicant will be provided

appeal rights, as appropriate, in accordance with subpart B of part

1900 of this title. Grants may be suspended or terminated for cause or

convenience, in accordance with parts 3015 and 3016 of this title.

Secs. 4284.576-4284.586 [Reserved]

Sec. 4284.587 Exception authority.

The Administrator may, in individual cases, make an exception to

any requirement or provision of this subpart which is not inconsistent

with the authorizing statute, an applicable law, or a decision of the

Comptroller General if the Administrator determines that application of

the requirement or provision would adversely affect the Government's

interest and shows how the adverse impact will be eliminated or

minimized if the exception is made.

Sec. 4284.588 Forms and exhibits.

Exhibits A and B and forms referenced (all available in any FmHA

State Office) are for use in administering grants made under this

subpart.

Secs. 4284.589-4284.599 [Reserved]

Sec. 4284.600 OMB control number.

The reporting and recordkeeping requirements contained in this

regulation have been approved by the Office of Management and Budget

(OMB) and have been assigned OMB control number 0570-0006. Public

reporting burden for this collection of information is estimated to

vary from 30 minutes to 8 hours per response, with an average of 1.85

hours per response, including time for reviewing instructions,

searching existing data sources, gathering and maintaining the data

needed, and completing and reviewing the collection of information.

Send comments regarding this burden estimate or any other aspect of

this collection of information, including suggestions for reducing this

burden, to Department of Agriculture, Clearance Officer, OIRM, AG Box

7630, Washington, D.C. 20250; and to the Office of Management and

Budget, Paperwork Reduction Project (OMB #0570-0006), Washington, D.C.

20503.

Exhibit A of Subpart F--Agreement of Administrative Requirements for

Rural Technology Development Grants

This exhibit contains information regarding the responsibilities of

the grantee for receipt of grant funds under the Rural Technology

Development Grant (RTDG) program. These requirements do not supersede

the requirements for receipt of Federal funds as stated in 7 CFR parts

3015 and 3016; however, specific areas related to the program are cited

below.

In consideration for the RTDG grant by RDA, grantee agrees to:

1. Cause the RTDG program to be completed within the total sums

available to it, including grant funds, in accordance with the scope of

work and any necessary modifications thereof prepared by grantee and

approved by grantor.

2. Permit periodic inspection of the program operations by a

representative of grantor.

3. Make the program available to all persons in grantee's service

area without regard to race, color, national origin, religion, sex,

marital status, age, physical or mental handicap.

4. Not use grant funds to replace any financial support previously

provided or assured from any other source. The grantee agrees that the

general level of expenditure by the grantee for the benefit of program

area and/or program covered by this agreement shall be maintained and

not reduced as a result of the Federal share funds received under this

grant.

5. Provide financial management systems which will include:

(a) Accurate, current, and complete disclosure of the financial

result of each grant.

(b) Records which identify adequately the source and application of

funds for grant-supporting activities. Those records shall contain

information pertaining to grant awards and authorizations, obligations,

unobligated balances, assets, liabilities, outlays, and income.

(c) Effective control over and accountability for all funds.

Grantee shall adequately safeguard all such assets and shall ensure

that they are used solely for authorized purposes.

(d) Accounting records supported by source documentation.

6. Retain financial records, supporting documents, statistical

records, and all other records pertinent to the grant for a period of

at least 3 years after grant closing except that the records shall be

retained beyond the 3-year period if audit findings have not been

resolved. Microfilm copies may be substituted in lieu of original

records. The grantor and the Comptroller General of the United States,

or any of their duly authorized representatives, shall have access to

any books, documents, papers, and records of the grantee which are

pertinent to the specific grant program for the purpose of making

audits, examinations, excerpts, and transcripts.

7. Provide an audit report prepared in accordance with generally

accepted Government auditing standards using the publication,

``Standards for Audit of Governmental Organizations, Programs,

Activities and Functions.''

8. Provide grantor with such periodic reports as it may require and

permit periodic inspection of its operations by a designated

representative of the grantor.

9. Execute Form FmHA 400-4, ``Assurance Agreement,'' and any other

agreements required by grantor to implement the civil rights

requirements. If any such form has been executed by grantee as a result

of a grant being made to grantee by grantor contemporaneously with the

making of this grant, another form of the same type need not be

executed in connection with this grant.

10. That upon any default under its representations or agreements

set forth in this instrument, grantee, at the option and the demand of

grantor, will, to the extent legally permissible, repay to grantor

forthwith the original principal amount of the grant stated herein

above, with interest equal to the rate of interest paid on U.S. 26-week

Treasury Bills adjusted quarterly from the date of the default. The

provisions of this exhibit may be enforced by grantor at its option and

without regard to prior waivers by it of previous defaults of grantee,

by judicial proceedings to require specific performance of the terms of

this exhibit, or by such other proceedings in the law or equity in

either Federal or State courts as may be deemed necessary by grantor to

assure compliance with the provisions of this exhibit and the laws and

regulations under which this grant is made.

11. That no member of Congress shall be admitted to any share or

part of this grant or any benefit that may arise therefrom; but this

provision shall not be construed to bar, as a contractor under the

grant, a publicly held corporation whose ownership might include a

member of Congress.

12. That all non-confidential information resulting from its

activities shall be made available to the general public on an equal

basis.

13. That the purpose and scope of work for which this grant is made

shall not duplicate programs for which monies have been received, are

committed, or are applied to from other sources (public or private).

14. That grantee shall relinquish any and all copyrights and/or

privileges to the materials developed under this grant as published in

whole or in part. The material shall contain a notice and be identified

by language to the following effect: ``The material is the result of

tax-supported research and as such is not copyrightable. It may be

freely reprinted with the customary crediting of the source.''

15. That the grantee shall abide by the policies promulgated in the

USDA Uniform Assistance Regulations, 7 CFR Parts 3015 and 3016, which

provides standards for use by grantee in establishing procedures for

the procurement of supplies, equipment, and other services with Federal

grant funds.

16. Obtain prior approval from grantor for use of grant funds for

uses or amounts not consistent with the approved scope of work and

budget.

17. That the grantee, except for States, will remit interest earned

on grant funds deposited in an interest bearing account in accordance

with the USDA Uniform Assistance Regulation, 7 CFR Parts 3015 and 3016.

18. Grantee will comply with property management standards

established by 7 CFR Parts 3015 and 3016 for personal property.

``Personal property'' means property of any kind except real property.

It may be tangible--having physical existence--or intangible--having no

physical existence; such as patents, inventions, and copyrights.

``Nonexpendable personal property'' means tangible personal property

having a useful life of more than 1 year and an acquisition cost of

$300 or more per unit. A grantee may use its own definition of

nonexpendable personal property provided that such definition would at

least include all tangible personal property as defined above.

``Expendable personal property'' refers to all tangible personal

property other than nonexpendable property. When nonexpendable property

is acquired by a grantee with project funds, title shall not be taken

by the Federal Government but shall be vested in the grantee subject to

the following conditions.

(a) Right to transfer title. For items of real or nonexpendable

personal property having a unit acquisition cost of $1,000 or more, RDA

may reserve the right to transfer the title to the Federal Government

or to a third party named by the Federal Government when such third

party is otherwise eligible under existing statutes. Such reservation

shall be subject to the following standards:

(i) The property shall be appropriately identified in the grant or

otherwise made known to the grantee in writing.

(ii) RDA shall issue disposition instructions within 120 calendar

days after the end of the Federal support of the project for which it

was acquired. If RDA fails to issue disposition instructions within the

120 calendar day period, the grantee shall apply the standards of

paragraph 18. (b) of this exhibit.

(iii) When RDA exercises its right to take title, the personal

property shall be subject to the provisions for federally owned

nonexpendable property discussed in paragraphs 18. (b) and (c) of this

exhibit.

(iv) When title is transferred either to the Federal Government or

to a third party and the grantee is instructed to ship the property

elsewhere, the grantee shall be reimbursed by the benefiting Federal

agency with an amount which is computed by applying the percentage of

the grantee's participation in the cost of the original grant project

or program to the current fair market value of the property, plus any

reasonable shipping or interim storage costs incurred.

(b) Use of other nonexpendable personal property for which the

grantee has title.

(i) The grantee shall use the property in the project or program

for which it was acquired as long as needed, whether or not the project

or program continues to be supported by Federal funds. When it is no

longer needed for the original project or program, the grantee shall

use the property in connection with its other federally sponsored

activities, in the following order of priority:

(1) Activities sponsored by RDA.

(2) Activities sponsored by other Federal agencies.

(ii) Shared use. During the time that nonexpendable personal

property is held for use on the project or program for which it was

acquired, the grantee shall make it available for use on other projects

or programs if such other use will not interfere with the work on the

project or program for which the property was originally acquired.

First preference for such other use shall be given to projects or

programs sponsored by RDA; second preference shall be given to projects

or programs sponsored by other Federal agencies. If the property is

owned by the Federal Government, use for other activities not sponsored

by the Federal Government shall be permissible if authorized by RDA.

User charges should be considered, if appropriate.

(c) Disposition of nonexpendable personal property. When the

grantee no longer needs the property as provided in paragraph 18(b) of

this exhibit, the property may be used for other activities in

accordance with the following standards:

(i) Personal property with a unit acquisition cost of less than

$1,000. The grantee may use the property for other activities without

reimbursement to the Federal Government or sell the property and retain

the proceeds.

(ii) Nonexpendable personal property with a unit acquisition cost

of $1,000 or more. The grantee may retain the property for other use

provided that compensation is made to RDA or its successor. The amounts

of compensation shall be computed by applying the percentage of Federal

participation in the cost of the original project or program to current

fair market value of the property. If the grantee has no need for the

property and the property has further use value, the grantee shall

request disposition instructions from the original grantor agency.

(iii) RDA shall determine whether the property can be used to meet

the Agency's requirements. If no need exists within RDA, the General

Services Administration Federal Property Management Regulations will be

used by RDA to determine whether a need for the property exists in

other Federal *agencies. RDA shall issue instructions to the grantee no

later than 120 days after the grantee request and the following

procedures shall govern:

(1) If so instructed or if disposition instructions are not issued

within 120 calendar days after the grantee's request, the grantee shall

sell the property and reimburse RDA an amount computed by applying the

percentage of the grantor participation in the grant program to the

sales proceeds. However, the grantee shall be permitted to deduct and

retain from the Federal share $100 or 10 percent of the proceeds,

whichever is greater, for the grantee's selling and handling expenses.

(2) If the grantee is instructed to dispose of the property other

than as described in paragraphs 18. (b) and (c) of this exhibit, the

grantee shall be reimbursed by RDA for such costs incurred in its

disposition.

(3) Property management standards for nonexpendable personal

property. The grantee's property management standards for nonexpendable

personal property shall include the following procedural requirements:

(a) Property records shall be maintained accurately and shall

include:

(i) A description of the property.

(ii) Manufacturer's serial number, model number, Federal stock

number, National stock number, or other identification number.

(iii) Sources of the property including grant or other agreement

number.

(iv) Whether title vests in the grantee or the Federal Government.

(v) Acquisition date (or date received, if the property was

furnished by the Federal Government) and costs.

(vi) Percentage (at the end of the budget year) of Federal

participation in the cost of the project or program for which the

property was acquired. (Not applicable to property furnished by the

Federal Government).

(vii) Location, use, and condition of the property and the date the

information was reported.

(viii) Unit acquisition cost.

(ix) Ultimate disposition data, including date of disposal and

sales price or the method used to determine current fair market value

where a grantee compensates the Federal agency for its share.

(b) Property owned by the Federal Government must be marked to

indicate Federal ownership.

(c) A physical inventory of property shall be taken and the results

reconciled with the property records at least once every 2 years. Any

differences between quantities determined by the physical inspection

and those shown in the accounting records shall be investigated to

determine the causes of the difference. The grantee shall, in

connection with the inventory, verify the existence, current

utilization, and continued need for the property.

(d) A control system shall be in effect to ensure adequate

safeguards to prevent loss, damage, or theft of the property. Any loss,

damage, or the theft of nonexpendable property shall be investigated

and fully documented; if the property was owned by the Federal

Government, the grantee shall promptly notify RDA.

(e) Adequate maintenance procedures shall be implemented to keep

the property in good condition.

(f) Where the grantee is authorized or required to sell the

property, proper sales procedures shall be established which would

provide for competition to the extent practicable and result in the

highest possible return.

(g) Expendable personal property shall vest in the grantee upon

acquisition. If there is a residual inventory of such property

exceeding $1,000 in total aggregate fair market value upon termination

or completion of the grant and if the property is not needed for any

other federally sponsored project or program, the grantee shall retain

the property for use on nonfederally sponsored activities or sell it,

but must in either case compensate the Federal Government for its

share. The amount of compensation shall be computed in the same manner

as nonexpendable personal property.

This exhibit covers the following described personal property and

any additional property acquired wholly or in part with grant funds

(use continuation sheets as necessary):

19. To the following termination provisions:

(a) Termination for cause: The grantor agency may terminate any

grant in whole, or in part, at any time before the date of completion,

whenever it is determined that the grantee has failed to comply with

the conditions of the grant. The grantor agency shall promptly notify

the grantee in writing of the determination and the reasons for the

termination, together with the effective date.

(b) Termination for convenience: The grantor agency or grantee may

terminate grants in whole, or in part, when both parties agree that the

continuation of the program would not produce beneficial results

commensurate with the further expenditure of funds. The two parties

shall agree upon the termination conditions, including the effective

date and, in the case of partial terminations, the portion to be

terminated. The grantee shall not incur new obligations for the

terminated portion after the effective date, and shall cancel as many

outstanding obligations as possible. The grantor agency shall allow

full credit to the grantee for the Federal share of the noncancelable

obligations properly incurred by the grantee prior to termination.

RDA agrees that it will:

1. Assist grantee, within available appropriations, with such

technical assistance as grantor deems appropriate in planning the

program and coordinating the plan with local official comprehensive

plans and with any State or area plans for the area in which the

program is located.

2. At its sole discretion, RDA may at any time give any consent,

deferment, subordination, release, satisfaction, or termination of any

or all of grantee's grant obligations, with or without valuable

consideration, upon such terms and conditions as RDA may determine to

be:

(a) Advisable to further the purposes of the grant or to protect

the Government's financial interest therein; and

(b) Consistent with both the statutory purposes of the grant and

the limitations of the statutory authority under which it is made.

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

Name of Grantee

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

Title

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

Date

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

RDA Approval Official

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

Title

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

Date

Dated: August 4, 1994.

Bob J. Nash,

Under Secretary, Small Community and Rural Development.

[FR Doc. 94-19686 Filed 8-11-94; 8:45 am]

BILLING CODE 3410-07-P