Public Telecommunications Facilities Program

Federal RegisterMay 30, 1996

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SUMMARY: The National Telecommunications and Information Administration

(NTIA) is issuing a Notice of Proposed Rulemaking. This Notice is

intended to clarify and/or revise the rules and appendix governing

administration of the Public Telecommunications Facilities Program

(PTFP). The PTFP is authorized to provide matching grants to plan and

construct public telecommunications facilities.1

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\1\ See 47 U.S.C. 390-393, and 397-399b (1988), The

Communications Act of 1934, as amended. Unless otherwise noted, all

statutory citations are to title 47 of the United States Code.

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NTIA intends to issue Final Rules after it has received, evaluated

and addressed public comments on these Proposed Rules.

DATES: Comments must be filed no later than the close of business on

July 15, 1996.

ADDRESSES: Persons and organizations interested in commenting on the

Proposed Rules must send three copies of any comments to: Public

Telecommunications Facilities Program, NTIA, Department of Commerce,

14th Street and Constitution Avenue, NW, Room 4625, Washington, DC

20230. Attention: Dennis Connors.

FOR FURTHER INFORMATION CONTACT: Persons desiring further information

regarding the Proposed Rules should contact Dennis Connors, Public

Telecommunications Facilities Program, NTIA, DOC, 14th Street and

Constitution Avenue NW., Room 4625, Washington, DC 20230, telephone

(202) 482-5802.

SUPPLEMENTARY INFORMATION: In March 1995, President Clinton issued a

directive to Federal agencies regarding their responsibilities under

his Regulatory Reform Initiative. This initiative is part of the

National Performance Review and calls for immediate, comprehensive

regulatory reform. The President directed that all agencies undertake

an exhaustive review of all their regulations with an emphasis on

eliminating or modifying those that are obsolete or otherwise in need

of reform. These Proposed Rules represent the first step in NTIA's

response to this directive for the PTFP.

In keeping with the Presidential directive, NTIA has taken this

opportunity to thoroughly review the existing 1991 Rules.2 We are

proposing a number of changes discussed below which simplify or delete

requirements. In order to clarify the rules, we have removed internal

repetition as well as duplication of requirements set forth for

grantees in other government rules and regulations.

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\2\ See 15 CFR Part 2301, published in the Federal Register,

Vol. 56, No. 226, p. 59168. (November 22, 1991).

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The change most readily apparent to those familiar with the 1991

Rules is that the Proposed Rules have been completely reorganized to

make it easier for applicants and grantees to understand the

requirements of the program. Additional headers have been added and

minor language changes made to increase clarity. However, unless

discussed further below, the intent of the regulations remains the same

as in the 1991 Rules.

The most significant policy change contained in the Proposed Rules

includes a complete revision of the evaluation criteria which formerly

was contained in two sections, Sec. 2301.13 Funding Criteria for

Construction Applications and Sec. 2301.14 Funding Criteria for

Planning Applications. The Proposed Rules combine both construction and

planning evaluation criteria into a new Sec. 2301.17. The Proposed

Rules also add a description of PTFP's technical evaluation process in

Sec. 2301.16 and a description of the selection process used to award

grants in Sec. 2301.18.

Two clarifications have been made in the funding priorities, which

previously were contained in the Appendix to the 1991 Rules and are now

incorporated into the Proposed Rules at Sec. 2301.4. NTIA proposes to

modify the former Priority 4, Replacement and Improvement of Basic

Equipment for Existing Broadcast Stations. Under the proposed

Sec. 2301.(4)(b)(4) NTIA has redesignated this section as Priority 4,

Improvement of Public Broadcasting Services and expanded its scope. In

addition to the projects formerly included under Priority 4, NTIA now

will consider projects to construct public broadcast stations to

address underserved needs in an area already served by other public

broadcasting facilities. Under the previous funding priorities in the

Appendix to the 1991 Rules, NTIA considered applications intended to

serve areas already served by other public broadcasting facilities

within the Special Applications category while other broadcast projects

were considered within the funding Priorities. NTIA believes that all

broadcast applications should be evaluated within the funding

priorities. NTIA continues to believe that the PTFP's highest

priorities are the provision of a first signal to a geographic area

(Priority 1), urgent replacement of equipment at the sole station

serving a geographic area (Priority 2), and first local origination

(Priority 3). Therefore, projects to construct public broadcast

stations to address underserved needs in an area already served by

other public broadcasting facilities will be considered in Priority 4A,

where they will be considered with other applications from stations in

areas already served by another public broadcasting facility. The

remainder of Priority 4A and Priority 4B remain unchanged from the

Appendix to the 1991 Rules.

With the proposed revision of Priority 4, all broadcast

applications have been placed within the five funding priorities. The

Special Applications category therefore will consist solely of

nonbroadcast projects and the language of the Special Applications

category has been revised at Sec. 2301.(4)(a).

Under Sec. 390 of the Act, NTIA has the authority to consider

applications which further the delivery of public telecommunications

services to as many citizens in the United States as possible by the

most efficient and economical means. NTIA recognizes that the issue of

conversion to advanced digital technologies is of great importance for

the future viability of public broadcasting facilities in the United

States. NTIA believes that public broadcasters must adequately plan for

the transition to advanced digital technologies and will therefore

welcome applications which will assist in planning for the digital

conversion of public broadcasting facilities.

The following reviews each section of the Proposed Rules and

compares it with similar sections in the 1991 Rules.

Section 2301.1 Program Purposes

The new Sec. 2301.1 Program Purposes replaces Sec. 2301.2 Program

Purposes in the 1991 Rules. This section of the 1991 Rules for the most

part repeated the language contained in Sec. 393(b) of the Act. NTIA

believes that the overall purposes of the PTFP are better expressed in

Sec. 390 of the Act. This

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section of the Act, restated in the new Sec. 2301.1, now serves as an

introduction to the PTFP Regulations.

Section 2301.2 Definitions

The new Sec. 2301.2 Definitions repeats for the most part

Sec. 2301.1 Definitions in the 1991 Rules. The definition for the term

``Non-Federal financial support'' has been deleted. The term is no

longer used since the requirement to report on three years of Non-

Federal financial support (Sec. 2301.5(d)(2)(viii) of the 1991 Rules)

has been deleted.

Three new definitions have been added. A new definition for the

term ``planning'' has been added to complement the definition for the

term ``construction,'' and a new definition has been added for

``closing date'' since the term is used throughout the Proposed Rules.

Further, the definition of ``Federal interest period'' has been

expanded to clarify that limitations on the use of Federally-funded

public telecommunications facilities, such as the prohibition on the

use PTFP funded equipment for the broadcast of advertisements (see

Sec. 2301.19(a)(5)) or the restrictions on sectarian use (see

Sec. 2301.19(b)) extend for the useful life of the equipment, whether

or not this period extends beyond the 10 year Federal interest period.

We are also adopting the definition of ``minorities'' which was

previously set forth in our policy statement printed in the Federal

Section 2301.3 Applicant Eligibility

The new Sec. 2301.3 Applicant Eligibility was contained as a part

of Secs. 2301.4(a), (b) and (e) Eligible Organizations and Projects of

the 1991 Final Rules. On December 22, 1995, NTIA issued a notice and an

amendment to the PTFP regulations in the Federal Register (60 FR 66491,

Dec. 22, 1995) on its policy with regard to sectarian activities. The

December 22, 1995 Notice revised the previous Sec. 2301.4 on

eligibility. The revisions outlined in that Notice are included in the

Proposed Rules in Sec. 2301.3. The process of obtaining preliminary

eligibility determinations (Sec. 2301.3(d)) has been simplified and

much of the prior language specifying this procedure (Sec. 2301.4(f) in

the 1991 Rules) has been eliminated.

Section 2301.4 Scope of Projects

The new Sec. 2301.4 Scope of Projects contains the material

included in the Appendix to the 1991 Rules dealing with Special

Applications and Priorities. This section replaces Sec. 2301.4(c) of

the 1991 Rules, which for the most part was another paraphrase of

Sec. 393(b) of the Act. We believe that it is more useful to applicants

that this new Sec. 2301.4 contain the scope of eligible projects

developed by NTIA to achieve the objectives of Sec. 393(b) of the Act.

Significant changes in Sec. 2301.4(a) Special Applications and

Sec. 2301.4(b)(4) Priority 4 applications were discussed earlier in

this document. Sec. 2301.4(b)(1)(iv) adds language to clarify how PTFP

considers the presence of AM daytime only stations in determining the

Priority for proposed FM facilities serving a similar coverage area.

Sec. 2301.4(c) parallels Sec. 2301.3(d) of the Proposed Rules in

permitting potential applicants to obtain preliminary eligibility

determinations. Sec. 2301.4(d) maintains the intent of

Sec. 2301.4(f)(3) of the 1991 Rules that the Agency will review all

applications after the closing date and that a preliminary eligibility

determination does not guarantee that the Agency will accept a future

application.

Section 2301.5 Special Consideration

The new Sec. 2301.5 Special Consideration is based in part on

Sec. 2301.3 Special Consideration in the 1991 Rules. The section has

been revised to reflect language in the Act (Sec. 392(f)). The sentence

regarding a requirement for special consideration of a minimum 50%

level of control of the applicant by women and minorities has been

deleted.

Section 2301.6 Amount of Federal Funding

The new Sec. 2301.6 Amount of Federal Funding is based upon

Sec. 2301.16 Amount of the Federal Grant in the 1991 Rules. Several

sentences in this section have been rearranged within the section to

group similar issues and increase the clarity of the regulation. We are

also taking this opportunity to clarify PTFP's position on the level of

matching funds required for broadcast equipment replacement,

improvement and augmentation projects and to make it more consistent

with treatment of non-Federal cost share under OMB Circular A-110 and

15 CFR Part 24. The new Sec. 2301.6(b)(ii) is a restatement of NTIA

policy previously published on November 22, 1991 (Fed. Reg. Vo. 56, No.

226, p. 59191) which indicates the presumption of 50% Federal

participation for equipment replacement, improvement and augmentation

projects. New language in Sec. 2301.6(b)(2) clarifies NTIA's existing

policy that obligating funds for equipment before the closing date is

considered ownership or acquisition of equipment and is not normally

permitted. However, NTIA will now consider on a case-by-base basis

inclusion of equipment as matching funds purchased prior to the closing

date due to unusual circumstances when a clear and compelling showing

is made. Sec. 2301.6(d) has been revised to indicate that if a grantee

obligates Federal funds before the project start date, those costs may

be disallowed. This revision replaces language in the 1991 Rules

(Sec. 2301.23(a)-(c)) which gave the Department the option of

terminating the entire grant.

Section 2301.7 Eligible and Ineligible Project Costs

The new Sec. 2301.7 Eligible and Ineligible Project Costs is based

on Sec. 2301.17 Items and Costs Ineligible for Federal funds from the

1991 Rules. Specific information on the eligible and ineligible costs

has been deleted from this section. The new language formalizes a

procedure that NTIA has been following in recent years, which is to

annually publish a list of eligible and ineligible costs in the Federal

distributed as part of the application materials. Sec. 2301.7(c) has

been revised to reflect the change noted in the prior section regarding

Sec. 2301.6(b)(2).

Section 2301.8 Submission of Applications

Section 2301.9 Deferred Applications

Section 2301.10 Applications Resulting From Catastrophic Damage or

Emergency Situations

The new Secs. 2301.8 Submission of Applications, 2301.9 Deferred

Applications and 2301.10 Applications Resulting From Catastrophic

Damage or Emergency Situations are all derived from Sec. 2301.5

Application Procedures in the 1991 Rules. The former Sec. 2301.5 has

been divided into three sections for clarity, but the application

procedures contained in the three new sections are similar to that of

the 1991 Rules. Lengthy sections from the old Sec. 2301.5 regarding the

specific requirements to be submitted in a new or deferred application

have been deleted (e.g. Secs. 2301.5(d)(2)(i-xxii)) and 2301.5(e)(4)(i-

xi). Removing the specific requirements from the Rules will give NTIA

the flexibility of future reductions in requirements on the application

form to lessen the burden on applicants. For example, in FY 1997, NTIA

will, under the Proposed Rules, delete the requirement to submit the

three year report on Non-Federal Financial Support (Exhibit B) now

required by the 1991 Rules and contained in the current application

form. Specific requirements of the application are now and will

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continue to be contained in the application form that will be

distributed as part of application materials.

The Proposed Rules drop the specific requirement in the 1991 Rules

(Sec. 2301.5(d)(2)) that an applicant submit ``an original and one copy

of the Agency application form'' but now specifies at the new

Sec. 2301.8(d) that the applicant submit ``the number of copies

specified by the Agency.'' This will permit NTIA to be flexible, within

OMB guidelines, on the number of applications forms required in order

to complete processing of the applications in a timely manner.

Two paragraphs from the Additional Information section in the 1991

Rules (Sec. 2301.6(d)(1) and (2)) were relocated to the new Submission

of Applications section (Sec. 2301.8(g) and (h)) to notify potential

applicants of the use of Name Check forms and financial responsibility

determinations in the application review process. In Secs. 2301.8(g)

and(h), the Proposed Rules clarify the uses of these reports in the

application review process. The new Sec. 2301.8(i) is Department of

Commerce policy.

The new Sec. 2301.10 Applications Resulting From Catastrophic

Damage or Emergency Situations contains one significant change from

Sec. 2301.5(g) of the 1991 Rules. Under Sec. 2301.10(a), NTIA proposes

to consider the complete failure of basic equipment essential to a

station's continued operation, even if the failure is not the result of

a natural or manmade disaster, as an emergency situation which may

warrant immediate consideration of an application.

Section 2301.11 Service of Applications

The new Sec. 2301.11 Service of Applications was the former

Sec. 2301.7 Service of Applications in the 1991 Rules. Section

Sec. 2301.11(c) has been clarified to indicate that applicants must

notify the State Single Points of Contact (SPOC) in each state relevant

to the project that an application for funding has been submitted to

PTFP. In the opening sentence to this section, we further clarify that

the notification to the SPOC, the FCC and the state telecommunications

agencies need only be a summary of the application, rather than the

full application required in prior PTFP Rules. Future application

materials will provide guidance as to what should be included in the

summary to provide adequate notification to the requisite agencies

while reducing the notification burden on all applicants.

Section 2301.12 Federal Communications Commission Authorizations

The new Sec. 2301.12 Federal Communications Commission

Authorizations was the former 2301.8 Federal Communications Commission

in the 1991 Rules. The section contains a few minor editorial

improvements in (a), (c), and (g) with no change in intent.

Section 2301.13 Public Comments

The new Sec. 2301.13 Public Comments is based on the former

Sec. 2301.11 Public Comments in the 1991 Rules. Under the new

Sec. 2301.13(a), NTIA intends to publish a list of all applications

received. This replaces the publishing of a list of applications

accepted for filing (Sec. 2301.9(a) contained in the 1991 Rules.) The

former listing of applications accepted for filing was often

incomplete, as determinations of eligibility were sometimes made after

the publication of the notice. NTIA believes that publication of a full

listing of applications received can be done soon after the closing

date, and better serves the public by permitting a longer period of

time for receipt of public comments. Sec. 2301.13(c) clarifies that

copies of the applications are available for public inspection in the

NTIA offices. The new Sec. 2301.13(d) has been modified to clarify that

only those public comments which oppose an application must be served

on the applicant. Sec. 2301.13(e) clarifies the use of the public

comments.

Section 2301.14 Supplemental Application Information

The new Sec. 2301.14 Supplemental Application Information is based

on Sec. 2301.6 Additional Information from the 1991 Rules. Paragraph

(b)(4) of this section has been revised to reduce the burden on

applicants. Where the 1991 rules require notification to NTIA of any

changes in the applicants ``board structure, in the applicant's

501(c)(3) status, or in the applicant's Articles of Incorporation or

Bylaws,'' the Proposed Rules only require notification to NTIA of

changes ``that affect the applicant's eligibility.'' In the new

organization of the Proposed Rules, several paragraphs have been moved

into or out of this section. Sec. 2301.15(f)(1) of the 1991 Rules was

moved into this section and is now contained in the new

Sec. 2301.14(d). As previously noted, two paragraphs from the

Additional Information section in the 1991 Rules (Secs. 2301.6(d) (1)

and (2)) were relocated to the new Submission of Applications section

(Secs. 2301.5 (h) and (i)).

Section 2301.15

Withdrawal of Applications

The new Sec. 2301.15 Withdrawal of Applications is taken from

Sec. 2301.9(g) of the 1991 Rules and placed in this separate section

for clarity. The section has been slightly revised with no change in

intent.

Section 2301.16 Technical Evaluation Process

The new Sec. 2301.16 Technical Evaluation Process combines elements

from several sections in the 1991 Rules. The new Sec. 2301.16(a) is

based on Sec. 2301.13 of the 1991 Rules. Secs. 2301.16 (c), (d), and

(e) parallel the procedures currently used by NTIA in the review of the

PTFP applications and are similar to the information contained in the

Notice of Closing Date for the FY 1996 Grant Cycle, published in the

Federal Register on February 22, 1996 (FR xxx). The new Sec. 2301.16(d)

is also based on Secs. 2301.12 (b) and (c) of the 1991 Rules.

Section 2301.17 Evaluation Criteria for Construction and Planning

Applications

The new Sec. 2301.17 Evaluation Criteria for Construction and

Planning Applications is totally new and replaces Sec. 2301.13 Funding

Criteria for Construction Applications and Sec. 2301.14 Funding

Criteria for Planning Applications in the 1991 Rules. The new

Sec. 2301.17 proposes six broad criteria upon which the applications

will be evaluated. These are: Project Objectives, Applicant

Qualifications, Urgency, Financial Qualifications, Special

Consideration, and either Technical Qualifications (for construction

projects) or Planning Qualifications (for planning projects). This new

section combines the evaluation criteria for planning and construction

applications in one place, reduces redundancy and clarifies the

evaluation criteria. The Agency will provide each applicant with

guidance in the application materials on the appropriate type of

documentation to meet each of the evaluation criteria which reflects

the type and priority of the application being proposed. We have not

assigned a weight to each of the criterion. In prior years, we have

weighted all criteria equally. We are soliciting comment on the

appropriate weights to be assigned.

Section 2301.18 Selection Process

The new Sec. 2301.18 Selection Process is a new section which

serves to distinguish the evaluation factors used in Sec. 2301.17 from

those additional factors used in the selection of the grant.

Secs. 2301.18 (a) and (b) parallel the procedures currently used by

NTIA in

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the selection of the PTFP applications for funding and are similar to

the information contained in the Notice of Closing Date for the FY 1996

Grant Cycle, published in the Federal Register on February 22, 1996

(Fed. Reg. Vol. 61, No. 36, p. 6912). The new Sec. 2301.18(c) is the

same as Sec. 2301.8(h) of the 1991 Rules. The new Secs. 2301.16 (d) and

(e) are based on Sec. 2301.15 (a) and (b) of the 1991 Rules.

Section 2301.19 General Conditions Attached to the Federal Award

The new Sec. 2301.19 General Conditions Attached to the Federal

Award is the first of several new sections which are derived from

Sec. 2301.22 Conditions Attached to the Federal Award in the 1991

Rules. The new Sec. 2301.19 combines, in order, the following

paragraphs from Sec. 2301.22 of the 1991 Rules, (b)(1), (2), (3), (16),

(4), (5), (11), and 2301.22(d). The remainder of Sec. 2301.22 in the

1991 Rules has been included in other sections as discussed below or

deleted as unnecessary. The new Sec. 2301.19(c) is based on

Sec. 2301.23(c)(1) of the 1991 rules with the last two sentences of the

new Sec. 2301.19(c) added for clarity.

Section 2301.20 Schedules and Reports

The new Sec. 2301.20 Schedules and Reports is based on

Secs. 2301.22(b) (8) and (12) Conditions Attached to the Federal Grant

in the 1991 Rules. These two paragraphs have been given their own

section for clarity. Several adjoining paragraphs, including

Secs. 2301.22(b) (9)-(11) and (13)-(17) have been deleted as

unnecessary as they are redundant with other sections of the Proposed

Rules or restate other law or OMB circulars.

Section 2301.21 Payment of Federal Funds

The new Sec. 2301.21 Payment of Federal Funds is based on

Sec. 2301.18 Payment of the Federal Grant of the 1991 Rules.

Sec. 2301.18(c) was removed from this section of the 1991 Rules and was

relocated to the new Sec. 2301.20(c) as more appropriate.

Section Sec. 2301.22 Protection, Acquisition and Substitution of

Equipment

The new Sec. 2301.22 Protection, Acquisition and Substitution of

Equipment, is based on Secs. 2301.22(a) and 2301.22(b)(7) of the 1991

Rules. Several portions of these paragraphs have been deleted as

redundant with other sections of the Proposed Rules. The new

Sec. 2301.22 includes several changes designed to provide the Agency

with flexibility in administering the program and to lessen the

regulatory impact on grantees. These changes deal with the conditions

under which a grantee is required to provide evidence of liens,

insurance and leases sufficient to protect the Federal government's 10

year reversionary interest in the PTFP funded equipment. The 1991 Rules

do not provide NTIA with any flexibility in requiring these items. The

Proposed Rules discuss the requirements that a grantee protect the

Federal government's interest in PTFP funded equipment by obtaining

insurance, having sufficient lease/ownership rights to property, and

securing the Federal interest by a lien. However, the Proposed Rules

delete specific ways that these items must be documented to the Agency.

For example, the new Sec. 2301.22(a) reduces a prior ``The grantee

shall'' in the 1991 Rules (Sec. 2301.18(a)) to the lesser ``The Agency

may require a grantee to'' provide liens within 90 days after a grant

award is received. Language reflecting this approach also appears in

Secs. 2301.22(g)(4), 2301.23((b)(8) and 2301.25(b). Likewise, specific

requirements for an attorney's letter of certification on property

lease/ownership right is also deleted from the regulations. NTIA would

like to explore alternate ways to protect the Federal interest which

will reduce the burden on grantees. We are therefore proposing to

revise these sections of the Proposed Rules to permit this future

flexibility.

The new Sec. 2301.22(e) replaces Sec. 2301.22(c) of the 1991 Rules.

NTIA is proposing to delete several restrictions on the lease of

equipment, specifically the former Sec. 2301.22(c)(1), which required

that the lease be for ``not less than the (10) years,'' and

Sec. 2301.22(c)(2), which limited the cost of the lease to ``not be

more than the total of the non-Federal share of the matching funds.''

NTIA believes that these statements were overly restrictive and now

proposes to consider any lease that is to the ``benefit to the Federal

government'' (new Sec. 2301.22(e)(1)).

The new Secs. 2301.22 (f)-(h) are based on Sec. 2301.23 (c) and (d)

Grant Suspension, Terminations and Transfers in the 1991 Rules and have

been revised for clarity.

Section 2301.23 Completion of Projects

The new Sec. 2301.23 Completion of Projects is based on

Sec. 2301.20 Completion of Projects in the 1991 Rules. Several

paragraphs have been renumbered and minor changes have been made in

Secs. 2301.23(a)(4) and (b)(1) to improve clarity. The requirement in

Sec. 2301.23(b)(4) to provide a copy of the insurance policy has been

dropped inasmuch as the same paragraph requires that the grantee must

certify its insurance coverage. Paragraph Sec. 2301.24(c) was contained

in Sec. 2301.18 in the 1991 Rules and is more appropriate in this

section. This sentence has been revised to clarify that the project

completion date is usually the date on which the project period expires

unless the grantee certifies in writing prior to the project period

expiration date that the project is complete.

Section 2301.24 Final Federal Payment

The new Sec. 2301.24 Final Federal Payment is a revision of

Sec. 2301.16(d) of the 1991 Rules. This paragraph was given its own

section in the Proposed Rules for clarity. The language of the section

has been simplified without changing the intent.

Section 2301.25 Retention of Record and Annual Status Reports

The new Sec. 2301.25 Retention of Records and Annual Status Reports

is based on Sec. 2301.19 Retention of Records and Sec. 2301.21 Annual

Status Reports for Construction Projects in the 1991 Rules. The section

was shortened and the language retained notifies applicants and

grantees of NTIA's basic record keeping requirements. Further

information on records retention will be included in materials sent to

grantees at the time an award is made. The detailed procedural

information that is required in the annual status report has been

deleted from the proposed rule and will be provided to grantees at the

time a project is closed out.

Section 2301.26 Waivers

The new Sec. 2301.26 Waivers is based on Sec. 2301.25 Waivers in

the 1991 Rules. A sentence was added to clarify the Administrator's

waiver authority.

One significant section of the 1991 Rules has been deleted in its

entirety. This is Sec. 2301.10 Appeals. Applicants are given the

opportunity to request a preliminary determination of eligibility, and

are provided written notice. The Appeals process was rarely used.

We are also taking this opportunity to restate several long

standing PTFP policies which were published in the preambles of

previous PTFP rules. The following policies remain in effect:

Evidence of Tax-Exempt Status

Applicants who are eligible for a Section 501(c)(3) exemption from

the IRS or the equivalent exemption from the Commonwealth of Puerto

Rico must

[[Page 27234]]

submit a copy of that exemption. Applicants who are ineligible for

Section 501(c)(3) exemption but who can demonstrate nonprofit status by

showing an applicable State tax exemption will be considered on a case-

by-case basis. They must submit: (a) evidence of their State tax-exempt

status; (b) citation to, and a copy of, the State statutory provisions

governing that exemption; and (c) a brief statement explaining why they

lack a Section 501(c)(3) exemption. (Fed. Reg. Vol. 44, No. 104, p.

30899)

Equipment Which Becomes Obsolete Before the end of the 10 Year Period

of Federal Interest

In the case of equipment which become obsolete or wears out before

the 10-year period of Federal interest expires, we will permit the

trade-in or sale of the equipment and application of the remaining

portion of the 10-year period to the new equipment. (Fed. Reg. Vol. 44,

No. 104, p. 30910)

Selection of Priority

In preparing the narrative portions of its application, each

applicant should state under which priority it desires NTIA to consider

its application. In doing so, each applicant makes sure that its

application contains sufficient documentation to justify its

qualification under the selected priority. NTIA will then evaluate the

application with the selected priority unless the Agency determines

that the priority selected by the applicant is not supported by the

documentation provided. Each applicant will be notified of any change

in the priority under which its application is to be considered. Such

notifications will be in writing and will not be subject to appeal.

(Fed. Reg. Vol. 47, No. 228, p. 53653)

Award of Deferred Applications

The Administrator retains the discretion to award grants to

deferred applications at any time where the Administrator can determine

with reasonable certainty that the particular project is exceptionally

meritorious (on the basis of the Agency's preliminary determination of

all other applications within the priority) and that the Agency would

fund the project after completing the evaluation of all the application

in the priority (on the basis of the Agency's prior experience in

making grants.) Under this process, the Agency will be able to fund

applications that the Agency had deferred in the prior year because of

technical problems (such as the inability to obtain the necessary FCC

authorizations) which have since been eliminated. (Fed. Reg. Vol. 47.

No. 50, p. 11232.)

Support for Salary Expenses

NTIA regards its primary mandate to be funding the acquisition of

equipment and only secondarily the funding of salary expenses, even

when allowed by law. Moreover, NTIA notes that the competition for PTFP

funding remains intense. To ensure that PTFP monies are distributed as

effectively as possible in this competitive atmosphere, NTIA must weigh

carefully its support for any project cost not directly involved with

the purchase of equipment.

Therefore, NTIA generally will not fund salary expenses, including

staff installation costs, pre-application legal and engineering fees,

and pre-operational expenses of new entities. NTIA will support such

costs only when the applicant demonstrates that exceptional need exists

or that substantially greater efficiency would result from the use of

staff installation instead of contractor installation.

As regards the installation of transmission equipment, NTIA

strongly favors the use of either manufacturer or professional

contractor personnel and commonly funds these costs. NTIA believes that

the value of transmission equipment and the complicated nature of its

installation require expertise beyond that normally found on station

staffs.

NTIA will rarely support requests for assistance for the

installation of studio and test equipment, whether that installation is

by staff or by contract employees. Such installation is normally of

minimum difficulty, and the associated installation costs should be

absorbed in the recipient's normal operating budget. Again, NTIA will

take into account demonstrations of exceptional need. (Fed. Reg. Vol.

56, No. 226, p. 59172)

It has been determined that this rule is not significant for

purposes of Executive Order (E.O.) 12866.

A Regulatory Flexibility Analysis is not required under The

Regulatory Flexibility Act (5 U.S.C. 601 et seq.) because the rules

were not required to be promulgated as proposed rules before issuance

as final rules by Sec. 553 of the Administrative Procedures Act (5

U.S.C. 553) or by any other law. This rule does not contain policies

with Federalism implications sufficient to warrant preparation of a

Federalism assessment under Executive Order 12612.

The Department has determined that these rules will not

significantly affect the quality of the human environment. Therefore,

no draft or final Environmental Impact Statement has been or will be

prepared. Notwithstanding any other provision of law, no person is

required to respond to nor shall a person be subject to a penalty for

failure to comply with a collection of information subject to the

requirements of the Paperwork Reduction Act unless that collection of

information displays a currently valid OMB Control Number.

The Office of Management and Budget has approved the information

collection requirements contained in these rules pursuant to the

Paperwork Reduction Act under OMB Control Nos. 0660-0003, 0660-0001 and

0605-0001. The public reporting burden for the application requirements

vary from 16 hours to 200 hours with an estimated average of 125 hours

per application, including associated exhibits; the reporting and

record keeping burden for the grant monitoring reports vary from 1 to

24 hours depending on the respective requirement; and, the reporting

burden for the name-check form (CD-346) is estimated at 15 minutes.

These estimates include the time for reviewing instructions, searching

existing data sources, gathering and maintaining the data needed, and

completing and reviewing the collections of information. Send comments

regarding these burden estimates, or any other aspects of the

collections of information, including suggestions for reducing this

burden, to the Office of Policy and Coordination and Management, NTIA,

U.S. Department of Commerce, Washington, D.C. 20230; and to the Office

of Information and Regulatory Affairs, Office of Management and Budget,

Washington, D.C. 20503 (Attention: NTIA Desk Officer).

(Catalogue of Federal Domestic Assistance No. 11.550)

List of subjects in 15 CFR Part 2301

Administrative procedure, Grant programs--communications, Reporting

requirements, Telecommunications.

Larry Irving,

Administrator.

Part 2301 of Title 15, Code of Federal Regulations, is proposed to

be revised to read as follows:

PART 2301--PUBLIC TELECOMMUNICATIONS FACILITIES PROGRAM

Subpart A--General

Sec.

2301.1 Program purposes.

2301.2 Definitions.

[[Page 27235]]

Subpart B--Application Requirements

2301.3 Applicant eligibility.

2301.4 Scope of projects.

2301.5 Special consideration.

2301.6 Amount of Federal funding.

2301.7 Eligible and ineligible project costs.

2301.8 Submission of applications.

2301.9 Deferred applications.

2301.10 Applications resulting from catastrophic damage or

emergency situations.

2301.11 Service of applications.

2301.12 Federal Communications Commission authorizations.

2301.13 Public comments.

2301.14 Supplemental application information.

2301.15 Withdrawal of applications.

Subpart C: Evaluation and Selection Process

2301.16 Technical evaluation.

2301.17 Evaluation criteria for construction and planning

applications.

2301.18 Selection process.

Subpart: D: Post-Award Requirements

2301.19 General conditions attached to the Federal Award.

2301.20 Schedules and reports.

2301.21 Payment of Federal funds.

2301.22 Protection, acquisition and substitution of equipment.

Subpart E: Completion of Projects

2301.23 Completion of projects.

2301.24 Final Federal payment.

2301.25 Retention of records and annual status reports.

Subpart F: Waivers

2301.26 Waivers.

Authority: The Public Telecommunications Financing Act of 1978,

as amended, 47 U.S.C. Secs. 390-393 (Act). (Catalog of Federal

Domestic Assistance No. 11.550)

Subpart A--General

Sec. 2301.1 Program Purposes.

Pursuant to section 390 of the Act, (The Communications Act of

1934, as amended), the purpose of the Public Telecommunications

Facilities Program (PTFP) is to assist, through matching grants, in the

planning and construction of public telecommunications facilities in

order to achieve the following objectives:

(a) Extend delivery of public telecommunications services to as

many citizens in the United States as possible by the most efficient

and economical means, including the use of broadcast and nonbroadcast

technologies;

(b) Increase public telecommunications services and facilities

available to, operated by, and owned by minorities and women; and

radio stations to provide public telecommunications services to the

public.

Sec. 2301.2 Definitions.

Act means Part IV of Title III of the Communications Act of 1934,

47 U.S.C. 390-393 and 397-399b, as amended.

Administrator means the Assistant Secretary for Communications and

Information of the United States Department of Commerce who is also

Administrator of the National Telecommunications and Information

Administration.

Agency means the National Telecommunications and Information

Administration of the United States Department of Commerce.

Broadcast means the distribution of electronic signals to the

public at large using television (VHF or UHF) or radio (AM or FM)

technologies.

Closing date means the date which the Administrator sets as the

deadline for the receipt of applications during a grant cycle.

Construction (as applied to public telecommunications facilities)

means acquisition (including acquisition by lease), installation, and

improvement of public telecommunications facilities and preparatory

steps incidental to any such acquisition, installation or improvement.

Department means the United States Department of Commerce.

FCC means the Federal Communications Commission.

Federal interest period means the period of time during which the

Federal government retains a reversionary interest in all facilities

constructed with Federal grant funds. This period begins with the

purchase of the facilities and continues for ten (10) years after the

official completion date of the project. Although OMB Circular A-110

Secs. ____.33 and ____.34 and 15 CFR 24.31 and 24.32, specify that the

Federal government maintains a reversionary interest in the facilities

for as long as the facilities are needed for the originally authorized

purpose, PTFP's authorizing statute (47 U.S.C. 392(g)) limits the

reversionary period for ten years for purposes of this program.

However, Federal limitations on the use of the facilities survive for

the useful life of the facilities whether or not this period extends

beyond the ten year Federal interest period.

Minorities means American Indians, Alaska Natives, Asian or Pacific

Islanders, Hispanics, and Blacks, not of Hispanic Origin.

Nonbroadcast means the distribution of electronic signals by a

means other than broadcast technologies. Examples of nonbroadcast

technologies are Instructional Television Fixed Service (ITFS),

satellite systems, and coaxial or fiber optic cable.

Noncommercial educational broadcast station or public broadcast

station means a television or radio broadcast station that is eligible

to be licensed by the FCC as a noncommercial educational radio or

television broadcast station and that is owned (controlled) and

operated by a state, a political or special purpose subdivision of a

state, public agency or nonprofit private foundation, corporation,

institution, or association, or owned (controlled) and operated by a

municipality and transmits only noncommercial educational, cultural or

instructional programs.

Noncommercial telecommunications entity means any enterprise that

is owned (controlled) and operated by a state, a political or special

purpose subdivision of a state, a public agency, or a nonprofit private

foundation, corporation, institution, or association; and that has been

organized primarily for the purpose of disseminating audio or video

noncommercial educational, cultural or instructional programs to the

public by means other than a primary television or radio broadcast

station, including, but not limited to, coaxial cable, optical fiber,

broadcast translators, cassettes, discs, satellite, microwave or laser

transmission.

Nonprofit (as applied to any foundation, corporation, institution,

or association) means a foundation, corporation, institution, or

association, no part of the net earnings of which inures, or may

lawfully inure, to the benefit of any private shareholder or

individual.

Operational cost means those approved costs incurred in the

operation of an entity or station such as overhead labor, material,

contracted services (such as building or equipment maintenance),

including capital outlay and debt service.

Planning (as applied to public telecommunications facilities) means

activities to form a project for which PTFP construction funds may be

obtained.

Pre-operational costs means all nonconstruction costs incurred by

new public telecommunications entities before the date on which they

began providing service to the public, and all nonconstruction costs

associated with the expansion of existing stations before the date on

which such expanded capacity is activated, except that such costs shall

not include any portion of the salaries of any personnel employed by an

operating public telecommunications entity.

[[Page 27236]]

PTFP means the Public Telecommunications Facilities Program, which

is administered by the Agency.

PTFP Director means the Agency employee who recommends final action

on public telecommunications facilities applications and grants to the

Administrator.

Public telecommunications entity means any enterprise which is a

public broadcast station or noncommercial telecommunications entity and

which disseminates public telecommunications services to the public.

Public telecommunications facilities means apparatus necessary for

production, interconnection, captioning, broadcast, or other

distribution of programming, including but not limited to studio

equipment, cameras, microphones, audio and video storage or processors

and switchers, terminal equipment, towers, antennas, transmitters,

remote control equipment, transmission line, translators, microwave

equipment, mobile equipment, satellite communications equipment,

instructional television fixed service equipment, subsidiary

communications authorization transmitting and receiving equipment,

cable television equipment, optical fiber communications equipment, and

other means of transmitting, emitting, storing, and receiving images

and sounds or information, except that such term does not include the

buildings to house such apparatus (other than small equipment shelters

that are part of satellite earth stations, translators, microwave

interconnection facilities, and similar facilities).

Public telecommunications services means noncommercial educational

and cultural radio and television programs, and related noncommercial

instructional or informational material that may be transmitted by

means of electronic communications.

Sectarian means that which has the purpose or function of advancing

or propagating a religious belief.

State includes each of the fifty states, the District of Columbia,

the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American

Samoa, and the Northern Mariana Islands.

System of public telecommunications entities means any combination

of public telecommunications entities acting cooperatively to produce,

acquire or distribute programs, or to undertake related activities.

Subpart B--Application Requirements

Sec. 2301.3 Applicant eligibility.

(a) To apply for and receive a PTFP Construction or Planning Grant,

an applicant must be:

(1) A public or noncommercial educational broadcast station;

(2) A noncommercial telecommunications entity;

(3) A system of public telecommunications entities;

(4) A nonprofit foundation, corporation, institution, or

association organized primarily for educational or cultural purposes;

or,

(5) A state, local, or Indian tribal government (or agency

thereof), or a political or special purpose subdivision of a state.

(b) An applicant whose proposal requires an authorization from the

FCC must be eligible to receive such authorization.

this section, the application may be rejected and returned without

further consideration.

(d) An applicant may request a preliminary determination of

eligibility any time prior to the closing date.

Sec. 2301.4 Scope of projects.

An eligible applicant may file an application with the Agency for a

planning or construction grant. To achieve the objectives set forth at

47 U.S.C. 393(b), the Agency has developed the following categories.

Each application shall be identified as a broadcast or nonbroadcast

project and must fall within at least one of the following categories:

(a) Special applications. NTIA possesses the discretionary

authority to recommend awarding grants to eligible nonbroadcast

applicants whose proposals are so unique or innovative that they do not

clearly fall within the priorities listed in paragraph (b) of this

section. Innovative projects submitted under this category must address

demonstrated and substantial community needs (e.g., service to the

blind or deaf and nonbroadcast projects offering educational or

instructional services).

(b) Priorities. (1) Priority 1--Provision of Public

Telecommunications Facilities for First Radio and Television Signals to

a Geographic Area. Within this category, NTIA establishes three

subcategories:

(i) Priority 1A. Projects that include local origination capacity.

This subcategory includes the planning or construction of new

facilities that can provide a full range of radio and/or television

programs, including material that is locally produced. Eligible

projects include new radio or television broadcast stations, new cable

systems, or first public telecommunications service to existing cable

systems, provided that such projects include local origination

capacity.

(ii) Priority 1B. Projects that do not include local origination

capacity. This subcategory includes projects such as increases in tower

height and/or power of existing stations and construction of

translators, cable networks, and repeater transmitters that will result

in providing public telecommunications services to previously unserved

areas.

(iii) Priority 1C. Projects that provide first nationally

distributed programming. This subcategory includes projects that

provide satellite downlink facilities to noncommercial radio and

television stations that would bring nationally distributed programming

to a geographic area for the first time.

(iv) Priority 1 and its subcategories apply only to grant

applicants proposing to plan or construct new facilities to bring

public telecommunications services to geographic areas that are

presently unserved, i.e., areas that do not receive public

telecommunications services (It should be noted that television and

radio are considered separately for the purposes of determining

coverage. In reviewing applications from FM stations that propose to

serve, or that already serve, areas covered by AM-daytime only

stations, PTFP will evaluate the amount of service provided via the AM-

daytime only station in determining whether the FM proposal qualifies

for a Priority 1 or Priority 2, as appropriate.)

(v) An applicant proposing to plan or construct a facility to serve

a geographical area that is presently unserved should indicate the

number of persons who would receive a first public telecommunications

signal as a result of the proposed project.

(2) Priority 2--Replacement of Basic Equipment of Existing

Essential Broadcast Stations.

(i) Projects eligible for consideration under this category include

the urgent replacement of obsolete or worn out equipment at ``essential

stations'' (i.e., existing broadcast stations that provide either the

only public telecommunications signal or the only locally originated

public telecommunications signal to a geographical area).

(ii) To show that the urgent replacement of equipment is necessary,

applicants must provide documentation indicating excessive downtime, or

a high incidence of repair (i.e., copies of repair records, or letters

documenting

[[Page 27237]]

non-availability of parts). Additionally, applicants must show that the

station is the only public telecommunications station providing a

signal to a geographical area or the only station with local

origination capacity in a geographical area.

(iii) The distinction between Priority 2 and Priority 4 is that

Priority 2 is for the urgent replacement of basic equipment for

essential stations. Where an applicant seeks to ``improve'' basic

equipment in its station (i.e., where the equipment is not ``worn

out''), or where the applicant is not an essential station, NTIA would

consider the applicant's project under Priority 4.

(3) Priority 3--Establishment of a First Local Origination Capacity

in a Geographical Area.

(i) Projects in this category include the planning or construction

of facilities to bring the first local origination capacity to an area

already receiving public telecommunications services from distant

sources through translators, repeaters, or cable systems,

(ii) Applicants seeking funds to bring the first local origination

capacity to an area already receiving some public telecommunications

services may do so, either by establishing a new (and additional)

public telecommunications facility, or by adding local origination

capacity to an existing facility. A source of a public

telecommunications signal is distant when the geographical area to

which the source is brought is beyond the grade B contour of the

origination facility.

(4) Priority 4--Improvement of Public Broadcasting Services:

(i) Projects eligible for consideration under this category are

intended to improve the delivery of public broadcasting services to a

geographic area. These projects include the establishment of a public

broadcast facility to serve a geographic area already receiving public

telecommunications services, projects for the replacement of basic

obsolete or worn-out equipment at existing public broadcasting

facilities and the upgrading of existing origination or delivery

capacity to current industry performance standards (e.g., improvements

to signal quality, and significant improvements in equipment

flexibility or reliability). As under Priority 2, applicants seeking to

replace or improve basic equipment under Priority 4 should show that

the replacement of the equipment is necessary by including in their

applications data indicating excessive downtime, or a high incidence of

repair (such as documented in repair records). Within this category,

NTIA establishes two subcategories:

(ii) Priority 4A.

(A) Applications to replace urgently needed equipment from public

broadcasting stations that do not meet the Priority 2 criteria because

they do not provide either the only public telecommunications signal or

the only locally originated public telecommunications signal to a

geographic area. NTIA will also consider applications that improve as

well as replace urgently needed production-related equipment at public

radio and television stations that do not qualify for Priority 2

consideration but that produce, on a continuing basis, significant

amounts of programming distributed nationally to public radio or

television stations.

(B) The establishment of public broadcasting facilities to serve a

geographic area already receiving public telecommunications services.

The applicant must demonstrate that it will address underserved needs

in an area which significantly differentiates its service from what is

already available in its service area.

stations in areas already served by one or more full-service public

radio stations. The applicant must demonstrate that it will broadcast a

program schedule that does not merely duplicate what is already

available in its service area.

(D) The acquisition of the necessary items of equipment to bring

the inventory of an already-operating station to the basic level of

equipment requirements established by PTFP. This is intended to assist

stations that went on the air with a complement of equipment well short

of what the Agency considers as the basic complement.

(iii) Priority 4B. The improvement and non-urgent replacement of

equipment at any public broadcasting station.

(5) Priority 5 Augmentation of Existing Broadcast Stations.

Projects in this category would equip an existing station beyond a

basic capacity to broadcast programming from distant sources and to

originate local programming.

(i) Priority 5A. Projects to equip auxiliary studios at remote

locations, or to provide mobile origination facilities. An applicant

must demonstrate that significant expansion in public participation in

programming will result. This subcategory includes mobile units,

neighborhood production studios, or facilities in other locations

within a station's service area that would make participation in local

programming accessible to additional segments of the population.

(ii) Priority 5B. Projects to augment production capacity beyond

basic level in order to provide programming or related materials for

other than local distribution. This subcategory would provide equipment

for the production of programming for regional or national use. Need

beyond existing capacity must be justified.

a proposed project fits within at least one of the categories listed in

this section any time prior to the closing date.

(d) All applications will be reviewed after the closing date. If an

application does not fall within one of the listed categories, it may

be rejected and returned without further consideration.

Sec. 2301.5 Special consideration.

In accordance with section 392(f) of the Act, the Agency will give

special consideration to applications that foster ownership of,

operation of, and participation in public telecommunications entities

by minorities and women. The special consideration element is provided

as one of several funding criteria contained in the regulations,

specifically, at 15 CFR section 2301.17(b)(6).

Sec. 2301.6 Amount of Federal funding.

(a) Planning grants. The Agency may provide up to one hundred (100)

percent of the funds necessary for the planning of a public

telecommunications construction project.

(b) Construction grants. (1) A Federal grant for the construction

of a public telecommunications facility may not exceed seventy-five

(75) percent of the amount determined by the Agency to be the

reasonable and necessary cost of such project.

(i) Seventy-five (75) percent Federal funding will be the general

presumption for projects to activate stations or to extend service.

(ii) Fifty (50) percent Federal funding will be the general

presumption for the replacement, improvement or augmentation of

equipment. A showing of extraordinary need (i.e. small community-

licensee stations or a station that is licensed to a large institution

[e.g., a college or university] documenting that it does not receive

direct or in-kind support from the larger institution), or an emergency

situation will be taken into consideration as justification for grants

of up to 75% of the total project cost for such proposals.

[[Page 27238]]

(2) Since the purpose of the PTFP is to provide financial

assistance for the acquisition of public telecommunications facilities,

Total Project Costs do not normally include the value of eligible

apparatus owned or acquired by the applicant prior to the closing date.

Inclusion of equipment purchased prior to the closing date will be

considered on a case-by-case basis only when clear and compelling

justifications are provided to PTFP. Obligating funds--either in whole

or in part--for equipment before the closing date is considered

ownership or acquisition of equipment. In like manner, accepting title

to donated equipment prior to the closing date is considered ownership

or acquisition of equipment.

costs may be met with funds:

(1) Paid by the Federal government, except where the use of such

funds to meet a Federal matching requirement is specifically and

expressly authorized by the relevant Federal statute, or

(2) Supplied to an applicant by the Corporation for Public

Broadcasting, except upon a clear and compelling showing of need.

(d) No funds from the Federal share of the total project cost may

be obligated until the award period start date. If an applicant or

recipient obligates anticipated Federal Award funds before the start

date, the Department may refuse to offer the award or, if the award has

already been granted, disallow those costs of the grant. After the

closing date, the applicant may, at its own risk, obligate non-Federal

matching funds for the acquisition of proposed equipment.

Sec. 2301.7 Eligible and ineligible project costs.

(a) Each year the Agency reviews its list of eligible and

ineligible equipment, supplies, and costs. The list is published in the

Federal Register as part of the solicitation for applications and a

copy is provided with every application package for PTFP grants.

(b) All broadcast equipment that a grantee acquires under this

program shall be of professional broadcast quality. An applicant

proposing to utilize nonbroadcast technology shall propose and purchase

equipment that is compatible with broadcast equipment wherever the two

types of apparatus interface.

apparatus owned or acquired by the applicant prior to the closing date

unless approved by PTFP on a case-by-case basis in writing pursuant to

Sec. 2301.6(b)(2).

Sec. 2301.8 Submission of applications.

(a) Applications can be obtained from the following address: Public

Telecommunications Facilities Program, NTIA/DOC, 14th Street and

Constitution Avenue NW., Room H-4625, Washington, DC 20230.

(b) The Administrator shall select and publish in the Federal

fiscal year are to be filed.

received by the Agency at the address listed in the annual Federal

the closing date. Applications received after the closing date shall be

rejected and returned without further consideration.

(d) A complete application must include all of the information

required by the Agency application materials and must be submitted in

the number of copies specified by the Agency.

(e) Each copy of the Agency application must contain an original

signature of an officer of the applicant who is legally authorized to

sign for the applicant.

(f) Applicants must certify whether they are delinquent on any

Federal debt.

(g) Applicants may be required to submit Name Check forms (Form CD-

346) which may be used to ascertain background information on key

individuals associated with potential grantees as part of the

application, per Department Pre-Award Administrative Requirements and

Policies.

(h) Applicant organizations may also be subject to a responsibility

determination by the Department which may include, but not be limited

to reviews of financial and other business activities. Responsibility

determinations are intended to ascertain whether potential grantee

organizations or their key personnel have been involved in or are

facing any matters that might significantly and negatively impact on

their business honesty, financial integrity and/or ability to

successfully perform the proposed grant activities.

(i) Unsatisfactory performance by the applicant under prior Federal

awards may result in the application not being funded.

Sec. 2301.9 Deferred applications.

(a) An applicant may reactivate an application deferred by the

Agency during the prior year if the applicant has not substantially

changed the stated purpose of the application.

(b) An applicant may reactivate a deferred application only during

the two consecutive years following the application's initial filing

with the Agency.

an updated application, whether mailed or hand delivered, at or before

5:00 p.m. on the closing date.

(d) An updated application must include all of the information

required by the Agency application materials and must be submitted in

the number of copies specified by the Agency.

(e) Deferred applications that are resubmitted under this section

and contain substantial changes will be considered as new applications.

(f) All deferred applications may be subject to a determination of

eligibility during subsequent grant cycles.

Sec. 2301.10 Applications resulting from catastrophic damage or

emergency situations.

(a) An application may be filed with a request for a waiver of the

closing date, as provided in Sec. 2301.26, when an eligible broadcast

applicant suffers catastrophic damage to the basic equipment essential

to its continued operation as a result of a natural or manmade

disaster, or as the result of complete equipment failure, and is in

dire need of assistance in funding replacement of the damaged

equipment.

(b) The request for a waiver must set forth the circumstances that

prompt the request and be accompanied by appropriate supporting

documentation.

applicant either carried adequate insurance or had acceptable self-

insurance coverage.

(d) Applications filed and accepted pursuant to this section must

contain all of the information required by the Agency application

materials and must be submitted in the number of copies specified by

the Agency.

(e) The application will be subject to the same evaluation and

selection process followed for applications received in the normal

application cycle, although the Administrator may establish a special

timetable for evaluation and selection to permit an appropriately

timely decision.

Sec. 2301.11 Service of applications.

On or before the closing date all new or deferred applicants must

serve a summary copy of the application on the following agencies:

(a) In the case of an application for a construction grant for

which FCC authorization is necessary, the Secretary, Federal

Communications Commission, 1919 M Street, N.W., Washington, DC 20554;

(b) The state telecommunications agency(-ies), if any, having

jurisdiction

[[Page 27239]]

over the development of broadcast and/or nonbroadcast

telecommunications in the state(s) and the community(-ies) to be served

by the proposed project; and

Executive Order 12372, as amended by Executive Order 12416, in all

states where equipment requested in the application will be located and

where the state has established such an office and wishes to review

these applications.

Sec. 2301.12 Federal Communications Commission authorizations.

(a) Each applicant whose project requires FCC authorization must

file an application for that authorization on or before the closing

date. NTIA recommends that its applicants submit PTFP-related FCC

applications to the FCC at least 60 days prior to the PTFP closing

date. The applicant should clearly identify itself to the FCC as a PTFP

applicant.

(b) In the case of FCC authorizations where it is not possible or

practical to submit the FCC license application with the PTFP

application, such as C-band satellite uplinks, low power television

stations and translators, remote pickups, studio-to-transmitter links,

and Very Small Aperture Terminals, a copy of the FCC application as it

will be submitted to the FCC, or the equivalent engineering data, must

be included in the PTFP application.

submit the FCC application or equivalent engineering data as part of

the PTFP application. When such a project is funded, however, grantees

will be required to submit evidence of FCC registration of the C-band

downlink prior to the release of Federal funds.

(d) Any FCC authorization required for the project must be in the

name of the applicant for the PTFP grant.

(e) If the project is to be associated with an existing station,

the FCC operating authority for that station must be current and valid.

(f) For any project requiring new authorization(s) from the FCC,

the applicant must file a copy of each FCC application and any

amendments with the Agency.

(g) If the applicant fails to file the required FCC application(s)

by the closing date, or if the FCC returns, dismisses, or denies an

application required for the project or any part thereof, or for the

operation of the station with which the project is associated, the

Agency may reject and return the application.

(h) No grant will be awarded until confirmation has been received

from the FCC that any necessary authorization will be issued.

Sec. 2301.13 Public comments.

(a) After the closing date, the Agency will publish a list of all

applications received.

(b) The applicant shall make a copy of its application available at

its offices for public inspection during normal business hours.

for public inspection during normal business hours.

(d) Any interested party may file comments with the Agency

supporting or opposing an application and setting forth the grounds for

support or opposition. Any opposing comments must contain a

certification that a copy of the comments has been delivered to the

applicant. Comments must be sent to the address listed in

Sec. 2301.8(a).

(e) The Agency shall incorporate all comments from the public and

any replies from the applicant in the applicant's official file for

consideration during the evaluation of the application.

Sec. 2301.14 Supplemental application information.

(a) The Agency may request from the applicant any additional

information that the Agency deems necessary to clarify the application.

Applicants must provide to the Agency additional information that the

Agency requests within fifteen (15) days of the date of the Agency's

notice. Applicants must submit a copy of the requested information for

each copy of the application submitted by the Closing Date.

(b) Applicants must immediately provide to the Agency information

received after the closing date that materially affects the

application, including:

(1) State Single Point of Contact and State Telecommunications

Agency comments on applications;

(2) FCC file numbers and changes in the status of FCC applications

necessary for the proposed project;

(3) Changes in the status of proposed local matching funds,

including notification of the passage (including reduction or

rejection) of a proposed state appropriation or receipt (or denial) of

a proposed substantial matching gift;

(4) Changes that affect the applicant's eligibility under

Sec. 2301.3;

(5) Changes in the status of proposed production, participation, or

distribution agreements (if relevant to the proposed project);

(6) Changes in lease or site rights agreements; and

(7) Complete failure of major items of equipment for which

replacement costs have been requested or changes in the status of the

need for the equipment requested.

submitted to the Agency in the copy of the application made available

for public inspection pursuant to Sec. 2301.13.

(d) Applicants may not contact the Department to discuss the merits

of an application when it is under review.

Sec. 2301.15 Withdrawal of applications.

(a) Applicants may request withdrawal of an application from

consideration for funding without affecting future consideration.

Withdrawn applications will be returned by the Agency.

(b) A request that the Agency defer an application for

consideration in a subsequent year will be treated as a request for

withdrawal.

Subpart C: Evaluation and Selection Process

Sec. 2301.16 Technical evaluation.

(a) In determining whether to approve or defer a construction or

planning grant application, in whole or in part, and the amount of such

grant, the Agency will evaluate all the information in the application

file.

(b) PTFP grants are awarded on the basis of a competitive review

process. The evaluation of the applications is based upon the

evaluation criteria provided under Sec. 2301.17.

evaluation by PTFP staff; technical assessment by engineers; an

evaluation by outside reviewers, all of whom have demonstrated

expertise in either public broadcasting or distance learning; and

rating by a national advisory panel, composed of representatives of

major national public radio and television organizations.

(d) In acting on applications and carrying out other

responsibilities under the Act, the Agency shall consult (as

appropriate) with the FCC, the Corporation for Public Broadcasting,

state telecommunications agencies, public broadcasting agencies,

organizations, and other agencies administering programs that may be

coordinated effectively with Federal assistance provided under the Act;

and, the state office established to review applications under

Executive Order 12372, as amended by Executive Order 12416,

(e) Based upon the evaluation criteria contained in Sec. 2301.17,

the PTFP

[[Page 27240]]

program staff will prepare summary evaluations. These will incorporate

the outside reviewers' recommendations, engineering assessments, and

program staff evaluations.

Sec. 2301.17 Evaluation criteria for construction and planning

applications.

(a) For each application that is filed in a timely manner by an

eligible applicant, is materially complete, and proposes an eligible

project, the Agency will consider the following factors:

(1) Project Objectives: The degree to which the application

documents that the proposed project fulfills the objectives and

specific requirements of one or more of the categories set forth in

Sec. 2301.4.

(2) Applicant Qualifications: Documentation that the applicant has

or will have sufficient qualified staff to complete the project,

operate and maintain the facility, and provide services of professional

quality.

(3) Urgency: Documentation that justifies funding the proposed

project during the current grant cycle.

(4) Financial Qualifications: Documentation reflecting the

applicant's ability to provide non-Federal funds required for the

project, including funds for the local match and funds to cover any

ineligible costs required for completion of the project; to ensure

long-term financial support for the continued operation of the facility

during the Federal interest period; to adequately justify the need for

Federal funds in excess of fifty (50) percent of total project costs

(see Sec. 2301.6(b)(ii)), if requested for equipment replacement,

improvement, or augmentation projects; and, in the case of planning,

provide non-Federal support and resources (if proposed by the

applicant), including matching or in-kind support for the project.

(5)(i) Technical Qualifications (construction applicants only):

Documentation that the eligible equipment requested is necessary to

achieve the objectives of the project; that the proposed costs reflect

the most efficient use of Federal funds in achieving project

objectives; that the equipment requested meets current industry

performance standards (and FCC standards, if appropriate); that the

condition of existing equipment justifies its prompt replacement; and

that an evaluation of alternative technologies has been completed that

justifies the selection of the requested technology (where alternative

technologies are possible).

(ii) Planning Qualifications (planning applicants only):

Documentation : of the feasibility of the proposed planning process and

timetable for achieving the expected results; that costs proposed

reflect the most efficient use of Federal funds; that the applicant has

sufficient qualified staff or consultants to complete the planning

project with professional results; and that an evaluation of

alternative technologies will be incorporated into the plan, if

appropriate.

(6) Special Consideration: Documentation of the extent to which

broadcast applications would increase minority and women's ownership

of, operation of, and participation in public telecommunications

entities, as stated in Sec. 2301.5

(b) The Agency will provide each applicant with guidance in the

application materials on the type of documentation necessary to meet

each of the above evaluation criteria.

Sec. 2301.18 Selection process.

(a) The PTFP Director will consider the summary evaluations

prepared by program staff, rank the applications, and present

recommendations to the Selecting Official, the NTIA Administrator,

taking into account the following selection factors:

(1) The program staff evaluations, including the outside reviewers.

(2) The scope of projects set forth at Sec. 2301.4.

(3) Whether the application is for broadcast or a nonbroadcast

project.

(4) The geographic distribution of the proposed grant awards.

(5) The availability of funds.

(b) The Administrator makes final award selections taking into

consideration the Director's recommendations and the degree to which

the slate of applications, taken as a whole, satisfies the program's

stated purposes set forth at Sec. 2301.1.

from the FCC that any necessary authorization will be issued.

(d) After final award selections have been made, the Agency will

notify the applicant of one of the following actions:

(1) Selection of the application for funding, in whole or in part;

(2) Deferral of the application for subsequent consideration;

(3) Rejection of the application with an explanation and the

reason, if an applicant is not eligible or if the proposed project does

not fall within at least one of the categories enumerated at

Sec. 2301.4; or,

(4) Return of applications that were deferred by the Agency after

consideration during three grant cycles.

(e) The Agency will notify the following organizations of those

applications selected for funding:

(1) The state educational telecommunications agency(-ies), if any,

in any state any part of which lies within the service area of the

applicant's facility;

(2) The FCC; and,

(3) The Corporation for Public Broadcasting and, as appropriate,

other public telecommunications entities.

Subpart D--Post-Award Requirements

Sec. 2301.19 General conditions attached to the Federal award.

(a) During the project award period and the remainder of the

Federal interest period, the grantee must:

(1) Continue to be an eligible organization as described in

Sec. 2301.3;

(2) Obtain and continue to hold any necessary FCC authorization(s);

(3) Use the Federal funds for which the grant was made for the

equipment and other expenditure items specified in the application for

inclusion in the project, except that the grantee may substitute other

items where necessary or desirable to carry out the purpose of the

project if approved in advance by the agency in writing. These changes

include but are not limited to the following:

(i) Costs (including planning costs),

(ii) Essential specifications of the equipment,

(iii) The engineering configuration of the project,

(iv) Extensions of the approved grant award period, and

(v) Transfers of a grant award to a successor in interest, pursuant

to Sec. 2301.19(c).

(4) Use the facilities and any monies generated through the use of

the facilities primarily for the provision of public telecommunications

services and ensure that the use of the facilities for other than

public telecommunications purposes does not interfere with the

provision of the public telecommunications services for which the grant

was made;

(5) Not make its facilities available to any person for the

broadcast or other transmission intended to be received directly by the

public, of any advertisement, unless such broadcast or transmission is

expressly and specifically permitted by law or authorized by the FCC;

and

(6) State when advertising for bids for the purchase of equipment

that the Federal government has an interest in facilities purchased

with Federal funds under this program that begins with the purchase of

the facilities and continues

[[Page 27241]]

for ten (10) years after the completion of the project.

(b) During the period in which the grantee possesses or uses the

Federally funded facilities, the grantee may not use or allow the use

of the Federally funded equipment for purposes the essential thrust of

which are sectarian for the useful life of the equipment even when this

extends beyond the ten (10) year Federal interest period.

reassign a grant to a successor in interest or subsidiary corporation

of a grantee in cases where a similar operational entity remains in

control of the grant and the original objectives of the grant remain in

effect. Each party must provide, in writing, its assent to the

substitution. Any substituted party must meet the eligibility

requirements.

Sec. 2301.20 Schedules and Reports.

(a) Within thirty (30) calendar days of the award date the grantee

shall submit to the Agency, in duplicate, a construction schedule or a

revised planning timetable that will include the information requested

in the grant terms and conditions in the award package.

(b) During the project period of this grant, the grantee shall

submit performance reports, in duplicate, on a calendar year quarterly

basis for the period ending March 31, June 30, September 30, and

December 31, or any portions thereof. The Quarterly Performance Reports

should contain the following information:

(1) A comparison of actual accomplishments during the reporting

period with the goals and dates established in the Construction or

Planning Schedule for that reporting period;

(2) A description of any problems that have arisen or reasons why

established goals have not been met;

(3) Actions taken to remedy any failures to meet goals; and

(4) Construction projects must also include a list of equipment

purchased during the reporting period compared with the equipment

authorized. This information must include manufacturer, make and model

number, brief description, number and date of the items purchased, and

cost.

Sec. 2301.21 Payment of Federal funds.

(a) The Department will not make any payment under an award, unless

and until the recipient complies with all relevant requirements imposed

by this Part. Additionally:

(1) The Department will not make any payment until it receives

confirmation that the FCC has granted any necessary authorization;

(2) The Department may not make any payment under an award unless

and until all special award conditions stated in the award documents

that condition the release of Federal funds are met; and

(3) An agreement to share ownership of the grant equipment (e.g., a

joint venture for a tower) must be approved by the Agency before any

funds for the project will be released.

(b) As a general matter, the Agency expects grantees to expend

local matching funds at a rate at least equal to the ratio of the local

match to the Federal grant as stipulated in the grant award.

Sec. 2301.22 Protection, acquisition and substitution of equipment.

(a) To assure that the Federal investment in public

telecommunications facilities funded under the Act will continue to be

used to provide public telecommunications services to the public during

the Federal interest period, the Agency may require a grantee to:

(1) Execute and record a document establishing that the Federal

government has a priority lien on any facilities purchased with funds

under the Act during the period of continuing Federal interest. The

document shall be recorded where liens are normally recorded in the

community where the facility is located and in the community where the

grantee's headquarters are located; and

(2) File a certified copy of the recorded lien with the

Administrator ninety (90) days after the grant award is received.

(b) The grantee shall maintain protection against common hazards

through adequate insurance coverage or other equivalent undertakings,

except that, to the extent the applicant follows a different policy of

protection with respect to its other property, the applicant may extend

such policy to apparatus acquired and installed under the project. The

grantee shall purchase flood insurance (in communities where such

insurance is available) if the facilities will be constructed in any

area that has been identified by the Secretary of Health and Human

Services as having special flood hazards.

interests in the equipment acquired under this grant during the Federal

interest period.

(d) The grantee shall demonstrate that the grantee has obtained

appropriate title or lease satisfactory to protect the Federal interest

to the site or sites on which apparatus proposed in the project will be

operated. The grantee must have the right to occupy, construct,

maintain, operate, inspect, and remove the project equipment without

impediment to assure the sufficient continuity of operation of the

facility; and nothing must prevent the Federal government from entering

the property and reclaiming or securing PTFP-funded property.

(e) The Agency will allow the acquisition of facilities by lease;

however, the following requirements apply:

(1) The lease must be of benefit to the Federal government;

(2) The actual amount of the lease must not be more than the

outright purchase price would be; and

(3) The lease agreement must state that in the event of anticipated

or actual termination of the lease, the Federal government has the

right to transfer and assign the leasehold to a new grantee for the

duration of the lease contract.

(f) Transfer of equipment. Where the grant equipment is no longer

needed for the original purposes of the project, the Agency may

transfer the equipment to the Federal government or an eligible third

party, in accordance with Office of Management and Budget guidelines.

(g) Transfer of Federal interest to different equipment. The Agency

may transfer the Federal interest in PTFP-funded equipment to other

eligible equipment presently owned or to be purchased by the grantee

with non-Federal monies, provided the following conditions are met:

(1) If the Federal interest is to be transferred to other equipment

presently owned or to be purchased by a grantee, the Federal interest

in the new equipment must be at least equal to the Federal interest in

the original equipment.

(2) Equipment previously funded by PTFP that is within the Federal

interest period may not be used in a transfer request as the designated

equipment to which the Federal interest is to be transferred.

(3) The same item can be used only once to substitute for the

Federal interest. However, the Federal interest in several items of

equipment from different grants may be transferred to a single item if

the request for all such transfers is submitted at the same time.

(4) A lien on equipment transferred to the Federal interest may be

required by PTFP and must be recorded in accordance with

Sec. 2301.23(b)(8). A copy of the lien document must be filed with the

PTFP within sixty (60) days of the date of approval of the transfer of

Federal interest.

[[Page 27242]]

(h) Termination by buy-out. A grantee may terminate the Federal

revisionary interest in a PTFP grant by buying out the Federal interest

with non-Federal monies. Buy-outs may be requested at any time.

Subpart E--Completion of Projects

Sec. 2301.23 Completion of projects.

(a) Upon completion of a planning project, the grantee must

promptly provide to the Administrator two copies of any report or study

conducted in whole or in part with funds provided under this program by

sending the copies to the Agency.

(1) This report shall meet the goals and objectives for which the

grant is awarded and shall follow the written instructions and guidance

provided by the Agency. The grant award goals and objectives are stated

in the planning narrative as amended and are incorporated by reference

into the award agreement.

(2) The Agency shall review this report for the extent to which

those goals and objectives are addressed and met, for evidence that the

work contracted for under the grant award was in fact performed, and to

determine whether the written instructions and guidance provided by the

Agency, if any, were followed.

(3) If the Agency determines that the report fails to address or

meet any grant award goals or objectives, or if there is no evidence

that the work contracted for was in fact performed, or if this report

clearly indicates that the written instructions and guidance provided

by the Agency, if any, were disregarded, then the Agency may pursue

remedial action.

(4) An unacceptable final report may result in the disallowance of

claimed costs and the establishment of an account receivable by the

Department.

(b) Upon completion of a construction project, the grantee must:

(1) Certify that the grantee has acquired, installed, and begun

operating the project equipment in accordance with the project as

approved by the Agency, and has complied with all terms and conditions

of the grant as specified in the Grant Award document;

(2) Certify that the grantee has obtained any necessary FCC

authorizations to operate the project apparatus following the

acquisition and installation of the apparatus and document the same;

(3) Certify and document that the facilities have been acquired,

that they are in operating order, and that the grantee is using the

facilities to provide public telecommunications services in accordance

with the project as approved by the Agency;

(4) Certify that the grantee has obtained adequate insurance to

protect the Federal interest in the project in the event of loss

through casualty;

(5) Certify, if not previously provided, that the grantee has

acquired all necessary leases or other site rights required for the

project;

(6) Certify, if appropriate, that the grantee has qualified for

receipt of funds from the Corporation for Public Broadcasting;

(7) Provide a complete and accurate final inventory of equipment

acquired under the project and a final accounting of all project

expenditures, including non-equipment costs (e.g., installation costs);

and

(8) Execute and record a final priority lien, if required by PTFP,

reflecting the completed project and assuring the Federal government's

reversionary interest in all equipment purchased under the grant

project for the duration of the Federal interest period.

will assign a completion date that the Agency will use to calculate the

termination date of the Federal interest period. The completion date

will usually be the date on which the project period expires unless the

grantee certifies in writing prior to the project period expiration

date that the project is complete and in accord with the terms and

conditions of the grant, as required under Sec. 2301.23(b)(1). If the

PTFP Director determines that the grantee improperly certified the

project to be complete, the PTFP Director will amend the completion

date accordingly.

Sec. 2301.24 Final Federal payment.

If the total allowable, allocable, and reasonable costs incurred in

completing the planning or construction project are less than the total

project award amount, the Agency shall reduce the amount of the final

Federal share on a pro rata basis. If, however, the actual costs

incurred in completing the project are more than the estimated total

project costs, then in no case will the final Federal funds paid exceed

the initial grant award.

Sec. 2301.25 Retention of records and annual status reports.

(a) All grantees shall keep intact and accessible all records

specified in Office of Management and Budget Circular A-110 (for

educational institutions, hospitals, and nonprofit organizations), or

15 CFR part 24 (for State and Local Governments), and 15 CFR part 29a

(Audit Requirements for State and Local Governments) or 15 CFR part 29b

(Audit Requirements for Institutions of Higher Education and Other

Nonprofit Organizations), as appropriate.

(b) Recipients of construction grants:

(1) Are required to submit an Annual Status Report for each grant

project that is in the Federal interest period. The Reports are due no

later than April 1 in each year of the period. Information about what

is to be included in the Annual Status Report is supplied to grant

recipients at the time grants are closed out.

(2) Shall retain an inventory of the equipment for the duration of

the ten year Federal interest period and shall mark project apparatus

in a permanent manner to assure easy and accurate identification and

reference to inventory records. The marking shall include the PTFP

grant number and an inventory number assigned by the grantee.

(3) May also be required to take whatever steps may be necessary to

ensure that the Federal government's reversionary interest continues to

be protected for the 10-year period by recording, when and where

required, a lien continuation statement and reporting that fact in the

Annual Status Report.

Subpart F: Waivers

Sec. 2301.26 Waivers.

For good cause shown, the Administrator may waive the regulations

adopted pursuant to section 392(e) of the Act. Waivers may only be

granted for regulatory requirements that are discretionary and not

statutorily mandated.

[FR Doc. 96-13572 Filed 5-29-96; 8:45 am]

BILLING CODE 3510-60-P

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.