# Economic Development Administration Regulations; Revision To Implement the Economic Development Reform Act of 1998 > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A99-1983 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** February 3, 1999 - **Citation:** 64 FR 5348 ## Text SUMMARY: The purpose of this interim-final rule is to revise regulations of the Economic Development Administration (EDA) to implement the comprehensive amendment to the Public Works and Economic Development Act of 1965, as amended, by the Economic Development Administration Reform Act of 1998 (Pub. L.105-393). DATES: Effective date: February 11, 1999. Comment date: Comments are due on or before April 5, 1999. ADDRESSES: Send comments to Edward M. Levin, Chief Counsel, Economic Development Administration, U.S. Department of Commerce, Herbert C. Hoover Building, 1401 Constitution Avenue, NW, Room 7005, Washington, DC 20230 FOR FURTHER INFORMATION CONTACT: Edward M. Levin, Chief Counsel, Telephone Number 202-482-4687, fax 202-482-5671, and e-mail EL[email protected]. SUPPLEMENTARY INFORMATION: Background The Economic Development Administration (EDA) was reauthorized for a five-year period by legislation enacted on November 13, 1998. Congress had not authorized the agency since 1982. This legislative accomplishment will create stability and opportunities for EDA to better serve economically distressed communities across the country. EDA continues to take steps toward improving its program delivery, policies and procedures, and to be more responsive to those whom it serves. In step with the National Performance Review and Paperwork Reduction Act, EDA had completely revised its regulations, thereby creating fewer burdens on and making them more accessible to the public. This interim-final rule continues EDA's efforts in this regard. Description of Major Changes This interim-final rule removes, adds, redesignates and revises parts and sections of EDA's regulations at 13 CFR Chapter III to implement Pub. L. 105-393 and to continue the streamlining and plain language initiatives of this administration. Significant changes are described below. Removals of Parts and Sections Certain parts and sections have been removed because the programs to which these regulations apply were deleted by Pub. L. 105-393 as follows: Part 302 Economic Development Districts, Subpart B--Standards for Designation, Modification, and Termination of Economic Development Centers and Subpart C, Financial and Other Assistance to Economic Development Centers and Districts; part 312, Supplemental and Basic Assistance Under Section 304 of the Act; references to and requirements under the Public Works Impact Program in parts 301 and 305 and Sec. 316.3; Sec. 305.10 Construction cost increases; Sec. 316.2 Certification as to waste treatment, and Sec. 316.5 Electric and gas facilities. Other parts and sections were removed to streamline and simplify the rules such as: Sec. 302.1 Authorization of Economic Development Districts, and Sec. 305.12 Variance in cost of grant projects. New Parts and Sections New parts and sections have been added to implement Pub. L. 105-393 as follows: Pursuant to sec. 302 of Pub. L. 105-393, new language has been added in Secs. 301.3, 305.3 and 308.5 on requirements for strategies for public works and economic adjustment projects (except for planning); pursuant to sec. 601 of Pub. L. 105-393, with EDA's prior written approval EDA may release its grant related property interests 20 years after the grant award, and Sec. 314.11(b) releases all real and personal property in projects funded under Pub. L. 94-369, as amended by Pub. L. 95-28. Other sections have been added in light of new provisions in Pub. L. 105-393, such as Sec. 316.13 Economic development information clearinghouse, Sec. 316.17 Acceptance of certifications by applicants, and Sec. 316.18 Reports by recipients, and part 318 Evaluations of Economic Development Districts and University Centers. New parts of sections have been added for other reasons, for example, Sec. 314.3(c) defines ``adequate consideration'' to distinguish it from fair market value; and Sec. 314.7(c) provides exceptions to the title requirement when for example, a railroad or state or local highway is part of the EDA funded project. Significant Revisions Part 301--Designation of Areas has been substantially rewritten because under Pub. L. 105-393 areas designated by EDA prior to the effective date of Pub. L. 105-393 will no longer be so designated and areas thereafter will be determined on a project by project basis (for public works and economic adjustment projects, except for planning activities); and Sec. 316.2 has been redesignated and substantially changed to more accurately reflect statutory intent and practices and procedures for determining if a project would result in excess capacity. Other significant changes--Grant rates have been modified at Sec. 301.4 to cover all EDA grants (not just public works awards) and to reflect changed unemployment conditions; and Sec. 308.3 has been changed to revise area criteria for economic adjustment projects to emphasize unique economic adjustment tools. Note EDA has recently established a task force to examine its Revolving Loan Fund (RLF) program as described in part 308 of these rules. The results of this task force may lead to changes in EDA's RLF program. An interest rate buy down program (see Sec. 308.3), is being considered under EDA's Economic Adjustment program. Suggestions on structuring and implementing such a program are welcome. As part of the economic development clearinghouse described in Sec. 316.14, EDA's Office of Economic Development Information is accessible on the internet web sites at http:// www.doc.gov/eda and http://netsite.esa.doc.gov/oeci. Table of Changes ------------------------------------------------------------------------ Description of Old section New section change ------------------------------------------------------------------------ Sec. 300.1................. Sec. 300.1......... Renamed and changed for Plain Language purposes. [[Page 5349]] Part 301--Designation of Part 301--General Renamed. areas. eligibility and grant rate requirements. Secs. 301.1-301.16......... .................... Removed since under Pub. L. 105-393 there is no longer area designation except on a project- by-project basis. Secs. 301.1-301.4.. New Secs. include information and requirements about applicants, area eligibility, strategy required and grant rates. Sec. 302.1................. .................... Removed. Sec. 302.2................. Sec. 302.1......... Redesignated and modified for Plain Language purposes. Sec. 302.3................. Sec. 302.2......... Redesignated and modified for Plain Language purposes. Sec. 302.4................. Sec. 302.3......... Redesignated and modified for Plain Language purposes. Sec. 302.5................. Sec. 302.4......... Redesignated and modified for Plain Language purposes. Sec. 302.6................. Sec. 302.4......... Made part of this new section. Sec. 302.7................. Sec. 302.5......... Redesignated and streamlined. Sec. 302.8................. Sec. 302.6......... Redesignated, modified and streamlined. Sec. 302.9................. Sec. 301.4(d)...... Redesignated, terminology modified, and portions removed since Economic Development Centers are no longer part of PWEDA Sec. 302.7......... New under Pub. L. 105-393. Secs. 302.10-302.19........ .................... Removed since Economic Development Centers are no longer part of PWEDA. Part 303--Overall Economic Part 303--Planning Renamed. Development Program. Process and Strategies for District and Other Planning Organizations Supported by EDA. Sec. 303.1................. Sec. 303.1......... Renamed and modified to add definitions and streamlined. Secs. 303.2, 303.3......... .................... Removed. Secs. 303.4, 303.5, 303.6.. Secs. 303.2, 303.3. Renamed and revised for Plain Language purposes and consistent with Pub. L. 105-393. Sec. 304.1................. Secs. 304.1, 304.2. Renamed and revised to make more accessible to reader. Sec. 304.2................. Secs. 307.11, Renamed and 307.14. redesignated to implement Pub. L. 105-393. Part 305--Public Works and .................... Part 305--Grants for Development Facilities Public Works and Program. Development Facilities Renamed. Sec. 305.2................. Sec. 300.2......... Renamed and applicable to all programs. Sec. 305.3......... Application requirements. Secs. 305.3, 305.4......... Sec. 305.2......... Renamed, merged and modified to implement Pub. L. 105-393. Secs. 305.5, 305.6......... Sec. 305.4......... Renamed, combined and modified to implement Pub. L. 105-393. Sec. 305.7................. .................... Removed. Secs. 305.8, 305.9......... Sec. 301.4......... Renamed and applicable to all programs. Sec. 305.10................ .................... Removed. Sec. 305.11................ Sec. 305.5......... Redesignated and revised to make more accessible to reader. Sec. 305.12................ .................... Removed. Sec. 305.13................ Sec. 305.6......... Redesignated. Sec. 305.7......... Added for guidelines and reports. Part 306 [Reserved]; Part Part 306--Planning Renamed and revised 307--Local Technical Assistance. under Pub. L. 105- Assistance, University 393 and for Plain Center Technical Language purposes. Assistance, National Technical Assistance, Research and Evaluation and Planning--Subpart E-- Economic Development Districts American Indian Tribes and Redevelopment Areas Economic Development Planning Grants and Subpart F--State and Urban Development Planning Grants. Part 307--Local Technical Part 307--Local Renamed consistent Assistance, University Technical with Pub. L. 105- Center Technical Assistance, 393. Assistance, National University Center Technical Assistance, Technical Research and Evaluation and Assistance, Planning. National Technical Assistance, Training, Research and Evaluation. Sec. 307.2................. Sec. 300.2......... Redesignated to apply to all programs and this program in particular. Secs. 307.3, 307.4......... Sec. 307.2......... Renamed, merged and revised to make more accessible to reader. [[Page 5350]] Sec. 307.5................. Sec. 307.3......... Renamed, redesignated and revised to make more accessible to reader and in accordance with Pub. L. 105-393. Sec. 307.6................. Sec. 307.4......... Redesignated. Sec. 307.7................. Sec. 300.2......... Redesignated to apply to all programs and this program in particular. Secs. 307.8, 307.9......... Sec. 307.5......... Renamed, merged and revised to make more accessible to reader. Sec. 307.10................ Sec. 307.6......... Renamed, redesignated and revised to make more accessible to reader and in accordance with Pub. L. 105-393. Subpart C--National Subpart C--National Renamed, merged and Technical Assistance, Technical redesignated to be Subpart D--Research and Assistance, consistent with Evaluation. Training, Research, Pub. L. 105-393. and Evaluation. Secs. 307.11, 307.16....... Sec. 307.7......... Redesignated, merged and revised to make more accessible to reader. Secs. 307.12, 307.17....... Sec. 300.2......... Renamed and merged as applicable to all programs and to this program in particular. Secs. 307.13, 307.14, Sec. 307.8......... Renamed, merged and 307.18, 307.19. revised to make more accessible to reader. Secs. 307.15, 307.21....... Sec. 307.9......... Renamed, revised and modified for Plain Language purposes. Sec. 307.20................ .................... Removed--will be in Notice(s) of Funding Availability--Reque st for Proposals. Secs. 307.22............... Sec. 306.1......... Redesignated, merged and revised consistent with Pub. L. 105-393. Sec. 307.23................ .................... Removed. Secs. 307.24, 307.30....... Sec. 300.2......... Applicable to all programs. Secs. 307.25, 307.26, Sec. 306.2......... Renamed, merged, 307.31, 307.32. streamlined and modified for Plain Language purposes. Secs. 307.27, 307.33....... Secs. 306.3, 306.4. Redesignated and made consistent with Pub. L. 105- 393. Sec. 307.28................ Sec. 302.3......... Part of new provision on District Organizations. Part 308--Requirements for Part 308-- Renamed consistent Grants Under the Title IX Requirements for with Pub. L. 105- Economic Adjustment Program. Economic Adjustment 393. Grants. Sec. 308.2................. Sec. 308.3......... Renamed and revised to make more accessible to reader. Sec. 308.3................. Secs. 308.5, 300.2. Renamed and revised to be more accessible to readers and applicable to all programs. Sec. 308.4................. Sec. 308.2......... Renamed and revised for consistency with Pub. L. 105- 393. Secs. 308.5, 308.6......... Sec. 308.4......... Renamed, merged and modified to implement Pub. L. 105-393 and to be more accessible to readers. Sec. 308.7................. Sec. 308.6......... Renamed and streamlined. Part 312--Supplemental and Section 304 of the Removed as no longer Basic Assistance Under. Act. in effect. Part 314--Property.......... Part 314--Property Renamed. Management Standards. Sec. 314.9................. Sec. 314.9......... Renamed and expanded to refer to title requirements. Subpart D--Release Added to implement of EDA's Property provision of Pub. Interest. L. 105-393 and to clarify EDA's property release requirements. Sec. 316.2................. .................... Removed as no longer in effect. Sec. 316.3................. Sec. 316.2......... Redesignated and clarified. Sec. 316.4................. Sec. 316.3......... Redesignated. Sec. 316.5................. .................... Removed as no longer in effect. Sec. 316.6................. Sec. 316.4......... Redesignated. Sec. 316.7................. Sec. 316.5......... Redesignated. Sec. 316.8................. Sec. 316.6......... Redesignated. Sec. 316.9................. Sec. 316.7......... Redesignated. Sec. 316.10................ Sec. 316.8......... Redesignated and clarified. Sec. 316.11................ Sec. 316.9......... Redesignated. Sec. 316.12................ .................... Removed as included in Sec. 316.8. Sec. 316.13................ Sec. 316.10........ Renamed and modified. Secs. 316.11-316.18 Added to implement provisions of Pub. L. 105-393. Sec. 316.19........ Added to replace current procedures and requirements. Part 318-- Added to implement Evaluations of provisions of Pub. Economic L. 105-393. Development Districts and University Centers. ------------------------------------------------------------------------ [[Page 5351]] Savings Clause The rights, duties, and obligations of all the parties pursuant to parts, sections and portions thereof of the Code of Federal Regulations removed by this rule shall continue in effect, except that EDA may waive administrative or procedural requirements of provisions removed by this rule. Executive Orders 12866 and 12875 This rule has been determined to be significant for the purposes of E.O. 12866, Regulatory Planning and Review. In addition, it has been determined that, consistent with the requirements of E.O. 12875, Enhancing Intergovernmental Partnership, this interim final rule will not impose any unfunded mandates upon State, local, and tribal governments. Notice and Comment This rule is not subject to the rulemaking requirements of 5 U.S.C. 553 because it relates to public property, loans, grants, benefits, and contracts, 5 U.S.C. 553(c)(2), including the provision of prior notice and an opportunity for public comment and delayed effective date. No other law requires that notice and opportunity for comments be given for this rule. However, because the Department is interested in receiving comments from those who will benefit from the amendments, this rule is being issued as interim final. Public comments on the interim final rule are invited and should be sent to the address or numbers listed in the ADDRESSES and FOR FURTHER INFORMATION CONTACT sections above. Comments received by April 5, 1999 will be considered in promulgating a final rule. Note: EDA is particularly interested in comments relating to its use of Plain Language in order to make these requirements more readily accessible to the public. Regulatory Flexibility Act Since notice and an opportunity for comment are not required to be given for the rule under 5 U.S.C. 553 or any other law, under sections 603(a) and 604(a) of the Regulatory Flexibility Act (5 U.S.C. 601-612) no initial or final Regulatory Flexibility Analysis is required, and none has been prepared. Paperwork Reduction Act This regulation imposes new information collection or recordkeeping requirements under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501), as amended, but has been cleared under OMB's Emergency Clearances process under OMB approval numbers: 0610-0093; 0610-0094; 0610-0095; 0610-0096 and will expire on July 31, 1999. To remain effective after such expiration date, EDA must receive OMB's final clearance and display a currently valid OMB control number. If such final clearance is not obtained after the expiration date of the Emergency Clearance so that a currently valid OMB control number is not displayed, applicants and recipients will not thereafter be required to submit information requested pursuant to this rule. The information is needed to determine eligibility of those applicants and projects and to monitor projects for compliance with EDA's construction or Revolving Loan Fund requirements, as applicable. EDA then uses information obtained in these collections to help carry out its mission to aid economically distressed areas of the Nation. Responses to requests for information are necessary under Pub. Law 105- 393 for obtaining and for keeping benefits. The reporting burden for this collection is estimated to be approximately 7 burden hours for the Proposal; approximately 50 burden hours for the Application; approximately 18 burden hours for Requirements for Approved Construction Projects; approximately 240 burden hours for the CED Strategy Guidelines; and approximately 76 burden hours for the series of Guidelines for the Revolving Loan program, including the time for gathering and maintaining the data needed for completing and reviewing the collection of information. Comments are invited on: (a) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Comments regarding these burden estimates or any other aspects of the collection of information, including suggestions for reducing the burdens, should be forwarded to Edward M. Levin, Chief Counsel, Economic Development Administration, U.S. Department of Commerce, Herbert C. Hoover Building, 1401 Constitution Avenue, NW, Room 7005, Washington, DC 20230 and to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503 (Attention EDA Desk Officer). Administrative Procedure Act and Regulatory Flexibility Act Executive Order 12612 (Federalism Assessment) This action has been reviewed in accordance with the principles and criteria contained in E.O. 12612. It has been determined that this interim final rule does not have significant Federalism implications to warrant a full Federalism Assessment under the principles and criteria contained in E.O. 12612. List of Subjects 13 CFR Part 300 Reporting and recordkeeping requirements; Non-profit organizations; American Indians. 13 CFR Part 301 Grant Programs; Community Development; American Indians. 13 CFR Part 302 Community Development; Grant programs-community development; Technical assistance. 13 CFR Part 303 Community Development; Grant programs-community development. 13 CFR Part 304 Selection and evaluation. 13 CFR Part 305 Community development; Community facilities; Grant programs- community development. 13 CFR Part 306 Community development; Grant programs-community development. 13 CFR Part 307 Business and industry; Community development; Community facilities; Grant programs-business; Grant programs-community development; Research; Technical Assistance. 13 CFR Part 308 Business and industry; Community development; Community facilities; Grant programs-business; Grant programs-community development; American Indians; Manpower training programs; Mortgages; Research; Technical assistance. [[Page 5352]] 13 CFR Part 314 Community development; Grant programs-community development. 13 CFR Part 315 Administrative practice and procedure; Community development; Grant programs-business; Technical assistance; Trade adjustment assistance. 13 CFR Part 316 Community development; Grant programs-community development; Freedom of Information; Uniform Relocation Act; Loan programs-business; Loan programs-community development; Environmental protection; Record retention; Records. 13 CFR Part 317 Civil rights; sex discrimination. 13 CFR Part 318 Colleges and universities. For the reasons set forth in the preamble, 13 CFR Chapter III is revised to read as follows: CHAPTER III--DEPARTMENT OF COMMERCE, ECONOMIC DEVELOPMENT ADMINISTRATION Part 300 General Information. 301 General Eligibility and Grant Rate Requirements. 302 Economic Development Districts; standards for designation, modification and termination. 303 Planning Process and Strategies for District and Other Planning Organizations Supported by EDA. 304 General Selection Process and Evaluation Criteria. 305 Grants for Public Works and Development Facilities. 306 Planning Assistance. 307 Local Technical Assistance, University Center Technical Assistance, National Technical Assistance, Training, Research, and Evaluation. 308 Requirements for Economic Adjustment Grants. 309-313 [Reserved]. 314 Property. 315 Certification and Adjustment Assistance for Firms. 316 General Requirements for Financial Assistance. 317 Civil Rights. 318 Evaluations of University Centers and Economic Development Districts. PART 300--GENERAL INFORMATION Sec. 300.1 Introduction and purpose. 300.2 Definitions. 300.3 OMB control numbers. 300.4 Economic Development Administration--Washington, DC, Regional and Economic Development Representatives. Authority: 42 U.S.C. 3211; Department of Commerce Organization Order 10-4. Sec. 300.1 Introduction and Purpose. (a) Introduction. Is your community suffering from severe economic distress (e.g., high unemployment, low income, sudden economic changes, etc.)? Are you a representative of a State or local unit of government, Indian tribe, public or private nonprofit organization, educational institution, or community development corporation looking for grant assistance to enhance your opportunities for economic development? If so, these regulations of the Economic Development Administration (EDA) of the U.S. Department of Commerce may be of help. These regulations tell you the purpose of EDA and outline the program requirements, project selection process, project evaluation criteria, and other relevant matters. The information in these regulations covers grant programs of EDA that provide financial awards for the following: Public Works and Development Facilities; Planning; Research, Evaluation, Training and Technical Assistance; Trade Adjustment Assistance; and Economic Adjustment Assistance. (b) What is the Purpose of the Economic Development Administration? (1) Many communities lag behind and suffer economic distress in one form or another, such as: High unemployment; Low income; Underemployment; Outmigration; Sudden economic changes due to the restructuring or relocation of industrial firms; Closing or realignment of defense bases or cutbacks in defense procurement; Economic impact of natural disasters or other emergencies; Actions of the Federal government (such as environmental requirements) that curtail or remove economic activities; and Impacts of foreign trade. (2) The purpose of the Economic Development Administration is to address economic problems affecting economically distressed rural and urban communities; by helping them: (i) Develop and strengthen their economic development planning and institutional capacity to design and implement business outreach and development programs; and (ii) Develop or expand public works and other facilities, financing tools, and resources that will create new job opportunities, save existing jobs, retain existing businesses, and support the development of new businesses. (3) To promote a strong and growing economy throughout the United States, EDA works in partnership with State and local governments, Indian tribes and local, regional, and State public and private nonprofit organizations. With them EDA develops and carries out comprehensive economic development strategies that address the economic problems of distressed communities. EDA helps such communities increase their economic development capacities so that they can take advantage of existing resources and development opportunities. Sec. 300.2 Definitions. Unless otherwise defined in other parts or sections of this Chapter, the terms listed are defined as follows: Comprehensive Economic Development Strategy, CED Strategy, or strategy means a strategy approved by EDA under Sec. 301.3 of these regulations. Department means the Department of Commerce. Economic Development District or district: (1) Means any area in the United States that has been designated by EDA as an Economic Development District under Sec. 302.1 of these regulations; and (2) Includes any Economic Development District designated by EDA under sec. 403 of the Public Works and Economic Development Act of 1965, as amended, as in effect on the day before the effective date of Public Law 105-393. EDA means the Economic Development Administration in the U.S. Department of Commerce when a place or agency is intended, and refers to the headquarters office in Washington, D.C., or a regional office, as appropriate; or it means the Assistant Secretary of Commerce for Economic Development or his/her designee when a person is intended. The locations of EDA's offices are listed each year in a Notice of Funding Availability (NOFA). The general information telephone number for EDA is (202) 482-2309. Eligible applicant means: (1) In general,-- (i) An entity qualified to be an eligible recipient, or (ii) Its authorized representative. (2) Except in the case of Research, Evaluation, Training, or Technical Assistance grants under part 307, a private individual or for-profit organization cannot be an eligible applicant. Eligible recipient means (1) In general,-- (i) An area described in Sec. 301.2 of these regulations; (ii) An Economic Development District; (iii) An Indian tribe or a consortium of Indian tribes; [[Page 5353]] (iv) A State; (v) A city or other political subdivision of a State or a consortium of political subdivisions; (vi) An institution of higher education or a consortium of institutions of higher education; or (vii) A public or private nonprofit organization or association acting in cooperation with officials of a political subdivision of a State. (2) In the case of Research, Evaluation, Training, and Technical Assistance grants under part 307, eligible recipient also includes private individuals and for-profit organizations. Federal agency means a department, agency, or instrumentality of the United States. Financial assistance means grant. Grant means the non-procurement award of EDA funds to an eligible recipient under PWEDA or the Trade Act, as applicable. The term includes a cooperative agreement, within the meaning of chapter 63 of title 31, United States Code. Indian tribe means any Indian tribe, band, nation, pueblo, or other organized group or community, including any Alaska Native Village or Regional Corporation (as defined in or established under the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.)), that is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians. The term includes: The governing body of a tribe, nonprofit Indian corporation (restricted to Indians), Indian authority, or other nonprofit tribal organization or entity, provided that the tribal organization or entity is wholly owned by, and established for the benefit of, the tribe or Alaska Native Village. Local share, matching share or local share match are used interchangeably to mean non-Federal funds or goods and services provided by recipients or third parties that are required as a condition of a grant, and includes funds from other Federal agencies only if there is statutory authority allowing such use. Notice of Funding Availability or NOFA, refers to the notice or notices EDA publishes each year in the Federal Register and on EDA's internet web site, http://www.doc.gov/eda, describing the available amounts, particular procedures, priorities, and special circumstances for the EDA grant programs for that year. OEDP (Overall Economic Development Program), as the term is used in part 317 (Civil Rights) of this chapter, means CED Strategy developed in accordance with part 303 of this chapter. PWEDA means the Public Works and Economic Development Act of 1965, as amended (Pub. L. 89-136, 42 U.S.C. 3121 et seq.), including the comprehensive amendments by the Economic Development Administration Reform Act of 1998 (Pub. L. 105-393). (The term ``PWEDA'' was used to refer to EDA's authorizing legislation as it was in effect before the effective date of Public Law 105-393, signed into law on November 13, 1998. In these regulations, the term ``PWEDA'' refers to the legislation as currently amended by the 1998 law.) Project means the activity or activities the purpose of which fulfills EDA program requirements and that EDA funds in whole or in part. Proposed District means a geographic entity composed of one or more eligible areas proposed for designation as an Economic Development District. Recipient and grantee are used interchangeably to mean an entity receiving funds from EDA under PWEDA or the Trade Act, as applicable, and includes any EDA approved successor to such recipient. State means a State, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau. The Trade Act means Title II, Chapters 3 and 5, of the Trade Act of 1974, as amended (19 U.S.C. 2341, et seq.). United States means all of the States. Sec. 300.3 OMB Control Numbers. (a) This table displays control numbers assigned to EDA's information collection requirements by the Office of Management and Budget (``OMB'') pursuant to the Paperwork Reduction Act of 1980, Pub. L. 96-511. EDA intends that this table comply with Section 3507(f) of the Paperwork Reduction Act, requiring agencies to display a current control number assigned by the Director of OMB for each agency information collection requirement. (b) Control Number Table: ------------------------------------------------------------------------ 13 CFR part or section where identified and described Current OMB control No. ------------------------------------------------------------------------ 301....................................... 0610-0094. 302....................................... 0610-0094. 303....................................... 0610-0093. 304....................................... 0610-0094. 305....................................... 0610-0094 and 0610-0096. 306....................................... 0610-0094. 307....................................... 0610-0094. 308....................................... 0610-0094 and 0610-0095. 314....................................... 0610-0094. 315....................................... 0610-0094. 316....................................... 0610-0094. ------------------------------------------------------------------------ Sec. 300.4 Economic Development Administration-Washington, D.C., Regional and Economic Development Representatives. For addresses and phone numbers of the Economic Development Administration in Washington, D.C., Regional and Field Offices and Economic Development Representatives, refer to EDA's annual Fiscal Year (FY) Notice of Funding Availability (NOFA). PART 301--GENERAL ELIGIBILITY AND GRANT RATE REQUIREMENTS Sec. 301.1 Applicants. 301.2 Area eligibility. 301.3 Strategy required. 301.4 Grant rates. Authority: 42 U.S.C. 3211; Department of Commerce Organization Order 10-4. Sec. 301.1 Applicants. (a) Eligible applicants are defined in Sec. 300.2 of this chapter. (b) Except as otherwise provided in part 307, a public or private nonprofit organization applicant must include in its application for assistance, a resolution passed by, or a letter signed by an authorized representative of, a political subdivision of a State or an Indian tribe, acknowledging that the applicant is acting in cooperation with officials of the political subdivision or Indian tribe, as applicable. Sec. 301.2 Area eligibility. (a) EDA awards public works and development facilities grants under part 305 and economic adjustment grants under part 308 for projects to enhance economic development in economically distressed areas. (b) An area is eligible for a project grant under part 305 or 308 if it has one of the following: (1) An unemployment rate that is, for the most recent 24-month period for which data are available, at least one percent greater than the national average unemployment rate. For example, if the national average unemployment rate is 6 percent, an area is eligible under this provision if it has an unemployment rate of 7 percent. (2) Per capita income that is, for the most recent period for which data are [[Page 5354]] available, 80 percent or less of the national average per capita income. (3) A special need, as determined by EDA, arising from actual or threatened severe unemployment or economic adjustment problems resulting from severe short-term or long-term changes in economic conditions, for example: (i) Substantial outmigration or population loss; (ii) Underemployment, that is, employment of workers at less than full time or at less skilled tasks than their training or abilities permit; (iii) Military base closures or realignments, defense contractor reductions-in-force, or Department of Energy defense-related funding reductions; (iv) Natural or other major disasters or emergencies; (v) Extraordinary depletion of natural resources; (vi) Closure or restructuring of industrial firms, essential to area economies; or (vii) Destructive impacts of foreign trade. (c) A non-distressed area [i.e., an area that does not meet the criteria of paragraph (b) of this section] within an Economic Development District is also eligible, provided the project will be of a substantial direct benefit to an area that meets at least one of the criteria of paragraph (b) of this section. A project provides substantial direct benefit if it provides significant employment opportunities for unemployed, underemployed or low income residents. (d) Normally an area is defined by geographical/political boundaries, e.g., city, county, Indian reservation. However, a smaller area (without regard to political boundaries) is also eligible even though it may be part of a larger community that overall is experiencing low distress. When the boundaries of the project area differ from established political boundaries, the project area must be of sufficient size appropriate to the proposed project, and the applicant must justify the proposed boundaries in relation to the project's benefits to the area. (e) Eligibility is determined at the time that EDA receives an application and is based on the most recent Federal data available for the area where the project will be located or where the substantial direct benefits will be received. If no Federal data are available to determine eligibility, an applicant must submit to EDA the most recent data available through the government of the State in which the area is located. (f) EDA may reject any documentation of eligibility that it determines is inaccurate. (g) There is no area eligibility requirement for a project grant under part 306 or 307. (h) EDA will describe special needs criteria under paragraph (b)(3) of this section in a NOFA. Sec. 301.3 Strategy Required. (a) To be eligible for a project grant under part 305 or 308, the application for assistance must include a CED Strategy acceptable to EDA. The applicant may, however, incorporate by reference a current strategy previously approved by EDA, as an alternative to including the strategy in the application. (Exception: A strategy is not required when a funding request is for planning assistance, i.e., a strategy grant, under part 308.) The strategy must: (1) Be the result of a continuing economic development planning process; (2) Identify the economic development problems to be addressed using the assistance; (3) Identify past, present, and projected future economic development investments in the area receiving the assistance; (4) Identify the public and private participants in the investments and the sources of the funding for them; (5) Describe how the problems identified under paragraph (a) (2) of this section will be addressed, in a manner that promotes economic development and opportunity, fosters effective transportation access, enhances and protects the environment, and balances resources through sound management of development; and (6) Describe how the activities described under paragraph (a) (5) of this section will contribute to the solution of the problems. (b) EDA will approve as acceptable a strategy that it determines meets the requirements of paragraph (a) of this section. The strategy may be one developed: (1) With EDA assistance, (2) Under another Federally supported program, or (3) Through a local, regional, or State process. (c) In determining acceptability of a strategy, EDA will take into consideration the circumstances of the application, so that for instance a strategy accompanying an application for assistance immediately following a natural disaster will require less depth and detail than would be the case in other circumstances. (d) To be acceptable, a strategy must be approved by the applicant's governing body within one year prior to the date of application. Sec. 301.4 Grant Rates. (a) Except as otherwise provided for in this chapter, the amount of the EDA grant may not exceed 50 percent of the cost of the project. Cash or in-kind contributions, fairly evaluated by EDA, including contributions of space, equipment, and services, may provide the non- Federal share of the project cost. In-kind contributions must be eligible project costs and meet applicable Federal cost principles and uniform administrative requirements. (b) EDA may supplement the Federal share of a grant project where the applicant is able to demonstrate that the non-Federal share that would otherwise be required cannot be provided because of the overall economic situation. It is not necessary for an applicant to prove that it would be impossible to provide a full 50 percent non-Federal share, but it must show circumstances warranting any reduction. In determining whether to provide a Federal share greater than 50 percent for a project, EDA will give due consideration to the applicant's economic situation and the relative needs of the area. In the case of Indian tribes, EDA may reduce or waive the non-Federal share, and in other cases EDA may reduce the non-Federal share of the cost of the project below 50 percent, in accordance with the following table, showing the maximum Federal grant rate, including the supplement: ------------------------------------------------------------------------ Maximum grant Projects rates (percentage) ------------------------------------------------------------------------ Projects of Indian tribes where EDA has made a determination to waive the non-Federal share of the cost of the project.................................... 100 Projects located in Federally-declared disaster areas for which EDA receives an application for assistance within one year of the date of declaration, and for which the President established a rate of Federal participation, based on the public assistance grant rate of the Federal Emergency Management Agency (FEMA) for the disaster, of greater than 80 percent........... 100 Projects of Indian tribes where EDA has made a determination to reduce the non-Federal share of the cost of the project.................................... (1) [[Page 5355]] Projects of States or political subdivisions of States that have exhausted their effective taxing and/or borrowing capacity, or nonprofit organizations that have exhausted their borrowing capacity................ (1) Projects located in Federally-declared disaster areas for which EDA receives an application for assistance within one year of the date of declaration, unless the applicant or the area is otherwise eligible for a higher rate of Federal participation under another provision of this section.............................. 80 Projects located in eligible areas where: (1) the 24- month unemployment rate is at least 11 percent and is at least 225% of the national average or (2) the per capita income (PCI) is not more than 50% of the national average....................................... 80 Projects located in eligible areas that are not eligible for a higher rate, where: (1) the 24-month unemployment rate is at least 9 percent and is at least 180% of the national average or (2) the PCI is not more than 60% of the national average................................... 70 Projects located in eligible areas that are not eligible for a higher rate, where: (1) the 24-month unemployment rate is at least 7.5 percent and is at least 150% of the national average or (2) the PCI is not more than 70% of the national average............................ 60 Projects in all other eligible areas.................... 50 ------------------------------------------------------------------------ \1\ Less than 100. (c) Projects under part 306 or 307 are eligible for maximum grant rates as provided in those parts. (d) Projects located in designated Economic Development Districts are eligible for an amount of additional Federal grant assistance not to exceed 10 percent of the estimated cost of the project, provided (1) The project applicant is actively participating in the economic development activities of the district; (2) The project is consistent with the strategy of the district; and (3) The non-Federal share of the project is not less than 20 percent. (e) EDA may make grants to supplement grants awarded in other Federal grant programs. (1) Supplemental grants under paragraph (e) of this section are only available for projects: (i) Under Federal grant programs that (A) Provide assistance in the construction or equipping of public works, public service, or development facilities, and (B) Are designated by EDA as eligible for supplemental EDA grants, and (ii) Are consistent with a strategy. (2) EDA's funds combined with funds from another Federal grant program may be at the maximum EDA grant rate, as set forth above, even if the other Federal program has a lower grant rate. If the other Federal program has a grant rate higher than the maximum EDA grant rate as set forth above, the combination of funds may exceed the EDA rate provided the EDA share does not exceed the EDA rate. (f) An applicant is eligible for the highest applicable maximum grant rate, as set forth above, in effect between the time EDA invites the application and the time the project is approved. The Federal share of a project receiving EDA grant assistance may be (and often is) less than the maximum grant rate for which the recipient is eligible. (g) EDA's NOFA will provide additional criteria to ensure that the level of economic distress of an area, rather than a preference for a geographic area or a specific type of economic distress, is the primary factor in allocating assistance. PART 302--ECONOMIC DEVELOPMENT DISTRICTS; STANDARDS FOR DESIGNATION, MODIFICATION AND TERMINATION Sec. 302.1 Designation of economic development districts. 302.2 Designation of nonfunded districts. 302.3 District organizations. 302.4 District organization functions and responsibilities. 302.5 Modification of district boundaries. 302.6 Termination and suspension of district designation. 302.7 Eligibility of non-distressed areas. Authority: 42 U.S.C. 3211; Department of Commerce Organization Order 10-4. Sec. 302.1 Designation of Economic Development Districts. EDA will designate a proposed district as an Economic Development District with the concurrence of the State or States in which the District will be wholly or partially located, when the proposed district meets the following requirements: (a) It is of sufficient size or population, and contains sufficient resources, to foster economic development on a scale involving more than a single eligible area; (b) It has an EDA approved strategy which: (1) Contains a specific program for intra-district cooperation, self-help, and public investment; (2) Is approved by each affected State; (3) Identifies problems, and conditions underlying economic distress in the district; and (4) Promotes economic development opportunities, plans for transportation access, enhancement and protection of the environment and balances resources through sound management of development; (c) It contains at least one area, eligible for assistance under Sec. 301.2, that has been identified in an approved strategy; (d) At least a majority of the counties, or other areas as determined by EDA, within the proposed district boundaries have submitted documentation of their commitment to support the economic development activities of the district; (e) A district organization has been established in the proposed district which meets the requirements of Sec. 302.4; and (f) The proposed district organization requests such designation. Sec. 302.2 Designation of nonfunded districts. The continuing designation of any Economic Development District is subject to the criteria and organization requirements of this part whether or not the Economic Development District organization receives any EDA financial assistance. Sec. 302.3 District organizations. (a) The district shall be organized in one of the following ways: (1) As a public organization through an intergovernmental agreement for the joint exercise of local government powers; or (2) As a public organization established under State enabling legislation for the creation of multi-jurisdictional area wide planning organizations; or (3) As a non-profit organization incorporated under the laws of the State in which it is located. (b) Each district organization must meet EDA requirements concerning membership composition [Sec. 302.3(c)], the maintenance of adequate staff support to perform its economic development functions [Sec. 302.3(d)], and its authorities and responsibilities for [[Page 5356]] carrying out economic development functions [Sec. 302.4]. Such requirements must also be met by the board of directors (or other governing body of the organization) as a whole. (c) The district organization shall demonstrate that its governing body meets all of the following requirements: (1) It is broadly representative of the principal economic interests of the district area including the interests of its minority and low-income populations; (2) There is at least a simple majority of its membership who are elected officials and/or employees of a general purpose unit of local government who have been appointed to represent the government; and (3) At least 20 percent of its membership who are private citizens, i.e., neither elected officials of a general purpose unit of local government nor employees of such a government who have been appointed to represent that government. (d) The district organization shall be assisted by a professional staff drawn from qualified persons in economic development, planning or related disciplines. EDA may provide planning grants to Economic Development Districts to employ professional staff in accordance with part 306 of this chapter. (e) The governing bodies of district organizations shall provide access for persons who are not members to make their views known concerning ongoing and proposed district activities in accordance with the following requirements: (1) The economic development district organization must hold meetings open to the public at least once a year and shall also publish the date and agenda of the meeting enough in advance to allow the public a reasonable time to prepare to participate effectively. (2) The district organization shall adopt a system of parliamentary procedures to assure that board members and others have access to and an effective opportunity to participate in the affairs of the district. (3) Information should be provided sufficiently in advance of public decisions to give the public adequate opportunity to review and react to proposals. District organizations should seek to relate technical data and other material to the public so they may understand the impact of public programs, available options and alternative decisions. Sec. 302.4 District organization functions and responsibilities. (a) All Economic Development District organizations are responsible for seeing that the following are provided on a continuing basis, consistent with the requirements of Sec. 302.3: (1) Organizational actions, including: (i) Arranging the legal form of organization which will be used; (ii) Arranging for the membership of the governing body to meet Sec. 302.3 requirements; (iii) Recruiting staff to carry out the economic development functions; (iv) Establishing a management system; (v) Contracting for services to carry out district functions; (vi) Establishing and directing activities of economic development subcommittees; and (vii) Submitting reports as determined by EDA to comply with civil rights requirements under part 317 of this chapter. (2) Actions to develop and maintain the required district strategy, and any subsequent supplements or revisions, including: (i) Preparing the analytic, strategic and implementation components of the strategy; (ii) Adopting the strategy by formal action of the Economic Development District governing board; (iii) Submitting the strategy, any supplements or revisions and annual reports for reviews by appropriate governmental bodies and interested organized groups, and attaching dissenting opinions and comments received; and (iv) Submitting to EDA an approvable strategy. (b) Organizations receiving EDA financial assistance for the development and implementation of Comprehensive Economic Development Strategies must also: (1) Coordinate and implement economic development activities in the district, including: (i) Assisting other eligible units within the district to apply for grant assistance for economic development purposes; (ii) Carrying out economic development related research, planning, implementation and advisory functions as are necessary to the development and implementation of the strategy; (2) Coordinate the development and implementation of the strategy with other local, State, Federal and private organizations (including minority organizations); (3) Carry out the annual strategy for implementation; and (4) Comply with the requirement of part 303. Sec. 302.5 Modification of district boundaries. EDA, at the request of a district and with concurrence of the State or States affected (unless such concurrence is waived by the Assistant Secretary), may modify the boundaries of a district, if it determines that such modification will contribute to a more effective program for economic development. Sec. 302.6 Termination and suspension of district designation. EDA may, upon 30 days prior written notice, terminate the designation status of an Economic Development District: (a) When the district no longer meets the standards for designation as set forth above; (b) When a district has not maintained a currently approved strategy in accordance with part 303 of this chapter; or (c) When a district has requested termination (with the approval of the State or States affected). Sec. 302.7 Eligibility of non-distressed areas. Areas in districts which are not themselves eligible for assistance under parts 305 or 308 may be eligible, as provided in Sec. 301.2(c). PART 303--PLANNING PROCESS AND STRATEGIES FOR DISTRICT AND OTHER PLANNING ORGANIZATIONS SUPPORTED BY EDA Sec. 303.1 Definitions, purpose and scope. 303.2 Planning process. 303.3 Requirements for a strategy. Authority: 42 U.S.C. 3211; Department of Commerce Organization Order 10-4. Sec. 303.1 Definitions, Purpose and Scope. (a) As used in this part 303. (1) Planning organization means an Economic Development District organization, Indian tribe, or other recipient of an EDA grant under part 306 which grant is awarded in whole or in part to develop, update, or replace a CED Strategy, and (2) Strategy committee means that committee or other entity identified by the planning organization as responsible for developing, updating, or replacing a strategy. (b) This part describes the planning process of and requirements for strategies developed and implemented by planning organizations supported by EDA. The requirements for a strategy in this part 303 exceed the requirements of Sec. 301.3. [[Page 5357]] Sec. 303.2 Planning Process. (a) The strategy committee must be inclusive and representative of the main economic interests of the area covered by the strategy. Such interests include public officials, community leaders, private individuals, business leaders, labor groups, minorities, and others who can contribute to and benefit from improved economic development in the area covered. (b) The planning organization must support the strategy committee with a staff skilled in economic planning or related fields. (c) The planning organization must conduct an initial and continuous study and analysis of the opportunities for economic development and of problems contributing to economic and related distress in the area covered, such as, for example, unemployment, underemployment, outmigration, or low per capita income, and possible solutions to such problems. (d) Planning organizations covered by this part 303 must submit an initial strategy to EDA in compliance with the requirements of Sec. 303.3, as determined by EDA. Each year thereafter, the planning organization must submit an annual strategy report, acceptable to EDA. (e) A new or revised strategy is required at least every five years, or sooner if EDA or the planning organization determines that the strategy is inadequate due to changed circumstances. Each strategy must be available for review and comment by appropriate government bodies and interest groups in the area covered. Strategies submitted by Districts require concurrence by the State or States in which they are located, prior to EDA approval. If EDA identifies any deficiencies, it will notify the organization in writing and provide the organization a reasonable opportunity to remedy such deficiencies. Sec. 303.3 Requirements for a strategy. A strategy must contain the following: (a) An analysis of economic and community development problems and opportunities including incorporation of any relevant material or suggestions from other government sponsored or supported plans; (b) Background and history of the economic development situation of the area covered, with a discussion of the economy, including geography, population, labor force, resources, and the environment; (c) A discussion of community participation in the planning efforts; (d) A section setting forth goals and objectives for taking advantage of the opportunities of and solving the economic development problems of the area serviced; (e) A plan of action, including suggested projects to implement objectives and goals set forth in the strategy; and (f) Performance measures that will be used to evaluate whether and to what extent goals and objectives have been or are being met. PART 304--GENERAL SELECTION PROCESS AND EVALUATION CRITERIA Sec. 304.1 Project proposal, application, selection and evaluation for programs under PWEDA. 304.2 How EDA evaluates proposals and applications for projects funded under PWEDA. Authority: 42 U.S.C. 3211; Department of Commerce Organization Order 10-4. Sec. 304.1 Project proposal, application, selection and evaluation for programs under PWEDA. (a) Local projects. Parties eligible as applicants who are interested in a public works, economic adjustment, planning, local technical assistance or university center project grant should contact the appropriate Economic Development Representative (EDR) (or EDA Regional or headquarters office), identified in the NOFA. The EDR or other EDA official is available to provide program information, including the current published NOFA; provide a proposal form approved by the U.S. Office of Management and Budget (OMB), and provide assistance as needed in filling out the proposal form. (1) After submission of the proposal to the appropriate EDR or Regional Office of EDA, the appropriate Regional Office Project Review Committee (PRC), consisting of at least three EDA officials, will review the proposal. The EDR or other appropriate EDA official will evaluate the proposal under Sec. 304.2, program specific sections of this rule, and the NOFA, if applicable, before submitting it to the EDA Regional Office for its review. (2) After review by the PRC, EDA will send a letter in a timely manner to each submitter advising either that: (i) EDA invites the submitter to prepare and present a formal application on a standard application form, with attachments for the type of grant being requested; or (ii) EDA returns the proposal because of specified deficiencies and suggests resubmission when the deficiencies are cured; or (iii) EDA denies the proposal for specifically stated reasons. (b) National Technical Assistance Research, Evaluation, or Training Projects. Parties eligible as applicants who are interested in a national technical assistance, research, evaluation, or training project under PWEDA, should make initial contact with EDA in Washington, D.C., at locations identified in the NOFA, for information and assistance concerning proposals and to obtain program information, including a copy of the current NOFA, and OMB approved proposal form. After submission of the proposal to the appropriate EDA Washington, D.C. office, generally, three or more technically knowledgeable EDA officials will review the proposal for relevance and quality. (1) If EDA determines that the proposal is acceptable under Sec. 304.2, program specific sections of this rule, and the NOFA, if applicable, EDA may by letter invite the submitter to provide an application with a more detailed and comprehensive project narrative. EDA expects that applications will generally be submitted within 30 days after receipt of an invitation letter. (2) If EDA determines that the proposal is not acceptable because of specified deficiencies, EDA will so notify the submitter in writing in a timely manner. (c) EDA expects that applications will generally be submitted within 30 days after receipt of an invitation letter. EDA's invitation to submit an application does not assure EDA funding. Sec. 304.2 How EDA evaluates proposals and applications for projects funded under PWEDA. (a) General proposal and application evaluation criteria for projects funded under PWEDA are as follows: EDA will screen all proposals/applications for: (1) Conformance to statutory and regulatory requirements, (2) The relative severity of the economic problem of the area, (3) The quality of the scope of work proposed to address the problem, (4) The merits of the activity(ies) for which funding is requested, and (5) The ability of the prospective applicant to carry out the proposed activity(ies) successfully. (b) EDA will also review applications for conformance with any additional program specific evaluation criteria as stated in applicable sections of these rules or the NOFA. (c) The NOFA may identify special areas of interest or priority consideration for the period of such NOFA. [[Page 5358]] PART 305--GRANTS FOR PUBLIC WORKS AND DEVELOPMENT FACILITIES Subpart A--General Sec. 305.1 Purpose and scope. 305.2 Criteria. 305.3 Application requirements. 305.4 Selection and evaluation. Subpart B--Other Requirements 305.5 Disbursements of funds for grants. 305.6 Final inspection. 305.7 Requirements for approved projects. Appendix A to Part 305--Requirements for Approved Construction Projects. Authority: 42 U.S.C. 3211; Department of Commerce Organization Order 10-4. Subpart A--General Sec. 305.1 Purpose and scope. The purpose of Public Works and Development Facilities grants is to help the Nation's distressed communities revitalize and expand their physical and economic infrastructure and thereby provide support for the creation or retention of jobs for area residents by helping eligible recipients with their efforts to promote the economic development of distressed areas. The primary focus is on the creation of new, or the retention of existing, long-term private sector job opportunities in communities experiencing significant economic distress as evidenced by high unemployment, low income, or a special need arising from actual or threatened severe unemployment or severe changes in local economic conditions. These grants are intended to help communities achieve sustainable economic development by developing and expanding new and existing public works and other infrastructure facilities that will help generate long-term jobs and economic growth, improve economic conditions or otherwise enhance and promote the economic recovery of the area. Sec. 305.2 Criteria. (a) A grant may be made under part 305 for the following purposes: (1) For the acquisition or development of land and improvements for use for a public works, public service or other type of development facility; or (2) For the acquisition, design and engineering, construction, rehabilitation, alteration, expansion, or improvement of such a facility, including related machinery and equipment. (b) A grant may be made under part 305 only when: (1) The project for which the grant is applied for will, directly or indirectly-- (i) Improve the opportunities, in the area where the project is or will be located, for the successful establishment or expansion of industrial or commercial plants or facilities; (ii) Assist in the creation of additional long-term employment opportunities in the area; or (iii) Primarily benefit the long-term unemployed and members of low-income families; (2) The project for which the grant is applied for will fulfill a pressing need of the area, or a part of the area, in which the project is or will be located; and (3) The area for which the project is to be carried out has a strategy and the project is consistent with the strategy. (c) Additional criteria, or priority consideration factors for assistance, may be set forth in a NOFA. (d) Maximum assistance for each State. Not more than 15 percent of the annual appropriations available to carry out this part may be expended in any one State. Sec. 305.3 Application requirements. Each application for a grant under part 305 must: (a) Include evidence of area and applicant eligibility; (b) Include, or incorporate by reference, a strategy, as provided in Sec. 301.3; (c) Identify the sources of the other funds, both eligible Federal and non-Federal, that will make up the balance of the proposed project's financing, including any private sources of financing. The application must show that such other funds are committed to the project and will be available as needed. The local share must not be encumbered in any way that would preclude its use consistent with the requirements of the grant; and (d) Explain how the proposed project meets the criteria of Sec. 305.2. Sec. 305.4 Selection and Evaluation. (a) Projects will be selected in accordance with the application evaluation criteria set forth in Sec. 304.2 of this chapter. (b) In addition to the evaluation criteria set forth in part 304 of this chapter, project selection and evaluation will be made on the basis of whether, and to what extent, the proposed project will: (1) Assist in creating new or retaining existing private sector jobs and assist in the creation of additional long-term employment opportunities rather than merely transferring jobs from one area of the country to another; (2) Be supported by significant private sector investment; (3) Leverage or be a catalyst for the effective use of private, local government, State or other Federal funding that is available; (4) Likely be started and completed in a timely fashion; and (5) If the project is located in an area with a stable economy and low distress, provide employment opportunities for residents of nearby areas of high distress. Subpart B--Other Requirements Sec. 305.5 Disbursements of funds for grants. (a) Disbursements of funds for construction grants are generally made on a reimbursable basis on request of the recipient for reimbursement. Disbursements may be made only: (1) After execution of all contracts required for the completion of the project. This condition may be waived by EDA if the grantee can demonstrate that enforcement of the condition would place an undue burden on it; (2) For itemized and certified eligible costs incurred, as substantiated by such documentary evidence as EDA may require; (3) On the basis of the work accomplished and the percentage of EDA participation, but in no event for more than the total sum stated in the financial assistance award accepted by the grantee; (4) Upon such evidence as EDA may require that grantee's proportionate share of funds is on deposit; (5) After a determination by EDA that all applicable terms and conditions of the grant have been met; and (6) After meeting such other requirements as EDA may establish in accordance with other Federal laws, rules and regulations. (b) Disbursements are generally made in installments, based upon grantee's actual rate of disbursement in accordance with the grant rate. (c) Advances of funds are allowable when disbursement on a reimbursable basis would impose an undue burden, as determined by EDA, upon the recipient. Sec. 305.6 Final inspection. A final inspection will be scheduled by the recipient and appropriate notification given to EDA, when the project has been completed and all deficiencies have been corrected. EDA personnel may attend and participate in the final inspection and, in any event, EDA must be advised of the outcome of such final inspection and the recipient's acceptance of the work. [[Page 5359]] Sec. 305.7 Requirements for Approved Projects. (a) The requirements for approved projects are set forth in this part and the EDA publication, Requirements for Approved Construction Projects, Appendix A to this part displayed at EDA's web site, http:// www.doc.gov/eda. A copy of this publication is available from EDA and a copy will be furnished to an award recipient with the Offer of Financial Assistance. (b) Financial, performance, and progress reports will be specified in the Special Award Conditions of the grant. Appendix A to Part 305--Requirements For Approved Construction Projects OMB Approval No. 0610-0096 Approval Expires 07/31/99 Burden Statement for REQUIREMENTS FOR APPROVED CONSTRUCTION PROJECTS INTERIM NINTH EDITION, OCTOBER 1998: Notwithstanding any other provision of the law, no person is required to respond to, nor shall any 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 information is required to obtain or retain benefits from the Economic Development Administration pursuant to Economic Development Administration Reform Act, Public Law 105-393. The reason for collecting this information is to enable the Economic Development Administration to monitor construction projects for compliance with Federal and other requirements. No confidentiality for the information submitted is promised or provided except that which is exempt under 5 U.S.C. 552(b)(4) as confidential business information. The public reporting burden for this collection is estimated to average 18 hours per response including the 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: Economic Development Administration, Herbert C. Hoover Building, Washington, DC, 20230, and to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503. Requirements for Approved Construction Projects Table of Contents Section I. General and Pre-Construction Requirements 1. Basis for Economic Development Administration Requirements A. Applicable OMB Circulars & Code of Federal Regulations B. Purpose of this publication C. Changes to policies and procedures D. Variances to these requirements 2. The EDA Grant Award A. Project description B. Standard terms and conditions C. Special conditions D. Grant expiration date E. EDA approved budget F. Performance measures 3. Initial Actions A. Initial EDA Regional Office actions B. Pre-award construction C. Davis-Bacon requirement for pre-award construction 4. Project Management Conference 5. Selection of the Architect/Engineer A. Pre-award selection of the A/E B. Acceptable forms of contracts 6. The Architect/Engineer Contract for Services A. Suggested forms for contract format B. Acceptable types of cost reimbursement for A/E services C. Prohibited forms of compensation D. Basic and special services E. Construction inspection F. A/E record keeping and access to records G. Required provisions of the A/E contract 7. Multiple Contracts and Phasing A. Project phasing B. Disbursement of the grant for phased projects 8. Recipient Furnished Equipment and/or Materials 9. Services Performed by the Recipient's Own Forces A. Use of in-house forces B. Use of force-account forces 10. Construction Management Services A. Definition of construction management services B. Cost threshold C. EDA approval for cost reimbursement D. Compensation E. Assigning responsibility 11. Certification of Acquisition of Land, Easements and Rights-of- Way A. Title, easements, rights-of-way, etc. B. Title opinions C. Amount and cost of land, etc. D. Changes in amount and cost of land E. Federally owned/controlled airfield restriction 12. Relocation Assistance 13. Certification of Adequacy of Treatment of sewage and other waste A. Certification of adequacy B. Exceptions C. Certification Requirements 14. Project Financing 15. Safeguarding Funds A. Documentation of project costs B. Use of minority banks C. Separate bank accounts D. Bonding of project fund custodian 16. Department of Commerce Metric Program 17. Seasonality 18. Design for the Handicapped A. Source of requirement B. Requirements for buildings C. Exceptions D. Waivers 19. Reporting of Project Progress A. Recipient review of project progress B. The project performance report C. Project performance report due dates D. Reporting non-routine performance items E. Project performance report format F. Grant advances G. Delinquent performance reports 20. Environmental Requirements A. Policy statement B. Applicable directives C. Hazardous substances requirements 21. Project Revisions Section II: Contracting for Project Construction 1. Contracting Standards A. State recipients B. Recipients other than states C. The contract administration system D. Standards of conduct E. State and local agreements F. Use of surplus property G. Value engineering H. Awards to responsible contractors I. Maintenance of records J. Use of time and material contracts K. Settlement of contractual issues L. Protest procedures 2. Competition in Procurement A. Full and open competition B. Prohibition of use of state or local geographical preferences C. Requirements for procurement actions D. Use of prequalification lists 3. Acceptable Methods of Procurement A. Small purchase procedures B. Procurement by sealed bids C. Requirements for sealed bids D. Procurement by competitive proposals E. Procurement by noncompetitive proposals 4. Unacceptable Method of Procurement 5. Contracting with Disadvantaged Firms A. Affirmative steps for use of disadvantaged firms 6. Contract Cost and Price Analysis A. The price analysis B. The profit line item C. Federal cost principles D. Prohibited methods of contracting 7. Advertising for Bids A. Frequency of advertisement for bids B. Requirements for projects over $1,000,000 C. Additional circulation of invitation for bids D. Thirty day limit 8. Bonding and Insurance Requirements A. Minimum bond amounts B. Insurance requirements 9. Bid Schedules for Alternative Materials A. Use of bid schedules B. Method of award C. Exceptions and deviations 10. Non-EDA Work A. Requirements for adding non-EDA work B. Restrictions on award of contract 11. EDA Review of Proposed Procurement Documents A. Procurement sytem certification B. EDA aproval of contract documents C. EDA prebid review D. EDA preaward review E. Use of standardized documents and checklists F. Proceeding at recipient's risk 12. Construction and Services Contract Provisions A. Required contract documents [[Page 5360]] B. Cost documentation C. Required contract provisions 13. Wage Rates A. Applicable act B. Wage rate coverage C. Different types of coverage D. Period of wage rate validity E. Application and exception for wage rates F. Exceptions for railroads and public utilities G. EDA or Department of Labor investigations H. Record retention I. Retroactivity of wage rates 14. The Bid Opening A. EDA representation at the bid opening 15. Overrun at Bid Opening A. When lowest bid exceeds funds available B. When lowest bid less deductive alternates exceeds funds available 16. Underrun at Bid Opening A. EDA notification 17. EDA Approval of the Contract Award A. EDA approval B. Requirements for EDA approval C. Checking debarred ineligible or suspended contractors 18. Executed Bid Award A. Contents of executed contract documents to be furnished to EDA 19. Preconstruction Conference Section III: Construction Procedures 1. Recipient Responsibilities A. Recipient responsibilities for project monitoring B. Recipient responsibilities for project documents 2. Employment of Local Labor A. Anticipated labor requirements B. Inclusion in contracts and subcontracts 3. Construction Progress Schedule A. Construction progress chart B. Monthly update C. Acceptable formats 4. Construction Sign A. Contractor responsibility B. Location of sign C. Local agency coordination D. Modification of sign specifications E. Bilingual signs 5. Inspection of Construction 6. Occupancy Prior to Completion A. Recipient responsibilities B. Role of EDA 7. Contractor Payrolls A. Payroll retention requirements B. Applicable Executive Order and form 8. Civil Rights Requirements 9. Contract Change Orders A. Notification to and approval from EDA B. Cost and price analysis C. Required copies D. Prohibited change of scope E. Change order requirements F. EDA approval G. Substantial variations 10. Inspection for Final Acceptance A. Final inspection B. Interested parties 11. Specific Requirements for Subcontractors 12. Safety Section IV: Financial Administration 1. Standards for Financial Management Systems A. Requirements for State recipients B. Requirements for other recipients C. EDA review 2. Grant Disbursements A. The reimbursement method B. Effect of program income C. Withholding payments D. Cash depositories E. Interest earned on advances 3. Allowable Costs A. Limitation on use of funds B. Applicable cost principles 4. Period of Availability of Funds A. General B. Liquidation of obligations 5. Matching or Cost Sharing A. Basic rule B. Qualification and exceptions C. Valuation of donated services D. Valuation of 3rd party donated supplies and loaned equipment or space E. Valuation of 3rd party donated equipment, buildings and land F. Valuation of Recipient donated real property for construction/acquisition G. Appraisal of real property 6. Program Income A. General B. Definition of program income C. Cost of generating program income D. Governmental revenues E. Royalties F. Sale of real property G. Use of program income H. Income after the award period 7. Non-Federal Audit Section V: Amendments to Grant Agreements 1. General Requirements A. Unforeseen problems B. Types of project amendments C. Change of scope determination 2. Changes to the Project Scope A. Definition of project scope B. Approval by EDA C. Types of project modifications D. EDA review of proposed modifications 3. Time Extensions A. Recipient responsibilities B. Suspension of disbursements C. EDA right to suspend or terminate the grant 4. Budget Line Item Revisions A. Requirements for approval by EDA B. Transfers between budget line items C. Transfer from contingencies line item D. Use of underrun funds E. Notification of budget line item changes 5. Additional EDA Funding A. Request for additional EDA funds B. Proceeding before EDA approval 6. Termination of the EDA Grant A. Termination for cause B. Termination for convenience Section VI: Project Closeout Procedures 1. Audit Requirements A. Securing Single Audit Act audit B. Specific audits C. Department of Commerce audits D. Audit standards 2. Closeout Procedures A. Beginning the closeout process B. Final grant reports C. Liquidation of obligations D. The final grant disbursement E. Eligible and ineligible costs F. After closeout requirements Section VII: Post Construction Grant Requirements 1. Real Property A. Grantee ownership B. EDA's reversionary interest C. Successor grantees D. Applicability of requirements 2. Definitions 3. Use of Property A. Use only for authorized purposes B. Property no longer needed for grant purpose C. Property for lease or sale D. Property substitutions 4. Unauthorized use A. Disposal without EDA approval B. EDA actions for disposal without approval 5. Federal Share A. Calculation of federal share B. Leasehold depreciation C. Transfer to another eligible grantee D. EDA interest after compensation 6. Encumbrances A. Restrictions on encumbrances B. Compensation for encumbrances C. Waivers D. Water and sewer exceptions 7. Civil Rights Restriction 8. Performance Reports 9. Record Retention 10. Program Income Earned After the Award Period Section VIII: Exhibits Section I--General and Pre-Construction Requirements 1. Basis for Economic Development Administration (EDA) Requirements A. These Requirements for Approved Projects apply to all awards for construction projects and they are based on Office of Management and Budget (OMB) administrative requirements for Federal grants as set forth in OMB Circulars and on regulations set forth in the Code of Federal Regulations (CFR) Section 13 Chapter III, Section 15 Part 24 and Section 15 Part 14 as they may be amended. B. These Requirements for Approved Projects are intended to organize and explain the various requirements that apply to Federally-assisted construction programs. They are not intended to derogate, replace, or negate the above cited Federal requirements. Conflicts between these Requirements for Approved Projects and the documents referred to above should be brought to the attention of EDA immediately. Any inconsistences or conflicts shall be resolved in favor of such Federal requirements. C. EDA, as a Federal agency, is obligated to promulgate policies and procedures applicable to Recipients of EDA grants to insure compliance with Federal requirements, to safeguard the public's interest in the grant assets, and to promote the effective use of grant funds in accomplishing the purpose for which they [[Page 5361]] were granted. Pursuant to this obligation, grant terms and conditions require Recipients to comply with changes in regulations and other requirements and policies EDA may issue from time to time. Such changes apply to actions taken by all Recipients of EDA grants, existing and prospective, after the effective date of the changes. D. EDA's policy is to administer grants uniformly, but it is understood that there may be situations warranting a variance. To accommodate these situations and to encourage innovative and creative ways to address economic development problems, requests for variances to the requirements of this Requirements for Approved Projects will be considered if they are consistent with the goals of EDA programs, make sound and financial sense, and do not conflict with applicable Federal and regulatory requirements. 2. The EDA Grant Award The EDA grant award contains mandatory requirements and information vital to the accomplishment of the project. It should be read carefully with particular attention paid to: A. The description of the project. This description and the corresponding scope of work must be adhered to. Proposed changes to EDA approved projects will be permitted by EDA only if they are necessary to the proper functioning of the project. Enhancements to the project that were not envisioned in the grant award will not be approved for EDA participation. B. The Standard Terms and Conditions for Title I Public Works and Development Facilities and Title IX Economic Adjustment Construction Projects. The Standard Terms and Conditions contain, by reference or substance, a summary of the pertinent statutes, regulations published in the Federal Register or Code of Federal Regulations, Executive Orders or OMB Circulars. C. The Special Conditions of the grant award. The Special Conditions generally contain two types of information. The first type relates specifically to the grant being awarded. The second type relates to all approved grants and are of recent origin and therefore have not yet been incorporated into the Standard Terms and Conditions. Special attention should be paid to the Project Development Time Schedule. The time schedule can only be extended as a result of a written request from the Recipient and a written approval by EDA. Failure to meet the time schedule is considered a violation of the grant award and may result in action by EDA to suspend and/or terminate the grant. No disbursement of EDA grant funds is permitted when a project has exceeded the time schedule in the grant award unless EDA has given written approval to a time schedule extension. D. Please note that, unless otherwise stated, EDA funds are available for a period beginning at the time the project is approved and ending five years after the end of the fiscal year in which the project was approved. Any funds not disbursed to the Recipient before the end of that period are automatically canceled and will be deobligated and will no longer be available for payment of costs incurred by the Recipient. E. Combination construction and nonconstruction grants. If the EDA grant award is for both construction and nonconstruction, the Recipient must obtain prior written approval from EDA before making any fund or budget transfer from nonconstruction to construction or vice versa. F. Performance Measures. The Standard Terms and Conditions of the EDA grant award make reference to ``Core Performance Measures'' that require post-construction reports to be submitted to EDA. The first report will be due at the completion of construction of the project. The due dates for the submission of the second and third reports are 3 years and six years after the completion of construction. Questions regarding the content or submission of these reports should be directed to EDA. 3. Initial Actions A. After the Grant Award has been affirmed, the EDA Regional Office will mail a pre-construction package to the Recipient that includes a copy of ``Requirements for Approved Projects'', and a list of items that need special attention (such as the project development time schedule), and a list of any unresolved problems identified during the preapproval review process. The EDA Project Manager will then contact the Recipient to offer assistance and guidance, to arrange for an updated schedule of the Recipient's proposed activities and to arrange a Project Management Conference. B. Because it is the policy of EDA to discourage the undertaking of any construction prior to the submission of an application for financial assistance, special consideration and judgment must be executed if it becomes necessary for a project to proceed prior to award of the EDA grant. Commencement of a project prior to approval of the application for assistance is not prohibited, but it may jeopardize the favorable consideration of such application since, among other things, it raises a rebuttable presumption that funds necessary for the accomplishment of the project are otherwise available and that proper contracting procedures and labor standards may not have been followed. C. If construction of the project was begun before affirmation of the grant award, the Recipient will be required to document to EDA's satisfaction that it has complied with all EDA requirements, including but not limited to the payment of Davis-Bacon wages from the start of construction and environmental requirements, in order to qualify for EDA reimbursement of costs incurred, if agreed to in the grant award. 4. Project Management Conference Whenever practical, the Project Management Conference will be held at the Recipient's location; however, if necessary and required for appropriate EDA personnel to be present, it may be held at another location including in the Regional Office. The Recipient's Authorized Representative, Architect/Engineer, attorney and possibly the Recipient's financial representative should be in attendance. Reasonable costs for transportation, meals and lodging for these individuals are an authorized cost under the administrative line item in the project budget. Per diem costs eligible for EDA reimbursement may not exceed the current Federal per diem rate. 5. Selection of the Architect/Engineer A. If an Architect/Engineer has been selected by the Recipient prior to EDA approval of the grant award and the contract between the Recipient and the Architect/Engineer has not been previously submitted to EDA, it should be submitted as soon after the grant award as possible. If the selection has not been made at the time of grant award the contract should be sent to the EDA Regional Office as soon as possible after its execution by both parties. B. For EDA to participate in the cost for architect/engineer services the Architect/Engineer must be selected competitively by sealed bids (formal advertising) or by competitive proposals. If the selection is made by competitive proposal the following requirements apply: (1) Requests for proposals shall be publicized and shall identify all evaluation factors and their relative importance. Any response to publicized requests for proposals shall be honored to the maximum extent practical; (2) Proposals will be solicited from an adequate number of qualified sources (normally sufficient to secure at least three proposals from qualified proposers); (3) The Recipient will have a method for conducting technical evaluations of proposals received and for selecting the best proposal, price and other factors considered; (4) The Recipient will determine the responsible firm whose proposal is most advantageous to the program, with price and other factors considered. Competitor's qualifications will be evaluated and the most qualified competitor will be selected, subject to negotiation of fair and reasonable compensation. 6. The Architect/Engineer Contract for Services A. The architect/engineer agreement shall provide for all services required by the Recipient for the planning, design and construction phase of the proposed project. Appropriate standards or guides developed by such professional organizations as the American Consulting Engineers Council (ACEC), American Society of Civil Engineers (ASCE), National Society of Professional Engineers (NSPE), and/or the American Institute of Architects (AIA) may be used where the Recipient does not have standard procurement documents. B. The Architect/Engineer's fee for basic services must be either a fixed price or a cost reimbursement with an agreed maximum to be eligible for EDA participation. The amount of EDA participation will be based on a determination, subject to audit, that the compensation is reasonable. C. The use of the cost-plus-a-percentage-of-cost and percentage of construction cost forms of compensation are specifically prohibited. [[Page 5362]] D. The Architect/Engineer's fee shall cover all services necessary for the successful execution of the project, including consultations, surveys, soil investigations, supervision, travel, ``as-built'' or record drawings, arrow diagram (CPM/PERT) where applicable, and incidental costs. The basic fee shall not exceed that prevailing for comparable services in the project area. If the total fee is in excess of the prevailing rate because of special services to be performed, these services shall be identified in the agreement. Such additional charges may be approved for grant participation by EDA if they: (1) Do not duplicate a charge for services provided for in the basic fee and are within the normal scope of the Architect/ Engineer's responsibilities; (2) Are a proper charge against the project cost; and (3) Are reasonable for the extra services to be rendered. E. Regardless of who furnishes the construction inspector, the Architect/Engineer shall be held responsible for making sufficient visits to the project site to determine, in general, if the work is proceeding in accordance with the construction contract. F. All negotiated Architect/Engineer contracts (except those of $100,000 or less awarded under small purchase procedures) awarded by Recipients shall include a provision to the effect that the Recipient, EDA, the Comptroller General of the United States, the Inspector General of the Department of Commerce, or any of their duly authorized representatives, shall have access to any documents, books, papers, and records of the Architect/Engineer (which are directly pertinent to a specific grant project) for the purpose of making an audit, examination, excerpts, and transcriptions. The Recipient shall require the Architect/Engineer to maintain all required records for at least three years after the Recipient makes final payment and all pending matters are closed. G. EDA requirements for the agreement for Architect/Engineer services are contained in Exhibit A-1 to these ``Requirements for Approved Projects''. 7. Multiple Contracts and Phasing A. The Recipient is strongly urged to award all contracts for the project construction at one time. Where compelling reasons justify phasing the project, the Recipient must secure the approval of EDA for phasing prior to advertising any portion for bid. The Recipient's request for approval of phasing must include: (1) Valid reasons justifying the request, and (2) A statement from the Recipient that it can, and will, fund any overrun that arises in the later phases. B. Normally EDA will not disburse funds until all construction contracts have been awarded (an exception is the development of a water source when required to determine the availability of an adequate source of water supply in terms of both quality and quantity as called for in the Grant Agreement). Disbursement of grant funds by phases must be approved by EDA. Such approvals will be given only if the Recipient can demonstrate that a severe hardship will result if such approval is not given and there are compelling reasons why all phases cannot be contracted for at the same time. The Recipient must be capable of meeting incurred costs prior to the first disbursement of EDA grant funds. 8. Recipient Furnished Equipment and/or Materials The Recipient may wish to incorporate into the project equipment and/or materials which it will secure through its own efforts. It is the responsibility of the Recipient to assure that such equipment and/or materials are adequate for the proposed use. The use of such equipment and materials must be approved by EDA to be eligible for EDA financial participation. The Recipient must be prepared to show that the cost claimed for such equipment and/or materials is competitive with local market costs. Acquisitions of Recipient furnished equipment and/or materials under this section is subject to the requirements of 15 CFR Part 24 or OMB Circular A-110 (or any DOC rule implementing such Circular, as applicable). The Recipient shall be required to submit with its request for approval either a paid invoice or current quotes from not less than three suppliers who normally distribute such equipment and/or materials. EDA may require that major equipment items be subject to a lien in favor of EDA and may also require a statement from the Recipient regarding expected useful life and salvage value. 9. Services Performed by the Recipient's Own Forces A. The Recipient may have a portion or all of the design, construction, inspection, legal services, or other work and/or services in connection with the project performed by personnel who are employed by the Recipient either full-time or part-time (in- house), subject to the following conditions: (1) EDA must review and approve the Recipient's plan if this method is to be elected by the Recipient. (2) Such work or services performed by in-house personnel may be considered an eligible cost for EDA reimbursement if in conformance with Office of Management and Budget Circulars A-87, A-21 or A-122, as appropriate. (3) If a portion of the architect/engineer services is to be performed by in-house forces, the Recipient will submit a statement listing the services to be so performed. This statement should accompany the architect/engineer agreement when it is submitted to EDA for approval. B. Due to the difficulty in monitoring force account construction and the limited EDA staff available to perform the monitoring, force account construction is strongly discouraged. The force account method of construction may be approved only if: (1) The Recipient has a special skill required for the construction, e.g., construction of unique Indian structures, or (2) Substantial cost savings can be demonstrated, or (3) The Regional Office is satisfied that the Recipient has made all reasonable efforts to obtain a contractor, but has failed to do so because of uncontrollable factors, such as the remoteness of the site combined with a small contract or an overabundance of construction work in the project area, or (4) It has been determined by EDA that special circumstances require its use to successfully complete the project. (5) EDA has available the publication, ``Guidelines for Force Account Projects'', which can be secured from the EDA Regional Office. This publication can be very helpful in ensuring that this type of project activity would be an eligible project cost. 10. Construction Management Services A. For the purposes of this document, Construction Management is defined as the services of a firm with competent and experienced staff to act as the Recipient's agent to perform all or part of the following: (1) Aid the project designer to find expedited or less costly methods of construction (Value Engineering). (2) Monitor the contracting process. This may vary in scope from giving advice to the Recipient to complete control of the contracting process. (3) Inspection or supervision of inspection of the construction work. (4) Controlling the expenditure of project funds on a multi- faceted or highly complex project. (5) Controlling unusual methods of contracting such as ``fast track'' or ``turn-key''. B. EDA will not normally approve the use of a Construction Management firm for projects costing less than $5 million. C. If the Recipient wishes to use a Construction Manager, EDA will participate in such costs only if EDA approves the proposed or actual contract for such services between the Recipient and the Construction Manager. D. The compensation for Construction Management services is subject to the same rules as those for architect/engineer services. E. The Construction Management Agreement must spell out who is responsible for construction inspection, approval of construction and supply contracts, change orders and other areas of possible conflicts (i.e., the division of responsibility and authority between the Recipient, the Architect/Engineer and the Construction Manager). 11. Certification of Acquisition of Land, Easements and Rights-of- Way A. As required in the Financial Assistance Award the Recipient must furnish evidence satisfactory to the EDA that it has good and merchantable title to the tracts or parcels of land on which buildings, structures, or other project improvements will be located, with any liens or encumbrances noted, and that it has obtained all necessary easements, permits, rights-of-way, franchises, condemnations, and all Federal, State and local approvals necessary to the completion of the project. B. To aid EDA in making its determination, the Recipient must furnish a description of the sites and rights-of-way on which the project will be located. Exhibit C of this [[Page 5363]] document is a ``Certificate as to Project Site, Rights-of-Way, and Easements,'' which is a format acceptable to EDA as evidence of the Recipient's title to the real property necessary for the project. The Recipient has the option to prepare the title opinion in a format that meets local law or custom. Any title opinion submitted must be approved by EDA. EDA may require additional documentation. C. If land acquisition is a part of the project, the EDA project file must be documented to show the basis for determining that the amount of land acquired and the cost of the land is reasonable. If an appraisal is required, a professional appraiser(s) should perform the service. An appraiser registered with a national society and/or licensed by the State will normally be required. D. Any significant change in the amount and cost of land from that upon which the project approval was based must be approved by EDA to be eligible for EDA reimbursement. E. No financial assistance under the Act will be approved for a project involving public or privately owned land adjacent to or in the vicinity of a federally owned or operated airfield, unless the Recipient can demonstrate that the proposed project is compatible with the airfield land use plan prepared for that facility. 12. Relocation Assistance The provisions of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (P.L. 91-646), as amended, are applicable to all States and political subdivisions of States and non-profits which are recipients of EDA funding assistance. This Act requires financial and other assistance to persons, businesses, or farm operations displaced from real property acquired for a project financed wholly or in part with Federal funds. It also requires compliance with specific guidelines pertaining to reimbursable costs incidental to such land acquisition. Recipients are required to comply fully with the intent of this Act. 13. Certification of Adequacy of Treatment of Sewage and Other Waste A. EDA will not provide financial assistance for projects involving sewer or other waste disposal facilities unless a State permit has been obtained by the Recipient in those States where EPA has delegated authority to the State to certify adequacy of treatment. In those States where EPA has not delegated such authority, a certificate of adequacy of treatment must be obtained from EPA in addition to a State permit. B. Certification of adequacy of treatment is not normally required under the following conditions: (1) For single service connections unless an unusual effluent is expected. (2) For replacement of portions of an existing sewer system where sewage flow resulting from the project is not increased. (3) For projects which will include only storm drainage as the component and the flow from the storm sewer is not introduced in the existing sanitary sewer system. C. If EPA certification is required, EDA will not authorize the advertising, bid opening nor a disbursement of grant funds until an unconditional certificate has been obtained. The EDA Project Manager will prepare all EDA requests to EPA for Certificates of Adequacy of Treatment for projects which involve sewage and/or storm drainage facilities. The certification should be obtained as early as practicable after acceptance of the project application by EDA. The Recipient must provide as much of the following information as is required to obtain the certification: (1) For sanitary sewer system. a. A general descriptive statement of the project explaining the problem to be eliminated and the proposed method of elimination. b. A vicinity map of the complete project area showing the location and size of all existing and proposed sanitary and storm sewer lines in plan view, the street system, topographical features, overflows and bypasses. c. Project design criteria, including the following data: (i) Industrial and domestic contribution. (Type of industrial contribution should be stated). (ii) Line and treatment facility sizing and design criteria used therefor. (iii) Population figures used. (iv) Number of existing and planned sewer connections. d. Design criteria to be used for the new treatment facilities. This should include the following data: (i) Type and extent of existing treatment. (ii) Industrial and domestic contribution. (Type of industrial contribution should be stated). (iii) Peak and average flow data. (iv) Component sizing and design criteria used therefor. e. For existing treatment facilities to be affected by the proposed project submit the design criteria, permit number and effluent limitations. f. If available, as-built drawings of existing treatment facilities showing the location, type, number and size of the treatment facilities. If as-built drawings are not available a single line drawing of the existing structures such as lift stations, manholes, pumping stations, etc., will be accepted. g. Agreements, if any, for treatment by other entities. (2) For projects involving only storm sewer facilities submit the following dated statement, signed by the Recipient's authorized representative; ``This proposed storm water sewer system will be constructed and operated so as to exclude the introduction of domestic sewage and industrial or agricultural waste and will not be connected in any way to a sanitary sewer system.'' (3) Upon receipt by EDA, the certification of adequacy of treatment will be reviewed to assure that the certification is unconditional. EDA will not accept a conditional certification (defined as an approval conditioned on the occurrence of a future event such as the future construction of a sewage treatment plant). 14. Project Financing Prior to obtaining EDA approval of the project's final plans and specifications, the Recipient should furnish evidence to the EDA Project Manager that the Recipient has its share of matching funds either on hand or firmly committed. Any change in the amount or availability of the Recipient's share must be made known to EDA at this time. This is equally true of the interim financing amount and availability. 15. Safeguarding Funds A. Checks drawn to pay project costs will be signed by the Authorized Representative of the Recipient and may be counter-signed by other representatives of the Recipient if he/she so designates. The Recipient shall retain all bank statements, deposit slips, canceled checks, and related invoices pertaining to these project costs to facilitate final audit. B. Consistent with the national goal of expanding the opportunities for minority business enterprises, Recipients are encouraged to use minority banks as the depository for project funds. C. Although a separate bank account is not required by EDA, the Recipient is urged to use one for the EDA project as it will be helpful to audit project costs claimed by the Recipient at project closeout. D. For non-governmental Recipients EDA requires that the Recipient furnish evidence that the custodian of the project funds is bonded in an amount not less than the amount of the EDA grant. If subject to 15 CFR Part 24, the Recipient must furnish assurances that the Recipient's financial management system meets the requirements of 15 CFR Part 24.20, Financial Administration, if this was not accomplished prior to approval of the grant award. 16. Department of Commerce Metric Program Section 5164 of the Omnibus Trade and Competitiveness Act of 1988 (P.L. 100-418) designates the metric system of measurement as the preferred system of weights and measures for U.S. trade and commerce. 17. Seasonality It is EDA policy to promote construction of projects continuously throughout the year. Recipients and their Architect/ Engineers are encouraged to design projects so that construction will not be unreasonably curtailed by weather. 18. Design for the Handicapped A. Any building or facility financed in whole or in part with assistance under the Act must be designed, constructed, or altered, so as to insure ready access to, and use of, such building or facility by the physically handicapped, as required by P.L. 90-480 (42 U.S.C. 4151-4156) and the regulations promulgated thereunder (41 CFR Subpart 101-19.6). B. Except as otherwise provided in paragraph C of this section, every building, except a residential structure, shall be designed, constructed, or altered in accordance with the minimum standards contained in the ``American National Standard Specifications for Making Buildings [[Page 5364]] and Facilities Accessible to, and Usable by, the Physically Handicapped,'' Number A 117.1 (1971) approved by and available from the American National Standards Institute, Inc., 1430 Broadway, New York, NY 10018. C. The standards established in paragraph (B) of this section shall not apply to: (1) The design, construction, or alteration of any portion of a building or facility which need not, because of its intended use, be made accessible to, or usable by, the public or by physically handicapped persons; (2) The alteration of an existing building if the alteration does not involve the installation of, or work on, existing stairs, doors, elevators, toilets, entrances, drinking fountains, floors, telephone locations, curbs, parking areas, or any other facilities susceptible of installations or improvements to accommodate the physically handicapped; (3) The alteration of an existing building or facility, or of such portions thereof, to which application of the standards is not structurally possible. D. The standards established in paragraph (B) of this section may be modified or waived on a case-by-case basis, provided that the Administrator of the General Services Administration determines that such waiver or modification is clearly necessary. 19. Reporting of Project Progress A. Recipients are required to constantly monitor project progress to assure that time schedules are being met, project work units by time periods are being accomplished, and other performance goals are being achieved. This review shall be made for each program, function, or activity as set forth in the approved grant application. B. The Recipient is required to submit a project performance report for each calendar quarter. The report will cover the following for each program, function, or activity involved: (1) A comparison of actual accomplishments to the timetable established in the Grant Award; (2) Reasons for delays in those cases where the time table approved by EDA was not met; (3) Any change to the purpose, nature, location, bona-fide need, neighborhood served, size, funding, or cost of the project; (4) All change orders issued up to the date of the report and not previously reported to EDA, and (5) Other pertinent information including, when appropriate, an analysis and explanation of and cost overruns or high unit costs. C. The project performance report will be due not later than January 15, April 15, July 15 and October 15 for the immediate previous quarter year. This requirement shall begin with the Recipient's acceptance of the EDA Grant Award and shall end when EDA approves the final grant disbursement. D. Between the required performance reporting dates, events may occur which have significant impact upon the project or program. In such cases, the Recipient will be required to inform EDA as soon as the following types of conditions become known: (1) Problems, delays, or adverse conditions which will materially affect the ability of the Recipient to attain program objectives, prevent the meeting of time schedules and goals, or preclude the attainment of project work by established time periods. This disclosure shall be accomplished by a statement of the action taken, or contemplated, and any Federal assistance needed to resolve the situation. (2) Favorable developments or events which enable meeting time schedules and goals sooner than anticipated or producing more work than originally projected; or (3) If any performance review conducted by the Recipient discloses the need for change in the budget estimates, the Recipient is required to submit a request for budget revision. E. A sample format for the required project performance report is included herein as Exhibit J. The report will be sent to the EDA Regional Office. The Recipient may use a format other than the EDA sample, provided that the information called for in this section is furnished. F. EDA does not normally permit grant advances. However, where EDA determines that grant advances are necessary and in the best interest of the Government and the Recipient, the Recipient will be required to submit with the project performance report a Report of Federal Cash Transactions. The EDA Regional Office shall furnish the required forms for this report. G. EDA will not process any requests for grant disbursement from Recipients with delinquent performance reports. 20. Environmental Requirements A. EDA is required by law to insure that proper environmental review of its actions take place; that there is a proper balance between the goals of economic development and environmental enhancement in its actions; and, that adverse environmental impacts from its actions are mitigated or avoided to the extent possible. B. Environmental assessments of EDA actions are conducted in accordance with the National Environmental Policy Act of 1969, as amended (NEPA) (42 U.S.C. 4321 et. seq.), the Environmental Quality Improvement Act (42 U.S.C. 4371 et. seq.), The Clean Air Act, as amended (42 U.S.C. 7401 et. seq.), the National Historic Preservation Act of 1966 (16 U.S.C. 470 et. seq.), The Wild and Scenic Rivers Act, as amended (16 U.S.C. 1271 et. seq.), the Flood Disaster Protection Act of 1973, as amended (42 U.S.C. 4002 et. seq.), the Federal Water Pollution Control Act, as amended (33 U.S.C. 1251 et. seq.), and the Council on Environmental Quality (CEQ) Regulations (40 CFR Section 1500-1508), as specified in EDA Directives 17.02-2, 17.02-7, and 17.04, as hereafter amended or superseded. Directives are available from any EDA office. C. EDA recipients are subject to Federal, state and local requirements concerning hazardous substances, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), Public Law 96-510 (1980), as amended by Public Law 99-499 (1986), 42 U.S.C. 9601-9675; and the Resource Conservation and Recovery Act (RCRA), Public Law 89-272 (1965), as amended by Public Law 94-580 (1976), Public Law 96-482 (1980) and Public Law 98-616 (1984), 42 U.S.C. 6901-6991. 21. Project Revisions After Recipient acceptance of the EDA grant award, any change to the project as described in the grant award must be reviewed and approved by EDA. To be eligible for EDA financial participation the proposed revision must meet certain conditions. See Section V of this document for guidelines on securing EDA approval of proposed project revisions. Section II--Contracting For Project Construction 1. Contracting Standards A. For States: If a State is the recipient of the EDA grant award, the State may follow the same policies and procedures it uses for procurements from its non-Federal funds provided that the State will ensure that every purchase order or other contract includes any clauses required by Federal statutes and Executive Orders and their implementing regulations. For reimbursable cost determinations, OMB Circular A-87 will be applicable. B. For Other than States: Recipients of EDA grants other than States may use their own procurement procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards contained in these ``Requirements for Approved Projects''. Recipients may request EDA to approve self-certification of their procurement system. Such self-certification shall not limit EDA's right to survey the system. The Recipient must cite specific procedures, regulations, standards, etc. as being in compliance with EDA and other Federal requirements and have its system available for review. In the absence of written procurement regulations issued by the Recipient which meet the following requirements, applicable federal procurement standards shall govern. C. Contract Administration System: Recipients will maintain a contract administration system which ensures that contractors perform in accordance with the terms, conditions and specifications of their contracts or purchase orders. D. Standards of Conduct: Recipients shall maintain a written code or standards of conduct which shall govern the performance of their officers, employees or agents engaged in the award and administration of contracts supported by Federal funds. No employee, officer or agent of the Recipient shall participate in selection, or in the award or administration of a contract supported by Federal funds if a conflict of interest, real or apparent, would be involved. Such a conflict would arise when any of the following has a financial or other interest in the firms elected for award: (1) an employee, officer or agent (2) any member of his/her immediate family (3) his or her partner (4) an organization which employs, or is about to employ, any of the above. The Recipient's officers, employees or agents shall neither solicit nor accept [[Page 5365]] gratuities, favors or anything of monetary value from contractors, potential contractors, or parties to subagreements except that Recipients may set minimum rules where the financial interest is not substantial or the gift is an unsolicited item of nominal intrinsic value. To the extent permitted by State or local law or regulations, such standards of conduct shall provide for penalties, sanctions, or other disciplinary actions for violations of such standards by the Recipient's officers, employees, or agent, or by contractors or their agents. E. State and Local Agreements: To foster greater economy and efficiency, Recipients are encouraged to enter into State and local intergovernmental agreements for procurement or use of common goods and services. F. Surplus Property: Recipients are encouraged to use Federal excess and surplus property in lieu of purchasing new equipment and property whenever such use is feasible and reduces project costs. G. Value Engineering: Recipients are encouraged to use value engineering clauses in contracts for construction projects of sufficient size to offer reasonable opportunities for cost reductions. EDA will not normally approve value engineering costs for construction contracts with estimated costs of less than $1,000,000. Value engineering is defined for the purposes of this paragraph as a systematic and creative analysis of each contract item or task to ensure that its essential function is provided at the overall lower cost. Value engineering, as a function, is done separately from the architect/engineer design by a person or firm not controlled by the architect/engineer. H. Awards to Responsible Contractors: Recipients will make awards only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance and financial and technical resources. I. Maintenance of Records: Recipients will maintain records sufficient to detail the significant history of each procurement affecting the EDA assisted project. These records will include, but are not necessarily limited to, the rationale for method of procurement, selection of contract type, contractor selection or rejection, and the basis for contract price. J. Time and Material Contracts: Recipients will use time and material type contracts only: (1) After a determination that no other type of contract is suitable, and (2) If the contract includes a ceiling price that the contractor exceeds at its own risk. K. Settlement of Issues: Recipients alone will be responsible, in accordance with good administrative practice and sound business judgment, for the settlement of all contractual and administrative issues arising out of procurements. These issues include, but are not limited to source evaluation, protests, disputes and claims. These standards do not relieve the Recipient of any contractual responsibilities under its contracts. EDA will not substitute its judgment for that of the Recipient unless the matter is primarily a Federal concern. Violations of law will be referred to the local, State, or Federal authority having proper jurisdiction. L. Protest Procedures: Recipients will have protest procedures to handle and resolve disputes relating to their procurements and shall in all instances disclose information regarding the protest to EDA. A protestor must exhaust all administrative remedies with the Recipient before pursuing a protest with EDA. Reviews of protests by EDA will be limited to: (1) Violations of Federal law or regulations (violations of State or local law will be under the jurisdiction of State or local authorities); and (2) Violations of the Recipient's protest procedures for failure to review a complaint or protest. Protests received by EDA other than those specified above will be referred to the Recipient for resolution. 2. Competition in Procurement A. All procurement transactions affecting the EDA project will be conducted in a manner providing full and open competition consistent with the standards contained herein. Some of the situations considered to be restrictive [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A99-1983. Public record. Not legal advice.