PART 1942 - ASSOCIATIONS

Subpart G - Rural Business Enterprise Grants and Television
Demonstration

Grants

## TABLE OF CONTENTS

[Sec]{.underline}. [Page]{.underline}

1942.301 Purpose. 1

1942.302 Policy. 1

1942.303 Authorities, delegation, and redelegation. 1

1942.304 Definitions. 1

1942.305 Eligibility and priority. 3

\(a\) Eligibility. 3

\(b\) Project selection process. 4

1942.306 Purposes of grants. 7

1942.307 Limitations on use of grant funds. 8

1942.308 Regional Commission grants. 9

1942.309 \[Reserved\] 9

1942.310 Other considerations. 9

\(a\) Civil rights compliance requirements. 9

\(b\) Environmental requirements. 10

\(c\) Excess capacity or transfer of employment. 11

\(d\) Management assistance. 13

\(e\) National Historic Preservation Act of 1966. 13

\(f\) Uniform Relocation and Real Property Acquisition

Policies Act. 13

\(g\) Floodplains and wetlands. 13

\(h\) Flood or mudslide hazard area precautions. 13

\(i\) Termination of Federal requirements. 13

1942.311 Application processing. 14

\(a\) Preapplications and applications. 14

\(b\) Review of decision. 14

1942.312 \[Reserved\] 14

1942.313 Plan to provide financial assistance to third parties. 14

1942.314 Grants to provide financial assistance to third parties,

television demonstration projects, and technical

assistance programs. 15

(08-20-92) SPECIAL PN

RD Instruction 1942-G

Table of Contents

Page 2

[Sec]{.underline}. [Page]{.underline}

1942.315 Docket preparation and Letter of Conditions. 16

1942.316 Grant approval, fund obligation, and third party

financial assistance. 17

\(a\) Grant approval. 17

\(b\) Fund obligation and approval announcement. 17

\(c\) Third party financial assistance. 17

1942.317 - 1942.347 \[Reserved\] 17

1942.348 Exception authority. 17

1942.349 Forms, guides, and attachments. 17

1942.350 OMB control number. 18

Attachments:

Guide 1 - Project Management Agreement Between the
[\_\_\_\_\_\_\_\_]{.underline} Regional

Commission and the Rural Development, Department of Agriculture
pertaining to [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}
County
[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}\_\_.

Guide 2 - Resolution

Attachment 1 - General Requirements for Administration of Rural Business
Enterprise and Television Demonstration Grants.

## oOo 

RD Instruction 1942-G

PART 1942 - ASSOCIATIONS

Subpart G - Rural Business Enterprise Grants and Television
Demonstration

Grants

§ 1942.301 [Purpose]{.underline}.

This subpart outlines Rural Development policies and authorizations and
sets forth procedures for making grants to finance and facilitate
development of private business enterprises. Any processing or servicing
activity conducted pursuant to this subpart involving authorized
assistance to Rural Development employees, members of their families,
known close relatives, or business or close personal associates, is
subject to the provisions of Subpart D of Part 1900 of this chapter.
Applicants for this assistance are required to identify any known
relationship or association with a Rural Development employee. (Revised
02-04-93, SPECIAL PN.)

§ 1942.302 [Policy]{.underline}.

\(a\) The grant program will be used to support the development of small
and emerging private business enterprises in rural areas.

\(b\) Rural Development officials will maintain liaison with officials
of other Federal, State, regional, and local development agencies to
coordinate related programs to achieve rural development objectives.

\(c\) Rural Development officials shall cooperate with appropriate State
agencies in making grants that support State strategies for rural area
development.

\(d\) Funds allocated for use in accordance with this subpart are also
to be considered for use of Indian tribes within the State regardless of
whether State development strategies include Indian reservations within
the State\'s boundaries. Indians residing on such reservations must have
equal opportunity along with other rural residents to participate in the
benefits of these programs. This includes equal application of outreach
activities of Rural Development Area and Local Offices.

§ 1942.303 [Authorities, delegation, and redelegation]{.underline}.

The State Director is responsible for implementing the authorities
contained in this subpart and to issue State supplements redelegating
these authorities to appropriate Rural Development employees. Grant
approval authorities are contained in Subpart A of Part 1901 of this
chapter.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Distribution: WSDC Loan and Grant Making

Associations

## 

## 1

## (Revision 3)

(08-20-92) SPECIAL PN

RD Instruction 1942-G

§ 1942.304 [Definitions]{.underline}.

[Project]{.underline}. For rural business enterprise grants, the result
of the use of program funds, i.e., a facility whether constructed by the
applicant or a third party from a loan made with grant funds, technical
assistance, startup operating costs, or working capital. A revolving
fund established in whole or in part with grant funds will also be
considered a project for the purpose of Intergovernmental and
Environmental Review under § 1942.310 (b) and (c), of this subpart as
well as the specific uses of the revolving funds. For television
demonstration grants, television programming developed on issues of
importance to farmers and rural residents.

[Regional Commission grants]{.underline}. Grants made from funds made
available to Rural Development by the Appalachian Regional Commission
(ARC) or other Federal Regional Commissions designated under Title V of
the Public Works and Economic Development Act of 1965.

[Rural and Rural Area]{.underline}. Any area other than a city or town
that has a population of greater than 50,000 inhabitants and the
urbanized area contiguous and adjacent to such a city or town according
to the latest decennial census of the United States. (Revised 12-20-02,
SPECIAL PN.)

[Rural Business Enterprise (RBE) grants]{.underline}. Grants made to
finance and facilitate development of small and emerging private
business enterprises in rural areas. Grants are made from Rural
Development funds under authority of the Consolidated Farm and Rural
Development Act, as amended, Sec. 310B(c) (7 U.S.C. 1932).

[Small and emerging private business enterprise]{.underline}. Any
private business which will employ 50 or fewer new employees and has
less than \$1 million in projected gross revenues. (Revised 05-16-01,
SPECIAL PN.)

[Technical Assistance]{.underline}. A function performed for the benefit
of a private business enterprise and which is a problem solving
activity, such as market research, product and/or service improvement,
feasibility study, etc.

[Television demonstration program]{.underline}. Grants made for
television programming developed to demonstrate the effectiveness of
providing information on agriculture and other issues of importance to
farmers and other rural residents. Grants are made from Rural
Development funds under authority of the Consolidated Farm and Rural
Development Act, as amended, Sec. 310B(j) (7 U.S.C. 1932).

## 2

## (Revision 3) 

RD Instruction 1942-G

§ 1942.305 [Eligibility and priority]{.underline}.

\(a\) [Eligibility]{.underline}.

\(1\) RBE grants may be made to public bodies and private nonprofit
corporations serving rural areas. Public bodies include States,
counties, cities, townships, and incorporated town and villages,
boroughs, authorities, districts, and Indian tribes on Federal and State
reservations and other Federally recognized Indian Tribal groups in
rural areas. (Revised 12-20-02, SPECIAL PN.)

\(2\) The end result of the project must finance or develop a small and
emerging private business enterprise. The small business receiving
assistance must meet the definition contained in\
§ 1942.304. However, if the small and emerging private business
enterprise is an eligible nonprofit entity or other tax-exempt
organization located in a city, town or unincorporated area with a
population of 5,000 or less and has a principal office on land of an
existing or former Native American reservation, the small and emerging
private business enterprise is exempt from meeting the definition
contained in § 1942.304. (Added 12-20-02, SPECIAL PN.)

## 3

## (Revision 1)

(08-20-92) SPECIAL PN

RD Instruction 1942-G

§ 1942.305(a) (Con.)

\(3\) Regional Commission Grant applicants must meet eligibility
requirements of the Regional Commission and also of the Agency, in
accordance with paragraph (a)(1) of this section, for the Agency to
administer the Regional Commission Grant under this subpart. (Renumbered
12-20-02, SPECIAL PN.)

\(4\) Television demonstration grants may be made to statewide, private,
nonprofit, public television systems whose coverage is predominantly
rural. An eligible applicant must be organized as a private, nonprofit,
public television system, licensed by the Federal Communications
Commission, and operated statewide and within a coverage area that is
predominantly rural. (Renumbered 12-20-02, SPECIAL PN.)

\(b\) [Project selection process]{.underline}. The following paragraphs
indicate items and conditions which must be considered in selecting RBE
applications for further development. When ranking eligible RBE
applications for consideration for limited funds, Agency officials must
consider the priority items met by each RBE application and the degree
to which those priorities are met, and apply good judgment. Due to the
small number of applicants eligible for television demonstration grants,
such applicants will not compete for priority points against RBE
applicants.

\(1\) [Applications]{.underline}. The application and supporting
information submitted with it will be considered in determining the
proposed project\'s priority for available funds.

\(2\) [State Office review]{.underline}. All applications will be
reviewed and scored for funding priority. Eligible applicants that
cannot be funded should be advised by the State Director that funds are
not available, and requested to advise whether they wish to have their
application maintained in an active file for future consideration.

\(3\) [Selection priorities]{.underline}. The priorities described below
will be used by the State Director to rate applications. Points will be
distributed as indicated in paragraphs (b)(3)(i) through (v) of this
section. A copy of the score sheet should be placed in the case file for
future reference.

## 4

## (Revision 1) 

RD Instruction 1942-G

§ 1942.305(b)(3) (Con.)

\(i\) [Population]{.underline}. Proposed project(s) will primarily be
located in a community of (1) between 15,000 and 25,000 population - 5
points, (2) between 5,000 and 15,000 population - 10 points, (3) under
5,000 population - 15 points.

\(ii\) [Economic conditions]{.underline}.

\(A\) Proposed project(s) will primarily be located in areas where the
unemployment rate exceeds the State rate by 25 percent or more - 20
points; exceeds the State rate by less than 25 percent - 10 points; is
equal to or less than State rate - 0 points.

\(B\) Proposed project(s) will primarily be located in areas where
Median Household Income (MHI) as prescribed by Section 673 (2) of the
Community Services Block Grant Act (42 U.S.C 9902 (2)) for a family of 4
for the State is: less than poverty line - 25 points; more than poverty
line but less than 85 percent of State MHI - 15 points; between 85
percent and 100 percent of State MHI - 10 points; equal or greater than
State MHI - 0 points.

\(iii\) [Experience]{.underline}. Applicant has evidence of at least 5
years of successful experience in the type of activity proposed in the
application for funds under this subpart. Evidence of successful
experience may be (1) a description of experience supplied and certified
by the applicant, or (2) a letter of support from appropriate local
elected officials explaining the applicant\'s experience. Experience -
10 points.

\(iv\) [Other]{.underline}.

\(A\) Applicant has evidence that small business development will occur
by startup or expansion as a result of the activities to be carried out
under the grant. Written evidence of commitment by small business must
be provided to Rural Development - 25 points.

## 5

## (Revision 1)

(08-20-92) SPECIAL PN

RD Instruction 1942-G

§ 1942.305(b)(3)(iv) (Con.)

\(B\) Applicant has evidence of substantial commitment of funds from
nonfederal sources for proposed project. An authorized representative of
the source organization of the nonfederal funds must provide evidence
that the funds are available and will be used for the proposed project.
More than 50 percent of the project costs from nonfederal sources - 15
points; more than 25 percent, but less than 50 percent, of project costs
from nonfederal sources - 10 points; between 5 percent and 25 percent of
project costs from nonfederal sources - 5 points.

\(C\) For a grant to establish a revolving fund, the applicant provides
evidence to the Agency through loan applications or letters from
businesses that the loans are needed by small and emerging businesses in
the proposed project area - 25 points.

\(D\) The anticipated development, expansion, or furtherance of business
enterprises as a result of the proposed project will create and/or save
jobs associated with the affected businesses. The number of jobs must be
evidenced by a written commitment from the business to be assisted. One
job per each \$10,000 or less in grant funds expended - 10 points. One
job per each \$25,000 to \$10,000 in grant funds expended - 5 points.

\(E\) The proposed grant project is consistent with, and does not
duplicate, economic development activities for the project area under an
existing community or economic development plan covering the project
area. If no local plan is in existence for the project area, an areawide
plan may be used. The plan used must be adopted by the appropriate
governmental officials/entities as the area\'s community or economic
development plan. Appropriate plan references and copies of appropriate
sections of the plan, as well as evidence of plan adoption by
appropriate governmental officials, should be provided to the Agency.
Project is reflected in a plan - 5 points.

\(F\) Grant projects utilizing funds available under this subpart of
less than \$100,000 - 25 points, \$100,000 to \$200,000 - 15 points,
more than \$200,000 but not more than \$500,000 - 10 points.

\(G\) The project will assist a small and emerging private business
enterprise as described in §1942.305 (a) (2) of this subpart -- 10
points. (Added 12-20-02, SPECIAL PN.)

## 6

## (Revision 1) 

§ 1942.305 (b)(3) (Con.) RD Instruction 1942-G

\(v\) [Discretionary]{.underline}. In certain cases, when a grant is an
initial grant for funding under this subpart and is not more than
\$500,000, Rural Development may assign up to 50 points in addition to
those that may be assigned in paragraphs (b)(3)(i) through (iv) of this
section. Use of these points must include a written justification, such
as geographic distribution of funds, criteria which will result in
substantial employment improvement, mitigation of economic distress of a
community through the creation or saving of jobs, or emergency
situations. For grants of less than \$100,000 - 50 points; \$100,000 to
\$200,000 - 30 points; more than \$200,000, but not more than
\$500,000 - 20 points.

§ 1943.306 [Purposes of grants]{.underline}.

\(a\) Grant funds may be used to finance and/or develop small and
emerging private business enterprises in rural areas including, but not
limited to, the following:

\(1\) Acquisition and development of land, easements, and rights-of-way.

\(2\) Construction, conversion, enlargement, repairs or modernization of
buildings, plants, machinery, equipment, access streets and roads,
parking areas, utilities, and pollution control and abatement
facilities.

\(3\) Loans for startup operating cost and working capital.

\(4\) Technical assistance for private business enterprises.

\(5\) Reasonable fees and charges for professional services necessary
for the planning and development of the project including packaging.
Services must be provided by individuals licensed in accordance with
appropriate State accreditation associations.

\(6\) Refinancing of debts exclusive of interest incurred by or on
behalf of an association before an application for a grant when all of
the following exist:

\(i\) The debts were incurred for the facility or part thereof or
service to be installed or improved with the grant, and

\(ii\) Arrangements cannot be made with the creditors to extend or
modify the terms of the existing debt.

\(7\) Providing financial assistance to third parties through a loan.

## 7

## (Revision 1)

(08-20-92) SPECIAL PN

RD Instruction 1942-G

§ 1942.306 (a) (Con.)

\(8\) Training, when necessary, in connection with technical assistance.

\(9\) Production of television programs to provide information on issues
of importance to farmers and rural residents.

\(10\) Create, expand, and operate rural distance learning networks or
rural learning programs that provide educational instruction or job
training instruction related to potential employment or job advancement
for adult students. (Added 05-23-94, SPECIAL PN.)

\(b\) Grants, except grants for television demonstration programs, may
be made only when there is a reasonable prospect that they will result
in development of small and emerging private business enterprises.

\(c\) Rural Development grant funds may be used jointly with funds
furnished by the grantee or from other sources including Rural
Development loan funds. Pursuant to P.L. 95-334, other departments,
agencies, and executive establishments of the Federal Government may
participate and provide financial and technical assistance jointly with
Rural Development. The amount of participation by the other department,
agency, or executive establishment shall only be limited by its
authorities other than authorities which impose restrictions on joint
financing.

§ 1942.307 [Limitations on use of grant funds]{.underline}.

\(a\) Funds will not be used:

\(1\) To produce agriculture products through growing, cultivation, and
harvesting either directly or through horizontally integrated livestock
operations except for commercial nurseries, timber operations, or
limited agricultural production related to technical assistance
projects.

\(2\) To finance comprehensive areawide type planning. This does not
preclude the use of grant funds for planning for a given project.

\(3\) For loans by grantees when the rates, terms, and charges for those
loans are not reasonable or would be for purposes not eligible under §
1942.306 of this subpart.

\(4\) For programs operated by cable television systems.

\(5\) To fund a part of a project which is dependent on other funding
unless there is a firm commitment of the other funding to ensure
completion of the project.

## 8

## (Revision 1) 

§1942.307 (a) (Con.) RD Instruction 1942-G

\(6\) To pay for technical assistance as defined in this subpart which
duplicates assistance provided to implement an action plan funded by the
Forest Service (FS) under the National Forest-Dependent Rural
Communities Economic Diversification Act for\
5 continuous years from the date of grant approval by the FS. To avoid
duplicate assistance, the grantee shall coordinate with FS and Rural
Business and Cooperative Development Service (RBCDS) to ascertain if a
grant has been made in a substantially similar geographical or defined
local area in a State for technical assistance under the above program.
The grantee will provide documentation to FS and RBCDS regarding the
contact with each agency. Under its program, the FS assists rural
communities dependent upon national forest resources by establishing
rural forestry and economic diversification action teams which prepare
action plans. Action plans are intended to provide opportunities to
promote economic diversification and enhance local economies dependent
upon national forest resources. (Added 10-11-95, PN 252.)

\(b\) At least 51 percent of the outstanding interest in the project has
membership or is owned by those who are either citizens of the United
States or reside in the United States after being legally admitted for
permanent residence.

## 8A

## (Revision 1)

(08-20-92) SPECIAL PN

RD Instruction 1942-G

§ 1942.308 [Regional Commission grants]{.underline}.

\(a\) Grants are sometimes made by Federal Regional Commissions for
projects eligible for Agency assistance. Agency has agreed to administer
such funds in accordance with Agency regulations and the requirements of
the Commission.

\(b\) The transfer of funds from a Regional Commission to Agency will be
based on specific applications determined to be eligible for an
authorized purpose in accordance with the requirements of Agency and the
Regional Commission.

\(c\) ARC is authorized under the Appalachian Regional Development Act
of 1965, as amended, to serve the Appalachian region. ARC grants are
handled in accordance with the ARC Agreement which applies to all ARC
grants administered by the Agency. Therefore, a separate Project
Management Agreement between Agency and ARC is not needed for each ARC
grant. (Revised 06-19-97, SPECIAL PN.)

\(d\) Other Federal Regional Commissions are those authorized under
Title V of the Public Works and Economic Development Act of 1965. Grants
by these commissions are handled in accordance with a separate Project
Management Agreement between the respective Regional Commission and
Agency for each Commission grant administered by Agency (Guide 1 of this
subpart). The agreement should be prepared by the Rural Development
State Director and the appropriate Commission official when the State
Director receives a notice from the Commission of the amount of the
grant to be made.

§ 1942.309 \[Reserved\]

§ 1942.310 [Other considerations]{.underline}.

\(a\) [Civil Rights compliance requirements]{.underline}. All grants
made under this subpart are subject to the requirements of Title VI of
the Civil Rights Act of 1964, which prohibits discrimination on the
basis of race, color, and national origin as outlined in Subpart E of
Part 1901 of this chapter. In addition, the grants made under this
subpart are subject to the requirements of section 504 of the
Rehabilitation Act of 1973, which prohibits discrimination on the basis
of handicap, the requirements of the Age Discrimination Act of 1975,
which prohibits discrimination on the basis of age, and Title III of the
Americans with Disabilities Act, Pub. L. 101-336, which prohibits
discrimination on the basis of disability by private entities in places
of public accommodations. When Agency is administering a Federal
Regional Commission grant and no Agency RBE/television demonstration
grant funds are involved, the

## 9

## (Revision 1)

(08-20-92) SPECIAL PN

RD Instruction 1942-G

§ 1942.310 (a) (Con.)

Federal Regional Commission may make its own determination of compliance
with the above Acts, unless Agency is designated compliance review
responsibilities. Agency shall in all cases be made aware of any
findings of discrimination or noncompliance with the requirements of the
above Acts.

\(b\) [Environmental requirements]{.underline}.

\(1\) [General applicability]{.underline}. Unless specifically modified
by this section, the requirements of Subpart G of Part 1940 of this
chapter apply to this subpart. Agency will give particular emphasis to
ensuring compliance with the environmental policies contained in §§
1940.303 and 1940.304 in Subpart G of Part 1940 of this chapter.
Although the purpose of the grant program established by this subpart is
to improve business, industry, and employment in rural areas, this
purpose is to be achieved, to the extent practicable, without adversely
affecting important environmental resources of rural areas such as
important farmland and forestlands, prime rangelands, wetland and
floodplains. Prospective recipients of grants, therefore, must consider
the potential environmental impacts of their applications at the
earliest planning stages and develop plans, grants, and projects that
minimize the potential to adversely impact the environment.

\(2\) [Technical assistance]{.underline}. The application for a
technical assistance project is generally excluded from Agency\'s
environmental review process by §1940.310(e)(1) of subpart G of part
1940 of this chapter. However, as further specified in §1940.333 of
subpart G of part 1940 of this chapter, the grantee for a technical
assistance grant, in the process of providing technical assistance, must
consider the potential environmental impacts of the recommendations
provided to the recipient of the technical assistance.

\(3\) [Applications for direct construction project]{.underline}. The
application by a potential grantee who intends to directly use grant
funds for a nontechnical assistance project, such as a construction
project, shall be reviewed and processed under the applicable
requirements of Subpart G of Part 1940 of this chapter.

## 10

## (Revision 1) 

RD Instruction 1942-G

§ 1942.310(b) (Con.)

\(4\) [Applications for grants to provide financial assistance to third
party recipients]{.underline}. As part of the preapplication, the
applicant must provide a complete Form RD 1940-20, \"Request for
Environmental Information,\" for each project specifically identified in
its plan to provide financial assistance to third parties who will
undertake eligible projects with such assistance. Agency will

review the preapplication, supporting materials and any required Forms
RD 1940-20 and initiate a Class II assessment for the preapplication.
This assessment will focus on the potential cumulative impacts of the
projects as well as any environmental concerns or problems that are
associated with individual projects and that can be identified at this
time from the information submitted. Because Agency\'s approval of this
type of grant application does not constitute Agency\'s commitment to
the use of grant funds for any identified third party projects (see
§1942.316 of this subpart), no public notification requirements for a
Class II assessment

## 10A

## (Added 06-19-97, SPECIAL PN)

(08-20-92) SPECIAL PN

§ 1942.310 (b)(4) (Con.) RD Instruction 1942-G

will apply to the preapplication. After the grant is approved, each
third party project to be assisted under the grant will undergo the
applicable environmental review and public notification requirements in
Subpart G of Part 1940 of this chapter, prior to Rural Development
providing its consent to the grantee to assist the third party project.
If the preapplication reflects only one specific project which is
specifically identified as the third party recipient for financial
assistance, Rural Development may perform the appropriate environmental
assessment in accordance with the requirements of Subpart G of Part 1940
of this chapter, and forego initiating a Class II assessment with no
public notification. However, the applicant must be advised that if the
recipient or project changes after the grant is approved, the project to
be assisted under the grant will undergo the applicable environmental
review and public notification requirements in Subpart G of Part 1940 of
this chapter.

\(5\) [Combined applications]{.underline}. Whenever an applicant files a
preapplication that includes a direct construction project and a plan to
provide financial assistance to third parties who will undertake
eligible projects, the following environmental requirements will apply:

\(i\) The proposed direct construction project(s) will be reviewed under
the requirements of paragraph (b)(3) of this section prior to
authorization of the application.

\(ii\) The plan to provide financial assistance to third parties will be
reviewed and processed under the requirements of paragraph (b)(4) of
this section. Additionally, the Class II assessment required for the
plan shall address and analyze the cumulative impacts of all proposed
projects, direct or third party, identified within the preapplication.

\(c\) [Excess capacity or transfer of employment]{.underline}.

\(1\) If a proposed grant is for more than \$1 million and will increase
direct employment by more than 50 employees, the applicant will be
requested to provide a written indication to Rural Development which
will enable Rural Development to determine that the proposal will not
result in a project which is calculated to, or likely to, result in:

## 11

(08-20-92) SPECIAL PN

RD Instruction 1942-G

§ 1942.310 (c)(1) (Con.)

\(i\) The transfer of any employment or business activity from one area
to another (this limitation shall not prohibit assistance for the
expansion of an existing business entity through the establishment of a
new branch, affiliate, or subsidiary of such entity if the expansion
will not result in an increase in the unemployment in the area of
original location or in any other area where such entity conducts
business operations unless there is reason to believe that such
expansion is being established with the intention of closing down the
operations of the existing business entity in the area of its original
location or in any other area where it conducts such operations), or

\(ii\) An increase in the production of goods, materials, or commodities
or the availability of services or facilities in the area, when there is
not sufficient demand for such goods, materials, commodities, services,
or facilities, to employ the efficient capacity of existing competitive
commercial or industrial enterprises, unless such financial or other
assistance will not have an adverse effect upon existing competitive
enterprises in the area. The applicant\'s written indication will
consist of a resolution from the applicant and Form RD 449-22,
\"Certification of Non-Relocation and Market and Capacity Information
Report,\" from each existing and future occupant of the site. The
applicant may use Guide 2 of this subpart as an example in preparing the
resolution. Future occupants of the site must be certified by Department
of Labor (DOL) as outlined in paragraph (c)(3) of this section for a
period of 3 years after the initial certification by DOL.

\(2\) The State Director will check each document for completeness and
accuracy and submit nine copies of each to the National Office for
forwarding to DOL. The submittal to the National Office should be
accompanied by a cover memorandum giving the amount and purpose of the
grant. Information should [not]{.underline} be submitted directly to DOL
from the applicant of the State Office.

\(3\) Grants shall not be made if the Secretary of Labor certifies
within 30 days after the matter has been submitted by the Secretary of
Agriculture that the provisions of § 1942.310 (c)(1) of this subpart
have not been complied with.

## 12

##  

§ 1942.310 (c)(3) (Con.) RD Instruction 1942-G

Information for obtaining this certification will be submitted in
writing by the applicant to Rural Development. The information will be
submitted to DOL by the Rural Development National Office. Grant
approval may be given and funds may be obligated subject to the DOL
certification being received provided Rural Development has made its own
separate determinations of (c)(1)(i) and (ii) of this section when the
project is in excess of \$1 million and affects over 50 employees.

\(4\) When a grant is being administered for a Federal Regional
Commission and no Rural Development grant funds are being used, the
requirements for DOL determinations may be waived upon written request
from the Commission. If the Commission so desires, the request will be
included in the letter from the Commission to Rural Development that
gives notice of transfer of funds and conditions under which the funds
are to be made available to the grantee. In such cases the letter of
conditions from Rural Development to the grantee will not include the
requirement for DOL determinations.

\(d\) [Management assistance]{.underline}. Grant recipients will be
supervised as necessary to assure that projects are completed in
accordance with approved plans and specifications and that funds are
expended for approved purposes. Grants made under this subpart will be
administered under and are subject to 7 CFR 3015, 7 CFR 3016, and 7 CFR
3017, as appropriate, and established Rural Development guidelines.

\(e\) [National Historic Preservation Act of 1966]{.underline}. All
projects will be in compliance with the National Historic Preservation
Act of 1966 in accordance with Subpart F of Part 1901 of this chapter.

\(f\) [Uniform Relocation and Real Property Acquisition Policies
Act]{.underline}. All projects must comply with the requirements set
forth in Title 7, Subtitle A, Part 21 of the Code of Federal
Regulations.

\(g\) [Floodplains and wetlands]{.underline}. All projects must comply
with Executive Order 11988, \"Floodplain Management,\" and Executive
Order 11990, \"Protection of Wetlands.\"

\(h\) [Flood or mudslide hazard area precautions]{.underline}. If the
grantee financed project is in a flood or mudslide area, then flood or
mudslide insurance must be provided.

\(i\) [Termination of Federal requirements]{.underline}. Once the
grantee has provided assistance to projects from a revolving fund, in an
amount equal to the grant provided by Rural Development, the
requirements imposed on the grantee shall not be applicable to any new
projects thereafter financed from the revolving fund. Such new projects
shall not be considered as being derived from Federal funds.

## 13

(08-20-92) SPECIAL PN

RD Instruction 1942-G

§ 1942.311 [Application processing]{.underline}.

\(a\) [Preapplication and applications]{.underline}.

\(1\) The application review and approval procedures outlined in\
§ 1942.2 of Subpart A of Part 1942 of this chapter will be followed as
appropriate. The State Director should assist the applicant in
application assembly and processing. The applicant shall use Standard
Form (SF) 424.1, \"Application for Federal Assistance (For
Non-Construction),\" or SF 424.2, \"Application for Federal Assistance
(For Construction),\" as applicable, when requesting financial
assistance under this program.

\(2\) Each application for assistance will be carefully reviewed in
accordance with the priorities established in § 1942.305 (b)(3) of this
subpart. A priority rating will be assigned to each application.
Applications selected for funding will be based on the priority rating
assigned each application and the total funds available. All
applications submitted for funding should contain sufficient information
to permit Rural Development to complete a thorough priority rating.

\(b\) [Review of decision]{.underline}. When the District Director is
informed that favorable action will not be taken on a preapplication or
application, the applicant will be notified in writing of the reasons
why the request was not favorably considered. The notification to the
applicant will State that a review of this decision by Rural Development
may be requested by the applicant in accordance with subpart B of Part
1900 of this chapter.

§ 1942.312 \[Reserved\]

§ 1942.313 [Plan to provide financial assistance to third
parties]{.underline}.

\(a\) For applications involving establishment of a revolving fund to
provide financial assistance to third parties, the applicant shall
develop a plan which outlines the purpose and administration of the
fund. The plan will include:

\(1\) Planned projects to be financed.

\(2\) Sources of all non-RBE funds

\(3\) Amount of technical assistance (if any).

\(4\) Purpose of the loans.

\(5\) Number of jobs to be created/saved with each project.

\(6\) Project priority and length of time involved in completion of each
project.

## 14 

§ 1942.313 (a) (Con.) RD Instruction 1942-G

\(7\) Other information required by the State Office.

\(b\) Each third party project receiving funds will be reviewed for
eligibility. When the applicant does not have a list of projects to be
completed, the applicant should advise Rural Development at the time a
preapplication is submitted.

§ 1942.314 [Grants to provide financial assistance to third parties,
television demonstration projects, and technical assistance
programs]{.underline}.

For applications involving a purpose other than a construction project
to be owned by the applicant, the applicant shall develop a Scope of
Work. The Scope of Work will be used to measure the performance of the
grantee. As a minimum, the Scope of Work should contain the following:

\(a\) The specific purposes for which grant funds will be utilized,
i.e., Technical Assistance, Revolving Fund, etc.

\(b\) Timeframes or dates by which action surrounding the use of funds
will be accomplished.

\(c\) Who will be carrying out the purpose for which the grant is made
(key personnel should be identified).

\(d\) How the grant purposes will be accomplished.

\(e\) Documentation regarding the availability and amount of other funds
to be used in conjunction with the funds from the RBE/Television
Demonstration program.

\(f\) For grants involving a revolving fund, the Scope of Work should
include those items listed in paragraphs (a) through (e) of this section
as well as the following:

\(1\) Information which will establish/identify the need for the
revolving loan fund.

\(2\) Financial statements which will demonstrate the financial ability
of the applicant to administer the revolving loan fund. As a minimum,
the financial statements will include:

\(i\) Balance sheet.

\(ii\) Income statement.

\(3\) Detail on the applicant\'s experience in operating a revolving
loan fund.

## 15

## 

(08-20-92) SPECIAL PN

RD Instruction 1942-G

§ 1942.314 (Con.)

\(g\) For technical assistance and television demonstration program
projects, the scope of work should include a budget based on the budget
contained in the application, modified or revised as appropriate, which
includes salaries, fringe benefits, consultant costs, indirect costs,
and other appropriate direct costs for the project.

§ 1942.315 [Docket preparation and Letter of Conditions]{.underline}.

\(a\) The applicable provisions of § 1942.5 of Subpart A of Part 1942 of
this chapter relating to preparation of loan dockets will be followed in
preparing grant dockets.

\(b\) The State Director or the State Director\'s designated
representative will prepare a Letter of Conditions outlining the
conditions under which the grant will be made. It will include those
matters necessary to assure that the proposed development is completed
in accordance with approved plans and specifications, that grant funds
are expended for authorized purposes, and that the terms of the Scope of
Work and requirements as prescribed in Parts 3015 and 3016 of 7 CFR are
complied with. The Letter of Conditions will be addressed to the
applicant, signed by the State Director or other designated Rural
Development representative, and mailed or handed to appropriate
applicant officials. Each Letter of Conditions will contain the
following paragraphs.

\"This letter establishes conditions which must be understood and agreed
to by you before further consideration may be given to the
application.\"

\"This letter is not to be considered as grant approval nor as a
representation as to the availability of funds. The docket may be
completed on the basis of a grant not to exceed \$\_\_\_\_\_\_\_\_\_.\"

\"Please complete and return the attached Form RD 1942-46, \`Letter of
Intent to Meet Conditions,\' if you desire further consideration be
given your application.\"

Other items in the Letter of Conditions should include those relative
to: maximum amount of grant; contributions; final plans and
specifications; construction contract documents and bidding; required
project audit; evidence of compliance with all applicable Federal,
State, and local requirements; closing instructions, DOL certifications;
compliance with any required environmental mitigation measures; and
other requirements including those of Regional Commissions when a grant
is being made by a Regional Commission.

## 16 

RD Instruction 1942-G

§ 1942.310(b)(4) (Con.)

§ 1942.316 [Grant approval, fund obligation, and third party financial
assistance]{.underline}.

\(a\) [Grant approval]{.underline}. Rural Development State Directors
are authorized to approve grants made in accordance with this subpart
and Subpart A of Part 1901 of this chapter.

\(b\) [Fund obligation and approval announcement]{.underline}. Funds
will be obligated and approval announcement made in accordance with the
provisions of §1942.5 (d) of Subpart A of Part 1942 of this chapter.

\(c\) [Third party financial assistance]{.underline}. Approval of a
grant to an applicant who will use grant funds to provide financial
assistance to a third party does not constitute approval of the projects
financed by the grantee. The review, approval, and disbursement of funds
for specific projects financed by grantees will be completed in
accordance with applicable parts of this subpart.

§§ 1942.317 - 1942.347 \[Reserved\]

§ 1942.348 [Exception authority]{.underline}.

The Administrator may, in individual cases, make an exception to any
requirement or provision of this subpart which is not inconsistent with
the authorizing statute, an applicable law or decision of the
Comptroller General, if the Administrator determines that application of
the requirement or provision would adversely affect the Government\'s
interest and show how the adverse impact will be eliminated or minimized
if the exception is made.

§ 1942.349 [Forms, guides, and attachments]{.underline}.

Guides 1 and 2 of this subpart, Attachment 1 of this subpart, and Forms
referenced (all available in any Rural Development office) are for use
in administering RBE/television demonstration grants. (Revised
06-19-97,\
SPECIAL PN.)

## 17

## (Revision 1)

(08-20-92) SPECIAL PN

RD Instruction 1942-G

§ 1942.350 [OMB control number]{.underline}.

The collection of information requirements in this regulation have been
approved by the Office of Management and Budget and have been assigned
OMB control number 0575-0132. Public reporting burden for this
collection of information is estimated to vary from one-half to 40 hours
per response, with an average of 1.8 hours per response including time
for reviewing instruction, 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 the collection of information, including
suggestions for reducing this burden, to Department of Agriculture,
Clearance Officer, OIRM, Room 404-W, Washington, D.C. 20250; and to the
Office of Information and Regulatory Affairs, Office of Management and
Budget, Washington, D.C. 20503.

Attachments: Guides 1 and 2; and Attachment 1.

## oOo

## 18

## (Revision 1) 

RD Instruction 1942-G

Guide 1

## Page No.

## PROJECT MANAGEMENT AGREEMENT

## BETWEEN THE

## [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline} REGIONAL COMMISSION

## AND 

## RURAL DEVELOPMENT, DEPARTMENT OF AGRICULTURE

## PERTAINING TO

## \_\_\_\_\_\_\_\_[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}\_\_\_\_\_ 

## (grantee)

## [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline} COUNTY,[\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}\_

(10-29-80) PN 750

RD Instruction 1942-G

Guide 1

Page 2

1 INTRODUCTION

A. The [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline} Regional
Commission is providing a

(basic or supplemental) grant
for[\_\_\_\_\_\_\_\_(purpose)\_\_\_\_\_\_\_\_]{.underline}
to[\_\_\_\_\_(grantee)\_\_\_\_\_]{.underline}, and the U.S. Department
of Agriculture, Rural Development has approved and will administer that
grant. Rural Development has determined that funds (can or cannot) be
made available under its funding program for this fiscal year for the
project. The project does meet all the requisites for assistance under
Section 310(B) of the Consolidated Farm and Rural Development Act, as
amended (7 USC 1926). In order to accomplish these purposes, the
[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline} Regional
Commission\'s Federal Cochairman and the Rural Development State
Director hereby enter into this Memorandum of Understanding which is in
accordance with 31 USC 686.

B. This agreement is intended to cover the application phase,

construction phase, and final audit.

II GENERAL

A. [Project Cost]{.underline}

The project costs for the purposes of this agreement shall include the
costs of construction, technical services, legal services, land
acquisition, permits and rights-of-way, interest during construction and
contingencies.

B. [Grant]{.underline}

The [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline} Regional
Commission shall make a (basic or supplemental ) grant of
\$[\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline} up to but not exceeding
[\_\_\_\_\_\_\_]{.underline}% of the total cost of the project. These
funds will be transferred to the Treasury Account of the Rural
Development by Standard Form 1151, \"Nonexpenditure Transfer
Authorization.\"

C. The undersigned Rural Development State Director on behalf of Rural

Development, in concurring to this Project Management Agreement,

hereby assures the Federal Cochairman that:

1\. The estimated cost of the project is reasonable and the

(basic or supplemental) grant, with the funds to be supplied by the
applicant, are, in its judgement, sufficient to complete the project.

RD Instruction 1942-G

Guide 1

Page 3

2\. The funds to be supplied by the applicant are available

or Rural Development is reasonably satisfied that the applicant has the
capability of supplying such funds.

3\. Rural Development is reasonably satisfied that the facility

will be properly and efficiently administered, operated, and

maintained and that the applicant will provide sufficient funds

to assure the successful and continuing operation of the

facility.

D. The [\_\_\_\_(grantee)\_\_\_\_\_\_\_\_]{.underline} is subject to
Executive Order 11246

and will be required to evidence compliance by execution of the
following:

1\. Equal Opportunity Agreement Form RD 400-1

2\. Nondiscrimination Agreement Form RD 400-4

E. The [\_\_\_\_\_(grantee)\_\_\_\_\_]{.underline} shall execute
assurances of

nonrelocation. (If applicable.)

III CONSTRUCTION MANAGEMENT

A. The forms and format for the documents shall conform to the

requirements in Subpart A of Part 1942 of this Chapter. Generally, the
following items shall be included:

1\. Contract Documents

2\. Specifications

3\. Plans

B. Rural Development will approve the plans and specifications.

C. Rural Development will obtain a certification of adequacy from the

Federal Environmental Protection Agency (include only when

applicable).

D. Rural Development will obtain a non-pollution certificate from the

[\_\_(state) \_\_\_\_\_\_\_\_(agency)\_\_\_\_\_\_\_\_\_]{.underline}
(include only when applicable).

E. Rural Development will make monthly inspections.

F. Contract change orders will not become effective until approved

by Rural Development.

G. Final inspection will be conducted by Rural Development.

(10-29-80) PN 750

RD Instruction 1942-G

Guide 1

Page 4

IV FINANCIAL MANAGEMENT

A. Financial management of the project shall be according to

Subpart A of Part 1942 of this Chapter.

B. Rural Development will provide the
[\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline} Regional Commission

with a copy of the audit report.

C. If actual costs fall below the costs on which the grant was

calculated, the Federal and non-Federal shares will be reduced
proportionately.

D. Rural Development will conform to the financial reporting

requirements for transferred funds as required by the attached copy

of \"Reporting of Funds Transfer by Participating Agencies.\"

V COMPENSATION

Services rendered by Rural Development for the processing and
administration of Commission grants in cases where neither Rural
Development loan nor grant funds are involved shall be on a reimbursable
basis. Reimbursement will be based on five percent of the amount of the
grant up to \$50,000 and an additional one percent of any amount over
the first \$50,000 of the Commission grant. The full amount of the
reimbursement will be transferred to Rural Development at the time the
grant funds are transferred to Rural Development.

VI No provision in this agreement shall abrogate the legal

requirements of administrative responsibilities as set forth in the
Consolidated Farm and Rural Development Act or Section 509 of the Public
Works and Economic Development Act of 1965, as amended.

For the For the

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline} Regional Commission
Rural Development,

USDA

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}\_
[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

(name) (name)

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}\_
[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

Federal Cochairman State Director

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}, 20 [\_]{.underline}
[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}, 20
[\_]{.underline}

## oOo 

RD Instruction 1942-G

Guide 2

Page 1

RESOLUTION

Whereas the
\_[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}
(hereinafter called public body) desires to obtain financial assistance
from the Rural Development, United States Department of Agriculture,
pursuant to Section 310 B of the Consolidated Farm and Rural Development
Act, for the purpose of providing
[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

(describe briefly the nature of the project

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(herein referred to as the facility) and as a condition to and in
consideration of receiving financial assistance from the Rural
Development this resolution is being adopted.

Therefore, in consideration of the premises the public body agrees as
follows:

1\. No private business enterprises shall be allowed to use or

occupy the facility if such use or occupancy would be calculated to, or
is likely to, result in the transfer from one area to another of any
employment or business activity provided by operations of the private
business enterprises. This limitation shall not be construed to prohibit
use and enjoyment of the facility by such private business entity
through the establishment of a new branch, affiliate, or subsidiary if
the establishment of such branch, affiliate, or subsidiary will not
result in the increase in unemployment in the area of original location
(or in any other area where such entity conducts business operations),
unless there is reason to believe that such branch, affiliate, or
subsidiary is being established with the intention of closing down the
operations of the existing business entity in the area of its original
location (or in any other area where it conducts such operation).

2\. No private business enterprises shall be allowed to use or

occupy the facilities if such use or occupancy would be calculated to,
or is likely to, result in an increase in the production of goods,
materials, or commodities, or the availability of services or facilities
in the area, where there is not sufficient demand for such goods,
materials, commodities, services or facilities to employ the sufficient
capacity of existing competitive commercial or industrial enterprises,
unless such financial or other assistance will not have an adverse
affect upon existing competitive enterprises in the area.

(04-28-99) PN 304

RD Instruction 1942-G

Guide 2

Page 2

3\. Prior to allowing the use or occupancy of the facilities by any

private business enterprise, the public body shall clear such use or
occupancy with the Manpower Administration, Department of Labor,
Washington, DC, by submitting information required by the Department of
Labor for certification under the Act. This information shall be
submitted to Rural Development for transmittal to the Department of
Labor. The public body agrees to make no final commitment with any
private business enterprise regarding such use or occupancy if the
Department of Labor issues a negative certification under the Act. The
public body shall obtain prior clearance in this matter for a period of
three years after the date of an affirmative certification by the
Department of Labor on the application for financial assistance now
pending before the Rural Development.

This resolution shall be in force and effect immediately.

The voting was yeas [\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}, nays
[\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}, absent
[\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}.

\_\_\_\_\_[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

(Name of public body)

by[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

(Name and Title)

## [Certification]{.underline}

I the undersigned as (Secretary) (Town Clerk) of the
[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline} do hereby certify that
the foregoing resolution was duly adopted at a meeting
of\_[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}
duly called and held on the
[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline} day of , and that such
resolution has not been rescinded or amended in any way. Dated this
[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline} day of\
[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}.

(Seal)

(Town Clerk) (Secretary) of
[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

## oOo

##  

RD Instruction 1942-G

Attachment 1

## GENERAL REQUIREMENTS FOR ADMINISTRATION

## OF RURAL BUSINESS ENTERPRISE 

## AND TELEVISION DEMONSTRATION GRANTS

I. [Introduction]{.underline}.

The provisions for Rural Development internal operations of the Rural
Business Enterprise (RBE) and Television Demonstration grant programs
are contained in this Attachment. This Attachment is only a supplement
to the information contained in the main body of the instruction and
does not contain information which would be of benefit to the public.
This Attachment has three sections: Section A - General Requirements;
Section B -- Attachment to Form RD 1940-1, \"Request for Obligation of
Funds,\" (Responsibilities of the Grantee); and Section C - Project
Selection Criteria.

## Section A

II\. [General Requirements]{.underline}.

A. [Intergovernmental review]{.underline}. RBE/Television Demonstration
grant projects are subject to the provisions of Executive Order 12372
which requires intergovernmental consultation with State and local
officials. For each project to be assisted with a grant under this
subpart and for which the State has elected to review the project under
their intergovernmental review process, the State Point of Contact must
be notified. Notification, in the form of a project description, can be
initiated by the grantee. Any comments from the State must be included
with the grantee\'s request to use Rural Development grant funds for the
specific project. Prior to Rural Development\'s decision on the request,
compliance with requirements of intergovernmental consultation must be
demonstrated for each project. These requirements should be carried out
in accordance with 7 CFR 3015, Subpart V, \"Intergovernmental Review of
Rural Development Programs and Activities,\" (see RD Instruction 1940-J,
available in any Rural Development office). In those instances where a
State\'s comments cannot be accommodated, Rural Development will provide
the State with a timely explanation of the basis for its decision. Rural
Development will not implement its decision for 15 days after the State
receives the explanation, unless unusual circumstances make the 15-day
waiting period not feasible. The explanation will take the form of a
written explanation and may be supplemented by telephone, meeting, or
other telecommunication.

(08-20-92) SPECIAL PN

RD Instruction 1942-G

Attachment 1

Page 2

B. [Selection priorities/State Office review (§ 1942.305 of this
subpart)]{.underline}.

1\. All applications shall be accompanied by sufficient information to
permit the numerical ranking established by § 1942.305 (b)(3) of this
subpart. Such information should include:

a\. A description of proposed service(s) to be provided/projects to be
funded.

b\. Income data on area to be served.

c\. Unemployment rate of the area to be served.

d\. Median household income of area to be served.

e\. Grantee\'s experience in providing the proposed service.

2\. When ranking applications see items b through d of paragraph II B 1
of this Attachment, the entire area to be served should be considered
when assigning discretionary points.

3\. If an application involves the establishment of a revolving fund,
the following additional information should be provided in accordance
with § 1942.311 (a)(2) of this subpart.

a\. Grantee\'s financial ability to administer a revolving loan fund (at
a minimum, the information should include a balance sheet and an income
statement).

b\. The need for a revolving fund.

c\. Other funds available to leverage funds made available under this
program.

C. [Office of General Counsel (OGC) review]{.underline}. Rural
Development will request an opinion from the Regional Attorney, OGC,
that the applicant is an eligible applicant with authority to carry out
the purposes of the proposed grant. The applicant will provide the
necessary information to Rural Development for submission to the
Regional Attorney.

D. [Application processing (§ 1942.311 of this subpart)]{.underline}.
The applicant shall be advised of the conditions/requirements (outlined
in this attachment) for receipt of RBE monies at the time of
preapplication conference. Upon notification on Form AD-622, \"Notice of
Preapplication Review Action,\" that the applicant is eligible for
funding, the following will be submitted to Rural Development.

RD Instruction 1942-G

Attachment 1

Page 3

1\. Standard Form (SF) 424.1, \"Application for Federal Assistance (For
Non-construction),\" or SF-424.2, \"Application for Federal Assistance
(For Construction),\" will be used for making application under this
program, as applicable.

2\. For grants to establish a revolving loan fund, a proposed Scope of
Work detailing:

a\. Information as prescribed in § 1942.314 of this subpart.

b\. Proposed project budget.

c\. Other requested information needed by Rural Development to make a
grant award determination.

3\. For grants to establish a revolving fund and/or to provide technical
assistance, the following forms and documents will be part of the grant
docket:

a\. Form RD 400-1, \"Equal Opportunity Agreement.\"

b\. Form RD 400-4, \"Assurance Agreement (Under Title VI, Civil Rights
Act of 1966).\"

c\. Scope of Work prepared by the applicant.

d\. Form RD 1940-1, \"Request for Obligation of Funds,\" (with the
required attachment).

4\. Dockets for nonrevolving fund grants will contain those items
specified in paragraphs II D (3)(a), (b), and (d) of this Attachment, as
well as other appropriate items specified in Subpart A of Part 1942 of
this chapter.

5\. All dockets will contain executed Forms AD-1047, \"Certification
Regarding Debarment, Suspension, and Other Responsibility Matters -
Primary Covered Transactions,\" and AD-1049, \"Certification Regarding
Drug-Free Workplace Requirements (Grants) Alternative I - For Grantees
Other Than Individuals,\" required in RD Instruction 1940-M,
\"Governmentwide Debarment and Suspension (Nonprocurement) and
Requirements for Drug-Free Workplace,\" available in any Rural
Development office.

E. [Appraisals]{.underline}. When land is to be purchased in accordance
with\
§ 1942.306 (a) of this subpart, the State Director, to establish \"fair
market value,\" may require the applicant to provide an appraisal report
prepared by an independent qualified appraiser.

(08-20-92) SPECIAL PN

RD Instruction 1942-G

Attachment 1

Page 4

F. [Planning and performing development]{.underline}. The applicable
provisions of\
§ 1942.18 of Subpart A of Part 1942 of this chapter related to planning
and performing development are to be adhered to for construction of RBE
grant projects. This includes requirements for actions pertaining to:

1\. Professional services, design policies, preliminary engineering and
architectural reports and construction bids, contract awards, and
construction inspections.

2\. Concurrence in agreements between grantees and third parties.

3\. Preconstruction conferences.

G. [Letter of Conditions (§ 1942.315 of this subpart)]{.underline}.

1\. The applicable provisions of § 1942.5 of Subpart A of Part 1942 of
this chapter regarding the Letter of Conditions should be followed.

2\. The Letter of Conditions will include those matters as prescribed in
§ 1942.315 of this subpart and should be attached to the Form RD 1940-1
(see Section A, paragraph II H of this Attachment).

3\. The Letter of Conditions will also include the following paragraphs,
as appropriate:

a\. For revolving loan and technical assistance grants include, \"You
must certify that each project is located in a rural area.\" If
technical assistance grant funds are involved, include also, \"You must
certify that the technical assistance provided is benefiting a rural
area.\"

b\. \"You must certify at least 51 percent of the outstanding interest
in the project has membership or is owned by those who are either
citizens of the United States or reside in the United States after being
legally admitted for permanent residence.\"

c\. \"You must execute Form AD-1047 to certify that your organization is
not debarred or suspended from Government assistance. You also must
obtain a certification on Form AD-1048, \"Certification Regarding
Debarment, Suspension, Ineligibility, and Voluntary Exclusion - Lower
Tier Covered Transactions,\" from any person or entity you do business
with as a result of this Government assistance that they are not
debarred or suspended from Government assistance.\"

RD Instruction 1942-G

Attachment 1

Page 5

(Revision 2)

d\. \"You must execute Form AD-1049 to certify that you will provide a
drug-free awareness program for employees.\"

H. [Grant approval, obligation of funds, grant closing]{.underline}.
Section B of this Attachment shall become a permanent part of Form RD
1940-1 when RBE grant funds are involved, and the following paragraph
will appear in the comment section of that form.

\"The grantee understands the requirements for receipt of funds under
the Rural Business Enterprise grant program. The grantee assures and
certifies that it is in compliance with all applicable laws,
regulations, Executive Orders and other generally applicable
requirements, including those set out in Part 1942, Subpart G,
Attachment 1, \"General Requirements for Administration of Rural
Business Enterprise and Television Demonstration Grants,\" 7 CFR, Parts
3015, 3016, 3017, 3018, 3019, and 3052 including revisions through
[\_\_\_\_\_\_\_\_\_\_\_]{.underline} (date of grant approval) and the
Letter of Conditions. (Revised 07-16-03, PN 361.)

For grants involving the establishment of a revolving loan program, the
following statement shall also be added to the comment section of Form
RD 1940-1: \"The grantee furthermore agrees to use grant funds for the
purposes outlined in the Scope of Work approved by Rural Development.\"

1\. Grants will be approved and closed in accordance with the applicable
parts of Subpart A of Part 1942 of this chapter, including §§ 1942.7 and
1942.17 (o), this Attachment, and any instructions from the Regional
Attorney, OGC.

2\. An executed copy of the Scope of Work will be sent to the applicant
on the obligation date, along with a copy of Form\
RD 1940-1 and the required attachment.

3\. When Form RD 1940-1 has been executed by all parties, the grant is
closed.

4\. If the grant is not approved, the applicant will be notified in
writing of the reason(s) for rejection. The notification to the
applicant will state that a review of this decision by Rural Development
may be requested by the applicant under Subpart B of Part 1900 of this
chapter. (Renumbered 07-16-03, PN 361.)

(08-20-92) SPECIAL PN

RD Instruction 1942-G

Attachment 1

Page 6

(Revision 2)

I. [Fund disbursement]{.underline}. Except for grants for revolving
loans, grant funds will be disbursed by Rural Development on a
reimbursement basis. Requests should not exceed one advance every 30
days. The financial management system of the recipient organization
shall provide for effective control and accountability of all funds,
property, and other assets.

1\. As needed, but not more frequently than once every 30 days, an
original and one copy of SF-270, \"Request for Advance or
Reimbursement,\" may be submitted to Rural Development. Recipient\'s
request for advance shall not be made in excess of reasonable outlays
for the month covered.

2\. Grantee shall provide satisfactory evidence to Rural Development
that all officers of grantee organization authorized to receive and/or
disburse Federal funds are covered by such bonding and/or insurance
requirements as are normally required by the grantee.

3\. Release of technical assistance funds.

a\. The grantee will provide the District Office with a project
description and intergovernmental review data as defined in Section A,
paragraph II A of this Attachment.

b\. The servicing official will review the project for eligibility. Once
determined eligible and satisfactory intergovernmental review clearances
have been received, the grantee may request funds as outlined above in
paragraph II I 1 of this Attachment.

4\. For grants to provide assistance to third parties, through a
revolving fund, funds will be disbursed in accordance with USDA\'s
Uniform Federal Assistance Regulations, the items listed above in
paragraph II I 3 a of this Attachment and the following:

a\. The grantee is responsible for providing Rural Development with
environmental review data. Each project will undergo the applicable
environmental review in accordance with §1942.310 (b) of this subpart.

b\. The grantee is responsible for providing Rural Development with
intergovernmental review clearances in accordance with Section A,
paragraph II A of this Attachment. Each project will undergo the
intergovernmental review process.

c\. Once the State Office has received clearances for intergovernmental
review and the environmental assessment is completed, the grantee may
request grant funds for that purpose by use of SF-270 as outlined above
in paragraph II I 1 of this Attachment.

RD Instruction 1942-G

Attachment 1

Page 7

(Revision 2)

J. [Reporting]{.underline}. Forms SF-269, \"Financial Status Report,\"
and a Project Performance Activity Report will be required of all
grantees on a quarterly basis (due 15 working days after end of
quarter). A final Project Performance Report will be required with the
last SF-269. The final report may serve as the last quarterly report.
Grantees shall constantly monitor performance to ensure that time
schedules are being met, projected work by time periods is being
accomplished, and other performance objectives are being achieved.

The project performance reports shall include, but not be limited to,
the following:

1\. A comparison of actual accomplishments to the objectives established
for that period;

> 2\. Reasons why established objectives were not met;

3\. Problems, delays, or adverse conditions which will affect attainment
of overall project objectives, prevent meeting time schedules or
objectives, or preclude the attainment of particular project work
elements during established time periods. This disclosure shall be
accompanied by a statement of the action taken or planned to resolve the
situation; and

4\. Objectives and timetables established for the next reporting period.

> K. [Audit requirements]{.underline}. Audit requirements only apply to
> the year(s) in which Agency grant funds are expended. Grantees
> expending \$300,000 or more of Federal assistance per year must submit
> an audit in accordance with the requirements of OMB Circular A-133 as
> codified in 7 CFR 3052. Grantees that expend less than \$300,000 a
> year in Federal award are exempt from Federal audit requirements for
> that year except as noted in 7 CFR 3052.215(a), but records must be
> available for review or audit by appropriate officials of the Federal
> agency, pass-through entity, and General Accounting Office. (Revised
> 07-17-02, PN 348.)

L. [Programmatic changes]{.underline}. The recipient shall obtain prior
approval for any change to the scope or objectives of the approved
project. (For construction projects, any material change in approved
space utilization or functional layout shall be considered a change in
scope). Failure to obtain prior approval of changes to the scope can
result in suspension/termination of grant funds.

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RD Instruction 1942-G

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(Revision 2)

M. [Grant cancellation]{.underline}. Grants may be cancelled by the
grant approval official by use of Form RD 1940-10, \"Cancellation of
U.S. Treasury Check and/or Obligation.\" The State Director will notify
the applicant by letter that the grant has been cancelled. A copy of the
letter will be sent to the applicant\'s attorney and engineer and to the
Regional Attorney, OGC, if the Regional Attorney has been involved.

N. [Grant servicing]{.underline}. Grants will be serviced in accordance
with Subpart E of Part 1951 of this chapter.

O. [Subsequent grants]{.underline}. Subsequent grants will be processed
in accordance with the requirements set forth in this subpart.

## Section B

III\. [Responsibilities of the Grantee]{.underline}

This section contains information regarding the responsibilities of the
grantee for receipt of monies under the RBE/television demonstration
grant program. This section shall become a permanent attachment to Form
RD 1940-1 as outlined in Section A, paragraph II. H. of this Attachment.
These requirements do not supersede the requirement for receipt of
Federal funds as stated in Parts 3015, 3016, and 3019 of the Uniform
Federal Assistance Regulations; however, specific areas related to the
RBE/television demonstration grant program are cited below. (Revised
07-16-03, PN 361.)

Grantee agrees to:

A. Comply with property management standards established by 7 CFR Parts
3015, 3016, and 3019 for real and personal property. \"Personal
property\" means property of any kind except real property. It may be
tangible - having physical existence - or intangible - having no
physical existence; such as patents, inventions, and copyrights.
\"Nonexpendable personal property\" means tangible personal property
having a useful life of more than 1 year and an acquisition cost of
\$300 or more per unit. A grantee may use its own definition of
nonexpendable personal property provided that such definition would at
least include all tangible personal property as defined above.
\"Expendable personal property\" refers to all tangible personal
property other than nonexpendable property. When real property or
nonexpendable property is acquired by a grantee with project funds,
title shall not be taken by the Federal Government but shall be vested
in the grantee subject to the following conditions: (Revised 07-16-03,
PN 361.)

RD Instruction 1942-G

Attachment 1

Page 8A

(Added 07-17-02, PN 348)

1\. Right to transfer title. For items of real or nonexpendable personal
property having a unit acquisition cost of \$1,000 or more, the Agency
may reserve the right to transfer the title to the Federal Government or
to a third party named by the Federal Government when such third party
is otherwise eligible under existing statutes. Such reservation shall be
subject to the following standards:

a\. The property shall be appropriately identified in the grant or
otherwise made known to the grantee in writing.

b\. The Agency shall issue disposition instructions within 120 calendar
days after the end of the Federal support of the project for which it
was acquired. If the Agency fails to issue disposition instructions
within the 120 calendar day period, the grantee shall apply the
standards of Section B, paragraphs III. A. 2. and 3. of this Attachment.

> c\. When the Agency exercises its right to take title, the personal
> property shall be subject to the provisions for federally owned
> nonexpendable property discussed in Section B, paragraphs III. A. 2.
> and 3. of this Attachment.

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RD Instruction 1942-G

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d\. When title is transferred either to the Federal Government or to a
third party and the grantee is instructed to ship the property
elsewhere, the grantee shall be reimbursed by the benefiting Federal
agency with an amount which is computed by applying the percentage of
the grantee participation in the cost of the original grant project or
program to the current fair market value of the property, plus any
reasonable shipping or interim storage costs incurred.

2\. Use of other real or nonexpendable personal property for which the
grantee has title.

a\. The grantee shall use the property in the project or program for
which it was acquired as long as needed, whether or not the project or
program continues to be supported by Federal funds. When it is no longer
needed for the original project or program, the grantee shall use the
property in connection with its other federally sponsored activities in
the following order of priority:

i\. Activities sponsored by Rural Development.

ii\. Activities sponsored by other Federal agencies.

b\. Shared use. During the time that nonexpendable personal property is
held for use on the project or program for which it was acquired, the
grantee shall make it available for use on other projects or programs if
such other use will not interfere with the work on the project or
program for which the property was originally acquired. First preference
for such other use shall be given to projects or programs sponsored by
Rural Development; second preference shall be given to projects or
programs sponsored by other Federal agencies. If the property is owned
by the Federal Government, use for other activities not sponsored by the
Federal Government shall be permissible if authorized by Rural
Development. User charges should be considered, if appropriate.

3\. Disposition of real or nonexpendable personal property. When the
grantee no longer needs the property as provided in Section B, paragraph
III A 2 of this Attachment, the property may be used for other
activities in accordance with the following standards:

a\. Personal property with a unit acquisition cost of less than \$1,000.
The grantee may use the property for other activities without
reimbursement to the Federal Government or sell the property and retain
the proceeds.

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RD Instruction 1942-G

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b\. Real or nonexpendable personal property with a unit acquisition cost
of \$1,000 or more. The grantee may retain the property for other use
provided that compensation is made to Rural Development or its
successor. The amounts of compensation shall be computed by applying the
percentage of Federal participation in the cost of the original project
or program to current fair market value of the property. If the grantee
has no need for the property and the property has further use value, the
grantee shall request disposition instructions from the original grantor
agency.

c\. Rural Development shall determine whether the property can be used
to meet the agency\'s requirements. If no need exists within Rural
Development, the General Services Administration\'s Federal Property
Management Regulations (FPMR) will be used by Rural Development to
determine whether a need for the property exists in other Federal
agencies. Rural Development shall issue instructions to the grantee no
later than 120 days after the grantee request and the following
procedures shall govern:

i\. If so instructed, or if disposition instructions are not issued
within 120 calendar days after the grantee\'s request, the grantee shall
sell the property and reimburse Rural Development an amount computed by
applying to the original project or program. However, the grantee shall
be permitted to deduct and retain from the Federal share \$100 or 10
percent of the proceeds, whichever is greater, for the grantee\'s
selling and handling expenses.

ii\. If the grantee is instructed to dispose of the property other than
as described in Section B, paragraphs III A 2 and 3 of this Attachment,
the grantee shall be reimbursed by Rural Development for such costs
incurred in its disposition.

iii\. Property management standards for nonexpendable personal property.
The grantee\'s property management standards for nonexpendable personal
property shall include the following procedural requirements:1111

[a]{.underline}. Property records shall be maintained accurately and
shall include:

[i]{.underline}. A description of the property.

[ii]{.underline}. Manufacturer\'s serial number, model number, Federal
stock number, national stock number, or other identification number.

RD Instruction 1942-G

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Page 11

[iii]{.underline}. Sources of the property including grant or other a
agreement number.

[iv]{.underline}. Whether title vests in the grantee or the Federal
Government.

[v]{.underline}. Acquisition date (or date received, if the property was
furnished by the Federal Government) and cost.

[vi]{.underline}. Percentage (at the end of the budget year) of Federal
participation in the cost of the project or program for which the
property was acquired. (Not applicable to property furnished by the
Federal Government).

[vii]{.underline}. Location, use, and condition of the property and the
date the information was reported.

[viii]{.underline}. Unit acquisition cost.

[ix]{.underline}. Ultimate disposition data, including date of disposal
and sales price or the method used to determine current fair market
value where a grantee compensates the Federal agency for its share.

[b]{.underline}. Property owned by the Federal Government must be marked
to indicate Federal ownership.

[c]{.underline}. A physical inventory of property shall be taken and the
results reconciled with the property records at least once every 2
years. Any differences between quantities determined by the physical
inspection and those shown in the accounting records shall be
investigated to determine the causes of the difference. The grantee
shall, in connection with the inventory, verify the existence, current
utilization, and continued need for the property.

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RD Instruction 1942-G

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[d]{.underline}. A control system shall be in effect to ensure adequate
safeguards to prevent loss, damage, or theft of the property. Any loss,
damage, or the theft of nonexpendable property shall be investigated and
fully documented; if the property was owned by the Federal Government,
the grantee shall promptly notify Rural Development.

[e]{.underline}. Adequate maintenance procedures shall be implemented to
keep the property in good condition.

[f]{.underline}. Where the grantee is authorized or required to sell the
property, proper sales procedures shall be established which would
provide for completion to the extent practicable and result in the
highest possible return.

[g]{.underline}. Expendable personal property shall vest in the grantee
upon acquisition. If there is a residual inventory of such property
exceeding \$1,000 in total aggregate fair market value, upon termination
or completion of the grant and if the property is not needed for any
other federally sponsored project or program, the grantee shall retain
the property for use on nonfederally sponsored activities, or sell it,
but must, in either case, compensate the Federal Government for its
share. The amount of compensation shall be computed in the same manner
as nonexpendable personal property.

This Attachment covers the following described personal property and any
additional property acquired wholly or in part with grant funds (use
continuation sheets as necessary):

When real property is no longer needed as provided above, return all
real property, furnished or purchased wholly with Federal grant funds to
the grantor. In the case of property purchased in part with Federal
grant funds, the grantee may be permitted to take title to the Federal
interest therein upon compensating the Federal Government for its fair
share of the property. The Federal share of the property shall be the
amount computed by applying the percentage of the Federal participation
in the total cost of the grant program for which the property was
acquired to the current fair market value of the property.

This Attachment covers the following described real property
purchased/to be purchased wholly or in part with grant funds (use
continuation sheets as necessary):

RD Instruction 1942-G

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(Revision 1)

B. Cause said program to be completed within the total sums available to
it, including said grant, in accordance with the program plan and any
necessary modifications thereof prepared by grantee and approved by
grantor.

C. Permit periodic inspection of the program operations by a
representative of grantor.

D. Make the program available to all persons in grantee\'s service area
without regard to race, color, national origin, religion, sex, marital
status, age, physical or mental handicap who have also received Rural
Development related assistance from the grantee.

E. Not use grant funds to replace any financial support previously
provided or assured from any other source. The grantee agrees that the
general level of expenditure by the grantee for the benefit of program
area and/or program covered by this attachment shall be maintained and
not reduced as a result of the Federal share of funds received under
this grant.

F. No nonexpendable personal property to be owned or used by the
borrower or its affiliate(s) for use other than the grant purposes will
be acquired wholly or in part with grant funds.

G. Use of the property including land, land improvement, structures, and
appurtenances thereto, for authorized purposes of the grant as long as
needed. The grantee shall obtain approval of the grantor before using
the real property for other purposes when the grantee determines that
the property is no longer needed for the original grant purposes.

H. Provide financial management systems which will include:

1\. Accurate, current, and complete disclosure of the financial results
of each grant. Financial reporting will be on an accrual basis.

2\. Records which identify adequately the source and application of
funds for grant-supporting activities. Those records shall contain
information pertaining to grant awards and authorizations, obligations,
unobligated balances, assets, liabilities, outlays, and income.

3\. Effective control over, and accountability for, all funds. Grantees
shall adequately safeguard all such assets and shall ensure that they
are used solely for authorized purposes.

4\. Accounting records supported by source documentation.

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RD Instruction 1942-G

Attachment 1

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(Revision 1)

I. Retain financial records, supporting documents, statistical records,
and all other records pertinent to the grant for a period of at least 3
years after grant closing except that the records shall be retained
beyond the 3-year period if audit findings have not been resolved.
Microfilm copies may be substituted in lieu of original records. The
grantor and the Comptroller General of the United States, or any of
their duly authorized representatives, shall have access to any books,
documents, papers, and records of the grantee governments which are
pertinent to the specific grant program for the purpose of making audit,
examination, excerpts, and transcripts.

J. Provide information as requested by the grantor to determine the need
for and complete any necessary environmental assessments or
Environmental Impact Statements.

> K. Grantees expending \$300,000 or more of Federal assistance in the
> year(s) that Agency grant funds are expended shall submit an audit in
> accordance with OMB Circular A-133 as codified in 7 CFR 3052. Grantees
> that expend less than \$300,000 a year in Federal award are exempt
> from Federal audit requirements for that year except as noted in 7 CFR
> 3052.215(a), but records must be available for review or audit by
> appropriate officials of the Federal agency, pass-through entity, and
> General Accounting Office. (Revised 07-17-02, PN 348.)

L. Provide grantor with such periodic reports as it may require and
permit periodic inspection of its operations by a designated
representative of the grantor.

M. Not to encumber, transfer, or dispose of the property or any part
thereof, furnished by the grantor or acquired wholly or in part with
grantor funds without the written consent of the grantor except as
provided in Section B, paragraph III. A. of this Attachment.

N. Execute Form RD 400-1, Form RD 400-4, and any other agreements
required by grantor to implement the civil rights requirements. If any
such form has been executed by grantee as a result of a loan being made
to grantee by grantor contemporaneously with the making of this grant,
another form of the same type need not be executed in connection with
this grant.

RD Instruction 1942-G

Attachment 1

Page 14A

(Added 07-17-02, PN 348)

O. In contracts in excess of \$2,000 and in other contracts in excess of
\$2,500 which involve the employment of mechanics or laborers, to
include a provision for compliance with Sections 103 and 107 of the
Contract Work Hours and Safety Standards Act (40 U.S.C. 327-330) as
supplemented by Department of Labor regulations (29 CFR, Part 5).
Applies only where Davis Bacon requirements apply.

P. Include in all contracts in excess of \$100,000 a provision for
compliance with all applicable standards, orders, or regulations issued
pursuant to the Clear Air Act of 1970. Violations shall be reported to
the grantor and the Regional Office of the Environmental Protection
Agency.

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RD Instruction 1942-G

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Page 15

(Revision 1)

Q. Upon any default under its representations or agreements set forth in
this instrument, grantee, at the option and the demand of grantor, will,
to the extent legally permissible, repay to grantor forthwith the
original principal amount of the grant stated hereinabove, with interest
equal to the rate of interest paid on U.S. 26-week Treasury Bills
adjusted quarterly from the date of the default. The provisions of this
Attachment may be enforced by grantor at its option and without regard
to prior waivers by it of previous defaults of grantee, by judicial
proceedings to require specific performance of the terms of this
Attachment or by such other proceedings in law or equity, in either
Federal or State courts as may be deemed necessary by grantor to ensure
compliance with the provisions of this Attachment and the laws and
regulations under which this grant is made.

R. That no member of Congress shall be admitted to any share or part of
this grant or any benefit that may rise therefrom; but this provision
shall not be construed to bar as a contractor under the grant a publicly
held corporation whose ownership might include a member of Congress.

S. That all nonconfidential information resulting from its activities
shall be made available to the general public on an equal basis.

T. That the purpose and Scope of Work for which this grant is made shall
not duplicate programs for which monies have been received, are
committed, or are applied to from other sources, public or private.

U. That grantee shall relinquish any and all copyrights and/or
privileges to the materials developed under this grant, such material
being the sole property of the Federal Government. In the event anything
developed under this grant is published in whole or in part, the
material shall contain notice and be identified by language to the
following effect: \"The material is the result of tax-supported research
and as such is not copyrightable. It may be freely reprinted with the
customary crediting of the source.\"

V. That the grantee shall abide by the policies promulgated in 7 CFR
Parts 3015, 3016, and 3019 which provides standards for use by grantees
in establishing procedures for the procurement of supplies, equipment,
and other services with Federal grant funds. (Revised 07-16-03, PN 361.)

W. To the following termination provisions:

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RD Instruction 1942-G

Attachment 1

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(Revision 1)

1\. Termination for cause: The grantor agency may terminate any grant in
whole, or in part, at any time before the date of completion, whenever
it is determined that the grantee has failed to comply with the
conditions of the grant. The grantor agency shall promptly notify the
grantee in writing of the determination and the reasons for termination,
together with the effective date.

2\. Termination for convenience: The grantor agency or grantee may
terminate grants in whole, or in part, when both parties agree that the
continuation of the program would not produce beneficial results
commensurate with the further expenditure of funds. The two parties
shall agree upon the termination conditions, including the effective
date, and in the case of partial terminations, the portion to be
terminated. The grantee shall not incur new obligations for the
terminated portion after the effective date, and shall cancel as many
outstanding obligations as possible. The grantor agency shall allow full
credit to the grantee for the Federal share of the noncancelable
obligations, properly incurred by the grantee prior to termination.

X. That grantee will remit interest earned on grant funds deposited in
an interest bearing account in accordance with 7 CFR Parts 3015, 3016,
and 3019. (Revised 07-16-03, PN 361.)

RD Instruction 1942-G

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(Revision 1)

## Section C

## Rural Business Enterprise and Television Demonstration Grant Program

## Project Selection Criteria

Project Score [\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

Name of
Applicant[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}\_\_\_\_

State [\_\_\_\_\_\_\_\_\_]{.underline}
County\_[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Grant \$[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline} Initial or
Subsequent [\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}\_\_\_\_\_\_

Amount of previous Rural Development funding for this project
\$[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}\_\_\_\_\_\_

Purpose: Revolving Fund: \|[\_]{.underline}\| Technical Assistance:
\|[\_]{.underline}\|

Industrial Site: \|[\_]{.underline}\| Other Business Development:
\|[\_]{.underline}\|

Brief description of the proposed facility:

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

Priorities Points

A. Population.

Proposed project is located in a rural

community having a population:

Between 15,000 and 25,000 5

Between 5,000 and 15,000 10

Under 5,000 15

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RD Instruction 1942-G

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(Revision 1)

B. [Economic conditions]{.underline}.

1\. Proposed project will be located in areas where the

unemployment rate exceeds the State unemployment rate by:

a\. 25 percent or more 20

b\. less than 25 percent 10

c\. equal to or less than State rate 0

2\. Proposed project will be located in areas where the median household
income (MHI) of the population to be served by the proposed facility is:

a\. Less than the poverty line for a family

of four as prescribed by Section 673 (2) of

the Community Services Block Grant Act

(42 U.S.C. 9902 (2)). 25

b\. More than the poverty line and less than

85 percent of the State\'s MHI. 15

c\. More than the poverty line and between

85 percent and 100 percent of the State\'s MHI. 10

d\. Equal or greater than State MHI. 0

C. [Experience]{.underline}. Applicant has substantial experience in

administering a rural economic development program. 10

(Revision 03-20-02, PN 343.)

D. [Other]{.underline}.

1\. Applicant has written evidence of commitment

from small business that small business

development will occur by startup or expansion

as a result of the grant. 25

2\. Grant request contains evidence that a

substantial commitment of funds from nonfederal

sources for proposed project is:

a\. more than 50 percent 15

b\. more than 25 percent and

less than 50 percent 10

c\. between 5 percent and 25 percent 5

3\. For grants to establish a revolving fund,

or grant request contains proposed third

party recipients. 25

RD Instruction 1942-G

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(Revision 1)

4\. The proposed project will create and/or

save jobs at:

a\. one job per each \$10,000 or less

in grant funds expended 10

b\. one job per each \$25,000 to \$10,000

in grant funds expended 5

5\. Proposed project is consistent with, and

is reflected in, local plans for the area. 5

6\. Grant projects utilizing funds available

under this subpart are:

a\. less than \$100,000 25

b\. \$100,000 to \$200,000 15

c\. more than \$200,000 to \$500,000 10

7\. The project will assist a small and emerging

private business enterprise as described in

§1942.305 (a)(2) of this subpart. 10

(Revised 12-20-02, SPECIAL PN.)

E. [Discretionary points]{.underline} for initial grants of not more

than \$500,000 in accordance with §1942.305 (b)(3)(v)

of this subpart. Give written justification. \_\_

(Revised 12-20-02, SPECIAL PN.)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Chief, Community and Business Programs Date

Directions: Complete the information requested on pages 17-19 of this
Attachment. In paragraphs A-D of Section C, circle the points for those
priorities which apply to, and are met by, the preapplication under
consideration. Determine and justify the number of discretionary points,
if any, to be awarded in paragraph E of Section C of this Attachment and
add up the total number of points scored.

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RD Instruction 1942-G

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(Revision 1)

TO: Administrator, Rural Business-Cooperative Service

Washington, DC 20250

Attention: \_\_\_\_\_\_\_\_\_\_\_\_\_\_ Specialty Lenders Division

State: \_\_\_\_\_\_\_\_\_\_\_

Name of Applicant:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

A. Amount \$\_\_\_\_\_\_\_\_\_\_\_\_\_

B. State the priority of this project in relation to all others on hand
at the time of submission to the National Office. (Attach a revised
priority listing for previously submitted projects, if necessary.)
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

C. Is this project ready for obligation? \_\_\_\_\_Yes \_\_\_\_\_ No.

If no, give estimated date project will be ready for obligation of
funds.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

D. If other funds are involved in this project, have they been
committed? \_\_\_\_Yes \_\_\_\_No.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

State Director Date

Directions: To request an allocation of funds from the National Office,
State Offices should complete this part of Attachment 1, Section C,
attach it to the project selection criteria, and submit both to the
National Office.