Editorial Note on Part 1940
Editorial Note: Nomenclature changes to part 1940 appear at 80 FR 9876, Feb. 24, 2015.

§ 1940.954 State participation. ( a ) *Application.* If a State desires to participate in this pilot program, the Governor may submit an original and one copy of Standard Form (SF) 424.1, “Application for Federal Assistance (For Non-construction),” to the Under Secretary. The five States designated by the Under Secretary to participate in the first established time period will be selected from among applications received not later than 60 calendar days from the effective date of this subpart. If a designated State desires to participate in additional time periods, applications are not required to be resubmitted; however, the Governor must notify the Under Secretary, in writing, no later than July 31 of each FY, and the State must submit evidence of eligibility requirements each FY in accordance with § 1940.954 (e)(2) of this subpart. Beginning in FY 1993, applications must be submitted to the Under Secretary no later than July 31 if a State desires to be selected to fill vacancies that occur when designated States do not roll over into another established time period. States should include the following information with SF 424.1: ( 1 ) A narrative signed by the Governor including reasons for State participation in this program and reasons why a project review and ranking process by a State panel will improve the economic and social conditions of rural areas in the State. The narrative will also include the time period(s) for which the State wishes to participate.
( 2 ) A proposal outlining the method for meeting all the following eligibility requirements and the timeframes established for meeting each requirement: ( i ) Establishing a rural economic development review panel in accordance with § 1940.956 of this subpart. When established, the name, title, and address of each proposed member should be included and the chairperson and vice chairperson should be identified.
( ii ) Governor's proposed designation of a State agency to support the State coordinator and the panel. The name, address, and telephone number of the proposed agency's contact person should be included.
( iii ) Governor's proposed selection of a State coordinator in accordance with § 1940.957 of this subpart, including the title, address, and telephone number.
( iv ) Development of area development plans for all areas of the State that are eligible to receive assistance from designated rural development programs.
( v ) The review and evaluation of area development plans by the panel in accordance with § 1940.956 of this subpart.
( vi ) Development of written policy and criteria used by the panel to review and evaluate area plans in accordance with § 1940.956 of this subpart.
( vii ) Development of written policy and criteria the panel will use to evaluate and rank applications in accordance with § 1940.956 of this subpart.
( 3 ) Preparation of a proposed budget that includes 3 years projections of income and expenses associated with panel operations. If funds from other sources are anticipated, sources and amounts should be identified.
( 4 ) Development of a financial management system that will provide for effective control and accountability of all funds and assets associated with the panel.
( 5 ) A schedule to coordinate the submission, review, and ranking process of preapplications/applications in accordance with § 1940.956(a) of this subpart.
( 6 ) Other information provided by the State in support of its application.
( b ) *Selecting States.* The Under Secretary will review the application and other information submitted by the State and designate not more than five States to participate during any established time period.
( c ) *Notification of selection.* ( 1 ) The Under Secretary will notify the Governor of each State whether or not the State has been selected for further consideration in this program. If a State has been selected, the notification will include the additional information that the Governor must submit to the Under Secretary in order for the State to meet eligibility requirements in accordance with paragraph (d) of this section.
( 2 ) A copy of the notification to the Governor will be submitted to the Administrator along with a copy of the State's application and other material submitted in support of the application.
( d ) *Determining State eligibility.* ( 1 ) The Governor will provide the Under Secretary with evidence that the State has complied with the eligibility requirements of paragraph (a)(2) of this section not later than September 1, 1992, for the first established time period and not later than September 1 for each of the remaining established time periods.
( 2 ) The Under Secretary will review the material submitted by the Governor in sufficient detail to determine if a State has complied with all eligibility requirements of this subpart. The panel will not begin reviewing and ranking applications until the Governor has been notified in writing by the Under Secretary that the State has been determined eligible and is designated to participate in this program. A copy of the notification will be sent to the Administrator. The Under Secretary's decision is not appealable.
( e ) *Eligibility requirements.* ( 1 ) With respect to this subpart, the Under Secretary may determine a State to be an eligible State provided all of the following apply not later than October 1 of each FY: ( i ) The State has established a rural economic development review panel that meets the requirements of § 1940.956 of this subpart;
( ii ) The Governor has appointed an officer or employee of the State government to serve as State coordinator to carry out the responsibilities set forth in § 1940.957 of this subpart; and
( iii ) The Governor has designated an agency of the State government to provide the panel and State coordinator with support for the daily operation of the panel.
( 2 ) If a State is determined eligible initially and desires to participate in additional time periods established for this program, the Governor will submit documents and information not later than September 1 of each subsequent FY in sufficient detail for the Under Secretary to determine, prior to the beginning of the additional time period, that the State is still in compliance with all eligibility requirements of this subpart.