Federal Register / Vol. 75, No. 17 / Wednesday, January 27, 2010 / Rules and Regulations 4259 

business record equivalent of any 

supporting documentation for a period 

of five years from the date of 

submission. 

(d) Nondisclosure. (1) A regulated 

entity or entity-affiliated party may not 

disclose to any person that it has 

submitted a report to the Director 

pursuant to this section, unless it has 

first obtained the prior written approval 

of the Director. 

(2) The restriction in paragraph (d)(1) 

of this section does not prohibit a 

regulated entity from— 

(i) Disclosing or reporting such fraud 

or possible fraud pursuant to legal 

requirements, including reporting to 

appropriate law enforcement or other 

governmental authorities; or 

(ii) Taking any legal or business 

action it may deem appropriate, 

including any action involving the party 

or parties connected with the fraud or 

possible fraud. 

(e) No waiver of privilege. A regulated 

entity does not waive any privilege it 

may possess under any applicable law 

as a consequence of reporting fraud or 

possible fraud under this part. 

§ 1233.4 Internal controls, policies, 

procedures, and training. 

(a) In general. Each regulated entity 

shall establish and maintain adequate 

and efficient internal controls, policies, 

procedures, and an operational training 

program to discover and report fraud or 

possible fraud in connection with the 

purchase or sale of any loan or financial 

instrument. 

(b) Examination. The examination by 

FHFA of fraud reporting programs of 

each regulated entity includes an 

evaluation of the effectiveness of the 

internal controls, policies, procedures, 

and operational training program in 

place to minimize risks from fraud and 

to report fraud or possible fraud to 

FHFA in accordance with this 

regulation. 

§ 1233.5 Protection from liability for 

reports. 

As provided by section 1379E of the 

Safety and Soundness Act (12 U.S.C. 

4642(b)), a regulated entity that, in good 

faith, submits a report pursuant to this 

part, and any entity-affiliated party, 

that, in good faith, submits or requires 

a person to submit a report pursuant to 

this part, shall not be liable to any 

person under any provision of law or 

regulation, any constitution, law, or 

regulation of any State or political 

subdivision of any State, or under any 

contract or other legally enforceable 

agreement (including any arbitration 

agreement) for such report, or for any 

failure to provide notice of such report 

to the person who is the subject of such 

report, or any other persons identified 

in the report. 

§ 1233.6 Supervisory action. 

Failure by a regulated entity to 

comply with this part may subject the 

regulated entity or the board members, 

officers, or employees thereof to 

supervisory action by FHFA, including 

but not limited to, cease-and-desist 

proceedings and civil money penalties. 

CHAPTER XVII—OFFICE OF FEDERAL 

HOUSING ENTERPRISE OVERSIGHT, 

DEPARTMENT OF HOUSING AND URBAN 

DEVELOPMENT 

PART 1731—[REMOVED] 

■ 2. Remove part 1731. 

Dated: January 20, 2010. 

Edward J. DeMarco, 

Acting Director, Federal Housing Finance 

Agency. 

[FR Doc. 2010–1641 Filed 1–26–10; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF COMMERCE 

Economic Development Administration 

13 CFR Parts 301, 302, 305, 307, 308, 

313 and 315 

[Docket No. 080213181–91417–02] 

RIN 0610–AA64 

Revisions to the EDA Regulations 

AGENCY: Economic Development 

Administration, Department of 

Commerce. 

ACTION: Final rule. 

SUMMARY: On October 22, 2008, the 

Economic Development Administration 

(‘‘EDA’’) published an interim final rule 

to synchronize its Revolving Loan Fund 

(‘‘RLF’’) regulations with significant 

improvements in the management and 

oversight of its RLF program, including 

the issuance of written guidance that 

provides EDA staff with steps to help 

better ensure grantee compliance with 

RLF requirements. Additionally, the 

interim final rule made changes to 

certain definitions in the Trade 

Adjustment Assistance for Firms 

program regulations provided notice of 

other substantive and non-substantive 

revisions made to EDA’s regulations. 

EDA received a total of two comments 

on the October 22, 2008 interim final 

rule. This final rule responds to all 

substantive comments received during 

the public comment period and finalizes 

this rulemaking proceeding. 

DATES: This final rule is effective as of 

January 27, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Hina Shaikh, Office of Chief Counsel, 

Economic Development Administration, 

Department of Commerce, Room 7005, 

1401 Constitution Avenue, NW., 

Washington, DC 20230; telephone: (202) 

482–4687. 

SUPPLEMENTARY INFORMATION: 

Background 

EDA published an interim final rule 

in the Federal Register (73 FR 62858) on 

October 22, 2008, to amend some of 

EDA’s regulations, namely the Trade 

Adjustment Assistance for Firms 

program (‘‘TAA Program’’) regulations 

and the RLF program regulations. The 

technical revisions to a few of the TAA 

definitions were made to help better 

align EDA’s responsibilities in 

implementing the TAA Program under 

the Trade Act of 1974, as amended (19 

U.S.C. 2341 et seq.). We made a number 

of changes to the RLF regulations in line 

with our commitment to implement the 

Office of Inspector General’s (‘‘OIG’’) 

audit recommendations and to improve 

the administration and effectiveness of 

the RLF program. The revisions to the 

RLF regulations correspond to the 

policy determinations that EDA made in 

response to the OIG’s audit report titled 

Aggressive EDA Leadership and 

Oversight Needed To Correct Persistent 

Problems in the RLF Program (March 

2007). EDA staff highlighted these 

proposed changes at training sessions 

for all EDA RLF Recipients. Among the 

major changes discussed and concluded 

were the switch to a Web-based semiannual reporting form that will 

eliminate redundant and calculable 

fields; the requirement that RLF 

grantees submit updated RLF Plans at 

least once every five years; the pegging 

of the minimum interest rate to 

commercial interest rates in order to 

ensure RLF grantees can lend when 

commercial interest rates are low; and 

simplification of record retention 

requirements. EDA also took into 

consideration the feedback received at 

these training sessions, and as a result, 

eliminated the requirement that 

sequestered funds be kept in a separate 

bank account, as many Recipients 

indicated that there was substantial red 

tape involved in opening a separate 

account. Other changes were nonsubstantive in nature and were made for 

increased clarity. 

Comments Received on October 22, 

2008 Interim Final Rule 

The October 22, 2008 interim final 

rule provided a deadline of December 


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4260 Federal Register / Vol. 75, No. 17 / Wednesday, January 27, 2010 / Rules and Regulations 

22, 2008 for all public comments. On 

December 16, 2008, EDA published a 

notice (73 FR 76194) that extended the 

deadline for comments to January 22, 

2009. EDA received a total of two 

comments on the October 22, 2008 

interim final rule, as set out below: 

1. ‘‘I noticed that in [section] 301.10 

for formal application requirements, 

‘proposals’ are referenced. Now that 

we’re going to use a single application 

format, should this be changed, if there 

is going to be an update of the 

revisions?’’ 

2. ‘‘The intent of the new regulations 

need to be clarified—it is my 

understanding that EDA does not 

require the RLF Grantee to send copies 

of the RLF loan minutes (approval or 

otherwise) or the bank turn-down letters 

to EDA, despite the fact that the October 

22, 2008 regulations state that EDA does 

require such a submission.’’ 

EDA is publishing this final rule to 

respond to all comments received 

during the public comment period on 

all aspects of the interim final rule, and 

to make additional revisions to EDA’s 

regulations to facilitate effective 

administration of its programs. 

Capitalized terms used but not 

otherwise defined in this final rule have 

the meanings ascribed to them in EDA’s 

regulations (see, e.g., 13 CFR 300.3, 

303.2, 307.8 and 314.1). Specifically, 

this final rule makes the following 

revisions to the October 22, 2008 

interim final rule and to EDA’s 

regulations codified at 13 CFR chapter 

III: 

Part 301—Eligibility, Investment Rate 

and Application Requirements 

Part 301 of the regulations sets forth 

eligibility, maximum allowable 

Investment Rate levels, and application 

requirements common to all Public 

Works and Economic Development Act 

(‘‘PWEDA’’)-enumerated programs 

(excluding the Community Trade 

Adjustment Assistance Program 

(‘‘Community TAA Program’’) and TAA 

Program regulations at parts 313 and 

315, respectively). In general, subpart A 

presents an overview of eligibility 

requirements, subpart B addresses 

applicant eligibility, subpart C 

addresses Regional economic distress 

level requirements, subpart D sets forth 

the maximum allowable Investment 

Rates and corresponding Matching 

Share requirements for various Projects, 

and subpart E addresses the application 

requirements, as well as the evaluation 

criteria used by EDA in selecting 

Projects. 

The October 22, 2008 interim final 

rule revised § 301.4(b)(4) to be more 

parallel in structure and content to 

section 207 of PWEDA; however, the 

statutory reference cited in the 

regulation was inadvertently incorrect. 

The correct statutory reference is section 

204(c)(3) of PWEDA. This final rule 

makes this revision. 

EDA received the following comment 

on § 301.10: ‘‘I noticed that in 301.10 for 

formal application requirements, 

‘proposals’ are referenced. Now that 

we’re going to use a single application 

format, should this be changed, if there 

is going to be an update of the 

revisions?’’ On October 1, 2008, EDA 

published a notice in the Federal 

Register (73 FR 57049) to introduce its 

new Application for Investment 

Assistance (Form ED–900). Previously, 

applicants were required to complete 

and submit a Pre-Application for 

Investment Assistance (Form ED–900P), 

followed by an Application for 

Investment Assistance (Form ED–900A), 

if EDA deemed that the proposed 

project merited further consideration. 

The Form ED–900 consolidates all EDAspecific requirements into a single 

application form. The notice provided a 

one-month period to completely phasein the use of the new Form ED–900. 

Accordingly, effective November 1, 

2008, EDA accepts only the Form ED– 

900, along with specific forms and 

attachments from the Standard Form 

(‘‘SF’’) 424 family. 

In line with the October 1, 2008 

publication, this final rule removes all 

references to the Form ED–900P in 

EDA’s regulations. Accordingly, the 

words ‘‘Proposal and’’ are removed in 

the title of part 301 and subpart E of part 

301. The title of § 301.7 is revised from 

‘‘Investment Assistance proposal’’ to 

‘‘Investment Assistance application.’’ 

Paragraph (a) in § 301.7 is revised to 

remove all references to the words 

‘‘proposal,’’ ‘‘Pre-application,’’ 

‘‘proponent’’ and ‘‘Form ED–900,’’ and 

subparagraph (1) is removed because it 

is no longer applicable. Section 301.7(b) 

also is made inapplicable with the 

introduction of Form ED–900 and is 

replaced with the following: ‘‘PWEDA 

does not require nor does EDA provide 

an appeals process for denial of 

applications or EDA Investment 

Assistance.’’ This provision reflects 

long-standing EDA policy. The policy is 

being placed in the regulations because 

EDA received an inquiry from an 

applicant regarding our appeals process 

upon denial of an application; this 

provision serves to clarify our 

administrative policy regarding denial 

of Investment Assistance. 

This final rule revises the title of 

§ 301.8 to change it from ‘‘Proposal 

evaluation criteria’’ to ‘‘Application 

evaluation criteria.’’ The words 

‘‘proposals’’ and ‘‘proponent’’ are 

replaced with ‘‘applications’’ and 

‘‘applicant.’’ In paragraph (a), the phrase 

‘‘, such as EDA’s Balanced Scorecard or 

other performance matrix’’ is deleted 

because EDA does not believe it is 

necessary to specify a particular type of 

performance metric at this time. Similar 

to the changes made in § 301.8, the title 

of § 301.9 is changed from ‘‘Proposal 

selection criteria’’ to ‘‘Application 

selection criteria,’’ and all references to 

‘‘proposal’’ and ‘‘proponent’’ are changed 

to ‘‘application’’ and ‘‘applicant.’’ 

In § 301.10, this final rule removes 

paragraph (a) in its entirety because it is 

no longer applicable with the 

introduction of the single application on 

Form ED–900. Accordingly, the subheading ‘‘Formal application’’ of 

paragraph (b) is removed and 

paragraphs (1)–(3) thereunder are 

renumbered as (a), (b) and (c), for 

stylistic consistency with the rest of the 

regulations. Paragraphs (i) and (ii) under 

paragraph (3) are renumbered as (1) and 

(2), respectively. 

Part 302—General Terms and 

Conditions for Investment Assistance 

Part 302 sets forth the general terms 

and conditions for EDA Investment 

Assistance. This part applies to all 

Investments under PWEDA (certain 

provisions, such as § 302.5, also apply 

to the TAA Program under the Trade 

Act (see part 315)), and covers a variety 

of EDA requirements for Investment 

Assistance, including environmental 

reviews of Projects, relocation assistance 

and land acquisition requirements, 

inter-governmental review of Projects, 

and Recipients’ reporting, recordkeeping, post-approval and civil rights 

requirements. For consistency with the 

change made in § 301.8, this final rule 

removes the phrase ‘‘, such as the EDA 

Balanced Scorecard or other system’’ 

from § 302.16(b). 

In § 302.20(a)(2), we discovered that 

the reference to ‘‘15 CFR 8.7 through 

8.15’’ as the Department’s implementing 

regulations for proscribing 

discrimination on the basis of sex in 

education programs or activities 

receiving federal financial assistance is 

incorrect. This final rule changes ‘‘15 

CFR 8.7 through 8.15’’ to the correct 

citation which is ‘‘15 CFR part 8a.’’ 

Part 305—Public Works and Economic 

Development Investments 

Part 305 describes general information 

about the scope of EDA’s Public Works 

program, award and application 

requirements, and provisions for EDA’s 

and Recipients’ duties. This final rule 

makes one edit in this part for 

consistency with the revisions made in 


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Federal Register / Vol. 75, No. 17 / Wednesday, January 27, 2010 / Rules and Regulations 4261 

part 301 and elsewhere in 13 CFR 

chapter III for the change from 

‘‘proposal’’ to ‘‘application’’ due to the 

single application on Form ED–900. 

Accordingly, in § 305.3(a)(4), the word 

‘‘proposal’’ is replaced with 

‘‘application.’’ 

Part 307—Economic Adjustment 

Assistance Investments 

EDA re-examined part 307 of its 

regulations after publication of the 

October 22, 2008 interim final rule to 

allow for consideration of matters 

pertaining to the effective 

implementation of the interim final rule. 

This final rule makes specific revisions 

to help better manage and administer 

the RLF program in accordance with the 

OIG’s recommendations. The changes 

are described below. 

In § 307.4(b), the word ‘‘proposals’’ is 

changed to ‘‘applications.’’ Similarly, in 

§ 307.4(c)(1) and (2), the word 

‘‘proposals’’ is replaced with 

‘‘applications.’’ In the definition of RLF 

Third Party in § 307.8, the word 

‘‘proposals’’ is replaced with 

‘‘applications’’ and ‘‘and/or’’ is replaced 

with ‘‘or.’’ This final rule also revises the 

definition of ‘‘RLF Capital’’ for clarity 

and better understanding. The 

definition is revised to refer to EDA 

grant funds plus Matching Share plus 

RLF Income, less any amount used for 

reasonable administrative expenses and 

any amount of loan principal written 

off. 

This final rule adds an additional 

requirement for the Recipient’s RLF 

Plan in § 307.9(a)(2), to ensure that the 

Plan is consistent with EDA’s conflictsof-interest rules set out in § 302.17. This 

revision is consistent with the change 

EDA has made to its RLF Standard 

Terms and Conditions, which are 

included in every RLF Grant. 

EDA program staff discovered that 

paragraph (a)(1) of § 307.11 does not 

actually explain the evidence EDA will 

need to see in order to determine 

whether the RLF Recipient has adequate 

fidelity bond coverage. In order to 

clarify what adequate fidelity bond 

coverage is, EDA determined the 

amount of cash at risk for which fidelity 

insurance should be obtained is the 

amount of cash readily available to the 

RLF Recipient, which is generally the 

greater of 25 percent of the RLF Capital 

base, or the maximum loan amount 

identified in the Recipient’s EDAapproved RLF Plan. Accordingly, this 

final rule adds the following sentence 

immediately after the first sentence in 

§ 307.11(a)(1): ‘‘At a minimum, the 

amount of coverage shall be the greater 

of (i) the maximum loan amount 

allowed for in the EDA-approved RLF 

Plan, or (ii) 25 percent of the RLF 

Capital base.’’ 

This final rule also revises paragraph 

(d) of § 307.11 for clarity to read as 

follows: ‘‘Interest-bearing Account. All 

grant funds disbursed by EDA to the 

RLF Recipient for loan obligations 

incurred but not yet disbursed to an 

eligible RLF borrower must be deposited 

and held in an interest-bearing account 

(an ‘‘EDA funds account’’) by the 

Recipient until an RLF loan is made to 

a borrower.’’ This revision does not 

change current practice and is made for 

increased clarity only. 

In § 307.14(a), this final rule removes 

the phrase ‘‘(Form ED–209 or any 

successor form)’’ in order to help 

accommodate the launch and operation 

of EDA’s new automated reporting 

system some time this year. 

The October 22, 2008 interim final 

rule moved the reference to a signed 

bank turn-down letter from § 307.17(c) 

to the loan documentation requirements 

listed in § 307.15(b)(2). We received a 

comment in connection with 

§ 307.15(b)(2)(viii), which states, ‘‘EDA 

will accept alternate documentation [to 

a signed bank turn-down letter] only if 

such documentation is allowed in the 

RLF Recipient’s EDA-approved RLF 

Plan.’’ [Emphasis added.] This wording 

is incorrect in that EDA would not 

accept the signed bank turn-down letter, 

board of directors’ meeting minutes 

approving an RLF loan, or any such 

alternate documentation. Rather, the 

RLF Recipient would accept it for 

review and consideration and keep it in 

its loan files where EDA or an auditor 

can review such documentation if 

desired [emphasis added]. Accordingly, 

the second sentence in 

§ 307.15(b)(2)(viii) is revised to insert 

the phrase ‘‘permit the RLF Recipient to’’ 

immediately after the word ‘‘will’’. 

In § 307.15(d)(1), this final rule 

removes the words ‘‘prior to’’ in the third 

sentence to clarify that RLF operators 

may count as private leveraging any 

funds invested from private sources 

within 12 months before or after the 

RLF loan is made, rather than just 12 

months before the loan is made. Private 

leveraging is included for a 12-month 

period both prior to and after the RLF 

loan closing because a borrower submits 

applications to financial institutions as 

well as to the RLF Recipient for 

financing assistance as the needs of the 

business are identified. The 

conventional lender may close the loan 

either before or after the RLF loan is 

closed, but every loan approved during 

the 12-month period is clearly part of 

the total financial needs of the borrower. 

The Generally Accepted Accounting 

Principles (‘‘GAAP’’) define ‘‘current’’ as 

a 12-month period. Therefore, the 12- 

month period prior and after the RLF 

loan closing reflects the total current 

financing leveraged by the borrower. 

For consistency throughout part 307 

and with the title of § 307.16(c), this 

final rule changes all references to 

‘‘capital utilization percentage’’ or 

‘‘applicable capital utilization 

percentage’’ to ‘‘capital utilization 

standard.’’ The phrases ‘‘capital 

utilization percentage’’ and ‘‘applicable 

capital utilization percentage’’ appear in 

paragraphs (c)(1)(i), (c)(2), (c)(2)(i) and 

(c)(2)(ii) of § 307.16. All such phrases 

are replaced with ‘‘capital utilization 

standard.’’ 

To facilitate better monitoring of RLF 

Capital and to ensure that RLF Capital 

is used for making RLF loans that are 

consistent with the RLF Plan or such 

other purposes approved by EDA, the 

October 22, 2008 interim final rule 

added a new paragraph (c) to § 307.17 

to allow EDA to task an independent 

third party with conducting a 

compliance and loan quality review of 

the RLF Grant every three years. The 

RLF Recipient may undertake this 

review as an administrative cost 

associated with the RLF’s operations, 

provided the requirements set out in 

§ 307.12 regarding RLF Income are 

satisfied. The wording of the first 

sentence in § 307.17(c) inadvertently 

used the word ‘‘shall’’ in the phrase 

‘‘EDA shall require an independent third 

party to conduct a compliance and loan 

quality review for the RLF Grant every 

(3) three years,’’ when the intention was 

to give EDA the ability to require a 

compliance and loan quality review. 

This final rule changes the word ‘‘shall’’ 

to ‘‘may’’ and revises the phrase ‘‘(3) 

three years’’ to ‘‘three (3) years’’ so that 

the Arabic numeral appears after the 

word ‘‘three.’’ 

Section 307.21 sets out the process for 

termination of RLF awards. In an effort 

to ensure strong recipient compliance 

with RLF reporting and efficient capital 

utilization, the October 22, 2008 interim 

final rule revised § 307.21(a) to include 

additional grounds for which EDA may 

suspend or terminate an RLF Grant for 

cause. One of these grounds, set out in 

§ 307.21(a)(1)(viii), is the RLF 

Recipient’s failure to comply with the 

audit requirements set out in OMB 

Circular A–133 and the related 

Compliance Supplement. This final rule 

adds an important reference to the 

Schedule of Expenditure of Federal 

Awards, which auditors are required to 

complete in accordance with OMB 

Circular A–133. Accordingly, the 

phrase, ‘‘including reference to the 

correctly valued EDA RLF federal 

expenditures in the Schedule of 


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4262 Federal Register / Vol. 75, No. 17 / Wednesday, January 27, 2010 / Rules and Regulations 

Expenditures of Federal Awards 

(‘‘SEFA’’),’’ is placed immediately after 

‘‘Supplement,’’ in § 307.21(a)(1)(viii). 

In the third sentence of § 307.21(b), to 

ensure that the text is clearer and more 

concise, this final rule replaces the 

phrase, ‘‘a portion of RLF property that 

EDA determines is attributable to RLF 

Income’’ with ‘‘the RLF Recipient’s share 

of RLF Income (or program income) 

generated by the RLF.’’ 

For consistency with the changes 

made in part 301 to remove all 

references to the word ‘‘proposal,’’ in 

paragraph (b)(4) of § 308.2, this final 

rule changes ‘‘proposal’’ to ‘‘application.’’ 

In addition, with respect to the 

Community TAA Program, we amend 

§ 313.4(a)(2) to correct the erroneous 

wording of ‘‘The Community submits 

the petition at least 180 days after the 

date of the most recent Cognizable 

Certification.’’ Section 313.4(a)(2) shall 

read as ‘‘The Community submits the 

petition no later than 180 days after the 

date of the most recent Cognizable 

Certification’’, to track section 273 of 

chapter 4 of the Trade Act, as amended 

by the Trade and Globalization 

Adjustment Assistance Act of 2009 

(emphasis added). See Subtitle I (letter 

‘I’) of Title I of Division B of Pub. L. No. 

111–5, 123 Stat. 367, at 396–436. 

In § 315.7(b)(5)(iii), this final rule 

corrects the inadvertent italicization of 

the phrase ‘‘production or supply of 

services’’. 

Classification 

Prior notice and opportunity for 

public comment are not required for 

rules concerning public property, loans, 

grants, benefits, and contracts (5 U.S.C. 

553(a)(2)). Because prior notice and an 

opportunity for public comment are not 

required pursuant to 5 U.S.C. 553, or 

any other law, the analytical 

requirements of the Regulatory 

Flexibility Act (5 U.S.C. 601 et seq.) are 

inapplicable. Therefore, a regulatory 

flexibility analysis has not been 

prepared. 

Executive Order No. 12866 

It has been determined that this final 

rule is significant for purposes of 

Executive Order 12866. 

Congressional Review Act 

This final rule is not major under the 

Congressional Review Act (5 U.S.C. 801 

et seq.) 

Executive Order No. 13132 

Executive Order 13132 requires 

agencies to develop an accountable 

process to ensure ‘‘meaningful and 

timely input by State and local officials 

in the development of regulatory 

policies that have federalism 

implications.’’ ‘‘Policies that have 

federalism implications’’ is defined in 

Executive Order 13132 to include 

regulations that have ‘‘substantial direct 

effects on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government.’’ It has 

been determined that this final rule does 

not contain policies that have 

federalism implications. 

Paperwork Reduction Act 

This final rule contains collections-ofinformation subject to review and 

approval by OMB under the Paperwork 

Reduction Act (‘‘PRA’’). The OMB is 

required to clear all federally-sponsored 

data collections pursuant to the PRA. 

Notwithstanding any other provision of 

the law, no person is required to 

respond to, nor shall any person be 

subject to a penalty for failure to comply 

with, a collection-of-information subject 

to the requirements of the PRA, unless 

that collection-of-information displays a 

currently valid OMB control number. 

List of Subjects 

13 CFR Part 301 

Grant administration, Grant programs, 

Eligibility requirements, Applicant and 

application requirements, Economic 

distress levels, Investment rates. 

13 CFR Part 302 

Environmental review, Federal policy 

and procedures, Inter-governmental 

review, Fees, Pre-approval 

requirements, Project administration, 

Reporting and audit requirements, 

Conflicts-of-interest, Post-approval 

requirements, Civil rights. 

13 CFR Part 305 

Public works, Economic development, 

Award and application requirements, 

Requirements for approved projects. 

13 CFR Part 307 

Economic adjustment assistance, 

Award and application requirements, 

Revolving loan fund, Pre-loan 

requirements, Merger, Income, Record 

and reporting requirements, Sales and 

securitizations, Liquidation, 

Termination. 

13 CFR Part 308 

Performance awards, Planning 

performance awards. 

13 CFR Part 313 

Trade adjustment assistance for 

communities, Impacted community, 

Petition and affirmative determination 

requirements, Strategic plan, 

Implementation grant. 

13 CFR Part 315 

Administrative practice and 

procedure, Trade adjustment assistance, 

Eligible petitioner, Firm selection, 

Certification requirements, 

Recordkeeping and audit requirements, 

Adjustment proposals. 

Regulatory Text 

■ For reasons stated in the preamble, 

this final rule amends title 13, chapter 

III of the Code of Federal Regulations as 

follows: 

PART 301—ELIGIBILITY, INVESTMENT 

RATE AND APPLICATION 

REQUIREMENTS 

■ 1. The authority citation for part 301 

continues to read as follows: 

Authority: 42 U.S.C. 3121; 42 U.S.C. 

3141–3147; 42 U.S.C. 3149; 42 U.S.C. 3161; 

42 U.S.C. 3175; 42 U.S.C. 3192; 42 U.S.C. 

3194; 42 U.S.C. 3211; 42 U.S.C. 3233; 

Department of Commerce Delegation Order 

10–4. 

■ 2. Revise the heading to part 301 to 

read as set forth above. 

■ 3. Revise paragraph (b)(4) of § 301.4 to 

read as follows: 

§ 301.4 Investment rates. 

* * * * * 

(b) * * * 

(4) Projects under part 306. Except as 

otherwise provided in paragraph (b)(5) 

of this section, the maximum allowable 

Investment Rate for Projects under part 

306 of this chapter shall generally be 

determined based on the relative needs 

(as determined under paragraph (b)(1) of 

this section) of the Region which the 

Project will serve. As specified in 

section 204(c)(3) of PWEDA, the 

Assistant Secretary has the discretion to 

establish a maximum Investment Rate of 

up to one hundred (100) percent where 

the Project: 

(i) Merits, and is not otherwise 

feasible without, an increase to the 

Investment Rate; or 

(ii) Will be of no or only incidental 

benefit to the Eligible Recipient. 

* * * * * 

Subpart E—Application Requirements; 

Evaluation Criteria 

■ 4. Revise § 301.7 to read as follows: 

§ 301.7 Investment Assistance application. 

(a) The EDA Investment Assistance 

process begins with the submission of 

an Investment Assistance application. 

The Application for Investment 

Assistance (Form ED–900 or any 


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successor form) may be obtained from 

EDA’s Internet Web site at http:// 

www.eda.gov or from the appropriate 

regional office. EDA generally accepts 

applications on a competitive and 

continuing basis to respond to market 

forces in Regional economies. The 

timing with which competitive 

investment opportunities arise, as 

determined by the criteria set forth in 

§ 301.8, paired with the availability of 

funds in a given fiscal year, will affect 

EDA’s ability to participate in any given 

Project. EDA will evaluate all 

applications using the criteria set forth 

in § 301.8 and will: 

(1) Return the application to the 

applicant for specified deficiencies and 

suggest resubmission upon corrections; 

or 

(2) Deny the application for 

specifically stated reasons and notify 

the applicant. 

(b) PWEDA does not require nor does 

EDA provide an appeals process for 

denial of applications or EDA 

Investment Assistance. 

■ 5. Revise § 301.8 to read as follows: 

§ 301.8 Application evaluation criteria. 

EDA will screen all applications for 

the feasibility of the budget presented 

and conformance with EDA statutory 

and regulatory requirements. EDA will 

assess the economic development needs 

of the affected Region in which the 

proposed Project will be located (or will 

service), as well as the capability of the 

applicant to implement the proposed 

Project. EDA also will consider the 

degree to which an Investment in the 

proposed Project will satisfy one (1) or 

more of the following criteria: 

(a) Is market-based and results driven. 

An Investment will capitalize on a 

Region’s competitive strengths and will 

positively move a Regional economic 

indicator measured and evaluated by 

EDA on a performance matrix system. 

These Regional economic indicators 

include measures such as an increased 

number of higher-skill, higher-wage 

jobs, increased tax revenue, or increased 

private sector investment resulting from 

an Investment. 

(b) Has strong organizational 

leadership. An Investment will have 

strong leadership, relevant Project 

management experience and a 

significant commitment of human 

resources talent to ensure a Project’s 

successful execution. 

(c) Advances productivity, innovation 

and entrepreneurship. An Investment 

will embrace the principles of 

entrepreneurship, enhance Regional 

industry clusters and leverage and link 

technology innovators and local 

universities to the private sector to 

create the conditions for greater 

productivity, innovation, and job 

creation. 

(d) Looks beyond the immediate 

economic horizon, anticipates economic 

changes and diversifies the local and 

Regional economy. An Investment will 

be part of an overarching, long-term 

Comprehensive Economic Development 

Strategy that enhances a Region’s 

success in achieving a rising standard of 

living by supporting existing industry 

clusters, developing emerging new 

clusters or attracting new Regional 

economic drivers. 

(e) Demonstrates a high degree of 

local commitment. An Investment will 

exhibit: 

(1) High levels of local government or 

non-profit Matching Share and private 

sector leverage; 

(2) Clear and unified leadership and 

support by local elected officials; and 

(3) Strong cooperation among the 

business sector, relevant Regional 

partners and Federal, State and local 

governments. 

(f) Other criteria as set forth in the 

applicable FFO. 

■ 6. Revise § 301.9 to read as follows: 

§ 301.9 Application selection criteria. 

(a) EDA will review completed 

application materials for compliance 

with the requirements set forth in 

PWEDA, this chapter, the applicable 

FFO and other applicable federal 

statutes and regulations. From those 

applications that meet EDA’s technical 

and legal requirements, EDA will select 

applications for further consideration 

based on the: 

(1) Availability of funds; 

(2) Competitiveness of the 

applications based on the criteria set 

forth in § 301.8; and 

(3) Funding priority considerations 

identified in the applicable FFO. 

(b) EDA will endeavor to notify 

applicants regarding whether their 

applications are selected as soon as 

practicable. 

■ 7. Revise § 301.10 to read as follows: 

§ 301.10 Formal application requirements. 

Each formal application for EDA 

Investment Assistance must: 

(a) Include evidence of applicant 

eligibility (as set forth in § 301.2) and of 

economic distress (as set forth in 

§ 301.3); 

(b) Identify the sources of funds, both 

eligible federal and non-EDA, and InKind Contributions that will constitute 

the required Matching Share for the 

Project (see the Matching Share 

requirements under § 301.5); and 

(c) For construction Projects under 

parts 305 or 307 of this chapter, include 

a CEDS acceptable to EDA pursuant to 

part 303 of this chapter or otherwise 

incorporate by reference a current CEDS 

that EDA approves for the Project. The 

requirements of the preceding sentence 

shall not apply to: 

(1) Strategy Grants, as defined in 

§ 307.3 of this chapter; and 

(2) Projects located in a Region 

designated as a Special Impact Area 

pursuant to part 310 of this chapter. 

PART 302—GENERAL TERMS AND 

CONDITIONS FOR INVESTMENT 

ASSISTANCE 

■ 8. The authority citation for part 302 

continues to read as follows: 

Authority: 19 U.S.C. 2341 et seq.; 42 

U.S.C. 3150; 42 U.S.C. 3152; 42 U.S.C. 3153; 

42 U.S.C. 3192; 42 U.S.C. 3193; 42 U.S.C. 

3194; 42 U.S.C. 3211; 42 U.S.C. 3212; 42 

U.S.C. 3216; 42 U.S.C. 3218; 42 U.S.C. 3220; 

42 U.S.C. 5141; Department of Commerce 

Delegation Order 10–4. 

■ 9. Revise paragraph (b) of § 302.16 to 

read as follows: 

§ 302.16 Reports by Recipients. 

* * * * * 

(b) Each report must contain a dataspecific evaluation of the effectiveness 

of the Investment Assistance provided 

in fulfilling the Project’s purpose 

(including alleviation of economic 

distress) and in meeting the objectives 

of PWEDA. Data used by a Recipient in 

preparing reports shall be accurate and 

verifiable as determined by EDA, and 

from independent sources (whenever 

possible). EDA will use this data and 

report to fulfill its performance 

measurement reporting requirements 

under the Government Performance and 

Results Act of 1993 and to monitor 

internal, Investment and Project 

performance through an internal 

performance measurement system. 

* * * * * 

■ 10. Revise paragraph (a)(2) of § 302.20 

to read as follows: 

§ 302.20 Civil rights. 

(a) * * * 

(2) 42 U.S.C. 3123 (proscribing 

discrimination on the basis of sex in 

Investment Assistance provided under 

PWEDA) and 42 U.S.C. 6709 

(proscribing discrimination on the basis 

of sex under the Local Public Works 

Program), and the Department’s 

implementing regulations found at 15 

CFR part 8a; 

* * * * * 


hsrobinson on DSK69SOYB1PROD with RULES
4264 Federal Register / Vol. 75, No. 17 / Wednesday, January 27, 2010 / Rules and Regulations 

PART 305—PUBLIC WORKS AND 

ECONOMIC DEVELOPMENT 

INVESTMENTS 

■ 11. The authority citation for part 305 

continues to read as follows: 

Authority: 42 U.S.C. 3211; 42 U.S.C. 3141; 

Department of Commerce Organization Order 

10–4. 

■ 12. Revise paragraph (a)(4) of § 305.3 

to read as follows: 

§ 305.3 Application requirements. 

(a) * * * 

(4) Demonstrate how the proposed 

Project meets the application evaluation 

criteria set forth in § 301.8 of this 

chapter. 

* * * * * 

PART 307—ECONOMIC ADJUSTMENT 

ASSISTANCE INVESTMENTS 

■ 13. The authority citation for part 307 

continues to read as follows: 

Authority: 42 U.S.C. 3211; 42 U.S.C. 3149; 

42 U.S.C. 3161; 42 U.S.C. 3162; 42 U.S.C. 

3233; Department of Commerce Organization 

Order 10–4. 

■ 14. Revise paragraphs (b), (c)(1) and 

(c)(2) of § 307.4 to read as follows: 

§ 307.4 Award requirements. 

* * * * * 

(b) Strategy Grants. EDA will review 

Strategy Grant applications to ensure 

that the proposed activities conform to 

the CEDS requirements set forth in 

§ 303.7 of this chapter. 

(c) * * * 

(1) EDA will review Implementation 

Grant applications for the extent to 

which the: 

(i) Applicable CEDS meets the 

requirements in § 303.7 of this chapter; 

and 

(ii) Proposed Project is identified as a 

necessary element of or consistent with 

the applicable CEDS. 

(2) Revolving Loan Fund Grants. For 

Eligible Applicants seeking to capitalize 

or recapitalize an RLF, EDA will review 

applications for the: 

(i) Need for a new or expanded public 

financing tool to enhance other business 

assistance programs and services 

targeting economic sectors and locations 

described in the CEDS; 

(ii) Types of financing activities 

anticipated; and 

(iii) Capacity of the RLF organization 

to manage lending activities, create 

networks between the business 

community and other financial 

providers, and implement the CEDS. 

* * * * * 

■ 15. In § 307.8, revise the definitions of 

RLF Capital and RLF Third Party to read 

as follows: 

§ 307.8 Definitions. 

* * * * * 

RLF Capital means Grant funds plus 

Local Share plus RLF Income, less any 

amount used for eligible and reasonable 

costs necessary to administer the RLF 

and any amount of loan principal 

written off. 

* * * * * 

RLF Third Party, for purposes of this 

subpart B only, means an Eligible 

Recipient or for-profit entity selected by 

EDA through a request for applications 

or Cooperative Agreement to facilitate or 

manage the intended liquidation of an 

RLF. 

* * * * * 

■ 16. Revise paragraph (a)(2) of § 307.9 

to read as follows: 

§ 307.9 Revolving Loan Fund Plan. 

* * * * * 

(a) * * * 

(2) Part II of the Plan titled 

‘‘Operational Procedures’’ must serve as 

the RLF Recipient’s internal operating 

manual and set out administrative 

procedures for operating the RLF 

consistent with ‘‘Prudent Lending 

Practices,’’ as defined in § 307.8, and 

EDA’s conflicts of interest rules set out 

in § 302.17 of this chapter. 

* * * * * 

■ 17. Revise paragraphs (a)(1) and (d) of 

§ 307.11 to read as follows: 

§ 307.11 Disbursement of funds to 

Revolving Loan Funds. 

(a) * * * 

(1) Evidence of fidelity bond coverage 

for persons authorized to handle funds 

under the Grant award in an amount 

sufficient to protect the interests of EDA 

and the RLF. At a minimum, the amount 

of coverage shall be the greater of the 

maximum loan amount allowed for in 

the EDA-approved RLF Plan, or 25 

percent of the RLF Capital base. Such 

insurance coverage must exist at all 

times during the duration of the RLF’s 

operation; and 

* * * * * 

(d) Interest-bearing Account. All grant 

funds disbursed by EDA to the RLF 

Recipient for loan obligations incurred 

but not yet disbursed to an eligible RLF 

borrower must be deposited and held in 

an interest-bearing account (an ‘‘EDA 

funds account’’) by the Recipient until 

an RLF loan is made to a borrower. 

* * * * * 

■ 18. Revise paragraph (a) of § 307.14 to 

read as follows: 

§ 307.14 Revolving Loan Fund semiannual report and Income and Expense 

Statement. 

(a) Frequency of reports. All RLF 

Recipients, including those receiving 

Recapitalization Grants for existing 

RLFs, must complete and submit a semiannual report in electronic format, 

unless EDA approves a paper 

submission. 

* * * * * 

■ 19. Revise paragraphs (b)(2)(viii) and 

(d)(1) of § 307.15 to read as follows: 

§ 307.15 Prudent management of 

Revolving Loan Funds. 

* * * * * 

(b) * * * 

(2) * * * 

(viii) Signed bank turn-down letter 

demonstrating that credit is not 

otherwise available on terms and 

conditions that permit the completion 

or successful operation of the activity to 

be financed. EDA will permit the RLF 

Recipient to accept alternate 

documentation only if such 

documentation is allowed in the 

Recipient’s EDA-approved RLF Plan. 

(d) * * * 

(1) RLF loans must leverage private 

investment of at least two dollars for 

every one dollar of such RLF loans. This 

leveraging requirement applies to the 

RLF portfolio as a whole rather than to 

individual loans and is effective for the 

duration of the RLF’s operation. To be 

classified as leveraged, private 

investment must be made within twelve 

(12) months of approval of an RLF loan, 

as part of the same business 

development project, and may include: 

(i) Capital invested by the borrower or 

others; 

(ii) Financing from private entities; or 

(iii) The non-guaranteed portions and 

ninety (90) percent of the guaranteed 

portions of the U.S. Small Business 

Administration’s 7(A) loans and 504 

debenture loans. 

* * * * * 

■ 20. Revise paragraph (c) of § 307.16 to 

read as follows: 

§ 307.16 Effective utilization of Revolving 

Loan Funds. 

* * * * * 

(c) Capital utilization standard. (1) 

During the Revolving Phase, RLF 

Recipients must manage their 

repayment and lending schedules to 

provide that at all times at least seventyfive (75) percent of the RLF Capital is 

loaned or committed. The following 

exceptions apply: 

(i) An RLF Recipient that anticipates 

making large loans relative to the size of 

its RLF Capital base may propose a Plan 

that provides for maintaining a capital 


hsrobinson on DSK69SOYB1PROD with RULES
Federal Register / Vol. 75, No. 17 / Wednesday, January 27, 2010 / Rules and Regulations 4265 

utilization standard greater than twentyfive (25) percent; and 

(ii) EDA may require an RLF 

Recipient with an RLF Capital base in 

excess of $4 million to adopt a Plan that 

maintains a proportionately higher 

percentage of its funds loaned. 

(2) When the percentage of loaned 

RLF Capital falls below the capital 

utilization standard, the dollar amount 

of the RLF funds equivalent to the 

difference between the actual 

percentage of RLF Capital loaned and 

the capital utilization standard is 

referred to as ‘‘excess funds.’’ 

(i) Sequestration of excess funds. If 

the RLF Recipient fails to satisfy the 

capital utilization standard for two (2) 

consecutive Reporting Periods, EDA 

may require the RLF Recipient to 

deposit excess funds in an interestbearing account. The portion of interest 

earned on the account holding excess 

funds attributable to the Federal Share 

(as defined in § 314.5 of this chapter) of 

the RLF Grant shall be remitted to the 

U.S. Treasury. The RLF Recipient must 

obtain EDA’s written authorization to 

withdraw any sequestered funds. 

(ii) Persistent non-compliance. An 

RLF Recipient will generally be allowed 

a reasonable period of time to lend 

excess funds and achieve the capital 

utilization standard. However, if an RLF 

Recipient fails to achieve the capital 

utilization standard after a reasonable 

period of time, as determined by EDA, 

it may be subject to sanctions such as 

suspension or termination. 

* * * * * 

■ 21. Revise paragraph (c) of § 307.17 to 

read as follows: 

§ 307.17 Uses of capital. 

* * * * * 

(c) Compliance and Loan Quality 

Review. To ensure that the RLF 

Recipient makes eligible RLF loans 

consistent with its RLF Plan or such 

other purposes approved by EDA, EDA 

may require an independent third party 

to conduct a compliance and loan 

quality review for the RLF Grant every 

three (3) years. The RLF Recipient may 

undertake this review as an 

administrative cost associated with the 

RLF’s operations provided the 

requirements set forth in § 307.12 are 

satisfied. 

* * * * * 

■ 22. Revise paragraphs (a)(1)(viii) and 

(b) of § 307.21 to read as follows: 

§ 307.21 Termination of Revolving Loan 

Funds. 

(a)(1) * * * 

(viiii) Comply with the audit 

requirements set forth in OMB Circular 

A–133 and the related Compliance 

Supplement, including reference to the 

correctly valued EDA RLF federal 

expenditures in the Schedule of 

Expenditures of Federal Awards 

(‘‘SEFA’’), timely submission of audit 

reports to the Federal Audit 

Clearinghouse and the correct 

designation of the RLF as a ‘‘major 

program’’ (as that term is defined in 

OMB Circular A–133); 

* * * * * 

(b) EDA may approve a request from 

an RLF Recipient to terminate an RLF 

Grant. The RLF Recipient must 

compensate the Federal government for 

the Federal Share of the RLF property, 

including the current value of all 

outstanding RLF loans. However, with 

EDA’s prior approval, upon a showing 

of compelling circumstances, the RLF 

Recipient may retain and use for other 

economic development activities the 

RLF Recipient’s share of RLF Income (or 

program income) generated by the RLF. 

* * * * * 

PART 308—PERFORMANCE 

INCENTIVES 

■ 23. The authority citation for part 308 

continues to read as follows: 

Authority: 42 U.S.C. 3151; 42 U.S.C. 3154a; 

42 U.S.C. 3154b; Department of Commerce 

Delegation Order 10–4. 

■ 24. Revise paragraph (b)(4) of § 308.2 

to read as follows: 

§ 308.2 Performance awards. 

* * * * * 

(b) * * * 

(4) Fulfill the application evaluation 

criteria set forth in § 301.8 of this 

chapter; or 

* * * * * 

PART 313—COMMUNITY TRADE 

ADJUSTMENT ASSISTANCE 

■ 25. The authority citation for part 313 

continues to read as follows: 

Authority: 19 U.S.C. 2341 et seq., as 

amended by Division B, Title I, Subtitle I, 

Part II of Pub. L. No. 111–5; 42 U.S.C. 3211; 

Department of Commerce Organizational 

Order 10–4. 

■ 26. Revise paragraph (a)(2) of § 313.4 

to read as follows: 

§ 313.4 Affirmative determinations. 

(a) * * * 

(2) The Community submits the 

petition no later than 180 days after the 

date of the most recent Cognizable 

Certification. 

* * * * * 

PART 315—TRADE ADJUSTMENT 

ASSISTANCE FOR FIRMS 

■ 27. The authority citation for part 315 

continues to read as follows: 

Authority: 19 U.S.C. 2341 et seq., as 

amended by Division B, Title I, Subtitle I, 

Part II of Pub. L. No. 111–5; 42 U.S.C. 3211; 

Department of Commerce Organization Order 

10–4. 

■ 28. Revise paragraph (b)(5)(iii) of 

§ 315.7 to read as follows: 

§ 315.7 Certification requirements. 

* * * * * 

(b) * * * 

(5) * * * 

(iii) An Increase in Imports has 

Contributed Importantly to the 

applicable Total or Partial Separation or 

Threat of Total or Partial Separation, 

and to the applicable decline in sales or 

production or supply of services. 

Dated: January 15, 2010. 

Brian P. McGowan, 

Deputy Assistant Secretary of Commerce for 

Economic Development. 

[FR Doc. 2010–1350 Filed 1–26–10; 8:45 am] 

BILLING CODE 3510–24–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2009–1148; Directorate 

Identifier 2009–SW–36–AD; Amendment 39– 

16185; AD 2010–03–02] 

RIN 2120–AA64 

Airworthiness Directives; Lifesavings 

Systems Corp., D-Lok Hook Assembly 

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Final rule; request for 

comments. 

SUMMARY: We are adopting a new 

airworthiness directive (AD) for the 

Lifesavings Systems Corp., D-Lok Hook 

assembly installed on certain rescue 

hoist assemblies. This AD results from 

a mandatory continuing airworthiness 

information (MCAI) AD issued by the 

European Aviation Safety Agency 

(EASA), which is the Technical Agent 

for the Member States of the European 

Community. The MCAI AD states that 

rescue hoist operators have reported 

surface irregularities and discontinuities 

on certain D-Lok Hooks because of an 

unapproved change in the hook design 

and manufacturing process from forged 

material to cast material that have 

different physical properties. The 


hsrobinson on DSK69SOYB1PROD with RULES