This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

42385

Vol. 62, No. 152

Thursday, August 7, 1997

DEPARTMENT OF AGRICULTURE

Rural Housing Service

Rural Business-Cooperative Service

Rural Utilities Service

Farm Service Agency

7 CFR Parts 1901, 1951, and 4284

RIN 0570–AA20

Rural Cooperative Development Grants

AGENCIES: Rural Housing Service, Rural

Business-Cooperative Service, Rural

Utilities Service, and Farm Service

Agency, USDA.

ACTION: Final rule.

SUMMARY: The Rural BusinessCooperative Service (RBS) revises its

regulations published previously under

Rural Technology and Cooperative

Development Grants (RTCDG). This

action is necessary to comply with the

Federal Agriculture Improvement and

Reform Act of 1996 (the 1996 Act) (Pub.

L. 104–127), which removed

‘‘technology’’ from RTCDG, thereby

directing the focus of the program

specifically to cooperative development.

The 1996 Act also clarified that public

bodies were not eligible applicants, and

modified application requirements and

applicant selection criteria. This action

will comply with legislation which

authorizes grants for establishing and

operating centers for rural cooperative

development. Exhibit A will be removed

since it contains administrative

material. The intended effect of this

action is to improve the economic

condition of rural areas through

cooperative development.

EFFECTIVE DATE: August 7, 1997.

FOR FURTHER INFORMATION CONTACT:

James E. Haskell, Assistant Deputy

Administrator, Cooperative Services,

Rural Business-Cooperative Service,

U.S. Department of Agriculture, Stop

3250, Room 4016, South Agriculture

Building, 1400 Independence Avenue,

SW., Washington, DC 20250. Telephone

(202) 720–8460.

SUPPLEMENTARY INFORMATION:

Classification

We are issuing this final rule in

conformance with Executive Order

12866. The Office of Management and

Budget has determined that it is not a

‘‘significant regulatory action.’’

Environmental Impact Statement

This document has been reviewed in

accordance with 7 CFR part 1940,

subpart G, ‘‘Environmental Program.’’

RBS has determined that this action

does not constitute a major federal

action significantly affecting the quality

of the human environment, and in

accordance with the National

Environmental Policy Act of 1969,

Public Law 91–190, an Environmental

Impact Statement is not required.

Executive Order 12988

This final rule has been reviewed

under Executive Order 12988, Civil

Justice Reform. In accordance with this

rule: (1) All state and local laws and

regulations that are in conflict with this

rule will be preempted; (2) no

retroactive effect will be given to this

rule; and (3) administrative proceedings

in accordance with the regulations of

the Agency at 7 CFR part 11, must be

exhausted before bringing suit in court

challenging action taken under this rule

unless these regulations specifically

allow bringing suit at an earlier time.

Intergovernmental Review

This program is listed in the Catalog

of Federal Domestic Assistance under

number 10.771 and is subject to the

provisions of Executive Order 12372,

which requires intergovernmental

consultation with state and local

officials. RBS has conducted

intergovernmental consultation in the

manner delineated in RD Instruction

1940–J.

National Performance Review

This regulatory action is being taken

as part of the National Performance

Review program to eliminate

unnecessary regulations and improve

those that remain in force.

Unfunded Mandates Reform Act of

1995

Title II of the Unfunded Mandates

Reform Act of 1995 (UMRA), Public

Law 104–4, establishes requirements for

Federal agencies to assess the effects of

their regulatory actions on State, local,

and tribal governments and the private

sector. Under section 202 of the UMRA,

RBS generally must prepare a written

statement, including a cost-benefit

analysis, for proposed and final rules

with ‘‘Federal mandates’’ that may

result in expenditures to State, local, or

tribal governments, in the aggregate, or

to the private sector, of $100 million or

more in any one year. When such a

statement is needed for a rule, section

205 of the UMRA generally requires

RBS to identify and consider a

reasonable number of regulatory

alternatives and adopt the least costly,

more cost-effective or least burdensome

alternative that achieves the objectives

of the rule. This rule contains no

Federal mandates (under the regulatory

provisions of Title II of the UMRA) for

State, local, and tribal governments or

the private sector. Thus this rule is not

subject to the requirements of sections

202 and 205 of the UMRA.

Regulatory Flexibility Act

The undersigned has determined and

certified by signature of this document

that this rule will not have a significant

economic impact on a substantial

number of small entities since this

rulemaking action does not involve a

new or expanded program. The removal

of ‘‘technology’’ from RTCDG

substantially narrows the scope of this

program. No provision of this rule

requires action on the part of small

businesses not required of large

businesses. This rule requires no action

on the part of any applicant not

previously required by an applicant.

Therefore, a Regulatory Impact Analysis

was not completed.

Paperwork Reduction Act

The information collection and

recordkeeping requirements contained

in this regulation were previously

approved by the Office of Management

and Budget (OMB) under the provisions

of 44 U.S.C. chapter 35 and were

assigned OMB control number 0570–

0006, in accordance with the Paperwork

Reduction Act of 1995. Under the

Paperwork Reduction Act of 1995, no
42386 Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Rules and Regulations

persons are required to respond to a

collection of information unless it

displays a valid OMB control number.

The valid OMB control number assigned

to the collection of information in these

final regulations is displayed at the end

of the affected section of the regulations.

This final rule does not impose any new

information or recordkeeping

requirements from those approved by

OMB.

Background

The RTCDG program was established

by rule on August 12, 1994, (59 FR

41386–98) and was authorized by

section 310B(f) through (h) of the

Consolidated Farm and Rural

Development Act (7 U.S.C. § 1932). The

1996 Act removed ‘‘technology’’ from

RTCDG, thereby directing the focus of

the program specifically to cooperative

development. The 1996 Act also

clarified that public bodies were not

eligible applicants, and modified

application requirements and applicant

selection criteria. The primary objective

of the Rural Cooperative Development

Grant (RCDG) program is to improve the

economic condition of rural areas

through cooperative development. The

program is administered through Rural

Development State Offices acting on

behalf of RBS. RBS is one of the

successors of the Rural Development

Administration pursuant to the

Department of Agriculture

Reorganization Act of 1994 (Pub. L.

103–354).

Discussion of Public Comments

RBS published a proposed rule in the

Federal Register on March 26, 1997, (62

FR 14354) and asked for comments on

or before April 25, 1997. The Agency

received a total of eight comments. The

commenters represented the National

Cooperative Business Association,

Rocky Mountain Farmers Union, North

Dakota Association of Rural Electric

Cooperatives and North Dakota

Association of Telephone Cooperatives,

the Federation of Southern

Cooperatives/Land Assistance Fund

(two commenters), North Dakota State

University, Washington State

University, and the North Dakota

Farmers Union. One respondent did not

comment directly on the proposed rule

but, instead strongly supported the

comments submitted by another

commenter.

Six respondents were concerned

about the definition of ‘‘cooperative

development’’ under § 4284.504 which

includes the language ‘‘* * * promote

the development of new services and

products * * * new processes * * * or

new enterprises * * *’’ The

respondents felt this definition should

be clarified to indicate that the activities

undertaken by a cooperative need not be

completely different from those

undertaken by other cooperatives. They

also felt this definition should more

clearly define activities involved in

cooperative development, including

technical assistance and development of

business plans. The agency agrees with

these comments and has changed the

definition of ‘‘cooperative

development’’ accordingly.

Several respondents suggested that

under § 4284.516, which provides that

grant funds may not be used to

duplicate current services or replace or

substitute support previously provided,

may preclude centers from working on

projects already underway. The agency

understands and appreciates this

concern and the fact that cooperative

development is a long term process. The

intent of the wording in this section is

not to preclude centers from working on

projects already underway. The agency

did not modify this section, but will

remain cognizant of the respondents’

concern.

Most of the respondents felt the

definition of ‘‘project’’ under § 4284.504

was ambiguous in drawing a distinction

between what a center is and what a

project is. A few of these respondents

suggested that the definition should

clarify that a center does projects and

uses federal funds to engage in those

projects. The agency agrees, and has

modified the definition of ‘‘project’’ to

provide that clarity. The clarification is

also used under § 4284.527(e) to change

from grant to project.

Five respondents suggested that the

provisions addressing grant purposes

under § 4284.515 should be clarified to

indicate that eligible activities of centers

assisted under the program must be

linked to the development of

cooperatives. Four of these respondents

further suggested that each provision (a

through e) should end with the words

‘‘for the purpose of cooperative

development’’ after the word ‘‘center.’’

While the agency feels the proposed

rule is adequate in focusing the program

on cooperative development, it has

modified § 4284.515 in the manner

suggested.

The provision requiring applicants to

file a ‘‘Request for Environmental

Information’’ under § 4284.527(b)(3) for

each project identified in their plans

that involve grants to provide financial

assistance to third-party recipients drew

comments from six respondents. They

felt the provision was unduly

burdensome for applicants because

cooperative development projects have

potential impacts in many areas so the

cost of gathering such information to

complete this form would greatly

exceed any possible benefits. The

agency feels the information contained

in the ‘‘Request for Environmental

Information’’ is legally required and

therefore § 4284.527(b)(3) has been

retained in the final rule.

Six respondents felt the provision

requiring applicants to collect evidence

of support from each affected

governmental unit under the

preapplications portion of

§ 4284.528(a)(2)(v) is unduly

burdensome for applicants. This rule

was not amended because all affected

governmental bodies should be on

record as supporting the project. The

time spent documenting this support

will be worth the time spent in order to

avoid misunderstandings later.

Two respondents thought the

selection criteria under § 4284.540 were

satisfactory. Other respondents did not

comment on this section.

One respondent did not comment on

any of the provisions in the proposed

rule, but instead requested information

about the program.

The provision addressing subsequent

grants under § 4284.574 received

comments from five respondents. Each

suggested the provision be clarified to

state that a second application need not

be filed for assistance under the

program to be awarded for the following

year. The agency did not modify this

provision since it currently states that,

‘‘If it is determined to be in the best

interests of the program, preference may

be given to a project or projects for an

additional grant in the immediately

succeeding year.’’

A definition for ‘‘regionally operated’’

has been added and definitions for

‘‘Urbanized area’’ and ‘‘Urbanizing

area’’ have been slightly modified to

make them consistent with ‘‘Rural and

rural area.’’

Internal management procedures have

been removed from the regulations but

will appear in internal agency

instructions.

Pursuant to the Administrative

Procedure Act, 5 U.S.C. 553, good cause

is found for making this final rule

effective less than 30 days after

publication of this document in the

Federal Register because the

appropriations allocated to the program

must be expended before the end of

Fiscal Year 1997, and there is a critical

need—recognized by both the Executive

and Legislative Branches—to

immediately assist rural America

through the development of self-help

cooperative organizations.
Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Rules and Regulations 42387

List of Subjects

7 CFR Part 1901

Civil rights, Compliance reviews, Fair

housing, Minority groups.

7 CFR Part 1951

Account servicing, Grant programs—

Housing and community development,

Reporting requirements, Rural areas.

7 CFR Part 4284

Business and industry, Grant

programs—Housing and community

development, Rural areas.

Accordingly, chapters XVIII and XLII,

title 7, Code of Federal Regulations, are

amended as follows:

PART 1901—PROGRAM-RELATED

INSTRUCTIONS

1. The authority citation for part 1901,

subpart E, continues to read as follows:

Authority: 5 U.S.C. 301, 7 U.S.C. 1989, 40

U.S.C. 442, 42 U.S.C. 1480, 42 U.S.C. 2942.

Subpart E—Civil Rights Compliance

Requirements *C*

§ 1901.204 [Amended]

2. Section 1901.204 is amended in

paragraph (a)(27) by removing the words

‘‘Technology and.’’

PART 1951—SERVICING AND

COLLECTIONS

3. The authority citation for part 1951

continues to read as follows:

Authority: 5 U.S.C. 301, 7 U.S.C. 1989, 42

U.S.C. 1480.

Subpart E—[Revised]

4. The title of subpart E is amended

by revising the word ‘‘Insured’’ to read

‘‘Direct.’’

§ 1951.201 [Amended]

5. Section 1951.201 is amended in the

first sentence by revising the word

‘‘Insured’’ to read ‘‘Direct’’ and by

revising the words ‘‘Rural Technology

and’’ to read ‘‘Rural.’’

PART 4284—GRANTS

6. The authority citation for part 4284

continues to read as follows:

Authority: 5 U.S.C. 301, 7 U.S.C. 1989, 16

U.S.C. 1005.

Subpart F—Rural Cooperative

Development Grants

7. Part 4284, subpart F is revised to

read as follows:

Subpart F—Rural Cooperative Development

Grants

Table of Contents

Sec.

4284.501 Purpose.

4284.502 Policy.

4284.503 [Reserved]

4284.504 Definitions.

4284.505 Applicant eligibility.

4284.506—4284.514 [Reserved]

4284.515 Grant purposes.

4284.516 Ineligible grant purposes.

4284.517—4284.526 [Reserved]

4284.527 Other considerations.

4284.528 Application processing.

4284.529—4284.539 [Reserved]

4284.540 Grant selection criteria.

4284.541 Grant approval, fund obligation,

grant closing, and third-party financial

assistance.

4284.542—4284.556 [Reserved]

4284.557 Fund disbursement.

4284.558 Reporting.

4284.559—4284.570 [Reserved]

4284.571 Audit requirements.

4284.572 Grant servicing.

4284.573 Programmatic changes.

4284.574 Subsequent grants.

4284.575 Grant suspension, termination,

and cancellation.

4284.576—4284.586 [Reserved]

4284.587 Exception authority.

4284.588—4284.599 [Reserved]

4284.600 OMB control number.

Subpart F—Rural Cooperative

Development Grants

§ 4284.501 Purpose.

(a) This subpart outlines the Rural

Business-Cooperative Service’s (RBS)

policies and authorizations and contains

procedures to provide grants for

cooperative development in rural areas.

(b) Grants will be made available to

nonprofit corporations and institutions

of higher education for the purpose of

establishing and operating centers for

rural cooperative development.

(c) Copies of all forms and

Instructions referenced in this subpart

are available in the RBS National Office

or any Rural Development State Office.

§ 4284.502 Policy.

The grant program will be used to

facilitate the creation or retention of jobs

in rural areas through the development

of new rural cooperatives, value-added

processing, and rural businesses.

§ 4284.503 [Reserved]

§ 4284.504 Definitions.

Agency—Rural Business-Cooperative

Service (RBS) or a successor agency.

Approval official—Any authorized

agency official.

Center—The entity established or

operated by the grantee for rural

cooperative development.

Cooperative—A user-owned and

controlled business from which benefits

are derived and distributed equitably on

the basis of use.

Cooperative development—The

startup, expansion, or operational

improvement of a cooperative to

promote development in rural areas of

services and products, processes that

can be used in the production of

products, or enterprises that can add

value to on-farm production through

processing or marketing activities.

Development activities may include, but

are not limited to, technical assistance,

research services, educational services,

and advisory services. Operational

improvement includes making the

cooperative more efficient or better

managed.

Economic development—The growth

of an area as evidenced by increases in

total income, employment

opportunities, decreased outmigration

of populations, value of production,

increased diversification of industry,

higher labor force participation rates,

increased duration of employment,

higher wage levels, or gains in other

measurements of economic activity,

such as land values.

Nonprofit institution—Any

organization or institution, including an

accredited institution of higher

education, no part of the net earnings of

which inures, or may lawfully inure, to

the benefit of any private shareholder or

individual.

Project—A planned undertaking by a

center which utilizes the funds

provided to it to promote economic

development in rural areas through the

creation and enhancement of

cooperatives.

Public body—Any state, county, city,

township, incorporated town or village,

borough, authority, district, economic

development authority, or Indian tribe

on federal or state reservations or other

federally recognized Indian tribe in

rural areas.

RBS—The Rural Business-Cooperative

Service, an agency of the United States

Department of Agriculture, or a

successor agency.

Regionally operated—A regionally

operated program includes programs

that cover or are eligible to cover two or

more counties.

Rural and rural area—Includes all

territory of a state that is not within the

outer boundary of any city having a

population of 50,000 or more and its

immediately adjacent urbanized and

urbanizing areas.

Rural Development—Rural

Development mission area.

Servicing office—Any Rural

Development State Office.

State—Any of the 50 States, the

District of Columbia, the
42388 Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Rules and Regulations

Commonwealth of Puerto Rico, the

Virgin Islands of the United States,

Guam, American Samoa, the

Commonwealth of the Northern Mariana

Islands, the Republic of Palau, the

Federated States of Micronesia, and the

Republic of the Marshall Islands.

Subcenter—A unit of a center acting

under the same direction as and having

a purpose consistent with that of the

center.

Urbanized area—An area

immediately adjacent to a city having a

population of 50,000 or more with a

population density of more than 100

persons per square mile, as determined

by the Secretary of Agriculture

according to the latest decennial census

of the United States which, for general

social and economic purposes,

constitutes a single community and has

a boundary contiguous with that of the

city. Such community may be

incorporated or unincorporated to

extend from the contiguous boundaries

to recognizable open country, less

densely settled areas, or natural

boundaries such as forests or water.

Minor open spaces such as airports,

industrial sites, recreational facilities, or

public parks shall be disregarded. Outer

boundaries of an incorporated

community extend at least to its legal

boundaries. Cities which may have a

contiguous border with another city, but

are located across a river from such city,

are recognized as a separate community.

Urbanizing area—A community with

a population density of more than 100

persons per square mile, as determined

by the Secretary of Agriculture

according to the latest decennial census

of the United States, which is not now,

or within the foreseeable future not

likely to be, clearly separate from and

independent of a city of 50,000 or more

population and its immediately adjacent

urbanized areas. A community is

considered ‘‘separate’’ when it is

separated from the city and its

immediately adjacent urbanized area by

open country, less densely settled areas,

or natural barriers such as forests or

water. Minor open spaces such as

airports, industrial sites, recreational

facilities, or public parks shall not be

considered as an area to determine if a

community is separate. A community is

considered ‘‘independent’’ when its

social (e.g., government, educational,

health, and recreational facilities) and

economic structure (e.g., business,

industry, tax base, and employment

opportunities) are not primarily

dependent on the city and its

immediately adjacent urbanized areas.

§ 4284.505 Applicant eligibility.

(a) Grants may be made to nonprofit

corporations and institutions of higher

education. Grants may not be made to

public bodies.

(b) An outstanding judgment obtained

against an applicant by the United

States in a Federal Court (other than in

the United States Tax Court), which has

been recorded, shall cause the applicant

to be ineligible to receive any grant or

loan until the judgment is paid in full

or otherwise satisfied. RBS grant funds

may not be used to satisfy the judgment.

§§ 4284.506—4284.514 [Reserved]

§ 4284.515 Grant purposes.

Grant funds may be used to pay up to

75 percent of the costs for carrying out

relevant projects. Applicant’s

contribution may be in cash or in-kind

contribution in accordance with parts

3015 and 3019 of this title and must be

from nonfederal funds except that a loan

from another federal source can be used

for the applicant’s contribution. Grant

funds may be used for, but are not

limited to, the following purposes:

(a) Applied research, feasibility,

environmental and other studies that

may be useful to individuals,

cooperatives, small businesses, and

other similar entities in rural areas

served by the center for the purpose of

cooperative development.

(b) Collection, interpretation, and

dissemination of principles, facts,

technical knowledge, or other

information that may be useful to

individuals, cooperatives, small

businesses, and other similar entities in

rural areas served by the center for the

purpose of cooperative development.

(c) Providing training and instruction

for individuals, cooperatives, small

businesses, and other similar entities in

rural areas served by the center for the

purpose of cooperative development.

(d) Providing loans and grants to

individuals, cooperatives, small

businesses, and other similar entities in

rural areas served by the center for the

purpose of cooperative development in

accordance with this subpart.

(e) Providing technical assistance,

research services, and advisory services

to individuals, cooperatives, small

businesses, and other similar entities in

rural areas served by the center for the

purpose of cooperative development.

§ 4284.516 Ineligible grant purposes.

Grant funds may not be used to:

(a) Pay more than 75 percent of

relevant project or administrative costs;

(b) Duplicate current services or

replace or substitute support previously

provided;

(c) Pay costs of preparing the grant

application package;

(d) Pay costs incurred prior to the

effective date of the grant;

(e) Pay for building construction, the

purchase of real estate or vehicles,

improving or renovating office space, or

the repair or maintenance of privatelyowned property;

(f) Fund political activities; or

(g) Pay for assistance to any private

business enterprise which does not have

at least 51 percent ownership by those

who are either citizens of the United

States or reside in the United States

after being legally admitted for

permanent residence.

§§ 4284.517—4284.526 [Reserved]

§ 4284.527 Other considerations.

(a) Civil rights compliance

requirements. 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

part 1901, subpart E of this title. In

addition, the grants made under this

subpart are subject to the requirements

of section 504 of the Rehabilitation Act

of 1973, as amended, which prohibits

discrimination on the basis of disability;

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, which prohibits

discrimination on the basis of disability

by private entities in places of public

accommodations.

(b) Environmental requirements—(1)

General applicability. Unless

specifically modified by this section, the

requirements of part 1940, subpart G of

this title apply to this subpart. For

example, the Agency’s general and

specific environmental policies

contained in §§ 1940.303 and 1940.304

of this title must be complied with.

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 forest lands, prime rangelands,

wetland, and flood plains. Prospective

recipients of grants, therefore, must

consider the potential environmental

impacts of their applications at the

earliest planning stages and develop

plans and projects that minimize the

potential to adversely impact on the

environment.
Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Rules and Regulations 42389

(2) Technical assistance. An

application for a project exclusively

involving technical assistance is

generally excluded from the

environmental review process by

§ 1940.310(e)(1) of this title. However,

as further specified in § 1940.333 of this

title, the grantee of a technical

assistance grant, in the process of

providing technical assistance, must

consider and generally document within

their plans the potential environmental

impacts of the plan and

recommendations provided to the

recipient of the technical assistance.

(3) Applications for grants to provide

other than technical assistance to thirdparty recipients. As part of the

preapplication, the applicant must

provide a complete ‘‘Request for

Environmental Information,’’ for each

project specifically identified in its plan

to provide other than technical

assistance to third parties who will

undertake eligible projects with such

assistance. The Agency will review the

preapplication, supporting materials,

and the required ‘‘Request for

Environmental Information’’ and assess

the impact of 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 that can be

identified at this time from the

information submitted. Because the

Agency’s approval of this type of grant

application does not constitute a

commitment to the use of grant funds

for any identified third-party projects

(see § 4284.541), no public notification

requirements 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

part 1940, subpart G of this title prior to

the Agency providing its consent to the

grantee to assist the third-party project.

If the preapplication reflects only one

project which is specifically identified

as the third-party recipient for financial

assistance, the Agency may proceed

directly to the appropriate

environmental assessment for the thirdparty recipient with public notification

as required. 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.

(c) Government-wide debarment and

suspension (non-procurement) and

requirements for drug-free workplace.

Persons who are disbarred or suspended

are excluded from federal assistance and

benefits including grants under this

subpart. Grantees must certify that they

will provide a drug-free workplace.

(d) Restrictions on lobbying. All grants

must comply with the lobbying

restrictions contained in part 3018 of

this title.

(e) Excess capacity or transfer of

employment. If a proposed project has

financial assistance from all sources for

more than $1 million and will increase

direct employment by more than 50

employees, the applicant will be

requested to provide written support for

an Agency determination that the

proposal will not result in a project

which is calculated to, or likely to,

result in the transfer of any employment

or business activity from one area to

another. This limitation will 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.

(f) Management assistance. Grant

recipients will be supervised, as

necessary, to ensure 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,

parts 3015, 3017, 3019, and 3051 of this

title, as appropriate, and established

RBS guidelines.

(g) Uniform Relocation Assistance

and Real Property Acquisition Policies

Act. All projects must comply with the

requirements contained in part 21 of

this title.

(h) Flood or mudslide hazard area

precautions. If the grantee financed

project is in a flood or mudslide area,

flood or mudslide insurance must be

obtained through the National Flood

Insurance Program.

(i) Termination of federal

requirements. Once the grantee has

provided assistance with project loans

in an amount equal to the grant

provided by RBS, the requirements

imposed on the grantee shall not be

applicable to any new projects thereafter

financed from the RCDG funds. Such

new projects shall not be considered as

being derived from federal funds. The

purposes of such new projects, however,

shall be consistent with these

regulations.

(j) Intergovernmental review. Grant

projects are subject to the provisions of

Executive Order 12372 which requires

intergovernmental consultation with

state and local officials. A loan fund

established in whole, or in part, with

grant funds will also be considered a

project for the purpose of

intergovernmental review as well as the

specific projects funded with grant

funds from the RCDG funds. For each

project to be assisted with a grant under

this subpart and which the state has

elected to review 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 RBS grant funds for the

specific project. Prior to the RBS

decision on the request, compliance

with requirements of intergovernmental

consultation must be demonstrated for

each project. These requirements should

be completed in accordance with

‘‘Intergovernmental Review of

Department of Agriculture Programs and

Activities,’’ part 3015, subpart V of this

title.

§4284.528 Application processing.

(a) Preapplications. (1) Applicants

will file an original and one copy of an

‘‘Application for Federal Assistance (For

Non-construction),’’ with the

appropriate Rural Development State

Office.

(2) All preapplications shall be

accompanied by:

(i) evidence of applicant’s legal

existence and authority to perform the

proposed activities under the grant.

(ii) the latest financial information to

show the applicant’s financial capacity

to carry out the project. At a minimum,

the information should include a

balance sheet and an income statement.

A current audited report is preferred

where one is reasonably obtainable.

(iii) an estimated breakdown of total

costs, including costs to be funded by

the applicant or other identified

sources. Certification must be provided

from the applicant that its matching

share to the project is available and will

be used for the project. The matching

share must meet the requirements of

parts 3015 and 3019 of this title as

applicable. Certifications from an

authorized representative of each source

of funds must be provided indicating

that funds are available and will be used

for the proposed project.

(iv) a budget and description of the

accounting system to be used.

(v) the area to be served, identifying

within that area each governmental unit

(i.e., town, county, etc.) affected by the

proposed project. Evidence of support

and concurrence from each affected

governmental unit must be provided by
42390 Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Rules and Regulations

either a resolution or a written

statement from the chief elected local

official.

(vi) a listing of cooperative businesses

to be assisted or created.

(vii) applicant’s experience with

similar projects, including experience of

key staff members and persons who will

be providing the proposed services and

managing the project.

(viii) the number of months duration

of the project and the estimated time it

will take from grant approval to

beginning of service.

(ix) the method and rationale used to

select the areas or businesses that will

receive the service.

(x) a brief description of how the work

will be performed and whether

organizational staff, consultants or

contractors will be used.

(xi) an evaluation method to be used

by the applicant to determine if

objectives of the proposed activity are

being accomplished.

(xii) a brief plan that contains the

following provisions and describes how

the applicant will meet these

provisions:

(A) A provision that substantiates

how the applicant will effectively serve

rural areas in the United States.

(B) A provision that the primary

objective of the applicant will be to

improve the economic condition of rural

areas by promoting development of new

cooperatives or improvement of existing

cooperatives.

(C) Supporting data from established

official independent sources along with

any explanatory documentation.

(D) A description of the activities that

the applicant will carry out to

accomplish such objective.

(E) A description of the proposed

activities to be funded under this

subpart.

(F) A description of the contributions

that the applicant’s proposed activities

are likely to make to the improvement

of the economic conditions of the rural

areas served by the applicant.

(G) Provisions that the applicant, in

carrying out its activities, will seek,

where appropriate, the advice,

participation, expertise, and assistance

of representatives of business, industry,

educational institutions, the federal,

state, and local governments.

(H) Provisions that the applicant will

consult with any college or university

administering Extension Service

programs and cooperate with such

college or university in the coordination

of the center’s activities and programs.

(I) Provisions that the applicant will

take all practicable steps to develop

continuing sources of financial support

for the center, particularly from sources

in the private sector.

(J) Provisions for:

(1) monitoring and evaluating its

activities; and

(2) accounting for money received and

expended by the applicant under this

subpart.

(K) Provisions that the applicant will

provide for the optimal application of

cooperative development in rural areas,

especially those areas adversely affected

by economic conditions, such that local

economic conditions can be improved

through cooperative development.

(xiii) the agreement proposed to be

used between the applicant and the

ultimate recipients, if grant funds are to

be used for the purpose of making loans

or grants to individuals, cooperatives,

small businesses, and other similar

entities (ultimate recipients) in rural

areas for eligible purposes under this

subpart. This agreement should include

the following:

(A) An assurance that the

responsibilities of the grantee, as a

recipient of grant funds under this

subpart, are passed on to the ultimate

recipient and the ultimate recipient

understands its responsibilities to

comply with the requirements

contained in this subpart and parts 3015

and 3019 of this title, as applicable.

(B) Provisions that the ultimate

recipient will comply with debarment

and suspension requirements contained

in part 3017 of this title and will

execute a ‘‘Certification Regarding

Debarment, Suspension, Ineligibility

and Voluntary Exclusion—Lower Tier

Covered Transactions.’’

(C) Provisions that the ultimate

recipient will execute an ‘‘Equal

Opportunity Agreement,’’ and an

‘‘Assurance Agreement.’’

(D) Documentation that the ultimate

recipient understands its

responsibilities to the applicant.

(E) Documentation that the applicant

understands its responsibilities in

monitoring the ultimate recipient’s

activities under the grant and the

applicant’s plan for such monitoring.

(F) Documentation, when other

references or sources of information are

used, along with copies, if possible, that

provides dates, addresses, page numbers

and explanations of how interpretations

are made to substantiate that such

things as economically distressed

conditions do exist.

(G) Narrative addressing all items in

§4284.540(a) of this subpart regarding

grant selection criteria.

(b) Applications. Upon notification

that the applicant has been selected for

funding, the following will be submitted

to Rural Development by the applicant:

(1) Proposed scope of work, detailing

the proposed activities to be

accomplished and timeframes for

completion of each activity.

(2) Other information requested by

RBS to make a grant award

determination.

(c) Applicant response. If the

applicant fails to submit the application

and related material by the date shown

on the invitation for applications, Rural

Development may discontinue

consideration of the preapplication.

§§ 4284.529–4284.539 [Reserved]

§ 4284.540 Grant selection criteria.

Grants will be awarded under this

subpart on a competitive basis. The

priorities described in this paragraph

will be used by RBS to rate

preapplications. RBS review of

preapplications will include the

complete preapplication package

submitted to the Rural Development

State Office. Points will be distributed

according to ranking as compared with

other preapplications on hand. All

factors will receive equal weight with

points awarded to each factor on a 5, 4,

3, 2, 1 basis depending on the

applicant’s ranking compared to other

applicants.

(a) Preference will be given to

applications that:

(1) demonstrate a proven track record

in administering a nationally

coordinated, regionally or State-wide

operated project;

(2) demonstrate previous expertise in

providing technical assistance in rural

areas;

(3) demonstrate the ability to assist in

the retention of business, facilitate the

establishment of cooperatives and new

cooperative approaches, and generate

employment opportunities that will

improve the economic conditions of

rural areas;

(4) demonstrate the ability to create

horizontal linkages among businesses

within and among various sectors in

rural areas of the United States and

vertical linkages to domestic and

international markets;

(5) commit to providing technical

assistance and other services to

underserved and economically

distressed rural areas of the United

States;

(6) commit to providing greater than

a 25 percent matching contribution with

private funds and in-kind contributions;

(7) evidence transferability or

demonstration value to assist rural areas

outside of project area; and

(8) demonstrate that any cooperative

development activity is consistent with

positive environmental stewardship.

(b) Each preapplication for assistance

will be carefully reviewed in accordance
Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Rules and Regulations 42391

with the priorities established in this

section. A priority rating will be

assigned to each preapplication.

Preapplications selected for funding

will be based on the priority rating

assigned each preapplication and the

total funds available. All

preapplications submitted for funding

should contain sufficient information to

permit RBS to complete a thorough

priority rating.

§ 4284.541 Grant approval, fund

obligation, grant closing, and third-party

financial assistance.

The grantee will execute all

documents required by RBS to make a

grant under this subpart. By accepting

the grant, the grantee agrees to comply

with parts 3015 and 3019 of this title.

§§ 4284.542–4284.556 [Reserved]

§ 4284.557 Fund disbursement.

Grants will be disbursed as follows:

(a) A ‘‘Request for Advance or

Reimbursement,’’ will be completed by

the applicant and submitted to Rural

Development not more frequently than

monthly. Payments will be made by

electronic funds transfer pursuant to the

Debt Collection Improvement Act of

1996 (Pub. L. 104–134).

(b) The grantee’s share in the cost of

the project will be disbursed in advance

of grant funds or on a pro-rata

distribution basis with grant funds

during the disbursement period.

§ 4284.558 Reporting.

A ‘‘Financial Status Report,’’ and a

project performance activity report will

be required of all grantees on a quarterly

calendar basis. A final project

performance report will be required

with the last ‘‘Financial Status Report.’’

The final report may serve as the last

quarterly report. The final report must

include a final evaluation of the project.

Grantees must 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. Grantees are to submit

an original of each report to Rural

Development. The project performance

reports shall include, but not be limited

to, the following:

(a) A comparison of actual

accomplishments to the objectives

established for that period;

(b) Reasons why established

objectives (if any) were not met;

(c) 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

(d) Objectives and timetable

established for the next reporting

period.

§§ 4284.559–4284.570 [Reserved]

§ 4284.571 Audit requirements.

The grantee will provide an audit

report in accordance with §1942.17 of

this title. Audits must be prepared in

accordance with general accounting

principles and standards using the

publication, ‘‘Standards for Audit of

Governmental Organizations, Programs,

Activities and Functions.’’

§ 4284.572 Grant servicing.

Grants will be serviced in accordance

with part 1951, subpart E of this title.

§ 4284.573 Programmatic changes.

The grantee shall obtain prior

approval for any change to the scope or

objectives of the approved project.

Failure to obtain prior approval of

changes to the scope or budget can

result in suspension or termination of

grant funds.

§ 4284.574 Subsequent grants.

Subsequent grants will be processed

in accordance with the requirements

contained in this subpart. Cooperative

development projects receiving

assistance under this program will be

evaluated one year after assistance is

received. If it is determined to be in the

best interests of the program, preference

may be given to a project or projects for

an additional grant in the immediately

succeeding year.

§ 4284.575 Grant suspension, termination,

and cancellation.

Grants may be canceled by RBS by

written notice. Grants may be

suspended or terminated for cause or

convenience in accordance with parts

3015 and 3019 of this title, as

applicable.

§§ 4284.576–4284.586 [Reserved]

§ 4284.587 Exception authority.

The Administrator may, in individual

cases, make an exception to any

requirement or provision of this subpart,

if the Administrator determines that

application of the requirement or

provision would adversely affect the

Government’s interest.

§§ 4284.588–4284.599 [Reserved]

§ 4284.600 OMB control number.

The information collection

requirements contained in this

regulation have been approved by the

Office of Management and Budget

(OMB) and have been assigned OMB

control number 0570–0006. You are not

required to respond to this collection of

information unless it displays a valid

OMB control number.

Dated: July 30, 1997.

Jill Long Thompson,

Under Secretary, Rural Development.

[FR Doc. 97–20738 Filed 8–6–97; 8:45 am]

BILLING CODE 3410–XY–U

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 97–ANE–25–AD; Amendment

39–10094, AD 97–11–51 R1]

RIN 2120–AA64

Airworthiness Directives; Pratt &

Whitney PW2000 Series Turbofan

Engines

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule; request for

comments.

SUMMARY: This amendment adopts a

new airworthiness directive (AD) that is

applicable to Pratt & Whitney PW2000

series turbofan engines. This action

revises telegraphic AD T97–11–51 that

currently supersedes AD 97–09–01 by

correcting errors in the Serial Number

(S/N) tables, and removing the

McDonnell Douglas C–17 aircraft from

the applicability section, as a different

model engine is installed on McDonnell

Douglas C–17 aircraft. In addition, that

telegraphic AD clarifies that inspections

must be performed prior to rework, and

clarifies that new parts do not need to

be reworked prior to installation, but

must be reworked at the next shop visit.

Finally, that telegraphic AD makes

minor editorial changes for clarity

without changing meaning or intent.

This action relaxes the compliance

intervals for rework and provides

relieving requirements. This

amendment is prompted by industry

input and resulting changes by the

manufacturer to the inspection program

that would provide relief to operators

while maintaining an equivalent level of

safety. The actions specified by this AD

are intended to prevent fracture of the

first stage high pressure turbine (HPT)

disk, resulting in a possible uncontained

engine failure and damage to the

aircraft.

DATES: August 7, 1997.