10938 Federal Register / Vol. 87, No. 39 / Monday, February 28, 2022 / Rules and Regulations 

by the Paperwork Reduction Act (PRA) 

of 1995, 44 U.S.C. 3501, Chapter 35. 

D. Executive Order 13175 

This final rule has been reviewed 

under Executive Order 13175— 

Consultation and Coordination with 

Indian Tribal Governments. Executive 

Order 13175 requires Federal agencies 

to consult and coordinate with tribes on 

a government-to-government basis on: 

(1) Policies that have tribal implication, 

including regulation, legislative 

comments, or proposed legislation; and 

(2) other policy statements or actions 

that have substantial direct effects on 

one or more Indian tribes, on the 

relationship between the Federal 

Government and Indian tribes, or on the 

distribution of power and 

responsibilities between the federal 

government and Indian tribes. 

AMS has assessed the impact of this 

final rule on Indian tribes and 

determined that this rule would not 

have tribal implications that require 

consultation under Executive Order 

13175. AMS hosts a quarterly 

teleconference with tribal leaders where 

matters of mutual interest regarding the 

marketing of agricultural products are 

discussed. Information about the 

proposed changes to the regulations are 

shared during quarterly calls with Tribal 

leaders, who have the opportunity to 

submit comments. AMS works with the 

USDA Office of Tribal Relations to 

ensure meaningful consultation is 

provided as needed with regards to the 

NOP regulations. 

E. Congressional Review Act 

Pursuant to the Congressional Review 

Act (5 U.S.C. 801 et seq.), the Office of 

Information and Regulatory Affairs 

designated this rule as not a major rule, 

as defined by 5 U.S.C. 804(2). 

F. General Notice of Public Rulemaking 

This final rule reflects 

recommendations submitted by the 

NOSB to the Secretary to remove 

fourteen nonorganic ingredients and 

two substances from the National List. 

This final rule retains (or ‘‘renews’’) two 

substances on the National List. 

List of Subjects in 7 CFR Part 205 

Administrative practice and 

procedure, Agricultural commodities, 

Agriculture, Animals, Archives and 

records, Fees, Imports, Labeling, 

Organically produced products, Plants, 

Reporting and recordkeeping 

requirements, Seals and insignia, Soil 

conservation. 

For the reasons set forth in the 

preamble, 7 CFR part 205 is amended as 

follows: 

PART 205—NATIONAL ORGANIC 

PROGRAM 

■ 1. The authority citation for 7 CFR 

part 205 continues to read as follows: 

Authority: 7 U.S.C. 6501–6524. 

■ 2. Amend § 205.601 by revising 

paragraph (j)(9) to read as follows: 

§ 205.601 Synthetic substances allowed 

for use in organic crop production. 

* * * * * 

(j) * * * 

(9) Vitamins, C and E. 

* * * * * 

§ 205.603 [Amended] 

■ 3. Amend § 205.603 by removing 

paragraph (b)(9) and redesignating 

paragraphs (b)(10) through 12 as 

paragraphs (b)(9) through (11). 

§ 205.605 [Amended] 

■ 4. Amend § 205.605(b) by removing 

the words ‘‘Alginic acid (CAS #9005– 

32–7)’’. 

■ 5. Amend § 205.606 by revising 

paragraphs (d) through (t) and removing 

paragraphs (u) through (w). 

The revisions read as follows: 

§ 205.606 Nonorganically produced 

agricultural products allowed as ingredients 

in or on processed products labeled as 

‘‘organic.’’ 

* * * * * 

(d) Colors derived from agricultural 

products—Must not be produced using 

synthetic solvents and carrier systems or 

any artificial preservative. 

(1) Beet juice extract color—derived 

from Beta vulgaris L., except must not 

be produced from sugarbeets. 

(2) Beta-carotene extract color— 

derived from carrots (Daucus carota L.) 

or algae (Dunaliella salina). 

(3) Black/purple carrot juice color— 

derived from Daucus carota L. 

(4) Chokeberry, aronia juice color— 

derived from Aronia arbutifolia (L.) 

Pers. or Aronia melanocarpa (Michx.) 

Elliott. 

(5) Elderberry juice color—derived 

from Sambucus nigra L. 

(6) Grape skin extract color—derived 

from Vitis vinifera L. 

(7) Purple sweet potato juice color— 

derived from Ipomoea batatas L. or 

Solanum tuberosum L. 

(8) Red cabbage extract color—derived 

from Brassica oleracea L. 

(9) Red radish extract color—derived 

from Raphanus sativus L. 

(10) Saffron extract color—derived 

from Crocus sativus L. 

(e) Cornstarch (native). 

(f) Fish oil (Fatty acid CAS #’s: 

10417–94–4, and 25167–62–8)— 

stabilized with organic ingredients or 

only with ingredients on the National 

List, §§ 205.605 and 205.606. 

(g) Fructooligosaccharides (CAS # 

308066–66–2). 

(h) Gelatin (CAS # 9000–70–8). 

(i) Glycerin (CAS # 56–81–5)— 

produced from agricultural source 

materials and processed using biological 

or mechanical/physical methods as 

described under § 205.270(a). 

(j) Gums—water extracted only 

(Arabic; Guar; Locust bean; and Carob 

bean). 

(k) Inulin—oligofructose enriched 

(CAS # 9005–80–5). 

(l) Lecithin—de-oiled. 

(m) Orange pulp, dried. 

(n) Orange shellac—unbleached (CAS 

# 9000–59–3). 

(o) Pectin (non-amidated forms only). 

(p) Potassium acid tartrate. 

(q) Seaweed, Pacific kombu. 

(r) Tamarind seed gum. 

(s) Tragacanth gum (CAS # 9000–65– 

1). 

(t) Wakame seaweed (Undaria 

pinnatifida). 

* * * * * 

Erin Morris, 

Associate Administrator, Agricultural 

Marketing Service. 

[FR Doc. 2022–03851 Filed 2–25–22; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF AGRICULTURE 

Rural Business-Cooperative Service 

7 CFR Part 4280 

[Docket No. RBS–20–BUSINESS–0027] 

RIN 0570–AA98 

Rural Energy for America Program 

AGENCY: Rural Business-Cooperative 

Service, USDA. 

ACTION: Final rule; confirmation and 

response to comments. 

SUMMARY: The Rural BusinessCooperative Service (RBCS or the 

Agency), a Rural Development agency of 

the United States Department of 

Agriculture (USDA), is confirming the 

final rule published in the Federal 

Register on April 27, 2021, to remove 

the provisions relating to guaranteed 

loans and to make other revisions to 

enhance program delivery and customer 

service for the Rural Energy for America 

Program (REAP). This notice presents 

the opportunity for the Agency to 

provide its responses to the public 

comments received on the final rule and 

to confirm the final rule as published. 

DATES: As of February 28, 2022, the 

effective date of the final rule published 


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Federal Register / Vol. 87, No. 39 / Monday, February 28, 2022 / Rules and Regulations 10939 

April 27, 2021, at 86 FR 22304, is 

confirmed as July 26, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Sami Zarour, Program Management 

Division, U.S. Department of 

Agriculture, 1400 Independence Avenue 

SW, Washington, DC 20250–3201; 

telephone (202) 720–9549; email: 

sami.zarour@usda.gov. 

SUPPLEMENTARY INFORMATION: Rural 

Development administers a multitude of 

programs, ranging from housing and 

community facilities to infrastructure 

and business development. Its mission 

is to increase economic opportunity and 

improve the quality of life in rural 

communities by providing leadership, 

infrastructure, capital, and technical 

support that can support rural 

communities, helping them to prosper. 

To achieve its mission, Rural 

Development provides financial support 

(including direct loans, grants, loan 

guarantees, and direct payments) and 

technical assistance to help enhance the 

quality of life and provide support for 

economic development in rural areas. 

On July 14, 2020, at 85 FR 42494, the 

Agency promulgated 7 CFR part 5001, 

the OneRD guaranteed loan regulation, 

which combined four Agency 

guaranteed loan program regulations, 

including REAP, into one 

comprehensive guaranteed loan 

processing and servicing regulation. The 

final rule being confirmed amends 7 

CFR part 4280, subpart B accordingly to 

remove references to the guaranteed 

loan provisions of REAP as these 

references have become superfluous in 

light of the promulgation of 7 CFR part 

5001. Furthermore, program 

modifications required by the 

Agriculture Improvement Act of 2018 

(2018 Farm Bill), as well as provisions 

that have been previously published via 

funding opportunities in Federal 

Register publications, have been 

incorporated into this final rule to 

eliminate the need for annual 

notification and to enhance program 

delivery. 

Summary of Comments and Responses 

RBCS invited comments on the final 

rule published on April 27, 2021, in the 

Federal Register (86 FR 22304). RBCS 

received twenty-eight (28) comments 

from five commenters. The commenters 

were: The American Biogas Council 

(ABC), Agriculture Energy Coalition 

(AgEC), Ebenezer MGMT, LLC, 

Environmental Law & Policy Center 

(ELPC) and CROPP Cooperative 

(CROPP). The Agency’s responses to the 

28 comments, of which six (6) were 

duplicative, are as follows: 

Comment 1: Both the ABC and the 

AgEC believe the March 31 grant 

application deadline creates a barrier to 

a timely transition between the grant 

process and project initiation for 

companies who want to partner with 

farms to produce biogas. As grant 

application reviews typically last a few 

months, and applications are not 

guaranteed to be successful, small 

businesses are often forced to delay 

capital outlays for construction until a 

grant is awarded. By the time the grant 

is awarded, it is usually summer, and 

the awardee has missed out on a 

significant portion of construction 

season and faces unnecessary challenges 

securing labor and equipment that is 

already obligated to projects that began 

in the spring. Thus, these projects are 

often delayed until the following year. 

For companies who want to partner 

with farms to convert manure or other 

organic materials into biogas, this ninemonth delay is too frequently an 

impediment initiating a reciprocal 

business relationship between small 

farms and small biogas companies. 

Additionally, the ABC and the AgEC 

feel the current practice requires that 

projects seeking a REAP grant as well as 

participation in the loan guarantee 

program complete a combination 

application. Coupling these separate 

paths together creates a significant 

obstacle to small and mid-size 

applicants because lenders often do not 

count potential REAP grant funding 

among a borrower’s assets. Specifically, 

in the loan application process, some 

companies rely on REAP grant funding 

to demonstrate the viability of the 

projects for which they are seeking 

loans. Lenders are typically less likely 

to approve loans when the applicant is 

relying on uncertain federal grant 

funding to demonstrate the viability of 

the project. The result is an increased 

rate of loan denials for small businesses. 

If, however, loan guarantee applicants 

were allowed to begin that process with 

grant funding already in-hand, their 

proposed projects would present as 

more stable to lenders. 

Agency response: Applications for 

REAP assistance can be filed any time 

during the year and once a complete 

application is filed it can be processed 

and readied for competition. The receipt 

of program funds to make awards are 

contingent upon the federal budget 

process. Historically, the Agency has 

received REAP funds in January. REAP 

grants are typically very competitive 

given the limited amount of grant funds 

available. The Agency must meet the 

statutory provision of obligating no less 

than 20 percent of REAP funds for 

grants applications requesting $20,000 

and less by June 30. Therefore, the 

Agency utilizes an October 31 deadline 

for these grants so that the statutory 

provision can be met each year. The 

Agency has also adopted a single 

deadline (March 31) for grant 

applications requesting more than 

$20,000 to ensure that there is a fair and 

transparent process for competition 

across the nation. 

Furthermore, the Agency desires to 

fund applications that are shovel ready 

and can be completed when REAP 

funding is awarded. As such, part of the 

application requirements is to 

demonstrate how the project will be 

financed and that those funds, both 

grant, loan and other are available. The 

Agency acknowledges that grant funds 

are much more competitive than 

guaranteed loan funds and it can take 

longer to process the volume of grant 

applications received compared to 

guaranteed loan applications. 

Comment 2: Ebenezer MGMT, LLC 

stated that the final rule ‘‘was published 

April 27th with an effective date of July 

26th. USDA released a NOSA published 

11/25/2020 that substantially changed 

how applications are reviewed and 

scored, with no comment period. The 

final program due date each year is 

currently March 31st. All proposed 

changes to procedure or scoring should 

occur or become effective on the day 

following the final due date for 

applications. 

Applicants submit applications 

throughout the year, after reading 

current rules and with guidance from 

USDA staff. All applicants have an 

expectation of consistency. To make 

changes mid-year puts some applicants 

at a disadvantage to others. It requires 

enormous amounts additional staff time 

to rescore or gather additional 

information when changes are made 

mid-year. By announcing ahead of time 

that the changes would occur each April 

1st. Applicants would be better served; 

and state staff could manage their 

workload more efficiently.’’ 

Agency response: REAP applications 

can be filed at any time during the year 

which makes it difficult to find an ideal 

time to initiate program changes. The 

Agency ensures that all applicants are 

afforded the same opportunity to 

supplement application materials as 

necessary when program changes are 

initiated after complete applications 

have been filed. 

Comment 3: ABC and AgEC both 

raised the same concerns that the 

scoring criteria do not properly support 

project diversity and commercial yet 

underserved renewable technologies. 

ABC and AgEC are both very supportive 

of REAP and its broad reach. However, 

they are concerned that several elements 


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of the scoring criteria outlined in 

§ 4280.121 ‘‘Scoring RES and EEI grant 

applications’’ risk continued limits on 

the diversity of applicants and 

technologies supported by the program. 

ABC and AgEC are concerned that 

‘‘the following scoring criteria risk 

further inhibiting underserved 

renewable technologies for REAP grants, 

such as biogas systems and distributed 

wind: 

(1) ‘‘The quantity of energy generated 

or replaced per grant dollar requested’’ 

is a key scoring criterion outlined in the 

final rule. While efficient use of 

program funds is a worthwhile 

objective, this criterion favors the most 

established renewable energy 

technologies over underserved 

technologies. 

(2) The emphasis on ‘‘energy 

replaced’’ also favors technologies with 

the best economics based on energy 

alone, pushing toward technology that 

has penetrated the market more 

successfully to date, rather than 

underserved technologies that may 

support additional environmental and 

economic benefits and also might 

accommodate the specific needs of the 

applicant. For example, a significant 

component of the economic value of 

biodigesters comes from reduced 

manure disposal costs. This 

underserved technology would be at a 

disadvantage relative to an energy-only 

project. 

(3) The criteria for ‘‘energy saved’’ 

also favors technologies with the highest 

economic efficiency in today’s market, 

limiting diversity. 

(4) Awarding points for firm letters of 

credit for cost share favors those with 

access to capital, rather than 

marginalized communities or borrowers. 

Because one of the objectives of REAP 

is to support economic development 

and to strengthen rural communities, 

ensuring access to all eligible members 

of the rural community should be 

reflected in the final rule. 

(5) Awarding points for firms already 

in the market poses a potential barrier 

against new entrants and marginalized 

communities. Strengthening rural 

communities should include efforts to 

support fledgling businesses rather than 

place them at a disadvantage to their 

peers. 

(6) REAP is solely concentrated on 

energy production and does consider 

any of the environmental aspects of 

digesters. The qualities include 

preventing the emissions of methane, 

recycling of nutrients, cleaning and 

recycling of water or protecting water 

quality, requesting carbon by reusing 

nutrients. All of these elements are part 

of the reasons that farmers want to use 

digesters but none of them are taken 

into consideration by the current REAP 

scoring system. Given the USDA’s 

renewed focus on fighting climate 

change, we, again, urge USDA to update 

its scoring criteria to include not only 

aspects of energy generation but also 

aspects of GHG emission reduction and 

environmental savings.’’ 

Agency response: The Agency 

acknowledges that technology diversity 

is important. In fact, the Administrator 

has added discretionary points for 

underserved technology for the past 

several years in an effort to diversify the 

REAP portfolio. In response to the six 

individual issues raised, the Agency 

submits the following: 

ISSUE 1: This criterion is evaluating 

the energy savings/generation impact of 

the dollars being invested in the project. 

The installation cost is one variable, but 

the amount of the request is a second 

variable. Some technologies may have 

lower installation costs, but the amount 

of the request is defined by the 

applicant. 

ISSUES 2 and 3: RBCS acknowledges 

the concerns raised. REAP has always 

looked at only direct project benefits 

such as kWh/BTU’s saved/generated or 

by-products. The Agency is open to 

further discussion on additional project 

benefits; however, the Agency is 

concerned about how alternatives could 

be quantified and valued in a fair 

manner to ensure consistent program 

delivery. 

ISSUE 4: The Agency removed 

financial need from the program in 

2014. The Agency’s goal is to participate 

in projects that are shovel ready to 

ensure timely and prudent investment 

of REAP program dollars. Commitment 

of funds demonstrates project support, 

backing, and a higher probability of 

project completion. 

ISSUE 5: The Agency is assuming this 

concern is related to the five (5) points 

for existing businesses. The points for 

an existing business were added to 

strengthen opportunity for main street 

businesses as opposed to creating a 

barrier for new entities. REAP has a 

primary focus on energy generation and 

savings. 

ISSUE 6: The current scoring criteria 

does award up to five (5) points for 

environmental benefits. The concern is 

being raised that more emphasis should 

be placed on GHG emission reduction 

and environmental savings, including 

water, etc. The Agency acknowledges 

the importance of environmental 

benefits and will consider how the 

priority system could place more value 

on such benefits. 

Comment 4: ABC expressed concerns 

the provisions outlined in § 4280.121(h) 

‘‘State Director and Administrator 

priority points’’ providing discretionary 

points to underrepresented 

technologies, geographic diversity, and 

underserved populations are a great step 

in the right direction, and ABC strongly 

supports this, but they are concerned 

that the points are insufficient to offset 

the criteria favoring lowest cost 

technologies and certain applications 

outlined above. 

Agency response: While the Agency 

appreciates the comment, the Agency 

will continue to apply State Director 

and/or Administrator points in order to 

meet the objectives of the program. The 

Agency is open to further discussion on 

additional project benefits, however, the 

Agency is concerned about how 

alternatives could be quantified and 

valued in a fair manner to ensure 

consistent program delivery. 

Comment 5: Ebenezer MGMT, LLC 

states that ‘‘Administrator points should 

not be available in the pooling rounds 

of competition. The State Directors have 

an intimate knowledge of their states 

and the needs of residents. The 

Administrator does not have this 

knowledge and should not have the 

ability to add 10 points to an 

application score. All funding 

determinations at the National Office 

should be by initial score alone. If 

Administrator points are used, the 

Administrator should state what 

conditions will receive additional 

points at the beginning of each fiscal 

year. Historically it appears the National 

Office has skewed results to penalize 

states proficient in utilizing the 

program; eliminating the Administrator 

points would alleviate this problem.’’ 

Agency response: The concern 

regarding awarding Administrator 

points for national office competition is 

acknowledged. However, the 

competition is a national competition 

and the Administrator has discretion to 

apply additional points to support 

administration goals and objectives from 

a national perspective. Recent 

application of Administrator points has 

focused on underserved technology to 

diversify the national portfolio and 

assisting projects located in distressed 

communities. 

Comment 6: CROPP requested an 

adjustment to the scoring criteria to 

accommodate local utility net-metering 

restrictions, specifically in scoring 

criteria #2 (quantity of energy replaced), 

sub-criteria 2a (energy replacement) and 

#6 (simple payback). CROPP believes 

this decreases the competitiveness of 

their producer applications and put 

producers at a disadvantage. Producers 

are disadvantaged by these criteria due 

to the net-metering limitations imposed 


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by utilities. Those net-metering limits 

restrict the size of a RES an agriculture 

producer can install and thereby 

preclude producers from gaining the 

maximum scorable points. 

‘‘Net metering restrictions that limit 

the size of a RES that a farmer can 

install are pervasive from coast-to-coast 

across nearly all electric utility 

providers. Farmers should not be at a 

REAP disadvantage simply because 

their utility restricts the size of a RES; 

it is largely out of their hands and 

represents a scoring-criteria that should 

be rectified.’’ 

Agency response: The Agency 

acknowledges the concern that netmetering can lead potential REAP 

applicants to design smaller systems; 

however, the Agency has no control 

over state or utility net-metering 

limitations. 

Comment 7: ‘‘AgEC and ABC as a 

member of AgEC has received 

considerable support from the 

agriculture community and 

representatives in Congress for 

bolstering underserved and nascent 

renewable technologies to help ensure 

continued development and penetration 

into the marketplace, especially through 

a reserve of funds for these technologies. 

To that end AgEC would propose an 

addition to ‘‘§ 4280.121 Scoring RES 

and EEI grant applications.’’ 

Specifically, AgEC and ABC would 

propose adding section (i) at the end: 

‘‘(i) Notwithstanding the scoring rules 

above, no less than 15% of funding for 

a competition shall be awarded to 

nascent and/or underserved renewable 

[commercial] technologies separately 

from the remainder of the 

competition(s), on an annualized basis.’’ 

A complimentary definition in 

‘‘§ 4280.103 Definitions’’ would include 

‘‘Nascent and underserved (or 

underused) renewable technologies. 

Nascent and underserved/underused 

technologies are those renewable energy 

technologies that have received less 

than 10 percent of program funding 

support in the last three years.’’ 

AgEC and ABC also continue to 

advocate for a grants reserve fund for 

underserved renewable technologies, to 

support these technologies in achieving 

cost and scale.’’ 

Agency response: The Agency 

continues to support the requirement for 

technology to be commercially available 

to be eligible for REAP assistance. The 

Agency has and continues to apply State 

Director and Administrator points to 

underserved technology in efforts to 

diversify the REAP portfolio. The 

commenters propose reserving a set 

amount of funds to facilitate the 

selection of underrepresented 

technologies. The REAP statute does not 

provide the flexibility to establish 

reserve funding. If such a provision 

came to fruition, careful planning must 

occur to ensure that REAP projects 

continue to realize benefit. The current 

program contains state allocated and 

national competitions for funding and 

also includes a set-aside of funds 

(reserve of funds) for $20,000 or less 

applications for renewable energy 

systems and energy efficiency. If funds 

are subdivided further to represent each 

under-represented technology for state 

allocations, grant requests would need 

to be smaller. It is likely that a state 

would not be able to fully utilize its 

allocation as any remaining funds after 

the subdivision would be below the 

minimum required grant amount. 

Additionally, any administrative burden 

costs to implement another reserve must 

be included in the planning. 

Comment 8: ‘‘AgEC and ABC believe 

a robust loan guarantee component of 

REAP remains important as well. 

AgEC and ABC greatly appreciates 

USDA’s efforts under the OneRD 

program to remove regulatory barriers to 

make it easier for private lenders to use 

USDA programs and invest in rural 

America. 

Yet it is vital that energy efficiency 

and renewable energy systems find full 

support under the consolidated 

program. 

We urge USDA to ensure that the 

availability of OneRD funding is clearly 

communicated under all REAP funding 

opportunities, and urge REAP program 

officers to support grant applicants in 

obtaining complimentary loan funding 

where appropriate. 

In addition, we would urge a new 

category of loan guarantee of 90% for 

distributed generation projects of less 

than $1,000,000. This would serve to 

support smaller-scale, and smaller 

businesses and/or individual applicants 

in the market. 

Distributed generation is an important 

public policy area that the 

Administration wants to help for all of 

the myriad benefits it provides, 

including local economic development, 

localized energy production and 

ownership, grid and community 

resilience, and energy security (ex., 

much harder to succeed in cyber-attacks 

against millions of small solar and 

distributed wind installations)’’. 

Agency response: The Agency 

appreciates the comment and will 

continue to amplify the availability of 

REAP guarantee funding in our external 

communication strategies. We 

understand the importance of 

distributed generation projects and will 

continue to finance them under the 

REAP guaranteed loan and grant 

programs. The 2018 Farm Bill 

specifically outlines how REAP funds 

should be used (i.e., technical 

assistance, small grants, energy efficient 

equipment and systems, etc.). Changes 

to the 2018 Farm Bill would be needed 

to create a new category of loan 

guarantees for distributed generation 

projects. 

Comment 9: AgEC and ABC believe it 

is ‘‘incumbent upon USDA to properly 

staff the Rural Development mission 

area for better implementation of REAP 

and related energy or bioeconomy 

programs such as 9003. We would urge 

USDA to look at this further, hire and 

train as needed, and continue to 

communicate to Congress the 

importance of a robust staffing budget to 

efficiently support the administration of 

important programs.’’ 

Agency response: Thank you for the 

comment, the Agency recognizes the 

importance of proper staffing and 

training. 

Comment 10: AgEC and ABC ‘‘urge 

USDA again to further streamline, and 

simplify the REAP applications process 

across the board, but with a particular 

emphasis on lower cost grant 

applications for individual farmers and 

others. This is an issue we’ve raised for 

years. 

We recognize the vital importance of 

due diligence, and agency fiduciary 

responsibilities, but the arduous 

applications process is inhibiting equity 

and opportunity in ag based energy. For 

example, some prospective applicants 

have to hire consultants, paying over 

$1,000 for an under $20,000 grant 

application for the hope of an award. 

The time that it takes, the cost, can have 

a ‘‘chilling effect’’ on program 

participation. 

As Congress increasingly looks at 

REAP as a climate change and rural 

economic development program worthy 

of greater funding, the stakes grow as to 

program application simplification. 

More REAP funding in conjunction with 

a more streamlined approach will equal 

greater success, in terms of lowered 

costs to constituents, greater energy 

production, deployment of renewables 

and energy efficiency investments.’’ 

Agency response: The Agency 

continues to look for additional 

efficiencies while remaining compliant 

with federal grant requirements. The 

updated rule adopts certifications 

related to applicant eligibility, modifies 

the feasibility study requirement, 

lessens the technical report 

requirements, and streamlines the 

annual reporting process. 

Comment 11: The ELPC believes 

‘‘REAP’s complex application burden 


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has been often discussed and is a drag 

on program success. It’s important to 

note that the application burden has the 

effect of skewing the program towards 

those with the financial wherewithal to 

hire application writers and consultants 

and away from those with the most 

need. 

Over the years, the USDA has taken 

steps to simplify the REAP application 

process. Most recently, the USDA 

expended great effort to simplify the 

application process for guaranteed loans 

and adopted innovative solutions for the 

OneRD Guarantee Loan Initiative. ELPC 

supports REAP simplification efforts 

and encourages USDA to expend a 

similar level of effort to simplify the 

application process for grants as the 

agency applied to OneRD. The USDA 

has demonstrated an ability to 

substantially revise and simplify the 

loan guarantee portion of REAP and 

should now apply as much effort to 

simplifying the majority of the program. 

With new attention focused on REAP 

as a key USDA climate program it is 

more important and pressing than ever 

that the agency take strong action to 

simplify the REAP grant application 

process.’’ 

Agency response: The updated rule 

adopts certifications related to applicant 

eligibility, modifies the feasibility study 

requirement, lessens the technical 

report requirements, and streamlines the 

annual reporting process. The Agency 

continues to look for additional 

efficiencies while remaining compliant 

with federal grant requirements and the 

REAP statute which mandates three 

tiers of applications. 

Comment 12: Ebenezer MGMT, LLC 

commented that in ‘‘4280.103 

Definitions, Small business means (A) 

Number of employees If Number of 

Employees is the SBA criteria to 

determine eligibility. Tax returns or 

annual receipt information should not 

be required as part of the submission. 

Tax returns are not needed for any other 

portion of applications that are under 

$200,000 in size. Tax returns should not 

be required if not needed for eligibility 

or scoring.’’ 

‘‘4280.103 Definitions, Small business 

means (B) Calculation of annual receipts 

Requiring 5 years of annual receipts 

information is excessive. Current rule 

utilizes three years. The extra 

paperwork and time spent accumulating 

and reviewing will not add substantially 

to any changes in eligibility. Rule does 

not state what types of records are 

required to document; it is hoped tax 

returns would not be the only source of 

documentation that could be used.’’ 

Agency response: The Agency agrees 

that employee numbers can be verified 

using means other than tax returns and 

this is consistent with existing Agency 

policy. The Agency is bound to use the 

SBA definitions which have moved to a 

5-year average. The alternative size 

standard may also be used. Please note 

that the new rule allows for certification 

of eligibility without providing all 

documentation to streamline the 

application process. If the Agency 

determines that the application needs 

additional documentation to support the 

applicant’s eligibility, the Agency will 

accept tax return information, financial 

statements or other means that support 

the income or employee numbers. 

Comment 13: Ebenezer MGMT, LLC 

commented that ‘‘the current DUNS 

(UEI) and System for Awards 

Management process continues to be 

slow and onerous on applicants. 

Applicants need to register in SAM.gov 

which most recently revised the website 

making the site less user friendly than 

the past, if there are problems the 

applicant must contact the Federal 

Service Desk or the Defense Logistics 

Agency depending on what stage the 

registration is in, making the process for 

the applicant difficult and cumbersome. 

These agencies have little knowledge of 

agriculture and the types of businesses 

and structures they use. Obtaining the 

SAM registration is the biggest 

roadblock to applicant participation in 

the program. Simply put, the process is 

not set up for grant purposes. Since 

USDA Rural Development NRCS does 

not require DUNS/SAM registration for 

their grant programs; REAP should also 

be exempt for any requirement.’’ 

Agency response: The Agency 

acknowledges the concerns with the 

SAM registration process but must 

require SAM registration in accordance 

with 2 CFR part 25. The 2 CFR part 

25.110(c)(2)(iii) allows recipients a 30- 

day window after award to complete 

their registration in exigent 

circumstances. 

Comment 14: Since the guarantee 

program components have been 

removed from the regulation; Ebenezer 

MGMT, LLC questions ‘‘why such 

excessive financial information is 

required. This is a grant program; other 

than to prove eligibility and ability to 

operate; additional information should 

not be required. For a simple solar 

installation or energy efficiency 

installation when a feasibility study is 

not required; the financial information 

adds nothing to the grant review 

process. The financial information 

would be important for a guarantee 

review; however, for a grant program it 

is unnecessary and a waste of staff time 

to review. Nothing is gained by having 

the additional information.’’ 

Agency response: The statute requires 

more documentation for applications 

with larger project costs. Financial 

statements are used by staff to review 

the financial stability of the applicant 

entity and to ensure the viability of the 

proposed project. A risk evaluation is 

required for grants as noted in 2 CFR 

200.206(b). 

Comment 15: ELPC commented that 

‘‘REAP benefits should be available to 

all in agriculture, including historically 

underserved and disadvantaged farmers. 

We welcome Secretary Vilsack’s 

commitment to addressing historical 

discrimination against Black Farmers by 

USDA. This commitment should 

include REAP. 

ELPC supports awarding State 

Director and Administrator priority 

points for applications from unserved or 

under-served socially-disadvantaged 

groups. These points should be required 

across the country, so the USDA ensures 

equity in the program, with increased 

attention, outreach and education. 

USDA should engage in specific 

outreach to these communities to help 

them learn of program availability and 

benefits and to assist in the application 

process.’’ 

Agency response: The Agency agrees 

with the commentor and continues to 

look for ways to diversify program 

participation. REAP is a pilot program 

for the Justice40 Initiative where at least 

40 percent of overall benefits from 

Federal investments in climate and 

clean energy go to disadvantaged 

communities. 

Comment 16: ELPC states that ‘‘to 

substantially simplify the REAP 

program, the USDA should adopt a 

rebate program to broadly deliver energy 

savings and clean energy savings. A 

REAP rebate would cover pre-approved 

technologies that cut energy costs and 

carbon pollution. This could be applied 

to grants under $20,000 to ease access 

to the program and facilitate more rapid 

deployment of energy efficiency and 

renewable energy systems in rural 

communities. 

Such approaches are used in some 

state energy programs and they provide 

funding on a first-come, first-served 

basis. Adopting a rebate program would 

help the USDA address several program 

priorities, including simplification, 

improving equity and providing broader 

geographic coverage.’’ 

Agency response: The REAP statute 

does not provide flexibility to 

administer a rebate or other payment 

program. As such, the Agency can only 

administer grant and guaranteed loan 

program funding. 

Comment 17: ‘‘ELPC encourages the 

USDA to enable dual or combined 


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Federal Register / Vol. 87, No. 39 / Monday, February 28, 2022 / Rules and Regulations 10943 

applications and awards under the 

Energy Audits and Renewable Energy 

Development Assistance (EA/REDA) 

subprogram as much as possible in 

program application and administration. 

This change would allow grant 

recipients to apply for and receive 

grants for providing both energy audits 

and renewable energy development 

assistance. Importantly, the enabling 

legislation does not call for separation. 

This change will improve EA/REDA 

continuity from learning with energy 

audits to acting with investments for 

energy savings and renewable energy 

production. Energy audits, in 

themselves, do not result in energy 

changes but with follow through in 

development advice more action is 

likely. Facilitating dual EA and REDA 

awards will help move projects forward 

in the development pipeline from 

problem identification to understanding 

options and implementing solutions. 

As regards a specific program change 

mentioned in the draft rule, we 

encourage the USDA to allow for 

‘‘funding to train individuals to become 

qualified to perform EA or REDA 

assistance’’ in those cases where the 

applicant has already demonstrated they 

have ‘‘experienced resource providers at 

time of application.’’ Especially in this 

economy, organizations need to address 

inevitable turnover in staff over time. 

This change also helps states to build 

REAP capacity by growing the ranks of 

energy experts. 

ELPC supports the ‘‘minimum score 

of 40 points to compete for EA/REDA 

funding’’ for the purpose of maintaining 

program quality.’’ 

Agency response: The Agency allows 

an applicant to apply for one EA and 

one REDA in a fiscal year so that both 

tasks may be undertaken by the same 

entity; however, separation allows for 

an easier way to track project impacts. 

For example, the Agency could verify if 

EEI applications for a particular state 

increased in future years as a result of 

having EA audit services. Furthermore, 

the EA component requires that 25 

percent of the cost of the energy audit 

be paid by the ag producer or rural 

small business where the REDA 

component does not have a similar 

requirement. Separation allows the 

Agency to easily track that this 

requirement is met for EA projects. The 

Agency has limited funding for EA/ 

REDA and wants to ensure that funds 

are used for services that directly 

support rural small businesses and ag 

producers rather than professional 

development for the recipient 

organization to train auditors. 

Comment 18: ‘‘ELPC supports State 

Director and Administrator priority 

points for applications including underrepresented technologies. But the USDA 

needs to take steps beyond point scoring 

to diversify technology support. 

The USDA has taken steps in the past 

to increase technology diversity in 

determining REAP awards. The USDA 

employed a ‘‘normalization’’ process 

developed by the National Renewable 

Energy Laboratory (NREL). The 

normalization process took place after 

proposals were all scored and sought to 

preserve some degree of balance among 

the technologies supported in the 

program. The normalization process, 

however, was abandoned after it became 

burdensome. 

The USDA should implement a 

simpler approach with a grants reserve 

fund as described by the Ag Energy 

Coalition to maintain technology 

diversity among major energy types 

such as solar, wind, biomass, energy 

efficiency, hydropower, etc. In 

implementing the grants reserve fund 

and to the extent adequate applications 

are available, the agency should apply a 

minimum score of 40 points or more, as 

used elsewhere in program 

administration.’’ 

Agency response: The Agency 

acknowledges that there are other ways 

beyond scoring to maintain technology 

diversity. However, with limited staffing 

resources, it would be difficult for the 

Agency to complete the normalization 

process and still meet statutory 

obligation deadlines. Limited staff 

resources and the program’s continued 

growth challenges the Agency’s ability 

to add another layer of complexity in 

processing applications. 

Comment 19: ELPC states that ‘‘in the 

2016 the USDA released a report, USDA 

Building Blocks for Climate Smart 

Agriculture and Forestry. The Building 

Blocks report identified REAP as a key 

USDA program for addressing climate 

change. In Congress, REAP is often 

regarded as a key program for reducing 

carbon pollution from the agricultural 

sector and is included in legislation to 

scale up the program. 

The USDA needs to act now to 

increase the emphasis on environmental 

benefits of the REAP program, beginning 

with increasing the share of program 

points attributed to environmental 

benefits. For example, scoring should 

increase for projects that provide nonenergy environmental benefits such as 

water conservation and protection. 

With the growing climate crisis, the 

agency also needs to act now to develop 

practice and standards for carbon 

pollution reduction by technology that 

reflect modern science on life cycle 

impacts of each technology. This is 

urgent and requires USDA action as 

soon as possible.’’ 

Agency response: The Agency 

acknowledges this concern and is 

exploring environmental project 

benefits via the Justice40 Initiative. 

Comment 20: CROPP commented that 

‘‘the revised RES residential language 

will significantly limit program access 

and increase the application burden 

experienced by small and mid-size 

family farms; farms owned and operated 

by a single-family unit that resides on 

the farm. The majority of CROPP 

Cooperative’s nearly 1,800 farmermembers live and work on the same 

property that comprises the family farm. 

The final rule’s revised RES residential 

language does not specify what ‘‘greater 

degree of documentation’’ will be 

required for a RES project where a 

residence is closely associated with an 

agriculture operation to ensure that 50 

percent or greater of energy generated by 

the RES will benefit the farm. 

Providing no explanation of the 

‘‘greater degree of documentation’’ 

required could prove costly and time 

consuming, especially for small to midsize farms, and may require professional 

services above and beyond that which is 

typically provided by a RES installer/ 

vendor. 

CROPP Cooperative uses a residential 

audit to verify if 50 percent or greater 

of energy generated by the RES, will 

benefit the farm. It is not clear if a 

residential audit satisfies the intent of 

the rule change. 

More generally, this continually 

elevated residential-use prohibition 

seems a distraction and does not seem 

to recognize the dynamic of many 

family-run businesses which may have 

home offices or connected facilities.’’ 

Agency response: The updated rule 

removes the ‘‘certification only’’ option 

for projects. All other processes remain 

the same with the goal of ensuring 

sufficient documentation that 50 

percent or more of the proposed energy 

to be generated will benefit the 

agricultural producer or rural small 

business. The Agency has been 

requiring clarifying documentation on 

this provision for some time. The 

Agency did not intend to add burden by 

removing the ‘‘certification only’’ 

option. Instead, it was intended to 

facilitate consistency in processing 

applications while ensuring there is 

adequate file documentation that 50 

percent or more of the projected 

renewable energy will benefit the 

agricultural producer or rural small 

business. The residential audit should 

be acceptable to meet the requirement 

provided it clearly establishes the 

amount of historical energy consumed 


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10944 Federal Register / Vol. 87, No. 39 / Monday, February 28, 2022 / Rules and Regulations 

1 12 U.S.C. 1751 et seq. 

by the residence to allow for the 

calculation of historical business energy 

use from total energy consumption. 

Comment 21: CROPP would like an 

adjustment to $20,000 or Less Funding 

Pool. 

‘‘With nearly 15 years’ experience 

with REAP applications, we believe that 

increasing the maximum award request 

in the smaller project funding pool is 

long overdue and will significantly 

increase program access and accelerate 

renewable energy projects in rural areas. 

Currently, the average small to midsize Organic Valley dairy requires a 

40kW–50kW RES to offset 100% of the 

farm’s non-renewable energy 

consumption. Our estimation is a solar 

array to service this energy need is in 

the range of $130,000–$150,000, which 

would exceed the threshold of 

maximum allowed cost-share in the 

$20,000 funding pool. We recommend 

increasing the maximum award request 

to $40,000 in the smaller project 

funding pool. A simple adjustment for 

inflation since the program’s start would 

validate an increase and be more 

reflective of the overall needs of farmers 

and rural businesses in this category of 

need. It is our experience that RES in 

the 40kW–50kW range do not receive 

support in the larger, unrestricted 

funding pool. This pool is typically 

obligated to a very small number of 

large RES projects.’’ 

Agency response: The Agency has 

concern that fewer projects would be 

funded by the suggested change. The 

$20,000 or less maximum award request 

limitation would require a statutory 

change. 

Comment 22: CROPP says it has been 

their experience that ‘‘significant delays 

(12+ months) in the obligation of funds 

at the state level is impacting project 

success and farmer interest in the 

program. Historically, the obligation of 

funds has been within a timeframe of 

three to six months. Within the previous 

two years, we have seen the obligation 

timeframe extend to 12+ months. 

Administrative delays need to be 

addressed to ensure that project bids 

and farmer costs remain timely and 

relevant to avoid significant unexpected 

cost and installation burdens. It is 

unacceptable to expect an applicant to 

maintain contractual obligations that 

extend out as far as a year, as material 

and labor costs, as well as service 

availability, fluctuate sometimes 

monthly.’’ 

Agency response: Obligation of funds 

is tied to annual application and 

statutory obligation deadlines. October 

31 is the application deadline for grant 

requests of $20,000 or less that wish to 

compete for the first half of the state 

allocation of set-aside funds. March 31 

is the application deadline for grants 

requests of $20,000 or less that wish to 

compete for the second half of the state 

allocation of set-aside funds. March 31 

is also the deadline for all other REAP 

applications regardless of the size of the 

grant request. Complete and eligible 

projects with completed environmental 

reviews are able to compete for funding. 

Applicants should contact Agency staff 

early in the process to discuss 

application requirements including the 

environmental review process. 

The Agency appreciates the interest of 

the American Biogas Council, 

Agriculture Energy Coalition, Ebenezer 

MGMT, LLC, Environmental Law & 

Policy Center and CROPP Cooperative 

with regard to the Rural Energy for 

America Program final rule and thanks 

them for their submissions. The Agency 

confirms the rule without change. 

Karama Neal, 

Administrator, Rural Business and 

Cooperative Service. 

[FR Doc. 2022–03884 Filed 2–25–22; 8:45 am] 

BILLING CODE 3410–XY–P 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Part 702 

[NCUA–2022–0005] 

RIN 3133–AF19 

Prompt Corrective Action: Earnings 

Retention Waivers and Net Worth 

Restoration Plans 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Interim final rule. 

SUMMARY: The NCUA Board (Board) is 

extending two temporary changes to its 

prompt corrective action (PCA) 

regulations to help ensure that federally 

insured credit unions (FICUs) remain 

operational and liquid during the 

COVID–19 crisis. The first amends these 

regulations to temporarily extend the 

Board’s ability to issue an order 

applicable to all FICUs to waive the 

earnings retention requirement for any 

FICU that is classified as adequately 

capitalized. The second extends a 

provision that modifies the specific 

documentation required for net worth 

restoration plans (NWRPs) for FICUs 

that become undercapitalized. These 

temporary modifications will remain in 

place until March 31, 2023. This rule is 

substantially similar to an interim final 

rule that the Board published on April 

19, 2021 (‘‘2021 PCA interim final’’). 

DATES: This rule is effective on February 

28, 2022. Comments must be received 

on or before April 29, 2022. 

ADDRESSES: You may submit written 

comments, identified by RIN 3133– 

AF19, by any of the following methods. 

Please send comments by one method 

only. 

• Federal eRulemaking Portal: 

https://www.regulations.gov. Follow the 

instructions for submitting comments 

for Docket # NCUA–2022–0055. 

• Fax: (703) 518–6319. Include 

‘‘[Your Name]—Comments on ‘‘Prompt 

Corrective Action: Earnings Retention 

Waivers and Net Worth Restoration 

Plans’’ in the transmittal. 

• Mail: Address to Melane ConyersAusbrooks, Secretary of the Board, 

National Credit Union Administration, 

1775 Duke Street, Alexandria, Virginia 

22314–3428. 

• Hand Delivery/Courier: Same as 

mail address. 

Public Inspection: You may view all 

public comments on the Federal 

eRulemaking Portal at https://

www.regulations.gov as submitted, 

except for those we cannot post for 

technical reasons. The NCUA will not 

edit or remove any identifying or 

contact information from the public 

comments submitted. Due to social 

distancing measures in effect, the usual 

opportunity to inspect paper copies of 

comments in the NCUA’s law library is 

currently unavailable. After social 

distancing measures are relaxed, visitors 

may make an appointment to review 

paper copies by calling (703) 518–6540 

or emailing OGCMail@ncua.gov. 

FOR FURTHER INFORMATION CONTACT: 

Policy and Analysis: Kathryn Metzker, 

Risk Officer, or Victoria Nahrwold, 

Associate Director, Office of 

Examination and Insurance, at (703) 

518–6360; Legal: Marvin Shaw, Senior 

Staff Attorney and Thomas Zells, Senior 

Staff Attorney, Office of General 

Counsel, at (703) 518–6540; or by mail 

at: National Credit Union 

Administration, 1775 Duke Street, 

Alexandria, Virginia 22314. 

SUPPLEMENTARY INFORMATION: 

I. Legal Authority 

The Board is issuing this interim final 

rule pursuant to its authority under the 

Federal Credit Union Act.1 The Act 

grants the Board a broad mandate to 

issue regulations that govern both 

federal credit unions and, more 

generally, all FICUs. For example, 

Section 120 of the Act is a general grant 

of regulatory authority and authorizes 

the Board to prescribe rules and 


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