This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

14354

Vol. 62, No. 58

Wednesday, March 26, 1997

DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service

Rural Utilities Service

7 CFR Part 4284

RIN 0570–AA20

Rural Cooperative Development Grants

AGENCIES: Rural Business-Cooperative

Service and Rural Utilities Service,

USDA.

ACTION: Proposed rule.

SUMMARY: The Rural BusinessCooperative Service (RBS) proposes to

revise its regulations published

previously under Rural Technology

Development Grants (RTDG). 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 RTDG, 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. 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.

DATES: Comments must be submitted on

or before April 25, 1997.

ADDRESSES: Submit written comments

in duplicate to the Director, Regulations

and Paperwork Management Division,

Rural Housing Service, USDA, Stop

0743, 1400 Independence Avenue, SW.,

Washington, DC 20250–0743.

Comments may also be submitted via

the internet by addressing them to:

comments@rus.usda.gov and must

contain ‘‘Rural Cooperative

Development Grants’’ in the subject. All

written comments will be available for

public inspection at the above address

during normal working hours.

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 proposed rule in

conformance with Executive Order

12866, and 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 12778

This proposed 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

This proposed rule has been reviewed

with regard to the requirements of the

Regulatory Flexibility Act (5 U.S.C.

601–612). 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

RTDG 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.

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. This proposed
Federal Register / Vol. 62, No. 58 / Wednesday, March 26, 1997 / Proposed Rules 14355

rule does not impose any new

information or recordkeeping

requirements from those approved by

OMB. Public reporting burden for this

collection of information is estimated to

vary from 30 minutes to 8 hours per

response, with an average of 1.85 hours

per response, including time for

reviewing instructions, searching

existing data sources, gathering and

maintaining the data needed, and

completing and reviewing the collection

of information. Send comments

regarding this burden estimate or any

other aspect of this collection of

information, including suggestions for

reducing this burden to the Department

of Agriculture, Clearance Officer, OIRM,

Stop 7630, Washington, D.C. 20250.

Background

The RTDG 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

RTDG, 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).

Other Regulations Affected

Conforming changes which are

necessary as a result of the revisions

proposed to part 4284, subpart F will be

done at the Final Rule stage.

List of Subjects 7 CFR Part 4284

Business and industry, Grant

programs—Housing and community

development, Rural areas.

Accordingly, chapter XLII, title 7,

Code of Federal Regulations, is

proposed to be amended as follows:

PART 4284—GRANTS

1. The authority citation for part 4284

is revised 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

2. 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 policies

and authorizations and sets forth

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 which

will promote the development of new

services and products that can be

produced or provided in rural areas,

new processes that can be utilized in the

production of products in rural areas, or

new enterprises that can add value to

on-farm production through processing

or marketing. 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—The undertaking for which

funds will be used to develop or operate

a cooperative development center.

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.

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 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.

Rural Development—Rural

Development mission area.

Servicing office—Any Rural

Development State Office or successor

office.
14356 Federal Register / Vol. 62, No. 58 / Wednesday, March 26, 1997 / Proposed Rules

State—Any of the 50 States, the

District of Columbia, the

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 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

and are not otherwise considered a part

of an urbanized or urbanizing area, as

defined in this section, are not in a

nonrural area.

Urbanizing area—A community

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 be disregarded. 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 7 CFR

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 and feasibility

studies that may be useful to

individuals, cooperatives, small

businesses, and other similar entities in

rural areas served by the center.

(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.

(c) Providing training and instruction

for individuals, cooperatives, small

businesses, and other similar entities in

rural areas served by the center.

(d) Providing loans and grants to

individuals, cooperatives, small

businesses, and other similar entities in

rural areas served by the center.

(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.

§ 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 made under

this subpart.

(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.

(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 handicap;

the requirements of the Age

Discrimination Act of 1975 which

prohibits discrimination on the basis of

age; and title III of the Americans with

Disabilities Act, Public Law 101–336,

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 part 1940, subpart G of this title must

be met. 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.

(2) Technical assistance. An

application for a technical assistance

project is generally excluded from the

environmental review process by

§ 1940.333 of this title. However, as

further specified in that section, 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.
Federal Register / Vol. 62, No. 58 / Wednesday, March 26, 1997 / Proposed Rules 14357

(3) Applications for grants to provide

financial assistance to third-party

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 financial assistance to third

parties who will undertake eligible

projects with such assistance. The

Agency will review the preapplication,

supporting materials, and any required

‘‘Request for Environmental

Information’’ and initiate an appropriate

environmental review for the

preapplication. This assessment will

focus on the potential cumulative

impacts of the projects as well as any

environmental concerns or problems

that are associated with individual

projects 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 thirdparty 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. See

7 CFR part 3017 and RD Instruction

1940–M (available in any Rural

Development State Office) for further

guidance.

(d) Restrictions on lobbying. All grants

must comply with the lobbying

restrictions set forth in 7 CFR part 3018.

(e) Excess capacity or transfer of

employment. If a proposed grant is for

more than $1 million and will increase

direct employment by more than 50

employees, the applicant will be

requested to provide 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,

7 CFR parts 3015, 3017, 3019, and 3051,

as appropriate, and established RBS

guidelines.

(g) National Historic Preservation Act

of 1966. All projects will be in

compliance with the National Historic

Preservation Act of 1966 in accordance

with part 1901, subpart F of this title.

(h) Uniform Relocation Assistance

and Real Property Acquisition Policies

Act. All projects must comply with the

requirements set forth in 7 CFR part 21.

(i) Flood plains and wetlands. All

projects must comply with Executive

Order 11988, ‘‘Flood Plain

Management,’’ and Executive Order

11990, ‘‘Protection of Wetlands.’’

(j) Flood or mudslide hazard area

precautions. If the grantee financed

project is in a flood or mudslide area,

flood or mudslide insurance must be

provided.

(k) 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.

(l) 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 (see RD Instruction 1940–J,

available in any Rural Development

State Office).

§ 4284.528 Application processing.

(a) Preapplications.

(1) Applicants will file an original and

one copy of the ‘‘Application for Federal

Assistance (For Non-construction),’’

with the appropriate Rural Development

State Office. This form is available in

any 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) 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) 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 7

CFR parts 3015 and 3019 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) Budget and description of the

accounting system to be used.

(v) 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

either a resolution or a written
14358 Federal Register / Vol. 62, No. 58 / Wednesday, March 26, 1997 / Proposed Rules

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) Method and rationale used to

select the areas or businesses that will

receive the service.

(x) Brief description of how the work

will be performed and whether

organizational staff, consultants or

contractors will be used.

(xi) 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 that

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) 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, the

preapplication must include the

agreement proposed to be used between

the applicant and the ultimate

recipients that includes 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 set forth

in this subpart, including 7 CFR parts

3015 and 3019 as applicable.

(B) Provisions that the ultimate

recipient will comply with debarment

and suspension requirements contained

in 7 CFR part 3017 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) 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 time frames 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, which

will follow the final rulemaking notice,

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;

and

(7) evidence transferability or

demonstration value to assist rural areas

outside of project area.

(b) Each preapplication for assistance

will be carefully reviewed in accordance

with the priorities established in this
Federal Register / Vol. 62, No. 58 / Wednesday, March 26, 1997 / Proposed Rules 14359

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.

§§ 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. The

grantee may not provide its contribution

at the end of the grant 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 set

forth 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 7 CFR

parts 3015 and 3019, 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 U.S.

Department of Agriculture 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 0575–0006. You are not

required to respond to this collection of

information unless it displays a valid

OMB control number.

Dated: March 17, 1997.

Jill Long Thompson,

Under Secretary, Rural Development.

[FR Doc. 97–7743 Filed 3–25–97; 8:45 am]

BILLING CODE 3410–XY–U

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 96–CE–51–AD]

RIN 2120–AA64

Airworthiness Directives; Mooney

Aircraft Corporation Models M20F,

M20J, and M20L Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Notice of proposed rulemaking

(NPRM).

SUMMARY: This document proposes to

adopt a new airworthiness directive

(AD) that would apply to Mooney

Aircraft Corporation (Mooney) Models

M20F, M20J, and M20L airplanes. The

proposed action would require

removing the fuel cap retaining lanyard

from the fuel filler cap assemblies. A

report of lost engine power during flight

because of fuel starvation prompted the

proposed action. The investigation

revealed that the airplane fuel float

became trapped by the fuel cap

retaining lanyard, keeping the float from

following the fuel level. This condition

caused the pilot to get a false fuel

quantity reading. The actions specified

by the proposed AD are intended to

prevent loss of engine power and fuel

depletion during flight caused by a false

fuel gauge reading.

DATES: Comments must be received on

or before May 30, 1997.

ADDRESSES: Submit comments in

triplicate to the Federal Aviation

Administration (FAA), Central Region,

Office of the Assistant Chief Counsel,

Attention: Rules Docket No. 96–CE–51–

AD, Room 1558, 601 E. 12th Street,

Kansas City, Missouri 64106. Comments

may be inspected at this location

between 8 a.m. and 4 p.m., Monday

through Friday, holidays excepted.

Service information that applies to the

proposed AD may be obtained from

Mooney Aircraft Corporation, Louis

Schreiner Field, Kerrville, Texas 78028.

This information also may be examined

at the Rules Docket at the address above.