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

36411 

Vol. 87, No. 117 

Friday, June 17, 2022 

AGENCY FOR INTERNATIONAL 

DEVELOPMENT 

2 CFR Part 700 

RIN 0412–AB01 

USAID Grant Regulations; Removing 

the Program Income Restriction on 

For-Profit Entities 

AGENCY: U.S. Agency for International 

Development. 

ACTION: Proposed rule. 

SUMMARY: The U.S. Agency for 

International Development (USAID) 

proposes to amend the rules for 

administering Federal awards to remove 

a prohibition on for-profit entities from 

adding program income to a Federal 

award. This change allows any USAID 

assistance recipient—whether nonprofit 

or for-profit—to use the ‘‘addition 

method’’ for managing program income 

under a Federal award. This will align 

USAID’s approach to program income 

with other Federal agencies. 

DATES: Comments must be received no 

later than August 16, 2022. 

ADDRESSES: Submit comments, 

identified by the title of the action and 

Regulatory Information Number (RIN) 

through the Federal eRulemaking Portal 

at https://www.regulations.gov by 

following the instructions for submitting 

comments. Please include your name, 

company name (if any), and ‘‘0412– 

AB01’’ on any attachments. If your 

comment cannot be submitted using 

https://www.regulations.gov, please 

email the point of contact in the FOR

FURTHER INFORMATION CONTACT section of 

this document for alternate instructions. 

FOR FURTHER INFORMATION CONTACT: 

Lyudmila Bond, USAID/M/OAA/P, 

202–916–2622, policymailbox@

usaid.gov. 

SUPPLEMENTARY INFORMATION: 

A. Instructions 

All comments must be in writing and 

submitted through the method specified 

in the ADDRESSES section above. All 

submissions must include the title of 

the action and RIN for this rulemaking. 

Please include your name, title, 

organization, postal address, telephone 

number, and email address in the text 

of the message. 

All comments will be made available 

at http://www.regulations.gov for public 

review without change, including any 

personal information provided. We 

recommend that you do not submit 

information that you consider 

Confidential Business Information (CBI) 

or any information that is otherwise 

protected from disclosure by statute. 

USAID will only address substantive 

comments on the rule. USAID may not 

consider comments that are 

insubstantial or outside the scope of the 

proposed rule. 

B. Background 

In 1995, USAID established its own 

program-specific assistance regulation 

prohibiting the use of the ‘‘addition 

method’’ by any recipient that is a forprofit entity. The interim final rule, 

Administration of Assistance Awards to 

US Non-Governmental Organizations, 

60 FR 3744, January 19, 1995, was 

codified at 22 CFR part 226. Prior to 

2013, Government-wide guidance on 

assistance awards was contained in 

several Office of Management and 

Budget (OMB) circulars. Agencies 

promulgated their own assistance award 

guidance in policy statements and 

regulations. In 2014, OMB consolidated 

and updated its guidance in the interim 

final rule, Uniform Administrative 

Requirements, Cost Principles, and 

Audit Requirements for Federal Awards 

(commonly referred to as the ‘‘Uniform 

Guidance’’), at 79 FR 75867, December 

26, 2014, and codified at 2 CFR part 

200. Program income is defined in 2 

CFR 200.1, with 2 CFR 200.307(e) 

describing the three methods for 

recipients to account for program 

income under an award: deduction, 

addition, and cost share/matching. In 

2015, USAID published its final rule at 

80 FR 55721, October 19, 2015, adopting 

the Uniform Guidance and re-codifying 

its own regulations in 2 CFR part 700. 

At that time, OMB’s instructions were 

that a change to agency-specific policy 

must be done separately from the 

adoption of 2 CFR part 200. Thus, the 

current USAID regulation, 2 CFR 

700.13(a)(2) (Additional Provisions for 

For-Profit Entities) extended the USAIDspecific restriction without any 

revisions. 

C. Analysis 

The purpose of USAID’s action to 

delete the prohibition on for-profit 

recipients adding earned program 

income to Federal awards is to expand 

and extend the activities that USAID 

supports, when these activities are 

implemented by a for-profit entity. 

When program income is generated, the 

addition method means that recipients 

may add such income back into the 

award to continue supporting the 

activity. Section 2 CFR 200.307(e)(2) 

requires that the added ‘‘program 

income must be used for the purposes 

and under the conditions of the Federal 

award.’’ Thus, all recipients must 

comply with the terms of the award 

regardless of its entity type. 

The Federal agencies that have 

adopted OMB’s Uniform Guidance have 

not generally imposed a prohibition on 

the use of the addition method by forprofit entities, and no Federal agency 

appears to have imposed a complete 

prohibition on the addition method by 

for-profit entities. The Department of 

State, under 2 CFR parts 600 through 

699, adopts the application of the 

Uniform Guidance to its assistance 

awards, including to for-profit entities, 

but does not impose any additional 

program income restrictions on them. 

As such, for-profit entities of assistance 

awards from the Department of State 

may apply the addition method for 

program income. Similarly, the 

Department of Energy, through its 

supplemental regulations under 2 CFR 

parts 910 through 999, adopts the 

application of the Uniform Guidance 

and expressly applies them to for-profit 

entities, but it does not create any 

additional program income regulations. 

Only one Federal agency is known to 

maintain a restriction: the Department 

of Health and Human Services, under 45 

CFR 75.216 through 75.218, does not 

allow for-profit entities to use the 

addition method, except for grants for 

research in its Small Business 

Innovation Research and Small Business 

Technology Transfer Research 

programs. 

Removing this restriction from 2 CFR 

700.13 will support USAID’s Private 

Sector Engagement (PSE) policy by 

leveling the playing field for all 

recipients. In short, the result of this 


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36412 Federal Register / Vol. 87, No. 117 / Friday, June 17, 2022 / Proposed Rules 

change would be that any USAID 

recipient—whether non-profit or forprofit—would be able to use the 

addition method for program income, 

subject to all the same regulations. 

Section 2 CFR 700.13 would continue to 

state that for-profit entities cannot use 

the addition method for using program 

income as profit. 

USAID is seeking public comments on 

the proposed change to 2 CFR 700.13. 

This proposed change will allow 

program income earned by a for-profit 

entity to be added to Federal awards as 

an option under 2 CFR 200.307(e), when 

such program income is used for the 

purposes and under the conditions of 

the Federal award. 

D. Regulatory Considerations 

1. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is not a significant 

regulatory action and, therefore, was not 

subject to review under section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

proposed rule is not a major rule under 

5 U.S.C. 804. 

2. Regulatory Flexibility Act 

The proposed rule will not have an 

impact on a substantial number of small 

entities within the meaning of the 

Regulatory Flexibility Act, 5 U.S.C. 601, 

et seq. Therefore, an Initial Regulatory 

Flexibility Analysis has not been 

performed. 

3. Paperwork Reduction Act 

The proposed rule does not establish 

a new collection of information that 

requires the approval of the Office of 

Management and Budget under the 

Paperwork Reduction Act (44 U.S.C. 

chapter 35). 

List of Subjects in 2 CFR Part 700 

Grant programs, Grants 

administration. 

For the reasons discussed in the 

preamble, USAID proposes to amend 2 

CFR part 700 as set forth below: 

PART 700—UNIFORM 

ADMINISTRATIVE REQUIREMENTS, 

COST PRINCIPLES, AND AUDIT 

REQUIREMENTS FOR FEDERAL 

AWARDS 

■ 1. The authority citation for 2 CFR 

part 700 continues to read as follows: 

Authority: Sec. 621, Pub. L. 87–195, 75 

Stat. 445, (22 U.S.C. 2381) as amended; E.O. 

12163, Sept. 29, 1979, 44 FR 56673; 3 CFR 

1979 Comp., p. 435. 

§ 700.13 [Amended] 

■ 2. Amend § 700.13 by removing and 

reserving paragraph (a)(2). 

Mark Anthony Walther, 

Chief Acquisition Officer. 

[FR Doc. 2022–12736 Filed 6–16–22; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Parts 920 and 944 

[Doc. No. AMS–SC–21–0098; SC21–920–1 

PR] 

California and Imported Kiwifruit; 

Handling Regulations 

AGENCY: Agricultural Marketing Service, 

Department of Agriculture (USDA). 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

implement a recommendation from the 

Kiwifruit Administrative Committee 

(Committee) to modify the handling 

regulations prescribed under the Federal 

marketing order for kiwifruit grown in 

California. This action would revise the 

size and uniformity requirements for all 

varieties of Actinidia chinensis species 

kiwifruit, which is commonly known as 

golden kiwifruit, regulated under the 

marketing order. A corresponding 

change would be made to the kiwifruit 

import regulation as required under 

section 8e of the Agricultural Marketing 

Agreement Act of 1937. 

DATES: Comments must be received by 

August 16, 2022. 

ADDRESSES: Interested persons are 

invited to submit written comments 

concerning this proposed rule. 

Comments must be sent to the Docket 

Clerk, Market Development Division, 

Specialty Crops Program, AMS, USDA, 

1400 Independence Avenue SW, STOP 

0237, Washington, DC 20250–0237; Fax: 

(202) 720–8938; or internet: https://

www.regulations.gov. Comments should 

reference the document number and the 

date and page number of this issue of 

the Federal Register and will be made 

available for public inspection in the 

Office of the Docket Clerk during regular 

business hours, or can be viewed at: 

https://www.regulations.gov. All 

comments submitted in response to this 

proposed rule will be included in the 

record and will be made available to the 

public. Please be advised that the 

identity of the individuals or entities 

submitting the comments will be made 

public on the internet at the address 

provided above. 

FOR FURTHER INFORMATION CONTACT: 

Barry Broadbent, Senior Marketing 

Specialist, or Gary Olson, Regional 

Director, Western Region Field Office, 

Market Development Division, Specialty 

Crops Program, AMS, USDA; 

Telephone: (503) 326–2724, or Email: 

Barry.Broadbent@usda.gov or 

GaryD.Olson@usda.gov. 

Small businesses may request 

information on complying with this 

regulation by contacting Richard Lower, 

Market Development Division, Specialty 

Crops Program, AMS, USDA, 1400 

Independence Avenue SW, STOP 0237, 

Washington, DC 20250–0237; 

Telephone: (202) 720–2491, or Email: 

Richard.Lower@usda.gov. 

SUPPLEMENTARY INFORMATION: This 

action, pursuant to 5 U.S.C. 553, 

proposes to amend regulations issued to 

carry out a marketing order as defined 

in 7 CFR 900.2(j). This proposed rule is 

issued under Marketing Order No. 920, 

as amended (7 CFR part 920), regulating 

the handling of kiwifruit grown in 

California. Part 920, (referred to as the 

‘‘Order’’) is effective under the 

Agricultural Marketing Agreement Act 

of 1937, as amended (7 U.S.C. 601–674), 

hereinafter referred to as the ‘‘Act.’’ The 

Committee locally administers the 

Order and comprises kiwifruit growers 

operating within the production area, 

and a public member. 

This proposed rule is also issued 

under section 8e of the Act (7 U.S.C. 

608e–1), which provides that whenever 

certain specified commodities, 

including kiwifruit, are regulated under 

a Federal marketing order, imports of 

these commodities into the United 

States are prohibited unless they meet 

the same or comparable grade, size, 

quality, or maturity requirements as 

those in effect for domestically 

produced commodities. 

The Agricultural Marketing Service 

(AMS) is issuing this proposed rule in 

conformance with Executive Orders 

12866 and 13563. Executive Orders 

12866 and 13563 direct agencies to 

assess all costs and benefits of available 

regulatory alternatives and, if regulation 

is necessary, to select regulatory 

approaches that maximize net benefits 


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