This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

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

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

5349

Vol. 70, No. 21

Wednesday, February 2, 2005

DEPARTMENT OF AGRICULTURE 

Rural Utilities Service 

7 CFR Parts 1700 and 1709 

RIN 0572–AB91 

Assistance to High Energy Cost Rural 

Communities

AGENCY: Rural Utilities Service, USDA.

ACTION: Direct final rule.

SUMMARY: The Rural Utilities Service 

(RUS) is adopting regulations 

implementing its financial assistance 

programs for rural communities with 

extremely high energy costs. These 

programs are authorized under section 

19 of the Rural Electrification Act of 

1936, as amended. This direct final rule 

is intended to establish and clarify 

eligibility and application requirements, 

the review and approval process, and 

grant administration procedures for RUS 

grants to rural communities with 

extremely high energy costs and for 

grants to State entities for bulk fuel 

revolving loan funds. This publication 

of these rules will assure timely and 

effective distribution of grant funds to 

eligible rural communities and State 

entities.

DATES: This rule will become effective 

on March 21, 2005, unless RUS receives 

written adverse comments or a written 

notice of intent to submit adverse 

comments on or before March 4, 2005. 

If such comments or notice is received, 

RUS will publish a timely document in 

the Federal Register withdrawing the 

rule. Comments received will be 

considered under the propose rule 

published in this edition of the Federal 

Register in the proposed rule section. 

Written comments must be received by 

RUS or carry a postmark or equivalent 

no later than March 4, 2005.

ADDRESSES: Submit your adverse 

comments or notice of intent to submit 

adverse comments by any of the 

following methods: 

• Federal eRulemaking Portal: Go to 

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

online instruction for submitting 

comments. 

• Agency Web site: http://

www.usda.gov/rus/

index2.Comments.htm. Follow the 

instructions for submitting comments. 

• E-mail: RUSComments@usda.gov.

Include in the subject line of the 

message ‘‘7 CFR 1700 and 1709.’’ 

• Mail: Addressed to Richard Annan, 

Acting Director, Program Development 

and Regulatory Analysis, Rural Utilities 

Service, United States Department of 

Agriculture, 1400 Independence 

Avenue, STOP 1522, Washington, DC 

20250–1522. 

• Hand Delivery/Courier: Addressed 

to Richard Annan, Acting Director, 

Program Development and Regulatory 

Analysis, Rural Utilities Service, United 

States Department of Agriculture, 1400 

Independence Avenue, SW., Room 

5168-S, Washington, DC 20250–1522. 

Instructions: RUS requests a signed 

original and three copies of all written 

comments (7 CFR 1700.4). Comments 

may also be submitted by e-mail at 

RUSComments@usda.gov and must 

contain the phrase ‘‘High Cost Energy 

Grants’’ in the subject line. All 

comments received must identify the 

name of the individual (and the name of 

the entity, if applicable) who is 

submitting the comment. All comments 

received will be posted without changes 

to http://www.usda.

gov.rus.index2.Comments.htm,

including any personal information 

provided. All comments will also be 

available for public inspection during 

regular business hours (7 CFR 1.27(b)).

FOR FURTHER INFORMATION CONTACT:

Karen Larsen, Management Analyst, 

U.S. Department of Agriculture, Rural 

Utilities Service, Electric Program, 1400 

Independence Ave., SW., Stop 1560, 

Room 5165-S, Washington, DC 20250–

1560. Telephone (202) 720–9545, fax 

(202) 690–0717, e-mail address: 

Karen.Larsen@usda.gov.

SUPPLEMENTARY INFORMATION: 

Executive Order 12866 

This direct final rule has been 

determined to be not significant for 

purposes of Executive Order 12866 and 

therefore has not been reviewed by the 

Office of Management and Budget 

(OMB). 

Catalog of Federal Domestic Assistance 

The Catalog of Federal Domestic 

Assistance (CFDA) Program number 

assigned to the High Energy Cost Grant 

and Loan program is 10.859. The State 

Bulk Fuel Revolving Fund grant 

program CFDA program number is 

10.857. The Denali Commission High 

Energy Cost Grant and Loan Program 

CFDA program number is 10.858. The 

Catalog is available on a subscription 

basis from the Superintendent of 

Documents, the Unites States 

Government Printing Office, 

Washington, DC 20402–9325, telephone 

number (202) 512–1800. 

Executive Order 12372 

This program is not subject to the 

requirements of Executive Order 12372, 

‘‘Intergovernmental Review of Federal 

Programs,’’ as implemented under 

USDA’s regulations at 7 CFR part 3015. 

Executive Order 12988 

This direct final rule has been 

reviewed under Executive Order 12988, 

Civil Justice Reform. RUS has 

determined that this rule meets the 

applicable standards provided in 

section 3 of the Executive Order. In 

addition, all state and local laws and 

regulations that are in conflict with this 

rule will not be preempted, no 

retroactive effect will be given to this 

rule, and, in accordance with sec. 212(e) 

of the Department of Agriculture 

Reorganization Act of 1994 (7 U.S.C. 

6912(e)), administrative appeal 

procedures, if any, must be exhausted 

before an action against the Department 

or its agencies may be initiated. 

Executive Order 13132, Federalism 

The policies contained in this direct 

final rule do not have any substantial 

direct effect on states, on the 

relationship between the national 

government and the states, or on the 

distribution of power and 

responsibilities among the various 

levels of government. Nor does this rule 

impose substantial direct compliance 

costs on state and local governments. 

This rule is intended to foster 

cooperation between the Federal 

Government and the states and local 

governments, and reduces, where 

possible, any regulatory burden 

imposed by the Federal Government

5350 Federal Register / Vol. 70, No. 21 / Wednesday, February 2, 2005 / Rules and Regulations 

that impedes the ability of states and 

local governments to solve pressing 

economic, social and physical problems 

in their state. 

Regulatory Flexibility Certification 

It has been determined that the 

Regulatory Flexibility Act is not 

applicable to this rule because RUS is 

not required by 5 U.S.C. 553 (a)(2) or 

any other law to publish a notice of 

proposed rulemaking with respect to the 

subject matter of this direct final rule. 

Unfunded Mandates 

This direct final rule contains no 

Federal mandates (under the regulatory 

provision of Title II of the Unfunded 

Mandates Reform Act of 1995) for State, 

local, and tribal governments or the 

private sector. Therefore, this rule is not 

subject to the requirements of sections 

202 and 205 of the Unfunded Mandates 

Reform Act of 1995. 

Environmental Impact Statement 

This direct final rule has been 

examined under RUS environmental 

regulations at 7 CFR part 1794. The RUS 

Administrator has determined that this 

action is not a major Federal action 

significantly affecting the environment. 

Therefore, in accordance with the 

National Environmental Policy Act of 

1969 (42 U.S.C. 4321 et seq.), an 

Environmental Impact Statement or 

Assessment is not required. 

Information Collection and 

Recordkeeping Requirement 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

chapter 35), RUS invites comments on 

this information collection. Comments 

must be received by April 4, 2005. All 

responses to this notice will be 

summarized and included in the request 

for OMB approval. All comments will 

also become a matter of public record. 

Title: Assistance to High Energy Cost 

Rural Communities. 

Type of Request: Revision of a 

currently approved collection. 

OMB Control No.: 0572–0136. 

Abstract: This grant program will be 

administered by the Electric Program 

within the USDA Rural Utilities Service. 

Section 19 of the Rural Electrification 

Act of 1936, as amended (RE Act) 

authorizes the Secretary of Agriculture, 

acting through RUS, to make grants and 

loans to acquire, construct, extend, 

upgrade and otherwise improve energy 

facilities serving communities in which 

the average residential expenditure for 

home energy is at least 275 percent of 

the national average residential 

expenditure for home energy. 

Section 19 of the RE Act also 

authorizes the Secretary of Agriculture 

to make grants to establish and support 

a revolving fund to provide a more costeffective means of purchasing fuel 

where the fuel cannot be shipped by 

means of surface transportation (the 

State Bulk Fuel Revolving Fund grant 

program). 

This rule sets forth the policies and 

procedures associated with the High 

Cost Energy Grant programs and the 

State Bulk Fuel Revolving Fund Grant 

Program, including the grant application 

and evaluation procedures and ongoing 

administration requirements for the 

programs. The currently approved 

collection of information covers the 

reporting burden associated with the 

High Energy Program. RUS intends to 

amend the collection of information to 

include hours associated with the State 

Bulk Fuel Program. 

Estimated Number of Respondents:

Respondent grant applicants and 

grantees include individuals, business 

or other for-profit entities, not-for-profit 

institutions, and State, local, or tribal 

governments is estimated to be a 

combined total of 46 respondents. 

Estimated Number of Responses per 

Respondent: It is estimated that the total 

number of responses per respondent is 

a combined total of 7.89 responses. 

Estimated Number of Total Annual 

Responses: It is estimated that the 

combined total number of responses is 

187. 

Estimate of Hours Per Response:

Public reporting burden for this 

collection of information is estimated to 

total an average of 8.33 burden hours for 

both programs. 

Estimate of Total Annual Burden: It is 

estimated that the combined total of 

total annual burden hours 931. 

You may request copies of this 

information collection from Mary Pat 

Daskal, Program Development and 

Regulatory Analysis, at (202) 720–7853.

Comments: Comments are invited on: 

(a) Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of RUS, 

including whether the information will 

have practical utility; (b) the accuracy of 

RUS’ estimate of the burden of the 

proposed collection of information 

including the validity of the 

methodology and assumptions used; (c) 

ways to enhance the quality, utility and 

clarity of the information to be 

collected; and (d) ways to minimize the 

burden of the collection of information 

on those who are to respond, including 

through the use of appropriate 

automated, electronic, mechanical, or 

other technological collection 

techniques or other forms of information 

technology. You may send your written 

comments to Mary Pat Daskal, Program 

Development and Regulatory Analysis, 

U.S. Department of Agriculture, STOP 

1522, 1400 Independence Ave., SW., 

Washington, DC 20250–1522. E-mail 

responses may be sent to 

MaryPat.Daskal@usda.gov. All 

responses to this notice will be 

summarized and included in the request 

for OMB approval. All comments will 

also become a matter of public record. 

Background 

In 2000, the Rural Electrification Act 

of 1936, as amended (RE Act) was 

amended to create new financial 

assistance programs for high energy cost 

rural communities (Public Law 106–

472, § 301, Nov. 9, 2000). The new 

section 19 of the RE Act (7 U.S.C. 918a) 

authorizes the Secretary of Agriculture 

through the RUS to: 

• Provide grants and loans to acquire, 

construct, extend, upgrade, and 

otherwise improve energy generation, 

transmission, or distribution facilities 

serving extremely high energy cost 

communities; 

• Provide grants and loans to the 

Denali Commission (a Federal-State 

agency) to acquire, construct, extend, 

upgrade, and otherwise improve energy 

generation, transmission, or distribution 

facilities serving extremely high energy 

cost communities in rural Alaska; and 

• Provide grants to existing State 

government entities for bulk fuel 

revolving funds to provide a more costeffective means of purchasing fuel 

where the fuel cannot be shipped by 

means of surface transportation. 

This rulemaking codifies Agency 

policies and procedures for the RUS 

Assistance to High Energy Cost 

Communities Programs, including 

eligibility, application, and grant 

administration requirements for the 

High Energy Cost Grant Program and the 

Bulk Fuel Revolving Fund Grant 

Program. RUS is deferring issuing 

regulations implementing the loan 

programs authorized under these 

programs because no loan funds have 

been appropriated. The Denali 

Commission High Energy Cost Grants 

and Loan Program is administered by 

means of a Memorandum of 

Understanding and grant agreements 

executed between the RUS and the 

Denali Commission. The Denali 

Commission, a Federal agency, is the 

sole entity that is eligible for grants and 

loans under section 19(a)(2) of the RE 

Act (7 U.S.C. 918a(a)(2)). Applications 

and awards for assistance from the 

Denali Commission using RUS grant 

funds are administered under rules and

Federal Register / Vol. 70, No. 21 / Wednesday, February 2, 2005 / Rules and Regulations 5351

procedures established by the Denali 

Commission. 

During the first years of 

appropriations for these grant and loan 

programs, RUS administered the 

program under the USDA’s general grant 

regulations, 7 CFR 3015, and requested 

competitive grant applications through 

publication of Notices of Funding 

Availability in the Federal Register. 

Because Congressional funding for the 

grant programs has continued, and 

given the high level of interest in the 

grant program, RUS is promulgating 

program-specific regulations that 

supplement the Department-wide grant 

regulation provisions. 

Description of Rule 

RUS is revising 7 CFR part 1700 to 

include amendments and additions to 

the Agency delegations of authority to 

include the Assistance to High Energy 

Cost Rural Communities Programs and 

to delegate responsibility for 

administering the programs to the 

Assistant Administrator, Electric 

Program subject to certain explicit 

reservations to the Administrator. 

The rules add a new part 1709 to 

Chapter XVII of title 7 of the Code of 

Federal Regulations. 

Subpart A sets forth general policies, 

definitions, and administrative 

requirements for the Assistance to High 

Energy Cost Rural Communities 

programs. These provisions supplement 

and do not supplant general USDA and 

government-wide grant requirements. 

Subpart A includes provisions for the 

Administrator to allocate available 

funds among programs, establish 

application periods, and to determine 

and revise energy cost benchmarks for 

eligibility purposes. 

Subpart B sets forth the policies, 

procedures and requirements that are 

specific to the RUS High Energy Cost 

Grant program authorized under section 

19(a)(2) of the RE Act. The rules 

describe eligibility requirements for 

applicants, communities, and projects. 

These provisions are similar to those 

used in the High Energy Cost Grant 

Notices of Funds Availability published 

December 9, 2002 (67 FR 72904) and 

January 23, 2004 (69 FR 3317). Subpart 

B also sets out the general application 

procedures that will be used and the 

evaluation and priority criteria that will 

be used by RUS to conduct solicitations 

for competitive grant applications. RUS 

proposes that detailed information on 

application requirements, application 

submissions, selection criteria weights 

and priorities and updated high energy 

cost eligibility benchmarks will be 

included in the grant announcement 

published for each application cycle. 

Subpart C establishes policies and 

procedures specific to the State Bulk 

Fuel Revolving Fund Grant program 

established under section 19(a)(3) of the 

RE Act. These rules are substantially 

similar to the procedures, policies, and 

definitions used in the Notice of 

Funding Availability published in the 

Federal Register on July 6, 2002 (66 FR 

35584). That notice resulted in a single 

grant application from the State of 

Alaska. Other States and Territories 

may, however, also be eligible to 

participate in this program. 

Accordingly, RUS is adopting 

regulations and procedures for any 

future grant offerings under this 

program. 

Subpart G establishes RUS policy on 

recovery of financial assistance received 

under the loan and grant programs 

administered under this part by 

individuals or entities subsequently 

found to be ineligible or the use of grant 

funds for unauthorized purposes. 

Because of the limited amount of grant 

funds available to extremely high energy 

cost communities, the Agency believes 

it is appropriate to make clear that it 

will exercise whatever authority it has, 

including, but not limited to 

departmental regulations concerning the 

suspension or termination of grant 

agreements under 7 CFR part 3015, 

subpart N, to recover any grant or loan 

funds for which the applicant, 

community, or project is subsequently 

found to be ineligible or that were used 

for unauthorized purposes.

List of Subjects 

7 CFR Part 1700 

Administrative practice and 

procedure, Electric utilities, Grant 

programs—energy, Rural areas. 

7 CFR Part 1709 

Administrative practice and 

procedure, Electric utilities, Grant 

programs—energy, Rural areas.

■ For the reasons set forth in the 

preamble, RUS is amending chapter 

XVII, title 7, of the Code of Federal 

Regulations as follows:

PART 1700—GENERAL INFORMATION

■ 1. The authority citation for part 1700 

continues to read as follows:

Authority: 5 U.S.C. 301, 552; 7 U.S.C. 901 

et seq., 1921 et seq., 6941 et seq., 7 CFR 2.7.

Subpart B—Agency Organization and 

Functions

■ 2. Subpart B is amended by adding 

§ 1700.33 to read as follows:

§ 1700.33 Assistance to High Energy Cost 

Rural Communities. 

RUS, through the Electric Program, 

makes grants and loans to assist high 

energy cost rural communities. The 

Assistant Administrator, Electric 

Program, directs and coordinates the 

assistance to high energy cost rural 

communities program and serves as the 

primary point of contact for applicants, 

grantees, and borrowers.

Subpart C—Loan and Grant Approval 

Authorities

■ 3. Subpart C is amended by adding 

§ 1700.58 to read as follows:

§ 1700.58 Assistance to high energy cost 

rural communities. 

(a) Administrator: The authority to 

approve the following is reserved to the 

Administrator: 

(1) Allocation of appropriated funds 

among high energy cost community 

assistance programs; 

(2) Awards of grants and loans to 

extremely high energy cost 

communities; 

(3) Awards of grants and loans to the 

Denali Commission; 

(4) Awards of grants to State entities 

for State bulk fuel revolving funds; and 

(5) Grant agreements, loan contracts, 

security instruments and all other 

documents executed in connection with 

grants and loans agreements approved 

by the Administrator. 

(b) The Assistant Administrator, 

Electric Program has the authority to 

make any required certifications and to 

approve all grant and loan servicing 

actions not specifically reserved to the 

Administrator.

■ 4. Part 1709 is added to read as follows:

PART 1709—ASSISTANCE TO HIGH 

ENERGY COST COMMUNITIES

Subpart A—General Requirements 

Sec. 

1709.1 Purpose. 

1709.2 Policy. [Reserved] 

1709.3 Definitions. 

1709.4 Allocation of available funds among 

programs. 

1709.5 Determination of energy cost 

benchmarks. 

1709.6 Appeals. 

1709.7 Applicant eligibility. 

1709.8 Electronic submission. 

1709.9 Grant awards and advance of funds. 

1709.10 Ineligible grant purposes. 

1709.11 Award conditions. 

1709.12 Reporting requirements. 

1709.13 Grant administration. 

1709.14 Inspections. 

1709.15 Grant close out. 

1709.16 Performance reviews. 

1709.17 Environmental review. 

1709.18 Civil rights. 

1709.19 Other USDA regulations.

5352 Federal Register / Vol. 70, No. 21 / Wednesday, February 2, 2005 / Rules and Regulations 

1709.20 Member delegate clause. 

1709.21 Audit requirements. 

1709.22 Project changes. 

1709.23–1709.99 [Reserved] 

1709.100 OMB control number.

Subpart B—RUS High Cost Energy Grant 

Program 

1709.101 Purpose. 

1709.102 Policy. 

1709.103–1709.105 [Reserved] 

1709.106 Eligible applicants. 

1709.107 Eligible communities. 

1709.108 Supporting data for determining 

community eligibility. 

1709.109 Eligible projects. 

1709.110 Use of grant funds. 

1709.111 Limitations on use of grant funds. 

1709.112 Ineligible grant purposes. 

1709.113 Limitations on grant awards. 

1709.114 Application process. 

1709.115 Availability of application 

materials. 

1709.116 Application package. 

1709.117 Application requirements. 

1709.118 Submission of applications. 

1709.119 Review of applications. 

1709.120 Evaluation of applications. 

1709.121 Administrator’s review and 

selection of grant awards. 

1709.122 Consideration of eligible grant 

applications under later grant 

announcements. 

1709.123 Evaluation criteria and weights. 

1709.124 Grant award procedures. 

1709.125–1709.200 [Reserved]

Subpart C—Bulk Fuel Revolving Fund Grant 

Program 

1709.201 Purpose. 

1709.202 Policy. [Reserved] 

1709.203 Definitions. 

1709.204–1709.206 [Reserved] 

1709.207 Eligible applicants. 

1709.208 Use of grant funds. 

1709.209 Limitations on use of grant funds. 

1709.210 Application process. 

1709.211 Submission of applications. 

1709.212 Application review. 

1709.213 Evaluation of applications. 

1709.214 Administrator’s review and 

selection of grant awards. 

1709.215 Consideration of unfunded 

applications under later grant 

announcements. 

1709.216 Evaluation criteria and weights. 

1709.217 Grant award. 

1709.218–1709.300 [Reserved]

Subparts D–F—[Reserved]

Subpart G—Recovery of Financial 

Assistance Used for Unauthorized 

Purposes 

1709.601 Policy. 

1709.602–1709.700 [Reserved] 

1709.701–1709.999 [Reserved]

Authority: 5 U.S.C. 301, 7 U.S.C. 901 et 

seq.

Subpart A—General Requirements

§ 1709.1 Purpose. 

The purpose of the Rural Utilities 

Service (RUS) Assistance to High Energy 

Cost Rural Communities Program is to 

help local communities meet their 

energy needs through direct loans and 

grants for energy facilities in qualifying 

extremely high energy cost 

communities, grants and loans to the 

Denali Commission for extremely high 

energy cost communities in Alaska, and 

grants to States to support revolving 

funds to finance more cost effective 

means of acquiring fuel in qualifying 

communities. This subpart sets forth 

definitions and requirements which are 

common to all grant and loan programs 

in this part administered by the RUS 

Electric Program under section 19 of the 

Rural Electrification Act of 1936, as 

amended (RE Act) (7 U.S.C. 918a).

§ 1709.2 Policy. [Reserved]

§ 1709.3 Definitions. 

Administrator means the 

Administrator of the Rural Utilities 

Service (RUS), United States 

Department of Agriculture (USDA). 

Agency means the Rural Utilities 

Service (RUS), an agency of the United 

States Department of Agriculture 

(USDA), or a successor agency. 

Census block means the smallest 

geographic entity for which the U.S. 

Census Bureau collects and tabulates 

decennial census information and 

which are defined by boundaries shown 

on census maps. 

Census designated place (CDP) means 

a statistical entity recognized by the 

U.S. Census Bureau comprising a dense 

concentration of population that is not 

within an incorporated place but is 

locally identified by a name and which 

has boundaries defined on census maps. 

Electric program means the office 

within RUS, and its successor 

organization, that administers rural 

electrification programs authorized by 

the Rural Electrification Act of 1936 (RE 

Act) (7 U.S.C. 901 et seq.) and such 

other programs so identified in USDA 

regulations. 

Extremely high energy costs means 

community average residential energy 

costs that are at least 275 percent of one 

or more home energy cost benchmarks 

identified by RUS and based on the 

latest available information on national 

average residential energy expenditures 

as reported by the Energy Information 

Administration (EIA) of the United 

States Department of Energy. 

Financial assistance means a grant, 

loan, or grant-loan combination issued 

under this part. 

Home energy means any energy 

source or fuel used by a household for 

purposes other than transportation, 

including electricity, natural gas, fuel 

oil, kerosene, liquified petroleum gas 

(propane), other petroleum products, 

wood and other biomass fuels, coal, 

wind and solar energy. Fuels used for 

subsistence activities in remote rural 

areas are also included. 

High energy cost benchmarks means 

the criteria established by RUS for 

eligibility as an extremely high energy 

cost community. Extremely high energy 

cost benchmarks are calculated as 275 

percent of the relevant national average 

household energy benchmarks. 

Indian Tribe means a Federally 

recognized tribe as defined under 

section 4 of the Indian SelfDetermination and Education 

Assistance Act (25 U.S.C. 450b) to 

include ‘‘* * * any Indian tribe, band, 

nation, or other organized group or 

community, including any Alaska 

Native village or regional or village 

corporation as defined in or established 

pursuant to the Alaska Native Claims 

Settlement Act (43 U.S.C. 1601 et seq.), 

that is recognized as eligible for the 

special programs and services provided 

by the United States to Indians because 

of their status as Indians.’’

Person means any natural person, 

firm, corporation, association, or other 

legal entity, and includes Indian tribes 

and tribal entities. 

State means any of the several States 

of the United States, and, where 

provided by law, any Territory of the 

United States or other area authorized to 

receive the services and programs of the 

Rural Utilities Service or the Rural 

Electrification Act of 1936, as amended. 

Target area means the geographic area 

to be served by the grant. 

Target community means the unit or 

units of local government in which the 

target area is located.

§ 1709.4 Allocation of available funds 

among programs. 

The Administrator, in his sole 

discretion, shall allocate available funds 

among the programs administered under 

this part and determine the grant 

application periods under each 

program. In making fund allocations for 

each fiscal year, the Administrator may 

consider the amount of available funds, 

the nature and amount of unfunded 

grant applications and prior awards, 

Agency resources, Agency priorities, 

and any other pertinent information.

§ 1709.5 Determination of energy cost 

benchmarks. 

(a) The Administrator shall establish, 

using the most recent data available, 

and periodically revise, the home 

energy cost benchmarks and the high 

energy cost benchmarks used to 

determine community eligibility for 

high energy cost grant and loan 

programs and the Denali Commission 

high energy cost grants and loans. In

Federal Register / Vol. 70, No. 21 / Wednesday, February 2, 2005 / Rules and Regulations 5353

setting these energy cost benchmarks, 

the Administrator shall review the latest 

available information on home energy 

costs published by the EIA. High energy 

cost benchmarks will be set at 275 

percent of the applicable national 

average home energy cost benchmark as 

determined by the Administrator from 

the published EIA data. Eligibility 

benchmarks shall be published in each 

grant announcement. 

(b) For use in determining eligibility 

for High Energy Cost Grants, the 

Administrator may establish 

benchmarks for national average annual 

household expenditures and for 

national average household per unit 

energy expenditures for major home 

energy sources or fuels, including, but 

not limited to, electricity, natural gas, 

fuel oil, kerosene, liquified petroleum 

gas (propane), other petroleum 

products, wood and other biomass fuels, 

coal, wind and solar energy.

§ 1709.6 Appeals. 

An applicant may appeal a decision 

by the Assistant Administrator, Electric 

Program rejecting an application for 

failure to meet eligibility requirements. 

Applicants may not appeal rating panel 

scores or rankings. An appeal must be 

made, in writing to the Administrator, 

within 10 days after the applicant is 

notified of the determination to reject 

the application. Appeals must state the 

basis for the appeal and shall be 

submitted to the Administrator, Rural 

Utilities Service, U.S. Department of 

Agriculture, 1400 Independence Ave., 

SW., STOP 1500, Washington, DC 

20250–1500. Thereafter, the 

Administrator will review the appeal to 

determine whether to sustain, reverse, 

or modify the original determination. 

The Administrator’s determination shall 

be final. A written copy of the 

Administrator’s decision will be 

furnished promptly to the applicant.

§ 1709.7 Applicant eligibility. 

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 a grant or loan 

under this part until the judgment is 

paid in full or otherwise satisfied. RUS 

financial assistance under this part may 

not be used to satisfy the judgment.

§ 1709.8 Electronic submission. 

Applicants may submit applications 

and reports electronically if so provided 

in the applicable grant announcement 

and grant agreements or if other 

regulations provide for electronic 

submission. Any electronic submissions 

must be in the form prescribed in the 

applicable grant announcement, grant 

agreement, or regulation.

§ 1709.9 Grant awards and advance of 

funds. 

The grantee must execute a grant 

agreement that is acceptable to the 

Agency. The grantee must sign and 

return the grant agreement to the 

Agency, within the time specified, 

before any grant funds will be advanced.

§ 1709.10 Ineligible grant purposes. 

Grant funds under this part may not 

be used to: 

(a) Pay costs of preparing the 

application package for funding under 

programs in this part, or for any finders 

fees or incentives for persons or entities 

assisting in the preparation or 

submission of an application. 

(b) Fund political activities; 

(c) Pay any judgment or debt owed to 

the United States; or 

(d) Pay construction costs of the 

project incurred prior to the date of 

grant award except as provided herein. 

Construction work should not be started 

and obligations for such work or 

materials should not be incurred before 

the grant is approved. 

(1) Applicants may request Agency 

approval for reimbursement of preaward construction obligations if there 

are compelling reasons for proceeding 

with construction before grant approval. 

Such requests may be approved if the 

Agency determines that: 

(i) Compelling reasons, as determined 

by the Agency, exist for incurring 

obligations before grant approval; 

(ii) The obligations will be incurred 

for authorized grant purposes; 

(iii) All environmental requirements 

applicable to the Agency and the 

applicant have been met; 

(iv) The applicant has the legal 

authority to incur the obligations at the 

time proposed, and payment of the 

debts will remove any basis for any 

mechanic’s, material, or other liens that 

may attach to the grant financed 

property: and 

(v) The expenditure is incurred no 

more than 18 months before the date of 

the Administrator’s approval of the 

grant award. 

(2) The Agency may authorize 

payment of approved pre-award project 

construction obligations at the time of 

award approval. The applicant’s request 

and the Agency’s authorization for 

paying such obligations shall be in 

writing.

§ 1709.11 Award conditions. 

In addition to all other grant 

requirements, all approved applicants 

will be required to do the following: 

(a) Enter into a grant agreement with 

the Agency in form and substance 

acceptable to the Agency; 

(b) Request advances or 

reimbursements, as applicable, as 

provided in the grant agreement; and 

(c) Maintain a financial management 

system that is acceptable to the Agency.

§ 1709.12 Reporting requirements. 

To support Agency monitoring of 

project performance and use of grant 

funds, Grantees shall file periodic 

reports, required under 7 CFR part 3015, 

as provided in this part, and the grant 

agreement as follows: 

(a) A financial status report listing 

project expenditures by budget category 

in such form and at such times as 

provided in the grant agreement. 

(b) Project performance reports in 

such form and at such intervals as 

provided in the grant agreement. The 

project performance report shall 

compare accomplishments to the 

objectives stated in the proposal and 

grant agreement. The project 

performance report should identify all 

completed tasks with supporting 

documentation. If the project schedule 

as approved in the grant agreement is 

not being met, the report should discuss 

the problems or delays that may affect 

completion of the project. Objectives for 

the next reporting period should be 

listed. Compliance with any special 

condition on the use of award funds 

should be discussed. Reports are due as 

provided in the grant agreement. 

(c) A final project performance report 

with supporting documentation in such 

form and at the time specified in the 

grant agreement. 

(d) Such other reports as the Agency 

determines are necessary to assure 

effective grant monitoring as part of the 

grant agreement or the grant 

announcement as a condition of the 

grant award or advances of funds.

§ 1709.13 Grant administration. 

The authority to approve 

administrative actions is vested in the 

Administrator except as otherwise 

provided in the RUS delegations of 

authority. Administration of RUS grants 

is governed by the provisions of this 

subpart and subpart B of this part, the 

terms of the grant agreement and, as 

applicable, the provisions of 7 CFR parts 

3015, 3016 and 3017, or their 

successors.

§ 1709.14 Inspections. 

The grantee will permit periodic 

inspection of the grant project 

operations by a representative of the 

Agency.

5354 Federal Register / Vol. 70, No. 21 / Wednesday, February 2, 2005 / Rules and Regulations 

§ 1709.15 Grant closeout. 

Grant closeout is when all required 

work is completed, administrative 

actions relating to the completion of 

work and expenditure of funds have 

been accomplished, the final project 

report has been submitted and found 

acceptable by RUS and RUS accepts 

final expenditure information. No 

monitoring action by RUS of the grantee 

is required after grant closeout. 

However, grantees remain responsible 

in accordance with the terms of the 

grant agreement for compliance with 

conditions on property acquired or 

derived through grant funds.

§ 1709.16 Performance reviews. 

Each grant agreement shall include 

performance criteria and RUS will 

regularly evaluate the progress and 

performance of grantee according to 

such criteria. If the grantee does not 

comply with or does not meet the 

performance criteria set out in the grant 

agreement, the Administrator may 

require amendment of the grant 

agreement, or may suspend or terminate 

the grant pursuant to 7 CFR 2015, 

subpart N.

§ 1709.17 Environmental review. 

(a) All grants made under this subpart 

are subject to the requirements of 7 CFR 

part 1794 or its successor. 

(b) Applicants must address 

environmental aspects of their projects 

in the grant application in sufficient 

detail to allow the Agency to categorize 

the project for purposes of compliance 

with environmental review 

requirements. The grant announcement 

will establish the form and content of 

the environmental information required 

for the application. 

(c) Projects that are selected for grant 

awards by the Administrator will be 

reviewed by the Agency under 7 CFR 

part 1794 prior to final award approval. 

The Agency may require the selected 

applicant to submit additional 

information, including an 

environmental report, environmental 

assessment, or environmental impact 

statement, as may be required, 

concerning the proposed project in 

order to complete the required reviews 

and to develop any project-specific 

conditions for the final grant agreement.

§ 1709.18 Civil rights. 

This program will be administered in 

accordance with applicable Federal 

Civil Rights Law. 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 or national origin. In addition, all 

grants made under this subpart are 

subject to the requirements of section 

504 of the Rehabilitation Act of 1973, as 

amended, which prohibits 

discrimination on the basis of disability; 

the requirements of the Age 

Discrimination Act of 1975, which 

prohibits discrimination on the basis of 

age; and title III of the Americans with 

Disabilities Act, which prohibits 

discrimination on the basis of disability 

by private entities in places of public 

accommodations. Grantees are required 

to comply with certain regulations on 

nondiscrimination in program services 

and benefits and on equal employment 

opportunity including 7 CFR parts 15 

and 15b; and 45 CFR part 90, as 

applicable.

§ 1709.19 Other USDA regulations. 

The grant programs under this part 

are subject to the provisions of other 

departmental regulations, including but 

not limited to the following 

departmental regulations, or their 

successors, as applicable: 

(a) 7 CFR part 3015, Uniform Federal 

Assistance Regulations; 

(b) 7 CFR part 3016, Uniform 

Administrative Requirements for Grants 

and Cooperative Agreements to State 

and Local Governments; 

(c) 7 CFR part 3017, Governmentwide 

Debarment and Suspension 

(Nonprocurement) and 

Governmentwide Requirements for 

Drug-Free Workplace (Grants); 

(d) 7 CFR part 3018, New Restrictions 

on Lobbying; 

(e) 7 CFR part 3019, Uniform 

Administrative Requirements for Grants 

and Agreements with Institutions of 

Higher Education, Hospitals and Other 

Non-profit Organizations; and 

(f) 7 CFR part 3052, Audits of States, 

Local Governments and Non-profit 

Organizations.

§ 1709.20 Member delegate clause. 

Each grant agreement under this part 

shall provide that no member of 

Congress shall be admitted to any share 

or part of a grant program or any benefit 

that may arise there from, but this 

provision shall not be construed to bar 

as a contractor under a grant a publicly 

held corporation whose ownership 

might include a member of Congress.

§ 1709.21 Audit requirements. 

The grantee shall provide the Agency 

with an audit for each year, beginning 

with the year in which a portion of the 

financial assistance is expended, in 

accordance with the following: 

(a) If the grantee is a for-profit entity, 

an RUS Electric or Telecommunication 

borrower or any other entity not covered 

by paragraph (b) of this section, the 

recipient shall provide an independent 

audit report in accordance with 7 CFR 

part 1773, ‘‘Policy on Audits of RUS 

Borrowers’’ and the grant agreement. 

(b) If the grantee is a State or local 

government, or a non-profit corporation 

(other than an RUS Electric or 

Telecommunication Borrower), the 

recipient shall provide an audit in 

accordance with 7 CFR part 3052.

§ 1709.22 Project changes. 

The Grantee shall obtain prior written 

approval from the Agency for any 

change to the scope or objectives of the 

approved grant project.

§§ 1709.23–1709.99 [Reserved]

§ 1709.100 OMB control number. 

The information collection 

requirements in this part are approved 

by the Office of Management and 

Budget and assigned OMB control 

number 0572–0136.

Subpart B—RUS High Energy Cost 

Grant Program

§ 1709.101 Purpose.

This subpart establishes policies and 

procedures for the Rural Utilities 

Service (RUS) High Energy Cost Grant 

Program under section 19(a)(1) of the 

Rural Electrification Act of 1936, as 

amended (7 U.S.C. 918a(a)(1)). The 

purpose of this grant program is to 

assure access to adequate and reliable 

energy services for persons in extremely 

high energy cost communities by 

providing financial assistance to 

acquire, construct, extend, upgrade, and 

otherwise improve energy generation, 

transmission, or distribution facilities 

serving the community.

§ 1709.102 Policy. 

(a) All high energy cost grants will be 

awarded competitively subject to the 

limited exceptions in 7 CFR 

3015.158(d). 

(b) RUS may give priority 

consideration to projects that benefit 

smaller rural communities, 

communities experiencing economic 

hardship, projects that extend service to 

households that lack reliable centralized 

or commercial energy services, and 

projects that correct imminent hazards 

to public safety, welfare, the 

environment or critical community 

energy facilities. RUS may also give 

priority to projects that are coordinated 

with State rural development initiatives 

or that serve a Federally-identified 

Empowerment Zone or Enterprise 

Community (EZ/EC) or a USDAidentified ‘‘Champion Community.’’

Priority consideration will be provided

Federal Register / Vol. 70, No. 21 / Wednesday, February 2, 2005 / Rules and Regulations 5355

through the award of additional points 

under the project selection criteria as 

specified in the grant announcement.

§§ 1709.103–1709.105 [Reserved]

§ 1709.106 Eligible applicants. 

(a) Eligible applicants for grants to 

fund projects serving eligible extremely 

high energy cost communities include 

Persons, States, political subdivisions of 

States, and other entities organized 

under the laws of States. 

(b) Eligible applicants may be forprofit or non-profit business entities 

including but not limited to 

corporations, associations, partnerships, 

limited liability partnerships (LLPs), 

cooperatives, trusts, and sole 

proprietorships. 

(c) Eligible government applicants 

include State and local governments, 

and agencies and instrumentalities of 

States and local governments. 

(d) Indian tribes, other tribal entities, 

and Alaska Native Corporations are 

eligible applicants. 

(e) Individuals are also eligible 

applicants under this program, however 

the proposed grant project must provide 

community benefits and not be for the 

sole benefit of the individual applicant 

or an individual household. 

(f) As a condition of eligibility, the 

applicant must demonstrate the 

capacity: 

(1) to enter into a binding grant 

agreement with the Federal Government 

at the time of the award approval; and 

(2) to carry out the proposed grant 

project according to its terms.

§ 1709.107 Eligible communities. 

(a) An eligible community under this 

program is one in which the average 

home energy costs exceed 275 percent 

of the national average under one or 

more high energy cost benchmarks 

established by RUS based on the latest 

available residential energy information 

from the Energy Information 

Administration (EIA) of the United 

States Department of Energy. RUS will 

update the national and high energy 

cost community benchmarks 

periodically to incorporate any changes 

in national home energy costs reported 

by EIA. RUS will publish the high 

energy cost community benchmark 

criteria in the grant announcement. 

Community eligibility will be 

determined by RUS at the time of 

application based on the criteria 

published in the applicable grant 

announcement. 

(b) The Application must include 

information demonstrating that each 

community in the grant’s proposed 

target area exceeds one or more of the 

RUS high energy cost community 

benchmarks to be eligible for assistance 

under this program. The smallest area 

that may be designated as a target area 

is a 2000 Census block 

(c) The target community may include 

an extremely high cost to serve portion 

of a larger service area that does not 

otherwise meet the criteria, provided 

that the applicant can establish that the 

costs to serve the smaller target area 

exceed the benchmark. 

(d) In determining the community 

energy costs, applicants may include 

additional revenue sources that lower 

the rates or out of pocket consumer 

energy costs such as rate averaging, and 

other Federal, State, or private cost 

contributions or subsidies. 

(e) The applicant may propose a 

project that will serve high energy cost 

communities across a State or region, 

but where individual project 

beneficiaries will be selected at a later 

time. In such cases, to establish 

eligibility, the applicant must provide 

sufficient information in the application 

to determine that the proposed target 

area includes eligible high energy cost 

communities and proposed selection 

criteria to assure that grant funds are 

used to serve eligible communities.

§ 1709.108 Supporting data for 

determining community eligibility. 

The application shall include the 

following: 

(a) Documentation of energy costs.

Documents or references to published or 

other sources for information or data on 

home energy expenditures or equivalent 

measures used to support eligibility, or 

where such information is unavailable 

or does not adequately reflect the actual 

cost of average home energy use in a 

local community, reasonable estimates 

of commercial energy costs. 

(b) Served areas. A comparison of the 

historical residential energy cost or 

expenditure information for the local 

commercial energy provider(s) serving 

the target community or target area with 

the benchmark criteria published by the 

Agency. 

(c) Engineering estimates. Estimates 

based on engineering standards may be 

used in lieu of historical residential 

energy costs or expenditure information 

under the following circumstances: 

(1) Where historical community 

energy cost data are unavailable 

(unserved areas), incomplete or 

otherwise inadequate; 

(2) Where the target area is not 

connected to central station electric 

service to a degree comparable with 

other residential customers in the State 

or region. 

(3) Where historic energy costs do not 

reflect the costs of providing a necessary 

upgrade or replacement of energy 

infrastructure that would have the effect 

of raising costs above one or more of the 

Agency benchmarks. 

(d) Independent Agency review.

Information to support high energy cost 

eligibility is subject to independent 

review by the Agency. The Agency may 

reject applications that are not based on 

credible data sources or sound 

engineering estimates.

§ 1709.109 Eligible projects.

Eligible projects are those that 

acquire, construct, extend, repair, 

upgrade or otherwise improve energy 

generation, transmission or distribution 

facilities serving communities with 

extremely high energy costs. All energy 

generation, transmission and 

distribution facilities and equipment 

used to provide or improve electricity, 

natural gas, home heating fuels, and 

other energy services to eligible 

communities are eligible. Projects 

providing or improving service to 

communities with extremely high 

energy costs through on-grid and offgrid renewable energy technologies, 

energy efficiency, and energy 

conservation projects and services are 

eligible. A grant project is eligible if it 

improves, or maintains energy services, 

or reduces the costs of providing energy 

services to eligible communities. 

Examples of eligible activities include, 

but are not limited to, the acquisition, 

construction, replacement, repair, or 

improvement of: 

(a) Electric generation, transmission, 

and distribution facilities, equipment, 

and services serving the eligible 

community; 

(b) Natural gas distribution or storage 

facilities and associated equipment and 

activities serving the eligible 

community; 

(c) Petroleum product storage and 

handling facilities serving residential or 

community use. 

(d) Renewable energy facilities used 

for on-grid or off-grid electric power 

generation, water or space heating, or 

process heating and power for the 

eligible community; 

(e) Backup up or emergency power 

generation or energy storage equipment, 

including distributed generation, to 

serve the eligible community; and 

(f) Implementation of cost-effective 

energy efficiency, energy conservation 

measures that are part of the 

implementation of a coordinated 

demand management or energy 

conservation program for the eligible 

community, such as, for example, 

weatherization of residences and

5356 Federal Register / Vol. 70, No. 21 / Wednesday, February 2, 2005 / Rules and Regulations 

community facilities, or acquisition and 

installation of energy-efficient or energy 

saving appliances and devices .

§ 1709.110 Use of grant funds. 

(a) Project development costs. Grants 

may be used to fund the costs and 

activities associated with the 

development of an eligible energy 

project. RUS will in no case approve the 

use of grant funds to be used solely or 

primarily for project development costs. 

Eligible project development costs must 

be reasonable and directly related to the 

project and may include the following: 

(1) Costs of conducting, or hiring a 

qualified consultant to conduct, a 

feasibility analysis of the proposed 

project to help establish the financial 

and technical sustainability of the 

project, provided that such costs do not 

exceed more than 10 percent of total 

project costs; 

(2) Design and engineering costs, 

including costs of environmental and 

cultural surveys and consulting services 

necessary to the project and associated 

environmental review, siting and permit 

approvals; and 

(3) Fees for legal and other 

professional services directly related to 

the project. 

(b) Construction costs. Grant funds 

may be used for the reasonable costs of 

construction activities, including initial 

construction, installation, expansion, 

extension, repair, upgrades, and related 

activities, including the rental or lease 

of necessary equipment, to provide or 

improve energy generation, 

transmission, or distribution facilities or 

services; 

(c) Acquisitions and purchase. Grant 

funds may be used for the acquisition of 

property, equipment, and materials, 

including the purchase of equipment, 

and materials, the acquisition or leasing 

of real or personal property, equipment, 

and vehicles associated with and 

necessary for project development, 

construction, and operation. Grant 

funds may be used for the acquisition of 

new or existing facilities or systems 

where such action is a cost-effective 

means to extend or maintain service to 

an eligible community or reduces the 

costs of such service for the primary 

benefit of community residents. 

(d) Grantee cost contributions. Grant 

funds may be applied as matching funds 

or cost contributions under Federal or 

other programs where the terms of those 

programs so allow use of other Federal 

funds.

§ 1709.111 Limitations on use of grant 

funds. 

(a) Planning and administrative costs.

Not more than 4 percent of each grant 

award may be used for the planning and 

administrative expenses of the applicant 

that are unrelated to the grant project. 

(b) Unproven technology. Only 

projects that utilize technology with a 

proven operating history, and for which 

there is an established industry for the 

design, installation, and service 

(including spare parts) of the 

equipment, are eligible for funding. 

Energy projects utilizing experimental, 

developmental, or prototype 

technologies or technology 

demonstrations are not eligible for grant 

funds. The determination by RUS that a 

project relies on unproven technology 

shall be final.

§ 1709.112 Ineligible grant purposes. 

(a) Grant funds may not be used for 

the costs of preparing the grant 

application, finders fees, fuel purchases, 

routine maintenance or other operating 

costs, or purchase of equipment, 

structures or real property not directly 

associated with providing energy 

services in the target community, or, 

except as provided in § 1709.11(d), 

project construction costs incurred prior 

to the date of the grant award. 

(b) In general, grant funds may not be 

used to support projects that primarily 

benefit areas outside of eligible target 

communities. However, grant funds may 

be used to finance an eligible target 

community’s proportionate share of a 

larger energy project. 

(c) Grant funds may not be used to 

refinance or repay the applicant’s 

outstanding loans or loan guarantees 

under the Rural Electrification Act of 

1936, as amended.

§ 1709.113 Limitations on grant awards. 

(a) The Administrator may establish 

minimum or maximum amount of funds 

that may be awarded in a single grant 

application within in any grant cycle in 

order to distribute available grant funds 

as broadly as possible. If the 

Administrator elects to impose a 

minimum or maximum grant amount, 

the limitations will be published in the 

grant announcement. 

(b) The Administrator may restrict 

eligible applicants to a single award of 

grant funds or to a monetary cap on 

grant awards within a grant cycle in 

order to assure that the available grant 

funds are distributed as broadly as 

possible. If the Administrator elects to 

impose a limit or cap on grant awards, 

the terms will be established in the 

grant announcement.

§ 1709.114 Application process. 

The RUS will request applications for 

high energy cost grants on a competitive 

basis by publication of a grant 

announcement as a Notice of Funds 

Availability (NOFA) or Notice of 

Funding Opportunity. The grant 

announcement will establish the 

amount of funds available, the 

application package contents and 

additional requirements, the availability 

of application materials, high energy 

cost community eligibility benchmarks, 

selection criteria and weights, priority 

considerations, and deadlines and 

procedures for submitting applications.

§ 1709.115 Availability of application 

materials. 

Application materials, including 

copies of the grant announcement and 

all required forms and certifications will 

be available by request from the Agency 

and by such other means as the Agency 

may determine. In addition, the Agency 

may make available an application 

guide and other materials that may be of 

assistance to prospective applicants.

§ 1709.116 Application package. 

The requirements for the application 

package will be established in the grant 

announcement. A complete application 

package will consist of the standard 

application for federal assistance (SF–

424 series), as applicable, a narrative 

project proposal prepared in accordance 

with the grant announcement, an RUS 

environmental profile, and such other 

supporting documentation, forms, and 

certifications as required in the grant 

announcement and this part.

§ 1709.117 Application requirements. 

(a) Required forms. The forms 

required for application and where to 

obtain them will be specified in the 

announcement. All required forms must 

be completed, signed and submitted by 

a person authorized to submit the 

proposal on behalf of the applicant. For 

applications and forms that are 

submitted electronically, the application 

must be authenticated as provided in 

the grant announcement. In the case of 

grant applications submitted 

electronically, the applicant may be 

required to provide signed originals of 

required forms prior to and as a 

condition of the grant award. 

(b) Narrative proposal. Each 

application must include a narrative 

proposal describing the proposed 

project and addressing eligibility and 

selection criteria. The grant 

announcement will specify the contents, 

order, and format for the narrative 

proposal. The proposal must include all 

the required elements identified in this 

subsection. The grant announcement 

may establish additional required 

elements that must be addressed in the 

narrative project proposal.

Federal Register / Vol. 70, No. 21 / Wednesday, February 2, 2005 / Rules and Regulations 5357

(1) Executive summary. A summary of 

the proposal should briefly describe the 

project including target community, 

goals, tasks to be completed and other 

relevant information that provides a 

general overview of the project. The 

applicant must clearly state the amount 

of grant funds requested and identify 

any priority ratings for which the 

applicant believes it is qualified. 

(2) Applicant eligibility. The narrative 

and supporting documentation must 

describe the applicant and establish its 

eligibility. 

(3) Community eligibility. This section 

must describe the target area and 

communities to be served by the project 

and demonstrate eligibility. The 

applicant must clearly identify the: 

(i) Location and population of the 

areas to be served by the project; 

(ii) Population of the local 

government division to which they 

belong; 

(iii) Identity of local energy providers; 

and 

(iv) Sources of the high energy cost 

data and estimates used. 

(4) Project eligibility. The narrative 

must describe the proposed project in 

sufficient detail to establish that it is an 

eligible project. 

(5) Project description. The project 

description must: 

(i) Describe the project design, 

materials, and equipment in sufficient 

detail to support a finding of technical 

feasibility; 

(ii) Identify the major tasks to be 

performed and a proposed timeline for 

completion of each task; and 

(iii) Identify the location of the project 

target area and the eligible extremely 

high energy cost communities to be 

served. 

(6) Project management. The 

applicant must describe how and by 

whom the project will be managed 

during construction and operation. The 

description should address the 

applicant’s organizational structure, key 

project personnel and the degree to 

which full time employees, affiliated 

entities or contractors will be utilized. 

The applicant must describe the 

identities, legal relationship, 

qualifications and experience of those 

persons that will perform project 

management functions. If the applicant 

proposes to use the equipment or 

design, construction and other services 

from non-affiliated entities, the 

applicant must describe how it plans to 

contract for such equipment or services. 

(7) Budget. The budget narrative must 

present a detailed breakdown of all 

estimated costs and allocate these costs 

among the listed tasks in the work plan. 

All project costs, not just grant funds, 

must be accounted for in the budget. A 

pro forma operating budget for the first 

year of operations must also be 

included. The detailed budget 

description must be accompanied by 

SF–424A, ‘‘Budget Information—NonConstruction Programs,’’ or SF–424C 

‘‘Budget Information—Construction 

Programs,’’ as applicable. 

(8) Project goals and objectives. The 

applicant must identify unambiguous 

measures for expected cost reduction, 

efficiencies or other improvements and 

the degree to which the incremental 

benefit will be enjoyed by residents of 

the eligible community. The description 

should specifically address how the 

project will provide or improve energy 

generation, transmission or distribution 

services in the target area. The project 

objectives and proposed evaluation 

measures will be the basis for project 

performance measures in the grant 

agreement. 

(9) Performance measures. The 

application must include specific 

criteria for measuring project 

performance. These proposed criteria 

will be used in establishing performance 

measures incorporated in the grant 

agreement in the event the proposal 

receives funding under this subpart. 

These suggested criteria are not binding 

on the Agency. Appropriate measures of 

project performance include expected 

reductions in home energy costs, 

avoided cost increases, enhanced 

reliability, new households served, or 

economic and social benefits from 

improvements in energy services. 

(10) Proposal evaluation and selection 

criteria. The application must address 

individually and in narrative form each 

of the proposal evaluation and selection 

criteria referenced in the grant 

announcement. 

(11) Rural development initiatives.

The proposal should describe whether 

and how the proposed project will 

support any State rural development 

initiatives. If the project is in support of 

a rural development initiative, the 

application should include confirming 

documentation from the appropriate 

rural development agency. The 

application must identify the extent to 

which the project is dependent upon or 

tied to other rural development 

initiatives, funding and approvals. 

(12) Environmental profile. The 

application must include information 

about project characteristics and site 

specific conditions that may involve 

environmental, historic preservation 

and other resource issues. This 

information must be presented in 

sufficient detail so as to facilitate the 

Agency’s identification of projects that 

may require additional environmental 

review under 7 CFR part 1794 before a 

grant award can be approved. The 

format and requirements for the 

environmental profile will be 

established in the grant announcement.

(13) Regulatory and other required 

project approvals. The applicant must 

identify all regulatory or other approvals 

required by other Federal, State, local, 

tribal or private entities (including 

conditions precedent to financing) that 

are necessary to carry out the proposed 

project and an estimated schedule for 

obtaining the necessary permits and 

approvals.

§ 1709.118 Submission of applications. 

Unless otherwise provided in the 

grant announcement, a complete 

original application package and two 

copies must be submitted by the 

application deadline to RUS at the 

address specified in the applicable 

announcement. Instructions for 

submittal of applications electronically 

will be established in the grant 

announcement.

§ 1709.119 Review of applications. 

(a) RUS will review each application 

package received to determine whether 

the applicant is eligible and whether the 

application is timely, complete, and 

responsive to the requirements set forth 

in the grant announcement. 

(b) RUS may, at its discretion, contact 

the applicant to clarify or supplement 

information in the application needed to 

determine eligibility, identifying 

information, and grant requests to allow 

for informed review. Failure of the 

applicant to provide such information 

in response to a written request by the 

Agency within the time frame 

established by the Agency may result in 

rejection of the application. 

(c) After consideration of the 

information submitted, the Assistant 

Administrator, Electric Program will 

determine whether an applicant or 

project is eligible and whether an 

application is timely, complete, and 

responsive to the grant announcement 

and shall notify the applicant in writing. 

The Assistant Administrator’s decision 

on eligibility may be appealed to the 

Administrator.

§ 1709.120 Evaluation of applications. 

(a) The Agency will establish one or 

more rating panels to review and rate 

the grant applications. The panels may 

include persons not employed by the 

Agency. 

(b) All timely and complete 

applications that meet the eligibility 

requirements will be referred to the 

rating panel. The rating panel will 

evaluate and rate all referred

5358 Federal Register / Vol. 70, No. 21 / Wednesday, February 2, 2005 / Rules and Regulations 

applications according to the evaluation 

criteria and weights established in the 

grant announcement. Panel members 

may make recommendations for 

conditions on grant awards to promote 

successful performance of the grant or to 

assure compliance with other Federal 

requirements. 

(c) After the rating panel has 

evaluated and scored all proposals, in 

accordance with the point allocation 

specified in the grant announcement, 

the panel will prepare a list of all 

applications in rank order, together with 

funding level recommendations and 

recommendations for conditions, if any. 

(d) The list of ranked projects and 

rating panel recommendations will be 

forwarded to the Administrator for 

review and selection.

§ 1709.121 Administrator’s review and 

selection of grant awards. 

(a) The final decision to make an 

award is at the discretion of the 

Administrator. The Administrator shall 

make any selections of finalists for grant 

awards after consideration of the 

applications, the rankings, comments, 

and recommendations of the rating 

panel, and other pertinent information. 

(b) Based on consideration of the 

application materials, ranking panel 

ratings, comments, and 

recommendations, and other pertinent 

information, the Administrator may 

elect to award less than the full amount 

of grant requested by an applicant. 

Applicants will be notified of an offer of 

a reduced or partial award. If an 

applicant does not accept the 

Administrator’s offer of a reduced or 

partial award, the Administrator may 

reject the application and offer an award 

to the next highest ranking project. 

(c) The projects selected by the 

Administrator will be funded in rank 

order to the extent of available funds. 

(d) In the event an insufficient 

number of eligible applications are 

received in response to a published 

grant announcement and selected for 

funding to exhaust the funds available, 

the Administrator reserves the 

discretion to reopen the application 

period and to accept additional 

applications for consideration under the 

terms of the grant announcement. A 

notice regarding the reopening of an 

application period will be published in 

the Federal Register.

§ 1709.122 Consideration of eligible grant 

applications under later grant 

announcements. 

At the discretion of the Administrator, 

the grant announcement may provide 

that all eligible but unfunded proposals 

submitted under preceding competitive 

grant announcements may also be 

considered for funding. This option is 

provided to reduce the burden on 

applicants and the Agency. The grant 

announcement shall indicate how 

applicants may request reconsideration 

of previously submitted, but unfunded, 

applications and how they may 

supplement their applications.

§ 1709.123 Evaluation criteria and weights. 

(a) Establishing evaluation criteria 

and weights. The grant announcement 

will establish the evaluation criteria and 

weights to be used in ranking the grant 

proposals submitted. Unless 

supplemented in the grant 

announcement, the criteria listed in this 

section will be used to evaluate 

proposals submitted under this 

program. Additional criteria may be 

included in the grant announcement. In 

establishing evaluation criteria and 

weights, the total points that may be 

awarded for project design and 

technical merit criteria shall not be less 

than 65 percent of the total available 

points, and the total points awarded for 

priority criteria shall not be more than 

35 percent of the total available points. 

The distribution of points to be awarded 

per criterion will be identified in the 

grant announcement. 

(b) Project design and technical merit.

In reviewing the grant proposal’s project 

design and technical merit, reviewers 

will consider the soundness of the 

applicant’s approach, the project’s 

technical and financial feasibility, the 

adequacy of financial and other 

resources, the capabilities and 

experience of the applicant and its 

project management team, the project 

goals, and identified community needs 

and benefits. Points will be awarded 

under the following project elements: 

(1) Comprehensiveness and 

feasibility. Reviewers will assess the 

technical and economic feasibility of the 

project and how well its goals and 

objectives address the challenges of the 

eligible communities. The panel will 

review the proposed design, 

construction, equipment and materials 

for the proposed energy facilities to 

determine technical feasibility. 

Reviewers may propose additional 

conditions on the grant award to assure 

that the project is technically sound. 

Budgets will be reviewed for 

completeness and the strength of nonFederal funding commitments. Points 

may not be awarded unless sufficient 

detail is provided to determine whether 

or not funds are being used for qualified 

purposes. Reviewers will consider the 

adequacy of the applicant’s budget and 

resources to carry out the project as 

proposed. Reviewers will also evaluate 

how the applicant proposes to manage 

available resources such as grant funds, 

income generated from the facilities and 

any other financing sources to maintain 

and operate a financially viable project 

once the grant period has ended. 

Reviewers must make a finding of 

operational sustainability for any points 

to be awarded. Projects for which future 

grant funding is likely to be required in 

order to assure ongoing operations will 

not receive any points. 

(2) Demonstrated experience.

Reviewers will consider whether the 

applicant or its project team have 

demonstrated experience in successfully 

administering and carrying out projects 

that are comparable to that proposed in 

the application. The reviewers may 

assign a higher point score to proposals 

that develop the internal capacity to 

provide or improve energy services in 

the eligible communities over other 

proposals that rely extensively on 

temporary outside contractors. 

(3) Community needs. Reviewers will 

consider the applicant’s assessment of 

community energy needs to be 

addressed by the proposed project as 

well as the severity of physical and 

economic challenges affecting the target 

communities. In determining whether 

one proposal should receive more 

points than another under this criterion, 

reviewers will consider the relative 

burdens placed on the communities and 

individual households by extremely 

high energy costs, the hardships created 

by limited access to reliable and 

affordable energy services and the 

availability of other resources to support 

or supplement the proposed grant 

funding. 

(4) Project evaluation and 

performance measures. Reviewers will 

consider the applicant’s suggested 

project evaluation and performance 

criteria. Reviewers may award higher 

points to criteria that are quantifiable, 

directly relevant to project goals, and 

reflect serious consideration than to 

more subjective performance criteria 

that do not incorporate variables that 

reflect a reduction in energy cost or 

improvement in service.

(5) Coordination with rural 

development initiatives. Proposals that 

include documentation confirming 

coordination with State rural 

development initiatives may be credited 

points for this criterion. 

(c) Priority considerations. Subject to 

the limitation in paragraph (a) of this 

section, evaluation points may also be 

awarded for projects that advance 

identified priority interests identified in 

the grant announcement to assist the 

Agency in selecting among competing 

projects when the amount of funding

Federal Register / Vol. 70, No. 21 / Wednesday, February 2, 2005 / Rules and Regulations 5359

requests exceed available funds. The 

grant announcement may incorporate all 

or some of the priority criteria listed 

below, and as discussed in paragraph (a) 

of this section, the grant announcement 

may supplement these criteria. The 

announcement will also specify the 

points that will be awarded to 

qualifying applications under these 

priority criteria. 

(1) Community economic hardship.

Economic hardship points may be 

awarded where the median household 

income for the target community is 

significantly below the State average or 

where the target community suffers 

from economic conditions that severely 

constrain its ability to provide or 

improve energy facilities serving the 

community. Applicants must describe 

in detail and document conditions 

creating severe community economic 

hardship in the proposal. 

(2) Rurality. Priority consideration 

may be given to proposals that serve 

smaller rural communities. Applications 

will be scored based on the population 

of the largest incorporated cities, towns 

or villages or census designated places 

included within the grant’s proposed 

target area as determined using the 

latest available population figures from 

the U.S. Census Bureau. 

(3) Unserved energy needs. Points 

may be awarded to projects that extend 

or improve electric or other energy 

services to eligible communities or areas 

of eligible communities that do not have 

reliable centralized or commercial 

service. 

(4) Imminent hazard. Additional 

points may be awarded for projects that 

correct a condition posing an imminent 

hazard to public safety, public welfare, 

the environment, or to a critical 

community or residential energy facility 

in immediate danger of failure because 

of a deteriorated condition, capacity 

limitation, or damage from a natural 

disaster or accident. 

(5) Cost sharing. Projects that 

evidence significant commitments of 

funds, contributed property, equipment, 

or other in kind support for the project 

may be awarded additional points for 

this criterion where the aggregate value 

of these contributions exceed ten 

percent of total eligible project costs.

§ 1709.124 Grant award procedures. 

(a) Notification of applicants. The 

Agency will notify all applicants in 

writing whether they have been selected 

for a grant award. Applicants that have 

been selected as finalists for a 

competitive grant award will be notified 

in writing of their selection and advised 

that the Agency may request additional 

information in order to complete the 

required environmental review under 7 

CFR 1794 and to meet other pre-award 

conditions. 

(b) Letter of conditions. The Agency 

will notify each applicant selected as a 

finalist in writing setting out the amount 

of grant funds and the terms and 

conditions under which the grant will 

be made and requesting that the 

applicant indicate in writing its intent 

to accept these conditions. 

(c) Applicant’s intent to meet 

conditions. Upon reviewing the 

conditions and requirements in the 

letter of conditions, the selected 

applicant must notify the agency in 

writing within the time period 

indicated, of its acceptance of the 

conditions, or if the proposed certain 

conditions cannot be met, the applicant 

must so advise the Agency and may 

propose alternate conditions. The 

Agency must concur with any changes 

proposed to the letter of conditions by 

the applicant before the application will 

be further processed. 

(d) Grant agreement. The Agency and 

the grantee must sign a grant agreement 

acceptable to the Agency prior to the 

advance of funds.

§§ 1709.125–1709.200 [Reserved]

Subpart C—Bulk Fuel Revolving Fund 

Grant Program

§ 1709.201 Purpose. 

This subpart establishes policies and 

procedures for the Rural Utilities 

Service (RUS) State Bulk Fuel Revolving 

Fund Grants. The purpose of this grant 

program is to assist State entities in 

establishing and supporting a revolving 

fund to provide a more cost-effective 

means of purchasing fuel for 

communities where the fuel cannot be 

shipped by means of surface 

transportation.

§ 1709.202 Policy. [Reserved]

§ 1709.203 Definitions. 

As used in this subpart, the following 

definitions apply: 

Eligible area means any area that is 

primarily dependent on delivery of fuel 

by water or air for a significant part of 

the year and where fuel cannot be 

shipped routinely by means of surface 

transportation either because of absolute 

physical constraints or because surface 

transportation is not practical or is 

prohibitively expensive. 

Fuel means oil, diesel fuel, gasoline 

and other petroleum products, coal, and 

any other material that can be burned to 

make energy. 

State entity means a department, 

agency, or instrumentality of any State. 

Surface transportation means 

transportation by road, rail or pipeline.

§§ 1709.204–1709.206 [Reserved]

§ 1709.207 Eligible applicants. 

Eligible applicants are restricted to 

State entities in existence as of 

November 9, 2000. Eligible State entities 

may partner with other entities, 

including other government agencies, in 

carrying out the programs funded by 

this program. Each applicant must 

demonstrate that it has the authority to 

enter into a binding agreement with the 

Federal Government to carry out the 

grant activities.

§ 1709.208 Use of grant funds. 

Grant funds must be used to establish 

and support a revolving loan fund that 

facilitates cost effective fuel purchases 

for persons, communities, and 

businesses in eligible areas. Where a 

recipient State entity’s existing program 

is authorized to fund multiple purposes, 

grant funds may only be used to the 

extent the recipient fund finances 

eligible activities.

§ 1709.209 Limitations on use of grant 

funds.

Not more than 4 percent of the grant 

award may be used for the planning and 

administrative expenses of the grantee.

§ 1709.210 Application process. 

(a) Applications. The Agency will 

solicit applications on a competitive 

basis by publication of a grant 

announcement establishing the amount 

of funds available, the maximum grant 

award, the required application 

materials and where to obtain them, the 

evaluation and selection criteria and 

weights, and application deadlines. 

Unless otherwise specified in the 

announcement, applicants must file an 

original application package and two 

copies. Where provided in the grant 

announcement, applicants may submit 

electronic applications. 

(b) Required forms. The grant 

application will use the Standard 

Application for Federal Assistance (SF–

424 series or its successor) and other 

forms as provided in the grant 

announcement. The required forms 

must be completed, signed and 

submitted by a person authorized to 

submit the proposal on behalf of the 

applicants. Where provided in the grant 

announcement, applicants may file 

electronic versions of the forms in 

compliance with the instructions in the 

grant announcement. 

(c) Narrative proposal and required 

elements. Each grant application must 

include a narrative proposal describing 

the project and addressing the following

5360 Federal Register / Vol. 70, No. 21 / Wednesday, February 2, 2005 / Rules and Regulations 

elements. The form, contents, and order 

of the narrative proposal will be 

specified in the grant announcement. 

Additional elements may be published 

in the applicable grant announcement. 

(1) Executive summary. This summary 

of the proposal must identify the State 

entity applying for the grant and the key 

agency contact information (telephone 

and fax numbers, mailing address and email address). The applicant must 

clearly state the amount requested in 

this section. It should briefly describe 

the program, including the estimated 

number of potential beneficiaries in 

eligible areas, their estimated fuel 

needs, the projects and activities to be 

financed through the revolving fund and 

how the projects and activities will 

improve the cost effectiveness of fuel 

procured. 

(2) Applicant eligibility. The 

application must establish that the 

applicant is a State entity that was in 

existence as of November 9, 2000, and 

has the legal authority to enter into a 

financial assistance relationship with 

the Federal Government to carry out the 

grant activities. 

(3) Assessment of needs and potential 

beneficiaries. The application must 

provide estimates of the number, 

location and population of potentially 

eligible areas in the State and their 

estimated fuel needs and costs. The 

section must also describe the criteria 

used to identify eligible areas, including 

the characteristics that make fuel 

deliveries by surface transport 

impossible or impracticable. The 

description of beneficiary communities 

should provide a detailed breakdown of 

the density profile of the area to be 

served by eligible projects. Indicate to 

what extent persons in eligible areas 

live outside of communities of 2,500 

persons or more, communities of 5,000 

or more or outside of communities of 

20,000 or more. All population 

estimates should be based on Census 

Bureau data where available. All 

representations should be supported 

with exhibits such as maps, summary 

tables and references to official 

information sources. 

(4) Project description. The 

application must: 

(i) Describe the legal structure and 

staffing of the revolving fund proposal 

for fuel purchase support. 

(ii) Identify the objectives of the 

project, the proposed criteria for 

establishing project funding eligibility 

and how the project is to be staffed, 

managed and financed. 

(iii) Describe how the potential 

beneficiaries will be informed of the 

availability of revolving fund benefits to 

them. 

(iv) Explain how the proposed 

revolving fund program will help 

provide a more cost-effective means of 

meeting fuel supply needs in eligible 

areas, encourage the adoption of 

financially sustainable energy practices, 

the adequate planning and investment 

in bulk fuel facility operations and 

maintenance and cost-effective 

investments in energy efficiency. 

(v) If the revolving fund program is 

not yet operational, a proposed 

implementation schedule and 

milestones should be provided. 

(5) Demonstrated experience. The 

application shall describe past 

accomplishments and experiences that 

are relevant to determine whether the 

applicant is capable of administering 

the grant project. 

(6) Budget. The application must 

include a pro forma operating budget for 

the proposed fund and a description of 

all funding sources. The level of detail 

must be sufficient for reviewers to 

determine that grant funds will be used 

only for eligible purposes and to 

determine the extent to which the 

program is entirely dependent on grant 

funding or whether it has financial 

support from the State or other sources. 

(7) Performance measures and project 

evaluation. The application must 

provide unambiguous and quantifiable 

measures that will be used to evaluate 

the success and cost-effectiveness of the 

revolving fund in assuring adequate fuel 

supplies for eligible communities and 

for assessing the fuel supply projects 

financed. The grant announcement may 

establish additional required elements 

that must be addressed in the narrative 

proposal of the application package.

§ 1709.211 Submission of applications. 

Completed applications must be 

submitted to RUS at the address 

specified in the grant announcement on 

or before the deadline specified in the 

grant announcement. Instructions for 

submittal of applications electronically 

will be established in the grant 

announcement. Late applications will 

be rejected.

§ 1709.212 Application review. 

The Agency will review all 

applications to determine whether the 

applicant is eligible and whether the 

application is timely, complete and 

sufficiently responsive to the 

requirements set forth in the grant 

announcement to allow for an informed 

review. Failure to address any of the 

required evaluation criteria or to submit 

all required forms will disqualify the 

proposal. The Agency reserves the right 

to contact the applicant to clarify 

information contained in the proposal to 

resolve issues related to eligibility and 

the grant request. Applications that are 

timely, complete, and responsive will be 

forwarded for further evaluation. 

Applications that are late, incomplete, 

or non-responsive will be rejected.

§ 1709.213 Evaluation of applications. 

(a) The Agency will establish one or 

more rating panels to review and rate 

the grant applications. The panels may 

include persons not employed by the 

Agency. 

(b) The rating panel will evaluate and 

rate all complete applications that meet 

the eligibility requirements according to 

the evaluation and selection criteria and 

weights established in the grant 

announcement. Panel members may 

make recommendations for conditions 

on grant awards to promote successful 

performance of the grant or to assure 

compliance with other Federal 

requirements.

(c) After all proposals have been 

evaluated and scored, the proposals, the 

rankings, recommendations, and 

comments of the rating panel will be 

forwarded to the Administrator.

§ 1709.214 Administrator’s review and 

selection of grant awards. 

(a) The final decision to make a grant 

award is at the discretion of the 

Administrator. The Administrator shall 

consider the applications, the ranking, 

comments, and recommendations of the 

rating panel, and any other pertinent 

information before making a decision 

about which, if any, applications to 

approve, the amount of funds awarded, 

and the order of approval. The 

Administrator reserves the right not to 

make any awards from the applications 

submitted. When the Administrator 

decides not to make any awards, the 

Administrator shall document in 

writing the reason for the decision. 

(b) Decisions on grant awards will be 

made by the Administrator after 

consideration of the applications, the 

rankings and recommendations of the 

rating panel. The Administrator may 

elect to award less than the full amount 

of grant requested by an applicant. 

(c) The applications selected by the 

Administrator will be funded in rank 

order to the extent of available funds.

§ 1709.215 Consideration of unfunded 

applications under later grant 

announcements. 

The grant announcement may provide 

that all eligible but unfunded proposals 

submitted under preceding 

announcements may also be considered 

for funding. The announcement shall 

describe whether and how prior 

applicants may request reconsideration

Federal Register / Vol. 70, No. 21 / Wednesday, February 2, 2005 / Rules and Regulations 5361

and supplement their application 

material.

§ 1709.216 Evaluation criteria and weights. 

Unless supplemented in the grant 

announcement, the criteria listed in this 

section will be used to evaluate 

proposals submitted under this 

program. The total points available and 

the distribution of points to be awarded 

per criterion will be identified in the 

grant announcement. 

(a) Program Design. Reviewers will 

consider the financial viability of the 

applicant’s revolving fund program 

design, the proposed criteria for 

establishing eligible projects and 

borrowers, and how the program will 

improve the cost effectiveness of bulk 

fuel purchases in eligible areas. 

Programs demonstrating a strong design 

and the ability to improve cost 

effectiveness will receive more points 

than applications that are less detailed. 

(b) Assessment of needs. Reviewers 

will award more points to programs that 

serve or give priority to assisting more 

costly areas than those that serve 

populations that suffer from less severe 

physical and economic challenges. 

(c) Program evaluation and 

performance measures. Reviewers may 

award more points to performance 

measures that are relevant to the project 

objective and quantifiable than to 

performance measures that are more 

subjective and do not incorporate 

variables that reflect a reduction in fuel 

cost or improvement in service. 

(d) Demonstrated experience.

Applicants may be awarded points for 

relevant experience in administering 

revolving fund or other comparable 

programs. 

(e) Rurality. Reviewers may award 

more points to proposals that give 

priority in access to funds to 

communities with low population 

density or that are located in remote 

eligible areas than to proposals that 

serve eligible, but less remote and 

higher population density communities. 

(f) Cost sharing. Although costsharing is not required under this 

program, projects that evidence 

significant funding or contributed 

property, equipment or other in kind 

support for the project may be awarded 

points for this criterion where the 

aggregate value of these contributions 

exceed 25 percent of the annual funding 

operations. 

(g) Additional priority considerations.

The grant announcement may provide 

for additional points to be awarded to 

projects that advance identified Agency 

priority interests under this program.

§ 1709.217 Grant award. 

(a) Notification of applicants. The 

Agency will notify all applicants in 

writing whether or not they have been 

selected for a grant award. 

(b) Letter of conditions. The Agency 

will notify a selected applicant in 

writing, setting out the amount of grant 

approved and the conditions under 

which the grant will be made. 

(c) Applicant’s intent to meet 

conditions. Upon reviewing the 

conditions and requirements in the 

letter of conditions, the selected 

applicant must complete, sign and 

return the Agency’s ‘‘Letter of Intent to 

Meet Conditions,’’ or, if certain 

conditions cannot be met, the applicant 

may propose alternate conditions to the 

Agency. The Agency must concur with 

any changes proposed to the letter of 

conditions by the applicant before the 

application will be further processed. 

(d) Grant agreement. The Agency and 

the grantee must execute a grant 

agreement acceptable to the Agency 

prior to the advance of funds.

§§ 1709.218–1709.300 [Reserved]

Subparts D–F [Reserved]

Subpart G—Recovery of Financial 

Assistance Used for Unauthorized 

Purposes

§ 1709.601 Policy. 

This subpart prescribes the policies of 

the Rural Utilities Service (RUS) when 

it is subsequently determined that the 

recipient of an Assistance to High 

Energy Cost Rural Communities 

program loan or grant was not eligible 

for all or part of the financial assistance 

received or that the assistance received 

was used for unauthorized purposes. It 

is the policy of the Agency that when 

assistance under this part has been 

received by an ineligible recipient or 

used for unauthorized purposes the 

Agency shall initiate appropriate actions 

to recover from the recipient the sum 

that is determined to be ineligible or 

used for unauthorized purposes, 

regardless of amount, unless any 

applicable statute of limitation has 

expired. The Agency shall make full use 

of available authority and procedures, 

including but not limited to those 

available under 7 CFR part 3015, 

subpart N.

§§ 1709.602–1709.700 [Reserved]

§§ 1709.701–1709.999 [Reserved]

Dated: January 13, 2005. 

Hilda Gay Legg, 

Administrator, Rural Utilities Service.

[FR Doc. 05–1880 Filed 2–1–05; 8:45 am] 

BILLING CODE 3410–15–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. 2001–NM–279–AD; Amendment 

39–13957; AD 2005–03–01] 

RIN 2120–AA64 

Airworthiness Directives; Boeing 

Model 747 Series Airplanes

AGENCY: Federal Aviation 

Administration, DOT.

ACTION: Final rule.

SUMMARY: This amendment adopts a 

new airworthiness directive (AD), 

applicable to all Boeing Model 747 

series airplanes, that requires repetitive 

inspections of the nacelle strut-to-wing 

attachment structure, and repetitive 

overhaul of the diagonal brace and 

spring beam load paths, to maintain 

damage tolerance requirements and 

ensure long-term structural integrity; 

and follow-on and corrective actions if 

necessary. This action is necessary to 

ensure the structural integrity of the 

strut-to-wing load path and prevent 

separation of the strut and engine from 

the airplane. This action is intended to 

address the identified unsafe condition.

DATES: Effective March 9, 2005. 

The incorporation by reference of 

certain publications listed in the 

regulations is approved by the Director 

of the Federal Register as of March 9, 

2005.

ADDRESSES: The service information 

referenced in this AD may be obtained 

from Boeing Commercial Airplanes, 

P.O. Box 3707, Seattle, Washington 

98124–2207. This information may be 

examined at the Federal Aviation 

Administration (FAA), Transport 

Airplane Directorate, Rules Docket, 

1601 Lind Avenue, SW., Renton, 

Washington; or at the National Archives 

and Records Administration (NARA). 

For information on the availability of 

this material at NARA, call (202) 741–

6030, or go to: http://www.archives.gov/

federal_register/

code_of_federal_regulations/

ibr_locations.html.