This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

3642 

Vol. 75, No. 14 

Friday, January 22, 2010 

DEPARTMENT OF AGRICULTURE 

Rural Utilities Service 

7 CFR Part 1774 

RIN 0572–AC14 

Special Evaluation Assistance for 

Rural Communities and Households 

Program 

ACTION: Proposed rule. 

SUMMARY: The Rural Utilities Service 

(RUS) is issuing a regulation to establish 

the Special Evaluation Assistance for 

Rural Communities and Households 

(SEARCH) Program as authorized by 

Section 6002 of The Food, Conservation 

and Energy Act of 2008, Public Law 

110–246 (Farm Bill), which amended 

Section 306(a)(2) of the Consolidated 

Farm and Rural Development Act 

(CONACT) (7 U.S.C. 1926 (a)(2)). The 

amendment added the new SEARCH 

grant program under which the 

Secretary is authorized to make 

predevelopment planning grants for 

feasibility studies, design assistance, 

and technical assistance to financially 

distressed communities in rural areas 

with populations of 2,500 or fewer 

inhabitants for water and waste disposal 

projects. 

DATES: You may submit comments 

according to the following deadlines: 

• Paper copies must be postmarked 

and mailed, shipped, or sent overnight 

no later than February 22, 2010 to be 

eligible for consideration. Late 

comments will not be considered. 

• Electronic copies must be received 

by February 22, 2010 to be eligible for 

consideration. 

ADDRESSES: Submit comments by either 

of the following methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov and in the 

‘‘Search Documents’’ box, enter RUS– 

09–Water–0001, and select GO>>. To 

submit a comment, choose ‘‘Send a 

comment or submission,’’ under the 

Docket Title. In order to submit your 

comment, the information requested on 

the ‘‘Public Comment and Submission 

Form,’’ must be completed. Information 

on using Regulations.gov, including 

instructions for accessing documents, 

submitting comments, and viewing the 

docket after the close of the comment 

period, is available through the site’s 

‘‘How To Use This Site’’ link. 

• Postal Mail/Commercial Delivery: 

Please send your comment addressed to 

Michele Brooks, Director, Program 

Development and Regulatory Analysis, 

USDA Rural Development, 1400 

Independence Avenue, STOP 1522, 

Room 5162, Washington, DC 20250– 

1522. Please state that your comment 

refers to Docket No. RUS–09–Water– 

0001. 

Other Information: Additional 

information about Rural Development 

and its programs is available on the 

Internet at http://www.rurdev.usda.gov/ 

index.html. 

FOR FURTHER INFORMATION CONTACT: 

Anita O’Brien, Loan Specialist, Water 

and Environmental Programs, U.S. 

Department of Agriculture, Rural 

Utilities Service, Room 2230 South 

Building, Stop 1570, 1400 

Independence Ave., SW., Washington, 

DC 20250–1570. Telephone: (202)690– 

3789, FAX: (202)690–0649, E-mail: 

anita.obrien@usda.gov. 

SUPPLEMENTARY INFORMATION: 

Classification 

Executive Order 12866 

This proposed 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). 

Executive Order 12988 

This proposed rule has been reviewed 

in accordance with Executive Order 

12988, Civil Justice Reform. RUS has 

determined that this proposed 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 be pre-empted; no retroactive 

effect will be given to the rule; and in 

accordance with section 212(e) of the 

Department of Agriculture 

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

sec. 6912(e)), appeal procedures must be 

exhausted before an action against the 

Department or its agencies may be 

initiated. 

Regulatory Flexibility Act Certification 

It has been determined that the 

Regulatory Flexibility Act is not 

applicable to this proposed rule since 

the Rural Utilities Service is not 

required by 5 U.S.C. 551 et seq. or any 

other provision of law to publish a 

notice of final rulemaking with respect 

to the subject matter of this rule. 

Information Collection and 

Recordkeeping Requirements 

The information collection and 

recordkeeping requirements contained 

in this rule will not be effective until 

approved by the Office of Management 

and Budget (OMB), subject to the 

submission of a paperwork package for 

which the Agency intends to request 

approval from OMB pursuant to the 

Paperwork Reduction Act of 1995 (44 

U.S.C. chapter 35). RUS invites 

comments, on any aspect of this 

collection of information including 

suggestions for reducing the burden. 

Send questions or comments regarding 

this information collection to Michele 

Brooks, Director, Program Development 

and Regulatory Analysis, Rural Utilities 

Service, U.S. Department of Agriculture, 

STOP 1522, Washington, DC 20250– 

152, Fax: (202) 720–8435. 

Nonprofit organizations applying for 

SEARCH grants must submit an 

application which includes an 

application form, various other forms, 

certifications, and supplemental 

information. RUS will use the 

information collected from applicants, 

borrowers, and consultants to determine 

applicant eligibility, project feasibility, 

and the applicant’s ability to meet the 

grant and regulatory requirements. 

Failure to collect proper information 

could result in improper determinations 

of eligibility, improper use of funds, or 

hindrances in making grants authorized 

by the SEARCH program. 

The applicant will submit the 

following information: 

SF–424, ‘‘Application for Federal 

Assistance.’’ (cleared under 4040–0004) 

Applicants use this form as a required 

cover sheet for applications submitted 

for SEARCH grants. The application is 

an official form required for all Federal 

grants and requests basic information 

about the applicant and the proposed 

project. 

SF–424A, ‘‘Budget Information—NonConstruction Programs.’’ (cleared under 

4040–0006) 


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Applicants project costs and expenses 

for the grant project. The form also 

provides information on matching 

funds. This form is submitted as part of 

the pre-application and if the project is 

selected, as part of the formal 

application. 

SF–424B, ‘‘Assurances—NonConstruction Programs.’’ (cleared under 

4040–0007) 

Applicants read and sign this form to 

indicate the organization’s intent to 

comply with the laws, regulations, and 

policies to which a grant is subject. 

Project Narrative 

Applicants will provide a project 

narrative detailing the project to be 

financed with the SEARCH grant funds. 

The narrative will also provide details 

on the activities or tasks to be 

accomplished, objectives, timetables for 

task completion, and anticipated results. 

RD 400–1, ‘‘Equal Opportunity 

Agreement’’ and RD 400–4, ‘‘Assurance 

Agreement.’’ (cleared under 0575–0018) 

Applicants read and sign these forms 

to assure RUS that they agree to and will 

comply with Title VI of the Civil Rights 

Act of 1964, and the Equal Opportunity 

Clause under Executive Order 11246 of 

September 24, 1965. 

Certification Regarding Debarment, 

Suspension, and Other Responsibility 

Matters—Primary Covered 

Transactions 

USDA regulations published at 7 CFR 

Part 3017 implement the governmentwide debarment and suspension system 

for USDA’s non-procurement 

transactions. Applicants for SEARCH 

grants are required to provide 

certification under these regulations. 

Form AD–1047 may also be used to 

obtain the required certification. 

Certification Regarding Debarment, 

Suspension, Ineligibility and Voluntary 

Exclusion—Lower Tier Transaction 

Form AD–1048 will be signed by 

applicant’s suppliers, auditors, 

contractors, etc., and retained by 

applicant in their files. 

Certification Regarding Drug-Free 

Workplace Requirements (Grants) 

Alternative I—for Grantees Other Than 

Individuals 

USDA regulations published at 7 CFR 

Part 3017 implement the Drug-Free 

Workplace Act of 1988, which requires 

that grant recipients agree that they will 

maintain a drug-free workplace. 

Applicants are required to provide 

certification under these regulations. 

Form AD–1049 may also be used to 

obtain the required certification. 

Relationship or Association With RUS 

Employees 

Applicants must identify and report 

any known relationship or association 

with a RUS employee such as close 

personal association, immediate family, 

close relatives, or business associates. 

Supporting Documentation 

Applicants must provide 

documentation of legal organization and 

authority to borrow funds, construct, 

operate, manage the facility, etc. The 

documentation may include articles of 

incorporation, certificate of 

incorporation and good standing, 

bylaws, rules, and organizational 

minutes. Applicants also must provide 

financial information such as financial 

statements, audits, or existing debt 

instruments. This information is 

necessary for RUS to determine an 

organization’s legal existence, authority 

to perform certain functions, and 

financial capacity to borrow funds. 

Agreements for Professional Services 

Applicants must contract for the 

professional services rendered from an 

engineer, attorney, bond counsel, 

accountant, auditor, appraiser, or 

financial advisor. Contracts or other 

forms of agreement for services 

necessary for project planning and 

development are subject to RUS 

concurrence. Applicants must submit 

them to RUS for review and 

concurrence to ensure the needed 

services will be available at a reasonable 

cost. 

Grant Agreement 

The Grant Agreement sets forth the 

terms and conditions under which the 

applicant receives a RUS grant. 

Applicants and RUS must execute the 

document before RUS disburses grant 

funds. 

Audits Based on Federal Assistance 

Borrowers must submit audited 

financial statements annually in 

accordance with Generally Accepted 

Government Auditing Standards 

(GAGAS). The audit must comply with 

the requirements of OMB Circular 

A–133, ‘‘Audits of State, Local 

Governments, and Non-Profit 

Organizations’’ or Water and Waste 

Disposal audit requirements. 

The requirements for submitting an 

audit report under OMB Circular A–133 

are based on the total amount of Federal 

financial assistance expended during a 

borrower’s fiscal year from all Federal 

sources. Borrowers that expend 

$500,000 or more in a year in Federal 

awards must have a single audit 

conducted for that year under OMB 

Circular A–133. Those that expend less 

than $500,000 in Federal awards and 

have an outstanding RUS loan balance 

equal to or greater than $1,000,000 must 

submit an audit in accordance with 

Water and Waste Disposal audit 

requirements. Borrowers expending less 

than $500,000 in Federal assistance and 

having a RUS loan balance less than 

$1,000,000 may submit a management 

report instead of an audit report. RUS 

will designate the type of audit 

borrowers must submit. 

Management Reports 

All borrowers must furnish 

management reports that will provide 

management a means of evaluating prior 

decisions and serve as a basis for 

planning future operations and financial 

strategies. This requirement is necessary 

to help assure that the facility will be 

properly managed and to protect the 

financial interest of the Government. 

Form RD 1942–8, ‘‘Resolution of 

Members or Stockholders’’ (cleared 

under 0575–0015) 

Nonprofit applicants prepare this 

form to indicate that the governing body 

has the authority to enter into a grant of 

a particular amount with RUS. 

Form RD 442–7, ‘‘Operating Budget’’ 

(cleared under 0575–0015) 

All applicants use the form to project 

income and expense items and a 

complete cash flow through the first full 

year of operations after they use the loan 

proceeds. These projections are 

necessary in determining the source and 

reliability of the projected income and 

the adequacy of resources to repay the 

loan in a timely manner, operate and 

maintain the facility, and maintain 

adequate reserves. 

Comments on this information 

collection must be received by March 

23, 2010. 

Comments are invited on (a) whether 

the collection of information is 

necessary for the proper performance of 

the functions of the agency, including 

whether the information will have 

practical utility; (b) the accuracy of the 

agency’s estimate of burden including 

the validity of the methodology and 

assumption 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 on 

other forms and information technology. 

Title: Special Evaluation Assistance 

for Rural Communities and Household 

Program (SEARCH). 

OMB Control Number: 0572–NEW. 


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3644 Federal Register / Vol. 75, No. 14 / Friday, January 22, 2010 / Proposed Rules 

Type of Request: New. 

Abstract: The Food, Conservation and 

Energy Act of 2008, Public Law 110–246 

(Farm Bill) amended Section 306(a)(2) 

of the Consolidated Farm and Rural 

Development Act (CONACT) (7 U.S.C. 

1926 (a)(2)). The amendment created a 

grant program to make Special 

Evaluation Assistance for Rural 

Communities and Households 

(SEARCH) Program grants. 

Under the SEARCH program, the 

Secretary may make predevelopment 

and planning grants to public or quasipublic agencies, organizations operated 

on a not-for-profit basis or Indian tribes 

on Federal and State reservations and 

other federally recognized Indian tribes. 

The grant recipients shall use the grant 

funds for feasibility studies, design 

assistance, and development of an 

application for financial assistance to 

financially distressed communities in 

rural areas with populations of 2,500 or 

fewer inhabitants for water and waste 

disposal projects as authorized in 

Sections 306(a)(1), 306(a)(2) and 

306(a)(24) of the CONACT. 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 32.15 hours per 

responses. 

Estimated Number of Respondents: 

50. 

Estimated Number of Total Annual 

Reponses per Respondents: 820. 

Estimated Total Annual Burden on 

Respondents: 1,050. 

Copies of this information collection 

can be obtained from MaryPat Daskal, 

Program Development and Regulatory 

Analysis at (202) 720–7853. 

All responses to this information 

collection and recordkeeping notice will 

be summarized and included in the 

request for OMB approval. All 

comments will also become a matter of 

public record. 

E-Government Act Compliance 

Rural Development is committed to 

the E-Government Act, which requires 

Government agencies in general to 

provide the public the option of 

submitting information or transacting 

business electronically to the maximum 

extent possible. 

National Environmental Policy Act 

Certification 

The Administrator of RUS has 

determined that this proposed rule will 

not significantly affect the quality of the 

human environment as defined by the 

National Environmental Policy Act of 

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

this action does not require an 

environmental impact statement or 

assessment. 

Catalog of Federal Domestic Assistance 

The program described by this 

proposed rule is listed in the Catalog of 

Federal Domestic Assistance Programs 

under number 10.759—Special 

Evaluation Assistance for Rural 

Communities and Households Program 

(SEARCH). This catalog is available on 

a subscription basis from the 

Superintendent of Documents, the 

United States Government Printing 

Office, Washington, DC 20402–9325, 

telephone number (202) 512–1800 and 

at https://www.cfda.gov. 

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. 

Unfunded Mandates 

This proposed 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 proposed 

rule is not subject to the requirements 

of section 202 and 205 of the Unfunded 

Mandates Reform Act. 

Executive Order 13132, Federalism 

The policies contained in this 

proposed 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 

proposed rule impose substantial direct 

compliance costs on state and local 

governments. Therefore, consultation 

with states is not required. 

Background 

The Food, Conservation and Energy 

Act of 2008, Public Law 110–246 (Farm 

Bill) amended Section 306(a)(2) of the 

Consolidated Farm and Rural 

Development Act (CONACT) (7 U.S.C. 

1926(a)(2)). The amendment added a 

grant program to make Special 

Evaluation Assistance for Rural 

Communities and Households 

(SEARCH) Program grants. SEARCH 

grants are intended to assist the 

neediest, eligible communities that lack 

financial resources to pay for feasibility 

studies, design assistance and technical 

assistance associated with water and 

waste infrastructure needs. 

Under the SEARCH program, the 

Secretary may make predevelopment 

and planning grants to public or quasipublic agencies, organizations operated 

on a not-for-profit basis or Indian tribes 

on Federal and State reservations and 

other federally recognized Indian tribes. 

Up to 100 percent of the eligible cost of 

the grant may be funded and may not 

exceed $30,000. The grant recipients 

shall use the grant funds for feasibility 

studies, design assistance, and 

development of an application for 

financial assistance to financially 

distressed communities in rural areas 

with populations of 2,500 or fewer 

inhabitants for water and waste disposal 

projects as authorized in Sections 

306(a)(1), 306(a)(2) and 306(a)(24) of the 

Consolidated Farm and Rural 

Development Act (CONACT). 

Eligible entities for the SEARCH 

grants will be the same entities eligible 

to obtain a loan, grant, or loan guarantee 

from the Rural Utilities Service Water 

and Waste Disposal and Wastewater 

loan and grant programs. However, as 

applied to the SEARCH program, rural 

area has been defined as one with a 

population of 2,500 or less. The Agency 

will define financially distressed areas 

as those where the median household 

income of the areas to be served is either 

below the poverty line or below 80 

percent of the statewide nonmetropolitan median household 

income. 

The Secretary may use not more than 

four percent of the total amount of funds 

made available for a fiscal year for water 

and waste disposal to carry out the 

SEARCH program. 

The Administrator of the RUS is 

required to prescribe regulations to 

implement the provisions of Section 

6002 of the Farm Bill and does so 

through the proposed regulations 

herein. In developing the proposed 

SEARCH program regulations, the 

Agency relied heavily on existing Rural 

Development regulations relative to 

water and waste disposal loans and 

grants. 

List of Subjects in 7 CFR Part 1774 

Community development, Grant 

programs, Reporting and recordkeeping 

requirements, Rural areas, Waste 

treatment and disposal, Water supply. 

Therefore for the reasons discussed in 

the preamble, RUS proposes to amend 

chapter XVII of title 7 of the Code of 

Federal Regulations by adding a new 

part 1774 to read as follows: 

PART 1774—SPECIAL EVALUATION 

ASSISTANCE FOR RURAL 

COMMUNITIES AND HOUSEHOLDS 

PROGRAM (SEARCH) 

Subpart A—General Provisions 

Sec. 

1774.1 General. 

1774.2 Definitions. 


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1774.3 Availability of forms and 

regulations. 

1774.4 Allocation of funds. 

1774.5–1774.6 [Reserved] 

1774.7 Environmental requirements. 

1774.8 Other Federal statutes. 

1774.9 [Reserved] 

Subpart B—Grant Application Processing 

1774.10 Applications. 

1774.11 [Reserved] 

1774.12 Eligibility. 

1774.13 Limitations. 

1774.14 Eligible grant purposes. 

1774.15 Selection criteria. 

1774.16 Grant application processing and 

approval. 

1774.17 Grant closing and disbursement. 

1774.18 Reporting requirements, 

accounting methods and audits. 

1774.19 Applications determined ineligible. 

1774.20 Conflict of interest. 

1774.21–1774.23 [Reserved] 

1774.25–1774.99 [Reserved] 

1774.100 OMB Control Number. 

Authority: 7 U.S.C. 1926(a)(2)(C). 

Subpart A—General Provisions 

§ 1774.1 General. 

The purpose of the Special Evaluation 

Assistance for Rural Communities and 

Household (SEARCH) Grant program is 

to provide financial assistance to the 

neediest, eligible communities, who 

lack financial resources to pay for 

feasibility studies, design assistance and 

technical assistance. This subpart sets 

forth the general policies and 

procedures for making and processing 

predevelopment planning SEARCH 

grants for water and waste projects. 

§ 1774.2 Definitions. 

The following definitions apply to 

subparts A and B of this part. 

Agency. The Rural Utilities Service of 

the United States Department of 

Agriculture (USDA) within the Rural 

Development mission area of the Under 

Secretary for Rural Development. The 

Processing Official will administer this 

water and waste program on behalf of 

the Rural Utilities Service. 

Approval official. The Agency official 

at the State level who has been 

delegated the authority to approve 

grants. 

ConAct. Consolidated Farm and Rural 

Development Act (7 U.S.C. 1926(a)(2)). 

Design assistance. Preliminary design 

and engineering analysis necessary for 

an application for funding. Design 

assistance does not include financial 

assistance for development of plans, 

specifications, or bidding documents. 

DUNS Number. Data Universal 

Numbering System number obtained 

from Dun and Bradstreet and used when 

applying for Federal grants or 

cooperative agreements. A DUNS 

number may be obtained at no cost, by 

calling 1–866–705–5711. 

Eligible entity. Entity that meets 

eligibility requirements to obtain a loan, 

loan guarantee or grant under 

Paragraphs 1, 2 or 24 of Section 306(a) 

of the ConAct (codified at 7 U.S.C. 

Section 1926(a)(1)(2) and (24)). 

Feasibility study. Documentation 

associated with an objective analysis of 

project-related technical engineering or 

environmental impact analyses required 

to support applications for funding 

water or waste disposal projects through 

USDA, Rural Utilities Service or other 

agencies. 

Financially distressed area. An area is 

considered financially distressed if the 

median household income of the area to 

be served is either below the poverty 

line or below 80 percent of the 

statewide non-metropolitan median 

household income based on available 

historic statistical information from the 

latest decennial census. 

Grantee. The applicant receiving 

financial assistance directly from the 

RUS to carry out the project or program 

under this program. 

Poverty line. The level of income for 

a family of four, as defined in section 

673(2) of the Community Services Block 

Grant Act (42 U.S.C. 9902(2)). 

Processing official. The Agency 

official designated by the approval 

official as having the authority to accept 

and process applications for water and 

waste disposal assistance. 

Rural area. For the purposes of this 

SEARCH program, any area not in a city 

or town with a population of 2,500 or 

fewer, according to the latest decennial 

census of the United States. 

State. Any of the 50 States, the 

District of Columbia, the 

Commonwealth of Puerto Rico, the 

Territory of Guam, the Commonwealth 

of the Northern Mariana Islands, the 

Republic of the Marshall Islands, the 

Federated States of Micronesia, the 

Republic of Palau, and the U.S. Virgin 

Islands. 

Technical assistance. Supervision, 

oversight, or training by an organization 

for the development of an application 

for financial assistance. 

§ 1774.3 Availability of forms and 

regulations. 

Information about the forms, 

instructions, regulations, bulletins, 

OMB Circulars, Treasury Circulars, 

standards, documents and publications 

cited in this part is available from any 

UDSA/Rural Development Office or the 

United States Department of 

Agriculture, Washington, DC 20250– 

1500 and at http://www.grants.gov. 

§ 1774.4 Allocation of funds. 

The Secretary may use not more than 

four percent of the total amount of funds 

made available for a fiscal year for water 

and waste disposal activities for 

SEARCH grants. 

§§ 1774.5–1774.6 [Reserved] 

§ 1774.7 Environmental requirements. 

The policies and regulations 

contained in Part 1794 of this chapter 

apply to grants made in accordance with 

this part. 

§ 1774.8 Other Federal Statutes. 

Other Federal statutes and regulations 

are applicable to grants awarded under 

this part. These include but are not 

limited to: 

(a) 7 CFR part 1, subpart A—USDA 

implementation of Freedom of 

Information Act. 

(b) 7 CFR part 3—USDA 

implementation of OMB Circular No. 

A–129 regarding debt collection. 

(c) 7 CFR part 15, subpart A—USDA 

implementation of Title VI of the Civil 

Rights Act of 1964, as amended. 

(d) 7 CFR part 1794, RUS 

Implementation of the National 

Environmental Policy Act. 

(e) 7 CFR part 1901, subpart E—Civil 

Rights Compliance Requirements. 

(f) 7 CFR part 3015—Uniform Federal 

Assistance Regulations. 

(g) 7 CFR part 3016—USDA 

Implementation of OMB Circular Nos. 

A–102 and A–97, Uniform 

Administrative Requirements for Grants 

and Cooperative Agreements to State 

and Local Governments. 

(h) 7 CFR part 3018— Restrictions on 

Lobbying, prohibiting the use of 

appropriated funds to influence 

Congress or a Federal agency in 

connection with the making of any 

Federal grant and other Federal 

contracting and financial transactions. 

(i) 7 CFR part 3019—USDA 

implementation of OMB Circular 

A–110, Uniform Administrative 

Requirements for Grants and 

Agreements With Institutions of Higher 

Education, Hospitals, and Other 

Nonprofit Organizations. 

(j) 7 CFR part 3021, as amended— 

Government-wide Debarment and 

Suspension (Non-procurement); 

Government-wide Requirements for 

Drug-Free Workplace (Grants), 

implementing Executive Order 12549 on 

debarment and suspension and the 

Drug-Free Workplace Act of 1988 (41 

U.S.C. 701). 

(k) 7 CFR part 3052—USDA 

implementation of OMB Circular No. 

A–133 regarding audits of institutions of 

higher education and other nonprofit 

institutions. 


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(l) 29 U.S.C. 794, section 504— 

Rehabilitation Act of 1973, and 7 CFR 

part 15B (USDA implementation of 

statute), prohibiting discrimination 

based upon physical or mental handicap 

in federally assisted programs. 

§ 1774.9 [Reserved] 

Subpart B—Grant Application 

Processing 

§ 1774.10 Applications. 

(a) To file an application, an 

organization must provide their DUNS 

number. An organization may obtain a 

DUNS number from Dun and Bradstreet 

by calling (1–866–705–5711). To file a 

complete application, the following 

information should be submitted: 

(1) Standard Form 424, ‘‘Application 

for Federal Assistance (For NonConstruction).’’ 

(2) Standard Form 424A & B, ‘‘Budget 

Information—Non-Construction 

Programs.’’ 

(3) Supporting documentation 

necessary to make an eligibility 

determination such as financial 

statements, audits, organizational 

documents, or existing debt 

instruments. The Processing Official 

will advise applicants regarding the 

required documents. Applicants that are 

indebted to RUS will not need to submit 

documents already on file with the 

Processing Official as long as such 

documents are current and valid. 

(4) Project narrative detailing the 

project to be financed with the SEARCH 

grant funds. The narrative will also 

provide details on the activities or tasks 

to be accomplished, objectives, 

timetables for task completion, and 

anticipated results. 

(5) The applicant’s Internal Revenue 

Service Taxpayer Identification Number 

(TIN). 

(6) Other Forms and certifications. 

Applicants will be required to submit 

the following items to the Processing 

Official, upon notification from the 

Processing Official to proceed with 

further development of the full 

application: 

(i) Form RD 442–7, ‘‘Operating 

Budget’’; 

(ii) Form RD 400–1, ‘‘Equal 

Opportunity Agreement’’; 

(iii) Form RD 400–4, ‘‘Assurance 

Agreement’’; 

(iv) Form AD–1047, ‘‘Certification 

Regarding Debarment, Suspension and 

other Responsibility Matters’’; 

(v) Form AD–1049, Certification 

regarding Drug-Free Workplace 

Requirements (Grants) Alternative I For 

Grantees Other Than Individuals; 

(vi) Certifications for Contracts, 

Grants, and Loans (Regarding Lobbying); 

and 

(vii) Certification regarding prohibited 

tying arrangements. Applicants that 

provide electric service must provide 

the Agency a certification that they will 

not require users of a water or waste 

facility financed under this part to 

accept electric service as a condition of 

receiving assistance. 

(b) Applicants are encouraged to 

contact the State Office or the 

Processing Official to find out how to 

file electronically. The application and 

supporting documentation must be sent 

or delivered to the Processing Official, 

unless it is filed electronically. 

§ 1774.11 [Reserved] 

§ 1774.12 Eligibility. 

The following eligibility requirements 

must be met: 

(a) The applicant must be: 

(1) A public body, such as a 

municipality, county, district, authority, 

or other political subdivision or a state, 

territory or commonwealth, or 

(2) An organization operated on a notfor-profit basis, such as an association, 

cooperative, or private corporation. The 

organization must be an association 

controlled by a local public body or 

bodies, or have a broadly based 

ownership by or membership of people 

of the local community, or 

(3) Indian tribes on Federal and State 

reservations and other federally 

recognized Indian tribes. 

(b) The area to be served must be 

financially distressed and rural as 

defined in § 1774.2 of this part. 

§ 1774.13 Limitations. 

Grant funds may not be used to: 

(a) Fund political or lobbying 

activities. 

(b) Pay for work already completed. 

(c) Purchase real estate or vehicles, 

improve or renovate office space, or 

repair and maintain privately owned 

property. 

(d) Construct or furnish a building. 

(e) Intervene in the Federal regulatory 

or adjudicatory proceedings. 

(f) Sue the Federal Government or any 

other government entities. 

(g) Pay for any other costs that are not 

allowable under OMB Circular A–87, 

OMB Circular A–110, OMB Circular 

A–102 or OMB Circular A–122. 

(h) Make contributions or donations 

to others. 

(i) Fund projects that duplicate 

technical assistance given to implement 

action plans under the National ForestDependent Rural Communities 

Economic Diversification Act of 1990 (7 

U.S.C. 6613). Applicants cannot receive 

both grants made under this part and 

grants that the Forest Service makes to 

implement the action plans for five 

continuous years from the date of grant 

approval by the Forest Service. 

(j) To pay an outstanding judgment 

obtained by the United States in a 

Federal Court (other than in the United 

States Tax Court), which has been 

recorded. An applicant will be ineligible 

to receive a loan or grant until the 

judgment is paid in full or otherwise 

satisfied. 

§ 1774.14 Eligible grant purposes. 

(a) Eligible predevelopment planning 

costs are feasibility studies, preliminary 

design assistance, and technical 

assistance as each is defined in § 1774.2. 

The eligible predevelopment activities 

funded with these grant funds must be 

agreed to and accepted by the Agency 

prior to the disbursement of the 

SEARCH grant. The predevelopment 

planning costs must be related to a 

proposed project that meets the 

following requirements: 

(1) To construct, enlarge, extend, or 

otherwise improve rural water, sanitary 

sewage, solid waste disposal, and storm 

wastewater disposal facilities. 

(2) To construct or relocate public 

buildings, roads, bridges, fences, or 

utilities, and to make other public 

improvements necessary for the 

successful operation or protection of 

facilities authorized in paragraph (a)(1) 

of this section. 

(3) To relocate private buildings, 

roads, bridges, fences, or utilities, and 

other private improvements necessary 

for the successful operation or 

protection of facilities authorized in 

paragraph (a)(1) of this section. 

(b) The Secretary, subject to the 

limitation in § 1774.4 of this part, may 

fund up to 100 percent of the eligible 

grant costs, not to exceed $30,000. 

§ 1774.15 Selection criteria. 

Projects will be selected based 

primarily on the funding priorities in 7 

CFR 1780.17. The Program Official 

discretionary points stated in 7 CFR 

1780.17(e) can also include 

consideration of the following criteria: 

(a) Systems with limited resources. 

(b) Smallest systems with lowest 

incomes. 

(c) Funds availability. 

§ 1774.16 Grant application processing 

and approval. 

(a) Before starting to assemble the full 

application, the applicant should 

arrange through the Processing Official 

an application conference to provide a 

basis for orderly application assembly. 


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Federal Register / Vol. 75, No. 14 / Friday, January 22, 2010 / Proposed Rules 3647 

The processing office will explain 

program requirements, public 

information requirements and provide 

guidance on preparation of items 

necessary for final determination. 

(b) The Processing Official will 

determine if the application is properly 

assembled. If not, the applicant will be 

notified within fifteen federal working 

days as to what additional submittal 

items are needed. 

(c) The Processing Official and 

Approval Official will coordinate their 

reviews to ensure that the applicant is 

advised about eligibility and anticipated 

fund availability within 45 days of the 

receipt of a completed application. 

(d) The Processing Official will 

submit the following to the Approval 

Official: 

(1) ‘‘Water and Waste Project 

Information Summary’’; 

(2) Form RD 442–3, ‘‘Balance Sheet’’ 

or a financial statement or audit that 

includes a balance sheet; 

(3) Letter of Conditions; 

(4) Form RD 1942–46, ‘‘Letter of Intent 

to Meet Conditions’’; 

(5) Form RD 1940–1, ‘‘Request for 

Obligation of Funds’’; 

§ 1774.17 Grant closing and disbursement. 

(a) Grant closing. RUS Bulletin 1780– 

12 ‘‘Water or Waste System Grant 

Agreement’’ will be completed and 

executed in accordance with the 

requirements of grant approval. The 

grant will be considered closed when 

RUS Bulletin 1780–12 has been 

properly executed. Processing officials 

or Approval officials are authorized to 

sign the grant agreement on behalf of 

RUS. 

(b) Grant disbursements. Agency 

policy is not to disburse grant funds 

from the Treasury until they are actually 

needed by the applicant. If an approved 

grant includes applicant or other 

contributions, then these funds will be 

disbursed before the disbursal of any 

Agency grant funds. 

(c) Payment for project costs. Project 

costs will be monitored by the RUS 

processing office. Invoices will be 

approved by the borrower and 

submitted to the Processing Official for 

concurrence. The review and 

acceptance of project costs by the 

Agency does not attest to the correctness 

of the amounts, the quantities shown or 

that the work has been performed under 

the terms of the agreements or contracts. 

(d) Use of remaining funds. Funds 

remaining after all costs incident to the 

basic project have been paid or provided 

for will not include applicant 

contributions if SEARCH grants funds 

are financing less than 100 percent of 

the project. Funds remaining may be 

considered in direct proportion to the 

amounts obtained from each source. 

Remaining funds will be handled as 

follows: 

(1) Remaining funds may be used for 

eligible grant purposes as described in 

1774.14 of this subpart, or 

(2) Grant funds not expended will be 

canceled. Prior to the actual 

cancellation, the borrower, its attorney 

and its engineer will be notified of RUS’ 

intent to cancel the remaining funds. 

§ 1774.18 Reporting requirements, 

accounting methods and audits. 

All Agency grantees will follow the 

reporting requirements as outlined in 7 

CFR 1780.47. 

§ 1774.19 Applications determined 

ineligible. 

If at any time an application is 

determined ineligible, the processing 

office will notify the applicant in 

writing of the reasons. The notification 

to the applicant will state that an appeal 

of this decision may be made by the 

applicant under 7 CFR Part 11. 

§ 1774.20 Conflict of interest. 

Any processing or servicing activity 

conducted pursuant to this part 

involving authorized assistance to Rural 

Development employees with Water and 

Environmental Programs responsibility, 

members of their families, known close 

relatives, or business or close personal 

associates, is subject to the provisions of 

subpart D of part 1900 of this title. 

Applicants of this assistance are 

required to identify any known 

relationship or association with an RUS 

employee. 

§§ 1774.21–1774.23 [Reserved] 

§ 1774.24 Exception authority. 

The Administrator may, in individual 

cases, make an exception to any 

requirement or provision of this part 

which is not inconsistent with the 

authorizing statute or other applicable 

law and is determined to be in the 

Government’s interest. Requests for 

exceptions must be made in writing by 

the State Director and supported with 

documentation to explain the adverse 

effect on the Government’s interest, 

propose alternative course(s) of action, 

and show how the adverse effect will be 

eliminated or minimized if the 

exception is granted. The exception 

decision will be documented in writing, 

signed by the Administrator, and 

retained in the files. 

§§ 1774.25–1774.99 [Reserved] 

§ 1774.100 OMB Control Number. 

The information collection 

requirements in this part will not be 

effective until approved by the Office of 

Management and Budget (OMB), subject 

to the submission of a paperwork 

package to OMB and assigned an OMB 

Control Number. 

Dated: January 15, 2010. 

Jonathan Adelstein, 

Administrator, Rural Utilities Service. 

[FR Doc. 2010–1213 Filed 1–21–10; 8:45 am] 

BILLING CODE 3410–15–P 

FARM CREDIT ADMINISTRATION 

12 CFR Part 652 

RIN 3052–AC51 

Federal Agricultural Mortgage 

Corporation Funding and Fiscal 

Affairs; Risk-Based Capital 

Requirements 

AGENCY: Farm Credit Administration. 

ACTION: Proposed rule. 

SUMMARY: The Farm Credit 

Administration (FCA, Agency, us, or 

we) proposes to amend our regulations 

on the Risk-Based Capital Stress Test 

(RBCST or model) used by the Federal 

Agricultural Mortgage Corporation 

(Farmer Mac or the Corporation). We 

propose to update the model to address 

recent additions to Farmer Mac’s 

program authorities, specifically the 

authority for Farmer Mac to finance 

rural utility loans. We are also 

proposing to revise the existing 

treatment of risk mitigations of general 

obligations for the AgVantage Plus 

program and related structures, as 

established in Version 3.0 of the model. 

Finally, we propose revising the 

treatment of counterparty risk on nonprogram investments in the model by 

adjusting the haircuts applied to those 

investments to keep the model 

consistent with statutory requirements 

for calculating Farmer Mac’s regulatory 

minimum capital level. 

DATES: You may send us comments by 

March 8, 2010. 

ADDRESSES: We offer a variety of 

methods for you to submit comments on 

this proposed rule. For accuracy and 

efficiency reasons, commenters are 

encouraged to submit comments by email or through the Agency’s Web site. 

As facsimiles (fax) are difficult for us to 

process and achieve compliance with 

section 508 of the Rehabilitation Act, we 

are no longer accepting comments 

submitted by fax. Regardless of the 

method you use, please do not submit 

your comment multiple times via 

different methods. You may submit 

comments by any of the following 

methods: 


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