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###### Department of Agriculture

###### Agricultural Marketing Service 

          - 7 CFR Part 1291 
          - [Docket No. AMS-FV-08-0057; FV-08-379 IFR] 
          - RIN 0581-AC88 

# AGENCY:

Agricultural Marketing Service, USDA. 

# ACTION:

Interim final rule with request for comments. 

# SUMMARY:

                        This rule provides regulations to administer the Specialty Crop Block Grant Program—Farm Bill (SCBGP-FB) to enhance the competitiveness of specialty crops. This rule is intended to                               ( print page 51586)                            establish eligibility and application requirements and grant administration procedures for the SCBGP-FB consistent with the Food, Conversation, and Energy Act of 2008 (Farm Bill) amendments to the Specialty Crops Competitiveness Act of 2004. This program is separate from the Specialty Crop Block Grant Program (SCBGP) found in 7 CFR part 1290.                     

# DATES:

Effective September 5, 2008; comments received by November 3, 2008, will be considered prior to issuance of a final rule. Pursuant to the Paperwork Reduction Act, comments on the information collection burden that would result from this rule must be received by November 3, 2008. 

# ADDRESSES:

                        Interested persons are invited to submit written comments concerning this action. Comments must be posted on                         *http://www.regulations.gov;*                         or sent to the Docket Clerk, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., Stop 0235, Washington, DC 20250-0235;                         *Fax:*                         (202) 720-0016;                         *E-mail:**scblockgrants@usda.gov.*

In addition, comments concerning the information collection and recordkeeping requirement required by this rule should also be sent to the Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, 725 17th St., NW., Room 725, Washington, DC 20503. Comments are invited on: (1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. 

                        All comments should reference the docket number AMS-FV-08-0057; FV-08-379, the date, and the page number of this issue of the                         **Federal Register**                        .                     

# FOR FURTHER INFORMATION CONTACT:

                        Trista Etzig, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., Stop 0235, Washington, DC 20250-0235;                         *Telephone:*                         (202) 690-4942;                         *Fax:*                         (202) 720-0016; or                         *E-mail: trista.etzig@usda.gov.*

# SUPPLEMENTARY INFORMATION:

## Executive Order 12866

This rule has been determined to be not significant for the purposes of Executive Order 12866 and therefore has not been reviewed by the Office of Management and Budget (OMB). 

## Public Law 104-4

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State and local governments and the private sector. Under section 202 of the UMRA, the Agricultural Marketing Service (AMS) generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures by State and local governments, in the aggregate, or by the private sector, of $100 million or more in any one year (2 U.S.C. 1532). When such a statement is needed for a rule, section 205 of the UMRA generally requires federal agencies to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule (2 U.S.C. 1535). 

This rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State and local governments or the private sector of $100 million or more in any one year. Therefore, this rule is not subject to the requirements of sections 202 and 205 of the UMRA. 

## Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This action is not intended to have retroactive effect. This rule will not preempt any State or local laws, regulations or policies, unless they present an irreconcilable conflict with this rule. There are no administrative procedures which must be exhausted prior to any judicial challenge to the provisions of this rule. 

## Catalog of Federal Domestic Assistance 

This program is listed in the Catalog of Federal Domestic Assistance under No. 10.170, Specialty Crop Block Grant Program—Farm Bill. 

## Executive Order 12372

This program is not subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials. See the Notice related to 7 CFR part 3015, subpart V published at 48 FR 29115 (June 24, 1983). 

## Executive Order 12612

It has been determined that this rule does not have sufficient Federalism implications to warrant the preparation of a Federalism Assessment. The provisions contained in this rule would not have a substantial direct effect on States or their political subdivisions or on the distribution of power and responsibilities among the various levels of government. 

## Regulatory Flexibility Act 

                    The AMS certifies that this rule will not have a significant impact on a substantial number of small entities as defined in the Regulatory Flexibility Act, Public Law 96-534, as amended (5 U.S.C. 601*et seq.*). This rule only will impact State departments of agriculture that apply for grant funds. States, as defined under the SCBGP-FB, mean the fifty States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands. The States are not small entities under the Act.                 

## Authority for a Specialty Crop Block Grant Program 

This program is intended to accomplish the goal of enhancing the competitiveness of specialty crops. The SCBGP-FB is authorized under section 101 of the Specialty Crops Competitiveness Act of 2004 (7 U.S.C. 1621 note, amended under section 10109 of the Food, Conservation, and Energy Act of 2008, the Farm Bill). Section 10109 directs the Secretary of Agriculture to make grants to States to be used by State departments of agriculture solely to enhance the competitiveness of specialty crops. This program is separate from the Specialty Crop Block Grant Program (SCBGP) found in 7 CFR part 1290. 

This rule also invites comments on the reporting and recordkeeping provisions that would be generated by this interim final rule. The information collection and recordkeeping requirements associated with this interim final rule are explained in more detail in the Paperwork Reduction Act section of this rule. 

## Background 

                    On July 30, 2008, AMS published at 73 FR 44211, a Notice of Funds Availability. AMS announced the availability of approximately $10 million in grant funds, less USDA                           ( print page 51587)                        administrative costs, to enhance the competitiveness of specialty crops. The 2008 Farm Bill makes the SCBGP-FB funds available only through the end of the fiscal year (September 30, 2008). In view of this, a shorter application period was deemed appropriate. Applications are to be received not later than September 8, 2008. The application process is discussed in the July 30, 2008 Notice of Funds Availability. This interim final rule includes additional application and State plan requirements beginning with fiscal year 2009.                 

Under the program established by this interim final rule, the Fruit and Vegetable Program will announce every fiscal year that applications may be submitted for participation in a “Specialty Crop Block Grant Program—Farm Bill”, which will be administered by personnel of the Agricultural Marketing Service (AMS). 

                    Mandatory funding will be made available to the Secretary of Agriculture to provide specialty crop block grants of $10 million for fiscal year 2008, $49 million in 2009, and $55 million in each of fiscal years 2010 through 2012, less USDA administrative costs. Each fiscal year, the AMS intends to publish a                     **Federal Register**                     notice announcing the program and soliciting grant applications. The notice will include the amount of grant funds available to each State and the application period.                 

                    For each fiscal year, each State that submits an application that is reviewed and approved by AMS is to receive at least an amount that is equal to the higher of $100,000, or                     1/3                     of 1 percent of the total amount of funding made available for that fiscal year to enhance the competitiveness of specialty crops. In addition, each State will receive an amount that represents the proportion of the value of specialty crop production in the state in relation to the national value of specialty crop production using the latest available complete specialty crop production data set in all states whose applications are accepted.                 

All 50 States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands are eligible to participate. SCBGP applications will be accepted from any State department of agriculture, as defined under the SCBGP-FB, which means the agency, commission, or department of a State government responsible for agriculture within the State. 

“Specialty crops” for the purpose of this rule, means fruits and vegetables, tree nuts, dried fruits, horticulture and nursery crops (including floriculture). The inclusion of horticulture means turfgrass sod is a covered commodity. 

                    Section 1291.4 prescribes that grant funds shall be used to enhance the competitiveness of eligible specialty crops and benefit the specialty crop industry and/or the public. For a list of eligible specialty crops and ineligible commodities, please refer to the SCBGP Guidelines available on the SCBGP Web site at                     *http://www.ams.usda.gov/​fv.*

                    Section 1291.7 prescribes application procedures that include a State plan to indicate how grant funds will be utilized to enhance the competitiveness of specialty crops. For guidance on completing the application, please refer to the SCBGP Guidelines available on the SCBGP Web site at                     *http://www.ams.usda.gov/​fv.*

State departments of agriculture are encouraged to conduct outreach to specialty crop producers, including socially disadvantaged and beginning farmers of specialty crops and develop their State plans through a competitive process to ensure maximum public input and benefit. States are also encouraged to include multi-state and regional proposals. 

Section 1291.10 prescribes that States who do not apply for or do not request all available funding during the specified grant application period will forfeit all or that portion of available funding not requested for that application year. Funds not obligated will be allocated pro rata to the remaining States who applied during the specified grant application period to be solely expended on projects previously approved in their State plan. 

AMS is inviting comments on this interim final rule. 

## Paperwork Reduction Act 

                    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501*et seq.*), the AMS has requested emergency review and approval by the Office of Management and Budget of a new information collection.                 

*Title:*                     Specialty Crop Block Grant Program—Farm Bill.                 

*OMB Number:*                     0581-New.                 

*Type of Request:*                     New Information Collection.                 

*Expiration Date of Approval:*                     3 years from date of OMB approval.                 

*Abstract:*                     The information collection requirements in this request are applied only to those State departments of agriculture who voluntarily participate in the SCBGP-FB. The information collected is needed for the implementation of the SCBGP-FB, to determine a State department of agriculture's eligibility in the program, and to certify that grant participants are complying with applicable program regulations. Data collected is the minimum information necessary to effectively carry out the requirements of the program, and to fulfill the intent of Section 101 of the Competitiveness Act of 2004, as amended by Section 10109 of the Food, Conservation, and Energy Act of 2008, Public Law 110-246, the Farm Bill.                 

State departments of agriculture who wish to participate in the SCBGP-FB would have to submit the following: 

(a) SF-424, “Application for Federal Assistance”, (approved under OMB collection number 4040-0004) is required to apply for federal assistance. 

(b) SF-424A, “Budget Information-Non-Construction Programs,” (approved under OMB collection number 0348-0044) is required to show each project's budget breakdown. 

(c) Form SF-424B, “Assurances-Non-Construction Programs”, (approved under OMB collection number 0348-0040) to assure the Federal government of the applicant's legal authority to apply for Federal assistance. 

(d) State Plan Narrative. Completed applications must include a State Plan Narrative to show how grant funds will be utilized to enhance the competitiveness of specialty crops. 

*Estimate of Burden:*                     Public reporting burden for this collection of information is estimated to average 10 hours per response.                 

*Respondents:*                     State departments of agriculture.                 

*Estimated Number of Respondents:*                     56 (All 50 States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands).                 

*Estimated Number of Responses:*                     56.                 

*Estimated Number of Responses per Respondent:*                     1.                 

*Estimated Total Annual Burden on Respondents:*                     560 hours.                 

Before funds are dispersed, State departments of agriculture must complete the following forms: 

(a) Form AD-1047, “Certification Regarding Disbarment, Suspension, and Other Responsibility Matters—Primary Covered Transactions.” This form must have the grantee's original signature. 

*Estimate of Burden:*                     Public reporting burden for this collection of information is estimated to average .20 hours per response.                 

*Respondents:*                     State departments of agriculture.                 

*Estimated Number of Respondents:*                     56.                 

*Estimated Number of Responses:*                     56.                 

*Estimated Number of Responses per Respondent:*                     1.                           ( print page 51588)    

*Estimated Total Annual Burden on Respondents:*                     11.20 hours.                 

(b) Form AD-1048, “Certification Regarding Disbarment, Suspension, Ineligibility and Voluntary Exclusion—Lower Tier Covered Transactions.” The grantee keeps this document for their records. 

*Estimate of Burden:*                     Public reporting burden for this collection of information is estimated to average .20 hours per response.                 

*Respondents:*                     State departments of agriculture.                 

*Estimated Number of Respondents:*                     56.                 

*Estimated Number of Responses:*                     56.                 

*Estimated Number of Responses per Respondent:*                     1.                 

*Estimated Total Annual Burden on Respondents:*                     11.20 hours.                 

(c) Form AD-1049, “Certification Regarding Drug-Free Workplace Requirements (Grants) Alternative I—For Grantees Other Than Individuals.” This form must have the grantee's original signature. 

*Estimate of Burden:*                     Public reporting burden for this collection of information is estimated to average .20 hours per response.                 

*Respondents:*                     State departments of agriculture.                 

*Estimated Number of Respondents:*                     56.                 

*Estimated Number of Responses:*                     56.                 

*Estimated Number of Responses per Respondent:*                     1.                 

*Estimated Total Annual Burden on Respondents:*                     11.20 hours.                 

(d) Form SF-LLL, “Disclosure of Lobbying Activities,” (approved under OMB collection number 0348-0046). This form must have the grantee's original signature. 

Additionally, State departments of agriculture must also complete the following forms and paperwork for AMS: 

(a) Grant Agreement. The Grant Agreement sets forth the agreed upon responsibilities of AMS project work. It also indicates the agreed upon grant funding dollar amounts and the beginning date and ending date of the project work and the Grant Agreement. Four (4) copies of this Grant Agreement are required with the grantee's signatures and dated for each grant. 

*Estimate of Burden:*                     Public reporting burden for this collection of information is estimated to average .08 hours per response.                 

*Respondents:*                     State departments of agriculture.                 

*Estimated Number of Respondents:*                     56.                 

*Estimated Number of Responses:*                     56.                 

*Estimated Number of Responses per Respondent:*                     1.                 

*Estimated Total Annual Burden on Respondents:*                     4.65 hours.                 

(b) Form SF-270, “Request for Advance and Reimbursement” (approved under OMB collection number 0348-0004) is required whenever the grantees request an advance or reimbursement of Federal grant funds. AMS expects that at least three (3) SF-270 forms will be submitted during the grant agreement period. 

(c) Annual Performance Report. The Annual Performance Report is required if a grant period is more than one year in length. The Annual Performance Report is written documentation required to notify AMS about the work activities and progress towards completing the grantee's and subgrantee's established project activities, goals and outcomes. AMS expects that at least two (2) Annual Performance Reports will be submitted during the grant agreement period. 

*Estimate of Burden:*                     Public reporting burden for this collection of information is estimated to average 3 hours per response.                 

*Respondents:*                     State departments of agriculture.                 

*Estimated Number of Respondents:*                     56.                 

*Estimated Number of Responses:*                     112.                 

*Estimated Number of Responses per Respondent:*                     2.                 

*Estimated Total Annual Burden on Respondents:*                     336 hours.                 

(d) Final Performance Report. The Final Performance Report is written information required by AMS within 90 days after the ending date of the grant agreement. This information is utilized as final documentation of completion of the project activities, goals and outcomes. 

*Estimate of Burden:*                     Public reporting burden for this collection of information is estimated to average 6 hours per response.                 

*Respondents:*                     State departments of agriculture.                 

*Estimated Number of Respondents:*                     56.                 

*Estimated Number of Responses:*                     56.                 

*Estimated Number of Responses per Respondent:*                     1.                 

*Estimated Total Annual Burden on Respondents:*                     336 hours.                 

(e) Request for Grant Period Extension. If the grant period goes beyond 3 calendar years, a grantee would have to submit in writing to AMS requesting a grant period extension. 

*Estimate of Burden:*                     Public reporting burden for this collection of information is estimated to average .17 hours per response.                 

*Respondents:*                     State departments of agriculture.                 

*Estimated Number of Respondents:*                     6.                 

*Estimated Number of Responses:*                     6.                 

*Estimated Number of Responses per Respondent:*                     1.                 

*Estimated Total Annual Burden on Respondents:*                     1.02 hours.                 

(f) SF-269 “Financial Status Report”, if the project had program income (Long Form approved under OMB collection number 0348-0039), or SF-269A “Financial Status Report” (Short Form approved under OMB collection number 0348-0038) is to be completed 90 days after the expiration date of the grant period to comply with various legal and regulatory requirements as described within the form. 

(g) Audit Report. A State is required to conduct an audit of SCBGP expenditures and an audit report is required to be submitted to AMS no later than 30 days after completion of the audit. 

*Estimate of Burden:*                     Public reporting burden for this collection of information is estimated to average 3 hours per response.                 

*Respondents:*                     State departments of agriculture.                 

*Estimated Number of Respondents:*                     56.                 

*Estimated Number of Responses:*                     56.                 

*Estimated Number of Responses per Respondent:*                     1.                 

*Estimated Total Annual Burden on Respondents:*                     168 hours.                 

Finally, State departments of agriculture are required to retain records pertaining to the SCBGP for 3 years after completion of the grant period or until final resolution of any audit findings or litigation claims relating to the SCBGP. This is a part of normal business practice. 

This program would not be maintained by any other Agency, therefore, the requested information will not be available from any other existing records. 

AMS is committed to compliance with the Government Paperwork Elimination Act (GPEA), which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. For paper submissions, the SF and AD forms can be filled out electronically and printed out for submission with original signatures. The State Plan (Narrative) can be filled out electronically and printed out for submission. For grants.gov submissions, all SF and AD forms, as well as the State Plan (Narrative) can be filled out electronically and submitted as an attachment. 

                    The Annual Performance Report, Final Performance Report, Audit Report,                           ( print page 51589)                        and Request for Grant Period Extension can be submitted electronically. The Grant Agreement requires an original signature and can be submitted by mail.                 

Comments are invited on: (1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (2) the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. 

                    Comments on the information collection must be posted online at                     *http://www.regulations.gov*; or sent to Docket Clerk, Fruit and Vegetable Programs, Agricultural Marketing Service, U.S. Department of Agriculture, Stop 0235, 1400 Independence Avenue, SW., Washington, DC 20250-0235;                     *Fax:*                     (202) 720-0016; or                     *E-mail: scblockgrants@usda.gov.*                     In addition, comments concerning the information collection and recordkeeping requirement required by this rule should also be sent to the Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, 725 17th St., NW., Room 725, Washington, DC 20503. All comments to this information collection and recordkeeping requirement will be summarized in the final rule. All comments should reference the docket number AMS-FV-08-0057; FV-08-379, the date, and the page number of this issue of the                     **Federal Register**                    . All comments will also become a matter of public record.                 

A 60-day comment period is provided to allow interested persons to respond to this information collection. 

## Effective Date 

                    It has been determined that this rule should be issued as an interim rule. The Specialty Crop Block Grant Program is authorized by section 101 of the Specialty Crops Competitiveness Act of 2004 (7 U.S.C. 1621 note; amended under section 10109 of the Food, Conservation, and Energy Act of 2008, Public Law 110-246, the Farm Bill). Section 10109 of the Farm Bill directs the Secretary of Agriculture to make available $10 million in fiscal year 2008, $49 million in fiscal year 2009, and $55 million in fiscal years 2010 through 2012 to provide specialty crop block grants. This rule implements changes in the Farm Bill to the SCBGP, authorized by section 101 of the Specialty Crops Competitiveness Act of 2004 (7 U.S.C. 1621 note). Because the Farm Bill was only recently enacted and requires the Secretary of Agriculture to make available approximately $10 million in grant funds in fiscal year 2008, which ends September 30, 2008, pursuant to 5 U.S.C. 553, it is found, and determined, upon good cause, that it is impracticable and contrary to the public interest to give further notice prior to putting this rule into effect, and that good cause exists for not postponing the effective date of this interim final rule until 30 days after publication in the                     **Federal Register**                    .                 

# List of Subjects in 7 CFR Part 1291

      - Specialty crop block grants
      - Agriculture
      - Reporting and recordkeeping requirements

For the reasons set forth in the preamble, and under authority of 7 U.S.C. 1621 note, amended under Section 10109 of the Food, Conservation, and Energy Act of 2008, Public Law 110-246, Title 7, Chapter XI of the Code of Federal Regulations is amended by adding part 1291 to read as follows: 

# PART 1291—SPECIALTY CROP BLOCK GRANT PROGRAM—FARM BILL 

        - 1291.1 
        - Purpose and scope. 
        - 1291.2 
        - Definitions. 
        - 1291.3 
        - Eligible grant applicants. 
        - 1291.4 
        - Eligible grant project. 
        - 1291.5 
        - Restrictions and limitations on grant funds. 
        - 1291.6 
        - Completed application. 
        - 1291.7 
        - Review of grant applications. 
        - 1291.8 
        - Grant agreements. 
        - 1291.9 
        - Unobligated funds. 
        - 1291.10 
        - Reporting and oversight requirements. 
        - 1291.11 
        - Audit requirements.

Authority:7 U.S.C. 1621 note, as amended. 

§ 1291.1 

Pursuant to the authority conferred by Section 101 of the Specialty Crops Competitiveness Act of 2004 (7 U.S.C. 1621 note), as amended by Section 10109 of the Food, Conservation, and Energy Act of 2008, Public Law 110-246, AMS will make grants to States to enhance the competitiveness of specialty crops in accordance with the terms and conditions set forth herein and other applicable federal statutes and regulations, including, but not limited to, 7 CFR Part 3015 and Part 3016. 

§ 1291.2 

                                (a)                                 *AMS*                                 means the Agricultural Marketing Service of the U.S. Department of Agriculture.                             

                                (b)                                 *Application*                                 means the application for Specialty Crop Block Grant Program—Farm Bill.                             

                                (c)                                 *Enhancing the competitiveness*                                 of specialty crops means, but is not limited to: Research, food safety, food security, plant health programs, education, nutrition, trade enhancement, promotion, marketing, “buy local” programs, increased consumption, increased innovation, improved efficiency and reduced costs of distribution systems, environmental concerns and conservation, product development, and developing cooperatives.                             

                                (d)                                 *Grant period*                                 means the period of time from when the grant agreement is signed to the completion of all SCBGP-FB projects submitted in the State plan.                             

                                (e)                                 *Grantee*                                 means the government to which a grant is awarded and which is accountable for the use of the funds provided. The grantee is the entire legal entity even if only a particular component of the entity is designated in the grant agreement.                             

                                (f)                                 *Indirect costs*                                 means those costs incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved.                             

                                (g)                                 *Outcome measure*                                 means an event or condition that is external to the project and that is of direct importance to the intended beneficiaries and/or the public.                             

                                (h)                                 *Project*                                 means all proposed activities to be funded by the SCBGP-FB.                             

                                (i)                                 *Specialty crop*                                 means fruit and vegetables, tree nuts, dried fruits, horticulture and nursery crops (including floriculture).                             

                                (j)                                 *State*                                 means the fifty States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands.                             

                                (k)                                 *State department of agriculture*                                 means the agency, commission, or department of a State government responsible for agriculture within the State.                             

                                (l)                                 *Subgrantee*                                 means the government or other legal entity to which a subgrant is awarded and which is accountable to the grantee for the use of funds provided.                             

      ( print page 51590)    
§ 1291.3 

Eligible grant applicants are State departments of agriculture from the fifty states, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands. 

§ 1291.4 

(a) To be eligible for a grant, the project(s) must enhance the competitiveness of U.S. grown or U.S. territory grown eligible specialty crops, in either domestic or foreign markets. 

(b) To be eligible for a grant, the project(s) must be completed within three calendar years after the grant agreement prescribed in § 1291.8 of this part is signed. The grant period is established by the longest approved project submitted in the State plan. However, for cause, an extension of the grant period not to exceed three years may be granted by AMS on a case by case basis with a written request from the State. 

(c) Projects should benefit the specialty crop industry and/or the public rather than a single organization, institution, individual, or commercial product. Single organizations, institutions, and individuals are eligible to participate as project partners. 

(d) Multi-state projects that address solutions to problems that cross state boundaries are eligible. 

§ 1291.5 

(a) Grant funds may not be used to fund political activities in accordance with provisions of the Hatch Act (5 U.S.C. 1501-1508 and 7321-7326). 

(b) Development or participation in lobbying activities pursuant to 31 U.S.C. 1352 including costs of membership in organizations substantially engaged in lobbying are unallowable. 

(c) Grant funds shall supplement the expenditure of State funds in support of specialty crops grown in that State, rather than replace State funds. 

(d) Grantees and subgrantees must comply with 7 CFR Part 3015. 

§ 1291.6 

Completed applications shall be clear and succinct and shall include the following documentation satisfactory to AMS. 

(a) One SF-424 “Application for Federal Assistance”. 

(b) One SF-424A “Budget Information-Non-Construction Programs.” This form is required for applications submitted after September 30, 2008. 

(c) One SF-424B “Assurances-Non-Construction Program.” 

(d) Completed applications must also include one State plan to show how grant funds will be utilized to enhance the competitiveness of specialty crops. The state plan shall include the following for each project: 

                                (1)                                 *Cover page and granting processes.*                                 Include the point of contact and lead agency for administering the plan. If outreach was performed to specialty crop producers, including socially disadvantaged and beginning farmers of specialty crops regarding the SCBGP-FB, provide a description of the affirmative steps taken to perform this outreach to these groups. The description should include the methods used for identifying these groups and the methods used to reach out to them. Identify if an award was made to either a socially disadvantaged or beginning farmer. If outreach to these groups was not performed, explain why not. Indicate if a competitive process was used to solicit and evaluate grant proposals from all interested parties. If a competitive process was not used to solicit and evaluate grant proposals, explain why not. This paragraph (d)(1) is required for applications submitted after September 30, 2008.                             

                                (2)                                 *Project title and abstract.*                                 Include the title of the project and an abstract of 200 or fewer words.                             

                                (3)                                 *Project purpose.*                                 Clearly state the purpose of the project. Describe the specific issue, problem, interest, or need to be addressed. Explain why the project is important and timely. If a proposal builds on a previous SCBGP or SCBGP-FB project, indicate clearly how the new proposal complements previous work. Indicate if the proposal will be or has been submitted to another Federal grant program.                             

                                (4)                                 *Potential impact.*                                 Discuss the number of people or operations affected, the intended beneficiaries of each project, and/or potential economic impact if such data are available and relevant to the project.                             

                                (5)                                 *Expected Measurable Outcomes.*                                 Describe at least one distinct, quantifiable, and measurable outcome-oriented objective that directly and meaningfully supports the project's purpose. The measurable outcome-oriented objective must define an event or condition that is external to the project and that is of direct importance to the intended beneficiaries and/or the public. Outcome measures may be long term that exceed the grant period. Describe how performance toward meeting outcomes will be monitored. For applications submitted after September 30, 2008, include a performance-monitoring plan to describe the process of collecting and analyzing data to meet the outcome-oriented objectives.                             

                                (6)                                 *Work Plan.*                                 Explain briefly the activities that will be performed to accomplish the objectives of the project. Be clear about who will do the work. Include appropriate time lines.                             

                                (7)                                 *Budget Narrative.*                                 Indirect costs should not exceed 10 percent of any proposed budget. Provide a justification if indirect costs exceed 10 percent. For applications submitted after September 30, 2008, provide in sufficient detail information about the budget categories listed on SF-424A to demonstrate that grant funds are being expended on eligible grant activities that meet the purpose of the program.                             

                                (8)                                 *Project Oversight.*                                 Describe the oversight practices that provide sufficient knowledge of grant activities to ensure proper and efficient administration.                             

                                (9)                                 *Project Commitment.*                                 Describe how all grant partners commit to and work toward the goals and outcome measures of the proposed project(s).                             

                                (10)                                 *Multi-State Projects.*                                 If the project is a multi-state project, describe how the States are going to collaborate effectively with related projects with one state assuming the coordinating role. Indicate the percent of the budget covered by each State.                             

§ 1291.7 

(a) Applications will be reviewed and approved or rejected as appropriate for conformance with the provisions in § 1291.6 of this part. AMS may request the applicant provide additional information or clarification. 

(b) Incomplete applications as of the deadline for submission will not be considered. 

§ 1291.8 

(a) After approval of a grant application, AMS will enter into a grant agreement with the State department of agriculture. 

(b) AMS grant agreements will include at a minimum the following: 

(1) The projects in the approved State plan. 

(2) Total amount of Federal financial assistance that will be advanced. 

(3) Beginning and end dates of the grant agreement period. 

(4) Terms and conditions pursuant to which AMS will fund the project(s). 

§ 1291.9 

                                (a) States who do not apply for or do not request all available funding during the specified grant application period will forfeit all or that portion of available funding not requested for that application year.                                       ( print page 51591)    

(b) Funds not obligated will be allocated, by a date as determined by the Secretary, pro rata to the remaining States who applied during the specified grant application period to be solely expended on projects previously approved in their State plan. 

§ 1291.10 

(a) An annual performance report will be required of all State departments' of agriculture within 90 days after the completion of the first year of the project(s), until the expiration date of the grant agreement. If the grant period is one year or less, then only a final performance report is required (See paragraph (b) of this section). The annual performance report shall include the following: 

                                (1)                                 *Activities Performed.*                                 Briefly summarize activities performed, targets, and/or performance goals achieved during the reporting period to meet measurable outcomes for each project.                             

                                (2)                                 *Problems and Delays.*                                 Note unexpected delays or impediments for each project.                             

                                (3)                                 *Future Project Plans.*                                 Outline work to be performed during the next reporting period for each project.                             

                                (4)                                 *Funding Expended To Date.*                                 Comment on the level of grant funds expended to date for each project.                             

(b) A final performance report will be required of all State departments of agriculture within 90 days following the expiration date of the grant period. The final progress report shall include the following: 

                                (1)                                 *Project Summary.*                                 An outline of the issue, problem, interest, or need for each project.                             

                                (2)                                 *Project Approach.*                                 How the issue or problem was approached via each project.                             

                                (3)                                 *Goals and Outcomes Achieved.*                                 How the performance goals and measurable outcomes were achieved for each project(s). If outcome measures were long term, summarize the progress that has been made towards achievement.                             

                                (4)                                 *Beneficiaries.*                                 Description and quantitative data for the number of people or operations that have benefited from the project's accomplishments, and/or the potential economic impact of each project.                             

                                (5)                                 *Lessons Learned.*                                 Lessons learned, results, conclusions, for each project. If outcome measures were not achieved, identify and share the lessons learned to help expedite problem-solving.                             

                                (6)                                 *Contact Person.*                                 List the contact person for each project with telephone number and email address.                             

                                (7)                                 *Additional Information.*                                 Include other relevant project information available (e.g. publications, Web sites, photographs).                             

(c) A final SF-269A “Financial Status Report (Short Form)” or SF-269 “Financial Status Report (Long Form)” if the project(s) had program income, is required within 90 days following the expiration date of the grant period. 

(d) AMS will monitor States, as it determines necessary, to assure that projects are completed in accordance with the approved State plan. If AMS, after reasonable notice to a State, and opportunity to be heard, finds that there has been a failure by the State to comply substantially with any provision or requirement of the State plan, AMS may disqualify, for one or more years, the State from receipt of future grants under the SCBGP. 

(e) States shall diligently monitor performance to ensure that time schedules are being met, project work within designated time periods is being accomplished, and other performance measures are being achieved. 

§ 1291.11 

Each year that a State receives a grant under the SCBGP-FB, the State is required to conduct an audit of the expenditures of SCBGP-FB funds. If the Single Audit Act applies to an eligible grantee, the State shall submit the annual audit results to AMS within 30 days after completion of the audit. If the Single Audit Act does not apply, the State shall conduct an audit of all SCBGP-FB funds no later than 60 days after the end date of the grant agreement. The State shall submit to AMS not later than 30 days after completion of the audit, a copy of the audit results.

Dated: August 28, 2008. 

Lloyd C. Day, 

Administrator,  Agricultural Marketing Service. 

[FR Doc. E8-20486 Filed 9-3-08; 8:45 am] 

BILLING CODE 3410-02-P