Revisions to the EDA Regulations, 62858-62871 [E8-25004]

Agencies

• DEPARTMENT OF COMMERCE
• Economic Development Administration

[Federal Register Volume 73, Number 205 (Wednesday, October 22, 2008)]
[Rules and Regulations]
[Pages 62858-62871]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-25004]


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DEPARTMENT OF COMMERCE

Economic Development Administration

13 CFR Parts 300, 301, 302, 303, 305, 307, 308, 310, 314 and 315

[Docket No.: 080213181-8811-01]
RIN 0610-AA64


Revisions to the EDA Regulations

AGENCY: Economic Development Administration, Department of Commerce.

ACTION: Interim final rule.

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SUMMARY: The Economic Development Administration (``EDA'') published 
final regulations in the Federal Register on September 27, 2006. In 
March 2007, the Office of the Inspector General (``OIG'') published a 
report titled Aggressive EDA Leadership and Oversight Needed to Correct 
Persistent Problems in the RLF Program. In the time since the 
publication of this report, EDA has made significant improvements in 
the management and oversight of its revolving loan fund (``RLF'') 
program, including the issuance of written guidance that provides EDA 
staff with reasonable steps to help better ensure grantee compliance 
with RLF requirements. EDA is publishing this interim final rule (this 
``IFR'') to synchronize the RLF regulations with that guidance. 
Additionally, EDA is publishing this IFR to make changes to certain 
definitions in the Trade Adjustment Assistance for Firms Program 
regulations set out in 13 CFR part 315. This IFR also provides notice 
of other substantive and non-substantive revisions made to the EDA 
regulations.

DATES: The effective date of this IFR is October 22, 2008. Comments on 
this IFR must be received by EDA's Office of Chief Counsel no later 
than 5 p.m. E.S.T. on December 22, 2008. Although these regulations are 
effective as of date of publication in the Federal Register, EDA 
solicits and welcomes any comments on the regulations discussed herein.

ADDRESSES: You may submit comments, identified by Docket No. 080213181-
8811-01, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.

[[Page 62859]]

     Agency Web Site: https://www.eda.gov/Home/EDAHomePage.xml. 
Follow the instructions for submitting comments at https://www.eda.gov/
InvestmentsGrants/Lawsreg.xml.
     E-mail: edaregs@eda.doc.gov. Please state ``Comments on 
the IFR'' and include Docket No. 080213181-8811-01 in the subject line 
of the message.
     Fax: (202) 482-5671, Attention: Office of Chief Counsel. 
Please indicate ``Comments on the IFR'' on the cover page.
     Mail: Economic Development Administration, Office of Chief 
Counsel, Room 7005, Department of Commerce, 1401 Constitution Avenue, 
NW., Washington, DC 20230.
     Hand Delivery/Courier: Economic Development 
Administration, Office of Chief Counsel, Room 7005, Department of 
Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230.
    Instructions: All submissions received must include the agency name 
and docket number or Regulatory Information Number (RIN) for this 
rulemaking. All comments received will be posted without change to 
https://www.eda.gov/InvestmentsGrants/Lawsreg.xml, including any 
personal information provided.
    Docket: For access to the docket to read background documents or 
comments received, go to https://www.eda.gov/Home/EDAHomePage.xml.

FOR FURTHER INFORMATION CONTACT: Hina Shaikh, Esq., Deputy Chief 
Counsel, Economic Development Administration, Department of Commerce, 
Room 7005, 1401 Constitution Avenue, NW., Washington, DC 20230; 
telephone: (202) 482-4687.

SUPPLEMENTARY INFORMATION:

Background

    On September 27, 2006, EDA published final regulations in the 
Federal Register (71 FR 56658) to implement amendments made to EDA's 
authorizing statute, the Public Works and Economic Development Act of 
1965 (42 U.S.C. 3121 et seq.) (``PWEDA''), by the Economic Development 
Administration Reauthorization Act of 2004 (Pub. L. 108-373, 118 Stat. 
1756). In addition to tracking the statutory amendments to PWEDA, the 
September 27, 2006 final rule reflected EDA's current practices and 
policies in administering its economic development programs that have 
evolved since the promulgation of EDA's former regulations.
    As set out in detail below, EDA is publishing this IFR to make 
necessary revisions to its RLF regulations in order to ensure that they 
correspond with new policy determinations that EDA has made in response 
to the OIG's audit report titled Aggressive EDA Leadership and 
Oversight Needed to Correct Persistent Problems in the RLF Program 
(March 2007). The OIG found that EDA did not have an adequate tracking 
and oversight system, and was unable to ensure grantees' compliance 
with critical financial reporting requirements. EDA has addressed this 
issue by creating a web-based reporting system that eliminates all 
duplicative and calculable fields. This system is designed to allow 
grantees, if they so choose, to upload data directly from their 
accounting software into the web-based system, thus eliminating time-
consuming data entry. Alternatively, grantees have the option of 
manually entering data into the web-based system. All grantees will be 
required to report on a semi-annual basis.
    EDA also is publishing this IFR to make certain substantive changes 
to its regulations that implement the Trade Adjustment Assistance for 
Firms program (the ``TAA Program''), and to provide notice of necessary 
substantive and non-substantive revisions made to its regulations.
    Capitalized terms used but not otherwise defined in this IFR have 
the meanings ascribed to them in 13 CFR 300.3, 302.20, 303.2, 307.8 and 
314.1, and all section citations used herein refer to sections EDA's 
regulations set out in 13 CFR chapter III.

Discussion of Changes to EDA's Regulations

    Set out below, the revisions to various parts that comprise 13 CFR 
chapter III are explained in sequential order. Where substantive and 
non-substantive changes are made in one part, they are discussed 
together. The non-substantive edits include typos, grammatical errors 
and title changes, and are intended to make the regulations easier to 
understand. Additional non-substantive changes also update the 
regulations in light of developments since their publication on 
September 27, 2006.

Section 300.3--Definitions

    For increased clarity in the definition of ``Eligible Recipient,'' 
this IFR replaces the word ``under'' with the phrase ``pursuant to 
Sec.  306.1(d)(3) of''. This more adequately explains EDA's statutory 
authority to enter into contracts as opposed to grants with private 
individuals, partnerships, businesses, corporations, or appropriate 
institutions under the local and national technical assistance 
programs.
    In the context of restrictions relating to conflicts of interest, 
EDA amends its regulations to recognize a domestic partner or 
significant other as a ``spouse'' in the definition of ``Immediate 
Family,'' to take into account that a couple may consist of persons 
living together who are not married.

Section 301.3--Economic Distress Levels

    In Section 301.3(a)(1)(i), the word ``percent'' is changed to 
``percentage point.'' This revision does not change current practice 
and is made for increased clarity.

Section 301.4--Investment Rates

    Corresponding to the change described above in Section 
301.3(a)(1)(i), Table 1 in Section 301.4(b)(1)(ii) is revised to state 
that a Project located in a Region demonstrating a 24-month 
unemployment rate at least one (1) ``percentage point'' greater than 
the national average is eligible to receive a maximum allowable 
Investment Rate of fifty (50) percent. Accordingly, the ``1%'' in row 
(G) in Table 1 is replaced with the phrase ``1 percentage point.'' This 
change does not substantively alter this regulation and is made for 
clarity only.
    In Section 301.4(b)(2), in the second sentence, ``allowable'' is 
inserted between the words ``maximum'' and ``Investment'' to make clear 
that a Project subject to a Special Need may be eligible for an 
Investment Rate up to the maximum allowable Investment Rate of eighty 
(80) percent, unless the Project is eligible for a higher Investment 
Rate under Section 301.4(b)(5).
    For more precise wording in Section 301.4(b)(4), the first sentence 
is introduced with a lead-in phrase beginning with ``Except as 
otherwise provided in paragraph (b)(5) of this section,'' similar to 
paragraphs (b)(2) and (b)(3) of Section 301.4. The second sentence is 
revised to be more parallel in structure and content as section 207 of 
PWEDA (42 U.S.C. 3147).

Section 301.10--Formal Application Requirements

    To ensure that prospective applicants are aware that PWEDA does not 
require nor does EDA provide an appeals process in the event that an 
application is denied, this IFR inserts the following sentence at the 
end of Section 301.10(a): ``PWEDA does not require nor does EDA provide 
an appeals process for an applicant whose application for Investment 
Assistance is denied.''

[[Page 62860]]

Section 302.14--Records and Audits

    The changes made to Section 302.14 are non-substantive. To better 
identify the subject matter of this section, the heading is changed 
from ``Records and audits'' to ``Records.'' In addition, subparagraphs 
(a)(1)-(4) are rearranged and reworded as follows:
    ``(1) The total cost of the Project;
    (2) The amount and disposition by the Recipient of the Investment 
Assistance;
    (3) The amount and nature of the portion of Project costs provided 
by other sources; and
    (4) Such other information as EDA determines will facilitate an 
effective audit.''

To track section 608(b) of PWEDA (42 U.S.C. 3218) and for increased 
clarity, the heading of Section 302.14(b) is changed from ``Audits'' to 
``Access to records.'' Additionally, ``and/or'' is changed to ``or'' 
for clarity.

Section 302.16--Reports by Recipients

    In the third sentence in Section 302.16(b), ``this data and 
report'' is changed to ``the data and reports'' to ensure clarity. In 
Section 302.16(c), ``Projects'' is replaced with ``a Project,'' 
``provide'' is changed to ``provides,'' and ``that Recipients'' is 
changed to ``the Recipient to.''

Section 302.17--Conflicts of Interest

    In the first sentence of Section 302.17(b)(1), the extraneous comma 
after the word ``indirect'' is removed.

Section 303.4--Award Requirements

    In Section 303.4(c), for consistency with Department of Commerce 
guidance, the word ``award'' is replaced with ``project.''

Section 305.6--Allowable Methods of Procurement for Construction 
Services

    In the second sentence of Section 305.6(a), the phrase ``design/
bid/build'' is changed to ``design/build'' so that the sentence makes 
sense in relation to the first sentence of the provision. This was an 
inadvertent mistake overlooked in publishing the September 27, 2006 
final rule. ``Design/bid/build'' and ``design/build'' are two distinct 
construction delivery methods.

Part 307--Economic Adjustment Assistance Investments

    As the agency responsible for administering the RLF program under 
PWEDA, EDA must provide adequate oversight and demand accountability 
from its staff and RLF Recipients to help protect these program dollars 
from waste, fraud and abuse. EDA makes most of the changes discussed 
below to help better ensure that all RLF Recipients involved in the RLF 
program adhere to EDA's statutory and regulatory requirements.

Section 307.8--Definitions

    First, in the definition of ``Closed Loan,'' the comma after the 
word ``been'' is removed.
    Second, as of the effective date of this IFR, EDA will not allow 
RLF Recipients to use RLF Capital to guarantee loans. While this 
authority has been used extremely infrequently throughout the four-
decade history of the RLF program, EDA has determined that loan 
guaranties are too risky and of limited utility, since, unlike federal 
guaranties that are backed by the full faith and credit of the United 
States, RLF loan guaranties are backed only by the assets in the RLF. 
Therefore, the definition of ``Guaranteed Loan'' in Section 307.8 is 
removed in its entirety.
    Last, to ensure understanding of the two reporting periods relevant 
to the new semi-annual report that will be required of all current and 
prospective RLF Recipients, as discussed under Section 307.14 below, 
this IFR includes in this section a definition of ``Reporting Period,'' 
which means the period from April 1st to September 30th and the period 
from October 1st to March 31st. These are the reporting periods for 
completing the new semi-annual report (Form ED-209 or any successor 
form) and the current RLF Income and Expense Statement (Form ED-209I or 
any successor form), if applicable.

Section 307.9--Revolving Loan Fund Plan

    Consistent with requiring all RLF Recipients to submit semi-annual 
reports to EDA in electronic format, as more fully described below 
under Section 307.14, this IFR also revises Section 307.9 to require 
Recipients to submit RLF Plans electronically to EDA for approval. 
Accordingly, the second sentence in Section 307.9 beginning with ``The 
Plan shall * * *.'' is replaced with the following sentence: ``The Plan 
shall be submitted in electronic format to EDA for approval, unless EDA 
approves a paper submission.''
    In the course of discussions with RLF program staff, EDA has 
learned that many RLF Recipients are operating with outdated Plans. 
Some of the Plans were written and submitted to EDA before the Region 
had a Comprehensive Economic Development Strategy (CEDS), and a few 
Regions in fact do not have a CEDS, as that term is described in 
Section 303.7. In order to ensure that Section 307.9 reflects this 
reality, the word ``CEDS'' in paragraph (a)(1) is replaced with the 
phrase ``Region's CEDS or EDA-approved economic development plan, if 
applicable,'' and the word ``strategy'' in paragraph (b)(1) is replaced 
with ``economic development plan, if applicable,''.
    Additionally, in order to give EDA discretion to require new and 
updated Plans that properly analyze the current local capital market in 
various Regions, this IFR revises paragraph (c) to require the RLF 
Recipient to update its Plan as necessary in accordance with changing 
economic conditions in the Region; however, at a minimum, the RLF 
Recipient must submit an updated Plan to EDA every five (5) years. 
Additionally, EDA changes its regulations to require notification of 
any change(s) to the RLF Recipient's Plan. Any material modification, 
such as a merger or change in the EDA-approved lending area under 
Section 307.18, a change in critical management staff, or a change to 
the strategic purpose of the RLF, must be submitted to EDA for approval 
prior to any revision of the Plan.

Section 307.12--Revolving Loan Fund Income

    To be consistent with the new Form ED-209 that will be required of 
all RLF Recipients on a semi-annual basis (discussed in Section 
307.14), the references in paragraphs (a)(1) and (2) to ``twelve-
month'' reporting periods are changed to ``six-month''. The words 
``reporting period'' in paragraphs (a)(1), (2) and (3) are initially 
capitalized per the introduction of ``Reporting Period'' as a defined 
term in Section 307.8.
    In 2005, the Office of Management and Budget (``OMB'') made Title 2 
in the Code of Federal Regulations a single location where the public 
can find both OMB guidance for grants and cooperative agreements 
(Subtitle A) and the associated Federal Agency's regulations 
implementing this OMB guidance (Subtitle B), thereby codifying three 
(3) OMB Circulars on federal cost principles. For consistency and 
accuracy, Section 307.12(b)(1) is rewritten to include applicable 
references to title 2 of the Code of Federal Regulations for the 
following circulars: OMB Circular A-87 for State, local, and Indian 
tribal governments (2 CFR part 225); OMB Circular A-122 for non-profit 
organizations other than institutions of higher education, hospitals or 
organizations named in OMB Circular A-122 as not subject to such 
Circular (2 CFR part 230); and OMB Circular A-21 for educational 
institutions (2 CFR part 220).
    Additionally, the heading of Section 307.12(b) is changed from 
``Compliance

[[Page 62861]]

guidelines'' to ``Compliance guidance,'' to indicate that OMB issues 
guidance to Federal Agencies on government-wide policies and procedures 
for the award and administration of grants and cooperative agreements. 
In the first sentence, ``OMB'' is replaced with ``federal'' for 
consistency with the rest of the regulations and ``guidelines'' is 
replaced with ``requirements'' to make clear that OMB Circular A-133 
sets out single audit or program-specific audit requirements, as 
appropriate, which RLF Recipients must satisfy. Additionally, ``RLF'' 
immediately in front of the word ``audit'' is deleted, as OMB Circular 
A-133 sets out single and program-specific audit requirements--not RLF 
audit requirements--for a variety of entities receiving federal 
financial assistance: States, local governments, and colleges, 
universities, hospitals and other non-profit organizations.

Section 307.13--Records and Retention

    In its audit report titled Aggressive EDA Leadership and Oversight 
Needed to Correct Persistent Problems in the RLF Program, the OIG 
recommended that EDA ``[d]evelop a strategy and plan of action that 
addresses the RLF program's problems and challenges, and identifies 
opportunities for improvement.'' EDA adopted this recommendation as 
part of a complete action plan, and committed to reviewing EDA's 
current policy of using two separate reporting forms: The semi-annual 
(Form ED-209S) and the annual (Form ED-209A). The agency determined 
that the use of two separate reporting forms had hindered data 
collection efforts, as the data fields on these forms are not always 
equivalent. The current semi-annual reporting form contains more useful 
information than the current annual reporting form (Form ED-209A), but 
EDA determined that the semi-annual form required additional data 
fields to allow EDA to exercise more vigorous oversight of grantee 
operations. Accordingly, in June 2008, the agency finalized a revised 
RLF semi-annual reporting form, Form ED-209, to replace the current 
semi-annual and annual reporting forms (Forms ED-209S and ED-209A), and 
submitted this streamlined, web-based form to OMB for approval under 
the Paperwork Reduction Act. EDA will require all RLF Recipients to 
semi-annually complete and submit the new Form ED-209.
    Although requiring all RLF Recipients to submit the Form ED-209 on 
a semi-annual basis, rather than approving the substitution of an 
annual report for some RLF Recipients, will increase the frequency of 
reporting for some grantees, EDA estimates that the new Form ED-209 
actually will reduce the average paperwork burden per RLF report on the 
RLF Recipient from 12 hours to 2.9 hours. This significant decrease 
results from the elimination of calculated and duplicative fields from 
the grantee's data entry screens and the creation of a web-based 
reporting system. This IFR, therefore, removes the reference to the 
annual report from Section 307.13 and other sections in part 307. In 
paragraph (b)(2), the words ``or annual'' are removed and ``period'' is 
changed to ``Reporting Period''. For clarity, the phrase ``or for five 
(5) years from the date the costs were claimed, whichever is less'' is 
removed and replaced with a clear statement that all records relating 
to the RLF's operations must be retained for three years from the 
submission date of the last semi-annual report (on the new Form ED-209 
or any successor form).

Section 307.14--Revolving Loan Fund Semi-Annual and Annual Reports

    In line with the determination that all RLF recipients will report 
on a semi-annual basis, the heading of Section 307.14 is changed from 
``Revolving Loan Fund semi-annual and annual reports'' to ``Revolving 
Loan Fund semi-annual report and Income and Expense Statement,'' to 
accurately reflect the current Form ED-209I, the RLF Income and Expense 
Statement, discussed in paragraph (c). Section 307.14(a) is rewritten 
in its entirety to incorporate the requirement for all RLF Recipients, 
including those receiving Recapitalization Grants for existing RLFs, to 
submit to EDA a semi-annual report (Form ED-209 or any successor form) 
in electronic format, unless EDA approves a paper submission. In 
paragraph (b), the words ``or annual'' are removed. Paragraph (c)(1) is 
re-designated as paragraph (c). The first sentence of re-designated 
paragraph (c)(1) is rewritten to require the RLF Recipient that uses 
either fifty (50) percent or more (or more than $100,000) of RLF Income 
for administrative costs in a six-month (6) Reporting Period to submit 
to EDA a completed Income and Expense Statement (Form ED-209I or any 
successor form) for that Reporting Period in electronic format, unless 
EDA approves a paper submission. The second sentence is removed in its 
entirety because the agency determined, as part of its action plan to 
respond to OIG's recommendations regarding the RLF program, that the 
revised three-year period in Section 307.13(b) adequately covers the 
necessary retention of records for administrative expenses.
    Paragraph (c)(2) titled ``Performance Measures'' is deleted in its 
entirety because the agency has determined that the ``Core Performance 
Measures'' discussed in paragraph (c)(2) actually refer to performance 
reporting requirements under the Government Performance and Results Act 
of 1993 (``GPRA''), which RLF Recipients report every three years. 
These measures are covered under Section 302.16 of the regulations and, 
therefore, were incorrectly referenced in Section 307.14.

Section 307.15--Prudent Management of Revolving Loan Funds

    EDA has and continues to require the RLF Recipient to submit a 
record of decision for an RLF loan, which generally is the RLF board of 
directors' meeting minutes that state the board's approval of the RLF 
loan. In reviewing this section, EDA discovered that the loan 
documentation listed in paragraph (b)(2) does not include the meeting 
minutes. Therefore, this IFR amends the loan documentation list to 
include submission of the board of directors' meeting minutes approving 
the RLF loan. The list is sequentially renumbered to account for this 
new insertion.
    As stated above under Section 307.8, as of the effective date of 
this IFR, EDA will not allow RLF Recipients to use RLF Capital to 
guarantee loans. Therefore, in Section 307.15, current paragraph 
(b)(2)(vii), which references a guaranty agreement, is replaced with 
the concept set out in paragraph (c) of Section 307.17 (the RLF 
Recipient's obligation to demonstrate that credit is not otherwise 
available). This provision requires the RLF Recipient to submit to EDA 
a signed bank turn-down demonstrating that credit is not otherwise 
available on terms and conditions that permit the completion or 
successful operation of the activity to be financed. This provision 
belongs in the loan documentation listed in Section 307.15(b)(2) rather 
than in Section 307.17 because it is evidence EDA would look for when 
reviewing an RLF Recipient's certification that proper documentation is 
in place for lending.
    In light of current lower borrowing costs to companies and 
households, EDA analyzed the current minimum interest rate which an RLF 
Recipient may charge an eligible borrower with the goal of giving the 
RLF Recipient more flexibility to make loans while still maintaining 
its viability as a lender. To this end, this IFR introduces a dual 
interest rate floor in paragraph (c) of Section 307.15, whereby the 
interest rate an RLF Recipient may charge cannot be less than the lower 
of four (4)

[[Page 62862]]

percent or 75 percent of the prime interest rate listed in the Wall 
Street Journal.
    To make improvements in the administration and oversight of the RLF 
program, EDA may institute a new requirement, whereby all RLF 
Recipients will have to undergo a mandatory certification program to 
enhance their ability to administer RLF Grants in a prudent manner. 
Accordingly, after paragraph (d), this IFR adds another paragraph to 
Section 307.15 to incorporate this requirement into the regulations. If 
so required by EDA, the RLF Recipient must satisfactorily complete the 
certification program, and may consider the cost of attending the 
certification courses as an administrative cost, provided the 
requirements regarding RLF Income set out in Section 307.12 are 
satisfied.

Section 307.16--Effective Utilization of Revolving Loan Funds

    For consistency with other changes made to part 307, the words 
``reporting intervals'' are replaced with ``Reporting Periods'' in the 
first sentence of paragraph (c)(2)(i). The phrase ``separate from the 
EDA funds account'' in that sentence was placed at OIG's specific 
request. During recent training conferences held by EDA in conjunction 
with the OIG, the OIG became aware, through discussions with RLF 
Recipients, of the unnecessarily burdensome red tape involved in 
placing excess funds in an account separate from the EDA funds account, 
and has approved EDA to eliminate this requirement. Accordingly, the 
phrase ``separate from the EDA funds account'' is removed. For 
increased clarity, in the second sentence of paragraph (c)(2)(i), the 
words ``the Federal Share (as defined in Sec.  314.5 of this chapter) 
of'' are placed in front of the words ``the RLF Grant''.
    As part of the agency's action plan to address OIG's 
recommendations regarding the RLF program, EDA has identified the need 
to address and monitor high loan default rates among its RLF 
Recipients. In that regard, this IFR adds a new paragraph after 
paragraph (c) in Section 307.16, to state that EDA will take steps 
necessary to document and assess an RLF Recipient's high loan default 
rate. Pursuant to this new regulation, EDA will monitor the RLF 
Recipient's loan default rate to ensure proper protection of the 
Federal Share of the RLF property, and may request information from the 
RLF Recipient as necessary to determine whether it is collecting loan 
repayments and complying with the financial obligations under the RLF 
Grant. If the RLF Recipient fails to provide the information requested 
and to take steps to protect the Federal Share, the RLF Recipient may 
be subject to enforcement action under Section 307.21 and the terms and 
conditions of the Grant.

Section 307.17--Uses of Capital

    For correct formatting, the semi-colon in paragraph (b)(6)(ii) is 
replaced with a period. Paragraph (c) of this section sets out the RLF 
Recipient's obligation to demonstrate to EDA in the RLF loan 
documentation that credit is not otherwise available. Upon closer 
examination, the agency has determined that current paragraph (c) 
belongs under Section 307.15(b)(2), which lists the required minimum 
standard loan documentation.
    To facilitate better monitoring of RLF Capital and to ensure that 
RLF Capital is used for making RLF loans that are consistent with the 
RLF Plan or such other purposes approved by EDA, this IFR adds a new 
paragraph (c) that requires an independent third party to conduct a 
compliance and loan quality review for the RLF Grant every (3) three 
years. The RLF Recipient may undertake this review as an administrative 
cost associated with the RLF's operations, provided the requirements 
set out in Section 307.12 are satisfied.
    In paragraph (d), the word ``provisions'' is changed to 
``conditions'' for accuracy. In accordance with EDA's determination to 
disallow loan guaranties, paragraph (e) of Section 307.17 is removed in 
its entirety.

Section 307.18--Addition of Lending Areas; Merger of RLFs

    For consistency throughout part 307 with respect to semi-annual 
reporting required uniformly of all RLF Recipients, Section 
307.18(b)(1)(i) is rewritten to expressly incorporate references to the 
semi-annual report. Similarly, paragraph (b)(2)(i) is rewritten to 
reference the requirement that surviving RLF Recipients must be up-to-
date with all semi-annual reports in accordance with Section 307.14.

Section 307.20--Partial Liquidation and Liquidation Upon Termination

    The title to this section is rewritten as ``Partial liquidation; 
liquidation upon termination'' to make clear that that a partial 
liquidation is separate from a liquidation upon EDA approving a 
termination of the RLF Grant. Current paragraph (a) provides that EDA 
may require an RLF Recipient to transfer any RLF loans that are more 
than 120 days delinquent to an RLF Third Party for liquidation. In 
reviewing EDA's current RLF portfolio, the agency examined various 
scenarios in which it has had to take action to partially liquidate or 
``disallow'' a portion of an RLF Grant, and therefore, recover the pro-
rata Federal Share. Additionally, the OIG in its March 2007 audit 
report on the RLF program recommended that EDA develop policies and 
procedures that promote a uniform approach to sequestering excess cash. 
This IFR revises paragraph (a) to extend the ``partial liquidation'' 
action to problematic instances beyond the RLF Recipient having RLF 
loans that are more than one hundred and twenty (120) days delinquent, 
such as making an ineligible loan; failing to disburse the EDA funds in 
accordance with the time schedule prescribed in the RLF Grant; or 
requesting that a portion of the RLF Grant be disallowed, and EDA 
agrees to allow the disallowance.
    To eliminate redundancy, the parenthetical ``(as defined in Sec.  
314.5 of this chapter)'' is deleted from Section 307.20(d)(2), since 
that reference now appears in the revised Section 307.20(a).

Section 307.21--Termination of Revolving Loan Funds

    In an effort to ensure strong recipient compliance with RLF 
reporting, efficient capital utilization, and OMB Circular A-133 single 
audit requirements, this IFR revises Section 307.21(a) to include 
additional grounds for which EDA may suspend or terminate and RLF Grant 
for cause. These additional grounds are failure to: (i) Submit an 
updated Plan to EDA in accordance with Section 307.9(c); (ii) submit 
timely progress, financial and audit reports in the format required; 
(iii) manage the RLF Grant in accordance with Prudent Lending 
Practices, as defined in Section 307.8; (iv) sequester excess funds or 
remit the interest on EDA's portion of the sequestered funds to the 
U.S. Treasury; (v) submit the documentation requested by EDA regarding 
a high loan default rate and collection efforts; (vi) comply with audit 
requirements; and (vii) comply with an EDA-approved corrective action 
plan to remedy RLF-related audit findings. EDA also includes in 
paragraph (a) a provision to ensure that EDA maintains effective 
control over and accountability for all Grant funds and assets when 
effecting a suspension or termination.

Section 308.3--Planning Performance Awards

    EDA discovered that the first paragraph under Section 308.3 does 
not read consistently with the corresponding provision in section 
216(b) (42 U.S.C. 3154b) of PWEDA, which provides that the Assistant

[[Page 62863]]

Secretary may make a planning performance award to an Eligible 
Recipient under section 216(a) (42 U.S.C. 3154b) of PWEDA in connection 
with a Grant for a Project if the Assistant Secretary ``determines 
before closeout of the [P]roject that'' specific accomplishments were 
attained by the Recipient. In contrast, Section 308.3(a) currently 
states that EDA must determine ``no later than three (3) years 
following closeout of the Project that * * *'' the Recipient has 
attained the specific list of accomplishments. To ensure consistency 
between the statute and the regulation, Section 308.3(a) is revised to 
replace the phrase ``no later than three (3) years following'' with the 
word ``before''.

Section 310.1--Special Impact Area

    In Section 310.1(a), a semi-colon is placed immediately after the 
word ``need'' for grammatical consistency.

Part 314--Property

Section 314.5--Federal Share

    The first sentence of Section 314.5 is revised to give the agency a 
more definitive standard by which to calculate the Federal Share. The 
new sentence makes clear that the Federal Share will be the current 
fair market value of the Property after deducting: (i) Reasonable 
repair expenses, if any, incurred to put the Property into marketable 
condition; and (ii) sales, commission and marketing costs. The format 
also is adjusted for greater clarity.

Section 314.6--Encumbrances

    For increased clarity and correct word usage, the phrase 
``collateralized or'' in the first sentence in Section 314.6(a) is 
deleted.
    In paragraph (b)(3)(iv), EDA adds language to clarify the scope of 
EDA's inquiry in determining whether the Recipient is capable of 
carrying out its obligations under the award. EDA will take into 
account whether a Recipient that is a non-profit organization is joined 
in the Project with a co-Recipient that is a public body, whether the 
non-profit organization has demonstrated stability over time, and such 
other factors as EDA deems appropriate.

Section 314.7--Title

    Paragraph (c) of Section 314.7 lists various exceptions to the 
general rule, stated in paragraph (a), that the Recipient must at all 
times hold unencumbered title to the Real Property required for a 
Project. EDA requires the Recipient to maintain some interest in the 
Property for the entire Estimated Useful Life to help ensure that the 
Recipient carries out the Project as contemplated at the date of award. 
This IFR revises the exception to the general rule stated in paragraph 
(c)(2)(ii) to include that EDA must be able to determine that the terms 
and conditions of the lease adequately demonstrate the economic 
development and public benefits of the leasehold transaction. EDA in 
this revision clarifies the scope of its review in determining the 
acceptability of the leasehold transaction as a substitute for title, 
and therefore, makes clear that the agency will evaluate the 
transaction from the standpoint of its impact on the economic 
development potential of the project and its potential public benefit, 
as opposed to ``private benefit.''
    In applying the exception set out in paragraph (c)(4), EDA 
discovered it to be difficult and time consuming to require the State 
or local government to provide the currently stated assurances, given 
that EDA lacks privity with any non-Recipient parties that may be 
involved with or have title to Project-related Property. Absent 
privity, EDA cannot assert a claim against the public highway owner for 
breach of the terms of the Grant or other relief pursuant to the Grant. 
When a Project includes construction on a public highway the owner of 
which is not the Recipient, the Recipient, rather than the State or 
county owner of the highway, should provide the necessary assurances 
and authorizations to EDA. Accordingly, this IFR revises paragraph 
(c)(4) in its entirety to require the Recipient to confirm in writing 
to EDA that it is committed during the Estimated Useful Life of the 
Project to operate, maintain and repair all improvements for the 
Project consistent with the Investment Assistance; and if at any time 
during the Estimated Useful Life of the Project any or all of the 
improvements in the Project within the public highway are relocated for 
any reason pursuant to requirements of the owner of the public highway, 
the Recipient will be responsible for accomplishing such relocation, so 
that the Project continues as authorized by the Investment Assistance. 
The revised paragraph requires the Recipient to obtain all written 
authorizations (i.e., State or county permit(s)) necessary for the 
Project to be constructed within the public highway.

Part 315--Trade Adjustment Assistance for Firms

    EDA administers the TAA Program under the Trade Act of 1974, as 
amended (19 U.S.C. 2341-2391) (the ``Trade Act''). Under the TAA 
Program, EDA funds a national network of eleven (11) non-profit or 
university-affiliated organizations, each known as a Trade Adjustment 
Assistance Center (``TAAC''). Each TAAC is assigned a different 
geographic service region, and provides technical or adjustment 
assistance to firms or industries in that region which have been or are 
adversely affected by increased import competition. Before the TAAC may 
provide assistance, the firm must apply for certification regarding 
eligibility under the TAA Program by completing a petition for 
certification. As explained below, EDA makes substantive changes to TAA 
Program-related definitions in 13 CFR 315.2.

Section 315.2--Definitions

    During the course of evaluating and processing petitions for 
certification, a few petitions have raised eligibility issues and 
questions as to whether two defined terms in Section 315.2, ``Decreased 
Absolutely'' and ``Significant Number or Proportion of Workers,'' may 
be unduly restrictive. In some cases, the requisite five (5) percent 
decline in sales or production and the five (5) percent decline in a 
Firm's workforce may be unduly restrictive for a petition that 
straddles a narrow border between significant and insignificant sales 
or employment loss. For example, a Firm may demonstrate a qualitative 
``significant'' decline in sales because of import competition that has 
affected a major product line. Because of that decline, the employees 
associated with this product line also may suffer a ``significant'' 
employment loss. Nonetheless, under the current quantitative 
definitions, the Firm's employment on a ``firm-wide'' basis may not 
meet the required threshold of employment loss under Section 251(c) of 
the Trade Act (19 U.S.C. 2341) because the regulations impose a 
quantitative limitation on a standard that in statute is qualitative. 
This problem is in part a result of the statutory requirement that EDA 
measure unemployment on a ``firm-wide'' basis (for example, a Firm may 
have increased employment in different divisions or unrelated product 
lines that offsets a downsizing, or loss of employment, in the import-
impacted product line(s)). EDA believes the definitions in the 
regulations should be broad enough to give the agency authority to 
certify petitions in appropriate cases when a Firm may have an absolute 
job loss but less than the five (5) percent currently required. 
Accordingly, EDA revises the definitions of the terms Decreased 
Absolutely and Significant Number or Proportion of Workers to allow EDA 
to certify in instances where EDA determines that the five (5) percent

[[Page 62864]]

threshold would not be consistent with the purposes of the Trade Act.
    EDA believes the definition of Firm may be clarified by including 
language that provides the conditions set out in the definition of the 
term in the Trade Act. Accordingly, the agency clarifies that in 
accordance with section 261 of chapter 3 of title II of the Trade Act 
(19 U.S.C. 2351), a Firm, together with any predecessor or successor 
firm, or any affiliated firm controlled or substantially beneficially 
owned by substantially the same person, may be considered a single Firm 
where necessary to prevent unjustifiable benefits.
    The word ``including'' is replaced with ``includes'' in the first 
sentence of the definition of Firm. In the second sentence, the third 
comma is deleted. The sentence beginning with ``Such other Firms 
include:'' is replaced with ``Accordingly, such other Firms may include 
a(n):''.

Section 315.4--Eligible Petitioners

    For clarity and understanding about the types of organizations that 
may apply for assistance under the TAA Program, as opposed to eligible 
petitioners (Firms) under the TAA Program, which are discussed in 
Section 315.6, the title of Section 315.4 is changed from ``Eligible 
petitioners'' to ``Eligible applicants'' and the introductory text in 
Section 315.4 is deleted. Paragraph (a) is rewritten to make clear the 
entities that may apply to EDA for assistance to operate a TAAC, which 
are universities or affiliated organizations; States or local 
governments; or non-profit organizations.
    Paragraph (b) relating to the eligibility of Firms is misplaced in 
this section, as Firms are program beneficiaries and not applicants for 
grant assistance under the TAA Program. Accordingly, paragraph (b) is 
deleted and paragraph (c) of Section 315.4 is re-designated as 
paragraph (b). EDA includes conditional language in the newly re-
designated paragraph (b) that restricts the regulation for purposes of 
Section 315.17 only, and to the extent funds are appropriated to 
implement section 265 of the Trade Act. EDA has not received 
appropriations for twenty years to carry out section 265 of the Trade 
Act.

Section 315.5--TAAC Scope, Selection, Evaluation and Awards

    For conciseness and clarity, Section 315.5(a)(3) is rewritten as 
follows:
    ``A TAAC generally provides Adjustment Assistance by providing 
assistance to a:
    (i) Firm in preparing its petition for eligibility certification; 
and
    (ii) Certified Firm in diagnosing its strengths and weaknesses, and 
developing and implementing an Adjustment Proposal.''

Additionally, in each of the last sentences in Section 315.5(b)(1) and 
(2), ``assure'' is replaced with ``ensure.''

Section 315.6--Firm Eligibility for Adjustment Assistance

    For increased clarity, the word ``Certified'' is inserted before 
``Firms'' in Section 315.6(c)(1). In Section 315.6(c)(2), ``Matching 
Share requirements are as follows:'' is replaced with ``The matching 
share requirements are as follows:'' to distinguish the matching share 
specification for Adjustment Assistance provided to Firms from the 
Matching Share requisite under PWEDA. In the first sentence of Section 
315.6(c)(2)(i), ``the preparation of'' is replaced with ``preparing'' 
for conciseness. Finally, in each of the three sentences in Section 
315.6(c)(2)(i), the word ``Certified'' is inserted before ``Firm.''

Section 315.8--Processing Petitions for Certification

    In Section 315.8(d), the reference to the ``Federal Register'' is 
italicized to clarify that it is a publication.
    The reference to Section 315.10(d) in the third sentence in Section 
315.8(g)(2) was erroneous in the 2005 interim final rule and was 
inadvertently not corrected in the subsequent September 27, 2006 final 
rule. This sentence is revised to remove the reference to Section 
315.10(d) and is rewritten more clearly as: ``Any written notice to the 
petitioner of a denial of a petition shall specify the reason(s) for 
the denial.'' This change is technical only and does not substantively 
change the regulation.

Section 315.9--Hearings

    In the first sentence in Section 315.9, the reference to ``any 
person, organization, or group'' is replaced with ``or any interested 
Person'' because Section 315.2 contains a definition for ``Person'' 
that includes individuals, organizations and groups. Additionally, the 
comma after ``proceedings'' is removed, ``Notice of Acceptance'' is 
changed to ``notice of acceptance,'' and the reference to ``Federal 
Register'' is italicized. In paragraph (a) of Section 315.9, the phrase 
``and other interested Persons'' is replaced with ``or any interested 
Person(s).'' In Section 315.9(d), the reference to ``Federal Register'' 
is italicized.

Section 315.10--Loss of Certification Benefits

    The first sentence is more accurately re-worded by replacing ``A 
Firm may fail to obtain benefits of certification, regardless of 
whether its certification is terminated,'' with the phrase ``EDA may 
terminate a Firm's certification or refuse to extend Adjustment 
Assistance to a Firm''.

Section 315.11--Appeals, Final Determinations and Termination of 
Certification

    In the first sentence in Section 315.11(c), the reference to 
``Federal Register'' is italicized.

Section 315.12--Recordkeeping

    For consistency throughout 13 CFR part 315, the words ``for Firms'' 
is inserted immediately after ``Assistance'' in Section 315.12.

Classification

    Prior notice and opportunity for public comment are not required 
for rules concerning public property, loans, grants, benefits, and 
contracts (5 U.S.C. 553(a)(2)). Because prior notice and an opportunity 
for public comment are not required pursuant to 5 U.S.C. 553, or any 
other law, the analytical requirements of the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.) are inapplicable. Therefore, a regulatory 
flexibility analysis has not been prepared.

Executive Order No. 12866

    It has been determined that this IFR is significant for purposes of 
Executive Order 12866.

Congressional Review Act

    This IFR is not ``major'' under the Congressional Review Act (5 
U.S.C. 801 et seq.)

Executive Order No. 13132

    Executive Order 13132 requires agencies to develop an accountable 
process to ensure ``meaningful and timely input by State and local 
officials in the development of regulatory policies that have 
federalism implications.'' ``Policies that have federalism 
implications'' is defined in Executive Order 13132 to include 
regulations that have ``substantial direct effects on the 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.'' It has been determined that this IFR does not contain 
policies that have federalism implications.

[[Page 62865]]

Paperwork Reduction Act

    This IFR contains collections-of-information subject to review and 
approval by OMB under the Paperwork Reduction Act (``PRA''). The OMB is 
required to clear all federally-sponsored data collections pursuant to 
the PRA. Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection-of-information subject to the 
requirements of the PRA, unless that collection-of-information displays 
a currently valid OMB control number.
    On or about June 9, 2008, EDA submitted to OMB an application 
(under OMB control number 0610-0095) for PRA clearance of the new Form 
ED-209 (semi-annual report). EDA anticipates receiving OMB's clearance 
for this new form on or about September 9, 2008. The RLF Income and 
Expense Statement (Form ED-209I) also is currently valid under OMB 
control number 0610-0095 (with an expiration date of April 30, 2009). 
The public reporting burden related to the new semi-annual report on 
Form ED-209 (which replaces current Forms ED-209A and ED-209S) and the 
RLF Income and Expense Statement is estimated to average 3.15 hours per 
individual response, or 6.3 hours annually, which includes the time 
necessary for reviewing instructions, searching existing data sources, 
gathering and maintaining the data needed, and completing and reviewing 
the collections-of-information. Please send comments on these or any 
other aspects of the collections-of-information by any means listed 
under ADDRESSES above. Alternatively, you may e-mail comments to 
David_Rostker@omb.eop.gov, or fax comments to (202) 395-7285.

List of Subjects

13 CFR Part 300

    Financial assistance, Distressed region, Headquarters, Regional 
offices.

13 CFR Part 301

    Grant administration, grant programs, eligibility requirements, 
applicant and application requirements, economic distress levels, 
investment rates.

13 CFR Part 302

    Environmental review, federal policy and procedures, inter-
governmental review, fees, pre-approval requirements, project 
administration, reporting and audit requirements, conflicts of 
interest, post-approval requirements, civil rights.

13 CFR Part 303

    Planning, award and application requirements, comprehensive 
economic development strategy, state plans, short-term planning 
investments.

13 CFR Part 305

    Public works, economic development, award and application 
requirements, requirements for approved projects.

13 CFR Part 307

    Economic adjustment assistance, award and application requirements, 
revolving loan fund, pre-loan requirements, merger, income, record and 
reporting requirements, sales and securitizations, liquidation, 
termination.

13 CFR Part 308

    Performance awards, planning performance awards.

13 CFR Part 310

    Special impact area, excessive unemployment, special need.

13 CFR Part 314

    Federal interest, authorized use, property, federal share, title, 
release, property interest.

13 CFR Part 315

    Administrative practice and procedure, trade adjustment assistance, 
eligible petitioner, firm selection, certification requirements, 
recordkeeping and audit requirements, adjustment proposals.

Regulatory Text

0
For reasons stated in the preamble, this IFR amends 13 CFR chapter III 
as follows:

PART 300--GENERAL INFORMATION

0
1. The authority citation for part 300 continues to read as follows:

    Authority: 42 U.S.C. 3121; 42 U.S.C. 3122; 42 U.S.C. 3211; 
Department of Commerce Organization Order 10-4.


0
2. Amend Sec.  300.3 to revise paragraph (7) of the definition of 
Eligible Recipient and the definition of Immediate Family to read as 
follows:


Sec.  300.3  Definitions.

* * * * *

Eligible Recipient * * *

* * * * *
    (7) Private individual or for-profit organization, but only for 
Training, Research and Technical Assistance Investments pursuant to 
Sec.  306.1(d)(3) of part 306 of this chapter.
* * * * *
    Immediate Family means a person's spouse (or domestic partner or 
significant other), parents, grandparents, siblings, children and 
grandchildren, but does not include distant relatives, such as cousins, 
unless the distant relative lives in the same household as the person.
* * * * *

PART 301--ELIGIBILITY, INVESTMENT RATE AND PROPOSAL AND APPLICATION 
REQUIREMENTS

0
1. The authority citation for part 301 continues to read as follows:

    Authority: 42 U.S.C. 3121; 42 U.S.C. 3141-3147; 42 U.S.C. 3149; 
42 U.S.C. 3161; 42 U.S.C. 3175; 42 U.S.C. 3192; 42 U.S.C. 3194; 42 
U.S.C. 3211; 42 U.S.C. 3233; Department of Commerce Delegation Order 
10-4.


0
2. Amend Sec.  301.3 to revise paragraph (a)(1)(i) to read as follows:


Sec.  301.3  Economic distress levels.

* * * * *
    (a) * * *
    (1) * * *
    (i) An unemployment rate that is, for the most recent twenty-four 
(24) month period for which data are available, at least one (1) 
percentage point greater than the national average unemployment rate;
* * * * *


0
3. In Sec.  301.4, revise Table 1 in paragraph (b)(1)(ii), and revise 
paragraphs (b)(2) and (b)(4) to read as follows:


Sec.  301.4  Investment rates.

* * * * *
    (b) * * *
    (1) * * *
    (ii) * * *

[[Page 62866]]



                                 Table 1
------------------------------------------------------------------------
                                                       Maximum allowable
        Projects located in regions in which:          investment rates
                                                         (percentage)
------------------------------------------------------------------------
(A) The twenty-four (24) month unemployment rate is                   80
 at least 225% of the national average; or..........
(B) The per capita income is not more than 50% of                     80
 the national average...............................
(C) The twenty-four (24) month unemployment rate is                   70
 at least 200% of the national average; or..........
(D) The per capita income is not more than 60% of                     70
 the national average...............................
(E) The twenty-four (24) month unemployment rate is                   60
 at least 175% of the national average; or..........
(F) The per capita income is not more than 65% of                     60
 the national average...............................
(G) The twenty-four (24) month unemployment rate is                   50
 at least 1 percentage point greater than the
 national average; or...............................
(H) The per capita income is not more than 80% of                     50
 the national average...............................
------------------------------------------------------------------------

    (2) Projects subject to a Special Need. EDA shall determine the 
maximum allowable Investment Rate for Projects subject to a Special 
Need (as determined by EDA pursuant to Sec.  301.3(a)(1)(iii)) based on 
the actual or threatened overall economic situation of the Region in 
which the Project is located. However, unless the Project is eligible 
for a higher Investment Rate pursuant to paragraph (b)(5) of this 
section, the maximum allowable Investment Rate for any Project subject 
to a Special Need shall be eighty (80) percent.
* * * * *
    (4) Projects under part 306. Except as otherwise provided in 
paragraph (b)(5) of this section, the maximum allowable Investment Rate 
for Projects under part 306 of this chapter shall generally be 
determined based on the relative needs (as determined under paragraph 
(b)(1) of this section) of the Region which the Project will serve. As 
specified in section 207 of PWEDA, the Assistant Secretary has the 
discretion to establish a maximum Investment Rate of up to one hundred 
(100) percent where the Project:
    (i) Merits, and is not otherwise feasible without, an increase to 
the Investment Rate; or
    (ii) Will be of no or only incidental benefit to the Eligible 
Recipient.
* * * * *

0
4. Amend Sec.  301.10(a) to read as follows:


Sec.  301.10  Formal application requirements.

* * * * *
    (a) General. For Projects selected from successful proposals, EDA 
will invite the proponents to submit a formal application for 
Investment Assistance. The appropriate regional office will provide 
application materials and guidance in completing them. The applicant 
will generally have thirty (30) days to submit the completed 
application materials to the applicable regional office. EDA staff will 
work with the applicant to resolve application deficiencies. PWEDA does 
not require nor does EDA provide an appeals process for an applicant 
whose application for Investment Assistance is denied.
* * * * *

PART 302--GENERAL TERMS AND CONDITIONS FOR INVESTMENT ASSISTANCE

0
1. The authority citation for part 302 continues to read as follows:

    Authority: 19 U.S.C. 2341 et seq.; 42 U.S.C. 3150; 42 U.S.C. 
3152; 42 U.S.C. 3153; 42 U.S.C. 3192; 42 U.S.C. 3193; 42 U.S.C. 
3194; 42 U.S.C. 3211; 42 U.S.C. 3212; 42 U.S.C. 3216; 42 U.S.C. 
3218; 42 U.S.C. 3220; 42 U.S.C. 5141; Department of Commerce 
Delegation Order 10-4.


0
2. Revise Sec.  302.14 to read as follows:


Sec.  302.14  Records.

    (a) Records. Recipients of Investment Assistance under PWEDA shall 
keep such records as EDA shall require, including records that fully 
disclose:
    (1) The total cost of the Project;
    (2) The amount and disposition by the Recipient of the Investment 
Assistance;
    (3) The amount and nature of the portion of Project costs provided 
by other sources; and
    (4) Such other information as EDA determines will facilitate an 
effective audit.
    (b) Access to records. The Recipient shall permit the Assistant 
Secretary, the Inspector General of the Department, the Comptroller 
General of the United States or any of their respective agents or 
representatives access to its properties in order to examine all books, 
correspondence, and records, including without limitation computer 
programs and data processing software, to verify the Recipient's 
compliance with Investment Assistance requirements.

0
3. Amend Sec.  302.16 to revise paragraphs (b) and (c) to read as 
follows:


Sec.  302.16  Reports by Recipients.

* * * * *
    (b) Each report must contain a data-specific evaluation of the 
effectiveness of the Investment Assistance provided in fulfilling the 
Project's purpose (including alleviation of economic distress) and in 
meeting the objectives of PWEDA. Data used by a Recipient in preparing 
reports shall be accurate and verifiable as determined by EDA, and from 
independent sources (whenever possible). EDA will use the data and 
reports to fulfill its performance measurement reporting requirements 
under the Government Performance and Results Act of 1993 and to monitor 
internal, Investment and Project performance through an internal 
performance measurement system, such as the EDA Balanced Scorecard or 
other system.
    (c) To enable EDA to determine the economic development effect of a 
Project that provides service benefits, EDA may require the Recipient 
to submit a Project service map and information from which to determine 
whether services are provided to all segments of the Region being 
assisted.
* * * * *

0
4. Amend Sec.  302.17 to revise paragraph (b)(1) to read as follows:


Sec.  302.17  Conflicts of interest.

* * * * *
    (b) * * *
    (1) An Interested Party shall not receive any direct or indirect 
financial or personal benefits in connection with the award of 
Investment Assistance or its use for payment or reimbursement of costs 
by or to the Recipient.
* * * * *

PART 303--PLANNING INVESTMENTS AND COMPREHENSIVE ECONOMIC 
DEVELOPMENT STRATEGIES

0
1. The authority citation for part 303 continues to read as follows:

    Authority: 42 U.S.C. 3143; 42 U.S.C. 3162; 42 U.S.C. 3174; 42 
U.S.C. 3211; Department of Commerce Organization Order 10-4.


0
2. Amend Sec.  303.4 to revise paragraph (c) to read as follows:

[[Page 62867]]

Sec.  303.4  Award requirements.

* * * * *
    (c) EDA will provide a Planning Investment for the period of time 
required to develop, revise or replace, and implement a CEDS, generally 
in thirty-six (36) month renewable Investment project periods.

PART 305--PUBLIC WORKS AND ECONOMIC DEVELOPMENT INVESTMENTS

0
1. The authority citation for part 305 continues to read as follows:

    Authority: 42 U.S.C. 3211; 42 U.S.C. 3141; Department of 
Commerce Organization Order 10-4.

0
2. Amend Sec.  305.6 to revise paragraph (a) to read as follows:


Sec.  305.6  Allowable methods of procurement for construction 
services.

    (a) Recipients may use alternate construction procurement methods 
to the traditional design/bid/build procedures (including lump sum or 
unit price-type construction contracts). These methods include but are 
not limited to design/build, construction management at risk and force 
account. If an alternate method is used, the Recipient shall submit to 
EDA for approval a construction services procurement plan and the 
Recipient must use a design professional to oversee the process. The 
Recipient shall submit the plan to EDA prior to advertisement for bids 
and shall include the following, as applicable:
    (1) Justification for the proposed method for procurement of 
construction services;
    (2) The scope of work with cost estimates and schedules;
    (3) A copy of the proposed construction contract;
    (4) The name and qualifications of the selected design 
professional; and
    (5) Procedures to be used to ensure full and open competition, 
including the selection criteria.
* * * * *

PART 307--ECONOMIC ADJUSTMENT ASSISTANCE INVESTMENTS

0
1. The authority citation for part 307 continues to read as follows:

    Authority: 42 U.S.C. 3211; 42 U.S.C. 3149; 42 U.S.C. 3161; 42 
U.S.C. 3162; 42 U.S.C. 3233; Department of Commerce Organization 
Order 10-4.


0
2. Amend Sec.  307.8 to remove the definition of Guaranteed Loan, 
revise the definition of Closed Loan, and add a definition for 
Reporting Period in alphabetical order, as set out below:
* * * * *


Sec.  307.8  Definitions.

    Closed Loan means any loan for which all required documentation has 
been received, reviewed and executed by an RLF Recipient.
* * * * *
    Reporting Period, for purposes of this subpart B only, means the 
period from April 1st to September 30th or the period from October 1st 
to March 31st.
* * * * *
0
3. Amend the introductory text of Sec.  307.9 and Sec.  307.9(a)(1), 
(b)(1) and (c) to read as follows:
* * * * *


Sec.  307.9  Revolving Loan Fund Plan.

    All RLF Recipients shall manage RLFs in accordance with an RLF plan 
(the ``RLF Plan'' or ``Plan'') as described in this section. The Plan 
shall be submitted in electronic format to EDA for approval, unless EDA 
approves a paper submission.
    (a) Format and content.
    (1) Part I of the Plan titled ``Revolving Loan Fund Strategy'' 
shall summarize the Region's CEDS or EDA-approved economic development 
plan, if applicable, and business development objectives, and shall 
describe the RLF's financing strategy, policy and portfolio standards.
* * * * *
    (b) * * *
    (1) The Plan must be consistent with the CEDS or EDA-approved 
economic development plan, if applicable, for the Region.
* * * * *
    (c) Revision and Modification of RLF Plans.
    (1) An RLF Recipient must update its Plan as necessary in 
accordance with changing economic conditions in the Region; however, at 
a minimum, an RLF Recipient must submit an updated Plan to EDA every 
five (5) years.
    (2) An RLF Recipient must notify EDA of any change(s) to its Plan. 
Any material modification, such as a merger or change in the EDA-
approved lending area under Sec.  307.18, a change in critical 
management staff, or a change to the strategic purpose of the RLF, must 
be submitted to EDA for approval prior to any revision of the Plan. If 
EDA approves the modification, the RLF Recipient must submit an updated 
Plan to EDA in electronic format, unless EDA approves a paper 
submission.

0
4. Revise paragraphs (a)(1), (2) and (3), (b) introductory text, and 
(b)(1) of Sec.  307.12 to read as follows:


Sec.  307.12  Revolving Loan Fund Income.

    (a) * * *
    (1) Such RLF Income and the administrative costs are incurred in 
the same six-month (6) Reporting Period;
    (2) RLF Income that is not used for administrative costs during the 
six-month (6) Reporting Period is made available for lending 
activities;
    (3) RLF Income shall not be withdrawn from the RLF Capital base in 
a subsequent Reporting Period for any purpose other than lending 
without the prior written consent of EDA; and
    (b) Compliance guidance. When charging costs against RLF Income, 
RLF Recipients must comply with applicable federal cost principles and 
audit requirements as found in:
    (1) 2 CFR part 225 (OMB Circular A-87 for State, local, and Indian 
tribal governments), 2 CFR part 230 (OMB Circular A-122 for non-profit 
organizations other than institutions of higher education, hospitals or 
organizations named in OMB Circular A-122 as not subject to such 
Circular), and 2 CFR part 220 (OMB Circular A-21 for educational 
institutions); and
* * * * *

0
5. Amend Sec.  307.13(b)(2) to read as follows:


Sec.  307.13  Records and retention.

* * * * *
    (b) * * *
    (2) Retain records of administrative expenses incurred for 
activities and equipment relating to the operation of the RLF for three 
(3) years from the actual submission date of the last semi-annual 
report that covers the Reporting Period in which such costs were 
claimed.
* * * * *

0
6. Revise Sec.  307.14 to read as follows:


Sec.  307.14  Revolving Loan Fund semi-annual report and Income and 
Expense Statement.

    (a) Frequency of reports. All RLF Recipients, including those 
receiving Recapitalization Grants for existing RLFs, must complete and 
submit a semi-annual report (Form ED-209 or any successor form) in 
electronic format, unless EDA approves a paper submission.
    (b) Report contents. RLF Recipients must certify as part of the 
semi-annual report to EDA that the RLF is operating in accordance with 
the applicable RLF Plan. RLF Recipients also must describe (and propose 
pursuant to Sec.  307.9) any modifications to the RLF Plan to ensure 
effective use of the RLF as a strategic financing tool.
    (c) RLF Income and Expense Statement. An RLF Recipient using either 
fifty (50) percent or more (or more

[[Page 62868]]

than $100,000) of RLF Income for administrative costs in a six-month 
(6) Reporting Period must submit to EDA a completed Income and Expense 
Statement (Form ED-209I or any successor form) for that Reporting 
Period in electronic format, unless EDA approves a paper submissio