Special Evaluation Assistance for Rural Communities and Households Program, 35962-35966 [2010-15265]

Download as PDF 35962 Federal Register / Vol. 75, No. 121 / Thursday, June 24, 2010 / Rules and Regulations committee’s deliberations. Like all committee meetings, the meeting was a public meeting; and all entities, both large and small, were able to express their views on this issue. Comments on the interim rule were required to be received by May 24, 2010. One comment supporting the rule was received. Therefore, for the reasons given in the interim rule, we are adopting the interim rule as a final rule, without change. To view the interim rule, go to: http://www.regulations.gov/search/ Regs/home.html#documentDetail?R= 0900006480add0ad. This action also affirms information contained in the interim rule concerning Executive Orders 12866 and 12988, the Paperwork Reduction Act (44 U.S.C. Chapter 35), and the E–Gov Act (44 U.S.C. 101). After consideration of all relevant material presented, it is found that finalizing the interim rule without change, as published in the Federal Register (75 FR 20897, April 22, 2010), will tend to effectuate the declared policy of the Act. Farm and Rural Development Act (CONACT) (7 U.S.C. 1926(a)(2)). The amendment added the new SEARCH grant program under which the Secretary is authorized to make predevelopment planning grants for feasibility studies, design assistance, and technical assistance to financially distressed communities in rural areas with populations of 2,500 or fewer inhabitants for water and waste disposal projects. DATES: This rule is effective June 24, 2010. List of Subjects in 7 CFR Part 989 Grapes, Marketing agreements, Raisins, Reporting and recordkeeping requirements. This final rule has been determined to be not significant for purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget (OMB). PART 989—[AMENDED] Executive Order 12988 Accordingly, the interim rule that amended 7 CFR part 989 and that was published at 75 FR 20897 on April 22, 2010, is adopted as a final rule, without change. This final rule has been reviewed in accordance with Executive Order 12988, Civil Justice Reform. RUS has determined that this final rule meets the applicable standards provided in section 3 of the Executive Order. In addition, all State and local laws and regulations that are in conflict with this rule will be pre-empted; no retroactive effect will be given to the rule; and in accordance with sec. 212(e) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. sec. 6912(e)), appeal procedures must be exhausted before an action against the Department or its agencies may be initiated. ■ Dated: June 18, 2010. Robert C. Keeney, Acting Administrator, Agricultural Marketing Service. [FR Doc. 2010–15298 Filed 6–23–10; 8:45 am] BILLING CODE 3410–02–P DEPARTMENT OF AGRICULTURE Rural Utilities Service FOR FURTHER INFORMATION CONTACT: Anita O’Brien, Loan Specialist, Water and Environmental Programs, U.S. Department of Agriculture, Rural Utilities Service, Room 2230 South Building, Stop 1570, 1400 Independence Ave., SW., Washington, DC 20250–1570. Telephone: (202) 690– 3789, FAX: (202) 690–0649, E-mail: anita.obrien@usda.gov. SUPPLEMENTARY INFORMATION: Classification Executive Order 12866 7 CFR Part 1774 Regulatory Flexibility Act Certification RIN 0572–AC14 RUS has determined that this final rule will not have a significant economic impact on a substantial number of small entities, as defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The RUS Water and Environmental Programs provide loans to borrowers at interest rates and terms that are more favorable than those generally available from the private sector. RUS borrowers, as a result of obtaining Federal financing, receive economic benefits that exceed any cprice-sewell on DSK8KYBLC1PROD with RULES Special Evaluation Assistance for Rural Communities and Households Program ACTION: Final rule. SUMMARY: The Rural Utilities Service (RUS) is issuing a regulation to establish the Special Evaluation Assistance for Rural Communities and Households (SEARCH) Program as authorized by Section 306(a)(2) of the Consolidated VerDate Mar<15>2010 12:53 Jun 23, 2010 Jkt 220001 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 direct economic costs associated with complying with RUS regulations and requirements. Information Collection and Recordkeeping Requirements The information collection and recordkeeping requirements contained in this final rule are pending approval by OMB pursuant to the Paperwork Reduction Act 1995 (44 U.S.C. Chapter 35) under control number 0572—New. The paperwork contained in this rule will not be effective until approved by OMB. E-Government Act Compliance The Rural Utilities Service is committed to the E-Government Act, which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. National Environmental Policy Act Certification The Administrator of RUS has determined that this final rule will not significantly affect the quality of the human environment as defined by the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). Therefore, this action does not require an environmental impact statement or assessment. Catalog of Federal Domestic Assistance The program described by this final rule is listed in the Catalog of Federal Domestic Assistance Programs under number 10.759—Special Evaluation Assistance for Rural Communities and Households Program (SEARCH). This catalog is available on a subscription basis from the Superintendent of Documents, the United States Government Printing Office, Washington, DC, 20402–9325, telephone number (202) 512–1800 and at https:// www.cfda.gov. Executive Order 12372 This program is not subject to the requirements of Executive Order 12372, ‘‘Intergovernmental Review of Federal Programs,’’ as implemented under USDA’s regulations at 7 CFR part 3015. Unfunded Mandates This final rule contains no Federal mandates (under the regulatory provision of title II of the Unfunded Mandates Reform Act of 1995) for State, local, and Tribal governments or the private sector. Therefore, this final rule is not subject to the requirements of section 202 and 205 of the Unfunded Mandates Reform Act. E:\FR\FM\24JNR1.SGM 24JNR1 Federal Register / Vol. 75, No. 121 / Thursday, June 24, 2010 / Rules and Regulations Executive Order 13132, Federalism The policies contained in this final rule do not have any substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Nor does this final rule impose substantial direct compliance costs on State and local governments. Therefore, consultation with States is not required. Executive Order 13175, Consultation and Coordination With Indian Tribal Governments USDA will undertake, within 6 months after this rule becomes effective, a series of regulation Tribal consultation sessions to gain input by Tribal officials concerning the impact of this rule on Tribal governments, communities, and individuals. These sessions will establish a baseline of consultation for future actions, should any become necessary, regarding this rule. Reports from these sessions for consultation will be made part of the USDA annual reporting on Tribal Consultation and Collaboration. USDA will respond in a timely and meaningful manner to all Tribal government requests for consultation concerning this rule and will provide additional venues, such as webinars and teleconferences, to periodically host collaborative conversations with Tribal leaders and their representatives concerning ways to improve this rule in Indian country. cprice-sewell on DSK8KYBLC1PROD with RULES Background On January 22, 2010, RUS published a proposed rule in the Federal Register (75 FR 3642) to establish the Special Evaluation Assistance for Rural Communities and Households (SEARCH) Program as authorized by Section 306(a)(2) of the Consolidated Farm and Rural Development Act (CONACT) (7 U.S.C. 1926(a)(2)). The amendment added a grant program to make Special Evaluation Assistance for Rural Communities and Households (SEARCH) Program grants. SEARCH grants are intended to assist financially distressed, eligible communities to pay for feasibility studies, design assistance and technical assistance associated with water and waste disposal infrastructure needs. Under the SEARCH program, the Secretary may make predevelopment and planning grants to public or quasipublic agencies, organizations operated on a not-for-profit basis or Indian Tribes on Federal and State reservations and other Federally recognized Indian Tribes. Up to 100 percent of the eligible VerDate Mar<15>2010 12:53 Jun 23, 2010 Jkt 220001 cost of the grant may be funded and may not exceed $30,000. The grant recipients shall use the grant funds for feasibility studies, design assistance, and development of an application for financial assistance to financially distressed communities in rural areas with populations of 2,500 or fewer inhabitants for water and waste disposal projects as authorized in Sections 306(a)(1), 306(a)(2) and 306(a)(24) of the Consolidated Farm and Rural Development Act (CONACT) (7 U.S.C. 1926(a)(1), (a)(2) and (a)(24). Eligible entities for the SEARCH grants will be the same entities eligible to obtain a loan, grant, or loan guarantee from the Rural Utilities Service Water and Waste Disposal and Wastewater loan and grant programs. However, as applied to the SEARCH program, rural area is specified as one with a population of 2,500 or less. The Agency will define financially distressed areas as those where the median household income of the areas to be served is either below the poverty line or below 80 percent of the statewide nonmetropolitan median household income. The Secretary may use not more than four percent of the total amount of funds made available for a fiscal year for water and waste disposal to carry out the SEARCH program. The Administrator of the RUS is required to prescribe regulations to implement the provisions of the SEARCH grant program and does so through this final rule. In developing the SEARCH program regulation, the Agency relied heavily on existing Rural Development regulations relative to water and waste disposal loans and grants. Comments RUS published a proposed rulemaking in the Federal Register on January 22, 2010 at 75 FR 3642. No comments were received from outside Federal agencies, however, one public submission was received with regard to the information collection and recordkeeping requirements contained in the rule. The commentor’s responses are summarized below with the Agency’s response as follows: Issue 1: Commentor agreed that the collection is necessary for performance and practical utility. Response: Agency concurs. Issue 2: Commentor agreed that the burden estimate is accurate. Response: Agency concurs. Issue 3: Commentor suggested that the information quality, utility and clarity could be enhanced by allowing extra application credit for professional PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 35963 services; reporting the status of applicable Federal property management specifications on the RUS Web site; adding available water management references to the RUS Web site as a component of the design and technical assistance object; and expounding upon the definition of rural. Response: The Agency will take under advisement the suggestion to provide additional information on RUS Web site. For the purpose of water and waste disposal grants and direct and guaranteed loans, the terms ‘‘rural’’ and ‘‘rural area’’ mean a city, town, or unicorporated area that has a population of no more than 10,000 inhabitants (7 U.S.C. 1991(a)(13). The SEARCH grant amendment (7 U.S.C. (a)(2)(c)) restricts eligibility, for the purposes of SEARCH, to communities of 2,500 or less within such rural areas. Issue 4: Commentor suggested the collection burden can be minimized by adding two rural support offices directly to the Web pages. Response: The Agency believes that there is minimal burden with the current Web site in obtaining States’ local office information. List of Subjects Community development, Grant programs, Reporting and recordkeeping requirements, Rural areas, Waste treatment and disposal, Water supply. ■ Therefore for the reasons discussed in the preamble, RUS amends chapter XVII of title 7 of the Code of Federal Regulations by adding a new part 1774 to read as follows: PART 1774—SPECIAL EVALUATION ASSISTANCE FOR RURAL COMMUNITIES AND HOUSEHOLDS PROGRAM (SEARCH) Subpart A—General Provisions 1774.1 General. 1774.2 Definitions. 1774.3 Availability of forms and regulations. 1774.4 Allocation of funds. 1774.5–1774.6 [Reserved] 1774.6 Equal opportunity requirements. 1774.7 Environmental requirements. 1774.8 Other Federal Statutes. 1774.9 [Reserved] Subpart B—Grant Application Processing 1774.10 Applications. 1774.11 [Reserved] 1774.12 Eligibility. 1774.13 Limitations. 1774.14 Eligible grant purposes. 1774.15 Selection criteria. 1774.16 Grant application processing and approval. 1774.17 Grant closing and disbursement. 1774.18 Reporting requirements, accounting methods and audits. E:\FR\FM\24JNR1.SGM 24JNR1 35964 Federal Register / Vol. 75, No. 121 / Thursday, June 24, 2010 / Rules and Regulations 1774.19 Applications determined ineligible. 1774.20 Conflict of Interest. 1774.21–1774.23 [Reserved] 1774.24 Exception Authority. 1774.25–1774.99 [Reserved] 1774.100 OMB Control Number. Authority: 7 U.S.C. 1926(a)(2)(C). Subpart A—General Provisions § 1774.1 General. The purpose of the Special Evaluation Assistance for Rural Communities and Household (SEARCH) Grant program is to provide financial assistance to the neediest, eligible communities, who lack financial resources to pay for feasibility studies, design assistance and technical assistance. This subpart sets forth the general policies and procedures for making and processing predevelopment planning SEARCH grants for water and waste projects. cprice-sewell on DSK8KYBLC1PROD with RULES § 1774.2 Definitions. The following definitions apply to subparts A and B of this part. Agency. The Rural Utilities Service of the United States Department of Agriculture (USDA) within the Rural Development mission area of the Under Secretary for Rural Development. The Processing Official will administer this water and waste program on behalf of the Rural Utilities Service. Approval official. The Agency official at the State level who has been delegated the authority to approve grants. ConAct. Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)(2)). Design assistance. Preliminary design and engineering analysis necessary for an application for funding. Design assistance does not include financial assistance for development of plans, specifications, or bidding documents. DUNS Number. Data Universal Numbering System number obtained from Dun and Bradstreet and used when applying for Federal grants or cooperative agreements. A DUNS number may be obtained at no cost, by calling 1–866–705–5711. Eligible entity. Entity that meets eligibility requirements to obtain a loan, loan guarantee or grant under Paragraphs 1, 2 or 24 of Section 306(a) of the ConAct (codified at 7 U.S.C. Section 1926(a)(1)(2) and (24)). Feasibility study. Documentation associated with an objective analysis of project-related technical engineering or environmental impact analyses required to support applications for funding water or waste disposal projects through USDA, Rural Utilities Service or other agencies. Financially distressed area. An area is considered financially distressed if the VerDate Mar<15>2010 12:53 Jun 23, 2010 Jkt 220001 median household income of the area to be served is either below the poverty line or below 80 percent of the statewide non-metropolitan median household income based on available historic statistical information from the latest decennial census. Grantee. The applicant receiving financial assistance directly from the RUS to carry out the project or program under this program. Poverty line. The level of income for a family of four, as defined in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)). Processing Official. The Agency official designated by the approval official as having the authority to accept and process applications for water and waste disposal assistance. Rural area. For the purposes of this SEARCH program, any area not in a city or town with a population of 2,500 or fewer, according to the latest decennial census of the United States. State. Any of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Territory of Guam, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, the Republic of Palau, and the U.S. Virgin Islands. Technical Assistance. Supervision, oversight, or training by an organization for the development of an application for financial assistance. § 1774.3 Availability of forms and regulations. Information about the forms, instructions, regulations, bulletins, OMB Circulars, Treasury Circulars, standards, documents and publications cited in this part is available from any UDSA/Rural Development Office or the United States Department of Agriculture, Washington, DC 20250– 1500 and at http://www.grants.gov. § 1774.4 Allocation of funds. The Secretary may use not more than four percent of the total amount of funds made available for a fiscal year for water and waste disposal activities for SEARCH grants. §§ 1774.5–1774.6 § 1774.7 [Reserved] Environmental requirements. The policies and regulations contained in 7 CFR part 1794 of this title apply to grants made in accordance with this part. § 1774.8 Other Federal Statutes. Other Federal statutes and regulations are applicable to grants awarded under PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 this part. These include but are not limited to: (a) 7 CFR part 1, subpart A—USDA implementation of Freedom of Information Act. (b) 7 CFR part 3—USDA implementation of OMB Circular No. A– 129 regarding debt collection. (c) 7 CFR part 15, subpart A—USDA implementation of Title VI of the Civil Rights Act of 1964, as amended. (d) 7 CFR part 1794, RUS Implementation of the National Environmental Policy Act. (e) 7 CFR part 1901, subpart E—Civil Rights Compliance Requirements. (f) 7 CFR part 3015—Uniform Federal Assistance Regulations. (g) 7 CFR part 3016—USDA Implementation of OMB Circular Nos. A–102 and A–97, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments. (h) 7 CFR part 3018—Restrictions on Lobbying, prohibiting the use of appropriated funds to influence Congress or a Federal agency in connection with the making of any Federal grant and other Federal contracting and financial transactions. (i) 7 CFR part 3019—USDA implementation of OMB Circular A– 110, Uniform Administrative Requirements for Grants and Agreements With Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations. (j) 7 CFR part 3021, as amended— Government-wide Debarment and Suspension (Non-procurement); Government-wide Requirements for Drug-Free Workplace (Grants), implementing Executive Order 12549 on debarment and suspension and the Drug-Free Workplace Act of 1988 (41 U.S.C. 701). (k) 7 CFR part 3052—USDA implementation of OMB Circular No. A– 133 regarding audits of institutions of higher education and other nonprofit institutions. (l) 29 U.S.C. 794, section 504— Rehabilitation Act of 1973, and 7 CFR part 15B (USDA implementation of statute), prohibiting discrimination based upon physical or mental handicap in Federally assisted programs. § 1774.9 [Reserved] Subpart B—Grant Application Processing § 1774.10 Applications. (a) To file an application, an organization must provide their DUNS number. An organization may obtain a DUNS number from Dun and Bradstreet E:\FR\FM\24JNR1.SGM 24JNR1 cprice-sewell on DSK8KYBLC1PROD with RULES Federal Register / Vol. 75, No. 121 / Thursday, June 24, 2010 / Rules and Regulations by calling (1–866–705–5711). To file a complete application, the following information should be submitted: (1) Standard Form 424, ‘‘Application for Federal Assistance (For NonConstruction).’’ (2) Standard Form 424A & B, ‘‘Budget Information—Non-Construction Programs.’’ (3) Supporting documentation necessary to make an eligibility determination such as financial statements, audits, organizational documents, or existing debt instruments. The Processing Official will advise applicants regarding the required documents. Applicants that are indebted to RUS will not need to submit documents already on file with the Processing Official as long as such documents are current and valid. (4) Project narrative detailing the project to be financed with the SEARCH grant funds. The narrative will also provide details on the activities or tasks to be accomplished, objectives, timetables for task completion, and anticipated results. (5) The applicant’s Internal Revenue Service Taxpayer Identification Number (TIN). (6) Other Forms and certifications. Applicants will be required to submit the following items to the Processing Official, upon notification from the Processing Official to proceed with further development of the full application: (i) Form RD 442–7, ‘‘Operating Budget’’; (ii) Form RD 400–1, ‘‘Equal Opportunity Agreement’’; (iii) Form RD 400–4, ‘‘Assurance Agreement’’; (iv) Form AD–1047, ‘‘Certification Regarding Debarment, Suspension and other Responsibility Matters’’; (v) Form AD–1049, Certification regarding Drug-Free Workplace Requirements (Grants) Alternative I For Grantees Other Than Individuals; (vi) Certifications for Contracts, Grants, and Loans (Regarding Lobbying); and (vii) Certification regarding prohibited tying arrangements. Applicants that provide electric service must provide the Agency a certification that they will not require users of a water or waste facility financed under this part to accept electric service as a condition of receiving assistance. (b) Applicants are encouraged to contact the State Office or the Processing Official to find out how to file electronically. The application and supporting documentation must be sent or delivered to the Processing Official, unless it is filed electronically. VerDate Mar<15>2010 12:53 Jun 23, 2010 Jkt 220001 § 1774.11 [Reserved] § 1774.12 Eligibility. The following eligibility requirements must be met: (a) The applicant must be: (1) A public body, such as a municipality, county, district, authority, or other political subdivision or a State, territory or commonwealth, or (2) An organization operated on a notfor-profit basis, such as an association, cooperative, or private corporation. The organization must be an association controlled by a local public body or bodies, or have a broadly based ownership by or membership of people of the local community, or (3) Indian Tribes on Federal and State reservations and other Federally recognized Indian Tribes. (b) The area to be served must be financially distressed and rural as defined in § 1774.2 of this part. § 1774.13 Limitations. Grant funds may not be used to: (a) Fund political or lobbying activities. (b) Pay for work already completed. (c) Purchase real estate or vehicles, improve or renovate office space, or repair and maintain privately owned property. (d) Construct or furnish a building. (e) Intervene in the Federal regulatory or adjudicatory proceedings. (f) Sue the Federal Government or any other government entities. (g) Pay for any other costs that are not allowable under OMB Circular A–87, OMB Circular A–110, OMB Circular A– 102 or OMB Circular A–122. (h) Make contributions or donations to others. (i) Fund projects that duplicate technical assistance given to implement action plans under the National ForestDependent Rural Communities Economic Diversification Act of 1990 (7 U.S.C. 6613). Applicants cannot receive both grants made under this part and grants that the Forest Service makes to implement the action plans for five continuous years from the date of grant approval by the Forest Service. (j) To pay an outstanding judgment obtained by the United States in a Federal Court (other than in the United States Tax Court), which has been recorded. An applicant will be ineligible to receive a loan or grant until the judgment is paid in full or otherwise satisfied. § 1774.14 Eligible grant purposes. (a) Eligible predevelopment planning costs are feasibility studies, preliminary design assistance, and technical PO 00000 Frm 00009 Fmt 4700 Sfmt 4700 35965 assistance as each is defined in § 1774.2. The eligible predevelopment activities funded with these grant funds must be agreed to and accepted by the Agency prior to the disbursement of the SEARCH grant. The predevelopment planning costs must be related to a proposed project that meets the following requirements: (1) To construct, enlarge, extend, or otherwise improve rural water, sanitary sewage, solid waste disposal, and storm wastewater disposal facilities. (2) To construct or relocate public buildings, roads, bridges, fences, or utilities, and to make other public improvements necessary for the successful operation or protection of facilities authorized in paragraph (a)(1) of this section. (3) To relocate private buildings, roads, bridges, fences, or utilities, and other private improvements necessary for the successful operation or protection of facilities authorized in paragraph (a)(1) of this section. (b) The Secretary, subject to the limitation in § 1774.4 of this part, may fund up to 100 percent of the eligible grant costs, not to exceed $30,000. § 1774.15 Selection Criteria. Projects will be selected based primarily on the funding priorities in 7 CFR 1780.17. The Program Official discretionary points stated in 7 CFR1780.17 (e) can also include consideration of the following criteria: (a) Systems with limited resources. (b) Smallest systems with lowest incomes. (c) Funds availability. § 1774.16 Grant application processing and approval. (a) Before starting to assemble the full application, the applicant should arrange through the Processing Official an application conference to provide a basis for orderly application assembly. The processing office will explain program requirements, public information requirements and provide guidance on preparation of items necessary for final determination. (b) The Processing Official will determine if the application is properly assembled. If not, the applicant will be notified within fifteen Federal working days as to what additional submittal items are needed. (c) The Processing Official and Approval Official will coordinate their reviews to ensure that the applicant is advised about eligibility and anticipated fund availability within 45 days of the receipt of a completed application. (d) The Processing Official will submit the following to the Approval Official: E:\FR\FM\24JNR1.SGM 24JNR1 35966 Federal Register / Vol. 75, No. 121 / Thursday, June 24, 2010 / Rules and Regulations § 1774.19 Applications determined ineligible. FARM CREDIT ADMINISTRATION If at any time an application is determined ineligible, the processing office will notify the applicant in writing of the reasons. The notification to the applicant will state that an appeal of this decision may be made by the applicant under 7 CFR part 11. 12 CFR Parts 604, 607, 612, 614, 615, 618, and 627 § 1774.17 cprice-sewell on DSK8KYBLC1PROD with RULES (1) ‘‘Water and Waste Project Information Summary’’; (2) Form RD 442–3, ‘‘Balance Sheet’’ or a financial statement or audit that includes a balance sheet; (3) Letter of Conditions; (4) Form RD 1942–46, ‘‘Letter of Intent to Meet Conditions’’; (5) Form RD 1940–1, ‘‘Request for Obligation of Funds’’; Any processing or servicing activity conducted pursuant to this part involving authorized assistance to Rural Development employees with Water and Environmental Programs responsibility, members of their families, known close relatives, or business or close personal associates, is subject to the provisions of subpart D of part 1900 of this title. Applicants of this assistance are required to identify any known relationship or association with an RUS employee. Grant closing and disbursement. (a) Grant closing. RUS Bulletin 1780– 12 ‘‘Water or Waste System Grant Agreement’’ will be completed and executed in accordance with the requirements of grant approval. The grant will be considered closed when RUS Bulletin 1780–12 has been properly executed. Processing officials or Approval officials are authorized to sign the grant agreement on behalf of RUS. (b) Grant disbursements. Agency policy is not to disburse grant funds from the Treasury until they are actually needed by the applicant. If an approved grant includes applicant or other contributions, then these funds will be disbursed before the disbursal of any Agency grant funds. (c) Payment for project costs. Project costs will be monitored by the RUS processing office. Invoices will be approved by the borrower and submitted to the Processing Official for concurrence. The review and acceptance of project costs by the Agency does not attest to the correctness of the amounts, the quantities shown or that the work has been performed under the terms of the agreements or contracts. (d) Use of remaining funds. Funds remaining after all costs incident to the basic project have been paid or provided for will not include applicant contributions if SEARCH grants funds are financing less than 100 percent of the project. Funds remaining may be considered in direct proportion to the amounts obtained from each source. Remaining funds will be handled as follows: (1) Remaining funds may be used for eligible grant purposes as described in 1774.14 of this subpart, or (2) Grant funds not expended will be canceled. Prior to the actual cancellation, the borrower, its attorney and its engineer will be notified of RUS’ intent to cancel the remaining funds. § 1774.20 Conflict of Interest. §§ 1774.21–1774.23 § 1774.24 [Reserved] Exception authority. The Administrator may, in individual cases, make an exception to any requirement or provision of this part which is not inconsistent with the authorizing statute or other applicable law and is determined to be in the Government’s interest. Requests for exceptions must be made in writing by the State Director and supported with documentation to explain the adverse effect on the Government’s interest, propose alternative course(s) of action, and show how the adverse affect will be eliminated or minimized if the exception is granted. The exception decision will be documented in writing, signed by the Administrator, and retained in the files. § 1774.25–1774.99 § 1774.100 [Reserved] OMB Control Number. The information collection requirements in this part will not be effective until approved by the Office of Management and Budget (OMB), subject to the submission of a paperwork package to OMB and assigned an OMB Control Number. Dated: May 10, 2010. Jonathan Adelstein, Administrator, Rural Utilities Service. [FR Doc. 2010–15265 Filed 6–23–10; 8:45 am] § 1774.18 Reporting requirements, accounting methods and audits. BILLING CODE 3410–15–P All Agency grantees will follow the reporting requirements as outlined in 7 CFR 1780.47. VerDate Mar<15>2010 12:53 Jun 23, 2010 Jkt 220001 PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 RIN 3052–AC63 Farm Credit Administration Board Meetings; Assessment and Apportionment of Administrative Expenses; Standards of Conduct and Referral of Known or Suspected Criminal Violations; Loan Policies and Operations; Funding and Fiscal Affairs, Loan Policies and Operations, and Funding Operations; General Provisions; and Title IV Conservators, Receivers, and Voluntary Liquidations; Technical Changes Farm Credit Administration. ACTION: Direct final rule. AGENCY: SUMMARY: The Farm Credit Administration (FCA or Agency) amends the current regulations in parts 604, 607, 612, 614, 615, 618, and 627 to eliminate unnecessary, redundant or outdated regulations, to correct crossreference errors, and to clarify the intent of a regulatory provision. This direct final rule covers issues that are technical in nature. DATES: If no significant adverse comment is received on or before July 26, 2010, these regulations shall be effective upon the expiration of 30 days after publication in the Federal Register during which either or both Houses of Congress are in session. We will publish notice of the effective date in the Federal Register. If we receive significant adverse comment on an amendment, paragraph, or section of this rule, and that provision may be addressed separately from the remainder of the rule, we will withdraw that amendment, paragraph, or section and adopt as final those provisions of the rule that are not the subject of a significant comment. In such a case, we would then inform you of how we expect to continue further rulemaking on the provisions that were the subject of significant adverse comment. FOR FURTHER INFORMATION CONTACT: Jacqueline R. Melvin, Policy Analyst, Office of Regulatory Policy, Farm Credit Administration, McLean, VA 22102–5090, (703) 883–4498, TTY (703) 883–4434, or Mary Alice Donner, Senior Attorney, Office of General Counsel, Farm Credit Administration, McLean, VA 22102–5090, (703) 883–4020, TTY (703) 883–4020. SUPPLEMENTARY INFORMATION: E:\FR\FM\24JNR1.SGM 24JNR1

Agencies

[Federal Register Volume 75, Number 121 (Thursday, June 24, 2010)]
[Rules and Regulations]
[Pages 35962-35966]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-15265]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1774

RIN 0572-AC14


Special Evaluation Assistance for Rural Communities and 
Households Program

ACTION: Final rule.

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SUMMARY: The Rural Utilities Service (RUS) is issuing a regulation to 
establish the Special Evaluation Assistance for Rural Communities and 
Households (SEARCH) Program as authorized by Section 306(a)(2) of the 
Consolidated Farm and Rural Development Act (CONACT) (7 U.S.C. 
1926(a)(2)). The amendment added the new SEARCH grant program under 
which the Secretary is authorized to make predevelopment planning 
grants for feasibility studies, design assistance, and technical 
assistance to financially distressed communities in rural areas with 
populations of 2,500 or fewer inhabitants for water and waste disposal 
projects.

DATES: This rule is effective June 24, 2010.

FOR FURTHER INFORMATION CONTACT: Anita O'Brien, Loan Specialist, Water 
and Environmental Programs, U.S. Department of Agriculture, Rural 
Utilities Service, Room 2230 South Building, Stop 1570, 1400 
Independence Ave., SW., Washington, DC 20250-1570. Telephone: (202) 
690-3789, FAX: (202) 690-0649, E-mail: anita.obrien@usda.gov.

SUPPLEMENTARY INFORMATION: 

Classification

Executive Order 12866

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

Executive Order 12988

    This final rule has been reviewed in accordance with Executive 
Order 12988, Civil Justice Reform. RUS has determined that this final 
rule meets the applicable standards provided in section 3 of the 
Executive Order. In addition, all State and local laws and regulations 
that are in conflict with this rule will be pre-empted; no retroactive 
effect will be given to the rule; and in accordance with sec. 212(e) of 
the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. sec. 
6912(e)), appeal procedures must be exhausted before an action against 
the Department or its agencies may be initiated.

Regulatory Flexibility Act Certification

    RUS has determined that this final rule will not have a significant 
economic impact on a substantial number of small entities, as defined 
in the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The RUS Water 
and Environmental Programs provide loans to borrowers at interest rates 
and terms that are more favorable than those generally available from 
the private sector. RUS borrowers, as a result of obtaining Federal 
financing, receive economic benefits that exceed any direct economic 
costs associated with complying with RUS regulations and requirements.

Information Collection and Recordkeeping Requirements

    The information collection and recordkeeping requirements contained 
in this final rule are pending approval by OMB pursuant to the 
Paperwork Reduction Act 1995 (44 U.S.C. Chapter 35) under control 
number 0572--New. The paperwork contained in this rule will not be 
effective until approved by OMB.

E-Government Act Compliance

    The Rural Utilities Service is committed to the E-Government Act, 
which requires Government agencies in general to provide the public the 
option of submitting information or transacting business electronically 
to the maximum extent possible.

National Environmental Policy Act Certification

    The Administrator of RUS has determined that this final rule will 
not significantly affect the quality of the human environment as 
defined by the National Environmental Policy Act of 1969 (42 U.S.C. 
4321 et seq.). Therefore, this action does not require an environmental 
impact statement or assessment.

Catalog of Federal Domestic Assistance

    The program described by this final rule is listed in the Catalog 
of Federal Domestic Assistance Programs under number 10.759--Special 
Evaluation Assistance for Rural Communities and Households Program 
(SEARCH). This catalog is available on a subscription basis from the 
Superintendent of Documents, the United States Government Printing 
Office, Washington, DC, 20402-9325, telephone number (202) 512-1800 and 
at https://www.cfda.gov.

Executive Order 12372

    This program is not subject to the requirements of Executive Order 
12372, ``Intergovernmental Review of Federal Programs,'' as implemented 
under USDA's regulations at 7 CFR part 3015.

Unfunded Mandates

    This final rule contains no Federal mandates (under the regulatory 
provision of title II of the Unfunded Mandates Reform Act of 1995) for 
State, local, and Tribal governments or the private sector. Therefore, 
this final rule is not subject to the requirements of section 202 and 
205 of the Unfunded Mandates Reform Act.

[[Page 35963]]

Executive Order 13132, Federalism

    The policies contained in this final rule do not have any 
substantial direct effect on States, on the relationship between the 
national government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Nor does this 
final rule impose substantial direct compliance costs on State and 
local governments. Therefore, consultation with States is not required.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    USDA will undertake, within 6 months after this rule becomes 
effective, a series of regulation Tribal consultation sessions to gain 
input by Tribal officials concerning the impact of this rule on Tribal 
governments, communities, and individuals. These sessions will 
establish a baseline of consultation for future actions, should any 
become necessary, regarding this rule. Reports from these sessions for 
consultation will be made part of the USDA annual reporting on Tribal 
Consultation and Collaboration. USDA will respond in a timely and 
meaningful manner to all Tribal government requests for consultation 
concerning this rule and will provide additional venues, such as 
webinars and teleconferences, to periodically host collaborative 
conversations with Tribal leaders and their representatives concerning 
ways to improve this rule in Indian country.

Background

    On January 22, 2010, RUS published a proposed rule in the Federal 
Register (75 FR 3642) to establish the Special Evaluation Assistance 
for Rural Communities and Households (SEARCH) Program as authorized by 
Section 306(a)(2) of the Consolidated Farm and Rural Development Act 
(CONACT) (7 U.S.C. 1926(a)(2)). The amendment added a grant program to 
make Special Evaluation Assistance for Rural Communities and Households 
(SEARCH) Program grants. SEARCH grants are intended to assist 
financially distressed, eligible communities to pay for feasibility 
studies, design assistance and technical assistance associated with 
water and waste disposal infrastructure needs.
    Under the SEARCH program, the Secretary may make predevelopment and 
planning grants to public or quasi-public agencies, organizations 
operated on a not-for-profit basis or Indian Tribes on Federal and 
State reservations and other Federally recognized Indian Tribes. Up to 
100 percent of the eligible cost of the grant may be funded and may not 
exceed $30,000. The grant recipients shall use the grant funds for 
feasibility studies, design assistance, and development of an 
application for financial assistance to financially distressed 
communities in rural areas with populations of 2,500 or fewer 
inhabitants for water and waste disposal projects as authorized in 
Sections 306(a)(1), 306(a)(2) and 306(a)(24) of the Consolidated Farm 
and Rural Development Act (CONACT) (7 U.S.C. 1926(a)(1), (a)(2) and 
(a)(24).
    Eligible entities for the SEARCH grants will be the same entities 
eligible to obtain a loan, grant, or loan guarantee from the Rural 
Utilities Service Water and Waste Disposal and Wastewater loan and 
grant programs. However, as applied to the SEARCH program, rural area 
is specified as one with a population of 2,500 or less. The Agency will 
define financially distressed areas as those where the median household 
income of the areas to be served is either below the poverty line or 
below 80 percent of the statewide non-metropolitan median household 
income.
    The Secretary may use not more than four percent of the total 
amount of funds made available for a fiscal year for water and waste 
disposal to carry out the SEARCH program.
    The Administrator of the RUS is required to prescribe regulations 
to implement the provisions of the SEARCH grant program and does so 
through this final rule. In developing the SEARCH program regulation, 
the Agency relied heavily on existing Rural Development regulations 
relative to water and waste disposal loans and grants.

Comments

    RUS published a proposed rulemaking in the Federal Register on 
January 22, 2010 at 75 FR 3642. No comments were received from outside 
Federal agencies, however, one public submission was received with 
regard to the information collection and recordkeeping requirements 
contained in the rule. The commentor's responses are summarized below 
with the Agency's response as follows:
    Issue 1: Commentor agreed that the collection is necessary for 
performance and practical utility.
    Response: Agency concurs.
    Issue 2: Commentor agreed that the burden estimate is accurate.
    Response: Agency concurs.
    Issue 3: Commentor suggested that the information quality, utility 
and clarity could be enhanced by allowing extra application credit for 
professional services; reporting the status of applicable Federal 
property management specifications on the RUS Web site; adding 
available water management references to the RUS Web site as a 
component of the design and technical assistance object; and expounding 
upon the definition of rural.
    Response: The Agency will take under advisement the suggestion to 
provide additional information on RUS Web site. For the purpose of 
water and waste disposal grants and direct and guaranteed loans, the 
terms ``rural'' and ``rural area'' mean a city, town, or unicorporated 
area that has a population of no more than 10,000 inhabitants (7 U.S.C. 
1991(a)(13). The SEARCH grant amendment (7 U.S.C. (a)(2)(c)) restricts 
eligibility, for the purposes of SEARCH, to communities of 2,500 or 
less within such rural areas.
    Issue 4: Commentor suggested the collection burden can be minimized 
by adding two rural support offices directly to the Web pages.
    Response: The Agency believes that there is minimal burden with the 
current Web site in obtaining States' local office information.

List of Subjects

    Community development, Grant programs, Reporting and recordkeeping 
requirements, Rural areas, Waste treatment and disposal, Water supply.

0
Therefore for the reasons discussed in the preamble, RUS amends chapter 
XVII of title 7 of the Code of Federal Regulations by adding a new part 
1774 to read as follows:

PART 1774--SPECIAL EVALUATION ASSISTANCE FOR RURAL COMMUNITIES AND 
HOUSEHOLDS PROGRAM (SEARCH)

Subpart A--General Provisions
1774.1 General.
1774.2 Definitions.
1774.3 Availability of forms and regulations.
1774.4 Allocation of funds.
1774.5-1774.6 [Reserved]
1774.6 Equal opportunity requirements.
1774.7 Environmental requirements.
1774.8 Other Federal Statutes.
1774.9 [Reserved]
Subpart B--Grant Application Processing
1774.10 Applications.
1774.11 [Reserved]
1774.12 Eligibility.
1774.13 Limitations.
1774.14 Eligible grant purposes.
1774.15 Selection criteria.
1774.16 Grant application processing and approval.
1774.17 Grant closing and disbursement.
1774.18 Reporting requirements, accounting methods and audits.

[[Page 35964]]

1774.19 Applications determined ineligible.
1774.20 Conflict of Interest.
1774.21-1774.23 [Reserved]
1774.24 Exception Authority.
1774.25-1774.99 [Reserved]
1774.100 OMB Control Number.

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

Subpart A--General Provisions


Sec.  1774.1  General.

    The purpose of the Special Evaluation Assistance for Rural 
Communities and Household (SEARCH) Grant program is to provide 
financial assistance to the neediest, eligible communities, who lack 
financial resources to pay for feasibility studies, design assistance 
and technical assistance. This subpart sets forth the general policies 
and procedures for making and processing predevelopment planning SEARCH 
grants for water and waste projects.


Sec.  1774.2  Definitions.

    The following definitions apply to subparts A and B of this part.
    Agency. The Rural Utilities Service of the United States Department 
of Agriculture (USDA) within the Rural Development mission area of the 
Under Secretary for Rural Development. The Processing Official will 
administer this water and waste program on behalf of the Rural 
Utilities Service.
    Approval official. The Agency official at the State level who has 
been delegated the authority to approve grants.
    ConAct. Consolidated Farm and Rural Development Act (7 U.S.C. 
1926(a)(2)).
    Design assistance. Preliminary design and engineering analysis 
necessary for an application for funding. Design assistance does not 
include financial assistance for development of plans, specifications, 
or bidding documents.
    DUNS Number. Data Universal Numbering System number obtained from 
Dun and Bradstreet and used when applying for Federal grants or 
cooperative agreements. A DUNS number may be obtained at no cost, by 
calling 1-866-705-5711.
    Eligible entity. Entity that meets eligibility requirements to 
obtain a loan, loan guarantee or grant under Paragraphs 1, 2 or 24 of 
Section 306(a) of the ConAct (codified at 7 U.S.C. Section 
1926(a)(1)(2) and (24)).
    Feasibility study. Documentation associated with an objective 
analysis of project-related technical engineering or environmental 
impact analyses required to support applications for funding water or 
waste disposal projects through USDA, Rural Utilities Service or other 
agencies.
    Financially distressed area. An area is considered financially 
distressed if the median household income of the area to be served is 
either below the poverty line or below 80 percent of the statewide non-
metropolitan median household income based on available historic 
statistical information from the latest decennial census.
    Grantee. The applicant receiving financial assistance directly from 
the RUS to carry out the project or program under this program.
    Poverty line. The level of income for a family of four, as defined 
in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 
9902(2)).
    Processing Official. The Agency official designated by the approval 
official as having the authority to accept and process applications for 
water and waste disposal assistance.
    Rural area. For the purposes of this SEARCH program, any area not 
in a city or town with a population of 2,500 or fewer, according to the 
latest decennial census of the United States.
    State. Any of the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Territory of Guam, the Commonwealth of 
the Northern Mariana Islands, the Republic of the Marshall Islands, the 
Federated States of Micronesia, the Republic of Palau, and the U.S. 
Virgin Islands.
    Technical Assistance. Supervision, oversight, or training by an 
organization for the development of an application for financial 
assistance.


Sec.  1774.3  Availability of forms and regulations.

    Information about the forms, instructions, regulations, bulletins, 
OMB Circulars, Treasury Circulars, standards, documents and 
publications cited in this part is available from any UDSA/Rural 
Development Office or the United States Department of Agriculture, 
Washington, DC 20250-1500 and at http://www.grants.gov.


Sec.  1774.4  Allocation of funds.

    The Secretary may use not more than four percent of the total 
amount of funds made available for a fiscal year for water and waste 
disposal activities for SEARCH grants.


Sec. Sec.  1774.5-1774.6  [Reserved]


Sec.  1774.7  Environmental requirements.

    The policies and regulations contained in 7 CFR part 1794 of this 
title apply to grants made in accordance with this part.


Sec.  1774.8  Other Federal Statutes.

    Other Federal statutes and regulations are applicable to grants 
awarded under this part. These include but are not limited to:
    (a) 7 CFR part 1, subpart A--USDA implementation of Freedom of 
Information Act.
    (b) 7 CFR part 3--USDA implementation of OMB Circular No. A-129 
regarding debt collection.
    (c) 7 CFR part 15, subpart A--USDA implementation of Title VI of 
the Civil Rights Act of 1964, as amended.
    (d) 7 CFR part 1794, RUS Implementation of the National 
Environmental Policy Act.
    (e) 7 CFR part 1901, subpart E--Civil Rights Compliance 
Requirements.
    (f) 7 CFR part 3015--Uniform Federal Assistance Regulations.
    (g) 7 CFR part 3016--USDA Implementation of OMB Circular Nos. A-102 
and A-97, Uniform Administrative Requirements for Grants and 
Cooperative Agreements to State and Local Governments.
    (h) 7 CFR part 3018--Restrictions on Lobbying, prohibiting the use 
of appropriated funds to influence Congress or a Federal agency in 
connection with the making of any Federal grant and other Federal 
contracting and financial transactions.
    (i) 7 CFR part 3019--USDA implementation of OMB Circular A-110, 
Uniform Administrative Requirements for Grants and Agreements With 
Institutions of Higher Education, Hospitals, and Other Nonprofit 
Organizations.
    (j) 7 CFR part 3021, as amended--Government-wide Debarment and 
Suspension (Non-procurement); Government-wide Requirements for Drug-
Free Workplace (Grants), implementing Executive Order 12549 on 
debarment and suspension and the Drug-Free Workplace Act of 1988 (41 
U.S.C. 701).
    (k) 7 CFR part 3052--USDA implementation of OMB Circular No. A-133 
regarding audits of institutions of higher education and other 
nonprofit institutions.
    (l) 29 U.S.C. 794, section 504--Rehabilitation Act of 1973, and 7 
CFR part 15B (USDA implementation of statute), prohibiting 
discrimination based upon physical or mental handicap in Federally 
assisted programs.


Sec.  1774.9  [Reserved]

Subpart B--Grant Application Processing


Sec.  1774.10  Applications.

    (a) To file an application, an organization must provide their DUNS 
number. An organization may obtain a DUNS number from Dun and 
Bradstreet

[[Page 35965]]

by calling (1-866-705-5711). To file a complete application, the 
following information should be submitted:
    (1) Standard Form 424, ``Application for Federal Assistance (For 
Non-Construction).''
    (2) Standard Form 424A & B, ``Budget Information--Non-Construction 
Programs.''
    (3) Supporting documentation necessary to make an eligibility 
determination such as financial statements, audits, organizational 
documents, or existing debt instruments. The Processing Official will 
advise applicants regarding the required documents. Applicants that are 
indebted to RUS will not need to submit documents already on file with 
the Processing Official as long as such documents are current and 
valid.
    (4) Project narrative detailing the project to be financed with the 
SEARCH grant funds. The narrative will also provide details on the 
activities or tasks to be accomplished, objectives, timetables for task 
completion, and anticipated results.
    (5) The applicant's Internal Revenue Service Taxpayer 
Identification Number (TIN).
    (6) Other Forms and certifications. Applicants will be required to 
submit the following items to the Processing Official, upon 
notification from the Processing Official to proceed with further 
development of the full application:
    (i) Form RD 442-7, ``Operating Budget'';
    (ii) Form RD 400-1, ``Equal Opportunity Agreement'';
    (iii) Form RD 400-4, ``Assurance Agreement'';
    (iv) Form AD-1047, ``Certification Regarding Debarment, Suspension 
and other Responsibility Matters'';
    (v) Form AD-1049, Certification regarding Drug-Free Workplace 
Requirements (Grants) Alternative I For Grantees Other Than 
Individuals;
    (vi) Certifications for Contracts, Grants, and Loans (Regarding 
Lobbying); and
    (vii) Certification regarding prohibited tying arrangements. 
Applicants that provide electric service must provide the Agency a 
certification that they will not require users of a water or waste 
facility financed under this part to accept electric service as a 
condition of receiving assistance.
    (b) Applicants are encouraged to contact the State Office or the 
Processing Official to find out how to file electronically. The 
application and supporting documentation must be sent or delivered to 
the Processing Official, unless it is filed electronically.


Sec.  1774.11  [Reserved]


Sec.  1774.12  Eligibility.

    The following eligibility requirements must be met:
    (a) The applicant must be:
    (1) A public body, such as a municipality, county, district, 
authority, or other political subdivision or a State, territory or 
commonwealth, or
    (2) An organization operated on a not-for-profit basis, such as an 
association, cooperative, or private corporation. The organization must 
be an association controlled by a local public body or bodies, or have 
a broadly based ownership by or membership of people of the local 
community, or
    (3) Indian Tribes on Federal and State reservations and other 
Federally recognized Indian Tribes.
    (b) The area to be served must be financially distressed and rural 
as defined in Sec.  1774.2 of this part.


Sec.  1774.13  Limitations.

    Grant funds may not be used to:
    (a) Fund political or lobbying activities.
    (b) Pay for work already completed.
    (c) Purchase real estate or vehicles, improve or renovate office 
space, or repair and maintain privately owned property.
    (d) Construct or furnish a building.
    (e) Intervene in the Federal regulatory or adjudicatory 
proceedings.
    (f) Sue the Federal Government or any other government entities.
    (g) Pay for any other costs that are not allowable under OMB 
Circular A-87, OMB Circular A-110, OMB Circular A-102 or OMB Circular 
A-122.
    (h) Make contributions or donations to others.
    (i) Fund projects that duplicate technical assistance given to 
implement action plans under the National Forest-Dependent Rural 
Communities Economic Diversification Act of 1990 (7 U.S.C. 6613). 
Applicants cannot receive both grants made under this part and grants 
that the Forest Service makes to implement the action plans for five 
continuous years from the date of grant approval by the Forest Service.
    (j) To pay an outstanding judgment obtained by the United States in 
a Federal Court (other than in the United States Tax Court), which has 
been recorded. An applicant will be ineligible to receive a loan or 
grant until the judgment is paid in full or otherwise satisfied.


Sec.  1774.14  Eligible grant purposes.

    (a) Eligible predevelopment planning costs are feasibility studies, 
preliminary design assistance, and technical assistance as each is 
defined in Sec.  1774.2. The eligible predevelopment activities funded 
with these grant funds must be agreed to and accepted by the Agency 
prior to the disbursement of the SEARCH grant. The predevelopment 
planning costs must be related to a proposed project that meets the 
following requirements:
    (1) To construct, enlarge, extend, or otherwise improve rural 
water, sanitary sewage, solid waste disposal, and storm wastewater 
disposal facilities.
    (2) To construct or relocate public buildings, roads, bridges, 
fences, or utilities, and to make other public improvements necessary 
for the successful operation or protection of facilities authorized in 
paragraph (a)(1) of this section.
    (3) To relocate private buildings, roads, bridges, fences, or 
utilities, and other private improvements necessary for the successful 
operation or protection of facilities authorized in paragraph (a)(1) of 
this section.
    (b) The Secretary, subject to the limitation in Sec.  1774.4 of 
this part, may fund up to 100 percent of the eligible grant costs, not 
to exceed $30,000.


Sec.  1774.15  Selection Criteria.

    Projects will be selected based primarily on the funding priorities 
in 7 CFR 1780.17. The Program Official discretionary points stated in 7 
CFR1780.17 (e) can also include consideration of the following 
criteria:
    (a) Systems with limited resources.
    (b) Smallest systems with lowest incomes.
    (c) Funds availability.


Sec.  1774.16  Grant application processing and approval.

    (a) Before starting to assemble the full application, the applicant 
should arrange through the Processing Official an application 
conference to provide a basis for orderly application assembly. The 
processing office will explain program requirements, public information 
requirements and provide guidance on preparation of items necessary for 
final determination.
    (b) The Processing Official will determine if the application is 
properly assembled. If not, the applicant will be notified within 
fifteen Federal working days as to what additional submittal items are 
needed.
    (c) The Processing Official and Approval Official will coordinate 
their reviews to ensure that the applicant is advised about eligibility 
and anticipated fund availability within 45 days of the receipt of a 
completed application.
    (d) The Processing Official will submit the following to the 
Approval Official:

[[Page 35966]]

    (1) ``Water and Waste Project Information Summary'';
    (2) Form RD 442-3, ``Balance Sheet'' or a financial statement or 
audit that includes a balance sheet;
    (3) Letter of Conditions;
    (4) Form RD 1942-46, ``Letter of Intent to Meet Conditions'';
    (5) Form RD 1940-1, ``Request for Obligation of Funds'';


Sec.  1774.17   Grant closing and disbursement.

    (a) Grant closing. RUS Bulletin 1780-12 ``Water or Waste System 
Grant Agreement'' will be completed and executed in accordance with the 
requirements of grant approval. The grant will be considered closed 
when RUS Bulletin 1780-12 has been properly executed. Processing 
officials or Approval officials are authorized to sign the grant 
agreement on behalf of RUS.
    (b) Grant disbursements. Agency policy is not to disburse grant 
funds from the Treasury until they are actually needed by the 
applicant. If an approved grant includes applicant or other 
contributions, then these funds will be disbursed before the disbursal 
of any Agency grant funds.
    (c) Payment for project costs. Project costs will be monitored by 
the RUS processing office. Invoices will be approved by the borrower 
and submitted to the Processing Official for concurrence. The review 
and acceptance of project costs by the Agency does not attest to the 
correctness of the amounts, the quantities shown or that the work has 
been performed under the terms of the agreements or contracts.
    (d) Use of remaining funds. Funds remaining after all costs 
incident to the basic project have been paid or provided for will not 
include applicant contributions if SEARCH grants funds are financing 
less than 100 percent of the project. Funds remaining may be considered 
in direct proportion to the amounts obtained from each source. 
Remaining funds will be handled as follows:
    (1) Remaining funds may be used for eligible grant purposes as 
described in 1774.14 of this subpart, or
    (2) Grant funds not expended will be canceled. Prior to the actual 
cancellation, the borrower, its attorney and its engineer will be 
notified of RUS' intent to cancel the remaining funds.


Sec.  1774.18  Reporting requirements, accounting methods and audits.

    All Agency grantees will follow the reporting requirements as 
outlined in 7 CFR 1780.47.


Sec.  1774.19  Applications determined ineligible.

    If at any time an application is determined ineligible, the 
processing office will notify the applicant in writing of the reasons. 
The notification to the applicant will state that an appeal of this 
decision may be made by the applicant under 7 CFR part 11.


Sec.  1774.20  Conflict of Interest.

    Any processing or servicing activity conducted pursuant to this 
part involving authorized assistance to Rural Development employees 
with Water and Environmental Programs responsibility, members of their 
families, known close relatives, or business or close personal 
associates, is subject to the provisions of subpart D of part 1900 of 
this title. Applicants of this assistance are required to identify any 
known relationship or association with an RUS employee.


Sec. Sec.  1774.21-1774.23   [Reserved]


Sec.  1774.24  Exception authority.

    The Administrator may, in individual cases, make an exception to 
any requirement or provision of this part which is not inconsistent 
with the authorizing statute or other applicable law and is determined 
to be in the Government's interest. Requests for exceptions must be 
made in writing by the State Director and supported with documentation 
to explain the adverse effect on the Government's interest, propose 
alternative course(s) of action, and show how the adverse affect will 
be eliminated or minimized if the exception is granted. The exception 
decision will be documented in writing, signed by the Administrator, 
and retained in the files.


Sec.  1774.25-1774.99   [Reserved]


Sec.  1774.100   OMB Control Number.

    The information collection requirements in this part will not be 
effective until approved by the Office of Management and Budget (OMB), 
subject to the submission of a paperwork package to OMB and assigned an 
OMB Control Number.

    Dated: May 10, 2010.
Jonathan Adelstein,
Administrator, Rural Utilities Service.
[FR Doc. 2010-15265 Filed 6-23-10; 8:45 am]
BILLING CODE 3410-15-P