Economic Development Administration Regulatory Revision, 76492-76539 [2011-30578]

Agencies

• DEPARTMENT OF COMMERCE
• Economic Development Administration

[Federal Register Volume 76, Number 235 (Wednesday, December 7, 2011)]
[Proposed Rules]
[Pages 76492-76539]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-30578]



[[Page 76491]]

Vol. 76

Wednesday,

No. 235

December 7, 2011

Part II





Department of Commerce





-----------------------------------------------------------------------





Economic Development Administration





-----------------------------------------------------------------------





13 CFR Parts 300, 301, 302, et al.





Economic Development Administration Regulatory Revision; Proposed Rule

Federal Register / Vol. 76 , No. 235 / Wednesday, December 7, 2011 / 
Proposed Rules

[[Page 76492]]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Economic Development Administration

13 CFR Parts 300, 301, 302, 303, 304, 305, 306, 307, 308, 310, 311, 
and 314

[Docket No.: 110726429-1418-01]
RIN 0610-AA66


Economic Development Administration Regulatory Revision

AGENCY: Economic Development Administration, U.S. Department of 
Commerce.

ACTION: Notice of proposed rulemaking; request for public comment.

-----------------------------------------------------------------------

SUMMARY: Through this notice of proposed rulemaking (``NPRM''), the 
Economic Development Administration (``EDA''), U.S. Department of 
Commerce (``DOC''), proposes and requests comments on updates to the 
agency's regulations implementing the Public Works and Economic 
Development Act of 1965, as amended (``PWEDA''). On February 1, 2011, 
EDA published a notice requesting comments on improving the 
regulations. A 70-day public comment period followed from February 1, 
2011 through April 11, 2011, during which EDA received approximately 
170 comments. In addition, EDA conducted an internal review of its 
regulations. This NPRM addresses and incorporates public comments and 
agency staff suggestions to present an updated set of proposed 
regulations that reflects the agency's current practices and policies 
in administering its economic development assistance programs. For 
convenience, the full text of EDA's regulations as amended is available 
on EDA's Web site at https://www.eda.gov/ gov/.

DATES: Written comments on this NPRM must be received by EDA's Office 
of Chief Counsel no later than 5 p.m. Eastern Time on February 6, 2012.

ADDRESSES: Comments on the NPRM may be submitted through any of the 
following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Agency Web Site: https://www.eda.gov/. EDA has created an 
online feature for submitting comments. Follow the instructions at 
https://www.eda.gov/.
     Mail: Economic Development Administration, Office of Chief 
Counsel, Suite D-100, U.S. Department of Commerce, 1401 Constitution 
Avenue NW., Washington, DC 20230. Please indicate ``Comments on EDA's 
regulations'' and Docket No. 110726429-1418-01 on the envelope.

FOR FURTHER INFORMATION CONTACT: Jamie Lipsey, Attorney Advisor, Office 
of Chief Counsel, Economic Development Administration, U.S. Department 
of Commerce, Room D-100, 1401 Constitution Avenue NW., Washingtonm, DC 
20230; telephone: (202) 482-4687.

SUPPLEMENTARY INFORMATION:

Background

    EDA leads the Federal economic development agenda by making 
strategic grants-based investments. EDA's regulations, codified at 13 
CFR chapter III, provide the framework through which the agency 
administers its economic development assistance programs. EDA's 
programs are built on two key pillars: innovation and regional 
collaboration. Innovation--the process by which individuals and 
organizations generate new ideas and put them into practice--is the 
foundation of American economic growth and national competitiveness. 
Innovation is the key element to creating new and better jobs and a 
resilient economy. Regional collaboration also is essential; and 
Regions that work together to leverage resources and build upon their 
unique comparative assets are better poised for economic success. This 
strategic framework builds on EDA's successful history of helping rural 
and urban communities leverage their unique assets by providing 
``bottom up'' investments in infrastructure, planning, and technical 
assistance that promote regional collaboration, innovation, and 
regional innovation clusters. EDA's investments are designed to spur 
innovation and investment at the local level, by providing the tools 
and the flexibility to build the effective public-private partnerships 
required for long-term success.
    EDA currently is updating the agency's regulations to ensure they 
reflect and incentivize innovation and collaboration and is committed 
to ensuring that public feedback helps shape the revised regulations. 
On February 1, 2011, pursuant to Executive Order 13563 ``Improving 
Regulation and Regulatory Review'', EDA published a notice in the 
Federal Register (76 FR 5501) requesting public comments on how the 
agency's regulations can better facilitate more effective economic 
development assistance programs that advance an innovative economy. 
Under the February 1, 2011 notice, comments were due no later than 
March 9, 2011; however, EDA published a second notice (76 FR 12616) on 
March 8, 2011 to extend the comment deadline until April 11, 2011, 
allowing for a total comment period of 70 days. EDA received 
approximately 170 public comments from approximately 71 commenters. In 
addition, EDA conducted an internal review of its regulations and 
received approximately 55 suggestions from agency staff.
    EDA now publishes this NPRM to incorporate and respond to both 
public and agency staff comments and suggestions and to propose a 
revised set of regulations that reflects EDA's current practices and 
policies in administering its economic development assistance programs. 
For the most part, comments received express opinions on 13 CFR parts 
300 through 307 and 314. Capitalized terms used but not otherwise 
defined in this NPRM have the meanings ascribed to them in EDA's 
current regulations (see, e.g., Sec. Sec.  300.3, 303.2, 307.8, 313.2, 
314.1, and 315.2). For convenience, the full text of EDA's regulations 
as amended is available on EDA's Web site at https://www.eda.gov/ gov/.

Overview of Comments Received and Proposed Changes

    EDA's goal is to help communities and Regions transform their 
economies towards economic prosperity through innovation, 
entrepreneurship, and public-private partnerships. Since February 1, 
2011, EDA has taken a critical and comprehensive look-back at its 
regulations to reduce burdens by removing outmoded provisions and 
streamlining and clarifying requirements. EDA requested both public and 
internal comments on the regulations and has received a number of 
helpful suggestions that the agency believes make sense and should be 
put into practice. Therefore, through this NPRM, EDA proposes 
intelligent and intuitive revisions to provide additional flexibilities 
to the agency's stakeholders and support current best practices, while 
protecting taxpayer dollars and the Federal Interest in EDA-assisted 
property. These changes are designed to provide greater flexibility and 
local control to EDA's Recipients and to make the regulations easier to 
navigate and apply.
    As a result of the regulatory revision effort, EDA plans to 
substantially improve its regulations by removing outdated provisions; 
streamlining burdensome or unnecessary requirements; and including 
provisions that increase flexibility, encourage creative collaboration 
and the effective leveraging of resources, and clarify agency 
requirements. Regulatory

[[Page 76493]]

provisions EDA proposes to remove include:
     Outmoded and overly prescriptive membership requirements 
related to Comprehensive Economic Development Strategy (``CEDS'') 
Strategy Committees and District Organization governing bodies to help 
ensure EDA's requirements adapt effectively to the unique qualities of 
all communities and Regions. See proposed revisions to Sec. Sec.  
303.6(b)(1) and 304.2(c)(2).
     The requirement that a disaster-related application must 
be submitted within 18 months of the relevant disaster declaration to 
receive a 100 percent grant rate. Applications still must be submitted 
in an efficient, timely manner, but EDA proposes to remove the 
regulatory deadline to provide additional flexibility in appropriate 
situations. See proposed revisions to Table 2 in Sec.  301.4(b)(5).
     The unnecessary requirement that an RLF Recipient request 
EDA to subordinate its interest when seeking EDA's approval to sell or 
securitize an RLF portfolio. See proposed revisions to Sec.  307.19.
    Ways the regulations have been streamlined include:
     Modernizing the CEDS requirements from a laundry-list of 
items to four essential planning elements. EDA will provide further 
content information to stakeholders through the publication of updated 
CEDS guidelines, which will be grounded in best practices and developed 
in collaboration with our economic development and research partners. 
We expect these changes to enhance local control and allow EDA's 
planning partners to focus on strategies, performance, and outputs. See 
proposed revisions to Sec.  303.7(b).
     Streamlining and clarifying EDA's Property release 
requirements. See proposed revisions to Sec.  314.10.
    Flexibility has been infused throughout the regulations in a number 
of ways, including:
     Providing that EDA may provide a grant rate of up to 80 
percent to incentivize projects that encourage broad, innovative 
Regional planning. See proposed revisions to Table 2 in Sec.  
301.4(b)(5).
     Removing unnecessary restrictions on the RLF program to 
enhance operations in uncertain economic conditions. See proposed 
revisions to Sec. Sec.  307.17(b)(6) and 307.18(a)(1).
     Setting out EDA's flexibilities with respect to 
subordinating the agency's interest in Project Property and updating 
EDA's Property regulations to help Recipients better take advantage of 
financing tools widely available in today's market--including New 
Markets Tax Credit (``NMTC'') arrangements. These provisions provide 
flexibilities while protecting the Federal Interest. See proposed 
revisions to Sec.  314.6.
     Setting out EDA's authority to accept an instrument other 
than a recorded statement to protect the Federal Interest under certain 
circumstances. See proposed revisions to Sec.  314.8.
    We have included and enhanced provisions to facilitate coordination 
and the leveraging of Federal investments through:
     The updated evaluation criteria, which incentivize the 
leveraging of resources and collaboration among all levels of 
government and the public and private sectors. See proposed revisions 
to Sec.  301.8.
     The description of Infrastructure at Sec.  301.11, which 
provides that EDA, through appropriate Federal Funding Opportunity 
(``FFO'') announcements, will advance interagency collaboration by 
funding Projects that demonstrate the leveraging of Federal, State, and 
other resources.
     Providing that EDA may provide a grant rate of up to 80 
percent to incentivize Projects that demonstrate effective leveraging 
of other Federal Agency resources. See proposed revisions to Table 2 in 
Sec.  301.4(b)(5).
     Providing that RLF Recipients may use any Federal loan to 
meet private leveraging requirements. See proposed revisions to Sec.  
307.15(d).
    This NPRM also proposes a number of clarifications, including:
     A definition of Regional Innovation Clusters or RICs to 
define this important economic development strategy. See proposed 
revisions to Sec.  300.3.
     Examples of innovation- and entrepreneurship-related 
infrastructure under the proposed description of ``Infrastructure'' at 
Sec.  301.11.
     A description of EDA's improved grant review and selection 
process. See proposed revisions to Sec.  301.7.
     Updates to the data requirements that Eligible Applicants 
follow to demonstrate economic distress to better reflect the types and 
content of available data sources. See proposed revisions to Sec.  
301.3(a)(4).
     A revised accountability provision, which clarifies EDA's 
performance expectations and reporting requirements. See proposed 
revisions to Sec.  302.16.
     Adding subparts to EDA's regulations at part 303 to 
clarify the distinctions between EDA's Planning investments and 
reorganizing the RLF regulations under part 307 so that all RLF 
requirements are easy to find under ``Subpart B--Revolving Loan Fund 
Program.''
     Clarifying EDA's Property regulations and adding helpful 
headings to help stakeholders navigate them. See proposed revisions to 
Sec. Sec.  314.3, 314.6, and 314.7.
    Although this is not strictly a regulatory issue, EDA currently is 
examining ways to streamline and rationalize its application 
requirements. EDA expects that its new application requirements will 
help applicants focus on the competitiveness of their proposed 
strategies and reduce the cost of applying for EDA assistance, while 
maintaining accountability for taxpayer dollars.
    The following is a thematic summary of most comments received in 
response to the February 1, 2011 request for comments. A more detailed 
analysis is provided below under ``Part-by-Part Analysis of Comments 
Received and Proposed Changes.''

Regional Innovation Clusters and Innovation and Entrepreneurship-
Related Infrastructure

    EDA received five comments suggesting that EDA provide a definition 
for the phrase ``regional innovation cluster,'' which is an economic 
development technique designed to spark job creation and help 
communities and Regions become more competitive in the global economy. 
This NPRM adds a definition of ``Regional Innovation Clusters or RICs'' 
in EDA's set of regulatory definitions at Sec.  300.3. In addition, EDA 
has emphasized the importance of using projects and techniques that 
advance effective innovation ecosystems in Regions throughout the U.S. 
and help communities support promising entrepreneurs and small 
businesses. EDA proposes a new regulation at Sec.  301.11 to provide 
some examples of innovation- and entrepreneurship-related 
infrastructure Projects. Further, this NPRM proposes to specify 
reserved part 311 as a holding place for any regulations that may be 
necessary to implement the America COMPETES Reauthorization Act of 2010 
(Pub. L. 111-358). Please see the sections below titled ``Part 300--
General Information'' and ``Part 301--Eligibility, Investment Rate and 
Application Requirements'' for more detailed information.

EDA's Distress Criteria and Match Requirements

    EDA received several comments suggesting that EDA reform its 
Investment Rate framework. EDA understands that communities and Regions 
face challenging economic

[[Page 76494]]

conditions; however, it is the agency's experience that the current 
Investment Rate determination structure encourages communities to 
collaborate and prioritize their needs and appropriately marshals 
resources to distressed Regions. By ensuring that communities have 
``skin in the game,'' EDA's Investment Rate framework reinforces the 
need for local buy-in and participation, which improves economic 
development outcomes. In addition, the current structure provides EDA 
with needed flexibility to appropriately increase the EDA share based 
on Special Need and distress considerations. Therefore, EDA does not 
propose adjusting its Investment Rate framework through this NPRM. 
However, this NPRM does provide for an Investment Rate of up to 80 
percent to encourage Projects that involve broad Regional planning and 
coordination and for Projects that effectively leverage other Federal 
resources. In addition, this NPRM contains a number of provisions 
designed to smooth connections between EDA and other Federal Agencies 
to ensure that stakeholders can effectively leverage Federal resources; 
including specifying that any Federal loan may meet an RLF's private 
leveraging requirements. Please see the sections below titled ``Part 
301--Eligibility, Investment Rate and Application Requirements'' and 
``Part 307--Economic Adjustment Assistance Investments'' for more 
information.

Comprehensive Economic Development Strategies, Economic Development 
Districts, and EDA's Planning Program

    EDA received a number of comments on the regulations governing its 
Planning program, the requirements of CEDS, and Economic Development 
Districts (``EDDs''). Several comments suggest that EDA provide 
additional flexibilities with respect to the composition of CEDS 
Strategy Committees and District Organizations' governing bodies. EDA 
agrees and proposes revisions to Sec. Sec.  303.6(b)(1) and 304.2(c)(2) 
to shift the focus from membership requirements to performance and 
outcomes, by maintaining the requirement that Strategy Committees and 
District Organization governing bodies represent the main economic 
interests of the Region, but no longer require a majority or membership 
threshold from any type of economic stakeholder. EDA proposes new 
language to clarify that these organizations must demonstrate the 
capacity to effectively undertake planning processes and implement 
strategies, as applicable. EDA expects that these changes will provide 
communities and Regions the flexibility to establish planning 
organizations that reflect and work most effectively for their unique 
make-up and priorities. In accord with best practices, EDA expects that 
the private sector will be strongly represented on both Strategy 
Committees and District Organization governing bodies.
    Several comments suggest that EDA simplify and streamline the 
content requirements of CEDS. EDA agrees with the commenters and 
proposes changes to Sec.  303.7(b) to remove the ``laundry list'' 
elements of CEDS and replace them with four essential planning 
elements. EDA will publish CEDS guidelines that incorporate best 
practice recommendations of EDA's planning and research partners.
    Commenters suggest increased coordination with District 
Organizations in a variety of ways. Some commenters suggest that EDA 
ensure that all implementation projects are tied to the CEDS, while 
others request that EDA require coordination between Eligible 
Applicants and the relevant District Organization. EDA values its 
relationship with its stakeholders, but does not make these changes 
because of the requirements of PWEDA. Under sections 201(b)(3) and 
209(b)(2) of PWEDA (42 U.S.C. 3141 and 3149, respectively), all grants 
awarded under EDA's Public Works and Economic Adjustment Assistance 
programs must be consistent with a relevant CEDS. PWEDA does not impose 
this requirement upon its other programs. EDA strongly encourages 
collaboration and coordination amongst District Organizations and other 
stakeholders, but EDA is not authorized to impose such requirements. 
Please see the sections below titled ``Part 303--Planning Investments 
and Comprehensive Economic Development Strategies'' and ``Part 304--
Economic Development Districts'' for more information.

Revolving Loan Fund Program

    EDA received numerous comments on the agency's revolving loan fund 
(``RLF'') program, several of which recommend that EDA set a time limit 
for releasing the Federal Interest in RLF grants. EDA understands that 
some RLF awards have been operating for a considerable length of time, 
some for as many as three decades, but EDA currently is not authorized 
to release its interest in RLF awards. EDA continues to work to achieve 
the necessary authorities. In addition, commenters opine that the RLF 
program reporting requirements are too burdensome. The semi-annual 
reporting requirement for the RLF program is in place to address an 
audit report by the DOC's Office of Inspector General (``OIG''), which 
recommended that EDA undertake more rigorous oversight of the RLF 
program to ensure the financial integrity and sustainability of the 
program. Because the reporting requirements are designed to address 
past program issues and ensure the viability and transparency of the 
program, EDA declines to make wholesale changes, but intends to 
continue to improve the Recipient reporting system to make it more 
user-friendly. In addition, six comments suggest the establishment of 
an RLF task force to address program issues and improve communications 
between EDA and program stakeholders. EDA currently is in the process 
of establishing an internal RLF task force and expects it to begin 
meeting in the very near future. Please see the section below titled 
``Part 307--Economic Adjustment Assistance Investments'' for more 
information.

Property Management Updates

    EDA received several comments that offered ways to make the 
agency's Property management regulations more flexible and adaptive to 
today's economy. For example, some commenters suggest that EDA should 
subordinate its interest when a Project warrants, require a lien only 
on the value of the Federal Interest, and make necessary changes to 
facilitate the agency's participation in Projects involving NMTC 
arrangements and other types of financing. EDA agrees, and proposes 
clarifying changes to its encumbrances regulation at Sec.  314.6 to set 
out EDA's subordination flexibilities. EDA also amends its recorded 
statement requirement at Sec.  314.8 to allow EDA to accept alternative 
instruments to protect the Federal Interest in certain situations. 
Please see the section below titled ``Part 314--Property'' for more 
information.

Non-Regulatory Comments

    EDA received a number of comments related to agency policy and 
process rather than EDA's regulations. For instance, several comments 
opined on the agency's mission and direction, two of which request that 
EDA continue to fund traditional infrastructure. One commenter 
specifically notes that EDA should fund infrastructure to help smaller 
communities connect more effectively to telecommunications networks and 
electric grids. On the other hand, another comment suggests that EDA 
allocate more funding to ``programs and services that create jobs and 
less on infrastructure.'' Whether the scope of work of an EDA 
Investment

[[Page 76495]]

includes basic infrastructure, such as road upgrades, or business 
incubation technical assistance, EDA's goals remains the same: 
advancing the community's or Region's economic development strategy and 
building the capacity to create and retain jobs. EDA funds a variety of 
Projects to provide a broad portfolio of assistance through which 
Eligible Applicants can strategically meet their needs. Another comment 
encourages EDA to ``consider the funding of operations for business 
incubator projects for the start-up phase.'' EDA generally avoids 
funding operations for Projects that provide business incubation, 
acceleration, and similar services because the agency expects Projects 
to be self-sustaining. To this end, proposed application requirements 
for Projects to construct a business, technology, or other type of 
incubator or accelerator, as set out in Sec.  301.10(d) of this NPRM, 
are designed to help EDA ensure that these Investments will continue 
creating jobs once the Project period expires. However, EDA may 
consider an application that proposes certain eligible business 
incubation activities performed by an Eligible Recipient.
    We received one comment noting a disconnect between EDA's 
encouragement of ``public-private partnerships'' and the agency's 
regulatory framework that ``makes it hard to fund a project where a 
private entity expects to earn a profit.'' EDA acknowledges that 
private sector profit is essential to sustained economic growth and job 
creation; however, profit for a particular entity cannot be an 
objective under the terms of an EDA award. EDA's goal is not to replace 
private sector investment, but to spark economic development Projects 
that would not happen otherwise by leveraging private investment more 
efficiently. EDA believes the public and private sectors must work 
together to achieve vibrant Regional economies and encourages 
appropriate partnerships through its evaluation criteria, which are 
proposed in this NPRM at Sec.  301.8. However, such partnerships must 
meet EDA's conflicts-of-interest requirements as set out at Sec.  
302.17. See the discussion under ``Part 302--General Terms and 
Conditions for Investment Assistance'' for more information.
    EDA also received two comments stating that EDA's ``[f]ield 
representatives in the states are absolutely necessary.'' EDA agrees, 
and the agency's Economic Development Representatives (``EDRs'') serve 
every State.
    EDA received several comments on its award approval process. One 
commenter suggests that the agency ``[s]treamline submittal and 
reporting procedures for smaller grants ($100,000 or less).'' EDA 
understands the commenter's concern; however, EDA is responsible for 
ensuring all requirements are met and for tracking performance on all 
of its awards, and so must require certain submittals and reports to 
ensure Federal funds are used efficiently and effectively. However, as 
noted above, EDA is reviewing its application requirements to reduce 
burdens and ensure efficiency for all Eligible Applicants. Two 
commenters suggest that ``the amount of time it takes to get an EDA 
grant approved'' is excessive. EDA recently undertook a comprehensive 
effort to improve the agency's award selection processes to shorten the 
amount of time between application and final award approval, while 
maintaining EDA's excellent customer service. The new award selection 
process that went into effect on October 14, 2010, greatly enhances 
transparency and competitiveness and significantly reduces the time it 
takes for EDA to evaluate an application. EDA now considers 
applications in quarterly funding cycles. Applications still are 
accepted on an ongoing basis, but instead of funding Projects on a 
piecemeal basis, EDA now competitively evaluates all applications 
received during a particular funding cycle. As a result, Eligible 
Applicants that submit a complete application by a funding cycle 
deadline are notified of EDA's selection decision within 20 business 
days of the deadline. Please see EDA's Web site at https://www.eda.gov/PDF/Process%20Improvement%20Nov%204,%202010%20Webinar.pdf for more 
information on EDA's new award selection process.
    EDA received one comment stating that the new award approval 
process ``worked'' to make EDA's ``programs more user friendly and 
efficient.'' However, EDA received another comment requesting that EDA 
``return to the rolling submission of grant requests.'' The commenter 
suggests that the new process ``fails communities'' that seek to 
attract new businesses and prospects because such prospects are 
``unwilling to wait until the next submittal deadline to decide if a 
community can provide adequate water pressure or sewer capacity.'' 
EDA's new process is designed to speed up the approval process and 
provide Eligible Applicants with feedback earlier. Under the new 
process, EDA still accepts applications on a rolling basis and 
generally provides feedback on an application within 15 business days 
of application receipt. Although EDA makes awards on a quarterly basis, 
those awards are made much more efficiently. EDA believes that the new 
process provides Eligible Applicants and their stakeholders increased 
certainty, but welcomes additional comments.
    The commenter also suggests that the new process ``favors mega-
projects that would succeed without EDA's assistance.'' While the new 
process is designed to be competitive, EDA is committed to helping 
distressed communities flourish, and is not interested in assisting 
Projects that would succeed in any case. In fact, one criterion on 
which EDA evaluates every application is the extent to which it assists 
economically distressed and underserved communities. Two commenters 
state that ``EDA should not depend solely on a strict standard 
application and point grading system.'' While EDA's staff works hard 
with communities as they develop their applications, evaluating 
submitted applications in a standard manner is the only way to achieve 
objective, data-driven results. Two commenters suggest that 
``[r]estricting projects to those that are shovel ready [is] likely to 
eliminate promising projects in need of some extra funding to become a 
reality.'' EDA is committed to providing its limited resources to 
distressed communities so they can spark job creation and positive 
economic change as efficiently as possible. Waiting on projects that 
are not yet ready for implementation would be a disservice to 
communities across the U.S. EDA works closely with communities as they 
develop projects that are ready for consideration.
    EDA received five comments requesting that EDA provide 
``conditional grants of funding using written documentation that lists 
the conditions and timeframe for meeting requirements * * *.'' Through 
the new award selection process, EDA attempts to strike a balance 
between cost efficiency and certainty for Eligible Applicants. Under 
the new process, an Eligible Applicant that submits an application 
sufficiently in advance of a funding cycle deadline receives an initial 
project analysis on the application's fit with EDA's priorities using 
the evaluation criteria set out in the relevant FFO and completeness, 
which lets the Eligible Applicant know what additional materials must 
be submitted before a funding cycle deadline. EDA cannot make a 
conditional award before a complete application is received because it 
is very difficult to competitively evaluate such applications. EDA 
strongly encourages Eligible Applicants to work with EDA

[[Page 76496]]

staff as early as possible to help ensure successful outcomes. In 
addition, as noted above, EDA is reviewing its application requirements 
to streamline them and ensure they are efficient and cost-effective for 
communities.
    EDA received one comment suggesting that the ``very rigid legal 
interpretation of scope of work compliance * * * be relaxed'' as 
``frequently innovation efficiencies emerge after project work has 
begun, but these efficiencies, and the related potential for over 
delivering the project are not allowed because they were not 
specifically identified in the original project scope of work.'' EDA 
understands that new efficiencies and synergies may emerge as a Project 
moves forward, and EDA staff work closely with Recipients to ensure 
that useful changes to a Project's scope of work can be implemented. 
However, EDA must be careful to maintain the competitiveness and 
transparency of its grant process and ensure that any proposed changes 
do not affect the nature and justification of the Project as originally 
proposed.
    EDA received one comment requesting that EDA no longer use 
www.grants.gov for application submissions. Application submission 
through www.grants.gov is a requirement across the Federal government 
and is designed to reduce paperwork, while making the application 
process simpler and more efficient. Numerous improvements have been 
made to www.grants.gov over the past several years, which have greatly 
improved system performance.
    One commenter suggests that ``EDA consider establishing a state-by-
state grant formula.'' EDA is uniquely effective because the agency can 
encourage Regional collaboration across State borders and work directly 
with communities in implementing economic development plans. EDA works 
closely with its State partners, and State coordination is required 
under EDA's ``Inter-governmental review of projects'' regulation (Sec.  
302.9). Therefore, EDA has not revised its regulations based on this 
comment.
    EDA received several comments on post-award issues. One commenter 
suggests that EDA measure jobs created using a count of ``pay checks to 
people * * * instead of the constant debate of what a job is and is 
not.'' EDA will consider the comment in developing performance 
measures; however often EDA is constrained by government-wide guidance 
and requirements with respect to performance measures, including how to 
count jobs. The agency received five comments requesting that it no 
longer collect information for individual background screenings using 
Form CD-346 (Applicant for Funding Assistance). EDA is required to 
perform this due diligence step in accordance with DOC policy, which 
recently was changed to require Form CD-346 from additional types of 
Eligible Applicants. EDA apologizes for any inconvenience, but is not 
authorized to change the requirement.
    We received one comment suggesting that EDA had imposed ``arbitrary 
caps on [facilities and administrative] F&A reimbursement'' creating 
``a[n] unsustainable financial burden for research institutions.'' The 
commenter particularly cites EDA's FY 2010 i6 Challenge competition, 
which resulted in six Economic Adjustment Assistance Investments under 
part 307. EDA is uncertain of the precise circumstances behind the 
comment, but in general, if facilities and administrative costs (also 
referred to as indirect costs) are included in a project budget, EDA 
may accept the Eligible Applicant's approved ``Facilities and 
Administrative Cost Rate Agreement.'' Nonetheless, EDA is responsible 
for taxpayer dollars and ensuring that Projects generate effective 
economic impacts. Every EDA Project represents an important opportunity 
to create jobs and improve the quality of life in Regions across the 
U.S; therefore, EDA looks carefully at Project budgets to maximize the 
use of funds for direct program costs and EDA staff may work with 
Recipients to negotiate effective budgets. Also, note that under the 
University Center program, Sec.  306.6(d) requires that 80 percent of 
EDA funding be allocated to direct costs of Program delivery.
    One commenter suggests that ``it is important [for stakeholders] to 
have more dialogue with senior officials within the EDA so they can 
hear from the field, in addition to the internal management teams.'' 
The commenter goes on to tell of an experience with ``a very well 
structured round table with the Assistant Secretary'' that was 
coordinated by EDA's Philadelphia regional office, and comments that 
``more of these need to occur.'' EDA believes that stakeholder input 
and feedback is invaluable. Forums that facilitate dialogue between 
EDA's senior management and economic development practitioners in the 
field, including face-to-face meetings, teleconferences, and webinars, 
are a high priority and EDA coordinates as many as possible. Over the 
past year, each region held a conference to share innovative ideas and 
best practices. We hope to continue to offer these conferences as a 
venue to bring together practitioners, EDA staff and leadership, and 
experts to continue the important dialogue about how to continue to 
improve our nation's economy. Senior management from both Headquarters 
and the regional offices frequently are out in the field gathering 
information and requesting feedback and ideas. We welcome additional 
suggestions for useful dialogue opportunities.

Part-by-Part Analysis of Comments Received and Proposed Changes

    Specifically, this NPRM proposes the following revisions to EDA's 
regulations:

Part 300--General Information

    Part 300 of the regulations states EDA's mission and highlights the 
policies and practices that EDA employs in order to attract private 
capital investments and new and better jobs to those Regions 
experiencing substantial and persistent economic distress. EDA seeks to 
help Regions become more competitive in an innovative economy. To 
facilitate these goals, this NPRM introduces several new terms and 
revises existing terms to assist readers in better understanding EDA's 
requirements and ensure clarity, consistency, and technical precision.
    EDA proposes revising Sec.  300.1, which introduces EDA and sets 
out the agency's mission, by inserting the term ``new and better jobs'' 
in place of the phrase ``higher-skill, higher-wage jobs.'' The current 
use of the phrase ``higher-skill, higher-wage jobs'' may cause 
confusion and suggest that EDA is only interested in ``high tech'' jobs 
or jobs that require particular skill sets. The phrase ``new and 
better'' is qualitative enough to adapt to all communities. EDA also 
revises Sec.  300.2, which provides information on EDA's Headquarters 
and regional offices, to replace the address ``14th Street and 
Constitution Avenue NW.'' with the more precise address ``1401 
Constitution Avenue NW.'' in Sec.  300.2(a). This NPRM revises the 
first sentence of Sec.  300.2(b) to replace the phrase ``Web site'' 
with the word ``Web site'' for consistency with EDA's current 
convention, the word ``notice'' with ``applicable announcement'' to 
provide greater clarity on the type of funding announcement that EDA 
issues, and the word ``published'' with ``issued'' to better describe 
how EDA makes such announcements public. In addition, we propose 
removing the word ``annually,'' as EDA may issue several funding 
announcements throughout the year.
    This NPRM proposes several clarifying revisions to the 
``Definitions'' section of EDA's regulations at Sec.  300.3.

[[Page 76497]]

First, EDA proposes revising the definitions of ``Cooperative 
Agreement'' and ``Grant'' in Sec.  300.3 to specify that EDA may 
administer a cooperative agreement or a grant under a statute other 
than PWEDA. In both definitions, EDA removes the phrase ``under PWEDA'' 
and replaces the phrase ``the activities contemplated in an agreement 
between the parties'' with the phrase ``a purpose or activity 
authorized under PWEDA or another statute'' to provide greater clarity 
and improve sentence structure.
    EDA proposes a minor change to the definition of ``Eligible 
Recipient'' to delete an unnecessary reference to ``of part 306.'' We 
also propose revising the definition of ``Federal Funding Opportunity'' 
or ``FFO,'' by replacing the phrase ``the notice EDA publishes 
annually'' with the phrase ``an announcement EDA publishes during the 
fiscal year,'' as EDA may issue several funding announcement throughout 
the fiscal year. In addition, for clarity, EDA proposes revising the 
first sentence of the definition by replacing the phrase ``Web site'' 
with ``Web site'' and the word ``describes'' with ``provides;'' adding 
the word ``funding'' before the word ``amounts;'' replacing the phrase 
``particular application procedures'' with the phrase ``application and 
programmatic requirements;'' and replacing the phrase ``special 
circumstances and other relevant information concerning EDA's 
Investment programs for the year'' with the phrase ``special 
circumstances, and other information concerning a specific competitive 
solicitation for EDA's economic development assistance programs.'' EDA 
also corrects a grammatical error in the second sentence of the 
definition by replacing the phrase ``EDA may also'' with ``EDA also 
may.''
    EDA proposes minor punctuation and capitalization corrections to 
the definition of ``Federally Declared Disaster'' to remove the hyphens 
between ``Federally'' and ``Declared'' and ``Presidentially'' and 
``Declared'' and to capitalize ``Federally.'' We also propose revising 
the definition of ``Indian Tribe'' to replace the phrase ``any Indian 
tribe, band, nation, pueblo, or other organized group or community, 
including * * *'' with the phrase ``an entity on the list of recognized 
tribes published pursuant to the Federally Recognized Indian Tribe List 
Act of 1994 (Pub. L. 103-454) (25 U.S.C. 479a et seq.), as amended, 
and* * * '' This revision does not affect EDA's relationship with 
Indian Tribes in any way, but provides greater clarity and ensures the 
regulation comports with the definitions of other Federal Agencies, 
including the U.S. Department of the Interior. In addition, we propose 
removing an unnecessary reference to ``an EDA'' from the definition of 
``Investment'' or ``Investment Assistance.'' We also propose replacing 
``costs'' with the singular ``cost'' in the definition of ``Investment 
Rate.''
    With respect to the definition of ``Local Share'' or ``Matching 
Share,'' we received one comment requesting that EDA ``allow for 
Federal funds that are designated to local state agencies, to be 
considered as eligible matching funds for EDA funding.'' EDA is working 
to address this issue by ensuring that Federal Agency resources can be 
leveraged efficiently and effectively, but is not authorized to allow 
all Federal funds provided to States to be used as Matching Share 
because of the requirements of appropriations law. All Federal funds 
are appropriated for particular purposes, as mandated by Congress and 
set out in the relevant authorizing statute, appropriation, or other 
Congressional statement of intent. For another Federal Agency's funds 
to be used to match an EDA award, there must be such a statement of 
Congressional intent. In some cases Congress has indicated that other 
Federal funds may be used to meet EDA's match requirement. For 
instance, currently one of the uses to which Community Development 
Block Grant (``CDBG'') funds provided by the U.S. Department of Housing 
and Urban Development ``HUD'' may be put is ``payment of the non-
Federal share required in connection with a Federal grant-in-aid 
program'' undertaken as part of HUD's Community Development program. 
See 42 U.S.C. 5305(a)(9). In addition, section 205 of PWEDA (42 U.S.C. 
3145) authorizes EDA to supplement a grant awarded under another 
designated Federal program. EDA must determine that Federal funds may 
be used as match for another Federal grant each time funds from another 
Federal Agency are requested to be all or a portion of the Matching 
Share, including when the Federal funds are made available to a State.
    In addition, we received three comments regarding costs that may be 
considered as Local Share or Matching Share. Two suggest that EDA 
consider certain pre-award costs ``to verify eligibility for EDA 
funds'' as a portion of the Matching Share and the third comment sets 
out the commenter's own experience in which the agency did not allowed 
a particular Recipient to use purchased property as Matching Share. All 
costs under an award are determined in accordance with relevant Federal 
cost principles, as set out in the following Office of Management and 
Budget (``OMB'') Circulars: Circular No. A-122 titled ``Cost Principles 
for Nonprofit Organizations'' (2 CFR part 230); Circular No. A-21 
titled ``Cost Principles for Education Institutions'' (2 CFR part 220); 
and Circular No. A-87 titled ``Cost Principles for State, Local and 
Indian Tribal Governments'' (2 CFR part 225). EDA, in its sole 
discretion, may accept certain eligible costs, including pre-award 
costs and Recipient-provided property, as Matching Share or reimburse 
them consistent with the EDA-approved Investment Rate. For pre-award 
costs related to contracts for goods and services to be used as 
Matching Share, such contracts must have been procured in accordance 
with Federal competitive procurement requirements as set out at 15 CFR 
14.43 or 24.36, as applicable. EDA is uncertain of the precise 
circumstances behind the comment with respect to property used as 
Matching Share, but we encourage all Eligible Applicants to work with 
EDA staff early in the application process to ensure costs are 
allowable. We propose non-substantive revisions to the definition of 
``Local Share'' or ``Matching Share'' to replace plural references with 
singular ones for better sentence structure. Accordingly, we replace 
``Recipients'' with ``a Recipient,'' ``third parties'' with ``third 
party,'' and ``other Federal agencies'' with ``another Federal 
agency.''
    In the definition of ``Presidentially Declared Disaster,'' we 
correct a punctuation error by removing the hyphen between 
``Presidentially'' and ``Declared.'' With respect to the definition of 
``PWEDA,'' we propose removing the unnecessary phrase ``including the 
comprehensive amendments made by the Economic Development 
Reauthorization Act of 2004 (Pub. L. 108-373, 118 Stat. 1756).''
    EDA proposes removing the definition of ``Private Sector 
Representative'' to reflect proposed changes to the membership 
requirements applicable to CEDS Strategy Committees and District 
Organization governing bodies. Under current Sec.  303.6(a), a CEDS 
Strategy Committee must include Private Sector Representatives as a 
majority of its membership and under Sec.  304.2(c)(2), the governing 
body of a District Organization must include at least one Private 
Sector Representative. Under this NPRM, EDA proposes removing CEDS 
Strategy Committee and District Organization governing body membership 
threshold requirements; and proposes instead to focus on

[[Page 76498]]

program processes and outputs. Because the defined term ``Private 
Sector Representative'' is used largely in the context of these 
membership threshold requirements, EDA proposes to remove the 
definition. See also the proposed changes to parts 303 and 304.
    EDA corrects a grammatical error in the third sentence of the 
definition of ``Region'' or ``Regional'' by replacing the phrase ``may 
also'' with ``also may.''
    In response to five comments the agency received that support a 
definition of regional innovation cluster, this NPRM includes a 
definition of ``Regional Innovation Clusters'' or ``RICs'' after the 
definition of ``Regional Commission'' in Sec.  300.3. One comment 
requests EDA to ensure that the definition does not exclude communities 
that may lack the resources to form a RIC from partnering with 
communities that do have that capacity. Another comment notes that EDA 
should ``make sure [the] reader understands the vertical integration of 
the cluster and [that] it is not just a conglomerate of like [North 
American Industry Classification System] NAICS [codes].'' Other 
comments express concern regarding the implications of RICs, including 
two that question how RICs will work as a strategy for isolated 
communities ``where the nearest town could be 90 to 167 miles away'' 
and in communities that ``are not accessible by roads and lack many 
essential infrastructure and program needs.'' In addition, two comments 
warn that ``[r]egionalism and collaboration are two words espoused at 
most conferences, however, there is a real need to look at these 
concepts and adjust as needed for particular projects'' and that 
``while `regionalism' is the buzz word * * * revitalization and 
progress must begin locally before it ever reaches a regional stage.'' 
One commenter goes on to note, ``government funds should not be awarded 
unless there are identifiable [benchmarks] to incorporate these 
concepts.'' Another comment states that ``EDA should be willing to fund 
existing programs that have successful track records just as much as 
new programs with promising projections.''
    EDA thanks the commenters for their thoughtful responses and will 
endeavor to ensure the proposed definition of RICs addresses these 
concerns. EDA is striving to create a highly flexible and inclusive RIC 
framework that works for all types of Regions. EDA recognizes that RIC 
participants can and should have strategic partnerships outside of the 
RIC's geographic Region and the definition emphasizes that a RIC can 
cross jurisdictional boundaries. EDA's RIC-based programs are designed 
to increase the capacity of distressed communities to establish a RIC 
and take advantage of the resources of existing RICs. Also, EDA has 
tried to craft the definition to emphasize vertical integration while 
remaining flexible by defining RICs as ``networks of similar, 
synergistic, or complementary entities'' that ``have active channels 
for business transactions and communication.'' EDA believes RICs can be 
integral to successful economic development strategies for many 
communities and continues to develop performance measures and goals to 
help assess the impact of RICs and build a portfolio of best practices. 
Also, RICs are just one strategy amongst EDA's array of policy and 
program options that can be tailored to meet communities' needs. 
Through the RIC framework, EDA will work closely to articulate a 
strategy that incorporates the attributes and challenges of all types 
of communities, from densely populated to very rural. We invite 
additional constructive comments on ways to improve the definition.
    Last, EDA proposes revising the definition of ``Trade Act'' to 
include a reference to the statutory citation for the Trade Adjustment 
Assistance for Communities program. Therefore, in the definition of 
Trade Act, the phrase ``chapters 3 and 5'' is revised to read as 
``chapters 3, 4, and 5.'' Finally, EDA adds the phrase ``for purposes 
of EDA,'' to clarify that the definition of ``Trade Act'' is specific 
to EDA and its programs.

Part 301--Eligibility, Investment Rate and Application Requirements

    Part 301 sets forth eligibility criteria, the maximum allowable 
Investment Rates, and application requirements common to all PWEDA-
enumerated programs (excluding Community Trade Adjustment Assistance at 
part 313 and Trade Adjustment Assistance for Firms (``TAAF'') at part 
315). In general, subpart A of part 301 presents an overview of EDA's 
eligibility requirements; subpart B addresses applicant eligibility; 
subpart C addresses Regional economic distress level requirements; 
subpart D sets forth maximum allowable Investment Rates and Matching 
Share requirements; and subpart E addresses application requirements, 
as well as the evaluation criteria used by EDA in selecting Projects. 
EDA revises the table of contents of part 301 to include a reference to 
new Sec.  301.11--Infrastructure, which is described below.
    We propose clarifying changes to Sec.  301.1 to simplify the 
provision and ensure it better reflects EDA's application process. We 
remove the phrase ``an applicant and the Project proposed by the 
applicant must satisfy each of'' so that the provision's introductory 
text simply and clearly reads ``In order to receive EDA Investment 
Assistance, the following requirements must be met.'' In addition, to 
better reflect EDA's application selection process, we propose 
relocating the phrase ``EDA must select the Eligible Applicant's 
Project'' from Sec.  301.1(d) to new Sec.  301.1(f) and rephrase it 
slightly to read ``EDA must select the Eligible Applicant's proposed 
Project.''
    EDA received one comment on the agency's economic distress level 
requirements, which are set out at Sec.  301.3. The commenter expresses 
concern that one of the economic distress criteria to demonstrate 
eligibility for EDA's Public Works and Economic Adjustment Assistance 
programs may disproportionately exclude rural communities where 
``smaller job loss numbers become huge in today's economy.'' The 
commenter urges ``EDA to consider lowering the dislocation job 
requirement.'' The regulation at Sec.  301.3 tracks the requirements of 
section 301 of PWEDA (42 U.S.C. 3161), which requires that a Project be 
located in a Region that meets one or more of the following economic 
distress criteria in order to be eligible for EDA assistance:
     An unemployment rate that is, for the most recent 24-month 
period for which data are available, one percentage point greater than 
the national unemployment rate;
     Per capita income that is, for the most recent period for 
which data are available, 80 percent or less of the national average 
per capita income; or
     A ``Special Need,'' as determined by EDA.
    EDA does not have the authority to adjust these requirements, but 
recognizes the devastation that loss of a significant number of jobs 
has on a smaller community. If a Region does not meet the statistical 
economic distress criteria set out by PWEDA, EDA may be authorized to 
provide assistance through its Special Need criteria as defined at 
Sec.  300.3, which provide the flexibility to address a variety of 
sudden and severe economic dislocations.
    In response to an internal comment from EDA staff, EDA proposes 
changes to Sec.  301.3(a)(4) to reduce confusion regarding data sources 
for demonstrating economic distress. The proposed text recognizes that 
the U.S. Census Bureau's American Community Survey (``ACS''), which is 
EDA's default data source for determining distress

[[Page 76499]]

levels, does not include 24-month unemployment data. For clarity, EDA 
proposes to insert the heading Data requirements to demonstrate 
economic distress levels to Sec.  301.3(a)(4). For distress levels 
based on per capita income, the regulation provides that EDA still will 
base its determination on ACS data, and EDA proposes making the first 
sentence of Sec.  301.3(a)(4)(i) specific to per capita income by 
removing the reference to ``the unemployment rate or * * *'' EDA also 
relocates the clause that currently concludes the first sentence of 
Sec.  301.3(a)4)(i), which sets out the requirement that data 
correspond to the geographic area upon which the Eligible Applicant is 
basing eligibility, to be the final sentence of the provision. EDA 
appropriately rephrases the sentence to remove the unnecessary word 
``either'' so that the sentence begins ``The required data must be for 
the Region * * *'' The remainder of the sentence remains unchanged. EDA 
proposes a second sentence specific to distress levels based upon the 
unemployment rate that reads ``For economic distress levels based upon 
the unemployment rate, EDA will base its determination upon the most 
recent data published by the Bureau of Labor Statistics (``BLS''), 
within the U.S. Department of Labor.'' EDA proposes revising the 
sentence of the provision that currently begins ``Where a recent ACS is 
not available,'' by replacing that introductory phrase with a 
clarifying introductory clause that reads ``For eligibility based upon 
either per capita income requirements or the unemployment rate, when 
the ACS or BLS data, as applicable, are not the most recent Federal 
data available.'' The remainder of the sentence remains unchanged.
    In addition to the changes to Sec.  301.3(a)(4), EDA makes a non-
substantive change to Sec.  301.3(a)(1) to remove the parentheses from 
around the phrase ``or more.'' For clarity and better sentence 
structure in Sec.  301.3(a)(2), EDA replaces the phrase ``economic 
distress criteria of paragraph (a)(1) of this section'' with ``economic 
distress criteria described in paragraph (a)(1) of this section'' and 
the phrase ``is also'' with ``also is.'' This NPRM also proposes 
removing repetitive numerical references by replacing ``twenty-four 
(24) month'' with ``24-month'' and ``one (1)'' with ``one'' in Sec.  
301.3(a)(1)(i); replacing ``eighty (80)'' with ``80'' in Sec.  
301.3(a)(1)(ii); and replacing ``one (1)'' with ``one'' in Sec.  
301.3(c)(1).
    EDA received 17 comments regarding the agency's Investment Rate 
requirements, which are set out at Sec.  301.4 and provide the 
framework for the proportion of total Project costs EDA may provide. In 
general, Sec.  301.4 provides that an Eligible Applicant may be 
eligible for a 50 percent grant rate. Applicants experiencing 
relatively higher levels of distress or that are subject to a Special 
Need may be eligible for a higher grant rate, up to 80 percent. See 
Sec.  300.3 for the definition of ``Special Need.'' Several comments 
express concern regarding the 50 percent Investment Rate and suggest 
additional flexibilities to establish higher rates, particularly for 
EDA's Planning awards and Projects in distressed communities. In 
addition, one internal comment suggests that EDA establish standard 
Investment Rates for certain Recipients of Planning awards; 
specifically 75 percent for District Organizations and 100 percent for 
Indian Tribes.
    The general Investment Rate requirements in Sec.  301.4(b)(1) 
implement section 204 of PWEDA (42 U.S.C. 3144), which requires a 50 
percent baseline share plus an additional amount up to 80 percent 
``based on the relative needs of the area.'' EDA is not authorized to 
set particular Investment Rates for Planning awards, but the agency is 
authorized to provide higher maximum Investment Rates for all types of 
awards based on a Region's distress level, as set out in Table 1 of 
Sec.  301.4(b)(1)(ii). In addition, in accordance with Table 2 in Sec.  
301.4(b)(5), EDA may establish an Investment Rate of up to 100 percent 
for special Projects, including Projects of Indian Tribes.
    Two commenters suggest that EDA restore ``EDA's local match rate 
requirements to the pre-2005 levels'' and two commenters support EDA's 
inclusion of ``the revised Federal-local cost share provisions included 
in S. 2778 by the U.S. Senate Committee on Environment and Public Works 
during the 111th Congress.'' EDA understands that communities and 
Regions face challenging economic conditions; however, it is the 
agency's experience that the current Investment Rate determination 
structure encourages communities to collaborate and prioritize their 
needs and appropriately marshals resources to distressed Regions. By 
ensuring that communities have ``skin in the game,'' EDA's Investment 
Rate framework reinforces the need for local buy-in and participation, 
which improves economic development outcomes. In addition, the current 
structure provides EDA with needed flexibility to appropriately 
increase the EDA share based on Special Need and distress 
considerations. Therefore, EDA does not propose adjusting its 
Investment Rate framework through this NPRM. However, this NPRM does 
provide additional flexibilities for higher Investment Rates, 
specifically, up to 80 percent to encourage Projects that involve broad 
Regional planning and coordination, and Projects that effectively 
leverage other Federal resources. Also, this NPRM contains a number of 
provisions designed to smooth connections between EDA and other Federal 
Agencies to ensure that stakeholders can effectively leverage Federal 
resources; including specifying that any Federal loan may meet an RLF's 
private leveraging requirements.
    In response to an internal comment, EDA proposes syntax changes to 
Sec.  301.4(b)(1), which sets out the general requirements with regards 
to Investment Rates, to clarify that EDA's grant rates generally must 
be determined in accordance with Table 1 of Sec.  301.4(b)(1)(ii). EDA 
proposes splitting the initial sentence of the provision into two 
clearer sentences. In the first sentence of the provision, EDA replaces 
the phrase ``shall, after the application of Table 1'' with the phrase 
``shall be determined in accordance with Table 1.'' EDA proposes ending 
the sentence at the word ``subsection.'' To begin the second sentence 
of the provision, EDA proposes adding the phrase ``The maximum EDA 
investment rate shall'' before the clause that begins with the phrase 
``not exceed the sum of.'' In addition, EDA removes use of the 
variables (x) and (y) in the second sentence for clarity. These 
revisions do not change EDA's current practice and only clarify the 
regulation to reflect the requirements of PWEDA. In addition, EDA 
proposes removing the second sentence of Sec.  301.4(b)(3)(iii), to 
allow the Assistant Secretary to delegate authority to grant a waiver 
of the requirement that for Planning Investments under part 303, the 
Investment Rate shall be the maximum allowable under Table 1 of Sec.  
301.4(b)(1)(ii). In addition, in Sec.  301.4(c), EDA replaces the 
phrase ``Federal Funding Opportunity notices'' with ``Federal Funding 
Opportunity announcements'' for increased clarity.
    Six comments suggest that EDA use its grant rates ``to re-establish 
Federal incentives for regional collaboration of local governments and 
other related entities through the national network of Economic 
Development Districts.'' Regional collaboration in planning and 
implementing economic development projects is a key indicator of 
success, and EDA agrees that such efforts should be incentivized. 
Therefore, EDA revises Table 2 of Sec.  301.4(b)(5) to authorize an 
Investment Rate of up to 80 percent for

[[Page 76500]]

Projects that involve broad Regional planning and coordination with 
other entities outside the Eligible Applicant's political jurisdiction 
or area of authority, under special circumstances as determined by EDA. 
In general, to demonstrate broad Regional planning and coordination, 
Eligible Applicants must demonstrate costs necessary for such efforts 
that would not ordinarily have been incurred in the course of their 
usual planning and Project efforts; for example, new maps and analyses 
because of the expanded Regional coverage. Also, EDA proposes revising 
Table 2 to incentivize Projects that effectively leverage other Federal 
Agency resources with a maximum grant rate of up to 80 percent. Note 
that EDA also incentivizes broad Regional collaboration through its 
evaluation criteria as set out at Sec.  301.8.
    Two comments recommend that EDA waive match for FEMA-declared 
disasters. EDA agrees that maximum flexibility is necessary in disaster 
situations, and therefore also amends Table 2 of Sec.  301.4(b)(5) to 
clarify that EDA may provide up to a 100 percent grant rate when ``EDA 
receives appropriations under section 703 of PWEDA (42 U.S.C. 3233),'' 
which authorizes disaster economic recovery activities. EDA proposes a 
second revision to remove a deadline that applies to disaster 
applications. Under the current regulation, to be eligible for a 100 
percent grant rate, an application for a Project to address a 
Presidentially Declared Disaster must be submitted within 18 months of 
the disaster declaration. EDA believes that the 18 month requirement 
may be unduly restrictive, and revises the provision to provide that 
EDA may provide a maximum Investment Rate of 100 percent for ``Projects 
to address and implement post-disaster economic recovery efforts in 
Presidentially Declared Disaster areas in a timely manner.'' EDA 
expects that communities will respond to disasters expeditiously, and 
the phrase ``in a timely manner'' gives EDA the flexibility to set time 
limits appropriate to a disaster scenario.
    This NPRM proposes removing repetitive numerical references 
throughout Sec.  301.4 by replacing ``Fifty (50)'' with ``50'' and 
``thirty (30)'' with ``30'' in Sec.  301.4(b)(1); ``one (1)'' with 
``one'' in Sec.  301.4(b)(1)(ii); all instances of ``twenty-four (24) 
month'' with ``24-month'' and ``1 percentage point '' with ``one 
percentage point'' in Table 1 in (b)(1)(ii); ``eighty (80)'' with 
``80'' in Sec.  301.4(b)(2); ``fifty (50)'' with ``50'' in Sec.  
301.4(b)(3)(i); ``eighty (80)'' with ``80'' in Sec.  301.4(b)(3)(ii), 
and ``one hundred (100)'' with ``100'' in Sec.  301.4(b)(4).
    We propose clarifying revisions to Sec.  301.6, which sets out the 
requirements for EDA to provide assistance to supplement another 
Federal grant, to correct capitalization errors in the section heading 
so that it reads ``Supplementary Investment Assistance'' instead of 
``Supplementary investment assistance.'' We also revise the beginning 
of the first sentence of Sec.  301.6(a) to read ``Pursuant to a request 
made by an Eligible Applicant, EDA Investment Assistance may supplement 
a grant'' instead of ``Pursuant to a request by an Eligible Applicant, 
EDA Investment Assistance may supplement grants'' and replace the 
phrase ``any Federal grant program'' with ``a Federal grant program'' 
in the second sentence. We also revise the beginning of the first 
sentence of Sec.  301.6(b) to read ``For a Project that meets the 
economic distress criteria provided in Sec.  301.3(a)'' instead of 
``For Projects located in Regions meeting the criteria of Sec.  
301.3(a)'' and remove the unnecessary reference to ``EDA'' immediately 
before the phrase ``Investment Assistance.'' For clarity, in the second 
sentence of Sec.  301.6(b), we replace the phrase ``the combination of 
EDA Investment and other Federal funds'' with the phrase ``the EDA 
Investment and other Federal funds together'' and insert the word 
``that'' after