Strategic Economic and Community Development, 28807-28818 [2015-12163]

Agencies

• DEPARTMENT OF AGRICULTURE
• Farm Service Agency
• Rural Business-Cooperative Service
• Rural Housing Service
• Rural Utilities Service

[Federal Register Volume 80, Number 97 (Wednesday, May 20, 2015)]
[Rules and Regulations]
[Pages 28807-28818]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12163]


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DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service

Rural Housing Service

Rural Utilities Service

Farm Service Agency

7 CFR Part 1980

RIN 0570-AA94


Strategic Economic and Community Development

AGENCY: Rural Business-Cooperative Service, Rural Housing Service, 
Rural Utilities Service, Farm Service Agency, U.S. Department of 
Agriculture (USDA).

ACTION: Interim rule with public comment.

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SUMMARY: This interim rule implements Section 6025, Strategic Economic 
and Community Development, under the Agricultural Act of 2014 (2014 
Farm Bill). Unless the Agency provides otherwise, the Agency will 
reserve up to 10 percent of the funds appropriated to

[[Page 28808]]

certain Rural Development (RD) programs each fiscal year to fund 
projects that support the implementation of strategic economic and 
community development plans across multi-jurisdictional areas. The 
programs from which funds will be reserved are community facility 
programs, water and waste disposal programs, and rural business and 
cooperative development programs. To be eligible for the reserved 
funds, projects must be first eligible for funding under the programs 
from which the funds are reserved. In addition, projects must be 
carried out solely in rural areas. Any reserved funding that is not 
obligated by June 30 of the fiscal year in which the funds were 
reserved will be returned to the programs' regular funding accounts.

DATES: Effective June 19, 2015. Written comments must be received on or 
before August 18, 2015. The comment period for the information 
collection under the Paperwork Reduction Act of 1995 ends July 20, 
2015.

ADDRESSES: Submit your comments on this rule by any of the following 
methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Submit written comments via the U.S. Postal Service 
to the Branch Chief, Regulations and Paperwork Management Branch, U.S. 
Department of Agriculture, STOP 0742, 1400 Independence Avenue SW., 
Washington, DC 20250-0742.
     Hand Delivery/Courier: Submit written comments via Federal 
Express Mail, or other courier service requiring a street address, to 
the Branch Chief, Regulations and Paperwork Management Branch, U.S. 
Department of Agriculture, 300 7th Street SW., 7th Floor, Washington, 
DC 20024.
    All written comments will be available for public inspection during 
regular work hours at the 300 7th Street SW., 7th Floor address listed 
above.

FOR FURTHER INFORMATION CONTACT: Aaron Morris, Rural Housing Service, 
Community Facilities, U.S. Department of Agriculture, STOP 0787, 1400 
Independence Avenue SW., Washington, DC 20250-3225; email: 
aaron.morris@wdc.usda.gov; telephone (202) 720-1500.

SUPPLEMENTARY INFORMATION:

Executive Summary

I. Purpose of the Regulatory Action

    This action is needed in order to implement Section 6025 of the 
Agricultural Act of 2014 (2014 Farm Bill) (7 U.S.C. 2008v). Section 
6025 provides the Secretary of Agriculture the authority to give 
priority to projects that support strategic economic development or 
community development plans. Section 6025 enables the Secretary to 
reserve up to 10 percent of program funds from certain Rural 
Development programs, as identified in the section. This action 
implements this priority.

II. Summary of the Major Provisions

    1. Programs. Based on the authorizing statute, funds will be 
reserved from one or more of eight RD programs. These programs, which 
are referred to as the ``underlying programs,'' are:

 Community Facility Loans
 Fire and Rescue and Other Small Community Facilities Projects
 Community Facilities Grant Program
 Community Programs Guaranteed Loans
 Water and Waste Disposal Programs Guaranteed Loans
 Water and Waste Loans and Grants
 Business and Industry Guaranteed Loanmaking and Servicing
 Rural Business Development Grants

    2. Funding. RD will reserve up to 10 percent of an underlying 
program's program level to fund projects under this priority. The 
authorizing statute sets the upper limit on the amount of funding that 
can be reserved for this priority. Based on a program's budget and 
demand for reserved funding, RD may set lower percentages for a 
specific fiscal year.
    Any funding that is not expended by June 30, as specified by the 
authorizing statute, will be returned to the applicable underlying 
program's account for obligation for all eligible projects in that 
program.
    3. Applications. To be considered for funding under this priority, 
applicants and their projects must be eligible for one of the 
underlying program and must submit a specific form. The information in 
this form, which will accompany the application material for the 
applicable underlying program, will enable RD to determine whether the 
proposed project is eligible to receive reserved funds and, if so, to 
score the application in order to determine which projects will receive 
reserved funds.
    4. Scoring applications. RD will score these applications based on:
     The underlying program's criteria.
     The proposed project's direct support of the objectives 
found in the strategic economic development or community development 
plan that it supports.
     Certain characteristics (as specified in the authorizing 
statute) of strategic economic development or community plan that the 
proposed project support.
    The scores from these three areas will be summed, with higher 
scoring applications receiving priority for reserved funding.
    5. Applications that do not received reserved funds. If an 
application does not receive reserved funds, it will be automatically 
competed with all other applications for remaining funds in that 
program's account. Reserved funding applications will compete based on 
only the score they receive on the underlying program's scoring 
criteria.
    6. Awardees. Applicants who receive reserved funds for this 
priority will submit information on the project's measures, metrics, 
and outcomes to the appropriate entity(ies) monitoring the 
implementation of the plan.
    7. Analysis. Because the objectives for a particular plan are 
driven by applicants and the multiple jurisdictions involved, RD has 
not yet identified a single set of metrics that would allow for 
parsing, or attributing, marginal benefits or impacts of the underlying 
program that would be achieved because of association with a multi-
jurisdictional plan. However, RD is committed to the continual 
improvement of its collection and analysis of administrative and 
programmatic data to better understand the impact and benefit of 
support for projects associated with multi-jurisdictional plans.

III. Costs and Benefits

    The cost to the individual applicant to apply for reserved funding 
is nominal. RD estimates the cost to complete the specific form to be 
no more than $300 assuming on average approximately 9 hours per form. 
The primary benefit of this action is to foster an environment of 
increased collaboration between project applicants and rural 
communities as they consider how to best use RD resources to address 
multi-jurisdictional needs, by leveraging federal, state, local or 
private funding, or otherwise capitalize upon the unique strengths of 
the rural area to support successful community and economic 
development.

Classification

    This action has been reviewed under Executive Order (EO) 12866 and 
has been determined to be ``economically significant'' by the Office of 
Management and Budget. The EO defines a ``economically significant 
regulatory action'' as one that is likely to result in a rule that may: 
(1) Have an annual effect on the economy of $100 million or more or 
adversely affect, in

[[Page 28809]]

a material way, the economy, a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or State, 
local, or tribal governments or communities; (2) Create a serious 
inconsistency or otherwise interfere with an action taken or planned by 
another agency; (3) Materially alter the budgetary impact of 
entitlements, grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) Raise novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in this EO.
    The Agency conducted a benefit-cost analysis to fulfill the 
requirements of EO 12866. In this analysis, the Agency identifies 
alternatives considered, the distributional effects of the reserved 
funding, the estimated costs of applying for and the potential benefits 
of receiving reserved funding to the various applicants under the eight 
programs included and to the Agency, the effect on the underlying 
programs, and the present value of the reserved funding.
    Alternatives considered. The Agency did not identify meaningful 
alternatives to the proposed action.
    Distributional effects. The proposed action will result in a 
distributional effect via ``transfer payments'' by directing Agency 
funds from projects that do not support a strategic economic 
development or community development plan to projects that do support 
such plans. (Transfer payments are monetary payments from one group to 
another that do not affect total resources available to society.) In 
general, the Agency does not expect the distributional effect to be 
large because many projects funded by the underlying programs already 
are found in areas covered by plans that would qualify for Section 6025 
reserved funding. It is unknown as to how many such projects would 
apply for the reserved funding.
    To the extent that there is an increase in Agency funding of 
projects that support such plans, the Agency expects areas within the 
region covered by a plan to be ``better off'' than if the project was 
not funded. The extent of this transfer, however, cannot be calculated 
at this time. In contrast, the proposed action may result in a negative 
impact by not funding a project that does not support such a plan.
    Costs. In this analysis, the Agency estimates the cost to the 
public for applying for and receiving reserved funding is approximately 
$106,000 per year. With an estimated 374 applicants and 317 awardees 
per year, this equates to approximately $285 per applicant.
    The number of applicants was determined by first estimating the 
most recent estimate of the number of applicants (e.g., from Paperwork 
Reduction Act packages) for each of the individual programs included 
and then determining the percentage of those applicants that are in an 
area covered by an Economic Development Administration (EDA) approved 
plan. Next, the number of underlying program applicants was multiplied 
by the percentage of applicants in an EDA-approved plan area and this 
result was then multiplied by an estimate of how many such potential 
applicants would actually apply for Section 6025 reserved funds. For 
Rural Business Devlepment Grants (RBDG), the same steps were used with 
one additional adjustment factor taking into account difference in 
funding levels between the ``old'' Rural Business Enterprise Grant 
(RBEG) and Rural Business Opportunity Grant (RBOG) programs and the new 
RBDG program.
    The number of awardees was estimated in a similar fashion. For each 
included program, the number of awardees over the last few years was 
determined and then the percentage of those awardees that are in an 
area covered by an EDA approved plan was determined. Next, the number 
of underlying program awardees was multiplied by the percentage of 
awardees in an EDA-approved plan area and this result was multiplied by 
the percentage of potential applicants that would likely apply for 
Section 6025 reserved funds (as determined earlier for estimating the 
number of applicants). For RBDG, the same steps were used with two 
additional modifications--(1) using the same adjustment as for 
determining applicants to take into account difference in funding 
levels between the ``old'' RBEG and RBOG programs and the new RBDG 
program and (2) taking into account the requirement that no more than 
10 percent of the RBDG funding could be used to support projects that 
support ``RBOG'' purposes.
    In terms of costs to the Government for administering and 
implementing this project, the Agency estimated a cost of approximately 
$121,200 for reviewing and scoring the Section 6025 applications 
assuming 12 hours per application.
    Benefits. The priority provided by Section 6025 is directed at only 
those eligible applications that are carried out solely in a rural area 
and that also support development plans on a multi-jurisdictional 
basis. As a result of this priority, the Agency expects that rural 
entities will access Rural Development programs in a manner that 
supports projects and initiatives that develop long-term community and 
economic growth strategies. The Agency will work with rural communities 
to consider how they might use Rural Development resources to address 
multi-jurisdictional needs, by leveraging federal, state, local or 
private funding, or otherwise capitalize upon the unique strengths of 
the rural area to support successful community and economic 
development. This priority will help to maximize the impact of 
resources available at all levels of government and ultimately help 
rural communities reach their full potential. Such projects will be 
more effective than ``one-off'' projects (i.e., those that meet an 
immediate need) in contributing to the larger strategic vision because 
they will be based on a strategy that takes into account the region's 
strengths and weaknesses, leveraging the area's assets in the most 
effective way possible.
    Aligning projects with regional economic and community development 
plans helps engage individuals, organizations, local governments, 
institutes of learning, and the private sector in a meaningful 
conversation about what capacity building efforts would best serve the 
community in terms of creating jobs, creating investments, and 
generating regional wealth. In addition, the alignment helps take into 
account and, where possible, leverage other regional planning efforts, 
including the use of other federal funds and resources that support a 
region's goals and objectives. This helps prevent duplication, while 
better harnessing and directing limited federal resources for 
implementation efforts.
    In sum, the Agency expects that the reservation of funds under this 
provision will result in an increased share of existing program funding 
going to projects that support strategic economic development or 
community development plans, thereby helping to address regional 
specific needs more directly and more generally strengthening the 
Agency's ability to help ensure a thriving rural economy.
    Underlying Programs. The proposed action will not change the 
underlying provisions of the included programs (e.g., eligibility, 
applications, award decisions, scoring, and servicing provisions).
    Present Values. Net present values were calculated using a 3 
percent and a 7 percent discount rate for program levels covering 
Fiscal Years 2015 through 2019. The values were calculated for a 
baseline scenario (i.e., without the Section 6025 priority) and for a 
``with Section 6025 priority''

[[Page 28810]]

scenario. For the Section 6025 priority scenario, 10 percent of each of 
the underlying programs' program level funds is assumed to be used to 
fund Section 6025 applications and the remaining 90 percent of each of 
the underlying programs' program level funds is used to fund ``regular 
program'' applications.
    The results show that the net present value associated with funding 
Section 6025 priority applications ranges from $448 million to $466 
million, but that there is no net difference between the baseline 
scenario and the ``with Section 6025 priority'' scenario. This occurs 
because Section 6025 neither increases nor decreases the program level 
fund allocation for any of the underlying programs.

Catalog of Federal Domestic Assistance

    RD programs affected by this rulemaking are shown in the Catalog of 
Federal Domestic Assistance (CFDA) with numbers as indicated:

10.760--Water and Waste Disposal Systems for Rural Communities
10.766--Community Facilities Loans and Grants
10.768--Business and Industry Guaranteed Loan Program
10.351--Rural Business Development Grants

    All active CFDA programs can be found at www.cfda.gov.

Executive Order 12372, Intergovernmental Review of Federal Programs

    This action is not subject to the provisions of Executive Order 
12372, which requires intergovernmental consultation with State and 
local officials.

Executive Order 12988, Civil Justice Reform

    This interim rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. RD has determined that this rule meets the 
applicable standards provided in section 3 of the Executive Order. 
Additionally, (1) all State and local laws and regulations that are in 
conflict with this rule will be preempted; (2) no retroactive effect 
will be given to the rule; and (3) administrative appeal procedures, if 
any, must be exhausted before litigation against the Department or its 
agencies may be initiated, in accordance with the regulations of the 
National Appeals Division of USDA at 7 CFR part 11.

National Environmental Policy Act

    This document has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program'' and 7 CFR 1794 ``Environmental 
Policies and Procedures.'' To be eligible for the set-aside funds, a 
project must meet all of the requirements of the applicable underlying 
program, including its National Environmental Policy Act (NEPA) 
requirements. Any project eligible for the set-aside funding is already 
an action included the underlying programs and such actions are covered 
by NEPA, and therefore categorically excluded. Therefore, RD has 
determined that this action does not constitute a major Federal action 
significantly affecting the quality of the human environment and, in 
accordance with the NEPA of 1969, 42 U.S.C. 4321 et seq., an 
Environmental Impact Statement is not required.

Unfunded Mandates Reform Act

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

Regulatory Flexibility Act

    Under section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 
605(b), RD certifies that this rule will not have a significant 
economic impact on a substantial number of small entities. The rule 
affects applicants across eight RD programs. Many of these applicants 
are small businesses. For example, with the Business and Industry (B&I) 
Guaranteed Loan program alone, RD estimates that approximately 50 
percent of the 1,117 active lenders in the current B&I portfolio are 
small entities as defined by the Regulatory Flexibility Act. Therefore, 
RD has determined that this rule will affect a substantial number of 
small entities.
    However, RD has determined that the economic impact of the rule on 
these small entities will not be significant. The rule does not make 
any changes to the programs from which funds will be reserved. The rule 
will require applicants to submit an additional form if seeking funding 
that is reserved for projects that support strategic economic 
development or community development plans. Based on the data in the 
Paperwork Reduction Act (PRA) burden package, RD estimates that the 
cost to complete this form will, on average, be no more than $300. 
Therefore, this rule will not have a significant impact on small 
entities.

Executive Order 13132, Federalism

    The policies contained in this 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 
interim 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

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' Executive Order 13175 requires Federal agencies 
to consult and coordinate with tribes on a government-to-government 
basis on policies that have tribal implications, including regulations, 
legislative comments or proposed legislation, and other policy 
statements or actions that have substantial direct effects on one or 
more Indian tribes, on the relationship between the Federal Government 
and Indian tribes or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes.
    Rural Development has assessed the impact of this rule on Indian 
tribes and determined that the interim rule does not, to our knowledge, 
have tribal implications that require tribal consultation under EO 
13175. On August 21, 2014, however, Rural Development opened 
consultation on Farm Bill section 6025 pertaining to this regulation. 
Twenty one (21) Tribes participated in this consultation, and Rural 
Development received zero (0) formal and actionable comments. Primary 
Tribal concerns included definitions within the rule regarding 
``plans'' and ``multi-jurisdictional'' strategies.
    Rural Development plans to use an inclusive definition of ``plans'' 
so that a wide range of plans that Tribes currently have adopted and 
implemented may be used, as long as certain minimum standards are met. 
For instance the plan must be multi-jurisdictional and include:
     Economic conditions of the region;
     economic and community strengths, weaknesses, 
opportunities, and threats for the region;
     consideration of such aspects as the environmental and 
social conditions;
     strategies and implementation plan that build upon the 
region's strengths and opportunities ;=-and resolve the

[[Page 28811]]

weaknesses and threats facing the region;
     performance measures to evaluate the successful 
implementation of the plan;
     support of key community stakeholders.
    These minimum criteria do not pose any unique or additional 
implications or challenges for Tribes. The rule incentivizes additional 
planning, partnering and strategies between Tribes and other units of 
government/jurisdictions, such as other Indian Tribes, States, 
Counties, Cities, Townships, Towns, Boroughs, etc. These details of the 
rule, along with many others, were explained, contextualized and 
clarified during the consultation event on August 21, to provide a 
deeper understanding of the agency's underlying rationale in 
implementing this program in this manner.
    If a Tribe requests additional consultation, Rural Development will 
work with the Office of Tribal Relations to ensure meaningful 
consultation is provided where changes, additions and modifications 
identified herein are not expressly mandated by Congress.

Paperwork Reduction Act

    The information collection requirements contained in this interim 
rule have been submitted to the Office of Management and Budget (OMB). 
However, in accordance with the Paperwork Reduction Act of 1995, USDA 
RD will seek OMB approval of the reporting and recordkeeping 
requirements contained in this rule and hereby opens a 60-day public 
comment period.
    Title: Strategic Economic and Community Development.
    OMB Number: 0570-NEW.
    Type of Request: New collection.
    Abstract: This rule enables RD to reserve funds from eight RD 
programs for the specific purpose of funding projects that support 
strategic economic and community development plans.
    In order to ensure a project qualifies for these reserved funds, RD 
must collect information on the proposed project, including how the 
project supports the implementation of a strategic community or 
economic development plan, and information on the plan itself in order 
to allow RD to prioritize projects if the reserved funding is 
insufficient to fund all eligible projects. The information required 
does not depend on the specific program whose reserved funding the 
applicant is seeking.
    The following estimates are based on the average over the first 3 
years the program will be in place.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 4.8 hours per response.
    Respondents: Rural businesses; units of State, tribal, or local 
government;, instrumentalities of a State, tribal, or local government; 
non-profit organizations; assocations; academic institutions; public 
bodies; banks, credit unions, and other commercial lenders.
    Estimated Number of Respondents: 374.
    Estimated Number of Responses per Respondent: 1.85.
    Estimated Number of Responses: 692.
    Estimated Total Annual Burden (hours) on Respondents: 3,348.

E-Government Act Compliance

    RD is committed to complying with the E-Government Act, to promote 
the use of the Internet and other information technologies, to provide 
increased opportunities for citizens to access Government information 
and services electronically.

USDA Non-Discrimination Statement

    The U.S. Department of Agriculture (USDA) prohibits discrimination 
against its customers, employees, and applicants for employment on the 
bases of race, color, national origin, age, disability, sex, gender 
identity, religion, reprisal and, where applicable, political beliefs, 
marital status, familial or parental status, sexual orientation, or all 
or part of an individual's income is derived from any public assistance 
program, or protected genetic information in employment or in any 
program or activity conducted or funded by the Department. (Not all 
prohibited bases will apply to all programs and/or employment 
activities.)
    If you wish to file an employment complaint, you must contact your 
agency's EEO Counselor (PDF) within 45 days of the date of the alleged 
discriminatory act, event, or in the case of a personnel action. 
Additional information can be found online at https://www.ascr.usda.gov/complaint_filing_file.html.
    If you wish to file a Civil Rights program complaint of 
discrimination, complete the USDA Program Discrimination Complaint Form 
(PDF), found online at https://www.ascr.usda.gov/complaint_filing_cust.html, or at any USDA office, or call (866) 632-
9992 to request the form. You may also write a letter containing all of 
the information requested in the form. Send your completed complaint 
form or letter to us by mail at U.S. Department of Agriculture, 
Director, Office of Adjudication, 1400 Independence Avenue SW., 
Washington, DC 20250-9410, by fax (202) 690-7442 or email at 
program.intake@usda.gov.
    Individuals who are deaf, hard of hearing, or have speech 
disabilities and you wish to file either an EEO or program complaint 
please contact USDA through the Federal Relay Service at (800) 877-8339 
or (800) 845-6136 (in Spanish).
    Persons with disabilities who wish to file a program complaint, 
please see information above on how to contact us by mail directly or 
by email. If you require alternative means of communication for program 
information (e.g., Braille, large print, audiotape, etc.) please 
contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).

I. Background and Discussion

    RD administers a multitude of Federal programs for the benefit of 
rural America, ranging from housing and community facilities to 
infrastructure and business development. Its mission is to increase 
economic opportunity and improve the quality of life in rural 
communities by providing the leadership, infrastructure, capital, and 
technical support that enables rural communities to prosper. To achieve 
its mission, RD provides financial support (including direct loans, 
grants, and loan guarantees) and technical assistance.
    Section 6025 of the 2014 Farm Bill amends the Consolidated Farm and 
Rural Development Act by adding a new section--Section 379H, Strategic 
Economic and Community Development. This section provides RD the 
ability to prioritize projects that are part of multi-jurisdictional 
strategic economic develoment or community development plans. This 
provides RD an important mechanism to further our mission by leveraging 
projects that spur regional economic and community development. In 
addition, this will reward communities that demonstrate best practices 
for furthering sustainable regional and community prosperity by 
bringing together key local and regional stakeholders and using long-
term planning that integrates targeted investments across communities 
and regions.

II. Discussion of the Rule

    The following paragraphs discuss each section of the interim rule 
and provide additional information on RD's intent in implementing each.

[[Page 28812]]

Purpose (Sec.  1980.1001)

    This section summarizes the purpose of this subpart, which is to 
prioritize funding of projects that specifically further the 
implementation of strategic economic development and community 
development plans.

Programs (Sec.  1980.1002)

    This section of the rule identifies the RD programs that the 
Secretary may elect to include for reserving funds for projects that 
support strategic economic development or community development plans. 
These programs are:
     Rural Community Facilities--community facility grants, 
guaranteed loans, and direct loans;
     Rural Utilities--water and waste disposal grants, 
guaranteed loans, and direct loans; and
     Rural Business and Cooperative Development--business and 
industry direct and guaranteed loans; and rural business development 
grants.

Applicability of Programs (Sec.  1980.1003)

    One of the requirements for a project to be eligible for Section 
6025 funds is that it meets the ``applicable eligibility requirements 
of this title;'' that is, the project must meet the applicable 
eligibility requirements for at least one of the programs identified 
within Section 6025 (referred to hereafter as the ``underlying 
program(s)'') and from which the funding is reserved. For example, if a 
project is seeking Section 6025 funds from Community Facility grants, 
the project must meet the applicant and project eligibility 
requirements of the underlying Community Facility program.
    It is also the intent of RD that all of the provisions of the 
underlying programs apply to applicants and their projects seeking 
funding under this subpart. These provisions include, but are not 
limited to, definitions, application requirements, and reporting, 
recordkeeping, and servicing requirements.
    Of particular note is the incorporation by reference of the 
definitions of ``rural area'' for the underlying programs. Section 6025 
requires a project seeking funding under this subpart to, in part, be 
``carried out solely in a rural area.'' In addition, Section 6025 
requires using the definitions of rural area for the underlying 
programs as defined in the applicable provisions of the Consolidated 
Farm and Rural Development Act, as amended. Rather than including a 
definition of ``rural area'' in this subpart, the applicable rural area 
definitions are incorporated by reference.
    Finally, in order to implement Section 6025, RD found it necessary 
to supplement certain provisions of the underlying programs. This 
section thus also indicates where certain provisions of the underlying 
programs have been supplemented.

Funding (Sec.  1980.1004)

    Section 6025 allows RD to reserve ``an amount that does not exceed 
10 percent of the funds made available for a fiscal year'' for the 
three ``functional categories''--Rural Community Facilities Category, 
Rural Utilities Category, and Rural Business and Cooperative 
Development Category. This section of the rule identifies how RD will 
implement the reservation of funds. Highlights of this section are:
     RD will reserve 10 percent of the funds appropriated each 
year to each underlying program, unless RD announces otherwise; and
     Any reserved funding not obligated by June 30 (or earlier 
if specified by RD) will be returned to the underlying program's 
regular funding account.
    The following paragraphs discuss these and other provisions 
associated with funding.
    Individual program reservation of funds. RD has determined that the 
language in Section 6025 allows it the flexibility to reserve funds on 
either a functional category basis or on an individual program basis. 
Specifically, Section 6025 refers to ``all amounts made available for'' 
and then lists two or more programs using the conjunction ``or'' to 
link them. For example, for the Rural Business and Cooperative 
Development Category, Section 6025 states (emphasis added), in part, 
made available for business and industry direct and guaranteed loans 
under section 310(B)a)(2)(A); or rural business development grants 
under section 310(B)(c).
    For ease of implementation at both the program level and the 
administration level, RD will reserve funds on an individual program 
basis. The rule allows RD to reserve funds on a basis other than an 
individual program basis. If RD elects to do so, RD will notify the 
public by publishing a notice.
    Which programs will participate each year? Unless RD decides 
otherwise, RD will reserve funds from each of the programs identified 
in Section 6025 each year. Section 6025 provides RD the flexibility to 
not reserve funds from a specific program in a given year. RD may 
decide not to reserve funding from a particular program for a variety 
of reasons, including, but not limited to, the amount of funds 
appropriated to an individual program in a given year. If RD makes such 
a decision, RD will announce in a notice which program(s) will not be 
included for that fiscal year.
    Percentage of funding reserved. Unless RD decides to set a lower 
percentage, RD will reserve each fiscal year 10 percent of the program 
level funding appropriated to the underlying programs. Section 6025 
states that RD may reserve ``an amount that does not exceed 10 percent 
of the funds made available for a fiscal year for a functional 
category,'' but the section does not prevent RD from reserving funds at 
a lower percentage.
    The primary factors that RD will take into account for determining 
whether to set a lower percentage for a program are (1) the funding 
level for that program for the upcoming fiscal year and (2) based on 
past experience, the level of demand for reserved funding for the 
program. For example, if the demand for reserved funding for a program 
is consistently less than 10 percent, RD would likely reduce the 
percentage it reserves for this priority funding.
    If RD decides to set a lower percentage, RD will announce in a 
notice the lower percentage(s) and for which program(s). Once the 
percentage to be used for a given fiscal year is determined, RD will 
not change that percentage so that the amount of funding reserved for 
each program will remain the same for the fiscal year.
    Unobligated reserved funds. Per Section 6025, the reservation of 
funds may only extend through June 30th of the fiscal year in which the 
funds were first made available. Therefore, the rule sets for each of 
the underlying programs June 30th as the ``default'' date by which a 
program's unobligated reserved funds will be returned to the underlying 
program's regular funding account. (Funds would go unobligated in 
instances where the funding requests for a program's reserved funds are 
less than the amount reserved for that program.)
    Section 6025, however, does not prohibit RD from establishing a 
date earlier than June 30th after which unobligated reserved funds are 
returned to the underlying program's account. RD may decide that an 
earlier date for a program is appropriate, for example, in order to 
coordinate the award of reserved funds with awards made for the 
underlying program. If RD elects to establish an earlier date, RD will 
announce in a notice the earlier date(s) and for which programs. This 
provision may result in programs having different dates for when 
unobligated reserved funds are returned to their respective underlying 
program's regular funding account. For example, the date for one

[[Page 28813]]

program may be June 30th while the date for another program is March 
31st.

Definitions (Sec.  1980.1005)

    This section identifies the definitions that apply to this subpart. 
It also incorporates by reference definitions from the underlying 
regulations, including as discussed earlier the definitions of ``rural 
area.'' Lastly, if a term is defined in this subpart and in one of the 
underlying subparts, it has the meaning as defined in this subpart for 
purposes of receiving funding under this subpart. Terms specific to 
this subpart are discussed below.
    Adopted. The statute requires ``applications involving State, 
county, municipal, or tribal governments shall include an indication of 
consistency with an adopted regional economic or community development 
plan.'' The primary consideration in defining ``adopted'' is that the 
appropriate entity has, or entities have, officially approved the plan 
for implementation. The appropriate entity or entities will vary among 
plans and may be, for example, a governing body or planning board.
    Carried out solely in a rural area. To be eligible for reserved 
funding, the statute requires that the project be ``carried out solely 
in a rural area.'' RD projects funded under programs included in this 
subpart already require some degree of ``rurality'' to the project or 
the services provided by the project. To ensure that a rural area 
project supporting a regional economic development or community 
development plan contributes to such a plan, RD is focusing on the 
phrase ``carried out solely'' to mean either one of the following:
     The entire project is physically located in a rural area 
or
     The beneficiaries of the service(s) provided through the 
project must either reside in a rural area (in the case of individuals) 
or be located in a rural area (in the case of entities).
    The first metric focuses on the physical location of the project 
and without regard as to who would benefit from the project. For 
example, a hospital built entirely in a rural area would be an eligible 
project regardless if it provides health care services to non-rural 
residents.
    The second metric focuses on where the beneficiaries of the 
services provided are located. For example, consider a project designed 
to provide water to residents of a rural area, but part of the project 
is located in a non-rural area and part of the project is located in a 
rural area. This project would not be an eligible project under the 
first metric (because part of the project is located in a non-rural 
area), but would be an eligible project under the second metric because 
the beneficiaries of the services (the individuals) reside entirely in 
a rural area. If, however, some of the beneficiaries reside in a non-
rural area, then this project would not be an eligible project under 
either metric.
    RD notes that projects must first be eligible under the appropriate 
underlying program in order to be considered eligible under this 
subpart. Then, the project must meet one of the two metrics established 
under this subpart. In most instances, meeting the underlying program's 
eligibility requirement will mean that the project already meets one or 
the other of these two metrics.
    Investment. Two criteria that the statute requires RD to take into 
consideration when evaluating a plan (see discussion on Scoring below) 
are investments from other Federal agencies and investments from 
philanthropic organizations. For purposes of this subpart, RD is 
defining investment to mean either monetary or non-monetary 
contributions because both types of contributions can be important 
components to implementing the plan, especially in communities with 
limited resources.
    Jurisdiction and multi-jurisdictional. The statute requires that a 
project support a community or economic development plan on a ``multi-
jurisdictional'' basis. To clarify how RD will consider this 
requirement, RD is first defining ``jurisdiction'' and then ``multi-
jurisdictional.''
    The principal component of ``jurisdiction'' is a unit of 
government, such as a State, Indian tribe, county, city, township, 
town, borough, etc. However, a plan is not always developed by, nor 
necessarily targeted at, such units of governments. For example, there 
are regional authorities, such as regional planning organizations, that 
may assist with developing and implementing regional economic 
development or community development plans. Thus, RD intends the 
definition of jurisdiction to be broad enough to take into account such 
entities.
    Using the definition of jurisdiction, RD is defining ``multi-
jurisdictional'' to mean more than one jurisdiction. This provides the 
broadest concept.
    Philanthropic organization. As noted earlier under Investment, one 
of the criteria for prioritizing plans is investment from philanthropic 
organizations. RD is seeking to implement a definition that is 
sufficient to include any entity whose mission is to provide monetary, 
technical assistance, or other items of value for religious; 
charitable; scientific; literary; or educational purposes. Such 
entities include, but are not limited to, private trusts, foundations, 
churches, and charitable organizations.
    Plan. As noted earlier in this preamble, the purpose of Section 
6025 is to fund projects that support the implementation of strategic 
economic development or community development plans.
    RD intends the definition of ``plan'' be inclusive rather than 
exclusive, but at the same time require the plan to address certain 
minimum elements in order to be effective in improving the economies of 
the region(s) addressed by the plan. RD examined plan requirements 
associated with other Federal agencies.
    For the purposes of this subpart, a plan is a comprehensive 
economic development or community development strategy that outlines a 
region's vision for shaping its economy. This strategy would cover, as 
appropriate and necessary, a wide range of aspects such as natural 
resources, land use, transportation, and housing. Such plans bring 
together key community stakeholders to create a roadmap to diversify 
and strengthen their communities and to build a foundation to create 
the environment for regional economic prosperity.
    To be an acceptable plan for the purposes of the subpart, the plan 
must be supported by the jurisdictions affected by the plan and must 
address each of the following elements:
     The economic conditions of the region;
     the economic and community strengths, weaknesses, 
opportunities, and threats for the region, to include consideration of 
such aspects as the environmental and social conditions;
     strategies and implementation plan that build upon the 
region's strengths and opportunities and resolve the weaknesses and 
threats facing the region;
     performance measures to evaluate the successful 
implementation of the plan; and
     support of key community stakeholders.
    RD notes that inclusion of each of the five elements does not speak 
to the quality of the plan (as discussed below under Scoring) or to 
whether the plan has been adopted (as discussed earlier under Adopted 
in the Definitions section of the preamble).
    Project. One of the eligibility criteria under this statute for 
projects seeking reserved funding under this subpart is

[[Page 28814]]

that the project meets the eligibility requirements of the underlying 
program. While the programs identify such eligibility requirements, 
they do not all contain a definition of a ``project.'' For this 
subpart, RD is providing a definition of project in broad terms to be 
``the eligible proposed use(s) for which funds are requested as 
described in the application material submitted to the Agency for 
funding under the underlying program.'' ``Eligible proposed uses(s)'' 
refers to those proposed uses that are eligible for funding under the 
underlying program. The intent of this definition is to cover the 
various types of projects eligible under the underlying programs.

Project Eligibility (Sec.  1980.1010)

    The statute identifies three criteria that a project must meet in 
order to be eligible for reserved funding. These criteria, which RD is 
implementing directly from the statute, are:
     The project must meet the project eligibility criteria of 
the applicable program identified in Sec.  1980.1002;
     The project must be carried out solely in a rural area; 
and
     The project must support the implementation of a strategic 
economic development or community development plan on a multi-
jurisdictional basis.
    The first criterion simply means that a project must meet the 
project eligibility criteria of the underlying program. For example, if 
a project is applying for reserved funds from the Community Facility 
Grant program, the project must meet the eligibility criteria for that 
program.
    For implementing the second criterion, RD is defining ``carried out 
solely in a rural area.'' See discussion under Definitions for more 
information.
    For the third criterion, RD is shortening the criterion to read 
``supports a plan on a multi-jurisdictional basis'' and is using the 
definition of ``plan'' to address the statute's ``strategic community 
and economic development plan.''

Applications (Sec.  1980.1015)

    The section of the rule identifies two main components as follows:
    1. Underlying Program Applications. Applicants must submit all of 
the application materials associated with the underlying program from 
which they are seeking reserved funding.
    2. Section 6025 Specific Application Information. Applicants must 
submit information that addresses several items specific to being 
eligible to apply under this subpart and to allow RD to score the 
project and the plan it supports (see Scoring section below). The 
following paragraphs identify what information an applicant must 
provide when seeking funding under this subpart. If the application for 
the underlying program already requests the same information, the 
applicant is not required to repeat that information.
    The applicant (Sec.  1980.1015(a)). In addition to basic 
information on the applicant (i.e., name, telephone, number, email 
address), this section also requires identification of whether the 
applicant includes a State, county, municipal, or tribal government. It 
is necessary to obtain this identification because there is a statutory 
requirement that applications involving such governmental entities must 
include an indication of consistency with an adopted regional economic 
or community development plan.
    The plan (Sec.  1980.1015(b)). An applicant is required to identify 
by name the plan being supported by the project, the date the plan 
became effective, and the dates the plan is to remain in effect. The 
applicant is also required to provide contact information for the 
appropriate entity(ies) who prepared the plan.
    As noted below in scoring, applications will be scored, in part, on 
the number of a plan's objectives that a project will directly support 
for implementing the plan. To enable RD to score an application in this 
regard, the applicant must provide from the most current version of the 
plan a list and description of each objective that the project will 
directly support. To provide this information, the applicant may submit 
copies of the relevant pages from the plan or their own list and 
descriptions.
    Applications will be also scored on the quality of the plan based 
on five criteria, as established in Section 6025--(1) collaboration, 
(2) regional resources, (3) investment from other Federal agencies, (4) 
investment from philanthropic organizations, and (5) clear objectives 
and the ability to establish measurable performance measures and track 
progress toward meeting the objectives. The Agency will evaluate each 
plan based on information provided by the applicant on each of these 
five criteria. Applicants may provide this information by submitting 
copies of the relevant pages from the plan or providing their own 
descriptions. In either case, failure to provide sufficient detail may 
result in a lower score for the application.
    Because the criterion for collaboration is based, in part, on the 
collaboration of stakeholders within the service area of the plan, the 
applicant is also required to describe the service area of the plan. 
Lastly, the applicant may provide, if available, a Web site address to 
the plan.
    While the applicant is not required to submit a copy of the entire 
plan, RD encourages the applicant to provide a copy of relevant 
portions of the plan to facilitate RD review and scoring of the project 
and the plan.
    The project (Sec.  1980.1015(c)). With regard to the project 
itself, the applicant is required to provide sufficient information on 
the project to enable RD to determine whether the project is ``carried 
out solely in a rural area'' as defined in this subpart. If the 
application material for the underlying program is sufficient to allow 
RD to make this determination, the applicant does not need to submit 
additional information. However, if it is not sufficient, the applicant 
must provide the necessary information showing that either the project 
will be physically located in a rural area or that the beneficiaries of 
the project's services either reside in (if an individual) or are 
located in (if an entity) a rural area.
    The applicant is also required to provide a detailed description of 
how the project directly supports one or more of the plan's objectives 
(which are identified by the applicant under the information being 
requested on the plan, see above). Failure to provide sufficient 
information to demonstrate direct support may result in a lower score 
for the application.
    Lastly, applicants that include a State, county, municipal, or 
tribal government must submit a letter from the appropriate entity(ies) 
who approved the plan (such as an elected or appointed official) 
certifying that the applicant's project is consistent with the plan and 
that the plan has been adopted.
    Agency Coordination (Sec.  1980.1015(d)). Applicants are required 
to submit certain information that will assist RD to coordinate the 
programs that provide funding to this subpart.
    1. Program areas. The applicant is required to identify the program 
area for which the applicant is seeking funds--community facility 
program area, the water and waste disposal program area, or the rural 
business and cooperative development program area. If an applicant 
submits an application seeking funds from more than one of these 
program areas, the applicant would identify each program area.
    2. Multiple applications. An applicant may submit more than one 
application in a fiscal year for funding under this subpart. For 
example, an applicant may submit three applications, one for each

[[Page 28815]]

of the three program areas. In this case, the applicant would identify 
in each application information on the other two applications. The 
information to be submitted is: The name(s) of the project(s), the 
program area(s) for which funds are being sought, and the dates that 
each application was submitted.
    An applicant may submit applications at different times of the 
fiscal year. For example, an applicant may submit an application in 
November of a fiscal year and then another application in March of that 
same fiscal year. In such instances, the applicant would only need to 
identify the November application when submitting the March 
application.
    3. Previous applications. If an applicant previously submitted one 
or more applications for funding under this subpart, the applicant is 
required to submit certain information in the current application 
concerning each of the previously submitted applications as follows:
     The date the previous application was submitted;
     The name of the project;
     The specific program area(s) from which funds were sought;
     Whether or not the project was selected for funding; and
     If the applicant received an award under this subpart, the 
specific program(s) that provided the funding; the date and amount of 
the award; and whether any of the funding came from funds reserved 
under this subpart.
    Approved applications. Section 6025(e)(1) includes provisions that 
allow applicants who submitted applications prior to the effective date 
of this subpart that were approved, but not funded, to revise their 
applications to apply for reserved funding. RD will issue guidance on 
how these applications are to be resubmitted under a notice published 
in the Federal Register at the appropriate time.

Scoring (Sec.  1980.1020)

    It is possible that the total amount of funds being requested by 
applicants for a particular program under this subpart may exceed the 
total reserved funds available for that program. To address this issue, 
RD will score projects on the basis of both the underlying program's 
scoring criteria, including discretionary points, and the scoring 
criteria, as described below, specific to this subpart.
    To rank applications competing for the reserved funding under this 
subpart, RD will score an application considering two sets of scoring 
criteria (in addition to the scoring criteria of the applicable 
underlying program): (1) The number of a plan's objectives that the 
project supports (maximum of 10 points) and (2) the plan itself based 
on the five criteria identified in Section 6025 (maximum of 10 points). 
The maximum number of ``Section 6025'' points that a project can 
receive is 20 points.
    Scoring how the project supports a plan (maximum score of 10 
points). RD will score a project's support for implementing the plan as 
follows:
     If the project directly supports implementation of three 
or more of the plan's objectives, the application will receive 10 
points.
     If the project directly supports implementation of two of 
the plan's objectives, the application will receive 5 points.
     If the project directly supports implementation of less 
than two of the plan's objectives, the application will receive no 
points.
    Scoring the plan supported by the project (maximum score of 10 
points). RD will also score the plan that the project supports. RD will 
use the five criteria identified in Section 6025 and as discussed 
below. RD will award two points for each criterion that a plan 
demonstrates. The Agency will award these points on the basis of what 
is contained in the application. Applicants are encouraged to submit 
the relevant pages of the most current version of the Plan to provide 
documentation of these criteria.
     Collaboration. If the plan was developed through the 
collaboration of multiple stakeholders in the service area of the plan, 
including the participation of combinations of stakeholders, such as 
State, local, and tribal governments, nonprofit institutions, 
institutions of higher education, and private entities, RD will award 
two points.
     Regional resources. If the plan demonstrates an 
understanding of the region's assets (including natural resources, 
human resources, infrastructure, and financial resources) that could 
support the plan, RD will award two points.
     Investment--other Federal agencies. If the development of 
the plan or the activities and actions taken to implement the plan 
include monetary or non-monetary contributions from Federal agencies 
other than USDA, RD will award two points.
     Investment--philanthropic organizations. If the plan 
includes monetary or non-monetary contributions from philanthropic 
organizations, RD will award two points.
     Objectives, measures, tracking. If the plan contains clear 
objectives, the ability to establish measurable performance measures, 
and the ability to track progress towards meeting the plan's 
objectives, RD will award two points.

Calculating an Application's Total Score

    RD will calculate an application's total score by summing the 
application's scores received from (1) the underlying program, (2) the 
two sets of scoring criteria under this subpart, and (3) any 
discretionary points that may awarded by the State Director or the 
Administrator under the provisions of the applicable underlying 
program. RD will give higher priority for the reserved funding to 
higher scoring applications, based on the combined score.

Award Process (Sec.  1980.1025)

    Unless RD indicates otherwise in a notice, the award process for 
the underlying program will be used to determine which projects receive 
funding under this subpart.
    In years where funding is made available under this subpart, if a 
project is not awarded funds under this subpart, it is still eligible 
to compete for funds through the underlying program. Such projects will 
be scored only according to the criteria in the underlying program 
including any discretionary points. Any points awarded through the 
Section 6025 scoring criteria will not be included when competing with 
other projects in the underlying program. However, in years where 
funding is not made available under this subpart, projects are still 
eligible to compete for funding under the applicable underlying 
program. The scores for such projects when competing for underlying 
program funding will include the score assigned to the application 
under Sec.  1980.1020(b) as described in a notice published in the 
Federal Register. The Agency intends to prioritize such applications in 
this manner even if it chooses not to reserve funds in a particular 
year as permitted by statute.

Evaluation of Project Information (Sec.  1980.1026)

    An applicant that receives funding under this subpart is required 
to submit to the Agency information on the project's measures, metrics, 
and outcomes to the appropriate entity(ies) monitoring the 
implementation of the plan. Applicants would submit this information to 
the Agency for as long as the plan is in effect.

III. Invitation To Comment

    RD encourages interested persons and organizations to submit 
written

[[Page 28816]]

comments, which may include data, suggestions, or opinions. Commenters 
should include their name, address, and other appropriate contact 
information. If persons with disabilities (e.g., deaf, hard of hearing, 
or have speech difficulties) require an alternative means of receiving 
this notice (e.g., Braille, large print, audiotape) in order to submit 
comments, please contact USDA's TARGET Center at (202) 720-2600 (voice 
and TDD).
    Comments may be submitted by any of the means identified in the 
ADDRESSES section. If comments are submitted by mail or hand delivery, 
they should be submitted in an unbound format, no larger than letter-
size, suitable for copying and electronic filing. If confirmation of 
receipt is requested, a stamped, self-addressed, postcard or envelope 
should be enclosed. RD will consider all comments received during the 
comment period and will address comments in the preamble to the final 
regulation.

List of Subjects in 7 CFR Part 1980

    Agriculture, Business and industry, Community facilities, Credit, 
Disaster assistance, Livestock, Loan programs--agriculture, Loan 
programs--business, Loan programs--housing and community development, 
Low and moderate income housing, Reporting and recordkeeping 
requirements, Rural areas.

    For the reasons set forth in the preamble, 7 CFR part 1980 is 
amended as follows:

PART 1980--GENERAL

0
1. The authority citation for part 1980 continues to read as follows:

    Authority:  5 U.S.C. 301, 7 U.S.C. 1989


0
2. Subpart K is added to read as follows:
Subpart K--Strategic Economic and Community Development

GENERAL

Sec.
1980.1001 Purpose.
1980.1002 Programs.
1980.1003 Applicability of Program Regulations.
1980.1004 Funding.
1980.1005 Definitions.
1980.1006-1980.1009 [Reserved]
1980.1010 Project eligibility.
1980.1011-1980.114 [Reserved]
1980.1015 Applications.
1980.1016-1980.1019 [Reserved]
1980.1020 Scoring.
1980.1021-1980.1024 [Reserved]
1980.1025 Award process.
1980.1026 Evaluation of Project information.
1980.1027-1980.1100 [Reserved]


Sec.  1980.1001  Purpose.

    The purpose of this subpart is to give priority to Projects that 
support implementation of strategic economic development and community 
development plans on a Multi-jurisdictional basis for applications 
submitted for the programs identified in Sec.  1980.1002.


Sec.  1980.1002  Programs.

    The Agency may elect to reserve funds from one or more of the 
programs listed in paragraphs (a) through (h) of this section.
    (a) Community Facility Loans (7 CFR part 1942, subpart A).
    (b) Fire and Rescue and Other Small Community Facilities Projects 
(7 CFR part 1942, subpart C).
    (c) Community Facilities Grant Program (7 CFR part 3570, subpart 
B).
    (d) Community Programs Guaranteed Loans (7 CFR part 3575, subpart 
A).
    (e) Water and Waste Disposal Programs Guaranteed Loans (7 CFR part 
1779).
    (f) Water and Waste Loans and Grants (7 CFR part 1780, subparts A, 
B, C, and D).
    (g) Business and Industry Guaranteed Loanmaking and Servicing (7 
CFR part 4279, subparts A and B; 7 CFR part 4287, subpart B).
    (h) Rural Business Development Grants (7 CFR part 4280, subpart E).


Sec.  1980.1003  Applicability of Program Regulations.

    Except as supplemented by this subpart, the provisions of the 
programs identified in Sec.  1980.1002 are incorporated into this 
subpart.


Sec.  1980.1004  Funding.

    Unless the Agency publishes a notice that indicates otherwise, the 
Agency will reserve funds according to the procedures specified in 
paragraphs (a) through (c) of this section for each of the programs 
identified in Sec.  1980.1002 each fiscal year.
    (a) Individual program basis. The Agency will reserve funds on an 
individual program basis.
    (b) Percentage of funds. The Agency will reserve 10 percent of the 
funds made available in a fiscal year to each program identified in 
Sec.  1980.1002 unless the Agency specifies a different percentage. If 
the Agency specifies a different percentage, the Agency will publish a 
notice indicating the percentage. The Agency may reserve the same or 
different percentages for each program in a single fiscal year.
    (c) Unobligated funds. If a program's funds reserved under this 
subpart remain unobligated as of June 30 of the fiscal year in which 
the funds are reserved, the Agency will return such remaining funds to 
that program's regular funding account for obligation for all eligible 
Projects in that program.


Sec.  1980.1005  Definitions.

    In addition to the definitions found in the regulations for the 
programs identified in Sec.  1980.1002, the following definitions apply 
to this subpart. If the same term is defined in any of the regulations 
for the programs identified in Sec.  1980.1002, for purposes of this 
subpart, that term will have the meaning identified in this subpart.
    Adopted means that a Plan has been officially approved for 
implementation by the appropriate entity or entities in the 
Jurisdiction(s) affected by the Plan (for example, a State, Indian 
Tribe, county, city, township, town, borough, etc.).
    Agency means the Rural Business-Cooperative Service, the Rural 
Housing Service, or the Rural Utilities Service, or their successor 
agencies.
    Carried Out Solely in a rural area means either:
    (1) The Project is physically located in a rural area; or
    (2) All of the beneficiaries of the services provided by the 
Project either reside in a rural area (for individuals) or are located 
in a rural area (for businesses).
    Investment means either monetary or non-monetary contributions to 
the implementation of the Plan's objectives.
    Jurisdiction means a unit of government or other entity with 
similar powers. Examples include, but are not limited to: City, county, 
district, special purpose district, township, town, borough, parish, 
village, State, and Indian tribe.
    Multi-Jurisdictional means at least two Jurisdictions.
    Philanthropic organization means an entity whose mission is to 
provide monetary, technical assistance, or other items of value for 
religious, charitable, scientific, literary, or educational purposes.
    Plan means a comprehensive economic development or community 
development strategy that outlines a region's vision for shaping its 
economy, and includes, as appropriate and necessary, consideration of 
such aspects as natural resources, land use, transportation, and 
housing. Such Plans bring together key community stakeholders to create 
a roadmap to diversify and strengthen their communities and to build a 
foundation to create the environment for regional economic prosperity. 
To be acceptable under this subpart, the Plan must be

[[Page 28817]]

vetted and supported by the Jurisdictions affected by the Plan and must 
contain at a minimum the following:
    (1) A summary of the economic conditions of the region;
    (2) An in-depth analysis of the economic and community strengths, 
weaknesses, opportunities, and threats for the region, to include 
consideration of such aspects as the environmental and social 
conditions;
    (3) Strategies and implementation Plan to build upon the region's 
strengths and opportunities and to resolve the weaknesses and threats 
facing the region;
    (4) Performance measures that evaluate the successful 
implementation of the Plan's objectives; and
    (5) Support of key community stakeholders.
    Project means the eligible proposed use(s) for which funds are 
requested as described in the application material submitted to the 
Agency for funding under the underlying program.


Sec. Sec.  1980.1006-1980.1009   [Reserved]


Sec.  1980.1010  Project eligibility.

    In order to be eligible to receive funds under this subpart, the 
Project must meet the following:
    (a) The Project must meet the Project eligibility criteria of the 
applicable program identified in Sec.  1980.1002;
    (b) The Project must be Carried Out Solely in a rural area; and
    (c) The Project must support the implementation of a Plan on a 
Multi-Jurisdictional basis.


Sec. Sec.  1980.1011-1980.1014   [Reserved]


Sec.  1980.1015  Applications.

    In addition to the application material specific to the applicable 
program identified in Sec.  1980.1002, each applicant seeking funding 
under this subpart must provide the information specified in paragraphs 
(a) through (d) of this section.
    (a) Applicant. The applicant must submit:
    (1) Name of the applicant;
    (2) Telephone number of the applicant;
    (3) Email address of the applicant; and
    (4) A statement indicating whether or not the applicant is or 
includes one of the following:
    (i) State government;
    (ii) County government;
    (iii) Municipal government; or
    (iv) Tribal government.
    (b) Plan. Each application must include the following information:
    (1) The name of the Plan the Project supports;
    (2) The date the Plan became effective;
    (3) The dates the Plan is to remain in effect;
    (4) Contact information for the entity(ies) approving the Plan, 
including name(s), telephone number(s), and email address(es);
    (5) As found in the most current version of the Plan, the name and 
description of each objective that the Project will directly support;
    (6) A description of the service area of the Plan;
    (7) Documentation that the Plan was developed through the 
collaboration of multiple stakeholders in the service area of the Plan, 
including the participation of combinations of stakeholders;
    (8) Documentation that the Plan demonstrates an understanding of 
the applicable region's assets that could support the Plan;
    (9) Documentation indicating whether or not the Plan includes 
monetary or non-monetary contributions from Federal agencies other than 
the U.S. Department of Agriculture;
    (10) Documentation indicating whether or not the Plan includes 
monetary or non-monetary contributions from one or more Philanthropic 
organizations.
    (11) Documentation that the Plan contains:
    (i) Clear objectives and
    (ii) The ability to establish measurable performance measures and 
to track progress towards meeting the Plan's objectives; and
    (12) If available, a Web site address link to the Plan.
    (c) Project. Each application must include the following 
information:
    (1) The name of the Project;
    (2) Sufficient detail to allow the Agency to determine that the 
Project has been Carried Out Solely in a rural area as defined in Sec.  
1980.1005;
    (3) A detailed description of how the Project directly supports 
each objective identified under paragraph (b)(5) of this section; and
    (4) If the application is from an applicant that includes a State, 
county, municipal, or tribal government, a letter from the appropriate 
entity(ies) indicating that:
    (i) The Project is consistent with the Plan and
    (ii) The Plan has been Adopted.
    (d) Agency coordination. To help ensure coordination among the 
programs included in this subpart, the Agency is requiring applicants 
provide the Agency the information in paragraphs (d)(1) through (3) of 
this section.
    (1) Program areas. Identify the program area(s) (i.e., Community 
Facilities, Water and Waste, Rural Business and Cooperative 
Development) from which funds are being sought.
    (2) Multiple applications. If the applicant is submitting in the 
same fiscal year more than one application for funding under this 
subpart, identify in each application the other application(s) by 
providing:
    (i) The name(s) of the Project(s);
    (ii) The program area(s) for which funds are being sought; and
    (iii) The date that each application was submitted to the Agency.
    (3) Previous applicants. If the applicant has previously submitted 
one or more applications for funding under this subpart, the applicant 
must provide in the current application the following information for 
each previous application:
    (i) The date the application was submitted;
    (ii) The name of the Project;
    (iii) The program area(s) from which funds were sought;
    (iv) Whether or not the Project was selected for funding; and
    (v) If the Project was selected for funding,
    (A) The name(s) of the specific program(s) that provided the 
funding;
    (B) The date and amount of the award; and
    (C) Whether any of the funding came from the funds reserved under 
this subpart.


Sec. Sec.  1980.1016-1980.1019  [Reserved]


Sec.  1980.1020  Scoring.

    The Agency will score each eligible application seeking funding 
under this subpart as described in this section.
    (a) Underlying program scoring. The Agency will score each 
application using the criteria for the applicable program identified in 
Sec.  1980.1002. The maximum number of points an application can 
receive under this paragraph is based on the scoring criteria for the 
applicable underlying program, including any discretionary points that 
may be awarded.
    (b) Section 6025 scoring. The Agency will score each application 
using the criteria identified in paragraphs (b)(1) and (2) of this 
section. The maximum number of points an application can receive under 
this paragraph is 20 points.
    (1) Project's direct support of a Plan's objectives. The Agency 
will score each application on the basis of the number of a Plan's 
objectives the Project directly supports. The maximum score under this 
paragraph is 10 points.
    (i) If the Project directly supports implementation of 3 of the 
Plan's objectives, 10 points will be awarded.

[[Page 28818]]

    (ii) If the Project directly supports implementation of 2 of the 
Plan's objectives, 5 points will be awarded.
    (iii) If the Project directly supports implementation of less than 
2 of the Plan's objectives, no points will be awarded.
    (2) Characteristics of a Plan. The Agency will score the Plan 
associated with a project based upon the characteristics of the Plan, 
which are identified in paragraphs (b)(2)(i) through (v) of this 
section. Applicants must supply sufficient documentation that 
demonstrates to the Agency the criteria identified in paragraphs 
(b)(2)(i) through (v) of this section. The maximum score under this 
paragraph is 10 points.
    (i) Collaboration. If the Plan was developed through the 
collaboration of multiple stakeholders in the service area of the Plan, 
including the participation of combinations of stakeholders, such as 
State, local, and tribal governments, nonprofit institutions, 
institutions of higher education, and private entities, two points will 
be awarded.
    (ii) Resources. If the Plan demonstrates an understanding of the 
applicable regional assets that could support the Plan, including 
natural resources, human resources, infrastructure, and financial 
resources, two points will be awarded.
    (iii) Other Federal Agency Investments. If the Plan includes 
Investments from Federal agencies other than the U.S. Department of 
Agriculture, two points will be awarded.
    (iv) Philanthropic organization Investments. If the Plan includes 
Investments from Philanthropic organizations, two points will be 
awarded.
    (v) Objectives and performance measures. If the Plan contains clear 
objectives and the ability to establish measurable performance measures 
and to track progress toward meeting the objectives, two points will be 
awarded.
    (c) Total score. The Agency will sum the scores each application 
receives under paragraphs (a) and (b) of this section in order to rank 
applications.


Sec. Sec.  1980.1021-1980.1024  [Reserved]


Sec.  1980.1025  Award process.

    (a) Unless RD indicates otherwise in a notice, the award process 
for the applicable underlying program will be used to determine which 
Projects receive funding under this subpart.
    (b) In years when funding is made available under this subpart, 
Projects not receiving funding under this subpart are eligible to 
compete for funding under the applicable underlying program. The scores 
for such Projects when competing for underlying program funding will 
not include the score assigned to the application under Sec.  
1980.1020(b).
    (c) In years when funding is not made available under this subpart, 
Projects are eligible to compete for funding for the applicable 
underlying program. The scores for such Projects when competing for 
underlying program funding will include the score assigned the 
application Sec.  1980.1020(b) as described in a notice published in 
the Federal Register.


Sec.  1980.1026  Evaluation of Project information.

    To assist the Agency in evaluating the effectiveness of this 
subpart, each applicant that receives funding under this subpart must 
submit to the Agency all measures, metrics, and outcomes of the Project 
that are reported to the entity(ies) who are monitoring Plan 
implementation. This information will be submitted for as long as the 
Plan is in effect.


Sec. Sec.  1980.1027-1980.1100  [Reserved]

    Dated: May 12, 2015.
Lisa Mensah,
Under Secretary, Rural Development.
    Dated: May 15, 2015.
Michael Scuse,
Under Secretary, Farm and Foreign Agricultural Services.
[FR Doc. 2015-12163 Filed 5-19-15; 8:45 am]
 BILLING CODE 3410-XY-P