[Federal Register Volume 64, Number 239 (Tuesday, December 14, 1999)]
[Rules and Regulations]
[Pages 69868-69881]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32024]
[[Page 69867]]
_______________________________________________________________________
Part IV
Department of Commerce
_______________________________________________________________________
Economic Development Administration
_______________________________________________________________________
13 CFR Parts 300, 301, et al.
Revision to Implement Economic Development Administration Reform Act of
1998; Final Rule
Federal Register / Vol. 64, No. 239 / Tuesday, December 14, 1999 /
Rules and Regulations
[[Page 69868]]
DEPARTMENT OF COMMERCE
Economic Development Administration
13 CFR Parts 300, 301, 302, 303, 304, 305, 306, 307, 308, 314, 316,
317, and 318
[Docket Nos. 990106003-9169-03 and 980813217-9141]
RIN 0610-AA56 and 0610-AA59
Revision To Implement Economic Development Administration Reform
Act of 1998
AGENCY: Economic Development Administration (EDA), Commerce.
ACTION: Final rule.
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SUMMARY: The Economic Development Administration (EDA) has amended its
regulations to implement the comprehensive amendment to the Public
Works and Economic Development Act of 1965, as amended, by the Economic
Development Administration Reform Act of 1998. EDA has clarified and
simplified requirements and incorporated into the body of the rules,
requirements unique to EDA for construction projects previously
appearing in the EDA regulations and EDA's Civil Rights Guidelines.
EFFECTIVE DATE: This rule is effective on December 14, 1999.
FOR FURTHER INFORMATION CONTACT: Edward M. Levin, Chief Counsel,
Telephone Number 202-482-4687, fax 202-482-5671, e-mail elevin@doc.gov
SUPPLEMENTARY INFORMATION:
Background
The Economic Development Administration (EDA) was reauthorized for
a five-year period by legislation enacted on November 13, 1998,
creating stability and opportunities for EDA to better serve
economically distressed communities across the country. On February 3,
1999, EDA published an interim-final rule, Economic Development
Administration Regulation: Revision to Implement the Economic
Development Reform Act of 1998 (64 FR 5347-5486).
EDA continues to take steps toward improving its program delivery,
policies and procedures, and to be more responsive to those whom it
serves. In step with the National Performance Review and Paperwork
Reduction Act, EDA had completely revised its regulations, thereby
creating fewer burdens on and making them more accessible to the
public. This final rule continues EDA's efforts in this regard.
The public was invited to submit comments on the interim-final rule
for a period of sixty (60) days ending April 5, 1999.
Comments on the Interim-Final Rule
Comments on the RLF Task Force:
As noted in the preamble to the interim-final rule, EDA established
a Task Force to examine its Revolving Loan Fund (RLF) program. Though
EDA received several comments on EDA's RLF program, we will not be
addressing such comments now, but will do so in an interim final rule
to be published by the end of December, 1999, consistent with the
report and recommendations of the EDA FLF Task Force.
Comments on the Plain English Initiative:
A commenter suggested that we use the question and answer format in
13 CFR 304.1 and 2, project selection process and evaluation criteria.
We concur and have changed the rule on selection and evaluation
accordingly. EDA continues its efforts to use plain language throughout
the final rule, with particular attention to areas where commenters
have requested clarification or interpretation.
Paperwork Reduction Act:
No individual or entity commented on the Paperwork Reduction Act
burden hour statement in the interim-final rule.
Comments on Regulatory Text:
EDA received comments from more than forty (40) persons and
entities. Responses include additional modifications resulting from
matters inadvertently overlooked by EDA in the promulgation of its
interim-final rule. All comments and responses refer to subparts,
sections and paragraphs as numbered in this final rule.
Definitions.
Commenters suggested that for simplicity ``CED Strategy'' be
deleted to be replaced by the acronym ``CEDS.''
We concur and have modified 13 CFR 300.2 and references throughout
the rule to replace ``CED Strategy'' with ``CEDS''.
Commenters recommended that 13 CFR 300.2 be amended to reinstate
the term ``Overall Economic Development Program'' or ``OEDP'' since
these terms are easily understood and accepted, whereas the term
``Comprehensive Economic Development Strategy'' (or ``CEDS'') may be
confusing.
EDA does not concur because the rule as written reflects the
language used in PWEDA. The Economic Development Administration Reform
Act of 1998 replaced the Overall Economic Development Program with the
Comprehensive Economic Development Strategy. We believe the new
terminology will be readily understood and accepted.
A commenter suggested that the definition of ``Eligible applicant''
in 13 CFR 300.2 be revised to include special purpose units of local
governments.
We have not changed 13 CFR 302.2, because special purpose units of
local governments are already included in the definition of eligible
applicants as political subdivisions of States. However, to distinguish
between general purpose and special purpose units of local governments,
and incidently confirm that special purpose units of local government
are included as political subdivisions of States, we have changed 13
CFR 301.1(b) to provide that cooperation resolutions or letters for
non-profit or for-profit applicants must be from authorized
representatives of general purpose units of local governments.
A commenter suggested that the definition of ``Eligible applicant''
in 13 CFR 300.2 be revised to include Community Development
Corporations (CDCs) and to exempt CDCs from the requirement for a
resolution or letter of cooperation under 13 CFR 301.1(b).
We do not concur with the first part of this suggestion because it
is apparent that CDCs are nonprofit organizations and as such they are
eligible for EDA assistance. As to the second part, after careful legal
analysis we have concluded that the cooperation requirement for non-
profits applies to CDCs and that the rule as now written is in
accordance with requirements under PWEDA.
A commenter suggested a definition be added for ``Federally-
declared disaster.''
We concur and have changed 13 CFR 300.2 to add such a definition.
A commenter suggested that the definition of ``Overall Economic
Development Program'' or ``OEDP'' be removed as unnecessary.
EDA concurs, since the Civil Rights provisions in 13 CFR part 317
(the only place in the interim-final rule where the term OEDP appeared)
have been changed to refer to CEDS, instead of to OEDP. We have revised
13 CFR 300.2 to remove such definition.
Commenters suggested that a definition be added for
``Presidentially-declared disaster.''
We concur and have changed 13 CFR 300.2 to add such definition.
Area eligibility.
A commenter recommended that 13 CFR 301.2 and 301.4(b) be modified
so that ``projected'' unemployment or low income could be used to
determine eligibility and/or grant rates.
[[Page 69869]]
We determined that this was unnecessary as to eligibility, because
the special needs criteria in EDA's NOFA is adequate to qualify areas
of significant anticipated unemployment or low income. As to grant
rates, we examined the practicality and policy implications of the
suggestion and determined that it would be difficult if not impossible
to make reliable distress projections. Consequently, we have not
modified the regulation.
A commenter recommended that 13 CFR 301.2(e) be amended to define
what is meant by ``significant'' employment opportunities and what the
impact must be to qualify as an eligible non-distressed area.
Determining significant employment opportunities and the level of
impact to qualify as an eligible non-distressed area are decisions that
EDA officials will have to make on a case-by-case basis in light of the
narrative and supporting material provided by the applicant. While we
appreciate that the term is not precise, in the real world application
of eligibility criteria it is evident that applying a numerical or
other specific quantifiable standard would not add to the utility or
clarity of the criteria, given the variety of situations and the
differing contexts of the data. Consequently, we have not modified the
regulation.
Commenters suggested that unemployment and per capita income data
below the county level should be available via special community
surveys to establish eligibility of sub-county areas and pockets of
distress. A commenter suggested that for ``special needs'', EDA allow
applicants to submit other data, as appropriate.
After discussion and consideration of this suggestion, we have
clarified 13 CFR 301.2(e) by adding that State data is that which is
conducted by or at the direction of the State government. We concur
with the suggestion on ``special needs'' and consequently have modified
13 CFR 301.2(h).
A commenter suggested that the reference to future publication in a
NOFA of special needs criteria be changed to the present tense.
We concur and have modified the rule accordingly.
A commenter suggested correction of a typographical error appearing
in a parenthetical phrase under Economic Adjustment planning
requirements by changing ``i.e.'' before the word ``strategy'' to
``e.g.'' since the intent was to provide an example of planning
activities.
We concur and have changed 13 CFR 301.3(a) accordingly.
Strategy required.
Commenters suggested that we reconcile inconsistencies in CEDS
requirements by using the same requirements throughout the rule.
We concur and have changed the rule accordingly so that 13 CFR
303.3 contains the CEDS requirements, which apply to CEDS for Public
Works and Economic Adjustment Projects, for district designation, and
for continuation planning funding for districts and other EDA supported
planning organizations. 13 CFR 303.2 contains additional reporting and
updating requirements for districts and other EDA supported planning
entities. 13 CFR 301.3(b) and 308.4(b) have been changed to refer to
requirements under 13 CFR 303.3.
Commenters suggested that the requirement that a strategy be
approved by an applicant for a public works or economic adjustment
project be changed so that the strategy may be approved by the entity
developing the strategy or by the applicant. In the case of a CEDS
approved by a State official, it was suggested approval should be by
the governor or his/her designee, instead of by the applicant's
governing body (i.e., the legislature).
We concur and have revised 13 CFR 301.3(d) accordingly.
Commenters suggested that 13 CFR 301.3 be revised to state that a
strategy developed by an entity within the boundaries of the district
but not by the district organization itself, be subject to approval by
the district organization. Other commenters suggested that the rule be
revised to provide that district organizations be given an opportunity
to review and comment on strategies within their districts.
District organizations are major partners with EDA in providing
economic development assistance, with expertise in the economic
development needs and planning process for the district area.
Therefore, we concur with the suggestion that districts have an
opportunity to review and comment on such non-district strategies.
Consequently, we have amended 13 CFR 301.3 to provide that districts
will have a 30-day period within which to review and comment upon such
strategies. We do not however, concur with the recommendation for
approval of such strategies by the districts, since the approval of
strategies is the responsibility of EDA under PWEDA.
A commenter suggested that sub-county areas be required to utilize
a county level CEDS and that a single representative entity within the
county act as applicant for assistance to the sub-county area.
We believe this suggestion is in conflict with the provisions of
PWEDA (sections 301(b) and 302(a)) that authorize sub-county areas to
be applicants for EDA assistance, and authorize applicants to submit
CEDS, without restrictions as to the area covered by the CEDS.
Consequently, we have not modified 13 CFR 301.3.
Grant Rates.
On June 18, 1999, EDA published an interim-final rule with changes
in the grant rate table in 13 CFR 301.4(b) covering criteria for
maximum grant rate eligibility based on disasters and unemployment
rates. For an explanation of such changes and the text of the grant
rate table, please see 64 FR 32973. No other changes are being made to
the grant rate table in 13 CFR 301.4(b).
Commenters suggested clarifying the rule to add language stating
that maximum grant rates for projects supporting ongoing operations of
districts or university centers could be found in 13 CFR parts 306 and
307.
We concur and have changed 13 CFR 301.4(c) accordingly.
Commenters suggested that language be clarified stating that
University Center projects under part 307 subpart B and district
organizations are not eligible for the 10% incentive.
We concur and have modified 13 CFR 301.4(d) accordingly.
Commenters suggested that the district incentive in 13 CFR 301.4(d)
should only be awarded for projects included in a list in the
district's CEDS in order to encourage consistency with district CEDS
and deference to the districts.
We do not concur since language in the rule, as modified,
accurately reflects PWEDA's intent to encourage active participation
with the district.
A commenter recommended that 13 CFR 301.4(e)(2) (maximum grant
rates when EDA and another Federal agency are funding a project), be
either clarified or deleted.
This rule on supplementary grant assistance for construction is
consistent with language in PWEDA, and therefore should not be deleted.
Moreover, we were unable to find a clearer way of explaining the grant
rates and believe they are clear as presented. We considered including
an example, but did not believe it was necessary. If we can clarify
this provision in the future, we will do so by amending the rule as
appropriate.
Commenters suggested that 13 CFR 301.4(e) on supplemental grants be
broadened to include non-construction as well as construction projects.
We do not concur because EDA's authorizing legislation is different
from
[[Page 69870]]
that of other agencies. The rule as now written accurately reflects
PWEDA which limits the supplementary grant provisions to projects for
construction or equipping of public works, public service, or
development facilities. Note however, that PWEDA has cooperation and
fund transfer authorities which apply to all programs under the Act.
A commenter suggested a reduction in the non-Federal share for
infrastructure and planning awards comparable to those under HUD and
USDA Rural Development initiatives.
We do not concur because the rule as now written provides for
reductions in the non-Federal share match if certain criteria are met
in accordance with PWEDA.
Economic Development Districts.
Commenters suggested that 13 CFR 302.3(c)(3) be modified to provide
for greater flexibility in district organization, e.g., eliminate the
requirement that 20 percent of the district organization be composed of
private citizens.
EDA considered removing the 20 percent private citizen requirement
and determined that EDA's long standing requirements for grass roots
broad-based community planning has been successful historically and
should be continued to carry out the agency's mission.
A commenter suggested that we substitute 60 days for 30 days as the
time period for prior written notice of termination or suspension of
district status, and to clarify that such notice will be provided to
the district organization, member counties or other areas and each
affected State.
We concur and have changed 13 CFR 302.6 accordingly.
A commenter suggested that the rule be modified to remove language
requiring the approval of the State or States affected when the
district has asked for termination.
We concur and have changed 13 CFR 302.6(c) accordingly.
Planning Process for District and Other Planning
Organizations Supported by EDA.
Commenters suggested that language in 13 CFR 303.2(e) be revised to
provide that strategies prepared by districts should not be required to
have the concurrence of States, some suggesting that States be given
the opportunity to review, but not approve such strategies, (others
suggested that the rule be clarified to explain the role of States in
the review/approval process, or that strategies be submitted to the
States for information purposes only).
We agree that it is inappropriate for States to be given veto power
over EDA approval of district strategies, particularly as States had to
have requested designation of districts in the first instance.
Consequently, we have deleted the provision in 13 CFR 303.2(e) calling
for concurrence by the States and added instead, that States have 30
days within which to comment on strategies developed by districts
within their boundaries.
Commenters suggested that CEDS requirements be modified to include
a statement about the continuing nature of such process, that the
strategy be developed with broad-based and diverse community
participation, that the strategy background section be changed to
require the inclusion of the listed factors only ``as appropriate'',
and require the inclusion, as appropriate, of a discussion of
infrastructure and transportation systems.
We concur and have changed 13 CFR 303.3 accordingly.
General Selection Process and Evaluation Criteria.
A commenter suggested that personal pronouns be used to explain to
interested parties how to make contact with the agency for information
on proposals and applications.
We concur and have changed 13 CFR 304.1 accordingly.
Commenters suggested that provisions referring to additional
criteria or priority consideration factors as being included in a NOFA
be moved from other parts of the rule to the part on selection and
evaluation because of the general applicability of these criteria. A
commenter made a similar suggestion about provisions requiring ``a
reasonable budget''.
We concur with both suggestions and have changed 13 CFR 304.1 (c)
and 304.2 accordingly.
A commenter suggested that 13 CFR part 304 be modified to contain
more flexible organizational requirements and performance based
criteria.
EDA considers district organization criteria to be an integral part
of the district program's effectiveness in grass-roots planning and
implementation to meet the needs of the entire area served by each
district. Consequently, we have not modified district organizational
requirements. Performance based criteria are addressed in 13 CFR 316.18
and 318.2.
Grants for Public Works and Development Facilities.
Commenters suggested that the appendix containing construction
requirements be removed from the rule and that the rule itself contain
those requirements that are specific to EDA. A commenter suggested that
the rules be organized to accurately reflect the grant process for
public works projects.
We concur and have removed Appendix A, Requirements for
Construction Grants; we have revised, added to, reordered, and renamed
13 CFR 305.5-26 accordingly, without providing any additional
requirements.
A commenter recommended including a provision offering a ``bonus''
for minority firms for construction projects.
PWEDA provides no statutory authority for such a bonus.
Consequently, we have not modified the rule.
Planning Assistance.
Commenters suggested that 13 CFR 306 be revised to state that
districts are EDA's primary planning grant recipients.
Though districts have been and are likely to remain EDA's primary
planning grant recipients, PWEDA does not limit eligible planning grant
recipients to districts. Consequently, we have not made the suggested
modification. Nevertheless, as noted below, we have distinguished
between district organizations and other planning grantees in the
determination of maximum grant rates.
Some commenters suggested that districts be eligible for the 75
percent Federal grant rate if they meet any one of the four listed
criteria, instead of having to meet all four criteria; other commenters
suggested that the maximum grant rate eligibility provision be revised
to delete the four criteria and to provide instead that the maximum
Federal grant rate is a flat 75 percent.
We do not concur with the suggestions as presented, because they
exceed the authority in PWEDA for increasing the maximum grant rate (to
more than 50 percent). We have clarified the provisions in 13 CFR 306.3
to state that districts may supplement the 50 percent grant rate if
(and only if) they meet the criteria in 13 CFR 306.3(b). We have
modified the rule so that districts are not eligible to supplement a 50
percent grant using the table in 13 CFR 301.4(b), because districts are
unique as multi-jurisdictional organizations made up primarily of
governmental entities. Also, for additional clarity, we have changed
language in 13 CFR 306.3(b)(3)(i) and (ii) to substitute ``high
unemployment'' for ``substantial unemployment'', to delete
``significantly'' to describe low per capita income and to substitute
``significant'' for ``substantial'' when describing activities
addressing the needs of the most economically distressed parts of the
applicant's area to be served. We have also modified 13
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CFR 306.3(b)(1) to provide that non-district planning applicants are
eligible for supplemental grant awards if (and only if) they meet the
criteria in the table in 13 CFR 301.4(b). Non-district applicants
cannot use the four criteria of 13 CFR 306.3(b)(2) to supplement the 50
percent grant rate.
A commenter suggested that the rule on district incentives be
clarified to explain that districts should not be rewarded with a 10
percent incentive for acting in cooperation with themselves, and should
not therefore be eligible for the incentive.
We concur and have changed 13 CFR 301.4(d) and 306.3(b)(4)
accordingly. We have provided that projects may be eligible for the
incentive, so long as the non-district co-applicant is qualified to
obtain the incentive, even if a district is a co-applicant.
Commenters suggested that the sections in the rule titled ``Award
conditions'' be renamed more appropriately as ``Post-approval
requirements'.
We concur and have changed 13 CFR 305.6, 306.4, 307.4, and 307.8
accordingly.
Local Technical Assistance.
Commenters suggested that reporting requirements be moved to the
section on post-award requirements.
We concur and have moved reporting requirements to 13 CFR 307.4.
Commenters suggested that award and grant rate requirements be
clarified to provide how the maximum Federal grant rate can be
supplemented ``up to and including 100 percent'.
We concur and have added 13 CFR 307.3(c)(4) to provide for a grant
rate up to and including 100 percent with the concurrence of the
Assistant Secretary.
A commenter suggested clarification on the 10 percent incentive
rule to state more directly that Local Technical Assistance applicants
receiving a supplemental grant under 13 CFR 307.3(c)(2) are not
eligible to receive a 10 percent incentive.
We concur and have changed 13 CFR 13 CFR 307.3(c)(3) accordingly.
University Center Program.
As noted above, the evaluation criteria for a reasonable budget has
been deleted from 13 CFR 307 Subpart B and added to 13 CFR part 304.
Commenters suggested that requirements for supplementary grant
rates be clarified, including an explanation that the distress factors
table in 13 CFR 301.3(b) cannot be used by applicants under the
University Center program, and that such applicants are not eligible
for the 10 percent incentive.
We concur and have changed 13 CFR 307.7 and added 13 CFR
301.4(d)(4) accordingly.
Commenters suggested that EDA's rules provide for a 20 percent
``cap'' on indirect costs for University Center projects. These
commenters argued that in the absence of such a cap, there would often
be insufficient grant funds to accomplish direct program activities.
The nature of the University Center program, they asserted, did not
warrant a higher indirect cost rate because the program did not utilize
extensive university-wide services.
We concur that the cap in EDA's previous regulations helped to
focus EDA funds on direct program expenditures. Accordingly, we have
added to 13 CFR 307.7 a new paragraph (d) which states that at least 80
percent of EDA funding must be allocated to direct costs of program
delivery.
National Technical Assistance, Training, Research and
Evaluation.
Commenters suggested that language on grant rates be clarified to
indicate that maximum grant rates can be supplemented for ``up to and
including'' 100 percent.
We concur and have changed 13 CFR 307.11(c) accordingly.
Requirements for Economic Adjustment Grants.
Commenters suggested that appendices A-D to part 308-Economic
Adjustment, be eliminated from the rule because they are too detailed
and cumbersome.
While we agree that the inclusion of these appendices in the rule
is cumbersome, we do not concur with this suggestion at this time,
because this suggestion will be addressed in an interim final fule to
be published by the end of December, 1999, consistent with the report
and recommendations of the EDA RLF Task Force.
Commenters suggested that requirements for strategy grants under
this program be the same as for other programs, as noted above.
We concur and have changed 13 CFR 308.4(b) accordingly.
A commentator suggested correction of a typographical error
appearing in a parenthetical phrase under Economic Adjustment planning
requirements by changing ``i.e.'' before the word ``strategy'' to
``e.g.'' since the intent was to provide an example of planning
activities.
We concur and have changed 13 CFR 308.5(b) accordingly.
Property.
Commenters suggested that the requirements for uses of property be
modified to allow for the replacement of real property, in the same
manner as for replacement of personal property.
We believe there are major differences between replacement of
personal property, which is often occasioned by the need to upgrade
outmoded as well as partially worn-out equipment, and replacement of
real property, which is unique and specific to the project. We believe
replacement of real property is generally not consistent with a
project's purposes. Nevertheless, there can be occasional exceptions,
and we have modified 13 CFR 314.3(d) to allow for the replacement of
real property upon the approval of the Assistant Secretary, thereby,
giving EDA the flexibility to make a determination on a case-by-case
basis.
A commenter suggested that the rule on unauthorized use be modified
to be more specific about how EDA may assert its interest in grant
property to recover the Federal share of its value for the Federal
Government, i.e., that such actions be the same as are provided for
loan and loan guarantee property interests, in 13 CFR 316.5(c).
We concur and have changed 13 CFR 314.4(b) accordingly.
Excess Capacity.
A commenter suggested that clarifying modifications be made to the
definitions of ``beneficiary'', and ``commercial product or service'.
We concur and have changed 13 CFR 316.2(a) accordingly.
A commenter suggested that we make clarifying modifications
concerning studies or reports for known beneficiaries, and that we
clarify language explaining exemptions for projects that benefit the
community as a whole, are primarily for production/distribution,
retention, replacement, rebuilding or modernizing, and projects
primarily for planning, technical assistance, research, evaluation,
other studies or training of workers.
We concur and have changed 13 CFR 316.2(e) accordingly. These
changes do not modify the intent or substantive effect of the
provisions, but provide clearer guidance to the reader.
Intergovernmental Review of projects.
A commenter suggested changes in the title and paragraph (a) of 13
CFR 316.11 so that the 15 day review requirement for special purpose
units of local governments is only applicable to public works and
economic adjustment projects where the applicant is a special purpose
unit of local government. Some commenters suggested that project
applications submitted by entities that are not participating in the
district should be reviewed by the district organization for
consistency with the
[[Page 69872]]
economic development activities in the region.
As to the first suggestion, we believe that projects under the
public works and economic adjustment programs for which special purpose
units of governments are applicants, are likely to be of particular
concern to appropriate general purpose local governments for review
purposes under this section. Consequently, we have modified 13 CFR
316.11 accordingly. As to the second suggestion, there are already
intergovernmental review procedures in place under 13 CFR 316.11 and
districts will have the opportunity to review and comment on CEDS of
project applicants under 13 CFR 301.3. Consequently, we have not made
this suggested change to the rule.
Project Administration by District Organization.
Commenters suggested that 13 CFR 316.19(2) be amended to eliminate
the requirement that as a prerequisite for project administration
districts show that they have the ability to manage projects more
efficiently and effectively than any other entity.
This provision on project administration by district organizations
incorporates into a regulation EDA's policy and practice developed in
response to situations calling for sole sourcing a project to a
district. This practice has worked well under the criteria set forth in
the rule and is consistent with sole source justifications in
accordance with 15 CFR parts 14 and 24. Consequently, we have not
modified this rule.
A commenter suggested that districts be allowed to use their own
procurement procedures.
There is no authority for this under government-wide requirements
for grants administration (OMB Circulars A-102 and A-110; 15 CFR parts
14 and 24, for the Department of Commerce). Therefore, we have not
included such a provision.
Civil Rights.
Commenters suggested that the final rule include all civil rights
requirements specific to EDA.
We concur and have added provisions to 13 CFR part 317 on
discrimination on the basis of age and handicap, as well as reporting,
recordkeeping and other EDA civil rights requirements.
Evaluation of University Centers.
Commenters recommended that EDA continue its previous peer review
evaluation process, or some variation of such earlier review process.
Commenters also suggested that language explaining the purpose of such
evaluations be softened to more closely parallel language used in the
section on evaluations of districts.
We concur with the suggestion about language as to the purpose of
the evaluations, as it was not EDA's intent to imply dissatisfaction
with any currently funded University Centers. Consequently, we have
changed the rule at 13 CFR 318.1 accordingly. Since the evaluation
process is currently under study by the agency, we have not modified
the rule on the evaluation process at this time.
Commenters suggested that EDA provide in the rule that it will
reimburse those participating in the peer review process.
We concur. It was an oversight to have been silent on this matter
and we have changed 13 CFR 318.1 accordingly.
Evaluation of Districts.
Commenters suggested that 13 CFR 318.2 be modified to provide that
the reviewing peer district be outside the state or even the EDA region
of the district being evaluated.
We have not made the suggested change at this time because the
evaluation process is currently under study by the agency.
Commenters suggested that the provision that districts be assessed
``in accordance with the current instructions for performance
appraisals'' be removed as ambiguous and outside of the requirements of
PWEDA.
We concur and have changed 13 CFR 318.2 accordingly.
Commenters suggested that EDA provide in the rule that it will
reimburse those participating in the peer review. Some of these
commenters suggested supplemental grants to cover such costs.
We concur in the general suggestion and have changed 13 CFR 318.2
accordingly.
Savings Clause
The rights, duties, and obligations of all parties pursuant to
parts, sections and portions thereof of the Code of Federal Regulations
removed by this rule shall continue in effect, except that EDA may
waive administrative or procedural requirements of provisions removed
by this rule.
Executive Order 12866 and 12875
This rule has been determined to be not significant for purposes of
E.O. 12866, Regulatory Planning and Review. In addition, it has been
determined that, consistent with the requirements of E.O. 12875,
Enhancing Intergovernmental Partnership, this final rule will not
impose any unfunded mandates upon State, local, and tribal governments.
Regulatory Flexibility Act
Since notice and an opportunity for comment are not required to be
given for the rule under 5 U.S.C. 553 or any other law, under sections
603(a) and 604(a) of the Regulatory Flexibility Act (5 U.S.C. 601-612)
no initial or final Regulatory Flexibility Analysis is required, and
none has been prepared.
Paperwork Reduction Act
This rule imposes new information collection or recordkeeping
requirements under the Paperwork Reduction Act of 1980 (44 U.S.C. 3501
et seq.), as amended, and has been cleared under OMB's clearance
process under OMB approval numbers 0610-0093, 0610-0094, and 0610-0096,
valid until November 30, 2002 and 0610-0095, valid until August 31,
2002.
Administrative Procedure Act and Regulatory Flexibility Act
Executive Order 12612 (Federalism Assessment)
This action has been reviewed in accordance with the principles and
criteria contained in E.O. 12612. It has been determined that this
final rule does not have significant Federalism implications to warrant
a full Federalism Assessment under the principles and criteria
contained in E.O. 12612.
List of Subjects
13 CFR Part 300
Reporting and recordkeeping requirements; Non-profit organizations;
American Indians.
13 CFR Part 301
Grant programs; Community development; American Indians.
13 CFR Part 302
Community development; Grant programs-community development;
Technical assistance.
13 CFR Part 303
Community Development; Grant programs-community development.
13 CFR Part 304
Selection and Evaluation.
13 CFR Part 305
Community development; Community facilities; Grant programs-
community development.
13 CFR Part 306
Community development; Grant programs-community development.
[[Page 69873]]
13 CFR Part 307
Business and industry; Community development; Community facilities;
Grant program-business; Grant programs-community development; Research;
Technical assistance.
13 CFR Part 308
Business and industry; Community development; Community facilities;
Grant programs-business; Grant programs-community development; American
Indians; Manpower training programs; Mortgages; Research; Technical
assistance.
13 CFR Part 314
Community development; Grant programs-community development.
13 CFR Part 316
Community development; Grant programs-community development;
Freedom of Information Act; Loan programs-business; Loan programs-
community development; Environmental protection; Record retention;
Records.
13 CFR Part 317
Civil rights; Sex discrimination.
13 CFR Part 318
Colleges and universities.
Accordingly, the interim rule revising 13 CFR Chapter III which was
published at 64 FR 5347 on February 3, 1999, is adopted as a final rule
with the following changes:
PART 300--GENERAL INFORMATION
1. The authority citation for part 300 continues to read as
follows:
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
2. Section 300.2 is amended by revising the definition of
Comprehensive Economic Development Strategy, by adding in alphabetical
order the definitions Federally-declared disaster and Presidentially-
declared disaster, to read as set forth below and by removing the
definition of ``OEDP.''
Sec. 300.2 Definitions.
* * * * *
Comprehensive Economic Development Strategy, CEDS, or strategy
means a strategy approved by EDA under Sec. 301.3 of this chapter.
* * * * *
Federally-declared disaster means a Presidentially-declared
disaster or a Federally-declared disaster pursuant to the Magnuson-
Stevens Fishery Conversation and Management Act (Public Law 94-265) as
amended by the Sustainable Fisheries Act (Public Law 104-297), or a
Federal declaration pursuant to the Consolidated Farm and Rural
Development Act, as amended (Public Laws 92-419, 96-438, 97-35, 98-258,
99-198, 100-233, 100-387, and 101-624), or a Federally-declared
disaster pursuant to the Small Business Act, as amended (Public Law 85-
536).
* * * * *
Presidentially-declared disaster means a major disaster or
emergency declared under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5121 et seq.).
* * * * *
PART 301--GENERAL ELIGIBILITY AND GRANT RATE REQUIREMENTS
1. The authority citation for part 301 continues to read as
follows:
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
2. Section 301.1 is amended by revising paragraph (b) to read as
follows:
Sec. 301.1 Applicants.
* * * * *
(b) Except as otherwise provided in part 307 of this chapter, a
public or private nonprofit organization applicant must include in its
application for assistance, a resolution passed by, or a letter signed
by, an authorized representative of a general purpose political
subdivision of a State or an Indian tribe, acknowledging that the
applicant is acting in cooperation with officials of the political
subdivision or Indian tribe, as applicable.
3. Section 301.2 is amended by revising paragraphs (e) and (h) to
read as follows:
Sec. 301.2 Area eligibility.
* * * * *
(e) Eligibility is determined at the time that EDA receives an
application and is based on the most recent Federal data available for
the area where the project will be located or where the substantial
direct benefits will be received. If no Federal data are available to
determine eligibility, an applicant must submit to EDA the most recent
data available through the government of the State in which the area is
located, i.e., conducted by or at the direction of the State
government. Other data may be submitted, as appropriate, to
substantiate eligibility based on special needs, under paragraph (b)(3)
of this section.
* * * * *
(h) EDA describes special needs criteria under paragraph (b)(3) of
this section in a NOFA.
4. Section 301.3 is amended by revising paragraphs (a), (b), and
(d) and by adding a new paragraph (e) to read as follows:
Sec. 301.3 Strategy required.
(a) To be eligible for a project grant under part 305 or 308 of
this chapter, the application for assistance must include a CEDS
acceptable to EDA. The applicant may, however, incorporate by reference
a current strategy previously approved by EDA, as an alternative to
including the strategy in the application. (Exception: A strategy is
not required when a funding request is for planning assistance, e.g., a
strategy grant, under part 308 of this chapter.) The strategy must be
in conformance with CEDS requirements under Sec. 303.3 of this chapter.
(b) EDA will approve as acceptable a strategy that it determines
meets the requirements of Sec. 303.3 of this chapter. The strategy may
be one developed:
(1) With EDA assistance,
(2) Under another Federally supported program, or
(3) Through a local, regional, or State process.
* * * * *
(d) To be acceptable, a strategy must be approved, within one year
prior to the date of application, by the entity developing the strategy
or by the applicant. In the case of a strategy approved by the
applicant, approval must be by the applicant's governing body, or in
the case of a State, by the governor or the governor's designee(s).
(e) Before EDA approves a strategy for an area all or partly within
the boundaries of an EDD, the EDD organization must be given a 30-day
opportunity to review and comment upon such strategy.
5. Section 301.4 is amended by revising paragraph (c), and adding
new paragraphs (d)(4) and (5) to read as follows:
Sec. 301.4 Grant rates.
* * * * *
(c) The table in paragraph (b) of this section does not apply to
projects which support the on-going operations of Economic Development
Districts or University Centers. Grant rates for those projects are
provided in part 306 and subpart B of part 307, of this chapter,
respectively.
(d) * * *
(4) The project is not a University Center project under subpart B
of part 307, of this chapter; and
(5) The district organization is not itself the sole project
applicant. Projects (other than planning projects under part 306 of
this chapter) for which the district organization is a co-applicant are
eligible for the incentive if the co-
[[Page 69874]]
applicant with the district is actively participating in the economic
development activities of the district and the project is otherwise
eligible for such incentive. Planning projects under part 306 of this
chapter for which the district organization is an applicant or a co-
applicant are not eligible for the 10 percent increase in assistance.
* * * * *
PART 302--ECONOMIC DEVELOPMENT DISTRICTS; STANDARDS FOR
DESIGNATION, MODIFICATION AND TERMINATION
1. The authority citation for part 302 continues to read as
follows:
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
2. Section 302.4 is amended by redesignating paragraphs (a)(1)(v)
through (vii) as paragraphs (a)(1)(vi) through (viii) respectively, by
adding a new paragraph (a)(1)(v), and by revising paragraph (b)
introductory text to read as follows:
Sec. 302.4 District organization functions and responsibilities.
(a) * * *
(1) * * *
(v) The inclusion of private citizens who are not officials of or
employees appointed by the officials of a general purpose unit of local
government;
* * * * *
(b) District organizations receiving EDA financial assistance for
the development and implementation of Comprehensive Economic
Development Strategies must also:
* * * * *
(3) Section 302.6 is amended by revising the introductory text and
paragraph (c) to read as follows:
Sec. 302.6 Termination and suspension of district designation.
EDA may, upon 60 days prior written notice to the district
organization, member counties or other areas as determined by EDA, and
each affected State, terminate the designation status of an Economic
Development District:
* * * * *
(c) When a district has requested termination.
* * * * *
PART 303--PLANNING PROCESS AND STRATEGIES FOR DISTRICT AND OTHER
PLANNING ORGANIZATIONS SUPPORTED BY EDA
1. The authority citation for part 303 continues to read as
follows:
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
2. Section 303.1 is amended by revising paragraphs (a)(1), and (b)
to read as follows:
Sec. 303.1 Definitions, purpose and scope.
(a) * * *
(1) Planning organization means an Economic Development District
organization, Indian tribe, or other recipient of an EDA grant under
part 306 of this chapter which grant is awarded in whole or in part to
develop, update, or replace a CEDS, and
* * * * *
(b) This part describes the planning process of and requirements
for strategies developed and implemented by planning organizations
supported by EDA. Though the strategy requirements are the same under
all EDA programs which call for a strategy, the planning process and
reporting and updating requirements for EDA supported planning
organizations are more stringent.
3. Section 303.2 is amended by revising paragraph (e) and adding a
new paragraph (f) to read as follows:
Sec. 303.2 Planning process.
* * * * *
(e) A new or revised strategy is required at least every five
years, or sooner if EDA or the planning organization determines that
the strategy is inadequate due to changed circumstances. Each strategy
must be available for review and comment by appropriate government
bodies and interest groups in the area covered. Strategies submitted by
Districts require a 30 day opportunity for review and comment by the
Governor or Governors, or designee(s), of the State or States in which
they are located, prior to EDA approval.
(f) If EDA identifies any deficiencies, it will notify the
organization in writing and provide the organization a reasonable
opportunity to remedy such deficiencies.
4. Section 303.3 is amended by revising the introductory text and
paragraph (b) to read as follows:
Sec. 303.3 Requirements for a strategy.
A strategy must be the result of a continuing economic development
planning process, developed with broad-based and diverse community
participation, and contain the following:
* * * * *
(b) Background and history of the economic development situation of
the area covered, with a discussion of the economy, including as
appropriate, geography, population, labor force, resources,
infrastructure, transportation systems, and the environment;
* * * * *
PART 304--GENERAL SELECTION PROCESS AND EVALUATION CRITERIA
1. The authority citation for part 304 continues to read as
follows:
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
2. Section 304.1 is amended by revising paragraphs (a) introductory
text, (b) introductory text, and (b)(1), by redesignating paragraph (c)
as (d) and revising it, and by adding a new paragraph (c) as follows:
Sec. 304.1 Project proposal, application, selection and evaluation for
programs under PWEDA.
(a) Local projects. If you are or represent a party eligible to be
an applicant, and are interested in a public works, economic
adjustment, planning, local technical assistance or university center
project grant, you should contact the appropriate Economic Development
Representative (EDR) (or EDA Regional or headquarters office),
identified in the NOFA. The EDR or other EDA official is available to
provide program information, including the current published NOFA;
provide a proposal form approved by the U.S. Office of Management and
Budget (OMB), and provide assistance as needed in filling out the
proposal form.
* * * * *
(b) National technical assistance, training, research, or
evaluation projects. If you are or represent a party eligible to be an
applicant, and are interested in a national technical assistance,
training, research, or evaluation project under PWEDA, you should make
initial contact with EDA in Washington, D.C., at locations identified
in the NOFA, for information and assistance concerning proposals and to
obtain program information, including a copy of the current NOFA, and
OMB approved proposal form. After submission of the proposal to the
appropriate EDA Washington, D.C. office, generally, three or more
technically knowledgeable EDA officials will review the proposal for
relevance and quality.
(1) If EDA determines that the proposal is acceptable under
Sec. 304.2, program specific sections of this chapter, and the NOFA, if
applicable, EDA may by letter invite the submitter to provide an
application with a more detailed and comprehensive project narrative.
* * * * *
[[Page 69875]]
(c) Additional criteria, or priority consideration factors for
assistance, may be set forth in a NOFA.
(d) EDA expects that applications will generally be submitted
within 30 days after receipt of an invitation letter. EDA's invitation
to submit an application does not assure EDA funding.
3. Section 304.2 is amended by revising paragraph (a) to read as
follows:
Sec. 304.2 How EDA evaluates proposals and applications for projects
funded under PWEDA.
(a) General proposal and application evaluation criteria for
projects funded under PWEDA are as follows: EDA will screen all
proposals/applications for conformance to statutory and regulatory
requirements, the reasonableness of the budget presented, and the
following criteria:
(1) The relative severity of the economic problem of the area,
(2) The quality of the scope of work proposed to address the
problem,
(3) The merits of the activity(ies) for which funding is requested,
and
(4) The ability of the prospective applicant to carry out the
proposed activity(ies) successfully.
* * * * *
PART 305--GRANTS FOR PUBLIC WORKS AND DEVELOPMENT FACILITIES
1. The authority citation for part 305 continues to read as
follows:
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
Sec. 305.2 [Amended]
2. Section 305.2 is amended by removing paragraph (c) and by
redesignating paragraph (d) as paragraph (c).
3.-4. Section 305.5 is redesignated as Sec. 305.24, and a new
Sec. 305.5 is added to read as follows:
Sec. 305.5 Pilot program.
(a) The Chicago Regional Office (CRO) has been authorized to
conduct a pilot program through December of 1999 to develop simplified
and streamlined procedures for monitoring approved EDA construction
projects. Other EDA regional offices have been authorized to conduct
their own pilot programs for monitoring compliance with the post-
approval project management requirements, provided they first obtain
the approval of the Deputy Assistant Secretary for Program Operations.
The knowledge and efficiencies gained from the pilot programs will be
evaluated and used to improve and revise EDA's post-approval project
management requirements and procedures.
(b) As part of this pilot program, the procedures developed by CRO
vary from those listed in this subpart B of part 305 in that they place
greater reliance on a recipient's certification of compliance. No
additional requirements are imposed by CRO procedures. CRO provides
guidelines, in its version of the ``Requirements for Approved
Projects,'' to all recipients of grants for construction projects
monitored by the CRO. The recipient is not required to submit to EDA
certain documentation at any set time, but is required to maintain all
documentation supporting any and all certifications submitted to CRO,
for the period of time provided in 15 CFR part 14 or 24, as
appropriate.
5. Section 305.6 is redesignated as Sec. 305.25, and a new
Sec. 305.6 is added to read as follows:
Sec. 305.6 Project management conference.
After the EDA financial assistance award has been accepted by the
recipient, EDA may schedule a planning conference with the recipient's
representatives to explain the post-approval requirements for
administration of the EDA assisted project.
6. Section 305.7 is revised to read as follows:
Sec. 305.7 Selection of the Architect/Engineer.
Guidelines for the selection of the Architect/Engineer (A/E),
services to be performed by the A/E, contract provisions for those
services and eligible fees for the A/E are as follows:
(a) Selection of the A/E may be by sealed bids using formal
advertising or by competitive proposal procedures subject to
negotiation of fair and reasonable compensation. The cost plus a
percentage of cost and percentage of construction cost methods of
contracting shall not be used.
(b) The A/E agreement shall provide for all services required by
the recipient for the engineering feasibility, design and contract
administration of the proposed project. Appropriate standards or guides
developed by such professional organizations as the American Consulting
Engineers Council, American Society of Civil Engineers, National
Society of Professional Engineers, and/or the American Institute of
Architects may be used where the grantee does not have standard
procurement/contract documents.
(c) Exhibit A-1, Checklist for Architect/Engineer Services, in the
EDA publication, Requirements for Approved Construction Projects,
displayed at EDA's Web Site, http//www.doc.gov/eda (a copy of this
publication is available from EDA and a copy will be furnished to an
award recipient with the Offer of Financial Assistance), lists the
contract provisions which EDA recommends for the A/E contract. The A/E
agreement must be furnished to EDA in order for the allowability of the
costs of A/E services to be determined.
(d) Eligible project costs may include, but not be limited to,
costs for A/E fees, resident inspection, test borings, and the testing
of materials provided under an agreement or contract with the
recipient. The A/E fees should be in conformity with similar costs and
projects in the area.
7. Sections 305.8 through 305.23 are added to read as follows:
Sec. 305.8 Project phasing.
The recipient is strongly urged to award all contracts for
construction at one time.
(a) Where compelling reasons justify phasing the project, the
recipient must secure the approval of EDA for phasing prior to
advertising any portion for bid.
(b) The recipient's request for approval of phasing must include
valid reasons justifying the request and a statement from the recipient
that it can, and will, fund any overrun that arises in the later
phases.
(c) Normally, EDA will not disburse funds until all construction
contracts have been awarded, (an exception is the development of an
underground source of water when required to determine the availability
of an adequate source of water supply in terms of both quality and
quantity as described in the grant application).
(d) Disbursement of grant funds by phases must be approved by EDA.
Such approvals will be given only if the recipient can demonstrate that
a severe hardship will result if such approval is not given and there
are compelling reasons why all phases cannot be contracted for at the
same time.
(e) The recipient must be capable of paying incurred costs prior to
the first disbursement of EDA grant funds.
Sec. 305.9 Recipient furnished equipment and materials.
The recipient may wish to incorporate into the project equipment
and/or materials which it will secure through its own efforts.
(a) It is the responsibility of the recipient to assure that such
equipment and/or materials are adequate for the proposed use.
(b) The use of such equipment and materials must be approved by EDA
to
[[Page 69876]]
be eligible for EDA financial participation. The recipient shall be
required to submit with its request for approval either a paid invoice
or current quotes from not less than three suppliers who normally
distribute such equipment and/or materials. EDA may require that major
equipment items be subject to a lien in favor of EDA and may also
require a statement from the Recipient regarding expected useful life
and salvage value.
(c) The recipient must be prepared to show that the cost claimed
for such equipment and/or materials is competitive with local market
costs.
(d) Acquisitions of recipient furnished equipment and/or materials
under this section is subject to the requirements of 15 CFR part 24 or
15 CFR part 14.
Sec. 305.10 Construction Management services.
Construction Management is defined as the services of a firm with
competent and experienced staff to act as the recipient's agent to
perform all or part of project administration. EDA will not normally
approve the use of a Construction Management firm for projects costing
less than $5 million. EDA will participate in such cost only if EDA
approves the contract for such services.
Sec. 305.11 Design/Build method of construction.
EDA discourages the use of the same entity to both design and to
build EDA assisted facilities. If the recipient desires to use such a
method, its use must be justified and EDA must approve the contract.
The procurement of, and the compensation to, the designer/builder will
be subject to the same rules as for the procurement of construction
services.
Sec. 305.12 Advertising for bids.
In the absence of State or local law to the contrary, the
advertisement for bids for construction projects should appear in
publications of general circulation a minimum of four times within a
30-day period prior to the opening of bids. Additional circulation of
the invitation for bids is encouraged if it is needed to obtain the
coverage necessary to secure competitive bids. Generally, a minimum of
30 days should be allowed for submission of bids.
Sec. 305.13 Bid overrun.
If at the construction contract bid opening the lowest responsive
bid less deductive alternates, if any, exceeds the funds available for
construction, the recipient may reject all bids or augment the funds
available in an amount sufficient to enable the award to be made to the
low bidder. If available, the recipient may take deductive alternates
in the order given in the Invitation for Bids until at least one of the
responsive bids less deductive alternates results in a price within the
funds announced as available prior to the bid opening. The award then
may be made to that bidder. Additional information on the procedures to
be followed is in the EDA publication, Requirements for Approved
Construction Projects.
Sec. 305.14 Bid underrun.
If at the construction contract bid opening, the lowest responsive
bid is less than the funds available for construction, EDA must be
notified immediately to determine whether any unneeded grant funds
should be deobligated.
Sec. 305.15 Contract award.
EDA must concur in the award of all necessary contracts for design
and construction of the EDA assisted facility in order for the cost to
be eligible for EDA reimbursement. Pending EDA approval of the
construction contract(s), the recipient may issue the notice to proceed
permitting the work to go forward. If the work does go forward prior to
EDA approval, the recipient will be proceeding at its own risk pending
EDA review and concurrence. The EDA regional office will advise the
recipient of the documents that are required to obtain EDA approval.
Sec. 305.16 Construction progress schedule.
If requested by EDA, the recipient will secure from the contractor
or A/E and furnish a copy to EDA of the estimated construction progress
chart and a schedule of amounts for contract payments. The construction
progress chart should be updated monthly by the recipient, the A/E or
the contractor, and an up-to-date copy furnished to EDA quarterly
throughout the construction of the project.
Sec. 305.17 Project sign.
The recipient shall be responsible for the construction, erection,
and maintenance in good condition throughout the construction period,
of a sign or signs, (recommended specifications for the sign are
included as an exhibit to the EDA publication, Requirements for
Approved Construction Projects) at the project site in a conspicuous
place indicating that the Federal government is participating in the
project. EDA may require more than one sign if the project's location
so warrants. The recipient should confer with the EDA regional office
for suggestions on where the sign(s) should be located.
Sec. 305.18 Occupancy prior to completion.
If the project or any part of it is to be occupied or used prior to
the project's acceptance from the contractor, the recipient must notify
EDA of the intent to occupy or use the facility and the effective date
of the occupancy or use, secure the written consent of the contractor;
secure an endorsement from the insurance carrier and consent of the
surety company permitting occupancy or use during the period of
construction; secure permanent fire and extended coverage insurance
and, when required, secure a permit to occupy the facility from the
appropriate authority, e.g. the local building inspector.
Sec. 305.19 Contract change orders.
After construction contracts have been executed, it may become
necessary to alter them. This requires a formal contract change order,
issued by the recipient and accepted by the contractor.
(a) All contract change orders must be concurred in by EDA even if
the recipient is to pay for all additional costs resulting from the
change or the contract price is to be reduced.
(b) The work on the project may continue pending EDA review and
concurrence in the change order but the recipient should be aware that
all such work will be at the recipient's risk as to whether the cost
for the work will be an eligible project cost for EDA participation
until EDA concurrence is received.
(c) EDA will not approve financial participation in change orders
that are solely for the purpose of using excess funds resulting from an
underrun of one or more of the items in the approved project budget.
(d) EDA approval of change orders must be based on a finding by EDA
that the work called for in the change order is within the project
scope and is required for satisfactory operation or functioning of the
project.
Sec. 305.20 Project development time schedule.
The recipient is responsible for expeditiously prosecuting the
implementation of the project in accordance with the project
development time schedule contained in the EDA grant award. As soon as
the recipient becomes aware that it will not be possible to meet the
time schedule, it must notify the EDA Regional Office.
[[Page 69877]]
Sec. 305.21 Controlling budget.
The tabulation of estimated project costs contained in the EDA
grant award is the controlling budget for the project.
(a) Budget line item revisions, including the addition of a new
line item, which do not involve a change of scope may be approved by
EDA if no new EDA funds are involved; another budget line item
(preferably the contingency line item, although this is not mandatory)
has funds which can be used without significantly adversely affecting
the object of that line item; and unless the line item that is proposed
to be supplemented is supplemented, the activity associated with that
line item cannot be completed.
(b) The recipient shall notify EDA of any proposed transfer of
funds from one budget line item to another. The recipient's attention
is called to the fact that the addition of a new line item to the
approved budget may involve an impermissible change of scope and,
therefore, may result in such costs being excluded from EDA's
participation. Accordingly, the recipient is advised to discuss the
need to add a new line item to the approved budget with EDA regional
office staff before any costs are incurred under such new line item.
Sec. 305.22 Services performed by the recipient's own forces.
The recipient may wish to have a portion or all of the design,
construction, inspection, legal services or other work and/or services
in connection with the project performed by personnel who are employed
by the recipient either full or part time (in-house). Due to the
difficulty in monitoring in-house construction and the limited EDA
staff available to perform the monitoring, in-house construction is
discouraged.
(a) If EDA approves the use of the recipient's in-house forces to
construct all or part of the EDA assisted project and the in-house
forces are to be augmented by personnel hired specifically for the EDA
assisted project, the hourly wages to be paid to such personnel shall
be the same as the hourly wages paid to full time personnel of the
recipient doing the same or similar work. If the nature of the work is
not similar and/or there is not an established wage scale, the
prevailing state or county hourly wage for public employees shall be
obtained from the appropriate state or county agency and used for the
newly established position. However, non-profit recipients must pay all
personnel employed for the construction of the EDA assisted project the
prevailing hourly wages for the area as established by the U.S.
Department of Labor.
(b) The use of in-house forces for construction may be approved by
EDA if:
(1) The recipient has a special skill required for the construction
of the project, e.g., construction of unique Indian structures, or
(2) The recipient has made all reasonable efforts to obtain a
contractor but has failed to do so because of uncontrollable factors
such as the remoteness of the project site or an overabundance of
construction work in the project area, or
(3) Substantial cost savings can be demonstrated.
Sec. 305.23 Public Works projects for design and engineering work.
In general, EDA prefers to award a Public Works grant that includes
all of the costs required for the successful completion of a project,
including the design and engineering work.
(a) When the purpose of the Public Works project is to accomplish
only the design and engineering work for a proposed future construction
project, EDA may award a grant for the design and engineering work with
the understanding that EDA cannot make a commitment against a future
fiscal year appropriation to fund the proposed construction project.
(b) The purpose of the EDA assisted project for design and
engineering work is to produce all of the documents required for the
construction of the proposed future project in a format and in
sufficient quantity to permit a construction contract to be advertised
and awarded soon after the project's construction financing has been
arranged. The EDA document, Requirements for Approved Construction
Projects, should be used to ensure that the proposed construction
project meets all applicable Federal requirements.
(c) Design and engineering projects will not generally be
considered unless the nature of the proposed project to be considered
is complex or environmentally sensitive and EDA makes a determination
that it is in the best interest of the Government to award a separate
grant for design and engineering.
(d) EDA requires the design/engineering contract to be submitted to
and approved by EDA before any EDA grant funds can be disbursed.
8. Redesignated Sec. 305.24 is amended by revising paragraph (a)(4)
to read as follows:
Sec. 305.24 Disbursements of funds for grants.
(a) * * *
(4) Upon such evidence as EDA may require that grantee's
proportionate share of funds not yet expended, is on deposit;
* * * * *
9. Redesignated Sec. 305.25 is revised to read as follows:
Sec. 305.25 Final inspection.
A final inspection will be scheduled by the recipient and
appropriate notification given to EDA, when the project has been
completed and all deficiencies have been corrected. EDA personnel may
attend and participate in the final inspection and, in any event, EDA
must be advised of the outcome of such final inspection and the
recipient's acceptance of the work.
10. Section 305.26 is added to read as follows:
Sec. 305.26 Reports.
Financial and performance report requirements will be specified in
the Special Award Conditions of the grant. Construction progress
schedule reports will be as required in Sec. 305.16.
PART 306--PLANNING ASSISTANCE
1. The authority citation for part 306 continues to read as
follows:
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
2. Section 306.3 is amended by revising paragraphs (b)(1) and (2),
by redesignating paragraph (b)(3) as (b)(4) and revising it, by adding
a new paragraph (b)(3), and by revising paragraph (c)(1) to read as
follows:
Sec. 306.3 Award requirements.
* * * * *
(b) * * *
(1) The maximum Federal grant rate for a project under this part
for recipients other than Economic Development Districts is 50 percent,
except as supplemented as provided in Sec. 301.4(b) of this chapter.
(2) The maximum Federal grant rate for a project under this part
for a district is:
(i) 50 percent, or
(ii) 75 percent, if the project meets the criteria of paragraph
(b)(3) of this section.
(3) A district project is eligible for a supplemental grant
increasing the Federal share up to and including 75 percent when the
applicant is able to demonstrate that:
(i) The project is intended to address problems arising from actual
or threatened high unemployment, low per
[[Page 69878]]
capita income, or a special need that qualifies an area for eligibility
under Sec. 301.2(b) of this chapter,
(ii) The project is in significant part devoted to activities
addressing the needs of the most economically distressed parts of the
total area served by the applicant,
(iii) The applicant is uniquely qualified to address the major
causes of actual or threatened economic distress in the area served by
the applicant, and
(iv) The applicant cannot provide the non-Federal share otherwise
required because in the overall economic situation there is a lack of
available non-Federal share due, for instance, to the pressing demand
for its use elsewhere.
(4) A project receiving a supplemental grant increasing the Federal
share under paragraph (b)(3) of this section is not eligible for
additional Federal grant assistance under Sec. 301.4(d) of this
chapter, i.e., the 10 percent incentive increase for certain projects
in districts.
(c) * * *
(1) The State must have or develop a CEDS;
* * * * *
3. The heading of Sec. 306.4 is revised to read as follows:
Sec. 306.4 Post-approval requirements.
* * * * *
PART 307--LOCAL TECHNICAL ASSISTANCE, UNIVERSITY CENTER TECHNICAL
ASSISTANCE, NATIONAL TECHNICAL ASSISTANCE, TRAINING, RESEARCH, AND
EVALUATION
1. The authority citation for part 307 continues to read as
follows:
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
2. Section 307.2 is amended by removing paragraph (f) and by
revising paragraphs (d) and (e) to read as follows:
Sec. 307.2 Application evaluation criteria.
* * * * *
(d) Demonstrates innovative approaches to stimulating economic
development in distressed areas; and
(e) Is consistent with the CEDS or other strategy accepted by EDA
for the area in which the project is located.
3. Section 307.3 is amended by removing paragraph (b) and by
redesignating paragraphs (c) and (d) as (b) and (c) accordingly, and by
revising redesignated paragraph (c) to read as follows:
Sec. 307.3 Award and grant rate requirements.
* * * * *
(c) Grant rate:
(1) The maximum Federal grant rate for a project under this subpart
is:
(i) 50 percent, except as supplemented as provided in
Sec. 301.4(b); or
(ii) Up to and including 100 percent, if the project is not
feasible without, and merits, a reduction or waiver of the non-Federal
share required under the rate provided in Sec. 301.4(b).
(2) A project is eligible for a supplemental grant increasing the
Federal share up to and including 100 percent when the applicant is
able to demonstrate that,
(i) It cannot provide the non-Federal share otherwise required
because in the overall economic situation there is a lack of available
non-Federal share due, for instance, to the pressing demand for its use
elsewhere;
(ii) The project is addressing major causes of distress in the
service area and requires the unique characteristics of the applicant,
which will not participate in the program if it must provide all or
part of a 50 percent non-Federal share; or
(iii) The project is for the benefit of local, State, regional, or
national economic development efforts, and will be of no or only
incidental benefit to the recipient.
(3) A project receiving a supplemental grant increasing the Federal
share under paragraph (c)(2) of this section is not eligible for
additional Federal grant assistance under Sec. 301.4(d) of this
chapter, i.e., the 10 percent incentive increase for certain projects
in districts.
(4) A local technical assistance project is eligible for a Federal
grant rate of more than 75 percent, up to 100 percent, only if approved
by the Assistant Secretary.
4. Sections 307.7 through 307.9 are redesignated as Secs. 307.9
through 307.11, respectively; Secs. 307.4 through 307.6 are
redesignated as Secs. 307.5 through 307.7 in subpart B; and a new
Sec. 307.4 is added to read as follows:
Sec. 307.4 Post-approval requirements.
Financial reports, progress reports, and project products will be
specified in the Special Award Conditions of the grant or cooperative
agreement.
5. Redesignated Sec. 307.6 is amended by removing paragraph (d) and
by redesignating paragraphs (e) and (f) as (d) and (e) respectively.
6. Redesignated Sec. 307.7 is amended by revising paragraph (d) and
by adding a new paragraph (e) to read as follows:
Sec. 307.7 Award and grant rate requirements.
* * * * *
(d) Grant rate:
(1) The maximum Federal grant rate for a project under this subpart
is:
(i) 50 percent, or
(ii) 75 percent, if the project is not feasible without, and
merits, a reduction or waiver of the non-Federal share.
(2) A project is eligible for a supplemental grant increasing the
Federal share up to and including 75 percent when the applicant is able
to demonstrate that:
(i) It cannot provide the non-Federal share otherwise required
because in the overall economic situation there is a lack of available
non-Federal share due, for instance, to the pressing demand for its use
elsewhere;
(ii) The project is addressing major causes of distress in the area
serviced and requires the unique characteristics of the applicant,
which will not participate in the program if it must provide all or
part of a 50 percent non-Federal share; or
(iii) The project is for the benefit of local, State, regional, or
national economic development efforts, and will be of no or only
incidental benefit to the recipient.
(3) A project awarded under this subpart is not eligible for
additional Federal grant assistance under the table in Sec. 301.4(b) or
the provisions of Sec. 301.4(d) of this chapter, i.e., the 10 percent
incentive increase for certain projects in districts.
(e) Direct costs: At least 80 percent of EDA funding must be
allocated to direct costs of program delivery.
7. A new Sec. 307.8 is added to subpart B to read as follows:
Sec. 307.8 Post-approval requirements.
Financial reports, progress reports, and project products will be
specified in the special award conditions of the grant or cooperative
agreement.
8. Redesignated Sec. 307.11 is amended by removing paragraph (c),
by redesignating paragraph (d) as paragraph (c) and by revising
redesignated paragraphs (c)(1)(ii) and (c)(2) introductory text to read
as follows:
Sec. 307.11 Award and grant rate requirements.
* * * * *
(c) * * *
(1) * * *
(ii) Up to and including 100 percent, if the project is not
feasible without, and merits, a reduction or waiver of the non-Federal
share required under the rate provided in Sec. 301.4(b) of this
chapter.
(2) A project is eligible for a supplemental grant increasing the
Federal share up to and including 100 percent when the applicant is
able to demonstrate that:
* * * * *
[[Page 69879]]
9. Section 307.12 is added to read as follows:
Sec. 307.12 Post-approval requirements.
Financial reports, progress reports, and project products will be
specified in the Special Award Conditions of the grant or cooperative
agreement.
PART 308--REQUIREMENTS FOR ECONOMIC ADJUSTMENT GRANTS
1. The authority citation for part 308 continues to read as
follows:
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
2. Section 308.1 is amended by revising paragraph (b)(1) to read as
follows:
Sec. 308.1 Purpose and scope.
* * * * *
(b) * * *
(1) Help organize and carry out a CEDS;
* * * * *
3. Section 308.4 is amended by revising paragraph (b) to read as
follows:
Sec. 308.4 Selection and evaluation factors.
* * * * *
(b) Strategy grants. EDA will review strategy grant applications
for assurances that the proposed activities will conform to the CEDS
requirements in Sec. 303.3 of this chapter.
* * * * *
4. Section 308.5 is amended by revising paragraph (b) to read as
follows:
Sec. 308.5 Applicant requirements.
* * * * *
(b) Include, or incorporate by reference, if so approved by EDA, a
strategy, as provided in Sec. 301.3 of this chapter (except that a
strategy is not required when a funding request is for planning
assistance, e.g., a strategy grant);
* * * * *
PART 314--PROPERTY
1. The authority citation for part 314 continues to read as
follows:
Authority: 42 U.S.C. 3211; 19 U.S.C. 2341-2355; 42 U.S.C. 6701;
42 U.S.C. 184; Department of Commerce Organization Order 10-4.
2. Section 314.3 is amended by revising paragraph (d) to read as
follows:
Sec. 314.3 Use of property.
* * * * *
(d) When acquiring replacement personal property of equal or
greater value, the recipient may, with EDA's approval, trade-in the
property originally acquired or sell the original property and use the
proceeds in the acquisition of the replacement property, provided that
the replacement property shall be used for the project and be subject
to the same requirements as the original property. In extraordinary and
compelling circumstances, EDA may allow replacement of real property,
with the approval of the Assistant Secretary.
3. Section 314.4 is amended by revising paragraph (b) to read as
follows:
Sec. 314.4 Unauthorized use.
* * * * *
(b) If property is disposed of or encumbered without EDA approval,
EDA may assert its interest in the property to recover the Federal
share of the value of the property for the Federal Government. To that
end, EDA may take such actions as are provided in connection with loans
and loan guarantees, in Sec. 316.5(c) of this chapter. EDA may pursue
its rights under both paragraphs (a) and (b) of this section to recover
the Federal share, plus costs and interest.
PART 316--GENERAL REQUIREMENTS FOR FINANCIAL ASSISTANCE
1. The authority citation for part 316 continues to read as
follows:
Authority: 42 U.S.C. 3211; 19 U.S.C. 2391, et. seq., Department
of Commerce Organization Order 10-4.
2. Section 316.2 is amended by revising the definitions of
``Beneficiary'' and ``Commercial product or service'' in paragraph (a),
and by revising paragraphs (e) introductory text, and (e)(1), (2), (4),
(6) and (8) to read as follows:
Sec. 316.2 Excess capacity.
(a) * * *
Beneficiary means a firm or group of firms, a public or private
enterprise or organization that provides a commercial product or
service and that directly benefits from an EDA-assisted project.
* * * * *
Commercial product or service means a product or service sold on
the open market in competition with another provider's product or
service of the same kind.
* * * * *
(e) Unless EDA determines that circumstances require a section 208
study or report, EDA will make a finding of compliance with section 208
without doing a section 208 report or study for those projects with
known beneficiaries, and which have one or more of the following
characteristics:
(1) The project is primarily for the use and benefit of the
community as a whole without significantly expanding the output of
commercial products or services;
(2) The project is primarily to be used for non-production or non-
distribution purposes;
* * * * *
(4) The project will assure the retention of physical capacity and/
or employment without significantly expanding the existing supply of
the same kinds of commercial products or services;
* * * * *
(6) The project will replace, rebuild or modernize, within the same
commuting area, facilities which within the previous two years have
been, or are to be, displaced by official governmental action, without
a change in the kind or significant increase in output of the
commercial product or service previously provided;
* * * * *
(8) The project is wholly or primarily for planning, technical
assistance, research, evaluation, other studies, or for the training of
workers, and not for the direct benefit of a firm or an industry that
produces a commercial product or service; or
* * * * *
3. Section 316.11 is amended by revising the heading and paragraph
(a) to read as follows:
Sec. 316.11 Intergovernmental review of projects.
(a) When the applicant is not a State, Indian tribe or other
general-purpose governmental authority, the applicant must afford the
appropriate general purpose local governmental authority of the area a
minimum of 15 days in which to review and comment on a proposed project
under EDA's public works and economic adjustment programs. Under these
programs, applicants shall furnish the following with their
application: if no comments were received, a statement of the efforts
made to obtain such comments; or, if comments were received, a copy of
the comments and a statement of any actions taken to address such
comments.
* * * * *
PART 317--CIVIL RIGHTS
1. The authority citation for part 317 is revised to read as
follows:
Authority: 42 U.S.C. 3211; 42 U.S.C. 2000d-1; 29 U.S.C. 794; 42
U.S.C. 3123; 42 U.S.C. 6709; 20 U.S.C. 1681; 42 U.S.C. 6101;
Department of Commerce Organization Order 10-4.
[[Page 69880]]
2. Section 317.1 is amended by revising paragraph (a)(5) and adding
paragraph (a)(6); by redesignating paragraph (f) as paragraph (h) and
revising it; by redesignating paragraphs (b) through (e) as paragraphs
(c) through (f) and revising them; and by adding new paragraphs (b) and
(g) to read as follows:
Sec. 317.1 Civil rights.
(a) * * *
(5) 42 U.S.C. 6709 (proscribing discrimination on the basis of sex
under the Local Public Works Program; and
(6) Other Federal statutes, regulations and Executive Orders as
applicable.
(b) No recipient or other party shall intimidate, threaten, coerce,
or discriminate against, any person for the purpose of interfering with
any right or privilege secured by section 601 of the Civil Rights Act
of 1964, section 504 of the Rehabilitation Act of 1973, Title IX of the
Education Amendments of 1972, 42 U.S.C. 3123, 42 U.S.C. 6709, and the
Age Discrimination Act of 1975, or because the person has made a
complaint, testified, assisted, or participated in any manner in an
investigation, proceeding, or hearing under this part.
(c) Definitions:
(1) Other Parties means, as an elaboration of the definition in 15
CFR part 8, entities which, or which are intended to, create and/or
save 15 or more permanent jobs as a result of EDA assistance provided
that they are also either specifically named in the application as
benefitting from the project, or are or will be located in an EDA
building, port, facility, or industrial, commercial or business park
prior to EDA's final disbursement of funds awarded for the project.
(2) Additional definitions are provided in EDA's Civil Rights
Guidelines and 15 CFR part 8.
(d) All recipients of EDA financial assistance under PWEDA and the
Trade Act, and Other Parties are required to submit the following to
EDA:
(1) Written assurances that they will comply with EDA regulations
and other Department of Commerce regulations, and such other
requirements as may be applicable, prohibiting discrimination;
(2) Employment data in such form and manner as determined by EDA;
(3) Information on civil rights status and involvement in charges
of discrimination in employment or the provision of services during the
2 years previous to the date of submission of such data as follows:
(i) Description of the status of any lawsuits, complaints or the
results of compliance reviews; and
(ii) Statement indicating any administrative findings by a Federal
or State agency.
(4) Whenever deemed necessary by EDA to determine that applicants
and other parties are in compliance with civil rights regulations, such
applicants and other parties shall submit additional information in the
form and manner requested by EDA; and
(5) In addition to employment record requirements found in 15 CFR
8.7, complete records on all employees and applicants for employment,
including information on race, sex, national origin, age, education and
job-related criteria must be retained by employers and made accessible
to the responsible Department official.
(e) To enable EDA to determine that there is no discrimination in
the distribution of benefits in projects which provide service
benefits, EDA may require that applicants submit a project service map
and information on which to determine that services are provided to all
segments of the area being assisted. Applicants may be required to
submit any other information EDA may deem necessary for such
determination.
(f) EDA assisted planning organizations must meet the following
requirements:
(1) For the selection of representatives, EDA expects planning
organizations and CEDS committees to take appropriate steps to ensure,
where appropriate to the area, that there is adequate representation of
minority and low-income populations, women, people with disabilities
and Federal and State recognized American Indian tribes and that such
representation is accomplished in a nondiscriminatory manner; and
(2) EDA assisted planning organizations and CEDS committees shall
take appropriate steps to ensure that no individual will be subject to
discrimination in employment because of their race, color, national
origin, sex, age or disability.
(3) Prior to approval of EDA initial funding, and for district
designations, each district and other planning organizations so
supported by EDA is required to report to EDA the membership of its
governing bodies, executive committees, and staff. This report shall
include the following items:
(i) The total population and minority population of the area served
by the organization;
(ii) A list of organizations in the area representing the interests
of minorities, women, and people with disabilities;
(iii) A list of the membership of the governing board, executive
committee indicating race, sex, national origin, age, and those who
self-identify, as having disabilities;
(iv) A description of actions taken and methods used in its
diversity efforts to promote, as much as possible, the participation of
all segments of the areas served;
(v) Information regarding how they notified and provided
organizations, including neighborhood associations representing the
interests of minorities, women, and people with disabilities, the
opportunity to select members and their own representatives;
(vi) A list of employees on the staff of the organization by name,
position title, salary, funding source, and hiring data indicating
race, sex, national origin, and age;
(vii) A brief summary of any economic development activities
undertaken during the previous 12 months that may have impacted the
covered persons in the area. This information is required with the
initial application and annually thereafter for continuation planning
funding.
(4) Prior to approval of continuation funding for a planning grant
each district and other planning organization so supported by EDA is
required to submit a report which includes the items outlined in
paragraph (f)(3) of this section except items in paragraphs (f)(3)(ii)
and (v), (although paragraph (f)(3)(v) may be required when changes to
the boards and committees affecting minorities, women, people with
disabilities have occurred), and a summary indicating the annual
progress made in the diversity efforts including a list by name, race,
national origin, sex, and age of all hires, promotions, terminations,
and composition of applicant pools since the last reporting period and
steps taken to ensure nondiscrimination and to provide equal employment
opportunity.
(5) In order to determine whether districts and other planning
organizations supported by EDA are complying with the requirements in
paragraph (f)(3), EDA shall conduct annual compliance reviews of these
organizations through either an in-depth desk audit or onsite review.
(g) Applicants for Revolving Loan Funds will provide information
describing the make-up of the existing or proposed RLF Loan Board
members by race, national origin, gender, age, and those who
voluntarily self-identify as having disabilities. The reports submitted
to EDA by RLF grantees will be used to monitor civil rights compliance.
Additional information may be requested as needed to determine
compliance. Compliance
[[Page 69881]]
issues which will be reviewed and monitored include, but are not
limited to, the following:
(1) The representation of minorities, women, and those who
voluntarily self-identify as having disabilities, as well as the age of
members on the RLF Loan Board;
(2) Recipient's plans to openly market the RLF to prospective
minority, disabled, and women business borrowers; and
(3) Recipient's monitoring plans for borrowers' compliance with
civil rights requirements concerning employees or applicants for
employment, and/or providers of goods and services.
(h) Reporting and other procedural matters are set forth in 15 CFR
parts 8, 8b, 8c, and 20 and the Civil Rights Guidelines which are
available from EDA's Regional Offices. See part 300 of this chapter.
PART 318--EVALUATIONS OF UNIVERSITY CENTERS AND ECONOMIC
DEVELOPMENT DISTRICTS
1. The authority citation for part 318 continues to read as
follows:
Authority: 42 U.S.C. 3211; Department of Commerce Organization
Order 10-4.
2. Section 318.1 is amended by revising paragraphs (a)(3) and (b)
to read as follows:
Sec. 318.1 University Center performance evaluations.
(a) * * *
(3) For peer review, ensure the participation of at least one other
University Center, as appropriate, in the evaluation on a cost-
reimbursement basis.
(b) A purpose of the evaluation is to determine if the University
Center should continue to receive funding under the program.
3. Section 318.2 is amended by revising paragraphs (b) and (c) to
read as follows:
Sec. 318.2 Economic Development District performance evaluations.
* * * * *
(b) Assess the Economic Development District's management
standards, financial accountability, and program performance; and
(c) For peer review, ensure the participation of at least one other
Economic Development District organization, as appropriate, in the
evaluation on a cost-reimbursement basis.
Dated: December 6, 1999.
Chester J. Straub, Jr.,
Acting Assistant Secretary for Economic Development.
[FR Doc. 99-32024 Filed 12-13-99; 8:45 am]
BILLING CODE 3510-24-P
